Oxygen Biotherapeutics Provides a Business Review and Update in Conjunction with Filing of Second Quarter Fiscal Year 2014 Financials

Business Wire

MORRISVILLE, N.C.--(BUSINESS WIRE)--

Oxygen Biotherapeutics, Inc.,(“OBI”) (OXBT) a specialty pharmaceutical company focused on developing and commercializing a portfolio of products for the critical care market, today announced that it has filed its Quarterly Report on Form 10-Q for its second quarter fiscal year (FY) 2014 ended October 31, 2013. In connection with that filing, the company is providing a review of recent achievements and an update on business operations and future milestones.

As reported on November the 14th, 2013, Oxygen completed its acquisition of certain assets of Phyxius Pharma Inc. (Phyxius Pharma), a privately-held biopharmaceutical company focused on the development and near-term commercialization of levosimendan to prevent and treat cardiac surgery patients at risk for developing low cardiac output syndrome (LCOS), a significant unmet medical need. This acquisition allowed Oxygen Biotherapeutics to acquire the exclusive rights to develop and commercialize levosimendan in North America. John Kelley, CEO and Co-Founder of Phyxius Pharma, joined Oxygen Biotherapeutics as the CEO, along with two other senior executives from Phyxius that also joined the senior management team.

Levosimendan was discovered and developed by Orion Pharma, Orion Corporation of Espoo Finland. Levosimendan is a calcium sensitizer developed for intra-venous use in hospitalized patients with acutely decompensated heart failure. It is currently approved in over 50 countries for this indication and not available in the United States. It is under development in North America for reduction in morbidity and mortality of cardiac surgery patients at risk of low cardiac output syndrome (LCOS). The acquisition brings to Oxygen Biotherapeutics not only the exclusive rights in North America to develop and commercialize levosimendan for the specific indication of prevention and treatment of LCOS, but also the FDA’s approval of Fast Track status for a Phase 3 trial, and the FDA’s SPA which represents agreement with the Phase III clinical trial’s study protocol. The FDA has provided guidance that a single successful trial will be sufficient to support approval of levosimendan in this indication.

On December 11, 2013 Oxygen Biotherapeutics announced that it had selected Duke University’s Duke Clinical Research Institute, (DCRI) to conduct the Phase 3 trial of the levosimendan. DCRI is the world’s largest academic clinical research organization, with substantial experience in conducting cardiac surgery trials. The Phase 3 trial will be conducted in approximately 50 major cardiac surgery centers in North America. The trial will enroll patients undergoing coronary artery bypass graphs (CABG) and/or mitral valve surgery who are at risk for developing LCOS. The trial will be a double blind, randomized, placebo controlled study seeking to enroll 760 patients. It is expected that enrollment will begin in the third quarter of 2014, and will take approximately 18 months to complete. The protocol of the Phase 3 trial has been submitted to ClinicalTrials.gov and should be available for review in the next few days.

It was earlier announced that researchers at the DCRI recently published findings of a meta-analysis of multiple clinical trials that evaluated the use of levosimendan in patients undergoing heart surgery. The study aggregated and analyzed results from 14 independent clinical trials with a total of 1,155 patients. The published results showed that levosimendan was associated with reduced mortality and other adverse outcomes including heart attacks during and after operation in patients with reduced heart function undergoing heart surgery.

John Kelley, CEO of Oxygen Biotherapeutics, stated, "These findings are highly supportive of our approved Phase 3 trial design which includes mortality, need for dialysis and peri-operative myocardial infarction, as components of the primary composite endpoint. With the support of these data and the FDA’s guidance, we have designed a very modest sized and cost efficient trial of 760 patients. This is far smaller than other cardiac trials which typically require larger patient populations.”

In August 2013, OBI converted $4.6 million in outstanding principal amount of a convertible promissory note into 4,600 shares of Series D Convertible Preferred Stock. The note, which was scheduled to mature on July 1, 2014, carried an interest rate of 15% per annum. This transaction reduced OBI’s debt from $4.9 million to $300,000 and increased net shareholder equity by approximately $3.5 million.

At October 31, 2013, OBI had $2.5 million in cash compared to $0.8 million at October 31, 2012. Through the six months ended October 31, 2013, net cash used in operations was $3.58 million, compared to $2.74 million in the comparable period of 2012. This increase is due primarily to additional research and development costs associated with the Oxycyte Phase II-b clinical trials and the legal fees associated with the acquisition of Phyxius Pharma Inc.’s assets.

In November 2013, OBI received approximately $6.2 million through the exercise of 2,377,297 warrants. These warrants were issued by the Company in connection with its July 2013 Series C 8% Convertible Preferred Stock financing. The exercise of these warrants combined with our working capital at October 31, 2013 is sufficient to fund our operations through June 30, 2014.

“Oxygen Biotherapeutics, Inc has made tremendous progress in 2013” said John Kelley, CEO. “The acquisition of the Phyxius Pharma assets was a transformative deal for this company. We now have the opportunity to build a company with a portfolio of assets focused on the critical care market. We look forward to an exciting 2014 with significant accomplishments ahead.

Anticipated 2014 Milestones

  • Enroll first patient in the Phase 3 trial for levosimendan in cardiac surgery patients at risk for developing LCOS in July 2014.
  • Completion of Army-funded preclinical safety studies for Oxycyte in the 2nd quarter of 2014.
  • Completion of the second cohort of patient enrollment in the phase II-b clinical trial for traumatic brain injury (TBI) in the 3rd quarter of 2014.

About Oxygen Biotherapeutics

Oxygen Biotherapeutics, Inc. is developing medical products for the acute care market. The company recently acquired the North American rights to develop and commercialize levosimendan. The United States Food and Drug Administration (FDA) has granted Fast Track status for levosimendan for the reduction of morbidity and mortality in cardiac surgery patients at risk for developing Low Cardiac Output Syndrome (LCOS). In addition, the FDA has agreed to a Phase 3 protocol design under Special Protocol Assessment (SPA), and provided guidance that a single successful trial will be sufficient to support approval of levosimendan in this indication. The company also has developed a proprietary perfluorocarbon (PFC) therapeutic oxygen carrier called Oxycyte® that is currently in clinical and preclinical studies for intravenous delivery for indications such as traumatic brain injury, decompression sickness and stroke.

Caution Regarding Forward-Looking Statements

This news release contains certain forward-looking statements by the company that involve risks and uncertainties and reflect the company’s judgment as of the date of this release. The forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, the finalization of definitive agreements with DCRI, matters beyond the company's control that could lead to delays in the clinical study, delays in new product introductions and customer acceptance of these new products, and other risks and uncertainties as described in the company’s filings with the Securities and Exchange Commission, including in its quarterly report on Form 10-Q filed on September 17, 2013, and annual report on Form 10-K filed on June 26, 2013, as well as its other filings with the SEC. The company disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. Statements in this press release regarding management’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Contact:
IRTH Communications
Robert Haag, 1-866-976-4784
oxbt@irthcommunications.com

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