On March 16, 2020 Arvinas, Inc. (Nasdaq: ARVN), a clinical-stage biotechnology company creating a new class of drugs based on targeted protein degradation, reported financial results for the fourth quarter and full year ended December 31, 2019 and provided a corporate update (Press release, Arvinas, MAR 16, 2020, View Source [SID1234555594]).

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"2019 was an exciting year for Arvinas, marked by tremendous clinical and corporate progress. We were delighted to present the first human clinical data from targeted protein degraders along with preclinical data demonstrating the brain-penetrating potential of our PROTAC protein degraders. These data underscore the potential of our platform to create safe and well-tolerated drugs for the treatment of a variety of life-threatening diseases," said John Houston, Ph.D., Chief Executive Officer of Arvinas.

Business Highlights and Recent Developments

Presented initial clinical safety and pharmacokinetic data for ARV-110 (as a treatment for men with metastatic castration-resistant prostate cancer) and ARV-471 (as a therapy for patients with locally advanced or metastatic ER+/HER2- breast cancer). These data showed that ARV-110 and ARV-471 were well-tolerated and safe for further development at the doses disclosed in October 2019. Further, both PROTAC protein degraders reached exposure levels in human patients that were correlated with tumor inhibition oral regression in preclinical models.

Closed an underwritten public offering of 5,227,273 shares of common stock at a public offering price of $22.00 per share, including the exercise in full by the underwriters of their option to purchase additional shares of common stock. Arvinas received net proceeds of approximately $107.6 million, after deducting underwriting discounts and commissions and offering expenses.

Presented preclinical data demonstrating that oligomer-specific PROTAC molecules degraded aggregates of human alpha-synuclein in primary rat neurons.

Announced the appointment of Laurie Smaldone Alsup, M.D., to Arvinas’ board of directors. Dr. Smaldone Alsup currently serves as Chief Scientific Officer and Chief Medical Officer for NDA Group. She brings experience leading commercially successful product approvals and global regulatory strategies that have successfully advanced programs through all stages of clinical development.

Anticipated Milestones and Expectations

For the ARV-110 program, Arvinas expects to share Phase 1 dose escalation clinical data in the second quarter of 2020.

For the ARV-471 program, Arvinas expects to share Phase 1 dose escalation clinical data in the second half of 2020.

In the second half of 2020, Arvinas expects to provide information about the advancement of additional programs in its robust preclinical pipeline.

Financial Guidance

Based on its current operating plan, Arvinas expects its cash, cash equivalents, and marketable securities will be sufficient to fund its planned operating expenses and capital expenditures into 2022.

Full Year and Fourth Quarter Financial Results

Cash, Cash Equivalents and Marketable Securities Position: As of December 31, 2019, cash, cash equivalents and marketable securities were $280.9 million as compared with $187.8 million as of December 31, 2018. The increase primarily related to net proceeds from a public offering of common stock of $107.6 million, aggregate proceeds of $51.5 million from a collaboration and license agreement with Bayer and the issuance of common stock to Bayer and collaborator milestone and other payments of $7.8 million, partially offset by cash used to fund operations of approximately $67.6 million and cash used to purchase fixed assets and leasehold improvements of $6.2 million. Cash, cash equivalents, and marketable securities increased by $90.4 million in the fourth quarter of 2019. This increase primarily related to net proceeds from a public offering of common stock of $107.6 million and collaborator milestone and other payments of $2.2 million, partially offset by cash used to fund operations of approximately $17.6 million and cash used to purchase fixed assets and leasehold improvements of $1.8 million.

Research and Development Expenses: Research and development expenses were $67.2 million and $20.4 million for the year and quarter ended December 31, 2019, respectively as compared with $45.2 million and $14.6 million for the year and quarter ended December 31, 2018, respectively. The increase in research and development expenses for the year and quarter primarily related to Arvinas’ continued investment in its platform, exploratory and lead optimization programs and its estrogen receptor (ER) and androgen receptor (AR) clinical development programs.

General and Administrative Expenses: General and administrative expenses were $27.3 million and $7.3 million for the year and quarter ended December 31, 2019, respectively, as compared with $12.9 million and $5.8 million for the year and quarter ended December 31, 2018, respectively. The increase in general and administrative expenses for the year and quarter primarily related to increasing infrastructure costs and being a public company for a full year in 2019.

Revenues: Revenue was $43.0 million and $4.9 million for the year and quarter ended December 31, 2019, respectively, as compared with $14.3 million and $3.4 million for the year and quarter ended December 31, 2018, respectively. Revenue for the year ended December 31, 2019 included $24.7 million of revenue recognized from the Arvinas contribution of the license to the joint venture between Bayer and Arvinas to pursue the PROTAC technology in agricultural applications (the Joint Venture). The remaining revenue of $18.3 million and revenue of $4.9 million for the year and quarter ended December 31, 2019, respectively, was generated from the license and rights to technology fees and research and development activities related to the collaboration and license agreement with Bayer that was initiated in July 2019, the collaboration and license agreement with Pfizer that was initiated in January 2018, and the amended and restated option, license and collaboration agreement with Genentech that was initiated in November 2017.

Loss from Equity Method Investment: Loss from equity method investment for the year ended December 31, 2019 was $24.7 million, which related to the loss from the equity method investment in the Joint Venture. The loss was generated from the Joint Venture’s expensing the values associated with the contributed intellectual property from the Joint Venture partners.

Net Loss: Net loss was $70.3 million and $21.0 million for the year and quarter ended December 31, 2019, respectively, as compared with $41.5 million and $16.1 million for the year and quarter ended December 31, 2018, respectively. The increase in net loss for the year and quarter primarily related to Arvinas’ continued investment in its platform, exploratory and lead optimization programs, its ER program, its AR program and increase in general and administrative infrastructure costs related to the first full year as a public company offset by an increase in revenue primarily related to the Bayer collaboration that was initiated in July 2019.

About ARV-110

ARV-110 is an orally bioavailable PROTAC protein degrader designed to selectively target and degrade the androgen receptor (AR). ARV-110 is being developed as a potential treatment for men with metastatic castration-resistant prostate cancer (mCRPC). Arvinas’ Phase 1 trial of ARV-110 will assess its safety, tolerability, and pharmacokinetics, and will also include measures of anti-tumor activity and pharmacodynamic readouts as secondary endpoints.

ARV-110 has demonstrated activity in preclinical models of AR mutation or overexpression, both common mechanisms of resistance to currently available AR-targeted therapies.

About ARV-471

ARV-471 is an orally bioavailable PROTAC protein degrader designed to specifically target and degrade the estrogen receptor (ER) for the treatment of women with metastatic ER+/HER2- breast cancer. Arvinas’ Phase 1 trial of ARV-471 will assess its safety, tolerability, and pharmacokinetics, and will also include measures of anti-tumor activity and pharmacodynamic readouts as secondary endpoints. In preclinical studies, ARV-471 demonstrated near-complete ER degradation in tumor cells, induced robust tumor shrinkage when dosed as a single agent in multiple ER-driven xenograft models, and showed superior anti-tumor activity when compared to a standard of care agent, fulvestrant, both as a single agent and in combination with a CDK4/6 inhibitor.