Star Scientific Files Annual Financial Report for 2012; Reports on Results of Operations and Continued Increase in Sales of its Dietary Supplement Products

Mar 18, 2013, 16:45 ET from Star Scientific, Inc.

GLEN ALLEN, Va., March 18, 2013 /PRNewswire/ -- Star Scientific, Inc. (NASDAQ: STSI) today filed its annual financial report on Form 10-K with the Securities & Exchange Commission (SEC).  The Company reported net sales for the year ended December 31, 2012 of $6.2 million, a five-fold increase over 2011 net sales of $1.2 million.  Fourth-quarter 2012 net sales totaled $2.0 million, compared with $0.8 million in fourth-quarter 2011.  Net sales of the Company's Anatabloc® dietary supplement constituted the vast majority of all sales for 2012. The Company's net sales have increased in each of the past five quarters, with that trend continuing in the first quarter of 2013.

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Total operating expenses for 2012 were approximately $27.2 million, a decrease of approximately $7.9 million, or 22.3%, from approximately $35.1 million for the same period in 2011. Research and Development costs increased in 2012 by $1.3 million from the earlier period to $4.6 million, primarily in connection with clinical (human) and pre-clinical (non-human) studies of the Company's Anatabloc® dietary supplement and Anatabloc® Facial Creme.  Anatabloc® Facial Creme was introduced into the market in September 2012 as a cosmetic product, and a related Anatabloc® cleanser and serum are both in development.  Marketing expenses also increased in 2012 by approximately $3.6 million from the earlier period to $6.2 million. This increase was directly related to the company's efforts to broaden consumer awareness for its Anatabloc® product.  General and administrative expenses decreased from approximately $29.3 million in 2011 to approximately $16.5 million for 2012, a decrease of approximately $12.8 million, or 43.7%.  This decrease in G&A expenses for 2012 was due primarily to lower non-cash charges for stock based compensation.

The Company reported a net loss of $(22.9) million for 2012, as compared with a net loss of $(38.0) million for the same period in 2011. The net loss for 2012 includes other income of $6.6 million, primarily in connection with the September 2012 settlement of the RJ Reynolds patent litigation matters.

As of December 31, 2012, the Company discontinued the sale of its low-TSNA smokeless tobacco products and completed its transition from the tobacco manufacturing business in order to focus exclusively on its dietary supplements, related cosmetic products, and potential pharmaceutical products.  This decision was made, among other reasons, because manufacturing dissolvable tobacco products negatively impacted the Company's ability to interest leading research centers in undertaking clinical research related to its dietary supplements and the principal compound in those products, anatabine citrate.  The Company's corporate intent is to embrace the biotech landscape as it focuses on a range of wellness products, both in the nutraceutical and pharmaceutical areas.  At the same time, the Company will continue to explore licensing opportunities for its patented StarCured® tobacco curing process and for its related low-TSNA dissolvable tobacco products and technology. 

Certain statements contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions. The statements in this release are based upon the current beliefs and expectations of our company's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Numerous factors could cause or contribute to such differences, including, but not limited to, results of clinical trials and/or other studies, the challenges inherent in new product development initiatives, including the continued development and market acceptance of our nutraceutical dietary supplements products, the effect of any competitive products, our ability to license and protect our intellectual property, our ability to raise additional capital in the future that is necessary to maintain our business, changes in government policy and/or regulation, potential litigation by or against us and any governmental review of our products or practices, as well as other risks discussed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our annual report on Form 10-K for the fiscal year ended December 31, 2012. We undertake no duty to update any forward-looking statement or any information contained in this press release or in other public disclosures at any time.

About Star Scientific Star Scientific, Inc. is a technology-oriented company with a mission to promote maintenance of a healthy metabolism and lifestyle. Over the last several years, through its wholly owned subsidiary, Rock Creek Pharmaceuticals, Star Scientific has been engaged in the manufacturing, sale, and marketing of two nutraceutical dietary supplements, and the development of other nutraceuticals and pharmaceuticals. The company also continues to pursue the licensing of the technology behind its proprietary StarCured® curing process and its related products. Rock Creek Pharmaceuticals has scientific and research offices in Gloucester, MA, and a regulatory office in Washington, DC. Star Scientific has a Corporate and Sales Office in Glen Allen, VA, and an Executive, Scientific & Regulatory Affairs office in Washington, DC.

Contact: Talhia T. Tuck Vice President, Communications and Investor Relations Star Scientific, Inc. (202)887-5100

SOURCE Star Scientific, Inc.