Inhibitex fourth quarter net loss increases to $7.0 million

Mar 11 2011

Inhibitex, Inc. (NASDAQ:INHX) today announced its financial results for the fourth quarter and year ended December 31, 2010, and provided an update on recent clinical and corporate developments.

"We are very pleased with the progress we have made over the past year in advancing our antiviral pipeline, which culminated in establishing clinical proof of concept for both FV-100, which we are developing to treat shingles, and more recently, INX-189, which we are developing to treat chronic infections caused by hepatitis C virus," stated Russell H. Plumb, President and CEO of Inhibitex, Inc. "Looking ahead in 2011, we expect to complete our Phase 1b trial of INX-189 in the near-term and are developing plans to further evaluate its safety and antiviral activity in a Phase 2 program that we estimate could begin in the third quarter of 2011. Further, over the next several months we anticipate completing our evaluation of the potential clinical and regulatory pathways and commercial opportunities for FV-100, and look forward to determining the possible next steps in its development."

Clinical Development Highlights

• INX-189: Earlier this quarter, the Company announced favorable interim results from a Phase 1b study of INX-189 in HCV genotype 1 patients where INX-189, its nucleotide polymerase inhibitor, demonstrated a clinically meaningful antiviral effect (>1 log₁₀ IU/mL reduction in baseline viral load) in seven days of monotherapy at a relatively low (25mg) once-daily dose.
• FV-100: In December 2010, the Company successfully completed a first-in-patient, Phase 2 clinical trial in shingles patients where a once-daily dose of 400mg FV-100 demonstrated the potential to reduce both the sub-acute pain and the incidence of post herpetic neuralgia (PHN) associated with shingles infections.

Fourth Quarter 2010 Financial Results

As of December 31, 2010, the Company held $19.6 million in cash, cash equivalents and short-term investments.

The Company reported a net loss for the fourth quarter of 2010 of $7.0 million, as compared to a net loss of $4.7 million in the fourth quarter of 2009. The $2.3 million increase in net loss in the fourth quarter of 2010 was primarily the result of higher research and development expense, and to a lesser extent, higher general and administrative expense and lower net interest income, offset in part by an increase in other income. Basic and diluted net loss per share was $0.11 for the fourth quarter of 2010 compared to $0.08 for the fourth quarter of 2009. The increase in net loss per share in the fourth quarter of 2010, as compared to the fourth quarter of 2009, was due to the higher net loss, offset in part by an increase in the weighted average number of shares outstanding.

Research and development expense increased to $6.6 million in the fourth quarter of 2010 from $4.3 million in the fourth quarter of 2009. This $2.3 million increase was primarily due to a $1.7 million increase in direct costs incurred in connection with the initiation of a Phase 1b clinical trial of INX-189 in November of 2010 and to a lesser extent, the completion of a Phase 2 clinical trial of FV-100 in the December of 2010, as well as an increase of $0.6 million in non-direct expenses associated with higher consulting and professional fees and compensation and share-based compensation expense.

General and administrative expense increased to $1.2 million in the fourth quarter of 2010 from $0.7 million in the fourth quarter of 2009. The increase of $0.5 million was primarily the result of an increase in legal and professional fees and compensation and share-based compensation expense.

Other income increased to $0.5 million in the fourth quarter of 2010 from zero in the fourth quarter of 2009 due to the receipt of $0.5 million Therapeutic Tax Credit grant in the fourth quarter of 2010 that was not received in 2009.

Year End 2010 Financial Results

For the year ended December 31, 2010, the Company reported a net loss of $22.7 million, as compared to $17.6 million for 2009. Basic and diluted net loss per share for the year ended December 31, 2010, was $0.37, as compared to $0.38 for 2009. The $5.1 million increase in net loss in 2010 was primarily the result of higher research and development expense associated with a Phase 2 clinical trial of FV-100, the initiation of a Phase 1 clinical program for INX-189 in mid-2010 and an increase in other non-direct research and development costs, as well as higher general and administrative expense and lower net interest income, offset in part by higher revenues from a collaborative license and development agreement and net other income. The slight decrease in net loss per share in 2010 was due to an increase in the weighted average number of shares outstanding, offset by the higher net loss.

Revenue increased to $1.9 million in 2010 from $1.2 million in 2009 due to the receipt of a $0.7 million milestone payment in the first quarter of 2010 that did not occur in 2009.

Research and development expense increased to $21.0 million in 2010 from $15.4 million in 2009, primarily due to a $4.9 million increase in direct costs incurred in connection with a Phase 2 clinical trial of FV-100 that was conducted throughout 2010 and the initiation of a Phase 1 clinical program of INX-189 in mid-2010, as well as an increase of $0.7 million in non-direct expenses associated with higher consulting and professional fees and compensation and share-based compensation expense.

General and administrative expense increased to $4.1 million in 2010 from $3.6 million in 2009. The increase of $0.5 million was primarily the result of an increase in legal and professional fees and compensation and share-based compensation expense incurred in the fourth quarter of 2010.

Other income increased to $0.5 million in 2010 from zero in 2009 due to the receipt of $0.5 million Therapeutic Tax Credit grant in the fourth quarter of 2010 that was not received in 2009.

Recent Corporate Developments

INX-189 for Chronic Hepatitis C - In January 2011, the Company reported favorable preliminary interim safety and antiviral data from the first two monotherapy cohorts of its ongoing Phase 1b clinical trial of INX-189. The Company reported that INX-189, dosed once-daily at 9mg and 25mg for seven days, demonstrated potent antiviral activity with a mean HCV RNA reduction from baseline levels of -0.71 and -1.03 log₁₀ IU/mL, respectively. In addition to the mean reductions in viral load, clinically meaningful decreases in alanine transaminase (ALT) levels were observed for patients receiving INX-189 at both dose levels, and no patients experienced viral breakthrough. There were no serious adverse events reported, no discontinuations due to an adverse event, and no adverse events related to changes in clinical laboratory evaluations. All reported adverse events were mild or moderate and were not dose dependent. In addition, the pharmacokinetics of the 9mg and 25mg doses in HCV-infected patients were comparable to those observed in healthy volunteers.

The Phase 1b trial, which is being conducted under an IND in the United States, is a double-blind, placebo-controlled, dose escalation study designed to evaluate the safety, tolerability, pharmacokinetics and antiviral activity of INX-189, administered orally once-daily for seven days in HCV genotype 1 treatment-naïve patients. Each treatment cohort in the trial is comprised of 10 patients, eight that receive INX-189 and two that receive placebo. In addition to the 9mg and 25mg dose cohorts, the Company will enroll three more INX-189 monotherapy cohorts in the trial, including a recently-added 100mg cohort, as well as two cohorts that will receive 9mg and 25mg of INX-189 once daily for seven days in combination with ribavirin. The Company anticipates completing this ongoing Phase 1b trial around the end of the first quarter of 2011.

In February 2011, the Company reported that the U.S. Food and Drug Administration (FDA) designated the investigation of INX-189 as a Fast Track development program. Fast Track programs are designed to facilitate the development and expedite the review of new drugs that are intended to treat serious or life threatening conditions and that demonstrate the potential to address unmet medical needs.

FV-100 for Shingles - In December 2010, the Company reported top-line safety and efficacy data from its Phase 2 clinical trial of FV-100, an oral antiviral compound being developed to treat shingles, including the reduction of shingles-associated pain and the incidence of PHN. The study included 350 shingles patients and compared two once-daily doses of FV-100 (200mg and 400mg) to valacyclovir, one of the most commonly-used antiviral drugs to treat shingles. Valacyclovir was administered three times per day at 1,000 mg per dose.

Numerically favorable treatment differences were observed for both doses of FV-100 as compared to valacyclovir for the primary endpoint of the study, defined as the reduction in the severity and duration of shingles-associated acute pain over the first 30 days, or the Burden of Illness (BOI_{30 AUC}), although these treatment differences were not statistically significant. There were also numerically favorable treatment differences observed for key secondary pain endpoints, including a 14% relative reduction in the severity and duration of shingles-associated pain over 90 days (BOI_{90 AUC}) and a 39% relative reduction in the incidence of PHN for the 400mg dose of FV-100. The trial was not powered to demonstrate statistically significant treatment differences between the arms with respect to these and other secondary endpoints. FV-100 was generally well tolerated at both dose levels, and demonstrated a similar adverse event profile as compared to valacyclovir. All three treatment arms showed a relatively low proportion of adverse and serious adverse events. The Company is currently performing various analyses of the full Phase 2 data set and an evaluation of various clinical, regulatory and commercial pathways for the potential future development of FV-100, which it anticipates concluding in the first half of 2011.