Neothetics, Inc. (NASDAQ:NEOT) today provided a business update on its strategic initiatives and reported financial results for the third quarter 2016.
“We continue to make good progress towards moving LIPO-202 back into the clinic,” said Ms. Martha J. Demski, a member of Neothetics’ Operating Committee and Board of Directors. “We completed manufacturing of the modified formulation of LIPO-202 and are on track to initiate our Phase 2 proof of concept study of LIPO-202 for the reduction of submental fat in December 2016.”
Neothetics announced plans to prioritize its efforts and resources on the Phase 2 proof of concept study for the reduction of localized fat deposits under the chin (submental fat). The company plans to initiate this study in December 2016 with top line data expected in the second quarter of 2017. This Phase 2 proof of concept study will be a randomized, double –blind, placebo –controlled dose ranging trial designed to assess the safety, tolerability and efficacy of LIPO-202. Neothetics also plans to continue development for LIPO-202 for central abdominal bulging pending results from the Phase 2 proof of concept study in submental fat reduction.
“Our primary focus is on the development of LIPO-202 for submental fat reduction,” said Mr. Jeffrey Nugent, a member of Neothetics’ Operating Committee and Board of Directors. “There exists now an established regulatory pathway for injectable drugs for submental fat reduction and the submental fat reduction market is expected to be larger than the $2.5B U.S. toxin and filler market. Moreover, our recent commercial research suggests that LIPO-202 could have exceptional potential in this market.”
Based on its current plans, the company expects its cash and investments to fund operations into the first quarter, 2018.
Third Quarter and Nine Months Ended September 30, 2016 Financial Results
Research and development expenses for the third quarter of 2016 were approximately $1.0 million, compared to $15.2 million for the same quarter in 2015. Research and development expenses for the nine months ended September 30, 2016 were $5.7 million, compared to $27.4 million for the same period in 2015. The decrease in research and development expenses year over year is primarily due to the completion of the U.S. Phase 3 LIPO-202 AbCONTOUR1 and AbCONTOUR2 clinical trials and termination of the supplemental clinical trials to support an NDA filing. We anticipate that research and development expenses will increase when we initiate our Phase 2 proof of concept study for the reduction of localized fat deposits under the chin in December.
General and administrative expenses for the third quarter of 2016 were $0.9 million, compared to $1.8 million for the same quarter in 2015. Total general and administrative expenses for the nine months ended September 30, 2016 were $4.4 million, compared to $5.4 million for the same period in 2015. The decrease in general and administrative expenses year over year is primarily attributable to reduction in headcount and various legal, consulting and travel costs.
Net loss for the third quarter of 2016 was $2.4 million, or $0.17 basic and diluted net loss per share, compared to a net loss of $17.3 million, or $1.26 basic and diluted net loss per share, for the same period in 2015. For the nine months ended September 30, 2016, net loss was $11.0 million, or $0.80 basic and diluted net loss per share, compared to a net loss of $33.6 million, or $2.46 basic and diluted net loss per share for the nine months ended September 30, 2015.
Cash and cash equivalents were $14.4 million as of September 30, 2016 compared to $37.7 million as of December 31, 2015. In September, Neothetics repaid in full the remaining outstanding balance of $4M under its Loan and Security Agreement, or Loan Agreement, with Hercules Capital, Inc., in its capacity as administrative agent for itself and the other lenders pursuant to the Loan Agreement. Neothetics also paid $445,111 as payment in full of outstanding interest, the prepayment fee and final payment fees required under the Loan Agreement.
LIPO-202 is an injectable formulation of salmeterol xinafoate, a well-known long-acting ß2-adrenergic receptor agonist used in several FDA-approved drugs, including ADVAIR® for asthma. LIPO-202 is designed to be a locally-injected drug that causes localized shrinking of fat cells without any effect on nearby tissues. LIPO-202 activates ß2-adrenergic receptors on fat cells, triggering the metabolism of triglycerides stored in the fat cells, and thereby shrinking them across the treatment area.
About Neothetics, Inc.
Neothetics is a clinical-stage specialty pharmaceutical company focused on development and commercialization of therapeutics for the aesthetic market. Our current focus is on localized fat reduction and body contouring. Neothetics’ product candidate, LIPO-202, is a potential injectable treatment for undesirable, localized areas of fat that requires no pain management before or after treatment and no downtime without damage to nearby tissues. For more information on Neothetics, please visit www.neothetics.com. Neothetics, LIPO-202, LIPO-102 and the Neothetics logo are trademarks or registered trademarks of Neothetics, Inc. Other names and brands may be claimed as the property of others.