Excerpt: �The results of CONFIRM-1 were disappointing,� Dr. Ellis said, concluding however, that �perhaps there are lessons to be learned.� The principal issue lies in understanding the pharmacokinetic differences between antibody-based and tyrosine kinase inhibitor-based therapies. Bevacizumab is an antibody with a half-life of 20 days; PTK/ZK is a tyrosine kinase inhibitor with a half-life of four to six hours. With once-daily dosing, this implies that therapy with PTK/ZK achieves inhibition of the drug target for only a portion of the dosing interval. Dr. Ellis hypothesized that for therapy to be effective, it has to inhibit the target over the entire dosing interval. Thus, dosing intervals and/or the drug half-life for tyrosine kinase inhibitors will be very important. Dr. Ellis noted that several tyrosine kinase inhibitors in phase II trials are showing a great deal of promise, either because they have longer half-lives or because they are being administered on a twice-daily dosing schedule.
At March 31, 2005, we had cash and short term investments of approximately $43,590,000 with working capital of approximately $39,592,000. These balances reflect Celgene Corporation's March 2005 purchase of 7,000,000 shares of common stock through the exercise of warrants acquired in December 2002. As a result of the warrant exercise, we received gross proceeds of $10,500,000 and paid Ferghana Partners, Inc. a fee of $525,000, pursuant to a prior agreement in connection with the sale of warrants to Celgene in December 2002.
We invest our capital resources with the primary objective of capital preservation. As a result of trends in interest rates in 2005, we have invested in some securities with maturity dates of more than 90 days to enhance our investment yields. As such, some of our invested balances are classified as short-term investments rather than cash equivalents in our consolidated financial statements at March 31, 2005.
To accomplish our business plans, we will be required to continue to conduct substantial development activities for all of our proposed products. Under our current operating plans, results of operations are expected to reflect a net loss of approximately $20,000,000 in 2005. We expect that the majority of our 2005 revenues will be from royalties on the sale of Thalomid�. As a result of the satisfaction of certain provisions of a purchase agreement dated June 14, 2001 by and between Bioventure Investments kft ("Bioventure") and the Company, beginning in 2005 we are entitled to share in the royalty payments received by Royalty Pharma Finance Trust, successor to Bioventure, on annual Thalomid� sales above a certain threshold. Based on the licensing agreement royalty formula, annual royalty sharing commences with Thalomid� annual sales of approximately $235 million. Pursuant to public guidance provided by Celgene for Thalomid� sales in 2005, we expect to record royalty sharing revenues in excess of $4.0 million in 2005. Under our licensing agreement with Oxford Biomedica, PLC and Oxford Biomedica (UK) Limited Oxford, we are entitled to receive payments upon the achievement of certain milestones. We do not control the drug development efforts of Oxford and have no control over when or whether such milestones will be reached. We do not believe that we will receive any such milestone payments under these agreements in 2005