UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2016
NewLink Genetics Corporation | ||
(Exact name of registrant as specified in its charter) | ||
Delaware | 001-35342 | 42-1491350 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
2503 South Loop Drive Ames, IA | 50010 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant's telephone number, including area code: (515) 296-5555 | ||
Not applicable | ||
(Former name or former address, if changed since last report.) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Section 2 - Financial Information
Item 2.02. Results of Operations and Financial Condition.
On July 29, 2016, NewLink Genetics Corporation, a Delaware corporation (the “Company”), issued a press release providing an operational update and reporting financial results for the second quarter ended June 30, 2016 ("Press Release"). A copy of the Press Release and the Second Quarter Financial Results Presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference.
The information in this Current Report, including Exhibits 99.1 and 99.2 attached hereto is furnished under Item 2.02 of this report and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description | |
99.1 | Press Release, dated July 29, 2016, entitled “NewLink Genetics Reports Second Quarter 2016 Financial Results” | |
99.2 | Second Quarter 2016 Financial Results Presentation | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: July 29, 2016
NewLink Genetics Corporation | |
By: | /s/ John B. Henneman III |
John B. Henneman III | |
Its: | Chief Financial Officer |
INDEX TO EXHIBITS
Exhibit Number | Description | |
99.1 | Press Release, dated July 29, 2016, entitled “NewLink Genetics Reports Second Quarter 2016 Financial Results” | |
99.2 | Second Quarter 2016 Financial Results Presentation | |
Exhibit 99.1
FOR IMMEDIATE RELEASE
NewLink Genetics Reports Second Quarter 2016 Financial Results
-Management to Host Conference Call Today at 8:30 a.m. ET
- Analyst Day to be held on October 25 in New York
Ames, Iowa - July 29, 2016 - NewLink Genetics Corporation (NASDAQ: NLNK), a biopharmaceutical company focused on bringing novel immuno-oncology medicines to patients, today reported consolidated financial results for the second quarter of 2016 and provided updates on its clinical development programs and operational restructuring.
“We have streamlined our operations and focused development efforts on the clinical validation of indoximod, our proprietary IDO pathway inhibitor program, which is being studied in multiple cancers,” said Charles J. Link, Jr., M.D., Chairman, Chief Executive Officer and Chief Scientific Officer. “Additionally, we continue the clinical advancement of GDC-0919, with our partner Genentech, and look forward to progress in this program.”
“We have the financial resources to realize the potential of our product development pipeline as well as opportunities for the development of other potentially synergistic therapies that could provide benefit to patients with cancer,” commented Nicholas N. Vahanian, M.D., President and Chief Medical Officer.
Program Updates
Indoleamine 2,3-Dioxgenase (IDO) Checkpoint Inhibitor Programs
The IDO pathway regulates immune response by suppressing T cell function and enabling local tumor immune escape. NewLink Genetics is developing two distinct IDO pathway inhibitors, indoximod and GDC-0919, which are small-molecule product candidates having the potential to disrupt mechanisms by which tumors evade the immune system. Indoximod and GDC-0919 have different mechanisms of action within the IDO pathway and are in Phase 1 or 2 clinical trials for a range of cancers, including breast cancer, melanoma, pancreatic cancer, and other malignancies.
Indoximod
NewLink Genetics reported on two clinical studies in two posters highlighting the combination therapeutic potential of indoximod at the 2016 American Society of Clinical Oncology Annual Meeting in June. Data reported included:
• | Updates on Phase 1b/2 trial of the IDO pathway inhibitor, indoximod, plus checkpoint inhibitors for the treatment of unresectable stage 3 or 4 melanoma. The trial design allows for the combination of indoximod with either ipilimumab or one of the PD-1 checkpoint inhibitors, pembrolizumab or nivolumab. The combination of indoximod with other checkpoint inhibitors has been well tolerated thus far with no increase in toxicity noted in this Phase 1b/2 study. Overall, 40 patients had been enrolled in the combined Phase 1b/2 study long enough to have response data available at the time |
Exhibit 99.1
of data cut off. The poster data presented at ASCO were based on data via site reported RECIST criteria available from 28 subjects, the objective response rate, comprised of complete response plus partial response, for these patients is 36 percent (10 of 28) with three complete responses. Interestingly, the subset of 15 patients who received indoximod in combination with pembrolizumab had an objective response rate of 53 percent (8 of 15) with two complete responses (13 percent). The trial continues to enroll, with 55 patients currently enrolled in Phase 2.
• | Interim analysis on a Phase 2 trial of the IDO pathway inhibitor, indoximod, plus gemcitabine/nab-paclitaxel for the treatment of metastatic pancreatic cancer. The combination of indoximod and gemcitabine/nab-paclitaxel continues to be well tolerated by patients with metastatic pancreatic cancer. These data come from the Phase 1/2 trial in which treatment-naïve patients with metastatic pancreatic cancer were treated with the combination therapy in continuous four week cycles. As of the data cut off for the analysis, a total of 45 patients (Phase 1 and 2) were enrolled in the trial long enough to potentially have cycle 4 imaging available by the ASCO presentation. Data via site reported RECIST criteria were available on 31 patients. At the time of this analysis, objective response rate was 45 percent (14 of 31) and multiple durable responses ≥6 months were observed. Two patients achieved a complete response (6 percent), both at Cycle 8, showing delayed kinetics that may indicate an immune based mechanism. The trial continues to enroll patients and a biopsy cohort expansion is underway. |
“These promising data continue to demonstrate the potential of combination therapies with other checkpoint inhibitors and with chemotherapies for different cancers,” added Dr. Vahanian. “We believe that these data further support the IDO pathway as one of the key immune checkpoint targets.”
Restructuring
The company also announced that it has implemented a significant restructuring program following the May results of the IMPRESS Phase 3 study of algenpantucel-L. The objective of the restructuring is to focus the company’s financial resources on the following priorities:
• | Progress and accelerate the development of indoximod; |
• | Continue the alliances with Genentech (GDC-0919) and Merck (Ebola vaccine candidate); |
• | Advancing other drug discovery programs, including both PTEN and Zika virus; and |
• | Evaluate external opportunities to expand our pipeline. |
The restructuring includes the following initiatives:
• | Winding down HyperAcute Cellular Immunotherapy clinical trials that do not include a checkpoint inhibitor combination; |
• | Winding down commercial manufacturing capacity for algenpantucel-L; |
• | Consolidating the Company’s facilities footprint from 133,000 square feet to approximately 66,000 square feet; |
• | Reducing headcount from approximately 230 to approximately 130; and |
• | Focusing capital spending to primarily support drug discovery and development. |
We recorded $12.3 million in restructuring expenses in Q2, including severance expense, the impairment of fixed assets, and the costs of terminating certain contracts. In Q3, the Company expects to record small additional charges relating to the closing or reduction of leased facilities.
Financial Results for the Three-Month Period Ended June 30, 2016
Exhibit 99.1
Cash Position: NewLink Genetics ended the quarter on June 30, 2016, with cash and cash equivalents totaling $160.5 million compared to $197.8 million for the year ending December 31, 2015.
R&D Expenses: Research and development expenses in the second quarter of 2016 were $27.4 million compared to $16.1 million during the comparable period in 2015. The increase was primarily due to the R&D expenses related to the restructuring initiatives of $11.8 million.
G&A Expenses: General and administrative expenses in the second quarter of 2016 were $9.1 million compared to $7.3 million during the comparable period in 2015. The increase was primarily due to an increase in medical affairs and marketing expenses along with G&A expenses incurred due to the restructuring initiatives of $0.5 million.
Net Loss: NewLink Genetics reported a net loss of $32.4 million or ($1.12) per diluted share for the second quarter of 2016 compared to a net loss of $14.1 million or ($0.49) per diluted share for the comparable period in 2015.
NewLink Genetics ended the quarter with 28,962,296 shares outstanding.
Financial Guidance and Upcoming Investor Meetings
NewLink Genetics’ goal and expectation remains to finish 2016 with two years of cash on hand and the capacity to make incremental investments.
We expect to present at the Baird Healthcare Conference on September 7 and we look forward to hosting our Analyst Day on Tuesday, October 25 in New York.
Conference Call Details
The Company has scheduled a conference call for 8:30 a.m. ET today to discuss the results and to give an update. 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 can be accessed through the NewLink Genetics website at http://investors.linkp.com/events.cfm. A replay of the call will be available for two weeks from the date of the call and can be accessed by dialing (855) 859-2056 (U.S.) or (404) 537-3406 (international) and using the passcode 46406260.
About NewLink Genetics Corporation
NewLink Genetics is a biopharmaceutical company at the forefront of discovering, developing and commercializing novel immuno-oncology product candidates to improve the lives of patients with cancer. NewLink Genetics’ portfolio includes small molecule immunotherapy product candidates intended to treat a wide range of oncology indications. NewLink Genetics’ product candidates are designed to harness multiple components of the immune system to combat cancer. For more information, please visit http://www.newlinkgenetics.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements of NewLink Genetics that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this press release are forward-looking statements, within the meaning of The Private Securities Litigation Reform Act of 1995.
Exhibit 99.1
The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “target,” “potential,” “will,” “could,” “should,” “seek” 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 2016; results of its clinical trials for product candidates; 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 Genetics 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, 2015 and other reports filed with the U.S. Securities and Exchange Commission (SEC). The forward-looking statements in this press release represent NewLink' Genetics’ views as of the date of this press release. NewLink Genetics 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.
###
Corporate Contact:
Jack Henneman
Chief Financial Officer
(515) 598-2561
Investor@linkp.com
Investor & Media Contact:
Beth Kurth
LaVoieHealthScience
617-374-8800, ext. 106
bkurth@lavoiehealthscience.com
Exhibit 99.1
NewLink Genetics Corporation | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(unaudited) | |||||||||||||||
(In thousands, except share and per share amounts) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Grant revenue | $ | 1,262 | $ | 3,280 | $ | 5,600 | $ | 12,929 | |||||||
Licensing and collaboration revenue | 750 | 4,165 | 2,120 | 33,711 | |||||||||||
Total revenue | 2,012 | 7,445 | 7,720 | 46,640 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 27,410 | 16,130 | 49,347 | 34,111 | |||||||||||
General and administrative | 9,130 | 7,257 | 18,294 | 15,623 | |||||||||||
Loss from operations | (34,528 | ) | (15,942 | ) | (59,921 | ) | (3,094 | ) | |||||||
Other income, net | 60 | 22 | 99 | 33 | |||||||||||
Net loss before taxes | (34,468 | ) | (15,920 | ) | (59,822 | ) | (3,061 | ) | |||||||
Income tax benefit | 2,079 | 1,829 | 3,713 | 160 | |||||||||||
Net loss | $ | (32,389 | ) | $ | (14,091 | ) | $ | (56,109 | ) | $ | (2,901 | ) | |||
Basic and diluted loss per share | $ | (1.12 | ) | $ | (0.49 | ) | $ | (1.94 | ) | $ | (0.10 | ) | |||
Basic and diluted average shares outstanding | 28,891,827 | 28,661,588 | 28,874,385 | 28,408,474 | |||||||||||
Exhibit 99.1
NewLink Genetics Corporation | |||||||
Condensed Consolidated Balance Sheets | |||||||
(unaudited) | |||||||
(In thousands) | |||||||
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash, cash equivalents and certificates of deposit | $ | 160,527 | $ | 197,800 | |||
Prepaid expenses and other current assets | 7,228 | 10,342 | |||||
Income tax receivable | 4,259 | — | |||||
Total current assets | 172,014 | 208,142 | |||||
Property and equipment, net | 7,435 | 10,400 | |||||
Total assets | $ | 179,449 | $ | 218,542 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 21,380 | $ | 12,422 | |||
Unearned revenue | 838 | 892 | |||||
Other current liabilities | 327 | 667 | |||||
Income taxes payable | — | 859 | |||||
Total current liabilities | 22,545 | 14,840 | |||||
Long-term liabilities: | |||||||
Royalty obligation payable | 6,000 | 6,000 | |||||
Notes payable and obligations under capital leases | 395 | 368 | |||||
Deferred rent | 1,109 | 1,153 | |||||
Unearned revenue | 56 | 407 | |||||
Total long-term liabilities | 7,560 | 7,928 | |||||
Total liabilities | 30,105 | 22,768 | |||||
Stockholders' equity: | |||||||
Common stock | 290 | 288 | |||||
Additional paid-in capital | 286,300 | 276,610 | |||||
Treasury stock, at cost | (784 | ) | (771 | ) | |||
Accumulated deficit | (136,462 | ) | (80,353 | ) | |||
Total stockholders' equity | 149,344 | 195,774 | |||||
Total liabilities and stockholders' equity | $ | 179,449 | $ | 218,542 | |||
NewLink Genetics Corporation
Nasdaq: NLNK
July 29, 2016
Second Quarter 2016 Financial Results
Agenda
2
Introduction
Jack Henneman, Executive Vice President & CFO
2016 Ongoing Priorities
Charles J. Link, Jr., M.D., Chairman, CEO & CSO
Clinical Updates
Nicholas N. Vahanian, M.D., President & CMO
Restructuring & Second Quarter 2016 Financial Results
Mr. Henneman
Cautionary Note Regarding
Forward-Looking Statements
This presentation contains forward-looking statements of NewLink Genetics that involve substantial
risks and uncertainties. All statements, other than statements of historical facts, contained in this
presentation are forward-looking statements, within the meaning of The Private Securities Litigation
Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,”
“target,” “potential,” “will,” “could,” “should,” “seek” 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 2016; results of its clinical trials
for product candidates; 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 Genetics 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, 2015 and other reports filed with the U.S. Securities and Exchange
Commission (SEC). The forward-looking statements in this presentation represent NewLink'
Genetics’ views as of the date of this presentation. NewLink Genetics 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 presentation.
NASDAQ: NLNK
3
4
Oncology Focused Pipeline
Two IDO pathway inhibitors in clinical development (indoximod and GDC-0919)
Research collaboration with Genentech for IDO and TDO inhibitors
Small molecule program focused on additional immuno-oncology targets
Strong Scientific and Business Leadership
Executing on vision to bring immunotherapies to patients
Strategic collaborations with Genentech/Roche and Merck
Strong cash position
Substantial Near-term News Flow
Multiple opportunities to validate IDO pathway inhibitor programs
Clinical updates on the indoximod program
Clinical advances from partnership with Genentech/Roche for GDC-0919
NewLink Genetics
Building a Leading Immuno-Oncology Company
5
Progress and accelerate the development of indoximod
Continue Genentech and Merck alliances
Advance PTEN and Zika
Evaluate external opportunities for pipeline expansion
Ongoing Priorities
NewLink Genetics’ IDO Pathway Inhibitors
6
AGENT INDICATION DESIGN STATUS
Indoximod
Breast cancer
(metastatic)
Indoximod + taxane;
randomized
Pancreatic cancer
(metastatic)
Indoximod + gemcitabine
and nab-paclitaxel
Glioblastoma
multiforme
Indoximod +
temozolomide
Melanoma
(advanced)
Indoximod + ipilimumab
and PD-1 inhibitors
Advanced NSCLC
Tergenpumatucel-L +
indoximod and docetaxel
GDC-0919
Solid tumors GDC-0919
Solid tumors
GDC-0919 +
atezolizumab
Clinical Development Programs
Phase 2 Fully Enrolled
Phase 2 Currently Enrolling
Phase 2 Currently Enrolling
Phase 2 Currently Enrolling
Phase 1 Currently Enrolling
Phase 1 Currently Enrolling
Phase 1b Currently Enrolling
7
Conserve cash
Wind-down HyperAcute Cellular Immunotherapy trials and
manufacturing activities
Carefully planned company-wide headcount reductions to ~130
Consolidate/scale-back facilities footprint
Eliminate commercialization spending
Capital spending reduced to primarily supporting R&D needs
2016-2018 Cash Conservation Initiatives
8
Substantial cash runway
Before After
Headcount ~230 ~130
Facilities 133K sq ft 66K sq ft
Annual Lease Cost $1.4mm $0.8mm
Clinical Trials 19
(finish 15 existing, 4 new)
4-8
Quarterly Negative Cash-
flow
~$20mm ~$12 mm
Quarters of Cash ~8 10+
“Before and After” Summary
Second Quarter 2016 Financial Results
9
Jack Henneman, EVP and Chief Financial Officer
Strong Capital Position
Stable and reliable cash position - $160.5M at Q2 2016 / $197.8M at YE 2015
Goal and expectation to finish 2016 with two years of cash-on-hand
Multiple Value Drivers
Capacity for Incremental Investments
Managing spending carefully
Advantage of partnered programs
Potential for combinations of IDO pathway inhibitors
Proprietary and infectious disease initiatives
Opportunity for potentially synergistic therapies
10
Q & A