Aerpio Pharmaceuticals, Inc. (Nasdaq: ARPO), a biopharmaceutical
company focused on developing compounds that activate Tie2 to treat
ocular diseases and diabetic complications, today reported
financial results for the third quarter ended September 30, 2019,
and provided a business update.
Recent Developments
As reported on October 21, 2019, the Company announced that its
Board of Directors had initiated a process to explore and review a
range of strategic alternatives focused on maximizing stockholder
value from the Company’s clinical assets and cash resources. At
that time, the Company also engaged Evercore, Ladenburg Thalmann
& Co. Inc., and Duane Nash, M.D, J.D., M.B.A. to act as
strategic advisors. The Company cannot guarantee that this process
will culminate in a transaction.
In addition, the Company announced a plan to streamline
operations in order to preserve capital and cash resources. The
Company’s management team is now led by Joseph Gardner, Ph.D., the
Company’s President, and Regina Marek, the Company's Vice President
of Finance.
Finally, on September 27, 2019, the Company completed dosing of
the first three cohorts of healthy subjects in a Phase 1b clinical
trial to evaluate the safety and pharmacokinetics of a topical drop
formulation of AKB-9778. The clinical trial is continuing with
enrollment of glaucoma patients in the next cohort, with topline
results anticipated in the first quarter of 2020.
Third Quarter 2019 Financial Highlights
As of September 30, 2019, cash and cash equivalents totaled
$43.4 million. Total shares outstanding, as of September 30, 2019,
were 40.6 million.
For the three months ended September 30, 2019, operating
expenses totaled $5.0 million, including $0.6 million in non-cash
stock compensation expense, compared to $7.6 million, including
$0.8 million in non-cash stock compensation expense, for the same
period in 2018.
Research and development expenses for the three months ended
September 30, 2019, decreased $1.5 million, or 34.6%, compared to
the same period in 2018. This decrease was primarily the result of
decreased expenses associated with the TIME-2b clinical trial of
AKB-9778, offset by spending related to the Phase 1b clinical trial
of topical drop formulation of AKB-9778, which commenced during the
second quarter of 2019.
General and administrative expenses for the three months ended
September 30, 2019, decreased $1.1 million, or 34.1%, compared to
the same period in 2018. This decrease was primarily attributable
to a decrease in personnel related expenses, legal expenses,
non-cash stock compensation expense and other back office related
expenses.
Net loss attributable to common shareholders for the three
months ended September 30, 2019, was $4.6 million, or $0.11 per
share, compared to net income attributable to common shareholders
of $11.5 million, or $0.28 per share, for the same period in 2018.
Net income in 2018 was attributable to the license revenue of $20.0
million received in June 2018 from Gossamer Bio. $18.8 million was
recognized as revenue in the three months ended September 30,
2018.
About Aerpio Pharmaceuticals
Aerpio Pharmaceuticals, Inc. is a biopharmaceutical company
focused on advancing first-in-class compounds that activate Tie2 to
treat ocular diseases and complications of diabetes. Tie2 is an
important regulator of vascular stability, and its down-regulation,
through activation of two inhibitors VE-PTP and Ang-2, is found in
patients with diabetes and other conditions. The Company’s lead
compound, AKB-9778, a first-in-class small molecule inhibitor of
VE-PTP, is being investigated in an ongoing Phase 1b clinical trial
as a topical drop formulation for its therapeutic potential in
open-angle glaucoma. In the recently completed Phase 2b study
(TIME-2b) AKB-9778 demonstrated the ability to lower proteinuria
(as measured by decreasing urinary albumin creatine ratio, UACR) by
about 20% replicating a finding in the previous phase 2 study. The
decrease in proteinuria suggests that AKB-9778 and our other Tie2
activating drug, ARP-1536, may have the potential to improve kidney
function in diabetics potentially delaying progression to kidney
dialysis. The Company’s second asset, ARP-1536 is a humanized
monoclonal antibody observed to activate Tie2 receptors in a
dose-dependent manner in preclinical models. Aerpio believes
ARP-1536 holds potential as a monthly or biweekly systemic therapy
to treat diabetic complications, including diabetic nephropathy.
The company’s third asset is a bispecific antibody that binds both
VEGF and VE-PTP which inhibits VEGF activation and activates Tie2.
This bispecific antibody has the potential to be an improved
product for treating wAMD and DME via intravitreal injection.
Finally, the Company has exclusively out-licensed its fourth asset
AKB-4924 (now called GB004), a first-in-class small molecule
inhibitor of hypoxia-inducible factor-1 (HIF). GB004 is being
developed by AKB-4924’s exclusive licensor, Gossamer Bio, Inc.
(Nasdaq: GOSS), in return for an upfront payment of $20 million,
future potential development, regulatory, and sales milestones of
up to $400 million, and royalties on worldwide net sales. For more
information, please visit www.aerpio.com.
About AKB-9778
AKB-9778 binds to and inhibits vascular endothelial protein
tyrosine phosphatase (VE-PTP), an important negative regulator of
Tie2. Decreased Tie2 activity contributes to vascular instability
in many diseases including diabetes. AKB-9778 activates the Tie2
receptor irrespective of extracellular levels of its binding
ligands, angiopoietin-1 (agonist) or angiopoietin-2 (antagonist)
and may be the most efficient pharmacologic approach to maintain
normal Tie2 activation.
Forward Looking Statements
This press release contains forward-looking statements.
Statements in this press release that are not purely historical are
forward-looking statements. Such forward-looking statements
include, among other things, the Company’s strategic alternatives
review process and the potential transactions that may be
identified and explored as a result of that process, the Company’s
product candidates, including AKB-9778 and ARP-1536, the clinical
development plan therefor and the therapeutic potential thereof,
and the intended benefits from its collaboration with Gossamer Bio,
Inc. for GB004. Actual results could differ from those projected in
any forward-looking statements due to several risk factors. Such
factors include, among others, the ability to identify and
consummate strategic alternatives that yield additional value for
shareholders; the timing, benefits and outcome of the Company's
strategic alternatives review process, including the determination
of whether or not to pursue or consummate any strategic
alternative; the structure, terms and specific risks and
uncertainties associated with any potential strategic transaction;
potential disruptions in our business and the stock price as a
result of our exploration, review and pursuit of strategic
alternatives or the public announcement thereof and any decision or
transaction resulting from such review; the ability to continue to
develop AKB-9778 or other product candidates; the inherent
uncertainties associated with the drug development process,
including uncertainties in regulatory interactions, commencing
clinical trials and enrollment of patients in clinical trials; and
competition in the industry in which the Company operates and
overall market conditions; and the additional factors set forth in
our Annual Report on Form 10-K for the year ended December 31,
2018, as updated by our subsequent filings with the SEC.
These forward-looking statements are made as of the date of this
press release, and the Company assumes no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ from those projected in the forward-looking
statements, except as required by law. Investors should consult all
the information set forth herein and should also refer to the risk
factor disclosure set forth in the reports and other documents the
Company files with the SEC available at www.sec.gov.
AERPIO PHARMACEUTICALS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except
per share amounts) Three months ended Nine
months ended September 30, September 30,
2019
2018
2019
2018
License revenue, and other
$
-
$
18,822
$
-
$
20,155
Operating expenses: Research and development
2,845
4,346
10,695
12,604
General and administrative
2,161
3,278
8,216
9,866
Restructuring (benefit) expense
(39
)
-
876
-
Total operating expenses
4,967
7,624
19,787
22,470
(Loss) income from operations
(4,967
)
11,198
(19,787
)
(2,315
)
Interest and other income
319
339
963
437
Net and comprehensive (loss) income
$
(4,648
)
$
11,537
$
(18,824
)
$
(1,878
)
Net (loss) income per common share basic and diluted
$
(0.11
)
$
0.28
$
(0.46
)
$
(0.06
)
Weighted average common shares outstanding Basic
40,588
40,528
40,588
31,687
Diluted
40,588
40,962
40,588
31,687
AERPIO PHARMACEUTICALS, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands)
September 30, December 31,
2019
2018
Assets Current assets: Cash and cash equivalents
$
43,390
$
62,614
Prepaid R&D contracts
538
754
Other current assets
876
616
Total current assets
44,804
63,984
Furniture and equipment, net
282
99
Operating lease right-of-use asset
425
Deposits
41
41
Total assets
$
45,552
$
64,124
Liabilities and shareholders' equity Current
liabilities: Accounts payable and accrued expenses
$
3,404
$
5,457
Current portion of operating lease liability
197
Total current liabilities
3,601
5,457
Operating lease liability, net of current portion
236
Total liabilities
3,837
5,457
Stockholders' equity: Capital
179,504
177,626
Accumulated deficit
(137,789
)
(118,959
)
Total stockholders' equity
41,715
58,667
Total liabilities and stockholders' equity
$
45,552
$
64,124
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version on businesswire.com: https://www.businesswire.com/news/home/20191107005046/en/
Investor & Media:
Aerpio Pharmaceuticals, Inc. Joseph Gardner President
jgardner@aerpio.com or Burns McClellan, on behalf of Aerpio
Pharmaceuticals, Inc. Media:
Robert Flamm, Ph.D. rflamm@burnsmc.com or Investors: John Grimaldi jgrimaldi@burnsmc.com
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