AVI BioPharma, Inc. (NASDAQ: AVII)
- Completed Dosing Through 24-Weeks in All Patients in Phase IIb
DMD Study; Unblinded Results Expected by End of April
- Enrollment Completed for Continuous Dosing Extension Study to
Assess Long-Term Safety and Efficacy of Eteplirsen; All Patients
From Phase IIb DMD Study, Including Placebo Cohorts, Rolled Over to
Open-Label Drug
- 2012 Financial Guidance of $40-50 Million in Revenues; $30-35
Million in Operating Loss; Cash Balance of $39.9 Million at
Year-End 2011
AVI BioPharma, Inc. (NASDAQ: AVII), a developer of RNA-based
therapeutics, today reported financial results for the three months
and full year ended December 31, 2011, and provided an update of
recent corporate developments.
"This past year at AVI was marked by significant advancements in
our lead clinical program with our drug, eteplirsen, for the
treatment of Duchenne muscular dystrophy and we are now poised to
deliver results from these efforts in the coming months," said
Chris Garabedian, president and CEO of AVI. "We believe 2012 will
be a transformative year for AVI, as we learn the clinical effects
of eteplirsen in what will be the first reported placebo-controlled
study assessing the disease-modifying effects of exon-skipping
technology."
Financial Results
For the fourth quarter of 2011, AVI reported an operating loss
of $9.0 million, compared with an operating loss of $1.7 million in
the fourth quarter of 2010. The increase is the result of a $1.9
million decrease in government research contract revenues, a $4.8
million increase in research and development expenses and a $0.5
million increase in general and administrative expenses.
Revenue for the fourth quarter of 2011 was $13.6 million, down
slightly from the $15.5 million in the fourth quarter of 2010. The
decrease was primarily due to the completion of the H1N1 flu
contracts in the second quarter of 2011, partially offset by
increased revenues on the current segments of the Ebola and Marburg
contracts.
Research and development expenses were $18.7 million in the
fourth quarter of 2011, compared to $13.9 million in the fourth
quarter of 2010, an increase of $4.8 million. The increase was due
primarily to incremental activities for the Ebola and Marburg
government contracts, additional spending on our proprietary DMD
product candidate, eteplirsen, that is in Phase IIb clinical trials
and severance costs related to our December 2011 reduction in
force. This was partially offset by decreased spending related to
our H1N1 flu contracts.
General and administrative expenses in the fourth quarter were
$3.9 million, compared to $3.4 million in the fourth quarter of
2010, an increase of $0.5 million. The increase was the result of
higher consulting and severance costs.
For the year 2011, the operating loss was $35.9 million,
compared to an operating loss of $20.9 million for the prior year.
The $15.0 million increase was the result of a $30.9 million
increase in research and development expenses and a $1.7 million
increase in general and administrative expenses, offset in part by
a $17.6 million increase in revenue, primarily due to government
contracts.
Revenue for the year 2011 increased to $47.0 million from $29.4
million in 2010 as a result of increased revenue from the current
segments of the Ebola and Marburg contract. This was partially
offset by reduced revenue from the H1N1 flu contracts that were
completed in the second quarter of 2011.
Research and development expenses were $66.9 million for the
year ended 2011, compared to $36.0 million for the prior year. The
increase was due primarily to $22.8 million in incremental costs
related to the Ebola and Marburg government contract, a $6.4
million increase in costs related to our proprietary DMD program
that is in Phase IIb clinical trials, $4.8 million in incremental
research and development expenses and $3.9 million of incremental
manufacturing activities. These increases were partially offset by
a $5.0 million reduction in the costs for the H1N1 flu contracts
and $2.0 million for the 2006 Ebola, Marburg and Junín government
contracts which were substantially completed in 2010.
General and administrative expenses for the year 2011 were $16.1
million, compared to $14.4 million for
2010, an increase of $1.7 million. The
increase was primarily due to an increase of $1.4 million in
personnel related costs and $1.1 million in consulting costs
partially offset by decreases in legal and severance costs of $0.5
million each.
The net loss for the fourth quarter of 2011 was $1.4 million, or
$0.01 per share, compared to a net loss for the fourth quarter of
2010 of $7.6 million, or $0.07 per share. The $6.2 million
improvement in the net loss was primarily due to the change in the
valuation of certain warrants described below. The net loss for the
year 2011 was $2.3 million, or $0.02 per share, compared to a net
loss in 2010 of $32.2 million, or $0.29 per share. The $29.9
million improvement in the net loss was due to the change in the
valuation of certain warrants described below partially offset by
an increase in the operating loss.
In connection with prior equity financings, AVI issued warrants
that are classified as current liabilities and are adjusted to fair
value on a quarterly basis with the change in fair value being
included in net income (loss). The amount reported as net income
(loss) is a non-cash item as AVI is not required to expend any cash
to settle the warrant liability. The warrant liability is primarily
affected by changes in AVI's stock price during each financial
reporting period which causes the warrant liability to fluctuate as
the market price of AVI's stock fluctuates. In the fourth quarter
of 2011, the change in the warrant valuation resulted in other
income of $7.4 million while in the fourth quarter of 2010, the
change in valuation resulted in other expense of $6.0 million. For
the year 2011, the change in the warrant valuation resulted in
other income of $33.0 million compared to other expense of $11.5
million for 2010.
AVI had cash and cash equivalents of $39.9 million as of
December 31, 2011, an increase of $6.3 million from December 31,
2010. This increase was due primarily to the April 2011 public
stock offering which raised net proceeds of $32.1 million offset in
part by $23.7 million of cash used in operations during the
year.
2012 Guidance
For 2012, AVI anticipates that revenue will be in the $40 to $50
million range and that loss from operations will be in the $30 to
$35 million range. This guidance is based on the assumption that
AVI will continue to receive significant funding from its current
government contracts for Ebola and Marburg. If AVI does not
continue to receive this funding, its guidance would change
significantly.
Recent Corporate Developments
Duchenne Muscular Dystrophy (DMD) Program
- Completed dosing in all patients in 24-week Phase IIb study.
Expecting unblinded data by end of April.
- Completed enrollment for continuous dosing extension study to
assess the long-term safety and efficacy of eteplirsen. All
patients from the Phase IIb study, including placebo patients, have
been rolled over to open-label drug.
- An independent Data and Safety Monitoring Board (DSMB) reviewed
12-week biopsy data from the highest dose cohort (50 mg/kg) in the
Phase IIb study of eteplirsen and did not identify any safety
concerns and determined it was safe to proceed with the Phase IIb
trial as planned.
- Announced collaborative efforts for the development of two
additional exon-skipping drugs. AVI is actively pursuing the
development of a product candidate that skips exon 45 through an
IND-enabling collaboration and finalizing terms of a second
IND-enabling collaboration for the development of a product
candidate that skips exon 50.
Infectious Disease Programs
- Announced FDA approval to proceed with a single oligomer
component of AVI-6003, AVI-7288, in studies to support the safety
and efficacy of post-exposure prophylaxis against Marburg virus
infection. AVI will proceed with using AVI-7288 in multiple
ascending dose studies, which are planned to characterize the
safety, tolerability and pharmacokinetics of multiple doses of
AVI-7288 in healthy adult volunteers, and non-human primate studies
evaluating efficacy.
- Announced positive safety results from all six dose cohorts in
the single ascending dose studies of AVI-6002 and AVI-6003, AVI's
lead drug candidates being evaluated for the treatment of Ebola
virus and Marburg virus, respectively. Data was evaluated by an
independent DSMB, which issued recommendations for both studies to
progress as planned to multiple ascending dose studies after no
safety concerns were identified.
Other Developments
- Appointed Jayant Aphale, Ph.D., a leader in technical
operations and cross-functional leadership, as Senior Vice
President of Technical Operations.
Conference Call
AVI BioPharma will hold a financial results and corporate update
conference call today at 5:00 p.m., Eastern Time (2:00 p.m.,
Pacific Time). The conference call may be accessed by dialing
866.510.0676 for domestic callers and 617.597.5361 for
international callers. The passcode for the call is 79552457.
Please specify to the operator that you would like to join the "AVI
BioPharma fourth quarter and full year 2011 earnings call." The
conference call will be webcast live under the events section of
AVI's website at www.avibio.com, and will be archived there
following the call for 90 days. Please connect to AVI's website
several minutes prior to the start of the broadcast to ensure
adequate time for any software download that may be necessary. An
audio replay will be available through March 8, 2012 by calling
888.286.8010 or 617.801.6888 and entering access code 79635429.
About AVI BioPharma
AVI BioPharma is focused on the discovery and development of
novel RNA-based therapeutics for rare and infectious diseases, as
well as other select disease targets. Applying pioneering
technologies developed and optimized by AVI, the Company is able to
target a broad range of diseases and disorders through distinct
RNA-based mechanisms of action. Unlike other RNA-based approaches,
AVI's technologies can be used to directly target both messenger
RNA (mRNA) and precursor messenger RNA (pre-mRNA) to either
down-regulate (inhibit) or up-regulate (promote) the expression of
targeted genes or proteins. By leveraging its highly differentiated
RNA-based technology platform, AVI has built a pipeline of
potentially transformative therapeutic agents, including
eteplirsen, which is in clinical development for the treatment of
Duchenne muscular dystrophy, and multiple drug candidates that are
in clinical development for the treatment of infectious diseases.
For more information, visit www.avibio.com.
Forward-Looking Statements and
Information
In order to provide AVI's investors with an understanding of its
current results and future prospects, this press release contains
statements that are forward-looking. Any statements contained in
this press release that are not statements of historical fact may
be deemed to be forward-looking statements. Words such as
"believes," "anticipates," "plans," "expects," "will," "intends,"
"potential," "possible" and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements include statements about the development of AVI's
product candidates, including IND-enabling collaborations,
initiation of multiple ascending dose studies and non-human primate
studies of AVI-7288 and the expected timing of results from the
Phase IIb clinical trial of eteplirsen, and AVI's estimates
regarding its future revenue and expenses and expectations
regarding future success, revenue and funding from government and
other sources.
These forward-looking statements involve risks and
uncertainties, many of which are beyond AVI's control. Known risk
factors include, among others: clinical trials may not demonstrate
safety and efficacy of any of AVI's drug candidates and/or AVI's
antisense-based technology platform; development of any of AVI's
drug candidates, including AVI-7288, may not result in funding from
the U.S. government in the anticipated amounts or on a timely
basis, if at all; and any of AVI's drug candidates may fail in
development, may not receive required regulatory approvals, or be
delayed to a point where they do not become commercially
viable.
Any of the foregoing risks could materially and adversely affect
AVI's business, results of operations and the trading price of
AVI's common stock. For a detailed description of risks and
uncertainties AVI faces, you are encouraged to review the official
corporate documents filed with the Securities and Exchange
Commission. AVI does not undertake any obligation to publicly
update its forward-looking statements based on events or
circumstances after the date hereof.
AVI BIOPHARMA, INC.
(A Development-Stage Company)
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Revenues from license fees,
grants and research contracts $ 13,585 $ 15,516 $ 46,990 $ 29,420
Operating expenses:
Research and development 18,701 13,886 66,862 35,972
General and administrative 3,884 3,365 16,055 14,382
--------- --------- --------- ---------
Operating loss (9,000) (1,735) (35,927) (20,934)
Other income (loss):
Interest (expense) income and
other, net 147 84 587 259
Gain (loss) on change in
warrant valuation 7,443 (5,993) 33,022 (11,502)
--------- --------- --------- ---------
Net loss $ (1,410) $ (7,644) $ (2,318) $ (32,177)
========= ========= ========= =========
Net loss per share--basic and
diluted $ (0.01) $ (0.07) $ (0.02) $ (0.29)
========= ========= ========= =========
Shares used in per share
calculations--basic and diluted 135,734 112,328 129,595 111,233
========= ========= ========= =========
BALANCE SHEET HIGHLIGHTS
(in thousands)
As of As of
December 31, December 31,
2011 2010
-------------- -------------
Cash and cash equivalents $ 39,904 $ 33,589
Total current assets 45,184 37,838
Total assets 54,368 45,976
Total current liabilities 20,601 45,857
Total shareholders' equity (deficit) 31,017 (2,817)
AVI Investor and Media Contact: Erin Cox 425.354.5140 Email
Contact AVI Media Contact: David Schull 858.717.2310 or
212.845.4271 Email Contact
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