Avalon (NASDAQ:AVRX)
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Avalon Pharmaceuticals, Inc. (Nasdaq:AVRX), a clinical-stage
biopharmaceutical company focused on the discovery and development of
novel cancer therapeutics, today announced financial and operational
results for the first quarter of 2008. For the three months ended March
31, 2008, net loss was $6.2 million, compared with $5.3 million in the
first quarter of 2007. As of March 31, 2008, cash, cash equivalents and
marketable securities totaled $23.6 million.
“Our clinical trials, pre-clinical product
development programs and major collaborations continued to progress as
planned in the first quarter of 2008,” stated
Kenneth C. Carter, Ph.D., President and CEO. “We
are excited about recent progress in our Aurora/Centrosome inhibitor
program where we identified small molecule allosteric inhibitors of the
PLK3 protein. We are also pleased with the progress of our other
programs as we continue on track to complete our AVN944 Phase I
hematological and Phase IIa pancreatic clinical trials in 2008.”
Conference Call & Webcast Information
Avalon Pharmaceuticals’ senior management will
host a conference call on Thursday, May 8, 2008 at 8:30 a.m. Eastern
Daylight Time, to discuss the quarterly results. Live audio of the
conference call will be available to investors, members of the news
media and the general public by dialing (877-419-6597) (in the U.S.) and
(719-325-4858) (internationally), and providing the participant pass
code, 4845885. To access the call by live webcast, please visit the
Investor Relations section of our website at http://www.Avalonrx.com.
An archived version of the webcast will also be available through June
30, 2008 on Avalon's website.
Recent Highlights
Highlights so far in 2008 include the following previously reported
events.
At a poster presentation at the American Association for Cancer
Research 2008 Annual Meeting held April 12-16, in San Diego, CA, the
Company reported that it used AvalonRx®,
its biomarker-based drug discovery system, to identify small molecule
allosteric inhibitors at the Aurora/Centrosome pathway, and to reveal
the protein targeted by these compounds. These inhibitors potently
induce death in cancer cells and inhibit the Polo-Like Kinase 3 (PLK3)
protein, a key node in the centrosome pathway.
The Company’s drug discovery collaboration
with Novartis progressed to the next stage which triggered an
undisclosed payment to Avalon for research support. In the current
phase of this collaboration, the Company is characterizing compounds
identified from the completed high-throughput screen.
The Company identified hit compounds that affect the Hsp90 pathway
under its collaboration with ChemDiv.
Dr. Philip Frost, M.D., Ph.D., was appointed to the Company’s
board of directors. Dr. Frost has extensive experience in drug
discovery and development over a very successful career in industry
and academia, including leading positions at ImClone, Wyeth, the
University of Texas M.D. Anderson Cancer Center and the University of
California, Irvine.
Financial Results
Net loss was $6.2 million for the three months ended March 31, 2008
compared with $5.3 million in the first three months of 2007. Revenues
for the first quarter of 2008 were $50,000, compared with $0.7 million
for the same period of 2007. Revenues in both periods were from the
Company’s collaboration with Novartis
Institutes for Biomedical Research.
Total costs and expenses from operations were $6.5 million in the first
quarter of 2008, an increase of $0.2 million compared with the $6.3
million reported for the first quarter of 2007. The increases in 2007
were principally due to higher clinical trial costs related to AVN944,
somewhat offset by lower stock compensation expenses included in general
and administrative expenses.
As of March 31, 2008, the Company had $23.6 million in cash, cash
equivalents and marketable securities. Of that amount, $4.9 million was
held in a restricted account to serve as collateral for long-term debt.
Cash burn, defined as net cash used for all activities excluding cash
raised in equity financings, was $4.9 million in the first quarter of
2008.
About Avalon Pharmaceuticals
Avalon is a biopharmaceutical company focused on the discovery,
development and commercialization of first-in-class cancer therapeutics.
Avalon’s lead product candidate, AVN944, an
IMPDH inhibitor, is in Phase II clinical development. Avalon also has
preclinical programs to develop inhibitors of the Beta-catenin and
Aurora/Centrosome pathways, discovery programs for inhibitors of the
Survivin and Myc pathways and partnerships with Merck,
AstraZeneca/MedImmune, ChemDiv, Medarex, and Novartis. AvalonRx®
is the company’s proprietary platform which
is based on large-scale biomarker identification and monitoring, used to
discover and develop therapeutics for pathways that have historically
been characterized as "undruggable." Avalon is headquartered in
Germantown, MD.
Forward Looking Statements
This announcement contains, in addition to historical information,
certain forward-looking statements that involve risks and uncertainties,
in particular, related to our expectations for 2008, progress in our
drug discovery programs and our collaborations, and clinical progress in
the development of AVN944. Such statements reflect the current
views of Avalon management and are based on certain assumptions. Actual
results could differ materially from those currently anticipated as a
result of a number of factors, risks and uncertainties including the
risk that the discovery programs and collaborations may not be
successful and that AVN944 will not progress successfully in its
clinical trials, we may not be successful in partnering any of our
internal programs or in signing new discovery partnerships, and other
risks described in our SEC filings. There can be no assurance
that our development efforts will succeed, that AVN944 will receive
required regulatory clearance or, even if such regulatory clearance is
received, that any subsequent products will ultimately achieve
commercial success. The information in this Release should be read in
conjunction with the Risk Factors set forth in our 2007 Annual Report on
Form 10-K and updates contained in subsequent filings we make with the
SEC.
AVALON PHARMACEUTICALS, INC.
STATEMENT OF OPERATIONS
(in thousands except for per share amounts)
(Unaudited)
Three Months Ended
March 31,
2008
2007
Revenues
$
50
$
731
Costs and expenses:
Research and development
4,360
4,111
General and administrative
2,133
2,228
Total costs and expenses
6,493
6,339
Loss from Operations
(6,443
)
(5,608
)
Total other income
194
263
Net loss
$
(6,249
)
$
(5,345
)
Net loss per share - basic and diluted
$
(0.37
)
$
(0.43
)
Weighted average number of shares - basic and diluted
17,026
12,410
AVALON PHARMACEUTICALS, INC.
BALANCE SHEET INFORMATION
(in thousands)
March 31,
December 31,
2008
2007
(unaudited)
ASSETS
Cash, cash equivalents and marketable securities
$
18,727
$
23,250
Restricted cash and securities
4,898
5,275
Property and equipment, net
6,995
7,325
Other assets, net
1,292
1,456
Total assets
$
31,912
$
37,305
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
$
5,318
$
4,685
Long-term liabilities
6,439
6,446
Total stockholders' equity
20,155
26,174
Total liabilities and stockholders' equity
$
31,912
$
37,305