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Homology Medicines Reports First Quarter 2019 Financial Results and Recent Highlights

/EIN News/ -- - Received FDA Clearance for IND and Anticipate Starting Phase 1/2 pheNIX Trial for PKU Gene Therapy Candidate with Initial Data Expected by Year End -

- Began IND-Enabling Studies for Two Additional Programs, Including First Gene Editing Program -

- Strengthened Financial Position with $144 Million Public Offering -

BEDFORD, Mass., May 13, 2019 (GLOBE NEWSWIRE) -- Homology Medicines, Inc. (Nasdaq: FIXX), a genetic medicines company, announced today financial results for the quarter ended March 31, 2019, and highlighted recent accomplishments.

“Now that we have IND clearance for HMI-102, our lead gene therapy candidate for PKU, we are approaching the clinic and are on track to report initial data from our Phase 1/2 pheNIX trial later this year,” said Arthur Tzianabos, Ph.D., President and Chief Executive Officer of Homology Medicines. “This milestone was supported by strong preclinical data that we recently presented at multiple scientific meetings. We are also progressing our second gene therapy program and our first gene editing program through IND-enabling studies. Our GMP Commercial Manufacturing Platform is expected to support the trial as well as our growing development pipeline. Our anticipated near-term transition to a clinical stage company with the potential for initial safety and efficacy data by the end of 2019 makes this a significant year for Homology.”

First Quarter 2019 and Recent Accomplishments

  • Announced U.S. Food and Drug Administration (FDA) clearance of the Investigational New Drug Application (IND) for HMI-102, Homology’s gene therapy candidate for adult patients with phenylketonuria (PKU), and clinical sites are preparing for the initiation of the Phase 1/2 pheNIX trial, which is on track for initial data in 2019.
  • Initiated IND-enabling studies for HMI-202, a gene therapy candidate for the treatment of metachromatic leukodystrophy (MLD), and for HMI-103, an in vivo gene editing development candidate for pediatric patients with PKU.
  • Presented data at the 2019 Annual Meeting of the American Society of Gene & Cell Therapy (ASGCT) that demonstrated:
    • Homology’s Manufacturing Platform, which includes serum-free suspension transfection, demonstrated superiority to a baculovirus system, and AAVHSC15 vector showed improved in vivo efficacy compared to AAV5 in the PKU model.
    • Non-clinical tolerability and efficacy results of HMI-102 as well as the translatability of weight-based dosing from murine to non-human primate, support initiation of the pheNIX trial this year.
    • HMI-103 reduced phenylalanine (Phe) to targeted therapeutic levels and selectively edited human cells in PKU gene editing disease models.
    • A single I.V. dose of AAVHSC vector crossed the blood-brain barrier and achieved therapeutic enzyme levels with HMI-202 in the MLD disease model.
  • Presented data at the 2019 Annual Meeting of the Association for Research in Vision and Ophthalmology (ARVO) that showed Homology’s AAVHSC vectors were able to target and enter (transduce) therapeutically relevant cells in the eye across three models using multiple routes of administration and reached cells frequently associated with inherited retinal diseases.
  • Presented preclinical data at the 2019 Annual Clinical Genetics Meeting of the American College of Medical Genetics and Genomics (ACMG) that demonstrated HMI-102 restored the normal biochemical pathway that is lost in PKU, which supports the potential for HMI-102 to address the underlying genetic cause of the disease.
  • Raised $144 million in gross proceeds from an underwritten public offering of shares of common stock, strengthening the Company’s financial position in support of key development milestones anticipated in each of Homology’s programs.             

First Quarter 2019 Financial Results
Net loss for the quarter ended March 31, 2019 was $(23.9) million, or $(0.64) per share, compared to a net loss of $(10.2) million, or $(4.09) per share, for the same period in 2018.  The lower net loss per share in the 2019 period is reflective of the increase in the Company’s outstanding shares as a result of its initial public offering in April 2018.

Collaboration revenue for the quarter ended March 31, 2019 was $0.3 million, compared to $1.1 million for the quarter ended March 31, 2018, and consisted of revenue recognized under the Company’s strategic collaboration with Novartis. The Company recognizes revenue over time consistent with the pattern of performance of research and development activities under the collaboration agreement as a result of adopting Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606) on January 1, 2019, using the full retrospective transition methodology. Homology and Novartis continue to work together on two ophthalmic programs and seek to identify new targets for the partnership based on the exploratory research component of the collaboration.

Total operating expenses for the quarter ended March 31, 2019 were $25.4 million, compared to $11.8 million for the same period in 2018, and consisted of research and development expenses and general and administrative expenses.

Research and development expenses for the quarter ended March 31, 2019 were $20.5 million, compared to $8.0 million for the same period in 2018. The increase of $12.5 million was due to a rise in direct research expenses, including contract manufacturing costs and laboratory supplies related to our HMI-102 program, increased direct research expenses related to HMI-202 and HMI-103 external development costs, and increased personnel costs to support the development programs and research initiatives, as well as expenses related to manufacturing operations.

General and administrative expenses for the quarter ended March 31, 2019 were $4.9 million, compared to $3.8 million for the same period in 2018. The increase of $1.1 million was primarily due to increased personnel costs as a result of new hires and increased costs associated with expanded operations in support of the Company’s initial public offering and financial reporting requirements.

As of March 31, 2019, Homology had approximately $188.0 million in cash, cash equivalents and short-term investments. Homology expects its cash, cash equivalents and short-term investments, which includes net proceeds of $135 million from the recent public offering of common stock, will allow the Company to continue its operations into the fourth quarter of 2021.

Upcoming Events

  • Bank of America Merrill Lynch Healthcare Conference: May 14-16, 2019 in Las Vegas, Nevada
  • European Society of Human Genetics Conference: June 15-18, 2019 in Gothenburg, Sweden
  • JMP Securities Life Sciences Conference: June 19-20, 2019 in New York, New York
  • MLD Family Conference: June 27-28, 2019 in Franklin, Tennessee

About Homology Medicines, Inc.
Homology Medicines, Inc. is a genetic medicines company dedicated to transforming the lives of patients suffering from rare genetic diseases with significant unmet medical needs by curing the underlying cause of the disease. Homology’s proprietary platform is designed to utilize its human hematopoietic stem cell-derived adeno-associated virus vectors (AAVHSCs) to precisely and efficiently deliver genetic medicines in vivo either through a gene therapy or nuclease-free gene editing modality across a broad range of genetic disorders. Homology has a management team with a successful track record of discovering, developing and commercializing therapeutics with a particular focus on rare diseases, and intellectual property covering its suite of 15 AAVHSCs. Homology believes that its compelling preclinical data, scientific expertise, product development strategy, manufacturing capabilities and intellectual property position it as a leader in the development of genetic medicines. For more information, please visit www.homologymedicines.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding upcoming events and presentations; the safety, efficacy, regulatory and clinical progress, and therapeutic potential of our product candidates; our expectations surrounding the initiation of our Phase 1/2 pheNIX trial; plans and timing for the release of clinical data; our beliefs regarding our manufacturing capabilities; our goal of transforming the lives of patients with rare genetic diseases; our beliefs regarding our position as a leader in the development of genetic medicines; and the sufficiency of our cash, cash equivalents and short-term investments. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the fact that we have and expect to continue to incur significant losses; our need for additional funding, which may not be available; failure to identify additional product candidates and develop marketable products; the early stage of our development efforts; our failure or the failure of our collaborators to successfully develop and commercialize drug candidates; potential unforeseen events during clinical trials could cause delays or other adverse consequences; risks relating to the capabilities of our manufacturing facility; risks relating to the regulatory approval process; our product candidates may cause serious adverse side effects; inability to maintain our collaborations, or the failure of these collaborations; our reliance on third parties; the inability to obtain orphan drug exclusivity; failure to obtain U.S. or international marketing approval; ongoing regulatory obligations; effects of significant competition; unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives; product liability lawsuits; failure to attract, retain and motivate qualified personnel; the possibility of system failures or security breaches; risks relating to intellectual property; the price of our common stock may be volatile; significant costs as a result of operating as a public company; and any securities class action litigation. These and other important factors discussed under the caption "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 and our other filings with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

- Financial Tables Follow –

HOMOLOGY MEDICINES, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(in thousands, except share and per share amounts)  
(Unaudited)  
           
    Three months ended March 31,  
      2019       2018    
        (as revised)*  
Collaboration revenue   $   270     $   1,129    
Operating expenses:          
Research and development       20,536         7,997    
General and administrative       4,857         3,828    
Total operating expenses       25,393         11,825    
Loss from operations       (25,123 )       (10,696 )  
Other income (expense):          
Interest income       1,271         479    
Total other income (expense)       1,271         479    
Net loss and net loss attributable to common
  stockholders-basic and diluted
  $   (23,852 )   $   (10,217 )  
Net loss per share attributable to common
  stockholders-basic and diluted
  $   (0.64 )   $   (4.09 )  
Weighted-average common shares outstanding-basic and diluted       37,384,507         2,500,178    
           

 

HOMOLOGY MEDICINES, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(in thousands)  
(Unaudited)  
           
    As of   
    March 31, 2019   December 31, 2018  
        (as revised)*  
Cash and cash equivalents and short-term investments   $   187,967   $   214,737  
Other assets       45,059       44,357  
Total assets   $   233,026   $   259,094  
           
Accounts payable, accrued expenses and other liabilities   $   27,334   $   31,219  
Deferred revenue       31,428       31,520  
Stockholders' equity       174,264       196,355  
Total liabilities and stockholders' equity   $   233,026   $   259,094  
           
           
* The Company revised its condensed consolidated financial statements for prior period amounts as if ASC 606 had been effective for such periods, consistent with the full retrospective adoption methodology. The references "as revised" refer to revisions of data for the three months ended March 31, 2018 and the year ended December 31, 2018 as a result of the adoption of ASC 606.  


Investor & Media Contact
Theresa McNeely
SVP, Corporate Communications
& Patient Advocacy
tmcneely@homologymedicines.com
781-691-3751

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