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 fourth
quarter and fiscal year ended June 30, 2018.
“We have achieved significant progress across
our broad and diverse portfolio of five ophthalmology development
programs,” said Sue Washer, President and CEO of AGTC. “We expanded
our clinical and medical leadership teams, maintained a robust
balance sheet and ended our fiscal year with strong momentum having
our highest annual enrollment in clinical trials to date.”
Recent Highlights
- AGTC received milestone payments of $12.5 million from Biogen
following the successful enrollment of the first patient of the
first dose group and the first patient of the second dose group in
the company’s Phase 1/2 clinical trial evaluating the safety and
efficacy of an investigational AAV-based gene therapy for the
treatment of X-linked retinitis pigmentosa
(XLRP).
- AGTC strengthened its senior management team by hiring, Lanita
C. Scott, M.D., as Vice President of Clinical Research and Medical
Affairs; and Karen M. Carroll, RN, as Vice President of Clinical
Development Operations. Dr. Scott and Ms. Carroll will leverage
their extensive clinical experience to advance the company’s
portfolio.
AGTC Clinical Program
Update
AGTC continues to enhance its clinical infrastructure resulting
in the acceleration of clinical enrollment in all of the company’s
ongoing clinical trials. These resources have allowed
AGTC to expand patient recruitment efforts, introduce new clinical
trial sites, conduct surgical training and enhance clinical site
support.
XLRP Phase 1/2 Clinical TrialIn
the Phase 1/2 clinical trial of its product candidate for XLRP AGTC
enrolled patients in each of the first two dosing groups and
earned milestone payments of $2.5 million and $10.0 million,
respectively, from Biogen as part of its ongoing collaboration. The
company has three sites open for enrollment with additional sites
expected to launch over the next several months. AGTC has enrolled
5 patients and expects to complete the dose escalation portion of
the XLRP trial in the first quarter of 2019.
ACHM Phase 1/2 Clinical
TrialsThe company is presently enrolling patients in two
parallel Phase 1/2 clinical trials of its product candidates for
achromatopsia (ACHM) caused by mutations in the two most common
ACHM genes, CNGB3 and CNGA3. In the ACHM CNGB3 trial, AGTC has
enrolled a total of 8 patients across three dosing groups.
The company expects to complete the dose escalation portion of the
CNGB3 trial in the first quarter of 2019. In the ACHM CNGA3 trial,
the company has enrolled two patients in the low dose group and its
first international site in Israel has begun genotyping and
screening their patient pool in order to begin enrollment.
XLRS Phase 1/2 Clinical TrialIn
April, AGTC completed its target enrollment of 27 patients in the
Phase 1/2 clinical trial for its x-linked retinoschisis
(XLRS) product candidate as part of the company’s
collaboration with Biogen. The primary endpoint of this clinical
trial is safety, and available data to date have shown that the
XLRS product candidate is generally safe and well
tolerated. In addition to safety, this trial will measure
biologic activity by analyzing changes in a wide number of visual
function, retinal structure, and quality of life assessments. The
company expects to provide topline interim six-month data across
both safety and biologic activity endpoints by the end of 2018 with
the primary analysis of the full twelve-month active trial data to
follow six months later. The company is also expanding the
XLRS trial to include five pediatric patients at the high dose
based on acceptable interim safety data for pediatric patients in
the middle dose group.
AGTC-Bionic Sight
CollaborationThrough the AGTC-Bionic Sight collaboration,
the companies are pursuing the development of a novel optogenetic
therapy to treat patients with advanced retinal disease that
utilizes AGTC's broad experience in gene therapy and ophthalmology
and Bionic Sight's revolutionary neuro-prosthetic device and novel
algorithm for retinal coding. Bionic Sight expects to file the IND
for this product candidate in the first half of 2019.
Financial Results for the Fourth Quarter and Fiscal Year
Ended June 30, 2018
Revenues: Revenue
was $5.4 million for the fourth quarter of 2018 and $24.2
million for the year ended June 30, 2018, compared to $8.3
million and $39.5 million in the comparable periods in fiscal
year 2017. Revenue primarily consists of non-refundable upfront
fees received under the company’s collaboration with Biogen, which
are amortized to collaboration revenue on a straight-line basis
over the estimated service period, milestone revenue and
development services revenue, which primarily consists of
reimbursement of development activities under the Biogen
collaboration. Amortization revenue decreased $19.7 million
for the year ended June 30, 2018 compared to the same period in
2017 primarily due to reaching the end of the XLRP service period
in the first quarter of fiscal year 2018, and to a lesser extent,
due to changes in estimates associated with the period of
performance under the XLRS and preclinical programs.
Milestone revenue increased $2.5 million for the year ended June
30, 2018 compared to the comparable period in 2017 due to AGTC
earning a milestone payment associated with the first patient dosed
in the XLRP Phase 1/ 2 clinical trial. Development
services revenue increased $2.0 million for the year ended June 30,
2018 compared to the same period in 2017 primarily due to
activities associated with the initiation of the XLRP Phase 1/2
clinical trial.
R&D Expenses:
Research and development expenses were $8.8 million for
the fourth quarter of 2018 and $32.2 million for the year ended
June 30, 2018, compared to $8.3 million and $26.2 million
in the comparable periods in fiscal year 2017. The increase in
research and development expenses for the full year was primarily
due to increased spending on general research and discovery
programs, increased spending on the company's clinical programs,
increased sublicense expense associated with the company’s
collaboration arrangement with Biogen on the XLRP program 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 were $3.4 million for the fourth
quarter of 2018 and $14.4 million for the fiscal year ended June
30, 2018, compared to $2.8 million and $11.4 million in
the comparable periods in fiscal year 2017. The increase in
general and administrative expenses for the full year was primarily
due to increased employee-related and corporate expenses to support
the company’s continued expansion.
Tax
Provision: Income tax expense was $138,000 for
the fourth quarter of 2018 and $72,000 for the year ended June 30,
2018 compared to $0.6 million for the fourth quarter of 2017 and
$2.4 million in fiscal year 2017. The fiscal year 2018 tax
expense was primarily driven by the apportionment of income to
certain state jurisdictions where the company had not generated net
operating losses (NOL’s) offset by certain tax credit carryforwards
becoming refundable under The Tax Cuts and Jobs Act of 2017.
The fiscal year 2017 income tax expense 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.
Net Income or Loss:
Net loss was $6.6 million for the fourth quarter of
2018 and $21.3 million for the year ended June 30, 2018, compared
to net loss of $3.2 million and net income of $0.4 million in
the comparable periods in 2017.
Financial Guidance: As of
June 30, 2018, the company's cash, cash equivalents, and
investments amounted to $104.9 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, 2019 to be between $65
and $75 million. These projected cash balances include the $10.0
million milestone payment, less sublicensing fees of approximately
23%, associated with dosing of the fourth patient in the XLRP trial
which was triggered in July 2019.
Conference Call and WebcastAGTC will host a
conference call and webcast to discuss financial results for the
fourth quarter and fiscal year 2018 today at 4:30pm ET.
To access the call, dial 877-407-6184 (US) or 201-389-0877 (outside
of the US). The passcode is 13682770. A live webcast will be
available in the Events and Presentations section of AGTC’s
Investor Relations site
at http://ir.agtc.com/events-and-presentations. 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, and the optogenetics
program is being developed in collaboration with Bionic Sight. 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
progressive vision loss in boys and young men. Characteristics of
the disease include night blindness in early childhood and
progressive constriction of the visual field. In general, XLRP
patients experience a gradual decline in visual acuity over the
disease course, which results in legal blindness around the 4th
decade of life. AGTC was granted U.S. Food and Drug (FDA)
orphan drug designation in 2017, as well as European
Commission orphan medicinal product designation in 2016, for
its gene therapy product candidate to treat XLRP caused by
mutations in the RPGR gene.
Forward Looking StatementsThis 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, 2018, as amended and 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 BALANCE SHEETS
(Unaudited)
|
|
June 30, |
|
In
thousands, except per share data |
|
2018 |
|
|
2017 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
31,065 |
|
|
$ |
30,706 |
|
Investments |
|
|
73,840 |
|
|
|
95,994 |
|
Grants
receivable |
|
|
210 |
|
|
|
174 |
|
Prepaid
and other current assets |
|
|
4,009 |
|
|
|
3,361 |
|
Total
current assets |
|
|
109,124 |
|
|
|
130,235 |
|
Investments, net of
current portion |
|
|
- |
|
|
|
11,749 |
|
Property and equipment,
net |
|
|
5,254 |
|
|
|
2,661 |
|
Intangible assets,
net |
|
|
968 |
|
|
|
1,219 |
|
Investment in Bionic
Sight |
|
|
1,980 |
|
|
|
2,000 |
|
Other assets |
|
|
1,206 |
|
|
|
59 |
|
Total
assets |
|
$ |
118,532 |
|
|
$ |
147,923 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
945 |
|
|
$ |
998 |
|
Accrued
and other liabilities |
|
|
7,155 |
|
|
|
6,162 |
|
Deferred
revenue |
|
|
6,295 |
|
|
|
20,996 |
|
Total
current liabilities |
|
|
14,395 |
|
|
|
28,156 |
|
Deferred revenue, net
of current portion |
|
|
610 |
|
|
|
4,438 |
|
Other long term
liabilities |
|
|
4,345 |
|
|
|
- |
|
Total
liabilities |
|
|
19,350 |
|
|
|
32,594 |
|
Stockholders'
equity: |
|
|
|
|
|
|
|
|
Common
stock, par value $.001 per share, 150,000 shares authorized;
18,137 and 18,088 shares issued; 18,126 and 18,088 shares
outstanding at June 30, 2018 and June 30, 2017,
respectively |
|
|
18 |
|
|
|
18 |
|
Additional paid-in capital |
|
|
210,139 |
|
|
|
204,937 |
|
Shares
held in treasury of: 11 and 0 at June 30, 2018 and June 30, 2017
respectively |
|
|
(49 |
) |
|
|
- |
|
Accumulated deficit |
|
|
(110,926 |
) |
|
|
(89,626 |
) |
Total
stockholders' equity |
|
|
99,182 |
|
|
|
115,329 |
|
Total
liabilities and stockholders' equity |
|
$ |
118,532 |
|
|
$ |
147,923 |
|
APPLIED GENETIC TECHNOLOGIES
CORPORATION STATEMENTS OF
OPERATIONS
(Unaudited)
|
For the three
months ended June 30, |
|
|
For the
year ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In thousands, except
per share amounts |
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collaboration revenue |
$ |
5,331 |
|
|
$ |
8,323 |
|
|
$ |
24,057 |
|
|
$ |
39,282 |
|
Grant
revenue |
|
85 |
|
|
|
22 |
|
|
|
129 |
|
|
|
191 |
|
Total
revenue |
|
5,416 |
|
|
|
8,345 |
|
|
|
24,186 |
|
|
|
39,473 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
8,827 |
|
|
|
8,301 |
|
|
|
32,181 |
|
|
|
26,217 |
|
General
and administrative |
|
3,368 |
|
|
|
2,847 |
|
|
|
14,389 |
|
|
|
11,354 |
|
Total
operating expenses |
|
12,195 |
|
|
|
11,148 |
|
|
|
46,570 |
|
|
|
37,571 |
|
Income (loss)
from operations |
|
(6,779 |
) |
|
|
(2,803 |
) |
|
|
(22,384 |
) |
|
|
1,902 |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income, net |
|
435 |
|
|
|
253 |
|
|
|
1,301 |
|
|
|
952 |
|
Other
expense |
|
(114 |
) |
|
|
(47 |
) |
|
|
(125 |
) |
|
|
(47 |
) |
Total
other income, net |
|
321 |
|
|
|
206 |
|
|
|
1,176 |
|
|
|
905 |
|
Income (loss)
before provision for income taxes |
|
(6,458 |
) |
|
|
(2,597 |
) |
|
|
(21,208 |
) |
|
|
2,807 |
|
Provision for income
taxes |
|
138 |
|
|
|
600 |
|
|
|
72 |
|
|
|
2,400 |
|
Income (loss)
before equity in net losses of affiliate |
|
(6,596 |
) |
|
|
(3,197 |
) |
|
|
(21,280 |
) |
|
|
407 |
|
Equity in net losses of
affiliate |
|
(15 |
) |
|
|
- |
|
|
|
(20 |
) |
|
|
- |
|
Net income
(loss) |
$ |
(6,611 |
) |
|
$ |
(3,197 |
) |
|
$ |
(21,300 |
) |
|
$ |
407 |
|
Net income
(loss) per share, basic |
$ |
(0.37 |
) |
|
$ |
(0.18 |
) |
|
$ |
(1.18 |
) |
|
$ |
0.02 |
|
Net income
(loss) per share, diluted |
$ |
(0.37 |
) |
|
$ |
(0.18 |
) |
|
$ |
(1.18 |
) |
|
$ |
0.02 |
|
Weighted
average shares outstanding, basic |
|
18,112 |
|
|
|
18,081 |
|
|
|
18,105 |
|
|
|
18,072 |
|
Weighted
average shares outstanding, diluted |
|
18,112 |
|
|
|
18,081 |
|
|
|
18,105 |
|
|
|
18,385 |
|
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 Contact: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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