Aduro Biotech Provides Business Update and Reports Second Quarter 2020 Financial Results
“The second quarter of 2020 was highlighted by the announcement of our planned merger with Chinook Therapeutics as well as significant progress in our BION-1301 program for IgA nephropathy (IgAN). We recently dosed the first IgAN patient with BION-1301 in Part 3 of our ongoing Phase 1 study and presented positive data from Parts 1 and 2 of this study in healthy volunteers at the 57th
- Announced definitive merger agreement with Chinook Therapeutics, which is expected to close in the second half of 2020, subject to the satisfaction or waiver of the conditions to completion of the merger. Following completion of the merger, the combined company will operate as Chinook Therapeutics and advance a pipeline of precision medicines for kidney diseases, led by atrasentan and BION-1301 in IgAN, assuming satisfaction of the conditions to closing the merger.
- Presented healthy volunteer data from Part 1 (single ascending dose) and Part 2 (multiple ascending dose) of the ongoing Phase 1 study of BION-1301 at the 57th
ERA-EDTA Virtual Congress.
- Presented nonclinical toxicology studies of BION-1301 evaluating intravenous administration for up to six months and subcutaneous administration for up to one month at the 57th
ERA-EDTA Virtual Congress.
- Dosed the first patient with IgAN in Part 3 of the ongoing Phase 1 study of BION-1301.
- Cash Position – Cash, cash equivalents and marketable securities totaled
$186.1 millionat June 30, 2020, compared to $213.6 millionat December 31, 2019. Cash spend year to date was offset by the receipt of a $10 milliondevelopment milestone payment from Merck in the first quarter of 2020.
- Revenue – Revenue was
$5.6 millionfor the second quarter of 2020 and $19.5 millionfor the six months ended June 30, 2020, compared to $4.9 millionand $8.8 million, respectively for the same periods in 2019. The increase in revenue for the quarter was primarily due to fluctuations in revenue recognized under our Novartis collaboration which is dependent on clinical timelines and progress under the research and collaboration agreement. In addition to the Novartis collaboration, the increase in revenue for the year to date period included the recognition of the $10.0 milliondevelopment milestone payment received under our license and research collaboration agreement with Merck.
- Expenses –
- Research and development expenses were
$11.1 millionfor the second quarter of 2020 and $26.9 millionfor the six months ended June 30, 2020, compared to $16.7 millionand $34.2 million, respectively, for the same periods in 2019. The decrease in expense from 2019 to 2020 was primarily due to 2019 costs related to the deprioritized programs that were substantially wound down in 2019 offset by higher costs for our STINGand APRIL programs. The decrease was also attributable to lower compensation and related personnel costs as well as stock-based compensation as compared to 2019 due to reduced headcount as a result of the January 2020restructuring.
- General and administrative expenses were
$9.3 millionfor the second quarter of 2020 and $17.1 millionfor the six months ended June 30, 2020, compared to $7.8 millionand $16.1 million, respectively, for the same periods in 2019. The quarter and year to date increases were due to higher professional services expenses associated with the merger transaction, the increase was offset by lower personnel and stock-based compensation expense, as compared to 2019, due to reduced headcount as a result of the January 2020restructuring.
- Restructuring and related expenses were
$2.0 millionfor the second quarter of 2020 and $6.4 millionfor the six months ended June 30, 2020, compared to $0.4 millionand $3.4 million, respectively, for the same periods in 2019. The year to date restructuring and related expenses consisted of severance and employee retention costs as well as the impairment of property and equipment associated with the planned closure of the Aduro Biotech Europe facility in Oss, The Netherlandsas part of the January 2020corporate restructuring plan. The $3.4 millionrestructuring and related expenses recorded in 2019, which included employee severance and retention payments, related to the January 2019strategic reset.
- Research and development expenses were
- Net Loss – Net loss for the second quarter of 2020 was
$16.6 millionor $0.21per share and $24.2 millionor $0.30per share for the six months ended June 30, 2020, compared to net loss of $18.6 millionor $0.23per share and $42.0 millionor $0.53per share, respectively, for the same periods in 2019. In addition to the factors described above, the net loss was offset by approximately $5.6 millionof income tax benefit related to an income tax carryback claim allowed by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The income tax refund is expected to be received in the second half of 2020.
Additional Information and Where to Find It
Aduro has filed a Registration Statement on Form S-4 containing a proxy statement/prospectus of Aduro and other documents concerning the proposed merger with the
Participants in the Solicitation
This communication does not constitute a solicitation of proxy, an offer to purchase or a solicitation of an offer to sell any securities. Aduro and Chinook, and each of their respective directors, executive officers and certain employees may be deemed to be participants in the solicitation of proxies from the stockholders of Aduro in connection with the proposed merger. Security holders may obtain information regarding the names, affiliations and interests of Aduro’s directors and officers in Aduro’s Annual Report on Form 10-K for the fiscal year ended
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding our current intentions or expectations concerning, among other things, the potential for our technology, continued advancement of our programs, our cash position allowing us to continue our APRIL and
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
|Three Months Ended June 30,||Six Months Ended June 30,|
|Collaboration and license revenue||$||5,574||$||4,888||$||19,524||$||8,826|
|Research and development(1)||11,108||16,657||26,936||34,151|
|General and administrative(1)||9,284||7,832||17,103||16,056|
|Restructuring and related expense||2,046||367||6,354||3,361|
|Amortization of intangible assets||136||139||272||279|
|Total operating expenses||22,574||24,995||50,665||53,847|
|Loss from operations||(17,000||)||(20,107||)||(31,141||)||(45,021||)|
|Other expense, net||(28||)||(3||)||(47||)||(22||)|
|Total other income||385||1,494||1,286||2,946|
|Loss before income tax||(16,615||)||(18,613||)||(29,855||)||(42,075||)|
|Income tax benefit||—||35||5,665||70|
|Net loss per common share, basic and diluted||$||(0.21||)||$||(0.23||)||$||(0.30||)||$||(0.53||)|
|Shares used in computing net loss per common
share, basic and diluted
|(1) Includes the following share-based compensation expenses:|
|Research and development||1,363||1,713||2,226||3,746|
|General and administrative||1,665||1,623||2,837||3,293|
Consolidated Balance Sheets
|Cash and cash equivalents||$||71,103||$||59,624|
|Income tax receivable||5,665||—|
|Prepaid expenses and other current assets||3,015||3,958|
|Total current assets||180,980||217,902|
|Property and equipment, net||21,706||24,688|
|Operating lease right-of-use assets||20,334||21,110|
|Intangible assets, net||18,723||18,978|
|Liabilities and Stockholders’ Equity|
|Accrued clinical trial and manufacturing expenses||2,615||4,253|
|Accrued expenses and other liabilities||9,673||8,181|
|Operating lease liabilities||1,741||1,803|
|Total current liabilities||20,303||21,601|
|Deferred tax liabilities||3,531||3,527|
|Operating lease liabilities||30,855||31,636|
|Other long-term liabilities||753||940|
|Commitments and contingencies|
|Additional paid-in capital||557,263||552,077|
|Accumulated other comprehensive income||439||414|
|Total stockholders’ equity||46,616||65,595|
|Total liabilities and stockholders’ equity||$||265,383||$||291,313|
Source: Aduro Biotech, Inc.