Forward Pharma Reports Q2 2016 Financial Results

OREANDA-NEWS. Forward Pharma A/S (NASDAQ:FWP) (“we” or “Forward” or the “Company”), today reported financial results for the second quarter ended June 30, 2016.  Net loss for the second quarter ended June 30, 2016 was $15.1 million, or $0.32 per basic share versus a net loss of $17.7 million, or $0.38 per basic share for second quarter of 2015.  On a non-GAAP basis, after removing the effect of non-cash income and expense items, our second quarter net loss for 2016 would have been $12.8 million, or $0.27 per basic share. As of June 30, 2016, the Company had $161.6 million in cash, cash equivalents and marketable securities, with no debt outstanding. 

“We have had a very productive year so far,” said Peder Andersen, Chief Executive Officer of Forward. “We look forward to further advancing our intellectual property and clinical programs.”

Second Quarter ended June 30, 2016 Financial and Operational Results

The net loss for the second quarter of 2016 was $15.1 million compared to a net loss of $17.7 million for the second quarter of 2015.

Research and development costs for the three month periods ended June 30, 2016 and 2015 were $13.5 million and $10.0 million, respectively. This increase in the second quarter 2016 versus the prior year was primarily related to a $2.8 million increase in fees to patent advisors and other patent-related costs to register and safeguard our intellectual property. Research and development expense includes costs to conduct the ongoing interference case at the U.S. Patent and Trademark Office (USPTO) and opposition proceedings with the European Patent Office (EPO). The balance of the increase in expense was related to ongoing preparatory work for our planned Phase 3 trial of FP187 in relapsing-remitting multiple sclerosis (RRMS). Share-based compensation for the three month period ended June 30, 2016 was $2.0 million. We continue to anticipate that our rate of research and development spending will increase in future quarters as our clinical and pharmaceutical development programs and patent office matters, including our pending interference action, advance.   

General and administrative costs for the three month periods ended June 30, 2016 and 2015 were $3.2 million and $3.5 million, respectively.  The decrease in expenses in the second quarter 2016 versus the prior year was principally due a reduction in legal, accounting and consulting fees. Share-based compensation for the three month period ended June 30, 2016 was $1.8 million. We expect our rate of general and administrative spending could increase in the future as we expand our business, hire personnel and advance our intellectual property portfolio including expenditures in connection with the lawsuits against Biogen in Europe.

Non-cash stock based compensation expense included in total operating expenses was $3.8 million for the second quarter of 2016 versus $4.1 million for the second quarter of 2015.

Intellectual Property Update

We continue to advance our intellectual property portfolio. As previously reported, on August 19, 2015, the USPTO re-declared the interference between Forward Pharma and a subsidiary of Biogen, Inc. regarding claims to the treatment of multiple sclerosis (MS), with a 480 mg daily dose of DMF, the active ingredient in Tecfidera^®. The USPTO confirmed Forward Pharma as the senior party based on having an earlier benefit date of our U.S. Patent Application No. 11/576,871. Biogen was deemed the junior party with respect to its U.S. Patent No. 8,399,514.  In August 2015, the parties filed priority statements and motions related to validity and benefit. The parties filed oppositions to motions on June 1, 2016.  Both parties filed replies to the oppositions on August 8, 2016.  The oral argument remains scheduled for November 30, 2016.  

Clinical Update

Our development plan for our lead drug, FP187, is focused primarily on the RRMS indication. In consultation with a clinical research organization, we are continuing to prepare for a single beta interferon-controlled Phase 3 trial in RRMS. In parallel, we are evaluating alternative Phase 3 clinical strategies in RRMS, which could shorten our time to commercialization and/or reduce costs. We expect to complete these evaluations as we continue to upscale production of FP187 during 2016, in anticipation of beginning the Phase 3 trial in the first half of 2017. 

We are currently performing additional Phase 1 studies on FP187.

Our nonclinical development plan for FP187 is designed to support regulatory submissions with a complete toxicology package.

This press release uses a non-GAAP measure of net loss that is a financial measure that is not calculated in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IASB"). The Company believes that the presentation of non-GAAP net loss is useful to investors because it excludes certain non-cash items that do not affect the Company’s liquidity and foreign exchange swings, most of which are not within the control of the Company.  Non-cash items include: (i) share-based compensation expense and (ii) non-cash foreign exchange gains or (losses). However, there are limitations in the use of non-GAAP financial measures as they exclude certain income and expenses. Furthermore, the Company's non-GAAP financial measure may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented herein should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with IFRS.