Spherix Reports Increase in Revenues in 2009
During 2009, the Company experienced a 32% growth in revenue over that of the prior year. This increase reflects the steady growth of the Company’s Health Sciences consulting business since its launch in July 2007.
6 Apr 2010 --- Spherix Incorporated, an innovator in biotechnology for diabetes therapy, and a provider of technical and regulatory consulting services to food, supplement, biotechnology and pharmaceutical companies, reported results for the year ended December 31, 2009.
Recent and Upcoming Highlights
• D-Tagatose as a Treatment for Type 2 Diabetes
- Announced positive blinded interim Phase 3 clinical trial data that suggest a statistically significant reduction in variability of HbA1c levels, the primary endpoint of the trial; full Phase 3 data are expected in 2010
- Reported preliminary blinded interim Phase 2 (Dose Range) clinical trial data suggesting a dose-proportional reduction of HbA1c levels using various doses of D-tagatose lower than the dose used in the current Phase 3 trial
- Conducted the Company’s first Medical Advisory Board to provide clinical guidance for the development program for D-tagatose as a treatment for Type 2 diabetes
- Received its first full-scale production batch of cGMP (FDA Current Good Manufacturing Practice) D-tagatose, USP (U.S. Pharmacopeia) grade from Inalco S.p.A., of Italy
• Health Science Consulting
o Recent trade and professional shows:
-30th Annual Meeting of the American College of Toxicology, November 2009, Palm Springs, CA
-13th Annual Supply Side West “Probiotics: Market Opportunities and Consumer Trends”, November 2009, Las Vegas, NV
-2010 Annual Meeting, American Association for the Advancement of Science, February 2010, San Diego, CA
-49th Annual Meeting, Society of Toxicology, March 2010, Salt Lake City, UT
-Institute of Food Technologists, Wellness 10 Conferences, March 2010, Chicago, IL
• Corporate
- $6.3 million capital raise completed in November
- Career pharmaceutical executive Thomas B. Peter appointed to the Company’s Board of Directors, and Dr. Robert J. Vander Zanden elected Chairman of the Board
- Contracted Leisa Dennehy to spearhead Commercial and Corporate Development including marketing and business development for D-tagatose and to oversee investor and public relations for Spherix
- Appointed Ram R. Nimmagudda, Ph.D., Director of New Business Development
- Signed a long-term, full-scale, manufacturing supply agreement with Inalco S.p.A. of Milan, Italy to provide commercial scale quantities of D-tagatose
- Terminated agreement with Arla Foods Ingredients Amba; Regained rights to all non-pharmaceutical uses of D-tagatose in U.S.
o Upcoming trade shows/investor conferences in 2Q 2010:
-BIO Annual Meeting, Chicago, IL, May 3-6, 2010
-ENDO Society Annual Meeting, June 19-22, San Diego
-American Diabetes Association Annual Meeting, Orlando, FL, June 25-29, 2010
Financial Results for the Year Ended December 31, 2009
During 2009, the Company experienced a 32% growth in revenue over that of the prior year. This increase reflects the steady growth of the Company’s Health Sciences consulting business since its launch in July 2007. The Health Sciences business provides technical and regulatory consulting services to biotechnology and pharmaceutical companies, as well as critical technical support for the Company’s own R&D activities.
The Company’s ongoing research and development activities are focused on the development of D-tagatose, a potential new treatment for Type 2 diabetes. D-Tagatose is believed to depress elevations of blood sugar levels in diabetic patients by increasing glycogen synthesis while decreasing glycogen utilization, resulting in an improvement of blood sugar control and modulation of HbA1c. Two clinical trials are being conducted by the Company, both on the use of D-tagatose as a treatment for Type 2 diabetes under a Food and Drug Administration (“FDA”) Investigational New Drug application: a Phase 3 trial to determine safety and efficacy; and a Phase 2 Dose Range trial to evaluate the effectiveness of D-tagatose at lower doses. The Dose Range trial and the efficacy portion of the Phase 3 trial are expected to be completed in mid- to late-2010, and the safety portion of the Phase 3 trial is expected to be completed in early 2011. The $2.8 million increase in research and development costs between years reflect a $1.4 million expense for the purchase of D-tagatose and the overall expansion of the Phase 3 trial in 2009.
Following encouraging results from blinded interim analysis of both the Dose Range and the Phase 3 trials, the Company also began expansion of its market development activities in late 2009. These activities included the formation of an Advisory Board in October 2009, and the addition of Ram Nimmagudda and Leisa Dennehy in late 2009 to spearhead commercial development of D-tagatose. The Company intends to continue expansion of its market development activities and simultaneously search for a sale, license, partner, or other strategic alliance to fully take D-tagatose through the FDA approval process and to bring D-tagatose to market.
The net loss for the year ended 2009 was $9.1 million, or $0.62 per share, compared with a net loss of $4.1 million, or $0.29 per share, in 2008. As of December 31, 2009, the Company’s total cash, cash equivalents and short-term investments on hand was $9.4 million, compared to $11.3 million at December 31, 2008. Working capital as of December 31, 2009, was $7.7 million, a decrease of $10.8 million from working capital at December 31, 2008.
“In 2009, Spherix experienced a number of watershed moments,” commented Dr. Claire Kruger, Chief Executive Officer of Spherix Incorporated. “We are confident that the passing of these milestones and our completion of future objectives will bring the Company ever closer to gaining marketing approval from the FDA and commercializing D-tagatose as a novel treatment option for patients with Type 2 diabetes. As we await the un-blinding of our pivotal Phase 3 data later this year, we will continue to be diligent in our work to elevate Spherix’s visibility within the scientific, investment and pharmaceutical executive communities while remaining focused on our commitment to executing our business plan and growing shareholder value.”
