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Achaogen Announces Fourth Quarter and Full Year 2014 Results
SOUTH SAN FRANCISCO, Calif., March 16, 2015 (GLOBE NEWSWIRE) -- Achaogen, Inc. (Nasdaq:AKAO), a clinical-stage biopharmaceutical company developing novel antibacterials to treat multi-drug resistant (MDR) gram-negative infections, today reported financial results for the quarter and year ended December 31, 2014.
During the fourth quarter, the Company remained focused on advancing the Phase 3 CARE (Combating Antibiotic Resistant Enterobacteriaceae) trial for plazomicin, Achaogen's lead product for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE). The Company has been exploring strategies to improve patient recruitment and remains in discussions with the US Food and Drug Administration (FDA) regarding potential modifications to the study design as well as additional clinical trials that could support and, possibly, facilitate regulatory filings for plazomicin. The Company currently expects to provide an update on its development plans for plazomicin by early in the second quarter of 2015.
"The past year has been important on multiple fronts, highlighted by our transition to being a public company, initiation of a Phase 3 trial to evaluate plazomicin, and participation in key legislative initiatives addressing the public health threat of antibiotic-resistant bacterial pathogens. As we head into 2015, I believe that the company is well positioned to become a worldwide leader in the antibiotic space," commented Dr. Kenneth Hillan, Chief Executive Officer of Achaogen.
Highlights for 2014
Completed $82.8 million initial public offering underwritten by Credit Suisse Securities (USA) LLC, Cowen and Company, LLC, William Blair & Company, LLC and Needham & Company, LLC.
Commenced patient enrollment into the Phase 3 CARE trial for plazomicin. This pathogen-specific trial is currently enrolling patients with a high risk of mortality and, if successful, will provide clinical evidence of the overall survival superiority of plazomicin versus colistin for life-threatening bloodstream infections and pneumonia due to CRE. Enrollment in the current Phase 3 clinical trial of plazomicin continues at a rate that has been slower than anticipated.
Progressed CARE trial site activation, with the majority of sites in the US and Europe now activated, and Latin America achieving on-line status in the first quarter of 2015.
Received Qualified Infectious Disease Product (QIDP) designation for plazomicin from the FDA. The QIDP designation was created by the Generating Antibiotic Incentives Now (GAIN) Act, which was part of the FDA Safety and Innovation Act (FDASIA) and provides certain incentives for the development of new antibiotics, including priority review and an additional five years of market exclusivity.
Dr. Kenneth Hillan, Chief Executive Officer of Achaogen, testified before the US House of Representatives Energy and Commerce Committee, Subcommittee on Health, providing testimony regarding federal initiatives to incentivize new antibiotic development, including the proposed ADAPT and DISARM Acts. The ADAPT Act (Antibiotic Development to Advance Patient Treatment) aims to establish a pathway for the prompt approval of antibacterial and antifungal drugs that are intended to treat serious or potentially fatal infections. The DISARM Act (Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms) would reform reimbursement of qualifying antimicrobial products in the hospital setting to allow value-based pricing, thus providing a powerful incentive for manufacturers to develop new antibiotics.
Continued to leverage expertise and leadership in antibacterial research and development to advance discovery-stage programs, furthering the LpxC inhibitor and therapeutic antibody programs, which target MDR gram-negative bacteria including P. aeruginosa and A. baumannii.
- Key appointments included John Smither and Dr. Chris Boerner to its Board of Directors, Dr. Ian Friedland becoming Chief Medical Officer, and Derek Bertocci joining as Chief Financial Officer.
Summary Financial Results for the Quarter and Year Ended December 31, 2014
Cash, cash equivalents and short-term investments totaled $63.7 million at December 31, 2014 compared to $72.0 million at September 30, 2014, decreasing as a result of operating losses and payment of a $4.0 million development milestone license fee which was accrued as expense in September 2014.
Revenues for the full year 2014 totaled $20.0 million, as compared to $18.5 million in 2013. Fourth quarter 2014 revenues were $4.3 million, compared to $6.2 million for the comparable quarter of 2013. Achaogen derived all of its revenue from funding provided under U.S. government contracts in connection with the development of product candidates. Revenue under government contracts increased due to increased spending on Achaogen's ongoing Phase 3 CARE trial of plazomicin.
Research and development (R&D) expenses for the years ended December 31, 2014 and 2013 were $30.1 million and $23.5 million, respectively. For the fourth quarter of 2014, R&D expenses were $6.6 million, compared to $6.8 million for the comparable quarter of 2013. Increased costs for 2014 were primarily attributable to increased activities on the ongoing Phase 3 trial of plazomicin, higher personnel-related expenses, and a $4.0 million development milestone license fee upon dosing the first patient in the Company's ongoing Phase 3 trial of plazomicin. This $4.0 million milestone fee was paid in October.
General and administrative (G&A) expenses for the years ended December 31, 2014 and 2013 were $9.6 million and $7.0 million, respectively. For the fourth quarter of 2014, G&A expenses were $2.5 million, compared to $1.6 million for the comparable quarter of 2013. Increased costs for 2014 and the quarter ended December 31, 2014 were primarily attributable to higher personnel-related costs including stock-based compensation expenses and increased costs associated with being a public company.
Net loss for the year ended December 31, 2014 was $20.2 million, compared to $13.1 million for the same period of 2013. Net loss in the fourth quarter of 2014 was $4.9 million, compared to a net loss of $2.5 million for the comparable quarter of 2013.
Achaogen is a clinical-stage biopharmaceutical company passionately committed to the discovery, development, and commercialization of novel antibacterials to treat MDR gram-negative infections. Achaogen is developing plazomicin, Achaogen's lead product candidate, for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including CRE. Through the Special Protocol Assessment procedure, the U.S. Food and Drug Administration has agreed that the design and planned analyses of Achaogen's Phase 3 CARE trial adequately address objectives in support of a New Drug Application. Achaogen's plazomicin program is funded in part with a contract from the Biomedical Advanced Research and Development Authority. Plazomicin is the first clinical candidate from Achaogen's gram-negative antibiotic discovery engine, and Achaogen has other programs in early and late preclinical stages focused on other MDR gram-negative infections.
Forward Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical facts contained in this press release are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including Achaogen's expectations regarding the enrollment and success of its Phase 3 trial for plazomicin, Achaogen's ability to modify the current Phase 3 trial of plazomicin or to design and complete additional clinical trials of plazomicin that could support regulatory filings for plazomicin, Achaogen's ability to provide clinical evidence of the overall survival superiority of plazomicin versus colistin for life-threatening bloodstream infections and pneumonia due to CRE, Achaogen's ability to become a leading anti-infective company, and Achaogen's ability to discover, develop and commercialize novel antibacterials to treat MDR gram-negative infections. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause Achaogen's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the preclinical and clinical development process; specific risks related to the Phase 3 trial of plazomicin, including the lack of a prior clinical trial in patients with CRE infections and challenges in enrolling an adequate number of patients with rare infections; the risk of failure to successfully validate, develop and obtain regulatory clearance or approval for the in vitro diagnostic (IVD) assay for plazomicin; the risks and uncertainties of the regulatory approval process; the risks and uncertainties of commercialization and gaining market acceptance; the risk that bacteria may evolve resistance to plazomicin; Achaogen's dependence on ARK Diagnostics, Inc. to develop and manufacture the IVD assay for plazomicin; risks and uncertainties as to Achaogen's ability to raise additional capital to support the development of plazomicin and its other programs; uncertainties regarding the availability of adequate third-party coverage and reimbursement for newly approved products; Achaogen's reliance on third parties to conduct certain preclinical studies and all of its clinical trials; Achaogen's reliance on third-party contract manufacturing organizations to manufacture and supply its product candidates and certain raw materials used in the production thereof; Achaogen's dependence on its Chief Executive Officer; risks and uncertainties related to the acceptance of government funding for certain of Achaogen's programs, including the risk that the Biomedical Advanced Research and Development Authority could terminate Achaogen's contract for the funding of the plazomicin development program; risk of third party claims alleging infringement of patents and proprietary rights or seeking to invalidate Achaogen's patents or proprietary rights; and the risk that Achaogen's proprietary rights may be insufficient to protect its technologies and product candidates. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Achaogen's business in general, see Achaogen's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the Securities and Exchange Commission on March 16, 2015. Achaogen does not plan to publicly update or revise any forward-looking statements contained in this press release, whether as a result of any new information, future events, changed circumstances or otherwise.
|Condensed Consolidated Statements of Operations|
|(in thousands except share and per share data)|
|Three Months Ended Dec 31,||Year Ended Dec 31,|
|Contract revenue||$ 4,259||$ 6,192||$ 19,970||$ 18,512|
|Research and development||6,632||6,799||30,110||23,484|
|General and administrative||2,508||1,574||9,646||6,992|
|Total operating expenses||9,140||8,373||39,756||30,476|
|Loss from operations||(4,881)||(2,181)||(19,786)||(11,964)|
|Other income (expense), net||27||(78)||7||183|
|Net loss||$ (4,854)||$ (2,486)||$ (20,176)||$ (13,112)|
|Basic and diluted net loss per common share||$ (0.27)||$ (6.33)||$ (1.42)||$ (33.83)|
|Weighted-average common shares outstanding used to|
|calculate basic and diluted net loss per common share||17,785,923||392,844||14,210,098||387,547|
|Condensed Consolidated Balance Sheets|
|December 31,||December 31,|
|Cash and cash equivalents||$ 18,881||$ 10,738|
|Prepaids and other current assets||520||1,873|
|Total current assets||69,433||19,841|
|Property and equipment, net||725||743|
|Deposit and other assets||37||47|
|Total assets||$ 70,322||$ 20,758|
|Liabilities, convertible preferred stock, and stockholders' equity (deficit )|
|Accounts payable||$ 2,122||$ 2,923|
|Notes payable, current portion||--||4,989|
|Other current liabilities||128||73|
|Total current liabilities||5,516||10,989|
|Notes payable, noncurrent portion||--||1,698|
|Other long-term liabilities||--||244|
|Convertible preferred stock||--||132,278|
|Stockholders' equity (deficit)||64,613||(124,576)|
|Total liabilities, convertible preferred stock, and stockholders' equity (deficit)||$ 70,322||$ 20,758|
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