Opexa Therapeutics Reports Year End 2013 Financial Results and Provides Corporate Update

  Opexa Therapeutics Reports Year End 2013 Financial Results and Provides
  Corporate Update

Business Wire

THE WOODLANDS, Texas -- February 27, 2014

Opexa Therapeutics, Inc. (NASDAQ: OPXA), a biotechnology company developing a
novel T-cell immunotherapy for multiple sclerosis (MS), today reported
financial results for the year ended December 31, 2013, and provided an
overview of recent corporate developments.

2013 and recent highlights include:


       *As of February 27, 2014, enrolled over 80% of the total number of
         patients expected to be enrolled 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 designed to
         enroll 180 patients at approximately 35 leading clinical sites in the
         U.S. and Canada; and
       *Furthered the accumulation of comprehensive patient data to support
         Opexa’s Immune Monitoring Program which is being conducted in
         conjunction with the Abili-T trial. The goals of this Program are to
         identify potential novel biomarkers that could distinguish
         responders, to strengthen our intellectual property protection, and
         to broaden our understanding of the mechanism of action of Tcelna and
         the pathophysiology of SPMS patients.


       *Reported cash and cash equivalents of $23,644,542 as of December 31,
       *Closed two underwritten public offerings of an aggregate of
         17,638,000 shares of common stock during the second half of 2013 for
         aggregate gross proceeds of approximately $27.4 million, or net
         proceeds of approximately $24.8 million after deducting underwriting
         discounts and commissions and offering expenses;
       *Eliminated debt on Opexa’s consolidated balance sheet through the
         conversion into common stock of the July 2012 convertible secured
         promissory notes in an aggregate principal amount of $4.1 million,
         and unencumbered all of our intellectual property and physical assets
         previously pledged as collateral;
       *Strengthened the team with the addition of several talented
         individuals dedicated to furthering the Company’s development
         initiatives, including enhancing the manufacturing and delivery of
       *Secured an option and license agreement with Merck Serono which, if
         exercised by Merck Serono, has the potential to bring in up to $220
         million in milestone payments plus 8-15% royalties;
       *Secured the 50^thpatent for the T-cell immunotherapy platform (U.S.
         and international jurisdictions, collectively); and
       *Laid the foundation to explore potential disease indications beyond
         MS that could be addressed through use of our T-cell platform.

“2013 was a strong year for Opexa as we executed on several critical strategic
goals for the company. We secured a partnering agreement with Merck Serono, a
large pharmaceutical company with a deep understanding of Multiple Sclerosis,
advanced on the landmark Abili-T study in Secondary Progressive MS patients
and ended the year in a strong financial position,” commented Neil K. Warma,
President and Chief Executive Officer of Opexa. “In 2014, we look forward to
completing enrollment in the Abili-T study, which is expected to occur in the
second quarter of this year, and exploring other potential disease areas
through the utilization of our Precision Immunotherapy^TM platform.”

“The focus of the Company remains fixed on the execution of the Phase IIb
study in Secondary Progressive MS patients. Currently, the treatment options
for these patients are very limited, so the importance of bringing a safe and
effective therapy to market is heightened. If we are successful with the
development of Tcelna in the ongoing SPMS trial and Merck Serono exercises its
option, Merck Serono would bear the expense of subsequent clinical development
of Tcelna in MS. In addition, we believe Opexa would be solidly positioned
with the potential to receive milestone payments in excess of $200 million as
well as royalty payments ranging from 8-15% on product sales in the event
Merck Serono is successful in its development efforts.”

“Following our capital raise in August 2013, we were able to activate all the
remaining clinical trial sites selected to participate in the Abili-T study.
The enthusiasm from the sites and patients has remained strong and we have
exceeded 80% of the enrollment target. We are aiming to treat a total of 180
patients in the study and anticipate reaching full enrollment in the second
quarter of 2014. We believe presentation of top-line data remains on target
for mid-2016,” added Mr. Warma.

“With the MS franchise progressing well, we are evaluating the potential of
our T-cell platform, ImmPath^®, in indications beyond MS. We have worked
diligently to optimize the manufacturing process and believe that our platform
can be leveraged to tailor personalized therapies for patients in other
disease areas. Further evaluation will include continued discussions with key
opinion leaders, FDA and clinical experts, assessment of the capital
requirements and availability of sufficient resources, and a scientific
understanding of the disease mechanism.”

"Lastly, we were able to raise a significant amount of capital in 2013,” noted
Mr. Warma. As of December 31, 2013, our cash and cash equivalents totaled
approximately $23,644,542. During the first quarter of 2013, we raised net
proceeds of approximately $9.6 million in capital through financing
transactions and the $5 million from an upfront payment from Merck Serono.
During the third quarter, we were able to raise net proceeds of approximately
$17.4 million in additional capital through an underwritten public offering of
our common stock. During the fourth quarter, we executed on another
underwritten public offering of our common stock and raised net proceeds of
approximately $7.3 million of additional capital. Based on our current burn
rate, we believe we have sufficient liquidity to support our current clinical
activities for the Abili-T trial and general operations to sustain the Company
and support such trial into the fourth quarter of 2015.”

Year Ended December 31, 2013 Financial Results

During the year ended December 31, 2013, Opexa reported revenue of $1,266,611
related to the $5 million upfront payment from Merck in connection with the
Option and License Agreement. No commercial revenues were recorded for the
year ended December 31, 2012.

Research and development expenses were $9,181,090 for the year ended December
31, 2013, compared to $6,318,476 for the year ended December 31, 2012. The
increase in expenses was primarily due to increases in staff to conduct
increased development activities, the procurement and use of supplies used in
both our laboratory and product manufacturing operations, the engagement of
consultants and the costs of patient participation in our Phase IIb clinical
study, facilities costs, legal costs and stock compensation expense, and was
partially offset by a decrease in 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 were $3,670,769 for the year ended
December 31, 2013, as compared to $2,508,541 for the year ended December 31,
2012. The increase in expenses was primarily due to a modest increase in
employees to support the ongoing clinical trial, an increase in consultants
and other costs to support business development and investor relations
activities, and increases in NASDAQ listing fees, legal costs and stock
compensation expense.

Interest expense was $2,267,302 for the year ended December 31, 2013, compared
to $350,300 for the year ended December 31, 2012. The increase in interest
expense 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 financing fees over the
terms of the notes.

Loss on extinguishment of debt was $2,518,912 for the year ended December 31,
2013. The loss on extinguishment of debt was related to the conversion of the
remaining July 2012 convertible secured promissory notes on September 24,
2013, at the amended conversion price. There was no loss on extinguishment of
debt for the year ended December 31, 2012.

Net loss for the year ended December 31, 2013, was $16,656,325, or $1.25 per
share (basic and diluted), compared with a net loss of $8,930,833, or $1.54
per share (basic and diluted), for the year ended December 31, 2012. The
increase in net loss is primarily due to increases in research and
development, general and administrative, depreciation and interest expenses
and loss on extinguishment of debt.

Cash and cash equivalents were $23,644,542 as of December 31, 2013, compared
to $592,004 as of December 31, 2012. The monthly burn rate for the twelve
months ending December 2013 was approximately $1 million. Our financing
activities generated approximately $28.3 million in net proceeds for the year
ended December 31, 2013.

For additional information, please see Opexa’s Annual Report on Form 10-K
filed today with the SEC.

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 a patient’s peripheral blood, expanded ex vivo, and reintroduced
into the patient 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)

MS 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

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.

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 35 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.

For more information, visit the Opexa Therapeutics website at

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

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 earnings release, other than statements
of historical fact, constitute “forward-looking statements.” The words
“expects,” “believes,” “hopes,” “anticipates,” “estimates,” “may,” “could,”
“intends,” “exploring,” “evaluating,” “progressing,” “proceeding,” and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements do not constitute guarantees of future performance.
Investors are cautioned that statements which are not strictly historical
statements, including, without limitation, statements regarding current or
future financial payments, performance and position as well as plans and
objectives for future operations, for product development (including for
Tcelna (imilecleucel T) and the related Immune Monitoring Program) and for
potential expansion of the T-cell platform into other disease indications,
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, without limitation, risks associated with the following: market
conditions; our capital position; our ability to compete with larger, better
financed pharmaceutical and biotechnology companies; new approaches to the
treatment of our targeted diseases such as Multiple Sclerosis (MS); 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 or clinical studies related to our T-cell
platform), 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 (such as the minimum closing
price for our common stock, the registration of the underlying shares of
common stock under the Securities Act of 1933, as amended, and the requirement
for an ongoing trading market for our stock);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), a
wholly owned subsidiary of Merck Serono S.A., elects to exercise its option
(Option) to acquire an exclusive, worldwide (excluding Japan) license of our
Tcelna program for the treatment of MS); 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 and future pipeline
candidates);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 suppliers and manufacturers; our
ability to hire and retain skilled personnel; our volatile stock price; and
other risks detailed in our filings with the Securities and Exchange
Commission. These forward-looking statements speak only as of the date made.
We assume no obligation or undertaking to update or revise any forward-looking
statements contained herein to reflect any changes in its 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 the reports we file with the SEC.


(a development stage company)

Statements of Expenses Data:
                                          Twelve Months Ended
                                          December 31,
                                          2013              2012
Option revenue                            $ 1,266,611         $ -
Research and development                    9,181,090           6,318,476
General and administrative                  3,670,769           2,508,541
Depreciation and amortization               335,597             303,677
Loss on disposal of fixed assets           2,161             3,097      
Operating loss                              (11,923,006 )       (9,133,791 )
Interest income                             14,985              280
Other income and expense, net               37,910              -
Loss on extinguishment of debt              (2,518,912  )       -
Gain on derivative instruments              -                   552,978
Interest expense                           (2,267,302  )      (350,300   )
Net loss                                  $ (16,656,325 )     $ (8,930,833 )
Basic and diluted loss per share          $ (1.25       )     $ (1.54      )
Weighted average shares outstanding         13,332,350          5,785,372
Selected Balance Sheet Data:
                                          2013                2012
Cash and cash equivalents                 $ 23,644,542        $ 592,004
Other current assets                        1,122,576           1,077,546
Fixed assets, net                           1,295,024           1,265,041
Restricted cash                             -                   1,000,000
Deferred financing costs, net               -                   211,479
Other long term assets                      177,666             -
Total assets                                26,239,808          4,146,070
Total current liabilities                   3,324,493           885,975
Total long term liabilities                 2,338,041           376,763
Total stockholders' equity                  20,577,274          2,883,332


Company Contact:
Karthik Radhakrishnan
Opexa Therapeutics, Inc.
Chief Financial Officer
Investor Relations:
The Trout Group
Adam Cutler
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