August 11, 2014
Research Triangle Park, NC, August 11, 2014 – – Adherex Technologies Inc. (TSX: AXH, OTCQB: ADHXF), today reported its financial results and recent developments for the second quarter ended June 30, 2014. All amounts are in US dollars unless otherwise specified.
As reported during the second quarter, the results from two Phase 3 clinical trials studying Sodium Thiosulfate (STS) for prevention of hearing loss in children receiving cisplatin chemotherapy were presented at the 2014 American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago. The US based Children Oncology Group (COG) ACCL0431: “A Randomized Phase III Study of Sodium Thiosulfate for the Prevention of Cisplatin-Induced Ototoxicity in Children” met its primary hearing end point. STS protects against cisplatin-induced hearing loss in children. In this study, use of STS did not result in lower EFS/OS in patients with localized disease. However, there was lower survival among those with disseminated disease.
The European based SIOPEL 6 study, “A Multicenter Open Label Randomized Phase III Trial of the Efficacy of Sodium Thiosulfate in Reducing Ototoxicity in Patients Receiving Cisplatin Chemotherapy for Standard Risk Hepatoblastoma,” is evaluating STS in localized disease, where cisplatin effectiveness is known to be very high and it is used as monotherapy. The poster presented at ASCO showed the safety results of the trial after 20, 40, 60, and 80 patients to assess and rule out any potential concern of an adverse effect of STS on the efficacy of the cisplatin chemotherapy. The Independent Data Monitoring Committee (IDMC) recommended the continuation of the trial according to protocol. As of this date, 107 out of 112 children have been randomized. The last IDMC review will be conducted on 100 patients and is expected in the first quarter of 2015. Based on the outcome of these results, the Company plans to initiate discussions with FDA and agree on the timelines for New Drug Application (NDA) submission for the use of STS in localized disease.
Financial Update
The Company reported a net loss from operations of $0.9 million which excludes a $0.2 million non-cash gain on derivatives for the second quarter ended June 30, 2014, compared to a net loss from operations of $0.9 million excluding the non-cash gain on derivatives of $7.5 million in the same period 2013. There was a significant decrease in research and development expenses for the three months ended June 30, 2014 as compared to the same period in 2013 due to the winding down of the Phase II Eniluracil trial in 2013. Research and development costs are impacted by the clinical support costs associated with the amount of patients enrolled and participating in the trial during the financial period. The reduction in research and development costs were mostly offset by an increase in non-cash general and administrative expense related to the issuance of options.
For the six month period ended June 30, 2014, the Company reported a net loss from operations of $1.5 million excluding the $2.5 million non-cash loss on derivatives, compared to a net loss from operations of $1.5 million excluding the non-cash gain of $4.0 million in the same period in 2013. Overall decreases in research and development costs of $0.6 million were offset by the increase in general and administrative costs of $0.6 million. Again, the six month comparative results are being driven primarily by the associated reduction in expenses of winding down of the Phase II Eniluracil trial in 2013 and the increase in non-cash general and administrative expense related to the issuance of options.
Interim Unaudited Consolidated Statement of Operations:
| (U.S. Dollars in thousands except per share amounts) | |||||||
|
Three Months Ended |
Six Months Ended |
||||||
|
June 30, |
June 30, |
June 30, |
June 30, |
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|
2014 |
2013 |
2014 |
2013 |
||||
| Revenue | $ – | $ – | $ – | $ – | |||
| Operating expenses: | |||||||
| Research and development | 72 | 554 | 104 | 732 | |||
| General and administrative | 858 | 373 | 1,363 | 732 | |||
| Loss from operations | (930) | (927) | (1,467) | (1,464) | |||
| Other (expense) income : | |||||||
| Unrealized gain/(loss) on derivatives | 181 | 7,535 | (2,474) | 3,962 | |||
| Interest (expense) income and other, net | (1) | (1) | (3) | 1 | |||
| Total other (expense) income, net | 180 | 7,534 | (2,477) | 3,963 | |||
| Net income/(loss) | $ (750) | $ 6,607 | $ (3,944) | $ 2,499 | |||
| Basic and diluted net income/(loss) | |||||||
| per common share | $ (0.03) | $ 0.26 | $ (0.13) | $ 0.10 | |||
Cash and cash equivalents totaled $1.0 million at June 30, 2014, compared to $1.7 million at December 31, 2013. The decrease in cash balance of approximately $0.7 million is attributable to the Company’s operating expenses offset by cash received of $0.1 million from the exercise of options and warrants. At June 30, 2014, the Company had working capital totaling approximately $0.7 million.
| Interim Unaudited Consolidated Balance Sheets: | ||||||||
| (U.S. Dollars in thousands except per share amounts) |
June 30, |
December 31, |
||||||
|
2014 |
2013 |
|||||||
| Assets: | ||||||||
| Cash and cash equivalents |
1,015 |
1,663 |
||||||
| Other current assets |
34 |
89 |
||||||
| Total assets |
1,049 |
1,752 |
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| Liabilities and stockholders’ equity: | ||||||||
| Current liabilities |
371 |
344 |
||||||
| Derivative liabilities |
5,336 |
2,863 |
||||||
| Other long-term liabilities |
– |
– |
||||||
| Total stockholders’ equity |
(4,658) |
(1,455) |
||||||
| Total liabilities and stockholders’ equity (deficiency) |
1,049 |
1,752 |
||||||
The selected financial data presented below is derived from our unaudited June 30, 2014 consolidated financial statements which were prepared in accordance with U.S. generally accepted accounting principles. The complete interim consolidated financial statements for the period ended June 30, 2014 and management’s discussion and analysis of financial condition and results of operations will be available at www.sec.gov and www.sedar.com
Except for historical information described in this press release, all other statements are forward-looking. Forward-looking statements are subject to certain risks and uncertainties inherent in the Company’s business that could cause actual results to vary, including such risks that regulatory and guideline developments may change, scientific data may not be sufficient to meet regulatory standards or receipt of required regulatory clearances or approvals, clinical results may not be replicated in actual patient settings, protection offered by the Company’s patents and patent applications may be challenged, invalidated or circumvented by its competitors, the available market for the Company’s products will not be as large as expected, the Company’s products will not be able to penetrate one or more targeted markets, revenues will not be sufficient to fund further development and clinical studies, the Company may not meet its future capital requirements in different countries and municipalities, and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission including its Annual Report on Form 10-K for the year ended December 31, 2013. Adherex Technologies, Inc. disclaims any obligation to update these forward-looking statements except as required by law.
For a more detailed discussion of related risk factors, please refer to our public filings available at www.sec.gov and www.sedar.com.
For further information, please contact:
Rosty Raykov
Chief Executive Officer
Adherex Technologies Inc.
T: (919) 636-5144