MOLECULAR INSIGHT PHARMACEUTICALS INC. is a biopharmaceutical company specializing in the emerging field of molecular medicine applying innovations in the identification & targeting of disease at the molecular level to improve healthcare for patients with life-threatening diseases. The company is focused on discovering developing & commercializing innovative molecular radiotherapeutics & molecular imaging pharmaceuticals with initial applications in the areas of oncology & cardiology. Its lead molecular radiotherapeutic product candidates Azedra & Onalta are being developed for detection & treatment of cancer. The company's lead molecular imaging pharmaceutical product candidate Zemiva is being developed for the diagnosis of cardiac ischemia or insufficient blood flow to the heart. In addition the company has a growing pipeline of product candidates resulting from application of its proprietary platform technologies to new and existing compounds. Molecular Insight Pharmaceuticals Inc. has a market cap of $103.5 million; its shares were traded at around $4.12 with and P/S ratio of 217.9. Highlight of Business Operations: Research and development expense decreased approximately $4.0 million or 40%, to $6.1 million for the three months ended March 31, 2009 from $10.0 million for the three months ended March 31, 2008. Key components of this spending decrease were attributed to the following: (1) completion of our Zemiva Phase 2 clinical trial which reduced overall program costs by about $3.1 million; (2) reduced clinical activity or costs of $0.6 million for Solazed to plan our Phase I clinical trial; and (3) reduction in costs of $0.8 million related to other non-key core programs to focus our resources on lead product candidates. These spending decreases were offset by an increase of $0.4 million for the development and validation of Onalta drug compound as we prepare for further clinical development.
General and administrative expense decreased $0.8 million or 15%, to $4.4 million for the three months ended March 31, 2009 from $5.2 million for the three months ended March 31, 2008. This decrease is due primarily to the $0.3 million savings in compensation and benefits realized from the workforce reduction implemented in late 2008 and reduction in costs of $0.4 million related to the use of consultants and outside services to support corporate management, marketing and communications. We anticipate a significant reduction in our general and administrative expenses for 2009 due to our cost-cutting initiatives implemented in the latter half of 2008.
Other expense, net increased $0.4 million to $5.0 million for the three months ended March 31, 2009 from other expense, net of $4.6 million for the three months ended March 31, 2008. During the first quarter of 2008 and 2009, interest expense was $5.8 million and $5.5 million, respectively, partially offset by interest income of $1.2 million and $0.5 million, respectively. The decrease in interest expense of $0.3 million in the first quarter of 2009 as compared to the first quarter of 2008 was due to lower LIBOR interest rates on our $150 million Senior Secured Floating Rate Bonds (Bonds), offset by an increase in the principal base on which interest is accrued. Interest accrued on the Bonds for the first three years from issuance date shall be payable through the issuance of paid-in-kind (PIK) and shall begin to accrue interest from the date of issuance of such PIK Bonds. The average interest rate was 11.79% and 9.84% for the three months ended March 31, 2008 and 2009, respectively. The decrease in interest income in the current quarter was the result of lower yields on our investments as well as a decrease in investment level. These investments and the associated income are utilized to fund current operations.
At March 31, 2009, we had $15.6 million in cash and cash equivalents, and $78.1 million of investments mainly in U.S. treasury bills with maturities over 90 days, for a total of $93.7 million available to finance future operations. Our cash and cash equivalents, and investments are held at two financial institutions, of which substantially all amounts were held in one institution.
Net cash used in operating activities decreased by $5.1 million to $11.9 million for the quarter ended March 31, 2009, compared to $17.0 million for the quarter ended March 31, 2008. The decrease in cash used in operations was primarily due to the decrease in net loss of $4.5 million and the decrease in payments for accounts payable and accrued expenses of $1.6 million in the first quarter 2009, compared to the first quarter 2008 and offset by an increase in prepayments to vendors of $0.6 million and reduction in non-cash interest expense of $0.3 million. The decreases in net loss and payments for accounts payable and accrued expenses were attributed to the reduction in research and development expenses of $4.0 million as compared to the same period in the prior year
with the completion of our clinical trial for Zemiva and implementation of non-development program-related cost-cutting measures in the second half of 2008 to optimize the use of our cash resources. Operational efficiencies implemented in general and administrative functions also contributed a $0.8 million decrease in net loss for the quarter ended March 31, 2009. Net cash provided by investing activities decreased by $5.5 million to $1.6 million for the quarter ended March 31, 2009 from a net cash provided of $7.1 million in the quarter ended March 31, 2008 primarily due to lower amounts of funds invested as such are utilized to fund operations. Net cash provided by financing activities related primarily to the exercise of common stock options. We anticipate that our annual cash burn will be reduced by 10 to 20 percent in 2009 as compared to the year ended 2008.
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