Emisphere Technologies, Inc.
Nov 16, 2015

Emisphere Reports Third Quarter 2015 Financial Results

Management to Host Conference Call Today at 8:30 AM ET

ROSELAND, N.J., Nov. 16, 2015 (GLOBE NEWSWIRE) -- Emisphere Technologies, Inc. (OTCBB:EMIS) today reported financial results for the third quarter ended September 30, 2015, and provided a corporate update.

"During the third quarter, we made great strides in commercializing the Eligen® technology.  There were two important developments with our partner, Novo Nordisk A/S (NYSE:NVO).  Novo Nordisk announced it will initiate a global phase 3a development program with oral semaglutide, a once daily Type 2 diabetes treatment utilizing SNAC, one of our Eligen technology carriers," said Alan L. Rubino, President and Chief Executive Officer of Emisphere. "We also entered into an agreement with Novo Nordisk to develop and commercialize oral formulations of certain of Novo Nordisk's investigational molecules targeting major metabolic disorders, including diabetes and obesity, using our Eligen technology.  Novo Nordisk has been an important partner for many years and their continuing development of once daily oral semaglutide and the expanded partnership further validate the Eligen technology's ability to facilitate absorption from the gastrointestinal tract."

Mr. Rubino continued:  "We continue to see steady growth of Eligen B12™ sales in the U.S. and we remain focused on advancing our global business development efforts. Our goal is to continue building new, high-value partnerships for both Eligen B12 and our Eligen technology platform.  We look forward to updating you on our progress."

YEAR TO DATE HIGHLIGHTS


THIRD QUARTER 2015 FINANCIAL RESULTS

Revenue for the third quarter ended September 30, 2015, was $130,000 compared to no revenue for the third quarter ended September 30, 2014. The increase in revenue was due to sales revenues from Eligen B12, which was launched in March 2015.

Total operating expense for the third quarter of 2015 was $4.7 million compared to $2.1 million for the same period in 2014, an increase of $2.6 million or 124 percent.  Total operating expenses include research and development (R&D) and sales, general and administrative (SG&A) costs. For the third quarter of 2015, R&D expenses were $94,000 compared to $229,000 for the same period in 2014. For the third quarter of 2015, SG&A expenses were $4.6 million compared to $1.9 million for the same period in 2014. The increase in total operating expenses is due primarily to increased sales, and marketing and other commercial costs in connection with the introduction of the oral Eligen B12 product in the U.S. during 2015.

For the third quarter ended September 30, 2015, Emisphere reported a net loss of $4.4 million, or $0.07 per basic and diluted share, compared to net loss of $14.4 million, or $0.24 per basic and diluted share, for the same period last year.

YEAR TO DATE FINANCIAL RESULTS

Revenue for the nine months ended September 30, 2015, was $225,000 compared to no revenue for the nine months ended September 30, 2014. The increase in revenue was due to sales revenues from Eligen B12.

Total operating expense for the nine months ended September 30, 2015 was $14.0 million compared to $6.0 million for the same period in 2014, an increase of $8.0 million or 133 percent.  Total operating expenses include research and development and sales, general and administrative costs. For the nine months ended September 30, 2015, R&D expenses were $382,000 compared to $880,000 for the same period in 2014. SG&A expenses were $13.6 million compared to $5.1 million for the same period in 2014. The increase in total operating expenses is due primarily to increased sales, and marketing and other commercial costs in connection with the introduction of the oral Eligen B12 product in the U.S. during 2015.

For the nine months ended September 30, 2015, Emisphere reported a net loss of $30.3 million, or $0.50 per basic and diluted share, compared to net loss of $25.8 million, or $0.43 per basic and diluted share, for the same period last year.

Weighted average basic and diluted shares outstanding for the periods ended September 30, 2015 and September 30, 2014 were 60,687,478.

LIQUIDITY

As of September 30, 2015, Emisphere had approximately $1.4 million in cash, a net decrease of $2.3 million from December 31, 2014; approximately $8.5 million working capital deficiency; a stockholders' deficit of approximately $142.0 million; and an accumulated deficit of approximately $544.4 million. On July 1, 2015, Emisphere borrowed $2.0 million in original principal amount on its $20.0 million secured credit facility. On October 26, 2015, we received a total payment of $14 million from Novo Nordisk pursuant to, and consisting of, $5 million as payment for entry into a license agreement and $9 million as payment in connection with the third amendment to the existing GLP-1 License Agreement with Novo Nordisk.

Management believes that with the funding made available from an existing loan agreement, the new license agreement, and the GLP-1 Amendment, the Company will have sufficient capital to continue to execute its Eligen B12 commercialization plans and to continue operations through approximately July 2016. The Company's future capital requirements beyond July 2016 and financial success depend largely on the commercial success of the Eligen B12 prescription product and the Company's ability to continue to leverage existing partnerships and secure new partnering opportunities.

CONFERENCE CALL AND WEBCAST INFORMATION

The live webcast of the conference call can be accessed through the Company's web site at www.emisphere.com. The call can also be accessed by dialing (877) 303-9483 (United States and Canada) or (760) 666-3584 (international), and entering Conference ID# 78510550. In addition, an archive of the webcast can be accessed through the same link and an audio replay of the call will be available beginning at 11:30 am ET on Monday, November 16, 2015, through 11:59 pm ET on December 6, 2015, by calling (855) 859-2056 (United States and Canada) or (404) 537-3406 (International), and entering Conference ID# 78510550.

ABOUT ELIGEN B12™

Eligen B12 is indicated for the dietary management of patients who have a medically-diagnosed vitamin B12 deficiency that is associated with a disease or condition that cannot be managed by a modification of the normal diet alone. Eligen B12 is designed so that patients only need to take a single oral tablet (cyanocobalamin 1000 mcg/salcaprozate sodium [SNAC] 100 mg) of B12 daily.

Eligen B12 is the first and only prescription medical food that has been shown to normalize vitamin B12 to levels that are comparable to an intramuscular (IM) injection of B12. In a study that compared the impact of Eligen B12 and IM B12 on plasma B12 levels in 50 patients with demonstrated B12 deficiency (serum B12 < 350 pg/mL), both products normalized B12 levels by Day 15 (first observation) and maintained normal levels over the duration of the study (three months). In a study that compared bioavailability in 20 healthy subjects of Eligen B12 with that of a standard oral B12 supplement, the bioavailability of Eligen B12 was 5.09 percent compared with 2.16 percent, which is more than double the bioavailability of the conventional over-the-counter oral B12 supplement formulation at the same dose.

Eligen B12 was developed as a medical food as defined in section 5(b) of the Orphan Drug Act (21 U.S.C. 360ee (b) (3) as a food which is formulated to be consumed or administered enterally under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation.

For more information, visit www.eligenb12.com.

ELIGEN B12™ IMPORTANT SAFETY INFORMATION

Those with an allergy to B12, cobalt or any ingredients of Eligen B12 should not take this product. Eligen B12 should not be taken by people who have Leber's disease, which physicians may refer to as hereditary optic nerve atrophy. Cyanocobalamin (B12) can lead to optic nerve damage (and possibly blindness) in people with Leber's disease. Note that Eligen B12 has not been studied in patients below 18 years of age.

ABOUT EMISPHERE'S ELIGEN® TECHNOLOGY

Emisphere's proprietary Eligen® technology facilitates the absorption of difficult-to-deliver small and large molecules that typically are only available as injectables, without altering their chemical form, biological integrity or pharmacological properties, making it possible to avoid injections for drug administration. Eligen technology offers improved safety, broad applicability, stand-alone delivery, versatility of formulation and ease of manufacture.
   
ABOUT EMISPHERE

Emisphere is a commercial-stage pharmaceutical and drug delivery company that has recently commenced commercial operations. The Company launched its first prescription product, oral Eligen B12™, in the U.S. in March 2015 and is in partnership with global pharmaceutical companies to develop new formulations of existing products, as well as new chemical entities, using its Eligen® technology. Beyond Eligen B12, the Company utilizes its proprietary Eligen® technology to create new oral formulations of therapeutic agents. Emisphere's product pipeline includes prescription drug and medical food product candidates that are being developed in partnership or internally. For more information, please visit www.emisphere.com.

SAFE HARBOR STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The statements in this release or oral statements made by representatives of Emisphere relating to matters that are not historical facts are forward-looking statements that involve risks and uncertainties, including, but not limited to, the success of the Company's commercialization initiatives, the sufficiency of the Company's cash position, the Company's ability to enter into strategic partnerships, the Company's ability to capture market share for oral Eligen B12™ or any potential products, the Company's ability and/or that of its partners to develop, manufacture and commercialize products using Emisphere's drug delivery technology, and other risks and uncertainties detailed in Emisphere's filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" identified in the documents Emisphere has filed, or will file, with the Securities and Exchange Commission ("SEC"). Copies of Emisphere's filings with the SEC may be obtained from the SEC Internet site at http://www.sec.gov. Emisphere expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Emisphere's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based.


EMISPHERE TECHNOLOGIES, INC.
CONDENSED STATEMENT OF OPERATIONS
For the three and nine months ended September 30, 2015 and 2014
(in thousands, except share and per share data)
(unaudited)
      
   For the three months ended
     For the nine months ended
 
  September 30,
  September 30,
 
  2015    2014    2015    2014  
          
Revenue, net of discounts and allowances$130  $   $225  $  
                     
Cost of Revenue 58       138     
                     
Gross Profit 72       87     
                     
Costs and expenses:                     
Research and development 94   229    382   880  
Selling, General and administrative expenses 4,643   1,887    13,595   5,113  
Depreciation and amortization 3   4    10   11  
Total costs and expenses 4,740   2,120    13,987   6,004  
Operating loss (4,668)   (2,120)   (13,900)  (6,004) 
                     
Other non-operating income (expense):                     
Other income (expense) 1   (3)   8   8  
Change in fair value of derivative instruments                     
Related party 2,334   (10,585)   (9,783)  (16,730) 
Other 232   148    (188)  (35) 
Interest expense related party (2,321)  (1,813)   (6,391)  (4,722) 
Total other non-operating income (expense) 246   (12,253)   (16,354)  (21,479) 
Net loss before tax incentive (4,422)  (14,373)   (30,254)  (27,483) 
Income tax incentive              1,684  
Net loss$(4,422) $(14,373)  $(30,254)  $(25,799) 
Net loss per share, basic and diluted$(0.07)  $(0.24)  $(0.50) $(0.43) 
Weighted average shares outstanding, basic and diluted 60,687,478   60,687,478     60,687,478   60,687,478  


   
EMISPHERE TECHNOLOGIES INC.
 CONDENSED BALANCE SHEETS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
(in thousands, except share and per share data)
   
  September 30,    
  2015  December 31, 
  (unaudited)  2014  
ASSETS  
Current assets:  
Cash and cash equivalents$  1,404 $  3,683 
Accounts Receivable 305 — 
Inventory  2,054  2,068 
Prepaid expenses and other current assets 722  188 
   
Total Current Assets 4,485  5,939 
Equipment and leasehold improvements, net 15   25 
Security deposits 24  24 
   
Total assets$  4,524 $  5,988 
   
LIABILITIES AND STOCKHOLDERS DEFICIT  
Current liabilities:  
   
Accounts payable and accrued expenses$  1,672 $  1,846 
Deferred Revenue 382   
Derivative instruments  
Related party 10,520  5,548 
Others  427  239 
    
Total current liabilities 13,001  7,633 
   
Notes payable, related party, net of related discount 58,669  44,546 
Accrued interest, related party  2,201   
Derivative instruments  
Related party 30,889  24,133 
Deferred revenue, non-current 41,616  41,616 
Royalty payable 121   
Deferred lease liability, non-current and other liabilities 12  10 
   
Total liabilities 146,509  117,938 
   
COMMITMENTS AND CONTINGENCIES  
Stockholders' deficit:  
Preferred stock, $.01 par value; 4,000,000 shares authorized; none issued and outstanding  
Common stock, $.01 par value; 400,000,000 shares authorized; issued 60,977,210 shares (60,687,478 outstanding) as of September 30, 2015 and December 31, 2014 610  610 
Additional paid-in-capital 405,750  405,531 
Accumulated deficit (544,393) (514,139)
Common stock held in treasury, at cost; 289,732 shares (3,952) (3,952)
   
Total stockholders' deficit (141,985) (111,950)
   
Total liabilities and stockholders' deficit$  4,524 $  5,988 


 

COMPANY CONTACTS:



Alan L. Rubino, CEO

973.532.8000

arubino@emisphere.com



Michael R. Garone, CFO

973.532.8005

mgarone@emisphere.com



INVESTOR CONTACTS:



Susan Kim

Argot Partners

(212) 600-1902

susan@argotpartners.com

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Source: Emisphere Technologies, Inc.

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