PRAECIS PHARMACEUTICALS INCORPORATED Announces Cessation of Plenaxis(R) Disposition Efforts; Plans to Explore Financing Alterna
June 20 2006 - 7:00AM
Business Wire
PRAECIS PHARMACEUTICALS INCORPORATED (NASDAQ: PRCS) today reported
that it will not be able to enter into by June 30, 2006 a license
or sale transaction with respect to its Plenaxis(R) assets. The
Company said it will cease its previously announced process to
identify and consummate such a transaction. Accordingly, as
previously disclosed, the Company will work with the United States
Food and Drug Administration to discontinue the limited
distribution of the product in the United States as soon as
reasonably practicable and will not pursue further the
commercialization of Plenaxis(R) outside the United States. The
Company will also promptly discontinue any remaining
Plenaxis(R)-related activities, except as necessary to support the
wind-down of product distribution in the United States. During this
wind-down, the Company will continue to evaluate potential
opportunities for these assets to the extent such opportunities
arise. Due to the termination of its active efforts to license or
sell its Plenaxis(R) assets, the Company currently estimates that
it will record a non-cash impairment charge of approximately $3.6
million in the second quarter of 2006 related to the remaining
value of capitalized Plenaxis(R) inventory and equipment. The
Company will also record an additional charge in the second quarter
of approximately $3.9 million related to the present value of its
remaining commitments under certain of its Plenaxis(R)
manufacturing and supply agreements. The Company continues to
believe that its existing cash and investments will be sufficient
to meet its working capital and capital expenditure needs, at
current levels, through approximately the end of 2007. In an effort
to ensure that the Company has available resources to pursue its
operations beyond 2007, the Company intends to actively explore
financing alternatives, as well as other strategic options which
may be available to achieve and enhance shareholder value. The
Company has engaged Canaccord Adams, an international investment
banking firm with significant expertise in the life sciences
sector, to advise and assist the Company in these efforts. The
Company stated that there can be no assurance that these efforts
will result in additional financing for the Company or in any other
transaction. The Company does not currently intend to disclose
developments with respect to these efforts unless and until its
Board of Directors has approved a specific transaction. About
PRAECIS PRAECIS PHARMACEUTICALS INCORPORATED is a biopharmaceutical
company focused on the discovery and development of novel compounds
that have the potential to address unmet medical needs or improve
existing therapies. PRAECIS has a novel MetAP-2 inhibitor,
PPI-2458, in clinical development for cancer indications, including
non-Hodgkin's lymphoma and solid tumors, as well as an innovative
drug discovery technology, DirectSelect(TM), which enables the
generation and practical use of ultra-large libraries for the
discovery of orally active compounds for drug development. This
news release contains forward-looking statements, including, but
not limited to, statements regarding the expected timing and effect
of the Company's discontinuation of its Plenaxis(R) activities, the
Company's expected available resources through approximately the
end of 2007 and the Company's plans to actively explore financing
alternatives for the Company, as well as other strategic options
which may be available to achieve and enhance shareholder value.
These statements are based on the Company's current beliefs and
expectations as to future outcomes and are not guarantees of such
outcomes or of future performance. These statements are subject to
numerous risks, uncertainties and assumptions that could cause
actual events or results to differ from those expected or
anticipated, including, but not limited to, the Company's ability
to successfully execute on, in a timely manner and on favorable
terms, a financing or other transaction for the Company, the
Company's ability to continue to manage operating expenses and to
retain key employees, unexpected expenditures, the Company's
ability to continue development of and successfully partner
PPI-2458 and its DirectSelect(TM) drug discovery technology,
unexpected results in ongoing and future clinical or preclinical
trials, the need for additional research and testing, including as
a result of unanticipated determinations by the FDA or foreign
regulatory authorities, as well as the risks set forth from time to
time in the Company's filings with the Securities and Exchange
Commission, including but not limited to the risks discussed in the
Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 2006. The Company undertakes no obligation to update any
forward-looking statement made in this press release to reflect new
information, events or circumstances after the date of this
release. Plenaxis(R) is a registered trademark of PRAECIS
PHARMACEUTICALS INCORPORATED.
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