Homology Medicines Reports Second Quarter 2021 Financial Results and Recent Highlights

Rhea-AI Summary

Homology Medicines (Nasdaq: FIXX) announced its Q2 2021 financial results, reporting a net loss of $(30.5) million, or $(0.54) per share, an improvement from $(35.3) million, or $(0.78) per share in Q2 2020. The company secured $2.2 million in collaboration revenues, up from $0.6 million a year earlier. Key milestones include plans to report results from the Phase 2 pheNIX trial for PKU, launch a gene editing trial with HMI-103, and initiate trials for HMI-203 related to Hunter syndrome. As of June 30, 2021, Homology had $213.3 million in cash, expected to cover operations into Q1 2023.

Positive

• Collaboration revenues increased to $2.2 million in Q2 2021 from $0.6 million in Q2 2020.
• Net loss improved to $(30.5) million in Q2 2021 from $(35.3) million in Q2 2020.
• Upcoming Phase 2 results for HMI-102 gene therapy for PKU expected by year-end.
• Launched GTx-mAb platform aimed at delivering antibodies, with HMI-104 candidate named for PNH.

Negative

• Net loss of $(30.5) million indicates continued financial strain.
• General and administrative expenses increased to $9.0 million in Q2 2021 from $8.8 million in Q2 2020.

- On Track to Report Initial Results from Phase 2 pheNIX Gene Therapy Trial for Adults with PKU in 2021-

- Plans to Initiate First-Ever Gene Editing Trial for PKU with HMI-103 This Year -

- Expects to Commence Clinical Trial with HMI-203 In Vivo Gene Therapy Candidate for MPS II by Year End -

- Named Clinical Development Candidate from GTx-mAb Platform, HMI-104 -

BEDFORD, Mass., Aug. 12, 2021 (GLOBE NEWSWIRE) -- Homology Medicines, Inc. (Nasdaq: FIXX), a clinical-stage genetic medicines company, announced today financial results for the second quarter ended June 30, 2021, and highlighted recent accomplishments.

“We continue to demonstrate the breadth and depth of our genetic medicines platform with three clinical programs expected this year, which span in vivo gene therapy and gene editing trials for rare liver and CNS-based diseases,” stated Arthur Tzianabos, Ph.D., President and CEO of Homology Medicines. “With additional data from our gene therapy trial and the start of our first gene editing trial, both of which are focused on developing one-time treatments for PKU and are expected this year, we will be closer to our goal of helping adults and children living with this challenging inherited metabolic disorder. In addition, we remain on track to initiate our clinical trial for Hunter syndrome and we believe our single I.V. delivery may address both peripheral and CNS aspects of this disease.”

Dr. Tzianabos added, “Our AAVHSC technology was expanded during the second quarter to include the launch of our GTx-mAb platform, a new approach using gene therapy to deliver, produce and distribute antibodies throughout the body. Preclinical proof-of-concept data gave us great confidence in selecting our C5 antibody development candidate for PNH, HMI-104, which uses another capsid from our AAVHSC portfolio. In conjunction with our C5 program, we developed a novel transfection system that has yielded up to 230 percent more vector than the current industry standard transfection system. Additional advances in our internal manufacturing platform were the subject of scientific presentations, including one describing our new formulation that will allow for a more convenient storage condition than frozen storage, which is a clear advantage for our clinical programs as well as potential commercial products.”

Second Quarter 2021 and Recent Accomplishments

• Progressed Phase 2 of the pheNIX clinical trial evaluating a single intravenous (I.V.) administration of HMI-102 gene therapy in adults with phenylketonuria (PKU), with initial results expected by year end.
  • Phase 2 is designed with the potential to be converted to a registrational trial.
  • Homology is working closely with pheNIX sites to mitigate the potential impact of a COVID-19 resurgence.
• On track to initiate a gene therapy clinical trial for Hunter syndrome (MPS II), which is designed to evaluate a one-time I.V. administration of HMI-203 in adults, by year end. Data from IND-enabling studies were presented at the American Society of Gene & Cell Therapy (ASGCT) Annual Meeting and showed:
  • Long-term transduction and expression in multiple organs and sustained secretion of I2S enzyme in the serum;
  • Reduction of glycosaminoglycan heparan sulfate (GAG-HS), including in the cerebrospinal fluid; and
  • Phenotypic correction of joints and skeletal features.
• Shared first-ever data from Homology’s new GTx-mAb platform, which is designed to deliver one-time in vivo gene therapy to produce antibodies from the liver and secrete them throughout the body. Building off the preclinical data presented at ASGCT, Homology named a development candidate, HMI-104, for paroxysmal nocturnal hemoglobinuria (PNH).
• Concluded IND-enabling studies with HMI-103, Homology’s in vivo, nuclease-free gene editing candidate for PKU, which is on track to enter the clinic by the end of 2021. Preclinical data at ASGCT demonstrated HMI-103 integrated into the human PAH locus of a humanized liver model with integration rates similar to those that have resulted in sustained reduction of serum phenylalanine (Phe) in the Pah^enu2 PKU murine model.
• Presented data at ASGCT demonstrating the stability, at high concentrations, of Homology’s novel formulation at cold storage temperatures, which simplifies the supply chain by eliminating the need for -80C frozen storage.
• Appointed gene therapy pioneer and ASGCT president Beverly Davidson, Ph.D., as Chair of Homology’s Scientific Advisory Board, on which Dr. Davidson has served since 2018.
• Spoke alongside gene therapy industry leaders during a panel at the 2021 BIO International Convention and participated in national and regional PKU patient advocacy-focused events.
• Completed a follow-on underwritten public offering of common stock with gross proceeds of $50 million.
  

Second Quarter 2021 Financial Results

• Net loss for the quarter ended June 30, 2021 was $(30.5) million or $(0.54) 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 June 30, 2021 were $2.2 million, compared to $0.6 million for the quarter ended June 30, 2020. Collaboration revenues for the second quarter 2021 included the recognition of deferred revenue and reimbursement of R&D expenses under the Company’s collaboration with Novartis, in addition to revenue recognized under Homology’s stock purchase agreement with Pfizer.
• Total operating expenses for the quarter ended June 30, 2021 were $32.7 million, compared to $36.3 million for the quarter ended June 30, 2020, and consisted of research and development expenses and general and administrative expenses.
• Research and development expenses for the quarter ended June 30, 2021 were $23.7 million, compared to $27.5 million for the quarter ended June 30, 2020. Research and development expenses decreased due to the completion of manufacturing of drug product in the prior year for the Phase 1/2 pheNIX clinical trial. Additionally, enhancements to the Company’s ‘plug and play’ internal manufacturing process and platform created greater than 50 percent efficiencies in subsequent programs that directly reduced spend for clinical trial and other materials. These included:
  • Leveraging the highly developed and optimized ‘plug and play’ platform;
  • Developing a novel transfection system that yields up to 230 percent more vector; and
  • Operational execution and expertise delivering a 100 percent cGMP production run success rate.
    
    These decreases were partially offset by increases in personnel costs to support ongoing development programs and new clinical programs, research initiatives, technology platform expansion and manufacturing capabilities.

• General and administrative expenses for the quarter ended June 30, 2021 were $9.0 million, compared to $8.8 million for the quarter ended June 30, 2020. General and administrative expenses increased due to personnel costs as a result of new hires and increased insurance expense, partially offset by decreased consulting expense and legal fees.
• As of June 30, 2021, Homology had approximately $213.3 million in cash, cash equivalents and short-term investments. Based on current projections, Homology expects cash resources to fund operations into the first quarter of 2023.

Upcoming Events

• PKU Northwest Family Camp: Presentation on HMI-102 gene therapy program for PKU on August 21
• AGBT Precision Medicine Conference: September 9-11
• Georgia PKU Connect Summer Camp: Presentation on HMI-102 on September 11
• H.C. Wainwright 23^rd Annual Global Investment Conference: Available on-demand September 13 at 7:00 a.m. ET
• Baird 2021 Global Healthcare Conference: September 14-15
• Intermountain PKU & Allied Disorders Lunch and Learn: Presentation on HMI-102 on September 25
• Chardan’s 5^th Annual Genetic Medicines Conference: October 4-5
• Cell & Gene Meeting on the Mesa: October 11-14

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 targeting the underlying cause of the disease. The Company’s lead clinical program, HMI-102, is a gene therapy for adults with phenylketonuria (PKU) and additional programs focus on gene editing in PKU, lysosomal storage disorders including Hunter syndrome, 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 vectors (AAVHSCs) 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 and believes that its data, internal manufacturing capabilities 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; the potential of our gene therapy and gene editing platforms, including our new GTx-mAb platform; 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 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 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.

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
	As of
	June 30, 2021			December 31, 2020
Cash, cash equivalents and short-term investments	$	213,293		$	217,431
Property and equipment, net		34,379			37,002
Right-of-use assets		5,328			5,897
Other assets		5,918			3,407
Total assets	$	258,918		$	263,737
Accounts payable, accrued expenses and other liabilities	$	13,385		$	14,525
Operating lease liabilities		14,189			15,442
Deferred revenue		6,767			37,775
Stockholders' equity		224,577			195,995
Total liabilities and stockholders' equity	$	258,918		$	263,737

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
	Three months ended June 30,								Six months ended June 30,
		2021				2020				2021				2020
Collaboration revenue	$	2,187			$	567			$	31,492			$	1,155
Operating expenses:
Research and development		23,697				27,471				45,452				56,780
General and administrative		9,042				8,793				17,703				16,563
Total operating expenses		32,739				36,264				63,155				73,343
Loss from operations		(30,552	)			(35,697	)			(31,663	)			(72,188	)
Other income:
Interest income		52				357				90				1,517
Total other income		52				357				90				1,517
Net loss	$	(30,500	)		$	(35,340	)		$	(31,573	)		$	(70,671	)
Net loss per share-basic and diluted	$	(0.54	)		$	(0.78	)		$	(0.59	)		$	(1.56	)
Weighted-average common shares outstanding-basic and diluted		56,497,461				45,207,934				53,429,634				45,180,096

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 Homology Medicines' financial results for Q2 2021?

Homology Medicines reported a net loss of $(30.5) million, or $(0.54) per share, and collaboration revenues of $2.2 million.

When will the results of the Phase 2 pheNIX trial for PKU be reported?

Initial results from the Phase 2 pheNIX trial for PKU are expected by the end of 2021.

What is the significance of the gene editing trial with HMI-103?

HMI-103 aims to be the first-ever gene editing trial for PKU, planned for initiation this year.

What is the financial outlook for Homology Medicines?

Homology has approximately $213.3 million in cash, expected to fund operations into the first quarter of 2023.