Achaogen
Mar 14, 2017

Achaogen Reports Fourth Quarter and Full Year 2016 Financial Results and Provides Corporate Update

Achieved positive results in Phase 3 EPIC and CARE clinical trials of plazomicin; NDA submission planned for the second half of 2017

Unveiled new orally-administered antibacterial clinical candidate, C-Scape, to be evaluated in complicated urinary tract infections (cUTI)

Raised $95 million through underwritten equity offering

Conference call today at 4:30 p.m. Eastern Time

SOUTH SAN FRANCISCO, Calif., March 14, 2017 (GLOBE NEWSWIRE) -- Achaogen, Inc. (NASDAQ:AKAO), a late-stage biopharmaceutical company discovering and developing innovative antibacterials addressing multi-drug resistant (MDR) gram-negative infections, today reported financial results for the fourth quarter and year ended December 31, 2016, and provided an update on its corporate and clinical development activities.

"2016 was a year of remarkable progress by the Achaogen team — the plazomicin Phase 3 results were exceptional and we are also poised to advance C-Scape, a highly attractive development candidate, into the clinic in 2017," said Kenneth Hillan, M.B. Ch.B., Achaogen's Chief Executive Officer. "With the additional capital we raised in December 2016, we are well positioned to seek approval of plazomicin and, if approved, to execute on our goal of launching a treatment that has the potential to address serious multi-drug resistant bacterial infections occurring every day in our hospitals."

Recent Highlights and Upcoming Milestones

Plazomicin — The Company's lead product candidate successfully completed and reported positive results in two Phase 3 clinical trials. The EPIC (Evaluating Plazomicin In cUTI) trial is expected to serve as a single registration trial supporting a New Drug Application (NDA) for plazomicin in the United States and a Marketing Authorization Application (MAA) in the European Union. The Company expects the CARE (Combating Antibiotic Resistant Enterobacteriaceae) trial will serve as a descriptive trial in patients with serious bacterial infections due to carbapenem-resistant Enterobacteriaceae (CRE) and should provide additional data supporting plazomicin therapy in these patients.

C-Scape — Achaogen is developing an orally-available antibacterial candidate, C-Scape, that is a combination of an approved beta-lactam and an approved beta-lactamase inhibitor with the potential to treat patients with cUTI due to MDR pathogens such as extended spectrum beta-lactamase (ESBL) producing Escherichia coli and Klebsiella pneumoniae.

Research Discovery and Development Programs — Beyond the Company's plazomicin and C-Scape programs, the research and early development teams are focused on novel approaches to address infections caused by MDR gram-negative pathogens.

Other Corporate Highlights

Fourth Quarter and Full Year 2016 Financial Results

Unrestricted cash, cash equivalents and short-term investments totaled $145.9 million at December 31, 2016 compared to $58.7 million at December 31, 2015.

Contract revenue totaled $10.7 million for the fourth quarter of 2016 compared to $4.7 million for the same period of 2015. Contract revenue for the year ended December 31, 2016 was $41.8 million compared to $26.1 million for the year ended December 31, 2015. The increase in contract revenue in 2016 was primarily due to the increased research and development activities under the contract Option 3 with BARDA. As of December 31, 2016, $7.2 million and $1.0 million remains on the BARDA and NIAID contracts, respectively. 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 $17.9 million for the fourth quarter of 2016 compared to $12.3 million reported for the same period in 2015. Research and development expenses for the year ended December 31, 2016 were $74.0 million compared to $40.2 million for the year ended December 31, 2015. The increase in 2016 research and development expenses primarily relates to increased program costs associated with the Phase 3 EPIC and CARE trials, higher personnel-related expenses, as well as increased costs related to non-plazomicin research programs.

General and Administrative (G&A) expenses were $4.9 million for the fourth quarter of 2016 compared to $3.3 million for the same period in 2015. General and administrative expenses for the year ended December 31, 2016 were $17.1 million compared to $12.4 million for the year ended December 31, 2015. The increase in G&A expenses during the quarter primarily relates to increased activity to support plazomicin development and manufacture and also to prepare for registration and commercialization.

Net other expenses and interest expenses were $17.7 million and $21.9 million for the fourth quarter and full year of 2016, respectively, compared to nil for both periods in 2015. The increase was primarily related to non-cash charges for the revaluation of warrants issued in the private placement of common stock and warrants to purchase common stock in June 2016.

Net loss for the fourth quarter of 2016 was $29.7 million, or $1.04 per share, compared to a net loss of $11.3 million, or $0.61 per share, for the fourth quarter of 2015. For the year ended December 31, 2016, net loss was $71.2 million, or $3.00 per share, compared to a net loss of $27.1 million, or $1.49 per share, for the year ended December 31, 2015.

As of December 31, 2016, there were approximately 35.6 million shares of common stock outstanding.

Conference Call
The Company will host a conference call today, March 14, 2017 at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. To participate by telephone, please dial 888-378-0332 (Domestic) or 719-457-2698 (International). The conference ID number is 5196478. A live and archived audio webcast can be accessed through the Investors section of the Company's website at www.achaogen.com. The archived audio webcast will remain available on the Company's website for 30 days following the conference call.

About Achaogen
Achaogen is a late-stage biopharmaceutical company passionately committed to the discovery, development, and commercialization of innovative 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 (BARDA), 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 an orally-available antibacterial candidate, C-Scape, a combination of an approved beta-lactam and an approved beta-lactamase inhibitor. Achaogen is also pursuing an advanced series of LpxC inhibitor compounds that are active against Pseudomonas aeruginosa, and have been funded in part with Federal funds from the National Institute of Allergy and Infectious Diseases (NIAID), National Institutes of Health, Department of Health and Human Services, under Contract No. HHSN272201500009C. All product candidates are investigational only and have not been approved for commercialization. For more information, please visit www.achaogen.com.

Forward-Looking Statements
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 potential regulatory approval of plazomicin, Achaogen's commercial objectives and Achaogen's pipeline of product candidates. 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; the risks and uncertainties of the regulatory approval process; the risks and uncertainties of commercialization and gaining market acceptance; the risk when bacteria will evolve resistance to plazomicin; 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; risks and uncertainties related to the acceptance of government funding for certain of Achaogen's programs, including the risk that BARDA or NIAID could terminate Achaogen's contract for the funding of the plazomicin or LpxC inhibitor development programs, respectively; 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 quarter ended September 30, 2016, and its Annual Report on Form 10-K for the fiscal year ended December 31, 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.

Source: Achaogen, Inc

AKAO-G


Achaogen, Inc. 
Condensed Consolidated Statements of Operations 
(in thousands except share and per share data) 
  
      
 Three Months EndedTwelve Months Ended
 December 31,December 31,
 2016
      2015      20162015 
Contract revenue$10,734 $4,664      $   41,773 $26,061 
Operating expenses:    
Research and development 17,862  12,261   73,999  40,228 
General and administrative 4,934  3,287   17,122  12,406 
Total operating expenses 22,796  15,548   91,121  52,634 
     
Loss from operations (12,062) (10,884)  (49,348) (26,573)
     
Interest expense (765) (435)  (2,320) (699)
Other income (expense), net       (16,897)     53          (19,559)     179 
Net loss$    (29,724)$    (11,266)     $   (71,227)$      (27,093) 
     
Basic and diluted net loss per common share$    (1.04)$    (0.61)     $   (3.00)$      (1.49)
Weighted-average common shares outstanding used to    
calculate basic and diluted net loss per common share 28,653,045  18,369,078   23,707,063  18,147,986 



Achaogen, Inc. 
Condensed Consolidated Balance Sheets 
(in thousands) 
    
 December 31,  December 31, 
  2016  2015 
    
Assets  
Current assets:  
  Cash and cash equivalents$  118,964  $  20,287
  Short-term investments   26,912     38,444
  Contracts receivable   12,151     5,039
  Prepaids and other current assets   2,189     1,719
  Restricted cash   127     -
Total current assets   160,343     65,489
Property and equipment, net   3,261     905
Restricted cash   250     127
Deposit and other assets   71     342
Total assets$  163,925  $  66,863
   
Liabilities and stockholders' equity  
Current liabilities:  
  Accounts payable$  5,739  $  3,537
  Accrued liabilities   9,698     4,927
  Loan payable, current portion   4,167     -
  Other current liabilities   104     225
Total current liabilities   19,708     8,689
   
  Loan payable, long-term   21,110     14,536
  Warrant liability   13,874     -
  Derivative liability   602     375
  Other long-term liabilities   1,896     104
Total liabilities   57,190     23,704
   
Stockholders' equity   106,735     43,159
Total liabilities and stockholders' equity$  163,925  $  66,863
Investor Contact:    
Hans Vitzthum
212.915.2568	
hans@lifesciadvisors.com

Media Contact: 
Denise Powell
510.703.9491
denise@redhousecomms.com