Oncothyreon 2010 net loss decreases to 15.6 million

Oncothyreon Inc. (NASDAQ: ONTY) (the "Company") today reported financial results for the year and quarter ending December 31, 2010. 

Net loss for the year ended December 31, 2010 was $15.6 million, or $0.58 per basic and diluted share, compared with net loss of $17.2 million, or $0.76 per basic and diluted share for the year ended December 31, 2009.  The decrease in net loss was the result of $3.0 million non-cash income from the change in fair value of warrant liability for the year ended December 31, 2010 versus a $6.2 million non-cash expense for the year ended December 31, 2009, partially offset by an increase in operating expenses to $19.5 million in 2010 from $12.9 million in 2009 and a decrease in revenue to $18,000 for the year ended December 31, 2010 from $2.1 million for the year ended December 31, 2009.

The decrease in revenue in 2010 compared to 2009 is primarily attributable to the absence of contract manufacturing or licensing revenue in 2010, compared with $2.1 million in 2009.  Licensing revenue in 2009 included a $2.0 million milestone payment from Merck KGaA in the fourth quarter related to the license for Stimuvax®.

The increase in operating expenses to $19.5 million in 2010 from $12.9 million in 2009 is due to a $5.2 million increase in research and development expenses and a $1.2 million increase in general and administrative expenses.   Research and development expenses increased due to the more advanced clinical development of PX-866 and preclinical activities associated with ONT-10.  General and administrative expenses increased to $7.8 million in 2010 from $6.6 million in 2009, primarily as the result of legal, accounting and consulting expenses related to regulatory compliance in the first half of 2010.

Net loss for the quarter ended December 31, 2010 was $6.2 million, or $0.20 per basic and diluted share, compared with net loss of $2.5 million or $0.10 per basic and diluted share for the comparable period in 2009. There was $5,000 of revenue for the fourth quarter of 2010, compared with $2.0 million for the fourth quarter of 2009. Operating expenses for the quarter ended December 31, 2010 were $5.0 million compared with $3.9 million for the quarter ended December 31, 2009 due to the more advanced clinical development of PX-866 and preclinical activities associated with ONT-10. 

As of December 31, 2010, Oncothyreon's cash, cash equivalents and short-term investments were $28.9 million, compared to $33.2 million at the end of 2009, a decrease of $4.3 million, or 13.0 percent. Major contributors to the net change included net proceeds of approximately $13.7 million from the sale of shares of the Company's common stock and warrants to purchase shares of the Company's common stock in 2010, offset by $18.0 million used for operating and capital expenditures.

Financial Guidance

The Company believes the following financial guidance to be correct as of the date provided.  The Company is providing this guidance as a convenience to investors and assumes no obligation to update it.

Expenses in 2011 are expected to be higher when compared to 2010, primarily as a result of the more advanced clinical development of PX-866 and IND-enabling preclinical development activities for ONT-10. The Company currently expects cash used in operations in 2011 to be approximately $23.0 million.  As a result, the Company estimates that its existing cash, cash-equivalents and short-term investments will be sufficient to fund operations for at least the next 12 months.