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Opexa Therapeutics Reports Second Quarter 2013 Financial Results and Provides Corporate Update

  Opexa Therapeutics Reports Second Quarter 2013 Financial Results and
  Provides Corporate Update

Business Wire

THE WOODLANDS, Texas -- August 14, 2013

Opexa Therapeutics, Inc. (NASDAQ: OPXA), a biotechnology company developing
Tcelna^®, a novel T-cell therapy for multiple sclerosis (MS), today reported
financial results for the quarter ended June 30, 2013 and provided an overview
of recent corporate developments.

Recent highlights include:

  *Clinical

       *Enrolled 68 patients as of August 8, 2013 in the Phase IIb ‘Abili-T’
         clinical study of Tcelna (imilecleucel-T) in patients with Secondary
         Progressive Multiple Sclerosis (SPMS). The Abili-T clinical trial is
         a randomized, double-blind, placebo-controlled study and will enroll
         180 patients through approximately 30 leading clinical sites in the
         U.S. and Canada;
       *Furthered the accumulation of comprehensive subject data to support
         Opexa’s Immune Monitoring Program initiative in conjunction with the
         Abili-T trial, including the potential identification of biomarkers
         for SPMS and further understanding of the immunopathology of SPMS;
         and
       *Presented baseline data from Opexa’s Immune Monitoring Program in a
         poster session at the 2013 Annual Meeting of the Consortium of
         Multiple Sclerosis Centers (CMSC) and the Fifth Cooperative Meeting
         with the Americas Committee for Treatment and Research in Multiple
         Sclerosis (ACTRIMS).

  *Financial

       *Closed an underwritten public offering of 12 million shares of common
         stock for gross proceeds of $18 million in August 2013, or net
         proceeds of approximately $16.2 million after underwriting discounts
         and commissions and estimated offering expenses.

  *Operational

       *Strengthened our team to advance Precision Immunotherapy™ in SPMS by
         hiring several talented individuals to further our development
         initiatives as well as enhance the manufacture and delivery of Tcelna
         to our patients enrolled in the Abili-T study.

“We are coming off a productive quarter with demonstrated progress in the
Abili-T clinical trial and the announcement of our recent public offering of
$18 million in shares of our common stock,” commented Neil K. Warma, Opexa’s
President and Chief Executive Officer. “We are pleased with the positive
response from the investment community and the proceeds raised from this
offering will allow us to focus on patient enrollment and trial execution.
Top-line data from the trial is expected in the first half of 2016.”

“The physician and patient community responded well earlier in the year to the
announcement of the option and license agreement we executed with Merck Serono
in February 2013. Following our receipt of the $5 million upfront option fee
from Merck Serono, we were able to redouble our efforts to focus on increasing
patient enrollment and executing on the Abili-T clinical trial. We believe
that the potential introduction of Tcelna as a safe and effective therapy for
individuals afflicted with SPMS may address a significant unmet medical need
that exists in the SPMS community.”

“We have implemented a comprehensive biomarker program as part of the Abili-T
study and were invited by the ACTRIMS committee to present baseline data
related to this immune monitoring program at their annual conference in June.
Throughout the course of the trial, this study is expected to yield some very
important data on the mechanism of action of Tcelna as well as the SPMS
indication. In addition, to support the expected increase in trial activities,
we added several key individuals to the Opexa team throughout the quarter
further strengthening our expertise in the area of precision immunotherapy,”
added Mr. Warma.

“As of June 30, 2013, our cash and cash equivalents totaled $5,028,280,
excluding $500,000 held in a controlled account,” stated Karthik
Radhakrishnan, Opexa’s Chief Financial Officer. “Our monthly burn rate for the
six months ending June 2013 was approximately $855,000 and is projected to
increase to approximately $1.2 million for the remaining six months of the
year given the expected increase in patient enrollment in the trial. With the
closing of the $18 million offering, we believe our cash runway should extend
into the second half of 2014.”

Second Quarter Financial Results

Opexa reported revenue of $348,837 and $568,937 for the three and six months
ended June 30, 2013, respectively. The revenue is related to the recognized
portion of the $5 million upfront payment received from Merck Serono in
conjunction with the February 2013 Option and License Agreement between Opexa
and Merck Serono. The unearned revenue will be recognized over the expected
term of Merck’s period to exercise its option to license Tcelna for multiple
sclerosis. No revenues were recognized during the three and six months ended
June 30, 2012.

Research and development expenses were $2,223,030 and $3,844,396 for the three
and six months ended June 30, 2013, respectively, compared with $1,558,208 and
$3,048,305 for the three and six months ended June 30, 2012, respectively. The
increase for the three and six months ended June 30, 2013 compared to the
three and six months ended June 30, 2012 was primarily due to an increase in
the procurement and use of supplies for product manufacturing and development,
the initiation of clinical sites and increasing enrollment of patients for the
ongoing clinical trial of Tcelna in SPMS and an increase in the number of
employees to support the ongoing clinical trial, and was partially offset by
costs associated with the training and qualification activities preceding the
commencement of the clinical trial in the second half of 2012.

General and administrative expenses for the three and six months ended June
30, 2013 were $750,605 and $1,853,040, respectively, compared with $529,566
and $1,345,762 for the three and six months ended June 30, 2012, respectively.
The increase for the three and six months ended June 30, 2013 compared to the
three and six months ended June 30, 2012 was primarily due to an increase in
business development activities and a modest increase in employees to support
the ongoing clinical trial, and was partially offset by a decrease in
professional fees.

Depreciation and amortization expense for the three and six months ended June
30, 2013 was $88,898 and $167,209, respectively, compared with $76,496 and
$143,851 for the three and six months ended June 30, 2012, respectively. The
increase in expense is primarily due to increases in depreciation for
laboratory and manufacturing equipment acquired during 2012 and 2013 to
support increased development activities.

Interest expense for the three and six months ended June 30, 2013 was $285,800
and $1,921,054 respectively, compared with $486 and $973 for the three and six
months ended June 30, 2012, respectively. The increase in interest expense for
the three months ended June 30, 2013 was primarily related to the amortized
debt discount and interest on the July 2012 convertible secured promissory
notes and the amortization of the financing fees over the term of the notes.
The increase in interest expense for the six months ended June 30, 2013 was
primarily related to the amortized debt discount and interest on both the July
2012 convertible secured promissory notes and the January 2013 convertible
promissory notes and the amortization of the financing fees over the term of
the notes. Interest expense for the three and six months ended June 30, 2012
related solely to the financing of insurance premiums.

Interest income for the three and six months ended June 30, 2013 was $3,066
and $4,940, respectively, compared with $59 and $195 for the three and six
months ended June 30, 2012, respectively.

Opexa reported a net loss for the three and six months ended June 30, 2013 of
$3.0 million, or $0.37 per share, and $7.17 million, or $0.94 per share,
respectively. For the same three and six month period ended June 30, 2012,
Opexa reported a net loss of $2.16 million, or $0.38, and $4.54 million, or
$0.79, respectively.

Cash and cash equivalents were $5,028,280 as of June 30, 2013 compared to
$592,004 as of December31, 2012. Inclusive of the $5 million upfront payment
received from Merck Serono in conjunction with the License and Option
Agreement, our financing activities generated approximately $9.5 million in
gross proceeds for the six months ended June 30, 2013.

For additional information please see Opexa’s Quarterly Report on Form 10-Q
filed today with the SEC.

Conference Call and Webcast Details

Opexa will conduct a conference call and webcast to provide a corporate update
and discuss the financial results at 8:00 a.m. Eastern Time today. To
participate in the conference call, dial in approximately ten minutes before
the scheduled 8:00 a.m. time to (253) 237-1170 or toll free at (877) 372-0867.
Please reference conference ID #31008302 while dialing into the call.

A live webcast of the call can also be accessed via the webcast link on our
website (www.opexatherapeutics.com) or by going to the following URL:

http://investor.shareholder.com/media/eventdetail.cfm?eventid=133472&CompanyID=OPXA&e=1&mediaKey=52AF10A2390CE08BC8D2847172A3B20C

There will be a brief Question & Answer session following management
commentary. Shareholders and interested parties are highly encouraged to
submit questions in advance by e-mail addressed to
kradhakrishnan@opexatherapeutics.com.

About Opexa

Opexa’s mission is to lead the field of Precision Immunotherapy™ by aligning
the interests of patients, employees and shareholders. The Company’s leading
therapy candidate, Tcelna^®, is a personalized T-cell immunotherapy that is in
a Phase IIb clinical development program (the Abili-T trial) for the treatment
of Secondary Progressive Multiple Sclerosis. Tcelna is derived from T-cells
isolated from the patient’s peripheral blood, expanded ex vivo, and
reintroduced into the patients via subcutaneous injections. This process
triggers a potent immune response against specific subsets of autoreactive
T-cells known to attack myelin.

About Multiple Sclerosis (MS)

Multiple Sclerosis is a chronic, inflammatory condition of the central nervous
system and is the most common, non-traumatic, disabling neurological disease
in young adults. It is estimated that approximately two million people have MS
worldwide.

While symptoms can vary, the most common symptoms of MS include blurred
vision, numbness or tingling in the limbs and problems with strength and
coordination. The relapsing forms of MS are the most common. The Secondary
Progressive form of MS represents about a third of the MS patient population.

For more information visit the Opexa Therapeutics website at
www.opexatherapeutics.com

About Tcelna

Tcelna is a potential personalized therapy that is under development to be
specifically tailored to each patient's disease profile. Tcelna is
manufactured using ImmPath™, Opexa's proprietary method for the production of
a patient-specific T-cell immunotherapy, which encompasses the collection of
blood from the MS patient, isolation of peripheral blood mononuclear cells,
generation of an autologous pool of myelin-reactive T-cells (MRTCs) raised
against selected peptides from myelin basic protein (MBP), myelin
oligodendrocyte glycoprotein (MOG) and proteolipid protein (PLP), and the
return of these expanded, irradiated T-cells back to the patient. These
attenuated T-cells are reintroduced into the patient via subcutaneous
injection to trigger a therapeutic immune system response.

Opexa is currently conducting a Phase IIb study of Tcelna. Named “Abili-T,”
the trial is a randomized, double-blind, placebo-controlled clinical study in
patients who demonstrate evidence of disease progression with or without
associated relapses. The trial is expected to enroll 180 patients at
approximately 30 leading clinical sites in the U.S. and Canada with each
patient receiving two annual courses of Tcelna treatment consisting of five
subcutaneous injections per year. The trial’s primary efficacy outcome is the
percentage of brain volume change (atrophy) at 24 months. Study investigators
will also measure several important secondary outcomes commonly associated
with MS, including disease progression as measured by the Expanded Disability
Status Scale (EDSS), annualized relapse rate and changes in disability as
measured by EDSS and the MS Functional Composite.

Cautionary Statement Relating to Forward-Looking Information for the Purpose
of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of
1995

This earnings release contains forward-looking statements which are made
pursuant to the safe harbor provisions of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Statements contained in this release, other than statements of
historical fact, constitute "forward-looking statements." The words "expects,"
"believes," "anticipates," "estimates," "may," "could," "intends," and similar
expressions are intended to identify forward-looking statements. The
forward-looking statements in this release do not constitute guarantees of
future performance. Investors are cautioned that statements in this report
which are not strictly historical statements, including, without limitation,
statements regarding the development of the Company's product candidate,
Tcelna (imilecleucel-T), constitute forward-looking statements. Such
forward-looking statements are subject to a number of risks and uncertainties
that could cause actual results to differ materially from those anticipated.
These risks and uncertainties include, but are not limited to, risks
associated with: market conditions; our capital position; the rights and
preferences provided to the Series A convertible preferred stock and investors
in the convertible secured notes we issued in July 2012 (including a secured
interest in all of our assets); our ability to compete with larger, better
financed pharmaceutical and biotechnology companies; new approaches to the
treatment of our targeted diseases; our expectation of incurring continued
losses; our uncertainty of developing a marketable product; our ability to
raise additional capital to continue our development programs (including to
undertake and complete any ongoing or further clinical studies for Tcelna),
including in this regard our ability to satisfy various conditions required to
access the financing potentially available under the purchase agreements with
Lincoln Park Capital Fund, LLC (“Lincoln Park”) (such as the minimum closing
price for our common stock and the requirement for an ongoing trading market
for our stock); our ability to raise additional capital through the sale of
shares of our common stock under the purchase agreements with Lincoln Park or
under our at-the-market (ATM) facility; our ability to maintain compliance
with NASDAQ listing standards; the success of our clinical trials (including
the Phase IIb trial for Tcelna in secondary progressive MS which, depending
upon results, may determine whether Ares Trading SA (“Merck”) elects to
exercise its option for an exclusive license to Tcelna for the treatment of MS
(the “Option”)); whether Merck exercises its Option and, if so, whether we
receive any development or commercialization milestone payments or royalties
from Merck pursuant to the Option; our dependence (if Merck exercises its
Option) on the resources and abilities of Merck for the further development of
Tcelna; the efficacy of Tcelna for any particular indication, such as for
relapsing remitting MS or secondary progressive MS; our ability to develop and
commercialize products; our ability to obtain required regulatory approvals;
our compliance with all Food and Drug Administration regulations; our ability
to obtain, maintain and protect intellectual property rights (including for
Tcelna); the risk of litigation regarding our intellectual property rights or
the rights of third parties; the success of third party development and
commercialization efforts with respect to products covered by intellectual
property rights that we may license or transfer; our limited manufacturing
capabilities; our dependence on third-party manufacturers; our ability to hire
and retain skilled personnel; our volatile stock price; and other risks
detailed in our filings with the SEC. These forward-looking statements speak
only as of the date made. We assume no obligation or undertaking to update any
forward-looking statements to reflect any changes in expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based. You should, however, review additional disclosures we make
in our Annual Reports on Form 10 K, Quarterly Reports on Form 10-Q, and
Current Reports on Form 8-K filed with the SEC.


OPEXA THERAPEUTICS, INC.
(a development stage company)

Statements of Operations Data (unaudited):
                 Three Months Ended                Six Months Ended
                                                
                 June 30,                          June 30,
                 2013            2012             2013            2012
Option Revenue   $ 348,837        $ -              $ 568,937        $ -
                                                                                 
Research and       2,223,030        1,558,208        3,844,396        3,048,305
development
General and        750,605          529,566          1,853,040        1,345,762
administrative
Depreciation
and               88,898         76,496         167,209        143,851    
amortization
Operating loss   $ (2,713,696 )     (2,164,270 )     (5,295,708 )     (4,537,918 )
                                                                                 
Interest           3,066            59               4,940            195
income
Other income,      -                -                37,910           -
net
Interest          (285,800   )    (486       )    (1,921,054 )    (973       )
expense
Net loss         $ (2,996,430 )   $ (2,164,697 )   $ (7,173,912 )   $ (4,538,696 )
                                                                                 
Basic and
diluted loss     $ (0.37      )   $ (0.38      )   $ (0.94      )   $ (0.79      )
per share
                                                                                 
Weighted
average shares     7,991,559        5,762,028        7,617,409        5,762,028
outstanding
                                                                                 
                                                                                 
                                                                                 
                                                                                 
Selected
Balance Sheet
Data
(unaudited):
                 June 30,         December 31,

                 2013             2012
Cash and cash    $ 5,028,280      $ 592,004
equivalents
Other current      1,694,010        1,077,546
assets
Fixed assets,      1,229,333        1,265,041
net
Restricted         500,000          1,000,000
cash
Deferred
financing          112,515          211,479
costs, net
Other
long-term          96,064           -
assets
Total assets       8,660,202        4,146,070
Total current      3,760,934        885,975
liabilities
Notes payable,     521,942          376,763
net
Deferred           3,035,715        -
revenue
Total
stockholders'      1,341,611        2,883,332
equity


Contact:

Company
Karthik Radhakrishnan
Opexa Therapeutics, Inc.
Chief Financial Officer
281-775-0600
kradhakrishnan@opexatherapeutics.com
or
Investor Relations
Adam Cutler
The Trout Group
646-378-2936
opexa@troutgroup.com
 
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