Homology Medicines Reports Second Quarter 2023 Financial Results and Recent Highlights

Homology Medicines, Inc. (Nasdaq: FIXX), a genetic medicines company, announced today second quarter 2023 financial results and highlighted recent updates.

“We recently shared the encouraging initial data from the first dose level of the pheEDIT trial evaluating gene editing candidate HMI-103 for PKU, which showed a one-time administration was generally well-tolerated in all three participants, and two participants achieved meaningful reductions in plasma Phe as of the cut-off date of July 26, 2023,” said Albert Seymour, Ph.D., President and Chief Executive Officer of Homology Medicines. “Despite these data, we are evaluating strategic options for the Company and our genetic medicines pipeline due to the current financing environment and the expected clinical development timeline for HMI-103.”

Second Quarter 2023 and Recent Accomplishments

• Announced encouraging initial clinical data from the first dose cohort of the pheEDIT clinical trial evaluating HMI-103 gene editing candidate for phenylketonuria (PKU), and today announced approval from the independent Data Monitoring Committee to escalate to the next dose cohort in the trial.
  • As of the data cut-off date of July 26, 2023, HMI-103 was generally well-tolerated in all three participants.
  • Participant 1 experienced a clinically meaningful reduction in plasma phenylalanine (Phe) levels to below the U.S. American College of Medical Genetics and Genomics (ACMG) PKU treatment guideline threshold of <360 μmol/L*, and the majority of Phe levels have been below 360 μmol/L through 31 weeks post-dose, including after the initiation of dietary protein supplementation.
  • Participant 2 experienced a meaningful plasma Phe reduction of 49% at 17 weeks post-dose.
  • Participant 3 was recently dosed and additional data are needed to draw a meaningful conclusion.
• Also previously announced that Homology will be evaluating strategic options for the Company and its genetic medicines programs, including HMI-103.
  • Despite the encouraging HMI-103 data, based on the current financing environment and the anticipated clinical development timeline, Homology is not further developing its programs and has instituted a related reduction in force.
  • Retained TD Cowen as strategic financial advisor.

Second Quarter 2023 Financial Results

• As of June 30, 2023, Homology had approximately $127.1 million in cash, cash equivalents and short-term investments. Based on current projections, which include implementation of our plan to discontinue further development of all programs and conduct a comprehensive review of strategic alternatives while reducing the Company’s current workforce by approximately 80 employees, Homology believes it has sufficient cash resources to fund operations into 2026.
• Net loss for the quarter ended June 30, 2023 was $(35.0) million or $(0.61) per share, compared to a net loss of $(29.1) million or $(0.51) per share for the quarter ended June 30, 2022.
• Collaboration revenues for the quarter ended June 30, 2023 were $0.4 million, compared to $0.8 million for the quarter ended June 30, 2022. Collaboration revenue in both periods reflects revenue recognized under the Company’s Stock Purchase Agreement with Pfizer. The Company previously granted Pfizer a right of first refusal to negotiate a potential collaboration on the development and commercialization of HMI-102 and HMI-103, as well as information sharing rights, both of which expired on May 9, 2023.
• Total operating expenses for the quarter ended June 30, 2023 were $31.2 million, compared to $29.1 million for the quarter ended June 30, 2022, and consisted of research and development expenses and general and administrative expenses.
• Research and development expenses for the quarter ended June 30, 2023 were $23.0 million, compared to $21.1 million for the quarter ended June 30, 2022. Research and development expenses increased due to higher direct costs related to our pheEDIT clinical trial with HMI-103, as well as increased external development costs for earlier stage programs. Partially offsetting these increases was lower direct research expenses for HMI-102 due to pausing the clinical trial, along with lower employee-related costs as a result of transferring employees to OXB Solutions related to the establishment of the AAV Innovation and Manufacturing Business in the first quarter of 2022.
• General and administrative expenses for the quarter ended June 30, 2023 were $8.2 million, compared to $8.0 million for the quarter ended June 30, 2022. General and administrative expenses increased as a result of higher legal expenses, partially offset by lower consulting and market research costs.

*Vockley J., et al., Genet Med. 2014About HMI-103HMI-103 is a one-time, in vivo, nuclease-free gene editing candidate for PKU designed to harness the body's natural DNA repair process of homologous recombination to replace the disease-causing gene with a functional gene and liver-specific promoter and to increase PAH in all transduced liver cells with episomal expression. HMI-103 has the potential to treat adults and children whose livers are still rapidly growing. HMI-103 was granted Fast Track designation by the U.S. Food and Drug Administration for the treatment of neurocognitive and neuropsychiatric manifestations of PKU secondary to phenylalanine hydroxylase deficiency.About PKUPKU is a rare inborn error of metabolism caused by a mutation in the PAH gene. PKU results in a loss of function of the enzyme phenylalanine hydroxylase, which is responsible for the metabolism of Phe, an amino acid obtained exclusively from the diet. If left untreated, toxic levels of Phe can accumulate in the blood and result in progressive and severe neurological impairment. Currently, there are no treatment options for PKU that target the underlying genetic cause of the disease. According to the National PKU Alliance, PKU affects nearly 16,500 people in the U.S. with approximately 350 newborns diagnosed each year. The worldwide prevalence of PKU is estimated to be 50,000 people.

About Homology Medicines, Inc. Homology Medicines, Inc. is a clinical-stage genetic medicines company dedicated to transforming the lives of patients suffering from rare diseases by addressing the underlying cause of the disease. Homology has gene editing and gene therapy clinical-stage programs in PKU and Hunter syndrome (MPS II), a preclinical pipeline that includes a gene therapy candidate for metachromatic leukodystrophy and a GTx-mAb (vectorized antibody) candidate for paroxysmal nocturnal hemoglobinuria, as well as intellectual property on its family of 15 adeno-associated viruses (AAVHSCs). Additionally, the Company has a 20 percent stake in Oxford Biomedica Solutions, an AAV manufacturing company based on Homology’s internal process development and manufacturing. For more information, visit www.homologymedicines.com.

Forward-Looking StatementsThis press release contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding: the anticipated benefits and costs associated with our plans to evaluate strategic options; our anticipated clinical development timelines; the expected financial and operational impacts of our restructuring initiatives; our expectations surrounding the potential, safety, efficacy, and regulatory and clinical progress of our product candidates, including HMI-103 for the treatment of PKU; the potential of our gene therapy and gene editing platforms, including our GTx-mAb platform; our plans and timing for the release of additional preclinical and clinical data; our plans to progress our pipeline of genetic medicine candidates and the anticipated timing for these milestones; our position as a leader in the development of genetic medicines; and the sufficiency of our cash, cash equivalents and short-term investments to fund our operations. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: we have and expect to continue to incur significant losses; our need for additional funding, which may not be available; any financial or strategic option we pursue may not be successful; our decision to discontinue further program development efforts may not result in the anticipated savings for the Company and may adversely affect our business; our recent reduction in force undertaken to reduce our ongoing operating expenses may not result in our intended outcomes and may yield unintended consequences as well as additional costs; potential unforeseen events during clinical trials could cause delays or other adverse consequences; risks relating to the regulatory approval process; should we resume development of our product candidates, initial, interim, topline and preliminary data may change as more patient data become available, and are subject to audit and verification procedures that could result in material changes in the final data; our product candidates may cause serious adverse side effects; inability to maintain our collaborations, or the failure of these collaborations; our reliance on third parties, including for the manufacture of materials for our research programs, preclinical and clinical studies; failure to obtain U.S. or international marketing approval; ongoing regulatory obligations; effects of significant competition; unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives; product liability lawsuits; securities class action litigation; the impact of the COVID-19 pandemic and general economic conditions on our business and operations, including our preclinical studies and clinical trials; failure to attract, retain and motivate qualified personnel in the future; the possibility of system failures or security breaches; risks relating to intellectual property; and significant costs incurred as a result of operating as a public company. These and other important factors discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

- Financial Tables Follow -

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
		As of
		June 30, 2023			December 31, 2022
Cash, cash equivalents and short-term investments		$	127,071		$	175,026
Equity method investment			17,319			25,814
Property and equipment, net			845			1,078
Right-of-use assets			19,837			20,563
Other assets			4,265			5,989
Total assets		$	169,337		$	228,470
Accounts payable, accrued expenses and other liabilities		$	21,238		$	19,859
Operating lease liabilities			28,724			29,477
Deferred revenue			—			1,156
Stockholders' equity			119,375			177,978
Total liabilities and stockholders' equity		$	169,337		$	228,470

HOMOLOGY MEDICINES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
		Three months ended June 30,								Six months ended June 30,
			2023				2022				2023				2022
Collaboration revenue		$	354			$	802			$	1,156			$	1,604
Operating expenses:
Research and development			22,982				21,075				42,970				45,348
General and administrative			8,188				8,034				16,513				22,181
Total operating expenses			31,170				29,109				59,483				67,529
Loss from operations			(30,816	)			(28,307	)			(58,327	)			(65,925	)
Other income:
Gain on sale of business			—				—				—				131,249
Interest income			1,511				474				2,980				506
Total other income			1,511				474				2,980				131,755
Income (loss) before income taxes			(29,305	)			(27,833	)			(55,347	)			65,830
Benefit from (provision for) income taxes			—				105				—				(862	)
Loss from equity method investment			(5,739	)			(1,361	)			(8,541	)			(1,952	)
Net income (loss)		$	(35,044	)		$	(29,089	)		$	(63,888	)		$	63,016
Net income (loss) per share-basic		$	(0.61	)		$	(0.51	)		$	(1.11	)		$	1.10
Net income (loss) per share-diluted		$	(0.61	)		$	(0.51	)		$	(1.11	)		$	1.09
Weighted-average common shares outstanding-basic			57,795,285				57,385,578				57,756,032				57,334,078
Weighted-average common shares outstanding-diluted			57,795,285				57,385,578				57,756,032				57,869,443

 

Company Contact:Brad SmithChief Financial and Business [e-mail]