SOUTH SAN FRANCISCO, Calif., Aug. 10, 2015 (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 second quarter ended June 30, 2015.
"I am pleased with the progress achieved during the quarter across clinical and corporate development fronts. The Company is focused on advancing the Phase 3 cUTI and CARE studies while continuing our engagement with the infectious disease community on important policy issues," commented Dr. Kenneth Hillan, Achaogen's President and Chief Executive Officer.
Achaogen made significant strides towards initiation of its Phase 3 study in patients with complicated urinary tract infections (cUTI). The study expands the market opportunity for Achaogen's lead compound, plazomicin, to include the population of patients with cUTI infections where treatment options are limited. The trial is expected to commence in Q4 2015 with top-line results and an NDA submission expected in the second half of 2017.
During the second quarter the Company made significant progress in implementing the previously announced amendment to the company's Phase 3 study titled CARE (Combating Antibiotic Resistant Enterobacteriaceae). The study evaluates plazomicin in the treatment of patients with bloodstream infections (BSI) and pneumonia due to carbapenem-resistant Enterobacteriaceae (CRE). The amendment is intended to improve patient enrollment in the study and the Company's goal is to complete the study and submit a supplemental NDA during the second half of 2018.
Another important achievement since the end of the first quarter is that the Company recently entered into a loan agreement with Solar Capital Ltd., which provides debt financing of up to $25 million. In addition, the Company reached a settlement of its claim with the Defense Threat Reduction Agency (DTRA), a division of the US Department of Defense, for $7.1 million which was received in the second quarter.
In July, the Company was awarded a contract for up to $4.5 million over three years from the National Institute of Allergy and Infectious Diseases (NIAID), a division of the National Institutes of Health (NIH). This award will specifically fund Achaogen's ongoing research focused on the discovery and development of LpxC inhibitors, which are novel small molecule agents, for the treatment of gram-negative bacterial infections, including those resistant to currently available antibiotics.
Achaogen's leadership in the infectious disease community was further highlighted by Dr. Hillan's participation in two key events focused on incentivizing antibiotic development. He was a panelist in a Super Session at the 2015 BIO International Convention titled "Investment Incentives to Combat Antimicrobial Resistance (AMR)" that focused on the numerous global initiatives that intend to address the public health crisis caused by the lack of investment in novel antibacterial products by industry. Dr. Hillan also joined members of Congress, as well as leaders from government funding agencies and the White House, at the Antimicrobial Innovation Alliance (AIA) Summit titled "Stimulating the Antimicrobial Pipeline: A Global Perspective", where he presented an industry perspective on changes that would boost research, development, and approval of new antimicrobial products.
A significant piece of federal legislation, the 21st Century Cures Act, which aims to expedite the development and regulatory approval of breakthroughs in biomedical research, was passed by the U.S. House of Representatives on July 10th. Key sections of this legislation support the development and reimbursement of new antibacterials targeting drug-resistant bacterial infections. Included in the bill is the DISARM Act (Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms), which would enhance Medicare reimbursement of qualifying antimicrobial products in the hospital setting, providing a potential incentive for manufacturers to develop new antibiotics. As noted by Dr. Hillan, "the inclusion of DISARM represents an important first step towards alleviating one of the hurdles impacting the potential market opportunity for new antibiotics."
On the corporate front, Achaogen announced the appointment of Mr. Greg Stea to its Board of Directors. Mr. Stea has extensive experience building successful antibacterial commercial capabilities and recently retired from Cubist Pharmaceuticals where he served as Senior Vice President of Commercial Operations for the last six years.
Summary Financial Results for the Second Quarter Ended June 30, 2015
Cash, cash equivalents and short-term investments totaled $61.3 million at June 30, 2015 compared to $61.6 million at March 31, 2015, decreasing as a result of operating losses offset by the receipt of $7.1 million from a settlement with DTRA.
Revenue totaled $12.0 million for the second quarter of 2015 compared to $5.2 million for the comparable quarter of 2014. Achaogen derived all of its revenue from funding provided under U.S. government contracts in connection with the development of product candidates. Revenue under government contracts increased due to $7.1 million received by the Company as settlement of its claim with DTRA related to a research and development contract.
Research and development (R&D) expenses totaled $10.1 million for the second quarter of 2015 compared to $6.2 million for the comparable quarter of 2014. Increased costs were primarily attributable to the start-up of the Phase 3 cUTI study of plazomicin, increased activities for research programs other than plazomicin, and higher personnel-related costs.
General and administrative expenses increased to $2.9 million for the second quarter of 2015 compared to $2.3 million for the comparable quarter of 2014. Increased costs were primarily attributable to higher personnel-related costs and increased costs associated with becoming a public company.
Net loss totaled $0.9 million for the second quarter of 2015 compared to a net loss of $3.6 million for the comparable quarter of 2014.
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 lung, bloodstream, and urinary tract infections due to Enterobacteriaceae, including CRE. Achaogen's plazomicin program is funded in part with a contract from the Biomedical Advanced Research and Development Authority. 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. 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 Achaogen's expectations regarding the enrollment and success of its proposed Phase 3 cUTI trial and its ongoing Phase 3 CARE trial, the timing for completion of Achaogen's Phase 3 trials and the development of Achaogen's LpxC inhibitor research and development program. 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 proposed Phase 3 cUTI trial and the ongoing 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; 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 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 the Biomedical Advanced Research and Development Authority 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 quarterly period ended June 30, 2015 and its Annual Report on Form 10-K for the fiscal year ended December 31, 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 June 30, | Six Months Ended June 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Contract revenue | $ 12,041 | $ 5,203 | $ 16,921 | $ 11,191 |
| Operating expenses: | ||||
| Research and development | 10,088 | 6,195 | 17,967 | 12,800 |
| General and administrative | 2,882 | 2,346 | 6,113 | 4,963 |
| Total operating expenses | 12,970 | 8,541 | 24,080 | 17,763 |
| Loss from operations | (929) | (3,338) | (7,159) | (6,572) |
| Interest expense | -- | (217) | -- | (397) |
| Other income (expense), net | 43 | -- | 94 | (41) |
| Net loss | $ (886) | $ (3,555) | $ (7,065) | $ (7,010) |
| Basic and diluted net loss per common share | $ (0.05) | $ (0.20) | $ (0.39) | $ (0.66) |
| Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share | 18,070,045 | 17,690,951 | 18,034,416 | 10,612,843 |
| Achaogen, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands) | ||
| June 30, | December 31, | |
| 2015 | 2014 | |
| (unaudited) | ||
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 39,548 | $ 18,881 |
| Short-term investments | 21,720 | 44,798 |
| Contracts receivable | 4,489 | 5,234 |
| Prepaids and other current assets | 854 | 520 |
| Total current assets | 66,611 | 69,433 |
| Property and equipment, net | 902 | 725 |
| Restricted cash | 127 | 127 |
| Deposit and other assets | 64 | 37 |
| Total assets | $ 67,704 | $ 70,322 |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 3,988 | $ 2,122 |
| Accrued liabilities | 3,189 | 3,266 |
| Other current liabilities | 147 | 128 |
| Total current liabilities | 7,324 | 5,516 |
| Deferred rent | 123 | 193 |
| Total liabilities | 7,447 | 5,709 |
| Stockholders' equity | 60,257 | 64,613 |
| Total liabilities and stockholders' equity | $ 67,704 | $ 70,322 |