BUFFALO, NY--(Marketwired - November 05, 2014) - Cleveland BioLabs, Inc. (NASDAQ: CBLI) today reported financial results and development progress for the third quarter ended September 30, 2014.
Cleveland BioLabs reported a net loss for the third quarter of 2014 of $4.1 million, or $0.07 per share, compared to a net loss of $4.1 million, or $0.09 per share, for the same period in 2013. Net loss for the first nine months of 2014 was $9.6 million, or $0.18 per share, compared to a net loss of $16.9 million, or $0.38 per share, for the same period in 2013, a reduction of $7.3 million. This net loss reduction was due to a reduction in operating losses of $9.1 million, and $1.2 million of non-cash income related to a change in value of accrued warrant liability, offset by $1.2 million for additional interest expense, $0.4 million in foreign exchange losses and $1.4 million in losses attributed to minority interests. The reduced operating losses were due to a narrowed focus of development activities, lower development costs for entolimod's biodefense indication and other cost saving measures.
At September 30, 2014, the Company had cash, cash equivalents and short-term investments of $9.1 million, $4.9 million of which was available for general use and $4.2 million of which was restricted for the use of subsidiaries.
Yakov Kogan, Ph.D., MBA, Chief Executive Officer, stated, "We achieved several milestones during the third quarter. Agreement was reached with the U.S. Food and Drug Administration that our existing efficacy and safety data and animal-to-human dose conversion are sufficient to proceed with a pre-Emergency Use Authorization (pre-EUA) submission for entolimod's biodefense indication. Our team has been focused on compiling an application that has the highest chances for success as quickly as possible. On the oncology side of our business, the Phase 1 study of entolimod in patients with advanced cancer at Roswell Park Cancer Institute has been concluded. Analysis of trial data, including immune cell response, is expected to be complete in the first half of 2015. We are preparing a small expansion study in the Russian Federation to gather additional immune cell response data at the highest dose levels reached in the Roswell Park study. This expansion study will be financially supported by a matching-funds grant from the Russian Ministry of Industry and Trade. We are also finalizing interim data for the oral administration study of Curaxin CBL0137. Lastly, dosing was started in a Phase 1 healthy subject study of CBLB612, a drug candidate in development for the induction and mobilization of hematopoietic stem cells (HSCs). In addition to evaluating safety, tolerability and pharmacology of a single administration of CBLB612, this study has been designed to characterize the type, quantity and timing of HSC mobilization in these subjects."
Recruitment of the sixth cohort is underway in a multi-center, Phase 1 trial assessing the intravenous administration of Curaxin CBL0137 in patients with metastatic or unresectable advanced solid cancers and lymphomas. In parallel, dosing of the eighth cohort is ongoing in a multicenter, Phase 1 study assessing the oral administration of Curaxin CBL0137 in patients with advanced solid tumors that are resistant or refractory to current standard treatment. To date, no drug-related serious adverse events have been reported in either trial.
Further Financial Highlights
Revenue for the third quarter of 2014 decreased to $0.4 million compared to $1.6 million for the third quarter of 2013. Revenue for the first nine months of 2014 decreased to $2.3 million compared to $4.6 million for the same period in 2013. These decreases were primarily the result of the completion of contracts with the Department of Defense for entolimod's biodefense indication and variances in the levels of development activity under other contracts with the Ministry of Industry and Trade of the Russian Federation, or MPT.
Research and development costs for the third quarter of 2014 decreased to $2.1 million compared to $4.2 million for the same period in 2013. Nine-month research and development costs for the 2014 period decreased to $6.8 million compared to $14.9 million for the same period in 2013. These decreases were primarily due to completion of third-party service contracts for several compounds in-line with and largely in support of the contracted development work discussed above, as well as reduced compensation costs primarily attributable to our transfer of personnel to Buffalo BioLabs, LLC in the fourth quarter of 2013.
General and administrative costs for the third quarter of 2014 decreased to $1.8 million compared to $3.3 million for the same period in 2013. General and administrative costs for the first nine months of 2014 decreased to $6.5 million compared to $9.8 million for the same period in 2013. For the nine-month period, $2.0 million of these decreases were due to reduction in costs related to our personnel and consultants and $1.3 million were due to other cost-saving actions.
Conference Call Information
Cleveland BioLabs management will host a conference call at 10:00 a.m. ET today to provide updates and address investor questions regarding general business developments. Interested parties may participate by dialing 877-407-9205 (US) or 201-689-8054 (International), approximately five to ten minutes before the call start time. A live webcast of the conference call will be available on the investor page of the Cleveland BioLabs web site at www.cbiolabs.com. A replay of the call will be available starting on November 5, 2014, at 1:00 p.m. ET through November 19, 2014, at 11:59 p.m. ET. Interested parties may access the replay by dialing 877-660-6853 (US) or 201-612-7415 (International) and entering conference ID number 13593933. An archived webcast of the conference call will be available for 90 days on the Investors page of the Cleveland BioLabs web site at www.cbiolabs.com.
About Cleveland BioLabs
Cleveland BioLabs, Inc. is an innovative biopharmaceutical company seeking to develop first-in-class pharmaceuticals designed to address diseases with significant medical need. The company's lead product candidates are entolimod, which is being developed for a biodefense indication and as a potential cancer treatment, and Curaxin CBL0137, our lead oncology product candidate. The company conducts business in the United States and in the Russian Federation through our three operating subsidiaries, Incuron, LLC, BioLabs 612, LLC and Panacela Labs, Inc. The company maintains strategic relationships with the Cleveland Clinic, Roswell Park Cancer Institute, and the Children's Cancer Institute Australia. To learn more about Cleveland BioLabs, Inc., please visit the Company's website at http://www.cbiolabs.com.
This press release contains certain forward-looking information about Cleveland BioLabs that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. Words such as "expect(s)," "feel(s)," "believe(s)," "will," "may," "preparing," "finalizing," and "underway" and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding our ability to successfully develop and commercialize our therapeutic products; our ability to successfully submit and receive approval of our pre-EUA application for entolimod, the conduct and results of our various clinical trials; our ability to obtain approval from the U.S. Food and Drug Administration of our product candidates; our ability to successfully submit and receive approval of our pre-EUA application for entolimod; and future performance. All of such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.
These risks and uncertainties include, among others, the Company's failure to successfully and timely develop existing and new products; the Company's collaborative relationships and the financial risks related thereto; the risks inherent in the early stages of drug development and in conducting clinical trials; the Company's ability to comply with its obligations under license agreements; the Company's inability to obtain regulatory approval in a timely manner or at all; subsequent changes in the agreement with the Russian Ministry of Industry and Trade, the Company's history of operating losses and the potential for future losses, which may lead the Company to not be able to continue as a going concern. Some of these factors could cause future results to materially differ from the recent results or those projected in forward-looking statements. See also the "Risk Factors" and "Forward-Looking Statements" described in the Company's periodic filings with the Securities and Exchange Commission.
TABLES FOLLOW
CLEVELAND BIOLABS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2014 2013
-------------- --------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 7,877,432 $ 10,048,466
Short-term investments 1,269,467 305,538
Accounts receivable 175,191 458,391
Other current assets 365,461 344,386
-------------- --------------
Total current assets 9,687,551 11,156,781
Equipment, net 287,827 457,912
Restricted cash 2,427,874 2,921,724
Other long-term assets 65,192 159,224
-------------- --------------
Total assets $ 12,468,444 $ 14,695,641
============== ==============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 889,402 $ 794,397
Accrued expenses 1,796,382 2,445,446
Deferred revenue 356,580 1,069,438
Accrued warrant liability 1,861,013 1,241,311
Current portion of note payable 735,654 351,527
Current portion of capital lease obligation 29,560 83,634
-------------- --------------
5,668,591 5,985,753
Noncurrent portion of capital lease
obligation - 7,522
Long-term debt 3,479,396 7,121,388
Commitments and contingencies - -
-------------- --------------
Total liabilities 9,147,987 13,114,663
Stockholders' equity:
Total Cleveland BioLabs, Inc. stockholders'
deficit (10,349,558) (9,522,945)
Noncontrolling interest in stockholders'
equity 13,670,015 11,103,923
-------------- --------------
Total stockholders' equity 3,320,457 1,580,978
-------------- --------------
Total liabilities and stockholders' equity $ 12,468,444 $ 14,695,641
============== ==============
CLEVELAND BIOLABS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended Nine months ended
September 30, September 30,
2014 2013 2014 2013
------------ ------------ ------------ ------------
Revenues:
Grants and contracts $ 415,126 $ 1,635,600 $ 2,311,467 $ 4,616,334
Operating expenses:
Research and
development 2,068,245 4,205,238 6,832,241 14,909,882
General and
administrative 1,785,620 3,286,830 6,449,531 9,787,053
------------ ------------ ------------ ------------
Total operating
expenses 3,853,865 7,492,068 13,281,772 24,696,935
------------ ------------ ------------ ------------
Loss from operations (3,438,739) (5,856,468) (10,970,305) (20,080,601)
------------ ------------ ------------ ------------
Other income
(expense):
Interest and other
income (expense) (68,932) 97,534 (1,010,640) 225,299
Foreign exchange
gain (loss) (271,699) (15,057) (330,876) 59,853
Change in value of
warrant liability (836,293) 1,163,030 1,663,390 510,919
------------ ------------ ------------ ------------
Total other income
(expense) (1,176,924) 1,245,507 321,874 796,071
------------ ------------ ------------ ------------
Net loss (4,615,663) (4,610,961) (10,648,431) (19,284,530)
------------ ------------ ------------ ------------
Net loss
attributable to
noncontrolling
interests 519,529 519,765 1,005,764 2,386,900
------------ ------------ ------------ ------------
Net loss
attributable to
Cleveland BioLabs,
Inc. $ (4,096,134) $ (4,091,196) $ (9,642,667) $(16,897,630)
============ ============ ============ ============
Net loss available
to common
stockholders per
share of common
stock, basic and
diluted $ (0.07) $ (0.09) $ (0.18) $ (0.38)
============ ============ ============ ============
Weighted average
number of shares
used in calculating
net loss per share,
basic and diluted 57,110,198 45,061,274 53,016,147 44,946,340
CLEVELAND BIOLABS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
2014 2013
------------ ------------
Cash flows used in operating activities $(11,316,565) $(18,923,142)
Cash flows provided by (used in) investing
activities (1,142,661) 666,920
Cash flows provided by financing activities 10,788,298 7,251,055
Effect of exchange rate change on cash and
equivalents (500,106) (333,995)
------------ ------------
Increase (decrease) in cash and cash equivalents (2,171,034) (11,339,162)
Cash and cash equivalents at beginning of period 10,048,466 25,652,083
------------ ------------
Cash and cash equivalents at end of period $ 7,877,432 $ 14,312,921
============ ============
CLEVELAND BIOLABS, INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
We define net cash burn as the net increase (or decrease) in cash, cash equivalents and short-term investments excluding the effect of capital markets financing activities, and the net increase (or decrease) in restricted cash, as determined in accordance with generally accepted accounting principles or GAAP. And we separately track net cash burn for Cleveland BioLabs, Inc. and its wholly-owned subsidiary BioLab 612, LLC, which we refer to as CBLI Stand-alone, as well as for the consolidated entity which includes the accounts of Incuron, LLC, Panacela Labs, Inc. and Panacela Labs, LLC. This non-GAAP measure may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. We believe that net cash burn is relevant and useful information for the Company and our investors as it provides a simple method of determining net cash used by the Company. A calculation of net cash burn is provided below:
Quarter Ended Nine months ended
September 30, September 30,
2014 2013 2014 2013
------------ ------------ ------------ ------------
CBLI Stand-alone:
Cash, cash
equivalents, and
short-term
investments,
beginning of
period $ 7,654,233 $ 8,789,689 $ 7,957,302 $ 17,945,147
Cash, cash
equivalents and
short-term
investments, end
of period 4,881,603 10,831,221 4,881,603 10,831,221
------------ ------------ ------------ ------------
Period
increase/
(decrease) (2,772,630) 2,041,532 (3,075,699) (7,113,926)
Less net proceeds
from the sale of
common stock - - (9,697,501) -
Plus/(minus) loan
prepayments/
(proceeds) - (5,797,675) 4,000,000 (5,797,675)
------------ ------------ ------------ ------------
Net cash burn for
the period (2,772,630) (3,756,143) (8,773,200) (12,911,601)
Number of months
in period 3 3 9 9
------------ ------------ ------------ ------------
Net monthly cash
burn $ (924,210) $ (1,252,048) $ (974,800) $ (1,434,622)
============ ============ ============ ============
Consolidated:
Cash, cash
equivalents, and
short-term
investments,
beginning of
period $ 11,103,596 $ 13,551,123 $ 10,354,004 $ 28,286,027
Cash, cash
equivalents and
short-term
investments, end
of period 9,146,899 14,622,087 9,146,899 14,622,087
------------ ------------ ------------ ------------
Period
increase/
(decrease) (1,956,697) 1,070,964 (1,207,105) (13,663,940)
Less net proceeds
from the sale of
common stock - - (9,697,501) -
Plus/(minus) loan
prepayments/
(proceeds) - (5,797,675) 4,000,000 (7,297,675)
Less
noncontrolling
interest capital
contribution to
Incuron, LLC (2,237,154) - (5,152,393) -
Investments in
restricted cash 1,421,861
Net cash burn for
the period (4,193,851) (4,726,711) (12,056,999) (19,539,754)
Number of months
in period 3 3 9 9
------------ ------------ ------------ ------------
Net monthly cash
burn $ (1,397,950) $ (1,575,570) $ (1,339,667) $ (2,171,084)
============ ============ ============ ============
Contact:
Rachel Levine
Vice President, Investor Relations
Cleveland BioLabs, Inc.
T: (917) 375-2935
E: rlevine@cbiolabs.com
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