CAMBRIDGE, Mass., Dec. 15 /PRNewswire-FirstCall/ -- Biopure Corporation
(Nasdaq: BPUR) announced today its financial results for the fourth fiscal
quarter and the fiscal year ended October 31, 2005. For the quarter, the
company reported a net loss of $8.2 million, or $0.34 per common share,
compared with a net loss of $9.3 million, or $0.93 per common share, for the
corresponding period in 2004. For the fiscal year, the company reported a net
loss of $28.7 million, or $1.28 per common share, compared to a net loss of
$41.7 million, or $4.99 per common share, in fiscal 2004. The number of
weighted average common shares outstanding used to calculate loss per share
was 22,382,298 for fiscal year 2005 and 8,349,554 for fiscal year 2004.
Revenues
Total revenues for the fourth quarter of fiscal 2005 were $328,000,
including $123,000 from past Congressional appropriations administered by the
U.S. Army and $205,000 from sales of the company's veterinary product
Oxyglobin(R). Revenues for the same period in 2004 were $1.8 million,
including $1.4 million from the Army and $412,000 from sales of Oxyglobin.
The Army payments reimburse Biopure for certain trauma development expenses
for Hemopure(R), the company's product under development for human use.
For the fiscal year, total revenues were $2.1 million in 2005, including
$1.2 million from sales of Oxyglobin and $947,000 from the Army, compared to
$3.7 million in 2004, including $2.4 million from Oxyglobin sales and
$1.4 million from the Army. Fixed manufacturing costs cause Oxyglobin
production costs to exceed Oxyglobin revenues and are expected to continue to
do so until the company is able to significantly increase its manufacturing
operations by generating substantial sales of Hemopure. Thus, as a
cost-cutting measure, the company began limiting its marketing and sales of
Oxyglobin in fiscal 2004.
Cost of revenues was $4.2 million for the fourth quarter of fiscal 2005,
compared to $5.8 million for the same period in 2004. For the fiscal year,
total cost of revenues was $13.3 million in 2005 compared to $18.8 million in
2004. Cost of revenues includes costs of both Oxyglobin and Hemopure.
Hemopure-related cost of revenues was $3.3 million for the fourth quarter
of fiscal 2005, including a $1.4 million write-down of fixed assets, explained
below, compared to $4.9 million for the same period in 2004. During the
fourth fiscal quarter of 2005, Biopure revised the projected start date of the
U.S. Navy's proposed RESUS clinical trial of Hemopure due to the clinical hold
discussed below under "Recent Developments." This revision delays the
expected need for expanded production facilities. As a result, Biopure
determined that impairment existed on some manufacturing equipment, and it
recorded a one-time, non-cash write-down of $1.4 million on this equipment.
During the fourth fiscal quarter of 2004, the company recorded a $2.2 million
write-down of inventory. There was no comparable expense in the fourth
quarter of 2005. For the fiscal year, Hemopure-related cost of revenues
decreased by $3.9 million in fiscal 2005 compared to fiscal 2004, primarily
due to workforce reductions, lower depreciation expenses and decreased
inventory write-downs in fiscal 2005.
Oxyglobin-related cost of revenues was $836,000 for the fourth quarter of
fiscal 2005 compared to $872,000 for the same period in 2004. For the fiscal
year, Oxyglobin-related cost of revenues was $2.8 million in 2005 compared to
$4.3 million in 2004. The decreases for the quarter and the year were
primarily due to lower spending and fewer Oxyglobin units sold in 2005 as a
result of the cost-cutting measure mentioned above.
Expenses
Research and development expenses were $1.1 million for the fourth quarter
of fiscal 2005, compared to $1.8 million for the corresponding period in 2004.
For the fiscal year, research and development expenses were $5.3 million in
2005 compared to $9.7 million in 2004. The decrease for the quarter is
primarily due to lower consulting expenses, to lower spending on trauma and
ischemia related pre-clinical studies, and to the completion, earlier in
fiscal 2005, of a project associated with the company's Food and Drug
Administration (FDA) response activities. The decrease for the fiscal year
was due to the items above and lower salary expense.
Sales and marketing expenses increased to $157,000 for the fourth quarter
of fiscal 2005, from $140,000 for the same period in 2004. Hemopure-related
sales and marketing expenses increased $38,000 to $149,000 and Oxyglobin-
related expenses decreased $21,000 to $8,000. For the fiscal year, sales and
marketing expenses decreased to $530,000 in 2005 from $2.3 million in 2004.
Hemopure-related sales and marketing expenses decreased $942,000 to $505,000
and Oxyglobin-related expenses decreased $781,000 to $25,000. Hemopure
expenses for 2005 primarily consist of ongoing activities in South Africa,
compared to 2004 when the expenses were related to market research and medical
education activities in the U.S. The decrease in Oxyglobin sales and
marketing expenses is due to the termination of distribution agreements and
the elimination of sales personnel and promotional activities in fiscal 2004.
Biopure is currently preparing to market and sell Hemopure in South
Africa, but does not expect these activities or the resulting revenues to have
a material effect on fiscal 2006 results. The company expects Oxyglobin sales
and marketing expenses in fiscal 2006 to be consistent with those in fiscal
2005.
General and administrative expenses decreased $143,000 during the fourth
fiscal quarter in 2005 compared to the same period in 2004. This decrease is
mostly due to lower legal, occupancy and salary expenses, which were partially
offset by severance expenses associated with the resignation of the company's
chief technology officer. For the fiscal year, general and administrative
expenses were $12.1 million in 2005 compared to $14.8 in 2004. This decrease
was mostly due to reductions of $1.6 million in legal expenses, $1.5 million
in salaries and other employee-related expenses, $923,000 in non-cash
financing fees and $152,000 in consulting expenses. Most legal costs incurred
during fiscal 2005 in connection with the U.S. Securities and Exchange
Commission investigation and litigation and the class-action litigation were
paid by the company's insurer. In fiscal 2004, Biopure paid approximately
$830,000 in uninsured fees and expenses for these proceedings. These
decreases were partially offset by a one-time, non-cash charge of $824,000
related to the settlement agreement with the former registration holder and
distributor for Hemopure in South Africa and a $441,000 increase in spending
on outside services, primarily related to an ongoing Sarbanes-Oxley Section
404 compliance project.
Financial Condition
At October 31, 2005, Biopure had $10.5 million in cash on hand, which is
expected to fund operations through March 2006. Cash used in operations
increased $1.4 million to $5.8 million during the fourth fiscal quarter of
2005 compared to the same period in 2004, primarily due to the absence in 2005
of the $1.2 million pre-payment, received in fiscal 2004, for Hemopure units
purchased by the Navy. For fiscal year 2005, cash used in operations
decreased $11.1 million to $21.1 million compared to fiscal 2004, primarily
due to reductions in staff and other cost cutting measures taken by the
company in April and June 2004.
On December 1, 2005, Biopure announced a proposed underwritten public
offering of new Biopure common stock and warrants to purchase new common
stock.
Given the need for additional financing during fiscal 2006, Biopure's
management expects that the company's independent registered public accounting
firm, Ernst & Young LLP, will include a going concern modification in its
audit opinion on Biopure's consolidated financial statements for the fiscal
year ended October 31, 2005. Biopure expects its expenditures in fiscal 2006
to be associated with clinically developing Hemopure for potential ischemia
and trauma indications, communicating with the U.S. FDA, conducting
preclinical animal studies and maintaining some manufacturing capability.
Nasdaq Listing Compliance
On November 4, 2005, the minimum closing bid price for Biopure common
stock on The Nasdaq National Market fell below $1.00 and has remained below
$1.00 for 28 consecutive business days. If this trend continues through
market close on December 16, 2005, Biopure expects to receive notification
from The Nasdaq Stock Market that the company is out of compliance with
Nasdaq's $1.00 minimum bid price requirement for continued listing set forth
in Marketplace Rule 4450(a)(5). In such case, Nasdaq rules provide the
company 180 calendar days to regain compliance.
To regain compliance, the bid price of Biopure's common stock must close
at $1.00 per share or more for at least 10 consecutive business days. If the
company is unable to regain compliance within 180 days it may transfer to The
Nasdaq Capital Market and take advantage of the additional 180-day compliance
period offered on that market, provided the company meets all requirements for
initial listing on that market except for the bid price requirement. If
Biopure does not demonstrate compliance within the compliance period, it will
be issued a delisting letter.
Other Developments
Biopure's clinical development strategy is to conduct parallel pilot
trials of Hemopure to assess the potential of several ischemia indications
before committing significant funding for advanced trials. The company is
also supporting the Navy's government-funded development of a potential out-
of-hospital trauma indication.
In November 2005, Navy staff, Biopure scientists, and military and
academic trauma experts met with FDA staff to address the agency's concerns
regarding the Navy's proposed RESUS out-of-hospital trauma trial of Hemopure
and to present the medical and scientific basis for lifting the FDA's clinical
hold on the Navy's investigational new drug application (IND) for this trial.
A senior FDA official is further examining the risk-benefit profile, has
requested a summary of data supporting the Navy's position for proceeding with
the RESUS trial, and has granted Biopure a separate meeting to discuss data
analysis.
In October and November, Biopure received regulatory and hospital
authorizations in the U.K. and South Africa to conduct a pilot wound-healing
trial in patients with peripheral artery disease who are undergoing lower-limb
amputation; in the U.K. for a pilot trial in patients undergoing
cardiopulmonary bypass surgery; and in Belgium for a pilot trial in patients
with multi-vessel coronary artery disease who are undergoing percutaneous
coronary intervention (PCI). The company expects patient enrollment to begin
in the first two trials in the next few weeks and in the PCI trial later in
the first calendar quarter of 2006.
When relevant information from Biopure's non-U.S. ischemia trials of
Hemopure becomes available, the company may seek to expand its ischemia
development program into the U.S.
In November, Biopure appointed a sales agent for Hemopure in South Africa,
where the product is approved for a surgical anemia indication. The agent,
Abazali Bio Ventures (Pty) Ltd., is a new company formed to sell biotechnology
products in the region. The chief executive of Abazali Bio Ventures is the
former general manager of a large, multi-national American pharmaceutical
company in South Africa. Biopure has a small staff in South Africa for
training, marketing and adherence to local regulations. The staff is
currently training two experienced sales representatives from Abazali Bio
Ventures, who will be solely dedicated to selling Hemopure. These sales reps
are expected to start calling on doctors shortly.
Also in South Africa, Biopure's 50-patient Phase 2 trial of Hemopure in
trauma patients in the hospital setting has enrolled 21 patients to date.
Enrollment in this trial continues to be slow.
In October, Biopure filed an answer to the civil injunctive proceeding
that the U.S. Securities and Exchange Commission filed against the company in
September. Biopure is pressing to move the case forward as quickly as
possible.
In August, the European Directorate for the Quality of Medicines (EDQM)
issued Biopure updated Certificates of Suitability of Monographs of the
European Pharmacopeia for Hemopure and Oxyglobin. These documents certify
that our products meet the European Pharmacopoeia criteria for minimizing the
risk of transmitting animal Transmissable Spongiform Encephalopathies. EDQM
certification is required for all new and approved human and veterinary
medicinal products that are manufactured from ruminant materials and marketed
in the European Union.
FY2006 First Quarter Financial Results
Biopure expects to issue a press release announcing its financial results
for the first fiscal quarter ending January 31, 2006, on Thursday, February
16, 2006, before the market opens.
Biopure Corporation
Biopure Corporation develops and manufactures pharmaceuticals called
oxygen therapeutics that are intravenously administered to deliver oxygen to
the body's tissues. The company is developing Hemopure(R) [hemoglobin
glutamer - 250 (bovine)], or HBOC-201, for a potential indication in
cardiovascular ischemia and, in collaboration with the U.S. Naval Medical
Research Center, for an out- of-hospital trauma indication. The product is
approved in South Africa for treating adult surgery patients who are acutely
anemic and for eliminating, delaying or reducing allogeneic red blood cell
transfusions in these patients. Hemopure has not been approved for sale in
any other jurisdictions, including the United States or the European Union.
Biopure's veterinary product Oxyglobin(R) [hemoglobin glutamer - 200
(bovine)], or HBOC-301, the only oxygen therapeutic approved by the U.S. Food
and Drug Administration and the European Commission, is indicated for the
treatment of anemia in dogs.
Statements in this press release that are not strictly historical are
forward-looking statements, including those about future clinical trial
activities and those that imply that the company may regain compliance with
Nasdaq's minimum bid price listing requirement or will be able to transfer to
The Nasdaq Capital Market. Actual results may differ materially from those
projected in these forward-looking statements due to risks and uncertainties.
These risks include, without limitation, uncertainties regarding the company's
financial position, the trading price of the company's common stock,
unexpected costs and expenses, possible delays related to clinical trials,
unpredictable outcomes of clinical trials and decisions of regulatory
authorities. The company undertakes no obligation to release publicly the
results of any revisions to these forward-looking statements to reflect events
or circumstances arising after the date hereof. A full discussion of the
company's operations and financial condition, and specific factors that could
cause the company's actual performance to differ from current expectations,
can be found in the company's filings with the U.S. Securities and Exchange
Commission, including under the heading "Risk Factor" in the Form 10-Q filed
on September 9, 2005, which can be accessed in the EDGAR database at the SEC
Web site, http://www.sec.gov. The content of this press release does not
necessarily reflect the position or the policy of the U.S. Government or the
Department of Defense, and no official endorsement should be inferred.
BIOPURE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
October 31 October 31
2005 2004 2005 2004
Product sales $205 $416 $1,163 $2,392
Research and
development revenues 123 1,358 947 1,358
Total revenues 328 1,774 2,110 3,750
Cost of revenues 4,168 5,798 13,307 18,776
Gross loss (3,840) (4,024) (11,197) (15,026)
Operating expenses:
Research and development 1,144 1,845 5,322 9,746
Sales and marketing 157 140 530 2,253
General and
administrative 3,175 3,318 12,069 14,807
Total operating expenses 4,476 5,303 17,921 26,806
Loss from operations (8,316) (9,327) (29,118) (41,832)
Other income, net 135 38 447 167
Net loss $(8,181) $(9,289) $(28,671) $(41,665)
Basic and diluted net
loss per common share $(0.34) $(0.93) $(1.28) $(4.99)
Weighted-average
common shares outstanding 24,359 9,993 22,382 8,350
Actual common shares outstanding at October 31, 2005 were 24,359,170.
The net loss per common share for the three and twelve month periods ended
October 31, 2004, have been adjusted to reflect the one-for-six reverse split
that took effect on May 27, 2005.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, October 31,
2005 2004
Assets
Cash and cash equivalents $10,542 $6,448
Other current assets 5,033 6,218
Net property and equipment 26,000 31,400
Other assets 860 1,060
Total assets $42,435 $45,126
Liabilities and stockholders' equity
Total current liabilities $4,052 $4,112
Deferred revenue, net of current portion 987 1,177
Deferred compensation - 121
Restructuring costs, net of current portion 221 -
Other long term liabilities 41 -
Total liabilities 5,301 5,410
Total stockholders' equity 37,134 39,716
Total liabilities and stockholders' equity $42,435 $45,126
Contact: Douglas Sayles Herb Lanzet (Investors)
Biopure Corporation H.L. Lanzet Inc.
617-234-6826 212-888-4570
IR@biopure.com lanzet@aol.com
SOURCE Biopure Corporation
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Related links:
http://www.biopure.com
Company News On-Call:
http://www.prnewswire.com/comp/131224.html
CONTACT:
Douglas Sayles of Biopure Corporation,
+1-617-234-6826, IR@biopure.com; or Investors: Herb Lanzet of
H.L. Lanzet Inc., +1-212-888-4570, lanzet@aol.com
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