Akari Announces Third Quarter 2018 Financial Results and Business Highlights
November 15 2018 - 6:50AM
Akari Therapeutics, Plc (NASDAQ:AKTX), a biopharmaceutical company
focused on innovative therapeutics to treat orphan autoimmune and
inflammatory diseases where complement and or leukotriene systems
are implicated, today announced its financial results for the third
quarter ended September 30, 2018.
“We are focused on moving our four priority clinical programs
forward and expect initial data from our trials in patients with
bullous pemphigoid (BP) and atopic keratoconjunctivitis (AKC) in
the first quarter of 2019,” commented Clive Richardson, Interim
Chief Executive Officer of Akari Therapeutics.
Clinical development highlights and upcoming
milestones
- Coversin clinical trials focused on orphan diseases mediated by
both the complement and leukotriene pathways with initial data
readouts expected in the first quarter 2019:° Phase II trial
in patients with BP, a severe blistering skin disease° Phase
I/II trial in patients with AKC, a sight-threatening surface of the
eye condition
- Coversin clinical trials in orphan diseases in which complement
dysregulation is the primary disease driver:° Two trials
open in PNH: a Phase III trial in naïve patients and a Phase II
trial in patients who are resistant to eculizumab° An open
Phase II trial in atypical hemolytic syndrome (aHUS), a severe
thrombotic microangiopathy° Ongoing named patient program in
pediatric patients with thrombotic microangiopathy (TMA) post bone
marrow transplant
- Long-term safety study for Coversin° Total
cumulative number of patient-years on Coversin treatment
approximately 15 years° All patients in the long term study
have now been treated for more than 15 months and the first patient
has now been treated for 34 months° No drug related serious
adverse events and no neutralizing antibodies reported to
date° Six PNH patients were transfusion dependent prior to
treatment with Coversin, of which four in the long-term study are
now transfusion independent; two remain on transfusion.
Third Quarter 2018 Financial Results
- Research and development (R&D) expenses in the third
quarter of 2018 were $3.3 million, as compared to $6.4 million in
the same quarter the prior year. The decrease was due primarily to
lower manufacturing costs for Coversin as the Company had
previously manufactured clinical trial material for supply through
2019, partially offset by higher clinical trial
activity.
- General and administrative (G&A) expenses in the third
quarter of 2018 were $2.4 million, as compared to $2.2 million in
the same quarter last year. This increase was due primarily to
higher professional fees.
- Operating expenses were $3.0 million in the third quarter of
2018. Excluding a $2.7 million one-time litigation settlement gain,
operating expenses were $5.7 million in the third quarter of 2018,
as compared to $8.5 million in the same quarter the prior year.
This decrease is primarily due to lower R&D expenses.
- Total other expense for the third quarter of 2018 was $0.6
million, as compared to $1.8 million in the same quarter the prior
year. This change was primarily attributed to a $0.7 million loss
in fair value of the stock option liabilities in the third quarter
of 2018, compared to a $1.7 million loss in the third quarter of
2017.
- Net loss for the third quarter of 2018 was $3.6 million,
compared to a net loss of $10.4 million for the same period in
2017. This year over year decrease in net loss was due primarily to
the aforementioned $2.7 million litigation settlement gain, lower
R&D expenses and change in fair value of the stock option and
warrant liabilities, which were lower in the third quarter of 2018
compared to the prior year period.
- As of September 30, 2018, the Company had cash of $10.1
million, as compared to cash of $28.1 million as of December 31,
2017.
- In addition, on September 26, 2018, the Company entered into a
securities purchase agreement (the “Purchase Agreement”) with
Aspire Capital Fund, LLC (“Aspire Capital”), which provides that,
upon the terms, Aspire Capital is committed to purchase up to an
aggregate of $20.0 million of the Company’s ADSs over the 30-month
term of the Purchase Agreement. In consideration for entering into
the Purchase Agreement, concurrently with the execution of the
Purchase Agreement, the Company issued 30,000,000 ordinary shares
to Aspire Capital and sold to Aspire Capital 25,000,000 ordinary
shares for $0.02 per share (equivalent to $2.00 per ADS and
$500,000).
About Akari Therapeutics
Akari is a biopharmaceutical company focused on developing
inhibitors of acute and chronic inflammation, specifically for the
treatment of rare and orphan diseases, in particular those where
the complement (C5) or leukotriene (LTB4) systems, or both
complement and leukotrienes together, play a primary role in
disease progression. Akari's lead drug candidate, Coversin, is a C5
complement inhibitor that also independently and specifically
inhibits leukotriene B4 (LTB4) activity. Coversin is currently
being clinically evaluated in four indications: bullous pemphigoid
(BP), atopic keratoconjunctivitis (AKC), atypical hemolytic uremic
syndrome (aHUS), and paroxysmal nocturnal hemoglobinuria (PNH).
Akari believes that the dual action of Coversin on both C5 and LTB4
may be beneficial in AKC, BP, and aHUS. Akari is also developing
other tick derived proteins, including longer acting versions.
Cautionary Note Regarding Forward-Looking
Statements
Certain statements in this press release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements reflect our current views about our plans, intentions,
expectations, strategies and prospects, which are based on the
information currently available to us and on assumptions we have
made. Although we believe that our plans, intentions, expectations,
strategies and prospects as reflected in or suggested by those
forward-looking statements are reasonable, we can give no assurance
that the plans, intentions, expectations or strategies will be
attained or achieved. Furthermore, actual results may differ
materially from those described in the forward-looking statements
and will be affected by a variety of risks and factors that are
beyond our control. Such risks and uncertainties for our company
include, but are not limited to: needs for additional capital to
fund our operations, our ability to continue as a going concern;
uncertainties of cash flows and inability to meet working capital
needs; an inability or delay in obtaining required regulatory
approvals for Coversin and any other product candidates, which may
result in unexpected cost expenditures; our ability to obtain
orphan drug designation in additional indications; risks inherent
in drug development in general; uncertainties in obtaining
successful clinical results for Coversin and any other product
candidates and unexpected costs that may result therefrom;
difficulties enrolling patients in our clinical trials; failure to
realize any value of Coversin and any other product candidates
developed and being developed in light of inherent risks and
difficulties involved in successfully bringing product candidates
to market; inability to develop new product candidates and support
existing product candidates; the approval by the FDA and EMA and
any other similar foreign regulatory authorities of other competing
or superior products brought to market; risks resulting from
unforeseen side effects; risk that the market for Coversin may not
be as large as expected; risks associated with the departure of our
former Chief Executive Officers and other executive officers; risks
related to material weaknesses in our internal controls over
financial reporting and risks relating to the ineffectiveness of
our disclosure controls and procedures; risks associated with the
putative shareholder class action and SEC investigation; inability
to obtain, maintain and enforce patents and other intellectual
property rights or the unexpected costs associated with such
enforcement or litigation; inability to obtain and maintain
commercial manufacturing arrangements with third party
manufacturers or establish commercial scale manufacturing
capabilities; the inability to timely source adequate supply of our
active pharmaceutical ingredients from third party manufacturers on
whom the company depends; unexpected cost increases and
pricing pressures and risks and other risk factors detailed in our
public filings with the U.S. Securities and Exchange Commission,
including our most recently filed Annual Report on Form 20-F filed
with the SEC on July 18, 2018. Except as otherwise noted, these
forward-looking statements speak only as of the date of this press
release and we undertake no obligation to update or revise any of
these statements to reflect events or circumstances occurring after
this press release. We caution investors not to place considerable
reliance on the forward-looking statements contained in this press
release.
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AKARI THERAPEUTICS, Plc |
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
As of September 30, 2018 and December 31, 2017 |
(in U.S. Dollars, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2018 |
|
December 31, 2017 |
Assets |
(Unaudited) |
|
|
|
|
|
|
Current
Assets: |
|
|
|
Cash |
$ |
10,073,345 |
|
|
$ |
28,106,671 |
|
Prepaid
expenses and other current assets |
|
1,382,472 |
|
|
|
706,415 |
|
Deferred
Financing Costs |
|
585,000 |
|
|
|
- |
|
Total
Current Assets |
|
12,040,817 |
|
|
|
28,813,086 |
|
|
|
|
|
Restricted cash |
|
521,620 |
|
|
|
142,235 |
|
Property and equipment,
net |
|
29,955 |
|
|
|
55,898 |
|
Patent acquisition
costs, net |
|
34,839 |
|
|
|
39,124 |
|
Total
Assets |
$ |
12,627,231 |
|
|
$ |
29,050,343 |
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
Accounts
payable |
$ |
1,404,496 |
|
|
$ |
1,971,161 |
|
Accrued
expenses |
|
1,710,693 |
|
|
|
4,795,873 |
|
Liabilities related to options and warrants |
|
3,004,207 |
|
|
|
5,081,335 |
|
Other
current liabilities |
|
29,792 |
|
|
|
- |
|
Total
Current Liabilities |
|
6,149,188 |
|
|
|
11,848,369 |
|
|
|
|
|
Other
long-term liabilities |
|
175,055 |
|
|
|
48,003 |
|
Total
liabilities |
|
6,324,243 |
|
|
|
11,896,372 |
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
Shareholders'
Equity: |
|
|
|
Share
capital GBP of .01 par value |
|
|
|
Authorized: 10,000,000,000 ordinary shares; issued and
outstanding: |
|
|
|
1,580,693,413 at September 30, 2018 and 1,525,693,393 at December
31, 2017, respectively |
|
23,651,277 |
|
|
|
22,927,534 |
|
Additional paid-in capital |
|
106,239,087 |
|
|
|
104,799,550 |
|
Accumulated other comprehensive loss |
|
(296,483 |
) |
|
|
(236,246 |
) |
Accumulated deficit |
|
(123,290,893 |
) |
|
|
(110,336,867 |
) |
Total Shareholders'
Equity |
|
6,302,988 |
|
|
|
17,153,971 |
|
Total Liabilities and
Shareholders' Equity |
$ |
12,627,231 |
|
|
$ |
29,050,343 |
|
|
|
|
|
AKARI THERAPEUTICS, Plc |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS-UNAUDITED |
For the Three and Nine Months Ended September 30, 2018
and September 30, 2017 |
(in U.S. Dollars) |
|
|
|
|
|
|
|
Nine Months Ended |
Three Months Ended |
|
September 30, 2018 |
September 30, 2017 |
|
September 30, 2018 |
September 30, 2017 |
Operating
Expenses: |
|
|
|
|
|
Research
and development costs |
$ |
9,433,018 |
|
$ |
16,167,426 |
|
|
$ |
3,303,790 |
|
$ |
6,382,542 |
|
General
and administrative expenses |
|
8,537,191 |
|
|
8,006,097 |
|
|
|
2,382,153 |
|
|
2,158,656 |
|
Litigation settlement gain |
|
(2,700,000 |
) |
|
- |
|
|
|
(2,700,000 |
) |
|
- |
|
Total Operating
Expenses |
|
15,270,209 |
|
|
24,173,523 |
|
|
|
2,985,943 |
|
|
8,541,198 |
|
Loss from
Operations |
|
(15,270,209 |
) |
|
(24,173,523 |
) |
|
|
(2,985,943 |
) |
|
(8,541,198 |
) |
|
|
|
|
|
|
Other Income
(Expense): |
|
|
|
|
|
Interest
income |
|
198,146 |
|
|
124,357 |
|
|
|
66,073 |
|
|
46,906 |
|
Changes
in fair value of option and warrant liabilities - (loss) gain |
|
2,077,128 |
|
|
1,010,005 |
|
|
|
(715,846 |
) |
|
(1,657,783 |
) |
Foreign
currency exchange gain (loss) |
|
42,481 |
|
|
(231,326 |
) |
|
|
36,036 |
|
|
(218,274 |
) |
Other
expenses (income) |
|
(1,572 |
) |
|
(10,615 |
) |
|
|
6,425 |
|
|
(6,226 |
) |
Total Other Income
(Expense) |
|
2,316,183 |
|
|
892,421 |
|
|
|
(607,312 |
) |
|
(1,835,377 |
) |
|
|
|
|
|
|
Net
Loss |
|
(12,954,026 |
) |
|
(23,281,102 |
) |
|
|
(3,593,255 |
) |
|
(10,376,575 |
) |
|
|
|
|
|
|
Other
Comprehensive Loss: |
|
|
|
|
|
Foreign
Currency Translation Adjustment |
|
(60,237 |
) |
|
(8,302 |
) |
|
|
(65,848 |
) |
|
85,428 |
|
|
|
|
|
|
|
Comprehensive Loss |
$ |
(13,014,263 |
) |
$ |
(23,289,404 |
) |
|
$ |
(3,659,103 |
) |
$ |
(10,291,147 |
) |
|
|
|
|
|
|
Loss per
common share (basic and diluted) |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
|
$ |
(0.00 |
) |
$ |
(0.01 |
) |
|
|
|
|
|
|
Weighted
average common shares (basic and diluted) |
|
1,526,700,724 |
|
|
1,177,693,386 |
|
|
|
1,528,682,540 |
|
|
1,177,693,393 |
|
|
|
|
|
|
|
For more informationInvestor Contact:
Peter VozzoWestwicke Partners(443)
213-0505peter.vozzo@westwicke.com
Media Contact:
Mary-Jane Elliott / Sukaina Virji / Nicholas BrownConsilium
Strategic Communications+44 (0)20 3709
5700Akari@consilium-comms.com
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