REG - Syncona Limited - Freeline reports Full Year 2022 Financial Results

SynconaAnnouncement

04/04/2023 12:15

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RNS Number : 3206V  Syncona Limited  04 April 2023

Syncona Limited

Freeline reports Full Year 2022 Financial Results and Corporate Update

4 April 2023

Syncona Ltd, a leading healthcare company focused on creating, building and
scaling a portfolio of global leaders in life science, notes that its
portfolio company, Freeline Therapeutics Holdings plc (Nasdaq: FRLN)
("Freeline"), announced its financial results and a corporate update for the
full year ended December 31, 2022.

Freeline has provided the following updates:

·      The company has prioritised the development of its FLT201 therapy
in Gaucher Disease, a potentially first and best-in-class asset; pausing
development of the FLT190 programme in Fabry disease

·      Initial clinical data from the FLT201 programme is now expected
in Q3 CY2023

·      The company is doing further streamlining to reduce
inefficiencies and reduce expense, with a reduction in workforce of 30 per
cent taking headcount to c.65. These changes alongside the prioritising of the
FLT201 programme extend the company's cash runway to Q2 CY2024

·     Appointment of Paul Schneider, Chief Financial Officer, to the
company's Board of Directors, alongside retirement of Professor Amit Nathwani,
co-founder of Freeline, from the Board

Chris Hollowood, Chief Executive Officer of Syncona Investment Management
Limited and Chair of Freeline, said: "We continue to work closely with Michael
Parini and his team at Freeline as they prioritise their resources towards the
company's highest priority programmes. Whilst we have been encouraged by data
reported from the programme to date, we are supportive of the company's
decision to pause development on the FLT190 Fabry programme. FLT201 for
Gaucher is a highly innovative programme and can represent a life-changing
treatment for patients in this setting, with the potential to be a first and
best-in-class therapy. We also fully support the difficult decision to further
streamline the business to reflect the prioritisation of the Gaucher
programme. With an extended cash runway the company can now focus on driving
towards publishing data from FLT201 later in the year, building on the
positive pre-clinical data we have seen to date.

I would like to finish by thanking Freeline co-founder Amit Nathwani,
following his retirement from the Board of the company. I have greatly
appreciated the support that Amit has provided me since we co-founded Freeline
in 2015, and I am pleased that he will continue to be involved with the
company as a Clinical and Scientific Advisor."

The announcement can be accessed on Freeline's website at:
www.freeline.life/investors/ (http://www.freeline.life/investors/) and the
full text of the announcement from Freeline is contained below. Freeline
management will also host a conference call today, at 8am ET / 1pm BST. To
access the conference call, participants may register here
(https://register.vevent.com/register/BIcad30c62b8414bde89006db1cb63f5e1) .

  ENDS 

Enquiries

Syncona Ltd

Annabel Clark / Fergus Witt

Tel: +44 (0) 20 3981 7940

 

FTI Consulting

Ben Atwell / Natalie Garland-Collins / Julia Bradshaw / Tim Stamper

Tel: +44 (0) 20 3727 1000

About Syncona

Syncona's purpose is to invest to extend and enhance human life. We do this by
creating and building a portfolio of global leaders in life science to deliver
transformational treatments to patients in areas of high unmet need.

Our strategy is to create, build and scale companies around exceptional
science to create a diversified portfolio of 20-25 globally leading healthcare
businesses for the benefit of all our stakeholders. We focus on developing
treatments for patients by working in close partnership with world-class
academic founders and management teams. Our balance sheet underpins our
strategy enabling us to take a long-term view as we look to improve the lives
of patients with no or poor treatment options, build sustainable life science
companies and deliver strong risk-adjusted returns to shareholders.

 

Freeline Reports Full Year 2022 Financial Results and Provides Corporate
Update

 

Prioritizing development of FLT201, a potential first- and best-in-class gene
therapy for most common type of Gaucher disease

 

Initial clinical data on FLT201 expected in Q3 2023

 

Restructuring organization and pausing development of FLT190 to extend cash
runway into Q2 2024

 

Appointed CFO Paul Schneider to Board of Directors

 

Management to host conference call today at 8 a.m. ET

 

LONDON, April 4, 2023 - Freeline Therapeutics Holdings plc
(https://www.freeline.life/investors/newsroom/freeline-presents-long-term-follow-up-data-from-phase-12-b-amaze-trial-in-hemophilia-b-at-the-2021-ash-annual-meeting-and-announces-early-initiation-of-phase-12-b-lieve-dose-confirmation-trial/)
(Nasdaq: FRLN) today reported financial results for the full year ended
December 31, 2022 and provided a corporate update.

 

"FLT201 is our greatest potential value driver and our greatest opportunity to
benefit patients," said Michael Parini, Freeline's Chief Executive Officer.
"It is a highly differentiated gene therapy candidate that delivers a
longer-acting engineered version of the enzyme missing in people with Gaucher
disease, potentially penetrating deeper tissues, which current therapies do
not adequately reach, and improving outcomes for people with Gaucher disease
type 1. Gaucher disease type 1 is the most common type of the disease, and
despite chronic treatment with current therapies, many patients continue to
experience symptoms, including enlarged organs, bone pain, lung dysfunction
and low blood counts. We believe one-time treatment with FLT201 could be
life-changing, and we are committed to advancing this potential first- and
best-in-class program to key data readouts, starting with initial data in the
third quarter of this year.

 

"While we remain encouraged by the data on FLT190 in Fabry disease, we have
paused its development and are further streamlining the organization to extend
our cash runway and focus on FLT201 in Gaucher disease," Parini continued. "I
want to extend my sincere gratitude to all of our colleagues for their
dedication and their contributions to Freeline, as well as to the
investigators and patients who have participated in and supported the
development of FLT190."

 

Prioritizing Development of FLT201 in Gaucher Disease

Freeline assessed its strategic priorities based on its current financial
position and the capital needs associated with advancing two clinical-stage
programs in parallel. Following the assessment, Freeline has decided to pause
development of FLT190 in Fabry disease to focus its resources on advancing
FLT201, which has the potential to be a first- and best-in-class gene therapy
for Gaucher disease type 1.

 

Based on its preclinical data, Freeline believes FLT201 has the potential to
improve clinical outcomes for patients with Gaucher disease type 1 with a
one-time therapy. FLT201 delivers a novel transgene that was developed by
Freeline scientists. The transgene encodes for a rationally engineered variant
of glucocerebrosidase (GCase), the enzyme deficient in people with Gaucher
disease. The variant has demonstrated a substantially longer half-life than
wildtype GCase, which may allow it to penetrate difficult-to-reach organs,
including bone and lungs. FLT201 has led to high GCase expression at low doses
in preclinical models, as well as increased uptake of GCase and greater
clearance of harmful substrates in disease-affected tissues than the current
standard of care.

 

Freeline is actively screening patients for dosing in its GALILEO-1 Phase 1/2
clinical trial of FLT201 in Gaucher disease and now expects to report initial
data, including assessments of safety and enzyme activity, from the first
cohort of GALILEO-1 in the third quarter of 2023.

 

Streamlining Organization to Extend Cash Runway

Freeline is restructuring to align with its focus on FLT201, increase
efficiencies and reduce operating expenses. The company has proposed to reduce
its workforce by nearly 30 percent, bringing its headcount to approximately 65
employees. In addition to reducing headcount related to FLT190, Freeline is
proposing to make cuts across the organization to further streamline, while
maintaining core capabilities and ensuring the ability to drive enrollment in
the GALILEO-1 trial of FLT201.

 

Appointing Paul Schneider to Board of Directors

Freeline also announced the appointment of its Chief Financial Officer Paul M.
Schneider to the company's Board of Directors. Mr. Schneider is a seasoned
executive with more than 20 years of strategic and financial leadership
experience in large and small private and public biopharmaceutical companies.
Mr. Schneider has an impressive track record of financial stewardship,
including corporate strategy and execution, financial planning, analysis and
reporting, and investor relations.

 

Amit Nathwani, MD, Professor of Hematology at University College London, a
gene therapy pioneer and co-founder of Freeline, is retiring from the board.
He will continue to serve as a clinical and scientific adviser. Colin A. Love,
PhD, who has served on the board since March 2021, is replacing Dr. Nathwani
on the Nominating and Corporate Governance Committee.

 

"I am pleased to welcome Paul to the board," Parini said. "Paul's leadership
as CFO in guiding our financial strategy and enhancing our operational
effectiveness has been invaluable at this critical juncture of Freeline's
evolution. His addition to the board will be instrumental as we work to
advance FLT201 in Gaucher disease and strengthen our financial position. On
behalf of our entire board, I would like to thank Amit for his tremendous
support and many contributions to Freeline over the years and look forward to
continuing to work closely with him in his role as a clinical and scientific
adviser."

 

2022 Financial Highlights

 

·    Cash Position: As of December 31, 2022, unrestricted cash and cash
equivalents were $47.3 million, compared to $117.7 million as of December 31,
2021. With the proceeds from the sale of the company's German subsidiary,
Freeline Therapeutics GmbH, received in February 2023 upon closing of the
transaction, and the actions announced today, Freeline expects that its
current level of cash and cash equivalents will enable the company to fund its
planned operations into the second quarter of 2024.

 

·    Research and Development (R&D) Expenses: R&D expenses were
$66.2 million for the year ended December 31, 2022, compared to $95.4 million
for the year ended December 31, 2021. The decrease was primarily driven by
decreases in manufacturing activities related to FLT201, as well as decreases
in clinical trial costs and spending related to the company's discontinued
hemophilia programs. In addition, personnel expenses and share-based
compensation decreased as a result of the company's 2021 and 2022 workforce
reductions. These decreases were partially offset by an increase in FLT190
spending related to the MARVEL-1 clinical trial.

 

·    General and Administrative (G&A) Expenses: G&A expenses were
$30.7 million for the year ended December 31, 2022, compared to $44.6 million
for the year ended December 31, 2021. The decrease was driven primarily by
lower personnel expenses and share-based compensation as a result of the 2021
and 2022 workforce reductions and reduced professional fees.

 

·    Net Loss: Net loss was $89.0 million, or $1.50 per share, for the
year ended December 31, 2022, compared to a net loss of $140.4 million, or
$3.93 per share, for the year ended December 31, 2021.

 

Conference Call Information

Freeline Therapeutics will host a live conference call and webcast at 8 a.m.
ET today to discuss its corporate update.

 

To access the conference call, participants may register here
(https://register.vevent.com/register/BIcad30c62b8414bde89006db1cb63f5e1) . A
live webcast of the call will also be available on the Investors section of
Freeline's website at www.freeline.life. An archived replay of the webcast be
available for approximately 90 days following the call.

 

Forward-Looking Statements

This press release contains statements that constitute "forward looking
statements" as that term is defined in the United States Private Securities
Litigation Reform Act of 1995, including statements that express the opinions,
expectations, beliefs, plans, objectives, assumptions or projections of
Freeline Therapeutics Holdings plc (the "Company") regarding future events or
future results, in contrast with statements that reflect historical facts.
Examples include, among other topics, statements regarding the Company's
strategies, anticipated operating and financial performance and financial
condition; the potential of FLT201 to be a first- and best-in-class gene
therapy for Gaucher disease and change the lives of and improve clinical
outcomes for people with Gaucher disease type 1 with a one-time therapy, the
Company's expectations regarding its use of cash and cash runway; and the
timing of data readouts from the Company's GALILEO-1 Phase 1/2 clinical trial.
In some cases, you can identify such forward-looking statements by terminology
such as "anticipate," "intend," "believe," "estimate," "plan," "seek,"
"project" or "expect," "may," "will," "would," "could" or "should," the
negative of these terms or similar expressions. Forward-looking statements are
based on management's current beliefs and assumptions and on information
currently available to the Company, and you should not place undue reliance on
such statements. Forward-looking statements are subject to many risks and
uncertainties, including the Company's recurring losses from operations; the
uncertainties inherent in research and development of the Company's product
candidates, including statements regarding the timing of initiation,
completion and the outcome of clinical studies or trials and related
preparatory work and regulatory review, regulatory submission dates,
regulatory approval dates and/or launch dates, as well as risks associated
with preclinical and clinical data, including the possibility of unfavorable
new preclinical, clinical or safety data and further analyses of existing
preclinical, clinical or safety data; the Company's ability to design and
implement successful clinical trials for its product candidates; whether the
Company's cash resources will be sufficient to fund the Company's foreseeable
and unforeseeable operating expenses and capital expenditure requirements for
the Company's expected timeline in light of management's substantial doubt
regarding the Company's ability to continue as a going concern for at least 12
months from the issuance date of this press release; the Company's failure to
demonstrate the safety and efficacy of its product candidates; the fact that
results obtained in earlier stage clinical testing may not be indicative of
results in future clinical trials; the Company's ability to enroll patients in
clinical trials for its product candidates; the possibility that one or more
of the Company's product candidates may cause serious adverse, undesirable or
unacceptable side effects or have other properties that could delay or prevent
their regulatory approval or limit their commercial potential; the Company's
ability to obtain and maintain regulatory approval of its product candidates;
the Company's limited manufacturing experience, which could result in delays
in the development  of its product candidates; the Company's ability to
identify or discover additional product candidates, or failure to capitalize
on programs or product candidates; and the timing and outcome of the Company's
arbitration with Brammer Bio MA, LLC. Such risks and uncertainties may cause
the statements to be inaccurate and readers are cautioned not to place undue
reliance on such statements. We cannot guarantee that any forward-looking
statement will be realized. Should known or unknown risks or uncertainties
materialize or should underlying assumptions prove inaccurate, actual results
could vary materially from past results and those anticipated, estimated or
projected. Investors are cautioned not to put undue reliance on
forward-looking statements. A further list and description of risks,
uncertainties and other matters can be found in the Company's Annual Report on
Form 20-F for the fiscal year ended December 31, 2022, including in the
sections thereof captioned "Cautionary Statement Regarding Forward-Looking
Statements" and "Item 3.D. Risk factors." Many of these risks are outside of
the Company's control and could cause its actual results to differ materially
from those it thought would occur. The forward-looking statements included in
this press release are made only as of the date hereof. The Company does not
undertake, and specifically declines, any obligation to update any such
statements or to publicly announce the results of any revisions to any such
statements to reflect future events or developments, except as required by
law. For further information, please reference the Company's reports and
documents filed with the U.S. Securities and Exchange Commission (the "SEC").
You may review these documents by visiting EDGAR on the SEC website
at www.sec.gov (http://www.sec.gov) .

 

 

Consolidated Statement of Operations Data

(in thousands of U.S. dollars, except per share data)

 

 

                                                       For the Year Ended December 31,
                                                       2022                                                               2021                                                                     2020
 OPERATING EXPENSES:
 Research and development                               $                    66,203                                        $                       95,431                                           $                       76,149
 General and administrative                              30,656                                                             44,567                                                                   26,300
 Restructuring expense                                   1,588                                                              2,381                                                                    -
 Total operating expenses                                98,447                                                             142,379                                                                  102,449
 LOSS FROM OPERATIONS:                                   (98,447)                                                           (142,379)                                                                (102,449)
 OTHER (EXPENSE) INCOME, NET:
 Other (expense) income, net                             2,152                                                              (165)                                                                    (9,288)
 Gain on lease termination                               5,216                                                              -                                                                        -
 Interest income, net                                    904                                                                404                                                                      275
 Benefit from R&D tax credit                             1,571                                                              2,091                                                                    15,269
 Total other income, net                                                        9,843                                       2,330                                                                    6,256
 Loss before income taxes                                                   (88,604)                                        (140,049)                                                                (96,193)
 Income tax expense                                                              (368)                                                                 (342)                                                                    (129)
 NET LOSS                                               $                  (88,972)                                        $                   (140,391)                                            $                     (96,322)
 Net loss per share attributable to ordinary            $                      (1.50)                                      $                         (3.93)                                         $                         (6.81)

   shareholders-basic and diluted
 Weighted average ordinary shares outstanding-basic      59,271,778                                                         35,704,368                                                               14,152,843

   and diluted

 

 

Consolidated Balance Sheet Data

(in thousands of U.S. dollars)

 

 

                                                 December 31,                                          December 31,
                                                 2022                                                  2021
 ASSETS
 CURRENT ASSETS:
 Cash and cash equivalents                        $                    47,279                           $                  117,662
 Prepaid expenses and other current assets         6,235                                                 10,630
 Assets held for sale                              14,113                                                -
 Total current assets                              67,627                                                128,292
 NON-CURRENT ASSETS:
 Property and equipment, net                       9,007                                                 9,906
 Operating lease right of use assets               6,014                                                 2,927
 Other non-current assets                          3,993
 Total assets                                     $                    86,641                           $                  141,125
 LIABILITIES AND SHAREHOLDERS' EQUITY
 CURRENT LIABILITIES:
 Accounts payable                                 $                    10,058                           $                      5,187
 Accrued expenses and other current liabilities    7,908                                                 15,497
 Operating lease liabilities, current              2,663                                                 -
 Liabilities related to assets held for sale       10,337                                                -
 NON-CURRENT LIABILITIES:                          30,966                                                20,684
 NON-CURRENT LIABILITIES:
 Operating lease liabilities, non-current        3261                                                    -
 Total liabilities                                $                    34,227                           $                    20,684
 Commitments and contingencies
 SHAREHOLDERS' EQUITY:
 Deferred shares                                   137                                                   -
 Additional paid-in capital                        500,781                                               467,213
 Accumulated other comprehensive (loss) gain       (3,151)                                               9,472
 Accumulated deficit                               (445,353)                                             (356,381)
 Total shareholders' equity                        52,414                                                120,441
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $                    86,641                           $                  141,125

 

 

Media and Investor Contact:

 

Naomi Aoki

naomi.aoki@freeline.life (mailto:naomi.aoki@freeline.life)

Senior Vice President, Head of Investor Relations & Corporate
Communications

+ 1 617 283 4298

 

 

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