OREANDA-NEWS. Nabriva Therapeutics AG (NASDAQ:NBRV), a clinical stage biopharmaceutical company engaged in the research and development of novel anti-infective agents to treat serious infections, with a focus on the pleuromutilin class of antibiotics, today reported its financial results for the three and six months ended June 30, 2016.

“We are pleased with the continued progress of our clinical development programs in the second quarter this year, in particular with the initiation of our second, global registrational trial, Lefamulin Evaluation Against Pneumonia (LEAP) 2 in April,” said Dr. Colin Broom, Chief Executive Officer of Nabriva. “In addition, we remain on track for achieving 60% enrollment in LEAP 1 by year-end. We expect top-line data to be available from both trials in the second half of 2017.   We continue to forecast that our current cash balances will be sufficient to enable us to fund our operations at least through the receipt of our top-line phase 3 clinical trial data readout from LEAP 1 and LEAP 2.”

Recent Corporate and Operational Highlights

  • Nabriva presented data at the American Society of Microbiology Microbe 2016 Conference in June 2016, detailing in vitro activity of lefamulin against macrolide-susceptible and macrolide-resistant Mycoplasma pneumoniae from the United States, Europe and China.
  • Nabriva initiated its second global, registrational trial, Lefamulin Evaluation Against Pneumonia (LEAP) 2, in April 2016. 
  • Gary Sender was appointed as Chief Financial Officer on May 2, 2016.

FINANCIAL HIGHLIGHTS

  • For the three months ended June 30, 2016, Nabriva reported a net loss of $12.0 million or $5.64 per share, compared to a net loss of $5.9 million and $9.03 per share for the three months ended June 30, 2015. 
  • Research and development expense increased by $5.0 million from $4.8 million for the three months ended June 30, 2015 to $9.8 million for the three months ended June 30, 2016. The increase was primarily due to higher costs related to our Phase 3 clinical trials of lefamulin.
  • General and administrative expense increased by $1.8 million from $1.6 million for the three months ended June 30, 2015 to $3.4 million for the three months ended June 30, 2016. This increase was primarily due to an increase in costs related to the addition of employees in the United States (including non-cash compensation expense), as well as an increase in professional service fees and other general operating expenses related to operating as a public company.
  • As of June 30, 2016, Nabriva had $86.6 million in cash, cash equivalents and other investments on the balance sheet compared to $111.4 million as of December 31, 2015.

FINANCIAL REVIEW

Overview

We are a clinical stage biopharmaceutical company engaged in the research and development of novel anti-infective agents to treat serious infections, with a focus on the pleuromutilin class of antibiotics. We are developing our lead product candidate, lefamulin, to be the first pleuromutilin antibiotic for systemic administration in humans. We are developing both intravenous, or IV, and oral formulations of lefamulin for the treatment of community-acquired bacterial pneumonia, or CABP, and intend to develop lefamulin for additional indications other than pneumonia. We initiated two pivotal, international Phase 3 clinical trials of lefamulin for the treatment of moderate to severe CABP. These are the first clinical trials we have conducted with lefamulin for the treatment of CABP. We initiated the first of these trials in September 2015 and the second trial in April 2016. Based on our estimates regarding patient enrollment, we expect to have top-line data available for both trials in the second half of 2017. If the results of these trials are favorable, including achievement of the primary efficacy endpoints of the trials, we expect to submit applications for marketing approval for lefamulin for the treatment of CABP in both the United States and Europe in 2018.

We expect to continue to incur significant expenses and increasing operating losses for at least the next several years. We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue the development of and potentially seek marketing approval for lefamulin and, possibly, other product candidates and continue our research activities. Our expenses will increase if we suffer any delays in our Phase 3 clinical program for lefamulin for CABP, including delays in enrollment of patients. If we obtain marketing approval for lefamulin or any other product candidate that we develop, we expect to incur significant commercialization expenses related to product sales, marketing, distribution and manufacturing. Furthermore, we expect to continue to incur additional costs associated with operating as a public company.

Based on our current plans, we do not expect to generate significant revenue unless and until we obtain marketing approval for, and commercialize, lefamulin. We do not expect to obtain marketing approval before 2018, if at all. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization effort.

Other Income

Other income increased by $0.9 million from $0.9 million for the three months ended June 30, 2015 to $1.8 million for the three months ended June 30, 2016. Other income increased by $1.7 million from $1.5 million for the six months ended June 30, 2015 to $3.2 million for the six months ended June 30, 2016. The increases in both the three and six month periods were primarily due to $0.9 million and $1.7 million increases, respectively, in anticipated grant income from research premiums provided by the Austrian government as a result of higher applicable research and development expenses in the respective periods compared to the same periods in 2015.

Research and Development Expenses

Research and development expenses increased by $5.0 million from $4.8 million for the three months ended June 30, 2015 to $9.8 million for the three months ended June 30, 2016. For the six months ended June 30, 2016 research and development expense was $22.8 million, a 200.0% increase from the $7.6 million of research and development expense during the same six-month period in 2015. The increases in both the three and six month periods were primarily due to higher costs related to our Phase 3 clinical trials of lefamulin. Direct costs for our other programs and initiatives were relatively limited during both of the three and six month periods. Indirect costs related to research and development increased in both the three and six month periods ended June 30, 2016 compared to the same periods in 2015 primarily due to the addition of clinical employees in the United States.

General and Administrative Expenses

General and administrative expense increased by $1.8 million from $1.6 million for the three months ended June 30, 2015 to $3.4 million for the three months ended June 30, 2016. For the six months ended June 30, 2016 general and administrative expenses were $6.5 million or a 160.0% increase from $2.5 million during the same six-month period in 2015. The increases in both the three and six month periods were primarily due to increased staff costs related to additional employees in the United States and increased professional service fees related to operating as a public company.

Other Gains, Net

Other net gains (losses), net decreased by $0.6 million to a $0.6 million loss during the three months ended June 30, 2016 and increased by $0.4 million to a $0.4 million gain during the six months ended June 30, 2016 compared to the same periods in 2015. The changes were primarily due to unrealized higher losses in the three months ended June 30, 2016  from foreign exchange rate differences while the six months ended June 30, 2016 reflects gains from the re- measurement of foreign currency balances.

Financial Income and Expenses

Net Financial result changed by $0.4 million from $0.4 million in net financial expenses for the three months ended June 30, 2015 to $0.0 million for the three months ended June 30, 2016. During the six months ended June 30, 2016 net financial income was $0.1 million compared to financial expense of $7.0 million during the six months ended June 30, 2015.

During the three and six months ended June 30, 2016, net interest and similar expenses decreased by $0.4 million and $3.8 million, respectively, compared to the same periods in 2015 primarily due to the decrease in the effective interest accrued under the convertible loan agreements and the decrease in interest on the Kreos loan, which was fully repaid in November 2015.

There were no changes in our other financial income and expenses for the three months ended June 30, 2016 compared to the same period in 2015. For the six months ended June 30, 2016, other net financial expenses decreased to $0.0 from $3.3 for the six months ended June 30, 2015. Other financial income and expenses for the three months and six months ended June 30, 2015 were mainly related to the expenses recognized due to the fair value adjustments of the conversion rights related to our outstanding convertible loans. This expense was partly offset by benefits of approximately $3.6 million due to the waiver of interest on our outstanding convertible loans and benefits of approximately $1.6 million resulting from the termination of call options related to our outstanding convertible loans, all of which were due to our April 2015 financing.

Cash Flows

Operating Activities

Cash flow utilized by operating activities increased by $13.3 million from $11.6 million for the six months ended June 30, 2015 to $24.9 million for the six months ended June 30, 2016 due to a $15.7 million increase in net loss, after adjustments for non-cash amounts included in financial results and other income, partly offset by lower tax payments of $0.4 million, improved working capital of $1.4 million primarily from higher trade payables and other liabilities and lower cash interest expense of $0.6 million.

Investing Activities

Cash flow from investing activities changed by $15.8 million from $0.1 million cash outflow in the six months ended June 30, 2015 to $15.7 million cash inflow in the six months ended June 30, 2016 primarily due to the redemption of term deposits. Other investing activities were relatively insignificant in both years and related primarily to the acquisition of equipment in support of our research and development activities.

Financing Activities

Cash flow generated from financing activities decreased by $48.1 million from $48.3 million in the six months ended June 30, 2015 to $0.2 million during the six months ended June 30, 2016 primarily due to proceeds of $46.7 million from our April 2015 financing, $3.4 million from the issuance of an additional convertible loan in January 2015 and proceeds of $1.1 million from a silent partnership agreement entered into in January 2015. The period over period decrease in financing cash inflows was partially offset by a $2.9 million decrease of cash outflows for repayments of long-term borrowings.

 
FINANCIAL STATEMENTS
 
Consolidated Statement of Comprehensive Income (Loss)
 
      Three Months Ended
June 30,		   Six Months Ended
June 30,
(in thousands, except share and per share data)         2015       2016       2015       2016    
Other income     $ 899     $ 1,785     $ 1,496     $ 3,204    
Research and development expenses       (4,760 )     (9,828 )     (7,548 )     (22,845 )  
General and administrative expenses       (1,645 )     (3,368 )     (2,549 )     (6,453 )  
Other gains (losses), net       (1 )     (644 )     (2 )     353    
Operating result       (5,507 )     (12,055 )     (8,603 )     (25,741 )  
Financial income       -       54       6,828       142    
Financial expenses       (388 )     -       (13,839 )     -    
Financial result       (388 )     54       (7,011 )     142    
Loss before taxes       (5,895 )     (12,001 )     (15,614 )     (25,599 )  
Taxes on income       (2 )     12       (14 )     29    
Loss for the period       (5,897 )     (11,989 )     (15,628 )     (25,570 )  
Other comprehensive income (loss) for the year       1,494       (8 )     5,978       33    
Total comprehensive loss for the year     $ (4,403 )   $ (11,997 )   $ (9,650 )   $ (25,537 )  
                                     
       Three Months Ended  
June 30,		       Six Months Ended    
June 30,
Loss per share       2015       2016       2015       2016  
Basic ($ per share)     $  (9.03 )   $  (5.64 )   $   (31.90 )   $   (12.05 )
Diluted ($ per share)                                                       $ (9.03 )   $ (5.64 )   $ (31.90 )   $ (12.05 )
                                   
 
Consolidated Statement of Financial Position
 
(in thousands)     December
31, 2015		   June
 30, 2016
Assets          
Non-current assets          
Property, plant and equipment     $ 417     $ 910  
Intangible assets       3       94  
Long-term receivables       430       436  
Deferred tax assets       616       647  
        1,466       2,087  
Current assets          
Current receivables       4,805       7,844  
Marketable securities and term deposits         74,994       59,092  
Cash and cash equivalents       36,446       27,499  
        116,245       94,435  
Total assets     $ 117,711     $ 96,522  
Equity and liabilities          
Capital and reserves          
Share capital     $ 2,426     $ 2,320  
Capital reserves       264,021       244,527  
Other reserves       7,265       (8 )
Treasury shares       (26 )     (21 )
Accumulated losses       (165,365 )     (162,392 )
        108,321       84,426  
Non-current liabilities          
Other non-current liabilities       84       93  
        84       93  
Current liabilities          
Trade payables       2,928       1,830  
Other liabilities       6,208       10,164  
Current income tax liabilities       170       9  
        9,306       12,003  
Total equity and liabilities     $ 117,711     $ 96,522