Repros Therapeutics second-quarter net loss decreases to $1.3 million

Aug 10 2010

Repros Therapeutics Inc. (NasdaqCM: RPRX) today announced financial results for the second quarter ended June 30, 2010.

Financial Results

Net loss for the three month period ended June 30, 2010, was ($1.3) million or ($0.04) per share as compared to a net loss of ($8.9) million or ($0.59) per share for the same period in 2009. The net loss for the six month period ended June 30, 2010, was ($2.4) million or ($0.08) per share as compared to a net loss of ($15.6) million or ($1.03) per share for the same period in 2009. The decrease in loss for both the three and six month periods ended June 30, 2010 as compared to the same period in 2009 was primarily due to decreased expenses in clinical development for Proellex® and Androxal®. In June 2010, the FDA notified us that the full clinical hold on Proellex® had been revised to a partial clinical hold to allow us to run a single study to explore both safety and signals of efficacy in an escalating dose fashion. We intend to begin dosing later in the third quarter. We are also in the process of selecting clinical sites for the Phase 2 trial for Androxal® as a potential treatment for type 2 diabetes and bidding Clinical Research Organization ("CRO") services to support the study. Additionally, the FDA has recently notified us that they will allow us to conduct two Phase 3 trials for Androxal® in men with low testosterone who want to maintain their fertility while being treated for low testosterone subject to protocol review. We will begin the search for an appropriate CRO as well as commence screening of clinical sites where such studies will be conducted.

Research and development expenses, or R&D, decreased 90% or approximately $7.0 million to $756,000 for the three month period ended June 30, 2010 as compared to $7.8 million for the same period in the prior year. Our primary R&D expenses for the three month periods ended June 30, 2010 and 2009 are shown in the following table (in thousands):

R&D expenses decreased 91% or approximately $12.3 million to $1.2 million for the six month period ended June 30, 2010 as compared to $13.5 million for the same period in the prior year. Our primary R&D expenses for the six month periods ended June 30, 2010 and 2009 are shown in the following table (in thousands):

The decrease in R&D expenses is primarily due to the decreased clinical development expenses related to Proellex® as a result of the discontinuation of all clinical trials due to the FDA's clinical hold on Proellex®. R&D expenses were further decreased by the decreased clinical development expenses related to Androxal® due to the completion of a Phase 2b proof-of-concept clinical trial in 2009. Additionally, payroll and benefits expenses decreased due to reduced headcount and the salary reduction program put in place in August 2009 and revised in May 2010.

General and administrative expenses, or G&A, decreased 48% to approximately $570,000 for the three month period ended June 30, 2010 as compared to $1.1 million for the same period in the prior year. Our primary G&A expenses for the three month period ended June 30, 2010 and 2009 are shown in the following table (in thousands):

G&A payroll and benefits expenses include salaries, bonuses, relocation expense, severance costs, non-cash stock option compensation expense and fringe benefits. Included in payroll and benefits expense is a charge for non-cash stock option expense of $77,000 for the three month period ended June 30, 2010 as compared to $253,000 for the same period in the prior year. Additionally, salaries for the three month period ended June 30, 2010 were $66,000 as compared to $325,000 for the same period in the prior year. The decrease in salaries is primarily due to a decrease in headcount and the salary reduction program put in place in August 2009 and revised in May 2010.

G&A operating and occupancy expenses, which include expenses to operate as a public company, decreased 14% to $417,000 for the three month period ended June 30, 2010 as compared to $485,000 for the same period in the prior year. The decrease is primarily due to a decrease in travel and consulting expenses.

G&A expenses decreased 43% to approximately $1.2 million for the six month period ended June 30, 2010 as compared to $2.2 million for the same period in the prior year. Our primary G&A expenses for the six month period ended June 30, 2010 and 2009 are shown in the following table (in thousands):

Included in payroll and benefits expense is a charge for non-cash stock option expense of $151,000 for the six month period ended June 30, 2010 as compared to $445,000 for the same period in the prior year. Additionally, salaries for the six month period ended June 30, 2010 were $129,000 as compared to $563,000 for the same period in the prior year. The decrease in salaries is primarily due to a decrease in headcount and the salary reduction program put in place in August 2009 and revised in May 2010.

G&A operating and occupancy expenses decreased 13% to $934,000 for the six month period ended June 30, 2010 as compared to $1.1 million for the same period in the prior year. The decrease is primarily due to a decrease in travel and consulting expenses, partially offset by an increase in legal expenses.

Total revenues and other income increased to $53,000 for the three month period ended June 30, 2010 as compared to $1,000 for the same period in the prior year and increased to $53,000 for the six month period ended June 30, 2010 as compared to $4,000 for the same period in the prior year. The increase for the three month and six month periods ended June 30, 2010 was primarily due to an increase of $53,000 in non-cash other income related to debt relief from settlements with certain vendors in the second quarter of 2010.

As of June 30, 2010 we had 34,611,575 shares of common stock outstanding.

Liquidity, Capital Resources and Going Concern Uncertainty

As of June 30, 2010, we had cash and cash equivalents of approximately $5.2 million as compared to $1.9 million as of December 31, 2009. The amount of cash on hand is not sufficient to fund each of the clinical trials currently planned for our two drug candidates, Proellex® and Androxal®. Based on these planned clinical trials, we will need to raise additional capital no later than some time during the first quarter of 2011. Our Annual Report on Form 10-K for the year ended December 31, 2009 includes an explanatory paragraph in the report of its independent registered public accounting firm that there is substantial doubt about Repros' ability to continue as a "going concern". Repros also received a similar going concern opinion for the years ended December 31, 2008 and 2007.

On February 12, 2010, we entered into an Equity Distribution Agreement (the "Equity Distribution Agreement") with Ladenburg Thalmann & Co. Inc. ("Ladenburg"), pursuant to which we may issue and sell from time to time through Ladenburg, as sales agent and/or principal, shares of our common stock having an aggregate offering price of up to $10 million (the "ATM Shares"). As of June 30, 2010, we have sold 8,685,633 ATM Shares at a weighted average share price of $0.73, for proceeds of approximately $6.0 million, net of expenses. Between July 1, 2010 and August 4, 2010, we have sold an aggregate of 1,108,657 ATM Shares at a weighted average share price of $0.38, for proceeds of approximately $401,000, net of expenses. Pursuant to General Instruction I.B.6. of Form S-3, we may not sell more than one-third of the aggregate market value of our common stock held by non-affiliates during a period of 12 calendar months immediately prior to, and including, the date of such sale of such common stock. Due to this limitation, we announced on August 3, 2010 that we have suspended this ATM offering of Company securities.

Source Repros Therapeutics