Advanced Life Sciences second-quarter net loss decreases to $2.1 million

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Aug 11 2010

Advanced Life Sciences Holdings, Inc. (OTC Bulletin Board: ADLS), a biopharmaceutical company engaged in the discovery, development and commercialization of novel drugs in the therapeutic areas of infection, oncology and respiratory diseases, today announced its financial results for the second quarter ended June 30, 2010.

"We are exhilarated to have achieved agreement with the US Food & Drug Administration on the special protocol assessment (SPA) for Restanza in community acquired bacterial pneumonia (CABP) which provides a clear roadmap to approval and the opportunity to bring this novel antibiotic to the market," said Michael T. Flavin, Ph.D., chairman and chief executive officer of Advanced Life Sciences. "Capitalizing on this momentum, we intend to redouble our efforts to seek government and pharmaceutical partners who can provide financial, development and commercial support to the oral Restanza CABP program. At the same time, we plan to advance other valuable aspects of the Restanza franchise, including the IV formulation for hospital use and the biodefense program. As we expand our pipeline to address unmet medical needs in treating life-threatening infections caused by Gram-negative pathogens, we are pleased to have partnered with Dr. Robert Hancock and The University of British Columbia to develop novel antibiotics which will augment our internal R&D efforts in this area."

The net loss allocable to common shareholders for the three months ended June 30, 2010 was $2.1 million or ($0.02) per share compared to a net loss allocable to common shareholders of $2.6 million or ($0.06) per share for the three months ended June 30, 2009. The decrease in the net loss is due to decreased regulatory and clinical costs involved in the development of the Company's lead antibiotic, Restanza™ (cethromycin).

Cash used for operating activities during the quarter was approximately $1.1 million. In addition, the Company made a $1.5 million payment to reduce its outstanding debt balance. The Company ended the second quarter of 2010 with cash and cash equivalents totaling $85,000. In July, the Company completed a securities offering raising approximately $1.6 million in gross offering proceeds. As part of this public equity offering, the Company issued unit warrants that are exercisable for shares of common stock and warrants to purchase common stock. The unit warrants expire under their terms 45 days after the Company's public announcement that the FDA has accepted the Company's SPA. Accordingly, as a result of yesterday's announcement, the unit warrants will expire and cease to be exercisable at 4:00 p.m. EDT on Friday, September 24, 2010. Subsequent to this offering closing, unit warrant exercises to date have provided an additional $458,000 in gross proceeds to the Company.

Operating Expense Analysis

Research and development expenses decreased by $0.5 million to approximately $0.8 million for the three months ended June 30, 2010 compared to $1.3 million for the three months ended June 30, 2009 due to reduced regulatory and clinical expenses associated with the Restanza development program.
Selling, general and administrative expenses were reduced to $1.3 million for the three months ended June 30, 2010 from $1.7 million during the second quarter of last year due to reduced salary and benefit costs and other operating expenses.

Second Quarter and Recent Achievements

Announced positive data from an in vitro study assessing Restanza against 30 strains of Burkholderia pseudomallei, further highlighting its ability to address serious bacterial infections that are becoming untreatable due to the increasing public health threat of bacterial resistance to currently marketed antibiotics;
Announced positive results from in vitro and in vivo studies assessing the efficacy of Restanza against the species of Plasmodium that cause malaria;
Expanded the collaboration with the U.S. Government to include the evaluation of Restanza's activity against sexually transmitted infections (STI's), such as gonorrhea;
Announced positive results from preclinical toxicology and pharmacokinetic studies of an intravenous (IV) formulation of Restanza that support its use in a hospital setting;
Entered into an option agreement with The University of British Columbia (UBC) to develop several antimicrobial peptides;
Submitted application for FDA Fast Track designation for Restanza in CABP;
Completed securities offering raising approximately $1.6 million in gross offering proceeds;
Applied to the U.S. Internal Revenue Service for the Qualifying Discovery Therapeutic Tax grant for Restanza;
Executed a debt for equity exchange agreement with chairman and CEO Michael T. Flavin, Ph.D. in which the Company's $2.0 million promissory note with Dr. Flavin was exchanged for 47,619,047 shares of the Company's common stock.