JERUSALEM, March 13, 2020 /PRNewswire/ -- Intec Pharma Ltd.
(NASDAQ: NTEC) ("Intec" or "the Company") today announces financial
results for the fourth quarter and year ended December 31, 2019 and provides a corporate
update.
Highlights from the Quarter and Recent Weeks
- Developed an Accordion Pill (AP) for a Merck & Co. (MSD)
proprietary compound that met the in vitro specifications
set forth in the companies' research collaboration and are now in
discussions with MSD to determine advancing the program into human
pharmacokinetic (PK) studies;
- Concluded the Feasibility and Option Agreement (FOA) with
Novartis Pharmaceuticals, under which Intec Pharma built a
custom-designed AP for a Novartis proprietary compound that met the
technical and PK clinical specifications set forth but following an
internal and revised commercial strategic assessment, Novartis
determined not to take the program forward;
- Novartis agreed to pay Intec Pharma $1.5
million upon conclusion of the program FOA and those funds
were transferred to the Company in February
2020;
- Completed the qualifying production runs for the commercial
scale manufacturing of AP Carbidopa/Levodopa (AP-CD/LD) with our
manufacturing partner, LTS Lohmann Therapie-Systeme AG (LTS);
- Secured $10 million in committed
financing from Aspire Capital, a long-term institutional investor;
and
- Enhanced the balance sheet with a $6.5
million public offering.
Management Commentary
"We entered 2020 with a focused agenda for leveraging our
Accordion Pill platform in both the near- and long-term, with goals
to outlicence our late-stage Parkinson's disease program, to
advance our research collaboration with Merck into human PK
studies, to move our cannabinoid program into a second PK study and
to expand our pipeline by adding new partnered programs, such as
the one we have with Merck. Our team is diligently working
toward executing these objectives and we look forward to
achieving a number of these in the coming months," said
Jeffrey A. Meckler, Vice Chairman
and Chief Executive Officer of Intec.
"In tandem with these initiatives, we continue to work with our
manufacturing partner, LTS, to advance the commercial scale
production of AP-CD/LD, confident that having these critical
processes in place enhances our business development efforts. We
are pleased to report that LTS has completed the qualification
studies for the commercial scale production and have initiated the
validation and stability studies of the batches which are expected
to serve as the clinical material for the next Phase 3 clinical
trial plan. This is particularly beneficial for our partnering
discussions for the Parkinson's disease program.
"In addition to advances with commercial manufacturing, we
continue to engage in dialogues with potential new partners. Toward
that end, our business development and technical operations teams
are actively participating in a number of key drug delivery
conferences worldwide in the coming months. We expect the
enhanced visibility for the AP and its capabilities to increase the
interest in the platform among audiences seeking new technologies
and improved delivery formulations.
"Importantly, we strengthened our balance sheet believing that a
stronger financial position enhances our ability to negotiate with
partners and provides us with a longer runway to achieve key
objectives. We believe our cash will now take us into the
second quarter of 2021, without tapping into our Aspire
commitment," added Mr. Meckler.
Financial Highlights for the Fourth Quarter
Ended December 31, 2019
Research and development expenses, net, for the three-month
period ended December 31, 2019 were
approximately $1.8 million, a decrease of $8.5 million,
or approximately 82.5%, compared with approximately $10.3
million in the three-month period ended December 31,
2018. The decrease was primarily due to a decrease in expenses
related to the ACCORDANCE Phase 3 study of AP-CD/LD and the Open
Label Extension study, both of which were completed during 2019 and
a decrease in expenses related to the scale up activities for the
commercial scale production capabilities for AP-CD/LD at LTS.
General and administrative expenses for the three-month period
ended December 31, 2019 were approximately $1.8
million, a decrease of $300,000, or approximately 14.3%,
compared with approximately $2.1 million in the
three-month period ended December 31, 2018. The decrease was
primarily due to a decrease in professional services and expenses
related to investor relations activities. This decrease was offset
by an increase in insurance expenses.
Impairment of long-lived assets was recorded as the top-line
results of the ACCORDANCE trial were considered a triggering event
for impairment. For the three-month period ended December 31,
2019, the Company recorded an impairment charge of
approximately $3.9 million. This
impairment represents the excess carrying value of the long-lived
assets compared to its fair value.
The Company recorded other income for the three-month period
ended December 31, 2019, of
$1.5 million on conclusion of the
program with Novartis.
Net loss for the three-month period ended December 31,
2019 was approximately $6.6 million, a decrease
of $6.0 million, or approximately 47.6%, compared with the net
loss for the three-month period ended December 31,
2018 of approximately $12.6 million. The decrease was
mainly due to the decrease in research and development expenses as
detailed above and the other income associated with the conclusion
of the Novartis program offset by the impairment of the Company's
long-lived assets.
Loss per ordinary share for the fourth quarter
ended December 31, 2019 was $0.19 compared
with $0.38 for the fourth quarter ended December 31,
2018.
Financial Highlights for the Year Ended December 31,
2019
Research and development expenses, net, for the year
ended December 31, 2019 were approximately $26.7
million, a decrease of $8.7 million, or approximately 24.6%,
compared with approximately $35.4 million in the prior
year period. The decrease was primarily due to a decrease in
expenses related to the ACCORDANCE Phase 3 study of AP-CD/LD and
the Open Label Extension study, both of which were completed during
2019.
General and administrative expenses for the year
ended December 31, 2019 were approximately $8.3
million, an increase of $400,000, or approximately 5.1%,
compared with approximately $7.9 million in the year
ended December 31, 2018. The increase was primarily related to
the increase in insurance expenses. This increase was offset by a
decrease in professional services.
Impairment of long-lived assets was recorded as the top-line
results of the ACCORDANCE trial were considered a triggering event
for impairment. For the year ended December 31, 2019, the
Company recorded an impairment charge of approximately $13.7 million. This impairment represents the
excess carrying value of the long-lived assets compared to its fair
value.
The Company recorded other income for the year ended
December 31, 2019, of $1.5 million on conclusion of the program with
Novartis.
Net loss for the fiscal year ended December 31,
2019 was approximately $47.6 million, an increase
of $4.1 million, or approximately 9.4%, compared with the net
loss for the year ended December 31, 2018 of
approximately $43.5 million. The increase was mainly due to
the impairment of the Company's long-lived assets and an increase
in general and administrative expenses as detailed above offset by
the other income associated with the conclusion of the Novartis
program and the decrease in research and development expenses, as
detailed above.
Loss per ordinary share for the full-year 2019 was $1.41
compared with $1.40 for the full-year 2018.
As of December 31, 2019, the Company had cash and cash
equivalents and marketable securities of approximately $10.1
million compared with approximately $40.6
million at December 31, 2018.
Net cash used in operating activities was
approximately $29.0 million for the year
ended December 31, 2019 compared with net cash used in
operating activities of approximately $39.1 million for
the year ended December 31, 2018. This decrease resulted
primarily from a decrease in research and development activities in
the amount of approximately $8.7
million and changes in operating asset and liability items
of approximately $1.2 million.
The Company had negative cash flow from investing activities of
approximately $3.2 million for the year
ended December 31, 2019 compared with negative cash flow from
investing activities of approximately $9.3 million for
the year ended December 31, 2018. This decrease resulted
primarily from a reduction of approximately $2.1 million in investment in other assets
related to the establishment of the commercial scale production
capabilities for AP-CD/LD at LTS and a decrease in purchase of
property and equipment in the amount of approximately $3.8 million.
Net cash provided by financing activities was
approximately $2.4 million for the year
ended December 31, 2019 compared with net cash provided
by financing activities of approximately $35.1
million for the year ended December 31, 2018. The
principal source of the cash provided by financing activities
during 2019 was the funds received from the Company's
"at-the-market" equity offering program of $2.1 million. The principal source of the cash
provided by financing activities during 2018 was the funds received
from the Company's April 2018 underwritten public
offering of ordinary shares that resulted in net proceeds of
approximately $35.0 million.
In January 2020, the Company
raised $6.5 million in an
underwritten public offering of 16,250,000 ordinary shares (which
included pre-funded warrants to purchase ordinary shares in lieu
thereof) and warrants to purchase up to 16,250,000 ordinary shares,
at a public offering price of $0.40 per ordinary share
and warrant. The warrants have an exercise price
of $0.40 per share, are immediately exercisable, and will
expire five years from the date of issuance.
More detailed information can be found in the Company's Annual
Report, a copy of which has been filed with the Securities and
Exchange Commission and posted on the Company's website at
www.intecpharma.com. You may request a copy of the Company's Form
10-K, at no cost to you, by writing to the Chief Financial Officer
of the Company at 12 Hartom Street, Har Hotzvim, Jerusalem 9777512, Israel or by calling the Company at +972 (2)
586 4657.
About Intec Pharma Ltd.
Intec Pharma is a clinical-stage biopharmaceutical company
focused on developing drugs based on its proprietary Accordion Pill
platform technology. The Company's Accordion Pill is an oral drug
delivery system that is designed to improve the efficacy and safety
of existing drugs and drugs in development by utilizing an
efficient gastric retention and specific release mechanism. The
Company's product pipeline includes two product candidates in
clinical trial stages: Accordion Pill Carbidopa/Levodopa, or
AP-CD/LD, which is in late-stage Phase 3 development for the
treatment of Parkinson's disease symptoms in advanced Parkinson's
disease patients, and AP-cannabinoids, an Accordion Pill to deliver
either or both of the primary cannabinoids contained in Cannabis
sativa, cannabidiol (CBD) and tetrahydrocannabinol (THC) for
various pain indications. In addition, the Company has a research
collaboration with Merck & Co.
For more information, visit www.intecpharma.com. Intec
Pharma routinely posts information that may be important to
investors in the Investor Relations section of its website.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward looking statements about our
expectations, beliefs and intentions. Forward-looking statements
can be identified by the use of forward-looking words such as
"believe", "expect", "intend", "plan", "may", "should", "could",
"might", "seek", "target", "will", "project", "forecast",
"continue" or "anticipate" or their negatives or variations of
these words or other comparable words or by the fact that these
statements do not relate strictly to historical matters. These
forward-looking statements are based on assumptions and assessments
made in light of management's experience and perception of
historical trends, current conditions, expected future developments
and other factors believed to be appropriate. Forward-looking
statements in this press release are made as of the date of this
press release, and we undertake no duty to update or revise any
such statements, whether as a result of new information, future
events or otherwise. Forward-looking statements are not guarantees
of future performance and are subject to risks and uncertainties,
many of which are outside of our control. Many factors could cause
our actual activities or results to differ materially from the
activities and results anticipated in forward-looking statements,
including, but not limited to, the following: our limited operating
history and history of operating losses, our ability to continue as
a going concern, our ability to obtain additional financing, our
ability to successfully operate our business or execute our
business plan, the timing and cost of our clinical trials, the
completion and receiving favorable results in our clinical trials,
our ability to obtain and maintain regulatory approval of our
product candidates, our ability to protect and maintain our
intellectual property and licensing arrangements, our ability to
develop, manufacture and commercialize our product candidates, the
risk of product liability claims, the availability of
reimbursement, and the influence of extensive and costly government
regulation. More detailed information about the risks and
uncertainties affecting us is contained under the heading "Risk
Factors" included in our most recent Annual Report on Form 10-K
filed with the SEC on March 13, 2020, and in other
filings that we have made and may make with the Securities and
Exchange Commission in the future.
INTEC PHARMA
LTD.
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
December
31
|
|
2019
|
2018
|
|
U.S.
dollars
in
thousands
|
Assets
|
|
|
CURRENT
ASSETS:
|
|
|
Cash and cash
equivalents
|
$
9,292
|
$
39,246
|
Investment in
marketable securities
|
770
|
1,333
|
Prepaid expenses and
other receivables
|
3,683
|
2,986
|
TOTAL CURRENT
ASSETS
|
13,745
|
43,565
|
|
|
|
NON-CURRENT
ASSETS:
|
|
|
Property and
equipment, net
|
2,575
|
12,233
|
Operating lease
right-of-use assets
|
1,243
|
-
|
Other
assets
|
3,717
|
5,431
|
Deferred tax
assets
|
-
|
281
|
TOTAL NON-CURRENT ASSETS
|
7,535
|
17,945
|
|
|
|
TOTAL
ASSETS
|
$
21,280
|
$
61,510
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
CURRENT
LIABILITIES -
|
|
|
Accounts payable and
accruals:
|
|
|
Trade
|
$
3,507
|
$
2,849
|
Other
|
4,835
|
4,807
|
TOTAL CURRENT
LIABILITIES
|
8,342
|
7,656
|
LONG-TERM
LIABILITIES -
|
|
|
Operating lease liabilities
|
799
|
-
|
Other liabilities
|
604
|
309
|
TOTAL LONG-TERM
LIABILITIES -
|
1,403
|
309
|
TOTAL
LIABILITIES
|
9,745
|
7,965
|
|
|
|
COMMITMENTS AND
CONTINGENT LIABILITIES
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
Ordinary shares, with
no par value - authorized: 100,000,000 as of
December 31, 2019 and December 31, 2018,
respectively; issued and
outstanding: 35,892,209 and 33,232,988 Ordinary
Shares as of
December 31, 2019 and December 31, 2018,
respectively
|
727
|
727
|
Additional paid-in
capital
|
200,231
|
194,642
|
Accumulated
deficit
|
(189,423)
|
(141,824)
|
TOTAL
SHAREHOLDERS' EQUITY
|
11,535
|
53,545
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
21,280
|
$
61,510
|
INTEC
PHARMA LTD.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
Year ended
December 31
|
|
2019
|
2018
|
|
U.S.
dollars
in
thousands
|
OPERATING
EXPENSES:
|
|
|
RESEARCH AND DEVELOPMENT EXPENSES, net
|
$
(26,659)
|
$
(35,402)
|
GENERAL AND ADMINISTRATIVE EXPENSES
|
(8,287)
|
(7,926)
|
IMPAIRMENT OF
LONG-LIVED ASSETS
|
(13,663)
|
-
|
OTHER
INCOME
|
1,500
|
-
|
OPERATING
LOSS
|
(47,109)
|
(43,328)
|
FINANCIAL INCOME
(EXPENSES), net
|
148
|
(112)
|
LOSS BEFORE
INCOME TAX
|
(46,961)
|
(43,440)
|
INCOME
TAX
|
(638)
|
(103)
|
NET
LOSS
|
$
(47,599)
|
$
(43,543)
|
|
|
|
$
|
LOSS PER ORDINARY
SHARE- BASIC AND DILUTED
|
$
(1.41)
|
$
(1.40)
|
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING USED IN COMPUTATION OF
BASIC
AND DILUTED LOSS PER ORDINARY SHARE
IN
THOUSANDS
|
33,776
|
31,193
|
INTEC
PHARMA LTD.
|
|
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
|
|
|
Ordinary
Shares
|
Additional
paid-in
capital
|
Accumulated
Deficit
|
Total
|
|
Number
of shares
|
Amounts
|
Amounts
|
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
BALANCE AT JANUARY
1, 2018
|
26,075,770
|
$
727
|
$
156,356
|
$
(98,281)
|
$ 58,802
|
CHANGES DURING
2018:
|
|
|
|
|
|
Issuance of ordinary
shares, net of
issuance costs
|
7,150,000
|
-
|
35,029
|
-
|
35,029
|
Exercise of options by
employees
|
7,218
|
-
|
30
|
-
|
30
|
Share-based
compensation
|
-
|
-
|
3,227
|
-
|
3,227
|
Net loss
|
-
|
-
|
-
|
(43,543)
|
(43,543)
|
BALANCE AT
DECEMBER 31, 2018
|
33,232,988
|
$
727
|
$
194,642
|
$
(141,824)
|
53,545
|
CHANGES DURING
2019:
|
|
|
|
|
|
Issuance of ordinary
shares, net of
issuance costs
|
1,944,512
|
-
|
2,086
|
-
|
2,086
|
Issuance of ordinary
shares per
equity line agreement
|
612,520
|
-
|
-
|
-
|
-
|
Exercise of options by
employees
|
102,189
|
-
|
282
|
-
|
282
|
Share-based
compensation
|
-
|
|
3,221
|
|
3,221
|
Net loss
|
-
|
-
|
-
|
(47,599)
|
(47,599)
|
BALANCE AT
DECEMBER 31, 2019
|
35,892,209
|
$
727
|
$
200,231
|
$
(189,423)
|
11,535
|
INTEC
PHARMA LTD.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Year ended
December 31
|
|
2019
|
2018
|
|
U.S. dollars in
thousands
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
Net loss
|
$
(47,599)
|
$
(43,543)
|
Adjustments
required to reconcile net loss to net cash used in
operating activities:
|
|
|
Depreciation
|
854
|
859
|
Impairment of
long-lived assets
|
13,663
|
-
|
Exchange differences
on cash and cash equivalents
|
67
|
829
|
Change in right of use
asset
|
967
|
-
|
Change in lease
liabilities
|
(713)
|
-
|
Losses (gains) on
marketable securities
|
(13)
|
194
|
Share-based
compensation
|
3,221
|
3,227
|
Changes in operating
asset and liabilities:
|
|
|
Increase in prepaid
expenses and other receivables
|
(747)
|
(1,861)
|
Increase (decrease) in
deferred tax assets
|
281
|
(281)
|
Increase in accounts
payable and accruals
|
679
|
1,191
|
Increase in other
liabilities
|
295
|
309
|
Net cash used in
operating activities
|
(29,045)
|
(39,076)
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
Purchase of property
and equipment
|
(921)
|
(4,667)
|
Investment in other
assets
|
(2,865)
|
(4,932)
|
Proceeds from disposal
of marketable securities, net
|
576
|
298
|
Net cash used in
investing activities
|
(3,210)
|
(9,301)
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
Proceeds from issuance
of ordinary shares, net of issuance
costs
|
2,086
|
35,029
|
Proceeds from exercise
of options by employees
|
282
|
30
|
Net cash provided by
financing activities
|
2,368
|
35,059
|
DECREASE IN CASH
AND CASH EQUIVALENTS
|
(29,887)
|
(13,318)
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF
THE YEAR
|
39,246
|
53,393
|
EXCHANGE
DIFFERENCES ON CASH AND CASH EQUIVALENTS
|
(67)
|
(829)
|
CASH AND CASH
EQUIVALENTS AT END OF THE YEAR
|
$
9,292
|
$
39,246
|
|
|
|
SUPPLEMENTAL
DISCLOSURES OF NON-CASH
INVESTING ACTIVITIES:
|
|
|
Liability with respect
to property and equipment
|
-
|
170
|
Liability with respect
to other assets
|
-
|
499
|
|
|
|
SUPPLEMENTARY
DISCLOSURE OF CASH FLOW
INFORMATION:
|
|
|
Taxes paid
|
75
|
96
|
Interest
received
|
327
|
734
|
Intec Pharma Investor Contact:
Will O'Connor
Stern IR
+1 212-362-1200
will@sternir.com
View original
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SOURCE Intec Pharma Ltd.