Tetraphase Pharmaceuticals Reports Third-Quarter 2014 Financial Results

WATERTOWN, Mass.--()--Tetraphase Pharmaceuticals, Inc. (NASDAQ:TTPH) today reported financial results and key operating highlights for the third quarter ended September 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.

“Over the last several months we have made significant progress advancing our pivotal Phase 3 program for eravacycline. We announced positive data from the lead-in portion of IGNITE 2, our two-part, Phase 3 clinical trial in complicated urinary tract infections (cUTI), providing support for eravacycline as an IV-to-oral transition therapy. With patient dosing in the pivotal portion of IGNITE 2 underway, we remain on track to report top-line results in mid-2015,” said Guy Macdonald, Tetraphase President and Chief Executive Officer. “In IGNITE 1, our Phase 3 clinical trial in complicated intra-abdominal infections (cIAI), we are on track to report top-line results early in the first quarter of 2015. We continue to target submission of a New Drug Application for both indications by the end of 2015.”

“Importantly,” Mr. Macdonald continued, “we were also very pleased to have completed our recent equity financing raising approximately $81 million in net proceeds and having expanded our shareholder base. Proceeds from this financing have strengthened our balance sheet, will allow us to invest in pre-commercialization activities for eravacycline and, we expect, will fund our operations through at least the third quarter of 2016.”

Third-Quarter 2014 Financial Results

As of September 30, 2014, Tetraphase had cash and cash equivalents of $56.0 million and 26.0 million shares outstanding. In addition to this, the Company subsequently raised net proceeds of approximately $81.0 million, after underwriting discounts and estimated offering expenses, via the sale of an additional 4.5 million shares in a common stock offering in October 2014.

For the third quarter of 2014, Tetraphase reported a net loss of $14.2 million, or $0.55 per share, compared to a net loss of $10.1 million, or $0.49 per share, for the same period in 2013.

Revenues for the third quarter of 2014 were $2.3 million compared to $2.2 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.

Research and development (R&D) expenses for the third quarter of 2014 were $13.2 million, compared to $10.0 million for the same period in 2013. The increase in R&D expenses for the third quarter of 2014 compared to the same period in the prior year was primarily due to increased activities associated with the Company’s two ongoing Phase 3 global clinical trials for eravacycline.

General and administrative (G&A) expenses for the third quarter of 2014 were $3.1 million compared to $1.9 million for the same period in 2013. The increase in G&A expenses was primarily due to an increase in costs to support clinical and pre-commercialization efforts for eravacycline.

Third-Quarter and Recent Corporate Highlights

  • Reported positive data from the lead-in portion of IGNITE 2, a two-part, Phase 3 clinical trial evaluating the safety and efficacy of eravacycline for the treatment of cUTI with intravenous (IV)- to-oral transition therapy. 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.
  • Initiated pivotal portion of IGNITE 2 using the 1.5 mg/kg IV to 200 mg oral dose of eravacycline, for which top-line data is expected in mid-2015.
  • Completed patient enrollment in IGNITE 1, the Company’s pivotal Phase 3 clinical trial evaluating the safety and efficacy of eravacycline for the treatment of cIAI. The Company expects to report top-line results from IGNITE 1 early in the first quarter of 2015.
  • Highlighted eravacycline data and pipeline candidate profiles with nine scientific posters and one oral presentation at the 2014 Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC). Data were presented on the in vitro activity of eravacycline against several Gram-negative MDR bacteria, including Carbapenem-resistant Enterobacteriaceae, and the in vitro activity of preclinical candidate TP-271 against several pathogens, including Methicillin-resistant Staphylococcus aureus.
  • Presented data at IDWeek 2014, including a Tetraphase-sponsored research study in New York City demonstrating the in vitro activity of eravacycline against Gram-negative MDR strains of E. coli, Klebsiella pnuemoniae, Enterobacter spp., and Acinetobacter baumannii.
  • Completed the sale of 4.5 million shares of common stock in a follow-on public offering at a price to the public of $19.00 per share, resulting in net proceeds to the Company of approximately $81 million, after underwriting discounts and estimated offering expenses.

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 the indication of 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 November 10, 2014. In addition, the forward-looking statements included in this press release represent our views as of November 10, 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
September 30,
Nine Months Ended
September 30,
  2014     2013     2014     2013  
 
Revenues $ 2,294   $ 2,166   $ 6,026   $ 8,588  
Operating expenses
Research and development 13,188 9,992 42,205 21,014
General and administrative   3,086     1,860     9,204     4,841  
Total operating expenses   16,274     11,852     51,409     25,855  
Loss from operations   (13,980 )   (9,686 )   (45,383 )   (17,267 )
Other income (expense)
Interest income 3 3 13 5
 
Interest expense (229 ) (433 ) (845 ) (1,334 )
Other income       -     24     263  
Other expense, net   (226 )   (430 )   (808 )   (1,066 )
Net loss $ (14,206 ) $ (10,116 ) $ (46,191 ) $ (18,333 )
Net loss per share -basic and diluted $ (0.55 ) $ (0.49 ) $ (1.79 ) $ (1.27 )

Weighted-average number of common

shares used in net loss per share -basic and

diluted

  25,967     20,674     25,850     14,435  
Tetraphase Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
  September 30,
2014
    December 31,
2013
Assets
Cash and cash equivalents $ 55,997 $ 102,712
Accounts receivable 1,953 1,706
Prepaid expenses and other current assets 2,515 1,002
Property and equipment, net 314 235
Other assets, noncurrent   308   231
Total assets $ 61,087 $ 105,886
Liabilities and stockholders’ equity
Accounts payable and accrued expenses $ 9,261 $ 7,171
Total term loan 6,328 10,815
Total deferred revenue 24 92
Stockholder's equity   45,474   87,808
Total liabilities and stockholders’ equity $ 61,087 $ 105,886

Contacts

Investor:
Tetraphase Pharmaceuticals
Teri Dahlman, 617-600-7040
tdahlman@tphase.com
or
Argot Partners
Susan Kim, 212-600-1902
susan@argotpartners.com
or
Media:
Sam Brown Inc.
Mike Beyer, 773-463-4211
beyer@sambrown.com

Contacts

Investor:
Tetraphase Pharmaceuticals
Teri Dahlman, 617-600-7040
tdahlman@tphase.com
or
Argot Partners
Susan Kim, 212-600-1902
susan@argotpartners.com
or
Media:
Sam Brown Inc.
Mike Beyer, 773-463-4211
beyer@sambrown.com