Intec Pharma Reports Third Quarter 2019 Financial Results and Provides Business Update
JERUSALEM, Nov. 12, 2019 /PRNewswire/ -- Intec Pharma Ltd. (NASDAQ: NTEC) ("Intec" or "the Company") today announces financial results for the three and nine months ended September 30, 2019.
Highlights of the third quarter 2019 and recent weeks include:
-- Presented two posters highlighting data from the Company's Phase 3
clinical development program for the Accordion Pill(®)
Carbidopa/Levodopa (AP-CD/LD) at the International Congress of
Parkinson's and Movement Disorder Society (MDS 2019);
-- Completed the qualification studies for the commercial scale manufacture
of AP-CD/LD with our partner, LTS LohmanTherapie-Systeme (LTS);
-- Announced topline results from the Company's pivotal Phase 3 trial
(ACCORDANCE) evaluating the safety and efficacy of the AP-CD/LD compared
with immediate release CD/LD (IR-CD/LD; Sinemet(®)) as a treatment for
the symptoms of advanced Parkinson's disease (PD), reporting that
AP-CD/LD provided treatment for Parkinson's disease symptoms but did not
demonstrate statistical superiority to IR-CD/LD in terms of reduction in
OFF time from baseline under the conditions established in the protocol;
and
-- Completed the pharmacokinetic (PK) study of the custom-designed AP
developed for a proprietary compound under the previously announced
feasibility and option agreement with Novartis Pharmaceuticals.
Management Commentary
"We gained important information and knowledge from the ACCORDANCE study that we believe makes AP-CD/LD an attractive partnership opportunity for late-stage development and commercialization. First, the ACCORDANCE results validate the AP platform and provide very important long-term safety data. The responder analysis and subset analyses provide key insights for future study design and dosing that should be invaluable to a potential partner. We have qualified the commercial scale manufacturing process with LTS, which can also be used to provide clinical supply for the next Phase 3 study. This is a key advantage as Chemistry, Manufacturing and Controls (CMC) is a critical component in drug development and one that often trips up small companies. Importantly, there continues to be a large unmet need for a better baseline LD, which we believe provides a significant market opportunity of between $200 - $500 million," stated Jeffrey A. Meckler, Vice Chairman and Chief Executive Officer of Intec Pharma.
"We were delighted to present two posters highlighting AP-CD/LD at MDS 2019 in late September. We were particularly pleased to have our Phase 3 ACCORDANCE clinical trial poster chosen for the conference's Guided Tour, a distinction that drives attendees to view the approximately ten percent of posters selected for inclusion. Consequently, there was considerable interest in our program's results. We believe the data underscored the potential of AP-CD/LD as a better baseline levodopa therapy in PD while highlighting its long-term safety data. In tandem, we are in the process of seeking to partner AP-CD/LD in PD and found it most beneficial to have these data delivered at this important medical meeting. The continued understanding of the full dataset from ACCORDANCE will be important as we seek to partner AP-CD/LD for late-stage clinical development and commercialization in PD patients.
"Moving forward, we continue to glean important learnings from the ongoing data analysis. As we present these to potential partners, we continue to advance the buildout of our commercial manufacturing process with LTS. As noted, having these state-of-the art commercial scale production facilities in place is expected to be of great value to any potential partner. We will also be completing the required regulatory submissions and reports that are necessary for clinical and CMC filings, which we expect to further enhance partnership opportunities.
"In July 2019, Intec provided Novartis with the results from a human PK study of a custom-designed AP for one of Novartis' proprietary compounds. The study demonstrated that the AP met the technical requirements set forth by Novartis. Novartis undertook a full commercial assessment of the program, and to date, has not definitively decided whether they will opt into negotiations for a commercial agreement. As a result, we have determined that we will not need the volume of clinical manufacturing to support that program at this time and plan to restructure those dedicated to the Novartis program in order to reduce our burn.
"We continued to invest in building out the Company's next phase of growth through the AP platform's innovation engine as it can provide multiple opportunities for pipeline expansion. Toward that end, we were delighted to partner with Merck & Co. on a research collaboration to develop a custom-designed AP for one of Merck's proprietary compounds in May 2019. Our team is hard at work constructing the films for this research collaboration and we aim to have a final construct completed and in-vitro tested by the middle of next year.
"The development of our AP containing synthetic tetrahydrocannabinol (THC), one of the primary cannabinoids contained in cannabis, completed an initial PK study earlier this year. The results showed that the delivery of THC did not meet our full expectations for this program. Our R&D team is in the process of refining the AP-THC in order to fully meet our specifications for the oral delivery of THC and CBD. We are seeking to launch a PK study with the optimized AP-THC next year.
"In addition to our current development pipeline, our team continues to advance discussions with other potential pharmaceutical partners for the development of new custom-designed APs. We believe the data from our ACCORDANCE trial enhances those discussions as it validates the AP platform and provides long-term safety data. Our goal remains to add one or two new programs per year. We believe this is the most efficient strategy for building our pipeline and for creating value from our platform.
"Our mission remains steadfast; to build value by leveraging the potential of our AP platform to enhance the characteristics of a number of proprietary compounds and to develop innovative approaches to the treatment of diseases. Our growth strategy continues to focus on advancing a mix of internally-led programs with partnered programs believing that having a variety of 'shots on goal' will provide Intec with a growing pipeline and long-term royalty stream with the potential to create significant value over time," concluded Mr. Meckler.
Financial Highlights for the Three and Nine Months Ended September 30, 2019
Research and development expenses, net, for the three-month period ended September 30, 2019 were approximately $8.4 million, an increase of approximately $600,000 or 8%, compared with approximately $7.8 million for the third quarter of 2018. The increase for the three-month period was primarily due to an increase in expenses related to the open label extension study. This increase was offset by a decrease in expenses related to the ACCORDANCE study and a decrease in expenses related to the scale up activities for the commercial scale production capabilities for AP-CD/LD at LTS. Research and development expenses, net, for the nine-month period ended September 30, 2019 amounted to approximately $24.9 million, a decrease of approximately $200,000, or 1%, compared with approximately $25.1 million in the nine-month period ended September 30, 2018. The decrease for the nine-month period was primarily due to a decrease in expenses related to the ACCORDANCE study. This decrease was offset by an increase in expenses related to the scale up activities for the commercial scale production capabilities for AP-CD/LD at LTS and expenses related to our open label extension study.
General and administrative expenses for the three-month period ended September 30, 2019 were approximately $2.2 million, an increase of approximately $500,000 or 29%, compared with approximately $1.7 million in third quarter of 2018. General and administrative expenses for the nine-month period ended September 30, 2019 amounted to approximately $6.5 million, an increase of approximately $700,000, or 12%, compared with approximately $5.8 million in the nine-month period ended September 30, 2018. The increase for the three and nine-month periods was primarily related to the increase in payroll and related expenses mainly due to salary raises and increase in insurance expenses, offset by a decrease in professional services.
Impairment of long-lived assets was recorded as the top-line results of the ACCORDANCE trial were considered a triggering event for impairment. For the three and nine months ended September 30, 2019, we recorded an impairment charge of approximately $9.8 million. This impairment represents the excess carrying value of the long-lived assets compared to its fair value.
Net loss for the three-month period ended September 30, 2019 was approximately $20.4 million, compared with a net loss of $9.2 million in the prior year's third quarter. Net loss for the nine-month period ended September 30, 2019 was $41.0 million compared with $30.9 million during the nine-month period ended September 30, 2018.
Loss per ordinary share for the three-month period ended September 30, 2019 was $0.61 compared with a loss per ordinary share of $0.28 for the three-month period ended September 30, 2018. Loss per ordinary share for the nine-month period ended September 30, 2019 was $1.23 compared with a loss per ordinary share of $1.01 for the nine-month period ended September 30, 2018.
As of September 30, 2019, the Company had cash and cash equivalents and marketable securities of approximately $15.7 million compared with approximately $40.6 million at December 31, 2018.
Net cash used in operating activities during the nine-month period ended September 30, 2019 was approximately $23.9 million compared with net cash used in operating activities of approximately $30.9 million during the nine-month period ended September 30, 2018. This decrease resulted from changes in operating assets and liabilities items of approximately $6.5 million and a decrease in the net loss for the period in the amount of $500,000.
The Company had negative cash flow from investing activities of approximately $2.5 million during the nine-month period ended September 30, 2019 compared to negative cash flow from investing activities of approximately $5.1 million during the nine-month period ended September 30, 2018. This decrease resulted primarily from a decrease in purchase of property and equipment in the amount of approximately $1.8 million, an increase in proceeds from the disposal of marketable securities in the amount of approximately $576,000 and a decrease of approximately $135,000 in investment in other assets related to the establishment of the commercial scale production capabilities for AP-CD/LD at LTS.
Net cash provided by financing activities during the nine-month period ended September 30, 2019 was approximately $2.2 million, which was provided by approximately $2.0 million in funds received from the sale of 1,716,679 ordinary shares under the Company's "at-the-market" equity offering program and $268,000 in proceeds from the exercise of options by employees.
About Intec Pharma Ltd.
Intec Pharma is a clinical-stage biopharmaceutical company focused on developing drugs based on its proprietary Accordion Pill platform technology. The Company's Accordion Pill is an oral drug delivery system that is designed to improve the efficacy and safety of existing drugs and drugs in development by utilizing an efficient gastric retention and specific release mechanism. The Company's product pipeline includes two product candidates in clinical trial stages: Accordion Pill Carbidopa/Levodopa, or AP-CD/LD, which is in late-stage development for the treatment of Parkinson's disease symptoms in advanced Parkinson's disease patients, and AP-cannabinoids, an Accordion Pill to deliver either or both of the primary cannabinoids contained in Cannabis sativa, cannabidiol (CBD) and tetrahydrocannabinol (THC) for various pain indications. In addition, the Company has a feasibility agreement for the development of a custom-designed Accordion Pill for a proprietary compound with Novartis Pharmaceuticals and a research collaboration with Merck & Co.
For more information, visit www.intecpharma.com. Intec Pharma routinely posts information that may be important to investors in the Investor Relations section of its website.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward looking statements about our expectations, beliefs and intentions. Forward-looking statements can be identified by the use of forward-looking words such as "believe", "expect", "intend", "plan", "may", "should", "could", "might", "seek", "target", "will", "project", "forecast", "continue" or "anticipate" or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. These forward-looking statements are based on assumptions and assessments made in light of management's experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements in this press release are made as of the date of this press release, and we undertake no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of our control. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the following: our limited operating history and history of operating losses, our ability to continue as a going concern, our ability to obtain additional financing, our ability to successfully operate our business or execute our business plan, our ability to enter into collaborative, licensing, and other commercial relationships and on terms commercially reasonable to us, the timing and cost of our clinical trials, the completion and receiving favorable results in our clinical trials, our ability to obtain and maintain regulatory approval of our product candidates, our ability to protect and maintain our intellectual property and licensing arrangements, our ability to develop, manufacture and commercialize our product candidates, the risk of product liability claims, the availability of reimbursement, and the influence of extensive and costly government regulation and our ability to remain listed on the Nasdaq Capital Market. More detailed information about the risks and uncertainties affecting us is contained under the heading "Risk Factors" included in our most recent Annual Report on Form 10-K filed with the SEC on February 27, 2019, and in other filings that we have made and may make with the Securities and Exchange Commission in the future.
-Tables to Follow-
INTEC PHARMA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 2019 December 31, 2018
---
U.S. dollars in thousands
Assets
CURRENT ASSETS:
Cash and cash equivalents $14,966 $39,246
Investment in marketable securities 767 1,333
Prepaid expenses and other receivables 2,453 2,986
TOTAL CURRENT ASSETS 18,186 43,565
NON-CURRENT ASSETS:
Other assets 4,204 5,431
Property and equipment, net 6,200 12,233
Operating lease right-of-use assets 1,687 -
Deferred tax assets 504 281
TOTAL NON-CURRENT ASSETS 12,595 17,945
TOTAL ASSETS $30,781 $61,510
===
Liabilities and shareholders' equity
CURRENT LIABILITIES -
Accounts payable and accruals:
Trade $4,834 $2,849
Other 6,774 4,807
TOTAL CURRENT LIABILITIES 11,608 7,656
LONG-TERM LIABILITIES -
Non-current operating lease
liabilities 1,132 -
Other liabilities 554 309
TOTAL LONG-TERM LIABILITIES 1,686 309
TOTAL LIABILITIES 13,294 7,965
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS'
EQUITY:
Ordinary shares, with no par value -
authorized: 100,000,000 Ordinary
Shares as of 727 727
September 30, 2019 and December 31, 2018; issued and
outstanding: 35,019,479
and 33,232,988 Ordinary Shares as of September 30,
2019 and December 31, 2018, respectively
Additional paid-in capital 199,627 194,642
Accumulated deficit (182,867) (141,824)
TOTAL SHAREHOLDERS' EQUITY 17,487 53,545
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $30,781 $1,510
===
INTEC PHARMA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Three months ended Nine months ended
September 30 September 30
---
2019 2018 2019 2018
---
U.S. dollars U.S. dollars
in thousands in thousands
---
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT
EXPENSES, net (8,448) (7,809) (24,850) (25,089)
GENERAL AND ADMINISTRATIVE
EXPENSES (2,157) (1,696) (6,491) (5,800)
IMPAIRMENT OF LONG-LIVED
ASSETS (9,759) (9,759)
OPERATING LOSS (20,364) (9,505) (41,100) (30,889)
FINANCIAL INCOME (EXPENSES)
, net 14 163 157 (5)
---
LOSS BEFORE
INCOME
TAX (20,350) (9,342) (40,943) (30,894)
TAX BENEFIT (INCOME TAX) (28) 164 (100) (46)
---
NET LOSS (20,378) (9,178) (41,043) (30,940)
===
U.S. dollars
LOSS PER SHARE BASIC AND
DILUTED (0.61) (0.28) (1.23) (1.01)
===
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING USED IN 33,516 33,226 33,356 30,505
COMPUTATION OF BASIC AND DILUTED LOSS
PER ORDINARY SHARE IN THOUSANDS
===
(Continued) - 1
INTEC PHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
Ordinary Shares
Additional Accumulated
Deficit
Total
paid-in
capital
---
Number of shares
Amounts
Amounts
---
U.S. dollars in thousands
BALANCE AT JANUARY 1, 2018
CHANGES IN THE NINE-MONTH
PERIOD ENDED SEPTEMBER 30,
2018: 26,075,770 $727 $156,356 $(98,281) $58,802
Issuance of ordinary shares, net
of issuance costs 7,150,000 35,029 35,029
Exercise of options 218 1 1
Share-based compensation 2,452 2,452
Net loss (30,940) (30,940)
BALANCE AT SEPTEMBER 30, 2018 33,225,988 $727 $193,838 $(129,221) $65,344
BALANCE AT JANUARY 1, 2019
CHANGES IN THE NINE-MONTH
PERIOD ENDED SEPTEMBER 30,
2019: 33,232,988 $727 $194,642 $(141,824) $53,545
Issuance of ordinary shares, net
of issuance costs 1,716,679 1,969 1,969
Exercise of options 69,812 268 268
Share-based compensation 2,748 2,748
Net loss (41,043) (41,043)
BALANCE AT SEPTEMBER 30, 2019 35,019,479 $727 $199,627 $(182,867) $17,487
===
(Continued) - 2
INTEC PHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
Ordinary Shares
Additional
Accumulated Total
paid-in Deficit
capital
Number of shares
Amounts
Amounts
U.S. dollars in thousands
BALANCE AT JULY 1, 2018 33,225,988 $727 $192,987 $(120,043) $73,671
CHANGES IN THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2018:
Share-based compensation 851 851
Net loss (9,178) (9,178)
BALANCE AT SEPTEMBER 30, 2018 33,225,988 $727 $193,838 $(129,221) $65,344
BALANCE AT JULY 1, 2019 33,302,800 $727 $196,871 $(162,489) $35,109
CHANGES IN THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2019:
Issuance of ordinary shares, net of issuance costs 1,716,679 1,969 1,969
Share-based compensation 787 787
Net loss (20,378) (20,378)
BALANCE AT SEPTEMBER 30, 2019 35,019,479 $727 $199,627 $(182,867) $17,487
INTEC PHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30
2019 2018
---
U.S. dollars in
thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (41,043) (30,940)
Adjustments required to reconcile net loss to
net cash used in operating activities:
Depreciation 643 639
Impairment of long-
lived asset 9,759
Exchange differences on
cash and cash
equivalents 69 (528)
Right of use asset 523
Lease liability (380)
Losses (gains) on
marketable securities (10) 141
Share-based
compensation 2,748 2,452
Changes in operating assets and liabilities:
Decrease in prepaid
expenses and other
receivables 483 (979)
Increase in deferred tax
assets (223)
Increase in accounts
payable and accruals 3,268 (1,734)
Increase in other
liabilities 245
---
Net cash used in
operating activities (23,918) (30,949)
---
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and
equipment (791) (2,632)
Investment in other
assets (2,315) (2,450)
Proceeds from disposal
(purchase) of
marketable securities,
net 576 (38)
---
Net cash used in
investing activities (2,530) (5,120)
---
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance
of ordinary shares, net
of issuance costs 1,969 35,029
Proceeds from exercise
of options 268 1
---
Net cash provided by
financing activities 2,237 35,030
---
DECREASE IN CASH AND
CASH EQUIVALENTS (24,211) (1,039)
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF THE PERIOD 39,246 53,393
EXCHANGE DIFFERENCES ON
CASH AND CASH
EQUIVALENTS (69) 528
---
CASH AND CASH
EQUIVALENTS AT END OF
THE PERIOD 14,966 52,882
===
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING
ACTIVITIES:
Liability with respect
to property and
equipment 123 1,898
===
Liability with respect
to other assets 549 244
===
SUPPLEMENTARY DISCLOSURE OF CASH FLOW
INFORMATION
-
Taxes paid 50 31
===
Interest received 315 522
===
Intec Pharma Investor Contact:
Anne Marie Fields
VP-Corporate Communications & Investor Relations
646-200-8808
amf@intec-us.com
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SOURCE Intec Pharma Ltd.
