On August 9, 2018 Savara Inc. (NASDAQ: SVRA), an orphan lung disease company, reported financial results for the second quarter ended June 30, 2018 and provided a business update (Press release, Savara, AUG 9, 2018, View Source [SID1234528711]).
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"We have had an incredibly eventful and productive quarter," said Rob Neville, chief executive officer of Savara. "With two product candidates approaching pivotal data reads and our exploratory NTM program well underway, we believe we are heading into the most exciting twelve months in Savara’s history. Furthermore, the recent acquisition of the assets of Cardeas Pharma Corporation underlines our commitment to our vision to build a prominent orphan lung disease company. With the closing of our recent public offering, we have initiated preparations for Molgradex commercial launch for aPAP, as well as for a new clinical study in CF-affected individuals with chronic NTM infection, and will support our exploratory pipeline."
Upcoming Milestones and Recent Developments
Anticipating completion of enrollment in the Molgradex Phase 3 IMPALA study in Q3 2018. The IMPALA study is evaluating our inhaled formulation of granulocyte-macrophage colony-stimulating factor, or GM-CSF, for the treatment of autoimmune pulmonary alveolar proteinosis, or aPAP. At the end of Q2, enrollment was at 106 patients out of a total target of 135 patients, with completion of enrollment currently on track for Q3 2018 and topline data anticipated in Q2 2019.
Encouraging patient enrollment in the Molgradex IMPALA-X safety extension study. The IMPALA-X study is an open-label, multicenter study designed to determine the long-term safety and utilization of Molgradex in patients with aPAP. IMPALA-X offers patients the opportunity to continue treatment with Molgradex for up to three years after completion of the pivotal Phase 3 IMPALA study. Of the 14 subjects eligible to enroll into IMPALA-X at the end of Q2, 12 have enrolled to date, while the remaining 2 subjects are expected to enroll shortly.
Anticipating completion of enrollment in the Molgradex Phase 2a OPTIMA study in Q3 2018. The OPTIMA study is evaluating our inhaled GM-CSF for the treatment of nontuberculous mycobacterial (NTM) lung infection. At the end of Q2, enrollment was at 17 patients out of a total target of 30 patients, and completion of enrollment remains on track for Q3 2018. Interim results are anticipated in Q4 2018, and topline data anticipated in Q2 2019.
Anticipating completion of enrollment in the AeroVanc Phase 3 AVAIL study in Q1 2019. The AVAIL study is evaluating our vancomycin hydrochloride inhalation powder for the treatment of persistent methicillin-resistant Staphylococcus aureus (MRSA) lung infection in individuals affected by cystic fibrosis. At the end of Q2, enrollment was at 107 patients out of a total target of 200 patients, with completion of enrollment currently on track for Q1 2019 and topline data anticipated in H2 2019.
Provided positive update on the development and commercialization of Molgradex. Savara has received positive investigator feedback on treatment with Molgradex in the open label portion of the IMPALA study, as well as a high interest in participation in the IMPALA-X study. The Company believes the high enrollment rates into the IMPALA-X study gives important insight into the level of satisfaction with Molgradex. Driven by its confidence in the outcome of the IMPALA study, Savara will expedite its preparation for potential commercial launch with investments into core commercial leadership and staff, as well as external activities required for a successful launch. Assuming robust results from the IMPALA study and subsequent breakthrough and/or fast track designation, submission of the Molgradex Biologic License Application, or BLA, is anticipated in the first half of 2020, with a resultant commercial launch in late 2020 or early 2021.
Announced expansion of the Molgradex program, with a Phase 2a clinical study in the U.S. in CF-affected individuals with chronic NTM lung infection expected to begin in Q1 2019. Savara is preparing to initiate a new open-label study in the U.S., which will enroll 30 subjects with chronic Mycobacterium abscessus (M. abscessus) or Mycobacterium avium complex (MAC) infection. The study will comprise a 48-week treatment period and a 24-week follow-up period. The primary endpoint in the study will be NTM sputum culture conversion to negative.
Launched exploratory product pipeline, announced the acquisition of the assets of Cardeas Pharma Corporation and the appointment of A. Bruce Montgomery, M.D., as strategic advisor. As part of Savara’s commitment to growth through innovation and acquisition, the Company launched its exploratory pipeline, focused on pre-proof-of-concept, high-potential programs in difficult-to-treat lung diseases, and announced the acquisition of Cardeas Pharma’s Phase 2 ready aerosolized amikacin/fosfomycin, a proprietary combination antibiotic. In connection with the acquisition, Savara appointed Dr. A. Bruce Montgomery, a leading pioneer in the field of inhaled antibiotics and other orphan lung disease products, as strategic advisor.
Successfully closed a public offering with gross proceeds of approximately $48.9 million. The offering was led largely by existing shareholders along with new institutional healthcare investors. The proceeds of the offering will be used for working capital and general corporate purposes, including helping to fund commercial preparatory efforts for Molgradex in aPAP, launching a new clinical study in CF-affected individuals with chronic NTM infection, and supporting Savara’s exploratory pipeline.
Second Quarter Financial Results
Savara’s net loss attributable to common shareholders for the three months ended June 30, 2018 was $11.6 million, or $(0.38) per share, compared with a net loss attributable to common shareholders of $12.5 million, or $(0.90) per share, for the three months ended June 30, 2017.
Research and development expenses were $9.3 million for the three months ended June 30, 2018, compared with $4.2 million for the three months ended June 30, 2017. This increase was due to several factors, including $2.3 million in additional expenses associated with the AeroVanc Phase 3 study activities; $1.8 million in development costs of Molgradex, including the expansion of the aPAP study in the U.S. and costs associated with the Phase 2 NTM study; and $1 million in expense related to the acquisition of assets from Cardeas.
General and administrative expenses for the three months ended June 30, 2018 were $2.5 million, compared with $5.1 million for the three months ended June 30, 2017. For the three months ended June 30, 2017, the Company recorded a $1.9 million change in fair value of the contingent consideration associated with its acquisition of Serendex compared to only $0.1 million for the three months ended June 30, 2018. In the second quarter of 2017, the Company incurred $1.7 million in expense associated with its merger transaction with Mast Therapeutics, Inc. (the "Merger") in April 2017, none of which was incurred in the second quarter of 2018. In the second quarter of 2018, Savara incurred approximately $0.9 million in additional costs related to personnel and other expenditures associated with public company requirements and activities. Other expense decreased by $2.7 million for the three months ended June 30, 2018 as compared to the same period in 2017. This decrease was primarily due to the second quarter of 2017 having $1.8 million of expense associated with the extinguishment of certain pre-Merger convertible promissory notes.
As of June 30, 2018, Savara had a debt balance of approximately $15.0 million and had cash, cash equivalents and short-term investments of approximately $74.8 million.
Conference Call and Webcast
Savara will hold a conference call today beginning at 5:30pm Eastern Time / 4:30pm Central Time to provide a business update. Shareholders and other interested parties may access the conference call by dialing (855) 239-3120 from the U.S., (855) 669-9657 from Canada, and (412) 542-4127 from elsewhere outside the U.S. and request the Savara Inc. call. A live webcast of the conference call will be available online in the Investors section of Savara’s website at View Source Replays of the webcast will be available on Savara’s website for 30 days and a telephone replay will be available through August 16, 2018 by dialing (877) 344-7529 from the U.S., (855) 669-9658 from Canada, and (412) 317-0088 from elsewhere outside the U.S. and entering replay access code 10122221.