Achaogen
Feb 27, 2018

Achaogen Reports Fourth Quarter and Full Year 2017 Financial Results and Provides Corporate Update

-- Plazomicin New Drug Application (NDA) accepted by U.S. Food and Drug Administration (FDA);
June 25, 2018 set as PDUFA action date --

-- Orally-administered antibacterial candidate C-Scape achieved positive top-line results in Phase 1 --

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

SOUTH SAN FRANCISCO, Calif., Feb. 27, 2018 (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, 2017, and provided an update on its corporate and clinical development activities.

"We gained considerable momentum in 2017 that culminated with FDA acceptance of our plazomicin NDA submission and positive results from our first clinical trial of C-Scape, our second antibacterial product candidate," said Blake Wise, Achaogen's Chief Executive Officer. "There remains a significant unmet need for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE), and we look forward to the potential approval of plazomicin this year and the opportunity to make plazomicin available to hospitals and patients in need."

Recent Highlights and Upcoming Milestones

Other Corporate Milestones

Fourth Quarter and Year 2017 Financial Results

Cash Position: At December 31, 2017, Achaogen had $164.8 million in unrestricted cash, cash equivalents and short-term investments compared to $145.9 million at December 31, 2016. Subsequent to December 31, 2017, Achaogen refinanced a $25.0 million secured debt line it had with Solar Capital with a new $50.0 million secured debt line with Silicon Valley Bank. The Company also issued 2,144,454 shares of common stock under its at-the-market equity facility for net proceeds of $24.0 million.

Revenue: Contract revenue totaled $1.9 million for the fourth quarter of 2017 compared to $10.7 million for the same period of 2016. Contract revenue for the year ended December 31, 2017 was $11.2 million compared to $41.8 million for the year ended December 31, 2016. The decrease in contract revenue during the fourth quarter and 2017 was primarily due to lower Biomedical Advanced Research and Development Authority (BARDA) contract revenues. As of December 31, 2017, $11.0 million remains on Option 1 of the BARDA C-Scape contract. Achaogen derived all of its revenue from funding provided under Gates Foundation and U.S. government contracts in connection with the research and development of product candidates.

Research and Development (R&D): R&D expenses in the fourth quarter of 2017 were $29.5 million, compared to $17.9 million reported for the same period in 2016. The increase in R&D expenses during the quarter was attributable to increased personnel and facility-related costs as net headcount increased, external expenses related to plazomicin product supply and pre-launch activities, C-Scape and early research programs. For the full year 2017, research and development expenses were $95.6 million, compared to $74.0 million for the full year 2016. The increase in 2017 R&D expenses was primarily attributable to increased personnel and facility related costs, increased expenses related to C-Scape and early research programs, offset by decreases related to the plazomicin program.

General and Administrative (G&A): G&A expenses in the fourth quarter of 2017 were $14.5 million, compared to $4.9 million for the same period in 2016. For the full year 2017, G&A expenses were $41.9 million, compared to $17.1 million for the full year 2016. The increase in G&A expenses for the quarter and the year 2017 was primarily attributable to an increase in personnel and facility-related costs, and in costs related to preparation for the commercialization of plazomicin.

Change in warrant and derivative liabilities for the fourth quarter of 2017 was a $5.9 million gain compared to a $17.0 million loss for the same period in 2016. The increase was primarily related to non-cash gain for the revaluation of warrants issued in the private placement of common stock and warrants to purchase common stock in June 2016.

Net Loss: Achaogen reported a net loss of $36.4 million for the fourth quarter of 2017, compared to a net loss of $29.7 million for the same period in 2016. Diluted net loss was $0.98 per share for the fourth quarter of 2017, compared to diluted net loss of $1.04 per share for the same period of 2016. For the year ended December 31, 2017, net loss was $125.6 million, or $3.17 per share, compared to a net loss of $71.2 million, or $3.00 per share, for the year ended December 31, 2016. As of December 31, 2017, there were approximately 42.5 million shares of common stock outstanding.

Conference Call
The Company will host a conference call and webcast today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. To participate by telephone, please dial 800-281-7973 (Domestic) or 323-794-2093 (International). The conference ID number is 3750290. 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 antibacterial treatments for MDR gram-negative infections. Achaogen is developing plazomicin, its lead product candidate, for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae. The Food and Drug Administration has granted plazomicin Breakthrough Therapy designation for the treatment of bloodstream infections caused by certain Enterobacteriaceae in patients who have limited or no alternative treatment options. Achaogen's plazomicin program has been 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. The Company's second product candidate C-Scape, an orally-administered beta-lactam/beta-lactamase inhibitor combination, is funded in part with Federal funds from BARDA, Office of the Assistant Secretary for Preparedness and Response, Office of the Secretary, U.S. Department of Health and Human Services, under Contract No. HHSO100201700021C. Achaogen has other programs in early and late preclinical stages focused on other MDR gram-negative infections and additional disease areas. All product candidates, including plazomicin, 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 and other product candidates, 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 uncertainties of having an NDA accepted by the FDA, the risks and uncertainties of the regulatory approval process; the risks and uncertainties of product sales and effectiveness; Achaogen's reliance on third-party contract manufacturing organizations for manufacture and supply, including sources of certain raw materials; 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 Annual Report on Form 10-K filed on February 27, 2018. 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. (NASDAQ:AKAO)

Investor Contact:
Ashley R. Robinson
LifeSci Partners, LLC
arr@lifesciadvisors.com

Media Contact:
Denise T. Powell
Red House Consulting, LLC
dpowell@achaogen.com

        
Achaogen, Inc.
Condensed Consolidated Statements of Operations
(in thousands except share and per share data)
 
        
 Three Months Ended Twelve Months Ended
 December 31, December 31,
  2017   2016   2017   2016 
Contract revenue$1,869  $10,734  $11,175  $41,773 
Operating expenses               
Research and development 29,485   17,862   95,598   73,999 
General and administrative 14,488   4,934   41,903   17,122 
Total operating expenses 43,973   22,796   137,501   91,121 
Loss from operations (42,104)  (12,062)  (126,326)  (49,348)
Interest expense (685)  (765)  (2,855)  (2,320)
Change in warrant and derivative liabilities 5,885   (16,978)  1,928   (19,859)
Other income, net 522   81   1,635   300 
Net loss$(36,382) $(29,724) $(125,618) $(71,227)
Net loss per common share:       
Basic$(0.86) $(1.04) $(3.17) $(3.00)
Diluted$(0.98) $(1.04) $(3.17) $(3.00)
Weighted-average shares used to compute net loss per common share               
Basic 42,422,592   28,653,045   39,645,635   23,707,063 
Diluted 43,257,602   28,653,045   39,645,635   23,707,063 
                
                

 

  
Achaogen, Inc. 
Condensed Consolidated Balance Sheets 
(in thousands) 
  
  December 31,
2017
 December 31,
2016
 
      
Assets     
Current assets:     
Cash and cash equivalents $145,219 $118,964 
Short-term investments  19,572  26,912 
Contracts receivable  1,357  12,151 
Prepaids and other current assets  6,367  2,189 
Restricted cash  5,891  127 
Total current assets  178,406  160,343 
Property and equipment, net  14,810  3,261 
Restricted cash  3,855  250 
Deposit and other assets    71 
Total assets $197,071 $163,925 
Liabilities, contingently redeemable common stock and stockholders' equity     
Current liabilities:     
Accounts payable $6,862 $5,739 
Accrued liabilities  15,441  9,698 
Loan payable, current portion  12,500  4,167 
Deferred revenue  2,100   
Other current liabilities    104 
Total current liabilities  36,903  19,708 
Loan payable, long-term  9,457  21,110 
Warrant liability  9,774  13,874 
Derivative liability  686  602 
Deferred rent  8,289  1,896 
Total liabilities  65,109  57,190 
      
Commitments and contingencies     
      
Contingently redeemable common stock  10,000   
Stockholders' equity  121,962  106,735 
Total liabilities, contingently redeemable common stock and stockholders' equity $197,071 $163,925