Full Press Release Details
Reports Second Quarter Financial Results for Fiscal 2018
Cranbury, NJ - May 15, 2018 - Oncobiologics,
Inc. (NASDAQ: ONS) today reported financial results and business highlights for its three and six months ended March 31, 2018.
Oncobiologics' Chairman and Chief Executive Officer Dr.
Pankaj Mohan commented, "I am excited to report that our pipeline continues to offer significant opportunities to generate
stockholder value. We recently entered into an agreement for a $15.0 million capital raise that will be used to advance the development
of our portfolio, including ONS-5010, and support our operations through the end of this calendar year and have already received
$7.5 million of the proceeds.
"We continue to make progress with the ONS-5010 development
program and expect to initiate a clinical trial in 2018. Additionally, we are advancing our pre-clinical biosimilar product candidates
and continue to engage with potential partners to lead the Phase 3 clinical trials for ONS-3010 and ONS-1045," continued
"During the second quarter of fiscal 2018, we made progress
implementing our new strategy to leverage our BioSymphony Platform to accelerate and maximize commercial revenues from our core
expertise in drug development and manufacturing. The interest in leveraging our extensive development and manufacturing platform
among potential biotech customers has been extremely positive. We expect to enter into our first customer agreement for our new
contract development and manufacturing (CDMO) business and start recognizing revenue in the near future," concluded Dr. Mohan.
Anticipated Milestones (calendar year):
Financial Highlights for the Fiscal Second Quarter Ended
For the fiscal second quarter ended March 31, 2018, the Company
reported a net loss attributable to common stockholders of $8.6 million, or $0.34 per diluted share, compared to $8.0 million,
or $0.38 per diluted share for the same period of 2017. For the three months ended March 31, 2018, net loss attributable to common
stockholders includes $0.3 million of income from non-cash stock-based compensation, $0.7 million of depreciation and amortization,
$0.2 million of income from a decrease in the fair value of warrant liability and a $0.4 million beneficial conversion charge related
to the Company's Series A convertible preferred stock. For the three months ended March 31, 2017, net loss attributable to
common stockholders included $2.3 million of non-cash stock-based compensation expense, $0.7 million of depreciation and amortization
and $1.0 million of income from a decrease in the fair value of warrant liability.
For the fiscal second quarter ended March 31, 2018, the Company
reported an adjusted net loss attributable to common stockholders of $8.0 million, or $0.32 per diluted share, as compared to an
adjusted net loss of $6.1 million, or $0.29 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 preparations to move ONS-5010 into clinical development in 2018.
At March 31, 2018, the Company had cash of $5.9 million, compared
to $3.2 million at September 30, 2017. On May 14, 2018, the Company announced the closing of the first tranche of its $15.0 million
private placement offering, receiving $7.5 million in aggregate gross proceeds.
Nasdaq Listing Update
The Company received formal notice on May 14, 2018 that the
Nasdaq Hearings Panel has granted the Company's request for an extension through June 26, 2018 to evidence compliance with
all applicable requirements for continued listing on Nasdaq, including the applicable $35.0 million market capitalization requirement.
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. The Company
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, stock-based compensation expense, depreciation and amortization
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 of the Company's pipeline to generate stockholder value, the intended use and effects of the proceeds from
the private placement, including receipt of the second tranche of proceeds, its new strategy and anticipated milestones, in particular
the ability to execute on its new CDMO strategy and generate revenues therefrom and have it be cash flow positive, the ability
to receive regulatory approval and generate revenues in emerging markets, the ability to find partners to conduct Phase 3 trials
for its lead biosimilar assets, and the ability to conduct successful clinical trials for ONS-5010, ONS-4010 and ONS 3040, among
others. 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 |
| Chief Financial Officer | |
| LawrenceKenyon@oncobiologics.com | |
| Investors: | Jeremy Feffer |
| Managing Director | |
| LifeSci Advisors, LLC | |
| 212-915-2568 | |
| Jeremy@LifeSciAdvisors.com |
Consolidated Statements of Operations
(Amounts in thousands,
except per share data)
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Collaboration revenues | $ | 772 | $ | 303 | $ | 1,544 | $ | 606 | ||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 5,156 | 4,117 | 5,559 | 17,347 | ||||||||||||
| General and administrative | 2,447 | 4,024 | 5,996 | 8,892 | ||||||||||||
| 7,603 | 8,141 | 11,555 | 26,239 | |||||||||||||
| Loss from operations | (6,831 | ) | (7,838 | ) | (10,011 | ) | (25,633 | ) | ||||||||
| Interest expense, net | 921 | 1,244 | 1,639 | 1,733 | ||||||||||||
| Loss on extinguishment of debt | - | - | 1,252 | - | ||||||||||||
| Change in fair value of warrant liability | (212 | ) | (1,036 | ) | (291 | ) | (226 | ) | ||||||||
| Loss before income taxes | (7,540 | ) | (8,046 | ) | (12,611 | ) | (27,140 | ) | ||||||||
| Income tax (benefit) expense | - | - | (3,151 | ) | 4 | |||||||||||
| Net loss | (7,540 | ) | (8,046 | ) | (9,460 | ) | (27,144 | ) | ||||||||
| Recognition of beneficial conversion feature upon sale of Series A preferred stock | (381 | ) | - | (15,737 | ) | - | ||||||||||
| Series A convertible preferred stock dividends and related settlement | (637 | ) | - | (1,087 | ) | - | ||||||||||
| Net loss attributable to common stockholders | $ | (8,558 | ) | $ | (8,046 | ) | $ | (26,284 | ) | $ | (27,144 | ) | ||||
| Per share information: | ||||||||||||||||
| Net loss per share of common stock, basic | $ | (0.33 | ) | $ | (0.34 | ) | $ | (1.04 | ) | $ | (1.16 | ) | ||||
| Net loss per share of common stock, diluted | $ | (0.34 | ) | $ | (0.38 | ) | $ | (1.05 | ) | $ | (1.16 | ) | ||||
| Weighted average shares outstanding, basic | 25,733 | 23,724 | 25,364 | 23,457 | ||||||||||||
| Weighted average shares outstanding, diluted | 25,733 | 23,801 | 25,364 | 23,496 |
Consolidated Balance Sheet Data
| March 31, | September 30, | |||||||
| 2018 | 2017 | |||||||
| Cash | $ | 5,936 | $ | 3,186 | ||||
| Total assets | $ | 27,787 | $ | 20,734 | ||||
| Current liabilities | $ | 31,752 | $ | 28,738 | ||||
| Long-term debt | $ | 128 | $ | 13,383 | ||||
| Series A convertible preferred stock | $ | 18,295 | $ | 2,924 | ||||
| Total stockholders' deficit | $ | (33,565 | ) | $ | (33,651 | ) |
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)
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net loss attributable to common stockholders, as reported (GAAP) | $ | (8,558 | ) | $ | (8,046 | ) | $ | (26,284 | ) | $ | (27,144 | ) | ||||
| Adjustments for reconciled items: | ||||||||||||||||
| Stock-based compensation, non-cash | (300 | ) | 2,327 | 1,590 | 4,791 | |||||||||||
| Depreciation and amortization | 731 | 680 | 1,408 | 1,350 | ||||||||||||
| Loss on extinguishment of debt | - | - | 1,252 | - | ||||||||||||
| Change in fair value of warrant liability | (212 | ) | (1,036 | ) | (291 | ) | (226 | ) | ||||||||
| Income tax benefit from sale of New Jersey NOLs | - | - | (3,151 | ) | - | |||||||||||
| Recognition of Series A beneficial conversion feature | 382 | - | 15,737 | - | ||||||||||||
| Settlement of clinical development contract | - | - | (3,229 | ) | ||||||||||||
| Adjusted net loss attributable to common stockholders (non-GAAP) | $ | (7,957 | ) | $ | (6,075 | ) | $ | (12,968 | ) | $ | (21,229 | ) | ||||
| Net loss attributable to common stockholders per share of common stock - diluted, as reported (GAAP) | $ | (0.34 | ) | $ | (0.38 | ) | $ | (1.05 | ) | $ | (1.16 | ) | ||||
| Adjustments for reconciled items: | ||||||||||||||||
| Stock-based compensation, non-cash | (0.01 | ) | 0.10 | 0.06 | 0.20 | |||||||||||
| Depreciation and amortization | 0.03 | 0.03 | 0.06 | 0.06 | ||||||||||||
| Loss on extinguishment of debt | - | - | 0.05 | - | ||||||||||||
| Change in fair value of warrant liability | (0.01 | ) | (0.04 | ) | (0.01 | ) | (0.01 | ) | ||||||||
| Income tax benefit from sale of New Jersey NOLs | - | - | (0.12 | ) | - | |||||||||||
| Recognition of Series A beneficial conversion feature | 0.01 | - | 0.62 | - | ||||||||||||
| Settlement of clinical development contract | - | - | (0.13 | ) | - | |||||||||||
| Adjusted net loss attributable to common stockholders per share of common stock - diluted (non-GAAP) | $ | (0.32 | ) | $ | (0.29 | ) | $ | (0.52 | ) | $ | (0.91 | ) |