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 March 31, 2017.
“In the past quarter, we completed enrollment in
the dose escalation portion of the Phase 1/2 clinical trial for our
XLRS product candidate and are scheduling patients for enrollment
in XLRS as well as for ACHMB3 and ACHMA3 Phase 1/2 clinical
trials,” said Sue Washer, President and CEO of AGTC. “We are also
looking forward to filing the IND for our XLRP program later in
2017 and continue to advance our preclinical programs in these
potentially transformative therapies.”
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 pipeline includes ophthalmology programs
in X-linked retinoschisis (XLRS), X-linked retinitis pigmentosa
(XLRP), achromatopsia (ACHM) caused by mutations in the CNGB3 and
CNGA3 genes, wet age-related macular degeneration and an
optogenetics program.
Recent Highlights
- The company is scheduling patients for enrollment in the
expansion group of the Phase 1/2 clinical trial for its XLRS
product candidate at the highest of the three dose levels tested to
date.
- AGTC is scheduling patients for enrollment in both its ACHMB3
and ACHMA3 Phase 1/2 clinical trials.
- The company and Bionic Sight are preparing for a pre-IND
meeting with the FDA to discuss the IND-enabling studies for an
optogenetic product candidate for patients with advanced retinal
disease.
- AGTC continues to progress on its initiative in capsid and
promoter selection, assay development and process development,
keeping the company at the forefront of AAV technology. Testing in
non-human primates comparing novel capsids to naturally occurring
capsids is ongoing and preliminary cell culture testing of novel
synthetic promoters is demonstrating promising results.
- AGTC was awarded U.S. patent 9,534,225, entitled “Condon
optimized nucleic acid encoding a retinitis pigmentosa GTPase
regulator (RPGR).” This patent adds to the intellectual property
portfolio related to the company’s XLRP product
candidate.
XLRS Phase 1/2 Clinical
Trial
AGTC is currently enrolling patients in a Phase
1/2 clinical trial for its XLRS product candidate as part of the
company’s collaboration with Biogen.
To date, the company has completed dosing in the
first three groups. The company expects to provide a data update,
across both safety and potential efficacy endpoints, for these
first 12 patients this summer.
The Data Safety and Monitoring Committee (DSMC)
met recently to review the current safety data set including the
most recent high-dose group and the Company has initiated
enrollment in the expansion group at the high dose.
The primary endpoint of this clinical trial is
safety, and available data thus far have shown that AGTC’s XLRS
product candidate has been generally well tolerated. As
previously disclosed, mild to moderate ocular inflammation occurred
in the majority of treated patients and resolved either without
treatment or after treatment with topical or oral corticosteroids.
The frequency and intensity of inflammation to date has been
similar at all three dose levels tested.
ACHM B3 Phase 1/2 Clinical
Trial
A Phase 1/2 clinical trial evaluating the
company’s ACHMB3 product candidate is enrolling. The company has
enrolled three patients in the low dose group. The company plans to
enroll two additional patients in the low dose group who will both
be treated by a surgeon who treated one of the earlier patients in
this group, such that a total of three patients will be treated by
a single surgeon.
ACHM A3 Phase 1/2 Clinical
Trial
Based on the experience with the ACHMB3 trial,
the Company plans to use a single surgeon in the near term to treat
patient in the ACHMA3 trial. Screening is on-going and the
company does not expect enrollment to be limited by enrollment of
the additional patients in the ACHMB3 trial.
Preclinical Programs
For the X-linked retinitis pigmentosa, or XLRP,
program, IND-enabling toxicology studies are underway in two
relevant disease models. After completion of these studies, the
company expects to submit an IND to the FDA in the third quarter of
2017.
In January of this year the company entered into
a collaboration agreement with Bionic Sight to develop an
optogenetic product candidate for patients with advanced retinal
disease. Through the AGTC-Bionic Sight collaboration, the companies
will seek to develop a new optogenetic therapy that leverages
AGTC’s deep experience in gene therapy and ophthalmology and Bionic
Sight’s innovative neuro-prosthetic device and algorithm for
retinal coding. The company and Bionic Sight intend to
request a pre-IND meeting with the FDA to discuss the IND-enabling
studies for this program and the expectation is that an IND will be
filed in 2018.
Financial Results for the Quarter Ended
March 31, 2017
Total revenue for the three months ended March 31, 2017 was $8.4
million compared to $12.0 million generated during the same period
in 2016. Collaboration revenue recorded during the three
months ended March 31, 2017 and 2016 resulted primarily from the
amortization of upfront fees received under our collaboration
agreement with Biogen which began in August 2015. Grant revenue
decreased $24 thousand during the three months ended March 31, 2017
compared to the same period in 2016, largely attributable to
reduced research and development activities on grant-funded
projects.
Research and development expense for the three months ended
March 31, 2017 decreased by $1.6 million to $6.3 million compared
to the same period in 2016. The period-over-period decrease was
largely driven by the reduction of licenses and related fees which
were lower during the three months ended March 31, 2017 compared to
the three months ended March 31, 2016 due to technology access fees
that were incurred in 2016 and did not recur in 2017. In addition,
outside program costs decreased during the three months ended March
31, 2017 compared to the three months ended March 31, 2016, due
largely to temporary delays encountered during the conduct of Phase
1/2 human clinical trials for our XLRS and CNGB3-related ACHM
product candidates. The impact of these decreases was partially
offset by higher employee-related costs that were driven primarily
by hiring additional employees.
General and administrative expense for the three months ended
March 31, 2017 increased by $0.5 million to $2.9 million compared
to the same period in 2016. The increase was primarily driven by
higher share-based compensation and employee-related costs which
resulted from hiring additional employees to support our continued
expansion. Nominal increases in professional fees and other
expenses were noted during the three months ended March 31, 2017
compared to the three months ended March 31, 2016.
For the three months ended March 31, 2017, the
company recorded a net loss after income taxes of $0.8 million,
compared to net income after taxes of $2.0 million for the same
period of 2016.
Financial Results for the Nine Months
Ended March 31, 2017
Total revenue for the nine months ended March 31, 2017 was $31.1
million compared to $35.2 million generated during the same period
in 2016. Collaboration revenue recorded during the nine
months ended March 31, 2017 and 2016 resulted primarily from the
amortization of upfront fees received under our collaboration
agreement with Biogen which began in August 2015. Grant revenue
decreased $0.4 million during the nine months ended March 31, 2017
compared to same period in 2016, largely attributable to reduced
research and development activities on grant-funded projects.
Research and development expense for the nine months ended March
31, 2017 decreased by $14.2 million to $17.9 million compared to
the same period in 2016. The decrease was largely driven by
the impact of collaboration-related costs and license fees that
were incurred in 2016 as a result of our entry into and receipt of
fees and payments under the collaboration agreement with Biogen and
which did not recur in 2017. Also, licenses and related fees
decreased during the nine months ended March 31, 2017 compared to
the nine months ended March 31, 2016 due to technology access fees
that were incurred in 2016 and did not recur in 2017. In addition,
outside program costs decreased in 2017 compared to 2016 due
largely to temporary delays encountered during the conduct of Phase
1/2 human clinical trials for our XLRS and CNGB3-related ACHM
product candidates. The impact of these decreases was
partially offset by higher employee-related and share-based
compensation expenses that were driven primarily by hiring
additional employees and the incremental impact of new share-based
incentives awarded in 2017, as well as higher laboratory supplies
and other costs during 2017, when compared to 2016.
General and administrative expense for the nine months ended
March 31, 2017 increased by $0.8 million to $8.5 million compared
to the same period in 2016. The increase was primarily driven
by higher employee-related and share-based compensation costs which
resulted from hiring additional employees to support our continued
expansion, partially offset by lower legal and professional fees
and other expenses. The higher legal and professional fees incurred
in 2016 were largely attributable to professional consultations
associated with the negotiation and entry into our collaboration
with Biogen.
For the nine months ended March 31, 2017, the company recorded
net income after income taxes of $4.9 million, compared to a net
loss after income taxes of $4.1 million in the same period of
2016.
As of March 31, 2017, the company’s cash, cash equivalents, and
investments amounted to $148.7 million. The company believes
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 and currently planned
discovery programs for at least the next two years.
Conference Call and Webcast
AGTC will host a conference call and webcast to
discuss financial results for the third fiscal quarter ended March
31, 2017 today at 4:30pm ET. To access the call, dial
866-565-7742 (US) or 614-999-1914 (outside of the US). The passcode
is 14485210. 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 treatments designed to
transform the lives of patients with severe diseases, with an
initial focus in ophthalmology. AGTC's product pipeline includes
ophthalmology programs in X-linked retinoschisis (XLRS), X-linked
retinitis pigmentosa (XLRP), both partnered with Biogen,
achromatopsia caused by mutations in the CNGB3 and CNGA3 genes, wet
age-related macular degeneration, and our collaborative
optogenetics program with Bionic Sight. AGTC’s non-ophthalmology
programs include its adrenoleukodystrophy program, also partnered
with Biogen, and its otology research program. The otology programs
are in pre-clinical development and the company expects to advance
several otology product candidates into clinical development in 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 that it
believes are clinically feasible and present commercial
opportunities. 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 treatments.
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)
Achromatopsia 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 achromatopsia,
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.
Forward-looking statements include information concerning possible
or assumed future results of operations, business strategies and
operations, preclinical and clinical product development and
regulatory progress, potential growth opportunities, potential
market opportunities and the effects of competition.
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. Risks and uncertainties that
may cause actual results to differ materially include, among
others: no gene therapy products have been approved in the
United States and only two such products have been approved in
Europe; AGTC cannot predict when or if it will obtain regulatory
approval to commercialize a product candidate; uncertainty inherent
in the regulatory review process; risks and uncertainties
associated with drug development and commercialization; factors
that could cause actual results to differ materially from those
described in the forward-looking statements are set forth under the
heading "Risk Factors" in the company's Annual Report on Form 10-K
for the fiscal year ended June 30, 2016, as amended and 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, we assume 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 |
CONDENSED BALANCE SHEETS |
(Unaudited) |
|
|
|
March 31, |
|
|
June 30, |
In
thousands, except per share data |
|
2017 |
|
|
2016 |
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
35,500 |
|
|
$ |
28,868 |
|
Investments |
|
|
96,228 |
|
|
|
69,664 |
|
Grants
receivable |
|
|
169 |
|
|
|
954 |
|
Prepaid
and other current assets |
|
|
3,797 |
|
|
|
3,089 |
|
Total
current assets |
|
|
135,694 |
|
|
|
102,575 |
|
Investments |
|
|
16,995 |
|
|
|
74,183 |
|
Property and equipment,
net |
|
|
2,720 |
|
|
|
2,627 |
|
Intangible assets,
net |
|
|
1,264 |
|
|
|
1,321 |
|
Other assets |
|
|
2,107 |
|
|
|
91 |
|
Total
assets |
|
$ |
158,780 |
|
|
$ |
180,797 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
817 |
|
|
$ |
1,331 |
|
Accrued
and other liabilities |
|
|
6,372 |
|
|
|
6,514 |
|
Deferred
revenue |
|
|
24,818 |
|
|
|
46,898 |
|
Total
current liabilities |
|
|
32,007 |
|
|
|
54,743 |
|
Deferred revenue, net
of current portion |
|
|
8,411 |
|
|
|
16,766 |
|
Total
liabilities |
|
|
40,418 |
|
|
|
71,509 |
|
Stockholders'
equity: |
|
|
|
|
|
|
|
|
Common
stock—par value $.001 per share; shares authorized: 150,000
at March 31, 2017 and June 30, 2016; shares issued and
outstanding: 18,084 and 18,077, respectively, at
March 31, 2017; shares issued outstanding: 18,053 and
18,048, respectively, at June 30, 2016. |
|
|
18 |
|
|
|
18 |
|
Additional paid-in capital |
|
|
203,492 |
|
|
|
199,303 |
|
Accumulated deficit |
|
|
(85,148 |
) |
|
|
(90,033 |
) |
Total
stockholders' equity |
|
|
118,362 |
|
|
|
109,288 |
|
Total
liabilities and stockholders' equity |
|
$ |
158,780 |
|
|
$ |
180,797 |
|
APPLIED GENETIC TECHNOLOGIES
CORPORATION |
|
CONDENSED STATEMENTS OF
OPERATIONS |
|
(Unaudited) |
|
|
|
|
|
For the Three Months
Ended |
|
|
For the Nine
MonthsEnded |
|
March 31, |
March 31, |
In
thousands, except per share amounts |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
8,297 |
|
|
$ |
11,882 |
|
|
$ |
30,959 |
|
|
$ |
34,717 |
|
Grant and
other revenue |
|
|
91 |
|
|
|
115 |
|
|
|
169 |
|
|
|
531 |
|
Total
revenue |
|
|
8,388 |
|
|
|
11,997 |
|
|
|
31,128 |
|
|
|
35,248 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
6,303 |
|
|
|
7,868 |
|
|
|
17,916 |
|
|
|
32,108 |
|
General
and administrative and other |
|
|
2,921 |
|
|
|
2,362 |
|
|
|
8,507 |
|
|
|
7,716 |
|
Total
operating expenses |
|
|
9,224 |
|
|
|
10,230 |
|
|
|
26,423 |
|
|
|
39,824 |
|
(Loss)
income from operations |
|
|
(836 |
) |
|
|
1,767 |
|
|
|
4,705 |
|
|
|
(4,576 |
) |
Other
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income, net |
|
|
236 |
|
|
|
202 |
|
|
|
700 |
|
|
|
467 |
|
Total
other income, net |
|
|
236 |
|
|
|
202 |
|
|
|
700 |
|
|
|
467 |
|
Provision
for income taxes |
|
|
221 |
|
|
|
— |
|
|
|
519 |
|
|
|
— |
|
Net
(loss) income |
|
$ |
(821 |
) |
|
$ |
1,969 |
|
|
$ |
4,886 |
|
|
$ |
(4,109 |
) |
Net (loss)
income per share, basic and diluted |
|
$ |
(0.05 |
) |
|
$ |
0.11 |
|
|
$ |
0.27 |
|
|
$ |
(0.23 |
) |
Weighted
average shares outstanding - basic |
|
|
18,081 |
|
|
|
18,033 |
|
|
|
18,068 |
|
|
|
17,735 |
|
Weighted
average shares outstanding - diluted |
|
|
18,081 |
|
|
|
18,472 |
|
|
|
18,408 |
|
|
|
17,735 |
|
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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