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"Our team has had a busy and productive quarter," said Mike Grey,President and Chief Executive Officer of SGX. "IND enabling studies arecontinuing on our MET inhibitor, SGX126, and we now have a betterunderstanding of the nature of the toxicity observed with SGX523. In addition,the progress we are making in our preclinical and late stage discoveryprograms is encouraging, as we work to build a robust pipeline of targetedoncology therapies. We are also pursuing a number of potential partneringopportunities for our programs, with the objective of expanding our revenuebase."
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MET Program
SGX523: The unexpected toxicity seen in the Phase I studies wascompromised kidney function, as evidenced by increased serum creatinine.Analysis of patient samples from the Phase I studies revealed a metabolismprofile that differs markedly from that observed in previously conductedpreclinical studies. As a result of the observed toxicity, the Company hasdiscontinued further development of SGX523.
SGX126: The Company is continuing development of SGX126. While SGX126shares many of the attractive preclinical properties of SGX523, it isstructurally distinct, more potent in vivo and, based on the results ofpreclinical studies, has a different metabolism profile than that of SGX523.The Company intends to carry out further preclinical studies on SGX126 insupport of clinical development and an IND submission is now targeted forearly 2009.
Additional MET Inhibitors: In addition to SGX126, the Company has anumber of MET inhibitors with attractive potency, selectivity andpharmacokinetic properties that it is evaluating as further MET developmentcandidates.
BCR-ABL Program
SGX393: The Company's internal BCR-ABL program, focused on relapsed andrefractory CML patients, in particular those with the T315I mutation, isprogressing through IND-enabling studies, with an IND submission targeted forthis quarter. Novartis continues to be responsible for the furtherpreclinical and clinical development of BCR-ABL inhibitors identified underthe collaboration, other than SGX393.
Oncology Drug Discovery
In addition to the JAK2 and RAS programs described previously, theCompany's drug discovery portfolio includes other exciting cancer targets,such as RON, ALK, and IKKe. The JAK2, RON, and ALK programs are the moreadvanced drug discovery programs and the Company is targeting nomination of atleast two development candidates from its drug discovery portfolio later thisyear.
Financial Results for the Three Months Ended March 31, 2008
Total revenues in the first quarter of 2008 were $17.0 million compared to$11.0 million in the first quarter of 2007. The increase of $6.0 million isprimarily due to an increase in revenue recognized under the Novartiscollaboration. Specifically, upon the conclusion of the research term of thecollaboration in late March 2008, the Company recognized as revenueapproximately $10.8 million of deferred revenue for the portion of the upfrontpayment which had not yet been earned. This increase in collaborative revenuewas offset by a decrease in revenues from the Company's federal researchgrant. This decrease was primarily due to the recognition of $3.5 million ofrevenue
