DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

12 Months Ended

Dec. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

EntreMed, Inc. and its subsidiaries (“EntreMed” or “the Company”) (Nasdaq: ENMD) is a clinical-stage pharmaceutical company employing a drug development strategy that leverages resources in both North America and in China to develop therapeutics for the treatment of cancer and other diseases. The Company is currently conducting activities in both China and North America in order to accelerate delivery of clinical data and to reduce costs of clinical trials. The Company’s lead drug candidate is ENMD-2076, a selective Aurora A and angiogenic kinase inhibitor for the treatment of cancer. ENMD-2076 has completed Phase 1 studies in patients with advanced solid tumors, multiple myeloma and leukemia and is currently completing data for a multi-center Phase 2 study in patients with platinum resistant ovarian cancer. In 2012, the Company initiated a dual-institutional Phase 2 study of ENMD-2076 in triple-negative breast cancer. Additionally, in January 2013, the Company initiated a Phase 2 trial in advanced/metastatic soft tissue sarcoma, and in October 2013, the Company initiated a Phase 2 trial in advanced ovarian clear cell carcinoma. The Company intends to pursue additional trials and is in various assessment and planning stages. The Company employs a market-oriented approach to identify pharmaceutical candidates that it believes has the potential for gaining widespread market acceptance either globally or in China and for which development can be accelerated under the Company’s US and China drug development strategy.

ENMD-2076 is an orally-active, Aurora A/angiogenic kinase inhibitor with a unique kinase selectivity profile and multiple mechanisms of action. ENMD-2076 exerts its effects through multiple mechanisms of action, including anti-proliferative activity and the inhibition of angiogenesis. ENMD-2076 has been shown to inhibit a distinct profile of angiogenic tyrosine kinase targets in addition to the Aurora A kinase. Aurora kinases are key regulators of mitosis (cell division), and are often over-expressed in human cancers. ENMD-2076 also targets the VEGFR, Flt-3, and FGFR3 kinases which have been shown to play important roles in the pathology of several cancers. ENMD-2076 has demonstrated significant, dose-dependent preclinical activity as a single agent, including tumor regression, in multiple xenograft models (e.g. breast, colon, leukemia), as well as activity towards ex vivo-treated human leukemia patient cells. ENMD-2076 also has shown promising activity in Phase 1 clinical trials in solid tumor cancers, including ovarian, breast, liver, renal and sarcoma, as well as in leukemia and multiple myeloma. The Company is completing a Phase 2 trial of ENMD-2076 in ovarian cancer. In addition, EntreMed is currently conducting a dual-institutional Phase 2 study of ENMD-2076 in triple-negative breast cancer, a Phase 2 study in advanced/metastatic soft tissue sarcoma, and a Phase 2 study in advanced ovarian clear cell carcinoma.

ENMD-2076 has received orphan drug designation for the treatment of ovarian cancer, multiple myeloma and acute myeloid leukemia.

ENMD-2076 is the only program currently under active clinical evaluation. Other product candidates in the pipeline include 2-methoxyestrdiol (2ME2) for autoimmune diseases for which the Company has an approved Investigational New Drug Application in rheumatoid arthritis treatment and MKC-1. The Company owns or has exclusive license to these products.

The Company intends to advance clinical development of ENMD-2076 and the implementation of its plans will include leveraging resources in both the United States and China. In order to capitalize on the drug development and capital resources available in China, the Company is doing business in China through its wholly-owned Chinese subsidiary. The Chinese subsidiary will execute the China portion of the Company’s drug development strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing the Company’s plan for accelerated development and commercialization in the Chinese market.

The Company intends to pursue additional financing opportunities as well as opportunities to raise capital through forms of non- or less- dilutive arrangements, such as partnerships and collaborations with organizations that have capabilities and/or products that are complementary to our capabilities and products in order to continue the development of the product candidate that the Company intends to pursue to commercialization.

The accompanying consolidated financial statements include the accounts of EntreMed, Inc. and its subsidiaries, Miikana Therapeutics, Inc. (Miikana) and EntreMed (Beijing) Co., Ltd. (EntreMed China). EntreMed China is a non-stock Chinese entity with 100% of its interest owned by EntreMed. EntreMed China received approval for a business license from the Beijing Industry and Commercial Administration in August 2012 and has operating facilities in Beijing. All inter-company balances and transactions have been eliminated in consolidation.

LIQUIDITY RISKS AND MANAGEMENT’S PLANS

Since inception, the Company has incurred significant losses from operations and has incurred an accumulated deficit of $399.1 million. The Company expects to continue to incur operating losses for the foreseeable future due to, among other factors, its continuing clinical activities. In February 2012 (the “2012 Financing”), the Company received the proceeds from a $10 million convertible note financing. Upon approval by the Company’s stockholders at the 2012 annual stockholders meeting, the convertible notes automatically converted into common stock on May 1, 2012 (see Note 6). In addition, on March 14, 2013 (the “2013 Financing”), the Company closed on the sale of 4,495,828 shares of common stock and 2,247,912 warrants to certain investors for approximately $10.8 million (see Note 6). As a result of these transactions, along with on-going cost containment measures, the Company has sufficient resources to fund its operations for at least the next twelve months. The Company will continue to exercise tight controls over operating expenditures and will continue to pursue opportunities, as required, to raise additional capital and will also actively pursue non- or less-dilutive arrangements in China to support the Company’s dual-country approach to drug development.