JERUSALEM, May 11, 2020 /PRNewswire/ -- Intec Pharma Ltd.
(NASDAQ: NTEC) ("Intec" or "the Company") today announces financial
results for the first quarter ended March
31, 2020 and provides a corporate update.
Highlights from the Quarter and Recent Weeks
- Announced that the Accordion Pill (AP) developed for a Merck
& Co. (MSD) proprietary compound met the in vitro
specifications set forth in the companies' research collaboration
and the Company is now in discussions with MSD regarding advancing
the program into the clinic;
- Enhanced the balance sheet with a $6.5
million public offering in February
2020 and with a $5 million
registered direct offering in May
2020;
- Received a $1.5 million payment
from Novartis related to the conclusion of the Feasibility Option
Agreement the Company had with Novartis;
- Initiated AP-Carbidopa/Levodopa (AP CD/LD) commercial
manufacturing stability lots with LTS Lohmann Therapie-Systeme AG
(LTS);
- Completed the redesign of AP-Tetrahydrocannabinol (AP-THC) and
are awaiting delivery of synthetic THC to initiate clinical
material production; and
- Initiated next generation AP technologies to include longer
retention times (e.g. 24 hour gastric retention) as well as larger
molecules (e.g. peptides).
Management Commentary
"We continue to build the company's scientific and technical
expertise in oral drug delivery and drug-on-film technologies. Our
research and manufacturing teams continue to drive innovation as we
expand our capabilities and build out our portfolio of potential
applications," stated Jeffrey A.
Meckler, Vice Chairman and Chief Executive Officer of Intec
Pharma.
"In collaboration with our partner, LTS, we demonstrated our
ability to manufacture at commercial scale. This proficiency,
coupled with our recent successes in developing unique APs to meet
the technical specifications set forth by Novartis and Merck,
enhances our ability to engage in partnership discussions with
other large biopharma companies as we actively seek to add more
collaborative agreements in 2020.
"Our partnering activities for the AP-CD/LD program in
Parkinson's disease continue and there remain multiple parties with
interest in this program. Unfortunately, this has not progressed to
an agreement and believe this is related to certain
commercialization concerns as well as to the overall market
environment as a result of the COVID-19 pandemic. In addition, we
continue our discussions with Merck with an aim to advance that
program into human pharmacokinetic (PK) trials.
"We are delighted to report the completion of a new AP design
for our AP-THC program that we expect will meet our stringent PK
specifications. We are currently awaiting receipt of the active
pharmaceutical ingredients so we can initiate clinical material
production and, hopefully, advance this program into the clinic
later this year.
"In February and May 2020 we
strengthened our balance sheet believing that a stronger financial
position enhances our ability to negotiate with partners and
provides us with a longer runway to achieve key objectives.
"As the COVID-19 situation rapidly evolves, we are committed to
protecting and supporting our workforce and the communities where
we live and work and we implemented remote working and workplace
protocols for our employees in accordance with government
requirements. Our partnering efforts depend in part, on attendace
at in-person meetings, industry conferences and other events, and
as a result there has been disruption to our efforts to advance
this process. We continue to closely evaluate the evolving pandemic
as it unfolds and look forward to the end of this healthcare
crisis," added Mr. Meckler.
Financial Highlights for First Quarter Ended March 31,
2020
Research and development expenses, net, for the three-month
period ended March 31, 2020 were approximately $2.0
million, a decrease of $6.5 million, or approximately 76%,
compared with approximately $8.5 million in the
three-month period ended March 31, 2019. The decrease was
primarily due to the ACCORDANCE study and Open Label Extension
study, both of which were completed during 2019, decrease in
expenses related to the scale up activities for the commercial
scale manufacturing and a decrease in payroll and related expenses,
mostly due to a reduction in headcount.
General and administrative expenses for the three-month period
ended March 31, 2020 were approximately $1.7
million, a decrease of $500,000, or approximately 23%,
compared with approximately $2.2 million in the
three-month period ended March 31, 2019. The decrease was
primarily related to a decrease in payroll and related expenses,
including reduction in headcount, share-based compensation and
reduction in certain expenses related to investor relations
activities and professional services.
Net loss for the three-month period ended March 31,
2020 was approximately $3.9 million, a decrease
of $6.8 million, or approximately 64%, compared with the net
loss for the three-month period ended March 31, 2019 of
approximately $10.7 million. The decrease was mainly due to a
decrease in research and development expenses, net and general and
administrative expenses, as detailed above.
Loss per ordinary share for the first quarter ended March
31, 2020, was $0.08 compared with $0.32 for the
first quarter ended March 31, 2019.
As of March 31, 2020, the Company had cash and cash
equivalents of approximately $10.9 million. As of December 31, 2019, the Company had cash and cash
equivalents and marketable securities of approximately $10.1 million. In February
2020, the Company raised $6.5
million in an underwritten public offering of 16,250,000
ordinary shares (which included pre-funded warrants to purchase
ordinary shares in lieu thereof) and warrants to purchase up to
16,250,000 ordinary shares, at a public offering price
of $0.40 per ordinary share and warrant. The warrants
have an exercise price of $0.40 per share, are
immediately exercisable, and will expire five years from the date
of issuance.
Net cash used in operating activities was
approximately $5.1 million for the quarter
ended March 31, 2020 compared with net cash used in operating
activities of approximately $7.3 million for the quarter
ended March 31, 2019. This decrease resulted primarily from a
decrease in research and development activities in the amount of
approximately $6.5 million, offset by
changes in operating asset and liability items of approximately
$4.3 million.
The Company had positive cash flow from investing activities of
approximately $769,000 for the quarter ended March
31, 2020 compared to negative cash flow from investing activities
of approximately $640,000 for the quarter
ended March 31, 2019. This change resulted primarily from an
investment in the establishment of the commercial scale
manufacturing in the amount of approximately $1.2 million in the quarter ended March 31,
2019 and an increase in proceeds from the disposal of
marketable securities in the amount of approximately $200,000.
Net cash provided by financing activities for the quarter ended
March 31, 2020 was approximately
$6.1 million, which was provided by
the proceeds from the Company's underwritten public offering in
February 2020 that resulted in net
proceeds of approximately $5.7
million and by the funds received from the sale of our
ordinary shares under the "at-the-market" equity offering program
that resulted in net proceeds of approximately $421,000. Net cash provided by financing
activities for the quarter ended March 31,
2019 was approximately $161,000, which was provided by the proceeds from
the exercise of options by employees.
In May, 2020, the Company raised $5
million in a registered direct offering of 16,291,952
ordinary shares at a purchase price of $0.3069 per share. In addition, in a concurrent
private placement, the Company also sold and issued to the
purchasers in the offering unregistered warrants to purchase
8,145,976 ordinary shares. The warrants have an exercise price of
$0.245 per share, are immediately
exercisable, and will expire five and one-half years from the date
of issuance.
About Intec Pharma Ltd.
Intec Pharma is a clinical-stage biopharmaceutical company
focused on developing drugs based on its proprietary Accordion Pill
platform technology. The Company's Accordion Pill is an oral drug
delivery system that is designed to improve the efficacy and safety
of existing drugs and drugs in development by utilizing an
efficient gastric retention and specific release mechanism. The
Company's product pipeline includes two product candidates in
clinical trial stages: Accordion Pill Carbidopa/Levodopa, or
AP-CD/LD, which is in late-stage Phase 3 development for the
treatment of Parkinson's disease symptoms in advanced Parkinson's
disease patients, and AP-cannabinoids, an Accordion Pill to deliver
either or both of the primary cannabinoids contained in Cannabis
sativa, cannabidiol (CBD) and tetrahydrocannabinol (THC) for
various pain indications. In addition, the Company has a research
collaboration with Merck & Co.
For more information, visit www.intecpharma.com. Intec
Pharma routinely posts information that may be important to
investors in the Investor Relations section of its website.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward looking statements about our
expectations, beliefs and intentions. Forward-looking statements
can be identified by the use of forward-looking words such as
"believe", "expect", "intend", "plan", "may", "should", "could",
"might", "seek", "target", "will", "project", "forecast",
"continue" or "anticipate" or their negatives or variations of
these words or other comparable words or by the fact that these
statements do not relate strictly to historical matters. These
forward-looking statements are based on assumptions and assessments
made in light of management's experience and perception of
historical trends, current conditions, expected future developments
and other factors believed to be appropriate. Forward-looking
statements in this press release are made as of the date of this
press release, and we undertake no duty to update or revise any
such statements, whether as a result of new information, future
events or otherwise. Forward-looking statements are not guarantees
of future performance and are subject to risks and uncertainties,
many of which are outside of our control. Many factors could cause
our actual activities or results to differ materially from the
activities and results anticipated in forward-looking statements,
including, but not limited to, the following: our limited operating
history and history of operating losses, our ability to continue as
a going concern, our ability to obtain additional financing, the
impact of the outbreak of coronavirus, our ability to successfully
operate our business or execute our business plan, the timing and
cost of our clinical trials, the completion and receiving favorable
results in our clinical trials, our ability to obtain and maintain
regulatory approval of our product candidates, our ability to
protect and maintain our intellectual property and licensing
arrangements, our ability to develop, manufacture and commercialize
our product candidates, the risk of product liability claims, the
availability of reimbursement, and the influence of extensive and
costly government regulation. More detailed information about the
risks and uncertainties affecting us is contained under the heading
"Risk Factors" included in our most recent Annual Report on Form
10-K filed with the SEC on March 13, 2020, and in
other filings that we have made and may make with
the Securities and Exchange Commission in the future.
INTEC PHARMA
LTD.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
March
31,
|
December
31,
|
|
2020
|
2019
|
|
U.S.
dollars
in
thousands
|
Assets
|
|
|
CURRENT
ASSETS:
|
|
|
Cash and cash
equivalents
|
$
10,892
|
$
9,292
|
Investment in
marketable securities
|
-
|
770
|
Prepaid expenses and
other receivables
|
2,638
|
3,683
|
TOTAL CURRENT
ASSETS
|
13,530
|
13,745
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
Property and
equipment, net
|
2,272
|
2,575
|
Operating lease
right-of-use assets
|
1,117
|
1,243
|
Other
assets
|
3,717
|
3,717
|
TOTAL NON-CURRENT
ASSETS
|
7,106
|
7,535
|
|
|
|
TOTAL
ASSETS
|
$
20,636
|
$
21,280
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
CURRENT
LIABILITIES -
|
|
|
Accounts payable and
accruals:
|
|
|
Trade
|
$
930
|
$
3,507
|
Other
|
4,187
|
4,835
|
TOTAL CURRENT
LIABILITIES
|
5,117
|
8,342
|
LONG-TERM
LIABILITIES -
|
|
|
Operating lease liabilities
|
647
|
799
|
Other liabilities
|
652
|
604
|
TOTAL LONG-TERM
LIABILITIES
|
1,299
|
1,403
|
TOTAL
LIABILITIES
|
6,416
|
9,745
|
|
|
|
COMMITMENTS AND
CONTINGENT LIABILITIES
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
Ordinary shares,
with no par value - authorized: 100,000,000
Ordinary Shares as of March 31, 2020 and December 31,
2019; issued
and outstanding: 52,973,580 and 35,892,209 Ordinary
Shares as of
March 31, 2020 and December 31, 2019,
respectively
|
727
|
727
|
Additional paid-in
capital
|
206,786
|
200,231
|
Accumulated
deficit
|
(193,293)
|
(189,423)
|
TOTAL
SHAREHOLDERS' EQUITY
|
14,220
|
11,535
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
20,636
|
$
21,280
|
INTEC
PHARMA LTD.
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(Unaudited)
|
|
|
Three months
ended March 31
|
|
2020
|
2019
|
|
U.S.
dollars
in
thousands
|
OPERATING
EXPENSES:
|
|
|
RESEARCH AND
DEVELOPMENT EXPENSES, net
|
$
(2,024)
|
$
(8,542)
|
GENERAL AND
ADMINISTRATIVE EXPENSES
|
(1,715)
|
(2,190)
|
OPERATING
LOSS
|
(3,739)
|
(10,732)
|
FINANCIAL INCOME
(EXPENSES), net
|
(70)
|
110
|
LOSS BEFORE
INCOME TAX
|
(3,809)
|
(10,622)
|
INCOME
TAX
|
(61)
|
(34)
|
NET
LOSS
|
$
(3,870)
|
$
(10,656)
|
|
|
U.S.
dollars
|
LOSS PER ORDINARY
SHARE - BASIC AND DILUTED
|
$
(0.08)
|
$
(0.32)
|
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING USED IN COMPUTATION OF
BASIC
AND DILUTED LOSS PER ORDINARY SHARE
IN
THOUSANDS
|
46,918
|
33,247
|
INTEC
PHARMA LTD.
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY
|
(Unaudited)
|
|
|
Ordinary
Shares
|
Additional
paid-in
capital
|
Accumulated
Deficit
|
Total
|
|
Number
of shares
|
Amounts
|
Amounts
|
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
BALANCE AT JANUARY
1, 2019
|
33,232,988
|
$
727
|
$
194,642
|
(141,824)
|
$
53,545
|
CHANGES IN THE
THREE-
MONTH PERIOD ENDED
MARCH 31, 2019:
|
|
|
|
|
|
Exercise of
options
|
64,383
|
-
|
257
|
-
|
257
|
Share-based
compensation
|
-
|
-
|
943
|
-
|
943
|
Net loss
|
-
|
-
|
-
|
(10,656)
|
(10,656)
|
BALANCE AT MARCH
31, 2019
|
33,297,371
|
$
727
|
$
195,842
|
$
(152,480)
|
$
44,089
|
|
|
|
|
|
|
BALANCE AT JANUARY
1, 2020
|
35,892,209
|
$
727
|
$
200,231
|
(189,423)
|
$
11,535
|
CHANGES IN THE
THREE-
MONTH PERIOD ENDED
MARCH 31, 2020:
|
|
|
|
|
|
Issuance of ordinary
shares, net of
issuance costs
|
831,371
|
-
|
421
|
-
|
421
|
Issuance of ordinary
shares and
warrants, net of issuance
costs
|
16,250,000
|
-
|
5,692
|
-
|
5,692
|
Share-based
compensation
|
-
|
-
|
442
|
-
|
442
|
Net loss
|
-
|
-
|
-
|
(3,870)
|
(3,870)
|
BALANCE AT MARCH
31, 2020
|
52,973,580
|
$
727
|
$
206,786
|
$
(193,293)
|
$
14,220
|
INTEC
PHARMA LTD.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(Unaudited)
|
|
|
Three months
ended
March 31
|
|
2020
|
2019
|
|
U.S. dollars in
thousands
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
Net loss
|
$
(3,870)
|
$
(10,656)
|
Adjustments
required to reconcile net loss to net cash used in
operating activities:
|
|
|
Depreciation
|
306
|
218
|
Exchange differences
on cash and cash equivalents
|
135
|
8
|
Change in right of use
asset
|
126
|
163
|
Change in lease
liabilities
|
(152)
|
(98)
|
Gains on marketable
securities
|
(2)
|
-
|
Share-based
compensation
|
442
|
943
|
Changes in operating
assets and liabilities:
|
|
|
Decrease in prepaid
expenses and other receivables
|
1,045
|
340
|
Increase in deferred
tax assets
|
-
|
(69)
|
Increase (decrease) in
accounts payable and accruals
|
(3,225)
|
1,813
|
Increase in other
liabilities
|
48
|
76
|
Net cash used in
operating activities
|
(5,147)
|
(7,262)
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
Purchase of property
and equipment
|
(3)
|
(10)
|
Investment in other
assets
|
-
|
(1,206)
|
Proceeds from disposal
of marketable securities, net
|
772
|
576
|
Net cash (used in)
provided by investing activities
|
769
|
(640)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
Proceeds from issuance
of ordinary shares, net of issuance
costs
|
421
|
-
|
Proceeds from issuance
of ordinary shares and warrants, net of
issuance costs
|
5,692
|
-
|
Proceeds from exercise
of options
|
-
|
161
|
Net cash provided by
financing activities
|
6,113
|
161
|
INCREASE
(DECREASE) IN CASH AND CASH
EQUIVALENTS
|
1,735
|
(7,741)
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF
THE PERIOD
|
9,292
|
39,246
|
EXCHANGE
DIFFERENCES ON CASH AND CASH
EQUIVALENTS
|
(135)
|
(8)
|
CASH AND CASH
EQUIVALENTS AT END OF THE
PERIOD
|
$
10,892
|
$
31,497
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF NON-CASH
INVESTING AND FINANCING
ACTIVITIES:
|
|
|
Liability with
respect to property and equipment
|
$
-
|
$
462
|
Liability with
respect to other assets
|
$
-
|
$
648
|
Receivables with
respect to exercise of options
|
$
-
|
$
96
|
|
|
|
SUPPLEMENTARY
DISCLOSURE OF CASH FLOW
INFORMATION -
|
|
|
Interest
received
|
$
9
|
$
128
|
Intec Pharma Investor Contact:
Will O'Connor
Stern IR
+1 212-362-1200
will@sternir.com
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SOURCE Intec Pharma Ltd.