Molecular Partners reports unaudited half-year results for 2016: A period of continued progress for Molecular Partners

September 1, 2016
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R&D, Partnerships and Team Highlights:

  • Details of Phase II trial of MP0250, a multi-DARPin®* drug candidate targeting vascular endothelial growth factor (VEGF) and hepatocyte growth factor (HGF), in combination with bortezomib (Velcade®) and dexamethasone in patients with multiple myeloma (MM), announced
  • Strategic plan announced to expand proprietary immuno-oncology pipeline by naming the first two development programs
  • Abicipar advances further in phase III trials in wet age related macular degeneration (wet AMD) as planned; Allergan publicly reiterated firm commitment to DARPins, shortly after withdrawal of planned merger with Pfizer
  • Appointment of Jeffrey H. Buchalter to the Board of Directors

Financial Highlights:

  • Ongoing strong financial position with CHF 196.3 million cash balance (including short-term time deposits) as of June 30, 2016, down CHF 19.1 million versus December 31, 2015, and up 12% year-over-year
  • Net cash used from operating activities of CHF 17.5 million, up CHF 8.2 million year-on-year, reflecting ongoing scale-up of R&D activities and the growth of the company’s pipeline
  • Operating loss of CHF 8.5 million and net loss of CHF 9.7 million in the first half 2016
  • Talent base with 102 full-time employees, up 23% year-over-year and an increase of 15% compared to year-end 2015, reflecting our focus shift to clinical development expertise
[*DARPin® is a registered trademark owned by Molecular Partners AG.]

 

Zurich-Schlieren, September 1, 2016. Molecular Partners AG (SIX:MOLN), a clinical-stage biopharmaceutical company that is developing a new class of therapies known as DARPins, today announced its unaudited half-year results for 2016, a period marked by the ongoing scale-of of the company’s R&D activities and operations as well as the continued growth of its proprietary pipeline.

“We are very pleased with the development and further fortification of our broad and novel pipeline, based on our innovative DARPin® technology platform, and the ongoing strength of our financial position,” said Dr. Christian Zahnd, Chief Executive Officer of Molecular Partners. “We look forward to continued success, including attainment of additional clinical milestones, in the second half of 2016 and beyond.”

Business highlights first half-year 2016

Phase II strategy for MP0250 in multiple myeloma announced

In January, the company announced plans for a Phase II trial of MP0250, a multi-DARPin® drug candidate targeting vascular endothelial growth factor (VEGF) and hepatocyte growth factor (HGF), in combination with bortezomib (Velcade®) and dexamethasone in patients with multiple myeloma (MM) who have developed resistance to at least two prior regimens (including bortezomib and an immunomodulatory drug). The Phase II trial is expected to be initiated in the second half of 2016.

The Phase II strategy for MP0250 in MM is largely driven by recent findings that resistance to bortezomib is primarily driven by an upregulation of VEGF and HGF pathways. Thus patients that have an acquired resistance to bortezomib with a combination of MP0250, bortezomib and dexamethasone will be dosed. This is supported by Phase I data that demonstrated good tolerability, favorable pharmacokinetics, and sustained exposure over multiple applications of MP0250 in a preliminary analysis in patients with solid tumors.

Two immuno-oncology development programs revealed

In March, the company announced its strategic plan to expand our immuno-oncology pipeline by naming the first two development programs. The first is for a multi-DARPin® that inhibits the programmed cell death protein 1 (PD-1, a validated immune checkpoint target) and VEGF-A, while also binding to human serum albumin. This tri-functional DARPin® is designed to normalize the tumor vasculature by inhibiting VEGF and increasing tumor-penetration and intra-tumor expansion of effector T-cells. Additionally, the DARPin® binding domain to serum albumin is expected to yield a long half-life and to allow for potentially increased tumor penetration.

The second immuno-oncology program is for the development of a highly specific activator of T-cells in the tumor stroma. It binds to co-stimulatory agonists on the surface of T-cells without activating them when bound in circulation – only once the T-cells enter the tumor microenvironment, the agonist is clustered via the DARPin® having a second specificity for a densely expressed target in the stroma. This selective activation of T-cells is typically not seen for antibodies as they tend to directly cluster agonists through their Fc part and clustering on widespread Fc-receptors.

Abicipar progresses in Phase III trials in wet AMD

Abicipar further advances in Phase III trials in wet age related macular degeneration (wet AMD) as planned. This development was accompanied by a statement from Allergan, the company’s strategic partner in the abicipar development program, reiterating its firm commitment to DARPins and publicly stating that abicipar “continues to progress in clinical development and could be a true game changer for people suffering with this disease by lowering the injection burden significantly.”

Available clinical data suggest that abicipar may enable less frequent injections with equal or better visual outcomes, compared to standard-of-care anti-VEGF therapies. Currently, two large, global Phase III abicipar studies are recruiting patients. Molecular Partners anticipates clinical read-outs from these studies in the summer of 2018.

Allergan is also advancing the other DARPins in our ophthalmology alliance, which includes an earlier-stage multi-DARPin® targeting VEGF and platelet-derived growth factor (PDGF) in wet AMD.

Board of Directors further reinforced

At the Molecular Partners annual general meeting on April 20, 2016, the shareholders of the company elected Jeffrey H. Buchalter, former CEO of Enzon and Ilex Oncology, to the board. Mr. Buchalter has many years of strategic and operational experience, including senior executive positions at Pharmacia, Wyeth, and Schering-Plough. He has deep expertise in commercial positioning and development of therapeutics in oncology and has served as chairman as well as non-executive director of various boards.

Financial Highlights in 1Q 2016: Financial development as expected, ongoing strong position

In the first half of 2016, Molecular Partners recognized 21% higher total revenues of CHF 13.5 million (1H 2015: CHF 11.2 million). As expected, total R&D expenses went up significantly by CHF 6.3 million (+53%) to CHF 18.1 million, mainly due to the increased activities in clinical and preclinical development of the proprietary oncology assets. G&A expenses went up by CHF 0.6 million (+18%) to CHF 3.9 million. Overall, total operating expenses increased by CHF 6.9 million (+46%) to CHF 22.0 million. This led to an operating loss of CHF 8.5 million for the period (1H 2015: operating loss of CHF 3.9million). The company incurred net finance expenses of CHF 1.2 million (1H 2015: net finance expenses of CHF 3.2 million), still mainly the result of negative FX effects on USD and EUR cash positions. This resulted in a net loss of CHF 9.7 million for the first half 2016 (1H 2015: net loss of CHF 7.1 million).

The net cash used from operating activities during the first half 2016 was CHF 17.5 million (1H 2015: net cash used of CHF 9.3 million), an increase of 88% which also reflects the company’s commitment to invest into its proprietary pipeline. Including the time deposits, the cash and cash equivalents position of the company decreased by CHF 19.1 million versus year-end 2015 to CHF 196.3 million as of June 30, 2016 (December 31, 2015: CHF 215.4 million). The total shareholders’ equity position decreased by CHF 10.4 million to CHF 141.4 million as of June 30, 2016 (December 31, 2015: CHF 151.8 million).

On April 14, 2016, the Company announced the successful placement of 1.1 million secondary shares in an accelerated book-building transaction at a price of CHF 27.50 per share. Following the option exercise and transaction, the executive management team holds an increased position of Molecular Partners’ shares compared to the situation before the share placement. As a result of the successful share placement, the number of shares outstanding of the company increased by 5.5% to 20,724,345 per June 30, 2016.

As of June 30, 2016, the company employed 102 FTEs, of whom more than 90% are employed in R&D functions (December 31, 2015: 89 FTEs; June 30, 2015: 83.0 FTEs). In R&D, the number of FTEs grew 23% to 93.4 over the course of the last twelve months (June 30, 2015: 76.1 FTE), underlining the ongoing significant investments into the proprietary pipeline of the company.

Key figures as of June 30, 2016

Key Financials (unaudited)
(CHF million, except per share, FTE data)
1H 2016 1H 2015 change
Total revenues  13.5  11.2  2.3
R&D expenses  -18.1  -11.8  -6.3
G&A expenses  -3.9  -3.3  -0.6
Operating loss  -8.5  -3.9  -4.6
Net loss  -9.7  -7.1  -2.6
Basic net loss per share (in CHF)  -0.48  -0.36  -0.12
Net cash used in operating activities  -17.5  -9.3  -8.2
Cash & cash equivalents as of June 30  176.8  175.6  1.2
Cash balance (incl. time deposits) as of June 30  196.3  175.6  20.7
Total shareholders’ equity as June 30  141.4  143.0  -1.6
Number of total FTE as of June 30  102.4  83.0  19.4
- thereof in R&D  93.4  76.1  17.3
- thereof in G&A  9.0  6.9  2.1

“In the first half-year 2016, Molecular Partners’ financial position continued to develop fully in line with our projections amid the ongoing commitment to invest into value creating proprietary pipeline assets,” said Andreas Emmenegger, Chief Financial Officer of Molecular Partners. “We reiterate our previously provided financial guidance for 2016.”

Business outlook and priorities

For the company’s proprietary oncology pipeline, plans for the second half of 2016 include the initiation of the Phase II trial of MP0250 (in combination with bortezomib and dexamethasone) in patients with MM and initiating a Phase I trial of MP0274, a proprietary, single-pathway DARPin® for the treatment of HER2-positive breast cancer. By providing a broad blockade of HER1, HER2, and HER3-mediated signaling, MP0274 induces apoptosis in HER2-overexpressing cells, with the potential to produce a higher rate of cancer cell death than other approved anti-HER2 targeting molecules, such as Herceptin® (trastuzumab).

The company will also continue to advance the immuno-oncology pipeline, an area in which Molecular Partners has demonstrated the potential utility of targeting immune checkpoint modulators (ICMs) via combination therapy (e.g. joint inhibition of PD-1 and VEGF) or activating agonists while localizing its effects. Molecular Partners sees a lot of potential in ICM-directed therapy to revolutionize anticancer treatment with its unique DARPin® technology. This may also be attractive to potential partners who are active in the immuno-oncology field, though the company may choose to develop these product candidates on a proprietary basis.

In ophthalmology, Molecular Partners will continue to support its strategic partner Allergan in advancing abicipar through Phase III trials in patients with wet AMD, and possibly in initiating Phase III trials of abicipar in patients with DME. Collaboration with Allergan will also continue to advance the anti-VEGF/PDGF multi-DARPin® through preclinical development.

The company will continue to leverage our strategic collaborations by benefiting from its partners’ strong scientific, development, regulatory, and commercial capabilities, while granting them access to Molecular Partners’ biologics expertise and know-how in DARPin® discovery, optimization, and development. The company is also evaluating potential new partnerships based on long-term mutual benefit, particularly in terms of maximizing the value of its product candidates or contributing complementary technologies or capabilities to Molecular Partners.

Additionally, the company will further invest in DARPin® discovery and development to augment its proprietary product pipeline. Capabilities and expertise allow us to quickly identify and progress DARPin® product candidates into clinical development.

By focusing on developing DARPin® product candidates that target validated biological pathways, whether through new combinations or in new therapeutic areas, Molecular Partners can deliver meaningful differentiation from available treatments and increase the probability of success of the company’s development programs.

Financial Outlook 2016

As the first half 2016 developed fully in line with management expectations, Molecular Partners reiterates all elements of the financial outlook 2016 as provided in the company’s 2015 full-year results on February 4, 2016 as well as in the company’s quarterly management statement on April 27, 2016.

For the full year 2016, at constant exchange rates, the company expects total expenses of CHF 50-60 million, of which around CHF 6 million will be non-cash effective costs for share-based payments, IFRS pension accounting and depreciations. However, this may change substantially depending on the progress of the pipeline, mainly driven by the speed of enrollment of patients in clinical trials and data from research and development projects. Additionally, the company expects around CHF 3 million of capital expenditures, mainly for laboratory equipment.

No guidance can be provided with regard to net cash flow projections. Timelines and potential milestone payments for existing and potentially new partnerships cannot be disclosed.

Investor documentation of 1H 2016 results

The 1H 2016 results presentation, the 1H 2016 press release as well as the unaudited Financial Results for 1H 2016 and the company’s 1H 2016 Report and additional information are available on the investors section of the company’ website.

Conference call and audio webcast

Molecular Partners will conduct a conference call and audio webcast of the company’s 1H 2016 results on September 01, 2016, 2:00pm CET (1:00pm GMT, 8:00am EST).
In order to register for the 1H 2016 conference call, please dial the following numbers approximately 10 minutes before the start of the presentation:

Switzerland / Europe                   +41 (0) 58 310 5000

UK                                                    +44 (0) 203 059 5862

USA                                                  +1 (1) 631 570 5613

Participants will have the opportunity to ask questions after the presentation.

The 1H 16 audio webcast will be accessible, both live and as a replay, on the Investors section of the company’s website www.molecularpartners.com, along with the accompanying presentation slides.

Financial Calendar 2016

Publication of Quarterly Management Statement Q3 2016 October 27, 2016
Publication of Full-year Results 2016 (unaudited) February 09, 2017
Expected Publication of Annual Report 2016 March 29, 2017
Annual General Meeting May 11, 2017

About Molecular Partners AG

Molecular Partners AG is a clinical-stage biopharmaceutical company that is developing a new, 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 offer 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. 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 AG, go to: www.molecularpartners.com.

For further details, please contact:

Dr. Christian Zahnd, CEO
christian.zahnd@molecularpartners.com
Tel: +41 (0) 44 755 77 00

Andreas Emmenegger, CFO
andreas.emmenegger@molecularpartners.com
Tel: +41 (0) 44 755 77 00

Rolf Schläpfer
Hirzel.Neef.Schmid.Counselors
rolf.schlaepfer@konsulenten.ch
Tel: +41 (0) 43 344 42 42

S.A. Noon
Susan A. Noonan Communications, LLC
susan@sanoonan.com
Tel: +1 212 966 3650

Disclaimer

This communication does not constitute an offer or invitation to subscribe for or purchase any securities of Molecular Partners AG. This publication may contain certain forward-looking statements and assessments or intentions concerning the Company and its business. Such statements involve certain risks, uncertainties and other factors which could cause the actual results, financial condition, performance or achievements of the Company to be materially different from those expressed or implied by such statements. Readers should therefore not place reliance on these statements, particularly not in connection with any contract or investment decision. The Company disclaims any obligation to update these forward-looking statements, assessments or intentions.