Reata Pharmaceuticals, Inc. (Nasdaq: RETA) (“Reata” or the
“Company”), a clinical-stage biopharmaceutical company, today
announced financial results for the third quarter ended September
30, 2019, and provided an update on the Company’s business and
product development programs.
Recent Company Highlights
- Reported positive, topline one-year data from the pivotal
CARDINAL study of bardoxolone methyl in patients with chronic
kidney disease caused by Alport syndrome
- Reported positive topline data from the pivotal MOXIe study of
omaveloxolone in patients with Friedreich’s ataxia
Third Quarter Financial
Highlights
The Company incurred total expenses of $46.8
million for the quarter ended September 30, 2019, with research and
development accounting for $32.3 million. This compares to
total expenses of $34.7 million for the same period of the year
prior, when research and development accounted for $27.1
million. We reported a net loss of $39.7 million or $1.32 per
share for the quarter ended September 30, 2019. This compares
to a net loss of $30.8 million or $1.07 per share in the same
period of the year prior.
The net loss for the three-month period compared
to the year prior is primarily driven by an increase in expenses
offset with an increase in revenue. Higher expenses were
driven by an increase in research and development expenses due to
clinical, manufacturing, and medical affairs activities, and an
increase in personnel expenses to support growth of our development
activities.
We incurred total expenses of $124.6 million for
the nine month period ended September 30, 2019, with research and
development accounting for $87.9 million. This compares
to total expenses of $97.1 million for the same period of the year
prior, when research and development accounted for $72.0
million. We reported a net loss of $103.2 million or
$3.44 per share for the nine month period ended September 30,
2019. This compares to a net loss of $55.0 million or
$2.03 per share in the same period of the year
prior.
The increase in net loss for the nine month
period ended September 30, 2019 is driven primarily by both
an increase in expenses and a decrease in revenue. Higher
expenses were driven by an increase in research and development
expenses due to clinical, manufacturing, and medical affairs
activities, and an increase in personnel expenses to support growth
of our development activities. Revenue to date has
primarily been related to license and collaboration agreements
entered into during 2009, 2010, and 2011. Additional
revenue related to variable consideration that was included in the
transaction price under the KKC Agreement was recognized in the
prior year period. Since we did not have a similar event in the
current period, the revenue decreased by comparison.
Our cash-based operating expenses, a non-GAAP
measure, were $41.2 million and $109.9 million for the three and
nine months ended September 30, 2019, respectively. This
compares to $31.9 million and $89.0 million for the same periods of
the year prior. The increase in cash-based operating expenses
for the three and nine months ended September 30, 2019, were driven
by increased manufacturing and clinical activities, as well as
increased personnel costs to support growth in our development
activities. We expect our cash-based operating expenses to
continue to increase in the future as we advance bardoxolone methyl
and omaveloxolone through ongoing and future clinical trials, scale
manufacturing for registrational and validation purposes, advance
other product candidates into mid- and later-stage clinical trials,
expand our product candidate portfolio, increase both our research
and development and administrative personnel, and plan for
commercialization of our product candidates.
At September 30, 2019, we had $240.1 million in
cash and cash equivalents. We expect our current cash, along
with our access to additional equity or debt funding, will enable
us to meet our current obligations through December 31, 2020.
Non-GAAP Financial Measures
In addition to the U.S. generally accepted
accounting principles (GAAP) financial highlights, this earnings
release includes cash-based operating expenses, a non-GAAP
financial measure, which the Company defines as total expenses
excluding stock-based compensation expense and depreciation
expense. A reconciliation of this non-GAAP financial measure
to its most directly comparable GAAP financial measure is presented
in the table below in this earnings release.
We believe that this non-GAAP financial measure,
in addition to GAAP financial measures, provides a meaningful
measure of our ongoing business and operating performance by
allowing investors to analyze our financial results similarly to
how management analyzes our financial results by viewing period
expense totals more indicative of effort directly expended to
advance the business and our product candidates. Non-GAAP
financial measures should be considered in addition to, not in
isolation or as a substitute for, GAAP financial measures. In
addition, our non-GAAP financial measure may differ from similarly
named measures used by other companies.
CONFERENCE CALL INFORMATION
Date: |
November 12, 2019 |
Time: |
8:00 a.m. ET |
Audience Dial-in (toll-free): |
(844) 348-3946 |
Audience Dial-in (international): |
(213) 358-0892 |
Conference ID: |
4159656 |
Webcast Link: |
https://edge.media-server.com/mmc/p/ofwujzj9 |
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Consolidated Statements of Operations |
(Unaudited) |
|
|
(in thousands, except share and per share
data) |
|
Collaboration revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License and milestone |
$ |
7,898 |
|
|
$ |
4,766 |
|
|
$ |
23,437 |
|
|
$ |
44,452 |
|
Other revenue |
|
344 |
|
|
|
409 |
|
|
|
409 |
|
|
|
685 |
|
Total collaboration revenue |
|
8,242 |
|
|
|
5,175 |
|
|
|
23,846 |
|
|
|
45,137 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
32,279 |
|
|
|
27,144 |
|
|
|
87,948 |
|
|
|
71,979 |
|
General and administrative |
|
14,283 |
|
|
|
7,486 |
|
|
|
36,027 |
|
|
|
24,802 |
|
Depreciation |
|
258 |
|
|
|
105 |
|
|
|
659 |
|
|
|
311 |
|
Total expenses |
|
46,820 |
|
|
|
34,735 |
|
|
|
124,634 |
|
|
|
97,092 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment income |
|
1,311 |
|
|
|
1,094 |
|
|
|
4,812 |
|
|
|
1,787 |
|
Interest expense |
|
(2,389 |
) |
|
|
(2,360 |
) |
|
|
(7,199 |
) |
|
|
(3,773 |
) |
Loss on extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,007 |
) |
Other income (expense) |
|
- |
|
|
|
- |
|
|
|
7 |
|
|
|
- |
|
Total other income (expense) |
|
(1,078 |
) |
|
|
(1,266 |
) |
|
|
(2,380 |
) |
|
|
(2,993 |
) |
Loss before taxes on income |
|
(39,656 |
) |
|
|
(30,826 |
) |
|
|
(103,168 |
) |
|
|
(54,948 |
) |
Provision for taxes on income |
|
38 |
|
|
|
9 |
|
|
|
60 |
|
|
|
15 |
|
Net loss |
$ |
(39,694 |
) |
|
$ |
(30,835 |
) |
|
$ |
(103,228 |
) |
|
$ |
(54,963 |
) |
Net loss per share—basic and diluted |
$ |
(1.32 |
) |
|
$ |
(1.07 |
) |
|
$ |
(3.44 |
) |
|
$ |
(2.03 |
) |
Weighted-average number of common shares used in net loss per
share basic and diluted |
|
30,110,391 |
|
|
|
28,704,853 |
|
|
|
30,004,211 |
|
|
|
27,022,269 |
|
|
As of September 30, 2019
(unaudited) |
|
As of December 31, 2018 |
|
(in
thousands) |
Condensed Consolidated Balance Sheet Data |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
240,149 |
|
|
$ |
337,790 |
Working
capital |
|
171,969 |
|
|
|
286,353 |
Total
assets |
|
259,123 |
|
|
|
345,208 |
Term loan
(including current portion, net of issuance cost) |
|
80,236 |
|
|
|
79,219 |
Deferred
revenue (including current portion) |
|
202,284 |
|
|
|
225,721 |
Accumulated deficit |
|
(523,551 |
) |
|
|
(420,323 |
Total stockholders’
equity (deficit) |
$ |
(67,423 |
) |
|
$ |
15,159 |
|
|
|
|
|
|
|
Reconciliation of GAAP to
Non-GAAP Financial Measures
The following table presents results for the
three and nine months ending (in thousands) (unaudited):
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
(Unaudited) |
|
Total expenses - GAAP |
$ |
46,820 |
|
|
$ |
34,735 |
|
|
$ |
124,634 |
|
|
$ |
97,092 |
|
Stock-based compensation expense |
|
(5,380 |
) |
|
|
(2,745 |
) |
|
|
(14,090 |
) |
|
|
(7,783 |
) |
Depreciation |
|
(258 |
) |
|
|
(105 |
) |
|
|
(659 |
) |
|
|
(311 |
) |
Cash-based operating expenses - Non-GAAP |
$ |
41,182 |
|
|
$ |
31,885 |
|
|
$ |
109,885 |
|
|
$ |
88,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About Reata Pharmaceuticals,
Inc.
Reata is a clinical-stage biopharmaceutical
company that develops novel therapeutics for patients with serious
or life-threatening diseases by targeting molecular pathways
involved in the regulation of cellular metabolism and
inflammation. Reata’s two most advanced clinical candidates,
bardoxolone methyl (bardoxolone) and omaveloxolone, target the
important transcription factor Nrf2 that promotes restoration of
mitochondrial function, reduction of oxidative stress, and
inhibition of pro-inflammatory signaling. Bardoxolone
and omaveloxolone are investigational drugs, and their safety and
efficacy have not been established by any
agency.
Forward-Looking Statements
This press release includes certain disclosures
that contain “forward-looking statements,” including, without
limitation, statements regarding the success, cost and timing of
our product development activities and clinical trials, our plans
to research, develop and commercialize our product candidates, our
plans to submit regulatory filings, and our ability to obtain and
retain regulatory approval of our product candidates. You can
identify forward-looking statements because they contain words such
as “believes,” “will,” “may,” “aims,” “plans,” “model,” and
“expects.” Forward-looking statements are based on Reata’s
current expectations and assumptions. Because forward-looking
statements relate to the future, they are subject to inherent
uncertainties, risks, and changes in circumstances that may differ
materially from those contemplated by the forward-looking
statements, which are neither statements of historical fact nor
guarantees or assurances of future performance. Important
factors that could cause actual results to differ materially from
those in the forward-looking statements include, but are not
limited to, (i) the timing, costs, conduct, and outcome of our
clinical trials and future preclinical studies and clinical trials,
including the timing of the initiation and availability of data
from such trials; (ii) the timing and likelihood of regulatory
filings and approvals for our product candidates; (iii) whether
regulatory authorities determine that additional trials or data are
necessary in order to obtain approval; (iv) the potential
market size and the size of the patient populations for our product
candidates, if approved for commercial use, and the market
opportunities for our product candidates; and (v) other factors set
forth in Reata’s filings with the U.S. Securities and Exchange
Commission, including its Annual Report on Form 10-K, under the
caption “Risk Factors.” The forward-looking statements speak
only as of the date made and, other than as required by law, we
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Contact:Reata Pharmaceuticals, Inc.(972)
865-2219http://reatapharma.com
Investors:Vinny JindalVice President,
Strategy(469)
374-8721ir@reatapharma.comhttp://reatapharma.com/contact-us/
Media:Matt Middleman, M.D.LifeSci Public
Relations(646)
627-8384matt.middleman@lifescipublicrelations.com
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