Aviragen Therapeutics, Inc. (NASDAQ:AVIR) today announced its
financial results for the fourth quarter and 2016 fiscal year ended
June 30, 2016, and also provided an update on recent corporate and
clinical developments.
“Over the last twelve months we have made significant advances
with our three next generation direct-acting antivirals that
address serious infections with limited therapeutic options.
Enrollment is 90% complete in the SPIRITUS Phase 2b trial of
vapendavir for the treatment of human rhinovirus infections in
moderate and severe asthmatic patients, and we look forward to
announcing top-line data from the trial around the end of the year.
We also announced today comparable bioavailability results for two
new formulations of vapendavir that are appropriate for pediatrics,
Phase 3 and commercial scale-up,” remarked Joseph M. Patti, PhD,
President and Chief Executive Officer of Aviragen Therapeutics.
“For our RSV program, we were pleased to resume enrollment in
the Phase 2a RSV challenge study of BTA585, a RSV fusion inhibitor,
following a short delay. We anticipate that top-line viral load
data will be available around the end of the year. Finally, we
strengthened our balance sheet with $20 million of non-dilutive
cash from the partial monetization of our Inavir® royalty stream.
This positions us well to aggressively advance our pipeline of
clinical-stage antivirals.”
Recent Corporate Highlights
Vapendavir Phase 1 Bioavailability Trial. The
Company reported today that it has successfully completed a
single-center, open-label, bioavailability study in healthy
volunteers assessing the comparability of the vapendavir phosphate
salt capsule, and two new formulations of vapendavir free base in
the forms of an oral suspension and tablet. Forty-six (46)
subjects completed three periods of oral dosing and the plasma
pharmacokinetic results indicated that the bioavailability of the
oral suspension and tablet formulation were comparable to the
capsule form of vapendavir which is currently being used in the
Phase 2b SPIRITUS trial. The oral suspension formulation is
intended to enable the conduct of future pediatric trials, and the
tablet formulation will allow an increase in manufacturing scale
appropriate for Phase 3 trials and commercial development.
Resumed Enrollment in the Phase 2a Efficacy Study of
BTA585 for the Treatment of Respiratory Syncytial Virus (RSV)
Infections. In July 2016, the Company reported that,
subsequent to receiving approval from the U.K. Medicines and
Healthcare Products Regulatory Agency (MHRA), enrollment has
resumed in the double-blind, placebo-controlled, Phase 2a trial
that is designed to evaluate the safety, pharmacokinetics, and
antiviral activity of orally-dosed BTA585 in healthy volunteers
challenged intranasally with RSV. In May, the Company announced
that it was voluntarily delaying enrollment in the trial to
investigate an aberrant lab result from a subject that was coupled
with transient ECG changes. The Company also reported in July that
it expects to submit a complete response to the U.S. Food and Drug
Administration (FDA) in the first quarter of calendar 2017
regarding the clinical hold of BTA585’s investigational new drug
(IND) application. The clinical hold was related to the aberrant
lab report.
Entered into a License and Sponsored Research Agreement
with Georgia State University Research
Foundation (GSURF). In July 2016, the Company
announced that it entered into an exclusive, worldwide license and
sponsored research agreement with GSURF to jointly develop and
commercialize RSV replication inhibitors discovered by
Professor Richard Plemper and his team in
the Institute for Biomedical Sciences (IBMS)
at Georgia State University.
Financial Results for the Three Month Period Ended June
30, 2016
The Company reported net loss of $7.0 million for the three
month period ended June 30, 2016, as compared to a net loss of
$19.9 million in the same quarter of the prior fiscal year. Basic
and diluted net loss per share was $0.18 for the three month period
ended June 30, 2016, as compared to a basic and diluted net loss
per share of $0.55 in the same period of 2015. The major components
of net loss in both periods are as follows:
Revenue decreased to $0.6 million for the three month
period ended June 30, 2016 from $4.1 million in the same period in
2015 due to a $3.7 million reduction in royalty revenues resulting
from lower government stockpiling sales of the flu product
Relenza®.
Research and development expense increased to $6.0 million for
the three month period ended June 30, 2016 from $5.2 million in the
same period in 2015. The increase reflected higher clinical costs
related to the initiation of a Phase 2a challenge trial
investigating the use of BTA585 as a treatment for RSV, and higher
expenses for producing clinical supplies of BTA074 for its Phase 2
clinical trial for the treatment of condyloma caused by human
papillomavirus (HPV) types 6 and 11.
In June 2015, the Company recorded a $17.6
million non-recurring, in-process research and development
(IPR&D) expense in connection with the acquisition of Anaconda
Pharma. There was no IPR&D expense recorded in 2016.
General and administrative expense was $1.3 million for both the
three month period ended June 30, 2016 and the same period in 2015,
as higher consulting and professional fees were fully offset by
lower employee compensation costs.
Accounting Treatment for the Sale of Royalty Interest to
HealthCare Royalty Partners (HCRP):
In April 2016, Aviragen sold a portion of its
interest in future royalty payments related to Inavir®, a flu
product marketed in Japan by Daiichi Sankyo, to HCRP
for gross proceeds of $20 million. As a result of a limit on
the amount of royalties that HCRP can earn under the
arrangement, U.S. accounting rules require Aviragen to
account for this transaction under the debt accounting method.
Aviragen has no obligation to pay any amounts to HCRP other than to
pass through to HCRP its share of royalties as they are received
from Daiichi Sankyo. In addition, although the royalty payments
were sold to HCRP, the debt accounting rules require the Company to
continue to recognize HCRP’s share of the royalties as non-cash
revenue in its Statement of Operations and to record the proceeds
of $20 million, net of expenses, as a liability on its Balance
Sheet. As royalties are passed through Aviragen to HCRP under this
arrangement, the liability is reduced. Non-cash implied interest
expense will be recognized on the liability. In the fourth quarter
of 2016, Aviragen recognized $0.2 million of
non-cash royalty revenue and $0.3 million in non-cash interest
expense related to this arrangement.
The Company held $69.0 million in cash, cash equivalents, and
short-term investments as of June 30, 2016.
Financial Results for the Fiscal Year
Ended June 30, 2016
The Company reported a net loss of $25.4
million for its fiscal year ended June 30, 2016, as
compared to a net loss of $19.1 million in the prior
year. The $6.3 million increase in net loss from the
prior year was primarily due to a $15.5 million decrease
in revenues reflecting a reduction of $7.0 million in royalty
revenue, principally related to Relenza®, and $8.5 million in lower
service revenue, due to the cancellation of the BARDA contract in
2014. The net loss comparison was also impacted by a $6.5
million increase in research and development expense, largely
related to higher costs for the Company's vapendavir and BTA585
clinical development programs. These items were partially offset by
the impact of a non-recurring $17.6 million IPR&D expense
recorded in fiscal 2015 related to the acquisition of Anaconda
Pharma. Basic and diluted net loss per share
was $0.66 for the fiscal year ended June 30, 2016,
as compared to a basic and diluted net loss per share
of $0.54 in the prior year.
Conference Call and Webcast
Information
Aviragen Therapeutics will host a conference
call today to review these fourth quarter and fiscal year 2016
financial results, as well as provide a general update on the
Company, via a webcast and conference call at 4:30 p.m. ET. To
access the conference call, please dial (877) 312-5422 (domestic)
or (253) 237-1122 (international) and refer to conference ID number
74878442. A live audio webcast of the call and the archived webcast
will be available in the Investors section of the Company’s website
at http://www.aviragentherapeutics.com.
About Aviragen Therapeutics
Aviragen Therapeutics is focused on the
discovery and development of the next generation of direct-acting
antivirals to treat infections that have limited therapeutic
options and affect a significant number of patients globally. The
Company has three product candidates in active clinical
development: These include vapendavir, an oral treatment for human
rhinovirus (HRV) upper respiratory infections in moderate-to-severe
asthmatics currently being evaluated in the Phase 2b SPIRITUS
trial; BTA585, an oral fusion protein inhibitor that has received
Fast Track designation by the U.S. FDA, in Phase 2 development for
the treatment and prevention of respiratory syncytial virus (RSV)
infections; and BTA074, a topical antiviral treatment in Phase 2
development for condyloma caused by human papillomavirus types 6
& 11. For additional information about the Company, please
visit www.aviragentherapeutics.com.
Forward-Looking StatementsThis press release
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that involve known
and unknown risks and uncertainties concerning Aviragen
Therapeutics’ business, operations and financial performance. Any
statements that are not of historical facts may be deemed to be
forward-looking statements, including the timing of top-line data
readouts on our Phase 2 HRV and RSV programs and the timing of
submitting a complete response to the FDA. Various important
factors could cause actual results, performance, events or
achievements to materially differ from those expressed or implied
by forward-looking statements, including: the Company, the U.S.
Food and Drug Administration (FDA) or a similar regulatory body in
another country, a data safety monitoring board, or an
institutional review board delaying, limiting, suspending or
terminating the clinical development of any of the Company's
product candidates at any time for a lack of safety, tolerability,
regulatory or manufacturing issues, or any other reason whatsoever;
the Company's ability to secure, manage and retain qualified
third-party clinical research, data management and contract
manufacturing organizations upon which it relies to assist in the
design, development, implementation and execution of the clinical
development of all its product candidates and those organizations’
ability to successfully execute their contracted responsibilities;
the Company’s ability to comply with applicable government
regulations in various countries and regions in which we are
conducting, or expect to conduct, clinical trials; and other
cautionary statements contained elsewhere in this press release and
in our Annual Report on Form 10-K and our other reports filed with
the Securities and Exchange Commission. There may be events in the
future that the Company is unable to predict, or over which it has
no control, and the Company’s business, financial condition,
results of operations and prospects may change in the future. The
Company may not update these forward-looking statements more
frequently than quarterly unless it has an obligation under U.S.
Federal securities laws to do so.
|
AVIRAGEN THERAPEUTICS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in millions, except per share amounts) |
|
|
June 30, 2016 |
|
June 30, 2015 |
|
(audited) |
|
(audited) |
ASSETS |
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
49.7 |
|
|
$ |
44.7 |
|
Short-term
investments |
|
19.3 |
|
|
|
12.9 |
|
Accounts
receivable, net of allowance |
|
0.7 |
|
|
|
12.6 |
|
Prepaid and
other current assets |
|
2.7 |
|
|
|
0.6 |
|
Total
current assets |
|
72.4 |
|
|
|
70.8 |
|
Non-current assets: |
|
|
|
Long-term
investments |
|
- |
|
|
|
7.9 |
|
Property and
equipment, net |
|
0.3 |
|
|
|
0.2 |
|
Deferred tax
asset |
|
- |
|
|
|
0.5 |
|
Total
non-current assets |
|
0.3 |
|
|
|
8.6 |
|
Total
assets |
$ |
72.7 |
|
|
$ |
79.4 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
Current liabilities: |
|
|
|
Accounts
payable |
$ |
3.9 |
|
|
$ |
1.9 |
|
Accrued
expenses |
|
3.6 |
|
|
|
5.4 |
|
Short term
note payable |
|
0.4 |
|
|
|
0.2 |
|
Contract
payables (BARDA) |
|
- |
|
|
|
1.0 |
|
Liabilities
related to sale of future royalties, net of deferred financing
costs |
|
1.3 |
|
|
|
- |
|
Deferred tax
liability |
|
- |
|
|
|
0.5 |
|
Total
current liabilities |
|
9.2 |
|
|
|
9.0 |
|
Non-current
liabilities: |
|
|
|
Long term
note payable, net of current portion |
|
0.3 |
|
|
|
0.8 |
|
Liabilities
related to sale of future royalties, net of deferred financing
costs and current portion |
|
16.8 |
|
|
|
- |
|
Other
long-term liabilities, net of current portion |
|
0.2 |
|
|
|
0.1 |
|
Total
liabilities |
|
26.5 |
|
|
|
9.9 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Preferred
stock, $0.10 par value; 5,000,000 shares authorized and none issued
and outstanding as of June 30, 2016 and 2015 |
|
- |
|
|
|
- |
|
Common
stock, $0.10 par value; 200,000,000 shares authorized 38,640,487
and 38,609,086 shares issued and outstanding at June 30, 2016 and
June 30, 2015, respectively |
|
3.9 |
|
|
|
3.9 |
|
Additional
paid-in capital |
|
157.6 |
|
|
|
155.6 |
|
Accumulated
other comprehensive income |
|
19.0 |
|
|
|
18.9 |
|
Accumulated
deficit |
|
(134.3 |
) |
|
|
(108.9 |
) |
Total
stockholders’ equity |
|
46.2 |
|
|
|
69.5 |
|
Total
liabilities and stockholders’ equity |
$ |
72.7 |
|
|
$ |
79.4 |
|
|
|
|
|
|
|
|
|
|
AVIRAGEN THERAPEUTICS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in millions, except per share amounts) |
(unaudited) |
|
|
Three Months Ended June 30, |
|
Fiscal Year Ended June 30, |
|
|
2016 |
|
|
2015 |
|
|
|
2016 |
|
|
2015 |
|
Revenue: |
|
|
|
|
|
Royalty
revenue and milestones |
$ |
0.4 |
|
$ |
4.1 |
|
|
$ |
9.1 |
|
$ |
16.1 |
|
Non-cash
royalty revenue related to sale of future royalties |
|
0.2 |
|
|
- |
|
|
|
0.2 |
|
|
- |
|
Revenue from
services |
|
- |
|
|
- |
|
|
|
- |
|
|
8.5 |
|
Total revenue |
|
0.6 |
|
|
4.1 |
|
|
|
9.3 |
|
|
24.6 |
|
|
|
|
|
|
|
Operating expense: |
|
|
|
|
|
Cost of
revenue |
|
- |
|
|
- |
|
|
|
- |
|
|
3.6 |
|
Research and
development |
|
6.0 |
|
|
5.2 |
|
|
|
26.3 |
|
|
19.8 |
|
In-process
research and development (IPR&D) |
|
- |
|
|
17.6 |
|
|
|
- |
|
|
17.6 |
|
General and
administrative |
|
1.2 |
|
|
1.3 |
|
|
|
8.0 |
|
|
9.4 |
|
Foreign
exchange loss (gain) |
|
0.1 |
|
|
- |
|
|
|
0.2 |
|
|
(6.5 |
) |
Loss on
disposal of assets |
|
- |
|
|
- |
|
|
|
- |
|
|
0.2 |
|
Total operating
expense |
|
7.3 |
|
|
24.1 |
|
|
|
34.5 |
|
|
44.1 |
|
Loss from operations |
|
(6.7 |
) |
|
(20.0 |
) |
|
|
(25.2 |
) |
|
(19.5 |
) |
|
|
|
|
|
|
Non-operating income: |
|
|
|
|
|
Non-cash
interest expense on liability related to sale of future royalties
|
|
(0.3 |
) |
|
- |
|
|
|
(0.3 |
) |
|
- |
|
Interest
income (expense), net |
|
- |
|
|
0.1 |
|
|
|
0.1 |
|
|
0.3 |
|
Total non-operating income
(expense) |
|
(0.3 |
) |
|
0.1 |
|
|
|
(0.2 |
) |
|
0.3 |
|
|
|
|
|
|
|
Loss before tax |
|
(7.0 |
) |
|
(19.9 |
) |
|
|
(25.4 |
) |
|
(19.2 |
) |
Income tax benefit |
|
- |
|
|
- |
|
|
|
- |
|
|
0.1 |
|
Net loss |
$ |
(7.0 |
) |
$ |
(19.9 |
) |
|
$ |
(25.4 |
) |
$ |
(19.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share |
$ |
(0.18 |
) |
$ |
(0.55 |
) |
|
$ |
(0.66 |
) |
$ |
(0.54 |
) |
Diluted loss per
share |
$ |
(0.18 |
) |
$ |
(0.55 |
) |
|
$ |
(0.66 |
) |
$ |
(0.54 |
) |
|
|
|
|
|
|
Basic weighted-average
shares outstanding |
|
38,640,487 |
|
|
36,143,337 |
|
|
|
38,635,452 |
|
|
35,360,841 |
|
Diluted weighted-average
shares outstanding |
|
38,640,487 |
|
|
36,143,337 |
|
|
|
38,635,452 |
|
|
35,360,841 |
|
|
|
|
|
|
|
Contacts:
Mark Colonnese
Executive Vice President and Chief Financial Officer
Aviragen Therapeutics, Inc.
(678) 221-3381
mcolonnese@aviragentherapeutics.com
Beth DelGiacco
Stern Investor Relations, Inc.
(212) 362-1200
beth@sternir.com
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