Innovate Biopharmaceuticals Reports Financing to Initiate Phase 3 Clinical Trial
Innovate Biopharmaceuticals, Inc. recently announced it closed its previously announced equity financing, resulting in gross proceeds of $9.7 million. The company expects to use the estimated net proceeds of approximately $9.6 million from the offering to initiate its first Phase 3 registration trial of larazotide acetate, or INN-202, for celiac disease, and for working capital and general corporate purposes. On March 18, 2019, the company also reported its year end 2018 financial results and key highlights.
Recent Achievements and Upcoming Milestones
-Innovate entered into an agreement with ICON Clinical Research Limited to facilitate the Company’s completion of startup activities required to initiate its Phase 3 clinical trial for celiac disease.
-Manufacturing of the drug product for our Phase 3 trial has been completed.
-Acceptance of three abstracts to the 2019 Digestive Disease Week (DDW) through collaboration with North Carolina State University and Massachusetts General Hospital, including one with Prof. Anthony Blikslager of North Carolina State University to understand the molecular biology and mechanism of action of larazotide.
-Start of the first Phase 3 celiac disease trial
-Continuation of pre-clinical studies for non-alcoholic steatohepatitis (NASH) and alcoholic steatohepatitis (ASH).
-Initiation of additional scientific and clinical collaborations.
Sandeep Laumas, MD, CEO of Innovate, said “The fourth quarter of 2018 was focused on continued preparation for our first celiac disease Phase 3 clinical trial, which we plan to initiate in the second quarter of 2019. We are also encouraged by the pre-clinical data we have seen for NASH so far and Innovate intends to continue further pre-clinical work for the use of larazotide in the treatment of NASH.”
Net loss for the year ended December 31, 2018, was $24.2 million, or $(0.98) per basic and diluted share, compared to net loss of $11.6 million, or $(0.98) per basic and diluted share for the same period ended December 31, 2017.
Research and development expenses were $7.6 million for the year ended December 31, 2018, an increase of $3.6 million, compared to $4.0 million for the same period ended December 31, 2017, primarily due to an increase in costs associated with the preparation for our Phase 3 clinical trials of INN-202 for celiac disease and an increase in compensation costs related to an increase in research and development personnel.
General and administrative expenses were $10.7 million for the year ended December 31, 2018, an increase of $3.5 million, compared to $7.2 million for the same period ended December 31, 2017, primarily due to an increase in compensation costs for general and administrative personnel, an increase in accounting, legal and transaction advisory fees associated with our reverse merger, SEC filings and outsourced accounting personnel as well as an increase in costs associated with operating as a public company. The increase in these costs was partially offset by a decrease in non-cash stock compensation expense.
At December 31, 2018, Innovate had $5.7 million in cash and cash equivalents compared to $0.4 million at December 31, 2017.
Innovate is a clinical stage biotechnology company focused on developing novel therapeutics for autoimmune and inflammatory diseases. Innovate’s lead drug candidate, larazotide acetate, has a mechanism of action that renormalizes the dysfunctional intestinal barrier by decreasing intestinal permeability and reducing antigen trafficking, such as gliadin fragments in celiac disease, and bacterial toxins and immunogenic antigens in nonalcoholic steatohepatitis (NASH). In several diseases, including celiac disease, NASH, Crohn’s disease, ulcerative colitis, irritable bowel syndrome (IBS), type 1 diabetes mellitus (T1DM), chronic kidney disease (CKD), the intestinal barrier is dysfunctional with increased permeability.
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