SNUS Sonus Pharmaceuticals (MM)

Sonus Pharmaceuticals, Inc. (NASDAQ:SNUS) today reviewed key achievements and reported third quarter financial results. Third Quarter Highlights �In the third quarter, we continued to make solid progress with our drug development programs, including TOCOSOL Paclitaxel, TOCOSOL Camptothecin and other new potential product candidates in our oncology pipeline,� said Michael A. Martino, President and Chief Executive Officer. "Today, we are pleased to report on the achievement of two key objectives: first, reaching our patient enrollment target in the Phase 3 trial of TOCOSOL Paclitaxel, and, second, initiating the clinical development program for TOCOSOL Camptothecin. Regarding enrollment in the Phase 3 trial, I am pleased to announce that we have exceeded the number of patients required under the study protocol. We anticipate closing enrollment in the TOCOSOL Paclitaxel Phase 3 trial in the next week." Mr. Martino continued, �Regarding our second objective for the third quarter, we were delighted to announce that the first patient was treated at the end of September in the Phase 1 clinical program for TOCOSOL Camptothecin. This marked an important event for Sonus, and we are pleased to have a second product candidate in the clinic. TOCOSOL Camptothecin is formulated with our proprietary vitamin-E based TOCOSOL technology, and our objective is to provide a ready-to-use product that has enhanced efficacy and improved tolerability compared to the commercially available camptothecin analogs.� Third Quarter Financial Results For the third quarter of 2006, the Company reported a net loss of $6.3 million, or $0.17 per share, compared with a net loss of $8.9 million, or $0.37 per share, in the prior year quarter. For the first nine months of 2006, Sonus reported a net loss of $16.5 million, or $0.49 per share, compared with a net loss of $17.8 million, or $0.80 per share, for the same period of 2005. The Company signed a partnership agreement with Schering AG in the fourth quarter of 2005 for the development and commercialization of TOCOSOL Paclitaxel, and no revenue was recognized under the agreement prior to that date. This contributed to the lower net loss for the third quarter and year-to-date 2006 financial results over the same periods of 2005. For the third quarter of 2006, Sonus recognized a total of $4.9 million in revenue under its agreement with Schering AG. Of this total, $3.5 million was related to R&D funding from Schering AG for work completed on the development program for TOCOSOL Paclitaxel. The remaining $1.4 million was related to amortization of the $20.0 million upfront license fee that the Company received under the Schering AG agreement. For the first nine months of 2006, Sonus recognized a total of $16.5 million in revenue under its agreement with Schering AG. Of this total, $12.4 million was related to R&D funding from Schering AG for work completed on the TOCOSOL Paclitaxel development program. The remaining $4.1 million was related to amortization of the $20.0 million upfront license fee that the Company received under the agreement with Schering AG. Cash and investments totaled $60.9 million at September 30, 2006. Sonus expects that its 2006 net cash burn will be approximately $20.0 million, compared to prior guidance in the range of $30.0 million to $32.0 million. The change in the 2006 net burn is primarily due to the timing of reimbursements and payments between Sonus and Schering AG for the TOCOSOL Paclitaxel development program; however, the Company anticipates that these expenses will shift into 2007. With its current resources, Sonus has sufficient cash to operate into 2008. The Company has no long-term debt. Quarterly Conference Call Information The third quarter conference call will be web cast live at 1:30 P.M. PT/4:30 P.M. ET on November 8 and can be accessed at www.sonuspharma.com/events.html. A web cast replay of the call will be available through the same link. A telephone replay will also be available from November 8, 4:30 P.M. PT/7:30 P.M. ET, for one week at (800) 379-7444 or (303) 590-3000 for international calls; Pass code 11074216. About Sonus Pharmaceuticals Located near Seattle, Sonus Pharmaceuticals, Inc. is focused on the development of drugs that provide better therapeutic alternatives for cancer patients, including improved efficacy, safety, tolerability, and ease of use. The Company�s lead oncology product candidate, TOCOSOL Paclitaxel, is currently in a Phase 3 pivotal trial for the potential treatment of metastatic breast cancer. TOCOSOL Paclitaxel is a ready-to-use, injectable formulation of the widely prescribed anti-cancer drug, paclitaxel. Formulated with Sonus� proprietary vitamin-E based TOCOSOL technology, TOCOSOL Paclitaxel may have the ability to reduce treatment-limiting side effects and improve anti-tumor activity. Submission of the New Drug Application for TOCOSOL Paclitaxel is targeted for the end of 2007. In October 2005, Sonus entered into a partnership agreement with Schering AG for the development and commercialization of TOCOSOL Paclitaxel. The Company moved its second product candidate, TOCOSOL Camptothecin, into Phase 1 clinical development in September 2006. TOCOSOL Camptothecin is a new entry in the same drug class as the approved camptothecin analogs, irinotecan and topotecan. Preclinical data suggest that TOCOSOL Camptothecin may be more efficacious and better tolerated than irinotecan. For additional information on Sonus, including news releases, please visit www.sonuspharma.com. Safe Harbor Certain statements made in this press release are forward-looking such as those, among others, relating to the development, safety and efficacy of therapeutic drugs and potential applications for these products. As discussed in Sonus Pharmaceuticals� filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for 2005 and Quarterly Report on Form 10-Q for the third quarter of 2006, actual results could differ materially from those projected in the forward-looking statements as a result of the following factors, among others: the Company�s products will require extensive clinical testing and approval by regulatory authorities; such approvals are lengthy and expensive and may never occur; risks that the Company will not be able to complete the Phase 3 clinical trial for TOCOSOL Paclitaxel; risks that clinical studies with TOCOSOL Paclitaxel will be delayed or will not be successful; risks that the FDA may not approve the TOCOSOL Paclitaxel New Drug Application; risks that the Phase 1 clinical trial for TOCOSOL Camptothecin will not be successful; risks of successful development of therapeutic drugs; and risks that the Company may not be successful in obtaining funding from third parties or completing a financing necessary to support the costs and expenses of clinical studies as well as research and development activities. The Company undertakes no obligation to update the forward-looking statements contained herein or to reflect events or circumstances occurring after the date hereof. SONUS Pharmaceuticals Reports Third Quarter Results Condensed Statements of Operations (Unaudited) (in thousands, except per share amounts) � Three Months Ended Nine Months Ended September 30, September 30, � 2006� � 2005� � 2006� � 2005� � Collaboration revenue from Schering AG $ 4,931� $ -� $ 16,498� $ -� Operating expenses: Research and development 10,281� 7,978� 29,640� 13,971� General and administrative � 1,786� � 1,064� � 5,442� � 4,102� Total operating expenses � 12,067� � 9,042� � 35,082� � 18,073� Operating loss (7,136) (9,042) (18,584) (18,073) Other income, net � 843� � 134� � 2,045� � 299� Net loss $ (6,293) $ (8,908) $ (16,539) $ (17,774) � Net loss per share: Basic $ (0.17) $ (0.37) $ (0.49) $ (0.80) Diluted $ (0.17) $ (0.37) $ (0.49) $ (0.80) � Shares used in calculation: Basic 36,794� 23,832� 34,036� 22,187� Diluted 36,794� 23,832� 34,036� 22,187� Condensed Balance Sheets (in thousands) September 30, December 31, � 2006� � 2005� (unaudited) Assets: Cash, cash equivalents, and marketable securities $ 60,876� $ 49,318� Accounts receivable from Schering AG 9,672� 7,057� Other current assets 239� 342� Property and equipment, net 1,240� 1,006� Long-term receivable from Schering AG -� 87� Other assets � 80� � 104� Total assets $ 72,107� $ 57,914� � Liabilities and stockholders' equity: Accounts payable $ 393� $ 1,260� Accrued expenses 9,097� 4,408� Accounts payable with Schering AG 866� -� Deferred revenue from Schering AG 12,473� 16,633� Lease obligations 22� 42� Other liabilities 75� 307� Stockholders' equity � 49,181� � 35,264� Total liabilities and stockholders' equity $ 72,107� $ 57,914� Sonus Pharmaceuticals, Inc. (NASDAQ:SNUS) today reviewed key achievements and reported third quarter financial results. Third Quarter Highlights "In the third quarter, we continued to make solid progress with our drug development programs, including TOCOSOL Paclitaxel, TOCOSOL Camptothecin and other new potential product candidates in our oncology pipeline," said Michael A. Martino, President and Chief Executive Officer. "Today, we are pleased to report on the achievement of two key objectives: first, reaching our patient enrollment target in the Phase 3 trial of TOCOSOL Paclitaxel, and, second, initiating the clinical development program for TOCOSOL Camptothecin. Regarding enrollment in the Phase 3 trial, I am pleased to announce that we have exceeded the number of patients required under the study protocol. We anticipate closing enrollment in the TOCOSOL Paclitaxel Phase 3 trial in the next week." Mr. Martino continued, "Regarding our second objective for the third quarter, we were delighted to announce that the first patient was treated at the end of September in the Phase 1 clinical program for TOCOSOL Camptothecin. This marked an important event for Sonus, and we are pleased to have a second product candidate in the clinic. TOCOSOL Camptothecin is formulated with our proprietary vitamin-E based TOCOSOL technology, and our objective is to provide a ready-to-use product that has enhanced efficacy and improved tolerability compared to the commercially available camptothecin analogs." Third Quarter Financial Results For the third quarter of 2006, the Company reported a net loss of $6.3 million, or $0.17 per share, compared with a net loss of $8.9 million, or $0.37 per share, in the prior year quarter. For the first nine months of 2006, Sonus reported a net loss of $16.5 million, or $0.49 per share, compared with a net loss of $17.8 million, or $0.80 per share, for the same period of 2005. The Company signed a partnership agreement with Schering AG in the fourth quarter of 2005 for the development and commercialization of TOCOSOL Paclitaxel, and no revenue was recognized under the agreement prior to that date. This contributed to the lower net loss for the third quarter and year-to-date 2006 financial results over the same periods of 2005. For the third quarter of 2006, Sonus recognized a total of $4.9 million in revenue under its agreement with Schering AG. Of this total, $3.5 million was related to R&D funding from Schering AG for work completed on the development program for TOCOSOL Paclitaxel. The remaining $1.4 million was related to amortization of the $20.0 million upfront license fee that the Company received under the Schering AG agreement. For the first nine months of 2006, Sonus recognized a total of $16.5 million in revenue under its agreement with Schering AG. Of this total, $12.4 million was related to R&D funding from Schering AG for work completed on the TOCOSOL Paclitaxel development program. The remaining $4.1 million was related to amortization of the $20.0 million upfront license fee that the Company received under the agreement with Schering AG. Cash and investments totaled $60.9 million at September 30, 2006. Sonus expects that its 2006 net cash burn will be approximately $20.0 million, compared to prior guidance in the range of $30.0 million to $32.0 million. The change in the 2006 net burn is primarily due to the timing of reimbursements and payments between Sonus and Schering AG for the TOCOSOL Paclitaxel development program; however, the Company anticipates that these expenses will shift into 2007. With its current resources, Sonus has sufficient cash to operate into 2008. The Company has no long-term debt. Quarterly Conference Call Information The third quarter conference call will be web cast live at 1:30 P.M. PT/4:30 P.M. ET on November 8 and can be accessed at www.sonuspharma.com/events.html. A web cast replay of the call will be available through the same link. A telephone replay will also be available from November 8, 4:30 P.M. PT/7:30 P.M. ET, for one week at (800) 379-7444 or (303) 590-3000 for international calls; Pass code 11074216. About Sonus Pharmaceuticals Located near Seattle, Sonus Pharmaceuticals, Inc. is focused on the development of drugs that provide better therapeutic alternatives for cancer patients, including improved efficacy, safety, tolerability, and ease of use. The Company's lead oncology product candidate, TOCOSOL Paclitaxel, is currently in a Phase 3 pivotal trial for the potential treatment of metastatic breast cancer. TOCOSOL Paclitaxel is a ready-to-use, injectable formulation of the widely prescribed anti-cancer drug, paclitaxel. Formulated with Sonus' proprietary vitamin-E based TOCOSOL technology, TOCOSOL Paclitaxel may have the ability to reduce treatment-limiting side effects and improve anti-tumor activity. Submission of the New Drug Application for TOCOSOL Paclitaxel is targeted for the end of 2007. In October 2005, Sonus entered into a partnership agreement with Schering AG for the development and commercialization of TOCOSOL Paclitaxel. The Company moved its second product candidate, TOCOSOL Camptothecin, into Phase 1 clinical development in September 2006. TOCOSOL Camptothecin is a new entry in the same drug class as the approved camptothecin analogs, irinotecan and topotecan. Preclinical data suggest that TOCOSOL Camptothecin may be more efficacious and better tolerated than irinotecan. For additional information on Sonus, including news releases, please visit www.sonuspharma.com. Safe Harbor Certain statements made in this press release are forward-looking such as those, among others, relating to the development, safety and efficacy of therapeutic drugs and potential applications for these products. As discussed in Sonus Pharmaceuticals' filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for 2005 and Quarterly Report on Form 10-Q for the third quarter of 2006, actual results could differ materially from those projected in the forward-looking statements as a result of the following factors, among others: the Company's products will require extensive clinical testing and approval by regulatory authorities; such approvals are lengthy and expensive and may never occur; risks that the Company will not be able to complete the Phase 3 clinical trial for TOCOSOL Paclitaxel; risks that clinical studies with TOCOSOL Paclitaxel will be delayed or will not be successful; risks that the FDA may not approve the TOCOSOL Paclitaxel New Drug Application; risks that the Phase 1 clinical trial for TOCOSOL Camptothecin will not be successful; risks of successful development of therapeutic drugs; and risks that the Company may not be successful in obtaining funding from third parties or completing a financing necessary to support the costs and expenses of clinical studies as well as research and development activities. The Company undertakes no obligation to update the forward-looking statements contained herein or to reflect events or circumstances occurring after the date hereof. -0- *T SONUS Pharmaceuticals Reports Third Quarter Results Condensed Statements of Operations (Unaudited) (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, -------------------- --------------------- 2006 2005 2006 2005 ---------- --------- ---------- ---------- Collaboration revenue from Schering AG $ 4,931 $ - $ 16,498 $ - Operating expenses: Research and development 10,281 7,978 29,640 13,971 General and administrative 1,786 1,064 5,442 4,102 ---------- --------- ---------- ---------- Total operating expenses 12,067 9,042 35,082 18,073 ---------- --------- ---------- ---------- Operating loss (7,136) (9,042) (18,584) (18,073) Other income, net 843 134 2,045 299 ---------- --------- ---------- ---------- Net loss $ (6,293) $ (8,908) $ (16,539) $ (17,774) ========== ========= ========== ========== Net loss per share: Basic $ (0.17) $ (0.37) $ (0.49) $ (0.80) Diluted $ (0.17) $ (0.37) $ (0.49) $ (0.80) Shares used in calculation: Basic 36,794 23,832 34,036 22,187 Diluted 36,794 23,832 34,036 22,187 *T -0- *T Condensed Balance Sheets (in thousands) September 30, December 31, 2006 2005 ------------- ------------- (unaudited) Assets: Cash, cash equivalents, and marketable securities $ 60,876 $ 49,318 Accounts receivable from Schering AG 9,672 7,057 Other current assets 239 342 Property and equipment, net 1,240 1,006 Long-term receivable from Schering AG - 87 Other assets 80 104 ------------- ------------- Total assets $ 72,107 $ 57,914 ============= ============= Liabilities and stockholders' equity: Accounts payable $ 393 $ 1,260 Accrued expenses 9,097 4,408 Accounts payable with Schering AG 866 - Deferred revenue from Schering AG 12,473 16,633 Lease obligations 22 42 Other liabilities 75 307 Stockholders' equity 49,181 35,264 ------------- ------------- Total liabilities and stockholders' equity $ 72,107 $ 57,914 ============= ============= *T