EANS-News: AGENNIX AG Reports Financial Results for Third Quarter and First Nine
Months of 2012
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Corporate news transmitted by euro adhoc. The issuer/originator is solely
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9-month report
Planegg/Munich (Germany) and Princeton, NJ (USA) (euro adhoc) - Agennix AG
(Frankfurt Stock Exchange: AGX) today announced financial results for the third
quarter and nine months ended September 30, 2012.
Torsten Hombeck, Ph.D., Chief Financial Officer and Spokesperson of the
Management Board, said: "We are in discussions with existing investors and
potential partners regarding strategic options for Agennix, including possible
business combinations with other companies and/or acquiring assets with
near-term revenue potential. While this has been a very challenging time for
Agennix, we are working diligently to find a viable strategic path forward that
will be in the best interests of the Company and our shareholders. We will
further update the market as soon as we are in a position to do so."
First nine months of 2012 compared to first nine months of 2011
The Company did not recognize any revenue during the nine months ended September
30, 2012 and 2011.
Research and development ("R&D") expenses for the nine months ended September
30, 2012 were EUR 27.5 million compared to EUR 24.6 million for the same period
in 2011. The increase in R&D expenses is primarily due to increased costs
associated with the talactoferrin FORTIS-M Phase III trial in non-small cell
lung cancer (NSCLC) and the OASIS Phase II/III trial in severe sepsis, the
majority of which were incurred in the first half of 2012, and costs associated
with the overall evaluation of the talactoferrin program to determine a
potential future development path in the third quarter of 2012.
Administrative expenses for the nine months ended September 30, 2012 were EUR
7.7 million compared to EUR 6.6 million for the same period in 2011.
Administrative expenses were higher as the Company had engaged in certain
critical pre-commercialization activities related to talactoferrin ahead of the
FORTIS-M trial results. Any ongoing activities were terminated once the FORTIS-M
trial results were known.
In August 2012, the Company announced a restructuring plan that involved staff
reductions of approximately 55 percent (or 37 employees) of the Company's
workforce. The staff reductions occurred at all three of the Company's sites of
operation, and the Houston, Texas location was closed. The Company recorded
restructuring charges of approximately EUR 3.0 million in the third quarter of
2012, related to employee terminations, lease losses and other contract
termination costs. In addition, Agennix recorded approximately EUR 3.3 million
and EUR 75.8 million of impairment charges for property and equipment and for
intangible assets, respectively, in the third quarter of 2012. The property and
equipment charge was mainly related to equipment held by the Company's
subsidiary, Agennix Inc., and the intangible assets charge was mainly related to
talactoferrin. The Company did not incur such charges in the first nine months
of 2011.
Net loss before tax for the nine months ended September 30, 2012 was EUR 117.1
million compared to EUR 32.4 million for the same period in 2011, mainly as a
result of the restructuring and impairment charges discussed above. Income tax
benefit for the nine months ended September 30, 2012, was EUR 7.0 million
compared to EUR 7.2 million for the same period in 2011. Income tax benefit
recorded in 2011 related to the recognition of a deferred tax asset on net
operating losses incurred by the Company's subsidiary, Agennix Inc. No
additional deferred tax asset on net operating losses was recognized during the
first nine months of 2012. However, in the third quarter of 2012, in
conjunction with the impairment of the intangible asset related to
talactoferrin, the recognized deferred tax liability together with the deferred
tax asset were adjusted, resulting in a EUR 7.0 million net tax benefit for the
period. Net loss for the nine months ended September 30, 2012, was EUR 110.0
million compared to EUR 25.2 million for the same period in 2011. Basic and
diluted loss per share was EUR 2.15 for the nine months ended September 30,
2012, compared to EUR 0.60 for the same period in 2011.
Third quarter of 2012 compared to third quarter of 2011
The Company did not recognize any revenue during the three months ended
September 30, 2012 and 2011.
R&D expenses for the third quarter of 2012 were EUR 9.9 million compared to EUR
8.1 million for the same period in 2011. The increase in R&D expenses was
primarily due to increased costs associated with the FORTIS-M Phase III trial
before its termination and costs associated with the overall evaluation of the
talactoferrin program to determine a potential future development path.
Administrative expenses for the third quarter of 2012 decreased to EUR 2.0
million compared to EUR 2.1 million for the same quarter in 2011. Administrative
expenses were lower as any ongoing activities relating to talactoferrin
pre-commercialization were terminated once the FORTIS-M trial results were
known.
In the third quarter of 2012, the Company recorded a restructuring charge of
approximately EUR 3.0 million related to employee terminations, lease losses and
other contract termination costs. Approximately EUR 3.3 million and EUR 75.8
million of impairment charges for property and equipment and for intangible
assets, respectively, were also recorded.
Net loss before tax for the third quarter of 2012 was EUR 93.8 million compared
to EUR 9.7 million for the third quarter of 2011. Basic and diluted loss per
share was EUR 1.69 and EUR 0.20 for the third quarter of 2012 and 2011,
respectively.
Quarter over quarter results: third quarter of 2012 compared to second quarter
of 2012
The Company did not recognize any revenue during the third or second quarter of
2012. R&D expenses for the third quarter of 2012 were EUR 9.9 million compared
to EUR 8.2 million for the second quarter of 2012. Administrative expenses for
the third quarter of 2012 were EUR 2.0 million compared to EUR 2.8 million for
the second quarter of 2012. Net loss before tax for the third quarter of 2012
was EUR 93.8 million compared to EUR 10.5 million for the second quarter of
2012. Basic and diluted loss per share was EUR (1.69) for the third quarter of
2012 compared to EUR (0.21) for the second quarter of 2012.
Cash position
As of September 30, 2012, cash, cash equivalents, other current financial assets
and restricted cash totaled EUR 11.2 million (December 31, 2011: EUR 44.0
million). Net cash burn for the nine months ended September 30, 2012, was EUR
33.0 million, with net cash burn of EUR 10.8 million in the first quarter, EUR
10.7 million for the second quarter and EUR 11.5 million for the third quarter.
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.
Going concern
Based on the Company's current financial position and updated estimates of
future cash burn, management believes that Agennix will have sufficient cash to
fund its operations into the first quarter of 2013. Due to major setbacks with
talactoferrin during 2012, the Company's ability to raise additional cash on a
stand-alone basis through equity financing, debt issues or drug development
partnering agreements is very limited. As a result, the Company's ability to
continue as a going concern is at immediate risk and its liquidation or
insolvency may be imminent if additional funding is not obtained early in the
first quarter of 2013.
Management is currently in discussions with existing investors and potential
partners regarding strategic options for Agennix, including possible business
combinations with other companies and/or acquiring assets with near-term revenue
potential. Management believes that it is possible that a transaction will move
forward and expects to undertake a bridge financing to extend its cash reach
beyond the first quarter of 2013 to complete any potential strategic
transaction.
There can be no guarantee that a strategic transaction will be successfully
completed or that the Company will be able to obtain additional funding.
Outlook
The Company has performed extensive analyses of the data from the FORTIS-M and
FORTIS-C trials, as well as earlier studies, to determine if there is a
potential explanation for the negative outcomes of those trials as compared to
earlier successful clinical studies with talactoferrin. If the hypotheses
generated from these analyses can be confirmed by additional research, a new
development path forward for talactoferrin may be considered.
In the Company's current situation, no revenues are expected to be generated
during the remainder of 2012 or in 2013. The Company has taken significant steps
to reduce expenses, including staff reductions, site closures and ceasing
various activities, such as commercial manufacturing preparations and
pre-commercialization activities related to talactoferrin. In addition to the
restructuring during the third quarter of 2012, Agennix made the decision in the
fourth quarter of 2012 to close its Planegg/Munich, Germany site, which will
involve an additional staff reduction of six employees. The closure is expected
to occur in the first half of 2013. The one-time cost of the restructurings and
expenses related to terminating various activities and operations will in the
near term offset anticipated longer-term savings from these cuts. In the
Company's current situation, expenses in 2013 would be expected to be
significantly lower than in 2012.
As discussed above, management is currently in discussions regarding strategic
options for Agennix and believes that it is possible that a transaction will
move forward.
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 on the Web
site following the live event. The call, which will be conducted in English,
will be held today, November 30th at 15:00 CET/9 AM EST. The dial-in numbers for
the call are as follows:
Participants from Europe:
0049 (0)69 710 445 598
0044 (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 clinical development programs include oral talactoferrin
alfa; a topical gel form of talactoferrin and RGB-286638, a multi-targeted
kinase inhibitor. Agennix's registered seat is in Heidelberg, Germany. The
Company has two sites of operation: Planegg/Munich, Germany and Princeton, New
Jersey. 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 cash reach, financing and potential strategic transactions.
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 clinical studies will be successful.
There can be no guarantee that the Company will have or be able to obtain the
financial resources to conduct additional studies with its product candidates or
that it will be successful in pursuing a strategic transaction. 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 third quarter and three months ended September
30, 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
Further inquiry note:
Agennix AG
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
end of announcement euro adhoc
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company: AGENNIX AG
Im Neuenheimer Feld 515
D-69120 Heidelberg
phone: +49 89 8565 2693
FAX: +49 89 8565 2610
mail: ir@agennix.com
WWW: http://www.agennix.com
sector: Pharmaceuticals
ISIN: DE000A1A6XX4
indexes: CDAX, Prime All Share, Technology All Share
stockmarkets: free trade: Hannover, Berlin, München, Hamburg, Düsseldorf,
regulated dealing/prime standard: Frankfurt
language: English