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 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 COBALT trial for Coversin in PNH, meeting primary endpoints.
  • Initiation of a Phase 2 trial for Coversin in Atypical Hemolytic Uremic Syndrome (aHUS).
  • Plans to begin Phase 2 studies for Coversin in Atopic Keratoconjunctivitis (AKC) and Bullous Pemphigoid in H1 2018.
• Leadership Expansion: Strengthened leadership team with new board members, including Mike Grissinger from Johnson & Johnson.

3. Forward Guidance and Outlook

• CAPSTONE Trial: Expected to start in Q1 2018 with a focus on naïve patients. The trial design has been agreed upon with the FDA.
• Funding Strategy: While the current cash position is sufficient to initiate CAPSTONE, additional financing will be necessary to complete the trial.
• Long-Acting Formulation: Plans to advance Coversin LA (long-acting) towards Phase 1 trials.

4. Bad News, Challenges, or Points of Concern

• Increased Losses: Significant year-over-year increase in net loss, primarily due to rising R&D and G&A expenses.
• Cash Burn: Utilized $31.6 million in cash for operations in 2017, raising concerns about financial sustainability without additional funding.
• Market Competition: Potential competition from emerging therapies like Alexion's 1210, which may impact market dynamics for PNH treatments.

5. Notable Q&A Insights

• Cash Sufficiency: Management acknowledged that while there is enough cash to start CAPSTONE, additional financing will be needed to complete the trial.
• Patient Recruitment: The company has pre-identified patients for the CAPSTONE trial, aiming for a smaller patient base than previous studies, which may facilitate quicker enrollment.
• Compliance Issues: Concerns were raised about patient compliance in the COBALT trial, with management noting that self-administration could lead to variability in dosing adherence.
• Market Positioning: Management emphasized the differentiation of Coversin from competitors, particularly in terms of self-administration and potential pricing strategies.

This summary encapsulates the key points from the earnings call, highlighting the company's financial performance, strategic initiatives, and challenges ahead.