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Tenax Therapeutics Announces First Quarter Fiscal Year 2015 Financial Results

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Tenax Therapeutics, Inc. (NASDAQ:TENX) , formerly Oxygen Biotherapeutics, Inc., a specialty pharmaceutical company focused on developing and commercializing a portfolio of products for the critical care market, today announced financial results for the first quarter fiscal year 2015 ended July 31, 2014.

“We were pleased to enroll the first patient earlier this month in our ongoing Phase 3 trial for levosimendan, as we move forward now as Tenax Therapeutics with a primary focus on the critical care market,” said John Kelley, Chief Executive Officer of Tenax. “We expect enrollment to continue to ramp up as we activate additional clinical sites during the next four to six months, and to report full results from this study in the first calendar quarter of 2016.

“We were also excited to announce our collaboration with Imperial College London to provide supplemental funding for the accelerated enrollment of their ongoing LeoPARDS trial evaluating levosimendan in septic shock. Clinical data to date suggest that levosimendan may provide important clinical benefits to these patients, and we look forward to evaluating this data to guide our potential clinical development strategy in the United States,” Kelley continued.

Recent Highlights

  • In September, Tenax announced the dosing of the first patients in its Phase 3 LEVO-CTS trial for levosimendan, a double-blind, randomized, placebo-controlled study that will evaluate if levosimendan administered before and during cardiac surgery can reduce the incidence of LCOS and associated morbidity and mortality. Levosimendan has been granted Fast Track status, and the U.S. Food and Drug Administration (FDA) has also agreed to the protocol design under a Special Protocol Assessment (SPA), and provided guidance that a single successful trial will be sufficient to support approval of levosimendan in this indication. The trial is being conducted by Duke University’s Duke Clinical Research Institute.
  • In September, the Company announced that it had received shareholder approval to change the Company name to Tenax Therapeutics, Inc., from Oxygen Biotherapeutics, Inc. The common stock now trades on the NASDAQ Capital Market under the ticker symbol “TENX”.
  • In September, the Company also announced that it was stopping the Oxycyte Phase IIb trial in traumatic brain injury due to continued enrollment issues and is considering strategic alternatives for the program.
  • In August, the Company announced a collaboration with Imperial College London to provide $500,000 in supplemental funding to support the accelerated enrollment and completion of the ongoing LeoPARDS Trial (Levosimendan for the Prevention of Acute oRgan Dysfunction in Sepsis). The LeoPARDS trial is designed to determine whether levosimendan reduces the incidence and severity of acute organ dysfunction in adult patients who have septic shock, as well as evaluate its safety profile.

Upcoming Expected Milestones

  • Expected event rate interim analysis following enrollment of 200 patients in LEVO-CTS trial, by the first half of calendar year 2015
  • Two interim analyses during LEVO-CTS trial testing for efficacy or futility after 50% and 70% of the planned primary endpoint events have been recorded, in the second half of calendar year 2015
  • Last patient of LEVO-CTS trial in the fourth calendar quarter of 2015
  • Full data from Phase 3 LEVO-CTS trial in first calendar quarter of 2016
  • Readout of LeoPARDS trial for levosimendan in septic shock in calendar year 2016

First Quarter Fiscal Year 2015 Financial Results

The Company reported a net loss of $2.2 million or $0.08 per share for the first quarter fiscal year 2015, compared to a net loss of $2.2 million, or $2.06 per share in the same period in fiscal 2014.

The Company reported general and administrative expenses of $1.4 million in the first quarter fiscal year 2015, compared to $1.0 million in the same period in fiscal 2014.

The Company reported research and development expenses of $1.0 million in the first quarter fiscal year 2015, compared to $0.8 million in the same period in fiscal 2014.

At the end of the first quarter fiscal year 2015, the Company had $56.4 million in cash, including the fair value of available for sale securities, compared to $58.3 million at April 30, 2014.

Financial Guidance

The Company continues to expect that its cash balance, including the fair value of its available for sale securities, will be sufficient for it to accomplish its corporate goals through fiscal year 2017.

Michael Jebsen, Chief Financial Officer, said “We continue to execute on our clinical development plan with a capital-efficient strategy that allows us to fund our ongoing Phase 3 trial through the filing of a potential New Drug Application for levosimendan.”

Conference Call

The Tenax management team will host a call today at 8:30am ET to discuss financial results for the first quarter fiscal year 2015.

To participate in the call, please dial 877-407-8029 (domestic) or 201-689-8029 (international) and refer to conference ID 13591038. A live webcast of the call can be accessed under “Events and Presentations” in the Investors section of the Company’s website at www.tenaxthera.com.

An archived webcast recording will be available on the Tenax Therapeutics website beginning approximately two hours after the call.

About Tenax Therapeutics

Tenax Therapeutics, Inc. (formerly Oxygen Biotherapeutics) is a specialty pharmaceutical company focused on developing and commercializing a portfolio of products for the critical care market. The company owns the North American rights to develop and commercialize levosimendan, and the United States Food and Drug Administration (FDA) has granted Fast Track status for levosimendan for the reduction of morbidity and mortality in cardiac surgery patients at risk for developing Low Cardiac Output Syndrome (LCOS). The company initiated a Phase 3 trial with levosimendan in that indication in July 2014. For more information, visit www.tenaxthera.com.

Caution Regarding Forward-Looking Statements

This news release contains certain forward-looking statements by the company that involve risks and uncertainties and reflect the company’s judgment as of the date of this release. The forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to matters beyond the company’s control that could lead to delays in the clinical study, delays in new product introductions and customer acceptance of these new products, and other risks and uncertainties as described in the company’s filings with the Securities and Exchange Commission, including in its quarterly report on Form 10-Q filed on September 15, 2014 and annual report on Form 10-K filed on July 29, 2014, as well as its other filings with the SEC. The company disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. Statements in this press release regarding management’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

CONSOLIDATED BALANCE SHEETS

July 31, 2014

April 30, 2014

(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 21,957,661 $ 58,320,555
Marketable securities 4,166,081
Accounts receivable 36,358 36,358
Government grant receivable 5,424 29,750
Prepaid expenses 273,579 401,964
Other current assets 216,834 177,406
Total current assets 26,655,937 58,966,033
Marketable securities 30,320,490
Property and equipment, net 102,594 124,374
Debt issuance costs, net 21,427
Intangible assets, net 22,998,133 22,999,744
Goodwill 11,265,100 11,265,100
Other assets 52,762 52,762
Total assets $ 91,395,016 $ 93,429,440
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 585,914 $ 411,145
Accrued liabilities 612,822 858,136
Warrant liabilities 680,680 954,876
Current portion of notes payable, net 16,007 346,890
Total current liabilities 1,895,423 2,571,047
Other liabilities 10,932
Deferred tax liability 7,962,100 7,962,100
Total liabilities 9,857,523 10,544,079
Commitments and contingencies
Stockholders’ equity
Common stock, par value $.0001 per share; authorized 400,000,000 shares; issued and outstanding 28,107,264 and 27,858,000, respectively 2,811 2,786
Additional paid-in capital 220,357,577 219,468,498
Accumulated other comprehensive loss (65,560)
Accumulated deficit (138,757,335) (136,585,923)
Total stockholders’ equity 81,537,493 82,885,361
Total liabilities and stockholders’ equity $ 91,395,016 $ 93,429,440

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Three months ended July 31,
2014 2013
(Unaudited) (Unaudited)
Product revenue $ $ 35,394
Cost of sales 27,510
Net product revenue 7,884
Government grant revenue 157,920
Total net revenue 165,804
Operating expenses
Selling, general, and administrative 1,449,859 982,521
Research and development 966,514 772,893
Total operating expenses 2,416,373 1,755,414
Net operating loss 2,416,373 1,589,610
Interest expense 46,260 655,803
Other income (291,221) (141)
Net loss $ 2,171,412 $ 2,245,272
Unrealized loss on marketable securities 65,560
Total comprehensive loss $ 2,236,972 $ 2,245,272
Reconciliation of net loss to net loss attributable to common stockholders:
Net loss $ 2,171,412 $ 2,245,272
Preferred stock dividend 2,094,551
Net loss attributable to common stockholders $ 2,171,412 $ 4,339,823
Net loss per share, basic $ (0.08) $ (2.06)
Weighted average number of common shares outstanding, basic 27,661,499 2,102,771
Net loss per share, diluted $ (0.08) $ (3.36)
Weighted average number of common shares outstanding, diluted 27,661,499 2,210,251

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