Zonagen (NASDAQ:ZONA)
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Zonagen, Inc. (Nasdaq:ZONA)(PCX:ZONA) today reported
financial results for the three-month and nine-month periods ended
September 30, 2005 and provided an update on its clinical development
efforts for Proellex(TM) and Androxal(TM).
"We continue to move toward our goal of initiating three clinical
trials by year end 2005 which include a U.S. Phase III trial of
Androxal for male testosterone deficiency, a U.S. efficacy trial of
Proellex for uterine fibroids and a European Phase II trial of
Proellex for endometriosis," said Joseph Podolski, President and CEO
of Zonagen, Inc. He continued, "We anticipate initial data from these
three trials during the summer of 2006."
Zonagen is preparing a submission supporting a Phase III study for
its drug Androxal. The Company also hopes to submit the documents
necessary for initiation of the study to the FDA within the next few
weeks and believes that it will commence the study before year end
2005. The study will consist of approximately 200 patients at up to 20
clinical sites in the U.S. and abroad. The Phase III study is being
designed to collect additional safety data on Androxal for the
treatment of testosterone deficiency in men with secondary
hypogonadism. Additional endpoints addressing certain clinical
symptoms associated with low testosterone will also be assessed in the
trial. The study will also compare Androxal against Androgel, the gold
standard for patients suffering from low testosterone. We believe that
at least two additional Phase III pivotal studies beyond the currently
planned study will be required before an NDA can be submitted. A
contract has been awarded to a clinical research organization (CRO) to
begin the Phase III study as soon as the FDA has reviewed and accepted
the submission.
Initial review of the Company's special protocol assessment (SPA)
filing for its first Phase III pivotal study of efficacy has been
completed by the FDA, and the Company is in the process of responding
to their comments. The FDA has suggested that certain endpoints
suggested by Zonagen in its SPA filing, such as reduced libido, need
to be validated as clinical endpoints before being used in a Phase III
pivotal study. The Company plans on complying with the FDA's request,
and revising its Phase III pivotal protocol to incorporate the FDA's
suggestions, before continuing under the SPA. A decision on
commencement of the SPA protocol is dependent on successful completion
or progress on the above described Phase III study.
In May 2005 the Company held a pre-IND meeting with the FDA
regarding the next clinical study to be conducted in the U.S. using
Proellex for the treatment of uterine fibroids. The Company believes
that the meeting with the FDA constructively identified the
requirements that must be completed before the Company can file an IND
and begin a clinical study by year end 2005. The Company completed its
23 volume IND submission which included extensive preclinical animal
data supporting the safety of Proellex as well as a final study report
for the previously reported trial of Proellex in women with uterine
fibroids and delivered the submission to the FDA on November 10, 2005.
The Company can not begin its Proellex Phase II clinical study until
the FDA has reviewed and accepted the submission. A contract has been
awarded to a CRO to begin the Phase II study as soon as the FDA has
reviewed and accepted the submission.
Financial Results
Total revenues and other income for the three-month period ended
September 30, 2005 increased to $175,000 as compared to $29,000 for
the same period in the prior year and increased to $460,000 for the
nine-month period ended September 30, 2005 as compared to $228,000 for
the same period in the prior year. The primary increase in revenues is
due to an increase in interest rate yields and an increase in cash
reserves which the Company received from its public offering in
February 2005 offset by a reduction in SBIR grant revenue which is due
to its anticipated conclusion and is essentially depleted.
Research and development ("R&D") expenses primarily consist of
clinical regulatory affairs activities and preclinical and clinical
study development expenses. R&D expenses increased 72% to $1.6 million
for the three-month period ended September 30, 2005 as compared to
$929,000 for the same period in the prior year and increased 121% to
$4.2 million for the nine-month period ended September 30, 2005 as
compared to $1.9 million for the same period in the prior year. The
increase in R&D expenses for the three-month period ended September
30, 2005 as compared to the same period in the prior year is primarily
due to an increase of $732,000 and $274,000 related to our clinical
development programs for Androxal and Proellex, respectively,
partially offset by a decrease of $281,000 in costs associated with
the 2004 write-off of our patent portfolio related to our vaccine
adjuvants and prostate cancer vaccines. The increase in R&D expenses
for the nine-month period ended September 30, 2005 as compared to the
same period in the prior year is primarily due to an increase of $1.5
million and $1.2 million related to our clinical development programs
for Androxal and Proellex, respectively, partially offset by a
decrease of $337,000 in costs associated with the 2004 write-off of
our patent portfolio related to our vaccine adjuvants, prostate cancer
vaccines and hCG immuno-contraceptive vaccine.
General and administrative expenses decreased 15% to $461,000 for
the three-month period ended September 30, 2005 as compared to
$540,000 for the same period in the prior year and increased 8% to
$1.4 million for the nine-month period ended September 30, 2005 as
compared to $1.3 million for the same period in the prior year. The
decrease in expenses for the three-month period ended September 30,
2005 is primarily due to a decrease in costs associated with potential
funding activities in the amount of $117,000, offset by an increase in
costs associated with strategic administrative fees in the amount of
$25,000. The increase in expenses for the nine-month period ended
September 30, 2005 is primarily due to an increase in costs associated
with strategic administrative fees in the amount of $86,000, personnel
costs in the amount of $47,000, legal and accounting services in the
amount of $43,000 and investor relations costs in the amount of
$37,000, offset by a decrease in costs associated with potential
funding activities in the amount of $117,000 and a $27,000 decrease in
directors' and officers' insurance.
Net loss for the three-month period ended September 30, 2005 was
($1.9) million or ($0.19) per share as compared to a net loss of
($1.4) million or ($0.29) per share for the same period in the prior
year. Net loss for the nine-month period ended September 30, 2005 was
($5.1) million or ($0.54) per share as compared to a net loss of
($3.0) million or ($0.57) per share for the same period in the prior
year. The increase in loss per share for the three-month and
nine-month periods ended September 30, 2005 was primarily due to an
increase in clinical research activities relating to the Company's two
products, Androxal and Proellex.
The Company had cash, cash equivalents and marketable securities
of approximately $19.1 million at September 30, 2005 as compared to
$5.5 million at December 31, 2004 and had 10,079,601 shares of common
stock outstanding on September 30, 2005.
Zonagen, Inc. is engaged in the development of pharmaceutical
products that address diseases and conditions associated with the
treatment of hormonal and reproductive system disorders.
A copy of this press release may be obtained via facsimile by
dialing 1-888-329-0920 or via the internet by accessing
www.zonagen.com.
Any statements that are not historical facts contained in this
release are forward-looking statements that involve risks and
uncertainties, including Zonagen's ability to have success in the
clinical development of its technologies, Zonagen's ability to raise
additional capital on acceptable terms or at all, Zonagen's ability to
have success in meeting governmental regulations and the costs and
time required to meet such regulatory requirements, manufacturing
uncertainties related to Proellex(TM), uncertainty relating to
Zonagen's patent portfolio and such other risks which are identified
in Zonagen's Annual Report on Form 10-K for the year ended December
31, 2004. The Form 10-K is available at the Company's web site at
www.zonagen.com, at the SEC's web site at www.sec.gov or is available
by request made to Zonagen's Corporate Secretary. Zonagen disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
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ZONAGEN, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
Three Months Ended Nine Months Ended
----------------------- -----------------------
September 30, September 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues and other
income
Research and
development grants $- $2 $4 $118
Interest income 175 27 456 75
Other Income - - - 35
----------- ----------- ----------- -----------
Total revenues
and other income 175 29 460 228
----------- ----------- ----------- -----------
Expenses
Research and
development 1,641 929 4,231 1,914
General and
administrative 461 540 1,357 1,268
----------- ----------- ----------- -----------
Total expenses 2,102 1,469 5,588 3,182
----------- ----------- ----------- -----------
Net loss $(1,927) $(1,440) $(5,128) $(2,954)
=========== =========== =========== ===========
Net loss per share -
basic and diluted $(0.19) $(0.29) $(0.54) $(0.57)
=========== =========== =========== ===========
Shares used in loss
per share
calculation:
Basic 10,080 4,993 9,501 5,159
Diluted 10,080 4,993 9,501 5,159
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2005 2004
-------------- --------------
(Unaudited)
Cash and cash equivalents $3,000 $736
Marketable securities 16,053 4,800
Other current assets 203 34
Fixed assets (net) 21 18
Other assets 564 1,018
-------------- --------------
Total assets $19,841 $6,606
============== ==============
Accounts payable and accrued expenses $621 $614
Stockholders' equity 19,220 5,992
-------------- --------------
Total liabilities and stockholders'
equity $19,841 $6,606
============== ==============
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