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BIONOVO, INC.

$N/A (N/A)

BNVI.PK

Press Release

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Bionovo Announces 2010 Highlights and Year-End Financial Results

EMERYVILLE, Calif., March 15, 2011 /PRNewswire/ -- 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 financial results for the year ended December 31, 2010.

"2010 was a year of important progress, especially on the regulatory front," said Isaac Cohen, O.M.D., Bionovo's Chairman and Chief Executive Officer. "Bionovo advanced the lead drug Menerba with both the FDA and EMA. Reaching agreement with the Agencies on the CMC and the overall clinical development plan to NDA clears the way forward and provides accurate development costs and timelines to potential partners. We expect to be able to initiate the Phase 3 clinical trials for Menerba early in the 3rd quarter of this year.

Key Events and Milestones

    --  In 2010, the Company announced the following regarding Menerba(TM), its
        lead drug candidate for the treatment of menopausal hot flashes:
        --  In December, the Company received minutes from its successful
            meeting with the FDA in November, confirming agreements reached on
            the clinical development plan for Menerba.
        --  In September,  an "End of Phase 2" Type B meeting with the FDA
            resulted in a binding agreement on the Chemistry, Manufacturing and
            Control (CMC) plan for Menerba.
        --  In July, the Company received formal guidance from the European
            Medicines Agency (EMA), defining and approving a regulatory pathway
            to marketing approval for Menerba in Europe.
    --  The Company also had continued progress in terms of basic science and
        other pipeline candidates:
        --  Studies were published describing:
            --  how metabolic adaptability contributes to the metastasis of
                tumors. This work is integral to the Company's development of
                drugs that disrupt metabolic pathways as a mechanism.
            --  the cancer prevention mechanism of estrogen receptor beta. As a
                leading pharmaceutical company in the mediation of estrogen
                receptors, such studies are critical for potential new products
                for the Company.
            --  potential estrogen receptor modulating drugs for treating
                menopausal conditions. This is, essentially, a potential roadmap
                for further pipeline candidates in the Bionovo women's health
                platform.
            --  Menerba's effect on neural pathways related to temperature
                regulation, further strengthening the Company's understanding of
                the mechanism of action for Menerba.
            --  the discovery of distinct classes of genes regulated by estrogen
                receptor beta, adding even more to Bionovo's demonstrated
                understanding of the mechanisms of estrogen receptors.
        --  A proprietary, innovative method of high throughput LC-MS/MS tandem
            quantification of multiple bioactive compounds was described, which
            is essential to the development of Menerba.
        --  A fundamental patent was issued for Bezielle(TM) in the treatment of
            metastatic breast cancer.
    --  In 2010, the Company was active in accessing the capital markets and
        government grants for needed funding:
        --  In December, the Company filed its intent with the SEC to launch a
            fully committed underwritten public offering. This offering closed
            in February 2011 for a total of $27.4 million in net proceeds.
        --  In November, the Company announced that it had received a Qualifying
            Therapeutic Discovery Program (QTDP) grant of $489,000 from the
            federal government for the Menerba and Bezielle programs.
        --  In October, the Company announced the closing of a registered direct
            offering with select investors for net proceeds of $2.5 million.
            Although not noted at the time, these fundamental investors were
            integral to the later, larger, underwritten offering that closed in
            February of 2011.
        --  In September, the Company announced that it had received an NIH
            grant of $174,000 to develop drugs for the treatment of
            female-specific obesity and metabolic syndrome.
        --  In July, Bionovo entered into a $15 million, at-the-market firm
            commitment financing agreement with Aspire Capital. Although the
            Company has not yet accessed this facility, it is still available
            under the original conditions. Further, Aspire Capital participated
            in the underwritten offering that closed in February, 2011.
    --  The Company also announced additions to its network of advisors and
        consultants, including leading healthcare professionals with extensive
        experience in the development of therapeutic treatments:
        --  Dr. Richard Weiner, PhD, Emeritus Professor in the Department of
            Obstetrics, Gynecology and Reproductive Sciences, at the University
            of California, San Francisco.
        --  Dr. Paul Pui-Hay But, PhD, Chief Scientist for the Food and Drug
            Authentication Laboratory Ltd., Hong Kong, China.

Full Year Results

For the year ended December 31, 2010 total revenues were $0.6 million compared with $0.3 million for the same period in 2009. Revenues in 2010 consisted of a Qualifying Therapeutic Discovery Project Credit of $0.5 million and $0.1 million in a National Institute of Health (NIH) grant drawdown. Revenue in 2009 was comprised of approximately $55,000 in limited research services revenue combined with $0.2 million in NIH grant drawdown.

For the year ended December 31, 2010 total operating expenses were $18.2 million compared with $16.6 million for the same period in 2009. The increase in 2010 operating expenses were primarily due to additional expenses to support our Menerba manufacturing process development.

The net loss for the year ended December 31, 2010 was $17.7 million, or $0.80 per share, compared with a net loss of $16.4 million, or $0.98 per share, for the same period in 2009. The year-over-year increase in net loss was driven primarily by the expenses related to the Menerba manufacturing process development and 2010 director and employee performance bonuses.

As of December 31, 2010, cash, cash equivalents and short-term investments totaled approximately $2.6 million compared to $15.9 million at December 31, 2009. The decrease is due to the public offering completed in October of 2009 resulting in net proceeds of $17.4 million, whereas the public offering completed in October 2010 generated net proceeds of $2.5 million. The net cash used in operating activities for 2010 was $14.2 million, compared with $13.3 million in 2009.

2011 Guidance

On February 10th, the Company laid out key milestones for 2011, which are reiterated here:




    Manufacture of drug material at
     higher potency for clinical and
     non-clinical testing.             Early first quarter. Completed.
                                         -------------------------------
    Conduct a 40 patient, 28-day
     "tolerability" trial at higher    Late first quarter, early second
     doses planned for later studies.   quarter.
    Non-clinical study for toxicity in Late first quarter, early second
     rodents.                           quarter.
    Manufacture of clinical material
     for Phase 3 study, using FDA-
     approved commercial process.      Second quarter.
    Complete contracts, IRB approval
     and training at U.S. clinical
     sites for the Phase 3 study.      First and second quarter.
    Initiate patient recruitment and
     screening in the Phase 3 study.   End of the second quarter.
    Initiate dosing in the Phase 3
     study.                            Early in the third quarter.
    Data Safety Monitoring Board       Five reviews are planned during
     interim reviews of Phase 3 data.   the course of the Phase 3 study.
    Completion of recruitment for the  Anticipated by the end of the
     Phase 3 study.                     second quarter, 2012.
    Data available from the Phase 3    Anticipated by the end of the
     study.                             fourth quarter, 2012.

Conference Call

Bionovo will conduct a conference call and webcast to review the Company's financial results and plans for 2011. Interested parties can access the call by dialing 1-888-428-7458, or can listen via a live audio only webcast, which can be found at http://bionovo.com/investors/events. A replay of the call will be available by dialing 1-888-632-8973 or 1-585-295-6791 (replay code: 71929604#) through March 18, 2011 or via audio webcast at http://bionovo.com/investors/events beginning on March 16, 2011.

Nasdaq Notice

The Company also announced today that, on March 14, 2011, the company received a letter from Nasdaq stating that, for the last 30 consecutive business days, the bid price of its common stock has closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq Capital Market. The letter further stated that the company has been provided a period of 180 calendar days, or until September 12, 2011, to regain compliance. If, at anytime before September 12, 2011, the bid price of the common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq will provide written notification that compliance has been regained, and this matter will be closed.

In the event the Company does not regain compliance with the Rule within the 180 day period, the Company may be eligible for additional time. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary. If the Company meets these requirements, Nasdaq will inform the Company that it has been granted an additional 180 calendar days, or until March 14, 2012.

For further information on the relevant Nasdaq rules, please consult Nasdaq Listing Rules 5550(a)(2) - bid price, 5810(c)(3)(A) - compliance period, 5810(b) - public disclosure, and 5505 - Capital Market criteria.

The deficiency letter has no effect on the listing of the company's common stock at this time and its common stock will continue to trade on the Nasdaq Capital Market under the symbol "BNVI".

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)
                         Consolidated Statements of Operations
                                      (Unaudited)

                                     Three months ended
                                        December 31,
                                        ------------
                                     2010            2009
                                     ----            ----
                                 (in thousands, except per share data)


    Revenues                         $531            $126
                                     ----            ----

    Operating expenses:
      Research and development      3,835           3,006
      General and
       administrative                 899             943
      Merger cost                       -               -
                                      ---             ---
    Total operating expenses        4,734           3,949
                                    -----           -----

    Loss from operations           (4,203)         (3,823)

    Other income (expense):
      Change in fair value of
       warrant liability              (94)              -
      Interest income                   2               9
      Interest expense                (28)            (18)
      Other expense                    (1)             (5)
                                      ---             ---
    Total other income
     (expense)                       (121)            (14)
                                     ----             ---

    Loss before income tax         (4,324)         (3,837)
      Income tax provision              -               1
                                      ---             ---
    Net loss                      $(4,324)        $(3,836)
                                  =======         =======
      Basic and diluted net
       loss per common share       $(0.18)         $(0.18)
                                   ======          ======
      Shares used in computing
       basic and diluted           24,352          21,101
             net loss per share    ======          ======



                                       Twelve months
                                           ended
                                       December 31,
                                       ------------
                                      2010           2009
                                      ----           ----
                                 (in thousands, except per share data)


    Revenues                          $613           $288
                                      ----           ----

    Operating expenses:
      Research and development      14,642         12,499
      General and
       administrative                3,526          4,053
      Merger cost                        -              -
                                       ---            ---
    Total operating expenses        18,168         16,552
                                    ------         ------

    Loss from operations           (17,555)       (16,264)

    Other income (expense):
      Change in fair value of
       warrant liability               (94)             -
      Interest income                   18             84
      Interest expense                 (61)           (95)
      Other expense                    (39)           (88)
                                       ---            ---
    Total other income
     (expense)                        (176)           (99)
                                      ----            ---

    Loss before income tax         (17,731)       (16,363)
      Income tax provision              (1)            (1)
                                       ---            ---
    Net loss                      $(17,732)      $(16,364)
                                  ========       ========
      Basic and diluted net
       loss per common share        $(0.80)        $(0.98)
                                    ======         ======
      Shares used in computing
       basic and diluted            22,299         16,725
             net loss per share     ======         ======



                                  Accumulated
                                      from
                                   February
                                       1,
                                  2002 (Date
                                       of
                                  inception)
                                       to
                                   December
                                      31,
                                         2010
                                         ----


    Revenues                           $1,793
                                       ------

    Operating expenses:
      Research and development         54,348
      General and
       administrative                  21,129
      Merger cost                       1,964
                                        -----
    Total operating expenses           77,441
                                       ------

    Loss from operations              (75,648)

    Other income (expense):
      Change in fair value of
       warrant liability                  737
      Interest income                   2,092
      Interest expense                   (521)
      Other expense                      (191)
                                         ----
    Total other income
     (expense)                          2,117
                                        -----

    Loss before income tax            (73,531)
      Income tax provision                (15)
                                          ---
    Net loss                         $(73,546)
                                     ========
      Basic and diluted net
       loss per common share           $(6.74)
                                       ======
      Shares used in computing
       basic and diluted               10,908
             net loss per share        ======


                      Bionovo, Inc.
              (A Development Stage Company)
               Consolidated Balance Sheets

                                                December 31,
                                                ------------
                                                  2010           2009
                                                  ----           ----
                                                              (Note
                                           (unaudited)          *)
                                                (in thousands,
                                                 except share
                                                   amounts)
                                ASSETS
    Current assets:
        Cash and cash equivalents               $2,638         $2,799
        Short-term investments                       -         13,135
        Receivables                                 49            251
        Prepaid expenses                           973            214
        Other current assets                       396            161
                                                   ---            ---
              Total current assets               4,056         16,560
    Property and equipment, net                  6,647          6,197
    Patents pending, net                         1,259            822
    Other assets                                 1,020            570
              Total assets                     $12,982        $24,149
                                               =======        =======

                 LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities:
        Accounts payable                          $655           $311
        Accrued compensation and
         benefits                                  901            367
        Current portion of capital
         lease obligations                       1,055            476
        Current portion of notes
         payable                                    40             59
        Warrant liability                        1,843              -
        Other current liabilities                  970            823
                                                   ---            ---
              Total current liabilities          5,464          2,036
        Non-current portion of
         capital lease obligations                 836             96
        Non-current portion of notes
         payable                                    81            121
              Total liabilities                  6,381          2,253
                                                 -----          -----

    Commitments and contingencies

    Shareholders' equity:
       Preferred stock, $0.0001 par
        value; 10,000,000 shares
        authorized; none issued and
        outstanding                                  -              -
       Common stock $0.0001 par
        value, 340,000,000 shares
        authorized, 24,530,112 and
        21,503,738 shares outstanding
        at December 31, 2010 and
        2009, respectively                           2           2
        Additional paid-in capital              80,145         77,713
        Accumulated other
         comprehensive (loss) income                 -             (5)
        Accumulated deficit                    (73,546)       (55,814)
                                               -------        -------
              Total shareholders' equity         6,601         21,896
                                                 -----         ------
                   Total liabilities and
                    shareholders' equity       $12,982        $24,149
                                               =======        =======

             See accompanying notes to these consolidated
                          financial statements

    * 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.