ATLANTA, March 20 /PRNewswire-FirstCall/ -- Corautus Genetics Inc. , a biopharmaceutical company dedicated to the development of innovative gene therapy products for the treatment of cardiovascular (severe angina) and peripheral vascular disease, today reported financial results for the fourth quarter and year ended December 31, 2005, and provided a review of clinical, financial and operating activities.
Corautus is sponsoring a Phase IIb clinical trial named “GENASIS,” which it believes to be the largest cardiovascular study of its kind, to evaluate the safety and efficacy of Vascular Endothelial Growth Factor-2 (VEGF-2) for the treatment of severe angina. The Company began this multi center, randomized, double-blind, placebo-controlled study in the Fall of 2004, and 295 of 404 patients have been treated at 31 clinical sites nationwide.
On March 14, 2006, Corautus announced that in conjunction with Boston Scientific Corporation , it temporarily suspended patient treatments in GENASIS. Boston Scientific requested the voluntary suspension as a result of three recently reported serious adverse events (“SAEs”) of pericardial effusion, which do not appear to be related to the VEGF-2 biologic. Pericardial effusion is a condition characterized by excess fluid in the pericardial sac that surrounds the heart. The percentage of cases requiring further intervention due to pericardial effusion in the GENASIS trial to date has been 1.37 percent. Corautus notified the U.S. Food and Drug Administration (“FDA”) of the voluntary suspension prior to making the public announcement, and in a subsequent teleconference, was informed that the FDA had placed the trial on clinical hold.
“Last year and recent weeks have been very busy for Corautus in planning the regulatory path for a Phase III trial, in operations, and in securing the funds which will carry us through the first quarter of 2007,” stated Richard Otto, President and CEO. “Throughout our trial we have always been focused on patient safety, and therefore, when Boston Scientific asked for time to review the three recent SAEs, we agreed to their request. Personnel from Corautus and Boston Scientific, including senior executives from both companies, are working together to identify and correct the causes of the recent SAE’s resulting from pericardial effusions. Plans have been developed to address the issues internally and with the FDA, and we look forward to resumption of treatment of the remaining patients in the GENASIS trial.”
“We raised $23 million in 2005, including $8 million from a second equity investment by Boston Scientific Corporation which increased its voting equity interest in Corautus to approximately 17%. We tremendously value the financial and operational resources provided by Boston Scientific as a strong show of support in the commercial promise of our VEGF-2 technology,” Mr. Otto concluded.
Additional highlights of 2005 and recent weeks include: - Early in 2005, investigators from our Phase I trial published two-year follow up data on patients in that trial in the Journal of Interventional Cardiology. The findings are believed to demonstrate apparent durability of therapeutic effect exhibited by the VEGF-2 biologic in our early clinical studies. - In May 2005, Corautus entered into a manufacturing agreement with Boehringer Ingelheim Austria GmbH (“BI”) regarding BI’s provision of certain development, optimization, and manufacturing services for our VEGF-2 material. The contract with BI is a long-term agreement for manufacturing VEGF-2 for commercial use, our planned Phase III clinical trial and any potential clinical trials related to peripheral artery disease. - During the third quarter of 2005, Corautus announced an agreement with Caritas St. Elizabeth’s Hospital in Boston (CSEMC) that could lead to an expansion of its product candidate portfolio by providing VEGF-2 in a 64-patient, Phase I trial for the treatment of patients suffering from diabetic neuropathy. The trial is funded by a grant from the National Institutes of Health (“NIH”). Corautus has the right to utilize and reference the clinical data from this trial as part of its own diabetic neuropathy trial if Corautus decides to pursue a clinical trial for this indication. - In November 2005, the FDA granted Fast Track designation to VEGF-2 for the treatment of severe angina associated with cardiovascular disease. - In January 2006, Corautus expanded its agreement with CSEMC to provide VEGF-2 in a 64-patient, Phase I trial for treatment of patients suffering with critical limb ischemia, which is also being funded by an NIH grant. As with the diabetic neuropathy study, Corautus has the right to utilize and reference the clinical data from this trial as part of any critical limb ischemia trial that it may sponsor. - Also in January 2006, Corautus announced that its independent data safety monitoring committee (DMC) recommended, as the result of its third scheduled interim safety analysis on 240 patients, the continuation of the GENASIS trial. Financial Results
Corautus had cash, cash equivalents and short-term investments of $30,962,000 as of December 31, 2005. Corautus expects that its existing capital resources will be sufficient to fund its current and planned operations through the first quarter of 2007.
Revenues for each of the fourth quarter of 2005 and 2004 were $21,000 and for 2005 and 2004 each were $83,000, reflecting the amortization of a payment received from the sublicense of certain patents to Boston Scientific Corporation concurrent with their July 2003 investment in Corautus.
Research and development expenses for the fourth quarter of 2005 and 2004 were $4,465,000 and $2,797,000, respectively, and for 2005 and 2004 were $15,949,000 and $6,593,000, respectively. This increase was primarily related to progress of the GENASIS Phase IIb clinical trial whereby a much larger number of patients were enrolled in 2005 over 2004 and to increased costs pursuant to an agreement for the production of our clinical trial material for a planned Phase III clinical trial and commercial use.
General and administrative expenses for the fourth quarter of 2005 and 2004 were $1,017,000 and $868,000, respectively, and for 2005 and 2004 were $3,897,000 and $3,681,000, respectively. The increase in general and administrative expense primarily was due to annual salary adjustments which took effect in the fourth quarter of 2005 and to the addition of a vice president of business development in May 2005.
Interest income for the fourth quarter of 2005 and 2004 was $263,000 and $110,000, respectively, and for 2005 and 2004 was $815,000 and $251,000, respectively. The increase in interest income was due to higher average balances and yields in cash, cash equivalents and short-term investments in 2005 over 2004.
Interest expense for the fourth quarter of 2005 and 2004 was $248,000 and $174,000, respectively, and for 2005 and 2004 was $832,000 and $452,000, respectively. The increase in 2005 primarily was related to the interest expense on the convertible notes payable to Boston Scientific Corporation, including the additional $5,000,000 note executed on June 30, 2005. No payments of interest on any of the notes are due until the principal payments begin, which is five years from the date of issuance of each note.
For the fourth quarter of 2005, Corautus incurred a net loss of $5,418,000, or $0.28 per share, compared with a net loss of $3,708,000, or $0.25 per share, in the comparable period of 2004. The net loss for the year ended December 31, 2005 was $19,737,000, or $1.16 per share, compared with a net loss of $10,382,000, or $0.79 per share, for the year ended December 31, 2004.
About Corautus Genetics
Corautus Genetics Inc. is a biopharmaceutical company dedicated to the development and commercialization of innovative gene therapy products for the treatment of cardiovascular (severe angina) and peripheral vascular disease. Corautus is focusing its efforts and resources on the development of gene therapy products using a growth factor known as Vascular Endothelial Growth Factor-2, or VEGF-2, gene to promote therapeutic angiogenesis in ischemic muscle. Corautus has a strategic alliance with Boston Scientific Corporation to develop, commercialize and distribute the VEGF-2 gene therapy products. For more information, please visit www.corautus.com.
Forward-Looking Statements
This press release may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain factors, risks and uncertainties that may cause actual results, events and performances to differ materially from those referred to in such statements. These risks include statements which address operating performance, events or developments that we expect or anticipate will occur in the future, such as projections about our clinical trial, including its cost, the period of time it may be suspended, or future efficacy or safety data, projections about our future results of operations or our financial condition, benefits of achieving Fast Track designation, benefits from the alliance with Boston Scientific, benefits from manufacturing agreements, research, development and commercialization of our product candidates, the potential of additional product candidates or indications, sufficient and timely enrollment of suitable patients in our clinical trial when resumed, whether early-stage clinical trial results are any indication of results in subsequent clinical trials, anticipated trends in our business, manufacture of sufficient and acceptable quantities of our proposed products, approval of our product candidates, meeting additional capital requirements, and other risks that could cause actual results to differ materially. These risks are discussed in Corautus Genetics Inc.'s Securities and Exchange Commission filings, including, but not limited to, the risk factors in Corautus’ Annual Report on Form 10-K for 2005 filed on March 20, 2006, which are incorporated by reference into this press release. All forward-looking statements included in this press release are based on information available to Corautus on the date hereof, and Corautus assumes no obligation to update such forward-looking statements.
CONTACTS: Michael K. Steele Corautus Genetics Inc. 404-526-6212 msteele@corautus.com Kim Golodetz Lippert/Heilshorn & Associates 212-838-3777 kgolodetz@lhai.com Bruce Voss Lippert/Heilshorn & Associates 310-691-7100 bvoss@lhai.com Corautus Genetics Inc. Condensed Consolidated Balance Sheets In thousands December 31, December 31, 2005 2004 ASSETS Current assets: Cash and cash equivalents $ 1,637 $ 372 Short-term investments 29,325 24,115 Prepaid and other current assets 443 715 Total current assets 31,405 25,202 Property and equipment, net 84 93 Other assets 22 720 Total Assets $ 31,511 $ 26,015 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 1,027 $ 1,385 Accrued clinical trial costs 3,004 371 Deferred revenue, current portion 83 83 Lease settlement obligation, current portion - 737 Total current liabilities 4,114 2,576 Notes and interest payable 16,118 10,329 Lease settlement obligation, net of current portion - 1,079 Other 2 - Deferred revenue, net of current portion 715 799 Total liabilities 20,949 14,783 Total stockholders’ equity 10,562 11,232 Total Liabilities and Stockholders’ Equity $ 31,511 $ 26,015 Corautus Genetics Inc. Condensed Consolidated Statements of Operations In Thousands, Except Per Share Data Three Months Ended Year Ended December 31, December 31, 2005 2004 2005 2004 Revenues $21 $21 $83 $83 Operating Expenses: Research and development 4,465 2,797 15,949 6,593 General and administrative 1,017 868 3,897 3,681 Total operating expenses 5,482 3,665 19,846 10,274 Loss from operations (5,461) (3,644) (19,763) (10,191) Interest income 263 110 815 251 Interest expense (248) (174) (832) (452) Other, net 28 - 43 10 Net Loss $(5,418) $(3,708) $(19,737) $(10,382) Basic and diluted loss per share $ (0.28) $ (0.25) $(1.16) $(.79) Number of weighted-average shares used in the computation of basic and diluted loss per share 19,618 14,588 16,954 13,140
Corautus Genetics Inc.
CONTACT: Michael K. Steele of Corautus Genetics Inc., +1-404-526-6212, ormsteele@corautus.com; or Kim Golodetz, +1-212-838-3777, orkgolodetz@lhai.com, or Bruce Voss, +1-310-691-7100, or bvoss@lhai.com, bothof Lippert-Heilshorn & Associates
Web site: http://www.corautus.com//
