Arsanis, Inc. (NASDAQ: ASNS), a clinical-stage biopharmaceutical
company focused on applying monoclonal antibody (mAb)
immunotherapies to address serious infectious diseases, today
reported financial results for the third quarter
ended September 30, 2018.
“Since the discontinuation of the ASN100 Phase 2 clinical trial,
we have been working with our board of directors to consider
strategic options that may potentially result in changes to our
business strategy and future operations and we look forward to
providing information on these efforts in the future,” said René
Russo, President and Chief Executive Officer of Arsanis.
Dr. Russo continued, “During the third quarter, follow-up visits
for all 154 patients who were enrolled in the ASN100 Phase 2 trial
were completed and the trial database was locked. We are currently
evaluating the complete dataset and we expect to complete the
analysis in the fourth quarter of this year.”
Recent Key Business Developments
- In September 2018, Arsanis nominated the lead development
candidate for its ASN500 program. ASN500 targets respiratory
syncytial virus (RSV), a virus that afflicts in aggregate over two
million young children and elderly and immunocompromised patients
annually in the United States and can cause serious respiratory
tract infections.
- In August 2018, Arsanis entered into a supplemental $1.1
million grant agreement with the Bill & Melinda Gates
Foundation to conduct preclinical development activities for the
ASN500 program that were not included in the original February 2017
grant agreement. The Company recognized grant income of $1.1
million during the three and nine months ended September 30, 2018
under this August 2018 grant agreement.
- In August 2018, Arsanis’ board of directors approved a
reduction in workforce to reduce operating costs and better align
the company’s workforce with the needs of its business following
the discontinuation of ASN100 clinical development. The Company
anticipates that it will substantially complete the implementation
of the reduction in workforce by the end of the fourth quarter of
2018 and estimates that it will incur total expenses of
approximately $2.8 million relating to the reduction in workforce,
comprised of notice and employee severance and retention payments.
Arsanis expects to record these charges during the fourth quarter
of 2018 and first quarter of 2019.
Third Quarter 2018 Financial Results
For the third quarter ended September 30, 2018, Arsanis reported
a net loss of $10.9 million, or $0.76 loss per share, as compared
to a net loss of $11.6 million, or $22.60 loss per share for the
third quarter of 2017.
Operating expenses for the third quarter of 2018 were $12.8
million, as compared to $13.1 million for the third quarter of
2017, and were comprised of the following:
Research and development expenses were $9.6 million for the
third quarter of 2018, as compared to $10.6 million for the third
quarter of 2017. The decrease of $1.0 million was primarily due to
a decrease of $0.9 million in direct costs for Arsanis’ ASN100
program, a decrease of $0.1 million in direct costs for its ASN300
program, and a decrease of $0.2 million in direct costs for its
ASN500 program, partially offset by an increase of $0.2 million in
unallocated research and development expenses.
General and administrative expenses were $3.3 million for the
third quarter of 2018, compared to $2.5 million for the third
quarter of 2017. The increase of $0.8 million was primarily related
to additional costs associated with operating as a public company,
including increases of $0.9 million in personnel costs primarily
due to an increase in headcount and employee compensation.
Other income, net was $1.9 million for the third quarter of
2018, compared to $1.5 million of other expense, net for the third
quarter of 2017.
Year-to-Date 2018 Financial Results
For the nine months ended September 30, 2018, Arsanis reported a
net loss of $33.7 million, or $2.35 loss per share, as compared to
a net loss of $22.7 million, or $44.22 loss per share for the nine
months ended September 30, 2017.
Operating expenses for the nine months ended September 30, 2018
were $36.4 million, as compared to $24.5 million for the nine
months ended September 30, 2017, and were comprised of the
following:
Research and development expenses were $26.6 million for the
nine months ended September 30, 2018, compared to $18.9 million for
the nine months ended September 30, 2017. The increase of $7.7
million was primarily due to an increase of $5.5 million in direct
costs for Arsanis’ ASN100 program, an increase of $0.2 million in
direct costs for its ASN500 program, and an increase of $2.3
million in unallocated research and development expenses.
General and administrative expenses were $9.8 million for the
nine months ended September 30, 2018, compared to $5.6 million for
the nine months ended September 30, 2017. The increase of $4.1
million was primarily related to additional costs associated with
operating as a public company, including increases of $2.2 million
in personnel costs primarily due to an increase in headcount and
employee compensation, $0.3 million in Board of Directors fees,
$0.5 million in insurance fees and $1.0 million in professional
fees primarily due to legal and accounting costs associated with
being a public company.
Other income, net was $2.8 million for the nine months ended
September 30, 2018, compared to $1.8 million for the nine months
ended September 30, 2017.
As of September 30, 2018, cash and cash equivalents totaled
$40.8 million, with approximately 14.32 million shares of common
stock outstanding.
About Arsanis
Arsanis, Inc. is a clinical-stage biopharmaceutical company
focused on applying monoclonal antibody (mAb) immunotherapies to
address serious infectious diseases. Arsanis possesses a deep
understanding of the pathogenesis of infection, paired with access
to what Arsanis believes to be some of the most advanced mAb
discovery techniques and platforms available today. Arsanis’
pipeline is comprised of mAbs targeting multiple serious bacterial
and viral pathogens, including respiratory syncytial virus.
Arsanis is a U.S. company headquartered in Waltham,
Massachusetts, with a wholly owned subsidiary that is primarily
focused on discovery research in Vienna, Austria (Arsanis
Biosciences GmbH).
For more information, please visit the Arsanis website
at www.arsanis.com.
|
ARSANIS, INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(Amounts in
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
September 30,
2018 |
|
|
December 31,
2017 |
Assets |
|
|
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
40,753 |
|
|
$ |
76,793 |
Restricted cash |
|
|
594 |
|
|
|
355 |
Grant and incentive receivables |
|
|
2,870 |
|
|
|
1,608 |
Property and equipment, net |
|
|
323 |
|
|
|
421 |
Prepaid expenses and other assets |
|
|
1,361 |
|
|
|
2,077 |
Total assets |
|
$ |
45,901 |
|
|
$ |
81,254 |
Liabilities, and stockholders’ equity |
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
$ |
5,224 |
|
|
|
7,681 |
Unearned income |
|
|
2,045 |
|
|
|
2,630 |
Loans payable, net of discount |
|
|
10,735 |
|
|
|
12,236 |
Total liabilities |
|
|
18,004 |
|
|
|
22,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
27,897 |
|
|
|
58,707 |
Total liabilities and stockholders' equity |
|
$ |
45,901 |
|
|
$ |
81,254 |
|
|
|
|
|
|
|
|
|
|
ARSANIS,
INC. |
|
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
(Amounts in thousands,
except share and per share amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
9,572 |
|
|
$ |
10,601 |
|
|
$ |
26,635 |
|
|
$ |
18,898 |
|
General and administrative |
|
|
3,275 |
|
|
|
2,455 |
|
|
|
9,778 |
|
|
|
5,629 |
|
Total operating expenses |
|
|
12,847 |
|
|
|
13,056 |
|
|
|
36,413 |
|
|
|
24,527 |
|
Loss from operations |
|
|
(12,847 |
) |
|
|
(13,056 |
) |
|
|
(36,413 |
) |
|
|
(24,527 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant and incentive income |
|
|
2,016 |
|
|
|
1,618 |
|
|
|
2,977 |
|
|
|
3,180 |
|
Interest expense |
|
|
(259 |
) |
|
|
(343 |
) |
|
|
(785 |
) |
|
|
(1,806 |
) |
Interest income |
|
|
196 |
|
|
|
90 |
|
|
|
637 |
|
|
|
90 |
|
Change in fair value of warrant liability |
|
|
— |
|
|
|
5 |
|
|
|
— |
|
|
|
16 |
|
Change in fair value of derivative liability |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
762 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(462 |
) |
Other income (expense), net |
|
|
(6 |
) |
|
|
86 |
|
|
|
(79 |
) |
|
|
57 |
|
Total other income (expense), net |
|
|
1,947 |
|
|
|
1,456 |
|
|
|
2,750 |
|
|
|
1,837 |
|
Net loss |
|
|
(10,900 |
) |
|
|
(11,600 |
) |
|
|
(33,663 |
) |
|
|
(22,690 |
) |
Accretion of redeemable convertible preferred stock to redemption
value |
|
|
— |
|
|
|
(16 |
) |
|
|
— |
|
|
|
(36 |
) |
Net loss attributable to common stockholders |
|
$ |
(10,900 |
) |
|
$ |
(11,616 |
) |
|
$ |
(33,663 |
) |
|
$ |
(22,726 |
) |
Net loss per share attributable to common stockholders—basic and
diluted |
|
$ |
(0.76 |
) |
|
$ |
(22.60 |
) |
|
$ |
(2.35 |
) |
|
$ |
(44.22 |
) |
Weighted average common shares outstanding—basic and diluted |
|
|
14,315,410 |
|
|
|
513,900 |
|
|
|
14,304,721 |
|
|
|
513,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cautionary note regarding forward-looking
statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve substantial risks and uncertainties, including
statements regarding the development status of our programs; the
timing and conduct of our analysis of the cumulative unblinded data
from the Phase 2 clinical trial of ASN100; our plans regarding our
ASN500 program; our plan to consider [and potentially provide
additional information in the future regarding] strategic options
that may result in changes to our business strategy and future
operations; our collaborations with third parties; expectations
regarding the costs associated with our reduction on force; and the
sufficiency of our cash and cash equivalents to fund our planned
operations. All statements, other than statements of historical
facts, contained in this press release, including statements
regarding our strategy, future operations, future financial
position, future revenue, projected costs, prospects, plans and
objectives of management, are forward-looking statements. The words
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,” “plan,” “potential,” “predict,”
“project,” “should,” “target,” “would,” and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words.
We may not actually achieve the plans, intentions or expectations
disclosed in our forward-looking statements, and you should not
place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements we make as a result of important factors, including, but
not limited to: our ability to successfully execute on our
reduction in force, business plans and strategies; our ability to
successfully identify and pursue alternative strategic options;
uncertainties inherent in drug development, including the
availability and timing of data from preclinical and clinical
trials; the content and timing of decisions made by the U.S. Food
and Drug Administration and other regulatory authorities and
investigational review boards at clinical trial sites; our
ability to obtain and maintain requisite regulatory approvals and
to enroll patients in clinical trials; competitive factors; our
ability to obtain, maintain and enforce patent and other
intellectual property protection for any product candidates we may
seek to develop; our ability to maintain strategic
collaborations, licenses and funding arrangements; the availability
of cash resources and our need for additional financing; and
other important risk factors as set forth in filings that we
periodically make with the U.S. Securities Exchange Commission, or
SEC. The forward-looking statements contained in this press
release reflect the current views of Arsanis, Inc. with respect to
future events, and we assume no obligation to update any
forward-looking statements except as required by applicable
law.
Media Contact:
W2O Group
Elliot Fox, 212-257-6724
efox@purecommunications.com
Investor Contact:
Michael Gray, 781-819-5201
Chief Operating and Chief Financial Officer
mike.gray@arsanis.com
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