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POZEN Reports Fourth Quarter and Full-Year 2002 Results

CHAPEL HILL, N.C.--(BUSINESS WIRE)--Jan. 30, 2003--POZEN Inc. (NASDAQ:POZN), a pharmaceutical development company with a portfolio of product candidates for the treatment of migraine, today announced results for the fourth quarter and year ended December 31, 2002.

Fourth-Quarter Results

POZEN is a development-stage company that did not record revenues for the fourth quarter of 2002 or 2001.

For the fourth quarter of 2002, the company reported operating expenses, excluding the non-cash amortization of deferred compensation, of $5.2 million compared to $7.6 million in the fourth quarter of 2001. The non-cash amortization of deferred compensation in connection with employee stock option grants was $710,000 and $771,000 for the 2002 and 2001 three-month periods, respectively. The 2002 fourth quarter decrease in operating expenses was due primarily to the decreased level of MT 100 and MT 300 development activities, partially offset by the 2002 fourth quarter U.S. Food and Drug Administration (FDA) user fee for filing the New Drug Application for MT 300.

POZEN's net loss attributable to common stockholders was $5.7 million, or $0.20 per common share, for the quarter ended December 31, 2002 compared to $8.0 million, or $0.28 per common share, for the 2001 quarter. At December 31, 2002, the company had approximately $50 million in cash and cash equivalents.

Full-Year Results

POZEN did not record revenues for the twelve months ended December 31, 2002 or during 2001.

Operating expenses for 2002 were $22.6 million compared with $21.9 million in 2001, excluding the non-cash amortization of deferred compensation. The non-cash amortization of deferred compensation in connection with employee stock option grants was $2.9 million and $3.1 million for 2002 and 2001, respectively. The increase in operating expenses was due primarily to increased general and administrative costs along with increased costs associated with the development of MT 300 and MT 400, offset by a decrease in development costs for MT 100 and the termination of all development activities for MT 500.

POZEN's net loss attributable to common stockholders was $24.6 million, or $0.87 per common share for 2002, as compared with $21.7 million or $0.78 per common share for 2001.

Business Highlights

POZEN announced in December 2002 the submission of a New Drug Application to the U.S. FDA for marketing approval of MT 300, the company's injectable product candidate for the treatment of severe migraine. More recently, POZEN received a new patent for MT 300 from the United States Patent and Trademark Office. The patent provides protection through claims relating to therapeutic packages containing a high potency formulation of dihydroergotamine (DHE) in a pre-filled syringe.

In October 2002, POZEN announced the submission of a Marketing Authorization Application in the United Kingdom for MT 100, the company's oral, first-line treatment for migraine. Once approved in the U.K., POZEN will seek approval in other European markets based on the U.K. marketing authorization.

"We had an extremely productive 2002 culminating with submissions for regulatory approval for MT 100 in the U.K. and MT 300 in the U.S. We look forward to continued progress of our product candidates in 2003 as we plan to submit a New Drug Application for MT 100 in the U.S and commence pre-marketing activities for MT 100 and MT 300," said John R. Plachetka, Pharm.D., chairman, president and chief executive officer of POZEN.

Financial Guidance

POZEN expects operating expenses for the first quarter for 2003 to be in the range of $4.5 million to $5.5 million, excluding non-cash deferred compensation. For the year, POZEN expects operating expenses to be in the range of $19 million to $21 million, excluding non-cash deferred compensation.

Fourth-Quarter and Full-Year 2002 Results Conference Call

POZEN will hold a conference call to discuss fourth-quarter and full-year 2002 results, and management's outlook at 11:00 a.m. Eastern time on Thursday, January 30, 2002. The call can be accessed live and will be available for replay over the Internet via


POZEN is a pharmaceutical development company committed to building a portfolio of products with significant commercial potential in select therapeutic areas. POZEN's initial focus is on developing products for migraine therapy, a global market expected to exceed $3 billion this year. The company's common stock is traded on The Nasdaq Stock Market under the symbol "POZN."

Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our products; costs and delays in the development and FDA approval of our products; our inability to enter into or maintain, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of our products; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of our products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events, including those discussed herein and in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002 under "Management's Discussion and Analysis of Financial Condition and Results of Operations." We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.

POZEN is on the Internet at

                              Pozen Inc.
                        Statement of Operations

                       Three Months Ended       Twelve Months Ended
                          December 31,             December 31,
                     ----------------------- -------------------------
                        2002        2001         2002         2001
                     ----------------------- -------------------------
Operating expenses:
 General and
  administrative    $ 1,937,873 $ 1,900,678 $  6,833,336 $  6,455,164
 Research and
  development         3,934,553   6,516,396   18,761,630   18,627,249
                     ----------- ----------- ------------ ------------
Total operating
 expenses             5,872,426   8,417,074   25,594,966   25,082,413
Interest income, net    196,466     462,930    1,040,056    3,379,905
                     ----------- ----------- ------------ ------------
Net loss
 attributable to
 stockholders       $(5,675,960)$(7,954,144)$(24,554,910)$(21,702,508)
                     =========== =========== ============ ============

Basic and diluted
 net loss per 
 common share       $     (0.20)$     (0.28)$      (0.87)$      (0.78)
                     =========== =========== ============ ============

Shares used in
 computing basic and
 diluted net loss
 per common share    28,131,485  27,969,327   28,110,352   27,954,697
                     =========== =========== ============ ============

                              Pozen Inc.
                             Balance Sheet

                                                Dec. 31,     Dec. 31,
                                                  2002          2001
                                               ----------- -----------
Current assets:
 Cash and cash equivalents                    $50,056,251 $73,958,724
 Prepaid expenses and other current assets        553,371      76,186
                                               ----------- -----------
  Total current assets                         50,609,622  74,034,910
Equipment, net of accumulated depreciation        425,369     109,014
                                               ----------- -----------
    Total assets                              $51,034,991 $74,143,924
                                               =========== ===========

Current liabilities:
 Accounts payable                             $   179,374 $   194,138
 Accrued expenses                               1,657,074   3,328,881
                                               ----------- -----------
  Total current liabilities                     1,836,448   3,523,019
Total stockholders' equity                     49,198,543  70,620,905
                                               ----------- -----------
  Total liabilities and stockholders' equity  $51,034,991 $74,143,924
                                               =========== ===========

Matt Czajkowski
Chief Financial Officer
Lisa Barthelemy
Director, Investor Relations

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