On August 9, 2018 Histogenics Corporation (Histogenics) (Nasdaq: HSGX), a leader in the development of restorative cell therapies (RCTs) that may offer rapid-onset pain relief and restored function, reported its financial and operating results for the quarter ended June 30, 2018 (Press release, Histogenics, AUG 9, 2018, View Source;p=irol-newsArticle&ID=2363018 [SID1234528593]).
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"Our focus in the second quarter of 2018 was on the NeoCart Biologics License Application submission and we remain on track to announce top-line data in the third quarter of 2018. In preparation for this exciting milestone, we enhanced our management team with the addition of Lynne Kelley as Chief Medical Officer. Lynne’s experience and capabilities in medical and regulatory affairs and product development will be instrumental as we advance the preparation of the upcoming BLA for NeoCart," said Adam Gridley, President and Chief Executive Officer of Histogenics. "We also made important progress on the international expansion of the NeoCart platform alongside MEDINET, our NeoCart development and commercialization partner in Japan, as they prepare for the initiation of the Phase 3 trial in Japan in the second half of the year."
Second Quarter 2018 and Recent Highlights
NeoCart top-line Phase 3 Data Release on Track for Third Quarter of 2018: Histogenics expects to report top-line data from its 249-patient Phase 3 randomized, controlled clinical trial of NeoCart in the third quarter of 2018. The trial is designed to show superiority of NeoCart at one year after treatment as compared to microfracture, the current standard of care, and will follow patients for three years.
Expansion and Enhancement of Executive Team: In July 2018, Histogenics appointed Lynne Kelley as its Chief Medical Officer. In this role, Dr. Kelley will leverage her 20 plus years of executive management and surgical experience in medical affairs, clinical operations, regulatory affairs and product development to establish Histogenics’ medical affairs strategy and build a medical affairs team to support the potential launch of NeoCart. Dr. Kelley will also work with the executive team on the preparation of the upcoming Biologics License Application (BLA) for NeoCart and any related discussions with the United States Food and Drug Administration (FDA).
Held Inaugural Investor Day: In June 2018, Histogenics hosted its first investor day in New York City. Members of Histogenics’ management team discussed the commercialization plan for NeoCart and provided an overview of its Restorative Cell Technology platform. The team was joined by leading orthopedic surgeons who shared their overall experiences with and provided their clinical perspectives on NeoCart, as well as a NeoCart patient from the Phase 3 clinical trial who provided his thoughts on his recovery, specifically the impact NeoCart has had on his ability to return to work and sports activities. The event also included a discussion on the NeoCart mechanism of action based on work conducted as part of Histogenics’ collaboration with Cornell University. A full replay of the webcast is available via the "Investor Relations" page of Histogenics’ website, www.histogenics.com, or by clicking here.
Financial Results for the Second Quarter of 2018
Loss from operations was $(7.3) million in the second quarter of 2018, compared to $(6.4) million in the second quarter of 2017. The increase in operating expenses was due to an increase in both research and development expenses and general and administrative expenses.
Research and development expenses were $4.5 million in the second quarter of 2018, compared to $4.2 million in the second quarter of 2017. The increase was primarily due to increases in consulting, salaries and materials in connection with the potential submission of a BLA for NeoCart with the FDA and was partially offset by a reduction in patient costs related to the NeoCart Phase 3 clinical trial, for which enrollment was completed in June 2017. General and administrative expenses were $2.8 million in the second quarter of 2018, compared to $2.2 million in the second quarter of 2017. The increase was primarily due to higher salaries and consulting expenses related to increased activities to support the potential commercialization of NeoCart.
Net loss attributable to common stockholders was $(3.7) million in the second quarter of 2018, or $(0.13) per share, compared to $(5.5) million, or $(0.25) per share, in the second quarter of 2017. The decrease in net loss attributable to common stockholders is primarily due to the conversion of convertible preferred stock issued in connection with the 2016 private placement into common stock and a change in the fair value of the warrant liability which generated a gain in the second quarter of 2018, both of which were partially offset by an increase in operating expenses.
As of June 30, 2018, Histogenics had cash, cash equivalents and marketable securities of $8.8 million, compared to $8.0 million at December 31, 2017. Histogenics believes its current cash position will be sufficient to fund its operations into the fourth quarter of 2018.
Conference Call and Webcast Information
Histogenics management will host a conference call on Thursday, August 9, 2018 at 8:30 a.m. EDT. A question-and-answer session will follow Histogenics’ remarks. To participate on the live call, please dial (877) 930-8064 (domestic) or (253) 336-8040 (international) and provide the conference ID "6679509" five to ten minutes before the start of the call.
To access a live audio webcast of the presentation on the "Investor Relations" page of the Histogenics website, please click here. A replay of the webcast will be archived on Histogenics’ website for approximately 45 days following the presentation.