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AmpliPhi Biosciences Reports Second Quarter 2018 Financial Results and Business Highlights

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  • 19 patients at 7 hospitals, with serious or life-threatening
    infections not responding to antibiotics, have been treated with
    AB-SA01 or AB-PA01 under single-patient expanded access program
  • AmpliPhi has scheduled meetings with the FDA in August and
    September to discuss the regulatory path forward for AB-SA01 and
    AB-PA01

AmpliPhi Biosciences Corporation (NYSE:APHB), a
clinical-stage biotechnology company focused on precisely targeted
bacteriophage therapeutics for antibiotic-resistant infections, today
announced financial results for the second quarter ended June 30, 2018.
AmpliPhi Biosciences will not be conducting a conference call in
conjunction with this financial release.

"I'm delighted to report that we have made substantial progress with our
expanded access program for AB-SA01 and AB-PA01," said Paul C. Grint,
M.D., CEO of AmpliPhi Biosciences. "As of today, we have treated a total
of nineteen patients at seven different hospitals and we are encouraged
by the results. We are analyzing the data and plan to share a more
detailed update in the near future. We look forward to our two meetings
with the FDA over the next two months, the goal of which is to obtain
important clinical development feedback for Phase 2 and potentially
pivotal trials in one or more indications."

Recent Business Highlights

  • Two meetings are scheduled with the FDA for August and September to
    discuss Phase 2 trial plans and the path forward to regulatory
    approval for investigational drug candidates AB-SA01, targeting Staphylococcus
    aureus
    (S. aureus), and AB-PA01, targeting Pseudomonas
    aeruginosa
    (P. aeruginosa).
  • North America's first Center for Innovative Phage Applications and
    Therapeutics (IPATH) was launched by UC San Diego (UCSD) in June 2018
    with AmpliPhi as an industry partner. As part of the IPATH launch,
    UCSD announced the successful case of a patient treated with
    AmpliPhi's AB-SA01. Prior to phage therapy, the patient had a
    persistent S. aureus ventricular assist device infection that
    was not eradicated for three years despite antibiotic treatment.
  • Presented four case studies of critically ill patients suffering from
    severe S. aureus bloodstream infections, who received treatment
    with AB-SA01, at the American Society for Microbiology (ASM) Microbe
    2018 annual meeting in Atlanta in June 2018. In all cases, standard
    medical and surgical therapy was considered inadequate before starting
    bacteriophage therapy. AB-SA01 was well-tolerated and bacterial
    elimination was demonstrated in three out of four patients.
  • Presented a successful case study of a patient with cystic fibrosis
    (CF), suffering from recurrent multi-drug resistant (MDR) P.
    aeruginosa
    pneumonia and multiple CF exacerbations, who received
    treatment with AB-PA01, at the 41st European Cystic Fibrosis
    Conference in Belgrade, Serbia, in June 2018. Prior to treatment with
    AB-PA01, the patient received multiple courses of antibiotics,
    including colistin, but due to renal failure, colistin administration
    was discontinued. Treatment with AB-PA01 was well tolerated and the
    patient's infection resolved. No recurrence of pneumonia or CF
    exacerbation was reported during the two-month follow-up period after
    the completion of treatment with AB-PA01. The patient's renal failure
    resolved.
  • Presented a successful case study of a lung transplant recipient
    suffering from recurrent episodes of MDR P. aeruginosa
    pneumonia who received treatment with bacteriophage therapeutics,
    including AB-PA01, at the International Society of Heart and Lung
    Transplant Annual Meeting in Nice, France, in April 2018. The patient
    clinically responded to bacteriophage and antibiotic therapy with
    resolution of pneumonia and improved respiratory status.
  • Utilized the Therapeutic Development Services funded by the National
    Institute of Allergy and Infectious Disease (NIAID), part of the
    National Institutes of Health (NIH), to conduct further preclinical
    studies of AB-SA01. The Therapeutic Development Services program funds
    the provision of preclinical services for selected companies and
    researchers in order to advance development of promising
    interventional agents.

Second Quarter and Six Months Ended June 30, 2018 Financial Results

  • Research and development (R&D) expenses for the second quarter of 2018
    were $1.7 million compared to $1.1 million for the second quarter of
    2017, primarily attributable to a $0.2 million increase in
    professional and consulting fees and a $0.2 million increase in
    clinical costs.
  • R&D expenses for the six months ended June 30, 2018 increased by $0.6
    million to $3.2 million from $2.6 million for the six months ended
    June 30, 2017, primarily due to an increase in clinical costs.
  • General and administrative (G&A) expenses were $1.4 million for the
    second quarter of 2018 compared to $2.8 million for the second quarter
    of 2017. The decrease was primarily due to lower payroll-related
    costs, lower legal and professional fees, as well as a $0.6 million
    decrease in non-cash stock-based compensation and other non-cash
    charges.
  • G&A expenses for the first six months of 2018 decreased by $1.7
    million to $3.0 million from $4.7 million for the first six months of
    2017. The decrease was primarily attributable to a decrease in the
    items described above for the second quarter comparison.
  • Net cash used in operating activities for the six months ended June
    30, 2018 was $5.7 million compared to $6.2 million for the six months
    ended June 30, 2017.
  • Cash and cash equivalents as of June 30, 2018 totaled $5.8 million.
  • In July 2018, the Company received $1.2 million of tax rebate
    incentive payments in cash from the Australian tax authority. The
    incentive payments are based on R&D activities in Australia in 2017.
  • As of August 6, 2018, there were 16.5 million shares of common stock
    outstanding.

About AmpliPhi Biosciences

AmpliPhi Biosciences Corporation is a clinical-stage biotechnology
company focused on precisely targeted bacteriophage therapeutics for
antibiotic-resistant infections using its proprietary
bacteriophage-based technology. AmpliPhi's lead product candidates,
AB-SA01 and AB-PA01, target multidrug-resistant Staphylococcus aureus
and Pseudomonas aeruginosa, which are included on the WHO's 2017
Priority Pathogens List. Phage therapeutics are uniquely positioned to
address the threat of antibiotic-resistance as they can be precisely
targeted to kill select bacteria, have a differentiated mechanism of
action, can penetrate and disrupt biofilms (a common bacterial defense
mechanism against antibiotics), are potentially synergistic with
antibiotics and have been shown to restore antibiotic sensitivity to
drug-resistant bacteria.

Forward Looking Statements

Statements in this press release that are not statements of historical
fact are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements include, without limitation, statements regarding: the
potential benefits of phage therapy; the potential use of bacteriophages
to treat bacterial infections, including infections that do not respond
to antibiotics or are associated with biofilms; and AmpliPhi's scheduled
meetings with the FDA in August and September 2018 and the anticipated
benefits therefrom. Words such as "believe," "anticipate," "plan,"
"expect," "intend," "will," "may," "goal," "potential" and similar
expressions are intended to identify forward-looking statements, though
not all forward-looking statements necessarily contain these identifying
words. Among the factors that could cause actual results to differ
materially from those indicated in these forward-looking statements are
risks and uncertainties associated with bacteriophage product candidate
development, both generally and specifically through expanded access
regulations, AmpliPhi's financial condition, and other risks and
uncertainties described in AmpliPhi's Annual Report on Form 10-K for the
year ended December 31, 2017, as filed with the Securities and Exchange
Commission (SEC), and AmpliPhi's subsequent filings with the SEC. You
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release. All
forward-looking statements are qualified in their entirety by this
cautionary statement, and AmpliPhi undertakes no obligation to revise or
update any forward-looking statements to reflect events or circumstances
after the date of this press release.

       
AmpliPhi Biosciences Corporation
Condensed Consolidated Balance Sheets
 
June 30, 2018 December 31, 2017
(Unaudited)
Assets
Cash and cash equivalents $ 5,798,000 $ 5,132,000
Prepaids and other current assets   322,000   253,000
Total current assets 6,120,000 5,385,000
Property and equipment, net 678,000 816,000
Intangible assets, net   4,922,000   4,937,000
Total assets $ 11,720,000 $ 11,138,000
 
Liabilities and stockholders' equity
Total current liabilities $ 2,049,000 $ 1,968,000
Derivative liabilities 185,000 292,000
Deferred tax liability   1,147,000   1,147,000
Total liabilities 3,381,000 3,407,000
 
Stockholders' equity   8,339,000   7,731,000
Total liabilities and stockholders' equity $ 11,720,000 $ 11,138,000
 
           
AmpliPhi Biosciences Corporation
Condensed Consolidated Statements of Operations
           
Three Months Ended June 30, Six Months Ended June 30,
  2018     2017     2018     2017  
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
 
Revenue $ - $ 28,000 $ - $ 57,000
Operating expenses:
Research and development 1,692,000 1,130,000 3,156,000 2,620,000
General and administrative 1,360,000 2,784,000 2,951,000 4,682,000
Impairment charges   -     5,800,000     -     5,800,000  
Total operating expenses   3,052,000     9,714,000     6,107,000     13,102,000  
Loss from operations   (3,052,000 )   (9,686,000 )   (6,107,000 )   (13,045,000 )
Other income (expense):
Change in fair value of derivative liabilities 2,000 1,920,000 (77,000 ) 2,034,000
Other income, net   -     3,000     -     2,000  
Total other income (expense), net   2,000     1,923,000     (77,000 )   2,036,000  
Loss before income taxes (3,050,000 ) (7,763,000 ) (6,184,000 ) (11,009,000 )
Income tax benefit   -     1,302,000     -     1,302,000  
Net loss $ (3,050,000 ) $ (6,461,000 ) $ (6,184,000 ) $ (9,707,000 )
Net loss per share, basic $ (0.19 ) $ (1.21 ) $ (0.42 ) $ (2.76 )
Weighted average shares outstanding, basic   16,464,675     5,350,930     14,890,164     3,514,181  
Net loss per share, diluted $ (0.19 ) $ (1.46 ) $ (0.42 ) $ (3.09 )
Weighted average shares outstanding, diluted   16,464,675     5,519,895     14,890,164     3,652,501  
 
       
AmpliPhi Biosciences Corporation
Condensed Consolidated Statement of Cash Flows
 
Six Months Ended June 30,
  2018     2017  
(Unaudited) (Unaudited)
Operating activities:
Net loss $ (6,184,000 ) $ (9,707,000 )
Adjustments required to reconcile net loss to net cash used in
operating activities:
Change in fair value of derivative liabilities 77,000 (2,034,000 )
Impairment charges - 5,800,000
Stock-based compensation 246,000 470,000
Deferred taxes - (1,302,000 )
Depreciation and amortization 193,000 185,000
Other non-cash adjustments, net - 18,000
Changes in operating assets and liabilities, net   (41,000 )   340,000  
Net cash used in operating activities   (5,709,000 )   (6,230,000 )
Investing activities:
Purchases of property and equipment   (31,000 )   (7,000 )
Net cash used in investing activities   (31,000 )   (7,000 )
Financing activities:
Proceeds from sale of common stock, net of offering costs 6,203,000 9,690,000
Other financing activities   203,000     (202,000 )
Net cash provided by financing activities   6,406,000     9,488,000  
Net increase in cash and cash equivalents 666,000 3,251,000
Cash and cash equivalents, beginning of period   5,132,000     5,711,000  
Cash and cash equivalents, end of period $ 5,798,000   $ 8,962,000  
 

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