Bionovo, Inc. (OTCQB: BNVI), a pharmaceutical company focused on the discovery and development of safe and effective treatments for women's health and cancer, today announced financial results for the year ended December 31, 2011.
"In 2011 we initiated our Phase 3 trial for Menerba for the treatment of menopausal hot flashes and enrollment in that trial has progressed very well," said Isaac Cohen, O.M.D., Bionovo's Chairman and Chief Executive Officer. "Unfortunately, due to financial constraints, we have voluntarily suspended enrollment until we obtain additional financing. If we are able to obtain adequate financing, we plan to evaluate the results of the 280 patients who have already enrolled in the trial. We believe these results will provide additional evidence regarding the progress of Menerba towards approval for our shareholders and for potential partners."
The Company has experienced and continues to experience operating losses and negative cash flows from operations, as well as an ongoing requirement for substantial additional capital investment. Our cash balance as of March 29, 2012, was approximately $400,000. We expect that we will need to raise substantial additional capital to continue our operations beyond April 15, 2012. We are currently pursuing a variety of funding options, including equity offerings, partnering/co-investment, venture debt and commercial licensing agreements for our products. On February 8, 2012, we filed a registration statement on Form S-1 with the SEC (File No. 33-179429), as amended, to register the offering of an aggregate of up to $25 million in convertible preferred stock and warrants to purchase shares of common stock. We expect that the terms and conditions of this potential offering, if consummated, will change. There can be no assurance as to the availability or terms upon which such financing and capital might be available. If we are not successful in our efforts to raise additional funds by April 15, 2012, we may be required to further delay, reduce the scope of, or eliminate one or more of our development programs or discontinue operations altogether.
Key Events and Milestones
- The Company initiated the first of two pivotal Phase 3 studies for its drug Menerba (MF101) for the treatment of menopausal hot flashes. The trial involving 50 clinical sites in the U.S. is a randomized, double blind, placebo controlled study planned for 1,200 menopausal women suffering from 50 or more moderate to severe hot flashes per week. Due to financial constraints, enrollment of the trial has been voluntarily suspended after 280 patients.
- The Company successfully completed a 28-day tolerability trial of Menerba in women investigating higher doses. As expected, there were no safety concerns, no reports of serious adverse events, no changes to blood pressure, heart rate or lab values and no cases of abnormal uterine findings on endometrial biopsies. A dosing strategy was established for the Phase 3 study.
In addition, in this same study, the Company reported an observed robust clinical effect of Menerba to reduce hot flashes after just 4 weeks of treatment. After 4 weeks of treatment with Menerba at 10g/day, the reduction in moderate to severe hot flashes was 69% (with a p value of 0.003). In addition, there was a 68% reduction in the number of nighttime awakenings due to hot flashes (with a p value of 0.001). The Menerba 10g/day dose used in this study has twice the potency compared to the highest dose tested in our Phase 2 study. This level of efficacy at 4 weeks is equivalent to or superior to estrogen-based hormone therapy. - The Company successfully completed non-clinical toxicology studies of Menerba in two animal species. As expected, no serious adverse events or toxicities were observed to date from these studies, which were performed at doses much higher than are being tested in the Phase 3 clinical trial. The drug was well tolerated by the animals.
- The Company has completed the manufacture of the requisite ten batches for the Phase 3 clinical trial of Menerba, and demonstrated to the FDA excellent consistency and quality.
- The Company was active in developing and accessing the capital markets for needed funding:
- On March 12, 2012, the Company entered into a securities purchase agreement with certain investors pursuant to which the Investors purchased an aggregate of 14,231,696 shares of its common stock and warrants to purchase 11,485,844 shares of its common stock. The exercise price of the warrants is $0.03 per share. The warrants expire on March 30, 2012 and as of March 29, 2012, no warrants were exercised.
- On December 30, 2011, the Company entered into a $5 million securities purchase agreement with Socius CG II, Ltd. ("Socius"). On January 6, 2012, the Company presented Socius with a notice to purchase 105 shares of Preferred Stock for $1,050,000. Upon receipt of the notice, Socius exercised its additional investment right for 4,468,085 common shares for $0.235 per share. The portion of a warrant representing 35% of the Preferred Stock amount became vested and exercisable and accordingly Socius exercised the vested portion of the warrant for 1,563,830 shares for $0.235 per share. Socius paid for the shares issued in the form of a secured promissory note. On February 24, 2012, the Company issued Socius 105 shares of Preferred Stock and immediately thereafter redeemed all 105 shares of the Preferred Stock by offsetting the full redemption price for these shares against the full amount owed to the Company under the note. On February 29, 2012, the Socius Purchase Agreement terminated pursuant to its terms. The gross proceeds received from Socius were $1,050,000.
- On February 2, 2011, the Company closed a follow-on stock offering, with net proceeds of $27.2 million. The financing was underwritten by Cowen and Company.
Full Year Results
For the year ended December 31, 2011 total revenues were $0.3 million compared with $0.6 million for the same period in 2010. Revenues in 2011 consisted of $0.3 million in a National Institute of Health (NIH) grant. Revenues in 2010 consisted of a Qualifying Therapeutic Discovery Project Credit of $0.5 million and $0.1 million in a National Institute of Health (NIH) grant.
For the year ended December 31, 2011 total operating expenses were $23.9 million compared with $18.2 million for the same period in 2010. The increase in 2011 operating expenses is primarily due to completion of Menerba tolerability studies, initiation of the Menerba Phase 3 clinical study and manufacturing costs at our Hayward, California manufacturing facility, partially offset by no employee or officer bonuses for 2011.
The net loss for the year ended December 31, 2011 was $13.7 million, or $0.26 per share, compared with a net loss of $17.7 million, or $0.80 per share, for the same period in 2010. The year-over-year decrease in net loss was driven primarily by change in fair value of the warrant liability offset by increased operating expenses as noted above.
As of December 31, 2011, cash, cash equivalents and short-term investments totaled approximately $3.0 million compared to $2.6 million at December 31, 2010. The decrease is due to cash used in operating activities of $17.6 million and cash used in investing activities of $8.5 million offset by the net cash provided from financing activities of $26.0 million. The net cash used in operating activities for 2011 was $17.6 million, compared with $14.2 million in 2010.
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