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Concert Pharmaceuticals Reports First Quarter 2017 Financial Results

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Concert
Pharmaceuticals, Inc.
(NASDAQ:CNCE) today reported financial
results for the first quarter of 2017.

"We expect to significantly strengthen our cash position in 2017 through
the asset purchase agreement that we entered into with Vertex
Pharmaceuticals for the sale of CTP-656 and other cystic fibrosis
assets," said Roger Tung, Ph.D., President and Chief Executive Officer
of Concert Pharmaceuticals. "Pending the closing of the Vertex
transaction, we will be well positioned to advance our pipeline,
including the clinical development of CTP-543. We believe CTP-543 has
the potential to be the first oral treatment for alopecia areata, a
disease for which there is currently no approved treatment. We are
excited that our Phase 2a trial is now underway and we continue to
expect topline data in the first quarter of 2018."

Recent Business Highlights and Upcoming Milestones

  • CTP-543 Phase 2a for Alopecia Areata. The Company advanced
    CTP-543 into a Phase 2a trial in patients with moderate-to-severe
    alopecia areata in May 2017. The double-blind, placebo-controlled,
    multi-center, dose ranging study will evaluate four doses of CTP-543
    twice-daily versus placebo, in approximately 100 patients. Topline
    data from the primary outcome measure of the trial is expected in the
    first quarter of 2018. The primary outcome measure is the percentage
    of responders who regrow at least 50% of scalp hair lost due to
    alopecia areata, as measured by the Severity of Alopecia Tool (SALT),
    after 24 weeks of dosing. The trial will include an additional 28
    weeks of dosing during which all patients enrolled in the study will
    receive CTP-543.
  • CTP-656 Asset Purchase Agreement. On March 6, 2017,
    Concert announced that it entered into an asset purchase agreement
    worth up to $250 million with Vertex Pharmaceuticals, Inc., under
    which Vertex will acquire all rights to CTP-656 and other assets
    related to cystic fibrosis. The asset purchase agreement is subject to
    the approval of Concert's shareholders and other closing conditions,
    including Hart-Scott-Rodino clearance. Concert's annual meeting of
    stockholders will be held on May 24, 2017, at 9:00 a.m. and will
    include the authorization of the CTP-656 asset purchase agreement.

First Quarter 2017 Financial Results

  • Cash and Investments Position: Cash, cash equivalents and
    investments as of March 31, 2017, totaled $83.9 million as compared to
    $96.2 million as of December 31, 2016. Concert expects its cash, cash
    equivalents and investments as of March 31, 2017 to be sufficient to
    fund the Company through the second quarter of 2018. Upon closing of
    the CTP-656 asset purchase agreement, pro forma cash is expected to be
    sufficient to fund the Company into 2021.
  • Revenues: Revenue was $20,000 for the quarter ended March 31,
    2017, compared to $56,000 for the same period in 2016. Revenue
    recognized in 2017 and 2016 is comprised of services performed by
    Concert in connection with its strategic collaborations with Celgene
    Corporation and Jazz Pharmaceuticals.
  • R&D Expenses: Research and development expenses were $8.2
    million for the quarter ended March 31, 2017, compared to $10.5
    million for the same period in 2016. In both periods, research and
    development expenses were primarily associated with the development of
    CTP-656 and CTP-543.
  • G&A Expenses: General and administrative expenses were $5.3
    million for the quarter ended March 31, 2017, compared to $3.6 million
    for the same period in 2016. The increase in general and
    administrative expenses was primarily related to professional fees in
    connection with the CTP-656 asset purchase agreement.
  • Net Loss: For the quarter ended March 31, 2017, net loss
    applicable to common stockholders was $13.3 million, or $0.60 per
    share, compared with a net loss applicable to common stockholders of
    $13.9 million, or $0.63 per share, for the quarter ended March 31,
    2016.

Conference Call and Webcast

The Company will host a conference call and webcast
today, Tuesday, May 2, 2017, at 8:30 a.m. EDT to provide an update on
the Company and discuss first quarter financial results. To access the
conference call, please dial (855) 354-1855 (U.S. and Canada) or (484)
365-2865 (International) five minutes prior to the start time.

A live webcast of Concert's presentation may be accessed in the Investors
section
of the Company's website at www.concertpharma.com.
Please log on to the Concert website approximately 15 minutes prior to
the scheduled webcast to ensure adequate time for any software downloads
that may be required. A replay of the webcast will be available on
Concert's website for three months.

 

Concert Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
 
     

Quarter ended March 31,

2017     2016
Revenue:
License and research and development revenue $ 20 $ 56
Total revenue   20   56
Operating expenses:
Research and development 8,237 10,453
General and administrative   5,253   3,577
Total operating expenses   13,490   14,030
Loss from operations (13,470 ) (13,974 )
Interest and other income, net   137   94
Net loss $ (13,333 ) $ (13,880 )
Net loss per share applicable to common stockholders—basic and
diluted
$

(0.60

) $ (0.63 )

Weighted-average number of common shares used in net loss per share
applicable
to common stockholders—basic and diluted

  22,377   22,198
 
 
Concert Pharmaceuticals, Inc.
Summary Balance Sheet Data
(in thousands)
       

March 31,
2017

   

December 31,
2016

Cash and cash equivalents $ 28,106 $ 40,555
Investments, available for sale 55,827 55,630
Working capital

81,528

92,159
Total assets 89,031 100,395
Deferred revenue 10,033 10,050
Total stockholders' equity $ 75,020 $ 85,594
 

Additional Information about the CTP-656 Asset Purchase Agreement and
Where to Find It

This press release is being made in respect of
the proposed asset sale with Vertex. The proposed asset sale and the
asset purchase agreement will be submitted to the shareholders of the
Company for their consideration and approval. In connection with the
proposed asset sale, the Company has filed a proxy statement with the
SEC. This press release does not constitute a solicitation of any vote
or proxy from any shareholder of the Company. Investors are urged to
read the proxy statement carefully and in its entirety when it becomes
available and any other relevant documents or materials filed or to be
filed with the SEC or incorporated by reference in the proxy statement,
because they will contain important information about the proposed asset
sale. The definitive proxy statement will be mailed to the Company's
shareholders. In addition, the proxy statement and other documents will
be available free of charge at the SEC's internet website, www.sec.gov.
When available, the proxy statement and other pertinent documents may
also be obtained free of charge at the Investors
section of the Company's website, www.concertpharma.com,
or by directing a written request to Concert Pharmaceuticals, Inc.,
Attn: Investor Relations at 99 Hayden Ave, #500, Lexington, MA 02421.

The Company and its directors, executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies in connection with the proposed asset sale.
Information about the Company's directors and executive officers is
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2016 filed with the SEC on March 6, 2017. Additional
information regarding these persons and their interests in the
transaction are included in the proxy statement relating to the proposed
asset sale as filed with the SEC. These documents can be obtained free
of charge from the sources indicated above.

About Concert
Concert
Pharmaceuticals
is a clinical stage biopharmaceutical company
focused on applying its DCE
Platform®
(deuterated chemical entity platform) to create novel
medicines designed to address unmet patient needs. The Company's
approach starts with approved drugs in which deuterium substitution has
the potential to enhance clinical safety, tolerability or efficacy.
Concert has a broad
pipeline
of innovative medicines targeting pulmonary diseases,
including cystic fibrosis, autoimmune and inflammatory diseases and
central nervous systems (CNS) disorders. For more information please
visit www.concertpharma.com.

Cautionary Note on Forward Looking Statements
Any statements
in this press release about our future expectations, plans and
prospects, including statements about our expectations for meeting the
conditions for closing the asset purchase agreement with Vertex,
clinical development of our therapeutic candidates, the sufficiency of
our cash, cash equivalents and investments to fund our operations and
other statements containing the words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intend," "may," "plan,"
"potential," "predict," "project," "should," "target," "would," and
similar expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those indicated by such
forward-looking statements as a result of various important factors,
including: the uncertainties inherent in the initiation of future
clinical trials, whether preliminary results from a clinical trial will
be predictive of the final results of that trial or whether results of
early clinical trials will be indicative of the results of later
clinical trials, expectations for regulatory approvals, availability of
funding sufficient for our foreseeable and unforeseeable operating
expenses and capital expenditure requirements and other factors
discussed in the "Risk Factors" section of our most recent Quarterly
Report on Form 10-Q filed with the Securities and Exchange Commission
and in other filings that we make with the Securities and Exchange
Commission. In addition, any forward-looking statements included in this
press release represent our views only as of the date of this release
and should not be relied upon as representing our views as of any
subsequent date. We specifically disclaim any obligation to update any
forward-looking statements included in this press release.

Concert Pharmaceuticals Inc., the CoNCERT Pharmaceuticals Inc. logo and
DCE Platform are registered trademarks of Concert Pharmaceuticals, Inc.

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