Versartis, Inc. (Nasdaq:VSAR) today announced financial results for
the second quarter ended June 30, 2018 and provided a review of
recent corporate activities.
“We are excited about our proposed merger with Aravive, which
was announced in June following our extensive review of strategic
options. The transaction offers Versartis stockholders a
significant ownership stake in a promising company with a novel
approach for treating a variety of resistant or metastatic cancers,
as well as the talent and financial resources to advance the
development program to important inflection points,” said Jay
Shepard, Chief Executive Officer. “The Phase 1 study of Aravive’s
lead candidate has now been completed; the safety and tolerability
endpoints for the trial were met and AVB-S6-500 demonstrated
clinical proof-of-mechanism in neutralizing GAS6. The Phase 1b
portion of a Phase 1b/2 trial of AVB-S6-500 in ovarian cancer is
expected to begin before year end, with initial data anticipated
during 2019.”
Recent Developments and Upcoming Events
- On June 3, 2018, Versartis and Aravive Biologics, Inc.
entered into a definitive agreement under which Aravive will merge
with a wholly owned subsidiary of Versartis in an all-stock
transaction. The transaction will result in a clinical stage
company based in Houston, Texas, focused on the development of
innovative oncology therapeutics.
- The transaction has been unanimously approved by the boards of
directors of both companies and is subject to approval by the
stockholders of both companies.
- A Form S-4 registration statement containing a preliminary
proxy statement and prospectus (subject to updating and completion)
related to the transaction was filed with the U.S. Securities and
Exchange Commission (SEC) on August 3, 2018 and may be accessed on
the SEC’s web site at the address provided below under the caption
“Important Additional Information and Where to Find It.”
- Once the registration statement has been declared effective by
the SEC, an amended Form S-4 will be filed with the SEC and mailed
to Versartis stockholders; this document will provide details
regarding the meeting of stockholders to obtain the approvals
necessary to complete the merger, including the record date that
determines which stockholders are entitled to vote at the
meeting.
- The transaction is expected to close during 2018, subject to
approval by the stockholders and the satisfaction or waiver of
other customary closing conditions.
Second Quarter 2018 Financial ResultsFor the
second quarter ended June 30, 2018, Versartis reported a net loss
of approximately $9.8 million, or $0.27 per share, basic and
diluted, compared to a net loss for the second quarter ended June
30, 2017 of $36.6 million, or $1.04 per share, basic and
diluted.
Total operating expenses for the quarter ended June 30, 2018
were $9.4 million compared to $36.2 million for the quarter ended
June 30, 2017. Research and development (R&D) expenses for the
quarter ended June 30, 2018 were $3.4 million, compared to $28.6
million for the quarter ended June 30, 2017. The decrease in
R&D expenses was primarily due to the termination of clinical
and manufacturing related contracts that supported the company’s
Phase 3 clinical trials for somavaratan following the Phase 3
VELOCITY trial failing to meet its primary endpoint, as well as a
substantial reduction in our workforce.
General and administrative (G&A) expenses were $6.0 million
for the quarter ended June 30, 2018 compared to $7.6 million for
the quarter ended June 30, 2017. The decrease in G&A
expenses was primarily due to the reduction in workforce and our
continued efforts to reduce consulting and professional services
expenses following the Phase 3 VELOCITY trial failing to meet its
primary endpoint, partially offset by an increase in professional
services attributable to our proposed merger transaction with
Aravive.
Total operating expenses for the quarter ended June 30, 2018
include non-cash stock-based compensation expense of $2.1 million
compared to $3.7 million of non-cash stock-based compensation
expense for the quarter ended June 30, 2017.
Total operating expenses for the six months ended June 30, 2018
were $18.0 million, compared to $65.8 million for the six months
ended June 30, 2017. R&D expenses for the six months
ended June 30, 2018 were $7.0 million, compared with $50.6 million
for the six months ended June 30, 2017, with the reduction being
primarily due to the termination of clinical and manufacturing
related contracts noted above. G&A
expenses for the six months ended June 30, 2018 were $10.9 million,
compared to $15.2 million for the six months ended June 30, 2017.
The decrease was attributable to the reduction in workforce and our
continued efforts to reduce consulting and professional services
expenses following the Phase 3 VELOCITY trial failing to meet its
primary endpoint, partially offset by an increase in professional
services attributable to our proposed merger transaction with
Aravive noted above.
Total operating expenses for the six months ended June 30, 2018
include non-cash stock-based compensation expense of $5.0 million,
compared to $7.5 million of non-cash stock-based compensation
expense for the six months ended June 30, 2017.
Cash, cash equivalents, and short-term investments were $67.8
million as of June 30, 2018.
About Versartis, Inc.Versartis,
Inc. (NASDAQ:VSAR) is a biopharmaceutical company led by a
management team with rich experience and expertise discovering,
developing and commercializing innovative therapeutics for the life
sciences industry, including in the field of oncology.
Forward-Looking StatementsThis communication
contains forward-looking statements (including within the meaning
of Section 21E of the United States Securities Exchange Act of
1934, as amended, and Section 27A of the United States Securities
Act of 1933, as amended) concerning Versartis, Aravive, the merger
and other matters. These statements may discuss goals, intentions
and expectations as to future plans, trends, events, results of
operations or financial condition, or otherwise, based on current
beliefs of the management of Versartis, as well as assumptions made
by, and information currently available to, management.
Forward-looking statements generally include statements that are
predictive in nature and depend upon or refer to future events or
conditions, and include words such as “may,” “will,” “should,”
“would,” “expect,” “anticipate,” “plan,” “likely,” “believe,”
“estimate,” “project,” “intend,” and other similar expressions
among others. Statements that are not historical facts are
forward-looking statements. Forward-looking statements express or
implied in this communication include, but are not limited to,
statements regarding the anticipated completion of the proposed
merger and Aravive’s planned clinical activities, including the
initiation and availability of data from clinical studies, and
statements made by Versartis’s CEO. Forward-looking statements are
based on current beliefs and assumptions that are subject to risks
and uncertainties and are not guarantees of future performance.
Actual results could differ materially from those contained in any
forward-looking statement as a result of various factors,
including, without limitation: the risk that the conditions to the
closing of the merger are not satisfied in a timely manner or at
all, including but not limited to the failure to obtain stockholder
approval for the merger; the risk of the occurrence of any event,
change or other circumstance that could give rise to the
termination of the merger agreement; uncertainties as to the
timing of the consummation of the merger and the ability of each of
Versartis and Aravive to consummate the merger; risks related to
Versartis’s ability to correctly estimate its operating expenses
and its expenses associated with the merger; risks related to the
market price of Versartis’s common stock relative to the exchange
ratio; risks related to the ability of Versartis or Aravive to
protect their respective intellectual property rights; risks
related to the effect of the announcement of the merger on
Versartis’s business relationships, operating results and business
generally; competitive responses to the merger; unexpected costs,
charges or expenses resulting from the merger; potential adverse
reactions or changes to business relationships resulting from the
announcement or completion of the merger; provisions in certificate
of incorporation, bylaws and laws of Delaware containing provisions
that could delay or discourage a change in control of the Company;
and legislative, regulatory, political and economic developments.
The foregoing review of important factors that could cause actual
events to differ from expectations should not be construed as
exhaustive and should be read in conjunction with statements that
are included herein and elsewhere, including the risk factors
included in Versartis’s Form S-4 filed with the SEC on August 3,
2018, Annual Report on Form 10-K and Form 10-K/A for the fiscal
year ended December 31, 2017, Quarterly Report on Form 10-Q that
will be filed for the quarter ended June 30, 2018, and recent
Current Reports on Form 8-K, each as filed with or furnished to the
SEC. Versartis can give no assurance that the conditions to the
merger will be satisfied. Except as required by applicable law,
Versartis undertakes no obligation to revise or update any
forward-looking statement, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise.
No Offer or SolicitationThis communication is
not intended to and does not constitute an offer to sell or the
solicitation of an offer to subscribe for or buy or an invitation
to purchase or subscribe for any securities or the solicitation of
any vote in any jurisdiction pursuant to the merger or otherwise,
nor shall there be any sale, issuance or transfer of securities in
any jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the United States Securities Act
of 1933, as amended. Subject to certain exceptions to be approved
by the relevant regulators or certain facts to be ascertained, the
public offer will not be made directly or indirectly, in or into
any jurisdiction where to do so would constitute a violation of the
laws of such jurisdiction, or by use of the mails or by any means
or instrumentality (including without limitation, facsimile
transmission, telephone and the internet) of interstate or foreign
commerce, or any facility of a national securities exchange, of any
such jurisdiction.
Important Additional Information and Where to Find
ItIn connection with the proposed transaction between
Versartis and Aravive, on August 3, 2018, Versartis filed relevant
materials with the SEC, including a registration statement on Form
S-4 that contains a proxy statement and prospectus. VERSARTIS
URGES INVESTORS AND STOCKHOLDERS TO READ THESE MATERIALS CAREFULLY
AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION
ABOUT VERSARTIS, THE MERGER AND RELATED MATTERS. Investors and
shareholders can obtain free copies of the proxy statement,
prospectus and other documents filed by Versartis with the SEC
through the website maintained by the SEC at www.sec.gov or at
Versartis’s website at www.versartis.com or by
contacting Versartis, Inc., 1020 Marsh Road, Menlo
Park, California 94025, Attention: Corporate Secretary. Investors
and stockholders are urged to read the proxy statement, prospectus
and the other relevant materials before making any voting or
investment decision with respect to the merger.
Participants in the SolicitationVersartis and
Aravive, and each of their respective directors and executive
officers and certain of their other members of management and
employees, may be deemed to be participants in the solicitation of
proxies in connection with the merger. Information about
Versartis’s directors and executive officers is included in the
registration statement on Form S-4 filed with the SEC on August 3,
2018, as well as Versartis’s Annual Report on Form 10-K for the
year ended December 31, 2017, filed with the SEC on March
6, 2018, and the Form 10-K/A filed with the SEC on April 11,
2018. These documents can be obtained free of charge from the
sources indicated above.
Contacts:Kevin HaasVP, Finance(650) 963-8595
khaas@versartis.com
Investors:Mike ZanoniEndurance
Advisorsmzanoni@enduranceadvisors.com
Media:Christine LabareeEvergreen
Communicationschristine@evergreencomms.com
Versartis, Inc.Condensed
Consolidated Statements of Operations
(Unaudited)(in thousands, except per share
amounts)
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30, |
|
|
June 30, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development |
$ |
3,438 |
|
|
$ |
28,618 |
|
|
$ |
7,038 |
|
|
$ |
50,622 |
|
General and
administrative |
|
6,003 |
|
|
|
7,572 |
|
|
|
10,920 |
|
|
|
15,228 |
|
Total
operating expenses |
|
9,441 |
|
|
|
36,190 |
|
|
|
17,958 |
|
|
|
65,850 |
|
Loss from
operations |
|
(9,441 |
) |
|
|
(36,190 |
) |
|
|
(17,958 |
) |
|
|
(65,850 |
) |
Interest income |
|
249 |
|
|
|
242 |
|
|
|
442 |
|
|
|
441 |
|
Other income (expense),
net |
|
(656 |
) |
|
|
(521 |
) |
|
|
(1,313 |
) |
|
|
(782 |
) |
Net loss before
provision for income taxes |
$ |
(9,848 |
) |
|
$ |
(36,469 |
) |
|
$ |
(18,829 |
) |
|
$ |
(66,191 |
) |
Provision for income
taxes |
|
- |
|
|
|
128 |
|
|
|
- |
|
|
|
128 |
|
Net loss |
$ |
(9,848 |
) |
|
$ |
(36,597 |
) |
|
$ |
(18,829 |
) |
|
$ |
(66,319 |
) |
Net loss per share-
basic and diluted |
$ |
(0.27 |
) |
|
$ |
(1.04 |
) |
|
$ |
(0.52 |
) |
|
$ |
(1.89 |
) |
Weighted-average common
shares used to compute basic and diluted net loss per
share |
|
36,134 |
|
|
|
35,316 |
|
|
|
36,010 |
|
|
|
35,001 |
|
Versartis, Inc.Condensed
Consolidated Balance Sheets
(Unaudited)(in thousands)
|
June 30, |
|
|
December 31, |
|
|
2018 |
|
|
2017 |
|
Assets: |
|
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
67,776 |
|
|
$ |
81,146 |
|
Other assets |
|
3,754 |
|
|
|
3,743 |
|
Build-to-suit lease
asset |
|
8,770 |
|
|
|
8,888 |
|
Total
assets |
$ |
80,300 |
|
|
$ |
93,777 |
|
Liabilities and
stockholders' equity: |
|
|
|
|
|
|
|
Accounts payable and
other current liabilities |
$ |
4,038 |
|
|
$ |
5,593 |
|
Build-to-suit lease
obligation |
|
7,324 |
|
|
|
5,428 |
|
Total liabilities |
|
11,362 |
|
|
|
11,021 |
|
Total stockholders'
equity |
|
68,938 |
|
|
|
82,756 |
|
Total
liabilities and stockholders’
equity |
$ |
80,300 |
|
|
$ |
93,777 |
|
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