EPIX Pharmaceuticals needs capital to fund operations after August, convertibles redemption

By Caroline Salls

Pittsburgh, March 13 - EPIX Pharmaceuticals, Inc. said it would be forced to cease operations and/or file for bankruptcy if it is not able to secure enough additional capital to fund operations beyond August or a redemption of its 3% convertible senior notes, according to a 10-K filed with the Securities and Exchange Commission.

The company said it received notice from the Nasdaq Listing Qualifications Panel on Feb. 4 that Nasdaq will continue listing EPIX's common stock, subject to the company's compliance with a rule requiring it to maintain a common stock market value of at least $50 million for at least 10 consecutive days up to and including May 11.

However, EPIX said it was not in compliance with the listing requirement as of March 10.

If it does not regain compliance, the company said its common stock would be delisted from Nasdaq, and the holders of its $100 million principal amount of 3% convertible senior notes could redeem their notes at face value plus interest.

EPIX said it does not have sufficient funds to repurchase more than a nominal amount of the notes if tendered by the holders, prompting a need to raise significant additional capital to fund its operations beyond August or to pay for a possible notes redemption.

Given the difficult economic environment, the company said it believes it will be difficult for it to raise more funds.

EPIX said its future liquidity and capital requirements will depend on the progress and scope of clinical and preclinical trials; the timing and costs of filing regulatory submissions; the timing and costs of receiving governmental approvals; the costs related to filing and enforcing patent claims and other intellectual property rights; the extent of product market acceptance; the timing and costs of product introductions; the extent of research and development programs; the costs of training physicians to use potential products; and the costs of developing marketing and distribution capabilities.

EPIX is a Lexington, Mass.-based biopharmaceutical company.

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