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Tricida Announces Second Quarter 2018 Financial Results and Provides Update on Key Initiatives

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Completed Positive Pivotal Phase 3 Trial for TRC101

Completed $255.6 Million Initial Public Offering

Webcast Today at 5:00 pm ET

Tricida, Inc. (NASDAQ:TCDA), a pharmaceutical company focused on the
development and commercialization of TRC101, a non-absorbed,
orally-dosed polymer designed to treat metabolic acidosis in patients
with chronic kidney disease (CKD), announced today financial results for
the three and six months ended June 30, 2018 and provided an update on
key initiatives.

"Following the positive results of our pivotal Phase 3 trial and the
successful completion of our initial public offering in which we raised
gross proceeds of $255.6 million, we are now focused on our plan to file
the NDA for TRC101 in the second half of 2019," said Gerrit Klaerner,
Ph.D., Tricida's chief executive officer and president. "TRC101 holds
the promise of potentially slowing the progression of CKD through the
treatment of metabolic acidosis, a condition that affects approximately
three million CKD patients in the United States. We are now initiating
the VALOR-CKD trial, a large multi-center, placebo-controlled,
postmarketing study of TRC101, with the goal of demonstrating that
treating metabolic acidosis with TRC101 can lead to the slowing of CKD
progression and thereby delay the ultimate need for dialysis or a kidney
transplant."

Recent Highlights

  • Reported results from the pivotal Phase 3 clinical trial, TRCA-301,
    which met both its primary and secondary endpoints with high
    statistical significance in May 2018.
  • Completed enrollment of 196 subjects into the 40-week safety extension
    trial, TRCA-301E, in May 2018.
  • Completed an initial public offering (IPO) for total gross proceeds of
    approximately $255.6 million in July 2018.
  • Submitted the protocol for the VALOR-CKD confirmatory postmarketing
    clinical trial, also known as TRCA-303 to the U.S. Food and Drug
    Administration (FDA) in July 2018.
  • Formed the VALOR-CKD Steering Committee that includes world-recognized
    experts in nephrology in May 2018.
  • Announced the addition of Dawn Parsell, Ph.D., to the executive
    management team as Senior Vice President of Clinical Development in
    August 2018.
  • Presented a poster, co-authored with Navdeep Tangri, M.D., Ph.D.,
    FRCP(C), at the National Kidney Foundation (NKF) 2018 Spring Clinical
    Meetings demonstrating the linear relationship between treating
    metabolic acidosis and the risk of CKD progression in April 2018.
  • Received confirmation of the TRC101 generic name verimer in
    July 2018.

Upcoming Events and Projected Milestones

  • Presentation of results from the pivotal Phase 3 clinical trial,
    TRCA-301, at the American Society of Nephrology (ASN) Kidney Week 2018
    Meeting in October 2018.
  • Initiation of a non-branded disease education campaign focused on
    metabolic acidosis and the progression of CKD, including a mobile
    software app focused on helping nephrologists calculate the risk of
    CKD progression, at the ASN Kidney Week 2018 Meeting in October 2018.
  • Initiation of clinical study sites for the VALOR-CKD trial in the
    second half of 2018.
  • Completion of the 40-week safety extension trial, TRCA-301E, in the
    first half of 2019.
  • Availability of New Drug Application (NDA) enabling 12-month
    registration stability data for TRC101 in mid-2019.
  • Submission of our NDA for TRC101, seeking approval of TRC101 through
    the FDA's Accelerated Approval Program, in the second half of 2019.

Financial Results for the Quarter Ended June 30, 2018

Research and development expense was $21.0 million and $4.6 million for
the three months ended June 30, 2018 and 2017, respectively. The
increase in research and development expense was primarily due to
increased activities in connection with our TRC101 clinical development
program, including increased drug substance manufacturing, as well as
increased personnel and related costs. For the six months ended June 30,
2018 and 2017, respectively, research and development expense was $37.7
million and $10.4 million. The increase in research and development
expense was primarily due to increased activities in connection with our
TRC101 clinical development program, resulting in increased clinical
development costs and increased personnel and related costs.

General and administrative expense was $4.2 million and $2.4 million for
the three months ended June 30, 2018 and 2017, respectively. The
increase in general and administrative expense was primarily due to
increased administrative costs supporting the increased activities in
connection with our TRC101 clinical development program, including
increased personnel and related costs and other general and
administrative expenses. For the six months ended June 30, 2018 and
2017, respectively, general and administrative expense was $7.7 million
and $5.2 million. The increase in general and administrative expense was
primarily due to increased administrative costs supporting the increased
activities in connection with our TRC101 clinical development program,
including increased personnel and related costs.

Net losses were $25.4 million (non-GAAP net loss of $24.4 million) and
$7.7 million (non-GAAP net loss of $6.7 million) for the three months
ended June 30, 2018 and 2017, respectively, and $45.9 million (non-GAAP
net loss of $44.3 million) and $9.9 million (non-GAAP net loss of $15.2
million) for the six months ended June 30, 2018 and 2017, respectively.
Net loss per basic and diluted share is based on a weighted-average
number of shares outstanding prior to the completion of our IPO on July
2, 2018 and was $10.89 and $3.60 for the three months ended June 30,
2018 and 2017, respectively, and $19.91 and $4.75 for the six months
ended June 30, 2018, and 2017, respectively. The effect of the
13,455,000 shares of common stock issued at the consummation of our IPO
along with the conversion of our convertible preferred stock into
26,187,321 shares of common stock, was not considered in the net loss
per basic and diluted share calculation at June 30, 2018 since the IPO
consummated on July 2, 2018. Applying the number of outstanding shares
on July 2, 2018, following the consummation of Tricida's IPO, net loss
per basic and diluted share would be $0.60 and $1.09 for the three and
six months ended June 30, 2018, respectively. This additional
information regarding net loss per share is provided to investors to
enable analysis of our net loss per share based on the preferred stock
conversion and the additional issuance of common shares from the IPO
using the if converted method as of the beginning of the first period
presented or the original date of issuance, if later.

As of June 30, 2018, cash, cash equivalents and short-term investments
were $55.3 million, which does not include $237.7 million of proceeds
from our IPO, net of underwriting discounts and commissions related to
the offering.

Today's Conference Call and Webcast

Tricida will host a conference call today at 5:00 pm Eastern Time to
discuss its financial results and provide a general business update.
Please access the Tricida Conference Call as follows:

Tricida Second Quarter 2018 Conference Call

5:00 pm Eastern Time Today

 

Website:

 

IR.Tricida.com

Dial-in:

(877) 377-5478

International: (629) 228-0740

Conference ID:

3097326

 

A replay of the webcast will be available on the Investor Relations page
of Tricida's website approximately two hours following the completion of
the call and will be available for up to 90 days following the
presentation.

About Tricida

Tricida, Inc. is a pharmaceutical company focused on the development and
commercialization of TRC101, a non-absorbed, orally-administered polymer
designed to treat metabolic acidosis in patients with CKD. Metabolic
acidosis is a condition commonly caused by CKD that is believed to
accelerate the progression of kidney deterioration. Tricida has
successfully completed a pivotal Phase 3, double-blind,
placebo-controlled trial of TRC101 in CKD patients with metabolic
acidosis. The results of this Phase 3 trial, along with results from a
successful double-blind, randomized, placebo-controlled Phase 1/2 trial
and an ongoing safety extension trial, TRCA-301E, are intended to serve
as the basis for the submission of an NDA for TRC101 under the FDA's
Accelerated Approval Program.

For more information about Tricida, please visit www.Tricida.com.

Cautionary Note on Forward-Looking Statements

This press release includes forward-looking statements, including for
example, all of the statements under the heading "Upcoming Events and
Milestones" and other statements about our ability to submit an NDA for
TRC101 under the FDA's Accelerated Approval Program. Forward‐looking
statements involve known and unknown risks, uncertainties, assumptions
and other factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the forward‐looking
statements. These risks and uncertainties include, among others, that we
may not be able to participate in upcoming events or achieve upcoming
milestones, the cost, timing and results of clinical trials and other
studies; that many drug candidates that have completed Phase 3 trials do
not become approved drugs on a timely or cost effective basis or at all;
there can be no assurance that the FDA would approve an NDA under the
Accelerated Approval Program, or at all, and even if approval for a drug
is obtained, there can be no assurance that it will be adopted in the
market or accepted as a benefit to patients and healthcare providers;
possible safety and efficacy concerns; and that we completely rely on
third-party suppliers to manufacture our clinical drug supply. The
forward-looking statements contained in this press release reflect
Tricida's current views with respect to future events, and Tricida does
not undertake and specifically disclaims any obligation to update any
forward-looking statements.

 
Tricida, Inc.
 
Condensed Balance Sheets
(Unaudited)
(In thousands)
 
 

    June 30,    

 

December 31,

2018 2017
 
Assets
Current assets:
Cash and cash equivalents $ 5,788 $ 9,774
Short-term investments 49,518 57,740
Prepaid expenses and other current assets 1,550   1,910  
Total current assets 56,856 69,424
Property and equipment, net 1,303 1,150
Deferred offering costs 6,468    
Total assets $ 64,627   $ 70,574  
 
Liabilities, convertible preferred stock and stockholders' deficit
Current liabilities:
Accounts payable $ 11,436 $ 3,861
Accrued expenses and other current liabilities 14,134   7,361  
Total current liabilities 25,570 11,222
 
Term loan 23,317
Other long-term liabilities 483   323  
Total liabilities 49,370   11,545  
 
Convertible preferred stock 147,528 147,070
Stockholders' deficit:
Common stock 2 2
Additional paid-in capital 3,005 1,356
Accumulated other comprehensive loss (26 ) (13 )
Accumulated deficit (135,252 ) (89,386 )
Total stockholders' deficit (132,271 ) (88,041 )
Total liabilities, convertible preferred stock and stockholders'
deficit
$ 64,627   $ 70,574  
 

Tricida, Inc.

 
Condensed Statements of Operations and Comprehensive Loss
(Unaudited)
(In thousands, except share and per share amounts)
 
  Three months ended   Six months ended
June 30, June 30,
2018   2017 2018   2017
Operating expenses:
Research and development $ 21,034 $ 4,567 $ 37,667 $ 10,411
General and administrative 4,245   2,355   7,710   5,180  
Total operating expenses 25,279   6,922   45,377   15,591  
Loss from operations (25,279 ) (6,922 ) (45,377 ) (15,591 )
Change in fair value—preferred stock tranche obligation (813 ) 5,649
Other income (expense), net 827 11 740 11
Interest expense (910 ) (2 ) (1,229 ) (4 )
Net loss (25,362 ) (7,726 ) (45,866 ) (9,935 )
Other comprehensive loss:
Net unrealized gain (loss) on marketable securities, net of tax 41   (9 ) (13 ) (10 )
Comprehensive loss $ (25,321 ) $ (7,735 ) $ (45,879 ) $ (9,945 )
Net loss per share, basic and diluted $ (10.89 ) $ (3.60 ) $ (19.91 ) $ (4.75 )
Weighted-average number of shares outstanding, basic and diluted 2,329,085   2,145,965   2,304,087   2,092,993  
 
Pro forma net loss per share, basic and diluted * $ (0.60 )   $ (1.09 )  
Pro forma weighted-average number of shares outstanding, basic and
diluted *
41,949,686     41,923,503    
 
* Pro forma net loss per share, basic and diluted, and pro forma
weighted-average number of shares outstanding, basic and diluted,
are provided to investors to enable analysis of our net loss per
share based on the preferred stock conversion and the additional
issuance of common shares from the IPO using the if converted method
as of the beginning of the first period presented or the original
date of issuance, if later.
 

Tricida, Inc.

 
GAAP to non-GAAP reconciliations
(Unaudited)
(In thousands)
 

A reconciliation between net loss on a GAAP basis and on a
non-GAAP basis is as follows:

 
  Three months ended   Six months ended
June 30, June 30,
2018   2017 2018   2017
GAAP net loss, as reported $ (25,362 ) $ (7,726 ) $ (45,866 ) $ (9,935 )
Adjustments:
Non-cash stock-based compensation expense 970

186

1,323

376

Non-cash debt offering costs 376 504
Mark-to-market adjustment on financial instruments (372 ) 813   (236 ) (5,649 )

Total adjustments

974  

999

  1,591  

(5,273

)
Non-GAAP net loss $ (24,388 ) $

(6,727

) $ (44,275 ) $

(15,208

)

Use of Non-GAAP Financial Measures

We supplement our consolidated financial statements presented on a GAAP
basis by providing additional measures which may be considered
"non-GAAP" financial measures under applicable Securities and Exchange
Commission rules. We believe that the disclosure of these non-GAAP
financial measures provides our investors with additional information
that reflects the amounts and financial basis upon which our management
assesses and operates our business. These non-GAAP financial measures
are not in accordance with generally accepted accounting principles and
should not be viewed in isolation or as a substitute for reported, or
GAAP, net income, and diluted earnings per share, and are not a
substitute for, or superior to, measures of financial performance
performed in conformity with GAAP.

"Non-GAAP net income" is not based on any standardized methodology
prescribed by GAAP and represent GAAP net income adjusted to exclude (1)
stock-based compensation expense, (2) non-cash interest expense related
to Tricida's term loan offering costs and (3) mark-to market adjustments
related to financial instruments held (which include preferred stock
tranche obligations, warrants and derivatives) within our reconciliation
of our GAAP to Non-GAAP net income. Non-GAAP financial measures used by
Tricida may be calculated differently from, and therefore may not be
comparable to, non-GAAP measures used by other companies.

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