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Intec Pharma Reports Second Quarter 2020 Financial Results and Provides Corporate Update

August 5, 2020 at 7:00 AM EDT

JERUSALEM, Aug. 5, 2020 /PRNewswire/ -- Intec Pharma Ltd. (NASDAQ: NTEC) ("Intec" or "the Company") today announces financial results for the second quarter ended June 30, 2020 and provides a corporate update. 

"We have worked diligently over the past quarter to address the challenges of an evolving landscape for both our business and clinical development initiatives given the global COVID-19 pandemic," stated Jeffrey A. Meckler, Vice Chairman and Chief Executive Officer of Intec Pharma.

"Despite constraints on our ability to conduct in-person meetings, our partnering activities to identify new opportunities and compounds for our unique gastric retentive oral delivery system as well as our partnering efforts for the AP-CD/LD program in Parkinson's disease remain ongoing. Looking into the second half of the year, we continue to seek to advance these productive conversations towards a deal that demonstrates appropriate value for both the Company and our shareholders.

"We look forward to advancing our newly designed AP-THC program into clinical development later this year as we recently received the active pharmaceutical ingredients needed for the clinical material production.

"Earlier this year, we announced we met the in vitro specifications for Merck's compound. At this time, we do not anticipate the compound entering an in vivo study this year.  We continue to discuss development opportunities for the Accordion Pill with Merck.

"Our recent registered direct offering not only strengthens our balance sheet but, more importantly, provides the financial support and flexibility to position the Company for its next stage of development," added Mr. Meckler.

Financial Highlights for Second Quarter Ended June 30, 2020

Research and development expenses, net, for the three-month period ended June 30, 2020 were approximately $1.3 million, a decrease of $6.6 million, or approximately 84%, compared with approximately $7.9 million in the three-month period ended June 30, 2019. Research and development expenses, net, for the six-month period ended June 30, 2020 were approximately $3.3 million, a decrease of approximately $13.1 million, or approximately 80%, compared with approximately $16.4 million in the six-month period ended June 30, 2019. The decrease was primarily due to the completion of the ACCORDANCE study and Open Label Extension study during 2019, decrease in expenses related to the scale up activities for the commercial scale manufacturing and a decrease in payroll and related expenses, mostly due to a reduction in headcount, and share-based compensation.

General and administrative expenses for the three-month period ended June 30, 2020 were approximately $1.6 million, a decrease of $500,000, or approximately 24%, compared with approximately $2.1 million in the three-month period ended June 30, 2019. General and administrative expenses for the six-month period ended June 30, 2020 amounted to approximately $3.3 million, a decrease of approximately $1.0 million, or approximately 23%, compared to approximately $4.3 million for the six-month ended June 30, 2019. The decrease for the three and six-month periods was primarily related to a decrease in payroll and related expenses, including reduction in headcount, share-based compensation and reduction in associated expenses.

Net loss for the three-month period ended June 30, 2020 was approximately $2.9 million, a decrease of $7.1 million, or approximately 71%, compared with the net loss for the three-month period ended June 30, 2019 of approximately $10.0 million. The decrease for the three and six-month periods was mainly due to a decrease in research and development expenses, net, and general and administrative expenses, as detailed above.

Loss per ordinary share for the three-month period ended June 30, 2020, was $0.05 compared with $0.30 for the three-month period ended June 30, 2019. Loss per ordinary share for the six-month period ended June 30, 2020, was $0.12 compared with $0.62 for the six-month period ended June 30, 2019.

As of June 30, 2020, the Company had cash and cash equivalents of approximately $13.8 million. As of December 31, 2019, the Company had cash and cash equivalents and marketable securities of approximately $10.1 million.

Net cash used in operating activities was approximately $6.8 million for the six-month period ended June 30, 2020 compared with net cash used in operating activities of approximately $17.7 million for the six-month period ended June 30, 2019. This decrease resulted primarily from a decrease in research and development activities in the amount of approximately $13.1 million, offset by changes in operating asset and liability items of approximately $2.0 million.

The Company had positive cash flow from investing activities of approximately $769,000 for the six-month period ended June 30, 2020 compared to negative cash flow from investing activities of approximately $1.0 for the six-month period ended June 30, 2019. This change resulted primarily from an investment in the establishment of the commercial scale manufacturing in the amount of approximately $1.4 million in the six-month period ended June 30, 2019 and an increase in proceeds from the disposal of marketable securities in the amount of approximately $200,000.

Net cash provided by financing activities for the six-month period ended June 30, 2020 was approximately $10.6 million, which was provided primarily by the proceeds from the Company's registered direct offering in May 2020 that resulted in net proceeds of approximately $4.5 million, proceeds from the company's underwritten public offering in February 2020 that resulted in net proceeds of approximately $5.7 million and by the funds received from the sale of our ordinary shares under the Company's "at-the-market" equity offering program that resulted in net proceeds of approximately $421,000.

In May 2020, the Company raised $5.0 million in a registered direct offering of 16,291,952 ordinary shares at a purchase price of $0.3069 per share. In addition, in a concurrent private placement, the Company also sold and issued to the purchasers in the offering unregistered warrants to purchase 8,145,976 ordinary shares. The warrants have an exercise price of $0.245 per share, are immediately exercisable, and will expire five and one-half years from the date of issuance. 

About Intec Pharma Ltd.

Intec Pharma is a clinical-stage biopharmaceutical company focused on developing drugs based on its proprietary Accordion Pill platform technology. The Company's Accordion Pill is an oral drug delivery system that is designed to improve the efficacy and safety of existing drugs and drugs in development by utilizing an efficient gastric retention and specific release mechanism. The Company's product pipeline includes two product candidates in clinical trial stages: Accordion Pill Carbidopa/Levodopa, or AP-CD/LD, which is in late-stage Phase 3 development for the treatment of Parkinson's disease symptoms in advanced Parkinson's disease patients, and AP-cannabinoids, an Accordion Pill to deliver either or both of the primary cannabinoids contained in Cannabis sativa, cannabidiol (CBD) and tetrahydrocannabinol (THC) for various pain indications. In addition, the Company has a research collaboration with Merck & Co.

For more information, visit www.intecpharma.com. Intec Pharma routinely posts information that may be important to investors in the Investor Relations section of its website.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward looking statements about our expectations, beliefs and intentions. Forward-looking statements can be identified by the use of forward-looking words such as "believe", "expect", "intend", "plan", "may", "should", "could", "might", "seek", "target", "will", "project", "forecast", "continue" or "anticipate" or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. These forward-looking statements are based on assumptions and assessments made in light of management's experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements in this press release are made as of the date of this press release, and we undertake no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of our control. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the following: our limited operating history and history of operating losses, our ability to continue as a going concern, our ability to obtain additional financing, the impact of the outbreak of coronavirus, our ability to successfully operate our business or execute our business plan, the timing and cost of our clinical trials, the completion and receiving favorable results in our clinical trials, our ability to obtain and maintain regulatory approval of our product candidates, our ability to protect and maintain our intellectual property and licensing arrangements, our ability to develop, manufacture and commercialize our product candidates, the risk of product liability claims, the availability of reimbursement, and the influence of extensive and costly government regulation. More detailed information about the risks and uncertainties affecting us is contained under the heading "Risk Factors" included in our most recent Annual Report on Form 10-K filed with the SEC on March 13, 2020, and in other filings that we have made and may make with the Securities and Exchange Commission in the future.

Intec Pharma Investor Contact:

Will O'Connor 
Stern IR 
+1-212-362-1200 
will@sternir.com 

 

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


June 30,

December 31,


2020

2019


U.S. dollars

 in thousands




                                        Assets



CURRENT ASSETS:



     Cash and cash equivalents

$     13,799

$     9,292

     Investment in marketable securities

-

770

     Prepaid expenses and other receivables

1,307

3,683




TOTAL CURRENT ASSETS

15,106

13,745




NON-CURRENT ASSETS:



     Property and equipment, net

1,967

2,575

     Operating lease right-of-use assets

993

1,243

     Other assets 

3,717

3,717




TOTAL NON-CURRENT ASSETS

6,677

7,535




TOTAL ASSETS

$    21,783

$     21,280




                                        Liabilities and shareholders' equity



CURRENT LIABILITIES -



Accounts payable and accruals:



     Trade

$         382

$       3,507

     Other

3,997

4,835

TOTAL CURRENT LIABILITIES 

4,379

8,342




LONG-TERM LIABILITIES -



     Non-current operating lease liabilities

536

799

     Other liabilities

690

604




TOTAL LONG-TERM LIABILITIES

1,226

1,403




TOTAL LIABILITIES

5,605

9,745




COMMITMENTS AND CONTINGENT LIABILITIES






SHAREHOLDERS' EQUITY:

Ordinary shares, with no par value - authorized: 100,000,000
Ordinary Shares as of June 30, 2020 and December 31, 2019; issued
and outstanding: 69,428,032 and 35,892,209 Ordinary Shares as of
June 30, 2020 and December 31, 2019, respectively

727

727

             Additional paid-in capital

211,691

200,231

             Accumulated deficit

(196,240)

(189,423)




TOTAL SHAREHOLDERS' EQUITY

16,178

11,535




TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$     21,783

$     21,280

 

 

 

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



Three months ended
June 30

Six months ended
June 30


2020

2019

2020

2019


U.S. dollars

 in thousands

U.S. dollars

 in thousands

OPERATING EXPENSES:





RESEARCH AND DEVELOPMENT 
     EXPENSES,
net

$      (1,275)

$      (7,860)

$     (3,299)

$     (16,402)

GENERAL AND ADMINISTRATIVE 
     EXPENSES

(1,630)

(2,144)

(3,345)

(4,334)

OPERATING LOSS

(2,905)

(10,004)

(6,644)

(20,736)

FINANCIAL INCOME (EXPENSES), net

4

33

(66)

143

LOSS BEFORE INCOME TAX

(2,901)

(9,971)

(6,710)

(20,593)

INCOME TAX

(46)

(38)

(107)

(72)

NET LOSS

$    (2,947)

$    (10,009)

$    (6,817)

$    (20,665)


$

$

LOSS PER SHARE BASIC AND DILUTED

(0.05)

(0.30)

(0.12)

(0.62)

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING USED IN COMPUTATION
OF BASIC AND DILUTED LOSS PER
ORDINARY SHARE IN THOUSANDS

62,820

33,300

54,913

33,274

 

 

(Continued) - 1

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)


Ordinary Shares

Additional
paid-in
capital

Accumulated
Deficit

Total


Number
of shares

Amounts

 Amounts



U.S. dollars in thousands













BALANCE AT JANUARY 1, 2019

33,232,988

$    727

$   194,642

(141,824)

$                 53,545

CHANGES IN THE SIX-MONTH PERIOD
ENDED JUNE 30, 2019:






     Exercise of options

69,812

-

268

-

268

     Share-based compensation


-

1,961

-

1,961

     Net loss

-

-

-

(20,665)

(20 ,665)

BALANCE AT JUNE 30, 2019

33,302,800

$    727

$   196,871

$    (162,489)

$                 35,109







BALANCE AT JANUARY 1, 2020

35,892,209

$    727

$   200,231

$    (189,423)

$                 11,535

CHANGES IN THE SIX-MONTH PERIOD
ENDED JUNE 30, 2020:






     Issuance of ordinary shares, net of 
          issuance costs 

831,371

-

421

-

421

     Issuance of ordinary shares and 
     warrants, net of issuance of costs

16,250,000

-

5,692

-

5,692

     Issuance of ordinary shares and
     warrants, net of issuance of costs

16,291,952

-

4,426

-

4,426

          Exercise of warrants

162,500


65


65

     Share-based compensation

-

-

856

-

856

     Net loss

-

-

-

(6,817)

(6,817)

BALANCE AT JUNE 30, 2020

69,428,032

$    727

$   211,691

$   (196,240)

$                 16,178

 

 

(Continued) - 2

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)


Ordinary Shares

Additional
paid-in
capital

Accumulated
Deficit


Total


Number of shares

Amounts

Amounts



U.S. dollars in thousands

BALANCE AT APRIL 1, 2019

33,297,371

$        727

$       195,842

(152,480)

$          44,089

CHANGES IN THE THREE-MONTH PERIOD
ENDED JUNE 30, 2019:






Exercise of options

5,429

-

11

-

11

Share-based compensation

-

-

1,018

-

1,018

Net loss

-

-

-

(10,009)

(10,009)

BALANCE AT JUNE 30, 2019

33,302,800

$           727

$        196,871

$                 (162,489)

$   35,109







BALANCE AT APRIL 1, 2020

52,973,580

$           727

$        206,786

$                 (193,293)

$   14,220

CHANGES IN THE THREE-MONTH PERIOD
ENDED JUNE 30, 2020:






         Issuance of ordinary shares and 

16,291,952

-

4,426

-

4,426

     warrants, net of issuance costs 

Exercise of warrants  

162,500

-

65

-

65

Share-based compensation

-

-

414

-

414

Net loss

-

-

-

(2,947)

(2,947)

BALANCE AT JUNE 30, 2020

69,428,032

$           727

$        211,691

$                 (196,240)

$    16,178

 

 

 

INTEC PHARMA LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Six months ended June 30


2020

2019


U.S. dollars in thousands

CASH FLOWS FROM OPERATING ACTIVITIES:



Net loss

$     (6,817)

$     (20,665)

Adjustments required to reconcile net loss to net cash used in operating activities:



Depreciation

611

431

Exchange differences on cash and cash equivalents

49

(19)

Change in right of use asset

250

351

Change in lease liabilities

(263)

(243)

Gains on marketable securities

(2)

(5)

Share-based compensation

856

1,961

Changes in operating assets and liabilities:



Decrease (increase) in prepaid expenses and other receivables

2,376

(136)

Increase in deferred tax assets

-

(148)

Increase (decrease) in accounts payable and accruals

(3,963)

583

Increase in other liabilities

86

163

Net cash used in operating activities

(6,817)

(17,727)

CASH FLOWS FROM INVESTING ACTIVITIES:



Purchase of property and equipment

(3)

(151)

Investment in other assets

-

(1,435)

Proceeds from disposal of marketable securities, net

772

576

Net cash provided by (used in) investing activities

769

(1,010)

CASH FLOWS FROM FINANCING ACTIVITIES:



Proceeds from issuance of ordinary shares, net of issuance costs

421

-

Proceeds from issuance of ordinary shares and warrants, net of issuance costs

5,692

-

Proceeds from issuance of ordinary shares and warrants, net of issuance costs

4,426

-

Proceeds from exercise of warrants

65

-

Proceeds from exercise of options

-

268

Net cash provided by financing activities

10,604

268

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

4,556

(18,469)

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD

9,292

39,246

EXCHANGE DIFFERENCES ON CASH AND CASH EQUIVALENTS

(49)

19

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD

$        13,799

$         20,796




SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:



Liability with respect to property and equipment 

-

$              502

Liability with respect to other assets

-

$           1,114




SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION -



Taxes paid

-

$                50

Interest received

$              27

$              263

 

 

Cision View original content:http://www.prnewswire.com/news-releases/intec-pharma-reports-second-quarter-2020-financial-results-and-provides-corporate-update-301106454.html

SOURCE Intec Pharma Ltd.