UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 18, 2011
CORTEX PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 1-16467 | 33-0303583 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S Employer Identification No.) | ||
15241 Barranca Parkway Irvine, California |
92618 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (949) 727-3157
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
On March 18, 2011, Cortex Pharmaceuticals, Inc. issued a press release to report its financial results. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
All of the foregoing information, including Exhibit 99.1, is being furnished under Item 2.02 and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. | Financial Statements and Exhibits. |
(a) | Financial Statements of Businesses Acquired: None. |
(b) | Pro Forma Financial Information: None. |
(c) | Shell Company Transactions: None. |
(d) | Exhibits. |
Exhibit Number |
Description | |
99.1 | Press release of Cortex Pharmaceuticals, Inc. dated March 18, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CORTEX PHARMACEUTICALS, INC. | ||||
Date: March 18, 2011 | By: | /s/ Maria S. Messinger | ||
Maria S. Messinger | ||||
Vice President, Chief Financial Officer and Corporate Secretary |
EXHIBIT INDEX
Number |
Description |
Sequential Page No. | ||
99.1 | Press release of Cortex Pharmaceuticals, Inc. dated March 18, 2011. | 5 |
Exhibit 99.1
PRESS RELEASE
Company Contact: | Investor Contact: | |
Mark A. Varney, Ph.D. | Erika Moran/ Dian Griesel, Ph.D. | |
President and CEO | Media Contact: | |
Cortex Pharmaceuticals, Inc. | Janet Vasquez | |
949.727.3157 | The Investor Relations Group | |
212.825.3210 |
CORTEX REPORTS FOURTH QUARTER AND
YEAR END OPERATING RESULTS
IRVINE, CA (March 18, 2011) Cortex Pharmaceuticals, Inc. (OTCBB (CORX)) reported a net loss applicable to common stock of $984,000, or $0.01 per share for the quarter ended December 31, 2010 compared with a net loss of $1,599,000, or $0.02 per share for the corresponding prior year period.
For the fiscal year ended December 31, 2010, Cortex reported net income applicable to common stock of $1,629,000, or $0.02 per share compared to a net loss of $10,788,000, or $0.19 per share for the corresponding prior year period.
Operating results for the quarter ended December 31, 2010 reflect an increase in grant revenues compared to the corresponding prior year period, along with a decrease in clinical development expenses and personnel-related expenses for the Companys research staff.
For the year ended December 31, 2010, operating results reflect revenues from the Companys earlier transaction with Biovail Laboratories International SRL (Biovail). As announced, in March 2010 Cortex sold its rights to CX717 and certain other AMPAKINE® compounds to Biovail as a potential treatment for respiratory depression and vaso-occlusive crises associated with sickle cell disease, an orphan drug indication. As a result of the transaction, Cortex received $10,000,000 from Biovail during 2010.
Results for the year ended December 31, 2010 also reflect increased grant revenues, including an award from The Michael J. Fox Foundation for Parkinsons Research. The grant will support testing of Cortexs AMPAKINE compounds for their ability to restore brain function in animal models of Parkinsons disease.
During late 2010 Cortex received an additional grant under a program created by Congress in the Patient Protection and Affordable Care Act of 2010. The grant reimbursed certain qualifying research expenses incurred by Cortex for its AMPAKINE CX1739.
Total operating expenses of approximately $8,292,000 for the year ended December 31, 2010 decreased only slightly from those for the prior year, due mostly to the timing of clinical development expenses for AMPAKINE CX1739, as partially offset by increased administrative expenses incurred in connection with the transaction with Biovail.
Interest expense for the year ended December 31, 2010 includes non-cash interest charges related to the June 2010 conversion of the promissory note issued to Samyang Optics Co., Ltd. (Samyang) of Korea. As reported earlier, the convertible note was issued in connection with the Companys $1,500,000 private placement to Samyang in January 2010.
For the year ended December 31, 2009, the net loss applicable to common stock includes non-cash charges of approximately $2,347,000, or $0.04 per share, related to the beneficial conversion feature of preferred stock issued by the Company in April 2009 and July 2009.
Cortex is continuing its discussions related to strategic alternatives such as licensing, partnering and M&A opportunities. However, given that there can be no assurance that a transaction will be finalized from these discussions, the Companys Form 10-K for the year ended December 31, 2010 will include a going concern qualification from its independent auditors.
Recent Business Highlights
| Announced top-line results from an exploratory clinical study with AMPAKINE CX1739 in subjects with sleep apnea. The study demonstrated that selected oxygen saturation parameters were improved and some were statistically improved by a single dose of CX1739, but the interpretation of these results was complicated by a reduced sleep time during the night following drug treatment. Cortex believes the results warrant undertaking a larger study to test the response of sleep apnea patients to CX1739, particularly those patients with central or mixed sleep apnea. |
| Announced notification by Servier, Frances largest privately held pharmaceutical company, of their intent to move forward into Phase I clinical studies with the jointly-discovered High Impact AMPAKINE S47445 (CX1632). The High Impact AMPAKINE technology represents a potentially disease-modifying approach to treat Alzheimers disease and other memory and cognitive impairments associated with a range of neurodegenerative diseases, due to the ability of the compounds to stimulate growth factors within the brain. |
| Regained worldwide rights to develop and commercialize AMPAKINE compounds for the treatment of schizophrenia and depression. |
| Obtained exclusive worldwide rights from the University of California for the combination of AMPAKINE and mGluR5 compounds for the treatment of various conditions. The broad method-of-use patent application covers the combined use of AMPAKINE compounds and metabotropic glutamate receptor type 5 (mGluR5) antagonists for the treatment of Fragile X syndrome, the most common genetically proven cause of autism, and for the treatment of Parkinsons disease, Huntingtons disease and other neurodegenerative disorders. |
| Received a grant from The Michael J. Fox Foundation for Parkinsons Research to test selected compounds from the AMPAKINE platform for their ability to restore brain function in animal models of Parkinsons disease. |
As noted above, in March 2010 Cortex sold certain AMPAKINE compounds and their related intellectual property rights to Biovail for use in the field of respiratory depression and vaso-occlusive crises associated with sickle cell disease. Cortex received $10,000,000 from Biovail in connection with the agreement during 2010. In September 2010, Biovails parent corporation merged with Valeant Pharmaceuticals International (Valeant). Following the merger, Valeant and Biovail conducted a strategic and financial review of the product pipeline and as a result, in November 2010 Biovail announced its intent to exit from the respiratory depression project acquired from Cortex.
As recently reported, in March 2011 Cortex entered into an agreement to reacquire the compounds, patents and rights sold to Biovail in March 2010. The new agreement includes an upfront payment by Cortex of $200,000 and potential future payments of up to $15,150,000 based upon the achievement of certain development and NDA submission and approval milestones. Under the agreement, Biovail is also eligible to receive up to $15,000,000 based upon Cortexs net sales of an intravenous dosage form of an AMPAKINE compound for respiratory depression. In addition, at any time following the completion of Phase I clinical studies and prior to the end of Phase IIa clinical studies, Biovail retains an option to co-develop and co-market intravenous dosage forms of an AMPAKINE compound as a treatment for respiratory depression and vaso-occlusive crises associated with sickle cell disease.
Cortex Pharmaceuticals, Inc.
Cortex, located in Irvine, California, is a neuroscience company focused on novel drug therapies for treating psychiatric disorders, neurological diseases and sleep apnea. Cortex is pioneering a class of proprietary pharmaceuticals called AMPAKINE® compounds, which act to increase the strength of signals at connections between brain cells. The loss of these connections is thought to be responsible for memory and behavior problems in Alzheimers disease. Many psychiatric diseases, including schizophrenia, occur as a result of imbalances in the brains neurotransmitter system. These imbalances may be improved by using the AMPAKINE technology. For additional information regarding Cortex, please visit the Companys website at http://www.cortexpharm.com
Forward-Looking Statement
Note This press release contains forward-looking statements concerning the Companys research and development activities. Words such as believes, anticipates, plans, expects, indicates, will, intends, potential, suggests, assuming, designed and similar expressions are intended to identify forward-looking statements. These statements are based on the Companys current beliefs and expectations. The success of such activities depends on a number of factors, including the risks that the Companys proposed products may at any time be found to be unsafe or ineffective for any or all of their proposed indications; that patents may not issue from the Companys patent applications; that competitors may challenge or design around the Companys patents or develop competing technologies; that the Company may have insufficient resources to undertake proposed clinical studies and that preclinical or clinical studies may at any point be suspended or take substantially longer than anticipated to complete. As discussed in the Companys Securities and Exchange Commission filings, the Companys proposed products will require additional research, lengthy and costly preclinical and clinical testing and regulatory approval. AMPAKINE compounds are investigational drugs and have not been approved for the treatment of any disease. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this press release. The Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
(tables follow)
Cortex Pharmaceuticals, Inc.
Condensed Statements of Operations
(in thousands, except per share data)
Three months ended December 31, |
Fiscal year ended December 31, |
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Revenues |
$ | 281 | $ | | $ | 10,474 | $ | | ||||||||
Operating expenses: |
||||||||||||||||
Research and development |
392 | 588 | 3,739 | 4,598 | ||||||||||||
General and administrative |
875 | 886 | 4,553 | 3,737 | ||||||||||||
Total operating expenses |
1,267 | 1,474 | 8,292 | 8,335 | ||||||||||||
Income (loss) from operations |
(986 | ) | (1,474 | ) | 2,182 | (8,335 | ) | |||||||||
Interest income (expense), net |
2 | (1 | ) | (545 | ) | 17 | ||||||||||
Loss on sale of fixed assets |
| (124 | ) | (8 | ) | (123 | ) | |||||||||
Net income (loss) |
$ | (984 | ) | $ | (1,599 | ) | $ | 1,629 | $ | (8,441 | ) | |||||
Accretion of beneficial conversion feature related to 0% Series E Convertible Preferred Stock |
| | | (832 | ) | |||||||||||
Accretion of beneficial conversion feature related to Series F Convertible Preferred Stock |
| | | (1,515 | ) | |||||||||||
Net income (loss) applicable to common stock |
$ | (984 | ) | $ | (1,599 | ) | $ | 1,629 | $ | (10,788 | ) | |||||
Income (loss) per share: |
||||||||||||||||
Basic and diluted |
$ | (0.01 | ) | $ | (0.02 | ) | $ | 0.02 | $ | (0.19 | ) | |||||
Shares used in computing per share amounts |
||||||||||||||||
Basic |
78,858 | 68,413 | 73,678 | 55,783 | ||||||||||||
Diluted |
78,858 | 68,413 | 73,689 | 55,783 |
Cortex Pharmaceuticals, Inc.
Reconciliation of Reported Net Income Applicable to Common Stock
and Diluted Income per Share Attributable to Common Stock
(in thousands, except per share data)
For the Fiscal Year Ended December 31, 2010 | ||||||||||||
Income | Shares | Per-Share | ||||||||||
(Numerator) | (Denominator) | Amount | ||||||||||
Basic Earnings per Share: |
||||||||||||
Income applicable to common stock |
$ | 1,629 | 73,678 | $ | 0.02 | |||||||
Effect of Dilutive Securities: |
||||||||||||
Options to purchase common stock |
| 11 | ||||||||||
Diluted Earnings per Share: |
||||||||||||
Income applicable to common stock + assumed conversions |
$ | 1,629 | 73,689 | $ | 0.02 | |||||||
Cortex Pharmaceuticals, Inc.
Condensed Balance Sheets
(in thousands)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Assets: |
||||||||
Cash and cash equivalents |
$ | 1,037 | $ | 226 | ||||
Marketable securities |
1,993 | | ||||||
Restricted cash |
156 | | ||||||
Other current assets |
90 | 20 | ||||||
3,276 | 246 | |||||||
Furniture, equipment and leasehold improvements, net |
250 | 383 | ||||||
Other |
41 | 77 | ||||||
Total assets |
$ | 3,567 | $ | 706 | ||||
Liabilities and Stockholders Equity (Deficit): |
||||||||
Accounts payable and accrued expenses |
$ | 1,156 | $ | 2,223 | ||||
Deferred rent liability |
8 | 11 | ||||||
Stockholders equity (deficit) |
2,403 | (1,528 | ) | |||||
Total liabilities and stockholders equity (deficit) |
$ | 3,567 | $ | 706 | ||||
MORE INFORMATION AT WWW.CORTEXPHARM.COM
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