Expands ADAPTIR Portfolio and Announces New
Bispecific Candidate; Presents Data at the 2016 PEPTALK Conference
Showcasing Advantages of the ADAPTIR™ Platform
Aptevo Therapeutics Inc. (Nasdaq:APVO), a biotechnology company
focused on developing novel oncology and hematology therapeutics,
today provided a business review and reported its financial results
for the first quarter ended March 31, 2017.
“Aptevo made important strides in early 2017 in
both our development and commercial portfolios,” said Marvin L.
White, President and Chief Executive Officer. “Most notably,
we expanded our ADAPTIR™ portfolio with the advancement of a new
immuno-oncology bispecific antibody candidate, APVO436, engineered
to simultaneously target the cell surface receptors CD123 and CD3
to promote redirected T-cell cytotoxicity (RTCC). New
preclinical data highlight the antibody-like half-life, stability
and potent activity of this molecule. The team has made
exceptional progress advancing APVO436 and other ADAPTIR candidates
and we are on track to provide additional information around our
investigational new drug (IND) strategy for these candidates later
this year.”
“Also during the first quarter, we were pleased
to announce that Aptevo had resumed commercial production of
IXINITY,” continued Mr. White. “As a result, we did not
experience a supply interruption of IXINITY as originally
anticipated. Our proactive and transparent communications
with the Hemophilia B community, and the tremendous support of
people taking IXINITY enabled us to retain over 90% of patients.
I continue to be grateful to our IXINITY family for their
patience and encouragement during the last few months. With new
IXINITY supply anticipated to be available soon, we have
aggressively resumed our new patient acquisition efforts and look
forward to returning IXINITY to its growth trajectory.”
First Quarter 2017
Highlights
- Resumed IXINITY commercial production and successfully
completed a bulk drug substance batch of IXINITY
- Reinitiated new patient acquisition efforts for IXINITY
- Expanded Aptevo’s ADAPTIR portfolio and announced the selection
of an additional RTCC ADAPTIR bispecific antibody candidate,
APVO436 – an optimized, next-generation ADAPTIR bispecific molecule
targeting the cell-surface receptor CD123, which is highly
expressed in multiple hematological malignancies
- Presented data at the 16th Annual PEPTALK conference showcasing
the advantages of Aptevo’s ADAPTIR platform, which included, the
ability to induce target-dependent RTCC; an extended half-life, and
antibody-like manufacturing yields, as well as a favorable cytokine
release profile. If these data are confirmed in clinical
studies, it could suggest the potential for an improved dosing
regimen, and increased therapeutic efficacy compared to other
bispecific strategies
- Continued enrollment in the Phase 1, continuous infusion, dose
escalation study of MOR209/ES414 – a novel bispecific antibody
being developed for the treatment of metastatic
castration-resistant prostate cancer; the ongoing Phase 1 study is
designed to evaluate the safety and tolerability of escalating
doses of MOR209/ES414
- Received a $20 million non-dilutive cash payment from Emergent
BioSolutions pursuant to a promissory note granted as part of the
spin-off of Aptevo
First Quarter 2017 Financial
Results
Cash Position: Aptevo had
cash, cash equivalents, and marketable securities as of March 31,
2017 totaling $61.3 million.
Product Sales Revenue:
Total product sales revenue was $7.4 million for the first three
months ended March 31, 2017, compared to $7.9 million for the same
period in 2016. The decrease in product sales revenue was
primarily related to revenue associated with WinRho, which
decreased by $0.9 million in the first quarter of 2017.
Cost of Product Sales:
Cost of product sales decreased by $3.0 million, or 86%, to $0.5
million for the three months ended March 31, 2017 from $3.5 million
for the three months ended March 31, 2016. This decrease was due to
a one-time, non-cash adjustment in the first quarter of 2017 in the
amount of $3.0 million relating to a settlement agreement executed
between Aptevo and CMC ICOS Biologics, Inc., in relation to certain
batches of IXINITY produced in 2015 that did not meet manufacturing
specifications. The settlement is reflected as a reduction in
Aptevo’s cost of product sales in the first quarter of 2017.
Research and Development
Expenses: Research and development expenses
decreased by $2.2 million, or 27%, to $5.9 million for the three
months ended March 31, 2017, from $8.1 million for the
corresponding period in 2016. The decrease was primarily due
to a decrease in manufacturing process development costs related to
IXINITY and the timing of certain ADAPTIR clinical trial
activities. Our principal research and development expenses
for the three months ended March 31, 2017 are summarized in the
table below.
|
|
For the Three Months Ended March
31, |
(in thousands) |
|
|
2017 |
|
|
2016 |
|
Change |
ADAPTIR related program
(1) |
|
$ |
5,711 |
|
$ |
5,267 |
|
$ |
444 |
|
IXINITY |
|
|
197 |
|
|
2,225 |
|
|
(2,028 |
) |
Other |
|
|
5 |
|
|
609 |
|
|
(604 |
) |
Total |
|
$ |
5,913 |
|
$ |
8,101 |
|
$ |
(2,188 |
) |
(1) ADAPTIR related programs also includes other non-disclosed
candidates |
|
|
|
|
|
|
|
Selling, General and Administrative
Expenses: Selling, general and administrative
expenses for the three months ended March 31, 2017 were $10.6
million, compared to $9.4 million for the same period in
2016. The increase in SG&A expenses in the first quarter
of 2017 was primarily due to increased marketing expenses,
personnel costs due to the spin-off, and consulting expenses.
Net Loss: Aptevo’s net
loss for the three months ended March 31, 2017 was $9.9 million or
($0.48) per share, compared to $12.9 million or ($0.64) per share
for the corresponding period in 2016.
Credit Agreement
Amendment: Aptevo and MidCap Financial Trust agreed
to amend a credit agreement initially executed in August
2016. The amendment (1) modifies the minimum net commercial
product revenue requirements which Aptevo is required to achieve on
a rolling twelve-month basis; (2) extends the time period through
which the Company can draw the second tranche from August 2017 to
March 2018; (3) increases the exit fee from 5.75% for repayment or
prepayment to 6.75% and; (4) permits MidCap to obtain an
affirmative lien on Aptevo’s intellectual property, upon the
earlier of (i) the Company’s draw down of the second tranche or
(ii) the Company’s cash balance descending below a minimum cash
threshold of $25 million.
Financial Statements Follow
Aptevo Therapeutics Inc. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands, except share and per share
amounts, unaudited) |
|
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
14,014 |
|
|
$ |
9,676 |
|
Restricted cash |
|
|
400 |
|
|
|
400 |
|
Short-term investments |
|
|
46,877 |
|
|
|
44,849 |
|
Accounts
receivable, net |
|
|
1,926 |
|
|
|
4,284 |
|
Inventories |
|
|
8,063 |
|
|
|
6,639 |
|
Prepaid
expenses and other current assets |
|
|
6,116 |
|
|
|
5,566 |
|
Total
current assets |
|
|
77,396 |
|
|
|
71,414 |
|
Property
and equipment, net |
|
|
6,384 |
|
|
|
5,910 |
|
Intangible assets, net |
|
|
14,013 |
|
|
|
14,534 |
|
Total
assets |
|
$ |
97,793 |
|
|
$ |
91,858 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable and other accrued liabilities |
|
$ |
8,766 |
|
|
$ |
11,489 |
|
Accrued
compensation |
|
|
2,505 |
|
|
|
4,009 |
|
Sales
rebates and discounts |
|
|
2,310 |
|
|
|
3,235 |
|
Deferred
revenue, current portion |
|
|
878 |
|
|
|
811 |
|
Total
current liabilities |
|
|
14,459 |
|
|
|
19,544 |
|
|
|
|
|
|
|
|
|
|
Deferred
revenue, net of current portion |
|
|
2,802 |
|
|
|
2,896 |
|
Long-term
debt, net |
|
|
18,435 |
|
|
|
18,383 |
|
Other
liabilities |
|
|
611 |
|
|
|
469 |
|
Total
liabilities |
|
|
36,307 |
|
|
|
41,292 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
|
|
Preferred stock: $0.001
par value; 15,000,000 shares authorized, zero shares issued or
outstanding |
|
|
— |
|
|
|
— |
|
Common stock: $0.001
par value; 500,000,000 shares authorized; 21,219,950 and 20,271,737
shares issued and outstanding at March 31, 2017 and December 31,
2016, respectively |
|
|
21 |
|
|
|
20 |
|
Additional paid-in
capital |
|
|
152,143 |
|
|
|
151,271 |
|
Accumulated other
comprehensive loss |
|
|
(41 |
) |
|
|
(33 |
) |
Contribution receivable
from former parent |
|
|
— |
|
|
|
(20,000 |
) |
Accumulated
deficit |
|
|
(90,637 |
) |
|
|
(80,692 |
) |
Total stockholders'
equity |
|
|
61,486 |
|
|
|
50,566 |
|
Total liabilities and
stockholders' equity |
|
$ |
97,793 |
|
|
$ |
91,858 |
|
Aptevo Therapeutics Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except share and per share
amounts, unaudited) |
|
|
|
For the Three Months Ended
March 31, |
|
|
|
2017 |
|
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
Product
sales |
|
$ |
7,381 |
|
|
$ |
7,948 |
|
Collaborations |
|
|
28 |
|
|
|
119 |
|
Total revenues |
|
|
7,409 |
|
|
|
8,067 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
product sales |
|
|
488 |
|
|
|
3,528 |
|
Research
and development |
|
|
5,913 |
|
|
|
8,101 |
|
Selling,
general and administrative |
|
|
10,547 |
|
|
|
9,419 |
|
Loss from
operations |
|
|
(9,539 |
) |
|
|
(12,981 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
Other
income (expense), net |
|
|
(406 |
) |
|
|
80 |
|
Total other income
(expense), net |
|
|
(406 |
) |
|
|
80 |
|
Loss before income
taxes |
|
|
(9,945 |
) |
|
|
(12,901 |
) |
Benefit from income
taxes |
|
|
— |
|
|
|
12 |
|
Net loss |
|
|
(9,945 |
) |
|
|
(12,889 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share -
basic and diluted |
|
$ |
(0.48 |
) |
|
$ |
(0.64 |
) |
Shares used to compute
net loss per share - basic and diluted |
|
|
20,757,111 |
|
|
|
20,229,849 |
|
|
About Aptevo Therapeutics Inc.
Aptevo Therapeutics Inc. is a biotechnology
company focused on novel oncology and hematology therapeutics to
meaningfully improve patients’ lives. Aptevo’s core technology is
the ADAPTIR™ (modular protein technology) platform. Aptevo has four
commercial products in the areas of hematology and infectious
diseases, as well as various investigational stage product
candidates in immuno-oncology.
Safe Harbor Statement
This press release includes forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Any statements, other than statements of
historical fact, including, without limitation, statements
regarding Aptevo’s outlook, financial performance or financial
condition, our technology and related pipeline, collaboration and
partnership opportunities, commercial portfolio, Aptevo’s future
growth rates, Aptevo’s ability to timely manufacture its products,
and any other statements containing the words “believes,”
“expects,” “anticipates,” “intends,” “plans,” “forecasts,”
“estimates,” “will” and similar expressions are forward-looking
statements. These forward-looking statements are based on Aptevo’s
current intentions, beliefs and expectations regarding future
events. Aptevo cannot guarantee that any forward-looking statement
will be accurate. Investors should realize that if underlying
assumptions prove inaccurate or unknown risks or uncertainties
materialize, actual results could differ materially from Aptevo’s
expectations. Investors are, therefore, cautioned not to place
undue reliance on any forward-looking statement. Any
forward-looking statement speaks only as of the date of this press
release, and, except as required by law, Aptevo does not undertake
to update any forward-looking statement to reflect new information,
events or circumstances.
There are a number of important factors that
could cause our actual results to differ materially from those
indicated by such forward-looking statements, including possible
negative effects on our business operations, assets or financial
results as a result of the separation; a deterioration in our
business or prospects; the ability of our contractors and suppliers
to supply product and materials; our ability and the ability of our
contractors and suppliers to maintain compliance with cGMP and
other regulatory obligations; the results of regulatory
inspections; adverse developments in our customer-base or markets
and our ability to retain patients; adverse developments in the
U.S. or global capital markets, credit markets or economies
generally; and changes in regulatory, social and political
conditions. Additional risks and factors that may affect results
are set forth in our filings with the Securities and Exchange
Commission, including Aptevo’s most recent Annual Report on Form
10-K, as filed on March 15, 2017, and our subsequent reports on
Form 10-Q and current reports on Form 8-K. The foregoing sets forth
many, but not all, of the factors that could cause actual results
to differ from our expectations in any forward-looking
statement.
Aptevo Therapeutics
Stacey Jurchison
Senior Director, Investor Relations and Corporate Communications
206-859-6628
JurchisonS@apvo.com
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