Market Newsdesk

DALLAS, Aug. 03, 2023 (GLOBE NEWSWIRE) — CSW Industrials, Inc. (Nasdaq: CSWI or the “Company”) today reported record results for the fiscal 2024 first quarter ended June 30, 2023.

Fiscal
2024
First
Quarter Highlights (comparisons to fiscal 2023 first quarter)

• Total revenue increased 2% to a record $203.4 million, driven by $5.1 million in revenue from recent acquisitions
• Net income attributable to CSWI increased 4% to $30.6 million, compared to $29.4 million, with no adjustments to earnings in either period
• Earnings per diluted share (EPS) improved 5% to $1.97, compared to $1.88
• EBITDA increased 10% to $54.4 million, with margin expansion of 200 bps to 26.8%
• Record cash flow from operations, which increased 199% to $50.3 million, compared to $16.8 million
• Paid down $43.0 million of debt, improving strength of the balance sheet significantly, resulting in a leverage ratio (Debt to EBITDA), in accordance with our credit facility, of approximately 1.1x

Comments from the Chairman, President, and Chief Executive Officer

Joseph B. Armes, CSW Industrials’ Chairman, President, and Chief Executive Officer, commented, “Once again, our team executed well in the face of unit volume declines in key markets and against strong prior year period results. Our first quarter results demonstrate yet another quarter of solid sales, excellent operational execution, and prudent expense management, resulting in record revenue and earnings. We meaningfully reduced our outstanding debt thereby strengthening our balance sheet, increasing our liquidity, and reducing our leverage ratio and interest expense.”

Armes continued, “We delivered impressive operating leverage as EBITDA grew by 10% on 2% growth in revenue, while also generating over $50 million in cash flow from operations, an increase of almost 200% over the first quarter of last year. Taking into consideration the strength of our fiscal first quarter results, we still expect to deliver year-over-year revenue, EBITDA and EPS growth for the company as well as strong cash flow generation.”

Fiscal
2024
First
Quarter Consolidated Results

Fiscal first quarter revenue was a record $203.4 million, representing 1.7% growth from $199.9 million in the prior year period. Of the $3.4 million total growth, $5.1 million was contributed by last year’s Cover Guard, AC Guard and Falcon acquisitions. Organic revenue declined by $1.7 million as pricing initiatives were able to partially offset a unit volume reduction compared to last year’s strong results. Revenue increased in the energy, plumbing and mining end markets.

Gross profit in the fiscal first quarter was $92.2 million, representing 6.6% growth from $86.4 million in the prior year period. Gross profit as a percent of revenue increased 210 bps to 45.3%, compared to 43.2% in the prior year period. Gross margin improvement was the result of pricing actions and a reduction in ocean and domestic freight costs.

Operating expenses as a percent of revenue were 23.1%, compared to 22.8% in the prior year period. Operating expenses were $47.0 million, compared to $45.6 million in the prior year period. The additional expenses were primarily due to increased employee expenses, and increased amortization of intangible assets as a result of recent acquisitions.

Operating income increased to $45.2 million, or 22.2% as a percentage of revenue, compared to the prior year period of $40.9 million, or 20.4% as a percentage of revenue. The 180 bps improvement in operating income margin resulted from the improvement in gross profit margin.

Net income attributable to CSWI increased 4.0% to $30.6 million, compared to the prior year period of $29.4 million, while EPS increased 4.8% to $1.97, compared to $1.88 in the prior year period.

Fiscal 2024 first quarter EBITDA increased to $54.4 million, representing 9.9% growth from $49.5 million in the prior year period. As revenue growth outpaced incremental expenses, EBITDA as a percent of revenue improved to 26.8%, from 24.8% in the prior year period.

The Company’s effective tax rate for the fiscal first quarter was 25.2%.

During fiscal first quarter, the Company paid down $43 million of debt, utilizing the record cash flows from operations of $50.3 million, an almost 200% increase over the prior year period. As of June 30, 2023, $210.0 million was outstanding on our $500 million Revolving Credit Facility, which resulted in borrowing capacity of $290.0 million. Our interest rate swap executed in February 2023 hedges our exposure to variability in cash flows from interest payments on the first $100.0 million of borrowing under our Revolving Credit Facility. As of fiscal quarter end, CSWI reported a leverage ratio, in accordance with our Revolving Credit Facility, of approximately 1.1x debt to EBITDA, lower than the 1.3x reported for the fiscal year ended March 31, 2023.

Following quarter end, the Company declared its eighteenth consecutive quarterly regular cash dividend in the amount of $0.19 per share, which will be paid on August 11, 2023, to shareholders of record on July 28, 2023.

Fiscal
2024
First
Quarter Segment Results

Contractor Solutions segment revenue was $140.0 million, a $2.3 million, or 1.7% increase from the prior year period. Revenue growth was comprised of inorganic growth of $5.1 million from the Cover Guard, AC Guard and Falcon acquisitions, which was partially offset by an organic revenue decrease of $2.8 million. The 2.0% decrease in organic revenue was primarily due to a decrease in unit volumes which was partially offset by pricing initiatives. As compared to the prior year period, net revenue growth was driven by the plumbing and architecturally-specified building products end markets. Segment operating income improved to $39.7 million, compared to $36.3 million in the prior year period. The incremental profit resulted from the inclusion of the Cover Guard, AC Guard and Falcon acquisitions, as well as a reduction in ocean and domestic freight expenses compared to the prior year period. This incremental profit was partially offset by increased spending on employee related expenses as well as additional amortization expense from recent acquisitions. Segment operating income margin improved to 28.3%, compared to 26.4% in the prior year period, due to gross margin improvement driven primarily by pricing and a reduction in ocean and domestic freight costs. Segment EBITDA in the current year period was $46.7 million, or 33.4% of revenue, compared to $43.0 million, or 31.2% of revenue in the prior year period.

Specialized Reliability Solutions segment revenue improved to $37.7 million, a $2.0 million, or 5.5% increase, over the prior year period, due to pricing initiatives and growth in the energy and mining end markets. Segment operating income improved to $7.0 million, a 36.7% increase from $5.1 million in the prior year period, driven by pricing actions and the management of operating expenses. Segment operating income margin in the fiscal first quarter improved to 18.5%, compared to 14.3% in the prior year period. Segment EBITDA improved by 26.9% to $8.5 million, or 22.4% of revenue, compared to $6.7 million, or 18.6% of revenue, in the prior year period.

Engineered Building Solutions segment revenue was $27.6 million, a 3.3% decrease from the prior year period, due to a slight volume decrease partially offset by pricing actions. The project mix of the current backlog skews more toward larger jobs in the architecturally-specified building products end market, which can take up to two years to turn into revenue. Segment operating income was $4.3 million, or 15.4% of revenue, compared to the prior year period of $4.4 million, or 15.5% of revenue. Segment EBITDA was $4.7 million, or 17.1% of revenue, compared to $4.8 million, or 16.8% of revenue, in the prior year period.

Conference Call Information

The Company will host a conference call today at 10:00 a.m. ET to discuss the results, followed by a question and answer session for the investment community. A live webcast of the call can be accessed at https://cswindustrials.gcs-web.com/. To access the call, participants may dial 1-877-300-8521, international callers may use 1-412-317-6026, and request to join the CSW Industrials earnings call.

A telephonic replay will be available shortly after the conclusion of the call and until August 17, 2023. Participants may access the replay at 1-844-512-2921, international callers may use 1-412-317-6671, and enter access code 10180705. The call will also be available for replay via webcast link on the Investors portion of the CSWI website at www.cswindustrials.com.

Safe Harbor Statement

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as “may,” “should,” “expects,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “forecasts,” “predicts” or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, effective tax rate, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations, and financial performance and condition.

The forward-looking statements included in this press release are based on our current expectations, projections, estimates, and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.

All forward-looking statements included in this press release are based on information currently available to us, and we assume no obligation to update any forward-looking statement except as may be required by law.

Non-GAAP Financial Measures

This press release includes an analysis of adjusted earnings per share attributable to CSWI, adjusted net income attributable to CSWI, and adjusted operating income, which are non-GAAP financial measures of performance. Attributable to CSWI is defined to exclude the income attributable to the non-controlling interest in the Whitmore JV.

CSWI utilizes adjusted EBITDA (earnings before interest, tax, depreciation and amortization) as an additional consolidated, non-GAAP financial measure, which consists of consolidated net income including income attributable to the non-controlling interest in the Whitmore JV, adjusted to remove the impact of income taxes, interest expense, depreciation and amortization, and significant nonrecurring items. Free cash flow is a non-GAAP financial measure and is defined as cash flow from operations less capital expenditures.

For a reconciliation of these measures to the most directly comparable GAAP measures and for a discussion of why we consider these non-GAAP measures useful, see the “Reconciliation of Non-GAAP Measures” section of this release.

About CSW Industrials, Inc.

CSW Industrials is a diversified industrial growth company with industry-leading operations in three segments: Contractor Solutions, Specialized Reliability Solutions and Engineered Building Solutions. CSWI provides niche, value-added products with two essential commonalities: performance and reliability. The primary end markets we serve with our well-known brands include: HVAC/R, plumbing, general industrial, architecturally-specified building products, energy, mining, and rail transportation. For more information, please visit www.cswindustrials.com.

Investor Relations

Alexa Huerta
Vice President, Investor Relations & Treasurer
214-489-7113
[email protected]

CSW INDUSTRIALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share amounts)	Three Months Ended June 30,
	2023				2022
Revenues, net	$	203,360			$	199,934
Cost of revenues		(111,193	)			(113,509	)
Gross profit		92,167				86,425
Selling, general and administrative expenses		(46,961	)			(45,552	)
Operating income		45,206				40,873
Interest expense, net		(4,009	)			(1,784	)
Other income, net		314				169
Income before income taxes		41,511				39,258
Provision for income taxes		(10,455	)			(9,620	)
Net income		31,056				29,638
Less: Income attributable to redeemable noncontrolling interest		(445	)			(195	)
Net income attributable to CSW Industrials, Inc.	$	30,611			$	29,443
Net income per share attributable to CSW Industrials, Inc.
Basic	$	1.97			$	1.88
Diluted	$	1.97			$	1.88
Weighted average number of shares outstanding:
Basic		15,520				15,643
Diluted		15,547				15,652

CSW INDUSTRIALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(Amounts in thousands, except for per share amounts)	June 30, 2023				March 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	14,788			$	18,455
Accounts receivable, net of allowance for expected credit losses of $1,422 and $1,365, respectively		127,075				122,753
Inventories, net		157,042				161,569
Prepaid expenses and other current assets		19,775				20,279
Total current assets		318,680				323,056
Property, plant and equipment, net of accumulated depreciation of $95,736 and $92,703, respectively		89,392				88,235
Goodwill		243,162				242,740
Intangible assets, net		313,355				318,903
Other assets		68,510				70,519
Total assets	$	1,033,099			$	1,043,453
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	46,252			$	40,651
Accrued and other current liabilities		60,193				67,388
Total current liabilities		106,445				108,039
Long-term debt		210,000				253,000
Retirement benefits payable		1,148				1,158
Other long-term liabilities		136,503				137,117
Total liabilities		454,096				499,314
Commitments and contingencies (See Note 13)
Redeemable noncontrolling interest		18,909				18,464
Equity:
Common shares, $0.01 par value		163				163
Additional paid-in capital		128,451				123,336
Treasury shares, at cost (887 and 902 shares, respectively)		(83,072	)			(82,734	)
Retained earnings		520,965				493,319
Accumulated other comprehensive loss		(6,413	)			(8,409	)
Total equity		560,094				525,675
Total liabilities, redeemable noncontrolling interest and equity	$	1,033,099			$	1,043,453

CSW INDUSTRIALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)	Three Months Ended June 30,
	2023				2022
Cash flows from operating activities:
Net income	$	31,056			$	29,638
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		3,239				3,273
Amortization of intangible and other assets		5,868				5,340
Provision for inventory reserves		2,509				1,667
Provision for doubtful accounts		108				1,060
Share-based and other executive compensation		2,805				2,284
Net loss on disposals of property, plant and equipment		(12	)			(5	)
Net pension benefit		17				49
Impairment of assets		92				—
Net deferred taxes		843				310
Changes in operating assets and liabilities:
Accounts receivable		(4,319	)			(21,044	)
Inventories		2,141				(15,020	)
Prepaid expenses and other current assets		2,443				458
Other assets		(788	)			81
Accounts payable and other current liabilities		3,233				8,426
Retirement benefits payable and other liabilities		1,022				296
Net cash provided by operating activities		50,257				16,813
Cash flows from investing activities:
Capital expenditures		(4,971	)			(2,015	)
Proceeds from sale of assets		12				20
Cash paid for acquisitions		(112	)			(2,000	)
Net cash used in investing activities		(5,071	)			(3,995	)
Cash flows from financing activities:
Borrowings on line of credit		15,432				34,797
Repayments of line of credit and term loan		(58,432	)			(13,937	)
Purchase of treasury shares		(2,864	)			(31,398	)
Dividends		(2,947	)			(2,670	)
Net cash used in financing activities		(48,811	)			(13,208	)
Effect of exchange rate changes on cash and equivalents		(42	)			(710	)
Net change in cash and cash equivalents		(3,667	)			(1,100	)
Cash and cash equivalents, beginning of period		18,455				16,619
Cash and cash equivalents, end of period	$	14,788			$	15,519

Reconciliation of Non-GAAP Measures

We use adjusted earnings per share attributable to CSWI, adjusted net income attributable to CSWI, adjusted operating income, adjusted EBITDA, and free cash flow, together with financial measures prepared in accordance with GAAP, such as revenue, cost of revenue, operating expense, operating income, net income attributable to CSWI and cash flows provided by operating activities, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. We also believe these measures are useful for investors to assess the operating performance of our business without the effect of non-recurring items. In the following tables, there could be immaterial differences in amounts presented due to rounding.

CSW INDUSTRIALS, INC.
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO CSWI TO EBITDA
(Unaudited)
(Amounts in thousands)	Three Months Ended June 30,
	2023				2022
Net Income attributable to CSWI	$	30,611			$	29,443
Plus: Income attributable to redeemable noncontrolling interest		445				195
Net Income	$	31,056			$	29,638
Adjusting Items:
Interest Expense		4,009				1,784
Income Tax Expense		10,455				9,620
Depreciation & Amortization		8,915				8,470
EBITDA	$	54,435			$	49,512
EBITDA % Revenue		26.8	%			24.8	%

CSW INDUSTRIALS, INC.
RECONCILIATION OF SEGMENT OPERATING INCOME TO SEGMENT EBITDA
(Unaudited)
(Amounts in thousands)	Three Months Ended June 30, 2023
				Specialized			Engineered
	Contractor			Reliability			Building			Corporate			Consolidated
	Solutions			Solutions			Solutions			and Other			Operations
Revenue, net	$	139,954		$	37,712		$	27,587		$	(1,892	)	$	203,360
Operating Income	$	39,667		$	6,966		$	4,260		$	(5,686	)	$	45,206
% Revenue		28.3	%		18.5	%		15.4	%					22.2	%
Adjusting Items:
Other Income (Expense)		172			(37	)		8			172			314
Depreciation & Amortization		6,895			1,530			441			48			8,915
EBITDA	$	46,734		$	8,458		$	4,708		$	(5,466	)	$	54,435
% Revenue		33.4	%		22.4	%		17.1	%					26.8	%
(Amounts in thousands)	Three Months Ended June 30, 2022
				Specialized			Engineered
	Contractor			Reliability			Building			Corporate			Consolidated
	Solutions			Solutions			Solutions			and Other			Operations
Revenue, net	$	137,628		$	35,737		$	28,514		$	(1,940	)	$	199,934
Operating Income	$	36,289		$	5,097		$	4,415		$	(4,927	)	$	40,873
% Revenue		26.4	%		14.3	%		15.5	%					20.4	%
Adjusting Items:
Other Income (Expense)		309			5			(79	)		(66	)		169
Depreciation & Amortization		6,408			1,561			451			49			8,470
EBITDA	$	43,006		$	6,663		$	4,787		$	(4,944	)	$	49,512
% Revenue		31.2	%		18.6	%		16.8	%					24.8	%

CSW INDUSTRIALS, INC.
RECONCILIATION OF FREE CASH FLOW TO NET INCOME
(Unaudited)
(Amounts in thousands)	Three Months Ended June 30,
	2023				2022
Net cash provided by operating activities	$	50,257			$	16,813
Less: Capital Expenditures		(4,971	)			(2,015	)
Free Cash Flow	$	45,286			$	14,798
Free Cash Flow % Net Income		145.8	%			49.9	%

-Reported positive topline results from EMERALD-1 study of MORF-057 in ulcerative colitis-

-Continued enrollment on target in EMERALD-2 Phase 2b trial of MORF-057 in ulcerative colitis-

-Greater than $730 million in cash and equivalents at 6/30/23; extended cash runway into second half of 2027-

-New clinical trials of MORF-057 in Crohn’s disease and MORF-088 in myelofibrosis to begin in the first half of 2024-

WALTHAM, Mass., Aug. 03, 2023 (GLOBE NEWSWIRE) — Morphic Therapeutic (Nasdaq: MORF), a biopharmaceutical company developing a new generation of oral integrin therapies for the treatment of serious chronic diseases, today reported corporate highlights and financial results for the second quarter of 2023.

“Morphic rides a wave of momentum into the 2nd half of 2023, bolstered by the compelling and consistent dataset derived from the EMERALD-1 Phase 2a study of MORF-057 in ulcerative colitis. These data paved the way to a fortress balance sheet, catalyzing the broader advancement of our pipeline,” commented Praveen Tipirneni, MD, Chief Executive Officer of Morphic Therapeutic. “The MORF-057 development program moves ahead with on-track enrollment of ulcerative colitis patients in the EMERALD-2 Phase 2b study and with the preparation for a Phase 2 trial in Crohn’s Disease, planned to begin in the first half of 2024. Our robust financial position opens the gates to additional investment in therapeutic areas beyond IBD, enabled by the MInT Platform.

“In particular, our αvβ8 inhibitor program continues to stir enthusiasm, buoyed by compelling pre-clinical data and the potentially central role of TGF-β in the pathogenesis of myelofibrosis. On the strength of these advancements, we have formally nominated MORF-088, a selective small molecule inhibitor of αvβ8, as our development candidate for myelofibrosis and expect this program to enter the clinic in the first half of 2024.”

Second Quarter 2023 and Recent Corporate Highlights

In the EMERALD-1 Phase 2a trial of MORF-057 in UC, topline data indicate that MORF-057:

• Was generally well tolerated with no safety signal observed
• Achieved the study’s primary endpoint and demonstrated consistent, clinically meaningful improvements across secondary and exploratory measures
• Demonstrated a statistically significant reduction of 6.4 points (p=0.002) from baseline at Week 12 in the Robarts Histopathology Index (RHI) Score
• Achieved 26% clinical remission as measured by Modified Mayo Clinic Score (mMCS)
• Demonstrated positive biomarker results, including the saturation of the α4β7 receptor and α4β7 lymphocyte subset changes consistent with Phase 1 MORF-057 data

Ongoing MORF-057 EMERALD Phase 2 Development Program Updates

• Continued the 40-week maintenance phase of the EMERALD-1 study as projected with top-line data anticipated in the first half of 2024
  • Patients who completed the 12-week induction phase of the EMERALD-1 Phase 2a study were eligible to continue participating in a 40-week maintenance phase of the EMERALD-1 open-label single-arm study
• Announced completion of enrollment in the exploratory cohort of the EMERALD-1 study comprised of UC patients who have previously failed treatment with vedolizumab
• Announced that the EMERALD-2 global Phase 2b randomized, double-blind, placebo-controlled trial of MORF-057 in patients with moderate-to-severe UC continued to ramp-up and enroll as projected
  • The primary endpoint of EMERALD-2 is the clinical remission rate as measured by mMCS at 12 weeks and is expected to report in the first half of 2025
• Announced that the Phase 2b study of MORF-057 in Crohn’s Disease is anticipated to begin in the first half of 2024
• Announced the acceptance of a moderated poster presentation of the EMERALD-1 study results at the UEG Week 2023 in October in Copenhagen

MORF-057 Preclinical Studies

• Presented new biomarker data at Digestive Disease Week 2023, demonstrating increases in circulating fibroblasts, consistent with previous findings and adding new support to mechanistic understanding of MORF-057’s activity in a non-human primate model of UC. These data further support the ongoing EMERALD Phase 2 clinical trials of MORF-057 in IBD

Equity Financing

• Morphic strengthened its balance sheet with a total of approximately $345 million in new capital during the second quarter through:
  • $276 million in gross proceeds from a public offering of 6,133,334 shares of its common stock at $45 per share, including full exercise of the underwriters’ overallotment option following the release of the positive and consistent EMERALD-1 Phase 2a topline data in ulcerative colitis
  • ~$69 million in gross proceeds through the use of its ATM facility at a volume-weighted average price of $56.20 per share

Financial Results for the Second Quarter 2023

• Net loss for the quarter ended June 30, 2023, was $39.0 million or $0.92 per share compared to net income of $26.8 million or $0.68 per share for the same quarter last year
• Revenue was $0 million for the quarter ended June 30, 2023, compared to $60.2 million for the same quarter last year due to the conclusion of the Company’s research and development collaboration with AbbVie
• Research and development expenses were $35.7 million for the quarter ended June 30, 2023, as compared to $25.7 million for the same quarter last year. The increase was primarily attributable to higher manufacturing and development costs along with higher pre-clinical and phase 2 clinical trial costs to support our lead product candidate, MORF-057
• General and administrative expenses were $9.6 million for the quarter ended June 30, 2023, compared to $8.2 million for the same quarter last year. The increase was due to increased non-cash stock-based compensation expenses and higher payroll costs

As of June 30, 2023, Morphic had cash, cash equivalents and marketable securities of $731.4 million, compared to $421.3 million as of March 31, 2023. Based on its current operating plan, Morphic believes its existing cash, cash equivalents and marketable securities as of June 30, 2023, will be sufficient to fund operating expenses and capital expenditure requirements into the second half of 2027.

Upcoming Morphic Investor and Medical Meeting Presentations

• Canaccord Genuity 43rd Annual Growth Conference, Boston
  • Corporate presentation, August 9, 2023
• Wells Fargo Healthcare Conference, Boston
  • Fireside Chat, September 6, 2023
• UEG Week 2023, Copenhagen
  • EMERALD-1 moderated poster presentation, October 15, 2023

About MORF-057

Morphic is developing MORF-057 as a selective, oral small molecule inhibitor of the α4β7 integrin for patients with inflammatory bowel disease (IBD). α4β7 has been clinically validated as a target for the treatment of IBD by the success of the approved injectable antibody therapeutic vedolizumab. MORF-057, like vedolizumab, is designed to block the interactions between α4β7 on the surface of lymphocytes and the mucosal endothelial cell ligand MAdCAM-1, substantially reducing lymphocyte migration from the bloodstream into intestinal mucosal tissues and avoiding inflammation that is associated with IBD.

About the EMERALD-1 Study

EMERALD-1 (MORF-057-201) is an open-label multi-center phase 2a trial designed to evaluate the efficacy, safety, and tolerability of MORF-057 in adults with moderate to severe ulcerative colitis. The 35 patients enrolled in the main cohort of the EMERALD-1 study have been treated with 100 mg BID (twice daily) at sites in the United States and Poland. The primary endpoint of the trial was the change in Robarts Histopathology Index (RHI), a validated instrument that measures histological disease activity in ulcerative colitis at 12 weeks compared to baseline. Patients will continue for an additional 40 weeks of maintenance therapy followed by a 52-week assessment. Secondary and additional pre-specified measures in the EMERALD-1 study include change in the modified Mayo clinic score, safety, pharmacokinetic parameters and key pharmacodynamic measures including α4β7 receptor occupancy and lymphocyte subset trafficking.

About the EMERALD-2 Study

EMERALD-2 (MORF-057-202) is a global phase 2b randomized, double-blind, placebo-controlled trial of MORF-057 that is currently enrolling patients with moderate-to-severe ulcerative colitis. The primary endpoint of EMERALD-2 is clinical remission rate as measured by the Modified Mayo Clinic Score (mMCS) at 12 weeks. EMERALD-2 will also measure several secondary and exploratory endpoints based on the mMCS as well as histologic, pharmacokinetic and pharmacodynamic measures, and safety parameters. Patients in the EMERALD-2 study will be randomized to receive either 200 mg BID MORF-057, 100 mg BID MORF-057, a QD (once daily) dose of MORF-057, or a placebo dose. Following the 12-week induction phase, all patients will receive MORF-057 for 40 weeks of maintenance dosing. For more information about the EMERALD clinical trials of MORF-057, please click here.

About Morphic Therapeutic

Morphic Therapeutic is a biopharmaceutical company developing a portfolio of oral integrin therapies for the treatment of serious chronic diseases, including autoimmune, cardiovascular, and metabolic diseases, fibrosis, and cancer. Morphic is also advancing its pipeline and discovery activities in collaboration with Schrödinger using its proprietary MInT technology platform which leverages the Company’s unique understanding of integrin structure and biology. For more information, visit www.morphictx.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to: the MInT technology platform’s ability to discover drug candidates; Morphic’s plans to develop and commercialize oral small-molecule integrin therapeutics and any proposed timing thereof; the execution, timing and completion of the EMERALD-1 and EMERALD-2 clinical trials; any expectations about safety, efficacy, timing and ability to commence or complete clinical studies and/or trials and to obtain regulatory approvals for MORF-057, MORF-088 and other candidates in development; the timing of further data presentation; the ability of MORF-057 to treat IBD, including ulcerative colitis, or related indications; the ability of αvβ8 small molecule inhibitors, including MORF-088, to treat myelofibrosis; the ability for additional integrin targets to treat pulmonary hypertensive diseases; the company’s cash position and anticipated runway. Statements including words such as “believe,” “plan,” “continue,” “expect,” “will be,” “develop,” “signal,” “potential,” “anticipate” or “ongoing” and statements in the future tense are forward-looking statements. These forward-looking statements involve risks and uncertainties, as well as assumptions, which, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause Morphic’s actual activities or results to differ significantly from those expressed in any forward-looking statement, including risks and uncertainties disclosed in this press release and other risks set forth in our filings with the Securities and Exchange Commission, including Morphic’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 23, 2023 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 filed with the SEC on August 23, 2023. These forward-looking statements speak only as of the date hereof and Morphic specifically disclaims any obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

-Financial Tables to Follow-

Morphic Holding, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
	Three Months Ended June 30,								Six Months Ended June 30,
​		2023				2022				2023				2022
Collaboration revenue	$	—			$	60,236			$	521			$	62,618
Operating expenses:
Research and development		35,719				25,652				66,168				52,115
General and administrative		9,583				8,234				18,860				15,825
Total operating expenses		45,302				33,886				85,028				67,940
(Loss) income from operations		(45,302	)			26,350				(84,507	)			(5,322	)
Other income:
Interest income, net		6,427				482				9,527				669
Other income, net		—				11				2				12
Total other income, net		6,427				493				9,529				681
(Loss) income before provision for income taxes		(38,875	)			26,843				(74,978	)			(4,641	)
Provision for income taxes		(138	)			(2	)			(170	)			(2	)
Net (loss) income	$	(39,013	)		$	26,841			$	(75,148	)		$	(4,643	)
Net (loss) income per share, basic	$	(0.92	)		$	0.70			$	(1.82	)		$	(0.12	)
Net (loss) income per share, diluted	$	(0.92	)		$	0.68			$	(1.82	)		$	(0.12	)
​
Weighted average common shares outstanding, basic		42,373,407				38,244,547				41,249,157				37,692,049
Weighted average common shares outstanding, diluted		42,373,407				39,554,651				41,249,157				37,692,049

Morphic Holding, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
	June 30, 2023			December 31, 2022
Assets
Cash, cash equivalents and marketable securities	$	731,356		$	348,248
Other current assets		11,265			13,934
Total current assets		742,621			362,182
Other assets		6,099			6,407
Total assets	$	748,720		$	368,589
Liabilities and Stockholders’ Equity
Current liabilities	$	17,809		$	17,126
Long-term liabilities		1,550			2,344
Total liabilities		19,359			19,470
Total stockholders’ equity		729,361			349,119
Total liabilities and stockholders’ equity	$	748,720		$	368,589

Contacts

Morphic Therapeutic
Chris Erdman
[email protected]
617.686.1718

NEW YORK and VIENNA, Austria, Aug. 03, 2023 (GLOBE NEWSWIRE) — HOOKIPA Pharma Inc. (NASDAQ: HOOK, ‘HOOKIPA’), a company developing a new class of immunotherapeutics based on its proprietary arenavirus platform, today announced that it will release its second quarter 2023 financial results and business highlights on August 10, 2023.

The company will not be conducting a conference call in conjunction with this financial release.

About HOOKIPA

HOOKIPA Pharma Inc. (NASDAQ: HOOK) is a clinical-stage biopharmaceutical company focused on developing novel immunotherapies, based on its proprietary arenavirus platform, which are designed to mobilize and amplify targeted T cells and thereby fight or prevent serious disease. HOOKIPA’s replicating and non-replicating technologies are engineered to induce robust and durable antigen-specific CD8+ T cell responses and pathogen-neutralizing antibodies. HOOKIPA’s pipeline includes its wholly owned investigational arenaviral immunotherapies targeting Human Papillomavirus 16-positive cancers, prostate cancers, and other undisclosed programs. HOOKIPA is collaborating with Roche on an arenaviral immunotherapeutic for KRAS-mutated cancers. In addition, HOOKIPA aims to develop functional cures of HBV and HIV in collaboration with Gilead.

Find out more about HOOKIPA online at www.hookipapharma.com.

Forward Looking Statements
Certain statements set forth in this press release constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by terms such as “believes,” “expects,” “plans,” “potential,” “would” or similar expressions and the negative of those terms. Such forward-looking statements involve substantial risks and uncertainties that could cause HOOKIPA’s research and clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the drug development process, including HOOKIPA’s programs’ early stage of development, the process of designing and conducting preclinical and clinical trials, the regulatory approval processes, the timing of regulatory filings, the challenges associated with manufacturing drug products, HOOKIPA’s ability to successfully establish, protect and defend its intellectual property, risks relating to business interruptions resulting from the coronavirus (COVID-19) disease outbreak or similar public health crises, the impact of COVID-19 on the enrollment of patients and timing of clinical results, and other matters that could affect the sufficiency of existing cash to fund operations. HOOKIPA undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of the company in general, see HOOKIPA’s quarterly report on Form 10-Q for the quarter ended March 31, 2023, which is available on the Security and Exchange Commission’s website at www.sec.gov and HOOKIPA’s website at www.hookipapharma.com.

Investors and others should note that we announce material financial information to our investors using our investor relations website (https://ir.hookipapharma.com/), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media, to communicate with our members and the public about our company, our services and other issues. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the U.S. social media channels listed on our investor relations website.

For further information, please contact:
Media	Investors
Instinctif Partners	Reinhard Kandera, Chief Financial Officer
[email protected]	[email protected]
+44 (0) 7457 2020

― Screening closed for the Phase 3 REACH pivotal trial of losmapimod in facioscapulohumeral muscular dystrophy (FSHD) ―

― Expect to report topline data for REACH in the fourth quarter of 2024 ―

― Interactions continue with the U.S. Food and Drug Administration (FDA) to resolve clinical hold for FTX-6058 in sickle cell disease (SCD) ―

― Alan A. Musso appointed as chief financial officer ―

― Conference call and webcast scheduled for 8:00 a.m. ET today ―

CAMBRIDGE, Mass., Aug. 03, 2023 (GLOBE NEWSWIRE) — Fulcrum Therapeutics, Inc.^® (the “Company”) (Nasdaq: FULC), a clinical-stage biopharmaceutical company focused on improving the lives of patients with genetically defined rare diseases, today reported financial results for the second quarter of 2023 and provided a business update.

“We are encouraged by the continued progress in the first half of 2023 and look forward to continuing to execute on our key priorities for our clinical programs,” said Alex C. Sapir, Fulcrum’s president and chief executive officer. “We closed screening for the Phase 3 REACH trial of losmapimod, and we expect to report topline data in the fourth quarter of 2024. This marks a critical milestone that brings us one step closer to potentially delivering the first FDA-approved therapy for the treatment of FSHD. In parallel, we continue to work diligently with the FDA to resolve the clinical hold for FTX-6058 as soon as possible.”

Recent Business Highlights

• Screening is closed in the REACH Phase 3 pivotal trial evaluating losmapimod in FSHD at sites in the United States, Canada, and Europe. Fulcrum expects to complete enrollment in the third quarter of 2023 and expects to report topline data in the fourth quarter of 2024.
• In partnership with the FSHD Society, Fulcrum announced the launch of Project Mercury, a new global coalition to accelerate the delivery of new therapies for FSHD by uniting and mobilizing multiple sectors of the FSHD community, including advocates, patients, industry leaders, researchers, and clinicians. Fulcrum is the global and sustaining sponsor of Project Mercury.
• Interactions with the FDA to resolve the clinical hold for FTX-6058 are ongoing.
• Obtained an exclusive global license from CAMP4 Therapeutics Corp. (CAMP4) to acquire intellectual property arising from CAMP4’s pre-clinical research program in Diamond-Blackfan Anemia (DBA). Under the terms of the agreement, Fulcrum will advance the discovery, development, and commercialization of novel therapeutic agents against an undisclosed target for the potential treatment of DBA.
• Alex C. Sapir appointed as president and chief executive officer and member of Fulcrum’s board of directors, effective July 1, 2023. Robert J. Gould, Ph.D., transitioned from his role as interim chief executive officer and president and will continue to serve as a member of the board of directors. In addition, Dr. Gould will serve as chair of the science and technology committee.
• Alan A. Musso appointed as chief financial officer effective August 7, 2023.

Second Quarter 2023 Financial Results

• Cash Position: As of June 30, 2023, cash, cash equivalents, and marketable securities were $278.2 million, as compared to $202.9 million as of December 31, 2022.
• Collaboration Revenue: Collaboration revenue was $0.9 million for the second quarter of 2023 as compared to $1.9 million for the second quarter of 2022.
• R&D Expenses: Research and development expenses were $17.8 million for the second quarter of 2023 as compared to $25.0 million for the second quarter of 2022. The decrease of $7.2 million was primarily associated with a $5.0 million milestone achieved during the second quarter of 2022 due to GlaxoSmithKline plc upon the initiation of REACH and decreased costs for FTX-6058 as a result of the clinical hold.
• G&A Expenses: General and administrative expenses were $10.3 million for the second quarter of 2023 as compared to $11.1 million for the second quarter of 2022. The decrease of $0.8 million was primarily due to decreased professional services costs.
• Net Loss: Net loss was $23.8 million for the second quarter of 2023 as compared to $34.1 million for the second quarter of 2022.

Financial Guidance

Fulcrum expects that its existing cash, cash equivalents, and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements into mid-2025.

Conference Call and Webcast

Fulcrum Therapeutics, Inc. will host a conference call and webcast today at 8:00 a.m. ET to review the second quarter and 2023 recent business highlights and financial results. Individuals may register for the conference call by clicking the link here. Once registered participants will receive dial-in details and a unique pin which will allow them to access the call. The webcast will be accessible through the Investor Relations section of Fulcrum’s website at www.fulcrumtx.com or by clicking here. Following the live webcast, an archived replay will also be available for 90 days.

About Fulcrum Therapeutics

Fulcrum Therapeutics is a clinical-stage biopharmaceutical company focused on improving the lives of patients with genetically defined rare diseases in areas of high unmet medical need. Fulcrum’s two lead programs in clinical development are losmapimod, a small molecule for the treatment of facioscapulohumeral muscular dystrophy (FSHD), and FTX-6058, a small molecule designed to increase expression of fetal hemoglobin for the treatment of sickle cell disease (SCD) and other hemoglobinopathies, which is currently under a full clinical hold issued by the U.S. Food and Drug Administration. The company’s proprietary product engine, FulcrumSeek™, identifies drug targets that can modulate gene expression to treat the known root cause of gene mis-expression. For more information, visit www.fulcrumtx.com and follow us on Twitter @FulcrumTx and LinkedIn.

About FTX-6058

FTX-6058 is an investigational oral small-molecule inhibitor of Embryonic Ectoderm Development (EED) that was discovered using FulcrumSeek™, Fulcrum’s proprietary discovery engine. Inhibition of EED leads to potent downregulation of key fetal globin repressors, including BCL11A, thereby causing an increase in fetal hemoglobin (HbF). FTX-6058 is being developed for the treatment of sickle cell disease (SCD) and other hemoglobinopathies. Initial data in SCD demonstrated proof-of-concept and achieved absolute levels of HbF increases associated with potential overall patient benefit. Through the March 2023 data cutoff date, FTX-6058 has been generally well-tolerated in people with SCD with up to three months of exposure with no serious treatment-emergent adverse events reported. FTX-6058 has been granted U.S. Food and Drug Administration (FDA) Fast Track designation and Orphan Drug Designation for the treatment of SCD. FTX-6058 is currently under a full clinical hold issued by the FDA.

About Sickle Cell Disease

Sickle cell disease (SCD) is a genetic disorder of the red blood cells caused by a mutation in the HBB gene. This gene encodes a protein that is a key component of hemoglobin, a protein complex whose function is to transport oxygen in the body. The result of the mutation is less efficient oxygen transport and the formation of red blood cells that have a sickle shape. These sickle shaped cells are much less flexible than healthy cells and can block blood vessels or rupture cells. People with SCD typically suffer from serious clinical consequences, which may include anemia, pain, infections, stroke, heart disease, pulmonary hypertension, kidney failure, liver disease, and reduced life expectancy.

About Losmapimod

Losmapimod is a selective p38α/β mitogen activated protein kinase (MAPK) inhibitor. Fulcrum exclusively in-licensed losmapimod from GSK following Fulcrum’s discovery of the role of p38α/β inhibitors in the reduction of DUX4 expression and an extensive review of known compounds. Results reported from the Phase 2b ReDUX4 trial demonstrated slowed disease progression and improved function, including positive impacts on upper extremity strength and functional measures supporting losmapimod’s potential to be a transformative therapy for the treatment of FSHD. Although losmapimod had never previously been explored in muscular dystrophies, it had been evaluated in more than 3,600 subjects in clinical trials across multiple other indications with no safety signals attributed to losmapimod. Losmapimod has been granted U.S. Food and Drug Administration (FDA) Fast Track designation and Orphan Drug Designation for the treatment of FSHD. Losmapimod is currently being evaluated in a Phase 3 multi-center randomized, double-blind, placebo-controlled, 48-week parallel-group study in people with FSHD (NCT05397470).

About FSHD

FSHD is a serious, rare, progressive and debilitating disease for which there are no approved treatments. It is characterized by fat infiltration of skeletal muscle leading to muscular atrophy involving primarily the face, scapula and shoulders, upper arms, and abdomen. Impact on patients includes relentless and accumulating muscle and functional loss impacting their ability to perform activities of daily living, loss of upper limb function, loss of mobility and independence, and chronic pain. FSHD is one of the most common forms of muscular dystrophy and has an estimated patient population of 16,000 to 38,000 in the United States alone.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this press release are forward-looking statements, including express or implied statements regarding Fulcrum’s clinical trials, including completion of enrollment in REACH and timing of topline data; Fulcrum’s ability to deliver an FDA-approved therapy for FSHD patients; the clinical hold on FTX-6058, including Fulcrum’s interactions with the FDA and ability to resolve such hold; Fulcrum’s activities under its recent license agreement with CAMP4; and Fulcrum’s cash runway; among others. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in, or implied by, such forward-looking statements. These risks and uncertainties include, but are not limited to, risks associated with resolving the clinical hold on FTX-6058 and responding to FDA’s requests; Fulcrum’s ability to continue to advance its product candidates in clinical trials; initiating and enrolling clinical trials on the timeline expected or at all; obtaining and maintaining necessary approvals from the FDA and other regulatory authorities; replicating in clinical trials positive results found in preclinical studies and/or earlier-stage clinical trials of losmapimod, FTX-6058 (if resumed) and any other product candidates; obtaining, maintaining or protecting intellectual property rights related to its product candidates; managing expenses; managing executive and employee turnover, including integrating a new CEO and CFO; and raising the substantial additional capital needed to achieve its business objectives, among others. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Fulcrum’s actual results to differ from those contained in the forward-looking statements, see the “Risk Factors” section, as well as discussions of potential risks, uncertainties, and other important factors, in Fulcrum’s most recent filings with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent Fulcrum’s views as of the date hereof and should not be relied upon as representing Fulcrum’s views as of any date subsequent to the date hereof. Fulcrum anticipates that subsequent events and developments will cause Fulcrum’s views to change. However, while Fulcrum may elect to update these forward-looking statements at some point in the future, Fulcrum specifically disclaims any obligation to do so.

Fulcrum Therapeutics, Inc. Selected Consolidated Balance Sheet Data (In thousands) (Unaudited)
		June 30, 2023				December 31, 2022
Cash, cash equivalents, and marketable securities		$	278,164			$	202,921
Working capital(1)			268,143				190,794
Total assets			300,332				226,685
Total stockholders’ equity			275,428				198,942

(1)    Fulcrum defines working capital as current assets minus current liabilities.

Fulcrum Therapeutics, Inc. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Collaboration revenue		$	880			$	1,882			$	1,175			$	4,474
Operating expenses:
Research and development			17,849				25,019				34,564				42,850
General and administrative			10,323				11,098				21,843				21,857
Total operating expenses			28,172				36,117				56,407				64,707
Loss from operations			(27,292	)			(34,235	)			(55,232	)			(60,233	)
Other income, net			3,509				165				6,670				235
Net loss		$	(23,783	)		$	(34,070	)		$	(48,562	)		$	(59,998	)
Net loss per share, basic and diluted		$	(0.38	)		$	(0.83	)		$	(0.80	)		$	(1.47	)
Weighted-average common shares outstanding, basic and diluted			61,794				40,890				60,764				40,768

Contact:

Investors:

Chris Calabrese
LifeSci Advisors, LLC
[email protected] 
917-680-5608

Media:

Dee Smith
Executive Director, Corporate Communications
Fulcrum Therapeutics, Inc.
[email protected] 
202-746-1324

— Q2 2023 ORLADEYO net revenue of $81.0 million (+24 percent y-o-y)—

— On-track to achieve ≥ $320 million in full year 2023 ORLADEYO revenue and $1 billion in peak ORLADEYO revenue—

— Q2 2023 GAAP EPS of ($0.40), non-GAAP EPS of ($0.24), excluding one-time debt extinguishment fee of $29 million—

— BCX10013, once-daily, oral Factor D inhibitor, clinical trial in patients expected to begin enrollment by end of year—

—Company to host R&D day on Friday, November 3



^rd



to introduce additional pipeline assets and programs—

RESEARCH TRIANGLE PARK, N.C., Aug. 03, 2023 (GLOBE NEWSWIRE) — BioCryst Pharmaceuticals, Inc. (Nasdaq:BCRX) today reported financial results for the second quarter ended June 30, 2023, and provided a corporate update.

“Our strong second quarter keeps us firmly on track to achieve no less than $320 million in ORLADEYO revenue this year, as our base of patients grows larger and larger every quarter. While ORLADEYO revenues continue to grow, we are also excited to host an R&D day in November to introduce new molecules and programs from our discovery platform that have the potential to replicate or exceed the success of ORLADEYO,” said Jon Stonehouse, president and chief executive officer of BioCryst.

Program Updates

ORLADEYO



^®



(berotralstat): Oral, Once-daily Treatment for Prevention of Hereditary Angioedema


 (HAE) Attacks

“The significant step-up in revenue we expected and achieved in the second quarter reflects the continued strong growth in patients taking ORLADEYO, the normal seasonality in revenue that follows first quarter prescription reauthorizations, and our steady improvement in helping patients get to reimbursed therapy. We recently attended the HAEA summit, attended by 1,200 patients and family members. Their strong interest and enthusiasm gave us even more confidence in our expectations for sustained long-term demand for ORLADEYO in the U.S. and globally,” said Charlie Gayer, chief commercial officer of BioCryst.

• ORLADEYO net revenue in the second quarter of 2023 was $81.0 million (+24.2 percent year-over-year (y-o-y)).
• Total growth in patients taking ORLADEYO continued on a strong, linear trajectory.
• The percentage of U.S. ORLADEYO patients receiving paid drug improved in the second quarter as the company made progress converting commercially-insured patients who had been receiving long-term free product, and as patients who received temporary free product during the first quarter prescription re-authorization process returned to reimbursed product in the second quarter.
• Sales from outside the U.S. contributed 10.1 percent of global ORLADEYO net revenues in the second quarter.
• The ongoing APeX-P trial in pediatric HAE patients who are 2 to <12 years of age continues to enroll as expected.

BCX10013—Oral Factor D Inhibitor

“Our goal with BCX10013 is to bring a best-in-class molecule to physicians and patients. That means a safe, highly effective, once-daily oral therapy, and we are now focused on preparing for enrollment in our dose-ranging trial in patients,” said Dr. Helen Thackray, chief research and development officer.

• The company has begun opening clinical trial sites for a dose-ranging trial in patients with paroxysmal nocturnal hemoglobinuria (PNH) and expects to begin patient enrollment (in countries without other approved therapies) by the end of the year. The trial is designed to identify a safe, effective, once-daily dose that BioCryst can advance into a pivotal program in renal complement-mediated diseases.
• The company also plans to complete an additional cohort of its multiple ascending dose trial (MAD) of BCX10013, at a higher dose (160 mg QD), in healthy volunteers to provide further information to the pharmacokinetic model.

Upcoming R&D Day—November 3, 2023

BioCryst will host a Research and Development (R&D) day at 1:00p ET on Friday, November 3 at its Research Center of Excellence in Birmingham, AL (the event also will be webcast live). At the R&D day, the company plans to introduce additional assets from its pipeline targeting rare diseases.

Second Quarter 2023 Financial Results  

For the three months ended June 30, 2023, total revenues were $82.5 million, compared to $65.5 million in the second quarter of 2022 (+25.9 percent year-over-year (y-o-y)). The increase was primarily due to $81.0 million in ORLADEYO net revenue in the second quarter of 2023, compared to $65.2 million in ORLADEYO net revenue in the second quarter of 2022 (+24.2 percent y-o-y).

R&D expenses for the second quarter of 2023 decreased to $51.2 million from $62.0 million in the second quarter of 2022 (-17.3 percent y-o-y), primarily due to decreased investment in both the BCX9250 and complement programs, partially offset by increased investment in the early-stage pipeline.

Selling, general and administrative expenses for the second quarter of 2023 increased to $51.0 million, compared to $38.0 million in the second quarter of 2022 (+34.1 percent y-o-y). The increase was primarily due to increased investment to support the commercial launch of ORLADEYO and expanded international operations.

Interest expense was $28.9 million in the second quarter of 2023, compared to $24.0 million in the second quarter of 2022 (+20.4 percent y-o-y). The increase is primarily driven by additional interest to service the Pharmakon debt secured in April 2023.

Net loss for the second quarter of 2023 was $75.3 million, or $0.40 per share, compared to a net loss of $58.9 million, or $0.32 per share, for the second quarter of 2022. There was a $29.0 million one-time debt extinguishment fee related to the close-out of the Athyrium debt facility. Excluding this one-time event, non-GAAP net loss for the second quarter of 2023 was $0.24 per share.

Cash, cash equivalents, restricted cash and investments totaled $415.7 million at June 30, 2023, compared to $418.9 million at June 30, 2022. Operating cash use for the second quarter of 2023 was $13.5 million.

Non-GAAP Pro forma Financial Measures

The information furnished in this release includes non-GAAP pro forma financial measures that differ from measures calculated in accordance with generally accepted accounting principles in the United States of America (GAAP), including financial measures labeled as “non-GAAP” or “adjusted.”

We believe providing these non-GAAP measures, which show our pro forma results with these items adjusted, is valuable and useful since they allow the company and investors to better understand the company’s financial performance in the absence of these one-time events and allow investors to more accurately understand our second quarter 2023 results and more easily compare them to future results. These non-GAAP pro forma measures also correspond with the way we expected Wall Street analysts to compare our results. Our non-GAAP pro forma measures should be considered only as supplements to, and not as substitutes for or in isolation from, our other measures of financial information prepared in accordance with GAAP, such as GAAP revenue, operating income, net income, and earnings per share.

Our references to our second quarter 2023 and first six months 2023 “non-GAAP pro forma” financial measures of adjusted net loss and adjusted earnings per share constitute non-GAAP financial measures. They refer to our GAAP results, adjusted to show the results without the one-time loss on the extinguishment of the Athyrium term loans.

Financial
Outlook for 2023

The company expects full year 2023 global net ORLADEYO revenue to be no less than $320 million. Operating expenses for full year 2023, not including non-cash stock compensation, are expected to be flat to 2022 at approximately $375 million. While flat year-over-year, we expect reductions in R&D spending in 2023 following the discontinuation of the BCX9930 and BCX9250 programs in 2022 and the delay in the BCX10013 clinical program, offset by increases in SG&A to support the U.S. launch and global expansion of ORLADEYO.

Conference Call and Webcast

BioCryst management will host a conference call and webcast at 8:30 a.m. ET today to discuss the financial results and provide a corporate update. The live call may be accessed by dialing 1-866-777-2509 for domestic callers and 1-412-317-5413 for international callers. A live webcast and replay of the call will be available online in the investors section of the company website at www.biocryst.com.

About BioCryst Pharmaceuticals

BioCryst Pharmaceuticals discovers novel, oral, small-molecule medicines that treat rare diseases in which significant unmet medical needs exist and an enzyme plays a key role in the biological pathway of the disease. Oral, once-daily ORLADEYO^® (berotralstat) is approved in the United States and many global markets. BioCryst has active programs to develop oral medicines for multiple targets across the complement system, including BCX10013, an oral Factor D inhibitor in clinical development. RAPIVAB^® (peramivir injection) is approved in the U.S. and multiple global markets, with post-marketing commitments ongoing. For more information, please visit the company’s website at www.biocryst.com.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding future results, performance or achievements. These statements involve known and unknown risks, uncertainties and other factors which may cause BioCryst’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Some of the factors that could affect the forward-looking statements contained herein include: the ongoing COVID-19 pandemic, which could create challenges in all aspects of BioCryst’s business, including without limitation delays, stoppages, difficulties and increased expenses with respect to BioCryst’s and its partners’ development, regulatory processes and supply chains, negatively impact BioCryst’s ability to access the capital or credit markets to finance its operations, or have the effect of heightening many of the risks described below or in the documents BioCryst files periodically with the Securities and Exchange Commission; BioCryst’s ability to successfully implement its commercialization plans for, and to commercialize, ORLADEYO, which could take longer or be more expensive than planned; the results of BioCryst’s partnerships with third parties may not meet BioCryst’s current expectations; risks related to government actions, including that decisions and other actions, including as they relate to pricing, may not be taken when expected or at all, or that the outcomes of such decisions and other actions may not be in line with BioCryst’s current expectations; the commercial viability of ORLADEYO, including its ability to achieve market acceptance; ongoing and future preclinical and clinical development of BCX10013 and other product candidates may take longer than expected and may not have positive results; BioCryst may not be able to enroll the required number of subjects in planned clinical trials of product candidates; BioCryst may not advance human clinical trials with product candidates as expected; the FDA or other applicable regulatory agency may require additional studies beyond the studies planned for products and product candidates, may not provide regulatory clearances which may result in delay of planned clinical trials, may impose certain restrictions, warnings, or other requirements on products and product candidates, may impose a clinical hold with respect to product candidates, or may withhold, delay or withdraw market approval for products and product candidates; product candidates, if approved, may not achieve market acceptance; BioCryst’s ability to successfully commercialize its products and product candidates, manage its growth and compete effectively; risks related to the international expansion of BioCryst’s business; and actual financial results may not be consistent with expectations, including that revenue, operating expenses and cash usage may not be within management’s expected ranges. Please refer to the documents BioCryst files periodically with the Securities and Exchange Commission, specifically BioCryst’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, which identify important factors that could cause actual results to differ materially from those contained in BioCryst’s projections and forward-looking statements.

BCRXW

Contact:


John Bluth
+1 919 859 7910
[email protected]

BIOCRYST PHARMACEUTICALS, INC.
CONSOLIDATED FINANCIAL SUMMARY
(in thousands, except per share)
Statements of Operations (Unaudited)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2023			2022					2023			2022
Revenues:
ORLADEYO	$	81,009			$	65,223			$	149,423			$	114,927
Other		1,482				309				1,846				528
Total revenues		82,491				65,532				151,269				115,455
Expenses:
Cost of product sales		894				246				1,825				482
Research and development		51,247				61,990				99,635				127,350
Selling, general and administrative		50,997				38,017				98,864				72,299
Royalty		56				1				63				3
Total operating expenses		103,194				100,254				200,387				200,134
Loss from operations		(20,703	)			(34,722	)			(49,118	)			(84,679	)
Interest and other income		3,750				609				7,128				663
Interest expense		(28,915	)			(24,022	)			(56,311	)			(47,859	)
Foreign currency gains (losses), net		301				132				72				(45	)
Loss on extinguishment of debt		(29,019	)			–				(29,019	)			–
Loss before income taxes		(74,586	)			(58,003	)			(127,248	)			(131,920	)
Income tax expense		740				856				1,411				1,135
Net loss	$	(75,326	)		$	(58,859	)		$	(128,659	)		$	(133,055	)
Basic and diluted net loss per common share	$	(0.40	)		$	(0.32	)		$	(0.68	)		$	(0.72	)
Weighted average shares outstanding		189,118				185,605				188,815				185,253
Balance Sheet Data (in thousands)
	June 30, 2023								December 31, 2022
	(Unaudited)								(Note 1)
Cash, cash equivalents and investments	$	414,115							$	442,387
Restricted cash		1,574								1,472
Receivables		57,667								50,599
Total assets		529,885								550,000
Secured term loan		293,176								231,624
Royalty financing obligation		526,121								501,655
Accumulated deficit		(1,583,279			)					(1,454,620			)
Stockholders’ deficit		(388,713			)					(294,597			)
Shares of common stock outstanding		189,491								187,906
Note 1: Derived from audited financial statements.
Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share (in thousands)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2023				2022				2023				2022
GAAP net loss	$	(75,326	)		$	(58,859	)		$	(128,659	)		$	(133,055	)
Less : One-time loss on extinguishment of Athyrium term loans		(29,019	)			–				(29,019	)			–
Adjusted net loss	$	(46,307	)		$	(58,859	)		$	(99,640	)		$	(133,055	)
GAAP basic and diluted net loss per common share	$	(0.40	)		$	(0.32	)		$	(0.68	)		$	(0.72	)
Adjusted basic and diluted net loss per common share	$	(0.24	)		$	(0.32	)		$	(0.53	)		$	(0.72	)

 

 

LONDON and SALT LAKE CITY, Aug. 03, 2023 (GLOBE NEWSWIRE) — Renalytix plc (LSE: RENX) (NASDAQ:RNLX) announces the launch of its Clinical Advisory Board, a world-leading, multi-disciplinary clinical group, to help advance the use of FDA authorized kidneyintelX.dkd™ in mitigating uncontrolled kidney disease progression and guiding early stage treatment strategies for the estimated 14 million Americans with diabetic kidney disease.¹

Commenting on the board’s formation, Dr. Ralph DeFronzo said, “Now is the time when we can change the entire conversation around kidney disease from the current focus on better management of dialysis and transplant to preventative medicine and preserving kidney health early on. The confluence of new diagnostic technology, such as kidneyintelX.dkd, and new effective drug therapies, including SGLT2 inhibitors, has swung the door wide open to prevent millions of people from experiencing the life changing effects of uncontrolled kidney disease. We must now act deliberately to make sure primary care doctors, nurse practitioners and physician assistants across the U.S., and around the world, have access to these clinical advances.”

Diabetic kidney disease (DKD) is a complication in up to 40% of patients with type 2 diabetes² and in approximately 60% of patients aged 65 years and older³. In multiple published studies, KidneyIntelX in vitro prognostic technology has shown the ability to provide reliable and actionable information to guide care and enable primary care physicians to recognize and act on early-stage kidney risk when therapies are most effective, thereby improving kidney health.

The Clinical Advisory Board members include:

• Stephen Brunton, MD, FAAFP, CDCES; University of North Carolina, Executive Director of Primary Care Metabolic Group (PCMG) and Editor-in-Chief of Clinical Diabetes
• Matthew Jay Budoff, MD, FACC, FAHA; David Geffen School of Medicine at UCLA and Endowed Chair of Preventive Cardiology at Harbor-UCLA Medical Center
• Barry I. Freedman, MD, FACP; John Felts Distinguished Professor and Chief of the Nephrology Section at Wake Forest University School of Medicine
• Ralph A. DeFronzo, MD; Professor of Medicine and Chief of the Diabetes Division at the University of Texas Health Science Center and the Deputy Director of the Texas Diabetes Institute
• Holly J. Mattix-Kramer MD, MPH; Division of Nephrology and Hypertension at Loyola University Chicago, Associate Director of Research for the Medicine Service Line and Founding Director of the Hines VA Serwa Research Center on Aging
• Javier Morales MD, FACP, FACE; Vice President and Principal Clinical Trials Investigator at Advanced Internal Medicine Group
• Joseph A. Vassalotti MD; Chief Medical Officer of the National Kidney Foundation (NKF) and Clinical Professor of Medicine in the Division of Nephrology at Icahn School of Medicine at Mount Sinai
• Eugene E. Wright Jr., MD; Duke University Medical Center and Medical Director for Performance Improvement at the Charlotte Area Health Education Center

Renalytix is dedicated to promoting early action to enhance the quality of life for individuals impacted by diabetic kidney disease with its risk assessment test, kidneyintelX.dkd. KidneyintelX.dkd is the only FDA approved risk assessment test, developed from the KidneyIntelX technology platform which has achieved broad scale reimbursement, for identifying risk for rapid kidney disease progression, thus enabling clinicians to intervene early with guideline-recommended actions. Clinical actions are most effective for preserving kidney and cardiovascular health in DKD stages 1-3 before significant and irreversible kidney function loss has occurred.

Based on the sheer numbers of people in the United States with type 2 diabetes (37 million)¹ and chronic kidney disease, (37 million)⁴ early-stage patients are typically under the management of primary care practices. Renalytix will engage with the Clinical Advisory Board to provide an urgent call to action for primary care clinicians to diagnose, risk assess and treat their patients with stage 1-3 CKD, specifically in type 2 diabetics. The board will also advise the Company on education and outreach activities to promote adoption of best practices in kidney disease management, appropriate coordination with specialists including nephrologists and endocrinologists, and guideline recommendations.

About Chronic Kidney Disease

Kidney disease is now recognized as a public health epidemic affecting over 850 million people globally. The Centers for Disease Control and Prevention (CDC) estimates that 15% of US adults, more than 37 million people⁴, currently have chronic kidney disease (CKD). Diabetes is the leading cause of kidney failure, accounting for 44% of new cases. Further, the CDC reports that 9 out of 10 adults with CKD do not know they have it and one out of two people with very low kidney function who are not on dialysis do not know they have CKD.⁵ Kidney disease is referred to as a “silent killer” because it often has no symptoms and can go undetected until a very advanced stage. Each year, kidney disease kills more people than breast and prostate cancer. Every day, 13 patients in the United States die while waiting for a kidney transplant.

About Type 2 Diabetes

More than 37 million Americans have diabetes (about 1 in 10)¹, and approximately 90-95% of them have type 2 diabetes. Type 2 diabetes most often develops in people over age 45, but more and more children, teens, and young adults are also developing the disease⁶. Type 2 diabetes symptoms often develop over several years and approximately 23% of adults with Type 2 Diabetes are undiagnosed⁷. Type 2 diabetes affects many major organs, including the heart, blood vessels, nerves, eyes and kidneys. Diabetic kidney disease develops in 30-50% of Type 2 diabetes patients⁴.

About Renalytix

Renalytix (NASDAQ: RNLX) (LSE: RENX) is an in-vitro diagnostics and laboratory services company that is the global founder and leader in the new field of bioprognosis™ for kidney health. The leadership team, with a combined 200+ years of healthcare and in-vitro diagnostic experience, has designed its KidneyIntelX laboratory developed test to enable risk assessment for rapid progressive decline in kidney function in adult patients with T2D and early CKD (stages 1-3). We believe that by understanding how disease will progress, patients and providers can take action early to improve outcomes and reduce overall health system costs. For more information, visit www.renalytix.com.

About KidneyIntelX™

KidneyIntelX™ is a laboratory developed test demonstrated to be a reliable, bioprognostic™ methodology that yields a simple-to-understand, custom risk score, enabling prediction of which adult patients with T2D and early CKD (stages 1-3) are at low, intermediate or high risk for rapidly progressive decline in kidney function. By combining information from KidneyIntelX with newer cardio- and reno-protective therapies, doctors will have more information in determining which patients are at higher versus lower risk for rapid disease progression and may be able to more appropriately target resources and guideline-recommended treatments to advance kidney health. KidneyIntelX is supported by a growing body of clinical, utility and health economic studies (including a validation study of two large cohorts) and has demonstrated a 72% improvement in predicting those patients who are at high risk for rapid progressive decline in kidney function versus the current standard of care (eGFR and UACR). To learn more about KidneyIntelX and review the evidence, visit www.kidneyintelx.com.

Sources
1. Centers for Disease Control and Prevention. https://www.cdc.gov/diabetes/basics/index.html
2. Gheith O, Farouk N, Nampoory N, et al. Diabetic kidney disease: worldwide difference of prevalence and risk factors. J Nephropharmacol. 2015 Oct 9;5(1):49-56. PMID: 28197499; PMCID: PMC5297507
3. Wu B, Bell K, Stanford A, et al. Understanding CKD among patients with T2DM: prevalence, temporal trends, and treatment patterns—NHANES 2007–2012. BMJ
4. https://www.cdc.gov/kidneydisease/basics.html
5. https://www.theisn.org/blog/2020/11/27/more-than-850-million-worldwide-have-some-form-of-kidney-disease-help-raise-awareness/
6. https://www.cdc.gov/diabetes/basics/type2.html
7. https://www.cdc.gov/diabetes/data/statistics-report/index.html

Forward Looking Statements

Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Examples of these forward-looking statements include statements concerning: the potential benefits, including economic savings, of KidneyIntelX, the impact KidneyIntelX can have on patients’ enhanced understanding of kidney disease and motivation to make lifestyle changes, the commercial prospects of KidneyIntelX, including whether and to what extent KidneyIntelX will be successfully adopted by physicians and distributed and marketed, our expectations regarding reimbursement decisions and the ability of KidneyIntelX to curtail costs of chronic and end-stage kidney disease, optimize care delivery, address systemic inequalities and improve patient outcomes. Words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “seeks,” and similar expressions are intended to identify forward-looking statements. We may not actually achieve the plans and objectives disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. Any forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. These risks and uncertainties include, among others: that KidneyIntelX is based on novel artificial intelligence technologies that are rapidly evolving and potential acceptance, utility and clinical practice remains uncertain; we have only recently commercially launched KidneyIntelX; and risks relating to the impact on our business of the COVID-19 pandemic or similar public health crises. These and other risks are described more fully in our filings with the Securities and Exchange Commission (SEC), including the “Risk Factors” section of our annual report on Form 20-F filed with the SEC on October 31, 2022, and other filings we make with the SEC from time to time. All information in this press release is as of the date of the release, and we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

For Media Inquiries Contact:

United States:

Karla Gonye
Renalytix
617-590-5731

[email protected]

David Schull or Ignacio Guerrero-Ros, Ph.D.
Russo Partners
858-717-2310
646-942-5604
[email protected]
[email protected]
Outside of the United States:
Walbrook PR Limited
Paul McManus / Lianne Applegarth / Alice Woodings

Tel: 020 7933 8780 or [email protected]
Mob: 07980 541 893 / 07584 391 303 / 07407 804 654

Reported $6.6M in Q2’23 Libmeldy net sales, representing the highest quarter to date

$34.0M of additional capital from second closing of strategic financing extends runway to mid-2025

Four MLD patients identified from ~150,000 newborns screened in prospective studies suggests significantly higher incidence than previously estimated in the medical literature

Six presentations at ASGCT demonstrate the ability of HSC gene therapy to address neurometabolic and CNS disorders, as well as larger indications

Company to host conference call and live webcast today at 8:00 a.m. EDT

BOSTON and LONDON, Aug. 03, 2023 (GLOBE NEWSWIRE) — Orchard Therapeutics (Nasdaq: ORTX), a global gene therapy leader, today announced several business accomplishments along with its financial results for the quarter ended June 30, 2023.

“With the completion of the rolling BLA submission for OTL-200 to the FDA, we are now one significant step closer to bringing this important therapy to families in the U.S. affected by MLD who currently have no treatment options beyond supportive care,” said Bobby Gaspar, M.D., Ph.D., chief executive officer. “We look forward to working with the agency throughout the filing and review process and expect to hear from the FDA regarding acceptance of the BLA in the third quarter of this year.”

Dr. Gaspar continued, “In addition, the $34 million in proceeds from the second closing of our strategic financing ensures we are well-capitalized to progress U.S. launch preparations, continue investing in initiatives aimed at accelerating commercial growth in Europe, and advance our next-in-line neurometabolic programs in MPS disorders. The next 12 months have the potential to provide Orchard Therapeutics several breakout opportunities as we work to cement our leadership position in the HSC gene therapy field.”

BLA Submission Completed for OTL-200 in the U.S.

The company has completed the rolling submission of its Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for OTL-200, in children with early-onset metachromatic leukodystrophy (MLD). OTL-200 previously received both Rare Pediatric Disease (RPD) and Regenerative Medicine Advanced Therapy (RMAT) designations from the FDA. Orchard Therapeutics has requested priority review, which if granted, would put OTL-200 on track for a potential U.S. approval in the first half of 2024.

OTL-200 is approved as Libmeldy^® (atidarsagene autotemcel) by the European Commission (EC) and Medicines and Healthcare products Regulatory Agency (MHRA). The clinical development program for Libmeldy comprises data spanning 39 children and encompassing more than 10 years follow-up in the earliest treated patients.

Second Closing of Strategic Financing Resulted in $34.0M of New Capital

In June 2023, the company completed the second closing of its previously announced strategic financing, resulting in $34.0 million of new capital before placement agent and transaction fees, bringing the total raised to $68.0 million. These securities were sold at a significant premium to the company’s share price on the date of issuance. Orchard Therapeutics expects funding from the first and second closing to provide cash runway to mid-2025.

The company could bring in up to an additional $120 million in proceeds in 2024 at a price of $11.00 per American Depositary Share (ADS) following potential U.S. approval of OTL-200 if all warrants sold as part of the securities purchase agreement are exercised by participating investors.

Libmeldy Commercial Momentum and Newborn Screening Updates

• Orchard Therapeutics has secured reimbursement agreements for Libmeldy in four additional European countries in 2023. Most recently, The Decision Forum for New Approaches in Norway agreed to authorize Libmeldy for all eligible patients with early-onset MLD. Eligible MLD patients in Norway will be referred to the company’s treatment center in Sweden, once it is fully qualified.
• To date, nine prospective newborn screening studies are active throughout Europe, the U.S. and the Middle East. By the end of 2023, more than 200,000 newborns are expected to have been screened.
  • Four confirmed cases of MLD have been identified following the screening of approximately 150,000 newborns globally as of June 30.
  • These preliminary findings suggest an incidence rate closer to one in 50,000 live births versus prior estimates in medical literature of one in 100,000.
  • Multiple eligible MLD patients identified in these studies have been or are expected to be treated commercially with Libmeldy in 2023, continuing to add to the pipeline of potential patients.
• In addition, efforts are underway to enable universal newborn screening for MLD, notably:
  • In the U.S., the Illinois state legislature passed the Newborn Metabolic Screening Act, also known as SB67, which requires the state Department of Public Health to screen all newborns for MLD. The bill was signed by the governor last week, and it is expected Illinois will start the process of implementing statewide screening for MLD this year.
  • In Germany, following the positive identification of three newborns with MLD from a prospective study, progress has been made toward an application for nationwide screening.

Chief Commercial Officer Braden Parker added, “Since launch, we have generated nearly $26 million in total revenue for Libmeldy in Europe and continue to be successful treating eligible patients in countries with reimbursement agreements, while expanding our commercial reach geographically. We are proud to support newborn screening research for MLD to generate the data necessary to enable the implementation of universal MLD screening, which will help ensure timely diagnosis and treatment referral so children and their families can be offered the opportunity for the best possible outcomes. The data generated thus far from these studies suggests a significantly higher incidence than was previously estimated in the literature and may lead to a greater commercial opportunity for Libmeldy. We remain on track to meet our goal of year-over-year revenue growth in 2023, and with the completion of our rolling BLA submission for OTL-200 in MLD, we are ramping up our U.S. pre-launch activities.”

Recent Data Presentations

Six presentations demonstrating the company’s leadership in neurometabolic and CNS disorders, as well as the ability of hematopoietic stem cell (HSC) gene therapy to address larger indications were featured at the 26th Annual Meeting of the American Society of Gene and Cell Therapy (ASGCT) in Los Angeles. The totality of the data highlights the ability of gene modified HSCs to migrate into multiple organ systems including bone, central nervous system and gastrointestinal tract and deliver therapeutic enzymes and proteins locally to effect disease correction.

Data highlights included:

• Additional OTL-203 proof-of-concept data demonstrated extensive metabolic correction in the skeletal system of patients with mucopolysaccharidosis type I Hurler syndrome (MPS-IH) resulting in normal growth rates, skeletal remodeling, improvement in joint function and progressive acquisition of motor skills.
• Updated OTL-201 data from the ongoing proof-of-concept study in mucopolysaccharidosis type IIIA (MPS-IIIA) patients showed additional favorable neurocognitive outcomes compared to disease natural history with median follow-up of 2.5 years.
• The first preclinical data for OTL-204 highlighted the ability of HSC gene therapy to express progranulin in the CNS, modulate neuroinflammation, and normalize predictive biomarkers in the progranulin form of frontotemporal dementia (GRN-FTD).
• Preclinical proof-of-concept data showed the therapeutic potential of OTL-104 for nucleotide-binding oligomerization domain containing protein 2 (NOD2) Crohn’s, a severe and treatment-refractory form of the disease.
• In vivo data demonstrated the feasibility of utilizing HSC gene therapy to provide stable and targeted immunotherapy, through the ability of HSCs to differentiate into T regulatory (Treg) cells engineered to express chimeric antigen-specific receptors (CAR). This approach combines the proven durability of HSC gene therapy with the specific suppressive activity of CAR-Treg cells as a potential one-time treatment for autoimmune disorders.

Remaining 2023 Expected Milestones

Orchard Therapeutics has outlined the following key milestones expected for the remainder of 2023:

• 
  Libmeldy
  
  : Continue to establish additional qualified treatment centers and expand newborn screening activities throughout Europe, the U.S. and the Middle East.
• 
  OTL-200 for MLD
  
  : Secure acceptance of the BLA submission by FDA in advance of a potential U.S. approval in the first half of 2024.
• 
  OTL-203 for MPS-IH
  
  : Initiate a global, multi-center registrational trial by year end.
• 
  OTL-104 for NOD2-Crohn’s disease
  
  : Commence IND- and CTA-enabling studies in the second half of 2023, ahead of a potential filing in 2025.
• Advance the company’s other pre-clinical programs, which includes OTL-204 in the progranulin form of FTD and OTL-105 partnered with and funded by Pharming Group N.V. in hereditary angioedema (HAE).

Second Quarter 2023 Financial Results

Total revenue was $7.3 million for the three months ended June 30, 2023, comprising $6.6 million in Libmeldy revenue and $0.7 million in collaboration revenue. This compares to total revenue of $4.4 million, comprising $3.2 million in Libmeldy revenue, $0.6 million of Strimvelis revenue and $0.6 million in collaboration revenue in the same period in 2022. Libmeldy revenue increased 111% compared to the corresponding period in the prior year. The cost of product sales, which includes the cost of manufacturing, royalties to third parties and non-cash amortization, was $2.2 million during the second quarter of 2023 compared to $1.1 million in the same period in 2022. The company reported gross margins of approximately 70% for the three months ended June 30, 2023.

For the three months ended June 30, 2023, the company reported research and development (R&D) expenses of $16.7 million, compared to $22.0 million in the same period in 2022, a decrease of 24%. The decline primarily resulted from the reprioritizing the company’s portfolio in 2022 and the realignment of its R&D organization with a more focused strategy. R&D expenses include the costs of clinical trials and pre-clinical work on the company’s portfolio of investigational gene therapies, as well as costs related to regulatory, manufacturing, license fees and milestone payments under the company’s agreements with third parties, and personnel costs to support these activities.

For the three months ended June 30, 2023, the company reported selling, general and administrative (SG&A) expenses of $11.0 million compared to $13.7 million in the same period in 2022, a decrease of 20%. The decline resulted primarily from the realization of savings in SG&A expenditures from the restructuring announced in March 2022.

Loss from operations was $22.6 million in the three months ended June 30, 2023, compared to a loss from operations of $32.4 million in the corresponding period of 2022, a decrease of 30%. The reduction resulted from a combination of higher Libmeldy product sales as well as lower operating expenses. The company expects its operating loss will continue to decline as Libmeldy revenue grows in Europe combined with a potential commercial launch in the U.S. in 2024.

Total other income was $10.3 million for the three months ended June 30, 2023. The company reported an $8.2 million gain relating to the fair value remeasurements of warrants and other liabilities that were issued in connection with the first and second closings of the strategic financing entered into in March 2023. The outstanding warrants will continue to be remeasured in future periods resulting in non-cash gains or losses based on a number of valuation assumptions on the underlying financial instruments.

Net loss was $12.3 million for the three months ended June 30, 2023, compared to $51.1 million in the same period in 2022, a reduction of 76%. The company had approximately 227.2 million ordinary shares, equivalent to 22.7 million American Depositary Shares, outstanding as of June 30, 2023.

The company expects its cash used to fund operations in 2023 to decline as compared to 2022 due to an anticipated increase in revenue from Libmeldy product sales and ongoing management of operating expenses.

As of June 30, 2023, the company reported cash, cash equivalents and investments of approximately $155.0 million, with $27.9 million of debt outstanding, compared to $148.0 million and $32.4 million of debt outstanding as of December 31, 2022. Orchard Therapeutics expects that its existing cash, cash equivalents and investments will fund its anticipated operating, debt service and capital expenditure requirements to mid-2025.

Conference Call and Webcast

The company will host a conference call and live webcast today at 8:00 a.m. EDT to review business updates and its second quarter 2023 financial results.

A live webcast will be available under “News & Events” in the Investors & Media section of the company’s website at www.orchard-tx.com. Analysts wishing to participate in the question and answer session should use this link to register. A replay of the webcast will be archived on the Orchard website following the presentation.

About Libmeldy / OTL-200

Libmeldy (atidarsagene autotemcel), also known as OTL-200, has been approved by the European Commission for the treatment of MLD in eligible early-onset patients characterized by biallelic mutations in the ARSA gene leading to a reduction of the ARSA enzymatic activity in children with i) late infantile or early juvenile forms, without clinical manifestations of the disease, or ii) the early juvenile form, with early clinical manifestations of the disease, who still have the ability to walk independently and before the onset of cognitive decline. Libmeldy is the first therapy approved for eligible patients with early-onset MLD.

The most common adverse reaction attributed to treatment with Libmeldy was the occurrence of anti-ARSA antibodies. In addition to the risks associated with the gene therapy, treatment with Libmeldy is preceded by other medical interventions, namely bone marrow harvest or peripheral blood mobilization and apheresis, followed by myeloablative conditioning, which carry their own risks. During the clinical studies of Libmeldy, the safety profiles of these interventions were consistent with their known safety and tolerability.

For more information about Libmeldy, please see the Summary of Product Characteristics (SmPC) available on the European Medicines Agency (EMA) website.

Libmeldy is approved in the European Union, UK, Iceland, Liechtenstein and Norway. OTL-200 is an investigational therapy in the U.S.

Libmeldy was developed in partnership with the San Raffaele-Telethon Institute for Gene Therapy (SR-Tiget) in Milan, Italy.

About Orchard Therapeutics

At Orchard Therapeutics, our vision is to end the devastation caused by genetic and other severe diseases. We aim to do this by discovering, developing and commercializing new treatments that tap into the curative potential of hematopoietic stem cell (HSC) gene therapy. In this approach, a patient’s own blood stem cells are genetically modified outside of the body and then reinserted, with the goal of correcting the underlying cause of disease in a single treatment.

In 2018, the company acquired GSK’s rare disease gene therapy portfolio, which originated from a pioneering collaboration between GSK and the San Raffaele Telethon Institute for Gene Therapy in Milan, Italy. Today, Orchard is advancing a pipeline spanning pre-clinical, clinical and commercial stage HSC gene therapies designed to address serious diseases where the burden is immense for patients, families and society and current treatment options are limited or do not exist.

Orchard has its global headquarters in London and U.S. headquarters in Boston. For more information, please visit www.orchard-tx.com, and follow us on Twitter and LinkedIn.

Availability of Other Information About Orchard

Investors and others should note that Orchard communicates with its investors and the public using the company’s website (www.orchard-tx.com), the investor relations website (ir.orchard-tx.com), and on social media (Twitter and LinkedIn), including but not limited to investor presentations and investor fact sheets, U.S. Securities and Exchange Commission (SEC) filings, press releases, public conference calls and webcasts. The information that Orchard posts on these channels and websites could be deemed to be material information. As a result, Orchard encourages investors, the media, and others interested in Orchard to review the information that is posted on these channels, including the investor relations website, on a regular basis. This list of channels may be updated from time to time on Orchard’s investor relations website and may include additional social media channels. The contents of Orchard’s website or these channels, or any other website that may be accessed from its website or these channels, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933.

Forward-Looking Statements

This press release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. Such forward-looking statements may also be identified by words such as “anticipates,” “potential,” “expects” and other similar expressions. Forward-looking statements include express or implied statements relating to, among other things: Orchard’s estimates and expectations with respect to its financial performance, including revenue, expenses, trend of cash-burn rates and cash-runway; the incidence rate of diseases that our products and product candidates are intended to treat, including the incidence of MLD; the therapeutic potential of Orchard’s products and product candidates, including the ability of HSC gene therapy to address larger indications; Orchard’s expectations regarding the timing of regulatory submissions and approvals of its product candidates, including the timeline for acceptance of Orchard’s BLA submission for OTL-200; Orchard’s expectations regarding the timing of U.S. approval for OTL-200; the additional proceeds receivable by Orchard upon exercise of the warrants issued pursuant to its previously announced strategic financing; the number of newborns expected to be screened for MLD, and the timing and likelihood of additional newborn screening studies; and Orchard’s ability and expectations to meet its anticipated 2023 milestones, as further described in this release.

These statements are neither promises nor guarantees and are subject to a variety of risks and uncertainties, many of which are beyond Orchard’s control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, these risks and uncertainties include, without limitation: Orchard’s anticipated cash runway assumes U.S. FDA approval of OTL-200 in the first half of 2024, which may be delayed or not occur, and achievement of net sales in the U.S. and Europe in line with management’s forecasts, which may not happen; the risk that Orchard’s OTL-200 BLA submission is not accepted on the timeline we expect or at all; the risk that our revenues will be less than we anticipate; the risk that our expenses will be greater than we anticipate; the risk that Orchard is unable to set up additional qualified treatment centers and newborn screening or is delayed in doing so; the risk that Orchard will not maintain marketing approval; the risk that long-term adverse safety findings may be discovered; the risk that the warrants issued pursuant to Orchard’s previously announced strategic financing are not exercised, that only a subset of the warrants are exercised, or that the exercise price of the warrants is lower than anticipated due to a delay in OTL-200’s U.S. approval. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. Other risks and uncertainties faced by Orchard include those identified under the heading “Risk Factors” in Orchard’s most recent annual or quarterly report filed with the SEC, as well as subsequent filings and reports filed with the SEC. The forward-looking statements contained in this press release reflect Orchard’s views as of the date hereof, and Orchard does not assume and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Condensed Consolidated Statements of Operations Data (In thousands, except share and per share data) (Unaudited)
		Three Months Ended June 30,
		2023				2022
Product revenue, net		$	6,651			$	3,781
Collaboration revenue			663				587
Total revenue			7,314				4,368
Costs and operating expenses:
Cost of product revenue			2,189				1,122
Research and development			16,695				21,965
Selling, general and administrative			10,992				13,730
Total costs and operating expenses			29,876				36,817
Loss from operations			(22,562	)			(32,449	)
Other income (expense):
Interest income			1,391				213
Interest expense			(975	)			(672	)
Changes in fair value of PIPE warrant and unit liabilities			8,206				—
Other income (expense), net			1,658				(18,227	)
Total other income (expense), net			10,280				(18,686	)
Net loss before income taxes			(12,282	)			(51,135	)
Income tax benefit (expense)			(25	)			219
Net loss attributable to ordinary shareholders		$	(12,307	)		$	(50,916	)
Net loss per ordinary share, basic and diluted		$	(0.07	)		$	(0.40	)
Weighted average ordinary shares outstanding, basic and diluted			189,286,329				127,854,596

Condensed Consolidated Balance Sheet Data (In thousands) (Unaudited)
		June 30,				December 31,
		2023				2022
Assets
Current assets:
Cash and cash equivalents		$	38,273			$	68,424
Marketable securities			112,468				75,326
Accounts receivable			9,547				8,467
Inventory			6,937				3,400
Prepaid expenses and other current assets			5,540				6,586
Research and development tax credit receivable			8,525				5,942
Total current assets			181,290				168,145
Non-current assets:
Operating lease right-of-use-assets			21,018				22,774
Property and equipment, net			7,808				8,138
Research and development tax credit receivable, net of current portion			2,101				—
Restricted cash			4,215				4,215
Intangible assets, net			3,474				3,560
Other assets			12,396				12,075
Total non-current assets			51,012				50,762
Total assets		$	232,302			$	218,907
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable		$	6,950			$	9,318
Accrued expenses and other current liabilities			33,786				34,437
Deferred revenue, current			752				959
Operating lease liabilities			6,600				6,424
Notes payable, current			9,429				9,429
Total current liabilities			57,517				60,567
Notes payable, long-term			18,440				22,991
Deferred revenue, net of current portion			10,819				10,315
Operating lease liabilities, net of current portion			16,044				19,246
PIPE warrant liabilities			12,266				—
Other long-term liabilities			8,169				7,524
Total liabilities			123,255				120,643
Total shareholders’ equity			109,047				98,264
Total liabilities and shareholders’ equity		$	232,302			$	218,907

Contact

Benjamin Navon
+1 857-248-9454
[email protected]

WASHINGTON, Aug. 03, 2023 (GLOBE NEWSWIRE) — ZeroFox, (Nasdaq: ZFOX), an enterprise software-as-a-service leader in external cybersecurity, announced today that three new members were elected to its Board of Directors, effective June 29, 2023.

• Paul Hooper, former Chief Executive Officer and current member of the board of directors of Gigamon Inc
• Barbara Stewart, former CEO of AmeriCorps and current Trustee & Executive Director of the Bowe Stewart Foundation
• Teresa Shea, former Vice President at Raytheon and Senior Executive at the National Security Agency

“We’re thrilled to bring these talented and experienced leaders to the ZeroFox Board,” said James C. Foster, Chairman and CEO of ZeroFox. “Each provides a unique perspective with diverse backgrounds across technology, cybersecurity and business strategy. ZeroFox will undoubtedly benefit from this passionate team to further our mission in creating a safer digital world.”

Paul Hooper said: “I am honored to be joining ZeroFox’s board of directors. The company’s innovative approach to cybersecurity empowers businesses to navigate the digital landscape with confidence and stay ahead of external cyber threats. As a board member, I am eager to contribute my experience in scaling technology companies to help ZeroFox reach new heights.”

Barbara Stewart said: “ZeroFox has exhibited impressive growth over the years, working to expand into new areas of the security industry, prioritizing relationships with customers and partners. I see great potential in ZeroFox’s comprehensive external cybersecurity platform and forward-looking strategy. I look forward to collaborating with the ZeroFox team and fellow board members to expand market reach and drive ZeroFox’s mission of creating a safer digital world.”

Teresa Shea said: “Joining ZeroFox’s board represents an incredible opportunity to make a real impact on the cybersecurity landscape. Businesses are faced with increased digital risk, and I believe ZeroFox’s cutting-edge technology and dedicated team are uniquely positioned to deliver robust protection. I am excited to leverage my industry expertise to help ZeroFox in their vision of building a safer digital environment for enterprises worldwide.”

About Paul Hooper

Paul Hooper has decades of experience in the technology industry having served in various executive positions at both private and public companies. From 2012 to 2022, Mr. Hooper served as the Chief Executive Officer and a member of the board of directors of Gigamon Inc., a cloud visibility and analytics provider. In 2022, he retired from his role as the CEO of Gigamon but remains on its board of directors. During his 11-year tenure at Gigamon, he led the company from its early stages as a private company, through an initial public offering and then through the subsequent acquisition by a private equity firm. Before serving as CEO, Mr. Hooper joined Gigamon in 2011 as the Vice President of Marketing. Prior to Gigamon, Mr. Hooper held various executive positions during a nine-year tenure at network infrastructure equipment developer Extreme Networks including Chief Marketing Officer, Chief Information Officer and General Manager. Prior to Extreme Networks, Mr. Hooper held numerous senior roles at technology companies including myCFO, JDS Uniphase, Netscape and Sun Microsystems. Since 2022, Mr. Hooper has been serving as an advisor to health-tech innovation incubator, Stanford Byers Center for Biodesign. In this role, he is the only non-medical technology advisor in which he reviews early-stage health-tech businesses, go-to-market initiatives, and acquisition/licensing feasibility.

About Barbara Stewart

Barbara Stewart has served in both the public sector and private industry during her career. From 2018 through 2021, Ms. Stewart served as the Chief Executive Officer of AmeriCorps, a position that required a Presidential appointment and confirmation by the U.S. Senate. AmeriCorps is the $1.1 billion federal agency with a dedicated mission to promote service and volunteerism. Prior to leading AmeriCorps, in 2013 Ms. Stewart co-founded, and remains active with, the Bowe-Stewart Foundation which focuses on closing the opportunity gap for urban residents in Baltimore and Chicago and promoting civic education and civic engagement. Ms. Stewart also held leadership roles in the private sector, including as a senior executive at JPMorgan Chase from 1999 until 2010. Early in her career, she served in policy and management roles for an Illinois Governor and two Lt. Governors. She earned a B.A. from Northwestern University and an M.B.A. from the Kellogg Graduate School of Management at Northwestern University and was awarded an Honorary Doctor of Humane Letters degree from Knox College.

About Teresa Shea

Teresa H. Shea has more than 35 years of public and private experience and is a recognized leader in intelligence and defense matters. Ms. Shea currently serves as the President of Oplnet, LLC, a business that provides expertise and experience to help government and commercial customers improve performance in the areas of national defense and intelligence. From 2019 to August 2022, she served as the Vice President of Cyber Offense and Defense Experts (CODEX) within Raytheon Intelligence and Space. CODEX is focused on providing cyber capabilities for offense, defense, and security initiatives for government and commercial customers. Prior to her work at CODEX, Ms. Shea served as Executive Vice President of Technology and director of Cyber-Reboot at In-Q-Tel. She joined In-Q-Tel after a distinguished 32-year career with the National Security Agency (NSA), where she held several key leadership assignments during her career culminating as the director of Signals Intelligence. In this position, she was the principal signals intelligence (SIGINT) advisor to the Directors of NSA, the Director of National Intelligence (DNI), numerous U.S. Military officers, and U.S. Government high-ranking officials. Ms. Shea has received numerous awards during her career, including the President’s Distinguished Rank Award from President George W. Bush and President Barack Obama, the National Intelligence Distinguished Service Medal awarded by the Honorable James R. Clapper, Director of National Intelligence, the Central Intelligence Agency’s Donovan Award, and the Department of Defense Medal for Distinguished Civilian Service by Secretary of Defense Ash Carter. Teresa holds a Bachelor of Science in electrical engineering from Georgia Tech and a Master of Science in electrical engineering from John Hopkins University.

About ZeroFox

ZeroFox (Nasdaq: ZFOX), an enterprise software-as-a-service leader in external cybersecurity, has redefined security outside the corporate perimeter on the internet, where businesses operate, and threat actors thrive. The ZeroFox platform combines advanced AI analytics, digital risk and privacy protection, full-spectrum threat intelligence, and a robust portfolio of breach, incident and takedown response capabilities to expose and disrupt phishing and fraud campaigns, botnet exposures, credential theft, impersonations, data breaches, and physical threats that target your brands, domains, people, and assets. Join thousands of customers, including some of the largest public sector organizations as well as finance, media, technology and retail companies to stay ahead of adversaries and address the entire lifecycle of external cyber risks. ZeroFox and the ZeroFox logo are trademarks or registered trademarks of ZeroFox, Inc. and/or its affiliates in the U.S. and other countries. Visit www.zerofox.com for more information.

ZeroFox Contacts

Media Relations
Maisie Guzi, ZeroFox
[email protected]

Investor Relations
Todd Weller, ZeroFox
[email protected]