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Favrille Reports Third Quarter 2005 Financial Results
SAN DIEGO, Nov. 2 /PRNewswire-FirstCall/ -- Favrille, Inc. , a biopharmaceutical company developing targeted immunotherapies for cancer and diseases of the immune system, today reported its financial results for the third quarter of 2005. For the three and nine months ended September 30, 2005, the Company reported net losses of $8.5 million and $26.3 million, respectively, compared to net losses of $7.3 million and $18.4 million for the same periods in 2004. "The past quarter marked another period of significant progress at Favrille," said John P. Longenecker, Ph.D., President and Chief Executive Officer of Favrille. "Our lead product candidate, FavId(R), is nearing completion of patient enrollment in a pivotal Phase 3 clinical trial for follicular B-cell non-Hodgkin's lymphoma (NHL). FavId is being developed for administration following a course of treatment with Rituxan(R), the standard of care for NHL with U.S. sales of more than $1.6 billion. Rituxan is a monoclonal antibody that is administered as a passive immunotherapy and, although a very successful treatment, is limited by its duration of remission, which is on the order of one year. FavId is an active immunotherapy which we believe to be ideally suited for a slow growing cancer such as indolent B-cell NHL. We believe that the combination of passive and active immunotherapies -- Rituxan followed by FavId -- may extend time to disease progression (TTP) in patients with indolent B-cell NHL based on the results of our previously presented Phase 2 clinical trials. We look forward to presenting data from long-term follow up of our 100-patient Phase 2 clinical trial of FavId following Rituxan at the American Society of Hematology (ASH) Annual Meeting in December." Third Quarter 2005 Financial Review Research and development expense was approximately $7.0 million and $21.0 million for the three and nine months ended September 30, 2005, respectively, compared to approximately $4.9 million and $12.9 million for the same periods in 2004. The increase is primarily due to increases in certain manufacturing expenses for FavId and expenses associated with the pivotal Phase 3 clinical trial. Manufacturing expenses include personnel and raw materials and supplies. General and administrative expense was approximately $1.2 million and $3.8 million for the three and nine months ended September 30, 2005, respectively, compared to approximately $1.7 million and $3.5 million for the same periods in 2004. The increase in expenses during the nine months ended September 30, 2005 over the same period in 2004 was primarily due to an increase in personnel, liability insurance, and other expenses incurred subsequent to the Company's initial public offering. This increase was partially offset by the non-recurring IPO costs expensed in the third quarter of 2004, which is reflected in the decrease in expenses during the third quarter of 2005 as compared to the same period in 2004. For the three and nine months ended September 30, 2005, the net loss applicable to common stockholders was $8.5 million and $26.3 million, respectively, compared to $7.3 million and $46.6 million for the same periods in 2004. The net loss applicable to common stockholders for the nine months ended September 30, 2004 included deemed dividends of $28.1 million associated with the Company's Series C Preferred Stock issued in March and April of 2004. Basic and diluted net loss per common share for the three and nine months ended September 30, 2005 was $0.43 and $1.51, respectively, compared to $6.64 and $46.19 for the same periods in 2004. Upon completion of the Company's initial public offering on February 7, 2005, all of the Company's outstanding convertible preferred stock converted into approximately 12.2 million shares of common stock. As of September 30, 2005, Favrille had cash, cash equivalents and short term investments of $43.2 million, compared to $26.6 million at December 31, 2004. The increase is primarily due to the $40.9 million in proceeds, net of underwriters' discounts and commissions but before expenses, from the Company's initial public offering, partially offset by net cash used to fund ongoing operations. "We expect total operating expenses for the full year 2005 to be in the range of $37 million to $38 million, which includes an estimated $3 million in amortization of non-cash stock-based compensation," said Tamara A. Seymour, Chief Financial Officer and Vice President, Finance and Administration of Favrille. "We anticipate that operating expenses will be primarily related to our Phase 3 clinical trial. We expect our cash, cash equivalents and short term investments to be in the range of $33 million to $34 million at the end of 2005." Upcoming Events
* Favrille will present new data from its Phase 2 clinical trial of FavId
following Rituxan in patients with follicular B-cell NHL at the ASH
Annual Meeting in Atlanta on Tuesday, December 13, 2005. At the time of
the abstract's submission in August 2005, patients in this trial who
would be eligible for the ongoing Phase 3 clinical trial had not reached
median TTP. The Phase 2 trial was closed to enrollment in December 2003.
Favrille believes that the data from this long-term follow up of
patients is very encouraging and supports the design for the Company's
ongoing Phase 3 clinical trial in the same patient populations.
* The Company expects to complete enrollment of its target of 342
evaluable patients in its pivotal Phase 3 clinical trial evaluating
FavId following Rituxan in patients with follicular B-cell NHL by year
end or soon thereafter. Since initiation of this registration trial in
July 2004, the Company has enrolled approximately 85 percent or 290 of
the eligible patients. Favrille anticipates an analysis on the secondary
endpoint, response rate improvement (RRI), during the fourth quarter of
2006. RRI is defined as a change from stable disease to partial response
or partial response to complete response after the initiation of FavId.
The final analysis on the primary endpoint, TTP, is expected during the
second half of 2007.
Conference Call and Webcast Information
Favrille management will host a conference call today to discuss the third quarter 2005 financial results at 4:30 p.m. Eastern Time. A live audio webcast of management's presentation will be available at http://www.favrille.com/. Alternatively, callers may participate in the conference call by dialing 866.356.3377 (domestic) or 617.597.5392 (international). The passcode for the conference call is 27965216. A telephone replay of the call will also be available for 48 hours. Callers may access the telephone replay by dialing 888.286.8010 (domestic) or 617.801.6888 (international), passcode 60929803. About Favrille, Inc. Favrille, Inc. is a biopharmaceutical company focused on the research, development and commercialization of targeted immunotherapies for the treatment of cancer and diseases of the immune system. The Company's lead product candidate, FavId, is based upon unique genetic information extracted from a patient's tumor. FavId is currently under investigation in a pivotal Phase 3 clinical trial for patients with follicular B-cell NHL and Phase 2 clinical trials in other B-cell NHL indications. The Company is developing additional applications based on its immunotherapy expertise and proprietary cost-effective manufacturing technology, including a second product candidate, FAV-201, for the treatment of T-cell lymphoma. Forward-Looking Statements Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, references to Favrille's product candidates, as well as its proprietary technologies and research programs. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Favrille's actual results to be materially different from historical results or from any results expressed or implied by such forward- looking statements. These factors include, but are not limited to, risks and uncertainties related to the progress and timing of clinical trials for FavId, including potential delays in patient enrollment; the risk that results achieved in early clinical trials will not be duplicated in later clinical trials; difficulties or delays in development, testing, obtaining regulatory approval, manufacturing and marketing FavId or Favrille's other product candidates; risks associated with achieving projected operating metrics and financial performance; Favrille's ability to obtain additional financing to support its operations; Favrille's dependence on single-source suppliers for critical raw materials; Favrille's reliance on third parties for clinical testing and marketing; the scope and validity of intellectual property protection for Favrille's product candidates, proprietary technologies and their uses; competition from other pharmaceutical or biotechnology companies; and additional risks discussed in Favrille's filings with the Securities and Exchange Commission. In addition, conclusions regarding the safety and efficacy of Favrille's product candidates cannot be made until the results of future clinical trials of longer duration in more patients are known. All forward-looking statements are qualified in their entirety by this cautionary statement. Favrille is providing this information as of the date of this release and, except as required by law, does not undertake any obligation to update any forward-looking statements contained in this release as a result of new information, future events or otherwise. Financial Statements.
FAVRILLE, INC.
(a development stage company)
BALANCE SHEETS
(in thousands, except share and per share data)
September 30, December 31,
2005 2004
(unaudited)
Assets
Current assets:
Cash and cash equivalents $18,492 $25,065
Short-term investments 24,661 1,493
Receivable from employees 3 4
Receivable, other 346 15
Prepaid expenses and other current assets 646 694
Total current assets 44,148 27,271
Property and equipment, net 8,911 9,435
Restricted cash 1,550 1,606
Other assets 626 818
Total assets $55,235 $39,130
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable and accrued liabilities $3,480 $2,603
Current portion of debt 3,111 2,492
Total current liabilities 6,591 5,095
Debt, less current portion 3,097 4,224
Deferred rent 1,197 793
Commitments and contingencies
Redeemable convertible preferred stock,
$0.001 par value:
Authorized shares, none at
September 30, 2005 and
6,286,014 at December 31, 2004;
Issued and outstanding shares-none
at September 30, 2005 and 6,140,188
at December 31, 2004 -- 43,672
Stockholders' equity (deficit):
Preferred stock, $0.001 par value
5,000,000 shares authorized at
September 30, 2005 and none at
December 31, 2004; no shares issued
and outstanding at September 30, 2005
and December 31, 2004 -- --
Convertible preferred stock,
$0.001 par value:
Authorized shares, none at
September 30, 2005 and 7,013,387
at December 31, 2004;
Issued and outstanding shares - none
at September 30, 2005 and 5,505,330
at December 31, 2004 -- 6
Common stock, $0.001 par value:
Authorized shares, 75,000,000 at
September 30, 2005 and 15,402,410
at December 31, 2004;
Issued and outstanding shares -
20,326,217 at September 30, 2005
and 1,838,714 at December 31, 2004 20 2
Additional paid-in capital 156,680 73,324
Deferred stock-based compensation (6,400) (8,386)
Note receivable from stockholder (96) (96)
Accumulated other comprehensive loss (44) (2)
Deficit accumulated during the
development stage (105,810) (79,502)
Total stockholders' equity (deficit) 44,350 (14,654)
Total liabilities and stockholders'
equity (deficit) $55,235 $39,130
FAVRILLE, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Unaudited
Period from
January 21, 2000
Three Months Nine Months (inception)
ended ended to
September 30, September 30, September 30,
2005 2004 2005 2004 2005
Operating expenses:
Research and
development $7,006 $4,885 $21,027 $12,877 $58,981
General and
administrative 1,176 1,656 3,783 3,519 14,239
Amortization of
stock-based
compensation:
Research and
development 347 337 1,063 836 2,373
General and
administrative 358 352 1,096 838 2,357
Total operating
expenses 8,887 7,230 26,969 18,070 77,950
Interest income 524 116 1,229 229 2,146
Interest expense (166) (191) (555) (602) (1,859)
Other income
(expense) 5 10 (7) 12 13
Total other income
(expense), net 363 (65) 667 (361) 300
Net loss (8,524) (7,295) (26,302) (18,431) (77,650)
Deemed dividend
- beneficial
conversion feature
for Series C
redeemable
convertible
preferred
stock -- -- -- (28,103) (28,103)
Accretion of
Series C
redeemable
convertible
preferred stock
issuance costs -- (17) (6) (33) (57)
Net loss applicable
to common
stockholders $(8,524) $(7,312) $(26,308) $(46,567) $(105,810)
Historical net
loss per share:
Basic and
diluted $(0.43) $(6.64) $(1.51) $(46.19)
Weighted
-average
shares -
basic
and diluted 19,913,038 1,100,323 17,409,227 1,008,098
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