Cempra Inc (NASDAQ:CEMP), a clinical-stage pharmaceutical company focused on developing antibiotics in the face of rising antibiotic resistant bacterial infections, today reported financial results for the quarter and year endedDecember 31, 2015 and provided an update on recent corporate developments.
Fourth Quarter 2015 and Recent Corporate Highlights
- In February, Cempra and Macrolide Pharmaceuticals entered a synthetic manufacturing process development agreement for solithromycin, which is currently manufactured using fermentation-derived starting materials. Macrolide will use its novel, proprietary synthesis technology to provide Cempra with a fully synthetic process for its late-stage investigational macrolide antibiotic, solithromycin. Eventually, an alternative fully synthetic process could provide manufacturing and supplier flexibility.
- In January, Cempra completed a public offering of 4,166,667 shares at a price of $24.00 per share. Net proceeds after underwriting discounts and commissions and expenses of the offering were approximately $93.7 million. Cempra intends to use the funds for the commercial launch of solithromycin in community acquired bacterial pneumonia (CABP) in the U.S., subject to the drug receiving FDAapproval, research and development activities, working capital and general corporate and administrative expenses.
- In January, the first patient was dosed in a Phase 2 clinical trial exploring the use of solithromycin in nonalcoholic steatohepatitis (NASH). This Phase 2 open label study will enroll up to 15 patients with NASH without cirrhosis between 18 and 70 years of age.
- In December, Cempra entered into a Cooperative Research and Development Agreement (CRADA) with the National Institute of Allergy and Infectious Diseases (NIAID) and expanded the Phase 3 solithromycin clinical trial in urogenital gonorrhea to include 60 additional female and adolescent patients with culture-proven gonorrhea. Cempra had successfully completed enrollment of 250 patients in the study which has been amended to enroll the additional patients.
- In December, the first patient was dosed in Cempra’s Phase 3 clinical trial to evaluate the safety and efficacy of oral Taksta™ as a potential treatment for acute bacterial skin and skin structure infections (ABSSSI).The study is planned to enroll approximately 700 patients age 12 years and up.
- In October, Cempra announced positive top line results from a global, pivotal Phase 3 clinical trial of intravenous (IV) to oral solithromycin (Solitaire-IV) in the treatment of patients with CABP. Intravenous solithromycin met the U.S. Food and Drug Administration (FDA) primary objective of statistical non-inferiority in the intent-to-treat (ITT, all randomized patients) population compared to intravenous moxifloxacin at the early clinical response (ECR, 72 [-12/+36] hours after initiation of therapy). Solithromycin was well tolerated relative to the known effects of older macrolide antibiotics. Solithromycin oral and IV products have been designated a qualified infectious disease product (QIDP) and Fast Track and will receive a priority review.
“I am pleased with the exciting progress Cempra made in 2015, including the successful completion of our pivotal development program for solithromycin intravenous and oral capsule formulations in the treatment of CABP. Our rolling NDA submission for solithromycin to the FDA is underway and is on track for completion during the first half of 2016,” stated Prabhavathi Fernandes, Ph.D., president and chief executive officer of Cempra. “Our plans to commercialize solithromycin in the U.S. are moving forward as we build out the early foundations of our commercial infrastructure.”
Upcoming Expected Clinical Development Milestones
- Solithromycin pediatric: patient enrollment for Phase 1b trial continues.
- Phase 3 trial for solithromycin in urogenital gonorrhea is ongoing.
- Enrollment in a Phase 2/3 pivotal trial with solithromycin for bacterial infections in pediatric patients is expected to initiate in Q1 2016.
- Phase 2 trial in chronic obstructive pulmonary disease (COPD) is ongoing.
- Phase 2 trial in nonalcoholic steatohepatitis (NASH) is ongoing.
- Completion of the NDA and EMA submissions for solithromycin in the treatment of CABP is expected by the end of the first half of 2016.
- Phase 3 trial in ABSSSI is ongoing.
- An exploratory trial for Taksta in patients with refractory bone or joint infections is ongoing.
Financial Results for the Three Months and Year Ended December 31, 2015
For the quarter ended December 31, 2015, Cempra reported a net loss of $21.2 million, or $0.48 per share, compared to a net loss of $16.9 million, or$0.46 per share for the fourth quarter in 2014. Research and development expense in the fourth quarter of 2015 was $20.0 million, an increase of 31% compared to the same quarter in 2014. The higher R&D expense was primarily due to the order of active pharmaceutical ingredient (API) necessary to support the launch of solithromycin as the company begins its commercial readiness activities and initial startup activities for the Taksta clinical trials. General and administrative expense was $6.6 million, a 94% increase compared to the quarter ended December 31, 2014, driven primarily by early pre-commercialization costs and increased headcount as the company begins to plan for commercialization.
For the year ended December 31, 2015, Cempra reported a net loss of $91.1 million, or $2.09 per share, compared to a net loss of $61.6 million, or$1.81 per share, for the year ended December 31, 2014. Research and development expense was $93.4 million, an increase of 49% compared to the year ended December 31, 2014. The increase was primarily due to the order of API necessary to support the planned launch of solithromycin as we begin our commercial readiness activities and initial startup activities for the Taksta clinical trials. General and administrative expense was $22.9 million, an 89% increase compared to the year ended December 31, 2014, driven primarily by early pre-commercialization costs and increased headcount as the company begins to plan for commercialization.
As of December 31, 2015, Cempra had cash and equivalents of $153.8 million and 44.0 million shares outstanding. The cash balance does not include the $93.7 million raised in the offering completed earlier this year.
After giving effect to the net proceeds of the January 2016 offering, the company’s current cash and equivalents are expected to be sufficient to fund ongoing operations into the second quarter of 2017, assuming continued timely receipts under the BARDA contract and receipt of expected milestone payments from Toyama. This projection does not include any funds from new financings or partnerships. (Original Source)
Shares of Cempra are up nearly 3% in after-hours trading. CEMP has a 1-year high of $46.99 and a 1-year low of $15.43. The stock’s 50-day moving average is $19 and its 200-day moving average is $27.52.
On the ratings front, Cempra has been the subject of a number of recent research reports. In a report issued on February 1, Janney Montgomery Scott analyst Debjit Chattopadhyay maintained a Buy rating on CEMP, with a price target of $37, which implies an upside of 118.9% from current levels. Separately, on December 21, Needham’s Alan Carr maintained a Buy rating on the stock and has a price target of $48.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Debjit Chattopadhyay and Alan Carr have a total average return of -1.9% and 12.2% respectively. Chattopadhyay has a success rate of 38.4% and is ranked #2908 out of 3664 analysts, while Carr has a success rate of 45.0% and is ranked #133.
Cempra Inc is a clinical-stage pharmaceutical company. It develops antibiotics for acute care & community settings to meet critical medical needs in treatment of bacterial infectious diseases, respiratory tract & chronic staphylococcal infections.