PRAECIS PHARMACEUTICALS INCORPORATED (NASDAQ: PRCS) today announced
consolidated financial results for the three and nine months ended
September 30, 2006. Third Quarter 2006 Results The Company�s net
loss for the three months ended September 30, 2006 was
approximately $6,753,000, or $0.63 per diluted share, compared to a
net loss of approximately $5,168,000, or $0.49 per diluted share,
for the three months ended September 30, 2005. The increased net
loss for the third quarter of 2006 was due primarily to a decrease
in product sales and licensing revenues related to Plenaxis�. Also
contributing to the increased net loss for the third quarter was
incremental non-cash compensation expense associated with the
Company�s adoption commencing in 2006 of Financial Accounting
Standards Board Statement No. 123R, Share-Based Payment (SFAS No.
123R). For the three months ended September 30, 2006, approximately
$785,000 of expense associated with equity-based compensation plans
was included in the Company�s financial results under SFAS No.
123R, of which approximately $591,000 was allocated to research and
development expense, and approximately $194,000 was allocated to
general and administrative expense. There was also a reduction in
sales and marketing expenses from the prior year quarter due to the
voluntary discontinuation of promotional activities for Plenaxis�
in the United States. Expenses incurred during the third quarter of
2006 related primarily to the Company�s preclinical and clinical
development efforts, advancement of existing drug discovery
programs to support the Company�s pilot agreements and ongoing
partnering efforts, continued technology enhancement, and general
and administrative expenses. For the nine months ended September
30, 2006, the net loss was approximately $28,878,000, or $2.73 per
diluted share, compared to a net loss of approximately $59,883,000,
or $5.71 per diluted share, for the nine months ended September 30,
2005. The reduced net loss for the nine months ended September 30,
2006 was principally the result of the $32,173,000 of restructuring
and asset impairment expenses recorded during the second quarter of
2005. At September 30, 2006, the Company had cash and cash
equivalents of $40,370,000, compared to cash, cash equivalents and
marketable securities of approximately $62,580,000 at December 31,
2005. Commenting on the activities for the quarter, Kevin F.
McLaughlin, President and Chief Executive Officer stated, �During
the third quarter, we continued to make significant progress in our
PPI-2458 clinical development program, our DirectSelect� pilot drug
discovery programs and our S1P-1 research and development program.
Yesterday we presented interim data from our Phase 1 clinical trial
of PPI-2458 in non-Hodgkin�s lymphoma and solid tumors at the 18th
EORTC-NCI-AACR Symposium held in Prague. We are very encouraged by
the preliminary information from this clinical trial and are
utilizing the growing clinical and preclinical data on this
compound to establish a focused Phase 2 clinical development plan
in oncology. In addition, we are further evaluating the potential
initiation of clinical studies of PPI-2458 in rheumatoid arthritis.
We recently presented the scientific rationale for studying
PPI-2458 as a targeted molecular therapy for this disease at the
14th International Inflammation Research Association Conference,
where we received the Cerep Award for Research with the greatest
therapeutic potential. As previously disclosed, our goal is to
partner this program in one or more indications as clinical
development advances. With respect to DirectSelect�, the majority
of our recent efforts in this area have been devoted to advancing
our partnered pilot programs and seeking to enter into broader
pharmaceutical partnerships for drug discovery and development
utilizing, or possibly other transactions with respect to, this
technology that will provide cash and/or cost reduction benefits to
us. We are pleased with our progress to date under our existing
pilot study agreements and we continue to initiate and advance
discussions with other potential partners. �In parallel with the
development of our DirectSelect� technology, we have also been
conducting a highly focused discovery research effort to identify
small molecules that interact with sphingosine-1-phosphate
receptor-1 (S1P-1). S1P-1 is a G-protein coupled receptor that is
implicated in immunomodulation, making it an attractive therapeutic
target for treating autoimmune disorders such as multiple sclerosis
and for preventing rejection in solid organ transplants. Utilizing
conventional medicinal chemistry lead optimization techniques, we
have identified a number of selective S1P-1 agonist compounds. We
are currently evaluating several preclinical candidates with a goal
of identifying one or more lead compounds to advance into clinical
testing. It is our goal to enter into a collaborative arrangement
for the development and commercialization of such lead
compound(s).� Concluding his comments, Mr. McLaughlin stated, �As
previously announced, we are actively exploring strategic options
which may be available to the Company. No decision has been made as
to whether we will engage in a strategic transaction, and there can
be no assurance as to whether or when this process will result in a
successful transaction. We do not currently intend to disclose
developments or anticipated timing regarding the status or outcome
of this process unless and until our board of directors has
approved a specific transaction.� There will be a conference call
to discuss this press release today beginning at 9:00 a.m. (EST).
This call will be broadcast live over the Internet at
www.praecis.com under �Investor Relations.� A telephonic replay of
this call will be available beginning at 12:00 Noon (EST), until
midnight Thursday, November 16, 2006, by calling 888-203-1112
(domestic toll-free) or 719-457-0820, and entering the passcode
6471068. This press release, including the financial results
relating to PRAECIS� third quarter ended September 30, 2006, is
also available on PRAECIS� web site under �News Center.� About
PRAECIS PRAECIS PHARMACEUTICALS INCORPORATED is a biopharmaceutical
company focused on utilizing its proprietary technologies for 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, an innovative drug
discovery technology, DirectSelect�, which enables the generation
and practical use of ultra-large libraries for the discovery of
orally active compounds for drug development, and a research and
development program aimed at identifying one or more selective
S1P-1 agonist compounds to advance into clinical testing. This news
release contains forward-looking statements, including statements
regarding the Company�s plans to actively explore strategic options
which may be available to the Company, its plans for the continued
clinical development of PPI-2458 and the advancement of its program
to identify selective S1P-1 agonist compounds to advance into
clinical testing, and seeking partnerships relating to, as well as
the internal use in certain programs of, the Company�s
DirectSelect� technology. 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 and results to differ
from those expected or anticipated, including, but not limited to,
the Company�s ability to successfully consummate, in a timely
manner and on favorable terms, a strategic transaction, 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 or
enter into other transactions with respect to its DirectSelect�
technology, the Company's ability to continue development of
PPI-2458 and successfully partner this program, the Company�s
ability to identify one or more lead selective S1P-1 agonist
compounds and successfully partner its S1P-1 program, the Company�s
ability to successfully perform under its DirectSelect� pilot study
agreements, unexpected results in ongoing and future clinical or
preclinical trials, and the need for additional research and
testing, including as a result of unanticipated determinations by
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 various risks
discussed in the Company�s Quarterly Report on Form�10-Q for the
quarter ended September 30, 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� is a registered trademark
of PRAECIS PHARMACEUTICALS INCORPORATED. PRAECIS PHARMACEUTICALS
INCORPORATED Condensed Consolidated Statements of Operations (in
thousands, except per share data) (unaudited) � Three Months Ended
Nine Months Ended September 30, September 30, � 2005� � 2006� �
2005� � 2006� � Revenues: Product sales $ 282� $ -� $ 1,437� $ 209�
Licensing and other revenues � 1,806� � -� � 1,924� � 35� Total
revenues 2,088� -� 3,361� 244� � Costs and expenses: Cost of goods
sold 97� 45� 3,889� 5,615� Research and development 5,333� 5,610�
18,892� 18,157� Sales and marketing 203� -� 5,988� -� General and
administrative 1,489� 1,560� 5,456� 5,433� Restructuring and asset
impairment � -� � 110� � 28,680� � 1,688� Total costs and expenses
� 7,122� � 7,325� � 62,905� � 30,893� � Operating loss (5,034)
(7,325) (59,544) (30,649) � Interest (expense) income, net � (134)
� 572� � (339) � 1,771� � Net loss $ (5,168) $ (6,753) $ (59,883) $
(28,878) � Basic and diluted net loss per common share $ (0.49) $
(0.63) $ (5.71) $ (2.73) � Weighted average number of basic and
diluted common shares outstanding 10,494� 10,687� 10,488� 10,594�
PRAECIS PHARMACEUTICALS INCORPORATED Condensed Consolidated Balance
Sheets (in thousands) (unaudited) � December 31, 2005 September 30,
2006 � Cash and cash equivalents $ 57,088� $ 40,370� Marketable
securities 5,492� -� Accounts receivable and other current assets
1,080� 1,013� Net fixed assets 3,559� 1,595� Inventory and other
long-term assets � 2,325� � 793� � Total assets $ 69,544� $ 43,771�
� Current liabilities $ 9,579� $ 9,402� Long-term liabilities
8,802� 8,757� Total stockholders' equity � 51,163� � 25,612� �
Total liabilities and stockholders' equity $ 69,544� $ 43,771�
PRAECIS PHARMACEUTICALS INCORPORATED (NASDAQ: PRCS) today announced
consolidated financial results for the three and nine months ended
September 30, 2006. Third Quarter 2006 Results The Company's net
loss for the three months ended September 30, 2006 was
approximately $6,753,000, or $0.63 per diluted share, compared to a
net loss of approximately $5,168,000, or $0.49 per diluted share,
for the three months ended September 30, 2005. The increased net
loss for the third quarter of 2006 was due primarily to a decrease
in product sales and licensing revenues related to Plenaxis(R).
Also contributing to the increased net loss for the third quarter
was incremental non-cash compensation expense associated with the
Company's adoption commencing in 2006 of Financial Accounting
Standards Board Statement No. 123R, Share-Based Payment (SFAS No.
123R). For the three months ended September 30, 2006, approximately
$785,000 of expense associated with equity-based compensation plans
was included in the Company's financial results under SFAS No.
123R, of which approximately $591,000 was allocated to research and
development expense, and approximately $194,000 was allocated to
general and administrative expense. There was also a reduction in
sales and marketing expenses from the prior year quarter due to the
voluntary discontinuation of promotional activities for Plenaxis(R)
in the United States. Expenses incurred during the third quarter of
2006 related primarily to the Company's preclinical and clinical
development efforts, advancement of existing drug discovery
programs to support the Company's pilot agreements and ongoing
partnering efforts, continued technology enhancement, and general
and administrative expenses. For the nine months ended September
30, 2006, the net loss was approximately $28,878,000, or $2.73 per
diluted share, compared to a net loss of approximately $59,883,000,
or $5.71 per diluted share, for the nine months ended September 30,
2005. The reduced net loss for the nine months ended September 30,
2006 was principally the result of the $32,173,000 of restructuring
and asset impairment expenses recorded during the second quarter of
2005. At September 30, 2006, the Company had cash and cash
equivalents of $40,370,000, compared to cash, cash equivalents and
marketable securities of approximately $62,580,000 at December 31,
2005. Commenting on the activities for the quarter, Kevin F.
McLaughlin, President and Chief Executive Officer stated, "During
the third quarter, we continued to make significant progress in our
PPI-2458 clinical development program, our DirectSelect(TM) pilot
drug discovery programs and our S1P-1 research and development
program. Yesterday we presented interim data from our Phase 1
clinical trial of PPI-2458 in non-Hodgkin's lymphoma and solid
tumors at the 18th EORTC-NCI-AACR Symposium held in Prague. We are
very encouraged by the preliminary information from this clinical
trial and are utilizing the growing clinical and preclinical data
on this compound to establish a focused Phase 2 clinical
development plan in oncology. In addition, we are further
evaluating the potential initiation of clinical studies of PPI-2458
in rheumatoid arthritis. We recently presented the scientific
rationale for studying PPI-2458 as a targeted molecular therapy for
this disease at the 14th International Inflammation Research
Association Conference, where we received the Cerep Award for
Research with the greatest therapeutic potential. As previously
disclosed, our goal is to partner this program in one or more
indications as clinical development advances. With respect to
DirectSelect(TM), the majority of our recent efforts in this area
have been devoted to advancing our partnered pilot programs and
seeking to enter into broader pharmaceutical partnerships for drug
discovery and development utilizing, or possibly other transactions
with respect to, this technology that will provide cash and/or cost
reduction benefits to us. We are pleased with our progress to date
under our existing pilot study agreements and we continue to
initiate and advance discussions with other potential partners. "In
parallel with the development of our DirectSelect(TM) technology,
we have also been conducting a highly focused discovery research
effort to identify small molecules that interact with
sphingosine-1-phosphate receptor-1 (S1P-1). S1P-1 is a G-protein
coupled receptor that is implicated in immunomodulation, making it
an attractive therapeutic target for treating autoimmune disorders
such as multiple sclerosis and for preventing rejection in solid
organ transplants. Utilizing conventional medicinal chemistry lead
optimization techniques, we have identified a number of selective
S1P-1 agonist compounds. We are currently evaluating several
preclinical candidates with a goal of identifying one or more lead
compounds to advance into clinical testing. It is our goal to enter
into a collaborative arrangement for the development and
commercialization of such lead compound(s)." Concluding his
comments, Mr. McLaughlin stated, "As previously announced, we are
actively exploring strategic options which may be available to the
Company. No decision has been made as to whether we will engage in
a strategic transaction, and there can be no assurance as to
whether or when this process will result in a successful
transaction. We do not currently intend to disclose developments or
anticipated timing regarding the status or outcome of this process
unless and until our board of directors has approved a specific
transaction." There will be a conference call to discuss this press
release today beginning at 9:00 a.m. (EST). This call will be
broadcast live over the Internet at www.praecis.com under "Investor
Relations." A telephonic replay of this call will be available
beginning at 12:00 Noon (EST), until midnight Thursday, November
16, 2006, by calling 888-203-1112 (domestic toll-free) or
719-457-0820, and entering the passcode 6471068. This press
release, including the financial results relating to PRAECIS' third
quarter ended September 30, 2006, is also available on PRAECIS' web
site under "News Center." About PRAECIS PRAECIS PHARMACEUTICALS
INCORPORATED is a biopharmaceutical company focused on utilizing
its proprietary technologies for 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, 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,
and a research and development program aimed at identifying one or
more selective S1P-1 agonist compounds to advance into clinical
testing. This news release contains forward-looking statements,
including statements regarding the Company's plans to actively
explore strategic options which may be available to the Company,
its plans for the continued clinical development of PPI-2458 and
the advancement of its program to identify selective S1P-1 agonist
compounds to advance into clinical testing, and seeking
partnerships relating to, as well as the internal use in certain
programs of, the Company's DirectSelect(TM) technology. 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 and results to differ from those expected or
anticipated, including, but not limited to, the Company's ability
to successfully consummate, in a timely manner and on favorable
terms, a strategic transaction, 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 or enter into other
transactions with respect to its DirectSelect(TM) technology, the
Company's ability to continue development of PPI-2458 and
successfully partner this program, the Company's ability to
identify one or more lead selective S1P-1 agonist compounds and
successfully partner its S1P-1 program, the Company's ability to
successfully perform under its DirectSelect(TM) pilot study
agreements, unexpected results in ongoing and future clinical or
preclinical trials, and the need for additional research and
testing, including as a result of unanticipated determinations by
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 various risks
discussed in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 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. -0- *T PRAECIS
PHARMACEUTICALS INCORPORATED Condensed Consolidated Statements of
Operations (in thousands, except per share data) (unaudited) Three
Months Ended Nine Months Ended September 30, September 30,
------------------- ------------------- 2005 2006 2005 2006
--------- --------- --------- --------- Revenues: Product sales $
282 $ - $ 1,437 $ 209 Licensing and other revenues 1,806 - 1,924 35
--------- --------- --------- --------- Total revenues 2,088 -
3,361 244 Costs and expenses: Cost of goods sold 97 45 3,889 5,615
Research and development 5,333 5,610 18,892 18,157 Sales and
marketing 203 - 5,988 - General and administrative 1,489 1,560
5,456 5,433 Restructuring and asset impairment - 110 28,680 1,688
--------- --------- --------- --------- Total costs and expenses
7,122 7,325 62,905 30,893 --------- --------- --------- ---------
Operating loss (5,034) (7,325) (59,544) (30,649) Interest (expense)
income, net (134) 572 (339) 1,771 --------- --------- ---------
--------- Net loss $(5,168) $(6,753) $(59,883) $(28,878) =========
========= ========= ========= Basic and diluted net loss per common
share $ (0.49) $ (0.63) $ (5.71) $ (2.73) ========= =========
========= ========= Weighted average number of basic and diluted
common shares outstanding 10,494 10,687 10,488 10,594 *T -0- *T
PRAECIS PHARMACEUTICALS INCORPORATED Condensed Consolidated Balance
Sheets (in thousands) (unaudited) December 31, September 30, 2005
2006 -------------- ------------- Cash and cash equivalents $
57,088 $ 40,370 Marketable securities 5,492 - Accounts receivable
and other current assets 1,080 1,013 Net fixed assets 3,559 1,595
Inventory and other long-term assets 2,325 793 --------------
------------- Total assets $ 69,544 $ 43,771 ==============
============= Current liabilities $ 9,579 $ 9,402 Long-term
liabilities 8,802 8,757 Total stockholders' equity 51,163 25,612
-------------- ------------- Total liabilities and stockholders'
equity $ 69,544 $ 43,771 ============== ============= *T
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