NEWS: They're pumping Tesetaxel...
BERKELEY HEIGHTS, N.J., Nov 16, 2009 (BUSINESS WIRE) --
--Tesetaxel Phase 2 will Target Gastric Cancer, Prostate Cancer, and Melanoma
--Company Expects to Continue Genasense(R) AGENDA Trial to Assess Survival
--[webcast]
Genta Incorporated (OTCBB: GETA) today announced financial results for the
quarter and nine months ended September 30, 2009. The Company also announced a
restructuring, reduction in workforce, and re-ordering of clinical development
priorities.
The restructuring has reduced the workforce by approximately 30%, which is
estimated to reduce annualized payroll costs by approximately 25%. Together with
other initiatives, the Company estimates that reduced expenses will yield
sufficient cash to continue operations into the Second Quarter of 2010, which
updates the Company's prior guidance of January 2010.
The Company has conducted a randomized Phase 3 trial of Genasense(R) in patients
with advanced melanoma, known as AGENDA. Detailed results from AGENDA are being
presented at a scientific meeting in Boston, MA, and this information is
summarized in a separate press release today. Going forward, Genta internal
staff expects to manage the further conduct and patient follow-up of AGENDA
until an analysis for overall survival can be conducted. The double-blind design
will be maintained until study completion, and the Company expects to maintain
the same high level of quality.
"The initiatives undertaken today emphasize that Genta remains a multi-product
company with special expertise in the broad development of oncology-focused
therapeutics", said Dr. Raymond P. Warrell, Jr., Genta's Chief Executive
Officer. "If the survival analysis from AGENDA yields a promising result, we
retain a near-term approval opportunity. By redirecting other Genasense(R)
expenses, and pending adequacy of continued funding, Genta plans to accelerate
progress on our pipeline products, with a particular focus on tesetaxel in
advanced cancer and oral gallium compounds for accelerated bone loss."
Tesetaxel: A Novel Oral Targeted Tubulin Inhibitor
The initial Genta-sponsored trial of tesetaxel will conclude enrollment this
month. A dose for extended study using a once-every-3-weeks schedule has been
determined. Clinical activity in heavily pre-treated patients with various types
of cancer has been observed in this study; some of these patients had previously
failed therapy with other taxanes. We expect that these data will be submitted
for presentation to the June 2010 annual meeting of the American Society of
Clinical Oncology (ASCO).
Pending FDA agreement, The Company plans to initiate 4 new clinical trials with
tesetaxel, as follows:
-- Dose-ranging study of a new once-weekly treatment schedule;
-- Phase 2b trial in 2nd-line gastric cancer. Prior to initiating a Phase 3
trial, the Company will seek to confirm the 20% response rate previously
reported for tesetaxel in these patients and will use these aggregate data to
secure a Special Protocol Assessment (SPA) from FDA;
-- Phase 2a trial as 1st-line treatment in castrate-resistant prostate cancer;
-- Phase 2a trial in 2nd-line melanoma.
Initial studies are also planned in breast and bladder cancer. In breast cancer,
the Company plans to seek confirmation of the 38% response rate previously
reported for tesetaxel in women after 2nd-line and 3rd-line treatment.
For the expected new trials, the Company has undertaken the purchase of
additional clinical supplies of tesetaxel sufficient to complete all
contemplated studies, including those that may involve a potential partner. The
Company is developing a new supply chain for the manufacturing of both active
pharmaceutical ingredient (API) as well as finished capsules with several
high-quality suppliers.
The Company is continuing its discussions with potential licensing and
development partners for tesetaxel.
Oral Gallium Compounds: Potential Treatments for Accelerated Bone Loss
Genta has completed its initial trial with an oral proprietary compound based on
the active ingredient in the Company's marketed product, Ganite(R). The active
ingredient has already demonstrated broad clinical activity in a range of
bone-losing disorders. In oncology, these disorders include cancer-related
hypercalcemia that is resistant to hydration, as well as complications of cancer
that has spread to bone (bone metastases). Non-oncology disorders include
osteoporosis and Paget's disease of bone.
The initial clinical trial demonstrated that the oral proprietary compound
achieves blood levels that are sufficient for chronic low-dose administration,
which is the focus of both the major cancer and non-cancer indications. Genta
plans further studies to validate the formulations of its oral proprietary
compounds in order to expedite clinical development. We expect to provide
details of this program in the First Quarter 2010.
Genta has received two new U.S. patents this year for our oral
gallium-containing compounds, and the Company has recently filed two new
worldwide patent applications. Genta will continue to maintain its ex-U.S.
"named-patient" programs for both Genasense and Ganite.
Financial Information
For the third quarter of 2009, the Company reported a net loss of $20.4 million
or $(0.15) per share, compared with net income of $212.6 million, or $289.23 per
basic share and $5.12 per diluted share, for the third quarter of 2008. For the
nine months ended September 30, 2009, the Company reported a net loss of $74.6
million, or $(0.98) per share, compared with a net loss of $535.4 million, or
($748.55) per share, for the nine months ended September 30, 2008. All share and
per share data included in this press release have been retroactively adjusted
to account for the effect of a 1-for-50 reverse stock split for all periods
presented prior to June 26, 2009. Net product sales of $49,000 and $180,000 for
the three and nine months ended September 30, 2009 declined from their
comparison period figures of $115,000 and $363,000, respectively, due to the
continued absence of promotional support.
Research and development expenses were $5.9 million for the third quarter of
2009, compared with $5.3 million for the third quarter of 2008. During 2009,
with the establishment of the 2009 Stock Incentive Plan and implementation of
two Equity Award Exchange programs, outstanding stock option awards granted
under the 1998 Stock Incentive Plan, were exchanged for grants of new restricted
stock units (RSUs). Incremental compensation cost for the new RSUs was measured
as the excess of the fair value of the RSUs over the fair value of the stock
option awards on the date of the exchange and the incremental compensation cost
of the RSUs is being recognized over the remaining amortization period of the
exchanged stock option awards. Share-based compensation expense recognized for
the three months ended September 30, 2009 and 2008 was $2.9 million and $35
thousand, respectively, for those employees categorized as research and
development. Partially offsetting this increase was lower expenses on the AGENDA
clinical trial and lower payroll costs, resulting from lower headcount. Research
and development expenses were $11.8 million for the nine months ended September
30, 2009, compared with $16.1 million for the nine months ended September 30,
2008. Share-based compensation expense recognized for the nine months ended
September 30, 2009 and 2008 was $2.9 million and $0.1 million, respectively, for
those employees categorized as research and development. The increase in
share-based compensation expense was more than offset by lower expenses on the
AGENDA clinical trial and lower payroll costs, resulting from lower headcount.
Selling, general and administrative expenses were $8.9 million for the third
quarter of 2009, compared with $2.3 million for the third quarter of 2008.
Share-based compensation expense recognized for the three months ended September
30, 2009 and 2008 was $6.6 million and $0.1 million, respectively. Selling,
general and administrative expenses were $13.0 million for the nine months ended
September 30, 2009, compared with $8.5 million for the prior-year period.
Share-based compensation expense recognized for the nine months ended September
30, 2009 and 2008 was $6.7 million and $0.3 million, respectively. The increase
in share-based compensation was partially offset by lower payroll costs and
lower office rent of $0.8 million, resulting from the termination of a lease for
one floor of office space in May 2008.
The Company issued convertible notes and warrants in June 2008 and in April 2009
and the Company issued shares of common stock, convertible notes and warrants in
July 2009 and September 2009. These transactions resulted in the amortization of
deferred financing costs and debt discount of $5.5 million and $3.6 million for
the three months ended September 30, 2009 and 2008, respectively, and $22.4
million and $4.4 million for the nine months ended September 30, 2009 and 2008,
respectively.
At the time of the financings in June 2008 and in April 2009, there were an
insufficient number of authorized shares of common stock in order to permit
conversion of all of the notes and warrants. Accordingly, the conversion
obligation for the notes and warrants were classified as liabilities and
measured at fair value on the balance sheet. The liabilities were then
marked-to-market up until the dates that Company's stockholders approved changes
in the corporate structure, resulting in income of $224.4 million for the third
quarter of 2008 and expense of $26.7 million and $502.8 million for the nine
months ended September 30, 2009 and 2008, respectively.
At September 30, 2009, Genta had cash and cash equivalents totaling $7.4 million
compared with $4.9 million at December 31, 2008. During the nine months of 2009,
cash used in operating activities was $15.1 million compared with $22.0 million
for the same period in 2008, reflecting the reduced size of the Company.
Teleconference
Genta management will host a conference call and live audio webcast to discuss
financial results and recent corporate activities at 8:00 am ET. Participants
can access the live call by dialing (877) 634-8606 (U.S. and Canada) or (973)
200-3973 (International). The access code for the live call is Genta
Incorporated. The call will also be webcast live at
http:www.genta.com/investorrelation/events.html
For investors unable to participate in the live call, a replay will be available
approximately two hours after the completion of the call, and will be archived
for 30 days. Access numbers for this replay are: (800) 642-1687 (U.S. and
Canada) and (706) 645-9291 (International); conference ID number is: 37594914.
About Genta
Genta Incorporated is a biopharmaceutical company with a diversified product
portfolio that is focused on delivering innovative products for the treatment of
patients with cancer. Two major programs anchor the Company's research platform:
DNA/RNA-based Medicines and Small Molecules. Genasense(R) (oblimersen sodium)
Injection is the Company's lead compound from its DNA/RNA Medicines program.
Genasense is being developed as an agent that may enhance the effectiveness of
current anticancer therapy. The leading drug in Genta's Small Molecule program
is Ganite(R) (gallium nitrate injection), which the Company is exclusively
marketing in the U.S. for treatment of symptomatic patients with cancer related
hypercalcemia that is resistant to hydration. The Company has developed oral
formulations of the active ingredient in Ganite, which have completed
preliminary clinical trials, as a potential treatment for diseases associated
with accelerated bone loss. The Company is developing tesetaxel, a novel, orally
absorbed, semi-synthetic taxane that is in the same class of drugs as paclitaxel
and docetaxel. Genta intends to evaluate the clinical activity of tesetaxel in a
range of human cancers. Ganite and Genasense are available on a "named-patient"
basis in countries outside the United States. For more information about Genta,
please visit our website at: www.genta.com.
Safe Harbor
This press release may contain forward-looking statements with respect to
business conducted by Genta Incorporated. By their nature, forward-looking
statements and forecasts involve risks and uncertainties because they relate to
events and depend on circumstances that will occur in the future. Such
forward-looking statements include those that express plan, anticipation,
intent, contingency, goals, targets, or future developments and/or otherwise are
not statements of historical fact. The words "potentially", "anticipate",
"could", "calls for", and similar expressions also identify forward-looking
statements. The Company does not undertake to update any forward-looking
statements. Factors that could affect actual results include, without
limitation, risks associated with:
-- the Company's ability to obtain necessary regulatory approval for its product
candidates from regulatory agencies, such as the U.S. Food and Drug
Administration and the European Medicines Agency;
-- the safety and efficacy of the Company's products or product candidates;
-- the commencement and completion of any clinical trials;
-- the Company's assessment of its clinical trials;
-- the Company's ability to develop, manufacture, license, or sell its products
or product candidates;
-- the Company's ability to enter into and successfully execute any license and
collaborative agreements;
-- the adequacy of the Company's capital resources and cash flow projections,
the Company's ability to obtain sufficient financing to maintain the Company's
planned operations, the Company's ability to obtain sufficient financing to fund
the AGENDA trial, or the Company's risk of bankruptcy;
-- the adequacy of the Company's patents and proprietary rights;
-- the impact of litigation that has been brought against the Company; and
-- the other risks described under Certain Risks and Uncertainties Related to
the Company's Business, as contained in the Company's Annual Report on Form 10-K
and Quarterly Report on Form 10-Q.
There are a number of factors that could cause actual results and developments
to differ materially. For a discussion of those risks and uncertainties, please
see the Company's Annual Report on Form 10-K for 2008 and its most recent
quarterly report on Form 10-Q.
Genta Incorporated
Selected Condensed Consolidated Financial Data
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008
Product sales - net $ 49 $ 115 $ 180 $ 363
Cost of goods sold 10 26 12 79
Gross margin 39 89 168 284
Operating expenses:
Research and development 5,874 5,255 11,846 16,146
Selling, general and administrative 8,869 2,308 13,008 8,534
Settlement of office lease obligation - - - 3,307
Reduction in liability for settlement of litigation - - - (340 )
Total operating expenses 14,743 7,563 24,854 27,647
Amortization of deferred financing costs and debt discount (5,450 ) (3,600 ) (22,362 ) (4,441 )
Fair value - conversion feature liability - 220,000 (19,040 ) (500,000 )
Fair value - warrant liability - 4,400 (7,655 ) (2,800 )
All other expense, net (277 ) (713 ) (837 ) (804 )
Net (loss)/income $ (20,431 ) $ 212,613 $ (74,580 ) $ (535,408 )
Net (loss)/income per basic share $ (0.15 ) $ 289.23 $ (0.98 ) $ (748.55 )
Net (loss)/income per diluted share $ (0.15 ) $ 5.12 $ (0.98 ) $ (748.55 )
Weighted average shares- basic 139,349 735 75,850 715
Weighted average shares- diluted 139,349 41,524 75,850 715
Selected Condensed Consolidated Balance Sheet Data
September 30 December 31
2009
Unaudited 2008
Cash and cash equivalents $ 7,383 $ 4,908
Working capital deficiency (4,010 ) (5,220 )
Total assets 18,853 12,693
Total stockholders' equity/(deficit) 3,494 (4,864 )
SOURCE: Genta Incorporated
CONTACT:
Genta Investor Relations
908-286-3980
info@genta.com
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