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): March 10, 2008
AVI BioPharma, Inc.
(Exact name of Company as specified in its charter)
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Oregon |
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001-14895 |
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93-0797222 |
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(State or other |
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(Commission File No.) |
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(I.R.S. Employer |
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jurisdiction of |
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Identification No.) |
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incorporation) |
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One S.W. Columbia, Suite 1105
Portland, OR 97258
(Address of principal executive offices)
(503) 227-0554
Registrant’s telephone number, including area code
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operation and Financial Condition.
On March 12, 2008, AVI BioPharma Inc. (the “Company”) issued a press release announcing, among other items, its financial results for the fourth quarter ended December 31, 2007 and for the full-year 2007. A copy of the Company’s press release dated March 12, 2008 is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On March 10, 2008, Jack L. Bowman announced his resignation as a director and Chairman of the Board of Directors of the Company, which also included a resignation from all committees on which he was a member, effective immediately. Mr. Bowman’s resignation was for personal reasons, and was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices. In connection with Mr. Bowman’s resignation as a director, the Board of Directors of the Company appointed Michael D. Casey, an existing member of the Board of Directors, as the Chairman of the Board of Directors and approved a decrease in the number of directors from eight (8) to seven (7), effective immediately.
On March 12, 2008, the Company issued a press release announcing the foregoing changes. A copy of the Company’s press release dated March 12, 2008 is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
The information set forth above is incorporated by reference herein.
Item 8.01 Other Events
On March 12, 2008, in connection with the Company’s press release issued on that same date, the Company scheduled an investor conference call. A webcast slide presentation covering corporate strategy and pipeline updates accompanied the conference call commentary. A copy of the webcast slide presentation is included as Exhibit 99.2 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed herewith:
99.1 Press Release dated March 12, 2008.
99.2 Contents of webcast slide presentation dated March 12, 2008.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Portland, State of Oregon, on March 12, 2008.
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AVI BioPharma, Inc. |
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By: |
/s/ ALAN P. TIMMINS |
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Alan P. Timmins |
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President and Chief Operating Officer |
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Exhibit Index
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Exhibit |
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Description |
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Exhibit 99.1 |
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Press Release dated March 12, 2008. |
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Exhibit 99.2 |
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Contents of webcast slide presentation dated March 12, 2008. |
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Exhibit 99.1
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Company Contact: |
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Press Contact: |
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AVI BioPharma, Inc. |
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Waggener Edstrom Worldwide |
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Michael Hubbard (hubbard@avibio.com) |
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Bioscience and Healthcare Practice |
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(503) 227-0554 |
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Jenny Moede (jmoede@waggeneredstrom.com) |
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(503) 443-7000 |
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Investor Contacts: |
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Lippert/Heilshorn & Associates, Inc. |
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Jody Cain (jcain@lhai.com) |
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Bruce Voss (bvoss@lhai.com) |
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(310) 691-7100 |
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AVI BioPharma Announces 2007 Fourth Quarter and
Full Year Financial Results
Board Elects New Chairman, New Corporate Priorities Unveiled
PORTLAND, Ore. (March 12, 2008) – AVI BioPharma, Inc. (NASDAQ: AVII) today reported financial results for the three and 12 months ended December 31, 2007.
The net loss for the fourth quarter of 2007 was $4.1 million, or $0.07 per share, compared with a net loss for the fourth quarter of 2006 of $6.1 million, or $0.11 per share. Revenues for the fourth quarter of 2007 were $5.2 million, up from $18,000 in the fourth quarter of 2006, reflecting increases in research contracts revenues of $5.1 million, license fees of $31,000 and grants revenues of $6,000.
Research and development (R&D) expenses for the quarter increased to $9.4 million from $6.7 million in the fourth quarter of 2006. The increase reflects $1.9 million in contracting costs for the production of GMP subunits, higher expenses for government research contracts, and chemical and lab supply costs, partially offset by lower compensation-related costs of $240,000. General and administrative (G&A) expenses decreased to $1.5 million from $2.1 million in the prior year period. The decrease was due primarily to lower compensation-related costs, partially offset by higher accounting and legal expenses.
For the year ended December 31, 2007, AVI reported a net loss of $27.2 million, or $0.50 per share, compared with a net loss for the year ended December 31, 2006 of $28.7 million, or $0.54 per share. Revenues for 2007 were $11.0 million, up from $115,000 in 2006, reflecting increases in research contracts revenues of $10.8 million and license fees of $125,000, partially offset by decreases in grants revenues of $51,000.
R&D expenses during 2007 increased to $34.8 million from $25.3 million in the prior year, reflecting $4.5 million expensed for government research contracts and $3.9 million in contracting costs for the production of GMP subunits, partially offset by decreases in employee costs of $1.2 million. G&A expenses increased to $9.3 million from $7.8 million, due primarily to increases in compensation costs of $850,000, of which $1.6 million was related to the Separation and Release Agreement with the company’s former chief executive officer, partially offset by decreases in SFAS 123R expenses of $320,000 and salary and bonuses of $550,000.
AVI had cash, cash equivalents and short-term securities of $25.1 million as of December 31, 2007, a decrease of $8.1 million from December 31, 2006. This decrease was due primarily to $24.7 million used in operations and $2.1 million used for purchases of equipment and patent-related costs, offset by the receipt of $18.6 million in net proceeds from a private equity financing and $119,000 from the exercise of warrants and options, and sales under the company’s employee stock purchase plan.
Board of Directors Update
AVI also announced that Michael D. Casey has been elected Chairman of the Board of Directors, following the resignation, effective March 10, 2008, of Jack L. Bowman from the Board of Directors for personal reasons. Mr. Casey, who has served as a director of AVI since May 2006, was previously President, Chief Executive Officer and Chairman of Matrix Pharmaceutical, Inc.; President of two divisions of Schein Pharmaceutical, Inc.; and President and Chief Operating Officer of Genetic Therapy, Inc. Mr. Casey also spent 25 years in senior positions with Johnson & Johnson. He serves as a director of Allos Therapeutics, Inc., Celgene Corp. and Durect Corporation. He will continue to serve on the company’s Compensation Committee and Nominating and Corporate Governance Committee.
“I am delighted to assume the Chairman position at this important juncture, and am committed to supporting AVI’s management team and staff in reaching our corporate objectives and enhancing shareholder value,” said Mr. Casey. “On behalf of the full board and everyone at AVI, I offer heartfelt thanks to Jack Bowman for his guidance and insights. Jack demonstrated able leadership as Chairman during the past transitional year, as well as through several previous years as a Board member.”
Corporate Priorities Unveiled
“Our proprietary NEUGENE® chemistry provides us with a tremendous opportunity to leverage the control of alternative gene splicing for novel therapeutics. With this technology we believe we can force the cell machinery to skip over targeted packets of information called exons, which in turn produce altered proteins. When the skipped exon contains a disease-causing mutation, we believe that the altered protein may restore function and potentially overcome the devastating clinical consequences of the mutation,” said Leslie Hudson, Ph.D., recently appointed Chief Executive Officer of AVI. “Our ability to target affected regions of the cell for gene splicing has increased with sequencing of the human genome and subsequent advancements in identifying genes responsible for specific diseases. As such, we believe that our NEUGENE technology, and particularly our NEUGENE-based ESPRIT therapeutics, could have applications in numerous indications.”
“Going forward at AVI, we plan on placing greater emphasis on NEUGENE applications for chemical control of alternative gene splicing to increase the value of our clinical pipeline,” he added. “We intend to adapt our infrastructure to support an increased flow of product candidates and to use our financial resources for the development of our clinical stage projects. We also will review our extensive research portfolio to prioritize projects for exploratory development and the support of partnering efforts.”
Conference Call
AVI BioPharma has scheduled an investor conference call regarding this announcement, and the company’s current and planned business activities, to be held today, March 12, 2008 beginning at 11:00 a.m. Eastern time (8:00 a.m. Pacific time). A webcast slide presentation covering corporate strategy and pipeline updates will accompany conference call commentary and is available on the company’s homepage at www.avibio.com.
Individuals interested in listening to the conference call may do so by dialing (888) 803-8271 within the U.S. and Canada, or (706) 634-2467 for international callers. A telephone replay of the conference call will be available for 48 hours beginning within two hours of the conclusion of the call, by dialing (800) 642-1687 for domestic callers, or (706) 645-9291 for international callers, and entering reservation number 38222923. The live conference call also will be available to private investors via the Internet at www.avibio.com. A replay of the call will be available on the company’s Web site for 14 days following the completion of the call.
About AVI BioPharma
AVI BioPharma develops therapeutic products for the treatment of life-threatening diseases using third-generation NEUGENE antisense drugs and ESPRIT exon skipping technology. AVI’s ESPRIT technology is initially being applied to potential treatments for Duchenne muscular dystrophy. AVI’s NEUGENE compounds are also designed to treat cardiovascular restenosis in stent and coronary artery bypass graft (CABG) procedures. In addition to targeting specific genes in the body, AVI’s antiviral program uses NEUGENE antisense compounds to combat disease by targeting single-stranded RNA viruses, including Marburg and Ebola Zaire viruses. More information about AVI is available at www.avibio.com.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, the results of research and development efforts, the results of preclinical and clinical testing, the effect of regulation by the FDA and other agencies, the impact of competitive products, product development, commercialization and technological difficulties, and other risks detailed in the company’s Securities and Exchange Commission filings.
AVI BIOPHARMA, INC.
(A Development-Stage Company)
STATEMENTS OF OPERATIONS
(unaudited)
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Three Months Ended |
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Year Ended |
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2007 |
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2006 |
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2007 |
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2006 |
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Revenues, from license fees, grants and research contracts |
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$ |
5,186,319 |
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17,519 |
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$ |
10,985,191 |
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$ |
115,291 |
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Operating expenses: |
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Research and development |
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9,401,465 |
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6,721,547 |
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34,760,402 |
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25,345,588 |
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General and administrative |
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1,453,172 |
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2,068,201 |
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9,332,365 |
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7,752,752 |
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10,854,637 |
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8,789,748 |
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44,092,767 |
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33,098,340 |
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Other income: |
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Interest income, net |
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135,579 |
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443,042 |
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983,976 |
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1,910,037 |
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Gain on warrant liability |
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1,405,545 |
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2,250,049 |
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4,955,875 |
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2,385,502 |
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Net loss |
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$ |
(4,127,194 |
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$ |
(6,079,138 |
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(27,167,725 |
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(28,687,510 |
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Net loss per share—basic and diluted |
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$ |
(0.07 |
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$ |
(0.11 |
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$ |
(0.50 |
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$ |
(0.54 |
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Shares used in per share calculations |
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55,252,905 |
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53,000,236 |
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53,942,015 |
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52,660,711 |
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BALANCE SHEET HIGHLIGHTS |
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(unaudited) |
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December 31, |
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December 31, |
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2007 |
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2006 |
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Cash, cash equivalents and short-term securities |
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$ |
25,074,413 |
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$ |
33,152,132 |
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Total current assets |
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28,711,451 |
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33,939,913 |
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Total assets |
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38,637,930 |
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40,862,746 |
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Total current liabilities |
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9,752,329 |
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8,343,421 |
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Total shareholders’ equity |
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$ |
26,381,748 |
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$ |
32,519,325 |
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# # #
Exhibit 99.2
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1 AVI BioPharma Business Strategy and Corporate Priorities March 12, 2008 |
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2 Safe Harbor Statement Comments made by management during this presentation will include forward-looking statements within the meaning of Federal securities laws. These forward-looking statements involve material risks and uncertainties and include statements which may be preceded by the words “potential,” “believe,” “expect,” “predict,” “continue,” “likely,” “unlikely,” “anticipate,” “estimate,” “optimistic,” “sustainable,” “intend,” “plan,” “project,” “target,” “aim,” “will,” “may,” “unlikely to be,” and similar words. For such statements, we claim the protection of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the time they were made. Actual results could differ materially from our forward-looking statements due to, among other reasons, preclinical and clinical development is highly uncertain, the success and cost of our research, clinical studies and partnering endeavors, our ability to obtain additional financing, our clinical trials may not proceed at the time we expect or at all, the timing of payments and fees, if any, from our collaborators, and our ability to obtain and defend patents. Additional factors that could cause actual results to differ materially from those stated or implied by our forward-looking statements are disclosed in our SEC filings. For a discussion of these risk factors, you are encouraged to review our annual report on Form 10-K for the year ended December 31, 2006 and subsequent reports as filed with the SEC. We disclaim any intent or obligation to update these forward-looking statements, other than as may be required under applicable law. |
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3 The Opportunity Compelling parallels between emerging therapeutic utility of monoclonal antibodies and potential for antisense oligomers Insights from beyond the genome and RNAi highlight the central importance of alternative splicing; 26,000 genes vs. 150,000 proteins Indications of pending technology and corporate maturation Chemically-derived solutions to the challenge of bioavailability, tissue localization and uptake demonstrated in vivo To capture the opportunity, AVI will focus R&D, develop a product flow process and commit to success in the clinic |
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4 Company Goals Advance AVI’s clinical development programs – Evidenced by successful program partnering and commercialization Adapt infrastructure to support flow of product candidates – Augment Biological Research capability – Strengthen Exploratory Development in Product Development flow Review research portfolio – Select priority projects for exploratory development – Support partnering efforts Give greater emphasis to chemical control of alternative gene splicing to increase number of clinical candidates |
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5 pre-mRNA mRNA protein Alternative Splicing Translation 70% genes alternatively spliced 26,000 genes; 150,000 proteins Several proteins from a single gene Related, frequently opposing, functions – Promote . inhibit cell death – Promote . inhibit signal transduction Key for Control of Gene Expression |
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6 Cook Partnership Cook continues to pursue applications with AVI-5126 (anti-c-myc PPMO product) for restenosis, including catheter delivery kit and coated stent AVI is supporting Cook with product and analytics Cook is performing required studies to support its regulatory applications Cook may pursue both catheters and coated stents to facilitate physicians’ treatment options |
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7 Business Development Advance AVI’s programs to Phase II for partnering and commercialization Increase access to external funding for DMD program R&D partnership with pharma or large biotech Consider additional government funding opportunities |
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8 AVI-5126 CABG Program Status Efficacy measure is to demonstrate that AVI-5126 exposure of saphenous vein donor graft prior to CABG will reduce subsequent graft failure by 50% compared to placebo in a double-blinded, randomized, 600-subject clinical study Per protocol, review of clinical data required at 10, 30 and 110 subjects – Concurrent with the 30-subject review, an additional 17 subjects were enrolled and evaluated – DSMB outcome • Expand to more sites • Review after next 30 subjects enrolled (total of 77) at additional sites Presently, overall higher-than-expected graft failure among the 47 subjects – Unclear if observation is related to patient characteristics, drug, bias from a small early single-site dataset or other factors |
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9 AVI-4658 DMD Program Status 2008 2009 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q AVI AVI-4658 IM 4658 IM AVI AVI-4658 IV 4658 IV UK – 4Q07 MHRA indicated that existing data package should support proposed IV study – 1Q08 CTA submitted for a systemic (IV) dose – ranging safety and de novo dystrophin production assessment study in ambulatory DMD boys – Expand to other exons Mouse Muscle Biopsy* Pre-Rx Post-Rx *Courtesy Steve Wilton |
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10 Government Programs AVI programs are funded by the DoD, as well as the Defense Threat Reduction Agency’s Transformational Medical Technologies Initiative Initial efforts are targeting Category A and B Bioterror Threats, with work in hemorrhagic fever viruses, pathogens and alternative approaches to viral treatments Specific research funded to date in Ebola, Marburg, Junin and Dengue viruses, as well as Ricin and Anthrax toxins. Scientific efforts result in advancements that may apply to other therapeutic research areas, e.g., drug modalities, delivery, etc. AVI receives reimbursement of costs incurred, overhead and, in some cases, a fixed fee |
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11 2008 Clinical/Regulatory Milestones 1Q AVI-6003 (Marburg Musoke) – pre-IND filed – AVI-4658 IV(DMD) – CTA to be filed for a systemic study – AVI-6002 (Ebola Zaire) – pre-IND to be filed 2Q – PMO-based exon 50 product (DMD) – pre-IND to be filed 3Q – AVI-4658 IV(DMD) – anticipate dosing of first patient in a systemic study – AVI-5126 – next 30 patients enrolled 4Q – AVI-6002 (Ebola Zaire) – IND to be filed – AVI-6003 (Marburg Musoke) – IND to be filed – PMO-based exon 50 product (DMD) – IND to be filed |
