NeoPharm, Inc. Announces Second Quarter 2010 Financial Results

LAKE BLUFF, Ill.--(BUSINESS WIRE)-- NeoPharm, Inc. (Other OTC: NEOL.PK), a publicly traded biopharmaceutical company dedicated to the research, development and commercialization of new and innovative therapeutic applications of drugs for various forms of cancer and other diseases, today announced its second quarter 2010 financial results.

“NeoPharm continued to make good progress across multiple development programs in the second quarter,” commented Dr. Aquilur Rahman, President and Chief Executive Officer of NeoPharm. “We have enrolled 17 patients in less than two months in our Phase II clinical trial for Liposome Entrapped Paclitaxel (LEP) for the treatment of breast cancer in India, which has been expanded from 35 patients to 70 patients . We currently expect to have the total planned enrollment of the additional 35 patients for LEP completed during the third quarter of this year. When combined with the good responders from the 35 patients enrolled our initial Phase II study, successful completion of the expanded study will enable us to reduce the number of patients for our planned Phase III trial for LEP, which is currently projected to start in the early part of 2011 provided there are enough funds available to the company.”

“Patient enrollment is also advancing in our Phase II trial for LE-DT as a frontline treatment of patients with locally advanced or metastatic pancreatic cancer. To date, we have enrolled five patients and expect this trial may be completed as early as the fourth quarter of this year. Additionally, we are anticipating that we will soon begin enrolling patients in another Phase II trial for LE-DT for advanced prostate cancer, and, would hope to start the Phase I clinical trial for IPF in the fourth quarter of 2010. We continue to be satisfied with the advancement of our drug candidate portfolio, as we continue to move toward our ultimate goal of commercialization. However, the success of all these clinical programs depends on obtaining additional funding resources which continues to be management’s top priority,” further commented Dr. Rahman.

Second Quarter 2010 Financial Results

For the second quarter ended June 30, 2010, NeoPharm reported a net loss of $0.8 million, or ($0.03) per basic and diluted share, as compared to a net loss of $1.9 million, or ($0.07) per share, for the same period last year. For the six months ended June 30, 2009, NeoPharm reported a net loss of $2.2 million, or ($0.08) per basic and diluted share, compared to a net loss of $4.2 million, or ($0.15) per share, for the same period last year. The decrease in the Company’s net loss for the three and six months ended June 30, 2010 is primarily due to a $0.7 gain on the reversal of all prior unrealized losses related to its investments in auction rate securities (“ARS”), and continued decreases in general and administrative expenses. On June 30, 2010, the Company exercised its put option and redeemed all of its ARS investments at full par value, reversing all previously recorded unrealized losses and repaying its ARS loan in full with the proceeds of this redemption. The Company’s general and administrative expenses decreased $0.4 million and $0.7 million for the three and six months ended June 30, 2010 in connection with continuing cost-savings initiatives in this area.

During the second quarter, the Company’s cash outlays decreased to $1.3 million as compared to $1.9 million for the first quarter of 2010. This decrease in cash outlays is primarily attributable to the effectiveness of cost-saving measures, however the Company expects future cash outlays to increase consistent with the advancement and progression of its clinical trials and other preclinical development activities. The Company had $1.8 million in cash and cash equivalents as of June 30 2010, and projects that it has adequate resources to fund its operations into the fourth quarter of 2010. The Company is currently exploring various alternatives to continue its operations for the rest of 2010 and beyond, but no assurance can be given that such efforts will be successful.

About NeoPharm, Inc.

NeoPharm, Inc., based in Lake Bluff, Illinois, is a publicly traded biopharmaceutical company dedicated to the research, development and commercialization of new and innovative cancer and other drugs for therapeutic applications. Additional information can be obtained by visiting NeoPharm’s web site at www.neopharm.com.

Forward Looking Statements - This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company has tried to identify such forward-looking statements by use of such words as "expects," "intends," "hopes," "anticipates," "believes," "could," "may," "evidences" and "estimates," and other similar expressions, but these words are not the exclusive means of identifying such statements. Such statements include, but are not limited to, any statements relating to the Company’s ability to obtain additional funding, its strategic review of projects and operations, the Company's drug development programs, the initiation, progress and outcomes of clinical trials of the Company's drug product candidates, projections regarding cash used in operations, financial projections, and any other statements that are not historical facts. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in financing, development, testing, regulatory approval, production, and marketing of the Company's drug compounds including, but not limited to, the Company's ability to fund and pursue additional testing of its drug product candidates, uncertainty regarding the outcomes of ongoing or potential clinical studies, the Company's financial guidance and projections, including but not limited to, the fact that the Company’s financial statements have not been subjected to a review by the Company’s independent registered accounting firm in accordance with Statement of Auditing Standards No. 100, the Company's ability to evaluate the strategic alternatives available to the Company and to cut back on its funding of certain of its development projects in order to conserve its cash resources, the ability of the Company to procure additional future sources of financing, unexpected adverse side effects or inadequate therapeutic efficacy of the Company's drug compounds, that could slow or prevent products coming to market, uncertainty regarding the Company's ability to market its drug products, the uncertainty of patent protection for the Company's intellectual property or trade secrets, and other risks of the type previously detailed in filings the Company formerly made with the Securities and Exchange Commission (“SEC”). Such statements are based on management's current expectations, but actual results would be expected to differ materially due to various factors, including those risks and uncertainties mentioned or referred to in this press release. At the Company’s request, the Company’s obligation to file reports with the SEC was suspended effective February 12, 2009. For the foregoing reasons, you should not rely on these forward-looking statements or on previously filed SEC reports as a prediction of actual future results.

NEOPHARM, INC.
Condensed Consolidated Statements of Operations
Three and Six Months Ended June 30, 2010 and 2009
           
Three Months Ended Six Months Ended
(unaudited) (unaudited)
June 30, 2010 June 30, 2009 June 30, 2010 June 30, 2009
 
Total revenue $ - $ - $ - $ -
 
Expenses:
Research and development 1,078,000 1,040,000 1,890,000 2,442,000
Selling, general, and administrative 489,000 863,000 1,151,000 1,868,000
Gain on sale of equipment and furniture   -     -     -     (21,000 )
Total Expenses   1,567,000     1,903,000     3,041,000     4,289,000  
Loss from operations (1,567,000 ) (1,903,000 ) (3,041,000 ) (4,289,000 )
 
Gain on auction rate securities put option settlement 727,000 - 735,000 -
Interest income 50,000 38,000 142,000 171,000
Interest expense   (42,000 )   (76,000 )   (86,000 )   (76,000 )
Net loss $ (832,000 ) $ (1,941,000 ) $ (2,250,000 ) $ (4,194,000 )
Net loss per share - basic and diluted $ (0.03 ) $ (0.07 ) $ (0.08 ) $ (0.15 )
Weighted average shares outstanding - basic and diluted   28,408,482     28,498,814     28,408,482     28,498,814  
 
 
Selected Balance Sheet data
June 30, 2010 December 31, 2009
(unaudited) (audited)
 
Cash and cash equivalents 1,804,000 5,042,000
Investments in auction rate securities (current) - 12,393,000
Put option on auction rate securities (current) - 1,557,000
Total current assets 1,979,000 19,302,000
Total assets 2,811,000 20,202,000
 
Short-term debt: auction rate securities loan - 13,950,000
Interest expense payable: auction rate securities loan - 61,000
Total current liabilities 1,587,000 16,079,000
Long-term liabilities 42,000 39,000
Accumulated deficit (290,163,000 ) (287,913,000 )
Total stockholders' equity 1,182,000 4,084,000
 
 
The interim financial information presented above has not been subjected to a review
by the Company’s independent registered public accounting firm.



CONTACT:

NeoPharm, Inc.
Martin K. McCarthy
Corporate Controller & Acting CFO
847-887-0800
[email protected]

KEYWORDS:   United States  North America  Illinois

INDUSTRY KEYWORDS:   Health  Biotechnology  Clinical Trials  Hospitals  Pharmaceutical  Research  FDA  Science

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