Exhibit 99.1
ACCESS NEWS
Contact: Company Contact: Investor Relations
Kerry P. Gray Steve Laird
President & CEO Genesis Select
(214) 905-5100 (203) 341-0214
Donald C. Weinberger
Wolfe Axelrod
(212) 370-4500
ACCESS PHARMACEUTICALS, INC. ANNOUNCES
THIRD QUARTER FINANCIAL RESULTS
--------------------------------------
DALLAS, TEXAS, November 16, 2004, ACCESS
PHARMACEUTICALS, INC. (AMEX: AKC) reported its
results for the third quarter and nine months ended
September 30, 2004. The Company reported a net loss
of $2,428,000, or $0.16 per share, for the third
quarter, as compared to net loss of $2,206,000, or
$0.17 per share, for the corresponding quarter in
2003. The net loss for the nine month period ended
September 30, 2004 was $7,332,000, or $0.49 per
share, compared with a net loss of $4,301,000, or
$0.32 per share for the corresponding period in
2003. The results in 2003 include miscellaneous
income of $2.3 million resulting from the settlement
of a dispute related to the supply of Aphthasol(R).
Revenue in the third quarter of 2004 was $185,000
compared to $11,000 in the same quarter of 2003,
reflecting an increase in product sales ($106,000),
licensing revenues ($45,000) and royalties
($23,000). Aphthasol(R) product sales recommenced in
September which accounts for the sales increase. For
the nine month period, revenue decreased to $273,000
compared with $1,087,000 in the same period in 2003.
Revenues decreased due to reduced licensing revenues
($440,000), which reflects the receipt in the 2003
period of milestone payments for Zindaclin(R)
associated with product launches, and reduced
product sales ($426,000), which was the result of
the Aphthasol(R) supply interruption.
Operating expenses in the third quarter of 2004 were
$2,414,000, an increase of $460,000 compared with
2003. This increase was due mainly to increased
research and development expense of $152,000,
reflecting
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Access Pharmaceuticals, Inc.
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production and testing costs for Aphthasol(R) and
startup production costs associated with OraDisc(TM)
A. General and administrative expense in the third
quarter of 2004 increased $287,000 principally due
to increased professional expenses associated with
Sarbanes Oxley compliance, litigation expenses and
business development consulting expense. Operating
expenses for the first nine months of 2004 decreased
$176,000 to $6,742,000. Decreased expenditures on
research and development ($717,000) and cost of
product sales ($146,000) were offset by increased
depreciation and amortization ($41,000) resulting
from the acquisition of additional capital assets
and general and administration costs ($646,000). The
reduction in 2004 research and development expense
reflects lower OraDisc(TM) A clinical development
costs ($824,000) and the completion of one of our
polymer platinate clinical trials ($531,000). These
decreases are partially offset by product
development costs for Aphthasol and OraDisc(TM) A
($335,000), the expansion of our scientific
organization ($186,000) and the increased
development activities at our Australian operations
($161,000). The increase in general and
administration costs reflects the increase in
business development expense ($88,000), patent costs
($46,000), investor relations expense ($34,000),
non-cash warrant expense ($155,000), legal and
accounting fees, in part associated with Sarbanes-
Oxley ($84,000), and an increase in litigation
expense ($168,000).
Other income (expense) for the first nine months of
2004 was a loss of $863,000 compared with income of
$1,530,000 in the same period in 2003. As previously
reported, in the second quarter of 2003, we recorded
a $2.3 million one-time non-recurring item in Other
Income. Also contributing to the loss in 2004 was a
non-cash expense due to the write-down of an
investment in a publicly traded stock associated
with a product development agreement ($102,000).
Kerry P. Gray, President and CEO of Access sated,
"In addition to the reported revenues of $185,000
the company received a milestone payment in the
third-quarter of $629,000 associated with European
amlexanox licenses. General and administrative costs
continue to exceed plan principally due to Sarbanes
Oxley compliance, litigation expenses and business
development expenses. We continue to closely control
our operating expenses and compensate for the
unforeseen increase in general and administrative
expense with total operating expense being below
prior year."
There have been numerous important achievements
since our last financial report, including:
- - Receipt of FDA approval of OraDisc(TM) A.
- - The publishing of positive Phase I clinical trials
results for AP5346.
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Access Pharmaceuticals, Inc.
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- - Generation of preclinical data for AP5346 in a
platinum resistant model showing superiority to both
cisplatin and oxaliplatin.
- - Development of exciting preclinical data with
numerous chemotherapeutics demonstrating the
potential to significantly enhance the polymer
therapeutics approach in cancer therapy through
optimization of the formulation parameters.
- - The advancement towards commercialization of our
lead OraDisc(TM) products and the development of
additional product candidates in major market
segments utilizing this technology.
- - Successful conclusion of all outstanding litigation.
Mr. Gray continued, "We are very pleased with the
recent achievements and believe that this has placed
us in a favorable position to achieve our near-term
objectives including near-term positive cash flow.
The positive polymer therapeutics data is an
important step towards advancing our next product
candidate into clinical development which is planned
for late 2005. In addition, with the approval of
OraDisc(TM) A, we are now focused on the
commercialization of both OraDisc(TM) A and B, and
the development of additional products utilizing
this technology to compete in large markets
including tooth whitening and breath freshening."
Access Pharmaceuticals, Inc. is an emerging
pharmaceutical company focused on developing both
novel low development risk product candidates and
technologies with longer-term major product
opportunities. Access markets Aphthasol(R), the only
FDA-approved product for the treatment of canker
sores, and is developing products for other oral
indications. Access is also developing unique
polymer platinates for use in the treatment of
cancer and has an extensive portfolio of advanced
drug delivery technologies including vitamin
mediated targeted delivery, oral delivery, and
nanoparticle aggregates.
This press release contains certain statements that
are forward-looking within the meaning of Section
27a of the Securities Act of 1933, as amended, and
that involve risks and uncertainties, including but
not limited to statements made relating to the
result of our polymer platinate program, the results
of preclinical and clinical studies for our polymer
platinate products, projected milestone payments,
the OraDisc(TM) program including manufacturing,
marketing and sales of the product, and our ability
to achieve milestones and near-term positive cash
flow. These statements are subject to numerous
risks, including but not limited to the
uncertainties associated with research and
development activities, clinical trials, our ability
to raise capital, the timing of and our ability to
achieve regulatory approvals, dependence on others
to market our licensed products, collaborations,
future cash flow, the timing and receipt of
licensing and milestone revenues,
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projected future revenue growth and our ability to
generate near term revenues, the future success of
the Company's marketed products Aphthasol(R) and
products in development including polymer platinate
and OraDisc(R), our ability to develop products from
our platform technologies, our ability to
manufacture amlexanox products in commercial
quantities, our sales projections and the sales
projections of our licensing partners, our ability
to achieve licensing milestones and other risks
detailed in the Company's Annual Report on Form 10-K
for the year ended December 31, 2003, and other
reports filed by us with the Securities and Exchange
Commission.
Access Pharmaceuticals, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------------- -------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Revenues
Licensing revenues $ 49,000 $ 4,000 $ 97,000 $ 537,000
Product sales 106,000 - 106,000 532,000
Royalty income 30,000 7,000 70,000 18,000
------------ ------------ ------------ ------------
Total revenues 185,000 11,000 273,000 1,087,000
Expenses
Research and development 1,406,000 1,254,000 3,831,000 4,548,000
Cost of product sales 40,000 30,000 97,000 243,000
General and administrative 799,000 512,000 2,325,000 1,679,000
Depreciation and amortization 169,000 158,000 489,000 448,000
------------ ------------ ------------ ------------
Total expenses 2,414,000 1,954,000 6,742,000 6,918,000
------------ ------------ ------------ ------------
Loss from operations (2,229,000) (1,943,000) (6,469,000) (5,813,000)
Other income (expense)
Interest and miscellaneous
income 133,000 54,000 201,000 2,486,000
Interest and other expense (332,000) (317,000) (1,064,000) (956,000)
------------ ------------ ------------ ------------
(199,000) (263,000) (863,000) 1,530,000
------------ ------------ ------------ ------------
Net income (loss) $(2,428,000) $(2,206,000) $(7,332,000) $(4,301,000)
============ ============ ============ ============
Basic and diluted income (loss)
per common share $(0.16) $(0.17) $(0.49) $(0.32)
============ ============ ============ ============
Weighted average basic and diluted
common shares outstanding 15,469,071 13,287,563 15,041,216 13,235,725
============ ============ ============ ============
BALANCE SHEET DATA
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September 30, 2004 December 31, 2003
-------------- --------------
(unaudited)
Cash and cash equivalents $ 4,491,000 $ 727,000
Short-term investments and
certificates of deposit 535,000 1,860,000
Restricted cash 1,023,000 649,000
Accounts receivable and inventory 972,000 1,257,000
Total assets 13,663,000 11,811,000
Convertible notes and other obligations 14,072,000 14,361,000
Accumulated deficit (61,562,000) (54,227,000)
Total stockholders' deficit (3,799,000) (5,825,000)
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