GLEN ROCK, NJ--(Marketwired - Nov 15, 2016) - RespireRx Pharmaceuticals Inc. (
Comments by Chief Executive Officer
James S. Manuso, Ph.D., President, Chief Executive Officer and Vice Chairman of RespireRx, commented, "We are pleased to report to RespireRx shareholders, stakeholders and other interested parties, that the analyses of the results of the Phase 2 clinical trials of CX1739 for opioid-induced respiratory depression and of dronabinol for Obstructive Sleep Apnea are on schedule to be reported around year-end 2016."
Dr. Manuso stated, "We are continuing our efforts to uplist RespireRx to a national stock exchange. In support of that initiative, as of September 1, 2016, we effected a 325-to-1 reverse stock split, and we are working to fully fund our drug development activities, including our clinical trial programs, and the strengthening of our balance sheet."
Dr. Manuso concluded, "We encourage those interested in learning more about the current clinical landscape for treating respiratory diseases to follow developments at RespireRx."
Reverse Stock Split
On August 16, 2016, at a special meeting of the stockholders of the Company, the stockholders approved an amendment to the Company's Second Restated Certificate of Incorporation (i) to effect, at the discretion of the Company's Board of Directors, a 325-to-1 reverse stock split of all of the outstanding shares of the Company's common stock, par value $0.001 per share, and (ii) to set the number of the Company's authorized shares of stock at 70,000,000 shares, consisting of 65,000,000 shares designated as common stock, par value $0.001 per share, and 5,000,000 shares designated as preferred stock, par value $0.001 per share. On September 1, 2016, the Company filed a Certificate of Amendment to the Company's Second Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the approved amendment.
All share and per share amounts with respect to common stock presented herein have been retroactively restated to reflect the 325-to-1 reverse stock split.
Research and Development Overview
Key developments during the three months ended September 30, 2016 demonstrate considerable progress in clinical trial programs as follows:
- The University of Illinois and three other research centers recently completed a six week, placebo-controlled Phase 2B clinical trial investigating the effects of dronabinol in patients with Obstructive Sleep Apnea (OSA). This study was funded by the National Heart, Lung and Blood Institute (NHLBI) of the National Institutes of Health (NIH). The final progress report has been submitted to the NIH by the principal investigators. The blinded results of this trial are included as an exhibit to the Company's Current Report on Form 8-K furnished and filed with the Securities and Exchange Commission on November 1, 2016 and may be accessed at: https://www.sec.gov/Archives/edgar/data/849636/000149315216014392/ex99-1.htm. The Company expects to be able to announce the unblinded results of the data analysis by the principal investigators around year-end 2016.
- The Company conducted a double-blind, placebo-controlled, dose-ascending Phase 2A clinical trial at the Duke University School of Medicine to evaluate the Company's lead oral compound, CX1739, for the prevention of respiratory depression caused by remifentanil, a potent opioid, while maintaining its desired analgesic effects. This study completed dosing in June 2016 and was formally completed on July 11, 2016. The Company expects to complete a full analysis of the respiratory data and to issue a final report on the results of the clinical trial around year-end 2016.
Financial Overview and Selected Financial Information
The Company incurred a net loss of $2,391,802 and $2,263,728 for the three months ended September 30, 2016 and 2015, respectively, and $7,804,002 and $4,241,312 for the nine months ended September 30, 2016 and 2015, respectively. The Company incurred negative operating cash flows of $1,212,331 and $792,414 for the nine months ended September 30, 2016 and 2015, respectively. The Company expects to continue to incur net losses and negative operating cash flows for the next few years.
The Company had shares of its Series G 1.5% Convertible Preferred Stock issued and outstanding through April 17, 2016. Accordingly, for the three months ended September 30, 2016 and 2015, the Company incurred a net loss attributable to common stockholders of $2,391,802 and $2,264,836, respectively, reflecting a net loss per common share of $1.18 for 2016 and $1.69 for 2015. For the nine months ended September 30, 2016 and 2015, the Company incurred a net loss attributable to common stockholders of $7,805,167 and $4,247,192, respectively, reflecting a net loss per common share of $4.31 for 2016 and $3.94 for 2015.
At September 30, 2016, the Company had 2,018,761 shares of common stock outstanding, as compared to 1,507,221 shares of common stock outstanding at December 31, 2015.
At September 30, 2016, the Company had a working capital deficit of $4,889,965, as compared to a working capital deficit of $2,922,279 at December 31, 2015, reflecting an increase in the working capital deficit of $1,967,686 for the nine months ended September 30, 2016. At September 30, 2016, the Company had cash aggregating $39,553, as compared to $53,199 at December 31, 2015.
At September 30, 2016, the Company had $276,000 principal amount of 10% convertible notes payable outstanding (plus accrued interest of $54,528), which matured and became due and payable in full on September 15, 2016. During October 2016, holders of four notes totaling $73,004, which included accrued interest of $12,004 at September 30, 2016, issued formal notices of default, and as a result, those four notes were deemed to be in default under the terms of the notes and began to accrue interest at the default rate of 12% per annum from the default date in accordance with the terms of the notes. The Company is continuing efforts to satisfy these notes payable through the issuance of the Company's securities, although there can be no assurances that the Company will be successful in this regard.
The Company is working to raise additional capital in order to pay its liabilities, fund its business activities and underwrite its research and development programs. The Company regularly evaluates various means to satisfy the Company's liquidity needs, including the development of agreements with collaborative partners and, when necessary, the exchange or restructuring of the Company's outstanding securities. As a result of the Company's current financial situation, the Company has limited access to external sources of debt and equity financing. Accordingly, there can be no assurances that the Company will be able to secure additional financing in the amounts necessary to fund its operating and debt service requirements. If the Company is unable to access sufficient cash resources on a timely basis, the Company may be forced to reduce operations indefinitely or to discontinue operations entirely and liquidate.
Additional information with respect to the Company's financial condition, results of operations, cash flows, capital structure and other matters involving the business, operations and research and development activities of the Company is included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016, as filed with the Securities and Exchange Commission.
About RespireRx Pharmaceuticals Inc.
RespireRx Pharmaceuticals Inc. is a leader in the development of medicines for respiratory disorders, with a focus on sleep apneas and drug-induced respiratory depression. The Company holds exclusive licenses and owns patents and patent applications for certain families of chemical compounds that claim the chemical structures and their uses in the treatment of a variety of disorders, as well as claims for novel uses of known drugs.
RespireRx has a pipeline of medicines in Phase 2 clinical development focused on pharmaceutical treatments for a variety of breathing disorders. Clinical development in the area of respiratory disorders, particularly drug-induced respiratory depression and sleep apnea, has created opportunities for the development and commercialization of the Company's compounds.
Cannabinoids. One platform being developed by RespireRx is the class of compounds known as cannabinoids, including dronabinol. Under a license agreement with the University of Illinois, the Company has rights to patents claiming the use of cannabinoids for the treatment of sleep-related breathing disorders. In a double-blind, placebo-controlled, dose-ascending Phase 2A clinical study conducted by the Company, dronabinol produced a statistically significant reduction in the Apnea-Hypopnea Index, the primary therapeutic end-point, and was observed to be safe and well-tolerated in a group of patients with OSA.
Ampakines. The other platform of proprietary medicines being developed by RespireRx are ampakines, which act to enhance the actions of the excitatory neurotransmitter glutamate at AMPA glutamate receptors. Several ampakines, in both oral and injectable forms, are being developed by the Company for the treatment of a variety of breathing disorders. In clinical studies, select ampakines have shown preliminary efficacy in central sleep apnea and in the control of respiratory depression produced by opioids, without altering the opioid analgesic effects. In animal models of orphan disorders, such as Pompe Disease, spinal cord injury and perinatal respiratory distress, it has been demonstrated that certain ampakines improve breathing function. The Company's compounds belong to a new class that does not display the undesirable side effects previously reported for other ampakines.
Additional information about the Company and the matters discussed herein can be obtained on the Company's web-site at www.RespireRx.com or in the Company's filings with the Securities and Exchange Commission at www.sec.gov.
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Company intends that such forward-looking statements be subject to the safe harbor created thereby. These might include statements regarding the Company's financial position, business strategy and other plans and objectives for future operations, and assumptions and predictions about research and development efforts, including, but not limited to, preclinical and clinical research, design, execution, timing, costs and results, future product demand, supply, manufacturing, costs, marketing and pricing factors are all forward-looking statements.
In some cases, forward-looking statements may be identified by words including "anticipates," "believes," "intends," "estimates," "expects," "plans," and similar expressions include, but are not limited to, statements regarding (i) future research plans, expenditures and results, (ii) potential collaborative arrangements, (iii) the potential utility of the Company's proposed products, and (iv) the need for, and availability of, additional financing.
The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties. These forward-looking statements are based on assumptions regarding the Company's business and technology, which involve judgments with respect to, among other things, future scientific, economic and competitive conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company's control. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, actual results may differ materially from those set forth in the forward-looking statements. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company's objectives or plans will be achieved.
Factors that could cause or contribute to such differences include, but are not limited to, regulatory policies or changes thereto, available cash, research and development results, competition from other similar businesses, and market and general economic factors. This press release should be read in conjunction with the condensed consolidated financial statements (unaudited) and notes thereto included in Item 1 of the Company's recently filed Quarterly Report on Form 10-Q and the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, including the section entitled "Item 1A. Risk Factors." The Company does not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.