Tetraphase Pharmaceuticals Reports Second-Quarter 2014 Financial Results

Completes Phase 3 Enrollment in cIAI; On Track to Report Top-Line Data in Early First Quarter 2015

WATERTOWN, Mass.--()--Tetraphase Pharmaceuticals, Inc. (NASDAQ:TTPH) today reported financial results and key operational highlights for the second quarter ended June 30, 2014. The Company's lead antibiotic candidate, eravacycline, is currently in Phase 3 development to treat bacterial infections, including those caused by many of the multidrug-resistant (MDR) Gram-negative bacteria highlighted as urgent public health threats by the Centers for Disease Control and Prevention (CDC).

“During the second quarter we made great progress in our eravacycline development program,” said Guy Macdonald, Tetraphase President and Chief Executive Officer. “We completed enrollment in the lead-in portion of IGNITE 2, our Phase 3 trial in complicated urinary tract infections (cUTI), and recently announced completion ahead-of-schedule of enrollment of IGNITE 1, our Phase 3 trial in complicated intra-abdominal infections (cIAI). We were also delighted that both the intravenous and oral formulations of eravacycline were granted Fast Track designation by the FDA for the treatment of cIAI and cUTI during the quarter.”

Mr. Macdonald added: “We’re looking forward to a number of important milestones over the next several quarters. In September 2014, we expect to report top-line results from the lead-in portion of IGNITE 2, which will be the first data on the IV-to-oral switch of eravacycline in cUTI patients and, we expect, will inform the selection of the oral dose to be taken forward into the pivotal portion of IGNITE 2. We also remain on track with our goals of reporting top-line results from IGNITE 1 in early first quarter 2015 and top-line results from the pivotal portion of IGNITE 2 in mid-2015, and our goal of filing for regulatory approval of eravacycline in the U.S. by the end of 2015.”

Second-Quarter 2014 Financial Results

For the second quarter of 2014, Tetraphase reported a net loss of $18.5 million or $0.71 per share compared to a net loss of $5.4 million or $0.26 per share for the same period in 2013.

Revenues for the second quarter of 2014 were $1.3 million compared to $3.7 million for the same period in 2013. Revenues for each period consisted of contract and grant revenue under three U.S. government awards for the development of Tetraphase compounds as potential countermeasures for the treatment of diseases caused by bacterial biothreat pathogens. These consist of an award from the Biomedical Advanced Research and Development Authority (BARDA) for eravacycline development and two awards from the National Institute of Allergy and Infectious Diseases (NIAID) for the development of the Company’s preclinical compound TP-271. The Company received the funds under these awards through subcontracts and a subaward from CUBRC Inc., an independent, not-for-profit research corporation that specializes in U.S. government-based contracts. The decrease in revenue during the second quarter of 2014 compared to the same period in the prior year was primarily due to timing of activities related to various clinical studies conducted under the Company’s subcontract with respect to the BARDA award during the quarter ended June 30, 2014, as compared to the quarter ended June 30, 2013.

Research and development (R&D) expenses for the second quarter of 2014 were $16.5 million, compared to $6.9 million for the same period in 2013. The increase in R&D expenses for the second quarter of 2014 compared to the same period in the prior year was primarily due to increased clinical activities and drug manufacturing associated with the Company’s two ongoing Phase 3 global clinical trials for eravacycline.

General and administrative (G&A) expenses for the second quarter of 2014 were $2.9 million compared to $1.8 million for the same period in 2013. The increase in G&A expenses was primarily due to an increase in personnel-related costs to support clinical and pre-commercialization efforts for eravacycline, which included additional hiring and an increase in stock-based compensation expense.

As of June 30, 2014, Tetraphase had cash and cash equivalents of $75.4 million and 25.9 million shares outstanding.

Second-Quarter and Recent Corporate Highlights

  • Completed patient enrollment in the lead-in portion of IGNITE 2. This two-part, Phase 3 clinical trial is evaluating the safety and efficacy of intravenous (IV) and oral formulations of eravacycline for the treatment of cUTI. The lead-in portion of this trial was designed to inform the selection of an oral dose to take forward into the pivotal portion of the trial. The Company anticipates announcing top-line data from the lead-in portion of IGNITE 2 in September 2014.
  • Completed patient enrollment ahead of schedule in IGNITE 1, the Company’s pivotal Phase 3 clinical trial evaluating the safety and efficacy of eravacycline in the treatment of cIAI. The Company expects to report top-line results from IGNITE 1 in early first quarter 2015.
  • Eravacycline granted Fast Track designation by the FDA for its IV and oral formulations and for both indications being pursued.
  • Strengthened the senior management team with the hiring of Maria Gawryl, Ph.D. as Vice-President, Regulatory Affairs and Quality.
  • Appointed Jeffrey A. Chodakewitz, M.D. to the Company's Board of Directors, bringing more than 30 years' experience in infectious disease clinical research and development to the Board.
  • Showcased diverse antibiotics portfolio with six scientific posters at the 24th European Congress of Clinical Microbiology and Infectious Diseases (ECCMID) in May 2014 in Barcelona, Spain. Presented data on multiple antibiotic candidates including eravacycline and TP-271 and preclinical data from the newest drug candidates discovered through the Company’s proprietary in-house antibiotic chemistry platform. Highlighted activity against some of the most difficult-to-treat Gram-negative pathogens, including species of Carbapenem-resistant Enterobacteriaceae (CRE), bacteria specifically identified by the CDC and the World Health Organization as urgent threats to public health.

About Tetraphase Pharmaceuticals, Inc.

Tetraphase is a clinical-stage biopharmaceutical company using its proprietary chemistry technology to create novel antibiotics for serious and life-threatening multidrug-resistant (MDR) bacterial infections, including those caused by many of the MDR Gram-negative bacteria highlighted as urgent public health threats by the Centers for Disease Control and Prevention (CDC). Tetraphase's lead product candidate, eravacycline, is being developed as a broad-spectrum intravenous and oral antibiotic in the IGNITE program (Investigating Gram-negative Infections Treated with Eravacycline). Under this program, two Phase 3 clinical trials are ongoing: IGNITE 1 for the indication of complicated intra-abdominal infections (cIAI) and IGNITE 2 for complicated urinary tract infections (cUTI). Tetraphase has created more than 3,000 novel tetracycline analogs using its proprietary technology platform; in addition to eravacycline, Tetraphase has generated multiple preclinical antibiotic candidates that are currently being evaluated for clinical suitability. Please visit www.tphase.com for more company information.

Forward-Looking Statements

Any statements in this press release about our future expectations, plans and prospects, including statements regarding our strategy, future operations, prospects, plans and objectives, and other statements containing the words “anticipates,” “believes,” “expects,” “plans,” “will” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: whether our cash resources will be sufficient to fund our continuing operations for the period anticipated whether results obtained in preclinical studies and early clinical trials will be indicative of results obtained in future clinical trials; whether eravacycline will advance through the clinical trial process on a timely basis and receive approval from the United States Food and Drug Administration or equivalent foreign regulatory agencies; whether, if eravacycline obtains approval, it will be successfully distributed and marketed; and other factors discussed in the “Risk Factors” section of our most recent quarterly report on Form 10-Q, filed with the Securities and Exchange Commission on August 12, 2014. In addition, the forward-looking statements included in this press release represent our views as of August 12, 2014. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

 
Tetraphase Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
       
Three Months Ended

Six months Ended

June 30, June 30,
  2014     2013     2014     2013  
 
Revenues $ 1,275   $ 3,722   $ 3,732   $ 6,422  
Operating expenses
Research and development 16,513 6,924 29,017 11,022
General and administrative   2,947     1,756     6,118     2,981  
Total operating expenses   19,460     8,680     35,135     14,003  
Loss from operations   (18,185 )   (4,958 )   (31,403 )   (7,581 )
Other income (expense)
Interest income 4 2 9 2
Interest expense (282 ) (470 ) (616 ) (901 )
Other income       -     24     263  
Other expense, net   (278 )   (468 )   (583 )   (636 )
Net loss $ (18,463 ) $ (5,426 ) $ (31,986 ) $ (8,217 )

Net loss per share - basic and diluted

$ (0.71 ) $ (0.26 ) $ (1.24 ) $ (0.73 )

Weighted-average number of common shares used in net loss per share - basic and diluted

  25,845     20,575     25,790     11,263  
 
 
Tetraphase Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
 

  June 30,  

  December 31,
2014 2013
Assets
Cash and cash equivalents $ 75,371 $ 102,712
Accounts receivable 1,343 1,706
Prepaid expenses and other current assets 1,774 1,002
Property and equipment, net 237 235
Other assets, noncurrent   228   231

Total assets

$ 78,953 $ 105,886
 
Liabilities and stockholders’ equity
Accounts payable and accrued expenses $ 12,683 $ 7,171
Total term loan 7,875 10,815
Total deferred revenue - 92
Stockholder's equity   58,395   87,808
Total liabilities and stockholders’ equity $ 78,953 $ 105,886

Contacts

Investor:
Argot Partners
Susan Kim, 212-600-1902
susan@argotpartners.com
or
Media:
Sam Brown Inc.
Mike Beyer, 773-463-4211
beyer@sambrown.com

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Contacts

Investor:
Argot Partners
Susan Kim, 212-600-1902
susan@argotpartners.com
or
Media:
Sam Brown Inc.
Mike Beyer, 773-463-4211
beyer@sambrown.com