Genta Incorporated Announces 3rd Quarter 2005 Financial Results
BERKELEY HEIGHTS, N.J., Nov. 7 /PRNewswire-FirstCall/ -- Genta Incorporated , a biotechnology company focused on the identification and development of innovative cancer therapies, today announced third quarter financial results and earnings.
"The past quarter highlighted major strides that were made at all levels of the Company," commented Raymond P. Warrell, Jr., M.D., Chairman and Chief Executive Officer of Genta. "Having devoted the last 12 months toward executing our clinical and regulatory strategies for Genasense(R), we have turned our focus toward rebuilding our commercial capabilities. Our cash position has been enhanced, and we are advancing our pipeline products toward the clinic. We have completed accrual to several other randomized clinical trials, and we look forward to data release from these studies in 2006."
Dr. Warrell continued: "We remain on track to complete by year-end 2005 the regulatory filings for marketing approval of Genasense plus chemotherapy in Europe for patients with advanced melanoma, and in the U.S. for patients with relapsed or refractory chronic lymphocytic leukemia."
Other highlights of the third quarter included: * Data from extended followup in the Phase 3 trial of Genasense plus chemotherapy in patients with relapsed or refractory chronic lymphocytic leukemia (CLL) were presented in September at the International World Congress on CLL. In that trial, 241 patients were randomly assigned to receive fludarabine plus cyclophosphamide (Flu/Cy) with or without Genasense. The trial achieved its primary endpoint, which was a statistically significant increase in the proportion of patients who achieved a complete or nodular partial response (CR/nPR) (17% vs. 7%, respectively; P=0.025). To date, 6 of the 8 patients (75%) who achieved CR/nPR with chemotherapy alone have relapsed compared with 5 of 20 patients (25%) in the Genasense treatment group. The median duration of CR/nPR was 22 months in the chemotherapy alone group; the median has not been reached in the Genasense group (P=0.03). All CR/nPR responses have been "durable" (i.e., exceeding 6 months duration). Other information about this trial can be viewed at: http://www.genta.com/Genta/InvestorRelation/2005/press_20050630_1.html In June, Genta initiated a "rolling" New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) in this indication. The Company anticipates that the NDA will be completed by year-end 2005. * In an action taken by the European Medicines Agency (EMEA), a proposed Marketing Authorization Application (MAA) for Genasense was assigned to Spain and France as Rapporteur and Co-Rapporteur countries, respectively. The MAA proposes the use of Genasense plus dacarbazine (DTIC) for treatment of patients with advanced melanoma who have not previously received chemotherapy. The filing will comprise data collected after extended follow-up of patients who were enrolled into a randomized Phase 3 trial of dacarbazine with or without Genasense. The study showed that patients treated with Genasense achieved statistically significant increases in overall response, complete response, durable response, and progression-free survival. Intent-to-treat (ITT) analysis showed that the addition of Genasense to dacarbazine improved median survival to 9.0 months, compared with 7.8 months for patients treated with dacarbazine alone, which was the study's primary endpoint. The hazard ratio (HR) was 0.87. The difference represented a strong trend that approached but did not reach statistical significance (P=0.077). A high serum LDH level, which is strongly associated with poor outcome, was one of the pre-specified stratification factors prior to randomization in this study. In patients without an elevation in LDH (N=508), the addition of Genasense was associated with a significant increase in overall survival (P=0.018), whereas there was no survival difference in patients with elevated levels. Other information regarding this trial can be viewed at: http://www.genta.com/Genta/InvestorRelation/2005/press_20050516.html. The Company anticipates that the MAA filing will be completed by year-end 2005.
Efficacy results from the Phase 3 trial of Genasense in patients with advanced melanoma are summarized in the table below.
End-Point Genasense/DTIC vs. DTIC P Overall response 13.5% vs. 7.5% 0.007 Complete response 2.8% vs. 0.8% 0.031 Durable response 7.3% vs. 3.6% 0.027 Progression-free survival, median 2.6 vs. 1.6 mos. 0.0007 Overall survival (ITT), median 9.0 vs. 7.8 mos. 0.077 Overall survival: LDH < 1.1 x ULN, median 11.4 vs. 9.7 mos. 0.018 Financial Information
The Company reported a net loss of $7.9 million and net income of $8.0 million for the three and nine months ended September 30, 2005, respectively, compared to net losses of $5.6 million and $47.3 million for the same periods in 2004. The third quarter loss reflects the May 2005 termination of the Collaborative Agreement to commercialize Genasense(R) that had been in place between Genta and sanofi-aventis. As a result of the termination, the income statement for the third quarter of 2005 recognizes no license fees and development funding revenue and no research and development reimbursement. As of September 30, 2005, the Company had cash, cash equivalents and marketable securities totaling $28.8 million. On August 11, 2005 the Company sold approximately 19.1 million shares of its Common Stock for gross proceeds of approximately $17.5 million, before fees and expenses. The Shares were offered and sold pursuant to Genta's shelf registration statement on Form S-3 filed with the Securities and Exchange Commission.
In the third quarter, total revenues were $0.1 million, generated by sales of Ganite(R), compared to total revenues of $1.4 million in the third quarter of 2004. License fees and development funding revenues of $1.3 million for the three months ended September 30, 2004 were generated by the recognition of the initial $10.0 million licensing fee and $40.0 million development funding received from sanofi-aventis in 2002 under the Collaborative Agreement. Prior to the sanofi-aventis notice of termination in November 2004, these deferred revenues were being recognized over a period of 115 months. As a result of the notice of termination, the remaining balance of deferred revenues as of November 2004 were recognized over the six-month termination notice period ending in May 2005.
Third quarter gross expenses were $8.1 million, representing an $18.5 million decrease from the third quarter 2004. Expenses during the third quarter of 2004 included $13.3 million related to purchases of Genasense bulk drug substance and a $1.3 million loss on disposition of property and equipment due to the closure of our research facility in Salt Lake City. There was no expense reimbursement in the third quarter of 2005 since as of May 2005 all Genasense costs are the responsibility of Genta.
As of September 30, 2005, Genta had no short-term or long-term debt, down from total debt of $29.0 million at September 30, 2004. Genta had cash, cash equivalents and marketable securities of $28.8 million as of September 30, 2005, compared to $42.2 million as of December 31, 2004. The monthly cash outflows year-to-date are consistent with the 2005 financial guidance previously provided by the Company.
Conference Call and Webcast
Genta will host a conference call and live audio webcast to discuss its third quarter financial results and the progress with its lead anticancer compound Genasense(R). Genta management will host the conference call and live audio webcast on November 7 at 10:00 AM EST. Conference call/webcast information:
US/Canada call: 877-634-8606; conference code 1604361
International call: 706-679-3140; conference code 1604361
The webcast will be available in the Investor Relations section of the Company's website at: http://www.genta.com. Audio replay of the conference call will be available approximately two-hours post completion of the call and will be archived for 30 days.
About Genasense
Genasense inhibits production of Bcl-2, a protein made by cancer cells that is thought to block chemotherapy-induced apoptosis (programmed cell death). By reducing the amount of Bcl-2 in cancer cells, Genasense may enhance the effectiveness of current anticancer treatment. Genta is pursuing a broad clinical development program with Genasense to evaluate its potential to treat various forms of cancer. In addition, Genta has established a Cooperative Research and Development Agreement (CRADA) with the U.S. National Cancer Institute (NCI), which has initiated additional clinical trials. Information about the NCI-sponsored studies can be obtained at: http://www.clinicaltrials.gov/ct/search;jsessionid=50D3886BAAE768BEA0DE36526F6 8083B?term=oblimersen
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About Genta
Genta Incorporated is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. The Company's research platform is anchored by two major programs that center on oligonucleotides (RNA- and DNA- based medicines) and small molecules. Genasense(R) (oblimersen sodium) Injection, the Company's lead compound from its oligonucleotide program, is currently undergoing late-stage, Phase 3 clinical testing. In 2005, the Company initiated a "rolling" New Drug Application to the Food and Drug Administration for the use of Genasense plus fludarabine and cyclophosphamide in patients with relapsed or refractory chronic lymphocytic leukemia. The Company anticipates that the NDA will be completed by year-end 2005. The Company has also indicated its intention to submit by year-end 2005 a Marketing Authorization Application (MAA) to the European Medicines Agency (EMEA) for the use of Genasense plus dacarbazine in patients with advanced melanoma. The leading drug in Genta's small molecule program is Ganite(R) (gallium nitrate injection), which the Company is exclusively marketing in the U.S. for treatment of patients with cancer related hypercalcemia that is resistant to hydration. For more information about Genta, please visit our website at: http://www.genta.com.
This press release contains forward-looking statements with respect to business conducted by Genta Incorporated. By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially. For a discussion of those risks and uncertainties, please see the Company's Annual Report/Form 10-K for 2004.
Genta Incorporated Selected Condensed Consolidated Financial Data (unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended September 30 September 30 2005 2004 2005 2004 Revenues: License fees/Development Funding $- $1,310 $26,229 $3,928 Product sales - net 86 87 259 711 Total revenues 86 1,397 26,488 4,639 Cost of goods sold 22 19 56 165 Provision for excess inventory - 693 (21) 693 Gross margin 64 685 26,453 3,781 Costs and expenses: Research and development 4,619 20,643 14,040 61,940 Selling, general and administrative 3,495 4,721 12,116 24,228 Loss on disposition of property and equipment 1 1,254 4 1,254 Total costs and expenses - gross 8,115 26,618 26,160 87,422 sanofi-aventis reimbursement - (20,489) (6,090) (36,453) Total costs and expenses - net 8,115 6,129 20,070 50,969 Gain on forgiveness of debt - - 1,297 - Other income (expense) 147 (136) 361 (79) Net income (loss) $(7,904) $(5,580) $8,041 $(47,267) Net income (loss) per basic and diluted share $(0.07) $(0.07) $0.08 $(0.60) Shares used in computing basic net income (loss) per share 105,629 80,358 98,820 78,758 Shares used in computing diluted net income (loss) per share 105,629 80,358 99,015 78,758 Selected Condensed Consolidated Balance Sheet Data September 30 December 31 2005 2004 Cash, cash equivalents and marketable securities $28,814 $42,247 Working capital 21,867 (4,269) Total assets 34,138 50,532 Total stockholders' equity 26,198 1,752
Genta IncorporatedCONTACT: Genta Incorporated: +1-908-286-3980, info@genta.com
Web site: http://www.genta.com/