Ayala Pharmaceuticals Reports Third Quarter 2020 Financial Results and Provides Business Update
November 17 2020 - 8:01AM
Ayala Pharmaceuticals, Inc. (Nasdaq: AYLA), a clinical-stage
oncology company focused on developing and commercializing small
molecule therapeutics for patients suffering from rare and
aggressive cancers, primarily in genetically defined patient
populations, today reported financial results for the third quarter
ended September 30, 2020 and highlighted recent progress and
upcoming milestones for its pipeline programs.
“Ayala has made important steps forward in just over a quarter
since our IPO as we have laid a strong financial and clinical
foundation to support several upcoming milestones throughout the
remainder of 2020 and into 2021. Most importantly, we announced
encouraging new interim data from our Phase 2 ACCURACY study of
AL101 in an extremely difficult to treat population, R/M ACC,
demonstrating that AL101 4mg monotherapy has the potential to be a
safe and effective treatment for patients with Notch activating
mutations. These data further support our rationale for evaluating
the 6mg dose cohort of this study for which we remain on track with
enrollment,” said Roni Mamluk, Ph.D., Chief Executive Officer of
Ayala. “Our broader pipeline focused on genetically defined cancers
continues to advance and we look forward to commencing patient
dosing of our Phase 2 TENACITY study of AL101 for the treatment of
R/M TNBC by year-end 2020, as well as additional trial initiations
for desmoid tumors in the first half of 2021 and T-ALL in the
second half of 2021.”
Key Business and Clinical Highlights
- Presented Updated
Positive Interim Data from Phase 2
ACCURACY Study of AL101 for the Treatment of Recurrent/Metastatic
Adenoid Cystic Carcinoma at European Society for Medical Oncology
(ESMO) Virtual Congress 2020: In September 2020, Ayala
presented updated interim data from the 4mg cohort of its ongoing
Phase 2 ACCURACY study of AL101 for the treatment of
recurrent/metastatic adenoid cystic carcinoma (R/M ACC) harboring
Notch activating mutations, demonstrating meaningful clinical
activity of AL101 4mg monotherapy with a 68% disease control rate
across 40 evaluable patients. Partial responses were observed in
six subjects (15%) and stable disease was observed in 21 subjects
(53%).
Upcoming Milestones
- Patient Enrollment in 6mg Cohort of Phase 2 ACCURACY
Study Ongoing: Ayala continues to enroll patients in the
6mg cohort of the Phase 2 ACCURACY study of AL101 for the treatment
of R/M ACC, which will contain up to 42 subjects. The Company
expects to provide further trial progress updates in the first half
of 2021.
- Trial in Progress Poster of Phase 2 TENACITY Study of
AL101 Monotherapy in Patients with Notch-Activated Triple-Negative
Breast Cancer to be Presented at The 2020 Virtual San Antonio
Breast Cancer Symposium (SABCS): A trial in progress
poster will be presented on December 9, 2020. Ayala expects to
initiate patient dosing before year-end 2020.
- On Track to Initiate Two Phase 2 Clinical Trials in
2021: ○ Phase 2 Study of AL102 for the
Treatment of Desmoid Tumors: Ayala expects to initiate a
Phase 2 study of AL102, a potent, selective, oral gamma secretase
inhibitor, in patients with desmoid tumors, rare, disfiguring and
often debilitating soft tissue tumors, in the first half of
2021.○ Phase 2 Study of AL101 for the Treatment
of Relapsed or Refractory T-cell Acute Lymphoblastic
Leukemia: Based on findings from Ayala’s Phase 1 study of
AL101 and supporting data from its preclinical studies, Ayala
expects to initiate a Phase 2 study of AL101 for the treatment of
relapsed or refractory T-cell acute lymphoblastic leukemia (R/R
T-ALL), an aggressive and rare form of T-cell specific leukemia, in
the second half of 2021.
Third Quarter 2020
Financial Results
- Cash Position: Cash and cash equivalents were
$48.8 million as of September 30, 2020, as compared to
$16.7 million as of December 31, 2019.
- Collaboration Revenue: Collaboration revenue
was $0.7 million and $0.8 million for the third quarter of 2020 and
2019, respectively.
- R&D Expenses: Research and development
expenses were $5.4 million for the third quarter of 2020, compared
to $4.4 million for the same period in 2019. The increase was
primarily driven by additional costs in connection with the
advancement of AL101 clinical trials and other preclinical
development.
- G&A Expenses: General and administrative
expenses were $1.9 million for the third quarter of 2020,
compared to $0.9 million for the same period in 2019. The increase
was primarily related to higher costs in connection of becoming a
public company and costs to support the growth of the company.
- Net Loss: Net loss was $7.4 million, or
$0.59 loss per share, for the third quarter of 2020, compared to
$5.0 million, or $1.01 loss per share, for the same
period in 2019, mainly attributable to the advancement of clinical
trials and other preclinical development.
Financial Guidance
Ayala expects its existing cash balance to fund operations
through multiple potential key clinical and development milestones
into the second half of 2022.
About Ayala Pharmaceuticals
Ayala Pharmaceuticals, Inc. is a clinical-stage oncology company
focused on developing and commercializing small molecule
therapeutics for patients suffering from rare and aggressive
cancers, primarily in genetically defined patient populations.
Ayala’s approach is focused on predicating, identifying and
addressing tumorigenic drivers of cancer through a combination of
its bioinformatics platform and next-generation sequencing to
deliver targeted therapies to underserved patient populations. The
company has two product candidates under development, AL101 and
AL102, targeting the aberrant activation of the Notch pathway with
gamma secretase inhibitors to treat a variety of tumors including
Adenoid Cystic Carcinoma, Triple Negative Breast Cancer (TNBC),
T-cell Acute Lymphoblastic Leukemia (T-ALL), Desmoid Tumors and
Multiple Myeloma (MM) (in collaboration with Novartis). Ayala’s
lead product candidate, AL101, has received Fast Track Designation
and Orphan Drug Designation from the U.S. FDA and is currently in a
Phase 2 clinical trial for patients with ACC (ACCURACY) bearing
Notch activating mutations and in a Phase 2 clinical trial for
patients with TNBC (TENACITY) bearing Notch activating mutations
and other gene rearrangements. For more information, visit
www.ayalapharma.com.
Contacts:
Investors: Julie Seidel Stern Investor
Relations, Inc. +1-212-362-1200 Julie.seidel@sternir.com
Ayala Pharmaceuticals: +1-857-444-0553
info@ayalapharma.com
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including statements relating to our
development of AL101 and AL102, the promise and potential impact of
our preclinical or clinical trial data, the timing of and plans to
initiate additional clinical trials of AL101 and AL102, upcoming
milestones, including without limitation the timing and results of
any clinical trials or readouts, and the sufficiency of cash to
fund operations. These forward-looking statements are based on
management’s current expectations. The words “may,” “will,”
“should,” “expect,” “plan,” “anticipate,” “could,” “intend,”
“target,” “project,” “estimate,” “believe,” “predict,” “potential”
or “continue” or the negative of these terms or other similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. These statements are neither promises nor
guarantees, but involve known and unknown risks, uncertainties and
other important factors that may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements, including, but not limited to, the
following: the impact of the COVID-19 pandemic on our operations,
including our preclinical studies and clinical trials, and the
continuity of our business; we have incurred significant losses,
are not currently profitable and may never become profitable; our
need for additional funding; our cash runway; our limited operating
history and the prospects for our future viability; the lengthy,
expensive, and uncertain process of clinical drug development,
including potential delays in regulatory approval; our requirement
to pay significant payments under product candidate licenses; the
approach we are taking to discover and develop product candidates
and whether it will lead to marketable products; the expense,
time-consuming nature and uncertainty of clinical trials;
enrollment and retention of patients; potential side effects of our
product candidates; our ability to develop or to collaborate with
others to develop appropriate diagnostic tests; protection of our
proprietary technology and the confidentiality of our trade
secrets; potential lawsuits for, or claims of, infringement of
third-party intellectual property or challenges to the ownership of
our intellectual property; risks associated with international
operations; our ability to retain key personnel and to manage our
growth; the potential volatility of our common stock; costs and
resources of operating as a public company; unfavorable or no
analyst research or reports; and securities class action litigation
against us. These and other important factors discussed under the
caption “Risk Factors” in Quarterly Report on Form 10-Q for the
three months ended September 30, 2020 filed with the U.S.
Securities and Exchange Commission (SEC) on November 13, 2020 and
our other filings with the SEC could cause actual results to differ
materially from those indicated by the forward-looking statements
made in this press release. Any such forward-looking statements
represent management’s estimates as of the date of this press
release. New risk factors and uncertainties may emerge from time to
time, and it is not possible to predict all risk factors and
uncertainties. While we may elect to update such forward-looking
statements at some point in the future, except as required by law,
we disclaim any obligation to do so, even if subsequent events
cause our views to change. Although we believe the expectations
reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct.
These forward-looking statements should not be relied upon as
representing our views as of any date subsequent to the date of
this press release.
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AYALA
PHARMACEUTICALS, INC. CONSOLIDATED BALANCE
SHEETS |
(In thousands,
except share and per share amounts) |
|
September 30, 2020 |
|
December 31, 2019 |
|
(Unaudited) |
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
Cash and Cash Equivalents |
$ |
48,749 |
|
|
$ |
16,725 |
|
Short-term Restricted Bank Deposits |
|
84 |
|
|
|
83 |
|
Trade Receivables |
|
589 |
|
|
|
469 |
|
Prepaid Expenses and other Current Assets |
|
2,329 |
|
|
|
417 |
|
Total
Current Assets |
|
51,751 |
|
|
|
17,694 |
|
LONG-TERM ASSETS: |
|
|
|
|
|
|
|
Other Assets |
$ |
285 |
|
|
$ |
283 |
|
Deferred Offering Costs |
|
— |
|
|
|
656 |
|
Property and Equipment, Net |
|
1,357 |
|
|
|
1,421 |
|
Total
Long-Term Assets |
|
1,642 |
|
|
|
2,360 |
|
Total
Assets |
$ |
53,393 |
|
|
$ |
20,054 |
|
LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS
EQUITY (DEFICIT): |
|
|
|
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|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
Trade
Payables |
$ |
3,646 |
|
|
$ |
2,922 |
|
Other
Accounts Payables |
|
2,353 |
|
|
|
2,380 |
|
Total
Current Liabilities |
|
5,999 |
|
|
|
5,302 |
|
LONG
TERM LIABILITIES: |
|
|
|
|
|
|
|
Long-term Rent Liability |
|
462 |
|
|
|
299 |
|
Total Long-Term Liabilities |
$ |
462 |
|
|
$ |
299 |
|
Convertible
Preferred Stock, $0.01 par value: |
|
|
|
|
|
|
|
Series A
Preferred Stock of $0.01 par value per share; 3,700,000 shares
authorized at December 31, 2019 and none on September 30, 2020
respectively; 3,679,778 issued and outstanding shares at December
31, 2019 and none on September 30, 2020; aggregate liquidation
preference value of $23,919 and $0 at December 31, 2019 and
September 30, 2020 respectively |
$ |
— |
|
|
$ |
23,823 |
|
Series B Preferred Stock of $0.01 par value per share;
4,500,000 shares authorized at December 31, 2019 and none on
September 30, 2020 respectively; 3,750,674 issued and outstanding
shares at December 31, 2019 and none on September 30, 2020;
aggregate liquidation preference value of $29,668 and $0 at
December 31, 2019 and September 30, 2020 respectively |
|
— |
|
|
|
29,550 |
|
Total
Convertible Preferred Stock |
$ |
— |
|
|
$ |
53,373 |
|
STOCKHOLDERS’ STOCKHOLDERS’ DEFICIT: |
|
|
|
|
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|
|
Common Stock
of $0.01 par value per share; 20,000,000 shares authorized at
December 31, 2019 and September 30, 2020; 5,064,722 and 12,781,909
shares issued at December 31, 2019 and September 30, 2020,
respectively; 4,998,874 and 12,670,160 shares outstanding at
December 31, 2019 and September 30, 2020, respectively |
$ |
127 |
|
|
$ |
51 |
|
Additional Paid-in Capital |
|
108,294 |
|
|
|
1,770 |
|
Accumulated Deficit |
|
(61,489 |
) |
|
|
(40,741 |
) |
Total
Stockholders’ Equity (Deficit) |
|
46,932 |
|
|
|
(38,920 |
) |
Total
Liabilities, Convertible Preferred Stock, and Stockholders’
Equity |
$ |
53,393 |
|
|
$ |
20,054 |
|
|
|
|
|
|
|
|
|
|
AYALA PHARMACEUTICAL, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)(In thousands, except share & per
share amounts) |
|
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For the Three Months
ended September 30, |
|
For the Nine Months ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues from licensing
agreement |
$ |
658 |
|
|
$ |
845 |
|
|
$ |
2,704 |
|
|
$ |
1,962 |
|
Cost of services |
|
658 |
|
|
|
485 |
|
|
|
2,704 |
|
|
|
910 |
|
Gross profit |
|
— |
|
|
|
360 |
|
|
|
— |
|
|
|
1,052 |
|
Operating expenses: |
|
|
|
|
Research and development |
|
5,421 |
|
|
|
4,372 |
|
|
|
15,616 |
|
|
|
10,563 |
|
General and administrative |
|
1,862 |
|
|
|
945 |
|
|
|
4,719 |
|
|
|
2,814 |
|
Operating loss |
|
(7,283 |
) |
|
|
(4,957 |
) |
|
|
(20,335 |
) |
|
|
(12,325 |
) |
Financial loss, net |
|
(40 |
) |
|
|
(51 |
) |
|
|
(38 |
) |
|
|
183 |
|
Loss before income tax |
|
(7,323 |
) |
|
|
(5,008 |
) |
|
|
(20,373 |
) |
|
|
(12,142 |
) |
Taxes on income |
|
(115 |
) |
|
|
(39 |
) |
|
|
(375 |
) |
|
|
(227 |
) |
Net loss attributable to common
stockholders |
|
(7,438 |
) |
|
|
(5,047 |
) |
|
|
(20,748 |
) |
|
|
(12,369 |
) |
Net Loss per share attributable
to common stockholders, basic and diluted |
$ |
(0.59 |
) |
|
$ |
(1.01 |
) |
|
$ |
(2.33 |
) |
|
$ |
(2.49 |
) |
Weighted average common shares
outstanding, basic and diluted |
|
12,664,485 |
|
|
|
4,974,839 |
|
|
|
8,894,182 |
|
|
|
4,974,641 |
|
|
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