Homology Medicines Reports Second Quarter 2022 Financial Results, Recent Highlights and Provides Business Update

Rhea-AI Summary

Homology Medicines (Nasdaq: FIXX) announced its Q2 2022 financial results, ending with approximately $225.5 million in cash, expected to last into Q4 2024. The company is prioritizing its pipeline by focusing resources on HMI-103 for PKU gene editing, while pausing enrollment in the HMI-102 trial. Clearances for the juMPStart trial and FDA Orphan Drug Designation for HMI-203 were received. Collaboration revenues decreased to $0.8 million from $2.2 million year-over-year, reflecting a net loss of $(29.1) million this quarter.

Positive

• Strong cash position of approximately $225.5 million expected to last into Q4 2024.
• Focus on HMI-103 gene editing trial for PKU could lead to quicker data generation.
• Received clearance from Health Canada for juMPStart trial and FDA Orphan Drug Designation for HMI-203.

Negative

• Collaboration revenues dropped to $0.8 million from $2.2 million year-over-year.
• Net loss increased to $(29.1) million this quarter compared to $(30.5) million in Q2 2021.

- On Track for Updates on pheEDIT and juMPStart Programs by End of 2022 -

- Prioritized Pipeline, Shifting Resources to HMI-103 PKU Gene Editing Trial in Adults While Pausing Enrollment in HMI-102 PKU Gene Therapy Trial Also in Adults -

- Received Clearance from Health Canada for juMPStart Trial of Investigational HMI-203 Gene Therapy for Hunter Syndrome and U.S. FDA Orphan Drug Designation -

- Announced Optimized MLD Gene Therapy Development Candidate with Plans to Seek a Partner for Program -

- Finished Second Quarter 2022 with Strong Cash Position and Extended Runway with Pipeline Prioritization -

BEDFORD, Mass., Aug. 15, 2022 (GLOBE NEWSWIRE) -- Homology Medicines, Inc. (Nasdaq: FIXX), a genetic medicines company, announced today financial results for the second quarter ended June 30, 2022, highlighted recent accomplishments, and provided a business update.

“Homology has a strong cash position that is now expected to take us into the fourth quarter of 2024. The extended cash runway is, in part, based on our recent strategic decision to divert our resources to the ongoing pheEDIT clinical trial evaluating gene editing candidate HMI-103 in adults with PKU, while pausing enrollment in our HMI-102 pheNIX gene therapy trial that was recruiting for the same patient population,” said Arthur Tzianabos, Ph.D., Chief Executive Officer of Homology Medicines. “We believe this, together with additional steps that we are taking, including plans to partner our optimized MLD gene therapy program, will position the Company well to move select programs forward to near-term catalysts while focusing our resources and conserving cash. We continue to expect to provide program updates on pheEDIT and our Hunter syndrome gene therapy trial, juMPStart, at the end of the year.”

Albert Seymour, Ph.D., President and Chief Scientific Officer of Homology Medicines, added, “While we continued to see biologic activity in our pheNIX gene therapy trial for PKU, we believe focusing our efforts on the gene editing program for PKU is the best approach for the Company at this time. This was confirmed at the recent ASGCT Meeting where we shared the unique mechanism of action of HMI-103, including data showing durability and increased expression in preclinical models, coupled with the potential to treat adults and ultimately younger patients. With several sites currently active and open for enrollment, we believe we can more rapidly progress recruitment for the pheEDIT trial, which will evaluate a steroid-sparing immunosuppressive regimen, including a T-cell inhibitor, versus the time it would take to resume enrollment of the pheNIX trial. We also continued to advance HMI-104, which uses our GTx-mAb technology, into IND-enabling studies. This program represents a third part of Homology’s platform, and we believe it provides the opportunity to address potentially larger market indications.”

Second Quarter 2022 and Recent Accomplishments

• Confirmed plans to provide program updates by the end of the year, including enrollment and site status, from the Phase 1 pheEDIT trial evaluating in vivo gene editing candidate HMI-103 for phenylketonuria (PKU) and the Phase 1 juMPStart gene therapy trial evaluating in vivo gene therapy candidate HMI-203 for Hunter syndrome.
• Recently presented data during the ASGCT Annual Meeting on optimized HMI-103 mechanism of action, which includes an integrated PAH gene and liver-specific promoter to maximize long-term expression.
  • Preclinical data demonstrated long-term durability and precision of homologous recombination-based approach, confirming on-target editing and no off-target events, as determined by a genome-wide integration assay.
• Announced clearance from Health Canada to initiate the juMPStart trial for Hunter syndrome and receipt of Orphan Drug Designation for HMI-203 by the U.S. Food and Drug Administration (FDA).
• Presented on Homology’s PKU and Hunter syndrome clinical trials at the National PKU Alliance (NPKUA) Conference and the National MPS Society Annual Family Conference, respectively.
• Announced today prioritization of PKU clinical programs to focus on the pheEDIT trial evaluating gene editing candidate HMI-103 in an effort to extend Homology’s cash runway while continuing to move closer to the goal of offering solutions for both adults and pediatric patients with PKU. As a result, the Company paused enrollment in the pheNIX gene therapy trial evaluating HMI-102.
  • Prioritization offers potential to generate data, which includes a new immunosuppression regimen with a shorter course of steroids and a T-cell inhibitor as part of the pheEDIT protocol, sooner than would be possible to resume enrollment at pheNIX trial sites.
• Earlier in the second quarter, announced that the FDA lifted the clinical hold on the pheNIX trial of HMI-102 gene therapy for PKU.
  • We observed biologic activity, including decrease in serum phenylalanine (Phe) and increase in tyrosine (Tyr), and will continue to monitor all patients previously enrolled in the pheNIX trial and long-term extension study.
• Recently announced optimized in vivo gene therapy development candidate for metachromatic leukodystrophy (MLD) and actively pursuing partnering opportunities to advance this program.
• Continued to advance HMI-104, which is currently in IND-enabling studies and utilizes a third part of Homology’s genetic medicines platform, GTx-mAb, that has the potential to address larger market indications. HMI-104 is a C5 antibody development candidate for paroxysmal nocturnal hemoglobinuria (PNH).
• Announced the peer-reviewed publication of data on AAVHSC16, one of the capsids in Homology’s family of 15 naturally occurring AAVHSCs, which has robust distribution to the central nervous system and peripheral organs with low affinity for the liver, which could make it an attractive capsid for new disease indications with Homology’s genetic medicines platform.

Second Quarter 2022 Financial Results

• As of June 30, 2022, Homology had approximately $225.5 million in cash, cash equivalents and short-term investments. Based on current projections, which include a modest workforce reduction commensurate with the pipeline prioritization, Homology now expects cash resources to fund operations into the fourth quarter of 2024.
• Net loss for the quarter ended June 30, 2022 was $(29.1) million or $(0.51) per share, compared to a net loss of $(30.5) million or $(0.54) per share for the quarter ended June 30, 2021.
• Collaboration revenues for the quarter ended June 30, 2022 were $0.8 million, compared to $2.2 million for the quarter ended June 30, 2021. 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, 2022 were $29.1 million, compared to $32.7 million for the quarter ended June 30, 2021, and consisted of research and development expenses and general and administrative expenses.
• Research and development expenses for the quarter ended June 30, 2022 were $21.1 million, compared to $23.7 million for the quarter ended June 30, 2021. Research and development expenses decreased due to lower employee-related costs as a result of transferring employees to OXB Solutions related to the establishment of the AAV Innovation and Manufacturing Business in the first quarter of 2022, as well as decreased direct research expenses for HMI-102 due to the clinical hold placed on the trial. Partially offsetting these decreases were increased external development costs for earlier stage programs and our ongoing HMI-103 and HMI-203 clinical stage programs.
• General and administrative expenses for the quarter ended June 30, 2022 were $8.0 million, compared to $9.0 million for the quarter ended June 30, 2021. General and administrative expenses decreased as a result of finance, human resources, IT and legal services provided by the Company to OXB Solutions under the transitional services agreement under which these services are reimbursed, as well as decreased depreciation expense as the Company’s leasehold improvements were transferred to OXB Solutions.

Upcoming Events

• H.C. Wainwright 24th Annual Global Conference: September 12-14
• Baird 2022 Global Healthcare Conference: Presentation on September 13 at 11:25 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-103, a gene editing candidate for phenylketonuria (PKU); HMI-203, an investigational gene therapy for Hunter syndrome; and HMI-102, an investigational gene therapy for adults with phenylketonuria (PKU). 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; 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; our plans to engage in future collaborations and strategic partnerships; 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 June 30, 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
		June 30, 2022			December 31, 2021
Cash, cash equivalents and short-term investments		$	225,523		$	155,873
Assets held for sale			—			28,907
Equity method investment			29,298			—
Property and equipment, net			1,720			2,252
Right-of-use assets			15,151			15,607
Other assets			12,917			9,082
Total assets		$	284,609		$	211,721
Accounts payable, accrued expenses and other liabilities		$	16,702		$	13,772
Accrued income taxes			862			—
Operating lease liabilities			23,997			23,934
Deferred revenue			2,760			4,364
Stockholders' equity			240,288			169,651
Total liabilities and stockholders' equity		$	284,609		$	211,721

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,
			2022				2021				2022				2021
Collaboration revenue		$	802			$	2,187			$	1,604			$	31,492
Operating expenses:
Research and development			21,075				23,697				45,348				45,452
General and administrative			8,034				9,042				22,181				17,703
Total operating expenses			29,109				32,739				67,529				63,155
Loss from operations			(28,307	)			(30,552	)			(65,925	)			(31,663	)
Other income:
Gain on sale of business			-				—				131,249				—
Interest income			474				52				506				90
Total other income			474				52				131,755				90
Income (loss) before income taxes			(27,833	)			(30,500	)			65,830				(31,573	)
Benefit from (provision for) income taxes			105				—				(862	)			—
Loss from equity method investment			(1,361	)			—				(1,952	)			—
Net income (loss)		$	(29,089	)		$	(30,500	)		$	63,016			$	(31,573	)
Net income (loss) per share-basic		$	(0.51	)		$	(0.54	)		$	1.10			$	(0.59	)
Net income (loss) per share-diluted		$	(0.51	)		$	(0.54	)		$	1.09			$	(0.59	)
Weighted-average common shares outstanding-basic			57,385,578				56,497,461				57,334,078				53,429,634
Weighted-average common shares outstanding-diluted			57,385,578				56,497,461				57,869,443				53,429,634

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

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

Business Development Contact:
Kristi Sarno
Vice President, Business Development
and Corporate Strategy
ksarno@homologymedicines.com
617-429-1643

 

FAQ

What were the financial results for Homology Medicines for Q2 2022?

Homology Medicines reported a net loss of $(29.1) million and collaboration revenues of $0.8 million for Q2 2022.

What is the cash position of Homology Medicines as of June 30, 2022?

As of June 30, 2022, Homology Medicines had approximately $225.5 million in cash, expected to fund operations into Q4 2024.

What updates are expected from Homology Medicines by the end of 2022?

Homology Medicines plans to provide updates on the pheEDIT and juMPStart programs by the end of 2022.

Why was enrollment in the HMI-102 trial paused?

Enrollment in the HMI-102 trial was paused to focus resources on the HMI-103 gene editing trial for PKU.

What is the significance of the FDA Orphan Drug Designation for HMI-203?

The FDA Orphan Drug Designation for HMI-203 provides benefits for the development of the investigational gene therapy for Hunter syndrome.