AXYX Axonyx

Axonyx, Inc. (NASDAQ: AXYX) today announced its financial results for the fourth quarter and fiscal year ended December 31, 2005. Financial Results Axonyx reported a net loss of $4,315,000, or $0.08 per share, in the fourth quarter of 2005 as compared to $8,964,000, or $0.17 per share, in the fourth quarter of 2004. Research and development expenses decreased in the fourth quarter of 2005 to $2,813,000 from $7,853,000 in the fourth quarter of 2004. The decrease is primarily due to a $4,717,000 reduction in Phenserine program expenditures resulting from the completion of Phenserine trials in late 2005. General and administrative expenses decreased in the fourth quarter of 2005 to $1,249,000 from $2,212,000 in the fourth quarter of 2004. The reduction is due to a decrease of $384,000 in expenses from OXIS operations that are no longer consolidated with Axonyx's results effective March 1, 2005, a decrease of $308,000 in non-cash charges relating to stock option grants to consultants, a decline in net payroll expenses of $151,000 reflecting no payroll bonuses in 2005, and a reduction in other administrative expenses. For the year ended December 31, 2005, the Company reported a net loss of $28,614,000 or $0.53 per share compared to $28,780,000, or $0.58 per share, during the same period in 2004. Revenue for the year ended December 31, 2005 was $403,000 as compared to $2,275,000 for the year ended December 31, 2004. Revenues in 2005 and 2004 were derived from the sale of research assays and fine chemicals at OXIS, and in 2004, a licensing agreement at OXIS for $450,000. The decline in 2005 revenue reflects the fact that OXIS operations are no longer being consolidated with Axonyx's results effective March 1, 2005. For the year ended December 31, 2005, the Company incurred research and development costs of $24,621,000 compared to $23,741,000 for the year ended December 31, 2004. The increase of $880,000 primarily reflects increased expenditures in the Posiphen(TM) and Bisnorcymserine programs offset in part by a decline in expenses in the Phenserine program due to the completion of the Phenserine trials in late 2005. During 2005, Posiphen(TM) entered clinical Phase I studies and Bisnorcymserine was in full pre-clinical development towards filing an investigational new drug application (IND). For the year ended December 31, 2005, the Company incurred general and administrative costs of $5,143,000 compared to $8,250,000 for the year ended December 31, 2004. The decrease of $3,107,000 for 2005 was due to a decrease of $2,193,000 in expenses from OXIS operations and a decrease of $1,930,000 in non-cash option charges relating to stock option grants to consultants. These declines are offset in part by an increase in professional fees of $1,105,000. The increase in professional fees results from the utilization of additional outside counsel, patent filing costs, legal cost related to class action securities litigation, Sarbanes Oxley compliance and board member fees. As of December 31, 2005, the Company had $58,338,000 in cash, cash equivalents and investments and $53,293,000 in working capital. Gosse B. Bruinsma, M.D., President and Chief Executive Officer, stated, "We finished the year with a strong balance sheet and continue to focus on ways to drive progress in the CNS disease category. We have delivered on a number of milestones, namely advancing Posiphen(TM) into Phase I clinical trial and entering our first licensing agreement for Phenserine. Looking ahead, we remain committed to creating value for both our development programs and shareholders through a disciplined approach to evaluating and executing on sound opportunities." Recent Events Update -- On February 14, 2006, the Company reported a statistically significant reduction in the plasma levels of beta-amyloid 1-42 (A beta-42) in healthy human subjects treated with Phenserine for 35 days in a previously conducted Phase I study. -- On January 31, 2006, the Company announced that three presentations of data on its drug development candidate, Phenserine, and one presentation of data on its drug development candidate, Posiphen(TM), will be made at the 9th International Geneva/Springfield Symposium on Advances in Alzheimer Therapy in Geneva, Switzerland, being held April 19-22, 2006. Phenserine has been in development by the Company for the treatment of mild to moderate Alzheimer's disease (AD) and Posiphen(TM) is currently in clinical development for the treatment of AD progression. -- On January 24, 2006, the Company announced the completion of the ascending single dose Phase I trial with Posiphen(TM). This double-blind, placebo controlled study of Posiphen in healthy men and women sought to establish well tolerated doses. Posiphen appears to be well tolerated at single doses up to and including 80 mg. -- On January 4, 2006, the Company announced that it had granted to Daewoong Pharmaceutical Company Ltd. (Daewoong) an exclusive license for the use of Phenserine in the South Korean market. Under the terms of the agreement, Daewoong, at its own costs, undertakes to pursue the product development and regulatory work necessary for a New Drug Application (NDA) (or its equivalent) in South Korea with respect to Phenserine for the treatment of AD. -- On November 29, 2005, the Company reported the results of an additional analysis of a subgroup of patients from its two curtailed Phase III clinical trials (AX-CL-09/010) with Phenserine. The subgroup of patients, who received Phenserine 15mg twice daily, demonstrated a statistically significant benefit over placebo as measured by the Alzheimer's Disease Assessment Scale-cognitive subscale (ADAS-cog), when treated for more than 12 weeks. Additionally, this subgroup showed a positive trend towards improvement in the Clinical Interview Based Impression of Change (CIBIC+) test, which approached statistical significance. About Axonyx Axonyx Inc. is a U.S.-based biopharmaceutical company engaged in the acquisition and development of proprietary pharmaceutical compounds for the treatment of Central Nervous System disorders. The Company currently has three compounds in development for AD, namely Phenserine - a potential symptomatic and disease progression treatment of mild to moderate AD, Posiphen(TM) - a potential disease progression treatment for AD now in Phase I, and Bisnorcymserine (BNC) - a potential symptomatic treatment of severe AD now in pre-Investigational New Drug (IND) stage. The Company is looking to identify licensing partners to further the development of Phenserine. This press release may contain forward-looking statements or predictions. These statements represent our judgment to date, and are subject to risks and uncertainties that could materially affect the Company, including those risks and uncertainties described in the documents Axonyx files from time to time with the SEC, specifically Axonyx's annual report on Form 10-K. Specifically, with respect to our drug candidates Phenserine, Posiphen(TM) and Bisnorcymserine, Axonyx cannot assure that: any preclinical studies or clinical trials, whether ongoing or conducted in the future, will prove successful, and if successful, that the results can be replicated; safety and efficacy profiles of any of its drug candidates will be established, or if established, will remain the same, be better or worse in future clinical trials, if any; pre-clinical results related to cognition and the regulation of beta-APP will be substantiated by ongoing or future clinical trials, if any, or that any of its drug candidates will be able to improve the signs or symptoms of their respective clinical indication or slow the progression of Alzheimer's disease; any of its drug candidates will support an NDA filing, will be approved by the FDA or its equivalent, or if approved, will prove competitive in the market; or that Axonyx will have or obtain the necessary financing to support its drug development programs. Axonyx cannot assure that it will be successful with regard to identifying a (sub-) licensing partner for any of its compounds, or that any such partner will successfully develop or commercialize any such compound. Axonyx undertakes no obligation to publicly release the result of any revisions to such forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. -0- *T Condensed Consolidated Statement of Operations Three Months Ended Year Ended December 31, December 31, -------------------- ---------------- 2005 2004 2005 2004 ----------- ------------ ------------ ------------ Revenue Licensing $ 450,000 Product sales $ 410,000 $ 403,000 1,825,000 --------------------------------------------------- Total revenue 410,000 403,000 2,275,000 Cost of product sales 381,000 210,000 1,167,000 --------------------------------------------------- 29,000 193,000 1,108,000 Costs and expenses: Research and development $ 2,813,000 7,853,000 24,621,000 23,741,000 Sales, general and administrative 1,249,000 2,212,000 5,143,000 8,250,000 --------------------------------------------------- 4,062,000 10,065,000 29,764,000 31,991,000 --------------------------------------------------- Loss from operations (4,062,000) (10,036,000) (29,571,000) (30,883,000) Interest income 519,000 430,000 2,235,000 1,235,000 Equity in loss of OXIS (762,000) (1,017,000) Gain (loss) on issuance of subsidiary stock 4,000 1,083,000 (314,000) 1,154,000 Other income 19,000 19,000 Financing fees (392,000) (856,000) Interest expense (13,000) (2,000) (51,000) Loss on foreign exchange (14,000) (43,000) (109,000) (83,000) --------------------------------------------------- Net loss before minority interest in subsidiary (4,315,000) (8,952,000) (28,778,000) (29,465,000) --------------------------------------------------- Outside interest in loss of subsidiary (12,000) 164,000 685,000 --------------------------------------------------- Net loss (4,315,000) (8,964,000) (28,614,000) (28,780,000) --------------------------------------------------- Foreign currency translation adjustment 18,000 (14,000) --------------------------------------------------- Comprehensive loss $(4,315,000)$ (8,946,000)$(28,614,000)$(28,794,000) =================================================== Net loss per common share - basic and diluted (0.08) (0.17) (0.53) (0.58) =================================================== Weighted average shares - basic and diluted 53,681,000 52,950,000 53,668,000 49,977,000 =================================================== Consolidated Balance Sheets December 31, ----------------------------- 2005 2004 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 1,638,000 $ 10,091,000 Investments 56,700,000 80,500,000 Accounts receivable 229,000 Stock subscriptions receivable 2,250,000 Inventories 246,000 Other current assets 614,000 141,000 ----------------------------- Total current assets 58,952,000 93,457,000 Property, plant and equipment, net 49,000 116,000 Investment in OXIS 4,917,000 Technology for developed products, net 6,807,000 Patents and patents pending, net 995,000 Security deposits 124,000 19,000 ----------------------------- $ 64,042,000 $101,394,000 ============================= LIABILITIES Current liabilities: Accounts payable $ 4,147,000 $ 6,365,000 Accrued expenses 1,512,000 2,386,000 Note payable 160,000 ----------------------------- Total current liabilities 5,659,000 8,911,000 Outside interest in OXIS 5,945,000 STOCKHOLDERS' EQUITY Preferred stock - $.001 par value, 15,000,000 shares authorized; none issued Common stock - $.001 par value, 150,000,000 and 75,000,000 shares authorized as of 2005 and 2004, respectively; 53,680,721 and 53,645,518 shares issued and outstanding in 2005 and 2004, respectively 54,000 54,000 Additional paid-in capital 149,466,000 149,150,000 Unearned compensation - stock options (15,000) (144,000) Accumulated comprehensive loss (14,000) Accumulated deficit (91,122,000) (62,508,000) ----------------------------- Total stockholders' equity 58,383,000 86,538,000 ----------------------------- $ 64,042,000 $101,394,000 ============================= *T