On March 2, 2020 Neon Therapeutics, Inc. (Nasdaq: NTGN) reported financial results for the fourth quarter and full-year ended December 31, 2019 and provided a business update (Press release, Neon Therapeutics, MAR 2, 2020, View Source [SID1234555024]).
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"Earlier this year, we were delighted to announce our entry into a definitive merger agreement with BioNTech. Once closed, the transaction will combine two organizations with a common culture of pioneering translational science and a shared vision for the future of cancer immunotherapy," said Hugh O’Dowd, Chief Executive Officer of Neon. "We continue to be encouraged by the potential of our novel neoantigen-targeted T cell therapies and are confident that this merger with BioNTech will provide the foundation from which to ensure that potential will be realized."
BioNTech Transaction Details
Under the terms of the definitive merger agreement, Neon will, following consummation of the acquisition, merge with Endor Lights, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of BioNTech SE (Nasdaq: BNTX) and become a wholly-owned subsidiary of BioNTech. At closing, BioNTech will issue, and Neon shareholders will receive, 0.063 American Depositary Shares (ADS) (each ADS representing one ordinary share of BioNTech) in exchange for each of their shares of Neon. The exchange ratio implies a deal value of approximately $67 million, or $2.18 per share of Neon, based on the closing price of BioNTech’s ADSs of $34.55 on Wednesday, January 15, 2020, the date of the definitive merger agreement.
The transaction was unanimously approved by both BioNTech’s and Neon’s boards of directors. The transaction, which is expected to close during the second quarter of 2020, is subject to approval by Neon’s shareholders and the satisfaction of customary closing conditions. Certain stockholders of Neon owning approximately 36% of the outstanding Neon shares have entered into voting agreements, pursuant to which they have agreed, among other things, and subject to the terms and conditions of the agreements, to vote in favor of the Neon acquisition.
Fourth Quarter and Full Year 2019 Financial Results:
Cash Position: As of December 31, 2019, cash and cash equivalents were $29.4 million, as compared to cash, cash equivalents and marketable securities of $103.3 million as of December 31, 2018.
R&D Expenses: R&D expenses were $12.7 million for the fourth quarter of 2019 and $59.7 million for the year ended December 31, 2019, as compared to $18.0 million for the fourth quarter of 2018 and $60.4 million for the year ended December 31, 2018. The decrease for both fourth quarter and full year 2019 was primarily driven by decreased costs supporting NEO-PV-01, including clinical development and manufacturing costs, as Neon shifted its strategic focus towards personal and precision neoantigen-targeted T cell therapy candidates. The decreases were partially offset by an increase in costs related to Neon’s investment in NEO-PTC-01 and other pre-clinical candidates that are aligned with Neon’s refined strategic focus, as well as an increase in personnel-related costs, including one-time restructuring charges in connection with our November 2019 workforce reduction.
G&A Expenses: G&A expenses were $5.3 million for the fourth quarter of 2019 and $21.4 million for the year ended December 31, 2019, as compared to $5.8 million for the fourth quarter of 2018 and $18.3 million for the year ended December 31, 2018. The decrease for the fourth quarter was primarily due to the timing of expenditures associated with protecting Neon’s owned and in-licensed intellectual property. The increase for
the full year was primarily due to increased personnel-related costs and costs associated with being a public company.
Net Loss Attributable to Common Stockholders: Net loss was $17.8 million for the fourth quarter of 2019 and $79.8 million for the year ended December 31, 2019, or a net loss per basic and diluted share of $(0.63) and $(2.86), respectively, as compared to a net loss of $23.1 million for the fourth quarter of 2018 and $83.3 million for the year ended December 31, 2018, or a net loss per basic and diluted share of $(0.84) and $(5.54), respectively.