Feb 27, 2019

NewLink Genetics Reports Fourth Quarter, Year-End 2018 Financial Results and Provides Update for Clinical Programs

Management to Host Conference Call Today at 4:30 p.m. ET

AMES, Iowa, Feb. 27, 2019 (GLOBE NEWSWIRE) -- NewLink Genetics Corporation (NASDAQ:NLNK) today reported consolidated financial results for the fourth quarter and year ended 2018, as well as progress in its clinical development programs. The Company also outlined key 2019 priorities related to its clinical pipeline.

“In 2018, we published further clinical results on indoximod that suggest it has significant activity in combination therapy for a variety of cancer indications,” said Charles J. Link, Jr, MD, Chairman and Chief Executive Officer.  “As we enter 2019 with a strong cash position, our intention is to focus on developing the best potential registration strategy for bringing indoximod forward and further developing our pipeline assets, especially NLG207.  We would like to thank the investigators and patients who support our clinical trials year after year, and we remain committed to your care.”

Anticipated 2019 Outlook

  • Updated results on the cohort of patients with newly diagnosed diffuse intrinsic pontine glioma (DIPG), from the efficacy portion of a Phase 1b study of indoximod for the treatment of pediatric patients with recurrent malignant brain tumors, are anticipated in 2019

  • Results from a Phase 2 study of NLG207 (formerly CRLX101), a nanoparticle formulation of the topoisomerase 1 inhibitor, camptothecin, conducted by the Gynecological Oncology Group (GOG) for patients with recurrent ovarian cancer, has been accepted for presentation at the American Association for Cancer Research (AACR) Annual Meeting 2019, at the Georgia World Conference Center, in Atlanta, March 29 - April 3, 2019

  • Updated results from a Phase 1 study of NLG802, a prodrug of indoximod with enhanced pharmacokinetic properties, are anticipated in 2019

  • Updated results from a Phase 1b study of indoximod for pediatric patients with recurrent malignant brain tumors are anticipated in 2019

  • Completion by Merck of the rolling Biologics License Application (BLA) filing for V920 (rVSV∆G-ZEBOV-GP), our partnered Ebola vaccine candidate, is expected in 2019

2018 Highlights

  • Presented Phase 1 results of indoximod plus front-line radiation and maintenance chemotherapy for the treatment of pediatric patients with newly diagnosed DIPG at the American Association of Clinical Research (AACR) Annual Meeting, April 2018, and updated Phase 1 results at the International Symposium of Pediatric Neuro-Oncology (ISPNO) Annual Meeting, July 2018, showing symptomatic improvement and marked radiographic improvement in DIPG patients.

  • Presented updated Phase 1 results for indoximod plus standard of care chemotherapy for younger, healthy patients with newly diagnosed acute myeloid leukemia (AML) in an oral session at the 60thAmerican Society of Hematology (ASH) Annual Meeting, December 2018

  • Presented final results from two Phase 2 studies of indoximod at the 2018 American Society of Clinical Oncology (ASCO) Annual Meeting with results for indoximod plus checkpoint inhibition in advanced melanoma which we believe showed encouraging overall and complete response rates which compared favorably to historical PD-1 monotherapy results and results for indoximod plus gemcitabine / nab-paclitaxel in metastatic pancreatic cancer demonstrating potentially promising activity that correlated with a measurable immune response

  • At the Society for Immunotherapy of Cancer (SITC) 2018 Annual Meeting, we presented correlative immunologic assay results from biopsies obtained during both the advanced melanoma and the metastatic pancreatic cancer trials previously presented at ASCO 2018,  illustrating indoximod’s impact on the tumor microenvironment as well as first-in-human results showing significantly enhanced pharmacokinetic properties of our indoximod prodrug, NLG802

  • November 13, 2018, our partner, Merck, announced that it had begun the rolling submission of licensure application for Ebola vaccine, V920 (rVSV∆G-ZEBOV-GP), to the FDA

Financial Results

Cash Position: NewLink Genetics ended the year on December 31, 2018, with cash and cash equivalents totaling $120.7 million compared to $158.7 million for the year ending December 31, 2017. The Company projects its cash position is sufficient to fund planned operations through the end of 2021.

R&D Expenses: Research and development expenses were $5.7 million and $45.7 million in the fourth quarter and year ended December 31, 2018 compared to $17.5 million and $69.9 million during the comparable periods in 2017. The decrease year-over-year was due primarily to a $15.2 million reduction in contract research and manufacturing expense, $3.0 million in personnel-related expense, $3.3 million in supplies and equipment, $1.8 million in clinical trial costs, $1.3 million in technology and licensing, and reduction in restructuring expenses of $100,000, offset by a $500,000 increase in consulting and other costs.

G&A Expenses: General and administrative expenses in the fourth quarter and year ended December 31, 2018 were $5.4 million and $29.2 million compared to $6.7 million and $31.7 million during the comparable periods in 2017. The year-over-year decrease of $2.5 million was due to a reduction of $2.5 million in personnel-related spending, $550,000 reduction in consulting and other costs, reduction in restructuring expenses of $300,000, offset by an $850,000 increase in supplies and other expenses.

Net Loss: NewLink Genetics reported a net loss of $10.6 million or a loss of $0.28 per diluted share for the fourth quarter of 2018 and a net loss of $53.6 million or a loss of $1.44 per diluted share for the year ended December 31, 2018, compared to a net loss of $13.7 million or $0.37 per diluted share for the fourth quarter of 2017 and a net loss of $72.0 million or $2.30 per diluted share for the year ended December 31, 2017.

NewLink Genetics ended 2018 with 37,251,220 shares outstanding.

Conference Call and Webcast Details

The Company has scheduled a conference call and webcast for 4:30 p.m. ET today to discuss the results and to give an update on clinical and business development activities. NewLink Genetics' senior management team will host the call, which will be open to all listeners. There will also be a question and answer session following the prepared remarks.

Access to the live conference call is available by dialing (855) 469-0612 (U.S.) or (484) 756-4268 (international) five minutes prior to the start of the call. The conference call will be webcast live and a link to the webcast can be accessed through the NewLink Genetics website at www.NewLinkGenetics.com in the "Investors & Media" section under "Events and Presentations," or through this link https://edge.media-server.com/m6/p/dqg32drc. To ensure a timely connection, it is recommended that users register at least 15 minutes prior to the scheduled webcast.  A replay of the call will be available approximately two hours after the completion of the call and can be accessed by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (international) and using the passcode 1279102. The replay will be available for two weeks from the date of the call.

About Indoximod

Indoximod is an investigational, orally available small molecule targeting the IDO pathway. The IDO pathway is a key immuno-oncology target, suppressing immune response and allowing for immune escape by degrading tryptophan with the resultant production of kynurenine. Indoximod reverses the immunosuppressive effects of low tryptophan and high kynurenine through mechanisms that include modulation of the AhR-driven transcription of genes that control immune function. This results in increased proliferation of effector T cells, increased differentiation into helper T cells rather than regulatory T cells, and downregulation of IDO expression in dendritic cells. Indoximod is being evaluated in combination with treatment regimens including chemotherapy, radiation, checkpoint blockade and cancer vaccines across multiple indications including recurrent pediatric brain tumors, DIPG, and AML.

About NLG207

NLG207 (formerly CRLX101) is an investigational nanoparticle-drug conjugate (NDC) composed of a cyclodextrin-based polymer backbone conjugated to camptothecin, a topoisomerase-1 inhibitor. NDCs enhance drug delivery to tumors where gradual payload release inside cancer cells augments antitumor activity while reducing toxicity.  Topoisomerase 1 inhibitors are a class of drugs that modify DNA damage responses in cancer cells. NewLink Genetics is evaluating NLG207 in a series of clinical trials in advanced refractory ovarian cancer patients.

About NewLink Genetics Corporation

NewLink Genetics is a clinical stage biopharmaceutical company focusing on developing novel oncology product candidates to improve the lives of patients with cancer. NewLink Genetics' IDO pathway inhibitors are immuno-oncology drug candidates designed to harness multiple components of the immune system to combat cancer. NewLink Genetics’ nanoparticle drug candidate, NLG207, conjugated to camptothecin, a topoisomerase 1 inhibitor is under development to combat refractory malignancies. For more information, please visit www.NewLinkGenetics.com and follow us on Twitter @NLNKGenetics.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements of NewLink Genetics that involve substantial risks and uncertainties. All statements contained in this press release are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. The words "guidance," "upcoming," "will," "plan," “intend,” "anticipate," "approximate," "expect," or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among others, statements about NewLink Genetics' financial guidance for 2019 and beyond; results of its clinical trials for product candidates; its timing of release of data from ongoing clinical studies; its plans related to execution of clinical trials; plans related to moving additional indications into clinical development; NewLink Genetics' future financial performance, results of operations, cash position and sufficiency of capital resources to fund its operating requirements; and any other statements other than statements of historical fact. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that NewLink makes due to a number of important factors, including those risks discussed in "Risk Factors" and elsewhere in NewLink Genetics' Annual Report on Form 10-K for the year ended December 31, 2017 and other reports filed with the U.S. Securities and Exchange Commission (SEC). The forward-looking statements in this press release represent NewLink's views as of the date of this press release. NewLink anticipates that subsequent events and developments will cause its views to change. However, while it may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. You should, therefore, not rely on these forward-looking statements as representing NewLink Genetics' views as of any date subsequent to the date of this press release.

Investor & Media Contact:
Lisa Miller
Director of Investor Relations
NewLink Genetics
515-598-2555
lmiller@linkp.com


NewLink Genetics Corporation
Consolidated Statements of Operations
(unaudited)
(In thousands, except share and per share amounts)
               
  Three Months Ended December 31,   Year Ended December 31,
  2018   2017   2018   2017
Grant revenue $     $ 10,042     $ 11,268     $ 28,321  
Licensing and collaboration revenue 202     56     1,206     390  
Total operating revenues 202     10,098     12,474     28,711  
Operating expenses:              
Research and development 5,721     17,461     45,694     69,866  
General and administrative 5,427     6,688     29,218     31,726  
Total operating expenses 11,148     24,149     74,912     101,592  
Loss from operations (10,946 )   (14,051 )   (62,438 )   (72,881 )
Other income and expense:              
Miscellaneous expense (118 )   (24 )   (102 )   (126 )
Interest income 519     263     2,029     616  
Interest expense (2 )   (4 )   (52 )   (119 )
Other income, net 399     235     1,875     371  
Net loss before taxes (10,547 )   (13,816 )   (60,563 )   (72,510 )
Income tax (expense) benefit (22 )   130     6,968     559  
Net loss $ (10,569 )   $ (13,686 )   $ (53,595 )   $ (71,951 )
Basic and diluted loss per share $ (0.28 )   $ (0.37 )   $ (1.44 )   $ (2.30 )
Basic and diluted average shares outstanding 37,229,006     36,770,490     37,191,262     31,304,309  


NewLink Genetics Corporation
Consolidated Balance Sheets
(unaudited)
(In thousands)
  Year Ended
  December 31,   December 31,
  2018   2017
Assets      
Current assets:      
Cash and cash equivalents $ 120,738     $ 158,708  
Prepaid expenses and other current assets 5,536     6,226  
Income tax receivable 339     356  
Other receivables 459     10,176  
Total current assets 127,072     175,466  
Property and equipment, net 3,727     5,091  
Income tax receivable 140     $ 140  
Total non-current assets 3,867     $ 5,231  
Total assets $ 130,939     $ 180,697  
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable $ 555     $ 9,256  
Accrued expenses 8,139     12,467  
Current portion of unearned revenue     56  
Current portion of deferred rent 92     92  
Current portion of notes payable and obligations under capital leases 61     160  
Total current liabilities 8,847     22,031  
Long-term liabilities:      
Royalty obligation payable to Iowa Economic Development Authority 6,000     6,000  
Notes payable and obligations under capital leases 43     111  
Deferred rent 906     998  
Total long-term liabilities 6,949     7,109  
Total liabilities 15,796     29,140  
Stockholders' equity:      
Blank check preferred stock, $0.01 par value: Authorized shares - 5,000,000 at December 31, 2018 and 2017; issued and outstanding shares - 0 at December 31, 2018 and 2017      
Common stock, $0.01 par value: Authorized shares - 75,000,000 at December 31, 2018 and 2017; issued 37,343,547 and 37,168,122 at December 31, 2018 and 2017, respectively, and outstanding 37,251,220 and 37,109,556 at December 31, 2018 and 2017, respectively 373     372  
Additional paid-in capital 407,199     389,786  
Treasury stock, at cost: 92,327 and 58,566 shares at December 31, 2018 and 2017, respectively (1,417 )   (1,142 )
Accumulated deficit (291,012 )   (237,459 )
Total stockholders' equity 115,143     151,557  
Total liabilities and stockholders' equity $ 130,939     $ 180,697  

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Source: NewLink Genetics Corporation