Argos Therapeutics Inc. (NASDAQ:ARGS), an immuno-oncology company
focused on the development and commercialization of individualized
immunotherapies based on the Arcelis® precision immunotherapy
technology platform, today reported financial results and
operational highlights for the third quarter of 2017.
“We are pleased with the progress we have made
since the second quarter, both with regard to our financial
position as well as in our two clinical programs,” Jeff Abbey, CEO
of Argos Therapeutics, noted. “First, from a financial perspective,
we are pleased to have raised approximately $10 million through our
ATM facility between June and November, and to have received a $1.5
million milestone payment from our partner in China and certain
other Asian territories, Lummy (Hong Kong) Ltd. In addition,
as previously reported, we were pleased to reach a satisfactory
resolution with one of our important vendors regarding the deferred
fees that we owed them, thereby significantly extending the payment
term.“
Mr. Abbey continued, “From an operational
perspective, we are continuing the ADAPT clinical trial, and look
forward to the next interim analysis, which we expect to occur
during the first half of 2018, subject to agreement with the FDA on
an amended protocol. In addition, we were encouraged by the updated
immunology data from the ADAPT clinical trial indicating that
Rocapuldencel-T stimulated an immune response in patients with
metastatic renal cell carcinoma in the trial, and by the data from
the trial related to the duration of tumor response, that were
presented at the European Society for Medical Oncology 2017
Congress in September. Additionally, we are continuing our study of
AGS-004 in combination with the latency-reversing agent vorinostat
in adult HIV patients.”
Operational Highlights
During the third quarter, the Company announced
the following progress:
- In July 2017, the Company reported positive immunogenicity data
from the AGS-004 program for the treatment of HIV
- In September 2017, additional data from the Phase 3 ADAPT
clinical trial was presented by Robert Figlin, MD, principal
investigator, at the European Society of Medical Oncology 2017
Conference
- In September 2017, the Company announced the first dosing of an
HIV patient with AGS-004 derived from the latent viral
reservoir
Financial Results
Revenue for the three months ended September 30,
2017 was $53,000 compared to $147,000 for the same period in 2016.
The decrease in revenue for the third quarter of 2017 compared with
the third quarter of 2016 resulted from lower reimbursement under
the Company's contract with the NIH and NIAID primarily related to
the achievement of certain specified development milestones under
the Company's AGS-004 program during 2016.
Research and development expense for the three
months ended September 30, 2017 was $4.6 million compared to $9.3
million for the same period in 2016. The decrease in research and
development expense for the third quarter of 2017 compared with the
third quarter of 2016 was due to reduced expenses associated with
the Phase 3 ADAPT trial, and the Company's decision not to proceed
with the development of commercial manufacturing capabilities and
to significantly reduce the size of its workforce engaged in
research and development activities following the recommendation of
the IDMC to discontinue the ADAPT trial for futility.
General and administrative expense for the three
months ended September 30, 2017 was $2.9 million compared to $3.0
million for the same period in 2016. The decrease in general and
administrative expense for the third quarter of 2017 compared with
the third quarter of 2016 was primarily due to reduced consulting
and personnel costs.
Additionally, the Company incurred restructuring
charges of $679,000 during the three months ended September 30,
2017 related to the Company's decision to discontinue preparation
for commercial manufacturing and reduce the size of its workforce,
which amount was offset by a non-cash gain due to the decrease in
the value of the warrant liability of $502,000 and a gain on the
early extinguishment of debt of $1.5 million associated with the
satisfaction and release of all of the Company’s payment
obligations to Invetech, Pty Ltd.
Interest expense for the three months ended
September 30, 2017 was $67,000 compared to $448,000 for the same
period in 2016. The decrease in interest expense for the first
three months of 2017 compared with the first three months of 2016
was primarily due to a lower average balance of debt
outstanding.
Reflecting the factors noted above, net loss for
the three months ended September 30, 2017 was $6.1 million compared
to a net loss of $12.2 million for the same period in 2016.
Revenue for the nine months ended September 30,
2017 was $228,000 compared to $782,000 for the same period in 2016.
The decrease in revenue for the first nine months of 2017 compared
with the first nine months of 2016 resulted from lower
reimbursement under the Company's contract with the NIH and NIAID
primarily related to the achievement of certain specified
development milestones under the Company's AGS-004 program during
2016.
Research and development expense for the nine
months ended September 30, 2017 was $17.6 million compared to $28.0
million for the same period in 2016. The decrease in research and
development expense for the first nine months of 2017 compared with
the first nine months of 2016 was due to reduced expenses
associated with the Phase 3 ADAPT trial, and the Company's decision
not to proceed with the development of commercial manufacturing
capabilities and to significantly reduce the size of its workforce
engaged in research and development activities following the
recommendation of the IDMC to discontinue the ADAPT trial for
futility.
General and administrative expense for the nine
months ended September 30, 2017 was $9.5 million compared to $9.4
million for the same period in 2016. The increase in general and
administrative expense for the first nine months of 2017 compared
with the first nine months of 2016 was primarily due to increased
personnel costs.
Additionally, the Company incurred impairment
charges of $27.2 million and restructuring charges of $6.0 million
during the nine months ended September 30, 2017 related to the
Company's decision to discontinue preparation for commercial
manufacturing and reduce the size of its workforce, which amounts
were partially offset by a non-cash gain due to the decrease in the
value of the warrant liability of $20.7 million and a gain on the
early extinguishment of debt of $1.8 million.
Interest expense for the nine months ended
September 30, 2017 was $1.1 million compared to $1.5 million for
the same period in 2016. The decrease in interest expense for the
first nine months of 2017 compared with the first nine months of
2016 was primarily due to a lower average balance of debt
outstanding, partially offset by the decision to no longer
capitalize the interest related to construction of the Centerpoint
facility following the decision not to proceed with plans to
develop this facility.
Reflecting the factors noted above, net loss for
the nine months ended September 30, 2017 was $38.7 million compared
to a net loss of $37.7 million for the same period in 2016.
As of September 30, 2017, cash and cash
equivalents totaled $9.4 million.
Upcoming Conference Call and
Webcast
Argos will be presenting updated immunology data
in the poster session at the 32nd Annual Meeting of the Society for
Immunotherapy of Cancer (SITC) Conference to be held this weekend
in National Harbor, Maryland. Argos will hold a conference call to
discuss this data on Monday, November 13th at 8:30am ET
(rescheduled from today at 4:30pm). To participate by telephone,
please dial (855) 433-0930 (Domestic) or (484) 756-4271
(International). The conference ID number is 9396519. Slides
setting forth the data to be presented at the SITC 2017 Annual
Meeting, and a live and archived audio webcast, will be accessible
through the Investors section of the Company's website at
www.argostherapeutics.com. The archived webcast will remain
available on the Company's website for twelve (12) months following
the call.
About Argos Therapeutics
Argos Therapeutics is an immuno-oncology company
focused on the development and commercialization of individualized
immunotherapies for the treatment of cancer and infectious diseases
using its Arcelis® technology platform. Argos' most advanced
product candidate, Rocapuldencel-T, is being evaluated in the
pivotal ADAPT Phase 3 clinical trial for the treatment of
metastatic renal cell carcinoma (mRCC). Argos is also developing a
separate Arcelis®-based product candidate, AGS-004, for the
treatment of human immunodeficiency virus (HIV), which is currently
being evaluated in an investigator-initiated Phase 2 clinical trial
aimed at HIV eradication in adult patients. Funding for the
development of AGS-004 has been provided by the National Institutes
of Health, the National Institute of Allergy and Infectious
Diseases, and the Collaboratory of Research for AIDS
Eradication.
Forward Looking Statements
Any statements in this press release about
Argos' future expectations, plans and prospects, including
statements about Argos’ financial prospects, future operations and
sufficiency of funds for future operations, clinical development of
Argos' product candidates, expectations regarding future clinical
trials and FDA activities and future expectations and plans and
prospects for Argos and other statements containing the words
"believes," "anticipates," "estimates," "expects," "intends,"
"plans," "predicts," "projects," "targets," "may," "potential,"
"will," "would," "could," "should," "continue," and similar
expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of
1995. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various
important factors, including whether Argos' cash resources will be
sufficient to fund its continuing operations for the period
anticipated; whether preliminary or interim clinical data, such as
the data referenced in this release, will be indicative of the
final data from a clinical trial; whether results obtained in
clinical trials will be indicative of results obtained in future
clinical trials; whether Argos' product candidates will advance
through the clinical trial process on a timely basis; whether the
results of such trials will warrant submission for approval from
the United States Food and Drug Administration or equivalent
foreign regulatory agencies; whether Argos' product candidates
will receive approval from regulatory agencies on a timely basis or
at all; whether, if product candidates obtain approval, they will
be successfully distributed and marketed; whether Argos can
successfully establish commercial manufacturing operations on a
timely basis or at all; and other factors discussed in the "Risk
Factors" section of Argos' Form 10-Q for the quarter ended
September 30, 2017, which is on file with the SEC, and in other
filings Argos makes with the SEC from time to time. In addition,
the forward-looking statements included in this press release
represent Argos' views as of the date hereof. Argos anticipates
that subsequent events and developments will cause Argos' views to
change. However, while Argos may elect to update these
forward-looking statements at some point in the future, Argos
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing Argos' views as of any date subsequent to the date
hereof.
Media and investor contact: Richard Katz, MD, MBAChief Financial
Officer Argos Therapeutics, Inc.
919-287-6315 rkatz@argostherapeutics.com
Media Contact:Adam DaleyBerry & Company
Public Relations212.253.8881adaley@berrypr.com
ARGOS THERAPEUTICS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
Revenue |
$ |
53,497 |
|
$ |
146,756 |
|
$ |
228,449 |
|
$ |
781,828 |
|
|
|
|
|
|
Operating expenses |
|
|
|
|
Research
and development |
|
4,550,353 |
|
|
9,340,018 |
|
|
17,585,134 |
|
|
28,006,178 |
|
General
and administrative |
|
2,879,011 |
|
|
3,010,518 |
|
|
9,521,769 |
|
|
9,375,021 |
|
Impairment of property and equipment |
|
— |
|
|
— |
|
|
27,204,349 |
|
|
— |
|
Restructuring costs |
|
679,013 |
|
|
— |
|
|
6,031,779 |
|
|
— |
|
|
|
|
|
|
Total
operating expenses |
|
8,108,377 |
|
|
12,350,536 |
|
|
60,343,031 |
|
|
37,381,199 |
|
|
|
|
|
|
Operating
loss.............................................. |
|
(8,054,880) |
|
|
(12,203,780) |
|
|
(60,114,582) |
|
|
(36,599,371) |
|
|
|
|
|
|
Interest
income.................................. |
|
11,027 |
|
|
20,586 |
|
|
50,485 |
|
|
24,399 |
|
Interest
expense............................... |
|
(67,211) |
|
|
(448,288 ) |
|
|
(1,089,971) |
|
|
(1,482,943) |
|
Gain on
early extinguishment of debt |
|
1,506,901 |
|
|
— |
|
|
1,756,359 |
|
|
— |
|
Change in
fair value of warrant
liability.................................................... |
|
501,870 |
|
|
385,394 |
|
|
20,681,631 |
|
|
385,394 |
|
Other
expense................................... |
|
36,346 |
|
|
(753) |
|
|
31,441 |
|
|
(753) |
|
|
|
|
|
|
Net
loss |
|
(6,065,947) |
|
|
(12,246,841)
|
|
|
(38,684,637) |
|
|
(37,673,274) |
|
|
|
|
|
|
Net loss per
share, basic and diluted |
$ |
(0.10) |
|
$ |
(0.32) |
|
$ |
(0.82) |
|
$ |
(1.30) |
|
|
|
|
|
|
Weighted average
shares outstanding, basic and diluted |
|
58,235,995 |
|
|
37,938,213 |
|
|
47,036,779 |
|
|
28,903,427 |
|
|
|
|
|
|
ARGOS THERAPEUTICS, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
September 30, |
December 31, |
|
|
2017 |
|
|
2016 |
|
|
|
Assets |
|
|
Current assets |
|
|
Cash and
cash
equivalents............................................................................... |
$ |
9,372,642 |
|
$ |
52,973,376 |
Restricted
cash................................................................................................ |
|
740,000 |
|
|
— |
Assets
held for
sale.......................................................................................... |
|
10,336,529 |
|
|
1,452,172 |
Prepaid
expenses and other current
assets..................................................... |
|
1,413,178 |
|
|
1,076,246 |
|
|
|
Total
current
assets............................................................................... |
|
21,862,349 |
|
|
55,501,794 |
Property and equipment,
net.................................................................................... |
|
3,860,650 |
|
|
40,951,577 |
Restricted
cash........................................................................................................... |
|
— |
|
|
740,000 |
Other
assets............................................................................................................... |
|
11,020 |
|
|
11,020 |
|
|
|
Total
assets............................................................................................ |
$ |
25,734,019 |
|
$ |
97,204,391 |
|
|
|
|
|
|
Liabilities and
Stockholders’ (Deficit) Equity |
|
|
Current
liabilities |
|
|
Accounts
payable |
$ |
823,214 |
|
$ |
5,377,377 |
Accrued
expenses |
|
6,449,481 |
|
|
9,980,891 |
Current
portion of restructuring obligation |
|
150,103 |
|
|
— |
Current
portion of notes payable |
|
18,245 |
|
|
11,475,480 |
Current
portion of convertible note payable to Invetech |
|
1,400,000 |
|
|
— |
Current
portion of manufacturing research and development obligation |
|
— |
|
|
3,653,203 |
Current
portion of facility and capital lease obligations |
|
726,331 |
|
|
122,887 |
|
|
|
Total
current liabilities |
|
9,567,374 |
|
|
30,609,838 |
Convertible note
payable to related party. |
|
6,159,288 |
|
|
— |
Long-term portion of
convertible note payable to Invetech |
|
4,645,655 |
|
|
— |
Long-term portion of
notes payable |
|
4,950,511 |
|
|
18,673,298 |
Long-term portion of
manufacturing research and development obligation |
|
— |
|
|
4,509,033 |
Long-term portion of
facility and capital lease obligations |
|
8,960,162 |
|
|
9,592,966
|
Deferred
liabilities |
|
8,181,000 |
|
|
6,723,500 |
Warrants |
|
244,430 |
|
|
20,926,061 |
Total stockholders’
(deficit) equity |
|
(16,974,401) |
) |
|
6,169,695
|
|
|
|
Total liabilities and stockholders’ (deficit) equity |
$ |
25,734,019
|
|
$ |
97,204,391 |
|
|
|
|