Cerevel Therapeutics Announces Third Quarter 2020 Financial Results and Key Business Highlights

Rhea-AI Summary

Cerevel Therapeutics debuted on Nasdaq under the symbol CERE after a significant business combination with ARYA Sciences Acquisition Corp II, raising net proceeds of approximately $440 million. The company initiated clinical trials for its leading programs targeting schizophrenia, epilepsy, anxiety, and Parkinson's disease. Financial results for Q3 2020 revealed a net loss of $39 million, versus $36 million in Q3 2019, with cash reserves expected to fund operations into 2023. R&D expenses increased to $24 million from $17 million year-over-year.

Positive

• Successfully raised approximately $440 million from business combination and PIPE financing.
• Initiated dosing in clinical trials for multiple lead programs targeting major neurological disorders.
• Anticipated cash reserves sufficient to support operations into 2023.

Negative

• Net loss widened to $39 million in Q3 2020 from $36 million in the prior year.
• R&D expenses increased significantly, indicating rising costs in clinical development.

Participants dosed in clinical trials for lead programs in schizophrenia, epilepsy, anxiety and Parkinson’s disease

Debuted as publicly traded entity under symbol CERE

Net proceeds of approximately $440 million raised from completed business combination transaction with ARYA Sciences Acquisition Corp II and concurrent PIPE financing

BOSTON, Nov. 16, 2020 (GLOBE NEWSWIRE) -- Cerevel Therapeutics (Nasdaq: CERE), a company dedicated to unraveling the mysteries of the brain to treat neuroscience diseases, today announced financial results for the third quarter ended September 30, 2020 and provided recent business updates.

“During the third quarter of 2020 we made substantial progress towards our goal of becoming the premier neuroscience company,” said Tony Coles, M.D., chief executive officer and chairperson of Cerevel Therapeutics. “As a result of our business combination with Arya II and the accompanying PIPE financing, we now have the financial resources expected to fund our operating plan into 2023 and advance each of our lead programs in the clinic. Our goal is to make a profound impact in the lives of people with schizophrenia, anxiety, epilepsy and Parkinson’s disease and we have initiated enrollment in each of our clinical trials for these diseases.”

Third Quarter and Key Business Highlights

• Dosed participants in clinical trials for all three lead programs.

_° CVL-231: the first participant was dosed in Part B of the Phase 1b trial of CVL-231 in patients with schizophrenia. The Phase 1b trial consists of Part A, a multiple ascending dose trial and Part B, a pharmacokinetic/pharmacodynamic trial. Dosing in Part A of the trial had started in the second half of 2019. Data from the Phase 1b trial are expected in the second half of 2021.
_° CVL-865: the first participant was dosed in the Phase 2 REALIZE trial evaluating CVL-865 as an adjunctive therapy in adults with drug-resistant focal onset seizures. Data from the REALIZE trial are expected in the second half of 2022. Additionally, the first participant was dosed in the Phase 1 proof-of-principle trial for acute anxiety in healthy volunteers. Data from this Phase 1 trial are expected in the second half of 2021.
_° Tavapadon: the first participants have been dosed in all three of the ongoing clinical trials in the Phase 3 program evaluating tavapadon in patients with Parkinson’s disease. Preliminary data readouts from the Phase 3 program are expected to be available beginning in the first half of 2023.

• Debuted as publicly traded neuroscience company. On October 28, 2020, Cerevel began trading as a public company via one of the largest go-public transactions in the biopharma industry to date. Following the completion of its business combination with ARYA Sciences Acquisition Corp II (Arya II), a special purpose acquisition company or SPAC, sponsored by Perceptive Advisors, Cerevel Therapeutics Holdings, Inc., the resulting combined company, commenced trading its shares under the symbol “CERE” and its warrants under the symbol “CEREW” on the Nasdaq Capital Market.
  
  
• Raised net proceeds of approximately $440 million through completed business combination. On July 29, 2020, Cerevel Therapeutics and Arya II entered into a definitive business combination agreement. Concurrently, a group of premier healthcare investors committed to participate in the transaction through a concurrent private investment in public equity (“PIPE”) financing. On October 27, 2020, the business combination was completed and net proceeds from the transaction totaled approximately $440 million, which included funds held in Arya II’s trust account and proceeds from the PIPE financing, less transaction expenses.
  

Third Quarter Financial Results

• Cash and cash equivalents: Cash and cash equivalents were $13 million as of September 30 2020. Following receipt of the net proceeds from the business combination with Arya II and the concurrent PIPE financing, Cerevel Therapeutics expects its cash and cash equivalents will be sufficient to fund its current operating plan into 2023.
• Research and Development (R&D) Expenses: R&D expenses were $24 million for the third quarter of 2020 as compared to $17 million for the third quarter of 2019. The increase in research and development expense was primarily due to higher program costs related to advancing our pipeline and increased personnel costs as we grew our organization.
• General and Administrative (G&A) Expenses: G&A expenses were $10 million for the third quarter of 2020 as compared to $10 million for the third quarter of 2019.
• Net Loss: Net loss was $39 million for the third quarter of 2020, as compared to net loss of $36 million for the third quarter of 2019.

About Cerevel Therapeutics
Cerevel Therapeutics is dedicated to unraveling the mysteries of the brain to treat neuroscience diseases. The company is tackling neuroscience diseases with a differentiated approach that combines expertise in neurocircuitry with a focus on receptor selectivity. Cerevel Therapeutics has a diversified pipeline comprising five clinical-stage investigational therapies and several preclinical compounds with the potential to treat a range of neuroscience diseases, including schizophrenia, epilepsy, Parkinson’s disease and substance use disorder. Headquartered in Boston, Cerevel Therapeutics is advancing its current research and development programs while exploring new modalities through internal research efforts, external collaborations or potential acquisitions. For more information, visit www.cerevel.com.

Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this press release include, but are not limited to, statements about the potential attributes and benefits of our product candidates, the format and timing of our product development activities and clinical trials, including the expected timing of data announcements, and the sufficiency of our financial resources. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. Actual performance and results may differ materially from those projected or suggested in the forward-looking statements due to various risks and uncertainties, including, among others: that clinical trial results may not be favorable; uncertainties inherent in the product development process (including with respect to the timing of results and whether such results will be predictive of future results); the impact of COVID-19 on the timing, progress and results of ongoing or planned clinical trials; other impacts of COVID-19, including operational disruptions or delays or to our ability to raise additional capital; whether and when, if at all, our product candidates will receive approval from the FDA or other regulatory authorities, and for which, if any, indications; competition from other biotechnology companies; uncertainties regarding intellectual property protection; and other risks identified in our SEC filings, including those under the heading “Risk Factors” in our definitive proxy statement/prospectus filed with the SEC on October 7, 2020. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

Media Contact:
Rachel Eides
W2O pure
reides@purecommunications.com

Investor Contact:
Matthew Calistri
Cerevel Therapeutics
matthew.calistri@cerevel.com

TABLE 1
CEREVEL THERAPEUTICS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
	For the Three Months								For the Nine Months
	Ended September 30,								Ended September 30,
	2019				2020				2019				2020
Operating expenses:
Research and development	$	17,342			$	24,026			$	28,326			$	73,168
General and administrative	9,643				10,336				18,740				34,052
Total operating expenses	26,985				34,362				47,066				107,220
Loss from operations	(26,985		)		(34,362		)		(47,066		)		(107,220		)
Interest income, net	368				1				1,360				210
Other income (expense), net	(8,980		)		(4,684		)		(26,423		)		(11,976		)
Loss before income taxes	(35,597		)		(39,045		)		(72,129		)		(118,986		)
Income tax (provision) benefit, net	-				5				-				21
Net loss and comprehensive loss	$	(35,597	)		$	(39,040	)		$	(72,129	)		$	(118,965	)
Net loss per share, basic and diluted	$	(7.73	)		$	(5.49	)		$	(15.66	)		$	(17.89	)
Weighted-average shares used in calculating net loss per share, basic and diluted	4,608				7,112				4,605				6,648

TABLE 2
CEREVEL THERAPEUTICS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
		As of				As of
		December 31, 2019				September 30, 2020
ASSETS
Current assets:
Cash and cash equivalents		$	79,551			$	12,808
Prepaid expenses and other current assets		7,526				3,076
Total current assets		87,077				15,884
Property and equipment, net		1,476				16,620
Operating lease assets		26,015				24,727
Restricted cash		4,131				4,200
Other long-term assets		2,107				5,606
Total assets		$	120,806			$	67,037
LIABILITIES, CONVERTIBLE STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable		$	2,109			$	4,822
Accrued expenses and other current liabilities		10,175				22,181
Operating lease liabilities, current portion		2,592				2,206
Total current liabilities		14,876				29,209
Operating lease liabilities, net of current portion		25,819				29,515
Other long-term liabilities		2,288				9,060
Total liabilities		42,983				67,784
Convertible stock and stockholders' (deficit) equity		77,823				(747		)
Total liabilities, convertible stock and stockholders’ (deficit) equity		$	120,806			$	67,037

TABLE 3
CEREVEL THERAPEUTICS HOLDINGS, INC.
SUMMARY OF CASH FLOWS
(unaudited, in thousands)
			For the Nine Months
			Ended September 30,
CASH FLOWS			2019				2020
Net cash flows used in operating activities			$	(34,907	)		$	(76,099	)
Net cash flows used in investing activities			(550		)		(11,341		)
Net cash flows provided by financing activities			58				20,766
Net decrease in cash, cash equivalents and restricted cash			(35,399		)		(66,674		)
Cash, cash equivalents and restricted cash, beginning of the period			95,443				83,682
Cash, cash equivalents and restricted cash, end of the period			$	60,044			$	17,008
Note:
Cash, cash equivalents and restricted cash balances include restricted cash of $4.2 million and $4.1 million as of September 30, 2020 and December 31, 2020, respectively.

TABLE 4
CEREVEL THERAPEUTICS HOLDINGS, INC.
GAAP TO NON-GAAP RECONCILIATION
(unaudited, in thousands, except per share amounts)
An itemized reconciliation between net loss per share on a GAAP basis and on a Non-GAAP basis is as follows:
		For the Three Months								For the Nine Months
		Ended September 30,								Ended September 30,
		2019				2020				2019				2020
GAAP net loss per share, basic and diluted		$	(7.73	)		$	(5.49	)		$	(15.66	)		$	(17.89	)
Adjustments to GAAP net loss per share (as detailed below)		2.54				1.15				6.56				3.65
Non-GAAP net loss per share, basic and diluted		$	(5.19	)		$	(4.34	)		$	(9.10	)		$	(14.24	)
Weighted-average shares used in calculating net loss per share		4,608				7,112				4,605				6,648
An itemized reconciliation between net loss on a GAAP basis and on a Non-GAAP basis is as follows:
		For the Three Months								For the Nine Months
		Ended September 30,								Ended September 30,
		2019				2020				2019				2020
GAAP net loss		$	(35,597	)		$	(39,040	)		$	(72,129	)		$	(118,965	)
Adjustments:
Research and development: equity-based compensation expense		879				1,059				1,530				2,883
General and administrative: equity-based compensation expense		1,820				2,413				2,262				6,981
General and administrative: write-off of deferred financing costs		-				-				-				2,485
Other income (expense), net: loss (gain) on fair value remeasurement of Equity Commitment		11,880				4,650				30,202				11,300
Other income (expense), net: loss (gain) on fair value remeasurement of Share Purchase Option		(2,900		)		30				(3,780		)		670
Non-GAAP net loss		$	(23,918	)		$	(30,888	)		$	(41,915	)		$	(94,646	)

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FAQ

What are the key financial results for Cerevel Therapeutics in Q3 2020?

Cerevel reported a net loss of $39 million in Q3 2020, an increase from a $36 million loss in Q3 2019, with R&D expenses rising to $24 million.

What lead programs are being pursued by Cerevel Therapeutics?

Cerevel is advancing clinical trials for treatments targeting schizophrenia, epilepsy, anxiety, and Parkinson's disease.

What is the significance of Cerevel's debut on Nasdaq under the symbol CERE?

Cerevel's debut on Nasdaq was part of a major business combination, raising approximately $440 million to support its neuroscience initiatives.

When are the data readouts expected for Cerevel's clinical trials?

Data from the Phase 1b trial of CVL-231 is expected in the second half of 2021, while data from the REALIZE trial of CVL-865 is anticipated in the second half of 2022.

How will Cerevel's financial resources impact its operations?

The approximately $440 million raised is expected to fund Cerevel's operating plan into 2023, allowing advancement of its clinical programs.