Overview

Achaogen (AKAO) is a late-stage biopharmaceutical company passionately committed to the discovery, development, and commercialization of novel antibacterial treatments against multi-drug resistant (“MDR”) gram-negative infections. Achaogen is researching and developing plazomicin, its lead product candidate, for the treatment of serious bacterial infections, including complicated urinary tract infection (“cUTI”), blood stream infections and other infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (“CRE”). In 2013, the Centers for Disease Control and Prevention identified CRE as a “nightmare bacteria” and an immediate public health threat that requires “urgent and aggressive action” and in 2017 the World Health Organization identified CRE as a Global Priority 1 Pathogen: Critical Need for Research and Development of New Antibiotics.

On December 12, 2016, the company announced positive data from its two Phase 3 clinical trials for plazomicin. The first study, a Phase 3 trial of plazomicin for the treatment of patients with cUTI and acute pyelonephritis (“AP”), entitled EPIC (Evaluating Plazomicin In cUTI), is expected to serve as a single pivotal study supporting a new drug application (“NDA”) for plazomicin in the United States. The Phase 3 EPIC trial is a randomized, double blind, active controlled study in patients with cUTI and AP and allowed broad enrollment of patients with gram-negative infections. The company reached agreement with the U.S. Food and Drug Administration (“FDA”) that this trial comparing plazomicin to meropenem with a 15% non-inferiority margin is acceptable as the single study required for potential approval. The first patient was enrolled in the Phase 3 EPIC trial in January 2016 and enrollment was closed in August 2016 with 609 patients.

In the EPIC trial, plazomicin successfully met or exceeded the objective of non-inferiority compared to meropenem for the FDA-specified primary efficacy endpoints, and achieved superiority for the primary efficacy endpoints specified by the European Medicines Agency (“EMA”). Results for the FDA pre-specified composite endpoint of clinical cure and microbiological eradication in the microbiological modified intent-to-treat (“mMITT”) population at Day 5 achieved statistical non-inferiority, and Test-of-Cure (Day ~17) achieved statistical superiority. Results for EMA-specified endpoints of microbiological eradication at the test-of-cure visit achieved statistical superiority in both the mMITT and microbiologically evaluable (“ME”) populations.

Plazomicin was generally well tolerated with no new safety concerns identified in the EPIC trial. As previously disclosed, total treatment emergent adverse events (“TEAEs”) related to renal function were reported in 3.6% and 1.3% of patients in the plazomicin and meropenem groups, respectively. TEAEs related to cochlear or vestibular function were reported in a single patient in each of the plazomicin and meropenem treatment groups. Both events were considered mild and resolved completely.

The second study, its Phase 3 CARE (Combating Antibiotic Resistant Enterobacteriaceae) trial was a resistant pathogen trial designed to evaluate the efficacy and safety of plazomicin in patients with serious bacterial infections due to CRE. The company closed enrollment in the CARE study in August 2016 with 69 patients, comprised of 39 patients enrolled in Cohort 1, comparing plazomicin to colistin-based therapy in patients with bloodstream infections or pneumonia due to CRE, and 30 patients in Cohort 2, a single arm cohort of plazomicin treatment in patients with serious infections due to CRE. In Cohort 1 of the CARE trial, a lower rate of mortality or serious disease-related complications was observed for plazomicin compared with colistin therapy.

The safety profile of plazomicin was favorable to that of colistin in critically ill patients in the CARE trial. As previously disclosed, study drug-related TEAEs related to renal function were reported in 16.7% and 38.1% of patients in the plazomicin and colistin groups, respectively. No TEAEs related to cochlear or vestibular function were reported in either group. However, due to the clinical status of patients enrolled in the trial who were frequently ventilated and unconscious, planned assessments of hearing and tinnitus were not possible for many of the patients.

The company plan to submit an NDA, which will include data from both the EPIC and CARE Phase 3 clinical trials, to the FDA in the second half of 2017, with a planned commercial launch of plazomicin in the United States in 2018, if its NDA is approved. The company also plan to submit a Marketing Authorization Application to the EMA for plazomicin in 2018.

On May 23, 2017, the company announced that, based on the results of the CARE study, the FDA granted Breakthrough Therapy designation for plazomicin for the treatment of bloodstream infections caused by certain Enterobacteriaceae, Klebsiella pneumoniae and Enterobacter aerogenes. Breakthrough Therapy designation is granted by the FDA to treat a serious condition and where preliminary clinical evidence demonstrates the drug may have substantial improvement on one or more clinically significant endpoints over available therapy. Breakthrough Therapy is intended to expedite the development and review of new therapies to treat such conditions. In 2012, the FDA granted fast-track designation for the development and regulatory review of plazomicin to treat serious and life-threatening CRE infections. In 2014, plazomicin received Qualified Infectious Disease Product (“QIDP”) designation from the FDA. The QIDP designation was created by the Generating Antibiotic Incentives Now (“GAIN”) Act, which was part of the FDA Safety and Innovation Act and provides certain incentives for the development of new antibiotics, including priority review and an additional five years of market exclusivity. Achaogen has global commercialization rights to plazomicin, which has patent protection in the United States estimated from 2030 to 2032.

The company recently announced its orally-available antibacterial candidate, C-Scape, a combination of an approved β-lactam and an approved β-lactamase inhibitor. The company believe that C-Scape has the potential to rapidly address a serious unmet need for an effective oral treatment for patients with cUTI, including AP, caused by ESBL-producing Enterobacteriaceae. The company began a Phase 1 study in the second quarter of 2017. In the event the Phase 1 trial is successful, the company intend to initiate a single pivotal Phase 3 study in patients with cUTI, including AP, who are suitable for treatment with oral antibiotics, by the first half of 2018. The company also have a program to discover and develop small molecule inhibitors of LpxC (an enzyme essential for the synthesis of the outer membrane of gram-negative bacteria), which could be ready to file an investigational new drug application (“IND”) as early as 2018. The company's LpxC program is funded in part with an award from the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB-X) of $3.2 million, with potential funding of up to $11.4 million, and a contract from the National Institute of Allergy and Infectious Diseases for up to $5.3 million. The company's therapeutic antibody program utilizes a built-for-purpose discovery platform to identify and develop monoclonal antibodies for the treatment of MDR bacterial infections and other significant unmet medical needs. To further support that program, the company entered into a research agreement with the Bill & Melinda Gates Foundation (the “Gates Foundation”) to discover drug candidates against gram-negative bacterial pathogens intended to prevent neonatal sepsis (the “Grant Agreement”). Pursuant to the Grant Agreement, the Gates Foundation awarded up to $10.5 million in grant funding over a three-year research term. Achaogen has other programs in early stages of research targeting MDR gram-negative bacterial infections.

Since its inception, Achaogen has financed its operations with the proceeds from its initial public offering (“IPO”) of its common stock, proceeds from the underwritten public offering of its common stock, proceeds from sales of its common stock through the use of its at-the-market (“ATM”) equity offering program, funding under its contracts with a non-profit foundation and government agencies, private placements of its equity securities and certain debt-related financing arrangements.

The company's plazomicin program is funded in part with a contract from BARDA. The company's other programs are currently funded primarily with company funds, although, in 2015, the company received a contract from the National Institute of Allergy and Infectious Diseases (“NIAID”) that has total committed funding of $5.3 million. Historically, its preclinical programs have received funding support from organizations in addition to the National Institutes of Health, such as the U.S. Department of Defense and The Wellcome Trust, a global charitable foundation. The company intend to continue to seek further collaborations with government agencies, non-profit foundations, and other research and development funding organizations to support its discovery efforts and advance the product candidates in its pipeline.

On March 17, 2014, the company completed its IPO of common stock. The company sold 6,900,000 shares of its common stock, which included 900,000 shares issued as a result of the underwriters exercising their over-allotment option in full. The company received cash proceeds of approximately $73.9 million from the IPO, net of underwriting commissions and related expenses.

On April 7, 2015, the company entered into the Sales Agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), pursuant to which the company may issue and sell shares of its common stock having aggregate sales proceeds of up to $30.0 million from time to time through an ATM equity offering program under which Cowen acts as sales agent. As of June 30, 2017, the company had sold 1,105,549 shares under the Sales Agreement at an average price of $4.82 per share and the company received aggregate cash proceeds of $5.1 million, after deducting the sales commissions and offering expenses.

On August 5, 2015, the company entered into a loan and security agreement with Solar Capital Ltd., pursuant to which Solar Capital Ltd. agreed to make available to it term loans with an aggregate principal amount of up to $25.0 million, $15.0 million of which was provided to it on August 5, 2015 and $10.0 million of which was provided to it on June 20, 2016.

On May 26, 2016, BARDA exercised an additional option ("Option 3") under its existing contract, and the company were awarded an additional $20.0 million in contract funding. Option 3 also includes a no-cost extension of the period of performance for Option 1 to September 20, 2016, under the contract to support its Phase 3 EPIC trial of plazomicin. The funding from Option 3 is focused on the Phase 3 pivotal clinical trial of plazomicin, the EPIC study, in cUTI. In April 2017, BARDA modified Option 1 to allow for an additional $0.5 million of contract funding. This brings the total committed funding under the contract to $124.3 million.

On June 3, 2016, the company sold 7,999,996 shares of common stock and warrants to purchase 1,999,999 shares of common stock pursuant to a Securities Purchase Agreement (“Purchase Agreement”) for aggregate gross proceeds of $25.4 million and aggregate net proceeds of $25.1 million, after deducting the issuance costs, in a private placement financing transaction (the "Private Placement"). The warrants have an exercise price of $3.66 and are exercisable up to five years from the date of issuance.

On December 19, 2016, the company completed an underwritten public offering of common stock, which resulted in the sale of 7,475,000 shares, at a price of $13.50 per share to the public, including the full exercise of the underwriters’ option to purchase an additional 975,000 shares of common stock. The company received net proceeds from the offering of $94.6 million, after deducting the underwriting discounts and commissions and estimated offering expenses.

On May 4, 2017, the company entered into the Grant Agreement with the Gates Foundation and were awarded up to approximately $10.5 million in grant funding over a three-year research term, of which approximately $3.2 million of committed funding was received in May 2017 (the “Advance Funds”). Concurrently with the Grant Agreement, the company entered into a Common Stock Purchase Agreement with the Gates Foundation, pursuant to which the company agreed to sell 407,331 shares of its contingently redeemable common stock to the Gates Foundation in a private placement at a purchase price per share equal to $24.55, for gross proceeds to it of $10.0 million (“Gates Investment”). In connection with the Grant Agreement and Gates Investment, the company entered into a strategic relationship with the Gates Foundation (the “Letter Agreement”). Under the terms of the Letter Agreement, the Gates Investment and Advanced Funds may only be used to conduct mutually agreed upon work, including the scale up of its antibody platform technology to launch a product intended to prevent neonatal sepsis (the “NSP”). Pursuant to the Letter Agreement, the company agreed to make the NSP available and accessible in certain developing countries and to grant the Gates Foundation a non-exclusive license to commercialize selected drug candidates in certain developing countries, which may only be exercised in the event of certain defaults as described in the Letter Agreement (the “Global Access Commitments”). The Global Access Commitments will continue in effect until the earlier of 25 years from the closing of the Gates Investment or 7 years following the termination of all funding provided by the Gates Foundation; provided, that the Global Access Commitments will continue for any products or services developed with funding provided by the Gates Foundation which continue to be developed or available in certain developing countries.

On May 31, 2017, the company completed an underwritten public offering of 5,750,000 shares of its common stock at a price to the public of $22.50 per share, including the closing of the full exercise of the underwriters’ option to purchase an additional 750,000 shares of common stock on June 9, 2017. The company received net proceeds from the offering of $121.2 million, after deducting the underwriting discounts and commissions and offering expenses.

Achaogen has never been profitable and have incurred net losses in each year since the commencement of its operations. Substantially all of its net losses have resulted from costs incurred in connection with its research and development programs and associated general and administrative costs. The company expect to incur substantial losses from operations in the foreseeable future as the company advance plazomicin and other product candidates through preclinical and clinical development, seek regulatory approval, and prepare for, if approved, commercialization. Management expects that, based on its current operating plans, its existing cash, cash equivalents and short-term investments, will be sufficient to fund its current planned operations for at least the next twelve months from the issuance of these financial statements. The company will be required to obtain further funding through public or private equity offerings, debt financings, collaboration and licensing arrangements or other sources to invest in the commercial launch of plazomicin and continued progress with its research and development efforts. Adequate additional financing may not be available to it on acceptable terms, or at all. The company's failure to raise capital as and when needed would have a negative impact on its financial condition and its ability to pursue its business strategy. The company perform all of its manufacturing in conjunction with third parties. Additionally, the company currently utilize third-party clinical research organizations (“CROs”) to carry out its clinical development and are building a sales organization. The company will need substantial additional funding to support its operating activities and adequate funding may not be available to it on acceptable terms, or at all.

Research and Development Pipeline

The following table summarizes the status of plazomicin and its other preclinical and research programs:

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Tags: US:AKAO
Created by Wilton Risenhoover on 2019/09/01 16:04
     
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