Enrollment on track in Phase III FORTIS-M trial in non-small cell lung cancer
The Company reported that, as of July 31, 2010, 45% of patients (327) in the FORTIS-M trial had been enrolled.  The total planned enrollment in the study is 720 patients. FORTIS-M is evaluating talactoferrin plus best supportive care compared to placebo plus best supportive care in patients with non-small cell lung cancer, whose disease has progressed following two or more prior treatment regimens.  The trial remains on track with enrollment expected to complete in the first half of 2011 and topline data expected by the end of 2011, should all proceed as anticipated.

Phase III registration plan in severe sepsis
The Company also reported that it has held an End-of-Phase II meeting with the U.S. Food & Drug Administration (FDA) to discuss future development plans for talactoferrin in severe sepsis.  The Company plans to meet with European regulatory authorities within the next few months to discuss its development plans in this indication. In its discussions with the Company, the FDA strongly recommended that Agennix conduct two adequate and well-controlled Phase III studies to support a potential Biologic License Application (BLA) submission. 

Agennix plans to start an initial randomized, double-blind, placebo-controlled Phase III trial evaluating oral talactoferrin in adult patients with severe sepsis (sepsis plus one or more organ dysfunctions) in early 2011. In order to maximize the chances of success, the Company intends to base the design of this initial Phase III trial closely on the randomized, double-blind, placebo-controlled Phase II trial, the topline results of which were announced in December 2009. In the Phase III trial, the Company plans to accrue approximately 930 adult patients with severe sepsis at 100-150 leading sites worldwide for the treatment of sepsis. Similar to the Phase II trial, all potentially eligible patients for the Phase III trial will be centrally screened prior to enrollment to confirm that they meet the eligibility criteria.  Patients will be randomized to receive oral talactoferrin or placebo.  Patients in both arms will also receive standard of care treatment for severe sepsis in an intensive care unit (ICU) setting.  The primary endpoint of the Phase III trial will be 28-day all-cause mortality, with secondary endpoints to include longer-term survival. The FDA has confirmed that the proposed primary endpoint is acceptable and indicated that secondary endpoints should include assessment of mortality at 3, 6 and 12 months.

Rajesh Malik, M.D., Chief Medical Officer of Agennix, said, “We are excited to advance the development of talactoferrin in severe sepsis.  This is a life-threatening condition that, with an estimated mortality rate of 30% or higher, is urgently in need of new, effective therapies.  We look forward to initiating a Phase III trial in early 2011 in this important indication.”

Data update from Phase II trial in severe sepsis
The Company also reported that, as part of an independent final audit of the Phase II trial with talactoferrin in severe sepsis prior to preparing for publication of the results, it was determined that one additional patient was affected by the previously disclosed drug labeling and randomization error. The identified patient had mistakenly been included in the placebo arm and should have been included in the talactoferrin arm.  Thus, there were 97 patients in the talactoferrin arm and 93 patients in the placebo arm (previously reported as 96 patients in the talactoferrin arm and 94 in the placebo arm).  This change did not have a material effect on the outcome of the trial.  Baseline characteristics of patients entering the study were mostly balanced between the talactoferrin and placebo groups.  

The final primary endpoint results are now as follows:  46% relative reduction (13% absolute reduction) in 28-day all-cause mortality from 26.9% in the placebo arm to 14.4% in the talactoferrin arm (two-tailed p-value adjusted for cardiovascular dysfunction = 0.05, odds ratio by logistic regression analysis = 0.48). These results reflect a slightly larger improvement in mortality in the talactoferrin arm when compared to the placebo arm than earlier reported.[1] 

Talactoferrin continued to appear to show an effect over the longer term, at three and six months. These results reflect a slightly larger improvement in three- and six-month mortality in the talactoferrin arm when compared to the placebo arm than earlier reported.  Three-month all-cause mortality was 29.7% in the placebo arm compared to 17.9% in the talactoferrin arm, an absolute reduction of 12% and relative reduction of 40% (adjusted two-tailed p-value = 0.08, odds ratio = 0.54).[2] At six months, there was a statistically significant reduction in all-cause mortality from 35.6% in the placebo arm to 21.1% in the talactoferrin arm, an absolute reduction of 15% and relative reduction of 41% (adjusted two-tailed p-value = 0.04, odds ratio = 0.50).[3]

Talactoferrin continued to appear to show a substantial trend toward a decrease in 28-day all-cause mortality in the upper two baseline APACHE II score (an assessment of the severity of the condition) quartiles, with a slight decrease in the second quartile and a slight increase in patients in the lowest APACHE II quartile (scores 0-19), i.e., the least sick patients. It should be noted, however, that, for each of the lower two quartiles, the difference was only one death between the arms. None of the differences was statistically significant.  In addition, there appears to have been no effect on mortality in women in this trial, although it is unclear whether this outcome would be seen in a larger Phase III trial or whether it is merely a consequence of the relatively small number of patients in this trial.

The above analyses were conducted on a modified intent-to-treat basis (also referred to as intent-to-treat as treated), meaning that patients were evaluated based on the treatment they actually received (talactoferrin or placebo) during their first week of treatment. 

Talactoferrin was shown to be very well tolerated in the study with no significant differences in adverse events between the two treatment arms. Of those adverse events considered to be possibly related to treatment, the most frequently reported category in both treatment groups was gastrointestinal disorders (5.5% of patients in the talactoferrin arm and 5.4% in the placebo arm).  There were no serious adverse events considered to be related to treatment with talactoferrin.

The Company expects the final results from the trial to be submitted for publication in a peer-reviewed journal.

About talactoferrin
Talactoferrin is an oral biologic therapy with immunomodulatory and antibacterial properties, which is being studied for the treatment of cancer and severe sepsis. Talactoferrin has demonstrated activity in randomized, double-blind, placebo-controlled Phase II studies in non-small cell lung cancer (NSCLC), as well as in severe sepsis. As a result of the promising results from Phase II studies, two Phase III trials with talactoferrin in NSCLC have been initiated.  NSCLC is one of the most common types of cancer worldwide and the most frequent cause of cancer death.   Agennix also plans to develop talactoferrin further for the treatment of severe sepsis.  Talactoferrin has been shown to be very well tolerated in these patient populations. 

About Agennix
Agennix AG is a publicly listed biopharmaceutical company that is focused on the development of novel therapies that have the potential to substantially improve the length and quality of life of critically ill patients in areas of major unmet medical need. The Company’s most advanced program is talactoferrin, an oral therapy that has demonstrated activity in randomized, double-blind, placebo-controlled Phase II studies in non-small cell lung cancer, as well as in severe sepsis. Talactoferrin is currently in Phase III clinical trials in non-small cell lung cancer, and Agennix plans to develop this program further for the treatment of severe sepsis. Other clinical development programs include RGB-286638, a multi-targeted kinase inhibitor in Phase 1 testing; the oral platinum-based compound satraplatin; and a topical gel form of talactoferrin for diabetic foot ulcers. Agennix’s registered seat is in Heidelberg, Germany. The Company has three sites of operation: Planegg/Munich, Germany; Princeton, New Jersey and Houston, Texas. For additional information, please visit the Agennix Web site at www.agennix.com.

This press release contains forward-looking statements, which express the current beliefs and expectations of the management of Agennix AG. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond our control, that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. There can be no guarantee that the Company will move talactoferrin forward in development for severe sepsis in a timely manner, if at all, or that talactoferrin will ultimately be approved for sale in any country. Actual results could differ materially depending on a number of factors, and we caution investors not to place undue reliance on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date on which they are made and Agennix undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.

[1] Previously, the reported 28-day all-cause mortality results were as follows: 26.6% in the placebo group compared to 14.6% in the talactoferrin group, a 12% absolute and 45% relative reduction (two-tailed adjusted p-value = 0.06, odds ratio = 0.49). 

[2] Previously, the reported three-month all-cause mortality was 29.3% in the placebo arm compared to 18.1% in the talactoferrin arm (adjusted two-tailed p-value = 0.09, odds ratio = 0.55). 

[3] Previously, the reported six-month all-cause mortality was 35.2% in the placebo arm versus 21.3% in the talactoferrin arm (adjusted two-tailed p-value = 0.05, odds ratio = 0.51).

Agennix AG was formed by the business combination of Agennix Incorporated and GPC Biotech AG, which became effective on November 5, 2009, and in which GPC Biotech AG was identified as the acquirer for accounting purposes. Accordingly, the comparative historical financial information of Agennix AG is that of GPC Biotech AG for the respective comparative periods.

First six months of 2010 compared to first six months of 2009
The Company recognized revenue of € 0 and € 0.1 million for the six months ended June 30, 2010 and 2009, respectively. Revenue for the six months ended June 30, 2009, was attributable to the services agreement with Agennix Incorporated prior to the effectiveness of the business combination.

Research and development (R&D) expenses for the six months ended June 30, 2010, increased 364% to € 11.6 million compared to € 2.5 million for the same period in 2009. The increase in R&D expenses was primarily due to increased clinical trial costs related to both of the Company’s Phase 3 trials with talactoferrin (FORTIS-M and FORTIS-C) as a result of the inclusion of Agennix Incorporated’s operations for the first six months of 2010 and a credit to compensation cost of € (1.5) million that was recognized for the first six months of 2009 as a result of the forfeiture of convertible bonds and stock options, which did not occur in 2010.

Despite the inclusion of Agennix Incorporated’s operations for the six months ended June 30, 2010, administrative expenses decreased 31% to € 4.4 million compared to € 6.4 million for the same period in 2009. Included in administrative expenses as of June 30, 2009, were approximately € 3.0 million in one-time merger related costs (banking fees, legal services, audit and other related services) and a credit to compensation cost of € (1.8) million as a result of the forfeiture of convertible bonds and stock options. There were no such charges or credits in the six months ended June 30, 2010.

Net loss for the six months ended June 30, 2010, decreased 4% to € (8.2) million compared to € (8.5) million for the same period in 2009.

Basic and diluted loss per share was € (0.42) for the six months ended June 30, 2010, compared to  € (1.15) for the same period in 2009. The per share amounts for 2009 have been retrospectively adjusted to reflect the effect of the 5 to 1 merger exchange ratio related to the merger of GPC Biotech AG into Agennix AG.

Second quarter of 2010 compared to second quarter of 2009
Revenues for the three months ended June 30, 2010 were € 0 compared to € 0.1 million for the same period in 2009. R&D expenses increased 371% for the second quarter of 2010 to € 6.6 million compared to € 1.4 million for the same period in 2009. Administrative expenses for the second quarter of 2010 decreased 4% to € 2.3 million compared to € 2.4 million for the same quarter in 2009. Net loss for the second quarter of 2010 was € (3.9) million compared to € (4.2) million for the second quarter of 2009. Basic and diluted loss per share was € (0.19) and € (0.57) for the second quarter of 2010 and 2009, respectively.

Quarter over quarter results:  second quarter 2010 compared to first quarter 2010
The Company did not recognize any revenue in the first or second quarter of 2010. R&D expenses increased 32% to € 6.6 million for the second quarter of 2010, compared to € 5.0 million in the first quarter of 2010.  Administrative expenses for the second quarter of 2010 increased 10% to € 2.3 million compared to € 2.1 million for the previous quarter.  The Company’s net loss was € (3.9) million for the second quarter of 2010, compared to € (4.3) million for the previous quarter.  Basic and diluted loss per share was € (0.19) for the second quarter of 2010 compared to € (0.23) for the previous quarter. 

Cash position
As of June 30, 2010, cash, cash equivalents and restricted cash totaled € 4.0 million (December 31, 2009: € 11.5 million). Net cash burn for the six months ended June 30, 2010, was € 17.5 million (June 30, 2009: € 11.4 million). The increase in net cash burn is primarily due to the inclusion of Agennix Incorporated’s operations for the first six months of 2010 and increased clinical trials costs due to the progression of both of the Company’s Phase 3 trials with talactoferrin. Net cash burn is derived by adding net cash used in operating activities and purchases of property, equipment and intangible assets. The figures used to calculate net cash burn are contained in the Company’s interim consolidated cash flow statement for the respective periods.

Following the end of the second quarter, in July 2010, the Company announced that it had entered into an agreement with one of its major shareholders, dievini Hopp BioTech holding GmbH & Co. KG, pursuant to which dievini Hopp BioTech provided a € 15.0 million loan to Agennix.  The loan bears an interest rate of 6% per annum, is unsecured and is repayable on thirty days advance notice, but not before October 15, 2010.

“We continue to make good progress in advancing our business,” said Torsten Hombeck, Ph.D., Chief Financial Officer. “We have decided on a development path for talactoferrin in severe sepsis that should enable us to initiate a Phase 3 trial in early 2011.  We also are pleased with the solid enrollment of patients in our Phase 3 FORTIS-M trial with talactoferrin in non-small cell lung cancer, keeping us on track with our anticipated timeline to see topline data from the trial in late 2011.”

Financial guidance
The Company updated its financial guidance as follows:

Management expects no substantial cash generating revenues for the remainder of 2010 or for 2011. This guidance does not consider cash revenue from potential partnering of the Company’s product candidates due to the uncertainty of the timing of such events.

For the remainder of 2010 and 2011, the Company expects R&D expenses to significantly increase compared to 2009 due to an expected steady increase in clinical trial-related costs as the Company’s Phase 3 trials in non-small cell lung cancer with talactoferrin progress. In addition, the Company plans to initiate a Phase 3 program with talactoferrin in severe sepsis in early 2011.

Administrative expenses are expected to decrease in 2010 compared to 2009 as the one-time costs associated with the merger that were incurred in 2009 will not occur in the following years.

Management believes that, including the € 15 million loan from dievini Hopp BioTech, the Company currently has sufficient cash to fund its operations into the fourth quarter of 2010. The Company is pursuing both dilutive and non-dilutive sources of additional funding. 

Appointment of interim CEO extended to end of 2010
The Company also today reported that the appointment of Friedrich von Bohlen, Ph.D. as interim Chief Executive Officer has been extended to December 31, 2010 to provide additional time for a permanent CEO to be put in place.  Dr. von Bohlen’s appointment was previously scheduled to expire on August 5, 2010.

Conference call scheduled
As previously announced, the Company has scheduled a conference call to which participants may listen via live webcast, accessible through the Agennix Web site at www.agennix.com or via telephone. A replay will be available via the Web site following the live event. The call, which will be conducted in English, will be held on August 5 at 15:00 CET/9:00 AM EST. The dial-in numbers for the call are as follows:

Participants from Europe:    0049 (0)69 71044 5598
                                       0044 (0)20 3003 2666
Participants from the U.S.:  1-646-843-4608

Please dial in 10 minutes before the beginning of the meeting.

About Agennix
Agennix AG is a publicly listed biopharmaceutical company that is focused on the development of novel therapies that have the potential to substantially improve the length and quality of life of critically ill patients in areas of major unmet medical need. The Company’s most advanced program is talactoferrin, an oral therapy that has demonstrated activity in randomized, double-blind, placebo-controlled Phase 2 studies in non-small cell lung cancer, as well as in severe sepsis. Talactoferrin is currently in Phase 3 clinical trials in non-small cell lung cancer, and Agennix plans to develop this program further for the treatment of severe sepsis. Other clinical development programs include RGB-286638, a multi-targeted kinase inhibitor in Phase 1 testing; the oral platinum-based compound satraplatin; and a topical gel form of talactoferrin for diabetic foot ulcers. Agennix’s registered seat is in Heidelberg, Germany. The Company has three sites of operation: Planegg/Munich, Germany; Princeton, New Jersey and Houston, Texas. For additional information, please visit the Agennix Web site at www.agennix.com.

 This press release contains forward-looking statements, which express the current beliefs and expectations of the management of Agennix AG, including statements about the Company’s future cash position and the status of its clinical development programs for talactoferrin. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond the control of the Company, that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. There can be no guarantee that the Company will move talactoferrin forward in development for severe sepsis in a timely manner, if at all, or that talactoferrin will ultimately be approved for sale in any country. Actual results could differ materially depending on a number of factors, and management cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date on which they are made and Agennix undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.

        
For the full management report and condensed consolidated financial statements and accompanying notes for the second quarter and first six months ended June 30, 2010, please see http://www.agennix.com/index.php?option=com_content&view=article&id=122&Itemid=77&lang=en.

* just available in German

Steven Opal, M.D., Professor of Medicine, Infectious Disease Division, Alpert Medical School, Brown University, Providence, Rhode Island, presented the data.  Dr. Opal said:  “There is an urgent need for more effective treatment options for patients with severe sepsis, a challenging to treat condition that affects over 750,000 people in the U.S. annually and a similar number in Europe.  The results of this Phase II trial indicate that talactoferrin has the potential to reduce mortality in patients with severe sepsis while being well tolerated in this very sick patient population.  These results warrant additional study of talactoferrin to treat this condition.”

The Phase II trial was primarily funded by a $3 million grant from the U.S. National Institutes of Health.

Agennix plans to start an initial Phase III trial with talactoferrin in severe sepsis in early 2011.

About severe sepsis

Sepsis is a condition involving infection and generalized inflammation.  The body’s normal response to an infection is to set off a limited chain reaction to fight the infection.  In severe sepsis, this systemic immune response becomes overactive and results in damage to vital body organs, leading to a shutdown of one or more organs and, in many cases, death.  Each year, approximately 750,000 people in the U.S. develop severe sepsis, and a similar number of people are affected in Europe. Due to the aging of the population, this number is expected to grow over time.  An estimated 30-35% of people with severe sepsis are expected to die annually from this condition in the U.S., and the U.S. Centers for Disease Control and Prevention indicates that sepsis is one of the top ten leading causes of death in the U.S.  Patients suffering from severe sepsis must be hospitalized, often in an intensive care unit, and the medical costs to treat sepsis were estimated in 2001 to be over $16 billion in the U.S. alone, a number that is believed to have increased significantly over time.

About talactoferrin

Talactoferrin is an oral biologic therapy with immunomodulatory and antibacterial properties, which is being studied for the treatment of cancer and severe sepsis. Talactoferrin has demonstrated activity in randomized, double-blind, placebo-controlled Phase II studies in non-small cell lung cancer (NSCLC), as well as in severe sepsis. As a result of the promising results from Phase II studies, two Phase III trials with talactoferrin in NSCLC have been initiated.  NSCLC is one of the most common types of cancer worldwide and the most frequent cause of cancer death.  Agennix also plans to develop talactoferrin further for the treatment of severe sepsis.  Talactoferrin has been shown to be very well tolerated in these patient populations. 

About Agennix

Agennix AG is a publicly listed biopharmaceutical company that is focused on the development of novel therapies that have the potential to substantially improve the length and quality of life of critically ill patients in areas of major unmet medical need. The Company’s most advanced program is talactoferrin, an oral therapy that has demonstrated activity in randomized, double-blind, placebo-controlled Phase II studies in non-small cell lung cancer, as well as in severe sepsis. Talactoferrin is currently in Phase III clinical trials in non-small cell lung cancer, and Agennix plans to develop this program further for the treatment of severe sepsis. Other clinical development programs include RGB-286638, a multi-targeted kinase inhibitor in Phase 1 testing; the oral platinum-based compound satraplatin; and a topical gel form of talactoferrin for diabetic foot ulcers. Agennix’s registered seat is in Heidelberg, Germany. The Company has three sites of operation: Planegg/Munich, Germany; Princeton, New Jersey and Houston, Texas. For additional information, please visit the Agennix Web site at www.agennix.com.

This press release contains forward-looking statements, which express the current beliefs and expectations of the management of Agennix AG. Such statements are based on current expectations and are subject to risks and uncertainties, many of which are beyond our control, that could cause future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. There can be no guarantee that the Company will move talactoferrin forward in development for severe sepsis in a timely manner, if at all, or that talactoferrin will ultimately be approved for sale in any country. Actual results could differ materially depending on a number of factors, and we caution investors not to place undue reliance on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date on which they are made and Agennix undertakes no obligation to update these forward-looking statements, even if new information becomes available in the future.