Pain Therapeutics second-quarter collaboration revenue decreases to $0.1 million

Jul 28 2010

$176 Million of Cash, No Debt

Cash Requirements in 2010 Under $5 Million

REMOXY^® NDA Resubmission Still Anticipated Q4 2010

Pain Therapeutics, Inc. (Nasdaq:PTIE), a biopharmaceutical company, today reported second quarter financial results. Net loss for the quarter ended June 30, 2010 was $0.8 million, or $0.02 per share, compared to net loss of $34,000, or $0.00 per share, for the second quarter of 2009. Pain Therapeutics had cash, cash equivalents and marketable securities of $176.2 million, or about $4.14 cash per share, and no debt as of June 30, 2010.

Pain Therapeutics also updated financial guidance for the full year 2010. The Company now expects its net cash requirements for 2010 will be under $5 million, lowered from previous guidance of under $10 million. This decrease is due in part to a recently announced $5 million cash payment expected from King Pharmaceuticals, Inc. (King) in July 2010.

"Our focus is to advance the pipeline and to stay cost efficient," said Remi Barbier, Chairman, President and Chief Executive Officer of Pain Therapeutics. "This keeps us realistic about the present and optimistic about the future as we await the resubmission to the FDA of a New Drug Application for REMOXY by King later this year."

REMOXY

Pain Therapeutics remains committed to the regulatory success of REMOXY, our lead drug candidate. REMOXY is a strong painkiller with a unique formulation designed to reduce potential risks of unintended use. REMOXY and other abuse-resistant painkillers are being developed pursuant to a strategic alliance we have with King. We believe REMOXY represents the rare combination of a well-partnered, late-stage drug asset with a unique profile, and whose clinical efficacy has been substantially de-risked.

• From 2005 to 2008, we and King jointly managed a Phase III clinical program and New Drug Application (NDA) for REMOXY. In mid-2008, the U.S. Food and Drug Administration (FDA) accepted an NDA for REMOXY with Priority Review.
• In December 2008, we received from the FDA a Complete Response Letter which indicated additional non-clinical data is required to support the approval of REMOXY. The FDA has not requested or recommended additional clinical efficacy studies prior to approval.
• In March 2009, King assumed sole responsibility for the regulatory approval of REMOXY. This shift of responsibility does not change the economic terms of our strategic alliance with King.
• In June 2010, we and King amended our strategic alliance to result, in part, in a flat 10% royalty rate on net sales of products sold outside the United States. This amendment also results in a one-time payment from King of $5 million (expected in July 2010). Our royalty rate in the United States remains unchanged.
• Upon FDA approval of REMOXY, we will receive from King a running royalty equal to 20% on net sales in the United States of drugs developed under this strategic alliance, except as to the first $1.0 billion in cumulative net sales in the United States, which royalty is set at 15%.
• Upon FDA approval of REMOXY, we will receive from King a one-time $15 million cash milestone payment. To date, King has made milestone payments to us of $25 million. We could receive from King up to $125 million in additional milestone payments in the course of the clinical and regulatory development of REMOXY and three other abuse-resistant pain medications.

Second Quarter Financial Results

• Collaboration revenue for Q2 2010 was $0.1 million, compared to $2.6 million for Q2 2009 and reflects reimbursement of our development expenses under our strategic alliance with King.
• Research and development expenses for Q2 2010 decreased to $2.2 million from $5.1 million for Q2 2009. This decrease was mostly due to decreased spending for REMOXY and other abuse-resistant product candidates under our strategic alliance with King. Research and development expenses included non-cash stock-related compensation costs of $0.7 million for Q2 2010 and $0.9 million for Q2 2009. 
• General and administrative expenses for Q2 2010 increased to $1.7 million from $1.4 million for Q2 2009. General and administrative expenses included non-cash stock-related compensation costs of $0.6 million for Q2 2010 and $0.7 million for Q2 2009.
• Interest income for Q2 2010 increased to $0.5 million from $0.2 million in Q2 2009. This decrease was due to increases in interest rates on our investments in marketable securities.