CombinatoRx, Incorporated (NASDAQ: CRXX) today reported financial results for the third quarter ended September 30, 2009.
“With a number of recent positive product-related updates, including an FDA Advisory Committee on Exalgo and its REMS program, Sanofi-Aventis’ acquisition of Prednisporin, a CombinatoRx-derived combination drug candidate, through its pending acquisition of Fovea Pharmaceuticals, and the presentation at ACR of positive 12-month knee osteoarthritis clinical data for Synavive, we are well-positioned to create a sustainable biotechnology company as we move toward the closing of our proposed merger with Neuromed” commented Robert Forrester, Interim President and CEO of CombinatoRx.
Recent Accomplishments and Business Update:
- A meeting of CombinatoRx stockholders is scheduled for November 16, 2009 to vote on matters related to the proposed merger with Neuromed Pharmaceuticals Inc. The merger seeks to create a sustainable biotechnology company, bringing together the product assets and financial resources of both organizations, including potential Exalgo™ cash milestones and royalty revenue, and Neuromed’s proven drug development expertise, with the CombinatoRx portfolio of product candidates and our unique drug discovery capabilities. The rights to Exalgo were recently acquired by Mallinckrodt Inc., a subsidiary of Covidien plc, for $15 million in upfront payments, additional development funding of up to $16 million to cover internal and external costs associated with Exalgo, an approval milestone of $30 million, which could potentially increase up to $40 million, and tiered royalties on Exalgo net sales after any marketing approval by the U.S. Food and Drug Administration.
- On September 23, 2009, the FDA’s Anesthetics and Life Support Advisory Committee and its Drug Safety and Risk Management Advisory Committee jointly discussed the new drug application, or NDA, submitted by Neuromed for Exalgo seeking FDA approval for the management of moderate to severe pain in opioid tolerant patients requiring continuous, around the clock opioid analgesia for an extended period of time. The joint advisory committee provided feedback to the FDA with regard to the proposed Risk Evaluation Mitigation Strategy (REMS) program for Exalgo. The FDA has assigned a PDUFA date of November 22, 2009 to complete its review of Exalgo.
- A CombinatoRx-derived combination drug candidate, PrednisporinTM (FOV1101), was recognized as a key asset by Sanofi-Aventis in its pending acquisition of our collaborator, Fovea Pharmaceuticals. This acquisition validates our business strategy of leveraging the CombinatoRx discovery technology platform and products through strategic alliances. Positive clinical results with Prednisporin in subjects with persistent allergic conjunctivitis were recently announced and based on this data; further advanced clinical trials for Prednisporin both in the United States and in Europe are planned by Fovea. CombinatoRx also recently enhanced its economic interest in Prednisporin and the other product candidates licensed to Fovea for ophthalmic development. Under the amended agreement, CombinatoRx will be eligible to receive development and regulatory-based milestone payments for Prednisporin of up to approximately $40 million and increased tiered royalty payments of up to 12% of net sales.
- SynaviveTM was shown to maintain efficacy levels throughout a 12-month knee osteoarthritis (OA) extension trial. This data was presented at the American College of Rheumatology (ACR) 2009 Annual Meeting in Philadelphia on October 20, 2009 and further supports the core study data, which was presented at EULAR in June 2009, in which knee OA efficacy was observed early in treatment and sustained throughout the three month core study in all WOMAC measurement subscales including pain, stiffness and physical function. In addition to maintaining efficacy for the Synavive treatment group, placebo treated subjects in the core study also experienced statistically significant improvement in all WOMAC measurement subscales upon crossing over to Synavive in the extension trial. Importantly, no treatment-related increases in glucocorticoid associated adverse events were observed in the Synavive-treated subjects.
Third Quarter 2009 Financial Results (Unaudited):
As of September 30, 2009, CombinatoRx had cash, cash equivalents, restricted cash and short-term investments of $22.2 million compared to $30.6 million on June 30, 2009 and $43.7 million on December 31, 2008. This decrease from June 30, 2009 is primarily due to $2.6 million in restructuring costs and $1.8 million in professional fees associated with our ongoing strategic realignment and proposed merger with Neuromed.
Total revenue was $2.7 million in the third quarter of 2009 compared to $3.0 million reported in the third quarter of 2008.
Research and development expenses totaled $4.9 million in the third quarter of 2009 compared to $13.8 million in the third quarter of 2008. The decrease was due primarily to reduced clinical program costs related to Synavive and CRx-401 as well as reduced compensation and benefit costs as a result of our restructuring initiatives.
General and administrative expenses were $3.6 million in the third quarter of 2009, compared to $3.8 million in the third quarter of 2008. The $0.2 million decrease was primarily due to a decrease in overall general and administrative expenses related to our fourth quarter 2008 and third quarter 2009 restructurings, offset by an increase in professional fees and consulting expenses associated with our proposed merger with Neuromed.
Net loss for the quarter ended September 30, 2009 was $8.3 million, or $0.24 per share, as compared to a net loss of $15.6 million, or $0.45 per share, in the third quarter of 2008 which included a loss from discontinued operations of $1.2 million. Stock-based compensation expense was approximately $0.6 million in the third quarter of 2009, as compared to $1.5 million in the third quarter of 2008.