Inhibitex second quarter net loss decreases to $5.3 million

Aug 8 2011

Inhibitex, Inc. (NASDAQ:INHX); (the "Company") today announced its financial results for the second quarter ended June 30, 2011 and provided an update on several recent clinical and corporate developments.

“We look forward to initiating a Phase 2 clinical trial next week to evaluate the safety, tolerability and antiviral activity of INX-189 administered in combination with standard of care therapy for 12 weeks in HCV-infected genotype 2 and 3 patients”

As of June 30, 2011, the Company held $58 million in cash, cash equivalents and short and long-term investments. The Company reported a net loss in the second quarter of 2011 of $5.3 million or ($0.07) per share.

"We look forward to initiating a Phase 2 clinical trial next week to evaluate the safety, tolerability and antiviral activity of INX-189 administered in combination with standard of care therapy for 12 weeks in HCV-infected genotype 2 and 3 patients," stated Russell H. Plumb, President and CEO of Inhibitex, Inc. "Further, based upon an encouraging commercial assessment and clinical review of our Phase 2a data, we have developed a clinical strategy to advance the development of FV-100 in pursuit of an indication for the reduction of shingles-associated pain and/or post-herpetic neuralgia in shingles patients. However, prior to fully executing upon this strategy, we plan to obtain additional regulatory feedback on a proposed Phase 2b protocol and regulatory pathway that we believe can support these pain-related clinical endpoints and indications. Finally, we are pleased that our licensee, Pfizer, has advanced its vaccine to prevent S. aureus infections into a Phase 1/2 clinical trial, which triggers a milestone payment to us."

Recent Corporate Developments

INX-189 for Chronic Hepatitis C - Next week, the Company expects to initiate a Phase 2 clinical trial of INX-189, its nucleotide polymerase inhibitor in development for the treatment of chronic infections caused by hepatitis C virus (HCV), to evaluate its safety, tolerability and antiviral activity in combination with pegylated interferon and ribavirin in genotype 2 and 3 treatment naïve patients. The trial, which is being conducted under an IND in the United States, is designed to enroll approximately 90 patients. The primary endpoint of the trial is a rapid virologic response (RVR), defined as HCV RNA below the level of detection after 28 days of dosing. Secondary endpoints include early virologic response (EVR), defined as HCV RNA below the level of detection after 12 weeks of dosing, extended early virologic response (eEVR), defined as HCV RNA below the level of detection after 28 days and 12 weeks of dosing, as well as sustained virologic response 12 (SVR12), and sustained virologic response 24 (SVR24) defined as HCV RNA below the level of detection 12 or 24 weeks after the completion of therapy, respectively. Patients will be randomized across four treatment arms as follows:

• INX-189 25mg QD with pegylated interferon and ribavirin for 12 weeks and up to 24 weeks.
• INX-189 50 mg QD with pegylated interferon and ribavirin for 12 weeks and up to 24 weeks.
• INX-189 100 mg QD with pegylated interferon and ribavirin for 12 weeks and up to 24 weeks.
• Placebo with pegylated interferon and ribavirin for 24 weeks.

Patients in the three treatment arms that include INX-189 with pegylated interferon and ribavirin and achieve a eEVR will terminate all therapy after 12 weeks. Patients in those treatment arms that do not achieve a eEVR will continue to receive pegylated interferon and ribavirin for an additional 12 weeks.

The Company also reported that it plans to initiate a clinical trial this quarter to evaluate the safety, tolerability and viral kinetics of INX-189 at doses higher than 100 mg, administered as monotherapy, to further assess the dose response relationship observed in a previous Phase 1b trial of INX-189.

Additionally, the Company indicated that on June 15, 2011, European patent EP 2,097,434 that contains composition of matter and method of use claims to a family of phosphoramidate 2'-C-methyl guanosine nucleotides used for the treatment of chronic hepatitis C was granted. The Company licensed the exclusive, global rights to this patent family from Cardiff University in Wales, United Kingdom and Katholieke Universiteit in Leuven, Belgium in November 2007.

Finally, the Company will present two abstracts at the annual meeting of the American Association for the Study of Liver Diseases (AASLD) in San Francisco beginning November 4, 2011. On August 2, 2011, AASLD posted the titles of these abstracts on its website. The titles of the two abstracts are:

• Antiviral Activity and Safety of INX-08189, a Nucleotide Polymerase Inhibitor, Following 7-Days of Oral Therapy in Naïve Genotype-1 Chronic HCV Patients
• Preclinical Characterization of a Series of Highly Potent Phophorodiamidate Nucleotide Analogue Inhibitors of Hepatitis C Polymerase.

FV-100 - The Company intends to file a protocol and other supporting documents, including a patient reported outcomes (PRO) dossier, to the FDA later this quarter for a proposed Phase 2b trial of FV-100 in order to obtain feedback from the FDA on the protocol, its PRO methodology, and a regulatory pathway that could potentially support an indication for the reduction of shingles-associated pain and/or the incidence of post-herpetic neuralgia (PHN). The proposed Phase 2b trial would include approximately 600 shingles patients with the primary endpoint being the time to resolution of clinically significant shingles-associated pain, and a key secondary endpoint being the reduction in the incidence of PHN. Subject to satisfactory regulatory review and feedback concerning these and other proposed clinical endpoints and their potential to support an indication for the reduction of shingles-associated pain and/or incidence of PHN, the Company will determine whether it will initiate the proposed Phase 2b study of FV-100 in 2012.

Staphylococcal Vaccine - The Company's licensee and collaborator, Pfizer, Inc., has initiated a randomized, double-blind Phase 1/ 2 clinical trial to evaluate the safety, tolerability, and immunogenicity of three ascending dose levels of a 4-antigen Staphylococcus aureus (S. aureus) vaccine (SA4Ag) in 1,068 healthy adults. The vaccine contains an antigen originating from the Company's proprietary MSCRAMM protein platform. Pfizer is responsible for all clinical development, manufacturing and marketing of the vaccine. The initiation of this trial triggers a milestone payment of $1.0 million to the Company, which is also eligible to receive future regulatory milestones and royalties on any future net sales.

Public Offering - In April 2011, the Company completed a public offering of 13,182,927 shares of its common stock, at a purchase price of $4.10 per share, for an aggregate offering amount of $54 million. The net proceeds to the Company, after underwriting discounts and commissions and other offering expenses, were approximately $50.6 million.

Second Quarter 2011 Financial Results

The Company reported a net loss in the second quarter of 2011 of $5.3 million, as compared to a net loss of $5.6 million in the second quarter of 2010. The $0.3 million decrease in net loss in the second quarter of 2011 was primarily the result of lower research and development expense. Basic and diluted net loss per share was $0.07 for the second quarter of 2011 as compared to $0.09 for the second quarter of 2010.

Revenue for the second quarter of 2011 remained the same at $287,500 in the second quarter of both 2011 and 2010.

Research and development expense decreased to $4.6 million in the second quarter of 2011 from $4.9 million in the second quarter of 2010. The $0.3 million decrease was due to a $0.7 million decrease in direct costs incurred in connection with the completion of the FV-100 Phase 2 clinical trial, offset in part by an increase in costs related to the clinical development of INX-189 and an increase in non-direct expenses.

General and administrative expense remained the same at $1.0 million in the second quarter of both 2011 and 2010.