EX-99.1 3 h05823exv99w1.txt PRESS RELEASE DATED MAY 12, 2003 EXHIBIT 99.1 CONTACT: Joseph S. Podolski President & CEO (281) 719-3447 ZONAGEN REPORTS FIRST QUARTER FINANCIAL RESULTS The Woodlands, TX, May 12, 2003 - Zonagen, Inc. (Nasdaq:ZONA) today announced financial results for the three-month period ended March 31, 2003. Total revenues for the three-month period ended March 31, 2003 were $233,000 as compared to $762,000 for the same period in the prior year. Licensing fees for the three-month period ended March 31, 2003 were zero as compared to $528,000 for the same period in the prior year. Due to the January 2000 adoption of U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements", the Company included $528,000 in licensing fees for the three-month period ended March 31, 2002. This revenue was recognized from payments received in prior years from Schering-Plough Corporation (NYSE:SGP) from their exclusive worldwide license to VASOMAX(R), which was mutually terminated in July 2002. There was $121,000 of research and development grant revenue for the three-month period ended March 31, 2003 as compared to zero for the same period in the prior year. The Company was awarded three Small Business Innovation Research (SBIR) grants during the year 2002 aggregating over $1 million and performed some of that funded research in the first quarter ended March 31, 2003. Interest income for the three-month period ended March 31, 2003 decreased to $112,000 from $234,000 for the same period in the prior year. The decrease in interest income was due to declining interest rate yields and lower cash balances. Research and development expenses for the three-month period ended March 31, 2003 were $564,000 as compared to $610,000 for the same period in the prior year. On January 15, 2003, the Company terminated all but one scientist and incurred $122,000 in severance expenses in the quarter ended March 31, 2003. In the same quarter, the Company also incurred $85,000 in expenses to maintain its patent portfolio. General and administrative expenses for the three-month period ended March 31, 2003 were $613,000 as compared to $443,000 for the same period in the prior year. The increase in expenses for the three-month period ended March 31, 2003 is primarily due to professional fees regarding the proposed merger transaction with Lavipharm Corp., which was terminated on March 27, 2003. -more- Net loss for the three-month period ended March 31, 2003, was ($944,000) or ($0.08) per share as compared to a net loss of ($291,000) or ($0.03) per share for the same period in the prior year. The increased loss for the three-month period ended March 31, 2003 as compared to last year is primarily due to the reduction in licensing fees of $528,000, a reduction in interest income of $122,000 offset by an increase in research and development grant revenues of $121,000 and net increase in expenses of $124,000 primarily due to professional costs regarding the Company's previous terminated merger transaction with Lavipharm Corp. On March 31, 2003, the Company reported cash, cash equivalents and marketable securities totaling $24.5 million as compared to $25.1 million reported as of December 31, 2002. As of March 31, 2003 common shares outstanding were approximately 11,506,000. On April 16, 2003 the Company initiated a 50 patient Phase I/II efficacy and safety study with Androxal(TM), which is being developed as an oral treatment for testosterone deficiency in men. This study is anticipated to be completed in approximately six months. The study is anticipated to provide a head-to-head comparison of Androxal(TM) versus an existing topical testosterone therapy. Zonagen, Inc. is engaged in the development of pharmaceutical products that address diseases and conditions associated with the human reproductive system. A copy of this press release may be obtained via facsimile by dialing 1-888-329-0920 or via the internet by accessing www.zonagen.com. Any statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties including such risks identified in Zonagen's Annual Report on Form 10-K for the year ended December 31, 2002, as filed with the Securities and Exchange Commission (SEC). These documents are available on request from Zonagen or at www.sec.gov. Zonagen disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. -more- ZONAGEN, INC. AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except per share amounts)
THREE MONTHS ENDED ----------------------------- MARCH 31, 2003 2002 ---------- ---------- (UNAUDITED) (UNAUDITED) REVENUES Licensing fees $ -- $ 528 Research and development grants 121 -- Interest income 112 234 ---------- ---------- Total revenues 233 762 EXPENSES Research and development 564 610 General and administrative 613 443 ---------- ---------- Total expenses 1,177 1,053 ---------- ---------- ---------- ---------- NET LOSS $ (944) $ (291) ========== ========== NET LOSS PER SHARE $ (0.08) $ (0.03) ========== ========== Shares used in loss per share calculation: Basic 11,504 11,358 Diluted 11,504 11,358
CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, 2003 2002 ---------- ------------ (UNAUDITED) Current assets $ 25,788 $ 26,670 Fixed assets (net) 148 191 Other assets (net) 508 509 ---------- ---------- Total assets $ 26,444 $ 27,370 ========== ========== Accounts payable and accrued expenses $ 534 $ 519 Stockholders' equity 25,910 26,851 ---------- ---------- Total liabilities and stockholders' equity $ 26,444 $ 27,370 ========== ==========