UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D. C. 20549
____________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act Of 1934
February
28, 2005
Date of
Report (Date of earliest event reported)
___________________________________________________________
ACURA
PHARMACEUTICALS, INC.
(Exact
Name of Registrant as Specified in Charter)
___________________________________________________________
State
of New York |
1-10113 |
11-0853640 |
(State
of Other Jurisdiction |
(Commission
File Number) |
(I.R.S.
Employer |
of
Incorporation) |
Identification
Number) |
616
N. North Court, Suite 120
Palatine,
Illinois 60067
(Address
of principal executive offices) (Zip Code)
(847)
705-7709
(Registrant’s
telephone number, including are code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17CFR240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR
240.13e- 4(c))
Item
2.02 Results
of Operations and Financial Condition
On
February 28, 2005, Acura Pharmaceuticals, Inc. (the "Company") issued a press
release disclosing the financial results for its fourth quarter ended December
31, 2004 and the twelve months ended December 31, 2004. A copy of the Company's
press release is attached as Exhibit 99.1 hereto.
Item
9.01 Financial
Statements and Exhibits.
|
Exhibit |
||
|
Number |
Description | |
| 99.1 |
Press
Release dated February 28, 2005 Announcing Results for Fourth Quarter and
Year ended December 31, 2004. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
| ACURA PHARMACEUTICALS, INC. | ||
| |
|
|
| By: | /s/ Peter A. Clemens | |
|
Peter A. Clemens | ||
| Vice President & Chief Financial Officer | ||
Date: February
28, 2005
EXHIBIT
INDEX
|
Exhibit |
||
|
Number |
Description | |
| 99.1 |
Press
Release dated February 28, 2005 Announcing Results for Fourth Quarter and
Year ended December 31, 2004. |
EXHIBIT
99.1
CONTACT:
Acura
Pharmaceuticals, Inc.
Peter A.
Clemens, SVP Investor Relations & CFO 847-705-7709
FOR
IMMEDIATE RELEASE
ACURA
PHARMACEUTICALS, INC. REPORTS FINANCIAL RESULTS,
DEVELOPMENT PROGRESS and STRATEGY UPDATE
DEVELOPMENT PROGRESS and STRATEGY UPDATE
Palatine,
IL, February 28, 2005: Acura
Pharmaceuticals, Inc. (OTC.BB-ACUR) today announced a net loss of $2.1 million
or $0.09 per share for the three months ending December 31, 2004 compared to a
net loss of $15.3 million or $0.71 per share for the same period in 2003. For
calendar year 2004 the Company had a net loss of $70.0 million or $3.20 per
share compared to a net loss of $48.5 million or $2.28 per share in 2003.
Included in results for calendar year 2004 is a non-cash charge of $72.5 million
for amortization of debt discount and private debt offering costs compared to a
non-cash charge of $24.8 million in 2003. Also included in results for calendar
year 2004 are gains of $12.4 million from debt restructuring and $2.4 million
from the divestment of certain non-strategic assets.
Commenting,
Andy Reddick, President and CEO said, “In 2004 the Company completed the
previously disclosed financial restructuring by converting approximately $104.6
million of debentures into approximately 218.0 million shares of preferred
stock. Completing the financial restructuring eliminates approximately $5.3
million annually in cash interest expense and leaves the Company with only $5.0
million in debt in the form of an interest bearing note due June 30,
2007.”
“In
comparing results of operations for the twelve and three month periods ended
December 31, 2004 with those for 2003 it is important to understand that in 2004
the Company focused on proprietary pharmaceutical research and development
activities relating to its Aversion™ Technology and, unlike the same periods in
2003, is no longer involved in generic drug manufacturing, sales and
distribution except as part of an orderly phase out of these activities in the
first quarter of 2004.”
Aversion™
Technology: Progress with Product Development
The
Company’s primary business focus is the research and development of proprietary
abuse deterrent formulation technologies (the “Aversion™ Technology”) intended
to deter the abuse of orally administered opioid analgesic products. To date,
the Company has formulated and evaluated two distinct product candidates
incorporating the Aversion™ Technology (“Product Candidate #1” and “Product
Candidate #2”). Both product candidates are tablet formulations intended for
oral administration and contain, among other ingredients, widely prescribed
opioid active pharmaceutical ingredients.
In 2004
the Company performed pre-clinical and clinical research and development on its
product candidates through a combination of internal activities and external
collaborations with contract research organizations ("CROs"). The results of
these efforts include the completion of two laboratory studies by CROs
demonstrating the advantages of the Aversion™ Technology in deterring potential
abuse via intravenous injection when compared to selected, currently marketed,
widely prescribed opioid products. Also in 2004, the Company, in concert with a
CRO with expertise in regulatory and clinical trial design, evaluated Product
Candidate #1 in two clinical studies to assess bioavailability and
bioequivalence (“BA/BE”) in comparison to frequently prescribed, commercially
marketed drug products with the same opioid active ingredient but without abuse
deterrent properties. The results of the first BA/BE study indicated that
Product Candidate #1 was sufficiently bioavailable but not bioequivalent to the
reference commercially marketed opioid product. The Company subsequently
developed a revised product formulation (“Product Candidate #1R”). The second
BA/BE study confirmed that Product Candidate #1R is both bioavailable and
bioequivalent to the commercially marketed product which does not possess abuse
deterrent properties.
During
the second half of 2004, the Company and the Food and Drug Administration
(“FDA”) held two scheduled telephonic meetings relating to the Company’s
Aversion™ Technology. Subsequent to the first meeting the Company received
acceptance by the FDA of an Investigational New Drug Application (“IND”) for
Product Candidate #1 and clearance to initiate a clinical trial program. The
clinical development program was designed to optimize the formulation of Product
Candidate #1 to effectively deter opioid abuse while minimizing the potential
for any new adverse events compared to non-Aversion™ formulated commercially
marketed products. After conducting and evaluating a Phase 1 clinical trial for
Product Candidate #1 and; (i) following a second teleconference with the FDA,
(ii) analysis of proprietary Company-initiated primary market research with
physicians and (iii) an assessment of the Company’s new patent applications and
intellectual property relating to the Aversion™ Technology, a strategic decision
was made by the Company to shift its development efforts to Product Candidate
#2. This decision was based primarily on the Company’s belief that the
development expense and timeline for Product Candidate #2 will be reduced and
the commercial opportunity for success increased with Product Candidate #2 as
compared with Product Candidate #1.
For
Product Candidate #2, the Company is currently engaged in pre-clinical studies
and manufacturing and release testing of clinical trial supplies and
contemplates submitting an IND or an IND amendment with the FDA in the first
quarter of 2005. Since the formulation of Product Candidate #2, the Company has
temporarily suspended development activities for Product Candidate #1 and
Product Candidate #1R and intends to focus future development activities
primarily on Product Candidate #2. There can be no assurance, however, that any
of the Company’s product candidates incorporating the Aversion™ Technology will
result in a commercially acceptable drug product.
To
receive U.S. marketing authorization for commercial distribution , all drug
products formulated with the Aversion™ Technology will require the development,
compilation, submission and filing of a new drug application (“NDA”) and
approval of such application by the FDA. In the event that Product Candidate #2
is stable and demonstrates acceptable bioequivalence, then additional clinical
and non-clinical testing will be required prior to the submission of an NDA.
There can be no assurances that Product Candidate #2 will lead to an NDA
submission or that if an NDA is filed, that the FDA will approve such regulatory
application for commercial distribution of such product candidate.
Commenting,
Andy Reddick, said, “We envision that orally administered opioid containing
products incorporating the Aversion™ Technology will discourage or deter a
pre-existing opioid drug abuser, or a legitimate patient properly using opioid
containing analgesics. from abusing an orally administered opioid containing
tablet or capsule. The Company is moving its clinical development program
forward to hopefully demonstrate that the Aversion™ Technology is an effective
abuse deterrent for commonly prescribed opioid active ingredients.”
Commercial
Strategy and Cash Reserves Update
The
Company plans to enter into development and commercialization agreements with
strategically focused pharmaceutical company partners (the "Partners") providing
that such Partners license the Company's Aversion™ Technology and further
develop, register and commercialize multiple formulations and strengths of
orally administered opioid containing finished dosage products utilizing the
Aversion™ Technology. The Company believes that it will derive revenues through
licensing fees, milestone payments, profit sharing and/or royalties on net sales
of such products and from the contract manufacture and supply of clinical trial
and commercial supplies of finished dosage products for distribution and sale by
such Partners. To date the Company does not have any such collaborative
agreements. The Company can make no assurance that it will be able to negotiate
such agreements on favorable terms and, even assuming that such agreements are
successfully executed, that the milestones will be achieved and the milestone
payments will be subsequently made by our Partners. Accordingly,
the Company must rely on its current cash reserves to fund the development of
its Aversion™ Technology and related ongoing administrative and operating
expenses. The Company estimates that its current cash reserves will be
sufficient to fund the development of the Aversion™ Technology and related
operating expenses through May,
2005. To fund
operations through March 2006, the Company estimates that it must raise
additional financing, or enter into collaboration agreements with third parties
providing for net proceeds to the Company of approximately $5 million. No
assurance can be given that the Company will be successful in obtaining any such
financing or in securing collaborative agreements with third parties on
acceptable terms, if at all, or if secured, that such financing or collaborative
agreements will provide for payments to the Company sufficient to continue to
fund operations. In the absence of such financing or third-party collaborative
agreements, the Company will be required to scale back or terminate operations
and/or seek protection under applicable bankruptcy laws.
Opioid
Synthesis Technologies Strategy Update
The
Company is in the process of suspending further development and
commercialization efforts relating to its proprietary manufacturing processes
for opioid APIs (the “Opioid Synthesis Technologies”). The Company has
determined based on, among other factors, the Company’s limited cash balances,
the Company’s focus on the AversionTM
Technology, the additional funding of at least $7 million required for facility
improvements to scale up the Opioid Synthesis Technologies to commercial scale,
and the projected timeline for resolution of the Company’s application to the
U.S. Drug Enforcement Administration for a narcotic raw material import
registration (the “Import Registration”), that suspending further activities
relating to the Opioid Synthesis Technologies is in the Company’s best interest.
The Company expects to re-evaluate the development and commercialization of the
Opioid Synthesis Technologies after the Administrative Law Judge makes a
determination relating to the Company’s Import Registration. No assurance can be
given that development and commercialization efforts relating to the Opioid
Synthesis Technologies will resume in the future, or even if such activities
resume, that the Opioid Synthesis Technologies will be capable of commercial
scale up or will be commercialized.
Acura
Pharmaceuticals, Inc., together with its subsidiaries, is an emerging
pharmaceutical technology development company specializing in proprietary opioid
abuse deterrent formulation technology.
This
press release contains forward looking statements, within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934,
as amended that are based on management's beliefs and assumptions, current
expectations, estimates and projections. Investors are cautioned that forward
looking statements involve risks, uncertainties and other factors, which could
cause actual results to differ materially from future results expressed or
implied by such forward looking statements. The most significant of such factors
include, but are not limited to, general economic conditions, competitive
conditions, technological conditions and governmental legislation. More
specifically, important factors that may affect future results include, but are
not limited to: changes in laws and regulations, particularly those affecting
the Company’s operations; the Company's
ability to continue to attract, assimilate and retain highly skilled
personnel; its
ability
to secure and protect its patents, trademarks and proprietary rights; litigation
or regulatory action that could require the Company to pay significant damages
or change the way it conducts its business; the Company’s ability to
successfully develop and market its products; customer responsiveness to new
products and distribution channels; its
ability to compete successfully against current and future
competitors; its
dependence on third-party suppliers of raw materials; the availability of
controlled substances that constitute the active ingredients of the Company’s
products in development; difficulties or delays in clinical trials for Company
products or in the manufacture of Company products; and other risks and
uncertainties detailed in Company filings with the Securities and Exchange
Commission. The Company is at an early stage of development and may not ever
have any products that generate significant revenue.
Further,
the forward looking statements speak only as of the date such statements are
made, and the Company undertakes no obligation to update any forward looking
statements to reflect events or circumstances after the date of such statements.
Any or all of the forward looking statements whether included in this release or
in the Company’s filings with the Securities and Exchange Commission, may turn
out to be wrong. Readers should remember that no forward looking statement can
be guaranteed and other factors besides those listed above could adversely
affect the Company, its operating results or financial condition.
This and
past press releases for Acura Pharmaceuticals, Inc. are available at Acura’s web
site at www.acurapharm.com.
|
ACURA
PHARMACEUTICALS, INC. | |||||||||||||
|
FINANCIAL
HIGHLIGHTS | |||||||||||||
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
|
(in
thousands, except per share data) | |||||||||||||
|
(unaudited) |
|||||||||||||
|
Three
Months Ended |
Twelve
Months Ended |
||||||||||||
|
December
31, |
December
31, |
||||||||||||
|
2004 |
2003 |
2004 |
2003 |
||||||||||
|
Net
Product Revenues |
$ |
— |
$ |
1,540 |
$ |
838 |
$ |
5,750 |
|||||
|
Operating
Costs |
|||||||||||||
|
Cost of Manufacturing |
—
|
4,300
|
1,435
|
11,705
|
|||||||||
|
Research and Development |
951
|
505
|
4,130
|
1,460
|
|||||||||
|
Selling, Marketing, General and Administrative |
1,000
|
1,789
|
5,238
|
7,903
|
|||||||||
|
Plant Shutdown Costs |
—
|
1,926
|
—
|
1,926
|
|||||||||
|
Loss from Operations |
(1,951 |
) |
(6,980 |
) |
(9,965 |
) |
(17,244 |
) | |||||
|
Other
Income (Expense) |
|||||||||||||
|
Interest Expense |
(123 |
) |
(1,565 |
) |
(2,962 |
) |
(6,001 |
) | |||||
|
Interest Income |
19
|
3
|
59
|
25
|
|||||||||
|
Amortization and Write-off of Deferred Debt |
|||||||||||||
|
Discount and Private Debt Offering Costs |
—
|
(6,721 |
) |
(72,491 |
) |
(24,771 |
) | ||||||
|
Gain on Debt Restructure |
—
|
—
|
12,401
|
—
|
|||||||||
|
(Loss) Gain on Asset Disposals |
(29 |
) |
—
|
2,359
|
—
|
||||||||
|
Other |
—
|
—
|
603
|
(464 |
) | ||||||||
|
NET
LOSS |
$ |
(2,084 |
) |
$ |
(15,263 |
) |
$ |
(69,996 |
) |
$ |
(48,455 |
) | |
|
Basic
and Diluted Loss Per Common Share |
$ |
(0.09 |
) |
$ |
(0.71 |
) |
$ |
(3.20 |
) |
$ |
(2.28 |
) | |
|
Weighted
Average Number of |
|||||||||||||
|
Outstanding
Common Shares |
22,192
|
21,548
|
21,861
|
21,227
|
|||||||||
|
ACURA
PHARMACEUTICALS, INC. | |||||||
|
FINANCIAL
HIGHLIGHTS | |||||||
|
CONDENSED
CONSOLIDATED BALANCE SHEETS | |||||||
|
At
December 31, | |||||||
|
(in
thousands) | |||||||
|
2004 |
2003 |
||||||
|
ASSETS |
|||||||
|
Current
Assets |
$ |
3,410 |
$ |
2,122 |
|||
|
Property,
Plant and Equipment, Net |
1,555
|
3,394
|
|||||
|
Other
Assets |
2
|
1,106
|
|||||
$ |
4,967 |
$ |
6,622 |
||||
|
LIABILITIES
& STOCKHOLDERS' DEFICIT |
|||||||
|
Current
Liabilities |
988
|
5,892
|
|||||
|
Long
Term Debt, Net |
5,064
|
52,797
|
|||||
|
Stockholders'
Deficit |
(1,085 |
) |
(52,067 |
) | |||
$ |
4,967 |
$ |
6,622 |
||||