Arsanis, Inc. (NASDAQ: ASNS), a clinical-stage biopharmaceutical
company focused on applying monoclonal antibody (mAb)
immunotherapies to address serious infectious diseases, today
reported financial results for the second quarter ended June
30, 2018.
“While we remain disappointed regarding the outcome of the
interim analysis of our ASN100 Phase 2 clinical trial, our team is
working diligently to evaluate the complete dataset from the 154
patients that were enrolled in the trial to better understand the
basis for this result,” said René Russo, President and Chief
Executive Officer of Arsanis. “We expect to complete this
evaluation in the fourth quarter of this year and have ceased
further clinical development of ASN100, pending the results of this
analysis.”
Dr. Russo continued, “In addition to the ongoing review of the
ASN100 clinical trial data and the continued development of our
ASN500 program, we intend to continue to support our collaborators
across our ASN200 and ASN300 programs, both of which were
outlicensed to subsidiaries of Bravos Biosciences, LLC during the
first half of 2018. We are also working with our Board of Directors
to consider strategic options that may potentially result in
changes to our business strategy and future operations.”
“We believe that the approximately $50 million in cash and cash
equivalents on-hand at June 30, 2018 provides for sufficient
resources to fund our planned operations into the first quarter of
2020,” said Mike Gray, Chief Operating and Chief Financial Officer
of Arsanis. “We believe that this cash position will allow us to
continue to pursue the development of our ASN500 program while
concurrently considering potential strategic options for
Arsanis.”
Recent Key Business Developments
- In June 2018, Arsanis announced the discontinuation of its
Phase 2 clinical trial of ASN100 for the prevention of S. aureus
pneumonia in high-risk, mechanically ventilated patients following
the completion of a planned interim analysis by an independent data
review committee, or DRC, of unblinded trial data for the first 118
patients enrolled in the trial. Based on the results of this
analysis, the DRC determined that the trial was futile, meaning
that it was not likely to meet its primary end-point upon
completion, and recommended that the trial be discontinued.
Arsanis intends to complete follow-up visits on all patients dosed
in the trial per the study protocol and to evaluate the complete
dataset from the 154 patients that were enrolled in the trial upon
discontinuation to better understand the basis for this
result. Arsanis has ceased further clinical development of
ASN100 pending the completion of this data review and currently
does not expect to incur material costs for this program beyond the
fourth quarter of 2018.
- On August 10, 2018, Arsanis’ board of directors approved a
reduction in workforce to reduce operating costs and better align
the company’s workforce with the needs of its business following
Arsanis’ discontinuation of the clinical development of ASN100.
As part of this reduction in workforce, Arsanis plans to
eliminate 19 positions across the company, representing
approximately 44% of its workforce. Arsanis anticipates that it
will substantially complete the implementation of the reduction in
workforce by the fourth quarter of 2018.
Arsanis currently estimates that it will incur total expenses
relating to the reduction in workforce of approximately $0.6
million, which is comprised of notice and severance payments.
Arsanis expects to record these charges in the third and fourth
quarters of 2018.
- In June 2018, Arsanis outlicensed mAbs targeting K. pneumoniae
discovered by Arsanis in its ASN300 program to a subsidiary of
Bravos Biosciences LLC, which will have the exclusive right to
conduct further preclinical development activities on the licensed
mAbs, with an option to enter into an exclusive global development
and commercial license.
- In August 2018, Arsanis entered into an amended and restated
grant agreement with the Bill & Melinda Gates Foundation (the
“Gates Foundation”), replacing the existing February 2017 grant
agreement in its entirety. The update conforms the agreement
to the current Gates Foundation audit, reporting, and other
administrative requirements and makes the perpetual license that is
granted to the Gates Foundation with respect to any funded
developments resulting from the grant agreement irrevocable. All
other material terms of the February 2017 grant agreement remain
unchanged, including the agreement to provide Arsanis up to $9.3
million to conduct preclinical development of mAbs for the
prevention of respiratory syncytial virus (“RSV”) infection in
newborns (the “RSV project”).
- In August 2018, Arsanis entered into a separate grant agreement
with the Gates Foundation granting Arsanis up to $1.1 million in
additional funding to conduct preclinical development activities
for the RSV project that were not included in the existing February
2017 grant agreement.
Second Quarter 2018 Financial Results
For the second quarter ended June 30, 2018, Arsanis reported a
net loss of $12.1 million, or $0.85 loss per share, as compared to
a net loss of $5.7 million, or $11.13 loss per share for the second
quarter of 2017.
Operating expenses for the second quarter of 2018 were $12.6
million, as compared to $5.6 million for the second quarter of
2017, and were comprised of the following:
Research and development expenses were $8.9 million for the
second quarter of 2018, as compared to $3.9 million for the second
quarter of 2017. The increase of $5.0 million was primarily due to
an increase of $3.6 million in direct costs for Arsanis’ ASN100
program, an increase of $0.1 million in direct costs for its ASN500
program, and an increase of $1.4 million in unallocated research
and development expenses.
General and administrative expenses were $3.7 million for the
second quarter of 2018, compared to $1.7 million for the second
quarter of 2017. The increase of $1.9 million was primarily related
to additional costs associated with operating as a public company,
including increases of $0.9 million in personnel costs, primarily
due to an increase in headcount and employee compensation, $0.1
million in Board of Directors fees, $0.2 million in insurance fees
and $0.7 million in professional fees primarily due to legal and
accounting costs.
Other income, net was $0.5 million for the second quarter of
2018, compared to $0.1 million of other expense, net for the second
quarter of 2017.
Year-to-Date 2018 Financial Results
For the six months ended June 30, 2018, Arsanis reported a net
loss of $22.8 million, or $1.59 loss per share, as compared to a
net loss of $11.1 million, or $21.62 loss per share for the six
months ended June 30, 2017.
Operating expenses for the six months ended June 30, 2018 were
$23.6 million, as compared to $11.5 million for the six months
ended June 30, 2017, and were comprised of the following:
Research and development expenses were $17.1 million for the six
months ended June 30, 2018, compared to $8.3 million for the six
months ended June 30, 2017. The increase of $8.8 million was
primarily due to an increase of $6.3 million in direct costs for
Arsanis’ ASN100 program, an increase of $0.3 million in direct
costs for the Company’s ASN500 program, and an increase of $2.1
million in unallocated research and development expenses.
General and administrative expenses were $6.5 million for the
six months ended June 30, 2018, compared to $3.2 million for the
six months ended June 30, 2017. The increase of $3.3 million was
primarily related to additional costs associated with operating as
a public company, including increases of $1.3 million in personnel
costs, primarily due to an increase in headcount and employee
compensation, $0.3 million in Board of Directors fees, $0.3 million
in insurance fees and $1.3 million in professional fees primarily
due to legal and accounting costs associated with being a public
company.
Other income, net was $0.8 million for the six months ended June
30, 2018, compared to $0.4 million for the six months ended June
30, 2017.
As of June 30, 2018, cash and cash equivalents totaled $49.9
million, with approximately 14.32 million shares of common stock
outstanding.
About Arsanis
Arsanis, Inc. is a clinical-stage biopharmaceutical company
focused on applying monoclonal antibody (mAb) immunotherapies to
address serious infectious diseases. A deep understanding of the
pathogenesis of infection, paired with access to some of the most
advanced mAb discovery techniques and platforms available today,
has positioned Arsanis to further its goal of building
and advancing a pipeline of novel mAbs with multiple mechanisms of
action and high potency against their intended targets. Arsanis’
pipeline is comprised of mAbs targeting multiple serious bacterial
and viral pathogens, including respiratory syncytial virus.
Arsanis is a U.S. company headquartered in Waltham,
Massachusetts, with a wholly owned subsidiary that is primarily
focused on discovery research in Vienna, Austria (Arsanis
Biosciences GmbH).
For more information, please visit the Arsanis website
at www.arsanis.com.
ARSANIS, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(Amounts in
thousands) (Unaudited)
|
|
June 30, 2018 |
|
|
December 31, 2017 |
Assets |
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
49,940 |
|
|
$ |
76,793 |
Restricted cash |
|
|
346 |
|
|
|
355 |
Grant and incentive
receivables |
|
|
2,178 |
|
|
|
1,608 |
Property and equipment,
net |
|
|
353 |
|
|
|
421 |
Prepaid expenses and
other assets |
|
|
4,393 |
|
|
|
2,077 |
Total assets |
|
$ |
57,210 |
|
|
$ |
81,254 |
Liabilities,
and stockholders’ equity |
|
|
|
|
|
|
|
Accounts
payable, accrued expenses and other liabilities |
|
$ |
6,023 |
|
|
|
7,681 |
Unearned
income |
|
|
2,231 |
|
|
|
2,630 |
Loans
payable, net of discount |
|
|
11,192 |
|
|
|
12,236 |
Total liabilities |
|
|
19,446 |
|
|
|
22,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
37,764 |
|
|
|
58,707 |
Total
liabilities and stockholders' equity |
|
$ |
57,210 |
|
|
$ |
81,254 |
ARSANIS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in
thousands, except share and per share amounts)
(Unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
$ |
8,930 |
|
|
$ |
3,906 |
|
|
$ |
17,063 |
|
|
$ |
8,297 |
|
General
and administrative |
|
|
3,686 |
|
|
|
1,738 |
|
|
|
6,503 |
|
|
|
3,174 |
|
Total
operating expenses |
|
|
12,616 |
|
|
|
5,644 |
|
|
|
23,566 |
|
|
|
11,471 |
|
Loss from
operations |
|
|
(12,616 |
) |
|
|
(5,644 |
) |
|
|
(23,566 |
) |
|
|
(11,471 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant and
incentive income |
|
|
516 |
|
|
|
862 |
|
|
|
961 |
|
|
|
1,562 |
|
Interest
expense |
|
|
(259 |
) |
|
|
(444 |
) |
|
|
(526 |
) |
|
|
(1,463 |
) |
Interest
income |
|
|
225 |
|
|
|
— |
|
|
|
441 |
|
|
|
— |
|
Change in
fair value of warrant liability |
|
|
— |
|
|
|
11 |
|
|
|
— |
|
|
|
11 |
|
Change in
fair value of derivative liability |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
762 |
|
Loss on
extinguishment of debt |
|
|
— |
|
|
|
(462 |
) |
|
|
— |
|
|
|
(462 |
) |
Other
income (expense), net |
|
|
1 |
|
|
|
(28 |
) |
|
|
(73 |
) |
|
|
(29 |
) |
Total
other income (expense), net |
|
|
483 |
|
|
|
(61 |
) |
|
|
803 |
|
|
|
381 |
|
Net loss |
|
|
(12,133 |
) |
|
|
(5,705 |
) |
|
|
(22,763 |
) |
|
|
(11,090 |
) |
Accretion of redeemable
convertible preferred stock to redemption value |
|
|
— |
|
|
|
(13 |
) |
|
|
— |
|
|
|
(20 |
) |
Net loss attributable
to common stockholders |
|
$ |
(12,133 |
) |
|
$ |
(5,718 |
) |
|
$ |
(22,763 |
) |
|
$ |
(11,110 |
) |
Net loss per share
attributable to common stockholders—basic and diluted |
|
$ |
(0.85 |
) |
|
$ |
(11.13 |
) |
|
$ |
(1.59 |
) |
|
$ |
(21.62 |
) |
Weighted average common
shares outstanding—basic and diluted |
|
|
14,304,102 |
|
|
|
513,900 |
|
|
|
14,299,288 |
|
|
|
513,900 |
|
Cautionary note regarding forward-looking
statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve substantial risks and uncertainties, including
statements regarding the development status of our product
candidates and programs, the timing and conduct of our analysis of
the cumulative unblinded data from the Phase 2 clinical trial of
ASN100, our plans regarding our ASN500 program; our plan to
consider strategic options that may result in changes to our
business strategy and future operations; our collaborations with
third parties; expectations regarding the costs associated with our
reduction on force; and the sufficiency of our cash and cash
equivalents to fund our planned operations. All statements, other
than statements of historical facts, contained in this press
release, including statements regarding our strategy, future
operations, future financial position, future revenue, projected
costs, prospects, plans and objectives of management, are
forward-looking statements. The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,”
“might,” “plan,” “potential,” “predict,” “project,” “should,”
“target,” “would,” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. We may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, and you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make as
a result of important factors, including, but not limited
to: our ability to successfully execute on our reduction in
force, business plans and strategies; uncertainties inherent in
drug development, including the availability and timing of data
from preclinical and clinical trials; the content and timing of
decisions made by the U.S. Food and Drug Administration and other
regulatory authorities and investigational review boards at
clinical trial sites; our ability to obtain and maintain
requisite regulatory approvals and to enroll patients in clinical
trials; competitive factors; our ability to obtain, maintain and
enforce patent and other intellectual property protection for any
product candidates we may seek to develop; the availability of cash
resources and our need for additional financing; and
other important risk factors as set forth in filings that we
periodically make with the U.S. Securities Exchange Commission, or
SEC. The forward-looking statements contained in this press
release reflect the current views of Arsanis, Inc. with respect to
future events, and we assume no obligation to update any
forward-looking statements except as required by applicable
law.
Media Contact:W2O Group Elliot
Fox, 212-257-6724efox@purecommunications.com
Investor Contact:Michael Gray,
781-819-5201Chief Operating and Chief Financial
Officermike.gray@arsanis.com
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