Concert Pharmaceuticals
Mar 6, 2017

Concert Pharmaceuticals Reports Year Ended 2016 Financial Results

- Vertex Pharmaceuticals to Acquire Cystic Fibrosis Candidate, CTP-656, from Concert Pharmaceuticals for up to $250 Million -

- CTP-543 On Track to Advance Into Phase 2a Trial -

- Conference Call Scheduled Today at 8:30 a.m. EST -

LEXINGTON, Mass.--(BUSINESS WIRE)-- Concert Pharmaceuticals, Inc. (NASDAQ:CNCE) today reported financial results for the year ended December 31, 2016, as well as provided an update on its product pipeline and corporate activities.

"We are excited to continue the progression of our clinical candidates, CTP-656 and CTP-543. These two drug candidates, CTP-656 for cystic fibrosis and CTP-543 for alopecia areata, further our goal of developing innovative treatments with the potential to provide important benefits to patients," said Roger Tung, Ph.D. President and Chief Executive Officer of Concert Pharmaceuticals. "I am very pleased that Vertex intends to integrate CTP-656 within their portfolio of investigational and approved CF medicines. We believe this agreement provides the optimal pathway to broadly and rapidly advance the development of CTP-656 for patients."

Recent Business Highlights and Upcoming Milestones

Full Year 2016 Financial Results

Conference Call and Webcast

The Company will host a conference call and webcast today at 8:30 a.m. EST to provide an update on the Company and discuss full year 2016 financial results. To access the conference call, please dial (855) 354-1855 (U.S. and Canada) or (484) 365-2865 (International) five minutes prior to the start time.

A live webcast may be accessed in the Investors section of the company's website at www.concertpharma.com. Please log on to the Concert website approximately 15 minutes prior to the scheduled webcast to ensure adequate time for any software downloads that may be required. A replay of the webcast will be available on Concert's website for three months.

                 
Concert Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
 

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2016 2015 2016 2015
Revenue:
License and research and development revenue

$

21 $ 305 $ 174 $ 6,574
Other revenue 50,155
Milestone revenue   10,000     10,000  
Total revenue 21   10,305   174   66,729  
Operating expenses:
Research and development 8,658 6,386 36,983 28,885
General and administrative 3,515   3,256   14,358   13,056  
Total operating expenses 12,173   9,642   51,341   41,941  
(Loss) Income from operations (12,152 ) 663 (51,167 ) 24,788
Interest and other income (expense), net 109   44   447   (185 )
(Loss) Income before income taxes (12,043 ) 707 (50,720 ) 24,603
Provision for income taxes 23 429
Net (loss) income $ (12,043 ) $ 684   $ (50,720 ) $ 24,174  
Net (loss) income per share applicable to common stockholders - basic $ (0.54 ) $ 0.03   $ (2.28 ) $ 1.14  
Net (loss) income per share applicable to common stockholders - diluted $ (0.54 ) $ 0.03   $ (2.28 ) $ 1.09  
Weighted-average number of common shares used in net (loss) income per share applicable to common stockholders - basic 22,287   22,123   22,233   21,152  
Weighted-average number of common shares used in net (loss) income per share applicable to common stockholders - diluted 22,287   23,302   22,233   22,267  
 
         

Concert Pharmaceuticals, Inc.

Summary Balance Sheet Data
(in thousands)
 
December 31, 2016 December 31, 2015
Cash and cash equivalents $ 40,555 $ 92,510
Investments, available for sale 55,630 49,680
Working capital 92,159 137,481
Total assets 100,395 146,932
Deferred revenue 10,050 10,170
Total stockholders' equity $ 85,594 $ 130,635
 

About CTP-656 and Cystic Fibrosis

CTP-656 is a novel CFTR potentiator that may offer next generation, once-daily dosing and was developed by Concert's novel application of deuterium chemistry to modify ivacaftor. Ivacaftor is marketed by Vertex Pharmaceuticals under the brand name Kalydeco. Concert is initially developing CTP-656 as a potential monotherapy treatment for cystic fibrosis due to gating mutations of the gene that encodes for the cystic fibrosis transmembrane conductance regulator (CFTR), a protein, which regulates components of sweat, mucus clearance and digestion.

Cystic fibrosis is a life-threatening, hereditary genetic disease that has systemic effects and can cause significantly reduced lung and digestive system function. According to the Cystic Fibrosis Foundation, an estimated 70,000 people worldwide have cystic fibrosis.

About CTP-543 and Alopecia Areata

CTP-543 was discovered by applying Concert's deuterium chemistry technology to modify ruxolitinib, which is commercially available under the name Jakafi® in the United States for the treatment of certain blood disorders. Ruxolitinib has been used to treat alopecia areata in academic settings, including an investigator-sponsored clinical trial, and has been shown to promote hair growth in individuals with moderate to severe disease.

Alopecia areata is an autoimmune disease that results in partial or complete loss of hair on the scalp and body that may affect up to 650,000 Americans at any given time. The scalp is the most commonly affected area, but any hair-bearing site can be affected alone or together with the scalp. Onset of the disease can occur throughout life and affects both women and men. Alopecia areata can be associated with serious psychological consequences, including anxiety and depression. There are currently no drugs approved by the U.S. Food and Drug Administration (FDA) for the treatment of alopecia areata.

Additional Information about the Transactions and Where to Find It

This press release is being made in respect of the proposed asset sale with Vertex. The proposed asset sale and the asset purchase agreement will be submitted to the shareholders of the Company for their consideration and approval. In connection with the proposed asset sale, the Company will file a proxy statement with the SEC. This press release does not constitute a solicitation of any vote or proxy from any shareholder of the Company. Investors are urged to read the proxy statement carefully and in its entirety when it becomes available and any other relevant documents or materials filed or to be filed with the SEC or incorporated by reference in the proxy statement, because they will contain important information about the proposed asset sale. The definitive proxy statement will be mailed to the Company's shareholders. In addition, the proxy statement and other documents will be available free of charge at the SEC's internet website, www.sec.gov. When available, the proxy statement and other pertinent documents may also be obtained free of charge at the Investors section of the Company's website, www.concertpharma.com, or by directing a written request to Concert Pharmaceuticals, Inc., Attn: Investor Relations, in writing, at 99 Hayden Ave, #500, Lexington, MA 02421.

The Company and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed asset sale. Information about the Company's directors and executive officers is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 6, 2017. Additional information regarding these persons and their interests in the transaction will be included in the proxy statement relating to the proposed asset sale when it is filed with the SEC. These documents can be obtained free of charge from the sources indicated above.

About Concert

Concert Pharmaceuticals is a clinical stage biopharmaceutical company focused on applying its DCE Platform® (deuterated chemical entity platform) to create novel medicines designed to address unmet patient needs. The Company's approach starts with approved drugs in which deuterium substitution has the potential to enhance clinical safety, tolerability or efficacy. Concert has a broad pipeline of innovative medicines targeting pulmonary diseases, including cystic fibrosis, autoimmune and inflammatory diseases and central nervous systems (CNS) disorders. For more information please visit www.concertpharma.com.

Cautionary Note on Forward Looking Statements

Any statements in this press release about our future expectations, plans and prospects, including statements about the asset purchase agreement, including risks related to the satisfaction of the conditions to closing the acquisition, the clinical development of our therapeutic candidates and expectations regarding the sufficiency of our cash balance to fund operating expenses and capital expenditures, and other statements containing the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "would," and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the uncertainties inherent in the initiation of future clinical trials, availability and timing of data from ongoing and future clinical trials and the results of such trials, whether preliminary results from a clinical trial will be predictive of the final results of that trial or whether results of early clinical trials will be indicative of the results of later clinical trials, expectations for regulatory approvals, availability of funding sufficient for our foreseeable and unforeseeable operating expenses and capital expenditure requirements and other factors discussed in the "Risk Factors" section of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and in other filings that we make with the Securities and Exchange Commission. In addition, any forward-looking statements included in this press release represent our views only as of the date of this release and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update any forward-looking statements included in this press release.

Concert Pharmaceuticals Inc., the CoNCERT Pharmaceuticals Inc. logo and DCE Platform are registered trademarks of Concert Pharmaceuticals, Inc.
Kalydeco is a registered trademark of Vertex Pharmaceuticals, Inc.
Jakafi is a registered trademark of Incyte Corporation.

Investors
Concert Pharmaceuticals, Inc.
Justine Koenigsberg, 781-674-5284
ir@concertpharma.com
or
Media
The Yates Network
Kathryn Morris, 845-635-9828

Source: Concert Pharmaceuticals, Inc.

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