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Concert Pharmaceuticals Reports First Quarter 2019 Financial Results

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 GABAA 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.

Contacts

Justine Koenigsberg (investors)
Concert Pharmaceuticals, Inc.
(781)
674-5284
[email protected]

Kathryn
Morris (media)
The Yates Network
(914) 204-6412
[email protected]

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