On March 29, 2022 vTv Therapeutics Inc. (Nasdaq: VTVT) reported financial results for the fourth quarter and year ended December 31, 2021, and provided an update on the progress of its clinical programs (Press release, vTv Therapeutics, MAR 29, 2022, View Source [SID1234611118]).
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"I am dedicated to the long-term growth and development of the Company and look forward to working with vTv’s talented employees, scientists, and partners during this exciting time," Mr. Nelson said. "The positive Phase 2 study results and FDA Breakthrough Therapy Designation for TTP339 are very promising milestones in the development of a novel treatment for type 1 diabetes patients worldwide"
Recent Achievements and Outlook
Corporate
Leadership. On March 1, 2022, the Company appointed Richard Nelson as Acting Chief Executive Officer. Mr. Nelson joined the vTv Board of Directors in 2020, and currently serves as Executive Vice President Corporate & Business Development of Vericast Corp., and Executive Vice President Corporate Development for MacAndrews & Forbes Incorporated. He brings more than 25 years of business and legal experience in mergers & acquisitions and corporate development.
Mr. Nelson will work closely with the Company’s Board of Directors as vTv continues to progress in the development of its pipeline of novel therapeutics, particularly TTP339, an orally administered treatment for type 1 diabetes.
Strategic Focus. We plan to prioritize the development of our lead program TTP399, a novel, oral liver selective glucokinase activator, as a potential treatment for patients with type 1 diabetes ("T1D"), as well as continuing to support our currently partnered programs. Given the strategic focus on these programs, we plan to pause our development activities in the United States on HPP737 while we evaluate strategic options for it. As part of this planned strategic focus, the Company has reduced its workforce. We are actively seeking to raise non-dilutive capital through licensing TTP399 in regions outside of North America and Europe and are also actively seeking licensing deals for HPP737 and other assets. We are currently in active discussions with respect to financing, partnering, and licensing transactions for the further development of TTP399.
Type 1 Diabetes
Mechanistic Study of Ketoacidosis with TTP399. In October 2021, we announced positive results from the Mechanistic study indicating no increased risk of ketoacidosis with TTP399 during acute insulin withdrawal in patients with T1D. Patients with type 1 diabetes taking TTP399 experienced no increase in ketone levels relative to placebo
during a period of acute insulin withdrawal, indicating that treatment with TTP399 presents no increased risk of ketoacidosis. In addition, patients taking TTP399 had improved fasting plasma glucose levels and experienced fewer hypoglycemic events relative to those taking placebo, consistent and supportive of the previously announced phase 2 Simplici-T1 Study results. Full study results will be published in the Diabetes Obesity and Metabolism journal in conjunction with the 82nd American Diabetes Association Scientific Sessions on June 6th, 2022.
Pivotal Study Planning. The Company is planning two pivotal, placebo-controlled clinical trials of TTP399 in subjects with type 1 diabetes and has engaged with the Food and Drug Administration (FDA) on the optimal clinical trial designs for these studies. The studies will recruit a total of approximately 1000 patients and at least one of the studies will be one year of treatment. The FDA and the company have agreed on the primary endpoint for the studies as the difference between placebo and TTP399-treated group in number of hypoglycemia events. These pivotal studies are expected to start in 3Q 2022.
Fourth Quarter 2021 Financial Results
Cash Position: The Company’s cash position as of December 31, 2021, was $13.4 million compared to $19.6 million as of September 30, 2021.
Revenue: Revenue for the fourth quarter of 2021 was an insignificant amount. Revenue for the third quarter of 2021 was $3.0 million, attributable to the satisfaction of milestones under the license agreements with Newsoara Biopharma Co., Ltd. (with respect to HPP737) and Reneo Pharmaceuticals, Inc (with respect to HPP593).
R&D Expenses: Research and development expenses were $5.4 million and $2.4 million in each of the three months ended December 31, 2021, and September 30, 2021, respectively. The changes are attributable to i) increases due to manufacturing and analytical work related to chemistry manufacturing and control "CMC" for pivotal studies, and the startup of TTP399 toxicology studies in Q4 2021, offset by lower costs in the quarter as the majority of the TTP399-118 trial was completed earlier in the year, ii) $2.0 million for a license payment to Novo Nordisk for the completion of TTP399 phase 2 studies, iii) an increased severance accrual of $0.6 million, offset by iv) reductions in bonus and share based compensation due to the reduction in workforce in Q4 2021 of $0.3 million.
G&A Expenses: General and administrative expenses were $5.7 million and $2.2 million for each of the three months ended December 31, 2021, and September 30, 2021. The changes are attributable to i) increases in severance expense of $1.5 million in connection with the Company’s restructuring plan that occurred in December 2021, ii) $0.5 million in stock-based compensation expense due to the modification of awards related to the retirement and separation agreements with several key employees, and iii) increases in legal expense of $1.2 million.
Other Income/(Expense): Other income for the three months ended December 31, 2021, was $1.6 million and was driven by changes in the fair value of our investment in Reneo as well as the gains related to a reduction in the fair value of the outstanding warrants to purchase shares of our own stock issued to a related party ("Related Party Warrants"). Other income for the three months ended September 30, 2021, was $0.2 million and was
attributable to the gains related to a reduction in fair value of the Related Party Warrants offset by losses driven by the decrease in the fair value of our investment in Reneo.
Net Loss Before Non-Controlling Interest: Net loss before non-controlling interest was $9.5 million for the fourth quarter of 2021 compared to net loss before non-controlling interest of $1.5 million for the third quarter of 2021. The increase in net loss before Non-Controlling Interest was primarily attributable to i) increased severance expense of $2.1 million, ii) $2.0 million for a license payment to Novo for the completion of TTP399 phase 2 studies, iii) an increase in legal expense of $1.2 million and iv) $0.5 million in stock-based compensation expense due to the modification of awards related to the retirement and separation agreements with several key employees.
Net Loss Per Share: Diluted net loss per share was ($0.11) for the three months ended December 31, 2021, compared to diluted net loss per share of ($0.02) for the three months ended September 30, 2021, based on weighted average diluted shares of 66.8 million and 61.1 million for the three-month periods ended December 31, 2021, and September 30, 2021, respectively.
Full Year 2021 Financial Results
Revenue: Revenues were $4.0 million and $6.4 million for the years ended December 31, 2021, and 2020, respectively. The 2021 revenue is attributable to the reallocation of revenue to the license and technology transfer performance obligation made in connection with an amendment to the license agreement with Hangzhou Zhongmei Huadong Pharmaceutical Co. with respect to TTP273 as well as increases to the transaction prices for the license performance obligations under the Newsoara and Reneo License Agreements due to the satisfaction of development milestones. The 2020 revenue is attributable to the upfront payment and fair value of the equity interest received by the Company in connection with the license agreement with Anteris Bio (with respect to HPP971).
R&D Expenses: Research and development expenses were $13.3 million and $11.0 million for the years ended December 31, 2021, and 2020, respectively. This increase was attributable to i) spending of $2.3 million for the development of HPP737 as we were conducting a Phase 1 multiple ascending dose study for this drug candidate, ii) $2.0 million for a license payment to Novo for the completion of TTP399 phase 2 studies, iii) spending of $1.7 million related to the development of TTP399 due to the mechanistic study and compound manufacturing, and iv) costs of $1.6 million for various employee related costs including severance costs related to the Company’s restructuring plan, increase in share-based compensation, and reversal of certain performance-based compensation accruals in the prior year due to the expectation they would not be paid. These increases were offset by a decrease in clinical trial costs of $5.3 million for azeliragon which was mainly driven by discontinuance of its development as a potential treatment of Alzheimer’s disease in patients with type 2 diabetes.
G&A Expenses: General and administrative expenses were $12.3 million and $7.3 million for the years ended December 31, 2021, and 2020, respectively. Such increases were primarily driven by i) severance expense of $1.5 million in connection with the Company’s restructuring plan that occurred in December 2021, ii) $0.5 million in stock-based compensation expense due to the modification of awards related to the retirement and
separation agreements with several key employees and general increase in expense from options issued late 2020, iii) a reversal of certain performance-based compensation accruals in the prior year due to the expectation they would not be paid, and iv) $1.2 million of additional legal expenses.
Other Income/(Expense): Other income/(expense) was $4.1 million and $(0.3) million for the years ended December 31, 2021, and 2020, respectively. The increase was driven by an unrealized gain recognized related to the Company’s investment in Reneo as well as the gains related to a reduction in fair value of the Related Party Warrants.
Net Loss Before Non-Controlling Interest: Net loss before non-controlling interest was $17.6 million and $12.8 million for the years ended December 31, 2021, and 2020, respectively. The increase in net loss before Non-Controlling Interest was attributable to i) increased severance expense of $2.1 million, ii) $2.0 million for a license payment to Novo for the completion of TTP399 phase 2 studies, iii) increases in legal expense of $1.2 million and iv) $0.5 million in stock-based compensation expense due to the modification of awards related to the retirement and separation agreements with several key employees.
Net Loss Per Share: GAAP net loss per share was $0.21 and $0.18 for the years ended December 31, 2021, and 2020, respectively, based on weighted average outstanding shares of 60.7 million and 47.1 million for the years ended December 31, 2021, and 2020, respectively. Non-GAAP adjusted net loss per fully exchanged share was $0.14 and $0.17 for the years ended December 31, 2021, and 2020, respectively, based on non-GAAP fully exchanged weighted average shares outstanding of 83.8 million and 70.2 million for the years ended December 31, 2021, and 2020, respectively.