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Exicure, Inc. Provides Update on Corporate Progress and Second Quarter 2018 Financial Results

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Exicure, Inc. (OTCQB:XCUR), the pioneer in gene regulatory and
immunotherapeutic drugs utilizing three-dimensional, spherical nucleic
acid (SNA™) constructs, today reported financial results for the second
quarter ended June 30, 2018, and provided an update on corporate
progress.

"With the addition of a new COO and the topical dosing of XCUR17 in
patients with mild to moderate psoriasis, Exicure continues to make
progress on our mission," said Dr. David Giljohann, Chief Executive
Officer of Exicure. "In June of 2018, we released data at the Cure SMA
Annual Conference demonstrating the use of Exicure's SNA technology in
Spinal Muscular Atrophy mouse models. Based on the results of this
preclinical study, we intend to further pursue our early stage research
activities in neurological applications," added Dr. Giljohann.

Corporate Progress

  • Began trading on OTCQB market under the ticker symbol XCUR.
  • Announced the addition of Matthias Schroff as Chief Operating Officer.
    Dr. Schroff previously served as CEO of Vaximm and Mologen.
  • Commenced topical dosing in our Phase 1 clinical trial for XCUR17 in
    patients with mild to moderate psoriasis.
  • Presented pre-clinical data demonstrating the performance of Exicure's
    SNA compound designed for use in spinal muscular atrophy at the Cure
    SMA Annual Conference with collaborators at The Ohio State University
    Wexner Medical Center.
  • Completed third cohort of volunteers in our AST-008 trial and
    announced the planned enrollment of a Phase 1b/2 trial expected to
    commence in late 2018 in combination with checkpoint inhibitors.

Pre-Clinical Updates

In June, Exicure and The Ohio State University Wexner Medical Center
presented a poster at the Cure SMA Annual Conference titled: "Nusinersen
in spherical nucleic acid (SNA) format improves efficacy both in
vitro in SMA patient fibroblasts and in Δ7 SMA mice and reduces toxicity
in mice." It was observed in the preclinical study that nusinersen in
SNA format prolonged survival by four-fold (maximal survival of 115 days
compared to 28 days for nusinersen-treated mice) as well as doubled the
levels of healthy full-length SMN2 mRNA and protein in SMA patient
fibroblasts when compared to nusinersen.

Pipeline Updates

AST-008: AST-008 is an SNA consisting of toll-like receptor 9
(TLR9) agonists designed for immuno-oncology applications. The Phase 1
clinical trial of AST-008 evaluates the safety, tolerability,
pharmacokinetics, and pharmacodynamics of AST-008 by subcutaneous
administration in healthy volunteers. This trial is expected to be
completed in the third quarter of 2018. We currently anticipate
preparing and commencing a Phase 1b/2 clinical trial for AST-008 in
combination with checkpoint inhibitors in late 2018.

XCUR17: XCUR17 is an antisense SNA that targets the mRNA
encoding IL-17RA, a protein that is considered essential in the
initiation and maintenance of psoriasis. Our Phase 1 trial of XCUR17 is
a microplaque study in patients with mild to moderate psoriasis. We have
dosed 19 of the prospective 25 patients. Full enrollment and trial
completion is expected during the fourth quarter.

AST-005: AST-005 is an SNA containing TNF antisense
oligonucleotides and is intended to be applied in a gel to psoriatic
lesions. AST-005 is the subject of our collaboration with Purdue Pharma
L.P. Purdue Pharma notified Exicure that it has declined to exercise its
option to develop AST-005 at this time, but that it also intends to
retain rights relating to the TNF target. Purdue reserves its right to
continue joint development, with Exicure, of new anti-TNF drug
candidates and to retain its exclusivity and other rights to AST-005.

Second Quarter 2018 Financial Results and Financial Guidance

Cash Position: As of June 30, 2018, Exicure had cash and cash
equivalents of $16.4 million compared to $25.8 million as of December
31, 2017.

Research and Development (R&D) Expenses: Research and
development expenses were $3.8 million for the three months ended June
30, 2018, compared to $3.3 million for the three months ended June 30,
2017. The increase in research and development expense of $0.5 million
was primarily due to higher employee related expenses resulting from the
hire of our Chief Operating Officer and higher platform discovery
expenses attributable to costs necessary to maintain our intellectual
property portfolio. Clinical development expenses were nearly flat
quarter over quarter.

General and Administrative (G&A) Expenses: General and
administrative expenses were $2.0 million for the quarter ended June 30,
2018, compared to $2.1 million for the quarter ended June 30, 2018. The
decrease in general and administrative expenses of $0.1 million reflects
the net change attributable to a decrease in legal and accounting
expenses due to the absence of certain financing expenses incurred
during 2017 offset by an increase in costs attributable to being a
public company.

Net Loss: Net loss was $6.8 million for the quarter ended June
30, 2018, compared to net loss of $3.0 million for the quarter ended
June 30, 2017. The $3.8 million increase in net loss is due principally
to a decrease in revenue of $2.7 million that mostly reflects the
absence of revenue recognized in the prior period related to the
amortization of the upfront payment, and certain reimbursable research
and development activities, under the Purdue Collaboration. In addition,
we had an increase in Other Loss of $0.8 million principally due to the
fair value adjustment of our common stock warrant liability.

Cash Runway Guidance: Exicure believes that, based on its current
operating plans and estimates of expenses, as of the date of this press
release, its existing cash and cash equivalents as of June 30, 2018,
will be sufficient to meet its anticipated cash requirements through
March 31, 2019.

About Exicure, Inc.

Exicure, Inc. is a clinical stage biotechnology company developing a new
class of immunomodulatory and gene regulating drugs against validated
targets. Exicure's proprietary 3-dimensional, spherical nucleic acid
(SNA™) architecture unlocks the potential of therapeutic
oligonucleotides in a wide range of cells and tissues. Exicure's lead
programs address inflammatory diseases, genetic disorders and oncology.
Exicure is based outside of Chicago, IL. www.exicuretx.com

Forward Looking Statements

This press release contains forward-looking statements (including within
the meaning of Section 21E of the United States Securities Exchange Act
of 1934, as amended, and Section 27A of the United States Securities Act
of 1933, as amended) concerning the Company, cash requirements and
runway, the Company's technology, potential therapies, clinical and
regulatory objectives and other matters. Forward-looking statements
generally include statements that are predictive in nature and depend
upon or refer to future events or conditions, and include words such as
"may," "will," "should," "would," "expect," "plan," "believe," "intend,"
"look forward," and other similar expressions among others. Statements
that are not historical facts are forward-looking statements.
Forward-looking statements are based on current beliefs and assumptions
that are subject to risks and uncertainties and are not guarantees of
future performance. Actual results could differ materially from those
contained in any forward-looking statement as a result of various
factors, including, without limitation: unexpected costs, charges or
expenses that reduce cash runway; that Exicure's pre-clinical programs
do not advance into the clinic or result in approved products on a
timely or cost-effective basis or at all; regulatory developments; and
the ability of Exicure to protect its intellectual property rights.
Exicure's pipeline programs are in various stages of pre-clinical and
clinical development, and the process by which such pre-clinical or
clinical therapeutic candidates could potentially lead to an approved
therapeutic is long and subject to significant risks and uncertainties.
Risks facing the Company and its programs are set forth in the Company's
filings with the SEC. Except as required by applicable law, the Company
undertakes no obligation to revise or update any forward-looking
statement, or to make any other forward-looking statements, whether as a
result of new information, future events or otherwise.

 

EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS

(in thousands, except share and per
share data)

       
June 30,
2018
December 31,
2017
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 16,380 $ 25,764
Accounts receivable 22
Unbilled revenue receivable 2 13
Receivable from related party 46 17
Prepaid expenses and other assets 1,623   1,844  
Total current assets 18,073 27,638
Property and equipment, net 1,206 1,317
Other noncurrent assets 64   32  

Total assets

$ 19,343   $ 28,987  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,570 $
Accounts payable 1,045 1,049
Accrued expenses and other current liabilities 1,652 1,273
Current portion of deferred revenue   1,034  
Total current liabilities 4,267 3,356
Long-term debt, net 3,333 4,855
Common stock warrant liability 1,566 523
Other noncurrent liabilities 275   278  
Total liabilities $ 9,441 $ 9,012
 
Stockholders' equity:
Common stock, $0.0001 par value per share; 200,000,000 shares
authorized, 39,454,821 issued and outstanding, June 30, 2018;
39,300,823 shares issued and outstanding, December 31, 2017
4 4
Additional paid-in capital 54,813 53,586
Accumulated deficit (44,915 ) (33,615 )
Total stockholders' equity 9,902   19,975  
Total liabilities and stockholders' equity $ 19,343   $ 28,987  
 
 

EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

(in thousands, except share
and per share data)

       
Three Months Ended,
June 30,
Six Months Ended
June 30,
2018   2017 2018   2017
Revenue:
Collaboration revenue $ 19   $ 2,695   $ 55   $ 5,127  
Total revenue 19 2,695 55 5,127
Operating expenses:
Research and development expense 3,835 3,301 7,110 6,789
General and administrative expense 1,988   2,110   4,033   3,536  
Total operating expenses 5,823   5,411   11,143   10,325  
Operating loss (5,804 ) (2,716 ) (11,088 ) (5,198 )
Other income (expense), net:
Interest expense (166 ) (211 ) (327 ) (415 )
Other income (loss), net (855 ) (57 ) (919 ) (23 )
Total other income (loss), net (1,021 ) (268 ) (1,246 ) (438 )
Net loss $ (6,825 ) $ (2,984 ) $ (12,334 ) $ (5,636 )
 
Basic and diluted loss per common share $ (0.17 ) $ (15.70 ) $ (0.31 ) $ (31.31 )
Basic and diluted weighted-average common shares outstanding 39,454,821 190,084 39,406,324 179,995

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