Acura Pharmaceuticals Inc. (ACUR, Financial) filed Quarterly Report for the period ended 2009-06-30.
Halsey Drug Company Inc. is engaged in the manufacture sale and distribution of generic drugs. A generic drug is the chemical and therapeutic equivalent of a brand-name drug for which patent protection has expired. The company sells its generic drug products under its Halsey label and under private-label arrangements with drugstore chains and drug wholesalers. Acura Pharmaceuticals Inc. has a market cap of $253.5 million; its shares were traded at around $5.93 with a P/E ratio of 19.7 and P/S ratio of 5.7.
In December, 2007, we and King Research and Development Inc., ("King") closed a License, Development and Commercialization Agreement (the “King Agreement”) to develop and commercialize certain opioid analgesic products utilizing our proprietary Aversion® Technology in the United States, Canada and Mexico. During the six months ended June 30, 2009, we recognized revenues of $2.1 million of the $30.0 million upfront cash payment received from King in December 2007 and recognized $0.2 million of revenues for reimbursement by King of our Acurox® Tablet development expenses. We have yet to generate any royalty revenues from product sales. We expect to rely on our current cash resources and additional payments that may be made under the King Agreement and under similar license agreements with other pharmaceutical company partners, of which there can be no assurance, in funding our continued operations. Our cash requirements for operating activities may increase in the future as we continue to conduct pre-clinical studies and clinical trials for our product candidates, maintain, defend, if necessary and expand the scope of our intellectual property, hire additional personnel, or invest in other areas.
King paid us a $30.0 million upfront fee in connection with the closing of the King Agreement in December 2007. Revenue recognized in the six month periods ended June 30, 2009 and 2008 from amortization of this upfront fee was $2.1 million and $22.4 million, respectively. We have assigned a portion of the program fee revenue to each of three product candidates identified under the King Agreement. Our development responsibilities for two of the three product candidates have been completed. We expect to recognize the remainder of the program fee revenue for the third product candidate ratably over its remaining development period which we currently estimate to extend through March, 2010.
Collaboration revenue recognized in the six month periods ended June 30, 2009 and 2008 was $0.2 million and $5.4 million, respectively for billed reimbursement of our Acurox® Tablet development expenses incurred pursuant to the King Agreement. We invoice King in arrears on a calendar quarter basis for our reimbursable development expenses under the King Agreement. We expect the amount and timing of collaboration revenue to fluctuate in relation to the amount and timing of the underlying research and development expenses.
Research and development expense during the six month periods ended June 30, 2009 and 2008 were for product candidates utilizing our Aversion® Technology, including costs of preclinical, clinical trials, clinical supplies and related formulation and design costs, salaries and other personnel related expenses, and facility costs. We incurred $0.8 million and $0.2 million of research and development share-based compensation expense for the six months ended June 30, 2009 and 2008. Excluding this share-based compensation expense, there is a $5.4 million decrease in development expenses primarily attributable to clinical study costs for Acurox® Tablets.
Marketing expenses during the six month periods ended June 30, 2009 and 2008 consisted of Aversion® Technology primary market data research studies. Our general and administrative expenses primarily consisted of legal, audit and other professional fees, corporate insurance, and payroll. We incurred $3.1 million and $0.7 million of general and administrative share-based compensation expense for the six months ended June 30, 2009 and 2008. Excluding this share-based compensation expense, there is a $0.8 million increase in general, administrative and marketing expenses due to increase expenditures in legal expenses and franchise taxes.
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Halsey Drug Company Inc. is engaged in the manufacture sale and distribution of generic drugs. A generic drug is the chemical and therapeutic equivalent of a brand-name drug for which patent protection has expired. The company sells its generic drug products under its Halsey label and under private-label arrangements with drugstore chains and drug wholesalers. Acura Pharmaceuticals Inc. has a market cap of $253.5 million; its shares were traded at around $5.93 with a P/E ratio of 19.7 and P/S ratio of 5.7.
Highlight of Business Operations:
As of June 30, 2009, we had received aggregate payments of $55.4 million from King, consisting of a $30.0 million non-refundable upfront cash payment, $14.4 million in reimbursed research and development expenses relating to Acurox® Tablets, $6.0 million in fees relating to King s exercise of its option to license an undisclosed opioid analgesic tablet product and Vycavert® Tablets, and a $5.0 million milestone fee for successful achievement of the primary endpoints for our pivotal Phase III clinical study for Acurox® Tablets. The King Agreement provides for King to pay us: (a) a $3.0 million option exercise fee for each future opioid product candidate King licenses, (b) up to $23 million in regulatory milestone payments for each King licensed product candidate, including Acurox® Tablets, across specific countries in the King Territory, and (c) a one-time $50 million sales milestone payment upon the first attainment of an aggregate of $750 million in net sales of all of our licensed products combined in all King Territories. In addition, for sales occurring following the one year anniversary of the first commercial sale of the first licensed product sold, King will pay us a royalty at one of 6 rates ranging from 5% to 25% based on the level of combined annual net sales for all products licensed by us to King in all King Territories, with the highest applicable royalty rate applied to such combined annual sales. No minimum annual fees are payable by either party under the King Agreement.In December, 2007, we and King Research and Development Inc., ("King") closed a License, Development and Commercialization Agreement (the “King Agreement”) to develop and commercialize certain opioid analgesic products utilizing our proprietary Aversion® Technology in the United States, Canada and Mexico. During the six months ended June 30, 2009, we recognized revenues of $2.1 million of the $30.0 million upfront cash payment received from King in December 2007 and recognized $0.2 million of revenues for reimbursement by King of our Acurox® Tablet development expenses. We have yet to generate any royalty revenues from product sales. We expect to rely on our current cash resources and additional payments that may be made under the King Agreement and under similar license agreements with other pharmaceutical company partners, of which there can be no assurance, in funding our continued operations. Our cash requirements for operating activities may increase in the future as we continue to conduct pre-clinical studies and clinical trials for our product candidates, maintain, defend, if necessary and expand the scope of our intellectual property, hire additional personnel, or invest in other areas.
King paid us a $30.0 million upfront fee in connection with the closing of the King Agreement in December 2007. Revenue recognized in the six month periods ended June 30, 2009 and 2008 from amortization of this upfront fee was $2.1 million and $22.4 million, respectively. We have assigned a portion of the program fee revenue to each of three product candidates identified under the King Agreement. Our development responsibilities for two of the three product candidates have been completed. We expect to recognize the remainder of the program fee revenue for the third product candidate ratably over its remaining development period which we currently estimate to extend through March, 2010.
Collaboration revenue recognized in the six month periods ended June 30, 2009 and 2008 was $0.2 million and $5.4 million, respectively for billed reimbursement of our Acurox® Tablet development expenses incurred pursuant to the King Agreement. We invoice King in arrears on a calendar quarter basis for our reimbursable development expenses under the King Agreement. We expect the amount and timing of collaboration revenue to fluctuate in relation to the amount and timing of the underlying research and development expenses.
Research and development expense during the six month periods ended June 30, 2009 and 2008 were for product candidates utilizing our Aversion® Technology, including costs of preclinical, clinical trials, clinical supplies and related formulation and design costs, salaries and other personnel related expenses, and facility costs. We incurred $0.8 million and $0.2 million of research and development share-based compensation expense for the six months ended June 30, 2009 and 2008. Excluding this share-based compensation expense, there is a $5.4 million decrease in development expenses primarily attributable to clinical study costs for Acurox® Tablets.
Marketing expenses during the six month periods ended June 30, 2009 and 2008 consisted of Aversion® Technology primary market data research studies. Our general and administrative expenses primarily consisted of legal, audit and other professional fees, corporate insurance, and payroll. We incurred $3.1 million and $0.7 million of general and administrative share-based compensation expense for the six months ended June 30, 2009 and 2008. Excluding this share-based compensation expense, there is a $0.8 million increase in general, administrative and marketing expenses due to increase expenditures in legal expenses and franchise taxes.
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