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8-K - FORM 8-K - NEUROLOGIX INC/DE | c14557e8vk.htm |
Exhibit 99.1
Neurologix Announces Year End 2010 Results
Fort
Lee, New Jersey (March 25, 2011) Neurologix, Inc. (OTCBB: NRGX), a biotechnology company
engaged in the development of innovative gene therapies for disorders of the brain and central
nervous system, today announced its financial results for the year ended December 31, 2010.
For the year ended December 31, 2010, Neurologix reported a net loss of $10.2 million, as compared
with a net loss of $13.5 million for the year ended December 31, 2009. The Company reported a net
loss applicable to common stock for the year ended December 31, 2010 of $13.4 million, or $0.48 per
basic and diluted share, as compared with a net loss applicable to common stock for the year ended
December 31, 2009 of $16.4 million, or $0.59 per basic and diluted share.
Net loss for the year ended December 31, 2010 includes charges of $.46 million recognized for the
change in estimated fair value of the Companys derivative liabilities relating to certain warrants
issued in connection with promissory notes issued by the Company in December 2010 (the Notes), as
well as the Companys Series D Convertible Preferred Stock (the Series D Stock) and the Companys
Series C Convertible Preferred Stock (the Series C Stock).
Net loss applicable to common stock for the year ended December 31, 2010 includes charges of $3.3
million, or $0.12 per basic and diluted share, related to preferred stock dividends in connection
with the Series D Stock and the Series C Stock, as well as a beneficial conversion feature in
connection with the issuance of the Notes. The net loss applicable to common stock for the year
ended December 31, 2009 included charges of $3.0 million, or $0.11 per basic and diluted share,
related to preferred stock dividends in connection with the issuance of the Series D Stock and the
Series C Stock.
The Company had cash and cash equivalents of approximately $8.1 million as of December 31, 2010.
In commenting on the Companys performance, President and Chief Executive Officer Clark A. Johnson
said, Neurologix ended 2010 reaching a significant milestone with the announcement of positive
results of the Companys Phase 2 study of NLX-P101 in patients with Parkinsons disease, providing
important validation of our work in gene therapy, which has been ongoing for more than a decade. We
are off to a similarly strong start in 2011 with the March 17 publication of these results in The
Lancet Neurology. The Phase 2 results strongly support the establishment of a Phase 3 clinical
trial of NLX-P101 in subjects with Parkinsons disease. We recently discussed our Phase 2 results
with the FDA and plan to submit a Phase 3 protocol under a Special Protocol Assessment later this
year.
The Company also reached an important milestone in the development of a novel gene therapy approach
to the treatment of depression with the October, 2010 publication of a landmark paper demonstrating
the importance of the p11 gene in modulating depression in mice in the journal Science
Translational Medicine.
In fiscal 2010, Neurologix was able to secure additional financing from three of its largest
existing investors, or their affiliates: Corriente Advisors; GE Pension Trust; and Palisade Capital
Management, LLC. These investors provided a loan in the aggregate principal amount of $7 million.
Added Johnson, The increased support demonstrates their confidence in our leadership in gene-based
medicine for central nervous system and brain diseases.
About Neurologix
Neurologix, Inc. (OTCBB:NRGX) is a clinical-stage biotechnology company dedicated to the discovery,
development, and commercialization of life-altering gene transfer therapies for serious disorders
of the brain and central nervous system. Neurologixs therapeutic approach is built upon the
groundbreaking research of its scientific founders and advisors, whose accomplishments have formed
the foundation of gene therapy for neurological illnesses. The Companys current programs address
such conditions as Parkinsons disease, epilepsy, depression and Huntingtons disease, all of which
are large markets not adequately served by current therapeutic options. For more information,
please visit the Neurologix website at http://www.neurologix.net.
Cautionary Statement Regarding Forward-Looking Statements
This news release includes certain statements of the Company that may constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and which are made pursuant to the
Private Securities Litigation Reform Act of 1995. These forward-looking statements and other
information relating to the Company are based upon the beliefs of management and assumptions made
by and information currently available to the Company. Forward-looking statements include
statements concerning plans, objectives, goals, strategies, future events, or performance, as well
as underlying assumptions and statements that are other than statements of historical fact. When
used in this document, the words expects, promises, anticipates, estimates, plans,
intends, projects, predicts, believes, may or should, and similar expressions, are
intended to identify forward-looking statements. These statements reflect the current view of the
Companys management with respect to future events. Many factors could cause the actual results,
performance or achievements of the Company to be materially different from any future results,
performance or achievements that may be expressed or implied by such forward-looking statements,
including, but not limited to, the following:
| The Company is still in the development stage and has not generated any revenues. From inception through December 31, 2010, it incurred net losses and negative cash flows from operating activities of approximately $57.9 million and $44.4 million, respectively. Management believes that the Company will continue to incur net losses and cash flow deficiencies from operating activities for the foreseeable future. Because it may take years to develop, test and obtain regulatory approval for a gene-based therapy product before it can be sold, the Company likely will continue to incur significant losses for the foreseeable future. Accordingly, it may never be profitable and, if it does become profitable, it may be unable to sustain profitability. |
| At December 31, 2010, the Company had cash and cash equivalents of approximately $8.1 million. Based on its cash flow projections, the Company will need additional financing to carry out its planned business activities and plan of operations after October 31, 2011 and to repay the promissory notes issued in 2010 as of said date. At the Companys present level of activities, the Companys cash and cash equivalents are believed, at this time, to be sufficient to fund its operations only until October 31, 2011. Accordingly, there is substantial doubt as to the Companys ability to continue as a going concern. The Company is currently seeking to raise funds, through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements, sufficient to finance its ongoing operations. The Company does not know whether additional financing will be available when needed, or if available, will be on acceptable or favorable terms to it or its stockholders. | ||
| The Company will need to conduct future clinical trials for the treatment of Parkinsons disease using the Companys NLX technology. If the trials prove unsuccessful, future operations and the potential for profitability will be materially adversely affected and the business may not succeed. | ||
| There is no assurance as to when, or if, the Company will be able to successfully receive approval from the FDA on its Investigational New Drug Application to commence a Phase 1 clinical trial for the treatment of epilepsy. | ||
| There is no assurance as to when, or if, the Company will be able to successfully complete the required preclinical testing of its gene therapy for the treatment of depression or Huntingtons disease to enable it to file an Investigational New Drug Application with the FDA for permission to begin a Phase 1 clinical trial or that, if filed, such permission will be granted. |
Other factors and assumptions not identified above could also cause the actual results to
differ materially from those set forth in the forward-looking statements. Additional information
about factors that could cause results to differ materially from managements expectations is found
in the section entitled Risk Factors in the Companys 2010 Annual Report on Form 10-K. Although
the Company believes these assumptions are reasonable, no assurance can be given that they will
prove correct. Accordingly, you should not rely upon forward-looking statements as a prediction of
actual results. Further, the Company undertakes no obligation to update forward-looking statements
after the date they are made or to conform the statements to actual results or changes in the
Companys expectations.
Contact:
Neurologix
Marc Panoff, 201-592-6451
Chief Financial Officer
marcpanoff@neurologix.net
Marc Panoff, 201-592-6451
Chief Financial Officer
marcpanoff@neurologix.net
DJE Science
Jennifer Mallory, 312-240-2996
Jennifer.Mallory@djescience.com
Jennifer Mallory, 312-240-2996
Jennifer.Mallory@djescience.com
NEUROLOGIX, INC.
(A Development Stage Company)
BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
(A Development Stage Company)
BALANCE SHEETS
(Amounts in thousands, except share and per share amounts)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 8,055 | $ | 9,637 | ||||
Prepaid expenses and other current assets |
481 | 395 | ||||||
Total current assets |
8,536 | 10,032 | ||||||
Equipment, less accumulated depreciation of $682 and $624 at
December 31, 2010 and 2009, respectively |
71 | 129 | ||||||
Intangible assets, less accumulated amortization of $364 and $262 at
December 31, 2010 and 2009, respectively |
1,065 | 891 | ||||||
Other assets |
5 | 5 | ||||||
Total Assets |
$ | 9,677 | $ | 11,057 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued expenses |
$ | 2,302 | $ | 1,834 | ||||
Notes payable, net of discount |
4,695 | | ||||||
Derivative financial instruments, at estimated fair value warrants |
6,840 | 3,847 | ||||||
Total liabilities |
13,837 | 5,681 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity (deficit): |
||||||||
Preferred Stock; 5,000,000 shares authorized |
||||||||
Series A Convertible, $0.10 par value; 650 shares
designated, 645 shares issued and outstanding at December 31,
2010 and 2009, with an aggregate liquidation preference of $1 |
| | ||||||
Series C Convertible, $0.10 par value; 700,000 shares
designated, 278,849 and 281,263 shares issued and outstanding
at December 31, 2010 and 2009, respectively, with an aggregate
liquidation preference of $8,369 and $7,008 at December 31,
2010 and 2009, respectively |
28 | 28 | ||||||
Series D Convertible, $0.10 par value; 792,100 shares
designated, 734,898 shares issued and outstanding at December
31, 2010 and 2009, with an aggregate liquidation preference of
$32,547 and $29,420, at December 31, 2010 and 2009,
respectively |
73 | 73 | ||||||
Common Stock: |
||||||||
$0.001 par value; 100,000,000 shares authorized, 27,918,148
and 27,865,010 shares issued and outstanding at December 31,
2010 and 2009, respectively |
28 | 28 | ||||||
Additional paid-in capital |
57,474 | 56,775 | ||||||
Deficit accumulated during the development stage |
(61,763 | ) | (51,528 | ) | ||||
Total stockholders equity (deficit) |
(4,160 | ) | 5,376 | |||||
Total Liabilities and Stockholders Equity (Deficit) |
$ | 9,677 | $ | 11,057 | ||||
NEUROLOGIX, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts)
For the period | ||||||||||||
February 12, 1999 | ||||||||||||
Year Ended December 31, | (inception) through | |||||||||||
2010 | 2009 | December 31, 2010 | ||||||||||
Revenues |
$ | | $ | | $ | | ||||||
Operating expenses: |
||||||||||||
Research and development |
6,035 | 7,844 | 33,496 | |||||||||
General and administrative expenses |
3,217 | 2,897 | 22,214 | |||||||||
Loss from operations |
(9,252 | ) | (10,741 | ) | (55,710 | ) | ||||||
Other (expense) income: |
||||||||||||
Dividend, interest and other
(expense) income, net |
2 | 57 | 1,885 | |||||||||
Interest expense-related parties |
(455 | ) | | (866 | ) | |||||||
Change in estimated fair value of
derivative financial instruments -
warrants |
(458 | ) | (2,777 | ) | (3,235 | ) | ||||||
Other (expense) income, net |
(911 | ) | (2,720 | ) | (2,216 | ) | ||||||
Net loss |
(10,163 | ) | (13,461 | ) | $ | (57,926 | ) | |||||
Preferred stock dividends |
(3,202 | ) | (2,974 | ) | ||||||||
Charge for contingent beneficial
conversion feature |
(72 | ) | | |||||||||
Net loss applicable to common stock |
$ | (13,437 | ) | $ | (16,435 | ) | ||||||
Net loss applicable to common stock
per share, basic and diluted |
$ | (0.48 | ) | $ | (0.59 | ) | ||||||
Weighted average common shares
outstanding, basic and diluted |
27,867,485 | 27,830,714 | ||||||||||
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