Morphic Announces Corporate Highlights and Second Quarter 2021 Financial Results

  • MORF-057 phase 1 safety, receptor occupancy, PK and mechanistic measures exceeded objectives; phase 2 program expected to begin 1Q22
  • Presented positive preclinical data from αvβ8 program at AACR Annual Meeting demonstrating anti-tumor activity in checkpoint refractory cancer models
  • Announced Appointment of Susannah Gray to Morphic Board of Directors

WALTHAM, Mass., Aug. 04, 2021 (GLOBE NEWSWIRE) -- Morphic Therapeutic (Nasdaq: MORF), a biopharmaceutical company developing a new generation of oral integrin therapies for the treatment of serious chronic diseases, today reported corporate highlights and financial results for the second quarter of 2021.

Recent Highlights and Outlook

  • Presented positive phase 1 data fully supporting MORF-057 target product profile at the European Crohn’s and Colitis Organisation (ECCO) Virtual Congress 2021
    • MORF-057 well tolerated at all doses (25 to 400 mg), no safety signals observed
    • Predictable and dose-dependent pharmacokinetics (PK) surpassing preclinical modeling
    • Pharmacodynamic (PD) results strongly supportive of MORF-057 continued clinical development
      • Dose and time dependent α4β7 receptor occupancy including receptor saturation in all subjects at 100 mg BID
      • Biomarker changes, including lymphocyte subset migration and CCR9 transcript levels, provide early proof of biology
      • Changes in lymphocyte subsets and CCR9 levels are consistent with published literature on intravenous integrin inhibitors in inflammatory bowel disease (IBD), despite the brief 14-day duration of exposure to MORF-057 in the phase 1 trial
  • Phase 2a open-label trial design
    • 12-week induction phase with rollover to 40-week maintenance phase in patients with moderate to severe ulcerative colitis scheduled to commence first quarter 2022
    • The primary endpoint is the change in Robarts Histopathological Index (RHI) at 12 weeks of treatment with MORF-057
    • Study will assess additional PK and PD measures including the key PD measure of α4β7 receptor occupancy
    • 100 mg BID MORF-057 dose enrolling up to 30-35 patients
    • All phase 2 readiness work, including chronic toxicology studies, scheduled for completion in third and fourth quarters of 2021
  • Phase 2b randomized controlled trial design
    • Global, randomized, placebo-controlled trial enrolling approximately 280 patients with moderate to severe ulcerative colitis, staggered and in parallel to the phase 2a trial
    • The primary efficacy endpoint will be the proportion of subjects with Mayo Clinic Score Response at 12 weeks and patients will then be followed beyond the 52-weeks of treatment duration
    • The trial will also measure multiple secondary endpoints including Mayo Clinic Score Remission at 12 weeks, RHI, Patient Reported Outcome scores and translational markers
    • Multiple dose-ranging cohorts including at least one MORF-057 QD arm, at least one MORF-057 BID arm and one placebo arm
  • Presented positive preclinical data from Morphic’s immuno-oncology program demonstrating that small molecule inhibition of αvβ8, in combination with checkpoint inhibitors, potentiated anti-tumor activity in tumors refractory to checkpoint inhibition monotherapy
  • Appointed Susannah Gray, a veteran leader in healthcare finance and strategy with three decades of experience in capital formation, operational management, healthcare asset monetization, investment research and strategy implementations, to the Morphic Board of Directors and the Audit Committee of the Board of Directors

“The MORF-057 program has achieved the selectivity, PK, and PD trinity required for an oral α4β7 inhibitor. I’m extremely proud of the team who designed the molecule and the studies, and now excited to bring this program one step closer to the ultimate goal of helping patients with IBD,” said Praveen Tipirneni, M.D., president and chief executive officer of Morphic Therapeutic. “Our vision had two parts. Deliver integrin therapeutics. At scale. With intense technical and business efforts, we’re well on our way to the first. The new MORF-057 clinical data, along with our robust fundraising activities, allow us to now imagine, build and scale our capabilities to advance additional programs including immuno-oncology with our αvβ8 inhibitors.”

Financial Results for the Second Quarter 2021

  • Net loss for the quarter ended June 30, 2021 was $27.8 million or $0.77 per share compared to a net loss of $15.9 million or $0.52 per share for the same quarter last year
  • Revenue was $3.8 million for the quarter ended June 30, 2021 compared to $7.7 million for the same quarter last year
  • Research and development expenses were $24.6 million for the quarter ended June 30, 2021 as compared to $19.9 million for the same quarter last year. The increase was primarily due to costs associated with clinical trials costs associated with MORF 057 along with manufacturing costs associated with the upcoming phase 2 clinical trial
  • General and administrative expenses were $7.1 million for the quarter ended June 30, 2021, compared to $4.2 million for the same quarter last year. The increase was due to an increase in headcount and higher professional and consulting costs associated with Morphic operating as a public company

As of June 30, 2021, Morphic had cash, cash equivalents and marketable securities of $431.6 million, compared to $228.3 million as of December 31, 2020. Morphic believes its cash, cash equivalents and marketable securities as of June 30, 2021, will be sufficient to fund operating expenses and capital expenditure requirements until the end of 2024.

About Morphic Therapeutic
Morphic Therapeutic is a biopharmaceutical company developing a new generation of oral integrin therapies for the treatment of serious chronic diseases, including autoimmune, cardiovascular, and metabolic diseases, fibrosis and cancer. In collaboration with AbbVie, Janssen, and Schrödinger, Morphic is advancing its pipeline and discovery activities using its proprietary MInT technology platform which leverages the Company’s unique understanding of integrin structure and biology. For more information, visit www.morphictx.com.

Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking” statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to: the MInT Platform’s ability to discover drug candidates, Morphic’s plans to develop and commercialize oral small-molecule integrin therapeutics, the initiation, execution and completion of the future MORF-057 phase 2 clinical trial, any expectations about safety, efficacy, timing and ability to commence or complete clinical studies and/or trials and to obtain regulatory approvals for MORF-057 and other candidates in development, the timing of further data presentation and the ability of MORF-057 to treat inflammatory bowel disease, including ulcerative colitis, or related indications. Statements including words such as “believe,” “plan,” “continue,” “expect,” “will be,” “develop,” “signal,” “potential,” “anticipate” or “ongoing” and statements in the future tense are forward-looking statements. These forward-looking statements involve risks and uncertainties, as well as assumptions, which, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause Morphic’s actual activities or results to differ significantly from those expressed in any forward-looking statement, including risks and uncertainties in this press release and other risks set forth in our filings with the Securities and Exchange Commission, including Morphic’s or a partner’s ability to complete a current or future clinical trial of any of our current or future product candidates, develop or obtain regulatory approval for or commercialize any product candidate, Morphic’s ability to protect intellectual property, the potential impact of the COVID-19 pandemic, and the sufficiency of our cash, cash equivalents and investments to fund our operations. These forward-looking statements speak only as of the date hereof and Morphic specifically disclaims any obligation to update these forward-looking statements or reasons why actual results might differ, whether as a result of new information, future events or otherwise, except as required by law.

Morphic Holding Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share and per share data)

Three Months Ended June 30,   Six Months Ended June 30,
2021   2020   2021   2020
     
Collaboration revenue $ 3,848     $ 7,693     $ 7,114     $ 13,287  
Operating expenses:              
Research and development 24,552     19,918     43,165     38,878  
General and administrative 7,139     4,195     13,091     8,618  
Total operating expenses 31,691     24,113     56,256     47,496  
Loss from operations (27,843 )   (16,420 )   (49,142 )   (34,209 )
Other income:              
Interest income, net 35     413     63     1,299  
Other expenses (7 )   (6 )   (20 )   (6 )
Total other income, net 28     407     43     1,293  
Loss before benefit from income taxes (27,815 )   (16,013 )   (49,099 )   (32,916 )
Benefit from income taxes     155         312  
Net loss $ (27,815 )   $ (15,858 )   $ (49,099 )   $ (32,604 )
Net loss per share, basic and diluted $ (0.77 )   $ (0.52 )   $ (1.41 )   $ (1.08 )
             
Weighted average common shares outstanding, basic and diluted 36,179,085     30,360,851     34,863,056     30,274,713  

Morphic Holding Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands)

  June 30, 2021   December 31, 2020
Assets      
Cash, cash equivalents and marketable securities $ 431,618     $ 228,264  
Other current assets 5,228     11,171  
Total current assets 436,846     239,435  
Other assets 2,637     2,947  
Total assets $ 439,483     $ 242,382  
       
Liabilities and Stockholders' Equity      
Current liabilities $ 34,912     $ 39,438  
Long-term liabilities 56,662     57,747  
Total liabilities 91,574     97,185  
Total stockholders' equity 347,909     145,197  
Total liabilities and stockholders' equity $ 439,483     $ 242,382  


Contacts

Morphic Therapeutic
Chris Erdman
chris.erdman@morphictx.com
617.686.1718

Media Contact
Tom Donovan, Ten Bridge Communications
tom@tenbridgecommunications.com
857.559.3397


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