Neurobiological Technologies Inc. (NTII, Financial) filed Quarterly Report for the period ended 2009-09-30.
Neurobiological Tech. is an emerging drug development company focused on the clinical evaluation and regulatory approval of neuroscience drugs. The company's strategy is to in-license and develop early-stage drug candidates that target major medical needs and which can be rapidly commercialized. Neurobiological Technologies Inc. has a market cap of $24.79 million; its shares were traded at around $0.9205 with a P/E ratio of 7.08 and P/S ratio of 0.94.
Total revenues of $6,026,000 for the three months ended September 30, 2009 increased by $2,461,000 from revenues of $3,565,000 for the three months ended September 30, 2008. Our first quarter fiscal 2010 revenues consisted almost entirely of $6,019,000 from our license agreement for the product memantine with Merz Pharmaceuticals GmbH under which we received royalties on sales by Merzs marketing partner in the United States. Included in first quarter fiscal 2010 revenues were $1,119,000 received as a royalty and $4,900,000 from Merzs buy-out of its future royalty obligations upon termination of our license agreement. We do not expect to receive any further royalty revenue related to memantine.
General and administrative expenses decreased to $878,000 for the quarter ended September 30, 2009 compared to $1,331,000 for the quarter ended September 30, 2008, a reduction of $453,000, or 34%. General and administrative expenses decreased during the period in fiscal 2010 largely due to across-the-board personnel reductions following the termination of our Viprinex program in stroke. Higher legal fees in connection with preparing the company for liquidation and dissolution partially offset the savings as a result of the large personnel reductions.
During the three months ended September 30, 2009, we recorded a non-cash gain of $266,000 on the decrease in the estimated fair value of equity warrants we previously issued, as compared to a non-cash gain of $37,000 for the three months ended September 30, 2008. The decrease in the estimated fair value of the warrants, which resulted in the gain recorded during the most recent quarter, was primarily due to a decrease in the estimated volatility of our common stock, combined with a decrease in the estimated term of the warrants, partially offset by an increase in the value of our common stock.
Federal alternative minimum tax requirements only allow us to offset 90% of federal alternative minimum tax liability with alternative minimum tax NOL carryforwards, and as a result we have recorded a tax provision of $30,000 for federal alternative minimum taxes. For our fiscal year ending June 30, 2010, the state of California has temporarily suspended the use of previous NOLs to offset California taxable income. The state of California has also imposed certain new and temporary restrictions on the use of accumulated R&D tax credits for our current fiscal year. As a result, we have recorded a state tax provision of $66,000 for California income taxes.
As of September 30, 2009, we had $5.3 million invested in ARS, issued principally by student loan agencies. Our original purchase price for these securities was $7.0 million, which was subsequently written-down to a value of $5.2 million in fiscal 2008 and 2009. ARS are structured to provide liquidity via an auction process that resets the applicable interest rate at predetermined calendar intervals, which are approximately once a month. Beginning in February 2008, auctions for the securities in our portfolio failed, and none have been successful since that time. We have classified all of our ARS as short-term investments as of September 30, 2009 because we plan to liquidate these holdings. ARS with a carrying value of $4.3 million as of September 30, 2009 have been sold subsequent to this date for the values listed in our September 30, 2009 condensed consolidated balance sheet, and we believe that we will be able to sell the single remaining ARS at or near the current carrying value. If we are not able to sell the remaining ARS at or near the current carrying value, we will be required to record an additional loss.
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Neurobiological Tech. is an emerging drug development company focused on the clinical evaluation and regulatory approval of neuroscience drugs. The company's strategy is to in-license and develop early-stage drug candidates that target major medical needs and which can be rapidly commercialized. Neurobiological Technologies Inc. has a market cap of $24.79 million; its shares were traded at around $0.9205 with a P/E ratio of 7.08 and P/S ratio of 0.94.
Highlight of Business Operations:
During the three months ended September 30, 2009, we entered into an agreement to terminate a license agreement under which we were previously receiving royalties from Merz in return for Merzs agreement to provide us with a one-time payment. Amounts received as royalties and as payment in return for the termination of the royalty-bearing agreement aggregated substantially more than our administrative operating expenses, and we recorded net income of $5,405,000. During the three months ended September 30, 2008, our primary focus as a company was the development of Viprinex, an investigational drug for stroke, the majority of our costs were related to its potential development, and we recorded a net loss of $2,762,000.Total revenues of $6,026,000 for the three months ended September 30, 2009 increased by $2,461,000 from revenues of $3,565,000 for the three months ended September 30, 2008. Our first quarter fiscal 2010 revenues consisted almost entirely of $6,019,000 from our license agreement for the product memantine with Merz Pharmaceuticals GmbH under which we received royalties on sales by Merzs marketing partner in the United States. Included in first quarter fiscal 2010 revenues were $1,119,000 received as a royalty and $4,900,000 from Merzs buy-out of its future royalty obligations upon termination of our license agreement. We do not expect to receive any further royalty revenue related to memantine.
General and administrative expenses decreased to $878,000 for the quarter ended September 30, 2009 compared to $1,331,000 for the quarter ended September 30, 2008, a reduction of $453,000, or 34%. General and administrative expenses decreased during the period in fiscal 2010 largely due to across-the-board personnel reductions following the termination of our Viprinex program in stroke. Higher legal fees in connection with preparing the company for liquidation and dissolution partially offset the savings as a result of the large personnel reductions.
During the three months ended September 30, 2009, we recorded a non-cash gain of $266,000 on the decrease in the estimated fair value of equity warrants we previously issued, as compared to a non-cash gain of $37,000 for the three months ended September 30, 2008. The decrease in the estimated fair value of the warrants, which resulted in the gain recorded during the most recent quarter, was primarily due to a decrease in the estimated volatility of our common stock, combined with a decrease in the estimated term of the warrants, partially offset by an increase in the value of our common stock.
Federal alternative minimum tax requirements only allow us to offset 90% of federal alternative minimum tax liability with alternative minimum tax NOL carryforwards, and as a result we have recorded a tax provision of $30,000 for federal alternative minimum taxes. For our fiscal year ending June 30, 2010, the state of California has temporarily suspended the use of previous NOLs to offset California taxable income. The state of California has also imposed certain new and temporary restrictions on the use of accumulated R&D tax credits for our current fiscal year. As a result, we have recorded a state tax provision of $66,000 for California income taxes.
As of September 30, 2009, we had $5.3 million invested in ARS, issued principally by student loan agencies. Our original purchase price for these securities was $7.0 million, which was subsequently written-down to a value of $5.2 million in fiscal 2008 and 2009. ARS are structured to provide liquidity via an auction process that resets the applicable interest rate at predetermined calendar intervals, which are approximately once a month. Beginning in February 2008, auctions for the securities in our portfolio failed, and none have been successful since that time. We have classified all of our ARS as short-term investments as of September 30, 2009 because we plan to liquidate these holdings. ARS with a carrying value of $4.3 million as of September 30, 2009 have been sold subsequent to this date for the values listed in our September 30, 2009 condensed consolidated balance sheet, and we believe that we will be able to sell the single remaining ARS at or near the current carrying value. If we are not able to sell the remaining ARS at or near the current carrying value, we will be required to record an additional loss.
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