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Clementia Reports Third Quarter 2017 Financial Results and Business Highlights

November 13, 2017 at 8:00 AM EST

Initial Public Offering Completed, Raising $128.2 Million in Net Proceeds

U.S. FDA Grants Breakthrough Therapy Designation to Palovarotene for Fibrodysplasia Ossificans Progressiva (FOP)

On Track to Begin Pivotal MOVE Study in FOP Later this Year

MONTREAL, Nov. 13, 2017 (GLOBE NEWSWIRE) -- Clementia Pharmaceuticals Inc. (NASDAQ:CMTA), a clinical-stage biopharmaceutical company, today reported financial results for the quarter ended September 30, 2017 and provided an update on recent corporate and clinical developments.

“With the successful completion of our initial public offering we have the necessary resources to initiate our Phase III MOVE Trial evaluating palovarotene for FOP this quarter, as well as our Phase II/III MO-Ped Trial evaluating palovarotene for multiple osteochondromas (MO) in early 2018,” commented Clarissa Desjardins, chief executive officer of Clementia. “The MOVE Trial is the first-ever Phase III clinical trial for the treatment of patients with FOP, and we look forward to working closely with patients and investigators around the world to complete this study while also advancing our clinical programs for MO and dry eye disease in 2018.”

Recent Corporate Highlights

  • In August, Clementia completed an initial public offering (IPO) of 9.2 million common shares at a price of $15 per share for net proceeds of approximately $128.2 million, after underwriting discounts and commissions.  
  • In July, Clementia received Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA) for palovarotene for the prevention of heterotopic ossification (HO) in patients with FOP.
  • In November, palovarotene was granted Orphan Drug Designation from the FDA for the treatment of MO.

Upcoming Milestones

  • Following positive engagement with U.S. and international regulatory authorities around the MOVE study protocol, Clementia is on track to begin this Phase III study and enroll the first patient by the end of 2017. The Company plans to host a conference call with investors and Clementia’s clinical team to review the clinical program in greater detail at that time.
  • The Company anticipates reporting preliminary results from the Part B open-label extension portion of its ongoing Phase II study of palovarotene in FOP in the second quarter of 2018.
  • The Company has received regulatory feedback on the protocol for its Phase II/III MO-Ped study of palovarotene for the treatment of patients with MO, and expects to enroll the first patient in this global study by early 2018.

Third Quarter 2017 Financial Results (all amounts are presented in U.S. dollars.)

  • Cash: As of September 30, 2017, Clementia had cash and investments of $152.2 million, which includes the $128.2 million raised in Clementia’s IPO completed in August.
  • Research and development (R&D) expenses: R&D expenses were $7.1 million and $16.8 million, respectively, for the three and nine months ended September 30, 2017, compared to $4.5 million and $11.5 million, respectively, for the same periods in 2016. Increases in R&D expenses were primarily due to clinical costs associated with the Company’s lead program, palovarotene for FOP, as well as employee-related costs, including salary, benefits and stock-based compensation due to the increase in R&D headcount to support additional clinical trials.
  • General and administrative (G&A)expenses: G&A expenses were $2.8 million and $6.9 million, respectively, for the three and nine months ended September 30, 2017, compared to $0.7 million and $2.6 million, respectively for the same periods in 2016. Increases in G&A expenses were primarily due to IPO related costs, as well as employee-related expenses, including salary, benefits and stock-based compensation due to the increase in G&A headcount to support the continued growth of the Company.
  • Net Loss: Clementia reported net losses for the three and nine months ended September 30, 2017 of $39.0 million ($1.83 per share) and $103.7 million ($11.81 per share), respectively, compared to $1.6 million ($0.69 per share) and $9.1 million ($3.89 per share), respectively, for the same periods in 2016. The increases in net losses were largely driven by non-cash financial expenses primarily due to the re-measurement at fair value of the preferred shares embedded derivative in the three and nine months ended September 30, 2017 as compared to 2016. With the successful completion of the Company’s IPO in August, all classes of preferred shares have been converted into common shares and as such, gains or losses on the re-measurement of embedded derivatives at fair value and the accretion expense has ended in the third quarter of 2017.

About Clementia Pharmaceuticals Inc.
Clementia is a clinical-stage biopharmaceutical company committed to delivering treatments to people who have none. The Company is developing its lead candidate palovarotene, a novel RARγ agonist, to treat fibrodysplasia ossificans progressiva (FOP), multiple osteochondromas (MO, also known as hereditary multiple exostoses), and other diseases. For more information, please visit www.clementiapharma.com.

Cautionary Note Regarding Forward-Looking Statements
This press release may include “forward-looking statements” within the meaning of the applicable securities laws. Each forward-looking statement contained in this press release is subject to known and unknown risks and uncertainties and other unknown factors that could cause actual results to differ materially from historical results and those expressed or implied by such statement. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “intends,” “anticipates,” “will,” or “plans” to be uncertain and forward-looking. Applicable risks and uncertainties include, among others, our ability to generate revenue and become profitable; the risks related to our heavy reliance on palovarotene, our only current product candidate; the risks associated with the development of palovarotene and any future product candidate, including the demonstration of efficacy and safety; our heavy dependence on licensed intellectual property, including our ability to source and maintain licenses from third-party owners; as well as the risks identified under the heading “Risk Factors” in our Prospectus on Form 424(b) filed with the Securities and Exchange Commission (“SEC”), as well as the other information we file with the SEC or on SEDAR.  We caution investors not to rely on the forward-looking statements contained in this press release when making an investment decision in our securities.  You are encouraged to read our filings with the SEC or on SEDAR, available at www.sec.gov or www.sedar.com, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this press release, and we undertake no obligation to update or revise any of these statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor/Media Contact:
Joseph Walewicz
Clementia Pharmaceuticals Inc.
+1-514-940-1080

Chelcie Lister
THRUST Investor Relations
+1-910-777-3049

       
Clementia Pharmaceuticals Inc.
Interim Condensed Consolidated Statements of Financial Position (unaudited)
       
As at
(in US dollars)
  September 30,
2017
    December 31,
2016
 
Assets      
Current assets      
Cash   $37,238,196   $9,434,495  
Short-term investments     40,000,000     30,000,000  
Interest receivable     260,082     307,579  
Sales tax and other receivables     175,840     90,966  
Investment tax credits receivable     350,747     139,223  
Prepaid expenses     4,459,864     652,158  
Total current assets     82,484,729     40,624,421  
       
Non-current assets      
Long-term investments     75,000,000     -  
Property and equipment     35,330     38,163  
Intangible assets     1,763,866     894,584  
Total non-current assets     76,799,196     932,747  
       
Total assets   $159,283,925   $41,557,168  
       
Liabilities      
Current liabilities      
Accounts payable and accrued liabilities   $6,371,234   $4,521,537  
Income taxes payable     119,925     2,176  
Total current liabilities     6,491,159     4,523,713  
       
Non-current liabilities      
Preferred shares     -     67,880,952  
Embedded derivatives     -     117,824,611  
Total non-current liabilities     -     185,705,563  
       
Total liabilities   $6,491,159     190,229,276  
       
Equity      
Common shares     230,659,692     272,391  
Contributed surplus     1,956,515     498,471  
Deficit     (79,823,441 )   (149,442,970 )
Total equity     152,792,766     (148,672,108 )
       
Total equity and liabilities   $159,283,925   $41,557,168  
               

 

 
Clementia Pharmaceuticals Inc.
Interim Condensed Consolidated Statements of Net Loss and Comprehensive Loss (unaudited)
 
      Three-month periods ended
September 30,
  Nine-month periods ended
September 30,
 
(in US dollars)       2017     2016     2017     2016  
             
Expenses            
             
Research and development expenses     $7,073,872   $4,490,048   $16,813,902   $11,544,330  
Investment tax credits       (91,484 )   (31,154 )   (211,524 )   (106,099 )
        6,982,388     4,458,894     16,602,378     11,438,231  
             
General and administrative expenses       2,816,980     696,403     6,878,786     2,564,282  
             
Interest income       (316,081 )   (94,626 )   (503,915 )   (310,062 )
Financial expenses (income)       29,415,957     (3,477,195 )   80,440,739     (4,671,170 )
             
Net loss before income taxes       38,899,244     1,583,476     103,417,988     9,021,281  
             
Income tax expense       106,310     43,569     248,338     116,527  
             
Net loss and comprehensive loss ($39,005,554 ) ($1,627,045 ) ($103,666,326 ) ($9,137,808 )
             
Basic and diluted loss per share   ($1.83 ) ($0.69 ) ($11.81 ) ($3.89 )
Weighted average number of outstanding basic and diluted shares     21,317,604     2,351,347     8,778,602     2,351,347  
                           

 

 
Clementia Pharmaceuticals Inc.
Interim Condensed Consolidated Statements of Cash Flows (unaudited)
 
    Three-month periods ended
September 30,
  Nine-month periods ended
September 30,
 
(in US dollars)     2017     2016     2017     2016  
           
Operating activities          
Net loss   ($39,005,554 ) ($1,627,045 ) ($103,666,326 ) ($9,137,808 )
Adjusting items          
Interest income recognized in net loss     (316,081 )   (94,626 )   (503,915 )   (310,062 )
Depreciation of property and equipment     6,063     8,418     19,855     26,137  
Amortization of intangible assets     48,673     34,570     130,718     102,957  
Transaction costs recognized in net loss     -     -     35,175     -  
Embedded derivative loss recognized in net loss     29,007,078     (4,430,279 )   77,902,663     (7,346,146 )
Accretion of preferred shares     393,425     942,203     2,479,161     2,786,261  
Share-based compensation     795,806     42,982     1,478,082     142,985  
Net foreign exchange gain     (32,634 )   14,313     (48,026 )   (116,753 )
Income tax expense recognized in net loss   106,310     43,569     248,338     116,527  
Income taxes paid     (42,500 )   (32,939 )   (130,589 )   (38,219 )
Net changes in working capital          
Sales tax and other receivables     (49,860 )   (46,264 )   (74,884 )   (30,505 )
Investment tax credits receivable     (91,484 )   136,408     (211,524 )   271,802  
Deferred financing costs     275,784     -     -     -  
Prepaid expenses     (3,727,642 )   (267,872 )   (3,807,706 )   (706,665 )
Accounts payable and accrued liabilities     457,938     1,714,117     1,835,789     721,711  
Net operating cash flows     (12,714,678 )   (3,562,445 )   (24,313,189 )   (13,517,778 )
           
Investing activities          
Interest income received     184,040     52,624     551,412     83,077  
Acquisition of short and long-term investments     (109,000,000 )   -     (134,000,000 )   (40,000,000 )
Maturity of short-term investments     19,000,000     10,000,000     49,000,000     10,000,000  
Acquisition of property and equipment     (4,194 )   (1,138 )   (17,022 )   (20,613 )
Acquisition of intellectual property     -     -     (1,000,000 )   -  
Net investing cash flows     (89,820,154 )   10,051,486     (85,465,610 )   (29,937,536 )
           
Financing activities          
Issuance of common shares     -     -     31,588     -  
Issuance of common shares upon public offering     137,865,000     -     137,865,000     -  
Share issuance costs     (10,236,593 )   -     (10,236,593 )   -  
Issuance of preferred shares     -     -     10,000,080     -  
Issue costs of preferred shares     -     -     (129,520 )   -  
Net financing cash flows     127,628,407     -     137,530,555     -  
           
Net increase (decrease) in cash     25,633,575     6,489,041     27,751,756     (43,455,314 )
Cash at beginning of period     11,584,221     8,298,313     9,434,495     58,106,885  
Effect of exchange rate fluctuations on cash held   20,400     (15,355 )   51,945     120,428  
Cash at end of period   $37,238,196   $14,771,999   $37,238,196   $14,771,999  

 

 

Source: Clementia Pharmaceuticals Inc.