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ARCA biopharma Announces Fiscal Year 2016 Financial Results and Provides Business Update

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ARCA biopharma, Inc. (NASDAQ:ABIO), a biopharmaceutical company
applying a precision medicine approach to developing
genetically-targeted therapies for cardiovascular diseases, today
reported financial results for the year ended December 31, 2016, and
provided a business update.

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Dr. Michael Bristow, President and CEO, ARCA biopharma, Inc. (Photo: Business Wire)

Dr. Michael Bristow, President and CEO, ARCA biopharma, Inc. (Photo: Business Wire)

"During 2016, we continued to make progress advancing the GENETIC-AF
clinical trial evaluating Gencaro as potentially the first
genetically-targeted treatment for atrial fibrillation," commented Dr.
Michael Bristow, ARCA's President and Chief Executive Officer. "The
American Heart Association estimates that approximately 5.2 million
Americans had atrial fibrillation in 2015, with medical and indirect
costs totaling an estimated $31 billion. We believe that a precision
medicine approach to drug development, tailoring medical treatment to
the individual genetic characteristics of each patient, can potentially
enable more effective therapies, improve patient outcomes and reduce
healthcare costs. The GENETIC-AF trial interim efficacy analysis outcome
expected in the third quarter of this year will be a major milestone for
ARCA, the Gencaro development program and our targeted approach to
cardiovascular drug development."

2016 Summary Financial Results

Cash, cash equivalents and marketable securities totaled $23.5
million as of December 31, 2016, compared to $38.8 million as of
December 31, 2015. ARCA believes that its current cash, cash equivalents
and marketable securities will be sufficient to fund its operations, at
its projected cost structure, through the end of 2017.

Research and development (R&D) expenses for the year ended
December 31, 2016 totaled $12.3 million compared to $7.1 million for
2015. The $5.3 million increase in research and development expenses in
2016 as compared to 2015 was primarily due to increased expenses for the
GENETIC-AF clinical trial, including contract research organization
costs, clinical site initiation and monitoring activities, patient visit
costs and increased costs to support expanding the trial into Europe.
The Company expects R&D expenses in 2017 to be higher than 2016 as it
activates new clinical sites and enrolls additional patients in the
GENETIC-AF clinical trial.

General and administrative (G&A) expenses for the year ended
December 31, 2016 were $4.3 million compared to $4.4 million in 2015.
The decrease in expenses during 2016 was comprised primarily of 2015
costs related to a reverse stock split in September 2015, with no
corresponding transaction in 2016, and lower corporate franchise taxes
in 2016 as compared to 2015. ARCA expects G&A expenses in 2017 to be
consistent with those in 2016 as it maintains administrative activities
to support the GENETIC-AF clinical trial.

Total operating expenses for the year ended December 31, 2016
were $16.6 million compared to $11.5 million in 2015. The increase in
total operating expenses for 2016 was primarily due to the increase in
R&D expense due to the increased clinical expense of the GENETIC-AF
clinical trial.

Net loss was $16.4 million, or $1.81 per share, for 2016 compared
to $11.4 million, or $1.82 per share, for 2015.

GENETIC-AF Clinical Trial

GENETIC-AF is an adaptive, seamless design Phase 2B/3, multi-center,
randomized, double-blind, clinical superiority trial comparing the
safety and efficacy of Gencaro to TOPROL-XL (metoprolol succinate) for
the treatment and prevention of recurrent atrial fibrillation or flutter
(AF/AFL) in heart failure patients with reduced left ventricular
ejection fraction (HFrEF). Eligible patients will have HFrEF, a history
of paroxysmal AF (episodes lasting 7 days or less) or persistent AF
(episodes lasting more than 7 days and less than 1 year) in the past 6
months, and the beta-1 389 arginine homozygous genotype that the Company
believes responds most favorably to Gencaro. The primary endpoint of the
study is time to first event of symptomatic AF/AFL or all-cause
mortality. The trial is currently enrolling patients in the United
States, Canada and Europe.

Phase 2B Interim Efficacy Analysis

GENETIC-AF, as an adaptive seamless design Phase 2B/3 superiority trial,
includes an interim data analysis of efficacy and safety. The GENETIC-AF
Data and Safety Monitoring Board (DSMB) will perform a pre-specified
interim analysis of unblinded efficacy data when at least 150 patients
have evaluable data. A randomized patient has evaluable data either when
they experience their first composite endpoint event, AF/AFL or
all-cause mortality, or after completion of the 24-week primary endpoint
follow-up period. The analysis will be conducted for detection of
evidence of safety and superior efficacy of Gencaro versus the active
comparator, metoprolol succinate (TOPROL-XL).

The prospectively defined features of this analysis include an estimate
of Gencaro effectiveness relative to TOPROL-XL and an assessment of
safety as characterized by adverse events. The relative benefit estimate
will utilize Bayesian statistical methods to calculate the predictive
probability of the Phase 3 patient cohort hazard ratio (a measure of an
effect of an intervention on an outcome of interest over time) based on
the interim Phase 2B data. Prospectively defined ranges of predictive
probabilities have been predetermined to define three potential outcomes
based on the projection of the Phase 2B interim results:

    1)   transition the trial to Phase 3 based on a likelihood of achieving a
statistically significant hazard ratio in favor of Gencaro (evidence
of an effectiveness signal consistent with pretrial assumptions) and
enroll up to a total of 620 patients (including the Phase 2B
patients);
2) completion of the Phase 2B stage of the trial including 24-week
follow-up of all randomized subjects (approximately 250 patients),
based on an intermediate result that is potentially favorable but
does not support transition of the trial to Phase 3 or;
3) immediate termination of the trial due to futility.
 

ARCA, in collaboration with the GENETIC-AF Steering Committee, will
determine the most appropriate path forward for the trial based on the
DSMB recommendation from this interim analysis and the Company's
available capital. The unblinded statistical data available to the DSMB
will not be disclosed to ARCA or the public. ARCA projects that the
outcome of the DSMB interim analysis and recommendation will be
available in the third quarter of 2017.

Atrial Fibrillation (AF)

Atrial fibrillation, the most common sustained cardiac arrhythmia, is
considered an epidemic cardiovascular disease and a major public health
burden. The estimated number of individuals with AF globally in 2010 was
33.5 million. According to the 2017 American Heart Association report on
Cardiovascular Disease, approximately 5.2 million people in the United
States had atrial fibrillation in 2015. Hospitalization rates for AF
increased by 23% among U.S. adults from 2000 to 2010 and
hospitalizations account for the majority of the economic cost burden
associated with AF.

About ARCA biopharma

ARCA biopharma is dedicated to developing genetically-targeted therapies
for cardiovascular diseases through a precision medicine approach to
drug development. ARCA's lead product candidate, GencaroTM
(bucindolol hydrochloride), is an investigational, pharmacologically
unique beta-blocker and mild vasodilator being developed for the
potential treatment of patients with atrial fibrillation and chronic
heart failure. ARCA has identified common genetic variations that it
believes predict individual patient response to Gencaro, giving it the
potential to be the first genetically-targeted atrial fibrillation
prevention treatment. ARCA has a collaboration with Medtronic, Inc. for
support of the GENETIC-AF trial. For more information, please visit www.arcabio.com.

Safe Harbor Statement

This press release contains "forward-looking statements" for purposes
of the safe harbor provided by the Private Securities Litigation Reform
Act of 1995.
These statements include, but are not limited to,
statements regarding potential timing for patient enrollment in the
GENETIC-AF trial, potential timeline for GENETIC-AF trial activities and
related recommendations of the DSMB, the potential that the data from at
least 150 patients will support a recommendation that the GENETIC-AF
trial transition to Phase 3, or completion of Phase 2B, the sufficiency
of the Company's capital to support its operations, the potential for
genetic variations to predict individual patient response to Gencaro,
Gencaro's potential to treat atrial fibrillation, future treatment
options for patients with atrial fibrillation, and the potential for
Gencaro to be the first genetically-targeted atrial fibrillation
prevention treatment.
Such statements are based on management's
current expectations and involve risks and uncertainties.
Actual
results and performance could differ materially from those projected in
the forward-looking statements as a result of many factors, including,
without limitation, the risks and uncertainties associated with: the
Company's financial resources and whether they will be sufficient to
meet the Company's business objectives and operational requirements;
results of earlier clinical trials may not be confirmed in future
trials, the protection and market exclusivity provided by the Company's
intellectual property; risks related to the drug discovery and the
regulatory approval process; and, the impact of competitive products and
technological changes.
These and other factors are identified and
described in more detail in ARCA's filings with the SEC, including
without limitation the Company's annual report on Form 10-K for the year
ended December 31, 2016, and subsequent filings. The Company disclaims
any intent or obligation to update these forward-looking statements.

       

ARCA BIOPHARMA, INC.

BALANCE SHEET DATA

(in thousands)

 

December 31, 2016

December 31, 2015

Cash, cash equivalents & marketable securities $23,515 $38,802
Working capital $19,049 $37,412
Total assets $24,629 $39,574
Total stockholders' equity $22,194 $38,070
 
   

ARCA BIOPHARMA, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 
Years Ended December 31,
2016   2015
(in thousands, except share

and per share amounts)

Costs and expenses:
Research and development $ 12,348 $ 7,063
General and administrative   4,265   4,392
Total costs and expenses   16,613   11,455
Loss from operations  

(16,613

)

  (11,455 )
 
Interest and other income 169 14
Interest expense     (4 )
Net loss $ (16,444 ) $ (11,445 )
 
Change in unrealized loss on marketable securities   (19 )  
Comprehensive loss $ (16,463 ) $ (11,445 )
 
Net loss per share:
Basic and diluted $ (1.81 ) $ (1.82 )
Weighted average shares outstanding:
Basic and diluted 9,067,438 6,289,305
 

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