EntreMed Inc. Reports Operating Results (10-Q)
Entremed Inc. has a market cap of $23.71 million; its shares were traded at around $2.57 with and P/S ratio of 4.49. ENMD is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:On January 11, 2010, we sold 284,090 shares of our common stock, par value $0.01 per share, to an institutional investor for an aggregate purchase price of $2,500,000. On February 3, 2010, we sold 349,650 shares of our common stock to the same institutional investor for an aggregate purchase price of $2,500,000. On April 16, 2010, we sold 526,500 shares of our common stock to the same institutional investor for an aggregate purchase price of $3,000,000. Our net proceeds from these three offerings were approximately $7.4 million. Additional funds raised by issuing equity securities may result in dilution to existing shareholders. If we fail to obtain additional capital when needed, we may be required to delay, scale back, or eliminate our clinical program.
In addition to the $1.00 minimum closing bid price, we must continually maintain (1) stockholders equity of at least $2.5 million or (2) a minimum of $35 million in market value of our listed securities for ten consecutive trading days to be in compliance with the continued listing standards for The NASDAQ Capital Market. At June 30, 2010, our consolidated stockholders equity was approximately $1,616,000 and the market value of our listed securities was $42.4 million. There can be no assurance that we will be able to meet either of these listing standards in the future.
Reflected in our R&D expenses totaling $1,011,000 for the three-month period ended June 30, 2010 are direct project costs of $722,000 for ENMD-2076, $22,000 for Panzem® oncology, $22,000 for ENMD-1198 and $7,000 for MKC-1. The 2009 research and development expenses for the comparable period included $1,134,000 for ENMD-2076, $17,000 for Panzem® oncology and $76,000 for MKC-1.Research and development expenses totaling $1,855,000 for the six-month period ended June 30, 2010 include direct project costs of $1,525,000 related to ENMD-2076, $50,000 related to Panzem® oncology and $34,000 related to ENMD-1198. Additionally, during the six-month period ended June 30, 2010, we wrote off approximately $268,000 of costs previously accrued for patients enrolled in MKC-1 clinical trials that wound down before all cycles of treatment were completed. The 2009 research and development expenses for the comparable period included $1,906,000 for ENMD-2076, $124,000 for Panzem®, $338,000 for MKC-1, and $94,000 for ENMD-1198. The decrease in research and development costs in the three and six-month periods ended June 30, 2010, as compared to same periods in 2009, reflects our continued focus on the clinical development of ENMD-2076 as we ceased clinical and manufacturing activities in our discontinued programs.
At June 30, 2010, accumulated direct project expenses for Panzem® oncology were $54,295,000; direct ENMD-1198 project expenses totaled $13,177,000; and, since acquired, accumulated direct project expenses for ENMD-2076 totaled $15,683,000 and for MKC-1, accumulated project expenses totaled $10,145,000. Our research and development expenses also include non-cash stock-based compensation totaling $9,000 and $19,000, respectively, for the three and six months ended June 30, 2010 and $24,000 and $81,000 for the respective corresponding 2009 periods. The decrease in stock-based compensation expense is related to fewer stock options granted in the six months ending June 30, 2010. The balance of our research and development expenditures includes facility costs and other departmental overhead, and expenditures related to the non-clinical support of our programs.
General and administrative expenses decreased to $771,000 in the three-month period ended June 30, 2010 from $1,011,000 in the corresponding 2009 period. For the six-month period, general and administrative expenses decreased in 2010 to $1,822,000 from $2,170,000 for the corresponding 2009 period.
Interest Expense. Interest expense, which relates to a financing transaction with General Electric Capital Corporation (GECC) in September 2007, decreased to approximately $169,000 (including $15,079 of non-cash interest) in the three-month period ended June 30, 2010 from approximately $400,000 (including $35,829 of non-cash interest) in the corresponding 2009 period. For the six-month period, interest expense decreased in 2010 to approximately $390,000 (including $35,550 of non-cash interest) from approximately $854,000 (including $76,515 of non-cash interest) for the corresponding 2009 period.
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