MANCHESTER, NH -- (Marketwired) -- 03/17/14 -- Boston Therapeutics, Inc. (OTCQB: BTHE) ("Boston Therapeutics" or "the Company"), a leading developer of compounds that address diabetes using complex carbohydrate chemistry, reports its financial results for the fourth quarter and year ended December 31, 2013.
David Platt, Ph.D., Chief Executive Officer, Boston Therapeutics, said, "In the fourth quarter and fiscal year 2013, we continued to strengthen our Company by successfully raising capital and bolstering our management team and board of directors with new key leadership. We raised $5.6 million in 2013 to support our near-term product portfolio. In addition to our mechanism of action study at the University of Minnesota, we continue to work toward preparing an IND submission to the Food and Drug Administration for a pivotal Phase III study for our lead drug candidate BTI320 (formerly PAZ320). We have initiated a Phase II study in France and are initiating a similar study in the United States. Additionally, the recent appointment of Larry Ellingson as Chairman of our Scientific Advisory Board, the consulting agreement we signed with Generosus Advisors and Fortified Management Group to market SUGARDOWN® in the U.S., as well as the agreement we signed with American Medical Supplies to distribute SUGARDOWN® in Egypt and Saudi Arabia are all positive steps for our shareholders and our Company. We plan to continue to implement our expertise in complex carbohydrate chemistry to design compounds to better manage blood glucose."
Business Highlights for the Fourth Quarter 2013 and Recent Months:
- Cash and cash equivalents as of December 31, 2013 were $3,387,428 compared with $552,315 as of December 31, 2012.
- Signed a consulting agreement to market SUGARDOWN® in the United States on a non-exclusive basis with Generosus Advisors, LLC and Health Now Network (HNN).
- Appointed Larry K. Ellingson as Chairman of our Scientific Advisory Board. A former Chairman of the Board of the American Diabetes Association, he has more than four decades of corporate experience in drug development with a strong emphasis on diabetes and related diseases.
- Appointed Conroy Chi-Heng Cheng and S. Colin Neill to the Board of Directors. Mr. Cheng is Director of Advance Pharmaceutical Company, which is headquartered in Hong Kong and has the exclusive right to market and sell our SUGARDOWN® product in China, Hong Kong and Macao. Mr. Cheng is also a significant shareholder in the Company. Mr. Neill was, most recently, President and Chief Financial Officer of Pharmos Corporation, a biopharmaceutical company engaged in the discovery and development of novel therapeutics to treat a range of metabolic and nervous system disorders. Mr. Neill chairs our Audit Committee.
- Promoted Anthony Squeglia to Chief Financial Officer, named Edward Shea as Vice President Business Development, Tina M. Gagnon as Consulting Director of Finance, Louise Gelinas as Director Business Operations and Yael T. Bobruff, Ph.D. as Clinical Affairs Manager.
Clinical Highlights for the Fourth Quarter 2013 and Recent Months:
- Received Institutional Review Board (IRB) approval to initiate a clinical study of BTI320 in the United States. The Company expects the trial to last for approximately four months. The U.S.-based trial is a double blind, placebo controlled study with 24 patients with Type 2 diabetes who are taking metformin.
- Initiated research study on BTI320 at University of Minnesota to provide insight into its mechanism of action.
- Began enrolling patients with Type 2 diabetes taking metformin in a Phase II clinical trial of BTI320 in France.
Financial Results for the Fourth Quarter and Year Ended December 31, 2013:
- Revenue for the fourth quarter ended December 31, 2013 was $80,438, compared with $18,504 in the prior year's fourth quarter. For the year ended December 31, 2013, revenue was $323,412, compared with $42,254 in 2012. Revenue for each period was generated from the sale of SUGARDOWN®.
- Cost of goods sold for the fourth quarter ended December 31, 2013 was $103,781, compared with $15,982 in the prior year's fourth quarter. Cost of goods sold for the year ended December 31, 2013 was $278,205, compared with $56,859 in 2012. The increase in the cost of goods sold for the quarter and the year was the result of a product shipment to a customer.
- Gross margin for the fourth quarter ended December 31, 2013 was a deficit ($23,343), compared with $2,522 in the prior year's fourth quarter. Gross profit for the year ended December 31, 2013 was $45,207. This compares with a gross margin deficit of ($14,605) for fiscal 2012. The Company's gross margin deficit for fiscal 2012 was primarily the result of fixed overhead costs related to moving to a new fulfillment operations and manufacturing scale-up from small to production-grade equipment exceeding revenue.
- Research and development expense for the fourth quarter ended December 31, 2013 was $342,064 compared with $33,270 for the prior year's fourth quarter. For the year ended December 31, 2013, research and development expense was $542,492, compared with $178,938 in 2012. The increase in research and development reflects expenses related to the preparation for the BTI320 Phase II trial in France and BTI320's planned Phase III international trial.
- Sales and marketing expense for the fourth quarter ended December 31, 2013 was $77,982, compared with $4,814 in the prior year's quarter. For the year ended December 31, 2013, sales and marketing expense was $329,218 compared with $232,411 in 2012. The increase in sales and marketing expense was related to costs incurred with third parties for product marketing, public relations and non-cash, stock-based compensation.
- General and administrative expense for the fourth quarter ended December 31, 2013 was $1,849,734, compared with $537,963 in the prior year's fourth quarter. For the year ended December 31, 2013, general & administrative expense was $3,753,742, an increase of $2,717,176 as compared with $1,036,566 in 2012. Approximately $991,000 of the fiscal year increase is related to non-cash, stock-based compensation expense, which includes $624,000 of expense related to the terms of a terminated employee's employment agreement and expense associated with option grants during 2012 and 2013. Consulting and professional services increased $864,000 and accounting, financial and legal professional fees increased $445,000. In addition, payroll and payroll-related expense increased $272,000 due to additional personnel, rent expense increased $61,000 due to increased space and travel and entertainment expenses increased $33,000.
- Net loss for the fourth quarter ended December 31, 2013 was $2,297,972 or $0.06 per share, compared with a net loss of $578,387 or $0.04 per share in the prior year's fourth quarter. For the year ended December 31, 2013, net loss was $4,601,503 or $0.18 per share, compared with $1,484,115 or $0.09 per share in 2012. Non-cash expense included in the net loss for the year ended December 31, 2013 is approximately $2.1 million, primarily related to stock-based compensation associated with employee stock options and common stock issued for consulting services. As of December 31, 2013, there were 25.4 million weighted average shares outstanding, compared with 16.9 million weighted average shares outstanding as of December 31, 2012.
We have incurred recurring operating losses since inception as we have worked to bring our SUGARDOWN® product to market and develop BTI320 and IPOXYN. We expect such operating losses will continue until such time that we receive substantial revenues from SUGARDOWN® or we complete the regulatory and clinical development of BTI320 or IPOXYN. We anticipate that our cash resources will be sufficient to fund our planned operations into the second half of fiscal 2014. We plan to seek additional capital through private placements and public offerings of the Company's common stock. There can be no assurance that the Company will be successful in accomplishing its objectives. Without such additional capital, the Company may be required to curtail or cease operations.
|Boston Therapeutics, Inc.|
|Condensed Statements of Operations|
|Three Months Ended||Year Ended|
|December 31,||December 31,|
|Cost of goods sold||103,781||15,982||278,205||56,859|
|Gross margin (deficit)||(23,343||)||2,522||45,207||(14,605||)|
|Research and development||342,064||33,270||542,492||178,938|
|Sales and marketing||77,982||4,814||329,218||232,411|
|General and administrative||1,849,734||537,963||3,753,742||1,036,566|
|Total operating expenses||2,269,780||576,047||4,625,452||1,447,915|
|Foreign currency loss||(1,092||)||-||(3,071||)||(3,211||)|
|Net loss per share - basic and diluted||$||(0.06||)||$||(0.04||)||$||(0.18||)||$||(0.09||)|
|Weighted average shares outstanding basic and diluted||37,247,533||17,636,820||25,370,626||16,873,903|
|Boston Therapeutics, Inc.|
|Balance Sheet Data|
|December 31,||December 31,|
|Cash and cash equivalents||$||3,387,428||$||552,315|
|Total stockholders' equity||$||3,345,270||$||696,463|
About Boston Therapeutics, Inc.
Boston Therapeutics, headquartered in Manchester, NH, (OTCQB: BTHE) is an innovator in designing compounds using complex carbohydrate chemistry. The Company's product pipeline is focused on developing and commercializing therapeutic molecules that address diabetes and inflammatory diseases, including: BTI320 (formerly PAZ320), a non-systemic chewable therapeutic compound designed to reduce post-meal glucose elevation, and IPOXYN, an injectable anti-necrosis drug designed initially to treat lower limb ischemia associated with diabetes. SUGARDOWN® is a non-systemic complex carbohydrate-based dietary food supplement designed to support healthy blood glucose. More information is available at www.bostonti.com and www.sugardown.com.
Forward Looking Statements
This press release contains, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or future financial performance, and use words such as "may," "estimate," "could," "expect" and others. They are based on our current expectations and are subject to factors and uncertainties which could cause actual results to differ materially from those described in the statements. Factors that could cause our actual performance to differ materially from those discussed in the forward-looking statements include, among others, that our plans, expectations and goals regarding the clinical trials are subject to factors beyond our control and provide no assurance of FDA approval of any of our future drug development plans. Our clinical trials may not produce positive results in a timely fashion, if at all, and any necessary changes during the course of the trial could prove time consuming and costly. We may have difficulty in enrolling candidates for testing, which would affect our estimates regarding timing, and we may not be able to achieve the desired results. Any significant delays or unanticipated costs in any subsequent drug trial could delay obtaining meaningful results from Phase II studies and/or preparing for Phase III studies with the current cash on hand.
Upon receipt of FDA approval, we may face competition with other drugs and treatments that are currently approved or those that are currently in development, which could have an adverse effect on our ability to achieve revenues from this proposed indication. Plans regarding development, approval and marketing of any of our compounds, including BTI320, are subject to change at any time based on the changing needs of our company as determined by management and regulatory agencies. To date, we have incurred operating losses since our inception, and our ability to successfully develop and market drugs may be affected by our ability to manage costs and finance our continuing operations. For a discussion of additional factors affecting our business, see our Annual Report on Form 10-K for the year ended December 31, 2013, and our subsequent filings with the SEC. You should not place undue reliance on forward-looking statements. Although subsequent events may cause our views to change, we disclaim any obligation to update forward-looking statements.
Source: Boston Therapeutics