| • | Enrollment was initiated in a randomized Phase II trial evaluating OGX-427, an
inhibitor of heat shock protein 27, in combination with first-line chemotherapy in patients
with advanced bladder cancer. The double-blind, placebo-controlled, 3-arm, randomized trial
will enroll approximately 180 patients and will be conducted at approximately 45 cancer
centers throughout North America and Europe. |
| • | Abstracts reporting preliminary clinical results on OGX-427 in chemotherapy-naïve,
castrate-resistant prostate cancer and superficial or muscle invasive bladder cancer have
been submitted to the ASCO 2012 Genitourinary Cancers Symposium to be held in February. |
| • | Recruitment remains on target for the SYNERGY Phase III study evaluating the potential
survival benefit of custirsen (OGX-011/TV-1011) in patients with metastatic,
castrate-resistant prostate cancer. SYNERGY is the primary registration trial for market
approval. |
| • | An amendment to the SATURN Phase III Special Protocol Assessment, or SPA, was completed
with the FDA to include cabazitaxel as a second-line chemotherapy option and expand the
criteria for patient enrollment. The SATURN study is designed to evaluate a durable pain
palliation benefit of custirsen in patients who had disease progression while receiving or
after completing 1st-line docetaxel-based treatment. Patient accrual will
continue to be closely monitored to determine the impact of the amendment on SATURN’s
previously reported accrual challenges. |
| • | Revenue for the third quarter was $1.2 million compared with $4.9 million in 2010.
Revenue for the nine months ended September 30, 2011 was $4.3 million compared with $11.3
million in 2010. Revenue is earned through reimbursements received under the collaboration
agreement, as well as recognition of upfront payments we received from Teva. |
| • | Revenue decreased for the third quarter of 2011 due to reduced SATURN
activity while awaiting FDA approval of the SPA amendment that was received in
September 2011. |
| • | Revenue decreased during the nine months ended September 30, 2011 due
to reduced SATURN activity and because custirsen manufacturing activities are now
being paid directly by Teva. |
| • | As of September 30, 2011, $19.0 million of the $30.0 million upfront
payment received from Teva in December 2009 was included in our Balance Sheet as
Deferred Collaboration Revenue, which we are recognizing as we perform our
deliverables under the agreement. We currently expect this performance period to
end in the fourth quarter of 2013. |
| • | Total operating expenses for the third quarter ended September 30, 2011 were $5.3
million compared with $11.8 million in the third quarter of 2010. Total operating expenses
for the nine
months ended September 30, 2011 were $18.6 million compared with $24.1 million during the
same period in 2010.
|
| • | The decrease in operating expenses was primarily due to a non-cash
restructuring expense that was recorded in the third quarter of 2010. That charge
is related to excess facilities in the Bothell headquarters which we acquired
through our reverse merger with Sonus in 2008. |
| • | Net income for the third quarter of 2011 increased to $4.5 million, or $0.45 per
diluted common share, compared to net loss of $6.9 million, or $1.07 per diluted common
share, in the third quarter of 2010. Net loss for the nine months ended September 30, 2011
decreased to $5.1 million, or $0.52 per diluted common share, compared to net loss of $9.8
million, or $1.53 per diluted common share, in the same period of 2010. |
| • | The net income in the third quarter of 2011 is predominantly due to $8.6
million non-cash gain on revaluation of warrants issued as part of our October 2010
financing. |
| • | We had $69.3 million in cash, cash equivalents and short-term investments as of
September 30, 2011, compared to $85.1 million as of December 31, 2010. As of September 30,
2011, we had 9.8 million shares outstanding. |
| • | Revised 2011 cash guidance: |
| • | Net cash requirements are expected to be in the range of $23 million to $27
million; lower than our previous guidance of $31 million to $35 million. |
| • | Year-end cash balance is expected to be in the range of $58 million to $62
million, higher than our previous guidance of $50 million to $54 million. |
| • | Based on our current expectations, we believe our capital resources at
September 30, 2011 will be sufficient to fund our currently planned operations into
2014. |
| Three months | Nine months | |||||||||||||||
| Ended September 30, | Ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Collaboration revenue |
$ | 1,174 | $ | 4,881 | $ | 4,260 | $ | 11,282 | ||||||||
Operating expenses |
||||||||||||||||
Research and development |
3,814 | 6,723 | 14,076 | 16,182 | ||||||||||||
General and administrative |
1,457 | 1,067 | 4,499 | 3,892 | ||||||||||||
Restructuring expense |
— | 4,038 | — | 4,038 | ||||||||||||
Total operating expenses |
5,271 | 11,828 | 18,575 | 24,112 | ||||||||||||
Loss from operations |
4,097 | 6,947 | 14,315 | 12,830 | ||||||||||||
Other income (expense) |
8,567 | 53 | 9,211 | 46 | ||||||||||||
Loss
(income) for the period before taxes |
(4,470 | ) | 6,894 | 5,104 | 12,784 | |||||||||||
Income tax expense (recovery) |
— | — | — | (3,000 | ) | |||||||||||
Net loss (income) |
$ | (4,470 | ) | $ | 6,894 | $ | 5,104 | $ | 9,784 | |||||||
Basic and diluted loss per
common share |
||||||||||||||||
Basic |
(0.46 | ) | 1.07 | 0.52 | 1.53 | |||||||||||
Diluted |
(0.45 | ) | 1.07 | 0.52 | 1.53 | |||||||||||
Weighted average number of
common shares |
||||||||||||||||
Basic |
9,736,589 | 6,453,950 | 9,722,836 | 6,396,210 | ||||||||||||
Diluted |
10,043,821 | 6,453,950 | 9,722,836 | 6,396,210 | ||||||||||||
| September 30, | December 31, | |||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
Assets: |
||||||||
Cash, cash equivalents and short term investments |
$ | 69,256 | $ | 85,107 | ||||
Amounts receivable |
987 | 1,224 | ||||||
Prepaid and other current assets |
3,730 | 2,987 | ||||||
Property, equipment and other assets |
707 | 600 | ||||||
Total assets |
$ | 74,680 | $ | 89,918 | ||||
Liabilities and stockholders’ equity: |
||||||||
Accounts payable and accrued expenses |
1,465 | $ | 893 | |||||
Current deferred collaboration revenue |
10,000 | 10,000 | ||||||
Warrant liability |
6,248 | 15,269 | ||||||
Other current liabilities |
1,406 | 1,314 | ||||||
Long term liabilities |
15,536 | 18,317 | ||||||
Stockholders’ equity (deficiency) |
40,025 | 44,125 | ||||||
Total liabilities and stockholders’ equity (deficiency) |
$ | 74,680 | $ | 89,918 | ||||