Pain Therapeutics Reports Operating Results (10-Q)
Pain Therapeutics has a market cap of $228.4 million; its shares were traded at around $5.36 with and P/S ratio of 11.1. PTIE is in the portfolios of Richard Perry of Perry Capital, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: All of our collaboration, contract and milestone revenues are recognized pursuant to our strategic alliance with King. King has made non-refundable upfront cash payments of $155.0 million to us, including the $5.0 million we expect King will pay us in July 2010. King has made milestone payments to us of $25.0 million related to clinical and regulatory milestones under the strategic alliance. We could also receive from King up to $125.0 million in additional milestone payments in the course of clinical development of the opioid painkillers under the strategic alliance.
Our technology has been applied across certain of our portfolio of drug candidates. Data, know-how, personnel, clinical results, research results and other matters related to the research and development of any one of our drug candidates may also relate to, and further the development of, our other drug candidates. For example, we expect that results of non-clinical studies, such as pharmacokinetics, toxicology and other studies, regarding certain components of our drug candidate REMOXY to be applicable to the other drug candidates that may arise out of our collaboration with King since all such drug candidates are expected to utilize such components. As a result, costs allocated to a specific drug candidate may not necessarily reflect the actual costs surrounding research and development of that drug candidate due to cross application of the foregoing. We are also developing a novel antibody drug candidate to treat metastatic melanoma. Research and development expenses related to the metastatic melanoma technology include approximately $0.3 million and $1.7 million in the three and six month ended June 30, 2010 and $0.8 million and $1.7 million in the three and six months ended June 30, 2009, respectively, primarily in contractor fees and compensation. Research and development expenses related to hemophilia and other product candidates include approximately $0.4 million and $0.5 million in the three and six month ended June 30, 2010 and $0.9 million and $2.6 million in the three and six months ended June 30, 2009, respectively, primarily in contractor fees and compensation.
Collaboration revenues decreased to $0.1 million from $2.6 million and to $0.9 million from $5.9 million in the three and six months ended June 30, 2010 and 2009, respectively. These revenues related to reimbursement of our development expenses incurred pursuant to the King strategic alliance. Collaboration revenues were lower in the three- and six-month periods of 2010 as compared to the same periods in 2009 because the reimbursable expenses we incurred pursuant to the strategic alliance with King were lower from period to period.
Research and development expense decreased to $2.2 million from $5.1 million and to $5.4 million from $12.7 million in the three and six months ended June 30, 2010 and 2009, respectively. The decrease was primarily due to decreases in clinical and development activities for REMOXY including the assumption in 2009 by King of primary regulatory responsibility for REMOXY, personnel-related expenses, as well as decreased clinical and preclinical activities in metastatic melanoma, hemophilia and other projects. Research and development expenses for non-cash stock related compensation costs decreased to $0.7 million from $0.9 million and to $1.6 million from $2.0 million in the three and six months ended June 30, 2010 and 2009, respectively.
General and administrative expenses consist primarily of compensation and other general corporate expenses. General and administrative expenses increased to $1.7 million from $1.4 million in the three months ended June 30, 2010 and 2009, respectively and were $3.1 million in the six months ended June 30, 2010 and 2009. The change was primarily due to fluctuations in other operating costs. General and administrative expenses for non-cash stock related compensation costs decreased to $0.6 from $0.7 in the three months ended June 30, 2010 and 2009, respectively and were $1.2 million for the six months ended June 30, 2010 and 2009.
Interest and other income, net, increased to $0.5 from $0.2 million and to $0.8 million from $0.6 million in the three and six months ended June 30, 2010 and 2009, respectively. We expect our interest income to decrease in the future as we use cash to fund our operations.
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