Homology Medicines Reports First Quarter 2022 Financial Results and Recent Highlights

Rhea-AI Summary

Homology Medicines (FIXX) announced Q1 2022 results, reporting a net income of $92.1 million, significantly up from a net loss of $1.1 million in Q1 2021, primarily due to a $131.2 million gain from the sale of its manufacturing operations. The company secured $130 million in non-dilutive capital from Oxford Biomedica, enhancing its financial stability. Upcoming presentations at the ASGCT meeting will detail the HMI-103 gene editing candidate and other innovations. However, the company is addressing a clinical hold from the FDA on its pheNIX trial regarding elevated liver function tests.

Positive

• Net income increased to $92.1 million from a net loss of $1.1 million YoY.
• $130 million received in non-dilutive capital from Oxford Biomedica strengthens financial position.
• Promoted Albert Seymour to President, expanding leadership for growth.
• Upcoming ASGCT presentations will showcase advancements in gene editing.

Negative

• Collaboration revenues dropped to $0.8 million from $29.3 million YoY due to the end of a collaboration with Novartis.
• Operating expenses rose to $38.4 million from $30.4 million YoY, driven by increased R&D and G&A costs.
• The FDA put the pheNIX gene therapy trial on clinical hold due to elevated liver function tests.

- $130 Million in Non-Dilutive Capital Strengthened Financial Position -

- Presentations at Upcoming ASGCT Annual Meeting Include First-Time Details of Mechanism of Action of Nuclease-Free Gene Editing Candidate HMI-103 for PKU; Symposium to Feature Lead Principal Investigator for the pheEDIT Trial -

- Additional Presentations on GTx-mAb Platform and Characterization of Proprietary AAVHSC Capsid with Low Liver Tropism -

- Submitted Response to FDA with Information Requested for pheNIX Gene Therapy Trial Clinical Hold -

BEDFORD, Mass., May 16, 2022 (GLOBE NEWSWIRE) -- Homology Medicines, Inc. (Nasdaq: FIXX), a genetic medicines company, announced today financial results for the first quarter ended March 31, 2022, and highlighted recent accomplishments.

“During the first quarter of 2022, we took additional steps to pave the way for Homology’s success,” said Arthur Tzianabos, Ph.D., Chief Executive Officer of Homology Medicines. “We established a new Manufacturing and Innovation Business with Oxford Biomedica to leverage what we built early on at Homology as an industry leader in AAV process development and manufacturing. The unique structure of the deal provides us with ownership in the new company and preferred customer access to the team and capabilities that has and will continue to support our clinical trials and pipeline. Importantly, we believe that the $130 million upfront payment from OXB provides us with ample cash to achieve important milestones across all of our programs. With a continued focus on clinical execution and advancing our pipeline, we promoted Albert Seymour to President of Homology, expanding his role as Chief Scientific Officer to oversee clinical development, human resources and commercial operations.”

Albert Seymour, Ph.D., President and Chief Scientific Officer of Homology Medicines, added, “We are excited to present the details behind our optimized HMI-103 gene editing candidate for PKU for the first time at ASGCT this week. We believe that the novel mechanism of action of this integrating vector will represent an important advance in the field of gene editing. Among multiple other presentations at ASGCT, we plan to share data characterizing a capsid from our family of novel AAVHSCs that has low affinity for the liver after I.V. administration but retains tropism for other cell types. As a result, we believe this novel capsid offers greater possibility in developing treatments focused mainly on cardiac tissue, muscle or the central nervous system, while reducing the exposure to the liver.”

Dr. Seymour continued, “Since receiving the official letter from the FDA in March pertaining to a clinical hold on our pheNIX gene therapy trial for PKU, we have worked diligently to respond to the FDA’s request for information, which included potential risk-mitigation strategies and proposed protocol amendments. We are pleased to have submitted what we believe is a comprehensive response and will continue to work with the FDA to resolve the hold as quickly as possible.”

First Quarter 2022 and Recent Accomplishments

• Closed the deal with Oxford Biomedica (OXB) to establish an AAV Innovation and Manufacturing Business that incorporated Homology’s technical and manufacturing operations, team and GMP facility. Homology received $130 million in non-dilutive capital from OXB and maintains access as a preferred customer to the ‘plug and play’ AAV manufacturing process and platform, as well as shares in potential benefits as a 20% owner of the business.
• Announced upcoming presentations at the American Society for Gene & Cell Therapy (ASGCT) 25th Annual Meeting May 16-19, 2022, including:
  • Several presentations featuring HMI-103 investigational gene editing candidate for phenylketonuria (PKU), including optimization and mechanism of action, and genome-wide integration assays conducted to confirm no off-target editing;
  • New information from the GTx-mAb platform, including data that further characterize the expression of C5 antibodies following a one-time administration;
  • Characterization of a non-liver-tropic capsid and other details on the characterization of Homology’s family of 15 naturally derived AAVHSCs; and
  • A symposium on Wednesday, May 18 at 7:30 a.m. ET to feature guest speaker Jerry Vockley, Ph.D., M.D., FACMG, Division Director, Genetic and Genomic Medicine, Professor of Pediatrics and Human Genetics, and Director, Center for Rare Disease Therapy at the University of Pittsburgh, and Lead Principal Investigator for the pheEDIT HMI-103 trial.
• Announced today that Homology submitted a response to the U.S. Food and Drug Administration (FDA) regarding the clinical hold on the pheNIX gene therapy trial of HMI-102 in adults with PKU. As previously disclosed, the clinical hold related only to the pheNIX trial and pertained to elevated liver function tests (LFTs) observed in the trial, including a request for modified risk-mitigation measures. Homology plans to provide the next update on pheNIX when the path forward is established with the FDA.
  • As part of the response, Homology included a protocol amendment to incorporate the same targeted immunosuppressive regimen in the ongoing pheEDIT clinical trial, which utilizes a T-cell inhibitor, is shorter in duration and reduces the length of steroid therapy. The new regimen is aligned with data that show that T-cell inhibitors dampen the immune response to AAV capsids in the clinical setting. Homology believes the regimen may also increase patient compliance.
  • As previously reported, all instances of LFT elevations have resolved, and no hospitalizations were required.
• Promoted Albert Seymour, Ph.D., to President in addition to his role as Homology’s Chief Scientific Officer.

First Quarter 2022 Financial Results

• Net income for the quarter ended March 31, 2022 was $92.1 million compared to a net loss of $(1.1) million for the quarter ended March 31, 2021. Net income for the three months ended March 31, 2022 was primarily due to a gain of $131.2 million on the sale of the Company’s manufacturing operations, offset by operating expenses of $38.4 million. Diluted net income per share was $1.59 compared to diluted net (loss) per share of ($0.02) for the same period in 2021.
• Collaboration revenues for the quarter ended March 31, 2022 were $0.8 million, compared to $29.3 million for the quarter ended March 31, 2021. Collaboration revenues for the three months ended March 31, 2021 included the recognition of approximately $28.5 million of deferred revenue and reimbursement of R&D expenses as a result of concluding the Company’s collaboration with Novartis. Also included in collaboration revenues in both periods is revenue recognized under the Company’s Stock Purchase Agreement with Pfizer.
• Total operating expenses for the quarter ended March 31, 2022 were $38.4 million, compared to $30.4 million for the quarter ended March 31, 2021, and consisted of research and development expenses and general and administrative expenses.
• Research and development expenses for the quarter ended March 31, 2022 were $24.3 million, compared to $21.8 million for the quarter ended March 31, 2021. Research and development expenses increased due to higher external development costs for earlier stage programs, specifically related to the development of HMI-104, Homology’s GTx-mAb product candidate for PNH, and HMI-203, the Company’s investigational gene therapy in development for the treatment of adults with Hunter syndrome. Employee-related costs also increased due to additional employee headcount to support ongoing development programs and research initiatives, which resulted in increases in salaries, payroll taxes and stock-based compensation expense. Partially offsetting these increases was decreased direct research expenses for HMI-102 as the trial was placed on clinical hold.
• General and administrative expenses for the quarter ended March 31, 2022 were $14.1 million, compared to $8.7 million for the quarter ended March 31, 2021. The increase in general and administrative expenses was largely due to professional fees incurred in connection with the OXB transaction, which included strategic advisory, legal and audit fees related to the unique structure of the collaboration that provided for Homology’s 20% ownership in the new business, preferred customer status, and the transfer of assets including its technical operations team, GMP facility, and associated intellectual property.
• In March of 2022, the Company closed its transaction with OXB and recorded a gain of $131.2 million on the sale of Homology’s manufacturing operations. As a result, Homology recorded an income tax provision of $1.0 million for the three months ended March 31, 2022 that predominately resulted from the sale, after utilization of net operating loss carryforwards and tax credits.
• As of March 31, 2022, Homology had approximately $256.1 million in cash, cash equivalents and short-term investments. Based on current projections, Homology still expects cash resources to fund operations into the second half of 2024.
  

Upcoming Events

• Homology ASGCT Symposium: May 18 at 7:30 a.m. ET
• H.C. Wainwright Global Investment Conference: Available on-demand May 24 at 7 a.m. ET

About Homology Medicines, Inc.
Homology Medicines, Inc. is a clinical-stage genetic medicines company dedicated to transforming the lives of patients suffering from rare diseases by addressing the underlying cause of the disease. The Company’s clinical programs include HMI-102, an investigational gene therapy for adults with phenylketonuria (PKU); HMI-103, a gene editing candidate for PKU; and HMI-203, an investigational gene therapy for Hunter syndrome. Additional programs focus on metachromatic leukodystrophy (MLD), paroxysmal nocturnal hemoglobinuria (PNH) and other diseases. Homology’s proprietary platform is designed to utilize its family of 15 human hematopoietic stem cell-derived adeno-associated virus (AAVHSCs) vectors to precisely and efficiently deliver genetic medicines in vivo through a gene therapy or nuclease-free gene editing modality, as well as to deliver one-time gene therapy to produce antibodies throughout the body through the GTx-mAb platform. Homology has a management team with a successful track record of discovering, developing and commercializing therapeutics with a focus on rare diseases. Homology believes its initial clinical data and compelling preclinical data, scientific and product development expertise and broad intellectual property position the Company as a leader in genetic medicines. For more information, 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, including our expectations surrounding our ability to resolve the clinical hold placed on the HMI-102 program and the timing of related updates; the potential of our gene therapy and gene editing platforms, including our GTx-mAb platform; our plans and timing for the release of additional preclinical and clinical data; our position as a leader in the development of genetic medicines; the sufficiency of our cash and cash equivalents to fund our operations; activities related to our agreements with Oxford Biomedica Solutions LLC; 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 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, including for the manufacture of materials for our research programs, preclinical and clinical studies; 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; securities class action litigation; failure to attract, retain and motivate qualified personnel; the possibility of system failures or security breaches; risks relating to intellectual property and significant costs incurred 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, 2022 and our other filings with the Securities and Exchange Commission (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 BALANCE SHEETS
(in thousands)
(Unaudited)
		As of
		March 31, 2022				December 31, 2021
Cash, cash equivalents and short-term investments		$	256,126			$	155,873
Assets held for sale			—				28,907
Equity method investment			30,639				—
Property and equipment, net			1,986				2,252
Right-of-use assets			15,609				15,607
Other assets			6,598				9,082
Total assets		$	310,958			$	211,721
Accounts payable, accrued expenses and other liabilities		$	16,192			$	13,772
Accrued income taxes			967				—
Operating lease liabilities			23,983				23,934
Deferred revenue			3,562				4,364
Stockholders' equity			266,254				169,651
Total liabilities and stockholders' equity		$	310,958			$	211,721

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
		Three months ended March 31,
			2022				2021
Collaboration revenue		$	802			$	29,305
Operating expenses:
Research and development			24,273				21,755
General and administrative			14,147				8,661
Total operating expenses			38,420				30,416
Loss from operations			(37,618	)			(1,111	)
Other income:
Gain on sale of business			131,249				—
Interest income			32				38
Total other income			131,281				38
Income (loss) before income taxes			93,663				(1,073	)
Provision for income taxes			(967	)			—
Loss from equity method investment			(591	)			—
Net income (loss)		$	92,105			$	(1,073	)
Net income (loss) per share-basic		$	1.61			$	(0.02	)
Net income (loss) per share-diluted		$	1.59			$	(0.02	)
Weighted-average common shares outstanding-basic			57,279,963				50,363,579
Weighted-average common shares outstanding-diluted			57,875,576				50,363,579

 

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

Media Contact:
Cara Mayfield
Vice President, Patient Advocacy
and Corporate Communications
cmayfield@homologymedicines.com
781-691-3510

 

FAQ

What were the financial results for Homology Medicines in Q1 2022?

Homology Medicines reported a net income of $92.1 million for Q1 2022, compared to a net loss of $1.1 million in Q1 2021.

What developments are being presented at the ASGCT Annual Meeting?

Homology will present details about HMI-103 for PKU, along with advancements in their GTx-mAb platform and novel AAVHSC capsids.

How has the $130 million capital affected Homology's financial positioning?

The $130 million non-dilutive capital from Oxford Biomedica has significantly strengthened Homology's financial position, supporting various programs.

What is the status of the pheNIX gene therapy trial?

The pheNIX trial is currently on clinical hold by the FDA due to elevated liver function tests, with a comprehensive response submitted to resolve the issue.