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Concert Pharmaceuticals Reports 2019 Financial Results and Provides Update on Clinical Programs

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CTP-543 Phase 3 Program for Treatment of Alopecia Areata Expected to Begin in 2020

New CTP-543 Patent Covers Pharmaceutical Compositions of CTP-543 and Methods of Treating Alopecia Areata with CTP-543

CTP-692 Phase 2 Topline Results as Adjunctive Treatment for Schizophrenia Expected by Year End 2020

Conference Call Scheduled Today at 8:30 a.m. ET

Concert Pharmaceuticals, Inc. (NASDAQ:CNCE) today reported financial results for the year ended December 31, 2019 and provided an update on its product pipeline and corporate activities.

"Our 2019 accomplishments provide a strong foundation for an exciting year at Concert in 2020. Both of our proprietary programs, CTP-543 for alopecia areata and CTP-692 for schizophrenia, exemplify great examples of innovative clinical compounds that originated from Concert's technology and that have the potential to create meaningful impact for patients," stated Roger Tung, Ph.D., President and Chief Executive Officer of Concert Pharmaceuticals. "The robust results from our Phase 2 dose-ranging trial of CTP-543 for the treatment of alopecia areata support advancing the drug candidate into pivotal testing with a potential best-in-class product profile for this serious disease. With the recent initiation of the Phase 2 dose-ranging trial of CTP-692 in patients with schizophrenia, we expect to report topline data by year end that may enable us to advance the program directly into pivotal evaluation in 2021."

Recent Business Highlights and Upcoming Milestones

CTP-543: An Investigational Treatment for Moderate-to-Severe Alopecia Areata

  • New CTP-543 Patent Provides Protection until 2037. In February 2020, the U.S. Patent and Trademark Office issued U.S. Patent No. 10,561,659 ('659 patent) related to CTP-543. The patent, which will expire in 2037, covers pharmaceutical compositions of CTP-543 and methods of treating alopecia areata with CTP-543. Importantly, this patent covers the clinical doses of CTP-543 that produced the robust results observed in the Company's Phase 2 dose-ranging trial for the treatment of alopecia areata and will be Orange Book eligible on approval of CTP-543.
  • Federal Circuit Granted Concert's Motion to Vacate and Remand PTAB Decision Involving CTP-543. The U.S. Court of Appeals for the Federal Circuit (CAFC) granted the Company's motion to vacate and remand the Patent Trial and Appeal Board (PTAB) decision to invalidate U.S. Patent No. 9,249,149 ('149 patent). Concert's motion was made in light of the recent CAFC ruling on the Constitution's Appointments Clause (Arthrex, Inc. v. Smith & Nephew, Inc., No. 18-2140). The case will now be remanded for reconsideration by a new panel of PTAB judges. The PTAB proceeding is limited to the '149 patent and has no bearing on the '659 patent, which provides independent protection of CTP-543.
  • CTP-543 Dose Regimen Trial Successfully Completed. In the fourth quarter of 2019, the Company completed an open label trial evaluating 8 mg twice-daily compared to 16 mg once-daily dosing of CTP‑543 in patients with moderate-to-severe alopecia areata. Results in the 8 mg twice-daily arm were consistent with the previously-reported 8 mg twice-daily results from the Company's Phase 2 dose-ranging trial of CTP-543. Treatment with CTP-543 was generally well tolerated in both arms of the study. All but one of the patients who completed this trial elected to continue in an open-label long-term extension study. Based on the results observed, the twice-daily regimen is preferred and will be utilized in the future efficacy trials in the CTP-543 clinical development program.
  • CTP-543 Phase 2 Data Presented in Late-Breaking News Session at EADV 2019. In October 2019, Phase 2 dose-ranging data of CTP-543 in patients with moderate-to-severe alopecia areata were presented in the late-breaking news session at the European Academy of Dermatology and Venereology (EADV) Annual Congress. The presentation highlighted the Phase 2 results in which CTP-543 met the primary efficacy endpoint for the 8 mg twice-daily and 12 mg twice-daily doses with greater hair regrowth on the scalp compared to placebo. In the study, treatment with CTP-543 was generally well tolerated.
  • CTP-543 Phase 2 Results Selected for Late-Breaking Oral Presentation at AAD. Results from the Company's Phase 2 dose-ranging trial of CTP-543 in alopecia areata will be presented during an oral presentation at the Late-Breaking Research Program at the American Academy of Dermatology (AAD) Annual Meeting on March 21, 2020, in Denver, CO. This late-breaking presentation will include new analyses from the Company's completed Phase 2 dose-ranging study.
  • End of Phase 2 Meeting and Phase 3 Initiation Expected in 2020. Data from the Company's Phase 2 trials will support an end of Phase 2 meeting with the U.S. Food and Drug Administration (FDA) to review and discuss the Company's registration pathway for CTP-543 for the treatment of alopecia areata. The Company expects to meet with the FDA in the first quarter of 2020 and initiate Phase 3 testing of CTP-543 in the second half of 2020.

CTP-692: An Investigational Adjunctive Treatment for Schizophrenia

  • CTP-692 Phase 2 Trial Initiation. Following the successful completion of the CTP-692 Phase 1 program, the Company advanced CTP-692 into a Phase 2 dose-ranging trial as an adjunctive treatment in patients with schizophrenia in December 2019. The trial is designed to support advancement into pivotal evaluation. The Company expects to report topline Phase 2 data by year end 2020.
  • CTP-692 Webcast with Key Opinion Leader. In November 2019, the Company hosted a webcast for investors to highlight the CTP-692 program. The event included a presentation on mechanism and the need for new treatments in schizophrenia by Dr. Joseph Coyle, Director, Laboratory for Psychiatric and Molecular Neuroscience at McLean Hospital and Harvard Medical School. The replay of the event, with slides, can be accessed on the Events & Presentations page of the Investors section of Concert's corporate website.

Full Year 2019 Financial Results

  • Cash and Investment Position. Cash, cash equivalents and investments as of December 31, 2019 totaled $106.4 million as compared to $153.3 million as of December 31, 2018. In the first quarter of 2020, Concert announced the closing of a public offering of common stock and pre-funded warrants, raising net proceeds of $70.3 million, before offering expenses. Under its current operating plan, the Company expects its cash, cash equivalents and investments to fund the Company into the second half of 2021.
  • Revenue. Revenue was $1.1 million for the year ended December 31, 2019, compared to $10.5 million for the year ended December 31, 2018. Revenue recognized in 2019 was primarily from an upfront payment from a license agreement with Cipla Technologies regarding CTP-354, a novel GABAA receptor subtype-selective modulator. Revenue recognized in 2018 consisted of non-cash consideration received from Processa Pharmaceuticals under a licensing agreement whereby Processa has worldwide rights to develop and commercialize CTP-499, a deuterated analog of an active metabolite of pentoxifylline.
  • R&D Expenses. Research and development expenses were $59.8 million for the year ended December 31, 2019, compared to $43.1 million for the year ended December 31, 2018, an increase of $16.7 million. The increase in expenses in 2019 primarily related to external expenses to support Phase 2 development of CTP-543 as well as Phase 1 clinical trials and manufacturing costs to support the continued development of CTP-692 into Phase 2 testing.
  • G&A Expenses. General and administrative expenses were $20.3 million for the year ended December 31, 2019, compared to $22.9 million for the year ended December 31, 2018, a decrease of $2.6 million. Decreases in legal and employee-related expenses were partially offset by an increase in audit fees.
  • Net Loss. For the year ended December 31, 2019, net loss attributable to stockholders was $78.2 million, or $3.29 per share, as compared to net loss attributable to stockholders of $56.0 million, or $2.40 per share, for the year ended December 31, 2018.

Conference Call and Webcast

The Company will host a conference call and webcast today at 8:30 a.m. ET to provide an update on the Company and discuss full year 2019 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 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)

(unaudited)

 

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2019

2018

2019

2018

Revenue:

 

 

 

 

 

 

 

 

License and research and development revenue

 

$

13

 

 

$

13

 

 

$

1,077

 

 

$

10,505

 

Total revenue

 

 

13

 

 

 

13

 

 

 

1,077

 

 

 

10,505

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

16,019

 

 

 

14,560

 

 

 

59,816

 

 

 

43,149

 

General and administrative

 

 

4,947

 

 

 

5,516

 

 

 

20,276

 

 

 

22,940

 

Total operating expenses

 

 

20,966

 

 

 

20,076

 

 

 

80,092

 

 

 

66,089

 

Loss from operations

 

 

(20,953

)

 

 

(20,063

)

 

 

(79,015

)

 

 

(55,584

)

Interest and other income (expense), net

 

 

466

 

 

 

(771

)

 

 

849

 

 

 

(127

)

Loss before income taxes

 

 

(20,487

)

 

 

(20,834

)

 

 

(78,166

)

 

 

(55,711

)

Provision for income taxes

 

 

 

15

 

 

 

 

313

 

Net loss

 

$

(20,487

)

 

$

(20,849

)

 

$

(78,166

)

 

$

(56,024

)

 

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders - basic and diluted

 

 

(20,487

)

 

 

(20,849

)

 

 

(78,166

)

 

 

(56,024

)

 

 

 

 

 

 

 

 

 

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

 

$

(0.86

)

 

$

(0.89

)

 

$

(3.29

)

 

$

(2.40

)

 

 

 

 

 

 

 

 

 

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

 

 

23,848

 

 

 

23,432

 

 

 

23,740

 

 

 

23,370

 

Concert Pharmaceuticals, Inc.

Summary Balance Sheet Data

(in thousands)

(unaudited)

 

 

 

December 31,

2019

 

December 31,

2018

Cash and cash equivalents

 

$

53,043

 

$

17,770

Investments, available for sale

 

 

53,395

 

 

135,544

Working capital

 

 

99,587

 

 

171,400

Total assets

 

 

137,471

 

 

192,547

Total stockholders' equity

 

 

101,457

 

 

167,740

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's pipeline of innovative medicines targets autoimmune 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, among others, statements about our expectations on the progress of clinical development of CTP-543 and CTP-692, the timing of availability of clinical trial data and the sufficiency of our cash, cash equivalents and investments to fund our operations, and any other statements containing the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "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, expectations with respect to the protection of our intellectual property afforded by our patents and other factors discussed in the "Risk Factors" section of our most recent Annual Report on Form 10-K or 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.

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