Axcella Health posts second quarter 2019 net loss of $14.4 million

Initiated a Non-IND, IRB-Approved Clinical Study for AXA1957 in adolescent subjects with NAFLD

Announced the publication in Frontiers of data describing attenuation of muscle atrophy observed with AXA2678 in short-term muscle disuse study

Finished the second quarter with $117.9 million in cash and cash equivalents, which provides cash runway through the middle of 2021

CAMBRIDGE, Mass.–(BUSINESS WIRE)–Axcella Health Inc. (Nasdaq: AXLA) (“Axcella” or the “Company”), a biotechnology company pioneering the research and development of novel multifactorial interventions to address dysregulated metabolism and support health, today announced financial results for the second quarter ended June 30, 2019 and provided a company update.

“Our Company continued to make headway in the clinic with the initiation of our first study in adolescents. This Non-IND, IRB-Approved Clinical Study is being conducted in subjects with Non-Alcoholic Fatty Liver Disease or NAFLD. NAFLD is driven by metabolic dysregulation which is increasing in incidence. We believe our unique development model and ability to generate human data prior making a development path decision for our AXA Candidates provides the potential to make rapid and well-informed product development decisions. Our ongoing clinical programs, including AXA1665 for Hepatic Encephalopathy and AXA1125/AXA1957 in liver are progressing well and we look forward to completing enrollment and anticipate reporting additional human data next year,” said Bill Hinshaw, President and Chief Executive Officer of Axcella. “We completed the second quarter with $117.9 million in cash and cash equivalents which we believe positions us well to continue developing our current pipeline while expanding into new potential areas.”

Corporate Highlights

• In July 2019, Axcella initiated a Non-IND, IRB-Approved Clinical Study for AXA1957 in adolescent subjects with NAFLD
• In July 2019, Axcella announced the publication of data describing attenuation of muscle atrophy observed with AXA2678 in short-term muscle disuse study
• In May 2019, Axcella completed its initial public offering, raising gross proceeds of $71.4 million through the sale of 3,571,428 shares of common stock at an initial public offering price of $20.00 per share and commenced trading on The Nasdaq Global Market under the ticker symbol AXLA

Anticipated Milestones

• Initiate a Non-IND, IRB-Approved Clinical Study of AXA4010 in subjects with sickle cell disease in the second half of 2019
• Report data from our Non-IND, IRB-Approved Clinical Study of AXA1665 in subjects with hepatic insufficiency in the first half of 2020
• Report data from our Non-IND, IRB-Approved Clinical Study of AXA1125 and AXA1957 in adult subjects with NAFLD in the second half of 2020
• Report data from our Non-IND, IRB-Approved Clinical Study of AXA1957 in adolescent subjects with NAFLD in the second half of 2020
• Report data from our Non-IND, IRB-Approved Clinical Study of AXA4010 in subjects with sickle cell disease in the second half of 2020

Second Quarter Financial Results

For the second quarter ended June 30, 2019, Axcella reported a net loss of approximately $14.4 million, or $0.95 per share, basic and diluted, compared to a net loss for the quarter ended June 30, 2018 of $9.4 million, or $2.15 per share, basic and diluted.

Research and development expenses for the quarter ended June 30, 2019 were $9.3 million, compared to $6.0 million for the quarter ended June 30, 2018. The increase in expense for the quarter was driven by an increase in costs related to the conduct of Non-IND, IRB-Approved Clinical Studies and other expenses associated with the development of AXA candidates in 2019.

General and administrative expenses were $4.7 million for the quarter ended June 30, 2019, compared to $2.9 million for the quarter ended June 30, 2018. The increase in general and administrative expenses for the year was driven by increased professional services and employee-related costs as the Company continues to increase headcount and expand infrastructure to support its growth.

Cash and cash equivalents were $117.9 million as of June 30, 2019.

Six Month Financial Results

Net loss for the first six months of 2019 was $26.0 million, or $2.60 per share, basic and diluted, compared to a net loss of $17.5 million, or $4.08 per share, basic and diluted, for the first six months of 2018. In the six months ended June 30, 2019, Axcella invested $16.9 million in research and development expenses related the conduct of Non-IND, IRB-Approved Clinical Studies and other expenses associated with the development of AXA candidates in 2019, compared to $11.5 million in the first six months of 2018. General and administrative expenses were $8.2 million during the first six months of 2019, as compared to $5.0 million for the same period in 2018.

Cash Flows used in operating activities for the six months ended June 30, 2019 were $25.4 million.