EntreMed, Inc. is a clinical-stage biopharmaceutical company developing and testing product candidates that address the role of blood and blood vessels in health and disease. They are primarily focused on developing antiangiogenic drugs designed to inhibit the abnormal new blood vessel growth associated with cancer, as well as a broad range of diseasesincluding certain types of blindness and atherosclerosis. Entremed Inc. has a market cap of $112.58 million; its shares were traded at around $1.2699 with and P/S ratio of 15.06.
Highlight of Business Operations:Revenues. For the three and nine-month periods ended September 30, 2009, we have recorded estimated royalty revenues of $3,300,000 and are reporting total revenues of $3,668,000, as compared to $3,500,000 and $3,501,000, respectively, for the same periods in 2008. We recorded no revenue during the first six months of 2009 and 2008. In 2005, we reached certain milestones under our purchase agreement with Royalty Pharma Finance Trust, and began to share in the royalty payments received by Royalty Pharma on annual Thalomid® sales above a certain threshold. Based on the licensing agreement royalty formula, annual royalty sharing commences with Thalomid® annual sales of approximately $225 million. Thalomid® sales in 2009 and in 2008 surpassed the sharing point in the three-month period ended September 30. We expect to record revenues of approximately $7.0 million in 2009, as was similarly recorded in 2008.
Reflected in our R&D expenses totaling $2,237,000 for the three-month period ended September 30, 2009 are direct project costs of $1,798,000 for ENMD-2076, $75,000 for MKC-1 and $34,000 for ENMD-1198. The 2008 research and development expenses for the comparable period included $1,087,000 for ENMD-2076, $884,000 for MKC-1, $807,000 direct project costs for Panzem® oncology and $825,000 for ENMD-1198.
Research and development expenses totaling $5,940,000 for the nine-month period ended September 30, 2009 include direct project costs of $3,704,000 related to ENMD-2076, $413,000 related to MKC-1, $118,000 related to Panzem® oncology and $128,000 for ENMD-1198. The 2008 research and development expenses for the comparable period included $2,886,000 for ENMD-2076, $2,853,000 for MKC-1, $3,149,000 for Panzem® oncology and $3,474,000 for ENMD-1198.
At September 30, 2009, accumulated direct project expenses for Panzem® were $54,236,000, direct ENMD-1198 project expenses totaled $13,094,000; accumulated direct project expenses for MKC-1 totaled $10,370,000, since acquired; and for ENMD-2076, accumulated project expenses totaled $12,826,000. Our R&D expenses also include non-cash stock-based compensation, pursuant to the adoption of SFAS 123R, totaling $14,000 and $95,000, respectively, for the three and nine months ended September 30, 2009 and $65,000 and $186,000 for the respective corresponding 2008 periods. The balance of our R&D expenditures includes facilities costs and other departmental overhead, and expenditures related to the advancement of our pre-clinical programs.
$211,000 and $388,000, respectively. For the nine-month period ended September 30, 2009, personnel costs were $1,626,000, patent costs were $372,000 and facility and related expenses were $492,000. In the corresponding 2008 period, these expenses totaled $4,359,000, $514,000 and $1,138,000, respectively. These decreased expenses result from our corporate restructuring at the end of 2008, which significantly reduced our research and development staff and our facility rental costs.
The accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these financials. However, we have incurred losses since inception and we expect to generate losses from operations through 2010. We had an accumulated deficit of $364.4 million as of September 30, 2009. For the three- and nine-month periods ended September 30, 2009, we sustained net losses attributable to common stockholders of $166,000 and $7.2 million, respectively. For the three- and nine-month periods ended September 30, 2008, we sustained net losses attributable to common stockholders of $3.6 million and $22.1 million, respectively. These factors, among others, indicate that we may be unable to continue as a going concern. Our ability to continue as a going concern is contingent upon our ability to meet our liquidity requirements. Based on current plans, we estimate that our cash and cash equivalents will not be sufficient to cover our estimated funding needs for 2010. We would need to raise additional capital to continue our business operations as currently conducted and fund deficits in operating cash flows. We may raise additional capital to finance the development of our business operations, although such capital raising activity cannot be assured.
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