Opexa Therapeutics, Inc. (OPXA)

[DagnyAyn]

New out today, maybe this will help.
Opexa Therapeutics Reports Third Quarter 2009 Financial Results and Corporate Update
Wednesday 11/04/2009 8:33 AM ET - Businesswire

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OPXA 1.98 1.56%

As of 12:12 PM ET 11/4/09
Opexa Therapeutics, Inc. (NASDAQ: OPXA), a company developing a novel T-cell therapy for multiple sclerosis (MS), today reported financial results for the quarter ended September 30, 2009, and provided details on further developments.

Recent highlights include:

-- 3rd quarter net income of $2.2 million as a consequence of the gain on the sale of the Company's stem cell technology;

-- Closing of sale of early stage adult stem cell technology to Novartis and achievement of first technology transfer milestone; and

-- Receipt of approximately $1.2 million in additional cash from warrant exercises before and after quarter end.

"As we move forward during the fourth quarter and look ahead to 2010, we are quite pleased with our overall situation, especially in comparison to our circumstances last year at this time," stated Neil K. Warma, president and chief executive officer of Opexa. "The Novartis stem cell transaction bolstered our financial resources and consequently leaves us with $4.1 million in cash as of the end of October. The terms of the agreement allow Opexa to benefit considerably from progress in the stem cell technology's clinical development and potential commercial success in Novartis' capable hands. We have a very novel, late stage clinical asset in Tovaxin(R), our autologous cellular immunotherapy treatment for MS -- a current $9 billion market with a still significant unmet medical need and currently served by several approved drug therapies. Our enthusiasm for Tovaxin comes not only from its attractive clinical efficacy but also from its very compelling risk/benefit relationship, an aspect of the regulatory approval pathway that is gaining increasing importance."

"In the weeks ahead, our primary focus will continue to be on advancing our ongoing partnership discussions around Tovaxin. At the same time, our strengthened financial position has provided us with the opportunity to become more aggressive and invest back into Tovaxin's clinical development as we prepare for the next clinical trial. Supporting this is the on-going analysis from the TERMS trial which has recently focused on the vast array of immunological data which is providing valuable insight into and support of Tovaxin's potential mechanism of action," continued Mr. Warma.

"2010 promises to be an exciting year for Opexa and we look forward to sharing developments with our various stakeholders as the year unfolds. We will continue our undeterred focus on what we believe to be one of the most promising therapies in development for MS. At our current burn rate, today's cash resources are sufficient to fund the company's operations through the 2010 calendar year," added Mr. Warma.

Third Quarter Financial Results

Opexa recorded no sales for the three months ended September 30, 2009 or in the comparable prior-year period.

Research and development expense was approximately $0.5 million for the three months ended September 30, 2009, compared to approximately $2.4 million for the three months ended September 30, 2008. The decrease in expenses was primarily due to the completion of the Phase IIb clinical trial in August 2008, closing the extension trial, a reduction in staff and a decrease in non-cash stock compensation expense.

General and administrative expense was approximately $666,000 for the three months ended September 30, 2009, as compared to approximately $661,000, for the three months ended September 30, 2008. The increase in expenses was due to a senior management bonus accrual and increased legal fees which were largely offset by a decrease in non-cash stock compensation expense, overhead expenses, board compensation fees and a reduction in staff.

Opexa recognized a gain on the sale of assets of $3 million for the three months ended September 30, 2009. The gain is attributable to the sale of the Company's stem cell technology program to Novartis for an upfront payment of $3 million.

Opexa recognized other income of $0.5 million for the three months ended September 30, 2009 attributable to the completion of the initial $0.5 million technology transfer fee milestone and pursuant to the terms of the stem cell technology acquisition agreement with Novartis. Payment was received subsequent to quarter end.

Opexa reported net income for the three months ended September 30, 2009, of approximately $2.2 million, or $0.18 per basic share and $0.14 per diluted share, compared with a net loss of approximately $3.1 million or $0.28 per share (basic and diluted), for the three months ended September 30, 2008. The income in 2009 is attributable to the sale of the Company's stem cell technology program to Novartis for an upfront payment of $3 million and a reduction of costs associated with the Phase IIb clinical trial of Tovaxin that was completed in 2008, a reduction in staff and a decrease in non-cash stock compensation expense.

The Company had cash and cash equivalents of approximately $4 million as of September 30, 2009, compared with approximately $1.2 million as of December 31, 2008. The September 30, 2009 quarter-end cash balance includes initial proceeds of $3 million for the sale of the Company's stem cell technology program to Novartis but does not include a $0.5 million payment from Novartis received subsequent to the end of the quarter for completing the first of two technology transfer milestones.

Year-to-Date Financial Results

Opexa recorded no sales in the nine months ended September 30, 2009 or in the comparable prior-year period.

Research and development expense was approximately $1.7 million for the nine months ended September 30, 2009, compared to approximately $7.1 million for the nine months ended September 30, 2008. The decrease in expenses was primarily due to the completion of the Phase IIb clinical trial in August 2008, closing the extension trial, a reduction in staff and a decrease in non-cash stock compensation expense.

General and administrative expense was approximately $1.5 million for the nine months ended September 30, 2009, as compared to approximately $2.7 million, for the nine months ended September 30, 2008. The decrease in expenses is due to a decrease in non-cash stock compensation expense, overhead expenses, professional service fees, board compensation fees and a reduction in staff.

Opexa recognized a gain on the sale of assets of $3 million for the nine months ended September 30, 2009. The gain is attributable to the sale of the Company's stem cell technology program to Novartis for an upfront payment of $3 million.

Opexa recognized other income of $0.5 million for the nine months ended September 30, 2009 attributable to the completion of the initial $0.5 million technology transfer fee milestone pursuant to the terms of the stem cell technology acquisition agreement with Novartis. Payment of $0.5 million was received subsequent to quarter end.

Opexa recognized a non-cash loss on derivative instruments of $366,774 for the nine months ended September 30, 2009. This loss is a result of the net unrealized (non-cash) change in the fair value of our derivative instrument liabilities related to warrants associated with the August 2008 financing which had been accounted for under FASB ASC 815 and which accounting treatment was discontinued on June 1, 2009.

Opexa reported a net loss for the nine months ended September 30, 2009, of approximately $0.3 million, or $0.02 per share (basic and diluted), compared with a net loss of approximately $9.9 million or $0.99 per share (basic and diluted), for the nine months ended September 30, 2008. The decrease in net loss is primarily due to the $3 million gain on sale of technology, a reduction of costs associated with the Phase IIb clinical trial of Tovaxin that was completed in 2008, a reduction in staff and a decrease in non-cash stock compensation expense.