Applied Genetic Technologies Corporation
Sep 13, 2017
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AGTC Announces Financial Results and Business Update for the Quarter and Fiscal Year Ended June 30, 2017

GAINESVILLE, Fla., and CAMBRIDGE, Mass., Sept. 13, 2017 (GLOBE NEWSWIRE) -- Applied Genetic Technologies Corporation (NASDAQ:AGTC), a clinical-stage biotechnology company that uses its proprietary gene therapy platform to develop transformational genetic therapies for patients suffering from rare and debilitating diseases, today announced financial results for the quarter and fiscal year ended June 30, 2017.

AGTC's lead product candidates are designed to treat inherited orphan diseases of the eye, caused by mutations in single genes that significantly affect visual function and currently lack effective medical treatments.  AGTC's pipeline includes clinical-stage ophthalmology programs in X-linked retinoschisis (XLRS), achromatopsia (ACHM) caused by mutations in the CNGB3 and CNGA3 genes, and X-linked retinitis pigmentosa (XLRP) as well as a preclinical optogenetics program.

Recent Highlights

"We remain focused on the ongoing clinical advancement of our XLRS and ACHM studies.  Completing the dose escalation phase of our Phase 1/2 trial in XLRS and continuing site initiation and patient enrollment in the Phase 1/2 trials of our ACHM programs demonstrate our commitment to accelerate the clinical development of our product candidates," said Sue Washer, President and CEO of AGTC. "This is further demonstrated by the progress of our XLRP program, where we have received orphan drug designation from the FDA, published important work on the design of the product and recently filed an IND application.  Now that our IND has been filed and cleared by the FDA, we expect to initiate patient enrollment in the XLRP program in the first quarter of 2018 and look forward to expanding our clinical pipeline."

XLRS Phase 1/2 Clinical Trial                      
AGTC is currently enrolling patients in a Phase 1/2 clinical trial for its XLRS product candidate as part of the company's collaboration with Biogen.  The primary endpoint of this clinical trial is safety.  
To date, the company has completed enrollment of 12 patients in the first four groups which completes the dose escalation phase of the trial.  The company is also enrolling adult patients in the expansion group at the highest dose level and three children between the ages of 6 and 18 at the mid-dose level.  As of September 13, 2017, a total of 17 adults and one child have been enrolled in the trial across all groups.

In June 2017, Mark Pennesi, M.D., Ph.D., one of the XLRS trial investigators, presented safety data at the Macula Society Annual Meeting from the first twelve patients in the XLRS trial, some of which have been followed for more than one year.  The data demonstrates that the company's XLRS product candidate has been generally safe and well tolerated.  No treatment related serious adverse events have been reported.   
As previously disclosed, mild to moderate ocular inflammation was observed in the majority of patients, which resolved either without treatment or after treatment with topical or oral corticosteroids.

The company has observed variability in the visual function of the 56 patients in its XLRS natural history study, as well as those dosed in its Phase 1/2 trial.  The company believes that in addition to the three patients initially enrolled in the high-dose group, the full group of patients in the expansion group needs to be enrolled and followed for at least six months before meaningful conclusions can be drawn regarding biological activity.  It expects to fully enroll this expansion group by the first quarter of 2018 and will present complete data after the last patient has been followed for six months.  To date, no evidence of biological activity has been seen in the group of treated patients, which is not unexpected given the small patient pool, the relatively short period of observation in the high-dose group and the variability in the patient population.

ACHM CNGB3 Phase 1/2 Clinical Trial
A Phase 1/2 clinical trial evaluating the company's ACHM CNGB3 product candidate is currently enrolling patients. The company has completed enrollment of four patients in the low-dose group. An additional patient will be treated at the low-dose to bring the total number of patients in that group to five; three of which will be patients treated by a single surgeon to minimize differences in surgical technique. The company is collecting the data from the patients in the low-dose group to present to the Data Safety and Monitoring Committee (DSMC) prior to enrollment of patients in the mid-dose group.

ACHM A3 Phase 1/2 Clinical Trial
The company is currently conducting site initiation activities and screening patients for enrollment in a Phase 1/2 clinical trial evaluating the company's ACHM CNGA3 product candidate.

XLRP Clinical Trial
In early August of this year, the company filed an IND with the FDA to support the initiation of a Phase 1/2 clinical trial of the company's gene therapy product candidate for the treatment of XLRP caused by mutations in the RPGR gene. The company is currently conducting site initiation activities at four clinical sites and plans to initiate a clinical study in the United States in the first quarter of 2018.     

Preclinical Optogenetic Program
In February 2017, the company entered into a collaboration agreement with Bionic Sight to develop an optogenetic product candidate for patients with advanced retinal disease. This product would introduce genes for light-sensitive proteins into ocular cells in order to monitor and control their activity using light signals and thus potentially allow patients without functional photoreceptors to regain visual function.  Through the AGTC-Bionic Sight collaboration, the companies will seek to develop a new optogenetic therapy that leverages AGTC's deep experience in gene therapy and ophthalmology and Bionic Sight's innovative neuro-prosthetic device and algorithm for retinal coding.  AGTC is working with Bionic Sight to file their IND for this product candidate, which the company expects to occur in 2018.

Financial Results for the Quarter Ended and Fiscal Year Ended June 30, 2017

Conference Call and Webcast
AGTC will host a conference call and webcast to discuss financial results for the fourth quarter and fiscal year 2017 today at 8:00 am ET.  To access the call, dial 877-407-6184 (US) or 201-389-0877 (outside of the US). The passcode is 13669175. A live webcast will be available in the Events and Presentations section of AGTC's Investor Relations site at Please log in approximately 10 minutes prior to the scheduled start time.

The archived webcast will be available in the Events and Presentations section of the company's website.

About AGTC
AGTC is a clinical-stage biotechnology company that uses its proprietary gene therapy platform to develop transformational genetic therapies for patients suffering from rare and debilitating diseases, with an initial focus in ophthalmology. AGTC's product pipeline includes clinical-stage ophthalmology programs in X-linked retinoschisis (XLRS), X-linked retinitis pigmentosa (XLRP), achromatopsia (ACHM), as well as a preclinical optogenetics program. In addition to these ophthalmology programs, the company expects to advance one or more otology and/or adrenoleukodystrophy (ALD), which is a disease of the central nervous system (CNS) product candidates into clinical development in the next few years. Each of AGTC's XLRS, XLRP and ALD programs are part of its collaboration and license agreement with Biogen. AGTC employs a highly-targeted approach to selecting and designing its product candidates, choosing to develop therapies for indications having high unmet medical need that it believes are clinically feasible and present commercial opportunities. AGTC has a significant intellectual property portfolio and extensive expertise in the design of gene therapy products including capsids, promoters and expression cassettes, as well as, expertise in the formulation, manufacture and physical delivery of gene therapy products.

About X-linked Retinoschisis (XLRS)
XLRS is an inherited retinal disease caused by mutations in the RS1 gene, which encodes the retinoschisin protein. It is characterized by abnormal splitting of the layers of the retina, resulting in poor visual acuity in young boys, which can progress to legal blindness in adult men.

About Achromatopsia (ACHM)
Achromatopsia is an inherited retinal disease, which is present from birth and is characterized by the lack of cone photoreceptor function. The condition results in markedly reduced visual acuity, extreme light sensitivity causing day blindness, and complete loss of color discrimination. Best-corrected visual acuity in persons affected by achromatopsia, even under subdued light conditions, is usually about 20/200, a level at which people are considered legally blind.

About X-linked Retinitis Pigmentosa (XLRP)
XLRP is an inherited condition that causes boys to develop night blindness by the time they are ten and progresses to legal blindness by their early forties.

Forward Looking Statements
This release contains forward-looking statements that reflect AGTC's plans, estimates, assumptions and beliefs. Forward-looking statements include information concerning possible or assumed future results of operations, business strategies and operations, preclinical and clinical product development and regulatory progress, potential growth opportunities, potential market opportunities and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "anticipates," "believes," "could," "seeks," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would" or similar expressions and the negatives of those terms. Actual results could differ materially from those discussed in the forward-looking statements, due to a number of important factors. Risks and uncertainties that may cause actual results to differ materially include, among others: no gene therapy products have been approved in the United States and only two such products have been approved in Europe; AGTC cannot predict when or if it will obtain regulatory approval to commercialize a product candidate; uncertainty inherent in the regulatory review process; risks and uncertainties associated with drug development and commercialization; factors that could cause actual results to differ materially from those described in the forward-looking statements are set forth under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2017, as filed with the SEC. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent management's plans, estimates, assumptions and beliefs only as of the date of this release. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Financial tables follow

  At June 30, 
In thousands, except per share data 2017   2016 
Current assets:        
Cash and cash equivalents $30,706   $28,868 
Investments  95,994    69,664 
Grants receivable  174    954 
Prepaid and other current assets  3,361    3,089 
Total current assets  130,235    102,575 
Investments, net of current portion  11,749    74,183 
Property and equipment, net  2,661    2,627 
Intangible assets, net  1,219    1,321 
Investment in Bionic Sight  2,000     
Other assets  59    91 
Total assets $147,923   $180,797 
Current liabilities:        
Accounts payable $998   $1,331 
Accrued and other liabilities  6,162    6,514 
Deferred revenue  20,996    46,898 
Total current liabilities  28,156    54,743 
Deferred revenue, net of current portion  4,438    16,766 
Total liabilities  32,594    71,509 
Stockholders' equity:        
Common stock, par value $.001 per share, 150,000 shares authorized; 18,088 and 18,053 shares issued and outstanding at June 30, 2017 and June 30, 2016, respectively  18    18 
Additional paid-in capital  204,937    199,303 
Accumulated deficit  (89,626)   (90,033)
Total stockholders' equity  115,329    109,288 
Total liabilities and stockholders' equity $147,923   $180,797 

  For the Three Months

June 30,
  For the Fiscal Year
June 30,
In thousands, except per share amounts 2017   2016   2017   2016  
Collaboration revenue $8,323   $12,043   $39,282   $46,751  
Grant and other revenue  22    79    191    610  
Total revenue  8,345    12,113    39,473    47,361  
Operating expenses:                
Research and development  8,301    6,756    26,217    39,376  
General and administrative  2,847    2,870    11,354    10,074  
Total operating expenses  11,148    9,626    37,571    49,450  
Income (loss) from operations  (2,803)   2,487    1,902    (2,089) 
Other income (expense):                
Investment income, net  253    244    952    711  
Other expense  (47)   (3)   (47)   (3) 
Total other income (expense), net  206    241    905    708  
Income (loss) before provision for income taxes  (2,597)   2,728    2,807    (1,381) 
Provision for income taxes  600        2,400      
Net (loss) income $(3,197)  $2,728   $407   $(1,381) 
Net (loss) income per share, basic  $(0.18)  $0.15   $0.02   $(0.08) 
Net (loss) income per share, diluted $(0.18)  $0.15   $0.02   $(0.08) 
Weighted average shares outstanding, basic  18,072    18,038    18,072    17,810  
Weighted average shares outstanding, diluted  18,072    18,451    18,385    17,810  


David Carey (IR)
Lazar Partners Ltd.
T: (212) 867-1768


Bill Sullivan
Chief Financial Officer
Applied Genetic Technologies Corporation
T: (386) 462-2204