Homology Medicines Reports First Quarter 2022 Financial Results and Recent Highlights
17 May 2022 - 6:15AM
Homology Medicines, Inc. (Nasdaq: FIXX), a genetic medicines
company, announced today financial results for the first quarter
ended March 31, 2022, and highlighted recent accomplishments.
“During the first quarter of 2022, we took additional steps to
pave the way for Homology’s success,” said Arthur Tzianabos, Ph.D.,
Chief Executive Officer of Homology Medicines. “We established a
new Manufacturing and Innovation Business with Oxford Biomedica to
leverage what we built early on at Homology as an industry leader
in AAV process development and manufacturing. The unique structure
of the deal provides us with ownership in the new company and
preferred customer access to the team and capabilities that has and
will continue to support our clinical trials and pipeline.
Importantly, we believe that the $130 million upfront payment from
OXB provides us with ample cash to achieve important milestones
across all of our programs. With a continued focus on clinical
execution and advancing our pipeline, we promoted Albert Seymour to
President of Homology, expanding his role as Chief Scientific
Officer to oversee clinical development, human resources and
commercial operations.”
Albert Seymour, Ph.D., President and Chief Scientific Officer of
Homology Medicines, added, “We are excited to present the details
behind our optimized HMI-103 gene editing candidate for PKU for the
first time at ASGCT this week. We believe that the novel mechanism
of action of this integrating vector will represent an important
advance in the field of gene editing. Among multiple other
presentations at ASGCT, we plan to share data characterizing a
capsid from our family of novel AAVHSCs that has low affinity for
the liver after I.V. administration but retains tropism for other
cell types. As a result, we believe this novel capsid offers
greater possibility in developing treatments focused mainly on
cardiac tissue, muscle or the central nervous system, while
reducing the exposure to the liver.”
Dr. Seymour continued, “Since receiving the official letter from
the FDA in March pertaining to a clinical hold on our pheNIX gene
therapy trial for PKU, we have worked diligently to respond to the
FDA’s request for information, which included potential
risk-mitigation strategies and proposed protocol amendments. We are
pleased to have submitted what we believe is a comprehensive
response and will continue to work with the FDA to resolve the hold
as quickly as possible.”
First Quarter 2022 and Recent
Accomplishments
- Closed the deal with Oxford Biomedica (OXB) to establish an AAV
Innovation and Manufacturing Business that incorporated Homology’s
technical and manufacturing operations, team and GMP facility.
Homology received $130 million in non-dilutive capital from OXB and
maintains access as a preferred customer to the ‘plug and play’ AAV
manufacturing process and platform, as well as shares in potential
benefits as a 20% owner of the business.
- Announced upcoming presentations at the American Society for
Gene & Cell Therapy (ASGCT) 25th Annual Meeting May 16-19,
2022, including:
- Several presentations featuring HMI-103 investigational gene
editing candidate for phenylketonuria (PKU), including optimization
and mechanism of action, and genome-wide integration assays
conducted to confirm no off-target editing;
- New information from the GTx-mAb platform, including data that
further characterize the expression of C5 antibodies following a
one-time administration;
- Characterization of a non-liver-tropic capsid and other details
on the characterization of Homology’s family of 15 naturally
derived AAVHSCs; and
- A symposium on Wednesday, May 18 at 7:30 a.m. ET to feature
guest speaker Jerry Vockley, Ph.D., M.D., FACMG, Division Director,
Genetic and Genomic Medicine, Professor of Pediatrics and Human
Genetics, and Director, Center for Rare Disease Therapy at the
University of Pittsburgh, and Lead Principal Investigator for the
pheEDIT HMI-103 trial.
- Announced today that Homology submitted a response to the U.S.
Food and Drug Administration (FDA) regarding the clinical hold on
the pheNIX gene therapy trial of HMI-102 in adults with PKU. As
previously disclosed, the clinical hold related only to the pheNIX
trial and pertained to elevated liver function tests (LFTs)
observed in the trial, including a request for modified
risk-mitigation measures. Homology plans to provide the next update
on pheNIX when the path forward is established with the FDA.
- As part of the response, Homology included a protocol amendment
to incorporate the same targeted immunosuppressive regimen in the
ongoing pheEDIT clinical trial, which utilizes a T-cell inhibitor,
is shorter in duration and reduces the length of steroid therapy.
The new regimen is aligned with data that show that T-cell
inhibitors dampen the immune response to AAV capsids in the
clinical setting. Homology believes the regimen may also increase
patient compliance.
- As previously reported, all instances of LFT elevations have
resolved, and no hospitalizations were required.
- Promoted Albert Seymour, Ph.D., to President in addition to his
role as Homology’s Chief Scientific Officer.
First Quarter 2022 Financial Results
- Net income for the quarter ended March 31, 2022 was $92.1
million compared to a net loss of $(1.1) million for the quarter
ended March 31, 2021. Net income for the three months ended March
31, 2022 was primarily due to a gain of $131.2 million on the sale
of the Company’s manufacturing operations, offset by operating
expenses of $38.4 million. Diluted net income per share was $1.59
compared to diluted net (loss) per share of ($0.02) for the same
period in 2021.
- Collaboration revenues for the quarter ended March 31, 2022
were $0.8 million, compared to $29.3 million for the quarter ended
March 31, 2021. Collaboration revenues for the three months ended
March 31, 2021 included the recognition of approximately $28.5
million of deferred revenue and reimbursement of R&D expenses
as a result of concluding the Company’s collaboration with
Novartis. Also included in collaboration revenues in both periods
is revenue recognized under the Company’s Stock Purchase Agreement
with Pfizer.
- Total operating expenses for the quarter ended March 31, 2022
were $38.4 million, compared to $30.4 million for the quarter ended
March 31, 2021, and consisted of research and development expenses
and general and administrative expenses.
- Research and development expenses for the quarter ended March
31, 2022 were $24.3 million, compared to $21.8 million for the
quarter ended March 31, 2021. Research and development expenses
increased due to higher external development costs for earlier
stage programs, specifically related to the development of HMI-104,
Homology’s GTx-mAb product candidate for PNH, and HMI-203, the
Company’s investigational gene therapy in development for the
treatment of adults with Hunter syndrome. Employee-related costs
also increased due to additional employee headcount to support
ongoing development programs and research initiatives, which
resulted in increases in salaries, payroll taxes and stock-based
compensation expense. Partially offsetting these increases was
decreased direct research expenses for HMI-102 as the trial was
placed on clinical hold.
- General and administrative expenses for the quarter ended March
31, 2022 were $14.1 million, compared to $8.7 million for the
quarter ended March 31, 2021. The increase in general and
administrative expenses was largely due to professional fees
incurred in connection with the OXB transaction, which included
strategic advisory, legal and audit fees related to the unique
structure of the collaboration that provided for Homology’s 20%
ownership in the new business, preferred customer status, and the
transfer of assets including its technical operations team, GMP
facility, and associated intellectual property.
- In March of 2022, the Company closed its transaction with OXB
and recorded a gain of $131.2 million on the sale of Homology’s
manufacturing operations. As a result, Homology recorded an income
tax provision of $1.0 million for the three months ended
March 31, 2022 that predominately resulted from the sale,
after utilization of net operating loss carryforwards and tax
credits.
- As of March 31, 2022, Homology had approximately $256.1 million
in cash, cash equivalents and short-term investments. Based on
current projections, Homology still expects cash resources to fund
operations into the second half of 2024.
Upcoming Events
- Homology ASGCT Symposium: May 18 at 7:30 a.m. ET
- H.C. Wainwright Global Investment Conference: Available
on-demand May 24 at 7 a.m. ET
About Homology Medicines, Inc.Homology
Medicines, Inc. is a clinical-stage genetic medicines company
dedicated to transforming the lives of patients suffering from rare
diseases by addressing the underlying cause of the disease. The
Company’s clinical programs include HMI-102, an investigational
gene therapy for adults with phenylketonuria (PKU); HMI-103, a gene
editing candidate for PKU; and HMI-203, an investigational gene
therapy for Hunter syndrome. Additional programs focus on
metachromatic leukodystrophy (MLD), paroxysmal nocturnal
hemoglobinuria (PNH) and other diseases. Homology’s proprietary
platform is designed to utilize its family of 15 human
hematopoietic stem cell-derived adeno-associated virus (AAVHSCs)
vectors to precisely and efficiently deliver genetic medicines in
vivo through a gene therapy or nuclease-free gene editing modality,
as well as to deliver one-time gene therapy to produce antibodies
throughout the body through the GTx-mAb platform. Homology has a
management team with a successful track record of discovering,
developing and commercializing therapeutics with a focus on rare
diseases. Homology believes its initial clinical data and
compelling preclinical data, scientific and product development
expertise and broad intellectual property position the Company as a
leader in genetic medicines. For more information, visit
www.homologymedicines.com.
Forward-Looking Statements This press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements
contained in this press release that do not relate to matters of
historical fact should be considered forward-looking statements,
including, without limitation, statements regarding our
expectations surrounding the potential, safety, efficacy, and
regulatory and clinical progress of our product candidates,
including our expectations surrounding our ability to resolve the
clinical hold placed on the HMI-102 program and the timing of
related updates; the potential of our gene therapy and gene editing
platforms, including our GTx-mAb platform; our plans and timing for
the release of additional preclinical and clinical data; our
position as a leader in the development of genetic medicines; the
sufficiency of our cash and cash equivalents to fund our
operations; activities related to our agreements with Oxford
Biomedica Solutions LLC; and our participation in upcoming
presentations and conferences. These statements are neither
promises nor guarantees, but involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements, including, but not
limited to, the following: the impact of the COVID-19 pandemic on
our business and operations, including our preclinical studies and
clinical trials, and on general economic conditions; we have and
expect to continue to incur significant losses; our need for
additional funding, which may not be available; failure to identify
additional product candidates and develop or commercialize
marketable products; the early stage of our development efforts;
potential unforeseen events during clinical trials could cause
delays or other adverse consequences; risks relating to the
regulatory approval process; interim, topline and preliminary data
may change as more patient data become available, and are subject
to audit and verification procedures that could result in material
changes in the final data; our product candidates may cause serious
adverse side effects; inability to maintain our collaborations, or
the failure of these collaborations; our reliance on third parties,
including for the manufacture of materials for our research
programs, preclinical and clinical studies; failure to obtain U.S.
or international marketing approval; ongoing regulatory
obligations; effects of significant competition; unfavorable
pricing regulations, third-party reimbursement practices or
healthcare reform initiatives; product liability lawsuits;
securities class action litigation; failure to attract, retain and
motivate qualified personnel; the possibility of system failures or
security breaches; risks relating to intellectual property and
significant costs incurred as a result of operating as a public
company. These and other important factors discussed under the
caption “Risk Factors” in our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2022 and our other filings with the
Securities and Exchange Commission (SEC) could cause actual results
to differ materially from those indicated by the forward-looking
statements made in this press release. Any such forward-looking
statements represent management’s estimates as of the date of this
press release. While we may elect to update such forward-looking
statements at some point in the future, we disclaim any obligation
to do so, even if subsequent events cause our views to change.
- Financial Tables Follow –
HOMOLOGY MEDICINES, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
As of |
|
|
March 31, 2022 |
|
December 31, 2021 |
Cash, cash equivalents and short-term investments |
|
$ |
256,126 |
|
|
$ |
155,873 |
|
Assets held for sale |
|
|
— |
|
|
|
28,907 |
|
Equity method investment |
|
|
30,639 |
|
|
|
— |
|
Property and equipment, net |
|
|
1,986 |
|
|
|
2,252 |
|
Right-of-use assets |
|
|
15,609 |
|
|
|
15,607 |
|
Other assets |
|
|
6,598 |
|
|
|
9,082 |
|
Total assets |
|
$ |
310,958 |
|
|
$ |
211,721 |
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
$ |
16,192 |
|
|
$ |
13,772 |
|
Accrued income taxes |
|
|
967 |
|
|
|
— |
|
Operating lease liabilities |
|
|
23,983 |
|
|
|
23,934 |
|
Deferred revenue |
|
|
3,562 |
|
|
|
4,364 |
|
Stockholders' equity |
|
|
266,254 |
|
|
|
169,651 |
|
Total liabilities and stockholders' equity |
|
$ |
310,958 |
|
|
$ |
211,721 |
|
|
|
|
|
|
HOMOLOGY MEDICINES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except share and per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Collaboration revenue |
|
$ |
802 |
|
|
$ |
29,305 |
|
Operating expenses: |
|
|
|
|
Research and development |
|
|
24,273 |
|
|
|
21,755 |
|
General and administrative |
|
|
14,147 |
|
|
|
8,661 |
|
Total operating expenses |
|
|
38,420 |
|
|
|
30,416 |
|
Loss from operations |
|
|
(37,618 |
) |
|
|
(1,111 |
) |
Other income: |
|
|
|
|
Gain on sale of business |
|
|
131,249 |
|
|
|
— |
|
Interest income |
|
|
32 |
|
|
|
38 |
|
Total other income |
|
|
131,281 |
|
|
|
38 |
|
Income (loss) before income taxes |
|
|
93,663 |
|
|
|
(1,073 |
) |
Provision for income taxes |
|
|
(967 |
) |
|
|
— |
|
Loss from equity method investment |
|
|
(591 |
) |
|
|
— |
|
Net income (loss) |
|
$ |
92,105 |
|
|
$ |
(1,073 |
) |
Net income (loss) per share-basic |
|
$ |
1.61 |
|
|
$ |
(0.02 |
) |
Net income (loss) per share-diluted |
|
$ |
1.59 |
|
|
$ |
(0.02 |
) |
Weighted-average common shares outstanding-basic |
|
|
57,279,963 |
|
|
|
50,363,579 |
|
Weighted-average common shares outstanding-diluted |
|
|
57,875,576 |
|
|
|
50,363,579 |
|
|
|
|
|
|
Company ContactsTheresa McNeelyChief
Communications Officerand Patient
Advocatetmcneely@homologymedicines.com781-301-7277
Media Contact:Cara Mayfield Vice President,
Patient Advocacy and Corporate Communications
cmayfield@homologymedicines.com 781-691-3510
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