Panacos Pharmaceuticals, Inc. (NASDAQ:PANC), a biotechnology company dedicated to developing the next generation of antiviral therapeutic products, today announced its financial results for the quarter ended March 31, 2007 and reviewed progress in its development programs.

Recent Business Highlights:

  • In March 2007, the Company announced a revised trial design for its Phase 2b dose escalation study of bevirimat (PA-457) in HIV-infected patients failing their current antiretroviral therapy. Cohorts of ten patients (eight on bevirimat, two on placebo) will be enrolled sequentially to study the tolerability and efficacy of bevirimat at increasing doses using the oral liquid formulation that was utilized in the bevirimat Phase 2a trial. Dosing has commenced at 250 mg of the oral solution once daily, a higher dose of this formulation than previously studied in multiple-dose trials.
  • In February 2007, the Company announced it had initiated a Phase 1 trial of a second-generation maturation inhibitor, known as PA-040. In vitro studies with PA-040 have shown that the compound has a lower level of binding to human serum proteins than bevirimat, which may result in greater levels of free drug in patients dosed with the compound, and thus the potential ability to have activity against HIV strains that exhibit partial bevirimat resistance. Furthermore, PA-040 retains wild-type activity against one of two bevirimat-resistant HIV isolates that represent the most-frequently mutated amino acids found by in vitro resistance-selection experiments performed to date.
  • The Company added Robert Savage to its Board of Directors. Mr. Savage has over 30 years' experience in the pharmaceutical industry, with a variety of senior roles at major pharmaceutical companies including Pharmacia, Johnson & Johnson, and Ortho-McNeil Pharmaceuticals.

Financial Highlights:

For the first quarter of 2007, Panacos reported a net loss of $10.1 million, or $0.19 per share, versus a net loss of $6.5 million, or $0.13 per share, for the first quarter of 2006. Revenue from research funding in the first quarter of 2007 decreased to $22,000 from $191,000 for the first quarter of 2006, primarily as a result of the completion of the Company's NIH grant-funded projects.

Research and development expenses in the first quarter of 2007 increased to $7.7 million from $5.0 million in the first quarter of 2006, primarily as a result of increased activity in the Company's development programs. General and administrative expenses in the first quarter of 2007 increased to $3.1 million from $2.6 million in the first quarter of 2006, primarily due to the increase in stock compensation expense under FAS 123R.

Unrestricted cash, cash equivalents and marketable securities were $53.2 million at March 31, 2007. As of March 31, 2007 the Company had approximately 53.1 million common shares outstanding.

?We have made significant progress this quarter toward Panacos' goal to build a portfolio of antiviral drugs to treat serious viral disease," commented Alan W. Dunton, M.D., Panacos' Chief Executive Officer. ?We are moving ahead with the 250 mg cohort of our Phase 2b trial of bevirimat, and look forward to seeing data from this cohort later in the second quarter. Our formulation development work for bevirimat is on track as we move toward identifying a formulation suitable for extended dosing in clinical studies later this year. We were also pleased to report that our second-generation maturation inhibitor, PA-040, has entered Phase 1 trials.?

Panacos will hold a conference call today to discuss the first quarter results and the Company's development programs at 4:30 p.m. (EDT). The conference call can be accessed via the web at www.panacos.com or by dialing (866) 383-8108 (domestic) or (617) 597-5343 (international), between 4:15 and 4:25 p.m. and entering the passcode 67977914. A replay of the conference call will be available from 6:30 p.m. on May 2, 2007 through June 1, 2007, and can be accessed via the web at www.panacos.com or by dialing toll-free (888) 286-8010, and outside the U.S. (617) 801-6888 with passcode 34951988.

About Panacos

Panacos is developing the next generation of anti-infective products through discovery and development of small molecule oral drugs for the treatment of HIV and other major human viral diseases. HIV infects approximately 1.7 million people in North America and Western Europe and approximately 40 million people worldwide. Approximately 650,000 patients are treated annually for HIV in the United States and Western Europe. Resistance to currently available drugs is one of the most pressing problems in HIV therapy and the leading cause of treatment failure. Panacos' proprietary discovery technologies are designed to combat resistance by focusing on novel targets in the virus life cycle, including virus maturation and virus fusion.

Panacos' lead candidate, bevirimat (PA-457), is the first in a new class of oral HIV therapeutics under development called maturation inhibitors, discovered by Panacos scientists and their academic collaborators. Based on its novel mechanism of action, bevirimat is designed to have potent activity against a broad range of HIV strains, including those that are resistant to existing classes of drugs. The Company has completed seven clinical studies of bevirimat in over 300 subjects, showing significant reductions in viral load in HIV-infected subjects and a promising safety profile, and is currently in Phase 2b clinical trials. The Company also has a second-generation program in HIV maturation inhibition in clinical testing and a research program to develop oral HIV fusion inhibitors.

Except for the historical information contained herein, statements made herein, including those relating to the clinical development of bevirimat and PA-040, the potential results of treatment with bevirimat and future clinical trials and clinical practice with both bevirimat and PA-040 are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks as set forth in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006. These risks and uncertainties could cause actual results to differ materially from any forward-looking statements made herein. The Company undertakes no obligation to publicly update forward-looking statements, whether because of new information, future events or otherwise, except as required by applicable law.

PANACOS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(unaudited)
Three Months Ended
March 31,
2007  2006 
Revenues:
Research funding $ 22  $ 191 
 
Operating expenses:
Research and development costs 7,702  5,000 
General and administrative expenses 3,089  2,558 
Total operating expenses 10,791  7,558 
   
Loss from operations (10,769) (7,367)
 
Interest income, net 718  913 
Other income (expense), net (5) - 
Net loss $ (10,056) $ (6,454)
 
Basic and diluted net loss per share $ (0.19) $ (0.13)
 

Weighted average shares used in calculation of basic and diluted net loss per share

52,893  50,075 
       
 
PANACOS PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
March 31, December 31,
2007  2006 
Cash, cash equivalents & marketable securities $ 53,224  $ 60,766 
Other current assets 2,122  2,211 
Restricted cash, long-term 494  494 
Property and equipment, net 1,979  2,122 
Other assets 40  60 
Total assets $ 57,859  $ 65,653 
 
Accounts payable and accrued expenses $ 7,004  $ 6,149 
Term debt obligations, current 208  361 
Liability classified awards 219  189 
Deferred rent, long-term 260  270 
Stockholders' equity 50,168  58,684 
Total liabilities and stockholders' equity $ 57,859  $ 65,653