SOURCE: Apogee Technology, Inc

August 15, 2007 12:56 ET

Apogee Reports 2007 Second Quarter Results

NORWOOD, MA--(Marketwire - August 15, 2007) - Apogee Technology, Inc. (AMEX: ATA), a biotechnology company developing drug delivery and sensor systems, today reported its results for the second quarter ended June 30, 2007. Revenue for the three months ended June 30, 2007 was $65,000 compared with $341,000 for the same period in 2006. The Company's net loss for the second quarter of 2007 was $775,000 or ($0.06) per share, compared to net loss of $932,000 or ($0.08) per share for the second quarter of 2006.

For the six-month period ended June 30, 2007, the Company reported revenue of $119,000 and a loss of $1.5 million or ($0.12) per share. This compares to revenue of $1.3 million and net loss of $1.7 million or ($0.14) per share for the same period in 2006. Approximately $889,000 of the revenue in the six-month period of 2006 was related to the recognition of previously deferred revenue.

Research and Development expenditures were $375,000 for the second quarter of 2007, compared to $606,000 for the second quarter of 2006. Selling, General and Administrative expenditures were $488,000 in the second quarter of 2007, compared to $532,000 for the same period last year.

David Meyers, Apogee's Chief Operating Officer, said:

    "We have made significant accomplishments in our Medical Products Group
    in the last several months and we intend to increase our investments in
    research, development and marketing to build this business.
    
    The principal focus of our Medical Products Group is PyraDerm™, a
    proprietary system that has the potential to deliver drugs directly
    into the skin for the treatment and prevention of local and systemic
    conditions.  PyraDerm™ incorporates an array of microneedles
    containing a solid-state macromolecular/drug formulation intended to
    dissolve in the skin releasing active ingredients to achieve optimal
    delivery performance.  It is designed to be painless, low cost, self-
    administered, and easily stored, transported and disposed -- all of
    which are important needs for patients, health insurers, companies
    developing pharmaceuticals, as well as, governmental and international
    health organizations.
    
    We believe PyraDerm™ is ideal for the delivery of vaccines, because
    improved efficacy may be achieved by taking advantage of the skin's
    natural immune mechanisms.  High potency biotech or protein and peptide
    drugs, which are typically delivered by injection by health care
    professionals, may also benefit from PyraDerm™ because of its
    capability for painless self-administration. We also believe that our
    delivery system can enhance the delivery of cosmeceutical and
    nutraceutical active ingredients by increasing delivery efficiency
    compared to topical formulations.
    
    We intend to pursue licensing/development or partnership agreements
    with pharmaceutical companies for vaccines and protein drug delivery
    products due to the significant cost associated with the FDA approval
    process.  In addition, we may sell the rights to our designs for
    specific applications.  For the delivery of compounds having lesser
    regulatory requirements, we intend to develop and sell complete
    products to end-users or through distribution channels.
    
    In order to support our licensing/partnership business strategy we have
    been working to develop a strong intellectual property position and a
    comprehensive pre-clinical technical data package. In July, we filed
    two U.S. patent applications that describe advanced macromolecular
    formulations and coating methodologies. These applications are intended
    to protect our rights for drug delivery formulations, as well as,
    methods and systems for precise dose control.  We believe that if these
    patents are issued we will have a competitive advantage in the fields
    of intradermal delivery and potentially other drug delivery
    applications, such as stents.
    
    We also have been working to generate a pre-clinical data package that
    will include in vitro and in vivo studies, system stability,
    toxicology, chemistry, manufacturing, control and other necessary pre-
    clinical information.  One of the important components of this package
    is feasibility data from the evaluation of our delivery systems in
    vivo, or in a living system.  Our first target application is vaccines
    and we are working with prestigious medical research institutions to
    conduct in vivo studies.  When completed, this proof of concept data
    will build upon the results obtained by researchers at Emory University
    using our technology. This preliminary data indicated an enhanced
    immune response in animals when using multiple vaccine antigens as
    compared to conventional delivery methods.  The data supports our
    belief that PyraDerm™ has the potential to be a safe and painless
    method of mass immunization, while providing improved immune response
    compared to conventional hypodermic vaccine delivery.
    
    We now have in place patent applications to begin to protect our drug
    delivery technologies, developed PyraDerm™ prototypes and
    macromolecular formulation coating processes, completed our internal
    laboratories and hired the human resources necessary to execute on our
    business strategy. Additional funding will be required to support these
    businesses activities and we are currently reviewing our capital needs
    and exploring alternatives to accomplish our funding goals.
    
    Over the past several months, our Sensor Products Group has expanded
    from a component focus to a systems application focus in order to
    develop solutions targeting rapidly growing health monitoring
    opportunities.  By combining our expertise in MEMS-based sensors, low
    power electronics, signal processing, wireless communications and our
    emerging medical device business, we plan to develop health monitoring
    systems that have a high level of performance and perceived value,
    thereby surpassing other products in the marketplace today."
    

About Apogee Technology, Inc.

Apogee Technology, Inc. is a biotechnology company developing proprietary systems for the delivery of drugs into the skin for the treatment and prevention of local and systemic conditions. The Company's PyraDerm™ intradermal delivery system incorporates an array of microneedles containing a solid-state macromolecular/drug formulation that dissolves in the skin releasing drugs to achieve optimal delivery performance. It is designed to be painless, low cost, self-administered and easily stored, all of which are important needs in the drug delivery market. The Company is also developing and commercializing sensors and sensor systems with a specialized focus on health monitoring. For more information please visit our web site at: http://www.apogeebio.com.

PyraDerm™ and Sensilica® are trademarks of Apogee Technology, Inc. All other product names noted herein may be trademarks of their respective holders. Certain statements made herein that use the words "anticipate," "may," "hope," "estimate," "project," "will," "intend," "plan," "expect," "believe" and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve the design, development and production efforts of our PyraDerm™ and Sensilica® technologies, known and unknown risks and uncertainties, which could cause the actual results, performance or achievements of the Company to be materially different from those that may be expressed or implied. Please refer to the company's risk factors as set forth in the Company's filings with the Securities and Exchange Commission, including its reports on Forms 10-KSB, as amended, for the year ended December 31, 2006 and10-QSB for the quarter ended June 30, 2007.

                  APOGEE TECHNOLOGY, INC. AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS

                                                JUNE 30,      DECEMBER 31,
                                                  2007           2006
                                            --------------- ---------------
                                              (Unaudited)      (Audited)
ASSETS

Current assets
 Cash and cash equivalents                  $     1,537,074 $     3,051,420
 Accounts receivable, net of allowance for
  doubtful accounts of $11,320 in 2007 and
  $13,245 in 2006, respectively                      10,962          11,196
 Inventories, net                                        --              --
 Prepaid expenses and other current assets           32,837          69,465
                                            --------------- ---------------

  Total current assets                            1,580,873       3,132,081
                                            --------------- ---------------

Property and equipment, net                         203,941         117,217
                                            --------------- ---------------

Other assets
 Patents                                            277,837         208,703
 Exclusive licensing, net                            30,426          22,574
 Construction in progress                                --          90,642
                                            --------------- ---------------

                                            $     2,093,077 $     3,571,217
                                            =============== ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
 Accounts payable and accrued expenses      $       666,529 $       710,187
                                            --------------- ---------------


  Total current liabilities                         666,529         710,187
                                            --------------- ---------------

Commitments and Contingencies                            --              --

Stockholders' equity
 Common stock, $.01 par value; 20,000,000
  shares authorized, 11,968,332 issued and
  outstanding at June 30, 2007 and December
  31, 2006                                          119,683         119,683
 Additional paid-in capital                      18,450,616      18,396,909
 Accumulated deficit                           (17,143,751)    (15,655,562)
                                            --------------- ---------------

  Total stockholders’ equity                      1,426,548       2,861,030
                                            --------------- ---------------
                                            $     2,093,077 $     3,571,217
                                            =============== ===============



                  APOGEE TECHNOLOGY, INC. AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF INCOME
                                (UNAUDITED)

                        THREE MONTHS ENDED          SIX MONTHS ENDED
                             June 30,                  June 30,
                   --------------------------- ---------------------------
                       2007          2006          2007          2006
                   ------------- ------------- ------------- -------------

Revenues
Product sales      $      64,997 $     339,549 $     118,666 $   1,324,947
Royalties                     --         1,250            --         1,250
                   ------------- ------------- ------------- -------------

                          64,997       340,799       118,666     1,326,197
                   ------------- ------------- ------------- -------------

Costs and expenses
Product sales              1,199       271,844         1,415       997,089
Research and
 development             375,245       605,738       619,505     1,000,313
Selling, general
 and administrative      487,979       531,884     1,041,870     1,158,593
                   ------------- ------------- ------------- -------------

                         864,423     1,409,466     1,662,790     3,155,995
                   ------------- ------------- ------------- -------------

Operating loss          (799,426)   (1,068,667)   (1,544,124)   (1,829,798)

Other (expense) income

SigmaTel earn-out             --        84,108            --        84,108
Interest/other expense        --          (864)           --       (22,451)
Interest income           24,068        53,790        55,935       107,506
                   ------------- ------------- ------------- -------------

                          24,068       137,034        55,935       169,163
                   ------------- ------------- ------------- -------------

Net loss                (775,358)     (931,633)   (1,488,189)   (1,660,635)


Accumulated deficit
 - beginning         (16,368,393)  (13,413,561)  (15,655,562)  (12,684,559)

Accumulated deficit
 - ending          $ (17,143,751)$ (14,345,194)$ (17,143,751)$ (14,345,194)
                   ============= ============= ============= =============

Basic and diluted
 loss per common
 share             $       (0.06)$       (0.08)$       (0.12)$       (0.14)
                   ------------- ------------- ------------- -------------

Weighted average
 common shares
 outstanding -
 basic and diluted    11,968,332    11,968,332    11,968,332    11,968,332

Contact Information

  • Apogee Investor Contact:
    Kelly Black
    Premier Funding & Financial Marketing
    480-649-8224
    Email Contact