Vasogen Announces Third Quarter 2007 Results
MISSISSAUGA, ON, Oct. 9 /PRNewswire-FirstCall/ - Vasogen Inc. (NASDAQ:VSGN; TSX:VAS), today reported the results of operations for the third quarter of 2007. All dollar amounts referenced herein are in Canadian dollars unless otherwise noted.
At August 31, 2007, our cash and cash equivalents and restricted cash totaled $29.1 million, compared with $33.8 million at May 31, 2007. With the repayment of our convertible notes during the second quarter, we no longer have any restricted cash. The change in our cash position resulted mainly from cash used for operations. Our net cash used for operations for the three months ended August 31, 2007, was $4.4 million.
The net loss for the third quarter of 2007 was $5.3 million, or $0.24 per common share, compared with a net loss of $14.6 million, or $1.55 per common share for the same period in 2006. We incurred a net loss for the nine months ended August 31, 2007 of $22.7 million, or $1.21 per common share, compared with a net loss of $56.3 million, or $6.41 per common share for the same period in 2006. The key drivers of our reduced losses in 2007 are lower costs associated with the completion of our phase III clinical programs, the corporate costs associated with supporting these programs, and a reduction in expenses associated with our senior convertible notes which has been partially offset by restructuring costs. The difference between cash used in operations and our accounting loss is driven by non-cash items, such as expenses related to our senior convertible notes and stock options, as well as unrealized foreign exchange gains and losses.
Highlights
- Following our meeting with the Food and Drug Administration (FDA) in
May 2007 regarding our ACCLAIM results, the agency strongly
recommended that we conduct a confirmatory trial ('ACCLAIM-II') of
Celacade in NYHA Class II heart failure patients to support a
Pre-market Approval submission for the purpose of achieving
regulatory approval in the United States. The FDA also recommended
that we use a Bayesian approach in the design of the confirmatory
trial. The FDA indicated that they were recommending this approach
specifically because it would allow us to borrow power from the
ACCLAIM trial and also because it has the potential to substantially
reduce the sample size required for a confirmatory study. The planned
trial design for ACCLAIM-II indicates that as few as 300 patients
could provide sufficient data to confirm the finding of the
phase III ACCLAIM trial which demonstrated a 39% reduction
(p=0.0003) in the risk of death or cardiovascular
hospitalizations for patients receiving Celacade in the large
pre-specified subgroup of 689 NYHA class II heart failure patients.
Furthermore, the use of an adaptive clinical trial design also
provides the flexibility to increase the sample size up to
600 patients, should additional data be required. We are preparing to
meet with the FDA again, with the objective of obtaining formal
regulatory agreement with respect to our proposed trial design prior
to the end of the year.
- James B. Young, MD, Chairman, Division of Medicine at the Cleveland
Clinic Foundation and Medical Director, Kaufman Center for Heart
Failure, has agreed to be the Global Principal Investigator and
Chairman of the Steering Committee for the planned ACCLAIM-II study.
Dr. Young, who has played a leading role in numerous multi-center
clinical trials focusing on heart failure and transplantation, led
Vasogen's 2,400-patient ACCLAIM study, which was completed last year.
We are also pleased to announce the other members of the newly formed
ACCLAIM-II steering committee include Guillermo Torre-Amione, MD,
PhD, FACC, Medical Director, Heart Transplant Program, Methodist
DeBakey Heart Center at The Methodist Hospital; Robert Bourge, MD,
Professor & Director of Cardiology Division, Department of Medicine,
University of Alabama at Birmingham; Jean Rouleau, MD, Dean of
Medicine, University of Montreal; Maria Rosa Costanzo, MD, Medical
Director, Edward Center for Heart Failure, Midwest Heart Foundation;
Clyde W. Yancy Jr., MD, Medical Director, Baylor Heart & Vascular
Institute; and Mariell Jessup, MD, Medical Director, Hospital of the
University of Pennsylvania, Heart Failure/Transplant Center.
- A medical symposium focused on the introduction of our
Celacade technology into the European Union was recently held during
the 11th National Conference of Advanced Therapies in Heart Failure
in Spain. The symposium, which was hosted by our European
commercialization partner, Grupo Ferrer Internacional, S.A.
('Ferrer'), was attended by physicians whom Ferrer is targeting to
participate in the initial roll-out of our Celacade technology for
the treatment of heart failure patients. Ferrer is initially
targeting Germany and Spain for the initial commercial launch of
Celacade. Among the presenters at the symposium was Dr. Torre-Amione,
who discussed the importance of the role inflammation plays in the
development and progression of heart failure, and who also reviewed
the results of the ACCLAIM trial of Celacade in chronic heart
failure. The European commercialization activities for Celacade are
proceeding as planned and we remain on track with our objective of
launching Celacade in Europe before the end of the year.
- Today we announced that a recently published book,
'Immune Dysfunction and Immunotherapy in Heart Disease,' discusses
the Celacade System for the treatment of heart failure. The chapter
entitled 'Anti-inflammatory therapy in heart failure,' describes how
the growing understanding of the role inflammation in heart failure
has led to new treatment modalities and describes the potential of
Celacade to target this underlying pathology. The authors of the
chapter describe the mechanism of action of Celacade and review the
results of the ACCLAIM trial. Regarding the results of the trial, the
authors state: 'These findings are consistent with the role that
chronic inflammation plays in the development and progression of HF
and are particularly impressive in the large subgroup of
NYHA Class III or IV patients who had not experienced a prior heart
attack and in all NYHA class II patients. These results provide a
strong basis for targeting Celacade's novel anti-inflammatory
mechanism in this large and well-defined patient population.'
As previously announced, a conference call will be conducted on October 9, 2007, at 4:30 p.m. Eastern time. The conference call may be accessed by calling 416-641-6124 or 1-866-300-4047 ten minutes prior to the call. An audio web cast of the event will also be available at www.vasogen.com. A re-broadcast of the conference call may be accessed by calling 416-695-5800 or 1-800-408-3053, PIN code 3238234 followed by the number sign, and will also be available at www.vasogen.com.
About Vasogen:
Vasogen is a biotechnology company engaged in the research and commercial development of therapies designed to target the destructive inflammatory process associated with the development and progression of cardiovascular and neurodegenerative disorders. The Company's lead product, the Celacade(TM) System, is designed to activate the immune response to apoptosis - an important physiological process that regulates inflammation. Celacade is in late-stage development for the treatment of chronic heart failure and has received European regulatory approval under the CE Mark for this indication. Vasogen is also developing a new class of drugs for the treatment of certain neuro-inflammatory disorders. VP025 is the lead drug candidate from this new class.
Certain statements contained in this press release, the upcoming conference call and web cast, or elsewhere in our public documents constitute 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995 and/or 'forward-looking information' under the Securities Act (Ontario). These statements may include, without limitation, plans to advance the development of Celacade(TM) or VP025, plans to fund our current activities, statements concerning our partnering activities, health regulatory submissions, strategy, future operations, future financial position, future revenues and projected costs. In some cases, you can identify forward-looking statements by terminology such as 'may', 'will', 'should', 'expects', 'plans', 'anticipates', 'believes', 'estimated', 'predicts', 'potential', 'continue', 'intends', 'could', or the negative of such terms or other comparable terminology. We made a number of assumptions in the preparation of these forward-looking statements, including assumptions about the nature, size, and accessibility of the market for Celacade in the treatment of chronic heart failure, particularly in Europe, the regulatory approval process leading to commercialization and the availability of capital on acceptable terms to pursue the development of Celacade, and the feasibility of additional trials. You should not place undue reliance on our forward-looking statements which are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances or events to differ materially from those projected. These risks include, but are not limited to, the outcome of further ongoing analysis of the ACCLAIM trial results, the requirement or election to conduct additional clinical trials and the size and design of any such trials, delays or setbacks in the regulatory approval process, difficulties in the maintenance of existing regulatory approvals, securing and maintaining corporate alliances, the need for additional capital and the effect of capital market conditions and other factors on capital availability, the potential dilutive effects of any financing, risks associated with the outcomes of our preclinical and clinical research and development programs, the adequacy, timing, and results of our clinical trials, competition, market acceptance of our products, the availability of government and insurance reimbursements for our products, the strength of intellectual property, reliance on partners, subcontractors, and key personnel, losses due to fluctuations in the U.S.-Canadian exchange rate, and other risks detailed from time to time in our public disclosure documents or other filings with the Canadian and U.S. securities commissions or other securities regulatory bodies. Additional risks and uncertainties relating to our Company and our business can be found in the 'Risk Factors' section of our Annual Information Form and Form 20-F for the year ended November 30, 2006, as well as in our later public filings. The forward-looking statements are made as of the date hereof, and we disclaim any intention and have no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The unaudited interim consolidated financial statements, accompanying notes to the unaudited interim consolidated financial statements, and Management's Discussion and Analysis for the three months and nine months ended August 31, 2007, will be accessible on Vasogen's Website at www.vasogen.com and will be available on SEDAR and EDGAR. Summary financial tables are provided below.
VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Balance Sheets
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
August 31, November 30,
2007 2006
-------------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 29,121 $ 30,427
Restricted cash - 6,403
Clinical supplies 1,241 1,211
Tax credits recoverable 1,356 1,327
Prepaid expenses and deposits 583 1,384
-----------------------------------------------------------------------
32,301 40,752
Property and equipment 476 615
Acquired technology 63 253
Deferred financing costs - 150
-------------------------------------------------------------------------
$ 32,840 $ 41,770
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 537 $ 3,369
Accrued liabilities 3,267 5,067
Senior convertible notes payable - 8,754
-----------------------------------------------------------------------
3,804 17,190
Shareholders' equity:
Share capital:
Authorized:
Unlimited common shares, without par value
Issued and outstanding:
22,391,387 common shares
(November 30, 2006 - 15,665,134) 365,670 344,217
Stock-based compensation 10,958 10,713
Equity component of senior convertible
notes payable - 1,639
Warrants 16,725 11,390
Contributed surplus 11,408 7,995
Deficit (375,725) (351,374)
-----------------------------------------------------------------------
29,036 24,580
Commitments and contingencies
-------------------------------------------------------------------------
$ 32,840 $ 41,770
-------------------------------------------------------------------------
-------------------------------------------------------------------------
VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Operations, Deficit and Comprehensive
Income
(In thousands of Canadian dollars, except per share amounts)
(Unaudited)
-------------------------------------------------------------------------
Period from
December 1,
Three months ended Nine months ended 1987 to
August 31, August 31, August 31,
2007 2006 2007 2006 2007
-------------------------------------------------------------------------
Expenses:
Research and
development $ 2,588 $ 7,360 $ 9,347 $ 29,773 $ 238,028
General and
administration 2,887 3,800 11,363 14,290 116,535
Foreign exchange
loss (gain), net 242 (12) 1,200 160 10,193
-------------------------------------------------------------------------
Loss before the
undernoted (5,717) (11,148) (21,910) (44,223) (364,756)
Interest expense on
senior convertible
notes payable - (116) (5) (903) (1,279)
Accretion in
carrying value of
senior convertible
notes payable - (1,727) (728) (6,633) (10,294)
Amortization of
deferred financing
costs - (577) (154) (2,157) (3,057)
Loss on
extinguishment of
senior convertible
notes payable - (1,407) (1,754) (4,101) (6,749)
Investment income 370 409 1,003 1,681 13,018
Change in fair value
of embedded
derivatives - - 829 - 829
-------------------------------------------------------------------------
Loss for the period
and comprehensive
loss (5,347) (14,566) (22,719) (56,336) (372,288)
Deficit, beginning of
period:
As previously
reported (370,378) (326,784) (351,374) (284,719) (1,510)
Impact of change
in accounting for
financial
instruments on
December 1, 2006 - - (1,632) - (1,632)
-----------------------------------------------------------------------
As restated (370,378) (326,784) (353,006) (284,719) (3,142)
Charge for
acceleration
payments on equity
component of senior
convertible notes
payable - - - (295) (295)
-------------------------------------------------------------------------
Deficit, end of
period $(375,725) $(341,350) $(375,725) $(341,350) $(375,725)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted
loss per share $ (0.24) $ (1.55) $ (1.21) $ (6.41) $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)
Interim Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
(Unaudited)
-------------------------------------------------------------------------
Period from
December 1,
Three months ended Nine months ended 1987 to
August 31, August 31, August 31,
2007 2006 2007 2006 2007
-------------------------------------------------------------------------
Cash provided by
(used in):
Operations:
Loss for the
period $ (5,347) $ (14,566) $ (22,719) $ (56,336) $(372,288)
Items not
involving cash:
Amortization 125 146 378 444 6,034
Accretion in
carrying value
of senior
convertible
notes payable - 1,727 728 6,633 10,294
Amortization of
deferred
financing costs - 577 154 2,157 3,057
Loss on
extinguishment
of senior
convertible
notes payable - 1,407 1,754 4,101 6,749
Change in fair
value of
embedded
derivatives - - (829) - (829)
Stock-based
compensation 164 774 1,615 2,456 13,207
Common shares
issued for
services - 28 - 28 2,485
Unrealized
foreign
exchange loss
(gain) 227 (121) 1,454 585 10,431
Other - - - - (35)
Change in
non-cash
operating working
capital 413 (5,184) (3,890) (13,832) 595
-----------------------------------------------------------------------
(4,418) (15,212) (21,355) (53,764) (320,300)
Financing:
Shares and warrants
issued for cash - - 17,345 - 326,358
Warrants exercised
for cash - - - - 16,941
Options exercised
for cash - - - - 7,669
Share issue costs - (160) (1,440) (160) (24,646)
Issue (repayment)
of senior
convertible notes
payable, net - (1,695) (924) (3,810) 38,561
Restricted cash 3,078 (38) 6,403 648 -
Cash payment on
acceleration
warrants exercise
price - - - (49) (49)
Paid to related
parties - - - - (234)
-----------------------------------------------------------------------
3,078 (1,893) 21,384 (3,371) 364,600
Investments:
Purchase of
property and
equipment (8) (10) (49) (24) (2,465)
Purchase of
acquired
technology - - - - (1,283)
Purchases of
marketable
securities - - - (80) (244,846)
Settlement of
forward exchange
contracts - - 10 (259) (4,824)
Maturities of
marketable
securities - - - 22,877 240,677
-----------------------------------------------------------------------
(8) (10) (39) 22,514 (12,741)
Foreign exchange
gain (loss) on cash
held in foreign
currency (227) 205 (1,296) (1,334) (2,438)
-------------------------------------------------------------------------
Increase (decrease)
in cash and cash
equivalents (1,575) (16,910) (1,306) (35,955) 29,121
Cash and cash
equivalents,
beginning of period 30,696 31,476 30,427 50,521 -
-------------------------------------------------------------------------
Cash and cash
equivalents, end
of period $ 29,121 $ 14,566 $ 29,121 $ 14,566 $ 29,121
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SOURCE Vasogen Inc.
Source: PR Newswire (October 9, 2007 - 3:10 PM EST)
News by QuoteMedia
www.quotemedia.com
