AVI BioPharma, Inc. (NASDAQ: AVII), a developer of RNA-based drugs,
today reported financial results for the three and nine months
ending September 30, 2009. The Company will host a conference call
today, Monday, November 9, at 9:30 a.m. Eastern time (6:30 a.m.
Pacific) to review its financial results and corporate highlights
(see below for details).
Revenues for the third quarter of 2009 were $6.3 million,
compared to $5.2 million in the prior-year period, reflecting
increases in research contract revenues of $1.1 million. Revenues
for the first nine months of 2009 were $12.4 million, compared to
$15.8 million in the first nine months of 2008, reflecting
decreases in research contract revenues of $3.4 million.
The operating loss for the three months ended September 30, 2009
decreased to $2.9 million from an operating loss of $5.9 million
from the same period in the prior year. The operating loss for the
nine months ended September 30, 2009 decreased to $11.6 million
from $24.6 million for the prior year period. The operating loss
for the third quarter declined as the result of lower general and
administrative costs associated with the resignation of former
executive officers and relocation costs of new executive officers
in 2008. Additionally, the operating loss reduction for the nine
month period reflects the $9.9 million expense for acquired
in-process research and development from the Ercole acquisition
only in 2008 and lower spending in 2009 on research and development
related primarily to government research contracts.
The net loss for the third quarter of 2009 was $8.1 million, or
$(0.08) per share, compared with a net loss for the third quarter
of 2008 of $6.0 million, or $(0.08) per share. The net loss for the
third quarter of 2009 includes a non-cash expense for warrant
valuation liability of $5.0 million compared to an expense from the
same source of $0.2 million during the third quarter of 2008. For
the nine months ending September 30, 2009, the Company reported a
net loss of $28.7 million, or $(0.33) per share, compared with a
net loss for the comparable period in 2008 of $22.8 million, or
$(0.33) per share. The net loss for the nine months ending
September 30, 2009 includes a non-cash expense for warrant
valuation liability of $17.0 million compared to a gain of $1.4
million during the same period of 2008. The increase on warrant
valuation is a non-cash expense and results from the increase in
the Company's stock price subsequent to the issuance of warrants as
a part of the equity financings that closed in January and August
of 2009. The increase or decrease on the warrant valuation will
fluctuate as the market price of the Company's stock fluctuates.
The warrant valuation liability is a non-cash liability and the
Company is not required to expend any cash to settle this warrant
valuation liability.
Research and development (R&D) expenses for the third
quarter of 2009 decreased to $7.5 million from $7.7 million during
the third quarter of 2008. R&D expenses for the nine months
ending September 30, 2009 decreased to $17.8 million from $22.3
million in the prior-year period. The decrease in R&D expenses
for the three and nine month periods ending September 30, 2009 was
due primarily to decreases in government research contracting costs
associated with the decline in government research contract
revenue.
General and administrative (G&A) expenses for the third
quarter of 2009 decreased to $1.8 million, from $3.4 million in the
comparable prior year period. G&A expenses in the nine months
ending September 30, 2009 decreased to $6.2 million from $8.2
million in the prior-year period. The G&A expense decrease for
the current year compared to the prior year periods is due
primarily to stock compensation expenses incurred in the prior-year
periods related to the Ercole acquisition and the resignation of
former executive officers and relocation costs of new executive
officers.
AVI had cash, cash equivalents and short-term securities of
$50.4 million as of September 30, 2009, an increase of $38.9
million from December 31, 2008. This increase was primarily due to
two equity financings that raised net proceeds of $47.8 million,
partially offset by cash used in operations of $7.7 million,
property and equipment and patent-related costs of approximately
$1.0 million, and all other cash usage of $0.2 million.
"We continue to make good progress in recruitment and dose
escalation in our ongoing systemic trial in Duchenne muscular
dystrophy and are on course for intermediate data by years' end,"
said Leslie Hudson, Ph.D., President and Chief Executive Officer.
"With regard to AVI-5126, we believe that Cook's Global
Therapeutics Company has no further plans for development of the
drug-eluting stent utilizing AVI-5126."
Third Quarter and Recent Corporate Highlights & Updates:
Cook's Global Therapeutics Trial
-- We believe that further clinical development of a next-generation drug-
eluting stent using AVI-5126, which is licensed to Global Therapeutics, a
Cook Medical Company, has been discontinued because of an unexpectedly high
rate of restenosis. An ongoing, prospective, open label, multi-center
feasibility trial of the stent being conducted in Germany by Cook is
expected to be closed out within several weeks. Recruiting of patients was
terminated in the third quarter and Cook Medical is currently following up
patients who have not yet reached the final assessment point at 6 months
post treatment. Once follow up and analysis have been completed, AVI will
have access to the clinical data.
Duchenne Muscular Dystrophy
-- The ongoing open-label, systemic Phase 1b/2 clinical trial of exon
skipping AVI-4658 in patients with Duchenne muscular dystrophy is currently
on course for intermediate data analysis and release during the fourth
quarter of this year. Data to be assessed include in vitro response of
patients to drug, RNA-based analysis and protein expression data.
-- Results and scientific findings of a Phase 1 clinical trial assessing
the "proof of concept" and safety of AVI-4658 in patients with DMD were
published in the journal, Lancet Neurology. These findings, which show that
treatment with AVI-4658 was safe and effective in inducing dystrophin
expression, suggest that AVI-4658 could have promise as a drug for the
treatment of DMD.
-- Full data from the completed Phase 1 clinical trial of AVI-4658 in
patients with DMD was presented at the 14th Annual International Congress
of the World Muscle Society in Geneva, Switzerland. The Company also
presented preliminary safety data from AVI's current systemic Phase 1b/2
clinical trial of AVI-4658 in patients with DMD at the same meeting. This
presentation highlighted the study's early findings, which showed AVI-4658
to be well tolerated in patients in the first two completed dosing cohorts
and the study's three ongoing dosing cohorts, where there have been no
confirmed, drug-related adverse events or safety issues.
-- An update on preliminary safety data from the ongoing systemic Phase
1b/2 clinical trial of the exon skipping drug AVI-4658 in patients with
Duchenne muscular dystrophy (DMD) was presented at the 7th Annual Action
Duchenne Conference in London, UK. The most recent data from the ongoing
Phase 1b/2 trial at two MDEX sites in the UK demonstrate that AVI-4658 was
well tolerated by DMD patients in a dose escalation study that has now
started its sixth and final cohort (20 mg/kg).
-- Research findings were published in Molecular Therapy demonstrating
dramatic effects of exon skipping peptide-linked phosphorodiamidate
morpholino oligomer (PPMO) in the prevention and treatment of severely
affected, dystrophin and utrophin-deficient mice, preventing severe
deterioration of the treated animals and extending their lifespan.
BioDefense, Immunology & Anti-infectives
-- An expanded contract funding of approximately $11.5 million was
received from the Defense Threat Reduction Agency's (DTRA) Transformational
Medical Technologies Initiative (TMTI) to support development of the
Investigational New Drug data package for its candidate drug, AVI-7012, to
treat Junin virus infection. To date, the United States Department of
Defense has contracted with AVI for work potentially worth up to $45.4
million for the development of AVI's RNA-based drug candidates to treat
Ebola, Marburg and Junin virus infections (AVI-6002, AVI-6003 and AVI-7012,
respectively).
-- The Company currently has a total of $61.7 million of contracted
development studies. As of September 30, 2009, $44 million has been
billed, of which $38.3 million has been received in cash and $5.7 million
is in accounts receivable. The Company has $17.7 in development contracts
remaining that have not yet been completed and have not been billed. The
Company expects to complete the remaining contract activity and receive the
contracted revenue in 2010 and early 2011.
-- Research work is being performed under AVI's contract with the U.S.
Defense Threat Reduction Agency (DTRA) for development of RNA-based
candidate drugs targeting H1N1 swine flu. The Company is proceeding with
mouse and ferret studies to select lead drug candidates.
-- Data regarding the Company's antisense technology for productive
control of the immune response in hemorrhagic virus infections, including
Ebola and Marburg virus, was presented at the 49th Interscience Conference
on Antimicrobial Agents and Chemotherapy (ICAAC) in San Francisco. These
preclinical studies demonstrated that AVI's specific peptide conjugated
phosphorodiamidate morpholino oligomers (PPMO) targeting innate and
adaptive immune responses can diminish hemorrhagic viral pathogenesis and
dramatically increase host survival rates in mouse lethal challenge
studies. Such studies demonstrate the potential of the Company's RNA-based
therapeutics to control the immune response in hemorrhagic virus
infections, including Ebola and Marburg virus.
Research
-- Research demonstrating the ability of a PPMO therapy to prevent the
onset of cardiomyopathy in a mouse model of DMD was published in the
journal Cardiovascular Research . The paper was authored by researchers at
the University of North Carolina at Chapel Hill and AVI.
Corporate
-- AVI's corporate headquarters and much of its R&D team was moved to the
greater Seattle area. Activities in Corvallis are centered on biodefense
and drug supply through outsourced manufacturing as well as the technical
development of manufacturing processes. In the Seattle area location,
chemistry and biology labs are in operation and research teams in place.
-- Closed a public offering of 24,295,775 shares of common stock and
warrants to purchase an additional 9,718,310 shares of common stock for
gross proceeds of approximately $34.5 million.
Guidance:
For 2009, AVI confirms its guidance for expenditures for
operations, net of government funding and other collaborative
efforts, to be approximately $10 to $12 million. The Company
believes it will continue to receive funding from government and
other sources to pursue the development of product candidates, and
has assumed certain revenues from these awards in providing this
guidance. If the Company does not continue to receive the funding
from its current contracts, this might have a negative impact on
this guidance.
Conference Call
AVI management will hold a conference call to report second
quarter 2009 financial results on Monday, November 9, 2009, 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 877-591-4956 toll free within the United
States and Canada, or 719-325-4775 for international callers.
A replay of the call will be available by dialing 888-203-1112
toll free within the U.S. and Canada or 719-457-0820 for
international callers. The passcode for the replay is 4369547. In
addition, a recording of the call will be available within
approximately 24 hours at www.avibio.com.
About AVI BioPharma
AVI BioPharma is focused on the discovery and development of
RNA-based drugs utilizing proprietary derivatives of its antisense
chemistry (morpholino-modified phosphorodiamidate oligomers or
PMOs) that can be applied to a wide range of diseases and genetic
disorders through several distinct mechanisms of action. Unlike
other RNA therapeutic approaches, AVI's antisense technology has
been used to directly target both messenger RNA (mRNA) and its
precursor (pre-mRNA), allowing for both up- and down-regulation of
targeted genes and proteins. AVI's RNA-based drug programs are
being evaluated for the treatment of Duchenne muscular dystrophy as
well as for the treatment of cardiovascular restenosis through our
partner Global Therapeutics, a Cook Group Company. AVI's antiviral
programs have demonstrated promising outcomes in Ebola Zaire and
Marburg Musoke virus infections and may prove applicable to other
viral targets such as influenza, HCV or Dengue viruses. For more
information, visit 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)
(unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Revenues from license fees,
grants and research contracts $ 6,349 $ 5,171 $ 12,444 $ 15,778
Operating expenses:
Research and development 7,473 7,680 17,771 22,261
General and administrative 1,800 3,429 6,226 8,165
Acquired in-process
research and development - - - 9,916
--------- --------- --------- ---------
Operating loss (2,924) (5,938) (11,553) (24,564)
Other income (loss):
Interest (expense) income
and other, net (127) 60 (142) 308
(Increase) decrease on
warrant valuation (5,039) (169) (16,989) 1,444
--------- --------- --------- ---------
Net loss $ (8,090) $ (6,047) $ (28,684) $ (22,812)
========= ========= ========= =========
Net loss per share -- basic
and diluted $ (0.08) $ (0.08) $ (0.33) $ (0.33)
========= ========= ========= =========
Shares used in per share
calculations 95,261 71,151 87,493 69,160
========= ========= ========= =========
BALANCE SHEET HIGHLIGHTS
(unaudited)
(in thousands)
September 30, December 31,
2009 2008
------------- -------------
Cash, cash equivalents and short-term
securities $ 50,437 $ 11,474
Total current assets 56,947 17,044
Total assets 65,123 25,536
Total current liabilities 43,059 7,288
Total shareholders' equity $ 19,504 $ 15,732
AVI Press and Investor Contact: Julie Rathbun Investor Relations
(541) 224-2575 Investorrelations@avibio.com
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