Vital Therapies, Inc. (Nasdaq: VTL), a biotherapeutic company that
has been developing ELAD®, a cell-based therapy targeting the
treatment of acute forms of liver failure, today announced results
for the year ended December 31, 2018.
Recent Developments
On January 6, 2019, we entered into an exchange agreement (the
“Exchange Agreement”), with Immunic AG, or Immunic, and all of the
current shareholders of Immunic. Under this agreement, all
Immunic shareholders will exchange all of their Immunic shares for
shares of our common stock, with the result of Immunic becoming a
wholly-owned subsidiary of Vital Therapies (the
“Transaction”). Concurrently, Immunic’s shareholders entered
into an agreement with Immunic, under which, subject to the terms
and conditions of such agreement, they will invest an aggregate
amount of approximately €26.7 million, or US $30.5 million, in
Immunic prior to the consummation of the Transaction.
Following the closing of the Transaction, the company will be
renamed “Immunic, Inc.” and will focus on advancing Immunic’s
pipeline of treatments for chronic inflammatory and autoimmune
diseases. As a result of the exchange, Immunic shareholders are
expected to own approximately 89% of the company, subject to
adjustment as provided in the Exchange Agreement.
Among other conditions, completion of the Transaction requires
approval of both the issuance of the Company’s common stock in the
exchange and the change of control resulting from the Transaction
by an affirmative vote of the holders of a majority of the shares
of our common stock at a special meeting of our stockholders,
currently scheduled for April 4, 2019. Additional information
regarding the Transaction is included in our registration statement
on Form S-4 filed with the Securities and Exchange Commission in
February 2019 and the related definitive proxy
statement/prospectus. Subject to approval of our stockholders and
other conditions, the Transaction is expected to close as early as
the first half of April 2019.
Also in January 2019, in an effort to further reduce operating
costs, our board of directors notified Mr. Russell J. Cox, our
chief executive officer at the time, that his employment with us
would be terminated without cause, and Mr. Cox submitted his
resignation as a director to coincide with his termination date.
The Vital Therapies’ board of directors then appointed our
President, Duane D. Nash, M.D., to Mr. Cox’s prior position of
chief executive officer and as a director.
“We are very excited by the prospect of a
potential combination with Immunic AG, which has a very experienced
team developing three oral and potentially best-in-class small
molecules for a variety of auto-immune and anti-inflammatory
indications,” said Dr. Nash. “We believe these assets hold
great potential to not only provide much-needed options to patients
with severe and devastating medical conditions, but also to deliver
value to Vital Therapies stockholders. We look forward to an
expeditious close of this transaction.”
2018 Financial Results
Cash Position
Cash and cash equivalents at December 31, 2018,
totaled $13.3 million compared to $56.9 million at December 31,
2017. The Company expects its ongoing use of funds will
change based on, among other things, the strategic options that it
determines to pursue.
Results of Operations
Year Ended December 31, 2018
The Company reported a net loss of $41.5 million
for the year ended December 31, 2018, which compared with a net
loss of $52.1 million for the prior year. This resulted in a
net loss of $0.98 per share for the year ended December 31, 2018,
as compared to a net loss of $1.31 per share for 2017, on both a
basic and diluted basis.
Research and development expenses decreased to
$24.8 million for the year ended December 31, 2018 as compared to
$39.3 million for the year ended December 31, 2017. General and
administrative expenses were $13.6 million for the year ended
December 31, 2018, as compared to $13.3 million for the year ended
December 31, 2017.
Vital Therapies® and ELAD® are trademarks of
Vital Therapies, Inc. Vital Therapies, Inc. is based in San
Diego, California.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include statements
concerning our ongoing operations and strategic opportunities or
implying that we will be successful in realizing such an
opportunity, as well the potential benefits of the proposed
Transaction. Forward-looking statements are based on
management's current expectations and are subject to various risks
and uncertainties that could cause actual results to differ
materially and adversely from those expressed or implied by such
forward-looking statements. Accordingly, these
forward-looking statements do not constitute guarantees of future
performance, and you are cautioned not to place undue reliance on
these forward-looking statements.
Risks and uncertainties include, but are not
limited to, those concerning or implying the Company will be
successful in completing the Transaction, or that the Company will
be able to enhance or maximize stockholder value. Risks and
uncertainties related to this process include, but are not limited
to, whether any other transaction can be completed, and the
Company’s ability to conserve cash or to raise funds sufficient to
acquire products or attract an alternative partner. In addition,
substantially all of the Company’s clinical, manufacturing,
quality, regulatory and medical personnel are no longer employees
and, if the Company does not, or is unable to, retain certain
remaining personnel, it may be difficult to complete a transaction.
The Company’s existing or future liabilities could also be seen as
detrimental to any potential partners. There can be no assurance
that the Company will be able to conserve sufficient cash, raise
additional funding on reasonable terms or at all, or complete any
transaction, including the proposed Transaction with Immunic.
These and other risks regarding our business are
described in detail in our Securities and Exchange Commission
filings, including in our Annual Report on Form 10-K for the year
ended December 31, 2018 and definitive proxy statement/prospectus
dated February 15, 2019. These forward-looking statements
speak only as of the date hereof, and Vital Therapies, Inc.
disclaims any obligation to update these statements except as may
be required by law.
Additional Information about the Proposed Transaction
between Vital Therapies, Inc. and Immunic AG and Where to Find
It
In connection with the proposed Transaction, Vital Therapies and
Immunic intend to file relevant materials with the Securities and
Exchange Commission, or the SEC, and Vital Therapies has filed a
registration statement on Form S-4 and a final proxy
statement/prospectus. The registration statement was declared
effective by the SEC on February 14, 2019, and the definitive proxy
statement was first mailed or otherwise made available to Vital
Therapies stockholders on February 19, 2019. Investors and security
holders of Vital Therapies and Immunic are urged to read the final
proxy statement/prospectus (including any amendments or supplements
thereto) and other documents filed with the SEC when they become
available because they contain important information about Vital
Therapies, Immunic and the proposed Transaction. In addition to
receiving the final proxy statement/prospectus and proxy card by
mail, Vital Therapies stockholders can also obtain the final proxy
statement/prospectus, as well as other filings containing
information about Vital Therapies, without charge, from the SEC’s
website (http://www.sec.gov) or, without charge, by directing a
written request to: Vital Therapies, Inc., 15222-B Avenue of
Science, San Diego, CA, 92128, Attention: Investor Relations.
This communication does not constitute a solicitation of proxy,
an offer to purchase or a solicitation of an offer to sell any
securities.
Vital Therapies and its executive officers and directors may be
deemed to be participants in the solicitation of proxies from Vital
Therapies’ stockholders with respect to the matters relating to the
proposed Transaction. Immunic may also be deemed a participant in
such solicitation. Information regarding Vital Therapies’ executive
officers and directors is available in Vital Therapies’ proxy
statement on Schedule 14A for its 2018 annual meeting of
stockholders, filed with the SEC on April 12, 2018. Information
regarding any interest that Vital Therapies, Immunic or any of the
executive officers or directors of Vital Therapies or Immunic may
have in the transaction with Immunic is set forth in the final
proxy statement/prospectus that Vital Therapies has filed with the
SEC in connection with its stockholder vote on matters relating to
the proposed Transaction.
Contact:
Vital Therapies, Inc.Investor
Relations858-673-6840InvestorRelations@vitaltherapies.com
Vital Therapies, Inc. |
Condensed Consolidated Balance
Sheets |
(unadited and in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
13,324 |
|
$ |
56,901 |
Prepaid
expense and other current assets |
|
|
908 |
|
|
1,220 |
Property
and equipment, net |
|
|
709 |
|
|
2,155 |
Other
assets |
|
|
37 |
|
|
108 |
Total
assets |
|
$ |
14,978 |
|
$ |
60,384 |
|
|
|
|
|
|
Accounts
payable, accrued expenses and current liabilities |
|
$ |
2,510 |
|
$ |
10,281 |
Long-term
liabilities |
|
|
41 |
|
|
59 |
Total
stockholders’ equity |
|
|
12,427 |
|
|
50,044 |
Total
liabilities and stockholders’ equity |
|
$ |
14,978 |
|
$ |
60,384 |
|
|
|
|
|
|
Vital Therapies, Inc. |
Condensed Consolidated Statements of
Operations |
(unadited and in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
Operating
expenses: |
|
|
|
|
|
Research and
development |
|
$ |
24,825 |
|
|
$ |
39,341 |
|
|
General and
administrative |
|
|
13,585 |
|
|
|
13,314 |
|
|
Severance costs |
|
|
2,395 |
|
|
|
— |
|
|
Impairment loss |
|
|
1,219 |
|
|
|
— |
|
Total
operating expenses |
|
|
42,024 |
|
|
|
52,655 |
|
Loss from
operations |
|
|
(42,024 |
) |
|
|
(52,655 |
) |
Other
income |
|
|
549 |
|
|
|
577 |
|
Net
loss |
|
$ |
(41,475 |
) |
|
$ |
(52,078 |
) |
|
|
|
|
|
|
Net loss
per share, basic and diluted |
|
$ |
(0.98 |
) |
|
$ |
(1.31 |
) |
|
|
|
|
|
|
Weighted-average common shares outstanding, basic and diluted |
|
42,369,245 |
|
|
|
39,859,009 |
|
|
|
|
|
|
|
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