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Concert Pharmaceuticals Reports First Quarter 2019 Financial Results

May 2, 2019 Off By BusinessWire

Conference Call Scheduled Today at 8:30 a.m. ET

LEXINGTON, Mass.–(BUSINESS WIRE)–lt;a href="https://twitter.com/search?q=%24CNCE&src=ctag" target="_blank"gt;$CNCElt;/agt; lt;a href="https://twitter.com/hashtag/CNCE?src=hash" target="_blank"gt;#CNCElt;/agt;–Concert
Pharmaceuticals, Inc. (NASDAQ: CNCE) today reported financial
results for the first quarter of 2019.

“The progress we are making to advance our pipeline positions us for a
series of significant data readouts in 2019,” said Roger Tung, Ph.D.,
President and Chief Executive Officer of Concert Pharmaceuticals.
“Importantly, we expect data from Phase 2 trials of CTP-543 in alopecia
areata later this year to support an end of Phase 2 meeting with FDA to
discuss our registration strategy. In our schizophrenia program, the
Phase 1 trials with CTP-692 will provide important safety data as we
prepare to move the program into a Phase 2 trial in patients in the
fourth quarter. Both of these clinical programs provide significant
opportunities to address unmet medical needs for patients in sizeable
markets.”

Recent Business Highlights and Upcoming Milestones

CTP-543 for Alopecia Areata

The Company continues to make significant progress toward advancing
CTP-543, a Janus kinase (JAK) inhibitor, for the treatment of
moderate-to-severe alopecia areata, an autoimmune disease in which the
immune system attacks hair follicles resulting in patchy or complete
hair loss. Recent highlights include:

Presented CTP-543 Phase 2 Interim Results at American Academy of
Dermatology Annual Meeting. In March 2019, interim results
from the Company’s Phase 2 clinical trial evaluating CTP-543 in
patients with moderate-to-severe alopecia areata were presented in an oral
presentation during the late-breaking clinical trials session at
the American Academy of Dermatology (AAD) Annual Meeting. The interim
results showed that treatment with CTP-543 administered at an 8 mg
twice-daily dose for 24 weeks met the primary endpoint with a
statistically significant greater hair regrowth responder rate,
compared to placebo. Regrowth of hair did not appear to plateau at
Week 24. The primary endpoint measures the proportion of responders,
defined as a ≥ 50% relative reduction in their overall Severity of
Alopecia Tool (SALT) score from baseline. The responders in the 8 mg
twice-daily dose group were evenly distributed among patients with
patchy alopecia areata and the more severe forms with complete scalp
baldness, alopecia totalis and alopecia universalis.
CTP-543 Phase 2 Data Presented at World Congress for Hair
Research. In April 2019, the Company presented its CTP-543
Phase 2 interim clinical data evaluating 4 mg and 8 mg twice daily in
patients with alopecia areata in a poster
presentation and in a sponsored lecture at the 11th World Congress
for Hair Research (WCHR) in Barcelona.
CTP-543 Phase 2 Trial for Alopecia Areata Fully Enrolled.
In January 2019, the Company completed patient enrollment of the final
cohort evaluating 12 mg twice daily of CTP-543 in its Phase 2 trial
for the treatment of moderate-to-severe alopecia areata. Data from the
complete Phase 2 trial, including the 12 mg cohort, is expected in the
third quarter of 2019.
New CTP-543 Trial Initiated to Evaluate Once-Daily Dosing. In
March 2019, Concert initiated an open label clinical
trial to evaluate once-daily compared to twice-daily oral dosing of
CTP-543 in patients with alopecia areata. The trial, which is expected
to complete in the fourth quarter of 2019, is intended to inform the
optimal dosing regimen for CTP-543 for future clinical studies.
PTAB Issues Final Written Decision in IPR Proceeding. On
April 8, 2019, the Patent Trial and Appeal Board (PTAB) of the U.S.
Patent and Trademark Office issued a final written decision in
connection with the inter partes review (IPR) of U.S. Patent No.
9,249,149 (the ‘149 patent). The PTAB found that the claims of the
‘149 patent are not patentable. The ‘149 patent claims cover the
composition of matter of deuterated analogs of ruxolitinib, including
CTP-543 which Concert is developing for alopecia areata. The Company
intends to appeal the decision to the Federal Circuit. The ‘149 patent
remains valid and enforceable until appeals have been exhausted.
Importantly, this decision is specific to certain patent claims
covering CTP-543 and does not affect other programs in our portfolio.

CTP-692 for Schizophrenia

CTP-692 is a deuterated form of D-serine, an endogenous human co-agonist
of the N-methyl-D-aspartate (NMDA) receptor, that Concert is developing
for the adjunctive treatment of schizophrenia. Recent highlights include:

CTP-692 Crossover Results to be Presented at ASCP. The
initial Phase 1 CTP-692 trial evaluated the safety, tolerability, and
pharmacokinetics of a single oral dose of CTP-692 versus D-serine in a
crossover study conducted in Australia. In the study, CTP-692 was
found to have increased plasma exposure compared to D-serine. In
addition, CTP-692 was found to be well tolerated in healthy
volunteers. These results will be presented during the poster session
at The American Society of Clinical Psychopharmacology (ASCP) annual
meeting, being held May 28-31, 2019 in Scottsdale, AZ.
CTP-692 Phase 1 Single-Ascending Dose Trial Complete. In
the first quarter of 2019, the Company completed a Phase 1
single-ascending dose trial evaluating the safety, tolerability, and
pharmacokinetics of CTP-692 in healthy volunteers. The Phase 1
single-ascending dose trial also evaluated the effect of food on the
pharmacokinetics of the compound.
CTP-692 Phase 1 Multiple-Ascending Dose Trial Underway. In
April 2019, Concert initiated the Phase 1
multiple-ascending dose trial to evaluate the safety, tolerability,
and pharmacokinetic profile of CTP-692 in healthy volunteers. This
trial is a double-blind, placebo-controlled, multiple-ascending dose
trial assessing CTP-692 dosed orally over seven consecutive
days. Concert intends to report topline results from the single- and
multiple-ascending dose Phase 1 trials in the second quarter of 2019.

AVP-786 for Neurological Disorders

AVP-786 is a combination of ultra-low dose quinidine and
deuterium-modified dextromethorphan, which is being developed by Avanir
Pharmaceuticals, a subsidiary of Otsuka Pharmaceuticals, under an
exclusive license from Concert. Recent highlights include:

AVP-786 First U.S. Phase 3 Trial Completed in February 2019. Avanir
Pharmaceuticals, a subsidiary of Otsuka Pharmaceuticals, announced the
completion of the first U.S. Phase 3 trial of AVP-786 for the
treatment of agitation associated with Alzheimer’s disease in February
2019. In March 2019, Otsuka announced that the trial, which used the
Sequential Parallel Comparison Design (SPCD), demonstrated a
statistically significant improvement on the primary endpoint on the
Cohen-Mansfield Agitation Inventory for one of the two doses being
evaluated; the other dose demonstrated numerical but not significant
improvement on the SPCD analysis. Similar improvements were also
observed on the key secondary endpoint. Avanir intends to publish the
results in a peer-reviewed journal.
AVP-786 Second U.S. Phase 3 Trial Expected to Complete in
December 2019. A second U.S. Phase 3 trial evaluating AVP-786
for the treatment of agitation associated with Alzheimer’s disease is
ongoing and Avanir has stated that they expect to complete the trial
in December 2019.
AVP-786 Phase 2/3 Trial in Negative Symptoms of Schizophrenia
Initiated. In April 2019, Avanir announced the initiation of a
Phase 2/3 clinical trial to evaluate the effect of AVP-786 in treating
negative symptoms of schizophrenia.

VX-561 for Cystic Fibrosis

In 2017, Vertex Pharmaceuticals acquired worldwide rights to VX-561
(formerly CTP-656) from Concert under an asset purchase agreement. If
VX-561 is approved as part of a combination regimen to treat cystic
fibrosis, Concert could receive up to an additional $90 million in
milestones based on regulatory approval in the U.S. and reimbursement in
the UK, Germany or France. Vertex recently announced that it has
initiated two new trials in cystic fibrosis with VX-561:

VX-561 Monotherapy Trial in Cystic Fibrosis Initiated. In
the second quarter of 2019, Vertex initiated a Phase 2 dose-ranging
study evaluating the once-daily potentiator VX-561 as a monotherapy as
requested by the FDA. The study is designed to evaluate multiple doses
of VX-561 to support potential Phase 3 development of VX-561 in a
once-daily triple combination regimen.
VX-561 Phase 2 Triple Combination Trial Initiated.
Vertex has initiated a Phase 2 study evaluating its next-generation
corrector, VX-121, in combination with VX-561 and tezacaftor as a
potential once-daily triple combination regimen.

Corporate Update

Jesper Høiland Joins Board of Directors. In April 2019,
Concert announced that Jesper Høiland has been appointed to its Board
of Directors and will serve as a member of its Compensation Committee.
Mr. Høiland is an industry veteran with more than 30 years of
experience in the biopharmaceutical industry across numerous senior
leadership roles, geographies and therapeutic areas. As President and
Chief Executive Officer of Radius Health, Inc., Mr. Høiland
successfully launched Radius’ first commercial product, TYMLOS™. Prior
to joining Radius, Mr. Høiland served as President and Executive Vice
President of Novo Nordisk.

First Quarter 2019 Financial Results

Cash and Investment Position. Cash, cash equivalents and
investments as of March 31, 2019, totaled $153.8 million as compared
to $153.3 million as of December 31, 2018. In the first quarter of
2019, Concert received $16.0 million initially held in escrow under
the Asset Purchase Agreement with Vertex. Under its current operating
plan, including the acceleration of CTP-543 into late stage
development, the Company expects its cash, cash equivalents and
investments to be sufficient to fund the Company into the second half
of 2020.
Revenues. Revenue for the quarter ended March 31, 2019
was $1.0 million, compared to $10.5 million for the same period in
2018. Revenue recognized in 2019 consists of a $1.0 million upfront
payment from Cipla Technologies under a license agreement whereby
Cipla has worldwide rights to develop and commercialize CTP-354, a
novel GABA_A receptor subtype-selective modulator. Under an
existing CTP-354 agreement between Concert and the non-profit
organization Fast Forward, the Company paid half of the upfront to
Fast Forward. Revenue in the first quarter of 2018 relates primarily
to the $10.5 million non-cash consideration received from Processa
Pharmaceuticals under a licensing agreement whereby Processa has
worldwide rights to develop and commercialize CTP-499.
R&D Expenses. Research and development expenses were
$15.8 million for the quarter ended March 31, 2019, compared to $8.7
million for the same period in 2018. The increase in R&D expenses
relate primarily to the clinical development of CTP-543, including
multiple ongoing clinical trials, as well as increased expenses
associated with the manufacturing of CTP-692 to support ongoing
clinical development.
G&A Expenses. General and administrative expenses
were substantially unchanged at $5.6 million for both the first
quarter of 2019 and the same period of 2018. Decreases in
employee-related expenses were offset by an increase in professional
and legal expenses.
Net Loss. For the quarter ended March 31, 2019, net loss
applicable to common stockholders was $21.8 million, or $0.93 per
share, compared with a net loss applicable to common stockholders of
$4.5 million, or $0.19 per share, for the quarter ended March 31,
2018. The increase in net loss is a result of both higher R&D spending
in the first quarter of 2019 compared to the first quarter of 2018,
and higher revenues in 2018 due to an upfront payment from Processa.

Conference Call and Webcast
The Company will host a
conference call and webcast
today, Thursday, May 2, 2019, at 8:30 a.m. ET to provide an update on
the Company and discuss first quarter financial results. To access the
conference call, please dial (855) 354-1855 (U.S. and Canada) or (484)
365-2865 (International) five minutes prior to the start time.

A live webcast of Concert’s presentation may be accessed in the Investors
section of the Company’s website at www.concertpharma.com.
Please log on to the Concert website approximately 15 minutes prior to
the scheduled webcast to ensure adequate time for any software downloads
that may be required. A replay of the webcast will be available on
Concert’s website for three months.

– Financial Tables to Follow –


Concert Pharmaceuticals, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts)

	Three Months Ended March 31,
	2019			2018
Revenue:
License and research and development revenue	$	1,005		$	10,479
Operating expenses:
Research and development	15,790			8,656
General and administrative	5,609			5,630
Total operating expenses	21,399			14,286
Loss from operations	(20,394		)	(3,807		)
Investment income	867			640
Unrealized loss on marketable equity securities	(2,299		)	(1,296		)
Net loss	(21,826		)	(4,463		)

Net loss per share applicable to common stockholders – basic and diluted	$	(0.93	)	$	(0.19	)

Weighted average shares outstanding – basic and diluted	23,508			23,223

Concert Pharmaceuticals, Inc. Summary Balance Sheet Data (in thousands)

	March 31, 2019		December 31, 2018
Cash and cash equivalents	$	60,262	$	17,770
Investments, available for sale	93,545		135,544
Working capital	153,869		171,400
Total assets	183,391		192,547
Deferred revenue	10,533		10,533
Total stockholders’ equity	149,798		167,740

About Concert
Concert
Pharmaceuticals is a clinical stage biopharmaceutical company
focused on applying its DCE
Platform® (deuterated chemical entity platform) to create novel
medicines designed to treat serious diseases and address unmet patient
needs. The Company’s approach starts with previously studied compounds,
including approved drugs, in which deuterium substitution has the
potential to enhance clinical safety, tolerability or efficacy.
Concert’s pipeline of
innovative medicines targets autoimmune diseases and central nervous
systems (CNS) disorders. For more information please visit www.concertpharma.com
or follow us on Twitter at @ConcertPharma
or on LinkedIn.

Cautionary Note on Forward Looking Statements
Any statements
in this press release about our future expectations, plans and
prospects, including risks related to the clinical development of our
therapeutic candidates and expectations regarding the sufficiency of our
cash balance to fund operating expenses and capital expenditures, and
other statements containing the words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “target,” “would,” and
similar expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those indicated by such
forward-looking statements as a result of various important factors,
including: the uncertainties inherent in the initiation of future
clinical trials, availability and timing of data from ongoing and future
clinical trials and the results of such trials, whether preliminary
results from a clinical trial will be predictive of the final results of
that trial or whether results of early clinical trials will be
indicative of the results of later clinical trials, expectations for
regulatory approvals, availability of funding sufficient for our
foreseeable and unforeseeable operating expenses and capital expenditure
requirements and other factors discussed in the “Risk Factors” section
of our most recent Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission and in other filings that we make
with the Securities and Exchange Commission. In addition, any
forward-looking statements included in this press release represent our
views only as of the date of this release and should not be relied upon
as representing our views as of any subsequent date. We specifically
disclaim any obligation to update any forward-looking statements
included in this press release.

Concert Pharmaceuticals Inc., the CoNCERT Pharmaceuticals Inc. logo and
DCE Platform are registered trademarks of Concert Pharmaceuticals, Inc.
All other trademarks are those of their respective owners.