Adherex Provides Corporate Update and Fiscal Year Ended December 31, 2012 Financial Results

Adherex Provides Corporate Update and Fiscal Year Ended December 31, 2012 
Financial Results 
RESEARCH TRIANGLE PARK, NORTH CAROLINA -- (Marketwire) -- 04/01/13 --
Adherex Technologies Inc. (TSX:AHX)(OTCQB:ADHXF), provided an update
on recent progress with its clinical programs and reported financial
results for the fiscal year ended December 31, 2012. All amounts are
in U.S. dollars unless otherwise specified. 
"During 2012, we made strong progress in advancing the development of
our late stage oncology compounds, eniluracil(EU) and sodium
thiosulfate(STS)," said Rosty Raykov, CEO of Adherex. "Preliminary
interim results presented in December 2012 from our Phase II trial
evaluating eniluracil (EU)+5-Fluouracil (5-FU) + leucovorin (LV) as
treatment for metastatic breast cancer (MBC) showed positive clinical
activity. The Children Oncology Group Phase III trial evaluating STS
as an otoprotectant after cisplatin exposure, completed enrollment of
135 children. We look forward to keeping you updated once the final
results of these important studies become available in the coming
months."  
Upcoming milestones 


 
--  Adherex intends to present final efficacy and safety results of the
    Phase II EU trial during the second or third quarter of 2013.  
    
--  Adherex also plans to meet with regulatory agencies in mid-2013 to
    discuss a proposed Phase III study to support a New Drug Application for
    eniluracil. 
    
--  Data from the Phase III COG ACCL0431 clinical trial with STS are
    expected to be announced during the second or third quarter of 2013.  
    
--  Pending favorable results from COG ACCL0431, Adherex plans to meet with
    regulatory agencies to discuss a New Drug Application for STS. 

 
Key accomplishments in 2012 


 
--  Completed enrollment of the Company's Phase II clinical trial for
    metastatic breast cancer comparing the oral regimen of EU/5-FU/LV
    (Treatment Arm 1) versus capecitabine (Xeloda(R)) (Treatment Arm 2) in
    December 2012. Patients who have disease progression in Arm 2 may
    crossover to take EU/5-FU/LV (Treatment Arm X). The Company expanded the
    initial enrollment target from 140 patients to 153 patients, exceeding
    initial recruitment expectations, and enrolled 24 patients in Arm X.
    Final efficacy and safety data is expected to be available during the
    second or third quarter of 2013. 
    
--  At the 2012 CTRC-AACR San Antonio Breast Cancer Symposium (SABCS),
    Adherex reported preliminary interim results from the Phase II trial in
    metastatic breast cancer patients. In particular, 9 patients who had
    rapid disease progression (within 70 days or 1 tumor scan) on Xeloda(R)
    treatment and crossed over to take EU/5-FU/LV experienced the following:
    --  89% had clinical benefit 
    --  33% had tumor responses 
    --  Ongoing median PFS of 117 days vs. 42 days while take Xeloda(R)
--  EU/5-FU/LV may enable these patients to continue with oral 5-FU and
    delay or avoid progressing to the more aggressive intravenous
    microtubule inhibitors. The toxicity of the oral EU/5-FU/LV regimen is
    expected to be considerably less than that of the two available
    intravenously administered alternatives, ixabepilone and eribulin. 
 
--  The Phase III trial of Sodium Thiosulfate (STS) conducted by the
    Children Oncology Group (COG ACCL0431) completed enrollment of 135
    pediatric patients, most of whom have diagnoses of one of five childhood
    cancers typically treated with intensive cisplatin therapy, including
    hepatoblastoma, germ cell tumor, osteosarcoma, neuroblastoma, and
    medulloblastoma. Results are expected during the second or third quarter
    of 2013. STS has received orphan drug designation in the US for the
    prevention of ototoxicity induced by platinum cancer chemotherapy in
    pediatric patients. 
    
--  Strengthened EU's intellectual property position with the Notice of
    Allowance from the U.S. Patent and Trademark Office (USPTO) under the
    Title of Invention: Methods for Administering DPD Inhibitors in
    Combination with 5-FU and 5-FU Prodrugs. This patent is based on Dr.
    Spector's discovery that high eniluracil: 5-FU ratios could interfere
    with the 5-FU antitumor activity and may have been an issue with earlier
    clinical trials.  

 
Financial Results  
The Company reported a net loss from operations of $3.6 million
excluding the $1.6 million non-cash loss on derivative warrants for
the fiscal year ended December 31, 2012, compared to a net loss from
operations of $3.4 million excluding the non-cash gain of $8.1
million in the same period in 2011. The increase in the net loss from
operations excluding the non-cash impact of derivative warrants is
primarily due to an increase in research and development expenses of
$0.6 million that was offset by decreased general and administrative
expenses of $0.4 million in the comparable periods  
Operating expenses, which exclude stock based compensation, were $3.3
million for the fiscal year ended December 31, 2012 compared to $3.2
million in 2011. The increase in operating expenses is primarily due
to the higher clinical trial expenditures related to the eniluracil
Phase II study offset by lower general and administration expenses.
Research and development expenses were $2.1 million, as compared to
$1.5 million in the same period in 2011 as there was a higher patient
participation in the Phase II study during 2012.  
Cash and cash equivalents totaled $2.3 million at December 31, 2012,
compared to $5.3 million at December 31, 2011. The decreased cash
balance is due to clinical trial and corporate expenses in the
period. At December 31, 2012, the Company had working capital
totaling approximately $1.7 million compared to $5.0 million as of
December 31, 2011.  
About Eniluracil 
Eniluracil is a mechanism-based inactivator of DPD, the enzyme that
rapidly breaks down 5-FU. Accordingly, Eniluracil increases the 5-FU
elimination half-life from about 15 minutes to 5 hours and enables
5-FU to be administered orally, making it 100% orally bioavailable.
In addition, Eniluracil prevents the formation of
alpha-fluoro-beta-alanine (F-Bal), the 5-FU-breakdown product. F-Bal
appears to cause hand-foot syndrome and neurotoxicity. It also
decreases the antitumor activity of 5-FU in laboratory animals.
Furthermore, because DPD is present in variable levels, the highly
variable and nonlinear pharmacokinetics of 5-FU become predictable
and linear when DPD is inactivated by Eniluracil in cancer patients.  
The weekly regimen used in the current Phase 2 trial is based on a
Phase 1 Eniluracil/5-FU/Leucovorin trial that produced durable tumor
responses and no hand-foot syndrome in advanced colorectal cancer
patients who were refractory to intravenous 5-FU/Leucovorin. In a
similar Phase 2 study with capecitabine, no tumor responses occurred
and 87% of the patients experienced hand-foot syndrome, a painful
condition that may require dosing interruptions and dose reductions.  
About Metastatic Breast Cancer 
Breast cancer is the second leading cause of cancer related death
among women, according to the National Cancer Institute. During 2012,
American Cancer Society estimates that 226,870 women were diagnosed
with breast cancer, while an estimated 39,510 women died from the
disease. FDA-approved therapies used to treat late-stage, refractory
breast cancer include capecitabine (Xeloda(R) ) for patients with
breast cancer resistant to paclitaxel and anthracycline-containing
chemotherapy; ixabepilone (Ixempra(R)) for patients with late-stage
disease after failure of an anthracycline, taxane and capecitabine;
ixabepilone plus capecitabine for patients with late-stage disease
after failure of anthracycline- and taxane-based chemotherapy;
eribulin mesylate (Halaven(R)) for patients with metastatic breast
cancer who have received at least two prior chemotherapy regimens for
late-stage disease. 
Xeloda(R) is a registered trademark of Genentech, a member of the
Roche Group.  
Ixempra(R) is a registered trademark of Bristol Myers Squibb  
Halaven(R) is a registered trademark of Eisai Pharmaceuticals 
About Sodium Thiosulfate (STS) 
STS is currently marketed for use in humans as part of a treatment
for cyanide poisoning. Adherex has licensed from Oregon Health &
Science University intellectual property rights for the use of STS as
a chemo protectant, and is developing STS as a protectant against the
hearing loss often caused by platinum-based anti-cancer agents in
children. Preclinical and clinical studies conducted by Oregon Health
& Science University and others have indicated that STS can
effectively reduce the incidence of hearing loss caused by
platinum-based anti-cancer agents. Adherex has received Orphan Drug
Designation in the United States for the use of STS in the prevention
of platinum-induced ototoxicity in pediatric patients. 
Hearing loss among children receiving platinum-based chemotherapy is
frequent, permanent and often severely disabling. The incidence of
hearing loss in these children depends upon the dose and duration of
chemotherapy, and many of these children require lifelong hearing
aids. There is currently no established preventive agent for this
hearing loss and only expensive, technically difficult and
sub-optimal cochlear (inner ear) implants have been shown to provide
some benefit. In addition, adults undergoing chemotherapy for several
common malignancies, including ovarian cancer, testicular cancer, and
particularly head and neck cancer and brain cancer, often receive
intensive platinum-based therapy and may experience severe,
irreversible hearing loss, particularly in the high frequencies. 
The selected financial data presented below is derived from our
audited consolidated financial statements, which were prepared in
accordance with U.S. generally accepted accounting principles. The
complete consolidated financial statements for the year ended
December 31, 2012 and management's discussion and analysis of
financial condition and results of operations will be available via
www.sec.gov and www.sedar.com.  


 
                                                                            
                                                                            
                                                                            
                           FINANCIAL CHARTS FOLLOW                          
                                                                            
                         Adherex Technologies Inc.                          
                          Selected Financial Data                           
            (U.S. dollars in thousands except per share amounts)            
                                              December 31,     December 31, 
Consolidated Balance Sheets:                          2012             2011 
----------------------------------------------------------------------------
Assets:                                                                     
Cash and cash equivalents                          $ 2,303          $ 5,297 
Other current assets                                    62               54 
                                          ----------------------------------
Total assets                                       $ 2,365          $ 5,351 
                                          ----------------------------------
                                          ----------------------------------
                                                                            
Liabilities and stockholders' equity:                                       
Current liabilities                                  $ 682            $ 394 
Derivative warrant liability                         6,640            5,077 
Other long-term liabilities                              -                - 
Total stockholders' equity                          (4,957)            (120)
                                          ----------------------------------
Total liabilities and stockholders' equity         $ 2,365          $ 5,351 
                                          ----------------------------------
                                          ----------------------------------
                                                                            
                                                                            
                                                                            
                                              December 31,     December 31, 
Consolidated Statements of Operations:                2012             2011 
                                          ----------------------------------
                                                                            
Revenue                                                $ -              $ - 
                                                                            
Operating expenses:                                                         
  Research and development                           2,075            1,494 
  Impairment of Capital Assets                         ---              --- 
  (Gain) on Deferred Lease Inducements                 ---              --- 
  General and administrative                         1,545            1,944 
                                          ----------------------------------
                                                                            
(Loss) from operations                              (3,620)          (3,438)
                                          ----------------------------------
                                                                            
    Other income (expense)                              (5)               9 
    Gain/(Loss) on derivative warrants              (1,563)           8,071 
    Interest income                                     25               43 
                                          ----------------------------------
                                                                            
Net income/(loss) and comprehensive (loss)        $ (5,163)         $ 4,685 
                                          ----------------------------------
                                          ----------------------------------
Basic net earnings/(loss) per common share         $ (0.21)          $ 0.20 
                                          ----------------------------------
                                          ----------------------------------

 
Except for historical information described in this press release,
all other statements are forward-looking. Forward-looking statements
are subject to certain risks and uncertainties inherent in the
Company's business that could cause actual results to vary, including
such risks that regulatory clinical and guideline developments may
change, scientific data may not be sufficient to meet regulatory
standards or receipt of required regulatory clearances or approvals,
clinical results may not be replicated in actual patient settings,
protection offered by the Company's patents and patent applications
may be challenged, invalidated or circumvented by its competitors,
the available market for the Company's products will not be as large
as expected, the Company's products will not be able to penetrate one
or more targeted markets, revenues will not be sufficient to fund
further development and clinical studies, the Company may not meet
its future capital needs, and its ability to obtain additional
funding, as well as uncertainties relative to varying product
formulations and a multitude of diverse regulatory and marketing
requirements in different countries and municipalities, and other
risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission including its Annual Report on
Form 10-K for the year ended December 31, 2012. Adherex Technologies,
Inc. disclaims any obligation to update these forward-looking
statements except as required by law. 
For a more detailed discussion of related risk factors, please refer
to our public filings available at www.sec.gov and www.sedar.com. 
Contacts:
Adherex Technologies Inc.
Rosty Raykov
Chief Executive Officer
(919) 636-5144
 
 
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