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Forward Pharma Reports Third Quarter 2016 Financial and Operational Results

COPENHAGEN, Denmark, Nov. 29, 2016 (GLOBE NEWSWIRE) -- Forward Pharma A/S (NASDAQ:FWP) (“we” or “Forward” or the “Company”), today reported financial results for the third quarter ended September 30, 2016.  Net loss for the third quarter ended September 30, 2016 was $11.0 million, or $0.23 per basic share versus a net loss of $15.8 million, or $0.34 per basic share for the third quarter of 2015.  On a non-GAAP basis, after removing the effect of non-cash income and expense items, our third quarter net loss for 2016 would have been $7.3 million, or $0.15 per basic share. As of September 30, 2016, the Company had $150.2 million in cash, cash equivalents and marketable securities, with no debt outstanding. 

“We continue to advance our clinical programs and our intellectual property portfolio and look forward to the oral argument on our interference case to be held tomorrow at the USPTO,” said Peder Andersen, Chief Executive Officer of Forward.

Third Quarter ended September 30, 2016 Financial and Operational Results

The net loss for the third quarter of 2016 was $11.0 million compared to a net loss of $15.8 million for the comparable period in 2015.

Research and development costs for the three month periods ended September 30, 2016 and 2015 were $7.7 million and $10.8 million, respectively. This decrease in the third quarter 2016 versus the prior year was related to a reduction in the use of contract manufacturers and clinical research organizations during our evaluation of options for an alternative Phase 3 clinical plan for FP187 in relapsing-remitting multiple sclerosis (RRMS). Research and development costs incurred in the third quarter of 2016 to conduct the ongoing interference case at the U.S. Patent and Trademark Office (USPTO) and opposition proceedings with the European Patent Office (EPO) were flat with the comparable period in 2015. Share-based compensation for the three month period ended September 30, 2016 was $1.6 million. We expect our use of contract manufacturers and clinical research organizations will likely return to historical levels in our further preparation for the start of our Phase 3 trial.  We expect our overall rate of research and development spending will increase in future quarters as our clinical and pharmaceutical development programs and patent office matters, including our pending interference action, advance.   

General and administrative costs for the three month periods ended September 30, 2016 and 2015 were $3.2 million and $4.6 million, respectively.  The decrease in expenses in the third quarter 2016 versus the prior year was principally due to a reduction in share-based compensation as well as lower legal, accounting and consulting fees.  In the third quarter 2016, share-based compensation decreased by $0.4 million versus the comparable period in 2015 to $1.7 million in connection with the vesting of equity awards issued during the years ended December 31, 2015 and 2014. We expect our rate of general and administrative spending could increase in the future in support of our expected increase in research and development related activities as well as the protection of our intellectual property portfolio including expenditures in connection with the lawsuits against Biogen in Europe.

Non-cash stock-based compensation expense included in total operating expenses was $3.3 million for the third quarter of 2016 versus $3.8 million for the third quarter of 2015.

Intellectual Property Update

We continue to advance our intellectual property portfolio.  As previously reported, on August 19, 2015, the USPTO re-declared the interference between Forward Pharma and a subsidiary of Biogen, Inc. regarding claims to the treatment of multiple sclerosis (MS), with a 480 mg daily dose of dimethyl fumarate (DMF), the active ingredient in Tecfidera®. The USPTO confirmed Forward Pharma as the senior party based on having an earlier benefit date of our U.S. Patent Application No. 11/576,871.  Biogen was deemed the junior party with respect to its U.S. Patent No. 8,399,514.  In August 2015, the parties filed priority statements and motions related to validity and benefit. The parties filed oppositions to motions on June 1, 2016.  Both parties filed replies to the oppositions on August 8, 2016.  The oral argument remains scheduled for November 30, 2016.  

Clinical Update

Our development plan for our lead drug, FP187, is focused primarily on the RRMS indication. In consultation with a clinical research organization, we are continuing to prepare for our Phase 3 trial in RRMS. In addition to the single beta interferon-controlled design, we are evaluating options for an alternative Phase 3 clinical strategy in RRMS, which could shorten our time to commercialization and/or reduce costs. We expect to complete these evaluations as we continue to upscale production of FP187 during 2016, in anticipation of beginning the Phase 3 trial in mid-2017.

We are currently performing additional Phase 1 studies on FP187.

Our nonclinical development plan for FP187 is designed to support regulatory submissions with a complete toxicology package.

 
Forward Pharma A/S
Condensed Consolidated Statement of Profit or Loss
(in thousands, except per share amounts)
       
   Three Months Ended
  September 30th
    2016       2015  
Research and development $ (7,658 )   $ (10,785 )
General and administrative   (3,176 )     (4,644 )
Total operating expenses    (10,834 )      (15,429 )
               
Foreign exchange (loss)   (430 )     (446 )
Other   80       117  
Net (loss) before taxes    (11,184 )      (15,758 )
               
Income tax benefit   204       0  
Net (loss) $ (10,980 )   $ (15,758 )
               
Net (loss) per share, basic and diluted $  (0.23 )   $  (0.34 )
               
Weighted average shares used to compute net (loss) per share basic and diluted   47,101       46,872  
       


Forward Pharma A/S
Reconciliation of net (loss) as reported to
non-generally accepted accounting principles (“GAAP”) net (loss)
(in thousands, except per share amounts)
       
   Three Months Ended
   September 30th
    2016       2015  
       
Net (loss) as reported $ (10,980 )   $ (15,758 )
Adjustments for non-cash items:      
Share-based compensation   3,259       3,775  
Foreign exchange loss   430       446  
       
Non-GAAP net (loss) $  (7,291 )   $  (11,537 )
Non-GAAP net (loss) per share, basic and diluted $  (0.15 )   $  (0.25 )
       
Weighted average shares used to compute non-GAAP net (loss) per share basic and diluted    47,101        46,872  
       

This press release uses a non-GAAP financial measure of net loss that is not calculated in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IASB"). The Company believes that the presentation of non-GAAP net loss is useful to investors because it excludes certain non-cash items that do not affect the Company’s liquidity, and foreign exchange rate changes are not within the control of the Company.  Non-cash items include: (i) share-based compensation expense and (ii) non-cash foreign exchange gains or (losses). However, there are limitations in the use of non-GAAP financial measures as they exclude certain income and expenses. Furthermore, the Company's non-GAAP financial measure may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented herein should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with IFRS.

 
Forward Pharma A/S
Condensed Consolidated Statement of Financial Position
(in thousands)
       
   September 30th    December 31st
    2016       2015  
Assets      
Cash, cash equivalents and marketable securities $ 150,174     $ 176,652  
Other assets   3,556       6,252  
Total assets $  153,730     $  182,904  
       
Equity and Liabilities      
Shareholders' equity $ 148,614     $ 176,693  
Liabilities   5,116       6,211  
Total equity and liabilities $  153,730     $  182,904  
               

Relevant Intellectual Property Sources: 

USPTO Interference with Biogen: The related documents are publicly available on the USPTO interference website at https://acts.uspto.gov/ifiling/PublicView.jsp, using interference number 106023.

Forward Pharma U.S. and European patents and patent applications can be found by using the following links: 
USPTO: http://www.uspto.gov/
USPTO Public Pair: http://portal.uspto.gov/pair/PublicPair
EPO: https://register.epo.org/regviewer

About Forward Pharma:
Forward Pharma A/S is a Danish biopharmaceutical company developing FP187, a proprietary formulation of DMF (dimethyl fumarate) for the treatment of inflammatory and neurological indications. Since our founding in 2005, we have worked to advance unique formulations of DMF, which is an immune modulator, as a therapeutic agent to improve the health and well-being of patients with immune disorders including multiple sclerosis. FP187, our clinical candidate, is a DMF formulation in a delayed and slow release oral dose.

Our principal executive offices are located at Østergade 24A, 1st Floor, 1100 Copenhagen K, Denmark, and our American Depositary Shares are publicly traded on NASDAQ Stock Market (FWP). For more information about the Company’s products and developments, please visit our web site at http://www.forward-pharma.com

Forward Pharma A/S Media Contact:
Sharon Klahre, Director, Investor Relations
Forward Pharma USA, LLC
7 Skyline Drive
Hawthorne, NY 10532
SK@forward-pharma.com
+1 914-752-3542

The Ruth Group
Lee Roth
lroth@theruthgroup.com
+1 646-536-7014

Forward Looking Statements:
Certain statements in this press release may constitute “forward-looking statements” of the Company within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements which contain language such as “believe,” “expect,” “anticipate,” “hope,” “would” and “potential.” Forward-looking statements are predictions only which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed in such statements. Many such risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, the following: the Company’s ability to obtain, maintain and defend issued patents with protective claims; the issuance and term of patents; the Company’s ability to prevail in or obtain a favorable decision in any patent interference or infringement action; the Company’s ability to recover damages in any patent infringement action; uncertainties relating to our development plans and activities, including the commencement of any clinical trial and the results, timing, cost and location thereof; risks and uncertainties related to the scope, validity and enforceability of our intellectual property rights in general and the impact on us of patents and other intellectual property rights of third parties; our ability to commercialize and generate revenue from our sole clinical candidate, FP187; clinical development, and clinical trials of FP187 may not be successful; completion of required clinical trials may take longer than we anticipate, which could result in increased costs, limit our access to funding and delay or limit our ability to obtain regulatory approval for FP187; and our evaluation of alternative Phase 3 clinical strategies in RRMS may not be successful or shorten our time to commercialization and/or reduce costs. These and other factors are identified and described in detail in certain of our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 20-F for the year ended December 31, 2015.

 

Forward Pharma A/S