CARLSBAD, Calif., Aug. 23 /PRNewswire-FirstCall/ --
The Immune Response Corporation (Nasdaq: IMNR) today announced its financial
results for the quarter ended June 30, 2002, with a net loss for the quarter
of $8.1 million or $.23 per share, compared to a net loss of $5.3 million or a
loss of $.16 per share, reported for the quarter ended June 30, 2001. For the
six months ending June 30, 2002, the net loss was $13.4 million or $.38 per
share, compared to a net loss of $10.2 million or $.31 per share for the six
months ended June 30, 2001.
"These losses are consistent with our estimates as we continue operations
in a manner aimed at reducing operating costs where possible, while pursuing
additional sources of investment capital," said Dennis J. Carlo, President and
Chief Executive Officer for The Immune Response Corporation.
Research related revenue for the three and six months ended June 30, 2002,
was $11,000 and $20,000, respectively compared to $1.0 million and
$2.1 million for the same three and six month periods in 2001. The decrease
in research revenue in 2002 was due to the termination of the development
agreement with Agouron Pharmaceuticals, Inc., a Pfizer Inc. company, in
July 2001. Revenue for 2001 was primarily attributed to deferred revenue
recognized under the agreement with Pfizer.
In addition to research related revenue, the Company received non-research
revenue from investment income of $8,000 for the second quarter of 2002 versus
$292,000 for the same period in 2001. The decrease in investment income in
2002 was primarily due to lower overall cash balances in interest bearing
investments. Interest expense increased by $118,000 for the second quarter of
2002 as compared to the same period in 2001 because of the issuance of an
additional $4.0 million of convertible notes and warrants in May and
June 2002.
Expenses related to research and development and general and
administrative decreased to $5.0 million for the quarter ended June 30, 2002,
from $6.5 million in the second quarter of 2001. The decrease in operating
expenses was due primarily to decreased spending in research and development
and reduction in personnel through attrition.
Cash, cash equivalents and short-term investments were $1.1 million at
June 30, 2002, compared to $2.7 million at December 31, 2001.
"We estimate that our available cash resources, including the net proceeds
of approximately $2.0 million we received from the private placement of
convertible notes, warrants and a short-term secured promissory note with
The Kimberlin Family 1998 Irrevocable Trust in July and August, will be
sufficient to fund our planned operations into August 2002," said Michael
Jeub, Vice President of Finance and Chief Financial Officer for The Immune
Response Corporation. "Further, if we receive gross proceeds of $8.0 million
from the private offering, which will be sufficient to fund our planned
operations for approximately four months following the closing date, and the
additional $28.0 million upon exercise in full of the warrants, we expect we
will have sufficient funds to fund our planned operations, excluding capital
improvements, through September 2003."
The Company currently is engaged in a private offering of common stock and
warrants, which could raise up to $8.0 million in gross proceeds
($10.4 million if the 30 percent overallotment option is exercised), subject
to market and other conditions, to meet some of our future capital
requirements. The offering could raise an additional $28.0 million upon the
exercise in full of the warrants. The securities being offered have not been
registered under the Securities Act of 1933 or any state securities laws and
unless so registered may not be offered or sold in the United States (or to a
U.S. person) except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933 and
applicable state securities laws.
For the second quarter, additional activities included:
-- A restructuring of an equipment loan agreement with Transamerica,
curing an existing default and restructuring the payment schedule with
respect to $600,000 of the approximately $1.4 million outstanding as
of June 30, 2002;
-- Announced the appointments of Michael L. Jeub as the new Vice
President of Finance and Chief Financial Officer and Bjorn K.
Lydersen, Ph.D. as the new Vice President of Manufacturing;
-- Privately placing $5.0 million of convertible notes and warrants with
Oshkim Limited Partnership, an affiliate of Kevin Kimberlin, one of
our directors and a major stockholder, of which $2.0 million was used
to repay a short-term promissory note issued to Oshkim in March.
-- Amended our agreements with Trinity Medical Group USA, Inc. to
increase the per dose price of REMUNE(R) in exchange for
4,000,000 shares of our common stock and additional shares upon
achievement of milestones in the future.
Subsequent to the second quarter, we privately placed an additional
$2.0 million of convertible notes, warrants and a short-term promissory note
to The Kimberlin Family 1998 Irrevocable Trust, an affiliate of Mr. Kimberlin.
Effective August 5, 2002, the Company appointed BDO Seidman, LLP as its
independent auditors. In the process of reviewing our financial statements
for the quarter ended June 30, 2002, BDO Seidman advised the Company that the
fair value of the conversion discount relating to the $2.0 million convertible
promissory note which we issued in November 2001 had been incorrectly valued.
BDO Seidman further advised the Company that it should have valued the
beneficial conversion for November 2001 at approximately $924,000 instead of
at approximately $444,000, and that such amount should have been amortized
over the three-year term of the notes. Consequently, the Company plans to
adjust these amounts as reported in its Annual Report on Form 10-K for the
year ended December 31, 2001, and in its Quarterly Report on Form 10-Q for the
period ended March 31, 2002, and to file amendments to such reports to reflect
these adjustments.
Co-founded by medical pioneer, Dr. Jonas Salk and based in Carlsbad,
California, The Immune Response Corporation is a biopharmaceutical company
developing immune-based therapies designed to treat HIV, autoimmune diseases
and cancer. The Company also develops and holds patents on several
technologies that can be applied to genes in order to increase gene expression
or effectiveness, making it useful in a wide range of therapeutic applications
for a variety of disorders. Company information is also available at
http://www.imnr.com .
This news release contains forward-looking statements. Actual results
could vary materially from those expected due to a variety of risk factors,
including whether the Company will continue as a going concern, whether the
Company will successfully raise proceeds from financing activities sufficient
to fund operations, the uncertainty of successful completion of clinical
trials, whether REMUNE(R) is effective as either a preventive or therapeutic
vaccine, whether future trials will be conducted, whether the results of
REMUNE(R) in clinical trials will coincide with the results of REMUNE(R) in
preclinical trials, and those risks set forth from time to time in The Immune
Response Corporation's SEC filings, including but not limited to its report on
Form 10-K for the year ended December 31, 2001 and subsequent Forms 10-Q. The
Company undertakes no obligation to publicly release the result of any
revisions to these forward-looking statements, which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
REMUNE(R) is a registered trademark of The Immune Response Corporation.
The Immune Response Corporation
Condensed Consolidated Statements of Operations
(Amounts in thousands, except share data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2002 2001 2002 2001
Research revenue $11 $1,036 $20 $2,068
Expenses:
Research and
development 3,503 4,932 7,311 10,265
General and
administrative 1,483 1,548 2,630 2,775
Collaborative
contract cost 2,360 -- 2,360 --
7,346 6,480 12,301 13,040
Other revenue and
expense:
Equity in loss
of investee -- (59) -- (59)
Investment
income 8 292 22 1,026
Interest
expense (198) (80) (318) (170)
Accretion of
notes payable (576) -- (828) --
Net loss (8,101) (5,291) (13,405) (10,175)
Preferred stock
items -- (79) -- (334)
Net loss
applicable to
common stockholders $(8,101) $(5,370) $(13,405) $(10,509)
Loss per common
share - basic and
diluted:
Net loss $(0.23) $(0.16) $(0.38) $(0.31)
Net loss
applicable to
common stockholders $(0.23) $(0.16) $(0.38) $(0.32)
Weighted average
common shares
outstanding 35,805,147 33,847,158 35,689,270 32,336,961
The Immune Response Corporation
Condensed Consolidated Balance Sheets
(Amounts in thousands)
June 30, December 31,
2002 2001
(unaudited) (restated)
Assets
Cash, cash equivalents and
short-term investments $1,109 $2,701
Other current assets 423 861
1,532 3,562
Property and equipment, net 8,251 9,026
Licensed technology 3,179 3,532
Other assets 1,416 1,378
Total assets $14,378 $17,498
Liabilities and stockholders'
equity
Current liabilities $3,143 $3,061
Long-term liabilities 1,061 1,230
Convertible notes payable,
related party (net of discount
of $8,085 and $1,904, respectively) 915 96
Stockholders' equity 9,259 13,111
Total liabilities and
stockholders' equity $14,378 $17,498
SOURCE The Immune Response Corporation
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Related links:
http://www.imnr.com
CONTACT:
media, James Lee of The Lee Strategy Group,
+1-310-229-5771, fax, +1-310-229-5772, jlee@leestrategy.com, for
The Immune Response Corporation; or investors, Kathy Lane of The
Immune Response Corporation, +1-760-771-2236, fax,
+1-760-771-2140, info@imnr.com
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