Achaogen
Aug 8, 2016

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."

Recent Highlights

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.

"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.

Other Corporate Highlights — During the quarter, the Company strengthened its balance sheet and added a key hire to its leadership team.

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.

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 (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.

About Achaogen
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.

      
 Achaogen, Inc.
 Condensed Consolidated Statements of Operations
 (in thousands except share and per share data)
 (unaudited)
      
  Three Months Ended
Six Months Ended
  June 30,June 30,
   2016  2015  2016  2015 
 Contract revenue$9,144 $12,041 $14,993 $16,921 
 Operating expenses:    
 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)
      
 Interest expense (447) -  (885) - 
 Other income (expense), net (1,306) 43  (1,244) 94 
 Net loss$(18,268)$(886)$(30,465)$(7,065)
      
 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 
      

 

 Achaogen, Inc. 
 Condensed Consolidated Balance Sheets 
 (in thousands) 
     
     
  June 30,December 31, 
   2016  2015  
  (unaudited)  
 Assets   
 Current assets:   
 Cash and cash equivalents$54,649 $20,287  
 Short-term investments 15,350  38,444  
 Contracts receivable 8,652  5,039  
 Prepaids and other current assets 2,501  1,719  
 Restricted cash 127  -  
 Total current assets 81,279  65,489  
 Property and equipment, net 995  905  
 Restricted cash -  127  
 Deposit and other assets 70  342  
 Total assets$82,344 $66,863  
     
 Liabilities and stockholders' equity   
 Current liabilities:   
 Accounts payable$6,095 $3,537  
 Accrued liabilities 9,365  4,927  
 Other current liabilities 207  225  
 Total current liabilities 15,667  8,689  
     
 Loan payable, long-term 24,815  14,536  
 Warrant liability 3,937  -  
 Derivative liability 400  375  
 Other long-term liabilities 14  104  
 Total liabilities 44,833  23,704  
     
 Stockholders' equity 37,511  43,159  
 Total liabilities and stockholders' equity$82,344 $66,863  
     


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