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OncoGenex Reports Second Quarter 2009 Financial Results

    Conference Call on Thursday, August 6, 2009 at 4:30 p.m. Eastern Time

BOTHELL, WA, and VANCOUVER, Aug. 6 /PRNewswire-FirstCall/ - OncoGenex Pharmaceuticals, Inc. ("OncoGenex" or the "Company") (NASDAQ: OGXI) today reported unaudited financial results for the second quarter and six months ended June 30, 2009 and reviewed the Company's highlights for the second quarter of 2009.

The following consolidated results reflect the operations of OncoGenex Technologies Inc. ("OncoGenex Technologies") prior to the August 21, 2008 reverse takeover of Sonus Pharmaceuticals, Inc. ("Sonus"), and the consolidated results of OncoGenex thereafter.

The loss attributable to common shareholders for the second quarter increased to $4.6 million from $2.9 million in 2008. For the six months ended June 30, 2009 the loss attributable to common shareholders increased to $7.0 million from $5.4 million in 2008.

Research and development expenses for the second quarter increased to $3.6 million from $1.1 million in 2008. For the six months ended June 30, 2009 research and development expenses increased to $5.3 million from $2.0 million in 2008. The increases in 2009 were primarily due to manufacturing costs incurred in the first six months of 2009 associated with the development of our product candidates OGX-011 and OGX-427, an increase in employee expenses and higher facility costs resulting from the reverse takeover of Sonus. Reducing the expenses in the first six months of 2008 was a Scientific Research and Development (SRED) claim, which offset R D expenses in that period. The SRED program is a Canadian federal tax incentive program that encourages Canadian businesses to conduct research and development in Canada. As OncoGenex Technologies became an affiliate of a public company as a result of the reverse takeover, SRED claims can now only be applied against taxes payable.

General and administrative expenses for the second quarter increased to $1.0 million from $0.6 million in 2008. For the six months ended June 30, 2009 general and administrative expenses increased to $1.8 million from $1.2 million in 2008. The increases in 2009 were primarily due to increased employee expenses and increased costs associated with operating as a public company.

The second quarter and six months ended June 30, 2008 also included $0.8 million and $1.6 million respectively in preferred share accretion, a non-cash item, which did not recur in the second quarter or six months ended June 30, 2009, as subsequent to the reverse takeover there are no preferred shares outstanding.

The Company had $5.7 million in cash, cash equivalents and short-term investments as of June 30, 2009, compared to $12.4 million in cash, cash equivalents and short-term investments as of December 31, 2008.

On July 24, 2009, subsequent to the end of the second quarter, the Company announced that it had completed a registered direct offering of 475,000 shares of its common stock to institutional investors at a price of $20.00 per share, for gross proceeds of $9.5 million. The $20.00 offering price represented a 3.5% discount to the closing price on July 17, 2009, the last trading day prior to announcement. After deducting the estimated offering expenses payable by the Company, the net proceeds are expected to be approximately $9.4 million. The Company had 6,027,631 shares outstanding as at August 5, 2009. The Company believes that its cash, cash equivalents and short-term investments will be sufficient to fund its currently planned operations at least through 2010, including:

    -  continuing survival follow-up for previously announced phase 2
       clinical trials of OGX-011;
    -  completion of its phase 1 clinical trial evaluating OGX-427 as a
       monotherapy in patients with solid tumors;
    -  initiation of an investigator-sponsored phase 1 clinical trial
       evaluating OGX-427 treatment in patients with bladder cancer; and
    -  working capital needs, capital expenditures and general corporate

    "We achieved important strategic objectives in the second quarter of 2009,
which leaves us well positioned to focus on our primary objective to secure a
co-development and commercialization partner for our OGX-011 program," said
Scott Cormack, President and CEO of OncoGenex.

    Recent Business Highlights:

    -  Final results of a randomized phase 2 trial of OGX-011 were presented
       during an oral presentation at the 2009 American Society of Clinical
       Oncology (ASCO) Annual Meeting. Analyses indicated a survival benefit
       in patients treated with OGX-011 in combination with docetaxel
       compared to docetaxel alone. The median overall survival in patients
       with advanced metastatic prostate cancer who were treated with OGX-011
       plus docetaxel in a randomized phase 2 trial was 23.8 months compared
       to 16.9 months for patients treated with docetaxel alone -- a 6.9
       month observed survival advantage for the OGX-011 arm. The unadjusted
       hazard ratio (HR), a measure used to compare the death rates between
       treatment groups, was 0.61, representing a 39% lower rate of death for
       patients treated with OGX-011.

    -  Preliminary results of a phase 1 trial of OGX-427 were presented
       during an oral presentation at the 2009 ASCO Annual Meeting.
       Preliminary results as of April 2009 showed that OGX-427 was well
       tolerated as a monotherapy. In addition, OGX-427 demonstrated declines
       in circulating tumor cells at all doses evaluated as well as evidence
       of reduction in tumor markers. Reductions in circulating tumor cells
       and tumor markers both suggest single-agent activity warranting
       further clinical investigation.

    -  The Company reached an agreement with the U.S. Food and Drug
       Administration (FDA) via the special protocol assessment process (SPA)
       on an amendment to the design of a phase 3 registration trial of
       OGX-011. The FDA has agreed on modifications to the study population
       of a previously reviewed phase 3 trial featuring survival as the
       primary endpoint. The study population has been modified to evaluate
       patients receiving first-line chemotherapy, rather than those
       receiving second-line chemotherapy. The FDA has agreed that the
       amended protocol adequately addresses the objectives necessary to
       support a regulatory submission.

    -  In June 2009 the Company was added to the Russell 3000(R) Index, the
       Russell 2000(R) Index and the Russell Microcap(R) Index as part of the
       annual reconstitution of Russell indexes.

Conference Call Today at 4:30 p.m. ET

OncoGenex management will host a conference call at 4:30 p.m. Eastern Time today to provide a business update and discuss the first quarter results. A live webcast will be available through the Events and Presentations Web page found in the Investor Relations section of the OncoGenex Web site at Alternatively, you may access the live conference call by dialing 877-548-7912 (U.S. Canada) or 719-325-4897 (International). A webcast replay will be available approximately two hours after the call and will be archived at the same Web location for 90 days.

About OncoGenex Pharmaceuticals

OncoGenex is a biopharmaceutical company committed to the development and commercialization of new therapies that address unmet needs in the treatment of cancer. OncoGenex has a deep oncology pipeline, with each product candidate having a distinct mechanism of action and representing a unique opportunity for cancer drug development. OGX-011, the lead candidate that has completed five phase 2 clinical trials in prostate, lung and breast cancers, is designed to inhibit the production of a specific protein associated with treatment resistance; OGX-427 is in phase 1 clinical development; SN2310 has completed the phase 1 clinical trial; and CSP-9222 and OGX-225 are currently in pre-clinical development.

OGX-011, OGX-427 and OGX-225 utilize second-generation antisense technology, licensed from Isis Pharmaceuticals (NASDAQ: ISIS), to effectively target and inhibit production of specific proteins in tumor cells. OncoGenex and Isis partnered in the successful discovery of OGX-011, OGX-427 and OGX-225 and with respect to OGX-011, in its initial development. In 2008, OncoGenex and Isis amended their OGX-011 agreement to provide OncoGenex with sole rights to OGX-011 and sole responsibility for development and related costs and partnering decisions, subject to financial obligations to Isis. OncoGenex is also solely responsible for development and related costs and partnering decisions regarding OGX-427 and OGX-225. Key intellectual property related to OGX-011, OGX-427 and OGX-225 were discovered by the University of British Columbia and the Vancouver Prostate Centre, and were exclusively licensed to OncoGenex.

More information about OncoGenex is available at

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the intended use and sufficiency of the Company's cash, cash equivalents and short-term investments, the company's manufacturing readiness, prospects for securing a co-development and commercialization partner and planned phase 3 trials. Such forward-looking statements are subject to risks and uncertainties, including, among others: the risk factors set forth in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for fiscal year 2008. The Company undertakes no obligation to update the forward-looking statements contained herein or to reflect events or circumstances occurring after the date hereof, other than as may be required by applicable law.

                     Condensed Statements of Operations
                               (in thousands)

                                       Three Months Ended   Six Months Ended
                                            June 30,            June 30,
                                         2009      2008      2009      2008
    Operating expenses
      Research and development         $ 3,588   $ 1,108   $ 5,282   $ 1,982
      General and administrative         1,003       646     1,785     1,219
                                       ------------------  ------------------
    Total operating expenses             4,591     1,754     7,067     3,201
                                       ------------------  ------------------
    Other income (expense)                  34      (213)       91      (209)
                                       ------------------  ------------------
    Loss for the period before taxes     4,557     1,967     6,976     3,410
    Income tax expense (recovery)            6       201        (4)      415
                                       ------------------  ------------------
    Net loss                             4,563     2,168     6,972     3,825
      Redeemable convertible preferred
       share accretion                       -       780         -      1556
                                       ------------------  ------------------
    Loss attributable to common
     shareholders                      $ 4,563   $ 2,948   $ 6,972   $ 5,381

                           Condensed Balance Sheets
                               (in thousands)
                                                          June 30,  December
                                                             2009   31, 2008
      Cash, cash equivalents and short term investments    $ 5,701   $12,419
      Amounts and investment tax credit receivable             407     1,243
      Prepaid and other current assets                         575       587
      Property, equipment and other assets                     700       541
    Total assets                                           $ 7,383   $14,790
    Liabilities and stockholders' equity:
      Accounts payable and accrued expenses                $ 1,473   $ 2,252
      Other current liabilities                                717       632
      Long term liabilities                                  1,255     1,199

      Stockholders' equity                                   3,938    10,707
    Total liabilities and stockholders' equity             $ 7,383   $14,790

SOURCE OncoGenex Pharmaceuticals, Inc.
Copyright©2009 PR Newswire.
All rights reserved

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