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8-K - FORM 8-K - MiddleBrook Pharmaceuticals, Inc. | c97877e8vk.htm |
Exhibit 99.1
Press Release | ||
7 Village Circle, Suite 100
|
Investor Relations/Media Contact: | |
Westlake, Texas 76262
|
Faith Pomeroy-Ward: 817-837-1208 |
MiddleBrook Pharmaceuticals Reports Fourth Quarter 2009 and Full-Year Results;
Announces Reduction in Force;
Engages Broadpoint Gleacher to Assist in the Evaluation of Strategic Options
Announces Reduction in Force;
Engages Broadpoint Gleacher to Assist in the Evaluation of Strategic Options
WESTLAKE, Texas (March 12, 2010) MiddleBrook Pharmaceuticals, Inc. (Nasdaq: MBRK) today
announced its 2009 fourth quarter and full-year results, that it is further restructuring to
reduce expenses, and that it is evaluating strategic alternatives to maximize shareholder
value.
Reduction in Force:
MiddleBrook announced that effective Monday, March 15, 2010, it will be eliminating its field
sales force and significantly reducing its corporate staff to preserve cash resources as it
explores its strategic options. The Company will rely on its partnership with
DoctorDirectory.com, Inc. for continued MOXATAG® promotion through DoctorDirectory.coms
virtual marketing solution, IncreaseRx®, in its efforts to commercialize and gain market
acceptance of MOXATAG.
As part of the reduction in force, John Thievon, the Companys current president and chief
executive officer and a director, announced his resignation effective Monday, March 15, 2010,
to further reduce operating expenses. David Becker, the Companys current chief financial
officer, will assume the role of acting president and chief executive officer.
R. Gordon Douglas, M.D., the Companys chairman of the board, said, On behalf of the Company
and the entire board of directors, Id like to thank John for taking on this challenge and
building MOXATAG to its current level of over 6,500 prescriptions per week during very tough
economic times. Dr. Douglas further stated, John has committed to being available to
assist the Board and management during the strategic process to help ensure the best value
for the Company and its stakeholders.
Strategic Alternatives:
Additionally, MiddleBrook has engaged Broadpoint Gleacher Securities Group, Inc. as its
financial advisor to assist the board of directors in identifying and evaluating strategic
alternatives for the Company, including a possible merger or sale of the Company. The board
of directors has not set a definitive timetable for the completion of its evaluation, and
there can be no assurance that the process will result in a transaction. The Company does
not intend to disclose developments regarding this process unless and until the board of
directors has approved a specific transaction.
Financial Results:
MiddleBrook reported fourth quarter 2009 revenue of $2.6 million, compared to revenue of $1.7
million in the fourth quarter of 2008. Revenue for the full year of 2009 totaled $14.8
million, a 67.7% increase compared to the prior year revenue of $8.8 million. The
quarter-over-quarter and full-year increases in revenue are primarily driven by sales of
MOXATAG, which MiddleBrook launched in March 2009.
Net loss was $15.8 million for the 2009 fourth quarter, compared to a net loss of $11.6
million in the fourth quarter of 2008. Net loss per share during the fourth quarter of 2009
was $0.18, compared to a net loss per share of $0.13 in the 2008 fourth quarter. Net loss
was $62.3 million for 2009, compared to a net loss attributable to MiddleBrook of $41.6
million for 2008. Net loss per share for the full year of 2009 was $0.72, compared to a net
loss of $0.64 per share for 2008. The number of shares used in the 2009 fourth quarter and
full-year per share calculation was 86.5 million. The number of shares used in the 2008
fourth quarter per share calculation was 86.4 million, while the 2008 full-year per share
calculation included 65.2 million and the weighted-average impact of the 30.3 million new
shares purchased by EGI in September 2008. As a result of the Companys recurring operating
losses and managements substantial doubt about the Companys ability to continue as a going
concern for at least 12 months following the balance sheet date of Dec. 31, 2009, the
Companys auditors have included a going concern explanatory paragraph in their audit opinion
for the year ended Dec. 31, 2009.
The Company reported cost of goods sold in the amount of $0.7 million in the 2009 fourth
quarter, compared to $0.3 million in the 2008 fourth quarter. Cost of goods sold for the
full year of 2009 was $2.3 million compared to $1.6 million in the prior year. The higher
cost of goods sold is due to higher sales in 2009.
Research and development (R&D) expenses in the 2009 fourth quarter were $0.4 million,
compared to 2008 fourth quarter R&D expenses of $4.8 million. The decrease in the 2009
fourth quarter R&D expenses is primarily due to the reclassification of all personnel and
related expenses from R&D to Selling, general and administrative (SG&A) after the Company
indefinitely delayed the development of its KEFLEX PULSYS product candidate following the
FDAs response to the Companys Special Protocol Assessment for the KEFLEX PULSYS development
program. The 2008 fourth quarter also included expenses associated with the Companys
decision to vacate portions of its R&D facilities in Maryland. R&D expense was $5.3 million
for the full year of 2009, compared to $19.1 million in the prior year. The decrease in
full-year R&D expenses was primarily due to the reclassification of all personnel and related
expenses from R&D to SG&A as detailed above and a reduction in R&D activities, combined with
decreased depreciation and lower facility costs after vacating portions of the Companys R&D
facilities in 2008.
SG&A expenses were $17.2 million in the fourth quarter of 2009, compared to $8.7 million in
the 2008 fourth quarter. The increase in the 2009 fourth quarter SG&A expenses was primarily
driven by an increase in employee-related expenses, such as salaries, benefits and stock
compensation, combined with marketing costs related to the marketing of MOXATAG and the
addition of internal costs to SG&A which had previously been classified as R&D. SG&A
expenses for the full year of 2009 were $69.9 million, up from $24.4 million in 2008. The
year-over-year increase is due primarily to increased personnel and marketing expenses for
MOXATAG.
About MiddleBrook Pharmaceuticals:
MiddleBrook Pharmaceuticals, Inc. (Nasdaq: MBRK) is a pharmaceutical company focused on
commercializing anti-infective products that fulfill unmet medical needs. MiddleBrooks
proprietary delivery technology, PULSYS, enables the pulsatile delivery, or delivery in rapid
bursts, of certain drugs. MiddleBrook currently markets MOXATAG, the first and only
FDA-approved once-daily amoxicillin, and KEFLEX (cephalexin, USP), the immediate-release
brand of cephalexin. For more information about MiddleBrook, please visit
www.middlebrookpharma.com.
KEFLEX, KEFLEX 750 MG, MiddleBrook, MiddleBrook Pharmaceuticals (stylized), MiddleBrook
Pharmaceuticals, Inc., MOXATAG, and PULSYS are MiddleBrooks trademarks and have been
registered in the U.S. Patent and Trademark Office or are the subject of pending U.S.
trademarks applications. Each of the other trademarks, tradenames, or service marks
appearing in this document belongs to the respective holder, as used herein, except as
otherwise indicated by the context. References to we, us, our, MiddleBrook, or the
Company, refer to MiddleBrook Pharmaceuticals, Inc., and its subsidiaries.
About MOXATAG:
MOXATAG (amoxicillin extended-release) Tablets, 775mg, is a once-a-day extended-release
formulation of amoxicillin for oral administration consisting of three components: one
immediate-release component and two delayed-release components. The three components of
MOXATAG are combined in a specific ratio to prolong the release of amoxicillin compared to
immediate-release amoxicillin. MOXATAG is intended to provide a lower treatment dose,
once-daily alternative to currently approved penicillin and amoxicillin regimens for the
treatment of adults and pediatric patients 12 years and older with tonsillitis and/or
pharyngitis secondary to Streptococcus pyogenes. For more information about MOXATAG, please
visit MOXATAG.com.
About KEFLEX:
KEFLEX (cephalexin, USP) Capsules, is MiddleBrooks immediate-release first-generation
cephalosporin antibiotic. KEFLEX has been shown to be active against strains of both gram-
positive and gram- negative aerobes in vitro and in clinical infections. KEFLEX is indicated
for treatment of the following infections: respiratory tract infections, otitis media, skin
and skin structure infections, bone infections, and genitourinary tract infections. More
information on KEFLEX and prescribing information are available at
KEFLEX.com.
About Broadpoint Gleacher:
Broadpoint Gleacher Securities Group, Inc. (NASDAQ: BPSG) is an independent investment bank
that provides corporations and institutional investors with strategic, research-based
investment opportunities, capital raising, and financial advisory services, including merger
and acquisition, restructuring, recapitalization and strategic alternative analysis services.
The Company offers a diverse range of products through the Debt Capital Markets, Investment
Banking and Broadpoint DESCAP divisions of Broadpoint Capital, Inc., its Equity Capital
Markets subsidiary, Broadpoint AmTech, and FA Technology Ventures Inc., its venture capital
subsidiary. For more information, please visit www.bpsg.com.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this press release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995, such as
statements about the Board of Directors exploration of strategic alternatives and any future
announcements regarding the status of the process, MiddleBrooks future financial
performance, the success of the commercialization of MOXATAG and its market position, and the
estimated expense savings from
the restructuring. In some cases, forward-looking statements are identified by words such as
intend, believe, anticipate, expect, estimate, will, may, should, could,
would and similar expressions. Such forward-looking statements reflect MiddleBrooks
current plans, beliefs, estimates and views and involve a number of known and unknown risks,
uncertainties and other factors that may cause actual results to differ materially from those
expressed or implied by such forward-looking statements. These factors include, among others,
the lack of interest of potential buyers or strategic partners to engage in a transaction
with MiddleBrook, failure to successfully commercialize MOXATAG or a decline in sales of
KEFLEX 750 mg, MiddleBrooks ability to manage expenses, and other risks identified in the
sections titled Managements Discussion and Analysis of Financial Condition and Results of
Operations and Risk Factors in MiddleBrooks Annual Report on Form 10-K for the year ended
Dec. 31, 2008 and in MiddleBrooks Quarterly Report on Form 10-Q for the quarter ended Sept.
30, 2009. You should not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. MiddleBrook undertakes no obligation to
update publicly or review any of the forward-looking statements made in this press release,
whether as a result of new information, future developments or otherwise.
###
Source: MiddleBrook Pharmaceuticals, Inc.
Investor/Media Contact: Faith Pomeroy-Ward 817-837-1208
Investor/Media Contact: Faith Pomeroy-Ward 817-837-1208
MiddleBrook Pharmaceuticals, Inc
Condensed Consolidated Statements of Operation
(amounts in thousands, except per-share data)
Condensed Consolidated Statements of Operation
(amounts in thousands, except per-share data)
For the three months ended | For the year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Product sales |
$ | 2,612 | $ | 1,666 | $ | 14,844 | $ | 8,850 | ||||||||
2,612 | 1,666 | 14,844 | 8,850 | |||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of product sales |
701 | 290 | 2,254 | 1,635 | ||||||||||||
Research and development |
428 | 4,809 | 5,258 | 19,079 | ||||||||||||
Selling, general and administrative |
17,226 | 8,689 | 69,885 | 24,385 | ||||||||||||
Total costs and expenses |
18,355 | 13,788 | 77,397 | 45,099 | ||||||||||||
Loss from operations |
(15,743 | ) | (12,122 | ) | (62,553 | ) | (36,249 | ) | ||||||||
Interest income |
10 | 337 | 361 | 724 | ||||||||||||
Interest expense |
(38 | ) | | (121 | ) | | ||||||||||
Warrant expense |
| | | (6,714 | ) | |||||||||||
Other expense |
| | 161 | | ||||||||||||
Loss before income taxes |
(15,771 | ) | (11,785 | ) | (62,152 | ) | (42,239 | ) | ||||||||
Income taxes |
| (174 | ) | 174 | (174 | ) | ||||||||||
Net loss |
(15,771 | ) | (11,611 | ) | (62,326 | ) | (42,065 | ) | ||||||||
Net loss attributable to noncontrolling interest |
| | | 485 | ||||||||||||
Net loss attributable to MiddleBrook Pharmaceuticals, Inc. |
$ | (15,771 | ) | $ | (11,611 | ) | $ | (62,326 | ) | $ | (41,580 | ) | ||||
Basic and diluted net loss per share attributable to MiddleBrook
Pharmaceuticals, Inc. stockholders |
$ | (0.18 | ) | $ | (0.13 | ) | $ | (0.72 | ) | $ | (0.64 | ) | ||||
Shares used in calculation of basic and diluted net loss per share
|
86,512 | 86,422 | 86,485 | 65,180 | ||||||||||||
MiddleBrook Pharmaceuticals, Inc
Condensed Consolidated Balance Sheet
(amounts in thousands, except per-share data)
Condensed Consolidated Balance Sheet
(amounts in thousands, except per-share data)
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 14,798 | $ | 30,520 | ||||
Marketable securities |
| 44,242 | ||||||
Accounts receivable, net |
2,269 | 426 | ||||||
Inventories, net |
4,242 | 335 | ||||||
Prepaid expenses and other current assets |
4,749 | 2,638 | ||||||
Total current assets |
26,058 | 78,161 | ||||||
Property and equipment, net |
4,555 | 4,192 | ||||||
Restricted cash |
872 | 872 | ||||||
Deposits and other assets |
617 | 523 | ||||||
Intangible assets, net |
10,073 | 11,445 | ||||||
Total assets |
$ | 42,175 | $ | 95,193 | ||||
Current liabilities: |
||||||||
Accounts payable |
$ | 1,031 | $ | 2,993 | ||||
Accrued expenses and other current liabilities |
13,949 | 6,141 | ||||||
Total current liabilities |
14,980 | 9,134 | ||||||
Deferred contract revenue |
11,625 | 11,625 | ||||||
Deferred rent and credit on lease concession |
162 | 174 | ||||||
Other long-term liabilities |
2,355 | 2,329 | ||||||
Total liabilities |
29,122 | 23,262 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity: |
||||||||
Preferred stock, $0.01 par value;
25,000 shares authorized, no shares issued or
outstanding at December 31, 2009 and 2008 |
| | ||||||
Common stock, $0.01 par value; 225,000 shares
authorized, 86,512 and 86,433 shares issued
and outstanding at December 31, 2009 and
2008, respectively |
865 | 864 | ||||||
Capital in excess of par value |
311,428 | 307,705 | ||||||
Accumulated deficit |
(299,240 | ) | (236,914 | ) | ||||
Accumulated other comprehensive income |
| 276 | ||||||
Total stockholders equity |
13,053 | 71,931 | ||||||
Total liabilities and stockholders equity |
$ | 42,175 | $ | 95,193 | ||||
MiddleBrook Pharmaceuticals, Inc
Condensed Consolidated Statements of Cash flow
(amounts in thousands)
Condensed Consolidated Statements of Cash flow
(amounts in thousands)
For the year ended | ||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (62,326 | ) | $ | (42,065 | ) | ||
Adjustments to reconcile net loss to net cash used
in operating activities: |
||||||||
Depreciation and amortization |
4,358 | 6,316 | ||||||
Warrant expense |
| 6,714 | ||||||
Stock-based compensation |
3,660 | 2,203 | ||||||
Deferred rent and credit on lease concession |
(11 | ) | (256 | ) | ||||
Amortization of premium on marketable securities |
(17 | ) | (118 | ) | ||||
Realized gains on investments |
(63 | ) | | |||||
Deferred tax expense (benefit) |
174 | (174 | ) | |||||
Loss on disposal of fixed assets and exiting lease |
966 | 3,740 | ||||||
Gain on termination of capital leases |
(58 | ) | | |||||
Changes in: |
||||||||
Accounts receivable |
(1,842 | ) | 262 | |||||
Inventories |
(3,907 | ) | 353 | |||||
Prepaid expenses and other current assets |
(2,328 | ) | (1,279 | ) | ||||
Deposits other than on property & equipment, and other assets |
(94 | ) | (348 | ) | ||||
Accounts payable |
(1,962 | ) | 1,333 | |||||
Accrued expenses |
5,292 | (677 | ) | |||||
Net cash used in operating activities |
(58,158 | ) | (23,996 | ) | ||||
Cash flows from investing activities: |
||||||||
Repurchase of Keflex assets from Deerfield |
| (12,190 | ) | |||||
Purchase of marketable securities |
(5,206 | ) | (46,243 | ) | ||||
Sale and maturities of marketable securities |
49,267 | 2,380 | ||||||
Purchases of property and equipment |
(98 | ) | (813 | ) | ||||
Proceeds from sale of fixed assets |
| 1,366 | ||||||
Net cash provided by (used in) investing activities |
43,963 | (55,500 | ) | |||||
Cash flows from financing activities: |
||||||||
Payments on capital lease obligations |
(1,591 | ) | | |||||
Proceeds from private placements of common stock, net of issuance expenses |
| 115,944 | ||||||
Payment to settle warrant liability |
| (8,814 | ) | |||||
Proceeds from exercise of common stock options |
64 | 771 | ||||||
Proceeds from exercise of common stock warrants |
| 163 | ||||||
Net cash (used in) provided by financing activities |
(1,527 | ) | 108,064 | |||||
Net (decrease) increase in cash and cash equivalents |
(15,722 | ) | 28,568 | |||||
Cash and cash equivalents, beginning of period |
30,520 | 1,952 | ||||||
Cash and cash equivalents, end of period |
$ | 14,798 | $ | 30,520 | ||||