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Achaogen Reports Second Quarter 2016 Financial Results and Provides Corporate Update
-- Enrollment in Phase 3 EPIC registration clinical trial of plazomicin maintained momentum; top-line results from EPIC expected in the first quarter of 2017 --
-- Secured $55 million in additional funding and funding awards --
SOUTH SAN FRANCISCO, Calif., Aug. 08, 2016 (GLOBE NEWSWIRE) -- Achaogen, Inc. (NASDAQ:AKAO), a clinical-stage biopharmaceutical company developing novel antibacterials addressing multi-drug resistant (MDR) gram-negative infections, today reported financial results for the second quarter 2016, and reviewed recent corporate and clinical development progress.
"We had a highly productive second quarter and remain on track to complete enrollment in both the EPIC and CARE studies in 2016 and to report top-line results from both studies as planned in 2017," said Kenneth Hillan, M.B. Ch.B., Achaogen's Chief Executive Officer. "In addition, we successfully secured additional capital resources and funding awards to advance plazomicin through top-line data."
Plazomicin — The Company's lead product candidate is being developed to treat serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE), and is currently being evaluated in two Phase 3 clinical trials. The EPIC (Evaluating plazomicin in cUTI) study is expected to serve as a single registration trial supporting a New Drug Application (NDA) for plazomicin in the United States. The CARE (Combating Antibiotic Resistant Enterobacteriaceae) study is a Phase 3 clinical trial in patients with serious bacterial infections due to CRE.
- Enrollment has progressed well in the ongoing Phase 3 EPIC registration clinical trial of plazomicin; the Company continues to expect to release top-line results from the EPIC study in the first quarter of 2017 and plans to submit an NDA to the U.S. Food and Drug Administration (FDA) in the second half of 2017.
- Continued to enroll patients in the Phase 3 CARE clinical trial of plazomicin in patients with serious bacterial infections due to CRE; the Company expects to end enrollment in the CARE study in 2016 and announce top-line results in the first half of 2017.
- Awarded $20 million for an additional option on an existing contract with the Biomedical Advanced Research and Development Authority (BARDA) to support the development of plazomicin and the Phase 3 EPIC study. The remaining funding currently available under the contract with BARDA totals $33 million as of June 30, 2016.
- Presented data at the American Society for Microbiology (ASM) Microbe Annual Meeting that demonstrated plazomicin's potent activity against Enterobacteriaceae that are carbapenem-resistant (CRE). Plazomicin also showed superior potency and broader coverage compared with approved aminoglycosides, including activity against aminoglycoside-non-susceptible isolates that harbor common aminoglycoside resistance mechanisms. Multiple presentations emphasized plazomicin's activity against MDR pathogens, along with its biochemical activity and synergy with other agents against MDR Enterobacteriaceae.
- Participated in an FDA public workshop regarding antibacterial drug development for patients with unmet need (patients with infections due to highly resistant pathogens where options for therapy are limited) and the development of new antibacterial drugs that target a single species.
"The FDA workshop discussed the challenge of developing antibiotics targeting unmet need patients. We highlighted our experience with the CARE study and outlined the difficulties in conducting clinical trials focused specifically on highly resistant pathogens," said Ian Friedland, M.D., Achaogen's Chief Medical Officer. "There was broad acknowledgement of the challenges of enrolling statistically powered trials evaluating treatment of MDR pathogens and that smaller trials are still highly valuable as they provide important clinical data in the critically ill patient population."
Pseudomonas and Acinetobacter Discovery and Development Programs — Beyond the Company's plazomicin program, the research and early development teams are focused on discovering and developing novel medicines for serious infections caused by MDR pathogens including Acinetobacter baumannii and Pseudomonas aeruginosa. The Company's goal is to file an Investigational New Drug (IND) application from its research programs in 2017.
- Therapeutic Monoclonal Antibodies: Entered into a collaboration and license agreement with Crystal Bioscience to identify and generate therapeutic antibodies against multiple novel targets.
- LpxC Small Molecules: Continued the development of LpxC inhibitor antibiotic drug candidates, which are novel small molecule agents for the potential treatment of bacterial infections, including those resistant to currently available antibiotics.
Other Corporate Highlights — During the quarter, the Company strengthened its balance sheet and added a key hire to its leadership team.
- Raised $25 million in a private placement in June 2016. As a result of the equity financing, the Company met certain funding conditions under an existing loan agreement with Solar Capital Ltd. and, during the quarter, obtained an additional $10 million term loan from Solar Capital.
- Announced the addition of Mr. Tobin Schilke as Chief Financial Officer to the executive management team. Mr. Schilke has shaped and led successful teams throughout his career in senior financial, commercial and M&A positions at Roche/Genentech.
Second Quarter 2016 Financial Results
Unrestricted cash, cash equivalents and short-term investments totaled $70.0 million at June 30, 2016 compared to $58.7 million at December 31, 2015.
Contract revenue totaled $9.1 million for the second quarter of 2016 compared to $12.0 million for the same period of 2015. The decrease in contract revenue during the quarter was primarily due to a $7.1 million settlement with the Defense Threat Reduction Agency (DTRA) in 2015 related to a research contract, offset by the increased research and development activities under the contract Option 3 with BARDA and the LpxC inhibitor contract with National Institute of Allergy and Infectious Diseases (NIAID). Achaogen derived all of its revenue from funding provided under U.S. government contracts in connection with the research and development of product candidates.
Research and development expenses were $21.7 million for the second quarter of 2016 compared to $10.1 million reported for the same period in 2015. The increase in research and development expenses during the quarter primarily relates to increased program costs associated with the Phase 3 EPIC study, higher personnel-related expenses, as well as increased costs related to non-plazomicin research programs.
General and administrative expenses were $4.0 million for the second quarter of 2016 compared to $2.9 million for the same period in 2015. The increase in general and administrative expenses during the quarter primarily relates to higher personnel-related expenses and professional fees.
Net other expenses were $1.3 million for the second quarter of 2016 compared to nil for the same period in 2015. The increase was primarily related to non-cash charges for the revaluation of warrants issued in the private placement in June 2016.
Net loss for the second quarter of 2016 was $18.3 million, or $0.87 per share, compared to a net loss of $0.9 million, or $0.05 per share, for the second quarter of 2015.
Total shares outstanding at June 30, 2016, were approximately 26.5 million common shares.
This press release contains forward-looking statements. All statements other than statements of historical facts contained herein 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, but not limited to, Achaogen's expectations regarding (i) the enrollment and success of Achaogen's ongoing Phase 3 EPIC trial and Phase 3 CARE trial, (ii) the expectation that the Phase 3 EPIC trial will serve as a single registration clinical trial supporting an NDA for plazomicin, (iii) the timing for completion of Achaogen's Phase 3 trials and submission of an NDA to the FDA (iv) the potential for plazomicin to treat serious bacterial infections due to MDR Enterobacteriaceae and (v) the goal to file an IND application from its research programs in 2017. 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 ongoing Phase 3 EPIC trial and Phase 3 CARE trial, 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; 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 President and Chief Executive Officer; risks and uncertainties related to the acceptance of government funding for certain of Achaogen's programs, including the risk that BARDA 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 current and future reports filed with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016. 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.
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 carbapenem-resistant Enterobacteriaceae. Achaogen's plazomicin program is funded in part with Federal funds from the Biomedical Advanced Research and Development Authority, Office of the Assistant Secretary for Preparedness and Response, Office of the Secretary, Department of Health and Human Services, under Contract No. HHSO100201000046C. Plazomicin is the first clinical candidate from Achaogen's gram-negative antibiotic discovery engine. Achaogen has other programs in early and late preclinical stages focused on other MDR gram-negative infections, including LpxC inhibitors for the treatment of serious bacterial infections including MDR gram-negative bacteria. Achaogen's LpxC inhibitor program has been funded in part with Federal funds from the National Institute of Allergy and Infectious Diseases, National Institutes of Health, Department of Health and Human Services, under Contract No. HHSN272201500009C. LpxC inhibitors are the second class of molecules from Achaogen's gram-negative antibiotic discovery engine. For more information, please visit www.achaogen.com.
|Condensed Consolidated Statements of Operations|
|(in thousands except share and per share data)|
|Three Months Ended ||Six Months Ended |
|June 30,||June 30,|
|Research and development||21,708||10,088||35,601||17,967|
|General and administrative||3,951||2,882||7,728||6,113|
|Total operating expenses||25,659||12,970||43,329||24,080|
|Loss from operations||(16,515||)||(929||)||(28,336||)||(7,159||)|
|Other income (expense), net||(1,306||)||43||(1,244||)||94|
|Basic and diluted net loss per common share||$||(0.87||)||$||(0.05||)||$||(1.55||)||$||(0.39||)|
|Weighted-average common shares outstanding used to|
|calculate basic and diluted net loss per common share||20,899,297||18,070,045||19,648,792||18,034,416|
|Condensed Consolidated Balance Sheets|
|June 30,||December 31,|
|Cash and cash equivalents||$||54,649||$||20,287|
|Prepaids and other current assets||2,501||1,719|
|Total current assets||81,279||65,489|
|Property and equipment, net||995||905|
|Deposit and other assets||70||342|
|Liabilities and stockholders' equity|
|Other current liabilities||207||225|
|Total current liabilities||15,667||8,689|
|Loan payable, long-term||24,815||14,536|
|Other long-term liabilities||14||104|
|Total liabilities and stockholders' equity||$||82,344||$||66,863|
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