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
Recent Highlights
- 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.
Financial Results
- Cash Position – Cash, cash equivalents and marketable securities totaled
$186.1 million atJune 30, 2020 , compared to$213.6 million atDecember 31, 2019 . Cash spend year to date was offset by the receipt of a$10 million development milestone payment from Merck in the first quarter of 2020.
- Revenue – Revenue was
$5.6 million for the second quarter of 2020 and$19.5 million for the six months endedJune 30, 2020 , compared to$4.9 million and$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 million development milestone payment received under our license and research collaboration agreement with Merck.
- Expenses –
- Research and development expenses were
$11.1 million for the second quarter of 2020 and$26.9 million for the six months endedJune 30, 2020 , compared to$16.7 million and$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 ourSTING and 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 theJanuary 2020 restructuring.
- General and administrative expenses were
$9.3 million for the second quarter of 2020 and$17.1 million for the six months endedJune 30, 2020 , compared to$7.8 million and$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 theJanuary 2020 restructuring.
- Restructuring and related expenses were
$2.0 million for the second quarter of 2020 and$6.4 million for the six months endedJune 30, 2020 , compared to$0.4 million and$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 Netherlands as part of theJanuary 2020 corporate restructuring plan. The$3.4 million restructuring and related expenses recorded in 2019, which included employee severance and retention payments, related to theJanuary 2019 strategic reset.
- Research and development expenses were
- Net Loss – Net loss for the second quarter of 2020 was
$16.6 million or$0.21 per share and$24.2 million or$0.30 per share for the six months endedJune 30, 2020 , compared to net loss of$18.6 million or$0.23 per share and$42.0 million or$0.53 per share, respectively, for the same periods in 2019. In addition to the factors described above, the net loss was offset by approximately$5.6 million of 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.
About Aduro
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
Contact: |
510-809-2465 |
investors@aduro.com |
press@aduro.com |
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenue: | ||||||||||||||||
Collaboration and license revenue | $ | 5,574 | $ | 4,888 | $ | 19,524 | $ | 8,826 | ||||||||
Total revenue | 5,574 | 4,888 | 19,524 | 8,826 | ||||||||||||
Operating expenses: | ||||||||||||||||
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 | ) | ||||||||
Interest income | 413 | 1,497 | 1,333 | 2,968 | ||||||||||||
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 | $ | (16,615 | ) | $ | (18,578 | ) | $ | (24,190 | ) | $ | (42,005 | ) | ||||
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 |
80,862,621 | 80,032,022 | 80,810,211 | 79,847,960 | ||||||||||||
(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
(In thousands)
(Unaudited)
2020 | 2019 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 71,103 | $ | 59,624 | ||||
Marketable securities | 100,028 | 153,978 | ||||||
Accounts receivable | 1,169 | 342 | ||||||
Income tax receivable | 5,665 | — | ||||||
Prepaid expenses and other current assets | 3,015 | 3,958 | ||||||
Total current assets | 180,980 | 217,902 | ||||||
Marketable securities | 14,995 | — | ||||||
Property and equipment, net | 21,706 | 24,688 | ||||||
Operating lease right-of-use assets | 20,334 | 21,110 | ||||||
8,177 | 8,167 | |||||||
Intangible assets, net | 18,723 | 18,978 | ||||||
Restricted cash | 468 | 468 | ||||||
Total assets | $ | 265,383 | $ | 291,313 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,339 | $ | 414 | ||||
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 | ||||||
Deferred revenue | 4,935 | 6,950 | ||||||
Total current liabilities | 20,303 | 21,601 | ||||||
Contingent consideration | 2,013 | 1,051 | ||||||
Deferred revenue | 161,312 | 166,963 | ||||||
Deferred tax liabilities | 3,531 | 3,527 | ||||||
Operating lease liabilities | 30,855 | 31,636 | ||||||
Other long-term liabilities | 753 | 940 | ||||||
Total liabilities | 218,767 | 225,718 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock | — | — | ||||||
Common stock | 8 | 8 | ||||||
Additional paid-in capital | 557,263 | 552,077 | ||||||
Accumulated other comprehensive income | 439 | 414 | ||||||
Accumulated deficit | (511,094 | ) | (486,904 | ) | ||||
Total stockholders’ equity | 46,616 | 65,595 | ||||||
Total liabilities and stockholders’ equity | $ | 265,383 | $ | 291,313 |
Source: Aduro Biotech, Inc.