CONFERENCE CALL WILL HIGHLIGHT SIGNIFICANT PROGRESS AND
DEVELOPMENTS
Berkeley Heights, NJ,
August 8, 2002
- Genta Incorporated (Nasdaq: GNTA) today announced operating
results for the second quarter ended June 30, 2002. The Company
reported a net loss of $17.1 million, or $(0.25) per share, for the
quarter ended June 30, 2002, compared to a net loss of $10.9
million, or $(0.21) per share, for the comparable period in 2001.
For the six months ended June 30, 2002, the Company"s net loss was
$29.7 million, or $(0.44) per share, compared to a net loss of
$18.4 million, or $(0.35) per share, for the comparable period in
2001.
During the second quarter, the Company signed a collaborative
agreement with Aventis that provides significant sharing of
expenses related to Genta"s lead anticancer drug, Genasense
TM
. In the second quarter, total operating expenses, net of Aventis
reimbursement, increased by approximately $6.8 million relative to
the comparable quarter in 2001. The increase in expenses primarily
reflects the purchase of Genasense drug substance and one-time
licensing milestone payments totaling $3.5 million to the
University of Pennsylvania and National Institutes of Health.
Pursuant to cost-sharing provisions of the agreement, the Company
has recorded a receivable on the balance sheet in the amount of
$7.2 million. Of the $6.2 million in prepaid expenses, $5.5 million
represents a deposit for the purchase of Genasense drug substance,
a substantial portion of which is also expected to be reimbursed by
Aventis. As shown in the attached statements, the upfront cash
payments will be amortized over approximately nine years.
Reimbursable expenses are shown as a receivable on the balance
sheet.
Year-to-date, the Company"s total operating expenses increased
by $11.5 million compared with the comparable six-month period in
2001. Cash, cash equivalents, and short-term investments increased
to a total of $143.5 million as of June 30, 2002, compared to $33.5
million at March 31, 2002.
Specific highlights of the quarter include:
Aventis Collaboration
In April, Genta and Aventis concluded the second largest
transaction for any single biotech product. The collaborative
agreement to develop and commercialize Genasense
TM
provides up to $477 million in cash, equity, milestones, and
convertible debt to Genta. To date, Genta has received $131.9
million, which consisted of $50 million in cash, $71.9 million in
an equity purchase, and $10 million in convertible debt. Pursuant
to the achievement of certain regulatory milestones, Genta may
receive an additional $280 million in cash, along with an option to
place an additional $65 million in convertible debt with Aventis.
The first milestone payment, which is due upon the first approval
of Genasense in the U.S., consists of $75 million in cash plus a
$20 million allotment of convertible debt. Genta will also receive
royalties on all worldwide sales of Genasense. The remaining
milestones provided by the agreement consist of the following cash
payments:
$40 million for 2nd U.S. approval $40 million for 1st major U.S.
approval $40 million for 1st front-line major U.S. approval $45
million for 2nd major U.S. approval $20 million for 1st E.U.
approval $20 million for 2nd E.U. approval
(A "major" indication is defined as prostate, breast, colon, or
lung cancer.)
Under the terms of the agreement, Genta and Aventis will jointly
develop and co-promote Genasense in the United States, and Aventis
will have exclusive development and marketing rights to the
compound in all countries outside of the U.S. Genta will retain
responsibility for global manufacturing and for regulatory filings
within the U.S., while Aventis will assume all regulatory
responsibilities outside the U.S.
Subsequent to execution of the agreement, Aventis will fund 75%
of all NDA-directed development costs and 100% of all other
development and marketing costs worldwide.
Genasense Clinical Trials
Genasense is a drug that may optimize the effectiveness of current
forms of anticancer therapy. The Company is currently conducting
three similarly designed, randomized Phase 3 clinical trials in
patients with malignant melanoma, multiple myeloma, and chronic
lymphocytic leukemia. The Company currently believes that
enrollment in each of these trials should be complete by the end of
2002. Both Genta and Aventis are working to accelerate enrollment
in existing clinical trials, as well as to expedite the initiation
of new trials that may expand future indications for the drug.
Gallium Nitrate (Ganite
TM
) Clinical Trials
In May, the Company initiated a Phase 2b clinical trial using
Ganite
TM
(gallium nitrate injection) for the treatment of non-Hodgkin"s
lymphoma (NHL). The new trial focuses on patients with low- or
intermediate-grade NHL who have myelosuppression (low blood counts)
and who have failed prior chemotherapy and rituximab (Rituxan®).
Previously published data have shown a 40-50% response rate in such
patients. The Company plans to file an Orphan Drug Application for
this indication in the third quarter.
