8-K

 

 

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): May 8, 2019

 

 

Akcea Therapeutics, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   001-38137   47-2608175

(State or Other Jurisdiction

of Incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

22 Boston Wharf Road

9th Floor

Boston, MA

    02210

(Address of Principal Executive Offices)

    (Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 207-0202

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 Instructions 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class  

    Trading

    Symbol(s)

 

Name of each exchange on which registered

Common stock

  AKCA   NASDAQ

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On May 8, 2019, Akcea Therapeutics, Inc. (the “Company”) issued a press release announcing the Company’s financial results for the quarter ended March 31, 2019. In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles (GAAP), the Company also discloses non-GAAP results of operations, which are adjusted from GAAP to exclude non-cash compensation related to stock awards. The Company is presenting non-GAAP information excluding non-cash compensation related to stock awards because the Company believes it is useful for investors in assessing the Company’s operating results. A copy of the release is furnished with this report as an exhibit pursuant to “Item 2.02. Results of Operations and Financial Condition” of Form 8-K in accordance with SEC Release Nos. 33-8216 and 34-47583.

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “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 it 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
  Number  
  

Description

 99.1

  

Press Release dated May 8, 2019


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 thereunto duly authorized.

 

   

AKCEA THERAPEUTICS, INC.

Date: May 8, 2019

   

By:

 

 /s/ Paula Soteropoulos                                                 

     

 Paula Soteropoulos

     

 Chief Executive Officer

EX-99.1

Exhibit 99.1

 

LOGO

Akcea Reports Financial Results and Highlights for First Quarter 2019

Achieved First Quarter 2019 TEGSEDI® (inotersen) Global Net Product Revenues of $7 Million

Novartis exercised its option to license AKCEA-APO(a)-LRx

Received marketing authorization for WAYLIVRA® (volanesorsen) in E.U.

Conference Call Webcast Wednesday, May 8, 4:30 p.m. ET at www.akceatx.com

 

Boston, Mass., May 8th, 2019 (GLOBE NEWSWIRE) -- Akcea Therapeutics, Inc. (NASDAQ: AKCA), an affiliate of Ionis Pharmaceuticals, Inc., focused on developing and commercializing drugs to treat patients with serious and rare diseases, today reported financial results for the first quarter ended March 31, 2019. Due to the one-time license fee from Novartis, the company reported operating income for the first quarter ended March 31, 2019 on a GAAP basis of $26 million and on a non-GAAP basis of $45 million. Akcea had $322 million of cash, cash equivalents and short-term investments as of March 31, 2019.

“We had a highly productive start to 2019 and are executing on our plans as a commercial organization. We are building a multi-product company with the approval of WAYLIVRA in the E.U. and continuing with our launch of TEGSEDI,” said Paula Soteropoulos, chief executive officer of Akcea. “We are seeing positive momentum in the launch of TEGSEDI and continuing to make progress on our broad pipeline of products for patients with ATTR amyloidosis and cardiometabolic diseases. We remain steadfast in our goal of continuing to build Akcea into a trusted, patient-focused, global company delivering important and life-changing therapies to patients with rare and serious diseases.”

“We have achieved $7 million in product sales in our first full quarter of the TEGSEDI launch. Our strong cash balance supports our commercial and development efforts. We are able to realize a meaningful operational efficiency, including launching multiple products in the EU,” said Michael MacLean, chief financial officer.

Upcoming Events

 

   

Launch of TEGSEDI in additional E.U. countries

 

   

Launch of WAYLIVRA in the E.U., beginning with Germany

 

   

Report top line results from Phase 3 study of WAYLIVRA in familial partial lipodystrophy, or FPL, in the middle of this year

 

   

Report top line results from the Phase 1/2 AKCEA-TTR-LRx study in 2H 2019

 

   

Initiate AKCEA-TTR-LRx Phase 3 program in 2H 2019

 

   

Report top line results from Phase 2 studies of AKCEA-ANGPTL3-LRx and AKCEA-APOCIII-LRx in 1H 2020

Recent Events

 

   

Launched TEGSEDI in the U.S., Germany and Canada to treat patients with polyneuropathy of hATTR amyloidosis

 

   

Received conditional marketing authorization following a positive CHMP opinion for WAYLIVRA in the E.U., earning a $6M milestone payment from PTC Therapeutics


   

Licensed AKCEA-APO(a)-LRx to Novartis resulting in a $150 million license fee to Akcea split equally with Ionis

 

   

Highlighted the long-term efficacy and safety of TEGSEDI in an oral presentation at the American Academy of Neurology (AAN) Annual Meeting

 

   

Completed enrollment in the Phase 2 studies of AKCEA-ANGPTL3-LRx and AKCEA-APOCIII-LRx

 

   

Presented at the American College of Cardiology (ACC) on the benefits of treatment with TEGSEDI

Financial Results

All non-GAAP amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the reconciliation of non-GAAP and GAAP measures, which is provided later in this release.

Revenue

Akcea’s total revenue for the first quarter ended March 31, 2019 was $164 million, which was comprised of product revenue and research and development and license revenue. Revenue from sales of TEGSEDI in the first quarter ended March 31, 2019 was $7 million. Akcea’s research and development and license revenue for the first quarter ended March 31, 2019 was $157 million. Research and development and license revenue was primarily related to the $150 million license fee the company earned as a result of Novartis’ exercise of its option to license AKCEA-APO(a)-LRx. Additionally, Akcea recognized research and development revenue related to the amortization of the upfront payment the company received upon the initiation of the collaboration agreement.

Expenses

Akcea’s operating expenses, inclusive of the reimbursement due from Ionis through the companies’ profit/loss share arrangement, for the three months ended March 31, 2019 on a GAAP basis were $138 million, and on a non-GAAP basis were $119 million. These amounts compare to GAAP operating expenses of $47 million and non-GAAP operating expenses of $41 million for the same period in 2018. These increases primarily relate to the one-time $75 million sublicense fee paid to Ionis as a result of Novartis’ exercise of its option to license AKCEA-APO(a)-LRx, higher development costs, including for AKCEA-TTR-LRx, and commercialization costs for TEGSEDI and WAYLIVRA in the first quarter ended March 31, 2019 compared to the same period in 2018.

Net Income (Loss)

Akcea reported net income of $27 million on a GAAP basis for the three months ended March 31, 2019, compared to a net loss of $30 million for the same period in 2018. Akcea reported non-GAAP net income of $46 million for the three months ended March 31, 2019, compared to a non-GAAP net loss of $23 million for the same period in 2018. This increase in non-GAAP net income was primarily due to the $150 million license fee the company earned as a result of Novartis’ exercise of its option to license AKCEA-APO(a)-LRx and commercial product revenue which was partially offset by the sublicense fee to Ionis of $75 million, increased operating expenses related to commercialization costs for TEGSEDI and WAYLIVRA and higher development costs.

For the three months ended March 31, 2019, basic net income per share of common stock owned by Ionis and others was $0.35 and $0.15, respectively. For the three months ended March 31, 2019, diluted net income per share of common stock owned by Ionis and others was $0.34 and $0.15, respectively. For the three months ended March 31, 2018, basic and diluted net loss per share of common stock owned by Ionis and others was $0.44. All amounts are on a GAAP basis.

Balance Sheet

As of March 31, 2019, Akcea had cash, cash equivalents and short-term investments of $322 million compared to $253 million at December 31, 2018, which the Company believes is sufficient to fund global commercial efforts and to fund progression of Akcea’s current pipeline to decision events.

Conference Call

At 4:30 p.m. Eastern Time today, May 8, 2019, Akcea will conduct a live webcast conference call to discuss this earnings release and related activities. Interested parties may listen to the call by dialing (855) 237-2439, passcode 4357317 or access the webcast at www.akceatx.com. A webcast replay will be available for a limited time at the same address.


ABOUT AKCEA THERAPEUTICS

Akcea Therapeutics, Inc., an affiliate of Ionis Pharmaceuticals, Inc. (NASDAQ: IONS), is a biopharmaceutical company focused on developing and commercializing drugs to treat patients with serious and rare diseases. Akcea is commercializing TEGSEDI® (inotersen) and advancing a mature pipeline of novel drugs, including WAYLIVRA® (volanesorsen), AKCEA-APO(a)-LRx, AKCEA-ANGPTL3-LRx, AKCEA-APOCIII-LRx, and AKCEA-TTR-LRx, with the potential to treat multiple diseases. All six drugs were discovered by and are being co-developed with Ionis, a leader in antisense therapeutics, and are based on Ionis’ proprietary antisense technology. TEGSEDI is approved in the U.S., E.U. and Canada. WAYLIVRA is approved in the E.U. and is currently in Phase 3 clinical development for the treatment of people with familial partial lipodystrophy, or FPL. Akcea is building the infrastructure to commercialize its drugs globally. Akcea is a global company headquartered in Boston, Massachusetts. Additional information about Akcea is available at www.akceatx.com and you can follow us on twitter at @akceatx.

FORWARD-LOOKING STATEMENT

This press release includes forward-looking statements regarding the business of Akcea Therapeutics, Inc. and the therapeutic and commercial potential of TEGSEDI® (inotersen), WAYLIVRA® (volanesorsen) and other products in development. Any statement describing Akcea’s goals, expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs. Akcea’s forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements. Although Akcea’s forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known by Akcea. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Akcea’s programs are described in additional detail in Akcea’s annual report on Form 10-K, and its most recent quarterly report on Form 10-Q, which are on file with the SEC. Copies of these and other documents are available from the Company.

In this press release, unless the context requires otherwise, “Ionis”, “Akcea,” “Company,” “Companies,” “we,” “our,” and “us” refers to Ionis Pharmaceuticals and/or Akcea Therapeutics.

Ionis Pharmaceuticals is a trademark of Ionis Pharmaceuticals, Inc. Akcea Therapeutic® TEGSEDI® and WAYLIVRA® are trademarks of Akcea Therapeutics, Inc.


AKCEA THERAPEUTICS INC.

SELECTED FINANCIAL INFORMATION

Condensed Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Data)

 

     Three Months Ended  
     March 31,  
     2019     2018  
     (unaudited)  

Revenue:

    

Product revenue, net

   $ 6,754     $ -  

R&D and license revenue

     157,062       17,108  
  

 

 

   

 

 

 

Total revenue

     163,816       17,108  

Expenses:

    

Cost of sales and license

     2,444       -  

Research and development

     99,619       27,970  

Selling, general and administrative

     44,602       19,465  

Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.

     (9,056     -  
  

 

 

   

 

 

 

Total expenses

     137,609       47,435  
  

 

 

   

 

 

 

Income (loss) from operations

     26,207       (30,327

Other income (expense):

    

Investment income

     1,224       868  

Other expense

     (112     (168
  

 

 

   

 

 

 

Income (loss) before income tax expense

     27,319       (29,627

Income tax expense

     (132     -  
  

 

 

   

 

 

 

Net income (loss)

   $ 27,187     $ (29,627
  

 

 

   

 

 

 

Net income (loss) per share of common stock owned by Ionis, basic

   $ 0.35     $ (0.44
  

 

 

   

 

 

 

Weighted-average shares of common stock outstanding owned by Ionis, basic

                 68,581,967                   45,447,879  
  

 

 

   

 

 

 

Net income (loss) per share of common stock owned by others, basic

   $ 0.15     $ (0.44
  

 

 

   

 

 

 

Weighted-average shares of common stock outstanding owned by others, basic

     22,126,363       21,171,372  
  

 

 

   

 

 

 

Net income (loss) per share of common stock owned by Ionis, diluted

   $ 0.34     $ (0.44
  

 

 

   

 

 

 

Weighted-average shares of common stock outstanding owned by Ionis,

  diluted

     68,581,967       45,447,879  
  

 

 

   

 

 

 

Net income (loss) per share of common stock owned by others, diluted

   $ 0.15     $ (0.44
  

 

 

   

 

 

 

Weighted-average shares of common stock outstanding owned by others,

  diluted

     25,545,975       21,171,372  
  

 

 

   

 

 

 


AKCEA THERAPEUTICS INC.

Reconciliation of GAAP to Non-GAAP Basis:

Condensed Consolidated Operating Expenses, Loss from Operations, and Net Loss

(In Thousands)

 

                                                 
     Three Months Ended  
     March 31,  
     2019      2018  
     (unaudited)  

As reported operating expenses according to GAAP

   $ 137,609      $ 47,435  

Excluding compensation expense related to equity awards

     18,560        6,384  
  

 

 

    

 

 

 

Non-GAAP operating expenses

   $ 119,049      $ 41,051  
  

 

 

    

 

 

 

As reported income (loss) from operations according to GAAP

   $ 26,207      $ (30,327

Excluding compensation expense related to equity awards

     18,560        6,384  
  

 

 

    

 

 

 

Non-GAAP income (loss) from operations

   $ 44,767      $ (23,943
  

 

 

    

 

 

 

As reported net income (loss) according to GAAP

   $ 27,187      $ (29,627

Excluding compensation expense related to equity awards

     18,560        6,384  
  

 

 

    

 

 

 

Non-GAAP net income (loss)

   $ 45,747      $ (23,243
  

 

 

    

 

 

 

Reconciliation of GAAP to non-GAAP Basis

As illustrated in the Selected Financial Information in this press release, non-GAAP operating expenses, non-GAAP income (loss) from operations, and non-GAAP net income (loss) were adjusted from GAAP to exclude compensation expense related to equity awards, which are non-cash expenses. Akcea has regularly reported non-GAAP measures for operating results as non-GAAP results. These measures are provided as supplementary information and are not a substitute for financial measures calculated in accordance with GAAP. Akcea reports these non-GAAP results to better enable financial statement users to assess and compare its historical performance and project its future operating results and cash flows. Further, the presentation of Akcea’s non-GAAP results is consistent with how Akcea’s management internally evaluates the performance of its operations.


AKCEA THERAPEUTICS INC.

Condensed Consolidated Balance Sheets

(In Thousands)

 

                                                             
     March 31,      December 31,  
     2019      2018  
     (unaudited)  

Assets:

     

Cash and cash equivalents

   $ 201,027      $ 86,454  

Short-term investments

     120,765        166,155  

Accounts receivable

     10,269        4,597  

Receivable from Ionis Pharmaceuticals, Inc.

     7,206        -  

Other current assets

     11,618        10,029  

Property, plant and equipment, net

     5,336        5,696  

Operating lease right-of-use-assets

     11,602        -  

Intangible assets, net

     87,468        88,914  

Deposits and other assets

     3,426        3,416  
  

 

 

    

 

 

 

Total assets

   $ 458,717      $ 365,261  
  

 

 

    

 

 

 

Liabilities and stockholders’ equity:

     

Accounts payable

   $ 6,153      $ 12,068  

Payable to Ionis Pharmaceuticals, Inc.

     -        18,901  

Accrued compensation

     6,300        8,583  

Accrued liabilities

     17,255        14,787  

Current portion of deferred revenue

     21,539        25,354  

Other current liabilities

     1,863        968  

Long-term portion of lease liabilities

     15,018        4,442  

Long-term portion of deferred revenue

     1,725        3,434  

Stockholders’ equity

     388,864        276,724  
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 458,717      $ 365,261  
  

 

 

    

 

 

 

Media and Investor Contact:

Kathleen Gallagher

Vice President of Corporate Communications and Investor Relations

617.207.8509

kgallagher@akceatx.com

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