AKTX — Akari Therapeutics, Plc

Summary of Akari Therapeutics Q4 2017 Earnings Call

1. Key Financial Results and Metrics

• Q4 2017 Financials:
  • Research and Development (R&D) expenses: $7.1 million (up from $6.6 million in Q4 2016).
  • General and Administrative (G&A) expenses: $3.7 million (up from $3.3 million in Q4 2016).
  • Net loss: $9.3 million (compared to $8.3 million in Q4 2016).
  • Basic and diluted net loss per share: $0.01 (unchanged from Q4 2016).
• Full Year 2017 Financials:
  • R&D expenses: $23.3 million (up from $17.3 million in 2016).
  • G&A expenses: $11.7 million (up from $9.9 million in 2016).
  • Net loss: $32.6 million (up from $18.1 million in 2016).
  • Basic and diluted loss per share: $0.03 (up from $0.02 in 2016).
• Cash Position: As of December 31, 2017, cash and cash equivalents were $28.1 million, down from $44.1 million in 2016. The company expects this cash to fund operations into Q2 2019.

2. Strategic Updates and Business Highlights

• Clinical Development:
  • Progress on Coversin, with regulatory clearance to open the first clinical site in Europe for the Phase 3 PNH trial (CAPSTONE).
  • Successful completion of Phase 2 trial (COBALT) for Coversin in PNH, meeting primary endpoints.
  • Initiated Phase 2 study of Coversin in Atypical Hemolytic Uremic Syndrome (aHUS).
  • Plans to initiate Phase 2 studies for Coversin in Atopic Keratoconjunctivitis (AKC) and Bullous Pemphigoid in H1 2018.
• Leadership Expansion: Strengthened leadership team with new board members from Johnson & Johnson.

3. Forward Guidance and Outlook

• CAPSTONE Trial: Expected to begin in Q1 2018, targeting naïve PNH patients, with a design agreed upon with the FDA.
• Future Financing: Management indicated plans for additional financing to support the completion of CAPSTONE, as current cash may not be sufficient for the entire trial duration.
• Long-Acting Formulation: Plans to advance Coversin long-acting formulation towards Phase 1 trials.

4. Bad News, Challenges, or Points of Concern

• Financial Losses: Significant increase in net losses year-over-year due to rising R&D and G&A expenses.
• Cash Burn Rate: Utilized $31.6 million in cash for operations in 2017, raising concerns about the sustainability of current cash reserves.
• Compliance Issues: Potential compliance challenges noted in self-administration of Coversin, which could affect trial outcomes and patient management.
• Competitive Landscape: Concerns regarding competition from Alexion's Soliris and emerging therapies like 1210, which could impact market share and pricing strategies.

5. Notable Q&A Insights

• Cash Sufficiency: Management confirmed that while current cash is enough to initiate CAPSTONE, additional financing will be necessary to complete the trial.
• Patient Enrollment: Identified patients for CAPSTONE are ready to enroll, with a smaller patient base than previous studies, which may facilitate quicker recruitment.
• LDH Trends: Discussion on LDH levels in the COBALT study highlighted potential compliance issues with self-injection, indicating a need for active monitoring and support programs.
• Market Positioning: Management emphasized Coversin's subcutaneous administration as a key differentiator from IV therapies, which may enhance patient convenience and control.

This summary encapsulates the key points from the earnings call, providing a clear overview of Akari Therapeutics' financial performance, strategic direction, and challenges ahead.