CNTB Connect Biopharma Holdings Inc

Connect Biopharma Holdings Limited (Nasdaq: CNTB) (“Connect Biopharma” or the “Company”), a global, clinical-stage biopharmaceutical company dedicated to improving the lives of patients with inflammatory diseases through the development of therapies derived from T cell-driven research, today announced financial results for the full year ended December 31, 2021 and recent corporate highlights.

“During the past year, we advanced the clinical development of our lead assets CBP-201 and CBP-307, each having potentially differentiated product profiles for atopic dermatitis, asthma, chronic rhinosinusitis with nasal polyps, and ulcerative colitis, diseases with large patient populations with significant unmet need,” said Zheng Wei, PhD, Co-founder and CEO of Connect Biopharma. “Our data from the global Phase 2b trial of CBP-201 in patients with atopic dermatitis gives us confidence in the potential that CBP-201 could have a highly competitive efficacy and safety profile with low incidence of conjunctivitis, and the convenience of dosing every four weeks. In the coming 12 months, we have a number of key milestones anticipated for CBP-201, including initiating our global Phase 3 program in atopic dermatitis and completing enrollment in both our pivotal trial in atopic dermatitis in China, and in our Phase 2 trial in asthma. We also look forward to reporting topline results from our Phase 2 trial of CBP-307 in patients with moderate-to-severe ulcerative colitis in the first half of 2022.”

Second Half 2021 and Recent Operating Highlights

• Reported positive data from global Phase 2b trial of CBP-201 in moderate-to-severe atopic dermatitis (AD): In January 2022, the Company reported detailed positive data from the global Phase 2b clinical trial of CBP-201 administered subcutaneously to adult patients with moderate-to-severe AD. CBP-201 met all primary and key secondary efficacy endpoints, with favorable safety data reporting low incidences of injection site reactions, conjunctivitis and herpes infections. In the coming months, the Company intends to discuss these data with the U.S. Food & Drug Administration (FDA) and other regulatory authorities to seek feedback on its planned global Phase 3 program. The Company plans to commence enrollment of the global Phase 3 program in the second half of 2022.
• Completed enrollment of Phase 2 trial of CBP-307 in moderate-to-severe ulcerative colitis (UC): In November 2021, the Company completed full enrollment of the Phase 2 clinical trial evaluating CBP-307 in moderate-to-severe UC. The global, randomized, double-blind, placebo-controlled trial is being conducted at multiple sites, including in China and the U.S., to evaluate the efficacy and safety of CBP-307 in 144 patients, where CBP-307 or placebo were administered to eligible adult patients for 12 weeks (induction phase). Following this 12-week induction phase, treatment responders (as defined by change in the adapted Mayo score from baseline) are expected to be treated for an additional 36 weeks in a double-blind manner, and non-responders are expected to enter an open-label arm and be treated for an additional 36 weeks (maintenance phase).
• Dosed first patient in China-specific pivotal trial of CBP-201 in moderate-to-severe AD: In September 2021, the first patient in a China-specific pivotal trial evaluating CBP-201 with moderate-to-severe AD was dosed. The multi-center, randomized, double-blind, parallel group, placebo-controlled trial was designed to assess the efficacy and safety of up to two doses of CBP-201 administered subcutaneously. The trial has completed its original enrollment of 255 patients across 55 clinical sites in China, which was divided into an initial treatment period of 16 weeks, a maintenance period of 36 weeks and a follow-up period of eight weeks. The Company plans to increase the trial size to approximately 500 patients in order to meet anticipated regulatory requirements around trial size and safety exposures and expects to finalize its trial design with China regulatory authorities by the second half of 2022.
• Dosed first patient in Phase 2 trial of CBP-201 in chronic rhinosinusitis with nasal polyps (CRSwNP): In September 2021, the first patient in a Phase 2 trial evaluating CBP-201 in CRSwNP was dosed. The multi-center, randomized, double-blind, placebo-controlled trial is designed to evaluate the effect of CBP-201 administered subcutaneously on a background of mometasone furoate nasal spray in reducing endoscopic nasal polyp score and nasal congestion/obstruction score severity in eligible patients whose disease remains inadequately controlled despite daily treatment with intranasal corticosteroid therapy in comparison to placebo. The trial is divided into a treatment period of 24 weeks and a follow-up period of eight weeks and is expected to enroll approximately 140 patients with CRSwNP across approximately 60 clinical sites in the United States, China, Europe, and other regions.
• Expanded executive leadership team: Autoimmune and immunology expert, Chin Lee, MD, MPH, and Steven Chan joined Connect Biopharma as Chief Medical Officer and Chief Financial Officer, respectively.

Anticipated 2022 Milestones

• Intend to report top-line results from the global Phase 2b trial of CPB-307 in UC patients in the first half of 2022.
• On track to report top-line results from the global Phase 1 trial evaluating safety and pharmacokinetics of CBP-174 in healthy volunteers in the first half of 2022.
• Plan to complete enrollment for the global Phase 2 trial of CBP-201 in asthma patients in the first half of 2022.
• Plan to initiate a global Phase 3 trial for CBP-201 in moderate-to-severe AD patients in the second half of 2022.
• Plan to complete enrollment for the China-specific pivotal trial for CBP-201 in AD patients in the second half of 2022.

Full Year 2021 Financial Results

• Cash and cash equivalents were RMB 1,706.9 million (USD 267.7 million) as of December 31, 2021, compared to RMB 1,010.1 million as of December 31, 2020. The increase in cash and cash equivalents was mainly due to proceeds received from the Company’s IPO in March 2021.
• Research and development expenses increased to RMB 518.0 million (USD 81.2 million) for the year ended December 31, 2021, from RMB 150.9 million in the year ended December 31, 2020. This increase was driven primarily by higher clinical trial related expenses for advancing CBP-201 in adult patients with moderate-to-severe AD into later clinical trial phases and additional drug supply and clinical expenses related to the initiation of global Phase 2 clinical trials of CBP-201 for asthma and CRSwNP indications and the initiation of a global Phase 2 trial for CBP-307 in UC and Crohn’s Disease (CD) indications.
• Administrative expenses increased to RMB 122.4 million (USD 19.2 million) for the year ended December 31, 2021, from RMB 47.7 million in the year ended December 31, 2020. The increase was primarily due to higher personnel costs, including stock-based compensation expenses, higher professional services and other costs associated with building out a public company infrastructure and supporting clinical trials.
• Net loss was RMB 1,306.8 million (USD 205.0 million) for the year ended December 31, 2021, compared to RMB 779.2 million in the year ended December 31, 2020.

About Connect Biopharma

Connect Biopharma is a global, clinical-stage biopharmaceutical company dedicated to improving the lives of patients with inflammatory diseases through the development of therapies derived from T cell-driven research. It is building a rich pipeline of internally-designed, wholly-owned, small molecules and antibodies using functional cellular assays with T cells to screen and discover potent product candidates against validated immune targets. Its lead product candidate, CBP-201, is an antibody designed to target interleukin-4 receptor alpha (IL-4Rα) in development for the treatment of AD, asthma and CRSwNP. The Company’s second most advanced product candidate, CBP-307, is a modulator of a T-cell receptor known as sphingosine 1-phosphate receptor 1 (S1P1) in development for the treatment of UC and CD. Clinical development has begun for its third product candidate, CBP-174, a peripherally acting antagonist of histamine receptor 3, for the treatment of pruritus associated with AD.

For additional information, please visit www.connectbiopharm.com.

FORWARD-LOOKING STATEMENTS

Connect Biopharma cautions that statements included in this press release that are not a description of historical facts are forward-looking statements. Words such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,” “contemplate,” “potential,” “continue” or “project” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements. These statements include the Company’s statements regarding the size or design of ongoing clinical trials, the timing of initiation, completed enrollment, and dosing of such trials, and the timing of clinical data readouts from such trials and whether such data will validate the Company’s approach in developing potential therapies. The inclusion of forward-looking statements should not be regarded as a representation by Connect Biopharma that any of its plans will be achieved. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in the Company’s business and other risks described in the Company’s filings with the Securities and Exchange Commission (“SEC”). Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Connect Biopharma undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof. Further information regarding these and other risks is included in Connect Biopharma’s filings with the SEC which are available from the SEC’s website (www.sec.gov) and on Connect Biopharma’s website (www.connectbiopharm.com) under the heading “Investors.” All forward-looking statements are qualified in their entirety by this cautionary statement. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.

Consolidated Statements of Loss (Unaudited)
		Year Ended December 31,
		2020					2021				2021
		RMB’000					RMB’000				USD’000(1)
Research and development expenses			(150,932		)			(518,021	)			(81,249	)
Administrative expenses			(47,720		)			(122,445	)			(19,205	)
Other income			6,989					18,996				2,979
Other gains/(losses)—net			(6,100		)			(9,966	)			(1,563	)
Operating loss			(197,763		)			(631,436	)			(99,038	)
Finance income			717					622				98
Finance cost			(2,893		)			(44	)			(7	)
Finance income/(cost)—net			(2,176		)			578				91
Fair value loss of financial instruments with preferred rights			(579,286		)			(674,269	)			(105,756	)
Loss before income tax			(779,225		)			(1,305,127	)			(204,703	)
Income tax expense			—					(1,697	)			(266	)
Net loss			(779,225		)			(1,306,824	)			(204,969	)
		RMB					RMB				USD
Loss per share
Basic and diluted			(45.6		)			(25.0	)			(3.9	)

Condensed Consolidated Balance Sheets (Unaudited)
		As of December 31,
		2020				2021				2021
		RMB’000				RMB’000				USD’000(1)
ASSETS
Non-current assets
Property, plant and equipment			6,939				59,337				9,307
Right-of-use assets			929				22,821				3,579
Other non-current assets			19,860				18,806				2,950
Intangible assets			342				560				88
Total non-current assets			28,070				101,524				15,924
Current assets
Other receivable and prepayments			33,655				47,255				7,412
Financial assets at fair value through profit or loss			13,068				—				—
Cash and cash equivalents			1,010,076				1,706,880				267,716
Total current assets			1,056,799				1,754,135				275,128
Total assets			1,084,869				1,855,659				291,052
LIABILITIES
Non-current liabilities
Lease liabilities			309				163				26
Financial instruments with preferred rights			2,071,508				—				—
Deferred income			—				5,000				784
Total non-current liabilities			2,071,817				5,163				810
Current liabilities
Trade payables			24,638				81,195				12,735
Other payables and accruals			12,755				32,840				5,152
Lease liabilities			604				630				98
Total current liabilities			37,997				114,665				17,985
Total liabilities			2,109,814				119,828				18,795
Net (liabilities)/assets			(1,024,945	)			1,735,831				272,257
SHAREHOLDERS’ (DEFICIT)/EQUITY
Share capital			24				66				10
Share premium			41,466				4,094,434				642,194
Treasury shares			(3	)			(1,164	)			(183	)
Share-based compensation reserves			6,602				61,904				9,709
Other reserves			(1,693	)			(41,244	)			(6,469	)
Accumulated losses			(1,071,341	)			(2,378,165	)			(373,004	)
Total shareholders’ (deficit)/equity			(1,024,945	)			1,735,831				272,257
Total liabilities and shareholders’ (deficit)/equity			1,084,869				1,855,659				291,052

(1) Translations of the consolidated balance sheet and the consolidated statement of loss from RMB into USD as of and for the year ended December 31, 2021 are solely for the convenience of the readers and calculated at the rate of USD1.00=RMB 6.3757, representing the exchange rate as of December 31, 2021 set forth in the China Foreign Exchange Trade System. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate, or at any other rate, on December 31, 2021.

INVESTOR CONTACT:David CareyLazar FINN PartnersT: +1-(212) 867-1768david.carey@finnpartners.com

MEDIA CONTACT:Erich SandovalLazar FINN Partners+1-(646) 871-8482 or +1-(917) 497-2867erich.sandoval@finnpartners.com

Corporate Contacts:info@connectpharm.com