BERKELEY HEIGHTS, NJ - May 12, 2009
- Genta Incorporated (OTCBB: GNTA.OB) today announced financial
results for the quarter ended March 31, 2009. The Company
recorded significant milestones in the third quarter, including the
following:
- AGENDA Phase 3 trial of Genasense® in melanoma completes
enrollment:
o Final safety and futility analysis expected May 2009
o Progression-free survival (PFS) result expected Q4 2009
- Tesetaxel dose-ranging trial opens:
o Initial data on all dose levels expected at ASCO, June
2009
"The major event of the quarter has been the completion of
enrollment into the Phase 3 AGENDA trial in advanced melanoma,"
said Dr. Raymond P. Warrell, Jr., Genta's Chief Executive
Officer. "The demographic profile of registered patients into
AGENDA has been similar to the patient population from our prior
trial, which was characterized by a low-normal level of lactate
dehydrogenase (LDH) at baseline. A final analysis by the
independent Data Monitoring Committee for both safety and futility
will be completed later this month. If the trial progresses
to completion, we expect final data on PFS -- a co-primary endpoint
-- will be available in the 4th quarter of this year.
If those data are positive, we currently expect our regulatory
submissions will be based upon confirmation that the addition of
Genasense to chemotherapy results in a statistically significant
and clinically meaningful improvement in PFS. For tesetaxel,
we have now completed patient enrollment at lower doses, and we are
currently accruing patients at the previously established Phase 2
dose. This new agent is the leading oral taxane in clinical
development and may offer substantial benefit to patients."
Genasense in Melanoma:
AGENDA is a Phase 3, randomized, double-blind trial in 315
patients with advanced melanoma. The study is designed to
confirm certain safety and efficacy results from a previous
randomized trial of Genasense combined with dacarbazine in patients
who have not previously received chemotherapy. AGENDA employs
a biomarker to define those patients who derived maximum clinical
benefit during the preceding study. These patients are
characterized by low-normal levels of LDH, a tumor-derived enzyme
that is readily detected in blood. AGENDA is intended to
support global registration of Genasense for patients with advanced
melanoma.
Tesetaxel:
Tesetaxel, a leading oral taxane, was developed to maximize
patient benefit from a highly active class of drugs and avoid
serious effects associated with other taxanes. Disadvantages
of other taxanes such as paclitaxel (Taxol®; Bristol Myers Squibb)
and docetaxel (Taxotere®; sanofi aventis) include severe
hypersensitivity infusion reactions, peripheral nerve damage, and
drug resistance. More than 250 patients have received
tesetaxel, and completed Phase 2a studies have demonstrated
anticancer activity in patients with advanced gastric cancer and
advanced breast cancer. If further studies document efficacy
and safety, tesetaxel may offer substantial opportunities to
improve patient outcomes.
Financial Information
The Company reported a net loss of $11.1 million, or $0.01 per
share, for the first quarter of 2009, compared with a net loss of
$9.7 million, or $0.29 per share, for the first quarter of
2008.
Research and development expenses were $2.3 million for the
three months ended March 31, 2009, compared with $6.4 million for
the three months ended March 31, 2008. Part of this decline
is due to the Company's recognition of $2.5 million in license
payments for tesetaxel in March 2008. In addition, the company had
lower research and development expenses in 2009, primarily due to
lower payroll costs as a result of reductions in headcount in April
and May 2008.
Selling, general and administrative expenses were $2.2 million
for the three months ended March 31, 2009, compared with $3.6
million for the three months ended March 31, 2008. This decrease
was primarily due to lower payroll costs, resulting from the two
reductions in workforce and lower office rent, resulting from the
termination of a lease for one floor of office space in May
2008.
In June 2008, the Company issued $20 million of senior secured
convertible notes, issued its private placement agent a warrant to
purchase 40,000,000 shares of our common stock and incurred a
financing fee of $1.2 million. The deferred financing costs,
including the financing fee and the issuance of the warrant, are
being amortized over the two-year term of the convertible
notes. At the time the notes were issued, the Company
recorded a debt discount (beneficial conversion) relating to the
conversion feature in the amount of $20.0 million. The
resultant debt discount is being amortized over the term of the
notes through their maturity date. The amortization of
deferred financing costs and debt discount was $6.3 million for the
three months ended March 31, 2009.
During the first three months of 2009, cash used in operating
activities was $4.3 million compared with $6.2 million for the same
period in 2008, reflecting the reduced size of the Company.
At March 31, 2009, the Company had cash and cash equivalents
totaling $0.6 million, compared with $4.9 million at December 31,
2008. On April 2, 2009, the Company entered into a securities
purchase agreement with certain accredited institutional investors
to place up to $12 million of senior secured convertible notes, or
the 2009 Notes, and corresponding warrants to purchase common
stock. The Company closed on approximately $6 million of such
notes and warrants on April 2, 2009.
The 2009 Notes bear interest at an annual rate of 8% payable
semi-annually in other senior secured convertible promissory notes
to the holder, and will be convertible into shares of the Company's
common stock at a conversion rate of 500,000 shares of common stock
for every $1,000.00 of principal amount outstanding. In
addition, the 2009 Notes include certain events of default,
including a requirement that the Company effect a reverse stock
split of its Common Stock within 105 days of April 2, 2009.
The notes and warrants are convertible into approximately 3.9
billion shares. There are currently not enough shares of Common
Stock authorized under the Company's certificate of incorporation
to cover the shares underlying the 2009 Notes and warrants and the
2008 Notes. At present, the Company has approximately 3.4
billion shares outstanding. A special meeting of the
Company's stockholders will be held on May 27, 2009. The
Company has recommended to its stockholders that they provide
authorization to the Company's Board of Directors to effect a
reverse split in any ratio from 1:2 to 1:100.
Absent additional funding, the Company currently projects that it
will run out of funds in June 2009. The terms of the 2009
Notes enable those noteholders, at their option, to purchase
additional notes with similar terms. The Company does not
have any additional financing in place. If the Company is
unable to raise additional funds, it could be required to reduce
its spending plans, reduce its workforce, license or sell assets or
products it would otherwise seek to commercialize on its own, or
file for bankruptcy. There can be no assurance that the
Company can obtain financing, if at all, on acceptable terms.
Conference Call and Webcast
Genta management will host a conference call and live audio
webcast to discuss financial results and recent corporate
activities on May 12, 2009 at 8:00 am ET. Participants can
access the live call by dialing (877) 634-8606 (U.S. and Canada) or
(973) 200-3973 (International). The access code for the live call
is Genta Incorporated. The call will also be webcast live at
http://www.genta.com/investorrelation/events.html
For investors unable to participate in the live call, a replay will
be available approximately two hours after the completion of the
call, and will be archived for 30 days. Access numbers for this
replay are: (800) 642-1687 (U.S. and Canada) and (706) 645-9291
(International); conference ID number is: 97937884.
About Genta
Genta Incorporated is a biopharmaceutical company with a
diversified product portfolio that is focused on delivering
innovative products
for the treatment of patients with cancer. Two major programs
anchor the Company's
research platform
: DNA/RNA-based Medicines and Small Molecules.
Genasense® (oblimersen sodium)
Injection is the Company's lead compound from its DNA/RNA Medicines
program. The leading drug in Genta's Small Molecule program is
Ganite® (gallium nitrate
injection)
, which the Company is exclusively marketing in the U.S. for
treatment of symptomatic patients with cancer related hypercalcemia
that is resistant to hydration. The Company has developed
G4544
, an oral formulation of the active ingredient in Ganite, that has
recently entered clinical trials as a potential treatment for
diseases associated with accelerated bone loss. The Company
is also developing
tesetaxel
, a novel, orally absorbed, semi-synthetic taxane that is in the
same class of drugs as paclitaxel and docetaxel. Ganite and
Genasense are available on a "
named-patient
" basis in countries outside the United States. For more
information about Genta, please visit our website at:
http://www.genta.com//
.
Safe Harbor
This press release may contain forward-looking statements with
respect to business conducted by Genta Incorporated. By their
nature, forward-looking statements and forecasts involve risks and
uncertainties because they relate to events and depend on
circumstances that will occur in the future. Such
forward-looking statements include those that express plan,
anticipation, intent, contingency, goals, targets, or future
developments and/or otherwise are not statements of historical
fact. The words "potentially", "anticipate", "could", "calls
for", and similar expressions also identify forward-looking
statements. The Company does not undertake to update any
forward-looking statements. Factors that could affect actual
results include, without limitation, risks associated with:
- the Company's ability to obtain necessary regulatory approval
for Genasense® from the U.S. Food and Drug Administration
("FDA");
- the safety and efficacy of the Company's products or product
candidates;
- the Company's assessment of its clinical trials;
- the commencement and completion of clinical trials;
- the Company's ability to develop, manufacture, license and
sell its products or product candidates;
- the Company's ability to enter into and successfully execute
license and collaborative agreements, if any;
- the adequacy of the Company's capital resources and cash flow
projections, the Company's ability to obtain sufficient financing
to maintain the Company's planned operations, or the Company's
risk of bankruptcy;
- the adequacy of the Company's patents and proprietary
rights;
- the impact of litigation that has been brought against the
Company; and
- the other risks described under Certain Risks and
Uncertainties Related to the Company's Business, as contained in
the Company's Annual Report on Form 10-K and Quarterly Report on
Form 10-Q.
There are a number of factors that could cause actual results
and developments to differ materially. For a discussion of
those risks and uncertainties, please see the Company's Annual
Report on Form 10-K for 2008 and its most recent quarterly report
on Form 10-Q.
SOURCE: Genta Incorporated
CONTACT:
Genta Investor Relations
info@genta.com
