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Forward Pharma Reports Fourth Quarter and Year End 2015 Financial and Operational Results

COPENHAGEN, Denmark, April 12, 2016 (GLOBE NEWSWIRE) -- Forward Pharma A/S (NASDAQ:FWP) (“We” or “Forward” or the “Company”), today reported financial results for the fourth quarter and year ended December 31, 2015. Net loss for the fourth quarter and year ended December 31, 2015 was $9.6 million and $37.0 million, respectively. Loss per share for the fourth quarter and year ended December 31, 2015 was $0.20 and $0.79, respectively. On a non-GAAP basis, after removing the effect of non-cash income and expense items, our fourth quarter and year ended 2015 net loss would have been $8.4 million and $35.4 million, or $0.18 and $0.76 per share, respectively. As of December 31, 2015, the Company had $176.7 million in cash, cash equivalents and marketable securities, with no debt outstanding.

“We continue to advance our clinical and intellectual property objectives including strengthening our clinical development team,” said Peder Andersen, Chief Executive Officer of Forward.

Fourth Quarter ended December 31, 2015 Financial and Operational Results

The net loss for the fourth quarter of 2015 was $9.6 million compared to a net loss of $2.0 million for the fourth quarter of 2014, excluding the preferential distribution to Class B shareholders.

Research and development expenses were $8.6 million for the quarter ended December 31, 2015 compared to $3.9 million for the fourth quarter of 2014. This increase was due primarily to a $4.2 million increase in clinical and pre-clinical expenses as we expanded our development activities to include several pre-clinical studies and Phase 1 trials as well as preparations for our planned Phase 3 trial of FP187 in relapsing-remitting multiple sclerosis (RRMS). Share-based compensation also increased by $1.0 million in connection with equity awards granted during the year. We continue to anticipate that our spending for research and development will increase in future quarters as we advance our clinical programs and patent prosecution, including our patent interference proceeding.

General and administrative expenses were $3.6 million for the quarter ended December 31, 2015 compared to $4.0 million for the fourth quarter of 2014. The decrease in general and administrative expenses in the fourth quarter 2015 versus the prior year was primarily due to a decrease in costs related to our initial public offering that was completed in 2014, partially offset by an increase in share-based compensation expense, legal fees and costs associated with being a public company. We expect our rate of general and administrative spending will increase in the future as we expand our business and advance our intellectual property portfolio including expenditures in connection with the lawsuits against Biogen in Europe.

Non-cash stock based compensation expense included in total operating expenses was $3.5 million for the fourth quarter of 2015 versus $2.5 million for the same period in 2014.

As of December 31, 2015, the Company had $176.7 million in cash, cash equivalents and marketable securities.

IP Update

We continue to advance our intellectual property portfolio. The following summarizes the current status of and recent developments concerning several of our most important U.S. and European patents and patent applications:

  • U.S. IP: Interference schedule accelerated with oral arguments scheduled for November 2016. On August 19, 2015, the USPTO re-declared the interference between Forward and a subsidiary of Biogen, Inc. regarding claims to the treatment of multiple sclerosis, or MS, with a 480 mg daily dose of DMF (dimethyl fumarate), the active ingredient in Tecfidera®. The USPTO confirmed Forward as the senior party based on having an earlier benefit date of our U.S. Patent Application No. 11/576,871. Biogen was deemed the junior party with respect to its U.S. Patent No. 8,399,514. In August 2015, the parties filed priority statements and motions related to validity and benefit. Oppositions to motions are due June 1, 2016 and the oral argument is now scheduled for November 30, 2016 (previously January 2017).
  • European IP: Hearing in Germany postponed under an agreement with Biogen. On November 18, 2014, we filed a lawsuit against Biogen Idec GmbH, Biogen Idec International GmbH and Biogen Idec Ltd. in the Regional Court in Düsseldorf, Germany, asserting infringement of our utility model by Biogen’s marketing of Tecfidera® in Germany with a label instructing a daily dose of 480 mg for the treatment of MS. On May 22, 2015, we expanded the existing lawsuit to include the assertion of infringement of our European patent EP2801355. The ’355 patent covers, among other things, the treatment of MS with 480 mg per day of DMF using pH‑controlled compositions, which have an enteric coating. We seek damages for Biogen’s sales of Tecfidera® in Germany. If the court agrees with our assertion, we expect the court will declare that we would be entitled to damages and/or compensation for unjust enrichment. An oral hearing in Germany originally scheduled for March 24, 2016 at the Regional Court in Düsseldorf has been stayed (i.e. postponed) under a mutual agreement between the two parties. That stay will expire, in the case of the ’355 patent, upon an initial decision in the European Patent Office (EPO) opposition proceedings against the ’355 patent, and in the case of the utility model, upon a decision in both the ’355 EPO opposition proceedings and the utility model cancellation proceedings.

Clinical Update

Our development plan for our lead drug, FP187, is focused on the RRMS indication. In consultation with a clinical research organization, we are continuing to prepare for a single beta interferon-controlled Phase 3 trial in RRMS. In parallel, we are evaluating alternative Phase 3 clinical strategies in RRMS, which could shorten our time to commercialization and/or reduce costs. We expect to complete these evaluations during 2016, in anticipation of beginning the Phase 3 trial in the second half of 2016.

We are currently performing additional Phase 1 studies on FP187 to evaluate its in vivo release profile as well as tolerability. In addition, we are planning to conduct a human mass‑balance/metabolic profile study, which is a requirement of regulatory agencies.

Our nonclinical development plan for our lead drug, FP187, is designed to support regulatory submissions with a full toxicology study package.

Corporate Update

Forward Pharma also announced today that Rupert Sandbrink, M.D., Ph.D. joined the Company on March 1, 2016 as Executive Vice President, Multiple Sclerosis/Neurology and Immunology. Dr. Sandbrink has more than 17 years of expertise in the pharmaceutical industry in all stages of clinical development, including product launch and medical affairs. Prior to joining Forward Pharma, Dr. Sandbrink was Vice President and Therapeutic Area Head in Medical and Clinical Development and Clinical Sciences at Schering AG and later Bayer AG, with a focus on MS, other neurologic diseases and auto-immune disorders.

Forward Pharma A/S
Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
Year Ended Three Months Ended
December 31st
December 31st
2015 2014 2015 2014
Research and development$ (33,727) $ (10,547) $ (8,623) $ (3,931)
General and administrative (15,852) (9,154) (3,592) (3,998)
Total operating expenses (49,579) (19,701) (12,215) (7,929)
Foreign exchange gain 11,933 5,589 2,328 5,748
Other 306 (5,154) (30) 72
Net (loss) before taxes (37,340) (19,266) (9,917) (2,109)
Income tax benefit 336 250 336 138
Net (loss) (37,004) (19,016) (9,581) (1,971)
Preferential distribution - (42,734) - (42,734)
Net (loss) $ (37,004) $ (61,750) $ (9,581) $ (44,705)
Net (loss) per ordinary share
Basic and diluted$ (0.79) $ (1.79) $ (0.20) $ (1.01)
Weighted-average shares used basic and diluted 46,749 34,490 46,872 44,094



Forward Pharma A/S
Reconciliation of net (loss) as reported to non-GAAP net (loss)
(in thousands, except per share amounts)
Year Ended Three Months Ended
December 31st
December 31st
2015 2014 2015 2014
Net (loss) as reported $ (37,004) $ (61,750) $ (9,581) $ (44,705)
Adjustments for non-cash items:
Preferential distribution - 42,734 - 42,734
Share-based compensation 13,541 5,951 3,506 2,477
Foreign exchange gain (11,933) (5,589) (2,328) (5,748)
Fair value adjustment to convertible notes - 3,823 - (20)
Fair value adjustment shareholder warrants - 968 - (82)
Non-GAAP net (loss)$ (35,396) $ (13,863) $ (8,403) $ (5,344)
Non-GAAP net (loss) per share information:
Weighted-average shares used 46,749 34,490 46,872 44,094
Non-GAAP basic and diluted per share (net) loss $ (0.76) $ (0.40) $ (0.18) $ (0.12)

This press release uses a non-GAAP measure of net loss that is a financial measure that is not calculated in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The Company believes that the presentation of non-GAAP net loss is useful to investors because it excludes non-cash items that do not affect the Company’s liquidity and period to period changes, most of which are not within the control of the Company. Non-cash items include: (i) preferential distribution to Class B shareholders; (ii) share-based compensation expense; (iii) non-cash foreign exchange gains or (losses) and (iv) fair value adjustments of convertible notes and shareholder warrants. However, there are limitations in the use of non-GAAP financial measures as they exclude certain income and expenses that are recurring in nature. Furthermore, the Company's non-GAAP financial measure may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented herein should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with IFRS.

Forward Pharma A/S
Condensed Consolidated Balance Sheets
(in thousands)
December 31st December 31st
2015 2014
Assets
Cash, cash equivalents and available-for-sale financial assets $ 176,652 $ 223,484
Other assets 6,252 1,825
Total assets$ 182,904 $ 225,309
Equity and Liabilities
Shareholders' equity$ 176,693 $ 222,394
Liabilities 6,211 2,915
Total equity and liabilities$ 182,904 $ 225,309

Relevant Intellectual Property Sources:

USPTO Interference with Biogen: The motions are publicly available on the USPTO interference website at https://acts.uspto.gov/ifiling/PublicView.jsp, using interference number 106023.

Forward Pharma U.S. and European patent and patent applications can be found by using the following links:
USPTO: http://www.uspto.gov/
USPTO Public Pair: http://portal.uspto.gov/pair/PublicPair
EPO: https://register.epo.org/regviewer

About Forward Pharma:
Forward Pharma A/S is a Danish biopharmaceutical company developing FP187, a proprietary formulation of DMF (dimethyl fumarate) for the treatment of inflammatory and neurological indications. Since our founding in 2005, we have worked to advance unique formulations of DMF, which is an immune modulator, as a therapeutic agent to improve the health and well-being of patients with immune disorders including multiple sclerosis. FP187, our clinical candidate, is a DMF formulation in a delayed and slow release oral dose.

Our principal executive offices are located at Østergade 24A, 1st Floor, 1100 Copenhagen K, Denmark and our American Depositary Shares are publicly traded on NASDAQ Stock Market (FWP). For more information about the Company’s products and developments, please visit our web site at http://www.forward-pharma.com.

Forward Pharma A/S Media Contact:
Sharon Klahre, Director, Investor Relations
Forward Pharma USA, LLC
7 Skyline Drive
Hawthorne, NY 10532
SK@forward-pharma.com
+1 914-752-3542

The Ruth Group
Lee Roth
lroth@theruthgroup.com
+1 646-536-7014

Forward Looking Statements:
Certain statements in this press release may constitute “forward-looking statements” of the Company within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements which contain language such as “believe,” “expect,” “anticipate,” “hope,” “would” and “potential.” Forward-looking statements are predictions only which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed in such statements. Many such risks, uncertainties and other factors are taken into account as part of our assumptions underlying these forward-looking statements and include, among others, the following: the Company’s ability to obtain, maintain and defend issued patents with protective claims; the issuance and term of patents; the Company’s ability to prevail in or obtain a favorable decision in any patent interference or infringement action; the Company’s ability to recover damages in any patent infringement action; uncertainties relating to our development plans and activities, including the commencement of any clinical trial and the results, timing, cost and location thereof; risks and uncertainties related to the scope, validity and enforceability of our intellectual property rights in general and the impact on us of patents and other intellectual property rights of third parties; our ability to commercialize and generate revenue from our sole clinical candidate, FP187; clinical development, and clinical trials of FP187 may not be successful; completion of required clinical trials may take longer than we anticipate, which could result in increased costs, limit our access to funding and delay or limit our ability to obtain regulatory approval for FP187. These and other factors are identified and described in detail in certain of our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 20-F for the year ended December 31, 2015.

Source: Forward Pharma US