- Major Directional Change in Mid-April -
WALTHAM, Mass., May 28 /PRNewswire-FirstCall/--
AltaRex Corp. (TSX: AXO, OTC: ALXFF.PK), a developer of foreign antibodies
that activate the immune system to treat cancer, announced its financial
results for the first quarter ended March 31, 2002. All amounts reported are
in Canadian dollars.
The Company recorded a net loss of $5.6 million, or $(0.15) per share, for
the three months ended March 31, 2002 compared to a net loss of $6.3 million,
or $(0.26) per share, for the same period in 2001. The decreased net loss is
due primarily to the planned decrease in spending during the first quarter on
manufacturing, clinical development and regulatory expenses, as the Company
focused on pursuing financing, partnering and/or merger and acquisition
activities to address its critically limited cash position, while continuing
key clinical trials and analysis work on its lead product OvaRex(R) MAb
(oregovomab).
At March 31, 2002, the Company's cash, cash equivalents and short-term
investments totaled $2.3 million as compared to $9.1 million at December 31,
2001. Subsequent to the end of the first quarter, the Company announced its
exclusive licensing agreement with a wholly-owned subsidiary of United
Therapeutics Corporation for the rights to OvaRex(R) and AltaRex's four
additional cancer antibody products for North America and many regions
worldwide. As part of the agreement, United Therapeutics purchased 4.9
million common shares of the Company for a purchase price of approximately
$3.9 million. The Company also issued to United Therapeutics a warrant to
purchase additional common shares of the Company plus a right to purchase a
convertible debenture (each of which expires if not executed prior to August
20, 2002) that combined, if excercised, will provide AltaRex an additional
$4.0 million in cash. Longer term, the agreement establishes a potential
future revenue stream for the Company, based on milestone payments and sales
royalties for OvaRex(R) and the five-product cancer antibody portfolio.
The events of first quarter 2002 and the subsequent agreement with United
Therapeutics in April mark a major directional change for the Company.
As of the effective date of April 17, 2002 and during a 240-day initial
assessment period and thereafter (assuming a favorable completion thereof),
United Therapeutics assumed responsibility for all expenses associated with
the development and commercialization of OvaRex(R) and all five oncology
products for its licensed territories, as well as for the personnel costs
associated with about one-half of AltaRex employees who as of mid-May became
employees of Unither Pharmaceuticals, a wholly-owned subsidiary of United
Therapeutics Corporation. This group includes the following previous officers
of AltaRex - Peter Gonze, Senior Vice President of Operations; Christopher
Nicodemus, M.D., Senior Vice President of Clinical Research and Development;
and James Levin, D.V.M., Vice President of Manufacturing and Development.
With these and other personnel changes, the Company expects to operate with a
core staff of approximately a dozen employees in the business development and
discovery areas, and consequently to reduce significantly its research and
development costs and supporting general and administrative expenses.
The Company will now focus on establishing corporate alliances for the
European Union countries, where AltaRex retains all rights to its cancer
antibody portfolio, although profit-sharing joint ventures have already been
established with regional market leaders in Southern Europe. Notably, the
still unlicensed territories of the world represent almost one-half of the
target patient population for OvaRex(R) MAb.
AltaRex expects to extend its technology to new areas in and outside of
the cancer field as resources allow. For example, the Company is accelerating
ongoing research and development activities with Epigen, Inc., in a
collaboration structured for an equal sharing of research expenses. The
Company will also explore collaborations outside of cancer by joining with
others to create the necessary capability to support a meaningful effort.
During the first quarter, the Company announced primary results of its
largest (345-patient) OvaRex(R) study. The Company also successfully filled
its first lot of new cell-culture OvaRex(R) product and subsequently initiated
and fully enrolled a 24-patient pharmacokinetic study to establish
comparability between the new manufacturing process and the one that produced
OvaRex(R) product used in clinical studies to date. In this regard,
encouraging news came from the Company's meetings with European regulatory
authorities during the quarter, indicating the possibility that the approach
initiated in the United States to establish manufacturing comparability could
fulfill European requirements as well.
As part of the announced licensing transaction, OvaRex(R) Investigational
New Drug (INDs) applications are being transferred to United Therapeutics
along with full responsibility for clinical development, regulatory and
manufacturing. It is expected that United Therapeutics will review the
OvaRex(R) clinical program to date, seek input from regulatory authorities,
and design and implement a confirmatory randomized clinical study (presumably
phase III) to the recently reported 345-patient phase IIb study, with the
intention of initiating patient treatment in such a trial during the first
quarter of next year.
More about AltaRex research and development, clinical trials, news and
events can be found on the Company website http://www.altarex.com.
This news release contains forward-looking statements that involve risks
and uncertainties, which may cause actual results to differ materially from
the statements made. For this purpose, any statements that are contained
herein that are not statements of historical fact may be deemed to be forward-
looking statements. Without limiting the foregoing, the words "believes,"
"anticipates," "plans," "intends," "expects" and similar expressions are
intended to identify forward-looking statements. Such risks and uncertainties
include, but are not limited to our need for capital and the risk that the
Company can not raise funds on a timely basis on satisfactory terms or at all,
the need to obtain and maintain corporate alliances, such as the alliance with
United Therapeutics, and the risk that the Company cannot establish corporate
alliances on a timely basis, on satisfactory terms, or at all, changing market
conditions, uncertainties regarding the timely and successful completion of
clinical trials and patient enrollment rates, uncertainty of pre-clinical,
retrospective, early and interim clinical trial results, which may not be
indicative of results that will be obtained in ongoing or future clinical
trials, whether the Company and/or its collaborators will file for regulatory
approval on a timely basis, uncertainties as to when, if at all, the FDA will
accept or approve regulatory filings for the Company's products, the need to
establish and scale-up manufacturing processes, uncertainty as to the timely
development and market acceptance of the Company's products, uncertainty as to
whether patents will issue from pending patent applications and, if issued, as
to whether such patents will be sufficiently broad to protect the Company's
technology, and other risks detailed from time-to-time in the Company's
filings with the United States Securities and Exchange Commission and Canadian
securities authorities. The Company does not assume any obligation to update
any forward-looking statement.
THE TORONTO STOCK EXCHANGE HAS NOT APPROVED OR DISAPPROVED OF THE INFORMATION
CONTAINED HEREIN
Condensed Consolidated Statement of Operations
(In Canadian dollars, Unaudited)
Three months ended
Mar. 31, Mar. 31,
2002 2001
Revenues $25,035 $185,639
Expenses
Research & development 4,025,756 5,069,452
General & administration 1,637,676 1,453,646
5,663,432 6,523,098
Net loss for the period $(5,638,397) $(6,337,729)
Net loss per common share $(0.15) $(0.26)
Weighted average number of
common shares outstanding 36,678,716 24,282,170
Condensed Consolidated Balance Sheet
(In Canadian dollars, Unaudited)
As of As of
March 31, Dec. 31,
2002 2001
ASSETS
Cash and cash equivalents $2,316,555 $8,211,313
Short-term investments -- 856,051
Other current assets 665,346 853,152
Capital assets, net 563,703 634,870
Other assets 235,671 235,671
Total assets $3,781,275 $10,791,057
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 5,824,293 $ 7,383,751
Total shareholder's equity (2,043,018) 3,407,306
Total liabilities and shareholders' equity $3,781,275 $10,791,057
Contacts:
Sondra Henrichon
Investor Relations
(781) 672-0138 ext. 1510
shenrichon@altarex.com
SOURCE AltaRex Corp.
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Related links:
http://www.altarex.com
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CONTACT:
Sondra Henrichon, Investor Relations of
AltaRex Corp., +1-781-672-0138, ext. 1510, shenrichon@altarex.com
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