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TetraLogic Reports Second Quarter Financial Results and Provides Clinical Programs Update

20:00 EDT 4 Aug 2015 | Globe Newswire

MALVERN, Pa., Aug. 5, 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 second quarter ended June 30, 2015. These results are included in TetraLogic's Quarterly Report on Form 10-Q which has been filed with the Securities and Exchange Commission.

Summary of Key Development Programs, Updates and Anticipated Milestones

  • Birinapant MDS Program: In June 2015, we announced encouraging preliminary data from the ongoing Phase 2A study of birinapant in combination with azacitidine in first line higher risk myelodysplastic syndromes (MDS). Enrollment continues in our randomized Phase 2 clinical trial in first line higher risk MDS patients and we expect interim data around the end of 2015.
  • SHAPE CTCL Program: Enrollment continues in our randomized Phase 2 clinical trial of SHAPE, a topical HDAC inhibitor, in early stage Cutaneous T-cell Lymphoma. We expect data around the end of 2015.
  • Birinapant/KEYTRUDA® Program: In April 2015, TetraLogic and Merck announced that the companies would collaborate on a Phase 1 study to evaluate the safety and efficacy of birinapant in combination with KEYTRUDA® (pembrolizumab), Merck's anti-PD-1 therapy, in patients with relapsed or refractory solid tumors.  The study is expected to begin in late 2015.
  • Birinapant HBV Program: As a follow-on to our discontinued multiple ascending dose study, in July 2015, we announced that we intend to re-initiate a program in HBV and conduct a combination single ascending dose/multiple ascending dose clinical trial, with birinapant as a single agent, in chronic HBV subjects. We currently expect to initiate this trial at multiple sites in India in early 2016.   Timing of results will depend upon enrollment rates and upon the cohort in which activity, if any, is seen.

Second Quarter 2015 Financial Highlights

  • Cash, cash equivalents, and marketable securities totaled $34.8 million at June 30, 2015, as compared to $53.7 million at December 31, 2014.
  • Research and Development expenses were $7.4 million for the second quarter of 2015, excluding $0.3 million in non-cash, stock based compensation expense, compared to $4.6 million for the same period in 2014, excluding $0.3 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.
  • General and Administrative expenses were $1.9 million for the second quarter of 2015, excluding $0.9 million in non-cash, stock based compensation expense, compared to $2.4 million for the same period in 2014, excluding $0.6 million in non-cash, stock based compensation expense. 
  • Adjusted net loss for the second quarter of 2015 was $10.2 million, compared to an adjusted net loss of $7.1 million for the same period in 2014. 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 June 30, 2015 were 23.3 million, not including outstanding stock options to purchase 4.0 million shares and 6.5 million shares underlying the Company's outstanding convertible notes.

Non-GAAP Financial Measures

In the attached press release, the Company discloses "Adjusted net loss," and "Basic 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 evaluated for the treatment of solid and liquid tumors and certain intracellular pathogens.   SHAPE is being evaluated for the treatment of 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 and in our Form 10-Q filed with the SEC on August 5, 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
(Unaudited)
         
  Three months ended June 30, Six months ended June 30,
  2014 2015 2014 2015
         
Revenues  $ –  $ –  $ –  $ –
         
Expenses:         
General and administrative   3,004,912  2,883,682  5,513,197  6,019,531
Research and development   4,864,189  7,709,798  7,986,938  14,155,991
Change in fair value of contingent consideration  918,000  1,081,000  918,000  2,129,000
Total expenses   8,787,101  11,674,480  14,418,135  22,304,522
         
Loss from operations   (8,787,101)  (11,674,480)  (14,418,135)  (22,304,522)
         
Change in fair value of derivative liabilities  (447,141)  1,352,557  (162,120)  1,642,223
Debt exchange expense  –  –  –  (818,541)
Interest and other income   19,250  21,946  31,196  61,140
Interest expense   (139,446)  (1,573,070)  (139,446)  (3,136,329)
Net loss  $ (9,354,438)  $ (11,873,047)  $ (14,688,505)  $ (24,556,029)
         
Per share information:        
 Net loss per common share:        
 Basic  $ (0.42)  $ (0.51)  $ (0.66)  $ (1.06)
 Diluted  $ (0.42)  $ (0.51)  $ (0.67)  $ (1.07)
         
 Weighted average shares outstanding:        
 Basic  22,286,581  23,332,096  22,266,556  23,074,550
 Diluted  22,350,657  23,370,335  22,333,382  23,116,253
         
Net loss  $ (9,354,438)  $ (11,873,047)  $ (14,688,505)  $ (24,556,029)
Foreign currency gains/(losses)  2,622  11,266  2,622  32,782
Unrealized gains/(losses) on available-for-sale securities  (1,688)  (3,430)  (2,004)  5,849
Comprehensive loss  $ (9,353,504)  $ (11,865,211)  $ (14,687,887)  $ (24,517,398)
   
TetraLogic Pharmaceuticals Corporation  
Reconciliation of GAAP Net Loss to Adjusted Net Loss  
(Unaudited)  
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 June 30, Six months ended June 30,
  2014  2015 2014  2015        
                 
Net loss - GAAP  $ (9,354,438)    $(11,873,047)    $(14,688,505)    $(24,556,029)  
                 
General and administrative adjustments  603,150  (1)   945,732  (1)   1,178,357  (1)   2,096,885  (1) 
Research and development adjustments  225,303  (1)   347,281  (1)   463,775  (1)   816,959  (1) 
Change in fair value of contingent consideration  918,000  (2)   1,081,000  (2)   918,000  (2)   2,129,000  (2) 
Change in fair value of derivative liabilities  447,141  (3)   (1,352,557)  (3)   162,120  (3)   (1,642,223)  (3) 
Interest expense   57,035  (4)   698,070  (4)   57,035  (4)   1,397,884  (4) 
Debt exchange expense  --     --   (5)   --     818,541  (5) 
   2,250,629    1,719,526    2,779,287    5,617,046  
                 
Adjusted net loss  $ (7,103,809)    $(10,153,521)    $(11,909,218)    $(18,938,983)  
                 
Per share information:                
Adjusted net loss per common share:                
Basic and Diluted  $ (0.32)    $ (0.44)    $ (0.53)    $ (0.82)  
                 
Weighted average shares outstanding:                
Basic and Diluted  22,286,581    23,332,096    22,266,556    23,074,550  
                 
                 
Notes to Reconciliation of GAAP Net Loss to Adjusted Net Loss  
                 
 (1) To exclude non-cash charges for stock compensation expense. 
 (2) 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 the change in fair value of the interest make-whole derivative related to our '8% Convertible Notes. 
 (4) To exclude the amortization of debt discount and the amortization of deferred financing costs related to our 8% Convertible Notes. 
 (5) In 2015, to exclude debt exchange expense as such exchanges are non-recurring in nature. 
 
 
TetraLogic Pharmaceuticals Corporation
Consolidated Balance Sheets
     
  December 31, June 30,
  2014 2015
Assets    (unaudited)
Current assets:     
Cash and cash equivalents   $ 13,073,137  $ 12,438,166
Short-term investments   40,624,349  22,347,224
Deferred financing costs, short-term  375,808  346,458
Prepaid expenses and other current assets   1,784,069  2,091,442
Total current assets   55,857,363  37,223,290
Property and equipment, net   528,476  487,496
Intangible assets  41,575,516  41,575,516
Goodwill  16,902,466  16,902,466
Deferred financing costs, long-term  1,299,674  1,039,374
Other assets   2,127,551  1,814,102
Total assets   $ 118,291,046  $ 99,042,244
     
Liabilities and stockholders' equity     
Current liabilities:     
Accounts payable   $ 1,138,470  $ 1,794,531
Accrued expenses   3,727,784  3,811,905
Derivative liabilities  256,027  97,847
Total current liabilities   5,122,281  5,704,283
 Convertible notes payable, net of discount  28,979,342  28,166,751
 Derivative liabilities  2,400,000  750,000
 Deferred taxes  16,879,659  16,879,659
Contingent consideration and other liabilities   31,507,588  33,633,054
Total liabilities   84,888,870  85,133,747
     
Commitments and contingencies    
Stockholders' equity:     
Common stock, $0.0001 par value; 100,000,000 shares authorized, 22,334,901 and 23,332,825 shares issued and outstanding at December 31, 2014 and June 30, 2015, respectively  2,234  2,333
Additional paid-in capital   159,308,307  164,331,927
Cumulative unrealized gain (loss) on investments  (8,117)  (2,268)
Cumulative translation adjustment  (69,031)  (36,249)
Accumulated deficit   (125,831,217)  (150,387,246)
Total stockholders' equity   33,402,176  13,908,497
Total liabilities and stockholders' equity  $ 118,291,046  $ 99,042,244
CONTACT: Pete A. Meyers
         Chief Financial Officer and Treasurer
         TetraLogic Pharmaceuticals Corporation
         (610) 889-9900, x103
         pete.meyers@tlog.com

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