Antigenics Reports Third Quarter 2009 Financial Results

October 29, 2009 7:00 AM EDT

Conference Call Scheduled for Today at 11:00 a.m. Eastern Time

LEXINGTON, Mass.--(BUSINESS WIRE)-- Antigenics Inc. (NASDAQ: AGEN) reported today its results for the quarter ended September 30, 2009. The company incurred a net loss attributable to common stockholders of $10.8 million, or $0.13 per share, basic and diluted, for the third quarter of 2009, compared with a net loss attributable to common stockholders in the third quarter of 2008 of $11.4 million, or $0.17 per share, basic and diluted. For the nine months ended September 30, 2009, the company incurred a net loss attributable to common stockholders of $32.8 million, or $0.43 per share, basic and diluted, compared with a net loss attributable to common stockholders of $35.5 million, or $0.57 per share, basic and diluted, for the comparable period in 2008. The company's net cash burn (cash used in operating activities plus capital expenditures and dividend payments) for the three months ended September 30, 2009 and 2008 was $5.8 million and $8.2 million, respectively. The company's net cash burn for the nine months ended September 30, 2009 and 2008 was $21.3 million and $24.4 million, respectively. The 2009 net cash burn primarily reflects the company's efforts to support Oncophage in Russia, Europe, and other territories, while also executing cost containment efforts. Cash, cash equivalents and short-term investments amounted to $34.0 million as of September 30, 2009.

Third Quarter 2009 Corporate Update

    --  The Committee for Medicinal Products for Human Use (CHMP) of the
        European Medicines Agency advised the company at an oral meeting to
        anticipate a negative opinion on the marketing authorization application
        for Oncophage(R) (vitespen) in early-stage, localized renal cell
        carcinoma (RCC), or kidney cancer. Antigenics is currently evaluating
        its options to determine the best path forward.
    --  The Brain Tumor Research Center at the University of California, San
        Francisco (UCSF), initiated a new Phase 2 clinical trial of Oncophage in
        combination with the standard of care - radiation therapy plus Temodar
        (R) (temozolomide) - for newly diagnosed glioma patients. The
        investigator-sponsored study will evaluate median overall survival,
        progression-free survival and immunologic response.
    --  Data from an ongoing Phase 2 clinical trial that is testing Oncophage in
        recurrent glioma patients was recently presented at the Society of
        Neuro-Oncology meeting. Results reported in the first 20 patients
        treated with Oncophage show a median survival of 10.1 months, and to
        date six patients (30 percent) have survived at or beyond 12 months.
        These early data show an improvement in overall survival over the
        previous long-standing historical median survival of 6.5 months, which
        is also slightly favorable to the recently reported median survival of
        9.2 months1 with Avastin(R)(bevacizumab) in patients with recurrent
        high-grade glioma.
    --  Pre-launch activities for Oncophage in intermediate-risk RCC in Russia
        continue, as the company explores potential government reimbursement.
        Antigenics is also exploring the possibility of making Oncophage
        available to patients in various territories through named patient and
        similar programs.
    --  Antigenics signed an amended and restated license agreement for use of
        the QS-21 adjuvant in ACC-001, a Phase 2 vaccine under development by
        JANSSEN Alzheimer Immunotherapy, which recently acquired Elan's
        Alzheimer's Immunotherapy Program. They will now have the right to
        manufacture QS-21 for this indication, and the agreement calls for
        upfront and milestone payments to Antigenics, as well as royalties for
        at least 10 years after first commercial sale.
    --  Four vaccines containing QS-21 under development by partners such as
        GlaxoSmithKline are currently being tested in Phase 3 clinical trials,
        with eight in Phase 2, three in Phase 1, and several in preclinical
        development. Antigenics is generally entitled to receive milestones as
        products advance in development as well as royalties for at least 10
        years after commercial launch with minimal associated expense.
    --  In August, Antigenics raised $20 million through two separate private
        placements of common stock and warrants to various institutional
        investors. Net proceeds to the company were nearly $18.6 million. At the
        company's current net cash burn rate, it has sufficient funds to sustain
        operations into 2011.
    --  In the third quarter of 2009, Antigenics further reduced its debt
        balance through the exchange of 424,330 common shares for approximately
        $1.3 million in face value of its 2005 convertible notes. This resulted
        in a net gain of approximately $167,000 for the quarter ended September
        30, 2009. The total amount of debt extinguished to date is expected to
        result in annualized savings of $1.6 million in cash interest.

Conference Call Information

Antigenics executives will host a conference call at 11:00 a.m. Eastern Time today. To access the live call, dial (877) 762-5772 (domestic) or (706) 643-6986 (international); the access code is 37318218. The call will also be webcast and will be accessible from the company's website at www.antigenics.com/webcast/. A replay will be available approximately two hours after the call through midnight Eastern Time on November 12, 2009. The replay number is (800) 642-1687 (domestic) or (706) 645-9291 (international), and the access code is 37318218. The replay will also be available on the company's website approximately two hours after the live call.

About Antigenics

Antigenics is a biotechnology company working to develop treatments for cancers and infectious diseases. For more information, please visit www.antigenics.com.

This earnings release contains forward-looking statements, including statements regarding anticipated regulatory decisions and strategies; development and commercialization efforts and clinical trial activities of the company and its licensees and collaborators; and the cash position of the company. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, among others, decisions by regulatory authorities, physicians patients, and our licensees and collaborators; the possibility that clinical trial results will not be as favorable; the inability to secure local distributors and payment mechanisms in Russia or any other jurisdiction in which Antigenics may obtain product approval; the ability to raise capital and finance future activities; Antigenics' dependence on its collaborative partners to successfully develop and commercialize products; and the factors described under the Risk Factors Section of our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission for the period ended June 30, 2009. Antigenics cautions investors not to place considerable reliance on the forward-looking statements contained in this release. These statements speak only as of the date of this document, and Antigenics undertakes no obligation to update or revise the statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Antigenics' business is subject to substantial risks and uncertainties, including those identified above. When evaluating Antigenics' business and securities, investors should give careful consideration to these risks and uncertainties.

1 Friedman HS, Prados MD, Wen PY, et al. Bevacizumab alone and in combination with irinotecan in recurrent glioblastoma. Journal of Clinical Oncology 2009; 27:4733-4740.

Summary Consolidated Financial Information

Condensed Consolidated Statements of Operations Data

(in thousands, except per share data)

(unaudited)

                Three months ended September 30,  Nine months ended September
                                                  30,

                  2009           2008               2009         2008

                               (as adjusted)                   (as adjusted)

Revenue         $ 896          $ 685              $ 2,787      $ 2,130

Operating
expenses:

Research and      3,747          5,396              13,680       16,965
development

General and       3,515          5,132              11,589       16,142
administrative

Operating loss    (6,366  )      (9,843  )          (22,482 )    (30,977 )

Other expense,    4,246          1,401              9,695        3,899
net

Net loss          (10,612 )      (11,244 )          (32,177 )    (34,876 )

Dividends on
Series A
convertible       (198    )      (198    )          (593    )    (593    )
preferred
stock

Net loss
attributable    $ (10,810 )    $ (11,442 )        $ (32,770 )  $ (35,469 )
to common
stockholders

Per common
share data,
basic and
diluted:

Net loss
attributable    $ (0.13   )    $ (0.17   )        $ (0.43   )  $ (0.57   )
to common
stockholders

Weighted
average number
of common
shares            85,802         66,209             75,335       62,195
outstanding,
basic and
diluted

Condensed Consolidated Balance Sheet Data

(in thousands)

(unaudited)

                September 30,  December 31, 2008
                2009

                               (as adjusted)

Cash, cash
equivalents,    $ 34,008       $ 34,463
and short-term
investments

Total assets      51,350         56,822

Total
stockholders'     (18,910 )      (20,330 )
deficit

Note - The results for the three and nine months ended September 30, 2008
have been retrospectively adjusted to reflect
the company's adoption on January 1, 2009 of FASB ASC 470-20, Debt, Debt with
Conversion and Other Options, resulting in
additional non-cash interest expense of $313,000 and $919,000 respectively.
During the three and nine months ended
September 30, 2009, the company recognized non-cash interest expenses of
$117,000 and $502,000 respectively related to
FASB ASC 470-20. On January 1, 2009, the company also adopted the provisions
of FASB ASC 815-40, Derivatives and
Hedging, Contracts in an Entity's Own Equity. Accordingly, the company
reclassified $2,713,000 from long-term debt to
derivative liabilities and the cumulative effect of the change in accounting
principle in the amount of $716,000 was
recognized as an adjustment to the opening balance of stockholders' deficit.

    Source: Antigenics Inc.

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