Homology Medicines Reports Second Quarter 2018 Financial Results
BEDFORD, Mass., Aug. 13, 2018 /PRNewswire/ -- Homology Medicines, Inc. (Nasdaq: FIXX), a genetic medicines company, announced today financial results for the quarter ended June 30, 2018, and highlighted recent accomplishments.
"During the quarter, we progressed IND-enabling studies of our gene therapy candidate for the treatment of PKU and are on track to start our Phase 1/2 clinical trial and report initial data next year," said Arthur Tzianabos, Ph.D., President and Chief Executive Officer of Homology Medicines. "Data presented from these studies showed that a one-time treatment with our gene therapy, which is designed to replace the disease-causing gene in PKU, restored the normal metabolic pathway even on normal diet. All other therapeutic approaches that do not replace the mutated gene, including those delivering a non-natural enzyme, require chronic dosing. Turning to our gene editing platform, the potential of our technology was the subject of multiple scientific presentations and a recent peer-reviewed publication that demonstrated the ability to efficiently edit in vivo without introducing unwanted insertions or deletions that have been reported with nuclease-based approaches. We plan to advance a development candidate for our gene editing program in PKU into IND-enabling studies next year while also progressing the rest of our pipeline forward for patients."
Dr. Tzianabos continued, "On the manufacturing front, GMP operations have reached a scale capable of supporting a Phase 1/2 program, while the buildout of our own GMP manufacturing facility is still expected to be completed this year."
Second Quarter 2018 and Recent Accomplishments
-- Presented long-term data from IND-enabling studies with HMI-102,
Homology's gene therapy candidate for phenylketonuria (PKU). The data
demonstrated that in an established in vivo model of PKU, a single dose
durably reduced levels of phenylalanine (Phe) to normal and increased
tyrosine levels in mice on a normal protein diet, thereby restoring the
normal biochemical pathway that is affected by the disease. The data
were presented at the American Society of Gene & Cell Therapy (ASGCT)
and National PKU Alliance meetings.
-- In additional presentations, reported that in the PKU disease model,
Homology's nuclease-free gene editing technology led to a statistically
significant reduction in serum Phe levels from baseline and when
compared to untreated controls, while also demonstrating no evidence of
on-target mutations as determined by next-generation sequencing.
Additionally, Homology presented other data demonstrating its AAVHSC
vectors have tropism to key tissues, including the ability to cross the
blood-brain-barrier and transduce the central nervous system following
intravenous administration as well as the retina following a single
local injection. These data were presented at the ASGCT meeting and the
XVIIth International Parvovirus Workshop.
-- Announced peer-reviewed publication of initial work with Homology's gene
editing technology in the journal Proceedings of the National Academy of
Sciences (PNAS) demonstrating highly efficient gene editing capabilities
in vivo with no evidence of on-target mutations confirmed molecularly.
Second Quarter 2018 Financial Results
Collaboration revenue for the quarter ended June 30, 2018 was $0.9 million in connection with a strategic collaboration with Novartis. Total collaboration revenue will be recognized on a straight-line basis over the estimated period of the performance of services.
Total operating expenses for the quarter ended June 30, 2018 were $14.8 million, compared to $6.0 million for the same period in 2017, and consisted of research and development expenses and general and administrative expenses.
Research and development expenses for the quarter ended June 30, 2018 were $10.3 million, compared to $4.1 million for the same period in 2017. The increase of $6.2 million was due to a rise in direct research expenses including contract manufacturing costs and laboratory supplies in support of pre-IND enabling studies, increased personnel costs to support the lead product development programs and research initiatives, as well as expenses related to expanding manufacturing capabilities.
General and administrative expenses for the quarter ended June 30, 2018 were $4.5 million, compared to $2.0 million for the same period in 2017. The increase of $2.5 million was primarily due to increased personnel costs as a result of new hires, increased facility costs including rent expense, and costs associated with expanded operations in support of the Company's recent initial public offering and financial reporting requirements.
Net loss for the quarter ended June 30, 2018 was $12.9 million or $(0.35) per share, compared to a net loss of $6.0 million, or $(2.61) per share for the same period in 2017.
As of June 30, 2018, Homology had approximately $255.5 million in cash, cash equivalents and short-term investments, including the net proceeds of $150.8 million from the Company's IPO. Homology expects cash, cash equivalents and short-term investments to fund operations for at least the next two years.
There were approximately 37.3 million shares of common stock issued and outstanding as of June 30, 2018, including shares of preferred stock that converted into common stock upon the closing of the IPO.
Upcoming Events
-- Citi's 13th Annual Biotech Conference: September 5-6, 2018 in Boston
-- Cell & Gene Meeting on the Mesa: October 3-5, 2018 in La Jolla
-- Chardan's 2nd Annual Genetic Medicines Conference: October 9, 2018 in
New York City
-- Society for Neuroscience (SfN)'s Neuroscience 2018 Annual Meeting:
November 3-7, 2018 in San Diego
About Homology Medicines, Inc.
Homology Medicines, Inc. is a genetic medicines company dedicated to transforming the lives of patients suffering from rare genetic diseases with significant unmet medical needs by curing the underlying cause of the disease. Homology's proprietary platform is designed to utilize its human hematopoietic stem cell-derived adeno-associated virus vectors (AAVHSCs) to precisely and efficiently deliver genetic medicines in vivo either through a gene therapy or nuclease-free gene editing modality across a broad range of genetic disorders. Homology has a management team with a successful track record of discovering, developing and commercializing therapeutics with a particular focus on rare diseases, and intellectual property covering its suite of 15 AAVHSCs. Homology believes that its compelling preclinical data, scientific expertise, product development strategy, manufacturing capabilities and intellectual property position it as a leader in the development of genetic medicines. For more information, please visit www.homologymedicines.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 regarding upcoming events and presentations; advancing our novel gene therapy and gene editing technology platform and pipeline; our expectations surrounding initiation of clinical trials for our PKU gene therapy program; the anticipated timing of nomination of a gene editing development candidate for PKU and initiation of IND-enabling studies; the anticipated timing of completion of our GMP manufacturing facility; our goal of improving the lives of patients with rare genetic diseases; the potential of HMI-102 and our AAVHSC platform; the anticipated timing of the release of clinical data; beliefs about preclinical data; our position as a leader in the development of genetic medicines; and the sufficiency of our cash, cash equivalents and short-term investments. 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 fact that we have and expect to continue to incur significant losses; our need for additional funding, which may not be available; failure to identify additional product candidates and develop marketable products; the early stage of our development efforts; our failure or the failure of our collaborators to successfully develop and commercialize drug candidates; potential unforeseen events during clinical trials could cause delays or other adverse consequences; risks relating to the build out of our manufacturing facility; risks relating to the regulatory approval process; our product candidates may cause serious adverse side effects; inability to maintain our collaborations, or the failure of these collaborations; our reliance on third parties; the inability to obtain orphan drug exclusivity; failure to obtain international marketing approval; failure to obtain U.S. marketing approval; ongoing regulatory obligations; effects of significant competition; unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives; product liability lawsuits; failure to attract, retain and motivate qualified personnel; the possibility of system failures or security breaches; risks relating to intellectual property; the price of our common stock may be volatile; significant costs as a result of operating as a public company; and any securities class action litigation. These and other important factors discussed under the caption "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 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. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.
- Financial Tables Follow -
HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------
2018 2017 2018 2017
---- ---- ---- ----
Collaboration revenue $926,477 $ - $1,749,849 $ -
Operating expenses:
Research and development 10,289,871 4,056,289 18,288,266 6,855,261
General and administrative 4,527,335 1,982,231 8,355,357 3,874,778
--------- --------- --------- ---------
Total operating expenses 14,817,206 6,038,520 26,643,623 10,730,039
---------- --------- ---------- ----------
Loss from operations (13,890,729) (6,038,520) (24,893,774) (10,730,039)
----------- ---------- ----------- -----------
Other income (expense):
Change in fair value of convertible preferred - - - (876,000)
stock tranche liability
Interest income 996,493 35,766 1,475,976 48,492
Total other income (expense) 996,493 35,766 1,475,976 (827,508)
------- ------ --------- --------
Net loss and net loss attributable to common $(12,894,236) $(6,002,754) $(23,417,798) $(11,557,547)
stockholders-basic and diluted
Net loss per share attributable to common $(0.35) $(2.61) $(1.19) $(4.89)
stockholders-basic and diluted
Weighted-average common shares outstanding- 36,860,619 2,296,118 19,606,543 2,365,021
basic and diluted
HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of
-----
June 30, 2018 December 31, 2017
------------- -----------------
Cash and cash equivalents and short-term investments $255,508,085 $129,658,536
Other assets 14,806,687 7,871,805
---------- ---------
Total assets $270,314,772 $137,530,341
============ ============
Accounts payable, accrued expenses and other liabilities $10,269,190 $5,811,606
Deferred revenue 33,247,151 33,410,626
Convertible preferred stock - 137,762,160
Stockholders' equity (deficit) 226,798,431 (39,454,051)
----------- -----------
Total liabilities, convertible preferred stock and $270,314,772 $137,530,341
stockholders' equity (deficit)
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SOURCE Homology Medicines, Inc.
