Heat Biologics Announces Financial Results for the Second Quarter Ended June 30, 2015

DURHAM, N.C., Aug. 13, 2015 (GLOBE NEWSWIRE) — Heat Biologics, Inc. (NASDAQ:HTBX), a clinical stage biopharmaceutical company focused on the development of cancer immunotherapies, today announced its financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Highlights & Recent Developments

  • Announced the development of ComPACT, a next-generation combination immunotherapy platform

    • Combines two important immunotherapy pathways, checkpoint inhibition and T-cell costimulation, in a single construct
    • First IND with the ComPACT platform is expected in 2H 2016
  • Presented interim immune response data from ongoing Phase 2 trial with HS-110 in advanced non-small-cell lung cancer at the 2015 American Society of Clinical Oncology (ASCO) annual meeting
  • Announced new Phase 1b trial of HS-110 in non-small cell lung cancer in combination with other immunotherapeutic agents

    • Trial will explore combination of HS-110 with various immune modulators.
  • Provided an update on immune responder and non-responder phenotypes from the Phase 1 clinical trial of HS-410 in non-muscle invasive bladder cancer at the American Association for Cancer Research (AACR) annual meeting
  • Announced key management promotions

    • Taylor Schreiber, M.D., Ph.D. to Chief Scientific Officer, responsible for leading the Company’s research efforts including its ImPACT and ComPACT Therapy drug development platforms
    • Melissa Price, Ph.D., to Vice President of Product Development, responsible for directing the Company’s clinical development, regulatory and manufacturing strategy

“We continued to make advances and generate new data from our novel immunotherapy programs this quarter. Of particular note, we unveiled ComPACT, a next generation combination immunotherapy platform that holds the promise of delivering T-Cell priming and co-stimulatory molecules in a single biological product,” said Jeff Wolf, Heat’s CEO. “We also announced a new Phase 1b trial of HS-110 in non-small cell lung cancer which will explore the combination of HS-110 with various immune modulators.”

“We expect a number of important value creating milestones in the second half of 2015,” continued Mr. Wolf. ”For HS-410, our immunotherapy candidate for non-muscle-invasive bladder cancer, we plan to release one-year safety and immune response data from our Phase 1 trial and complete enrollment in our Phase 2 trial. Our accomplishments this quarter and throughout the year position us well to achieve our goals in the second half of 2015 and beyond.”

Quarter Ended June 30, 2015 vs. Quarter Ended June 30, 2014

Research and development expenses for the second quarter of 2015 decreased 31% to $0.6 million, compared to the $0.8 million in the second quarter of 2014. The decrease is attributable to a decrease in pre-manufacturing costs associated with preparing to produce vaccines for use in our clinical trials, offset by increases in lab supplies and other fees.

Clinical and regulatory expenses increased to $3.4 million, compared to $1.1 million for the second quarter of 2014. The increase was attributable to increases in clinical trial execution costs, increases in investigator payments, as well as an increase in costs related to the production of vaccines for our clinical trials.

General and administrative expenses for the quarter were $0.9 million, compared to $1.0 million for the second quarter of 2014. The decrease is attributable to a decrease in personnel expense, a decrease in facility expense due to allocation to other departments, and a decrease in travel expenses.

Net loss attributable to Heat Biologics, Inc. in the second quarter was $4.7 million, or ($0.56) per basic and diluted share. This compares to a net loss of $2.8 million, or ($0.44) per basic and diluted share in the second quarter of 2014. 

As of June 30, 2015, the Company had cash, cash equivalents, and short-term investments of approximately $19.3 million. This compares to cash, cash equivalents, and short-term investments of approximately $14.4 million at December 31, 2014.

Six Months Ended June 30, 2015 vs. Six Months Ended June 30, 2014

Research and development expenses for the six months ended June 30, 2015 (2015 Period) decreased to $1.1 million, compared to $1.4 million for the six months ended June 30, 2014 (2014 Period). The decrease from the 2014 Period to the 2015 Period is attributable to a decrease in pre-manufacturing costs associated with preparing to produce vaccines for use in our clinical trials, as well as decreases in patent, license and other professional fees, offset by increases in compensation costs associated with new hires, lab supplies and other costs, and depreciation related to the build out of the lab facility and other associated costs. 

Clinical and regulatory expenses increased to $5.5 million, from $2.0 million in the first six months of 2014. The increase year over year is attributable to increases in clinical trial execution costs, increased investigator payments, as well as an increase in costs related to the production of vaccines for our clinical trials. Additionally, personnel cost, including consultants, professional fees, facilities costs, travel, and license fees increased.

General and administrative costs increased to $2.2 million, from $2.0 million in the comparable period in 2014. The increase is attributable to increase in pay to certain key employees, an increase in professional services such as accountants, attorneys and investor relations, and travel. These increases are offset by a decrease in facility and related costs as well as a decrease in depreciation.

About Heat Biologics, Inc.

Heat Biologics, Inc. (www.heatbio.com) is a clinical-stage biopharmaceutical company focused on developing its novel, “off-the-shelf” ImPACT and ComPACT therapeutic vaccines to combat a wide range of cancers. Our therapies are designed to deliver live, genetically-modified, irradiated human cells which are reprogrammed to “pump out” a broad spectrum of cancer-associated antigens, together with a potent immune adjuvant called “gp96” to educate and activate a cancer patient’s immune system to recognize and kill cancerous cells. Heat is conducting a Phase 2 trial of its viagenpumatucel-L (HS-110) in patients with non-small cell lung cancer, as well as a Phase 2 trial with its vesigenurtacel-L (HS-410) in patients with non-muscle invasive bladder cancer.

Forward Looking Statements

This press release includes forward-looking statements on our current expectations and projections about future events. In some cases forward-looking statements can be identified by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based upon current beliefs, expectations and assumptions and include statements regarding the continued advances of the programs with the lead clinical trials, the expected achievement of clinical milestone, and Heat’s potential for impact of Heat’s ImPACT™ Therapy. These statements are subject to a number of risks and uncertainties, many of which are difficult to predict, including the ability for Heat’s ImPACT™ Therapy to perform as designed, the ability to timely enroll patients and complete the clinical trial on time, the other factors described in our annual report on Form 10-K for the year ended December 31, 2014 and our other filings with the SEC. The information in this release is provided only as of the date of this release, and we undertake no obligation to update any forward-looking statements contained in this release based on new information, future events, or otherwise, except as required by law.

HEAT BIOLOGICS, INC.
Consolidated Balance Sheets
Unaudited
  June 30, December 31,
  2015 2014
     
Assets    
     
Current Assets    
Cash and cash equivalents  $ 11,451,395  $ 3,714,304
Investments, held to maturity (net) 7,912,866 10,698,982
Prepaid expenses and other current assets 836,088 863,227
Total Current Assets 20,200,349 15,276,513
     
Property and Equipment, net 494,966 445,534
     
Other Assets    
Restricted cash 101,141 101,129
Deposits 69,798 19,798
Related party receivable 58,017 48,642
Deferred financing costs, net 28,050 24,554
Total Other Assets 257,006 194,123
     
Total Assets  $ 20,952,321  $ 15,916,170
     
Liabilities and Stockholders’ Equity    
     
Current Liabilities    
Accounts payable  $ 814,322  $ 1,367,426
Accrued expenses and other payables 1,168,259 805,968
Current portion of long term debt 1,009,218 397,465
Total Current Liabilities 2,991,799 2,570,859
     
Long Term Liabilities    
Long term debt, net of discount and current portion 3,998,517 2,314,124
Other long term liabilities 12,228
Total Liabilities 7,002,544 4,884,983
Commitments and Contingencies    
Stockholders’ Equity    
Common stock, $.0002 par value; 50,000,000 shares authorized, 8,404,456 and 6,492,622 shares issued and outstanding at June 30, 2015 (unaudited) and December 31, 2014, respectively 1,363 982
Accumulated other comprehensive loss (37,051)
Additional paid in capital 47,779,698 35,894,823
Accumulated deficit (32,758,116) (24,135,447)
Total Stockholders’ Equity– Less Non-Controlling Interest 14,985,894 11,760,358
Non-Controlling Interest (1,036,117) (729,171)
Total Stockholders’ Equity 13,949,777 11,031,187
     
Total Liabilities and Stockholders’ Equity  $ 20,952,321  $ 15,916,170
 
 
HEAT BIOLOGICS, INC.
Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
         
  Three Months Ended, Six Months Ended,
  June 30, June 30,
  2015 2014 2015 2014
Operating expenses:        
Research and development  $ 587,240  $ 849,359  $ 1,090,791  $ 1,382,987
Clinical and regulatory 3,373,758 1,113,186 5,543,231 1,959,570
General and administrative 893,242 1,014,888 2,202,398 2,029,758
Total operating expenses 4,854,240 2,977,433 8,836,420 5,372,315
         
Loss from operations (4,854,240) (2,977,433) (8,836,420) (5,372,315)
         
Interest income 20,702 6,546 29,828 17,521
Other income (expense) 3,865 12,530 25,482 (26,529)
Interest expense (73,075) (148,505)
Total non-operating (expenses) income (48,508) 19,076 (93,195) (9,008)
         
Net loss (4,902,748) (2,958,357) (8,929,615) (5,381,323)
Net loss – non-controlling interest (189,277) (111,442) (306,946) (203,810)
Net loss attributable to Heat Biologics, Inc.  $ (4,713,471)  $ (2,846,915)  $ (8,622,669)  $ (5,177,513)
         
Net loss per share attributable to Heat Biologics, Inc.—basic and diluted  $ (0.56)  $ (0.44)  $ (1.13)  $ (0.80)
         
Weighted-average number of common shares used in net loss per share attributable to common stockholders—basic and diluted 8,401,159 6,452,986 7,612,393 6,432,857
         
Other comprehensive loss:        
Net loss (4,902,748) (2,958,357) (8,929,615) (5,381,323)
Unrealized loss on foreign currency translation (16,185) (37,051)
Total other comprehensive loss (4,918,933) (2,958,357) (8,966,666) (5,381,323)
Comprehensive loss attributable to non-controlling interest (189,277) (111,442) (306,946) (203,810)
Comprehensive loss  $ (4,729,656)  $ (2,846,915)   $ (8,659,720)  $ (5,177,513)
 
HEAT BIOLOGICS, INC.
Consolidated Statements of Cash Flows
(unaudited)
     
  Six Months Ended
  June 30,
  2015 2014
     
Cash Flows from Operating Activities    
Net loss  $ (8,929,615)  $ (5,381,323)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 53,937 21,068
Amortization of debt issuance costs 50,074
Amortization of bond premium 59,882 106,762
Re-measurement of fair value of stock warrants liability 20,600
Stock based compensation 786,847 497,772
Increase (decrease) in cash arising from changes in assets and liabilities:    
Related party receivable (9,375) (11,446)
Prepaid expenses, and other current assets, and restricted cash 23,202 398,454
Deposits (50,000) (10,478)
Accounts payable (569,974) 68,228
Accrued expenses and other payables 362,523 (182,944)
Other long term liabilities 12,228
Accrued interest (25,364)
Net Cash Used by Operating Activities (8,210,271) (4,498,671)
     
Cash Flows from Investing Activities    
Proceeds from maturities of short term investments 12,967,509 9,631,543
Purchases of short term investments (10,241,275) (3,305,972)
Purchases of property and equipment (103,369) (448,234)
Net Cash Provided by Investing Activities 2,622,865 5,877,337
     
Cash Flows from Financing Activities    
Proceeds from March 2015 public offering, net of underwriting discounts 11,400,870
Proceeds from the exercise of stock options 37,719
Proceeds from long term debt 2,242,575
Stock issuance costs (302,461)
Net Cash Provided by Financing Activities 13,340,984 37,719
     
Effect of exchange rate changes on cash and cash equivalents (16,487)
     
Net Increase in Cash and Cash Equivalents 7,737,091 1,416,385
     
Cash and Cash Equivalents – Beginning of Period 3,714,304 4,566,992
     
Cash and Cash Equivalents – End of Period  $ 11,451,395  $ 5,983,377
     
Supplemental Disclosure for Cash Flow Information    
Interest paid  $ 98,430 $ — 
Cashless exercise of stock warrants $ —   $ 143,190
CONTACT: Heat Biologics, Inc.
         Jeff Wolf
         Chief Executive Officer
         919-240-7133
         [email protected]
         
         Investor Relations & Media Inquiries
         Michael Wood
         LifeSci Advisors, LLC
         646-597-6983
         [email protected]