Investors and Media
ZIOPHARM Reports Fourth Quarter and Full Year 2012 Financial Results
March 18, 2013

Company to Announce Topline Results From Phase 3 Trial of Palifosfamide in Soft Tissue Sarcoma (PICASSO 3) Last Week of March

NEW YORK, March 18, 2013 (GLOBE NEWSWIRE) -- ZIOPHARM Oncology, Inc. (Nasdaq:ZIOP) announced today its financial results for the fourth quarter and full year ending December 31, 2012, and the filing of its Annual Report on Form 10-K with the Securities and Exchange Commission.

Fourth Quarter Results

The Company reported a GAAP net loss of $30.2 million for the fourth quarter of 2012, or $(0.37) per share, compared to a GAAP net loss of $13.2 million, or $(0.19) per share, in the fourth quarter of 2011. Excluding non-cash income of $8.6 million attributable to the change in liability-classified warrants, Non-GAAP1 net loss was $38.8 million, or $(0.48) per share, for the fourth quarter ended December 31, 2012. In comparison, Non-GAAP1 net loss for the fourth quarter of 2011 was $16.4 million, or $(0.24) per share, which excludes non-cash income of $3.2 million attributable to the change in liability-classified warrants.

Operating expenses for the fourth quarter of 2012 were $39.0 million, compared to $16.6 million for the fourth quarter of 2011. The $22.4 million increase is primarily attributable to the $18.7 million fourth quarter 2012 non-cash expense associated with the issuance of approximately 3.6 million shares of common stock to Intrexon Corporation upon the achievement of the contractual milestone associated with dosing of the first patient in the Ad-RTS IL-12 Phase 2 trial. Other costs related to the expansion of our synthetic biology therapeutics program contributed to the remainder of the increase during the period.

Full Year Results

The Company reported a GAAP net loss of $96.1 million for the year ended December 31, 2012, or $(1.22) per share, compared to a GAAP net loss of $63.8 million, or $(0.97) per share, for the year ended December 31, 2011.  Excluding non-cash income of $6.1 million attributable to the change in liability-classified warrants, Non-GAAP1 net loss was $102.2 million, or $(1.30) per share, for the year ended December 31, 2012.  In comparison, Non-GAAP1 net loss for 2011 was $71.4 million, or $(1.08) per share, which excludes non-cash income of $7.6 million attributable to the change in liability-classified warrants.

Operating expenses for the year ended December 31, 2012 were $103.0 million, compared to $72.1 million for the year ended December 31, 2011.  The $30.9 million increase is attributable to start-up and ongoing enrollment activities for the pivotal Phase 3 trial (MATISSE) of palifosfamide in metastatic small cell lung cancer (SCLC), which was initiated in the second quarter, as well as expanded development, manufacturing, nonclinical and clinical activities in support of the Company's palifosfamide and synthetic biology therapeutics programs.

The Company ended the year with $73.3 million in cash and cash equivalents, which is currently expected to support operations into the second half of 2013.

Progress and Milestones within Lead Programs

Palifosfamide (Zymafos® or ZIO-201):

ZIOPHARM's palifosfamide program has made significant progress, including in its two pivotal Phase 3 studies and the initiation of a Phase 2 study. 

The Company announced in February 2013 that the Phase 3 trial of palifosfamide in first-line metastatic soft tissue sarcoma (PICASSO 3) reached its target number of progression-free survival (PFS) events.  PICASSO 3 is an international, randomized, double-blind, placebo-controlled trial with a primary endpoint of PFS and a secondary endpoint of overall survival (OS).  The trial is powered for both PFS and OS, with PFS determined by independent, blinded radiologic review. The Company expects to announce results from this trial, including topline PFS data and an interim OS futility analysis, during the last week of March 2013.  The trial is expected to remain blinded for OS. The study is also being submitted as a late-breaking abstract for the annual meeting of the American Society of Clinical Oncology (ASCO). 

In June 2012, ZIOPHARM announced the initiation of an international, multi-center, open-label, adaptive, randomized, pivotal Phase 3 trial (MATISSE) of palifosfamide in combination with carboplatin and etoposide (PaCE) chemotherapy compared to carboplatin and etoposide alone in up to 548 chemotherapy naïve patients with metastatic small cell lung cancer. After 20 patients received at least two chemotherapy cycles, the study's Independent Data Monitoring Committee conducted an analysis of safety data and recommended that the trial proceed as planned. Enrollment is ongoing and remains ahead of projections.

ZIOPHARM also recently announced the initiation of a multicenter, single arm Phase 2 investigator-sponsored study of palifosfamide in patients with recurrent metastatic germ cell (testicular and ovarian) tumors who have relapsed on initial platinum-based therapy and high dose chemotherapy, or patients who are not eligible for high dose chemotherapy.  The study is being led by Lawrence Einhorn, M.D., Distinguished Professor of the Department of Medicine, Division of Hematology/Oncology at the Indiana University School of Medicine, who is also the lead investigator for the MATISSE trial.

Synthetic Biology:

ZIOPHARM continues to make significant strides with its synthetic biology platform. The Company recently initiated a randomized, open label study of Ad-RTS IL-12, ZIOPHARM's lead, DNA-based therapeutic for the expression of interleukin-12 (IL-12), a protein important for an immune response to cancer, in combination with palifosfamide in patients with non-resectable recurrent or metastatic breast cancer. This study is based on recent research positively correlating survival with an immune response in breast cancers targeted with non-immune treatments, together with preclinical data demonstrating powerful synergy.

In October 2012, ZIOPHARM initiated a Phase 2 multi-center, single-arm, open-label expansion study that will enroll up to 15 patients with unresectable Stage III or IV melanoma. This study will further evaluate the safety and efficacy of intratumoral injections of Ad-RTS IL-12.  Data from this study are expected in the second half of 2013. The study follows completion of a successful, dose-escalation Phase 1 study in which clinical activity was observed in 5 of 7 (71%) patients dosed at the two highest dose levels.   

In November 2012, the Company announced results from a preclinical study demonstrating the long-term persistence and anti-tumor effects of a new synthetic biology approach (DNA/cell plasmid) to controlled protein production in vivo.  This embedded controlled bioreactor study was presented at the EORTC-NCI-AACR International Conference on Molecular Targets and Cancer Therapeutics.  The Company also presented preclinical data at the American Association for Cancer Research (AACR) Annual Meeting in March/April 2012, demonstrating the significant anti-tumor activity of Interleukin-12 (IL-12) and interferon alpha (IFNα), two proteins involved in immune response to cancers, expressed in vivo utilizing a regulated gene system.  The presentation was recognized as among the best science by the AACR Program Committee, a designation awarded to the top 2.5 percent of abstracts.

About ZIOPHARM Oncology, Inc.:

ZIOPHARM Oncology is a biopharmaceutical company focused on the development and commercialization of new cancer therapies.  The Company's clinical programs include:

Palifosfamide (ZIO-201) is a potent bi-functional DNA alkylating agent that has activity in multiple tumors by evading typical resistance pathways. Palifosfamide is in the same class as bendamustine, cyclophosphamide, and ifosfamide.  Intravenous palifosfamide is currently being studied in a randomized, double-blinded, placebo-controlled Phase 3 trial (PICASSO 3) for the treatment of first-line metastatic soft tissue sarcoma and is also in a pivotal Phase 3 trial (MATISSE) for first-line metastatic small cell lung cancer.  Additionally, the Company is developing an oral capsule form of palifosfamide.

Ad-RTS IL-12 is currently being tested in two Phase 2 studies, the first for the treatment of advanced melanoma, and the second in combination with palifosfamide for the treatment of non-resectable recurrent or metastatic breast cancer. Ad-RTS IL-12 uses synthetic biology to enable controlled, local delivery of therapeutic interleukin-12 (IL-12), a protein important for an immune response to cancer.  ZIOPHARM's DNA synthetic biology platform is being developed in partnership with Intrexon Corporation and employs an inducible gene-delivery system that enables controlled, local delivery of genes that produce therapeutic proteins to treat cancer.  This is achieved by placing IL-12 under the control of Intrexon's proprietary biological "switch" (the RheoSwitch Therapeutic System®, RTS®) to turn on/off the therapeutic protein expression at the tumor site.

Indibulin (ZIO-301) is a novel, tubulin binding agent that is expected to have several potential benefits, including oral dosing, application in multi-drug resistant tumors, no neuropathy and a tolerable toxicity profile.  It is currently being studied in a Phase 1/2 trial in metastatic breast cancer.

Darinaparsin (ZIO-101) is a novel mitochondrial-and hedgehog-targeted agent (organic arsenic) currently in ongoing studies with Solasia Pharma K.K.

ZIOPHARM's operations are located in Boston, MA, and New York City.  Further information about ZIOPHARM may be found at www.ziopharm.com.

Forward-Looking Safe Harbor Statement:

This press release contains certain forward-looking information about ZIOPHARM Oncology that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. Words such as "expect(s)," "feel(s)," "believe(s)," "will," "may," "anticipate(s)" and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding our ability to successfully develop and commercialize our therapeutic products; our ability to expand our long-term business opportunities; financial projections and estimates and their underlying assumptions; and future performance.  All of such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to: whether Palifosfamide, Ad-RTS IL-12, Darinaparsin, Indibulin, or any of our other therapeutic products will advance further in the clinical trials process and whether and when, if at all, they will receive final approval from the U.S. Food and Drug Administration or equivalent foreign regulatory agencies and for which indications; whether Palifosfamide, Ad-RTS IL-12, Darinaparsin, Indibulin, and our other therapeutic products will be successfully marketed if approved; whether any of our other therapeutic product discovery and development efforts will be successful; our ability to achieve the results contemplated by our collaboration agreements; the strength and enforceability of our intellectual property rights; competition from pharmaceutical and biotechnology companies; the development of and our ability to take advantage of the market for our therapeutic products; our ability to raise additional capital to fund our operations on terms acceptable to us; general economic conditions; and the other risk factors contained in our periodic and interim SEC reports filed from time to time with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof, and we do not undertake any obligation to revise and disseminate forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of or non-occurrence of any events.

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1  Non-GAAP net loss is calculated as GAAP net loss less the expense (or plus the income) associated with the change in fair value of the liability-classified warrants. Non-GAAP net loss per share is calculated by dividing the Non-GAAP net loss by the weighted average common shares outstanding.

ZIOPHARM Oncology, Inc.
Condensed Statements of Operations
(in thousands except share and per share data)
(unaudited)
         
 Three Months Ended
December 31,
Twelve Months Ended
December 31,
 2012 2011 2012 2011
         
Revenue  $ 200  $ 200  $ 800  $ 667
         
Operating expenses:        
Research and development  34,982  12,650  83,446  57,083
General and administrative  4,061  3,967  19,523  14,984
Total operating expenses  39,043  16,617  102,969  72,067
         
Loss from operations  (38,843)  (16,417)  (102,169)  (71,400)
         
Other income (expense), net  52  13  (13)  39
Change in fair value of warrants  8,566  3,160  6,050  7,583
Net loss  $ (30,225)  $ (13,244)  $ (96,132)  $ (63,778)
         
         
Basic and diluted net loss per share  $ (0.37)  $ (0.19)  $ (1.22)  $ (0.97)
         
Weighted average common shares outstanding used to compute basic and diluted net loss per share  81,347,231  68,160,207  78,546,112  66,003,789
 
 
ZIOPHARM Oncology, Inc.
Balance Sheet Data
(in thousands)
(unaudited)
     
 December 31,
2012
December 31,
2011
     
Cash and cash equivalents  73,306  104,713
Working capital  61,412  92,742
Total assets  83,404  108,108
Total stockholders' equity   48,445  71,607
CONTACT: For ZIOPHARM

         Nicole Jones

         ZIOPHARM Oncology, Inc.

         617-778-2266

         njones@ziopharm.com

         

         Media Contacts:

         David Schull or Lena Evans

         Russo Partners, LLC

         858-717-2310

         212-845-4262

         david.schull@russopartnersllc.com

         lena.evans@russopartnersllc.com