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Concert Pharmaceuticals Reports Second Quarter 2018 Financial Results and Provides Company Update

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-- Clinical Programs Advance with CTP-543 Phase 2a Topline Data in
Alopecia Areata and CTP-692 Phase 1 Trial Initiation Expected in the
Fourth Quarter of 2018 --

-- Conference Call Scheduled Today at 8:30 A.M. EDT --

Concert
Pharmaceuticals, Inc.
(NASDAQ:CNCE) today reported financial
results for the second quarter of 2018.

"Our focus in the first half of this year has been to execute on
advancing our proprietary pipeline candidates to key clinical inflection
points. The Phase 2 trial evaluating the 4 and 8 mg twice daily cohorts
of CTP-543 for alopecia areata is on track for clinical completion later
this year with a topline data readout in the fourth quarter," said Roger
D. Tung, Ph.D., President and Chief Executive Officer of Concert
Pharmaceuticals. "In addition, our team is poised to move our next
candidate, CTP-692 for schizophrenia, into Phase 1 evaluation by
year-end. Importantly, both of these candidates are expected to advance
in Phase 2 trials in 2019 in support of their respective registration
programs."

Recent Business Highlights and Upcoming Milestones

  • CTP-543 Phase 2a Topline Data Expected in the Fourth Quarter of
    2018.
    In the second quarter of 2018, Concert completed
    enrollment of the 8 mg cohort in its Phase 2a trial evaluating CTP-543
    for the treatment of moderate-to-severe alopecia areata. The
    double-blind, randomized, placebo-controlled, sequential dose trial is
    designed to evaluate the safety and efficacy of 4 mg and 8 mg of
    CTP-543 twice daily. The primary outcome measure will utilize the
    severity of alopecia tool (SALT) after 24 weeks of dosing. Topline
    data from the 4 mg and 8 mg twice daily cohorts is expected in the
    fourth quarter of 2018.
  • CTP-543 Protocol Amendment Planned. An independent Data
    Monitoring Committee (DMC) will conduct a planned safety data review
    of the second cohort of the CTP-543 Phase 2a trial following 12 weeks
    of dosing with 8 mg of CTP-543 or placebo twice daily. Pending a
    positive assessment by the DMC, the Company will propose to the U.S.
    Food and Drug Administration (FDA) a protocol amendment to also
    evaluate 12 mg of CTP-543 compared to placebo twice daily. Any
    amendment to the existing protocol will not impact the planned data
    readout of the 4 mg and 8 mg twice daily cohorts in the fourth quarter
    of 2018.
  • CTP-692 Phase 1 Trial Planned to Begin in the Fourth Quarter of
    2018.
    The Company intends to advance CTP-692 into Phase 1
    clinical testing by year-end 2018. The Phase 1 program will include a
    crossover pharmacokinetic comparison of CTP-692 to D-serine and single
    and multiple ascending doses of CTP-692. Initial Phase 1 topline data
    is expected in the first quarter of 2019.
  • CTP-692 Preclinical Findings to be Presented at ACT 2018.
    Concert's preclinical studies have demonstrated that selective
    deuterium modification increased D-serine exposure and resulted in no
    changes in creatinine and blood urea nitrogen. These results support
    CTP-692's potential to improve the safety profile of D-serine. These
    findings will be presented as a poster at the American College of
    Toxicology 2018 Annual Meeting being held November 4-7, 2018.
  • New Corporate Headquarters. Concert has leased office
    and laboratory space located at 65 Hayden Avenue, Lexington,
    Massachusetts for the Company's new headquarters. Effective August 13,
    2018, Concert will occupy the new space. The Company's existing lease
    expires in September 2018.

Second Quarter 2018 Financial Results

  • Cash and Investment Position. Cash, cash equivalents and
    investments as of June 30, 2018, totaled $180.3 million as compared to
    $203.2 million as of December 31, 2017. Concert expects its cash, cash
    equivalents and investments as of June 30, 2018 to be sufficient to
    fund the Company into 2021 under its current operating plan.
  • Revenues. Revenue was $2,000 for the quarter ended June
    30, 2018, compared to $15,000 for the same period in 2017. For the six
    months ended June 30, 2018, revenue was $10.5 million, compared to
    $35,000 for the six months ended June 30, 2017. The increase in
    revenue in the first half of 2018 relates primarily to non-cash
    consideration received from Processa Pharmaceuticals in the first
    quarter of 2018 under a license agreement whereby Processa has
    worldwide rights to develop and commercialize CTP-499.
  • R&D Expenses. Research and development expenses were
    $8.9 million for the quarter ended June 30, 2018, compared to $7.3
    million for the same period in 2017. For the six months ended June 30,
    2018, R&D expenses were $17.5 million compared to $15.5 million for
    the same period in 2017. The increase in R&D expenses relate primarily
    to activities associated with the ongoing CTP-543 Phase 2 clinical
    trial and increased expense associated with the advancement of CTP-692
    in 2018 as a new development program.
  • G&A Expenses. General and administrative expenses
    were $5.5 million for the quarter ended June 30, 2018, compared to
    $5.7 million for the same period in 2017. For the six months ended
    June 30, 2018, G&A expenses were $11.1 million compared to $11.0
    million for the same period in 2017. The changes in G&A expenses
    reflect higher stock compensation in 2018 partially offset by lower
    professional fees in 2018.
  • Net Loss. For the quarter ended June 30, 2018, net loss
    applicable to common stockholders was $13.3 million, or $0.57 per
    share, compared with a net loss applicable to common stockholders of
    $13.0 million, or $0.58 per share, for the quarter ended June 30, 2017.

Conference Call and Webcast

The Company will host a conference call and webcast today at 8:30 a.m.
EDT to provide an update on the company and discuss second 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 the second quarter financial results 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.

- Financial Tables to Follow –

 
Concert Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
 
 

Three Months
Ended June 30,

    Six Months Ended
June 30,
2018   2017 2018   2017
Revenue:
License and research and development revenue $ 2 $ 15 $ 10,481 $ 35
Operating expenses:
Research and development 8,862 7,285 17,518 15,522
General and administrative 5,514   5,707   11,144   10,960  
Total operating expenses 14,376   12,992   28,662   26,482  
Loss from operations (14,374 ) (12,977 ) (18,181 ) (26,447 )
Investment income 660 155 1,300 292
Interest and Other expense (205 ) (205 )

Unrealized gain (loss) on marketable equity securities

669     (627 )  
Loss before tax provision (13,045 ) (13,027 ) (17,508 ) (26,360 )
Provision for income taxes 280     280    
Net Loss $ (13,325 ) $ (13,027 ) $ (17,788 ) $ (26,360 )
 

Net loss per share applicable to common stockholders — basic and
diluted

$ (0.57 ) $ (0.58 ) $ (0.76 ) $ (1.17 )

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

23,402   22,579   23,313   22,479  
 
Concert Pharmaceuticals, Inc.
Summary Balance Sheet Data
(in thousands)
 
  June 30, 2018     December 31, 2017
Cash and cash equivalents $ 58,359 $ 27,665
Investments, available for sale 121,988 175,500
Working capital 202,828 199,289
Total assets 220,515 211,736
Deferred revenue 10,533 10,301
Total stockholders' equity 200,283 196,432
 

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 treat serious diseases and address unmet patient
needs. The Company's approach starts with previously studied compounds,
including 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 autoimmune and
inflammatory diseases and central nervous systems (CNS) disorders. For
more information please visit www.concertpharma.com
or follow us on Twitter at @ConcertPharma
or on LinkedIn.

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
clinical development of CTP-543 and CTP-692, 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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