Homology Medicines Reports Third Quarter 2020 Financial Results and Recent Highlights

BEDFORD, Mass., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Homology Medicines, Inc. (Nasdaq: FIXX), a genetic medicines company, announced today financial results for the third quarter ended September 30, 2020, and highlighted recent accomplishments.

“At the end of last week, we announced an important milestone for the PKU community and Homology with the positive data from the dose-escalation phase of our pheNIX PKU gene therapy clinical trial and plans to initiate the dose expansion phase by early 2021,” stated Arthur Tzianabos, Ph.D., President and Chief Executive Officer of Homology Medicines.

Dr. Tzianabos added, “We also recently announced that we have expanded our CNS portfolio by unveiling a new gene therapy program for Hunter syndrome. Our in vivo approach with HMI-203 leverages the potential of AAVHSCs to target peripheral organs and central and peripheral nervous systems following an I.V. administration. We believe this advantage, coupled with our team’s direct development and commercialization experience in Hunter syndrome, provides an opportunity to address the cognitive as well as systemic effects of this fatal disorder. HMI-203 has already been scaled up to 500 liters in our internal manufacturing facility, leveraging our plug and play system that is designed to enable rapid development across our gene therapy and gene editing programs.”

Third Quarter 2020 Financial Results and Recent Accomplishments

  • Announced today a $60 million equity investment from Pfizer Inc. with the purchase of 5,000,000 shares of common stock at a price of $12.00 per share, which is expected to close on or about November 10, 2020. The investment includes a right of first refusal on future transactions for the Company’s phenylketonuria (PKU) product candidates: HMI-102 gene therapy candidate for adults with PKU and HMI-103 gene editing candidate for pediatric patients with PKU.
  • As announced on November 6, 2020, plans to progress the pheNIX gene therapy clinical trial for adults with PKU to the randomized, concurrently controlled dose expansion phase with two doses. The expansion phase has the potential to be converted to a registrational trial. In the dose-escalation phase:
    • Development candidate HMI-102 was generally well-tolerated, and there were no treatment-related serious adverse events (SAEs).
    • There were marked reductions in phenylalanine (Phe) and the Phe-to-tyrosine (Phe/Tyr) ratio in some patients in Cohorts 2 and 3 (mid- and high-dose cohorts).
    • The mean percent change from baseline in Phe observed in patients in Cohorts 2 and 3 were significant, compared to low-dose Cohort 1*. These Phe reductions occurred while patients self-liberalized their diets.
  • Expanded Homology’s gene therapy programs with HMI-203, an in vivo approach for mucopolysaccharidosis type II (MPS II, or Hunter syndrome). Homology has initiated IND-enabling studies with HMI-203 and has scaled the development candidate to 500 liters using Homology’s commercial manufacturing platform.
  • Received Orphan Designations in the U.S. and EU and Rare Pediatric Disease Designation in the U.S. for HMI-202, Homology’s in vivo gene therapy development candidate for metachromatic leukodystrophy (MLD).
  • Presented data from IND-enabling studies with HMI-202 at the American Society of Human Genetics (ASHG) virtual annual meeting, including:
    • A single I.V. administration of HMI-202 crossed the blood-brain-barrier and blood-nerve-barrier and led to durable reduction of sulfatides in all brain regions of the disease model.
    • HMI-202 was superior to an AAV9-based MLD gene therapy construct in terms of human ARSA enzyme activity, vector genome copies and biodistribution in the peripheral and central nervous systems of the disease model.
  • Progressed later-stage IND-enabling studies with HMI-103, Homology’s in vivo, nuclease-free gene editing candidate for pediatric PKU.
  • Continued to enhance Homology’s internal GMP manufacturing capabilities, and executed more than 450 unique constructs and more than 550 lots of vector up to 2,000 liters using Homology’s plug and play system that is designed to enable rapid development.
  • Continued to monitor the COVID-19 pandemic with no supply chain disruptions. HMI-102 supply is on-hand for the pheNIX trial expansion phase, which includes two doses.

ThirdQuarter 2020 Financial Results

  • Net loss for the quarter ended September 30, 2020 was $(28.2) million or $(0.62) per share, compared to a net loss of $(29.6) million or $(0.67) per share for the same period in 2019.
  • Collaboration revenues for the quarter ended September 30, 2020 were $0.6 million, compared to $0.4 million for the quarter ended September 30, 2019 and consisted of revenue recognized under the Company’s strategic collaboration with Novartis. Collaboration revenues are being recognized over time consistent with the pattern of performance of research and development activities under the collaboration agreement. Homology and Novartis continue to work together on an ophthalmic program and seek to identify new targets for the collaboration based on the exploratory research component.
  • Total operating expenses for the quarter ended September 30, 2020 were $28.8 million, compared to $31.7 million for the quarter ended September 30, 2019, and consisted of research and development expenses and general and administrative expenses.
  • Research and development expenses for the quarter ended September 30, 2020 were $20.4 million, compared to $25.7 million for the quarter ended September 30, 2019. Research and development expenses decreased due to a decrease in direct research expenses for HMI-102 related to the transition of the manufacturing of clinical trial materials for our Phase 1/2 pheNIX trial from a CMO to our internal GMP facility in 2020, which reduced costs with our CMOs compared to the prior year period. Research and development costs related to laboratory supplies and research materials for our early-stage research programs also decreased. Partially offsetting these decreases were increased costs due to additional employee headcount to support ongoing development programs, research initiatives, technology platform and manufacturing capabilities resulting in increases in salaries, payroll taxes, stock-based compensation expense and recruiting costs.
  • General and administrative expenses for the quarter ended September 30, 2020 were $8.4 million, compared to $6.0 million for the quarter ended September 30, 2019. General and administrative expenses increased primarily due to personnel costs as a result of new hires, increased audit and legal costs and additional costs associated with expanded operations.
  • As of September 30, 2020, Homology had approximately $178.0 million in cash and cash equivalents. Based on current projections, Homology now expects cash resources, together with the anticipated proceeds of $60.0 million from the Pfizer equity investment, to fund operations into the third quarter of 2022.

Upcoming Virtual Events

  • The EveryLife Foundation Scientific Conference: December 15, 2020
  • H.C. Wainwright BioConnect Conference: January 11 - 14, 2021

About Homology Medicines, Inc.
Homology Medicines, Inc. is a genetic medicines company dedicated to transforming the lives of patients suffering from rare genetic diseases with significant unmet medical needs by curing the underlying cause of the disease. Homology’s proprietary platform is designed to utilize its human hematopoietic stem cell-derived adeno-associated virus vectors (AAVHSCs) to precisely and efficiently deliver genetic medicines in vivo either through a gene therapy or nuclease-free gene editing modality across a broad range of genetic disorders. Homology has a management team with a successful track record of discovering, developing and commercializing therapeutics with a particular focus on rare diseases, and intellectual property covering its suite of 15 AAVHSCs. Homology believes that its compelling preclinical data, scientific expertise, product development strategy, manufacturing capabilities and intellectual property position it as a leader in the development of genetic medicines. For more information, please visit www.homologymedicines.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our expectations surrounding the potential, safety, efficacy, and regulatory and clinical progress of our product candidates; plans and timing surrounding the Phase 1/2 pheNIX trial, including the expansion phase and the potential for conversion to a registrational trial; our collaboration activities with Novartis; our beliefs regarding our manufacturing capabilities and supply of HMI-102 for the expansion phase of the pheNIX trial; our position as a leader in the development of genetic medicines; our expectations regarding the timing for the closing of the Pfizer investment; the sufficiency of our cash and cash equivalents, together with the anticipated proceeds of $60.0 million from the Pfizer equity investment, to fund our operations; and our participation in upcoming presentations and conferences. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties 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, including, but not limited to, the following: the impact of the COVID-19 pandemic on our business and operations, including our preclinical studies and clinical trials, and on general economic conditions; we have and expect to continue to incur significant losses; our need for additional funding, which may not be available; failure to identify additional product candidates and develop or commercialize marketable products; the early stage of our development efforts; potential unforeseen events during clinical trials could cause delays or other adverse consequences; risks relating to the capabilities of our manufacturing facility; risks relating to the regulatory approval process; interim, topline and preliminary data may change as more patient data become available, and are subject to audit and verification procedures that could result in material changes in the final data; our product candidates may cause serious adverse side effects; inability to maintain our collaborations, or the failure of these collaborations; our reliance on third parties; failure to obtain U.S. or international marketing approval; ongoing regulatory obligations; effects of significant competition; unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives; product liability lawsuits; failure to attract, retain and motivate qualified personnel; the possibility of system failures or security breaches; risks relating to intellectual property and significant costs as a result of operating as a public company. These and other important factors discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 and our other filings with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

*P<0.004; Post-hoc comparison of Cohort 1 vs Cohorts 2&3 using repeated measures MANOVA/regression analysis

- Financial Tables Follow -


 

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
                 
    Three months ended September 30,   Nine months ended September 30,
      2020       2019       2020       2019  
Collaboration revenue   $ 567     $ 441     $ 1,722     $ 1,103  
Operating expenses:                
Research and development     20,417       25,691       77,197       69,056  
General and administrative     8,423       6,038       24,986       16,431  
Total operating expenses     28,840       31,729       102,183       85,487  
Loss from operations     (28,273 )     (31,288 )     (100,461 )     (84,384 )
Other income:                
Interest income     41       1,661       1,558       4,635  
Total other income     41       1,661       1,558       4,635  
Net loss   $ (28,232 )   $ (29,627 )   $ (98,903 )   $ (79,749 )
Net loss per share-basic and diluted   $ (0.62 )   $ (0.67 )   $ (2.19 )   $ (1.92 )
Weighted-average common shares outstanding-basic and diluted     45,227,231       43,904,812       45,196,459       41,503,545  
                 


 

HOMOLOGY MEDICINES, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(in thousands)  
(Unaudited)  
           
    As of  
    September 30, 2020   December 31, 2019  
Cash, cash equivalents and short-term investments   $ 178,003   $ 262,388  
Property and equipment, net     39,684     42,716  
Other assets     10,675     5,463  
Total assets   $ 228,362   $ 310,567  
           
Accounts payable, accrued expenses and other liabilities   $ 11,742   $ 21,109  
Operating lease liabilities     16,037      
Deferred revenue     30,361     30,951  
Stockholders' equity     170,222     258,507  
Total liabilities and stockholders' equity   $ 228,362   $ 310,567  
           

 

 

 

Company Contacts
Theresa McNeely
 
Chief Communications Officer
and Patient Advocate
 
tmcneely@homologymedicines.com
781-301-7277
 
 
Media Contact:  
Cara Mayfield  
Senior Director, Patient Advocacy
and Corporate Communications
 
cmayfield@homologymedicines.com
781-691-3510
 

 

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