May 13, 2013

Tetraphase Reports First Quarter 2013 Financial Results

WATERTOWN, Mass.--(BUSINESS WIRE)-- Tetraphase Pharmaceuticals, Inc. (NASDAQ:TTPH) today reported financial results for the first quarter ended March 31, 2013.

"Following our successful initial public offering in March 2013, Tetraphase is well positioned to advance our lead candidate eravacycline for the treatment of multi-drug resistant infections, particularly difficult-to-treat serious and life-threatening Gram-negative infections, that represent a potential global health crisis," said Guy Macdonald, Tetraphase President and Chief Executive Officer. "We look forward to completing our Phase 1 eravacycline oral PK program in mid-2013, and to launching our two planned Phase 3 studies in the second half of the year, one for the treatment of complicated intra-abdominal infections, or cIAI, which we expect to commence in the third quarter, and one for the treatment of complicated urinary tract infections, or cUTI, which we expect to commence in the fourth quarter. We expect to have top line data from both of these trials in the first quarter of 2015."

First Quarter Financial Results

As of March 31, 2013, Tetraphase had cash and cash equivalents of $78.2 million.

For the first quarter of 2013, Tetraphase reported a net loss of $2.8 million, or $0.30 per share, compared to a net loss of $4.7 million, or $0.52 per share, for the comparable period in 2012.

Revenues for the three months ended March 31, 2013 were $2.7 million compared to $0.5 million for the same period in 2012. Our revenues are derived from three U.S. government awards for the development of our compounds as potential counter measures for the treatment of disease caused by bacterial biothreat pathogens through subcontracts and a subaward from our collaborator CUBRC Inc. (CUBRC), an independent, not-for-profit, research corporation that specializes in U.S. government-based contracts. Revenues for the three-month periods ended March 31, 2013 and 2012, consisted of contract and grant revenue under an award from Biomedical Advanced Research and Development Authority (BARDA) that provides funding of up to $67.0 million over five years for our lead product candidate, eravacyline, and two awards from National Institute of Allergy and Infectious Diseases (NIAID) that provide funding of up to $40.0 million over five years for our preclinical compound TP-271.

Research and development expenses for the first quarter of 2013 were $4.1 million, compared to $4.0 million for the same period in 2012. The increase was primarily due to an increase in expenses related to activities under our subcontracts with CUBRC with respect to the BARDA contract, the NIAID contract and our subaward under the NIAID grant, offset in part by lower clinical costs attributable to the completion of our Phase 2 clinical trial of eravacycline in the first half of 2012.

General and administrative expenses for the first quarter of 2013 were $1.2 million, compared to $1.0 million for the same period in 2012.

Recent Highlights

  • Planned Initiation of Two Phase 3 Clinical Trials with Lead Product Candidate Eravacycline in Two Indications. Consistent with recent draft guidance issued by the U.S. Food and Drug Administration (FDA) with respect to the development of antibiotics for cIAI and discussions with the FDA at an End-of-Phase-2 meeting in January 2013, we plan to conduct two Phase 3 clinical trials of eravacycline, one for the treatment of patients with cIAI and the other for the treatment of patients with cUTI. We expect to begin the cIAI Phase 3 clinical trial in the third quarter of 2013 and the cUTI Phase 3 clinical trial in the fourth quarter of 2013.
  • Completion of Initial Public Offering. In March 2013, Tetraphase announced the completion of its initial public offering of 10,714,286 shares of common stock which, together with the exercise in April 2013, of the underwriters' over-allotment option to purchase an additional 797,792 shares, resulted in aggregate proceeds of $80.6 million, before underwriting discounts, commissions and expenses. Proceeds from the IPO are expected to enable us to obtain top-line data from our two planned Phase 3 clinical trials, which is expected to occur in the first quarter of 2015.
  • Presentation of Data at the 23rd European Congress of Clinical Microbiology and Infectious Disease (EECMID). In April 2013, Tetraphase presented data from its Phase 2 clinical trial of its lead product candidate, eravacycline, supporting the efficacy of eravacycline in the treatment of patients with cIAI, and data on the activity of TP-271, a preclinical compound, against community-acquired bacterial pneumonia (CABP), at ECCMID in Berlin, Germany.

About Tetraphase Pharmaceuticals, Inc.

Tetraphase is a clinical-stage biopharmaceutical company using its proprietary chemistry technology to create novel antibiotics for serious and life-threatening multi-drug resistant infections. Tetraphase's lead product candidate, eravacycline, is a fully synthetic tetracycline derivative being developed as a broad-spectrum intravenous and oral antibiotic for use as a first-line empiric monotherapy for the treatment of multi-drug resistant infections, including multi-drug resistant Gram-negative infections.

Any statements in this press release about our future expectations, plans and prospects, including statements regarding our strategy, future operations, prospects, plans and objectives, and other statements containing the words "believes," "anticipates," "plans," "expects," and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: whether our cash resources will be sufficient to fund our continuing operations through the first quarter of 2015; whether results obtained in preclinical studies and early clinical trials, such as the results from the Phase 2 trial referred to in this press release, will be indicative of results obtained in future clinical trials; whether we are able to develop an oral formulation of eravacycline on a timely basis or at all; whether eravacycline will advance through the clinical trial process on a timely basis and receive approval from the United States Food and Drug Administration or equivalent foreign regulatory agencies; whether, if eravacycline obtains approval, it will be successfully distributed and marketed; and other factors discussed in the "Risk Factors" section of our quarterly report on Form 10-Q. In addition, the forward-looking statements included in this press release represent our views as of May 13, 2013. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

           
Tetraphase Pharmaceuticals, Inc.
Condensed Statement of Operations (Unaudited)
(In thousands except share and per share data)
 
Three Months Ended
March 31,
  2013     2012  
 
Revenues $ 2,700   $ 507  
Operating expenses
Research and development 4,098 4,001
General and administrative   1,225     961  
Total operating expenses   5,323     4,962  
Loss from operations   (2,623 )   (4,455 )
Other income (expense)
Interest expense (431 ) (234 )
Other income (expense)   263      
Other income (expense), net   (168 )   (234 )
Net loss   (2,791 )   (4,689 )
Net loss per share applicable to common stockholders-basic and diluted $ (0.30 ) $ (0.52 )
Weighted-average number of common shares used in net loss per share
applicable to common stockholders-basic and diluted   9,445,923     8,938,399  
 
           
Tetraphase Pharmaceuticals, Inc.
Condensed Balance Sheet (Unaudited)
(In thousands)
 
March 31,       December 31,
  2013   2012  
Assets
Current assets:
Cash and cash equivalents $ 78,163 $ 9,079
Accounts receivable 1,912 2,452
Prepaid expenses and other current assets   437   850  
Total current assets 80,512 12,381
Property and equipment, net 209 235
Other assets   189   1,456  
Total assets $ 80,910 $ 14,072  
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable 2,033 2,018
Accrued liabilities 1,972 2,303
Deferred revenue 333 699
Current portion of term loan payable   4,782   3,641  
Total current liabilities 9,120 8,661
Warrant liability - 610
Term loan   9,184   8,009  
Total Liabilities   18,304   8,619  
Total stockholders' equity (deficit)   62,606   (83,049 )
Total liabilities and stockholders' equity (deficit) $ 80,910 $ 14,072  
 

Investors:
Tetraphase Pharmaceuticals
David Lubner
Senior Vice President & CFO
617-715-3551
dlubner@tphase.com
or
Argot Partners
Susan Kim
212-600-1902
susan@argotpartners.com
or
Media:
Sam Brown Inc.
Mike Beyer
773-463-4211
beyer@sambrown.com

Source: Tetraphase Pharmaceuticals, Inc.

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