WATERTOWN, Mass., May 11 /PRNewswire-FirstCall/ -- V.I. Technologies, Inc.
(Nasdaq: VITX) ("Vitex" or "the Company"), a biotechnology company dedicated
to developing the next generation of anti-infective products, today announced
its financial results for the first quarter ended March 31, 2005.
Vitex closed its merger with Panacos Pharmaceuticals, Inc. ("Panacos") on
March 11, 2005. For accounting purposes, the transaction is considered a
"reverse merger" under which Panacos is considered the acquirer of Vitex.
Accordingly, the purchase price was allocated among the fair value of the
assets and liabilities of Vitex, while the historical results of Panacos are
reflected in the results of the combined company and used for comparison to
current financial results.
For the first quarter of 2005, Vitex reported a net loss of $36.7 million
or $3.66 per share versus a net loss of $2.0 million or $4.66 per share for
the first quarter of 2004. Weighted average shares used in the calculation
were approximately 10 million for the quarter ending March 31, 2005 and 0.44
million for the quarter ending March 31, 2004. Actual shares outstanding for
Vitex as of March 31, 2005 were 38.2 million. Non-cash charges associated with
the merger accounted for $32.7 million of the net loss in the first quarter of
2005.
Revenue from research funding increased from $0.2 million in the first
quarter of 2004 to $0.45 million in the first quarter of 2005, reflecting
higher grant revenue from NIH for the development of PA-457 and the
development of other anti-viral therapeutics.
Research and development spending in the first quarter of 2005 increased
to $4.3 million from $1.5 million in the first quarter of 2004. The majority
of the increase was attributable to PA-457 advancing into Phase 2 clinical
studies and the expenses associated with preparing for later stage trials of
PA-457, including long term toxicology studies and development and manufacture
of a tablet form of the product candidate. Spending also increased on pre-
clinical programs designed to expand the Company's pipeline of anti-HIV
therapeutics. The Company also recorded a one-time charge of $0.6 million to
reflect the acceleration of certain options for Panacos employees as a result
of the merger.
General and administrative spending in the first quarter of 2005 increased
to $1.4 million from $0.4 million in the first quarter of 2004. Approximately
half of the increase is due to adding the public company infrastructure of
Vitex as a result of the merger. The other portion of the increase was due to
a non-cash charge recorded by the Company to accelerate certain options of
Panacos employees as a result of the merger.
In addition to the charges associated with the acceleration of Panacos
options, there were two significant non-cash charges totaling $31.5 million
included in the quarter ending March 31, 2005 as a result of the merger. Vitex
expensed $19.4 million for in-process research and development. The Company
also recorded an impairment charge of $12.1 million in tangible and intangible
assets. The charge reflects the portion of the purchase price allocated to
tangible and intangible assets that exceeded the fair value of those assets as
determined by an analysis conducted by the Company following the merger in
accordance with SFAS No. 144.
Unrestricted cash and cash equivalents were $20 million at March 31, 2005
versus $4.9 million at December 31, 2004. On March 11, 2005, the Company
closed a private placement of common stock and warrants to purchase common
stock from a group of investors that raised gross proceeds of $20 million.
Subsequent to the end of the quarter, on April 29, 2005, Vitex closed a rights
offering of the Company's common stock to Vitex shareholders of record as of
March 9, 2005. Vitex issued approximately 1.23 million shares and raised gross
proceeds of approximately $2.5 million in the rights offering.
"The highlight of our first quarter was the closing of the
transformational merger with Panacos Pharmaceuticals," said Dr. Samuel
Ackerman, Chairman and CEO of Vitex. "We are particularly excited about the
continuing progress of PA-457, our lead anti-HIV drug candidate that has
advanced in less than one year into Phase 2 trials. Our proof of principle
Phase 1/2 study of PA-457 recently indicated that PA-457 has therapeutic
activity in patients infected with either drug-sensitive or drug-resistant HIV
strains. We look forward to the results of our ongoing Phase 2a study later
this year."
PA-457 is the first in a new class of oral HIV therapeutics discovered by
Vitex scientists called maturation inhibitors. By targeting a novel step in
the virus life cycle, maturation inhibitors are designed to combat HIV strains
that are resistant or sensitive to existing classes of drugs in an oral dosage
form.
Dr. Ackerman further commented, "We ended the first quarter with a
strengthened balance sheet as a result of the private placement we closed at
the time of the merger. Our cash on hand at the end of the first quarter
combined with the proceeds of the rights offering should be sufficient to fund
our operations into Q1 of 2006 with the results of the Phase 2a study expected
later this year."
Highlights for Q1 2005 include:
* Vitex closed the merger with Panacos Pharmaceuticals on March 11, 2005
and a private placement of common stock and warrants to purchase common
stock which raised gross proceeds of $20 million.
* The Company continued enrollment in a Phase 2a study at multiple
clinical sites in the U.S. This study in which PA-457 is administered
to HIV-infected patients once daily for ten days is expected to enroll
32 patients with results expected in the mid-2005.
* The promising results of a recently completed Phase 1/2 study of PA-457
were presented on February 25, 2005 at the 12th Conference on
Retroviruses and Opportunistic Infections in Boston. The Company also
reported the results from a Phase 1b study of PA-457 which the Company
believes to support a once daily oral dosing regimen as well as the
safety and tolerability of this first-in-class HIV drug.
* In early January the Company reported that the FDA granted Fast Track
status to PA-457.
* Following the merger and associated financing, the Company regained full
compliance with NASDAQ requirements for continued listing.
Vitex will hold a conference call today to discuss the first quarter
results at 8:30 AM (EDT). The conference call may be accessed by dialing 800-
540-0559 (domestic) or 785-832-1508 (international). A replay of the
conference call will be available for 48 hours and may be accessed by dialing
800-938-1594 (domestic) or 402-220-1543 (international).
About Vitex
Vitex is developing the next generation of anti-infective products. The
Company is engaged in the discovery and development of small molecule oral
drugs for the treatment of HIV and other major human viral diseases. Vitex's
proprietary discovery technologies and lead therapeutic candidate PA-457 focus
on novel targets in the virus life cycle, including virus fusion and virus
maturation. The Company's separate INACTINE(TM) technology is designed to
inactivate a wide range of viruses, bacteria and parasites in blood products,
and has demonstrated its ability to remove prion proteins. The Company's
clinical development program for INACTINE has been suspended while the Company
continues to address issues relating to immune responses observed in certain
patients in Phase 3 clinical trials. For more information on Vitex, please
visit our web site at: http://www.vitechnologies.com.
Except for the historical information contained herein, the matters
discussed are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties, such as the progress of clinical
development of PA-457 and the timing of results of clinical trials, the
execution of the Company's financing plans, the timely availability of new
products, the Company's ability to execute plans to resume it clinical trial
program for the INACTINE viral inactivation system for red blood cells, market
acceptance of the Company's products, the impacts of competitive products and
pricing, government regulation of the Company's products, the Company's
ability to complete product development collaborations and other strategic
transactions and other risks and uncertainties set forth in the Company's
filings with the Securities and Exchange Commission. These risks and
uncertainties could cause actual results to differ materially from any
forward-looking statements made herein.
(Financial tables follow)
V.I. TECHNOLOGIES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
(unaudited)
Three Months Ended
March 31, March 31,
2005 2004
Revenues:
Research funding $453 $224
Operating expenses:
Research and development costs 4,290 1,499
General and administrative
expenses 1,371 402
In-process research and
development 19,417 --
Impairment charge 12,123 --
Total operating expenses 37,201 1,901
Loss from operations (36,748) (1,677)
Interest (income) expense, net (27) 118
Other (income) expense, net (22) --
Net loss (36,699) (1,795)
Accretion of preferred stock
dividends -- 244
Net loss available to common
stockholders ($36,699) ($2,039)
Basic and diluted net loss per share $(3.66) $(4.66)
Weighted average shares used in
calculation of basic and diluted net
loss per share 10,027 438
V.I. TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
March 31, December 31,
2005 2004
Cash $20,045 $4,879
Restricted cash 796 125
Other current assets 1,220 342
Property and equipment, net 3,074 310
Intangible asset, net 1,385 --
Other assets 313 675
Total assets $26,833 $6,331
Accounts payable and accrued expenses $6,665 $2,614
Deferred rent 88 81
Term debt obligations 1,329 164
Redeemable preferred stock -- 29,918
Stockholders' equity 18,751 (26,446)
Total liabilities,
redeemable preferred stock and
stockholders' equity $26,833 $6,331
CONTACT:
John R. Barr
President
617-926-1551
john.barr@vitechnologies.com
SOURCE V.I. Technologies, Inc.
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Related links:
http://www.vitechnologies.com
CONTACT:
John R. Barr, President of V.I. Technologies,
Inc., +1-617-926-1551, john.barr@vitechnologies.com
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