HollisEden Pharmaceuticals Inc. (HEPH) filed Quarterly Report for the period ended 2009-06-30.
HollisEden Pharmaceuticals Inc. has a market cap of $13.3 million; its shares were traded at around $0.455 with and P/S ratio of 20.8.
Highlight of Business Operations:
We have devoted substantially all of our resources to the payment of research and development expenses and general and administrative expenses. From inception through June 30, 2009, we have incurred approximately $166.8 million in research and development expenses, $86.3 million in general and administrative expenses, and $3.0 million in the settlement of a dispute.
From inception through June 30, 2009, we have generated approximately $1.2 million in revenues (which resulted from providing research and development services under our Study Funding Agreement with CFFT). We have earned $9.2 million in net, other income, as our $17.3 million of interest income has been partly offset by $7.6 million in deemed discount expense, $0.4 million in interest expense and $0.2 million loss on disposal of assets. The combination of these resulted in a net loss of $245.8 million for the period from inception until June 30, 2009.
Research and development expenses were $2.8 million and $6.2 million for the three-month and six-month periods ended June 30, 2009, respectively, compared to $4.4 million and $8.8 million for the same periods in 2008. The research and development expenses relate primarily to the ongoing development, preclinical testing and clinical trials for our drug candidates. Research and development expenses decreased by $1.7 million and $2.6 million for the three-month and six-month periods ended June 30, 2009, respectively, compared to the same periods in 2008, primarily due to a decrease in general and preclinical research and development projects; stock option compensation expense also declined. These decreases were partly offset by an increase in clinical trial expenditures, including expenditures for a follow-on study of TRIOLEX™ (HE3286) in drug-naive inflamed, obese insulin resistant type 2 diabetic patients.
General and administrative expenses were $1.5 million and $3.5 million for the three-month and six-month periods ended June 30, 2009, respectively, and $1.8 million and $3.6 million for the same periods in 2008. General and administrative expenses relate primarily to salaries and benefits, facilities, legal, accounting/auditing, investor relations, consultants, insurance and travel. General and administrative expenses decreased by $0.3 million and $0.1 million for the three-month and six-month periods ended June 30, 2009, respectively, compared to the same period in 2008. The decrease was due mainly to a decrease in salaries expense, investor communications and stock option compensation expense, offset by an increase in legal fees related primarily to the termination of our former chief executive officer Richard Hollis.
Other income, net was $35,000 and $104,000 for the three-month and six-month periods ended June 30, 2009, respectively, compared to $0.3 million and $0.7 million for the same periods in 2008. The decrease in interest income was due to lower interest rates and cash balances.
We have experienced significant operating losses to date because of the substantial expenses we have incurred to acquire and fund development of our drug candidates. We have never had significant operating revenues and have never commercially introduced a product. Our accumulated deficit was approximately $245.8 million as of June 30, 2009. Our net losses for fiscal years 2008, 2007 and 2006 were approximately $21.6 million, $23.1 million and $30.2 million, respectively. Many of our research and development programs are at an early stage. Potential drug candidates are subject to inherent risks of failure. These risks include the possibilities that no drug candidate will be found safe or effective, meet applicable regulatory standards or receive the necessary regulatory clearances. Even if we were ultimately to receive regulatory approval for one or more of our drug candidates, we may be unable to commercialize them successfully for a variety of reasons. These include, for example, the availability of alternative treatments, lack of cost effectiveness, the cost of manufacturing the product on a commercial scale, the effect of competition with other drugs, or because we may have inadequate financial or other resources to pursue one or more of our drug candidates through commercialization. If we are unable to develop safe, commercially viable drugs, we may never achieve profitability. If we become profitable, we may not remain profitable.
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