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vTv Therapeutics Announces 2018 Fourth Quarter and Full Year Financial Results and Update

HIGH POINT, N.C.--(BUSINESS WIRE)--Feb. 27, 2019-- vTv Therapeutics Inc. (Nasdaq:VTVT) today reported financial results for the fourth quarter and year that ended December 31, 2018, and provided an update on recent achievements and upcoming events.

“We are excited about the therapeutic potential of azeliragon in patients with mild-Alzheimer’s Disease (AD) and type 2 diabetes and our progress to date with our Simplici-T1 trial in type 1 diabetics,” said Steve Holcombe, chief executive officer, vTv Therapeutics. “Our licensing partners also continue to advance our GLP-1R agonist, PPAR-delta, and PDE4 programs and we hope to see progress in each of these programs over the next year.”

Recent Achievements and Outlook

  • Initiated start-up activities for an adaptive Phase 2/3 clinical trial for azeliragon as a potential treatment of mild AD in patients with type 2 diabetes. Post-hoc subgroup analyses of our phase 3 STEADFAST Study identified that a population of mild-AD patients with type 2 diabetes experienced positive benefit. Based on these results, we have initiated start-up activities for an adaptive Phase 2/3 trial to evaluate azeliragon as a potential treatment of mild-AD in patients with type 2 diabetes. We are currently finalizing a protocol for the study, negotiating with clinical research organizations to support study conduct activities for the trial and beginning the site selection process. We expect to initiate patient enrollment in this study in mid-2019. We plan to continue to develop azeliragon through internal efforts, based upon receipt of additional funding, or through future partnerships with other life science entities.
  • Simplic-T1 Study enrolling patients with type 1 diabetes. We have completed enrollment of the part 1 learning phase of the adaptive Phase 1/2 Simplici-T1 Study, a 12-week study to evaluate TTP399 as an add-on to insulin therapy for type 1 diabetics, and expect to report results for this portion of the study in June 2019. We have begun the start-up activities for the part 2 confirmatory phase and expect to report results for this portion of the study in the latter part of the first quarter of 2020. TTP399 has previously demonstrated statistically significant reductions in HbA1c levels in the AGATA Study, a phase 2 study in type 2 diabetes.
  • Financing Strategy. We are evaluating several financing strategies to fund the proposed clinical trial of azeliragon for the treatment of mild-AD in patients with type 2 diabetes, including direct equity investment and future public offerings of our common stock. The timing and availability of such financing are not yet known.

Fourth Quarter 2018 Financial Results

  • Cash Position: Cash and cash equivalents as of December 31, 2018, were $1.7 million compared to $3.8 million as of September 30, 2018.
  • R&D Expenses: Research and development expenses were $2.8 million in the fourth quarter of 2018 which were consistent with the $2.7 million of such expenses incurred in the third quarter of 2018.
  • G&A Expenses: General and administrative expenses were $2.1 million and $2.2 million in the fourth and third quarters of 2018, respectively.
  • Net Loss Before Non-Controlling Interest: Net loss before non-controlling interest was $2.3 million for the fourth quarter of 2018 compared to net loss before non-controlling interest of $2.0 million for the third quarter of 2018.
  • Net Loss Per Share: GAAP net loss per share was $0.10 and $0.06 for the three months ended December 31, 2018 and September 30, 2018, respectively, based on weighted-average shares of 17.6 million and 12.3 million for the three month periods ended December 31, 2018 and September 30, 2018, respectively. Non-GAAP net loss per fully exchanged share was $0.08 and $0.06 for the three months ended December 31, 2018 and September 30, 2018, respectively, based on non-GAAP fully exchanged weighted-average shares of 40.7 million and 35.4 million for the three months ended December 31, 2018 and September 30, 2018, respectively.

Full Year 2018 Financial Results

  • R&D Expenses: Research and development expenses were $23.0 million and $39.6 million for the years ended December 31, 2018 and 2017, respectively. The decrease in research and development expenses was primarily driven by the termination of the STEADFAST and open label extension studies and related activities in the second quarter of 2018.
  • G&A Expenses: General and administrative expenses were $9.2 million and $11.3 million for the years ended December 31, 2018 and 2017, respectively. The decrease in general and administrative expenses was primarily due to decreases in expenses for share-based awards, incentive-based compensation and professional services.
  • Net Loss Before Non-Controlling Interest: Net loss before non-controlling interest was $23.8 million and $54.6 million for the years ended December 31, 2018 and 2017, respectively.
  • Net Loss Per Share: GAAP net loss per share was $0.69 and $1.67 for the years ended December 31, 2018 and 2017, respectively, based on weighted-average shares of 12.4 million and 9.7 million for the years ended December 31, 2018 and 2017, respectively. Non-GAAP net loss per fully exchanged share was $0.69 and $1.67 for the year ended December 31, 2018 and 2017, respectively, based on non-GAAP fully exchanged weighted-average shares of 35.5 million and 32.8 million for the years ended December 31, 2018 and 2017, respectively.
       

vTv Therapeutics Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 
 
December 31, September 30,
2018 2018
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 1,683 $ 3,766
Prepaid expenses and other current assets 666 1,006
Current deposits   1,124     1,124  
Total current assets 3,473 5,896
Restricted cash and cash equivalents, long-term 2,500 2,500
Property and equipment, net 70 177
Long-term investments 2,480 2,480
Long-term deposits   36     36  
Total assets $ 8,559   $ 11,089  
Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses $ 7,702 $ 8,965
Current portion of deferred revenue 1,752 6,747
Current portion of notes payable   9,383     9,597  
Total current liabilities 18,837 25,309
Notes payable 6,330 8,611
Deferred revenue, net of current portion 1,067 595
Warrant liability, related party 2,436 382
Other liabilities   260     258  
Total liabilities 28,930 35,155
Commitments and contingencies
Redeemable noncontrolling interest 62,482 19,912
Stockholders’ deficit:
Class A Common Stock 203 158
Class B Common Stock 232 232
Additional paid-in capital 150,595 144,617
Accumulated deficit   (233,883 )   (188,985 )
Total stockholders’ deficit attributable to vTv Therapeutics Inc.   (82,853 )   (43,978 )
Total liabilities, redeemable noncontrolling interest and stockholders’ deficit $ 8,559   $ 11,089  
 
   

vTv Therapeutics Inc.

Condensed Consolidated Statements of Operations - Unaudited

(in thousands, except per share data)

 
 
Three Months Ended
December 31, 2018     September 30, 2018
Revenue $ 4,522 $ 3,375
Operating expenses:
Research and development 2,800 2,698
General and administrative   2,073     2,158  
Total operating expenses   4,873     4,856  
Operating loss (351 ) (1,481 )
Interest income 14 13
Interest expense (743 ) (822 )
Other (expense) income, net   (1,248 )   329  
Loss before income taxes and noncontrolling interest (2,328 ) (1,961 )
Income tax provision        
Net loss before noncontrolling interest (2,328 ) (1,961 )
Less: net loss attributable to noncontrolling interest   (1,237 )   (1,165 )
Net loss attributable to vTv Therapeutics Inc. $ (1,091 ) $ (796 )
Net loss attributable to vTv Therapeutics Inc. common shareholders $ (1,830 ) $ (796 )
Net loss per share of vTv Therapeutics Inc. Class A

Common Stock, basic and diluted

$ (0.10 ) $ (0.06 )
Weighted-average number of vTv Therapeutics Inc.

Class A Common Stock, basic and diluted

  17,635,159     12,305,949  
 
       

vTv Therapeutics Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

 
 

Three Months Ended
December 31,
(Unaudited)

For the Year Ended
December 31,

2018     2017 2018     2017
Revenue $ 4,522 $ 233 $ 12,434 $ 291
Operating expenses:
Research and development 2,800 10,068 23,035 39,640
General and administrative   2,073     2,937     9,223     11,333  
Total operating expenses   4,873     13,005     32,258     50,973  
Operating loss (351 ) (12,772 ) (19,824 ) (50,682 )
Interest income 14 22 61 117
Interest expense (743 ) (852 ) (3,290 ) (3,092 )
Other expense, net   (1,248 )   (190 )   (592 )   (190 )
Loss before income taxes and noncontrolling interest (2,328 ) (13,792 ) (23,645 ) (53,847 )
Income tax provision       800     200     800  
Net loss before noncontrolling interest (2,328 ) (14,592 ) (23,845 ) (54,647 )
Less: net loss attributable to noncontrolling interest   (1,237 )   (10,281 )   (15,934 )   (38,503 )
Net loss attributable to vTv Therapeutics Inc. $ (1,091 ) $ (4,311 ) $ (7,911 ) $ (16,144 )
Net loss attributable to vTv Therapeutics Inc. common shareholders $ (1,830 ) $ (4,311 ) $ (8,650 ) $ (16,144 )
Net loss per share of vTv Therapeutics Inc. Class A Common

Stock, basic and diluted

$ (0.10 ) $ (0.44 ) $ (0.69 ) $ (1.67 )
Weighted-average number of vTv Therapeutics Inc. Class A

Common Stock, basic and diluted

  17,635,159     9,693,254     12,449,236     9,693,254  
 

About vTv Therapeutics

vTv Therapeutics Inc. is a clinical-stage biopharmaceutical company engaged in the discovery and development of orally administered small molecule drug candidates to fill significant unmet medical needs. vTv has a pipeline of clinical drug candidates led by programs for the treatment of Alzheimer’s disease and diabetes as well as treatment of inflammatory disorders.

Forward-Looking Statements

This release contains forward-looking statements, which involve risks and uncertainties. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this release, including statements regarding the timing of our clinical trials, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause our results to vary from expectations include those described under the heading “Risk Factors” in our Annual Report on Form 10-K and our other filings with the SEC. These forward-looking statements reflect our views with respect to future events as of the date of this release and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this release and, except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this release. We anticipate that subsequent events and developments will cause our views to change. Our forward-looking statements do not reflect the potential impact of any future acquisitions, merger, dispositions, joint ventures or investments we may undertake. We qualify all of our forward-looking statements by these cautionary statements.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”), we use non-GAAP earnings per fully exchanged share, which is a non-GAAP financial measure. Non-GAAP earnings per fully exchanged share is defined as net loss attributable to vTv Therapeutics Inc. common shareholders including the loss attributable to the non-controlling interest and assuming the exchange of all the Class B common stock of vTv Therapeutics Inc. and an equal number of non-voting common units of vTv Therapeutics LLC (“vTv Units”) for shares of Class A common stock of vTv Therapeutics Inc. We believe that this measure provides useful information to investors as it eliminates the variability of non-controlling interest resulting from the exchanges of Class B common stock and vTv Units into Class A common stock. This measure is not intended to be considered in isolation or as a substitute for, or superior to, financial measures prepared and presented in accordance with GAAP.

The following is a reconciliation of non-GAAP earnings per fully exchanged share, basic and diluted to its most directly comparable GAAP measure, net loss per share of vTv Therapeutics Class A common stock, basic and diluted and the computation of the components of this non-GAAP measure:

   
Three Months Ended

December 31,
2018

   

September 30,
2018

Numerator:

Net loss attributable to vTv Therapeutics Inc. common shareholders

$ (1,830) $ (796)

Reallocation of net income attributable to non-controlling interest from the assumed exchange of Class B shares (1)

  (1,237)   (1,165)
Net loss before noncontrolling interest $ (3,067) $ (1,961)
Denominator:

Weighted-average number of vTv Therapeutics Inc. Class A Common Stock, basic and diluted

17,635,159 12,305,949
Assumed exchange of Class B Common Stock (1)   23,094,221   23,114,652

Adjusted proforma fully exchanged weighted-average shares of Class A common stock outstanding, basic and diluted

  40,729,380   35,420,601

Adjusted proforma earnings per fully exchanged share, basic and diluted

$ (0.08) $ (0.06)
 
       

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2018     2017 2018     2017
Numerator:

Net loss attributable to vTv Therapeutics Inc. common Shareholders

$ (1,830 ) $ (4,311 ) $ (8,650 ) $ (16,144 )

Reallocation of net income attributable to non-controlling interest from the assumed exchange of Class B shares (1)

  (1,237 )   (10,281 )   (15,934 )   (38,503 )
Net loss before noncontrolling interest $ (3,067 ) $ (14,592 ) $ (24,584 ) $ (54,647 )
Denominator:

Weighted-average number of vTv Therapeutics Inc. Class A Common Stock, basic and diluted

17,635,159 9,693,254 12,449,236 9,693,254
Assumed exchange of Class B Common Stock (1)   23,094,221     23,119,246     23,099,500     23,119,246  

Adjusted proforma fully exchanged weighted-average shares of Class A common stock outstanding, basic and diluted

  40,729,380     32,812,500     35,548,736     32,812,500  

Adjusted proforma earnings per fully exchanged share, basic and diluted

$ (0.08 ) $ (0.44 ) $ (0.69 ) $ (1.67 )
 
(1)   Assumes the exchange of all outstanding Class B common stock, resulting in the elimination of the non-controlling interest and recognition of the net income attributable to non-controlling interests.
 

Source: vTv Therapeutics Inc.

Investors:
vTv Therapeutics Inc.
IR@vtvtherapeutics.com
or
Media:
Josh Vlasto, 212-572-5969
PR@vtvtherapeutics.com