Cerecor Reports 2019 Results

Rockville, Maryland, UNITED STATES


-Company Transformed Into Orphan and Rare Disease Biotech
-Clear Corporate Strategy with New Leadership
-Significant Advancement in Pipeline and Regulatory Milestones

ROCKVILLE, Md., March 11, 2020 (GLOBE NEWSWIRE) -- Cerecor Inc. (NASDAQ: CERC), a biopharmaceutical company focused on becoming a leader in development and commercialization of treatments for rare pediatric and orphan diseases, today announced full-year results for 2019.  The Company achieved significant research, development and regulatory milestones while transforming the organization through significant business development activities.

“We believe the Company made aggressive steps to transform itself over the second half of 2019.  The first being the divestiture of the commercial pediatric portfolio to AYTU, providing near term cash flow, eliminating the debt overhang and improving the Company’s balance sheet.  The second being the merger with Aevi Genomic Medicine, which more than doubled the Company’s pipeline and refined the focus of the organization as a rare pediatric and orphan disease biotech,” said Mike Cola, Chief Executive Officer of Cerecor. “At the same time, we continued to advance our pipeline achieving numerous clinical and regulatory milestones.”

2019 Highlights

Clinical and Regulatory Highlights

  • The FDA granted Orphan Drug Designation to CERC-801, CERC-802 and CERC-803 as therapies in development for Congenital Disorders of Glycosylation (“CDGs”)
  • Received Fast Track Designation from the FDA for CERC-801 for the treatment of PGM1 Deficiency and for CERC-802 for the treatment of Mannose-Phosphate Isomerase Deficiency
  • The FDA accepted the IND application for Cerecor’s investigational drugs CERC-801 for the treatment of PGM1 Deficiency and CERC-802 for the treatment of MPI-CDG
  • Announced positive Phase I data for CERC-801 and CERC-802 in Healthy Volunteers
  • First patient enrolled into the CDG FIRST Trial; a retrospective trial looking at the natural history of the disease and the current treatment paradigm of patients with specific CDGs

Corporate and Financial Highlights

  • Announced Company headquarters move to the pharmaceutical corridor of Rockville, Maryland
  • Closed a $10 million Common Stock offering
  • The Company was added to the Russell 3000 Index®
  • Sold the pediatric portfolio and underlying commercial infrastructure to AYTU BioScience, Inc. (“AYTU”) in a deal valued in excess of $43 million and removed debt associated with Deerfield agreement on commercial assets (“Aytu Divestiture”)
  • Signed, then subsequently closed deal in February 2020, to merge with Aevi Genomic Medicine
  • Mike Cola announced as Chief Executive Officer and Garry Neil announced as Chief Medical Officer effective upon closing of the Aevi Merger 
  • Merger doubled the number of near-term clinical assets from the three CERC-800s programs to six total programs; honing the organizational strategy as a rare pediatric and orphan disease biotech
     
    • CERC-002 an anti-LIGHT MAb for Pediatric-onset Crohn’s Disease 
    • CERC-006 a dual mTor inhibitor for complex Lymphatic Malformations
    • CERC-007 an anti-IL 18 MAb for Adult-onset Still’s Disease and Multiple Myeloma
    • CERC-801 D Galactose substrate replacement therapy for PGMI-CDG
    • CERC-802 D Mannose substrate replacement therapy for MPI-CDG
    • CERC-803 L Fucose substrate replacement therapy for (LADII), also known as SLC35C1-CDG

Dr. Garry Neil, Chief Medical Officer for Cerecor commented, “We have a rich pipeline with near-term approvals possible in 2022 and/or 2023.  All of our assets have novel mechanisms of action and have the potential to be high value,  first-in-class medicines for patient populations suffering from orphan and rare diseases.  At Cerecor we are committed to developing and delivering medicines to help these underserved patient populations.”

2019 Financial Update

Cerecor significantly improved its working capital from a negative $4.3 million as of December 31, 2018 to a positive $5.6 million as of December 31, 2019, largely as a result of the Aytu Divestiture.  Additionally, the Company avoided future cash outflows by eliminating long-term debt and contingent consideration, also as a result of the  Aytu Divestiture.  Operating expenses declined largely as a result of acquired in-process research and development expense of $18.7 million recognized as part of the Ichorion acquisition in 2018, which did not repeat in 2019.  Net loss and net loss per share improved largely as a result of the decrease in operating expenses. 

Condensed Consolidated Balance Sheets

      
  December 31,  
   2019   2018  
      
 Assets(in thousands) 
 Current assets:    
 Cash and cash equivalents$3,609  $10,646  
 Accounts receivable, net 1,002   822  
 Other receivables 4,241   5,262  
 Inventory, net 21   318  
 Prepaid expenses and other current assets 707   732  
 Restricted cash, current portion 17   19  
 Investment in Aytu 7,629   -  
 Current assets of discontinued operations 498   4,133  
 Total current assets 17,724   21,932  
 Property and equipment, net 1,448   587  
 Intangibles assets, net 2,426   3,765  
 Goodwill 14,409   14,409  
 Restricted cash, net of current portion 102   82  
 Long-term assets of discontinued operations -   29,476  
 Total assets$36,109  $70,251  
 Liabilities and stockholders’ equity    
 Current liabilities:    
 Accounts payable$2,078  $1,446  
 Accrued expenses and other current liabilities 5,640   14,329  
 Income taxes payable 552   2,032  
 Contingent consideration, current portion -   860  
 Current liabilities of discontinued operations 3,891   7,550  
 Total current liabilities 12,161   26,217  
 Contingent consideration, net of current portion -   397  
 Deferred tax liability, net 86   69  
 License obligations -   1,250  
 Other long-term liabilities 1,112   385  
 Long-term liabilities of discontinued operations 1,755   21,025  
 Total liabilities 15,114   49,343  
 Stockholders’ equity:    
 Common Stock—$0.001 par value; 200,000,000 shares authorized at December 31, 2019 and 2018; 44,384,222 and 40,804,189 shares issued and outstanding at December 31, 2019 and 2018, respectively 44   41  
 Preferred Stock—$0.001 par value; 5,000,000 shares authorized at December 31, 2019 and 2018; 2,857,143 shares issued and outstanding at December 31, 2019 and 2018, respectively 3   3  
 Additional paid-in capital 135,239   119,082  
 Accumulated deficit (114,291)  (98,218) 
 Total stockholders’ equity 20,995   20,908  
 Total liabilities and stockholders’ equity$36,109  $70,251  
      
 The condensed consolidated balance sheets at December 31, 2019 and 2018 have been derived from the financial statements but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements 
  
  
  
      

Condensed Consolidated Statements of Operations

       
  Year Ended December 31,   
   2019   2018   
       
  (in thousands, except per share data)  
 Revenues     
 Product revenue, net$6,650  $6,572   
 Sales force revenue -   456   
 License and other revenue 100   -   
 Total revenues, net 6,750   7,028   
       
 Operating expenses:     
 Cost of product sales (567)  3,261   
 Research and development 11,764   5,786   
 Acquired in-process research and development -   18,724   
 General and administrative 10,124   10,511   
 Sales and marketing 1,484   545   
 Amortization expense 1,339   1,828   
 Impairment of intangible assets -   1,862   
 Change in fair value of contingent consideration (1,256)  (111)  
 Total operating expenses 22,888   42,406   
 Loss from continuing operations (16,138)  (35,378)  
 Other (expense) income:     
 Change in fair value of Investment in Aytu 54   -   
 Change in fair value of warrant liability and unit purchase option liability (4)  25   
 Other (expense) income, net (24)  13   
 Interest income, net 121   16   
 Total other income, net from continuing operations 147   54   
 Loss from continuing operations before taxes (15,991)  (35,324)  
 Income tax expense (benefit) 280   (49)  
 Loss from continuing operations$(16,271) $(35,275)  
 Income (loss) from discontinued operations, net of tax (inclusive of gain on sale) 198   (4,778)  
 Net loss$(16,073) $(40,053)  
       
 Net (loss) income per share of common stock, basic and diluted:     
 Continuing operations$(0.28) $(1.06)  
 Discontinued operations 0.00   (0.14)  
 Net loss per share of common stock, basic and diluted$(0.28) $(1.20)  
       
 Net (loss) income per share of preferred stock, basic and diluted:     
 Continuing operations$(1.42)    
 Discontinued operations 0.01     
 Net loss per share of preferred stock, basic and diluted$(1.41)    
       
 The condensed consolidated statements of operations for the years ended December 31, 2019 and 2018 have been derived from the financial statements but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. 
       

2020 Outlook

The 2020 organizational focus is driving clinical development programs towards key milestones:

  • CERC-800s (CERC-801, CERC-802 and CERC-803) anticipate initial data readout from the CDG-FIRST Trial within the 1 Half 2020
  • CERC-002 (anti-LIGHT mAb) being developed for Pediatric-onset Crohn’s Disease expects initial data readout 2 Half 2020
  • CERC-007 (anti-IL-18 mAb) being developed for auto-inflammatory diseases (AOSD, MM) is expecting initial data readout Q4 2020 to Q1 2021
  • CERC-006 (dual mTOR inhibitor) being developed for complex Lymphatic Malformations anticipates initial data readout 1 Half 2021

Actual results might vary materially, whether as a result of market conditions, or other factors, including those described in the “Risk Factors” sections of our SEC filings.

About Cerecor

Cerecor is a biopharmaceutical company focused on becoming a leader in development and commercialization of treatments for rare pediatric and orphan diseases. The Company is advancing an emerging clinical-stage pipeline of innovative therapies.  The Company’s pediatric rare disease pipeline is led by CERC-801, CERC-802 and CERC-803 (“CERC-800 programs”), which are therapies for inborn errors of metabolism, specifically disorders known as Congenital Disorders of Glycosylation (”CDGs”).  The FDA granted Rare Pediatric Disease Designation and Orphan Drug Designation (“ODD”) to all three CERC-800 programs, thus potentially qualifying the Company to receive a Priority Review Voucher (“PRV”) upon approval of a new drug application (“NDA”).  The Company is also developing CERC-002, CERC-006 and CERC-007. CERC-007 is an anti-IL-18 monoclonal antibody being developed for the treatment of autoimmune inflammatory diseases such as Adult Onset Stills Disease (“AOSD”) and Multiple Myeloma (“MM”).  CERC-006 is a dual mTOR inhibitor being developed for the treatment of  complex Lymphatic Malformations. CERC-002 is an anti-LIGHT monoclonal antibody being developed for the treatment of Pediatric-onset Crohn’s Disease. 

For more information about Cerecor, please visit www.cerecor.com.

Forward-Looking Statements

This press release may include forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond Cerecor’s control), which could cause actual results to differ from the forward-looking statements. Such statements may include, without limitation, statements with respect to Cerecor’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “will,” “could,” “would,” “should,” “continue,” “seeks,” “aims,” “predicts,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential,” or similar expressions (including their use in the negative), or by discussions of future matters such as: the integration of the companies and their personnel; the development of product candidates or products; timing and success of trial results and regulatory review; potential attributes and benefits of product candidates; the expansion of Cerecor's drug portfolio; strategic alternatives for the neurological assets and Millipred; and other statements that are not historical. These statements are based upon the current beliefs and expectations of Cerecor’s management but are subject to significant risks and uncertainties, including: risks related to integration of the combined company; drug development costs, timing and other risks, including reliance on investigators and enrollment of patients in clinical trials; regulatory risks; reliance on and the need to attract, integrate and retain key personnel; Cerecor's cash position and the need for it to raise additional capital; risks related to potential strategic alternatives for the Company's neurology assets and Millipred; and those other risks detailed in Cerecor’s filings with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements. Except as required by applicable law, Cerecor expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Cerecor’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

For media and investor inquiries

James Harrell,
Investor Relations
Chief Commercial Officer
Cerecor Inc.
jharrell@cerecor.com
623.439.2220 office