Versartis
Oct 26, 2017

Versartis Reports Third Quarter 2017 Financial Results and Provides Corporate Update

MENLO PARK, Calif., Oct. 26, 2017 (GLOBE NEWSWIRE) -- Versartis, Inc. (NASDAQ:VSAR), an endocrine-focused biopharmaceutical company, today announced financial results for the third quarter ended September 30, 2017, and provided a corporate update.

"In response to the disappointing outcome of the VELOCITY trial last month, we have been working diligently to understand the results and determine appropriate next steps for the company," said Jay Shepard, President and CEO of Versartis, Inc. "While we are exploring our options and the potential viability of moving somavaratan forward, we are implementing a restructuring plan to significantly reduce our costs and preserve cash. We have also begun a parallel process to identify opportunities to diversify our pipeline, including possible strategic transactions, with the aim of leveraging the company's expertise and resources to create value for shareholders."

Corporate Update

Third Quarter 2017 Financial Results

For the third quarter ended September 30, 2017, Versartis reported a net loss of approximately $49.8 million, or $1.40 per share, basic and diluted, compared to a net loss for the quarter ended September 30, 2016 of $27.3 million, or $0.92 per share, basic and diluted.

Total operating expenses for the quarter ended September 30, 2017 were $49.7 million, compared to $27.4 million for the quarter ended September 30, 2016.

Research and development (R&D) expenses for the quarter ended September 30, 2017 were $42.7 million, compared to $20.7 million for the quarter ended September 30, 2016. The increase in R&D expenses was primarily due to estimated fees associated with the expected cancellation of certain of our supplier contracts, including those with our contract manufacturers.

General and administrative (G&A) expenses for the quarter ended September 30, 2017 were $7.1 million, compared to $6.8 million for the quarter ended September 30, 2016. The increase in G&A expenses was primarily due to an increase in professional services expenses. 

Total operating expenses for the quarter ended September 30, 2017 include non-cash stock-based compensation expense of $3.7 million, compared to $2.7 million of non-cash stock-based compensation expense for the quarter ended September 30, 2016.

Total operating expenses for the nine months ended September 30, 2017 were $115.6 million, compared to $73.8 million for the nine months ended September 30, 2016. R&D expenses for the nine months ended September 30, 2017 were $93.3 million, compared with $55.3 million for the nine months ended September 30, 2016, reflecting an increase in clinical and manufacturing costs to support the global VELOCITY pediatric trial and our Phase 2/3 trial of somavaratan in pediatric patients in Japan, as well as the estimated fees associated with the expected cancellation of certain of our supplier contracts noted above.  G&A expenses for the nine months ended September 30, 2017 were $22.3 million, compared to $18.6 million for the nine months ended September 30, 2016. The increase was attributable to additional payroll, consulting, and professional services expenses to support our year over year growth.

Total operating expenses for the nine months ended September 30, 2017 include non-cash stock-based compensation expense of $11.1 million, compared to $8.0 million of non-cash stock-based compensation expense for the nine months ended September 30, 2016. 

Cash and cash equivalents were $118.8 million as of September 30, 2017.

Cautionary Note on Forward-Looking Statements

This press release contains forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding our intentions or current expectations concerning, among other things the potential for additional development and eventual regulatory approval of somavaratan; the possibility of diversifying our pipeline by licensing or otherwise acquiring additional product candidates; and the potential for a strategic transaction with another public or private company with complementary assets and expertise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results and events to differ materially from those anticipated. We discuss many of these risks in greater detail under the heading "Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2016 and in our Quarterly Report on Form 10-Q for the three months ended June 30, 2017 which are on file with the Securities and Exchange Commission (SEC). Forward-looking statements are not guarantees of future performance, and our actual results may differ materially from the forward-looking statements contained in this press release. Any forward-looking statements that we make in this press release speak only as of the date of this press release and we assume no obligation to update them after the date of this press release.

Contacts:

Joshua Brumm
COO & CFO
(650) 963-8582
jbrumm@versartis.com


Versartis, Inc. 
Condensed Consolidated Statement of Operations  
(Unaudited) 
(in thousands, except per share amounts) 
  
 Three Months Ended  Nine Months Ended 
 September 30,  September 30, 
 2017  2016  2017  2016 
Operating expenses               
Research and development$42,673  $20,664  $93,295  $55,253 
General and administrative 7,073   6,752   22,301   18,575 
Total operating expenses 49,746   27,416   115,596   73,828 
Loss from operations (49,746)  (27,416)  (115,596)  (73,828)
Interest income 220   120   661   354 
Other income (expense), net (262)  (39)  (1,044)  (210)
Net loss before provision for income taxes (49,788)  (27,335)  (115,979)  (73,684)
Provision for income taxes -   -   128   - 
Net loss (49,788)  (27,335)  (116,107)  (73,684)
Net loss per share- basic and diluted$(1.40) $(0.92) $(3.29) $(2.50)
Weighted-average common shares used to compute    35,680   29,574   35,336   29,495 
  basic and diluted net loss per share
                

 


Versartis, Inc. 
Condensed Consolidated Balance Sheet  
(Unaudited) 
(in thousands, except per share amounts) 
  
 September 30,  December 31, 
 2017  2016 
Assets:       
Cash and cash equivalents$118,783  $201,153 
Other assets 7,836   4,417 
Build-to-suit lease asset 8,952   - 
Total assets$135,571  $205,570 
Liabilities and stockholders' equity:       
Accounts payable and other current liabilities   $40,903  $14,503 
Upfront payment from collaboration partner 40,000   40,000 
Build-to-suit lease obligation 5,428   - 
Total liabilities 86,331   54,503 
Total stockholders' equity 49,240   151,067 
Total liabilities and stockholders' equity$135,571  $205,570