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Vion Pharmaceuticals Inc. (NASDAQ: VION)
Four Science Park New Haven 06511
203-498-4210
President and CEO: Alan Kessman
Revenues (FYE December 31, 1998): $1,955,989
Net Loss (FYE December 31, 1998): ($14,891,719)
Market Capitalization: $69.8 million
No. Employees: 42
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Business New Haven
6/14/99
By: BNH
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Cook the chicken thoroughly, boil the eggs well, wash the kitchen counters and never use the same utensils for raw meat and other food. The warnings have been out for years about salmonella, a potentially deadly bacteria. So we scrub and separate and cook to protect ourselves. Who would want to even touch the stuff? Researchers at Vion Pharmaceuticals (originally known as OncoRx Inc.), in concert with microbiologists from Yale University, are very interested in salmonella and its anti-cancer treatment possibilities.
Although salmonella (named after the man who discovered the bacteria, Daniel Salmon) is dangerous on its own, Vion has been researching ways to temper it for medical purposes so that it can be used in a combination with other standard treatments.
The company's proprietary technology, known as Tumor Amplified Protein Expression Therapy (TAPET) allows for certain bacteria or other cancer-fighting agents to be intravenously given to a patient. The bacteria travels through the bloodstream and has the ability to find tumors and then replicate at that site to fight the cancer and inhibit tumor growth.
The Vion technology differs from other therapies employing a virus injected at the tumor site. Vion researchers believe that salmonella may be a good bacterial candidate for use with its TAPET.
As a biopharmaceutical company Vion is involved in developing and then commercializing technologies and products with its focus on treatments for cancer and viral diseases. Un addition to the TAPET technology the company has four other major projects, two of which are in clinical trials.
Vion's Promycin is in Phase III clinical testing,while Triapine is in Phase I clinical trial. The company has done pre-clinical studies on a viral disease treatment named ßLF-d4C, and is working on alkylating agent prodrugs for cancer treatment.
Vion is continuing its close collaboration with Yale and last year gifted $600,000 as well as amended a research grant for specified laboratories at the university. In March, the company filed with the U.S. Food & Drug Administration an Investigational New Drug (IND) application for Phase I safety trials of its lead TAPET, which further strengthens its commitment to Yale.
Vion had its initial public offering in 1995 at $4.00 per unit (comprising common share and two warrants), which generated proceeds of $9.7 million. This transaction was followed by private placements in 1996 and 1997 with proceeds of $11.5 million and $4.5 million, respectively.
In 1998, the company reduced its fully diluted shares outstanding by about 25 percent by eliminating about 75 percent of Class A and 60 percent of Class B warrants through an exchange offer. In April of this year, Vion received $4 million from a private placement of its common stock with proceeds earmarked for funding R&D efforts.
In 1997 Vion signed a licensing agreement for its Promycin product with Boehringer Ingelheim International GmbH. Vion also has licensed its Melasyn product to San Mar Laboratories for use in skin-care products. In April the company announced a research-and-development agreement with EPTTCO Limited of the UK to develop new treatments using Vion's TAPET and the prodrug activation technology of EPTTCO.
Vion's performance is consistent with that of many companies involved in developmental-stage pharmaceutical R&D. In 1998 the company reported a net loss of $14.9 million ($1.24 per diluted share), compared to a net loss of $6.5 million (75 cents per diluted share) for 1997.
Revenues were $1.96 million for 1998, versus $5.27 million for the year before, which included $4 million from technology licensing. Largely due to Phase III clinical trial costs for Promycin, the company's R&D expenditures increased 40 percent to $10.7 million from $7.7 million for the prior year.
On the balance-sheet side, cash and equivalents declined 42 percent to $6.4 million compared to $11 million for 1997. Total assets of $9.3 million with stockholders' equity of $1.5 million for 1998 compare to total assets of $13.6 million and stockholders' equity of $12 million for the prior year.
For the first quarter ended March 31, revenues were $371,414, compared to revenues of $274,842 for the 1998 first quarter. The 1999 number includes $259,468 from the Boehringer Ingelheim GmbH agreement, as well as a first royalty payment of $50,000 from the San Mar agreement.
The net loss of $2.5 million (18 cents per diluted share) for the first quarter compares to a net loss of $3.1 million (32 cents per share) for the 1998 first quarter.
It could be said that things are cooking at Vion, with several research agreements and products in different stages of clinical testing. But stock performance ran hot and cold over the past 12 months with a 52-week high of 7 5/8 and low of 2. On May 27 it closed in the middle of the range, at 5.
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