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SCOLR Pharma, Inc. Reports Second Quarter 2010 Financial Results

Wednesday, August 11, 2010 Corporate News J E 4
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BOTHELL, Wash., Aug. 10 SCOLR Pharma, Inc. (NYSE AMEX: DDD) today reported financial results for the three and six months ended June 30, 2010.

Stephen J. Turner, SCOLR Pharma's President and CEO, said, "We continue to be encouraged with the progress we are making on our various business objectives. Direct sales efforts for our extended release nutritional supplements continue to receive positive response from our potential customers. We continue to advance our 12 hour ibuprofen formulation towards submission and have submitted our special protocol assessment (SPA) on the actual use study (AUS) with the Food and Drug Administration (FDA). The Abbreviated New Drug Application (ANDA) submission for our 12 hour pseudoephedrine is still under review by the FDA.

"Although we anticipate making some small shipments of nutritional products during 2010, the majority of anticipated sales growth in the nutritional business is expected to occur in 2011 as we bring key accounts online and expand both our customer base and geographic distribution. We continue to add internal and external resources to support the sales and logistics functions of the nutritional business, and expect these resources to enhance our ability to grow, service and support our base of nutritional product customers.

"For our ibuprofen program, completion of the SPA will position SCOLR to prepare to conduct the AUS required by the FDA as a pre-requisite for regulatory submission. We intend to meet with the FDA following receipt of the SPA response to confirm that we are on track for an NDA 505(b)2 submission and intend to begin work on the AUS following receipt of revenues, funding or partnership support of the program.

"Our ANDA submission for pseudoephedrine is under review by the FDA and we do not currently anticipate any issues that would affect our strategy for commercialization of the product. Pending notification from the agency that the ANDA is 'approvable,' we will need to complete validation of the commercial process and produce our initial lots for potential sales into the US marketplace. We may delay commercialization activities pending receipt of additional revenues, funding or partnership support. Depending on the timing of the response, we may also choose to delay production of the initial lots to coincide with the "cough/cold" season in order to ensure we have adequate shelf life remaining. In addition to direct commercialization, we are exploring potential licensing and partnership opportunities."

Second Quarter 2010 compared to Second Quarter 2009 Financial Results

Total revenues for the quarter ended June 30, 2010 were $223,000, a decrease of 3% compared to $231,000 for the same period in 2009.

For the quarter ended June 30, 2010, the Company's marketing and selling expenses increased 62%, or $24,000 to $63,000 compared to $39,000 for the same period in 2009. This increase was primarily due to marketing and sales brokerage related expenses associated with the planned distribution of our nutritional products. General and administrative expenses decreased 39%, or $378,000 to $595,000 for the three months ended June 30, 2010, compared to $973,000 for the same period in 2009, primarily due to lower personnel related costs, non-cash share based compensation expense, insurance premiums and legal expense.

Research and development expenses decreased 68%, or $538,000 to $256,000 for the three months ended June 30, 2010, compared to $794,000 for the same period in 2009, primarily due to reductions in personnel and other expenses reflecting the deferral of development activities for our product candidates.

Net loss decreased 55%, or $868,000 to $706,000 for the three months ended June 30, 2010, compared to $1.6 million for the same period in 2009. The decrease was primarily due to lower overall operating expenses.

SCOLR Pharma had approximately $3.3 million in cash and cash equivalents, and $383,000 in restricted cash as of June 30, 2010. Based on our current operating plan, we anticipate that our existing cash and cash equivalents, together with expected royalties from third parties, will be sufficient to fund our operations into the second quarter of 2011, unless unforeseen events arise that negatively impact our liquidity.

Six Months 2010 compared to Six Months 2009 Financial Results

Total revenues decreased 3%, or $14,000 to $389,000 for the six months ended June 30, 2010, compared to $403,000 for the same period in 2009. This decrease is primarily due to a $126,000 reduction in royalty revenue from our relationship with Perrigo, offset by a $125,000 increase in licensing fee revenue from our collaborative agreements.

For the six months ended June 30, 2010, the Company's marketing and selling expenses decreased 32% or $47,000, to $99,000 compared to $146,000 for the comparable period in 2009. This decrease was primarily due to a decrease in personnel related expenses, advertising and tradeshow expenses, offset by an increase in sales brokerage related expenses associated with the planned distribution of our nutritional products. General and administrative expenses decreased 43%, or $908,000, to $1.2 million for the six months ended June 30, 2010, compared to $2.1 million for the same period in 2009, primarily due to lower personnel related costs, non-cash share based compensation expense, insurance premiums and legal expense.

Research and development expenses decreased 63%, or $1.0 million to $596,000 for the six months ended June 30, 2010, compared to $1.6 million for the same period in 2009, primarily due to reductions in personnel and other expenses reflecting the deferral of development activities for our product candidates.

The net loss for the six months ended June 30, 2010, decreased 56%, or $1.9 million to $1.5 million, compared with a net loss of $3.5 million for the same period in 2009. This decrease was primarily due to lower overall operating expenses.

About SCOLR Pharma:

Based in Bothell, Washington, SCOLR Pharma, Inc. is a specialty pharmaceutical company focused on applying its formulation expertise and patented CDT platforms to develop novel prescription pharmaceutical, over-the-counter (OTC), and nutritional products. Our CDT drug delivery platforms are based on multiple issued and pending patents and other intellectual property for the programmed release or enhanced performance of active pharmaceutical ingredients and nutritional products. For more information on SCOLR Pharma, please call 425-368-1050 or visit http://www.scolr.com.

This press release contains forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning the timing of anticipated shipments of our nutritional products, anticipated growth in sales of our nutritional products and the timing thereof, the expected contribution of resources added to support our nutritional business, our expectations concerning advancement of regulatory applications for our ibuprofen and pseudoephedrine product candidates, our expectations related to approval of our pseudoephedrine product, our ability to fund our operations into the second quarter of 2011 and the potential for partnership or licensing opportunities related to our product candidates. These forward-looking statements involve risks and uncertainties, including activities, events or developments that we expect, believe or anticipate will or may occur in the future. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including constraints on our liquidity related to the greater working capital requirements of our nutritional business, unanticipated changes in the timing or amount of orders for our nutritional products, our ability to generate revenues or obtain financing, problems with our regulatory applications, unanticipated costs and expenses associated with our product development, clinical activities and regulatory review, reductions in our royalty revenues, our ability to create and maintain partnerships or other relationships, our ability to successfully complete research and development, the continuation of arrangements with our product development partners and customers, competition, government regulation and approvals, and general economic conditions. For example, if we are not successful in generating sufficient revenue, raising additional capital or securing partnership arrangements, we may be required to further curtail or cease our operations. Additional assumptions, risks and uncertainties are described in detail in our registration statements, reports and other filings with the Securities and Exchange Commission, including the "Risk Factors" set forth in our Annual Report on Form 10-K, as supplemented by our quarterly reports on Form 10-Q. Such filings are available on our website or at www.sec.gov. You are cautioned that such statements are not guarantees of future performance and that actual result or developments may differ materially from those set forth in the forward-looking statements. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstance.





SCOLR Pharma, Inc. CONDENSED BALANCE SHEETS (In thousands, except share amounts)

SOURCE SCOLR Pharma, Inc.
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