Back to GetFilings.com
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
FOR
ANNUAL AND SPECIAL REPORTS
PURSUANT
TO SECTIONS 13 OR 15 (d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
x ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For
the fiscal year ended December 31, 2004
OR
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission
File Number: 0-25544
_______________
|
Miravant
Medical Technologies |
|
(Exact
name of Registrant as specified in its
charter) |
|
Delaware |
77-0222872 |
|
(State
or other jurisdiction of |
(IRS
Employer Identification No.) |
|
incorporation
or organization) |
|
|
336
Bollay Drive, Santa Barbara, California 93117 |
|
(Address
of principal executive offices, including zip
code) |
|
(805)
685-9880 |
|
(Registrant’s
telephone number, including area code) |
Securities
Registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
Common
Stock, $0.01 Par Value
Common
Share Purchase Rights
Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [ X ] No [ ]
Indicate
by check if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Act).
Yes [ ].
No [X].
The
approximate aggregate market value of voting stock held
by non-affiliates as of June 30,
2004 based
upon the last sale price of the Common Stock of $1.61 per share, as reported on
the OTC
Bulletin Board®, was
approximately $42,879,000. For purposes of this calculation only, the registrant
has assumed that its
directors and executive officers, and any person, who has filed a Schedule 13D
or 13G, is an affiliate.
The
number of shares of Common Stock outstanding as of March 14,
2005 was 37,049,842.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions
of the following document are incorporated by reference into Part III of this
Form 10-K: the Proxy Statement for the Registrant’s 2005 Annual Meeting of
Stockholders, which Miravant currently anticipates holding in June 2005. A copy
of the proxy statement may be obtained, when available, upon written request to
the Corporate Secretary, Miravant Medical Technologies, 336 Bollay Drive, Santa
Barbara, CA 93117.
MIRAVANT
MEDICAL TECHNOLOGIES
ANNUAL
REPORT ON FORM 10-K
FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2004
|
|
PART
I |
|
| |
|
|
|
|
Business
|
4 |
|
|
Properties
|
25 |
|
|
Legal
Proceedings |
25 |
|
|
Submission
of Matters to a Vote of Security-Holders |
25 |
| |
|
|
|
|
PART
II |
|
| |
|
|
|
|
Market
for Registrant’s Common Equity and Related Stockholders
Matters |
26 |
|
|
Selected
Consolidated Financial Data |
27 |
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations |
28 |
|
|
Qualitative
and Quantitative Disclosures About Market Risk |
65 |
|
|
Financial
Statements and Supplementary Data |
65 |
|
|
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure |
94 |
|
|
Controls
and Procedures |
94 |
|
|
Other
Information |
94 |
| |
|
|
|
|
PART
III |
|
| |
|
|
|
|
Directors
and Executive Officers of the Registrant |
95 |
|
|
Executive
Compensation |
95 |
|
|
Security
Ownership of Certain Beneficial Owners and Management |
95 |
|
|
Certain
Relationships and Related Transactions |
95
|
|
|
Principal
Accountant Fees and Services |
95 |
| |
|
|
|
|
PART
IV |
|
| |
|
|
|
|
Exhibits,
Financial Statement Schedules and Reports on Form 8-K |
96 |
| |
|
|
|
|
|
101 |
PART
I
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K contains forward-looking statements, which involve
known and unknown risks and uncertainties. These statements may be identified by
the use of words such as “may,” “will,” “should,” “potential,” “expects,”
“anticipates,” “intends,” “plans,” “believes” and similar expressions.
These
statements, which are based on our current beliefs, expectations and
assumptions, and are subject to a number of risks and uncertainties, including
but not limited to statements regarding: our general beliefs concerning the
efficacy and potential benefits of photodynamic therapy; our ability to
successfully complete the conditions of the Approvable Letter as outlined by the
U.S. Food and Drug Administration, or the FDA, relating to our New Drug
Application, or NDA, submission for SnET2, which we have recently branded for
ophthalmology indications as PHOTREX™; our ability to raise funds to continue
operations; the use of PHOTREX to treat wet age-related macular degeneration, or
AMD; our ability to meet the covenants and continue to borrow under the $15.0
million March 2005 Convertible Debt and Warrant Purchase Agreement, or the March
2005 Debt Agreement; our ability to meet the covenants of the August 2003
Unsecured Convertible Debt and Warrant Purchase Agreement, or the August 2003
Debt Agreement; our ability to ultimately receive regulatory approval from the
FDA for our NDA submission upon satisfactory completion of the contingencies
outlined by the FDA in their Approvable Letter; the assumption that we will
continue as a going concern; our ability to regain our listing status on Nasdaq
or other national stock market exchanges; our plans to collaborate with other
parties and/or license PHOTREX; our ability to meet the requirements of our July
2004 Collaboration Agreement and Securities Purchase Agreement with Guidant
Corporation; our ability to continue to retain employees under our current
financial circumstances; our ability to use our laser and delivery devices in
future clinical trials; our projected IND filings; our expected research and
development expenditures; our patent prosecution strategy; and our expectations
concerning the government exercising its rights to use certain of our licensed
technology. Our
actual results could differ materially from those discussed in these statements
due to a number of risks and uncertainties including but not limited to: failure
to obtain additional funding in a timely manner, if at all; our failure to
comply with the covenants in our March 2005 Debt Agreement and August 2003 Debt
Agreement; or, to the extent we are unable to comply with these covenants, our
ability to obtain waivers from these covenants, which could lead to a default
under those agreements; a failure of our drugs and devices to receive regulatory
approval; other parties declining to collaborate with us due to our financial
condition or other reasons beyond our control; the failure of our existing laser
and delivery technology to prove to be applicable or appropriate for future
studies; our failure to obtain the necessary funding to further our research and
development activities; and unanticipated changes by the government in its past
practices by exercising its rights contrary to our expectations. For a more
complete description of the risks that may impact our business, see “Risk
Factors”, included in Item 7, for a discussion of certain risks, including those
relating to our ability to obtain additional funding, our ability to establish
new strategic collaborations, our operating losses, risks related to our
industry and other forward-looking statements.
General
We are a
pharmaceutical research and development company specializing in photodynamic
therapy, or PDT, a treatment modality based on drugs that respond to light. When
activated by light, these drugs induce a photochemical reaction in the presence
of oxygen that can be used to locally destroy diseased cells and abnormal blood
vessels. We have branded our novel version of PDT technology with the trademark
PhotoPointâ. Our
drugs and devices are in various stages of development and require regulatory
approval prior to sales, marketing or clinical use.
Our most
advanced drug, PHOTREX™ (formerly known as PhotoPoint® SnET2), generic name
rostaporfin,
has
completed two Phase III clinical trials for the treatment of wet age-related
macular degeneration, or AMD. We submitted a New Drug Application, or an NDA,
for PHOTREX, to the U.S. Food and Drug Administration, or the FDA, for its
marketing approval on March 31, 2004, with a priority review designation. On
September 30, 2004, we announced that the FDA had issued an Approvable Letter
for our NDA submission for PHOTREX. The letter outlined the conditions for final
marketing approval, which included a request for an additional confirmatory
Phase III clinical trial, as well as certain other requirements. We have
completed a Special Protocol Assessment with the FDA for the confirmatory
placebo-controlled, randomized clinical trial, and have made the decision to
conduct the clinical trial at investigational sites in Europe. We have selected
Kendle International, Inc., an international clinical research organization, to
manage the clinical trial, which is to be conducted in the United Kingdom and
Central and Eastern Europe and is currently planned to commence in 2005. Even
though the FDA has issued a conditional Approvable Letter, the FDA may not
ultimately approve our NDA for PHOTREX. The clinical trial and approval process
may take a significant amount of time, and FDA approval, if any, is contingent
upon satisfying safety and efficacy requirements.
We
believe that PhotoPoint PDT is a platform technology that has the potential to
provide safe and effective treatments for a number of diseases including those
in ophthalmology, dermatology, cardiovascular disease and oncology. Our
current objective is to develop our PhotoPoint technology for disease
indications with large potential market opportunities and/or unmet medical
needs. Our strategy is to develop PhotoPoint PDT as a primary therapy and, where
appropriate, as a combination therapy with other treatments such as surgery or
drug therapy to achieve efficacious clinical results.
We
believe that commercial success will depend upon safety and efficacy outcomes,
regulatory approvals, competition, third-party reimbursements and other factors
such as the manufacturing, marketing, sales and distribution of our products. At
this time, the scope of our business is research and development with limited
manufacturing capabilities. For commercial manufacturing, marketing, sales and
distribution activities, we have selected and/or may elect to use outside
contractors and/or develop these capabilities internally, or seek strategic
collaborations with pharmaceutical and medical device partners in certain
therapeutic areas.
We have
been unprofitable since our founding and have incurred a cumulative net loss of
approximately $212.9 million as of December 31, 2004. We expect to continue to
incur significant, and likely increasing, operating losses over the next few
years, and we believe we will be required to obtain substantial additional debt
or equity financing to fund our operations during this time until we to achieve
a level of revenues sufficient to support our anticipated cost structure. Our
independent registered public accounting firm, Ernst & Young LLP, have
indicated in their report accompanying our December 31, 2004 consolidated
financial statements that, based on the standards of the Public Company
Accounting Oversight Board (United States), our viability as a going concern is
in question.
We were
incorporated in Delaware in 1989 and, effective September 15, 1997, changed
our name from PDT, Inc. to Miravant Medical Technologies. Our executive offices
and the offices of our three subsidiaries, Miravant Pharmaceuticals, Inc.,
Miravant Systems, Inc. and Miravant Cardiovascular, Inc., are located at 336
Bollay Drive, Santa Barbara, California 93117 and maintain a small office in
Indianapolis, Indiana. Our telephone number is (805) 685-9880. Unless
otherwise indicated, all references to us also include our subsidiaries.
The
following is a summary of our recent significant events:
| · |
Our
primary focus from 2003 through 2004 was the preparation and filing of our
NDA for marketing approval of PHOTREX (formerly known as SnET2), a new
drug for the treatment of AMD and the related responses to requests by the
FDA. In January 2003, we announced our plans to move forward with
preparing our first NDA submission of PHOTREX for the treatment of AMD. We
submitted the NDA on March 31, 2004, seeking marketing approval based on
clinical results in the “per protocol” study population. The per protocol
population consists of those patients who received the minimum exposure to
the PHOTREX treatment regimen pre-specified in the clinical study
protocol, comprising a sub-population of patients in the total study
population. The NDA was accepted by the FDA for filing on June 1, 2004 and
was given a priority review designation. On September 30, 2004, we
announced that the FDA had issued an Approvable Letter for our NDA
submission for PHOTREX. The Approvable Letter outlined the conditions for
final marketing approval, which included a request for an additional
confirmatory clinical trial, as well as certain other requirements.
In
February 2005, we announced that we would conduct a confirmatory Phase III
clinical trial based on a Special Protocol Assessment by the
FDA; |
| · |
In
March 2005, we entered into a Note and Warrant Purchase Agreement, or the
March 2005 Debt Agreement, with the March 2005 Lender. The March 2005 Debt
Agreement allows us to borrow up to $1.0 million per month, with any
unused monthly borrowings to be carried forward. The maximum aggregate
loan amount under the March 2005 Debt Agreement is $15.0 million with the
last available borrowing in June 2006. The March 2005 Lender obligation to
fund each borrowing request is subject to material conditions described in
the March 2005 Debt Agreement. In addition, the March 2005 Lender may
terminate its obligations under the March 2005 Debt Agreement at any time
if Miravant in the reasonable judgment of the March 2005 Lender, is not
meeting its business objectives and is subject to negative covenants and
other restrictions. Each Note and accrued interest, if any, will be
convertible into shares of our Common Stock at a conversion price of one
hundred ten percent (110%) of the average monthly closing price of the
month preceding the issuance of each Note. The notes earn interest
quarterly at the prime rate plus three percent (3%) and at our option and
subject to certain restrictions, we may make interest payments in cash or
in shares of Common Stock. The borrowings are secured by our assets to the
extent of the amount borrowed. In connection with each borrowing under the
March 2005 Debt Agreement, we will issue a warrant to purchase one-quarter
(1/4) of a share of Miravant Common Stock for each convertible share of
Common Stock issued. The exercise price of each warrant will be equal to
one hundred ten percent (110%) of the average monthly closing price of the
month preceding the issuance of each Note. Each warrant will terminate on
December 31, 2013, unless previously exercised. We have also agreed to
provide the March 2005 Lender certain registration rights in connection
with this transaction; |
| · |
In
July 2004, we entered into a Collaboration Agreement and Securities
Purchase Agreement with Advanced Cardiovascular Systems, Inc., a wholly
owned subsidiary of Guidant Corporation, pursuant to which we sold
1,112,966 shares of Series A Convertible Preferred Stock, resulting in
proceeds to us of $3.0 million. Additionally, we can receive up to $4.0
million in additional convertible preferred stock investments upon the
completion of certain milestones related to our cardiovascular program.
The $3.0 million of Preferred Stock purchased by Guidant is convertible
into our Common Stock at $2.70 per share and includes registration rights
for the underlying Common Stock. In addition, we are required to provide
additional funding of at least $5.0 million over the period of the
collaboration and the funds invested by Guidant must be spent on specified
cardiovascular programs. The agreements also contain various covenant and
termination provisions as defined by the
agreements; |
| · |
In
April 2004, we entered into a Securities Purchase Agreement with a group
of institutional investors, pursuant to which we sold 4,564,000 shares of
Common Stock at $2.25 per share, resulting in proceeds to us of
approximately $10.3 million; |
| · |
In
February 2004, we entered into an Unsecured Convertible Debenture Purchase
Agreement, or the February 2004 Debt Agreement, with certain private
accredited investors, or the February 2004 Lenders. Under the February
2004 Debt Agreement we issued $2.0 million worth of convertible
debentures, convertible at $2.00 per share. As of March 14, 2005, all $2.0
million of the Notes issued have been converted into 1.0 million shares of
Common Stock; and |
| · |
In
August 2003, we entered into a Convertible Debt and Warrant Purchase
Agreement, or the August 2003 Debt Agreement, with certain private
accredited investors, or the 2003 Lenders. Under the August 2003 Debt
Agreement we borrowed $6.0 million, with interest accruing at 8% per year
and due and payable quarterly, with the first interest payment due on
October 1, 2003. The principal amount matures on August 28, 2006 and the
debentures are convertible into shares of our Common Stock at a rate of
one share per dollar of debt, subject to adjustment. At our option and
subject to certain restrictions, we may make interest payments in cash or
in shares of Common Stock. Upon the occurrence of certain events of
default, the holders of the convertible debentures may require that they
be repaid prior to maturity. In connection with the August 2003 Debt
Agreement, we issued warrants to each 2003 Lender to purchase a total of
4,750,000 shares of our Common Stock, each with an expiration date of
August 28, 2008 and an exercise price of $1.00 per share. As of March 14,
2005, $2.6 million of the notes have been converted into 2,600,000 shares
of Common Stock and warrants covering 1,425,000 shares of Common Stock
have been exercised. |
The cost
of an additional clinical trial and any other requirements we must complete to
satisfy the conditions of the Approvable Letter from the FDA, amending the NDA
and obtaining related requisite regulatory approval, and commencing
pre-commercialization activities prior to receiving regulatory approval, will
require substantial expenditures. If requisite regulatory approval is obtained,
then substantial additional financing will be required for the manufacture,
marketing and distribution of our product in order to achieve a level of
revenues adequate to support our cost structure. Besides
the possible use of
PHOTREX alone or in combination with other therapies, we have identified
potential next-generation drug compounds for use in various eye diseases. These
drugs are in the early stage of development and will not likely begin further
development until we obtain additional funding and/or a corporate partner or
other collaboration in ophthalmology.
Based on
our ability to successfully obtain additional funding, our ability to obtain new
collaborative partners, our ability to license and pursue development and
commercialization of PHOTREX for AMD or other disease indications, our ability
to reduce operating costs as needed, our ability to regain our listing status on
Nasdaq and
various other economic and development factors, such as the cost of the
programs, reimbursement and the available alternative therapies, we may or may
not be able to or elect to further develop PhotoPoint PDT procedures in
ophthalmology, cardiovascular disease, dermatology, oncology or in any other
indications. If we are unable to secure additional funding, or if our lender
terminates our existing funding, we may be unable to continue as a going
concern.
Background
Photodynamic
therapy, or PDT, is a treatment modality based on light-activated, or
photoselective drugs to locally treat diseased cells and abnormal blood vessels.
The drug and light procedures involve three components: photoselective drugs,
light producing devices and light delivery devices.
We are
developing a family of medical procedures trademarked PhotoPoint® PDT that are
based on proprietary, synthetic photoselective drugs. These drugs have the
ability to transform light energy into chemical energy in a manner similar to
that of chlorophyll in green plants. When administered to the body, either
systemically by intravenous injection or locally at the treatment site, our
PhotoPoint drugs are designed to preferentially accumulate in rapidly
reproducing, or hyperproliferating, cells and blood vessels based on the
metabolic characteristics of these tissues. Since a number of disease conditions
involve tissue and/or cellular hyperproliferation, we believe that PhotoPoint
PDT has a number of potential applications. Certain examples are abnormal blood
vessels at the back of the eye associated with macular degeneration; plaque
psoriasis that causes excessive proliferation of the epidermis, or outer layer
of the skin; cardiovascular diseases caused by unstable (vulnerable) or
obstructive plaque within coronary arteries; and the rapid growth of cells and
new blood vessels in cancer tumors.
Our
photoselective drugs are inactive until exposed to a specific wavelength and
dose of visible light. The wavelength corresponds to the color of the light, and
the light dose represents the number of photons, or light energy, delivered to
the target tissue over time. We have designed our drugs to respond to various
light wavelengths depending on the desired depth of light penetration into the
target tissue. When light is delivered to the treatment site and the drug and
light interact, a photochemical reaction occurs in which molecular
oxygen is consumed to produce reactive oxygen intermediates that can
lead to cell death or vascular shutdown. We can control the treatment response
by varying the respective drug and light doses and the relative timing of their
administration. The result is a localized, light-selective response that can
potentially destroy diseased cells and abnormal blood vessels with minimal
damage to surrounding normal tissues and vessels.
Low
power, non-thermal visible light is used to activate PhotoPoint drugs. The light
is generated by diode lasers or, for certain applications, by non-coherent light
sources. The light is typically delivered from the light source to the patient
via fiber optic delivery devices that produce uniform patterns of light for
different disease applications. The fiber optic devices may be designed to focus
light on body surfaces such as skin or to channel into the body via catheters
for internal applications. Additional methods of light delivery include the slit
lamp adapter used with our ophthalmic laser device co-developed with
Iridex.
Industry
As early
as 1900, scientists observed that certain compounds localized in tissues
elicited a response to light, a response that came to be known as photodynamic
therapy, or PDT. Since the mid-1970s, various treatment applications
of PDT
have been investigated and approved for use in humans. PDT continues to be
studied by a variety of companies, physicians and researchers around the world
to treat a broad range of disease indications. Early industry development was
hindered by issues such as drug manufacturing and purity, the use of costly and
inefficient lasers and the lack
of integrated drug and device development. Since our founding, we have
endeavored to address these issues in our PhotoPoint development programs. In
the last few years, the industry has significantly advanced and achieved
regulatory approvals for several PDT drugs in the United States and abroad.
Business
Strategy
Our
current objective is to develop our PhotoPoint technology for disease
indications with large potential market opportunities and/or unmet medical needs
with ophthalmology and cardiovascular disease as our current primary areas of
focus. Our strategy is to develop PhotoPoint PDT as a primary, stand-alone
therapy and, where appropriate, as a combination therapy with other treatments
such as surgery or drug therapy to achieve efficacious clinical results.
We
believe that commercial success will depend upon safety and efficacy outcomes,
regulatory approvals, competition, third-party reimbursements and other factors
such as the manufacturing, marketing, sales and distribution of our products and
their acceptance by the medical profession. At this time, the scope of our
business is research and development with limited manufacturing capabilities.
For clinical and regulatory affairs, large-scale manufacturing, marketing, sales
and distribution activities, we may elect to use outside contractors and/or
develop these capabilities internally, or seek strategic collaborations with
pharmaceutical and medical device partners in certain therapeutic
areas.
Technology
and Products
Our
drugs, light producing and light delivery devices have been developed in-house
and with outside collaborators and have been used in various clinical and
preclinical investigations.
Drug
Technology. We own
and hold exclusive license rights under certain United States and foreign
patents to several classes of synthetic, photoselective compounds, subject to
certain governmental rights, as described under the heading Patents and
Proprietary Technology. From these broad classes we have synthesized several
hundred unique photoselective compounds, which have been characterized and
screened in biological testing systems. The
development status of our key drug candidates is as follows:
|
PhotoPoint®
Drug |
Indication |
Development
Status |
|
PHOTREX™
(rostaporfin; formerly known as SnET2) |
Wet
age-related macular degeneration, or AMD |
FDA
Approvable Letter, September 2004; confirmatory
Phase
III clinical trial to be initiated in 2005
|
|
MV0633 |
Cardiovascular
disease: atherosclerosis,
vulnerable
plaque, restenosis |
Advanced
preclinical, IND expected to be submitted in 2005 |
|
MV9411 |
Plaque
psoriasis |
Phase
II clinical trial completed, under data analysis and
evaluation |
|
MV2101 |
Vascular
access graft disease in
hemodialysis
patients
|
Advanced
preclinical |
|
MV6401 |
Solid
tumors (treatment of cells and neovasculature,
or
new blood vessels) |
Preclinical |
Our
ongoing commitment to the various programs depends upon a number of factors,
including the results of investigational studies, regulatory approvals,
financial resources, strategic business considerations, the competitive
marketing environment and potential return on investment. Currently, our primary
areas of focus are ophthalmology and cardiovascular disease.
Light
Producing Devices. Our
PhotoPoint procedures are designed to use reliable and affordable light
producing devices. Our light technologies include software-controlled diode
lasers, light emitting diode, or LED, arrays, and non-coherent light sources.
Either internally or with outside collaborators, we have developed a variety of
devices producing various wavelengths of light for use in our investigational
studies. We are collaborating with Iridex Corporation, or Iridex, on the
development of light producing devices for PhotoPoint PDT in ophthalmology.
Iridex co-developed with us and manufactured the diode laser to be used in our
AMD confirmatory Phase III clinical trial.
Light
Delivery Devices. We have
developed various configurations of fiber optic devices to deliver uniform light
to target tissues, for example, our proprietary guidewire-compatible
endovascular light catheter that is being tested in preclinical studies for the
treatment of cardiovascular disease.
Targeted
Diseases and Clinical Trials
We
believe that our PhotoPoint PDT technology has potential utility in a number of
disease indications. We have established certain development programs based upon
technical, regulatory, clinical, manufacturing and market considerations.
Currently, our primary areas of focus are ophthalmology and cardiovascular
disease. Our ongoing commitment to the various programs depends upon such
factors as adequate funding, corporate partner support, the results of
investigational studies, governmental regulatory communications, competitive
factors, potential return on investment, various other feasibility or economic
considerations as well as our overall business strategy.
Ophthalmology
We
believe that PhotoPoint PDT has the potential to treat a variety of ophthalmic
disorders, including conditions associated with neovascularization such as wet
AMD and diabetic retinopathy. Ocular neovascularization is a condition in which
new blood vessels grow abnormally on or beneath the surface of the retina or
other parts of the eye. We have investigated PhotoPoint PDT as a potential
treatment to selectively eliminate such abnormal blood vessels, and we have
completed Phase I/II and two Phase III human clinical trials of PHOTREX
(rostaporfin, formerly known as SnET2) as a treatment for wet AMD, with a third
confirmatory Phase III clinical trial to be initiated in 2005.
AMD is
the leading cause of blindness in Americans over age fifty. Patients
with AMD experience distortion or loss of central vision as the disease
progresses. In wet
AMD areas of neovascularization develop beneath the retina, leaking fluid and
blood that can cause retinal lifting, scarring and irreversible loss of central
vision. These lesions are comprised of choroidal neovascular membranes, or CNV,
known as “classic” and “occult” components. It is estimated that approximately
60% of wet AMD lesions have some component of classic CNV, while approximately
40% are occult lesions.
In
December 2001, we completed two Phase III ophthalmology clinical trials for the
treatment of wet AMD lesions with any presence of a classic component.
The
primary efficacy endpoint of the clinical studies was the percent of patients
with stabilized vision, specifically, the proportion of PHOTREX treated patients
losing less than 15 letters from baseline on a standard ETDRS eye chart compared
to placebo controls. In
January 2002, our ophthalmology corporate partner, Pharmacia,
reviewed the top-line Phase III AMD clinical data and determined that PHOTREX
did not to meet the primary efficacy endpoint in the study population, as
defined by the clinical trial protocol. Pharmacia notified us that it would not
pursue an NDA submission for PHOTREX. In March 2002, we regained the license
rights to PHOTREX from Pharmacia as well as the related data and assets from the
Phase III AMD clinical trials. In addition, we terminated our license
collaboration with Pharmacia, and have the opportunity to seek a new
collaborative partner for PhotoPoint PDT in ophthalmology in the
future.
During
2002, we completed a comprehensive analysis of the Phase III AMD clinical data
and held certain discussions with regulatory consultants and the ophthalmic
division of the FDA. Based on our review of the data from two independent Phase
III clinical studies, we believe that PHOTREX reduced the risk of vision loss in
certain PHOTREX-treated patients versus placebo patients. Additionally,
secondary efficacy analyses relative to placebo suggested that PHOTREX prevented
severe vision loss and impacted the physiologic characteristics of treated
lesions by reducing leakage and fluid accumulation. Based on retrospective
analyses, the PHOTREX data suggested that when PHOTREX therapy was given as
required in the protocol, a positive treatment response versus placebo was
demonstrated across all compositions of wet AMD lesions, regardless of the
percentage of classic or occult components. A small number of occult patients
were enrolled in the Phase III AMD clinical trials and they demonstrated a
beneficial trend of treatment, but those data require additional confirmatory
studies.
In regard
to safety, we believe the PHOTREX treatments were well tolerated in the study
population, with a low overall incidence of treatment-related adverse
events. The most
common side effect was skin photosensitivity, or sun sensitivity, which was
reported in less than 5% of PHOTREX administrations, and was predominantly mild
in nature, transient in duration and required no special treatment. Based on
discussions with our clinical investigators, we believe the photosensitivity to
be a manageable side effect that typically produces mild erythema, or redness,
of the skin. In addition, there were few reports of either back pain on infusion
or acute post-treatment vision loss (neither had less than 0.2% in both the
treated and placebo patients), which have been previously reported with
competitive PDT technology.
Based on
our analysis of the Phase III AMD clinical data, we submitted the NDA on March
31, 2004 for PHOTREX as a treatment for wet AMD, specifically wet AMD lesions
with any classic component, with or without an occult component. We submitted
the NDA seeking marketing approval based on clinical results in the “per
protocol” study population. The per protocol population consists of those
patients who received the minimum exposure to the PHOTREX treatment regimen
pre-specified in the clinical study protocol, comprising a sub-population of
patients in the total study population.
The NDA
was submitted on March 31, 2004 and was accepted by the FDA for filing on June
1, 2004 and given a priority review designation. On September 30, 2004, we
announced that the FDA had issued an Approvable Letter for our NDA submission
for PHOTREX. The Approvable Letter outlined the conditions for final marketing
approval, which included a request for an additional confirmatory Phase III
clinical trial, as well as certain other requirements. In March 2005, we
announced that we would conduct a confirmatory Phase III clinical trial in the
United Kingdom and Central and Eastern Europe based on a Special Protocol
Assessment by the FDA. We have selected Kendle International Inc., an
international clinical research organization, to manage the clinical trial,
which we plan to initiate in 2005. The clinical trial is designed to evaluate
AMD patients with both classic and occult choroidal neovascularization (CNV
lesions). Currently, we expect the study to be conducted at up to 50
investigational sites. We plan to conduct a primary efficacy endpoint analysis
at twelve months (one year after initial treatment), and expect a total of
approximately 600 patients to be analyzed.
The
competitive PDT drug Visudyne (QLT, Inc. and Novartis) has been approved as a
treatment for AMD, specifically predominantly classic lesions, since April 2002
and is currently in widespread use in the U.S. and internationally. In January
2005, Macugen® was introduced to the market by Eyetech Pharmaceuticals, Inc. and
will be co-promoted with Pfizer, Inc. Macugen is the first anti-angiogenic drug
approved for the treatment of wet AMD involving a series of injections into the
eye. The treatment is considered a competitive and potentially complementary
technology to PDT. The FDA approved Macugen for both classic and occult lesions,
which we believe will increase the overall number of patients seeking treatment
for wet AMD.
We
believe that the technology of PDT will continue to be utilized as a component
of first-line therapy for wet AMD, either stand-alone or in combination with
steroids and newer anti-angiogenic drugs. In addition to conducting the
confirmatory Phase III clinical trial to be conducted in Europe, we currently
plan to initiate combination studies of PHOTREX with other drug agent(s).
We have
also conducted preclinical studies for the treatment of other ophthalmic
diseases such as corneal neovascularization, glaucoma and diabetic retinopathy.
Besides the planned use of PHOTREX alone or in combination with other therapies,
we have identified certain next-generation drug compounds for potential use in
various eye diseases. These programs are in early stages of development and will
not likely advance until we obtain additional funding and/or a collaborative
partner in ophthalmology.
Cardiovascular
Disease
We are
investigating the use of PhotoPoint
PDT for the
treatment of cardiovascular diseases, in
particular for the treatment of atherosclerosis and atherosclerotic vulnerable
plaque, and the prevention and treatment of restenosis. Atherosclerosis is a
common condition involving complex lipid, or fat, derived plaques within
arteries that can lead to obstructive artery disease. Clinicians have become
aware that certain inflamed plaques within artery walls are highly unstable and
vulnerable to rupture. Vulnerable plaque has been estimated to cause up to 80%
of fatal heart attacks. Preclinical
studies with PhotoPoint
PDT indicate
that certain photoselective drugs may be preferentially retained in
hyperproliferating cells in artery walls and lipid-rich components of arterial
plaques. In
preclinical studies we believe we have demonstrated that PhotoPoint PDT has the
potential to remove problematic inflammatory cells and induce positive
mechanisms of healing and repair that are consistent with true plaque
stabilization.
Restenosis
is the re-narrowing of an artery that commonly occurs after balloon angioplasty
for obstructive artery disease. We believe data from
preclinical studies suggest that PhotoPoint PDT may aid in the prevention and
treatment of restenosis by inhibiting the aggressive overgrowth of cells that
cause re-narrowing, or restenosis, of arteries.
We are in
the process of conducting preclinical pharmacology and toxicology studies using
our lead cardiovascular drug candidate, MV0633. Pending the outcome of our
preclinical studies, financial considerations, and other factors, we are
planning to prepare an Investigational New Drug application, or IND, in
cardiovascular disease for MV0633 in 2005. The timing of the IND is dependent on
numerous factors including preclinical results, pharmacology and toxicology
results, available funding and other resources. In July 2004, we entered
into a Collaboration Agreement with Guidant Corporation, to develop MV0633 for
cardiovascular diseases. In connection with the Collaboration Agreement, we are
required to submit the IND by December 31, 2005.
As a
result of our preclinical studies in cardiovascular disease, we are evaluating
the use of PhotoPoint PDT for the prevention and/or treatment of vascular access
graft disease. Synthetic arteriovenous, or AV, grafts are placed in patients
with End Stage Renal, or Kidney, Disease to provide access for hemodialysis.
While these grafts are critical to the health of the patient, their functional
lifetime is limited due to stenosis, or narrowing, caused by cell overgrowth in
the vein. We have held discussions with the FDA about initiating a Phase II
clinical trial. We are currently pursuing potential strategic partners in this
field to help fund these clinical studies. Pending the results of our
preclinical studies as well as financial considerations, corporate
collaborations and other factors, we may decide to file an IND for the
commencement of clinical trials in this field.
Dermatology
We
believe that PhotoPoint PDT may be potentially useful to treat a number of
dermatological, or skin, disorders. One of these is plaque psoriasis, a chronic
skin condition involving abnormal proliferation of the epidermis, or outer layer
of the skin, that causes inflamed and scaly skin plaques. We are investigating
PhotoPoint drug MV9411 in a topical gel formulation for this disease indication.
In July
2001, we successfully completed a Phase I dermatology clinical trial of MV9411,
and in January 2002, commenced a Phase II dose-escalation clinical trial for the
treatment of psoriatic plaques. We are
now in the process of closing the Phase II clinical trial. Analysis of the
clinical results and other factors such as the availability of funding and other
resources will determine whether we continue this program.
Oncology
In our
oncology research program, we have
ongoing preclinical studies in solid tumors to target tumor cells and tumor
neovasculature. Cancer is
a large group of diseases characterized by uncontrolled growth and spread of
tumor cells with the associated growth of new blood vessels, or
neovascularization. The focus of our preclinical research is to evaluate the
utility of PhotoPoint PDT as a stand-alone treatment or as a combination therapy
with experimental or conventional therapies. Currently, our research efforts
focus on the use of PhotoPoint PDT in treating cancers such as those of the
brain, breast, lung and prostate. We have an existing oncology IND for SnET2,
which is currently inactive, and under which we may choose to submit protocols
for clinical trials in the future.
Definitive
Collaborative Agreements
Guidant
Corporation
In July
2004 we entered into a Collaboration Agreement with Advanced Cardiovascular
Systems, Inc., a wholly owned subsidiary of Guidant Corporation, or Guidant.
Guidant will collaborate
with us on the development, pre-clinical and clinical investigations of our
MV0633 compound and related laser devices for use in the treatment of
restenosis, atherosclerosis and atherosclerotic plaque cardiovascular diseases
through the end of Phase I clinical studies. Guidant has an option to enter into
an additional development and marketing agreement with us for additional
clinical studies and post-FDA NDA approval marketing activities. Upon the
signing of the agreements, we sold 1,112,966 shares of Series A Convertible
Preferred Stock, resulting in proceeds to us of $3.0 million. Additionally, we
can receive up to $4.0 million in additional convertible preferred stock
investments upon the completion of certain milestones related to our
cardiovascular program. The next milestone is expected in December 2005. The
$3.0 million of Preferred Stock sold is convertible into our Common Stock at
$2.70 per share and includes registration rights for the underlying Common
Stock. We are required to provide additional funding of at least $5.0 million
over the period of the collaboration and the funds invested by Guidant must be
spent on specified cardiovascular programs. We also granted Guidant registration
rights with respect to the shares of Common Stock into which the Series A
Preferred Stock is convertible. The agreements also contain various covenant and
termination provisions as defined by the agreements.
Kendle
International, Inc.
We have
selected Kendle International, Inc., or Kendle, a leading international contract
research organization, or CRO, with locations throughout Europe, to conduct our
confirmatory Phase III clinical trial for PHOTREX in AMD. Kendle will be
responsible for the set-up of the clinical sites, patient and site monitoring,
data collection and compilation, site close-out and the final clinical study
report for the upcoming confirmatory Phase III clinical trial. The randomized,
placebo-controlled trial under a Special Protocol Assessment by the FDA is
designed to include a broad range of wet AMD patients, including patients with
both classic and occult choroidal neovascularization. We are in the process of
finalizing the agreement with Kendle. Upon the execution of the agreement, we
will pay Kendle an upfront payment and will be required to make monthly payments
over the term of the clinical trial, with various milestone payment amounts due
on the first and last patient enrolled, at the one year analysis and upon
receipt of the final clinical study report. We are also responsible for payment
of out-of-pocket costs incurred by Kendle, as well as payments made by them to
the clinical sites for patient treatments and ancillary costs incurred. When
finalized, we expect the agreement to include a provision allowing it to be
terminated due to clinical efficacy or safety issues at any time with any
expenses and services incurred by Kendle, as of the date of termination, to be
paid by Miravant.
Giliead
Sciences, Inc.
In
December 2004, we entered into a development and license agreement with
Gilead Sciences Inc., or Gilead, to develop the formulation for our drug
MV0633, which is currently being used in our cardiovascular indications. In
connection with this development agreement, we are required to pay an
upfront license fee of $200,000 and ongoing costs for development and
formulation. We will also be required to pay milestones upon the occurrence of
the first patient treated in a Phase III clinical trial using the formulation
and upon the first regulatory approval in the United States or other significant
market. In addition, we will pay royalties based on the drug revenues as
defined by the agreement.
Pharmacia
Corporation
