Tuesday, October 21, 2008

Critical Therapeutics boosts revenue, cuts losses for Q3 2008

By Mass High Tech Staff

In advance of its proposed acquisition by a North Carolina company, Critical Therapeutics Inc. of Lexington reported nearly double the total revenue for the third quarter ended Sept. 30, 2008, compared to the same period last year. The respiratory therapeutics-focused biopharmaceutical brought $6 million in Q3 2008, well above the $3.2 million it made in the third quarter of 2007.

In addition, Critical Therapeutics (Nasdaq: CRTX) saw a decrease in operating expenses to $8 million, compared with $11.4 million in the third quarter of 2007. That, combined with the increase in the top line revenue, cut the company’s net losses for Q3 2008 to $2 million, as opposed to $7.8 million for the same three-month period in 2007.

In May, Critical Therapeutics agreed to be acquired through a merger with Cornerstone BioPharma Holdings Inc., based in Cary, N.C. The all-stock merger is expected to form a specialty pharmaceutical company focused on treatments for respiratory conditions such as asthma and allergies.

The announcement of the deal between Critical and privately held Cornerstone came six months after Critical told investors that the firm would seek a merger or other alternatives to boost its ailing stock price.

On Oct. 3, 2008, Critical reported that the U.S. Securities and Exchange Commission had declared effective its S-4 Registration Statement about the merger, and Critical Therapeutics’ stockholders will get a chance to vote on the deal at a special meeting of stockholders to be held on Friday, Oct. 31, 2008.

The new company would have three products on the market, including Critical’s asthma drug Zyflo, AlleRx pills for allergic rhinitis and Cornerstone’s product Spectracef, a treatment for pathogens linked to respiratory diseases, according to the firms.

Critical, which listed 80 workers as of March 2008, reported a 2007 net loss of $36.97 million on revenue of $12.9 million. It dropped from the Nasdaq Global Market to the Capital Market in June because it could not meet the Global Market trading requirements. In August it received further warning that it was also no longer in compliance with the Capital Market listing requirements.