Aphton (NASDAQ:APHT)
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Aphton Corporation (NASDAQ: APHT) today reported
financial results for the second quarter ended June 30, 2005. The
company ended the second quarter with cash, cash equivalents and
short-term investments of $27.3 million.
"Based on the progress made in the first half of the year, we
believe that Aphton is in a stronger position in terms of our
pipeline, our finances and our operations," commented Patrick Mooney,
M.D., Chairman and CEO of Aphton Corporation. "We have cut our
going-forward burn rate by almost 50% this year without sacrificing
our priority programs and we are continuing to evaluate further steps
that could conserve even more capital as we move ahead. We are pleased
with the creativity and thought being used by our business development
team, as noted by the most recent deal with Celltrion for IGN311,
which we believe will advance the product's development without a
significant negative impact to our cash flow."
Dr. Mooney continued, "Additionally, we have recently initiated
discussions with sanofi-aventis regarding the possible dissolution of
our strategic alliance related to the development of the company's
lead anti-cancer product Insegia. We believe that it is in the best
interests of both the Company and the product to dissolve this
alliance. We began these discussions to facilitate the opportunity to
seek a new corporate partner for the further development of Insegia in
gastric cancer. We are hopeful that we will be able to come to an
agreement that would be as favorable to Aphton as possible."
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Pipeline Highlights
The quarter was highlighted by progress in the company's pipeline
with the presentation of detailed data at the American Society of
Clinical Oncology (ASCO) meeting in May 2005. Highlights of those
presentations included:
IGN101
-- Preliminary data presented at ASCO demonstrated that the
median number of circulating tumor cells was reduced by
approximately 50% in 17 patients enrolled in a single-arm
non-randomized study of IGN101 in patients with various solid
tumors. The study, which is intended to accrue a total of 45
patients, is ongoing. The primary objective of the trial is to
assess the ability of IGN101 to decrease circulating tumor
cells in peripheral blood. Elevation of circulating tumor
cells has been shown to predict short-term survival in
multiple types of cancer, including breast cancer and hormone
refractory prostate cancer.
Investigators presented data from 239 evaluable patients in a
Phase II randomized, double-blind, placebo-controlled clinical
trial of IGN101 for patients with epithelial cancers, which
consist of colorectal cancer, gastrointestinal tract cancer,
non-small cell lung cancer and liver cancer. While no
difference was seen in survival for the intent-to-treat
patient population, a statistically significant survival
prolongation was observed in the 53 stage IV rectal cancer
patients. Median survival in rectal cancer patients was 415
days for patients receiving IGN101, compared to 253 days for
patients receiving placebo (p = 0.037). Analysis of one-year
survival indicated that survival doubled to 62%, from 29.5%
for patients receiving placebo, for patients receiving IGN101.
A trend for prolonged survival was also observed in stage IV
colon cancer patients during the first year. Twelve-month
survival was 60% for patients receiving IGN101 versus 48.8%
for patients receiving placebo (p = 0.28). Substantially all
of the patients in the IGN101 group mounted an antibody
response to the vaccine antigen.
Insegia(TM) (G17DT immunogen)
-- Data from the randomized, double-blind, placebo-controlled
study in previously untreated patients with locally advanced,
recurrent or metastatic pancreatic cancer were also presented
at the ASCO meeting. In this study 383 patients were randomly
assigned to receive Insegia plus gemcitabine or gemcitabine
plus placebo. The primary endpoint of this study was overall
survival. Secondary endpoints included overall tumor response,
time to tumor progression and an evaluation of survival by
antibody response levels.
Results demonstrated no statistically significant difference
in overall survival, tumor response or time to tumor
progression. However approximately 75% of patients achieved an
antibody response to treatment with Insegia. An evaluation of
survival by antibody response showed that patients who
achieved the highest levels (in this case 74 patients)
demonstrated a statistically significant difference in
survival relative to the control group (264 days versus 201
days; p = 0.03). The differences in survival were seen across
covariant factors such as stage of disease and performance
status.
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Operational Highlights
Operational highlights for the quarter included the appointment of
Manfred Ruediger, Ph.D., to the newly created position of Executive
Vice President and Chief Operating Officer.
Financial Update
Cash, cash equivalents, and short-term investments totaled $27.3
million as of June 30, 2005, compared to $41.8 million at the end of
the first quarter of 2005 and compared to $55.5 million as of June 30,
2004. In the second quarter ended June 30, 2005, Aphton's net loss
applicable to common shareholders was $12.7 million, or $(0.21) per
share, compared to a loss of $6.7 million, or $(0.18) per share for
the same period in 2004.
In the second quarter, total operating costs and expenses
increased from $6.2 million in 2004 to $12.1 million in 2005. The
increase in costs and expenses for the full three months ended June
30, 2005 was due primarily to the inclusion of the costs associated
with the operation of our wholly-owned subsidiary, Igeneon, (acquired
March 24, 2005); research and development of our newly acquired
product candidates, IGN101 and IGN311; and a restructuring charge. The
restructuring charge of $818,000 relates to the cost-reduction program
implemented by the company in order to align expenses with product
development priorities.
About Aphton
Aphton Corporation, headquartered in Philadelphia, PA, is a
clinical stage biopharmaceutical company focused on developing
targeted immunotherapies for cancer. Aphton's products seek to empower
the body's own immune system to fight disease. Through the acquisition
of Igeneon AG in March 2005, Aphton acquired late-stage product,
IGN101, a cancer vaccine designed to induce an immune response against
EpCAM-positive tumor cells and IGN311, a fully humanized antibody
against the Lewis Y antigen in Phase I/II clinical trial. Aphton is
currently seeking partners that will support the further development
of Insegia (G17DT immunogen), its immunogen targeting the gastrin
hormone. Aphton has strategic alliances with sanofi-aventis for the
development and commercialization of Insegia related to cancers of the
gastrointestinal system and other cancers in North America and Europe;
Daiichi Pure Chemicals for the development, manufacturing and
commercialization of gastrin-related diagnostic kits; and Xoma for
treating gastrointestinal and other gastrin-sensitive cancers using
anti-gastrin monoclonal and other antibodies. For more information
about Aphton or its programs please visit Aphton's website at:
www.aphton.com.
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Aphton Corporation
Selected Condensed Financial Data
(In thousands, except per share data)
(unaudited)
Three Months Ended
June 30,
---------------------
2005 2004
--------- --------
Revenues $ - $ -
Total revenues
Costs and expenses:
General and administrative 2,972 850
Research and development 8,329 5,371
Restructuring Expense 818
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Loss from operations (12,119) (6,221)
Dividend and interest income 268 119
Interest expense including amortized discount (870) (658)
Unrealized gains from investments 8 13
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Net loss applicable to common shareholders ($12,714) ($6,747)
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Basic and diluted loss per common share $(0.21) $(0.18)
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Shares used in computing net loss per share 59,649 37,632
========= ========
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Safe Harbor
This press release includes forward-looking statements, including
statements about: (1) Aphton's belief that it is in a stronger
position in terms of its pipeline, finances and operations; (2) the
amount of reductions in Aphton's cash burn rate and the impact on its
priority programs; (3) Aphton's belief that the Celltrion deal will
advance IGN311's development without a significant negative impact to
Aphton's cash flow; (4) Aphton's expectations regarding its ability to
dissolve the strategic alliance with sanofi-aventis and the terms of
any such dissolution; (5)Aphton's belief that dissolution of its
strategic alliance with sanofi-aventis will facilitate the opportunity
to seek a corporate partner for Insegia in gastric cancer; and (6)
Aphton's expectation regarding the purpose and effectiveness of
fully-humanized monoclonal antibodies, IGN101 and IGN311. These
forward-looking statements may be affected by the risks and
uncertainties inherent in the drug development process and in Aphton's
and Igeneon's business. This information is qualified in its entirety
by cautionary statements and risk factor disclosure contained in
Aphton's Securities and Exchange Commission filings, including
Aphton's report on Form 10-K filed with the Commission on March 16,
2005. Aphton wishes to caution readers that certain important factors
may have affected, and could in the future affect, Aphton's beliefs
and expectations and could cause the actual results to differ
materially from those expressed in any forward-looking statement made
by or on behalf of Aphton. These risk factors include, but are not
limited to: (1) Aphton's ability to identify and realize anticipated
cost efficiencies and to reduce the combined cash burn rate; (2)
Aphton's ability to fund the further development of its research and
development programs; (3) Aphton's ability to effectively prioritize
its research and development programs and allocate adequate resources
to projects; (4) unexpected expenses or repayments of indebtedness
that may negatively impact Aphton's ability to reduce its burn rate
and/or fund its research and development or clinical programs; (5)
Aphton's ability to identify a partner willing to fund the continued
development of Insegia; (6) scientific developments regarding
immunotherapies; (7) Aphton's ability to close on its anticipated
collaboration with Celltrion and recognize its anticipated benefits;
(8) Aphton's ability to dissolve the strategic alliance with
sanofi-aventis on terms favorable to it or at all; and (9) the actual
design, results and timing of preclinical and clinical studies for
both companies' products and product candidates.