Poniard Pharmaceuticals, Inc. (NASDAQ: PARD), a biopharmaceutical
company focused on innovative oncology therapies, today reported
financial results for the second quarter ended June 30, 2011.
"The defining event of the quarter was the announcement of our
proposed merger with ALLOZYNE, a critical step in our goal of
maximizing long-term value for our shareholders," stated Ronald
Martell, chief executive officer of Poniard. "We believe that the
addition of a promising autoimmune product portfolio and
proprietary protein engineering platform, together with our
oncology assets, will create a robust company with a multifaceted
strategy, diverse pipeline, multiple partnering opportunities and a
technology platform to fuel potential growth over the long term.
With shareholder support for the merger and the required reverse
split of Poniard's common stock and satisfaction of other
conditions of closing, we anticipate completing the transaction
during the second half of 2011."
Second Quarter 2011 and Recent Corporate
Developments
- Executed Definitive Merger Agreement with
ALLOZYNE. In June, Poniard executed a definitive merger
agreement with ALLOZYNE, Inc., a privately held biotechnology
company focused on the development of bioconjugated protein
therapeutics. The merger transaction would bring together
ALLOZYNE's autoimmune disease product pipeline and proprietary
protein engineering platform and Poniard's oncology assets,
including picoplatin, a Phase 3-ready chemotherapeutic agent. The
combined company is expected to focus its resources on advancing
ALLOZYNE's AZ01, a clinical-stage, PEGylated interferon β for
multiple sclerosis, into a Phase 2 study and AZ17, a bispecific
antibody with broad potential in autoimmune and inflammatory
diseases, into the clinic. The combined company plans to seek a
partnership for the continued development of picoplatin. The boards
of directors of both companies have approved the merger
transaction, which is subject to customary closing conditions,
including approval by ALLOZYNE's and Poniard's respective
stockholders and receipt of approval for listing of the combined
company's common stock on The Nasdaq Capital Market. On July 25,
Poniard filed a Registration Statement on Form S-4 with the SEC
related to the proposed merger.
- Ongoing Efforts to Partner Picoplatin. In
addition to pursuing a merger with ALLOZYNE, Poniard continues to
actively explore potential strategic partnering and other
collaborative arrangements to fund the continued development and
commercialization of picoplatin worldwide.
- Nasdaq Continued Listing. As previously
announced, on July 19, 2011, Poniard received a letter from the
Nasdaq Listing Qualifications Staff advising that the Company has
not regained compliance with the $1.00 per share minimum bid price
requirement for continued listing on The Nasdaq Capital Market and
therefore was subject to delisting from the Capital Market. On July
26, 2011, Poniard submitted a request for an oral hearing before
the Nasdaq Hearings Panel, which request will stay delisting of the
Company's common stock pending the Panel's decision. The oral
hearing before the Panel is scheduled to be held on August 25,
2011. At the Panel hearing, Poniard intends to present a plan to
regain compliance with the minimum bid price requirement by
undertaking a reverse stock split of its outstanding common stock,
at a minimum ratio of 1-for-25, in connection with its proposed
merger with ALLOZYNE, and will request that the Panel exercise its
discretionary authority to grant an additional period of time until
December 31, 2011 for Poniard to complete such plan. Poniard will
seek shareholder approval of the proposed reverse stock split at a
special meeting of Company shareholders to be held in connection
with the merger. A detailed description of the special meeting, the
proposed merger and the reverse stock split proposal will be
included in a definitive proxy statement/prospectus/consent
solicitation to be mailed to Poniard and ALLOZYNE shareholders. See
"Important Additional Information" below.
Second Quarter 2011 Unaudited Financial
Results
For the quarter ended June 30, 2011, Poniard reported a net loss
of $3.9 million ($0.07 diluted loss per share on a loss applicable
to common shares of $3.9 million), compared with a net loss of $6.5
million ($0.14 diluted loss per share on a loss applicable to
common shares of $6.6 million) for the quarter ended June 30, 2010.
For the first six months of 2011, the net loss was $7.1 million
($0.13 diluted loss per share on a loss applicable to common shares
of $7.2 million), compared to a net loss of $18.4 million ($0.42
diluted loss per share on a loss applicable to common shares of
$19.1 million) for the same period in 2010.
Total operating expenses for the quarter ended June 30, 2011
were $3.8 million, compared with $6.0 million for the quarter ended
June 30, 2010. Year to date, total operating expenses were $7.1
million compared to $17.3 million for the first six months of 2010.
Total operating expenses for the first six months of 2010 included
a charge of $1.6 million related to two workforce reductions.
Research and development expenses were $0.4 million for the
quarter ended June 30, 2011, compared with $2.1 million for the
quarter ended June 30, 2010. Year to date, research and development
expenses were $0.8 million, compared to $7.0 million for the same
period in 2010.
General and administrative expenses were $3.4 million for the
quarter ended June 30, 2011, compared with $3.9 million for the
quarter ended June 30, 2010. Year to date, general and
administrative expenses were $6.3 million, compared to $8.7 million
for the same period in 2010.
Cash and investment securities as of June 30, 2011 were $3.7
million, compared to $4.3 million as of December 31, 2010. The
Company believes that its current cash resources and cash
equivalents will be adequate to continue operations at
substantially their current level through the third quarter of
2011. The Company's operating budget, however, does not include
additional costs associated with the proposed merger with ALLOZYNE
or, if the Company is unable to complete the proposed merger, the
costs of a liquidation and winding up the Company. These costs may
be substantial and include costs incurred in connection with the
proposed merger, estimated to total approximately $1.6 million, in
addition to severance and accrued vacation expense, accelerated
payments due under existing contracts, and legal, accounting and/or
advisory fees. Poniard can provide no assurance that it will have
sufficient cash to cover these additional costs.
If the merger with ALLOZYNE is not completed, the Company's
board of directors will be required to explore alternatives for the
Company's business and assets. These alternatives might include
raising capital, seeking to merge or combine with another company,
seeking dissolution and liquidation, or initiating bankruptcy
proceedings. There can be no assurance that any third party will be
interested in merging with the Company or would agree to a price
and other terms that the Company would deem adequate or that its
shareholders would approve any such transaction. Although Poniard
may try to pursue an alternative transaction and would seek to
continue its current efforts to enter into a partnership or other
strategic collaboration to support the continued development of
picoplatin, the Company likely will have very limited cash
resources and, unless it raises additional capital, likely will be
forced to file for federal bankruptcy protection
Important Additional Information
Poniard has filed a Registration Statement on Form S-4, which
includes a preliminary proxy statement/prospectus/consent
solicitation in connection with the proposed merger with ALLOZYNE.
Once the Form S-4 has been declared effective by the SEC, the
definitive proxy statement/prospectus/consent solicitation included
in the Form S-4 will be mailed to Poniard and ALLOZYNE
shareholders. Investors and security holders of Poniard and
ALLOZYNE are urged to read the definitive proxy
statement/prospectus/consent solicitation when it becomes
available, because it will contain important information about
Poniard, ALLOZYNE and the proposed transaction.
Investors and security holders of Poniard will be able to obtain
free copies of the definitive proxy statement/prospectus/consent
solicitation, when it becomes available, through the website
maintained by the SEC at www.sec.gov. Free copies of the definitive
proxy statement/prospectus/consent solicitation, when it becomes
available, and Poniard's other filings with the SEC also may be
obtained by contacting Poniard Pharmaceuticals, Inc., 750 Battery
Street, Suite 330, San Francisco, CA 94111, or accessed via
Poniard's website at www.poniard.com.
Poniard, and its respective directors and executive officers,
may be deemed to be participants in the solicitation of proxies
from its shareholders in favor of the proposed transaction.
Information regarding the directors and executive officers of
Poniard and their interests in the proposed transaction will be
available in the definitive proxy statement/prospectus/information
statement, when it becomes available.
About Poniard Pharmaceuticals
Poniard Pharmaceuticals, Inc. is a biopharmaceutical company
focused on the development and commercialization of innovative
oncology products. For additional information please visit
http://www.poniard.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1994. Words such as "expect," "estimate,"
"project," "forecast," "anticipate," "may," "will," "can," "could,"
"should," "believes," "predicts," "potential," "continue," and
similar expressions are intended to identify such forward-looking
statements. Forward-looking statements in this press release
include, without limitation, statements regarding corporate
strategy, forecasts of product development and potential
commercialization, potential partnering opportunities and the goals
thereof, the Company's ability to consummate the merger with
ALLOZYNE, the potential benefits of the proposed merger, potential
transaction timing, anticipated future operations, projected
capital needs, the availability of future funding and other matters
that involve known and unknown benefits, risks, uncertainties and
other factors that may cause actual results, levels of activity,
performance or achievements to differ materially from results
expressed or implied in this press release. Such risk include,
among others: Poniard's current cash position, the failure of the
Poniard or ALLOZYNE stockholders to approve the merger and/or the
required reverse stock split; the extent of Poniard's success at
the oral hearing to appeal the Nasdaq Staff delisting
determination; Poniard's ability to satisfy Nasdaq conditions for
continued or initial listing of its common stock; actions by the
SEC or Nasdaq; the failure of Poniard or ALLOZYNE to meet any of
the conditions to the closing of the merger; the failure to realize
the anticipated benefits of the merger or delay in realization
thereof; the cash positions of Poniard and ALLOZYNE at closing of
the merger; the ability of the combined company to obtain
substantial additional financing on a timely basis and on favorable
terms; the difficulty of developing biopharmaceutical products and
obtaining regulatory or other approvals; the uncertainty regarding
market acceptance of any products for which regulatory approval is
obtained; whether certain market segments grow as anticipated; the
competitive environment in the biopharmaceutical industry; the
potential inability of Poniard to obtain, maintain, and enforce
patent and other intellectual property protection for its product
candidates; the success of future clinical trials; and the ability
of Poniard to enter into and maintain collaborative arrangements to
develop picoplatin on favorable terms. Actual results may differ
materially from those contained in the forward-looking statements
in this press release. Additional information concerning these and
other risk factors is contained in Poniard's Annual Report on Form
10-K for the year ended December 31, 2010 and Poniard's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2011. In
addition, investors and security holders are also urged to read
carefully the risk factors set forth in the definitive proxy
statement/prospectus/consent solicitation when it becomes
available.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release. Poniard undertakes no obligation to update any
forward-looking statements to reflect new information, events or
circumstances after the date of this release or to reflect the
occurrence of unanticipated events. All forward-looking statements
are qualified in their entirety by this cautionary statement.
Poniard Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Revenues $ - $ - $ - $ -
--------- --------- --------- ---------
Operating expenses:
Research and development 442 2,088 775 6,979
General and administrative 3,396 3,888 6,295 8,687
Restructuring - - - 1,626
--------- --------- --------- ---------
Total operating expenses 3,838 5,976 7,070 17,292
--------- --------- --------- ---------
Loss from operations (3,838) (5,976) (7,070) (17,292)
--------- --------- --------- ---------
Other income (expense), net (20) (570) (34) (1,143)
--------- --------- --------- ---------
Net loss (3,858) (6,546) (7,104) (18,435)
Preferred stock dividends (48) (48) (96) (640)
--------- --------- --------- ---------
Loss applicable to common shares $ (3,906) $ (6,594) $ (7,200) $ (19,075)
========= ========= ========= =========
Loss per share:
Basic and diluted $ (0.07) $ (0.14) $ (0.13) $ (0.42)
========= ========= ========= =========
Shares used in calculation of
loss per share:
Basic and diluted 59,548 47,525 54,304 45,401
========= ========= ========= =========
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2011 2010
------------ ------------
(Unaudited) (Note 1)
ASSETS:
Cash and investment securities $ 3,692 $ 4,330
Cash - restricted 158 158
Facilities and equipment, net 25 49
Licensed products, net 5,770 6,377
Other assets 344 729
------------ ------------
Total assets $ 9,989 $ 11,643
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities $ 2,087 $ 1,616
Long term liabilities 1,618 1,574
Shareholders' equity 6,284 8,453
------------ ------------
Total liabilities and shareholders' equity $ 9,989 $ 11,643
============ ============
Note 1: Derived from audited financial statements included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2010.
For Further Information: David Pitts Argot Partners (212)
600-1902 Email Contact
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