BOSTON, Nov. 4, 2020 /PRNewswire/ -- Stealth BioTherapeutics Corp (Nasdaq: MITO), a clinical-stage biotechnology company focused on the discovery, development and commercialization of novel therapies for diseases involving mitochondrial dysfunction, today announced the first closing under a Development Funding Agreement to support the clinical development of elamipretide.
Stealth received $20 million and is expected to receive up to an additional $15 million from Morningside Ventures contingent on near-term clinical milestones associated with Stealth's geographic atrophy and Barth syndrome development programs. Additional investors may participate in subsequent closings of up to an additional $35 million of near-term funding commitments. In addition, the agreement contemplates that Stealth may receive up to an additional $35 million upon meeting certain pre-defined future milestones and subject to the agreement of the parties. Funds are intended to support the continued clinical development of elamipretide.
Under the terms of the agreement, Stealth will pay participating investors regulatory approval milestone payments in annual increments on a pre-determined payment schedule over seven years, with the majority of payments due in years 5-7 following regulatory approval. No approval payments are owed should regulatory approval not be achieved for elamipretide in the indications currently under or planned for near-term development. Stealth has an option to buy out all future, unpaid milestone payments at any time following certain regulatory approvals at a discounted rate. Stealth will retain exclusive worldwide commercial rights to elamipretide in all indications.
"This provides Stealth with critical funding to develop elamipretide in diseases of mitochondrial dysfunction with serious unmet need," said Reenie McCarthy, CEO of Stealth. "We are incredibly fortunate to have the continued support of Morningside during this pivotal time, as we complete enrollment in our Phase 2b study in geographic atrophy, prepare to file our first NDA for elamipretide for the treatment of Barth syndrome, and expand our development efforts to other rare cardiomyopathies and mitochondrial diseases. The terms of the agreement maximize our financial flexibility ahead of anticipated near-term regulatory, clinical, and, potentially, commercial milestones."
We are a clinical-stage biotechnology company focused on the discovery, development and commercialization of novel therapies for diseases involving mitochondrial dysfunction. Mitochondria, found in nearly every cell in the body, are the body's main source of energy production and are critical for normal organ function. Dysfunctional mitochondria characterize a number of rare genetic diseases and are involved in many common age-related diseases, typically involving organ systems with high energy demands such as the heart, the eye, and the brain. We believe our lead product candidate, elamipretide, has the potential to treat both rare metabolic cardiomyopathies, such as Barth, Duchenne muscular dystrophy and Friedreich's ataxia, rare mitochondrial diseases entailing nuclear DNA mutations, such as POLG-related disorders, as well as ophthalmic diseases entailing mitochondrial dysfunction, such as dry age-related macular degeneration and Leber's hereditary optic neuropathy. We are evaluating our second-generation clinical-stage candidate, SBT-272, and our new series of small molecules, SBT-550, for rare neurological disease indications following promising preclinical data. We have optimized our discovery platform to identify novel mitochondria-targeted compounds which may be nominated as therapeutic product candidates or utilized as scaffolds to deliver other compounds to mitochondria.
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those regarding Stealth BioTherapeutics' plans, anticipated milestones, potential additional funding, strategies and expectations for its preclinical and clinical advancement of its drug development programs, and regulatory interactions and filings related to elamipretide. Statements that are not historical facts, including statements about Stealth BioTherapeutics' beliefs, plans and expectations, are forward-looking statements. The words "anticipate," "expect," "hope," "plan," "potential," "possible," "will," "believe," "estimate," "intend," "may," "predict," "project," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Stealth BioTherapeutics may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements as a result of known and unknown risks, uncertainties and other important factors, including: Stealth BioTherapeutics' ability to obtain additional funding and to continue as a going concern; the impact of the COVID-19 pandemic; the ability to successfully demonstrate the efficacy and safety of Stealth BioTherapeutics' product candidates and future product candidates; the preclinical and clinical results for Stealth BioTherapeutics' product candidates, which may not support further development and marketing approval; the potential advantages of Stealth BioTherapeutics' product candidates; the content and timing of decisions made by the U.S. FDA, the EMA or other regulatory authorities, investigational review boards at clinical trial sites and publication review bodies, which may affect the initiation, timing and progress of preclinical studies and clinical trials of Stealth BioTherapeutics product candidates; Stealth BioTherapeutics' ability to obtain and maintain requisite regulatory approvals and to enroll patients in its planned clinical trials; unplanned cash requirements and expenditures; competitive factors; Stealth BioTherapeutics' ability to obtain, maintain and enforce patent and other intellectual property protection for any product candidates it is developing; and general economic and market conditions. These and other risks are described in greater detail under the caption "Risk Factors" included in the Stealth BioTherapeutics' most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission ("SEC"), as well as in any future filings with the SEC. Forward-looking statements represent management's current expectations and are inherently uncertain. Except as required by law, Stealth BioTherapeutics does not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.
Stern Investor Relations
Janhavi Mohite, 212-362-1200
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SOURCE Stealth BioTherapeutics Inc.