Pfenex Inc. (NYSE American: PFNX) is a development and licensing
biotechnology company focused on leveraging its Pfēnex Expression
Technology® to develop and improve protein therapies for unmet
patient needs. Using the patented Pfēnex Expression Technology
platform, the Company has developed the FDA-approved PF708 product
indicated for the treatment of osteoporosis in certain patients at
high risk of fracture and created an advanced pipeline of
therapeutic equivalents, biologics and vaccines. Today Pfenex Inc.
reported financial results for the third quarter ended September
30, 2019 and provided a business update.
“The Pfenex team is very excited and proud of our FDA approval
for PF708, the first approved drug developed in our proprietary
platform. It signifies an important milestone for the company, and
we believe sets us up for continued success. In addition, we
continue to execute on our plan and achieved several key milestones
in the third quarter, including successful completion of the PF708
comparative use HF study, supporting Alvogen in advancing PF708
regulatory and commercial activities outside of the U.S., and
process development activities for PF745, a recombinant
crisantaspase with half-life extension technology under our Jazz
collaboration. As a result, we earned $13.5 million in milestone
payments during the third quarter of 2019. Most importantly, all of
these milestones continue to validate the company’s unique
expression technology, as well as our ability to execute
successfully,” said Eef Schimmelpennink, Chief Executive Officer of
Pfenex.
Business Review and Update
FDA-approved PF708 product and proposed therapeutic
equivalent to Forteo
On October 7, 2019, Pfenex announced that the U.S. Food and Drug
Administration (FDA) approved the new drug application (NDA) for
PF708 submitted under the 505(b)(2) regulatory pathway, with
Forteo® (teriparatide injection) as the reference drug. Like
Forteo, the FDA-approved PF708 product is indicated for the
treatment of osteoporosis in certain patients at high risk of
fracture. Pfenex believes PF708 has the potential to significantly
enhance patient access to an important therapy as a cost-effective
alternative to Forteo, which had $1.6 billion in global sales in
2018. In October, Pfenex earned a $2.5 million milestone
payment from Alvogen for U.S. approval of PF708 and is eligible to
earn another $20 million milestone payment if the FDA grants an “A”
therapeutic equivalence rating to PF708.
Pfenex is seeking FDA designation of the recently-approved PF708
product as therapeutically equivalent (“A” rated) to Forteo, which
would permit PF708 to be automatically substituted for Forteo in
many states. To further support an “A” rating, Pfenex recently
submitted a comparative use human factors study report, as
requested by FDA. Pfenex believes that this completes the
information package required by the FDA to evaluate the therapeutic
equivalence of PF708. Pfenex currently expects its U.S. commercial
partner, Alvogen, to launch PF708 upon an FDA decision on the
therapeutic equivalence rating.
Alvogen, which also has exclusive development and
commercialization rights for PF708 in the European Union (EU),
Middle East and North Africa (MENA) and the Rest-of-World
territories (except those licensed to NT Pharma), has in the third
quarter entered into additional exclusive commercialization
agreements for PF708 with PharmBio Korea in South Korea, JAMP
Pharma in Canada and Kamada Ltd. in Israel. Furthermore, Alvogen’s
partner in the MENA region, SAJA, submitted a Marketing
Authorization Application (MAA) to the Kingdom of Saudi Arabia's
Saudi Food and Drug Authority (SFDA). Additionally, the accepted
MAA for PF708 under review by the European Medicines Agency (EMA)
continues to make progress, and Pfenex believes PF708 could receive
regulatory approval in the EU as early as the second half of 2020,
subject to granting of a marketing authorization by the European
Commission under the EU centralized procedure and other factors. If
approved, PF708 would receive marketing authorization in all 28
member states of the EU, as well as in Iceland, Liechtenstein and
Norway and be commercialized by Alvogen’s partner Theramex. The MAA
for PF708 was submitted by Alvogen to the EMA as a biosimilar to
Forsteo®, which achieved $289 million sales in the E.U. and $1.6
billion in global product sales in 2018.
Jazz Collaboration Agreement
Pfenex announced in the third quarter that it earned an $11
million development milestone payment under its development and
license agreement with Jazz Pharmaceuticals (Jazz) and received the
milestone payment in October 2019. The milestone is associated with
process development activities for PF745 (JZP-341), a long-acting
Erwinia asparaginase. Jazz announced in its third quarter earnings
that they expect to initiate a Phase 2/3 pivotal study for PF743
(JZP-458), a recombinant Erwinia asparaginase, later this year and
anticipates completing enrollment by fourth quarter 2020. The study
is expected to enroll approximately 100 patients with a planned
interim analysis at approximately 50 patients. Jazz also
announced receiving fast track designation for PF743.
Under the terms of the development and license agreement, Pfenex
is eligible to receive an aggregate total of up to $224.5 million
in development and sales milestone fees, of which $177.5 million is
still eligible to be received by Pfenex. Of this $177.5 million,
$18.5 million are development milestones, $34 million are
regulatory milestones, and $125 million are sales milestones.
Pfenex is also eligible to receive tiered royalties on worldwide
sales of any products resulting from the collaboration.
CRM197
CRM197 is a non-toxic mutant of diphtheria toxin. It is a well
characterized protein and functions as a carrier for
polysaccharides and haptens, making them immunogenic. CRM197 is
currently being used by Pfenex’s vaccine development focused
pharmaceutical partners, including in multiple Phase 3 clinical
studies by Merck and the Serum Institute of India Private Ltd.
(SIIPL) for such diseases as pneumococcal and meningitis bacterial
infections.
Merck is using Pfenex’s CRM197 in its vaccines including PCV-15
(V114), an investigational 15-valent polyvalent conjugate vaccine
for the prevention of pneumococcal disease, currently in 15 Phase 3
studies. Merck stated in their second quarter 2019 earnings results
that Phase 3 data from their PCV-15 comprehensive development
program may become available by the end of 2019.
SIIPL is using Pfenex’s CRM197 in multiple programs. SIIPL
announced that it expects that its most advanced product,
Pneumosil®, could complete the World Health Organization (WHO)
prequalification process and subsequently be launched in the first
quarter of 2020. A second product being developed by
SIIPL is a thermostable Pentavalent Meningococcal Conjugate Vaccine
for which SIIPL initiated a Phase 3 study in the third quarter of
2019. Both of these products are targeting markets in
developing countries. Pfenex is eligible to receive a tiered
royalty payment based upon net sales for both products, subject to
regulatory approval.
Arcellx - sparX Protein Development
Agreement
In August, Pfenex announced its development, evaluation and
license agreement with Arcellx which provides access to the Pfēnex
Expression Technology platform to advance Arcellx’s proprietary
sparX proteins that activate, silence and reprogram
antigen-receptor complex T cell-based therapies. Under the terms of
the agreement, Pfenex is eligible to receive development funding in
addition to development, regulatory and commercial milestones
ranging from $2.6 million to $18 million for each product
incorporating a sparX protein expressed using the Pfēnex Expression
Technology, as well as royalties on worldwide sales of any such
products.
Board of Directors and Scientific Advisory
Board
In August, Pfenex welcomed Dr. Lorianne Masuoka to the Pfenex
Board of Directors. Her appointment further aligns the Board with
the Company’s strategy to build a new R&D capability and Pfenex
believes Dr. Masuoka’s extensive experience successfully expanding
the development pipelines of several biotech companies makes her a
valuable counselor to the Pfenex executive team. Dr. Masuoka has
more than 20 years of experience building and expanding high value
pipelines in the biopharmaceutical industry that have resulted in
drug approvals and strategic alliances. She is a board-certified
neurologist who has successfully created and overseen high
performing teams to lead the clinical development of new medicines,
with a focus in neurology, CNS, and pain. Dr. Masuoka served as
chief medical officer of InVivo Therapeutics, Cubist
Pharmaceuticals (now Merck), and Nektar Therapeutics where, as a
member of executive management, she oversaw and managed teams in
the areas of clinical research, drug safety, biostatistics and data
management, regulatory affairs, reimbursement and clinical
operations.
In September, Pfenex announced the appointment of Steve Kay,
Ph.D., to its Scientific Advisory Board. Dr. Kay is a highly
regarded biologist who brings a wealth of research experience to
the Scientific Advisory Board and complements the existing board in
support of the Pfenex scientific strategy. Dr. Kay is one of the
world’s top experts on the genetics and genomics of circadian
rhythms. Having published more than 200 papers, he was named by
Thomson Reuters as one of “The World’s Most Influential Scientific
Minds” from 2014 to 2019. Dr. Kay currently serves as the
Director of the University of Southern California (USC) MESH
(Medicine, Engineering, Sciences, and Humanities) Academy, the
Director of the USC Michelson Center for Convergent Bioscience, and
is a Provost Professor of Neurology, Biomedical Engineering and
Biological Sciences at the Keck School of Medicine of USC.
Financial Highlights for the Third Quarter
2019
Total Revenue increased by $11.6 million, or
327%, to $15.2 million in the three-month period ended September
30, 2019, compared to $3.6 million in the same period in 2018. The
increase in revenue was primarily due to an $11 million development
milestone reached during the quarter related to the Jazz
collaboration agreement.
Cost of Revenue decreased by approximately $0.4
million, or (23%), to $1.1 million in the three- month period ended
September 30, 2019, compared to $1.5 million in the same period in
2018. The decrease was primarily due to the decreased activity
related to our BARDA program.
Research and development expenses decreased by
approximately $2.1 million, or (23%), to $6.9 million in the
three-month period ended September 30, 2019, compared to $9.0
million in same period in 2018. The decrease was primarily due to
the reduction of labor and subcontractor costs as the majority of
the work performed to support the PF708 NDA filing was completed in
late 2018.
Selling, general and administrative expenses
increased by approximately $0.3 million, or 8%, to
$4.1 million in the three-month period ended September 30,
2019, compared to $3.8 million in the same period in 2018. The
increases were primarily due to an increase in expenses related to
IP legal, consulting, and the expansion of business development
efforts.
Cash and cash equivalents as of September 30,
2019, were $32.7 million. This balance excludes $13.5 million of
development and regulatory milestones that were earned in September
and October 2019. Pfenex believes that its existing cash and
cash equivalents and cash inflow from operations will be sufficient
to meet Pfenex’s anticipated cash needs for at least the next 12
months.
Conference Call Information
The Pfenex management will host a conference call and webcast
today at 4:30 PM Eastern Time. Participants may access the call by
dialing 866-376-8058 (Domestic) or 412-542-4131 (International).
The call will also be webcast and can be accessed from the
Investors section of the Company’s website at www.pfenex.com or
https://www.webcaster4.com/Webcast/Page/1061/32120
A replay of the call will also be available through November
14th. Participants may access the replay of the call by dialing
877-344-7529 (Domestic) or 412-317-0088 (International) and
providing the conference ID number: 10136405.
About PF708
PF708 was approved in the U.S. under the 505(b)(2) regulatory
pathway, with Forteo® (teriparatide injection) as the reference
drug. The FDA-approved PF708 product is indicated for the
treatment of osteoporosis in certain patients at high risk of
fracture. Pursuant to the Development and License Agreement
with Alvogen, Alvogen is responsible for commercializing and
manufacturing PF708 in the U.S. and for fulfilling all regulatory
requirements associated with maintaining the PF708 NDA. Alvogen
also has exclusive rights to commercialize and manufacture PF708 in
the EU, certain countries in the Middle East and North Africa
(MENA), and the Rest of World (ROW) territories (the latter defined
as all countries outside of the EU, U.S. and MENA, excluding
Mainland China, Hong Kong, Singapore, Malaysia and Thailand). A
marketing authorization application for PF708 has been filed and
accepted with the EMA using the biosimilar pathway with Forsteo® as
the reference medicinal product and has been filed with the Kingdom
of Saudi Arabia's Saudi Food and Drug Authority (SFDA). Pursuant to
the Development and License Agreement with NT Pharma Group Company
Ltd. (NT Pharma) we granted an exclusive license to NT Pharma to
commercialize PF708 in Mainland China, Hong Kong, Singapore,
Malaysia and Thailand and a non-exclusive license to conduct
development activities in such territories with respect to PF708.
Forteo® and Forsteo® are approved and marketed by Eli Lilly
companies for the treatment of osteoporosis in certain patients
with a high risk of fracture. Forteo® and Forsteo® achieved $1.6
billion in global product sales in 2018.
About Pfenex Inc.
Pfenex is a development and licensing biotechnology company
focused on leveraging its Pfēnex Expression Technology® to develop
and improve protein therapies for unmet patient needs. Using the
patented Pfēnex Expression Technology platform, Pfenex has created
an advanced pipeline of potential therapeutic equivalents, and
vaccines. Pfenex’s lead product candidate is PF708, a therapeutic
equivalent candidate to Forteo® (teriparatide injection).
PF708 has been approved in the U.S. for the treatment of
osteoporosis in certain patients at high risk of fracture, and
marketing authorization applications are pending in other
jurisdictions. In addition, Pfenex is developing
hematology/oncology products in collaboration with Jazz
Pharmaceuticals, including PF743, a recombinant crisantaspase, and
PF745, a recombinant crisantaspase with half-life extension
technology. Pfenex also uses its Pfēnex Expression Technology
platform to produce CRM197, a diphtheria toxoid carrier protein
used in prophylactic and therapeutic vaccines.
Pfenex investors and others should note that Pfenex announces
material information to the public about Pfenex through a variety
of means, including its website (http://www.pfenex.com/), its
investor relations website (http://pfenex.investorroom.com/), press
releases, SEC filings, public conference calls, corporate Twitter
account (https://twitter.com/pfenex), Facebook page
(https://www.facebook.com/Pfenex-Inc-105908276167776/timeline/),
and LinkedIn page (https://www.linkedin.com/company/pfenex-inc) in
order to achieve broad, non-exclusionary distribution of
information to the public and to comply with its disclosure
obligations under Regulation FD. Pfenex encourages its investors
and others to monitor and review the information Pfenex makes
public in these locations as such information could be deemed to be
material information. Please note that this list may be updated
from time to time.
Cautionary Note Regarding Forward-Looking
Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements generally relate to future events
or Pfenex's future financial or operating performance. In some
cases, you can identify forward-looking statements because they
contain words such as “may,” “will,” “should,” “expects,” “plans,”
“anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential” or
“continue” or the negative of these words or other similar terms or
expressions that concern Pfenex's future expectations, strategy,
plans or intentions. Forward-looking statements in this press
release include, but are not limited to, statements regarding the
future potential of Pfenex's product candidates and the company in
general, including future plans to advance, develop, manufacture
and commercialize its product candidates; the timing of the
potential commercial launch of PF708 in the U.S.; Pfenex’s
expectations with respect to the sufficiency of its cash resources;
regulatory developments, including the potential timing of
marketing authorization in the E.U. for PF708; potential market
opportunities for PF708 and Pfenex’s other product candidates,
including the benefits of use of such products; Pfenex's
expectations regarding the timing and advancement of clinical
trials and studies and the types of future clinical trials and
studies for its product candidates and product candidates under the
Jazz collaboration; Pfenex's expectations with regard to future
milestones, royalty payments, and reimbursements from Pfenex’s
collaborations with Jazz Pharmaceuticals, Alvogen, and its other
collaboration partners; Pfenex's expectations with respect to its
agreements with Merck, SIIPL and Arcellx, including its potential
to receive milestone and royalty payments; and Pfenex’s belief that
the comparative use human factors study report completes the
information package required by the FDA to evaluate therapeutic
equivalence. Pfenex's expectations and beliefs regarding these
matters may not materialize, and actual results in future periods
are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Actual results
may differ materially from those indicated by these forward-looking
statements as a result of the uncertainties inherent in the
clinical drug development process, including, without limitation,
the FDA may disagree that the human factors study report completes
the information package and is sufficient to evaluate therapeutic
equivalence; the FDA may not agree with Pfenex's interpretation of
the results of the human factors study and may not grant an “A”
therapeutic equivalence designation for PF708; Pfenex's ability to
successfully demonstrate the efficacy and safety of its product
candidates; the pre-clinical and clinical results for its product
candidates, which may not support further development of product
candidates or may require Pfenex to conduct additional clinical
trials or modify ongoing clinical trials or regulatory pathways;
challenges related to commencement, patient enrollment, completion,
and analysis of clinical trials; difficulties in achieving and
demonstrating biosimilarity in formulations; Pfenex's ability to
manage operating expenses; Pfenex's ability to obtain additional
funding to support its business activities and establish and
maintain strategic business alliances and new business initiatives;
Pfenex's dependence on third parties for development,
manufacturing, marketing, sales and distribution of products;
unexpected expenditures; litigation and other proceedings regarding
intellectual property rights; and difficulties in obtaining and
maintaining intellectual property protection for its product
candidates. Information on these and additional risks,
uncertainties, and other information affecting Pfenex's business
and operating results is contained in Pfenex’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2019 to be filed with
the Securities and Exchange Commission and in its other filings
with the Securities and Exchange Commission. The forward-looking
statements in this press release are based on information available
to Pfenex as of the date hereof, and Pfenex disclaims any
obligation to update any forward-looking statements, except as
required by law.
Company Contact:Susan A. KnudsonChief Financial
Officer(858) 352-4324sknudson@pfenex.com
PFENEX INC. Consolidated
Statements of Operations (unaudited)
|
|
Three Months
Ended |
|
|
Nine Months
Ended |
|
September 30, |
September 30, |
(in
thousands, except per share data) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License revenue |
|
$ |
11,562 |
|
|
$ |
1,874 |
|
|
$ |
20,430 |
|
|
$ |
6,869 |
|
Service revenue |
|
|
733 |
|
|
|
1,339 |
|
|
|
3,155 |
|
|
|
3,821 |
|
Product revenue |
|
|
2,953 |
|
|
|
357 |
|
|
|
4,836 |
|
|
|
816 |
|
Total revenue |
|
|
15,248 |
|
|
|
3,570 |
|
|
|
28,421 |
|
|
|
11,506 |
|
Cost of
revenue |
|
|
1,143 |
|
|
|
1,479 |
|
|
|
3,837 |
|
|
|
3,923 |
|
Gross profit |
|
|
14,105 |
|
|
|
2,091 |
|
|
|
24,584 |
|
|
|
7,583 |
|
Operating expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
6,931 |
|
|
|
9,045 |
|
|
|
19,691 |
|
|
|
28,590 |
|
Selling, general and administrative |
|
|
4,147 |
|
|
|
3,823 |
|
|
|
13,296 |
|
|
|
11,920 |
|
Total operating expense |
|
|
11,078 |
|
|
|
12,868 |
|
|
|
32,987 |
|
|
|
40,510 |
|
Net income (loss) from operations |
|
|
3,027 |
|
|
|
(10,777 |
) |
|
|
(8,403 |
) |
|
|
(32,927 |
) |
Other
income, net |
|
|
55 |
|
|
|
115 |
|
|
|
195 |
|
|
|
157 |
|
Net income (loss) |
|
$ |
3,082 |
|
|
$ |
(10,662 |
) |
|
$ |
(8,208 |
) |
|
$ |
(32,770 |
) |
Net income
(loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.1 |
|
|
$ |
(0.34 |
) |
|
$ |
(0.26 |
) |
|
$ |
(1.20 |
) |
Diluted |
|
$ |
0.09 |
|
|
$ |
(0.34 |
) |
|
$ |
(0.26 |
) |
|
$ |
(1.20 |
) |
Weighted-average common shares used in calculating net income
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
31,595 |
|
|
|
31,437 |
|
|
|
31,534 |
|
|
|
27,288 |
|
Diluted |
|
|
32,498 |
|
|
|
31,437 |
|
|
|
31,534 |
|
|
|
27,288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PFENEX INC. Consolidated
Balance Sheets
|
|
September
30, |
|
|
December
31, |
|
2019 |
2018 |
(unaudited) |
|
|
|
(in thousands) |
|
Assets |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
32,518 |
|
|
$ |
56,220 |
|
Restricted cash |
|
|
200 |
|
|
|
200 |
|
Accounts and unbilled receivables, net |
|
|
16,215 |
|
|
|
5,171 |
|
Income tax receivable |
|
|
53 |
|
|
|
207 |
|
Other current assets |
|
|
2,357 |
|
|
|
1,851 |
|
Total current assets |
|
|
51,343 |
|
|
|
63,649 |
|
Property and
equipment, net |
|
|
8,374 |
|
|
|
7,671 |
|
Other
long-term assets |
|
|
170 |
|
|
|
133 |
|
Intangible
assets, net |
|
|
3,859 |
|
|
|
4,248 |
|
Goodwill |
|
|
5,577 |
|
|
|
5,577 |
|
Total assets |
|
$ |
69,323 |
|
|
$ |
81,278 |
|
Liabilities and Stockholders’
Equity |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,233 |
|
|
$ |
2,005 |
|
Accrued liabilities |
|
|
8,352 |
|
|
|
9,812 |
|
Current portion of deferred revenue |
|
|
105 |
|
|
|
5,317 |
|
Current portion of capital lease obligations |
|
|
269 |
|
|
|
316 |
|
Total current liabilities |
|
|
10,959 |
|
|
|
17,450 |
|
Deferred
revenue, less current portion |
|
|
2,500 |
|
|
|
2,500 |
|
Capital
lease obligations, less current portion |
|
|
29 |
|
|
|
191 |
|
Total liabilities |
|
|
13,488 |
|
|
|
20,141 |
|
Commitments
and contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no
shares issued |
|
|
— |
|
|
|
— |
|
and outstanding |
Common
stock, par value $0.001, 200,000,000 shares authorized; 31,622,914
and |
|
|
32 |
|
|
|
32 |
|
31,467,580 shares issued and outstanding at September 30, 2019 and
December 31, |
2018,
respectively |
Additional paid-in capital |
|
|
265,311 |
|
|
|
262,405 |
|
Accumulated deficit |
|
|
(209,508 |
) |
|
|
(201,300 |
) |
Total stockholders’ equity |
|
|
55,835 |
|
|
|
61,137 |
|
Total liabilities and stockholders’ equity |
|
$ |
69,323 |
|
|
$ |
81,278 |
|
|
|
|
|
|
|
|
|
|
Pfenex (AMEX:PFNX)
Historical Stock Chart
From Apr 2024 to May 2024
Pfenex (AMEX:PFNX)
Historical Stock Chart
From May 2023 to May 2024