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2021 Financial and Operational Results
On March 9, 2022 Lipocine (NASDAQ:LPCN) filed its Form 10-K and posted its earnings release for the year ended December 31, 2021.
Highlights for the fourth quarter 2021 and to-date include:
➢ TLANDO US commercialization licensing agreement with Antares Pharma - October 2021
➢ Multiple poster presentations at AASLD1 - November 2021
➢ FDA grants Fast Track Designation to LPCN 1144 - November 2021
➢ First patient dosed in Phase II, LPCN 1148 in liver cirrhosis - December 2021
➢ Presentations at 2022 NASH-TAG Conference - January 2022
➢ Publication of Phase III results for TLANDO - January 2022
➢ Licensee Antares TLANDO NDA resubmission accepted - February 2022
➢ Regulatory guidance on LPCN 1144 in non-cirrhotic NASH - March 2022
Lipocine generated $16.1 million in revenues from its agreement with Antares for TLANDO. It reported net loss of ($0.6) million, or ($0.01) per diluted share.
For the year ending December 31, 2021 and versus the same ending December 31, 2020:
➢ Revenues were $16.1 million versus nil with the increase driven by proceeds from Lipocine and Antares' licensing agreement for TLANDO executed in October 2021, recognition of minimum royalty payments and materials transferred to Antares;
➢ Research & Development expense totaled $7.7 million, down 21% from $9.7 million, driven by decreases in costs for TLANDO and LPCN 1144, offset by increases in costs for LPCN 1154, 1148 and 1107;
➢ General & Administrative expenses were $5.3 million, decreasing 35% from $8.2 million primarily due to decrease in legal costs relating to the Clarus lawsuit, ongoing class action lawsuit defense, and decrease in personnel costs, offset by an increase in corporate insurance expense;
➢ Total other net expense was ($3.8) million, a change of 27% from ($3.0) million, comprising a litigation settlement of $4.0 million that was absent in the prior year, offset slightly by a gain on warrant liability that was a loss of ($2.9) million in the prior year period;
➢ Net loss was ($0.6) million or compared with net loss of ($21.0) million or ($0.01) and ($0.38) per diluted share, respectively.
As of December 31, 2021, marketable securities, cash and equivalents totaled $44.6 million. Cash burn for 2021 was ($4.4) million, compared with ($15.3) million in 2020. In January 2021, Lipocine raised gross proceeds of $28.7 million through a public offering producing net cash from financing of $27.8 million.
First Patient Dosed in Phase II LPCN 1148 in Liver Cirrhosis
On December 22, 2021, Lipocine announced that the first patient had been dosed in its Phase II, proof-of-concept study (NCT04874350), a multi-center, randomized, placebo-controlled 52-week study of oral (capsule) LPCN 1148 administered twice per day in sarcopenic cirrhotic male patients that are on the liver transplant list. Targeted enrollment will be approximately 60 subjects, randomized 1:1 into treatment and placebo arms. Following the 24 week blinded study, the second phase of the trial will be a 28-week open-label extension. The primary endpoint is change from baseline in Skeletal Muscle Index ("SMI") via computed tomography in LPCN 1148 treated subjects compared to placebo at week 24. Key secondary endpoints include liver frailty index, change in waitlist events, myosteatosis, rate of hospital admissions, all-cause mortality, decompensation events, and rates of breakthrough hepatic encephalopathy. Primary endpoint topline results are expected in the second half of 2022. With TLANDO approaching the developmental finish line, attention turns to LPCN 1144 and LPCN 1148, oral prodrugs of bioidentical testosterone in NASH and cirrhosis, respectively. Decompensated liver cirrhosis is estimated to affect more than 630,000 Americans, resulting in high rates of hospitalization and approximately 45,000 deaths every year. The only cure, liver transplant, has a high economic burden (~$812,500/transplant). LPCN 1148 could counter the sarcopenia observed in 40-70% of cirrhotic men that is associated with hepatic decompensation and hospitalization.
Publication of Phase 3 Study Results for TLANDO
On January 27, 2022, Lipocine announced the publication of positive Phase III clinical data from its Dosing Validation (DV) study (NCT03242590), which evaluated fixed-dose TLANDO for the treatment of hypogonadism. The multicenter, open-label, one-treatment DV study enrolled 95 participants and, as previously disclosed, met its primary endpoint. The related paper is entitled, "A New Oral Testosterone (TLANDO) Treatment Regimen Without Dose Titration Requirement for Male Hypogonadism," is published in Andrology and can be found online here.
TLANDO Licensing Agreement with Antares Pharma
On October 18th, Lipocine announced that it had entered into a licensing agreement with Antares Pharma. The agreement is for commercialization of TLANDO in the US and includes the following terms:
➢ Up to $21 million in licensing fees;
◦ $11 million payable immediately;
◦ $10 million in future payments subject to certain conditions;
➢ Commercial sales payments based on milestones up to $160 million;
➢ Tiered royalties on net sales from mid-teens up to 20%;
➢ Antares responsible for all commercialization, post-marketing studies, and sourcing of TLANDO in US;
➢ Also included is Antares option to license TLANDO XR; if exercised
◦ Antares gains license to develop and commercialize TLANDO XR in the US;
◦ Lipocine would receive $4 million in license fees;
◦ Up to $35 million in clinical and regulatory milestone payments;
◦ Tiered royalties on net sales from mid-teens to 20%
◦ Antares responsible for all clinical development costs, regulatory filings, commercialization and post-marketing activities.
Lipocine retains all rights to rest of world and non-testosterone replacement therapy indications for both TLANDO and TLANDO XR. We update our model to reflect the terms of this arrangement and assume that Antares will exercise its option to advance TLANDO XR.
TLANDO NDA Resubmission Accepted
On February 3, 2022, Lipocine announced that licensee Antares Pharma's New Drug Application (NDA) for TLANDO had been accepted by the FDA, designated as a Class 1 resubmission with a two-month review goal period. The target action date has been set to March 28, 2022.
LPCN 1144 for Treatment of Non-Cirrhotic NASH
With the recent grant of Fast Track from the FDA and terms for the commercialization of TLANDO settled, LPCN 1144 moves into pole position at Lipocine. Now that responsibilities for commercializing TLANDO have been assigned, we expect Lipocine to shift its primary attention towards LPCN 1144 and an upcoming meeting with the FDA to determine trial design. We anticipate that a clear path forward for LPCN 1144 will be provided to stakeholders in early 2022.
Fast Track Designation
In a November 4th press release, Lipocine shared its success in obtaining the FDA's Fast Track Designation for LPCN 1144 for treatment of non-cirrhotic NASH. The designation is requested by a sponsor company for drug candidates that treat serious conditions and fill an unmet medical need. As no other NASH treatments have been approved and results from the LiFT trial were positive, the designation is welcome and not a surprise. The status should help Lipocine more efficiently design the Phase III program with closer guidance by the regulatory agency. It will also confer several benefits including more frequent interaction with the FDA, eligibility for accelerated approval, priority review and rolling review. Rolling review will allow Lipocine to submit portions of its NDA as they become ready rather than waiting until the entire package is ready thereby speeding the review process.
Regulatory Guidance on LPCN 1144
On March 1, 2022, Lipocine provided an update on its Type C meeting with the FDA regarding LPCN 1144's development. The FDA provided written response acknowledging that LPCN 1144's NDA would be submitted via 505(b)(2) regulatory pathway, that no additional nonclinical studies are needed to support the submission, and that Lipocine's Phase II LiFT study's multicomponent primary surrogate endpoint is acceptable for seeking approval under accelerated approval. The FDA recommended Lipocine either conduct a separate dose-ranging study prior to Phase III or evaluate multiple doses in the Phase III study and that the aforementioned multicomponent primary surrogate endpoint is acceptable. The FDA recommended Phase III study duration of 72 weeks. The FDA also recommended that Lipocine submit an updated Phase III protocol for feedback and recommended requesting an End-of-Phase II meeting to discuss trial design including the plan for reading liver histopathology.
Next Steps
Now that selected 36-week biopsy data has been presented to stakeholders and with the Fast Track Designation in its back pocket, Lipocine's next steps are to prepare a presentation for a scientific and medical conference and complete the extension study. With feedback from its Type C meeting with the FDA, Lipocine is now charged with redesigning and submitting an updated Phase III protocol to the FDA, and scheduling an End-of-Phase II meeting with the FDA to be requested at the beginning of April 2022. In response to FDA guidance, Lipocine must decide whether it wishes to conduct a preliminary dose-ranging study, or to incorporate dose-ranging into the design of its Phase III trial. We think it is likely that Lipocine will seek a partner to advance LPCN 1144 into a registrational study.
Milestones
➢ TLANDO
◦ NDA filed for TLANDO - February 2020
◦ Tentative approval of TLANDO - December 2020
◦ TLANDO licensing agreement with Antares - October 2021
◦ TLANDO PDUFA date - March 28, 2022
➢ LPCN 1144
◦ Presentation of 36-week LiFT study, biopsy data to investors - August 2021
◦ End of Phase II meeting with FDA - 2H:21
◦ Results from LiFT Extension Study - Mid-2022
◦ Grant of Fast Track Designation for LPCN 1144 - November 2021
◦ Type C meeting results for LPCN 1144 - March 2022
◦ LPCN 1144 End-of-Phase II meeting request - April 2022
◦ LPCN 1144 End-of-Phase II meeting - 3Q:22
➢ LPCN 1148
◦ IND clearance for Phase II study of LPCN 1148 - May 2020
◦ Male cirrhosis trial first subject dosed for LPCN 1148 - 4Q:21
◦ Enrollment completion - 2Q/3Q:22
◦ Topline 24-week results - 4Q:22/1Q:23
➢ LPCN 2101 IND in epilepsy - 2022
➢ Abstract presentation at EASL - June 2021
➢ Topline announcement for PK study for LPCN 1154 - 4Q:21/1Q:22
➢ Launch Phase IIa proof of concept Post-Partum Depression (PPD) trial - 4Q:21
Summary
On March 9th, Lipocine reported its 2021 financial results generating $16.1 million in revenues driven predominantly by proceeds from its agreement with Antares for TLANDO. It reported net loss of ($0.6) million, or ($0.01) per diluted share. As of December 31, 2021, marketable securities, cash and equivalents totaled $44.6 million. Cash burn for 2021 was ($4.4) million, compared with ($15.3) million in 2020. In January 2021, Lipocine raised gross proceeds of $28.7 million through a public offering producing net cash from financing of $27.8 million. In the 10-K, Lipocine also provided guidance for enrollment completion and topline results for LPCN 1148's Phase II study.
Highlights for the fourth quarter and to-date included the licensing agreement with Antares for TLANDO, NDA resubmission which was accepted in February 2022, and publication of Phase III results for TLANDO January 2022. The FDA granted Fast Track Designation to LPCN 1144, and in March 2022, offered guidance for clinical next steps. Finally, the first liver cirrhosis patient was dosed in the Phase II trial for LPCN 1148.
Lipocine's Phase II biopsy data for LPCN 1144 yielded positive results, with agreement across multiple measures of NASH and statistical significance in a small patient group, as well as positive liver marker, body composition and safety results. Lipocine recently provided an update on its Type C meeting with the FDA regarding LPCN 1144's development. The FDA provided written response acknowledging that LPCN 1144's NDA would be via 505(b)(2) regulatory pathway, and that the LiFT study's multicomponent primary surrogate endpoint is acceptable for seeking approval under the accelerated approval pathway. The FDA recommended Lipocine either conduct a separate dose-ranging study prior to Phase III or evaluate multiple doses in the Phase III study and that the aforementioned multicomponent primary surrogate endpoint is acceptable. With feedback from its FDA Type C meeting, Lipocine is now charged with redesigning and submitting an updated Phase III protocol, and scheduling an End-of-Phase II meeting. We think it is likely that Lipocine will seek a partner to advance LPCN 1144 into a registrational study.
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1. American Association for the Study of Liver Diseases
2. Lipocine Corporate Presentation January 2022
