WARRINGTON, Pa., May 12, 2016 /PRNewswire/ -- Windtree Therapeutics, Inc. (Nasdaq: WINT), a biotechnology company focused on developing aerosolized KL4 surfactant therapies for respiratory diseases, today reported financial results for the first quarter ended March 31, 2016 and provided key business updates. The Company will also host a conference call today at 8:00 a.m. EDT.
Key Business and Financial Updates
- Recently achieved an important milestone in the AEROSURF® phase 2b clinical trial in respiratory distress syndrome (RDS) with the initiation of sites and enrollment at selected clinical sites in Canada, Europe and Latin America. The Company continues to expect to release top-line results from this study in the first quarter of 2017.
- Enrollment is ongoing in the AEROSURF phase 2a clinical trial in 32 premature infants 26 to 28 week gestational age (GA) receiving nCPAP for RDS, which is designed to evaluate safety and tolerability of AEROSURF. The Company continues to expect to release top-line results from this study in the third quarter of 2016.
- In April, the Company met with the FDA to discuss key elements of the AEROSURF clinical development program. The Company believes that these discussions reaffirmed its current and planned approach to the clinical development program for AEROSURF.
- In April, the Company completed the first phase of its Noninterventional Observational Study to collect data on the treatment and outcomes of premature infants 26 to 34 week GA with RDS. The study was initiated in 2015 and over 1,700 premature infants have been enrolled to date. The results of the study have better informed our assessment of the unmet medical need in RDS, the design of a potential Phase 3 trial, and the RDS market opportunity. Additionally, based on this study, the Company has enhanced some of the operational aspects of the AEROSURF phase 2 program.
- The Company continued to advance its Lung Deposition Study in nonhuman primates. This study consists of a series of experiments to assess the distribution and deposition of aerosolized KL4 surfactant in the lung when using the Company's innovative aerosol drug delivery technology. The Company continues to expect to complete the final phase of the study and report results in the third quarter of 2016.
- As of March 31, 2016, the Company had cash and cash equivalents of $29.4 million.
"The first quarter of 2016 was one of meaningful progress for Windtree," commented Craig Fraser, President and Chief Executive Officer. "We expanded our AEROSURF phase 2 program to include sites in Europe and Latin America, conducted a successful meeting with the FDA that will guide our AEROSURF development program, collected data from over 1,700 premature infants in the Noninterventional Observational Study, and advanced the Lung Deposition Study. Our primary objective for 2016 remains the rigorous and timely execution of the AEROSURF phase 2 program while effectively managing existing cash resources."
Select Financial Results for the First Quarter ended March 31, 2016
For the quarter ended March 31, 2016, the Company reported an operating loss of $13.9 million, compared to $11.2 million for the first quarter of 2015.
Grant revenue for the first quarter of 2016 was $0.1 million, compared to $0.2 million for the first quarter of 2015. Grant revenue for 2016 represents funds received and expended under a $1.0 million Phase II SBIR grant from the National Institutes of Allergy and Infectious Diseases (NIAID) of the National Institutes of Health (NIH) to study the Company's aerosolized KL4 surfactant as a medical countermeasure to mitigate acute and chronic/late-phase radiation-induced lung injury. Grant revenue for 2015 represents funds received and expended under (i) a $1.9 million SBIR grant from the National Heart, Lung and Blood Institute (NHLBI) of the NIH to provide support for the initial AEROSURF phase 2a clinical trial in premature infants 29 to 34 week GA with RDS; and, (ii) a $1.0 million Phase II SBIR grant from NIAID to study the Company's aerosolized KL4 surfactant as a medical countermeasure to mitigate acute and chronic/late-phase radiation-induced lung injury.
Research and development expenses were $10.4 million for the first quarter of 2016, compared to $7.1 million for the first quarter of 2015. The increase was primarily due to a $3.4 million increase in AEROSURF clinical trial activities, including patient enrollment costs, ongoing clinical site initiations and the manufacture of additional clinic-ready AEROSURF Delivery Systems.
Selling, general and administrative expenses for the first quarter of 2016 were $3.7 million, compared to $3.4 million for the first quarter of 2015. During the first quarter of 2016, the Company recorded a severance charge of $1.2 million under the terms of our former CEO's separation agreement, including $0.2 million related to stock-based compensation expense for certain common stock options that will continue to vest through the 18-month severance period. Excluding this charge, selling, general and administrative expenses decreased $0.9 million in the first quarter of 2016 compared to the comparable period in 2015. The decrease was primarily due to the Company's decision in April 2015 to voluntarily cease commercial and manufacturing activities for SURFAXIN®, resulting in a reduction in workforce related primarily to commercial infrastructure.
Interest expense for the first quarter of 2016 was $0.6 million, compared to $1.2 million for the first quarter of 2015. The decrease in interest expense was due to the July 2015 restructuring of our long-term debt with affiliates of Deerfield Management Company, L.P. (Deerfield), which resulted in the write-off of previously capitalized debt discount costs which were being amortized to interest expense.
The Company reported a net loss of $13.9 million ($1.70 per basic share) on 8.2 million weighted-average common shares outstanding for the quarter ended March 31, 2016, compared to a net loss of $12.2 million ($1.96 per basic share) on 6.1 million weighted average common shares outstanding for the comparable period in 2015.
Net cash outflows before financing activities for the first quarter of 2016 were $9.3 million and included $1.5 million of 2015 employee incentive compensation payments. The Company anticipates second quarter 2016 net cash outflows before financing activities of approximately $8.5 million.
As of March 31, 2016, the Company had cash and cash equivalents of $29.4 million, an amount the Company anticipates is sufficient to support the planned completion of the AEROSURF phase 2b clinical program and fund operations through the first quarter of 2017. In addition, as of March 31, 2016, the Company reported accounts payable and accrued expenses of $14.6 million, including $4.1 million due under the collaboration agreement with the Battelle Memorial Institute, and long-term debt with Deerfield of $25 million. The debt is payable in two equal installments of $12.5 million in each of February 2018 and 2019. The payment due in February 2018 may be deferred if certain conditions are satisfied.
Readers are referred to, and encouraged to read in its entirety, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, which is expected to be filed today with the Securities and Exchange Commission, which includes discussion about the Company's business plans and operations, financial condition, and results of operations.
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