Prometheus Biosciences Reports Third Quarter 2021 Financial Results and Highlights Recent Corporate Progress

Prometheus Biosciences, Inc. (Nasdaq: RXDX), a clinical-stage biotechnology company pioneering a precision medicine approach for the discovery, development, and commercialization of novel therapeutic and companion diagnostic products for the treatment of immune-mediated diseases, starting first with inflammatory bowel disease (IBD), today reported financial results for the quarter ended September 30, 2021.

“We advanced significant milestones in the third quarter with the initiations of our two Phase 2 trials in ulcerative colitis and Crohn’s disease and are on track to readout the topline data of these two trials in the fourth quarter of 2022,” said Mark McKenna, Chairman and CEO of Prometheus. “We look forward to announcing our full Phase 1a trial results and expanding PRA023 into a new indication beyond IBD this quarter.”  

Third Quarter 2021 and Recent Corporate Highlights

Initiated global Phase 2 ARTEMIS-UC clinical trial of PRA023 in Ulcerative Colitis (UC). Prometheus’ Phase 2 ARTEMIS-UC clinical trial is currently enrolling patients with moderate-to-severely active UC who have failed conventional therapy, including biologics. The trial is a 12-week, double-blind, placebo-controlled, randomized study to evaluate the efficacy and safety of PRA023 in patients with UC. The initial cohort is statistically powered to evaluate the efficacy of PRA023 in patients with UC. The expansion cohort is statistically powered to further evaluate the effectiveness of the company’s companion diagnostic in patients with UC. Topline results for the Phase 2 ARTEMIS-UC trial are expected in 4Q 2022.

Initiated global Phase 2a APOLLO-CD clinical trial of PRA023 in Crohn’s disease (CD). Prometheus’ Phase 2a APOLLO-CD clinical trial is a 12-week open label study that is currently enrolling patients with moderate-to-severely active CD with endoscopically active disease who have failed conventional therapy, including biologics. The study will assess the efficacy of PRA023 and the effectiveness of the company’s companion diagnostic in patients with CD. Topline results for the Phase 2a APOLLO-CD trial are expected in 4Q 2022.

Enrolled over 1,500 patients in Prometheus Enroll360TM platform. Prometheus’ Enroll360™ is a global patient recruitment platform that is designed to accelerate development timelines by improving the efficiency of patient identification and increasing the rate of enrollment for the company’s biomarker-guided clinical trials. Prometheus is building a global network of trial-ready sites where over 5,000 patients will be molecularly profiled and clinically characterized to determine their eligibility for Prometheus clinical trials. The company plans to utilize Enroll360™ in Prometheus’ companion diagnostic-paired clinical trials for PRA023 as well as future programs.

Prometheus Biosciences and Abveris announce multi-target antibody discovery collaboration. Prometheus and Abveris entered into a multi-year collaboration to develop therapeutic antibodies. The collaboration will support the expansion of Prometheus’ portfolio and complement internal antibody development capabilities.

Upcoming Milestones and Events

• Final results from the Phase 1a trial of PRA023 expected in 4Q 2021
• New indication announcement for PRA023 in 4Q 2021
• Investigational Device Exemption (IDE) submission of the companion diagnostic for PRA023 planned for 3Q 2022
• IND submission for PR600 planned for 3Q 2022
• Topline results from the ARTEMIS-UC Phase 2 study expected in 4Q 2022
• Topline results from APOLLO-CD Phase 2a study expected in 4Q 2022

Third Quarter 2021 Financial Results

Cash and Cash Equivalents. As of September 30, 2021, Prometheus Biosciences had cash and cash equivalents of $279.1 million, compared to $54.2 million at the end of 2020. We received net proceeds of $73.7 million from the sale of shares of our Series D-2 convertible preferred stock and net proceeds of $199.8 million from the sale of our common stock in our IPO, both in the first quarter.

Collaboration Revenue. Revenue was $1.0 million for the quarter ended September 30, 2021, compared to $0.4 million for the quarter ended September 30, 2020. Revenues were $2.1 million for the first nine months of 2021 compared to $0.8 million for the first nine months of 2020 primarily due to additional revenue generated from Prometheus’ collaboration with Dr. Falk Pharma.

Research and Development Expenses. Research and development expenses were $17.6 million for the quarter ended September 30, 2021, compared to $4.7 million for the quarter ended September 30, 2020, and $38.9 million for the first nine months of 2021 compared to $13.8 million for the first nine months of 2020.  The increases were primarily driven by advancement of PRA023 into global Phase 2 clinical trials, as well as advancing our other development programs.

General and Administrative Expenses. General and administrative expenses were $10.2 million for the quarter ended September 30, 2021, compared to $3.2 million for the quarter ended September 30, 2020, and $21.1 million for the first nine months of 2021 compared to $7.4 million for the first nine months of 2020. The increases were primarily due to an increase in expenses related to operating as a public company and an increase in personnel and stock-based compensation.

About PRA023

PRA023 is an IgG1 humanized monoclonal antibody (mAb) that has been shown to block tumor necrosis factor (TNF)-like ligand 1A (TL1A). PRA023 binds both soluble and membrane-associated human TL1A with high affinity and specificity and has the potential to substantially improve outcomes for moderate-to-severe IBD patients predisposed to increased TL1A expression. Prometheus is developing PRA023 for the treatment of the two most common forms of IBD, Ulcerative Colitis (UC) and Crohn’s disease (CD). The Company has initiated enrollment in a Phase 2 trial in UC patients and a Phase 2a trial in CD patients, each utilizing a genetic-based companion diagnostic designed to identify patients who are predisposed to increased expression of TL1A and therefore potentially more likely to respond to PRA023.

About Prometheus Biosciences

Prometheus Biosciences, Inc. is a clinical-stage biotechnology company pioneering a precision medicine approach for the discovery, development, and commercialization of novel therapeutic and companion diagnostic products for the treatment of immune-mediated diseases, starting first with inflammatory bowel disease (IBD). The Company’s precision medicine platform, Prometheus360, combines proprietary machine learning-based analytical approaches with one of the world’s largest gastrointestinal bioinformatics databases to identify novel therapeutic targets and develop therapeutic candidates to engage those targets.

Forward Looking Statements

Prometheus cautions readers that statements contained in this press release regarding matters that are not historical facts are forward-looking statements. These statements are based on our current beliefs and expectations. Such forward-looking statements include, but are not limited to statements regarding: the potential to rapidly enroll and execute our clinical trials and expand our approach to other immune-mediated diseases beyond IBD; our Enroll360 program and ability to accelerate enrollment in our planned and other future clinical trials; Prometheus’ expected timing of topline results for its Phase 2 and 2a trials, final Phase 1a study results and new indication announcement for PRA023, IDE submission for the PRA023 companion diagnostic, and IND submission for PR600; and the potential for the collaboration with Abveris and internal antibody development programs to support the expansion of our portfolio. The inclusion of forward-looking statements should not be regarded as a representation by Prometheus that any of our plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in our business, including, without limitation: Prometheus’ approach to the discovery and development of precision medicines based on Prometheus360 is unproven, and the company may not be able to develop any therapeutics or companion diagnostic products of commercial value; potential delays in the commencement, enrollment and completion of clinical trials and preclinical studies, including due to the COVID-19 pandemic; Prometheus’ dependence on third parties in connection with product manufacturing, research and preclinical and clinical testing, and potential supply chain disruptions related to the COVID-19 pandemic; Prometheus’ ability to develop a companion diagnostic for PRA023; the success of clinical trials and preclinical studies for its product candidates and companion diagnostic; unexpected adverse side effects or inadequate efficacy of our product candidates that may limit their development, regulatory approval and/or commercialization, or may result in recalls or product liability claims; the results of preclinical studies and early clinical trials are not necessarily predictive of future results; regulatory developments in the United States and foreign countries; Prometheus may not realize any benefits from our collaboration with Dr. Falk or Abveris; and other risks described in our prior press releases and filings with the Securities and Exchange Commission (SEC), including under the heading “Risk Factors” in our most recent quarterly report on Form 10-Q and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Prometheus Biosciences, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
		September 30, 2021				December 31, 2020
Assets
	Cash, cash equivalents	$	279,116			$	54,201
	Other current assets		7,992				3,255
	Total current assets		287,108				57,456
	Other assets		1,830				2,177
Total assets		$	288,938			$	59,633
Liabilities and Stockholders' Equity
	Current liabilities	$	15,093			$	15,255
	Long-term liabilities		11,745				15,896
	Total liabilities		26,838				31,151
	Convertible preferred stock		—				126,023
	Total stockholders' equity		262,100				(97,541	)
Total liabilities and stockholders' equity		$	288,938			$	59,633

Prometheus Biosciences, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
			2021				2020				2021						2020
Collaboration revenue		$	1,006			$	359			$	2,092				$		766
Operating expenses:
Research and development			17,551				4,652				38,863						13,840
General and administrative			10,248				3,173				21,088						7,370
Total operating expenses			27,799				7,825				59,951						21,210
Loss from operations			(26,793)				(7,466)				(57,859)						(20,444)
Other income (expense), net			(540)				(360)				(2,418)						(1,487)
Loss from continued operations			(27,333)				(7,826)				(60,277)						(21,931)
Loss from discontinued operations			—				879				—						(6,584)
Net loss		$	(27,333)			$	(6,947)			$	(60,277)				$		(28,515)
Net loss per share, basic and diluted
Continued operations		$	(0.70)			$	(5.13)			$	(2.09)				$		(15.21)
Discontinued operations		$	—			$	0.58			$	—				$		(4.57)
Net loss per share, basic and diluted		$	(0.70)			$	(4.55)			$	(2.09)				$		(19.78)
Weighted average common shares outstanding - basic and diluted			38,848,412				1,526,122				28,778,814						1,441,516

Company Contact:Noel KurdiVP Investor Relations and Communications(646) [e-mail]

Media Contact:Jake RobisonCanaleComm, an Ashfield Health Company(619) [e-mail]