Five Prime Therapeutics Reports Fourth Quarter and Full Year 2018 Financial Results

Five Prime Therapeutics, Inc. (NASDAQ: FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, today announced its financial results for the fourth quarter and year ended December 31, 2018, in addition to providing an update on the companys recent activities.

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Key Points: 
  • Five Prime Therapeutics, Inc. (NASDAQ: FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, today announced its financial results for the fourth quarter and year ended December 31, 2018, in addition to providing an update on the companys recent activities.
  • 2018 was a year of significant expansion of our clinical pipeline, saidAron Knickerbocker, Chief Executive Officer ofFive Prime Therapeutics.
  • Revenue:Collaboration and license revenue for the fourth quarter of 2018 decreased by $9.2 million, or 70%, to $4.0 million from $13.2 million for the fourth quarter of 2017.
  • Five Prime Therapeutics, Inc.discovers and develops innovative protein therapeutics to improve the lives of patients with serious diseases.


Five
Prime Therapeutics, Inc.
 (NASDAQ: FPRX), a clinical-stage
biotechnology company focused on discovering and developing innovative
immuno-oncology protein therapeutics, today announced its financial
results for the fourth quarter and year ended December 31, 2018, in
addition to providing an update on the company’s recent activities.

“2018 was a year of significant expansion of our clinical pipeline,”
said Aron Knickerbocker, Chief Executive Officer of Five Prime
Therapeutics. “Thanks to strong execution across our research,
preclinical and clinical organizations, along with the contributions of
the entire Five Prime team, we are positioned for a year of multiple
data readouts. We began 2019 in a strong position with five assets in
clinical development as well as the capital and support from our
collaborators required to achieve our goals. By the end of 2019, we
expect the bema FIGHT Phase 3 to be enrolling across nearly 200 sites
globally and to disclose data from FPA150 and FPT155 that will inform
the clinical path forward for these first-in-class programs. In
addition, we are pleased with the continued progress of our
BMS-partnered cabira and TIM-3 programs."

Review of 2018 Business Highlights and 2019 Milestones

Clinical Pipeline:

Bemarituzumab (FPA144)
is a first-in-class isoform-selective antibody with enhanced
antibody-dependent cell-mediated cytotoxicity (ADCC) in development as a
targeted immuno-therapy for tumors that overexpress FGFR2b.

2018

  • Completed the Phase 1 safety lead-in and dosed the first patient in
    the randomized Phase 3 FIGHT global registration trial.

2019

  • Presented safety lead-in data from the Phase 3 FIGHT trial at the 2019
    American Society of Clinical Oncology (ASCO) Gastrointestinal (GI)
    Cancers Symposium. Trial results showed no dose-limiting toxicities
    and no impact to the pharmacokinetics of bemarituzumab from the
    combination of mFOLFOX6 plus bemarituzumab. Signs of clinical activity
    from the combination were observed in each of the two patients with
    advanced gastric or gastroesophageal junction (GEJ) cancer who were
    biomarker-positive.
  • Expect to open approximately 200 clinical sites in 18 countries in the
    Phase 3 FIGHT trial by year end. The Phase 3 FIGHT trial is a pivotal
    global registration trial evaluating bemarituzumab in combination with
    mFOLFOX6 chemotherapy as front-line treatment of patients with gastric
    or GEJ cancer that overexpresses FGFR2b.

FPA150 (anti-B7-H4) is a
first-in-class anti-B7-H4 antibody designed to target tumor cells by
blocking B7-H4 from sending an inhibitory signal to CD8 T cells and by
enhancing killing of B7-H4 overexpressing tumors through ADCC. B7-H4 is
frequently overexpressed in breast, ovarian and endometrial cancers.

2018

  • Initiated the Phase 1a monotherapy dose escalation portion of a Phase
    1a/1b clinical trial of FPA150 in solid tumors.
  • Initiated patient dosing in the exploratory cohort of the ongoing
    Phase 1a portion of the trial to enroll patients with tumors that
    overexpress B7-H4, as assessed by an immunohistochemistry (IHC) assay.

2019

  • Completed the Phase 1a monotherapy dose escalation portion of the
    Phase 1a/1b trial.
  • Initiated the Phase 1b monotherapy expansion cohorts at the selected
    20 mg/kg dose given every three weeks, enrolling patients with breast,
    ovarian, and endometrial tumors with B7-H4 overexpression.
  • Plan to present data from the Phase 1a/1b trial at the ASCO Annual
    Meeting in June and the European Society for Medical Oncology’s (ESMO)
    2019 Annual Congress in September.

FPT155 (CD80-Fc) is a
first-in-class CD80-Fc fusion protein that uses the binding interactions
of soluble CD80 to directly engage CD28 to enhance its co-stimulatory T
cell activity without inducing super agonism and to block CTLA-4 from
competing for endogenous CD80, allowing CD28 signaling to prevail in T
cell activation in the tumor microenvironment.

2018

  • Initiated patient dosing in a Phase 1a/1b clinical trial of FPT155.
    The Phase 1a dose escalation portion of the trial will characterize
    the safety and pharmacokinetic (PK)/pharmacodynamic (PD) profile of
    FPT155 to identify a recommended dose for the Phase 1b portion of the
    trial.

2019

  • Plan to present data from the Phase 1a dose escalation at the 34th
    Annual Meeting of the Society for Immunotherapy of Cancer (SITC) in
    November.

Cabiralizumab (FPA008) is an antibody that inhibits CSF1R and has
been shown to block the activation and survival of tumor-associated
macrophages.

2018

  • Bristol-Myers Squibb Company (BMS) initiated a multi-arm, Phase 2
    clinical trial (NCT03336216) evaluating cabiralizumab in combination
    with Opdivo, triggering a $25 million milestone payment to Five
    Prime.

2019

  • The Phase 2 trial is currently enrolling patients across sites in the
    U.S., Canada, Europe, Japan, Korea and Taiwan, and is expected to
    enroll approximately 160 patients with locally advanced or metastatic
    pancreatic cancer that has progressed during or after one line of
    chemotherapy.

BMS-986258 (anti-TIM-3) is a
fully-human monoclonal antibody targeting TIM-3 (T cell immunoglobulin
and mucin domain-3), an immune checkpoint receptor that may limit the
duration and magnitude of T cell responses. This is the first clinical
candidate from the discovery collaboration between Five Prime and BMS
that includes targets in three immune checkpoint pathways.

2018

  • BMS initiated the Phase 1 portion of the Phase 1/2 clinical trial of
    BMS-986258 as a single agent as well as in combination with Opdivo
    or hyaluronidase, with the objective of evaluating the safety and
    tolerability of the combination with Opdivo.

2019

  • Continued progress in the Phase 1/2 clinical trial.

Corporate Highlights

2018

  • Raised net proceeds of $107.6 million from a public offering of
    5,897,435 shares of common stock, including 769,230 shares sold upon
    the underwriters' full exercise of their option to purchase additional
    shares.

2019

  • Announced a corporate restructuring to focus resources on clinical
    development and late-stage research programs, primarily eliminating
    positions in research, pathology, and manufacturing.

Summary of Financial Results and Guidance:

Cash Position: Cash, cash equivalents and marketable securities
totaled $270.1 million as of December 31, 2018, compared to $292.7
million as of December 31, 2017. The decrease was primarily attributable
to cash used in operating activities which was offset in part by the
$107.6 million in net proceeds from the public offering of Five Prime’s
common stock in January 2018.

Revenue: Collaboration and license revenue for the fourth quarter
of 2018 decreased by $9.2 million, or 70%, to $4.0 million from $13.2
million for the fourth quarter of 2017. The decrease was primarily due
to Five Prime’s recognition in the fourth quarter of 2017 of a $5.0
million milestone payment received from BMS under the immuno-oncology
research collaboration, lower revenue under the cabiralizumab
collaboration agreement with BMS, and lower research and development
funding from several older collaboration agreements, partially offset by
an increase from Five Prime’s collaboration with Zai Lab.

Collaboration and license revenue for the year ended December 31, 2018
increased by $10.4 million, or 26%, to $49.9 million from $39.5
million for the year ended December 31, 2017. This increase was
primarily due to $25.0 million of revenue recognized under Five Prime’s
cabiralizumab collaboration agreement with BMS for BMS’s achievement of
the developmental milestone for the dosing of the first patient in the
Phase 2 clinical trial of cabiralizumab in combination with Opdivo,
and an increase from Five Prime’s collaboration with Zai Lab that was
partially offset by lower research and development funding from several
older collaboration agreements.

R&D Expenses: Research and development expenses for the
fourth quarter of 2018 increased by $2.0 million, or 6%, to $34.7
million from $32.7 million primarily due to increased clinical expenses
associated with the FIGHT trial and FPA150 program, partially offset by
lower companion diagnostic development costs.

Research and development expenses for the year ended December 31, 2018
increased by $5.4 million, or 4%, to $156.3 million from $150.9
million for the year ended December 31, 2017. This increase was
primarily related to milestone payments associated with the first
patient dosed in Five Prime’s Phase 3 FIGHT trial and companion
diagnostic development costs that were partially offset by lower
manufacturing and preclinical expenses.

G&A Expenses: General and administrative expenses for the
fourth quarter of 2018 decreased by $0.9 million, or 9%, to $9.6 million
from $10.5 million, primarily due to lower compensation expenses.
General and administrative expenses for the year ended December 31, 2018
were $39.7 million, which were essentially flat with the prior year.

Net Loss: Net loss for the fourth quarter of 2018 was $38.8
million, or $1.12 per basic and diluted share, compared to a net loss of
$29.2 million, or $1.04 per basic and diluted share for the fourth
quarter of 2017.

Net loss for the full year 2018 was $140.4 million, or $4.13 per basic
and diluted share, compared to a net loss of $150.2 million,
or $5.38 per basic and diluted share, for the full year 2017.

Shares Outstanding: Total shares outstanding were 34,745,721 as
of December 31, 2018.

Cash Guidance: Five Prime expects full-year 2019 net cash used in
operating activities to be between $117 and $122 million and estimates
ending 2019 with cash, cash equivalents and marketable securities
between $148 and $153 million.

Conference Call Information

Five Prime will host a conference call and live audio webcast today
at 4:30 p.m. (ET) / 1:30 p.m. (PT) to discuss its financial results and
provide a corporate update. To participate in the conference call,
please dial (877) 878-2269 (domestic) or (253) 237-1188 (international)
and refer to conference ID 9689855. To access the live webcast please
visit the "Events & Presentations" page under the "Investors" tab on
Five Prime's website at www.fiveprime.com.
An archived copy of the webcast will be available on Five Prime's
website beginning approximately two hours after the conference call.
Five Prime will maintain an archived replay of the webcast on its
website for at least 30 days after the conference call.

About Five Prime Therapeutics

Five Prime Therapeutics, Inc. discovers and develops innovative protein
therapeutics to improve the lives of patients with serious diseases.
Five Prime’s product candidates have innovative mechanisms of action and
address patient populations in need of better therapies. The company
focuses on researching and developing immuno-oncology and targeted
cancer therapies paired with companion diagnostics to identify patients
who are most likely to benefit from treatment with Five Prime’s product
candidates. Five Prime has entered into strategic collaborations with
leading global pharmaceutical companies and has promising product
candidates in clinical and preclinical development. For more
information, please visit www.fiveprime.com or
follow us on LinkedInTwitter and Facebook.

Cautionary Note on Forward-looking Statements

Forward-looking statements contained in this press release include
statements regarding (i) the timing of initiation, progress and scope of
clinical trials for Five Prime’s product candidates; (ii) the potential
use of Five Prime’s product candidates, including in combination with
other products, to treat certain patients; (iii) the timing of the
presentation of data for Five Prime’s product candidates; (iv) Five
Prime’s full-year 2019 net cash used in operating activities; and (v)
the amount of Five Prime’s cash, cash equivalents and marketable
securities at the end of 2019. Many factors may cause differences
between current expectations and actual results including unexpected
safety or efficacy data observed during research, preclinical or
clinical studies, changes in expected or existing competition, changes
in the regulatory, pricing or reimbursement environment, and unexpected
litigation or other disputes. Other factors that may cause actual
results to differ from those expressed or implied in the forward-looking
statements in this press release are discussed in Five Prime’s filings
with the U.S. Securities and Exchange Commission, including the “Risk
Factors” contained therein. Except as required by law, Five Prime
assumes no obligation to update any forward-looking statements contained
herein to reflect any change in expectations, even as new information
becomes available.

         
Selected Balance Sheets Data
 
December 31, December 31,
2018 2017
Balance Sheet Data:
Cash, cash equivalents and marketable securities $ 270,138 $ 292,690
Total assets 321,534 344,047
Total current liabilities (excluding deferred revenue) 26,059 38,268
Deferred revenue (in total, including short term portion) 11,893 22,936
Total stockholders' equity 265,139 265,202
 
 
Condensed Statement of Operations
For The Three For The Three For The Year For The Year
Months Ended Months Ended Ended Ended
December 31, December 31, December 31, December 31,
2018 2017 2018 2017
Collaboration and license revenue $ 4,031 $ 13,218 $ 49,868 $ 39,508
Operating expenses:
Research and development 34,733 32,671 156,352 150,908
General and administrative   9,579     10,479     39,671     40,002  
Total operating expenses   44,312     43,150     196,023     190,910  
Loss from operations (40,281 ) (29,932 ) (146,155 ) (151,402 )
Interest income and other loss, net   1,528     721     5,708     2,884  
Loss before income tax (38,753 ) (29,211 ) (140,447 ) (148,518 )
Income tax provision   -     -     -     (1,704 )
Net loss $ (38,753 ) $ (29,211 ) $ (140,447 ) $ (150,222 )
Basic and diluted net loss per common share $ (1.12 ) $ (1.04 ) $ (4.13 ) $ (5.38 )
Weighted-average shares used to compute basic and diluted net loss
per common share
  34,675     28,129     33,976     27,945