Frequency Therapeutics Provides Business Updates and Reports Third Quarter 2019 Financial Results

WOBURN, Mass.–(BUSINESS WIRE)–Frequency Therapeutics, Inc. (Nasdaq: FREQ), a clinical-stage biotechnology firm centered on harnessing the physique’s innate biology to restore or reverse harm brought on by a broad vary of degenerative illnesses, at this time introduced enterprise updates and monetary outcomes for the third quarter ending September 30, 2019.

“This has been a tremendously productive interval for Frequency as we commenced our Part 2a examine, acquired Quick Monitor designation for FX-322, and accomplished key financings that we consider will allow us to advance our listening to program and additional diversify our portfolio as we apply our progenitor cell activation platform in quite a few illness areas,” mentioned Frequency Therapeutics Chief Government Officer David Lucchino. “We have now opened all U.S. websites for our Part 2a examine of FX-322 and stay on observe to report top-line knowledge within the second half of subsequent yr. We consider FX-322 has the potential to be a restorative, disease-modifying therapy for the thousands and thousands of sufferers with listening to loss, with the purpose of bettering listening to operate, together with speech intelligibility. We additionally proceed to advance our a number of sclerosis improvement efforts and stay centered on shifting our remyelination program into the clinic within the second half of 2021.”

Latest Enterprise Highlights

• Initiation of FX-322 Part 2a Examine for Sensorineural Listening to Loss (October 2019): The Part 2a medical trial is a multi-center, randomized, double-blind, placebo-controlled, single- and repeat-dose examine of FX-322, anticipated to enroll roughly 96 adults aged 18 to 65 with secure sensorineural listening to loss at 12 websites within the U.S. Sufferers will probably be randomized to considered one of 4 teams, every of which is able to obtain 4 injections, as soon as per week, at weekly intervals beginning on the preliminary go to. The important thing efficacy endpoints of this trial are phrase recognition (WR), words-in-noise (WIN), and commonplace pure tone audiometry. Exploratory efficacy endpoints are prolonged excessive frequency pure tone audiometry, the Tinnitus Practical Index (TFI), and the Listening to Handicap Stock in Adults (HHIA).
• FX-322 Quick Monitor Designation (October 2019): America Meals and Drug Administration (FDA) granted Quick Monitor designation for FX-322. This designation is meant to facilitate improvement of recent therapies for critical situations with unmet medical want, expedite evaluation, and allow extra frequent engagement between the Firm and the FDA relating to examine planning and design.
• Completion of Preliminary Public Providing (October 2019): Frequency accomplished an preliminary public providing of 6,325,000 shares of widespread inventory, which included the partial train of the underwriters’ over-allotment choice for 325,000 shares, on the providing worth of $14.00 per share for complete gross proceeds of roughly $88.6 million, earlier than deducting underwriting reductions and commissions and different providing bills. Frequency widespread inventory started buying and selling on the Nasdaq World Choose Market on October three, 2019 underneath the ticker image “FREQ.” J.P. Morgan, Goldman Sachs and Cowen have been joint book-running managers for the providing.
• Presentation of FX-322 Part half Information (September 2019): On the American Academy of Otolyrangology – Head and Neck Surgical procedure annual assembly, Frequency offered knowledge from the Part half examine of FX-322 by which a statistically important and clinically significant enchancment in key measures of listening to loss, together with readability of sound and phrase understanding, was noticed. As well as, FX-322 was noticed to be well-tolerated with no critical hostile results. The Firm additionally offered preclinical and medical knowledge from the Part half examine on the 2^nd Annual Worldwide Symposium on Interior Ear Therapeutics (ISIET) in Hanover, Germany in November.
• Strengthened Management Staff (August 2019): Frequency expanded its management crew with the addition of Dana Hilt, M.D., as Chief Medical Officer, William Chin, M.D. as head of Medical and Translational Science; Jason Glashow as head of Company Affairs; Jeff Hrkach, Ph.D., as head of Expertise Improvement; and Michael Bookman as Deputy Normal Counsel.
• Completion of Crossover Financing (July 2019): The Firm accomplished a $62 million personal financing led by Perceptive Advisors and a syndicate that included Deerfield Administration, RTW Investments, and Mizuho Securities Principal Funding.
• License and Collaboration Settlement with Astellas (July 2019): Frequency entered right into a license and collaboration settlement with Astellas Pharma, Inc. (Astellas) for FX-322. Frequency acquired an $80 million upfront cost with the potential of as much as $545 million in future milestone funds in addition to double-digit royalties. Astellas obtained the unique rights to develop and commercialize FX-322 in ex-U.S. markets; Frequency retains U.S. rights.

Third Quarter 2019 Monetary Outcomes

Money Place: Money, money equivalents and short-term marketable securities at September 30, 2019 have been $165.three million, as in comparison with $42.2 million at December 31, 2018. Money, money equivalents and short-term marketable securities at September 30, 2019 don’t embrace the online proceeds of the Firm’s preliminary public providing, $79.2 million, which closed in October 2019. Based mostly on its present plans, the Firm expects its current money, money equivalents and short-term marketable securities, together with the proceeds from its October preliminary public providing, will probably be enough to fund its operations into 2022.

Income: Income was $24.2 million for the third quarter of 2019. The Firm had no income within the comparable interval of 2018. In accordance with the Firm’s income recognition coverage, the $80.zero million upfront cost acquired from Astellas underneath the license and collaboration settlement in July 2019 is being acknowledged as income over the interval from the execution of the settlement till Frequency meets its obligation to finish a Part 2a medical trial for FX-322.

Royalties: Royalty expense was $16.zero million for the third quarter of 2019, representing the royalty to the Massachusetts Institute of Expertise on the $80 million upfront cost from Astellas.

Analysis & Improvement Bills: Analysis and improvement bills have been $5.2 million for the third quarter of 2019 as in comparison with $three.5 million for the third quarter of 2018. The rise of $1.7 million was primarily because of elevated prices associated to the Firm’s lead product candidate, FX-322, together with exterior improvement prices because the Firm ready to begin a Part 2a medical trial for FX-322, in addition to elevated personnel-related prices because of further headcount to help the expansion of Frequency’s analysis and improvement group.

Normal and Administrative Bills: Normal and administrative bills have been $four.three million for the third quarter of 2019 as in comparison with $1.5 million for the third quarter of 2018. The rise of $2.eight million was primarily because of a rise in personnel-related prices, together with stock-based compensation for extra headcount required to help the expansion of the Firm in addition to elevated price for consulting and professional charges.

Web Loss: Web loss was $zero.6 million for the third quarter of 2019 as in comparison with $5.1 million for the third quarter of 2018. The lower of $four.5 million was primarily as a result of affect of recognizing $24.2 million of income underneath the Astellas license and collaboration settlement which was partially offset by the $16.zero million royalty expense and will increase in analysis and improvement and common and administrative bills.

About Sensorineural Listening to Loss

Sensorineural listening to loss (SNHL) is the most typical type of listening to loss, ensuing from harm to the hair cells within the inside ear or issues with the nerve pathways that convert sound waves from the inside ear to the mind. Hair cells are generally misplaced because of persistent noise publicity, or because of getting older, sure viral infections or publicity to ototoxic medication. The World Well being Group (WHO) estimates that there are at the moment greater than 800 million adults with listening to loss globally and that 1.1 billion youngsters and adults ages 12 to 35 years outdated are in danger for listening to loss from leisure noise publicity. In keeping with the U.S. Nationwide Institutes of Well being, greater than 90 p.c of these with listening to loss are affected by SNHL.

About Frequency Therapeutics

Frequency Therapeutics is a frontrunner within the improvement of medicines designed to activate progenitor cells inside the physique to deal with degenerative illnesses. The Firm’s progenitor cell activation (PCA) strategy stimulates progenitor cells to create useful tissue with the purpose of growing illness modifying therapies. The Firm’s lead product candidate, FX-322, is designed to regenerate auditory hair cells to revive listening to operate. In a FX-322 Part half examine, statistically important and clinically significant enhancements in key measures of listening to operate in sufferers with sensorineural listening to loss have been noticed. The Firm is also evaluating further illnesses the place its PCA strategy may create useful tissue, together with a improvement program in a number of sclerosis.

Headquartered in Woburn, Mass., Frequency has a license and collaboration settlement with Astellas Pharma Inc. for FX-322, for which it retains U.S. rights, in addition to further collaboration agreements with tutorial and nonprofit analysis organizations together with The Scripps Analysis Institute, Massachusetts Eye and Ear, and the Massachusetts Institute of Expertise. For extra data, go to www.frequencytx.com and comply with Frequency on Twitter @Frequencytx.

Ahead-Trying Statements

This press launch incorporates forward-looking statements inside the that means of the Non-public Securities Litigation Reform Act of 1995. All statements contained on this press launch that don’t relate to issues of historic truth needs to be thought of forward-looking statements, together with with out limitation statements relating to sufficiency of the Firm’s money, money equivalents and short-term marketable securities, the meant objective of Quick Monitor designation, the therapy potential of FX-322, the design and enrollment of the Part 2a medical trial of FX-322, the timing of top-line knowledge from the Part 2a medical trial, estimates of the dimensions of the listening to loss inhabitants and inhabitants in danger for listening to loss, future milestone funds underneath the license and collaboration settlement with Astellas, the Firm’s capability to advance its listening to program and additional diversify its portfolio, the timing of the remyelination program, and the potential software of the PCA platform to different illnesses.

These forward-looking statements are based mostly on administration’s present expectations. These statements are neither guarantees nor ensures, however contain recognized and unknown dangers, uncertainties and different necessary elements which will trigger precise outcomes, efficiency or achievements to be materially totally different from any future outcomes, efficiency or achievements expressed or implied by the forward-looking statements, together with, however not restricted to, the next: the Firm has incurred and can proceed to incur important losses and isn’t and should by no means be worthwhile; want for extra funding to finish improvement and commercialization of any product candidate; the Firm’s dependence on the event of FX-322; the unproven strategy of the PCA platform; the prolonged, costly and unsure means of medical drug improvement and regulatory approval; restricted expertise efficiently acquiring advertising and marketing approval for and commercializing product candidates; the outcomes of earlier medical trials not being indicative of the outcomes from later medical trials; variations between preliminary or interim knowledge and remaining knowledge; hostile occasions or undesirable unintended effects; disruptions on the FDA and different regulatory companies; failure to establish further product candidates; new or modified laws; failure to keep up Quick Monitor designation for FX-322 and such designation failing to lead to quicker improvement or regulatory evaluation or approval; pricey and damaging litigation, together with associated to product legal responsibility, mental property or introduced by stockholders; dependence on Astellas Pharma Inc. for the event and commercialization of FX-322 outdoors of the USA; misconduct by workers or unbiased contractors; reliance on third events, together with to conduct medical trials and manufacture product candidates; compliance with legal guidelines and rules, together with healthcare and environmental, well being, and security legal guidelines and rules; failure to acquire, preserve and implement safety of patents and different mental property; safety breaches or failure to guard personal private data; attracting and retaining key personnel; and skill to handle development.

These and different necessary elements mentioned underneath the caption “Threat elements” within the Firm’s remaining prospectus filed with the Securities and Trade Fee (SEC) on October four, 2019 regarding its Registration Assertion on Kind S-1 and its different studies filed with the SEC may trigger precise outcomes to vary materially from these indicated by the forward-looking statements made on this press launch. Any such forward-looking statements characterize administration’s estimates as of the date of this press launch. Whereas the Firm could elect to replace such forward-looking statements in some unspecified time in the future sooner or later, it disclaims any obligation to take action, even when subsequent occasions trigger its views to alter. These forward-looking statements shouldn’t be relied upon as representing the Firm’s views as of any date subsequent to the date of this press launch.

1. Excludes the online proceeds of $79.2 million from the completion of the Firm’s IPO in October 2019.
2. The convertible most popular inventory was transformed into widespread inventory along with the Firm’s IPO in October 2019.
3. Non-controlling curiosity represents the popular inventory of the Firm’s Japanese subsidiary which was transformed into Firm widespread inventory along with the Firm’s IPO in October 2019.