Zevra Therapeutics, Inc. (NasdaqGS: ZVRA) (Zevra, or the
Company), a rare disease therapeutics company, today provided
corporate updates and reported its financial results for the
quarter ended June 30, 2023.
Recent Business and Corporate
Highlights:
- Continued advancement of the
arimoclomol New Drug Application (NDA) for resubmission to the U.S.
Food and Drug Administration (FDA):
- Completed a productive and
collaborative pre-submission meeting with the FDA in August 2023,
receiving important information that will be used to finalize the
NDA for resubmission.
- NDA package is anticipated to be
submitted in Q4 2023.
- Year-to-date net sales of AZSTARYS®
surpassed $25 million, triggering the first net sales milestone
payment of $5 million, which was earned and recognized in Q2 2023
revenue, and was received after quarter-end; net sales trend
supports the potential to earn a second net sales milestone during
2023.
- Continued advancement of a Phase 2
clinical trial evaluating KP1077 as an investigational treatment
for IH:
- Phase 2 IH trial is actively
enrolling 48 adult patients with IH at more than 30 sites in the
U.S.
- Interim Phase 2 data for the
open-label titration phase of the trial are expected by the end of
Q3 2023.
- Topline Phase 2 data in IH is
expected to be reported in the first half of 2024 based on the pace
of enrollment.
- Expanded the clinical program for
KP1077 by opening an Investigational New Drug Application (IND) for
narcolepsy, extending its potential to address multiple rare sleep
disorders.
- Phase 1 clinical trial in healthy
volunteers initiated during Q2 2023 and is currently
enrolling.
- By leveraging the data from the IH
program and the existing dataset generated as part of the AZSTARYS
development program for serdexmethylphenidate (SDX), the sole
active pharmaceutical ingredient in KP1077, Zevra can potentially
initiate a pivotal Phase 3 trial in narcolepsy sometime next
year.
- Strong balance sheet, with $87.4
million in cash, cash equivalents, and investments as of June 30,
2023, which supports our forecasted operating cash runway into
2026.
- Forecast includes the ongoing
reimbursements from the French early access program for
arimoclomol, completion of the arimoclomol NDA resubmission,
commercial activities to support the launch of arimoclomol, if
approved, and completion of the KP1077 development program for IH
up to NDA submission.
- Forecast does not include revenue
from arimoclomol after potential FDA approval, or the potential
sale of the Priority Review Voucher, which would be received at
that time, as well.
- Thomas Anderson was appointed to
the Board of Directors on August 7, 2023, as part of an ongoing
plan of Board refreshment first announced on May 8, 2023.
“The first half of 2023 has been a time of
dynamic change for Zevra, and we are pleased with our progress in
executing on the key priorities for our programs in Niemann-Pick
Disease type C (NPC) and Idiopathic Hypersomnia (IH),” said
Christal Mickle, interim Chief Executive Officer and Chief
Development Officer at Zevra. “We have made meaningful progress in
our preparation of the arimoclomol NDA, including a productive and
collaborative pre-submission meeting with the FDA earlier this
month, which provides confidence as we anticipate re-submission of
the NDA package by the end of this year. In addition, the KP1077
program is on track, and we are pleased with progress toward the
AZSTARYS® net sales milestones and the momentum toward the
possibility of earning a second net sales milestone in 2023. Zevra
has several upcoming catalysts for value creation, and we believe
our focus on developing and commercializing therapies for rare
diseases with a patients-first approach will lead to better
therapies for the communities we serve.”
Tamara A. Favorito, Zevra’s Board Chair added,
“Just last week, we announced the addition of Thomas Anderson to
our Board of Directors, which was an important step in executing
the plan of Board refreshment we announced on May 8, 2023. Tom
brings to Zevra relevant experience in managing successful
commercial teams, and in navigating complex drug development
challenges, including a track record of success in strategic roles
within the rare disease space. Our search to identify both a new
chief executive officer and an additional replacement Board member
continues to progress. There are excellent candidates available,
and I am confident that we will fill these roles in the
near-term.”
Overview of Q2 2023 Financial
Results:
Net revenue for Q2 2023 was $8.5 million
compared to Q2 2022 net revenue of $1.3 million. AZSTARYS milestone
revenues, ongoing royalties from AZSTARYS, and the French early
access program for arimoclomol primarily drove Q2 2023 net
revenue.
Research and development (R&D) expenses were
$7.4 million for Q2 2023, compared to $4.8 million in Q2 2022. The
increase in R&D expenses were primarily driven by the ongoing
Phase 2 clinical trial in KP1077, along with the ongoing work to
prepare the arimoclomol NDA for resubmission.
General and administrative (G&A) expenses
were $7.0 million for Q2 2023, compared to $3.6 million in Q2 2022.
The period-over-period increase was primarily related to an
increase in personnel costs and professional fees.
Net loss for Q2 2023 was ($5.1) million, or
($0.15) per basic and diluted share, compared to a net loss of
($24.0) million, or ($0.70) per basic and diluted share for the
same period in 2022. The net loss during Q2 2022 included
recognition of $17.7 million of expense related to acquired
in-process research and development from the arimoclomol asset
acquisition which was immediately expensed. As of
June 30, 2023, total cash, cash equivalents, and investments were
$87.4 million, a decrease of $7.9 million compared to $95.3 million
as of March 31, 2023. The decrease was driven, in part, by
increased third-party R&D costs related to the KP1077 clinical
trial program and the arimoclomol program and increased G&A
expenses during the period. The balance as of June 30, 2023,
does not include the cash payment of the $5 million net sales
milestone earned under the AZSTARYS license agreement which was
received after quarter-end.
Based on the Company’s current operating
forecast, existing cash, cash equivalents, and investments are
expected to be sufficient to continue operations into 2026.
As of June 30, 2023, total shares of common
stock outstanding were 33,928,005, and fully diluted common shares
outstanding were 49,315,197, which included 4,252,490 shares
issuable upon exercise of warrants.
Conference Call
Information:
Zevra will host a conference call and live audio
webcast with a slide presentation today at 8:30 a.m. ET, to discuss
its corporate and financial results for Q2 2023.
The audio webcast with a slide presentation will
be accessible via the Investor Relations section of the Company’s
website, http://investors.zevra.com/. An archive of the webcast and
presentation will be available for 90 days beginning at
approximately 9:30 a.m. ET, on August 14, 2023.
Additionally, interested participants and
investors may access the conference call by dialing
either:
- (800) 267-6316
(U.S.)
- +1 (203) 518-9783
(International)
- Conference ID:
ZVRAQ223
About Niemann-Pick disease type C (NPC):
Niemann-Pick disease type C (NPC) is an
ultra-rare and progressive, neurodegenerative lysosomal storage
disorder characterized by an inability of the body to transport
cholesterol and other lipids within the cell, leading to an
accumulation of these substances in various tissue areas, including
brain tissue. The disease is caused by mutations in the NPC1 or
NPC2 genes which are responsible for making lysosomal proteins and
is an autosomal recessive trait. Both children and adults can be
affected by NPC with varying clinical presentations. Those living
with NPC lose independence due to physical and cognitive
limitations, with key neurological impairments presenting in
speech, cognition, swallowing, ambulation, and fine motor skills.
Disease progression is irreversible and can be fatal within months
or take years to be diagnosed and advance in severity.
About Arimoclomol:
Arimoclomol, Zevra’s orally-delivered,
first-in-class investigational product candidate for the treatment
of NPC, has been granted orphan drug designation, Fast Track
designation, Breakthrough Therapy designation and rare pediatric
disease designation for NPC by the FDA, and orphan medicinal
product designation for the treatment of NPC by the European
Medicines Agency (EMA). The arimoclomol NDA is currently being
prepared for resubmission to the FDA.
About Idiopathic Hypersomnia
(IH):
Idiopathic hypersomnia (IH) is a rare sleep
disorder characterized by excessive daytime sleepiness. Patients
with IH experience daytime lapses into sleep, or an irrepressible
need to sleep that persists even with adequate or prolonged
nighttime sleep. Additionally, those with IH have extreme
difficulty waking, otherwise known as “sleep inertia,” severe
“brain fog”, and often fall asleep unintentionally or at
inappropriate times. These symptoms of IH often lead to further,
even more debilitating problems such as memory lapses, difficulty
maintaining focus, and depression.
It is estimated that approximately 37,000
patients in the United States are currently diagnosed with IH and
seeking treatment, although the total patient population may be
much larger due to some patients not seeking treatment or being
undiagnosed or misdiagnosed.
About Narcolepsy:
Narcolepsy is a chronic debilitating central
disorder of hypersomnolence. The primary symptom of narcolepsy is
excessive daytime sleepiness characterized by daily episodes of an
irrepressible need to sleep or daytime lapses into sleep. Patients
with narcolepsy have an abnormal rapid eye movement (REM) sleep
phase which can cause disrupted nighttime sleep, sleep paralysis
and sleep-related hallucinations during sleep-wake transitions.
Narcolepsy has severe personal, social, and economic consequences.
Patients with narcolepsy experience substantial impairment of their
mental and physical wellbeing, and depression and anxiety are
common. Cognitive dysfunctions such as difficulty to focus and
memory lapses (also referred to as ‘brain fog’) are frequently
reported. The many symptoms experienced by patients with narcolepsy
result in a high disease burden and poor quality of life.
Narcolepsy is categorized in to two types:
narcolepsy type 1 (NT1) and type 2 (NT2). NT1 is considered a
distinct disease entity characterized in part by loss of hypocretin
neurons and symptoms of cataplexy (sudden, brief attacks of muscle
weakness sometimes resulting in the body to fall uncontrollably,
often triggered by strong emotions). When narcolepsy presents
without cataplexy and with normal hypocretin-1 concentrations in
the cerebrospinal fluid (CSF), it is categorized as NT2
(Hypocretin-1 is also known as orexin-A, a neuropeptide involved in
regulating sleep-wake cycles).
The combined worldwide prevalence of both types
of narcolepsy has been estimated to be 25-50 per 100,000 people.
Epidemiological studies using well-defined criteria for assessing
the prevalence of narcolepsy (both NT1 and NT2) estimate incidence
rates ranging from 31 to 79 per 100,000 people corresponding to
approximately 100,000 to 260,000 total patients in the United
States.
About SDX and KP1077:
Serdexmethylphenidate (SDX) is Zevra’s
proprietary prodrug of d-methylphenidate (d-MPH) and the sole
active pharmaceutical ingredient (API) in KP1077, Zevra’s lead
clinical candidate being developed as a treatment for idiopathic
hypersomnia (IH) and narcolepsy. Zevra is currently enrolling a
multicenter, dose-optimizing, double-blind, placebo-controlled,
randomized-withdrawal Phase 2 clinical trial to evaluate safety and
efficacy of KP1077 as a treatment for IH. For more information
regarding the Phase 2 trial, visit www.clinicaltrials.gov.
SDX is also the primary API in AZSTARYS®, a
once-daily product for the treatment of attention deficit
hyperactivity disorder (ADHD) in patients ages six and older being
commercialized in the U.S. by Corium, Inc.
KP1077 has been granted Orphan Drug Designation
by the U.S. Food and Drug Administration (FDA) for the
treatment of IH, and the U.S. Drug Enforcement
Agency (DEA) has classified SDX, the sole API in KP1077, as a
Schedule IV controlled substance based on evidence suggesting SDX
has a lower potential for abuse when compared to d-MPH, a Schedule
II controlled substance.
About Zevra Therapeutics:
Zevra Therapeutics is a rare disease company
melding science, data, and patient need to create transformational
therapies for diseases with limited or no treatment options. With
unique, data-driven clinical, regulatory, and commercialization
strategies, the Company is overcoming complex drug development
challenges to bring much-needed therapies to patients. With both
regulatory and clinical stage product candidates, the Company is
building its commercial capability to make new therapies available
to the rare disease community.
Early access programs are made available by
Zevra Therapeutics and its affiliates and are subject to the
Company's Early Access Program (EAP) policy as published on its
website at zevra.com. Participation in these programs is subject to
the laws and regulations of each jurisdiction under which each
respective program is operated. Eligibility for participation in
any such program is at the treating physician's discretion.
Cautionary Note Concerning Forward
Looking Statements:
This press release may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include all
statements that do not relate solely to historical or current
facts, and which can be identified by the use of words such as
"may," "will," "expect," "project," "estimate," "anticipate,"
"plan," "believe," "potential," "should," "continue," "could,"
"intend," "target," "predict," or the negative versions of those
words or other comparable words or expressions, although not all
forward-looking statements contain these identifying words or
expressions. Forward-looking statements are not guarantees of
future actions or performance. These forward-looking statements
include without limitation statements regarding senior leadership
and board member transitions and refreshment, or the timing
thereof, and our strategic and product development objectives, the
potential sale of the Priority Review Voucher, the promise and
potential impact of our preclinical or clinical trial data,
including without limitation the initiation, timing and results of
any clinical trials or readouts, the content, information used for,
timing or results of any IND applications and NDA submissions or
resubmissions for arimoclomol, KP1077, or any other product
candidates for any specific disease indication or at any dosage,
the potential achievement of commercial sales or revenue milestones
for AZSTARYS and the timing thereof, the sufficiency of our cash,
cash equivalents and investments to fund our operating activities
for any specific period of time, and our strategic and product
development objectives, including with respect to becoming a
leading, commercially-focused rare disease company. Forward-looking
statements are based on information currently available to Zevra
and its current plans or expectations. They are subject to several
known and unknown uncertainties, risks, 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. These and other important factors are described in
detail in the “Risk Factors” section of Zevra’s Annual Report on
Form 10-K for the year ended December 31, 2022, as updated in
Zevra’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2023, and Zevra’s other filings with the Securities and
Exchange Commission. While we may elect to update such
forward-looking statements at some point in the future, except as
required by law, we disclaim any obligation to do so, even if
subsequent events cause our views to change. Although we believe
the expectations reflected in such forward-looking statements are
reasonable, we cannot assure that such expectations will prove
correct. These forward-looking statements should not be
relied upon as representing our views as of any date after the date
of this press release.
Contacts:
Nichol Ochsner +1 (732)
754-2545 nochsner@zevra.com
Jennifer Arcure +1 (917)
603-0681 Jennifer.arcure@evokegroup.com
ZEVRA THERAPEUTICS, INC. UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share
amounts) |
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue, net |
|
$ |
8,470 |
|
|
$ |
1,300 |
|
|
$ |
11,349 |
|
|
$ |
5,265 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
677 |
|
|
|
51 |
|
|
|
802 |
|
|
|
59 |
|
Research and development |
|
|
7,433 |
|
|
|
4,795 |
|
|
|
16,277 |
|
|
|
7,877 |
|
Selling, general and administrative |
|
|
7,005 |
|
|
|
3,558 |
|
|
|
13,839 |
|
|
|
6,292 |
|
Acquired in-process research and development |
|
|
— |
|
|
|
17,663 |
|
|
|
— |
|
|
|
17,663 |
|
Total operating expenses |
|
|
15,115 |
|
|
|
26,067 |
|
|
|
30,918 |
|
|
|
31,891 |
|
Loss from operations |
|
|
(6,645 |
) |
|
|
(24,767 |
) |
|
|
(19,569 |
) |
|
|
(26,626 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(197 |
) |
|
|
(36 |
) |
|
|
(379 |
) |
|
|
(41 |
) |
Fair value adjustment related to derivative and warrant
liability |
|
|
— |
|
|
|
32 |
|
|
|
— |
|
|
|
273 |
|
Fair value adjustment related to investments |
|
|
131 |
|
|
|
(352 |
) |
|
|
327 |
|
|
|
(495 |
) |
Interest and other income, net |
|
|
1,553 |
|
|
|
366 |
|
|
|
2,593 |
|
|
|
264 |
|
Total other income |
|
|
1,487 |
|
|
|
10 |
|
|
|
2,541 |
|
|
|
1 |
|
Loss before income taxes |
|
|
(5,158 |
) |
|
|
(24,757 |
) |
|
|
(17,028 |
) |
|
|
(26,625 |
) |
Income tax benefit |
|
|
74 |
|
|
|
715 |
|
|
|
177 |
|
|
|
719 |
|
Net loss |
|
$ |
(5,084 |
) |
|
$ |
(24,042 |
) |
|
$ |
(16,851 |
) |
|
$ |
(25,906 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(0.15 |
) |
|
$ |
(0.70 |
) |
|
$ |
(0.49 |
) |
|
$ |
(0.75 |
) |
Weighted average number of
shares of common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
33,898,233 |
|
|
|
34,447,206 |
|
|
|
34,180,818 |
|
|
|
34,476,737 |
|
|
ZEVRA THERAPEUTICS, INC. UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands, except share and par value amounts) |
|
|
|
June, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
66,196 |
|
|
$ |
65,466 |
|
Securities at fair value |
|
|
20,696 |
|
|
|
16,900 |
|
Short-term investments - other |
|
|
479 |
|
|
|
481 |
|
Accounts and other receivables |
|
|
14,033 |
|
|
|
8,299 |
|
Prepaid expenses and other current assets |
|
|
2,023 |
|
|
|
1,877 |
|
Total current assets: |
|
|
103,427 |
|
|
|
93,023 |
|
Inventories |
|
|
546 |
|
|
|
671 |
|
Property and equipment,
net |
|
|
689 |
|
|
|
794 |
|
Operating lease right-of-use
assets |
|
|
803 |
|
|
|
988 |
|
Long-term investments -
other |
|
|
— |
|
|
|
20,000 |
|
Other long-term assets |
|
|
53 |
|
|
|
53 |
|
Total assets: |
|
$ |
105,518 |
|
|
$ |
115,529 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
10,510 |
|
|
$ |
6,169 |
|
Current portion of operating lease liabilities |
|
|
456 |
|
|
|
480 |
|
Current portion of discount and rebate liabilities |
|
|
6,965 |
|
|
|
4,655 |
|
Other current liabilities |
|
|
321 |
|
|
|
422 |
|
Total current liabilities: |
|
|
18,252 |
|
|
|
11,726 |
|
Line of credit payable |
|
|
12,709 |
|
|
|
12,800 |
|
Operating lease liabilities,
less current portion |
|
|
627 |
|
|
|
843 |
|
Discount and rebate
liabilities, less current portion |
|
|
5,114 |
|
|
|
4,327 |
|
Other long-term
liabilities |
|
|
317 |
|
|
|
25 |
|
Total liabilities: |
|
|
37,019 |
|
|
|
29,722 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock: |
|
|
|
|
|
|
|
|
Undesignated preferred stock, $0.0001 par value, 10,000,000 shares
authorized, no shares issued or outstanding as of June 30, 2023, or
December 31, 2022 |
|
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value, 250,000,000 shares authorized,
35,503,697 shares issued and 33,928,005 shares outstanding as of
June 30, 2023; 35,450,257 shares issued and 34,540,304 shares
outstanding as of December 31, 2022 |
|
|
3 |
|
|
|
3 |
|
Additional paid-in capital |
|
|
405,127 |
|
|
|
401,799 |
|
Treasury stock, at cost |
|
|
(10,983 |
) |
|
|
(7,536 |
) |
Accumulated deficit |
|
|
(325,423 |
) |
|
|
(308,572 |
) |
Accumulated other comprehensive (loss) income |
|
|
(225 |
) |
|
|
113 |
|
Total stockholders' equity: |
|
|
68,499 |
|
|
|
85,807 |
|
Total liabilities and
stockholders' equity: |
|
$ |
105,518 |
|
|
$ |
115,529 |
|
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