Tetraphase Reports Second Quarter 2013 Financial Results

Business Wire

WATERTOWN, Mass.--(BUSINESS WIRE)--

Tetraphase Pharmaceuticals, Inc. (TTPH) today reported financial results for the quarter ended June 30, 2013.

“The FDA has made it a priority to help drug developers address the global health crisis posed by multi-drug resistant infections, particularly difficult-to-treat serious and life-threatening Gram-negative infections, through designations like QIDP, which our lead candidate eravacycline was recently awarded,” said Guy Macdonald, Tetraphase President and Chief Executive Officer. “This designation, which makes eravacycline eligible for extended exclusivity and regulatory benefits, further supports our development strategy for eravacycline, as we look to initiate two Phase 3 registrational studies, one each in complicated intra-abdominal infections and complicated urinary tract infections, in the third and fourth quarters of 2013. Another important upcoming milestone is completion of our Phase 1 oral PK program, expected in the second half of 2013 to support initiation of our Phase 3 complicated urinary tract infections study. We believe that this important dosing form would distinguish eravacycline from all other late stage Gram-negative compounds in development.”

Second Quarter Financial Results

As of June 30, 2013, Tetraphase had cash and cash equivalents of $77.2 million.

For the second quarter of 2013, Tetraphase reported a net loss of $5.4 million, or $0.26 per share, compared to a net loss of $4.3 million, or $13.42 per share, for the comparable period in 2012.

Revenues for the second quarter of 2013 were $3.7 million compared to $1.3 million for the same period in 2012. Our revenues for each period consisted of contract and grant revenue under three U.S. government awards for the development of our compounds as potential counter measures for the treatment of diseases caused by bacterial biothreat pathogens through subcontracts and a subaward from our collaborator CUBRC Inc. (CUBRC), an independent, not-for-profit, research corporation that specializes in U.S. government-based contracts. These U.S. government awards consist of an award from Biomedical Advanced Research and Development Authority (BARDA) for our lead product candidate, eravacyline and two awards from National Institute of Allergy and Infectious Diseases (NIAID) for our preclinical compound TP-271. The increase during the quarter ended June 30, 2013 compared to the quarter ended June 30, 2012 was primarily due to an increase in the activities under our subcontract with respect to the BARDA Contract related to various clinical studies conducted during the quarter ended June 30, 2013, as well as an increase in activities under our subcontract with respect to the NIAID Contract and our subaward with respect to the NIAID Grant.

Research and development expenses for the second quarter of 2013 were $6.9 million, compared to $4.3 million for the same period in 2012. The increase was primarily due to an increase in expenses related to activities under our subcontracts with CUBRC with respect to the BARDA contract, the NIAID contract and our subaward under the NIAID grant, as well as an increase in clinical costs associated with the Phase 3 program and the Phase 1 oral PK program for eravacycline.

General and administrative expenses for the second quarter of 2013 were $1.8 million, compared to $1.0 million for the same period in 2012. This increase was primarily due to an increase in various general costs related to being a public company; as well as an increase in personnel-related costs mainly to support our increased activities related to the BARDA Contract, the NIAID Contract and the NIAID Grant.

Recent Highlights

  • Eravacycline Receives QIDP Designation from FDA. In July 2013, Tetraphase announced that the U.S. Food and Drug Administration (FDA) had designated eravacycline as a Qualified Infectious Disease Product (QIDP). The QIDP designation was granted for complicated intra-abdominal infection (cIAI), in what we believe to be the first such designation for this indication, and complicated urinary tract infection (cUTI) indications, and will make eravacycline eligible to benefit from certain incentives for the development of new antibiotics provided under the Generating Antibiotic Incentives Now Act (GAIN Act). These incentives include priority review and eligibility for fast-track status. Further, if ultimately approved by the FDA, eravacycline is eligible for an additional five-year extension of Hatch-Waxman exclusivity.
  • Added to Russell Indexes. In July 2013, Tetraphase announced that it was added to the Russell 3000®, Russell 2000® and Russell Global Indexes when the Russell Investment Group reconstituted its family of U.S. indexes.
  • Presentation of Data at the 23rd European Congress of Clinical Microbiology and Infectious Disease (EECMID). In April 2013, Tetraphase presented data from its Phase 2 clinical trial of its lead product candidate, eravacycline, supporting the efficacy of eravacycline in the treatment of patients with cIAI, and data on the activity of TP-271, a preclinical compound, against community-acquired bacterial pneumonia (CABP), at ECCMID in Berlin, Germany.

About Tetraphase Pharmaceuticals, Inc.

Tetraphase is a clinical-stage biopharmaceutical company using its proprietary chemistry technology to create novel antibiotics for serious and life-threatening multi-drug resistant infections. Tetraphase's lead product candidate, eravacycline, is a fully synthetic tetracycline derivative being developed as a broad-spectrum intravenous and oral antibiotic for use as a first-line empiric monotherapy for the treatment of multi-drug resistant infections, including multi-drug resistant Gram-negative infections.

Any statements in this press release about our future expectations, plans and prospects, including statements regarding our strategy, future operations, prospects, plans and objectives, and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: whether our cash resources will be sufficient to fund our continuing operations; whether results obtained in preclinical studies and early clinical trials, such as the results referred to in this press release, will be indicative of results obtained in future clinical trials; whether we are able to develop an oral formulation of eravacycline on a timely basis or at all; whether eravacycline will advance through the clinical trial process on a timely basis and receive approval from the FDA or equivalent foreign regulatory agencies; whether, if eravacycline obtains approval, it will be successfully distributed and marketed; and other factors discussed in the “Risk Factors” section of our quarterly report on Form 10-Q for the quarter ended June 30, 2013. In addition, the forward-looking statements included in this press release represent our views as of August 12, 2013. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

                                 
 
Tetraphase Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
 
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
 
Revenues $ 3,722   $ 1,316   $ 6,422   $ 1,823  
Operating expenses
Research and development 6,924 4,261 11,022 8,262
General and administrative   1,756     1,002     2,981     1,963  
Total operating expenses   8,680     5,263     14,003     10,225  
Loss from operations   (4,958 )   (3,947 )   (7,581 )   (8,402 )
Other income (expense)
Interest income 2 2
Interest expense (470 ) (216 ) (901 ) (450 )
Other income (expense)   -     (105 )   263     (105 )
Other expense, net   (468 )   (321 )   (636 )   (555 )
Net loss $ (5,426 ) $ (4,268 ) $ (8,217 ) $ (8,957 )
Net loss per share applicable to common stockholders-basic and diluted $ (0.26 ) $ (13.42 ) $ (0.73 ) $ (28.60 )
Weighted-average number of common shares used in net loss per share
applicable to common stockholders-basic and diluted   20,575     318     11,263     313  
 
                 
 
Tetraphase Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
 
June 30, December 31,
2013 2012
 
Assets
Cash and cash equivalents $     77,216 $     9,079
Accounts receivable 2,912 2,452
Prepaid expenses and other current assets 795 850
Property and equipment, net 185 235
Other assets, noncurrent       60       1,456  
Total assets $     81,168 $     14,072  
 
Liabilities and stockholders’ equity (deficit)
Accounts payable and accrued expenses $ 5,198 $ 4,321
Total term loan 13,393 11,650
Total deferred revenue - 699
Warrant liability - 610
Convertible preferred stock - 79,841
Stockholder's equity (deficit)       62,577       (83,049 )
Total liabilities and stockholders’ equity (deficit) $     81,168 $     14,072  
 

Contact:
Investors:
Tetraphase Pharmaceuticals
David Lubner, 617-715-3551
Senior Vice President & CFO
dlubner@tphase.com
or
Argot Partners
Susan Kim, 212-600-1902
susan@argotpartners.com
or
Media:
Sam Brown Inc.
Mike Beyer, 773-463-4211
beyer@sambrown.com
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