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 September 30, 2017.
“Progressing our XLRS, XLRP and ACHM clinical
studies is our primary focus, while continuing to develop our
corporate infrastructure to support these programs and our research
efforts in vector design and manufacturing,” said Sue Washer,
President and CEO of AGTC.
Recent Highlights
- In October 2017, AGTC and the Medical College of Wisconsin
published data in the October issue of RETINA: The Journal of
Retinal and Vitreous Diseases from a longitudinal study that
examined measurements of cone photoreceptor structure in patients
with CNGB3-associated achromatopsia (ACHM) over time.
- In October 2017, safety and efficacy data supporting the
initiation of the XLRP phase I/II clinical trial were presented in
a poster at the European Society of Gene & Cell Therapy (ESGCT)
meeting, entitled “Evaluation of AAV2tYF-GRK1-hRPGRco vectors in a
canine model of RPGR-XLRP”.
- Received notice of allowance of U.S. Patent 9,738,826
“Recombinant Virus Production Using Mammalian Cells in Suspension”
which covers an efficient and scalable method of AAV
manufacturing.
Clinical Programs
The company has three ongoing clinical trials, and an additional
trial which will begin enrolling patients in the coming
months. The status of these programs is summarized below:
XLRS Phase 1/2 Clinical Trial
AGTC is currently enrolling patients in a Phase
1/2 clinical trial for its X-linked retinoschisis (XLRS) product
candidate as part of the company’s collaboration with
Biogen.
To date, the company has completed enrollment of
12 patients in the first four groups which completes the dose
escalation phase of the trial. The company is also enrolling
adult patients in the expansion group at the highest dose level and
children between the ages of 6 and 18 at the mid-dose level.
As of November 7, 2017, a total of 17 adults and one child
have been enrolled in the trial across all groups.
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 safe and well
tolerated.
ACHM CNGB3 Phase 1/2 Clinical Trial
A Phase 1/2 clinical trial evaluating the
company's product candidate for achromatopsia (ACHM) caused by
mutations in the CNGB3 is currently enrolling patients. To date,
the company has enrolled four patients. While reviewing the data
from the patients to date, AGTC also analyzed an extensive and
growing body of data generated across several different animal
disease models. The company found evidence of biological activity
at lower vector doses than those originally proposed for the ACHM
B3 study and has elected to adjust the dose downward in this dose
ranging study. This new dose will also apply to the ACHM A3
study. The company will continue to evaluate emerging clinical and
preclinical data to help guide future dosing decisions.
ACHM CNGA3 Phase 1/2 Clinical Trial
The company is currently screening patients for
enrollment in a Phase 1/2 clinical trial evaluating the company's
ACHM CNGA3 product candidate.
XLRP Clinical Trial
The company is currently conducting site
initiation activities at four clinical sites and plans to initiate
a Phase 1/2 clinical study in the United States in the coming
months for its X-linked Retinitis Pigmentosa (XLRP) product
candidate.
Preclinical Optogenetic
Program
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 to develop a product to treat patients with
advanced retinal disease. AGTC is working with Bionic Sight
to file their IND for this product candidate, which the companies
expect to occur in 2018.
Financial Results for the Quarter Ended
September 30, 2017
Revenue: Total revenue
for the three months ended September 30, 2017 was $10.3 million
compared to $11.8 million generated during the comparable period in
2016. Collaboration revenue recorded during the three months
ended September 30, 2017 and 2016 resulted primarily from the
amortization of upfront fees received under the company’s
collaboration agreement with Biogen. Non-refundable upfront fees
are amortized to collaboration revenue on a straight-line basis
over the estimated service period. Extensions to the length of time
for the estimated service periods resulted in a decrease in
non-refundable upfront fees recognized as revenue during the three
months ended September 30, 2017 versus the three months ended
September 30, 2016. Grant revenue decreased $27 thousand during the
three months ended September 30, 2017 compared to the same period
in 2016, largely attributable to reduced research and development
activities on grant-funded projects.
R&D
expenses: Research and development expenses for the
three months ended September 30, 2017 were $8.3 million, compared
to $5.6 million for the three months ended September 30, 2016, an
increase of $2.7 million. The increase was primarily due to
increased spending on general research and discovery programs,
increased spending on the company’s XLRS and XLRP clinical
programs, and increased employee-related expenses associated with
the hiring of additional employees to support clinical trial
execution and research and development activities.
G&A Expenses: General
and administrative expenses for the three months ended September
30, 2017 were $3.7 million, compared to $2.8 million for the three
months ended September 30, 2016, an increase of $0.9 million. The
increase was primarily driven by increased corporate
infrastructure, employee-related, and shared based compensation
expenses associated with the company’s continued expansion and
hiring of additional employees.
Tax Provision: There was
no income tax expense for the three months ended September 30, 2017
compared to $600,000 for the three months ended September 30,
2016. The income tax expense for the three months ended
September 30, 2016 results from the recognition of revenue related
to the Biogen agreement for tax purposes, which is accelerated
compared to the company’s GAAP revenue, resulting in significantly
more taxable income than GAAP net income. While the company’s
taxable income is largely offset by the use of NOLs, AGTC’s income
tax expense is primarily due to federal alternative minimum tax
expense, the apportionment of income to certain state jurisdictions
where we do not have NOLs and the recognition of a reserve for
uncertain tax positions.
Net Income or loss: Net
loss was $1.4 million for the three months ended
September 30, 2017 compared to a net income of $3.0 million for the
three months ended September 30, 2016.
Financial Guidance: As of
September 30, 2017, the company’s cash, cash equivalents, and
investments amounted to $129.6 million. The company believes
these funds will be sufficient to allow AGTC to generate data from
its ongoing clinical programs, to move the pre-clinical optogenetic
program in collaboration with Bionic Sight into the clinic and fund
the currently planned research and discovery programs for at least
the next two years. The company expects total cash, cash
equivalents, and investments as of June 30, 2018 to be between $85
and $100 million. Any milestone payments received by the company
from Biogen before June 30, 2018 would increase these projected
cash balances.
Upcoming Investor Conference
Participation
Members of AGTC’s senior management team will
participate in the following upcoming investor conferences, taking
place in New York:
- Barclays Gene Editing and Gene Therapy Summit, taking place
November 30
- BMO Capital Markets Prescriptions for Success Healthcare
Conference, taking place December 14
A live audio webcast of the presentation at the
BMO Healthcare Conference will be accessible by visiting
ir.agtc.com/events.cfm. A replay will be available on the company's
website following the event.
Conference Call and WebcastAGTC
will host a conference call and webcast to discuss financial
results for the first fiscal quarter ended September 30, 2017 today
at 4:30 p.m. (ET). To access the call, dial 877-407-6184 (US) or
201-389-0877 (outside of the US). The passcode is 13671782. A live
webcast will be available in the Events and Presentations section
of AGTC’s Investor Relations site at 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 AGTCAGTC is a clinical-stage
biotechnology company that uses a proprietary gene therapy platform
to develop transformational genetic therapies for patients
suffering from rare and debilitating diseases. Its initial
focus is in the field of ophthalmology, where it has active
clinical trials in X-linked retinoschisis (XLRS), X-linked
retinitis pigmentosa (XLRP), and achromatopsia (ACHM CNGB3 &
ACHM CNGA3). In addition to its clinical trials, AGTC has
preclinical programs in optogenetics, adrenoleukodystrophy (ALD),
which is a disease of the central nervous system (CNS), and
otology. The clinical-stage XLRS and XLRP programs, the discovery
program in ALD and two additional ophthalmology programs are being
developed in collaboration with Biogen. In addition to its product
pipeline, 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 products.
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: gene therapy is still novel with only a few approved
treatments so far; AGTC cannot predict when or if it will obtain
regulatory approval to commercialize a product candidate or receive
reasonable reimbursement; uncertainty inherent in clinical trials
and 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, 2017, as 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) |
|
|
|
|
|
September 30, |
|
|
June 30, |
|
In
thousands, except per share data |
|
2017 |
|
|
2017 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
48,734 |
|
|
$ |
30,706 |
|
Investments |
|
|
76,469 |
|
|
|
95,994 |
|
Grants
receivable |
|
|
182 |
|
|
|
174 |
|
Prepaid
and other current assets |
|
|
3,228 |
|
|
|
3,361 |
|
Total
current assets |
|
|
128,613 |
|
|
|
130,235 |
|
Investments, net of
current portion |
|
|
4,385 |
|
|
|
11,749 |
|
Property and equipment,
net |
|
|
2,621 |
|
|
|
2,661 |
|
Investment in Bionic
Sight |
|
|
2,000 |
|
|
|
2,000 |
|
Other assets |
|
|
1,355 |
|
|
|
1,278 |
|
Total
assets |
|
$ |
138,974 |
|
|
$ |
147,923 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
2,468 |
|
|
$ |
998 |
|
Accrued expenses and other liabilities |
|
|
5,423 |
|
|
|
6,162 |
|
Deferred
revenue |
|
|
14,651 |
|
|
|
20,996 |
|
Total
current liabilities |
|
|
22,542 |
|
|
|
28,156 |
|
Deferred revenue, net
of current portion |
|
|
1,029 |
|
|
|
4,438 |
|
Total
liabilities |
|
|
23,571 |
|
|
|
32,594 |
|
Stockholders'
equity: |
|
|
|
|
|
|
|
|
Common
stock—par value $.001 per share; shares authorized: 150,000 at
September 30, 2017 and June 30, 2017; |
|
|
|
|
|
|
|
|
shares
issued and outstanding: 18,093 and 18,088 at September 30,
2017 and June 30, 2017, respectively. |
|
|
18 |
|
|
|
18 |
|
Additional paid-in capital |
|
|
206,408 |
|
|
|
204,937 |
|
Accumulated deficit |
|
|
(91,023 |
) |
|
|
(89,626 |
) |
Total
stockholders' equity |
|
|
115,403 |
|
|
|
115,329 |
|
Total
liabilities and stockholders' equity |
|
$ |
138,974 |
|
|
$ |
147,923 |
|
|
|
APPLIED GENETIC TECHNOLOGIES
CORPORATION |
|
STATEMENTS OF OPERATIONS |
|
(Unaudited) |
|
|
|
|
|
For the Three Months Ended September
30, |
|
In
thousands, except per share amounts |
|
2017 |
|
|
2016 |
|
Revenue: |
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
10,308 |
|
|
$ |
11,772 |
|
Grant and
other revenue |
|
|
7 |
|
|
|
34 |
|
Total
revenue |
|
|
10,315 |
|
|
|
11,806 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development |
|
|
8,276 |
|
|
|
5,571 |
|
General
and administrative |
|
|
3,706 |
|
|
|
2,846 |
|
Total
operating expenses |
|
|
11,982 |
|
|
|
8,417 |
|
Income (loss)
from operations |
|
|
(1,667 |
) |
|
|
3,389 |
|
Other
income: |
|
|
|
|
|
|
|
|
Investment income, net |
|
|
270 |
|
|
|
236 |
|
Total
other income, net |
|
|
270 |
|
|
|
236 |
|
Income (loss)
before provision for income taxes |
|
|
(1,397 |
) |
|
|
3,625 |
|
Provision
for income taxes |
|
|
— |
|
|
|
600 |
|
Income
(loss) |
|
$ |
(1,397 |
) |
|
$ |
3,025 |
|
Net earnings
(loss) per share, basic |
|
$ |
(0.08 |
) |
|
$ |
0.17 |
|
Net earnings
(loss) per share, diluted |
|
$ |
(0.08 |
) |
|
$ |
0.16 |
|
Weighted
average shares outstanding – basic |
|
|
18,088 |
|
|
|
18,050 |
|
Weighted
average shares outstanding – diluted |
|
|
18,088 |
|
|
|
18,445 |
|
|
|
|
|
|
|
|
|
|
IR/PR CONTACTS: David Carey (IR) or Tom Vickery (PR)Lazar
Partners Ltd.T: (212) 867-1768 or (646)
871-8482dcarey@lazarpartners.com or tvickery@lazarpartners.com
CORPORATE CONTACTS:Bill SullivanChief Financial OfficerApplied
Genetic Technologies CorporationT: (617) 843-5728
bsullivan@agtc.com
Stephen PotterChief Business OfficerApplied Genetic Technologies
CorporationT: (617) 413-2754spotter@agtc.com
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