Replies to post #22341 on Biotech Values

[rfj1862]

GNT

I may be speaking out of turn because I haven't looked at the data yet, but this strikes me as a particularly bizarre MOA.

>Defibrotide is a single-stranded DNA that protects the vascular endothelial cells, particularly those of small vessels, from damage and activation. After binding to endothelial cells, Defibrotide decreases cell adhesion and pro-coagulant activity of activated endothelial cells, and increases the fibrinolytic potential of endothelial cells. Defibrotide's effects are predominately local within the vascular bed, and there is no significant effect on systemic coagulation. Its beneficial pharmacological effects are due to its anti-thrombotic, anti-inflammatory and anti-ischemic properties.<

Is this just plain ol' ssDNA? Is it a particular sequence? Or perhaps a specific percentage mix of the various bases? Does it have a tertiary structure that allows it to actually activate/inactivate something, or does it passively coat and protect? What protects it from exo- and endonucleases? Naked ssDNA would be chewed apart ASAP if injected. Given that DNA is negatively charged, and the surface charge of RBCs changes with age and disease state, in some cases it might be actively repelled.

Anyway...

One positive: ultra-cheap to make.

John

[rkrw]

Not mine :-) I own gnt.

[DewDiligence]

Gentium Reports 2Q06 Results

http://biz.yahoo.com/bw/060815/20060815005614.html?.v=1

>>
Tuesday August 15, 10:08 am ET

VILLA GUARDIA (COMO), Italy--(BUSINESS WIRE)--Aug. 15, 2006--Gentium S.p.A. (NASDAQ: GENT ; the "Company") today reported financial results for the three and six months ended June 30, 2006. Highlights of the second quarter of 2006 and recent weeks include:

• Raised $22.1 million (gross proceeds) in a follow-on equity offering led by ThinkEquity Partners, LLC;
• Listed the Company's American Depository Shares (ADS) on the NASDAQ National Market System (now the NASDAQ Global Market);
• Highlighted Defibrotide at a Symposium at the XXII World Congress of the International Union of Angiology;
• Publication of two independent pediatric studies of Defibrotide;
• Strengthened U.S. presence with appointment of New York-based CFO, Gary Gemignani;
• Phase III clinical trial in the U.S. for treatment of Veno-Occlusive Disease (VOD) with Multiple Organ Failure (Severe VOD): commenced enrollment; expected to be conducted at approximately 30 clinical centers; Institutional Review Board (IRB) approval has been received from 10 centers and four are open for patient enrollment;
• Phase II/III clinical trials in Europe for the prevention of VOD in children: 30 centers have IRB approval and 20 centers are open for patient enrollment; 30 patients have been enrolled;
• Independent Phase I/II study of Defibrotide to treat advanced and refractory Multiple Myeloma patients: 4 centers have IRB approval; 14 patients have been enrolled;
• Phase II/III clinical trials in Europe for the prevention of VOD in adults: investigator's meeting was held in Hamburg (Germany) on March 22, 2006; anticipate initiation of these studies by the fourth quarter of 2006; and
• In August Axcan Pharmaceuticals Inc ("Axcan") announced it was not filing for regulatory approval for mesalazine in the U.S. and Canadian markets, the rights of which the Company sold to Axcan in 2002; under the terms of the agreement the Company would have been entitled to receive future milestone payments and a royalty stream; Axcan's decision had no impact on the Company's current period financial statements and the Company does not believe that this will have a material effect on its future operating results.

Clinical Highlights and Outlook

Commenting on Gentium's clinical progress during the quarter, Laura Ferro, M.D., Chairman and Chief Executive Officer, said, "Throughout the second quarter of 2006 we made considerable progress on both the clinical and corporate fronts. The clinical potential for Defibrotide continues to gain increased recognition within the scientific and medical communities as evidenced by the full-day symposium held at the World Congress of the International Union of Angiology. These comprehensive discussions provided further elucidation of Defibrotide's mechanism of action and its potential for other indications. and highlighted Defibrotide's potential therapeutic value. During the quarter there were two peer-reviewed publications from two independent pediatric studies of Defibrotide to treat and prevent Severe VOD, which were very encouraging and underscored the potential of Defibrotide in treating these very sick pediatric patients."

Dr. Ferro continued, "Our clinical development programs are advancing, specifically with the initiation of patient enrollment in our U.S. pivotal Phase III trial of Defibrotide to treat Severe VOD. We have secured IRB approvals at a number of key clinical sites and four of 30 clinical sites have begun enrolling patients. We expect to remain on track to complete patient enrollment in this trial during the first half of 2007.

"During the quarter we were pleased to achieve a number of important corporate milestones. We strengthened our management team as well as our U.S. corporate presence with the addition of Gary Gemignani as our Chief Financial Officer in New York. As our clinical development and business activities increase, we believe that adding more executives in the U.S. will add to our ability to meet the development timetable we have established. We strengthened our balance sheet by raising $22.1 million in gross proceeds, which allows us to support our clinical development programs and gives us the capital to negotiate new drug development and licensing agreements from a position of strength," concluded Dr. Ferro.

Financial Highlights

The Company reports its financial condition and operating results using U.S. Generally Accepted Accounting Principles (GAAP). The Company's financial statements are prepared using the Euro as its functional currency. On June 30, 2006, EUR 1.00 = $1.27.

For the second quarter ended June 30, 2006 compared with the prior-year's second quarter:

• Total revenues were EUR 1.15 million, compared with EUR 1.17 million
• Operating costs and expenses were EUR 4.41 million, compared with EUR 2.89 million
• Research and development expenses, which are included in operating costs and expenses, were EUR 1.98 million, compared with EUR 1.08 million
• Operating loss was EUR 3.26 million, compared with EUR 1.73 million
• Interest income (expense), net, was EUR 0.09 million, compared with (EUR 2.1) million
• Pre-tax loss was EUR 3.23 million, compared with EUR 4.29 million
• Net loss was EUR 3.23 million, compared with EUR 4.30 million
• Basic and diluted net loss per share was EUR 0.32 compared with EUR 0.81 per share

For the six months ended June 30, 2006 compared with the comparable prior-year period:

• Total revenues were EUR 2.10 million, compared with EUR 1.83 million
• Operating costs and expenses were EUR 8.35 million, compared with EUR 4.75 million
• Research and development expenses, which are included in operating costs and expenses, were EUR 3.60 million, compared with EUR 1.73 million
• Operating loss was EUR 6.25 million, compared with EUR 2.92 million
• Interest income (expense), net, was EUR 0.14 million, compared with (EUR 4.25) million
• Pre-tax loss was EUR 6.34 million, compared with EUR 7.68 million
• Net loss was EUR 6.34 million, compared with EUR 7.71 million
• Basic and diluted net loss per share was EUR 0.64 compared with EUR 1.50 per share
• Cash used in operating activities was EUR 4.87 million, compared with EUR 3.52 million
• Cash and cash equivalents amounted to EUR 24.82 million [#31.7M] as of June 30, 2006

Dr. Ferro commented, "Our increased spending on our clinical development programs, and the commensurate increase in staffing, will contribute to increasing losses for the balance of this year and next year. Our general and administrative expenses have more than doubled, with much of the increased expense a result of the costs of being a public company. Our 2006 results will also reflect a significant decline in interest expense due to the repayment and redemption of our Series A notes in June 2005 in conjunction with our initial public offering."

Operating Results and Trends

The fluctuation in total product sales for the three- and six-month periods compared with the prior year is primarily the result of changes in demand by our principal customer, Sirton, and by increased demand for sulglicotide by our Korean customer. Total product sales for the six-month period ended June 30, 2006 increased by EUR 0.27 million, or 16%, compared with the same period in 2005.

Cost of goods sold was EUR 1.62 million for the six-month period ended June 30, 2006, which included a EUR 152 thousand inventory reserve attributable to slow-moving inventory, compared with cost of goods sold of EUR 1.50 million for the comparable period in 2005. Cost of goods sold as a percent of product sales decreased from 89% to 82%. The decrease is primarily due to a revision in the estimated useful life of certain manufacturing equipment resulting in a reduction in depreciation expense, offset to some extent by increased quality control costs.

Research and development spending increased during the three- and six-month periods in 2006 compared with 2005, primarily due to the costs associated with the Company's Phase III trial in the U.S. for the treatment of Severe VOD, the Company's Phase II/III trial for prevention of VOD in children and preparations for the Phase II/III trial for the prevention of VOD in adults. Growth in headcount and outside services to support increased activity in our clinical trials including clinical product production costs and stock-based compensation expense also contributed to increased research and development expenses.

The Company had 69 employees as of June 30, 2006, compared with 52 as of June 30, 2005. Other general and administrative expense increases were primarily the result of building corporate infrastructure, legal and public company expenses, an increase in internally provided administrative services to replace administrative services previously provided by affiliates, and stock-based compensation expense. The increase in internally provided services accounts for the decrease in charges from affiliates between the periods.

Interest income (expense), net, changed primarily due to the repayment and conversion of the Company's Series A senior convertible notes in June 2005, and the higher level of invested funds compared with the prior year. For the six months ended June 30, 2005, interest expense on the Series A notes was EUR 4.1 million, including non-cash interest expense of EUR 3.8 million from the amortization of the issue discount and debt issue cost. These notes were converted or redeemed in June 2005. Additionally, interest income increased by EUR 200 thousand from EUR 11 thousand in the period ended June 30, 2005 to EUR 211 thousand in the comparable 2006 period, as the result of a higher level of invested funds.

The Company ended the second quarter of 2006 with EUR 24.8 million in cash and cash equivalents, compared with cash and cash equivalents of EUR 12.8 million as of December 31, 2005.

About Gentium

Gentium, S.p.A., located in Como, Italy, is a biopharmaceutical company focused on the research, discovery and development of drugs to treat and prevent a variety of vascular diseases and conditions related to cancer and cancer treatments. Defibrotide, the Company's lead product candidate, is an investigational drug that has been granted Orphan Drug status and Fast Track Designation by the U.S. FDA to treat Severe VOD and Orphan Medicinal Product Designation by the European Commission both to treat and to prevent VOD.
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