Talon Therapeutics, Inc. Reports First Quarter 2013 Financial Results

Talon Therapeutics, Inc. Reports First Quarter 2013 Financial Results

SOUTH SAN FRANCISCO, Calif., May 15, 2013 (GLOBE NEWSWIRE) -- Talon
Therapeutics, Inc., (OTCQB:TLON), today reported financial results for the
three months ended March 31, 2013.

Corporate Highlights:

  *Manufactured and packaged commercial lots of Marqibo® for the treatment of
    Philadelphia chromosome negative adult acute lymphoblastic leukemia (ALL)
    patients in second or greater relapse or whose disease has progressed
    following two or more prior lines of anti-leukemia therapy.
  *Increased number of clinical sites to 88 with enrollment reaching 164
    patients in the Phase 3 Marqibo® trial, named OPTIMAL>60, for elderly
    patients with newly diagnosed non-Hodgkin's lymphoma (NHL). Initiation of
    the additional sites in 2013 is expected to accelerate patient accrual. 
  *Completion of enrollment in the Phase 2 trial of Menadione Topical Lotion
    (MTL) sponsored and conducted by the Mayo Clinic. The study assessed the
    effectiveness of MTL in preventing skin toxicities for patients taking
    biologic and small molecule EGFR inhibitors for anti-cancer therapy. The
    Mayo Clinic will perform analysis from data collected on the subjects.
  *Publication of the Marqibo® relapsed and refractory adult ALL trial
    results in the Journal of Clinical Oncology in February 2013. In March
    2013, the Cancer Chemotherapy and Pharmacology Journal published our paper
    titled, "Marqibo® improves the pharmacokinetics and pharmacodynamics of
    vincristine." Additional papers have been submitted to various journals
    and are awaiting journal acceptance.

Three Months EndedMarch 31, 2013Unaudited Financial Results

For the three months endedMarch 31, 2013, Talon reported a net loss of$17.5
millionand deemed dividends attributable to preferred stock of$5.1 million,
which when combined, resulted in a net loss applicable to common stockholders
of$22.6 million, or$1.03per share. This compares to a net loss of$30.5
millionand deemed dividends of$5.6 million, which when combined, resulted in
a net loss applicable to common stockholders of$36.1 million, or$1.66per
share, for the three months endedMarch 31, 2012. The change in fair value of
Talon's preferred stockholders' rights to purchase additional shares of
preferred stock contributed to$11.6 million, or$0.53per share, of the total
net loss applicable to common stockholders for the three months endedMarch
31, 2013. The change in fair value of Talon's preferred stockholders' right to
purchase additional shares of preferred stock is primarily driven by
fluctuations in price of Talon's common stock.The deemed dividends
attributable to preferred stock contributed to $0.23per share of the total
net loss applicable to common stockholders for the three months endedMarch
31, 2013.

Total operating expenses for the three months endedMarch 31, 2013were$4.7
million, compared with$4.4 millionfor the three months endedMarch 31, 2012.
Research and development expenses were$2.8 millionfor the three months
endedMarch 31, 2013, compared with$2.7 millionfor the corresponding period
in the preceding year. General and administrative expenses were$1.9
millionfor the three months ended March 31, 2013, compared with$1.7
millionfor the corresponding period in the preceding year.

As ofMarch 31, 2013, the Company had cash and cash equivalents of$4.1
million.Cash used in operations was$4.8 millionfor the three months
endedMarch 31, 2013.

About Marqibo® (vincristine sulfate liposome injection)

Marqibo is a novel, targeted Optisome™ encapsulated formulation product
candidate of the FDA-approved anticancer drug vincristine.Talon is primarily
developing Marqibo for the treatment of Ph- adult ALL. Vincristine, a
microtubule inhibitor, is FDA-approved for ALL and is widely used as a single
agent and in combination regimens for treatment for hematologic malignancies
such as lymphomas and leukemias.Talon's encapsulation formulation is designed
to provide prolonged circulation of the drug in the blood and accumulation at
the tumor site. These characteristics are intended to increase the dose of
vincristine delivered in a safe and effective manner.

Talon has received orphan drug and fast track designations for Marqibo for the
treatment of adult ALL from the U.S. Food and Drug Administration. Marqibo has
also received orphan drug designation in adult ALL from the European Medicines
Evaluation Agency.

Please see important safety information below and the full prescribing
information for Marqibo at www.marqibo.com.

Indication and usage

Marqibo is a liposomal vinca alkaloid indicated for the treatment of adult
patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic
leukemia (ALL) in second or greater relapse or whose disease has progresses
following two or more anti-leukemia therapies. This indication is based on
overall response rate. Clinical benefit such as improvement in overall
survival has not been verified.

Important safety information

CONTRAINDICATIONS

  *Marqibo is contraindicated in patients with demyelinating conditions
    including Charcot-Marie-Tooth syndrome
  *Marqibo is contraindicated in patients with hypersensitivity to
    vincristine sulfate or any of the other components of Marqibo (vinCRIStine
    sulfate LIPOSOME injection
  *Marqibo is contraindicated for intrathecal administration

                                   WARNING

         See full prescribing information for complete boxed warning.

  *For Intravenous Use Only -- Fatal if Given by Other Routes
  *Death has occurred with intrathecal use
  *Marqibo (vinCRIStine sulfate LIPOSOME injection) has different dosage
    recommendations than vinCRIStine sulfate injection. Verify drug name and
    dose prior to preparation and administration to avoid overdosage.

Warnings and Precautions

For Intravenous Use Only

For Intravenous use only. Fatal if given by other routes.

Extravasation Tissue Injury

Only administer through a secure and free-flowing venous access line. If
extravasation is suspected, discontinue infusion immediately and consider
local treatment measures.

Neurologic Toxicity

Sensory and motor neuropathies are common and are cumulative. Monitor patients
for symptoms of neuropathy, such as hypoesthesia, hyperesthesia, paresthesia,
hyporeflexia, areflexia, neuralgia, jaw pain, decreased vibratory sense,
cranial neuropathy, ileus, burning sensation, arthralgia, myalgia, muscle
spasm, or weakness, both before and during treatment. Orthostatic hypotension
may occur. The risk of neurologic toxicity is greater if Marqibo is
administered to patients with preexisting neuromuscular disorders or when
other drugs with risk of neurologic toxicity are being given. In the studies
of relapsed and/or refractory adult ALL patients, Grade >= 3 neuropathy events
occurred in 32.5% of patients. Worsening neuropathy requires dose delay,
reduction, or discontinuation of Marqibo.

Myelosuppression

Monitor complete blood counts prior to each dose of Marqibo. If Grade 3 or 4
neutropenia, thrombocytopenia, or anemia develops, consider Marqibo dose
modification or reduction as well as supportive care measures.

Tumor Lysis Syndrome

Tumor lysis syndrome (TLS) may occur in patients with ALL receiving Marqibo.
Anticipate, monitor for, and manage.

Constipation and Bowel Obstruction

Ileus, bowel obstruction, and colonic pseudo-obstruction have occurred.
Marqibo can cause constipation. Institute a prophylactic bowel regimen to
mitigate potential constipation, bowel obstruction, and/or paralytic ileus,
considering adequate dietary fiber intake, hydration, and routine use of stool
softeners, such as docusate. Additional treatments, such as senna, bisacodyl,
milk of magnesia, magnesium citrate, and lactulose may be considered.

Fatigue

Marqibo can cause severe fatigue. Marqibo dose delay, reduction, or
discontinuation may be necessary.

Hepatic Toxicity

Fatal liver toxicity and elevated levels of aspartate aminotransferase have
occurred. Elevated levels of aspartate aminotransferase of Grade >=3 occurred
in 6-11% of patients in clinical trials. Monitor hepatic function tests.
Reduce or interrupt Marqibo for hepatic toxicity.

Embryofetal Toxicity

Marqibo can cause fetal harm when administered to a pregnant woman.
Vincristine sulfate liposome injection was teratogenic or caused embryo-fetal
death in animals. Women of childbearing potential should avoid becoming
pregnant while being treated with Marqibo. There are no adequate and
well-controlled studies of Marqibo in pregnant women and there were no reports
of pregnancy in any of the clinical studies in the Marqibo clinical
development program. If this drug is used during pregnancy, or if the patient
becomes pregnant while taking this drug, the patient should be apprised of the
potential hazard to a fetus [see Use in Specific Populations].

Adverse Reactions

The most common adverse reactions (>30%) were constipation (57%), nausea
(52%), pyrexia (43%), fatigue (41%), peripheral neuropathy (39%), febrile
neutropenia (38%), diarrhea (37%), anemia (34%), decreased appetite (33%), and
insomnia (32%).

The most commonly reported SAEs included febrile neutropenia (20.5%), pyrexia
(13.3%), hypotension (7.2%), respiratory distress (6.0%), and cardiac arrest
(6.0%).

Twenty-eight percent of patients experienced adverse reactions leading to
treatment discontinuation. The most common adverse reactions that caused
treatment discontinuation were peripheral neuropathy (10%), leukemia-related
(7%), and tumor lysis syndrome (2%).

Deaths occurred in 23% of patients in study 1. The non-leukemia related causes
of deaths were brain infarct (1), intracerebral hemorrhage (2), liver failure
(1), multi-system organ failure (2), pneumonia and septic shock (3),
respiratory failure (4), pulmonary hemorrhage (1), and sudden cardiac death
(1).

Drug Interactions

No formal drug interaction studies have been conducted with Marqibo. Marqibo
is expected to interact with drugs known to interact with non-liposomal
vincristine sulfate.

Simultaneous oral or intravenous administration of phenytoin and
antineoplastic chemotherapy combinations that included non-liposomal
vincristine sulfate has been reported to reduce blood levels of phenytoin and
to increase seizure activity.

CYP3A Interactions

Vincristine sulfate, the active agent in Marqibo, is a substrate for
cytochrome P450 3A isozymes (CYP3A); therefore, the concomitant use of strong
CYP3A inhibitors should be avoided (e.g., ketoconazole, itraconazole,
voriconazole, posaconazole, clarithromycin, atazanavir, indinavir, nefazodone,
nelfinavir, ritonavir, saquinavir, telithromycin). Similarly, the concomitant
use of strong CYP3A inducers should be avoided (e.g., dexamethasone,
phenytoin, carbamazepine, rifampin, rifabutin, rifapentine, phenobarbital, St.
John's Wort).

P-glycoprotein Interactions

Vincristine sulfate, the active agent in Marqibo, is also a substrate for
P-glycoprotein (P-gp). The effect of concomitant use of potent P-gp inhibitors
or inducers has not been investigated; it is likely that these agents will
alter the pharmacokinetics or pharmacodynamics of Marqibo. Therefore the
concomitant use of potent P-gp inhibitors or inducers should be avoided.

Use in Specific Populations

Pregnancy

Pregnancy Category D [see Warnings and Precautions]

Based on its mechanism of action and findings from animal studies, Marqibo can
cause fetal harm when administered to pregnant women.

If this drug is used during pregnancy, or if the patient becomes pregnant
while taking this drug, the patient should be apprised of the potential hazard
to a fetus. In an embryofetal developmental study, pregnant rats were
administered vincristine sulfate liposome injection intravenously during the
period of organogenesis at vincristine sulfate doses of 0.022 to 0.09
mg/kg/day. Drug-related adverse effects included fetal malformations (skeletal
and visceral), decreases in fetal weights, increased numbers of early
resorptions and post-implantation losses, and decreased maternal body weights
Malformations were observed at doses >= 0.044 mg/kg/day in animals at systemic
exposures approximately 20-40% of those reported in patients at the
recommended dose.

Nursing Mothers

It is not known whether this drug is excreted in human milk. Because many
drugs are excreted in human milk and because of the potential for serious
adverse reactions in nursing infants, a decision should be made whether to
discontinue nursing or discontinue the drug taking into account the importance
of the drug to the mother.

Pediatric Use

The safety and effectiveness of Marqibo in pediatric patients have not been
established.

Geriatric Use

Safety and effectiveness in elderly individuals have not been established. In
general, dose selection for an elderly patient should be cautious, reflecting
the greater frequency of decreased hepatic, renal, or cardiac function, and of
concomitant disease or other drug therapy.

Renal Impairment

The influence of renal impairment on the safety, efficacy, and
pharmacokinetics of Marqibo has not been evaluated.

Hepatic Impairment

Non-liposomal vincristine sulfate is excreted primarily by the liver. The
influence of severe hepatic impairment on the safety and efficacy of Marqibo
has not been evaluated. The pharmacokinetics of Marqibo was evaluated in
patients with moderate hepatic dysfunction (Child-Pugh B) secondary to
melanoma liver metastases. The dose-adjusted maximum plasma concentration
(C[max]) and area under the concentration-time curve (AUC) of Marqibo in
patients with moderate hepatic impairment was comparable to the C[max] and AUC
of patients with ALL who had otherwise normal hepatic function.

AboutTalon Therapeutics

Talon Therapeutics, Inc.is a biopharmaceutical company dedicated to seizing
upon medical opportunities, efficiently and expertly leading product
candidates through clinical development, and transferring value to patients,
patient care providers, shareholders, corporate partners, and employees.

In addition to Marqibo® (vincCRIStine sulfate LIPOSOME injection) which
received accelerated approval from the US FDA inAugust 2012, Talon has
additional pipeline opportunities some of which like Marqibo, have the
potential to improve delivery and enhance the therapeutic benefits of well
characterized, proven chemotherapies and enable high potency dosing without
increased toxicity.

Additional information onTalon Therapeuticscan be found atwww.talontx.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are
often, but not always, made through the use of words or phrases such as
"anticipates," "expects," "plans," "believes," "intends," and similar words or
phrases. Such statements involve risks and uncertainties that could cause
Talon's actual results to differ materially from the anticipated results and
expectations expressed in these forward-looking statements. These statements
are based on current expectations, forecasts and assumptions that are subject
to risks and uncertainties, which could cause actual outcomes and results to
differ materially from these statements. Such risks and uncertainties include:
Talon's ability to commercialize Marqibo alone or with a strategic partner;
the likelihood of completing a strategic transaction; Talon's lack of
experience commercializing pharmaceutical products; that Talon will be able to
secure the additional capital necessary to fund operational activities for
Marqibo, including its ongoing research and development programs to
completion; Talon's reliance on third-party clinical research organizations to
develop its product candidates, and its lack of experience in developing
pharmaceutical products. Additional risks are described in the company's
Annual Report on Form 10-K for the year ended December 31, 2012 and its
Quarterly Report on Form 10-Q for the quarter endedMarch 31, 2013. Talon
assumes no obligation to update these statements, except as required by law.

TALON THERAPEUTICS, INC.
                                                                
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
                                                                
                                                       March31, December31,
                                                       2013      2012
                                                                
ASSETS                                                           
Current assets:                                                  
Cash and cash equivalents                               $4,114  $2,973
Inventory                                               383       283
Prepaid expenses and other current assets               249       238
Total current assets                                    4,746     3,494
                                                                
Property and equipment, net                             37        43
Restricted cash                                         34        34
Debt issuance costs, net                                471       518
Total assets                                            $5,288  $4,089
                                                                
LIABILITIES AND STOCKHOLDERS' DEFICIT                            
Current liabilities:                                             
Accounts payable and accrued liabilities                $3,845  $3,549
Investors' rights to purchase shares of Series A-3      21,775    14,276
Preferred Stock
Other short term liabilities                            2         3
                                                                
Total current liabilities                               25,622    17,828
Notes payable, net of discount                          25,063    24,833
Warrant liabilities, non-current                        705       563
Total long term liabilities                             25,768    25,396
Total liabilities                                       51,390    43,224
Redeemable convertible preferred stock; $0.001 par               
value:
10 million shares authorized, 0.73 million and 0.67
million shares issued and outstanding at March 31, 2013
and December 31, 2012, respectively; aggregate          53,896    47,914
liquidation value of $85.8 million and $77.9 million at
March 31, 2013 and December 31, 2012, respectively
                                                                
Stockholders' deficit:                                           
Common stock; $0.001 par value:                                  
600 million shares authorized, 22.0 million shares
issued and outstanding at March 31, 2013 and December   22        22
31, 2012, respectively
Additional paid-in capital                              141,090   136,563
Accumulated deficit                                     (241,110) (223,634)
Total stockholders' deficit                             (99,998)  (87,049)
Total liabilities, redeemable convertible preferred     $5,288  $4,089
stock and stockholders' deficit


TALON THERAPEUTICS, INC.
                                                                 
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share data)
(Unaudited)
                                                                 
                                                      ThreeMonthsEnded
                                                      March31,
                                                      2013        2012
Operating expenses:                                               
General and administrative                             $1,945    $1,685
Research and development                               2,809       2,742
Total operating expenses                               4,754       4,427
                                                                 
Loss from operations                                   (4,754)     (4,427)
                                                                 
Other expense:                                                    
Interest expense, net                                  (944)       (938)
Change in fair value of warrant liabilities           (142)       (455)
Change in fair value of investors' right to purchase   —           (1,007)
future shares of Series A-1 and A-2 preferred stock
Change in fair value of investors' right to purchase   (11,636)    (23,664)
future shares of Series A-3 preferred stock
Total other expense                                    (12,722)    (26,064)
                                                                 
Net loss                                               $(17,476) $(30,491)
Deemed dividends attributable to preferred stock in    (1,847)     (1,262)
connection with accretion
Deemed dividends attributable to preferred stock in    (3,263)     (4,352)
connection with embedded conversion features
                                                                 
Net loss applicable to common stock                    (22,586)    (36,105)
                                                                 
Net loss per share applicable to common stock, basic   $(1.03)   $(1.66)
and diluted
                                                                 
Weighted average shares used in computing net loss per 22,011      21,788
share, basic and diluted
                                                                 
Comprehensive loss                                     $(17,476) $(30,491)

CONTACT: Talon Therapeutics, Inc.
         Investor & Media Contacts:
         Investor Relations Team
         (650) 588-6641
         investor.relations@talontx.com

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