Frequency Therapeutics, Inc. (Nasdaq: FREQ), a regenerative
medicine company focused on developing therapeutics to activate a
person’s innate potential to restore function, today announced
business updates and financial results for the fourth quarter and
full year ended December 31, 2022.
“The Frequency team continues to make important progress with
our novel therapeutic program designed to induce remyelination for
individuals living with multiple sclerosis and remains on track to
initiate clinical development for a potentially first-in-class
therapy for this debilitating disease in the first half of 2024.
Our current cash position takes us into Q1 2025, which enables us
to advance development of this program through an initial clinical
study,” said David L. Lucchino, Frequency’s Chief Executive
Officer. “We believe our remyelination program has the potential to
produce a restorative effect by stimulating oligodendrocyte
precursor cells to myelinate axons, and we are excited that our
compounds have shown in in vivo models significantly greater
remyelinating effect than prior published approaches.”
Recent Program and Business
Updates
- In February, Frequency announced that the FX-322-208 study, a
Phase 2b study for acquired Sensorineural Hearing Loss (SNHL), did
not achieve its primary endpoint of speech perception. Based on
this outcome, Frequency has discontinued both the FX-322 program
and its second development program for hearing restoration, FX-345,
which was enrolling a Phase 1b study for acquired SNHL.
- The Company also announced it will now focus discovery efforts
on its program to induce remyelination for individuals living with
multiple sclerosis (MS), an area where there currently are no
restorative options for patients. MS in characterized by
demyelination, stripping axons of the myelin sheaths that support
neuronal signal conduction and axonal survival. Previously,
Frequency reported it had identified a novel target relevant for
remyelination and that modulation of this target induced robust
oligodendrocyte differentiation and expression of myelin proteins
in vitro. The Company has identified multiple new chemical entities
that induce robust remyelination following demyelination in an
adult in vivo animal model and these novel agents substantially
outperform other clinically studied remyelination agents in
head-to-head in vivo studies. The MS program is independent of the
Frequency’s hearing efforts, with a distinct molecular target,
mechanism, progenitor cell population, and small molecule drug
candidates. Further, a well-defined clinical path with objective
biomarkers such as visual evoked potential (VEP) and magnetic
resonance imaging (MRI) exist for studying the performance of
remyelination therapies in MS patients.
- Given the outcome of the FX-322-208 study, the Company has
undertaken actions to reduce expenses and headcount as part of an
overall restructuring, downsizing personnel by approximately 55
percent. These cuts will be completed by the end of April 2023. The
Company will remain at its current headquarters in Lexington where
it maintains both laboratory and office space.
- CEO and President David L. Lucchino, who had been on medical
leave as of February 7, 2023, returned to the Company on March 1,
2023, and has assumed all prior duties.
Fourth Quarter and Full Year 2022
Financial Results
Cash Position: As of December 31, 2022, Frequency had
cash, cash equivalents and marketable securities of $83.1 million
(excluding restricted cash), or $68.9 million net of debt.
Frequency believes that the restructuring activities will
generate sufficient cost savings to extend its runway into 2025 and
enable it to complete a first clinical trial of its MS Program in
2H 2024.
Research and Development Expenses: Research and
development expenses were $10.6 million for the three months ended
December 31, 2022, as compared to $12.8 million for the comparable
period of 2021. Research and development expenses were $49.4
million for the full year ended December 31, 2022, as compared to
$60.9 million for the comparable period of 2021. Excluding
stock-based compensation expense of $1.7 million for the three
months ended December 31, 2022, and $7.7 million for the full year
ended December 31, 2022, research and development expenses for the
three months and full year ended December 31, 2022, were $8.9
million and $41.7 million, respectively.
General and Administrative Expenses: General and
administrative expenses were $7.5 million for the three months
ended December 31, 2022, as compared to $8.6 million for the
comparable period of 2021. General and administrative expenses were
$33.6 million for the full year ended December 31, 2022, as
compared to $37.2 million for the comparable period of 2021.
Excluding stock-based compensation expense of $2.7 million for the
three months ended December 31, 2022, and $12.1 million for the
full year ended December 31, 2022, general and administrative
expenses for the three months and full year ended December 31,
2022, were $4.8 million and $21.5 million, respectively.
Net Loss: Net loss was $17.4 million for the three months
ended December 31, 2022, as compared to $21.5 million for the
comparable period of 2021. Net loss was $81.6 million for the full
year ended December 31, 2022, as compared to $84.7 million for the
comparable period of 2021.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding the treatment potential and timing of Frequency
Therapeutics’ (the Company) remyelination program in MS (MS
Program), including the timing of clinical development, the
existence of a well-defined clinical path for the MS Program,
potential application of the regenerative medicine platform to
other diseases, the ability of our regenerative medicine platform
to provide patient benefit, and the sufficiency of the Company’s
capital resources, including having sufficient resources to
complete a first clinical trial in its MS Program.
These forward-looking statements are based on management’s
current expectations. These statements are neither promises nor
guarantees, but involve known and unknown risks, uncertainties and
other important factors that may cause actual results, performance
or achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to, the
following: the impact of COVID-19 on the Company’s planned clinical
trials, research and development and manufacturing activities, the
Company’s business and financial markets; the Company has incurred
and will continue to incur significant losses and is not and may
never be profitable; the Company’s need for additional funding to
complete development and commercialization of any product
candidate; the unproven approach of the PCA platform and the
inability to identify additional potential product candidates; the
lengthy, expensive and uncertain process of clinical drug
development and regulatory approval; the Company’s limited
experience successfully obtaining marketing approval for and
commercializing product candidates; the results of pre-clinical
studies not being indicative of the results from clinical trials;
adverse events or undesirable side effects; disruptions at the FDA
and other regulatory agencies; failure to identify additional
product candidates; new or changed legislation; costly and damaging
litigation, including related to product liability or intellectual
property or brought by stockholders; misconduct by employees or
independent contractors; reliance on third parties, including to
conduct clinical trials and manufacture product candidates;
compliance with changing laws and regulations, including healthcare
and environmental, health, data privacy and safety laws and
regulations; failure to obtain, maintain and enforce protection of
patents and other intellectual property rights covering product
candidates; security breaches or failure to protect private
personal information; attracting and retaining key personnel; and
the Company’s ability to manage growth.
These and other important factors discussed under the caption
“Risk factors” in the Company’s Form 10-K filed with the Securities
and Exchange Commission (SEC) on March 10, 2023, and its other
reports filed with the SEC could cause actual results to differ
materially from those indicated by the forward-looking statements
made in this press release. Any such forward-looking statements
represent management’s estimates as of the date of this press
release. While the Company may elect to update such forward-looking
statements at some point in the future, it disclaims any obligation
to do so, even if subsequent events cause its views to change.
These forward-looking statements should not be relied upon as
representing the Company’s views as of any date subsequent to the
date of this press release.
About Frequency Therapeutics
Headquartered in Lexington, Mass., Frequency Therapeutics is
pioneering a new category in regenerative medicine that aims to
restore human function by developing therapeutics that activate a
person’s innate regenerative potential within the body through the
activation of progenitor cells. The Company’s lead preclinical
program is designed to activate oligodendrocyte precursor cells
with the goal of driving remyelination and potential functional
recovery for individuals living with multiple sclerosis. For more
information, visit www.frequencytx.com and follow Frequency on
Twitter @Frequencytx.
Frequency Therapeutics, Inc.
Consolidated Statements of Operations (in thousands,
except share and per share amounts)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Revenue
$
—
$
—
$
—
$
14,068
Operating expenses:
Research and development
10,649
12,754
49,418
60,923
General and administrative
7,547
8,605
33,584
37,176
Total operating expenses
18,196
21,359
83,002
98,099
Loss from operations
(18,196
)
(21,359
)
(83,002
)
(84,031
)
Interest income
456
82
1,327
397
Interest expense
(312
)
(182
)
(961
)
(764
)
Realized gain (loss) on investments
—
—
3
(23
)
Foreign exchange gain (loss)
2
—
(5
)
16
Other income (expense), net
695
(39
)
1,056
(266
)
Loss before income taxes
$
(17,355
)
$
(21,498
)
$
(81,582
)
$
(84,671
)
Tax (provision) benefit
(7
)
(2
)
2
(15
)
Net loss
$
(17,362
)
$
(21,500
)
$
(81,580
)
(84,686
)
Net loss per share attributable to common
stockholders- basic and diluted
$
(0.49
)
$
(0.62
)
$
(2.33
)
$
(2.47
)
Weighted-average shares of common stock
outstanding- basic and diluted
35,262,083
34,596,227
35,075,924
34,351,274
Frequency Therapeutics, Inc.
Consolidated Balance Sheet Data (in thousands)
December 31, 2022
December 31, 2021
Cash, cash equivalents and marketable
securities
$
83,097
$
142,426
Working capital
66,467
123,319
Total assets
121,238
185,358
Total liabilities
52,043
54,534
Accumulated deficit
(261,665
)
(180,085
)
Total stockholders' equity
69,195
130,824
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230310005054/en/
Investor: Carlo Tanzi, Ph.D. Kendall Investor Relations
ctanzi@kendallir.com 617-914-0008
Media: Frequency Therapeutics Email: media@frequencytx.com
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