OncoGenex first quarter revenue decreases to $1.2 million

OncoGenex Pharmaceuticals, Inc. (NASDAQ: OGXI) today announced its first quarter financial results and provided an update on current events and activities.

Key OncoGenex Activities

• Currently enrolling the Phase 3 clinical trial referred to as SYNERGY, to be conducted in approximately 123 cancer centers to evaluate a survival benefit for custirsen in combination with first-line docetaxel treatment in approximately 800 patients with CRPC.
• Enrollment continues for the Phase 3 Prostate Cancer SATURN trial to evaluate a durable pain palliation benefit for custirsen in combination with docetaxel retreatment as second-line chemotherapy. The study will enroll approximately 300 patients with castration-resistant prostate cancer (CRPC).
  
  
  • OncoGenex has submitted to the FDA a revision to the approved Special Protocol Assessment (SPA), to expand the inclusion criteria for the SATURN trial. The proposed revision would permit participants to receive either docetaxel re-treatment or cabazitaxel as chemotherapy in the clinical study. The study design would remain the same in that all patients would be randomized to receive custirsen or placebo in conjunction with chemotherapy. In addition, the pain palliation endpoints remain unchanged.
• Recent and upcoming data presentations at scientific meetings such as the American Association of Cancer Research, the Society of Urologic Oncology and the American Urological Association, provide new pre-clinical evidence and enhance the understanding of OncoGenex' product candidates, custirsen and OGX-427.
• Two additional trials scheduled to commence this year; a Phase 3 clinical trial to evaluate a survival benefit for custirsen in combination with first-line chemotherapy in patients with non-small cell lung cancer (NSCLC) and a Phase 2 clinical trial of OGX-427 in approximately 180 patients with metastatic bladder cancer.

"We recognize the prostate cancer landscape is evolving rapidly and the approval of new treatments is encouraging news for patients," said Scott Cormack, president and CEO of OncoGenex. "The proposed revision to the SATURN trial will help ensure custirsen remains aligned with currently approved chemotherapy."

Financial Results

Revenue for the first quarter of 2011 decreased to $1.2 million, compared with $4.7 million for the first quarter of 2010. This decrease was due to lower reimbursement revenue earned through our strategic collaboration with Teva resulting from manufacturing costs now being paid directly by Teva, as well as lower costs associated with clinical trials.

At March 31, 2011, $21.0 million of the $30.0 million upfront payment received from Teva in December 2009 was included in our Balance Sheet as Deferred Collaboration Revenue, which we are amortizing over the expected performance period of our deliverables under the agreement. We currently expect this performance period to end in the fourth quarter of 2012.

Total operating expenses for the first quarter of 2011 decreased to $6.4 million, compared with $7.7 million for the first quarter of 2010. The decrease in operating expenses was primarily due to lower custirsen manufacturing costs, as these costs are now being paid directly by Teva, and lower clinical trial costs associated with the custirsen phase 3 clinical trials, offset by higher manufacturing and clinical trial costs for OGX-427 in 2011.

Loss from operations for the first quarter of 2011 increased to $5.2 million, compared to $3.0 million for the first quarter of 2010. The increased loss from operations was primarily due to lower revenue earned through our strategic collaboration with Teva and higher manufacturing and clinical trial costs for OGX-427.

Net loss for the first quarter of 2011 was $3.0 million, or $0.31 per diluted common share, compared to $3.0 million, or $0.48 per diluted common share, for the first quarter of 2010. The lower net loss as compared to loss from operations was due to a $2.1 million non-cash gain on the revaluation of our warrant liability as at March 31, 2011 which was included in other income. These warrants were issued as part of the public offering completed in October of 2010, and there was no comparable gain or loss in the first quarter of 2010.

We had $81.1 million in cash, cash equivalents and short-term investments as of March 31, 2011, compared to $85.1 million as of December 31, 2010. As at May 9, 2011, we had 9,718,251 shares outstanding.