Zonagen Inc. is a biopharmaceutical company engaged in the development of products for the human reproductive system including sexual dysfunction vaccine adjuvants products for fertility and female health as well as urological applications specifically prostate cancer. Zonagen's products to treat sexual dysfunction all incorporate phentolamine mesylate an alpha-adrenergic blocker as the active agent. Zonagen's lead product VASOMAX(R) is a rapidly disintegrating oral formulation of phentolamine for the treatment of male erectile dysfunction. Repros Therapeutics Inc. has a market cap of $101.22 million; its shares were traded at around $6.67 with and P/S ratio of 233.76. Repros Therapeutics Inc. had an annual average earning growth of 2.3% over the past 10 years.
Highlight of Business Operations:As of March 31, 2009, the Company had an accumulated deficit of $154.0 million and had cash and cash equivalents of $12.4 million. We have experienced negative cash flows from operations since inception and have funded our activities to date primarily from equity financings and corporate collaborations. Based on our current ongoing and planned clinical programs, we will have spent our remaining cash and cash equivalents during the third quarter of 2009 and need to raise additional capital in order to continue our development activities. It is possible that our current clinical trial activities will be more costly and take longer than we anticipate; accordingly, there can be no assurance that additional capital will not be necessary prior to the time anticipated. We believe that we will secure sufficient capital to continue our ongoing and planned clinical programs assuming that the results of our current ongoing clinical trials with Proellex are favorable. If the results of these trials are unfavorable, there can be no assurance that the Company will be successful in obtaining additional capital in amounts sufficient to continue to fund its operations, which outcome would have a material adverse effect on the Company. The uncertainties relating to the foregoing matters raise substantial doubt about our ability to continue as a going concern over the next twelve months.
We capitalize the cost associated with building our patent library for Proellex and Androxal. As of March 31, 2009, other assets consist of capitalized patent costs in the amount of $1,840,000. Patent costs, which include legal and application costs related to the patent portfolio, are being amortized over 20 years, or the lesser of the legal or the estimated economic life of the patent. Amortization of patent costs was $12,000 and $3,000 in the first quarter ended March 31, 2009 and 2008, respectively. Of the $1,840,000 in capitalized patents, $809,000 related to Proellex patents and $1,031,000 related to Androxal patents.
Research and development, or R&D, expenses include contracted services relating to our clinical product development activities which include preclinical studies, clinical trials, regulatory affairs and bulk manufacturing scale-up activities and bulk active ingredient purchases for preclinical and clinical trials primarily relating to our two products in clinical development, which are Proellex and Androxal. Research and development expenses also include internal operating expenses relating to our general research and development activities. R&D expenses decreased 8% or approximately $468,000 to $5.7 million for the three month period ended March 31, 2009 as compared to $6.2 million for the same period in the prior year. Our primary R&D expenses for the three month periods ended March 31, 2009 and 2008 are shown in the following table (in thousands):
To date through March 31, 2009 we have incurred approximately $41.5 million for the development of Proellex and approximately $13.9 million for the development of Androxal. These accumulated costs exclude any internal operating expenses. We are currently developing Proellex for three indications which include a pre-surgical treatment of anemia associated with uterine fibroids, a chronic treatment of
Proellex clinical development expenses remained relatively constant at $4.7 million for the three month period ended March 31, 2009 as compared to $4.6 million for the same period in the prior year. Although the Proellex clinical development expenses remained constant, the detail of the expenses is shown in the following table (in thousands):
Androxal clinical development expenses decreased 64% or approximately $623,000 to $347,000 for the three month period ended March 31, 2009 as compared to $970,000 for the same period in the prior year. The decrease in Androxal clinical development expenses is shown in the following table (in thousands):
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