Avalon Pharmaceuticals Reports Second Quarter 2007 Financial Results
09 August 2007 - 7:18AM
PR Newswire (US)
GERMANTOWN, Md., Aug. 8 /PRNewswire-FirstCall/ -- Avalon
Pharmaceuticals, Inc. (NASDAQ:AVRX) today announced results for the
three and six months ended June 30, 2007. Second quarter 2007
revenues were $0.1 million and net loss was $5.8 million, or $0.40
per share. For the first six months of 2007, revenues were $0.8
million and net loss was $11.2 million, or $0.82 per share. As of
June 30, 2007, the company had $37.9 million in cash, cash
equivalents and marketable securities. "The past three months have
been an exciting and productive time for Avalon," stated Kenneth C.
Carter, Ph.D., President and CEO of Avalon. "We made significant
progress in the AVN944 Phase I clinical trial for hematological
cancers and initiated a Phase II clinical trial in pancreatic
tumors. We also continued to make good progress on our internal
pre-clinical programs and our partnerships with Novartis, ChemDiv
and Merck. In addition, we strengthened our balance sheet with an
equity financing and are pleased to have Eric Winzer join the
company as our new CFO." Recent Highlights -- The AVN944
dose-ranging Phase II (Part A) portion of the clinical trial for
pancreatic cancer was initiated and patient enrollment and dosing
began -- The AVN944 Phase I dose escalation clinical trial
continued for hematological cancer patients as the drug
demonstrated an acceptable safety profile at the doses evaluated to
date -- Data presented on AVN944 at the American Association for
Cancer Research (AACR) 2007 Annual Meeting showed that biomarkers
may be useful for patient stratification -- The screening phase of
the Novartis collaboration was completed -- Development of the High
Throughput Screen (HTS) for the Merck collaboration was initiated
-- Internal programs for Beta catenin and Aurora pathway inhibitors
continued to progress -- Raised $20 million in gross proceeds from
the May 2007 Private Placement of Public Equity (PIPE) financing
transaction -- C. Eric Winzer appointed Chief Financial Officer in
July 2007, bringing over 25 years of broad business and financial
experience Financial Results Revenues for the second quarter of
2007 were $0.1 million, compared with $0.4 million in the second
quarter of 2006. Revenues for the six months ended June 30, 2007
were $0.8 million, compared with $1.0 million in the first six
months of 2006. Revenues in 2007 were from a collaboration with
Novartis Institutes for Biomedical Research, Inc. Revenues in 2006
were from collaborations with MedImmune and the University of
Louisville. Total costs and expenses from operations were $6.1
million in the second quarter of 2007, an increase of $1.0 million
compared with the $5.1 million reported for the second quarter of
2006. Total costs and expenses were $12.4 million for the six
months ended June 30, 2007, compared with $10.5 million in the
comparable period of 2006. The increases in 2007 were principally
due to clinical trial costs related to AVN944, research and
development payroll expenses and laboratory supplies expenses. Net
loss was $5.8 million for the three months ended June 30, 2007
compared with $4.4 million in the comparable three months of 2006.
For the first six months of 2007, net loss was $11.2 million,
compared with $9.0 million in the first six months of 2006. Lower
revenues and higher costs in the 2007 periods resulted in the
higher losses in 2007. Net loss per share applicable to common
shareholders in the second quarter of 2007 was $0.40, compared with
a net loss per share of $0.44 in the second quarter of 2006. For
the six months ended June 30, 2007, net loss per share applicable
to common shareholders was $0.82, compared with a net loss per
share of $0.94 in the first six months of 2006. The per share net
losses decreased in the 2007 periods despite higher net losses as
the weighted average number of shares increased in the 2007 periods
compared with the periods in 2006. The weighted average number of
shares increased in the 2007 periods due to common stock issued by
the company in financing transactions over the past year. As of
June 30, 2007, the company had $37.9 million in cash, cash
equivalents and marketable securities. Of that amount, $4.9 million
was held in a restricted account to serve as collateral for
long-term debt. CONFERENCE CALL & WEBCAST INFORMATION Avalon
Pharmaceuticals' senior management will host a conference call on
Thursday, August 9, 2007 at 8:00 a.m. Eastern Daylight Savings
Time, to discuss the quarterly results and recent business
highlights. Live audio of the conference call will be available to
investors, members of the news media and the general public by
dialing 1-866-770-7129 (in the U.S.) and 617-213- 8067
(internationally), and providing the participant passcode,
95694420. To access the call by live webcast, please visit the
Investor Relations section of our website at
http://www.avalonrx.com/. An archived version of the webcast will
also be available through September 30, 2007 on Avalon's website.
About Avalon Pharmaceuticals Avalon is a biopharmaceutical company
focused on the discovery, development and commercialization of
first-in-class cancer therapeutics. Our lead product candidate,
AVN944, an IMPDH inhibitor, is in Phase II clinical development. We
have late stage preclinical programs to develop inhibitors of the
Beta-catenin and Aurora pathways, discovery programs for inhibitors
of the survivin and Myc pathways and partnerships with Merck,
MedImmune, ChemDiv, Medarex, and Novartis. We use AvalonRx(R), our
proprietary platform which is based on large-scale biomarker
identification and monitoring, to discover and develop therapeutics
for pathways that have historically been characterized as
"undruggable." We are headquartered in Germantown, Maryland.
Forward Looking Statements This announcement contains, in addition
to historical information, certain forward-looking statements that
involve risks and uncertainties, in particular, related to progress
in our drug discovery programs and our collaborations, and clinical
progress in the development of AVN944. Such statements reflect the
current views of Avalon management and are based on certain
assumptions. Actual results could differ materially from those
currently anticipated as a result of a number of factors, risks and
uncertainties including the risk that the discovery programs and
collaborations may not be successful and that AVN944 will not
progress successfully in its clinical trials, and other risks
described in our SEC filings. There can be no assurance that our
development efforts will succeed, that AVN944 will receive required
regulatory clearance or, even if such regulatory clearance is
received, that any subsequent products will ultimately achieve
commercial success. The information in this Release should be read
in conjunction with the Risk Factors set forth in our 2006 Annual
Report on Form 10-K and updates contained in subsequent filings we
make with the SEC. AVALON PHARMACEUTICALS, INC. STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except share and per share
amounts) Three Months Ended Six Months Ended June 30, June 30, 2007
2006 2007 2006 Revenues $78 $417 $809 $956 Costs and expenses:
Research and development 4,066 3,338 8,178 6,487 General and
administrative 2,043 1,795 4,271 4,048 Total costs and expenses
6,109 5,133 12,449 10,535 Loss from operations (6,031) (4,716)
(11,640) (9,579) Total other income 222 287 486 592 Net loss
$(5,809) $(4,429) $(11,154) $(8,987) Net loss attributed to common
stockholders per common share - basic and diluted $(0.40) $(0.44)
$(0.82) $(0.94) Weighted average number of common shares - basic
and diluted 14,672,577 10,100,052 13,547,779 9,557,757 AVALON
PHARMACEUTICALS, INC. BALANCE SHEETS (in thousands) June 30,
December 31, 2007 2006 (Unaudited) ASSETS Cash, cash equivalents
and marketable securities $32,982 $14,910 Restricted cash and
securities 4,898 5,520 Property and equipment, net 8,170 8,923
Other assets, net 1,832 2,038 Total assets $47,882 $31,391
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $5,161
$5,641 Long-term liabilities 6,658 7,876 Total stockholders' equity
36,063 17,874 Total liabilities and stockholders' equity $47,882
$31,391 Contacts: Avalon Pharmaceuticals Russo Partners, LLC C.
Eric Winzer Wendy Lau (Media) Executive Vice President & Tel:
(212) 845-4272 Chief Financial Officer Tel: (301) 556-9900 The
Trout Group Fax: (301) 556-9910 Chad Rubin (Investors) Email: Tel:
(646) 378-2947 DATASOURCE: Avalon Pharmaceuticals, Inc. CONTACT: C.
Eric Winzer, Executive Vice President & Chief Financial Officer
of Avalon Pharmaceuticals, +1-301-556-9900, Fax +1-301-556-9910, ;
Media, Wendy Lau of Russo Partners, LLC, +1-212-845-4272;
Investors, Chad Rubin of The Trout Group, +1-646-378-2947 Web site:
http://www.avalonrx.com/
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