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 fourth quarter and full year of 2007. For the three
months ended December 31, 2007, net loss was $5.1 million, compared with
$4.4 million in the fourth quarter of 2006. For the year ended December
31, 2007, net loss was $21.7 million, compared with a loss of $17.1
million for 2006. As of December 31, 2007, cash, cash equivalents and
marketable securities totaled $28.5 million.
“Avalon continues to execute on our corporate
strategy of building a pipeline of first-in-class drugs for Avalon and
our partners,” stated Kenneth C. Carter,
Ph.D., President and CEO. “Our Phase I and
Phase II (a) clinical trials of AVN944 continue to demonstrate a strong
safety profile and dose-dependant biologic activity and pharmacology.
Through our proprietary AvalonRx® technology,
we continue to advance our two key internal pre-clinical programs for
inhibitors of the Beta-catenin and Aurora/Centrosome pathways and expect
to nominate a development candidate for Beta-catenin in 2008. We are
making good progress in our partnerships including our recently
announced advancements in the Novartis collaboration that triggered a
research support payment and our identification of hit compounds that
affect the Hsp90 pathway for our ChemDiv collaboration.”
Conference Call & Webcast Information
Avalon will host a conference call on Thursday, March 20, 2008 at 8:30
a.m. Eastern Time, to discuss Avalon Pharmaceuticals’
financial results as well as the 2008 business outlook. Live audio of
the conference call will be available to investors, news media and the
general public by dialing 1-888-287-5529 (in the U.S.) or 719-457-2088
(internationally), and providing the participant pass code, 5811984. 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An archived version of the webcast will be available for 30 days.
Recent Highlights
Patient enrollment continued in both the AVN944 Phase I clinical trial
for hematological patients and the AVN944 Phase II (a) clinical trial
for pancreatic patients.
Presentation of preliminary results from the AVN944 Phase I trial in
adult Acute Myelogenous Leukemia (AML) patients that showed AVN944 is
well tolerated in refractory AML patients, with drug exposure
increasing at higher dose levels and patients experiencing reductions
in blast cell counts. These data were presented at the American
Society of Hematology (ASH) Annual Meeting.
An additional ASH presentation showed the small molecule compound
family in the Company’s Beta-catenin pathway
inhibitor program has potent inhibitory effects on Wnt/Beta-catenin
signaling in Multiple Myeloma (MM) cells. The Beta-catenin pathway is
activated in the majority of MM cells, and is known to play a critical
role in Myeloma cell survival. The Company previously demonstrated
that this compound family potently inhibits colorectal cancer cell
growth.
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.
Company Expectations for 2008
The Company is advancing numerous programs in its strategy of building a
pipeline of first-in-class drugs and is driving to attain the following
goals in 2008.
Complete AVN944 Phase II(a) clinical trial (Pancreatic)
Initiate AVN944 Phase II(b) clinical trial (Pancreatic)
Complete AVN944 Phase I clinical trial (Hematological)
Name Beta-catenin development candidate and begin pre-IND enabling work
Name Aurora/Centrosome novel target
Partner AVN944 and/or the Beta-catenin program
Sign additional discovery partnership
Financial Results
Net loss was $5.1 million for the three months ended December 31, 2007
compared with $4.4 million in the last three months of 2006. For all of
2007, net loss was $21.7 million, compared with $17.1 million in 2006.
Lower revenues and higher costs in the 2007 periods resulted in the
higher losses in 2007.
Total costs and expenses from operations were $5.4 million in the fourth
quarter of 2007, an increase of $0.1 million compared with the $5.3
million reported for the fourth quarter of 2006. Total costs and
expenses were $23.6 million for 2007, compared with $20.9 million in
2006. The increases in 2007 were principally due to clinical trial costs
related to AVN944.
No revenues were reported for the fourth quarter of 2007, compared with
$0.7 million in the fourth quarter of 2006. Revenues for the full year
of 2007 were $0.8 million, compared with $2.7 million in 2006. Revenues
in 2007 were from the collaboration with Novartis Institutes for
Biomedical Research. Revenues in 2006 were from collaborations with
Novartis Institutes for Biomedical Research, MedImmune and the
University of Louisville.
As of December 31, 2007, the Company had $28.5 million in cash, cash
equivalents and marketable securities. Of that amount, $5.3 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 fourth quarter of
2007 and $20.3 million for all of 2007.
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, 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 2006 Annual Report on
Form 10-K and updates contained in subsequent filings we make with the
SEC.
AVALON PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS
(in thousands except for per share amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(unaudited)
(unaudited)
2007
2006
2007
2006
Revenues
$
-
$
653
$
809
$
2,724
Costs and expenses:
Research and development
3,613
3,360
15,322
13,269
General and administrative
1,772
1,927
8,240
7,661
Total costs and expenses
5,385
5,287
23,562
20,930
Loss from operations
(5,385
)
(4,634
)
(22,753
)
(18,206
)
Total other income
271
243
1,080
1,104
Net loss
$
(5,114
)
$
(4,391
)
$
(21,673
)
$
(17,102
)
Net loss attributed to common stockholders per common share -
basic and diluted
$
(0.30
)
$
(0.43
)
$
(1.42
)
$
(1.74
)
Weighted average number of common shares - basic and diluted
17,026,390
10,129,223
15,298,590
9,841,235
AVALON PHARMACEUTICALS, INC.
BALANCE SHEET INFORMATION
(in thousands)
As of December 31,
(unaudited)
ASSETS
2007
2006
Cash, cash equivalents and marketable securities
$
23,250
$
14,458
Restricted cash and securities
5,275
5,972
Property and equipment, net
7,325
8,923
Other assets, net
1,455
2,038
Total assets
$
37,305
$
31,391
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
$
4,685
$
5,641
Long-term liabilities
6,446
7,876
Total stockholders’ equity
26,174
17,874
Total liabilities and stockholders’
equity
$
37,305
$
31,391