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The net loss available to common shareholders for the three months endedSeptember 30, 2008 was $13.1 million or ($0.34) per share compared to $5.9million or ($0.21) per share for the same period last year. The increase inthe net loss is primarily attributable to $10.0 million of milestone expensesdue to Abbott Laboratories as part of the cethromycin licensing agreement thatwere triggered as a result of the cethromycin new drug application (NDA)submission to the U.S. Food and Drug Administration (FDA) at the end of thethird quarter.
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"We achieved multiple significant milestones in the third quarterincluding establishing a major partnership, valued at more than $100 million,for the development and commercialization of cethromycin with Wyeth in theAsia Pacific region, and completing our cethromycin NDA submission incommunity acquired pneumonia," said Michael T. Flavin, Ph.D., chairman andchief executive officer of Advanced Life Sciences. "We believe that these aremajor accomplishments that significantly enhance the value of our lead drugcandidate and underscore our company's emerging role in the large and growingglobal antibiotics market. We look forward to continuing this momentum throughthe fourth quarter and into 2009."
The company ended the third quarter of 2008 with cash and cash equivalentstotaling $7.8 million including $1.7 million from the sale of its common stockto Wyeth. Cash usage in the third quarter 2008 was approximately $3.0 million.
Anticipated Fourth Quarter 2008 Milestones
In the fourth quarter 2008, we anticipate achieving the followingmilestones:
Financial Outlook for the Fourth Quarter of 2008
In October 2008, using cash on hand and by accessing the remaining$6.0 million under its expanded credit facility, Advanced Life Sciences paidits $10.0 million milestone obligation to Abbott Laboratories which wastriggered upon the submission of the cethromycin NDA in September. TheCompany has significantly reduced variable expenses associated with thecompleted NDA submission and expects its fourth quarter 2008 cash requirementsto range from $12.8 million to $13.4 million inclusive of the $10.0 millioncethromycin NDA submission milestone.
Nasdaq Staff Letter
On October 1, 2008, we received notice from the Nasdaq ListingQualifications Department stating that the market value of our listedsecurities was below $35.0 million for 10 consecutive days, and that we werein violation of the requirement for continued listing on the Nasdaq CapitalMarket under Marketplace Rule 4310(c)(3)(B) (the "Rule"). Nasdaq alsoinformed us that we are not in compliance with either of Marketplace Rules4310(c)(3)(A) or 4310(c)(3)(C), which together require either minimumstockholders' equity of $2.5 million or net income from continuing operationsof $500,000 in the most recently completed fiscal year or in two of the lastthree most recently completed fiscal years for listing eligibility.
We were provided 30 calendar days, or until October 31, 2008, to establishcompliance with these continued listing requirements of the Nasdaq CapitalMarket. This required, at a minimum, that the market value of listedsecurities of our common stock remained above $35.0 million for a minimum of10 consecutive business days at anytime prior to October 31, 2008.
We were not compliant with the Rule by October 31, 2008 and receivednotice from the Nasdaq Listing Qualifications Department stating that we arein violation of the requirement for continued listing on the Nasdaq CapitalMarket. We intend to appeal this decision with the Nasdaq ListingQualifications Department. Our securities will remain listed on the NasdaqCapital Market throughout the appeal process.
Conference Call Today
Advanced Life Sciences will host a conference call and live webcast at10:00 a.m. Eastern Time on Thursday, November 6, 2008 to discuss the company'sthird quarter financial results.
The conference call will be webcast simultaneously over the Internet.Please visit the Investor Relations section of the Advanced Life Sciencescorporate website http://www.advancedlifesciences.com. Investors mayparticipate in the conference call by dialing 888-680-0893 (domestic) or617-213-4859 (international). The passcode for the conference call is80103777. Investors are advised to dial into the call at least ten minutesprior to the call to register. Participants may pre-register for the call athttps://www.theconferencingservice.com/prereg/key.process?key=PN3D7M9E4.Pre-registrants will be issued a pin number to use when dialing into the livecall which will provide quick access to the conference by bypassing theoperator upon connection. A replay of the conference call will be availableuntil November 13, 2008. Callers may access the telephone replay by dialing888-286-8010 (domestic) or 617-801-6888 (international), passcode 96626416.
About Community Acquired Pneumonia (CAP)
CAP is the sixth most common cause of death in the United States. CAP andother respiratory tract infections are caused by pathogens such asStreptococcus pneumoniae and Haemophilus influenzae. Approximately 5.6million cases of CAP are diagnosed each year in the United States with 10million physician visits, resulting in an estimated total annual expenditureof $2 billion dollars for prescribed antibiotics to treat CAP. CAP ispotentially fatal if not treated properly, and the bacteria that cause CAP aredeveloping resistance to current standard of care treatments.
Macrolides and penicillins are currently the front-line treatments forrespiratory tract infections such as CAP. As macrolide and penicillinresistance grows and has the potential to cause more clinical failures, thereis a need for new antibiotics with unique mechanisms of action that canovercome this emerging resistance.
About Cethromycin
Cethromycin has shown higher in vitro potency and a broader range ofactivity than macrolides against Gram-positive bacteria, certain Gram-negativebacteria and atypical organisms associated with respiratory tract infections.In in vitro tests, it appears to be effective against penicillin- andmacrolide-resistant bacteria. Cethromycin has a mechanism of action that mayslow the onset of future bacterial resistance. In addition to its utility inCAP, cethromycin is also being investigated for the prophylactic treatment ofinhalation anthrax post-exposure. The FDA has designated cethromycin as anorphan drug for the prophylactic treatment of inhalation anthrax postexposure, but the drug is not yet approved for this or any other indication.
About Advanced Life Sciences
Advanced Life Sciences is a biopharmaceutical company engaged in thediscovery, development and commercialization of novel drugs in the therapeuticareas of infection, cancer and respiratory diseases. The Company's leadcandidate, cethromycin, is a novel NDA-stage once-a-day oral antibiotic forthe treatment of respiratory tract infections including CAP. For moreinformation, please visit us on the web athttp://www.advancedlifesciences.com.
Forward-Looking Statements
Any statements contained in this press release that relate to futureplans, events or performance are forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Forward-lookingstatements represent our management's judgment regarding future events. TheCompany does not undertake any obligations to update any forward-lookingstatements whether as a result of new information, future events or otherwise.Our actual results could differ materially from those discussed herein due toseveral factors including the success and timing of our clinical trials, theadequacy of our clinical results, the timing and terms of any commercialpartnership, and our ability to obtain and maintain regulatory approval andlabeling of our product candidates; our plans to develop and commercialize ourproduct candidates; the loss of key scientific or management personnel; thesize and growth of potential markets for our product candidates and ourability to serve those markets; regulatory developments in the U.S. andforeign countries; the rate and degree of market acceptance of any futureproducts; the accuracy of our estimates regarding expenses, future revenuesand capital requirements; our ability to obtain financing on terms acceptableto us; our ability to obtain and maintain intellectual property protection forour product candidates; the successful development of our sales and marketingcapabilities; the success of competing drugs that become available; and theperformance of third party collaborators and manufacturers. These andadditional risks and uncertainties are detailed in the Company's filings withthe Securities and Exchange Commission.Operating Expense Analysis * Research and development expenses were $11.2 million for the three months ended September 30, 2008 compared to $3.8 million for the three months ended September 30, 2007. The increase in R&D expense is primarily due to the NDA submission milestone payment to Abbott Laboratories. * Selling, general and administrative expenses totaled $1.8 million compared to $2.0 million for the second quarter of last year. Recent Achievements * Signed development and commercialization agreement with Wyeth for cethromycin in Asia Pacific Region; * Submitted NDA for cethromycin in mild-to-moderate community acquired pneumonia; * Entered into debt and equity financing agreements to strengthen the balance sheet and help fund commitments associated with the NDA submission and pre-commercialization activities; * Awarded contract by the Defense Threat Reduction Agency (DTRA) of the U.S. Department of Defense worth up to $3.8 million to further study cethromycin as a potential broad-spectrum medical countermeasure over two years; * Presented posters and met with cethromycin National Advisory Board at the October ICAAC/IDSA conference in Washington, DC; * Announced and initiated collaboration with UK Ministry of Defence to evaluate the developmental compound ALS-886 as a treatment for chemically induced lung injury.
SOURCE Advanced Life Sciences Holdings, Inc.
