UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2022
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(Exact Name of Registrant as Specified in its Charter)
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| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code: (781 ) 996-0955
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 4, 2022, the Company issued a press release (the “Press Release”) announcing its preliminary financial results for the quarter ended March 31, 2022. The Press Release is attached hereto as Exhibit 99.1.
The preliminary financial results are estimates and subject to completion of the applicable quarter-end closing procedures. The Company’s actual results for the quarter ended March 31, 2022 may vary from these estimates. In addition, estimated financial information is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the estimated financial results described in the Press Release will not materialize or will vary significantly from actual results. Accordingly, undue reliance should not be placed on these estimates.
The information in Exhibit 99.1 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 104 | The cover page on this Current Report on Form 8-K, formatted in Inline XBRL | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MORPHIC HOLDING, INC. | ||||||||
| Date: May 4, 2022 | By: | /s/ Marc Schegerin | ||||||
| Marc Schegerin, M.D. | ||||||||
| Chief Financial Officer and Chief Operating Officer | ||||||||
Exhibit 99.1
Morphic Announces Corporate Highlights and Financial Results for the First Quarter 2022
Initiated EMERALD-1 phase 2a trial of MORF-057 in patients with ulcerative colitis
Described new understanding of α4β7-expressing immune cells and MORF-057 dose response in oral presentation at ECCO 2022
Announced key appointments and advancements in leadership team
Ended first quarter 2022 with $381 million in cash and equivalents, providing runway through year-end 2024
WALTHAM, Mass. – May 4, 2022 – Morphic Therapeutic (Nasdaq: MORF), ), a biopharmaceutical company developing a new generation of oral integrin therapies for the treatment of serious chronic diseases, today reported corporate highlights and financial results for the first quarter of 2022.
First Quarter 2022 and Recent Corporate Highlights
•Launched EMERALD-1 (MORF-057-201) phase 2a study
◦EMERALD-1 is an open-label multi-center study of MORF-057 enrolling up to 35 patients with moderate to severely active ulcerative colitis (UC) who will be treated with 100 mg BID (twice daily)
◦EMERALD-2 (MORF-057-202), a global phase 2b double-blind randomized placebo-controlled trial of MORF-057, is expected to begin in the third quarter of 2022 and then run in parallel with EMERALD-1
•Presented new preclinical data at ECCO 2022 expanding understanding of α4β7-expressing immune cells and further describing MORF-057 dose-response
◦Data from multiple preclinical studies in animals strongly correlated with human trials and demonstrate clear MORF-057 dose-response
◦Results also show changes in lymphocyte populations and CCR9 transcripts consistent with α4β7 inhibition mechanism of action
•Announced several key leadership appointments
◦Dr. Brihad Abhyankar, MS, FRCS, FFPM was appointed Vice President, Clinical Development and will lead the EMERALD-1 and EMERALD-2 phase 2 trials of MORF-057 in UC
▪Dr. Abhyankar has directly relevant experience to the MORF-057 development program after serving as executive medical director of clinical science at Takeda, where he directed strategy for global clinical development and played a key role in the development, approval, and the life cycle management of ENTYVIO® or vedolizumab
▪Dr. Abhyankar has over 20 years of biopharmaceutical industry experience and 10 years of training and practice in surgery and medicine
◦Aaron Pelta was promoted to Senior Vice President, Business and Corporate Development
▪Mr. Pelta previously served as Morphic’s Vice President of Businesses Development and leads partnering, commercial planning and portfolio strategy
▪Mr. Pelta has 20 years of biopharmaceutical business experience including leadership roles at Arsanis, Shire and Cubist Pharmaceuticals
•Focused the Company’s research and development collaboration efforts with AbbVie and Janssen on higher-potential integrin targets in multiple undisclosed therapeutic areas
•Thanked Nilesh Kumar, Ph.D., for his contributions as a member of the Morphic Board of Director upon his departure after five years of leadership and collaboration
“Morphic made the most significant clinical advance in our Company’s history with the launch of the EMERALD phase 2a study of MORF-057 in UC during the first quarter of 2022,” commented Praveen Tipirneni, MD, President and Chief Executive Officer of Morphic Therapeutic. “In addition, we bolstered the Morphic team with the addition
of Brihad Abhyankar, a proven leader in the GI development arena an expert in α4β7 for the treatment of UC. We will continue to make important progress in the MORF-057 development program with the launch of the EMERALD-2 global randomized controlled phase 2b study in the coming months.”
Financial Results for the First Quarter 2022
•Net loss for the quarter ended March 31, 2022 was $31.5 million or $0.85 per share compared to a net loss of $21.3 million or $0.63 per share for the same quarter last year
•Revenue was $2.4 million for the quarter ended March 31, 2022, compared to $3.3 million for the same quarter last year.
•Research and development expenses were $26.5 million for the quarter ended March 31, 2022, as compared to $18.6 million for the same quarter last year. The increase was primarily attributable to higher manufacturing and development costs along with higher pre-clinical and phase 2 clinical trial costs to support our lead product candidate MORF-057
•General and administrative expenses were $7.6 million for the quarter ended March 31, 2022, compared to $6.0 million for the same quarter last year. The increase was due to increased non-cash stock-based compensation expense and higher payroll costs.
As of March 31, 2022, Morphic had cash, cash equivalents and marketable securities of $380.7 million, compared to $408.1 million as of December 31, 2021. The Morphic believes its cash, cash equivalents and marketable securities as of March 31, 2022, will be sufficient to fund operating expenses and capital expenditure requirements through year-end 2024.
About Morphic Therapeutic
Morphic Therapeutic is a biopharmaceutical company developing a new generation of oral integrin therapies for the treatment of serious chronic diseases, including autoimmune, cardiovascular, and metabolic diseases, fibrosis, and cancer. In collaboration with AbbVie, Janssen, and Schrödinger, Morphic is advancing its pipeline and discovery activities using its proprietary MInT technology platform which leverages the Company’s unique understanding of integrin structure and biology. For more information, visit www.morphictx.com.
ENTYVIO is a trademark of Millennium Pharmaceuticals, Inc.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking” statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to: the MInT Platform’s ability to discover drug candidates, Morphic’s plans to develop and commercialize oral small-molecule integrin therapeutics and any proposed timing thereof, the initiation, execution and completion of MORF-057 phase 2 clinical trials, any expectations about safety, efficacy, timing and ability to commence or complete clinical studies and/or trials and to obtain regulatory approvals for MORF-057 and other candidates in development, the timing of further data presentation and the ability of MORF-057 to treat inflammatory bowel disease, including ulcerative colitis, or related indications. Statements including words such as “believe,” “plan,” “continue,” “expect,” “will be,” “develop,” “signal,” “potential,” “anticipate” or “ongoing” and statements in the future tense are forward-looking statements. These forward-looking statements involve risks and uncertainties, as well as assumptions, which, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause Morphic’s actual activities or results to differ significantly from those expressed in any forward-looking statement, including risks and uncertainties in this press release and other risks set forth in our filings with the Securities and Exchange Commission, including Morphic’s or a partner’s ability to complete a current or future clinical trial of any of our current or future product candidates, develop or obtain regulatory approval for or commercialize any product candidate, Morphic’s ability to protect intellectual property, the potential impact of the COVID-19 pandemic, and the sufficiency of our cash, cash equivalents and investments to fund our operations. These forward-looking statements speak only as of the date hereof and Morphic specifically disclaims any obligation to update these forward-looking statements or reasons why actual results might differ, whether as a result of new information, future events or otherwise, except as required by law.
-Financial Tables to Follow-
Morphic Holding, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Collaboration revenue | $ | 2,382 | $ | 3,265 | |||||||
| Operating expenses: | |||||||||||
| Research and development | 26,463 | 18,613 | |||||||||
| General and administrative | 7,591 | 5,953 | |||||||||
| Total operating expenses | 34,054 | 24,566 | |||||||||
| Loss from operations | (31,672) | (21,301) | |||||||||
| Other income: | |||||||||||
| Interest income, net | 187 | 29 | |||||||||
| Other income (expense), net | 1 | (12) | |||||||||
| Total other income, net | 188 | 17 | |||||||||
| Loss before provision for income taxes | (31,484) | (21,284) | |||||||||
| Provision for income taxes | — | — | |||||||||
| Net loss | $ | (31,484) | $ | (21,284) | |||||||
| Net loss per share, basic and diluted | $ | (0.85) | $ | (0.63) | |||||||
| Weighted average common shares outstanding, basic and diluted | 37,133,412 | 33,532,405 | |||||||||
Morphic Holding, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
| March 31, 2022 | December 31, 2021 | ||||||||||
| Assets | |||||||||||
| Cash, cash equivalents and marketable securities | $ | 380,652 | $ | 408,135 | |||||||
| Other current assets | 8,842 | 10,199 | |||||||||
| Total current assets | 389,494 | 418,334 | |||||||||
| Other assets | 7,579 | 7,956 | |||||||||
| Total assets | $ | 397,073 | $ | 426,290 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities | $ | 43,792 | $ | 38,264 | |||||||
| Long-term liabilities | 39,913 | 51,327 | |||||||||
| Total liabilities | 83,705 | 89,591 | |||||||||
| Total stockholders' equity | 313,368 | 336,699 | |||||||||
| Total liabilities and stockholders' equity | $ | 397,073 | $ | 426,290 | |||||||
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Contacts
Morphic Therapeutic
Chris Erdman
chris.erdman@morphictx.com
617.686.1718