Frequency Therapeutics Provides Business Updates and Fourth Quarter and Full Year 2022 Financial Results
Frequency Therapeutics, Inc. (Nasdaq: FREQ) has announced updates and financial results for Q4 and the full year 2022. The company reported a cash position of $83.1 million as of December 31, 2022, which is expected to fund operations into Q1 2025. CEO David L. Lucchino confirmed plans to initiate a clinical trial for a remyelination therapy targeting multiple sclerosis in H1 2024. However, the FX-322-208 study for hearing restoration failed its primary endpoint, leading to the discontinuation of related programs. R&D expenses decreased to $10.6 million in Q4 2022, while the net loss was $17.4 million, down from $21.5 million in Q4 2021.
- Cash position of $83.1 million expected to last into Q1 2025.
- Plans to initiate clinical trial for remyelination therapy in H1 2024.
- R&D expenses decreased by 17.2% from Q4 2021.
- Discontinued FX-322 and FX-345 programs due to failed primary endpoint.
- Net loss of $81.6 million for the full year 2022, indicating ongoing financial challenges.
- 55% reduction in workforce as part of restructuring.
“The Frequency team continues to make important progress with our novel therapeutic program designed to induce remyelination for individuals living with multiple sclerosis and remains on track to initiate clinical development for a potentially first-in-class therapy for this debilitating disease in the first half of 2024. Our current cash position takes us into Q1 2025, which enables us to advance development of this program through an initial clinical study,” said
Recent Program and Business Updates
-
In February, Frequency announced that the FX-322-208 study, a Phase 2b study for acquired Sensorineural Hearing Loss (SNHL), did not achieve its primary endpoint of speech perception. Based on this outcome, Frequency has discontinued both the FX-322 program and its second development program for hearing restoration, FX-345, which was enrolling a Phase 1b study for acquired SNHL.
-
The Company also announced it will now focus discovery efforts on its program to induce remyelination for individuals living with multiple sclerosis (MS), an area where there currently are no restorative options for patients. MS in characterized by demyelination, stripping axons of the myelin sheaths that support neuronal signal conduction and axonal survival. Previously, Frequency reported it had identified a novel target relevant for remyelination and that modulation of this target induced robust oligodendrocyte differentiation and expression of myelin proteins in vitro. The Company has identified multiple new chemical entities that induce robust remyelination following demyelination in an adult in vivo animal model and these novel agents substantially outperform other clinically studied remyelination agents in head-to-head in vivo studies.
The MS program is independent of the Frequency’s hearing efforts, with a distinct molecular target, mechanism, progenitor cell population, and small molecule drug candidates. Further, a well-defined clinical path with objective biomarkers such as visual evoked potential (VEP) and magnetic resonance imaging (MRI) exist for studying the performance of remyelination therapies in MS patients.
-
Given the outcome of the FX-322-208 study, the Company has undertaken actions to reduce expenses and headcount as part of an overall restructuring, downsizing personnel by approximately 55 percent. These cuts will be completed by the end of
April 2023 . The Company will remain at its current headquarters inLexington where it maintains both laboratory and office space.
-
CEO and President
David L. Lucchino , who had been on medical leave as ofFebruary 7, 2023 , returned to the Company onMarch 1, 2023 , and has assumed all prior duties.
Fourth Quarter and Full Year 2022 Financial Results
Cash Position: As of
Frequency believes that the restructuring activities will generate sufficient cost savings to extend its runway into 2025 and enable it to complete a first clinical trial of its MS Program in 2H 2024.
Research and Development Expenses: Research and development expenses were
General and Administrative Expenses: General and administrative expenses were
Net Loss: Net loss was
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 the treatment potential and timing of Frequency Therapeutics’ (the Company) remyelination program in MS (MS Program), including the timing of clinical development, the existence of a well-defined clinical path for the MS Program, potential application of the regenerative medicine platform to other diseases, the ability of our regenerative medicine platform to provide patient benefit, and the sufficiency of the Company’s capital resources, including having sufficient resources to complete a first clinical trial in its MS Program.
These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause 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 COVID-19 on the Company’s planned clinical trials, research and development and manufacturing activities, the Company’s business and financial markets; the Company has incurred and will continue to incur significant losses and is not and may never be profitable; the Company’s need for additional funding to complete development and commercialization of any product candidate; the unproven approach of the PCA platform and the inability to identify additional potential product candidates; the lengthy, expensive and uncertain process of clinical drug development and regulatory approval; the Company’s limited experience successfully obtaining marketing approval for and commercializing product candidates; the results of pre-clinical studies not being indicative of the results from clinical trials; adverse events or undesirable side effects; disruptions at the FDA and other regulatory agencies; failure to identify additional product candidates; new or changed legislation; costly and damaging litigation, including related to product liability or intellectual property or brought by stockholders; misconduct by employees or independent contractors; reliance on third parties, including to conduct clinical trials and manufacture product candidates; compliance with changing laws and regulations, including healthcare and environmental, health, data privacy and safety laws and regulations; failure to obtain, maintain and enforce protection of patents and other intellectual property rights covering product candidates; security breaches or failure to protect private personal information; attracting and retaining key personnel; and the Company’s ability to manage growth.
These and other important factors discussed under the caption “Risk factors” in the Company’s Form 10-K filed with the
About
Headquartered in
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,068 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Research and development |
|
|
10,649 |
|
|
|
12,754 |
|
|
|
49,418 |
|
|
|
60,923 |
|
General and administrative |
|
|
7,547 |
|
|
|
8,605 |
|
|
|
33,584 |
|
|
|
37,176 |
|
Total operating expenses |
|
|
18,196 |
|
|
|
21,359 |
|
|
|
83,002 |
|
|
|
98,099 |
|
Loss from operations |
|
|
(18,196 |
) |
|
|
(21,359 |
) |
|
|
(83,002 |
) |
|
|
(84,031 |
) |
Interest income |
|
|
456 |
|
|
|
82 |
|
|
|
1,327 |
|
|
|
397 |
|
Interest expense |
|
|
(312 |
) |
|
|
(182 |
) |
|
|
(961 |
) |
|
|
(764 |
) |
Realized gain (loss) on investments |
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
(23 |
) |
Foreign exchange gain (loss) |
|
|
2 |
|
|
|
— |
|
|
|
(5 |
) |
|
|
16 |
|
Other income (expense), net |
|
|
695 |
|
|
|
(39 |
) |
|
|
1,056 |
|
|
|
(266 |
) |
Loss before income taxes |
|
$ |
(17,355 |
) |
|
$ |
(21,498 |
) |
|
$ |
(81,582 |
) |
|
$ |
(84,671 |
) |
Tax (provision) benefit |
|
|
(7 |
) |
|
|
(2 |
) |
|
|
2 |
|
|
|
(15 |
) |
Net loss |
|
$ |
(17,362 |
) |
|
$ |
(21,500 |
) |
|
$ |
(81,580 |
) |
|
|
(84,686 |
) |
Net loss per share attributable to common stockholders-
|
|
$ |
(0.49 |
) |
|
$ |
(0.62 |
) |
|
$ |
(2.33 |
) |
|
$ |
(2.47 |
) |
Weighted-average shares of common stock outstanding-
|
|
|
35,262,083 |
|
|
|
34,596,227 |
|
|
|
35,075,924 |
|
|
|
34,351,274 |
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated Balance Sheet Data
(in thousands)
|
|
|
|
|
|
|
||
Cash, cash equivalents and marketable securities |
|
$ |
83,097 |
|
|
$ |
142,426 |
|
Working capital |
|
|
66,467 |
|
|
|
123,319 |
|
Total assets |
|
|
121,238 |
|
|
|
185,358 |
|
Total liabilities |
|
|
52,043 |
|
|
|
54,534 |
|
Accumulated deficit |
|
|
(261,665 |
) |
|
|
(180,085 |
) |
Total stockholders' equity |
|
|
69,195 |
|
|
|
130,824 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230310005054/en/
Investor:
Kendall Investor Relations
ctanzi@kendallir.com
617-914-0008
Media:
Email: media@frequencytx.com
Source:
FAQ
What are Frequency Therapeutics' fourth quarter 2022 financial results?
When will Frequency Therapeutics begin clinical trials for its MS therapy?
What led to the discontinuation of the FX-322 and FX-345 programs?
How much cash does Frequency Therapeutics have, and how far will it last?
What is Frequency Therapeutics' strategy following the FX-322 failure?
