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Agennix AG Reports Financial Results for First Quarter of 2012


5/9/2012 11:36:58 AM

PLANEGG, GERMANY and MUNICH, GERMANY and PRINCETON, NJ and HOUSTON, TX--(Marketwire - May 09, 2012) - Agennix AG (FRANKFURT: AGX) (XETRA: AGX), a biopharmaceutical company focused on developing novel therapies that have the potential to substantially lengthen and improve the lives of critically ill patients in areas of major unmet medical need, today announced financial results for the first quarter and three months ended March 31, 2012.

Torsten Hombeck, Ph.D., Chief Financial Officer and Spokesperson of the Management Board, said: "I am pleased that we have attained another important milestone in the development of our lead investigational agent, talactoferrin, a first-in-class oral Dendritic Cell Mediated Immunotherapy: We have reached the number of events needed to perform the overall survival analysis in our ongoing Phase III FORTIS-M trial in non-small cell lung cancer. We continue to expect top-line data from this trial to be available in July/August of this year."

Dr. Hombeck continued: "In addition to our focus on the FORTIS-M trial, we are laying the groundwork to prepare for the future commercial success of talactoferrin. This is reflected in the commercial supply agreements that we announced earlier in the year to ensure we will have sufficient supply to support a potential commercial launch and beyond, and to continue to optimize the manufacturing process. We also have increased our ongoing medical educational activities for key opinion leaders and the lung cancer community regarding the potential role of immunotherapy in treating patients with non-small cell lung cancer."

First quarter of 2012 compared to first quarter of 2011
The Company did not recognize any revenue during the three months ended March 31, 2012 and 2011.

Research and development ("R&D") expenses for the three months ended March 31, 2012 were EUR 9.5 million compared to EUR 8.2 million for the same period in 2011. The increase in R&D expenses was primarily due to costs associated with the Phase II/III OASIS trial with talactoferrin in severe sepsis, which was initiated at the end of the second quarter of 2011 and stopped in the first quarter of 2012.

Administrative expenses for the three months ended March 31, 2012 were EUR 2.9 million compared to EUR 2.3 million for the same period in 2011. Administrative expenses increased because the Company has augmented certain critical pre-commercialization activities related to a potential regulatory filing and commercial launch of talactoferrin.

Net loss before income tax benefit for the three months ended March 31, 2012 was EUR 12.7 million compared to EUR 11.5 million for the same period in 2011. Income tax benefit for the three months ended March 31, 2012 was EUR 0 compared to EUR 2.9 million for the same period in 2011. Income tax benefit relates to the recognition of deferred tax asset on net operating losses incurred by the Company's subsidiary, Agennix Incorporated, during the period. In the first quarter of 2012, the Company did not recognize any income tax benefit.

Net loss for the three months ended March 31, 2012 was EUR 12.7 million compared to EUR 8.6 million for the same period in 2011. This increase was primarily due to the recognition of the non-cash deferred tax asset during the first quarter of 2011, which did not occur in the current period. Basic and diluted loss per share was EUR (0.25) for the three months ended March 31, 2012, compared to EUR (0.21) for the same period in 2011.

Cash position
As of March 31, 2012, cash, cash equivalents, other current financial assets and restricted cash totaled EUR 32.8 million (December 31, 2011: EUR 44.0 million). Net cash burn for the three months ended March 31, 2012 was EUR 10.8 million. Net cash burn is derived by adding net cash used in operating activities and purchases of property, equipment and intangible assets. The figures used to calculate net cash burn are contained in the Company's interim consolidated cash flow statement for the respective periods.

Quarter over quarter results: first quarter of 2012 compared to fourth quarter of 2011
The Company did not recognize any revenue in the first quarter of 2012 or in the fourth quarter of 2011. R&D expenses were EUR 9.5 million for the first quarter of 2012 compared EUR 12.0 million for the fourth quarter of 2011. This decrease is because certain manufacturing costs were expensed in the fourth quarter of 2011 and clinical trial costs were higher in that quarter. Administrative expenses for the first quarter of 2012 were EUR 2.9 million compared to EUR 2.2 million for the fourth quarter of 2011. Administrative expenses increased because the Company has increased certain critical pre-commercialization activities related to a potential regulatory filing and commercial launch of talactoferrin. The Company had a net loss of EUR 12.7 million for the first quarter of 2012 compared to EUR 16.7 million for the previous quarter. Income tax expense for the first quarter of 2012 was EUR 0 compared to EUR 6.4 million for the fourth quarter of 2011. Net loss before income tax expense was EUR 12.7 million for the first quarter of 2012 compared to EUR 10.3 million in the fourth quarter of 2011. Basic and diluted loss per share was EUR (0.25) for the first quarter of 2012 compared to EUR (0.37) for the fourth quarter of 2011.

Financial guidance
The Company's financial outlook for 2012 and 2013 is highly dependent on the outcome of the FORTIS-M Phase III trial in NSCLC, which is expected to read out in July/August 2012. The Company provided the following financial guidance:

Revenues: Management expects no substantial cash generating revenues for 2012 or 2013. This guidance does not consider cash revenue from the potential partnering of the Company's product candidates due to the uncertainty of the timing of such events. However, if the FORTIS-M trial is positive, Agennix expects to generate revenue from one or more collaboration and license agreements for talactoferrin during this time period.

R&D expenses: The Company expects R&D expenses for the first half of 2012 to be reasonably in line with the first half of 2011. For the second half of 2012 and for 2013, R&D expenses are dependent on the outcome of the FORTIS-M trial. Should the FORTIS-M trial be positive, the Company expects to incur additional costs related to regulatory filings and increased manufacturing costs in preparation for a potential market launch. In addition, in such a positive scenario, Agennix is likely to expand its clinical development activities.

Administrative expenses: Administrative expenses in 2012 and 2013 are expected to increase compared to 2011 as the Company expects to continue to moderately ramp up certain critical pre-commercialization activities for a potential market launch of talactoferrin. Should the FORTIS-M trial be positive, these activities and related expenses would increase significantly, potentially including costs related to beginning to build a commercial infrastructure in the U.S.

Cash position: Management believes that Agennix will have sufficient cash to fund its operations into the first quarter of 2013. This should enable the Company to obtain top-line data from the FORTIS-M trial, expected in July/August of 2012, assuming no significant changes to currently projected timelines, and to advance potential partnering discussions. The Company will need to raise additional funds through licensing agreements and/or through strategic and/or public equity or debt investments to fund operations beyond this point.

Talactoferrin update
Agennix also provided an update on its lead product candidate, talactoferrin, a first-in-class, oral Dendritic Cell Mediated Immunotherapy (DCMI).

The Company reported that the pre-specified number of events required for conducting the primary analysis of overall survival has been reached for the ongoing Phase III FORTIS-M trial in non-small cell lung cancer patients whose disease has progressed following two or more prior therapies. Agennix confirmed its guidance that the Company expects to report top-line data from the trial in July/August 2012.

The Company provided additional information from its ongoing review of the available results from the OASIS Phase II/III trial in severe sepsis. As previously reported, 28-day all-cause mortality, the primary endpoint of the study, was 25% in the talactoferrin arm compared to 18% in the placebo arm, which was an unexpectedly low mortality rate for placebo compared to other recent late-stage clinical trials in severe sepsis. The difference between the two groups in the OASIS trial was not statistically significant. Further analyses have indicated that the key predictors of mortality in the study were age, site of infection, number of organ dysfunctions and how sick the patients were before enrolling in the study (as measured by APACHE II score and Charlson co-morbidity score). Imbalances between the arms in favor of the placebo group in some of these factors could have contributed to the outcome. Neither treatment with talactoferrin versus placebo nor gender was a predictor of mortality in the study. The results are based on 305 patients enrolled in the study, with 153 in the talactoferrin group and 152 in the placebo group. These results are still preliminary and subject to change. Further analyses are ongoing, including evaluating mortality over a longer time period.

As previously reported, the Company has discussed the results of the OASIS trial with the Data Safety Monitoring Board (DSMB) of the FORTIS trials. The FORTIS DSMB agreed with Agennix's assessment that, based on the available data from the OASIS trial, no changes to the conduct of the ongoing FORTIS-M trial are necessary and the trial can continue as planned. The additional analyses that have been performed have not changed this assessment by the Company.

Conference call scheduled
As previously announced, the Company has scheduled a conference call to which participants may listen via live webcast, accessible through the Agennix Web site at www.agennix.com or via telephone. A replay will be available via the Web site following the live event. The call, which will be conducted in English, will be held today, May 9th at 15:00 CET/9 AM EDT. The dial-in numbers for the call are as follows:

Participants from Europe:
+49 (0)69 710 445 598
+44 (0)20 3003 2666

Participants from the U.S.:
+1 212 999 6659

Please dial in 10 minutes before the beginning of the call.

About Agennix
Agennix AG is a publicly listed biopharmaceutical company that is focused on the development of novel therapies that have the potential to substantially lengthen and improve the lives of critically ill patients in areas of major unmet medical need. The Company's most advanced investigational agent is talactoferrin, a first-in-class oral Dendritic Cell Mediated Immunotherapy (DCMI). Talactoferrin is currently in Phase III clinical trials in non-small cell lung cancer. Other clinical development programs include RGB-286638, a multi-targeted kinase inhibitor in Phase I testing for cancer, and a topical gel form of talactoferrin for diabetic foot ulcers. Agennix's registered seat is in Heidelberg, Germany. The Company has three sites of operation: Planegg/Munich, Germany; Princeton, New Jersey and Houston, Texas. For additional information, please visit the Agennix Web site at www.agennix.com.

This press release contains forward-looking statements, which express the current beliefs and expectations of the management of Agennix AG, including statements about the Company's future cash position and the timing of clinical trial results. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond our control, that could cause future results, performance or achievements to differ significantly from those expressed or implied by such forward-looking statements. Actual results could differ materially depending on a number of factors, and we caution investors not to place undue reliance on the forward-looking statements contained in this press release. The achievement of positive results in early stage clinical studies does not ensure that later stage or large scale clinical studies will be successful. Even if the results from our later stage trials with talactoferrin, including the ongoing FORTIS-M trial in non-small cell lung cancer, are considered positive, there can be no guarantee that they will be sufficient to gain marketing approval in the United States or any other country, and regulatory authorities may require additional information, data and/or further pre-clinical or clinical studies to support approval. In such event, there can be no guarantee that the Company will have or be able to obtain the financial resources to conduct any such additional studies or that such studies will yield results sufficient for approval. Even if the results from the FORTIS-M trial are considered positive, there can be no guarantee that the Company will be able to partner talactoferrin or obtain additional financial resources. Forward-looking statements speak only as of the date on which they are made and Agennix undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.

Agennix® is a trademark of Agennix AG.

For the full management report and condensed consolidated financial statements and accompanying notes for the first quarter and three months ended March 31, 2012, please see the Investor Relations section of the Agennix website at http://www.agennix.com/index.php?option=com_content&view=article&id=207&Itemid=104&lang=en

                                                                            
Agennix AG                                                                  
Interim consolidated statement of operations                                
                                                                            
                                                                            
                                                     Three months ended     
                                                          March 31,         
                                                     2012          2011     
                                                  (unaudited)   (unaudited) 
                                                    EUR 000       EUR 000   
                                                                            
Revenue                                                     -             - 
                                                                            
Research and development expenses                      (9,480)       (8,238)
Administrative expenses                                (2,944)       (2,293)
Amortization of intangible assets                          (2)           (1)
Other expenses                                           (340)         (820)
Finance income                                             37            78 
Finance costs                                              (2)         (225)
                                                 ------------  ------------ 
                                                                            
Net loss before tax                                   (12,731)      (11,499)
Income tax benefit                                          -         2,905 
                                                 ------------  ------------ 
Net loss for the period                               (12,731)       (8,594)
                                                 ============  ============ 
                                                                            
Basic and diluted loss per share, euro                  (0.25)        (0.21)
Average number of shares used in computing basic                            
 and diluted loss per share                        51,270,258    41,898,695 
                                                                            
                                                                            
                                                                            
Agennix AG                                                                  
Interim consolidated statement of financial position                        
                                                                            
                                                   March 31,                
                                                     2012      December 31, 
                                                  (unaudited)      2011     
                                                    EUR 000       EUR 000   
                                                                            
                                                                            
                                                                            
ASSETS                                                                      
Non-current assets                                                          
Property and equipment                                  3,539         3,678 
Intangible assets                                      98,992       101,962 
Other non-current assets                                  494           545 
                                                 ------------  ------------ 
Total non-current assets                              103,025       106,185 
                                                                            
Current assets                                                              
Prepayments                                               398           430 
Other current assets                                    2,482         5,376 
Other current financial assets                         11,715        20,024 
Cash and cash equivalents                              21,027        23,912 
                                                 ------------  ------------ 
Total current assets                                   35,622        49,742 
                                                                            
TOTAL ASSETS                                          138,647       155,927 
                                                 ============  ============ 
                                                                            
EQUITY AND LIABILITIES                                                      
Equity attributable to the Company's equity                                 
 holders                                                                    
Issued capital                                         51,270        51,270 
Share premium                                         169,340       169,199 
Other reserves                                          2,097         4,860 
Retained loss                                         (97,380)      (84,649)
                                                 ------------  ------------ 
Total equity                                          125,327       140,680 
                                                                            
Non-current liabilities                                                     
Convertible bonds                                         178           178 
Other non-current liabilities                              58             - 
Deferred tax liability                                  6,748         6,950 
                                                 ------------  ------------ 
Total non-current liabilities                           6,984         7,128 
                                                                            
Current liabilities                                                         
Trade payables                                          1,553         3,013 
Accruals and other liabilities                          4,783         5,106 
                                                 ------------  ------------ 
Total current liabilities                               6,336         8,119 
                                                                            
Total liabilities                                      13,320        15,247 
                                                                            
TOTAL EQUITY AND LIABILITIES                          138,647       155,927 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
Agennix AG                                           Three months ended     
Interim consolidated statement of cash flows              March 31,         
                                                     2012          2011     
                                                  (unaudited)   (unaudited) 
                                                    EUR 000       EUR 000   
                                                                            
Net cash used in operating activities                 (10,679)      (11,504)
Net cash provided by/(used in) investing                                    
 activities                                             8,166       (18,770)
Net cash provided by financing activities                   -            30 
                                                                            
Effect of exchange rate changes on cash and cash                            
 equivalents                                             (372)         (142)
Net decrease in cash and cash equivalents              (2,885)      (30,385)
Cash and cash equivalents at beginning of period       23,912        49,016 
                                                 ------------  ------------ 
Cash and cash equivalents at end of period             21,027        18,631 
                                                 ============  ============ 
                                                                            
                                                                            

For further information, please contact:

Barbara Mueller
Manager, Investor Relations & Corporate Communications
Phone: +49 (0)89 8565 2693
ir@agennix.com

In the U.S.:
Laurie Doyle
Senior Director, Investor Relations & Corporate Communications
Phone: +1 609 524 5884
laurie.doyle@agennix.com

Additional media contact for Europe:
MC Services AG
Raimund Gabriel
Phone: +49 (0) 89 210 228 0
raimund.gabriel@mc-services.eu

Additional investor contact for Europe:
Trout International LLC
Lauren Williams
Senior Vice President
Phone: +44 207 936 9325
lwilliams@troutgroup.com


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