Advanced Life Sciences Announces First Quarter 2010 Financial Results and Debt Restructuring Agreements

CHICAGO, May 10 /PRNewswire-FirstCall/ -- Advanced Life Sciences Holdings, Inc. (OTC Bulletin Board: ADLS), a biopharmaceutical company engaged in the discovery, development and commercialization of novel drugs in the therapeutic areas of infection, oncology and respiratory diseases, today announced its financial results for the first quarter ended March 31, 2010.

(Logo:  http://www.newscom.com/cgi-bin/prnh/20080218/ALSLOGO)

The net loss allocable to common shareholders for the three months ended March 31, 2010 was $2.0 million or ($0.02) per share compared to a net loss allocable to common shareholders of $2.3 million or ($0.06) per share for the three months ended March 31, 2009.  The decrease in the net loss is due to decreased support costs involved in the clinical activities and regulatory review of the Company's lead compound, Restanza™ (cethromycin).

The Company ended the first quarter of 2010 with cash and cash equivalents totaling $2.8 million.  Cash used for operating activities during the quarter was approximately $2.3 million.

"Following the successful approval of the measures voted on by our shareholders at our recent shareholder meeting, we are excited to continue to advance our development of Restanza for use as a drug to treat serious community-based infection such as pneumonia and as a broad spectrum countermeasure against key bioterror pathogens," said Michael T. Flavin, Ph.D., chairman and chief executive officer of Advanced Life Sciences.

The Company also announced today that it has amended its loan agreement with Leaders Bank to extend the date of maturity by 12 months to January 1, 2012.  In connection with this extension, the Company reduced the amount currently outstanding under the facility from $10 million to $8.5 million and has agreed to further reduce the outstanding balance to $6 million by April 1, 2011.  Advanced Life Sciences has also agreed to increase the interest rate from 8.5% to 10% and to issue 1,000,000 common stock warrants to Leaders Bank.  

In addition, the Company announced that it has entered into an agreement providing that the $2 million promissory note with Michael T. Flavin, Ph.D., chairman and chief executive officer of Advanced Life Sciences, will be exchanged for equity securities of the Company.  The exchange is expected to occur at the same price and time as a contemplated concurrent sale of equity securities and will result in cancellation of the outstanding indebtedness.

"We view these two debt restructuring commitments as very positive transactions that will strengthen the Company's balance sheet and provide financial flexibility as we move forward," said John L. Flavin, president and chief financial officer of Advanced Life Sciences.  "In addition to reducing the debt on our balance sheet, the steps we have taken will mitigate our annual cash outflows by close to $400,000."

Operating Expense Analysis

  • Research and development expenses were $0.9 million for the three months ended March 31, 2010, approximately the same as the three months ended March 31, 2009.  
  • Selling, general and administrative expenses totaled $1.3 million for the first quarter compared to $1.5 million for the first quarter of last year.  

First Quarter Achievements

  • Met with the FDA and continued the Special Protocol Assessment (SPA) process for our upcoming CABP clinical program;
  • Responded to BARDA request for information relating to the pending BAA proposal submission;
  • Initiated PK animal studies for the Restanza IV formulation;
  • Reported potent Restanza in vitro data in Burkholderia psuedomallei and Burkholderia mallei, which are important biodefense and global health related pathogens.

Conference Call Details

Advanced Life Sciences will host a conference call and live webcast at 9:00 a.m. Eastern Time on Monday, May 10, 2010 to discuss the Company's first quarter financial results.

The conference call will be webcast simultaneously over the Internet. Please visit the Investor Relations section of the Advanced Life Sciences corporate website www.advancedlifesciences.com. Alternatively, callers may participate in the conference call by dialing 888.680.0893 (domestic) or 617.213.4859 (international). The passcode for the conference call is 91076532. A replay of the conference call will be available until May 17, 2010. Callers may access the telephone replay by dialing 888-286-8010 (domestic) or 617-801-6888 (international), passcode 33440510. Investors are advised to dial into the call at least ten minutes prior to the call to register. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=P39XBXM9U. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.

About Community Acquired Bacterial Pneumonia (CABP)

CABP is the sixth most common cause of death in the United States. CABP and other respiratory tract infections are caused by pathogens such as Streptococcus pneumoniae and Haemophilus influenzae.  Approximately 5.6 million cases of CABP are diagnosed each year in the United States with 10 million physician visits, resulting in an estimated total annual expenditure of $2.0 billion for prescribed antibiotics to treat CABP.  CABP is potentially fatal if not treated properly, and the bacteria that cause CABP are developing resistance to current standard of care treatments.

Macrolides and penicillins are currently the front-line treatments for respiratory tract infections such as CABP.   As macrolide and penicillin resistance grows and has the potential to cause more clinical failures, there is a need for new antibiotics with unique mechanisms of action that can overcome this emerging resistance.

About Restanza

Restanza is a novel, once-a-day, oral antibiotic that is in late stage development for the treatment of CABP and biodefense pathogens. It has shown higher in vitro potency and a broader range of activity than macrolides against Gram-positive bacteria associated with respiratory tract infections and appears to be effective against penicillin-, macrolide- and fluoroquinolone-resistant bacteria. Restanza's demonstrated potency and ability to overcome bacterial resistance may be due to its mechanism of action resulting in specificity for its bacterial target. In addition to its utility in CABP, Restanza is also being investigated for the prophylactic treatment of inhalation anthrax post-exposure and other high priority biodefense pathogens, including plague and tularemia. The FDA has designated Restanza as an orphan drug for the prophylactic treatment of inhalation anthrax post exposure, as well as for use in treating plague and tularemia, but the drug is not yet approved for these or any other indications.

About Advanced Life Sciences

Advanced Life Sciences is a biopharmaceutical company engaged in the discovery, development and commercialization of novel drugs in the therapeutic areas of infection, cancer and respiratory diseases. The Company's lead candidate, Restanza, is a novel once-a-day oral antibiotic in late-stage development for the treatment of respiratory tract infections including CABP and biodefense pathogens including anthrax, plague and tularemia. For more information, please visit us on the web at www.advancedlifesciences.com or follow us on twitter at http://twitter.com/advancedlifesci.

Forward-Looking Statements

Any statements contained in this press release that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements represent our management's judgment regarding future events.  The Company does not undertake any obligations to update any forward-looking statements whether as a result of new information, future events or otherwise.  Our actual results could differ materially from those discussed herein due to several factors including the success and timing of our clinical trials and our ability to obtain and maintain regulatory approval and labeling of our product candidates; our plans to develop and commercialize our product candidates; the loss of key scientific or management personnel; the size and growth of potential markets for our product candidates and our ability to serve those markets; regulatory developments in the U.S. and foreign countries; the rate and degree of market acceptance of any future products; the accuracy of our estimates regarding expenses, future revenues and capital requirements; our ability to obtain financing on terms acceptable to us; our ability to obtain and maintain intellectual property protection for our product candidates; the successful development of our sales and marketing capabilities; the success of competing drugs that become available; and the performance of third party collaborators and manufacturers.  These and additional risks and uncertainties are detailed in the Company's filings with the Securities and Exchange Commission.

ADVANCED LIFE SCIENCES HOLDINGS, INC. AND SUBSIDIARY

(A Development Stage Company)


March 31,

December 31,

CONSOLIDATED BALANCE SHEETS

2010

2009

(Unaudited)






ASSETS






CURRENT ASSETS:



 Cash and cash equivalents

$    2,787,456

$    2,841,801

 Grant receivable

283,526

530,219

 Prepaid insurance

122,233

111,761

 Other prepaid expenses and deposits

133,520

88,535




          Total current assets

3,326,735

3,572,316




PROPERTY AND EQUIPMENT:



 Furniture and fixtures

214,380

244,072

 Computer software and equipment

258,786

258,786

 Leasehold improvements

177,253

177,253




          Total property and equipment—at cost

650,419

680,111

 Less accumulated depreciation

(606,019)

(624,158)




          Property and equipment—net

44,400

55,953




OTHER ASSETS:



  Commercial launch materials

2,760,936

2,760,936

  Deferred offering and financing costs

10,174

13,566

  Other long-term assets

25,000

25,000




          Total other assets

2,796,110

2,799,502




TOTAL ASSETS

$    6,167,245

$    6,427,771




LIABILITIES AND EQUITY (DEFICIT)






CURRENT LIABILITIES:



 Accounts payable

$       549,023

$      604,334

 Accrued payroll

416,896

664,436

 Other accrued expenses

362,265

661,504

 Accrued interest payable

73,194

73,194

 Short-term lease payable

-

4,350

 Line of credit

3,000,000

-

 Short-term grant payable

500,000

         -




          Total current liabilities

4,901,378

2,007,818




Long-term grant payable

-

500,000

Long-term notes payable - related party

2,000,000

2,000,000

Line of credit

7,000,000

10,000,000




          Total liabilities

13,901,378

14,507,818




COMMITMENTS AND CONTINGENCIES






EQUITY (DEFICIT):



 Common stock, $0.01 par value—120,000,000 shares authorized;



   100,372,067 issued and outstanding at March 31, 2010; 84,925,010



   shares issued and outstanding at December 31, 2009

1,003,721

849,250

 Additional paid-in capital

124,789,598

122,621,392

 Deficit accumulated during the development stage

(133,527,452)

(131,550,689)

 Noncontrolling interest in subsidiary

         -

         -




          Total equity (deficit)

(7,734,133)

(8,080,047)




TOTAL LIABILITIES AND EQUITY (DEFICIT)

$    6,167,245

$    6,427,771



ADVANCED LIFE SCIENCES HOLDINGS, INC. AND SUBSIDIARY




(A Development Stage Company)










CONSOLIDATED STATEMENTS OF OPERATIONS





(Unaudited)



















Period From





Inception





(January 1, 1999)


Three months ended March 31,


Through


2010

2009


March 31, 2010

Revenue:





 Management fees

$                    -

$                    -


$                  1,161,180

 Grants

479,824

411,485


4,549,416

 Royalty—related party

         -

         -


45,238






          Total revenue

479,824

411,485


5,755,834






Expenses:





 Research and development

864,204

934,769


95,906,886

 Contracted research and development—





   related party

-

-


7,980,299

 Selling, general and administrative

1,341,829

1,508,953


34,713,315






          Total expenses

2,206,033

2,443,722


138,600,500











Loss from operations

(1,726,209)

(2,032,237)


(132,844,666)






Net other (income) expense:





 Interest income

(5,435)

(1,732)


(2,965,858)

 Interest expense

255,989

252,718


4,441,604

 Other (income) expense, net

-

-


146,092

 Gain on sale of interest in Sarawak Medichem Pharmaceuticals joint venture

         -

         -


(939,052)






Net other (income) expense

250,554

250,986


682,786






Net loss

(1,976,763)

(2,283,223)


(133,527,452)






Less net loss attributable to the noncontrolling interest in subsidiary

         -

         -


         -






Net loss attributable to Advanced Life Sciences Holdings, Inc.

(1,976,763)

(2,283,223)


(133,527,452)






Less accumulated preferred stock dividends of subsidiary for the period

43,750

43,750


1,888,542






Net loss available to common shareholders

$       (2,020,513)

$       (2,326,973)


$              (135,415,994)






Net loss per share available to common shareholders - basic and diluted

$              (0.02)

$              (0.06)













Weighted average shares outstanding - basic and diluted

92,642,185

41,779,634





SOURCE Advanced Life Sciences Holdings, Inc.

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