AMBRIDGE, Mass.--(BUSINESS WIRE)--Axcella (Nasdaq: AXLA), a clinical-stage biotechnology company pioneering a new approach to treat complex diseases and improve health using endogenous metabolic modulator (EMM) compositions, today announced financial results for the third quarter ended September 30, 2020 and provided a business update.

“Recent accomplishments serve as further validation of the strength of Axcella’s execution amid the COVID-19 pandemic as well as its clinical and regulatory approach,” said Bill Hinshaw, President and Chief Executive Officer of Axcella. “We are pleased to report that we recently completed a successful Type B pre-IND meeting with the U.S. Food and Drug Administration (FDA) that enabled us to affirm our plans to submit an Investigational New Drug (IND) application and initiate a Phase 2b biopsy clinical trial of AXA1125, our product candidate for nonalcoholic steatohepatitis (NASH). We also presented positive top-line data in the third quarter for AXA1665, our product candidate for the reduction in risk of overt hepatic encephalopathy (OHE) recurrence. Having already completed our pre-IND FDA engagement for AXA1665, preparations for its IND submission and Phase 2 clinical trial are now underway.”

“Just three years ago, Axcella finalized the designs of these differentiated, multi-targeted product candidates, and we now are prepared to enter later-stage clinical trials. Better still, we have compiled far more human data than would normally be expected at this stage of development, which we believe increases the probability of success in our next phase of development as we seek to make a difference for patients,” Mr. Hinshaw continued. “With key catalysts for AXA1125 and AXA1665 as well as our decision regarding enrollment expansion for our AXA4010-001 clinical study on the near-term horizon, our excitement continues to build.”

Recent Accomplishments and Next Steps

AXA1125

• Completed Successful Type B Meeting: Axcella recently participated in a Type B pre-IND meeting with the FDA regarding AXA1125, focusing on key elements of the company’s development strategy. This engagement enables Axcella to proceed with its IND submission and Phase 2b clinical trial design as planned.
• Planned Phase 2b Clinical Trial: Axcella plans to submit an IND for AXA1125 and proceed directly into a 48-week Phase 2b serial biopsy clinical trial enrolling adult patients with NASH, with a primary endpoint based on liver histology. This trial is expected to be initiated in the first half of 2021.
• Presented Late-Breaker at EASL for AXA1125: A late-breaker poster containing key findings from Axcella’s AXA1125-003 clinical study was presented at the EASL Digital International Liver Congress by Stephen A. Harrison, M.D., Medical Director of Pinnacle Clinical Research in San Antonio, TX and visiting professor of Hepatology at the University of Oxford, UK.
• Planned Presentations at AASLD: Posters regarding AXA1125-003 will be presented at The Liver Meeting® 2020, the Annual Meeting of the American Association for the Study of Liver Diseases (AASLD), which is taking place virtually November 13-16, 2020.

AXA1665

• Reported Positive Top-Line Data: Axcella reported top-line data from AXA1665-002, a 12-week clinical study assessing the impact of AXA1665 on safety, tolerability and physiology in subjects with mild and moderate hepatic insufficiency. Results from the study showed that AXA1665 was generally well-tolerated, with dose dependent changes noted across measures of amino acid metabolism and neurocognition. These included statistically significant (p <0.05) improvements in the Fischer Ratio and the psychometric hepatic encephalopathy score (PHES) in the AXA1665 high dose arm vs. placebo. Additionally, clinically relevant trends were seen in certain measures of nitrogen/ammonia handling and physical function in the AXA1665 arms versus placebo.
• Planned Phase 2 Clinical Trial Initiation: Axcella plans to submit an IND for AXA1665 and proceed directly into a 24-week Phase 2 clinical trial enrolling subjects with liver cirrhosis who have experienced at least one prior OHE event. This trial is expected to be initiated in the first half of 2021.
• Published Findings from Initial Investigation of AXA1665: Clinical and Translational Gastroenterology published a peer-reviewed report detailing results from Axcella’s AXA1665-001 clinical study, the initial clinical investigation of AXA1665’s effect on safety, tolerability, and clinically relevant biomarkers related to hepatic and muscle metabolism and function.

AXA4010

• Planned Enrollment Decision for AXA4010-001: Following Axcella’s receipt of Cohort 1 data in December 2020 from the ongoing AXA4010-001 clinical study, the company expects to communicate its decision about whether to enroll additional subjects with sickle cell disease in the study by early 2021.

EMM Platform

• Published Manuscript Elucidating the Therapeutic Potential of EMMs:iScience published a peer-reviewed manuscript entitled “Endogenous Metabolic Modulators: Emerging Therapeutic Potential of Amino Acids” that detailed clinical precedents for EMMs as therapeutics and discussed the potential to develop EMM compositions that simultaneously target multiple biological pathways to address unmet needs in a range of complex diseases.

Financial Results

Cash Position: As of September 30, 2020, cash, cash equivalents and marketable securities totaled $117.3 million, compared to $92.1 million as of December 31, 2019. The increase is primarily the result of net proceeds from the company’s follow-on stock offering that was completed in May 2020.

R&D Expenses: Research and development expenses for the quarter and nine months ended September 30, 2020 were $7.5 million and $26.4 million, respectively. Research and development expenses for the same periods ended September 30, 2019 were $12.2 million and $29.1 million. The decrease for the three and nine months ended September 30, 2020 is primarily due to the completion of the company’s AXA1125-003 and AXA1665-002 clinical studies.

G&A Expenses: General and administrative expenses for the quarter and nine months ended September 30, 2020 were $4.2 million and $12.9 million, respectively. General and administrative expenses for the same periods ended September 30, 2019 were $4.8 million and $13.0 million.

Net Loss: Net loss for the quarter and nine months ended September 30, 2020 was $12.4 million, or $0.34 per basic and diluted share, and $41.3 million, or $1.39 per basic and diluted share, respectively. This compares with a net loss of $17.3 million, or $0.75 per basic and diluted share, and $43.3 million, or $3.01 per basic and diluted share, for the quarter and nine months ended September 30, 2019. Included in the net loss for the quarter and the nine months ended September 30, 2020 was $1.4 million and $4.9 million, respectively, of non-cash expense related to stock-based compensation, as compared to $1.7 million and $4.3 million, respectively, for the same periods in 2019.

About Endogenous Metabolic Modulators (EMMs)

EMMs are a broad family of molecules, including amino acids, that regulate human metabolism. Axcella is developing a range of novel product candidates that are comprised of multiple EMMs engineered in distinct combinations and ratios to simultaneously impact multiple metabolic pathways to modify the root causes of various complex diseases and improve health.

About Axcella’s Clinical Studies

Each of the company’s clinical studies to date are or have been conducted as non-investigational new drug application (IND) clinical studies under U.S. Food and Drug Administration regulations and guidance supporting research with food. These studies evaluate product candidates for safety, tolerability and effects on the normal structures and functions in humans, including in individuals with disease. They are not designed or intended to evaluate a product candidate’s ability to diagnose, cure, mitigate, treat or prevent a disease. If Axcella decides to further develop a product candidate as a potential therapeutic, as is the case with AXA1665 and AXA1125, any subsequent clinical studies will be conducted under an IND.

Internet Posting of Information

Axcella uses its website, www.axcellahealth.com, as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD. Such disclosures will be included on the company’s website in the “Investors and News” section. Accordingly, investors should monitor this portion of the company’s website, in addition to following its press releases, SEC filings and public conference calls and webcasts.

About Axcella

Axcella is a clinical-stage biotechnology company pioneering a new approach to treat complex diseases and improve health using endogenous metabolic modulator (EMM) compositions. The company’s product candidates are comprised of EMMs and their derivatives that are engineered in distinct combinations and ratios to simultaneously impact multiple biological pathways. Axcella’s pipeline includes lead therapeutic candidates for non-alcoholic steatohepatitis (NASH) and the reduction in risk of overt hepatic encephalopathy (OHE) recurrence. Additional muscle- and blood-related programs are in earlier-stage development. For more information, please visit www.axcellahealth.com.