News Column

Taxus Cardium Releases 2Q Financial Results and Recent Developments

August 15, 2014

Taxus Cardium Pharmaceuticals Group and its Cardium Therapeutics operating unit recently presented highlights of financial results for the second quarter ended June 30.

In its release on August 12, Taxus Cardium noted that Consistent with the Company's business strategy, it is primarily focused on the clinical and commercial development of advanced regenerative therapeutics that currently include Generx [Ad5FGF-4], Cardium's late-stage clinical development therapeutic angiogenesis product candidate, and the FDA-cleared Excellagen wound care product and drug, biologic and stem cell delivery platform. Our business strategy focuses on the achievement of key milestones with the potential to enhance valuation of our core strategic product portfolio and technologies, as well as asset sales and future monetizations of the Company's non-core investments. Activities and key accomplishments during the second quarter 2014 include the following:

-Announced positive interim Phase 3 data from Cardium's international ASPIRE clinical study showing significant potential efficacy of Generx angiogenic gene therapy for myocardial ischemia due to coronary artery disease. Statistically significant improvement in the study's primary efficacy endpoint was observed, as measured by changes after eight weeks in the reversible perfusion defect size (RPDS), determined using rest/stress single-photon emission computed tomography (SPECT) imaging. This improvement in RPDS was consistent with the RPDS improvement previously reported in the Phase 2 Generx AGENT clinical study, and of a magnitude similar to that observed following large vessel revascularization procedures, such as by-pass surgery or percutaneous coronary intervention.

-Following completion of an independent detailed preclinical assessment, Excellagen flowable dermal matrix in combination with Orbsen Therapeutics' mesenchymal stromal stem cell therapy Cyndacel- M was selected for clinical evaluation in a Phase 1/2 clinical safety study for the potential treatment of patients with chronic diabetic wounds. This new clinical study will be funded by the European Union under EU framework 7 (FP7). The Company and Orbsen Therapeutics are working in collaboration to initiate this clinical study in Europe in 2015.

-The Company presented the positive interim Phase 3 primary efficacy data and an overview of the Generx clinical development program at the 2014 Biotechnology Industry Organization International Convention, and presented corporate development activities at the annual 2014 Marcum Microcap Conference, covering the Company's strategic focus on its core advanced regenerative therapeutics and technology platforms.

-Reported publication of a scientific article, entitled "Identifying and Overcoming Obstacles in Angiogenic Gene Therapy for Myocardial Ischemia," by Gabor M. Rubanyi, M.D., Ph.D., Cardium's Chief Scientific Officer, in the August 2014 issue of the Journal of Cardiovascular Pharmacology. The publication outlines advances in scientific and medical knowledge pioneered by Cardium and others in therapeutic angiogenesis for myocardial ischemia, including mechanistic and biological insights, optimization of clinical trial design, and selection of target patient populations and meaningful efficacy endpoints. The publication also reports, for the first time, the results of studies performed by Cardium researchers and collaborators, demonstrating a synergistic interaction between Generx-expressed fibroblast growth factor-4 (FGF-4) and vascular endothelial growth factor (VEGF) in the promotion of neovessel formation, with evidence that FGF controls angiogenesis upstream of VEGF.

-The Company has continued activities relating to the strategic partnering process and monetization of Cardium's FDA-cleared Excellagen flowable dermal matrix wound care product for select U.S.- based vertical market channels and geographic markets. Activities have also continued to leverage Excellagen as an advanced regenerative medicine delivery platform by identifying innovative potential future product extensions for tissue regeneration based on stem cells, biologics, peptides and/or small molecule drugs. Consistent with the Company's long-term business strategy, as previously reported, Taxus Cardium does not plan to establish an internal marketing organization and sales force to directly support the commercialization of Excellagen, but continues to credentialize Excellagen in preparation for the completion of strategic partnering(s) for various vertical channel and geographic market opportunities or asset monetization.

-In support of CE Mark registration for Cardium's Excellagen FDA- cleared flowable dermal wound care matrix, the Company responded to a request from the notified body BSI for additional information and looks forward to the completion of this process and to issuance of an international CE Mark registration.

-Continued to advance forward with the commercialization of our non-core LifeAgain advanced medical data analytics business investment, which is focused on the development, marketing and sale of "survivable risk" term life insurance for cancer survivors or others with medical conditions who are currently considered uninsurable based on traditional underwriting standards. The Company may seek to support the growth and development of this non-core business and technology platform through the sale of a minority stake in our LifeAgain business to a strategic partner or financial investors. The LifeAgain website address is www.lifeagain.com.

-The sale of Cardium's non-core To Go Brands nutraceutical business to Healthy Brands Collective / Cell-nique Corp. has substantially reduced the Company's operating costs, and positioned this asset for economic monetization. Healthy Brands has been making significant acquisitions and has previously reported plans to move forward as a public company as its current businesses advance and grow through further acquisition. The Healthy Brands Collective website address is www.healthybrandsco.com.

-Cardium Therapeutics changed its corporate name to Taxus Cardium Pharmaceutical Group Inc. in connection with its strategic collaboration and funding arrangement to support the commercial development of advanced regenerative therapeutics with China-based Shanxi Taxus Pharmaceuticals Co., Ltd.Taxus Cardium Pharmaceuticals Group Inc. is a holding company that operates the U.S.-based Cardium Therapeutics operating unit, which continues to focus on the clinical development and commercialization of advanced regenerative therapeutics.

The Generx product candidate (alferminogene tadenovec, Ad5FGF-4) is an angiogenic gene therapy that is being developed as a treatment for Cardiac Microvascular Insufficiency or CMI in patients with myocardial ischemia and symptomatic chronic stable angina pectoris due to advanced coronary artery disease (CAD).

Traditional surgical approaches such as coronary artery bypass graft (CABG) and percutaneous coronary intervention (PCI) are designed to address blockages in the large vessels of the heart that can be reached using such methods.

Excellagen FDA-Cleared Wound Care Product

Excellagen is a flowable homogenate of pharmaceutically formulated, purified bovine dermal collagen (Type I) in its native 3- dimensional fibrillar configuration, supplied as a sterile, professional-use syringe-based product, and capable of providing a structural scaffold for cellular infiltration and wound granulation. Excellagen can activate platelets, triggering release of essential growth factors and is believed to function as an acellular biological modulator to activate the wound healing process and significantly accelerate the growth of granulation tissue.

Excellagen is intended for professional use following standard debridement procedures in the presence of blood cells and platelets, which are involved with the release of endogenous growth factors. Excellagen's fibrillar collagen formulation is topically applied through easy-to-control, pre-filled sterile syringes and is designed for application at one-week intervals.

In addition to its application for the treatment of chronic non- healing dermal wounds, Excellagen's pharmaceutically formulated collagen has been engineered to serve as a biologics delivery platform, enabling multiple device, tissue scaffolding and therapeutic product extensions for tissue regeneration based on stem cells, biologics, peptides and small molecule drugs. It is believed that the application of Excellagen as a mesenchymal stem cell delivery platform can facilitate wound healing, which is the subject of ongoing preclinical studies.

Financial Report for Second Quarter 2014

For the three months ended June 30, the Company reported a net loss of $985,000, or $(0.09) per share, compared to a net loss of $2,118,000, or $(0.37) per share, for the same period in 2013, reflecting a reduced loss of $1,133,000 or 53 percent arising from lowered research and development costs and general and administrative expenses.

Cardium continued to maintain its reduced overall operating cost structure as it primarily focuses on the clinical and commercial development of its innovative gene therapy and regenerative medicine product and technology platform. As a result, the Company reduced cash-based operating expenses by 48 percent from $1.9 million to $956,000, as reported for the second quarter.

The Company's research and development costs for the three months ended June 30, totaled $139,000 and selling, general and administrative expenses were $818,000, compared to $447,000 and $1,425,000, respectively, for the three months ended June 30, 2013. The 69 percent decrease in research and development costs related to our Generx Aspire study which has now completed the initial Generx pilot study phase to assess the safety and continued efficacy response based on Cardium's new delivery techniques that have been introduced in the international Aspire Phase 3 clinical study, reductions in production and commercial assays and testing costs for Excellagen, as well as reductions in personnel costs. General and administration expenses reflected a cash savings of approximately $607,000 or 42 percent, primarily due to cost reductions implemented in the second half of 2013 which included an overall reduction in headcount and salary reductions as well as savings in facility costs associated with the relocation of our corporate headquarters.

The Company's research and development costs for the six months ended June 30, totaled $382,000 and selling, general and administrative expenses were $1,994,000, compared to $1,172,000 and $2,692,000, respectively, for the six months ended June 30, 2013. The 67 percent decrease in research and development costs related to our Generx Aspire study which has now completed the initial Generx pilot study phase to assess the safety and continued efficacy response based on Cardium's new delivery techniques that have been introduced in the international Aspire Phase 3 clinical study, reductions in production and commercial assays and testing costs for Excellagen, as well as reductions in personnel costs. General and administration expenses reflected a cash savings of approximately $1.2 million or 45 percent, primarily due to cost reductions implemented in the second half of 2013 which included an overall reduction in headcount and salary reductions as well as savings in facility costs associated with the relocation of our corporate headquarters.

For the six months ended June 30, the Company reported a net loss of $2,423,000, or $(0.24) per share, compared to a net loss of $4,380,000, or $(0.72) per share, for the same period in 2013, reflecting a reduced loss of $1,957,000 or 45 percent arising from lowered research and development costs and general and administrative expenses. Net loss for the six months would have been substantially less, at approximately $1,916,000 total (representing a 56 percent reduction compared to the same period in 2013), if not for a non-cash accounting charge of approximately $507,000 associated with accruing for a Black-Scholes valuation of warrants issued during the quarter ($51,000 of which was charged to research and development costs and $456,000 of which was charged to general and administrative expenses). As of June 30, 12.3 million shares of Cardium's common stock were issued and outstanding.

More Information and Complete Details:

www.cardiumthx.com

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