Intec Pharma Reports Second Quarter 2020 Financial Results and Provides Corporate Update
JERUSALEM, Aug. 5, 2020 /PRNewswire/ -- Intec Pharma Ltd. (NASDAQ: NTEC) ("Intec" or "the Company") today announces financial results for the second quarter ended June 30, 2020 and provides a corporate update.
"We have worked diligently over the past quarter to address the challenges of an evolving landscape for both our business and clinical development initiatives given the global COVID-19 pandemic," stated Jeffrey A. Meckler, Vice Chairman and Chief Executive Officer of Intec Pharma.
"Despite constraints on our ability to conduct in-person meetings, our partnering activities to identify new opportunities and compounds for our unique gastric retentive oral delivery system as well as our partnering efforts for the AP-CD/LD program in Parkinson's disease remain ongoing. Looking into the second half of the year, we continue to seek to advance these productive conversations towards a deal that demonstrates appropriate value for both the Company and our shareholders.
"We look forward to advancing our newly designed AP-THC program into clinical development later this year as we recently received the active pharmaceutical ingredients needed for the clinical material production.
"Earlier this year, we announced we met the in vitro specifications for Merck's compound. At this time, we do not anticipate the compound entering an in vivo study this year. We continue to discuss development opportunities for the Accordion Pill with Merck.
"Our recent registered direct offering not only strengthens our balance sheet but, more importantly, provides the financial support and flexibility to position the Company for its next stage of development," added Mr. Meckler.
Financial Highlights for Second Quarter Ended June 30, 2020
Research and development expenses, net, for the three-month period ended June 30, 2020 were approximately $1.3 million, a decrease of $6.6 million, or approximately 84%, compared with approximately $7.9 million in the three-month period ended June 30, 2019. Research and development expenses, net, for the six-month period ended June 30, 2020 were approximately $3.3 million, a decrease of approximately $13.1 million, or approximately 80%, compared with approximately $16.4 million in the six-month period ended June 30, 2019. The decrease was primarily due to the completion of the ACCORDANCE study and Open Label Extension study during 2019, decrease in expenses related to the scale up activities for the commercial scale manufacturing and a decrease in payroll and related expenses, mostly due to a reduction in headcount, and share-based compensation.
General and administrative expenses for the three-month period ended June 30, 2020 were approximately $1.6 million, a decrease of $500,000, or approximately 24%, compared with approximately $2.1 million in the three-month period ended June 30, 2019. General and administrative expenses for the six-month period ended June 30, 2020 amounted to approximately $3.3 million, a decrease of approximately $1.0 million, or approximately 23%, compared to approximately $4.3 million for the six-month ended June 30, 2019. The decrease for the three and six-month periods was primarily related to a decrease in payroll and related expenses, including reduction in headcount, share-based compensation and reduction in associated expenses.
Net loss for the three-month period ended June 30, 2020 was approximately $2.9 million, a decrease of $7.1 million, or approximately 71%, compared with the net loss for the three-month period ended June 30, 2019 of approximately $10.0 million. The decrease for the three and six-month periods was mainly due to a decrease in research and development expenses, net, and general and administrative expenses, as detailed above.
Loss per ordinary share for the three-month period ended June 30, 2020, was $0.05 compared with $0.30 for the three-month period ended June 30, 2019. Loss per ordinary share for the six-month period ended June 30, 2020, was $0.12 compared with $0.62 for the six-month period ended June 30, 2019.
As of June 30, 2020, the Company had cash and cash equivalents of approximately $13.8 million. As of December 31, 2019, the Company had cash and cash equivalents and marketable securities of approximately $10.1 million.
Net cash used in operating activities was approximately $6.8 million for the six-month period ended June 30, 2020 compared with net cash used in operating activities of approximately $17.7 million for the six-month period ended June 30, 2019. This decrease resulted primarily from a decrease in research and development activities in the amount of approximately $13.1 million, offset by changes in operating asset and liability items of approximately $2.0 million.
The Company had positive cash flow from investing activities of approximately $769,000 for the six-month period ended June 30, 2020 compared to negative cash flow from investing activities of approximately $1.0 for the six-month period ended June 30, 2019. This change resulted primarily from an investment in the establishment of the commercial scale manufacturing in the amount of approximately $1.4 million in the six-month period ended June 30, 2019 and an increase in proceeds from the disposal of marketable securities in the amount of approximately $200,000.
Net cash provided by financing activities for the six-month period ended June 30, 2020 was approximately $10.6 million, which was provided primarily by the proceeds from the Company's registered direct offering in May 2020 that resulted in net proceeds of approximately $4.5 million, proceeds from the company's underwritten public offering in February 2020 that resulted in net proceeds of approximately $5.7 million and by the funds received from the sale of our ordinary shares under the Company's "at-the-market" equity offering program that resulted in net proceeds of approximately $421,000.
In May 2020, the Company raised $5.0 million in a registered direct offering of 16,291,952 ordinary shares at a purchase price of $0.3069 per share. In addition, in a concurrent private placement, the Company also sold and issued to the purchasers in the offering unregistered warrants to purchase 8,145,976 ordinary shares. The warrants have an exercise price of $0.245 per share, are immediately exercisable, and will expire five and one-half years from the date of issuance.
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 Phase 3 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 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, the impact of the outbreak of coronavirus, our ability to successfully operate our business or execute our business plan, 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. 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 March 13, 2020, and in other filings that we have made and may make with the Securities and Exchange Commission in the future.
Intec Pharma Investor Contact:
Will O'Connor
Stern IR
+1-212-362-1200
will@sternir.com
INTEC PHARMA LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30,
December 31,
2020 2019
U.S. dollars
in thousands
---
Assets
CURRENT ASSETS:
Cash and cash equivalents $13,799 $9,292
Investment in marketable securities - 770
Prepaid expenses and other receivables 1,307 3,683
TOTAL CURRENT ASSETS 15,106 13,745
NON-CURRENT ASSETS:
Property and equipment, net 1,967 2,575
Operating lease right-of-use assets 993 1,243
Other assets 3,717 3,717
TOTAL NON-CURRENT ASSETS 6,677 7,535
TOTAL ASSETS $21,783 $21,280
===
Liabilities and shareholders' equity
CURRENT LIABILITIES -
Accounts payable and accruals:
Trade $382 $3,507
Other 3,997 4,835
TOTAL CURRENT LIABILITIES 4,379 8,342
LONG-TERM LIABILITIES -
Non-current operating lease liabilities 536 799
Other liabilities 690 604
TOTAL LONG-TERM LIABILITIES 1,226 1,403
TOTAL LIABILITIES 5,605 9,745
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Ordinary shares, with no par value - authorized: 100,000,000 727 727
Ordinary Shares as of June 30, 2020 and December 31, 2019; issued
and outstanding: 69,428,032 and 35,892,209 Ordinary Shares as of
June 30, 2020 and December 31, 2019, respectively
Additional paid-in capital 211,691 200,231
Accumulated deficit (196,240) (189,423)
TOTAL SHAREHOLDERS' EQUITY 16,178 11,535
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $21,783 $21,280
===
INTEC PHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30 June 30
---
2020 2019 2020 2019
---
U.S. dollars U.S. dollars
in thousands in thousands
---
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT $(1,275) $(7,860) $(3,299) $(16,402)
EXPENSES, net
GENERAL AND ADMINISTRATIVE (1,630) (2,144) (3,345) (4,334)
EXPENSES
---
OPERATING LOSS (2,905) (10,004) (6,644) (20,736)
FINANCIAL INCOME (EXPENSES)
, net 4 33 (66) 143
---
LOSS BEFORE
INCOME
TAX (2,901) (9,971) (6,710) (20,593)
INCOME TAX (46) (38) (107) (72)
---
NET LOSS $(2,947) $(10,009) $(6,817) $(20,665)
$
$
---
LOSS PER SHARE BASIC AND DILUTED (0.05) (0.30) (0.12) (0.62)
===
WEIGHTED AVERAGE NUMBER OF SHARES 62,820 33,300 54,913 33,274
OUTSTANDING USED IN 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 Total
paid-in Deficit
capital
---
Number Amounts
Amounts
of shares
---
U.S. dollars in thousands
BALANCE AT JANUARY 1, 2019 33,232,988 $727 $194,642 (141,824) $53,545
CHANGES IN THE SIX-MONTH PERIOD
ENDED JUNE 30, 2019:
Exercise of options 69,812 268 268
Share-based compensation 1,961 1,961
Net loss - (20,665) (20 ,665)
---
BALANCE AT JUNE 30, 2019 33,302,800 $727 $196,871 $(162,489) $35,109
BALANCE AT JANUARY 1, 2020 35,892,209 $727 $200,231 $(189,423) $11,535
CHANGES IN THE SIX-MONTH
PERIOD
ENDED JUNE 30, 2020:
Issuance of ordinary shares, net of 831,371 421 421
issuance costs
Issuance of ordinary shares and 16,250,000 5,692 5,692
warrants, net of issuance of costs
Issuance of ordinary shares and 16,291,952 4,426 4,426
warrants, net of issuance of costs
Exercise of warrants 162,500 65 65
Share-based compensation - 856 856
Net loss - (6,817) (6,817)
---
BALANCE AT JUNE 30, 2020 69,428,032 $727 $211,691 $(196,240) $16,178
===
(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 APRIL 1, 2019 33,297,371 $727 $195,842 (152,480) $44,089
CHANGES IN THE THREE-MONTH PERIOD
ENDED JUNE 30, 2019:
Exercise of options 5,429 11 11
Share-based compensation - 1,018 1,018
Net loss - (10,009) (10,009)
---
BALANCE AT JUNE 30, 2019 33,302,800 $727 $196,871 $(162,489) $35,109
BALANCE AT APRIL 1, 2020 52,973,580 $727 $206,786 $(193,293) $14,220
CHANGES IN THE THREE-MONTH PERIOD
ENDED JUNE 30, 2020:
Issuance of ordinary shares and 16,291,952 4,426 4,426
warrants, net of issuance costs
Exercise of warrants 162,500 65 65
Share-based compensation - 414 414
Net loss - (2,947) (2,947)
---
BALANCE AT JUNE 30, 2020 69,428,032 $727 $211,691 $(196,240) $16,178
INTEC PHARMA LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30
2020 2019
---
U.S. dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(6,817) $(20,665)
Adjustments required to reconcile net loss to net cash used in operating
activities:
Depreciation 611 431
Exchange differences on cash and cash
equivalents 49 (19)
Change in right of use asset 250 351
Change in lease liabilities (263) (243)
Gains on marketable securities (2) (5)
Share-based compensation 856 1,961
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses
and other receivables 2,376 (136)
Increase in deferred tax assets - (148)
Increase (decrease) in accounts payable
and accruals (3,963) 583
Increase in other liabilities 86 163
---
Net cash used in operating activities (6,817) (17,727)
---
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3) (151)
Investment in other assets - (1,435)
Proceeds from disposal of marketable
securities, net 772 576
Net cash provided by (used in)
investing activities 769 (1,010)
---
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary
shares, net of issuance costs 421
Proceeds from issuance of ordinary
shares and warrants, net of issuance
costs 5,692
Proceeds from issuance of ordinary
shares and warrants, net of issuance
costs 4,426
Proceeds from exercise of warrants 65
Proceeds from exercise of options - 268
---
Net cash provided by financing
activities 10,604 268
---
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 4,556 (18,469)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE PERIOD 9,292 39,246
EXCHANGE DIFFERENCES ON CASH AND CASH
EQUIVALENTS (49) 19
---
CASH AND CASH EQUIVALENTS AT END OF THE
PERIOD $13,799 $20,796
===
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Liability with respect to property and
equipment - $502
===
Liability with respect to other assets - $1,114
===
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
-
Taxes paid - $50
===
Interest received $27 $263
===
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SOURCE Intec Pharma Ltd.
