CHARLOTTESVILLE, Va., March 28, 2016 (GLOBE NEWSWIRE) -- Diffusion Pharmaceuticals Inc. (OTCQX:DFFN), a clinical stage biotechnology company focused on the development of novel small molecule therapeutics for cancer, today reported financial results for the year ended December 31, 2015 and provided an overview of recent operational highlights.
David Kalergis, Chairman and Chief Executive Officer of Diffusion Pharmaceuticals, said, “2015 was a transformational year for Diffusion. In May, we completed the Phase 2 trial of our lead drug trans sodium crocetinate (TSC) in glioblastoma (GBM) brain cancer with positive top-line results. In August, we received the FDA’s agreement on a Phase 3 clinical trial plan, which could support registration of TSC based on a single pivotal trial. In December, we entered into a merger agreement with RestorGenex Corporation (now known as Diffusion Pharmaceuticals Inc.) and, upon the merger’s closing on January 8, 2016, became a public company. Looking further ahead into this coming year, we have assembled a clinical trial advisory committee of global experts to guide us through our upcoming discussions with the FDA regarding expansion of the use of TSC from GBM into pancreatic cancer, one of the most devastating of all the cancers.”
On January 8, 2016, Diffusion Pharmaceuticals LLC completed a reverse merger with RestorGenex Corporation in an all-stock transaction. Following the close of the reverse merger, RestorGenex was renamed Diffusion Pharmaceuticals Inc. and the Company’s ticker symbol was changed to “DFFN”. In conjunction with the merger, holders of outstanding units of Diffusion Pharmaceuticals LLC were issued approximately 83.0 million shares of common stock in the renamed publicly traded company, bringing the total number of shares outstanding to approximately 101.6 million. The issuance of the 83.0 million new shares thus allowed the Company to add an FDA Phase 3-ready asset to what had previously been a pre-clinical drug development pipeline.
As a result of the new stock issuance, former equity holders of Diffusion Pharmaceuticals LLC owned approximately 84.1% of the Common Stock and the shareholders of former RestorGenex owned approximately 15.9% of the Common Stock immediately following the merger’s closing on a fully-diluted basis (subject to certain exceptions and adjustments). The 83.0 million newly issued shares of Diffusion Pharmaceuticals Inc., now belonging to former Diffusion Pharmaceuticals LLC holders, have not been registered with the SEC and therefore are not eligible for public trading at this time. The Company has agreed to file a registration statement covering the resale of these shares within 270 days of the merger closing.
Lead Candidate: Diffusion is continuing to advance the clinical development of its lead candidate TSC. TSC has demonstrated positive results in a Phase 2 clinical trial in patients with newly diagnosed GBM. The U.S. Food and Drug Administration (FDA) has granted orphan drug designation for TSC for the treatment of GBM. At the End-of-Phase-2 meeting with the FDA in August 2015, Diffusion reached an agreement with the agency on the design of a single Phase 3 study which, if successful, would be sufficient to support registration. The Company intends to commence the Phase 3 trial within the next 12 months, contingent on the availability of financial resources and the completion of certain manufacturing and animal toxicology guidelines mandated by the FDA agreement.
Pancreatic Cancer Indication: Diffusion is currently in discussions with the FDA regarding a planned Phase 2/3 clinical trial for TSC in pancreatic cancer. The Company has assembled a clinical advisory committee of key opinion leaders in the field of pancreatic cancer to facilitate the development of the program. The Company anticipates commencing the trial in the first half of 2017, assuming the availability of financial resources.
Metastatic Brain Cancer Indication: The Company is also planning a Phase 2/3 clinical trial program with TSC in metastatic brain cancer, an indication for which it has also received orphan drug designation.
Year End 2015 Results
The financial statements for the year ended December 31, 2015 filed Friday, March 25, 2016 via Form 10-K pertain solely to legacy RestorGenex’s operations. Financial statements filed Friday, March 25, 2016 via Form 8-K/A pertain to legacy Diffusion Pharmaceuticals LLC’s operations as of and for the year ended December 31, 2015 and pre-date the closing of the reverse merger on January 8, 2016. The financial results discussed below pertain to legacy Diffusion Pharmaceuticals LLC’s 2015 operations, as reported in the Form 8-K/A, which also includes pro-forma financial statements for the combined company.
Research and development expenses were $3.9 million for the year ended December 31, 2015, compared to $2.0 million in the prior year. The increase was attributable primarily to the clinical development activities for the TSC Phase 2 clinical trial in GBM that was completed in the second quarter 2015.
General and administrative expenses were $2.5 million for the year ended December 31, 2015, compared to $1.3 million for the year ended December 31, 2014. The increase was attributed primarily to costs associated with the merger transaction.
Net loss was $6.7 million for the year ended December 31, 2015, compared to a net loss of $3.5 million for the year ended December 31, 2014.
Cash, cash equivalents, and certificates of deposit were $2.0 million as of December 31, 2015, compared to $4.8 million as of December 31, 2014. On a pro forma combined basis in conjunction with the closing of the merger with RestorGenex, cash, cash equivalents, and certificates of deposit were $14.0 million for the year ended December 31, 2015.
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals is a clinical stage biotechnology company focused on extending the life expectancy of cancer patients by improving the effectiveness of current standard-of-care treatments including radiation therapy and chemotherapy. Diffusion is developing its lead drug, trans sodium crocetinate (TSC), for use in the many cancer types in which tumor hypoxia (oxygen deprivation) is known to diminish the effectiveness of current treatments. TSC targets the cancer’s hypoxic micro-environment, re-oxygenating treatment-resistant tissue and making the cancer cells more vulnerable to the therapeutic effects of treatments such as radiation therapy and chemotherapy, without the apparent addition of any serious side effects. We believe TSC has potential application in other indications involving hypoxia, such as stroke and neurodegenerative diseases.
A Phase 2 clinical program, completed in the second quarter of 2015, evaluated 59 patients with newly diagnosed glioblastoma multiforme (GBM). This open label, historically controlled study demonstrated a favorable safety and efficacy profile for TSC combined with standard of care. The U.S. Food and Drug Administration has agreed upon the design of a Phase 3 trial in newly diagnosed GBM. Additional planned studies include a Phase 2/3 trial in pancreatic cancer and a Phase 2/3 study in brain metastases. Due to its novel mechanism of action, TSC has safely re-oxygenated a range of tumor types in our preclinical and clinical studies. The Company believes its therapeutic potential is not limited to specific tumors, thereby making it potentially useful to improve current standard-of-care treatments of other life-threatening cancers.
To the extent any statements made in this news release deal with information that are not historical facts, these are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the company’s plans, objectives, expectations and intentions with respect to future operations and products, the potential of the combined company’s technology and product candidates, the anticipated timing of future clinical trials for TSC in GBM and pancreatic cancer, the anticipated financial position, operating results and growth prospects of the combined company and other statements that are not historical in nature, including those that utilize terminology such as “would,” “will,” “plans,” “possibility,” “potential,” “future,” “expects,” “anticipates,” “believes,” “intends,” “continue,” “estimates,” “targets,” “projects,” “intends,” and similar expressions, derivations of such words and the use of future dates. Forward-looking statements by their nature address matters that are, to different degrees, uncertain and involve both known and unknown risks. These uncertainties and risks may cause the company’s actual results to be materially different than those expressed in or implied by such forward-looking statements. Particular uncertainties and risks include: general business and economic conditions; the Company’s need for and ability to obtain additional financing; the Company’s ability to maintain and defend its intellectual property; the conduct and success of the Company’s clinical trials, including successful enrollment in those trials; the safety and efficacy of the Company’s product candidates; the Company’s ability to retain and recruit qualified personnel; the difficulty of developing pharmaceutical products, obtaining regulatory and other approvals and achieving market acceptance; and the other factors discussed in the Company’s public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K. All forward-looking statements in this news release speak only as of the date of this news release and are based on Company management’s current beliefs and expectations. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise after the date of this release, except as required by applicable law.
Diffusion Pharmaceuticals Contacts David Kalergis Chief Executive Officer Diffusion Pharmaceuticals Inc. (434) 220-0718 firstname.lastname@example.org Stephanie Carrington ICR Inc. (646) 277-1282 Stephanie.Carrington@icrinc.com
Source:Diffusion Pharmaceuticals, Inc.