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CAP is the sixth most common cause of death in the United States. CAP andother respiratory tract infections are caused by pathogens such asStreptococcus pneumoniae and Haemophilus influenzae. CAP affects 5.6 millionpatients in the United States each year, with 10 million physician visits and2 million hospitalizations occurring annually.
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Macrolides and penicillins are currently the front-line treatments forrespiratory tract infections such as CAP. As macrolide and penicillinresistance grows and has the potential to cause more clinical failures, thereis a need for new antibiotics with unique mechanisms of action that canovercome this emerging resistance.
"We are excited to make our NDA submission for cethromycin in mild-to-moderate CAP," said Michael T. Flavin, Ph.D., the Company's chief executiveofficer. "Our team has worked tirelessly to complete this important objectivefor the cethromycin program. We look forward to advancing the cethromycin NDAthrough the FDA review process."
The NDA submission is based on a full clinical development andmanufacturing program for cethromycin. The program included two global PhaseIII pivotal studies for the treatment of mild-to-moderate CAP in whichcethromycin was dosed at 300 milligrams once daily for seven days compared tothe standard of care therapy, Biaxin, which was dosed at 250 milligrams twicedaily for seven days. The data from these trials showed that cethromycin wasnon-inferior to Biaxin with a similar safety profile. The most common adversereactions for cethromycin were taste disturbance, diarrhea, nausea andheadache.
More than 5,000 patients have been treated with cethromycin in 53 clinicaltrials to date.
In conjunction with the NDA submission, the Company has received acommitment to increase availability under its loan facility with Leaders Bankfrom $4 million to $10 million. The commitment provides that the loan wouldmature on January 1, 2011 and contain substantially similar terms andconditions as the existing loan agreement between Advanced Life Sciences andLeaders Bank. Advanced Life Sciences has also agreed to issue to Leaders as aclosing fee warrants for the purchase of 65,000 shares of its common stock atan exercise price of $1 per share. Consummation of the increased loan facilityis subject to entering into definitive agreements and other customary closingconditions.
Advanced Life Sciences has also entered into a standby equity distributionagreement (SEDA) with YA Global Investments, L.P. (Yorkville) for the sale ofup to $15 million of shares of the Company's common stock over a two-yearperiod.
"The SEDA is an instrument that allows us financial flexibility while weadvance our ongoing regulatory, partnering and pre-commercial activities forcethromycin," said John L. Flavin President and CFO of Advanced Life Sciences."Our ability to choose if, and when, to access funds under the SEDA facilityprovides us with flexibility and the potential to minimize dilution for ourstockholders."
Under the terms of the SEDA, Advanced Life Sciences may from time to time,in its discretion, sell newly-issued shares of its common stock to Yorkvilleat a discount to market of 5%. The amount of each advance is generallylimited to $400,000 in any weekly period. Advanced Life Sciences is notobligated to utilize any of the $15 million available under the SEDA and thereare no minimum commitments or minimum use penalties.
Based upon the Company's currently outstanding shares of common stock, andoptions and warrants to purchase common stock, the aggregate number of sharesthat Advanced Life Sciences may sell under the SEDA without stockholderapproval is currently limited to approximately 5.3 million shares. Unlessstockholder approval is sought and obtained, the total amount of funds thatultimately can be raised under the SEDA over the two-year term will depend onthe then-current price for Advanced Life Sciences' stock and the number ofshares actually sold. Advanced Life Sciences' new credit agreement withLeaders will also contain a covenant limiting the Company's utilization of theSEDA to $9 million without Leaders' prior consent.
The SEDA does not impose any restrictions on the Company's operatingactivities. During the term of the SEDA, Yorkville is prohibited from engagingin any short selling or derivative transactions related to the Company'scommon stock. Advanced Life Sciences issued 393,339 shares of common stock toYorkville as a commitment fee in connection with entering into the SEDA.Advanced Life Sciences also agreed to file with the SEC a registrationstatement, the effectiveness of which is a condition to the purchase and saleof any shares, with respect to common stock issuable under the SEDA.
The Company will discuss today's news in a conference call with investorsat 9:00 a.m. ET today.
Conference Call Details
The conference call will be webcast live over the Internet. To access thewebcast, visit the Investor Relations section of the Advanced Life Sciencescorporate website at http://www.advancedlifesciences.com. Alternatively,investors may participate in the conference call by dialing 888-679-8018(domestic) or 617-213-4845 (international). The passcode for the conferencecall is 99287584. A replay of the conference call will be available untilOctober 8, 2008. Callers may access the telephone replay by dialing888-286-8010 (domestic) or 617-801-6888 (international), passcode 29205976.Investors are advised to dial into the call at least ten minutes prior to thecall to register. Participants may pre-register for the call athttps://www.theconferencingservice.com/prereg/key.process?key=P88ATW9XX.Pre-registrants will be issued a pin number to use when dialing into the livecall which will provide quick access to the conference by bypassing theoperator upon connection.
About Cethromycin
Cethromycin has shown higher in vitro potency and a broader range ofactivity than macrolides against Gram-positive bacteria associated withrespiratory tract infections, and, again in in vitro tests, it appears to beeffective against penicillin- and macrolide-resistant bacteria. Cethromycinhas a mechanism of action that may slow the onset of future bacterialresistance. In addition to its utility in CAP, cethromycin is also beinginvestigated for the prophylactic treatment of inhalation anthraxpost-exposure.
About Advanced Life Sciences
Advanced Life Sciences is a biopharmaceutical company engaged in thediscovery, development and commercialization of novel drugs in the therapeuticareas of infection, cancer and respiratory diseases. The Company's leadcandidate, cethromycin, is a novel once-a-day oral antibiotic inpre-commercial development for the treatment of respiratory tract infectionsincluding CAP. For more information, please visit us on the web athttp://www.advancedlifesciences.com.
Forward-Looking Statements
Any statements contained in this press release that relate to futureplans, events or performance are forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Forward-lookingstatements represent our management's judgment regarding future events. TheCompany does not undertake any obligations to update any forward-lookingstatements whether as a result of new information, future events or otherwise.Our actual results could differ materially from those discussed herein due toseveral factors including the our ability to obtain and maintain regulatoryapproval and labeling of our product candidates; our plans to develop andcommercialize our product candidates; the loss of key scientific or managementpersonnel; the size and growth of potential markets for our product candidatesand our ability to serve those markets; regulatory developments in the U.S.and foreign countries; the rate and degree of market acceptance of any futureproducts; the accuracy of our estimates regarding expenses, future revenuesand capital requirements; our ability to obtain financing on terms acceptableto us; our ability to obtain and maintain intellectual property protection forour product candidates; the successful development of our sales and marketingcapabilities; the success of competing drugs that become available; and theperformance of third party collaborators and manufacturers. These andadditional risks and uncertainties are detailed in the Company's filings withthe Securities and Exchange Commission.
SOURCE Advanced Life Sciences Holdings, Inc.
