Aptevo Therapeutics Reports Second 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 Complete
- Presents New Preclinical Data Showing That ALG.APV-527 has Potential for a Favorable Safety Profile
- Extends Cash Runway into Q3 2021 Providing Runway Through Our Anticipated Clinical Data Read-Out for APVO436
- Reports Royalty Revenue from Pfizer for Sales of RUXIENCE
SEATTLE, WA / ACCESSWIRE / August 14, 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 second quarter ended June 30, 2020.
“In the second quarter of 2020, we are pleased to have collected our first royalty payment from Pfizer on sales of RUXIENCETM (rituximab-pvvr). In 2020, we have added two new non-dilutive quarterly royalty streams to our portfolio – one for RUXIENCE and one for IXINITY® coagulation factorIX (recombinant). In the first half of the year, we have earned approximately $0.8 million of royalties from these streams. Additional non-dilutive funding was announced last week when we closed a $25 million term loan agreement with MidCap Financial Trust. This financing provides us with a solid cash position and extends our cash runway into the third quarter of 2021, which, based on pre-clinical modelling, is beyond the currently anticipated time required to achieve a potentially efficacious dose level in our APVO 436 Phase 1/1b clinical trial,” continued Jeff Lamothe, Chief Financial Officer of Aptevo.
“Consistent with our strategy to prioritize non-dilutive funding opportunities to strengthen our financial position in support of pipeline development, in Q2 we also announced that we engaged Piper Sandler to sell our RUXIENCEand IXINITYroyalty streams and IXINITY milestone payments”, Mr. Lamothe concluded.
Bispecific antibody therapeutics continue to gain attention in the immuno-oncology space and Aptevo is well positioned with a diverse pipeline of candidates, each with unique mechanisms of action targeting both hematological and solid tumor cancers, which are advancing in both clinical and pre-clinical development.
“We are excited that, despite headwinds created by the COVID-19 pandemic, our APVO436 clinical trial has completed dosing cohort 6 this month and remains on track for dosing in cohort 8 before the end of the year. In addition our latest preclinical data for ALG.APV-527 looks very encouraging and shows that ALG.APV-527 may overcome the limitations observed with other 4-1BB monoclonal antibody therapeutics by improving biodistribution of the drug to the tumor and reducing potential toxicity issues related to systemic immune activation”, said Marvin L. White, President and Chief Executive Officer. “The preclinical data presented at the PEGS Virtual Interactive Global Summit show that ALG.APV-527 selectively enhances the function of activated T cells and NK cells only when the tumor antigen, 5T4, is engaged; additional preclinical studies demonstrate that ALG.APV-527 potently rejects tumors in an in vivo animal model”, continued Mr. White.
“With our lead candidate APVO436 advancing in the clinic and multiple new ADAPTIR candidates also progressing in development, we continue to believe that the next twelve months will be transformational for Aptevo and our shareholders,” concluded Mr. White.
Portfolio Update:
APVO436: APVO436, targeting CD123, a cell surface receptor highly expressed in several hematological malignancies, and CD3, a T-cell co-receptor that promotes cytotoxicity, is currently in a Phase 1/1b open label clinical trial in patients with Acute Myeloid Leukemia (AML) and High-Grade Myelodysplastic Syndrome (MDS). To date, we have dosed 28 patients in this trial. Thus far, we have analyzed data from 21 of those patients and see no evidence of drug-induced anti-drug antibodies (ADA). In addition to our continuing Phase 1/1b trial, we look forward to the commencement of the APVO436 arm of the Leukemia & Lymphoma Society Beat AML clinical trial, anticipated to commence later this year.
ALG.APV-527: ALG.APV-527, partnered with Alligator Bioscience and targeting 4-1BB and the tumor antigen 5T4, is now Phase 1 ready and we are actively exploring partnership opportunities for clinical development of this molecule.
APVO603: APVO603, which targets 4-1BB and OX40 has shown promising preclinical activity with the potential to stimulate robust anti-tumor responses by amplifying the cytotoxic function of activated T cells and NK cells. We continue to move this molecule towards the clinic and are excited about its potential.
Other preclinical candidates: As previously indicated, we plan to announce the selection of another new ADAPTIR candidate later in the year.
Second Quarter 2020 Highlights
- Continued enrollment in a dose escalation Phase 1/1b open-label clinical study of APVO436 in patients with Acute Myeloid Leukemia (AML) and High-Grade Myelodysplastic Syndrome; enrollment in Cohort 6 is complete.
- Announced new preclinical data for ALG.APV-527 at the PEGS Virtual Interactive Global Summit on June 10, 2020 that ALG.APV-527 induces a potent primary anti-tumor response and memory response to 5T4 expressing tumors in preclinical animal studies, but does not induce systemic T-cell activation at high doses which were observed in a urelumab analogue in a side-by-side comparison.
- Recorded $0.5 million of RUXIENCE royalty payments from Pfizer related to first half sales of the product in the U.S. and Japan. We receive a low, single digit royalty on net sales of RUXIENCE in the United States, Japan, and European Union for a term of seven years.
- Collected in full the $0.8 million placed into an escrow account for working capital adjustments, as part of the sale of Aptevo BioTherapeutics to Medexus Pharmaceuticals.
- Received $0.1 million of deferred payments (royalties) from Medexus Pharmaceuticals related to sales of IXINITY for the first quarter of 2020. Royalties are earned at the rate of 2% of net revenue through the earlier of June 2022 or completion of the IXINITY pediatric trial being run by Medexus. After that, the royalty rate will increase to 5%. We expect to receive an estimated royalty of $0.2 million which will be recorded in our third quarter financial statements.
Second Quarter 2020 Financial Results
Cash Position: Aptevo had cash, cash equivalents, and short-term investments as of June 30, 2020 totaling $10.2 million, including restricted cash of $2.5 million. On August 5, 2020 we entered into a Credit and Security Agreement with MidCap Financial Trust, providing us with $25 million of available borrowing capacity. The full amount was drawn down on the closing date, adding approximately $25 million to the Company’s cash balance after transaction fees.
Royalty Revenue: Royalty revenue was $0.5 million for the three months ended June 30, 2020 in connection with a low, single digit royalty we are entitled to receive from Pfizer related to sales of RUXIENCE, a biosimilar to the drug RITUXAN, which was approved by the FDA in July 2019 and launched by Pfizer in the United States and Japan in early 2020. The royalty term runs through the first quarter of 2027, which is the seventh anniversary of the first commercial sale of the CD20 biosimilar. We commenced recognizing royalty revenue related to this agreement with Pfizer and the sales of RUXIENCE in the second quarter of 2020. We note that the $0.5 million recorded is the payment received related to first quarter sales and an estimate for second quarter sales of RUXIENCE. There is no comparable prior period royalty revenue.
RUXIENCE is a trademark of Pfizer; RITUXAN is a trademark of Biogen.
Research and Development Expenses: Research and development expenses decreased by $1.7 million, to $4.4 million for the three months ended June 30, 2020, compared to the $6.1 million for the corresponding period in 2019. Research and development expenses decreased primarily due to a decrease in expenses for APVO436 related to the timing of clinical trial activities impacted by COVID-19, 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 June 30, 2020, general and administrative expenses decreased by $1.5 million, or 35%, to $2.8 million from $4.3 million for June 30, 2019. This decrease was primarily due to reduced personnel and professional services costs.
Other Income (Expense): Other income (expense) consists primarily of gains or losses realized on foreign currency revaluation and interest on debt. Other income increased to approximately zero for the three months ended June 30, 2020 compared to an expense of $0.4 million for the three ended June 30, 2019. 2019 results included interest expense on the previous MidCap debt facility.
Discontinued Operations: Medexus communicated their second quarter 2020 net IXINITY sales to Aptevo in July and expects to make a deferred payment, within 45 days after quarter-end per the LLC Purchase Agreement, to Aptevo of approximately $0.2 million. As such, we will record the deferred payment amount related to Medexus’ second quarter sales of IXINITY as a gain when collected.
IXINITY is trademark of Medexus Pharmaceuticals Inc.
Net Income (Loss): Aptevo’s net loss for the period ended June 30, 2020 was $6.8 million or $2.10 per share, compared to a net loss of $13.3 million or $4.14 per share for the corresponding period in 2019.
Financial Statements Follow
Aptevo Therapeutics Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts, unaudited)
|
|
June 30, 2020 | December 31, 2019 | ||||||
|
ASSETS
|
||||||||
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Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 7,599 | $ | 12,448 | ||||
|
Restricted cash – current
|
1,862 | – | ||||||
|
Royalty receivable
|
288 | – | ||||||
|
Prepaid expenses
|
641 | 1,078 | ||||||
|
Held for sale assets – current
|
– | 16,309 | ||||||
|
Other current assets
|
98 | 160 | ||||||
|
Total current assets
|
10,488 | 29,995 | ||||||
|
Restricted cash – non-current
|
693 | 7,498 | ||||||
|
Property and equipment, net
|
3,320 | 3,946 | ||||||
|
Operating lease right-of-use asset
|
3,251 | 3,747 | ||||||
|
Held for sale assets – non-current
|
– | 7,465 | ||||||
|
Other assets
|
757 | 757 | ||||||
|
Total assets
|
$ | 18,509 | $ | 53,408 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||||||
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Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 4,662 | $ | 6,427 | ||||
|
Accrued compensation
|
1,419 | 2,870 | ||||||
|
Current portion of long-term debt
|
– | 19,863 | ||||||
|
Held for sale liabilities – current
|
– | 8,135 | ||||||
|
Other current liabilities
|
921 | 944 | ||||||
|
Total current liabilities
|
7,002 | 38,239 | ||||||
|
Operating lease liability
|
2,857 | 3,327 | ||||||
|
Total liabilities
|
9,859 | 41,566 | ||||||
|
|
||||||||
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Stockholders’ equity:
|
||||||||
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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 June 30, 2020 and
December 31, 2019, respectively
|
45 | 45 | ||||||
|
Additional paid-in capital
|
180,367 | 179,653 | ||||||
|
Accumulated deficit
|
(171,762 | ) | (167,856 | ) | ||||
|
Total stockholders’ equity
|
8,650 | 11,842 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 18,509 | $ | 53,408 | ||||
Aptevo Therapeutics Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts, unaudited)
|
|
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
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2020 | 2019 | 2020 | 2019 | ||||||||||||
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Royalty revenue
|
473 | – | 473 | – | ||||||||||||
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Operating expenses:
|
||||||||||||||||
|
Research and development
|
(4,440 | ) | (6,125 | ) | (8,446 | ) | (12,759 | ) | ||||||||
|
General and administrative
|
(2,840 | ) | (4,279 | ) | (6,456 | ) | (8,807 | ) | ||||||||
|
Total operating expenses:
|
(7,280 | ) | (10,404 | ) | (14,902 | ) | (21,566 | ) | ||||||||
|
Other income (expense), net
|
4 | (436 | ) | (271 | ) | (1,015 | ) | |||||||||
|
Loss on extinguishment of debt
|
– | – | (2,104 | ) | – | |||||||||||
|
Net loss from continuing operations
|
$ | (6,803 | ) | $ | (10,840 | ) | $ | (16,804 | ) | $ | (22,581 | ) | ||||
|
Discontinued operations:
|
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Income (loss) from discontinued operations
|
$ | – | $ | (2,492 | ) | $ | 12,898 | $ | (2,769 | ) | ||||||
|
Net income (loss)
|
$ | (6,803 | ) | $ | (13,332 | ) | $ | (3,906 | ) | $ | (25,350 | ) | ||||
|
|
||||||||||||||||
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Net loss from continuing operations per share
|
$ | (2.10 | ) | $ | (3.37 | ) | $ | (5.14 | ) | $ | (8.69 | ) | ||||
|
Net income (loss) from discontinued operations per
share
|
$ | – | $ | (0.77 | ) | $ | 3.95 | $ | (1.07 | ) | ||||||
|
Basic and diluted net income (loss) per basic share
|
$ | (2.10 | ) | $ | (4.14 | ) | $ | (1.19 | ) | $ | (9.76 | ) | ||||
|
Weighted-average shares used to compute per share
calculations
|
3,232,811 | 3,221,074 | 3,269,410 | 2,598,552 | ||||||||||||
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 royalty and milestone payments, Aptevo’s ability to successfully sell rights to such payments on terms acceptable to Aptevo, Aptevo’s outlook, financial performance or financial condition, estimated cash burn, Aptevo’s technology and related pipeline, collaboration and partnership opportunities, 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 Inc
Daphne Taylor
Vice President, Finance
206-859-6629
taylord2@apvo.com
SOURCE: Aptevo Therapeutics
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