Cytogen increases losses, revenues in Q1; merges with EUSA Pharma

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Cytogen has reported an increase in net losses and total revenue for the first quarter of 2008, which ended March 31, and completed a merger agreement with EUSA Pharma, a Doylestown, Pa.-based pharmaceutical company.

The Princeton, N.J.-based Cytogen booked a net loss for the quarter of $5.9 million, compared to a net loss of $4.8 million, for the same period in 2007. Financial results in 2007 were favorably impacted by a $3.9 million net litigation settlement with Advanced Magnetics, the company said.

Product revenues, which were predominately comprised of sales of Quadramet (samarium Sm-153 lexidronam injection), Prostrascint (capromab pendetide), and Caphosol, an electrolyte solution for the treatment of oral mucositis and dry mouth, were $5.3 million for the first quarter of 2008 compared to $4.8 million for the same period in 2007, according to Cytogen.

Selling, general and administrative expenses for the quarter decreased to $7.1 million compared $10.5 million for the same period in 2007. The company attributed the decreases in SGA expenses to costs to support the commercial launch of Caphosol in 2007, partially offset by the costs incurred in 2008 in connection with the previously announced merger agreement with EUSA Pharma.
Cytogen also recorded a net interest income of $51,000 versus $366,000 for the same period in 2007.

Cytogen's cash and cash equivalents were $3.1 million compared to $8.9 million as of Dec. 31, 2007. The company said it expects its existing capital resources along with the $5 million net receipt in April for the sublicensing of the European and Asian marketing rights to Caphosol to EUSA, is adequate to fund operations and commitments into the second quarter of 2008.
On March 11, Cytogen entered into a definitive merger agreement with EUSA, subject to certain closing conditions. The merger was completed on May 9. Under the terms of the agreement, Cytogen shareholders will receive an equivalent valued at $22.6 million.

To meet the consideration, EUSA raised more than $50 million in an investment round led by TVM Capital and supported by EUSA’s existing investors, Essex Woodlands, 3i, Goldman Sachs, Advent Venture Partners, SV Life Sciences, NeoMed and NovaQuest. EUSA will now apply to delist all Cytogen’s issued shares from the Nasdaq stock exchange.

Cytogen brings to EUSA three oncology and pain control products, a U.S. specialty sales force and an established commercial infrastructure. With the completion of the acquisition, Cytogen will form a wholly owned subsidiary of EUSA and will operate under the EUSA name, according to EUSA.