Applied Genetic Technologies Corporation (NASDAQ:AGTC), a
biotechnology company conducting human clinical trials of
adeno-associated virus (AAV)-based gene therapies for the treatment
of rare diseases, today announced financial results for the quarter
ended June 30, 2016.
“Over the past year we’ve continued to make
progress across our clinical programs and have remained focused on
advancing novel gene-based therapies to improve the lives of
patients affected by rare inherited diseases,” said Sue Washer,
President and CEO of AGTC. “We are continuing to advance our lead
product candidates for X-linked retinoschisis and achromatopsia,
serious ocular indications that are caused by mutations in single
genes that significantly affect visual function and currently lack
effective medical treatments.”
Recent Highlights
- In June, the company announced that the European Commission
(EC) granted an orphan medicinal product designation to its
investigational gene therapy product candidate for the treatment of
X-linked retinitis pigmentosa (XLRP) caused by mutations in the
RPGR gene. The company had previously been granted orphan
drug designation from the EC and the U.S. Food and Drug
Administration (FDA) for its gene therapy product candidates for
the treatments of X-linked retinoschisis (XLRS) and achromatopsia
(ACHM) caused by mutations in the CNGA3 and CNGB3 genes.
- In August, the company and the Medical College of Wisconsin
announced that data from their studies evaluating the density of
cone photoreceptors in patients with ACHM caused by mutations in
the CNGB3 gene were published in Investigative Ophthalmology and
Visual Science.
- Also in August, Anne M. VanLent was appointed to the company's
Board of Directors and elected Chairperson of the Audit Committee.
Ms. VanLent is an industry veteran with more than 30 years of
financial and healthcare leadership experience.
Clinical Trial Updates
XLRS Phase 1/2 Trial
AGTC is currently enrolling patients in a Phase
1/2 clinical trial for XLRS, a program on which the company is
collaborating with Biogen. The clinical protocol anticipates
enrollment of up to 27 patients. This trial is currently
being conducted at six clinical sites that specialize in inherited
retinal diseases. As of August 2016, the company had enrolled
a total of eight patients, six of whom are in the lowest dose level
group and two are in the middle dose level group.
The primary endpoint of this trial is safety and
safety data to date has shown that the XLRS product candidate has
been generally well tolerated. AGTC has observed mild to
moderate ocular inflammation in the majority of patients which
resolved either without treatment or after treatment with topical
or oral corticosteroids.
Enrollment in the study has been slower than
planned. Delays resulted from patients not meeting one or more
eligibility criteria and as a result, the company has taken steps
to increase the number of clinical sites and to enhance its
outreach programs. The company made a protocol amendment to include
the use of prophylactic corticosteroids that required further
institutional review board approvals. Vendor errors required the
company to re-test the study agent for a process component.
Upon re-testing, the study agent met all specifications and the
company now has several backup vendors as well as internal testing
capabilities. The company believes it has resolved these factors in
order to meet its future enrollment goals and is executing on a
plan to complete the trial expeditiously.
The company is measuring a wide range of
secondary endpoints that might provide early indications of
potential efficacy and help to design a subsequent trial. The
company has not observed any significant improvements in secondary
endpoints in the six patients treated at the lowest dose level
group. The company does not expect to report further data on the
XLRS study this year, but intends to provide quarterly updates on
its patient enrollment.
ACHMB3 Phase 1/2 Trial
The company’s Phase 1/2 ACHM clinical trial is
being conducted at four sites that specialize in inherited retinal
diseases, and an additional site is performing advanced optical
testing on every patient. Two patients are currently enrolled
in the trial which is a lower number than the company had planned
to report on at this point in the study. The
slower-than-expected enrollment was due to vendor errors identified
during testing of the study agent, which resulted in a delay to the
initiation of the trial. As a first–in-man study, the
company’s internal and external teams are monitoring these first
two patients very carefully over time in order to meet the primary
objective of patient safety, before proceeding with further study
enrollment involving a larger number of patients. As with the
XLRS program, the company intends to provide quarterly updates on
its patient enrollment for ACHM, and will release results when it
has sufficient data to draw meaningful conclusions.
Pre-clinical programs and
research
For its ACHM CNGA3 product candidate, the
company expects to submit an Investigational New Drug application
(IND) by the end of this year. The company has completed all
of the pre-clinical IND-enabling studies, has finished producing
the study agent, and all study agent characterization tests are
on-going. Once the IND has cleared the FDA and individual
sites internal review boards, the company anticipates enrolling up
to 24 ACHM CNGA3 patients in a Phase 1/2 clinical trial. The
study design will be similar to that of the ACHM CNGB3 study.
In the XLRP program, another on which the
company is collaborating with Biogen, the company is currently
conducting IND-enabling toxicology studies. A dose range
finding study of the company’s XLRP product candidate in dogs
demonstrated expression of the RPGR protein in photoreceptors and
improvement in structural and functional parameters associated with
disease progression in this model. The company expects to
file an IND for XLRP in 2017.
The company is also developing treatments for
three additional indications, in collaboration with Biogen, which
are all in the discovery phase, and continues to evaluate other
indications in order to select those most appropriate for addition
to its longer-term product development pipeline. As an
example, in January of this year, the company announced its
research efforts in Blue Cone Monochromacy, a rare genetic disease
of the retina that can result in reduced visual acuity, impaired
color vision, photosensitivity, myopia and infantile-onset
nystagmus.
Financial Results for the Quarter Ended June 30,
2016
Total revenue for the three months ended June
30, 2016 was $12.1 million compared to $713,000 generated during
the same period in 2015. Revenue recorded during the three
months ended June 30, 2016 resulted primarily from the amortization
of upfront fees received under the company’s collaboration with
Biogen.
Research and development expense for the three
months ended June 30, 2016 increased by $701,000 to $6.8 million
compared to the same period in 2015. The year-over-year
increase was primarily a result of higher employee-related and
share-based compensation costs from the hiring of additional
employees to support the company’s increased level of research and
development activity.
General and administrative expense for the three
months ended June 30, 2016 increased by $182,000 to $2.9 million
compared to the same period in 2015. The year-over-year increase
was a result of higher employee-related costs, share-based
compensation expense, and other operating costs directly
attributable to the company’s continued expansion, partially offset
by lower legal and professional fees.
For the three months ended June 30, 2016, the
company recorded net income of $2.7 million, compared to a net loss
of $7.96 million in the same period of 2015.
Financial Results for the Fiscal Year Ended June 30,
2016
Total revenue for the fiscal year ended June 30,
2016 was $47.4 million compared to $2.4 million generated during
the same period in 2015. The increase was largely driven
by revenue generated from the collaboration with Biogen, primarily
comprised of the amortization of upfront fees and $5.0 million of
milestone revenue that was earned during the fiscal year following
achievement of an XLRS patient enrollment-based milestone under the
terms of that collaboration agreement.
Research and development expense for the fiscal
year ended June 30, 2016 increased by $20.7 million to $38.9
million compared to the same period in 2015, driven largely by the
$12.0 million of incremental costs associated with the
collaboration arrangement with Biogen. Also contributing
to the higher research and development expense were increased fees
associated with licenses and milestones that were largely driven by
new collaborative arrangements entered into with external partners,
combined with higher milestone payments to our research partners
associated with the clinical development of our product
candidates. In addition, employee-related and share-based
compensation costs also increased year-over-year due primarily to
the hiring of additional employees to support this increased level
of research and development activity and the impact of new
share-based incentives awarded during fiscal year 2016.
General and administrative expense for the
fiscal year ended June 30, 2016 increased by $1.8 million to $10.6
million compared to the same period in 2015. The
increase was primarily driven by the hiring of additional
employees, which resulted in higher share-based compensation and
other employee-related costs. Other administrative
expenses were also higher compared to 2015 due primarily to ongoing
expansion and the increasing costs of operating as a
publicly-traded company. The impact of these incremental
costs was partially offset by decreased legal and professional
fees.
During the fiscal year ended June 30, 2016, the
company reported a net loss of $1.4 million, compared to a net loss
of $24.3 million during the same period in 2015.
At June 30, 2016, the company's cash, cash
equivalents and investments amounted to $172.7 million. The
company believes that these cash, cash equivalents and investments
will be sufficient to enable it to advance planned preclinical
studies and clinical trials for its lead product candidates for at
least the next two years.
Conference Call and Webcast
AGTC will host a conference call and webcast to
discuss fourth quarter and fiscal year 2016 financial results today
at 5:00 p.m. (ET). To access the call, dial 866-565-7742 (US)
or 614-999-1914 (outside of the US). The passcode is 74653633. A
live webcast will be available in the Events and Presentations
section of AGTC’s Investor Relations site at
http://ir.agtc.com/events.cfm. Please log in approximately 10
minutes prior to the scheduled start time.
The archived webcast will be available in the
Events and Presentations section of the company’s website.
About AGTC
AGTC is a clinical-stage biotechnology company that uses its
proprietary gene therapy platform to develop products designed to
transform the lives of patients with severe diseases, with an
initial focus in ophthalmology. AGTC's lead product candidates are
designed to treat inherited orphan diseases of the eye, caused by
mutations in single genes that significantly affect visual function
and currently lack effective medical treatments.
AGTC's product pipeline includes six named ophthalmology
development programs across five targets (X-linked retinoschisis
(XLRS), X-linked retinitis pigmentosa (XLRP), achromatopsia, wet
age-related macular degeneration and blue cone monochromacy), two
non-ophthalmology programs (alpha-1 antitrypsin deficiency and
adrenoleukodystrophy) and AGTC is continuing to develop early
research studies in additional indications. The company is
also exploring genetic defects in cells in the inner ear that lead
to deafness and expects to advance several product candidates into
development within the next few years. AGTC employs a highly
targeted approach to selecting and designing its product
candidates, choosing to develop therapies for indications having
high unmet medical need, clinical feasibility and commercial
potential. AGTC has a significant intellectual property portfolio
and extensive expertise in the design of gene therapy products
including capsids, promoters and expression cassettes, as well as,
expertise in the formulation, manufacture and physical delivery of
gene therapy products.
About X-linked Retinoschisis (XLRS)
XLRS is an inherited retinal disease caused by
mutations in the RS1 gene, which encodes the retinoschisin protein.
It is characterized by abnormal splitting of the layers of the
retina, resulting in poor visual acuity in young boys, which can
progress to legal blindness in adult men.
About Achromatopsia (ACHM)
ACHM is an inherited retinal disease, which is
present from birth and is characterized by the lack of cone
photoreceptor function. The condition results in markedly reduced
visual acuity, extreme light sensitivity causing day blindness, and
complete loss of color discrimination. Best-corrected visual acuity
in persons affected by ACHM, even under subdued light conditions,
is usually about 20/200, a level at which people are considered
legally blind.
About X-linked Retinitis Pigmentosa
(XLRP)
XLRP is an inherited condition that causes boys
to develop night blindness by the time they are ten and progresses
to legal blindness by their early forties.
Forward Looking Statements
This release contains forward-looking statements
that reflect AGTC's plans, estimates, assumptions and beliefs.
These statements relate to a variety of matters, including but not
limited to, the anticipated enrollment of patients in clinical
trials, ability to control vendor errors, patient responses to our
gene therapy products, adjustment of treatment based on patient
responses and progress of research such as IND enabling studies.
Forward-looking statements include all statements that are not
historical facts and can be identified by terms such as
"anticipates," "believes," "could," "seeks," "estimates,"
"expects," "intends," "may," "plans," "potential," "predicts,"
"projects," "should," "will," "would" or similar expressions and
the negatives of those terms. Actual results could differ
materially from those discussed in the forward-looking statements,
due to a number of important factors, which include, but are not
limited to, the following: no gene therapy products have been
approved in the United States and AGTC cannot predict when or if it
will obtain regulatory approval to commercialize a product
candidate; AGTC relies on third parties to conduct research,
conduct, supervise and monitor its clinical trials and to conduct
certain aspects of its product manufacturing and protocol
development; and increased regulatory scrutiny of gene therapy and
genetic research could damage public perception of AGTC's product
candidates or adversely affect AGTC's ability to conduct its
business. Additional factors that could cause actual results to
differ materially from those described in the forward-looking
statements are set forth under the heading "Item 1A—Risk Factors"
in AGTC's Annual Report on Form 10-K for the fiscal year ended June
30, 2016, as filed with the SEC. Given these uncertainties, you
should not place undue reliance on these forward-looking
statements. Also, forward-looking statements represent management's
plans, estimates, assumptions and beliefs only as of the date of
this release. Except as required by law, AGTC assumes no obligation
to update these forward-looking statements publicly or to update
the reasons actual results could differ materially from those
anticipated in these forward-looking statements, even if new
information becomes available in the future.
Financial tables follow
APPLIED GENETIC TECHNOLOGIES
CORPORATION |
BALANCE SHEETS |
|
|
|
June 30, |
|
|
June 30, |
|
In
thousands, except per share data |
|
2016 |
|
|
2015 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
28,868 |
|
|
$ |
39,187 |
|
Investments |
|
|
69,664 |
|
|
|
22,454 |
|
Grants receivable |
|
|
954 |
|
|
|
883 |
|
Prepaid and other current
assets |
|
|
3,089 |
|
|
|
1,608 |
|
Total current assets |
|
|
102,575 |
|
|
|
64,132 |
|
Investments |
|
|
74,183 |
|
|
|
23,629 |
|
Property and equipment,
net |
|
|
2,627 |
|
|
|
478 |
|
Intangible assets,
net |
|
|
1,321 |
|
|
|
1,448 |
|
Grants receivable and
other assets |
|
|
91 |
|
|
|
487 |
|
Total
assets |
|
$ |
180,797 |
|
|
$ |
90,174 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,331 |
|
|
$ |
1,191 |
|
Accrued and other liabilities |
|
|
6,514 |
|
|
|
3,451 |
|
Deferred revenue |
|
|
46,898 |
|
|
|
— |
|
Total current liabilities |
|
|
54,743 |
|
|
|
4,642 |
|
Deferred revenue, net
of current portion |
|
|
16,766 |
|
|
|
— |
|
Total
liabilities |
|
|
71,509 |
|
|
|
4,642 |
|
Stockholders'
equity: |
|
|
|
|
|
|
|
|
Common stock, par value $.001 per
share, 150,000 shares authorized;18,053 and 16,491 shares issued;
18,048 and 16,476 shares outstandingat June 30, 2016 and June 30,
2015, respectively |
|
|
18 |
|
|
|
16 |
|
Additional paid-in capital |
|
|
199,303 |
|
|
|
174,168 |
|
Accumulated deficit |
|
|
(90,033 |
) |
|
|
(88,652 |
) |
Total stockholders' equity |
|
|
109,288 |
|
|
|
85,532 |
|
Total
liabilities and stockholders' equity |
|
$ |
180,797 |
|
|
$ |
90,174 |
|
APPLIED GENETIC TECHNOLOGIES
CORPORATION |
STATEMENTS OF OPERATIONS |
|
|
|
(Unaudited) |
|
|
|
|
|
|
For the Three Months EndedJune
30, |
|
|
For the Year Ended June
30, |
|
In
thousands, except per share amounts |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
|
12,034 |
|
|
|
$ |
— |
|
|
$ |
|
46,751 |
|
|
|
$ |
— |
|
Grant and other revenue |
|
|
|
79 |
|
|
|
|
713 |
|
|
|
|
610 |
|
|
|
|
2,354 |
|
Total revenue |
|
|
|
12,113 |
|
|
|
|
713 |
|
|
|
|
47,361 |
|
|
|
|
2,354 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
|
6,756 |
|
|
|
|
6,055 |
|
|
|
|
38,864 |
|
|
|
|
18,118 |
|
General and administrative |
|
|
|
2,870 |
|
|
|
|
2,688 |
|
|
|
|
10,586 |
|
|
|
|
8,768 |
|
Total operating expenses |
|
|
|
9,626 |
|
|
|
|
8,743 |
|
|
|
|
49,450 |
|
|
|
|
26,886 |
|
Income (loss)
from operations |
|
|
|
2,487 |
|
|
|
|
(8,030 |
) |
|
|
|
(2,089 |
) |
|
|
|
(24,532 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income, net |
|
|
|
244 |
|
|
|
|
69 |
|
|
|
|
711 |
|
|
|
|
216 |
|
Other Expense |
|
|
|
(3 |
) |
|
|
|
— |
|
|
|
|
(3 |
) |
|
|
|
(2 |
) |
Total other income (expense),
net |
|
|
|
241 |
|
|
|
|
69 |
|
|
|
|
708 |
|
|
|
|
214 |
|
Net income
(loss) |
|
$ |
|
2,728 |
|
|
|
$ |
(7,961 |
) |
|
$ |
|
(1,381 |
) |
|
|
$ |
(24,318 |
) |
Net loss per
share, basic and diluted |
|
$ |
|
0.15 |
|
|
|
$ |
(0.48 |
) |
|
$ |
|
(0.08 |
) |
|
|
$ |
(1.50 |
) |
Weighted
average shares outstanding - basic |
|
|
|
18,038 |
|
|
|
|
16,476 |
|
|
|
|
17,810 |
|
|
|
|
16,253 |
|
Weighted
average shares outstanding - diluted |
|
|
|
18,451 |
|
|
|
|
16,476 |
|
|
|
|
17,810 |
|
|
|
|
16,253 |
|
CONTACT:
David Carey
Lazar Partners Ltd.
T: (212) 867-1768
dcarey@lazarpartners.com
Corporate Contact:
Larry Bullock
Chief Financial Officer
Applied Genetic Technologies Corporation
T: (386) 462-2204
lbullock@agtc.com
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