Omega Therapeutics Reports Second Quarter 2024 Financial Results and Highlights Recent Company Progress

Rhea-AI Summary

Omega Therapeutics (Nasdaq: OMGA) reported Q2 2024 financial results and company progress. Key highlights include:

1. Advancing MYCHELANGELO™ I trial for OTX-2002 in hepatocellular carcinoma, with plans to select recommended dose and initiate expansion cohorts in Q4 2024.

2. Presented preclinical data at ASGCT showing durable gene expression upregulation using epigenomic controllers.

3. Appointed Kaan Certel as Chief Business Officer and elected Richard N. Kender to Board of Directors.

4. Q2 2024 financials: $45.9M cash on hand, expected to fund operations into Q1 2025. R&D expenses decreased to $12.9M from $25.0M in Q2 2023. Net loss reduced to $16.3M from $29.7M in Q2 2023.

Positive

• Advanced MYCHELANGELO™ I trial, expecting to initiate expansion cohorts in Q4 2024
• Presented promising preclinical data demonstrating durable gene expression upregulation
• Reduced R&D expenses by $12.1M compared to Q2 2023
• Decreased net loss by $13.4M compared to Q2 2023

Negative

• Cash and cash equivalents of $45.9M only expected to fund operations into Q1 2025

Financial Analyst

Omega Therapeutics' Q2 2024 financials reveal a mixed picture. While the company has made progress in its clinical trials, its financial position remains challenging. The cash balance of $45.9 million is expected to fund operations only into Q1 2025, indicating a potential need for additional funding in the near future.

Positively, R&D expenses decreased by $12.1 million to $12.9 million and G&A expenses reduced by $0.8 million to $5.8 million. This led to a narrower net loss of $16.3 million, compared to $29.7 million in Q2 2023. However, the reduced spending might slow down development progress if not managed carefully.

Investors should monitor the company's cash burn rate and potential financing options closely, as well as progress in the MYCHELANGELO™ I trial, which could be a key value driver for the stock.

Biotechnology Research Analyst

Omega Therapeutics' progress with its MYCHELANGELO™ I trial for OTX-2002 in HCC is promising. The advancement to Cohort 6 at 0.2 mg/kg dose level suggests positive safety profile thus far. The planned expansion into monotherapy and combination settings in Q4 2024 could provide crucial efficacy data.

The preclinical data presented at ASGCT demonstrating durable upregulation of gene expression is scientifically significant. It validates the potential of their OMEGA platform to create a novel therapeutic modality targeting disease drivers across various therapeutic areas.

However, investors should note that while preclinical results are encouraging, clinical success is not guaranteed. The company's ability to translate these findings into effective therapies will be critical. The diverse pipeline, including programs in NSCLC and liver regeneration, offers multiple shots on goal but also requires substantial resources to develop.

• Advanced MYCHELANGELO™ I trial; Company expects to select recommended dose for expansion and initiate monotherapy and combination expansion cohorts in fourth quarter of 2024
• Reinforced diverse capabilities of the OMEGA platform at scientific meetings, including demonstration of precise and durable upregulation of gene expression
• Strengthened leadership team with appointment of Kaan Certel, Ph.D., as Chief Business Officer and election of Richard N. Kender to Board of Directors
  

CAMBRIDGE, Mass., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Omega Therapeutics, Inc. (Nasdaq: OMGA) (“Omega”), a clinical-stage biotechnology company pioneering the development of a new class of programmable epigenomic mRNA medicines, today announced financial results for the second quarter ended June 30, 2024, and highlighted recent Company progress.

“We are excited by the meaningful progress achieved to date with our MYCHELANGELO™ I trial, having generated clinical proof-of-platform data that validates the potential of epigenomic controllers as a new class of programmable mRNA therapeutics. As we approach identification of the recommended dose for expansion for OTX-2002, we look forward to sharing updated dose escalation data and initiating expansion cohorts in monotherapy and combination settings in the fourth quarter of this year,” said Mahesh Karande, President and Chief Executive Officer of Omega Therapeutics. “We are equally energized by the advances we have made with the OMEGA platform, including new preclinical data presented at this year’s ASGCT Annual Meeting showing durable and robust upregulation of gene expression with epigenomic controllers across a broad range of targets. We believe these achievements underscore the potential of our platform to create tremendous value through its ability to prospectively engineer epigenomic controllers with diverse and meaningful therapeutic applications across nearly any human disease.”

Recent Highlights and Key Anticipated Milestones

Development Pipeline and Platform

• Progressed dose escalation portion of Phase 1/2 MYCHELANGELO™ I clinical trial evaluating OTX-2002 in patients with hepatocellular carcinoma (HCC): Made steady progress towards identifying the recommended dose for expansion (RDE) of OTX-2002, with patient enrollment ongoing in Cohort 6 at the 0.2 mg/kg dose level across sites in the U.S. and Asia. The Company expects to report updated clinical data and is planning for expansion into monotherapy and combination settings in the fourth quarter of 2024.
• Presented new preclinical data demonstrating durable upregulation of gene expression at the American Society of Gene and Cell Therapy (ASGCT) 27th Annual Meeting: Data demonstrated durable and robust upregulation of gene expression across a diverse set of gene types and regulatory mechanisms, including turning on inactive genes, augmenting expression of genes with existing but low baseline expression levels, and increasing expression of poised genes that are typically only responsive to certain external stimuli. Additional data showed reversible downregulation and multiplexed upregulation of gene expression. These findings further demonstrate the OMEGA platform’s potential to engineer an entirely novel therapeutic modality to directly target key drivers of disease across therapeutic areas.
• Continued to advance and enhance the OMEGA platform: The Company is evaluating multiple epigenomic controller programs in preclinical studies, including OTX-2101 for non-small cell lung cancer (NSCLC), an HNF4A program in liver regeneration, and development of an epigenomic controller for the management of obesity in collaboration with Novo Nordisk. Core work on platform biology, epigenomic controller design, and characterization of LNP delivery to the lung and other high-value tissues continues to progress.
  

Corporate

• Strengthened leadership team with appointment of Kaan Certel, Ph.D., as Chief Business Officer and election of Richard N. Kender to Board of Directors: Dr. Certel is a seasoned biopharmaceutical leader and is responsible for Omega’s global business development activities, including strategic partnerships. Mr. Kender brings extensive expertise across corporate finance, business development and corporate licensing, among other roles he held during his career in the pharmaceutical industry, including 35 years spent at Merck & Co., Inc.
  

Second Quarter 2024 Financial Results

As of June 30, 2024, the Company had cash and cash equivalents totaling $45.9 million, which is expected to fund operations into Q1 2025.

Research and development (R&D) expenses for the second quarter of 2024 were $12.9 million, compared to $25.0 million for the second quarter of 2023. The $12.1 million decrease in R&D expenses was primarily driven by a decrease in external research costs, contract manufacturing costs, and personnel-related expenses.

General and administrative (G&A) expenses for the second quarter of 2024 were $5.8 million, compared to $6.6 million for the second quarter of 2023. The $0.8 million decrease in G&A expenses was primarily driven by a decrease in personnel-related expenses and consulting and professional fees.

Net loss for the second quarter of 2024 was $16.3 million, compared to $29.7 million for the second quarter of 2023. The decrease in net loss was driven predominantly by the decrease in R&D expenses.

About Omega Therapeutics

Omega Therapeutics is a clinical-stage biotechnology company pioneering the development of a new class of programmable epigenomic mRNA medicines to treat or cure a broad range of diseases. By pre-transcriptionally modulating gene expression, Omega’s approach enables precision epigenomic control of nearly all human genes, including historically undruggable and difficult-to-treat targets, without altering native nucleic acid sequences. Founded in 2017 by Flagship Pioneering following breakthrough research by world-renowned experts in the field of epigenetics, Omega is led by a seasoned and accomplished leadership team with a track record of innovation and operational excellence. The Company is committed to revolutionizing genomic medicine and has a pipeline of therapeutic candidates derived from its OMEGA platform spanning oncology, regenerative medicine, and multigenic diseases including inflammatory and cardiometabolic conditions.

For more information, visit omegatherapeutics.com, or follow us on X and LinkedIn.
        
About the OMEGA Platform

The OMEGA platform leverages the Company’s deep understanding of gene regulation, genomic architecture and epigenetic mechanisms to design programmable epigenomic mRNA medicines that precisely target and modulate gene expression at the pre-transcriptional level. Combining world-class data science capabilities with rational drug design and customized delivery, the OMEGA platform enables control of fundamental epigenetic processes and reprogramming of cellular physiology to address the root cause of disease. Omega’s modular and programmable mRNA medicines, called epigenomic controllers, target specific genomic loci within insulated genomic domains with high specificity to durably tune single or multiple genes to treat and cure diseases through unprecedented precision epigenomic control.

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 timing, progress and design of our ongoing Phase 1/2 MYCHELANGELO^TM I clinical trial and our preclinical studies, as well as the timing of announcements of data related thereto; the potential of the OMEGA platform to engineer programmable epigenomic mRNA therapeutics that successfully regulate gene expression by targeting insulated genomic domains; expectations surrounding the potential of our product candidates, including OTX-2002; expectations regarding our pipeline, including trial design, initiation of preclinical studies and advancement of multiple preclinical development programs in oncology, regenerative medicine, and multigenic diseases including inflammatory and cardiometabolic conditions; potential franchise opportunities; our anticipated cash runway into the first quarter of 2025; and upcoming events and presentations. 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 novel technology on which our product candidates are based makes it difficult to predict the time and cost of preclinical and clinical development and subsequently obtaining regulatory approval, if at all; the substantial development and regulatory risks associated with epigenomic controllers due to the novel and unprecedented nature of this new category of medicines; our limited operating history; the incurrence of significant losses and the fact that we expect to continue to incur significant additional losses for the foreseeable future; our need for substantial additional financing; volatility in capital markets and general economic conditions; our investments in research and development efforts that further enhance the OMEGA platform, and their impact on our results; uncertainty regarding preclinical development, especially for a new class of medicines such as epigenomic controllers; potential delays in and unforeseen costs arising from our clinical trials; the fact that our product candidates may be associated with serious adverse events, undesirable side effects or have other properties that could halt their regulatory development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences; difficulties manufacturing the novel technology on which our epigenomic controller candidates are based; our ability to adapt to rapid and significant technological change; our reliance on third parties for the manufacture of materials; our ability to successfully acquire and establish our own manufacturing facilities and infrastructure; our reliance on a limited number of suppliers for lipid excipients used in our product candidates; our ability to advance our product candidates to clinical development; and our ability to obtain, maintain, enforce and adequately protect our intellectual property rights. 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, 2024, 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.

CONTACT
Investor contact:
Eva Stroynowski
617.949.4370
estroynowski@omegatx.com

Media contact:
Jason Braco, LifeSci Communications
646.751.4361
jbraco@lifescicomms.com

Omega Therapeutics, Inc. Consolidated statements of operations and comprehensive loss (Unaudited, In thousands except share and per share data)
	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
Collaboration revenue	$	2,134			$	759			$	4,494			$	1,274
Operating expenses:
Research and development		12,940				25,042				28,355				45,132
General and administrative		5,774				6,557				13,170				12,800
Total operating expenses		18,714				31,599				41,525				57,932
Loss from operations		(16,580	)			(30,840	)			(37,031	)			(56,658	)
Other income (expense), net:
Interest income, net		299				957				630				1,639
Other income (expense), net		(24	)			196				(33	)			53
Total other income, net		275				1,153				597				1,692
Net loss	$	(16,305	)		$	(29,687	)		$	(36,434	)		$	(54,966	)
Net loss per common stock attributable to common stockholders, basic and diluted	$	(0.30	)		$	(0.54	)		$	(0.66	)		$	(1.04	)
Weighted-average common stock used in net loss per share attributable to common stockholders, basic and diluted		55,150,507				55,071,469				55,152,746				52,861,655
Comprehensive loss:
Net loss	$	(16,305	)		$	(29,687	)		$	(36,434	)		$	(54,966	)
Other comprehensive income (loss):
Unrealized gain on marketable securities		—				57				14				308
Comprehensive loss	$	(16,305	)		$	(29,630	)		$	(36,420	)		$	(54,658	)

Omega Therapeutics, Inc. Condensed Consolidated Balance Sheets (Unaudited, In thousands)
	June 30,				December 31,
	2024				2023
Assets
Cash and cash equivalents	$	45,852			$	68,443
Marketable securities		—				4,986
Other assets		122,373				130,937
Total assets	$	168,225			$	204,366
Liabilities and stockholders’ equity
Liabilities	$	141,963			$	146,350
Stockholders’ equity		26,262				58,016
Total liabilities and stockholders’ equity	$	168,225			$	204,366

FAQ

What are the key financial results for Omega Therapeutics (OMGA) in Q2 2024?

Omega Therapeutics reported $45.9M in cash and cash equivalents, R&D expenses of $12.9M (down from $25.0M in Q2 2023), and a net loss of $16.3M (down from $29.7M in Q2 2023).

When does Omega Therapeutics (OMGA) expect to initiate expansion cohorts for the MYCHELANGELO™ I trial?

Omega Therapeutics expects to initiate monotherapy and combination expansion cohorts for the MYCHELANGELO™ I trial in the fourth quarter of 2024.

What new preclinical data did Omega Therapeutics (OMGA) present at the ASGCT Annual Meeting?

Omega Therapeutics presented data demonstrating durable and robust upregulation of gene expression across diverse gene types and regulatory mechanisms using epigenomic controllers.

How long is Omega Therapeutics' (OMGA) current cash expected to fund operations?

Omega Therapeutics' current cash of $45.9 million is expected to fund operations into the first quarter of 2025.