Completes Sale of Hyperimmune Commercial Business
for up to $74.5 Million
Aptevo Therapeutics Inc. (Nasdaq:APVO), a biotechnology company
focused on developing novel oncology and hematology therapeutics,
today reported its financial results for the year ended December
31, 2017 and provided an update on its commercial and pipeline
programs.
“I am proud of the reputation we are building as
a company that is execution-oriented with a compelling,
differentiated technology platform – our ADAPTIR bispecific
antibody platform,” said Marvin L. White, President and Chief
Executive Officer. “2017 was a year of solid execution for
Aptevo as we delivered on several important objectives.
First, we made excellent progress advancing our ADAPTIR
portfolio. During the year we continued to progress our
metastatic castration-resistant prostate cancer candidate, APVO414,
in a Phase 1 dose escalation study and announced preliminary data
showing an impressive reduction in anti-drug antibody titers under
a new dosing regimen. Plans to commence a new Phase 2 study
of our second clinical candidate, otlertuzumab, in peripheral
T-cell lymphoma, were finalized and we began this clinical trial in
January 2018. We also made solid progress advancing APVO436
and APVO210, for which we announced plans to file Investigational
New Drug (IND) applications in 2018. Finally, we executed an
important strategic partnership with Alligator Bioscience, which
demonstrated the versatility of our ADAPTIR platform. In
collaboration with Alligator we developed a new immunotherapeutic
antibody, ALG.APV-527 featuring a novel mechanism of action
targeting 4-1BB and the tumor antigen, 5T4, which is found on
various types of cancer cells, suggesting potential broad utility
for this molecule.”
“In addition to a strategic partnership with
Alligator Bioscience, which we announced in July, one of our most
significant corporate achievements in 2017 was the divestiture of
our hyperimmune commercial business, which provides up to $74.5
million in consideration to Aptevo, further strengthening our
financial position and providing significant additional
non-dilutive funding with which to continue to advance our
corporate and pipeline objectives. With a solid financial
foundation, Aptevo is well positioned to achieve important
milestones over the next 12 months, which include: continuing to
expand new patient acquisition efforts for our Hemophilia B
commercial product, IXINITY; filing INDs for APVO436 for acute
myeloid leukemia and APVO210 for autoimmune disease; progressing
multiple novel ADAPTIR candidates in clinical and preclinical
development and pursuing a robust dialogue with potential corporate
partners around our ADAPTIR platform. With the exception of
our ALG.APV-527 program, (partnered with Alligator Bioscience), all
of the assets in our portfolio are wholly owned by Aptevo,
providing significant opportunities for value creation. I
look forward to keeping our stockholders and prospective
stockholders apprised of our continued progress,” said Mr.
White.
2017 Operational Highlights
Commercial Portfolio
- Reinitiated new patient acquisition efforts for IXINITY®
[Coagulation Factor IX (Recombinant)] following the introduction of
new IXINITY supply in May 2017
- Grew IXINITY revenue 12% year-over-year despite the supply
interruption and temporary suspension of new patient acquisition
activities
- Presented new clinical data evaluating the safety and efficacy
of IXINITY in children with Hemophilia B, showing that IXINITY
appears to be safe and well tolerated in this subject
population
Pipeline
- Announced plans to commence a Phase 2 clinical study of
otlertuzumab in a new indication – peripheral T-cell lymphoma
(PTCL), which will enroll up to 24 patients with relapsed or
refractory PTCL in an open-label, proof-of-concept Phase 2 clinical
study evaluating the safety and efficacy of otlertuzumab in
combination with bendamustine
- Continued to advance APVO414 in a dose escalation Phase 1 study
and presented preliminary data from the continuous infusion dose
cohorts
- Expanded Aptevo’s ADAPTIR portfolio and announced the selection
of an additional ADAPTIR bispecific antibody candidate, APVO436 –
an optimized, next-generation ADAPTIR bispecific molecule targeting
the cell-surface receptor CD123 and CD3, which is highly expressed
in multiple hematological malignancies, including acute myeloid
leukemia (AML)
- Presented new preclinical data on APVO436 at the American
Association for Cancer Research Annual Meeting demonstrating potent
immune activation, traditional antibody-like manufacturing
characteristics, and an extended half-life in mice of up to 12.5
days
- Presented additional preclinical data on APVO436 at
the American Society of Hematology 59th Annual Meeting
showing broad immunotherapeutic activity against primary human AML
cells in vitro, illustrating its utility as a potent and
selective immunotherapeutic candidate in the treatment of AML
- Demonstrated the versatility of the ADAPTIR platform with the
development of ALG.APV-527, (partnered with Alligator Bioscience)
which targets a co-stimulatory receptor found on activated T cells,
illustrating the capability of the ADAPTIR platform to generate
immunotherapeutic antibodies with different mechanisms of immune
system engagement, in this case targeting 4-1BB and the tumor
antigen, 5T4, which is found on a variety of different types of
cancer cells
- Initiated CMC and IND-enabling activities for APVO436, APVO210,
and ALG.APV-527, and announced plans to file two Investigational
New Drug (IND) applications in 2018 for APVO436, being developed
for the treatment of AML, and, APVO210, being developed for the
treatment of autoimmune and inflammatory diseases
Corporate
- Monetized Aptevo’s non-core commercial assets through the sale
of three hyperimmune commercial products, (WinRho® SDF,
HepaGam B®, and VARIZIG®) to Saol Therapeutics for total
consideration of up to $74.5 million, raising significant
non-dilutive funding to support Aptevo’s ongoing commercial and
R&D efforts
- Signed a collaboration agreement with Alligator
Bioscience to jointly develop and advance a lead bispecific
antibody candidate, ALG.APV-527
- Amended the terms of a credit agreement with MidCap Financial
allowing Aptevo to retain a $20 million credit facility
with MidCap
2017 Summary Financial
Results
Cash Position: Aptevo had
cash, cash equivalents, and short-term investments as of December
31, 2017 totaling $91.2 million, including $10.4 million in
restricted cash related to Aptevo’s credit facility.
Product Revenue: Revenue
for IXINITY for the year ended December 31, 2017 increased
approximately 12% to $10.9 million from $9.8 million for the year
ended December 31, 2016. This increase was primarily the
result of the continuing expansion of Aptevo’s IXINITY Hemophilia B
patient base following a temporary six-month interruption in
IXINITY supply, which was resolved in May 2017. All patients
that were taking IXINITY prior to the supply interruption
announcement have continued on IXINITY therapy and Aptevo
recommenced new patient acquisition efforts in the second quarter
of 2017.
Cost of Product Sales:
Cost of product sales decreased by $7.5 million, or 60%, to $5.0
million for the year ended December 31, 2017 from $12.5 million for
the year ended December 31, 2016. This decrease was primarily due
to a write off of approximately $7.1 million in 2016 related to the
unsuccessful manufacturing of IXINITY. These costs were
written off and included in the cost of product sales.
Research and Development
Expenses: Research and development expenses were
essentially unchanged year-over year and were $29.0 million for the
year ended December 31, 2017 compared to $29.1 million for the year
ended December 31, 2016.
Selling, General and Administrative
Expenses: Selling, general and administrative
expenses decreased by $1.6 million, or 4%, to $34.6 million for the
year ended December 31, 2017, compared to $36.2 million for the
year ended December 31, 2016. The decrease was primarily due to
lower marketing costs for IXINITY and reduced personnel costs
following the sale of Aptevo’s hyperimmune commercial products.
Net Income from Discontinued
Operations: In connection with the sale of its
hyperimmune business, Aptevo reclassified the operating results of
the hyperimmune business for all periods presented and the gain
recognized on the sale of the hyperimmune business of $52.7 million
in income from discontinued operations. The income from
discontinued operations also includes an allocation of income tax
expense for all periods, which is required by Generally Accepted
Accounting Principles (GAAP). Additionally, in the consolidated and
condensed balance sheets as of December 31, 2016, the assets and
liabilities of the hyperimmune business have been presented
separately as held for sale.
Net Income (Loss):
Aptevo’s net income for the year ended December 31, 2017 was $7.0
million or $0.33 per share, compared to a net loss of ($112.4)
million or ($5.55) per share for the corresponding period in 2016.
Net income includes the Company’s losses from operations, offset by
an allocation of income tax benefit as required by GAAP and net
income from discontinued operations.
Aptevo 2018 Milestones:
- Commence Phase 2 clinical trial of otlertuzumab in PTCL –
initiated January 2018
- Submit an IND application for APVO436 in AML – anticipated Q2
2018
- Complete enrollment of Phase 1 dosing cohorts in APVO414
clinical trial in metastatic castration resistant prostate cancer –
anticipated Q3 2018
- Report preliminary otlertuzumab Phase 2 PTCL clinical data –
anticipated Q4 2018
- Submit an IND for APVO210 in Autoimmune/Inflammatory Diseases
(AIID) – anticipated Q4 2018
- Report preliminary APVO414 Phase 1 dose escalation clinical
data – anticipated Q4 2018
- Advance partnership discussions for ADAPTIR platform and
product candidates
- Capture increased market share of Hemophilia B market with
expanded U.S. sales
- Advance non-disclosed ADAPTIR discovery candidates in
immuno-oncology indications
Aptevo Therapeutics
Inc.CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except share and per share
amounts)
|
ASSETS |
|
2017 |
|
|
2016 |
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
7,095 |
|
|
$ |
9,676 |
|
Short-term investments |
|
|
73,688 |
|
|
|
44,849 |
|
Accounts
receivable |
|
|
2,141 |
|
|
|
307 |
|
Inventories |
|
|
1,028 |
|
|
|
461 |
|
Current
assets held for sale |
|
|
— |
|
|
|
10,155 |
|
Restricted cash, current portion |
|
|
400 |
|
|
|
400 |
|
Prepaid
expenses |
|
|
4,022 |
|
|
|
3,540 |
|
Other
current assets |
|
|
6,710 |
|
|
|
2,026 |
|
Total current assets |
|
|
95,084 |
|
|
|
71,414 |
|
Restricted cash, net of current portion |
|
|
10,000 |
|
|
|
— |
|
Property
and equipment, net |
|
|
5,843 |
|
|
|
5,910 |
|
Intangible assets, net |
|
|
6,080 |
|
|
|
6,910 |
|
Long-term
assets held for sale |
|
|
— |
|
|
|
7,624 |
|
Total assets |
|
$ |
117,007 |
|
|
$ |
91,858 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable and other accrued liabilities |
|
$ |
7,350 |
|
|
$ |
10,518 |
|
Accrued
compensation |
|
|
4,626 |
|
|
|
4,009 |
|
Deferred
revenue, current portion |
|
|
— |
|
|
|
811 |
|
Current
portion of long-term debt |
|
|
3,333 |
|
|
|
— |
|
Other
short-term liabilities |
|
|
3,201 |
|
|
|
278 |
|
Current
liabilities held for sale |
|
|
— |
|
|
|
3,928 |
|
Total current liabilities |
|
|
18,510 |
|
|
|
19,544 |
|
Deferred
revenue, net of current portion |
|
|
— |
|
|
|
2,896 |
|
Long-term
debt, net |
|
|
15,728 |
|
|
|
18,383 |
|
Other
liabilities |
|
|
734 |
|
|
|
469 |
|
Total liabilities |
|
|
34,972 |
|
|
|
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; 21,605,716 and
20,271,737 shares issued and outstanding at December 31, 2017
and December 31, 2016, respectively |
|
|
22 |
|
|
|
20 |
|
Additional paid-in
capital |
|
|
155,837 |
|
|
|
151,271 |
|
Accumulated other
comprehensive loss |
|
|
(105 |
) |
|
|
(33 |
) |
Contribution receivable
from former parent |
|
|
— |
|
|
|
(20,000 |
) |
Accumulated
deficit |
|
|
(73,719 |
) |
|
|
(80,692 |
) |
Total stockholders'
equity |
|
|
82,035 |
|
|
|
50,566 |
|
Total liabilities and
stockholders' equity |
|
$ |
117,007 |
|
|
$ |
91,858 |
|
|
Aptevo Therapeutics
Inc.CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share
amounts)
|
|
For the Year Ended
December 31, |
|
|
|
2017 |
|
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
Product
sales |
|
$ |
10,949 |
|
|
$ |
9,805 |
|
Collaborations |
|
|
3,709 |
|
|
|
180 |
|
Total revenues |
|
|
14,658 |
|
|
|
9,985 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
product sales |
|
|
5,010 |
|
|
|
12,467 |
|
Research
and development |
|
|
29,021 |
|
|
|
29,120 |
|
Selling,
general and administrative |
|
|
34,576 |
|
|
|
36,158 |
|
Impairment of goodwill and intangible assets |
|
|
— |
|
|
|
71,013 |
|
Loss from
operations |
|
|
(53,949 |
) |
|
|
(138,773 |
) |
Other expense: |
|
|
|
|
|
|
|
|
Other
expense |
|
|
(1,944 |
) |
|
|
(810 |
) |
Total other
expense |
|
|
(1,944 |
) |
|
|
(810 |
) |
Loss before income
taxes |
|
|
(55,893 |
) |
|
|
(139,583 |
) |
Benefit from income
taxes |
|
|
23,301 |
|
|
|
19,692 |
|
Net loss from
continuing operations |
|
|
(32,592 |
) |
|
|
(119,891 |
) |
Discontinued operations
(Note 2): |
|
|
|
|
|
|
|
|
Income
from discontinued operations, before income taxes |
|
|
62,864 |
|
|
|
11,828 |
|
Income
tax expense |
|
|
(23,299 |
) |
|
|
(4,352 |
) |
Income from
discontinued operations |
|
|
39,565 |
|
|
|
7,476 |
|
Net income (loss) |
|
$ |
6,973 |
|
|
$ |
(112,415 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted net
income (loss) per share: |
|
|
|
|
|
|
|
|
Net loss from
continuing operations |
|
$ |
(1.53 |
) |
|
$ |
(5.92 |
) |
Net income from
discontinued operations |
|
$ |
1.86 |
|
|
$ |
0.37 |
|
Net income (loss) |
|
$ |
0.33 |
|
|
$ |
(5.55 |
) |
Weighted-average shares
used to compute per share calculation |
|
|
21,335,157 |
|
|
|
20,239,160 |
|
|
|
Aptevo Product Portfolio
Marketed Product:
- IXINITY (coagulation factor IX [recombinant])
– is a third-generation recombinant human coagulation factor IX
approved in the United States for the control and prevention of
bleeding episodes and for perioperative management in adults and
children 12 years of age or older with Hemophilia B.
ADAPTIR Clinical and Preclinical
Pipeline:
- Otlertuzumab – a monospecific ADAPTIR
candidate currently in Phase 2 clinical development for the
treatment of peripheral T-cell lymphoma (PTCL). A previous
Phase 2 clinical study evaluating otlertuzumab for the treatment of
chronic lymphocytic leukemia (CLL) showed that otlertuzumab in
combination with bendamustine, compared to bendamustine alone,
demonstrated a significant increase in median progression free
survival for the combination, from approximately 10 to 16
months.
- APVO414 – a bispecific ADAPTIR candidate,
currently in Phase 1 development, targeting prostate specific
membrane antigen (PSMA), an enzyme that is expressed on the surface
of prostate cancer cells, and, CD3, a component of the T cell
receptor complex expressed on all T cells. APVO414 redirects
T cells to specifically kill PSMA expressing tumors and is being
developed for metastatic castration-resistant prostate cancer,
which is advanced prostate cancer that has spread to other organs
and no longer responds to hormone blocking therapies.
- APVO436 – a bispecific ADAPTIR candidate
currently in preclinical development targeting CD123, a cell
surface receptor highly expressed on several hematological
malignancies and CD3, a component of the T cell receptor. APVO436
engages T cells to initiate killing of tumor cells. Aptevo
intends to file an IND and begin clinical development of APVO436 in
2018.
- ALG.APV-527 – a bispecific antibody candidate,
partnered with Alligator Bioscience, featuring a novel mechanism of
action designed to simultaneously target 4-1BB (CD137) and 5T4, a
tumor antigen widely overexpressed in a number of different types
of cancer. 4-1BB, a costimulatory receptor on T cells, is
known to enhance the immune response to cancer through activation
of tumor-specific T cells and is believed to be a promising target
for new immunotherapeutic approaches. ALG.APV-527 could potentially
have utility in the treatment of a broad spectrum of cancers
over-expressing the tumor antigen, including breast, cervical,
non-small-cell-lung, prostate, renal, gastric, colorectal and
bladder cancers.
- APVO210 – a bispecific ADAPTIR preclinical
candidate with a novel mechanism of action based on targeted
cytokine delivery. APVO210 is composed of a humanized
anti-CD86 antibody fused with a modified form of IL-10 that
specifically induces IL-10 signaling on antigen presenting cells,
but not on lymphoid populations. APVO210 functions by suppressing
immune responses and inducing certain tolerogenic responses and
therefore may have potential benefit for the treatment of
autoimmune and inflammatory diseases. Aptevo intends to file
an IND for APVO210 in 2018.
- ROR1 Bispecific – a proof-of-concept
bispecific candidate targeting ROR1, an antigen found on several
solid tumors and hematologic, or blood-related malignancies.
Initial preclinical data demonstrate redirected T cell killing of
tumors expressing ROR1 in vitro and in vivo in animal models.
About Aptevo Therapeutics
Inc.Aptevo Therapeutics Inc. is a clinical-stage
biotechnology company focused on novel oncology and hematology
therapeutics to meaningfully improve patients’ lives. Aptevo
has a commercial product, IXINITY® coagulation factor IX
(recombinant), approved and marketed in the United States for the
treatment of Hemophilia B, and a versatile core technology – the
ADAPTIR™ modular protein technology platform capable of generating
highly-differentiated bispecific antibodies with unique mechanisms
of action to treat cancer or autoimmune diseases. Aptevo has
two ADAPTIR antibody candidates currently in clinical development
and a broad pipeline of novel investigational-stage bispecific
antibody candidates focused in immuno-oncology and autoimmune
disease and inflammation. For more information, please visit
www.aptevotherapeutics.com
Safe Harbor StatementThis 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 potential milestone
payments, Aptevo’s outlook, financial performance or financial
condition, Aptevo’s technology and related pipeline, collaboration
and partnership opportunities, commercial portfolio, milestones,
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 Aptevo’s actual results to differ materially from those
indicated by such forward-looking statements, including a
deterioration in Aptevo’s business or prospects; adverse
developments in research and development; 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 Aptevo’s filings with the Securities and Exchange
Commission, including its most recent Annual Report on Form 10-K,
as filed on March 13, 2018 and its 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 Aptevo’s expectations in any forward-looking statement.
Source: Aptevo Therapeutics Stacey
JurchisonSenior Director, Investor Relations and Corporate
Communications206-859-6628 JurchisonS@apvo.com
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