##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO .
 Commission file number 033-80623
 OncoGenex Pharmaceuticals, Inc.
  Delaware
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    95-4343413
(I.R.S. Employer Identification Number)
 1522 217 th Place SE, Suite 100, Bothell, Washington 98021
 (425) 686-1500
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
  Class
Common Stock, $0.001 par value
    
    Outstanding at August 1, 2009
6,027,631




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##### 



OncoGenex Pharmaceuticals, Inc.
Index to Form 10-Q
 PageNumberPart I. Financial InformationItem 1. Consolidated Financial Statements (unaudited)
    
    
    3Consolidated Balance Sheets (unaudited) as of June 30, 2009 and December 31, 2008
    
    
    3Consolidated Statements of Operations (unaudited) for the three and six months
ended June 30, 2009 and June 30, 2008, and the period from May 26, 2000
(inception) to June 30, 2009
    
    
    4Consolidated Statements of Cash Flows (unaudited) for the three and six months
ended June 30, 2009 and June 30, 2008, and the period from May 26, 2000
(inception) to June 30, 2009
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    31Part II. Other InformationItem 1A. Risk Factors
    
    
    32Item 4. Submission of Matters to a Vote of Security Holders
    
    
    32Item 6. Exhibits
    
    
    33Items 1, 2, 3, and 5 are not applicable and therefore have been omittedSignatures
    
    
    37Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Consolidated Financial Statements
 OncoGenex Pharmaceuticals, Inc.
 
 Consolidated Balance Sheets
 (Unaudited)
   June 30,
    
    
    December 31,2009
    
    
    2008$
    
    
    $Note 1ASSETSCurrentCash and cash equivalents
    
    
    4,196
    
    
    
    7,618Short-term investments [note 4]
    
    
    1,505
    
    
    
    4,801Amounts receivable
    
    
    30
    
    
    
    153Investment tax credit recoverable
    
    
    377
    
    
    
    1,090Prepaid expenses
    
    
    575
    
    
    
    587Total current assets
    
    
    6,683
    
    
    
    14,249Property and equipment, net
    
    
    98
    
    
    
    44Deferred financing charges
    
    
    93
    
    
    
    Other assets
    
    
    509
    
    
    
    497Total assets
    
    
    7,383
    
    
    
    14,790LIABILITIES AND SHAREHOLDERS EQUITYCurrentAccounts payable and accrued liabilities
    
    
    1,473
    
    
    
    2,252Current portion of long-term obligations [Note 6]
    
    
    717
    
    
    
    632Total current liabilities
    
    
    2,190
    
    
    
    2,884Long-term obligation, less current portion [Note 6]
    
    
    1,255
    
    
    
    1,199Total liabilities
    
    
    3,445
    
    
    
    4,083Commitments and contingencies [Note 8]Common Shares:$0.001 par value 11,019,930 shares authorized and
5,551,760 issued and
outstanding at June 30, 2009 and 5,544,114
issued and outstanding at December 31, 2008
    
    
    6
    
    
    
    6Additional paid-in capital
    
    
    56,275
    
    
    
    56,070Deficit accumulated during the development stage
    
    
    (54,982
    )
    
    
    (48,009
    )Accumulated other comprehensive income
    
    
    2,639
    
    
    
    2,640Total shareholders equity
    
    
    3,938
    
    
    
    10,707Total liabilities and shareholders equity
    
    
    7,383
    
    
    
    14,790Subsequent Events [Note 11]
   3




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OncoGenex Pharmaceuticals, Inc.
 
 Consolidated Statements of Operations
 (Unaudited)
  Period from26-May-00Three Months Ended
    
    
    Six Months Ended
    
    
    (inception) toJune 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009$
    
    
    $
    
    
    $
    
    
    $
    
    
    $EXPENSESResearch and development
    
    
    3,588
    
    
    
    1,108
    
    
    
    5,282
    
    
    
    1,982
    
    
    
    33,890General and administrative
    
    
    1,003
    
    
    
    646
    
    
    
    1,785
    
    
    
    1,219
    
    
    
    15,207Total expenses
    
    
    4,591
    
    
    
    1,754
    
    
    
    7,067
    
    
    
    3,201
    
    
    
    49,097OTHER INCOME (EXPENSE)Interest income
    
    
    3
    
    
    
    10
    
    
    
    36
    
    
    
    91
    
    
    
    1,448Other
    
    
    31
    
    
    
    (223
    )
    
    
    55
    
    
    
    (300
    )
    
    
    (528
    )Total other income (expense)
    
    
    34
    
    
    
    (213
    )
    
    
    91
    
    
    
    (209
    )
    
    
    920Loss for the period before taxes and
extraordinary gain
    
    
    4,557
    
    
    
    1,967
    
    
    
    6,976
    
    
    
    3,410
    
    
    
    48,177Income tax expense (recovery)
    
    
    6
    
    
    
    201
    
    
    
    (4
    )
    
    
    415
    
    
    
    104Loss before extraordinary gain
    
    
    4,563
    
    
    
    2,168
    
    
    
    6,972
    
    
    
    3,825
    
    
    
    48,281Extraordinary gain [note 2]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,428Net loss
    
    
    4,563
    
    
    
    2,168
    
    
    
    6,972
    
    
    
    3,825
    
    
    
    43,853Redeemable convertible preferred share
accretion
    
    
    
    
    
    
    780
    
    
    
    
    
    
    
    1,556
    
    
    
    11,129Loss attributable to common shareholders
    
    
    4,563
    
    
    
    2,948
    
    
    
    6,972
    
    
    
    5,381
    
    
    
    54,982Basic and diluted loss per common share
[note 5[e]]
    
    
    0.82
    
    
    
    24.81
    
    
    
    1.26
    
    
    
    45.29Weighted average number of common
shares [note 5[e]]
    
    
    5,550,547
    
    
    
    118,801
    
    
    
    5,548,369
    
    
    
    118,801
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OncoGenex Pharmaceuticals, Inc.
 
 Consolidated Statements of Cash Flows
 (Unaudited)
  Period from26-May-00Six months ended
    
    
    (inception) toJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009$
    
    
    $
    
    
    $OPERATING ACTIVITIESLoss for the period
    
    
    (6,972
    )
    
    
    (3,825
    )
    
    
    (43,853
    )Add items not involving cashExtraordinary gain
    
    
    
    
    
    
    
    
    
    
    (4,428
    )Depreciation and amortization
    
    
    24
    
    
    
    28
    
    
    
    451Stock-based collaboration expense
    
    
    
    
    
    
    
    
    
    
    1,758Stock-based compensation [Note 5[c]]
    
    
    173
    
    
    
    111
    
    
    
    908Accrued interest on convertible debenture
    
    
    
    
    
    
    360
    
    
    
    505Changes in non-cash working capital itemsAmounts receivable
    
    
    123
    
    
    
    (9
    )
    
    
    250Investment tax credit recoverable
    
    
    713
    
    
    
    549
    
    
    
    (376
    )Prepaid expenses
    
    
    12
    
    
    
    40
    
    
    
    (283
    )Other assets
    
    
    12
    
    
    
    
    
    
    
    (117
    )Accounts payable and accrued liabilities
    
    
    (779
    )
    
    
    387
    
    
    
    (1,977
    )Lease obligation
    
    
    141
    
    
    
    
    
    
    
    (112
    )Taxes payable on preferred shares
    
    
    
    
    
    
    314
    
    
    
    Cash used in operating activities
    
    
    (6,553
    )
    
    
    (2,045
    )
    
    
    47,274FINANCING ACTIVITIESCash paid on fractional shares eliminated on reverse
share split
    
    
    
    
    
    
    
    
    
    
    (3
    )Proceeds from issuance of common stock under stock
option and employee purchase plans
    
    
    32
    
    
    
    
    
    
    
    156Issuance of preferred shares, net of share issue costs
    
    
    
    
    
    
    
    
    
    
    26,719Issuance of common shares, net of share issue costs
    
    
    
    
    
    
    
    
    
    
    146Issuance of convertible debentures net of issue costs
    
    
    
    
    
    
    
    
    
    
    4,442Cash provided by financing activities
    
    
    32
    
    
    
    0
    
    
    
    31,460INVESTING ACTIVITIESPurchase of investments
    
    
    (1,512
    )
    
    
    
    
    
    
    (90,532
    )Proceeds from sale of investments
    
    
    4,780
    
    
    
    495
    
    
    
    106,364Purchase of property and equipment
    
    
    (13
    )
    
    
    (4
    )
    
    
    (404
    )Cash received on reverse takeover of Sonus
    
    
    
    
    
    
    
    
    
    
    5,464Transaction fees on reverse takeover of Sonus
    
    
    
    
    
    
    (479
    )
    
    
    (807
    )Cash provided by investing activities
    
    
    3,255
    
    
    
    12
    
    
    
    20,085Effect of exchange rate changes on cash and cash
equivalents
    
    
    (156
    )
    
    
    (26
    )
    
    
    (75
    )Increase (decrease) in cash and cash equivalents
during the period
    
    
    (3,422
    )
    
    
    (2,059
    )
    
    
    4,196Cash and cash equivalents, beginning of the period
    
    
    7,618
    
    
    
    4,626
    
    
    
    Cash and cash equivalents, end of the period
    
    
    4,196
    
    
    
    2,567
    
    
    
    4,196Supplemental cash flow informationProperty and equipment acquired under lease obligation
    
    
    65
    
    
    
    
    
    
    
    65
   5




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OncoGenex Pharmaceuticals, Inc.
 
 Notes to Consolidated Financial Statements
 (Unaudited)
 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION
      2. REVERSE TAKEOVER
   6




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Sonus common stock
    
    $
    10,385Fair value of options and warrants assumed
    
    
    71Transaction costs of OncoGenex
    
    
    807Total purchase price
    
    $
    11,263
  Cash
    
    $
    5,464Marketable securities
    
    
    14,808Accounts receivable
    
    
    6Interest receivable
    
    
    273Other current assets
    
    
    175Furniture and equipment
    
    
    1,186Other long term assets
    
    
    497Intangible assets
    
    
    280Accounts payable
    
    
    (35
    )Accrued expenses excluding severance payable
    
    
    (652
    )Severance payable to employees as part of restructuring
    
    
    (1,322
    )Severance payable to senior executives
    
    
    (1,440
    )Excess facility loss
    
    
    (2,083
    )Negative goodwill
    
    
    (5,894
    )Total purchase price
    
    $
    11,263
   7




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Negative goodwill
    
    $
    (5,894
    )Furniture and equipment
    
    
    1,186Intangible assets
    
    
    280Excess negative goodwill
    
    $
    (4,428
    )
 Pro Forma Results of Operations
  For the sixmonths endedJune 30,(In thousands, except shares and loss per share)
    
    2008$Revenue
    
    $
    Net loss applicable to common shareholders
    
    $
    (11,044
    )Net loss per share-basic and diluted
    
    $
    (92.96
    )Weighted average shares
    
    
    118,801
 3. ACCOUNTING POLICIES
 Recently Adopted Accounting Policies
     8




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Recent Accounting Pronouncements
 TM TM
  11




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4. FAIR VALUE MEASUREMENTS
   
    
    Level 1 
    
    Quoted prices in active markets for identical securities;
    
    Level 2 
    
    Other significant observable inputs that are
observable through corroboration with market
data (including quoted prices in active
markets for similar securities);
    
    Level 3 
    
    Significant unobservable inputs that reflect
managements best estimate of what market
participants would use in pricing the asset
or liability.
    12




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Financial Instruments
 Government Debt Securities
 U.S. Government Securities.
 U.S. Agency Securities.
 Corporate and Other Debt
 Corporate Bonds and Commercial Paper
  (In thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3Corporate debt securities
    
    $
    
    
    
    $
    
    
    
    $
    Government debt securities
    
    $
    
    
    
    $
    1,006
    
    
    $
    Commercial paper
    
    $
    
    
    
    $
    1,000
    
    
    $
    $
    2,006
  13




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Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Estimated(In thousands)
    
    Cost
    
    
    Gain
    
    
    Loss
    
    
    Fair ValueCorporate debt securities
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Government debt
securities
    
    $
    1,006
    
    
    $
    
    
    
    $
    
    
    
    $
    1,006Commercial paper
    
    $
    1,000
    
    
    $
    
    
    
    $
    
    
    
    $
    1,000$
    2,006
    
    
    
    
    
    
    
    
    
    
    $
    2,006
   5. COMMON SHARES
 [a] Authorized
  [b] Issued and Outstanding Shares
   [c] Stock options
 Stock Option Summary
   14




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Numberof
    
    
    WeightedOptioned
    
    
    AverageCommon
    
    
    ExerciseShares
    
    
    Price#
    
    
    $Balance, December 31, 2008
    
    
    723,143
    
    
    
    4.88Option grants
    
    
    41,300
    
    
    
    7.25Option cancellations
    
    
    (6,914
    )
    
    
    7.60Option exercises
    
    
    (7,646
    )
    
    
    4.24Option expirations
    
    
    (1,240
    )
    
    
    3.89Option forfeitures
    
    
    (500
    )
    
    
    3.00Balance, June 30, 2009
    
    
    748,143
    
    
    
    5.00
  Risk-free interest rates
    
    
    1.68
    %Expected dividend yield
    
    
    0
    %Expected life
    
    4 yearsExpected volatility
    
    
    76
    %
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $
    
    
    $Research and development
    
    
    22
    
    
    
    21
    
    
    
    45
    
    
    
    42General and administrative
    
    
    75
    
    
    
    35
    
    
    
    128
    
    
    
    69Total share-based compensation
    
    
    97
    
    
    
    56
    
    
    
    173
    
    
    
    111
   15




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[d] Stock Warrants
  [e] Loss per Common Share
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands except shares and per share amounts)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008NumeratorLoss attributable to
common shareholders
as reported
    
    $
    4,563
    
    
    $
    2,948
    
    
    $
    6,972
    
    
    $
    5,381DenominatorWeighted average
number of common
shares outstanding
    
    
    5,550,547
    
    
    
    118,801
    
    
    
    5,548,369
    
    
    
    118,801Basic and diluted
loss per common
share
    
    $
    0.82
    
    
    $
    24.81
    
    
    $
    1.26
    
    
    $
    45.29
  6. SEVERANCE CHARGES AND OTHER RESTRUCTURING ACTIVITIES
 , Recognition of Liabilities in Connection with a Purchase
Business Combination
   16




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Remaining
    
    
    
    
    
    
    Amortization
    
    
    Additional
    
    
    RemainingLiability at
    
    
    Payments
    
    
    of excess
    
    
    Liability
    
    
    Liability at(In thousands)
    
    31-Dec-08
    
    
    made
    
    
    lease facility
    
    
    Recorded
    
    
    June 30, 2009Employee severance included in accrued
liabilities
    
    $
    137
    
    
    $
    114
    
    
    $
    
    
    
    $
    
    
    
    $
    23Current portion of excess lease facility
    
    $
    632
    
    
    $
    
    
    
    $
    (453
    )
    
    $
    508
    
    
    $
    687Long-term portion of excess lease facility
    
    $
    1,090
    
    
    $
    
    
    
    $
    (74
    )
    
    $
    (14
    )
    
    $
    1,002
 7. TAXES
   (In thousands)
    
    $Balance as of December 31, 2008
    
    
    1,956Additions based on tax positions related to the current year
    
    
    125Deductions based on tax positions related to the current year
    
    
    (276
    )Balance as of June 30, 2009
    
    
    1,805
   17




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8. COMMITMENTS AND CONTINGENCIES
 Isis Pharmaceuticals Inc. and University of British Columbia
    Bayer HealthCare LLC
   Lease Arrangements
   $(In thousands)2009
    
    
    802010
    
    
    1632011
    
    
    41Total
    
    
    284
  18




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$(In thousands)2009
    
    
    9692010
    
    
    1,9952011
    
    
    2,0552012
    
    
    2,1172013
    
    
    2,180remainder
    
    
    9,395Total
    
    
    18,711
  Guarantees and Indemnifications
     9. RELATED PARTY TRANSACTIONS
   19




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10. COMPREHENSIVE INCOME (LOSS)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $
    
    
    $Loss for the period
    
    
    4,563
    
    
    
    2,168
    
    
    
    6,972
    
    
    
    3,825Reclassification of unrealized gain on
marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Unrealized loss on cash equivalents and
marketable securities
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    1Unrealized loss (gain) on foreign exchange
    
    
    
    
    
    
    (43
    )
    
    
    
    
    
    
    68Comprehensive loss
    
    
    4,564
    
    
    
    2,125
    
    
    
    6,973
    
    
    
    3,895
 11. SUBSEQUENT EVENTS
   20




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 INFORMATION REGARDING FORWARD LOOKING STATEMENTS
  
    
    our anticipated future capital requirements and the terms of any capital financing agreements;
    
    progress and preliminary and future results of clinical trials;
    
    anticipated regulatory filings, requirements and future clinical trials;
    
    timing and amount of future contractual payments, product revenue and operating expenses; and
    
    market acceptance of our products and the estimated potential size of these markets.
  
    
    future capital requirements and uncertainty of obtaining
additional funding through corporate partnerships, debt or equity
financings;
    
    dependence on the development and commercialization of products;
    
    the risk that results in humans may not be indicative of results in future studies;
    
    the risk that results of research and preclinical studies
may not be indicative of results in humans;
    
    uncertainty relating to the timing and results of clinical trials;
  21




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
    
    uncertainties regarding the safety and effectiveness of the
Companys products and technologies;
    
    the timing, expense and uncertainty associated with the
development and regulatory approval process for products;
    
    uncertainties regarding the Companys future operating
results, and the risk that the Companys products will not obtain
the requisite regulatory approvals to commercialize its products
or that the future sales of the Companys products may be less
than expected;
    
    acceptance of our products by the medical community;
    
    our ability to build out our product candidate pipeline
through product in-licensing or acquisition activities;
    
    the Companys dependence on key employees;
    
    the uncertainty associated with exiting or subleasing our
excess office and laboratory space;
    
    general competitive conditions within the drug development
and pharmaceutical industry;
    
    the potential inability to integrate and realize benefits from the Arrangement;
    
    the reliance on third parties who license intellectual
property rights to the Company to comply with the terms of such
agreements and to enforce, prosecute and defend such intellectual
property rights;
    
    the potential for product liability issues and related litigation;
    
    the potential for claims arising from the use of hazardous materials in our business;
    
    proper management of our operations will be critical to the success of the Company;
    
    the potential inability to successfully protect and enforce our intellectual property rights;
    
    the impact of current, pending or future legislation,
regulations and legal actions in the United States, Canada and
elsewhere affecting the pharmaceutical and healthcare industries;
    
    currency fluctuation in the Companys primary markets;
    
    volatility in the value of our common stock;
    
    fluctuations in our operating results;
    
    history of operating losses and uncertainty of future financial results; and
    
    general economic conditions.
  22




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MD&A Overview
  
    
    an overview of our business;
    
    results of operations and why those results are different from the comparative period in the prior year; and
    
    capital resources we currently have, our need for additional capital and possible sources of additional funding for future capital requirements.
 Arrangement Agreement
  Overview of the Company
    23




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Product Candidate OGX-011
  
    
    Evaluating a survival benefit for OGX-011 in combination with first-line docetaxel
treatment in approximately 800 men with CRPC; and
 
    
    Evaluating a durable pain palliation benefit for OGX-011 in combination with docetaxel
as second-line chemotherapy in approximately 300 men with CRPC.
    
    
    The median overall survival in patients with advanced metastatic prostate cancer who
were treated with OGX-011 plus docetaxel in a randomized phase 2 trial was 23.8 months
compared to 16.9 months for patients treated with docetaxel alone, indicating a 6.9 month
survival advantage in the OGX-011 arm;
 
    
    The unadjusted hazard ratio (HR), unadjusted hazard ratio (HR), a measure used to
compare the death rates between treatment groups, was 0.61, representing a 39% lower rate
of death for patients treated with OGX-011; and
 
    
    A prospectively defined multivariate analysis indicated that the significant predictors
of overall survival were treatment arm, performance status and presence of metastases
other than in bone or lymph nodes. Patients treated with OGX-011  had a rate of death 51%
lower than patients treated with docetaxel alone (HR=0.49; p=0.012). Additional
exploratory analyses found that the lower rate of death was associated with the effect of
OGX-011 treatment even when varying amounts of chemotherapy were administered (i.e.
OGX-011 treatment resulted in a lower rate of death when
compared to the control arm for patients receiving 6 or less cycles of chemotherapy as well
as for patients receiving 10 cycles of chemotherapy).
   24




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##### Table of Contents



Product Candidate OGX-427
       25




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##### Table of Contents



Product Candidates OGX-225, SN2310 and CSP-9222
   Revenues
  Research and Development Expenses
      General and Administrative Expenses
   26




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##### Table of Contents



Restructuring Activities
  Results of Operations
  Three Months Ended June 30, 2009 Compared to the Three Months Ended June 30, 2008
     Six Months Ended June 30, 2009 Compared to the Six Months Ended June 30, 2008
   27




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##### Table of Contents



Liquidity and Capital Resources
   Cash Flows
 Cash Used in Operations
  Cash Provided by Financing Activities
   28




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##### Table of Contents



Cash Used/Provided by Investing Activities
  Operating Capital and Capital Expenditure Requirements
  
    
    continuing survival follow-up for previously announced
phase 2 clinical trials of OGX-011;
    
    completion of its phase 1 clinical trial evaluating OGX-427 as a
monotherapy in patients with solid tumors;
    
    initiation of an investigator-sponsored phase 1 clinical trial
evaluating OGX-427 treatment in patient with bladder cancer; and
    
    working capital needs, capital expenditures and general corporate purposes.
   
    
    our ability to obtain additional funding through executing a
partnership or collaboration agreement with a third party that has
sufficient resources to fund the development of our product candidates
or the licensing or sale of certain of our product candidates, or
through private or public offerings of our equity securities or debt
financings;
    
    timing and costs of clinical trials, preclinical development and regulatory approvals;
    
    timing and cost of drug discovery and research and development;
    
    entering into new collaborative or product license agreements for
products in our pipeline; and
    
    costs related to obtaining, defending and enforcing patents.
  Off-Balance Sheet Arrangements
   29




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##### Table of Contents



Inflation
  Contingencies and Commitments
  Material Changes in Financial Condition
 June 30,
    
    
    December 31,(In thousands)
    
    2009
    
    
    2008$
    
    
    $Total assets
    
    
    7,383
    
    
    
    14,790Total liabilities
    
    
    3,445
    
    
    
    4,083Shareholders equity
    
    
    3,938
    
    
    
    10,707
  Critical Accounting Policies and Estimates
  New Accounting Standards
   30




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
  Foreign Currency Exchange Risk
  
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
   31




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1A.
    
    Risk Factors
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
    Nominee
    
    For
    
    
    WithheldPatrick R. Brady
    
    
    3,456,247
    
    
    
    75,189Michelle G. Burris
    
    
    3,449,858
    
    
    
    81,578Neil Clendeninn
    
    
    3,449,586
    
    
    
    81,850Scott Cormack
    
    
    3,461,508
    
    
    
    69,928Michael A. Martino
    
    
    2,430,405
    
    
    
    1,101,031Dwight Winstead
    
    
    3,448,590
    
    
    
    82,846
  For: 3,522,136
    
    Against: 5,048
    
    Abstain: 4,251
  32




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##### Table of Contents



Item 6.
    
    Exhibits
 ExhibitNumber
    
    Description2.1
    (1)
    
    Arrangement Agreement between the Company and OncoGenex Technologies Inc. dated May 27, 20082.2
    (2)
    
    First Amendment to Arrangement Agreement between the Company and OncoGenex Technologies Inc. dated August 11, 20082.3
    (2)
    
    Second Amendment to Arrangement Agreement between the Company and OncoGenex Technologies Inc. dated August 15, 20083.1
    (3)
    
    Amended and Restated Certificate of Incorporation (As Amended Through October 17, 1995)3.2
    (4)
    
    Certificate of Amendment to Certificate of Incorporation filed on May 6, 19993.3
    (5)
    
    Certificate of Correction filed on March 9, 2009 to Certificate of Amendment filed on May 6, 19993.4
    (6)
    
    Certificate of Amendment to Certificate of Incorporation filed on May 7, 20043.5
    (5)
    
    Certificate of Correction filed on March 9, 2009 to Certificate of Amendment filed on May 7, 20043.6
    (2)
    
    Certificate of Amendment to Certificate of Incorporation filed on August 20, 20083.7
    (7)
    
    Third Amended and Restated Bylaws of Oncogenex Pharmaceuticals, Inc.4.1
    (2)
    
    Specimen Certificate of Common Stock4.2
    (8)
    
    Amended and Restated Rights Agreement dated as of July 24, 2002 between the Company and U.S. Stock Transfer Corporation4.3
    (9)
    
    First Amendment to Amended and Restated Rights Agreement dated as of October 17, 2005 between the Company and U.S. Stock Transfer Corporation4.4
    (10)
    
    Second Amendment to Amended and Restated Rights Agreement dated as of August 10, 2006 between the Company and U.S. Stock Transfer Corporation4.5
    (11)
    
    Third Amendment to Amended and Restated Rights Agreement dated May 27, 2008 between the Company and Computershare Trust Company, N.A.4.6
    (1)
    
    Form of Escrow Agreement between the Company, Computershare Trust Company of Canada and former shareholders and debentureholders of OncoGenex Technologies Inc.4.7
    (1)
    
    Form of OncoGenex Voting Agreement4.8
    (1)
    
    Form of Sonus Voting Agreement10.1
    (12)
    
    Sonus Pharmaceuticals, Inc. Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase Plan  1991 (the 1991 Plan), as amended10.2
    (12)
    
    Form of Incentive Option Agreement (pertaining to the 1991 Plan)10.3
    (12)
    
    Form of Sonus Pharmaceuticals, Inc. Nonqualified Stock Option Agreement under the 1991 Plan10.4
    (13)
    
    Sonus Pharmaceuticals, Inc. 1999 Nonqualified Stock Incentive Plan (the 1999 Plan)10.5
    (13)
    
    Form of Sonus Pharmaceuticals, Inc. Nonqualified Stock Option Agreement under the 1999 Plan10.6
    (13)
    
    Form of Sonus Pharmaceuticals, Inc. Restricted Stock Purchase Agreement under the 1999 Plan10.7
    (14)
    
    Sonus Pharmaceuticals, Inc. 2000 Stock Incentive Plan (the 2000 Plan)10.8
    (15)
    
    First Amendment to Sonus Pharmaceuticals, Inc. 2000 Plan10.9
    (14)
    
    Form of Sonus Pharmaceuticals, Inc. Stock Option Agreement (pertaining to the 2000 Plan)10.10
    (16)
    
    Sonus Pharmaceuticals, Inc. 2007 Performance Incentive Plan (the 2007 Plan)10.11
    (17)
    
    Form of Sonus Pharmaceuticals, Inc. Stock Option Agreement (pertaining to the 2007 Plan)
  33




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##### Table of Contents



ExhibitNumber
    
    Description10.12
    (17)
    
    Form of Sonus Pharmaceuticals, Inc. Restricted Stock Purchase Agreement under the 2007 Plan10.13
    (18)
    
    OncoGenex Technologies Inc. Amended and Restated Stock Option Plan10.14
    (19)
    
    Stock Option Assumption, Amending and Confirmation Agreement dated as of August 21, 2008 between the Company and OncoGenex Technologies Inc.10.15
    (20)
    
    OncoGenex Pharmaceuticals, Inc. Short Term Incentive Awards Program10.16
    (20)
    
    Agreement and Consent Form (related to the Short Term Incentive Awards Program)10.17
    (20)
    
    Director Compensation Policy10.18
    (12)
    
    Form of Indemnification Agreement for Officers and Directors of the Company10.19
    (18)
    
    Form of Indemnification Agreement between OncoGenex Technologies Inc. and each of Scott Cormack, Stephen Anderson and Cindy Jacobs10.20
    (18)
    
    Form of Indemnification Agreement between OncoGenex Technologies Inc. and Neil Clendeninn10.21
    (21)
    
    Severance/Change in Control Agreement dated January 11, 2008 between the Company and Michael Martino10.22
    (2)
    
    Executive Termination Agreement and General Release dated August 21, 2008 between the Company and Michael Martino10.23
    (21)
    
    Severance/Change in Control Agreement dated January 11, 2008 between the Company and Alan Fuhrman10.24
    (2)
    
    Executive Termination Agreement and General Release dated August 21, 2008 between the Company and Alan Fuhrman10.25
    (18)
    
    Employment Agreement between OncoGenex Technologies Inc. and Scott Cormack dated as of December 21, 2001, and Employment Amending Agreement dated as of August
10, 200510.26
    (22)
    
    Employment Agreement between OncoGenex Technologies Inc. and Stephen Anderson dated as of January 9, 2006*10.27
    (2)
    
    Employment Amending Agreement dated June 28, 2007 between OncoGenex Technologies Inc. and Stephen Anderson10.28
    (22)
    
    Employment Agreement between OncoGenex, Inc. and Cindy Jacobs dated as of September 12, 2005*10.29
    (23)
    
    Securities Purchase Agreement dated as of August 15, 2005 by and among the Company and the investors named therein, together with their permitted transferees
(Securities Purchase Agreement)10.30
    (23)
    
    Form of Purchase Warrant related to the Securities Purchase Agreement10.31
    (24)
    
    Form of Purchase Warrant issued to Schering AG10.32
    (23)
    
    Registration Rights Agreement dated as of August 15, 2005 by and among the Company and the investors named therein10.33
    (25)
    
    Lease by and between BMR-217th Place LLC and the Company dated as of November 21, 200610.34
    (26)
    
    First Amendment to Lease by and between BMR-217th Place LLC and the Company dated as of August 17, 200710.35
    (27)
    
    Second Amendment to Lease by and between BMR-217th Place LLC and the Company dated as of January 28, 200810.36
    (6)
    
    Amended and Restated License Agreement effective as of July 2, 2008 by and between OncoGenex Technologies Inc. and Isis Pharmaceuticals, Inc. (OGX-011)*10.37
    (22)
    
    License Agreement between OncoGenex Technologies Inc. and the University of British Columbia effective as of November 1, 2001, and Amending Agreement dated as
of August 30, 2006 (OGX-011)*
  34




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##### Table of Contents



ExhibitNumber
    
    Description10.38
    (2)
    
    Second Amending Agreement and Consent as of August 7, 2008 between The University of British Columbia and OncoGenex Technologies Inc. (OGX-011)10.39
    (22)
    
    Collaboration and License Agreement between OncoGenex Technologies Inc. and Isis Pharmaceuticals, Inc. effective as of January 5, 2005 (OGX-427)*10.40
    (22)
    
    License Agreement between OncoGenex Technologies Inc. and the University of British Columbia effective as of April 5, 2005, and Amending Agreement dated as of
August 30, 2006 (OGX-427)*10.41
    (2)
    
    Second Amending Agreement as of August 7, 2008 between The University of British Columbia and OncoGenex Technologies Inc. (OGX-427)31.1
    
    
    Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
    
    Schedules and similar attachments to the Arrangement Agreement have been omitted pursuant to
Item 601(b)(2) of Regulation S-K. Registrant will furnish supplementally a copy of any omitted
schedule or similar attachment to the SEC upon request.*
    
    Confidential portions of this exhibit have been omitted and filed separately with the
Commission pursuant to an application for Confidential Treatment under Rule 24b-2 promulgated
under the Securities Exchange Act of 1934, as amended.(1)
    
    Incorporated by reference to the Companys proxy statement on Schedule 14A filed on July 3,
2008.(2)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2008.(3)
    
    Incorporated by reference to the Companys Registration Statement on Form S-1, Reg. No.
33-96112.(4)
    
    Incorporated by reference to Companys quarterly report on Form 10-Q for the quarter ended
March 31, 1999.(5)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on March 11,
2009.(6)
    
    Incorporated by reference to the Companys annual report on Form 10-K for the year ended
December 31, 2008.(7)
    
    Incorporated by reference to the Companys current report on Form 8-Kfiled on October 30,
2008.(8)
    
    Incorporated by reference to the Companys amended Form 8-A filed on July 25, 2002.(9)
    
    Incorporated by reference to the Companys amended Form 8-A filed on October 18, 2005.(10)
    
    Incorporated by reference to the Companys amended Form 8-A filed on August 14, 2006.(11)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on May 30, 2008.(12)
    
    Incorporated by reference to the Companys registration statement on Form S-1, Reg. No.
33-96112.(13)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended March 31, 1999.(14)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended June 30, 2000.  35




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##### Table of Contents



(15)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2006.(16)
    
    Incorporated by reference to the Companys proxy statement on Schedule 14A filed on April 3,
2007.(17)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2007.(18)
    
    Incorporated by reference to the OncoGenex Technologies Inc. registration statement on Form
F-1 filed on December 13, 2006.(19)
    
    Incorporated by reference to the Companys registration statement on Form S-8 filed on August
26, 2008.(20)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on April 2, 2009.(21)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on January 17,
2008.(22)
    
    Incorporated by reference to the OncoGenex Technologies Inc. registration statement on Form
F-1, Amendment No. 1, filed on January 29, 2007.(23)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on August 18,
2005.(24)
    
    Incorporated by reference to the Schedule 13D filed by Schering Berlin Venture Corporation on
October 31, 2005.(25)
    
    Incorporated by reference to the Companys annual report on Form 10-K for the year ended
December 31, 2006.(26)
    
    Incorporated by reference to the Companys annual report on Form 10-K for the year ended
December 31, 2007.(27)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended March 31, 2008.  36




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##### Table of Contents



SIGNATURES
  ONCOGENEX PHARMACEUTICALS, INC.Date:   August 6, 2009
    By:
    /s/ Stephen AndersonStephen AndersonChief Financial Officer and Secretary
(Principal Financial and Accounting Officer)  37




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    
    Certification of President and Chief Executive Officer
pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(a) or 15d-14(a) of the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification of President and Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
  38