Adherex Provides Corporate Update and Fiscal Year Ended December 31, 2012 Financial Results

Marketwired

RESEARCH TRIANGLE PARK, NORTH CAROLINA--(Marketwire - Apr 1, 2013) - Adherex Technologies Inc. (AHX.TO)(ADHXF), provided an update on recent progress with its clinical programs and reported financial results for the fiscal year ended December 31, 2012. All amounts are in U.S. dollars unless otherwise specified.

"During 2012, we made strong progress in advancing the development of our late stage oncology compounds, eniluracil(EU) and sodium thiosulfate(STS)," said Rosty Raykov, CEO of Adherex. "Preliminary interim results presented in December 2012 from our Phase II trial evaluating eniluracil (EU)+5-Fluouracil (5-FU) + leucovorin (LV) as treatment for metastatic breast cancer (MBC) showed positive clinical activity. The Children Oncology Group Phase III trial evaluating STS as an otoprotectant after cisplatin exposure, completed enrollment of 135 children. We look forward to keeping you updated once the final results of these important studies become available in the coming months."

Upcoming milestones

  • Adherex intends to present final efficacy and safety results of the Phase II EU trial during the second or third quarter of 2013.

  • Adherex also plans to meet with regulatory agencies in mid-2013 to discuss a proposed Phase III study to support a New Drug Application for eniluracil.

  • Data from the Phase III COG ACCL0431 clinical trial with STS are expected to be announced during the second or third quarter of 2013.

  • Pending favorable results from COG ACCL0431, Adherex plans to meet with regulatory agencies to discuss a New Drug Application for STS.

Key accomplishments in 2012

  • Completed enrollment of the Company's Phase II clinical trial for metastatic breast cancer comparing the oral regimen of EU/5-FU/LV (Treatment Arm 1) versus capecitabine (Xeloda(R)) (Treatment Arm 2) in December 2012. Patients who have disease progression in Arm 2 may crossover to take EU/5-FU/LV (Treatment Arm X). The Company expanded the initial enrollment target from 140 patients to 153 patients, exceeding initial recruitment expectations, and enrolled 24 patients in Arm X. Final efficacy and safety data is expected to be available during the second or third quarter of 2013.

  • At the 2012 CTRC-AACR San Antonio Breast Cancer Symposium (SABCS), Adherex reported preliminary interim results from the Phase II trial in metastatic breast cancer patients. In particular, 9 patients who had rapid disease progression (within 70 days or 1 tumor scan) on Xeloda(R) treatment and crossed over to take EU/5-FU/LV experienced the following:
    • 89% had clinical benefit
    • 33% had tumor responses
    • Ongoing median PFS of 117 days vs. 42 days while take Xeloda(R)
  • EU/5-FU/LV may enable these patients to continue with oral 5-FU and delay or avoid progressing to the more aggressive intravenous microtubule inhibitors. The toxicity of the oral EU/5-FU/LV regimen is expected to be considerably less than that of the two available intravenously administered alternatives, ixabepilone and eribulin.
  • The Phase III trial of Sodium Thiosulfate (STS) conducted by the Children Oncology Group (COG ACCL0431) completed enrollment of 135 pediatric patients, most of whom have diagnoses of one of five childhood cancers typically treated with intensive cisplatin therapy, including hepatoblastoma, germ cell tumor, osteosarcoma, neuroblastoma, and medulloblastoma. Results are expected during the second or third quarter of 2013. STS has received orphan drug designation in the US for the prevention of ototoxicity induced by platinum cancer chemotherapy in pediatric patients.

  • Strengthened EU's intellectual property position with the Notice of Allowance from the U.S. Patent and Trademark Office (USPTO) under the Title of Invention: Methods for Administering DPD Inhibitors in Combination with 5-FU and 5-FU Prodrugs. This patent is based on Dr. Spector's discovery that high eniluracil: 5-FU ratios could interfere with the 5-FU antitumor activity and may have been an issue with earlier clinical trials.

Financial Results

The Company reported a net loss from operations of $3.6 million excluding the $1.6 million non-cash loss on derivative warrants for the fiscal year ended December 31, 2012, compared to a net loss from operations of $3.4 million excluding the non-cash gain of $8.1 million in the same period in 2011. The increase in the net loss from operations excluding the non-cash impact of derivative warrants is primarily due to an increase in research and development expenses of $0.6 million that was offset by decreased general and administrative expenses of $0.4 million in the comparable periods

Operating expenses, which exclude stock based compensation, were $3.3 million for the fiscal year ended December 31, 2012 compared to $3.2 million in 2011. The increase in operating expenses is primarily due to the higher clinical trial expenditures related to the eniluracil Phase II study offset by lower general and administration expenses. Research and development expenses were $2.1 million, as compared to $1.5 million in the same period in 2011 as there was a higher patient participation in the Phase II study during 2012.

Cash and cash equivalents totaled $2.3 million at December 31, 2012, compared to $5.3 million at December 31, 2011. The decreased cash balance is due to clinical trial and corporate expenses in the period. At December 31, 2012, the Company had working capital totaling approximately $1.7 million compared to $5.0 million as of December 31, 2011.

About Eniluracil

Eniluracil is a mechanism-based inactivator of DPD, the enzyme that rapidly breaks down 5-FU. Accordingly, Eniluracil increases the 5-FU elimination half-life from about 15 minutes to 5 hours and enables 5-FU to be administered orally, making it 100% orally bioavailable. In addition, Eniluracil prevents the formation of α-fluoro-β-alanine (F-Bal), the 5-FU-breakdown product. F-Bal appears to cause hand-foot syndrome and neurotoxicity. It also decreases the antitumor activity of 5-FU in laboratory animals. Furthermore, because DPD is present in variable levels, the highly variable and nonlinear pharmacokinetics of 5-FU become predictable and linear when DPD is inactivated by Eniluracil in cancer patients.

The weekly regimen used in the current Phase 2 trial is based on a Phase 1 Eniluracil/5-FU/Leucovorin trial that produced durable tumor responses and no hand-foot syndrome in advanced colorectal cancer patients who were refractory to intravenous 5-FU/Leucovorin. In a similar Phase 2 study with capecitabine, no tumor responses occurred and 87% of the patients experienced hand-foot syndrome, a painful condition that may require dosing interruptions and dose reductions.

About Metastatic Breast Cancer

Breast cancer is the second leading cause of cancer related death among women, according to the National Cancer Institute. During 2012, American Cancer Society estimates that 226,870 women were diagnosed with breast cancer, while an estimated 39,510 women died from the disease. FDA-approved therapies used to treat late-stage, refractory breast cancer include capecitabine (Xeloda®) for patients with breast cancer resistant to paclitaxel and anthracycline-containing chemotherapy; ixabepilone (Ixempra®) for patients with late-stage disease after failure of an anthracycline, taxane and capecitabine; ixabepilone plus capecitabine for patients with late-stage disease after failure of anthracycline- and taxane-based chemotherapy; eribulin mesylate (Halaven®) for patients with metastatic breast cancer who have received at least two prior chemotherapy regimens for late-stage disease.

Xeloda® is a registered trademark of Genentech, a member of the Roche Group.

Ixempra® is a registered trademark of Bristol Myers Squibb

Halaven® is a registered trademark of Eisai Pharmaceuticals

About Sodium Thiosulfate (STS)

STS is currently marketed for use in humans as part of a treatment for cyanide poisoning. Adherex has licensed from Oregon Health & Science University intellectual property rights for the use of STS as a chemo protectant, and is developing STS as a protectant against the hearing loss often caused by platinum-based anti-cancer agents in children. Preclinical and clinical studies conducted by Oregon Health & Science University and others have indicated that STS can effectively reduce the incidence of hearing loss caused by platinum-based anti-cancer agents. Adherex has received Orphan Drug Designation in the United States for the use of STS in the prevention of platinum-induced ototoxicity in pediatric patients.

Hearing loss among children receiving platinum-based chemotherapy is frequent, permanent and often severely disabling. The incidence of hearing loss in these children depends upon the dose and duration of chemotherapy, and many of these children require lifelong hearing aids. There is currently no established preventive agent for this hearing loss and only expensive, technically difficult and sub-optimal cochlear (inner ear) implants have been shown to provide some benefit. In addition, adults undergoing chemotherapy for several common malignancies, including ovarian cancer, testicular cancer, and particularly head and neck cancer and brain cancer, often receive intensive platinum-based therapy and may experience severe, irreversible hearing loss, particularly in the high frequencies.

The selected financial data presented below is derived from our audited consolidated financial statements, which were prepared in accordance with U.S. generally accepted accounting principles. The complete consolidated financial statements for the year ended December 31, 2012 and management's discussion and analysis of financial condition and results of operations will be available via www.sec.gov and www.sedar.com.

FINANCIAL CHARTS FOLLOW
Adherex Technologies Inc.
Selected Financial Data
(U.S. dollars in thousands except per share amounts)

Consolidated Balance Sheets:
December 31,
2012
December 31,
2011
Assets:
Cash and cash equivalents $ 2,303 $ 5,297
Other current assets 62 54
Total assets $ 2,365 $ 5,351
Liabilities and stockholders' equity:
Current liabilities $ 682 $ 394
Derivative warrant liability 6,640 5,077
Other long-term liabilities - -
Total stockholders' equity (4,957 ) (120 )
Total liabilities and stockholders' equity $ 2,365 $ 5,351
Consolidated Statements of Operations: December 31,
2012
December 31,
2011
Revenue $ - $ -
Operating expenses:
Research and development 2,075 1,494
Impairment of Capital Assets --- ---
(Gain) on Deferred Lease Inducements --- ---
General and administrative 1,545 1,944
(Loss) from operations (3,620 ) (3,438 )
Other income (expense) (5 ) 9
Gain/(Loss) on derivative warrants (1,563 ) 8,071
Interest income 25 43
Net income/(loss) and comprehensive (loss) $ (5,163 ) $ 4,685
Basic net earnings/(loss) per common share $ (0.21 ) $ 0.20

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 clinical 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 needs, and its ability to obtain additional funding, as well as uncertainties relative to varying product formulations and a multitude of diverse regulatory and marketing 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, 2012. 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.

Contact:
Adherex Technologies Inc.
Rosty Raykov
Chief Executive Officer
(919) 636-5144

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