Outlook Therapeutics, Inc. (Nasdaq: OTLK) (the Company), a late
clinical-stage biopharmaceutical company working to develop the
first FDA-approved ophthalmic formulation of bevacizumab for use in
retinal indications, today announced its corporate highlights and
financial results for its fiscal second quarter ended March 31,
2020.
The Company also provided a development update
on ONS-5010 / LYTENAVA™ (bevacizumab-vikg), its investigational
ophthalmic formulation of bevacizumab for the treatment of wet
age-related macular degeneration (wet AMD) and other retinal
indications.
“Over the course of the last quarter, we made
notable progress amidst navigating the uncertainties of the
evolving COVID-19 pandemic. Our team remains focused on advancing
our ONS-5010 development program as efficiently and rapidly as
possible while focusing on the safety, health and welfare of our
employees, clinical trial site providers and the patients in our
trials,” said Lawrence A. Kenyon, President, CEO and CFO of the
Company. “With the execution of the strategic approach that we took
at the beginning of the fiscal year to streamline our capital
structure and regain 100% ownership of any future net profits for
ONS-5010, coupled with the regulatory approach towards potential
approval of ONS-5010 that we continue to advance, I believe Outlook
is well-positioned to build stockholder value in the near- and
long-term.”
FY Q2 2020 Corporate
Highlights
- Appointed internationally renowned ophthalmologist, Gerd
Auffarth, MD, and former President of the North American
Pharmaceutical division of Allergan, Inc., Julian Gangolli, to the
Company’s Board of Directors;
- Closed $10.2 million equity capital raise through a registered
direct offering priced at-the-market and two concurrent private
placements; and
- Entered into strategic agreements with BioLexis Pte. Ltd., its
largest stockholder, and MTTR, LLC, its development partner for
ONS-5010, to streamline the Company’s capital structure and regain
100% ownership of any future net profits for ONS-5010 to better
align the interests of all parties with the Company’s common
stockholders and support the continued development of
ONS-5010.
“Through the hard work of our team and the
commitment of the medical professionals at our clinical sites, we
have been fortunate to be minimally affected by the COVID-19
pandemic,” added Mr. Kenyon. “Our ongoing NORSE 1 registration
clinical trial for ONS-5010 remains on track for topline data
readout in August of this year, as previously announced.
Additionally, enrollment in our ongoing NORSE 2 registration
clinical trial has regained momentum at an encouraging rate and we
have nearly returned to pre-COVID-19 enrollment rates. We expect to
complete enrollment in NORSE 2 in the third calendar quarter of
this year and remain focused on successfully executing the
milestones ahead, including the data readout of NORSE 1 later this
year.”
Recent ONS-5010
/ LYTENAVATM (bevacizumab-vikg)
Development Updates
The Company recently announced it received U.S.
Food and Drug Administration (FDA) tentative approval of the trade
name for ONS-5010 as LYTENAVATM (bevacizumab-vikg). The trade name
is conditionally approved by FDA and will be subject to further
review at the time of the Company’s planned filing of a new
biologics license application (BLA) with the FDA under the 351(a)
PHSA regulatory pathway for LYTENAVA™ (bevacizumab-vikg) in
2021.
The NORSE 1 registration clinical trial
completed enrollment in August 2019 and is on pace to report
topline data in August 2020. NORSE 1 enrolled a total of 61
patients at nine sites in Australia. NORSE 1 will provide initial
safety and efficacy data for ONS-5010 in wet AMD patients for
ONS-5010 dosed monthly compared to LUCENTIS® dosed using the PIER
alternative dosing regimen of three monthly doses followed by
quarterly dosing. The Company anticipates reporting data during the
third calendar quarter of 2020. At this time, the COVID-19 pandemic
is not expected to affect the completion of NORSE 1 and anticipated
data readout date.
The NORSE 2 registration clinical trial
commenced patient enrollment in July 2019 and is expected to enroll
a total of approximately 220 patients at more than 40 clinical
trial sites in the United States. NORSE 2 continues to screen,
enroll and treat patients, subject to additional COVID-19 safety
protocols for both patients and staff at trial sites. Patients in
the trial will be treated for 11 months. The primary outcome of the
study is a statistically significant difference in the proportion
of patients who gain at least 15 letters in the best corrected
visual acuity for ONS-5010 over LUCENTIS®. Outlook Therapeutics
estimates that, subject to local conditions which have varying
degrees of “shelter-in-place” and other similar government orders
mandating various restrictions due to COVID-19, enrollment will be
completed no later than August of 2020.
The Company intends to complete development of
ONS-5010 for submission to the FDA as a new BLA under the 351(a)
PHSA regulatory pathway for the treatment of wet AMD. The Company
also has plans to submit for regulatory approvals in France, United
Kingdom, Italy, Germany, Spain and Japan, as well as other
countries. If approved, ONS-5010 will be the first and only
on-label ophthalmic formulation of bevacizumab for treating retinal
diseases.
Financial Highlights for the Fiscal
Second Quarter Ended March 31, 2020
For the fiscal second quarter ended March 31,
2020, the Company reported a net loss attributable to common
stockholders of $17.5 million, or $0.36 per basic and diluted
share, compared to a net loss attributable to common stockholders
of $11.3 million, or $0.98 per basic and diluted share, for the
same period last fiscal year. For the fiscal second quarter ended
March 31, 2020, the Company also reported an adjusted net loss
attributable to common stockholders of $6.4 million, or $0.13 per
basic and diluted share, as compared to an adjusted net loss
attributable to common stockholders of $6.7 million, or $0.58 per
basic and diluted share, for the same period last fiscal year.
Adjusted net loss attributable to common
stockholders in the fiscal second quarter ended March 31, 2020
includes $0.3 million of stock-based compensation expense, $0.2
million of depreciation and amortization, $0.1 million of non-cash
interest expense, a $1.8 million decrease in the fair value of
redemption feature on convertible notes, $0.4 million impairment
loss on property and equipment, $1.4 million of deemed dividend
upon modification of warrants, and $10.3 million of deemed dividend
upon amendment of terms to Series A-1 convertible preferred stock.
For the second quarter of fiscal 2019, adjusted net loss
attributable to common stockholders includes $0.3 million of
stock-based compensation expense, $0.8 million of depreciation and
amortization, $0.4 million of non-cash interest expense, $0.2
million of loss on extinguishment of debt, a $1.3 million increase
in the fair value of warrant liability, $0.6 million of impairment
loss on property and equipment, $0.1 million of beneficial
conversion feature of Series A-1 convertible preferred stock, a
$0.2 million stock dividend for the Company’s Series A-1
convertible preferred stock, and $0.8 million of deemed dividend
upon modification of warrants.
At March 31, 2020, the Company had cash and cash
equivalents of $4.7 million, compared to $8.0 million at September
30, 2019.
About ONS-5010 / LYTENAVA™
(bevacizumab-vikg)
ONS-5010 / LYTENAVA™ (bevacizumab-vikg) is an
investigational ophthalmic formulation of bevacizumab under
development to be administered as an intravitreal injection for the
treatment of wet AMD and other retinal diseases. ONS-5010 is
currently being evaluated in two adequate and well-controlled
registration clinical trials for wet AMD (NORSE 1 and NORSE 2) and,
if successful, is expected to be submitted to the FDA as a new BLA
for this ophthalmic indication. If approved, ONS-5010 will be the
first and only FDA-approved ophthalmic formulation of bevacizumab
to treat retinal diseases. The Company currently intends to
commercialize ONS-5010 in both vials and single-use pre-filled
syringes.
ONS-5010 is a full-length, humanized anti-VEGF
(Vascular Endothelial Growth Factor) recombinant monoclonal
antibody (mAb) that inhibits VEGF and associated angiogenic
activity. With wet AMD, abnormally high levels of VEGF are
secreted in the eye. VEGF is a protein that promotes the growth of
new abnormal blood vessels. Anti-VEGF injection therapy blocks this
growth. Since the advent of anti-VEGF therapy, it has become the
standard of care treatment option within the retina community
globally.
About Outlook Therapeutics,
Inc.
Outlook Therapeutics is a late clinical-stage
biopharmaceutical company working to develop the first FDA-approved
ophthalmic formulation of bevacizumab for use in retinal
indications, including wet AMD, DME and BRVO. If ONS-5010 /
LYTENAVA™ (bevacizumab vikg), its investigational ophthalmic
formulation of bevacizumab, is approved, Outlook Therapeutics
expects to commercialize it as the first and only approved
ophthalmic formulation of bevacizumab for use in treating approved
retinal diseases in the United States, Europe, Japan and other
markets. Outlook Therapeutics expects to file ONS-5010 with the
U.S. FDA as a new BLA under the PHSA 351(a) regulatory pathway. For
more information, please visit www.outlooktherapeutics.com.
Non-GAAP Financial Measure – Adjusted Net Loss
Attributable to Common Stockholders
Outlook Therapeutics prepares its consolidated
financial statements in conformity with accounting principles
generally accepted in the United States of America (U.S. GAAP) and
pursuant to accounting requirements of the Securities and Exchange
Commission. In an effort to provide investors with additional
information regarding the results and to provide a meaningful
period-over-period comparison of Outlook Therapeutics financial
performance, Outlook Therapeutics sometimes uses non-U.S. GAAP
financial measures (NGFM) as defined by the Securities and Exchange
Commission. In this press release, Outlook Therapeutics uses
the NGFM, “adjusted net loss attributable to common stockholders.”
Management uses this NGFM because it adjusts for certain
transactions management believes are not related to the Company’s
core business, such as impairment losses on property and equipment
or losses on extinguishment of debt, as well as significant
non-cash items that impact financial results but not cash flows,
such as stock dividends on the Series A-1 Convertible Preferred
Stock to BioLexis, deemed dividends upon warrant or convertible
note modifications, stock-based compensation expense, depreciation
and amortization expense, interest expense, and fair value
measurements for the Company’s equity and debt securities.
Management used this NGFM to evaluate Outlook Therapeutics
financial performance against internal budgets and targets.
Management believes that this NGFM is useful for evaluating Outlook
Therapeutics core operating results and facilitating comparison
across reporting periods. Outlook Therapeutics believes this NGFM
should be considered in addition to, and not in lieu of, GAAP
financial measures. Outlook Therapeutics NGFM may be different from
the same NGFM used by other companies.
Forward-Looking Statements
This press release contains forward-looking
statements. All statements other than statements of historical
facts are “forward-looking statements,” including those relating to
future events. In some cases, you can identify forward-looking
statements by terminology such as “may,” “might,” “will,” “should,”
“expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,”
“predict,” “potential,” “intend” or “continue,” the negative of
terms like these or other comparable terminology, and other words
or terms of similar meaning. These include statements about the
timing of BLA submission and commercial launch of ONS-5010, the
ability of ONS-5010 to provide benefits to patients, payors and
physicians, and the benefits of having an FDA approved bevacizumab,
completion of enrollment in NORSE 2 and any impacts related to the
COVID-19 pandemic, timing of announcement of topline data for NORSE
1, timing of the final approval for ONS-5010’s conditionally
approved trade name, and the future impacts, if any, of the ongoing
COVID-19 pandemic. Although the Company believes that it has a
reasonable basis for forward-looking statements contained herein,
they are based on current expectations about future events
affecting the Company and are subject to risks, uncertainties and
factors relating to its operations and business environment, all of
which are difficult to predict and many of which are beyond its
control. These risk factors include those risks associated with
developing pharmaceutical product candidates, risks of conducting
clinical trials and risks in obtaining necessary regulatory
approvals, as well as those risks detailed in the Company’s filings
with the Securities and Exchange Commission, which include the
uncertainty of future impacts related to the ongoing COVID-19
pandemic. These risks may cause actual results to differ materially
from those expressed or implied by forward-looking statements in
this press release. All forward-looking statements included in this
press release are expressly qualified in their entirety by the
foregoing cautionary statements. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. The Company does not undertake any
obligation to update, amend or clarify these forward-looking
statements whether as a result of new information, future events or
otherwise, except as may be required under applicable securities
law.
For additional details on the Company’s
financial performance during the quarter, please see the Company’s
filings with the Securities and Exchange Commission.
CONTACTS: Outlook
Therapeutics:
Lawrence A. Kenyon LawrenceKenyon@outlooktherapeutics.com
Investor
Inquiries:
Jenene Thomas Chief Executive Officer JTC Team, LLC T:
833.475.8247 OTLK@jtcir.com
Media Inquiries:Emmie TwomblyMedia Relations
SpecialistLaVoie Health ScienceM:
857.389.6042etwombly@lavoiehealthscience.com
|
|
Outlook
Therapeutics, Inc. |
Consolidated
Statements of Operations |
(Amounts in
thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
Six Months Ended March 31, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Collaboration
revenues |
|
$ |
- |
|
|
$ |
641 |
|
|
$ |
- |
|
|
$ |
1,709 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
|
4,383 |
|
|
|
5,935 |
|
|
|
10,231 |
|
|
|
12,008 |
|
General and administrative |
|
|
1,958 |
|
|
|
1,849 |
|
|
|
4,294 |
|
|
|
4,753 |
|
Impairment of property and equipment |
|
|
423 |
|
|
|
562 |
|
|
|
423 |
|
|
|
2,911 |
|
|
|
|
|
|
|
6,764 |
|
|
|
8,346 |
|
|
|
14,948 |
|
|
|
19,672 |
|
Loss from
operations |
|
|
(6,764 |
) |
|
|
(7,705 |
) |
|
|
(14,948 |
) |
|
|
(17,963 |
) |
Interest expense,
net |
|
|
696 |
|
|
|
1,054 |
|
|
|
1,294 |
|
|
|
2,175 |
|
Loss on
extinguishement of debt |
|
|
- |
|
|
|
184 |
|
|
|
8,060 |
|
|
|
184 |
|
Change in fair
value of redemption feature |
|
|
(1,759 |
) |
|
|
- |
|
|
|
(1,797 |
) |
|
|
- |
|
Change in fair
value of warrant liability |
|
|
(1 |
) |
|
|
1,302 |
|
|
|
(202 |
) |
|
|
(335 |
) |
Net loss |
|
|
(5,700 |
) |
|
|
(10,245 |
) |
|
|
(22,303 |
) |
|
|
(19,987 |
) |
Beneficial
conversion feature upon issuance of Series A-1 convertible
preferred stock |
|
|
- |
|
|
|
(61 |
) |
|
|
- |
|
|
|
(61 |
) |
Series A-1
convertible preferred stock dividends and related settlement |
|
|
- |
|
|
|
(154 |
) |
|
|
(166 |
) |
|
|
(305 |
) |
Deemed dividend
upon modification of warrants |
|
|
(1,432 |
) |
|
|
(830 |
) |
|
|
(3,140 |
) |
|
|
(830 |
) |
Deemed dividend
upon amendment of the terms of the Series A-1 convertible preferred
stock |
|
|
(10,328 |
) |
|
|
- |
|
|
|
(10,328 |
) |
|
|
- |
|
Net loss
attributable to common stockholders |
|
$ |
(17,460 |
) |
|
$ |
(11,290 |
) |
|
$ |
(35,937 |
) |
|
$ |
(21,183 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Per share
information: |
|
|
|
|
|
|
|
|
Net loss per share
of common stock, basic and diluted |
|
$ |
(0.36 |
) |
|
$ |
(0.98 |
) |
|
$ |
(0.93 |
) |
|
$ |
(1.98 |
) |
Weighted average
shares outstanding, basic and diluted |
|
|
47,896 |
|
|
|
11,529 |
|
|
|
38,849 |
|
|
|
10,677 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheet Data |
(Amounts in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
September 30, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
Cash |
|
|
|
|
$ |
4,653 |
|
|
$ |
8,016 |
|
Total assets |
|
|
|
|
$ |
13,170 |
|
|
$ |
17,135 |
|
Current
liabilities |
|
|
|
$ |
23,706 |
|
|
$ |
20,290 |
|
Series A-1
convertible preferred stock |
|
|
$ |
- |
|
|
$ |
5,359 |
|
Total
stockholders' deficit |
|
|
|
$ |
(20,525 |
) |
|
$ |
(16,129 |
) |
|
|
|
|
|
|
|
|
Reconciliation Between Reported Net Loss (GAAP) and
Adjusted Net Loss (Non-GAAP), in each case |
Attributable to Common Stockholders |
(Amounts in thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
Six Months Ended March 31, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to common stockholders, as reported
(GAAP) |
|
|
$ |
(17,460 |
) |
|
$ |
(11,290 |
) |
|
$ |
(35,937 |
) |
|
$ |
(21,183 |
) |
Adjustments for reconciled items: |
|
|
|
|
|
|
|
|
|
Stock-based compensation, non-cash |
|
|
|
305 |
|
|
|
268 |
|
|
|
664 |
|
|
|
1,140 |
|
Depreciation and amortization |
|
|
|
177 |
|
|
|
817 |
|
|
|
352 |
|
|
|
1,640 |
|
Non-cash interest expense |
|
|
|
120 |
|
|
|
445 |
|
|
|
136 |
|
|
|
895 |
|
Loss on extinguishment of debt |
|
|
|
- |
|
|
|
184 |
|
|
|
8,060 |
|
|
|
184 |
|
Change in fair value of redemption feature |
|
|
|
(1,759 |
) |
|
|
- |
|
|
|
(1,797 |
) |
|
|
- |
|
Change in fair value of warrant liability |
|
|
|
(1 |
) |
|
|
1,302 |
|
|
|
(202 |
) |
|
|
(335 |
) |
Impairment of property and equipment |
|
|
|
423 |
|
|
|
562 |
|
|
|
423 |
|
|
|
2,911 |
|
Beneficial conversion feature upon issuance of Series A-1
convertible preferred stock |
|
|
|
- |
|
|
|
61 |
|
|
|
- |
|
|
|
61 |
|
Series A-1 convertible preferred stock dividends and related
settlement |
|
|
|
- |
|
|
|
154 |
|
|
|
166 |
|
|
|
305 |
|
Deemed dividend upon modification of warrants |
|
|
|
1,432 |
|
|
|
830 |
|
|
|
3,140 |
|
|
|
830 |
|
Deemed dividend upon amendment of the terms of the Series A-1
convertible preferred stock |
|
|
10,328 |
|
|
|
- |
|
|
|
10,328 |
|
|
|
- |
|
Adjusted
net loss attributable to common stockholders
(non-GAAP) |
|
|
$ |
(6,435 |
) |
|
$ |
(6,667 |
) |
|
$ |
(14,667 |
) |
|
$ |
(13,552 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to common stockholders per share of |
|
|
$ |
(0.36 |
) |
|
$ |
(0.98 |
) |
|
$ |
(0.93 |
) |
|
$ |
(1.98 |
) |
common stock - basic and diluted, as reported
(GAAP) |
|
|
|
|
|
|
|
|
|
Adjustments for reconciled items: |
|
|
|
|
|
|
|
|
|
Stock-based compensation, non-cash |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.11 |
|
Depreciation and amortization |
|
|
|
- |
|
|
|
0.07 |
|
|
|
0.01 |
|
|
|
0.15 |
|
Non-cash interest expense |
|
|
|
- |
|
|
|
0.04 |
|
|
|
- |
|
|
|
0.08 |
|
Loss on extinguishment of debt |
|
|
|
- |
|
|
|
0.02 |
|
|
|
0.21 |
|
|
|
0.02 |
|
Change in fair value of redemption feature |
|
|
|
(0.04 |
) |
|
|
- |
|
|
|
(0.05 |
) |
|
|
- |
|
Change in fair value of warrant liability |
|
|
|
- |
|
|
|
0.11 |
|
|
|
(0.01 |
) |
|
|
(0.03 |
) |
Impairment of property and equipment |
|
|
|
0.01 |
|
|
|
0.05 |
|
|
|
0.01 |
|
|
|
0.27 |
|
Beneficial conversion feature upon issuance of Series A-1
convertible preferred stock |
|
|
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
0.01 |
|
Series A-1 convertible preferred stock dividends and related
settlement |
|
|
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
0.03 |
|
Deemed dividend upon modification of warrants |
|
|
|
0.03 |
|
|
|
0.07 |
|
|
|
0.08 |
|
|
|
0.08 |
|
Deemed dividend upon amendment of the terms of the Series A-1
convertible preferred stock |
|
|
0.22 |
|
|
|
- |
|
|
|
0.27 |
|
|
|
- |
|
Adjusted
net loss attributable to common stockholders |
|
|
|
|
|
|
|
|
|
per
share of common stock - basic and diluted (non-GAAP) |
|
|
$ |
(0.13 |
) |
|
$ |
(0.58 |
) |
|
$ |
(0.39 |
) |
|
$ |
(1.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
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