asns-8k_20181109.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 9, 2018

 

Arsanis, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

001-38295

 

27-3181608

(State or other jurisdiction
of incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

890 Winter Street, Suite 230
Waltham, Massachusetts

 

 

02451

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (781) 819-5704

 

Not applicable

(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 (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 November 9, 2018, Arsanis, Inc. (the “Company”) announced its financial results for the quarter ended September 30, 2018. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.  

 

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01.  Financial Statements and Exhibits.

 

(d)

Exhibits:

 

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

 

Exhibit No.

 

Description

99.1

 

Press Release issued by the Company on November 9, 2018

 


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

ARSANIS, INC.

 

 

 

Date: November 9, 2018

By:

/s/ René Russo

 

 

René Russo, PharmD

 

 

President and Chief Executive Officer

 

 

asns-ex991_14.htm

 

 

Exhibit 99.1

Arsanis Reports Financial Results for Third Quarter 2018

 

WALTHAM, Mass. and VIENNA, Austria – November 9, 2018 – Arsanis, Inc. (NASDAQ: ASNS), a clinical-stage biopharmaceutical company focused on applying monoclonal antibody (mAb) immunotherapies to address serious infectious diseases, today reported financial results for the third quarter ended September 30, 2018.

 

“Since the discontinuation of the ASN100 Phase 2 clinical trial, we have been working with our board of directors to consider strategic options that may potentially result in changes to our business strategy and future operations and we look forward to providing information on these efforts in the future,” said René Russo, President and Chief Executive Officer of Arsanis.

 

Dr. Russo continued, “During the third quarter, follow-up visits for all 154 patients who were enrolled in the ASN100 Phase 2 trial were completed and the trial database was locked. We are currently evaluating the complete dataset and we expect to complete the analysis in the fourth quarter of this year.”

 

Recent Key Business Developments

 

In September 2018, Arsanis nominated the lead development candidate for its ASN500 program. ASN500 targets respiratory syncytial virus (RSV), a virus that afflicts in aggregate over two million young children and elderly and immunocompromised patients annually in the United States and can cause serious respiratory tract infections.

 

In August 2018, Arsanis entered into a supplemental $1.1 million grant agreement with the Bill & Melinda Gates Foundation to conduct preclinical development activities for the ASN500 program that were not included in the original February 2017 grant agreement.  The Company recognized grant income of $1.1 million during the three and nine months ended September 30, 2018 under this August 2018 grant agreement.

 

In August 2018, Arsanis’ board of directors approved a reduction in workforce to reduce operating costs and better align the company’s workforce with the needs of its business following the discontinuation of ASN100 clinical development. The Company anticipates that it will substantially complete the implementation of the reduction in workforce by the end of the fourth quarter of 2018 and estimates that it will incur total expenses of approximately $2.8 million relating to the reduction in workforce, comprised of notice and employee severance and retention payments. Arsanis expects to record these charges during the fourth quarter of 2018 and first quarter of 2019.

 

Third Quarter 2018 Financial Results

 

For the third quarter ended September 30, 2018, Arsanis reported a net loss of $10.9 million, or $0.76 loss per share, as compared to a net loss of $11.6 million, or $22.60 loss per share for the third quarter of 2017.

 

Operating expenses for the third quarter of 2018 were $12.8 million, as compared to $13.1 million for the third quarter of 2017, and were comprised of the following:

 

Research and development expenses were $9.6 million for the third quarter of 2018, as compared to $10.6 million for the third quarter of 2017. The decrease of $1.0 million was primarily due to a decrease of $0.9 million in direct costs for Arsanis’ ASN100 program, a decrease of $0.1 million in direct costs for its ASN300 program, and a decrease of $0.2 million in direct costs for its ASN500 program, partially offset by an increase of $0.2 million in unallocated research and development expenses.

 

 

 


 

 

General and administrative expenses were $3.3 million for the third quarter of 2018, compared to $2.5 million for the third quarter of 2017. The increase of $0.8 million was primarily related to additional costs associated with operating as a public company, including increases of $0.9 million in personnel costs primarily due to an increase in headcount and employee compensation.

 

Other income, net was $1.9 million for the third quarter of 2018, compared to $1.5 million of other expense, net for the third quarter of 2017.

Year-to-Date 2018 Financial Results

 

For the nine months ended September 30, 2018, Arsanis reported a net loss of $33.7 million, or $2.35 loss per share, as compared to a net loss of $22.7 million, or $44.22 loss per share for the nine months ended September 30, 2017.

 

Operating expenses for the nine months ended September 30, 2018 were $36.4 million, as compared to $24.5 million for the nine months ended September 30, 2017, and were comprised of the following:

 

Research and development expenses were $26.6 million for the nine months ended September 30, 2018, compared to $18.9 million for the nine months ended September 30, 2017. The increase of $7.7 million was primarily due to an increase of $5.5 million in direct costs for Arsanis’ ASN100 program, an increase of $0.2 million in direct costs for its ASN500 program, and an increase of $2.3 million in unallocated research and development expenses.

General and administrative expenses were $9.8 million for the nine months ended September 30, 2018, compared to $5.6 million for the nine months ended September 30, 2017. The increase of $4.1 million was primarily related to additional costs associated with operating as a public company, including increases of $2.2 million in personnel costs primarily due to an increase in headcount and employee compensation, $0.3 million in Board of Directors fees, $0.5 million in insurance fees and $1.0 million in professional fees primarily due to legal and accounting costs associated with being a public company.

Other income, net was $2.8 million for the nine months ended September 30, 2018, compared to $1.8 million for the nine months ended September 30, 2017.

As of September 30, 2018, cash and cash equivalents totaled $40.8 million, with approximately 14.32 million shares of common stock outstanding.

 

About Arsanis

 

Arsanis, Inc. is a clinical-stage biopharmaceutical company focused on applying monoclonal antibody (mAb) immunotherapies to address serious infectious diseases. Arsanis possesses a deep understanding of the pathogenesis of infection, paired with access to what Arsanis believes to be some of the most advanced mAb discovery techniques and platforms available today.  Arsanis’ pipeline is comprised of mAbs targeting multiple serious bacterial and viral pathogens, including respiratory syncytial virus.

 

Arsanis is a U.S. company headquartered in Waltham, Massachusetts, with a wholly owned subsidiary that is primarily focused on discovery research in Vienna, Austria (Arsanis Biosciences GmbH).

 

For more information, please visit the Arsanis website at www.arsanis.com.


 

 


 

 

ARSANIS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

 

 

 

September 30, 2018

 

 

December 31, 2017

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

40,753

 

 

$

76,793

Restricted cash

 

 

594

 

 

 

355

Grant and incentive receivables

 

 

2,870

 

 

 

1,608

Property and equipment, net

 

 

323

 

 

 

421

Prepaid expenses and other assets

 

 

1,361

 

 

 

2,077

Total assets

 

$

45,901

 

 

$

81,254

Liabilities, and stockholders’ equity

 

 

 

 

 

 

 

Accounts payable, accrued expenses and other liabilities

 

$

5,224

 

 

 

7,681

Unearned income

 

 

2,045

 

 

 

2,630

Loans payable, net of discount

 

 

10,735

 

 

 

12,236

Total liabilities

 

 

18,004

 

 

 

22,547

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

27,897

 

 

 

58,707

Total liabilities and stockholders' equity

 

$

45,901

 

 

$

81,254

 

 

 


 

 

ARSANIS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

9,572

 

 

$

10,601

 

 

$

26,635

 

 

$

18,898

 

General and administrative

 

 

3,275

 

 

 

2,455

 

 

 

9,778

 

 

 

5,629

 

Total operating expenses

 

 

12,847

 

 

 

13,056

 

 

 

36,413

 

 

 

24,527

 

Loss from operations

 

 

(12,847

)

 

 

(13,056

)

 

 

(36,413

)

 

 

(24,527

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grant and incentive income

 

 

2,016

 

 

 

1,618

 

 

 

2,977

 

 

 

3,180

 

Interest expense

 

 

(259

)

 

 

(343

)

 

 

(785

)

 

 

(1,806

)

Interest income

 

 

196

 

 

 

90

 

 

 

637

 

 

 

90

 

Change in fair value of warrant liability

 

 

 

 

 

5

 

 

 

 

 

 

16

 

Change in fair value of derivative liability

 

 

 

 

 

 

 

 

 

 

 

762

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

(462

)

Other income (expense), net

 

 

(6

)

 

 

86

 

 

 

(79

)

 

 

57

 

Total other income (expense), net

 

 

1,947

 

 

 

1,456

 

 

 

2,750

 

 

 

1,837

 

Net loss

 

 

(10,900

)

 

 

(11,600

)

 

 

(33,663

)

 

 

(22,690

)

Accretion of redeemable convertible preferred stock to redemption value

 

 

 

 

 

(16

)

 

 

 

 

 

(36

)

Net loss attributable to common stockholders

 

$

(10,900

)

 

$

(11,616

)

 

$

(33,663

)

 

$

(22,726

)

Net loss per share attributable to common stockholders—basic and diluted

 

$

(0.76

)

 

$

(22.60

)

 

$

(2.35

)

 

$

(44.22

)

Weighted average common shares outstanding—basic and diluted

 

 

14,315,410

 

 

 

513,900

 

 

 

14,304,721

 

 

 

513,900

 

 


 

 


 

 

Cautionary note regarding forward-looking statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties, including statements regarding the development status of our programs; the timing and conduct of our analysis of the cumulative unblinded data from the Phase 2 clinical trial of ASN100; our plans regarding our ASN500 program; our plan to consider [and potentially provide additional information in the future regarding] strategic options that may result in changes to our business strategy and future operations; our collaborations with third parties; expectations regarding the costs associated with our reduction on force; and the sufficiency of our cash and cash equivalents to fund our planned operations. All statements, other than statements of historical facts, contained in this press release, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.  We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make as a result of important factors, including, but not limited to: our ability to successfully execute on our reduction in force, business plans and strategies; our ability to successfully identify and pursue alternative strategic options; uncertainties inherent in drug development, including the availability and timing of data from preclinical and clinical trials; the content and timing of decisions made by the U.S. Food and Drug Administration and other regulatory authorities and investigational review boards at clinical trial sites; our  ability to obtain and maintain requisite regulatory approvals and to enroll patients in clinical trials; competitive factors; our ability to obtain, maintain and enforce patent and other intellectual property protection for any product candidates we may seek to develop; our ability to maintain  strategic collaborations, licenses and funding arrangements; the availability of cash resources and our need for additional financing; and  other  important risk factors as set forth in filings that we periodically make with the U.S. Securities Exchange Commission, or SEC.  The forward-looking statements contained in this press release reflect the current views of Arsanis, Inc. with respect to future events, and we assume no obligation to update any forward-looking statements except as required by applicable law. 

 

 

 

 

###

Media Contact:

W2O Group
Elliot Fox, 212-257-6724

efox@purecommunications.com

 

Investor Contact:

Michael Gray, 781-819-5201

Chief Operating and Chief Financial Officer

mike.gray@arsanis.com