2015: A year of substantial clinical progress in oncology
R&D, Partnership and Team Highlights:
- Significant advancement of the company’s proprietary pipeline in oncology, leading to presentation of promising interim Phase I data on MP0250 in patients with solid tumors
- Expansion of capabilities in oncology with several key hires, including the successful recruitment of Dr. Andreas Harstrick, Chief Medical Officer
- Pivotal Phase III trials for abicipar in wet age-related macular degeneration (AMD) initiated by partner Allergan, triggering a USD 15 million milestone fee
- Allergan committed to DARPin research alliance with an accelerated milestone payment of USD 35 million
- Molecular Partners advanced its portfolio of proprietary DARPin-based product candidates in immuno-oncology
Financial Highlights:
- CHF 215.4 million cash balance (including short-term time deposits) as of
Dec 31, 2015, up by CHF 27.0 million compared to year end 2014
- Positive operating cash flow of CHF 26.5 million, driven by CHF 51.2 million collections from strategic partners
- Net operating loss of CHF 2.2 million and marginal net loss of CHF 0.1 million,
in line with management’s expectations and the guidance provided
- 89 full-time equivalents as of Dec 31, 2015, up 20% over 12 months
- Strong, debt-free balance sheet to advance the company’s proprietary pipeline
Zurich-Schlieren, February 4, 2016. Molecular Partners AG (ticker: MOLN) today announced its unaudited financial results for 2015, a year marked by several major milestones in the development of novel compounds generated by the company’s DARPin technology platform, including potential treatments for cancer and ophthalmologic diseases. The company reported continued progress with its proprietary pipeline of anti-cancer treatments, including its lead oncology asset, MP0250, for which promising interim Phase I data were presented at a major oncology conference. The company also announced the initiation of pivotal Phase III trials of abicipar in wet age-related macular degeneration (AMD) by Allergan, one of the company’s strategic partners. Additionally, Molecular Partners strengthened its cash position and strategic collaborations through the receipt of milestone payments from Allergan, and bolstered its executive management team through the successful recruitment of Dr. Andreas Harstrick as Chief Medical Officer.
“Our steady progress in 2015, marked by the advancement of our broad and novel pipeline, the renewed commitment of our strategic partners to our innovative DARPin technology platform, and fortification of our already-strong financial position, leaves Molecular Partners poised for further success in 2016, a year in which we expect to meet several additional clinical milestones across multiple indications,” commented Molecular Partners CEO Christian Zahnd.
OPERATIONAL HIGHLIGHTS
Further advancement of proprietary pipeline, with key focus on MP0250
Molecular Partners has established its DARPin technology platform as a robust source for new product candidates. The company’s highly efficient processes for identifying mono-DARPins, and its proficient and modular approach to generating multi-DARPins, have become a key strength of Molecular Partners. This “DARPin toolbox” drives the discovery and development of new product candidates.
Advancing the company’s fully-owned, proprietary pipeline in oncology remains at the core of Molecular Partners’ managerial focus. The DARPin platform offers unlimited potential for creating differentiated anti-cancer therapies, as multi-DARPins can be engineered to address multiple pathways at once, synergistically. This capability offers the potential for greater efficacy and tolerability while allowing for possible combinations with other therapies.
MP0250, the most advanced systemic DARPin, has advanced through Phase I of clinical development for the treatment of solid tumors. On November 7, 2015, in a poster presentation at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston, Mass., USA, a team of independent researchers presented preliminary Phase I data showing that MP0250 was well-tolerated in patients with solid tumors, while also providing favorable pharmacokinetics (PK) and sustained exposure over multiple applications. The researchers also reported some early promising signals of potential activity: almost 50% of the patients in the study stayed on treatment for more than 3 months, with two patients being treated for 8 months and 12 months, repsectively. These results from the ongoing Phase I study constitute the first example of the feasibility of the DARPin approach as systemically administered therapies in oncology.
Based on the interim Phase I data, preclinical studies, published reports in the medical literature and interactions with key opinion leaders, Molecular Partners has announced the further development strategy for MP0250. The company will initiate the first Phase II study of this compound in the second half of 2016, in patients with multiple myeloma. The study will investigate the use of MP0250 in combination with bortezomib and dexamethasone in patients whose cancers became refractory while on bortezomib therapy, and had received at least two prior regimens including bortezomib and an immunomodulatory drug.
Beyond MP0250, Molecular Partners is advancing a growing proprietary pipeline of DARPin therapies. The pipeline includes MP0274, a multi-DARPin that targets HER2, providing broad blockade of HER1, HER2 and HER3-mediated signaling and inducing apoptosis (programmed cell death) in HER2-overexpressing cells. MP0274 is currently in preclinical development and is expected to enter into clinical development as early as the fourth quarter of 2016.
Molecular Partners is investing significant resources into a growing pipeline of immune-oncology programs. Immuno-oncology is a potentially game-changing approach to anti-cancer treatment, as it harnesses the power of the body’s immune system to fight cancer cells. The company’s immuno-oncology pipeline includes a number of DARPin-based candidates that are currently in research. Molecular Partners is applying the multi-DARPin concept to either create enhanced checkpoint modulators against validated immuno-oncology targets or to create highly potent candidates that are locally activated in the tumor environment.
Start of two abicipar Phase III studies in wet AMD by Allergan, underscoring the partner’s broad commitment to DARPins
Abicipar, Molecular Partners’ most advanced DARPin compound and first partnered product candidate, has entered Phase III of clinical development. Allergan, the company’s strategic partner, initiated two pivotal registration trials in wet AMD at the end of the second quarter of 2015. The Phase III program will evaluate the safety and efficacy of abicipar and its potential to improve vision gains with fewer treatment injections than is required with ranibizumab (Lucentis®), the current standard of care in wet AMD, thereby addressing two significant unmet medical needs for this patient population. The start of the Phase III trials was fully in-line with the original timeline developed by Molecular Partners and Allergan, despite the latter company’s acquisition by Actavis. The start of the first Phase III trial triggered a clinical milestone payment of USD 15 million to Molecular Partners.
Molecular Partners’ Chief Operating Officer (COO) Patrick Amstutz comments: “We would like to thank everyone who has contributed to the abicipar clinical development program, internally and externally, and for helping the company reach this important milestone while adhering to the envisaged timeline. We are pleased to see abicipar advancing in these Phase III trials in wet AMD, and we are confident to see further development of this product candidate in additional indications such as diabetic macular edema (DME).”
Partnerships: Allergan reinforces commitment to discovery alliance
Molecular Partners continues to collaborate with leading pharmaceutical companies to expand the reach of the DARPin platform, and to leverage these companies’ capabilities in developing breakthrough therapies.
On July 21, 2015, as a further sign of its commitment to the DARPin research and discovery alliance, Allergan agreed to make accelerated milestone payments of USD 35 million to Molecular Partners. The payments were made, following Allergan’s change of control, to maintain the broad alliance, which comprises several programs focusing on the discovery, research and development of DARPin‐based products in ophthalmology. These initiatives include a preclinical multi‐DARPin targeting Vascular Endothelial Growth Factor (VEGF) and Platelet Derived Growth Factor (PDGF), as well as several additional discovery programs.
In addition to the alliance with Allergan, the company is collaborating with Janssen Biotech on a multi-DARPin program in immunology. Within this alliance, Janssen evaluated DARPins against several targets thought to be important for the treatment of inflammatory and autoimmune diseases, and selected an undisclosed program for further development.
Under its current partnership agreements, Molecular Partners has the potential to earn up to CHF 1.9 billion in additional milestone payments, as well as up to double-digit tiered royalties on future global net product sales of each partnered program. Moreover, since Molecular Partners was founded, the company’s partnerships have generated CHF 215 million in non-equity funding via upfront and milestone payments as well as full-time employee (FTE) payments and cost-recharges. The non-equity funding includes the previously announced USD 50 million (CHF 48 million) milestone fees that were collected in July and August 2015.
Separately, in 2015, Molecular Partners and Roche discontinued a discovery alliance in oncology the two companies had entered into in December 2013. The alliance focused on the use of DARPins in combination with a bacterial toxin, for which Roche owns proprietary knowledge. Under the alliance, Molecular Partners delivered highly differentiated DARPins within a short time-frame. Clinical data from an antibody-bacterial toxin candidate led Roche to stop all work with this toxin. When Roche decided to refocus its discovery efforts away from bacterial toxins, this affected several antibody programs as well as the programs developed under Roche’s alliance with Molecular Partners, even though the decision was unrelated to DARPins.
TEAM HIGHLIGHTS
In March 2015, Molecular Partners announced the appointment of Dr. Andreas Harstrick as the company’s Chief Medical Officer (CMO) and member of the Executive Management Team. Dr. Harstrick is supporting the continued transformation of the company into a product development organization. He oversees the company’s clinical development activities and has already started to expand the clinical development team. Dr. Harstrick brings 28 years of experience in successfully developing antibody therapies in oncology from early stage to approval, including Erbitux® (cetuximab targeting EGFR) and Cyramza® (ramucirumab targeting VEGFR2). Furthermore, several times in his career Dr. Harstrick has built clinical oncology teams from scratch.
In August 2015, the company announced that, after a medical leave of three months, Dr. Christian Zahnd, CEO, returned to his full responsibilities.
FINANCIAL HIGHLIGHTS
Molecular Partners’ financial position for the full year 2015 developed in line with management’s expectations and the guidance provided to the capital markets. CFO Andreas Emmenegger summarizes the financial year 2015: “Consistent with the guidance provided to the markets, we were again able to close the full year 2015 with a positive net cash flow. Since Molecular Partners was founded in 2004, the company has generated a positive operating cash flow, which is an outstanding achievement for a biotech company in our stage of development. With CHF 215.4 million in cash and time deposits, and with no debt, we are in a very strong financial position to advance our proprietary programs through the final stages of development. Further, our strong balance sheet allows us the strategic flexibility to maximize the commercial potential of our proprietary DARPin platform and pipeline assets.”
Key figures FY 2015 (unaudited)
Key Financials (unaudited)
(CHF million, except per share, FTE data) |
FY 2015 |
FY 2014 |
change |
| Total revenues |
29.1 |
26.6 |
2.5 |
| R&D expenses |
-25.0 |
-19.8 |
-5.2 |
| G&A expenses |
-6.3 |
-5.0 |
-1.3 |
| Operating profit (loss) |
-2.2 |
1.8 |
-4.0 |
| Net profit (loss) |
-0.1 |
-2.3 |
2.2 |
| Basic net profit (loss) per share (in CHF) |
-0.01 |
-0.15 |
0.14 |
| Net cash from (used in) operating activities |
26.5 |
-11.3 |
37.8 |
| Cash & cash equivalents as of Dec 31 |
195.4 |
188.4 |
7.0 |
| Cash balance (incl. time deposits) as of Dec 31 |
215.4 |
188.4 |
27.0 |
| Total shareholders’ equity |
151.8 |
148.5 |
3.3 |
| Number of total FTE as of Dec 31 |
89.1 |
74.1 |
15.0 |
| – thereof in R&D |
80.7 |
67.2 |
13.5 |
| – thereof in G&A |
8.4 |
6.9 |
1.5 |
Income statement: In line with management expectations and guidance
In 2015, the company recognized total revenues of CHF 29.1 million, an increase of 9% compared to the previous year (2014: CHF 26.6 million). Total revenue of CHF 20.2 million was recorded with Allergan, CHF 7.4 million with Roche and CHF 1.4 million with Janssen. As of December 31, 2015, the company had CHF 59.1 million in deferred revenues on the balance sheet; these funds are expected to be recognized as revenues as follows: CHF 22.2 million in 2016, CHF 14.6 million in 2017, CHF 14.5 million in 2018 and CHF 7.8 million in 2019.
Overall, total operating expenses increased by CHF 6.5 million (+26%) to CHF 31.3 million (compared to CHF 24.8 million in 2014). These costs included CHF 4.4 million in non-cash effective share-based compensation and pension costs. The two major expense categories were personnel expenses of CHF 18.0 million (57% of total operating expenses) and research consumables and costs totaling CHF 7.0 million (22% of total operating expenses).
In 2015, the company generated an operating loss of CHF 2.2 million (compared to an operating profit of CHF 1.8 million in 2014). The decline from 2014 results mainly from increased R&D activities for the benefit of long-term value creation.
In 2015, Molecular Partners generated a financial result of CHF 2.1 million, an improvement of CHF 6.2 million over the previous year (2014: net financial expense of CHF 4.1 million, mainly driven by the CHF 7.1 million in IPO costs). Net financial income for 2015 included CHF 1.5 million in exchange gains on cash and on working capital positions held in USD and in EUR.
In 2015, the company’s net result was virtually break-even with a minor net loss of CHF 0.1 million (compared to a net loss of CHF 2.3 million in 2014). The improvement compared to the previous year was mainly driven by the positive financial results.
As of December 31, 2015 the company had 89.1 full-time employees (FTEs) on its payroll, including 80.7 FTEs (91%) in R&D and 8.4 FTEs (9%) in G&A. (By comparison, the company had 74.1 total FTEs on its payroll as of December 31, 2014.)
Balance sheet and capital resources: Strong position further reinforced in 2015
Total assets increased by CHF 25.4 million from CHF 194.0 million (as of December 31, 2014) to CHF 219.4 million (as of December 31, 2015). The increase mainly results from an increased cash balance amounting to CHF 215.4 million as of December 31, 2015 (including CHF 20.0 million in short-term time deposits). The company’s total cash balance represented 98% of the total balance sheet.
Compared to year-end 2014, total shareholder equity slightly increased by CHF 3.3 million to CHF 151.8 million (from CHF 148.5 million as of December 31, 2014). The company continues to be debt-free.
Cash flows: Driven by milestone collections from partners
In 2015, Molecular Partners generated a positive net cash flow from operations of CHF 26.5 million, compared to a negative net cash flow from operations of CHF 11.3 million in 2014. This substantial improvement was mainly driven by the collection of the announced USD 50 million milestone fees from Allergan in the second half of 2015 (including USD 15 million for the start of Phase III trials for abicipar as well as USD 35 million for Allergan’s commitment to the broader alliance).
Cash outflow from investing activities increased substantially to CHF 20.7 million (compared to a CHF 0.2 million cash outflow over the first half of 2014). This strong increase was driven by the temporary CHF 20.0 million investment into short-term time deposits. A CHF 1.4 million outflow was recorded for capital expenditure in equipment and a CHF 0.7 million inflow from interest and option premium. Net cash inflow from financing activities was CHF 0.2 million (compared to CHF 101.2 million in 2014, due to proceeds from the IPO). Overall, and including the CHF 20.0 million in time deposits, this resulted in a net increase of the company’s total cash balance by CHF 27.0 million from CHF 188.4 million at the end of 2014 to CHF 215.4 million as of year-end 2015.
OUTLOOK
Business outlook and priorities
In ophthalmology, the Molecular Partners team will remain focused on supporting its partner Allergan (and Pfizer, following the planned combination of the two companies) in progressing abicipar through Phase III trials in wet AMD, and possibly in initiating Phase III trials for abicipar in DME. Molecular Partners also plans to leverage the DARPin platform in ophthalmology by advancing the earlier-stage pipeline, including a multi-DARPin targeting VEGF and PDGF, in partnership with Allergan.
In oncology, Molecular Partners aims to complete Phase I studies of MP0250 in the treatment of solid tumors, including an ongoing dose-escalation study, preliminary results of which were presented at the AACR-NCI-EORTC conference in November 2015. On January 8, 2016, Molecular Partners announced its Phase II strategy for MP0250 in the treatment of multiple myeloma (MM). As part of the MM strategy, the company plans to conduct a Phase II trial of MP0250 in combination with bortezomib and dexamethasone, and expects to enroll the first patient in the second half of 2016. The company’s management team also remains committed to advancing MP0274 from preclinical to clinical development in 2016, and plans to initiate a Phase I trial of MP0274 by the end of the year.
Molecular Partners’ immuno-oncology pipeline remains a key priority for the company. The management team remains committed to expanding its internal capabilities and developing a portfolio of proprietary product candidates in this field, based on the team’s strong belief in the DARPin platform as the key to development of important immuno-oncologic therapies. The company plans to issue an update on its progress, strategy and priorities in this important field during the first half of 2016.
Additionally, Molecular Partners is investing in the continuous evolution of the company’s proprietary DARPin technology, continuing its R&D commitments to grow and develop its rich pipeline targeting high-value indications, and exploring financing of the in-licensing or acquisition of complementary businesses and technologies.
Finally, the company will continue to strengthen its internal team of experts throughout 2016.
Financial Outlook 2016
In 2016, operating expenses are expected to increase further, particularly as the company continues the development of its proprietary product candidates, expands its proprietary product pipeline and invests in the DARPin technology. Further, hiring additional personnel (mainly in R&D) and, potentially, expanding existing facilities will generate additional costs.
For the full year 2016, at constant exchange rates, the company expects total expenses of CHF 50-60 million, of which around CHF 6 million will be non-cash effective costs for share-based payments, IFRS pension accounting and depreciations. However, this may change substantially depending on the progress of the pipeline, mainly driven by the speed of enrolment of patients in clinical trials and data from research and development projects. Additionally, the company expects around CHF 3 million of capital expenditures, mainly for laboratory equipment.
No guidance can be provided with regard to net cash flow projections. Timelines and potential milestone payments for existing and potentially new partnerships cannot be disclosed.
Financial Calendar 2016
| Publication of Audited Financial Results and Annual Report 2015 |
March 17, 2016 |
| Annual General Meeting of Molecular Partners AG |
April 20, 2016 |
| Publication of Quarterly Management Statement Q1 2016 |
April 28, 2016 |
| Publication of Half-year Results 2016 |
September 1, 2016 |
| Publication of Quarterly Management Statement Q3 2016 |
October 27, 2016 |
Investor documentation
The 2015 results presentation, the unaudited financial results 2015 press release and additional information are available on the investors section of the company’ website. The audited Financial Results for 2015 and the company’s 2015 Annual Report will be published on March 17, 2016.
About Molecular Partners AG
Molecular Partners is a clinical-stage biopharmaceutical company that is developing a new, powerful class of therapies known as DARPins. DARPins are potent, specific and versatile small-protein therapies, which have the potential to offer benefits over conventional monoclonal antibodies or other currently available protein therapeutics. The DARPin technology has the potential to offer a multi-specific approach to treatment, which enables DARPins to target multiple pathways, or multiple epitopes on a single target, to achieve substantial patient benefit. DARPins have the potential to advance modern medicine and significantly improve the treatment of serious diseases, including cancer and sight-threatening disorders.
Molecular Partners has four compounds in various stages of clinical and preclinical development and several more in the research stage, with a current focus on ophthalmology and oncology. The company has ongoing research and development partnerships with leading pharmaceutical companies, including Allergan and Janssen, and is backed by established biotech investors. For more information regarding Molecular Partners, go to: www.molecularpartners.com.
For further details, please contact:
Dr. Christian Zahnd, CEO
christian.zahnd@molecularpartners.com
Tel: +41 (0) 44 755 77 00
Andreas Emmenegger, CFO
andreas.emmenegger@molecularpartners.com
Tel: +41 (0) 44 755 77 00
Rolf Schläpfer
Hirzel.Neef.Schmid.Counselors
rolf.schlaepfer@konsulenten.ch
Tel: +41 (0) 43 344 42 42
Legal Notice
This communication does not constitute an offer or invitation to subscribe for or purchase any securities of Molecular Partners AG. This publication may contain certain forward-looking statements and assessments or intentions concerning the company and its business. Such statements involve certain risks, uncertainties and other factors which could cause the actual results, financial condition, performance or achievements of the company to be materially different from those expressed or implied by such statements. Readers should therefore not place reliance on these statements, particularly not in connection with any contract or investment decision. The company disclaims any obligation to update these forward-looking statements, assessments or intentions.
2015: A year of substantial clinical progress in oncology
R&D, Partnership and Team Highlights:
- Significant advancement of the company’s proprietary pipeline in oncology, leading to presentation of promising interim Phase I data on MP0250 in patients with solid tumors
- Expansion of capabilities in oncology with several key hires, including the successful recruitment of Dr. Andreas Harstrick, Chief Medical Officer
- Pivotal Phase III trials for abicipar in wet age-related macular degeneration (AMD) initiated by partner Allergan, triggering a USD 15 million milestone fee
- Allergan committed to DARPin research alliance with an accelerated milestone payment of USD 35 million
- Molecular Partners advanced its portfolio of proprietary DARPin-based product candidates in immuno-oncology
Financial Highlights:
- CHF 215.4 million cash balance (including short-term time deposits) as of
Dec 31, 2015, up by CHF 27.0 million compared to year end 2014
- Positive operating cash flow of CHF 26.5 million, driven by CHF 51.2 million collections from strategic partners
- Net operating loss of CHF 2.2 million and marginal net loss of CHF 0.1 million,
in line with management’s expectations and the guidance provided
- 89 full-time equivalents as of Dec 31, 2015, up 20% over 12 months
- Strong, debt-free balance sheet to advance the company’s proprietary pipeline
Zurich-Schlieren, February 4, 2016. Molecular Partners AG (ticker: MOLN) today announced its unaudited financial results for 2015, a year marked by several major milestones in the development of novel compounds generated by the company’s DARPin technology platform, including potential treatments for cancer and ophthalmologic diseases. The company reported continued progress with its proprietary pipeline of anti-cancer treatments, including its lead oncology asset, MP0250, for which promising interim Phase I data were presented at a major oncology conference. The company also announced the initiation of pivotal Phase III trials of abicipar in wet age-related macular degeneration (AMD) by Allergan, one of the company’s strategic partners. Additionally, Molecular Partners strengthened its cash position and strategic collaborations through the receipt of milestone payments from Allergan, and bolstered its executive management team through the successful recruitment of Dr. Andreas Harstrick as Chief Medical Officer.
“Our steady progress in 2015, marked by the advancement of our broad and novel pipeline, the renewed commitment of our strategic partners to our innovative DARPin technology platform, and fortification of our already-strong financial position, leaves Molecular Partners poised for further success in 2016, a year in which we expect to meet several additional clinical milestones across multiple indications,” commented Molecular Partners CEO Christian Zahnd.
OPERATIONAL HIGHLIGHTS
Further advancement of proprietary pipeline, with key focus on MP0250
Molecular Partners has established its DARPin technology platform as a robust source for new product candidates. The company’s highly efficient processes for identifying mono-DARPins, and its proficient and modular approach to generating multi-DARPins, have become a key strength of Molecular Partners. This “DARPin toolbox” drives the discovery and development of new product candidates.
Advancing the company’s fully-owned, proprietary pipeline in oncology remains at the core of Molecular Partners’ managerial focus. The DARPin platform offers unlimited potential for creating differentiated anti-cancer therapies, as multi-DARPins can be engineered to address multiple pathways at once, synergistically. This capability offers the potential for greater efficacy and tolerability while allowing for possible combinations with other therapies.
MP0250, the most advanced systemic DARPin, has advanced through Phase I of clinical development for the treatment of solid tumors. On November 7, 2015, in a poster presentation at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston, Mass., USA, a team of independent researchers presented preliminary Phase I data showing that MP0250 was well-tolerated in patients with solid tumors, while also providing favorable pharmacokinetics (PK) and sustained exposure over multiple applications. The researchers also reported some early promising signals of potential activity: almost 50% of the patients in the study stayed on treatment for more than 3 months, with two patients being treated for 8 months and 12 months, repsectively. These results from the ongoing Phase I study constitute the first example of the feasibility of the DARPin approach as systemically administered therapies in oncology.
Based on the interim Phase I data, preclinical studies, published reports in the medical literature and interactions with key opinion leaders, Molecular Partners has announced the further development strategy for MP0250. The company will initiate the first Phase II study of this compound in the second half of 2016, in patients with multiple myeloma. The study will investigate the use of MP0250 in combination with bortezomib and dexamethasone in patients whose cancers became refractory while on bortezomib therapy, and had received at least two prior regimens including bortezomib and an immunomodulatory drug.
Beyond MP0250, Molecular Partners is advancing a growing proprietary pipeline of DARPin therapies. The pipeline includes MP0274, a multi-DARPin that targets HER2, providing broad blockade of HER1, HER2 and HER3-mediated signaling and inducing apoptosis (programmed cell death) in HER2-overexpressing cells. MP0274 is currently in preclinical development and is expected to enter into clinical development as early as the fourth quarter of 2016.
Molecular Partners is investing significant resources into a growing pipeline of immune-oncology programs. Immuno-oncology is a potentially game-changing approach to anti-cancer treatment, as it harnesses the power of the body’s immune system to fight cancer cells. The company’s immuno-oncology pipeline includes a number of DARPin-based candidates that are currently in research. Molecular Partners is applying the multi-DARPin concept to either create enhanced checkpoint modulators against validated immuno-oncology targets or to create highly potent candidates that are locally activated in the tumor environment.
Start of two abicipar Phase III studies in wet AMD by Allergan, underscoring the partner’s broad commitment to DARPins
Abicipar, Molecular Partners’ most advanced DARPin compound and first partnered product candidate, has entered Phase III of clinical development. Allergan, the company’s strategic partner, initiated two pivotal registration trials in wet AMD at the end of the second quarter of 2015. The Phase III program will evaluate the safety and efficacy of abicipar and its potential to improve vision gains with fewer treatment injections than is required with ranibizumab (Lucentis®), the current standard of care in wet AMD, thereby addressing two significant unmet medical needs for this patient population. The start of the Phase III trials was fully in-line with the original timeline developed by Molecular Partners and Allergan, despite the latter company’s acquisition by Actavis. The start of the first Phase III trial triggered a clinical milestone payment of USD 15 million to Molecular Partners.
Molecular Partners’ Chief Operating Officer (COO) Patrick Amstutz comments: “We would like to thank everyone who has contributed to the abicipar clinical development program, internally and externally, and for helping the company reach this important milestone while adhering to the envisaged timeline. We are pleased to see abicipar advancing in these Phase III trials in wet AMD, and we are confident to see further development of this product candidate in additional indications such as diabetic macular edema (DME).”
Partnerships: Allergan reinforces commitment to discovery alliance
Molecular Partners continues to collaborate with leading pharmaceutical companies to expand the reach of the DARPin platform, and to leverage these companies’ capabilities in developing breakthrough therapies.
On July 21, 2015, as a further sign of its commitment to the DARPin research and discovery alliance, Allergan agreed to make accelerated milestone payments of USD 35 million to Molecular Partners. The payments were made, following Allergan’s change of control, to maintain the broad alliance, which comprises several programs focusing on the discovery, research and development of DARPin‐based products in ophthalmology. These initiatives include a preclinical multi‐DARPin targeting Vascular Endothelial Growth Factor (VEGF) and Platelet Derived Growth Factor (PDGF), as well as several additional discovery programs.
In addition to the alliance with Allergan, the company is collaborating with Janssen Biotech on a multi-DARPin program in immunology. Within this alliance, Janssen evaluated DARPins against several targets thought to be important for the treatment of inflammatory and autoimmune diseases, and selected an undisclosed program for further development.
Under its current partnership agreements, Molecular Partners has the potential to earn up to CHF 1.9 billion in additional milestone payments, as well as up to double-digit tiered royalties on future global net product sales of each partnered program. Moreover, since Molecular Partners was founded, the company’s partnerships have generated CHF 215 million in non-equity funding via upfront and milestone payments as well as full-time employee (FTE) payments and cost-recharges. The non-equity funding includes the previously announced USD 50 million (CHF 48 million) milestone fees that were collected in July and August 2015.
Separately, in 2015, Molecular Partners and Roche discontinued a discovery alliance in oncology the two companies had entered into in December 2013. The alliance focused on the use of DARPins in combination with a bacterial toxin, for which Roche owns proprietary knowledge. Under the alliance, Molecular Partners delivered highly differentiated DARPins within a short time-frame. Clinical data from an antibody-bacterial toxin candidate led Roche to stop all work with this toxin. When Roche decided to refocus its discovery efforts away from bacterial toxins, this affected several antibody programs as well as the programs developed under Roche’s alliance with Molecular Partners, even though the decision was unrelated to DARPins.
TEAM HIGHLIGHTS
In March 2015, Molecular Partners announced the appointment of Dr. Andreas Harstrick as the company’s Chief Medical Officer (CMO) and member of the Executive Management Team. Dr. Harstrick is supporting the continued transformation of the company into a product development organization. He oversees the company’s clinical development activities and has already started to expand the clinical development team. Dr. Harstrick brings 28 years of experience in successfully developing antibody therapies in oncology from early stage to approval, including Erbitux® (cetuximab targeting EGFR) and Cyramza® (ramucirumab targeting VEGFR2). Furthermore, several times in his career Dr. Harstrick has built clinical oncology teams from scratch.
In August 2015, the company announced that, after a medical leave of three months, Dr. Christian Zahnd, CEO, returned to his full responsibilities.
FINANCIAL HIGHLIGHTS
Molecular Partners’ financial position for the full year 2015 developed in line with management’s expectations and the guidance provided to the capital markets. CFO Andreas Emmenegger summarizes the financial year 2015: “Consistent with the guidance provided to the markets, we were again able to close the full year 2015 with a positive net cash flow. Since Molecular Partners was founded in 2004, the company has generated a positive operating cash flow, which is an outstanding achievement for a biotech company in our stage of development. With CHF 215.4 million in cash and time deposits, and with no debt, we are in a very strong financial position to advance our proprietary programs through the final stages of development. Further, our strong balance sheet allows us the strategic flexibility to maximize the commercial potential of our proprietary DARPin platform and pipeline assets.”
Key figures FY 2015 (unaudited)
Key Financials (unaudited)
(CHF million, except per share, FTE data) |
FY 2015 |
FY 2014 |
change |
| Total revenues |
29.1 |
26.6 |
2.5 |
| R&D expenses |
-25.0 |
-19.8 |
-5.2 |
| G&A expenses |
-6.3 |
-5.0 |
-1.3 |
| Operating profit (loss) |
-2.2 |
1.8 |
-4.0 |
| Net profit (loss) |
-0.1 |
-2.3 |
2.2 |
| Basic net profit (loss) per share (in CHF) |
-0.01 |
-0.15 |
0.14 |
| Net cash from (used in) operating activities |
26.5 |
-11.3 |
37.8 |
| Cash & cash equivalents as of Dec 31 |
195.4 |
188.4 |
7.0 |
| Cash balance (incl. time deposits) as of Dec 31 |
215.4 |
188.4 |
27.0 |
| Total shareholders’ equity |
151.8 |
148.5 |
3.3 |
| Number of total FTE as of Dec 31 |
89.1 |
74.1 |
15.0 |
| – thereof in R&D |
80.7 |
67.2 |
13.5 |
| – thereof in G&A |
8.4 |
6.9 |
1.5 |
Income statement: In line with management expectations and guidance
In 2015, the company recognized total revenues of CHF 29.1 million, an increase of 9% compared to the previous year (2014: CHF 26.6 million). Total revenue of CHF 20.2 million was recorded with Allergan, CHF 7.4 million with Roche and CHF 1.4 million with Janssen. As of December 31, 2015, the company had CHF 59.1 million in deferred revenues on the balance sheet; these funds are expected to be recognized as revenues as follows: CHF 22.2 million in 2016, CHF 14.6 million in 2017, CHF 14.5 million in 2018 and CHF 7.8 million in 2019.
Overall, total operating expenses increased by CHF 6.5 million (+26%) to CHF 31.3 million (compared to CHF 24.8 million in 2014). These costs included CHF 4.4 million in non-cash effective share-based compensation and pension costs. The two major expense categories were personnel expenses of CHF 18.0 million (57% of total operating expenses) and research consumables and costs totaling CHF 7.0 million (22% of total operating expenses).
In 2015, the company generated an operating loss of CHF 2.2 million (compared to an operating profit of CHF 1.8 million in 2014). The decline from 2014 results mainly from increased R&D activities for the benefit of long-term value creation.
In 2015, Molecular Partners generated a result of CHF 2.1 million, an improvement of CHF 6.2 million over the previous year (2014: net financial expense of CHF 4.1 million, mainly driven by the CHF 7.1 million in IPO costs). Net financial income for 2015 included CHF 1.5 million in exchange gains on cash and on working capital positions held in USD and in EUR.
In 2015, the company’s net result was virtually break-even with a minor net loss of CHF 0.1 million (compared to a net loss of CHF 2.3 million in 2014). The improvement compared to the previous year was mainly driven by the positive financial results.
As of December 31, 2015 the company had 89.1 full-time employees (FTEs) on its payroll, including 80.7 FTEs (91%) in R&D and 8.4 FTEs (9%) in G&A. (By comparison, the company had 74.1 total FTEs on its payroll as of December 31, 2014.)
Balance sheet and capital resources: Strong position further reinforced in 2015
Total assets increased by CHF 25.4 million from CHF 194.0 million (as of December 31, 2014) to CHF 219.4 million (as of December 31, 2015). The increase mainly results from an increased cash balance amounting to CHF 215.4 million as of December 31, 2015 (including CHF 20.0 million in short-term time deposits). The company’s total cash balance represented 98% of the total balance sheet.
Compared to year-end 2014, total shareholder equity slightly increased by CHF 3.3 million to CHF 151.8 million (from CHF 148.5 million as of December 31, 2014). The company continues to be debt-free.
Cash flows: Driven by milestone collections from partners
In 2015, Molecular Partners generated a positive net cash flow from operations of CHF 26.5 million, compared to a negative net cash flow from operations of CHF 11.3 million in 2014. This substantial improvement was mainly driven by the collection of the announced USD 50 million milestone fees from Allergan in the second half of 2015 (including USD 15 million for the start of Phase III trials for abicipar as well as USD 35 million for Allergan’s commitment to the broader alliance).
Cash outflow from investing activities increased substantially to CHF 20.7 million (compared to a CHF 0.2 million cash outflow over the first half of 2014). This strong increase was driven by the temporary CHF 20.0 million investment into short-term time deposits. A CHF 1.4 million outflow was recorded for capital expenditure in equipment and a CHF 0.7 million inflow from interest and option premium. Net cash inflow from financing activities was CHF 0.2 million (compared to CHF 101.2 million in 2014, due to proceeds from the IPO). Overall, and including the CHF 20.0 million in time deposits, this resulted in a net increase of the company’s total cash balance by CHF 27.0 million from CHF 188.4 million at the end of 2014 to CHF 215.4 million as of year-end 2015.
OUTLOOK
Business outlook and priorities
In ophthalmology, the Molecular Partners team will remain focused on supporting its partner Allergan (and Pfizer, following the planned combination of the two companies) in progressing abicipar through Phase III trials in wet AMD, and possibly in initiating Phase III trials for abicipar in DME. Molecular Partners also plans to leverage the DARPin platform in ophthalmology by advancing the earlier-stage pipeline, including a multi-DARPin targeting VEGF and PDGF, in partnership with Allergan.
In oncology, Molecular Partners aims to complete Phase I studies of MP0250 in the treatment of solid tumors, including an ongoing dose-escalation study, preliminary results of which were presented at the AACR-NCI-EORTC conference in November 2015. On January 8, 2016, Molecular Partners announced its Phase II strategy for MP0250 in the treatment of multiple myeloma (MM). As part of the MM strategy, the company plans to conduct a Phase II trial of MP0250 in combination with bortezomib and dexamethasone, and expects to enroll the first patient in the second half of 2016. The company’s management team also remains committed to advancing MP0274 from preclinical to clinical development in 2016, and plans to initiate a Phase I trial of MP0274 by the end of the year.
Molecular Partners’ immuno-oncology pipeline remains a key priority for the company. The management team remains committed to expanding its internal capabilities and developing a portfolio of proprietary product candidates in this field, based on the team’s strong belief in the DARPin platform as the key to development of important immuno-oncologic therapies. The company plans to issue an update on its progress, strategy and priorities in this important field during the first half of 2016.
Additionally, Molecular Partners is investing in the continuous evolution of the company’s proprietary DARPin technology, continuing its R&D commitments to grow and develop its rich pipeline targeting high-value indications, and exploring financing of the in-licensing or acquisition of complementary businesses and technologies.
Finally, the company will continue to strengthen its internal team of experts throughout 2016.
Financial Outlook 2016
In 2016, operating expenses are expected to increase further, particularly as the company continues the development of its proprietary product candidates, expands its proprietary product pipeline and invests in the DARPin technology. Further, hiring additional personnel (mainly in R&D) and, potentially, expanding existing facilities will generate additional costs.
For the full year 2016, at constant exchange rates, the company expects total expenses of CHF 50-60 million, of which around CHF 6 million will be non-cash effective costs for share-based payments, IFRS pension accounting and depreciations. However, this may change substantially depending on the progress of the pipeline, mainly driven by the speed of enrolment of patients in clinical trials and data from research and development projects. Additionally, the company expects around CHF 3 million of capital expenditures, mainly for laboratory equipment.
No guidance can be provided with regard to net cash flow projections. Timelines and potential milestone payments for existing and potentially new partnerships cannot be disclosed.
Financial Calendar 2016
| Publication of Audited Financial Results and Annual Report 2015 |
March 17, 2016 |
| Annual General Meeting of Molecular Partners AG |
April 20, 2016 |
| Publication of Quarterly Management Statement Q1 2016 |
April 28, 2016 |
| Publication of Half-year Results 2016 |
September 1, 2016 |
| Publication of Quarterly Management Statement Q3 2016 |
October 27, 2016 |
Investor documentation
The 2015 results presentation, the unaudited financial results 2015 press release and additional information are available on the investors section of the company’ website. The audited Financial Results for 2015 and the company’s 2015 Annual Report will be published on March 17, 2016.
About Molecular Partners AG
Molecular Partners is a clinical-stage biopharmaceutical company that is developing a new, powerful class of therapies known as DARPins. DARPins are potent, specific and versatile small-protein therapies, which have the potential to offer benefits over conventional monoclonal antibodies or other currently available protein therapeutics. The DARPin technology has the potential to offer a multi-specific approach to treatment, which enables DARPins to target multiple pathways, or multiple epitopes on a single target, to achieve substantial patient benefit. DARPins have the potential to advance modern medicine and significantly improve the treatment of serious diseases, including cancer and sight-threatening disorders.
Molecular Partners has four compounds in various stages of clinical and preclinical development and several more in the research stage, with a current focus on ophthalmology and oncology. The company has ongoing research and development partnerships with leading pharmaceutical companies, including Allergan and Janssen, and is backed by established biotech investors. For more information regarding Molecular Partners, go to: www.molecularpartners.com.
For further details, please contact:
Dr. Christian Zahnd, CEO
christian.zahnd@molecularpartners.com
Tel: +41 (0) 44 755 77 00
Andreas Emmenegger, CFO
andreas.emmenegger@molecularpartners.com
Tel: +41 (0) 44 755 77 00
Rolf Schläpfer
Hirzel.Neef.Schmid.Counselors
rolf.schlaepfer@konsulenten.ch
Tel: +41 (0) 43 344 42 42
Legal Notice
This communication does not constitute an offer or invitation to subscribe for or purchase any securities of Molecular Partners AG. This publication may contain certain forward-looking statements and assessments or intentions concerning the company and its business. Such statements involve certain risks, uncertainties and other factors which could cause the actual results, financial condition, performance or achievements of the company to be materially different from those expressed or implied by such statements. Readers should therefore not place reliance on these statements, particularly not in connection with any contract or investment decision. The company disclaims any obligation to update these forward-looking statements, assessments or intentions.
