NeoPharm second-quarter net loss decreases to $0.8 million

Aug 26 2010

NeoPharm, Inc. (Other OTC: NEOL.PK), a publicly traded biopharmaceutical company dedicated to the research, development and commercialization of new and innovative therapeutic applications of drugs for various forms of cancer and other diseases, today announced its second quarter 2010 financial results.

"NeoPharm continued to make good progress across multiple development programs in the second quarter," commented Dr. Aquilur Rahman, President and Chief Executive Officer of NeoPharm. "We have enrolled 17 patients in less than two months in our Phase II clinical trial for Liposome Entrapped Paclitaxel (LEP) for the treatment of breast cancer in India, which has been expanded from 35 patients to 70 patients . We currently expect to have the total planned enrollment of the additional 35 patients for LEP completed during the third quarter of this year. When combined with the good responders from the 35 patients enrolled our initial Phase II study, successful completion of the expanded study will enable us to reduce the number of patients for our planned Phase III trial for LEP, which is currently projected to start in the early part of 2011 provided there are enough funds available to the company."

"Patient enrollment is also advancing in our Phase II trial for LE-DT as a frontline treatment of patients with locally advanced or metastatic pancreatic cancer. To date, we have enrolled five patients and expect this trial may be completed as early as the fourth quarter of this year. Additionally, we are anticipating that we will soon begin enrolling patients in another Phase II trial for LE-DT for advanced prostate cancer, and, would hope to start the Phase I clinical trial for IPF in the fourth quarter of 2010. We continue to be satisfied with the advancement of our drug candidate portfolio, as we continue to move toward our ultimate goal of commercialization. However, the success of all these clinical programs depends on obtaining additional funding resources which continues to be management's top priority," further commented Dr. Rahman.

Second Quarter 2010 Financial Results

For the second quarter ended June 30, 2010, NeoPharm reported a net loss of $0.8 million, or ($0.03) per basic and diluted share, as compared to a net loss of $1.9 million, or ($0.07) per share, for the same period last year. For the six months ended June 30, 2009, NeoPharm reported a net loss of $2.2 million, or ($0.08) per basic and diluted share, compared to a net loss of $4.2 million, or ($0.15) per share, for the same period last year. The decrease in the Company's net loss for the three and six months ended June 30, 2010 is primarily due to a $0.7 gain on the reversal of all prior unrealized losses related to its investments in auction rate securities ("ARS"), and continued decreases in general and administrative expenses. On June 30, 2010, the Company exercised its put option and redeemed all of its ARS investments at full par value, reversing all previously recorded unrealized losses and repaying its ARS loan in full with the proceeds of this redemption. The Company's general and administrative expenses decreased $0.4 million and $0.7 million for the three and six months ended June 30, 2010 in connection with continuing cost-savings initiatives in this area.

During the second quarter, the Company's cash outlays decreased to $1.3 million as compared to $1.9 million for the first quarter of 2010. This decrease in cash outlays is primarily attributable to the effectiveness of cost-saving measures, however the Company expects future cash outlays to increase consistent with the advancement and progression of its clinical trials and other preclinical development activities. The Company had $1.8 million in cash and cash equivalents as of June 30 2010, and projects that it has adequate resources to fund its operations into the fourth quarter of 2010. The Company is currently exploring various alternatives to continue its operations for the rest of 2010 and beyond, but no assurance can be given that such efforts will be successful.