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Homology Medicines Reports Fourth Quarter and Full Year 2018 Financial Results and Provides Update on Recent Accomplishments

- On Track to Enter the Clinic and Report Initial Data from Phase 1/2 PKU Gene Therapy Trial in 2019 -

- New Data Supporting HMI-102 IND Package Demonstrates Reduction of Phe Levels in the Brain and an Increase in Neurotransmitter Metabolism -

- Established External and Internal GMP Manufacturing Process to Supply Phase 1/2 and Pivotal Trials -

BEDFORD, Mass., March 12, 2019 (GLOBE NEWSWIRE) -- Homology Medicines, Inc. (FIXX), a genetic medicines company, announced today financial results for the quarter and full year ended December 31, 2018 and highlighted recent accomplishments.

“In 2018, we made tremendous progress in expanding our development pipeline to include three programs that highlight the depth and breadth of our AAVHSC-based genetic medicines platform for both gene therapy and gene editing,” said Arthur Tzianabos, Ph.D., President and Chief Executive Officer of Homology Medicines. “This will be a pivotal year for Homology, as we plan to enter the clinic with HMI-102, our lead gene therapy candidate for PKU, and report initial clinical data from the Phase 1/2 trial in 2019. We believe that our preclinical and CMC package is strong, and today we share data confirming HMI-102 addresses the underlying cause of PKU as evidenced by key biomarkers including serum and brain Phe, tyrosine and neurotransmitter measures, and notable phenotypic changes. We are well underway in collaborating with respected clinical sites in the U.S. and look forward to starting our trial.”

Dr. Tzianabos continued, “We are in IND-enabling studies with our first in vivo gene editing development candidate for pediatric patients with PKU, a unique program that uses our precise and efficient homologous recombination technology, which is differentiated from nuclease-based approaches. We are also advancing IND-enabling studies of our CNS gene therapy program for metachromatic leukodystrophy, as well as progressing the rest of our pipeline. With our new internal GMP manufacturing facility completed and commercial platform established for our development programs, we gain greater control over quality and timelines as we bring potential new treatments forward for the patients and families who need them.”

Fourth Quarter 2018 and Recent Accomplishments

  • Preparing to initiate a Phase 1/2 clinical trial with HMI-102, a single-administration, in vivo gene therapy for adults with phenylketonuria (PKU), including working closely with multiple academic centers to participate; Homology remains on track to begin the trial and report initial clinical data in 2019.
  • Continued to present data demonstrating that a single dose of HMI-102 restores the normal biochemical pathway. HMI-102:
    • Lowered serum phenylalanine (Phe) to normal levels within one week, which was durable through 48 weeks and consistent with the lifespan of this murine model, and announced today lowered brain Phe to normal levels.
    • Increased tyrosine, which is responsible for the production of neurotransmitters, and announced today increased brain 5-hydroxyindoleacetic acid (5-HIAA), a metabolite of serotonin.
    • Changed coat color, indicating production of melanin.
  • Announced HMI-102 received Orphan Drug Designation in the E.U. in addition to the U.S.
  • Entered IND-enabling studies with HMI-103, a one-time, in vivo, nuclease-free, homologous recombination-based human gene editing development candidate for the treatment of pediatric PKU. In a humanized murine model that has a liver comprised of human and murine hepatocytes, HMI-103 demonstrated:
    • Efficient editing that resulted in therapeutic levels of human phenylalanine hydroxylase (PAH) enzyme, as measured by edited mRNA expression in human hepatocytes.
    • Selective editing for human hepatocytes with no editing observed in murine liver cells.
  • Began IND-enabling studies with HMI-202, a single-administration, in vivo gene therapy development candidate for the treatment of the rare neurological disorder metachromatic leukodystrophy (MLD). Presented data demonstrating Homology’s gene therapy approach resulted in levels of human ARSA enzyme well-above the therapeutic threshold in the MLD disease model. Additional data demonstrated that Homology’s suite of AAVHSC vectors cross the blood-brain-barrier in a large species following a single intravenous administration.
  • Completed 25,000 square foot GMP manufacturing facility to support gene therapy and gene editing programs; established commercial platform for all development programs and achieved manufacturing scale capable of supplying Phase 1/2 trial.

Fourth Quarter and Full Year Financial Results

  • Net loss for the quarter ended December 31, 2018 was $(19.0) million or $(0.51) per share, compared to a net loss of $(11.9) million or $(4.56) per share for the same period in 2017. Net loss for the year ended December 31, 2018 was $(57.2) million or $(2.00) per share, compared to a net loss of $(30.0) million or $(12.10) per share for the same period in 2017, reflective of share changes related to the Company’s initial public offering.
  • Collaboration revenues for the three and twelve months ended December 31, 2018 were $1.0 million and $3.7 million, respectively, in connection with a strategic collaboration with Novartis. Collaboration revenues are being recognized on a straight-line basis over the estimated period of the performance of services. Total operating expenses for the three and twelve months ended December 31, 2018 were $21.4 million and $65.2 million, respectively, as compared to $12.3 million and $29.7 million for the comparable periods in 2017, and consisted of research and development expenses and general and administrative expenses.
  • Research and development expenses for the three and twelve months ended December 31, 2018 were $16.3 million and $47.9 million, respectively, as compared to $9.6 million and $21.4 million for the comparable periods in 2017. Research and development expenses increased due to a rise in direct research expenses including contract manufacturing costs and laboratory supplies in support of pre-IND enabling studies, increased personnel costs to support the lead product development programs and research initiatives, as well as expenses related to expanding manufacturing capabilities.
  • General and administrative expenses for the three and twelve months ended December 31, 2018 were $5.1 million and $17.3 million, respectively, as compared to $2.7 million and $8.3 million for the comparable periods in 2017. General and administrative expenses increased due to personnel costs as a result of new hires, increased facility costs including rent expense, and costs associated with expanded operations in support of the Company’s initial public offering and financial reporting requirements.
  • As of December 31, 2018, Homology had approximately $214.7 million in cash, cash equivalents and short-term investments. Homology expects cash resources to fund operations through the end of 2020.

Upcoming Events

  • Cowen Healthcare Conference: March 12, 2019 at 8:00 a.m. ET in Boston
  • Alliance for Regenerative Medicine (ARM)’s Annual Cell & Gene Investor Day: March 21, 2019 in New York City
  • American College of Medical Genetics (ACMG) Annual Clinical Genetics Meeting: April 2 – 6, 2019 in Seattle
  • Association for Research in Vision and Ophthalmology (ARVO) Annual Meeting: April 28 – May 2, 2019 in Vancouver, British Columbia            

About Homology Medicines, Inc.
Homology Medicines, Inc. is a genetic medicines company dedicated to transforming the lives of patients suffering from rare genetic diseases with significant unmet medical needs by curing the underlying cause of the disease. Homology’s proprietary platform is designed to utilize its human hematopoietic stem cell-derived adeno-associated virus vectors (AAVHSCs) to precisely and efficiently deliver genetic medicines in vivo either through a gene therapy or nuclease-free gene editing modality across a broad range of genetic disorders. Homology has a management team with a successful track record of discovering, developing and commercializing therapeutics with a particular focus on rare diseases, and intellectual property covering its suite of 15 AAVHSCs. Homology believes that its compelling preclinical data, scientific expertise, product development strategy, manufacturing capabilities and intellectual property position it as a leader in the development of genetic medicines. For more information, please visit www.homologymedicines.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding upcoming events and presentations; advancing our novel gene therapy and gene editing technology platform and pipeline; our expectations surrounding initiation of clinical trials for our PKU gene therapy program and expressions of interest in participating; our beliefs regarding our manufacturing capabilities; our goal of improving the lives of patients with rare genetic diseases; the anticipated timing of the release of clinical data for the Phase 1/2 clinical trial; beliefs about preclinical data; our position as a leader in the development of genetic medicines; and the sufficiency of our cash, cash equivalents and short-term investments. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the fact that we have and expect to continue to incur significant losses; our need for additional funding, which may not be available; failure to identify additional product candidates and develop marketable products; the early stage of our development efforts; our failure or the failure of our collaborators to successfully develop and commercialize drug candidates; potential unforeseen events during clinical trials could cause delays or other adverse consequences; risks relating to the capabilities of our manufacturing facility; risks relating to the regulatory approval process; our product candidates may cause serious adverse side effects; inability to maintain our collaborations, or the failure of these collaborations; our reliance on third parties; the inability to obtain orphan drug exclusivity; failure to obtain U.S. or international marketing approval; ongoing regulatory obligations; effects of significant competition; unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives; product liability lawsuits; failure to attract, retain and motivate qualified personnel; the possibility of system failures or security breaches; risks relating to intellectual property; the price of our common stock may be volatile; significant costs as a result of operating as a public company; and any securities class action litigation. These and other important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018 and our other filings with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

- Financial Tables Follow -

 

     
HOMOLOGY MEDICINES, INC.    
CONSOLIDATED STATEMENTS OF OPERATIONS    
(in thousands, except share and per share amounts)    
                     
    For the Three Months Ended December 31,   For the Years Ended December 31,    
      2018       2017       2018       2017      
    (Unaudited)            
Collaboration revenue   $   980     $   —     $   3,684     $   —      
Operating expenses:                    
Research and development       16,281         9,576         47,948         21,378      
General and administrative       5,087         2,686         17,300         8,279      
Total operating expenses       21,368         12,262         65,248         29,657      
Loss from operations       (20,388 )       (12,262 )       (61,564 )       (29,657 )    
Other income (expense):                    
Change in fair value of convertible preferred stock tranche
  liability
      —         —         —         (876 )    
Interest income       1,386         356         4,349         542      
Total other income (expense)       1,386         356         4,349         (334 )    
Net loss and net loss attributable to common
  stockholders-basic and diluted
  $   (19,002 )   $   (11,906 )   $   (57,215 )   $   (29,991 )    
Net loss per share attributable to common
  stockholders-basic and diluted
  $   (0.51 )   $   (4.56 )   $   (2.00 )   $   (12.10 )    
Weighted-average common shares outstanding-basic and diluted       37,327,602         2,612,584         28,551,807         2,479,432      
                     

 

           
HOMOLOGY MEDICINES, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(in thousands, except share and per share amounts)  
           
    December 31,  
      2018     2017    
Cash and cash equivalents and short-term investments   $   214,737   $   129,659    
Property and equipment, net       35,637       3,154    
Other assets       8,720       4,717    
Total assets   $   259,094   $   137,530    
           
Accounts payable, accrued expenses and other liabilities   $   31,219   $   5,812    
Deferred revenue       33,158       33,410    
Convertible preferred stock       —       137,762    
Stockholders' equity (deficit)       194,717       (39,454 )  
Total liabilities, convertible preferred stock and stockholders' equity (deficit) $   259,094   $   137,530    
           

 

Investor Contact: Media Contact:
Theresa McNeely Cara Mayfield
SVP, Corporate Communications & Patient Advocacy Director, Corporate Communications
tmcneely@homologymedicines.com
781-691-3751
cmayfield@homologymedicines.com
781-691-3510