On April 16, 2014 Xenetic BioSciences (OTCBB:XBIO), a biopharmaceutical company focused on developing next-generation biologic drugs and novel orphan oncology therapeutics, reported financial results for the year-ended December 31, 2013 (Press release, Xenetic Biosciences, APR 16, 2014, View Source [SID1234537821]).
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"The past several months have been pivotal for Xenetic as we have made significant advancements towards our goal of becoming a leading U.S.-based biopharmaceutical company," said Scott Maguire, CEO of Xenetic Biosciences. "We relocated our corporate headquarters and research operations to Lexington, MA, we recently appointed two healthcare industry veterans to our Board and we continue to add top talent as we build out our clinical development and research operations. Furthermore, we welcomed an increased shareholding in the Company from Baxter International, Inc. via a $10 million equity investment along with a substantial increase of up to $100 million in potential cash milestones on an existing license deal.
"We are also leveraging our proprietary drug technology platforms to continue advancing our clinical pipeline, including our most advanced products, ErepoXen for the treatment of anemia, OncoHist for the treatment of refractory and relapsed Acute Myeloid Leukemia (AML) and PulmoXenTM for the treatment of cystic fibrosis. As we look toward the numerous milestones across our development pipeline for the rest of 2014, we believe we are well positioned to further enhance shareholder value and potentially introduce new and better therapies for cancer and renal disease patients."
Recent Business Highlights
Announced encouraging safety and tolerability results from the Phase I trial of PulmoXen for the treatment of cystic fibrosis, conducted by Russian partner, OJSC Pharmsynthez
Received direct investment of $10 million from Baxter and restructured existing licensing agreement with Baxter to develop polysialylated blood coagulation factors using Xenetic’s technology– increasing potential total milestone payments to $100 million, with additional future royalties on commercial sales
Appointed industry veterans, Timothy Cote, MD, MPH, former Director of the U.S. FDA Office of Orphan Products Development, and experienced finance professional Darlene Deptula-Hicks to the Board of Directors as audit committee chairperson
Opened new corporate headquarters and research and development facility in Lexington, MA in collaboration with the Massachusetts Life Sciences Center and the Massachusetts Biotechnology Council
In January, transitioned to the U.S. markets through listing on the OTC Bulletin Board and subsequently commenced trading under the ticker symbol "XBIO"
Expected 2014 Milestones
Present interim data from Phase 2 Australia/New Zealand trial of ErepoXen for the treatment of chronic anemiain patients with renal disease
Advance ongoing clinical development of OncoHist, with a planned U.S. IND filings for AML and an additional cancer indication
Secure U.S. Orphan Drug Designation for additional oncology indication for OncoHist
Present interim data from Phase 2 Russia trial of OncoHist in patients with refractory AML and Non Hodgkin’s Lymphoma
Initiate Phase 2 trial of PulmoXen for the treatment of cystic fibrosis, conducted by Russian partner, OJSC Pharmsynthez
Full Year 2013 Financial Results
Revenue for the year ended December 31, 2013 was $1.0 million, compared to $300,000 for the comparable period in 2012. The year-over-year increase in revenue was primarily due to Xenetic’s receipt of license revenue in 2013 under its agreement with Baxter.
Research and development expenses were $3.1 million for the year ended December 31, 2013, compared to $1.9 million for the comparable period in 2012. The increase in R&D expense was primarily due to increased spending on clinical activities as Xenetic further advanced development of its ErepoXen and OncoHist clinical programs. Xenetic expects an increase in R&D expense in 2014 as the company further advances development of its clinical programs and brings its Lexington, MA research facility to full operational activity.
General and administrative expenses were $6.6 million for the year ended December 31, 2013, compared to $3.6 million for the same period in 2012. The increase in G&A expenses was primarily due to increased legal and accounting expenses relating to the delisting from the AIM market and our transition to the U.S. capital markets, as well as the transition of the operations from London, UK to Lexington, MA.
Net loss for the year ended December 31, 2013 was $8.6 million, compared to a net loss of $6.3 for the same period in 2012.
Cash and cash equivalents were $4.8 million at December 31, 2013, compared to $11.1 million for the comparable period in 2012. In January 2014, Xenetic recorded a $10 million common stock investment from Baxter.