UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2019

Commission File Number 001-38810

 

 

STEALTH BIOTHERAPEUTICS CORP

(Translation of registrant’s name into English)

 

 

Stealth BioTherapeutics Corp

c/o Intertrust Corporate Services (Cayman) Limited

190 Elgin Avenue, George Town

Grand Cayman

KY1-9005 Cayman Islands

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

FORM 20-F  ☒             FORM 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


On May 15, 2019, Stealth BioTherapeutics Corp (the “Company”) issued a press release announcing its unaudited financial results for the quarter ended March 31, 2019 and operational progress. The press release issued by the Company in connection therewith is attached hereto as Exhibit 99.1 The information in this Form 6-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

STEALTH BIOTHERAPEUTICS CORP
By:   /s/ Irene P. McCarthy
    Irene P. McCarthy
    Chief Executive Officer
Date:   May 15, 2019

 

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EXHIBIT INDEX

 

Exhibit

Number

  

Description

99.1    Press Release issued by the Company on May 15, 2019

 

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Exhibit 99.1

 

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STEALTH BIOTHERAPEUTICS REPORTS FIRST QUARTER 2019

FINANCIAL RESULTS AND RECENT BUSINESS HIGHLIGHTS

BOSTON – May 15, 2019 – 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 reported financial results for the quarter ended March 31, 2019.

“We expect 2019 to be a transformational year for Stealth and believe the milestones achieved during the first quarter attest to our ability to execute through this exciting period,” said Reenie McCarthy, Chief Executive Officer at Stealth. “We opened the first quarter with our initial public offering, providing the foundation to implement our clinical strategy. During the quarter, we successfully initiated and dosed the first patient in our ReCLAIM-2 Phase 2b study in dry age-related macular degeneration with geographic atrophy and, more recently, announced completion of enrollment for our pivotal MMPOWER-3 study in primary mitochondrial myopathy. We look forward to sharing more news throughout 2019, including top-line data from MMPOWER-3 expected by year-end.”

First Quarter 2019 and Recent Highlights

 

   

Presented positive results in dry age-related macular degeneration (AMD) and Leber’s hereditary optic neuropathy (LHON) at the Association for Research in Vision and Ophthalmology (ARVO) 2019 Annual Meeting. Results were from the ReCLAIM Phase 1 study in dry AMD and the open-label portion of the ReSIGHT Phase 2 study in LHON. In addition to improvements in measures of visual function and quality of life, elamipretide was well tolerated and most adverse events were mild to moderate in severity. A mid-year 2019 FDA meeting is expected to inform the regulatory path forward in LHON.

 

   

Completed enrollment for primary mitochondrial myopathy (PMM) Phase 3 study. MMPOWER-3 is a Phase 3, randomized, double-blind, parallel-group, placebo-controlled study to evaluate the efficacy and safety of daily subcutaneous injections of elamipretide in patients with PMM, followed by an open-label extension in which 90 of the 95 subjects who have completed the double-blind portion of the trial to date have elected to participate. The study is fully enrolled, with top-line data expected by year end.

 

   

Announced positive results from Barth syndrome Phase 2/3 open-label extension. Data from the open-label portion of the TAZPOWER Phase 2/3 study in Barth syndrome demonstrated a significant (almost 40%) decrease in a biomarker which is diagnostic for the disease, with reductions from baseline observed in all ten open-label extension participants and further correlated with improvements in clinical endpoints. Elamipretide was well tolerated and most adverse events, including injection site reactions, were mild to moderate in severity. We anticipate further engagement with the FDA during the third quarter to discuss appropriate controls for the open-label extension data.

 

   

Dosed first patient in Phase 2b study of elamipretide in patients with dry AMD with geographic atrophy. ReCLAIM-2 is a Phase 2b randomized, double-masked, placebo-controlled clinical study to evaluate the safety and efficacy of 48 weeks of subcutaneous injections of elamipretide in patients with dry AMD with geographic atrophy. Completion of enrollment is targeted for early 2020.


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Completed initial public offering (IPO) of 7,088,232 American Depositary Shares (ADSs) at a public offering price of $12.00 per ADS, which includes a partial exercise of the underwriters’ over-allotment option. The total net proceeds, after deducting underwriting discounts and commissions and other offering expenses, were approximately $76.9 million.

Key Upcoming Milestones

 

   

Meetings with FDA to discuss regulatory path for elamipretide in LHON and Barth syndrome during the second and third quarters of 2019.

 

   

Report top-line data from Phase 3 clinical trial in PMM by the end of 2019.

 

   

Initiate Phase 1 clinical trial of new pipeline candidate, SBT-272, by the end of 2019.

Financial Results for the Quarter Ended March 31, 2019

Cash Position: Cash and cash equivalents were $70.5 million at March 31, 2019, compared to $10.9 million at December 31, 2018. During the first quarter of 2019, the Company raised $76.9 million of net proceeds from its IPO.

Research and Development (R&D) Expenses: R&D expenses were $14.3 million for the first quarter of 2019, compared to $13.4 million for the first quarter of 2018. This increase was primarily due to a $1.7 million increase in headcount and consulting-related expenses as we continued to build our clinical, medical affairs and regulatory functions and a $1.1 million increase in contract manufacturing expenses for NDA-enabling activities, offset by a decrease of $1.9 million in clinical trial costs.

General and Administrative (G&A) Expenses: G&A expenses were $4.2 million for the first quarter of 2019, compared to $3.5 million for the first quarter of 2018. The increase in administrative expenses of $0.7 million was primarily attributable to an increase in pre-commercial activities, including medical affairs, marketing and payer reimbursement activities and expenses related to public company activities, including director fees, and directors’ and officers’ liability insurance.

Other expense, net: Other first quarter expense of $24.7 million, compared to $3.4 million for the first quarter of 2018, was primarily attributable to a non-cash $22.7 million loss on extinguishment of debt due to the conversion of convertible notes into ordinary shares in connection with our IPO and a $1.3 million increase in interest expense associated with the notes, offset by $2.7 million of other income due to the change in fair value of the derivative liability associated with the notes.

Net Loss: Net loss for the first quarter of 2019 was $43.2 million, or $0.20 basic and diluted net loss per ordinary share, as compared to $20.3 million for the first quarter of 2018, or $0.30 basic and diluted net loss per ordinary share. The increased loss was primarily attributable to the aforementioned $22.7 million non-cash loss associated with the conversion of convertible notes.


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About Stealth

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, collectively known as primary mitochondrial diseases, and are also involved in many common age-related diseases. We believe our lead product candidate, elamipretide, has the potential to treat both rare genetic and common age-related mitochondrial diseases. We are studying elamipretide in the following primary mitochondrial diseases: primary mitochondrial myopathy, Barth syndrome and Leber’s hereditary optic neuropathy. We are also studying elamipretide in dry age-related macular degeneration. Our other pipeline candidates include SBT-272, which we are evaluating for rare neurodegenerative disease indications, and SBT-20, which we are evaluating for rare peripheral neuropathies. We have optimized our discovery platform to identify novel mitochondrial-targeted compounds, which may be nominated as therapeutic product candidates or utilized as scaffolds to deliver other compounds to mitochondria. We have assembled a highly experienced management team, board of directors and group of scientific advisors to help us achieve our mission of leading mitochondrial medicine.

Forward-looking Statements

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, strategies and expectations for its preclinical and clinical advancement of its drug development programs, including its ongoing clinical trials of elamipretide and planned clinical trial of SBT-272; the potential benefits of Stealth BioTherapeutics’ product candidates; its key milestones for 2019; and its plans regarding future data presentations and regulatory interactions. 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; 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


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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 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.

Media Relations

dna Communications

Kate Contreras, 617-520-7088

Media@StealthBT.com

Investor Relations

Stern Investor Relations

Lauren Stival, 212-362-1200

IR@StealthBT.com

STEALTH BIOTHERAPEUTICS CORP

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

     Three Months Ended March 31,  
     2019     2018  

Operating expenses:

    

Research and development

   $ 14,328     $ 13,436  

General and administrative

     4,157       3,496  
  

 

 

   

 

 

 

Total operating expenses

     18,485       16,932  
  

 

 

   

 

 

 

Loss from operations

     (18,485     (16,932
  

 

 

   

 

 

 

Other income (expense):

    

Loss on extinguishment of debt

     (22,700     —    

Change in fair value of derivative liability

     2,782       (52

Change in fair value of warrant liability

     (300     (1

Interest expense

     (4,683     (3,378

Interest income

     208       22  
  

 

 

   

 

 

 

Total other income (expense), net

     (24,693     (3,409
  

 

 

   

 

 

 

Net loss attributable to ordinary shareholders

   $ (43,178   $ (20,341
  

 

 

   

 

 

 

Net loss per share attributable to ordinary shareholders — basic and diluted

   $ (0.20   $ (0.30
  

 

 

   

 

 

 

Weighted average ordinary shares used in net loss per share attributable to ordinary shareholders — basic and diluted

     220,035,294       68,474,614  
  

 

 

   

 

 

 


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STEALTH BIOTHERAPEUTICS CORP

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     March 31,      December 31,  
     2019      2018  

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 70,497      $ 10,855  

Prepaid expenses and other current assets

     1,597        2,438  
  

 

 

    

 

 

 

Total current assets

     72,094        13,293  
  

 

 

    

 

 

 

Property and equipment, net

     433        499  

Deferred offering costs

     —          1,325  

Other non-current assets

     331        406  
  

 

 

    

 

 

 

Total assets

   $ 72,858      $ 15,523  
  

 

 

    

 

 

 

Liabilities, convertible preferred shares and shareholders’ equity (deficit)

     

Current liabilities:

     

Accounts payable

   $ 9,605      $ 11,023  

Accrued expenses and other current liabilities

     11,726        13,826  

Accrued interest payable

     914        7,297  

Current portion of long-term debt

     4,235        8,465  
  

 

 

    

 

 

 

Total current liabilities

     26,480        40,611  
  

 

 

    

 

 

 

Long-term debt, less current portion

     12,455        10,317  

Convertible notes payable

     —          103,257  

Derivative liability

     —          36,567  

Warrant liability

     —          100  
  

 

 

    

 

 

 

Total liabilities

     38,935        190,852  

Series A convertible preferred shares

     —          211,377  

Total shareholders’ equity (deficit)

     33,923        (386,706
  

 

 

    

 

 

 

Total liabilities, convertible preferred shares and shareholders’ equity (deficit)

   $ 72,858      $ 15,523