AVI BioPharma, Inc. (NASDAQ: AVII)
- Completed Enrollment With All Patients Receiving Ongoing Doses
in Phase IIB Study of Eteplirsen, the Company's Lead Exon-Skipping
Therapeutic Candidate for the Treatment of Duchenne Muscular
Dystrophy
- Completed Final Dosing Following Positive Safety Results in
Initial Cohorts of Phase I Trials of AVI-6002 and AVI-6003, AVI's
Lead Drug Candidates for the Treatment of Ebola and Marburg,
Respectively
AVI BioPharma, Inc. (NASDAQ: AVII), a developer of RNA-based
therapeutics, today reported financial results for the three and
nine months ended September 30, 2011, and provided an update of
recent corporate developments.
"In the past quarter, significant developments have taken place
for our DMD and infectious diseases programs, including continued
dosing of our fully-enrolled Phase IIB clinical study of eteplirsen
in DMD patients and the promising interim safety data reported for
our Ebola and Marburg therapeutic candidates," said Chris
Garabedian, President and CEO of AVI. "These accomplishments
validate our unique PMO-based chemistries and continue to enable
the development of our therapeutics to treat life-threatening
diseases."
Financial Results For the third quarter of
2011, AVI reported an operating loss of $11.3 million compared with
an operating loss of $3.8 million in the third quarter of 2010. The
increase in the quarterly operating loss was primarily the result
of increased research and development expenses of $6.5 million and
lower government contract revenue of $1.2 million.
Research and development expenses were $15.6 million in the
third quarter of 2011 compared to $9.1 million in the third quarter
of 2010, an increase of $6.5 million. The increase was primarily
due to a $4.4 million increase in DMD-related program costs, a $3.4
million increase in spending related to the Ebola Marburg
government contract and a $1.6 million increase in other
non-government projects. These increases were partially offset by
$2.6 million in reduced spending for the H1N1 government contracts
which concluded in 2011.
General and administrative expenses in the third quarter of 2011
were $3.2 million, compared to $3.4 million in the third quarter of
2010.
Revenue for the third quarter of 2011 decreased $1.2 million to
$7.5 million from the third quarter of 2010 as a result of $5.8
million in lower revenue from the H1N1 contracts and the 2006
government contracts. This decrease was partially offset by a $4.6
million increase in revenue from the Ebola Marburg government
contract.
In the first nine months of 2011, the operating loss was $26.9
million, compared with an operating loss of $19.2 million in the
first nine months of 2010. The increase in the operating loss was
the result of increased research and development expenses of $26.1
million and increased general and administrative costs of $1.1
million, partially offset by increased revenue of $19.5
million.
Research and development expenses were $48.2 million in the
first nine months of 2011, compared to $22.1 million in the first
nine months of 2010, an increase of $26.1 million. The increase was
primarily due to a $20.5 million increase in spending related to
the Ebola Marburg government contract, a $5.3 million increase in
DMD-related program costs and $3.3 million in non-government
projects and other research and development costs. This increase
was partially offset by a $3.0 million decrease in spending on
AVI's H1N1 and 2006 government contracts.
General and administrative expenses in the first nine months of
2011 were $12.1 million, compared to $11.0 million in the first
nine months of 2010, an increase of $1.1 million. The increase is
primarily due to $3.3 million in salaries, severance and employee
related costs, $0.4 million in higher costs for professional
services, and $0.3 million in increased costs for facilities. These
increases were partially offset by a $2.6 million decrease in
severance related costs for the former chief executive officer that
were incurred in the first nine months of 2010 and $0.3 million in
lower legal fees in the first nine months of 2011.
Revenue for the first nine months of 2011 increased to $33.4
million from $13.9 million in the first nine months of 2010
primarily as a result of the increased revenue associated with the
Ebola Marburg government contract.
The net loss for the third quarter of 2011 was $4.0 million, or
$0.03 per share, compared to a net loss for the third quarter of
2010 of $7.3 million, or $0.07 per share. The $3.3 million decrease
was due to a $10.6 million variance resulting from the decrease in
the valuation of certain warrants described below, offset by a $7.5
million increase in the operating loss. The net loss for the first
nine months of 2011 was $0.9 million, or $0.01 per share, compared
to a net loss for the first nine months of 2010 of $24.5 million,
or $0.22 per share. The $23.6 million decrease was due to a $31.1
million variance resulting from the decrease in the valuation of
certain warrants described below, offset by a $7.7 million increase
in the operating loss.
In connection with prior equity financings, AVI issued warrants
that are classified as current liabilities and are adjusted to fair
value on a quarterly basis with the change in fair value being
included in net income (loss). The amount of the warrant liability
is primarily affected by changes in AVI's stock price during each
financial reporting period which causes the warrant liability to
fluctuate as the market price of AVI's stock fluctuates. In the
third quarter of 2011, the warrant valuation decreased by $7.1
million compared to an increase in the warrant valuation of $3.6
million in the third quarter of 2010. In the first nine months of
2011, the warrant valuation decreased by $25.6 million compared to
an increase in the warrant valuation of $5.5 million in the first
nine months of 2010.
AVI had cash and cash equivalents of $46.4 million as of
September 30, 2011, an increase of $12.8 million from December 31,
2010. This increase was primarily due to the $32.1 million in net
proceeds raised in the April 2011 equity financing partially offset
by cash used in operations during the first nine months of 2011 of
$18.0 million, and cash used for property and equipment purchases
and patent-related costs of $1.5 million.
Recent Corporate Developments
Duchenne Muscular Dystrophy (DMD) Program
- Completed enrollment of the Phase IIB trial of eteplirsen with
all patients receiving multiple doses in this placebo-controlled
study in ambulatory DMD patients taking place at Nationwide
Children's Hospital in Columbus, Ohio.
- Presented comparative pharmacokinetics (PK) data in primates
and humans from AVI's lead drug candidate, eteplirsen, for treating
DMD patients, at the 16th International World Muscle Society
Congress.
Infectious Disease Programs
- Completed dosing of 9.0 mg/kg in the sixth and final cohorts of
healthy volunteers following positive safety results from the first
five cohorts, which evaluated doses from 0.01 mg/kg to 6.0 mg/kg in
these Phase I single ascending dose trials of AVI-6002 and
AVI-6003, AVI's lead drug candidates for the treatment of Ebola and
Marburg viruses, respectively.
- Presented efficacy data in oseltamivir-resistant H1N1 infected
ferrets and toxicity and toxicokinetic data from its lead
therapeutic candidate AVI-7100, at the 51st Interscience Conference
on Antimicrobial Agents and Chemotherapy (ICAAC) Annual
Meeting.
- Presented data from AVI-6003 single ascending-dose study
program for Marburg at the 49th Annual Meeting of Infectious
Diseases Society of America.
2011 Guidance AVI anticipates that its
full year 2011 revenue will be in the $40 million to $50 million
range due to the requirement to finalize the Ebola and Marburg
contract modification with respect to costs and timing of
activities, which was signed September 26, 2011. This modification,
though it does not impact the total revenue AVI expects to receive
under the contract, resulted in a delay of certain third party
manufacturing, preclinical and clinical activities, which shifted
some revenue from the latter part of 2011 into 2012. This deferral
of revenue impacts the expected overall net contribution from the
government contracts in 2011 and, therefore, AVI is increasing its
2011 cash burn guidance to the $30 million to $35 million range.
AVI believes it will continue to receive funding from government
contracts and has assumed certain revenue from these awards in
providing this guidance. If AVI does not continue to receive the
funding from its current contracts, its guidance may change.
Conference Call AVI BioPharma will hold a
financial results and corporate update conference call today at
5:00 p.m., Eastern Time (2:00 p.m., Pacific Time). The conference
call may be accessed by dialing 866.314.5050 for domestic callers
and 617.213.8051 for international callers. The passcode for the
call is 97800942. Please specify to the operator that you would
like to join the "AVI BioPharma third quarter 2011 earnings call."
The conference call will be webcast live under the events section
of AVI's website at www.avibio.com, and will be archived there
following the call for 90 days. Please connect to AVI's website
several minutes prior to the start of the broadcast to ensure
adequate time for any software download that may be necessary. An
audio replay will be available through November 10, 2011 by calling
888.286.8010 or 617.801.6888 and entering access code 42274933.
About AVI BioPharma AVI BioPharma is
focused on the discovery and development of novel RNA-based
therapeutics for rare and infectious diseases, as well as other
select disease targets. Applying pioneering technologies developed
and optimized by AVI, the Company is able to target a broad range
of diseases and disorders through distinct RNA-based mechanisms of
action. Unlike other RNA-based approaches, AVI's technologies can
be used to directly target both messenger RNA (mRNA) and precursor
messenger RNA (pre-mRNA) to either down-regulate (inhibit) or
up-regulate (promote) the expression of targeted genes or proteins.
By leveraging its highly differentiated RNA-based technology
platform, AVI has built a pipeline of potentially transformative
therapeutic agents, including eteplirsen (the non-proprietary name
for AVI-4658), which is in clinical development for the treatment
of Duchenne muscular dystrophy, and multiple drug candidates that
are in clinical development for the treatment of infectious
diseases. For more information, visit www.avibio.com.
Forward-Looking Statements and Information
In order to provide AVI's investors with an understanding of its
current results and future prospects, this press release contains
statements that are forward-looking. Any statements contained in
this press release that are not statements of historical fact may
be deemed to be forward-looking statements. Words such as
"believes," "anticipates," "plans," "expects," "will," "intends,"
"potential," "possible" and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements include statements about the development of AVI's
product candidates, AVI's estimates regarding its future revenue
and expenses and expectations regarding future success, revenue and
funding from government and other sources.
These forward-looking statements involve risks and
uncertainties, many of which are beyond AVI's control. Known risk
factors include, among others: clinical trials may not demonstrate
safety and efficacy of any of AVI's drug candidates and/or AVI's
antisense-based technology platform; development of any of AVI's
drug candidates, including AVI-6002 or AVI-6003, may not result in
funding from the U.S. government in the anticipated amounts or on a
timely basis, if at all; and any of AVI's drug candidates may fail
in development, may not receive required regulatory approvals, or
be delayed to a point where they do not become commercially
viable.
Any of the foregoing risks could materially and adversely affect
AVI's business, results of operations and the trading price of
AVI's common stock. For a detailed description of risks and
uncertainties AVI faces, you are encouraged to review the official
corporate documents filed with the Securities and Exchange
Commission. AVI does not undertake any obligation to publicly
update its forward-looking statements based on events or
circumstances after the date hereof.
AVI BIOPHARMA, INC.
(A Development-Stage Company)
STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Revenues from license fees,
grants and research contracts $ 7,524 $ 8,702 $ 33,405 $ 13,903
Operating expenses:
Research and development 15,610 9,059 48,161 22,080
General and administrative 3,185 3,440 12,171 11,017
--------- --------- --------- ---------
Operating loss (11,271) (3,797) (26,927) (19,194)
Other income (loss):
Interest (expense) income
and other, net 199 82 440 170
(Increase) decrease on
warrant valuation 7,052 (3,578) 25,579 (5,509)
--------- --------- --------- ---------
Net loss
$ (4,020) $ (7,293) $ (908) $ (24,533)
Net loss per share --
basic and diluted $ (0.03) $ (0.07) $ (0.01) $ (0.22)
========= ========= ========= =========
Shares used in per share
calculations -- basic and
diluted 135,738 111,767 127,523 110,863
========= ========= ========= =========
SELECTED BALANCE SHEET DATA
(unaudited)
(in thousands)
September 30, December 31,
2011 2010
------------- -------------
Cash and cash equivalents $ 46,356 $ 33,589
Total current assets 51,945 37,838
Total assets 61,083 45,976
Total current liabilities 26,531 45,857
Total shareholders' equity (deficit) 31,752 (2,817)
AVI Investor and Media Contact: Erin Cox 425.354.5140 Email
Contact AVI Media Contact: David Schull Russo Partners 858.717.2310
or 212.845.4271 Email Contact
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