CPEX losses ease in third quarter

CPEX Pharmaceuticals lost money in its third quarter, but the company’s losses are slowing and it still has a lot of money in the bank, the company announced Wednesday.

The Exeter, N.H.-based developer of drug alternative delivery systems posted a quarterly net loss of $872,000, or 34 cents a share, down from a $1 million last year. Last year’s loss was primarily due to a payoff to top executives when the company was spun off from Bentley Pharmaceuticals, a generic drug company that was shortly swallowed up by Teva Pharmaceuticals, which is based in Israel.

Sales of the company’s only approved drug have increased by 36 percent to $5 million, all from royalties from Testim, which delivers testosterone by permeating the skin.

Operating expenses have increased some 17 percent to $5.8 million. Expenses increased for two reasons: increased research and development costs for the development of two drugs, Nasulin, a nasal spray of insulin for the large diabetic market that is in Phase 2 trials, and for Phase 3 trials to test another nasal spray with partner Serenity Pharmaceuticals to deliver an undisclosed urology drug.

CPEX also is incurring increased litigation costs defending its patent rights against Upsher-Smith Laboratories regarding Testim. The company said that on Oct. 27 it filed for six additional patents to expand the scope and claims of the original patent covering the drug.

For the year thus far, the company has lost $2.5 million, or $1.02 a diluted share, compared to a $3.2 million loss in the first three quarters of 2008. For two of those quarters, CPEX was still a part of Bentley.

Despite the losses, the spinoff left the company with plenty of cash. It has $13.8 million in unrestricted cash, working capital of $16.8 million and no debt. Stockholder equity is relatively stable, at $23.1 million, just slightly lower than the $23.8 million during the previous year.

CPEX shares closed at $9.32, up 33 cents, in trading on Tuesday. – BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

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