MIGENIX Reports Fourth Quarter and Fiscal Year 2008 Financial Results

OTC: MGIFF), a clinical-stage developer of drugs for infectious diseases,
reports financial results for the three months and year ended April 30, 2008
and an update on its programs.
    Jim DeMesa, M.D., President & CEO of MIGENIX stated, "The recent end of
our 2008 fiscal year marks the beginning of a year where we expect to see the
results of our efforts to date start to emerge. With Phase III clinical
results, additional partnering prospects, and important program advancements -
all expected in Fiscal 2009, we have several opportunities with which to
create value. Most importantly, with an Omigard Phase III clinical trial
milestone coming within the next few months, positive results and a successful
NDA submission can initiate our transition into a company with revenue from an
approved and commercialized product. The successful completion of this
milestone, along with the other value-driving opportunities we have created,
can build momentum over the next several quarters, which we are confident is
in the best interest of all our shareholders."


    Omiganan 1% gel (Omigard(TM)/CPI-226/MX-226; topical cationic peptide;
prevention of catheter-related infections): Patient enrollment in the
Phase III US and European registration clinical trial conducted by our
development and commercialization partner Cadence Pharmaceuticals is complete
(see May 6, 2008 press release). Cadence expects to announce top-line data
from this trial in the second half of 2008 and, with positive results, submit
a new drug application for Omigard(TM) to the FDA in the first half of 2009.
Upon successful completion of various milestones in this program (starting
with FDA acceptance of the NDA for filing), we can receive up to US$27MM in
development and commercialization milestone payments and a double-digit
royalty on net sales. Cadence's commercialization focus is on the United
States market and thus Cadence intends to establish a strategic partnership(s)
for the commercialization of Omigard(TM) for the rights it has outside of the
United States. MIGENIX management and Board are working to out-license
Omigard(TM) rights either in combination with Cadence's rights outside the US
to prospective global partners or to potential regional partners for rest of
world territories. We expect a license agreement or agreements with up-front
payment(s), milestones and royalty terms to be completed after positive
Phase III clinical trial results.
    Omiganan (CLS001; topical cationic peptide; treatment of dermatological
diseases): Based on an end of Phase II meeting with the FDA our partner in
this program, Cutanea Life Sciences, intends to initiate a Phase III clinical
trial in calendar 2008 to treat rosacea.
    Celgosivir (MX-3253; oral alpha-glucosidase I inhibitor; treatment of
chronic hepatitis C virus infections): On December 3, 2007 we reported
preliminary four-week interim results from a Phase II viral kinetics study in
treatment-naive patients which indicated that 400 mg celgosivir once daily has
no negative effects on the tolerability, pharmacokinetics and viral kinetics
when combined with the standard of care drugs (the "PRC" regimen), as compared
to the standard of care drugs alone (the "PR" regimen"). The interim results
were for 10 patients who had completed four weeks of treatment equally divided
between the two treatment arms described above.
    On May 27, 2008 we indicated that we were stopping a planned 600 mg
dosage addition to this viral kinetics study due to financial constraints and
other logistical factors. No patients were enrolled in the 600 mg treatment

    Top-line 12-week results from the study, like the interim 4-week results,
show no meaningful differences between the two treatment arms. These results
are from 15 patients who received treatment during the study. Eleven patients
completed all 12 weeks of treatment, 5 in the PRC group and 6 in the PR
control group. The following is a summary of the Intent-to-Treat analysis for
the 12-week treatment period:

    -   Pharmacokinetic results indicate that the addition of 400 mg
        celgosivir once daily in the triple combination treatment regimen did
        not affect the pharmacokinetics of peginterferon over the first
        4 week period evaluated. This observation provides support for
        further clinical investigation with peginterferon combination
    -   No significant difference was seen between treatment groups with a
        mean reduction in HCV RNA at 12 weeks of 3.7 log10 vs 5.2 log10 in
        the PRC and PR groups, respectively. The variability of response is
        wide with reductions of 5.5 log10 to 1.6 log10 and 6.5 log10 to
        2.3log10 for the PRC and PR groups, respectively.
    -   PRC treatment was well tolerated, with both the PRC and PR groups
        demonstrating similar tolerability, which is consistent with
        observations from prior studies. No serious adverse events were

    Due to the small number of patients in this study and the high response
rate with the standard of care alone in treatment-naive patients at 12 weeks
of treatment, differences in efficacy between the treatment groups are
inconclusive. Based on the data from this trial and previous trials, further
dose ranging work (as was planned with the 600 mg dosage arm which was stopped
as indicated above), in conjunction with other combination treatment
optimization strategies, is needed.
    The Company is seeking strategic options for advancing the development of
celgosivir and is currently in key partnering discussions.
    MX-2401 (IV lipopeptide; treatment of gram-positive bacterial
infections): MX-2401 is an injectable lipopeptide being developed for the
treatment of serious gram positive bacterial infections. MX-2401 is expected
to be our next clinical candidate. The features of MX-2401 indicate a highly
competitive intravenous agent for treating serious gram positive infections
(including the highly publicized resistant bacteria, VRE and MRSA). Activities
in the program are currently focused on manufacturing and advancing the
program to regulatory submission(s) by late calendar 2009 to commence clinical
development. Advances in manufacturing process development have recently been
    SB 9000 (dinucleotide; treatment of chronic hepatitis B virus
infections): This preclinical program is out-licensed to Spring Bank
Pharmaceuticals Inc. (formerly known as Spring Bank Technologies). Spring Bank
plans to advance SB9000 into clinical development in the first quarter of
calendar 2010. On April 30, 2008 we entered into an amended agreement to
exchange the 4,000 Series A convertible redeemable preferred shares we hold in
Spring Bank for 1,000,000 new Series A convertible preferred shares and we
will also receive 50,000 Spring Bank common shares.
    MX-4565 (small molecule; treatment of neurodegenerative diseases): The
potential for a second year of funding from the Michael J. Fox Foundation
("MJFF") to fund research in our MX-4565 program is under review by MJFF and
    Other Matters: The Company has received from Douglas Johnson (a
shareholder holding approximately 5% of MIGENIX's outstanding common shares) a
requisition for a special meeting of shareholders for the purpose of replacing
a majority of the MIGENIX board of directors. The MIGENIX board of directors
has appointed a Special Committee of directors in respect of the requisition
and related matters. The Company will respond to the requisition of a special
meeting as required by law in due course.
    Management and the Special Committee disagree with the issues raised by
Mr. Johnson and believe that the actions in seeking to acquire control of the
Company have created significant uncertainty and may have a negative impact on
current business discussions and other opportunities for funding being pursued
by management. This action will also distract management and burden the
Company with additional direct and opportunity costs.


    For the three months ended April 30, 2008 ("Q4/08"), MIGENIX incurred a
loss of $3.2 million (Q4/07: $3.1 million) or $0.04 (Q4/07: $0.03) per common
share, and for the year ended April 30, 2008 ("Fiscal 2008") the loss is
$12.8 million ($0.14 per common share) compared to a loss of $16.1 million
($0.19 per common share) for the year ended April 30, 2007 ("Fiscal 2007").
The $3.3 million decrease in the Fiscal 2008 loss compared to the Fiscal 2007
loss is principally attributable to a $2.4 million decrease in the write-down
in intangible assets (see "Write-down of Intangible Assets" below), a
$1.1 million decrease in research and development expenses (see "Research and
Development Expenses" below) and a $0.3 million decrease in amortization of
intangible assets (see "Amortization" below), which were partially offset by a
$0.6 million decrease in Other Income and Expenses (see "Other Income and
Expenses" below).


    During Q4/08 the Company had no revenues (Q4/07: $nil) and during Fiscal
2008 research and development collaboration revenue was nominal (i.e. (less
than) $0.1 million) (Fiscal 2007: nominal).

    Research and Development Expenses

    The following table summarizes our research and development expenses(1,2)
for the periods indicated:

    Research & Development Expenses        Three months      Years ended
                                          ended April 30       April 30
    (Canadian dollars, millions)            2008   2007   2008   2007   2006
    Program Expenses
      Omiganan 1% gel (partnered)           $0.0   $0.0   $0.0   $0.0   $0.0
      Omiganan for dermatological
       diseases (partnered)                  0.0    0.0    0.0    0.0    0.0
      Celgosivir                             0.1    0.3    1.1    1.5    2.1
      MX-2401(3)                             0.0    0.2    0.3    1.2    0.6
      MX-4509                                0.0    0.1    0.0    0.2    0.2
      Other projects                         0.0    0.1    0.1    0.3    0.3
    Total Program Expenses                  $0.1   $0.7   $1.5   $3.2   $3.2
    Unattributed Expenses(3)
      Personnel                             $0.9   $0.7   $3.1   $2.6   $2.7
      Patent costs                           0.2    0.2    0.9    0.8    0.9
      Other                                  0.2    0.3    0.9    0.9    0.9
    Total Unattributed Expenses             $1.3   $1.2   $4.9   $4.3   $4.5

    Total Research & Development Expenses   $1.4   $1.9   $6.4   $7.5   $7.7

    (1) Before amortization expense, technology and license acquisition
        costs, and write-downs of intangibles assets.
    (2) Value of $0.0 million represents $nil to ~$50,000 in expenses during
        the period.
    (3) Net of government assistance

    Our Omiganan programs are being advanced by development and
commercialization partners (Cadence Pharmaceuticals and Cutanea Life
    The decrease in Fiscal 2008 MX-2401 costs is principally due to higher
cost manufacturing activity in Fiscal 2007 in preparation for the GLP studies
started in April 2007. The MX-2401 program costs and Unattributed expenses are
net of government assistance related to the MX-2401 program.
    The approximate $0.6 million increase in the unallocated research and
development costs in Fiscal 2008 is principally due to higher personnel costs.
Research and development personnel costs in Fiscal 2008 increased
approximately $0.5 million mainly due to the addition of personnel initially
to complete non-clinical work in the celgosivir program related to the planned
IND submission - the majority of these personnel are now focused on the
MX-2401 program; and approximately $0.2 million of accrued aggregate severance
for four former employees.
    We anticipate we will make determinations as to which programs to pursue
and how much funding to direct to each program on an ongoing basis. We are
currently focusing our resources on advancing the development of MX-2401.

    General and Corporate Expenses

    General and corporate expenses in Q4/08 were $0.8 million (Q4/07:
$1.0 million) and were $3.6 million for Fiscal 2008 (Fiscal 2007: $3.6
million). Personnel costs were $0.5 million in Q4/08 (Q4/07: $0.5 million) and
were $2.0 million for Fiscal 2008 (Fiscal 2007: $2.3 million).


    Amortization expense for property and equipment was $0.3 million in
Fiscal 2008 (Fiscal 2007: $0.3 million).
    Amortization expense for intangible assets was $0.2 million in Fiscal
2008 (Fiscal 2007: $0.6 million).

    Write-down of Intangible Assets

    Pursuant to the quarterly review of intangible assets for Q4/08 the
Company determined that a $0.4 million write-down was appropriate principally
in respect of a technology acquired as part of our August 2004 merger with
MitoKor. The write-downs of intangible assets for Fiscal 2008 were
$0.9 million - these write-downs were principally in respect of technologies
acquired as part of the MitoKor merger.

    Other Income and Expenses

    Interest income was $0.4 million for Fiscal 2008 (Fiscal 2007:
$0.6 million).
    Accretion expense related to the convertible royalty participation units
for Q4/08 was $0.6 million (Q4/07: $0.3 million) and is $1.9 million for
Fiscal 2008 (Fiscal 2007: $1.4 million). This accretion expense is a non-cash
expense resulting from (i) accreting the liability component of the
convertible royalty participation units to the maximum royalties payable of
$29.5 million (will be reduced for actual royalties paid, any units converted
into common shares, and should our estimate of the probable royalties payable
decline below $29.5 million) over the estimated royalty payment term using the
effective interest method; and (ii) amortizing the deferred financing costs
over the estimated royalty payment term also using the effective interest
    The foreign exchange loss in Fiscal 2008 was $0.1 million (Fiscal 2007:
nominal loss).

    Property & Equipment and Intangible Asset Expenditures

    Property and equipment expenditures for Q4/08 were approximately
$0.2 million (Q4/07: nominal) and for Fiscal 2008 were $0.5 million (Fiscal
2007: $0.2 million). The Q4/08 and Fiscal 2008 expenditures are principally
for leasehold improvements for the Company's new Vancouver facility occupied
in November 2007.
    Intangible asset costs capitalized in Q4/08, Q4/07, Fiscal 2008 and
Fiscal 2007 were $nil.

    Liquidity and Capital Resources

    As of April 30, 2008, the Company had cash, cash equivalents and
short-term investments of $5.6 million (April 30, 2007: $15.3 million) and the
Company's net working capital was $5.0 million (April 30, 2007:
$14.6 million). The $9.6 million decrease in net working capital from
April 30, 2007 is primarily attributable to the cash loss of $9.1 million
(loss excluding non-cash expenses: amortization, write-downs of intangible
assets, stock-based compensation and the accretion of the convertible royalty
participation units) for the year ended April 30, 2008.
    MIGENIX believes that its funds on hand at April 30, 2008 are sufficient
to provide for operations into the fourth quarter of calendar 2008 before
funds received, if any, from existing or new license agreements, the exercise
of warrants and options, and financing activities. The recent request for a
shareholder meeting has negatively impacted the Company's ability to raise
additional capital at this time and may affect the Company's ability to
complete new license agreements and receive the government assistance recorded
as receivable at April 30, 2008. The Company's ability to advance its programs
is constrained due to the Company's current financial resources and the
Company is currently focusing its program spending on its highest priority
programs. The Company plans to operate within an annual burn rate of
approximately $8 million (reduced from previously expected range of $9 million
to $10 million principally due to delaying some non-essential development
activities and focusing on the MX-2401 program). The magnitude of spending in
the Company's development programs will be dependent on: the Company's
financial resources, the licensing status of the celgosivir program, the
Omigard(TM) Phase III study results and results in the various other programs.
We may need to increase or decrease our annual burn rate in response to such
results and our available financial resources. MIGENIX needs to raise
additional funds in support of its operations and there is no assurance that
such funds can be obtained.

    Outstanding Shares

    There are currently 94,463,806 (April 30, 2008: 94,463,806; April 30,
2007: 94,237,205) common shares outstanding; 29,465 convertible royalty
participation units (April 30, 2008 and April 30, 2007: 29,465); and 5,250,000
(April 30, 2008: 5,250,000; April 30, 2007: 9,350,000) preferred shares

    Conference Call Investors, analysts and the media are invited to
participate in a conference call and webcast on Monday, July 21 at
11:00 a.m. ET (8:00 a.m. PT) to discuss this announcement. An update on
company activities will also be provided. To participate in the conference
call, please dial 416-644-3416 or 1-800-733-7560. The call will be available
for replay until July 28, 2008 by calling 416-640-1917 or 1-877-289-8525 and
entering the pass code 21278725 followed by the pound sign. The live and
archived webcast will be accessible through the company's website at
www.migenix.com for the next 90 days.

    Selected Financial Highlights

    Unaudited - In Thousands of Canadian dollars

                                                         April 30,  April 30,
                                                             2008       2007
    Cash and cash equivalents                              $2,621     $2,945
    Short-term investments                                  2,997     12,365
    Other current assets                                    1,327      1,245
    Total current assets                                   $6,945    $16,555
    Long-term investments                                       1          1
    Property & equipment                                      977        881
    Intangible assets                                         543      1,671
    Deferred transaction costs(1)                               -        473
    Total assets                                           $8,466    $19,581

    Liabilities and Shareholders' Equity
    Accounts payable and accrued liabilities               $1,901     $1,958
    Total current liabilities                              $1,901     $1,958
    Convertible royalty participation units(1)              6,246      4,847
    Preferred shares                                            -        115
    Total liabilities                                      $8,147     $6,920

    Shareholders' equity
    Common shares                                        $125,156   $124,994
    Equity portion of convertible royalty participation
     units                                                  4,554      4,554
    Contributed surplus                                     8,091      7,830
    Deficit                                              (137,482)  (124,717)
    Total shareholders' equity                               $319    $12,661
    Total liabilities and shareholders' equity             $8,466    $19,581

    (1) As of May 1, 2007 pursuant to the adoption of new accounting
        standards Deferred transaction costs are netted against the
        convertible royalty participation units in liabilities.

    Unaudited - In Thousands Canadian dollars (except per share amounts)

                                    Three months ended            Year ended
                                              April 30,             April 30,
                                       2008       2007       2008       2007
      Research and development
       collaboration                      -          -          6         19
                                          -          -         $6        $19
      Research and development        1,354      1,870      6,369      7,494
      General and corporate             837        957      3,569      3,616
      Amortization                      152        154        579        847
      Write-down of intangible
       assets                           417          -        891      3,316
                                     $2,760     $2,981    $11,408    $15,273

    Loss before other income
     (expense)                      $(2,760)   $(2,981)  $(11,402)  $(15,254)
      Accretion of convertible
       royalty participation units
       and amortization of trans-
       action costs                    (542)      (318)    (1,873)    (1,426)
      Interest income                    63        167        439        611
      Foreign exchange gain (loss)       (5)         4         71         17
    Loss and comprehensive loss for
     the period                     $(3,244)   $(3,128)  $(12,765)  $(16,052)
    Deficit, beginning of period   (134,238)  (121,589)  (124,717)  (108,665)
    Deficit, end of period        $(137,482) $(124,717) $(137,482) $(124,717)

    Basic and diluted loss per
     common share                    $(0.04)    $(0.03)    $(0.14)    $(0.19)
    Weighted avg. common shares
     outstanding (000's)             94,464     94,058     94,464     82,590

    Unaudited - In Thousands of Canadian dollars

    Loss for the period             $(3,244)   $(3,128)  $(12,765)  $(16,052)
    Items not affecting cash:
      Amortization                      152        154        579        847
      Write-down of intangible
       assets                           417          -        891      3,316
      Stock-based compensation           35         37        271        319
      Issuance of deferred share
       units                              -          -          -         96
      Accretion of convertible
       royalty participation units
       and amortization of trans-
       action costs                     542        318      1,873      1,426
      Milestone to be paid by
       conversion of preferred shares     -        116          -        116
      Changes in non-cash working
       capital items relating to
       operating activities             (54)    (2,129)         -     (2,241)
    Cash used in operating
     activities                     $(2,152)   $(4,632)   $(9,151)  $(12,173)

    Issuance of convertible royalty
     participation units                  -          -          -      7,732
    Issuance of common shares, net
     of issue costs                       -          -          -     10,133
    Proceeds on exercise of stock
     options                              -          -          -         10
    Proceeds on exercise of warrants      -        159         36        331
    Repayment of capital lease
     obligation                           -          -          -         (5)
    Cash provided by financing
     activities                           -       $159        $36    $18,201

    Funds from (purchases of) short-
     term investments                 3,054      2,489      9,255     (8,608)
    Proceeds on disposal of equipment     6          -         18          -
    Purchases of property and
     equipment                         (151)       (17)      (482)      (218)
    Cash provided by (used in)
     investing activities            $2,909     $2,472     $8,791    $(8,826)

    (Decrease) increase in cash and
     cash equivalents                  $757    $(2,001)     $(324)   $(2,798)
    Cash and cash equivalents,
     beginning of period              1,864      4,946      2,945      5,743
    Cash and cash equivalents,
     end of period                   $2,621     $2,945     $2,621     $2,945

    About MIGENIX

    MIGENIX is committed to advancing therapy, improving health, and
enriching life by developing and commercializing drugs primarily in the area
of infectious diseases. The Company's programs include drug candidates for:
the prevention of catheter-related infections (Phase III), the treatment of
dermatological diseases (end of Phase II), the treatment of chronic
hepatitis C infections (Phase II and preclinical), the treatment of serious
gram positive bacterial infections (preclinical) and the treatment of
hepatitis B infections (preclinical). MIGENIX is headquartered in Vancouver,
British Columbia, Canada with US operations in San Diego, California.
Additional information can be found at www.migenix.com.

    "Jim DeMesa"

    James M. DeMesa, M.D.
    President & CEO


    This news release contains forward-looking statements within the meaning
of the United States Private Securities Litigation Reform Act of 1995, and
forward-looking information within the meaning of applicable securities laws
in Canada, (collectively referred to as "forward-looking statements").
Statements, other than statements of historical fact, are forward-looking
statements and include, without limitation, statements regarding our strategy,
future operations, timing and completion of clinical trials, prospects, plans
and objectives of management. The words "anticipates", "believes", "budgets",
"could", "estimates", "expects", "forecasts", "intends", "may", "might",
"plans", "projects", "schedule", "should", "will", "would" and similar
expressions are often intended to identify forward-looking statements, which
include underlying assumptions, although not all forward-looking statements
contain these identifying words. By their nature, forward-looking statements
involve numerous assumptions, known and unknown risks and uncertainties, both
general and specific, that contribute to the possibility that the predictions,
forecasts, projections and other things contemplated by the forward-looking
statements will not occur.
    Although our management believes that the expectations represented by
such forward-looking statements are reasonable, there is significant risk that
the forward-looking statements may not be achieved, and the underlying
assumptions thereto will not prove to be accurate. Forward-looking statements
in this news release include, but are not limited to, statements concerning
our expectations for: Omigard(TM) being a significant value opportunity for
the Company; Cadence Pharmaceuticals having top-line results of the
Omigard(TM) Phase III trial in the second half of 2008 and if the results of
this trial are positive, Cadence submitting a new drug application (NDA) for
Omigard(TM) in the first half of 2009; completion of rest of world
partnership(s) for Omigard(TM) after positive Phase III Omigard(TM) results;
Cutanea Life Sciences' plans to advance omiganan for the treatment of rosacea
into Phase III clinical development by the end of 2008; MX-2401 being our next
clinical program and our plans to advance MX-2401 to regulatory submissions
for clinical development by late 2009; and Spring Bank Pharmaceuticals
advancing SB9000 into clinical development in the first quarter of 2010; the
Company operating within an annual burn rate of approximately $8 million; and
the Company's financial resources being sufficient to fund operations into the
fourth quarter of 2008..
    With respect to the forward-looking statements contained in this news
release, we have made numerous assumptions regarding, among other things: our
ability to achieve milestones related to the clinical programs; the adequacy
of the Omigard(TM) Phase III trial design to generate data that are deemed
sufficient by regulatory authorities to support submitting an NDA for
Omigard(TM); our ability to manage licensing opportunities; our partners'
abilities to successfully market Omigard(TM); Cutanea's ability to manage,
fund and advance omiganan for dermatological applications into Phase III; our
ability to initiate, fund and complete non-clinical studies, clinical studies,
manufacturing and all ancillary activities within our expected timelines;
Spring Bank's ability to manage, fund and advance SB9000 into clinical
development; and future expense levels being within our current expectations.
    Actual results or events could differ materially from the plans,
intentions and expectations expressed or implied in any forward-looking
statements, including the underlying assumptions thereto, as a result of
numerous risks, uncertainties and other factors including: dependence on
corporate collaborations; potential delays; uncertainties related to early
stage of technology and product development; uncertainties as to the
requirement that a drug be found to be safe and effective after extensive
clinical trials and the possibility that the results of such trials, if
completed, will not establish the safety or efficacy of our products;
uncertainties as to future expense levels and the possibility of unanticipated
costs or expenses or cost overruns; the possibility that opportunities will
arise that require more cash than presently anticipated and other
uncertainties related to predictions of future cash requirements; and other
risks and uncertainties which may not be described herein. Certain of these
factors and other factors are described in detail in the Company's Annual
Information Form and Annual Report on Form 20-F and other filings with the
Canadian securities regulatory authorities and the U.S. Securities & Exchange
    Forward-looking statements are based on our current expectations and
MIGENIX assumes no obligations to update such information to reflect later
events or developments.

    The Toronto Stock Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.

For further information:

For further information: Art Ayres, MIGENIX Inc., Tel: (604) 221-9666
Ext. 233, aayres@migenix.com; Dian Griesel, Ph.D., Investor Relations Group,
Tel: (212) 825-3210, Theproteam@aol.com

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890