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AveXis Reports First Quarter 2018 Financial and Operating Results

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-- Significant progress across operating functions including licensing, clinical trials and regulatory interactions --

-- AVXS-101 pre-BLA meeting with FDA is scheduled to be held in June 2018 --

CHICAGO, May 03, 2018 (GLOBE NEWSWIRE) --  AveXis, Inc. (NASDAQ:AVXS), a clinical-stage gene therapy company developing treatments for patients suffering from rare and life-threatening neurological genetic diseases, today reported financial results for the first quarter ended March 31, 2018, recent corporate highlights and upcoming milestones.

"Throughout the first quarter and in recent weeks, we have made significant progress in executing against our strategic plan and are quite pleased that Novartis, with its pending acquisition of the company, recognizes the value that the AveXis team has created," said Sean Nolan, President and Chief Executive Officer of AveXis. "Data presented recently at the American Academy of Neurology from both the Type 1 Phase 1 and STR1VE studies highlight the clinically transformative, durable and consistent response of AVXS-101. We remain steadfast in our goal to make our gene therapy available as quickly and safely as possible for families suffering from SMA."

Recent Corporate Highlights

Entered Agreement to be Acquired by Novartis AG: On April 6, 2018, AveXis entered into an agreement and plan of merger with Novartis AG (Novartis), pursuant to which, and upon the terms and subject to the conditions described therein, on April 17, 2018, a wholly owned subsidiary of Novartis commenced a cash tender offer to acquire all of the outstanding shares of AveXis' common stock at a price of $218.00 per share, net to the seller in cash, without interest, subject to any required withholding of taxes. Each of AveXis and Novartis filed a Premerger Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) with respect to the acquisition on April 13, 2018. On April 30, 2018, the required waiting period under the HSR Act applicable to the proposed acquisition expired. Expiration of the waiting period under the HSR Act satisfies one of the conditions to the closing of the acquisition. The transaction remains subject to certain other closing conditions and is expected to close in May 2018. Until that time, AveXis will continue to operate as a separate and independent company.

Presented Data at the 2018 Annual Meeting of the American Academy of Neurology: On April 24, 2018, AveXis reported initial results from the U.S. pivotal trial (STR1VE) and 24-month follow-up data from the Phase 1 trial of AVXS-101 for the treatment of spinal muscular atrophy (SMA) Type 1.

  • STR1VE Data as of April 11, 2018
    • Eleven patients were enrolled in the trial, and six patients were symptomatic and at least one-month post gene therapy treatment.
    • All symptomatic patients (6 of 6) were alive and event-free. AVXS-101 appeared to have a favorable safety profile and to be generally well tolerated. At the time of gene transfer, the mean age was 3.2 months, with the oldest patient being 5.0 months of age.
    • In the six patients who were at least one-month post gene transfer, a cumulative total of 25 adverse events (AEs) were reported. Two patients experienced transient elevations in transaminases greater than 3x ULN that were not clinically significant and all resolved with prednisolone treatment without any clinical manifestations or sequelae. There were no serious adverse events (SAEs) reported.
    • Children's Hospital of Philadelphia Infant Test of Neuromuscular Disorders (CHOP-INTEND) scores increased by an average of 7.8 at one month after gene transfer (in six patients) and 17.3 at three months after gene transfer (in three patients), reflecting improvement in motor function. These data correlate to CHOP-INTEND achievement by the proposed therapeutic dose cohort (Cohort 2) in the Phase 1 trial, which experienced mean increases of 9.8 points at one month and 15.4 points at three months. Early CHOP-INTEND increases have been observed to be associated with eventual milestone achievement.
  • 24-Month Follow-Up Data from Phase 1 Trial
    • Twenty-four months following gene transfer, 15 of 15 (100%) patients were alive and without need for permanent ventilation.
    • The median age at last follow-up was 27.8 months and 30.7 months for patients in Cohort 2 and low-dose cohort (Cohort 1), respectively. Natural history indicates only eight percent of untreated patients with SMA Type 1 survive event-free at 20 months of age. After the 24-month follow-up, to date, 11 patients have enrolled in the Long-Term Follow-Up (LTFU) trial for ongoing evaluation.
    • Patients in Cohort 2 continued to achieve new milestones during the LTFU trial.
      • Two additional patients achieved the ability to sit unassisted for 30 seconds or more. Eleven of 12 (92%) patients could sit unassisted.
      • Two additional patients achieved the ability to stand with assistance. Four of 12 (33%) patients could stand with assistance.
      • Three of the four patients achieving these new milestones were on AVXS-101 alone (one sitting and two standing with assistance).
      • The oldest child from Cohort 2 at the time of last visit in the LTFU study was 46.2 months old and 40.6 months post gene therapy.
    • AVXS-101 appeared to have a favorable safety profile and to be generally well tolerated, with no new treatment-related safety or tolerability concerns identified at the 24-month follow-up.

Dosed Fourth Patient in Phase 1 Trial of AVXS-101 in SMA Type 2 (STRONG): Following review of safety data from the first three patients dosed in Cohort 1 using the lower dose (6.0 x 1013 vg), the first patient has been dosed in Cohort 2, the higher dose cohort (1.2 X 1014 vg). Four total patients with SMA Type 2 have now been treated with AVXS-101 in the STRONG study. Three patients less than 60 months of age will be enrolled in Cohort 2 and, if safety is established according to the Data Safety Monitoring Board, an additional 21 patients will be enrolled in Cohort 2 until there are a total of 12 patients less than 24 months, and 12 patients at least 24 months but less than 60 months of age.

Initiated Phase 3 Trial of AVXS-101 in Pre-Symptomatic SMA Types 1, 2 and 3 Trial (SPRINT): On April 25, 2018, AveXis announced that the first patient has been dosed in a multi-national Phase 3 trial evaluating AVXS-101 in pre-symptomatic infants less than six weeks of age with SMA Types 1, 2 and 3.

Awarded SAKIGAKE Designation for SMA Type 1: On March 27, 2018, AveXis announced that Japan's Ministry of Health, Labour and Welfare awarded the company's initial product candidate, AVXS-101, SAKIGAKE Designation for the treatment of SMA Type 1. The designation was based on data from the Phase 1 clinical trial of AveXis' proprietary gene therapy. SAKIGAKE is intended to promote research and development in Japan for innovative new medical products that satisfy certain criteria, such as the severity of the intended indication, by providing prioritized consultation review during the early stages of development and by shortening the target review period for license applications from 12 months to as few as six months. The benefits of SAKIGAKE Designation are similar to the Breakthrough Therapy Designation in the United States and access into the PRIority MEdicines (PRIME) scheme in the EU, both of which have already been granted to AVXS-101.

Entered into Licensing Agreement with Généthon: On March 13, 2018, AveXis and Généthon announced they have entered into an exclusive, worldwide license agreement for in vivo gene therapy delivery of the SMN gene using the AAV9 vector into the central nervous system for the treatment of SMA. This agreement strengthens the AVXS-101 intellectual property estate by providing greater freedom to operate in the U.S., Europe and Japan. Under the terms of the agreement, Généthon granted AveXis a license to patents in the U.S., Europe and Japan for the AAV9 SMN product and in vivo gene therapy delivery of AAV9 vector into the CNS using intrathecal or intravenous routes of administration for the treatment of SMA. 

Expanded Relationship with REGENXBIO via Amended SMA License: On January 8, 2018, AveXis and REGENXBIO Inc. (REGENXBIO) announced that under the terms of an amended license agreement for SMA, REGENXBIO granted AveXis exclusive, worldwide rights to all vectors in REGENXBIO's NAV Technology Platform for the treatment of SMA in addition to adding and amending certain terms of their 2014 license agreement for SMA, including the modification of the assignment provision to permit assignment without REGENXBIO's consent in the event of a change of control of AveXis.

Underwritten Public Offering
On January 22, 2018, AveXis completed an underwritten public offering of 4,509,840 shares of its common stock, including the exercise in full by the underwriters of their option to purchase 588,240 shares from AveXis, at a public offering price of $102.00 per share. After deducting the underwriting discounts and commissions, the net proceeds to AveXis were approximately $431.9 million.

Upcoming Milestones

  • Pre-BLA Meeting with FDA:  Meeting is scheduled for June 2018. AveXis expects to provide an update when the final meeting minutes are received, currently anticipated to be late July or early August 2018.
  • Pivotal Trial of AVXS-101 in SMA Type 1 in Europe (STR1VE EU): Expected to initiate in the first half of 2018.
  • Phase 3 Trial of AVXS-101 in Pediatric SMA Types 1, 2, 3 (REACH): Expected to initiate late in the fourth quarter of 2018 or early 2019.
  • Rett Syndrome and Genetic ALS: Expected to submit IND applications for AVXS-201 for Rett syndrome (MECP2) and AVXS-301 for genetic ALS (SOD1) in late 2018/early 2019.

First Quarter 2018 Financial Results

  • Cash Position: As of March 31, 2017, AveXis had $586.8 million in cash and cash equivalents.
  • R&D Expenses: Research and development expenses were $199.7 million for the first quarter of 2018 (which included $7.4 million of non-cash stock-based compensation expense), compared to $20.3 million for the same period in 2017 (which included $2.3 million of non-cash stock-based compensation expense), an increase of $179.4 million. The increase in research and development expenses was primarily attributable to fees associated with our licensing agreements, specifically the agreement with REGENXBIO (including the amendment thereto), for which $130.7 million of expense was recognized in the first quarter of 2018.  Increased spending was also attributable to increased headcount, further development of our manufacturing facility and our STR1VE and STRONG clinical trial starts.
  • G&A Expenses: General and administrative expenses were $22.7 million for the first quarter of 2018 (which included $5.6 million of non-cash stock-based compensation expense), compared to $9.6 million for the same period in 2017 (which included $2.8 million of stock-based compensation expense), an increase of $13.1 million. The increase in general and administrative expenses was primarily attributable to increases in headcount and personnel related costs as well as market research and professional fees.
  • Net Loss: Net loss was $222.1 million, or $6.20 per share, for the first quarter of 2018, compared to a net loss of $29.7 million, or $1.07 per share, for the first quarter of 2017.
Selected Financial Information                  
                   
Operating Results (In thousands, except per share data):            
                   
            Three Months Ended March 31,  
                   
              2018       2017    
Revenue                  
Total revenue       $   -      $   -     
Operating expenses:              

General and administrative 
        22,747         9,638    

Research and development
        199,709         20,327    
             Total operating expenses         222,456         29,965    
Loss from operations           (222,456 )       (29,965 )  
Interest income, net         354         246    
Net loss            $   (222,102 )   $   (29,719 )  
                   
Weighted-average basic and diluted common shares outstanding     35,842         27,734    
                   
Basic and diluted net loss per common share     $   (6.20 )   $   (1.07 )  
                   
Balance Sheet Information (in thousands):            
            March 31,   December 31,  
              2018       2017    
Cash and cash equivalents     $   586,808     $   324,117    
Total assets           667,253      
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