Praecis posts $15.07 million second quarter net loss

By Jennifer Lanning Drey

Eugene, Ore., Aug. 4 - Praecis Pharmaceuticals, Inc. reported a net loss of $15.07 million, or $1.42 per diluted share, for the second quarter, according to a company news release.

The results showed improvement over a $42.37 million net loss, or $4.04 per diluted share, during the second quarter of 2005, according to the release.

Praecis said the decrease in net loss was primarily due to $32.2 million of restructuring and asset impairment expenses that were recorded in the second quarter of 2005.

Revenues for the second quarter were $73,000, compared to $392,000 in the second quarter of 2005, according to the release.

The company said expenses incurred during the second quarter related to the clinical development of PPI-2458, the advancement of its DirectSelect drug discovery technology and other research and general administrative expenses.

The company is currently testing PPI-2458, an investigational compound, in phase 1 clinical trials on patients with non-Hodgkin's lymphoma and solid tumors.

"We are encouraged by the progress of this program," said Kevin F. McLaughlin, president and chief executive officer of Praecis, during a company conference call held Friday.

The company expects to report interim data from the study in the fourth quarter, he said.

"As we continue to learn additional information from our phase 1 safety investigation of this compound, we are carefully evaluating the next steps for its clinical development in oncology as well as for initiating studies for this compound in rheumatoid arthritis," said McLaughlin.

During the quarter, Praecis also applied its DirectSelect technology to internal targets that the company believes will be of interest to potential pharmaceutical partners. Praecis has initiated discussions with those companies, he said.

Praecis also started collaborative programs during the second quarter with Gilead Sciences, Inc. and GlaxoSmithKline that use its DirectSelect technology.

Both collaborations could lead to broader strategic agreements, said Dr. Richard W. Wagner, executive vice president of discovery research for Praecis, during Friday's call.

"Both Gilead and GSK have proven to be excellent partners for us, and we look forward to advancing these relationships as rapidly as possible using the DirectSelect technology," Wagner said.

"Our vision for DirectSelect is to develop a new paradigm for drug discovery, one that allows better molecules to be identified in a significantly reduced timeframe," he also said.

Praecis had cash and cash equivalents of $46.17 million at June 30, compared with cash equivalents of $57.09 million at Dec. 31, 2005.

Praecis is a Waltham, Mass.-based biopharmaceutical company focused on the discovery and development of novel compounds to address unmet medical needs or improve existing therapies.

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