MALVERN, Pa., Feb. 26, 2015 (GLOBE NEWSWIRE) -- TetraLogic Pharmaceuticals Corporation (Nasdaq:TLOG), a clinical-stage biopharmaceutical company focused on discovering and developing novel small molecule therapeutics in oncology and infectious diseases, today announced financial results for the year ended December 31, 2014. These results are included in TetraLogic's Annual Report on Form 10-K which has been filed with the Securities and Exchange Commission.
"The TetraLogic team achieved several significant milestones in 2014," said J. Kevin Buchi, President and Chief Executive Officer of TetraLogic. "We advanced birinapant into two randomized Phase 2 trials; we also acquired a second asset, SHAPE, and commenced a randomized Phase 2 trial with that molecule as well."
Summary of Key Development Programs, Updates and Anticipated Milestones
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Birinapant HBV Program: Based upon preclinical assays in which birinapant-treated mice demonstrated clearance of hepatitis B surface antigen (HBsAg) and the formation of antibodies to HBsAg, we have commenced enrollment in a multiple ascending dose clinical trial of birinapant in subjects with chronic hepatitis B. The trial is being conducted in subjects over the age of 18 with hepatitis B who are receiving treatment with either tenofovir or entecavir and who are HBsAg positive. The trial is expected to enroll approximately 6 cohorts of 8 subjects each, who will receive 4 weekly treatments with either birinapant or placebo in a 3:1 ratio. The study is being conducted at multiple clinical sites in Australia. Although predominantly a safety and tolerability study, patients are being monitored for reductions in HBsAg and the formation of antibodies to HBsAg, as indications of therapeutic activity.
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Birinapant MDS Program: In May 2014, we announced that, based upon data from our Phase 1b study of birinapant in combination with azacitidine in patients with higher risk MDS who are either relapsed/refractory or naïve to azacitidine, we initiated a randomized Phase 2 clinical trial in first line higher risk MDS patients. While the primary objective of the Phase 1b clinical study was to characterize the safety and tolerability and determine the recommended Phase 2 dose of birinapant when administered in combination with azacitidine, we did observe bone marrow responses in a number of patients who had relapsed or were refractory to azacitidine.
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SHAPE CTCL Program: In April 2014, we acquired Shape Pharmaceuticals, Inc. In May 2014, safety and efficacy data from the Phase 1b randomized placebo controlled clinical study of SHAPE, our topical HDAC inhibitor, in Stage IA –IIA Cutaneous T-cell Lymphoma (CTCL) were presented at the annual Society of Investigative Dermatology meeting and at American Society of Clinical Oncology meeting. In December 2014, we commenced a randomized Phase 2 clinical trial of SHAPE in early stage CTCL.
- Birinapant/conatumumab Program: We are continuing enrollment in a Phase 1/2 study of birinapant in combination with conatumumab, Amgen's TRAIL agonist antibody, in 3rd line ovarian cancer. In December 2014 this clinical trial proceeded into a Phase 2a expansion based upon data in the Phase 1 portion of the trial.
We expect data from all studies to be available in 2015, making this an important year for TetraLogic.
Full Year 2014 Financial Highlights
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Cash, cash equivalents, and marketable securities totaled $53.7 million at December 31, 2014, as compared to $55.1 million at December 31, 2013.
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Research and Development expenses were $19.4 million in 2014, excluding $0.9 million in non-cash, stock based compensation expense, compared to $8.6 million in 2013, excluding $0.9 million in non-cash, stock based compensation expense. The increase primarily results from additional costs associated with clinical trials, including the manufacturing and formulation of our clinical drug supplies.
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General and Administrative expenses were $8.5 million in 2014, excluding $2.5 million in non-cash, stock based compensation expense, compared to $5.6 million in 2013, excluding $2.8 million in non-cash, stock based compensation expense.
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Adjusted net loss for 2014 was $29.7 million, compared to an adjusted net loss of $17.0 million in 2013. Adjusted net loss excludes (i) non-cash stock based compensation expense; (ii) non-cash interest expense; (iii) non-cash fair value adjustments to the company's derivative liabilities; and (iv) non-cash fair value adjustments to the contingent consideration liability recognized as part of the Shape acquisition in April 2014.
- Shares issued and outstanding as of December 31, 2014 were 22.3 million, not including outstanding stock options to purchase 3.3 million shares and 7.0 million shares underlying the company's outstanding convertible notes.
Non-GAAP Financial Measures
In the attached press release, the Company discloses "Adjusted net loss," "Basic adjusted net loss per common share," and "Diluted adjusted net loss per common share" for certain historical periods, all of which are considered "non-GAAP financial measures" under Securities and Exchange Commission rules. A "non-GAAP financial measure" is defined as a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes (or includes) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts, that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements. Management does not intend the presentation of non-GAAP financial measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP.
For all periods presented, the Company reconciles net loss on a GAAP basis to adjusted net loss. Management believes that the presentation of these adjusted measures is useful to investors because it provides a means of evaluating the Company's operating performance and results from period to period on a comparable basis not otherwise apparent on a GAAP basis, since many non-cash, infrequent, or unusual charges, including items that may not affect the Company's operations, do not meet the strict GAAP definition of unusual non-recurring items. Furthermore, in preparing operating plans, budgets and forecasts, and in assessing historical performance, management relies, in part, on trends in the Company's historical results, exclusive of these items. Finally, management believes that this presentation is useful in facilitating comparisons between the Company and other companies in its industry, many of whom exclude similar items.
About TetraLogic Pharmaceuticals Corporation
TetraLogic is a clinical-stage biopharmaceutical company focused on discovering and developing novel small molecule therapeutics in oncology and infectious diseases. TetraLogic has two clinical-stage product candidates in development: birinapant and SHAPE. Birinapant is currently being tested in Phase 1 and Phase 2 clinical trials for hematological malignancies and solid tumors, and is also being tested in a Phase 1b/2a clinical trial in hepatitis B. SHAPE is currently being tested in a Phase 2 clinical trial for early-stage cutaneous T‑cell lymphoma.
Forward Looking Statements
Some of the statements in this release are forward looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements relate to future events or TetraLogic's pre-clinical and clinical development of birinapant, SHAPE and other clinical programs, future expectations, plans and prospects. Although TetraLogic believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. TetraLogic has attempted to identify forward looking statements by terminology including ''believes,'' ''estimates,'' ''anticipates,'' ''expects,'' ''plans,'' ''projects,'' ''intends,'' ''potential,'' ''may,'' ''could,'' ''might,'' ''will,'' ''should,'' ''approximately'' or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors, including those discussed under the heading "Risk Factors" in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on February 26, 2015. Any forward-looking statements contained in this release speak only as of its date. We undertake no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after its date or to reflect the occurrence of unanticipated events.
| TetraLogic Pharmaceuticals Corporation | ||||
| Consolidated Statements of Operations and Comprehensive Loss | ||||
| Three months ended December 31, | Year ended December 31, | |||
| 2013 | 2014 | 2013 | 2014 | |
| Revenues | $ – | $ – | $ – | $ – |
| Expenses: | ||||
| General and administrative | 4,320,175 | 2,790,042 | 8,467,467 | 10,926,777 |
| Research and development | 3,084,486 | 6,331,707 | 9,523,427 | 20,286,826 |
| Change in fair value of contingent consideration | – | 670,000 | – | 2,572,000 |
| Total expenses | 7,404,661 | 9,791,749 | 17,990,894 | 33,785,603 |
| Loss from operations | (7,404,661) | (9,791,749) | (17,990,894) | (33,785,603) |
| Change in fair value of derivative liabilities | 2,142,118 | (564,183) | 807,291 | 1,073,198 |
| Interest and other income | 564 | 40,244 | 629 | 112,815 |
| Interest expense | (1,392,044) | (1,624,668) | (2,767,422) | (3,359,389) |
| Net loss | $ (6,654,023) | $ (11,940,356) | $ (19,950,396) | $ (35,958,979) |
| Cumulative preferred stock dividends | (684,240) | – | (3,249,948) | – |
| Net loss attributable to common stockholders | $ (7,338,263) | $ (11,940,356) | $ (23,200,344) | $ (35,958,979) |
| Per share information: | ||||
| Net loss per common share: | ||||
| Basic | $ (1.38) | $ (0.53) | $ (10.11) | $ (1.61) |
| Diluted | $ (1.38) | $ (0.53) | $ (10.11) | $ (1.63) |
| Weighted average shares outstanding: | ||||
| Basic | 5,314,148 | 22,319,258 | 2,295,636 | 22,290,069 |
| Diluted | 5,314,148 | 22,319,258 | 2,295,636 | 22,351,689 |
| Net loss | $ (6,654,023) | $ (11,940,356) | $ (19,950,396) | $ (35,958,979) |
| Foreign currency gains/(losses) | -- | (30,027) | -- | (69,031) |
| Unrealized gains/(losses) on available-for-sale securities | -- | (7,748) | -- | (8,117) |
| Comprehensive loss | $ (6,654,023) | $ (11,978,131) | $ (19,950,396) | $ (36,036,127) |
| TetraLogic Pharmaceuticals Corporation | ||||||||
| Reconciliation of GAAP Net Loss to Adjusted Net Loss | ||||||||
| In accordance with Regulation G of the Securities and Exchange Commission, the table set forth below reconciles certain financial measures used in this press release that are not calculated in accordance with generally accepted accounting principles, or GAAP, with the most directly comparable financial measure calculated in accordance with GAAP. | ||||||||
| Three months ended December 31, | Year ended December 31, | |||||||
| 2013 | 2014 | 2013 | 2014 | |||||
| Net loss attributable to common stockholders - GAAP | $ (7,338,263) | $ (11,940,356) | $ (23,200,344) | $ (35,958,979) | ||||
| General and administrative adjustments | 2,446,662 | (1) | 654,864 | (1) | 2,821,584 | (1) | 2,450,986 | (1) |
| Research and development adjustments | 714,659 | (1) | 243,459 | (1) | 886,808 | (1) | 933,814 | (1) |
| Change in fair value of contingent consideration | -- | 1,330,000 | (2) | -- | 2,572,000 | (2) | ||
| Change in fair value of derivative liabilities | (2,142,118) | (3) | 564,183 | (3) | (807,291) | (3) | (1,073,198) | (3) |
| Interest expense | -- | 684,668 | (4) | -- | 1,395,833 | (4) | ||
| Cumulative preferred stock dividends | 684,240 | (5) | -- | 3,249,948 | (5) | -- | ||
| 1,703,443 | 3,477,174 | 6,151,049 | 6,279,435 | |||||
| Adjusted net loss | $ (5,634,820) | $ (8,463,182) | $ (17,049,295) | $ (29,679,544) | ||||
| Per share information: | ||||||||
| Adjusted net loss per common share: | ||||||||
| Basic | $ (1.06) | $ (0.38) | $ (7.43) | $ (1.33) | ||||
| Diluted | $ (1.06) | $ (0.38) | $ (7.43) | $ (1.35) | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 5,314,148 | 22,319,258 | 2,295,636 | 22,290,069 | ||||
| Diluted | 5,314,148 | 22,319,258 | 2,295,636 | 22,351,689 | ||||
| Notes to Reconciliation of GAAP Net Loss to Adjusted Net Loss | ||||||||
| (1) To exclude non-cash charges for stock compensation expense. | ||||||||
| (2) In 2014, to exclude the change in fair value of contingent consideration related to the acquisition of Shape Pharmaceuticals, Inc. | ||||||||
| (3) To exclude the change in fair value of our warrant liabilities and, in 2014, the change in fair value of the interest make-whole derivative related to our 8% Convertible Notes. | ||||||||
| (4) In 2014, to exclude the amortization of debt discount and the amortization of deferred financing costs related to our 8% Convertible Notes. | ||||||||
| (5) In 2013, to exclude cumulative dividends on our series C and C-1 convertible preferred stock. | ||||||||
| TetraLogic Pharmaceuticals Corporation | ||
| Consolidated Balance Sheets | ||
| December 31, |
December 31, |
|
| 2013 | 2014 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 55,135,508 | $ 13,073,137 |
| Short-term investments | — | 40,624,349 |
| Deferred financing costs, short-term | — | 375,808 |
| Prepaid expenses and other current assets | 153,210 | 1,784,069 |
| Restricted cash | 20,000 | — |
| Total current assets | 55,308,718 | 55,857,363 |
| Property and equipment, net | 139,577 | 528,476 |
| Intangible assets | — | 41,575,516 |
| Goodwill | — | 16,902,466 |
| Deferred financing costs, long-term | — | 1,299,674 |
| Other assets | 54,126 | 2,127,551 |
| Total assets | $ 55,502,421 | $ 118,291,046 |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 1,215,198 | $ 1,138,470 |
| Accrued expenses | 2,921,458 | 3,727,784 |
| Derivative liabilities | 793,744 | 256,027 |
| Total current liabilities | 4,930,400 | 5,122,281 |
| Convertible notes payable, net of discount of $18,020,658 | — | 28,979,342 |
| Derivative liabilities | — | 2,400,000 |
| Deferred taxes | — | 16,879,659 |
| Contingent consideration and other liabilities | 22,968 | 31,507,588 |
| Total liabilities | 4,953,368 | 84,888,870 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Preferred stock, $0.0001 par value; 25,000,000 shares authorized, none issued and outstanding | — | — |
| Common stock, $0.0001 par value; 100,000,000 shares authorized, 22,199,256 and 22,307,138 shares issued and outstanding at December 31, 2013 and September 30, 2014, respectively | 2,220 | 2,234 |
| Additional paid-in capital | 140,419,071 | 159,308,307 |
| Cumulative unrealized loss on investments | — | (8,117) |
| Cumulative translation adjustment | — | (69,031) |
| Accumulated deficit | (89,872,238) | (125,831,217) |
| Total stockholders' equity | 50,549,053 | 33,402,176 |
| Total liabilities and stockholders' equity | $ 55,502,421 | $ 118,291,046 |