Axcella Reports Fourth Quarter and Full Year 2022 Financial Results and Provides Business Update
Axcella Therapeutics (Nasdaq: AXLA) announced financial results for the fourth quarter and full year ended December 31, 2022, alongside a strategic shift to focus on Long COVID treatments. The company reported a net loss of $81.2 million for 2022, up from $64.6 million in 2021, attributed to increased clinical trial expenses and restructuring charges. Axcella successfully cleared its Investigational New Drug (IND) application for a Phase 2b/3 trial of AXA1125, which demonstrated significant improvements in fatigue in a previous Phase 2a trial. The company raised around $60 million to support ongoing trials, but its cash position decreased to $17.1 million by year-end 2022.
- Statistically significant improvement in fatigue from AXA1125 in Long COVID trials.
- Successful IND application for Phase 2b/3 Long COVID trial.
- Raised approximately $60 million to complete Long COVID trial.
- Net loss increased to $81.2 million in 2022 compared to $64.6 million in 2021.
- Cash reserves declined to $17.1 million by December 31, 2022.
- Discontinued Phase 2b NASH trial despite positive interim results.
-
Long COVID Phase 2b/3 study may proceed under
U.S. Investigational New Drug application - MHRA guidance aligns on key measurements for a Long COVID registration trial, including primary endpoint and trial design elements
- Axcella presented at Long COVID forum co-sponsored by BIO and Solve M.E.
- The Company repositioned its strategy to focus on Long COVID
- Engaged an investment bank to act as a strategic advisor as we explore a range of strategic alternatives to maximize stakeholder value
“The year 2022 was one of significant achievement for Axcella Therapeutics that was highlighted by the results from the Phase 2a of AXA1125 in patients with fatigue related to Long COVID and positive data from a preplanned interim analysis from the trial of AXA1125 in NASH,” said
Recent Accomplishments and Developments
- Statistically Significant and Meaningful Clinical Results in the Treatment of Long COVID Fatigue: Axcella’s Phase 2a clinical trial results demonstrated the potential of AXA1125 to play an important role in treating patients suffering from Long COVID fatigue. Axcella’s Phase 2a trial has been the only controlled trial to demonstrate statistically and clinically relevant improvement in fatigue in patients with Long COVID. This randomized, double-blind, placebo-controlled investigation evaluated the efficacy and safety of AXA1125 in patients with fatigue related to Long COVID. The study, which did not meet an experimental biomarker primary endpoint, found that subjects who received AXA1125 experienced clinically and statistically significant improvement in mental (p=0.0097) and physical (p=0.0097) fatigue scores compared to placebo subjects. Understanding of the relevant biological activity and safety were complemented by concurrent data generated in the NASH program.
-
FDA Clearance of IND for a Phase 2b/3 Trial: Axcella announced its Investigational New Drug (IND) application to initiate a Phase 2b/3 trial in the
U.S. for AXA1125 in the treatment of Long COVID fatigue had been cleared by theU.S. Food and Drug Administration (FDA). The Company reported that it had received regulatory guidance from the FDA, supporting a trial that is designed to serve as the registration trial for patients with Long COVID fatigue. Fatigue is the most common symptom associated with Long COVID, impacting a majority of patients.
- Regulatory Path to Registration of AXA1125 in Long COVID: The Company received regulatory guidance from The Medicines and Healthcare products Regulatory Agency (MHRA), the U.K.’s regulatory agency, supporting a single trial that could serve as the registration trial for patients with Long COVID fatigue, and aligning on key measurements, including primary endpoint and trial design.
- Restructuring the Company to Advance AXA1125 in Long COVID Fatigue: Axcella discontinued its Phase 2b clinical trial of AXA1125 in NASH despite reporting positive data from a preplanned interim analysis in September. At 24 weeks, there were statistically significant and clinically relevant improvements in the liver stiffness measurement (LSM) compared to placebo in the high dose arm for all subjects and statistically significant improvements in other non-invasive tests of liver fat and stiffness. Axcella also realigned the organization to correspond to this shift in strategy and reprioritization of its programs.
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Financial Performance: Axcella completed registered direct offerings in
March 2022 andOctober 2022 , yielding gross proceeds of approximately . Expenses for the three clinical trials and payments of about$59 million to extinguish the debt with SLR Investment Corp. led the Company to restructure in December and to explore a range of strategic alternatives to maximize stakeholder value. With respect to the Company’s plans, no assurances can be made as to whether a strategic transaction will be recommended by the Board of Directors, and the Company does not intend to discuss developments with respect to the evaluation process unless a transaction is approved, or disclosure otherwise becomes appropriate.$27 million
Financial Results
Cash Position: As of
R&D Expenses: Research and development expenses for the quarter and year ended
G&A Expenses: General and administrative expenses for the quarter and year ended
Restructuring and impairment charges: Other operating expenses were
Other (expense) income: Other (expense) income, net for the quarter and year ended
Net Loss: Net loss for the quarter and year ended
Internet Posting of Information
Axcella uses the “Investors and News” section of its website, www.axcellatx.com, as a means of disclosing material nonpublic information, to communicate with investors and the public, and for complying with its disclosure obligations under Regulation FD. Such disclosures include, but may not be limited to, investor presentations and FAQs,
About Axcella Therapeutics (Nasdaq: AXLA)
Axcella is a clinical-stage biotechnology company pioneering a new approach to treat complex diseases using compositions of endogenous metabolic modulators (EMMs). The Company’s product candidates are comprised of EMMs and derivatives that are engineered in distinct combinations and ratios to reset multiple biological pathways, improve cellular energetics, and restore homeostasis. Axcella’s pipeline includes lead therapeutic candidates for the treatment of Long COVID and non-alcoholic steatohepatitis (NASH). The Company’s unique model allows for the evaluation of its EMM compositions through non-IND clinical studies or IND clinical trials. For more information, please visit www.axcellatx.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, statements regarding the timing of the company’s clinical trial data readouts, the outcome of strategic alternatives, restructuring the company to advance AXA1125 in Long COVID Fatigue and its financial condition and expected cash runway into the second quarter of 2023. The words “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this press release are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release, including, without limitation, those related to the potential impact of COVID-19 on the company’s ability to conduct and complete its ongoing or planned clinical studies and clinical trials in a timely manner or at all due to patient or principal investigator recruitment or availability challenges, clinical trial site shutdowns or other interruptions and potential limitations on the quality, completeness and interpretability of data the company is able to collect in its clinical trials of AXA1125, other potential impacts of COVID-19 on the company’s business and financial results, including with respect to its ability to raise additional capital and operational disruptions or delays, changes in law, regulations, or interpretations and enforcement of regulatory guidance, whether data readouts support the company’s clinical trial plans and timing, clinical trial design and target indications for AXA1125, the clinical development and safety profile of AXA1125 and its therapeutic potential, whether and when, if at all, the company’s product candidates will receive approval from the FDA or other comparable regulatory authorities, potential competition from other biopharma companies in the company’s target indications, and other risks identified in the company’s
Axcella Therapeutics |
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Unaudited Condensed Consolidated Balance Sheets |
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(in thousands) |
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|
|
|
|
|
||
|
|
|
|
|
||
|
|
2022 |
|
2021 |
||
Assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
17,147 |
|
$ |
23,574 |
Marketable securities |
|
|
— |
|
|
31,474 |
Other assets |
|
|
1,780 |
|
|
2,679 |
Total assets |
|
$ |
18,927 |
|
$ |
57,727 |
Liabilities and stockholders' equity: |
|
|
|
|
||
Accounts payable |
|
$ |
4,707 |
|
$ |
4,301 |
Accrued expenses and other current liabilities |
|
|
7,849 |
|
|
5,849 |
Current portion of operating lease liability |
|
|
1,592 |
|
|
— |
Total current liabilities |
|
|
14,148 |
|
|
10,150 |
Long-term debt, net of discount |
|
|
— |
|
|
25,070 |
Operating lease liability |
|
|
569 |
|
|
— |
Other non-current liabilities |
|
|
46 |
|
|
499 |
Total liabilities |
|
|
14,763 |
|
|
35,719 |
Stockholders' equity |
|
|
4,164 |
|
|
22,008 |
Total liabilities and stockholders' equity |
|
$ |
18,927 |
|
$ |
57,727 |
Axcella Therapeutics |
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Unaudited Condensed Consolidated Statements of Operations |
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(in thousands, except share and per share data) |
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Three Months Ended
|
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Year Ended
|
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|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
$ |
13,257 |
|
|
$ |
12,467 |
|
|
$ |
56,984 |
|
|
$ |
43,135 |
|
General and administrative |
|
3,500 |
|
|
|
4,736 |
|
|
|
15,815 |
|
|
|
18,711 |
|
Restructuring and impairment charges |
|
4,189 |
|
|
|
— |
|
|
|
4,189 |
|
|
|
— |
|
Total operating expenses |
|
20,946 |
|
|
|
17,203 |
|
|
|
76,988 |
|
|
|
61,846 |
|
Loss from operations |
|
(20,946 |
) |
|
|
(17,203 |
) |
|
|
(76,988 |
) |
|
|
(61,846 |
) |
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Loss on extinguishment of debt |
|
(1,601 |
) |
|
|
— |
|
|
|
(1,601 |
) |
|
|
— |
|
Interest income (expense) and other income (expense), net |
|
(453 |
) |
|
|
(688 |
) |
|
|
(2,597 |
) |
|
|
(2,782 |
) |
Total other income (expense), net |
|
(2,054 |
) |
|
|
(688 |
) |
|
|
(4,198 |
) |
|
|
(2,782 |
) |
Net loss |
$ |
(23,000 |
) |
|
$ |
(17,891 |
) |
|
$ |
(81,186 |
) |
|
$ |
(64,628 |
) |
Net loss per share, basic and diluted |
$ |
(0.33 |
) |
|
$ |
(0.46 |
) |
|
$ |
(1.49 |
) |
|
$ |
(1.70 |
) |
Weighted average common shares outstanding, basic and diluted |
|
70,435,331 |
|
|
|
38,847,669 |
|
|
|
54,355,769 |
|
|
|
38,110,420 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230330005233/en/
Company Contact
ir@axcellatx.com
(857) 320-2200
Source: Axcella Therapeutics
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