|CEO Millind Deshpande, "focused on ..Factor D portfoilio."||Joseph Truitt named as Chief Operating Office|
NEW HAVEN: Achillion Pharmaceuticals, Inc. [NASDAQ:ACHN} is reducing its workforce to 70 a decrease of 20% in what it is calling an “operational restructuring plan that aims to focus the organization on advancing Achillion’s existing clinical and late-stage preclinical factor D inhibitors and reduce expenses to maintain its strong balance sheet.”
The plan is hoped to deliver “approximately $10 million of savings in 2018 over 2017 expense levels.
In addition, the Company announced that Joseph Truitt has been promoted to President and Chief Operating Officer, continuing to report to Chief Executive Officer, Milind Deshpande, Ph.D.
Dr. Deshpande said, “we are focused on executing against our 2018 strategic objectives with the goal of delivering transformative therapies to patients. We believe the operational expertise that Joe brings to his new role will strengthen our capabilities to achieve those objectives. While it is difficult to undertake a restructuring, we believe through efficient use of our capital, we will have the potential to build significant value in our Factor D inhibitor portfolio.”
Mr. Truitt said, “at Achillion, we have established ourselves as a leader in complement alternative pathway (AP) research, drug development and intellectual property with the depth and breadth of our patent portfolio. Our lead compound, ACH-4471, is in phase 2 studies in both C3 glomerulopathy (C3G) and paroxysmal nocturnal hemoglobinuria (PNH) and I look forward to delivering on our goal of additional clinical data in these indications in 2018.
Truitt added, “I am particularly enthusiastic about our work in C3G where our market research has shed light on the underserved needs of these patients who have a debilitating disease that is believe fourth quarter and year end results for the company.
The year held a major disappointment for the company as it saw Johnson and Johnson's, Janssen Pharmaceuticals unit drops its partnership with the company and its Hepatitis C drug, citing marketing issues in spite of good clinical response for the drug. The portfolio rights have been returned to Achillion but no new marketing or partnership developments have been announced or appear to be on the horizon
Fourth Quarter 2017 Financial Results
The restructuring was announced in conjunction with fourth quarter and yearly financial results. For the three months ended December 31, 2017, the Company reported a net loss of $23.2 million, compared to a net loss of $4.4 million in the three months ended December 31, 2016. During the three months ended December 31, 2017, the Company did not recognize any revenue compared to the three months ended December 31, 2016 in which it recognized $15.0 million of revenue under the Janssen Agreement that was terminated effective November 8, 2017.
Research and development expenses were $15.7 million in the fourth quarter of 2017, compared to $15.0 million for the same period of 2016. The increase was primarily due to increased clinical trial expenses for ACH-4471 and manufacturing and formulation expenses for ACH-5228.
For the three months ended December 31, 2017, general and administrative expenses totaled $8.7 million, compared to $5.3 million in the same period in 2016. The increase was primarily the result of the Company’s payment of the underwriting fees in connection with the public resale by the Johnson and Johnson Development Corporation in November 2017 of all the shares of common stock it acquired from the Company in 2015.
Year-end 2017 Financial Results
For the year ended December 31, 2017, the Company's net loss was $85.2 million, or $0.62 per share, compared to a net loss of $61.7 million for the year ended December 31, 2016, or $0.45 per share. During the year ended December 31, 2017, Achillion did not recognize any revenue compared to the year ended December 31, 2016 in which Achillion recognized $15.0 million of revenue under the Janssen Agreement that was terminated effective November 8, 2017.
For the year ended December 31, 2017, research and development expenses totaled $65.1 million, compared to $59.2 million for the year ended December 31, 2016. The increase primarily related to clinical trial costs for ACH-4471 combined with increased preclinical and manufacturing costs for ACH-5228. Discovery research costs related to our next-generation factor D inhibitors also increased, and were partially offset by decreased preclinical and manufacturing costs for ACH-4471.