FOURTH QUARTER AND FULL-YEAR 2011 FINANCIAL SUMMARYUnigene’s net loss for the fiscal quarter ended December 31, 2012 The Company is currently exploring various alternatives, including financing, debt restructuring and partnering options. On December 11, 2012 Engaged Canaccord Genuity to assist the Company with its exploration and evaluation of a broad range of strategic options, including, but not limited to, the strategic partnering of its technology, the out-licensing of intellectual property and divestiture of certain assets, and the possible sale of the Company or one or more of its business units. Entered into a definitive licensing agreement with Tarix Pharmaceuticals to develop an oral formulation of TXA127, Tarix’s lead peptide drug candidate. The oral formulation of TXA127 is being developed jointly by Unigene and Tarix under a previously agreed upon feasibility program whereby the companies leveraged Unigene’s Peptelligence⢠technology platform to enable enhanced oral delivery of TXA127. Announced that the Company’s successful Phase 2 clinical trial evaluating an experimental oral parathyroid hormone (“PTH”) analog for the treatment of osteoporosis in postmenopausal women was published online by Bone, the Official Journal of the International Bone and Mineral Society. The Phase 2 study was also the subject of an oral presentation by Dr. Morten Karsdal, Chief Executive Officer of Nordic Bioscience, at the 2012 Annual Meeting of the American Society of Bone and Mineral Research (ASBMR). Licensee, Tarsa Therapeutics, reported positive results from a Phase 2 trial at the recent ASBMR annual meeting of its oral recombinant salmon calcitonin in the prevention of postmenopausal osteoporosis. Tarsa is developing its oral calcitonin under a licensing agreement with Unigene that provides Tarsa with exclusive development and worldwide commercialization rights to Unigene’s oral calcitonin product, with the exception of China. In a meeting on March 5, 2013, the FDA Advisory Committee concluded via a 12-9 vote that the benefits of calcitonin products, including Fortical®, do not outweigh the potential risks associated with their use and, as a result, should not continue to be broadly marketed. Additionally, the Advisory Committee recommended via a 20-1 vote that fracture prevention data should be required for the approval of new oral calcitonin products in development for osteoporosis prevention and treatment. This recommendation could impact Unigene’s licensee, Tarsa Therapeutics. Awarded the Drug Delivery Partnerships⢠Innovation Award for Industry Achievement in recognition of the Company’s 2012 clinical advances in the oral delivery of peptides, marking the second consecutive year in which Unigene was honored. Fully addressed a previously disclosed error related to the Company’s accounting for a non-cash embedded derivative liability and filed an amended annual report on Form 10-K/A for the year ended December, 31, 2011, amended quarterly reports on Form 10-Q/A for each of the quarterly periods ended June 30, 2012 and March 31, 2012, and the quarterly report on Form 10-Q for the quarter ended September 30, 2012.
Additional Financial Results & NotesRevenue for the year ended December 31, 2012 The Company anticipates that its independent registered public accounting firm will include an explanatory paragraph in their audit opinion to be contained in the Company’s Annual Report on Form 10-K, including financial statements for the year ended December 31, 2012 CONFERENCE CALL AND WEBCASTUnigene’s senior management team will host a conference call and webcast on March 12, 2013
Interested participants and investors may access the conference call at 11 a.m. ET
A telephonic replay of the call will be available for two weeks beginning at 1:00 p.m. ET
ABOUT UNIGENE LABORATORIES, INC.Unigene Laboratories, Inc. is a leader in the design, delivery, manufacture and development of peptide-based therapeutics. The Company is building a robust portfolio of proprietary partnerships in this expanding drug class based on its Peptelligence⢠platform. Peptelligence⢠encompasses extensive intellectual property covering drug delivery and manufacturing technologies, unsurpassed research and development expertise, and proprietary know-how representing a genuine distinctive competence. Core Peptelligence⢠assets include proprietary oral and nasal peptide drug delivery technologies, and proprietary, high-yield, scalable and reproducible E. coli-based manufacturing technologies.
Safe Harbor statements under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements, including statements relating to: the impact of the March 5, 2013 UNIGENE LABORATORIES, INC.
BALANCE SHEETS
DECEMBER 31, 2012 and 2011 2012 2011 ASSETS
Current Assets:
Cash and cash equivalents
$
3,813,492
$
4,681,683
Accounts receivable
76,255
2,854,038
Accounts receivable â Tarsa
—
8,193
Inventory, net
898,042
1,283,550
Due from former China joint venture partner
—
600,000
Prepaid expenses and other current assets
848,573
862,761
Total Current Assets
5,636,362
10,290,225
Noncurrent inventory, net
1,063,633
1,946,647
Property, plant and equipment, net
2,651,819
2,977,058
Patents and other intangibles, net
1,920,574
2,020,458
Deferred financing costs, net
—
619,767
Other assets
40,513
341,014
Total Assets
$
11,312,901
$
18,195,169
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable
$
731,359
$
1,472,925
Accrued expenses
2,244,830
2,094,449
Current portion â accrued interest âVictory Park and Levys
14,618,402
—
Current portion â deferred licensing revenues
1,648,515
1,262,622
Current portion â deferred gain on sale/leaseback
116,760 116,760 Current portion â capital lease obligations
38,566
—
Embedded conversion feature liability
28,700,000
—
Notes payable â Victory Park ânet of discount of $5,894,361 in 2012
41,922,248
—
Notes payable â Levys
14,437,518
750,000
Total Current Liabilities
104,458,198
5,696,756
Notes payable â Levys, excluding current portion
—
13,987,518
Notes payable â Victory Park ânet of discount of $5,335,294 in 2011
—
32,683,456
Accrued interest âVictory Park and Levys, excluding current portion
—
11,827,982
Embedded conversion feature liability
—
12,470,000
Capital lease obligations, excluding current portion
27,975
—
Deferred licensing revenues, excluding current portion
5,050,539
6,101,287
Deferred gain on sale/leaseback, excluding current portion
515,723
632,483
Deferred compensation
—
492,851
Total Liabilities
110,052,435
83,892,333
Commitments and Contingencies
Stockholders’ deficit:
Common Stock – par value $.01 per share, authorized 275,000,000 shares in 2012 and 2011; issued and outstanding: 95,586,644 shares in 2012 and 95,215,599 shares in 2011
955,866
952,156
Additional paid-in capital
116,932,088
115,691,958
Accumulated deficit
(216,627,488)
(182,341,278)
Total Stockholders’ Deficit
(98,739,534)
(65,697,164)
Total Liabilities and Stockholders’ Deficit
$
11,312,901
$
18,195,169 Notes payable â Victory Park ânet of discount of $5,894,361 in 2012 Notes payable â Victory Park ânet of discount of $5,335,294 in 2011 Common Stock – par value $.01 per share, authorized 275,000,000 shares in 2012 and 2011; issued and outstanding: 95,586,644 shares in 2012 and 95,215,599 shares in 2011 UNIGENE LABORATORIES, INC.
STATEMENTS OF OPERATIONS
Years Ended December 31, 2012, 2011 and 2010
2012
2011
2010
Revenue:
Product sales
$
4,414,106
$
3,843,787
$
5,246,159
Royalties
689,742
1,603,371
2,974,365
Licensing revenue
1,050,759
10,250,740
1,300,763
Development fees and other revenues
2,125,041
3,517,440
811,992
Tarsa revenue
1,158,505
1,293,008
1,006,935
Total Revenue
9,438,153
20,508,346
11,340,214
Operating Expenses:
Cost of goods sold
1,638,974
1,551,624
2,608,083
Research and development
5,310,731
9,015,749
6,428,041
General and administrative
8,547,416
8,887,010
7,685,039
Unallocated facility expenses
3,147,808
3,345,971
3,105,989
Loss on disposal of fixed assets
82,761
— — Inventory reserves
81,327
—
716,989
Loss on sale of patents
—
824,241
—
Severance expense – Levys
—
349,980
1,120,000
Total Operating Expenses
18,809,017
23,974,575
21,664,141
Operating Loss
(9,370,864)
(3,466,229)
(10,323,927)
Other income (expense):
(Loss) Gain on change in fair value of embedded conversion feature
(11,110,000)
10,390,000
(1,670,000)
Loss on extinguishment of debt
— — (14,381,239)
Qualifying therapeutic discovery grant
— — 977,917
Interest and other income
98,922
58,535
85,546
Interest expense
(13,858,235)
(10,483,866)
(8,038,525)
(Loss) gain from investment in former China joint venture
(600,000)
(1,375,925)
115,774
Loss from investment in Nordic joint venture
(56,442)
— — Loss from investment in Tarsa
(650,571)
(2,819,143)
—
Loss before income taxes
(35,547,190)
(7,696,628)
(33,234,454)
Income tax benefit â principally from sale of New Jersey tax benefits
1,260,980
601,070
700,503
Net loss
$
(34,286,210)
$
(7,095,558)
$
(32,533,951)
Loss per share â basic and diluted:
Net loss per share
$
(0.36)
$
(0.08)
$
(0.35)
Weighted average number of shares outstanding â basic and diluted
95,451,670
93,181,384
91,961,673 (Loss) Gain on change in fair value of embedded conversion feature Income tax benefit â principally from sale of New Jersey tax benefits