OXiGENE, Inc. (NASDAQ:OXGN)
Q4 2013 Earnings Conference Call
March 18, 2014 4:30 PM ET
Peter J. Langecker - CEO
Barbara Riching - CFO
Good afternoon. Welcome to OXiGENE's Conference Call to discuss Full Year 2013 Financial Results and provide a 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. The company's full year 2013 financial results press release was issued today and is available on this Web site at www.oxigene.com.
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 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 operations. Please review the risks and uncertainties detailed on the company's annual report on Form 10-K for the year ended 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 everybody for participating today. During the call, I will review our progress in 2013 and leading into 2014. I will also discuss the very exciting announcements we made last week concerning the positive results from the Phase 2 trial of ZYBRESTAT combined with bevacizumab in recurrent ovarian cancer. We believe this was a milestone event for our company and significantly enhances our prospects for the future. Following my comments, Barbara Riching will discuss our financial results for the full year 2013 and then we will open the call for questions.
I believe that the OXiGENE story has approached a turning point. For some time, we have been working to develop this new class of cancer compounds known as vascular disrupting agents or VDAs, and in the process we've advanced many of our development programs through collaborations with academic institutions, with non-profit cancer research organizations, and government-funded research organizations, largely in an effort to conserve our cash resources. As a result, we've been able to pursue opportunities that further the science of VDAs and help to advance this important new class of compounds.
In 2013, we have made good progress towards our goals by significantly enhancing our cash resources, by advancing ZYBRESTAT in ovarian cancer and other cancers, and by advancing our earlier stage scientific programs, and we're continuing to do so in 2014. Last week, we reported important top line Phase 2 data from our lead U.S. indication for ZYBRESTAT in ovarian cancer. The data showed statistically significant increase and progression-free survival or PFS in recurrent platinum-sensitive and platinum-resistant ovarian cancer patients using ZYBRESTAT in combination with the antiangiogenic compound bevacizumab also known as Avastin as compared to using Avastin alone.
We believe that this is the first time that any VDA has shown a statistically significant benefit in an clinically meaningful and validated endpoint. We also believe that this is a watershed moment for our company and for ZYBRESTAT as a molecule. Further, we think that we are on the right path forward with new opportunities opening up for our company to realize the potential of our innovative scientific assets and development programs.
The positive top line data that was announced last week was generated in a Phase 2 study conducted by the Gynecologic Oncology Group or GOG under the sponsorship of the Cancer Therapy Evaluation Program of the National Cancer Institute. This was a randomized two-arm Phase 2 clinical trial conducted at 67 clinical sites in the U.S. testing ZYBRESTAT in combination with Avastin to treat patients with second or third line platinum-sensitive and platinum-resistant ovarian cancer.
The results showed that the study which enrolled 107 patients met its primary endpoint of statistically significant increase in progression-free survival with the p-value of less than 0.05 and hazard ratio of 0.685 in the Avastin plus ZYBRESTAT treated arm as compared to the Avastin alone arm. We were also pleased to note that the objective response rate which was a secondary endpoint of this study was higher in the Avastin plus ZYBRESTAT arm, however, that difference did not reach statistical significance.
The safety profile for ZYBRESTAT was also in line with prior clinical experience, including the observation of a higher rate of temporarily reversible hypertension in the combination treated arm, which was an expected effect of ZYBRESTAT due to its mechanism and can be easily managed clinically with antihypertensive agents, and there were no other notable adverse events, differences between the two treatment arms in the top line data.
We're happy to hear and strongly agree with the complements of the Principal Investigator, Dr. Bradley Monk from the University of Arizona who stated that the data validated the approach of combining two anti-vascular therapies with complementary mechanism of action; ZYBRESTAT as a vascular disrupting agent and Avastin as an antiangiogenic agent and a positive Phase 2 data warrants further evaluation in patients with ovarian cancer. These patients who have failed prior therapy have few, if any other therapeutic options.
In terms of next steps, of course we will look forward to a presentation of the full dataset at a scientific meeting later this year, which we expect to include the current (indiscernible) specific details on progression-free survival and objective response rate. In the meantime, we intend to evaluate the necessary next development and regulatory steps for the combination of ZYBRESTAT plus Avastin.
We're currently evaluating additional opportunities with regard to the development of ZYBRESTAT in advanced ovarian cancer, and we intend to request an end of Phase 2 meeting with the FDA regarding a Phase 3 development and a possible path to registration for ZYBRESTAT in ovarian cancer. I should note that Avastin is currently not approved in the U.S. for this indication, and that the use of Avastin in this Phase 2 study was experimental.
We also presently intend to evaluate opportunities in Europe, where Avastin is already approved both as a single agent and in combination with Paclitaxel for advanced ovarian cancer. Most importantly, I want to thank the Principal Investigator, Dr. Brad Monk with the University of Arizona, the Gynecologic Oncology Group, and the NCI/CTEP, as well as the patients and the families who participated in this study. ZYBRESTAT is now the first VDA to demonstrate a statistically significant and meaningful progression-free survival benefit. We believe that this is positive outcome that validates the scientific rationale of VDA and is good news for patients and physicians.
In light of the positive Phase 2 results, we're also interested in pursuing potential additional combinations and clinical studies in advanced ovarian cancer that we believe would further demonstrate ZYBRESTAT’s therapeutic potential. In this regard, we believe that our strategy on working with collaborators to fund and advance our clinical programs represent a cost-effective and expeditious way to make progress. We intend to continue these relationships and support the evaluation of ZYBRESTAT in combination with other anticancer agents, including with other antiangiogenesis and anti-VEGF agents where the mechanism maybe complementary.
One example of such potential studies involves ZYBRESTAT and the oral VEGF inhibitor and a small-molecule tyrosine kinase inhibitor pazopanib or Votrient and added to conventional cytotoxic therapy, Votrient has been shown to improve progression-free survival in the first line platinum-sensitive recurrent and platinum-resistant recurrent ovarian cancer setting study to evaluate pazopanib with ZYBRESTAT is now currently being pursued by an UK-based non-profit research organization.
This potential randomized two-part study would consist of a Phase 1 dose escalation portion followed by a randomized Phase 2 portion to compare progression-free survival for the combination of ZYBRESTAT plus pazopanib (inaudible). If implemented, both OXiGENE and UK-based GlaxoSmithKline, the maker of Votrient, would be expected to provide drug supplies and financial support for our study which would be sponsored by the UK's National Health System Foundation Trust.
Another example of the potential study is the combination of ZYBRESTAT with weekly administered Paclitaxel in patients with platinum-resistant ovarian cancer. We have previously published promising news of the terms of response rate and duration of response in the single-arm Phase 2 study involving the combination of Carboplatin, Paclitaxel, and ZYBRESTAT. However, I should say that pursuit of the aforementioned studies is dependent upon strategic decisions regarding our future course in ovarian cancer, including the planning of potential Phase 3 pivotal studies as well as external support, availability of additional resources, overall corporate priorities, and regulatory feedback.
With the positive Phase 2 data for ZYBRESTAT in recurrent ovarian cancer, we also plan to continue pursuit of partnering opportunities, and in that context, I want to remind you that we've retained worldwide rights for this product and that it has orphan drug status both in the U.S. and Europe for ovarian cancer and anaplastic thyroid cancer. Given the many opportunities of development across indications and regions, we believe that it would be quite valuable to have the resources and the support of an established development and commercialization partner. We look forward to our continued business development discussions with potential partners in parallel with our focused efforts to enhance the product development.
So, now I would like to turn to other indications for ZYBRESTAT. We plan to start a study this year evaluating ZYBRESTAT as a single agent to treat gastrointestinal neuroendocrine tumors or GI NET tumors. Along with our collaborators at the Albert Einstein College of Medicine, we have previously presented compelling preclinical data in this indication which we believe warrants further development as we have previously described, neuroendocrine tumors are slow growing and sometimes invasively growing tumors that produce excessive amounts of a biologically active substance that basically enters the blood stream and then they cause debilitating symptoms in these patients. Because they are slow growing, neuroendocrine tumors tend to have very few treatment options beyond surgery and radiation.
ZYBRESTAT which does not target the tumor cell specifically, but targets the tumor vasculature has the potential to be very effective by cutting off the blood supply to the core of these tumors and causing extensive hypoxic cell death within these tumors and thereby sharply reducing the amount of biologic reactive substances that the tumor produces. We believe the biomarker level measurements with serotonin and other substances and the effect on symptoms such as the frequency, for instance of daily bowel movements or daily flushing symptoms can be used as readouts to assess the effects of ZYBRESTAT on these types of tumors. With additional cash resources now in place, we plan to conduct a Phase 2 study in 20 patients with Sandostatin refractory GI in the tumors with increased biomarkers for clinical symptoms and using patients have been on control. We're working to initiate this study in the second half of 2014.
Now I'll comment briefly on our regulatory strategy for anaplastic thyroid cancer or ATC in Europe. We continue to evaluate the potential for a future filing under the Exceptional Circumstances Marketing Authorization Pathway in the European Union. This would allow us to use our existing clinical database, including the results of the FACT study, without the necessity to conduct additional trials. We are incorporating feedback and additional data suggestions from the Scientific Advice Working Party of the European Medicines Agency and four European countries into our plans for potential filing of a marketing authorization application for the use of ZYBRESTAT in combination with chemotherapy and anaplastic thyroid cancer patients.
Turning to our earlier stage clinical programs for Oxi4503, enrollment continues in the investigator sponsored open label Phase 1/2 study which is a dose escalation study in relapsed and refractory acute myeloid leukemia and myelodysplastic syndrome. This study is being conducted at the University of Florida with funding from the University as well as the Leukemia & Lymphoma Society and OXiGENE. We were also pleased to report early data from the ongoing study at the recent American Society of Hematology meeting in December in New Orleans. At this meeting, the investigators reported that among the first 13 patients treated, one patient achieved a complete response, one patient achieved partial response, and two patients achieved new stabilizations all at the lower dose levels tested. To-date, 16 patients have been enrolled and treated in this study, and the dose limiting side effects have not been observed thus far.
As we look forward in 2014, we are in a much stronger position to realize the therapeutic commercial potential of our VDA pipeline. We've seen additional progress in our programs and the recent positive results of a Phase 2 study in ovarian cancer presents tremendous opportunities in our ovarian program. We continue to envision the pathway to success for ZYBRESTAT which we believe has the potential to become the first commercialized VDA and for our other earlier stage programs to follow suit.
Finally, we want to express sincere appreciation to all of our shareholders including our new shareholders for their support and for your interest in the company. We are optimistic that 2014 will be an exciting and productive year, and we look forward to keeping you apprised on our progress.
Now, I would like to ask our CFO, Barbara Riching, to review our financial results.
Thanks, Peter. Before I review our results for 2013, I want to reinforce Peter's comments about the current enthusiasm at the company. We are eager to move forward given our recent success at strengthening our cash position and to pursue the broader opportunities presented by the recent results of the Phase 2 ZYBRESTAT study in ovarian cancer. We believe our strategy and sustained progress and pursuit of the value creation has benefited our company as evidenced by the successful financing, totaling nearly 18 million with institutional investors that we had completed in the past year.
Now let me provide a very brief overview of our 2013 financial results. Our net loss for the year ended December 31, 2013, was 8.3 million compared to a net loss of 8.1 million for the prior year. We maintain operating expenses for the full year 2013 at a comparable level to 2012 which were 8.4 million compared to 8.2 million in the prior year. The non-cash dividend of 4.8 million in 2013 related to the preferred stock equity financing completed in April 2013 and September 2013.
As mentioned during 2013, we also successfully raised approximately 9.1 million in net proceeds by issuing stocks through [our asset] (ph) market or ATM agreement and by issuing stocks and warrants through two private placements to accredited institutional investors. Additionally, on February 18, 2014, the company successfully closed a public offering of common stock and warrants, raising approximately 12 million in gross proceeds, or approximately 11.1 million in net proceeds, after deducting placement agents' fees and before other operating expenses.
In offering, the company issued 5.9 million shares of common stock and 2.9 million warrants for the purchase of common stock. Reflecting those financings and recently exercised warrants, we have approximately 15.2 million shares outstanding as of March 17, 2014.
Turning now to our cash balance, OXiGENE had cash of approximately 7 million at December 31, 2013 compared to approximately 5 million in the year ended December 31, 2012. As of February 28, 2014, we had cash of approximately 16.2 million, including the proceeds from the most recent financings. Subsequently through yesterday, March 17, 2014, we received net proceeds of 9.3 million from exercise or warrants, total purchase of 3.8 million shares further boosting our current cash balance.
As Peter described, we have made some significant recent progress at the company to build our cash resources and advance multiple scientific and development programs. During 2014 we look forward to continuing to advance our clinical and earlier stage development programs.
I will now turn the call back to the operator to open up for questions.
Thank you. (Operator Instructions). I'm not showing any questions from the phone lines at this time. I would like to turn the conference back over to Peter Langecker for closing remarks.
Peter J. Langecker
Thank you, operator. I want to thank all of you for participating in today's call. I want to say that we look forward to providing further updates and speaking with you at the upcoming investor conferences or plan to speak or medical meetings. I think that concludes the update today. 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 good day.
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