updated 3/28/2011 9:16:42 AM ET 2011-03-28T13:16:42

SAN MATEO, Calif., March 28, 2011 (GLOBE NEWSWIRE) -- Talon Therapeutics, Inc. (OTCBB:TLON) today reported financial results for the fourth quarter and full year ended December 31, 2010, and provided a corporate update.

"2010 was a year of significant accomplishments for Talon clinically and financially," stated Steven R. Deitcher, M.D., President and Chief Executive Officer of Talon Therapeutics. "For 2011, we will continue our focus on submitting a New Drug Application for accelerated approval of Marqibo."

2010 Corporate Highlights

  • Completed and presented data for a Phase 2 pivotal study of Marqibo(R) for the treatment of Philadelphia chromosome negative (Ph-) adult acute lymphoblastic leukemia (ALL) in second or greater relapse or that has progressed following two or more prior lines of anti-leukemia therapy, referred to as the rALLy study.
  • Completed the Phase 1 program for Menadione Topical Lotion for the treatment of dose-limiting skin rash associated with taking epidermal growth factor receptor (EGFR) inhibitors for anti-cancer treatment.
  • Completed a financing with Warburg Pincus and Deerfield Management for up to $100 million, of which $40 million was received in June 2010.
  • Strengthened intellectual property coverage with new patents issued for Menadione Topical Lotion and Marqibo.

Three Months Ended December 31, 2010 Unaudited Financial Results

For the three months ended December 31, 2010, the Company reported a net loss of $6.3 million and deemed dividends on preferred stock of $0.9 million, which when combined, resulted in a net loss applicable to common stockholders of $7.2 million, or $0.34 per share. The deemed dividends on preferred stock contributed $0.05 per share to the total net loss applicable to common stockholders for the three months ended December 31, 2010. This compares with a net loss of $5.0 million, or a loss per share of $0.28, for the three months ended December 31, 2009. There were no deemed dividends on preferred stock for the three months ended December 31, 2009.

Total operating expenses for the three months ended December 31, 2010, were $6.5 million, compared with $5.4 million for the three months ended December 31, 2009. Research and development expenses were $5.2 million for the three months ended December 31, 2010, compared with $4.0 million for the three months ended December 31, 2009. General and administrative expenses were $1.3 million for the three months ended December 31, 2010, compared with $1.4 million for the three months ended December 31, 2009.

As of December 31, 2010, the Company had cash, cash equivalents and available-for-sale securities of $22.6 million. Cash used in operations was $5.1 million for the three months ended December 31, 2010.

The per share results for all periods have been adjusted to reflect the impact of the Company's 1-for-4 reverse stock split that occurred at the close of business on September 10, 2010.

Twelve Months Ended December 31, 2010 Financial Results

For the twelve months ended December 31, 2010, the Company reported a net loss of $26.0 million and deemed dividends on preferred stock of $32.3 million, which when combined, resulted in a net loss applicable to common stockholders of $58.3 million, or $2.81 per share. The deemed dividends on preferred stock contributed $1.56 per share to the total net loss applicable to common stockholders for the twelve months ended December 31, 2010. This compares with a net loss of $24.1 million, or a loss per share of $2.27, for the twelve months ended December 31, 2009. There were no deemed dividends on preferred stock for the twelve months ended December 31, 2009.

Total operating expenses for the twelve months ended December 31, 2010, were $25.8 million, compared with $19.6 million for the twelve months ended December 31, 2009. Research and development expenses were $20.2 million for the twelve months ended December 31, 2010, compared with $14.7 million for the twelve months ended December 31, 2009. General and administrative expenses were $5.6 million for the twelve months ended December 31, 2010, compared with $4.9 million for the twelve months ended December 31, 2009.

Cash used in operations was $25.7 million for the twelve months ended December 31, 2010.

The per share results for all periods have been adjusted to reflect the impact of the Company's 1-for-4 reverse stock split that occurred at the close of business on September 10, 2010.

About Marqibo (vincristine sulfate liposomes injection)

Marqibo is a novel, targeted Optisome™ encapsulated formulation product candidate of the FDA-approved anticancer drug vincristine. Talon is primarily developing Marqibo for the treatment of Ph- adult ALL. Vincristine, a microtubule inhibitor, is FDA-approved for ALL and is widely used as a single agent and in combination regimens for treatment for hematologic malignancies such as lymphomas and leukemias. Talon's encapsulation formulation is designed to provide prolonged circulation of the drug in the blood and accumulation at the tumor site. These characteristics are intended to increase the dose of vincristine delivered in a safe and effective manner. 

Based on the data from the rALLy study, in the first half of 2011 Talon plans to submit to the FDA a New Drug Application seeking accelerated approval of Marqibo in Ph- adult ALL, in second or greater relapse or that has progressed following two or more prior lines of anti-leukemia therapy. 

Talon has received orphan drug and fast track designations for Marqibo for the treatment of adult ALL from the U.S. Food and Drug Administration. Marqibo has also received orphan drug designation in adult ALL from the European Medicines Evaluation Agency.

About Talon Therapeutics

Talon Therapeutics, Inc. is a biopharmaceutical company dedicated to seizing upon medical opportunities, efficiently and expertly leading product candidates through clinical development, and transferring value to patients, patient care providers, shareholders, corporate partners, and employees.

In addition to Marqibo and Menadione Topical Lotion, the Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity.

Additional information on Talon Therapeutics can be found at www.talontx.com.

The Talon Therapeutics, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3290

Forward-Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipates," "expects," "plans," "believes," "intends," and similar words or phrases. These forward-looking statements include without limitation, statements regarding the timing of planned regulatory filings relating to Marqibo, Talon's ability to obtain accelerated approval of Marqibo for the treatment of Ph- adult ALL, and the potential of Marqibo to replace existing therapies. Such statements involve risks and uncertainties that could cause Talon's actual results to differ materially from the anticipated results and expectations expressed in these forward-looking statements. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from these statements. Among other things, there can be no assurances that any of Talon's clinical and regulatory development efforts relating to Marqibo will be successful; that even if an NDA for Marqibo is accepted by the FDA, that it will be approved; that the data of the clinical trials of Marqibo will be sufficient to support approval by the FDA of an NDA for Marqibo; that the results of the clinical trials of Marqibo will support Talon's claims or beliefs concerning Marqibo's safety and effectiveness; and that Talon will be able to secure the additional capital necessary to fund its product development programs, including Marqibo, to completion, Talon's reliance on third-party researchers to develop its product candidates, and its lack of experience in developing and commercializing pharmaceutical products. Additional risks are described in the company's Annual Report on Form 10-K for the year ended December 31, 2010. Talon assumes no obligation to update these statements, except as required by law. 

TALON THERAPEUTICS, INC.
     
BALANCE SHEETS
     
  December 31, 2010 December 31, 2009
     
ASSETS    
Current assets:    
Cash and cash equivalents $ 4,573,254 $ 9,570,453
Available-for-sale, equity securities 74,000 68,000
Available-for-sale, debt securities 17,993,745
Prepaid expenses and other current assets 253,901 114,067
Total current assets 22,894,900 9,752,520
     
Property and equipment, net 97,231 252,455
Restricted cash 125,000 125,000
Debt issuance costs 904,909 1,193,594
Total assets $ 24,022,040 $ 11,323,569
     
LIABILITIES AND STOCKHOLDERS' DEFICIT    
Current liabilities:    
Accounts payable and accrued liabilities $ 6,051,982 $ 4,027,075
Other short-term liabilities 1,787 43,586
Total current liabilities  

6,053,769
 

4,070,661
Notes payable, net of discount 23,340,144 22,597,050
Other long-term liabilities 4,753 6,540
Investors' right to purchase future shares of Series A-1 and A-2 preferred stock 5,131,000
Warrant liabilities, non-current 712,965 2,145,511
Total long term liabilities 29,188,862 24,749,101
Total liabilities 35,242,631 28,819,762
Commitments and contingencies:    
Redeemable convertible preferred stock; $100 par value:    
10 million shares authorized, 0.4 million and 0 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively; aggregate liquidation value of $42.4 million and $0 at December 31, 2010 and December 31, 2009, respectively 30,643,219
     
Stockholders' deficit:    
Common stock; $0.001 par value:    
350 million and 200 million shares authorized, 21.2 million and 19.9 million shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively 21,234 19,912
Additional paid-in capital 119,241,956 117,632,111
Accumulated other comprehensive loss (15,841) (24,000)
Accumulated deficit (161,111,159) (135,124,216)
Total stockholders' deficit (41,863,810) (17,496,193)
Total liabilities, redeemable convertible preferred stock and stockholders' deficit $ 24,022,040 $ 11,323,569
 
TALON THERAPEUTICS, INC.
     
STATEMENTS OF OPERATIONS
     
  Three Months Ended  

December 31,
Years Ended  

December 31,
  2010 2009  2010 2009
  (unaudited) (unaudited)    
Operating expenses:        
General and administrative $ 1,270,891 $ 1,402,795 $ 5,570,820 $ 4,907,690
Research and development 5,228,110 3,990,944 20,194,878 14,692,417
Total operating expenses 6,499,001 5,393,729 25,765,698 19,600,097
         
Loss from operations (6,499,001) (5,393,729) (25,765,698) (19,600,097)
         
Other income (expense):        
Interest income 11,227 309 49,247 12,935
Interest expense (869,102) (946,750) (3,750,471) (3,442,893)
Other expense, net (3,512) (4,908)
         
Change in fair value of warrant liabilities (20,690) 1,345,554 (55,509) (1,103,666)
Change in fair value of investors' right to purchase future shares of Series A-1 and A-2 preferred stock 1,108,000 3,539,000
         
Total other income (expense) 229,434 399,113 (221,245) (4,538,532)
         
Net loss $ (6,269,567) $ (4,994,616) $ (25,986,943) $ (24,138,629)
         
Deemed dividends attributable to preferred stock (941,814) (32,308,787)
         
Net loss applicable to common stockholders (7,211,382) (4,994,616) (58,295,730) (24,138,629)
         
Net loss per share, basic and diluted $ (0.34) $ (0.28) $ (2.81) $ (2.27)
Weighted average shares used in computing net loss per share, basic and diluted 21,234,307 18,098,807 20,737,470 10,637,854
CONTACT: Talon Therapeutics, Inc.
         Investor & Media Contacts:
         Investor Relations Team
         (650) 588-6641
         investor.relations@talontx.com

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