Entered into Definitive Merger Agreement with
AcelRx Pharmaceuticals; Acquisition Expected to Close in June
2020
Continued double digit quarter over quarter
growth of XERAVA in U.S. Hospitals and other Institutions with High
Antibiotic Usage
Tetraphase Pharmaceuticals, Inc. (NASDAQ:TTPH), a
biopharmaceutical company focused on commercializing its novel
tetracycline XERAVA to treat serious and life-threatening
infections, today reported financial results for the first quarter
ended March 31, 2020.
“In the first quarter, we announced a merger agreement with
AcelRx Pharmaceuticals, Inc., an essential step forward for
Tetraphase and more importantly, for XERAVA and the patients with
serious life threatening infections in need of this treatment,”
said Larry Edwards, President and Chief Executive Officer of
Tetraphase. “In the midst of the ongoing COVID-19 pandemic and the
continued rise of antibiotic resistance, our conviction in
providing patients with different antibiotic treatment options is
stronger than ever, and we believe that together with AcelRx we
will be able to more effectively bring XERAVA to patients in
healthcare institutions. With an approximate 20% growth in XERAVA
net sales in the first quarter compared to the fourth quarter of
2019, we look forward to seeing continued success from the combined
Tetraphase and AcelRx teams following the planned close of the
acquisition this quarter.”
First Quarter and Recent Highlights
- Entered into Definitive Merger Agreement with AcelRx
Pharmaceuticals, Inc.
In March 2020, the Company announced the execution of a
definitive merger agreement pursuant to which AcelRx
Pharmaceuticals, Inc. (Nasdaq: ACRX) would acquire Tetraphase in a
stock for stock transaction. Under the terms of the agreement,
Tetraphase stockholders will receive, for each share of Tetraphase
common stock, 0.6303 of a share of AcelRx common stock, valued at
approximately $14.4 million as of the close of trading on March 13,
2020, and one contingent value right (CVR), which would entitle the
holders to receive aggregate payments of up to $12.5 million for
the achievement of future XERAVA™ net sales milestones starting in
2021. The transaction was unanimously approved by both the AcelRx
and Tetraphase boards of directors and is expected to close in the
second quarter of 2020. Concurrently with signing the merger
agreement, Tetraphase and AcelRx entered into a co-promotion
agreement to market and promote XERAVA™ for the treatment of
complicated intra-abdominal infections (cIAI) and DSUVIA® for the
treatment of acute pain in medically supervised settings.
- Continued to Progress Launch of XERAVA in U.S. Hospitals
With High Antibiotic Usage
The Company continues to see increased formulary uptake, with a
99% success rate for all formulary reviews to date and $1.8 million
in XERAVA net sales for the first quarter of 2020, an increase of
approximately 20% over the fourth quarter of 2019. Tetraphase’s
salesforce is focusing on bringing XERAVA to targeted institutions,
which are the highest users of antibiotics defined by days of
therapy. The reorder rate for XERAVA continues to be strong, with
reorder rates as high as 65% for all accounts and approximately 77%
within the Tier 1 account segment. XERAVA is on formulary or
available at more than 1,239 accounts. XERAVA continues to
outperform all recent IV antibiotic launches anywhere from 3 to 10
fold in patient days of therapy (PDOTs).
- Completed Equity Financing Totaling Net Proceeds of $15.9
Million
In January 2020, the Company completed a private placement with
Armistice Capital, LLC, a healthcare-focused institutional
investor, priced at-the-market, that generated gross proceeds of
approximately $10 million. In addition, the Company concurrently
completed a registered direct offering with certain
healthcare-focused institutional investors, priced at-the-market,
that generated gross proceeds of approximately $7.5 million. The
net proceeds from the concurrent January 2020 private placement and
registered direct offering were approximately $15.9 million. The
Company issued warrants in connection with each financing.
First Quarter 2020 Financial Results
As of March 31, 2020, Tetraphase had cash and cash equivalents
of $26.1 million and 7.3 million shares outstanding.
For the first quarter of 2020, Tetraphase reported a net loss of
$12.1 million, or $1.31 per share, compared to a net loss of $19.5
million, or $7.25 per share, for the same period in 2019, driven by
increased product revenues, lower operating expenses and an
increase in the weighted-average number of shares outstanding.
Total revenues were $1.8 million for the first quarter of 2020,
all of which was from sales of XERAVA, compared to $1.3 million for
the same period in 2019, of which $0.3 million was from sales of
XERAVA and $0.9 million was government contract revenue.
Research and development (R&D) expenses for the first
quarter of 2020 were $1.9 million, compared to $6.7 million for the
same period in 2019. The decrease in R&D expenses was driven by
the completion of XERAVA development and our corporate
reorganization in June 2019, which included the cessation of
development of our pipeline candidates.
Selling, general and administrative (SG&A) expenses for the
first quarter of 2020 were $10.7 million, compared to $13.3 million
for the same period in 2019. The decrease was driven by our 2019
corporate reorganization as well as tight expense control during Q1
2020, offset by increased expenses related to the AcelRX merger
transaction announced in March 2020.
About XERAVATM
XERAVA (eravacycline for injection) is a tetracycline class
antibacterial indicated for the treatment of complicated
intra-abdominal infections (cIAI) in patients 18 years of age and
older. XERAVA was investigated for the treatment of cIAI as part of
the Company's IGNITE (Investigating Gram-Negative Infections
Treated with Eravacycline) Phase 3 program. In the first pivotal
Phase 3 trial in patients with cIAI, twice-daily intravenous (IV)
XERAVA met the primary endpoint by demonstrating statistical
non-inferiority of clinical response compared to ertapenem and was
well-tolerated. In the second Phase 3 clinical trial in patients
with cIAI, twice-daily IV XERAVA met the primary endpoint by
demonstrating statistical non-inferiority of clinical response
compared to meropenem and was well-tolerated. In both trials,
XERAVA achieved high cure rates in patients with Gram-negative
pathogens, including resistant isolates.
XERAVATM Important Safety Information
XERAVA is a tetracycline class antibacterial indicated for the
treatment of complicated intra‑abdominal infections in patients 18
years of age and older.
XERAVA is not indicated for the treatment of complicated urinary
tract infections.
To reduce the development of drug-resistant bacteria and
maintain the effectiveness of XERAVA and other antibacterial drugs,
XERAVA should be used only to treat or prevent infections that are
proven or strongly suspected to be caused by susceptible
bacteria.
XERAVA is contraindicated for use in patients with known
hypersensitivity to eravacycline, tetracycline-class antibacterial
drugs or to any of the excipients. Life-threatening
hypersensitivity (anaphylactic) reactions have been reported with
XERAVA.
The use of XERAVA during tooth development (last half of
pregnancy, infancy and childhood to the age of eight years) may
cause permanent discoloration of the teeth (yellow-gray-brown) and
enamel hypoplasia.
The use of XERAVA during the second and third trimester of
pregnancy, infancy and childhood up to the age of eight years may
cause reversible inhibition of bone growth.
Clostridium difficile associated diarrhea (CDAD) has been
reported with use of nearly all antibacterial agents and may range
in severity from mild diarrhea to fatal colitis.
The most common adverse reactions observed in clinical trials
(incidence ≥ 3%) were infusion site reactions, nausea, and
vomiting.
XERAVA is structurally similar to tetracycline-class
antibacterial drugs and may have similar adverse reactions. Adverse
reactions including photosensitivity, pseudotumor cerebri, and
anti‑anabolic action which has led to increased blood urea
nitrogen, azotemia, acidosis, hyperphosphatemia, pancreatitis, and
abnormal liver function tests, have been reported for other
tetracycline-class antibacterial drugs, and may occur with XERAVA.
Discontinue XERAVA if any of these adverse reactions are
suspected.
To report SUSPECTED ADVERSE REACTIONS, contact Tetraphase
Pharmaceuticals Inc., at 1-833-7-XERAVA (1-833-793-7282) or FDA at
1‑800‑FDA-1088 or www.fda.gov/medwatch.
Please see full prescribing information for XERAVA.
About Tetraphase Pharmaceuticals, Inc.
Tetraphase Pharmaceuticals, Inc., is a biopharmaceutical company
using its proprietary chemistry technology to create novel
tetracyclines for serious and life-threatening conditions,
including infections caused by many of the multidrug-resistant
bacteria highlighted as urgent public health threats by the World
Health Organization and the Centers for Disease Control and
Prevention. The Company has created more than 3,000 novel
tetracycline compounds using its proprietary technology platform.
Tetraphase's lead product XERAVA™ is approved for the treatment of
complicated intra-abdominal infections by the U.S. Food and Drug
Administration and the European Medicines Agency. The Company’s
pipeline also includes antibiotics TP-271 and TP-6076, which are
Phase 2 ready, and TP-2846, which is in preclinical testing for
acute myeloid leukemia. The Company intends to out license its
pipeline candidates. Please visit www.tphase.com for more company
information.
Additional Information and Where to Find it
The Company filed a proxy statement with the Securities and
Exchange Commission (“SEC”) in connection with the proposed
transaction with AcelRx, including a form of proxy card, on April
24, 2020. The proxy statement and form of proxy card have been
mailed to the Company’s stockholders beginning on April 28, 2020.
The proxy statement contains important information about the
Company, AcelRx, the merger and related matters. Investors and
security holders are urged to read the proxy statement
carefully.
Investors and security holders can obtain free copies of the
proxy statement and other documents filed with the SEC by the
Company through the web site maintained by the SEC at www.sec.gov.
In addition, investors and security holders can obtain free copies
of the proxy statement from the Company by written request to the
Company at Tetraphase Pharmaceuticals, Inc., 480 Arsenal Way,
Watertown, Massachusetts 02472, Attn: Secretary or by calling (617)
715-3600.
The Company and its directors and executive officers may be
deemed to be participants in the solicitation of proxies in respect
to the transactions contemplated by the merger agreement.
Information regarding the Company’s directors and executive
officers, including the direct and indirect interests of the
Company’s directors and executive officers in the merger, is
contained in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2019 filed with the SEC on March 12, 2020 and in
the proxy statement dated April 24, 2020, each of which is filed
with the SEC. These documents can be obtained free of charge
from the sources listed above.
Forward-Looking Statements
Statements in this press release regarding the proposed
transaction between AcelRx and Tetraphase, the expected timetable
for completing the transaction, future financial and operating
results, benefits and synergies of the transaction, future
opportunities for the combined company and any other statements
about our future expectations, beliefs, goals, plans or prospects
constitute forward‑looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements
that are not statements of historical fact (including statements
containing “believes,” “anticipates,” “plans,” “expects,” “may,”
“will,” “would,” “intends,” “estimates” and similar expressions)
should also be considered to be forward‑looking statements. Actual
results may differ materially from those indicated by such
forward-looking statements as a result of various important
factors, including whether our cash runway and expected revenue
will be sufficient to fund our operations in the future; the risk
that the proposed merger may not be completed in a timely manner,
or at all, which may adversely affect our business and the price of
our common stock; the failure to satisfy all of the closing
conditions of the proposed merger, including the adoption of the
merger agreement by Tetraphase’s stockholders; the occurrence of
any event, change or other circumstance that could give rise to the
termination of the merger agreement; the effect of the announcement
or pendency of the proposed merger on Tetraphase’s business,
operating results and relationships with customers, suppliers,
competitors and others; potential difficulties retaining employees
as a result of the proposed merger; the outcome of any legal
proceedings that may be instituted against us related to the merger
agreement or the proposed merger; risks relating to the impact of
COVID-19 on our business and operations, including the impact on
[demand for our product, our ability to operate remotely given the
shut-down of our offices and our ability to access accounts]; risks
relating to product development and commercialization; risks
associated with competition; and other commercial and other risk
factors discussed in the "Risk Factors" section of our quarterly
report on Form 10-Q for the quarter ended March 31, 2020, filed
with the SEC on [May 7, 2020]. In addition, the forward-looking
statements included in this press release represent our views as of
[May 7, 2020]. We anticipate that subsequent events and
developments will cause our views to change. However, while we may
elect to update these forward-looking statements at some point in
the future, we specifically disclaim any obligation to do so.
Tetraphase Pharmaceuticals, Inc. Condensed
Consolidated Balance Sheets (unaudited) (In thousands)
March 31,
December 31,
2020
2019
Assets Cash and cash equivalents
$
26,146
$
21,239
Accounts receivable, net
1,706
1,503
Inventory
788
1,595
Prepaid expenses and other current assets
1,178
2,156
Property and equipment, net
78
98
Intangible assets, net
4,160
4,259
Operating lease right-of-use assets
2,598
4,836
Restricted cash
699
699
Total assets
$
37,353
$
36,385
Liabilities and Stockholders' equity Accounts payable
and accrued expenses
$
7,212
$
8,223
Operating lease liabilities
2,686
4,995
Total stockholders' equity
27,455
23,167
Total liabilities and stockholders' equity
$
37,353
$
36,385
Tetraphase Pharmaceuticals, Inc. Condensed
Consolidated Statement of Operations (Unaudited) (In
thousands, except per share data)
Three Months Ended
March 31,
2020
2019
Revenues: Product revenue, net
$
1,755
$
341
Government revenue
-
932
Total revenue
1,755
1,273
Expenses: Cost of revenue - product sales
1,360
164
Cost of revenue - intangible asset amortization
98
98
Research and development
1,893
6,737
Selling, general and administrative
10,668
13,314
Total expenses
14,019
20,313
Loss from operations
(12,264
)
(19,040
)
Other income and expenses
140
(448
)
Net loss
$
(12,124
)
$
(19,488
)
Net loss per share-basic and diluted
$
(1.31
)
$
(7.25
)
Weighted-average number of common shares used in net loss per
share-basic and diluted
9,273
2,687
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