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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 June, 1999
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 [ ]
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 1999 First Quarter
Report, which it distributed to its security holders. A copy of its 1999 First
Quarter Report report is attached hereto as Exhibit 99.1.
Exhibits
- --------
99.1 1999 First Quarter Report
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1 1999 First 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/ Edward M. Fitzgerald
-------------------------------
Name: Edward M. Fitzgerald
Title: Senior Vice President and Chief
Financial Officer
Date: June 4, 1999
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EXHIBIT 99.1
ALTAREX CORP.
1999 FIRST QUARTER REPORT
To our Shareholders:
We are very pleased to report that, in the first quarter of 1999, the Company
made significant progress with regard to its financing activities, partnering
initiatives and, most importantly, its clinical programs. These advances
demonstrate once again the ability of the Company to deliver on its milestones
which will ultimately create long-term shareholder value. However, the first
quarter also saw the addition of a disappointing chapter in the AltaRex story
with the initiation by Biomira Inc. of legal action concerning the ownership of
important intellectual property of AltaRex, and with a subsequent action filed
by the Company against Biomira.
AltaRex continues to make significant progress with regard to its patient
enrollment for its OvaRex(TM) MAb clinical programs for late-stage ovarian
cancer. As of May 15, 1999 the Company had 245 of a required 280 patients
enrolled in its potentially pivotal North American phase IIb trial and 20 of a
required 102 patients enrolled in its potentially pivotal U.S. phase IIb trial.
Both these trials are expected to be completed in early 2001. In addition, the
Company has 12 of 14 patients enrolled in its Vancouver-based open-label phase
II trial for OvaRex(TM) MAb. This trial has provided encouraging data to date
and we expect to be able to report on preliminary results this year.
As of mid-May, the Company's phase I BrevaRex(TM) MAb trial, for cancer patients
expressing the MUC1 tumor associated antigen, had enrolled 5 of a required 15
patients. Enrollment in this trial is expected to be completed this year.
During the quarter, the Company received good news from an independent Data and
Safety Monitoring Board (DSMB) concerning its North American phase IIb study of
OvaRex(TM) MAb. The DSMB determined that the safety profile of the patients
receiving OvaRex(TM) MAb was similar to those patients receiving the placebo.
This safety profile is important as OvaRex(TM) MAb utilizes the foreign nature
of a mouse antibody to initiate a potent immune response that must also be safe
for patients. The DSMB recommended that the Company continue with its trial as
designed.
Early in January, AltaRex was pleased to announced the appointment of
Christopher F. Nicodemus, M.D., as Senior Vice President, Clinical Research &
Development. In addition to his position at AltaRex, Dr. Nicodemus currently
holds the position of Associate Physician, Department of Medicine, at the
Brigham and Women's Hospital in Boston. Dr. Nicodemus brings to AltaRex thirteen
years of clinical research and drug development experience, nine of those years
in a management capacity. Dr. Nicodemus has held senior management positions
with Diatide Inc., ImmuLogic Pharmaceutical Corp. and Pfizer Labs. His education
and experience adds considerable expertise to the Company as we move forward
with our Anti-idiotype Induction Therapy (AIT(R)) programs.
In terms of financing, subsequent to the first quarter, the Company successfully
completed a public equity offering that initially raised C$14.3 million in gross
proceeds through the issuance of 28.5 million common shares. The confidence of
investors in our technology is very encouraging in the face of the current
Biomira litigation.
Also subsequent to the first quarter, AltaRex was very pleased to announce that
it had signed agreements under which associates of Purdue Pharma L.P., a
privately controlled Norwalk, CT based pharmaceutical organization, will
purchase C$5 million of the above noted equity offering. This brings the total
gross proceeds of the offering to C$19.3 million. In addition to Purdue's equity
offering, AltaRex has granted Purdue a 180-day option to an exclusive worldwide
license to develop and commercialize OvaRex(TM) and BrevaRex(TM) MAbs. If the
option is exercised, and Purdue successfully develops these products, Purdue
could spend in excess of US$100 million over the next three years in research,
development and milestone payments. AltaRex would receive future royalty
payments based on any product sales.
The Purdue agreements are important as they serve as a validation of our AIT(R)-
based platform technology to address major unmet needs in the field of cancer
therapy. Purdue and its associated companies have an impressive track record in
oncology sales, particularly with their painkilling product, OxyContin(R)
tablets, which is co-promoted with Abbott, whose sales are expected to exceed
US$500 million in 1999.
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In February 1999, Biomira commenced legal action against the Company, claiming
ownership of a key invention covered in a patent application entitled "Method
and Composition for Reconforming Multi-Epitopic Antigens to Initiate an Immune
Response." As previously stated, we believe that the Biomira legal claim is
without merit and we plan to defend this and all of AltaRex's intellectual
property positions vigorously.
In March 1999, AltaRex filed suit against Biomira seeking a declaration of the
court that, among other things, (i) Biomira is in breach of the License
Agreement and related Asset Purchase Agreement between the companies, (ii)
AltaRex has the exclusive worldwide right and license to use the technology
licensed to it to develop products using our AIT(R) technology, (iii) as a
result of its breaches, Biomira is not entitled to any rights under the License
Agreement and (iv) the terms of the License Agreement prohibit Biomira from
bringing its legal action. These actions are proceeding through the court. While
this litigation is at an early stage, we remain committed to pursuing all
appropriate avenues to protect and defend our assets.
The Company continues to meet its milestones and to move forward with its
programs. We will continue to update shareholders on our progress as we work
towards the development of improved treatment options for the millions of cancer
sufferers worldwide. Additional information about AltaRex clinical trials can be
found on its web site at www.altarex.com or on the CenterWatch web site at
www.centerwatch.com. Additional information about ovarian cancer can be found at
www.corrineboyerfund.org and at www.ovarian.org.
Financial Highlights
Revenues for the three months ended March 31, 1999 were $194,145 compared with
$259,941 for the same period in 1998. The net decrease is mainly a result of a
reduction in interest income due to lower levels of cash and short-term
investments.
The net loss for the three months ended March 31, 1999 was $4.7 million or $0.28
per share compared to a net loss of $2.5 million or $0.15 per share for the same
period in 1998. The increased net loss represents the Company's increased
investment in clinical and product development activities and supporting efforts
in product commercialization. The majority of these costs are attributable to
the Company's most advanced product, OvaRex(TM) MAb, which is in two potentially
pivotal phase IIb clinical trials.
Cash and short-term investments as at March 31, 1999 was $8.4 million compared
with $22.6 million at March 31, 1998 and $12.8 million at December 31, 1998. The
decrease reflects the ongoing costs of development noted above. In May 1999, the
Company has raised approximately $19.3 million in an offering of its common
shares. The net proceeds of this offering will be used primarily to fund
clinical trial and antibody costs related to OvaRex(TM) MAb and BrevaRex(TM)
MAb.
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 foregoing, the words "believes", "anticipates",
"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, litigation, proprietary rights, patent
protection 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
-----------------------
Richard E. Bagley
President & CEO
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<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Canadian dollars, Unaudited) (In Canadian dollars, Unaudited)
Three Months Ended Three Months Ended
MARCH 31 MARCH 31
-------- --------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <S> <C> <C>
Revenue........................... $ 194,145 $ 259,941 CASH USED IN OPERATING ACTIVITIES
----------- ----------- Net loss............................ $(4,679,085) $(2,451,979)
Add items not affecting cash:
Research and development.......... 3,155,586 2,163,613 Depreciation and amortization...... 148,649 122,385
General and administration........ 1,717,644 548,307 Amortization of deferred
----------- ----------- lease credit....................... (32,300) (31,000)
4,873,230 2,711,920 Net change in non-cash working
----------- ----------- capital balances.................... 287,090 202,557
Net loss for the period........... $(4,679,085) $(2,451,979) ----------- ----------
=========== =========== (4,275,646) (2,158,037)
---------- ---------
Net loss per common share......... $ (0.28) $ (0.15)
=========== ===========
Weighted average number of
common shares outstanding......... 16,512,613 16,488,391 CASH USED IN INVESTING ACTIVITIES
=========== =========== Purchase of capital assets.......... (25,389) (245,013)
----------- ----------
(25,389) (245,013)
----------- ----------
CONDENSED CONSOLIDATED BALANCE SHEET
(In Canadian dollars, Unaudited)
As at March 31 CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
1999 1998 Issue of common shares, net......... -- 36,000
---- ---- Other............................... (113,633) --
----------- ----------
ASSETS (113,633) 36,000
----------- ----------
Cash and short-term investments.. $ 8,408,752 $22,635,056
Other current assets............. 479,310 346,507
Capital assets, net.............. 1,531,159 1,705,396
Other assets..................... 573,966 --
----------- -----------
$10,993,187 $24,686,959 NET INCREASE (DECREASE) IN CASH
=========== =========== AND SHORT-TERM INVESTMENTS.......... (4,414,668) (2,367,050)
LIABILITIES AND SHAREHOLDERS' EQUITY CASH AND SHORT-TERM INVESTMENTS,
Current liabilities.............. $ 2,623,966 $ 869,493 BEGINNING.OF PERIOD................. 12,823,420 25,002,106
Deferred lease credit............ 401,466 524,676 ----------- -----------
Shareholders' equity............. 7,967,755 23,292,790 CASH AND SHORT-TERM INVESTMENTS,
----------- ----------- END OF PERIOD....................... $ 8,408,752 $22,635,056
$10,993,187 $24,686,959 =========== ===========
=========== ===========
</TABLE>
