Acasti Pharma Inc. (“Acasti or the “Company”) (NASDAQ: ACST –
TSX-V: ACST) today provided a business update and announced its
operating and financial results for the second quarter of fiscal
2021 ended September 30, 2020.
Recent
Events:
TRILOGY 1 & 2 Topline
Results. The Company’s two Phase 3
clinical trials, designated as TRILOGY 1 & 2, were designed to
evaluate the efficacy, safety and tolerability of CaPre in patients
with severe hypertriglyceridemia. The top-line results were
announced on January 13, 2020 and August 31, 2020 respectively, and
neither TRILOGY 1 nor TRILOGY 2 independently reached statistical
significance, and therefore they did not meet their primary
endpoint for lowering triglycerides. Although the triglyceride
reduction in the CaPre arm was one of the largest seen amongst
previously conducted triglyceride reduction studies, the Company
will not file a New Drug Application (NDA) with the U.S. Food and
Drug Administration (FDA) for patients with severe
hypertriglyceridemia and does not plan to conduct additional
clinical trials for CaPre.
Engaged Oppenheimer & Co.
Inc. to Assist in Strategic
Review. On September 29, 2020, the Company announced
that it had engaged Oppenheimer & Co. Inc. as its financial
advisor to assist in the strategic review process. Potential
strategic alternatives that may be explored or evaluated as part of
this review include, but are not limited to, a merger, business
combination or other strategic transaction involving Acasti and/or
CaPre. There is no defined timeline for completion of the review
process.
Reduction in Headcount and
Discontinuation of Substantially all Commercial
and R&D Activities. The Company
initiated a plan in September 2020 to reduce personnel and expenses
to preserve cash and further reduce its operations consistent with
the decision to discontinue substantially all commercialization and
research and development activities. The Company expects to devote
significant time and resources to identifying and evaluating
strategic alternatives, however, there can be no assurance that
such activities will result in any agreements or transactions that
will enhance shareholder value.
Jan D’Alvise, Chief Executive Officer of Acasti,
commented, “We remain committed to maximizing value for our
shareholders, and as previously disclosed, we are actively
exploring and evaluating a range of strategic options. We have also
taken a number of proactive steps to preserve our cash by reducing
staff, discontinuing all commercialization activities and putting
R&D activities on hold. This has resulted in certain one-time
and non-cash charges as reflected in our financial statements this
quarter. While we continue to pursue strategic alternatives, we
plan to complete the full data analyses for TRILOGY as contemplated
in the Statistical Analysis Plan, including the pooling of the data
from TRILOGY 1 and 2. As previously disclosed, we plan to provide
an update on the final TRILOGY data when feasible.”
Second Quarter of
Fiscal 2021 Financial Results (US
dollars):
The consolidated financial statements have been
prepared in accordance with generally accepted accounting
principles in the United States of America (“U.S. GAAP”).
- Loss from
operations for the three months September
30, 2020 was $7.8 million, compared to a loss from operations of
$6.3 million for the three months ended September 30, 2019. The
increase was due mainly to impairment charges of $5.3 million, $3.7
million related to intangible assets and $1.6 million related to
production and lab equipment, offset by a reduction in R&D,
general and administrative expenses, and sales and marketing
expenses.
- Net loss for the
three months ended September 30, 2020 was $6.1 million or $0.06 per
share, compared to a net loss of $21.2 million or $0.25 per share
for the three months ended September 30, 2019. The reduction in net
loss, resulted primarily from net financial expenses decreasing to
a gain of $1.9 million for the three months ended September 30,
2020, as compared to net financial expenses of $14.9 million for
the three months ended September 30, 2019. This is due mostly to a
decreased impact from the change in fair value of the derivative
warrant liability as compared to the comparative fiscal quarter in
2019, caused by a proportionately higher decrease in the quarter
over quarter closing share price partly offset by a reduction in
the number of warrants outstanding due to exercises during the
prior year.
- R&D
expenses before depreciation,
amortization and stock-based compensation expenses were $0.8
million for the three months ended September 30, 2020, compared to
$3.3 million for the three months ended September 30, 2019. The net
decrease was mainly attributable to a reduction in salaries and
research contracts with the reduction in R&D activities.
- General and Administrative expenses before
stock-based compensation expenses were $1.1 million for the three
months ended September 30, 2020, compared to $1.1 million for the
three months ended September 30, 2019. This reflects a $0.27
million increase related to legal fees related offset by a decrease
of $0.23 million related to salaries, due to a reversal of bonus
accruals.
- Sales and Marketing
expenses before stock-based compensation expenses were
$0.02 million for the three months ended September 30, 2020,
compared to $0.66 million for the three months ended September 30,
2019. The decrease was mostly due to a reduction in professional
fees as a result of a reclassification of professional and other
expenses to R&D.
- Cash flows Cash
and cash equivalents totaled $11.6 million as of September 30,
2020, compared to $14.2 million at March 31, 2020. Acasti believes
that existing cash will fully fund the Company’s operations through
the second calendar quarter of 2021 or through to an eventual
completion of the evaluation of strategic options, but there can be
no assurance as to when or whether Acasti will complete any
strategic transaction, collaboration or non-dilutive financings. If
the Company cannot raise additional funds or find one or more
strategic partners, it may not be able to realize its assets and
discharge its liabilities in the normal course of business. As a
result, there exists substantial doubt about the Company’s ability
to continue as a going concern, and therefore, realize its assets
and discharge its liabilities in the normal course of
business.
NASDAQ Minimum Bid
Price Rule
On February 28, 2020, Acasti received written
notification from the NASDAQ Listing Qualifications Department for
failing to maintain a minimum bid price of $1.00 per share for the
preceding 30 consecutive business days, as required by NASDAQ
Listing Rule 5550(a)(2) – bid price (the “Minimum Bid Price Rule”).
Under NASDAQ Listing Rule 5810(c)(3)(A) – compliance period, Acasti
initially had 180 calendar days to regain compliance.
On April 17, 2020, Acasti was informed that
NASDAQ had granted temporary regulatory relief related to the
Minimum Bid Price Rule due to the COVID-19 pandemic for all
NASDAQ-listed companies and therefore extended the deadline for
Acasti to regain compliance to November 9, 2020.
On November 11, 2020, Acasti was further
informed that NASDAQ had granted an additional 180 calendar days,
or until May 10, 2021, for Acasti to regain compliance with the
Minimum Bid Price Rule.
Retention Agreements
In connection with its strategic review process,
the Company also announces that, upon the recommendation of the
Governance and Human Resources Committee of the board of directors,
it has entered into retention incentive agreements with Ms. Jan
D’Alvise, the Company’s President and Chief Executive Officer, and
Mr. Pierre Lemieux, the Company’s Chief Operating Officer and Chief
Scientific Officer (the “Retention Agreements”).
The Retention Agreements provide that the
Company will pay Ms. D’Alvise an employment retention incentive of
US $100,000 provided that she remains employed with the Company
until the earlier of April 30, 2021 or the closing of a merger or
like transaction with a third party.
In addition, the Retention Agreements also
provide that the Company will pay each of Ms. D’Alvise and Mr.
Lemieux an amount of up to US $125,000 in the event that certain
milestones are met in relation to the monetization by the Company
of its assets relating to the Company’s drug candidate, CaPre.
The Company also announces the upcoming
departure of Mr. Brian Groch, its Chief Commercial Officer, from
his position with the Company effective December 31, 2020, until
which date he is continuing in his role with Acasti. The Company
would like to thank Mr. Groch for his contributions to the Company
and wishes him well in his future endeavors.
About Acasti
Acasti is a biopharmaceutical innovator that has
historically focused on the research, development and
commercialization of prescription drugs using OM3 fatty acids
delivered both as free fatty acids and bound-to-phospholipid
esters, derived from krill oil. OM3 fatty acids have extensive
clinical evidence of safety and efficacy in lowering triglycerides
in patients with hypertriglyceridemia, or HTG. CaPre, an OM3
phospholipid therapeutic, was being developed for patients with
severe HTG.
Forward
Looking
Statements
Statements in this press release that are not
statements of historical or current fact constitute
“forward-looking information” within the meaning of Canadian
securities laws and “forward-looking statements” within the meaning
of U.S. federal securities laws (collectively, “forward-looking
statements”). Such forward-looking statements involve known and
unknown risks, uncertainties, and other unknown factors that could
cause the actual results of Acasti to be materially different from
historical results or from any future results expressed or implied
by such forward-looking statements. In addition to statements which
explicitly describe such risks and uncertainties, readers are urged
to consider statements labeled with the terms “believes,” “belief,”
“expects,” “intends,” “anticipates,” “potential,” “should,” “may,”
“will,” “plans,” “continue”, “targeted” or other similar
expressions to be uncertain and forward-looking. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Forward-looking statements in this press release include, but are
not limited to, information or statements about Acasti’s strategy,
future operations, prospects and the plans of management; the
outcome of the strategic review process to explore and evaluate
strategic alternatives to enhance shareholder value; and Acasti’s
ability to successfully consummate a strategic transaction.
The forward-looking statements contained in this
press release are expressly qualified in their entirety by this
cautionary statement, the “Special Note Regarding Forward-Looking
Statements” section contained in Acasti’s latest annual report on
Form 10-K and quarterly report on Form 10-Q, which are available on
EDGAR at www.sec.gov/edgar/shtml, on SEDAR at
www.sedar.com and on the investor section of Acasti’s website
at www.acastipharma.com. All forward-looking statements in this
press release are made as of the date of this press release. Acasti
does not undertake to update any such forward-looking statements
whether as a result of new information, future events or otherwise,
except as required by law. The forward-looking statements contained
herein are also subject generally to assumptions and risks and
uncertainties that are described from time to time in Acasti’s
public securities filings with the Securities and Exchange
Commission and the Canadian securities commissions, including
Acasti’s latest annual report on Form 10-K and quarterly report on
Form 10-Q under the caption “Risk Factors”.
Neither NASDAQ, the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Acasti
Contact:
Jan D’AlviseChief Executive OfficerTel:
450-686-4555Email: info@acastipharma.comwww.acastipharma.com
Investor
Contact:
Crescendo Communications, LLCTel:
212-671-1020Email: ACST@crescendo-ir.com
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