ISELIN, N.J., Aug. 7 Pharmos Corporation(Nasdaq: PARS) today reported results for the second quarter ended June 30,2008. The Company recorded a net loss of $2.7 million, or $0.10 per share, forthe second quarter 2008 compared to a net loss of $4.6 million, or $0.18 pershare, in the second quarter 2007. Cash and cash equivalents totaled$9.0 million at June 30, 2008.
The decrease in net loss for the second quarter 2008 is due primarily to a46% decrease in operating expenses to $2.6 million from $4.9 million in thesecond quarter 2007. The decline in operating expenses resulted from a 41%decrease in gross research and development expenses to $2.1 million comparedto $3.7 million in the second quarter 2007. Also general and administrativeexpenses decreased 66% to $0.5 million from $1.3 million in the second quarter2007.
During the second quarter, the Company advanced a Phase IIb trial of itslead compound, dextofisopam, in female IBS patients. The Phase IIb trial isexpected to enroll approximately 480 patients in about 70 sites in the UnitedStates. Costs of $1,470,000 were incurred during the quarter in connectionwith the trial, comprising CRO-related activities and patient recruitmentcosts. During the second quarter, the Company engaged a second CRO to identifyand manage additional sites. As the Company is currently behind its plannedenrollment schedule, additional expenses were incurred in conducting acentralized advertising campaign to enhance patient enrollment. Dextofisopamwas one of the compounds the Company obtained through the acquisition of VelaPharmaceuticals Inc which closed in October 2006. The continued development ofthis compound through late-stage clinical testing will significantly increasethe research and development expenses going forward.
A Phase 2a clinical trial with the Company's NanoEmulsion deliverytechnology for topical application of analgesic and anti-inflammatory agentscommenced in June 2007 targeting 126 patients. The Company believes that ithas sufficient patient data to measure efficacy and, given the typically slowrecruitment encountered in the summer, the Company has decided to ceaseenrollment, complete those patients currently in screening, and evaluate andanalyze the results of the 100+ patients who have completed the trial.
General and administrative expenses for the second quarter of 2008decreased by 66%, from $1.3 million in 2007 to $0.5 million. The declinereflects decreases in virtually every general and administrative expensecategory. The primary reductions include a $450,000 reduction in payroll and a$160,000 reduction in consultant and professional fees. The decrease inpayroll costs reflect the impact of the third and fourth quarter 2007restructuring plans which have reduced the Company's head count from 51employees in March 2007 to 11 employees at the end of June 2008. The decreasein consulting and professional fees in 2008 result from a decline in legalcosts and investor relation costs, and a one time IRS section 382 tax analysiscost incurred in 2007.
For the first half ended June 30, 2008, Pharmos recorded a net loss of$6.3 million, or $0.24 per share compared to a net loss of $9.4 million, or$0.37 per share in the first half 2007. Total operating expenses decreased 38%to $6.2 million from $10.0 million. Gross research and development expensesdecreased 25% to $4.9 million from $6.6 million in the first half 2007primarily related to the Company's focus of cash resources on the DextofisopamPhase 2b trial and the downsizing and curtailment of general research anddevelopment programs. Also a 67% decrease in general and administrativeexpenses to $1.3 million from $3.8 million due to the decrease in consultingand professional fees in 2008 result from non recurring 2007 costs related tocontractual payment obligations associated with the retirement of theCompany's chief executive officer, higher l