HALF-YEAR STATEMENT 2015
Successful first semester as a listed company for Molecular Partners AG – Abicipar, the first product in phase III clinical trials
R&D, Partnership and Team Highlights:
- Pivotal phase III trials for abicipar were initiated by partner Allergan in wet
age-related macular degeneration (AMD) at the end of Q2 2015
- Phase III start of abicipar fully in line with the original time-line despite
Actavis Allergan merger, triggering a USD 15 million milestone fee
- Phase II clinical trial for abicipar in diabetic macular edema (DME) is ongoing
- Allergan commits to the DARPin research alliance by making an accelerated
milestone payment of USD 35 million
- Phase I interim data of lead oncology asset MP0250 expected for Q4 2015,
further reinforcing the company’s focus on its proprietary pipeline in oncology
- Successful recruitment of Dr. Andreas Harstrick, Chief Medical Officer – a key
hire for the company
- CHF 176 million in cash and cash equivalents at 30 June 2015 – will be further
reinforced through collections of already announced milestone payments
- Cash-wise the company collected CHF 2.7 million from its strategic partners
Allergan, Roche and Janssen in 1H 2015
- Up to CHF 1.9 billion combined milestone potential and up to double-digit
future royalties on net sales from all partnerships
- Net operating loss of CHF 3.9 million and net loss of CHF 7.1 million, in line
with projections and guidance
- Debt-free balance sheet maintained
- 83 Full-time equivalents at 30 June 2015, up 13% over twelve months
Zurich-Schlieren, September 02, 2015. Molecular Partners AG (ticker symbol: MOLN) announced today its results for the first half-year 2015 which proved to be a successful and dynamic semester for Molecular Partners from multiple perspectives: significant advancement of the pipeline, important strengthening of the team, clarity and stability obtained in the key strategic partnership with Allergan as well as further reinforcement of the company’ s strong financial position.
Molecular Partners CEO Christian Zahnd summarizes: “Our achievements during the first six months of 2015 put us in a very robust position within the biotech sector. I am especially pleased about the substantial progress we made in our pipeline and that we were able to further expand our team of highly motivated people on both, employee and executive management level.”
Start of two phase III studies for abicipar by Allergan and broad commitment to DARPins
The company’s strategic partner Allergan has initiated two pivotal registration trials (phase III trials) with abicipar at the end of the first semester 2015, Molecular Partners’ most advanced DARPin candidate. The phase III study program will evaluate the safety and efficacy of abicipar and its potential to improve vision gains whilst reducing the number of treatment injections versus ranibizumab (Lucentis®), addressing two significant unmet medical needs for patients with wet AMD. This event triggered a clinical milestone pay‐ ment of USD 15 million to Molecular Partners and marked a true ‘milestone’ in the devel‐ opment of Molecular Partners: the first product from the promising DARPin technology platform has entered the phase III development stage.
Molecular Partners COO Patrick Amstutz comments: “We would like to thank everyone who contributed to the program, internally and externally, for supporting us in reaching this important milestone fully in line with the envisaged timeline. Moreover, abicipar continues to be investigated for the treatment of diabetic macular edema (DME) in an ongoing phase II clinical trial.”
Further, on July 21, 2015, after the closing of the first semester 2015, Allergan reinforced its broad commitment to the DARPin collaboration. This collaboration includes the discovery, research and development of multiple DARPinâ€based products in ophthalmology. In connection with its strengthened commitment to the DARPin research and discovery alliance, Allergan agreed to make accelerated milestone payments of USD 35 million.
This collaboration includes a multi-VEGF/PDGF DARPin currently in preclinical development and several additional discovery programs.
Proprietary pipeline: Further advancement, key focus on MP0250 in 2H 2015
In the core of management’s focus remains the advancement of the company’s fully-owned, proprietary pipeline in oncology. Molecular Partners sees the potential of the DARPin platform to create meaningful anti-cancer therapies by using the multi-DARPin approach to address synergistically multiple pathways, potentially leading to higher efficacy, lower toxicities while still allowing for the potential combination with other therapies.
Molecular Partners is advancing a growing proprietary pipeline of DARPin therapies. MP0250 is the most advanced systemic DARPin which entered clinical phase I studies in July 2014 in solid tumors. MP0250 is the first biologic to target both vascular endothelial growth factor (VEGF) and hepatocyte growth factor (HGF), two key pathways involved in modulation of the tumor microenvironment, tumor cell growth and metastasis formation. MP0250 prevents VEGF and HGF from binding to their receptors, thereby blocking tumor growth and tumor spreading. In addition, MP0250 binds to serum albumin modulating the pharmacokinetic profile of the molecule and potentially supporting tumor uptake. Phase I interim data of this lead oncology asset is expected for Q4 2015, in line with the original guidance.
The company is further building a broad pipeline in oncology, including MP0274, a multi-DARPin with broad anti-HER activity, blocking HER2 and HER3-mediated signaling. Preclinical research suggests MP0274 induces tumor cell apoptosis (programmed cell death) and efficiently blocks tumor cell proliferation. MP0274 is currently in preclinical development. The Molecular Partner management team continues to be excited about the companyâ€™s proprietary immuno-oncology pipeline. This could present a game-changing approach for multi-DARPins by potentially unlocking the complex signaling network of different regulators of the immune system (immune checkpoints).
Molecular Partners has established its DARPin technology as a robust source for new product candidates. The highly efficient processes to identify mono-DARPins and the efficient and modular approach to generate multi-DARPins have become a key strength of Molecular Partners. This “DARPin toolbox” drives the very efficient discovery and development of new product candidates.
Partnerships: Allergan reinforces partnership with commitment to discovery alliance
The company continues to collaborate with leading pharma companies to expand the reach of what Molecular Partners can do with the DARPin platform. Through these alliances the company expects to develop breakthrough therapies for patients beyond its own capabilities. In addition to the alliance with Allergan, the company is collaborating with Janssen Biotech for a multi-DARPin program in immunology. Within this alliance, Janssen is focusing on one program after the evaluation of DARPins against several targets thought to be important for the treatment of inflammatory and autoimmune diseases.
Under the existing partnership agreements, Molecular Partners has the potential to earn up to CHF 1.9 billion in additional milestone payments, as well as up to double‐digit tiered royalties on future global net product sales of each partnered program. Moreover, since inception of the company until today, the company’s partnerships have provided Molecu‐ lar Partners with CHF 215 million in non‐equity funding via upfront and milestone pay‐ ments as well as FTE payments and cost‐recharges. This number includes the already an‐ nounced USD 50 million (CHF 48 million) milestone fees which were collected in July and August 2015.
The company had entered into an oncology alliance with Roche in December 2013 focusing on the use of DARPins in combination with a bacterial toxin, for which Roche owns proprietary knowledge. Molecular Partners delivered highly differentiated DARPins in a short time. When Roche decided to move away from exploring bacterial toxins, this affected several antibody programs and also the programs developed under the company’s alliance with Roche, even though the decision was completely unrelated to DARPins. While Roche was interested to shift the scope of the agreement to other areas in oncology, Molecular Partners did not support the scope shift to avoid potential competition on the internal oncology pipeline. Consequently, the parties agreed to discontinue the collaboration.
Molecular Partners’ financial development for the first six months of 2015 was in line with management’s expectations and the guidance provided to the capital markets. CFO Andreas Emmenegger summarizes the first half-year 2015: “Our ongoing strong financial position gives us the strategic flexibility to maximize the commercial potential of our proprietary DARPin product candidates by either developing them on our own or selectively entering into new partnerships to unlock the full potential of DARPins.”
Per June 30, 2015 the company had a cash position of CHF 176 million and continued to be debt free. Moreover, Molecular Partners has already collected the announced USD 50Â million milestone fees from Allergan in 2H 2015 (USD 15 million for the start of phase 3 for abicipar as well as USD 35 million for Allergan’s commitment to the broader alliance). “We are very confident to close the full year 2015 again with a positive net cash flow. This is a remarkable achievement for a biotech company in our stage of development and gives us additional cash to invest in our fully-owned DARPin programs,” Andreas Emmenegger concludes.
Key figures 1H 2015
(CHF million, except per share, FTE data)
|1H 2015||1H 2014||change|
|Operating profit (loss)||-3.9||1.5||-5.4|
|Net profit (loss)||-7.1||1.5||-8.6|
|Basic net profit (loss) per share (in CHF)||-0.36||1.03||-1.39|
|Net cash from (used in) operating activities||-9.3||3.1||-12.4|
|Net increase (decrease) in cash & cash equiv.||-12.8||2.9||-15.7|
|Cash & cash equivalents at June 30||175.6||99.0||76.6|
|Total shareholders’ equity||143.0||50.3||92.7|
|Number of total FTE||83.0||73.2||9.8|
|- thereof in R&D||76.1||66.4||9.7|
|- thereof in G&A||6.9||6.8||0.1|
Income statement: In line with management expectations and guidance
In 1H 2015, the company recognized total revenues of CHF 11.2 million, 18% less than in the comparable period of the previous year (1H 2014: CHF 13.2 million). CHF 7.6 million of total revenues was with Allergan, CHF 2.8 million with Roche and CHF 0.8 million with Janssen. CHF 7.0 million of total revenues are revenues from technology access and transfer (recognized income from discovery alliances with Allergan, Roche and Janssen), CHF 4.1 million are revenues from R&D collaborations (deferred revenue recognitions from up-front payments as well as FTE payments) and CHF 0.1 million are other revenues (cost recharges).
As per June 30, 2015, the company had CHF 43.3 million deferred revenues on the balance sheet, which is expected to be recognized as revenues as follows: CHF 13.3 million in 2H 2015, CHF 13.5 million in 2016, CHF 6.0 million in 2017, CHF 6.0 million in 2018 and CHF 4.5 million in 2019.
Overall, total operating expenses increased by CHF 3.4 million (+23%) to CHF 15.1 million (1H 2014: CHF 11.7 million). These costs included CHF 2.4 million non-cash effective share-based compensation and pension costs. The two major expense categories were personnel expenses of CHF 9.1 million (60% of total operating expenses) and research consumables and costs of CHF 2.9 million (19% of total operating expenses). The management team expects operating expenses to increase substantially, particularly as the company continues the development of its proprietary product candidates, expand the proprietary product pipeline, and invest in the DARPin technology. Furthermore, the management team expects to incur additional costs associated with operating as a public company, hiring additional personnel and, potentially, expanding the facilities.
As per June 30, 2015 the company had 83 FTE’s on its payroll, thereof 76.1 or 92% in R&D and 6.9 FTE’s or 8% in G&A (December 31, 2014: 74.1 total FTE’s; June 30, 2014: 73.2 total FTE’s).
In 1H 2015, the company generated an operating loss of CHF 3.9 million (1H 2014: operating profit of CHF 1.5 million). The decline compared to the first half 2014 is in line with expectations of the management team and is a result of reduced accounting revenues and increased R&D activities for the benefit of the long term value creation.
In 1H 2015, Molecular partners incurred a net financial expense of CHF 3.2 million (1H 2014: net financial income of CHF 0.02 million). This was mainly driven by unrealized foreign exchange losses of CHF 1.8 million and CHF 1.4 million on the cash balances held in USD and in EUR, respectively.
In 1H 2015, the company incurred a net loss of CHF 7.1 million (1H 2014: net profit of CHF 1.5 million). The reduction compared to the previous year is mainly a result of reduced revenues, increased R&D activities and unrealized foreign exchange losses on the cash balances held in USD and EUR.
Balance sheet and capital resources: Strong position maintained in 2015
Total assets increased by CHF 91.2 million from CHF 102.3 million (June 30, 2014) to CHF 193.5 million (June 30, 2015) which is mainly a result of the cash proceeds from the IPO in November 2014. Compared to year-end 2014 (CHF 194.0 million), total assets remained virtually unchanged.
As a result of the IPO total shareholders’ equity also increased to CHF 143.0 million (June 30, 2014: CHF 50.3 million). Compared to year end 2014 total shareholder’s equity slightly decreased (Dec. 31, 2014: CHF 148.5 million). The company continues to be debt free.
Cash flow statement: Strong cash position of CHF 175.6 million per June 30, 2015,
pre Allergan milestones collected in 2H 2015
In 1H 2015, Molecular Partners incurred a negative net cash flow from operations of CHF 9.3 million, while in 1H 2014 the company had generated a positive net cash flow from operations of CHF 3.1 million due to larger collections from partners in 1H 2014. Cash outflow from investing activities went up to CHF 0.4 million (1H 2014: CHF 0.1 million) mainly due to increased capital expenditures for laboratory equipment. Net cash from financing activities remained virtually unchanged at CHF 0.1 million (1H 2014: zero). Overall, this produced a net cash reduction of CHF 12.8 million in 1H 2015 (1H 2014: net cash increase of CHF 2.9 million), resulting in a cash and equivalents position of CHF 175.6 million as per June 30, 2015.
Molecular Partners was pleased to announce in March the appointment of Dr. Andreas Harstrick as the company’s Chief Medical Officer (CMO) and member of the Executive Management Team. Andreas is supporting the continued transformation of the company into a product development organization. He is overseeing the company’s clinical development activities and has already started to successfully expand the clinical development team. Andreas brings 28 years of experience in successfully developing antibody therapies in oncology from early stage to approval, including Erbitux (cetuximab targeting EGFR) and Cyramza (ramucirumab targeting VEGFR2). Further, several times in his career Andreas has built clinical oncology teams from scratch.
In March, the management team announced that Christian Zahnd, CEO, would undergo a medical treatment and thus the daily operations would be temporarily taken over by Patrick Amstutz, COO, and Jorn Aldag, the Chairman of the Board. Christian Zahnd stayed closely involved in all strategic discussions and decisions, and in August the company announced that Christian Zahnd returned to his full responsibilities. The close collaboration amongst the senior team and the seamless transition leading to a successful coverage of this period further showcased the breadth and capabilities of the leadership team.
Business outlook and priorities
In ophthalmology, the Molecular Partners team will remain focused on supporting its partner Allergan to progress abicipar through Phase III trials to commercial launch and to leverage the platform by advancing the earlier stage pipeline, including the multi-DARPin VEGF/PDGF.
Molecular Partners aims to complete Phase I development of MP0250 in oncology. Interim data of the ongoing Phase I study have been submitted to AACR/EORTC conference, which will take place first week in November. Since this is a Phase I dose escalation study and the study is still ongoing, availability of final data will depend on the number of dose escalation steps. The company’s management team also remains committed to progress MP0274 from preclinical to clinical development in 2016.
Molecular Partners’ immuno-oncology pipeline remains a key priority for the company. The management team remains committed to expand the internal capabilities and developing a portfolio of proprietary product candidates in this field as it continues to believe the DARPin platform holds the key for important therapies in this category.
Molecular Partners is investing in further development of its proprietary DARPin candidates, continuing its commitments in R&D to grow and develop its rich pipeline targeting high value indications, as well as financing in-licensing or acquisition of complementary businesses and technologies.
Finally, the company will continue to strengthen its internal team of experts.
Financial Outlook 2015
For the full year 2015, at constant exchange rates, the Molecular Partners management continues to expect a gross cash burn of CHF 35-40 million and approximately CHF 3 million for capital expenditures. However, this may change substantially depending on the progress of the pipeline, mainly driven by the speed of enrolment of patients in clinical trials and data in research and development projects. In addition the company will incur non-cash effective costs for share-based payments as well as for pensions accounted for in accordance with IAS 19.
Given the USD 50 million milestone fees that the company has already collected from Allergan in 2H 2015 (USD 15 million for start of phase 3 for abicipar as well as USD 35 million for VEGF/PDGF DARPin and research alliance) the management team is confident to close the full-year 2015 again with a positive net cash flow.
Going forward, Molecular Partners will publish its financial results on a quarterly basis. The first release will be 3Q 2015 results which will be published on 29 October 2015.
Financial Calendar 2015/2016
|Publication of Q3 Results 2015||29 October 2015|
|Publication of Full-year Results 2015||04 February 2016|
|Annual General Meeting of Molecular Partners AG||20 April 2016|
The Half-year 2015 Report and additional information is available on
Audio webcast of the results presentation at 2:00pm CET, 02 September 2015
The audio webcast will be accessible, both live and as a replay, along with the
accompanying presentation slides on investors.molecularpartners.com.
About Molecular Partners AG
Molecular Partners is a public, clinicalâ€stage, biopharmaceutical company listed on the SIX Swiss Exchange (ticker symbol: MOLN) that is developing a new powerful class of therapies known as DARPins. DARPins are potent, specific and versatile small protein therapies which have the potential to offer benefits over conventional monoclonal antibodies or other currently available protein therapeutics. The DARPin technology has the potential to enable a multi-specific approach to treatment which enables DARPins to target multiple pathways, or multiple epitopes on a single target to achieve substantial patient benefit. DARPins have the potential to advance modern medicine and significantly improve the treatment of serious diseases, including cancer and sight-threatening disorders.
Molecular Partners has four compounds in various stages of clinical and preclinical development and several more in the research stage, with a current focus on ophthalmology and oncology. Its most advanced product candidate is abicipar. The company has ongoing research and development partnerships with leading pharmaceutical companies including Allergan and Janssen and is backed by established biotech investors.
For more information regarding Molecular Partners, go to: www.molecularpartners.com.
For further details please contact:
Dr. Christian Zahnd, CEO
Dr. Patrick Amstutz, COO
Tel: +41 (0) 44 755 77 00
Tel: +41 (0) 43 344 42 42
Tel: +44 (0) 208 877 8400
This announcement is not an offer to sell, or a solicitation of an offer to purchase, any securities of Molecular Partners AG (the “Company”), nor shall it or any part of it form the basis of, or be relied on in connection with any contract or investment decision. This announcement is not for publication or distribution (directly or indirectly) in or to the United States, Canada, Australia, Japan or any other jurisdiction in which such distribution would be unlawful.
This announcement contains statements that are, or may be deemed to be, forward-looking statements. In some case, these forward-looking statements can be identified by the use of forward-looking terminology or subjective assessments, including the words “potential”, “expects”, “targets”, “designed”, “intends” or “plans”or comparable terminology or by discussions of plans, objectives, targets, goals, future events or intentions. These forward-looking statements include matters that are not historical facts or which may not otherwise be provable by reference to past events, and are based on assumptions. By their nature, forward-looking statements are subject to known and unknown risks and uncertainties because they relate to events and/or depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these statements and forecasts. Past performance of the Company cannot be relied on as a guide to future performance.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. Neither the Company nor any other person undertakes any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.