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AC Immune Reports Q1 2019 Financial Results and Business Update
May 15, 2019



LAUSANNE, Switzerland, May 15, 2019 (GLOBE NEWSWIRE) -- AC Immune SA (NASDAQ: ACIU), a Swiss-based, biopharmaceutical company with a broad clinical-stage pipeline focused on pioneering Precision Medicine in neurodegenerative diseases, today announced financial results for the first quarter ended March 31, 2019.

Prof. Andrea Pfeifer, Ph.D., CEO of AC Immune, commented: “Our CHF 300 million cash position, funds operations through Q3 2023, allowing us to achieve multiple potentially transformative goals. This is thanks to SupraAntigen™ and Morphomer™, our proprietary discovery platforms, which already have generated multiple clinical and preclinical product-candidates and about CHF 300 million in partnering revenues for rights to our industry-leading therapeutic candidates to treat neurodegenerative diseases. We expect multiple developments in 2019, including initiation of a Phase 1 trial of small molecule Tau Morphomer™, as we advance our new partnership with Eli Lilly, and the interim Phase 1b data on ACI-24 to treat Alzheimer’s disease (AD) in Down syndrome.”

“Our key near- to medium-term focus is on developing our Tau therapies to treat early and moderate AD based on the growing body of clinical evidence that Tau pathology drives disease progression,” added Dr Pfeifer. “As the key opinion leaders have advised, we also are continuing testing of Abeta therapeutics, like ACI-24 and crenezumab, in carefully selected more homogeneous populations for early treatment and prevention, such as AD in Down syndrome patients and familial AD, respectively. The Roadmap to successful therapies for neurodegenerative diseases like Alzheimer’s requires that we treat earlier in the course of disease and select more homogenous populations using Precision Medicine and, as soon as practical, combination therapies.”

Financial Highlights Q1 2019

  • Enhanced cash position of more than CHF 300 million as of Q1 2019, following receipt of CHF 80 million upfront payment and USD 50 million convertible equity note as a result of license agreement with Eli Lilly, effective in January 2019.
  • Strategic R&D expenditures increased by CHF 1.5 million (+15%) supporting an ongoing ramp-up in R&D activities, primarily driven by investments in our neurodegenerative disease therapeutics development and discovery programs, most notably ACI-35.
  • IFRS net income of CHF 63.6 million and Non-IFRS income of CHF 60.7 million.

Research & Development Highlights Q1 2019

  • License agreement signed with Lilly to research and develop Tau aggregation inhibitor small molecules for the potential treatment of Alzheimer’s disease and other neurodegenerative diseases. The terms include upfront payment of CHF 80 million, USD 50 million convertible equity note, CHF 60 million in potential near-term milestones, as well as other milestones up to approximately CHF 1.68 billion, and tiered royalty payments in the low double digits.
  • Presented new data on alpha-synuclein PET Tracer at the Alzheimer’s and Parkinson’s Diseases Congress (AD/PD)™ Lisbon, Portugal, March 26–31, 2019.
  • New clinical data on AC Immune's novel next generation Tau PET-Tracer presented by licensing partner, Life Molecular Imaging, at AD/PD™.
  • Genentech, a member of Roche Group, commenced recruitment for a second Phase 2 trial of AC Immune’s anti-Tau monoclonal antibody, RG6100 (MTAAU9937A, RO7105705), in moderate AD, supplementing a separate Phase 2 trial to evaluate its efficacy and safety in participants with prodromal to mild AD.
  • Roche discontinued CREAD 1 and CREAD 2, Phase 3 studies of crenezumab and presented an interim analysis of CREAD studies at AD/PD™ on March 27, 2019.
  • The landmark Alzheimer's Prevention Initiative (API) trial of crenezumab, for which data are expected in Q1 of 2022, is continuing in cognitively healthy individuals in Colombia with an autosomal dominant mutation who are at high risk of developing familial AD.

Analysis of Financial Statements for the Three Months Ended March 31, 2019

Revenues

  • Revenues for the first quarter of 2019 increased CHF 73.6 million compared to 2018, driven by recognition of CHF 73.9 million from the right-of-use license and research and development activities. Revenues fluctuate as a result of payments associated with our collaborations with current and potentially new partners, the timing of milestone achievements and the size of each milestone payment.

Research & Development (R&D) Expenses

  • Total R&D expenditures increased CHF 1.5 million (+15%) for the three months ended March 31, 2019 compared to 2018.

General & Administrative (G&A) Expenses

  • For the three months ended March 31, 2019, G&A increased CHF 0.6 million (+22%) to CHF 3.3 million. Increase driven by rental and personnel expenses.

IFRS Income/(Loss) for the period

  • AC Immune had net income after taxes of CHF 63.6 million in 2019 compared with a net loss of CHF 11.6 million for the comparable period in 2018.

Balance Sheet

  • The Company had a total cash balance of CHF 302.1 million comprised of CHF 222.1 million in cash and cash equivalents and CHF 80.0 million in short-term financial assets. This compares to CHF 186.5 million as of December 31, 2018. The increase of CHF 115.6 million is principally due to the CHF 80 million upfront payment and USD 50 million convertible equity note with Lilly. Further details are available in our Statements of Cash flows on the accompanying Form 6-K.
  • The Company’s strong cash balance provides enough capital resources to progress through at least Q3 2023, not considering any incoming milestones.
  • The total shareholders’ equity position increased from December 31, 2018 to CHF 241.9 million from CHF 177.6 million. Further details are available in our corresponding Financial Statements filed on the accompanying Form 6-K.

About AC Immune

AC Immune SA is a Nasdaq-listed clinical-stage biopharmaceutical company, which aims to become a global leader in Precision Medicine for neurodegenerative diseases. The Company is utilizing two proprietary discovery platforms, SupraAntigen™ and Morphomer™, to design, discover and develop small molecule and biological therapeutics as well as diagnostic products intended to diagnose, prevent and modify neurodegenerative diseases caused by misfolding proteins. The Company's pipeline features nine therapeutic and three diagnostic product candidates, with five currently in clinical trials. It has collaborations with major pharmaceutical companies including Roche/Genentech, Lilly and Janssen.

For further information, please contact:

U.S. Investors
Lisa Sher
AC Immune Investor Relations
Phone: +1 970 987 26 54
E-mail: lisa.sher@acimmune.com
U.S. Media
Katie Gallagher
LaVoieHealthScience
Phone: +1 617 792 3937
E-mail: kgallagher@lavoiehealthscience.com
 
European Investors & Media
Chris Maggos
LifeSci Advisors
Phone: +41 79 367 6254
E-mail: chris@lifesciadvisors.com
 
 

Forward looking statements
This press release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than historical fact and may include statements that address future operating, financial or business performance or AC Immune’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” and other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements. These risks and uncertainties include those described under the captions “Item 3. Key Information—Risk Factors” and “Item 5. Operating and Financial Review and Prospects” in AC Immune’s Annual Report on Form 20-F and other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and AC Immune does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law. All forward-looking statements are qualified in their entirety by this cautionary statement.

 

Balance Sheets

  As of
March 31,
2019
  As of
December 31,

2018
 
in CHF thousands        
ASSETS        
         
Non-current assets        
Property, plant and equipment 3,570   3,324  
Right-of-use assets 2,082   -  
Long-term financial assets 304   304  
Total non-current assets 5,956   3,628  
         
Current assets        
Prepaid expenses 3,000   2,364  
Accrued income 813   3,667  
Finance receivable 201   199  
Other current receivables 784   236  
Short-term financial assets 80,000   30,000  
Cash and cash equivalents 222,138   156,462  
Total current assets 306,936   192,928  
Total assets 312,892   196,556  
         
SHAREHOLDERS’ EQUITY AND LIABILITIES        
         
Shareholders’ equity        
Share capital 1,361   1,351  
Share premium 298,259   298,149  
Accumulated losses (57,766 ) (121,877 )
Total shareholders’ equity 241,854   177,623  
         
Non-current liabilities        
Long-term financing obligation 225   186  
Long-term lease liabilities 1,666   -  
Long-term deferred income 2,628   -  
Net employee defined benefit liabilities 5,809   5,665  
Total non-current liabilities 10,328   5,851  
         
Current liabilities        
Trade and other payables 829   1,979  
Accrued expenses 8,800   10,420  
Short-term deferred income 3,546   351  
Convertible loan 46,740   -  
Liability related to conversion feature 43   -  
Short-term debt obligation 336   332  
Short-term lease liabilities 416   -  
Total current liabilities 60,710   13,082  
Total liabilities 71,038   18,933  
Total shareholders’ equity and liabilities 312,892   196,556  


 

Statement of Income/(Loss)

  For the Three Months
Ended March 31,
  2019     2018  
in CHF thousands except for share and per share data          
Revenue          
Contract revenue 75,042     1,458  
Total revenue 75,042     1,458  
     
     
Operating expenses    
Research & development expenses (11,592 )   (10,069 )
General & administrative expenses (3,294 )   (2,711 )
Total operating expenses (14,886 )   (12,780 )
           
Operating income/(loss) 60,156     (11,322 )
     
     
Finance expense, net (80 )   (281 )
Change in fair value of conversion feature 4,505     -  
Interest income 89     1  
Interest expense (1,096 )   (12 )
Finance result, net 3,418     (292 )
     
     
Income/(loss) before tax 63,574     (11,614 )
Income tax expense -     -  
Income/(loss) for the period 63,574     (11,614 )
     
     
Income/(loss) per share (EPS):    
Basic income/(loss) for the period attributable to equity holders 0.94     (0.20 )
Diluted income/(loss) for the period attributable to equity holders 0.91     (0.20 )

 

Statements of Comprehensive Income/(Loss)
 
For the Three Months
ended March 31,
  2019   2018  
   
in CHF thousands  
Income/(loss) for the period 63,574   (11,614 )
Other comprehensive income/(loss) not to be reclassified to income or
loss in subsequent periods (net of tax):
     
 Re-measurement losses on defined benefit plans -   -  
Total comprehensive income/(loss), net of tax 63,574   (11,614 )


 

Reconciliation of Income/(Loss) to Adjusted Income/(Loss) and
Earnings/(Loss) Per Share to Adjusted Earnings/(Loss) Per Share

  For the Three Months
Ended March 31,
  2019     2018  
           
in CHF thousands except for share and per share data          
Income/(Loss) 63,574     (11,614 )
Adjustments:          
Non-cash share-based payments (a) 584     602  
Foreign currency losses (b) 45     202  
Effective interest expense (c) 991     -  
Change in fair value of conversion feature (d) (4,505 )   -  
Adjusted Income/(Loss) 60,689     (10,810 )
           
Earnings/(Loss) per share – basic 0.94     (0.20 )
Earnings/(Loss) per share – diluted 0.91     (0.20 )
Adjustment to earnings/(loss) per share – basic (0.05 )   0.01  
Adjustment to earnings/(loss) per share – diluted (0.06 )   0.01  
Adjusted earnings/(loss) per share – basic 0.89     (0.19 )
Adjusted earnings/(loss) per share – diluted 0.85     (0.19 )
Weighted-average number of shares used to compute Adjusted
earnings/(loss) per share – basic
67,922,939     57,368,015  
Weighted-average number of shares used to compute Adjusted
earnings/(loss) per share – diluted
71,276,000     57,368,015  
  1. Reflects non-cash expenses associated with share-based compensation for equity awards issued to Directors, Management and employees of the Company. This expense reflects the awards’ fair value recognized for the portion of the equity award which is vesting over the period.
     
  2. Reflects foreign currency remeasurement gains and losses for the period, predominantly impacted by the change in the exchange rate between the US Dollar and the Swiss Franc.
     
  3. Effective interest expense for the period relates to the accretion of the Company’s convertible loan in accordance with the effective interest method.
     
  4. Change in fair value of conversion feature that is bifurcated from the convertible loan host debt with Lilly.

Adjustments for the three months ended March 31, 2019 and March 31, 2018 were CHF 2.9 million in net gains compared to CHF 0.8 million in net losses. The Company recorded CHF 0.6 million for the three months, respectively, for share-based compensation expenses. There were foreign currency remeasurement losses of CHF 45 thousand and CHF 0.2 million, respectively, predominantly related to the reduced foreign currency cash balance of the Company and reduced exposure to foreign currency fluctuations. The Company recorded CHF 1.0 million for amortization of effective interest for the three months ended March 31, 2019. Finally, the Company recognized a CHF 4.5 million gain for the change in fair value of the liability related to the conversion feature.

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Source: AC Immune SA