Arsanis Reports Financial Results for Third Quarter 2018

Arsanis, Inc. (NASDAQ: ASNS), a clinical-stage biopharmaceutical company focused on applying monoclonal antibody (mAb) immunotherapies to address serious infectious diseases, today reported financial results for the third quarter ended September 30, 2018.

“Since the discontinuation of the ASN100 Phase 2 clinical trial, we have been working with our board of directors to consider strategic options that may potentially result in changes to our business strategy and future operations and we look forward to providing information on these efforts in the future,” said René Russo, President and Chief Executive Officer of Arsanis.

Dr. Russo continued, “During the third quarter, follow-up visits for all 154 patients who were enrolled in the ASN100 Phase 2 trial were completed and the trial database was locked. We are currently evaluating the complete dataset and we expect to complete the analysis in the fourth quarter of this year.”

Recent Key Business Developments

  • In September 2018, Arsanis nominated the lead development candidate for its ASN500 program. ASN500 targets respiratory syncytial virus (RSV), a virus that afflicts in aggregate over two million young children and elderly and immunocompromised patients annually in the United States and can cause serious respiratory tract infections.
  • In August 2018, Arsanis entered into a supplemental $1.1 million grant agreement with the Bill & Melinda Gates Foundation to conduct preclinical development activities for the ASN500 program that were not included in the original February 2017 grant agreement.  The Company recognized grant income of $1.1 million during the three and nine months ended September 30, 2018 under this August 2018 grant agreement.
  • In August 2018, Arsanis’ board of directors approved a reduction in workforce to reduce operating costs and better align the company’s workforce with the needs of its business following the discontinuation of ASN100 clinical development. The Company anticipates that it will substantially complete the implementation of the reduction in workforce by the end of the fourth quarter of 2018 and estimates that it will incur total expenses of approximately $2.8 million relating to the reduction in workforce, comprised of notice and employee severance and retention payments. Arsanis expects to record these charges during the fourth quarter of 2018 and first quarter of 2019.

Third Quarter 2018 Financial Results

For the third quarter ended September 30, 2018, Arsanis reported a net loss of $10.9 million, or $0.76 loss per share, as compared to a net loss of $11.6 million, or $22.60 loss per share for the third quarter of 2017.

Operating expenses for the third quarter of 2018 were $12.8 million, as compared to $13.1 million for the third quarter of 2017, and were comprised of the following:

Research and development expenses were $9.6 million for the third quarter of 2018, as compared to $10.6 million for the third quarter of 2017. The decrease of $1.0 million was primarily due to a decrease of $0.9 million in direct costs for Arsanis’ ASN100 program, a decrease of $0.1 million in direct costs for its ASN300 program, and a decrease of $0.2 million in direct costs for its ASN500 program, partially offset by an increase of $0.2 million in unallocated research and development expenses.

General and administrative expenses were $3.3 million for the third quarter of 2018, compared to $2.5 million for the third quarter of 2017. The increase of $0.8 million was primarily related to additional costs associated with operating as a public company, including increases of $0.9 million in personnel costs primarily due to an increase in headcount and employee compensation.

Other income, net was $1.9 million for the third quarter of 2018, compared to $1.5 million of other expense, net for the third quarter of 2017.

Year-to-Date 2018 Financial Results

For the nine months ended September 30, 2018, Arsanis reported a net loss of $33.7 million, or $2.35 loss per share, as compared to a net loss of $22.7 million, or $44.22 loss per share for the nine months ended September 30, 2017.

Operating expenses for the nine months ended September 30, 2018 were $36.4 million, as compared to $24.5 million for the nine months ended September 30, 2017, and were comprised of the following:

Research and development expenses were $26.6 million for the nine months ended September 30, 2018, compared to $18.9 million for the nine months ended September 30, 2017. The increase of $7.7 million was primarily due to an increase of $5.5 million in direct costs for Arsanis’ ASN100 program, an increase of $0.2 million in direct costs for its ASN500 program, and an increase of $2.3 million in unallocated research and development expenses.

General and administrative expenses were $9.8 million for the nine months ended September 30, 2018, compared to $5.6 million for the nine months ended September 30, 2017. The increase of $4.1 million was primarily related to additional costs associated with operating as a public company, including increases of $2.2 million in personnel costs primarily due to an increase in headcount and employee compensation, $0.3 million in Board of Directors fees, $0.5 million in insurance fees and $1.0 million in professional fees primarily due to legal and accounting costs associated with being a public company.

Other income, net was $2.8 million for the nine months ended September 30, 2018, compared to $1.8 million for the nine months ended September 30, 2017.

As of September 30, 2018, cash and cash equivalents totaled $40.8 million, with approximately 14.32 million shares of common stock outstanding.

About Arsanis

Arsanis, Inc. is a clinical-stage biopharmaceutical company focused on applying monoclonal antibody (mAb) immunotherapies to address serious infectious diseases. Arsanis possesses a deep understanding of the pathogenesis of infection, paired with access to what Arsanis believes to be some of the most advanced mAb discovery techniques and platforms available today.  Arsanis’ pipeline is comprised of mAbs targeting multiple serious bacterial and viral pathogens, including respiratory syncytial virus.

Arsanis is a U.S. company headquartered in Waltham, Massachusetts, with a wholly owned subsidiary that is primarily focused on discovery research in Vienna, Austria (Arsanis Biosciences GmbH).

For more information, please visit the Arsanis website at www.arsanis.com.