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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16a, 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Month of August, 1998
ALTAREX CORP.
(Exact name of Registrant as specified in its charter)
CAMPUS TOWER
#300, 8625 - 112 STREET
EDMONTON, ALBERTA, CANADA T6G 1K8
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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Altarex Corp. (the "Company") is hereby filing its 1998 Second Quarter
Report, which it distributed to its security holders. A copy of its 1998 Second
Quarter Report report is attached hereto as Exhibit 99.1.
Exhibits
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99.1 1998 Second Quarter Report
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALTAREX CORP.
By: /s/ Richard E. Bagley
----------------------------------------
Name: Richard E. Bagley
Title: President and Chief Executive Officer
Date: August 24, 1998
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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99.1 1998 Second Quarter Report
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EXHIBIT 99.1
ALTAREX CORP.
1998 SECOND QUARTER REPORT
To our Shareholders:
At the end of April, AltaRex announced that it had refocused its operations to
concentrate on its platform technology, Anti-idiotype Induction Therapy, or
AIT(TM), for the immunotherapeutic treatment of cancer. During the second
quarter of 1998 the Company made significant progress towards its goal of
product commercialization utilizing the AIT(TM) technology.
A major step taken during the quarter was the establishment of AltaRex's
Clinical Advisory Board, comprised of U.S. and Canadian oncologists who will
play an important role in the strategy and design of our clinical trials
programs. This distinguished group of individuals includes: Robert Ozols,
M.D./Ph.D. (Chairperson), Senior Vice President for Medical Science at Fox Chase
Cancer Center in Philadelphia and a member of the Oncologic Drugs Advisory
Committee of the Food and Drug Administration (FDA); Roger Cohen, M.D.,
Associate Professor at the University of Virginia, Department of Medicine,
Division of Hematology-Oncology, Director of the Clinical Trials Office and an
Advisor and Consultant to the FDA Center for Biologics Evaluation and Research;
Richard Margolese, M.D. Professor of the Department of Oncology, Herbert Black
Chair in Surgical Oncology at McGill University and recipient of the Order of
Canada and; Daniel Von Hoff, M.D., Director of the Institute for Drug
Development at the Cancer Therapy and Research Center in San Antonio and
President-elect of the American Society of Clinical Oncology.
AltaRex also announced the appointment of The Honourable Monique Begin and Dr.
Jim A. Wright to its Board of Directors. Monique Begin is Professor emerita at
the University of Ottawa and has served as the Dean of the Faculty of Health
Sciences at the same institution. During her appointment as Minister of National
Health and Welfare, Ms. Begin authored the Canada Health Act of 1984. Ms. Begin
currently chairs the Management Committee of the Canadian Breast Cancer Research
Initiative. Dr. Wright is Founder, President and Chief Scientific Officer of
GeneSense Technologies, Inc. He is also Terry Fox Senior Scientist of the
National Cancer Institute of Canada, Associate Director and Senior Scientist of
the Manitoba Institute of Cell Biology and Professor of Microbiology,
Biochemistry and Molecular Biology at the University of Manitoba.
We believe that the formation of a world-class Clinical Advisory Board and
appointment of two prominent Board members will assist us tremendously in
mapping the future direction of the Company.
On May 11th, AltaRex commenced operations from a U.S. subsidiary in Waltham,
Massachusetts, a city west of Boston on Route 128. A number of AltaRex
professionals have relocated to this office and are directing business
development, clinical, regulatory, manufacturing, and investor relations
efforts. Research, early product development and supporting staff will remain in
Edmonton, Alberta, Canada.
Also in the second quarter, AltaRex initiated an open-label Phase II trial of
its OvaRex(TM) immunotherapeutic antibody to treat late-stage ovarian cancer in
women who have experienced disease relapse. This study, which is being conducted
in Vancouver, is the second in a series of planned Phase II OvaRex(TM) trials
and is designed to evaluate safety, clinical response and patient survival. By
providing the Company with clinical response data in 1999, the additional Phase
II studies will supplement the Company's ongoing Phase IIb trial. These trials
are part of the Company's comprehensive strategy to evaluate the OvaRex(TM) drug
for the treatment of distinct patient populations with late-stage ovarian
cancer.
Patient accrual in AltaRex's 280 patient Phase IIb OvaRex(TM) trial is expected
to accelerate as the Company now has 17 U.S. and 21 Canadian clinical centers
operational. It is anticipated that six additional U.S. centers will be added to
the program by the end of the third quarter. As of July 31st, AltaRex had 110
patients enrolled in this North American study. We expect that this trial will
be completed in the first half of 2001.
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In the second half of the year, the Company plans to initiate additional trials
in different ovarian cancer patient populations with the goal of obtaining
further data on the utility of the OvaRex(TM) immunotherapeutic antibody. The
Company will also submit an Investigational New Drug application for its
AIT(TM)-based BrevaRex(TM) product and plans to initiate a Phase I trial for
cancer patients expressing the MUC-1 antigen. MUC-1 may be detectable in breast,
prostate, pancreatic, renal, lung and colorectal cancer patients. The Company
has made considerable progress in achieving its objectives this year and expects
to continue to report on key milestones during the remainder of the year.
FINANCIAL HIGHLIGHTS
Revenues for the three months ended June 30, 1998 were $319,000 compared with
$534,000 for the same period in 1997. For the first six months of 1998, revenues
were $579,000 compared to $722,000 for the same period last year. The net
decrease in both periods resulted from a reduction in research contract revenue
in 1998.
The net loss for the three months ended June 30, 1998 was $2.6 million or $0.16
per share compared to a net loss of $873,000 or $0.06 per share for the same
period in 1997. For the first six months of 1998, the net loss was $5.1 million
or $0.31 per share compared to a net loss of $1.6 million or $0.10 per share for
the same period last year. The increased net loss in both periods resulted from
higher costs associated with clinical and product development activities and
corporate functions supporting product commercialization efforts. The majority
of these costs are attributable to the Company's lead product, the OvaRex(TM)
drug, which is currently undergoing clinical trials.
Cash and short-term investments as at June 30, 1998 was $20.5 million compared
with $25.8 million at June 30, 1997 and $22.6 million at March 31, 1998.
This quarterly report contains forward-looking statements that involve risks and
uncertainties, which may cause actual results to differ materially from the
statements made. For this purpose, any statements that are contained herein that
are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the forgoing, the words "believes", "plans",
"intends", "expects" and similar expressions are intended to identify
forward-looking statements. Such factors include, but are not limited to
changing market conditions, completion of clinical trials, patient enrollment
rates, uncertainty of preclinical trial results, the establishment of new
corporate alliances, the timely development, regulatory approval and market
acceptance of the Company's products, and other risks detailed from time-to-time
in the Company's filings with the United States Securities and Exchange
Commission and Canadian securities authorities.
/s/ Richard E. Bagley
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Richard E. Bagley
President & CEO
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<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In Canadian dollars, Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
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1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue ..................................... $ 319,432 $ 533,931 $ 579,373 $ 721,829
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Research and development .................... 1,771,799 1,057,587 3,758,665 1,775,712
General and administration .................. 1,196,057 348,908 1,921,111 540,389
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2,967,856 1,406,495 5,679,776 2,316,101
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Net loss for the period ..................... $ (2,648,424) $ (872,564) $ (5,100,403) $ (1,594,272)
============ ============ ============ ============
Net loss per common share ................... $ (0.16) $ (0.06) $ (0.31) $ (0.10)
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Weighted average number of
common shares outstanding ................. 16,502,613 15,460,435 16,495,541 15,420,108
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</TABLE>
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET
(In Canadian dollars, Unaudited)
<CAPTION>
As at June 30,
1998 1997
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<S> <C> <C>
ASSETS
Cash and short-term investments ............................................................. $20,498,261 $25,765,021
Other current assets ........................................................................ 424,080 358,211
Capital assets, net ......................................................................... 1,800,914 791,803
Notes receivable ............................................................................ 106,514 --
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$22,829,769 $26,915,035
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities ......................................................................... $ 1,649,870 $ 404,738
Deferred lease credit ....................................................................... 535,533 109,333
Shareholders' equity ........................................................................ 20,644,366 26,400,964
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$22,829,769 $26,915,035
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</TABLE>
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<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Canadian dollars, Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
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1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
CASH USED IN OPERATING ACTIVITIES
Net loss $ (2,648,424) $ (872,564) (5,100,403) $ (1,594,272)
Add items not affecting cash:
Depreciation and amortization 137,109 56,553 259,494 98,837
Amortization of deferred lease credit 33,686) -- (64,686) --
Notes receivable 106,514) -- (106,514) --
Net change in non-cash working capital
balances 702,805 130,856 905,362 (118,499)
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(1,948,710) (685,155) (4,106,747) (1,613,934)
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CASH USED IN INVESTING ACTIVITIES
Purchase of capital assets 232,627) (243,101) (477,640) (426,097)
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(232,627) (243,101) (477,640) (426,097)
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CASH PROVIDED BY FINANCING ACTIVITIES
Issue of common shares, net -- 80,960 36,000 469,103
Deferred lease credit 44,542 120,000 44,542 120,000
------------ ------------ ------------ ------------
44,542 200,960 80,542 589,103
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NET INCREASE (DECREASE) IN CASH
AND SHORT-TERM INVESTMENTS (2,136,795) (727,296) (4,503,845) (1,450,928)
CASH AND SHORT-TERM INVESTMENTS,
BEGINNING OF PERIOD 22,635,056 26,492,317 25,002,106 27,215,949
------------ ------------ ------------ ------------
CASH AND SHORT-TERM INVESTMENTS,
END OF PERIOD $ 20,498,261 $ 25,765,021 $ 20,498,261 $ 25,765,021
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</TABLE>
