SOURCE: Agennix AG

Agennix AG

May 06, 2010 01:45 ET

Agennix AG Reports Financial Results for First Quarter of 2010

MARTINSRIED/MUNICH, GERMANY and PRINCETON, NJ and HOUSTON, TX--(Marketwire - May 6, 2010) - Agennix AG (FRANKFURT: AGX) (XETRA: AGX) today announced financial results for the first quarter ended March 31, 2010.

First quarter of 2010 compared to first quarter of 2009

Agennix AG was formed by the business combination of Agennix Incorporated and GPC Biotech AG, which became effective on November 5, 2009, and in which GPC Biotech AG was identified as the acquirer for accounting purposes. Accordingly, the comparative historical financial information is that of GPC Biotech AG for the respective comparative periods.

The Company did not recognize any revenue for the three months ended March 31, 2010 and 2009.

Research and development (R&D) expenses for the three months ended March 31, 2010 increased 355% to EUR 5.0 million compared to EUR 1.1 million for the same period in 2009. The increase in R&D expenses is primarily due to an increase in clinical trial costs related to talactoferrin; additions to staff as a result of the business combination; and a credit to compensation costs, during the first quarter of 2009, of EUR (1.5) million as a result of the forfeiture of convertible bonds and stock options.

In the first three months of 2010, administrative expenses decreased 46% to EUR 2.1 million compared to EUR 3.9 million for the same period in 2009. The decrease in administrative expenses is primarily due to approximately EUR 3.3 million in one-time merger related costs (banking fees, legal services, audit and other related services in connection with the business combination), offset by a credit to compensation cost of EUR (1.7) million as a result of the forfeiture of convertible bonds and stock options, both of which occurred in the same period in 2009.

Net loss for the first three months of 2010 was EUR (4.3) million compared to EUR (4.3) million for the first three months of 2009. Net loss before tax for the first three months of 2010 was EUR (6.0) million compared to EUR (4.3) million for the same period in 2009. The difference in the first quarter of 2010 between net loss and net loss before tax was a non-cash deferred tax benefit of EUR 1.7 million as a consequence of the accounting of the purchase price allocation in connection with the business combination. Basic and diluted loss per share was EUR (0.23) for the first three months of 2010 compared to EUR (0.58) for the same period in 2009. Per share amounts for periods in 2009 have been retrospectively adjusted to reflect the effect of the 5 to 1 merger exchange ratio related to the merger of GPC Biotech AG into Agennix AG.

Cash position

As of March 31, 2010, cash and cash equivalents totaled EUR 13.6 million (December 31, 2009: EUR 11.5 million), including EUR 0.1 million in restricted cash. Net cash burn for the first three months of 2010 was EUR 7.6 million. 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.

Quarter over quarter results: first quarter of 2010 compared to fourth quarter of 2009

Revenues for the first quarter of 2010 were EUR 0 compared to EUR 7.5 million for the previous quarter. In the fourth quarter of 2009, the Company recognized EUR 7.4 million of previously deferred revenue from the agreement with Yakult for the development of satraplatin in Japan. R&D expenses were EUR 5.0 million for the first quarter of 2010 compared to EUR 2.9 million for the fourth quarter of 2009. Administrative expenses for the first quarter of 2010 were EUR 2.1 million compared to EUR 5.2 million for the fourth quarter of 2009. The Company had a net loss of EUR (4.3) million compared to EUR (1.3) million for the previous quarter. Net loss before tax was EUR (6.0) million for the first quarter of 2010 compared to EUR (2.5) million for the fourth quarter of 2009. Basic and diluted loss per share was EUR (0.23) for the first quarter of 2010 compared to EUR (0.09) for the fourth quarter of 2009.

Torsten Hombeck, Ph.D., Chief Financial Officer, said: "The first quarter of 2010 was productive for us: we had additional positive results from the Phase 2 trial with talactoferrin in severe sepsis, expanded the FORTIS-M trial beyond the U.S. into Europe and other parts of the world, and completed a private placement raising EUR 9.8 million."

Dr. Hombeck continued: "Our focus in the months ahead will be to advance the development of talactoferrin in non-small cell lung cancer as well as in severe sepsis. To achieve our goals, we plan to undertake a significant public follow-on offering to ensure that Agennix has sufficient funding to get to the next important milestone with talactoferrin, which we expect to be Phase 3 data in non-small cell lung cancer by the end of 2011."

Financial guidance

The Company does not expect to have any substantial cash-generating revenues for the remainder of 2010. However, this guidance does not consider cash revenue from potential partnering of the Company's product candidates due to the uncertainty of the timing of such events.

Agennix expects R&D expenses to significantly increase compared to 2009 due to an expected steady increase in clinical trial-related costs as the Company's Phase 3 trials in non-small cell lung cancer with talactoferrin progress. In addition, the Company plans to advance the clinical development of talactoferrin in severe sepsis. Administrative expenses are expected to decrease in 2010 compared to 2009, as the one-time costs associated with the merger that were incurred in 2009 will not occur in 2010.

Agennix expects to have sufficient cash to fund operations into the third quarter of 2010. The Company plans to raise additional funds during 2010 to have sufficient capital to get to topline data in the FORTIS-M trial and continue other key development and corporate activities beyond that time period. The Company is also actively seeking a partnership for oral talactoferrin, which would provide a non-dilutive source of funding.

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 via the Web site following the live event. The call, which will be conducted in English, will be held on May 6 at 15:00 CET/9:00 AM EST. The dial-in numbers for the call are as follows:

Participants from Europe:    0049 (0)69 667775756
                             0044 (0)20 3003 2666
Participants from the U.S.:  1-646-843-4608

Please dial in 10 minutes before the beginning of the meeting.

About Agennix

Agennix AG is a publicly traded biopharmaceutical company that is developing novel therapies in areas of major unmet medical need to improve the length and quality of life of seriously ill patients. The Company's most advanced program is talactoferrin, an oral targeted therapy that has demonstrated activity in randomized, double-blind, placebo-controlled Phase 2 studies in non-small cell lung cancer as well as in severe sepsis. Talactoferrin is currently in Phase 3 clinical trials in non-small cell lung cancer. Other clinical development programs include RGB-286638, a multi-targeted kinase inhibitor in Phase 1 testing; the oral platinum-based compound satraplatin; and a topical gel form of talactoferrin for diabetic foot ulcers. Agennix's registered seat is in Heidelberg, Germany. The Company has three sites of operation: Martinsried/Munich, Germany; Princeton, New Jersey and Houston, Texas. 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 the Company's future cash position. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond the control of the Company, that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Actual results could differ materially depending on a number of factors, and management cautions investors not to place undue reliance on the forward-looking statements contained in this press release. 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.

- Financials follow -

For the full management report and condensed consolidated financial statements and accompanying notes for the first three months ended March 31, 2010, please see the Investor Relations section of the Agennix website at http://www.agennix.com/index.php?option=com_content&view=article&id=14&Itemid=33&lang=en.


Agennix AG
Interim Consolidated Statement of Operations

                                              Three months ended March 31,
                                                  2010           2009
                                               (unaudited)    (unaudited)
                                                 EUR 000        EUR 000

Revenue                                                   -              -

Research and development expenses                    (4,977)        (1,130)
Administrative expenses                              (2,089)        (3,925)
Amortization of intangible assets                       (39)           (45)
Impairment of intangible assets                           -           (407)
Other income                                          1,624          1,520
Other expenses                                         (505)          (535)
Finance income                                            1            275
Finance costs                                            (2)           (29)
                                              -------------  -------------

Net loss before tax                                  (5,987)        (4,276)

Income tax benefit                                    1,656              -

                                              -------------  -------------
Net loss for the period                              (4,331)        (4,276)
                                              =============  =============


Basic and diluted loss per share (1)               (EUR 0.23)    (EUR 0.58)
Weighted average number of shares used in
 computing basic and diluted loss per
 share (1)                                       18,706,253      7,367,370

(1) Per share amount and share amounts for 2009 have been retrospectively
adjusted to reflect the effect of the 5 to 1 merger exchange ratio related
to the merger of GPC Biotech AG into Agennix AG.


       See accompanying notes to the consolidated financial statements





Agennix AG
Interim consolidated statement of financial position


                                                March 31,    December 31,
                                                  2010           2009
                                               (unaudited)    (unaudited)
                                                 EUR 000        EUR 000
ASSETS
Non-current assets
Property and equipment                                3,453          3,416
Intangible assets                                    97,836         91,881
Other non-current assets                              2,203          2,040
                                              -------------  -------------
Total non-current assets                            103,492         97,337

Current assets
Trade receivables                                         -             35
Prepayments                                             336            596
Other current assets                                    686            259
Cash and cash equivalents                            13,488         11,413
                                              -------------  -------------
Total current assets                                 14,510         12,303

TOTAL ASSETS                                        118,002        109,640
                                              =============  =============

EQUITY AND LIABILITIES
Equity attributable to the equity holders
Issued capital                                       20,578         18,705
Share premium                                        94,539         86,237
Other reserves                                        2,224         (1,863)
Retained loss                                       (20,828)       (16,497)
                                              -------------  -------------
Total equity                                         96,513         86,582

Non-current liabilities
Convertible bonds                                       210            210
Other non-current liabilities                            31             33
Deferred tax liability                               15,177         15,850
                                              -------------  -------------
Total non-current liabilities                        15,418         16,093

Current liabilities
Trade payables                                        3,775          1,592
Accruals and other current liabilities                2,253          5,330
Deferred revenue, current portion                        43             43
                                              -------------  -------------
Total current liabilities                             6,071          6,965

                                              -------------  -------------
Total liabilities                                    21,489         23,058

TOTAL EQUITY AND LIABILITIES                        118,002        109,640
                                              =============  =============


       See accompanying notes to the consolidated financial statements




Agennix AG
Selected Financial Data
Interim Consolidated Statement of Cash Flows


                                                    Year ended March 31,
                                                    2010           2009
                                                 (unaudited)    (unaudited)
                                                   EUR 000        EUR 000

Net cash used in operating activities                (7,571)        (4,892)

Net cash used in investing activities                   (13)       (15,652)

Net cash provided by (used in) financing
 activities                                           9,565           (317)

Effect of exchange rate changes on cash and
 cash equivalents                                        92            426
Changes in restricted cash                                2              -

Net increase (decrease) in cash and cash
 equivalents                                          2,075        (20,435)
Cash and cash equivalents at beginning of
 period                                              11,413         31,686
Cash and cash equivalents at end of period           13,488         11,251


       See accompanying notes to the consolidated financial statements

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