CPEX Pharmaceuticals, Inc. (NASDAQ: CPEX) today reported financial results for the third quarter ended September 30, 2010. For the quarter CPEX reported revenues of $5.8 million and net income of $2.4 million.
“Our Board of Directors is continuing to review strategic alternatives to maximize shareholder value.”
Third-Quarter Highlights
For the third quarter of 2010 compared to the third quarter of 2009:
- Revenues increased 17% to $5.8 million from $5.0 million.
- Operating expenses decreased 50% to $2.9 million from $5.8 million.
- Net income was $2.4 million compared to a net loss of $872,000. Basic and diluted income per common share were $0.93 and $0.88, respectively, compared to a loss of $0.34 per share.
The growth in revenues for the third quarter of 2010 was due to increased royalties on sales of Testim®. This growth reflected a reported 7.9% increase in prescriptions for Testim during the third quarter of 2010 compared to the same period in 2009.
General and administrative expenses for the third quarter of 2010 decreased $773,000 compared to the third quarter of 2009. The decrease was primarily due to a $613,000 decrease in advisory and consulting expenses and a $163,000 decrease in employee related expenses, primarily non-cash share-based compensation expense.
Research and development expenses decreased $2.1 million in the third quarter of 2010 compared to the third quarter of 2009 primarily due to a $1.8 million reduction in clinical trial expenses following the discontinuation of the Nasulin development program in early 2010.
As of September 30, 2010, CPEX had unrestricted cash of approximately $18.7 million, working capital of $23.1 million and no debt.
In light of fluctuations in research and development expenses from period to period, as well as the uncertainties associated with the ongoing patent defense litigation, the results for the three and nine months ended September 30, 2010 are not necessarily indicative of the results that may be expected for future periods.
Year-to-Date Highlights
For the first nine months of 2010 compared to the same period in 2009:
- Revenues increased 26% to $16.9 million from $13.4 million.
- Operating expenses decreased 14% to $13.9 million from $16.1 million.
- Net income was $2.6 million compared to a net loss of $2.5 million. Basic and diluted income per common share was $1.03 and $0.99, respectively, compared to a loss of $1.02 per share.
The growth in revenues for the first nine months of 2010 was due to royalties on increased sales of Testim®. This growth reflects a reported increase in total prescriptions for Testim of more than 11% during the first nine months of 2010 compared to the same period in 2009.
General and administrative expenses increased $576,000 in the first nine months of 2010 compared to the same period last year primarily due to a net increase in advisory and consulting expenses net of a substantial decrease in legal fees associated with the ongoing patent defense litigation.
Research and development expenses decreased $2.9 million in the first nine months of 2010 compared to the same period last year due to a $3.1 million decrease in clinical trial expenses due to the discontinuation of the Nasulin development program and a $1.0 million decrease in employee related expenses. These decreases were partially offset by a $1.5 million increase in spending on preclinical activities.
Management Comments
"We have reduced our workforce and expenses to reflect the ongoing business, and those actions, combined with an increase in Testim sales royalties, resulted in a profitable third quarter," said John A. Sedor, CPEX President and Chief Executive Officer. "Our Board of Directors is continuing to review strategic alternatives to maximize shareholder value."
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