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Aptevo Therapeutics Reports Third Quarter 2017 Financial Results
Strengthened Cash Position to Support Ongoing R&D and Commercial Activities;
Reported
Expanded Novel Bispecific Antibody Portfolio Through Collaboration with
Advanced New Bispecific Candidates Targeting Cancer and Autoimmune Diseases
“The third quarter was a transformative period for Aptevo,” said
“By monetizing our non-core commercial assets through the sale of our three hyperimmune products to Saol Therapeutics, Aptevo secured up to an additional
“We also made important strides expanding opportunities around our innovative ADAPTIR bispecific antibody platform. Awareness of the differentiating characteristics of our ADAPTIR platform continues to grow in the scientific community and we were pleased to partner with
Third Quarter 2017 Highlights
- Monetized non-core commercial assets and completed the sale of Aptevo’s three hyperimmune products, (WinRho® SDF, HepaGam B®, and VARIZIG®) to Saol Therapeutics for total consideration of up to
$74.5 million , raising significant non-dilutive funding to support Aptevo’s ongoing commercial and R&D efforts - Amended the terms of a credit agreement with MidCap Financial allowing Aptevo to retain a
$20 million investment by MidCap, further extending Aptevo’s cash runway - Signed a collaboration agreement with
Alligator Bioscience to jointly develop and advance a lead bispecific antibody candidate, ALG.APV-527, with a novel mechanism of action targeting 4-1BB and 5T4, a tumor antigen widely overexpressed in a number of different types of cancer - Demonstrated the versatility of the ADAPTIR platform with the development of ALG.APV-527, which targets a co-stimulatory receptor found on activated T cells, illustrating the capability of the ADAPTIR platform to generate immunotherapeutic antibodies with different mechanisms of immune system engagement
- Initiated CMC and IND-enabling activities for APVO436, APVO210, and ALG.APV-527
- Presented preliminary data from an ongoing Phase 1 study of APVO414 (formerly MOR209/ES414) suggesting that administration by continuous infusion, rather than weekly intravenous (IV) dosing, was effective at reducing the level of anti-drug antibodies previously seen in the weekly IV dosing study cohorts
- Continued to advance APVO414 in a dose escalation Phase 1 study following a decision by
MorphoSys to end the companies’ joint development and commercialization agreement for APVO414 (formerly MOR209/ES414) - Continued to expand Aptevo’s new patient acquisition efforts for IXINITY following the introduction of new IXINITY supply in
May 2017
Third Quarter 2017 Financial Results
As a result of the sale of Aptevo’s three hyperimmune products (WinRho SDF, HepaGam B, and VARIZIG) to Saol Therapeutics, completed on
Cash Position: Aptevo had cash, cash equivalents, and short-term investments as of
Product Revenue: Revenue for IXINITY for the three months ended
Cost of Product Sales: Cost of product sales decreased by
Research and Development Expenses: Research and development expenses did not change meaningfully between the three months ended
Selling, General and Administrative Expenses: Selling, general and administrative expenses decreased by
Net Income from Discontinued Operations: In connection with the sale of its hyperimmune business, the Company reclassified the operating results of the hyperimmune business for all periods presented and the gain recognized on the sale of the hyperimmune business of
Net Income (Loss): Aptevo’s net income for the three months ended
Financial Statements Follow
| Aptevo Therapeutics Inc. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except share and per share amounts, unaudited) | ||||||||
| ASSETS | September 30, 2017 |
December 31, 2016 |
||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 75,830 | $ | 9,676 | ||||
| Restricted cash | 10,400 | 400 | ||||||
| Short-term investments | 20,946 | 44,849 | ||||||
| Accounts receivable | 528 | 307 | ||||||
| Inventories | 1,237 | 461 | ||||||
| Current assets held for sale | — | 10,155 | ||||||
| Prepaid expenses and other current assets | 6,381 | 5,566 | ||||||
| Total current assets | 115,322 | 71,414 | ||||||
| Property and equipment, net | 6,163 | 5,910 | ||||||
| Intangible assets, net | 6,287 | 6,910 | ||||||
| Long-term assets held for sale | — | 7,624 | ||||||
| Other long-term assets | 3,250 | — | ||||||
| Total assets | $ | 131,022 | $ | 91,858 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and other accrued liabilities | $ | 7,512 | $ | 10,518 | ||||
| Accrued compensation | 3,815 | 4,009 | ||||||
| Sales rebates and discounts | 378 | 278 | ||||||
| Due to acquirer of discontinued operations | 878 | — | ||||||
| Deferred revenue, current portion | — | 811 | ||||||
| Other short-term liabilities | 2,287 | — | ||||||
| Current liabilities held for sale | — | 3,928 | ||||||
| Total current liabilities | 14,870 | 19,544 | ||||||
| Deferred revenue, net of current portion | — | 2,896 | ||||||
| Long-term debt, net | 17,484 | 18,383 | ||||||
| Other liabilities | 8,358 | 469 | ||||||
| Total liabilities | 40,712 | 41,292 | ||||||
| Stockholders' equity: | ||||||||
| Preferred stock: $0.001 par value; 15,000,000 shares authorized, zero shares issued or outstanding | — | — | ||||||
| Common stock: $0.001 par value; 500,000,000 shares authorized; 21,426,731 and 20,271,737 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 21 | 20 | ||||||
| Additional paid-in capital | 154,257 | 151,271 | ||||||
| Accumulated other comprehensive loss | (10 | ) | (33 | ) | ||||
| Contribution receivable from former parent | — | (20,000 | ) | |||||
| Accumulated deficit | (63,958 | ) | (80,692 | ) | ||||
| Total stockholders' equity | 90,310 | 50,566 | ||||||
| Total liabilities and stockholders' equity | $ | 131,022 | $ | 91,858 | ||||
| Aptevo Therapeutics Inc. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands, except share and per share amounts, unaudited) | ||||||||||||||||
| For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||||||
| 2017 | 2016 Restated |
2017 | 2016 Restated |
|||||||||||||
| Revenues: | ||||||||||||||||
| Product sales | $ | 2,506 | $ | 2,816 | $ | 8,131 | $ | 7,050 | ||||||||
| Collaborations | 3,666 | — | 3,709 | 153 | ||||||||||||
| Total revenues | 6,172 | 2,816 | 11,840 | 7,203 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of product sales | 1,872 | 4,110 | 3,114 | 7,387 | ||||||||||||
| Research and development | 7,175 | 7,077 | 19,835 | 22,759 | ||||||||||||
| Selling, general and administrative | 7,473 | 11,141 | 26,019 | 27,950 | ||||||||||||
| Impairment of goodwill and intangible assets | — | 71,013 | — | 71,013 | ||||||||||||
| Loss from operations | (10,348 | ) | (90,525 | ) | (37,128 | ) | (121,906 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Other expense, net | (436 | ) | (492 | ) | (1,356 | ) | (417 | ) | ||||||||
| Total other expense, net | (436 | ) | (492 | ) | (1,356 | ) | (417 | ) | ||||||||
| Loss before income taxes | (10,784 | ) | (91,017 | ) | (38,484 | ) | (122,323 | ) | ||||||||
| Benefit from income taxes | 13,768 | 17,608 | 15,587 | 18,590 | ||||||||||||
| Net income (loss) from continuing operations | 2,984 | (73,409 | ) | (22,897 | ) | (103,733 | ) | |||||||||
| Discontinued operations (Note 2): | ||||||||||||||||
| Income from discontinued operations, before income taxes | 56,140 | 3,959 | 62,706 | 9,514 | ||||||||||||
| Income tax expense | (21,257 | ) | (2,291 | ) | (23,076 | ) | (3,250 | ) | ||||||||
| Income from discontinued operations | 34,883 | 1,668 | 39,630 | 6,264 | ||||||||||||
| Net income (loss) | $ | 37,867 | $ | (71,741 | ) | $ | 16,733 | $ | (97,469 | ) | ||||||
| Basic net income (loss) per share: | ||||||||||||||||
| Net loss from continuing operations | $ | 0.14 | $ | (3.63 | ) | $ | (1.08 | ) | $ | (5.13 | ) | |||||
| Net income from discontinued operations | $ | 1.63 | $ | 0.08 | $ | 1.87 | $ | 0.31 | ||||||||
| Net income (loss) | $ | 1.77 | $ | (3.55 | ) | $ | 0.79 | $ | (4.82 | ) | ||||||
| Weighted-average shares used to compute per share calculation | 21,385,381 | 20,235,987 | 21,138,332 | 20,231,910 | ||||||||||||
| Diluted net income (loss) per share: | ||||||||||||||||
| Net loss from continuing operations | $ | 0.14 | $ | (3.63 | ) | $ | (1.08 | ) | $ | (5.13 | ) | |||||
| Net income from discontinued operations | $ | 1.61 | $ | 0.08 | $ | 1.87 | $ | 0.31 | ||||||||
| Net income (loss) | $ | 1.75 | $ | (3.55 | ) | $ | 0.79 | $ | (4.82 | ) | ||||||
| Weighted-average shares used to compute per share calculation | 21,672,269 | 20,235,987 | 21,138,332 | 20,231,910 | ||||||||||||
ADAPTIR Clinical and Preclinical Portfolio:
- APVO414 – a bispecific ADAPTIR candidate, currently in Phase 1 development, targeting prostate specific membrane antigen (PSMA), an enzyme that is expressed on the surface of prostate cancer cells, and, CD3, a component of the T cell receptor complex expressed on all T cells. APVO414 redirects T cells to specifically kill PSMA expressing tumors and is being developed for metastatic castration-resistant prostate cancer, which is advanced prostate cancer that has spread to other organs and no longer responds to hormone blocking therapies.
- Otlertuzumab – a monospecific ADAPTIR candidate currently in Phase 2 development for the treatment of chronic lymphocytic leukemia (CLL). Data from a Phase 2 clinical trial evaluating otlertuzumab in combination with bendamustine, compared to bendamustine alone, demonstrated a significant increase in median progression free survival for the combination, from approximately 10 to 16 months.
- APVO436 – a bispecific ADAPTIR candidate currently in preclinical development targeting CD123, a cell surface receptor highly expressed on several hematological malignancies and CD3, a component of the T cell receptor. APVO436 engages T cells to kill tumor cells.
- ALG.APV-527 – a bispecific antibody candidate, partnered with
Alligator Bioscience , featuring a novel mechanism of action designed to simultaneously target 4-1BB (CD137) and 5T4, a tumor antigen widely overexpressed in a number of different types of cancer. 4-1BB, a costimulatory receptor on T cells, is known to enhance the immune response to cancer through activation of tumor-specific T cells and is believed to be a promising target for new immunotherapeutic approaches. ALG.APV-527 could potentially have utility in the treatment of a broad spectrum of cancers over-expressing the tumor antigen, including breast, cervical, non-small-cell-lung, prostate, renal, gastric, colorectal and bladder cancers. - APVO210 – a bispecific ADAPTIR preclinical candidate with a novel mechanism of action based on targeted cytokine delivery. APVO210 is composed of a humanized anti-CD86 antibody fused with a modified form of IL-10 that specifically induces IL-10 signaling on antigen presenting cells, but not on lymphoid populations. APVO210 functions by suppressing immune responses and inducing certain tolerogenic responses and therefore may have potential benefit for the treatment of autoimmune and inflammatory diseases.
- ROR1 Bispecific – a proof-of-concept bispecific candidate targeting ROR1, an antigen found on several solid tumors and hematologic, or blood-related malignancies. Initial preclinical data demonstrate redirected T cell killing of tumors expressing ROR1 in vitro and in vivo in animal models.
About
Safe Harbor Statement
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including, without limitation, statements regarding potential milestone payments, Aptevo’s outlook, financial performance or financial condition, Aptevo’s technology and related pipeline, collaboration and partnership opportunities, commercial portfolio, and any other statements containing the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “forecasts,” “estimates,” “will” and similar expressions are forward-looking statements. These forward-looking statements are based on Aptevo’s current intentions, beliefs and expectations regarding future events. Aptevo cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from Aptevo’s expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks only as of the date of this press release, and, except as required by law, Aptevo does not undertake to update any forward-looking statement to reflect new information, events or circumstances.
There are a number of important factors that could cause Aptevo’s actual results to differ materially from those indicated by such forward-looking statements, including a deterioration in Aptevo’s business or prospects; adverse developments in research and development; adverse developments in the U.S. or global capital markets, credit markets or economies generally; and changes in regulatory, social and political conditions. Additional risks and factors that may affect results are set forth in Aptevo’s filings with the
Source:
Senior Director, Investor Relations and Corporate Communications
206-859-6628
JurchisonS@apvo.com
Source: Aptevo Therapeutics Inc.