On November 9, 2017 Argos Therapeutics Inc. (NASDAQ:ARGS), an immuno-oncology company focused on the development and commercialization of individualized immunotherapies based on the Arcelis precision immunotherapy technology platform, reported financial results and operational highlights for the third quarter of 2017 (Press release, Argos Therapeutics, NOV 9, 2017, View Source [SID1234521853]).
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"We are pleased with the progress we have made since the second quarter, both with regard to our financial position as well as in our two clinical programs," Jeff Abbey, CEO of Argos Therapeutics, noted. "First, from a financial perspective, we are pleased to have raised approximately $10 million through our ATM facility between June and November, and to have received a $1.5 million milestone payment from our partner in China and certain other Asian territories, Lummy (Hong Kong) Ltd. In addition, as previously reported, we were pleased to reach a satisfactory resolution with one of our important vendors regarding the deferred fees that we owed them, thereby significantly extending the payment term."
Mr. Abbey continued, "From an operational perspective, we are continuing the ADAPT clinical trial, and look forward to the next interim analysis, which we expect to occur during the first half of 2018, subject to agreement with the FDA on an amended protocol. In addition, we were encouraged by the updated immunology data from the ADAPT clinical trial indicating that Rocapuldencel-T stimulated an immune response in patients with metastatic renal cell carcinoma in the trial, and by the data from the trial related to the duration of tumor response, that were presented at the European Society for Medical Oncology 2017 Congress in September. Additionally, we are continuing our study of AGS-004 in combination with the latency-reversing agent vorinostat in adult HIV patients."
Operational Highlights
During the third quarter, the Company announced the following progress:
In July 2017, the Company reported positive immunogenicity data from the AGS-004 program for the treatment of HIV
In September 2017, additional data from the Phase 3 ADAPT clinical trial was presented by Robert Figlin, MD, principal investigator, at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) 2017 Conference
In September 2017, the Company announced the first dosing of an HIV patient with AGS-004 derived from the latent viral reservoir
Financial Results
Revenue for the three months ended September 30, 2017 was $53,000 compared to $147,000 for the same period in 2016. The decrease in revenue for the third quarter of 2017 compared with the third quarter of 2016 resulted from lower reimbursement under the Company’s contract with the NIH and NIAID primarily related to the achievement of certain specified development milestones under the Company’s AGS-004 program during 2016.
Research and development expense for the three months ended September 30, 2017 was $4.6 million compared to $9.3 million for the same period in 2016. The decrease in research and development expense for the third quarter of 2017 compared with the third quarter of 2016 was due to reduced expenses associated with the Phase 3 ADAPT trial, and the Company’s decision not to proceed with the development of commercial manufacturing capabilities and to significantly reduce the size of its workforce engaged in research and development activities following the recommendation of the IDMC to discontinue the ADAPT trial for futility.
General and administrative expense for the three months ended September 30, 2017 was $2.9 million compared to $3.0 million for the same period in 2016. The decrease in general and administrative expense for the third quarter of 2017 compared with the third quarter of 2016 was primarily due to reduced consulting and personnel costs.
Additionally, the Company incurred restructuring charges of $679,000 during the three months ended September 30, 2017 related to the Company’s decision to discontinue preparation for commercial manufacturing and reduce the size of its workforce, which amount was offset by a non-cash gain due to the decrease in the value of the warrant liability of $502,000 and a gain on the early extinguishment of debt of $1.5 million associated with the satisfaction and release of all of the Company’s payment obligations to Invetech, Pty Ltd.
Interest expense for the three months ended September 30, 2017 was $67,000 compared to $448,000 for the same period in 2016. The decrease in interest expense for the first three months of 2017 compared with the first three months of 2016 was primarily due to a lower average balance of debt outstanding.
Reflecting the factors noted above, net loss for the three months ended September 30, 2017 was $6.1 million compared to a net loss of $12.2 million for the same period in 2016.
Revenue for the nine months ended September 30, 2017 was $228,000 compared to $782,000 for the same period in 2016. The decrease in revenue for the first nine months of 2017 compared with the first nine months of 2016 resulted from lower reimbursement under the Company’s contract with the NIH and NIAID primarily related to the achievement of certain specified development milestones under the Company’s AGS-004 program during 2016.
Research and development expense for the nine months ended September 30, 2017 was $17.6 million compared to $28.0 million for the same period in 2016. The decrease in research and development expense for the first nine months of 2017 compared with the first nine months of 2016 was due to reduced expenses associated with the Phase 3 ADAPT trial, and the Company’s decision not to proceed with the development of commercial manufacturing capabilities and to significantly reduce the size of its workforce engaged in research and development activities following the recommendation of the IDMC to discontinue the ADAPT trial for futility.
General and administrative expense for the nine months ended September 30, 2017 was $9.5 million compared to $9.4 million for the same period in 2016. The increase in general and administrative expense for the first nine months of 2017 compared with the first nine months of 2016 was primarily due to increased personnel costs.
Additionally, the Company incurred impairment charges of $27.2 million and restructuring charges of $6.0 million during the nine months ended September 30, 2017 related to the Company’s decision to discontinue preparation for commercial manufacturing and reduce the size of its workforce, which amounts were partially offset by a non-cash gain due to the decrease in the value of the warrant liability of $20.7 million and a gain on the early extinguishment of debt of $1.8 million.
Interest expense for the nine months ended September 30, 2017 was $1.1 million compared to $1.5 million for the same period in 2016. The decrease in interest expense for the first nine months of 2017 compared with the first nine months of 2016 was primarily due to a lower average balance of debt outstanding, partially offset by the decision to no longer capitalize the interest related to construction of the Centerpoint facility following the decision not to proceed with plans to develop this facility.
Reflecting the factors noted above, net loss for the nine months ended September 30, 2017 was $38.7 million compared to a net loss of $37.7 million for the same period in 2016.
As of September 30, 2017, cash and cash equivalents totaled $9.4 million.
Upcoming Conference Call and Webcast
Argos will be presenting updated immunology data in the poster session at the 32nd Annual Meeting of the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Conference to be held this weekend in National Harbor, Maryland. Argos will hold a conference call to discuss this data on Monday, November 13th at 8:30am ET (rescheduled from today at 4:30pm). To participate by telephone, please dial (855) 433-0930 (Domestic) or (484) 756-4271 (International). The conference ID number is 9396519. Slides setting forth the data to be presented at the SITC (Free SITC Whitepaper) 2017 Annual Meeting, and a live and archived audio webcast, will be accessible through the Investors section of the Company’s website at www.argostherapeutics.com. The archived webcast will remain available on the Company’s website for twelve (12) months following the call.