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BIONOVO, INC.

$N/A (N/A)

BNVI.PK

Press Release

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Bionovo Announces Third Quarter 2010 Highlights and Financial Results

Key FDA Clinical Meeting Held; Company on Track to Initiate Phase 3 Trials for Menerba

EMERYVILLE, Calif., Nov. 11, 2010 /PRNewswire-FirstCall/ -- Bionovo, Inc. (Nasdaq: BNVI), a pharmaceutical company focused on the discovery and development of safe and effective treatments for women's health and cancer, today announced third quarter highlights and financial results for the three months ended September 30, 2010. The company also announced that it had positively concluded a key regulatory meeting with the U.S. Food and Drug Administration (FDA) and was proceeding with preparations for pivotal testing of Menerba, the company's drug candidate for menopausal hot flashes.

"We now have a clear path forward from the FDA and the EMA, with approved CMC packages and complete clinical development plans. We are moving forward with Menerba as expeditiously as possible," said Isaac Cohen, Bionovo's Chairman and Chief Executive Officer. "This gives us, and any potential partner, the last piece in the regulatory puzzle."

Over the past quarter, the company accomplished the following:


    Key Events To Date
    ------------------

                   The Company held an anticipated
                   meeting with the U.S. Food and Drug
                   Administration (FDA) on the clinical
                   development plan for Menerba in the
                   U.S. Earlier, the Company had a
                   meeting with the FDA regarding
                   Menerba's Chemistry, Manufacturing
                   and Controls (CMC) package, wherein
    --             the FDA approved Menerba's CMC plan.

                   "With agreements on both the clinical
                   development and the CMC requirements,
                   with both the FDA and the EMA, we are
                   confident we can now satisfy the
                   regulatory requirements for bringing
                   Menerba to market," said Dr. Isaac
                   Cohen.

                   The Company received notification that
                   it had two projects approved for
                   funding at the maximum level under
                   the Qualifying Therapeutic Discovery
                   Project Credit ("QTDP")  program.
                   Bionovo expects to receive the
                   maximum level allowable under the
                   program for its Menerba and Bezielle
                   programs, for menopausal symptom
                   alleviation and the treatment of
                   advanced breast cancer, respectively,
              --   or about $489,000.

                   "We are extremely pleased that our
                   programs for Menerba and Bezielle
                   have been reviewed and assessed
                   favorably by the federal government
                   resulting in two grants under the
                   QTDP grant program, both grants at
                   the maximum level available," said
                   Isaac Cohen, Bionovo's Chairman and
                   Chief Executive Officer.

                   The Company announced the publication
                   of a review of results from studies
                   discussing new classes of estrogen
                   receptor modulating drugs with
                   distinct mechanism for
                   pharmacological effect. The review
                   outlines Bionovo's platform of
                   estrogen receptor modulators for
                   conditions associated with menopause,
                   such as hot flashes, menopausal
              --   obesity and metabolic syndrome.

                   "Bionovo's platform for the discovery
                   of unique drugs for women's health
                   and cancer is described in this
                   review. We now know we can
                   selectively regulate estrogen
                   receptors for specific indications
                   that have a better safety profile.
                   This opens the door for new
                   treatments for many afflictions women
                   encounter after menopause," said Dr.
                   Cohen.

                   The Company announced that it had
                   raised approximately $3.0 million in
                   gross proceeds in a registered direct
                   offering through the sale of common
              --   stock and warrants.

Third Quarter Results

For the quarter ending September 30, 2010 total revenue was $68,000 compared with $155,000 for the same period in 2009. The revenue received in the third quarter of 2010 was received under a National Institutes of Health ("NIH") grant that began in the third quarter of 2010. The revenue received during the same period of 2009 was received under an NIH grant that expired in 2009.

Total operating expenses for the three months ending September 30, 2010 were $4.7 million compared to $3.9 million for the same period in 2009 and $4.1 million for the second quarter of 2010. Total operating expenses for the third quarter included the purchase of manufacturing supplies and equipment, analytical instruments and raw materials and testing in support of the Menerba manufacturing process development.

The Company reported a net loss for the three months ended September 30, 2010 of $4.6 million, or $0.21 per share, compared with a net loss of $3.7 million, or $0.24 per share, for the same period in 2009.

The Company ended the quarter with $3.1 million in cash and cash equivalents, and began the quarter with $6.9 million. On a pro forma basis, taking into account the net proceeds from the financing mentioned above, the cash balance would be $5.6 million.

Conference Call

The Company will conduct a conference call and webcast to review the financial results and the Company's plans for 2010 later today, Thursday, November 11, at 5:00 p.m. (Eastern).

Interested parties can access the call by dialing (877) 317-6789 or (412) 317-6789, or can listen via a live internet webcast, which can be found at http://bionovo.com/investors/events. A replay of the call will be available via webcast at http://bionovo.com/investors/events or by playback at (877) 344-7529 or (412) 317-0088, conference code 445779, through November 16, 2010.

About Bionovo, Inc.

Bionovo, Inc. is a pharmaceutical company focused on the discovery and development of safe and effective treatments for women's health and cancer, markets with significant unmet needs and billions in potential annual revenue. The Company applies its expertise in the biology of menopause and cancer to design new drugs derived from botanical sources which have novel mechanisms of action. Based on the results of early and mid-stage clinical trials, Bionovo believes they have discovered new classes of drug candidates within their rich pipeline with the potential to be leaders in their markets. Bionovo is headquartered in Emeryville, California and is traded on the NASDAQ Capital Market under the symbol, "BNVI". For more information about Bionovo and its programs, visit: http://www.bionovo.com.

Forward Looking Statements

This release contains certain forward-looking statements relating to the business of Bionovo, Inc. that can be identified by the use of forward-looking terminology such as "believes," "expects," or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including uncertainties relating to product development, efficacy and safety, regulatory actions or delays, the ability to obtain or maintain patent or other proprietary intellectual property protection, market acceptance, physician acceptance, third party reimbursement, future capital requirements, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission, which are available at http://www.sec.gov. Bionovo, Inc. is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Financial Tables on Following Pages

                                      Bionovo, Inc.
                              (A Development Stage Company)
                     Condensed Consolidated Statements of Operations
                   (Unaudited, in thousands, except per share amounts)

                                  Three months
                                     ended            Nine Months ended
                                 September 30,          September 30,
                                 -------------          -------------
                                2010          2009      2010           2009
                                ----                    ----

    Revenues                     $68          $155       $82           $162
                                 ---          ----       ---           ----

    Operating expenses:
      Research and
       development             3,673         2,938    10,807          9,493
      General and
       administrative            987           926     2,627          3,110
      Merger cost                  -             -         -              -
                                 ---           ---       ---            ---
    Total operating
     expenses                  4,660         3,864    13,434         12,603
                               -----         -----    ------         ------

    Loss from operations      (4,592)       (3,709)  (13,352)       (12,441)

      Change in fair value
       of warrant liability        -             -         -              -
      Interest income              2             5        16             75
      Interest expense            (9)          (22)      (33)           (77)
      Other expense              (28)            -       (39)           (86)
                                 ---           ---       ---            ---
    Net loss                 $(4,627)      $(3,726) $(13,408)      $(12,529)
                             =======       =======  ========       ========
      Basic and diluted net
       loss per common share  $(0.21)       $(0.24)   $(0.62)        $(0.82)
                              ======        ======    ======         ======

      Shares used in
       computing basic and
       diluted                21,785        15,287    21,607         15,278
        net loss per share    ======        ======    ======         ======



                                   Accumulated
                                        from
                                    February 1,
                                    2002 (Date
                                         of
                                    inception)
                                         to
                                     September
                                        30,
                                    ----------
                                           2010
                                           ----

    Revenues                             $1,262
                                         ------

    Operating expenses:
      Research and development           50,513
      General and administrative         20,229
      Merger cost                         1,964
    Total operating expenses             72,706
                                         ------

    Loss from operations                (71,444)

      Change in fair value of
       warrant liability                    831
      Interest income                     2,090
      Interest expense                     (493)
      Other expense                        (206)
                                           ----
    Net loss                           $(69,222)
                                       ========
      Basic and diluted net loss
       per common share                  $(6.58)
                                         ======

      Shares used in computing
       basic and diluted                 10,517
        net loss per share               ======


                         Bionovo, Inc.
                 (A Development Stage Company)
                  Consolidated Balance Sheets
              (in thousands, except share amounts)
                                                          September  December
                                                              30,       31,
                                                                2010     2009
                                                                ----     ----
                                                         (unaudited)
                                       ASSETS
    Current assets:
        Cash and cash equivalents                             $3,113   $2,799
        Short-term investments                                     -   13,135
        Receivables                                               69      251
        Prepaid expenses                                       1,133      214
        Other current assets                                     232      161
                                                                 ---      ---
              Total current assets                             4,547   16,560
    Property and equipment, net                                7,121    6,197
    Patent pending, net                                        1,187      822
    Other assets                                               1,184      570
              Total assets                                   $14,039  $24,149
                                                             =======  =======

                        LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
        Accounts payable                                        $386     $311
        Accrued compensation and benefits                        344      367
        Current portion of capital lease
         obligations                                           1,123      476
        Current portion of notes payable                          54       59
        Other current liabilities                              1,194      823
                                                               -----      ---
              Total current liabilities                        3,101    2,036
        Non-current portion of capital lease
         obligations                                           1,019       96
        Non-current portion of notes payable                      83      121
              Total liabilities                                4,203    2,253
                                                               -----    -----

    Commitments and contingencies

    Shareholders' equity:
        Preferred stock, $0.0001 par value;
         2,000,000 shares authorized; none
         issued and outstanding                                    -        -
        Common stock $0.0001 par value,
         68,000,000 shares authorized,
         21,802,842 and 21,503,738 shares
         outstanding at September 30, 2010
         and December 31, 2009, respectively                       2     2
        Additional paid-in capital                            79,056   77,713
        Accumulated other comprehensive loss                       -       (5)
        Accumulated deficit                                  (69,222) (55,814)
                                                             -------  -------
              Total shareholders' equity                       9,836   21,896
                                                               -----   ------
                   Total liabilities and shareholders'
                    equity                                   $14,039  $24,149
                                                             =======  =======


    * The balance sheet at December 31, 2009 has been derived from the
    audited financial statements at that date but does not include all
    of the information and footnotes required by accounting principles
    generally accepted in the United States for complete financial
    statements.

SOURCE Bionovo, Inc.