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Subjects: EARNINGS, Conference Call, Webcast

Poxel Reports Financial Results for First Half 2020 and Provides a Corporate Update


POXEL SA (Euronext ? POXEL ? FR0012432516), a biopharmaceutical company focused on the development of innovative treatments for metabolic disorders, including type 2 diabetes and non-alcoholic steatohepatitis (NASH), today reported its financial results for the period ended June 30, 2020 and provided a corporate update.

"Through September, we accomplished several important corporate and clinical objectives, including strengthening our financial position through multiple financial sources including the drawdown of the IPF loan of EUR 10 million in March, a capital raise of EUR 17.7 million in May and a subsequent milestone payment of EUR 4 million during the third quarter from our partner Sumitomo Dainippon Pharma for the Imeglimin J-NDA submission," said Thomas Kuhn, CEO of Poxel. "We also continued to make solid progress with our development programs. We reported positive results from preclinical and clinical studies for PXL770 and are continuing to evaluate broader metabolic diseases, including chronic and rare diseases, for our AMPK activation and D-TZD platforms."

"From an execution standpoint in the context of the COVID-19 pandemic, I am very pleased to report that we recently initiated the Phase 2 trial for PXL065 in biopsy-proven NASH patients across multiple clinical sites in the U.S.," continued Thomas Kuhn, CEO of Poxel. "This is a streamlined development program with a single Phase 2 trial given the knowledge of pioglitazone, including data in NASH, and the 505(b)(2) regulatory pathway. Based on pioglitazone's known efficacy and safety results in NASH, its cardiovascular benefits combined with the exciting PXL065 results to-date, we believe that PXL065 has the potential to produce compelling results and become a leading oral drug candidate in development for this important unmet medical need."

"For the remainder of 2020, we expect several important upcoming milestones and events, including the PXL770 Phase 2a efficacy and safety results in approximately 100 likely-NASH patients around the end of September 2020, finalization of the Imeglimin Phase 3 plan in the U.S. by Metavant, additional preclinical data related to our AMPK and D-TZD platforms and presentations for Imeglimin, PXL770 and PXL065 at several scientific meetings and published results in peer-reviewed scientific journals," added Thomas Kuhn.

Clinical Development Updates

Imeglimin (Type 2 Diabetes)

PXL770 (NASH)

PXL065 (NASH)

Additional Development Opportunities

Corporate Highlights

First Half 2020 Financial Results (IFRS standards)

Revenue

Poxel reported revenues of EUR 6.4 million for the six months ended June 30, 2020, as compared to EUR 23.2 million during the corresponding period in 2019 (historical).

Revenue in the first half of 2020 includes an allocated portion of the EUR 36.0 million upfront payment received from Sumitomo Dainippon Pharma relating to the strategic corporate partnership announced on October 30, 2017, as well as the residual Imeglimin Phase 3 program costs in Japan incurred during the first half of 2020 that were re-invoiced to Sumitomo Dainippon Pharma. Both the allocated portion of the upfront payment and the re-invoiced costs of the Phase 3 trials of the TIMES program are recognized based on the accounting percentage of completion of this program, which has been completed. Revenue also includes a JPY 500 million (EUR 4.1 million, USD 4.5 million)4 milestone payment that Poxel is entitled to receive from Sumitomo Dainippon Pharma upon submission of the Imeglimin J-NDA, which was anticipated to occur in Q3 2020 and was recognized in Q2 2020 according to the IFRS15 accounting standard.

EUR (in thousands)

H1 2020

H1 2019

6 months

6 months

 

 

(adjusted)

(historic)

Roivant Agreement

13

155

155

Sumitomo Agreement

6,359

18,909

22,914

Other

-

100

100

Total revenues

6,372

19,164

23,169

The review procedures have been performed and the issuance of the report is in process.

Note: A change in the accounting policy of revenue recognition method was reported as part of the fiscal year 2019 financial statements reported in a press release dated February 12, 2020. This resulted in an adjustment to the Sumitomo Dainippon Pharma partnership revenue recognition for the previous years. For more information, please visit: https://www.poxelpharma.com/en_us/investors/news-events/press-releases/detail/144/poxel-reports-financial-update-for-cash-and-revenue-for-the

This change in accounting policy had no impact on Poxel's cash flows.

Income Statement

Poxel devotes the bulk of its resources to research and development (R&D) activities. R&D expenses totaled EUR 12.6 million for the first half of 2020, as compared to EUR 24.2 million for the corresponding period in 2019. R&D expenses for the first half of 2020 primarily reflect the clinical study costs incurred for PXL770 and PXL065, Poxel's two Phase 2 clinical-stage programs for the treatment of NASH. To a lesser extent, they also reflect the remainder of the R&D costs for the Phase 3 TIMES program and the regulatory costs incurred over the period for the preparation of the Imeglimin J-NDA submission that occurred in July 2020.

R&D expenses are net of the R&D Tax Credit (CIR) that resulted in an income of EUR 1.5 million for the first half of 2020 as compared to EUR 1.6 million for the corresponding period of 2019.

General and administrative expenses totaled EUR 5.9 million for the first half of 2020, as compared to EUR 4.9 million for the first half of 2019.

The financial income amounted to EUR 0.2 million for the first half of 2020, as compared to EUR 0.1 million for the first half of 2019, which primarily reflected the change in fair value of the IPF warrants and the interests attached to this debt.

The net result for the financial period ending June 30, 2020 was a net loss of EUR 12.1 million, as compared to a net loss of EUR 9.8 million in the corresponding period in 2019.

Condensed Income Statement

EUR (in thousands)

HY

HY

HY

 

2020

6 months

 

 

2019

6 months

(adjusted)

 

2019

6 months

(historic)

 

Revenue

6,372

19,164

23,169

Research and development expenses*

(12,580)

(24,164)

(24,164)

General and administrative expenses

(5,983)

(4,868)

(4,868)

Operating gain (loss)

(12,191)

(9,869)

(5,864)

Financial income (loss)

249

71

71

Income tax

(118)

-

-

Net income (loss)

(12,060)

(9,798)

(5,792)

*Net of R&D tax credit
The review procedures have been performed and the issuance of the report is in process.

Cash

As of June 30, 2020, cash and cash equivalents were EUR 46.0 million (USD 51.5 million), as compared to EUR 37.2 million (USD 41.8 million) at December 31, 2019. Cash and cash equivalents net of financial liabilities (excluding IFRS16 impacts and derivative debts) were EUR 29.0 million as of June 30, 2020, as compared to EUR 27.4 million at December 31, 2019. In September 2020, Poxel received a EUR 4.0 million milestone payment from its partner Sumitomo Dainippon Pharma for the Imeglimin J-NDA submission, which is not reflected in the June 30, 2020 cash update.

EUR (in thousands)

Q2 2020

Q4 2019

 

Cash

26,122

18,161

Cash equivalents

19,846

19,026

Total cash and cash equivalents*

45,968

37,187

* Cash and cash equivalents net of financial liabilities (excluding IFRS 16 impacts and derivative debts) were EUR 29.0 million at the end of Q2 2020 and EUR 27.4 million at the end of Q4 2019.

The review procedures have been performed and the issuance of the report is in process.

Planned Presentations and Participation at the Following Upcoming Events

Next Financial Press Release: Third Quarter 2020 Financial and Corporate Update is expected on October 20, 2020

About Poxel SA

Poxel is a dynamic biopharmaceutical company that uses its extensive expertise in developing innovative drugs for metabolic diseases, with a focus on type 2 diabetes and non-alcoholic steatohepatitis (NASH). In its mid-to-late stage pipeline, the Company is currently advancing three drug candidates as well as earlier-stage opportunities. Imeglimin, Poxel's first-in-class lead product, targets mitochondrial dysfunction. Poxel has a strategic partnership with Sumitomo Dainippon Pharma for Imeglimin in Japan, China, South Korea, Taiwan and nine other Southeast Asian countries. A Japanese new drug application (J-NDA) is under review by the Pharmaceuticals and Medical Devices Agency (PMDA) to request approval for the manufacturing and marketing of Imeglimin for the treatment of type 2 diabetes. Poxel also established a partnership with Roivant Sciences for Imeglimin's development and commercialization in countries outside of the partnership with Sumitomo Dainippon Pharma, including the U.S. and Europe. PXL770, a first-in-class direct adenosine monophosphate-activated protein kinase (AMPK) activator, is in a Phase 2a proof-of-concept program for the treatment of NASH. PXL770 could also have the potential to treat additional metabolic diseases. PXL065 (deuterium-stabilized R-pioglitazone), a MPC inhibitor, is in a single Phase 2 clinical trial for the treatment of NASH. Poxel also has additional earlier-stage programs from its AMPK activator and deuterated TZD platforms targeting chronic and rare metabolic diseases. The Company intends to generate further growth through strategic partnerships and pipeline development. Listed on Euronext Paris, Poxel is headquartered in Lyon, France, and has subsidiaries in Boston, MA, and Tokyo, Japan. For more information, please visit: www.poxelpharma.com.

In the context of the COVID-19 outbreak, which was declared a pandemic by the World Health Organization (WHO) on March 12, 2020, the Company is regularly reviewing the impact of the outbreak on its business.

As of the date of this press release, and based on publicly available information, the Company has not identified the occurrence of any material negative effect on its business due to the COVID-19 pandemic that remains unresolved. However, the Company anticipates that the COVID-19 pandemic could have further material negative impact on its business operations. The worldwide impact of COVID-19 may notably affect the Company's internal organization and efficiency, particularly in countries where it operates and where confinement measures are implemented by the authorities. In addition, COVID-19 may impact market conditions and the Company's ability to seek additional funding or enter into partnerships. Particularly, delays in the supply of drug substance or drug products, in the initiation or the timing of results of preclinical and/or clinical trials, as well as delays linked to the responsiveness of regulatory authorities could occur, which could potentially have an impact on the Company's development programs and partnered programs. The Company will continue to actively monitor the situation.

All statements other than statements of historical fact included in this press release about future events are subject to (i) change without notice and (ii) factors beyond the Company's control. These statements may include, without limitation, any statements preceded by, followed by or including words such as "target," "believe," "expect," "aim," "intend," "may," "anticipate," "estimate," "plan," "project," "will," "can have," "likely," "should," "would," "could" and other words and terms of similar meaning or the negative thereof. Forward-looking statements are subject to inherent risks and uncertainties beyond the Company's control that could cause the Company's actual results or performance to be materially different from the expected results or performance expressed or implied by such forward-looking statements.


1 Year noted is Fiscal Year from April 2021 to March 2022, which is Sumitomo Dainippon Pharma's Fiscal Year.
2 Converted at the exchange rates as of July 28, 2020.
3 Converted at the exchange rates as of June 30, 2020.


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