Versartis Reports Fourth Quarter and Full Year 2017 Financial Results and Provides Corporate Update
March 01 2018 - 4:05PM
Versartis, Inc. (NASDAQ:VSAR), an endocrine-focused
biopharmaceutical company, today announced financial results for
the fourth quarter and full year ended December 31, 2017, and
provided a corporate update.
"Since October, we have restructured our company to
significantly reduce our costs and preserve cash while working
diligently to evaluate opportunities to leverage our expertise and
resources and create value for shareholders,” said Jay Shepard,
President and CEO of Versartis, Inc. “While we cannot make any
assurances that a strategic transaction will be recommended by the
Board, we are encouraged by the interest and opportunities we have
seen and we are now at an advanced stage in our review process.
Our goal remains to maximize value for all Versartis
shareholders. We sincerely appreciate the patience
shareholders have shown as we evaluate paths forward and we hope to
provide a further update in the coming weeks.”
Corporate Update
- Based on a full review of the data from the Phase 3 VELOCITY
trial, feedback from the FDA during the development of somavaratan,
and an objective assessment by external regulatory experts, the
company believes it could not successfully file for approval based
on the existing dataset.
- All current clinical trials of somavaratan have been concluded
and the U.S. Investigational New Drug Application (IND) and
equivalent filings in other countries have been withdrawn.
Additionally, in January 2018, Teijin Limited (Teijin)
terminated its license agreement for somavaratan in Japan following
its evaluation of the VELOCITY trial results.
- The investment and delay in time-to-market that further
development would require significantly impact the business case
for somavaratan, given the potential that one or more long-acting
growth hormone products may already be commercialized for pediatric
growth hormone deficiency during that time.
- The company is focused on evaluating strategic opportunities to
leverage its expertise and resources to create value for
shareholders. Cowen is assisting the company in reviewing possible
transactions, including strategic combinations and opportunities to
diversify the Versartis pipeline.
Fourth Quarter and Full Year 2017 Financial
ResultsFor the fourth quarter ended December 31, 2017,
Versartis reported a net income of approximately $31.1 million, or
$0.87 per share, basic and diluted, compared to a net loss for the
fourth quarter ended December 31, 2016 of $22.1 million, or $0.64
per share, basic and diluted.
Contract revenue for the quarter and year ended December 31,
2017 was $40.0 million, reflecting the termination of the company’s
exclusive license agreement with Teijin, including our related
obligations to Teijin.
Total operating expenses for the quarter ended December 31, 2017
were $8.9 million compared to $22.5 million for the quarter ended
December 31, 2016. Research and development (R&D) expenses for
the quarter ended December 31, 2017 were $1.3 million, compared to
$16.7 million for the quarter ended December 31, 2016. The decrease
in R&D expenses was primarily due to the termination of
clinical and manufacturing related contracts that supported the
company’s Phase 3 clinical trials for somavaratan. These cost
savings were partially offset by severance expenses associated with
our reduction in workforce, as a result of the failure of the Phase
3 VELOCITY trial to meet its primary endpoint.
General and administrative (G&A) expenses were $7.6 million
for the quarter ended December 31, 2017, compared to $5.8 million
for the quarter ended December 31, 2016. The increase in G&A
expenses was primarily due to severance expenses in connection with
our reduction in workforce.
Total operating expenses for the year ended December 31, 2017
were $124.5 million compared to $96.3 million for the year ended
December 31, 2016. R&D expenses for the year ended December 31,
2017 were $94.6 million, compared to $72.0 million for the year
ended December 31, 2016. The increase in R&D expenses was
primarily due to clinical and manufacturing related costs to
support the global VELOCITY pediatric trial and the Phase 2/3 trial
of somavaratan in pediatric patients in Japan. G&A
expenses were $29.9 million for the year ended December 31, 2017,
compared to $24.3 million for the year ended December 31, 2016. The
increase in G&A expenses was primarily due to additional
payroll and fees related to consulting and professional services to
support our overall growth prior to the failure of the Phase 3
VELOCITY trial to meet its primary endpoint.
Total operating expenses for the quarter ended December 31, 2017
include non-cash stock-based compensation expense of $2.2 million
compared to $2.9 million of non-cash stock-based compensation
expense for the quarter ended December 31, 2016. Total operating
expenses for the year ended December 31, 2017 include non-cash
stock-based compensation expense of $13.3 million, compared to
$10.9 million of non-cash stock-based compensation expense for the
year ended December 31, 2016.
Cash, cash equivalents, and short-term investments were $81.1
million as of December 31, 2017.
Cautionary Note on Forward-Looking
StatementsThis press release contains forward-looking
statements for purposes of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements regarding our intentions or current
expectations concerning, among other things the potential for
additional development, eventual regulatory approval and
commercialization of somavaratan; the possibility of diversifying
our pipeline by licensing or otherwise acquiring additional product
candidates; and the potential for a strategic transaction with
another public or private company with complementary assets and
expertise. These statements involve risks and uncertainties
that can cause actual results to differ materially from those in
such forward-looking statements. Potential risks and
uncertainties include, but are not limited to, the risk that we
will not be able to identify appropriate strategic opportunities or
that such opportunities or transactions will not create value for
our shareholders, and our ability or inability to continue with the
development and commercialization of somavaratan in the
future. Forward-looking statements are not guarantees of
future performance, and our actual results of operations, financial
condition and liquidity, and the development of the industry in
which we operate, may differ materially from the forward-looking
statements contained in this press release due to inherent risks
and uncertainties involved in our business. We discuss many
of these risks in greater detail under the heading "Risk Factors"
contained in our Annual Report on Form 10-K for the year ended
December 31, 2016 and in our Quarterly Report on Form 10-Q for the
three months ended September 30, 2017, which are on file with the
Securities and Exchange Commission (SEC), and in our other filings
with the SEC. Any forward-looking statements that we make in
this press release speak only as of the date of this press release.
We assume no obligation to update our forward-looking statements
whether as a result of new information, future events or otherwise,
after the date of this press release.
Contacts:Kevin HaasVP, Finance(650) 963-8595
khaas@versartis.com
| |
|
Three Months Ended |
|
|
Twelve Months Ended |
|
| |
|
December 31, |
|
|
December 31, |
|
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contract revenue |
|
$ |
40,000 |
|
|
$ |
— |
|
|
$ |
40,000 |
|
|
$ |
— |
|
| Total
revenue |
|
|
40,000 |
|
|
|
— |
|
|
|
40,000 |
|
|
|
— |
|
| Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research and
development |
|
|
1,317 |
|
|
|
16,731 |
|
|
|
94,612 |
|
|
|
71,984 |
|
| General and
administrative |
|
|
7,569 |
|
|
|
5,760 |
|
|
|
29,870 |
|
|
|
24,336 |
|
| Total
operating expenses |
|
|
8,886 |
|
|
|
22,491 |
|
|
|
124,482 |
|
|
|
96,320 |
|
| Income (loss) from
operations |
|
|
31,114 |
|
|
|
(22,491 |
) |
|
|
(84,482 |
) |
|
|
(96,320 |
) |
| Interest income |
|
|
186 |
|
|
|
160 |
|
|
|
847 |
|
|
|
514 |
|
| Other income (expense),
net |
|
|
(547 |
) |
|
|
446 |
|
|
|
(1,591 |
) |
|
|
236 |
|
| Net income (loss)
before provision for income taxes |
|
|
30,753 |
|
|
|
(21,885 |
) |
|
|
(85,226 |
) |
|
|
(95,570 |
) |
| Provision for (benefit
from) income taxes |
|
|
(375 |
) |
|
|
247 |
|
|
|
(247 |
) |
|
|
247 |
|
| Net income (loss) |
|
$ |
31,128 |
|
|
$ |
(22,132 |
) |
|
$ |
(84,979 |
) |
|
$ |
(95,817 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) per
share- basic |
|
$ |
0.87 |
|
|
$ |
(0.64 |
) |
|
$ |
(2.41 |
) |
|
$ |
(3.11 |
) |
| Net income (loss) per
share- diluted |
|
$ |
0.87 |
|
|
$ |
(0.64 |
) |
|
$ |
(2.41 |
) |
|
$ |
(3.11 |
) |
| Weighted-average common
shares used to compute basic net income (loss) per share |
|
|
35,872 |
|
|
|
34,609 |
|
|
|
35,228 |
|
|
|
30,784 |
|
| Weighted-average common
shares used to compute diluted net income (loss) per
share |
|
|
35,901 |
|
|
|
34,609 |
|
|
|
35,228 |
|
|
|
30,784 |
|
| |
|
December 31, |
|
|
December 31, |
|
| |
|
2017 |
|
|
2016 |
|
| |
|
|
|
|
|
|
|
|
| Assets: |
|
|
|
|
|
|
|
|
| Cash and cash
equivalents |
|
$ |
81,146 |
|
|
$ |
201,153 |
|
| Other assets |
|
|
3,743 |
|
|
|
4,417 |
|
| Build-to-suit lease
asset |
|
|
8,888 |
|
|
|
— |
|
| Total
assets |
|
$ |
93,777 |
|
|
$ |
205,570 |
|
| Liabilities and
stockholders' equity: |
|
|
|
|
|
|
|
|
| Accounts payable and
other current liabilities |
|
$ |
5,593 |
|
|
$ |
14,503 |
|
| Build-to-suit lease
obligation |
|
|
5,428 |
|
|
|
— |
|
| Upfront payment from
collaboration partner |
|
|
— |
|
|
|
40,000 |
|
| Total liabilities |
|
|
11,021 |
|
|
|
54,503 |
|
| Total stockholders'
equity |
|
|
82,756 |
|
|
|
151,067 |
|
| Total
liabilities and stockholders’
equity |
|
$ |
93,777 |
|
|
$ |
205,570 |
|
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