Tetraphase Pharmaceuticals
Nov 14, 2013

Tetraphase Reports Third-Quarter 2013 Financial Results

WATERTOWN, Mass.--(BUSINESS WIRE)-- Tetraphase Pharmaceuticals, Inc. (NASDAQ:TTPH) today reported financial results for the quarter ended September 30, 2013.

"The third quarter of 2013 was a productive one for us," said Guy Macdonald, Tetraphase President and Chief Executive Officer. "We not only advanced our lead antibiotic candidate eravacycline into pivotal clinical trial development, with the start of a Phase 3 clinical trial for the treatment of complicated intra-abdominal infections, but also confirmed details of our second Phase 3 trial, which will involve IV-to-oral step-down of eravacycline in the treatment of complicated urinary tract infections. We believe the ability of eravacycline to be used in both IV and oral formulations for the treatment of multidrug-resistant Gram-negative infections would be a key competitive advantage versus existing and late-stage development therapies, if it is ultimately approved."

"In addition," Mr. Macdonald continued, "we believe that the completion of our recent equity offering will provide us with enough funding to complete both eravacycline Phase 3 trials and, if the trials are successful, to submit a New Drug Application to the FDA. We are also delighted to welcome a number of new, high-quality investors to our existing shareholder group."

Third-Quarter Financial Results

As of September 30, 2013, Tetraphase had cash and cash equivalents of $67.8 million. In addition to this, the Company subsequently raised net proceeds of approximately $42 million from a common stock offering in November 2013.

For the third quarter of 2013, Tetraphase reported a net loss of $10.1 million, or $0.49 per share, compared to a net loss of $3.1 million, or $9.63 per share, for the comparable period in 2012.

Revenue for the third quarter of 2013 was $2.2 million compared to $2.5 million for the same period in 2012. Revenue for each period consisted of contract and grant revenue under three U.S. government awards for the development of Tetraphase compounds as potential countermeasures for the treatment of diseases caused by bacterial biothreat pathogens. These funds are received through subcontracts and a subaward from CUBRC Inc., an independent, not-for-profit research corporation that specializes in U.S. government-based contracts. These U.S. government awards consist of an award from Biomedical Advanced Research and Development Authority (BARDA) for eravacycline and two awards from the National Institute of Allergy and Infectious Diseases (NIAID) for the Company's preclinical compound TP-271. The decrease in revenue during the quarter ended September 30, 2013 compared to the quarter ended September 30, 2012 was primarily due to timing and scope of preclinical activities conducted during the period under the NIAID contract.

Research and development expenses for the third quarter of 2013 were $10.0 million, compared to $4.4 million for the same period in 2012. The increase was primarily due to an increase in expenses related to clinical and drug manufacturing costs associated with the Phase 3 program for eravacycline, as well as a $2.0 million milestone fee under the Company's license agreement with Harvard University in connection with the dosing of the first patient in the Phase 3 clinical trial program.

General and administrative expenses for the third quarter of 2013 were $1.9 million, compared to $1.0 million for the same period in 2012. This increase was primarily due to an increase in various general costs due to operating as a public company, as well as an increase in personnel-related costs.

Recent Highlights

Subsequent to the end of the third quarter of 2013, Tetraphase achieved the following:

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 multidrug-resistant (MDR) bacterial 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 multidrug-resistant infections, including MDR Gram-negative infections.

Any statements in this press release about our future expectations, plans and prospects, including statements regarding our ability to complete the two Phase 3 clinical trials of eravacycline referred to in this press release, statements with respect to 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 end of 2015; whether results obtained in preclinical studies and early clinical trials of eravacycline will be indicative of results obtained in future clinical trials, including the Phase 3 clinical trials referred to in this press release; 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 most recent quarterly report on Form 10-Q. In addition, the forward-looking statements included in this press release represent our views as of November 14, 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 Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
Revenues $ 2,166   $ 2,537   $ 8,588   $ 4,360  
Operating expenses
Research and development 9,992 4,419 21,014 12,681
General and administrative   1,860     1,017     4,841     2,980  
Total operating expenses   11,852     5,436     25,855     15,661  
Loss from operations   (9,686 )   (2,899 )   (17,267 )   (11,301 )
Other income (expense)
Interest income 3 5
Interest expense (433 ) (202 ) (1,334 ) (652 )
Other income (expense)   -     23     263     (82 )
Other expense, net   (430 )   (179 )   (1,066 )   (734 )
Net loss $ (10,116 ) $ (3,078 ) $ (18,333 ) $ (12,035 )

Net loss per share applicable to common
stockholders-basic and diluted

$ (0.49 ) $ (9.63 ) $ (1.27 ) $ (38.16 )

Weighted-average number of common shares
used in net loss per share applicable to common
stockholders-basic and diluted



    320     14,435     315  
Tetraphase Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
September 30, December 31,
2013 2012
Cash and cash equivalents $ 67,832 $ 9,079
Accounts receivable 2,134 2,452
Prepaid expenses and other current assets 2,182 850
Property and equipment, net 174 235
Other assets, noncurrent   491   1,456  
Total assets $ 72,813 $ 14,072  
Liabilities and stockholders' equity (deficit)
Accounts payable and accrued expenses $ 7,393 $ 4,321
Total term loan 12,208 11,650
Total deferred revenue 242 699
Warrant liability - 610
Convertible preferred stock - 79,841
Stockholder's equity (deficit)   52,970   (83,049 )
Total liabilities and stockholders' equity (deficit) $ 72,813 $ 14,072  

Tetraphase Pharmaceuticals
Jennifer LaVin, 617-715-3591
Executive Director, Corp. Communications
Argot Partners
Susan Kim, 212-600-1902
Sam Brown Inc.
Mike Beyer, 773-463-4211

Source: Tetraphase Pharmaceuticals, Inc.

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