Versartis Reports Third Quarter 2017 Financial Results and Provides Corporate Update
October 26 2017 - 4:05PM
Versartis, Inc. (NASDAQ:VSAR), an endocrine-focused
biopharmaceutical company, today announced financial results for
the third quarter ended September 30, 2017, and provided a
corporate update.
“In response to the disappointing outcome of the VELOCITY trial
last month, we have been working diligently to understand the
results and determine appropriate next steps for the company,” said
Jay Shepard, President and CEO of Versartis, Inc. “While we are
exploring our options and the potential viability of moving
somavaratan forward, we are implementing a restructuring plan to
significantly reduce our costs and preserve cash. We have also
begun a parallel process to identify opportunities to diversify our
pipeline, including possible strategic transactions, with the aim
of leveraging the company’s expertise and resources to create value
for shareholders.”
Corporate Update
- Analysis of VELOCITY Phase 3 trial results continues in order
to assess the viability of further development of somavaratan for
growth hormone deficiency (GHD)
- All ongoing clinical trials of somavaratan will conclude by the
end of 2017; the VISTA long-term safety study in pediatric GHD will
conclude at the end of October; further clinical development of
somavaratan in adult GHD is on hold
- Dialogue ongoing with Teijin, Versartis’ partner for Japan, as
data are analyzed further; J14VR5 Phase 3 study in Japan is being
discontinued
- Completed reduction in work force of approximately two thirds
and further cost-cutting measures underway to preserve cash
- Select members of management team retained to leverage
clinical, regulatory, and commercial expertise in the evaluation of
somavaratan and efforts to identify opportunities to diversify the
Versartis pipeline
- Cowen engaged to assist in evaluating possible strategic
transactions that could maximize the company’s expertise and
resources
Third Quarter 2017 Financial Results
For the third quarter ended September 30, 2017, Versartis
reported a net loss of approximately $49.8 million, or $1.40 per
share, basic and diluted, compared to a net loss for the quarter
ended September 30, 2016 of $27.3 million, or $0.92 per share,
basic and diluted.
Total operating expenses for the quarter ended September 30,
2017 were $49.7 million, compared to $27.4 million for the quarter
ended September 30, 2016.
Research and development (R&D) expenses for the quarter
ended September 30, 2017 were $42.7 million, compared to $20.7
million for the quarter ended September 30, 2016. The increase in
R&D expenses was primarily due to estimated fees associated
with the expected cancellation of certain of our supplier
contracts, including those with our contract manufacturers.
General and administrative (G&A) expenses for the quarter
ended September 30, 2017 were $7.1 million, compared to $6.8
million for the quarter ended September 30, 2016. The increase in
G&A expenses was primarily due to an increase in professional
services expenses.
Total operating expenses for the quarter ended September 30,
2017 include non-cash stock-based compensation expense of $3.7
million, compared to $2.7 million of non-cash stock-based
compensation expense for the quarter ended September 30, 2016.
Total operating expenses for the nine months ended September 30,
2017 were $115.6 million, compared to $73.8 million for the nine
months ended September 30, 2016. R&D expenses for the nine
months ended September 30, 2017 were $93.3 million, compared with
$55.3 million for the nine months ended September 30, 2016,
reflecting an increase in clinical and manufacturing costs to
support the global VELOCITY pediatric trial and our Phase 2/3 trial
of somavaratan in pediatric patients in Japan, as well as the
estimated fees associated with the expected cancellation of certain
of our supplier contracts noted above. G&A expenses for
the nine months ended September 30, 2017 were $22.3 million,
compared to $18.6 million for the nine months ended September 30,
2016. The increase was attributable to additional payroll,
consulting, and professional services expenses to support our year
over year growth.
Total operating expenses for the nine months ended September 30,
2017 include non-cash stock-based compensation expense of $11.1
million, compared to $8.0 million of non-cash stock-based
compensation expense for the nine months ended September 30,
2016.
Cash and cash equivalents were $118.8 million as of September
30, 2017.
Cautionary Note on Forward-Looking
Statements
This press release contains forward-looking statements for
purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include
statements regarding our intentions or current expectations
concerning, among other things the potential for additional
development and eventual regulatory approval of somavaratan; the
possibility of diversifying our pipeline by licensing or otherwise
acquiring additional product candidates; and the potential for a
strategic transaction with another public or private company with
complementary assets and expertise. Forward-looking statements are
not guarantees of future performance and are subject to risks and
uncertainties that could cause actual results and events to differ
materially from those anticipated. We discuss many of these risks
in greater detail under the heading "Risk Factors" contained in our
Annual Report on Form 10-K for the year ended December 31, 2016 and
in our Quarterly Report on Form 10-Q for the three months ended
June 30, 2017 which are on file with the Securities and Exchange
Commission (SEC). Forward-looking statements are not guarantees of
future performance, and our actual results may differ materially
from the forward-looking statements contained in this press
release. Any forward-looking statements that we make in this press
release speak only as of the date of this press release and we
assume no obligation to update them after the date of this press
release.
Contacts:
Joshua BrummCOO & CFO (650) 963-8582jbrumm@versartis.com
Versartis, Inc. |
|
Condensed Consolidated Statement of
Operations |
|
(Unaudited) |
|
(in thousands, except per share amounts) |
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development |
$ |
42,673 |
|
|
$ |
20,664 |
|
|
$ |
93,295 |
|
|
$ |
55,253 |
|
General and
administrative |
|
7,073 |
|
|
|
6,752 |
|
|
|
22,301 |
|
|
|
18,575 |
|
Total
operating expenses |
|
49,746 |
|
|
|
27,416 |
|
|
|
115,596 |
|
|
|
73,828 |
|
Loss from
operations |
|
(49,746 |
) |
|
|
(27,416 |
) |
|
|
(115,596 |
) |
|
|
(73,828 |
) |
Interest income |
|
220 |
|
|
|
120 |
|
|
|
661 |
|
|
|
354 |
|
Other income (expense),
net |
|
(262 |
) |
|
|
(39 |
) |
|
|
(1,044 |
) |
|
|
(210 |
) |
Net loss before
provision for income taxes |
|
(49,788 |
) |
|
|
(27,335 |
) |
|
|
(115,979 |
) |
|
|
(73,684 |
) |
Provision for income
taxes |
|
- |
|
|
|
- |
|
|
|
128 |
|
|
|
- |
|
Net loss |
|
(49,788 |
) |
|
|
(27,335 |
) |
|
|
(116,107 |
) |
|
|
(73,684 |
) |
Net loss per share-
basic and diluted |
$ |
(1.40 |
) |
|
$ |
(0.92 |
) |
|
$ |
(3.29 |
) |
|
$ |
(2.50 |
) |
Weighted-average common
shares used to compute |
|
35,680 |
|
|
|
29,574 |
|
|
|
35,336 |
|
|
|
29,495 |
|
basic and
diluted net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Versartis, Inc. |
|
Condensed Consolidated Balance
Sheet |
|
(Unaudited) |
|
(in thousands, except per share amounts) |
|
|
|
|
September 30, |
|
|
December 31, |
|
|
2017 |
|
|
2016 |
|
Assets: |
|
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
118,783 |
|
|
$ |
201,153 |
|
Other assets |
|
7,836 |
|
|
|
4,417 |
|
Build-to-suit lease
asset |
|
8,952 |
|
|
|
- |
|
Total
assets |
$ |
135,571 |
|
|
$ |
205,570 |
|
Liabilities and
stockholders' equity: |
|
|
|
|
|
|
|
Accounts payable and
other current liabilities |
$ |
40,903 |
|
|
$ |
14,503 |
|
Upfront payment from
collaboration partner |
|
40,000 |
|
|
|
40,000 |
|
Build-to-suit lease
obligation |
|
5,428 |
|
|
|
- |
|
Total liabilities |
|
86,331 |
|
|
|
54,503 |
|
Total stockholders'
equity |
|
49,240 |
|
|
|
151,067 |
|
Total
liabilities and stockholders’
equity |
$ |
135,571 |
|
|
$ |
205,570 |
|
|
|
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