Zonagen Reports Third Quarter 2005 Financial Results and Provides Update on Proellex and Androxal Clinical Development Programs
November 11 2005 - 6:00AM
Business Wire
Zonagen, Inc. (Nasdaq:ZONA)(PCX:ZONA) today reported financial
results for the three-month and nine-month periods ended September
30, 2005 and provided an update on its clinical development efforts
for Proellex(TM) and Androxal(TM). "We continue to move toward our
goal of initiating three clinical trials by year end 2005 which
include a U.S. Phase III trial of Androxal for male testosterone
deficiency, a U.S. efficacy trial of Proellex for uterine fibroids
and a European Phase II trial of Proellex for endometriosis," said
Joseph Podolski, President and CEO of Zonagen, Inc. He continued,
"We anticipate initial data from these three trials during the
summer of 2006." Zonagen is preparing a submission supporting a
Phase III study for its drug Androxal. The Company also hopes to
submit the documents necessary for initiation of the study to the
FDA within the next few weeks and believes that it will commence
the study before year end 2005. The study will consist of
approximately 200 patients at up to 20 clinical sites in the U.S.
and abroad. The Phase III study is being designed to collect
additional safety data on Androxal for the treatment of
testosterone deficiency in men with secondary hypogonadism.
Additional endpoints addressing certain clinical symptoms
associated with low testosterone will also be assessed in the
trial. The study will also compare Androxal against Androgel, the
gold standard for patients suffering from low testosterone. We
believe that at least two additional Phase III pivotal studies
beyond the currently planned study will be required before an NDA
can be submitted. A contract has been awarded to a clinical
research organization (CRO) to begin the Phase III study as soon as
the FDA has reviewed and accepted the submission. Initial review of
the Company's special protocol assessment (SPA) filing for its
first Phase III pivotal study of efficacy has been completed by the
FDA, and the Company is in the process of responding to their
comments. The FDA has suggested that certain endpoints suggested by
Zonagen in its SPA filing, such as reduced libido, need to be
validated as clinical endpoints before being used in a Phase III
pivotal study. The Company plans on complying with the FDA's
request, and revising its Phase III pivotal protocol to incorporate
the FDA's suggestions, before continuing under the SPA. A decision
on commencement of the SPA protocol is dependent on successful
completion or progress on the above described Phase III study. In
May 2005 the Company held a pre-IND meeting with the FDA regarding
the next clinical study to be conducted in the U.S. using Proellex
for the treatment of uterine fibroids. The Company believes that
the meeting with the FDA constructively identified the requirements
that must be completed before the Company can file an IND and begin
a clinical study by year end 2005. The Company completed its 23
volume IND submission which included extensive preclinical animal
data supporting the safety of Proellex as well as a final study
report for the previously reported trial of Proellex in women with
uterine fibroids and delivered the submission to the FDA on
November 10, 2005. The Company can not begin its Proellex Phase II
clinical study until the FDA has reviewed and accepted the
submission. A contract has been awarded to a CRO to begin the Phase
II study as soon as the FDA has reviewed and accepted the
submission. Financial Results Total revenues and other income for
the three-month period ended September 30, 2005 increased to
$175,000 as compared to $29,000 for the same period in the prior
year and increased to $460,000 for the nine-month period ended
September 30, 2005 as compared to $228,000 for the same period in
the prior year. The primary increase in revenues is due to an
increase in interest rate yields and an increase in cash reserves
which the Company received from its public offering in February
2005 offset by a reduction in SBIR grant revenue which is due to
its anticipated conclusion and is essentially depleted. Research
and development ("R&D") expenses primarily consist of clinical
regulatory affairs activities and preclinical and clinical study
development expenses. R&D expenses increased 72% to $1.6
million for the three-month period ended September 30, 2005 as
compared to $929,000 for the same period in the prior year and
increased 121% to $4.2 million for the nine-month period ended
September 30, 2005 as compared to $1.9 million for the same period
in the prior year. The increase in R&D expenses for the
three-month period ended September 30, 2005 as compared to the same
period in the prior year is primarily due to an increase of
$732,000 and $274,000 related to our clinical development programs
for Androxal and Proellex, respectively, partially offset by a
decrease of $281,000 in costs associated with the 2004 write-off of
our patent portfolio related to our vaccine adjuvants and prostate
cancer vaccines. The increase in R&D expenses for the
nine-month period ended September 30, 2005 as compared to the same
period in the prior year is primarily due to an increase of $1.5
million and $1.2 million related to our clinical development
programs for Androxal and Proellex, respectively, partially offset
by a decrease of $337,000 in costs associated with the 2004
write-off of our patent portfolio related to our vaccine adjuvants,
prostate cancer vaccines and hCG immuno-contraceptive vaccine.
General and administrative expenses decreased 15% to $461,000 for
the three-month period ended September 30, 2005 as compared to
$540,000 for the same period in the prior year and increased 8% to
$1.4 million for the nine-month period ended September 30, 2005 as
compared to $1.3 million for the same period in the prior year. The
decrease in expenses for the three-month period ended September 30,
2005 is primarily due to a decrease in costs associated with
potential funding activities in the amount of $117,000, offset by
an increase in costs associated with strategic administrative fees
in the amount of $25,000. The increase in expenses for the
nine-month period ended September 30, 2005 is primarily due to an
increase in costs associated with strategic administrative fees in
the amount of $86,000, personnel costs in the amount of $47,000,
legal and accounting services in the amount of $43,000 and investor
relations costs in the amount of $37,000, offset by a decrease in
costs associated with potential funding activities in the amount of
$117,000 and a $27,000 decrease in directors' and officers'
insurance. Net loss for the three-month period ended September 30,
2005 was ($1.9) million or ($0.19) per share as compared to a net
loss of ($1.4) million or ($0.29) per share for the same period in
the prior year. Net loss for the nine-month period ended September
30, 2005 was ($5.1) million or ($0.54) per share as compared to a
net loss of ($3.0) million or ($0.57) per share for the same period
in the prior year. The increase in loss per share for the
three-month and nine-month periods ended September 30, 2005 was
primarily due to an increase in clinical research activities
relating to the Company's two products, Androxal and Proellex. The
Company had cash, cash equivalents and marketable securities of
approximately $19.1 million at September 30, 2005 as compared to
$5.5 million at December 31, 2004 and had 10,079,601 shares of
common stock outstanding on September 30, 2005. Zonagen, Inc. is
engaged in the development of pharmaceutical products that address
diseases and conditions associated with the treatment of hormonal
and reproductive system disorders. A copy of this press release may
be obtained via facsimile by dialing 1-888-329-0920 or via the
internet by accessing www.zonagen.com. Any statements that are not
historical facts contained in this release are forward-looking
statements that involve risks and uncertainties, including
Zonagen's ability to have success in the clinical development of
its technologies, Zonagen's ability to raise additional capital on
acceptable terms or at all, Zonagen's ability to have success in
meeting governmental regulations and the costs and time required to
meet such regulatory requirements, manufacturing uncertainties
related to Proellex(TM), uncertainty relating to Zonagen's patent
portfolio and such other risks which are identified in Zonagen's
Annual Report on Form 10-K for the year ended December 31, 2004.
The Form 10-K is available at the Company's web site at
www.zonagen.com, at the SEC's web site at www.sec.gov or is
available by request made to Zonagen's Corporate Secretary. Zonagen
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. -0- *T ZONAGEN, INC. AND SUBSIDIARY (A
DEVELOPMENT STAGE COMPANY) CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts) Three Months Ended Nine
Months Ended ----------------------- -----------------------
September 30, September 30, 2005 2004 2005 2004 -----------
----------- ----------- ----------- (Unaudited) (Unaudited)
(Unaudited) (Unaudited) Revenues and other income Research and
development grants $- $2 $4 $118 Interest income 175 27 456 75
Other Income - - - 35 ----------- ----------- -----------
----------- Total revenues and other income 175 29 460 228
----------- ----------- ----------- ----------- Expenses Research
and development 1,641 929 4,231 1,914 General and administrative
461 540 1,357 1,268 ----------- ----------- ----------- -----------
Total expenses 2,102 1,469 5,588 3,182 ----------- -----------
----------- ----------- Net loss $(1,927) $(1,440) $(5,128)
$(2,954) =========== =========== =========== =========== Net loss
per share - basic and diluted $(0.19) $(0.29) $(0.54) $(0.57)
=========== =========== =========== =========== Shares used in loss
per share calculation: Basic 10,080 4,993 9,501 5,159 Diluted
10,080 4,993 9,501 5,159 CONSOLIDATED BALANCE SHEETS September 30,
December 31, 2005 2004 -------------- -------------- (Unaudited)
Cash and cash equivalents $3,000 $736 Marketable securities 16,053
4,800 Other current assets 203 34 Fixed assets (net) 21 18 Other
assets 564 1,018 -------------- -------------- Total assets $19,841
$6,606 ============== ============== Accounts payable and accrued
expenses $621 $614 Stockholders' equity 19,220 5,992 --------------
-------------- Total liabilities and stockholders' equity $19,841
$6,606 ============== ============== *T
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