Forty Seven, Inc. Reports Fourth Quarter and Full Year 2019 Financial Results and Recent Business Highlights

MENLO PARK, Calif., March 20, 2020 (GLOBE NEWSWIRE) -- Forty Seven Inc., (Nasdaq:FTSV), a clinical-stage, immuno-oncology company focused on developing therapies to activate macrophages in the fight against cancer, today reported financial results for the fourth quarter and full year ended December 31, 2019 and provided a business update.

“In 2019, Forty Seven transformed into a multi-asset, late-stage development company with clear paths to registration in two distinct, underserved patient populations. In parallel, we entered into several new partnerships designed to accelerate the development of magrolimab and FSI-174, and allow us to evaluate both compounds more rapidly across a range of indications and combination paradigms,” said Mark McCamish, M.D., Ph.D., President and Chief Executive Officer of Forty Seven. “Following the recently announced acquisition by Gilead, and with the benefit of their resources and capabilities, we are even better positioned to build on this momentum and deliver on our foundational vision of developing novel immunotherapies that help patients defeat their cancers.”

Dr. McCamish continued, “Like so many others, we are closely monitoring COVID-19, and have recently instituted a number of proactive measures to mitigate the spread of the virus and protect the safety, health and well-being of the patients, families and healthcare professionals involved in our clinical development programs, as well as our employees. While we are working diligently to limit the impact of COVID-19 on our ongoing clinical trials, we, together with our contract research organization, decided to delay the initiation of our Phase 1 trial of FSI-174 in healthy volunteers in order to support physicians and hospitals in devoting their resources to treating COVID-19 patients, and avoid exposing healthy volunteers to unnecessary risk. We will continue to evaluate the pandemic and expect to re-visit the timing of potential trial initiation in the second quarter.”

Fourth Quarter and Recent Business Highlights:

Magrolimab Clinical Programs:
Myelodysplastic Syndrome (MDS) and Acute Myeloid Leukemia (AML)

• In December 2019, Forty Seven presented updated clinical data from its ongoing Phase 1b trial evaluating magrolimab in combination with azacitidine for the treatment of MDS and AML at the 61^st American Society of Hematology (ASH) Annual Meeting in Orlando, Florida.  The overall response rate (ORR) was 92% in patients with higher-risk MDS and 64% among patients with untreated AML. Additionally, 78% of evaluable TP53 mutant AML patients achieved an objective response.  Magrolimab was well-tolerated in combination with azacitidine and AEs were consistent with prior clinical experience. Read the full data here.
• In December 2019, Forty Seven achieved alignment with the U.S. Food and Drug Administration (FDA) on the final design of its potentially-registration enabling clinical development program for magrolimab in higher-risk MDS. In addition to enrolling patients in its ongoing Phase 1b clinical trial, which is evaluating dosing every two weeks, Forty Seven plans to initiate ENHANCE, a Phase 3 randomized controlled trial, to evaluate magrolimab and azacitidine in combination compared to azacitidine alone. This approach provides two distinct opportunities to achieve an accelerated approval, with a potential biologics license application (BLA) submission in the fourth quarter of 2021. Additionally, Forty Seven announced plans to continue enrolling additional patients with TP53-mutant AML in the ongoing Phase 1b trial.
• In December 2019, the FDA granted Orphan Drug designation to magrolimab for the treatment of MDS.

Diffuse Large B Cell Lymphoma (DLBCL)

• Forty Seven recently initiated its single-arm, registration-enabling trial evaluating the combination of magrolimab and rituximab in heavily pre-treated relapsed or refractory DLBCL patients who have failed at least two prior lines of therapy. Forty Seven expects to dose the first patient in the second quarter of 2020.   

Solid Tumors

• Forty Seven presented data from clinical studies of magrolimab in patients with colorectal and ovarian cancer at the American Society of Clinical Oncology Gastrointestinal Cancers Symposium (ASCO-GI) and ASCO-SITC Clinical Immuno-Oncology Symposium meetings in January and February 2020, respectively. While data from these studies do not support a path to registration, Forty Seven plans to use the results and learnings to inform its next steps in solid tumors. 

FSI-174:

• In March 2020, Forty Seven entered into a collaboration with Rocket Pharmaceuticals to evaluate Forty Seven’s antibody-based conditioning regimen, which is comprised of FSI-174 and magrolimab, with Rocket’s ex vivo lentiviral vector hematopoietic stem cell gene therapy, RP-L102, for the treatment of Fanconi Anemia.
• In December 2019, Forty Seven presented preclinical proof-of-concept data for FSI-174 in combination with magrolimab at ASH. Data from a non-human primate model showed that the combination regimen significantly depleted hematopoietic stem cells from the bone marrow, with no dose limiting toxicities. Read the full data here.
• In November 2019, Forty Seven entered into a collaboration with bluebird bio, Inc. to evaluate Forty Seven’s antibody based conditioning regimen with bluebird’s ex vivo lentiviral vector hematopoietic stem cell gene therapy platform.

FSI-189:

• Forty Seven recently completed pre-investigational new drug (IND) application toxicology studies, and expects to file an IND application with the FDA for FSI-189 in the second quarter.

Corporate:

• In March 2020, Forty Seven announced the entry into a definitive agreement with Gilead Sciences, Inc., pursuant to which Gilead will acquire Forty Seven for $95.50 per share in cash. This transaction, which values Forty Seven at approximately $4.9 billion, was unanimously approved by both the Forty Seven and Gilead Boards of Directors, and is expected to close during the second quarter of 2020, subject to regulatory approvals and other customary closing conditions.
• In December 2019, Forty Seven announced the closing of an underwritten public offering of 5,589,000 shares of its common stock, including the exercise in full by the underwriters of their option to purchase additional shares of stock. Forty Seven received gross proceeds from the offering of approximately $195.6 million, before deducting underwriting discounts and commissions and estimated offering expenses.

Fourth Quarter and Full Year 2019 Financial Results:

• Cash Position: As of December 31, 2019, cash, cash equivalents and short-term investments were $329.1 million, as compared to $139.0 million as of December 31, 2018. This increase reflects aggregate gross proceeds of approximately $86.3 million from Forty Seven’s underwritten public offering of common stock that closed in July 2019 and aggregate gross proceeds of approximately $195.6 million from Forty Seven’s underwritten public offering of common stock that closed in December 2019, as well as an approximately $15.7 million upfront license payment from Forty Seven’s entry into its collaboration with Ono Pharmaceutical.
• Revenue: Revenues were $0 million for the fourth quarter of 2019, and $15.7 million for the full year ended December 31, 2019, due to the revenue recognized for the license granted under the Ono agreement in third quarter of 2019.  Forty Seven did not record revenues in 2018.
• R&D Expenses: R&D expenses were $18.8 million for the fourth quarter of 2019, and $83.8 million for the full year ended December 31, 2019, as compared to $13.9 million for the fourth quarter of 2018 and $37.2 million for the full year ended December 31, 2018. The increase was primarily due to increased costs related to advancing clinical programs for magrolimab and related manufacturing costs, along with the expanded preclinical and discovery-stage immuno-oncology efforts and increased personnel costs.
• G&A Expenses: G&A expenses were $5.8 million for the fourth quarter of 2019, and $20.4 million for the full year ended December 31, 2019, as compared to $3.8 million for the fourth quarter of 2018 and $15.4 million for the full year ended December 31, 2018.  The increase was primarily due to an increase in personnel costs driven by increased headcount and public company structure-related costs.
• Net Loss: Net loss was $26.2 million for the fourth quarter of 2019 and $87.6 million for the full year ended December 31, 2019, or a net loss per share of $0.61 and $2.40, respectively, as compared to $17.2 million for the fourth quarter of 2018 and $70.4 million for the full year ended December 31, 2108, or a net loss per share of $0.56 and $3.75, respectively.

About Forty Seven, Inc.
Forty Seven, Inc. is a clinical-stage immuno-oncology company that is developing therapies targeting cancer immune evasion pathways and specific cell targeting approaches based on technology licensed from Stanford University. Forty Seven’s lead program, magrolimab, is a monoclonal antibody against the CD47 receptor, a “don’t eat me” signal that cancer cells commandeer to avoid being ingested by macrophages. This antibody is currently being evaluated in multiple clinical studies in patients with myelodysplastic syndrome, acute myeloid leukemia and non-Hodgkin’s lymphoma. In March 2020, Forty Seven entered into a definitive agreement to be acquired by Gilead Sciences, Inc., which is expected to close during the second quarter of 2020.

Additional Information and Where to Find It

This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares of Forty Seven, nor is it a substitute for any tender offer materials that Gilead, its acquisition company or Forty Seven has or will file with the SEC. A solicitation and an offer to buy shares of Forty Seven will be made only pursuant to an offer to purchase and related materials that Gilead has filed with the SEC.  At the time the tender offer was commenced, Gilead filed a Tender Offer Statement on Schedule TO with the SEC, and Forty Seven filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the tender offer. FORTY SEVEN’S STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT BECAUSE THEY CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE TENDER OFFER. The Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement, has been sent to all stockholders of Forty Seven at no expense to them. The Tender Offer Statement and the Solicitation/Recommendation Statement are available for free at the SEC's web site at www.sec.gov. Additional copies may be obtained for free by contacting Gilead or Forty Seven. Free copies of these materials and certain other offering documents will be made available by Gilead by mail to Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, CA 94404, attention: Investor Relations, by phone at 1-800-GILEAD-5 or 1-650-574-3000, or by directing requests for such materials to the information agent for the offer, which will be named in the Tender Offer Statement. Copies of the documents filed with the SEC by Forty Seven will be available free of charge under the “Investors” section of Forty Seven’s internet website at ir.fortyseveninc.com.

Forward-Looking Statements:

Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “potential,” “plans,” “will,” “believe,” and similar expressions (as well as other words or expressions referencing future events, conditions, or circumstances) are intended to identify forward-looking statements. These statements include those related to the timing and outcome of results from the Phase 1b trial evaluating magrolimab in combination with azacitidine for the treatment of MDS and AML, the potentially-registration enabling clinical development program for magrolimab in higher-risk MDS, the single-arm, registration enabling trial evaluating the combination of magrolimab and rituximab in heavily pre-treated relapsed or refractory DLBCL patients, and other ongoing trials of 5F9 for the treatment of ovarian and colorectal cancer; the timing of and quality of results from investigational new drug-application enabling studies for FSI-189 and FSI-174 and their respective potential for approval by the FDA; the timing and success of research and development plans for Rocket’s and Forty Seven’s respective platforms, product candidates and collaboration; the timing and success of research and development plans for bluebird’s and Forty Seven’s respective platforms, product candidates and collaboration; the business combination with Gilead and related matter; post-closing operations and the outlook for the companies’ respective businesses, including, without limitation, the ability of Gilead to advance Forty Seven’s product pipeline, including magrolimab, FSI-174 and FSI-189; filings and approvals relating to the transaction; the expected timing of the completion of the transaction; the ability to complete the transaction considering the various closing conditions; difficulties or unanticipated expenses in connection with integrating the companies; Forty Seven’s ability to fund its clinical programs and the sufficiency of its cash and short-term investments, and Forty Seven’s financial outlook; and any assumptions underlying any of the foregoing.

Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Risks and uncertainties that could cause the actual results to differ from expectations contemplated by such forward-looking statements include: the potential product candidates that Forty Seven develops may not progress through clinical development or receive required regulatory approvals within expected timelines or at all; clinical trials may not confirm any safety, potency or other product characteristics described or assumed in this press release; such product candidates may not be beneficial to patients or successfully commercialized; uncertainties as to the timing of the business combination with Gilead; the possibility that various closing conditions for the business combination may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction; the effects of the business combination on relationships with employees, other business partners or governmental entities; the difficulty of predicting the timing or outcome of FDA approvals or actions, if any; the impact of competitive products and pricing; other business effects, including the effects of industry, economic or political conditions outside of the companies’ control; transaction costs; actual or contingent liabilities; and other risks and uncertainties detailed from time to time in the companies’ periodic reports filed with the U.S. Securities and Exchange Commission (the “SEC”), including current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, as well as the Schedule 14D-9 filed by Forty Seven and the Schedule TO and related tender offer documents filed by Gilead and Toro Merger Sub, Inc., a wholly owned subsidiary of Gilead. All forward-looking statements are based on information currently available to Gilead and Forty Seven, and Gilead and Forty Seven assume no obligation and disclaim any intent to update any such forward-looking statements.

 For more information please visit www.fortyseveninc.com or contact info@fortyseveninc.com.

For journalist enquiries please contact Sarah Plumridge at fortyseven@hdmz.com or phone (312) 506-5218.

For investor enquiries please contact Hannah Deresiewicz at Stern Investor Relations Inc. at hannah.deresiewicz@sternir.com or phone (212) 362-1200.

 

Forty Seven Inc.
Statements of Operations and Comprehensive Loss Data
(In thousands, except share and per share data)

	Three Months Ended									Year Ended
	December 31,									December 31,
	2019					2018				2019				2018
		(unaudited)									(audited)
License revenue	$	-				$	-			$	15,678			$	-
Operating expenses:
Research and development		18,762					13,940				83,792				56,673
General and administrative		5,801					3,844				20,418				15,432
Total operating expenses		24,563					17,784				104,210				72,105
Loss from operations		(24,563	)				(17,784	)			(88,532	)			(72,105	)
Other income (expense)
Remeasurement loss on contingent repayment obligation		(2,567	)				-				(2,554	)			(331	)
Interest and other income, net		894					570				3,465				2,066
Net loss		(26,236	)				(17,214	)			(87,621	)			(70,370	)
Unrealized gains on available-for-sale securities		2					(50	)			174				(38	)
Comprehensive loss		(26,234	)				(17,264	)			(87,447	)			(70,408	)
Net loss per share, basic and diluted	$	(0.61	)			$	(0.56	)		$	(2.40	)		$	(3.75	)
Shares used in computing net loss per share, basic and diluted		43,273,957					31,010,898				36,434,365				18,768,868

Forty Seven Inc.
Selected Balance Sheet Data
(in thousands)

	December 31, 2019				December 31, 2018
	(audited)				(audited)
Cash, cash equivalents and short-term investments	$	329,094			$	139,023
Working capital		314,729				130,449
Total assets		343,593				149,437
Total liabilities		25,665				16,216
Total stockholders’ equity		317,928				133,221