Opexa Therapeutics reports net loss of $1,433,922 for year ended December 31, 2009

Mar 5 2010

Opexa Therapeutics, Inc. (NASDAQ: OPXA), a company developing Tovaxin®, a novel T-cell therapy for multiple sclerosis (MS), today reported financial results for the year ended December 31, 2009 and provided an update on its progress.

“I am pleased with the results and success we demonstrated on a number of fronts this past year despite operating in a very challenging economic climate”

2009 highlights include:

• Closing a Stem Cell agreement with Novartis Pharmaceuticals for an upfront payment of $3 million and potential technology transfer milestone payments totaling another $1 million (with total potential payments from the deal that could exceed $50 million);
• Securing the first milestone payment from Novartis related to the stem cell transaction of $0.5 million;
• Strengthening the management team, including the hiring of a highly qualified Senior VP of Clinical Development & Regulatory Affairs;
• Completing the TERMS Phase IIb clinical study analysis, which demonstrated that Tovaxin is safe and well tolerated with promising efficacy across key clinical endpoints including Annualized Relapse Rate and disability (EDSS);
• Closing two financings: $5.1 million in gross proceeds from a registered direct offering and $1.3 million in gross proceeds from a private placement of secured notes; and
• Presentation of Tovaxin® TERMS Phase IIb clinical data at the American Academy of Neurology (AAN) 61^st annual meeting in Seattle, WA.

“I am pleased with the results and success we demonstrated on a number of fronts this past year despite operating in a very challenging economic climate,” commented Neil K. Warma, President and Chief Executive Officer of Opexa. “The company showed resolve and commitment throughout 2009 and finished the year competitively having strengthened its balance sheet and having positioned Tovaxin as perhaps one of the more promising treatments in development for MS. The pivotal point in the year was the completion of the stem cell transaction with Novartis. This alone contributed an immediate $3 million upfront payment and positioned us as eligible for future clinical and sales milestone payments in addition to future royalties on net sales of products developed from the use of the technology.”

“We finished the year with approximately $8.2 million in cash and cash equivalents which, at the current level of monthly burn of approximately $300,000, provides us with sufficient capital beyond 2010. Our focus over the next 6-12 months will be preparing for Tovaxin’s next clinical study, advancing regulatory and manufacturing activities and continuing our ongoing discussions with potential strategic partners regarding the further development of Tovaxin. Strengthening the Opexa team in 2009 through key internal hires and the addition of world class consultants was an important step in positioning Tovaxin for continued clinical development,” added Mr. Warma.

Year Ended December 31, 2009 Financial Results

Opexa reported no revenues in the year ended December 31, 2009 or in the comparable prior-year period.

Research and development expenses were $2,107,833 for 2009, compared with $8,388,734 for 2008. The decrease in expenses was primarily due to a decrease in activities related to the Phase IIb clinical trial for Tovaxin which was completed in 2008, closing the extension trial, a reduction in staff and a reduction in stock compensation expense.

General and administrative expenses for 2009 were $2,020,572 compared with $3,341,415 for 2008. The decrease in expense is due to a reduction in staff and a decrease in stock compensation expense, overhead expenses, professional service fees and board compensation fees.

Interest expense was $278,127 for 2009, compared with $19,983 for 2008. Interest expense for 2009 was primarily related to accrued interest on the convertible notes, amortized interest on the convertible notes and the (non-cash) amortization of the financing fees over the life of the notes. Interest expense for 2008 was solely related to the equipment line loan payable.

Interest income was $1,764 for 2009, compared with $100,235 for 2008. The decrease was due to the reduction in cash balances that were available for investment in cash equivalent investments and a reduction in interest rates.

Gain on sale of assets was $3 million for the year ended December 31, 2009, compared with $-0- for 2008. The gain is attributable to the sale of our stem cell technology program to Novartis for an upfront payment of $3 million.

Other income for the year ended December 31, 2009 was $554,242, compared with $34,901 for 2008. The increase in other income is primarily attributable to the receipt of an initial $500,000 technology transfer fee milestone payment pursuant to the terms of the stem cell technology acquisition agreement with Novartis.

Opexa reported a net loss for the year ended December 31, 2009 of $1,433,922, or ($0.11) per share, compared with a net loss for the year ended December 31, 2008 of $11,852,152, or ($1.12) per share.

Cash and cash equivalents and investments in marketable securities were $8,181,582 as of December 31, 2009 compared to $1,243,187 as of December 31, 2008.