Freeline Therapeutics Holdings plc (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
DiseaseFreeline 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
RunwayFreeline 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 InformationFreeline
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. 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 StatementsThis 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.
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 shareholders—basic and diluted |
|
$ |
(1.50 |
) |
|
$ |
(3.93 |
) |
|
$ |
(6.81 |
) |
Weighted average ordinary shares
outstanding—basic and diluted |
|
|
59,271,778 |
|
|
|
35,704,368 |
|
|
|
14,152,843 |
|
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 Aokinaomi.aoki@freeline.lifeSenior Vice President, Head of
Investor Relations & Corporate Communications+ 1 617 283
4298
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