NewLink Genetics Corporation
NEWLINK GENETICS CORP (Form: 8-K, Received: 02/28/2017 08:35:07)


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): February 28, 2017


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 February 28, 2017, NewLink Genetics Corporation, a Delaware corporation (the “Company”), issued a press release providing an operational update and reporting financial results for the fourth quarter and year ended December 31, 2016 ("Press Release"). A copy of the Press Release and the Fourth Quarter and Year End 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 February 28, 2017, entitled “NewLink Genetics Corporation Provides Operational Update and Reports Fourth Quarter, Year End 2016 Financial Results”
99.2
 
Fourth Quarter and Year End 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:    February 28, 2017


 
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 February 28, 2017, entitled “NewLink Genetics Corporation Provides Operational Update and Reports Fourth Quarter, Year End 2016 Financial Results”
99.2
 
Fourth Quarter and Year End 2016 Financial Results Presentation










Exhibit 99.1


NEWLOGOA07.JPG
FOR IMMEDIATE RELEASE

NewLink Genetics Provides Operational & Clinical Update, Reports Fourth Quarter,
Year-End 2016 Financial Results
Management to Host Conference Call and Webcast Today at 8:30 a.m. ET
AMES, Iowa, February 28, 2017 - NewLink Genetics Corporation (NASDAQ:NLNK), a biopharmaceutical company focused on bringing novel immuno-oncology therapies to patients with cancer, today reported consolidated financial results for the fourth quarter and year ended 2016, as well as progress in its clinical development programs. NewLink Genetics also outlined key 2017 business priorities related to the clinical development programs for the Company’s immuno-oncology pipeline.
"NewLink Genetics has two separate and distinct IDO pathway inhibitors in clinical development. In 2017, we look forward to advancing clinical validation of IDO as an immuno-oncology target," said Charles J. Link, Jr. MD, Chairman, Chief Executive Officer and Chief Scientific Officer. "Our priorities going into 2017 are clear. For GDC-0919, we anticipate continued progress in the clinic in collaboration with our partner Genentech/Roche. We believe indoximod will emerge as one of the leading IDO pathway inhibitor programs in 2017.”
2016 Highlights
The IDO pathway, which helps cancer escape the patient’s immune system, became increasingly validated as an immuno-oncology target, with clinical data coming from NewLink Genetics and others.
Presented early Phase 2 clinical data of indoximod plus gemcitabine/nab-paclitaxel for the treatment of patients with metastatic pancreatic cancer at the 2016 American Society of Clinical Oncology (ASCO) Annual Meeting, suggesting evidence of safety and clinical activity.
Presented promising interim Phase 2 clinical data from a cohort of patients with advanced melanoma treated with indoximod plus pembrolizumab at the 2016 ASCO Annual Meeting.
Our Ebola vaccine candidate (rVSV∆G-ZEBOV GP), partnered with Merck, received breakthrough therapy designation from the FDA and PRIME status from the European Medicines Agency. In December 2016 the final results of the Guinea trial were published on-line in The Lancet and confirmed efficacy of the vaccine.
Finished 2016 with $131.5 million in cash and equivalents.

Anticipated Highlights in 2017
Our investigators have submitted an abstract to the American Association for Cancer Research (AACR) on the Phase 2 study cohort of patients with advanced melanoma treated with indoximod in combination with pembrolizumab.



Exhibit 99.1


We have been informed by the AACR committee that our abstract concerning our new chemical entity NLG802, a novel prodrug of indoximod, has been accepted for a poster presentation.
Genentech is expected to update on progress on a Phase 1b study of GDC-0919 in combination with atezolizumab for patients with solid tumors.
We intend to update progress from the Phase1b, dose-escalation study of indoximod and standard of care therapy in patients with Acute Myeloid Leukemia (AML).
We expect to finish the year with approximately $75 million in cash. This excludes potential payments from partners, the proceeds from any offering, and any costs associated with any strategic acquisitions.
“We are excited to be presenting clinical data for indoximod at upcoming scientific meetings in 2017 beginning at AACR next month,” said Nicholas Vahanian, M.D., President and Chief Medical Officer.
Financial Results
Cash Position: NewLink Genetics ended the year on December 31, 2016, with cash, cash equivalents, and certificates of deposit totaling $131.5 million compared to $197.8 million for the year ending December 31, 2015. The Company’s cash position is sufficient to fund current operations in the near and medium term.
R&D Expenses: Research and development expenses were $19.5 million and $93.3 million in the fourth quarter and year ended December 31, 2016 compared to $14.8 million and $71.4 million during the comparable periods in 2015. The increase year-over-year was due primarily to $11.1 million of charges incurred as a result of the restructuring during the second quarter of 2016, including a non-cash charge of $4.0 million related to impaired assets, with the remainder of the increase due to increases in contract manufacturing costs, supplies and equipment and clinical trial expenses.
G&A Expenses: General and administrative expenses in the fourth quarter and year ended December 31, 2016 were $7.2 million and $33.2 million compared to $7.7 million and $30.7 million during the comparable periods in 2015. The increase was due to an increase of $2.9 million in personnel-related expenses due to changes in transiently increased staffing levels, share-based compensation expense and compensation increases, an increase of $500,000 due to charges incurred as a result of the restructuring, offset by a decrease of $930,000 in consulting, legal and licensing fees, and supplies.
Net Loss: NewLink Genetics reported a net loss of $13.5 million or $0.46 per diluted share for the fourth quarter of 2016 and a net loss of $85.2 million or $2.94 per diluted share for the year ended December 31, 2016, compared to a net loss of $21.6 million or $0.75 per diluted share for the fourth quarter of 2015 and a net loss of $40.4 million or $1.41 per diluted share for the year ended December 31, 2015.
NewLink Genetics ended 2016 with 29,163,673 shares outstanding.
Conference Call and Webcast Details
The Company has scheduled a conference call and webcast for 8:30 a.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



Exhibit 99.1


the "Investors & Media" section under "Events and Presentations." 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 71940747. The replay will be available for two weeks from the date of the call.
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' 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 that involve substantial risks and uncertainties.  All statements, other than statements of historical fact, contained in this press release 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 2017; results of its clinical trials for product candidates; its timing of release of data from ongoing clinical studies; its 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, 2015 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.

###
Corporate Contact:
Jack Henneman
Chief Financial Officer
(515) 598-2561
Investor@linkp.com

Investors:
Beth Kurth
LaVoieHealthScience



Exhibit 99.1


617-374-8800, ext. 106
bkurth@lavoiehealthscience.com

Media:
Alison Chen
LaVoieHealthScience
617-374-8800, ext. 104
achen@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 December 31,
 
Year Ended December 31,
 
2016
 
2015
 
2016
 
2015
Grant revenue
$
12,184

 
$
6,064

 
$
32,242

 
$
32,358

Licensing and collaboration revenue
518

 
1,588

 
3,526

 
36,143

Total revenue
12,702

 
7,652

 
35,768

 
68,501

Operating expenses:
 
 
 
 
 
 
 
Research and development
19,490

 
14,795

 
93,300

 
71,414

General and administrative
7,182

 
7,682

 
33,226

 
30,689

Loss from operations
(13,970
)
 
(14,825
)
 
(90,758
)
 
(33,602
)
Other income (expense), net
128

 
(11
)
 
247

 
(41
)
Net loss before taxes
(13,842
)
 
(14,836
)
 
(90,511
)
 
(33,643
)
Income tax benefit (expense)
336

 
(6,738
)
 
5,356

 
(6,738
)
Net loss
$
(13,506
)
 
$
(21,574
)
 
$
(85,155
)
 
$
(40,381
)
Basic loss per share
$
(0.46
)
 
$
(0.75
)
 
$
(2.94
)
 
$
(1.41
)
Diluted loss per share
$
(0.46
)
 
$
(0.75
)
 
$
(2.94
)
 
$
(1.41
)
Basic and diluted average shares outstanding
29,147,247

 
28,788,615

 
28,979,327

 
28,586,585
























Exhibit 99.1


NewLink Genetics Corporation
Condensed Consolidated Balance Sheets
(unaudited)
(In thousands)
 
Year Ended
 
December 31,
 
December 31,
 
2016
 
2015
Assets
 
 
 
Current assets:
 
 
 
Cash, cash equivalents and certificates of deposit
$
131,490

 
$
197,800

Prepaid expenses and other current assets
30,447

 
10,342

Income tax receivable
5,975

 

Total current assets
167,912

 
208,142

Property and equipment, net
6,835

 
10,400

Total assets
$
174,747

 
$
218,542

 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued expenses
$
37,192

 
$
12,422

Unearned revenue
391

 
892

Other current liabilities
322

 
667

Income taxes payable

 
859

Total current liabilities
37,905

 
14,840

Long-term liabilities:
 
 
 
Royalty obligation payable
6,000

 
6,000

Notes payable and obligations under capital leases
285

 
368

Deferred rent
1,091

 
1,153

Unearned revenue, excluding current portion

 
407

Total long-term liabilities
7,376

 
7,928

Total liabilities
45,281

 
22,768

Stockholders' equity:
 
 
 
Common stock
292

 
288

Additional paid-in capital, net
295,535

 
276,610

Treasury stock, at cost
(853
)
 
(771
)
Retained deficit
(165,508
)
 
(80,353
)
Total equity
129,466

 
195,774

Total liabilities and equity
$
174,747

 
$
218,542

 
 
 
 
 

 
 




NewLink Genetics Corporation Nasdaq: NLNK February 28, 2017 Fourth Quarter and Year-End 2016 Financial Results


 
Agenda 2 Introduction  Jack Henneman, Executive Vice President & CFO 2017 Ongoing Priorities  Charles J. Link, Jr., M.D., Chairman, CEO & CSO Clinical Updates / Anticipated News Flow  Nicholas N. Vahanian, M.D., President & CMO Fourth Quarter and Year-End 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 any 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. 3


 
4 NewLink Genetics – 2016 Takeaways  The IDO pathway is central to immune escape in many types of cancers  The IDO pathway is becoming increasingly validated as an immuno-oncology target  Two product candidates that target the IDO pathway, with distinct mechanisms of action  GDC-0919; Targets the enzyme directly (partnered with Genentech/Roche)  Indoximod; Inhibits effects of IDO pathway by supplying a “tryptophan-sufficiency” signal  Proven track record in both in-licensing and out-licensing  Strong balance sheet to advance current preclinical and clinical programs


 
IDO Pathway Inhibitor Clinical Development 5 AGENT INDICATION REGIMEN PHASE 1 PHASE 2 PHASE 3 Indoximod Advanced Melanoma Indoximod + PD-1 inhibitors or ipilimumab Metastatic Pancreatic Cancer Indoximod + gemcitabine and nab-paclitaxel Metastatic Breast Cancer Indoximod + taxane Malignant Brain Tumors Indoximod + temozolomide Castrate Resistant Prostate Cancer (CRPC) Indoximod + sipuleucel-T Newly Diagnosed Acute Myeloid Leukemia (AML) Indoximod + standard of care Advanced Non-Small Cell Lung Cancer (NSCLC) Indoximod + tergenpumatucel-L + chemotherapy GDC-0919* Solid Tumors GDC-0919 + atezolizumab (PDL-1) Solid Tumors GDC-0919 *Partnered with Genentech/Roche ENROLLING ENROLLING ENROLLING ENROLLING ENROLLING ENROLLED ENROLLED ENROLLED ENROLLED


 
Fourth Quarter and Year-End 2016 Financial Results YE Cash and Equivalents $131.5 million Debt ~$0.5 million YE 2017 Cash (Projected) ~$75 million Quarterly Negative Cash-Flow ~$13 million Shares Outstanding 29.2 million Market Capitalization $435 million* Headcount 122 6 *As of February 21, 2017 Major 2017 YE Cash Projection Assumptions: This excludes potential payments from partners, the proceeds from any offerings, and any costs associated with any strategic transactions.


 
7 Q & A