ADVENTRX Pharmaceuticals, Inc.
Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 9, 2006
ADVENTRX Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in Charter)
         
Delaware   001-32157   84-1318182
(State or Other Jurisdiction of
Incorporation)
  (Commission File No.)   (IRS Employer Identification No.)
6725 Mesa Ridge Road, Suite 100
San Diego, CA 92121

(Address of Principal Executive Offices and Zip Code)
N/A
(Former name or former address if changed since last report)
Registrant’s telephone number, including area code: (858) 552-0866
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition
Item 9.01. Financial Statements and Exhibits
SIGNATURE
INDEX TO EXHIBITS
EXHIBIT 99.1


Table of Contents

Item 2.02. Results of Operations and Financial Condition.
On November 9, 2006, ADVENTRX Pharmaceuticals, Inc. issued a press release announcing its financial results for the quarterly period ended September 30, 2006. A copy of this press release is furnished as Exhibit 99.1 hereto
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
     The list of exhibits called for by this Item is incorporated by reference to the Index to Exhibits filed with this report.

 


Table of Contents

SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
             
 
      ADVENTRX Pharmaceuticals, Inc.    
 
           
Dated: November 9, 2006
  By:   /s/ Evan M. Levine
 
Name: Evan M. Levine
   
 
      Title: Chief Executive Officer    

 


Table of Contents

INDEX TO EXHIBITS
99.1   Press Release, dated November 9, 2006.

 

Exhibit 99.1
 

EXHIBIT 99.1
ADVENTRX ANNOUNCES 2006 THIRD QUARTER FINANCIAL RESULTS
SAN DIEGO – November 9, 2006 – ADVENTRX Pharmaceuticals, Inc. (Amex: ANX) today announced financial results for the quarterly period ended September 30, 2006.
ADVENTRX reported loss from operations of $5.1 million for the third quarter of 2006, compared with loss from operations of $3.5 million for the third quarter of 2005. Operating expenses grew as expected and were primarily due to the Company’s ongoing clinical trials of CoFactorâ. Net loss, which includes gain on fair value of warrants of $498,000, was $4.6 million, or $0.06 per share, for the third quarter of 2006, compared with a net loss, which included loss on fair value of warrants of $13.0 million, of $16.5 million, or $0.26 per share, for the third quarter of 2005.
“In the third quarter we continued to make significant progress in the development of CoFactor and in the preparation of our other product candidates for clinical development,” said Evan M. Levine, ADVENTRX chief executive officer. “In September, we announced that we completed patient enrollment in our 300-patient CoFactor Phase IIb clinical trial for metastatic colorectal cancer (mCRC), for which we expect to announce data in the second half of 2007. In addition, we continue to enroll patients and initiate sites for our CoFactor Phase III pivotal clinical trial for mCRC, and are making preparations for a clinical trial in refractory breast cancer. We expect to initiate this CoFactor clinical trial in refractory breast cancer and to file an investigational new drug application for a bioequivalency clinical trial for ANX-530, vinorelbine emulsion, in the fourth quarter of 2006.”
“In the third quarter, we strengthened our clinical and management teams with several key appointments. We added James Merritt, MD, an oncologist and accomplished biopharmaceutical executive, as president and chief medical officer, and Joachim Schupp, MD, a veteran of Novartis Pharma AG, as vice president of medical affairs. We also brought on Patrick Keran as general counsel and appointed Jack Lief, chairman and chief executive officer for Arena Pharmaceuticals, and Dr. Alex Denner, a member of the board of directors of ImClone Systems Incorporated and a managing director of entities affiliated with Carl Icahn, to our board of directors. I am pleased that top-tier individuals who understand our industry appreciate the value of our pipeline and are excited to participate in and help shape our success.”
Third Quarter and First Three Quarters of 2006 Financial Review
Research and development expenses for the third quarter of 2006 were $3.2 million, versus $1.9 million for the third quarter of 2005. This increase was due primarily to increased costs of the Phase IIb and Phase III CoFactor clinical trials as patients continued to be enrolled in the trials, as well as increased preclinical costs related to drug development.
General and administrative expenses for the 2006 third quarter were $2.1 million, compared with $1.7 million for the same period in 2005. This increase is due primarily to continuing costs related to being a publicly-held company and costs of continuing operations in support of research and development efforts.
For the nine months ended September 30, 2006, net loss was $22.9 million, or ($0.32) per share, compared with a net loss of $22.6 million, or ($0.39) per share, for the same period in 2005.
For the first nine months of 2006, research and development expenses were $8.9 million, compared with $5.9 million for the first nine months of 2005. The increase for the nine months is primarily due to expenses related to CoFactor clinical trials and hiring of personnel.
General and administrative expenses for first nine months of 2006 were $5.5 million, compared with $3.9 million for the same period in 2005. The increase was due to factors discussed above as well as increased personnel costs due to new hires and stock-based compensation charges.

 


 

ADVENTRX reported cash, cash equivalents and short-term investments of approximately $17.1 million as of September 30, 2006, compared with $22.6 million as of December 31, 2005, and no long-term debt. Subsequent to September 30, the Company announced a registered direct offering of 14,545,000 shares of common stock at a price of $2.75 per share for gross proceeds of approximately $40 million.
About ADVENTRX Pharmaceuticals
ADVENTRX Pharmaceuticals is a biopharmaceutical research and development company focused on commercializing low development risk pharmaceuticals for cancer and infectious disease that enhance the efficacy and/or safety of existing therapies. More information can be found on ADVENTRX’s web site at www.adventrx.com.
Forward Looking Statement
ADVENTRX cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors that, if they do not materialize or prove to be accurate, could cause ADVENTRX’s results to differ materially from historical results or those expressed or implied by such forward-looking statements. Such forward-looking statements are made based on management’s current expectations and beliefs and should not be regarded as a statement or representation by ADVENTRX that any of its plans, including its anticipated milestones, will be achieved on time or at all. The potential risks and uncertainties that could cause actual results to differ materially include, but are not limited to: the risk that ADVENTRX will be unable to raise sufficient capital to fund the projects necessary to meet its anticipated or stated goals and milestones; the potential to attract a strategic partner and the terms of any related transaction; the ability to timely enroll subjects in ADVENTRX’s current and anticipated clinical trials; the potential for CoFactor® and ADVENTRX’s other product candidates to receive regulatory approval for one or more indications on a timely basis or at all, and the uncertain process of seeking regulatory approval; other difficulties or delays in developing, testing, manufacturing and marketing of and obtaining regulatory approval for CoFactor® or ADVENTRX’s other product candidates; the potential for regulatory authorities to require additional preclinical work or other clinical requirements to support regulatory filings; the scope and validity of patent protection for CoFactor® and ADVENTRX’s other product candidates; and other risks and uncertainties more fully described in ADVENTRX’s press releases and periodic filings with the Securities and Exchange Commission. ADVENTRX’s public filings with the Securities and Exchange Commission are available at http://www.sec.gov.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date when made. All forward-looking statements are qualified in their entirety by this cautionary statement and ADVENTRX assumes no obligation to revise or update any forward-looking statement, including as set forth in this press release, to reflect events or circumstances arising after the date on which it was made.
Contact:
ADVENTRX Pharmaceuticals
Andrea Lynn
858-552-0866
[Tables to Follow]
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ADVENTRX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
Condensed Consolidated Statements of Operations
(unaudited)
                                 
    Three months ended September 30,     Nine months ended September 30,  
    2006     2005     2006     2005  
Net sales
  $     $     $     $  
Cost of goods sold
                       
 
                       
Gross margin
                       
Grant revenue
                       
Interest income
    221,271       159,373       709,912       261,292  
 
                       
 
    221,271       159,373       709,912       261,292  
 
                       
Operating expenses:
                               
Research and development
    3,223,554       1,870,465       8,941,147       5,893,288  
General and administrative
    2,055,441       1,737,052       5,545,370       3,929,546  
Depreciation and amortization
    49,326       34,331       127,528       96,422  
In-process research and development
                10,422,130        
Impairment loss — write off of goodwill
                       
Interest expense
                       
Equity in loss of investee
                       
 
                       
Total operating expenses
    5,328,321       3,641,848       25,036,175       9,919,256  
 
                       
Loss from operations
    (5,107,050 )     (3,482,475 )     (24,326,263 )     (9,657,964 )
Gain (loss) on fair value of warrants
    497,869       (12,972,392 )     1,434,115       (12,972,392 )
 
                       
Loss before cumulative effect of change in accounting principle
    (4,609,181 )     (16,454,867 )     (22,892,148 )     (22,630,356 )
Cumulative effect of change in accounting principle
                       
 
                       
Net loss
    (4,609,181 )     (16,454,867 )     (22,892,148 )     (22,630,356 )
Preferred stock dividends
                       
 
                       
Net loss applicable to common stock
  $ (4,609,181 )   $ (16,454,867 )   $ (22,892,148 )   $ (22,630,356 )
 
                       
Net loss per common share – basic and diluted:
  $ (.06 )   $ (.26 )   $ (.32 )   $ (.39 )
 
                       
Weighted average shares – basic and diluted
    73,435,715       63,255,407       70,895,528       57,346,039  
 
                       

 


 

ADVENTRX PHARMACEUTICALS, INC.
(A Development Stage Enterprise)
Condensed Consolidated Balance Sheets
                 
    September 30,     December 31,  
    2006     2005  
    (unaudited)          
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 16,201,019     $ 14,634,618  
Accrued interest income
    13,384       10,214  
Prepaid expenses
    916,115       255,802  
Short-term investments
    894,489       7,958,458  
 
           
Total current assets
    18,025,007       22,859,092  
Property and equipment, net
    447,445       407,544  
Other assets
    301,305       355,137  
 
           
Total assets
  $ 18,773,757     $ 23,621,773  
 
           
 
               
Liabilities and Shareholders’ Deficiency
               
Current liabilities:
               
Accounts payable
  $ 73,584     $ 593,228  
Accrued liabilities
    1,873,091       930,274  
Accrued salary and related taxes
    435,911       173,398  
Warrant liability
    28,262,296       29,696,411  
 
           
Total current liabilities
    30,644,882       31,393,311  
Long-term liabilities
    41,019       57,078  
 
           
Total liabilities
    30,685,901       31,450,389  
 
           
Commitments and contingencies
               
Temporary equity:
               
Common stock subject to continuing registration, $.001 par value; 10,810,809 shares issued and outstanding
           
Shareholders’ deficiency:
               
Common stock, $0.001 par value. Authorized 200,000,000 shares; issued 63,260,334 shares in 2006 and 56,529,388 shares in 2005
    74,095       67,364  
Additional paid-in capital
    70,904,626       52,105,329  
Accumulated other comprehensive income (loss)
    870       (1,722 )
Deficit accumulated during the development stage
    (82,856,988 )     (59,964,840 )
Treasury stock, 23,165 shares at cost
    (34,747 )     (34,747 )
 
           
Total shareholders’ deficiency
    (11,912,144 )     (7,828,616 )
 
           
Total liabilities and shareholders’ deficiency
  $ 18,773,757     $ 23,621,773