WARRINGTON, Pa., Aug. 10, 2015 /PRNewswire/ -- Discovery
Laboratories, Inc. (Nasdaq: DSCO), a specialty biotechnology
company focused on developing aerosolized KL4 surfactant therapies
for respiratory diseases, today provided a corporate update, and
announced financial results for the second quarter ended
June 30, 2015. The Company will host
a conference call Tuesday August 11,
2015 at 8:30 AM ET.
Conference call details are below.
Key Highlights
In the second quarter of 2015, the Company implemented a plan to
focus its resources on the development of its aerosolized KL4
surfactant for respiratory diseases, beginning with
AEROSURF® for respiratory distress syndrome (RDS) in
premature infants. Updates on AEROSURF development include:
- Reported encouraging top-line data from the initial phase 2a
clinical trial to assess safety and tolerability of a single
exposure of aerosolized KL4 surfactant administered in three
escalating (15, 30 and 45 minutes) inhaled doses to premature
infants 29 to 34 week gestational age (GA). All key objectives of
the trial were met including establishment of proof of concept for
the Company's technology platform based on physiological data
suggesting that aerosolized KL4 surfactant is being delivered into
the lung of premature infants.
- Currently conducting a phase 2a expansion study in 32 premature
infants to assess safety and tolerability of higher (60 and 90
minutes) and potentially repeat inhaled doses of aerosolized KL4
surfactant administered to premature infants 29 to 34 week GA;
enrollment of the 60 minute dose group is complete and enrollment
of the 90 minute dose group is currently underway; the Company
remains on-track to complete this trial in the fourth quarter of
2015.
- Enrollment is expected to begin in August 2015 in a 32 patient phase 2a clinical
trial to assess safety and tolerability of escalating (30 and 45
minutes) and potentially repeat inhaled doses of aerosolized KL4
surfactant administered to premature infants 26 to 28 week GA;
completion of this trial is expected in the fourth quarter of
2015.
- The Company plans to initiate in the fourth quarter of 2015 a
Phase 2b clinical trial in 200 to 250 premature infants 26 to 32
week GA, with a primary purpose to assess aerosolized KL4
surfactant administered in two escalating doses, demonstrate
evidence of efficacy on an acceptable endpoint, identify the dose
regimen(s) to be used in the planned phase 3 clinical program and
provide an estimate of the treatment effect (magnitude of benefit);
completion of this trial is expected in mid-2016.
As of June 30, 2015, the Company
had cash and cash equivalents of $26.1
million. The Company strengthened its financial position and
better aligned its obligations under its $30
million loan with affiliates of Deerfield Management
Company, L.P. (Deerfield) with
anticipated AEROSURF development milestones:
- Recently completed a public offering of common stock, warrants
and pre-funded warrants, resulting in net proceeds of approximately
$37.6 million, which includes
$5.0 million in non-cash
consideration from Deerfield in
satisfaction of future interest payments due under the Company's
outstanding loan with Deerfield;
the Company anticipates that its existing cash will be sufficient
to support the AEROSURF phase 2 clinical program and fund
operations through first quarter of 2017.
- Amended the $30 million loan
agreement with Deerfield by (i)
prepaying $5.0 million of the
outstanding principal amount and (ii) adjusting the principal
installments under the loan to eliminate the installment due in
February 2017 and adjust the amounts
due in each of February 2018 and
February 2019 from $10 million to $12.5 million.
"The second quarter was a pivotal quarter for our Company as we
implemented a new strategy to focus on the development of our
aerosolized KL4 surfactant for respiratory diseases. We are
encouraged by the results of our recent AEROSURF phase 2a data in
premature infants with RDS, and we continue to advance our clinical
development plan for this potentially transformative therapy for
premature infants," said John G.
Cooper, Discovery Labs' President and Chief Executive
Officer. "We anticipate important development milestones in 2015
and 2016."
Select Financial Results for the Second Quarter ended
June 30, 2015
During the second quarter of 2015, the Company recognized
$0.1 million in grant revenue under a
previously announced award of $1.0
million under a Small Business Innovation Research (SBIR)
Grant from the National Institutes of Health (NIH) for up to
$3.0 million to support the
development of the Company's aerosolized KL4 surfactant as a
medical countermeasure to mitigate acute and chronic/late-phase
radiation-induced lung injury. In June
2015, the Company received a second $1.0 million award under this grant. During
the second quarter of 2014, we received and expended $1.1 million under a $1.9
million Fast Track Small Business Innovation Research (SBIR)
grant from the National Heart, Lung, and Blood Institute (NHLBI) of
the National Institutes of Health (NIH) to support the AEROSURF
phase 2a clinical trial.
Operating expenses for the second quarter ended June 30, 2015 were $10.5
million and included a $2.0
million charge in connection with the plan the Company
implemented in April 2015 to
voluntarily cease the commercialization of SURFAXIN®
(lucinactant) Intratracheal Suspension. Research and
development costs included: (1) activities to conduct the Company's
AEROSURF phase 2a clinical trial and manufacture capillary aerosol
generator (CAG) devices and related components to prepare for the
planned AEROSURF phase 2b clinical program; (2) the Company's 50%
share of development costs under the collaboration with Battelle to
prepare the CAG for a potential AEROSURF phase 3 clinical program
and potential commercial activities; and (3) investments in
clinical, medical, and aerosolization device expertise to support
the AEROSURF clinical program and pipeline development.
The Company reported a net loss of $11.3
million ($0.13 per basic
share) on 85.8 million weighted-average common shares outstanding
for the quarter ended June 30, 2015,
compared to a net loss of $10.6
million ($0.12 per basic
share) on 85.1 million weighted average common shares outstanding
for the comparable period in 2014.
Readers are referred to, and encouraged to read in its entirety,
the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2015 which was filed with
the Securities and Exchange Commission on August 10, 2015, which includes discussion about
the Company's business plans and operations, financial condition
and results of operations.
Conference Call and Audio Webcast Details
The Company
will host a live teleconference and webcast at 8:30 a.m.
Eastern Time on Tuesday August 11,
2015. During the conference call, Discovery Labs' management
will discuss the 2015 second quarter financial results along with
other business updates.
The press release and the live webcast of the conference call
will be available via Discovery Labs' corporate website at
www.discoverylabs.com. The webcast will be made available on
the events page. An archive will be available after the call
at the same address.
To participate in the live conference call, please dial (888)
346-0767 (domestic) or (412) 902-4251 (international). After
placing the call, please ask to be joined into the Discovery Labs
conference call. The conference call replay number is (877)
344-7529 (domestic) or (412) 317-0088 (international); please use
10070663 as the replay passcode.
About AEROSURF®
AEROSURF is a novel,
investigational drug/device product that combines the Company's
proprietary KL4 surfactant and its aerosolization
technologies. AEROSURF is being developed to potentially
reduce or eliminate the need for intubation and mechanical
ventilation in the treatment of premature infants with respiratory
distress syndrome (RDS). With AEROSURF, neonatologists may
potentially administer aerosolized KL4 surfactant to premature
infants supported by nasal continuous positive airway pressure
(nCPAP), without subjecting them to invasive intubation and
mechanical ventilation (each of which can result in serious
respiratory conditions and other complications), which are
currently required to administer surfactant therapy to premature
infants. By enabling delivery of aerosolized KL4 surfactant
using less invasive procedures, AEROSURF, if approved, has
the potential to address a serious unmet medical need, provide
transformative clinical and pharmacoeconomic benefits, and enable
the treatment of a significantly greater number of premature
infants with RDS who could benefit from surfactant therapy but are
currently not treated.
About Discovery Labs
Discovery Laboratories, Inc. is
a specialty biotechnology company focused on developing aerosolized
KL4 surfactant therapies for respiratory diseases.
Surfactants are produced naturally in the lung and are
essential for normal respiratory function and survival. If
surfactant deficiency or degradation occurs, the air sacs in the
lungs can collapse, resulting in severe respiratory diseases and
disorders. Discovery Labs' technology platform includes a
novel synthetic peptide-containing (KL4) surfactant, that is
structurally similar to pulmonary surfactant, and proprietary drug
delivery technologies being developed to enable efficient delivery
of aerosolized KL4 surfactant. Discovery Labs believes that
its proprietary technology platform makes it possible, for the
first time, to develop a significant pipeline of aerosolized
surfactant products to address a variety of respiratory diseases
for which there frequently are few or no approved therapies.
For more information, please visit the Company's website at
www.Discoverylabs.com.
Forward-Looking Statements
To the extent
that statements in this press release are not strictly historical,
all such statements are forward-looking, and are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are
subject to certain risks and uncertainties that could cause actual
results, including projections of future cash balances and
anticipated cash outflows, to differ materially from the statements
made. Examples of such risks and uncertainties are
described in Discovery Labs' filings with the Securities and
Exchange Commission (SEC) including the most recent reports on
Forms 10-K, 10-Q and 8-K, and any amendments thereto, including the
Quarterly Report on Form 10-Q that was filed with the SEC on
August 10, 2015.
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Discovery
Laboratories, Inc.
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Condensed
Consolidated State of Operations
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(in thousands, except
per share data)
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Three Months
Ended
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Six Months
Ended
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June 30,
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June 30,
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(unaudited)
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(unaudited)
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2015
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2014
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2015
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2014
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Revenues:
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Product
sales
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$
–
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$
42
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$
7
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$
70
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Grant
revenue
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75
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|
1,051
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259
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1,054
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|
75
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1,093
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266
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1,124
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Operating expenses:
(1)
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Cost of product
sales
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–
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731
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929
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1,512
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Research and
development
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7,129
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6,858
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14,211
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12,448
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Selling, general and
administrative
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3,383
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4,446
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6,736
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8,869
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Total
expenses
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10,512
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12,035
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21,876
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22,829
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Operating
loss
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(10,437)
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(10,942)
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(21,610)
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(21,705)
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Change in fair value
of common stock warrant liability
(1)
|
469
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1,448
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|
438
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1,826
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Other income /
(expense), net
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(1,358)
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(1,129)
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(2,333)
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(2,220)
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Net loss
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$ (11,326)
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$ (10,623)
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$ (23,505)
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$ (22,099)
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Net loss per common
share:
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Basic
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$ (0.13)
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$ (0.12)
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$ (0.27)
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$ (0.26)
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Diluted
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$ (0.13)
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$ (0.14)
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$ (0.27)
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$ (0.28)
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Weighted avg. common
shares outstanding:
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Basic
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85,753
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85,061
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85,671
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84,766
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Diluted
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85,753
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85,882
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85,671
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86,111
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(1)
Material non-cash items
include the change in fair value of certain outstanding warrants
accounted for as derivative liabilities, and in operating expenses,
depreciation and stock-based compensation. For the three
months ended June 30, 2015 and 2014, the charges for depreciation
and stock-based compensation were $0.5 million ($0.3 million in
R&D and $0.2 million in S, G & A) and $1.0 million ($0.5
million in R&D and $0.5 million in S,G & A), respectively.
For the six months ended June 30, 2015 and 2014, the charges for
depreciation and stock-based compensation were $1.3 million ($0.7
million in R&D and $0.6 million in S, G & A) and $1.8
million ($0.9 million in R&D and $0.9 million in S,G & A),
respectively.
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Discovery
Laboratories, Inc.
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Condensed
Consolidated Balance Sheets
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(in thousands, except
per share data)
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June 30,
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December
31,
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2015
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2014
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ASSETS
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(Unaudited)
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Current
Assets:
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Cash and cash
equivalents
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$
26,091
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$
44,711
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Inventory
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–
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27
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Prepaid expenses and
other current assets
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571
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821
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Total current
assets
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26,662
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45,559
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Property and
equipment, net
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1,245
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1,637
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Restricted
cash
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225
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225
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Other
assets
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68
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78
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Total
Assets
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$
28,200
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$
47,499
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LIABILITIES AND
STOCKHOLDERS' EQUITY
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Current
Liabilities:
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Accounts payable and
accrued expenses
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$
2,314
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$
6,466
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Deferred
revenue
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6,613
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43
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Common stock warrant
liability
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820
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1,258
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Equipment loans,
current portion
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21
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62
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Total current
liabilities
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9,768
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7,829
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Long-term debt,
$30,000 net of discount of $8,549 at June 30, 2015 and
$9,698 at December 31, 2014
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21,451
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20,302
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Other
liabilities
|
|
59
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|
169
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Stockholders'
Equity
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(3,078)
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19,199
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Total Liabilities and
Stockholders' Equity
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$
28,200
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$
47,499
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SOURCE Discovery Laboratories, Inc.