Homology Medicines Reports Fourth Quarter and Full Year 2020 Financial Results and Recent Highlights

Rhea-AI Summary

Homology Medicines, Inc. (Nasdaq: FIXX) reported a net loss of $(29.8) million, or $(0.62) per share, for Q4 2020, compared to $(24.2) million, or $(0.55) per share, in Q4 2019. Full-year net loss was $(128.7) million, or $(2.80) per share, compared to $(103.9) million, or $(2.47) per share, the previous year. The company received a $60 million investment from Pfizer and is focusing on advancing its gene therapy programs, including the ongoing pheNIX trial for phenylketonuria (PKU), with initial data expected by the year's end.

Positive

• Received $60 million investment from Pfizer, strengthening financial position.
• Advancements in gene therapy programs, including the ongoing pheNIX trial.
• Plans to initiate Phase 1/2 trials for PKU and Hunter syndrome, increasing development pipeline.

Negative

• Incurred a net loss of $(128.7) million for 2020, a significant year-over-year increase.
• Collaboration revenues decreased relative to expectations, with a strategic partnership with Novartis concluding.
• Operating expenses increased to $133 million, affecting overall financial health.

- Phase 2 PKU Gene Therapy Trial Recruiting Patients With Initial Data Expected by Year End -

- On Track to Initiate Phase 1/2 Trials With In Vivo Gene Editing Candidate for PKU and Gene Therapy Candidate for Hunter Syndrome This Year -

- Plans to Name a New Development Candidate in 2021 That Leverages the Potential of the AAVHSC Platform to Target Larger Disease Areas -

BEDFORD, Mass., March 11, 2021 (GLOBE NEWSWIRE) -- Homology Medicines, Inc. (Nasdaq: FIXX), a clinical-stage genetic medicines company, announced today financial results for the fourth quarter and full year ended December 31, 2020, and highlighted recent accomplishments.

“In 2020, we remained focused on our mission, proactive in our preparations and successfully advanced our genetic medicines platform to meet our goals,” stated Arthur Tzianabos, Ph.D., President and Chief Executive Officer of Homology Medicines. “We ended the year with positive data from the dose-escalation phase of our pheNIX PKU gene therapy clinical trial and a subsequent $60 million equity investment from Pfizer. We also leveraged the potential of our fully characterized family of 15 AAVHSC vectors to expand our portfolio with an in vivo gene therapy development candidate for Hunter syndrome, which is differentiated from other available treatments and those in development. Our focus on internal manufacturing, which led us to be one of the first companies to scale to a 2,000-liter bioreactor, has continued to support our clinical and preclinical programs.”

Dr. Tzianabos added, “As we announced in early January, we have started 2021 off with ambitious plans to have three programs in the clinic this year, including our ongoing pheNIX PKU gene therapy trial and anticipated Phase 1/2 clinical trial initiations in PKU, with our first gene editing candidate, and Hunter syndrome, with our gene therapy candidate. The pheNIX clinical trial sites are actively recruiting at multiple PKU centers across the U.S., and we anticipate reporting data by year’s end. Additionally, we look forward to naming a development candidate in a new therapeutic area this year, demonstrating the broader capability of our AAVHSC platform, which may allow us to tackle diseases with larger patient populations in the future.”

Fourth Quarter 2020 and Recent Accomplishments

• Outlined plans to have three clinical programs during 2021, including:
  • Advancing Homology’s pheNIX clinical trial for adults with phenylketonuria (PKU), the world’s first PKU gene therapy clinical trial, with initial data from the Phase 2 randomized, concurrently controlled, dose expansion phase of the trial expected this year. This has the potential to be converted to a registrational trial.
  • Plans to initiate two additional Phase 1/2 dose-escalation trials; one with Homology’s first gene editing candidate, HMI-103, which is for PKU, and one with HMI-203, Homology’s gene therapy candidate for Hunter syndrome.
• Announced plans to unveil a development candidate in a new therapeutic area, unlocking the potential of the AAVHSC platform to target diseases with larger patient populations.
• Presented the first data from IND-enabling studies with HMI-203 at the 17^th Annual WORLDSymposium™ Meeting. A single I.V. administration of HMI-203 in the adult murine model of Hunter syndrome:
  • Led to robust biodistribution and sustained human I2S enzyme expression, which resulted in: 
    • Significant reductions in key Hunter syndrome biomarkers of heparan sulfate glycosaminoglycans (GAGs) and lysosomal-associated membrane protein 1 (LAMP1) in the brain, liver, heart, spleen, lung and kidneys compared with vehicle.
    • Significant reductions in heparan sulfate GAGs in the cerebrospinal fluid (CSF) compared with vehicle.
  • Ameliorated paw deformities, as shown by significant changes in measurements of ankle depth and width and paw depth and width, compared with vehicle.
  • Led to uptake of human I2S from the serum of the HMI-203-treated model in human cell lines, demonstrating potential for cell cross-correction.
• Shared long-term preclinical data with Homology’s HMI-202 in vivo gene therapy program for metachromatic leukodystrophy (MLD), which showed a single I.V. administration:
  • Crossed the blood-brain barrier and blood-nerve barrier in the murine MLD disease model and in non-human primates (NHPs), with human ARSA (hARSA) detected in neuronal and glial cells.
  • Showed durable hARSA activity in the central nervous system of the disease model, with distribution levels resembling those of Arsa in normal age-matched controls.
  • Demonstrated significant changes in key MLD biomarkers of LAMP1, glial fibrillary acidic protein (GFAP), MAL transcript and neuronal sulfatides in the disease model compared with vehicle, similar to age-matched wild type controls.
• Announced a $60 million equity investment from Pfizer Inc. with the purchase of 5,000,000 shares of common stock at a price of $12.00 per share, which closed on November 9, 2020. The investment includes a right of first refusal on potential future transactions involving PKU programs: HMI-102 gene therapy and HMI-103 gene editing.
• Presented at the EveryLife Foundation for Rare Diseases 2020 Scientific Workshop on innovative strategies and potential advantages and outcomes of implementing home health services in the first-ever PKU gene therapy clinical trial during the pandemic.
• Supported National PKU Alliance’s (NPKUA) #wearblueforPKU2020 campaign for PKU Awareness Day, and partnered with TinySuperheroes, an organization that empowers children overcoming an illness or disability, in recognition of Rare Disease Day 2021.
• Regained worldwide exclusive rights from Novartis to research, develop, manufacture and commercialize Homology’s proprietary nuclease-free gene editing technology platform for an ophthalmic target. The companies believe studies conducted under the collaboration provide early proof-of-principle and support a nuclease-independent approach to editing of relevant cell types in the eye after sub-retinal injection. Results of the studies are the subject of a planned presentation at an upcoming scientific meeting.

Fourth Quarter 2020 and Full Year Financial Results

• Net loss for the quarter ended December 31, 2020 was $(29.8) million or $(0.62) per share, compared to a net loss of $(24.2) million or $(0.55) per share for the same period in 2019. Net loss for the year ended December 31, 2020 was $(128.7) million or $(2.80) per share, compared to a net loss of $(103.9) million or $(2.47) per share for the same period in 2019.
• Collaboration revenues for the three and twelve months ended December 31, 2020 were $1.0 million and $2.7 million, respectively, as compared to $0.6 million and $1.7 million for the comparable periods in 2019. Collaboration revenues consisted primarily of revenue recognized 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 three and twelve months ended December 31, 2020 were $30.8 million and $133.0 million, respectively, as compared to $26.1 million and $111.6 million for the comparable periods in 2019, and consisted of research and development expenses and general and administrative expenses.
• Research and development expenses for the three and twelve months ended December 31, 2020 were $23.2 million and $100.4 million, respectively, as compared to $20.3 million and $89.4 million for the comparable periods in 2019. Research and development expenses increased due to a rise in direct research expenses, including costs incurred with Homology’s contract research organization (CRO) to conduct and manage the Phase 1/2 pheNIX clinical trial with HMI-102, costs related to manufacturing clinical trial materials and direct research expenses related to advancing the Company’s other development-stage programs, including HMI-203 for Hunter syndrome and increased personnel costs to support ongoing development programs, research initiatives, technology platform and manufacturing capabilities.
• General and administrative expenses for the three and twelve months ended December 31, 2020 were $7.6 million and $32.6 million, respectively, as compared to $5.8 million and $22.2 million for the comparable periods in 2019. 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 December 31, 2020, Homology had approximately $217.4 million in cash, cash equivalents and short-term investments. Based on current projections, Homology expects cash resources to fund operations into the third quarter of 2022.

Upcoming Events

• Project Alive – Presentation on HMI-203 gene therapy program for Hunter syndrome: March 20
• Guggenheim Healthcare Talks Genomic Medicines and Rare Disease Day: April 1
• 20^th Annual Needham Virtual Healthcare Conference: April 12-15
• American College of Medical Genetics and Genomics (ACMG) Annual Clinical Genetics Meeting – Presentations on pheNIX gene therapy clinical trial and HMI-203 gene therapy program: April 13-16
• 5^th Annual Chardan Genetic Medicines Manufacturing Summit: April 26-27
• Association for Research in Vision and Ophthalmology (ARVO) 2021 Annual Meeting – Presentation on biodistribution of AAVHSCs and gene editing in ophthalmology research: May 1-7
• Bank of America Merrill Lynch Health Care Conference: May 11-13
• American Society of Gene & Cell Therapy (ASGCT) 24^th Annual Meeting: May 12-15
• RBC Capital Markets Healthcare Conference: May 18-19
  

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; 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; our beliefs regarding our manufacturing capabilities; our position as a leader in the development of genetic medicines; the sufficiency of our cash and cash equivalents 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; 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 Annual Report on Form 10-K for the year ended December 31, 2020 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
	For the Three Months Ended December 31,								For the Years Ended December 31,
		2020				2019				2020				2019
	(unaudited)
Collaboration revenue	$	980			$	563			$	2,702			$	1,666
Operating expenses:
Research and development		23,195				20,342				100,392				89,398
General and administrative		7,587				5,780				32,573				22,211
Total operating expenses		30,782				26,122				132,965				111,609
Loss from operations		(29,802	)			(25,559	)			(130,263	)			(109,943	)
Other income:
Interest income		11				1,392				1,569				6,027
Total other income		11				1,392				1,569				6,027
Net loss	$	(29,791	)		$	(24,167	)		$	(128,694	)		$	(103,916	)
Net loss per share-basic and diluted	$	(0.62	)		$	(0.55	)		$	(2.80	)		$	(2.47	)
Weighted-average common shares outstanding-basic and diluted		48,112,174				44,077,777				45,910,787				42,117,690

 

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
	December 31,
		2020				2019
Cash, cash equivalents and short-term investments	$	217,431			$	262,388
Property and equipment, net		37,002				42,716
Right-of-use assets		5,897				—
Other assets		3,407				5,463
Total assets	$	263,737			$	310,567
Accounts payable, accrued expenses and other liabilities	$	14,525			$	21,109
Operating lease liabilities		2,501				—
Operating lease liabilities, net of current portion		12,941				—
Deferred revenue		37,775				30,951
Stockholders' equity		195,995				258,507
Total liabilities and stockholders' equity	$	263,737			$	310,567

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 were the financial results for Homology Medicines (FIXX) in Q4 2020?

Homology reported a Q4 net loss of $(29.8) million, or $(0.62) per share.

What are the upcoming trials for Homology Medicines (FIXX)?

Homology plans to initiate Phase 1/2 trials for PKU and Hunter syndrome in 2021.

What is the significance of the $60 million investment from Pfizer for FIXX?

The investment supports ongoing gene therapy development and strengthens Homology's financial position.

When can we expect data from the pheNIX gene therapy trial for PKU?

Initial data from the pheNIX trial is expected by the end of 2021.