Homology Medicines Reports First Quarter 2021 Financial Results and Recent Highlights

Rhea-AI Summary

Homology Medicines (Nasdaq: FIXX) reported first quarter 2021 results, showing a net loss of $(1.1) million or $(0.02) per share, a significant improvement from $(35.3) million or $(0.78) per share in 2020. Collaboration revenues surged to $29.3 million, driven by a strategic collaboration with Novartis. The company announced plans to present initial Phase 2 data from the pheNIX clinical trial by year-end and unveiled a new GTx-mAb platform. With roughly $188.6 million in cash, they project sufficient funds to support operations into Q1 2023.

Positive

• Collaboration revenues increased to $29.3 million from $0.6 million in Q1 2020.
• Net loss significantly reduced from $(35.3) million in Q1 2020 to $(1.1) million in Q1 2021.
• Successfully completed $50 million public offering to enhance financial stability.

Negative

• General and administrative expenses rose to $8.7 million from $7.8 million in Q1 2020.
• Novartis decided to conclude its strategic collaboration after a portfolio review.

- On Track to Report Initial Phase 2 Data From pheNIX PKU Clinical Trial by Year End -

- Announced New GTx-mAb Platform With Proof of Concept Data to Be Presented at Upcoming ASGCT Annual Meeting -

- Presented Data Demonstrating Nuclease-Free Gene Editing of Retinal Cells in Two Targets -

- Strengthened Financial Position -

BEDFORD, Mass., May 06, 2021 (GLOBE NEWSWIRE) -- Homology Medicines, Inc. (Nasdaq: FIXX), a clinical-stage genetic medicines company, announced today financial results for the first quarter ended March 31, 2021, and highlighted recent accomplishments.

“We are in the midst of a transformational time at Homology as we continue to mature and expand our genetic medicines platform and we are on track to report initial Phase 2 data from our pheNIX clinical trial and move two additional programs into the clinic this year,” stated Arthur Tzianabos, Ph.D., President and Chief Executive Officer of Homology Medicines. “We were excited to unveil our new GTx-mAb platform last week, from which we will feature data that demonstrated proof of principle targeting complement protein 5 with a one-time treatment in a humanized murine model, alongside data from our multiple gene therapy and gene editing programs at the ASGCT Annual Meeting next week. The GTx-mAb platform expands our capability to address diseases with unmet needs, including those with larger patient populations.”

Dr. Tzianabos continued, “With multiple catalysts ahead of us this year and next, we recently completed a modest financing to ensure that we are able to keep pace with our advancing programs, and importantly, remain focused on continuing to achieve our goals. We plan to provide an update from our pipeline and showcase highlights from our presentations at ASGCT next week in a conference call and webcast.”

First Quarter 2021 and Recent Accomplishments

• Progressed the dose expansion phase of the Phase 1/2 pheNIX trial evaluating HMI-102 gene therapy for the treatment of adults with phenylketonuria (PKU), which has the potential to be converted to a registrational trial.
  • Following encouraging clinical data from the dose-escalation phase of pheNIX, Homology continued to engage additional sites to enroll patients.
• Unveiled the Company's new GTx-mAb platform, which leverages its AAVHSCs to deliver vectors at a high efficiency to the liver and secrete antibodies throughout the body through a one-time administration of in vivo gene therapy, as shown in a humanized murine model. Proof of concept data targeting complement protein 5 (C5) that support this platform, in addition to new data from across the Company’s programs, including PKU, MPS II (Hunter syndrome) and metachromatic leukodystrophy (MLD), and advancements from its internal GMP manufacturing process and platform, are the subject of seven presentations, including two oral presentations, at the American Society of Gene & Cell Therapy (ASGCT) Annual Meeting May 11-14. The Company plans to name a development candidate in a new therapeutic area from the GTx-mAb platform in 2021.
• Shared the first-ever data from the Company’s nuclease-free gene editing technology platform that demonstrated the ability of AAVHSCs to transduce relevant cell types in both non-human primate (NHP) and human cells and nuclease-free gene editing in two ophthalmic targets in human retinal explants in a co-presentation with Novartis at the Association for Research in Vision and Ophthalmology (ARVO) Annual Meeting. An evaluation of 11 AAVHSC capsids from in vivo studies with NHPs and ex vivo studies with human retinal cells following a single intravenous (I.V.) or subretinal dose, respectively, found that:
  • All capsids crossed the blood-retinal and blood-brain barriers in NHPs.
  • AAVHSC15 achieved cross-species transduction of human and NHP photoreceptor cells.
  • Molecular methods confirmed seamless editing in two independent loci and detection of hybrid transcript in human retinal cells.
• Highlighted data from Homology’s PKU and Hunter syndrome gene therapy programs in presentations at the American College of Medical Genetics and Genomics (ACMG) Annual Clinical Genetics Meeting, including presentations on the pheNIX trial and the Company’s development candidate for Hunter syndrome, HMI-203. The Company expects to initiate Phase 1/2 dose-escalation clinical trials with HMI-203 and its in vivo gene editing candidate for PKU, HMI-103, in 2021.
• Showcased new and long-term data from IND-enabling studies for Homology’s central nervous system platform, including HMI-203 and the gene therapy development candidate HMI-202 for MLD, respectively, in presentations at the 17^th Annual WORLDSymposium™ Meeting.
• Participated in patient advocacy-focused events, including Cure MLD’s Standards of Care Conference and Project Alive’s Hunter syndrome Community Conference.
• Completed a $50.0 million underwritten public offering of shares of common stock in April, strengthening Homology’s financial position in support of key development milestones anticipated in each of the Company’s programs.
• Promoted Tim Kelly to Chief Operating Officer.

First Quarter 2021 Financial Results

• Net loss for the quarter ended March 31, 2021 was $(1.1) million or $(0.02) per share, compared to a net loss of $(35.3) million or $(0.78) per share for the same period in 2020.
• Collaboration revenues for the quarter ended March 31, 2021 were $29.3 million, compared to $0.6 million for the quarter ended March 31, 2020. Collaboration revenues for the three months ended March 31, 2021 includes the recognition of approximately $28.5 million of deferred revenue and reimbursement of R&D expenses under the Company’s strategic collaboration with Novartis, which Novartis decided to conclude in February 2021 following a portfolio review. Also included in collaboration revenues is revenue recognized under the Company’s stock purchase agreement with Pfizer.
• Total operating expenses for the quarter ended March 31, 2021 were $30.4 million, compared to $37.1 million for the quarter ended March 31, 2020, and consisted of research and development expenses and general and administrative expenses.
• Research and development expenses for the quarter ended March 31, 2021 were $21.8 million, compared to $29.3 million for the quarter ended March 31, 2020. Research and development expenses decreased due to higher expenses in the prior year related to the accelerated procurement of raw materials for manufacturing drug product for the Phase 1/2 pheNIX clinical trial and other development programs as part of Homology’s risk mitigation efforts in response to the COVID-19 pandemic. Additionally, the continued optimization of the Company’s ‘plug and play’ manufacturing process and platform has created greater than 50% efficiencies in subsequent programs that directly reduced spend for clinical trial materials. Costs incurred with Homology’s contract research organization (CRO) to conduct and manage the pheNIX trial with HMI-102 continued to increase, as well as personnel costs to support ongoing development programs, research initiatives, technology platforms and manufacturing capabilities.
• General and administrative expenses for the quarter ended March 31, 2021 were $8.7 million, compared to $7.8 million for the quarter ended March 31, 2020. General and administrative expenses increased due to personnel costs as a result of new hires, increased audit and legal costs and increased costs associated with expanded operations.
• As of March 31, 2021, Homology had approximately $188.6 million in cash, cash equivalents and short-term investments. Based on current projections, Homology expects cash resources, together with the approximately $49.4 million in net proceeds received from a follow-on offering of its common stock in April 2021, to fund operations into the first quarter of 2023.

Upcoming Events

• American Society of Gene & Cell Therapy (ASGCT) 24^th Annual Meeting: May 11-14
• Homology Medicines Corporate & Pipeline Update Conference Call & Webcast: May 13
• RBC Capital Markets Healthcare Conference: May 18-19
• Bank of America Securities 2021 Napa Biopharma Virtual Conference: June 14-16
• National PKU Alliance 2021 Virtual Mini-Conference: July 9-10
  

About Homology Medicines, Inc.
Homology Medicines, Inc. is a clinical-stage 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. The Company’s intellectual property covers its family 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; the potential of our gene therapy and gene editing platforms, including our new GTx-mAb platform; our plans to name a development candidate in a new therapeutic area and potential thereof; plans and timing for the release of additional preclinical and clinical data, including initial Phase 2 data from the pheNIX clinical trial; our beliefs regarding our manufacturing capabilities; our position as a leader in the development of genetic medicines; the sufficiency of our cash, cash equivalents and short-term investments 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 quarter ended March 31, 2021 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.

- Financial Tables Follow -

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
		Three months ended March 31,
			2021				2020
Collaboration revenue		$	29,305			$	588
Operating expenses:
Research and development			21,755				29,310
General and administrative			8,661				7,770
Total operating expenses			30,416				37,080
Loss from operations			(1,111	)			(36,492	)
Other income:
Interest income			38				1,161
Total other income			38				1,161
Net loss		$	(1,073	)		$	(35,331	)
Net loss per share-basic and diluted		$	(0.02	)		$	(0.78	)
Weighted-average common shares outstanding-basic and diluted			50,363,579				45,151,265

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
		As of
		March 31, 2021			December 31, 2020
Cash, cash equivalents and short-term investments		$	188,649		$	217,431
Property and equipment, net			36,153			37,002
Right-of-use assets			5,618			5,897
Other assets			4,277			3,407
Total assets		$	234,697		$	263,737
Accounts payable, accrued expenses and other liabilities		$	10,301		$	14,525
Operating lease liabilities			14,821			15,442
Deferred revenue			8,746			37,775
Stockholders' equity			200,829			195,995
Total liabilities and stockholders' equity		$	234,697		$	263,737

Company Contacts
Theresa McNeely
Chief Communications Officer
and Patient Advocate
tmcneely@homologymedicines.com
781-301-7277

Media Contact:
Marisa Citrano
Senior Corporate Communications Associate
mcitrano@homologymedicines.com
617-335-2841

FAQ

What are the financial results for Homology Medicines in Q1 2021?

Homology reported a net loss of $(1.1) million and collaboration revenues of $29.3 million.

What is the expected timeline for the Phase 2 data from the pheNIX trial?

Initial Phase 2 data from the pheNIX clinical trial is expected to be reported by the end of 2021.

How did Homology's financial position change in Q1 2021?

Homology strengthened its financial position with a $50 million public offering and had approximately $188.6 million in cash as of March 31, 2021.

What is the GTx-mAb platform announced by Homology Medicines?

The GTx-mAb platform leverages AAVHSCs for efficient gene delivery, targeting diseases with significant unmet needs.