AVI BioPharma Announces Second Quarter Financial Results.Business Editors & Health/Medical Writers PORTLAND, Ore.--(BW HealthWire)--Aug. 6, 2002 AVI BioPharma, Inc. (Nasdaq:AVII) (Nasdaq:AVIIW) (Nasdaq:AVIIZ), a biopharmaceutical company developing treatments for life-threatening diseases based on antisense antisense, DNA or RNA manipulated in a laboratory so that its components (nucleotides) form a complementary copy of normal, or "sense," messenger RNA (mRNA; see nucleic acid). and cancer immunotherapy technologies, today reported financial results for the three and six months ended June 30, 2002. For the second quarter of 2002, the Company reported a net loss of $10.5 million, or $0.40 per share, compared with a net loss of $3.5 million, or $0.16 per share, for the second quarter of 2001. The second quarter 2002 net loss included a non-cash write-down of short-term securities-available-for-sale of $2.7 million for an other than temporary impairment of an equity in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . The second quarter net loss excluding this non-cash write-down would have been $7.8 million, or $0.30 per share. Research and development expenses during the second quarter of 2002 increased to $7.2 million from $3.2 million for the comparable quarter last year. This increase was primarily due to costs of GMP GMP (guanosine monophosphate): see guanine. manufacturing of NEUGENES(R) by an outside contractor in preparation for Phase III clinical trials and potential future commercial launch of the Resten-NG(TM) product. For the six months ended June 30, 2002, AVI BioPharma reported a net loss of $18.3 million, or $0.74 per share, compared with a net loss of $6.7 million, or $0.31 per share, for the comparable period in 2001. The net loss for the first half of 2002 excluding the second quarter non-cash write-down described above would have been $15.6 million, or $0.63 per share. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the first six months of 2002 were $16.3 million, compared with $7.4 million for the comparable period of 2001. First half 2002 research and development expenses increased to $14.3 million, compared with $5.8 million for the comparable period in 2001. This increase was primarily due to costs of GMP manufacturing of NEUGENES by an outside contractor in preparation for Phase III clinical trials and potential future commercial launch of the Resten-NG product. Year-to-date 2002 general and administrative expenses increased to $2 million from $1.7 million last year. These increases were primarily due to additional expenses associated with outside collaborations, expansion of the Company's clinical development and regulatory affairs efforts, and additional preclinical and clinical testing of the Company's products. The company had cash, cash equivalents and short-term securities of approximately $30 million as of June 30, 2002, an increase of $4.1 million from December 31, 2001. This increase was due primarily to the receipt of $21.4 million in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from a private equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. with several institutional investors, offset by $12.7 million used in operations, $1.6 million used for purchases of property and equipment and patent related costs, and a net $3.3 million decline in the value of the company's short-term securities. "Never in our corporate history has AVI (Audio Video Interleaved) A Windows multimedia video format from Microsoft. It interleaves standard waveform audio and digital video frames (bitmaps) to provide reduced animation at 15 fps at 160x120x8 resolution. Audio is 11,025Hz, 8-bit samples. been stronger than it is today," stated Denis Denis, king of Portugal: see Diniz. R. Burger, Ph.D., AVI's chief executive officer. "We continue to reach important clinical milestones with both our AVICINE(R) cancer vaccine and NEUGENE third-generation antisense technology platforms, and these platforms are demonstrating broad applicability in cancer, cardiovascular disease Cardiovascular disease Disease that affects the heart and blood vessels. Mentioned in: Lipoproteins Test cardiovascular disease , inflammation and infection. Given our cash position, we can confidently move forward with our near-term clinical studies." Dr. Burger further commented, "During the past several months, we have received significant recognition from the scientific community as we presented clinical study results at several prestigious scientific conferences, including the American Society of Clinical Oncology American Society of Clinical Oncology, or ASCO, is an organization that represents all clinical oncologists. Every year, ASCO holds a large symposium where physicians and researchers meet to convey and discuss research and ideas. (ASCO ASCO American Society of Clinical Oncology ASCO Association of Schools and Colleges of Optometry (since 1941; Rockville, Maryland) ASCO Australian Standard Classification of Occupations ASCO Automatic Switch Company ) and the World Congress of Pharmacology. Additionally, AVI science has been featured in the July cover stories in the scientific journals Clinical Cancer Research and Drug Metabolism Drug Metabolism/Interactions Definition Drug metabolism is the process by which the body breaks down and converts medication into active chemical substances. Precautions Drugs can interact with other drugs, foods, and beverages. and Disposition." Product Pipeline Update Antisense NEUGENE Antisense compounds are designed to bind to to contract; as, to bind one's self to a wife s>. See also: Bind specific disease-causing gene sequences to disable or inactivate in·ac·ti·vate v. 1. To render nonfunctional. 2. To make quiescent. in·ac  ti·va the disease
process. AVI has developed proprietary third-generation antisense
compounds, called NEUGENES, which are characterized by a fully synthetic
backbone, instead of the natural or modified backbones of competing
technologies. This chemistry allows NEUGENE antisense agents to be more
stable, specific, efficacious and safer than second-generation antisense
compounds in clinical development by others.Resten-NG Resten-NG is a NEUGENE compound for treating cardiovascular restenosis, or the re-narrowing of an artery following balloon angioplasty balloon angioplasty: see under angioplasty. . Resten-NG targets a transcription factor, and upon entering arterial cells, it blocks the underlying cause of the disease: smooth muscle cell activation and proliferation. AVI has demonstrated in preclinical studies preclinical studies, n.pl a term used to describe research done before a clinical study. May be laboratory or epidemiologic research. that Resten-NG significantly reduced coronary restenosis. A global license has been granted to Medtronic, Inc. for AVI's antisense compounds deployed on stents or other devices for treating restenosis. AVI is currently in a Phase II trial with this product. Cancer AVI is conducting a Phase I/II clinical study with its NEUGENE antisense technology in patients with solid tumors. The Company expects to complete this study around the end of 2002. Previous studies have shown that this antiproliferative antisense drug is both safe and effective at shutting down cell division, a hallmark of cancer progression. Prostate Cancer prostate cancer, cancer originating in the prostate gland. Prostate cancer is the leading malignancy in men in the United States and is second only to lung cancer as a cause of cancer death in men. In August 2001, AVI announced the initiation of a study in prostate cancer, funded by the Department of Defense. AVI presented preclinical study results at the Annual CaP Cure prostate cancer conference in September 2001 showing that AVI's antisense compounds inhibit cancer cell growth and cause cell death in prostate tumors. In December 2001, AVI was awarded a Department of Defense Prostate Cancer Research Program grant to pursue development of therapeutics to fight both the initial stages and the incurable metastatic Metastatic The term used to describe a secondary cancer, or one that has spread from one area of the body to another. Mentioned in: Coagulation Disorders metastatic pertaining to or of the nature of a metastasis. forms of prostate cancer using AVI's NEUGENES. Also in December, AVI presented preclinical study results at the 10th International Conference on Gene Therapy of Cancer. In April 2002 and in June 2002, the Company presented research showing NEUGENE directed against the c-myc gene caused cell growth inhibition and cell death in human prostate cancer cells. AVI plans to initiate human testing in prostate cancer next year. Liver Enzyme Modification AVI successfully completed a clinical trial demonstrating that the Company's antisense drug improves the pharmacokinetic profile of a test drug in modifying the function of a liver enzyme that is critical to the body's processing of many drugs. The study is based on the results of preclinical studies using AVI's NEUGENE antisense technology targeting liver cytochrome cytochrome (sī`təkrōm'), protein containing heme (see coenzyme) that participates in the phase of biochemical respiration called oxidative phosphorylation. enzymes, which control metabolism of most drugs. Data from the trial will be presented at scientific forums later this year. Polycystic Kidney Disease Polycystic Kidney Disease Definition Polycystic kidney disease (PKD) is one of the most common of all life-threatening human genetic disorders. In December 2001, AVI initiated a Phase I/II clinical study in patients with polycystic kidney disease (PKD Noun 1. PKD - kidney disease characterized by enlarged kidneys containing many cysts; often leads to kidney failure polycystic kidney disease kidney disease, nephropathy, renal disorder, nephrosis - a disease affecting the kidneys ). Preclinical studies have demonstrated that AVI-4126 is effective in preventing some of the clinical manifestations of PKD. In early August 2002, AVI announced that it had completed a Phase Ib clinical study that evaluate the safety and pharmacokinetics of three doses of AVI-4126 in patients with PKD and with varying degrees of compromised kidney function. Patients in this study did not demonstrate serious adverse experience, nor was their kidney function adversely affected. Cancer Immunotherapy AVICINE AVICINE is a therapeutic cancer vaccine designed to elicit an immune response immune response n. An integrated bodily response to an antigen, especially one mediated by lymphocytes and involving recognition of antigens by specific antibodies or previously sensitized lymphocytes. to a well-characterized, tumor-associated antigen tumor-associated antigen Immunology, oncology A molecule–eg, CA 15.3, 19-9, CA-125, that may be associated with specific tumors–eg, lymphomas, carcinomas, sarcomas, melanomas; TAAs may elicit cellular and/or humoral immune responses against the tumor, , human chorionic gonadotropin human chorionic gonadotropin (HCG): see gonadotropic hormone. (hCG). The hCG hormone is naturally produced during pregnancy and is believed to stimulate growth and shield the embryo from immune system immune system Cells, cell products, organs, and structures of the body involved in the detection and destruction of foreign invaders, such as bacteria, viruses, and cancer cells. Immunity is based on the system's ability to launch a defense against such invaders. attack. The hCG hormone is expressed in most, if not all, cancers as a membrane-associated tumor marker tumor marker n. A substance, released into the circulation by tumor tissue, whose detection in the serum indicates the presence of a specific type of tumor. , and is believed to promote tumor growth and vascularization vascularization /vas·cu·lar·iza·tion/ (vas?ku-ler-i-za´shun) 1. the process of becoming vascular. 2. angiogenesis. 3. the surgically induced development of vessels in a tissue. and to render patients immunologically unresponsive to the tumor. The role of hCG in cancer and pregnancy is widely believed to be analogous. Thus, AVICINE stimulates the immune system to mount an attack against cancer cells expressing this hormone. Pancreatic Cancer In December 2001, AVI reported Phase II data demonstrating that AVICINE provided substantial survival benefit to patients with pancreatic cancer. In this study, patients were treated with AVICINE alone, or with AVICINE in combination with the chemotherapy agent Gemzar(R). Those treated with AVICINE reported one-year survival data similar to historical results for those treated with Gemzar, without the vaccine-related side effects often associated with Gemzar. A one-year survival rate of 30% was reported for patients treated with AVICINE plus Gemzar, which is approximately double the survival rate for either treatment alone. In May 2002, AVI presented complete survival data from the Phase II pancreatic cancer study at the American Society of Clinical Oncology (ASCO) meeting. As noted above, later this year or early next year the company plans to begin a Phase III clinical program with AVICINE for treating pancreatic cancer. AVI BioPharma has scheduled an investor conference call regarding this announcement to be held today, beginning at 11:00 a.m. Eastern Time. A telephone replay will be available until midnight, Eastern Time August 8, 2002, by dialing 888/266-2081, and entering reservation number 6106653. Those interested in listening to the conference call live via the Internet may do so by visiting the company's Web site at www.avibio.com. A replay will be available on the site for 14 days. About AVI BioPharma AVI BioPharma develops therapeutic products for the treatment of life-threatening diseases using two technology platforms: NEUGENE antisense drugs and cancer immunotherapy. Its lead cancer agent, AVICINE, a therapeutic cancer vaccine, has completed three Phase II trials in colorectal and pancreatic cancer and is initiating a Phase III pivotal trial in pancreatic cancer, with a supporting study in colorectal cancer. The first application of its NEUGENE compounds, Resten-NG, is designed to treat cancer, cardiovascular restenosis and other cell proliferation disorders by inhibiting the production of a cellular transcription factor, the oncogene oncogene Gene that can cause cancer. It is a sequence of DNA that has been altered or mutated from its original form, the proto-oncogene (see mutation). Proto-oncogenes promote the specialization and division of normal cells. c-myc. It is currently in Phase II trials for restenosis and in a Phase I/II trial for cancer. AVI has recently completed a Phase I NEUGENE antisense study that successfully down-regulated the liver enzyme Cytochrome P450 and modified drug metabolism. More information about AVI is available on the Company's Web site at www.avibio.com. "Safe Harbor" Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, the results of research and development efforts, the results of preclinical and clinical testing, the effect of regulation by the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. and other agencies, the impact of competitive products, product development, commercialization and technological difficulties, and other risks detailed in the Companies' Securities and Exchange Commission filings.
AVI BioPharma, Inc.
(A Development-Stage Company)
STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
2002(a) 2001(a) 2002(a) 2001(a)
------ ------ ------ ------
Revenues, from license fees,
grants & research
contracts $197,691 $87,264 $435,386 $103,244
Operating expenses:
Research and
development 7,224,095 3,162,667 14,273,215 5,755,282
General and
administrative 895,706 709,527 1,980,225 1,673,658
8,119,801 3,872,194 16,253,440 7,428,940
Other income (loss):
Interest income,
net 111,207 238,915 191,058 600,971
Write-down of short-term
securities -- available-
for-sale (2,686,956) -- (2,686,956) --
(2,575,749) 238,915 (2,495,898) 600,971
Net income
(loss) $(10,497,859) $(3,546,015) $(18,313,952) $(6,724,725)
Net income (loss)
per share--
basic and diluted $(0.40) $(0.16) $(0.74) $(0.31)
Shares used
in per share
calculations 26,353,017 21,785,140 24,905,613 21,658,113
BALANCE SHEET HIGHLIGHTS
June 30, December 31,
2002(a) 2001(b)
----------- -----------
Cash, cash equivalents and
short-term securities $29,679,640 $25,597,121
Total current assets 30,265,576 27,511,076
Total assets 37,531,705 33,815,113
Total current liabilities 3,955,415 3,281,066
Total shareholders' equity $33,576,290 $30,534,047
(a) Unaudited
(b) Derived from audited statements
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