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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-4580525
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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200 West Street
Waltham, MA
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02451
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which
registered
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Common Stock, $0.001 par value
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NASDAQ Global Market
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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PART I
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PART II
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PART III
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PART IV
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·
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the timing of results of our ongoing and planned clinical trials for PRT-201;
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·
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our estimates regarding the amount of funds we require to complete our two planned Phase 3 clinical trials for PRT-201;
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·
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our estimates regarding the amount of funds required to fund operations into 2018;
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·
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our plans to fund our chemistry, manufacturing and controls;
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our estimates regarding expenses, future revenues, capital requirements, the sufficiency of our current and expected cash resources and our need for additional financing and plans for additional financing;
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·
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our estimate of when we will require additional funding;
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·
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our plans to commercialize and bring PRT-201 to market;
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·
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the timing of, and our ability to, obtain and maintain regulatory approvals for our product candidates, including PRT-201;
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·
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the timing of a clinical trial of PRT-201 in Europe, results and submission of a Marketing Authorization Application;
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·
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our interpretation of the data from our completed Phase 2 trial for PRT-201;
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·
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the rate and degree of market acceptance and clinical utility of any approved product candidate and the general market for the prevention of vascular access failure;
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·
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the potential benefits of strategic partnership agreements and our ability to enter into selective strategic partnership arrangements;
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·
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our ability to quickly and efficiently identify and develop additional product candidates;
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·
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our commercialization, marketing, distribution and manufacturing capabilities and strategy and expenses;
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·
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timing to recruit and expand our employee base and sales force, both in and outside the United States;
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·
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plans to initiate Phase 1 or Phase 1/2 trials in other indications;
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·
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the reimbursement of PRT-201;
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·
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our research and development expenses;
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·
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our general and administrative costs and salary and personnel costs;
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·
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the costs associated with preparation for commercial operations;
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·
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the costs associated with being a public company;
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·
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our intellectual property position;
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·
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our plans to seek patent protection in available countries;
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·
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our expectations that PRT-201 will qualify for a 12 year period of exclusivity;
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·
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our reliance on third parties as suppliers and manufactures;
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·
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our plans to build out compliance, financial and operating infrastructure after Phase 3 completion;
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·
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our plans to improve existing, and implement new, systems to manage our business;
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·
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future payment of dividends;
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·
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the impact of accounting policies;
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·
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the impact of changes in interest rates; and
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·
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exposure to foreign currency exchange risks.
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·
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Entering Phase 3 trials for radiocephalic AVF creation
.
We are conducting our first Phase 3 clinical trial and plan to conduct our second Phase 3 clinical trial in radiocephalic AVF creation using a 30 microgram dose of PRT-201, the population and dose in which, in a non-prespecified analysis, we observed an improvement in primary unassisted patency with PRT-201 in our Phase 2 trial.
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·
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Phase 3 endpoints same as our Phase 2 trial.
The primary endpoint in our Phase 3 trials, primary unassisted patency, will be the same as we used in our Phase 2 trial. In addition, our secondary endpoint (secondary patency) and tertiary endpoints (unassisted maturation, use for hemodialysis and average procedure rates) in our Phase 3 trials were all endpoints in our Phase 2 trial. In April 2013, we held an end of Phase 2 meeting with the FDA during which we confirmed elements of our Phase 3 development plan, including the primary endpoint.
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·
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Safety profile supports approval.
Based on results from our clinical trials and preclinical studies, we believe PRT-201, which is administered once and only acts locally, has demonstrated a favorable safety profile. Because PRT-201 is administered in a one-time, local application and is inactivated by antiproteases, substances that inhibit the activity of a protease, in the blood, there is no systemic activity. In clinical trials assessing safety, there were no material increases in adverse events in the PRT-201 treatment groups as compared to placebo and no material findings related to physical examinations or clinical laboratory testing including chemistry, hematology and coagulation panels or antibodies to PRT-201. At our end of Phase 2 meeting with the FDA, we confirmed that we do not need to conduct any additional preclinical studies to support a BLA filing.
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·
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Unmet medical need.
While AVFs are considered the most desirable form of vascular access by the medical community, they are also associated with high failure rates, a serious complication for hemodialysis patients that results in substantially higher healthcare costs. A 2014 publication estimated the total cost of managing hemodialysis vascular access dysfunction in the United States to be approximately $2.9 billion annually. We are not aware of any approved preventative treatments to reduce AVF failure rate. PRT-201 has received fast track designation from the FDA, which is designed to facilitate the development and possibly expedite the review of drugs and biologics to treat serious conditions and fill an unmet medical need. We believe PRT-201 reduces vascular access failure in patients with chronic kidney disease, or CKD, undergoing hemodialysis and, if approved, could become the standard of care by reducing the cycle of interventions, improving patient outcomes and reducing the overall burden on patients and the healthcare system.
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Substantial and readily-addressable market opportunity.
If PRT-201 is approved, we intend to commercialize this product in the United States and potentially certain European countries ourselves with a specialty hospital sales force, focused primarily on vascular surgeons, and intend to seek one or more collaborators to commercialize the product in additional markets. We estimate a sales force of approximately 75-100 representatives will enable us to call on the approximately 1,300 hospitals that account for more than 90% of the AVF surgical creations performed in the United States annually. We believe PRT-201 will be supported by key stakeholders, including referring nephrologists, patient advocacy groups, large dialysis organizations and payors. We believe PRT-201 will be reimbursed adequately as costs related to AVF surgical creation, which is typically performed in the hospital outpatient setting, are not included in the ESRD bundle, the single bundled payment from Medicare for a number of the costs of hemodialysis treatments, medications, labs and supplies for patients with end-stage renal disease.
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·
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Experienced team.
Our executive management team has extensive experience in the renal and vascular disease fields through their substantial involvement in companies such as Abbott, GelTex, Genzyme, Glaxo and Merck. Our Chief Executive Officer and Chief Medical Officer were senior executives at GelTex, a biopharmaceutical company, where they played leading roles in the development and commercialization of Renagel, a treatment for hemodialysis patients that led to Genzyme's acquisition of GelTex for more than $1 billion.
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·
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Complete clinical development of PRT-201 and seek regulatory approval in the United States in its lead indication.
We commenced our first Phase 3 clinical trial of PRT-201 for patients with CKD undergoing creation of a radiocephalic AVF in the third quarter of 2014. Prior to completing enrollment in the first Phase 3 trial, we will initiate our second Phase 3 trial in the second quarter of 2015. If the results of the first Phase 3 trial are sufficiently compelling, we intend to meet with the FDA to discuss the possibility of submitting a BLA supported by the single Phase 3 trial and may decide to submit a BLA to the FDA prior to completing the second Phase 3 trial.
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·
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Commercialize PRT-201 directly in the United States.
If PRT-201 is approved by the FDA, we intend to commercialize it ourselves in the United States with a specialty hospital sales force focused primarily on vascular surgeons. There are approximately 2,800 vascular surgeons in the United States. In 2012, according to the U.S. Renal Data System 2014 Annual Data Report, there were approximately 409,000 hemodialysis patients in the United States at the end of the year. Based on various third-party sources, we estimate that approximately 130,000 AVFs are placed annually. We believe a specialty hospital sales force of approximately 75-100 representatives will enable us to call on the approximately 1,300 hospitals that account for more than 90% of the AVF surgical creations performed in the United States annually. We believe that PRT-201's potential benefits to patients undergoing surgical creation of an AVF will result in its broad adoption.
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·
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Undertake clinical development of PRT-201 in Europe and establish partnerships for commercialization of PRT-201 in all or parts of Europe.
We are currently evaluating our existing clinical program to support filing in Europe. We may, based on additional data including the data from our Phase 3 clinical trials in the United States and if sufficient funds become available, choose to conduct a clinical trial of PRT-201 in Europe. We estimate that there are approximately 315,000 hemodialysis patients in Europe. Prior to enrolling our first patient in Europe, we plan to formally seek guidance from the European Medicines Agency, or EMA, regarding its requirements for regulatory approval. We expect results from this trial to be available two to three years after the first patient is enrolled. If this European trial successfully meets its primary endpoint and depending on the guidance obtained from the EMA, we would expect to submit a Marketing Authorization Application, or MAA. If PRT-201 is approved by the EMA, we intend to commercialize it in European countries with our own specialty hospital sales force or with a commercial partner, or a combination thereof. Like in the United States, we intend to target both vascular surgeons who create AVFs as well as key referring nephrologists.
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·
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Pursue additional indications for PRT-201.
We believe that our Phase 2 clinical data support further development of PRT-201 in brachiocephalic AVF creation. We may, based on additional data including the data from our Phase 3 clinical trials and if sufficient funds become available, study the effects of a 30 microgram dose of PRT-201 versus placebo on brachiocephalic AVFs. If this trial were to successfully meet its primary endpoint, we would expect to submit a supplemental BLA, or sBLA, to the FDA and a supplemental MAA, or sMAA, to the EMA. Further, if sufficient funds become available and after reviewing the results from our Phase 3 clinical trials, we may commence a clinical trial of PRT-201 in patients undergoing placement of an arteriovenous graft, or AVG. We believe PRT-201's potential to reduce neointimal hyperplasia could offer a significant medical benefit in these patients.
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·
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Establish partnerships for development and commercialization of PRT-201 in Japan and other Asian countries.
We estimate that in 2013 there were approximately 315,000 patients on hemodialysis in Japan and more than 800,000 throughout all of Asia. Approximately 90% of Japanese hemodialysis patients receive AVFs. We may enter into collaborations for the development and commercialization of PRT-201 in Asia.
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·
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In-license or acquire additional product opportunities.
We plan to search for additional product opportunities that could be sold and marketed by the specialty hospital sales force required to successfully launch PRT-201 in the United States if it is approved for marketing.
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·
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radiocephalic AVF at the wrist (radial artery sutured to cephalic vein), which we estimate is created in 40% of new AVF creations;
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·
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brachiocephalic AVF at the elbow (brachial artery sutured to cephalic vein), which we estimate is created in 50% of new AVF creations; and
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·
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brachiobasilic AVF in the upper arm (brachial artery sutured to basilic vein), which we estimate is created in 10% of new AVF creations.
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·
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The procedures are not always successful in restoring patency.
Procedures to address AVF patency loss are unsuccessful up to 27% of the time. When these procedures are unsuccessful or the physician determines that a procedure to restore patency is futile, the access site must be abandoned, resulting in the urgent need for catheter placement to enable hemodialysis. Recent data indicate that hemodialysis patients who switch from a permanent vascular access to a catheter have a mortality rate that is double those who remain on a permanent access. Access abandonment also results in surgical creation of a new AVF or placement of a new AVG, reducing the number of future access sites available to the patient.
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·
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The procedures often fail to provide a durable benefit, resulting in a cycle of interventions for the patient.
Recent data indicate that 50% of AVFs that undergo angioplasty to treat patency loss experience another episode of patency loss within 12 months, resulting in the need for additional procedures to restore patency. AVF patients in the United States on average require greater than 1.5 procedures per year, each of which typically costs Medicare between $5,000 and $13,000. A United States hospital recently published data indicating that maintaining a radiocephalic AVF can cost on average more than $17,000 in the first year after surgical creation and in excess of $40,000 for the first and second year after surgical creation. A 2014 publication estimated the total cost of managing vascular access dysfunction in the United States to be approximately $2.9 billion annually.
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PRT-201
10 microgram
dose
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PRT-201
30 microgram
dose
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Number of Patients
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N=51
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N=49
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Unadjusted Risk vs. Placebo
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-31% (p=0.19)
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-33% (p=0.17)
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Adjusted Risk(1) vs. Placebo
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-24% (p=0.35)
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-41% (p=0.10)
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PRT-201
10 micrograms
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PRT-201
30 micrograms
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Number of Patients
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N=23
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N=20
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Unadjusted Risk vs. Placebo
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-41% (p=0.18)
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-63% (p=0.02)
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Adjusted Risk(1) vs. Placebo
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-40% (p=0.20)
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-61% (p=0.04)
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PRT-201
10 micrograms
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PRT-201
30 micrograms
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|||
Number of Patients
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N=28
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N=29
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Unadjusted Risk vs. Placebo
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-14% (p=0.72)
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+10% (p=0.82)
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Unadjusted Risk vs. Placebo Excluding Central Stenoses
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-12% (p=0.76)
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-26% (p=0.46)
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PRT-201
10 micrograms
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PRT-201
30 micrograms
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Number of Patients
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N=51
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N=49
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Unadjusted Risk vs. Placebo
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-31% (p=0.20)
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-48% (p=0.04)
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Adjusted Risk vs. Placebo(1)
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-25% (p=0.33)
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-52% (p=0.02)
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·
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Unassisted maturation
.
Maturation is necessary for use of an AVF for hemodialysis. Unassisted maturation was defined as achieving maturation at three months without an intervention. Maturation was assessed using ultrasound measuring blood flow and lumen vein diameter. All ultrasounds were reviewed by a central reader masked to treatment assignment and AVF outcome. Two well-accepted criteria for measuring maturation were used, as shown in the footnotes in the table below. The 30 microgram dose, which we intend to study in our Phase 3 trials, showed improvement in maturation at Month 3, with statistically significant benefit seen in all AVFs combined and patients receiving radiocephalic AVFs (figure below). In the subset of patients with brachiocephalic AVFs, there was a trend toward improvement in unassisted maturation at both the 10 and 30 microgram doses.
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Placebo
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PRT-201
10 micrograms
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PRT-201
30 micrograms
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All AVFs
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||||||
Number of Patients
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N=39
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N=39
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N=37
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Percentage Mature NKF-KDOQI(1)
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46%
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64% (p=0.11)
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70% (p=0.03)
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Percentage Mature Robbin(2)
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67%
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87% (p=0.03)
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92% (p<0.01)
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Radiocephalic AVFs
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Number of Patients
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N=17
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N=19
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N=14
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Percentage Mature NKF-KDOQI(1)
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24%
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37% (p=0.48)
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57% (p=0.08)
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Percentage Mature Robbin(2)
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47%
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74% (p=0.17)
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93% (p<0.01)
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Brachiocephalic AVFs
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Number of Patients
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N=22
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N=20
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N=23
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Percentage Mature NKF-KDOQI(1)
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64%
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90% (p=0.07)
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78% (p=0.34)
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Percentage Mature Robbin(2)
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82%
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100% (p=0.11)
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91% (p=0.41)
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·
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The average rate of procedures to restore or maintain patency per patient year at risk.
Patients undergoing a procedure often require repeated procedures over time because procedures such as balloon angioplasty can restore blood flow acutely but also damage the blood vessel. These data can be expressed as a procedure rate calculated as the number of days in which a procedure to restore or maintain patency was performed per patient divided by the patient's time on the trial. Procedures included thrombectomy, angioplasty, stent deployment and surgical revision. In a prespecified analysis, there was a 56% reduction in the rate of procedures in the 30 microgram group versus the placebo group. In the radiocephalic non-prespecified subset there was a 69% reduction in the average rate of procedures in the 30 microgram group versus the placebo group. In the brachiocephalic non-prespecified subset there was a 43% reduction in the average rate of procedure in the 30 microgram group versus the placebo group. Excluding procedures to treat central stenosis, through a non-prespecified analysis, in the brachiocephalic subset there was an 86% reduction in the average rate of procedures in the 30 microgram group versus the placebo group.
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Placebo
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PRT-201
10 micrograms
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PRT-201
30 micrograms
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All AVFs (Prespecified)
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Number of Patients
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N=51
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N=50
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N=48
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Procedures per Year
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0.9
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0.8 (p=0.53)
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0.4 (p=0.07)
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All AVFs Excluding Central Stenoses (Non-prespecified)
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Number of Patients
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N=51
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N=50
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N=48
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Procedures per Year
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0.8
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0.7 (p=0.44)
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0.2 (p<0.01)
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Radiocephalic AVFs (Non-prespecified)
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Number of Patients
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N=24
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N=23
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N=20
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Procedures per Year
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1.0
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0.8 (p=0.63)
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0.3 (p=0.06)
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Brachiocephalic AVFs (Non-prespecified)
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Number of Patients
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N=27
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N=27
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N=28
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Procedures per Year
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0.7
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0.7 (p=0.72)
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0.4 (p=0.50)
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Brachiocephalic AVFs Excluding Central Stenoses (Non-prespecified)
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Number of Patients
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N=27
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N=27
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N=28
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Procedures per Year
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0.7
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0.7 (p=0.54)
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0.1 (p=0.07)
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Placebo
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PRT-201
10 micrograms
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PRT-201
30 micrograms
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All AVFs (Prespecified analysis)
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Number of Patients
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N=51
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N=50
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N=48
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Procedures per Year
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0.8
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0.8 (p=0.61)
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0.3 (p=0.03)
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Radiocephalic AVFs (Non-prespecified analysis)
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||||||
Number of Patients
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N=24
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N=23
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N=20
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Procedures per Year
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1.0
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0.8 (p=0.47)
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0.2 (p=0.03)
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Brachiocephalic AVFs (Non-prespecified analysis)
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||||||
Number of Patients
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N=27
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N=27
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N=28
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Procedures per Year
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0.7
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0.8 (p=1.00)
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0.4 (p=0.40)
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·
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Secondary patency.
Secondary patency loss was defined as abandonment of the AVF, which typically occurs following loss of primary unassisted patency due to thrombosis or failure of a procedure to restore patency and leads to additional surgery to create a new vascular access. We observed no significant differences in the risk of secondary patency loss in the overall AVF population or the non-prespecified subset of patients receiving brachiocephalic AVFs. However, as seen in the Kaplan-Meier curves and table below, a trend toward prolonged secondary patency was seen in patients receiving radiocephalic AVFs. In this non-prespecified subset analysis, treatment with PRT-201 at doses of 10 and 30 micrograms was associated with reductions of 55% and 73%, respectively, in the risk of secondary patency loss.
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PRT-201
10 microgram dose
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PRT-201
30 microgram dose
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Number of Patients
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N=23
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N=20
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Unadjusted Risk vs. Placebo
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-55% (p=0.19)
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-73% (p=0.08)
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·
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Use for hemodialysis
.
Use was defined as use of the AVF for hemodialysis at any time without a previous intervention. Although the results were not statistically significant, there was a trend to more patients using the AVF for hemodialysis in the 30 microgram group (69%) compared with the placebo group (53%).
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·
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Hemodynamically significant lumen stenosis
.
Hemodynamically significant lumen stenosis, or narrowing of blood vessels, impairs AVF maturation and contributes to AVF patency loss. Hemodynamically significant lumen stenosis was defined as a 50% or greater stenosis and a significant elevation in peak blood flow velocity across the stenosis detected by ultrasound. Ultrasounds were performed using a standard protocol and reviewed by a central reader masked to treatment assignment and AVF outcome. Although the results were not statistically significant, there was a trend to fewer patients with a hemodynamically significant lumen stenosis in the patients receiving 10 micrograms (30%) and 30 micrograms (39%) of PRT-201 compared with the placebo group (51%) at 6 weeks. Detecting hemodynamically significant lumen stenosis is technically challenging and often confounded by the performance of procedures, such as angioplasty to treat stenosis prior to the ultrasound examination.
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N (%)
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Placebo
N=51
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PRT-201
10 micrograms
N=51
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PRT-201
30 micrograms
N=49
|
|||||||
Any adverse event
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42 (82
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)
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39 (77
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)
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43 (88
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)
|
||||
AVF thrombosis
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13 (26
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)
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8 (16
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)
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7 (14
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)
|
||||
Venous stenosis
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10 (20
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)
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7 (14
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)
|
8 (16
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)
|
||||
Steal syndrome
|
7 (14
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)
|
2 (4
|
)
|
6 (12
|
)
|
||||
Hypoesthesia
|
7 (14
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)
|
6 (12
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)
|
6 (12
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)
|
||||
AVF incisional pain
|
5 (10
|
)
|
9 (18
|
)
|
9 (18
|
)
|
||||
AVF site complication
|
5 (10
|
)
|
4 (8
|
)
|
4 (8
|
)
|
||||
Nausea
|
5 (10
|
)
|
1 (2
|
)
|
2 (4
|
)
|
||||
Peripheral edema
|
5 (10
|
)
|
0 (0
|
)
|
2 (4
|
)
|
||||
Arterial stenosis
|
4 (8
|
)
|
5 (10
|
)
|
0 (0
|
)
|
||||
Paresthesia
|
1 (2
|
)
|
1 (2
|
)
|
5 (10
|
)
|
||||
Pain in extremity(2)
|
0 (0
|
)
|
1 (2
|
)
|
5 (10
|
)
|
·
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preclinical laboratory tests, animal studies, and formulation studies, all performed in accordance with the FDA's Good Laboratory Practice, or GLP, regulations;
|
·
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submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials may begin and must be updated annually;
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·
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adequate and well-controlled human clinical trials to establish the safety and efficacy of the drug or biologic for each indication to FDA's satisfaction;
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·
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submission to the FDA of a BLA;
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·
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satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug or biologic is produced to assess compliance with current good manufacturing practices or, cGMP, regulations; and
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·
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FDA review and approval of the BLA.
|
·
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Decentralized procedure.
Using the decentralized procedure, an applicant may apply for simultaneous authorization in more than one European Union country of a medicinal product that has not yet been authorized in any European Union country and that does not fall within the mandatory scope of the centralized procedure.
|
·
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Mutual recognition procedure.
In the mutual recognition procedure, a medicine is first authorized in one European Union Member State, in accordance with the national procedures of that country. Thereafter, further marketing authorizations can be sought from other European Union countries in a procedure whereby the countries concerned agree to recognize the validity of the original, national marketing authorization.
|
•
|
continue our clinical development and seek regulatory approval of PRT-201, particularly with respect to its lead indication for radiocephalic AVFs;
|
•
|
commercialize PRT-201 directly in the United States;
|
•
|
undertake clinical development of PRT-201 in Europe and establish partnerships for commercialization of PRT-201 in all or parts of Europe;
|
•
|
pursue additional indications for PRT-201 including clinical development of PRT-201 for brachiocephalic AVFs, patients requiring placement of an AVG and peripheral artery disease, or PAD;
|
•
|
in-license or acquire additional product opportunities and make milestone or other payments under any in-license agreements;
|
•
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contracting for the manufacture of commercial quantities of PRT-201;
|
•
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establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;
|
•
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maintain, protect and expand our intellectual property portfolio;
|
•
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attract and retain skilled personnel;
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•
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create additional infrastructure to support our operations as a public company and our product development and planned future; and
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•
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experience any delays or encounter issues with any of the above.
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•
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completing clinical development of PRT-201 for one or more indications and research and preclinical and clinical development of additional product candidates;
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•
|
seeking and obtaining regulatory and marketing approvals for PRT-201 if and when we complete clinical trials;
|
•
|
establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products and services to support clinical development and the market demand for PRT-201, if approved;
|
•
|
launching and commercializing PRT-201 if we obtain regulatory and marketing approval, either by collaborating with a partner or, if launched independently, by establishing our own sales, marketing and distribution infrastructure;
|
•
|
obtaining and maintaining adequate coverage and reimbursement from third-party payors for PRT-201;
|
•
|
obtaining market acceptance of PRT-201 as a viable treatment option;
|
•
|
addressing any competing technological and market developments;
|
•
|
implementing additional internal systems and infrastructure, as needed;
|
•
|
identifying and validating new product candidates;
|
•
|
negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;
|
•
|
maintaining, protecting and expanding our portfolio of intellectual property rights, including patents and know-how;
|
•
|
developing PRT-201 such that, if approved, it can be commercialized without infringing the intellectual property rights of third parties; and
|
•
|
attracting, hiring and retaining qualified personnel.
|
•
|
launch commercial sales of PRT-201, whether alone or in collaboration with others;
|
•
|
create market demand for PRT-201 through our own marketing and sales organization, and through any other promotional arrangements that we may otherwise establish;
|
•
|
hire, train and deploy a specialty hospital sales force, focused primarily on vascular surgeons, to commercialize PRT-201 in the United States;
|
•
|
manufacture PRT-201 in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter and establish and maintain agreements with wholesalers, distributors and group purchasing organizations on commercially reasonable terms;
|
•
|
create partnerships with third parties to promote and sell PRT-201 in any foreign markets where we receive marketing approval;
|
•
|
obtain and maintain patent protection and regulatory exclusivity for PRT-201;
|
•
|
achieve appropriate reimbursement for PRT-201;
|
•
|
effectively compete with other products; and
|
•
|
maintain a continued acceptable safety profile of PRT-201 following launch.
|
•
|
be delayed in obtaining marketing approval for PRT-201 or any additional product candidates;
|
•
|
not obtain marketing approval at all;
|
•
|
obtain approval for indications or patient populations that are not as broad as we intended or desired;
|
•
|
obtain approval with labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings;
|
•
|
be subject to additional post-marketing testing or other requirements; or
|
•
|
be required to remove the product from the market after obtaining marketing approval.
|
•
|
the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;
|
•
|
we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indications;
|
•
|
FDA Advisory Committee or other regulatory authority may recommend non-approval or restrictions on approval;
|
•
|
the results of later-stage clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory authorities for approval;
|
•
|
the results of later-stage clinical trials may not confirm the positive results from earlier preclinical studies or clinical trials;
|
•
|
we may be unable to demonstrate that a product candidate's clinical and other benefits outweigh its safety risks;
|
•
|
the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;
|
•
|
the data collected from clinical trials of PRT-201 or any additional product candidate may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a BLA, or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere;
|
•
|
our manufacturing processes or facilities may not be adequate to support approval of our product candidates; or
|
•
|
regulatory agencies may change their approval policies or adopt new regulations in a manner rendering our clinical data insufficient for approval.
|
•
|
severity of the disease under investigation;
|
•
|
design of the trial protocol;
|
•
|
size and nature of the patient population;
|
•
|
eligibility criteria for the trial in question;
|
•
|
perceived risks and benefits of the product candidate under study;
|
•
|
proximity and availability of clinical trial sites for prospective patients;
|
•
|
availability of competing therapies and clinical trials;
|
•
|
efforts to facilitate timely enrollment in clinical trials;
|
•
|
our ability to obtain and maintain subject consents;
|
•
|
patient referral practices of physicians; and
|
•
|
ability to monitor patients adequately during and after treatment.
|
•
|
trials of PRT-201 or any additional product candidates may produce unfavorable or inconclusive results;
|
•
|
we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;
|
•
|
our third-party contractors, including those manufacturing PRT-201 or any additional product candidates or components or ingredients for commercial use or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner or at all;
|
•
|
regulators or institutional review boards may not authorize us or our investigators to commence or continue to conduct a clinical trial at a prospective trial site;
|
•
|
we may have to suspend or terminate clinical trials of PRT-201 or any additional product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of a product candidate;
|
•
|
regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or their respective standards of conduct, a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of the product candidate or findings of undesirable effects caused by a chemically or mechanistically similar biologic or biologic candidate;
|
•
|
we may experience delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and/or Contract Research Organizations;
|
•
|
we may experience withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care or the ineligibility of a site to participate in our clinical trials, and may further be delayed in trying to add clinical trial sites to our studies; or
|
•
|
we may experience delays in the importation and manufacture of clinical supply;
|
•
|
patient enrollment in these clinical trials may be slower than we anticipate and is limited to a select number of sites, which could cause significant delays given the prolonged enrollment period;
|
•
|
participants may drop out of clinical trials of PRT-201 at a higher rate than we anticipate and we may not be able to obtain the follow up data for the 12 month period planned in our Phase 3 trials;
|
•
|
patients who enroll in a clinical trial may misrepresent their eligibility to do so or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the clinical trial or increase the needed enrollment size for the clinical trial beyond the 300 proposed for each Phase 3 trial, all of which may extend the clinical trial's duration;
|
•
|
the FDA or comparable foreign regulatory authorities may disagree with our clinical trial design, implementation, or our interpretation of data from preclinical studies and clinical trials;
|
•
|
FDA or comparable foreign regulatory authorities may find that our clinical trials were not conducted in accordance with GCPs;
|
•
|
the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for clinical and commercial supplies;
|
•
|
our finished product that has been manufactured for the PRT-201 Phase 3 trials may be inadequate, or the materials or manufactured product candidates necessary to conduct future clinical trials of PRT-201 or any additional product candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;
|
•
|
we may lack adequate funding to continue the clinical trials or to pay FDA's substantial user fees; and
|
•
|
the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient to obtain marketing approval.
|
•
|
restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials;
|
•
|
restrictions on a products' manufacturing processes;
|
•
|
restrictions on the marketing of a product;
|
•
|
restrictions on product distribution;
|
•
|
requirements to conduct post-marketing clinical trials;
|
•
|
Untitled, Cyber, or Warning Letters from the FDA or similar correspondence from comparable regulatory authorities;
|
•
|
withdrawal of the products from the market;
|
•
|
refusal to approve pending applications or supplements to approved applications that we submit;
|
•
|
recall of products;
|
•
|
mandated modifications to promotional materials or require us to provide corrective information to healthcare practitioners;
|
•
|
requirements to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;
|
•
|
debarring us pursuant to the FDCA, excluding us from participation in federal healthcare programs, requiring a corporate integrity agreement or debarring us from government contracts;
|
•
|
the imposition of costly new manufacturing requirements or use of alternative suppliers, requiring additional warnings on the label;
|
•
|
FDA or other regulatory bodies issuing safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings about our products;
|
•
|
fines, restitution or disgorgement of profits or revenue;
|
•
|
suspension or withdrawal of regulatory approvals or refusal to approve future or pending applications or supplements;
|
•
|
refusal to permit the import or export of our products;
|
•
|
product seizure;
|
•
|
injunctions; and/or
|
•
|
imposition of civil or criminal penalties.
|
•
|
difficulty in establishing or managing relationships with contract research organizations, or CROs, and physicians;
|
•
|
different standards for the conduct of clinical trials;
|
•
|
our inability to locate qualified local consultants, physicians and partners;
|
•
|
the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical and biotechnology products and treatment; and
|
•
|
the acceptability of data obtained from trials conducted outside the United States to the FDA in support of a BLA.
|
•
|
our inability to recruit, train, manage and retain adequate numbers of effective sales and marketing personnel;
|
•
|
the inability of sales personnel to obtain access to vascular surgeons or persuade adequate numbers of vascular surgeons to use PRT-201 or any additional product candidates;
|
•
|
our inability to effectively oversee a geographically dispersed sales and marketing team;
|
•
|
the costs associated with training sales personnel on legal compliance matters and monitoring their actions;
|
•
|
liability for sales personnel failing to comply with the applicable legal requirements; and
|
•
|
unforeseen costs and expenses associated with creating an independent sales and marketing organization.
|
•
|
perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of our products, and their advantages as compared to any competitive products;
|
•
|
the timing of market introduction of the product candidate as well as competitive products;
|
•
|
the clinical indications for which the product candidate is approved;
|
•
|
any restrictions on or warnings regarding the use of the products;
|
•
|
cost-effectiveness of our products relative to any competing products;
|
•
|
availability of coverage and reimbursement for our products from government or other third-party payors; and
|
•
|
effectiveness of marketing and distribution efforts by us and any our licensees and distributors.
|
•
|
failure to negotiate manufacturing agreements with third parties under commercially reasonable terms;
|
•
|
reduced day-to-day control over the manufacturing process for our product candidates as a result of using third-party manufacturers for all aspects of manufacturing activities;
|
•
|
reduced control over the protection of our trade secrets and know-how from misappropriation or inadvertent disclosure;
|
•
|
termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that may be costly or damaging to us or result in delays in the development or commercialization of our product candidates; and
|
•
|
disruptions to the operations of our third-party manufacturers or suppliers caused by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier.
|
•
|
any of our patents or pending patent applications, if issued, will include claims having a scope sufficient to protect PRT-201 or any additional product candidates;
|
•
|
any of our pending patent applications will issue as patents at all;
|
•
|
we will be able to successfully commercialize product candidates, if approved, before our relevant patents expire;
|
•
|
we were the first to make the inventions covered by each of our patents and pending patent applications;
|
•
|
we were the first to file patent applications for these inventions;
|
•
|
others will not develop similar or alternative technologies that do not infringe our patents;
|
•
|
others will not use pre-existing technology to effectively compete against us;
|
•
|
any of our patents will be found ultimately to be valid and enforceable;
|
•
|
any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties;
|
•
|
we will develop additional proprietary technologies or product candidates that are separately patentable; or
|
•
|
that our commercial activities or products will not infringe the patents or proprietary rights of others.
|
•
|
we might not have been the first to make the inventions covered by a patent or pending patent application that we own;
|
•
|
we might not have been the first to file patent applications covering an invention;
|
•
|
others may independently develop similar or alternative technologies without infringing our intellectual property rights;
|
•
|
third parties may compete with us in jurisdictions where we do not pursue and obtain patent protection;
|
•
|
pending patent applications that we own may not lead to issued patents;
|
•
|
patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable;
|
•
|
third parties may assert an ownership interest in our intellectual property;
|
•
|
we may not develop or in-license additional proprietary technologies that are patentable; and
|
•
|
the patents or proprietary rights of others may have an adverse effect on our business.
|
•
|
manage our clinical trials and the regulatory process effectively;
|
•
|
manage the manufacturing of product candidates and potential products for clinical and commercial use;
|
•
|
integrate current and additional management, administrative, financial and sales and marketing personnel;
|
•
|
develop a marketing and sales infrastructure;
|
•
|
hire new personnel necessary to effectively commercialize PRT-201 and any additional product candidates;
|
•
|
develop our administrative, accounting and management information systems and controls; and
|
•
|
hire and train additional qualified personnel.
|
•
|
reduced resources of our management to pursue our business strategy;
|
•
|
decreased demand for our product candidates or products that we may develop;
|
•
|
injury to our reputation and significant negative media attention;
|
•
|
withdrawal of clinical trial participants;
|
•
|
termination of clinical trial sites or entire trial programs;
|
•
|
initiation of investigations by regulators;
|
•
|
product recalls, withdrawals or labeling, marketing or promotional restrictions;
|
•
|
significant costs to defend resulting litigation;
|
•
|
diversion of management and scientific resources from our business operations;
|
•
|
substantial monetary awards to trial participants or patients;
|
•
|
loss of revenue; and
|
•
|
the inability to commercialize any products that we may develop.
|
•
|
an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;
|
•
|
increases in the statutory minimum rebates a manufacturer must pay as a condition to having a drug or biologic available for coverage under the Medicaid program;
|
•
|
expansion of healthcare fraud and abuse laws, including the federal False Claims Act and the federal Anti-Kickback Statute, and the addition of new government investigative powers and enhanced penalties for non-compliance;
|
•
|
extension of a manufacturer's Medicaid rebate liability to covered drugs and biologics dispensed to individuals who are enrolled in Medicaid managed care organizations;
|
•
|
expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new eligibility categories for certain individuals with income at or below 133% of the federal poverty level beginning in 2014, thereby potentially increasing a manufacturer's Medicaid rebate liability;
|
•
|
expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
|
•
|
new requirements under the federal Open Payments program and its implementing regulations;
|
•
|
a new requirement to annually report drug and biologic samples that manufacturers and distributors provide to physicians;
|
•
|
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and
|
•
|
a special Medicare Part B payment rate for biosimilars that favors them over the reference biological product.
|
•
|
our failure to develop and commercialize PRT-201 or any additional product candidates;
|
•
|
actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
|
•
|
changes in the market's expectations about our operating results;
|
•
|
adverse results or delays in preclinical studies or clinical trials;
|
•
|
our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;
|
•
|
adverse regulatory decisions, including failure to receive regulatory approval for PRT-201 or any additional product candidates;
|
•
|
success of competitive products;
|
•
|
adverse developments concerning our collaborations and our manufacturers;
|
•
|
inability to obtain adequate product supply for any product candidate for clinical trials or commercial sale or inability to do so at acceptable prices;
|
•
|
the termination of a collaboration or the inability to establish additional collaborations;
|
•
|
unanticipated serious safety concerns related to the use of any of PRT-201 or any additional product candidates;
|
•
|
our ability to effectively manage our growth;
|
•
|
the size and growth, if any, of the targeted market;
|
•
|
our operating results failing to meet the expectation of securities analysts or investors in a particular period or failure of securities analysts to publish reports about us or our business;
|
•
|
changes in financial estimates and recommendations by securities analysts concerning our company, our market opportunity, or the biotechnology and pharmaceutical industries in general;
|
•
|
operating and stock price performance of other companies that investors deem comparable to us;
|
•
|
overall performance of the equity markets;
|
•
|
announcements by us or our competitors of acquisitions, new product candidates or programs, significant contracts, commercial relationships or capital commitments;
|
•
|
our ability to successfully market PRT-201 or any additional product candidates;
|
•
|
changes in laws and regulations affecting our business, including but not limited to clinical trial requirements for approvals;
|
•
|
disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for PRT-201 or any additional product candidates;
|
•
|
commencement of, or involvement in, litigation involving our company, our general industry, or both;
|
•
|
changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
|
•
|
the volume of shares of our common stock available for public sale;
|
•
|
additions or departures of key scientific or management personnel;
|
•
|
any major change in our board or management;
|
•
|
changes in accounting practices;
|
•
|
ineffectiveness of our internal control over financial reporting;
|
•
|
sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and
|
•
|
general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
|
•
|
authorize "blank check" preferred stock, which could be issued by our Board of Directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;
|
•
|
create a classified Board of Directors whose members serve staggered three-year terms;
|
•
|
specify that special meetings of our stockholders can be called only by our Board of Directors;
|
•
|
prohibit stockholder action by written consent;
|
•
|
establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our Board of Directors;
|
•
|
provide that our directors may be removed only for cause;
|
•
|
provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum;
|
•
|
specify that no stockholder is permitted to cumulate votes at any election of directors;
|
•
|
expressly authorize our Board of Directors to modify, alter or repeal our amended and restated bylaws; and
|
•
|
require supermajority votes of the holders of our common stock to amend specified provisions of our amended and restated certificate of incorporation and amended and restated bylaws.
|
Year Ended
December 31, 2014
|
||||||||
High
|
Low
|
|||||||
Fourth Quarter (from and after October 22, 2014)
|
$ | 12.00 | $ | 8.57 |
10/22/2014
|
10/31/2014
|
11/30/2014
|
12/31/2014
|
|||||||||||||
Proteon Therapeutics
|
$ | 100.00 | $ | 99.70 | $ | 105.11 | $ | 103.69 | ||||||||
Nasdaq Composite Index
|
$ | 100.00 | $ | 107.41 | $ | 110.12 | $ | 110.06 | ||||||||
Nasdaq Biotechnology Index
|
$ | 100.00 | $ | 105.68 | $ | 109.54 | $ | 108.34 |
Plan category
|
Number of securities
to be issued upon
exercise of
outstanding stock
options, warrants and
rights
|
Weighted-
average exercise
price of
outstanding
options,
warrants and
rights
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a))
|
|||||||||
Equity compensation plans approved by security holders (1)
|
1,234,788 | $ | 4.19 | 571,853 | ||||||||
Equity compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
1,234,788 | $ | 4.19 | 571,853 |
(1)
|
Includes information regarding our Amended and Restated 2006 Equity Incentive Plan.
|
Proteon Therapeutics, Inc.
|
||||||||||||
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
(in thousands, except share and per share data)
|
||||||||||||
Revenue
|
$ | 2,948 | $ | - | $ | - | ||||||
Operating expenses:
|
||||||||||||
Research and development
|
6,432 | 3,994 | 5,907 | |||||||||
General and administrative
|
4,096 | 3,128 | 2,089 | |||||||||
Total operating expenses
|
10,528 | 7,122 | 7,996 | |||||||||
Loss from operations
|
(7,580 | ) | (7,122 | ) | (7,996 | ) | ||||||
Other income (expense):
|
||||||||||||
Investment income
|
24 | 4 | 20 | |||||||||
Interest expense
|
(857 | ) | (861 | ) | - | |||||||
Other income
|
5,071 | 67 | 6 | |||||||||
Total other income (expense)
|
4,238 | (790 | ) | 26 | ||||||||
Net loss
|
$ | (3,342 | ) | $ | (7,912 | ) | $ | (7,970 | ) | |||
Unrealized loss on available-for-sale investments
|
(6 | ) | (1 | ) | (5 | ) | ||||||
Comprehensive loss
|
$ | (3,348 | ) | $ | (7,913 | ) | $ | (7,975 | ) | |||
Reconciliation of net loss to net loss attributable to common stockholders:
|
||||||||||||
Net loss
|
$ | (3,342 | ) | $ | (7,912 | ) | $ | (7,970 | ) | |||
Accretion of redeemable convertible preferred stock to redemption value
|
(6,353 | ) | (6,119 | ) | (6,133 | ) | ||||||
Net loss attributable to common stockholders
|
$ | (9,695 | ) | $ | (14,031 | ) | $ | (14,103 | ) | |||
Net loss per share attributable to common stockholders - basic and diluted
|
$ | (3.16 | ) | $ | (59.66 | ) | $ | (61.16 | ) | |||
Weighted-average common shares outstanding used in net loss per share attributable to common stockholders - basic and diluted
|
3,064,507 | 235,184 | 230,607 |
Research and development
|
$ | 114 | $ | 106 | $ | 46 | ||||||
General and administrative
|
345 | 49 | 64 | |||||||||
Total
|
$ | 459 | $ | 155 | $ | 110 |
December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
(in thousands)
|
||||||||||||
Balance Sheet Data:
|
||||||||||||
Cash, cash equivalents and available-for-sale investments
|
$ | 83,595 | $ | 5,152 | $ | 7,471 | ||||||
Working capital
|
82,263 | (4,438 | ) | 6,499 | ||||||||
Total assets
|
84,798 | 5,659 | 7,782 | |||||||||
Preferred stock
|
- | 96,405 | 90,286 | |||||||||
Common stock and
additional paid-in-capital
|
192,340 | 0 | 0 | |||||||||
Total stockholders’ (deficit) equity
|
82,460 | (100,514 | ) | (86,656 | ) |
·
|
employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;
|
·
|
expenses incurred under agreements with CROs and investigative sites that will conduct our clinical trials;
|
·
|
the cost of acquiring, developing, and manufacturing clinical trial materials;
|
·
|
costs associated with regulatory operations; and
|
·
|
facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies.
|
·
|
the scope, rate of progress, and expense of our ongoing as well as any additional clinical trials and other research and development activities;
|
·
|
uncertainties in clinical trial enrollment rate;
|
·
|
future clinical trial results;
|
·
|
significant and changing government regulation; and
|
·
|
the timing and receipt of any regulatory approvals.
|
·
|
we commenced our first Phase 3 clinical trial of PRT-201 for patients undergoing creation of a radiocephalic AVF in the third quarter of 2014. We intend to initiate our second Phase 3 trial of PRT-201 in radiocephalic AVFs in the second quarter of 2015. If the results from the first Phase 3 trial are sufficiently compelling, we intend to meet with the FDA to discuss the possibility of submitting a Biologics License Application, or BLA, supported by the single Phase 3 trial and may decide to submit a BLA to the FDA prior to completing the second Phase 3 trial;
|
·
|
we may, based on additional data including the data from our Phase 3 clinical trials and if sufficient funds become available, choose to conduct a clinical trial of PRT-201 in Europe;
|
·
|
we may, based on additional data including the data from our Phase 3 clinical trials and if sufficient funds become available, study the effects of PRT-201 versus placebo on brachiocephalic AVFs and in patients undergoing placement of an arteriovenous graft, or AVG; and
|
·
|
we expect to continue to manufacture clinical trial materials in support of our clinical trials.
|
Years Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Weighted average expected voliatility
|
79.50 | % | 91.12 | % | ||||
Expected term (in years)
|
6.00 | 5.95 | ||||||
Risk free interest rate
|
1.88 | % | 1.03 | % | ||||
Expected dividend yield
|
0 | % | 0 | % |
Years Ended December 31,
|
Period-to-
|
|||||||||||
2014
|
2013
|
Period Change | ||||||||||
(in thousands) | ||||||||||||
Revenue
|
$ | 2,948 | $ | - | $ | 2,948 | ||||||
Operating expenses:
|
||||||||||||
Research and development
|
6,432 | 3,994 | 2,438 | |||||||||
General and administrative
|
4,096 | 3,128 | 968 | |||||||||
Total operating expenses
|
10,528 | 7,122 | 3,406 | |||||||||
Loss from operations
|
(7,580 | ) | (7,122 | ) | (458 | ) | ||||||
Other income (expense):
|
||||||||||||
Interest expense, net
|
(833 | ) | (857 | ) | 24 | |||||||
Other income, net
|
5,071 | 67 | 5,004 | |||||||||
Total other income (expense)
|
4,238 | (790 | ) | 5,028 | ||||||||
Net Loss
|
$ | (3,342 | ) | $ | (7,912 | ) | $ | 4,570 |
Years Ended
December 31,
|
Period-to-
|
|||||||||||
2014
|
2013
|
Period Change | ||||||||||
(in thousands) | ||||||||||||
External PRT-201 research and development expenses
|
$ | 4,096 | $ | 1,962 | $ | 2,134 | ||||||
Internal research and development expenses
|
2,336 | 2,032 | 304 | |||||||||
Total research and develoment expenses
|
$ | 6,432 | $ | 3,994 | $ | 2,438 |
Years Ended December 31,
|
Period-to-
|
|||||||||||
2013
|
2012
|
Period Change | ||||||||||
(in thousands) | ||||||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$ | 3,994 | $ | 5,907 | $ | (1,913 | ) | |||||
General and administrative
|
3,128 | 2,089 | 1,039 | |||||||||
Total operating expenses
|
7,122 | 7,996 | (874 | ) | ||||||||
Loss from operations
|
(7,122 | ) | (7,996 | ) | 874 | |||||||
Other income (expense):
|
||||||||||||
Interest expense, net
|
(857 | ) | 20 | (877 | ) | |||||||
Other income, net
|
67 | 6 | 61 | |||||||||
Total other (expense) income
|
(790 | ) | 26 | (816 | ) | |||||||
Net Loss
|
$ | (7,912 | ) | $ | (7,970 | ) | $ | 57 |
Years Ended
December 31,
|
Period-to-
|
|||||||||||
2013
|
2012
|
Period Change | ||||||||||
External PRT-201 research and development expenses
|
$ | 1,962 | $ | 3,514 | $ | (1,552 | ) | |||||
Internal research and development expenses
|
2,032 | 2,393 | (361 | ) | ||||||||
Total research and develoment expenses
|
$ | 3,994 | $ | 5,907 | $ | (1,913 | ) |
·
|
the timing and costs of our planned Phase 3 clinical trials of PRT-201 in radiocephalic AVFs;
|
·
|
the timing and costs of developing PRT-201 for additional indications;
|
·
|
the outcome, timing and costs of seeking regulatory approvals;
|
·
|
the costs of commercialization activities for PRT-201 in radiocephalic AVFs and other indications if we receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;
|
·
|
subject to receipt of marketing approval, revenue received from commercial sales of PRT-201;
|
·
|
the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish;
|
·
|
the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights, including royalty payments that we are obligated to pay to Johns Hopkins University pursuant to our assignment agreement related to PRT-201;
|
·
|
the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; and
|
·
|
the extent to which we in-license or acquire other products and technologies.
|
Years Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
(in thousands) | ||||||||
Net cash used in operating activities
|
$ | (9,990 | ) | $ | (6,657 | ) | ||
Net cash (used in) provided by investing activities
|
(12,483 | ) | 2,727 | |||||
Net cash provided by financing activities
|
88,520 | 4,314 | ||||||
Net increase in cash and cash equivalents
|
$ | 66,047 | $ | 384 |
Years Ended December 31,
|
||||||||
2013
|
2012
|
|||||||
(in thousands) | ||||||||
Net cash used in operating activities
|
$ | (6,657 | ) | $ | (8,234 | ) | ||
Net cash provided by investing activities
|
2,727 | 7,382 | ||||||
Net cash provided by (used in) financing activities
|
4,314 | (9 | ) | |||||
Net increase (decrease) in cash and cash equivalents
|
$ | 384 | $ | (861 | ) |
Total
|
Less than 1 Year
|
1 to 3 Years
|
3 to 5 Years
|
More than 5 Years
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Operating leases(1)
|
$ | 588 | $ | 168 | $ | 336 | $ | 84 | $ | - |
(1)
|
In July 2009 we entered into a multi-year non-cancelable lease for our offices in Waltham, Massachusetts. In October 2011, we amended the lease extending its expiration to December 2014. In August 2014, we amended the lease extending its expiration to June 2018 with one optional one-year extension period. The minimum lease payments above do not include common area maintenance charges or real estate taxes.
|
Report of Independent Registered Public Accounting Firm
|
Consolidated Balance Sheets at December 31, 2014 and 2013
|
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2014, 2013 and 2012
|
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the years ended December 31, 2014, 2013 and 2012
|
Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012
|
Notes to Consolidated Financial Statements
|
Pages
|
|
/s/ Ernst & Young LLP |
As of December 31,
|
||||||||
2014
|
2013
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 68,840 | $ | 2,793 | ||||
Available-for-sale investments
|
14,755 | 2,359 | ||||||
Prepaid expenses and other curent assets
|
1,006 | 178 | ||||||
Total current assets
|
84,601 | 5,330 | ||||||
Property and equipment, net
|
83 | 62 | ||||||
Deferred tax asset
|
- | 267 | ||||||
Other non-current assets
|
114 | - | ||||||
Total assets
|
$ | 84,798 | $ | 5,659 | ||||
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
|
||||||||
Current liabilities:
|
||||||||
Convertible notes, including accrued interest of $0 and $112 as of December 31, 2014 and 2013, respectively
|
$ | - | $ | 3,727 | ||||
Derivative liability
|
- | 1,443 | ||||||
Accounts payable
|
917 | 399 | ||||||
Accrued expenses
|
1,421 | 984 | ||||||
Deferred tax liability
|
- | 267 | ||||||
Current portion of deferred revenue from sale of option to acquire company
|
- | 2,948 | ||||||
Total current liabilities
|
2,338 | 9,768 | ||||||
Total liabilities
|
2,338 | 9,768 | ||||||
Commitments and contingencies (Note 8)
|
- | - | ||||||
Redeemable convertible preferred stock:
|
||||||||
Series A redeemable convertible preferred stock, $0.001 par value, 0 and 22,638,465 shares authorized, issued, and outstanding at December 31, 2014 and 2013, respectively; aggregate liquidation preference of $0 and $22,638 at December 31, 2014 and 2013, respectively
|
- | 34,230 | ||||||
Series A-1 redeemable convertible preferred stock, $0.001 par value, 0 and 10,909,091 shares authorized, issued, and outstanding at December 31, 2014 and 2013, respectively; aggregate liquidation preference of $0 and $12,000 at December 31, 2014 and 2013, respectively
|
- | 17,374 | ||||||
Series B redeemable convertible preferred stock, $0.001 par value, 0 and 20,754,461 shares authorized, issued, and outstanding at December 31, 2014 and 2013, respectively; aggregate liquidation preference of $0 and $23,867 at December 31, 2014 and 2013, respectively
|
- | 27,401 | ||||||
Series C redeemable convertible preferred stock, $0.001 par value, 0 and 17,550,758 shares authorized; 0 and 13,202,932 issued and outstanding at December 31, 2014 and 2013, respectively; aggregate liquidation preference of $0 and $15,183 at December 31, 2014 and 2013, respectively
|
- | 17,400 | ||||||
Series D redeemable convertible preferred stock, $0.001 par value, 0 shares authorized; 0 issued and outstanding at December 31, 2014 and 2013; aggregate liquidation preference of $0 at December 31, 2014 and 2013
|
- | - | ||||||
Stockholders’ equity (deficit):
|
||||||||
Preferred stock, $0.001 par value per share; 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2014
|
- | - | ||||||
Common stock, $0.001 par value, 100,000,000 and 100,370,203 shares authorized at December 31, 2014 and 2013, respectively; 16,448,455 and 239,905 issued and outstanding at December 31, 2014 and 2013, respectively
|
16 | - | ||||||
Additional paid-in capital
|
192,324 | - | ||||||
Accumulated deficit
|
(109,874 | ) | (100,514 | ) | ||||
Accumulated other comprehensive loss
|
(6 | ) | - | |||||
Total stockholders’ equity (deficit)
|
82,460 | (100,514 | ) | |||||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
|
$ | 84,798 | $ | 5,659 |
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Revenue (Note 7)
|
$ | 2,948 | $ | - | $ | - | ||||||
Operating expenses:
|
||||||||||||
Research and development
|
6,432 | 3,994 | 5,907 | |||||||||
General and administrative
|
4,096 | 3,128 | 2,089 | |||||||||
Total operating expenses
|
10,528 | 7,122 | 7,996 | |||||||||
Loss from operations
|
(7,580 | ) | (7,122 | ) | (7,996 | ) | ||||||
Other income (expense):
|
||||||||||||
Investment income
|
24 | 4 | 20 | |||||||||
Interest expense
|
(857 | ) | (861 | ) | - | |||||||
Other income (Note 9)
|
5,071 | 67 | 6 | |||||||||
Total other income (expense)
|
4,238 | (790 | ) | 26 | ||||||||
Net loss
|
$ | (3,342 | ) | $ | (7,912 | ) | $ | (7,970 | ) | |||
Unrealized loss on available-for-sale investments
|
(6 | ) | (1 | ) | (5 | ) | ||||||
Comprehensive loss
|
$ | (3,348 | ) | $ | (7,913 | ) | $ | (7,975 | ) | |||
Reconciliation of net loss to net loss attributable to common stockholders:
|
||||||||||||
Net loss
|
$ | (3,342 | ) | $ | (7,912 | ) | $ | (7,970 | ) | |||
Accretion of redeemable convertible preferred stock to redemption value
|
(6,353 | ) | (6,119 | ) | (6,133 | ) | ||||||
Net loss attributable to common stockholders
|
$ | (9,695 | ) | $ | (14,031 | ) | $ | (14,103 | ) | |||
Net loss per share attributable to common stockholders - basic and diluted
|
$ | (3.16 | ) | $ | (59.66 | ) | $ | (61.16 | ) | |||
Weighted-average common shares outstanding used in net loss per share attributable to common stockholders - basic and diluted
|
3,064,507 | 235,184 | 230,607 | |||||||||
Supplemental disclosure of stock-based compensation expense: | ||||||||||||
Included in operating expenses, above, are the following amounts for non-cash stock based compensation expense
|
||||||||||||
Research and development
|
$ | 114 | $ | 106 | $ | 46 | ||||||
General and administrative
|
345 | 49 | 64 | |||||||||
Total
|
$ | 459 | $ | 155 | $ | 110 |
Series A Redeemable Convertible Preferred Stock
|
Series A-1 Redeemable Convertible Preferred Stock
|
Series B Redeemable Convertible Preferred Stock
|
Series C Redeemable Convertible Preferred Stock
|
Series D Redeemable Convertible Preferred Stock
|
Common Stock
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
$0.001 Par Value
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated Other
Comprehensive Income (Loss)
|
Total Stockholders'
(Deficit)
Equity
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2011
|
22,638,465 | $ | 31,031 | 10,909,091 | $ | 15,677 | 20,754,461 | $ | 22,446 | 13,202,932 | $ | 14,999 | - | $ | - | 230,607 | $ | - | $ | - | $ | (72,664 | ) | $ | 5 | $ | (72,659 | ) | ||||||||||||||||||||||||||||||||||||
Accretion of Series A, A-1, B and C redeemable convertible preferred stock to redemption value
|
- | 1,602 | - | 849 | - | 2,480 | - | 1,202 | - | - | - | - | (110 | ) | (6,023 | ) | - | (6,133 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
- | - | - | - | - | - | - | - | - | - | - | - | 110 | - | - | 110 | ||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) on short term investments
|
- | - | - | - | - | - | - | - | - | - | - | - | - | - | (4 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | - | - | - | - | (7,970 | ) | - | (7,970 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2012
|
22,638,465 | $ | 32,633 | 10,909,091 | $ | 16,526 | 20,754,461 | $ | 24,926 | 13,202,932 | $ | 16,201 | - | $ | - | 230,607 | $ | - | $ | - | $ | (86,657 | ) | $ | 1 | $ | (86,656 | ) | ||||||||||||||||||||||||||||||||||||
Accretion of Series A, A-1, B and C redeemable convertible preferred stock to redemption value
|
- | 1,597 | - | 848 | - | 2,475 | - | 1,199 | - | - | (174 | ) | (5,945 | ) | - | (6,119 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options
|
- | - | - | - | - | - | - | - | 9,298 | - | 19 | - | - | 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
- | - | - | - | - | - | - | - | - | - | 155 | - | - | 155 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) on short term investments
|
- | - | - | - | - | - | - | - | - | - | - | - | (1 | ) | (1 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | - | - | - | - | (7,912 | ) | - | (7,912 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2013
|
22,638,465 | $ | 34,230 | 10,909,091 | $ | 17,374 | 20,754,461 | $ | 27,401 | 13,202,932 | $ | 17,400 | - | $ | - | 239,905 | $ | - | $ | - | $ | (100,514 | ) | $ | - | $ | (100,514 | ) | ||||||||||||||||||||||||||||||||||||
Issuance of Series D redeemable convertible preferred stock net of $6,639 discount associated with investors rights and obligations and issuance costs of $452
|
- | - | - | - | - | - | - | - | 52,813,827 | 24,078 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of Series A, A-1, B, C and D redeemable convertible preferred stock to redemption value
|
- | 1,304 | - | 691 | - | 1,832 | - | 948 | - | 1,578 | - | - | (335 | ) | (6,018 | ) | - | (6,353 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Exercise of common stock options
|
- | - | - | - | - | - | - | - | - | - | 31,356 | - | 59 | - | - | 59 | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
- | - | - | - | - | - | - | - | - | - | - | - | 459 | - | - | 459 | ||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) on short term investments
|
- | - | - | - | - | - | - | - | - | - | - | - | - | - | (6 | ) | (6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Exercise of warrants
|
- | - | - | - | - | - | - | - | - | - | 498,889 | - | 1,428 | - | - | 1,428 | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of redeemable convertible preferred stock into common stock
|
(22,638,465 | ) | (35,534 | ) | (10,909,091 | ) | (18,065 | ) | (20,754,461 | ) | (29,233 | ) | (13,202,932 | ) | (18,348 | ) | (52,813,827 | ) | (25,656 | ) | 8,651,805 | 9 | 126,827 | - | - | 126,836 | ||||||||||||||||||||||||||||||||||||||
Exercise of investors rights and obligations
|
- | - | - | - | - | - | - | - | - | - | - | - | 1,408 | - | - | 1,408 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Common Stock from Initial Public Offering, net of underwriters discounts and issuance costs
|
- | - | - | - | - | - | - | - | - | - | 7,026,500 | 7 | 62,478 | - | - | 62,485 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | - | - | - | - | - | - | (3,342 | ) | - | (3,342 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2014
|
- | $ | - | - | $ | - | - | $ | - | - | $ | - | - | $ | - | 16,448,455 | $ | 16 | $ | 192,324 | $ | (109,874 | ) | $ | (6 | ) | $ | 82,460 |
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Operating activities
|
||||||||||||
Net loss
|
$ | (3,342 | ) | $ | (7,912 | ) | $ | (7,970 | ) | |||
Reconciliation of net loss to net cash used in operating
activities:
|
||||||||||||
Depreciation
|
30 | 27 | 57 | |||||||||
Amortization of premium/discount on available-for-sale securities
|
30 | 30 | 138 | |||||||||
Gain on sale of fixed assets
|
- | (65 | ) | (5 | ) | |||||||
Accretion of discount & debt issuance cost of
convertible notes payable
|
742 | 749 | - | |||||||||
Stock-based compensation
|
459 | 155 | 110 | |||||||||
Change in fair value of investor rights/obligation
|
(5,151 | ) | - | - | ||||||||
Change in fair value of derivative liability
|
81 | (2 | ) | - | ||||||||
Changes in:
|
||||||||||||
Prepaid expenses and other assets
|
(961 | ) | 72 | 348 | ||||||||
Accounts payable and accrued expenses
|
955 | 177 | (912 | ) | ||||||||
Accrued interest payable
|
115 | 112 | - | |||||||||
Deferred revenue from sale of option to acquire company
|
(2,948 | ) | - | - | ||||||||
Net cash used in operating activities
|
(9,990 | ) | (6,657 | ) | (8,234 | ) | ||||||
Investing activities
|
||||||||||||
Purchases of available-for-sale investments
|
(34,950 | ) | (3,878 | ) | (8,658 | ) | ||||||
Proceeds from maturities of available for sale investments
|
22,518 | 6,550 | 16,075 | |||||||||
Purchase of property and equipment
|
(51 | ) | (10 | ) | (67 | ) | ||||||
Sale of property and equipment
|
- | 65 | 33 | |||||||||
Deposits
|
- | - | (1 | ) | ||||||||
Net cash (used in) provided by investing activities
|
(12,483 | ) | 2,727 | 7,382 | ||||||||
Financing activities
|
||||||||||||
Proceeds from issuance of Series D preferred stock
|
25,000 | - | - | |||||||||
Issuance costs for preferred stock
|
(452 | ) | - | - | ||||||||
Net proceeds from IPO
|
62,485 | - | - | |||||||||
Proceeds from issuance of convertible notes payable
|
- | 4,339 | - | |||||||||
Payments for debt issuance costs
|
- | (46 | ) | - | ||||||||
Exercise of stock options
|
59 | 21 | - | |||||||||
Exercise of warrants
|
1,428 | - | - | |||||||||
Repayments of debt
|
- | - | (9 | ) | ||||||||
Net cash provided by (used in) financing activities
|
88,520 | 4,314 | (9 | ) | ||||||||
Increase (decrease) in cash and cash equivalents
|
66,047 | 384 | (861 | ) | ||||||||
Cash and cash equivalents, beginning of period
|
2,793 | 2,409 | 3,270 | |||||||||
Cash and cash equivalents, end of period
|
$ | 68,840 | $ | 2,793 | $ | 2,409 | ||||||
Supplemental disclosure of non-cash investing and financing activities
|
||||||||||||
Accretion of redeemable convertible preferred stock to redemption value
|
$ | 6,353 | $ | 6,119 | $ | 6,133 | ||||||
Fair value of derivative embedded within convertible notes payable
|
$ | - | $ | 1,445 | $ | - | ||||||
Conversion of convertible notes and accrued interest into Series D Preferred Stock
|
$ | 6,089 | $ | - | $ | - | ||||||
Conversion of redeemable convertible preferred stock into common stock
|
$ | 126,836 | $ | - | $ | - | ||||||
Fair value of investors' rights/ obligations reclassified to equity upon IPO
|
$ | 1,408 | $ | - | $ | - |
1.
|
Organization and operations
|
2.
|
Summary of significant accounting policies
|
·
|
Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
|
·
|
Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly.
|
·
|
Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable.
|
Asset
|
Estimated
Useful Life
|
Computer equipment and software
|
3 years
|
Furniture, fixtures and other
|
5 years
|
Laboratory equipment
|
7 years
|
3.
|
Financial Instruments
|
As of December 31, 2014
|
||||||||||||||||
Quoted Prices
in Active
|
Significant
Observable
|
Significant
Unobservable
|
Total
|
|||||||||||||
Financial assets
|
||||||||||||||||
Cash equivalents
|
$ | 68,830 | $ | - | $ | - | $ | 68,830 | ||||||||
Government securities
|
6,508 | - | - | 6,508 | ||||||||||||
Corporate bonds
|
- | 8,247 | - | 8,247 | ||||||||||||
Total
|
$ | 75,338 | $ | 8,247 | $ | - | $ | 83,585 |
As of December 31, 2013
|
||||||||||||||||
Quoted Prices
in Active
|
Significant
Observable
|
Significant
Unobservable
|
Total
|
|||||||||||||
Financial assets
|
||||||||||||||||
Cash equivalents
|
$ | 2,781 | $ | - | $ | - | $ | 2,781 | ||||||||
Government securities
|
2,359 | - | - | 2,359 | ||||||||||||
Total
|
$ | 5,140 | $ | - | $ | - | $ | 5,140 | ||||||||
Financial liabilities
|
||||||||||||||||
Derivative liability
|
$ | - | $ | - | $ | 1,443 | $ | 1,443 | ||||||||
Total
|
$ | - | $ | - | $ | 1,443 | $ | 1,443 |
Amortized Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair Value
|
|||||||||||||
December 31, 2014
|
||||||||||||||||
Government securities
|
||||||||||||||||
(Due within 1 year)
|
$ | 6,510 | $ | - | $ | (2 | ) | $ | 6,508 | |||||||
Corporate bonds
|
||||||||||||||||
(Due within 1 year)
|
8,251 | - | (4 | ) | 8,247 | |||||||||||
$ | 14,761 | $ | - | $ | (6 | ) | $ | 14,755 | ||||||||
December 31, 2013
|
||||||||||||||||
Government securities
|
||||||||||||||||
(Due within 1 year)
|
$ | 2,359 | $ | - | $ | - | $ | 2,359 | ||||||||
$ | 2,359 | $ | - | $ | - | $ | 2,359 |
4.
|
Property and Equipment, net
|
As of December 31,
|
||||||||
2014
|
2013
|
|||||||
Computer equipment and software
|
$ | 135 | $ | 96 | ||||
Furniture, fixtures, and other
|
84 | 84 | ||||||
Laboratory equipment
|
248 | 236 | ||||||
467 | 416 | |||||||
Accumulated Depreciation
|
(384 | ) | (354 | ) | ||||
Property and equipment, net
|
$ | 83 | $ | 62 |
5.
|
Convertible Notes
|
6.
|
Accrued Expenses
|
As of December 31,
|
||||||||
2014
|
2013
|
|||||||
Payroll and employee-related costs
|
$ | 641 | $ | 419 | ||||
Contracted service costs
|
494 | 360 | ||||||
Professional fees and other
|
286 | 205 | ||||||
Total
|
$ | 1,421 | $ | 984 |
7.
|
Option to Acquire Company
|
Expected volatility
|
76% | |||
Expected option expiration date
|
June 30, 2013
|
|||
Expected dividends
|
0% | |||
Expected term (years)
|
4.34 | |||
Risk-free rate
|
1.80% |
8.
|
Commitments and Contingencies
|
Year Ending December 31:
|
Amount
|
||||
2015
|
$ | 168 | |||
2016
|
168 | ||||
2017
|
168 | ||||
2018
|
84 | ||||
Total minimum lease payments
|
$ | 588 |
9.
|
Redeemable Convertible Preferred Stock
|
Upon
Issuance
|
|
Immediately
before IPO
|
|
||||||
Expected term (in years)
|
1.84 | - | 3.50 | 0.001 | |||||
Expected volatility
|
63.0% | - | 86.0% | 63.0% | - | 71.0% | |||
Risk-free interest rate
|
0.44% | - | 1.12% | 0.35% | - | 1.05% | |||
Expected dividend yield
|
0% | 0% |
Amount
|
||||
Fair value of tranche right liability upon issuance May 13, 2014
|
$ | 6,639 | ||
Issuance costs allocated to tranche right liability
|
(80 | ) | ||
Adjustment to fair value recorded in other income during 2014
|
(5,151 | ) | ||
Reclassified to equity upon exercise on October 21, 2014
|
(1,408 | ) | ||
Balance at December 31, 2014
|
$ | - |
10.
|
Common Stock
|
As of December 31,
|
||||||||
2014
|
2013
|
|||||||
Conversion of Series A Preferred Stock
|
- | 1,426,482 | ||||||
Conversion of Series A-1 Preferred Stock
|
- | 687,395 | ||||||
Conversion of Series B Preferred Stock
|
- | 1,307,771 | ||||||
Conversion of Series C Preferred Stock
|
- | 1,105,907 | ||||||
Stock-based compensation awards
|
1,807,349 | 623,111 | ||||||
Employee Stock Purchase Plan
|
140,500 | - | ||||||
Warrants to purchase Common Stock
|
- | 659,806 | ||||||
Total
|
1,947,849 | 5,810,472 |
11.
|
Stock-based Compensation
|
Year Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Research and development
|
$ | 114 | $ | 106 | $ | 46 | ||||||
General and administrative
|
345 | 49 | 64 | |||||||||
Total
|
$ | 459 | $ | 155 | $ | 110 |
Year Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Weighted average expected volatility
|
79.5 | % | 91.1 | % | ||||
Expected term (in years)
|
6.00 | 5.95 | ||||||
Risk free interest rate
|
1.88 | % | 1.03 | % | ||||
Expected dividend yield
|
0 | % | 0 | % |
Options
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term
(years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2013
|
607,017 | $ | 2.22 | 5.2 | $ | 1,627 | ||||||||||
Granted
|
659,865 | $ | 5.94 | |||||||||||||
Exercised
|
(31,356 | ) | $ | 1.89 | ||||||||||||
Cancelled or forfeited
|
- | $ | - | |||||||||||||
Outstanding at December 31, 2014
|
1,235,526 | $ | 4.19 | 7.1 | $ | 7,709 | ||||||||||
Exercisable at December 31, 2014
|
572,184 | $ | 2.36 | 4.5 | $ | 4,615 | ||||||||||
Vested or expected to vest at December 31, 2014 (1)
|
1,163,249 | $ | 4.13 | 7.0 | $ | 7,327 |
12.
|
401(k) Savings Plan
|
13.
|
Income Taxes
|
Years Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Income tax benefit using U.S. federal statutory rate
|
$ | (1,136 | ) | $ | (2,690 | ) | $ | (2,710 | ) | |||
Permanent differences
|
124 | 299 | 38 | |||||||||
Orphan drug credit permanent addback
|
674 | - | - | |||||||||
State income taxes, net of federal benefit
|
(303 | ) | (389 | ) | (368 | ) | ||||||
Tax credits
|
(2,176 | ) | (7,164 | ) | (95 | ) | ||||||
Expiring net operating losses and tax credits
|
312 | 2,566 | 287 | |||||||||
Change in valuation allowance
|
4,394 | 7,286 | 2,988 | |||||||||
Mark to market derivative liability
|
(1,779 | ) | - | - | ||||||||
Other
|
(110 | ) | 92 | (140 | ) | |||||||
$ | - | $ | - | $ | - |
Years Ended December 31,
|
||||||||||||
2014
|
2013
|
2012
|
||||||||||
Net operating loss carryforwards
|
$ | 29,217 | $ | 26,304 | $ | 26,560 | ||||||
Federal and state tax credits
|
12,126 | 9,941 | 2,777 | |||||||||
Deferred revenue
|
- | 1,147 | 1,139 | |||||||||
Accrued expenses
|
478 | 332 | 155 | |||||||||
Patents
|
531 | 612 | 692 | |||||||||
Other
|
100 | 300 | 27 | |||||||||
42,452 | 38,636 | 31,350 | ||||||||||
Valuation allowance
|
(42,452 | ) | (38,636 | ) | (31,350 | ) | ||||||
Net deferred tax asset
|
$ | - | $ | - | $ | - |
14.
|
Net income (loss) per share attributable to Common Stockholders
|
Years Ended December 31,
|
|||||||||||||
2014
|
2013
|
2012
|
|||||||||||
Covertible preferred stock
|
7,581 |
(a)
|
4,254 | 4,254 | |||||||||
Common stock warrants
|
660 |
(a)
|
660 | 660 | |||||||||
Outstanding stock options
|
1,236 | 607 | 614 | ||||||||||
Convertible notes
|
243 |
(a)
|
243 | - | |||||||||
9,720 | 5,764 | 5,528 |
15.
|
Quarterly Financial Information (unaudited, in thousands, except share and per share data)
|
(a) Adjusted to correct an immaterial error in the weighted-average share calculation in the Company's Form 10-Q as of September 30, 2014 and 2013.
|
||||||||
(b) In October 2014, the Company completed its initial public offering of common stock which resulted in net proceeds of approximately $62.5 million from the issuance of 7,026,500 shares of common stock, which includes the sale of 916,500 shares under the underwriter's over allotment option. Immediately prior to the closing of the Company’s IPO, 498,889 shares of Common Stock were issued upon the exercise of warrants with aggregate proceeds of $1.4 million. In connection with the public offering, all of the Company's outstanding redeemable convertible preferred stock was converted to 8,651,805 shares of common stock.
|
16.
|
Subsequent Events
|
PROTEON THERAPEUTICS, INC.
|
||
By:
|
/s/ Timothy P. Noyes
|
|
Timothy P. Noyes
|
||
President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
||
/s/ Timothy P. Noyes
|
President and Chief Executive Officer and Director
(Principal Executive Officer)
|
March 20, 2015
|
||
Timothy P. Noyes
|
||||
/s/ George A. Eldridge
|
Senior Vice President, Chief Financial Officer,
Treasurer and Secretary
|
March 20, 2015
|
||
George A. Eldridge
|
(Principal Financial and Accounting Officer)
|
|||
/s/ Hubert Birner, Ph.D.
|
||||
Hubert Birner, Ph.D
|
Director
|
March 20, 2015
|
||
/s/ Garen Bohlin
|
||||
Garen Bohlin
|
Director
|
March 20, 2015
|
||
/s/ John G. Freud, M.D.
|
||||
John G. Freud, M.D.
|
Director
|
March 20, 2015
|
||
/s/ Tim Haines
|
||||
Tim Haines
|
Director
|
March 20, 2015
|
||
/s/ Dmitry Kobyzev, Ph.D.
|
||||
Dmitry Kobyzev, Ph.D.
|
Director
|
March 20, 2015
|
||
/s/ Brendan M. O’Leary, Ph.D.
|
||||
Brendan M. O’Leary
|
Director
|
March 20, 2015
|
||
/s/ Gregory D. Phelps
|
||||
Gregory D. Phelps
|
Director
|
March 20, 2015
|
Exhibit No.
|
Description | ||||
3.1
|
Sixth Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on October 27, 2014 (File No. 001-36694)).
|
||||
|
|||||
3.2
|
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on October 27, 2014 (File No. 001-36694)).
|
||||
|
|||||
4.1
|
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed on October 7, 2014 (File No. 333-198777)).
|
||||
|
|||||
4.2
|
Fourth Amended and Restated Investors' Rights Agreement, dated May 13, 2014, between the Company and certain investors named therein (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
||||
|
|||||
4.3
|
Series D Preferred Stock Purchase Agreement, dated May 13, 2014, between the Company and certain investors named therein (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
||||
|
|||||
10.1
|
†
|
2006 Equity Incentive Plan, as amended and restated August 21, 2014 (incorporated by reference to Exhibit 10.1 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed on October 7, 2014 (File No. 333-198777)).
|
|||
|
|||||
10.2
|
†
|
2014 Equity Incentive Plan, Form of Stock Option Agreement and Form of Option Exercise Notice under the Company's 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed on October 7, 2014 (File No. 333-198777)).
|
|||
|
|||||
10.3
|
†
|
Letter Agreement by and between the Company and F. Nicholas Franano, dated August 22, 2014 (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
|||
|
|||||
10.4
|
‡
|
Process Development and Manufacturing Services Agreement by and between the Company and Lonza Ltd., dated September 1, 2009 (as amended by that Amendment No. 1 entered into as of February 21, 2012) (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
|||
|
|||||
10.5
|
Lease Agreement by and between the Company and Boston Properties Limited Partnership, dated July 13, 2009, as amended by that Amendment No. 1 dated September 14, 2012, as amended by that Amendment No. 2 dated October 17, 2013, as amended by that Amendment No. 3 dated August 4, 2014 (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
||||
|
|||||
10.6
|
Assignment of Rights/License Agreement, effective as of February 4, 2002, by and between Johns Hopkins University and F. Nicholas Franano (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
10.7
|
Assignment of Patent made and entered into as of December 30, 2002, by and between F. Nicholas Franano and Proteon Therapeutics, L.L.C (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
|
|
||
10.8
|
Letter Agreement, dated October 1, 2010, among the National Institutes of Health, F. Nicholas Franano and the Company (incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
|
|
||
10.9
|
Letter Agreement, dated January 12, 2009, by and between F. Nicholas Franano and the Company (as successor-in-interest to Proteon Therapeutics, L.L.C.) (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
|
|
||
10.10
|
Quitclaim Deed, dated January 17, 2011, by F. Nicholas Franano to the Company (incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
|
|
||
10.11
|
†
|
Form of Stock Option Grant Notice and Stock Option Agreement under the Company's 2006 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 filed on September 16, 2014 (File No. 333-198777)).
|
|
||
10.12
|
†
|
2014 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.25 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed on October 7, 2014 (File No. 333-198777)).
|
|
||
10.13
|
†
|
Amended and Restated Employment Agreement by and between the Company and Timothy P. Noyes, dated October 1, 2014 (incorporated by reference to Exhibit 10.26 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed on October 7, 2014 (File No. 333-198777)).
|
|
||
10.14
|
†
|
Amended and Restated Employment Agreement by and between the Company and Steven Burke, dated October 1, 2014 (incorporated by reference to Exhibit 10.27 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed on October 7, 2014 (File No. 333-198777)).
|
|
||
10.15
|
†
|
Amended and Restated Employment Agreement by and between the Company and George Eldridge, dated October 1, 2014 (incorporated by reference to Exhibit 10.28 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed on October 7, 2014 (File No. 333-198777)).
|
|
||
10.16
|
†
|
Amended and Restated Employment Agreement by and between the Company and Daniel Gottlieb, dated October 1, 2014 (incorporated by reference to Exhibit 10.29 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 filed on October 7, 2014 (File No. 333-198777)).
|
10.17
|
Form of Amended and Restated Indemnification Agreement (incorporated by reference to Exhibit 10.30 to Amendment No. 1 to the Company’s Registration Statement on Form S-1/A filed on October 7, 2014 (File No. 333-198777)).
|
|
|
||
21.1
|
*
|
List of Subsidiaries.
|
|
||
23.1
|
*
|
Consent of Ernst & Young LLP, independent registered public accounting firm.
|
|
||
31.1
|
* |
Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
31.2
|
* |
Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
32.1
|
** |
Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
|
101
|
* |
Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of December 31, 2014 and 2013; (ii) the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2014, 2013 and 2012; (iii) the Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the years ended December 31, 2014, 2013 and 2012; (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012; and (v) the notes to the Consolidated Financial Statements.
|
Name of Subsidiary
|
Jurisdiction
|
Proteon Therapeutics Limited
|
United Kingdom
|
Proteon Securities Corp.
|
Massachusetts
|
/s/ Ernst & Young LLP |
/s/ TIMOTHY P. NOYES
|
|
Timothy P. Noyes
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
Date: March 20, 2015
|
/s/ GEORGE A. ELDRIDGE
|
|
George A. Eldridge
Senior Vice President, Chief Financial Officer, Treasurer and Secretary
(Principal Financial Officer)
|
|
Date: March 20, 2015
|
In connection with the Annual Report of Proteon Therapeutics, Inc. (the “Corporation”) on Form 10-K for the fiscal year ended December 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy P. Noyes, as President and Chief Executive Officer of the Corporation, and I, George A. Eldridge, Senior Vice President, Chief Financial Officer, Treasurer and Secretary of the Corporation, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
|
||||||||||
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|||||||||
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
|
|||||||||
Date: March 20, 2015
|
By:
|
/s/ Timothy P. Noyes
|
||||||||
Timothy P. Noyes
|
||||||||||
President, Chief Executive Officer and Director
|
||||||||||
(Principal Executive Officer)
|
||||||||||
Date: March 20, 2015
|
By:
|
/s/ George A. Eldridge
|
||||||||
George A. Eldridge
|
||||||||||
Senior Vice President, Chief Financial Officer, Treasurer and Secretary
|
||||||||||
(Principal Financial Officer)
|