Pain Therapeutics third quarter net loss decreases from $1.3 million to $1.0 million

Oct 29 2010

Pain Therapeutics, Inc. (Nasdaq:PTIE), a biopharmaceutical company, today reported financial results for its third quarter of fiscal year 2010.

Financial Highlights

• Our net loss for the quarter ending September 30, 2010 was $1.0 million, or $0.02 per share, compared to net loss of $1.3 million or $0.03 per share, for the third quarter of 2009.
• In July 2010, King Pharmaceuticals, Inc. (NYSE:KG) paid us a $5.0 million program fee related to previously disclosed modifications of our strategic alliance.
• We maintained our strong financial position, with cash and total investments of $180 million, or about $4.21 cash per share, and no debt, before giving effect to a previously announced and pending nondividend distribution.
• No change to previous guidance - cash requirements in 2010 still expected to be under $5 million, before giving effect to a previously announced and pending nondividend distribution.

"We reported today another solid quarter as we prepare for our next phase of growth", said Remi Barbier, Chairman, President & CEO of Pain Therapeutics. "We continue to 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."

Additional Highlights

• On October 27, 2010, we declared a cash distribution of $2.00 per share to shareholders, or an aggregate of about $85 million. This nondividend distribution will be paid to shareholders of record as of the close of business on December 1, 2010. We expect to pay shareholders on or around December 10, 2010. The nondividend distribution will be paid entirely from cash reserves.
• King is our commercial partner for REMOXY, our lead drug candidate. To date, we have received from King total cash payments of $180.0 million in various program fees and milestone payments in connection with our strategic alliance. We could receive from King up to $125.0 million in additional milestone payments over the course of the clinical and regulatory development of REMOXY and three other abuse-resistant pain medications.
• On October 12, 2010, Pfizer Inc. (NYSE:PFE) and King announced that they had entered into a definitive merger agreement. Pfizer is the world's largest research-based pharmaceutical company. We believe Pfizer's acquisition of King, if consummated, may facilitate REMOXY's commercial success if this drug is approved.
• King plans to resubmit an NDA for REMOXY in Q4 2010. Upon FDA approval of REMOXY, we will receive a $15.0 million cash milestone payment and a running royalty equal to 20% of net sales in the U.S. of all drugs developed under this strategic alliance, except as to the first $1.0 billion in cumulative net sales, which royalty is set at 15%. Outside the United States, the royalty rate is set at 10%.
• We intend to relocate our principal place of business to Austin, TX. In order to minimize potential disruptions to our on-going operations, this relocation will take place gradually now through the end of 2011. Our intentions are to shift the Company's permanent headquarters and the entire actual direction, control, and coordination of our operations, from California to Austin, TX.
• Recently, our executive officers have elected to cease personal stock trading plans that were in effect under Rule 10b5-1 of the Securities Exchange Act of 1934 and our policies regarding stock transactions. 

Third Quarter Financial Results

• In Q3 2010, King paid us a $5.0 million program fee in connection with the June 2010 modification of our strategic alliance.
• Collaboration revenue for Q3 2010 was $0.2 million and reflects reimbursement of our development expenses under our strategic alliance with King.
• Research and development expenses for Q3 2010 decreased to $2.4 million from $4.5 million for Q3 2009. This decrease was mostly due to decreased activities for our product candidates and lower operating costs. Research and development expenses included non-cash stock-related compensation costs of $0.6 million for Q3 2010 and $0.9 million for Q3 2009. 
• General and administrative expenses for Q3 2010 increased to $2.1 million from $1.5 million for Q3 2009. This increase was mostly due to fluctuations in and timing of operating costs. General and administrative expenses included non-cash stock-related compensation costs of $0.5 million for Q3 2010 and $0.7 million for Q3 2009.