Aptevo Therapeutics Reports First Quarter 2020 Financial Results
- Advances Phase 1/1b Clinical Trial of APVO436 for the Treatment of Acute Myeloid Leukemia and High-Grade Myelodysplastic Syndrome; Cohort 6 Enrollment Ongoing
- Reports Preliminary Evidence of a Potential Clinical Response Observed with APVO436
- Sharpens Focus on Novel ADAPTIR™ Bispecific Pipeline; Completes Sale of Hemophilia B Asset IXINITY
SEATTLE, WA / ACCESSWIRE / May 13, 2020 / Aptevo Therapeutics Inc. (NASDAQ:APVO), a biotechnology company focused on developing novel immuno-oncology therapeutics based on its proprietary ADAPTIR™ bispecific technology platform, today provided a business review and reported its financial results for the first quarter ended March 31, 2020.
“Our divestiture of IXINITY, completed during the first quarter, set the stage for an exciting year ahead for Aptevo as we sharpen our focus on our most valuable asset – our ADAPTIR bispecific antibody platform,” said Marvin L. White, President and Chief Executive Officer. “The ADAPTIR platform is a robust technology engine capable of generating numerous combinations of bispecific immunotherapies and we have a pipeline of ADAPTIR candidates that are positioned to make important progress this year.
We were very pleased during the first quarter to report preliminary data from our ongoing Phase 1/1b clinical trial of our lead candidate, APVO436, which showed evidence of potential clinical activity of APVO436 at what we anticipate are lower doses than what we predict to be the therapeutic dose. As we reported, one patient in this cohort demonstrated a “bone marrow complete response,” which is defined as a bone marrow with ≤ 5% myeloblasts and a decrease ≥ 50% over pretreatment values. Although preliminary, these data are especially encouraging as we now progress APVO436 through doses that are anticipated to be in a therapeutic range. We will continue to provide updates on an ongoing basis as the trial progresses. Across the industry, COVID-19 has impacted the pace of clinical trial enrollment at many centers as deployment of medical personnel and resources have shifted, however, we are pleased to have some sites that are still continuing to enroll patients in the Phase 1/1b APVO436 study with some restrictions.
Also, during the quarter, we were pleased to announce that APVO436 was selected for inclusion in the groundbreaking ‘Beat AML Master Clinical Trial.’ Spearheaded by the Leukemia & Lymphoma Society (LLS), the Beat AML study is an unprecedented collaboration between academia, research and government to accelerate cutting-edge, novel treatments for patients with AML. Recent data from a competitor CD123 x CD3 bispecific presented at the American Association for Cancer Research annual meeting validated the TP53 mutation as a pathway for treatment of refractory AML patients, which we will also be evaluating in the APVO436 arm of the Beat AML study. As a result of the COVID-19 outbreak discussed above, LLS is delaying the start of the APVO436 arm of the Beat AML study, consequently, any Aptevo-related financial obligations associated with the study are currently on hold.
While APVO436 is our most advanced candidate, we have a pipeline of novel ADAPTIR bispecifics that are also poised to advance in 2020. ALG.APV-527, partnered with Alligator Bioscience, is a novel immunotherapeutic candidate targeting 4-1BB and the tumor antigen 5T4. Currently ALG.APV-527 is Phase 1 ready and we are actively seeking a partnership for further clinical development of this molecule. Importantly, there is increasing clinical validation for targeting 4-1BB with solid tumor antigens supporting a mechanism of action for ALG.APV-527 for treatment of multiple types of solid tumors. Our next candidate, APVO603, which targets 4-1BB and OX40 has shown promising preclinical efficacy with the potential to stimulate more robust anti-tumor responses by amplifying the cytotoxic function of activated T cells and NK cells, so we are excited to advance this molecule towards the clinic. Finally, we expect to announce the selection of a new ADAPTIR candidate later in the year.
In summary, with our lead candidate APVO436 advancing in the clinic and multiple new ADAPTIR candidates also progressing in development, we believe that 2020 will be an exciting time for Aptevo and our shareholders. Bispecific antibody therapeutics are gaining increasing attention and interest as the field progresses and Aptevo is well positioned with a diverse pipeline of candidates each with unique mechanisms of action targeting both hematological and solid cancers,” concluded Mr. White.
First Quarter 2020 Highlights
- Continued enrollment in a dose-escalation Phase 1/1b open-label clinical study of APVO436 in patients with Acute Myeloid Leukemia and High-Grade Myelodysplastic Syndrome; enrollment in Cohort 6 ongoing
- Announced the selection of APVO436 for inclusion in the Leukemia & Lymphoma Society’s Beat AML Master Clinical Trial; APVO436 being evaluated in patients newly diagnosed with AML
- Sold worldwide rights to IXINITY to Medexus Pharmaceuticals for an upfront payment to Aptevo of $30 million; potential milestone payments totaling up to $11 million; and the opportunity to receive significant deferred payments on future U.S. and Canadian net sales of IXINITY
- Fully repaid Aptevo’s $20 million term debt facility with MidCap Financial in February 2020 establishing a debt-free balance sheet
- Completed a 1-for-14 reverse stock split of Aptevo’s outstanding common stock
First Quarter 2020 Financial Results
Cash Position: Aptevo had cash, cash equivalents, and short-term investments as of March 31, 2020 totaling $14.8 million, including restricted cash of $2.5 million. In February 2020, Aptevo used a portion of the $30 million in upfront proceeds from the sale of IXINITY to repay in full Aptevo’s obligations to MidCap Financial, relieving Aptevo of its obligation to reserve $5 million of restricted cash.
Research and Development Expenses: Research and development expenses decreased by $2.6 million, to $4.0 million for the three months ended March 31, 2020 from $6.6 million for the three months ended March 31, 2019. Research and development expenses decreased primarily due to a decrease in expenses for APVO436 related to the timing of manufacturing and clinical trial activities, and a decrease in expenses for other clinical programs, including lower costs for programs discontinued in 2019.
General and Administrative Expenses: For the three months ended March 31, 2020, general and administrative expenses decreased by $0.9 million, or 20%, to $3.6 million from $4.5 million for March 31, 2019. This decrease was primarily due to reduced personnel and professional services costs.
Other Expense: Other expense consists primarily of interest on debt. For the three months ended March 31, 2020, other expense increased due to a loss on extinguishment of debt of $2.1 million, which consists of interest, exit, prepayment, and legal fees recognized during the three months ended March 31, 2020. There is no comparable activity in 2019. Other expense decreased from $0.6 million for the three months ended March 31, 2019 to $0.3 million for the three months ended March 31, 2020 due primarily to a decrease in the number of months during the quarter in which debt was outstanding.
Discontinued Operations: In connection with the sale of Aptevo BioTherapeutics, Aptevo recognized net income from discontinued operations totaling $12.9 million. This included the gain on the sale of Aptevo BioTherapeutics of $14.3 million and net operating losses from Aptevo BioTherapeutics of $1.6 million related to the period prior to the sale on February 28, 2020. The LLC Purchase Agreement with Medexus entitles Aptevo to receive future deferred payments and royalties.
Net Income (Loss): Aptevo’s net income for the period ended March 31, 2020 was $2.9 million or $0.89 per share, compared to a net loss of ($12.0) million or ($7.64) per share for the corresponding period in 2019.
COVID-19 Coronavirus
A novel strain of coronavirus, COVID-19 has spread through the world, including the United States. We have experienced and may experience additional disruptions that could severely impact our business and clinical trials, including:
- limitation of company operations, including work from home policies and office closures;
- delays or difficulties in receiving deliveries of critical experimental materials;
- delays or difficulties in enrolling patients in our clinical trials;
- delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;
- delays or difficulties to the financing environment and raising capital due to economic uncertainty;
- delays in opportunities to partner our product candidates, due to financial and other impacts on potential partners;
- diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;
- negative impact on suppliers and licensees;
- further delay in APVO436 initiation in the Beat AML trial;
- interruption of key clinical trial activities, such as patient enrollment and clinical trial site monitoring; and
- limitations in employee resources that would otherwise be focused on our business, including the conduct of our research and development activities and process development activities, such as because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people.
The global outbreak of the COVID-19 coronavirus continues to rapidly evolve. The extent to which the COVID-19 coronavirus may impact our business and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.
Financial Statements Follow
Aptevo Therapeutics Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts, unaudited)
|
|
March 31, 2020 |
December 31, 2019 |
||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 12,258 | $ | 12,448 | ||||
|
Prepaid expenses
|
1,343 | 1,078 | ||||||
|
Held for sale assets – current
|
– | 16,309 | ||||||
|
Other current assets
|
1,224 | 160 | ||||||
|
Total current assets
|
14,825 | 29,995 | ||||||
|
Restricted cash
|
2,529 | 7,498 | ||||||
|
Property and equipment, net
|
3,629 | 3,946 | ||||||
|
Operating lease right-of-use asset
|
3,504 | 3,747 | ||||||
|
Held for sale assets – non-current
|
– | 7,465 | ||||||
|
Other assets
|
757 | 757 | ||||||
|
Total assets
|
$ | 25,244 | $ | 53,408 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and other accrued liabilities
|
$ | 5,001 | $ | 6,427 | ||||
|
Accrued compensation
|
1,085 | 2,870 | ||||||
|
Current portion of long-term debt
|
– | 19,863 | ||||||
|
Held for sale liabilities – current
|
– | 8,135 | ||||||
|
Other current liabilities
|
907 | 944 | ||||||
|
Total current liabilities
|
6,993 | 38,239 | ||||||
|
Operating lease liability
|
3,099 | 3,327 | ||||||
|
Total liabilities
|
10,092 | 41,566 | ||||||
|
|
||||||||
|
Stockholders’ equity:
|
||||||||
|
Preferred stock: $0.001 par value; 15,000,000 shares authorized, zero shares
issued or outstanding
|
– | – | ||||||
|
Common stock: $0.001 par value; 500,000,000 shares authorized; 3,232,811
and 3,234,232 shares issued and outstanding at March 31, 2020 and
December 31, 2019, respectively
|
45 | 45 | ||||||
|
Additional paid-in capital
|
180,066 | 179,653 | ||||||
|
Accumulated deficit
|
(164,959 | ) | (167,856 | ) | ||||
|
Total stockholders’ equity
|
15,152 | 11,842 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 25,244 | $ | 53,408 | ||||
*All share figures have been adjusted to reflect the 14:1 reverse stock split
Aptevo Therapeutics Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts, unaudited)
|
|
For the Three Months Ended March 31, |
|||||||
|
|
2020 | 2019 | ||||||
|
Operating expenses:
|
||||||||
|
Research and development
|
4,006 | 6,634 | ||||||
|
General and administrative
|
3,616 | 4,528 | ||||||
|
Total operating expenses:
|
7,622 | 11,162 | ||||||
|
Other expense:
|
||||||||
|
Other expense, net
|
275 | 579 | ||||||
|
Loss on extinguishment of debt
|
2,104 | – | ||||||
|
Net loss from continuing operations
|
$ | 10,001 | $ | 11,741 | ||||
|
Discontinued operations:
|
||||||||
|
Income (loss) from discontinued operations
|
$ | 12,898 | $ | (277 | ) | |||
|
Net income (loss)
|
$ | 2,897 | $ | (12,018 | ) | |||
|
|
||||||||
|
Net loss from continuing operations
|
$ | (3.06 | ) | $ | (7.46 | ) | ||
|
Net income (loss) from discontinued operations
|
$ | 3.94 | $ | (0.18 | ) | |||
|
Basic and diluted net income (loss) per basic share
|
$ | 0.89 | $ | (7.64 | ) | |||
|
Weighted-average shares used to compute per share calculations
|
3,270,089 | 1,573,233 | ||||||
About Aptevo Therapeutics Inc.
Aptevo Therapeutics Inc. is a clinical-stage biotechnology company focused on developing novel immunotherapies for the treatment of cancer. The Company’s lead clinical candidate, APVO436, and preclinical candidates, ALG.APV-527 and APVO603 were developed based on the Company’s versatile and robust ADAPTIR™ modular protein technology platform. The ADAPTIR platform is capable of generating highly differentiated bispecific antibodies with unique mechanisms of action for the treatment of different types of cancer. For more information, please visit www.aptevotherapeutics.com
Safe Harbor Statement
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including, without limitation, statements regarding potential milestone payments, Aptevo’s outlook, financial performance or financial condition, estimated cash burn, Aptevo’s technology and related pipeline, collaboration and partnership opportunities, commercial portfolio, milestones, and any other statements containing the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “forecasts,” “estimates,” “will” and similar expressions are forward-looking statements. These forward-looking statements are based on Aptevo’s current intentions, beliefs and expectations regarding future events. Aptevo cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from Aptevo’s expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks only as of the date of this press release, and, except as required by law, Aptevo does not undertake to update any forward-looking statement to reflect new information, events or circumstances.
There are a number of important factors that could cause Aptevo’s actual results to differ materially from those indicated by such forward-looking statements, including a deterioration in Aptevo’s business or prospects; adverse developments in research and development; adverse developments in the U.S. or global capital markets, credit markets or economies generally; and changes in regulatory, social and political conditions. Additional risks and factors that may affect results are set forth in Aptevo’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, as filed on March 25, 2020 and its subsequent reports on Form 10-Q and current reports on Form 8-K. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from Aptevo’s expectations in any forward-looking statement.
CONTACT:
Aptevo Therapeutics
Stacey Jurchison
Senior Director, Investor Relations and Corporate Communications
206-859-6628
JurchisonS@apvo.com
SOURCE: Aptevo Therapeutics
View source version on accesswire.com:
https://www.accesswire.com/589562/Aptevo-Therapeutics-Reports-First-Quarter-2020-Financial-Results
