Exhibit 99.1
Tocagen Reports Third Quarter 2018 Financial and Business Results
SAN DIEGO – Nov. 8, 2018 – Tocagen Inc. (Nasdaq: TOCA), a clinical-stage, cancer-selective gene therapy company, today reported financial results and business highlights for the third quarter ended September 30, 2018.
“We conclude the eventful third quarter of 2018 having met important milestones, including early completion of enrollment and the first interim analysis of our ongoing Phase 3 Toca 5 trial. We’ve also further improved our balance sheet to advance our lead program and execute against our goals,” said Marty Duvall, chief executive officer of Tocagen. “With the planned second interim and final analyses for Toca 5 anticipated in 2019, we are preparing for a potential rolling BLA submission and planning for commercial launch.”
Third Quarter 2018 and Recent Highlights
| • | First interim analysis of Toca 5 Phase 3 trial: In August 2018, Tocagen |
| • | Completed Toca 5 enrollment: In September 2018, Tocagen |
| • | Received milestone payment from ApolloBio: Completing the |
| • | Initiated commercial organization buildout: In September 2018, |
| • | Presented Toca 6 data: Tocagen presented |
| expansion. These manuscripts first published online May 12, 2018 and June 26, 2018, respectively. |
Third Quarter 2018 Financial Results
License Revenue: License revenue was $18.0 million for the quarter ended September 30, 2018, compared to less than $0.1 million for the quarter ended September 30, 2017. The 2018 revenue was associated with a $16.0 million upfront payment recognized under Tocagen’s license agreement with ApolloBio and a $2.0 million development milestone earned upon completion of enrollment in the Toca 5 clinical study.
Research and Development (R&D) Expenses: R&D expenses were $12.3 million for the quarter ended September 30, 2018, compared to $7.6 million for the quarter ended September 30, 2017. The increase in R&D expenses in 2018 was primarily driven by higher costs to support the expanded Toca 5 Phase 3 clinical study and manufacturing activities related to Toca 511.
General and Administrative (G&A) Expenses: G&A expenses were $4.3 million for the quarter ended September 30, 2018, compared to $2.2 million for the quarter ended September 30, 2017. The increase in G&A expenses was primarily due to foreign non-income tax expense of approximately $1 million paid under Tocagen’s license agreement with ApolloBio and an increase in non-cash stock-based compensation expense.
Net Loss: Net loss was $0.4 million, or $0.02 per common share (basic and diluted), for the quarter ended September 30, 2018, compared to a net loss of $10.0 million, or $0.50 per common share (basic and diluted), for the quarter ended September 30, 2017. The reduction in net loss in 2018 was due to $18.0 million in revenue recognized under Tocagen’s license agreement with ApolloBio. Tocagen recognized $1.5 million in income taxes for the quarter ended September 30, 2018 related to the license agreement with ApolloBio. The 2018 calculation is based on 20.0 million average common shares outstanding for the third quarter of 2018, compared to 19.8 million average shares outstanding for the third quarter of 2017.
2018 Nine-Month Results
License Revenue: License revenue was $18.0 million for the nine months ended September 30, 2018, compared to less than $0.1 million for the nine months ended September 30, 2017. The 2018 revenue was associated with a $16.0 million upfront payment recognized under Tocagen’s license agreement with ApolloBio and a $2.0 million development milestone earned upon completion of enrollment in the Toca 5 clinical study.
R&D Expenses: R&D expenses were $35.5 million for the nine months ended September 30, 2018 compared to $20.8 million for the nine months ended September 30, 2017. Similar to the third quarter results, the R&D expenses primarily reflect increased costs to support the expanded Toca 5 Phase 3 clinical study, manufacturing activities related to Toca 511 & Toca FC and personnel and related costs due to increased headcount.
G&A Expenses: G&A expenses were $9.3 million for the nine months ended September 30, 2018 compared to $6.2 million for the nine months ended September 30, 2017. Similar to the third quarter
results, the G&A expenses primarily reflect the foreign non-income tax expense paid under Tocagen’s license agreement with ApolloBio and an increase in non-cash stock-based compensation expense.
Net Loss: Net loss for the nine months ended September 30, 2018 was $29.4 million, or $1.47 per common share (basic and diluted), compared to a net loss of $28.1 million, or $2.19 per common share (basic and diluted), for the nine months ended September 30, 2017. This calculation is based on 19.9 million average common shares outstanding for the nine months ended September 30, 2018, compared to 12.8 million average shares outstanding for the same period in 2017.
Cash Position and Guidance
Cash, cash equivalents and marketable securities were $79.8 million at September 30, 2018 compared to $88.7 million at December 31, 2017. Tocagen refined its annual cash burn guidance and estimates the total cash used in 2018 to fund operations and capital expenditures will be approximately $50 million, resulting in a year-end cash balance of approximately $70 million, up from approximately $40 million implied in guidance provided in January 2018.
About Toca 511 & Toca FC
Tocagen's lead product candidate is a two-part cancer-selective immunotherapy comprising an investigational biologic, Toca 511, and an investigational small molecule, Toca FC. Toca 511 is a retroviral replicating vector (RRV) that selectively infects cancer cells and delivers a gene for the enzyme, cytosine deaminase (CD). Through this targeted delivery, only infected cancer cells carry the CD gene and produce CD. Toca FC is an orally administered prodrug, 5-fluorocytosine (5-FC), which is converted into an anti-cancer drug, 5-fluorouracil (5-FU), when it encounters CD. 5-FU kills cancer cells and immune-suppressive myeloid cells resulting in anti-cancer immune activation and subsequent tumor killing.
About Tocagen
Tocagen is a clinical-stage, cancer-selective gene therapy company developing first-in-class, broadly applicable product candidates designed to activate a patient's immune system against their own cancer. Tocagen's lead investigational product candidate, Toca 511 & Toca FC, is under evaluation in a pivotal Phase 3 trial (Toca 5) for recurrent high grade glioma (HGG), a disease with significant unmet medical need. The U.S. Food and Drug Administration awarded Tocagen an orphan drug grant for the Toca 5 trial and has granted Toca 511 & Toca FC Breakthrough Therapy Designation for the treatment of recurrent HGG. The European Medicines Agency has granted Toca 511 PRIME (PRIority MEdicines) designation for the treatment of glioma. For more information about Tocagen, visit www.tocagen.com.
Forward-Looking Statements
Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include, but are not limited to, statements regarding our business plans and objectives, expectations regarding the timing and success of our clinical trials and planned clinical trials, expectations regarding our preclinical research and development activities, expectations regarding our use of cash and cash on hand at the end of the year, and plans related to development of our current and future product candidates in additional indications. Risks that contribute to the uncertain nature of the forward-looking statements include: the success, cost and timing of our product candidate development activities and planned clinical trials; our ability to execute on our strategy; regulatory developments in the United States and foreign countries; and our estimates regarding expenses, future revenue and capital requirements. These and other risks and
uncertainties are described more fully under the caption "Risk Factors" and elsewhere in Tocagen's filings and reports with the United States Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made. Tocagen undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.
TOCAGEN INC.
CONDENSED BALANCE SHEETS
(in thousands)
|
| September 30, |
|
| December 31, |
| |||
|
| 2018 |
|
| 2017 |
| |||
|
| (unaudited) |
|
|
|
|
| ||
Cash, cash equivalents and marketable securities |
| $ | 79,849 |
|
| $ | 88,725 |
| |
Prepaid expenses and other assets |
|
| 10,504 |
|
|
| 3,348 |
| |
Total assets |
| $ | 90,353 |
|
| $ | 92,073 |
| |
Current liabilities |
|
| 14,594 |
|
|
| 17,330 |
| |
Notes payable and other long-term liabilities |
|
| 28,092 |
|
|
| 3,661 |
| |
Total stockholders’ equity |
|
| 47,667 |
|
|
| 71,082 |
| |
Total liabilities and stockholders’ equity |
| $ | 90,353 |
|
| $ | 92,073 |
|
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2018 |
|
| 2017 |
|
| 2018 |
|
| 2017 |
| ||||
|
| (unaudited) |
|
| (unaudited) |
| ||||||||||
License revenue |
| $ | 18,009 |
|
| $ | 10 |
|
| $ | 18,027 |
|
| $ | 31 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
| 12,262 |
|
|
| 7,563 |
|
|
| 35,461 |
|
|
| 20,819 |
|
General and administrative |
|
| 4,320 |
|
|
| 2,184 |
|
|
| 9,311 |
|
|
| 6,153 |
|
Total operating expenses |
|
| 16,582 |
|
|
| 9,747 |
|
|
| 44,772 |
|
|
| 26,972 |
|
Income (loss) from operations |
|
| 1,427 |
|
|
| (9,737 | ) |
|
| (26,745 | ) |
|
| (26,941 | ) |
Other expense, net |
|
| (1,810 | ) |
|
| (216 | ) |
|
| (2,607 | ) |
|
| (1,151 | ) |
Net loss |
| $ | (383 | ) |
| $ | (9,953 | ) |
| $ | (29,352 | ) |
| $ | (28,092 | ) |
Net loss per common share, basic and diluted |
| $ | (0.02 | ) |
| $ | (0.50 | ) |
| $ | (1.47 | ) |
| $ | (2.19 | ) |
Weighted-average number of common shares outstanding, basic and diluted |
|
| 19,951,262 |
|
|
| 19,809,449 |
|
|
| 19,926,662 |
|
|
| 12,847,206 |
|
Media Contact:
Pam Lord
Canale Communications
(619) 849-6003pam@canalecomm.com
Investor Contact:
Elizabeth Broder
Endurance Advisors
ebroder@enduranceadvisors.com