PORTLAND, OR today reported financial results for the three
months ending March 31, 2008.
Revenues for the first quarter of 2008 were $5.6 million, up
from $536,000 in the first quarter of 2007, reflecting an increase
in research contracts revenues of $5.1 million, partially offset by
a decrease in grant revenues of $19,500. The net loss for the first
quarter of 2008 was $15.0 million, or $0.23 per share, compared
with a net loss for the first quarter of 2007 of $8.2 million, or
$0.15 per share. The first quarter 2008 net loss included $9.9
million of expense for acquiring in-process research and
development as part of the asset acquisition of Ercole
Biotechnology, Inc. ("Ercole"). Research and development (R&D)
expenses for the quarter increased to $7.5 million from $6.3
million in the first quarter of 2007. The increase reflects
$800,000 in government research contract expense, $580,000 increase
in compensation costs, $402,000 in severance payments to certain
Ercole employees, $400,000 increase in net clinical expenses,
partially offset by a $425,000 decrease in professional consultant
costs, $245,000 decrease in chemical costs, $225,000 decrease in
purchases of government contract related equipment and $190,000
decrease in amortization of patents and leaseholds.
General and administrative (G&A) expenses decreased to $2.0
million from $4.3 million in the prior year period. The decrease
was due primarily to a $2.2 million decrease in employee costs, of
which $1.6 million (including $562,500 in cash compensation and
$1.1 million in SFAS 123R expenses) was related to the Separation
and Release Agreement with the Company's former Chief Executive
Officer during the first quarter of 2007, as well as, a $530,000
decrease in SFAS 123R expenses. G&A expenses also included a
$150,000 decrease in legal expenses.
AVI had cash, cash equivalents and short-term securities of
$20.2 million as of March 31, 2008, a decrease of $4.8 million from
December 31, 2007. This decrease was due primarily to $4.4 million
used in operations and $339,000 used for purchases of equipment and
patent-related costs. This decrease included approximately $900,000
advanced to Ercole for its use in retiring certain of its debts
prior to closing of the Ercole asset purchase.
Corporate Updates
In March of this year, the company announced the acquisition of
Ercole, a pioneer in developing drugs to directed alternative RNA
splicing. AVI and Ercole had collaborated since December 2006 to
develop drug candidates, including AVI-4658, which is in use in a
current DMD study in the U.K.
In April, the company announced Ryszard Kole, Ph.D. as Senior
Vice President of Discovery Research. Dr. Kole, a co-founder and
president of Ercole, is a pioneer in the use of oligonucleotides
for the modulation of splicing.
The company also announced that Patrick Iversen, Ph.D. has
assumed a new role as Senior Vice President of Strategic Alliances.
In this new role, he will manage AVI's ongoing programs in
government contracting and focus the Company's external
collaborator network for the identification of novel drug targets
both for the Company's and external partners' R&D programs.
The company further announced that Hans Wigzell, M.D., Ph.D.
agreed to chair the company's newly formed Corporate Strategy
Board. Dr. Wigzell was President of the Karolinska Institut and
Chairman of the Nobel Committee.
Corporate Priorities
The company has set the following as its corporate
priorities:
-- To advance the Company's clinical development programs in Duchenne
muscular dystrophy (DMD), cardiovascular restenosis and in ebola, marburg,
junin and dengue virus infections.
-- To advance the soluble TNFalphaR2 project through preclinical
development to clinical trials.
-- To complete the portfolio of discovery projects for drug candidates
which direct RNA alternative splicing.
-- And to secure additional major, revenue-producing partnerships to
further validate our portfolio of product candidates.
Reviewing the AVI-4658 DMD program, the company has an ongoing
program in the United Kingdom which started as a small dose
escalation study in the last quarter of last year. The MDEX
consortium, which is running the trial, announced last week that,
given the safety profile, they have requested a protocol
modification to skip to the highest allowed of the three dose
groups. The company views this as a positive development.
In addition, the Medicine and Healthcare Product Regulatory
Agency has indicated that the existing data package should be
sufficient to support a proposed systemic clinical study in
ambulatory DMD patients. We expect that study to commence this
year.
Regarding the company's cardiovascular program, Cook continues
to pursue applications with AVI-5126, the company's PPMO product,
which is being looked at to prevent or reduce restenosis by
delivery in a weeping catheter kit or as part of a coated stent.
The company is supporting Cook with product and analytics and Cook
is performing the required regulatory studies to be able to take
forward their development candidates.
In the company's viral program, the focus has been principally
on efforts with the Department of Defense and in cooperation with
the U.S. Army Medical Research Institute of Infectious Diseases
(USAMRIID).
The company has filed pre-INDs with the FDA on its drugs to
treat Ebola Zaire and Marburg Musoke and is awaiting FDA feedback
on the proposed toxicology program before proceeding to our formal
IND submissions.
Conference Call
AVI BioPharma has scheduled an investor conference call
regarding this announcement, and the company's current and planned
business activities, to be held on May 13, 2008 beginning at 9:30
a.m. Eastern time (6:30 a.m. Pacific time).
Individuals interested in listening to the live conference call
may do so by dialing 866.507.1212 toll free within the United
States and Canada, or 416.695.7848 for international callers.
Following the conference call, a recording of the call will be
available for download (MP3) on the company's website:
www.avibio.com.
About AVI BioPharma
AVI BioPharma develops therapeutic products for the treatment of
life-threatening diseases using third-generation NeuGene� antisense
drugs and ESPRIT directed RNA alternative splicing technology.
AVI's ESPRIT technology is initially being applied to potential
treatments for Duchenne muscular dystrophy. AVI's NeuGene compounds
are also designed to treat cardiovascular restenosis in stent and
coronary artery bypass graft (CABG) procedures. In addition to
targeting specific genes in the body, AVI's antiviral program uses
NeuGene antisense compounds to combat disease by targeting
single-stranded RNA viruses, including Marburg Musoke and Ebola
Zaire viruses. More information about AVI is available at
www.avibio.com.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: The statements that are not historical facts
contained in this release are forward-looking statements that
involve risks and uncertainties, including, but not limited to, the
results of research and development efforts, the results of
preclinical and clinical testing, the effect of regulation by the
FDA and other agencies, the impact of competitive products, product
development, commercialization and technological difficulties, and
other risks detailed in the company's Securities and Exchange
Commission filings.
[Tables to Follow]
AVI BIOPHARMA, INC.
(A Development-Stage Company)
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
2008 2007
------------- -------------
Revenues, from license fees, grants and
research contracts $ 5,624,617 $ 536,042
Operating expenses:
Research and development 7,472,811 6,317,641
General and administrative 1,982,679 4,303,885
Acquired in-process research and
development 9,916,271 -
------------- -------------
19,371,761 10,621,526
Other income:
Interest income, net 167,352 362,509
Gain (loss) on warrant liability (1,434,684) 1,498,691
------------- -------------
Net loss $ (15,014,476) $ (8,224,284)
============= =============
Net loss per share - basic and diluted $ (0.23) $ (0.15)
============= =============
Shares used in per share calculations 65,321,986 53,241,730
============= =============
BALANCE SHEET HIGHLIGHTS
(unaudited)
March 31, December 31,
2008 2007
------------ ------------
Cash, cash equivalents and short-term securities $ 20,235,018 $ 25,074,413
Total current assets 25,363,352 28,711,451
Total assets 35,479,866 38,637,930
Total current liabilities 12,141,612 9,752,329
Total shareholders' equity $ 20,786,138 $ 26,381,748
AVI Press and Investor Contact: Michael Hubbard Email Contact
Director of Corporate Communications (503) 227-0554
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