Biotech Values

[stockbettor]

OXGN chart looks liek its ready to move

I've thanked you before for your pre-ASCO technical calls on OXGN, which led me to sell 1/3 of my OXGN position at 2.30 (and roll the proceeds into NKTR and MNTA -- should have done so with 100%). Once again, thanks.

Today's price action may stem from the VXGN/OXGN proxy materials filed with the SEC. OXGN has estimated partnering and approval chances and made revenue projections for its VDA, Zybrestat, which I reproduce below. FWIW, NVS touted the VDA it licensed from Antisoma, ASA404, at its oncology-focused investors-day presentation earlier this month. As far as I know, Zybrestat is the only other VDA in a PIII trial, although 1 of the NVS slides indicated that 3 VDAs were in PIII trials (but perhaps counting ASA404 twice because there are 2 separate trials).

http://moneycentral.msn.com/investor/sec/filing.asp?Symbol=VXGN

Assumptions Used in Preparing Financial Projections

OXiGENE’s financial projections were prepared using primarily the same methodologies, to the extent applicable, as those used to prepare its historical financial statements. With respect to the revenue projections, OXiGENE assumed the following:


• The ZYBRESTAT revenue to OXiGENE line assumes the completion of a licensing arrangement in 2010 with a third party, under which the rights to ZYBRESTAT in the three areas currently focused on by OXiGENE in the oncology area, ATC, NSCLC, and ovarian cancer, were licensed to that third party. Additional payments were included, and are reflected in the revenue projections table above, based on the projected achievement of potential program development milestones during the periods presented as well as royalties on the potential product sales revenue amounts. These estimates were based on transactions that OXiGENE had determined to be similar with competitor companies that are developing vascular disrupting agents. In addition, OXiGENE assumed that any licensing arrangement would include development funding by the licensee.

• OXiGENE estimated the probability of achieving a licensing arrangement in 2010 as reflected in the table above to be 85%. If a licensing arrangement were not achieved, OXiGENE management assumed that OXiGENE would take steps to reduce expenses, including but not limited to expenses relating to development and commercialization spending.

• OXiGENE assumed that the licensing arrangement described above provided for a royalty rate of 15% of the net sales of OXiGENE’s potential product candidates to be paid by the third party licensee to OXiGENE.

• The worldwide ZYBRESTAT product sales amounts represent the potential sales revenue that could be generated for the three core ZYBRESTAT oncology indications, ATC, NSCLC and ovarian cancer. OXiGENE assumed that this potential sales revenue would be generated either (a) by the third party licensee that was a party to the licensing agreement noted above, which would generate royalty payments to OXiGENE as included in the ZYBRESTAT revenue to OXiGENE line shown in the table above or (b) by OXiGENE, assuming that a licensing transaction with a third party was not entered into, and OXiGENE chose to commercialize ZYBRESTAT and to generate this potential sales revenue independently, in which case the ZYBRESTAT revenue to OXiGENE amounts shown in the table above would not be due to OXiGENE.

• OXiGENE estimated the probability of achieving regulatory approval for and commercial sales of ZYBRESTAT resulting in the potential revenues reflected in the table above to be 57% for ATC, 40% for NSCLC and 52% for ovarian cancer. OXiGENE assumed regulatory approval for and commercial sales of ZYBRESTAT in ATC in 2012, in NSCLC in 2014 and in ovarian cancer in 2013.

• OXiGENE made a number of other assumptions and estimates in preparing the revenue projections, including, but not limited to, the size of the relative markets in which ZYBRESTAT would compete, the treatable patient populations in those markets, the percentage of the treatable patient population to be captured by ZYBRESTAT, the dosing duration of treatments, relevant pricing ranges, the estimated product launch dates and the probability by phase of reaching commercialization for each focus indication.


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