SOUTH SAN FRANCISCO, Calif., Nov. 10, 2014 (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 ended September 30, 2014.
A key highlight for the third quarter was the enrollment of the first patients into the CARE (Combating Antibiotic Resistant Enterobacteriaceae) pivotal Phase 3 clinical trial of plazomicin, the Company's lead product candidate for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE). In conjunction with this milestone, the Company is pleased to report that a high proportion of sites in the US and Europe are now activated, with Latin American sites opening in the fourth quarter of 2014, and all sites active by the end of the first quarter of 2015. Enrollment in the Phase 3 clinical trial of plazomicin has been slower than anticipated and the Company continues to evaluate and implement strategies to improve patient recruitment.
The Company has initiated discussions with the US Food and Drug Administration (FDA) and the European Medicines Agency regarding additional clinical trials that could support regulatory filings for plazomicin. The Company plans to provide an update on the development plan in the first quarter of 2015.
Throughout the quarter, the Company continued to leverage its expertise and leadership in antibacterial research and development to advance its discovery-stage programs, furthering its LpxC inhibitor and therapeutic antibody programs, which target MDR gram-negative bacteria including P. aeruginosa and A. baumannii.
The importance of plazomicin, the Achaogen product candidate pipeline, and the need to combat MDR infections were highlighted when the Company's Chief Executive Officer, Dr. Kenneth Hillan, MB, ChB, was invited to testify in front of the US House of Representatives Energy and Commerce Committee, Subcommittee on Health. Dr. Hillan, along with other invitees, including Dr. Janet Woodcock, MD, Director of the Center for Drug Evaluation and Research at the FDA, were asked to address 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. Dr. Hillan's testimony coincided with both an executive order signed by President Obama which outlines our national strategy for combating antibiotic-resistant bacteria, and the release of a report by the President's Council of Advisors on Science and Technology which describes core activities the federal government should undertake to address this critical public health threat.
"We are pleased with dosing the first patients in plazomicin's Phase 3 trial during the quarter and are making headway in understanding barriers to enrollment. Our pre-clinical research programs are advancing on schedule, and the opportunity to testify along with Dr. Woodcock in front of Congress was an extraordinary platform to advocate for legislation that will facilitate the development and commercialization of potentially life-saving antibiotics, such as plazomicin, for the treatment of MDR gram-negative infections," commented Dr. Hillan.
Summary Financial Results
Cash, cash equivalents and short-term investments totaled $72.0 million at September 30, 2014 compared to $74.5 million at June 30, 2014, decreasing as a result of operating losses.
Revenue totaled $4.5 million for the third quarter of 2014 compared to $4.3 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. Research and development (R&D) expenses totaled $10.7 million for the third quarter of 2014 compared to $5.1 million for the comparable quarter of 2013. Revenue under government contracts increased due to increased spending on Achaogen's Phase 3 trial of plazomicin. R&D expenses increased primarily due to accrual of a $4.0 million development milestone license fee due to Isis Pharmaceuticals upon dosing the first patient in the Company's Phase 3 trial of plazomicin. This $4.0 million milestone fee was paid in October.
General and administrative expenses increased to $2.2 million for the third quarter of 2014 compared to $1.5 million for the comparable quarter of 2013, primarily due to additional costs associated with becoming a public company.
Net loss totaled $8.3 million for the third quarter of 2014 compared to a net loss of $2.6 million for the comparable quarter of 2013.
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 CRE. Through the Special Protocol Assessment procedure, the FDA has agreed that the design and planned analyses of Achaogen's single pivotal Phase 3 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 (BARDA). 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 completion of its Phase 3 trial for plazomicin, Achaogen's expectation to provide an update on the development plan in the first quarter of 2015, the ability to activate all clinical trial sites by the first quarter of 2015, 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 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 Form 10-Q for the fiscal quarter ended September 30, 2014, filed with the Securities and Exchange Commission on November 10, 2014. 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, Inc. | ||||
| Condensed Consolidated Statements of Operations | ||||
| (in thousands except share and per share data) | ||||
| (Unaudited) | ||||
| Three Months Ended Sept 30, | Nine Months Ended Sept 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Contract revenue | $ 4,520 | $ 4,289 | $ 15,711 | $ 12,320 |
| Operating expenses: | ||||
| Research and development | 10,678 | 5,079 | 23,478 | 16,685 |
| General and administrative | 2,175 | 1,505 | 7,138 | 5,418 |
| Total operating expenses | 12,853 | 6,584 | 30,616 | 22,103 |
| Loss from operations | (8,333) | (2,295) | (14,905) | (9,783) |
| Interest expense | -- | (271) | (397) | (1,104) |
| Other income (expense), net | 21 | 3 | (20) | 261 |
| Net loss | $ (8,312) | $ (2,563) | $ (15,322) | $ (10,626) |
| Basic and diluted net loss per common share | $ (0.47) | $ (6.52) | $ (1.18) | $ (27.55) |
| Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share | 17,711,483 | 392,844 | 13,005,058 | 385,762 |
| Achaogen, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands) | ||
| September 30, | December 31, | |
| 2014 | 2013 | |
| (Unaudited) | ||
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 46,932 | $ 10,738 |
| Short-term investments | 25,098 | -- |
| Contracts receivable | 3,818 | 7,230 |
| Prepaids and other current assets | 727 | 1,873 |
| Total current assets | 76,575 | 19,841 |
| Property and equipment, net | 662 | 743 |
| Restricted cash | 127 | 127 |
| Deposit and other assets | 37 | 47 |
| Total assets | $ 77,401 | $ 20,758 |
| Liabilities, convertible preferred stock, and stockholders' equity (deficit) | ||
| Current liabilities: | ||
| Accounts payable | $ 6,221 | $ 2,923 |
| Accrued liabilities | 2,677 | 3,004 |
| Notes payable, current portion | -- | 4,989 |
| Other current liabilities | 113 | 73 |
| Total current liabilities | 9,011 | 10,989 |
| Deferred rent | 226 | 125 |
| Notes payable, noncurrent portion | -- | 1,698 |
| Other long-term liabilities | -- | 244 |
| Total liabilities | 9,237 | 13,056 |
| Convertible preferred stock | -- | 132,278 |
| Stockholders' equity (deficit) | 68,164 | (124,576) |
| Total liabilities, convertible preferred stock, and stockholders' equity (deficit) | $ 77,401 | $ 20,758 |