[August 08, 2017] |
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Concert Pharmaceuticals Reports Second Quarter 2017 Financial Results and Provides Company Update
Concert
Pharmaceuticals, Inc. (NASDAQ: CNCE) today reported financial
results for the second quarter of 2017.
"We are very pleased that we have closed the CTP-656 asset purchase
agreement with Vertex (News - Alert), which resulted in a payment to Concert of $160
million in July. We believe our transaction with Vertex provides the
optimal pathway to rapidly advance the development of CTP-656 for the
benefit of cystic fibrosis patients," said Roger Tung, Ph.D., President
and Chief Executive Officer of Concert Pharmaceuticals, Inc. "The Vertex
transaction significantly extends our cash runway and we expect the
proceeds will allow us to advance CTP-543 into pivotal testing as well
as broaden our proprietary development pipeline. We are excited about
Concert's prospects, with our near-term focus on rapidly advancing
CTP-543 through the Phase 2a trial for the treatment of alopecia areata.
We are also assessing the potential to address additional autoimmune
indications with CTP-543."
Recent Business Highlights and Upcoming Milestones
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CTP-656 Asset Purchase Agreement with Vertex. In July
2017, the U.S. Federal Trade Commission (FTC (News - Alert)) terminated the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(HSR Act) which represented the final regulatory closing condition
required to complete the asset purchase agreement under which Vertex
Pharmaceuticals, Inc. (NASDAQ: VRTX) agreed to acquire CTP-656 and
other assets related to the treatment of cystic fibrosis. On May 24,
2017, Concert shareholders approved the authorization of the CTP-656
asset purchase agreement. As a result, in July 2017 the companies
closed the transaction and Vertex paid $160 million in cash for
worldwide development and commercialization rights to CTP-656.
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CTP-543 Phase 2 for Alopecia Areata. In July 2017 the
U.S. Food and Drug Administration (FDA) lifted the clinical hold on
Concert's CTP-543 Phase 2a clinical trial for alopecia areata. Concert
has resumed enrollment in a modified Phase 2a trial and expects to
complete the trial in the second half of 2018.
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Alopecia Areata Patient-Focused Drug Development Initiative. On
September 11, 2017, the FDA will host a patient-focused meeting for
alopecia areata as part of its Patient-Focused Drug Development
Initiative. These meetings, which are open to the public, are intended
to take into account the current state of drug development, specific
interests of the FDA review division, and needs of the patient
population. Additional information is available on the FDA's website
at: https://www.fda.gov/forindustry/userfees/prescriptiondruguserfee/ucm347317.htm.
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PGR Petition Against Incyte. In June 2017, Concert filed
a Post Grant Review (PGR) petition with the Patent Trial and Appeal
Board (PTAB) of the U.S. Patent and Trademark Office against Incyte
Corporation. The PGR petition challenges the validity of all claims in
Incyte's U.S. Patent No. 9,662,335, which includes claims relating to
deuterated ruxolitinib analogs. The Company expects the PTAB will make
a decision whether to institute a review in the first quarter of 2018.
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Venture Debt Financing. In June 2017, Concert secured
$30 million in venture debt from Hercules Capital, Inc. The Company
intends to pay off the loan in September 2017 which will enable a 50
percent reduction in the end of term charge and waiver of the
prepayment penalty.
Second Quarter 2017 Financial Results
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Cash and Investment Position. Cash, cash equivalents and
investments as of June 30, 2017, totaled $103.4 million as compared to
$83.9 million as of March 31, 2017. The increase was driven by a $30
million term loan facility entered into on June 8, 2017 with Hercules.
In July 2017, upon the closing of the Asset Purchase Agreement, Vertex
paid to the Company $160 million in cash, with $16 million to
initially be held in escrow for a period of 18 months. Including
proceeds from the CTP-656 asset purchase agreement, the Company
believes pro forma cash will be sufficient to fund the Company into
2021.
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Revenues. Revenue was $15,000 for the quarter ended June 30,
2017, compared to $71,000 for the corresponding quarter in
2016. Revenue recognized in 2017 and 2016 is comprised of services
performed by Concert in connection with its strategic collaborations
with Celgene Corporation and Jazz Pharmaceuticals.
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R&D Expenses. Research and development expenses were $7.3
million for the quarter ended June 30, 2017, compared to $9.8 million
for the same period in 2016, a decrease of $2.5 million. The decrease
was primarily due to the timing to initiate the CTP-543 Phase 2a trial
in 2017 as well as scale-up manufacturing expenses in 2016 to support
the CTP-656 and CTP-543 Phase 2 trials.
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G&A Expenses. General and administrative expenses were $5.7
million for the quarter ended June 30, 2017, compared to $3.8 million
for the same period in 2016, an increase of $1.9 million. The increase
in general and administrative expenses was primarily related to
professional fees in connection with the CTP-656 asset purchase
agreement and intellectual property matters related to CTP-543.
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Net Loss. For the quarter ended June 30, 2017, net loss was
$13.0 million, or $0.58 per share, as compared to a net loss of $13.4
million, or $0.60 per share for the quarter ended June 30, 2016.
Conference Call and Webcast
The Company will host a conference call and webcast today at 8:30 a.m.
EDT to provide an update on the company and discuss second quarter
financial results. To access the conference call, please dial (855)
354-1855 (U.S. and Canada) or (484) 365-2865 (International) five
minutes prior to the start time.
A live webcast of Concert's presentation may be accessed in the Investors
section of the Company's website at www.concertpharma.com.
Please log on to the Concert website approximately 15 minutes prior to
the scheduled webcast to ensure adequate time for any software downloads
that may be required. A replay of the webcast will be available on
Concert's website for three months.
- Financial Tables to Follow -
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Concert Pharmaceuticals, Inc.
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Condensed Consolidated Statements of Operations
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(in thousands, except per share amounts)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2017
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2016
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2017
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2016
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Revenue:
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License and research and development revenue
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$
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15
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$
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71
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$
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35
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$
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127
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Total revenue
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15
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71
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35
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127
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Operating expenses:
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Research and development
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7,285
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9,816
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15,522
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20,269
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General and administrative
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5,707
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3,828
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10,960
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7,405
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Total operating expenses
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12,992
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13,644
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26,482
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27,674
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Loss from operations
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(12,977
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)
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(13,573
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)
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(26,447
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)
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(27,547
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)
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Interest and other income (expense), net
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(50
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)
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132
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87
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226
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Net loss
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(13,027
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)
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(13,441
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)
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(26,360
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)
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(27,321
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)
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Net loss per share applicable to common stockholders - basic and
diluted
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$
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(0.58
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)
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$
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(0.60
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)
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$
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(1.17
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)
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$
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(1.23
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)
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Weighted-average number of common shares used in net loss per share
applicable to common stockholders - basic and diluted
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22,579
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22,217
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22,479
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22,208
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Concert Pharmaceuticals, Inc.
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Summary Balance Sheet Data
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(in thousands)
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June 30, 2017
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December 31, 2016
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Cash and cash equivalents
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$
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27,591
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$
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40,555
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Investments, available for sale
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75,829
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55,630
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Working capital
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100,152
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92,159
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Total assets
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108,622
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100,395
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Deferred revenue
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10,025
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10,050
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Loan payable, net of discount
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29,188
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-
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Total stockholders' equity
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$
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64,381
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$
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85,594
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About Concert
Concert
Pharmaceuticals is a clinical stage biopharmaceutical company
focused on applying its DCE
Platform® (deuterated chemical entity platform) to create novel
medicines designed to address unmet patient needs. The Company's
approach starts with approved drugs in which deuterium substitution has
the potential to enhance clinical safety, tolerability or efficacy.
Concert has a broad
pipeline of innovative medicines targeting autoimmune and
inflammatory diseases and central nervous systems (CNS) disorders. For
more information please visit www.concertpharma.com.
Cautionary Note on Forward Looking Statements
Any statements in this press release about our future expectations,
plans and prospects, including statements about our expectations for
clinical development of CTP-543, the sufficiency of our cash, cash
equivalents and investments to fund our operations and other statements
containing the words "anticipate," "believe," "continue," "could,"
"estimate," "expect," "intend," "may," "plan," "potential," "predict,"
"project," "should," "target," "would," and similar expressions,
constitute forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995. Actual results may differ
materially from those indicated by such forward-looking statements as a
result of various important factors, including: the uncertainties
inherent in the initiation of future clinical trials, whether
preliminary results from a clinical trial will be predictive of the
final results of that trial or whether results of early clinical trials
will be indicative of the results of later clinical trials, expectations
for regulatory approvals, availability of funding sufficient for our
foreseeable and unforeseeable operating expenses and capital expenditure
requirements and other factors discussed in the "Risk Factors" section
of our most recent Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission and in other filings that we make
with the Securities and Exchange Commission. In addition, any
forward-looking statements included in this press release represent our
views only as of the date of this release and should not be relied upon
as representing our views as of any subsequent date. We specifically
disclaim any obligation to update any forward-looking statements
included in this press release.
Concert Pharmaceuticals Inc., the CoNCERT Pharmaceuticals Inc. logo and
DCE Platform are registered trademarks of Concert Pharmaceuticals, Inc.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170808005152/en/
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