SOURCE: Barrier Therapeutics, Inc.

October 31, 2006 15:30 ET

Barrier Therapeutics Announces Third Quarter 2006 Financial Results

Product Revenue Reflects Vusion™ Launch Momentum; Xolegel™ Being Shipped to the Trade

PRINCETON, NJ -- (MARKET WIRE) -- October 31, 2006 -- Barrier Therapeutics, Inc. (NASDAQ: BTRX), a pharmaceutical company developing and commercializing products in the field of dermatology, today announced its financial results for the third quarter ended September 30, 2006.

Financial Highlights:

--  Total revenue for the quarter was $2.1 million, an increase of $1.5
    million as compared to the same period in 2005. Net product revenues of
    $2.0 million represent an increase of $1.8 million over the same period in
    2005. Current quarter revenues are comprised of sales of Vusion in the
    U.S., Solagé® in the U.S. and Canada, and VANIQA® in Canada.
    
--  Net loss was $12.7 million, or $0.50 per share, compared to a net loss
    of $12.1 million, or $0.50 per share, for the same period in 2005. Results
    for the current quarter included $926,000 in stock compensation expense
    related to FAS 123(R).
    
--  Cash, cash equivalents and marketable securities as of September 30,
    2006 were $70.5 million, which includes $24.0 million in net cash proceeds
    from our September 2006 public offering. Net cash usage was $11.4 million
    for the quarter.
    
"We delivered a solid performance for the quarter and are encouraged by the positive revenue results which are attributable to our Vusion sales in the U.S.," commented Geert Cauwenbergh, Ph.D., Chief Executive Officer. "We have initiated shipments to the trade of Xolegel, our topical gel for the treatment of seborrheic dermatitis, and look forward to our second new product launch this year. At the same time, we have made significant progress with our major clinical development programs including our Phase 3 trial with Hyphanox™ in toe nail onychomycosis, and our Phase 2b trials with oral Rambazole™ in psoriasis and Azoline in tinea versicolor."

Third Quarter Financial Results

For the quarter ended September 30, 2006, the Company reported a net loss of $12.7 million, or $0.50 per share, as compared to a net loss of $12.1 million for the third quarter of 2005, which represented a loss per share of $0.50.

Total revenue for the quarter was $2.1 million, an increase of $1.5 million as compared to the same period in 2005. Net product revenues increased $1.8 million from the same period in 2005 due primarily to the sales of Vusion, which was approved in February 2006, as well as increased sales from our other commercial products in both the U.S. and Canada. Total grant and contract revenue decreased $318,000 as compared to the same period last year.

Total cost of product revenues, including cost of finished goods, distribution expenses, and amortization expense, was $351,000 for the quarter as compared to $163,000 for the same period in 2005. This increase of $188,000 was a result of higher product sales volume.

Research and development expenses for the quarter ended September 30, 2006 totaled $6.3 million, a decrease of $1.4 million as compared to the same period in 2005. Project spending decreased by $1.2 million in comparison to 2005 primarily due to the absence of expenses related to clinical trials and the NDA filing for Xolegel, which was approved in July 2006. Internal research and development expenses of $2.2 million for the period were relatively flat compared to the same period of the prior year. Included in these expenses for the current quarter was $277,000 of stock compensation expense under FAS 123(R). We anticipate that research and development expenses will increase as we further advance our Hyphanox, Rambazole and Azoline product candidates through clinical development.

Selling, general and administrative expenses for the quarter ended September 30, 2006 totaled $8.9 million, an increase of $3.2 million from the prior year. This includes $2.2 million in increased costs for our sales organization, and increases in brand marketing and market research expenses related to the launch of Vusion and Xolegel. Included in these expenses for the current quarter was $649,000 of stock compensation expense under FAS 123(R).

At September 30, 2006, the Company had $70.5 million in cash, cash equivalents and marketable securities, as compared to $78.1 million as of December 31, 2005.

Recent Operational Highlights:

--  Xolegel (ketoconazole, USP) Gel, 2%, has been shipped to the major
    wholesalers. Xolegel is a waterless gel formulation containing 2.0% of the
    antifungal agent ketoconazole developed as a once-daily application for the
    topical treatment of seborrheic dermatitis in immunocompetent adults and
    children twelve years of age and older. Xolegel is Barrier's second product
    approved by the FDA during 2006.
    
--  A public offering of 4.82 million shares of Barrier Therapeutics
    common stock was completed in September, raising approximately $25.3
    million in gross proceeds, before deducting approximately $1.3 million of
    estimated fees and expenses associated with the offering.
    
--  Patient enrollment has begun for the Phase 3 trial with our
    Hyphanox™ product candidate for the treatment of toenail onychomycosis.
    The trial is expected to include approximately 1,200 patients and compares
    Hyphanox to currently marketed itraconazole capsules and to placebo.
    
Conference Call & Webcast Information

Barrier's senior management will host a conference call on October 31, 2006 at 4:30 p.m. Eastern Time to review the third quarter 2006 financial results and provide a company update. Interested investors can listen to the call live over the Internet on the investor relations section of the Company's website located at www.barriertherapeutics.com or by dialing 1-888-868-9083 (U.S.) or 1-973-935-8512 (International) and using conference ID code: 8035730. An archived version of the webcast will be available on the company website or by dialing the replay numbers 1-877-519-4471 (U.S.) or 1-973-341-3080 (International) and using conference ID code: 8035730.

About Barrier Therapeutics

Barrier Therapeutics, Inc. is a pharmaceutical company focused on the development and commercialization of pharmaceutical products in the field of dermatology. Barrier Therapeutics currently markets three pharmaceutical products in the United States: Xolegel™ (ketoconazole, USP) Gel, 2%, Vusion™ (0.25% miconazole nitrate, 15% zinc oxide, 81.35% white petrolatum) Ointment and Solagé® (mequinol 2.0%, tretinoin 0.01%) Topical Solution. Barrier has other product candidates in various stages of clinical development for the treatment of a range of dermatological conditions, including acne, psoriasis, onychomycosis and other fungal infections such as tinea versicolor. The Company is headquartered in Princeton, New Jersey and has wholly owned subsidiaries in Geel, Belgium and Ontario, Canada. For more information, please visit the company's web site at http://www.barriertherapeutics.com

Safe Harbor Statement

In addition to historical facts or statements of current condition, this press release contains forward-looking statements within the meaning of the "Safe Harbor" provisions of The Private Securities Litigation Reform Act of 1995, including statements regarding the Company's potential to increase revenues, the commercial prospects for Xolegel, the future development of Hyphanox, Rambazole and Azoline, and the potential enrollment for our Phase 3 clinical trial for Hyphanox. Forward-looking statements provide Barrier's current expectations or forecasts of future events. Barrier's performance and financial results could differ materially from those reflected in these forward-looking statements due to the marketplace acceptance of Barrier's products, Barrier's ability to execute its commercial and clinical strategy, the decisions of regulatory authorities, the results of clinical trials and strategic decisions regarding its pipeline, general financial, economic, regulatory and political conditions affecting the biotechnology and pharmaceutical industries generally. For a discussion of these and other risks and uncertainties that may effect the forward-looking statements, please see the risk factors in the company's Quarter Report on Form 10-Q for the quarterly period ended June 30, 2006 which is on file with the Securities and Exchange Commission. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Barrier undertakes no obligation to update publicly any forward-looking statement.

In addition, please note that success in earlier clinical trials does not mean that subsequent trials will confirm earlier findings. No assessment of the efficacy or safety of any product candidate can be considered definitive until all clinical trials needed to support a submission for marketing approval are complete.


                        Barrier Therapeutics, Inc.
                  Consolidated Statements of Operations
      (All amounts in thousands, except share and per share amounts)

                              Three months ended       Nine months ended
                                 September 30,           September 30,
                               2006        2005        2006        2005
                            ----------  ----------  ----------  ----------

Revenues:
   Net product revenues     $    1,963  $      155  $    3,383  $      460
   Other revenues                  153         471         286       1,291
                            ----------  ----------  ----------  ----------
Total Revenues                   2,116         626       3,669       1,751

Costs and expenses:
        Cost of product
         revenues                  351         163       1,050         348
        Research and
         development             6,274       7,626      16,449      24,417
        Selling, general
         and administrative      8,884       5,648      26,408      14,100
                            ----------  ----------  ----------  ----------

Total costs and expenses        15,509      13,437      43,907      38,865
                            ----------  ----------  ----------  ----------

Loss from operations           (13,393)    (12,811)    (40,238)    (37,114)

Interest income, net               735         761       2,236       2,098
                            ----------  ----------  ----------  ----------

Net loss before cumulative
 effect of change in
 accounting principle          (12,658)    (12,050)    (38,002)    (35,016)

Cumulative effect of change
 in accounting principle             -           -          57           -
                            ----------  ----------  ----------  ----------

Net loss                    $  (12,658) $  (12,050) $  (37,945) $  (35,016)
                            ==========  ==========  ==========  ==========

Basic and diluted net loss
 per share before and after
 change in accounting
 principle                  $    (0.50) $    (0.50) $    (1.55) $    (1.49)

Weighted average shares
 outstanding -- basic and
 diluted                    25,097,056  23,962,649  24,437,535  23,536,482



                        Barrier Therapeutics, Inc.
                  Condensed Consolidated Balance Sheets
                              (In Thousands)

                                                September 30, December 31,
                                                    2006          2005
                                                ------------- -------------
Assets
Current Assets:
   Cash, cash equivalents and marketable
    securities                                  $      70,480 $      78,120
   Receivables                                            441           593
   Interest receivable                                    281           755
   Finished goods inventories                             833           380
   Prepaid expenses and other current assets            2,414         1,227
                                                ------------- -------------
Total current assets                                   74,449        81,075
Property and equipment, net                               984         1,055
Other assets                                            2,624         2,831
                                                ------------- -------------
Total assets                                    $      78,057 $      84,961
                                                ============= =============

Liabilities and stockholders' equity
Current liabilities:
   Accounts payable and accrued expenses        $      10,514 $       7,256
   Deferred revenue                                       480           637
   Other current liabilities                              338           397
                                                ------------- -------------
Total current liabilities                              11,332         8,290
 Notes payable: long-term portion                         169           405
Stockholders' equity                                   66,556        76,266
Total liablilities and stockholders' equity     $      78,057 $      84,961
                                                ============= =============

Contact Information

  • Contact:
    Barrier Therapeutics, Inc.
    Anne M. VanLent
    609-945-1202

    Noonan Russo
    Matt Haines
    212-845-4235