Orchard Therapeutics (Nasdaq: ORTX), a global gene therapy leader,
today announced several business accomplishments along with its
financial results for the quarter ended June 30, 2023.
“With the completion of the rolling BLA
submission for OTL-200 to the FDA, we are now one significant step
closer to bringing this important therapy to families in the U.S.
affected by MLD who currently have no treatment options beyond
supportive care,” said Bobby Gaspar, M.D., Ph.D., chief executive
officer. “We look forward to working with the agency throughout the
filing and review process and expect to hear from the FDA regarding
acceptance of the BLA in the third quarter of this year.”
Dr. Gaspar continued, “In addition, the $34
million in proceeds from the second closing of our strategic
financing ensures we are well-capitalized to progress U.S. launch
preparations, continue investing in initiatives aimed at
accelerating commercial growth in Europe, and advance our
next-in-line neurometabolic programs in MPS disorders. The next 12
months have the potential to provide Orchard Therapeutics several
breakout opportunities as we work to cement our leadership position
in the HSC gene therapy field.”
BLA Submission Completed for OTL-200 in
the U.S.
The company has completed the rolling submission
of its Biologics License Application (BLA) to the U.S. Food and
Drug Administration (FDA) for OTL-200, in children with early-onset
metachromatic leukodystrophy (MLD). OTL-200 previously received
both Rare Pediatric Disease (RPD) and Regenerative Medicine
Advanced Therapy (RMAT) designations from the FDA. Orchard
Therapeutics has requested priority review, which if granted, would
put OTL-200 on track for a potential U.S. approval in the first
half of 2024.
OTL-200 is approved as Libmeldy® (atidarsagene
autotemcel) by the European Commission (EC) and Medicines and
Healthcare products Regulatory Agency (MHRA). The clinical
development program for Libmeldy comprises data spanning 39
children and encompassing more than 10 years follow-up in the
earliest treated patients.
Second Closing of Strategic Financing
Resulted in $34.0M of New Capital
In June 2023, the company completed the second
closing of its previously announced strategic financing, resulting
in $34.0 million of new capital before placement agent and
transaction fees, bringing the total raised to $68.0 million. These
securities were sold at a significant premium to the company’s
share price on the date of issuance. Orchard Therapeutics expects
funding from the first and second closing to provide cash runway to
mid-2025.
The company could bring in up to an additional
$120 million in proceeds in 2024 at a price of $11.00 per American
Depositary Share (ADS) following potential U.S. approval of OTL-200
if all warrants sold as part of the securities purchase agreement
are exercised by participating investors.
Libmeldy Commercial Momentum and Newborn
Screening Updates
- Orchard Therapeutics has secured
reimbursement agreements for Libmeldy in four additional European
countries in 2023. Most recently, The Decision Forum for New
Approaches in Norway agreed to authorize Libmeldy for all eligible
patients with early-onset MLD. Eligible MLD patients in Norway will
be referred to the company’s treatment center in Sweden, once it is
fully qualified.
- To date, nine prospective newborn
screening studies are active throughout Europe, the U.S. and the
Middle East. By the end of 2023, more than 200,000 newborns are
expected to have been screened.
- Four confirmed cases of MLD have
been identified following the screening of approximately 150,000
newborns globally as of June 30.
- These preliminary findings suggest
an incidence rate closer to one in 50,000 live births versus prior
estimates in medical literature of one in 100,000.
- Multiple eligible MLD patients
identified in these studies have been or are expected to be treated
commercially with Libmeldy in 2023, continuing to add to the
pipeline of potential patients.
- In addition, efforts are underway
to enable universal newborn screening for MLD, notably:
- In the U.S., the Illinois state
legislature passed the Newborn Metabolic Screening Act, also known
as SB67, which requires the state Department of Public Health to
screen all newborns for MLD. The bill was signed by the governor
last week, and it is expected Illinois will start the process of
implementing statewide screening for MLD this year.
- In Germany, following the positive
identification of three newborns with MLD from a prospective study,
progress has been made toward an application for nationwide
screening.
Chief Commercial Officer Braden Parker added,
“Since launch, we have generated nearly $26 million in total
revenue for Libmeldy in Europe and continue to be successful
treating eligible patients in countries with reimbursement
agreements, while expanding our commercial reach geographically. We
are proud to support newborn screening research for MLD to generate
the data necessary to enable the implementation of universal MLD
screening, which will help ensure timely diagnosis and treatment
referral so children and their families can be offered the
opportunity for the best possible outcomes. The data generated thus
far from these studies suggests a significantly higher incidence
than was previously estimated in the literature and may lead to a
greater commercial opportunity for Libmeldy. We remain on track to
meet our goal of year-over-year revenue growth in 2023, and with
the completion of our rolling BLA submission for OTL-200 in MLD, we
are ramping up our U.S. pre-launch activities.”
Recent Data Presentations
Six presentations demonstrating the company’s
leadership in neurometabolic and CNS disorders, as well as the
ability of hematopoietic stem cell (HSC) gene therapy to address
larger indications were featured at the 26th Annual Meeting of the
American Society of Gene and Cell Therapy (ASGCT) in Los Angeles.
The totality of the data highlights the ability of gene modified
HSCs to migrate into multiple organ systems including bone, central
nervous system and gastrointestinal tract and deliver therapeutic
enzymes and proteins locally to effect disease correction.
Data highlights included:
- Additional OTL-203 proof-of-concept
data demonstrated extensive metabolic correction in the skeletal
system of patients with mucopolysaccharidosis type I Hurler
syndrome (MPS-IH) resulting in normal growth rates, skeletal
remodeling, improvement in joint function and progressive
acquisition of motor skills.
- Updated OTL-201 data from the
ongoing proof-of-concept study in mucopolysaccharidosis type IIIA
(MPS-IIIA) patients showed additional favorable neurocognitive
outcomes compared to disease natural history with median follow-up
of 2.5 years.
- The first preclinical data for
OTL-204 highlighted the ability of HSC gene therapy to express
progranulin in the CNS, modulate neuroinflammation, and normalize
predictive biomarkers in the progranulin form of frontotemporal
dementia (GRN-FTD).
- Preclinical proof-of-concept data
showed the therapeutic potential of OTL-104 for nucleotide-binding
oligomerization domain containing protein 2 (NOD2) Crohn’s, a
severe and treatment-refractory form of the disease.
- In vivo data demonstrated the
feasibility of utilizing HSC gene therapy to provide stable and
targeted immunotherapy, through the ability of HSCs to
differentiate into T regulatory (Treg) cells engineered to express
chimeric antigen-specific receptors (CAR). This approach combines
the proven durability of HSC gene therapy with the specific
suppressive activity of CAR-Treg cells as a potential one-time
treatment for autoimmune disorders.
Remaining 2023 Expected
Milestones
Orchard Therapeutics has outlined the following
key milestones expected for the remainder of 2023:
- Libmeldy: Continue to establish
additional qualified treatment centers and expand newborn screening
activities throughout Europe, the U.S. and the Middle East.
- OTL-200 for MLD: Secure
acceptance of the BLA submission by FDA in advance of a potential
U.S. approval in the first half of 2024.
- OTL-203 for MPS-IH: Initiate a
global, multi-center registrational trial by year end.
- OTL-104 for NOD2-Crohn’s disease:
Commence IND- and CTA-enabling studies in the second half of 2023,
ahead of a potential filing in 2025.
- Advance the company’s other
pre-clinical programs, which includes OTL-204 in the progranulin
form of FTD and OTL-105 partnered with and funded by Pharming Group
N.V. in hereditary angioedema (HAE).
Second Quarter 2023 Financial
Results
Total revenue was $7.3 million for the three
months ended June 30, 2023, comprising $6.6 million in Libmeldy
revenue and $0.7 million in collaboration revenue. This compares to
total revenue of $4.4 million, comprising $3.2 million in Libmeldy
revenue, $0.6 million of Strimvelis revenue and $0.6 million in
collaboration revenue in the same period in 2022. Libmeldy revenue
increased 111% compared to the corresponding period in the prior
year. The cost of product sales, which includes the cost of
manufacturing, royalties to third parties and non-cash
amortization, was $2.2 million during the second quarter of 2023
compared to $1.1 million in the same period in 2022. The company
reported gross margins of approximately 70% for the three months
ended June 30, 2023.
For the three months ended June 30, 2023, the
company reported research and development (R&D) expenses of
$16.7 million, compared to $22.0 million in the same period in
2022, a decrease of 24%. The decline primarily resulted from the
reprioritizing the company’s portfolio in 2022 and the realignment
of its R&D organization with a more focused strategy. R&D
expenses include the costs of clinical trials and pre-clinical work
on the company’s portfolio of investigational gene therapies, as
well as costs related to regulatory, manufacturing, license fees
and milestone payments under the company’s agreements with third
parties, and personnel costs to support these activities.
For the three months ended June 30, 2023, the
company reported selling, general and administrative (SG&A)
expenses of $11.0 million compared to $13.7 million in the same
period in 2022, a decrease of 20%. The decline resulted primarily
from the realization of savings in SG&A expenditures from the
restructuring announced in March 2022.
Loss from operations was $22.6 million in the
three months ended June 30, 2023, compared to a loss from
operations of $32.4 million in the corresponding period of 2022, a
decrease of 30%. The reduction resulted from a combination of
higher Libmeldy product sales as well as lower operating expenses.
The company expects its operating loss will continue to decline as
Libmeldy revenue grows in Europe combined with a potential
commercial launch in the U.S. in 2024.
Total other income was $10.3 million for the
three months ended June 30, 2023. The company reported an $8.2
million gain relating to the fair value remeasurements of warrants
and other liabilities that were issued in connection with the first
and second closings of the strategic financing entered into in
March 2023. The outstanding warrants will continue to be remeasured
in future periods resulting in non-cash gains or losses based on a
number of valuation assumptions on the underlying financial
instruments.
Net loss was $12.3 million for the three months
ended June 30, 2023, compared to $51.1 million in the same period
in 2022, a reduction of 76%. The company had approximately 227.2
million ordinary shares, equivalent to 22.7 million American
Depositary Shares, outstanding as of June 30, 2023.
The company expects its cash used to fund
operations in 2023 to decline as compared to 2022 due to an
anticipated increase in revenue from Libmeldy product sales and
ongoing management of operating expenses.
As of June 30, 2023, the company reported cash,
cash equivalents and investments of approximately $155.0 million,
with $27.9 million of debt outstanding, compared to $148.0 million
and $32.4 million of debt outstanding as of December 31, 2022.
Orchard Therapeutics expects that its existing cash, cash
equivalents and investments will fund its anticipated operating,
debt service and capital expenditure requirements to mid-2025.
Conference Call and WebcastThe
company will host a conference call and live webcast today at 8:00
a.m. EDT to review business updates and its second quarter 2023
financial results.
A live webcast will be available under "News
& Events" in the Investors & Media section of the company's
website at www.orchard-tx.com. Analysts wishing to participate in
the question and answer session should use this link to register. A
replay of the webcast will be archived on the Orchard website
following the presentation.
About Libmeldy /
OTL-200Libmeldy (atidarsagene autotemcel), also known as
OTL-200, has been approved by the European Commission for the
treatment of MLD in eligible early-onset patients characterized by
biallelic mutations in the ARSA gene leading to a reduction of the
ARSA enzymatic activity in children with i) late infantile or early
juvenile forms, without clinical manifestations of the disease, or
ii) the early juvenile form, with early clinical manifestations of
the disease, who still have the ability to walk independently and
before the onset of cognitive decline. Libmeldy is the first
therapy approved for eligible patients with early-onset MLD.
The most common adverse reaction attributed to
treatment with Libmeldy was the occurrence of anti-ARSA antibodies.
In addition to the risks associated with the gene therapy,
treatment with Libmeldy is preceded by other medical interventions,
namely bone marrow harvest or peripheral blood mobilization and
apheresis, followed by myeloablative conditioning, which carry
their own risks. During the clinical studies of Libmeldy, the
safety profiles of these interventions were consistent with their
known safety and tolerability.
For more information about Libmeldy, please see
the Summary of Product Characteristics (SmPC) available on the
European Medicines Agency (EMA) website.
Libmeldy is approved in the European Union, UK,
Iceland, Liechtenstein and Norway. OTL-200 is an investigational
therapy in the U.S.
Libmeldy was developed in partnership with the
San Raffaele-Telethon Institute for Gene Therapy (SR-Tiget) in
Milan, Italy.
About Orchard TherapeuticsAt
Orchard Therapeutics, our vision is to end the devastation caused
by genetic and other severe diseases. We aim to do this by
discovering, developing and commercializing new treatments that tap
into the curative potential of hematopoietic stem cell (HSC) gene
therapy. In this approach, a patient’s own blood stem cells are
genetically modified outside of the body and then reinserted, with
the goal of correcting the underlying cause of disease in a single
treatment.
In 2018, the company acquired GSK’s rare disease
gene therapy portfolio, which originated from a pioneering
collaboration between GSK and the San Raffaele Telethon Institute
for Gene Therapy in Milan, Italy. Today, Orchard is advancing a
pipeline spanning pre-clinical, clinical and commercial stage HSC
gene therapies designed to address serious diseases where the
burden is immense for patients, families and society and current
treatment options are limited or do not exist.
Orchard has its global headquarters
in London and U.S. headquarters in Boston. For
more information, please visit www.orchard-tx.com, and follow
us on Twitter and LinkedIn.
Availability of Other Information About
OrchardInvestors and others should note that Orchard
communicates with its investors and the public using the company’s
website (www.orchard-tx.com), the investor relations website
(ir.orchard-tx.com), and on social media
(Twitter and LinkedIn), including but not limited to
investor presentations and investor fact sheets, U.S.
Securities and Exchange Commission (SEC) filings, press
releases, public conference calls and webcasts. The information
that Orchard posts on these channels and websites could be deemed
to be material information. As a result, Orchard encourages
investors, the media, and others interested in Orchard to review
the information that is posted on these channels, including the
investor relations website, on a regular basis. This list of
channels may be updated from time to time on Orchard’s investor
relations website and may include additional social media channels.
The contents of Orchard’s website or these channels, or any other
website that may be accessed from its website or these channels,
shall not be deemed incorporated by reference in any filing under
the Securities Act of 1933.
Forward-Looking StatementsThis
press release contains forward-looking statements, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements that are not
statements of historical facts are, or may be deemed to be,
forward-looking statements. Such forward-looking statements may
also be identified by words such as “anticipates,” “potential,”
“expects” and other similar expressions. Forward-looking statements
include express or implied statements relating to, among other
things: Orchard’s estimates and expectations with respect to its
financial performance, including revenue, expenses, trend of
cash-burn rates and cash-runway; the incidence rate of diseases
that our products and product candidates are intended to treat,
including the incidence of MLD; the therapeutic potential of
Orchard’s products and product candidates, including the ability of
HSC gene therapy to address larger indications; Orchard’s
expectations regarding the timing of regulatory submissions and
approvals of its product candidates, including the timeline for
acceptance of Orchard’s BLA submission for OTL-200; Orchard’s
expectations regarding the timing of U.S. approval for OTL-200; the
additional proceeds receivable by Orchard upon exercise of the
warrants issued pursuant to its previously announced strategic
financing; the number of newborns expected to be screened for MLD,
and the timing and likelihood of additional newborn screening
studies; and Orchard’s ability and expectations to meet its
anticipated 2023 milestones, as further described in this
release.
These statements are neither promises nor
guarantees and are subject to a variety of risks and uncertainties,
many of which are beyond Orchard’s control, which could cause
actual results to differ materially from those contemplated in
these forward-looking statements. In particular, these risks and
uncertainties include, without limitation: Orchard’s anticipated
cash runway assumes U.S. FDA approval of OTL-200 in the first half
of 2024, which may be delayed or not occur, and achievement of net
sales in the U.S. and Europe in line with management’s forecasts,
which may not happen; the risk that Orchard’s OTL-200 BLA
submission is not accepted on the timeline we expect or at all; the
risk that our revenues will be less than we anticipate; the risk
that our expenses will be greater than we anticipate; the risk that
Orchard is unable to set up additional qualified treatment centers
and newborn screening or is delayed in doing so; the risk that
Orchard will not maintain marketing approval; the risk that
long-term adverse safety findings may be discovered; the risk that
the warrants issued pursuant to Orchard’s previously announced
strategic financing are not exercised, that only a subset of the
warrants are exercised, or that the exercise price of the warrants
is lower than anticipated due to a delay in OTL-200’s U.S.
approval. Given these uncertainties, the reader is advised not to
place any undue reliance on such forward-looking statements. Other
risks and uncertainties faced by Orchard include those identified
under the heading "Risk Factors" in Orchard’s most recent annual or
quarterly report filed with the SEC, as well as subsequent filings
and reports filed with the SEC. The forward-looking statements
contained in this press release reflect Orchard’s views as of the
date hereof, and Orchard does not assume and specifically disclaims
any obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by law.
Condensed Consolidated Statements of Operations
Data(In thousands, except share and per share
data)(Unaudited) |
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
Product revenue, net |
|
$ |
6,651 |
|
|
$ |
3,781 |
|
Collaboration revenue |
|
|
663 |
|
|
|
587 |
|
Total revenue |
|
|
7,314 |
|
|
|
4,368 |
|
Costs and operating
expenses: |
|
|
|
|
|
|
Cost of product revenue |
|
|
2,189 |
|
|
|
1,122 |
|
Research and development |
|
|
16,695 |
|
|
|
21,965 |
|
Selling, general and administrative |
|
|
10,992 |
|
|
|
13,730 |
|
Total costs and operating expenses |
|
|
29,876 |
|
|
|
36,817 |
|
Loss from operations |
|
|
(22,562 |
) |
|
|
(32,449 |
) |
Other income (expense): |
|
|
|
|
|
|
Interest income |
|
|
1,391 |
|
|
|
213 |
|
Interest expense |
|
|
(975 |
) |
|
|
(672 |
) |
Changes in fair value of PIPE warrant and unit liabilities |
|
|
8,206 |
|
|
|
— |
|
Other income (expense), net |
|
|
1,658 |
|
|
|
(18,227 |
) |
Total other income (expense), net |
|
|
10,280 |
|
|
|
(18,686 |
) |
Net loss before income taxes |
|
|
(12,282 |
) |
|
|
(51,135 |
) |
Income tax benefit (expense) |
|
|
(25 |
) |
|
|
219 |
|
Net loss attributable to ordinary
shareholders |
|
$ |
(12,307 |
) |
|
$ |
(50,916 |
) |
Net loss per ordinary share,
basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.40 |
) |
Weighted average ordinary
shares outstanding, basic and diluted |
|
|
189,286,329 |
|
|
|
127,854,596 |
|
Condensed Consolidated Balance Sheet
Data(In
thousands)(Unaudited) |
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
38,273 |
|
|
$ |
68,424 |
|
Marketable securities |
|
|
112,468 |
|
|
|
75,326 |
|
Accounts receivable |
|
|
9,547 |
|
|
|
8,467 |
|
Inventory |
|
|
6,937 |
|
|
|
3,400 |
|
Prepaid expenses and other current assets |
|
|
5,540 |
|
|
|
6,586 |
|
Research and development tax credit receivable |
|
|
8,525 |
|
|
|
5,942 |
|
Total current assets |
|
|
181,290 |
|
|
|
168,145 |
|
Non-current assets: |
|
|
|
|
|
|
Operating lease right-of-use-assets |
|
|
21,018 |
|
|
|
22,774 |
|
Property and equipment, net |
|
|
7,808 |
|
|
|
8,138 |
|
Research and development tax credit receivable, net of current
portion |
|
|
2,101 |
|
|
|
— |
|
Restricted cash |
|
|
4,215 |
|
|
|
4,215 |
|
Intangible assets, net |
|
|
3,474 |
|
|
|
3,560 |
|
Other assets |
|
|
12,396 |
|
|
|
12,075 |
|
Total non-current assets |
|
|
51,012 |
|
|
|
50,762 |
|
Total assets |
|
$ |
232,302 |
|
|
$ |
218,907 |
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
6,950 |
|
|
$ |
9,318 |
|
Accrued expenses and other current liabilities |
|
|
33,786 |
|
|
|
34,437 |
|
Deferred revenue, current |
|
|
752 |
|
|
|
959 |
|
Operating lease liabilities |
|
|
6,600 |
|
|
|
6,424 |
|
Notes payable, current |
|
|
9,429 |
|
|
|
9,429 |
|
Total current liabilities |
|
|
57,517 |
|
|
|
60,567 |
|
Notes payable, long-term |
|
|
18,440 |
|
|
|
22,991 |
|
Deferred revenue, net of current
portion |
|
|
10,819 |
|
|
|
10,315 |
|
Operating lease liabilities, net
of current portion |
|
|
16,044 |
|
|
|
19,246 |
|
PIPE warrant liabilities |
|
|
12,266 |
|
|
|
— |
|
Other long-term liabilities |
|
|
8,169 |
|
|
|
7,524 |
|
Total liabilities |
|
|
123,255 |
|
|
|
120,643 |
|
Total shareholders’ equity |
|
|
109,047 |
|
|
|
98,264 |
|
Total liabilities and shareholders’ equity |
|
$ |
232,302 |
|
|
$ |
218,907 |
|
Contact
Benjamin Navon+1
857-248-9454Benjamin.Navon@orchard-tx.com
Orchard Therapeutics (NASDAQ:ORTX)
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