Inhibitex, Inc. (Nasdaq: INHX), today announced its financial results for the second quarter ended June 30, 2009. The Company held cash, cash equivalents and short-term investments of $24.5 million at June 30, 2009, as compared to $33.1 million at December 31, 2008.
“During the second quarter, we made noteworthy progress in both of our differentiated antiviral programs,” stated Russell H. Plumb, president and CEO of Inhibitex, Inc. “We achieved a significant clinical milestone by initiating a Phase II clinical trial designed to compare the potential therapeutic benefit and safety of FV-100 to current standard of care in patients with herpes zoster infections. The trial is enrolling in line with our expectations and we continue to anticipate its completion in mid-2010. We also continue to generate promising results from preclinical toxicological studies of our lead hepatitis C nucleotide analogue, INX-189. These in vivo data, coupled with its excellent potency, support the potential for INX-189 as a low dose, once-a-day oral therapy amenable to combination with other direct-acting anti-virals for the treatment of patients with chronic hepatitis C infection.”
Second Quarter 2009 Financial Results
The Company reported a net loss for the second quarter of 2009 of $4.2 million, as compared to a net loss of $2.2 million in the second quarter of last year. Basic and diluted net loss per share was $0.10 for the second quarter of 2009 as compared to basic and diluted net loss per share of $0.05 per share in the second quarter of 2008. The increase in net loss and net loss per share in the second quarter of 2009 was the result of higher research and development expense, lower revenues from collaborative license and development agreements and lower net interest income, offset in part by a reduction in general and administrative expense.
Revenue decreased to $0.3 million in the second quarter of 2009 from $0.8 million in the second quarter of 2008. The $0.5 million decrease was primarily the result of upfront license fees received by the Company in 2007 and 2008 being fully amortized to revenue as of the end of 2008, and to a lesser extent, lower periodic research-associated support fees received by the Company.
Research and development expense increased to $3.7 million in the second quarter of 2009 from $2.1 million in the second quarter of 2008. This increase of $1.6 million was primarily due to a non-recurring $1.4 million reduction in expense in the second quarter of 2008 resulting from a favorable settlement of a prior arbitration award, as well as an increase in direct costs of $0.3 million incurred in connection with the clinical development of FV-100 and the preclinical development of the Company’s hepatitis C nucleotide analogues, offset in part by a $0.1 million decrease in other non-direct expenses.
General and administrative expense decreased to $0.9 million in the second quarter of 2009 from $1.2 million in the second quarter of 2008. This decrease of $0.3 million consisted of a $0.2 million decrease in salaries, benefits and share-based compensation and a $0.1 million decrease in other recurring expenses.
Net interest income decreased to $0.1 million in the second quarter of 2009 from $0.3 million in the second quarter of 2008 as a result of both lower prevailing interest rates and reduced cash and investment balances.
Recent Corporate Developments
FV-100 – In May 2009, the Company reported that it had initiated a Phase II clinical trial of FV-100, its antiviral compound in clinical development for the treatment of herpes zoster (shingles). The Phase II clinical trial is a well-controlled, double-blind randomized study comparing two once-a-day doses of FV-100 to an active control (valacyclovir). In addition to further evaluating its safety in patients, the key objective of the trial is to evaluate the potential therapeutic benefit of FV-100 in reducing the (i) severity and duration of acute shingles-related pain; (ii) incidence of post herpetic neuralgia (PHN); and (iii) time to lesion healing.
HCV Nucleoside Polymerase Inhibitors – In May 2009, the Company announced that it had selected INX-189 as a lead compound from its series of proprietary hepatitis C virus nucleotide polymerase inhibitors for further evaluation in advanced preclinical studies. The Company presented preclinical data from this program at the 44th Annual Meeting of the European Association for the Study of the Liver (EASL), in Copenhagen, Denmark in April 2009 and at the 22nd Annual International Conference on Antiviral Research (ICAR) in Miami, Florida in May 2009.
NASDAQ Listing Transfer – In July 2009, the Company received written notification that NASDAQ had suspended enforcement of its minimum bid price and market valuation requirement for all listed companies until August 3, 2009. Based upon NASDAQ’s action, the Company has until October 22, 2009 to regain compliance with NASDAQ's minimum bid price requirement.
Conference Call and Webcast Information
Russell H. Plumb, president and chief executive officer of Inhibitex, and other members of management will review the Company’s second quarter 2009 operating results and financial position, as well as provide a general update on the Company via a webcast and conference call today at 9:00 a.m. EDT. To access the conference call, please dial (877) 407-8031 (domestic) or (201) 689-8031 (international). A replay of the call will be available from 11:00 a.m. EDT on August 11 until September 11, 2009 at midnight. To access the replay, please dial (877) 660-6853 (domestic) or (201) 612-7415 (international) and reference the account # 286 and the conference id # 329257. A live audio webcast of the call and the archived webcast will be available under the News and Events category on the Inhibitex website at http://www.inhibitex.com .
About Shingles and FV-100
Shingles, also known as herpes zoster, is an infection caused by the reactivation of varicella zoster virus (VZV), the same virus that causes chicken pox. Worldwide, it is estimated that there are more than 2.5 million new cases of shingles each year. Shingles is generally characterized by skin lesions, acute infection-related pain, and in many cases, post herpetic neuralgia (PHN), a painful and sometimes debilitating condition that can last for months or possibly years. While shingles can develop in adolescents or adults of any age, it occurs predominantly in individuals 40 years of age and older.
Published in vitro studies have demonstrated that FV-100, an orally available bicyclic nucleoside analogue, is significantly more potent against VZV, and can inhibit its replication substantially faster than any other antiviral agent currently approved for the treatment of shingles. Inhibitex believes these characteristics, plus a favorable pharmacokinetic profile, supports the potential for a low, once-daily dose of FV-100 to reduce the incidence and severity of shingles-related symptoms, including acute pain and PHN.
About HCV and Protides
Hepatitis C is a disease of the liver caused by the hepatitis C virus (HCV). It is estimated that approximately 4 million Americans and 170 million individuals worldwide are infected with HCV. HCV can cause chronic liver disease, cirrhosis and cancer, and is the leading cause of liver transplant in the United States. Inhibitex is developing a series of proprietary phosphoramidates, or protides, of nucleoside inhibitors that target the RNA-dependent RNA polymerase (NS5b) of HCV. Protides are designed to by-pass the rate limiting first step in the creation of active nucleoside triphosphate. The Company believes that its protides possess several pharmacological advantages over nucleosides alone and potentially other nucleotide prodrugs. These advantages include greater potency, a rapid conversion of the protide into its active form, high concentrations of the active nucleoside triphosphate in the liver, and potentially less toxicity due to increased liver concentration and reduced systemic exposure. INX-189, the Company’s lead compound from this series, is a protide of a 2’-C-methylguanosine analogue that the Company believes is the most potent nucleotide or nucleoside polymerase inhibitor described in the literature to-date. The Company plans on filing an investigational new drug application (IND) for INX-189 in the first half of next year.
Inhibitex, Inc., headquartered in Alpharetta, Georgia, is a biopharmaceutical company focused on developing products to treat and prevent serious infectious diseases. In addition to FV-100, its clinical stage product candidate, the Company’s late-stage preclinical pipeline includes INX-189 and a staphylococcal vaccine that is licensed to Wyeth. For additional information about the Company, please visit www.inhibitex.com.