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EpiCept Reports Third Quarter 2012 Operating And Financial Results

Stocks in this article: EPCT

The merger agreement and any accompanying issuance of shares by Immune Pharmaceuticals are not, under any circumstances, to be construed as an advertisement or a public offering of securities in Israel. Any public offer or sale of securities in Israel may be made only in accordance with the Israeli Securities Act-1968 (which requires, inter alia, the filing of a prospectus in Israel or an exemption therefrom).

About EpiCept Corporation

EpiCept is focused on the development and commercialization of pharmaceutical products for the treatment of pain and cancer. The Company's pain portfolio includes AmiKet™, a prescription topical analgesic cream in late-stage clinical development designed to provide effective long-term relief of pain associated with peripheral neuropathies. The Company's product Ceplene ®, when used concomitantly with low-dose IL-2 is intended as remission maintenance therapy in the treatment of AML for adult patients who are in their first complete remission. The Company sold all of its rights to Ceplene ® in Europe and certain Pacific Rim countries and a portion of its remaining Ceplene ® inventory to Meda AB in June 2012. Ceplene ® is licensed to MegaPharm Ltd. to market and sell in Israel and EpiCept has retained its rights to Ceplene ® in all other countries, including countries in North and South America. The Company has other oncology drug candidates in clinical development that were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors.

Forward-Looking Statements

This news release and any oral statements made with respect to the information contained in this news release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are urged to consider statements that include the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “anticipates,” “intends,” “continues,” “forecast,” “designed,” “goal,” or the negative of those words or other comparable words to be uncertain and forward-looking. Such forward-looking statements include statements which express plans, anticipation, intent, contingency, goals, targets, future development and are otherwise not statements of historical fact. These statements are based on our current expectations and are subject to risks and uncertainties that could cause actual results or developments to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. Factors that may cause actual results or developments to differ materially include: the risk that we may be unable to complete the proposed merger transaction with Immune Pharmaceuticals, the risks associated with the adequacy of our existing cash resources and our ability to continue as a going concern, the risks associated with our ability to continue to meet our obligations under our existing debt agreements, the risk that Azixa ® will not receive regulatory approval or achieve significant commercial success, the risk that clinical trials for AmiKet™ or crolibulin TM will not be successful, the risk that AmiKet™ or crolibulin TM will not receive regulatory approval or achieve significant commercial success, the risk that we will not be able to find a partner to help conduct the Phase III trials for AmiKet™ on attractive terms, a timely basis or at all, the risk that Ceplene ® will not receive regulatory approval or marketing authorization in the United States or Canada, the risk that Ceplene ® will not achieve significant commercial success, the risk that our other product candidates that appeared promising in early research and clinical trials do not demonstrate safety and/or efficacy in larger-scale or later-stage clinical trials, the risk that we will not obtain approval to market any of our product candidates, the risks associated with dependence upon key personnel, the risks associated with reliance on collaborative partners and others for further clinical trials, development, manufacturing and commercialization of our product candidates; the cost, delays and uncertainties associated with our scientific research, product development, clinical trials and regulatory approval process; our history of operating losses since our inception; the highly competitive nature of our business; risks associated with litigation; and risks associated with our ability to protect our intellectual property. These factors and other material risks are more fully discussed in our periodic reports, including our reports on Forms 8-K, 10-Q and 10-K and other filings with the U.S. Securities and Exchange Commission. You are urged to carefully review and consider the disclosures found in our filings which are available at or at You are cautioned not to place undue reliance on any forward-looking statements, any of which could turn out to be wrong due to inaccurate assumptions, unknown risks or uncertainties or other risk factors.

Selected financial information follows:

EpiCept Corporation and Subsidiaries            
Selected Consolidated Balance Sheet Data
(in $000s)

September 30, 2012

December 31, 2011

Cash and cash equivalents





Restricted cash 1,178 70
Inventory 6 360
Property and equipment, net 72 120
Total assets $ 2,866 $ 7,521
Accounts payable and other accrued liabilities $ 4,024 $ 3,333
Deferred revenue 7,881 12,947
Notes and loans payable 3,932 8,022
Total stockholders’ deficit (13,168 ) (17,146 )
Total liabilities and stockholders’ deficit $ 2,866 $ 7,521
EpiCept Corporation and Subsidiaries
Selected Consolidated Statement of Operations Data
(in $000s except share and per share data)

Three Months Ended Sept. 30,

Nine Months Ended Sept. 30,







Product net revenues $ $ 34 $ 583 $ 35
Licensing and other revenues   871     241     7,131     702  
Total net revenues   871     275     7,714     737  
Operating expenses:
Cost of product net revenues 51 396 411
Selling, general and administrative 852 1,977 3,667 5,413
Research and development   1,104     2,617     3,363     6,292  
Total operating expenses   1,956     4,645     7,426     12,116  
Income (loss) from operations   (1,085 )   (4,370 )   288     (11,379 )
Other income (expense):
Interest income 4 3 10
Foreign exchange (loss) gain 207 (621 ) (57 ) 38
Warrant amendment expense (936 )
Interest expense   (254 )   (409 )   (997 )   (870 )
Other income (expense), net   (47 )   (1,026 )   (1,987 )   (822 )
Net loss before income taxes (1,132 ) (5,396 ) (1,699 ) (12,201 )
Income taxes       (1 )   (2 )   (4 )
Net loss $ (1,132 ) $ (5,397 ) $ (1,701 ) $ (12,205 )

Deemed dividends on convertiblepreferred stock

  (1,624 )       (3,550 )    

Loss attributable to common stockholders

$ (2,756 ) $ (5,397 ) $ (5,251 ) $ (12,205 )

Basic and diluted loss per common share

$ (0.03 ) $ (0.08 ) $ (0.06 ) $ (0.18 )

Weighted average common sharesoutstanding

84,618,394 71,003,667 81,826,154 67,406,765
EpiCept Corporation and Subsidiaries
Selected Consolidated Statement of Cash Flows Data
(in $000s)

Nine Months Ended Sept. 30,




Net cash used in operating activities







Net cash (used in) provided by investing activities (1,107 ) 111
Net cash provided by financing activities 60 18,156
Effect of exchange rate changes on cash   (11 )   (1 )
Net (decrease) increase in cash and cash equivalents (5,247 ) 8,181
Cash and cash equivalents at beginning of year   6,378     2,435  
Cash and cash equivalents at end of year







EpiCept Corporation and Subsidiaries
Selected Consolidated Statement of Stockholders’ Deficit Data
(in $000s)

Nine Months Ended Sept. 30,



Stockholders’ deficit at beginning of year







Net loss for the period (1,701 ) (12,205 )
Stock-based compensation expense 394 753
Foreign currency translation adjustment 47 (83 )
Share and warrant issuance 2,833 11,416
Warrant amendment expense 936

Exercise of warrants




Stockholders’ deficit at end of year








EpiCept had 92,220,376 shares outstanding as of October 31, 2012. EpiCept expects to release its results for the year ending December 31, 2012 on or about February 28, 2013.

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