Neoprobe Corporation (NYSE Amex: NEOP), a developer of
innovative precision diagnostics products, today announced
consolidated results for the third quarter of 2011 and for the
nine-month period ended September 30, 2011.
During the quarter, the Company sold its neoprobe® GDS line of
gamma detection device systems to Devicor Medical Products, Inc. As
such, results of operations related to the GDS business previously
reported in various individual financial statement line items
(i.e., revenues, research and development expenses) have been
reclassified to discontinued operations for all periods presented.
The Company recorded a net gain on the sale of the GDS business of
approximately $25 million during the third quarter of 2011 and
ended the quarter with cash of $31.8 million.
Neoprobe’s non-GDS revenues for both the third quarters of 2011
and 2010 relate to grants received in support of the Company’s drug
development activities. Neoprobe’s grant revenues for the third
quarter of 2011 were $256,000 compared to $150,000 for the third
quarter of 2010. Grant revenues for the nine-month period ended
September 30, 2011 were $598,000 compared to $150,000 for the same
period in 2010. Costs related to these grants received in support
of development activities are accordingly recorded in research and
development expenses.
Third quarter 2011 operating expenses were $6.7 million compared
to $3.8 million for the third quarter of 2010. Operating expenses
for the nine-month period ended September 30, 2011 were $15.7
million compared to $9.7 million for the same period of 2010. Of
the $15.7 million in operating expenses incurred on a year-to-date
basis in 2011, over $4 million related to non-recurring items such
as the Lymphoseek® New Drug Application (NDA) filing fee and
separation costs related to our former CEO. Excluding the NDA
filing fee, research and development costs increased $110,000
during the first nine months of 2011 over the same period in 2010
related to increased headcount and other consulting costs incurred
in support of the NDA offset by decreased clinical trial costs as
well as decreased costs related to chemistry, manufacturing and
control validation activities. Excluding the separation costs
related to our former CEO, selling, general and administrative
expenses for the year-to-date period in 2011 increased $1.8 million
over 2010 related to increased headcount and related costs devoted
to marketing and business development, increased investor relations
and professional services, and increased compensation costs for our
Board of Directors.
Neoprobe’s loss from operations for the third quarter of 2011
was $6.5 million compared to $3.6 million for the third quarter of
2010. Neoprobe’s loss from operations for the nine-month period
ended September 30, 2011 was $15.1 million compared to $9.6 million
for the same period of 2010. For the third quarter of 2011,
Neoprobe reported income attributable to common stockholders of
$19.8 million, or $0.21 per share, compared to a loss attributable
to common stockholders of $2.4 million, or $0.03 per share, for the
third quarter of 2010. For the nine-month period ended September
30, 2011, Neoprobe reported income attributable to common
stockholders of $13.1 million, or $0.15 per share, compared to a
loss attributable to common stockholders of $56.1 million, or $0.70
per share, for the same period in 2010.
As discussed in the Company’s periodic filings with the
Securities and Exchange Commission, the net loss attributable to
common stockholders for the first nine months of 2010 included
significant non-cash losses and deemed dividends aggregating $50.4
million. The non-cash charges in 2010 were primarily due to the
extinguishment accounting related to the June 2010 exchange of the
Company’s previous convertible debt and preferred stock for a new
series of preferred stock and to mark-to-market adjustments related
to derivative accounting treatment required for certain financial
instruments on the Company’s balance sheet.
Brent Larson, Neoprobe Senior Vice President and CFO, said, “The
sale of the GDS business is a transformative event for the Company.
Proceeds from the sale have provided us with a strong balance sheet
with which to execute our business plan and support future growth
and development.”
“We are pleased with the progress we are making across the board
in reshaping Neoprobe into a specialty pharmaceutical company
focused on precision diagnostics,” said Dr. Mark Pykett, Neoprobe
President and CEO. “The filing and subsequent acceptance of the NDA
for Lymphoseek represents a significant milestone for Neoprobe,
validating our science and regulatory approach. The U.S. Food and
Drug Administration (FDA) has established a June 10, 2012,
prescription drug user fee, or PDUFA, date for Lymphoseek. We look
forward to a positive, ongoing dialogue with FDA during their
review of Lymphoseek as we prepare for commercial launch in the
U.S.”
Dr. Pykett continued, “With the recent completion of a meeting
with the European Medicines Agency (EMA) regarding RIGScanTM, we
are moving forward with manufacturing of the humanized RIGS®
antibody, preparing regulatory documents and clinical development
plans for submission to regulatory authorities incorporating the
cumulative advice we have received this year, and looking forward
to getting RIGScan back into the clinic in 2012. We also continue
to make progress on business partnerships for Lymphoseek outside
the US, as well as the identification of a number of promising
product candidates which could potentially augment our product
pipeline.”
Milestones achieved by Neoprobe in 2011 include:
- Gained listing of our common stock on
the NYSE: Amex Stock Exchange
- Secured analyst coverage from several
major Wall Street firms
- Completed a successful
pre-investigational new drug meeting for RIGScan with FDA
- Appointed Dr. Mark Pykett as President
and Chief Executive Officer and appointed Drs. Peter Drake, Jess
Jones and Pykett to the Neoprobe Board of Directors
- Filed a shelf registration on Form S-3
to allow the Company to raise capital as necessary through the sale
of up to $100 million in a primary offering of securities
- Announced top-line data from the
NEO3-09 clinical study with all primary and secondary endpoints
achieved and presented full data from the study at major medical
meetings
- Appointed Dr. Thomas Tulip as Executive
Vice President and Chief Business Officer to direct marketing and
business development activities
- Completed the sale of our gamma
detection device business to Devicor Medical Products, Inc., for
$30 million in proceeds and up to an additional $20 million in
potential future royalties
- Filed and received notice of the
acceptance of the Lymphoseek NDA from FDA
- Completed a scientific advice meeting
with EMA for RIGScan development in the EU
- Initiated strategic repositioning and
rebranding activities of the Company as a pure-play
radiopharmaceutical developer
“In the coming weeks, we expect to announce our new brand
identity which we hope will mark a formal turning point in the
recognition of Neoprobe as a precision diagnostics company focused
on the radiopharmaceutical space,” Pykett concluded.
Neoprobe President and CEO, Dr. Mark Pykett, Senior Vice
President, Pharmaceutical Research and Clinical Development, Dr.
Frederick Cope, and Senior Vice President and CFO, Brent Larson,
will provide a business update and discuss the third quarter of
2011 during a conference call with the investment community
scheduled for tomorrow morning, October 27, 2011 at 8:30 am ET. The
conference call can be accessed as follows:
Conference Call Information TO PARTICIPATE
LIVE: TO LISTEN TO A REPLAY: Date:
Oct. 27, 2011 Available until:
Nov. 10, 2011 Time: 8:30 am ET Toll-free (U.S.) Dial in # : (877)
660-6853 International Dial in # : (201) 612-7415 Toll-free (U.S.)
Dial in # : (877) 407-0778 International Dial in # : (201) 689-8565
Replay passcode: Account #: 286
Conference ID #: 381791
About Lymphoseek
Lymphoseek is a proprietary radioactive diagnostic tracing agent
being developed for use in connection with gamma detection devices
in a surgical procedure known as Intraoperative Lymphatic Mapping.
Two Phase 3 multi-center clinical trials (www.clinicaltrials.gov,
trial registration numbers NCT00671918 and NCT01106040) for
Lymphoseek in patients with breast cancer or melanoma have
concluded. A third Phase 3 clinical study to evaluate the efficacy
of Lymphoseek as a sentinel lymph node tracing agent in patients
with head and neck squamous cell carcinoma is currently ongoing
(www.clinicaltrials.gov, trial registration number
NCT00911326).
About Neoprobe
Neoprobe Corporation (NYSE Amex: NEOP) is a biomedical company
focused on enhancing oncology patient care and improving patient
benefit through radiopharmaceutical product development. Neoprobe
is actively developing two radiopharmaceutical agent platforms –
Lymphoseek® and RIGScanTM CR – to help surgeons better identify and
treat certain types of cancer. Neoprobe’s subsidiary, Cira
Biosciences, Inc., is also exploring development of a
patient-specific cellular therapy technology platform called ACT.
Neoprobe’s strategy is to deliver superior growth and shareholder
return by bringing to market novel radiopharmaceutical agents and
advancing the Company’s pipeline program through continued
investment and selective acquisitions. For more information, please
visit www.neoprobe.com.
The Private Securities Litigation Reform Act of 1995 (the Act)
provides a safe harbor for forward-looking statements made by or on
behalf of the Company. Statements in this news release, which
relate to other than strictly historical facts, such as statements
about the Company’s plans and strategies, expectations for future
financial performance, new and existing products and technologies,
anticipated clinical and regulatory pathways, and markets for the
Company’s products are forward-looking statements within the
meaning of the Act. The words “believe,” “expect,” “anticipate,”
“estimate,” “project,” and similar expressions identify
forward-looking statements that speak only as of the date hereof.
Investors are cautioned that such statements involve risks and
uncertainties that could cause actual results to differ materially
from historical or anticipated results due to many factors
including, but not limited to, the Company’s continuing operating
losses, uncertainty of market acceptance of its products, reliance
on third party manufacturers, accumulated deficit, future capital
needs, uncertainty of capital funding, dependence on limited
product line and distribution channels, competition, limited
marketing and manufacturing experience, risks of development of new
products, regulatory risks and other risks detailed in the
Company’s most recent Annual Report on Form 10-K and other
Securities and Exchange Commission filings. The Company undertakes
no obligation to publicly update or revise any forward-looking
statements.
NEOPROBE CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS September 30,
December 31, 2011 2010 (unaudited) Assets: Cash $
31,764,460 $ 6,420,506 Other current assets 1,115,972 3,812,497
Non-current assets 491,614 629,735
Total assets $ 33,372,046 $ 10,862,738
Liabilities and stockholders' equity: Current
liabilities, including current portion of derivative liabilities $
4,177,986 $ 3,944,439 Derivative liabilities 53,010 2,077,799 Other
liabilities 663,408 708,755 Stockholders' equity 28,477,642
4,131,745 Total liabilities and
stockholders' equity $ 33,372,046 $ 10,862,738
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended September 30, September
30, September 30, September 30, 2011 2010 2011 2010 (unaudited)
(unaudited) (unaudited)
(unaudited)
Grant revenue $ 255,632 $ 149,588 $ 597,729 $ 149,588
Operating expenses: Research and development 3,858,141 2,480,984
8,159,992 6,508,363 Selling, general and administrative
2,870,603 1,287,177 7,499,454
3,233,414 Total operating expenses 6,728,744
3,768,161 15,659,446
9,741,777 Loss from operations (6,473,112 )
(3,618,573 ) (15,061,717 ) (9,592,189 )
Interest expense (564 ) (832 ) (3,229 ) (553,821 ) Change in
derivative liabilities 7,208 (87,753 ) (956,933 ) (671,360 ) Loss
on extinguishment of debt - - - (41,717,380 ) Other income, net
6,653 2,308 12,058
3,491 Loss before income taxes (6,459,815 )
(3,704,850 ) (16,009,821 ) (52,531,259 ) Benefit from income
taxes 319,689 - 319,689
- Loss from continuing operations (6,140,126 )
(3,704,850 ) (15,690,132 ) (52,531,259 ) Discontinued
operations, net of income tax effect 25,972,059
1,323,191 28,911,046 4,619,627
Net income (loss) 19,831,933 (2,381,659 ) 13,220,914
(47,911,632 ) Preferred stock dividends (25,000 )
(25,000 ) (75,000 ) (8,181,745 ) Income
(loss) attributable to common stockholders $ 19,806,933 $
(2,406,659 ) $ 13,145,914 $ (56,093,377 ) Income
(loss) per common share (basic and diluted): Continuing operations
$ (0.07 ) $ (0.05 ) $ (0.18 ) $ (0.76 ) Discontinued operations $
0.28 $ 0.02 $ 0.33 $ 0.06 Income (loss) attributable to common
stockholders $ 0.21 $ (0.03 ) $ 0.15 $ (0.70 ) Weighted
average shares outstanding: Basic and Diluted 93,070,235 80,605,072
89,410,150 80,149,302
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