Aerovate Therapeutics, Inc. (Nasdaq: AVTE), a clinical
stage biopharmaceutical company focused on developing drugs that
meaningfully improve the lives of patients with rare
cardiopulmonary disease, today announced its financial results for
the quarter ended June 30, 2021, and recent events.
“It has been an exciting quarter for Aerovate as
we received scientific advice from the EMA, received regulatory
guidance from the FDA at our end-of-Phase 1 meeting, and we expect
to initiate enrollment this year in the Phase 2b portion of our
Phase 2b/3 trial of AV-101 in PAH,” said Timothy Noyes, chief
executive officer of Aerovate. “We are also pleased with investor
confidence in Aerovate to support our IPO and provide sufficient
capital which we believe will fund Aerovate into the second half of
2025.”
Recent Events
FDA Guidance Supports 6MWD as Primary
Endpoint for Phase 3. At our April 14, 2021 end-of-Phase 1
meeting with the Food and Drug Administration (FDA), we received
regulatory guidance that our Phase 2b/3 trial with AV-101 for the
treatment of pulmonary arterial hypertension (PAH), if successful,
could support a New Drug Application (NDA) submission using the
change in six minute walk distance (6MWD) compared to placebo as
the primary endpoint in the Phase 3 portion of the trial.
Received Scientific Advice from EMA
Regarding Requirements for Approval. We completed the
formal process of seeking scientific advice and regulatory guidance
from the European Medicines Agency (EMA) regarding its requirements
for approval. We believe that, if successful, our existing clinical
program could support a marketing authorization application
submission for regulatory approval in Europe.
Orphan Drug Designation Granted by FDA
and EMA. We have obtained orphan drug designation from FDA
for AV-101 for the treatment of PAH in the United States and
received in May 2021 a positive opinion for orphan drug designation
for AV-101 for the treatment of PAH from the EMA's Committee for
Orphan Medicinal Products in the European Union.
Raised $127.0 Million in Net Proceeds
from IPO. On July 2, 2021, we closed our initial public
offering (IPO) raising gross proceeds of $139.8 million, which
included full exercise of the underwriters’ option to purchase
additional shares of common stock, at a public offering price of
$14.00 per share. We raised net proceeds of approximately $127.0
million after deducting underwriting discounts and commissions and
other offering expenses payable by us.
Board of Directors and management team
strengthened. We appointed to the Board, and to chair of
the Audit Committee, Allison Dorval, who is chief financial officer
at Voyager Therapeutics, Inc. and is a member of the Board of Puma
Biotechnology, Inc. Ms. Dorval has over twenty years of corporate
finance, accounting and operating experience, including 14 years of
life sciences executive experience. In addition, Aerovate hired
Timothy Pigot as senior vice president, commercial to oversee our
pre-commercial activities. Mr. Pigot has over 25 years of industry
experience working to launch and commercialize a range of products
over multiple therapeutic areas. Mr. Pigot gained significant
experience in PAH during his 12 years at Gilead Sciences, Inc. and
11 years at Pfizer, Inc. where his responsibilities included the
launches of Revatio and Letairis for the treatment of PAH.
Second Quarter 2021 Financial Results
Cash and cash equivalents totaled $59.2 million
as of June 30, 2021, compared to $4.6 million as of December 31,
2020. The increase was primarily driven by the issuance of Series A
Redeemable Convertible Preferred Stock during the second quarter of
2021 for $55.5 million in gross proceeds offset by operational
costs for the six-month period ending June 30, 2021. Pro forma cash
and cash equivalents at June 30, 2021 totaled $186.2 million, when
including $127.0 million in net proceeds from our IPO that closed
on July 2, 2021.
R&D expenses: Research and
development (R&D) expenses for the second quarter of 2021 were
$4.3 million as compared to $1.5 million for the second quarter of
2020. The increase in R&D expenses was due primarily to
increased clinical trial costs and manufacturing costs in the
second quarter of 2021 as compared to the second quarter of
2020.
G&A expenses: General and administrative
(G&A) expenses for the second quarter of 2021 were $1.4 million
as compared to $0.2 million for the second quarter of 2020. The
increase in G&A expenses was due primarily to increased legal
fees, accounting fees and consulting expenses in the second quarter
of 2021 as compared to the second quarter of 2020.
Net loss: Net loss for the
second quarter of 2021 was $5.8 million as compared to $2.2 million
for the second quarter of 2020. Net loss included stock-based
compensation expense of $0.3 million for the second quarter of 2021
and $6,100 for the second quarter of 2020.
Financial guidance: We expect
that our cash and cash equivalents along with net proceeds from our
IPO will be sufficient to fund its operations into the second half
of 2025, based on our current operating plan.
About Aerovate Therapeutics Aerovate is a
clinical stage biopharmaceutical company focused on developing
drugs that meaningfully improve the lives of patients with rare
cardiopulmonary disease. Aerovate's initial focus is on advancing
AV-101, its dry powder inhaled formulation of the drug imatinib for
the treatment of pulmonary arterial hypertension, or PAH. For more
information, please visit www.aerovatetx.com.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended. Forward-looking statements can be identified by
words such as “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “future,” “goal,” “intend,” “look forward
to,” “may,” “plan,” “potential,” “predict,” “project,” “potential,”
seek,” “strategy,” “should,” “target,” “will,” “would” and similar
expressions regarding future periods. These forward-looking
statements include, but are not limited to, statements regarding
the therapeutic potential of AV-101; our expectations that we will
initiate enrollment in the second half of 2021 for the Phase 2b
portion of our Phase 2b/3 trial of AV-101 in PAH; our belief that
we will have capital to fund Aerovate into the second half of 2025;
the statement that our phase 2b/3 trial with AV-101 for the
treatment of PAH, if successful, could support a NDA submission;
the statement that, if successful, our existing clinical program
could support a marketing authorization application submission for
regulatory approval in Europe; our business plans and objectives,
future plans for AV-101, including expectations regarding timing
and success of the our Phase 2b/3 clinical trial, the therapeutic
potential and clinical benefits of AV-101 and potential regulatory
submissions and approvals for AV-101, our growth as a company and
the anticipated contribution of the members of our board of
directors to our operations and progress. Any forward-looking
statements in this press release are based on management’s current
expectations and beliefs and are subject to a number of risks,
uncertainties and important factors that may cause actual events or
results to differ materially from those expressed or implied by any
forward-looking statements contained in this press release,
including, without limitation, those risks and uncertainties
related to the therapeutic potential of AV-101, and the timing
associated with the initiation or continuation of our Phase 2b/3
trial of AV-101 in PAH patients, the impact of the COVID-19
pandemic on our business, clinical trials, operations and goals,
positive results from a clinical study may not necessarily be
predictive of the results of future or ongoing clinical studies,
regulatory developments in the United States and foreign countries,
and other risks identified in our filings with the Securities and
Exchange Commission (“SEC”), including our Registration Statement
on Form S-1, and subsequent filings with the SEC. We caution you
not to place undue reliance on any forward-looking statements,
which speak only as of the date they are made. We disclaim any
obligation to publicly update or revise any such statements to
reflect any change in expectations or in events, conditions or
circumstances on which any such statements may be based, or that
may affect the likelihood that actual results will differ from
those set forth in the forward-looking statements. Any
forward-looking statements contained in this press release
represent our views only as of the date hereof and should not be
relied upon as representing its views as of any subsequent
date.
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Aerovate Therapeutics, Inc. |
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Condensed Balance Sheets |
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(in thousands) |
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June 30, |
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December 31, |
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2021 |
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2020 |
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Assets |
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Current assets: |
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|
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Cash and cash equivalents |
$ |
59,150 |
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$ |
4,573 |
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Prepaid expenses and other current assets |
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159 |
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103 |
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Total current assets |
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59,309 |
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|
4,676 |
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Property and equipment, net |
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35 |
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39 |
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Other long-term assets |
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3,090 |
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|
- |
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Total assets |
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$ |
62,434 |
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|
$ |
4,715 |
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Liabilities, Redeemable Convertible Preferred Stock and
Stockholders' Deficit |
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Current liabilities: |
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Accounts payable |
$ |
3,042 |
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$ |
618 |
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Accrued and other current liabilities |
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1,151 |
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1,156 |
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Total current liabilities |
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4,193 |
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1,774 |
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Commitments and contingencies |
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Series A redeemable convertible preferred stock |
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75,819 |
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|
12,285 |
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Series Seed redeemable convertible preferred stock, $0.0001 par
value; |
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4,000 |
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|
4,000 |
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Stockholders' deficit |
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(21,578 |
) |
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|
(13,344 |
) |
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Total liabilities, redeemable convertible preferred stock and
stockholders’ deficit |
$ |
62,434 |
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$ |
4,715 |
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Aerovate Therapeutics, Inc. |
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Condensed Statements of Operations and Comprehensive
Loss |
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(in thousands, except share and per share amounts) |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Operating expenses: |
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Research and development |
$ |
4,327 |
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$ |
1,471 |
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$ |
6,523 |
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$ |
2,677 |
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General and administrative |
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1,447 |
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|
154 |
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2,031 |
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|
306 |
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Total operating expenses |
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5,774 |
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|
1,625 |
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8,554 |
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|
|
2,983 |
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Loss from operations |
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(5,774 |
) |
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|
(1,625 |
) |
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|
(8,554 |
) |
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(2,983 |
) |
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Other expense: |
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Interest income (expense) |
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2 |
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(37 |
) |
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2 |
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(75 |
) |
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Change in fair value of convertible promissory notes |
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- |
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|
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(540 |
) |
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- |
|
|
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(580 |
) |
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Other expense |
|
(3 |
) |
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|
- |
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|
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(4 |
) |
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- |
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Total other expense |
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(1 |
) |
|
|
(577 |
) |
|
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(2 |
) |
|
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(655 |
) |
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Net loss and comprehensive loss |
$ |
(5,775 |
) |
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$ |
(2,202 |
) |
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$ |
(8,556 |
) |
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$ |
(3,638 |
) |
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Net loss per share, basic and diluted |
$ |
(23.80 |
) |
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$ |
(9.12 |
) |
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$ |
(35.29 |
) |
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$ |
(15.07 |
) |
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Weighted-average shares of common stock outstanding, basic and
diluted |
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243,076 |
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|
241,467 |
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243,076 |
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241,467 |
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The following table sets forth certain condensed balance sheet
items on an actual basis and on a pro forma basis, as if the IPO
had occurred on June 30, 2021.
- on a pro forma basis to reflect (i) the automatic
conversion of all shares of our convertible preferred stock into an
aggregate of 14,182,854 shares of our common stock and the related
reclassification of the carrying value of the convertible preferred
stock to permanent equity immediately prior to the closing of this
offering, as if such conversion had occurred on June 30, 2021,
(ii) the filing and effectiveness of our amended and restated
certificate of incorporation, which will be in effect immediately
prior to the closing of this offering and (iii) our issuance and
sale of 9,984,463 shares of our common stock, including 1,302,321
shares associated with the full exercise of the underwriters’
option to purchase additional shares, at an offering price of
$14.00 per share generating approximately $127.0 million in net
proceeds.
The pro forma information below is illustrative only.
Aerovate Therapeutics, Inc. |
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(in thousands) |
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As of June 30, 2021 |
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|
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Actual |
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Pro Forma |
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Cash and cash equivalents |
|
$ |
59,150 |
|
|
$ |
186,150 |
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Redeemable convertible preferred stock |
|
|
79,819 |
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|
|
- |
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Common stock |
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|
- |
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2 |
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Additional paid-in capital |
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|
407 |
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|
207,224 |
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Total shareholders' (deficit) equity |
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$ |
(21,578 |
) |
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$ |
185,241 |
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Contact:
Julio CantreInfo@AerovateTx.com 202.930.4762
Aerovate Therapeutics (NASDAQ:AVTE)
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