Emisphere Technologies' key product developments and financial results for the third quarter of 2009

Nov 9 2009

Emisphere Technologies, Inc. (OTC BB: EMIS) today announced financial and operational results for the third quarter and nine months ended September 30, 2009.

THIRD QUARTER FINANCIAL RESULTS

For the three months ended September 30, 2009, Emisphere reported a net loss of $4.0 million, or $0.11 per basic and diluted share, compared to a net loss of $5.1 million, or $0.17 per basic and diluted share for the same period last year.

The operating loss for the three months ended September 30, 2009 was $3.4 million, compared to an operating loss of $5.7 million in the same period last year. Total operating expenses for the three months ended September 30, 2009 were $3.4 million; a decrease of approximately $2.4 million, or 42%, compared to $5.8 million for the same period last year. Total operating expenses for the three months ended September 30, 2009 include research and development costs of $0.8 million and general and administrative expenses of $2.5 million, compared to $2.9 million and $2.7 million respectively, for the same period last year.

Other expense for the three months ended September 30, 2009 was $0.6 million, compared to other income of $0.6 million for the same period last year.

YEAR TO DATE FINANCIAL RESULTS

For the nine months ended September 30, 2009, Emisphere reported a net loss of $13.6 million, or $0.42 per basic and diluted share, including a $1.2 million one time favorable adjustment to the restructuring charge and gain on the disposal of fixed assets associated with the closure of its research and development facility in Tarrytown, New York in April 2009. This compares to a net loss of $16.7 million, or $0.55 per basic and diluted share for the nine months ended September 30, 2008.

Total operating expenses for the nine months ended September 30, 2009 were $11.1 million, a decrease of approximately $7.3 million, or 40% compared to $18.3 million for the same period last year. Total operating expenses for the nine months ended September 30, 2009 include research and development costs of $3.5 million and general and administrative expenses of $8.3 million and the $1.2 million one time favorable adjustment to the restructuring charge and gain from the disposal of fixed assets, compared to $10.1 million and $7.7 million respectively, for the same period last year.

Other expense for the nine months ended September 30, 2009 was $2.6 million, compared to other income of $1.4 million in the same period last year.

LIQUIDITY

At September 30, 2009, Emisphere Technologies reported cash and restricted cash of $7.2 million, compared to $1.5 million at June 30, 2009. Approximately $12.5 million is due as payment of the Novartis Note on December 1, 2009. Assuming we will be able to satisfy our obligation under the Novartis Note by some means other than the use of our existing capital resources, we anticipate that those existing capital resources, without implementing additional cost reductions, raising additional capital, or obtaining substantial cash inflows from potential partners or our products, will enable us to continue operations through approximately February 2010.

The Company has implemented aggressive cost controls to conserve its cash and continues to evaluate both non-dilutive and traditional financing options. Management believes there are reasonable financing alternatives potentially available to it that will enable it to meet its near term operating cash requirements. Please refer to the Quarterly Report on Form 10Q for the quarter ended September 30, 2009 for additional information.

KEY PRODUCT AND CORPORATE DEVELOPMENTS

• Oral Eligen^® B-12:
  • On November 2, 2009, the Company announced that interim data from an ongoing study demonstrated its high-dose oral Eligen^® B12 (1000mcg) performed as well as or better than B12 injections in individuals with Vitamin B12 deficiency. Normal levels of serum B12 and active B12 were achieved by 100 percent of those study participants who have currently taken Eligen^® B12 (1000mcg) 15 days into the 90-day study when the first blood samples were taken. It is estimated that between 30 and 40 million high dose injections of B12 are given each year in the U.S. alone and over 250 million such injections are given worldwide. Emisphere’s Eligen^® B12 product (1000mcg) is planned to be available in 2010.
  • On October 8, 2009, the Company announced that it is introducing and launching its first commercially available product, oral Eligen^® B12 (100 mcg). Oral Eligen^® B12 (100 mcg), has been specifically developed to help improve Vitamin B12 absorption and bioavailability with a patented formulation. Life Extension^® will have certain exclusivity in the U.S. for distribution via the internet and also at specialty health food and nutritional retail outlets including; The Vitamin Shoppe, GNC and Vitamin World. Oral Eligen^® B12 (100mcg) tablets will be available starting November of this year. Financial terms of the agreement were not disclosed.
• Oral Salmon Calcitonin:
  • On October 15, 2009, Emisphere Technologies announced that Novartis and its partner, Nordic Bioscience, issued study results in which twice-daily oral salmon calcitonin using Emisphere’s proprietary Eligen^® Drug Delivery Technology significantly suppressed markers of cartilage and bone degradation versus placebo in men and women with osteoarthritis, the most common form of arthritis. The study, a Phase I, placebo-controlled, double-blind, double-dummy, randomized, gender-stratified clinical trial, was conducted on behalf of Emisphere’s partner Novartis Pharma AG by Nordic Bioscience, and published online in the September 2009 issue of Osteoarthritis and Cartilage. Emerging data continue to indicate oral salmon calcitonin in combination with the Company’s absorption-enhancing Eligen^® Technology may be a potential therapeutic option for women and men with osteoarthritis, which affects more than 20 million people in the United States.
• Oral PTH:
  • On October 20, 2009, Emisphere Technologies announced study results demonstrating that a single dose of the novel oral parathyroid hormone PTH1-34, which utilizes Emisphere’s proprietary Eligen^® Drug Delivery Technology and absorption-enhancer carrier molecule 5-CNAC, achieved potentially therapeutically relevant exposure and safety profiles similar to those of the currently available injectable formulation in healthy postmenopausal women. The results of the study, conducted by Emisphere’s partner Novartis Pharma AG, were presented Monday, October 19, 2009 in a poster session at the 73rd Annual Scientific Meeting of the American College of Rheumatology in Philadelphia, PA. The results of this study indicate we may be able to provide women with postmenopausal osteoporosis a more convenient oral option for parathyroid hormone therapy, which is now available only as an injection.

• Oral Glucagon-Like Peptide-1 (GLP-1):
  • On September 8, 2009, Emisphere Technologies announced that an article published in the September 2009 issue of Clinical Pharmacology and Therapeutics, describes previously reported findings of an independent clinical study designed to assess the pharmacokinetics, pharmacodynamics (PK/PD) and safety of oral administration of the peptide GLP-1 utilizing Emisphere’s Eligen^® carrier technology. The study was conducted at the University Hospital in Basel, Switzerland by Professor Christoph Beglinger, of the Clinical Research Center, Department of Biomedicine Division of Gastroenterology, and Department of Clinical Pharmacology and Toxicology at the hospital. The published data show that the orally administered peptide, when administered with Emisphere’s SNAC^® carrier, is rapidly absorbed from the gut, leading to tenfold higher plasma concentrations compared to control. The pharmacodynamic effects were consistent with the known pharmacology of GLP-1, resulting in significantly increased basal insulin release (P< 0.027), and marked effects on glucose levels. The postprandial glucose peak was delayed with GLP-1, suggesting an effect on gastric emptying. No adverse events were reported.