Argos Therapeutics
Aug 9, 2017

Argos Therapeutics Reports Second Quarter 2017 Financial Results and Recent Operational Highlights

- Announced Continuation of the ADAPT Trial following Meeting with the FDA -

- Raised Gross Proceeds of $6.0 million in Secured Convertible Note Financing -

- Reported Positive Immunogenicity Data in AGS-004 Program for the Treatment of HIV -

DURHAM, N.C., Aug. 09, 2017 (GLOBE NEWSWIRE) -- Argos Therapeutics Inc. (NASDAQ:ARGS), an immuno-oncology company focused on the development and commercialization of individualized immunotherapies based on the Arcelis® precision immunotherapy technology platform, today reported financial results for the second quarter ended June 30, 2017 and provided an update on the Company's recent corporate and operational highlights.

"Despite what has clearly been a challenging period, Argos made substantial progress during the most recent quarter," stated Jeff Abbey, CEO of Argos Therapeutics. "First, we were pleased to have a constructive meeting with the FDA, which agreed with our decision to continue the Phase 3 ADAPT trial of Rocapuldencel-T for the treatment of metastatic renal cell carcinoma until we reach 290 events, the pre-specified number of events at which the analysis of overall survival, the primary endpoint, is to be conducted. We are grateful to our investigators and patients for their continued support of our efforts, and we look forward to our next planned analysis at 290 events, which we expect to occur during the first half of 2018."

"In addition, we are preparing a protocol amendment and a revised statistical analysis plan seeking to extend the final data analysis beyond 290 events, which the FDA has agreed to review. We believe that this extension would enable us to better account for the potential delayed treatment effect of Rocapuldencel-T. Also of note, Robert Figlin, MD, Professor and Chairman, Division of Hematology and Oncology at Cedars Sinai Medical Center, co-principal investigator of the ADAPT trial, will provide an overview of interim data from the ADAPT trial in an oral presentation at the European Society of Medical Oncology (ESMO) annual meeting to be held September 8 — 12 in Madrid."

"Second, we were pleased to report positive immunogenicity data in our development program for AGS-004 for the treatment of HIV, which is funded by the NIH and the NIAID. We look forward to results from the current trial, which is being conducted at the University of North Carolina, to assess the potential ability of AGS-004, in combination with vorinostat, a latency-reversing agent, to eradicate the HIV virus in adult patients. Despite several effective therapies for HIV, there is currently no agent capable of eradicating the virus."

"Finally, we were pleased to complete a $6.0 million secured convertible note financing with our collaborator and largest shareholder, Pharmstandard. In addition, we took significant steps during the quarter to reduce our expense structure, including a substantial reduction of our workforce. These measures, coupled with proceeds we have recently raised through our at-the-market issuance facility, have enabled us to extend our operational runway. "

Second Quarter 2017 and Recent Operational Highlights:

Selected Second Quarter 2017 Financial Results

Revenue for the three months ended June 30, 2017 was $70,000 compared to $489,000 for the same period in 2016. The decrease in revenue for the second quarter of 2017 compared with the second quarter of 2016 resulted from lower reimbursement under the Company's contract with the NIH and NIAID primarily related to the achievement of certain specified development milestones under the Company's AGS-004 program during 2016.

Research and development expense for the three months ended June 30, 2017 was $5.1 million compared to $9.2 million for the same period in 2016. The decrease in research and development expense for the second quarter of 2017 compared with the second quarter of 2016 was primarily due to the Company's decision to significantly reduce the size of its workforce engaged in research and development activities following the recommendation of the IDMC to discontinue the ADAPT trial.

General and administrative expense for the three months ended June 30, 2017 was $2.7 million compared to $3.4 million for the same period in 2016. The decrease in general and administrative expense for the second quarter of 2017 compared with the second quarter of 2016 was primarily due to reduced consulting and personnel costs.

Reflecting the factors noted above, net loss for the three months ended June 30, 2017 was $8.5 million compared to a net loss of $12.6 million for the same period in 2016.

Revenue for the six months ended June 30, 2017 was $175,000 compared to $635,000 for the same period in 2016. The decrease in revenue for the first half of 2017 compared with the first half of 2016 resulted from lower reimbursement under the Company's contract with the NIH and NIAID primarily related to the achievement of certain specified development milestones under the Company's AGS-004 program during 2016.

Research and development expense for the six months ended June 30, 2017 was $13.0 million compared to $18.7 million for the same period in 2016. The decrease in research and development expense for the first half of 2017 compared with the first half of 2016 was primarily due to reduced expenses associated with the Phase 3 ADAPT trial and the Company's decision to significantly reduce the size of its workforce engaged in research and development activities following the recommendation of the IDMC to discontinue the ADAPT trial.

General and administrative expense for the six months ended June 30, 2017 was $6.6 million compared to $6.4 million for the same period in 2016. The increase in general and administrative expense for the first half of 2017 compared with the first half of 2016 was primarily due to increased personnel costs.

Additionally, the Company incurred impairment charges of $27.2 million and restructuring charges of $5.4 million during the six months ended June 30, 2017 related to the Company's decision to discontinue preparation for commercial manufacturing and reduce the size of its workforce, which amounts were partially offset by a non-cash gain due to the decrease in the value of the warrant liability of $20.2 million.

Reflecting the factors noted above, net loss for the six months ended June 30, 2017 was $32.6 million compared to a net loss of $25.4 million for the same period in 2016.

As of June 30, 2017, cash and cash equivalents totaled $9.3 million.

About Argos Therapeutics
Argos Therapeutics is an immuno-oncology company focused on the development and commercialization of individualized immunotherapies for the treatment of cancer and infectious diseases using its Arcelis® technology platform. Argos' most advanced product candidate, Rocapuldencel-T, is being evaluated in the ADAPT Phase 3 clinical trial for the treatment of metastatic renal cell carcinoma (mRCC). In addition, Rocapuldencel-T is being studied in a Phase 2 investigator-initiated clinical trial as neoadjuvant therapy for renal cell carcinoma (RCC). Argos is also developing a separate Arcelis®-based product candidate, AGS-004, for the treatment of human immunodeficiency virus (HIV), which is currently being evaluated in combination with vorinostat, a latency-reversing drug, in an investigator-initiated Phase 2 clinical trial aimed at HIV eradication in adult patients. Funding for the development of AGS-004 has been provided by the National Institutes of Health, the National Institute of Allergy and Infectious Diseases, and the Collaboratory of Research for AIDS Eradication.

Forward Looking Statements
Any statements in this press release about Argos' future expectations, plans and prospects, including statements about Argos' financial prospects, future operations and sufficiency of funds for future operations, clinical development of Argos' product candidates, expectations regarding future clinical trials and FDA activities and future expectations and plans and prospects for Argos and other statements containing the words "believes," "anticipates," "estimates," "expects," "intends," "plans," "predicts," "projects," "targets," "may," "potential," "will," "would," "could," "should," "continue," and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including whether Argos' cash resources will be sufficient to fund its continuing operations for the period anticipated; whether preliminary or interim clinical data will be indicative of the final data from a clinical trial; whether results obtained in clinical trials will be indicative of results obtained in future clinical trials; whether Argos' product candidates will advance through the clinical trial process on a timely basis; whether the results of such trials will warrant submission for approval from the United States Food and Drug Administration or equivalent foreign regulatory agencies; whether Argos' product candidates will receive approval from regulatory agencies on a timely basis or at all; whether, if product candidates obtain approval, they will be successfully distributed and marketed; whether Argos can successfully establish commercial manufacturing operations on a timely basis or at all; and other factors discussed in the "Risk Factors" section of Argos' Form 10-Q for the quarter ended June 30, 2017, which is on file with the SEC, and in other filings Argos makes with the SEC from time to time. In addition, the forward-looking statements included in this press release represent Argos' views as of the date hereof. Argos anticipates that subsequent events and developments will cause Argos' views to change. However, while Argos may elect to update these forward-looking statements at some point in the future, Argos specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Argos' views as of any date subsequent to the date hereof.

 
ARGOS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   
 Three Months EndedSix Months Ended
 June 30,June 30,
 2017 201620172016
              
Revenue$69,693  $488,643 $174,952 $635,072 
              
Operating expenses    
Research and development 5,120,952   9,164,184  13,034,781  18,666,160 
General and administrative 2,679,867   3,389,479  6,642,758  6,364,503 
Impairment of property and equipment      27,204,349   
Restructuring costs 344,474     5,352,766   
              
Total operating expenses 8,145,293   12,553,663  52,234,654  25,030,663 
              
              
Operating loss (8,075,600)  (12,065,020) (52,059,702) (24,395,591)
              
              
Interest income 8,881   2,237  39,458  3,813 
              
Interest expense (294,329)  (543,462) (1,022,760) (1,034,655)
Gain on early extinguishment of debt      249,458   
Change in fair value of warrant liability (177,563)    20,179,761   
Other expense      (4,905)  
              
              
Net loss (8,538,611)  (12,606,245) (32,618,690) (25,426,433)
              
              
Net loss per share, basic and diluted$(0.21) $(0.48)$(0.79)$(1.04)
              
              
Weighted average shares outstanding, basic and diluted 41,374,852   26,066,160  41,344,356  24,336,393 


ARGOS THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 June 30,
   December 31,
 2017 2016
         
Assets  
Current assets  
Cash and cash equivalents$9,337,084  $52,973,376
Restricted cash  740,000   
Assets held for sale 10,341,529   1,452,172
Prepaid expenses and other current assets  1,473,666   1,076,246
         
Total current assets  21,892,279   55,501,794
Property and equipment, net  4,054,990   40,951,577
Restricted cash     740,000
Other assets  11,020   11,020
         
       
Total assets$25,958,289  $97,204,391
         
   
Liabilities and Stockholders' (Deficit) Equity  
Current liabilities  
Accounts payable $794,278  $5,377,377
Accrued expenses  7,385,997   9,980,891
Current portion of restructuring obligation  292,951   
Current portion of notes payable  17,871   11,475,480
Current portion of manufacturing research and development obligation 5,273,458   3,653,203
Current portion of facility and capital lease obligations 719,067   122,887
         
Total current liabilities 14,483,622   30,609,838
Convertible note payable to related party 6,015,616   
Long-term portion of notes payable 6,579,596   18,673,298
Long-term portion of manufacturing research and development obligation 3,070,463   4,509,033
Long-term portion of facility and capital lease obligations  8,967,426   9,592,966
Deferred liabilities  6,668,500   6,723,500
Warrants  746,300   20,926,061
Total stockholders' (deficit) equity (20,573,234)  6,169,695
         
       
Total liabilities and stockholders' (deficit) equity$25,958,289  $97,204,391


Media and investor contact: 
Richard Katz, MD, MBA
Chief Financial Officer 
Argos Therapeutics, Inc. 
919-287-6315 
rkatz@argostherapeutics.com