AVI BioPharma Inc. (AVII) filed Quarterly Report for the period ended 2009-09-30.
AVI BioPharma develops therapeutic products for the treatment of life-threatening diseases using third-generation NEUGENE antisense drugs and ESPRIT exon skipping technology. AVI's lead NEUGENE antisense compound is designed to target cell proliferation disorders, including cardiovascular restenosis. In addition to targeting specific genes in the body, AVI's antiviral program uses NEUGENE antisense compounds to combat disease by targeting single-stranded RNA viruses, including West Nile virus, hepatitis C virus, dengue virus, Ebola virus and influenza A virus. AVI's NEUGENE-based ESPRIT technology will initially be applied to potential treatments for Duchenne muscular dystrophy. Avi Biopharma Inc. has a market cap of $153.88 million; its shares were traded at around $1.44 with and P/S ratio of 7.24.
Highlight of Business Operations:
Revenues for the third quarter of 2009 were $6.3 million, compared to $5.2 million in the prior-year period, reflecting increases in research contract revenue of $1.1 million. Revenues for the first nine months of 2009 were $12.4 million, compared to $15.8 million in the first nine months of 2008, reflecting decreases in research contract revenues of $3.4 million.
The net loss for the third quarter of 2009 was $8.1 million, or $(0.08) per share, compared with a net loss for the third quarter of 2008 of $6.0 million, or $(0.08) per share. The net loss for the third quarter of 2009 includes a non-cash expense for an increase in the warrant valuation liability of $5.0 million compared to a loss from the same source of $0.2 million during the third quarter of 2008. For the nine months ending September 30, 2009, the Company reported a net loss of $28.7 million, or $(0.33) per share, compared with a net loss for the comparable period in 2008 of $22.8 million, or $(0.33) per share. The net loss for the nine months ending September 30, 2009 includes a non-cash expense for warrant liability of $17.0 million compared to a gain of $1.4 million during the same period of 2008. These are non-cash charges, the Company is not required to expend any cash to settle these liabilities. An increase in warrant valuation is a non-cash expense and is the result of new warrants issued and the increase in the Company’s stock price subsequent to the issuance of new warrants as a part of the equity financings that closed in January and August of 2009. The increase or decrease on the warrant valuation will fluctuate as the market price of the Company’s stock fluctuates.
The Company currently has a total of $61.7 million of contracted development studies. As of September 30, 2009, $44 million has been billed, of which $38.3 million has been received in cash and $5.7 million is in accounts receivable. The Company has $17.7 in development contracts remaining that have not yet been completed and have not been billed. The Company expects to complete the remaining contract activity and receive the contracted revenue in 2010 and early 2011.
In December 2006, the Company announced the execution of a two-year $28 million research contract with the Defense Threat Reduction Agency (DTRA), an agency of the United States Department of Defense (DoD). The contract is directed toward funding the Company’s development of antisense therapeutics to treat the effects of Ebola, Marburg and Junin hemorrhagic viruses, which are seen by DoD as potential biological warfare and bioterrorism agents. In May 2009, the Company received an amendment from DTRA to extend the contract performance period to November 29, 2009 and a cost modification of an additional $5.9 million, increasing the total contract amount to $33.9 million. In September 2009, the Company received a second amendment from DTRA to extend the contract performance period to February 28, 2011 and a cost modification of an additional $11.5 million, increasing the total contract amount to $45.4 million.
During the three month periods ended September 30, 2009 and 2008, the Company recognized $4.4 million and $4.9 million, respectively, in research contract revenue from this contract. During the nine month periods ended September 30, 2009 and 2008, the Company recognized $7.5 million and $13.6 million, respectively, in research contract revenue from this contract. To date, the Company has recognized revenues of $32.3 million from this contract. Funding of the remainder of the contract is anticipated in 2010 and 2011.
In January 2006, the Company announced that the final version of the 2006 defense appropriations act had been approved, which included an allocation of $11.0 million to fund the Company’s ongoing defense-related programs. Net of government administrative costs, it is anticipated that the Company will receive up to $9.8 million under this allocation. The Company’s technology is expected to be used to continue developing therapeutic agents against Ebola, Marburg and Dengue viruses, as well as to continue developing countermeasures for anthrax exposure and antidotes for ricin toxin. The Company has received signed contracts for all of these projects. The Company expects that funding under these signed contracts will be completed over the next 12 months. During the three month periods ended September 30, 2009 and 2008, the Company recognized $0.3 million and $0.2 million, respectively, in research contract revenue from these contracts. During the nine month periods ended September 30, 2009 and 2008, the Company recognized $1.9 million and $2.1 million, respectively, in research contract revenue from this contract. To date, the Company has recognized revenues of $8.8 million on these contracts. Funding of the remainder of these contracts is anticipated in 2010.
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