Exhibit 99.1 ACCESS NEWS Contact: Company Contact: Investor Relations Stephen B. Thompson Donald C. Weinberger Vice President & CFO Wolfe Axelrod Weinberger & Associates (214) 905-5100 (212) 370-4500 ACCESS PHARMACEUTICALS, INC. ANNOUNCES SECOND QUARTER FINANCIAL RESULTS DALLAS, TEXAS, August 10, 2005, ACCESS PHARMACEUTICALS, INC. (AMEX: AKC) today reported results for the second quarter ended June 30, 2005. The Company reported a net loss of $3,786,000, or $0.24 per share, for the second quarter, as compared to net loss of $2,553,000, or $0.17 per share, for the corresponding quarter in 2004. The net loss for the six month period ended June 30, 2005 was $6,208,000, or $0.40 per share, compared with a net loss of $4,904,000, or $0.33 per share for the corresponding period in 2004. Revenue in the second quarter of 2005 was $249,000 compared to $68,000 in the same quarter of 2004, reflecting an increase in product sales ($201,000) offset by a decrease in licensing revenues ($20,000). For the six month period, revenue increased to $404,000 compared with $88,000 in the same period in 2004, reflecting an increase in product sales ($318,000) and royalty income ($11,000) offset by a decrease in licensing revenues ($13,000). Aphthasol(R) product sales recommenced in September 2004 which accounts for the sales increase in both comparison periods as there were no sales in 2004. There were licensing contracts signed and recognized in the second quarter 2004 that were not recurring in 2005 which accounts for the decrease in licensing revenues in both periods of 2005. -More- Access Pharmaceuticals, Inc. Page 2 Operating expenses in the second quarter of 2005 were $3,600,000, an increase of $1,356,000 compared with 2004. This increase was due mainly to increased general and administrative expense ($1,044,000), research and development expense ($159,000) and cost of product sales ($147,000). The increase in general and administrative expenses was mainly due to the separation expenses with our former CEO relating to his employment and separation agreements ($839,000), royalty license expense ($150,000) and patent expenses ($22,000). Research and development expenses increased mainly due to OraDisc(TM) manufacturing pre-production costs ($132,000) and product and clinical costs for AP5346 ($86,000) offset by lower salary and related costs due to staff reductions ($52,000). Product sales costs increased due to increased Aphthasol(R) sales in 2005. Operating expenses for the first six months of 2005 increased $1,546,000 to $5,874,000. Increased expenditures on general and administrative ($979,000), research and development ($334,000) and cost of product sales ($223,000). The increase in general and administrative expenses was mainly due to the separation expenses with our former CEO ($839,000) and royalty license expense ($150,000). Research and development expenses increased mainly due to product and clinical costs for AP5346 ($197,000) and manufacturing OraDisc(TM) pre-production costs ($113,000). Product sales costs increased due to increased Aphthasol(R) sales in 2005. Other income (expense) for the second quarter of 2005 was a loss of $435,000 compared with a loss of $377,000 in the same quarter in 2004. Other income (expense) for the first six months of 2005 was a loss of $738,000 compared with a loss of $664,000 in the same period in 2004. The increased loss was due to additional interest and amortization of debt costs due to the Secured Convertible Notes. Major events since the beginning of the last quarter include: - - Ongoing negotiations with holders of convertible notes due September 13, 2005. - - Ongoing negotiations with parties to sell certain assets to provide additional liquidity. -More- Access Pharmaceuticals, Inc. Page 3 - - The hiring of our Acting CEO, Rosemary Mazanet, and the resignation of our former CEO. - - Meeting of our Clinical Advisory Board to discuss AP5346. - - Closing our Australia laboratory. - - Significant staff reductions in research and development. Commenting on the results, spokesperson Stephen B. Thompson, Vice President & CFO of Access, stated, "We currently have liquid assets to allow us to continue operations through August 31, 2005. Operating expenses were higher than with our 2005 plan due to the separation expenses with our former CEO and a one-time royalty license expense. During the remainder of this year we expect expenses to decrease as a result of staff reductions in August 2005, the closing of our Australia laboratory and reduction in non-critical project costs. We have negotiations underway with holders of our Convertible Notes which are due September 13, 2005. We are working to maintain the Company's priority projects and protect the Company's assets. We anticipate a conference call in the next few weeks to announce new business developments." 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) 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. -More- Access Pharmaceuticals, Inc. Page 4 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 our current negotiations to sell certain assets and to restructure our Convertible Notes due September 13, 2005, our expected reduction in expenses and the maintenance of our projects and protection of our assets. These statements are subject to numerous risks, including but not limited to the uncertainties associated with our ability to raise funds to continue our operations, our ability to sell assets, our ability to restructure our Convertible Notes, 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, 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(TM), 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, our ability to repay our outstanding debt obligations and other risks detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2004, Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 and other reports filed by us with the Securities and Exchange Commission. -More- Access Pharmaceuticals, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three months ended Six months ended June 30, June 30, ------------------------- ------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Revenues Licensing revenues $ 24,000 $ 44,000 $ 35,000 $ 48,000 Product sales 201,000 - 318,000 - Royalty income 24,000 24,000 51,000 40,000 ------------ ------------ ------------ ------------ Total revenues 249,000 68,000 404,000 88,000 Expenses Research and development 1,440,000 1,281,000 2,759,000 2,425,000 Cost of product sales 178,000 31,000 280,000 57,000 General and administrative 1,816,000 772,000 2,505,000 1,526,000 Depreciation and amortization 166,000 160,000 330,000 320,000 ------------ ------------ ------------ ------------ Total expenses 3,600,000 2,244,000 5,874,000 4,328,000 ------------ ------------ ------------ ------------ Loss from operations (3,351,000) (2,176,000) (5,470,000) (4,240,000) Other income (expense) Interest and miscellaneous income 12,000 35,000 22,000 68,000 Interest and other expense (447,000) (412,000) (760,000) (732,000) ------------ ------------ ------------ ------------ (435,000) (377,000) (738,000) (664,000) ------------ ------------ ------------ ------------ Net loss $(3,786,000) $(2,553,000) $(6,208,000) $(4,904,000) ============ ============ ============ ============ Basic and diluted loss per common share $(0.24) $(0.17) $(0.40) $(0.33) ============ ============ ============ ============ Weighted average basic and diluted common shares outstanding 15,724,710 15,449,603 15,626,379 14,824,938 ============ ============ ============ ============
BALANCE SHEET DATA ------------------
June 30, 2005 December 31, 2004 (unaudited) -------------- -------------- Cash and cash equivalents $ 784,000 $ 1,775,000 Short-term investments and certificates of deposit 504,000 486,000 Restricted cash 169,000 1,285,000 Accounts receivable and inventory 871,000 916,000 Total assets 9,228,000 11,090,000 Convertible notes and other obligations 16,476,000 14,110,000 Accumulated deficit (70,673,000) (64,465,000) Total stockholders' deficit (12,285,000) (6,661,000)
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