Exicure, Inc. Reports Full Year 2018 Financial Results and Corporate Progress

Completed Phase 1 clinical trials of two drugs and began public
trading

SKOKIE, Ill.–(BUSINESS WIRE)–Exicure, Inc. (OTCQB: XCUR), a pioneer in gene regulatory and
immunotherapeutic drugs utilizing spherical nucleic acid (SNA™)
constructs, today reported full year financial results for the year
ended December 31, 2018 and provided an update on corporate progress.

We’re very proud of our achievements on each of our strategic
priorities for 2018,” said Dr. David Giljohann, Chief Executive Officer
of Exicure. “We drove two programs through Phase 1 clinical trials while
laying the foundation for expanding our pipeline in neurology, rare
dermatology, ophthalmology and gastroenterology. We also strengthened
the management of our company and our access to capital. In the coming
year, we expect to execute and advance our ongoing clinical programs,
while expanding into new therapeutic areas,” Giljohann concluded.

Corporate Progress

Key achievements for Exicure during 2018 include:

  • Completed the Phase 1 clinical trial of AST-008, a TLR9 agonist for
    immuno-oncology applications showing activation of the immune system
    and robust cellular response
  • Completed a successful Phase 1 clinical trial of XCUR17 showing
    clinical effect in patients with psoriasis
  • Demonstrated, in preclinical animal models, superior
    bio-distribution and prolonged survival when administering nusinersen
    in SNA format versus nusinersen in linear format
  • Strengthened management team with addition of Dr. Matthias Schroff
    as Chief Operating Officer
  • Commenced public trading on the OTCQB market
  • Completed $22.0 million financing in August of 2018 at $4.50/share

Pipeline Updates

AST-008: AST-008 is an SNA consisting of toll-like receptor 9, or
TLR9, agonists designed for immuno-oncology applications. The company
began subject dosing of AST-008 in a Phase 1 clinical trial during the
fourth quarter 2017 and the trial completed in September of 2018.
AST-008 was shown to be safe and tolerable in all subjects, with no
serious adverse events and no dose limiting toxicity. During the fourth
quarter of 2018, the FDA opened the IND for AST-008 and informed
the Company that our proposed Phase 1b/2 trial may proceed. During early
2019, we opened four clinical sites and began dosing and recruiting
patients in that trial.

XCUR17: XCUR17 is an antisense SNA that targets the mRNA
encoding IL-17RA, a protein that is considered essential in the
initiation and maintenance of psoriasis. In the fourth quarter of 2018,
we reported results from the Phase 1 trial of XCUR17. Of the twenty-one
treated patients, eleven treated with the highest strength XCUR17 gel
were observed to have a reduction in redness and improvement in healing
as determined by blinded physician assessments. Further, the highest
strength XCUR17 gel showed a statistically significant improvement in
psoriasis symptoms versus the vehicle gel. By comparison, seventeen of
the twenty-one patients treated with the positive comparator showed a
clinical response, while four patients treated with the placebo vehicle
had a clinical response.

2018 Financial Results and Financial Guidance

Cash Position: As of December 31, 2018, Exicure had cash and cash
equivalents of $26.3 million compared to $25.8 million as of December
31, 2017. In 2018, Exicure raised approximately $22.0 million in gross
proceeds from the private placement of common stock.

Research and Development Expense: Research and development
expense was $14.1 million for the year ended December 31, 2018 compared
to $13.1 million for the year ended December 31, 2017. The increase in
research and development expense of $1.0 million was primarily due to
higher employee-related expense of $1.2 million and higher platform and
discovery-related expense of $0.6 million, partially offset by a net
decrease of $0.9 million in costs related to our clinical development
programs.

General and Administrative Expense: General and administrative
expense was $7.8 million for the year ended December 31, 2018 and $7.0
million for the year ended December 31, 2017, an increase of $0.8
million. This increase was due to higher costs of $0.9 million
associated with being a public company, including higher expense for
investor and public relations and director and officer insurance, as
well as higher compensation and related expense of $0.5 million
associated with salary increases and the addition of an executive during
2018, partially offset by lower legal and accounting costs of $0.7
million resulting from a change in mix of transaction support in 2018 as
compared to 2017.

Net Loss: Net loss was $22.4 million for the year ended December
31, 2018, compared to net loss of $11.0 million for the year ended
December 31, 2017. Net loss reflects the changes in expenses discussed
above and also reflects that revenue for the year ended December 31,
2018 decreased $9.6 million compared to revenue for the year ended 2017.
Revenue in 2017 was primarily related to the Purdue Collaboration and
reflects the amortization of the upfront payment on the Collaboration
which did not reoccur in 2018.

Cash Runway Guidance: Exicure believes that, based on its current
operating plans and as of the date of this press release, its existing
cash and cash equivalents as of December 31, 2018 is sufficient to meet
its anticipated cash requirements into early 2020.

About Exicure, Inc.

Exicure, Inc. is a clinical-stage biotechnology company developing
therapeutics for immuno-oncology, inflammatory diseases and genetic
disorders based on our proprietary Spherical Nucleic Acid, or SNA
technology. We believe Exicure’s proprietary SNA architecture has
distinct chemical and biological properties that may provide advantages
over other nucleic acid therapeutics and may have therapeutic potential
to target diseases not typically addressed with other nucleic acid
therapeutics. Exicure’s lead program is in a Phase1b/2 trial in patients
with advanced solid tumors. Exicure is based outside of Chicago, IL. www.exicuretx.com

Forward Looking Statements

This press release contains forward-looking statements (including within
the meaning of Section 21E of the United States Securities Exchange Act
of 1934, as amended, and Section 27A of the United States Securities Act
of 1933, as amended) concerning the Company, the Company’s technology,
potential therapies, cash requirements and other matters.
Forward-looking statements generally include statements that are
predictive in nature and depend upon or refer to future events or
conditions, and include words such as “may,” “will,” “should,” “would,”
“expect,” “plan,” “believe,” “intend,” “look forward,” and other similar
expressions among others. Statements that are not historical facts are
forward-looking statements. Forward-looking statements are based on
current beliefs and assumptions that are subject to risks and
uncertainties and are not guarantees of future performance. Actual
results could differ materially from those contained in any
forward-looking statement as a result of various factors, including,
without limitation: unexpected costs, charges or expenses that reduce
cash runway; that Exicure’s pre-clinical or clinical programs do not
advance or result in approved products on a timely or cost effective
basis or at all; the cost, timing and results of clinical trials; that
many drug candidates that have completed Phase 1 trials do not become
approved drugs on a timely or cost effective basis or at all; the
ability to enroll patients in clinical trials; possible safety and
efficacy concerns; regulatory developments; and the ability of Exicure
to protect its intellectual property rights. Risks facing the Company
and its programs are set forth in the Company’s filings with the SEC.
Except as required by applicable law, the Company undertakes no
obligation to revise or update any forward-looking statement, or to make
any other forward-looking statements, whether as a result of new
information, future events or otherwise.

         

EXICURE, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in
thousands, except share and per share data)

 
December 31,
2018
December 31,
2017
 
ASSETS
Current assets:
Cash and cash equivalents $ 26,268 $ 25,764
Unbilled revenue receivable 3 13
Receivable from related party 10 17
Prepaid expenses and other assets 1,382   1,844  
Total current assets 27,663 27,638
Property and equipment, net 1,061 1,317
Other noncurrent assets 32   32  
Total assets $ 28,756   $ 28,987  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 500 $ 1,049
Accrued expenses and other current liabilities 1,543 1,273
Current portion of deferred revenue   1,034  
Total current liabilities 2,043 3,356
Long-term debt, net 4,925 4,855
Common stock warrant liability 797 523
Other noncurrent liabilities 39   278  
Total liabilities $ 7,804 $ 9,012
 
Stockholders’ equity:
Common stock, $0.0001 par value per share; 200,000,000 shares
authorized, 44,358,000 issued and outstanding, December 31, 2018;
39,300,823 shares issued and outstanding, December 31, 2017
4 4
Additional paid-in capital 75,942 53,586
Accumulated deficit (54,994 ) (33,615 )
Total stockholders’ equity 20,952   19,975  
Total liabilities and stockholders’ equity $ 28,756   $ 28,987  
 
     

EXICURE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS

(in thousands, except share and per share
data)

 

Year Ended
December 31,

2018     2017
Revenue:
Collaboration revenue

$

118   $ 9,719  
Total revenue 118 9,719
Operating expenses:
Research and development expense 14,119 13,080
General and administrative expense 7,818   7,046  
Total operating expenses 21,937   20,126  
Operating loss (21,819 ) (10,407 )
Other income (expense), net:
Interest expense (672 ) (795 )
Other income (loss), net 78   191  
Total other income (loss), net (594 ) (604 )
Net loss $ (22,413 ) $ (11,011 )
 
Basic and diluted loss per common share $ (0.54 ) $ (1.09 )
Basic and diluted weighted-average common shares outstanding 41,189,177 10,119,569
 

Contacts

MacDougall Biomedical Communications
Karen Sharma
781-235-3060
ksharma@macbiocom.com