Q1 2013 Earnings Call
May 06, 2013 4:30 pm ET
Peter J. Langecker - Chairman, Chief Executive Officer and President
Barbara Riching - Chief Financial Officer and Principal Accounting Officer
Good afternoon. Welcome to OXiGENE's conference call to discuss first quarter 2013 financial results and corporate update. Today's call is being recorded and webcast. Participating in today's call are Chief Executive Officer, Dr. Peter Langecker; and Chief Financial Officer, Barbara Riching. Following this introduction, Dr. Langecker will discuss the company's corporate strategies and upcoming events. Ms. Riching will review the company's financial results, and then the company will take questions.
If you have not received a copy of the first quarter 2013 financial results press release the company has issued today, you can obtain one by visiting the company's website, www.oxigene.com. OXiGENE would like to remind everyone that during the conference call, members of the OXiGENE management team will make certain forward-looking statements regarding the company's future plans and anticipated outcomes that involve risks and uncertainties that may cause actual results or outcomes to be materially different from those anticipated and discussed on this conference call.
Factors that may cause such differences include, but are not limited to, those risks and uncertainties associated with the preclinical and clinical drug development processes, potential business and financing transactions, and the ability to obtain additional financing to fund the company's operation.
Please review the risks and uncertainties detailed in the company's annual report on Form 10-K for the year end December 31, 2012, quarterly reports on Form 10-Q and the company's other filings with the Securities and Exchange Commission.
Now, I'd like to turn the call over to OXiGENE's CEO, Peter Langecker.
Peter J. Langecker
Thank you, operator, and thanks to everyone participating in today's call. During the call, I will review the company's progress in the first quarter 2013 and our corporate strategies. Following my comments, Barbara Riching will discuss our financial results on the first quarter of 2013, and then we'll open the call for questions.
I'm pleased to report that we have made very good progress over the last 3 months in advancing our lead clinical program for ZYBRESTAT in ovarian cancer, in our European registration strategy for ZYBRESTAT and anaplastic thyroid cancer utilizing the exceptional circumstances marketing authorization process, and in strengthening our company's financial standing.
The randomized 2-arm Phase II clinical trial testing the combination of ZYBRESTAT in combination with Avastin to treat patients with advanced ovarian cancer has completed enrolling patients and is on track. This trial called GOG 186I is being conducted by the Gynecologic Oncology Group under the sponsorship of the Cancer Therapy Evaluation Program of the National Cancer Institute. This trial's also being performed in collaboration with Genentech, the manufacturer of Avastin. 107 patients with advanced platinum-sensitive and platinum-resistant ovarian cancer were enrolled at over 80 clinical sites in the U.S. that participated in the study.
The primary endpoint of the trial is progression-free survival, and the trial is designed to detect the level of reduction in the hazard ratio of arm 2 of -- to arm 1 of 37.5%. This result is comparable to an increase of 50% to 65% in the cumulative portion of patients alive and progression-free at 5 months in the arm treated with ZYBRESTAT plus Avastin.
Secondary endpoints include safety, overall survival and objective responses by treatment. We expect an interim and efficacy analysis will be conducted by the third quarter of 2013, and we will remind -- we will remain blinded to the data from this interim analysis.
If it is determined at that point that the study continues to completion, we anticipate that preliminary data from the completed trial would be available in the first quarter of 2014.
We're particularly excited about this trial as it is the first and currently the only randomized trial to test an anti-angiogenic therapeutic agent combined with a vascular disrupting agent in ovarian cancer, without including any cytotoxic chemotherapy. And the results will inform our understanding of therapeutic potential of combining these 2 anti-vascular approaches.
We believe that there's a strong scientific rationale for this combination, as well as compelling preclinical and Phase I data that support this approach. Both Avastin and ZYBRESTAT target the tumor vasculature, but they work very differently and in complementary ways. ZYBRESTAT targets and destroys the established vasculature that supplies blood to the tumor, and therefore targets the core of the tumor to deprive it of oxygen that it needs to grow. Avastin is designed to target the newly forming vasculature by inhibiting VEGF, the vascular endothelial growth factor, and it forms primarily on the outside of the tumor as the tumor grows. Combined, we believe they will result in a more significant reduction in blood flow that can starve and kill the tumor than with either drug alone.
We're also very pleased with how our European registration strategy in ATC is proceeding. As we have discussed previously, we're exploring regulatory approval for ZYBRESTAT in anaplastic thyroid cancer in the European Union with the Marketing Authorization Application or MAA, under an exceptional circumstances pathway. This strategy would allow us to receive approval in Europe in this highly-lethal, ultra-orphan indication without conducting another clinical trial before registration and therefore substantially less cost to us.
I am happy to report that we have now received scientific advice from representative of regulatory authorities of 2 European countries related to this regulatory pathway. They indicated to us that filing an MAA under the exceptional circumstances pathway appear to be the correct approach, and that filing with the currently available clinical data would be possible. While this advice does not provide us with assurance that a filing of an MAA will result in an approval of ZYBRESTAT under this or any other regulatory pathway, we are highly encouraged by this response. And we are now in the process of requesting scientific advice from the Scientific Advice Working Party of the European Medicines Agency or EMA to obtain confirmation of this approach. We could receive a written response to this request potentially by late July of 2014, and if required by EMA, have a meeting with EMA early in September of this year.
If we continue to receive positive free indications for our strategy, we could be in the position to file the MAA for ZYBRESTAT in ATC under the EMA centralized procedure, which is required for all new drugs. If the MAA were to be approved, we could be permitted to market ZYBRESTAT then in all member states of the European Union.
So far, this strategy in ATC is unfolding as well as we might hope and we will look forward to keeping everybody apprised of our progress with this process.
Shortly after the close of the first quarter in 2013, we took the important step of shoring up our cash position by completing a $5 million private placement. The investors who participated in this private placement represent high-value, high-quality institutions, and we are appreciative for their interest in helping us to advance our strategies. This financing provides timely and welcome support as we continue to explore longer-term options for strengthening our financial conditions including partnering.
While we generally don't spend much time discussing our earliest H [ph] research programs, there's one first quarter achievement I would like to highlight, as it underscores the breadth and value of our overall R&D effort. We were very pleased to announce that patents were issued covering benzosuberenes, a novel class of anticancer compounds, including 2 analogues called KGP18 and KGP156, which are currently in preclinical development. These compounds are the product of our highly productive ongoing collaboration with Baylor University in Texas to identify inhibitors of tubulin polymerization. We have an exclusive license to the worldwide rights to all of the compounds that result from this collaboration with Baylor.
The benzosuberenes have proven to be highly potent anti-proliferative agents and to have significant anti-vascular activity as well. They could represent an important emerging class of compounds with the potential to enhance treatment options for oncologist and patients with cancer by serving as payloads for targeted or directed therapies employing molecule antibodies or antibody fragments.
We believe that the broad intellectual property protection offered by these issued patents enhances the value of these anticancer drugs in our portfolio for potential pharmaceutical partners and investors.
We continue to believe that 2013 has the potential to be an exciting and productive year for OXiGENE. We intend to continue to pursue additional clinical strategies in ovarian cancer, which we have previously described in detail. These include combining ZYBRESTAT with chemotherapy, such as weekly paclitaxel, or with other vascular targeting agents such as tyrosine kinase inhibitors, in this case, Pazopanib, which targets VEGF and other vascular drivers, and which is marketed by GSK under the name, Votrient.
If we are successful in engaging collaborative support with us on these strategies and in securing funding for these programs, they could provide some meaningful near-term data results that could open up additional potential routes for registration in ovarian cancer over the next several years.
Given the therapeutic need and the commercial attractiveness of this indication, we continue to believe that leveraging our past clinical work and the strong scientific rationale from combining ZYBRESTAT with other treatment modalities represents the focused of pragmatic strategy for unlocking the value in our lead clinical assets.
We remain committed to exploring available opportunities to advance our pipeline of our vascular disrupting agents, with the goal of bringing new therapeutic agents to the patients with serious unmet medical needs. We're encouraged by the meaningful progress that we've made in the first quarter of 2013, and the support from our collaborators and from the investment and clinical communities.
As always, we remain especially grateful to the medical community for supporting our programs and to the patients and families who have participated in our clinical studies. We intend to remain focused on our ovarian and ATC strategies and on acquiring the resources we need to continue to build our company's value.
Now I would like to ask our CFO, Barbara Riching, to review our financial results.
Thanks, Peter. For the 3 months ended March 31, 2013, we reported a net loss of $1.9 million or $0.97 per share, compared to a net loss of $1.9 million or $1.44 per share for the 3-month period in 2012. The results for both periods were similar, with R&D expenses at $0.7 million for both periods and general and administrative expenses slightly lower at $1.1 million for the 3 months ended March 31, 2013, as compared to $1.3 million in the 3-month period in 2012.
Operating expenses continued to decrease in the 2013 period, reflecting our ongoing strategies to reduce expenses and cash utilization following our 2011 restructuring and to focus resources on our high-value programs and defray costs, when possible, through collaborations. Examples of this include pursuing registration of ZYBRESTAT in New York utilizing our current data set without performing another clinical trial, and advancing our clinical programs in ovarian cancer by working with collaborators such as the GOG. These dispositions have all contributed to reductions in costs over the last 2 years.
We've also been successful in boosting our cash reserves during the 2013 quarter by utilizing our aftermarket agreement with MLV & Co. for net proceeds of approximately $1.5 million, and in which we issued approximately 323,000 shares of common stock. Accordingly, at March 31, 2013, we had cash and restricted cash of approximately $4.6 million, compared with approximately $5 million at December 31, 2012.
Furthermore by completing a private placement in April following the close of the quarter, we were able to boost our cash reserves further. And as a result, at April 30, 2013, we had cash and restricted cash of approximately $8.7 million.
With this increased cash, we believe we can initiate the manufacturing of registration lots, potentially required for our filing in the E.U. for ATC, should we receive confirmation of our approach by the EMA as previously discussed by Peter.
In the April financing, we raised $5 million in gross proceeds by issuing convertible preferred stock in a private placement to accredited institutional investors. The preferred stock is convertible into a total of approximately 1.38 million shares of common stock.
Additionally 2 series of warrants, potentially exercisable for up to approximately 2.92 million of additional shares of common stock were issued. The preferred stock does not have any dividend rights or any preferences over the company's common stock, including liquidation rights. We intend to continue to pursue additional financing and partnering opportunities as they may arise.
All of the per share and share amounts reflect the effect of the 1:12 reverse stock split that became effective on December 28, 2012.
Peter J. Langecker
Okay, thanks, Barbara. Now I would like to ask the operator to open the call for questions.
[Operator Instructions] All right, I am not showing any further questions at this time.
Peter J. Langecker
Okay. Thanks again to all for your participating in today's call. As we move towards our upcoming milestones, we look forward to providing further updates. Thank you very much.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.
Peter J. Langecker
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