"The clear highlight of the quarter was Roche's decision to licenseR3487/MEM 3454, which underscored the potential of our nicotinic alpha-7program, strengthened our financial position and validated our CNS drugdevelopment capabilities. Equally important was the progress we reported withour two proprietary programs, including the positive pro-cognitive andanti-inflammatory data for MEM 1414 and the nomination of MEM 68626 as ourlead 5-HT6 antagonist development candidate with potential applicability incognition or obesity," stated Vaughn M. Kailian, President and Chief ExecutiveOfficer of Memory Pharmaceuticals. "We plan to build on this momentum in thesecond half of the year and remain on track to complete our Phase 2a trial forMEM 3454 in CIAS and our Phase 1 program for MEM 63908 and announce resultsfrom both trials in the fourth quarter. We are also preparing to initiate abiomarker study funded by Roche for MEM 3454, a Phase 2a trial for MEM 1414and a Phase 1 program for MEM 68626 before year-end."
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Financial Results
For the quarter ended June 30, 2008, the Company reported a net loss of$12.4 million, or $0.17 per share, compared to a net loss of $10.7 million, or$0.15 per share, for the same period in 2007. For the six months ended June30, 2008, the Company reported a net loss of $25.9 million, or $0.35 pershare, compared to $19.6 million, or $0.27 per share, for the same period in2007.
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For the quarter ended June 30, 2008, the Company reported revenue of $0.9million, compared to revenue of $2.7 million for the same period in 2007. Forthe six months ended June 30, 2008, revenue was $1.7 million, compared torevenue of $5.4 million for the same period in 2007. The decrease in revenuefor both periods is a result of the conclusion of the research and developmentfunding portion of the Company's collaboration with Amgen related to thedevelopment of PDE10 inhibitors, partially offset by increased milestonepayments and research and development funding from Roche related to thenicotinic alpha-7 receptor agonist program.
Research and development expenses for the quarter ended June 30, 2008 were$10.3 million, lower than the $11.3 million reported for the same period in2007, due primarily to a $0.7 million decrease in personnel-related costs.For the six months ended June 30, 2008, research and development expenses were$21.2 million compared to $21.1 million in the same period in 2007. Theincrease was due primarily to $2.6 million in increased costs associated withthe clinical trials for the nicotinic alpha-7 agonist program and a $1.6million increase in the preclinical activities for the Company's 5-HT6antagonist program, partially offset by a $4.0 million decrease in clinicaland manufacturing costs for MEM 1003 and a $0.3 million decrease in personnel-related costs.
General and administrative expenses for the quarter ended June 30, 2008were $2.6 million, unchanged from the same period in 2007. For the six monthsended June 30, 2008, general and administrative expenses were $5.5 millioncompared to $4.8 million for the same period in 2007. The increase was dueprimarily to an increase of $0.5 million in legal fees and $0.4 million inoutside services.
At June 30, 2008, the Company had cash and cash equivalents ofapproximately $22.1 million, compared to $38.2 million at the end of 2007.The Company continues to expect that its existing cash and cash equivalents,together with payments expected to be made under its collaboration agreements,should be sufficient to fund operating expenses, scheduled debt obligationsand capital equipment requirements into the first half of 2009.
Second Quarter Highlights and Recent Developments
-- Roche Opt-in for R3487/MEM
