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Filing
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): | January 5, 2009 |
ADVENTRX Pharmaceuticals, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Delaware | 001-32157 | 84-1318182 |
_____________________ (State or other jurisdiction |
_____________ (Commission |
______________ (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
6725 Mesa Ridge Road, Suite 100, San Diego, California | 92121 | |
_________________________________ (Address of principal executive offices) |
___________ (Zip Code) |
Registrants telephone number, including area code: | 858-552-0866 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.05 Costs Associated with Exit or Disposal Activities.
On January 5, 2009, ADVENTRX Pharmaceuticals, Inc. (the "Company") committed to a plan of termination that resulted in a work force reduction of six employees in order to reduce operating costs. The Company commenced notification of employees affected by the workforce reduction on January 5, 2009, and the workforce reduction was completed on January 5, 2009. Each affected employee will be eligible to receive a severance payment and an additional health benefit allowance, which each affected employee may use, at such employee’s discretion, to pay the premiums required to continue the employee’s group health care coverage under COBRA or any other health care related expenses. Payment of these severance benefits to each affected employee is contingent on the affected employee entering into a separation agreement with the Company, which agreement includes a general release of claims against the Company. These severance benefits will be payable in substantially equal installments over a specifie
d severance period in accordance with the Company’s standard payroll practices assuming the affected employee makes herself or himself, as applicable, available, as needed, without any additional compensation, to answer business-related questions by telephone or in person as deemed reasonably necessary by the Company.
As a result of the reduction in force, the Company estimates that it will record severance-related charges of approximately $200,000, which estimate assumes each affected employee enters into a separation agreement with the Company. Approximately $180,000 of this charge represents cash payments that will be made to certain of the affected employees for the agreed upon severance payments and related employer taxes. Approximately $20,000 of this charge represents cash payments that will be made to certain of the affected employees for the agreed upon health benefit allowance. Approximately $160,000 of the severance-related charges are expected to be recorded in the first quarte
r of 2009 and the additional $40,000 will be recorded in the second quarter of 2009. The severance-related charges that the Company expects to incur in connection with the reduction in force are subject to a number of assumptions, including as set forth above, and actual results may differ. The Company may also incur other charges not currently contemplated due to events that may occur as a result of, or associated with, the plan of termination.
Item 8.01 Other Events.
On January 5, 2009, the Company issued a press release announcing, among other things, its workforce reduction and that its employment relationship with Mark N. K. Bagnall had ended. A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The list of exhibits called for by this Item is incorporated by reference to the Exhibit Index filed with this Current Report on Form 8-K.
This current report on Form 8-K contains forward-looking statements, including, but not limited to, statements related to the expected severance costs and related estimated severance-related charges and the Company’s plans to reduce operating costs. These forward-looking statements are based on the Company’s current estimates and expectations and inherently involve significant risks and uncertainties. The Company’s actual financial results could differ materially from those anticipated in such forward-looking statements as a result of those risks and uncertainties, which include, without limitation, the risk that the Company’s recent cost-cutting measures, including those announced today, as well as any future workforce reductions and/or reductions/delays in spending, will negatively impact the Company’s development and commercialization plans, including its ability to achieve on time its previously stated goals; the risk that the Company will be unable to consummate a strategic or partnering transaction or raise sufficient capital to fund the projects necessary to meet its goals, including funding the continued development and commercialization of ANX-530 or ANX-514; the risk that the departure of the Company’s former Chief Executive Officer and President, the Company’s Executive Vice President and Chief Financial Officer and/or the Company’s leadership by a committee of executive officers will negatively impact the Company’s ability to execute its business plan or to maintain effective disclosure controls and procedures or internal control over financial reporting; the risk the FDA will determine that ANX-530 and Navelbine® are not bioequivalent, including as a result of performing pharmacokinetic equivalence analysis based a patient population other than the population on which the Company based its analysis; the risk that the on-going clinical study of ANX-514 does not demonstrate pha rmacokinetic equivalence or bioequivalence with Taxotere®; the risk of investigator bias in reporting adverse events as a result of the open-label nature of the ANX-530 bioequivalence clinical study, including bias that increased the reporting of adverse events associated with Navelbine and/or that decreased the reporting of adverse events associated with ANX-530; difficulties or delays in manufacturing, obtaining regulatory approval for and marketing ANX-530 and ANX-514, including validating commercial manufacturers and suppliers and the potential for automatic injunctions regarding FDA approval of ANX-514; the potential for regulatory authorities to require additional preclinical work or other clinical requirements to support regulatory filings, including prior to the submission or the approval of an NDA for ANX-530 and ANX-514; the risk that the performance of third parties on whom the Company relies to conduct its studies or evaluate the data, including clinical investigators, expert data monitoring committees, contract laboratories and contract research organizations, may be substandard, or they may fail to perform as expected; the risk that the Company’s stockholders will not approve a strategic or capital-raising transaction recommended by the Company’s Board of Directors; and other risks and uncertainties more fully described in the Company’s periodic filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this current report. The Company does not intend to update any forward-looking statement in this current report to reflect events or circumstances arising after the date on which it is filed with the Securities and Exchange Commission.
SIGNATURES
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. | ||||
January 5, 2009 | By: |
/s/ Patrick L. Keran
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Name: Patrick L. Keran | ||||
Title: Vice President, Legal |
Exhibit Index
Exhibit No. | Description | |
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99.1
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Press Release of ADVENTRX Pharmaceuticals, Inc. dated January 5, 2009 |
ADVENTRX ANNOUNCES FURTHER COST-CUTTING MEASURES
| 55% Reduction in Staff Since Start of Q4 2008 |
| Evaluation of strategic alternatives on-going |
| Executive VP Steps Down and Resumes Board Role |
SAN DIEGO January 5, 2009 ADVENTRX Pharmaceuticals, Inc. (NYSE Alternext US: ANX) announced today that it has implemented a further reduction-in-force in an effort to extend its remaining cash and to prepare itself for a strategic transaction. This follows a reduction implemented in October 2008. In all, the Companys workforce has declined by approximately 55% since the beginning of the fourth quarter of 2008. Following the current reduction and other planned departures, the Company will have fourteen employees. In addition, the Company has substantially reduced or delayed spending on third-party consulting and vendor services, including contract manufacturing.
ADVENTRXs remaining employees will focus their efforts on continuing to evaluate strategic options, as well as continuing the Companys on-going bioequivalence study of ANX-514 (docetaxel emulsion) and activities related to submitting a New Drug Application for ANX-530 (vinorelbine emulsion). The cost-cutting measures announced today should not have a direct and immediate effect on the Companys previously announced timelines. However, any further cost-reductions or expense reductions/delays likely will have a negative impact the Companys development and commercialization plans.
As part of its overall cost-cutting measures, Mark N. K. Bagnall, who in April 2008 joined the Company as Executive Vice President and Chief Financial Officer, agreed to return to his prior role as solely a member of the Companys Board of Directors, and has agreed to provide consulting services on an as-needed basis.
Its never easy to let go employees, particularly those who have been with the Company for many years and who have made contributions to the Company. Though difficult, the changes we announce today are the right moves for the Companys stockholders and provide the best opportunity to find the right strategic partner or partners, stated Jack Lief, Chair of the ADVENTRX Board of Directors. Marks willingness to join the Company as an executive and now to transition back to his prior Board role has been tremendously valuable, both to the Board and to management, and we thank him for his dedication to ADVENTRX, added Mr. Lief.
At this time, when conserving cash is vital, I believe I can best help the Company achieve its goals by transitioning back to my prior role as a Board member, stated Mark Bagnall. I plan to stay involved with the Company and will remain engaged in the Companys on-going strategic partnering discussions.
Strategic Opportunities
ADVENTRX is seeking partners for one or both of its two late-stage oncology programs, both of which
are novel reformulations of currently approved products and are designed to improve the safety
profiles of the approved products without affecting efficacy. ANX-514 (docetaxel emulsion for
injection) is a reformulation of the blockbuster chemotherapeutic agent, Taxotere®. In 2007, the
aggregate worldwide market for Taxotere was in excess of $3 billion. ANX-530 (vinorelbine
injectable emulsion) is a reformulation of Navelbine® which, despite being a generic product for a
number of years, still sells in excess of $200 million a year world-wide. Both of the Companys
product candidates have the potential to be on the market in 2010.
About ANX-530 (vinorelbine emulsion)
ANX-530 is a novel emulsion formulation of the chemotherapy drug vinorelbine. ANX-530 emulsifies
vinorelbine into a homogeneous suspension of nanoparticles that is designed to protect the venous
endothelium during administration into a peripheral vein. Navelbine®, a branded formulation of
vinorelbine, is approved in the U.S. to treat advanced non-small cell lung cancer as a single agent
or in combination with cisplatin, and approved in the European Union to treat non-small cell lung
cancer and advanced or metastatic breast cancer.
About ANX-514 (docetaxel emulsion)
ANX-514 is a novel nano-emulsion formulation of the chemotherapy drug docetaxel, which is marketed
under the brand name Taxotere. ANX-514 is formulated without polysorbate 80 or other detergents and
is intended to reduce the severity and/or incidence of hypersensitivity reactions. Docetaxel is an
anti-cancer agent that acts by disrupting the cellular microtubular network that is essential for
cell division. Immunosuppressant premedication is recommended for docetaxel therapy to reduce the
incidence and severity of hypersensitivity reactions. Docetaxel is approved to treat breast,
non-small cell lung, prostate, gastric and head and neck cancers.
About ADVENTRX Pharmaceuticals
ADVENTRX Pharmaceuticals is a biopharmaceutical company focused on in-licensing, developing and
commercializing proprietary product candidates primarily for the treatment of cancer and infectious
disease. The Company seeks to improve the performance and commercial potential of existing
treatments by addressing problems associated with these treatment regimens. In December 2008, the
Company announced that it is exploring a range of strategic options, including the sale or
disposition of one or more of its product candidate programs, a strategic business merger and other
transactions that maximize the value of the Companys assets. More information can be found on
ADVENTRXs web site at www.adventrx.com.
Forward Looking Statements
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 and assumptions that, if they
materialize or do not prove to be accurate, could cause ADVENTRXs results to differ materially
from historical results or those expressed or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to: the risk that ADVENTRX will be unable to
consummate a strategic or partnering transaction or raise sufficient capital to fund the projects
necessary to meet its goals, including funding the continued development and commercialization of
ANX-530 or ANX-514; the risk that the Companys recent cost-cutting measures, including those
announced today, as well as any future workforce reductions and/or reductions/delays in spending,
will negatively impact the Companys development and commercialization plans, including its ability
to achieve on time its previously stated goals; the risk that the departure of the Companys former
Chief Executive Officer and President and Executive Vice President and Chief Financial Officer
and/or ADVENTRXs leadership by a committee of executive officers will negatively impact ADVENTRXs
ability to execute its business plan or to maintain effective disclosure controls and procedures or
internal control over financial reporting; the risk the FDA will determine that ANX-530 and
Navelbine are not bioequivalent, including as a result of performing pharmacokinetic equivalence
analysis based a patient population other than the population on which ADVENTRX based its analysis;
the risk that the on-going clinical study of ANX-514 does not demonstrate pharmacokinetic
equivalence or bioequivalence; the risk of investigator bias in reporting adverse events as a
result of the open-label nature of the ANX-530 bioequivalence clinical study, including bias that
increased the reporting of adverse events associated with Navelbine and/or that decreased the
reporting of adverse events associated with ANX-530; difficulties or delays in manufacturing,
obtaining regulatory approval for and marketing ANX-530 and ANX-514, including validating
commercial manufacturers and suppliers and the potential for automatic injunctions regarding FDA
approval of ANX-514; the potential for regulatory authorities to require additional preclinical
work or other clinical requirements to support regulatory filings, including prior to the
submission or the approval of an NDA for ANX-530 and ANX-514; the risk that the performance of
third parties on whom ADVENTRX relies to conduct its studies or evaluate the data, including
clinical investigators, expert data monitoring committees, contract laboratories and contract
research organizations, may be substandard, or they may fail to perform as expected; the risk that
ADVENTRXs stockholders will not approve a strategic or capital-raising transaction recommended by
ADVENTRXs Board of Directors; and other risks and uncertainties more fully described in ADVENTRXs
press releases and periodic filings with the Securities and Exchange Commission. ADVENTRXs 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. ADVENTRX does not intend to revise or update any forward-looking statement set forth in this press release to reflect events or circumstances arising after the date on which it was made.
Investor Contact:
ADVENTRX Pharmaceuticals
Ioana C. Hone
858-552-0866
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