OncoGenex second quarter revenue increases to $1.9 million

Aug 5 2011

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

Second Quarter 2011 Highlights

• Expected timing of results from the survival primary endpoint for the custirsen SYNERGY Phase 3 clinical trial remains unchanged at Q4 2013.
  • During discussions regarding the SATURN Special Protocol Assessment, or SPA, amendment, FDA stated that an application supported primarily by the results of SYNERGY alone would be acceptable for submission.
• We have revised the custirsen SATURN Phase 3 trial protocol to expand the eligible patient population, and to align with the recently approved chemotherapy, cabazitaxel.
  • We are awaiting final, written FDA agreement on the SPA amendment that will allow patients to receive either docetaxel re-treatment or cabazitaxel as second-line chemotherapy.
  • Recruitment efforts are ongoing to enroll more patients in the SATURN study, which has had few patients accrued due to restrictive enrollment criteria regarding docetaxel retreatment and stable pain criteria. Expected timing of results for the pain palliation primary endpoint is now projected to be Q4 2013 rather than Q2 2013.
• The initiation of the Phase 3 clinical trial evaluating custirsen in patients with non-small cell lung cancer (NSCLC) has been delayed as we determine the optimal chemotherapeutic combination based on safety considerations and the current and evolving standard of care.
  • We believe NSCLC is a promising indication and remain committed to the advancement of custirsen in NSCLC.
• OGX-427
  • Enrollment continues for both the investigator-sponsored, randomized Phase 2 clinical trial evaluating OGX-427 in patients with castrate-resistant prostate cancer, and the investigator-sponsored Phase 1 trial evaluating OGX-427 in patients with superficial bladder cancer. We expect results from both trials in 2012, unchanged from previous guidance.
  • We expect to initiate the randomized Phase 2 clinical trial of OGX-427 in approximately 180 patients with metastatic bladder cancer in the second half of 2011.

Financial Results

• Revenue for the second quarter increased to $1.9 million compared with $1.7 million in 2010. Revenue for the six months ended June 30, 2011 decreased to $3.1 million from $6.4 million in 2010. Revenue is earned through reimbursements received under the Teva collaboration, as well as recognition of upfront payments we received from Teva.  
  • Revenue increased for the second quarter of 2011 due to increased efforts associated with the custirsen Phase 3 clinical trials.
  • Revenue decreased during the six months ended June 30, 2011 due to custirsen manufacturing activities now being paid directly by Teva.
  • As of June 30, 2011, $19.9 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 recognizing as we perform our deliverables under the agreement. We currently expect this performance period to end in the fourth quarter of 2013.
• Total operating expenses for the second quarter increased to $6.9 million from $4.6 million in the second quarter of 2010.  Total operating expenses for the six months ended June 30, 2011 also increased to $13.3 million from $12.3 million during the same period in 2010.
  • The increase in operating expenses was primarily due to higher manufacturing and clinical trial costs for OGX-427, and higher employee expenses, offset by lower custirsen manufacturing costs that are now being paid directly by Teva.
• Net loss for the second quarter of 2011 increased to $6.5 million, or $0.67 per diluted common share, compared to net income of $0.2 million, or $0.02 per diluted common share, in the second quarter of 2010. Net loss for the six months ended June 30, 2011 increased to $9.6 million, or $0.99 per diluted common share, compared to net loss of $2.9 million, or $0.45 per diluted common share, in the same period of 2010.
  • An income tax recovery of $3.0 million was recorded in the second quarter of 2010, in relation to the Collaboration Agreement with Teva.
• We had $75.4 million in cash, cash equivalents and short-term investments as of June 30, 2011, compared to $85.1 million as of December 31, 2010. As at August 1, 2011, we had 9,725,489 shares outstanding.