Full Press Release Details
Provides Business Update and Reports Third Quarter Financial Results for Fiscal 2018
Cranbury, NJ - August 14, 2018 - Oncobiologics,
Inc. (NASDAQ: ONS) today reported financial results and business highlights for its three and nine months ended June 30, 2018.
"We continue to make great progress in advancing the ONS-5010
program, which is our innovative monoclonal antibody (mAb) product candidate. This program is expected to begin enrolling patients
in a clinical trial later this year," commented Lawrence A. Kenyon, President and Chief Executive Officer of Oncobiologics.
"During the third quarter of fiscal 2018, we entered into
our first CDMO contract," continued Mr. Kenyon. "We believe that as the CDMO business scales over time it may allow
us to lower the cost to manufacture our internal programs, while also generating cash flow that we can use to invest in the development
of our product candidates. We also closed on a $15.0 million private placement, and converted the majority of our outstanding convertible
preferred stock. These capital resources are supporting the advancement of our ONS-5010 program as we move into the clinic,"
concluded Mr. Kenyon.
Financial Highlights for the Fiscal Third Quarter Ended June
For the fiscal third quarter ended June 30, 2018, the Company
reported a net loss attributable to common stockholders of $9.1 million, or $0.26 per diluted share, compared to $5.3 million,
or $0.22 per diluted share, for the same period of 2017. For the three months ended June 30, 2018, net loss attributable to common
stockholders includes $0.2 million of non-cash stock-based compensation, $0.8 million of depreciation and amortization, $0.2 million
of noncash interest expense, $0.1 million of expense from an increase in the fair value of warrant liability, and a $0.7 million
stock dividend for the Company's Series A convertible preferred stock. For the three months ended June 30, 2017, net loss
attributable to common stockholders included $2.1 million of non-cash stock-based compensation expense, $0.7 million of depreciation
and amortization, $1.3 million of noncash interest expense, and $3.8 million of income from a decrease in the fair value of warrant
For the fiscal third quarter ended June 30, 2018, the Company
reported an adjusted net loss attributable to common stockholders of $7.1 million, or $0.20 per diluted share, as compared to an
adjusted net loss of $5.0 million, or $0.20 per diluted share, in the same period of 2017. The primary reason for the increase
in adjusted net loss attributable to common stockholders from the year earlier period is higher research and development expenses
related to the initiation of the ONS-5010 clinical development program in fiscal 2018.
At June 30, 2018, the Company had cash of $11.8 million, compared
to $3.2 million at September 30, 2017. The increase in cash is primarily attributable to the closing of a $15.0 million private
placement of shares of its common stock and warrants in the third quarter of fiscal 2018 with GMS Tenshi Holdings Pte. Limited,
a Singapore private limited company and the Company's controlling stockholder and strategic partner.
About Oncobiologics, Inc. and its BioSymphony Platform
Oncobiologics is a clinical-stage biopharmaceutical company
focused on identifying, developing, manufacturing and commercializing complex monoclonal antibody (mAb) therapeutics. Oncobiologics
is advancing a pipeline of innovative and biosimilar product candidates, three of which are currently in, or about to enter, clinical
development. By leveraging its proprietary BioSymphony Platform, Oncobiologics is able to produce high-quality innovative
and biosimilar mAb candidates in an efficient and cost-effective manner. The BioSymphony engine is particularly suitable for developing
technically challenging and commercially attractive mAbs to meet the need for clinically important yet affordable drugs. The BioSymphony
Platform is used for both in-house programs as well as engaging spare capacity to provide external CDMO services. Led by a team
of biopharmaceutical experts, Oncobiologics operates from a state-of-the-art fully integrated research, development, and manufacturing
facility in Cranbury, New Jersey. For more information, please visit www.oncobiologics.com.
Non-GAAP Financial Measure - Adjusted Net Loss Attributable
to Common Stockholders
Oncobiologics prepares its consolidated financial statements
in conformity with accounting principles generally accepted in the United States of America (GAAP) and pursuant to accounting requirements
of the Securities and Exchange Commission. In an effort to provide investors with additional information regarding the results
and to provide a meaningful period-over-period comparison of Oncobiologics financial performance, Oncobiologics sometimes uses
non-GAAP financial measures (NGFM) as defined by the Securities and Exchange Commission. In this press release, Oncobiologics uses
the NGFM, "adjusted net loss attributable to common stockholders." Management uses this NGFM because it adjusts for
certain transactions management believes are not related to the Company's core business or events that may not recur, such
as losses from extinguishment of debt, sales of state net operating losses, as well as the settlement of a clinical development
contract in connection with the decision to postpone Phase 3 clinical trials of two biosimilar programs, as well as significant
non-cash items that impact financial results but not cash flows, such as the recognition of the beneficial conversion feature due
to the issuance of Series A Convertible Preferred Stock to GMS Tenshi and related stock dividends, stock-based compensation expense,
depreciation and amortization expense, interest expense, and fair value measurements for the Company's equity and debt securities.
Management used this NGFM to evaluate Oncobiologics' financial performance against internal budgets and targets. Management
believes that this NGFM is useful for evaluating Oncobiologics core operating results and facilitating comparison across reporting
periods. Oncobiologics believes this NGFM should be considered in addition to, and not in lieu of, GAAP financial measures. Oncobiologics
NGFM may be different from the same NGFM used by other companies.
For additional details on Oncobiologics' financial performance
during the quarter, please see the Company's filings with the Securities and Exchange Commission.
Forward-Looking Statements
This press release contains forward-looking statements. All
statements other than statements of historical facts are "forward-looking statements," including those relating to
future events. In some cases, you can identify forward-looking statements by terminology such as "may," "might,"
"will," "should," "expect," "plan," "anticipate," "project,"
"believe," "estimate," "predict," "potential," "intend" or "continue,"
the negative of terms like these or other comparable terminology, and other words or terms of similar meaning. These include statements
about the ability to conduct successful clinical trials for ONS-5010, to execute on its new CDMO strategy and generate revenues
therefrom, and the effects on the Company's product candidate pipeline. Although Oncobiologics believes that it has a reasonable
basis for forward-looking statements contained herein, they are based on current expectations about future events affecting the
Company and are subject to risks, uncertainties and factors relating to its operations and business environment, all of which are
difficult to predict and many of which are beyond its control. Therefore, they may cause actual results to differ materially from
those expressed or implied by forward-looking statements in this press release. All forward-looking statements included in this
press release are expressly qualified in their entirety by the foregoing cautionary statements. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the date hereof. Oncobiologics does not undertake any
obligation to update, amend or clarify these forward-looking statements whether as a result of new information, future events or
otherwise, except as may be required under applicable securities law.
| Oncobiologics: | Lawrence A. Kenyon |
| LawrenceKenyon@oncobiologics.com | |
| Investors: | Jeremy Feffer |
| Managing Director | |
| LifeSci Advisors, LLC | |
| 212-915-2568 | |
| Jeremy@LifeSciAdvisors.com |
| Oncobiologics, Inc. |
| Consolidated Statements of Operations |
| (Amounts in thousands, except per share data) |
| (Unaudited) |
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Collaboration revenues | $ | 772 | $ | 303 | $ | 2,316 | $ | 909 | ||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 5,796 | 4,158 | 11,355 | 21,505 | ||||||||||||
| General and administrative | 2,196 | 3,482 | 8,192 | 12,374 | ||||||||||||
| 7,992 | 7,640 | 19,547 | 33,879 | |||||||||||||
| Loss from operations | (7,220 | ) | (7,337 | ) | (17,231 | ) | (32,970 | ) | ||||||||
| Interest expense, net | 1,147 | 1,745 | 2,786 | 3,478 | ||||||||||||
| Loss on extinguishment of debt | - | - | 1,252 | - | ||||||||||||
| Change in fair value of warrant liability | 65 | (3,751 | ) | (226 | ) | (3,976 | ) | |||||||||
| Loss before income taxes | (8,432 | ) | (5,331 | ) | (21,043 | ) | (32,472 | ) | ||||||||
| Income tax (benefit) expense | - | - | (3,151 | ) | 4 | |||||||||||
| Net loss | (8,432 | ) | (5,331 | ) | (17,892 | ) | (32,476 | ) | ||||||||
| Recognition of beneficial conversion feature upon issuance of Series A convertible preferred stock | - | - | (15,737 | ) | - | |||||||||||
| Series A convertible preferred stock dividends and related settlement | (653 | ) | - | (1,740 | ) | - | ||||||||||
| Net loss attributable to common stockholders | $ | (9,085 | ) | $ | (5,331 | ) | $ | (35,369 | ) | $ | (32,476 | ) | ||||
| Per share information: | ||||||||||||||||
| Net loss per share of common stock, basic | $ | (0.26 | ) | $ | (0.22 | ) | $ | (1.24 | ) | $ | (1.37 | ) | ||||
| Net loss per share of common stock, diluted | $ | (0.26 | ) | $ | (0.22 | ) | $ | (1.24 | ) | $ | (1.53 | ) | ||||
| Weighted average shares outstanding, basic | 34,540 | 24,442 | 28,423 | 23,788 | ||||||||||||
| Weighted average shares outstanding, diluted | 34,540 | 24,442 | 28,423 | 23,814 |
| Oncobiologics, Inc. |
| Consolidated Balance Sheet Data (Amounts in thousands) |
| (Unaudited) |
| June 30, | September 30, | |||||||
| 2018 | 2017 | |||||||
| Cash | $ | 11,797 | $ | 3,186 | ||||
| Total assets | $ | 34,086 | $ | 20,734 | ||||
| Current liabilities | $ | 32,263 | $ | 28,738 | ||||
| Series A convertible preferred stock | $ | 3,935 | $ | 2,924 | ||||
| Total stockholders' deficit | $ | (13,200 | ) | $ | (33,651 | ) |
| Oncobiologics, Inc. |
| Reconciliation Between Reported Net Loss (GAAP) and Adjusted Net Loss (Non-GAAP), in each case Attributable to Common Stockholders |
| (Amounts in thousands, except per share data) |
| (Unaudited) |
| Three Months EndedJune 30, | Nine Months Ended June 30, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net loss attributable to common stockholders, as reported (GAAP) | $ | (9,085 | ) | $ | (5,331 | ) | $ | (35,369 | ) | $ | (32,476 | ) | ||||
| Adjustments for reconciled items: | ||||||||||||||||
| Stock-based compensation, non-cash | 234 | 2,122 | 1,824 | 6,913 | ||||||||||||
| Depreciation and amortization | 822 | 672 | 2,230 | 2,022 | ||||||||||||
| Noncash interest expense | 231 | 1,332 | 1,201 | 2,310 | ||||||||||||
| Loss on extinguishment of debt | - | - | 1,252 | - | ||||||||||||
| Change in fair value of warrant liability | 65 | (3,751 | ) | (226 | ) | (3,976 | ) | |||||||||
| Income tax benefit from sale of New Jersey NOLs | - | - | (3,151 | ) | - | |||||||||||
| Recognition of Series A convertible preferred stock beneficial conversion feature | - | - | 15,737 | - | ||||||||||||
| Series A convertible preferred stock dividends | 653 | - | 1,740 | - | ||||||||||||
| Settlement of clinical development contract | - | - | (3,229 | ) | - | |||||||||||
| Adjusted net loss attributable to common stockholders (non-GAAP) | $ | (7,080 | ) | $ | (4,956 | ) | $ | (17,991 | ) | $ | (25,207 | ) | ||||
| Net loss attributable to common stockholders per share of common stock - diluted, as reported (GAAP) | $ | (0.26 | ) | $ | (0.22 | ) | $ | (1.24 | ) | $ | (1.53 | ) | ||||
| Adjustments for reconciled items: | ||||||||||||||||
| Stock-based compensation, non-cash | 0.01 | 0.09 | 0.06 | 0.29 | ||||||||||||
| Depreciation and amortization | 0.02 | 0.03 | 0.08 | 0.09 | ||||||||||||
| Noncash interest expense | 0.01 | 0.05 | 0.04 | 0.10 | ||||||||||||
| Loss on extinguishment of debt | - | - | 0.04 | - | ||||||||||||
| Change in fair value of warrant liability | - | (0.15 | ) | (0.01 | ) | (0.17 | ) | |||||||||
| Income tax benefit from sale of New Jersey NOLs | - | - | (0.11 | ) | - | |||||||||||
| Recognition of Series A convertible preferred stock beneficial conversion feature | - | - | 0.55 | - | ||||||||||||
| Series A convertible preferred stock dividends | 0.02 | - | 0.06 | - | ||||||||||||
| Settlement of clinical development contract | - | - | (0.11 | ) | - | |||||||||||
| Adjusted net loss attributable to common stockholders per share of common stock-diluted (non-GAAP) | $ | (0.20 | ) | $ | (0.20 | ) | $ | (0.64 | ) | $ | (1.22 | ) |