On May 9, 2018 Savara Inc. (NASDAQ:SVRA), an orphan lung disease company, reported financial results for the first quarter ended March 31, 2018 and provided a business update (Press release, Savara, MAY 9, 2018, View Source [SID1234526406]).

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"It has been an incredibly productive quarter, including the launch of two new clinical studies, OPTIMA and IMPALA-X, with our lead product candidate Molgradex," stated Rob Neville, chief executive officer of Savara. "With a total of four ongoing clinical studies, our focus for the remainder of the year will continue to be the advancement of our core programs, while actively exploring the further expansion of our 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 Q1, enrollment was at 96 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.

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 living with cystic fibrosis. At the end of Q1, enrollment was at 62 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.

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. The study was initiated in mid-March 2018 and is expected to be completed in Q3 2018. As OPTIMA is an open-label study, depending on enrollment and other factors, interim results from the study may be provided during 2018.

Announcing first patient enrolled 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. Savara plans to initiate the IMPALA-X study in a rolling fashion in 12 of the countries participating in the IMPALA study by the end of 2018.
First Quarter Financial Results

Savara’s net loss attributable to common shareholders for the three months ended March 31, 2018 was $26.8 million, or $(0.88) per share, compared with a net loss attributable to common shareholders of $5.0 million, or $(1.65) per share, for the first quarter of 2017, which represents the historical financial information of the private company Savara Inc., which completed its merger transaction with Mast Therapeutics, Inc. on April 27, 2017 (the "Merger").

Research and development expenses were $8.5 million for the three months ended March 31, 2018, compared with $2.9 million for the first quarter of 2017. The increase was primarily due to $2.7 million in increased expenses associated with the development of Molgradex, including the expansion of the IMPALA study in the U.S. and other countries and the commencement of the Molgradex NTM study, an increase of $2.2 million in AeroVanc study costs related to Phase 3 activities, and $0.7 million related to non-recurring milestone payments relating to the Aironite study acquired in the Merger, which was not a part of our product pipeline in the first quarter of 2017.

General and administrative expenses for the three months ended March 31, 2018 were $1.8 million, compared with $1.7 million for the first quarter of 2017.

Also, during the three months ended March 31, 2018, we recognized a one-time noncash impairment charge of $21.7 million to the carrying value of IPR&D related to the Aironite product candidate assumed in the Merger due to the unfavorable results from a Phase 2 study in which Aironite failed to meet the endpoints of the study and showed limited effectiveness in patients. We do not intend to further support or pursue the development of Aironite.

We reported a $4.6 million tax benefit for the first quarter of 2018 related to the reversal of a deferred tax liability resulting from the impairment of IPR&D acquired in the Merger.

As of March 31, 2018, Savara had cash, cash equivalents and short-term investments of approximately $85.0 million. The company’s operating expenses for the first quarter of 2018 were approximately $32.1 million which included the one-time noncash impairment charge of $21.7 million to the carrying value of IPR&D acquired in the Merger. Savara ended the first quarter of 2018 with approximately $14.9 million in debt.

Conference Call and Webcast
Savara will hold a conference call today beginning at 5:30 p.m. Eastern Time / 4:30 p.m. 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 should request the Savara Inc. call. A live webcast of the conference call will be available online from 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 May 16th, 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. by entering replay access code 10119917.