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Anesiva Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2009 12:15AM
Anesiva Inc. (ANSV) filed Quarterly Report for the period ended 2009-06-30. Anesiva Inc. seeks to be a leader in the development of novel pharmaceutical products for pain management. The company\'s lead product candidate is Adlea a novel small molecule formulation of capsaicin that is currently in development for the management of acute pain following orthopedic surgeries. Adlea has been shown in ACTIVE-2 and in previous clinical trials to provide well-tolerated and extended pain relief after only a single administration in multiple indications for site-specific acute and chronic moderate-to-severe pain. Anesiva Inc. has a market cap of $9.3 million; its shares were traded at around $0.23 with and P/S ratio of 30.9.
Highlight of Business Operations:
We have an accumulated deficit of $322.8 million as of June 30, 2009. Additionally, we have used net cash of $9.4 million and $39.9 million to fund our operating activities for six months ended June 30, 2009, and 2008, respectively. All of which contributed to our ending cash and cash equivalent balance of approximately $920,000 at June 30, 2009. To date our operating losses have been funded primarily from outside sources of capital.
We are pursuing financing opportunities in both the private and public debt as well as through strategic transactions and corporate partnerships. We have an established history of raising capital through these platforms, and we are actively pursuing our options. On January 20, 2009, we entered into the Investor Agreement where we agreed to sell and issue Investor Securities for a total principal amount of up to $7.0 million, subject to the terms and conditions set forth in the Investor Agreement. The Investor Securities are secured by a first priority security interest in all of the assets we own. We will pay interest at a continuously compounding rate of 7% percent per year. If we default under the Investor Agreement, we will pay interest at a continuously compounding rate of 14% per year. If a change of control event occurs as defined under the Investor Agreement, we will owe the Investors seven (7) times the amount of the outstanding principal amount of the Investor Securities, plus all accrued but unpaid interest. A sale of assets of the company under a bankruptcy, chapter 7 or chapter 11, will be a change of control event, as defined. As of July 20, 2009, we are obligated to pay the outstanding principal and accrued but unpaid interest at the request of a certain majority of the Investors, which has not been received by the Company. Under the terms of the Reinvestment Agreement and upon the close of the Merger, immediately following the redemption by the Company of all of the outstanding securities held by the Investors issued pursuant to the Securities Purchase Agreement at a redemption price in cash equal to 100% of the aggregate outstanding principal amount of and all accrued but unpaid returns on such securities being redeemed, each Investor, upon receipt of the redemption price for the securities, will reinvest the proceeds of such redemption by purchasing unregistered common stock of the Company at a fixed price of $0.30 per share. Under the terms and conditions set forth in the Investor Agreement, we received an initial $3.0 million on January 20, 2009, a second tranche of $2.0 million on March 3, 2009 and the final tranche of approximately $1.3 million on April 1, 2009 under the Investor Agreement.
On May 18, 2009, we entered into a secured note purchase agreement (the Note Purchase Agreement) with Arcion Therapeutics, Inc. (Arcion), pursuant to which we agreed to sell and issue a note (the Arcion Note) in the principal amount of $2.0 million, subject to the terms and conditions set forth in the Note Purchase Agreement. The Arcion Note is secured by a first priority security interest in all of the assets of the Company and AlgoRx Pharmaceuticals, Inc. (AlgoRx), one of our wholly-owned subsidiaries. The Arcion Note accrues interest at a continuously compounding rate of 10% per annum. During the occurrence and continuance of an event of default, the Arcion Note will accrue interest at a continuously compounding rate of 14% per annum. Unless earlier paid pursuant to the terms of the Note Purchase Agreement or accelerated in connection with an event of default, subject to the terms of the Note Purchase Agreement, the outstanding principal and accrued but unpaid returns will be immediately due and payable on October 20, 2009. We may prepay the Arcion Note at any time without penalty. An event of default is defined in the Note Purchase Agreement to include, among other things: (1) a default of the Company or a subsidiary of the Company beyond any applicable cure period under any monetary liability that results in the acceleration of payment of such obligation in an amount over $100,000; (2) any judgment(s) entered against the Company or any subsidiary which in the aggregate exceeds $100,000 and remains unsatisfied pending appeal for 45 days or more after entry; and (3) a failure to pay any principal or interest due under the Arcion Note or failure to pay any other charges due under the Note Purchase Agreement, with such failure continuing for at least three business days.
On March 27, 2009 the Company received a notification from The Nasdaq Stock Market (Nasdaq) that the Company is not in compliance with Marketplace Rule 4450(a)(3) because the Companys stockholders equity at December 31, 2008 was less than the $10.0 million required for continued listing on The Nasdaq Global Market. In addition, the Company is not in compliance with Marketplace Rule 4450(b)(1) because the market value of listed securities of the Company is less than $50.0 million and the total assets and total revenue of the Company was less than $50.0 million as of December 31, 2008. In the notice, Nasdaq requested that the Company provide a plan to regain compliance with the continued listing requirements of The Nasdaq Global Market by April 13, 2009.
In November 2006, we entered into an agreement with Lumen Therapeutics, LLC granting a non-exclusive license to our clinical data and technical information relating to the prevention of saphenous vein graft disease in exchange for future royalties on the net sales of Lumen Therapeutics lead drug candidate and an equity position in Lumen Therapeutics. In August 2007, we entered into an agreement granting Particle Therapeutics a license to incorporate our drug delivery technology into its needle-free, transdermal delivery system for glucagon, a hormone commonly used for the treatment of hypoglycemia associated with Type 1 and Type 2 diabetes. Under the terms of the license agreement, we received an up-front payment in ordinary shares of Particle Therapeutics and will receive milestone payments for certain key clinical and regulatory achievements, royalties on future sales, as well as royalties on revenues from any future sub-licensing of the technology from Particle Therapeutics to third parties. For the three months ended June 30, 2009 and 2008, we recognized none and $100,000 in non monetary revenue, respectively. For the six months ended June 30, 2009 and 2008, we recognized none and $100,000 in non monetary revenue, respectively.
fair values less costs to sell. The net book carrying value of the Zingo assets was approximately $20.1 million and, based upon our analysis as of December 31, 2008, the estimated fair value of the Zingo assets was $183,000. For the three and six months ended June 30, 2009 and 2008, we did not recognize any impairment of long-lived assets.
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