GLEN ALLEN, Va., Aug. 9, 2011 /PRNewswire/ -- Star Scientific, Inc (NASDAQ: CIGX) filed its second-quarter 2011 financial report on Form 10-Q today with the Securities and Exchange Commission (SEC). The company reported net sales totaling $262 thousand for the three months ended June 30, 2011 and $418 thousand for the six months ended June 30, 2011. Second quarter 2011 net sales increased 68% from the first quarter 2011 sales of $156 thousand. This increase was due in large part to increased sales of CigRx®, the dietary supplement product developed by the company’s Rock Creek Pharmaceuticals subsidiary that reduces the urge to light a cigarette. Second-quarter 2011 net sales from CigRx®, which totaled $131 thousand, increased 184% from first-quarter 2011 net sales of $46 thousand.
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The company also reported a net loss of $5.0 million for the second quarter 2011 compared with a $6.1 million loss for first quarter 2011. The net loss for the first six months of 2011 totaled $11.1 million compared with a net loss of $18.4 million for the same period in 2010. The company had cash and cash equivalents totaling $16.2 million as of June 30, 2011 compared with $18.7 million in cash and equivalents as of March 31, 2011. Total operating expenses for the second quarter 2011 were $4.7 million compared with $13.0 million for the same period in 2010. The significant decrease was due largely to a stock-based compensation charge taken in 2010.
Star began the expansion of the CigRx® marketing plan during the first quarter of 2011 through a variety of initiatives: increasing infomercial airings, adding radio spots, significantly increasing event marketing and adding Amazon.com as a purchase portal, all of which rolled out through the second quarter 2011. The company also grew product awareness significantly through the use of social media: the CigRx® Facebook page recorded 32,800 “likes” by individual visitors during the second quarter alone. As of this date the total number of visitors who have “liked” the CigRx® Facebook page has increased to roughly 57,000. The marketing initiatives undertaken by InVentiv representatives have been focused on introducing health care professionals in the Richmond, Virginia area to CigRx®, and increasingly on a variety of wellness-focused events in that region. More recently, the CigRx® distribution channel has been broadened into the New England states through partnership with Pine State Trading Company. CigRx® is now available in roughly 300 stores across Connecticut, New Hampshire, Maine, Massachusetts, Rhode Island, Vermont and New York State in chains that include Big Apple, Champlain Farms and Gibbs Oil.
The company’s Rock Creek Pharmaceuticals subsidiary has developed a second dietary supplement, brand-named Anatabloc, which is intended to provide nutritional anti-inflammatory support. Star anticipates this product will be launched before the end of the third quarter. Anatabloc contains anatabine citrate in a form that is similar to the RCP-006 research compound, together with other dietary ingredients. It will be introduced to the market via a dedicated website where online purchases can be made, and a toll-free number also will be available for telephone orders. InVentiv representatives also will undertake a program to introduce Anatabloc to health care providers in the Richmond, Virginia region.
In addition to its product development activities, Rock Creek is overseeing research on the RCP-006 compound that it developed. A multi-site clinical trial (Flint study) seeking 250-300 subjects for a twelve-week protocol began enrollment in May. Subjects begin the protocol as they are enrolled, and this process is ongoing. The Flint study, which is being overseen by the Roskamp Institute, is examining the role that RCP-006 plays in individuals with elevated blood levels of c-reactive protein (CRP), known to be a marker for inflammation. Two other human trials examining the role of RCP-006 currently are being prepared: one of these studies, involving subjects with symptoms of thyroid disease, will be conducted at the University of Pisa Medical School, Pisa, Italy. The company expects this trial to get underway in fourth quarter 2011. The other trial will explore the role of RCP-006 in smokers who also have elevated CRP blood levels, and it will be conducted late in this quarter. The Roskamp Institute also posted on its web site on July 25 data that illustrate human blood sample testing results using both RCP-006 and a selection of anti-inflammatory medications. This can be viewed on the Institute’s home page, www.rfdn.org, under “News.”
The company also is awaiting a decision from the US Court of Appeals for the Federal Circuit on its appeal of the jury verdict in its patent infringement trial against RJ Reynolds Tobacco Company. Oral argument on the appeal took place on January 11, 2011, and the Federal Circuit Court generally attempts to issue rulings within four to six months following oral argument.
Certain statements in this press release other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward-looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based on information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, without limitation, the challenges inherent in new product development initiatives through Star Tobacco and Rock Creek, the uncertainties inherent in the progress of scientific research, our ability to raise additional capital in the future that is necessary to maintain our business, potential disputes concerning our intellectual property, risks associated with litigation regarding such intellectual property, uncertainties associated with the development, testing and regulatory approvals of our low-TSNA tobacco, related tobacco products and pharmaceutical and nutraceutical products, market acceptance of our new smokeless tobacco products and nutraceutical and pharmaceutical products, competition from companies with greater resources than us, our dependence on key employees and on our prior strategic relationships with Brown & Williamson Tobacco Corporation in light of its combination with R.J. Reynolds Tobacco Company, Inc.
Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. See additional discussion under “Risk Factors” in the Company’s Annual Report on Form 10-K as filed with the SEC on March 16, 2011, and other factors detailed from time to time in the Company’s other filings with the SEC, available at www.sec.gov. All information in this release is current as of this date, and the Company undertakes no obligation to update or advise upon any such forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
About Star Scientific
Star Scientific is a technology-oriented company with a mission to reduce the harm associated with tobacco at every level. It is engaged in the development of dissolvable smokeless tobacco products that deliver fewer carcinogenic toxins, principally through the utilization of the innovative StarCured® tobacco curing technology. Its subsidiary, Rock Creek Pharmaceuticals, Inc., is involved in the development of nutraceuticals as well as products to address neurological and mood disorders. Rock Creek Pharmaceuticals has scientific and research offices in Gloucester, MA, and a regulatory office in Washington, D.C. Star Scientific has a Corporate and Sales Office in Glen Allen, VA, an Executive, Scientific & Regulatory Affairs office in Bethesda, MD, and a manufacturing facility in Chase City, VA.
See Star‘s website at: http://www.starscientific.com
Contact:
Sara Troy Machir
Vice President, Communications & Investor Relations
smachir@starscientific.com
(301) 654-8300
SOURCE Star Scientific, Inc
