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 fourth quarter and full year 2017.
Jeff Abbey, CEO of Argos Therapeutics, stated,
"Although we faced a very challenging 2017, we have been able to
continue the Phase 3 ADAPT clinical trial of Rocapuldencel-T for
the treatment of metastatic renal cell carcinoma, and look forward
to the next interim data analysis, which we expect to occur during
the second quarter of 2018. In addition to continuing the ADAPT
study, we look forward to initial results from the ongoing study of
AGS-004 in combination with the latency-reversing agent vorinostat
in adult HIV patients being conducted by the University of North
Carolina, which we expect will be reported towards the end of 2018
or early 2019. We were also pleased to have recently secured an
option to a PD1 checkpoint inhibitor, and, subject to obtaining
additional funding, plan to conduct a clinical trial of
Rocapuldencel-T in combination either with this agent or with an
approved checkpoint inhibitor. Also of note, we have strengthened
our financial position by raising net proceeds of approximately $23
million since June 2017 through our at-the-market facility, and
believe that we now have sufficient capital to fund planned
operations through the end of this year.”
ADAPT Study Update
The Company is currently finalizing an amendment
to the protocol for the ADAPT trial, which includes an amended
primary endpoint analysis, and plans to submit it to the FDA prior
to the interim data analysis planned for the second quarter of
2018. The Company expects that the interim data analysis will
occur after such time as approximately 55 new events (deaths) have
occurred subsequent to the February 2017 interim analysis. The
amended primary endpoint analysis in the planned amended
ADAPT protocol includes the following four co-primary
endpoints:
- Overall survival for all randomized
patients when approximately 375 events have occurred (under the
same analysis that was originally planned for 290 events);
- The percentage of patients
surviving at least five years;
- Overall survival for patients who
remained alive at the time of the February 2017 interim analysis,
to be evaluated when approximately 155 new events have occurred;
and
- Overall survival for all patients
for whom at least 12 months of follow-up is available (excluding
patients who died or were lost to follow-up within the first 12
months after enrollment).
Operational and Corporate
Highlights
Since the end of the third quarter of 2017, the
Company has reported the following events:
- In November 2017, the Company announced the receipt of a $1.5
million milestone payment from Lummy (Hong Kong) Co., Ltd.
(“Lummy”), the Company’s licensee for Rocapuldencel-T in China and
certain other territories, related to the successful transfer of
technology related to the manufacturing of Rocapuldencel-T.
- In November 2017, the Company reported updated immunology data
from the Phase 3 ADAPT study at the 32nd Annual Meeting of the
Society for the Immunotherapy of Cancer that were generally
supportive of the hypothesis regarding the intended mechanism of
action of Rocapuldencel-T to induce an immune response against the
tumor in patients with metastatic renal cell carcinoma.
- In November 2017, the Company announced that it had reached
agreement with Saint-Gobain Corporation (“Saint-Gobain”), one of
the Company’s vendors, regarding the payment of deferred fees. The
Company agreed to settle its obligations to Saint-Gobain through a
combination of a $0.5 million cash payment, delivery of 34,500
shares of common stock (as adjusted for the one-for-twenty reverse
stock split), issuance of an approximately $2.4 million unsecured
convertible promissory note and return of certain specified
equipment previously provided to the Company.
- In November 2017, the Company reported that the landlord of the
facility in Durham County, NC that Argos had previously intended to
utilize as its primary manufacturing facility (“Centerpoint”), had,
with Argos' full consent, successfully completed the sale of this
facility to a third party. In connection with this transaction,
Argos entered into a lease termination agreement pursuant to which
Argos received cash proceeds of approximately $1.8 million.
- In January 2018 the Company entered into a stock purchase
agreement with Lummy under which the Company agreed to issue and
sell to Lummy in a private financing 375,000 shares of common stock
(as adjusted for the one-for-twenty reverse stock split) for an
aggregate purchase price of $1.5 million. In March 2018, the stock
purchase agreement was amended to reduce the aggregate purchase
price for the shares to $450,000. Concurrent with such amendment,
the license agreement with Lummy was amended to provide for a $1.05
million milestone payment, which the Company has earned. Payments
with respect to these amended agreements are expected to be
received during April 2018.
- In January 2018, the Company implemented a one-for-twenty
reverse stock split, and subsequently regained compliance with the
Nasdaq $1.00 minimum bid price requirement. The Company was
also granted an extension until April 24, 2018 to regain compliance
with the $2.5 million minimum shareholders’ equity requirement for
continued listing on the Nasdaq Capital Market.
- From June 2017 through December 31, 2017, the Company raised
net proceeds of $15.5 million through the issuance of common stock
in an at-the-market offering under the Company’s original sales
agreement with Cowen & Company, LLC (“Cowen”). In February
2018, the original sales agreement with Cowen was amended to
increase the maximum aggregate offering price of the shares of the
Company’s common stock which may be sold under the agreement from
$30 million to $45 million. As of March 16, 2018, an additional
$7.3 million of net proceeds had been raised through the sale of
the Company’s common stock subsequent to December 31, 2017 and
$15.8 million remained available for sale.
- In February 2018, the Company announced that it had entered
into an option agreement with Pharmstandard International, S.A.,
the Company’s partner in Russia and certain other territories, and
Actigen Limited under which the Company has an option to license a
group of fully human anti-PD1 monoclonal antibodies
(PD1 checkpoint inhibitors) and related technology.
- In February 2018, the Company announced the issuance of a
patent covering the strain-independent amplification of human
immunodeficiency virus, or HIV, nucleic acid sequences for use in
vaccinations. The methods described in this patent form the
foundation for the manufacture of AGS-004, Argos' experimental
dendritic cell-based immunotherapy for HIV.
Financial Results
Fourth Quarter 2017
Financials
Revenue for the fourth quarter ended December
31, 2017 was $1.7 million compared to $0.2 million during the
fourth quarter of 2016. The increase in revenue during the fourth
quarter of 2017 compared with the fourth quarter of 2016 resulted
from the receipt of a $1.5 million milestone payment from Lummy
related to the transfer of technology for the manufacture of
Rocapuldencel-T.
Research and development expense for the fourth
quarter ended December 31, 2017 was $4.1 million compared to $10.3
million during the fourth quarter of 2016. The decrease in research
and development expense during the fourth quarter of 2017 compared
with the fourth 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 as well as to significantly reduce the size of its
workforce engaged in research and development activities following
the independent data monitoring committee’s (“IDMC”) recommendation
in February 2017 to discontinue the ADAPT trial for futility.
General and administrative expense for the
fourth quarter ended December 31, 2017 was $2.7 million compared to
$4.8 million during the fourth quarter of 2016. The decrease in
general and administrative expense during the fourth quarter of
2017 compared with the fourth quarter of 2016 was primarily due to
decreased consulting and personnel costs.
Additionally, during the fourth quarter of 2017
the Company recognized a gain on disposal of impaired property of
$2.8 million resulting from proceeds of $1.8 million that were
received in connection with the sale of the Centerpoint facility
and a $1.0 million gain from the disposal of certain property from
the Saint-Gobain debt restructuring, as well as a $0.6 million gain
on the early extinguishment of debt related to the Saint-Gobain
debt restructuring. During the fourth quarter ended December 31,
2016, the Company recorded an impairment charge of $0.7 million,
which was partially offset by a non-cash gain due to the decrease
in the value of the warrant liability of $0.6 million.
Interest expense for the fourth quarter ended
December 31, 2017 was $0.2 million compared to $0.3 million during
the fourth quarter of 2016. The decrease in interest expense during
the fourth quarter of 2017 compared with the fourth quarter of 2016
was primarily due to a lower average balance of debt
outstanding.
Reflecting the factors noted above, net loss for
the fourth quarter ended December 31, 2017 was $1.9 million
compared to a net loss of $15.4 million during the fourth quarter
of 2016.
Full Year 2017 Financials
Revenue for the year ended December 31, 2017 was
$1.9 million compared to $0.9 million during 2016. The increase in
revenue for 2017 compared with 2016 resulted primarily from the
receipt of a $1.5 million milestone payment from Lummy during 2017,
which was partially offset by the $0.6 million decrease in
reimbursement under the Company's contract with the National
Institutes of Health and the National Institute of Allergy and
Infectious Diseases primarily reflecting the achievement of certain
specified development milestones under the Company's AGS-004
program during 2016.
Research and development expense for the year
ended December 31, 2017 was $21.7 million compared to $38.3 million
during 2016. The decrease in research and development expense for
2017 compared with 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 in February 2017 to discontinue the ADAPT trial for
futility.
General and administrative expense for the year
ended December 31, 2017 was $12.2 million compared to $14.2 million
during 2016. The decrease in general and administrative expense for
2017 compared with 2016 was primarily due to decreased consulting
and personnel costs.
Additionally, during the year ended December 31,
2017 the Company incurred impairment charges of $27.3 million and
restructuring charges of $6.0 million 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 $20.8 million, a gain on the disposal of
impaired property of $2.8 million, and a gain on the early
extinguishment of debt of $2.4 million. During the year ended
December 31, 2016, the Company recorded a non-cash gain due to the
decrease in the value of the warrant liability of $1.0 million,
which was partially offset by an impairment charge of $0.7
million.
Interest expense for the year ended December 31,
2017 was $1.3 million compared to $1.8 million during 2016. The
decrease in interest expense for 2017 compared with 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 year ended December 31, 2017 was $40.6 million compared to a
net loss of $53.0 million during 2016.
As of December 31, 2017, cash and cash
equivalents totaled $15.2 million. The Company expects that its
current cash and cash equivalents, including approximately $7.3
million in net proceeds that the Company has raised from the sale
of its common stock in its at-the-market facility during the first
quarter of 2018, will be sufficient to fund its planned operations
through the end of 2018.
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
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
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|
ARGOS THERAPEUTICS, INC. |
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
Three Months Ended |
Year Ended |
|
December 31, |
December 31, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
Revenue |
$ |
1,670,949 |
|
$ |
163,640 |
|
$ |
1,899,398 |
|
$ |
945,468 |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research
and development |
|
4,070,962 |
|
|
10,301,058 |
|
|
21,656,096 |
|
|
38,307,236 |
|
General
and administrative |
|
2,661,466 |
|
|
4,828,280 |
|
|
12,183,235 |
|
|
14,203,301 |
|
Impairment of property and equipment |
|
50,036 |
|
|
741,114 |
|
|
27,254,385 |
|
|
741,114 |
|
Restructuring costs |
|
— |
|
|
— |
|
|
6,031,779 |
|
|
— |
|
Gain on
disposal of impaired property |
|
(2,767,540 |
) |
|
— |
|
|
(2,767,540 |
) |
|
— |
|
|
|
|
|
|
Total
operating expenses |
|
4,014,924 |
|
|
15,870,452 |
|
|
64,357,955 |
|
|
53,251,651 |
|
|
|
|
|
|
Operating
loss |
|
(2,343,975 |
) |
|
(15,706,812 |
) |
|
(62,458,557 |
) |
|
(52,306,183 |
) |
|
|
|
|
|
Interest income |
|
14,000 |
|
|
32,927 |
|
|
64,485 |
|
|
57,326 |
|
Interest
expense |
|
(218,228 |
) |
|
(291,797 |
) |
|
(1,308,201 |
) |
|
(1,774,740 |
) |
Gain on
early extinguishment of debt |
|
600,119 |
|
|
— |
|
|
2,356,478 |
|
|
— |
|
Change in
fair value of warrant liability |
|
76,794 |
|
|
621,958 |
|
|
20,758,425 |
|
|
1,007,352 |
|
Other
income (expense) |
|
(21,581 |
) |
|
(11,112 |
) |
|
9,860 |
|
|
(11,865 |
) |
|
|
|
|
|
Net
loss |
|
(1,892,871 |
) |
|
(15,354,836 |
) |
|
(40,577,110 |
) |
|
(53,028,110 |
) |
|
|
|
|
|
Net
loss per share, basic and diluted |
$ |
(0.38 |
) |
$ |
(7.45 |
) |
$ |
(13.45 |
) |
$ |
(33.14 |
) |
|
|
|
|
|
Weighted average shares outstanding, basic and diluted |
|
4,992,418 |
|
|
2,062,257 |
|
|
3,017,409 |
|
|
1,600,286 |
|
|
|
|
|
|
|
|
ARGOS THERAPEUTICS, INC. |
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
December 31, |
|
|
2017 |
|
|
2016 |
|
|
|
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ |
15,188,838 |
|
$ |
52,973,376 |
Assets held for sale |
|
600,000 |
|
|
1,452,172 |
Prepaid expenses and other current assets |
|
1,395,583 |
|
|
1,076,246 |
|
|
|
Total current assets |
|
17,184,421 |
|
|
55,501,794 |
Property
and equipment, net |
|
3,582,323 |
|
|
40,951,577 |
Restricted
cash |
|
— |
|
|
740,000 |
Other
assets |
|
11,020 |
|
|
11,020 |
|
|
|
Total assets |
$ |
20,777,764 |
|
$ |
97,204,391 |
|
|
|
|
|
|
Liabilities and Stockholders’ (Deficit)
Equity |
|
|
Current liabilities |
|
|
Accounts payable |
$ |
970,650 |
|
$ |
5,377,377 |
Accrued expenses |
|
1,263,867 |
|
|
9,980,891 |
Current portion of notes payable |
|
4,972,649 |
|
|
11,475,480 |
Current portion of other convertible notes |
|
2,350,000 |
|
|
— |
Current portion of manufacturing research and development
obligation |
|
— |
|
|
3,653,203 |
Current portion of facility and capital lease obligations |
|
— |
|
|
122,887 |
|
|
|
Total current liabilities |
|
9,557,166 |
|
|
30,609,838 |
Convertible
note payable to related party |
|
6,302,959 |
|
|
— |
Long-term
portion of other convertible notes |
|
5,830,583 |
|
|
— |
Long-term
portion of notes payable |
|
— |
|
|
18,673,298 |
Long-term
portion of manufacturing research and development obligation |
|
— |
|
|
4,509,033 |
Long-term
portion of facility and capital lease obligations |
|
— |
|
|
9,592,966 |
Deferred
liabilities |
|
8,153,500 |
|
|
6,723,500 |
Warrants |
|
167,636 |
|
|
20,926,061 |
Total
stockholders’ (deficit) equity |
|
(9,234,080 |
) |
|
6,169,695 |
|
|
|
Total liabilities and stockholders’ (deficit) equity |
$ |
20,777,764 |
|
$ |
97,204,391 |
|