Scimitar Equity Blog

    FY11 net loss of $5,968,448, or $0.26 per share

OPXA reported a FY11 net loss of $5,968,448, or $0.26 per share, compared with a net loss for FY10 of $5,469,067, or $0.32 per share. The increase in net loss is primarily due to the increases in R&D, G&A and depreciation expenses, and was partially offset by a decrease in interest expense.

OPXA reported no commercial revenues in Q4/11 and FY11 or in FY10. R&D expenses were $3,340,038 for 2011, compared with $2,584,734 for 2010. The increase in expenses was primarily due to an increase in personnel, an increase in development fees, an increase in facilities costs and the initiation of key experiments in preparation for the next clinical trial, and was partially offset by a decrease in the engagement of consultants and a decrease in stock compensation expense. The increase in expenses compared to the prior year was also due in part to a one-time $244,479 credit received for the QTDG for qualifying 2009 R&D expenses. G&A expenses for 2011 were $2,406,269 compared with $2,216,043 for 2010. The increase in expense is due to an increase in business development costs, an increase in investor relations outreach, an increase in stock compensation expense and an increase in facilities costs, and was partially offset by a reduction in professional service fees. Depreciation and amortization expenses for 2011 were $210,252 compared with $168,843 for 2010. The increase in expense is due to an increase in depreciation for facility build out costs incurred during 2011, an increase in depreciation for laboratory and manufacturing equipment acquired during 2011 and an increase in depreciation for information technology equipment acquired during 2011. Interest expense was $3,135 for 2011, compared with $500,648 for 2010. The decrease in interest expense was primarily related to the non-cash amortization of the remaining discount and deferred financing fees in connection with the 6/23/10 conversion to common stock of $1.25M in principal amount of convertible promissory notes.

• Cash and cash equivalents were $7.1M as of 12/31/11 compared to $3.8M as of 12/31/10.

The Bottom Line: OPXA monthly cash burn during 2011 was approximately $470K. As OPXA proceeds toward the initiation of a P2b clinical study inNorth America, they expect substantial increases in its monthly cash burn. Moving forward, in order to initiate the trial OPXA will need to secure additional financing either through a potential partnership or additional capital raise. An additional troubling factor is … On 2/10/12, OPXA received a letter from the listing qualifications department staff of the NASDAQ Stock Market notifying them that for the last 30 consecutive business days the bid price of the OPXA’s common stock had closed below $1.00 per share, the minimum closing bid price required by the continued listing requirements of NASDAQ, OPXA has 180 calendar days, or until 8/8/12, to regain compliance with the minimum bid price rule.