Peter J. Langecker - Chairman, Chief Executive Officer and President
Barbara Riching - Chief Financial Officer and Principal Accounting Officer
John C. Power - Redwood MicroCap Fund Inc.
OXiGENE (OXGN) Q2 2013 Earnings Call August 6, 2013 4:30 PM ET
: Good afternoon, and welcome to OXiGENE's Conference Call to discuss the Second 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 second quarter 2013 financial results press release from the company 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 the actual results or outcomes to be materially different from those anticipated and discussed on this conference call. Factors that may cause such difficulty or differences include, but are not limited to, those risks and uncertainties associated with preclinical and clinical drug development and manufacturing processes, potential business and financial transactions and the ability to obtain additional funding or financing to fund the company's operations. Please review the risks and uncertainties detailed on the company's annual report on Form 10-K for the year ending 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 for everyone -- to everybody participating in today's call. During the call, I will review the company's progress in the second quarter 2013 and our corporate strategies.
Following my comments, Barbara Riching will discuss our financial results for the second quarter of 2013. And then we will open the call for questions.
I'm pleased to report that OXiGENE has made important progress in advancing our strategy of identifying a registration path in the U.S. for ZYBRESTAT in ovarian cancer. And at the same time, pursuing registration for ZYBRESTAT in the E.U. for anaplastic thyroid cancer or ATC, utilizing the exceptional circumstances marketing authorization process. We believe that the strategy continues to represent the most expeditious route to value creation for our lead asset and for our company, and has the greatest potential to attract collaborators to help advance these promising programs, and to present near-term and long-term investment opportunities for the financial community.
We have carefully honed all the strategy with the goal of making continual progress in both indications while, as evidenced by our return -- reduced burn in net loss per share reported for this quarter, also safeguarding our cash reserves and operating efficiency and cost effectively.
Since we last reported on our progress in early May, there were several developments in both our ovarian and ATC programs that took shape after the close of the quarter. First, we have received notification from the European commission that ZYBRESTAT has received Orphan Designation in the E.U. in ovarian cancer. As in the U.S., where we have Orphan Designation for ovarian cancer as well have come for its market exclusivity advantages in terms of regulatory review and other advantages, all of which we believe will be extremely valuable to our company. We believe that ovarian cancer represents an attractive commercial opportunity. More than 60% of women diagnosed with ovarian cancer are in Stage III or IV, making it difficult to treat and often fatal, with a 5-year survival rate of about 47%, the rate which has largely unchanged, has been unchanged since the 1990s.
The potential to avoid conventional chemotherapy and its imminent toxicities by using ZYBRESTAT in combination with a complementary anti-vascular approach such as Avastin or a multikinase tyrosine kinase inhibitor or TK, such as Votrient, could be especially attractive to patients and their physicians.
As we have previously noted, the Gynecologic Oncology Group or GOG, under the sponsorship of the Cancer Therapy Evaluation Program of the National Cancer Institute, is currently conducting a randomized two-arm Phase II clinical trial testing ZYBRESTAT in combination with Avastin or bevacizumab to treat patients with advanced ovarian cancer. Genentech, the manufacturer of Avastin, is also collaborating on the trial called GOG-0186I. This trial is progressing well towards completion. 107 patients with advanced platinum-sensitive and platinum-resistant ovarian cancer were enrolled at over 80 clinical sites in the U.S. And with that, the study is completely enrolled.
The primary endpoint of this trial is progression-free survival. And secondary endpoints include safety, overall survival and objective responses by treatment arm. A futility analysis of the Phase II trial being conducted by the GOG was performed in the second quarter of 2013. The original purpose of the analysis was to consider early study closure to limit patient exposure in the event that the experimental regimen was deemed futile, i.e. unlikely to be declared more effective than the reference regimen at the end of the study.
Since the study had completed patient accrual, the analysis was conducted for possible study termination due to primary toxicities. It was confirmed that the trial is going to continue to its prespecified endpoint, which is based on progression-free survival. Remember, the path interim analysis were based on safety alone, and in both of these instances the recommendation also was to continue the study to completion. During this process, we and the company have been and will remain blinded as to the results of the trial. And consequently, we will not be in a position to comment further upon the study, nor will we speculate about its outcome until the study is completed and the data are analyzed and reported by the GOG.
We continue to anticipate the preliminary data from the completed trial could be available in the first half of 2014. If the outcome is -- of the study is positive and the statistical endpoints are met, a subsequent step could be to request an end-of-Phase-II meeting with the FDA. And assuming that meeting could lead to the design of a pivotal registration trial to potential pathway to an NDA filing in ovarian cancer in the 2000 timeframe could be established.
We've commented before about the strong scientific rationale for combining these 2 anti-vascular approaches. And our excitement about this trial, which 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.
We continue to be excited about this program. And we look forward to learning the study results.
ZYBRESTAT's excellent combination potential with other therapeutic modalities is actually the basis for pursuing 2 additional clinical trials in advanced ovarian cancer that we believe would further demonstrate ZYBRESTAT's potential as a leading adjunctive cancer therapy.
We intend to collaborate with a nonprofit organization in the design of a randomized two-arm Phase II trial of approximately 120 patients in the U.S., E.U or Eastern Europe comparing Pazopanib or Votrient with Votrient plus ZYBRESTAT in patients with relapsed ovarian cancer.
Votrient is an anti-angiogenic oral tyrosine kinase inhibitor that is currently FDA approved for renal cell carcinoma and soft tissue sarcoma. And with compelling early clinical data and the treatment of relapsed ovarian cancer, we believe that using ZYBRESTAT in combination with Votrient may provide a clinically active, yet potentially better tolerated alternative to the current standard of care, which is cytotoxic chemotherapy in certain patients with advanced ovarian cancer. The primary endpoint of the trial will be progression-free survival and secondary endpoints will include safety, overall survival and objective response rate and a CA-125 tumor marker response rate.
We are also working with outside partners on another clinical trial strategy, which is to combine ZYBRESTAT with weekly administrated paclitaxel patients with platinum-resistant ovarian cancer. Weekly paclitaxel is emerging as a standard of care following platinum-based therapy in the U.S. and E.U. Planning's underway for a multicenter randomized placebo-controlled 120 -- also 120 [inaudible] trial that could be conducted in the U.S., E.U or Eastern Europe. We're in discussions with a nonprofit cancer research organization about sponsoring and conducting this trial.
As in our combination trial with Avastin, we believe our potential collaboratives that may help offset costs associated with these trials, including nonprofit cancer research organizations.
Now turning the attention to our European registration strategy in anaplastic thyroid cancer. We are currently pursuing a filing for marketing authorization or MAA in the E.U with ZYBRESTAT for the treatment of anaplastic thyroid cancer under exceptional circumstances. European regulations provide that special marketing approval under exceptional circumstances that may be applied for in the case of therapies for treatment of life-threatening diseases with Orphan Designations, where there's an unmet medical need. And we hope that these will be seen by the European regulators to apply to our product.
We received feedback from 2 reviewing countries in March 2013, and the Scientific Advice Working Party or SAWP of the European Medicines Agency or EMA in July 2013, on our plan to submit an MAA for ZYBRESTAT in ATC.
We intend to address and incorporate this feedback into our MAA filing. And we believe that it is possible that we could obtain an MAA with the existing clinical data that we have for ZYBRESTAT in ATC. Based on the latest guidance received from the SAWP, we anticipate a potential MA filing in 2015 with a possible approval then in, potentially, 2016.
This approval, if obtained, might enable subsequent filing in South Korea, or countries like South Korea, China, Canada and other countries outside of the United States. We're optimistic about how our ATC strategy is progressing. And we look forward to moving closer to being able to offer ZYBRESTAT to patients with this disease who have no other treatment options at this time.
As Barbara will report in a few minutes, we have continued to operate in as productive and cost effective manner as possible, leveraging collaborations and other ways to reduce our expenses and to preserve our cash position, while we continue to explore longer-term options for strengthening our financial conditions, including partnering. And we intend to continue to act responsibly and manage our costs while we focus on ZYBRESTAT strategy in ovarian cancer, as well as in ATC.
In closing, I would like to add a word about OXiGENE's additional product opportunities and ongoing -- our research and development activities. In last quarter's report, I noted that while we generally don't spend much time discussing our early-stage research programs, the progress we have made in securing patent coverage of our benzosuberenes program in collaboration with the Baylor University was worth noting. We have also another program in collaboration with Baylor University for cathepsin L inhibitors, a new class of highly targeted anti-cancer therapeutics. Cathepsin L is involved in tumor angiogenesis and invasion. An inhibition of cathepsin now has been shown in preclinical studies to slow tumor growth. The Baylor Program is making good progress and an initial lead compound has been identified.
We believe that both the bensozuberenes and cathepsin L programs, albeit at an early stage, enhance the value of our anticancer portfolio for potential pharmaceutical partners and investors.
Our program in neuroendocrine tumors or NETs, which we have discussed in the past, is also making progress. We have generated positive preclinical data in prolactinoma and insulinoma models and a patent filed -- was filed this year for the use of vascular disrupting agents in controlling symptoms of neuroendocrine tumors. Together with leading experts in the field, we're currently exploring options for conducting a Phase I/II study in carcinoid syndrome patients, which could begin late in 2013 or early 2014 depending on obtaining -- us obtaining adequate funding to support that study.
I'm also pleased to report that the clinical program for our dual action vascular disrupting agent, OXi4503, is continuing. This is an investigator-sponsored open-label Phase I/II study with escalating doses in relapsed and refractory acute myeloid leukemia or myelodysplastic syndrome patients being conducted at the University of Florida, with funding from the University, as well as Leukemia & Lymphoma Society and OXiGENE. So far, 11 patients have been enrolled into the study, and dose limiting side effects have not been observed thus far.
As we are continuing to progress through 2013, we continue to believe that this will be year of continued progress for our company. We believe that our strategy of pursuing opportunities in ovarian cancer and ATC can translate into meaningful commercial potential for our company. We anticipate multiple value creating events in the 2013 to 2017 timeframe for both our ovarian cancer and ATC programs, including the data readout from the Phase II ovarian study in the first half of 2014, and potential additional progress in pursuing our European marketing authorization application strategy in anaplastic thyroid cancer.
We are hopeful that our potential progress towards that market will attract the attention of additional collaborators and funders, which would enable us to enhance and expand our efforts. As always, we remain especially grateful to the medical community for supporting our programs, and to the patients and their families who have participated in our clinical trials.
Now I would like to ask our Chief Financial Officer, Barbara Riching, to review our financial results. Barbara?
Thanks, Peter. For the 3 months ended June 30, 2013, we reported a net loss of $1.7 million or $0.74 per share compared to a net loss of $2.3 million or $1.65 per share for the comparable 3-month period in 2012. The decrease in the net loss in 2013 as compared to 2012 was primarily due to reduction in research and development expenses of approximately $500,000, and a reduction in G&A expenses of approximately $100,000.
For the 6-month period ended June 30, 2013, we reported a net loss of $3.5 million or $1.70 per share compared with a net loss of $4.2 million or $3.10 per share for the 6-month period in 2012. The decrease in the net loss in 2013 as compared to 2012 was primarily, again, due to reductions in R&D expenses of approximately $400,000 and a reduction in G&A expenses of $300,000. Additionally, the 2012 period includes approximately $100,000 in revenue recognized under the terms of our partnership agreement with Azanta.
Operating expenses continue to decrease in the 2013 period, reflecting our strategies to focus resources on our high-value programs and to manage cash resources and minimize cost when possible through collaborations. We've advanced our clinical program in ovarian cancer without incurring significant clinical expenses by working with collaborators, including the GOG, which is conducting a Phase II trial of ZYBRESTAT combined with Avastin.
In addition, we redirected our regulatory strategy for ZYBRESTAT in ATC, as previously discussed by Peter, which we believe is a more cost-effective pathway. We also continue to support the compassionate use of ZYBRESTAT in ATC in Europe in the program being conducted by Azanta.
In April 2013, we raised $4.2 million in net 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. To-date, 1,646 shares of convertible preferred stock have been converted into approximately 454,000 shares of common stock. Additionally, 2 series of warrants potentially exercisable for up to approximately 2.92 million additional shares of common stock were issued with the convertible preferred stock. The preferred stock does not have any dividend rights or any preferences over the company's common stock including preferential liquidation rights.
During the second quarter of 2013, we also issued approximately 99,000 shares of common stock to the company's aftermarket agreement with MLV & Co. for net proceeds of approximately $400,000. At June 30, 2013, we had cash and restricted cash of approximately $7.8 million compared with approximately $5 million at December 31, 2012. 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
Thanks, Barbara. Now I would like to ask the operator to open the call for questions.
[Operator Instructions] We have a question from John Power from Redwood Funds.
John C. Power - Redwood MicroCap Fund Inc.
What are your capital plans going forward? Or do you plan to do any additional sales on your market program or for the private placements? Or have you made any decisions at this point?
This is Barbara Riching, the CFO. At this point, we haven't made any particular decisions. We continue to look at all of our options. And our ATM right now isn't -- there isn't a lot available on it right now. We would have to file another supplement in order to be able to draw down more money under the ATM.
[Operator Instructions] I show no further questions at this time, and would like to turn the conference back to Dr. Peter Langecker for closing remarks.
Peter J. Langecker
Yes. Thank you, again. Thanks, again, to all for participating in today's call. As we move towards our upcoming milestones, we look forward to providing further updates. Thank you.
Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may all disconnect at this time.
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