REG - Syncona Limited - Freeline reports Q3 2022 Financial Results

SynconaAnnouncement

15/11/2022 12:15

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RNS Number : 3687G  Syncona Limited  15 November 2022

Syncona Limited

Freeline reports Q3 2022 Financial Results and Corporate Update

15 November 2022

Syncona Ltd, a leading healthcare company focused on founding, building and
funding 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
third quarter ended September 30, 2022.

Freeline has provided the following updates:

·    Entered a definitive agreement to sell its chemistry, manufacturing
and control (CMC) focused German subsidiary and related intellectual property
for $25 million, subject to purchase price adjustments

·   Retains the rights to its proprietary AAVS3 capsid and will maintain
access to key capabilities and technologies as it progresses its pipeline of
clinical trials

·   Development of the FLT190 Fabry and FLT201 Gaucher programmes to be
prioritised, with these representing potential first-in-class and
best-in-class therapies in these indications; ceasing of investment in further
development of the FLT180a Haemophilia B programme

·    Streamlining of organisation to increase efficiencies and reduce
expenses, with US and UK workforce to reduce by approximately 30 employees,
with headcount expected to be c.100 by the end of 2022

·     Changes announced are anticipated to extend Freeline's cash runway
into CY2024

·     Updated data released from the first cohort of the MARVEL-1 dose
finding trial in FLT190 in Fabry disease underlines the potential of the
programme, with FLT190 continuing to be well tolerated with durable expression
in α-galactosidase A (α-Gal A), the key enzyme deficient in those suffering
from Fabry disease

Chris Hollowood, Chief Investment Officer of Syncona Investment Management
Limited and Chair of Freeline, said: "We are pleased to see the updated data
today from Freeline's Fabry's programme which supports the company's decision
to prioritise its programmes in both Fabry and Gaucher's disease which have
the potential to be first-in-class and best-in-class therapies.

We fully support the decision to implement cost savings and rationalise the
pipeline to those programmes with greatest potential clinical impact. Whilst
it is a difficult decision to reduce the workforce, the lower cost base,
extended cash runway into 2024 and the greater focus on its most valuable
programmes positions the Company strongly to deliver key milestones as it
enters 2023. We are looking forward to working with Michael Parini and his
team as they continue to drive the business."

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.

  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
founding 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 found, build and fund companies around exceptional science
to create a diversified portfolio of 15-20 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 Third Quarter 2022 Financial Results and Corporate Update

 

Entered into definitive agreement to sell CMC-focused German subsidiary and
related IP for $25 million, while retaining rights to AAVS3 capsid and
maintaining access to capabilities and technologies

 

Streamlining organization and extending cash runway into 2024

 

Prioritizing development of FLT201 in Gaucher disease and FLT190 in Fabry
disease; ceasing investment in further development of FLT180a in hemophilia B

 

Updated data from first cohort of MARVEL-1 trial show FLT190 continues to be
well-tolerated with sustained a-Gal A enzyme increases up to three years after
dosing

 

LONDON, November 15, 2022 - 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 third quarter of 2022
and announced its decisions to sell its CMC-focused subsidiary in Germany to
Ascend Gene and Cell Therapies Ltd., streamline its organization to increase
efficiency and strengthen its financial position, and prioritize the
development of FLT201 in Gaucher disease and FLT190 in Fabry disease.
Additionally, Freeline announced updated data from the first cohort of the
MARVEL-1 Phase 1/2 clinical trial of FLT190 showing encouraging safety and
durability.

"The actions we announced today make Freeline a stronger and more agile
company that is well-positioned to execute on our clinical programs and
deliver on the promise of gene therapy for people with debilitating chronic
diseases," said Michael Parini, Chief Executive Officer of Freeline.
"Prioritizing FLT201 for Gaucher disease and FLT190 for Fabry disease allows
us to focus on programs that we believe have the greatest potential to benefit
patients and drive value for shareholders. By streamlining the organization,
selling our German subsidiary and moving to a flexible partnership model for
CMC, we are also extending our cash runway through key data readouts and
enhancing our ability to achieve our near- and long-term goals."

Selling German CMC Subsidiary and Partnering with Ascend

Freeline has entered into a definitive agreement to sell its subsidiary,
Freeline Therapeutics GmbH, and certain related intellectual property to
Ascend for $25 million, subject to purchase price adjustments. Ascend is a
specialist biopharma contract development manufacturing organization (CDMO)
with operations in the United Kingdom and the United States and has assembled
a transatlantic group of investors, including Abingworth, Petrichor and
Monograph Capital, to support building the company. Freeline Therapeutics GmbH
specializes in CMC process development, analytics and AAV technologies. The
entity has approximately 55 employees and leased facilities in Munich. The
transaction is expected to close in the first quarter of 2023 subject to
customary closing conditions, including receipt of regulatory approvals.

At closing, Freeline and Ascend will enter into an intellectual property
agreement that will assign certain patents and know-how related to CMC
capabilities and technologies to Ascend. Freeline will maintain its rights to
its AAVS3 capsid, and the agreement will include a back-license to Freeline of
the assigned rights necessary to develop and commercialize its current product
candidates.

Freeline will also simultaneously enter into a transitional services agreement
with Ascend that will allow Freeline to maintain flexible access to analytical
and process development capabilities and dedicated personnel for a period of
18 months following the closing of the transaction. The agreement will include
a guaranteed minimum spend by Freeline of approximately $7.9 million over that
18-month period.

Streamlining the Organization

Freeline completed a thorough financial and organizational assessment to
prioritize key capabilities, increase efficiencies and reduce expenses. As a
result, the company is reducing its US and UK workforce by approximately 30
employees. This reduction would bring Freeline's headcount to approximately
100 employees by the end of 2022, including the transfer of the employees in
Germany to Ascend as part of the sale of Freeline Therapeutics GmbH.

Prioritizing Clinical Portfolio

As a result of a previously announced evaluation of strategic options for
FLT180a, its investigational gene therapy for hemophilia B, Freeline has
decided to focus its resources on FLT201 and FLT190, which have the potential
to be first-in-class and/or best-in-class programs, and stop investment in
further development of FLT180a without a partner. The clinical data to date
support FLT180a's potential to be an important treatment option for patients
with hemophilia B, if approved, and efforts to seek a partner to potentially
bring FLT180a into Phase 3 development are ongoing.

"We are highly committed to the patients treated in our clinical trials and
will continue the follow-up on all patients in our B-AMAZE and B-LIEVE
studies," Parini said. "We want to thank the patients, investigators and
clinical sites for their trust and participation. Their collective
contributions have advanced the understanding of gene therapy for hemophilia B
as well as other diseases."

Durable α-Gal A Increases in Fabry Patients from First Cohort of MARVEL-1
Trial

Updated data from the first cohort of the MARVEL-1 dose-finding trial in Fabry
disease shows that FLT190 continues to be well-tolerated and induced durable
increases of α-galactosidase A (α-Gal A). People with classic Fabry disease
have little to no functional α-Gal A enzyme, and FLT190 is an investigational
AAV gene therapy designed to induce α-Gal A expression, with the aim of
eliminating the need for enzyme replacement therapy (ERT). Data from the two
patients treated in the first cohort at a dose of 7.5e11 vg/kg showed that as
of August 2022:

•             Elevated α-Gal A levels have been sustained for
up to three years in Patient 1 and one year in Patient 2, with Patient 2
continuing to remain off ERT.

•             FLT190 has been well-tolerated.

•             No long-term cardiac sequelae have been observed
following the early and transient mild myocarditis in both patients. The
myocarditis resolved on its own in both patients.

 

Freeline initiated dosing in the second cohort (1.5e12 vg/kg) in September
2022.

Anticipated Upcoming Clinical Milestones

Freeline remains on track for its previously disclosed milestones for FLT201
and FLT190.

FLT201 in Gaucher disease

·    Begin dosing patients in the GALILEO-1 Phase 1/2 dose-finding trial
by the end of 2022

·    Report initial safety and efficacy data in first half of 2023

·    Report updated safety and efficacy data in the second half of 2023

 

FLT190 in Fabry disease

·    Report initial safety and efficacy data from the second cohort of
MARVEL-1 in the first half of 2023

 

Q3 2022 Financial Results

·    Cash Position: Unrestricted cash and cash equivalents were $65.8
million as of September 30, 2022, compared to $117.7 million as of December
31, 2021. With the changes announced today, Freeline now expects that its
current level of cash and cash equivalents, plus the anticipated proceeds from
the sale of Freeline Therapeutics GmbH, will enable the company to fund its
planned operations into 2024.

·    Research and Development (R&D) Expenses: R&D expenses for
the nine months ended September 30, 2022, were $53.6 million, compared to
$70.8 million for the same period in 2021.  The decrease of $17.2 million was
driven primarily by lower personnel expenses and share-based compensation as a
result of the company's 2021 reduction in force. In addition, the company saw
decreases in manufacturing activities related to FLT201, clinical trial costs
related to FLT180a, and spending related to FLT210, its hemophilia A program
that was discontinued in 2021. These decreases were partially offset by an
increase in FLT190 spending related to ongoing clinical trial costs for the
MARVEL-1 trial in 2022.

·    General and Administrative (G&A) Expenses: G&A expenses for
the nine months ended September 30, 2022, were $25.0 million, compared to
$37.2 million for the same period in 2021. The decrease of $12.2 million was
driven primarily by lower personnel expenses and share-based compensation as a
result of the company's 2021 reduction in force, reduced legal and
professional fees and other related expenses.

·    Net Loss: Net loss was $66.0 million, or $1.15 per share, for the
nine months ended September 30, 2022, compared to a net loss of $105.7
million, or $2.96 per share, for the nine months ended September 30, 2021.

 

About Freeline Therapeutics

Freeline is a clinical-stage biotechnology company developing transformative
adeno-associated virus (AAV) vector-mediated gene therapies. The company is
dedicated to improving patient lives through innovative, one-time treatments
for chronic debilitating diseases. Freeline uses its proprietary, rationally
designed AAV vector and capsid (AAVS3), along with novel promoters and
transgenes, to deliver a functional copy of a therapeutic gene into human
liver cells, thereby expressing a persistent functional level of the missing
or dysfunctional protein into the patient's bloodstream. The company's
integrated gene therapy platform includes in-house capabilities in research
and clinical development. The company is advancing clinical programs in Fabry
disease and Gaucher disease Type 1. Freeline is headquartered in the UK and
has operations in Germany and the U.S.

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 Company's expectations regarding its use of cash and cash
runway; the potential of FLT201 in Gaucher disease and FLT190 in Fabry disease
to provide first- and/or best-in class gene therapy candidates; the
transaction with Ascend Gene and Cell Therapies Ltd., including the parties'
ability to consummate the transaction and the anticipated timing thereof, the
terms of related agreements to be signed at closing and the anticipated
benefits of the transaction, including Ascend's ability to perform under the
transitional services agreement and meet the Company's requirements; the
timing of initiation, enrollment, continuation, completion and the outcome of
clinical trials and data readouts from such trials; the potential of FLT180a
in hemophilia B to be an important treatment option for patients with
hemophilia B, if approved and the outcome of the ongoing efforts to seek a
partner to potentially bring FLT180a into Phase 3 development. 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; the potential for a pandemic, epidemic or
outbreak of infectious diseases in the United States, United Kingdom or
European Union, including the COVID-19 pandemic, to disrupt and delay the
Company's clinical trial pipeline; 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, regulatory approval or commercialization of its product
candidates; the Company's ability to identify or discover additional product
candidates, or failure to capitalize on programs or product candidates;
whether the Company will be able to realize the anticipated benefits of the
transaction with Ascend and whether the transaction may close in the
anticipated time frame or at all. 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, 2021 and in subsequent
reports on Form 6-K, in each case 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) .

 

Unaudited Condensed Consolidated Statement of Operations Data
 (in thousands of U.S. dollars, except per share data)

 

                                                     For the Nine Months Ended September 30,
                                                     2022                                                   2021
 OPERATING EXPENSES:
 Research and development                             $        53,561                                        $        70,827
 General and administrative                            25,009                                                 37,219
 Total operating expenses                              78,570                                                 108,046
 LOSS FROM OPERATIONS:                                 (78,570)                                               (108,046)
 OTHER INCOME (EXPENSE), NET:
 Other income, net                                     5,451                                                  493
 Gain on lease termination                             5,307                                                  -
 Interest income, net                                                 631                                                    350
 Benefit from R&D tax credit                           1,304                                                  1,541
 Total other income, net                               12,693                                                 2,384
 Loss before income taxes                              (65,877)                                               (105,662)
 Income tax expense                                                   (96)                                                   (29)
 Net loss                                             $      (65,973)                                        $    (105,691)
 Net loss per share attributable to ordinary           (1.15)                                                 (2.96)
     shareholders-basic and diluted
 Weighted average ordinary shares outstanding-basic    57,384,985                                             35,686,751
     and diluted

 

 

Unaudited Condensed Consolidated Balance Sheet Data

(in thousands of U.S. dollars)

 

                                                 September 30,                                      December 31,
                                                 2022                                               2021
 ASSETS
 CURRENT ASSETS:
 Cash and cash equivalents                        $                  65,848                          $               117,662
 Prepaid expenses and other current assets         8,256                                              10,630
 Total current assets                              74,104                                             128,292
 NON-CURRENT ASSETS:
 Property and equipment, net                       10,781                                             9,906
 Operating lease right of use assets               11,708                                             -
 Other non-current assets                          3,482                                              2,927
 Total assets                                     $               100,075                            $               141,125
 LIABILITIES AND SHAREHOLDERS' EQUITY
 CURRENT LIABILITIES:
 Accounts payable                                 $                    9,956                         $                    5,187
 Accrued expenses and other current liabilities    9,578                                              15,497
 Operating lease liabilities, current              2,882                                              -
 Total current liabilities                         22,416                                             20,684
 NON-CURRENT LIABILITIES:
 Operating lease liabilities, non-current          9,077                                              -
 Total liabilities                                $                  31,493                          $                  20,684
 SHAREHOLDERS' EQUITY:
 Deferred shares                                   137                                                137
 Additional paid-in capital                        499,651                                            467,213
 Accumulated other comprehensive (loss) gain       (8,852)                                            9,472
 Accumulated deficit                               (422,354)                                          (356,381)
 Total shareholders' equity                        68,582                                             120,441
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $               100,075                            $               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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