Achillion Pharmaceuticals, Inc.
(Nasdaq:ACHN)
, a clinical stage biopharmaceutical
company focused on developing inhibitors of the complement
alternative pathway, today announced an operational restructuring
plan that aims to focus the organization on advancing Achillion’s
existing clinical and late-stage preclinical factor D inhibitors
and reduce expenses to maintain its strong balance sheet. The plan
is expected to deliver approximately $10 million of savings in 2018
over 2017 expense levels. The restructuring will reduce the
Company’s workforce by approximately 20% to approximately 70
employees.
In addition, the Company announced that Joseph
Truitt has been promoted to President and Chief Operating Officer,
continuing to report to Chief Executive Officer, Milind Deshpande,
Ph.D.
Dr. Deshpande stated, “We are focused on
executing against our 2018 strategic objectives with the goal of
delivering transformative therapies to patients. We believe the
operational expertise that Joe brings to his new role will
strengthen our capabilities to achieve those objectives. While it
is difficult to undertake a restructuring, we believe through
efficient use of our capital, we will have the potential to build
significant value in our Factor D inhibitor portfolio.”
Mr. Truitt commented, “At Achillion, we have
established ourselves as a leader in complement alternative pathway
(AP) research, drug development and intellectual property with the
depth and breadth of our patent portfolio. Our lead compound,
ACH-4471, is in phase 2 studies in both C3 glomerulopathy (C3G) and
paroxysmal nocturnal hemoglobinuria (PNH) and I look forward to
delivering on our goal of additional clinical data in these
indications in 2018. I am particularly enthusiastic about our work
in C3G where our market research has shed light on the underserved
needs of these patients who have a debilitating disease that is
believed to be caused by an overactive AP. C3G affects at least
8,000 people in the United States and the major European markets,
specifically France, Germany, Italy, Spain and the United Kingdom,
and there are no approved treatments.”
2018 Areas of Strategic
Focus
- ACH-4471, oral factor D inhibitor, for the treatment of
C3G & IC-MPGN• Completion of a Phase 2 14-day
study in patients with C3G or IC-MPGN with interim data targeted
for third quarter 2018;• Initiation of a 6-month double-blind,
placebo-controlled therapeutic study in patients with C3G with data
available in 2019; and• Initiation of a 12-month, open-label study
in patients with C3G with interim data targeted for fourth quarter
2018.
- ACH-4471, oral factor D inhibitor, for the treatment of
PNH• Continuation of on-going Phase 2 monotherapy study
with interim data targeted for fourth quarter 2018; and• Initiation
of add-on study with eculizumab with interim data targeted for
fourth quarter 2018.
- ACH-5228 and ACH-5548, next-generation factor D
inhibitors• Completion of a Phase 1, single-ascending dose
clinical study of ACH-5228 in healthy volunteers, which was
initiated in December 2017; and• Initiation of a phase 1,
single-ascending dose clinical study of ACH-5548 in healthy
volunteers targeted to be initiated in the second quarter 2018;
and• Results for both next-generation compounds (ACH-5228 and
ACH-5548) targeted for fourth quarter 2018.
Financial Results
Achillion also reported earnings for the three
months and year ended December 31, 2017.
Fourth Quarter 2017 Financial
Results
For the three months ended December 31, 2017,
the Company reported a net loss of $23.2 million, compared to a net
loss of $4.4 million in the three months ended December 31, 2016.
During the three months ended December 31, 2017, the Company did
not recognize any revenue compared to the three months ended
December 31, 2016 in which it recognized $15.0 million of revenue
under the Janssen Agreement that was terminated effective November
8, 2017.
Research and development expenses were $15.7
million in the fourth quarter of 2017, compared to $15.0 million
for the same period of 2016. The increase was primarily due to
increased clinical trial expenses for ACH-4471 and manufacturing
and formulation expenses for ACH-5228.
For the three months ended December 31, 2017,
general and administrative expenses totaled $8.7 million, compared
to $5.3 million in the same period in 2016. The increase was
primarily the result of the Company’s payment of the underwriting
fees in connection with the public resale by the Johnson and
Johnson Development Corporation in November 2017 of all the shares
of common stock it acquired from the Company in 2015.
Year-end 2017 Financial
Results
For the year ended December 31, 2017, the
Company's net loss was $85.2 million, or $0.62 per share, compared
to a net loss of $61.7 million for the year ended December 31,
2016, or $0.45 per share. During the year ended December 31, 2017,
Achillion did not recognize any revenue compared to the year ended
December 31, 2016 in which Achillion recognized $15.0 million of
revenue under the Janssen Agreement that was terminated effective
November 8, 2017.
For the year ended December 31, 2017, research
and development expenses totaled $65.1 million, compared to $59.2
million for the year ended December 31, 2016. The increase
primarily related to clinical trial costs for ACH-4471 combined
with increased preclinical and manufacturing costs for ACH-5228.
Discovery research costs related to our next-generation factor D
inhibitors also increased, and were partially offset by decreased
preclinical and manufacturing costs for ACH-4471.
General and administrative expenses were $24.5
million for the year ended December 31, 2017, compared to $20.7
million for the year ended December 31, 2016. The increase was
primarily due to legal and consulting fees, as well as the
Company’s payment of underwriting fees, in connection with the
public resale by the Johnson and Johnson Development Corporation in
November 2017 of all the shares of common stock it acquired from
the Company in 2015.
Cash, cash equivalents, marketable securities,
and interest receivable at December 31, 2017 were $331.8
million.
Restructuring Details and 2018 Financial
Guidance
In February, the Company implemented a plan of
restructuring to focus on the Company’s clinical stage and
late-stage preclinical portfolio while retaining the biology and
chemistry core strengths necessary to support future clinical
development and continue research with its complement factor D
portfolio. Under the restructuring, the Company expects to reduce
annual projected operating expenses by approximately $10 million,
or 12%, from 2017 levels and reduced headcount by approximately 20%
over 2017 levels.
As a result of its restructuring, the Company
expects that research and development expenses during 2018 will be
approximately $58-60 million, that general and administrative
expenses will be approximately $19 - 20 million, and that net cash
used in operating activities in 2018 will be approximately $68 - 70
million based on current operating plans, anticipated timelines and
the estimated cost of clinical trials and product development
programs. Year-end 2018 cash, cash equivalents and marketable
securities are anticipated to total approximately $260 million. The
net loss per share for fiscal 2018 is anticipated to approximate
$0.55 - 0.58 per share.
Webcast and Dial-in
Information
Achillion will host a conference call and
simultaneous webcast on Thursday, February 22, 2018 at 8:30 a.m.
EST. To participate in the conference call, please dial (866)
205-4820 in the U.S. or (419) 386-0004 for international callers. A
live audio webcast of the call will be accessible at
http://www.achillion.com or http://ir.achillion.com. Please connect
to Achillion's website several minutes prior to the start of the
broadcast to ensure adequate time for any software download that
may be necessary.
A replay of the webcast will be available for 30
days on http://www.achillion.com. Alternatively, a telephonic
replay of the conference call will be available starting at 11:30
a.m. EST on February 22, 2018, through 11:30 a.m. EST on February
26, 2018 by dialing (855) 859-2056 or (404) 537-3406. The replay
passcode is 1079527.
About C3G
C3G is a devastating disease affecting the
kidney, believed to be caused by an overactive AP and for which
there is no FDA approved therapy. C3G affects persons of all ages,
with an incidence estimated to be at 1-2 cases per year per
1,000,000 people in both the U.S and EU. There are estimated to be
at least 8,000 people with C3G in the United States and the major
European markets, specifically France, Germany, Italy, Spain and
the United Kingdom, and there are no approved treatments. C3G
describes a rare kidney disease characterized by the presence of C3
protein fragments in the filtering units (glomeruli) of the kidney.
C3 fragment deposition is reported to result from over-activation
of the complement alternative pathway. The chronic deposition of C3
fragments results in inflammation in the glomeruli
(glomerulonephritis) and often subsequent permanent renal damage.
It is reported that an estimated 30-50% of C3G patients will
require dialysis or a transplant within 10 years of diagnosis.
About PNH
PNH is thought to be caused by a mutation
resulting in the absence of receptors normally present on red blood
cells (RBCs) that interact with the AP. The AP of the complement
system typically functions normally in these patients but due to
the lack of key receptors, known as CD55 and CD59, on the surface
of PNH RBCs, the AP treats these cells as foreign and destroys them
via hemolysis in the circulatory system (intravascular) and in the
liver or spleen (extravascular). Complement factor D is a critical
protein within the amplification loop of the AP and it is believed
that inhibiting it could control the AP response. Furthermore, this
mechanism of action represents a potentially distinct and unique
therapeutic approach for controlling intravascular and
extravascular hemolysis associated with PNH.
About the Complement Factor D
Platform
Achillion has leveraged its internal discovery
capabilities and a novel complement-related drug development
platform to develop small molecule factor D inhibitor compounds
that target the complement AP. Factor D is an essential serine
protease involved in the AP, a part of the innate immune system.
Achillion's complement platform is focused on seeking to advance
small molecule compounds that inhibit factor D and can potentially
be used in the treatment of immune-related diseases in which the AP
plays a critical role. Potential indications currently being
evaluated for these compounds include C3G, immune complex-mediated
membranoproliferative glomerulonephritis (IC-MPGN), paroxysmal
nocturnal hemoglobinuria (PNH).
About Achillion
Pharmaceuticals
Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) is
a science-driven, patient-focused biopharmaceutical company seeking
to leverage its capabilities across the continuum from discovery
through commercialization in its goal of meeting the needs of
people with complement-mediated diseases. The company has employed
a highly-disciplined discovery and development approach that has
allowed it to develop potent and specific complement factor D
inhibitors for AP-mediated diseases. Achillion is rapidly advancing
its efforts to bring potentially life-saving medicines to patients
with rare diseases. More information is available
at http://www.achillion.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release includes forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that are subject to risks, uncertainties and
other important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements.
Achillion may use words such as “expect,” “anticipate,” “project,”
“target,” “intend,” “plan,” “aim,” “believe,” “seek,” “estimate,”
“can,” “could” “focus,” “will,” “look forward,” “goal,” and “may”
and similar expressions to identify such forward-looking
statements. These forward-looking statements also include
statements about: Achillion’s expected plans, timing, data readouts
and results from ongoing and planned clinical trials of ACH-4471,
ACH-5228 and ACH-5548; the potential advancement of Achillion’s
other small molecule factor D inhibitors; the anticipated costs and
benefits of Achillion’s restructuring plans; Achillion’s guidance
regarding its financial results for 2018; and statements concerning
Achillion’s strategic goals, milestone plans, and prospects. Among
the important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements
are risks relating to, among other things Achillion’s ability to:
advance the preclinical and clinical development of its complement
factor D inhibitors under the timelines it projects in current and
future preclinical studies and clinical trials; realize the planned
cost savings benefits of its restructuring plan; obtain and
maintain patent protection for its drug candidates and the freedom
to operate under third party intellectual property; demonstrate in
any current and future clinical trials the requisite safety,
efficacy and combinability of its drug candidates; obtain and
maintain necessary regulatory approvals; establish commercial
manufacturing arrangements; identify and enter into collaboration
agreements with third-parties; compete successfully in the markets
in which it seeks to develop and commercialize its product
candidates and future products; manage expenses and achieve the
levels of research and development expense, cash burn, and net loss
it has projected for fiscal 2018; manage litigation; raise the
substantial additional capital needed to achieve its business
objectives; and successfully execute on its business strategies.
These and other risks are described in the reports filed by
Achillion with the U.S. Securities and Exchange Commission,
including its Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2017, and its subsequent SEC filings.
In addition, any forward-looking statement in
this press release represents Achillion's views only as of the date
of this press release and should not be relied upon as representing
its views as of any subsequent date. Achillion disclaims any duty
to update any forward-looking statement, except as required by
applicable law.
-- Financial Tables Attached
--
ACHILLION PHARMACEUTICALS INC.
(ACHN) |
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Statements of
Operations |
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(in thousands, except per share amounts) |
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Three Months
Ended |
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Year
Ended |
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December
31, |
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December
31, |
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2017 |
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2016 |
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2017 |
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2016 |
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Revenue |
$ |
- |
|
|
$ |
15,000 |
|
|
$ |
- |
|
|
$ |
15,000 |
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|
|
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|
Operating
expenses: |
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|
|
|
|
|
|
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Research and
development |
|
15,684 |
|
|
|
15,029 |
|
|
|
65,052 |
|
|
|
59,162 |
|
|
General and
administrative |
|
8,671 |
|
|
|
5,260 |
|
|
|
24,524 |
|
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|
20,703 |
|
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|
|
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|
|
|
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|
Total operating expenses |
|
24,355 |
|
|
|
20,289 |
|
|
|
89,576 |
|
|
|
79,865 |
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Loss from
operations |
|
(24,355 |
) |
|
|
(5,289 |
) |
|
|
(89,576 |
) |
|
|
(64,865 |
) |
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Other income
(expense): |
|
|
|
|
|
|
|
|
Interest
income |
|
1,165 |
|
|
|
874 |
|
|
|
4,390 |
|
|
|
3,227 |
|
|
Interest
expense |
|
(13 |
) |
|
|
(14 |
) |
|
|
(50 |
) |
|
|
(68 |
) |
|
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Net loss |
$ |
(23,203 |
) |
|
$ |
(4,429 |
) |
|
$ |
(85,236 |
) |
|
$ |
(61,706 |
) |
|
|
|
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Net loss per share -
basic and diluted |
$ |
(0.17 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.45 |
) |
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|
Weighted average shares
outstanding - basic and diluted |
|
137,870 |
|
|
|
136,693 |
|
|
|
137,180 |
|
|
|
136,667 |
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Balance Sheets |
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(Unaudited, in thousands) |
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December
31, |
|
December
31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents,
marketable securities, and interest receivable |
$ |
331,845 |
|
|
$ |
392,486 |
|
|
|
Working capital |
|
291,054 |
|
|
|
368,564 |
|
|
|
Total assets |
|
337,613 |
|
|
|
413,875 |
|
|
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Long-term
liabilities |
|
214 |
|
|
|
450 |
|
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Total liabilities |
|
13,098 |
|
|
|
14,421 |
|
|
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Total stockholders'
equity |
|
324,515 |
|
|
|
399,454 |
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Investors & Media:
Glenn Schulman, PharmD, MPH
Executive Director, Investor Relations
Achillion Pharmaceuticals, Inc.
Tel. (203) 752-5510
gschulman@achillion.com
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