INHX Inhibitex, Inc. (MM)

Inhibitex, Inc. (NASDAQ:INHX) today announced its financial results for the first quarter ended March 31, 2010. The Company also announced that it has initiated a Phase I single ascending dose trial of INX-189, its lead HCV nucleotide polymerase inhibitor, in healthy volunteers under an Investigational New Drug application (IND) with the U.S. Food and Drug Administration (FDA).

“We are pleased with the progress made with both of our internally-driven antiviral development programs over the past quarter,” stated Russell H. Plumb, President and CEO of Inhibitex, Inc. “Our IND for INX-189 is now in effect and we have initiated a first-in-man study to evaluate its safety and pharmacokinetics. We have also completed two-thirds of the planned enrollment in our ongoing Phase II trial of FV-100, and continue to anticipate that top-line data from the completed trial will be available in the fourth quarter of 2010.”

First Quarter Financial Results

As of March 31, 2010, the Company held $34.1 million in cash, cash equivalents and short-term investments. The Company had a net loss in the first quarter of $4.8 million, as compared to a net loss of $4.2 million in the first quarter of 2009. Basic and diluted net loss per share was $0.08 for the first quarter of 2010 as compared to $0.10 in the first quarter of 2009. The increase in net loss in the first quarter of 2010 was the result of higher research and development expense and lower net interest income, offset in part by higher revenues from a collaborative license and development agreement and a slight reduction in general and administrative expense. The decrease in net loss per share for the first quarter of 2010 was the result of an increase in the number of weighted-average shares outstanding as compared to 2009.

Revenue increased to $1.0 million in the first quarter of 2010 from $0.3 million in the first quarter of 2009. The $0.7 million increase was primarily the result of a milestone payment earned by the Company in January 2010.

Research and development expense increased to $4.8 million in the first quarter of 2010 from $3.5 million in the first quarter of 2009, due to a $1.4 million increase in direct costs primarily incurred in connection with the preclinical development of INX-189 and to a lesser extent, the clinical development of FV-100, offset in part by a $0.1 million decrease in non-direct expenses.

General and administrative expense decreased to $1.0 million in the first quarter of 2010 from $1.1 million in the first quarter of 2009. The decrease of $0.1 million was primarily the result of a reduction in various recurring corporate expenses.

Recent Corporate Developments

FV-100 - In April 2010, the independent Data Safety Monitoring Board (DSMB) responsible for reviewing data from the Company’s ongoing Phase II clinical trial of FV-100 met, as scheduled, after the Company had provided it with 30-day follow-up safety data on the first half of the patients that the Company plans to enroll in the trial. Based upon its review, the DSMB unanimously recommended that the trial should continue, as originally designed, without modification. The Company also reported that a prospectively described interim analysis of the primary efficacy endpoint was conducted by an independent statistician on the first half of the patients to be enrolled in the trial, and, as expected, the statistician recommended that the trial continue to completion as designed.

INX-189 - The Company announced that it has initiated a Phase I double-blind, placebo-controlled, single ascending dose study to evaluate the safety and pharmacokinetics of INX-189 in healthy volunteers under an IND that was filed earlier this year with the FDA. The study, which is being conducted in the U.S., will evaluate up to six escalating doses of INX-189, ranging from 3 mg up to 200 mg. Each dose cohort will include eight subjects, six of which will receive INX-189 and two that will receive placebo.

Staphylococcal Vaccine - In January 2010, the Company announced that its licensee and collaborator, Pfizer, Inc., had initiated recruitment for a randomized, double-blind Phase I clinical trial to evaluate the safety, tolerability, and immunogenicity of three ascending dose levels of a 3-antigen Staphylococcus aureus (S. aureus) vaccine (SA3Ag) in 408 healthy adults. The vaccine contains an antigen originating from the Company’s proprietary MSCRAMM® protein platform. Pfizer is responsible for all clinical development, manufacturing and marketing of the vaccine. In January, the Company earned a payment of $0.7 million upon the achievement of this milestone and is eligible to receive future regulatory milestones, as well as royalties on any future net sales.

Conference Call and Webcast Information

Russell H. Plumb, President and Chief Executive Officer of Inhibitex, and other members of management will review the Company’s first quarter operating results and financial position, as well as provide a general update on the Company via a webcast and conference call today at 9:00 a.m. EDT. To access the conference call, dial (877) 407-8031 (domestic) or (201) 689-8031 (international). A replay of the call will be available from 11:00 a.m. EDT on May 14 until June 13, 2010 at midnight. To access the replay, please dial (877) 660-6853 (domestic) or (201) 612-7415 (international) and reference the account # 286 and the conference ID # 350196. A live audio webcast of the call and the archived webcast will be available under the News and Events category on the Inhibitex website at http://www.inhibitex.com.

About Shingles and FV-100

The Company is developing FV-100 to treat herpes zoster, also commonly referred to as shingles. Shingles is an infection caused by the reactivation of varicella zoster virus (VZV), the same virus that causes chicken pox. Worldwide, it is estimated that more than 2.5 million new cases of shingles occur each year.

Published in vitro studies have demonstrated that FV-100, an orally available nucleoside analogue, is significantly more potent against VZV, and can inhibit its replication substantially faster than any other antiviral agent currently approved for the treatment of shingles. Inhibitex believes these characteristics, plus a favorable pharmacokinetic profile in Phase I studies, support the potential of FV-100 as a highly potent, once-daily oral therapy to reduce the incidence and severity of shingles-related symptoms, including acute pain and PHN.

About HCV and INX-189

Hepatitis C is a disease of the liver caused by the hepatitis C virus (HCV). It is estimated that over 4 million Americans and 170 million individuals worldwide are infected with HCV, the majority of which represent chronic infections that can cause liver disease, cirrhosis and cancer, and is the leading cause of liver transplants in the United States.

Inhibitex is developing a series of proprietary protides of nucleoside inhibitors that target the RNA-dependent RNA polymerase (NS5b) of HCV. The Company believes that its protides possess several pharmacological advantages over nucleosides alone, including greater potency, a more rapid conversion into its active form in the liver and potentially less toxicity due to reduced systemic exposure of the nucleoside. INX-189 is a protide of a 2’-C-methylguanosine analogue, which the Company believes is the most potent HCV nucleotide polymerase inhibitor described in the literature to date. The Company believes that preclinical studies of INX-189 support its potential as a highly potent, once-per-day oral therapy highly amenable to combination with other antivirals for the treatment of patients with chronic hepatitis C infection.

About Inhibitex

Inhibitex, Inc., headquartered in Alpharetta, Georgia, is a biopharmaceutical company focused on developing products to treat and prevent serious infectious diseases. In addition to FV-100, INX-189 and other HCV nucleotide inhibitors in preclinical development, the Company has licensed the use of its proprietary MSCRAMM® protein platform to Pfizer for the development of staphylococcal vaccines.

For additional information about the Company, please visit www.inhibitex.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than historical facts included in this press release, including statements regarding: the anticipated time when top line data from the ongoing Phase II clinical trial of FV-100 will be available; the potential for FV-100 to be dosed once-per-day and reduce the incidence and severity of shingles-related symptoms, including acute pain and PHN; the number of doses the Company intends to evaluate in its Phase I single ascending dose study of INX-189; the Company’s belief that its HCV protides possess several pharmacological advantages over nucleosides alone; and the results of preclinical studies of INX-189 supporting its potential as a highly potent, once-per-day oral therapy highly amenable to combination with other antivirals for the treatment of patients with chronic hepatitis C infection; are forward looking statements. These intentions, expectations, or results may not be achieved in the future and various important factors could cause actual results or events to differ materially from the forward-looking statements that the Company makes, including the risk of: either the Company, the FDA, a data safety monitoring board or an investigational review board suspending or terminating the clinical development of FV-100 for lack of safety, manufacturing issues or other reasons; FV-100 not demonstrating sufficient efficacy in reducing the incidence and severity of shingles-related symptoms, including acute pain and PHN, to be clinically relevant or commercially viable; the results of ongoing or future preclinical or clinical studies of INX-189 not supporting its further development for lack of safety or other reasons, or not demonstrating any significant benefits over nucleosides alone or other nucleotide prodrugs; either the Company, the FDA, a data safety monitoring board or an investigational review board suspending or terminating the clinical development of INX-189 for lack of safety, manufacturing issues or other reasons; obtaining, maintaining and protecting the intellectual property incorporated into and supporting the commercial viability of the Company’s product candidates; and other cautionary statements contained elsewhere herein and in its Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission, or SEC, on March 26, 2010. Given these uncertainties, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release.

There may be events in the future that the Company is unable to predict accurately, or over which it has no control. The Company's business, financial condition, results of operations and prospects may change. The Company may not update these forward-looking statements, even though its situation may change in the future, unless it has obligations under the Federal securities laws to update and disclose material developments related to previously disclosed information. The Company qualifies all of the information contained in this press release, and particularly its forward-looking statements, by these cautionary statements.

Inhibitex® and MSCRAMM® are registered trademarks of Inhibitex, Inc.

INHIBITEX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

    March 31, December 31,   2010     2009     ASSETS Current assets: Cash and cash equivalents $ 8,557,326 $ 11,290,332 Short-term investments 25,515,213 26,625,496 Prepaid expenses and other current assets 852,235 831,196 Accounts receivable   126,985     61,062   Total current assets 35,051,759 38,808,086 Property and equipment, net. 1,502,332 1,621,392 Other long-term assets   37,606     40,290   Total assets $ 36,591,697   $ 40,469,768       LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 2,373,157 $ 1,590,804 Accrued expenses 1,741,496 1,537,637 Current portion of notes payable 60,764 78,125 Current portion of capital lease obligations 212,902 207,100 Current portion of deferred revenue 191,667 191,667 Other current liabilities   227,386     202,531   Total current liabilities 4,807,372 3,807,864 Long-term liabilities: Notes payable, net of current portion 486,111 546,875 Capital lease obligations, net of current portion 125,335 180,792 Deferred revenue, net of current portion 50,000 87,500 Other liabilities, net of current portion   1,043,347     1,096,629   Total long-term liabilities   1,704,793     1,911,796   Total liabilities 6,512,165 5,719,660 Stockholders' equity: Preferred stock, $.001 par value; 5,000,000 shares authorized at December 31, 2009 and December 31, 2008; none issued and outstanding — — Common stock, $.001 par value; 150,000,000 shares authorized at March 31, 2010 and December 31, 2009, respectively; 61,562,606 and 61,559,782 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively 61,563 61,560 Common stock warrants 12,133,216 12,133,216 Accumulated other comprehensive (loss) income (5,490 ) 8,977 Additional paid-in capital 267,569,613 267,432,572 Accumulated deficit   (249,679,370 )   (244,886,217 ) Total stockholders' equity   30,079,532     34,750,108   Total liabilities and stockholders' equity

$

36,591,697

 

$

40,469,768

     

INHIBITEX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

  Three Months Ended March 31,   2010         2009   Revenue: License fees and milestones $ 749,167 $ 37,500 Collaborative research and development   250,000     250,000   Total revenue 999,167 287,500 Operating expense: Research and development 4,789,615 3,497,060 General and administrative   1,024,041     1,071,490   Total operating expense   5,813,656     4,568,550   Loss from operations (4,814,489 ) (4,281,050 ) Other income (loss), net 3,520 (8,151 ) Interest income, net   17,816     93,518  

Net loss

$

(4,793,153

)

$

(4,195,683

)

   

Basic and diluted net loss per share

$ (0.08 ) $ (0.10 )   Weighted average shares used to compute basic and diluted net loss per share.   61,561,030     43,427,976