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Axcella Therapeutics Reports Third Quarter Financial Results and Provides Update on Long COVID, OHE and NASH Clinical Trials


Axcella Therapeutics (Nasdaq: AXLA), a clinical-stage biotechnology company pioneering a new approach to treat complex diseases using multi-targeted endogenous metabolic modulator (EMM) compositions, today announced financial results for the third quarter ended September 30, 2021 and provided a business update.

"The third quarter of 2021 was a time in which Axcella focused heavily on both execution and expansion," said Bill Hinshaw, President and Chief Executive Officer of Axcella. "From an executional standpoint, we opened dozens of clinical sites and rapidly increased patient screening activities in our recently initiated EMMPACT Phase 2b and EMMPOWER Phase 2 clinical trials. Additionally, based upon AXA1125's mechanistic underpinnings and emerging science implicating mitochondrial dysfunction as a core driver of Long COVID fatigue, we moved aggressively to advance a new program in this area and are prepared to conduct a highly efficient Phase 2a clinical trial with researchers at Oxford University that is set to begin in the weeks ahead. These accomplishments position us well for multiple potentially transformational catalysts ahead."

Recent Accomplishments and Developments

Financial Results

Cash Position: As of September 30, 2021, cash, cash equivalents, and marketable securities totaled $66.1 million, compared to $107.3 million as of December 31, 2020. Axcella continues to expect that its existing cash balance will be sufficient to meet the company's operating needs into the third quarter of 2022.

R&D Expenses: Research and development expenses for the quarter and nine months ended September 30, 2021 were $10.1 million and $30.7 million, respectively. Research and development expenses for the same periods ended September 30, 2020 were $7.5 million and $26.4 million. These increases are primarily the result of work related to the initiation of the company's EMMPOWER and EMMPACT clinical trials.

G&A Expenses: General and administrative expenses for the quarter and nine months ended September 30, 2021 were $4.8 million and $14.0 million, respectively. General and administrative expenses for the same periods ended September 30, 2020 were $4.2 million and $12.9 million. These increases are primarily the result of greater non-cash stock-based compensation expenses.

Net Loss: Net loss for the quarter and nine months ended September 30, 2021 was $15.6 million, or $0.41 per basic and diluted share, and $46.7 million, or $1.23 per basic and diluted share, respectively. This compares with a net loss of $12.4 million, or $0.34 per basic and diluted share, and $41.3 million, or $1.39 per basic and diluted share, for the quarter and nine months ended September 30, 2020.

Internet Posting of Information

Axcella uses its website, www.axcellatx.com, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD. Such disclosures will be included on the company's website in the "Investors and News" section. Accordingly, investors should monitor this portion of the company's website, in addition to following its press releases, SEC filings and public conference calls and webcasts.

About Axcella Therapeutics (Nasdaq: AXLA)

Axcella is a clinical-stage biotechnology company pioneering a new approach to treat complex diseases using endogenous metabolic modulator (EMM) compositions. The company's product candidates are comprised of EMMs and derivatives that are engineered in distinct combinations and ratios to reset multiple biological pathways, improve cellular energetics, and restore homeostasis. Axcella's pipeline includes lead therapeutic candidates in Phase 2 development for the reduction in risk of overt hepatic encephalopathy (OHE) recurrence, the treatment of Long COVID, and the treatment of non-alcoholic steatohepatitis (NASH). The company's unique model allows for the evaluation of its EMM compositions through non-IND clinical studies or IND clinical trials. For more information, please visit www.axcellatx.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, statements regarding the timing of initiation, enrollment and completion of the company's clinical trials, the potential for transformational catalysts, and the company's expected cash runway. The words "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "project," "potential," "continue," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this press release are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release, including, without limitation, those related to the potential impact of COVID-19 on the company's ability to conduct and complete its ongoing or planned clinical studies and clinical trials in a timely manner or at all due to patient or principal investigator recruitment or availability challenges, clinical trial site shutdowns or other interruptions and potential limitations on the quality, completeness and interpretability of data the company is able to collect in its clinical trials of AXA1665 and AXA1125, other potential impacts of COVID-19 on the company's business and financial results, including with respect to its ability to raise additional capital and operational disruptions or delays, changes in law, regulations, or interpretations and enforcement of regulatory guidance, whether data readouts support the company's clinical trial plans and timing, clinical trial design and target indications for AXA1665 and AXA1125, the clinical development and safety profile of AXA1665 and AXA1125 and their therapeutic potential, whether and when, if at all, the company's product candidates will receive approval from the FDA or other comparable regulatory authorities, potential competition from other biopharma companies in the company's target indications, and other risks identified in the company's SEC filings, including Axcella's Annual Report on Form 10-K, Quarterly Report on Form 10-Q and subsequent filings with the SEC. The company cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. Axcella disclaims any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Any forward-looking statements contained in this press release represent the company's views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date. The company explicitly disclaims any obligation to update any forward-looking statements.

Axcella Therapeutics

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

 

2021

 

2020

 

Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

26,091

 

 

$

71,590

 

 

Marketable securities

 

40,055

 

 

35,739

 

 

Other assets

 

2,675

 

 

2,263

 

 

Total assets

 

$

68,821

 

 

$

109,592

 

 

Liabilities and stockholders' equity:

 

 

 

 

 

Liabilities

 

$

33,260

 

 

$

34,211

 

 

Stockholders' equity

 

35,561

 

 

75,381

 

 

Total liabilities and stockholders' equity

 

$

68,821

 

 

$

109,592

 

 

 
 

Axcella Therapeutics

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

 

   

 

 

 

 

   

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

   

2021

 

2020

 

2021

 

2020

Operating expenses:

   

 

 

 

 

 

 

 

Research and development

   

$

10,130

 

 

$

7,541

 

 

$

30,668

 

 

$

26,441

 

General and administrative

   

4,773

 

 

4,184

 

 

13,975

 

 

12,928

 

Total operating expenses

   

14,903

 

 

11,725

 

 

44,643

 

 

39,369

 

Loss from operations

   

(14,903)

 

 

(11,725)

 

 

(44,643)

 

 

(39,369)

 

Other income (expense):

   

 

 

 

 

 

 

 

Interest income (expense) and other income (expense), net

   

(710)

 

 

(712)

 

 

(2,094)

 

 

(1,969)

 

Total other income (expense), net

   

(710)

 

 

(712)

 

 

(2,094)

 

 

(1,969)

 

Net loss

   

$

(15,613)

 

 

$

(12,437)

 

 

$

(46,737)

 

 

$

(41,338)

 

Net loss per share, basic and diluted

   

$

(0.41)

 

 

$

(0.34)

 

 

$

(1.23)

 

 

$

(1.39)

 

Weighted average common shares outstanding, basic and diluted

   

38,195,583

 

 

36,942,475

 

 

37,861,970

 

 

29,804,034

 

 


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