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Emisphere Technologies, Inc. Announces Financial Results for Quarter Ended September 30, 2012



Emisphere Technologies, Inc. Announces Financial Results for Quarter Ended
September 30, 2012

Conference Call/Webcast to be Held Tuesday, November 13, 2012 at 10:00 AM EST

CEDAR KNOLLS, N.J., Nov. 13, 2012 (GLOBE NEWSWIRE) -- Emisphere Technologies,
Inc. (OTCBB:EMIS) (the "Company") today announced its financial results for
the quarter and year to date ended September 30, 2012. The Company will host a
conference call this morning at 10:00 AM EST to discuss these results.

The live webcast of the conference call can be accessed through the company's
web site at: www.emisphere.com. The live conference call dial-in number is:
1-877-303-9483 (United States and Canada) or 1-760-666-3584 (International).
In addition, an archive of the webcast can be accessed through the same link
and an audio replay of the call will be available beginning at 1:00 PM EST on
November 13, 2012 through 11:59 PM EST on November 20, 2012 by calling
1-800-585-8367 (United States and Canada) or 1-404-537-3406 (International).
The conference replay PIN is 70175224.

THIRD QUARTER FINANCIAL RESULTS

The Company reported a net loss of $4.6 million, or $0.08 per basic and
diluted share, for the three months ended September 30, 2012, compared to a
net loss of $17.6 million, or $0.29 per basic and diluted share for same
period last year.

Operating expenses and loss for the three months ended September 30, 2012 were
$1.5 million, a $57,000, or 3.7% decrease, compared to the same period last
year. Total operating expenses include research and development costs of $0.4
million, general and administrative expenses of $1.1 million, compared to
research and development costs of $0.4 million, general and administrative
expenses of $1.0 million and depreciation and amortization expenses of $0.1
million, for the same period last year. Other non-operating loss for the three
months ended September 30, 2012 was $3.1 million, compared to $16.1 million,
for the same period last year, a decrease of $13.0 million, due primarily to a
$13.3 million decrease in the change in fair value of derivative instruments,
offset by a $0.3 million increase in interest expense.

YEAR TO DATE FINANCIAL RESULTS

The Company reported a net loss of $2.6 million, or $0.04 per basic and
diluted share for the nine months ended September 30, 2012, compared to a net
loss of $4.8 million, or $0.09 per basic and diluted share for the nine months
ended September 30, 2011.

Operating expenses and loss for the nine months ended September 30, 2012 was
$4.7 million, compared to $5.8 million for the same period last year, a
decrease of approximately $1.1 million, or 19.7%. Total operating expenses
include research and development costs of $1.1 million and general and
administrative expenses of $3.6 million, compared to $1.5 million and $4.1
million respectively, for the same period last year. Depreciation and
amortization expense declined $0.2 million from the same period last year.

Other non-operating income for the nine months ended September 30, 2012 was
$2.1 million, compared to other non-operating income of $1.0 million for the
same period last year, an increase of $1.1 million, due primarily to a $1.5
million increase in other income, and $0.6 million increase from the change in
fair value of derivative instruments offset by a $1.0 million increase in
interest expense.

LIQUIDITY

As of September 30, 2012, the Company had approximately $0.2 million in cash
and cash equivalents, a net decrease of approximately $2.8 million from
December 31, 2011, approximately $35.5 million in working capital deficiency,
a stockholders' deficit of approximately $66.9 million and an accumulated
deficit of approximately $468.4 million. Our operating loss for the three
months and nine months ended September 30, 2012 was approximately $1.5 million
and $4.7 million, respectively. The Company reduced its operating expenditures
by approximately 19%, year to date, to improve operating efficiency and extend
its cash runway.

As of September 27, 2012, the Company is in default under the terms of the 11%
senior secured convertible notes (the "MHR Convertible Notes") issued to MHR
Fund Management LLC (together with its affiliates, "MHR"). The default is the
result of the Company's failure to pay MHR approximately $30.6 million in
principal and interest due and payable on September 26, 2012 under the terms
of the MHR Convertible Notes. On October 4, 2012, the Company received notice
from MHR that, as a result of the payment default described above, the default
interest rate of 13% per annum will apply with respect to the MHR Convertible
Notes, effective as of September 27, 2012.

The MHR Convertible Notes are secured by a first priority lien in favor of MHR
on substantially all of our assets. The Company continues to be in default
under the terms of the MHR Convertible Notes and, as a result of such default,
MHR has the ability at any time to foreclose on substantially all of the
Company's assets. To date, MHR has not demanded payment under the MHR
Convertible Notes or exercised its rights to foreclose on our assets as a
result of the default, and has indicated that it is prepared to continue
discussions with the Company regarding proposals relating to the default while
reserving all of its rights under the terms of the MHR Convertible Notes.
There can be no assurance as to the outcome of such discussions.

As of September 27, 2012, the Company is also in default under the terms of
certain non-interest bearing promissory notes in the aggregate principal
amount of $600,000 issued to MHR on June 8, 2010 (the "2010 MHR Notes"). The
2010 MHR Notes were originally due and payable on June 8, 2012, but this
maturity date was extended to September 26, 2012 by agreement with MHR. The
default is the result of the Company's failure to pay to MHR $600,000 in
principal due and payable on September 26, 2012 under the terms of the 2010
MHR Notes.  As with the MHR Convertible Notes discussed above, MHR has not
demanded payment under the 2010 MHR Notes, and has indicated to the Company
that it is prepared to continue discussions with the Company regarding
proposals relating to the 2010 MHR Notes and the Company's default thereunder
while reserving all of its rights under the 2010 MHR Notes.  There can be no
assurance as to the outcome of such discussions.

On October 17, 2012, the Company issued a promissory note (the "Bridge Note")
to MHR in the principal amount of $1,400,000 to be advanced by MHR to the
Company pursuant to the terms thereof. That amount is sufficient to support
operations through approximately December 15, 2012.  The Bridge Note is
secured by a first priority lien on substantially all of our assets, is
payable on demand no earlier than January 17, 2013, and may be accelerated
upon the occurrence of certain events described therein.

As described above, the funds provided by MHR pursuant to the Bridge Note are
sufficient to support the Company's operations through December 15, 2012. Our
failure to raise capital prior to December 15, 2012 will adversely affect our
business, financial condition and results of operations, and could force us to
reduce or cease our operations. These conditions raise substantial doubt about
our ability to continue as a going concern. Consequently, the audit reports
prepared by our independent registered public accounting firm relating to our
financial statements for the years ended December 31, 2011, 2010 and 2009
include an explanatory paragraph expressing the substantial doubt about our
ability to continue as a going concern.

If the Company fails to raise additional capital or obtain substantial cash
inflows from existing or new partners prior to December 15, 2012, or if MHR
demands payment under the terms of the MHR Convertible Notes or the 2010 MHR
Notes, or exercises its rights thereunder, the Company could be forced to
cease operations. The Company is pursuing several courses of action to address
its deficiency in capital resources including discussions with MHR,
commercialization of B12, leveraging existing partnerships, and capital
markets financings.

PRODUCT AND BUSINESS DEVELOPMENTS

Through the third quarter of 2012, the Company has continued to face
formidable challenges but has maintained its focus on efforts to apply the
Eligen^® Technology and realize its value by developing profitable commercial
applications. Specifically, the Eligen^® Technology has been reevaluated and
our corporate strategy refocused on commercializing it as quickly as possible,
building high-value partnerships and reprioritizing the product pipeline.
Spending was redirected and aggressive cost control initiatives were
implemented.

On September 13, 2012, the Company took two important steps to improve its
strategic position: it hired Mr. Alan L. Rubino as President and Chief
Executive Officer, and appointed Mr. Timothy G. Rothwell as Chairman of the
Board of Directors. Mr. Rubino and Mr. Rothwell form the core of a new
leadership team that will focus on commercializing the Company's Eligen^® Oral
B12 product.  These appointments support the Company's decision to pursue a
new course to reposition Emisphere into a viable commercial-stage entity,
anchored by the Eligen^® Oral B12 product. As it transitions to this strategy,
the Company remains dedicated to further realizing the full potential and
commercial value of its platform Eligen^® Technology. To that end, we will
continue to work closely with existing partners and will also expand our
efforts to attract new delivery system and product development / licensing
partnerships as well. We believe that Emisphere's new business strategy will
present opportunities for growth and value creation for the Company and its
shareholders.

Emisphere's pipeline includes a broad range of product candidates in different
stages of development.

  * Novo Nordisk A/S ("Novo Nordisk") is using Emisphere's Eligen^® Technology
    to develop and commercialize oral formulations of Novo Nordisk's insulins
    and GLP-1 receptor agonists, with a potential GLP-1 drug currently
    undergoing Phase I clinical trials. The first Phase I trial investigated
    the safety, tolerability and bioavailability in healthy volunteers and was
    completed in May 2010. Novo Nordisk also conducted a multiple-dose Phase I
    trial to investigate the safety, tolerability, pharmacokinetics and
    pharmacodynamics in healthy male subjects which was completed in July
    2011.
     
  * The Company has developed an oral formulation of Eligen^® B12 (1000 mcg)
    for use by B12 deficient individuals. On August 5, 2011 we received notice
    from the U. S. Patent Office that the U.S. patent application directed to
    the oral Eligen^® B12 formulation was allowed. This new patent provides
    intellectual property protection for Eligen^® B12 in the U.S. through
    approximately 2029. Currently, we are evaluating the results of our
    clinical trials and market research and exploring alternative development
    and commercialization options with the purpose of maximizing the
    commercial and health benefits potential of our Eligen^® B12 asset.

The Company is continuing with a number of pre-clinical programs in
collaboration with other companies, as well as projects on its own, using the
Eligen^® Technology to improve the oral absorption of selected molecules.

About Emisphere Technologies, Inc.

Emisphere is a biopharmaceutical company that focuses on a unique and improved
delivery of pharmaceutical compounds, medical foods and dietary supplements
using its Eligen^® Technology. These molecules and compounds could be
currently available or in development. Such molecules are usually delivered by
injection; in many cases, their benefits are limited due to poor
bioavailability, slow on-set of action or variable absorption. The Eligen^®
Technology can be applied to the oral route of administration as well other
delivery pathways, such as buccal, rectal, inhalation, intra-vaginal or
transdermal. The Company's website is: www.emisphere.com.

Safe Harbor Statement Regarding Forward-looking Statements

The statements in this release and oral statements made by representatives of
Emisphere relating to matters that are not historical facts (including without
limitation those regarding the timing or potential outcomes of research
collaborations or clinical trials, any market that might develop for any of
Emisphere's product candidates, the sufficiency of Emisphere's cash and other
capital resources and its ability to obtain additional financing to meet its
capital needs) are forward-looking statements that involve risks and
uncertainties, including, but not limited to, the likelihood that future
research will prove successful, the likelihood that any product in the
research pipeline will receive regulatory approval in the United States or
abroad, the ability of Emisphere and/or its partners to develop, manufacture
and commercialize products using Emisphere's drug delivery technology,
Emisphere's ability to fund such efforts with or without partners, and other
risks and uncertainties detailed in Emisphere's filings with the Securities
and Exchange Commission, including those factors discussed under the caption
"Risk Factors" in Emisphere's Annual Report on Form 10-K for the fiscal year
ended December 31, 2011 (file no. 000-17758) filed on March 21, 2012, the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012,
filed on August 7, 2012, and the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 2012, to be filed on or about the date hereof.

                                                    
EMISPHERE TECHNOLOGIES, INC.
CONDENSED STATEMENT OF OPERATIONS
For the three and nine months ended September 30, 2012 and 2011
(in thousands, except share and per share data)
(unaudited)
                                                    
                       For the three months ended   For the nine months ended 
                       September 30,                September 30, 
                       2012           2011          2012          2011 
Net Sales              $ 0            $ 0           $ 0           $ 0
Costs and expenses:                                               
Research and           354            424           1,095         1,516
development
General and            1,113          1,037         3,543         4,080
administrative
Depreciation and        7              70            23            210
amortization
Total costs and         1,474          1,531         4,661         5,806
expenses
Operating loss          (1,474)        (1,531)       (4,661)       (5,806)
Other non-operating                                               
income (expense):
Other income           1              4             1,567         73
Change in fair value
of derivative                                                     
instruments
Related party          (906)          (9,700)       5,854         6,345
Other                  (431)          (4,931)       (160)         (1,270)
Interest expense                                                  
Related party          (1,777)        (1,448)       (5,156)       (4,090)
Other                  0              0             0             (16)
Total other
non-operating income    (3113)         16,075        2,105         1,042
(expense)
Net loss               $ (4,587)      $ 17,606      $ (2,556)     $ (4,764)
Net loss per share,    $ (0.08)       $ (0.29)      $ (0.04)      $ (0.09)
basic
Net loss per share,    $ (0.08)       $ (0.29)      $ (0.04)      $ (0.09)
diluted
Weighted average
shares outstanding,    60,687,478     60,122,747    60,687,478    54,811,423
basic and diluted

                                                              
 
EMISPHERE TECHNOLOGIES, INC.
 
CONDENSED BALANCE SHEETS
September 30, 2012 and December 31, 2011
(in thousands, except share and per share data)
                                                              
                                          September 30, 2012 December 31, 2011
Assets:                                   (unaudited)
                                           
Current assets:                                               
Cash and cash equivalents                 $ 229              $ 3,069
Accounts receivable, net                   3                  22
Inventories                                258                258
Prepaid expenses and other current assets  535                581
Total current assets                       1,025              3,930
Equipment and leasehold improvements, net  22                 44
Restricted cash                            247                247
Total assets                              $ 1,294            $ 4,221
Liabilities and Stockholders' Deficit:                        
Current liabilities                                           
Accounts payable and accrued expenses     $ 839              $ 894
Notes payable related party, including
accrued interest and net of related        31,172             26,016
discount
Derivative instruments:                                       
Related party                              3,517              9,371
Others                                     988                828
Other current liabilities                  16                 42
Total current liabilities                  36,532             37,151
Deferred revenue                           31,612             31,593
Deferred lease liability and other         0                  4
liabilities
Total liabilities                          68,144             68,748
Stockholders' deficit:                                        
Preferred stock, $.01 par value;
authorized 2,000,000 shares as of
September 30, 2012 and 1,000,000           0                  0
authorized as of December 31, 2011; none
issued and outstanding
Common stock, $.01 par value; authorized
200,000,000 shares as of September 30,
2012 and 100,000,000 authorized as of      610                610
December 31, 2011; issued 60,977,210
shares (60,687,478 outstanding) as of
September 30, 2012 and December 31, 2011
Additional paid-in-capital                 404,940            404,707
Accumulated deficit                        (468,448)          (465,892)
Common stock held in treasury, at cost;    (3,952)            (3,952)
289,732 shares
Total stockholders' deficit                (66,850)           (64,527)
Total liabilities and stockholders'       $ 1,294            $ 4,221
deficit
                                                              
                                                              

CONTACT: Alan L. Rubino, CEO
         973.532.8000 or arubino@emisphere.com
        
         Michael R. Garone, CFO
         973.532.8005 or mgarone@emisphere.com
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