Oscient Pharmaceuticals Releases 4Q and Full Year 2008 Financial Results

In a release on March 25, the company noted that total revenues for the fourth quarter of 2008 were $26.4 million, compared to $25.3 million in the fourth quarter of 2007. Revenue from the cardiovascular drug ANTARA (fenofibrate) capsules increased to $21.2 million in the fourth quarter of 2008, from $19.3 million in the fourth quarter of 2007. Revenues from the antibiotic FACTIVE (gemifloxacin mesylate) tablets decreased to $5.2 million in the fourth quarter of 2008, from $5.9 million in the fourth quarter of 2007.

For the fourth quarter ended December 31, 2008, the Company reported a net loss of ($11,526,000), or ($0.50) per basic and diluted share. Comparatively, the Company reported a net loss of ($14,672,000), or ($1.08) per basic and diluted share, for the fourth quarter ended December 31, 2007. For the fourth quarter of 2008, the Company reported a net loss from operations of ($50,905,000), which includes a $50,759,000 one-time, non-cash impairment charge on FACTIVE intangible assets, compared to a ($5,854,000) net loss from operations in the fourth quarter of 2007.

"In recent weeks, we have commenced a process of reaching out to potential strategic partners to explore alternatives for our Company, including the potential sale of the Company," said Steven M. Rauscher, President and CEO. "Our business focus is on cash preservation, sustaining revenues of our existing portfolio, and best positioning the Company for the strategic review of alternatives being directed by our advisors at Broadpoint Capital."

Selling and marketing expenses were $14.9 million in the fourth quarter of 2008, compared to $16.8 million in the fourth quarter of 2007. General and administrative expenses for the fourth quarter of 2008 totaled $2.7 million, compared to $4.7 million in the fourth quarter of 2007. Fourth quarter 2008 results included $10.0 million in net non-cash charges, primarily reflecting several one-time items including a non-cash expense of $50.8 million related to the impairment charge on FACTIVE intangible assets, as well as non-cash gains of $35.4 million related to the exchange of the Company's convertible notes and $10.3 million related to gains on derivatives. Net non-cash charges in the fourth quarter of 2007 totaled $6.6 million.

During the quarter ended December 31, 2008, the Company's cash position decreased by approximately $11.8 million to approximately $17.2 million in total cash, cash equivalents and restricted cash, nearly $5 million of which was related to the legal and banking fees associated with the Company's convertible debt exchange in November. Through the convertible debt exchange, the principal of the Company's overall indebtedness was reduced by more than $125 million.

For the twelve months ended December 31, 2008, the Company reported total revenues of $86.8 million, reflecting ANTARA revenues of $70.3 million and FACTIVE revenues of $16.5 million. This compares to total revenues of $80.0 million in 2007, including ANTARA revenues of $58.6 million and FACTIVE revenues of $21.4 million. The Company reported a net loss of ($64,755,000), or ($4.03) per basic and diluted share, for 2008. The Company reported a net loss of ($29,853,000), or ($2.19) per basic and diluted share, for 2007. The 2008 results include net non-cash charges of approximately $28.1 million; this compares to $12.7 million in net non-cash gain included in the 2007 results.

On February 11, the Company announced a restructuring of its commercial organization to more aggressively preserve the Company's financial resources. Additionally, Oscient announced at that time the engagement of an investment bank to advise the Company on strategic options, including the potential sale of the Company. Today, Oscient has approximately 213 employees, including 168 field-based employees across the country.

On March 25, the Company filed with the SEC, an Annual Report on Form 10-K, in which the Company's auditors included a "going concern" explanatory paragraph in their audit opinion. The Company intends to seek to raise additional capital and refinance its existing debt. Based on multiple factors including market conditions and the going-concern designation, the Company may not be able to obtain adequate financing.

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