Humanigen Reports Fourth Quarter and Year-End 2020 Financial Results and Provides Corporate Update

Rhea-AI Summary

Humanigen, Inc. (HGEN) reported significant advancements and financial results for 2020, including a net loss of $89.5 million, largely attributed to increased R&D expenses of $72.7 million driven by its COVID-19 treatment, lenzilumab. The company completed a Phase 3 study enrolling 520 patients, with results expected by March 2021. 2021 goals include submitting an Emergency Use Authorization and a Marketing Authorization Application for lenzilumab. Humanigen raised $140 million through equity financing and expanded its leadership team during the year.

Positive

• Lenzilumab's Phase 3 study for COVID-19 fully enrolled 520 patients with positive early support from Mayo Clinic data.
• Successfully raised approximately $140 million in 2020, enhancing financial position.
• Uplisted to Nasdaq under the symbol HGEN, increasing visibility and credibility.
• Expanded leadership team with experienced executives, likely improving operational effectiveness.

Negative

• Incurred a net loss of $89.5 million for 2020, a 770% increase from 2019.
• R&D expenses surged by $70.1 million due to COVID-19 related trials, indicating high operational costs.
• Net cash used in operating activities was $69.9 million, highlighting liquidity concerns.

Humanigen, Inc. (Nasdaq: HGEN) (“Humanigen”), a clinical stage biopharmaceutical company focused on preventing and treating an immune hyper-response called ‘cytokine storm’ with its lead drug candidate, lenzilumab™, today reported financial results for the year ending December 31, 2020 and announced objectives for 2021.

“We are proud of all the advances Humanigen made in 2020, not just as a company, but as a key player in the development of an effective treatment for hospitalized COVID-19 patients,” said Cameron Durrant, MD, MBA, Chief Executive Officer, Humanigen. “We were able to take lenzilumab from the context of preventing and treating cytokine storm in other therapeutic categories and adapt it at unprecedented speed to respond to the COVID-19 pandemic. We also succeeded in achieving our ambitious fundraising goals, culminating with our uplisting to Nasdaq, and expanded our leadership team with a number of critical hires. We look forward to reporting our progress on the ambitious goals we’ve set for 2021 and, if granted an EUA, provide a therapeutic option for hospitalized COVID-19 patients.”

2020 Highlights Include:

Clinical Development – Lenzilumab for COVID-19

• Lenzilumab’s clinical development program was augmented in 2020 with the filing of an Emergency IND and initiation of a Phase 3 study in hospitalized COVID-19 patients. The study fully enrolled 520 patients, with topline data anticipated to be released before the end of March 2021.
• The results of the case-cohort study conducted by the Mayo Clinic were published in a peer-reviewed journal, showing that treatment with lenzilumab significantly reduced risk of mechanical ventilation or death and decreased length of hospital stay compared to patients treated with standard of care.
• Lenzilumab was selected by NIH for inclusion in its fully funded and sponsored, 200-patient ACTIV-5/Big Effect Trial comparing lenzilumab and remdesivir to remdesivir alone.
• In preparation for potential launch under EUA, Humanigen entered into several supply agreements with contract manufacturing organizations to supply bulk drug, fill/finish, and commercial packaging.

Clinical Development – CAR-T and Oncology

• Lenzilumab was administered to the first patient in the ZUMA-19 study, a CAR-T clinical collaboration with Kite (a Gilead company).
• A Phase 1 clinical trial of ifabotuzumab, Humanigen’s proprietary anti-EphA3 monoclonal antibody, in solid tumors completed enrollment.

Corporate

• The company raised approximately $140 million in net proceeds in two equity financings, and its stock began trading on Nasdaq under the symbol “HGEN.”
• Humanigen executed a Cooperative Research and Development Agreement (“CRADA”) with the Department of Defense (“DoD”) and the Biomedical Advanced Research and Development Authority (“BARDA”) for developing lenzilumab as a potential treatment for patients with COVID-19 in support of Operation Warp Speed.
• Humanigen licensed development and commercial rights of lenzilumab for South Korea and the Philippines to KPM Tech/Telcon.
• The company augmented its intellectual property portfolio, securing its first patent for the use of lenzilumab in CAR-T cell therapy.
• The company expanded the leadership team with experienced executives, including Dr. Dale Chappell, Chief Scientific Officer; Timothy Morris, Chief Operating Officer and Chief Financial Officer; Edward Jordan, Chief Commercial Officer; and Bob Atwill, Head of Asia-Pacific Region.

2021 Objectives Include:

• Submit an EUA for lenzilumab as a treatment for hospitalized and hypoxic patients with COVID-19 pending positive results from the Phase 3 clinical trial.
• Begin distribution of lenzilumab under the EUA, if granted.
• Submit, for conditional approval, a Marketing Authorization Application (“MAA”) for lenzilumab in COVID-19 to the European Medicines Agency for use in Europe.
• Submit, for conditional approval, a MAA for lenzilumab in COVID-19 to the Medicines and Healthcare Products Regulatory Agency for use in the United Kingdom.
• Submit a Biologics License Application (“BLA”) for lenzilumab in COVID-19 to FDA.
• Report results on the ongoing Phase 1b/2 ZUMA-19 CAR-T clinical trials with Kite (a Gilead company) and the completed Phase 1 study with ifabotuzumab.
• Initiate studies of lenzilumab in acute Graft versus Host Disease (“GvHD”) and chronic myelomonocytic leukemia (“CMML”).
• Secure partnerships to distribute lenzilumab in other regions outside the United States.

Year Ended December 31, 2020 Financial Results

Net loss for the year ended December 31, 2020 was $89.5 million or $2.42 per share as compared to $10.3 million or $0.46 per share for the year ended December 31, 2019. The increase in net loss for the year was largely due to an increase in Research and Development (“R&D”) expense of $70.1 million from $2.6 million for the year ended December 31, 2019 to $72.7 million for the year ended December 31, 2020.

The increase in R&D expense is primarily due to increased clinical trial and clinical material manufacturing costs related to the COVID-19 lenzilumab Phase 3 clinical trial. The company expects development costs to decrease in 2021 as a result of the completion of the COVID-19 Phase 3 clinical trial and related manufacturing costs, which will be classified as Cost of Goods Sold if an EUA is granted.

The increase in the net loss for the year ended December 31, 2020 was also due to an increase in Selling, General and Administrative (“SG&A”) expenses of $9.5 million from $6.3 million for the year ended December 31, 2019 to $15.8 million for the year ended December 31, 2020. The increase is primarily due to increased compensation costs, including stock-based compensation expense related to the hiring of functional heads in the third quarter of 2020, and an increase in commercial preparation activities as the company prepared for a potential launch of lenzilumab in 2021 under an EUA.

Three Months Ended December 31, 2020 Financial Results

Net loss for the three months ended December 31, 2020 was $32.3 million or $0.63 per share as compared to $2.0 million or $0.09 per share for the three months ended December 31, 2019. The increase in net loss for the period was largely due to an increase in R&D expense of $28.0 million from $0.5 million for the three months ended December 31, 2019 to $28.5 million for the three months ended December 31, 2020.

The increase in R&D expense is primarily due to increased clinical trial and clinical material manufacturing costs related to the COVID-19 Phase 3 clinical trial.

The increase in the net loss for the three months ended December 31, 2020 was also due to an increase in SG&A expenses of $2.9 million from $1.2 million for the three months ended December 31, 2019 to $4.1 million for the three months ended December 31, 2020. The increase in SG&A expense is primarily due to the items noted above for the year ended December 31, 2020.

Cash and Cash Equivalents

Net cash used in operating activities, net of balance sheet changes, was $69.9 million for the year ended December 31, 2020. During 2020, the company raised $139.8 million in net proceeds from its private placement in June and its underwritten public offering in September 2020. As of December 31, 2020, the company had cash and cash equivalents of $67.7 million.

A summary of key financial highlights as of and for the years ended December 31, 2020 and 2019 is as follows ($ in thousands):

		Twelve Months Ended December 31,								Increase/ (Decrease)
		2020				2019				Amount				%
Revenue:
License revenue		$	312			$	-			$	312			100
Total revenue			312				-				312			100
Operating expenses:
Research and development			72,713				2,616				70,097			2,680
Selling, general and administrative			15,797				6,328				9,469			150
Total operating expenses			88,510				8,944				79,566			890
Loss from operations			(88,198	)			(8,944	)			79,254			886
Other expense:
Interest expense			(1,336	)			(1,349	)			(13	)		(1	)
Other expense, net			(1	)			(1	)			-			-
Net loss		$	(89,535	)		$	(10,294	)		$	79,241			770
		Three Months Ended December 31,								Increase/ (Decrease)
		2020				2019				Amount				%
Revenue:
License revenue		$	312			$	-			$	312			100
Total revenue			312				-				312			100
Operating expenses:
Research and development			28,495				474				28,021			5,912
Selling, general and administrative			4,112				1,206				2,906			241
Total operating expenses			32,607				1,680				30,927			1,841
Loss from operations			(32,295	)			(1,680	)			30,615			1,822
Other expense:
Interest expense			-				(346	)			(346	)		(100	)
Other expense, net			-				-				-			-
Net loss		$	(32,295	)		$	(2,026	)		$	30,269			1,494

About Humanigen, Inc.

Humanigen, Inc. is developing its portfolio of clinical and pre-clinical therapies for the treatment of cancers and infectious diseases via its novel, cutting-edge GM-CSF neutralization and gene-knockout platforms. Humanigen believes that its GM-CSF neutralization and gene-editing platform technologies have the potential to reduce the inflammatory cascade associated with coronavirus infection. Humanigen’s immediate focus is to prevent or minimize the cytokine release syndrome that precedes severe lung dysfunction and ARDS in serious cases of SARS-CoV-2 infection. Humanigen is also focused on creating next-generation combinatory gene-edited CAR-T therapies using strategies to improve efficacy while employing GM-CSF gene knockout technologies to control toxicity. In addition, Humanigen is developing its own portfolio of proprietary first-in-class EphA3-CAR-T for various solid cancers and EMR1-CAR-T for various eosinophilic disorders. Humanigen is also exploring the effectiveness of its GM-CSF neutralization technologies (either through the use of lenzilumab as a neutralizing antibody or through GM-CSF gene knockout) in combination with other CAR-T, bispecific or natural killer (NK) T cell engaging immunotherapy treatments to break the efficacy/toxicity linkage, including to prevent and/or treat graft-versus-host disease (GvHD) in patients undergoing allogeneic hematopoietic stem cell transplantation (HSCT). Additionally, Humanigen and Kite, a Gilead Company, are evaluating lenzilumab in combination with Yescarta® (axicabtagene ciloleucel) in patients with relapsed or refractory large B-cell lymphoma in a clinical collaboration. For more information, visit www.humanigen.com and follow Humanigen on LinkedIn, Twitter and Facebook.

Humanigen Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements reflect management's current knowledge, assumptions, judgment and expectations regarding future performance or events. Although Humanigen management believes that the expectations reflected in such statements are reasonable, they give no assurance that such expectations will prove to be correct and you should be aware that actual events or results may differ materially from those contained in the forward-looking statements. Words such as "will," "expect," "intend," "plan," "potential," "possible," "goals," "accelerate," "continue," and similar expressions identify forward-looking statements, including, without limitation, statements regarding Humanigen’s 2021 objectives and beliefs relating to the technologies in Humanigen’s current pipeline. These forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, the timing and results of the Phase 3 clinical trial of lenzilumab, risks inherent in Humanigen’s lack of profitability and need for additional capital to grow Humanigen’s business; Humanigen’s dependence on partners to further the development of Humanigen’s product candidates; the uncertainties inherent in the development, attainment of the requisite regulatory approvals or authorization for emergency or broader patient use for the product candidate and launch of any new pharmaceutical product; the outcome of pending or future litigation; and the various risks and uncertainties described in the "Risk Factors" sections and elsewhere in the Humanigen's periodic and other filings with the Securities and Exchange Commission.

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You should not place undue reliance on any forward-looking statements, which speak only as of the date of this release. Humanigen undertakes no obligation to revise or update any forward-looking statements made in this press release to reflect events or circumstances after the date hereof or to reflect new information or the occurrence of unanticipated events, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210310005875/en/

FAQ

What were Humanigen's financial results for the year ending December 31, 2020?

Humanigen reported a net loss of $89.5 million for 2020, up from $10.3 million in 2019, primarily due to increased R&D expenses.

What are the objectives for Humanigen in 2021?

In 2021, Humanigen aims to submit an Emergency Use Authorization for lenzilumab and Marketing Authorization Applications in Europe and the UK.

What is the status of Humanigen's lenzilumab in clinical trials for COVID-19?

Lenzilumab's Phase 3 study for COVID-19 has fully enrolled 520 patients, with topline data expected before the end of March 2021.

How much did Humanigen raise in funding during 2020?

Humanigen raised approximately $140 million in net proceeds through two equity financings in 2020.

What are the implications of Humanigen's net loss for investors?

The significant net loss of $89.5 million raises concerns about ongoing operational costs and financial sustainability for investors.