Exhibit 99.1
Gyre Therapeutics Reports Full Year 2023 Financial Results and Provides Business Update
Data readout from Phase 3 clinical trial in the People's Republic of China (“PRC”) evaluating F351 for the treatment of CHB-associated liver fibrosis expected by early 2025
U.S. Phase 2a clinical trial evaluating F351 for the treatment of NASH-associated liver fibrosis planned for 2025
Appointed Dr. Han Ying as Chief Executive Officer
Acquired indirect controlling interest in Beijing Continent Pharmaceuticals Co., Ltd. (d/b/a Gyre Pharmaceuticals Co., Ltd) as part of business combination agreement with GNI
Cash and cash equivalents totaled $33.5 million as of December 31, 2023
SAN DIEGO, March 26, 2024 (GLOBE NEWSWIRE) – Gyre Therapeutics, Inc. (“Gyre”) (Nasdaq: GYRE), a clinical-stage biotechnology company developing anti-fibrotic therapeutics for a variety of chronic organ diseases, today announced financial results for the full year ended December 31, 2023 and provided a business update.
“2023 was a transformational year for Gyre as we successfully monetized our legacy assets, returned cash to stockholders, and expanded into the attractive liver fibrosis space with the acquisition of F351, a structural analogue of the approved anti-fibrotic drug ETUARY® (Pirfenidone). We are extremely encouraged by the data from our Phase 1 clinical trial in healthy volunteers in the United States, which demonstrated a safety profile consistent with that observed in the Phase 2 proof-of-concept trial completed in the PRC. We expect to receive clearance from the U.S. FDA for the initiation of a Phase 2a trial in NASH-associated liver fibrosis by the end of 2024,” said Han Ying, Ph.D., Chief Executive Officer of Gyre. “In addition, we remain on track to report data from Gyre Pharmaceuticals’ Phase 3 trial evaluating F351 for the treatment of CHB-associated liver fibrosis in the PRC by early 2025. Sales of ETUARY remained strong, increasing 13% from 2022 as Gyre Pharmaceuticals maintained its market-leading position in the PRC IPF market, providing funding for our clinical development plans.”
Full Year 2023 Business Highlights and Upcoming Milestones
Corporate Updates
1
ETUARY (Pirfenidone capsules) Sales Update
ETUARY (Pirfenidone): Pirfenidone, the first anti-fibrotic drug approved for idiopathic pulmonary fibrosis (“IPF”) in Japan, the EU, the United States and the PRC, is a small molecule drug that inhibits the synthesis of tumor growth transforming (“TGF”)-β1, TNF-α, and other fibrosis and inflammation modulators. ETUARY became commercially available in the PRC in 2011 and has been included in the National Reimbursement Drug List since 2017.
Clinical Development Updates
F351 (Hydronidone): F351 is a structural derivative of the approved anti-fibrotic drug ETUARY (Pirfenidone) with a TGF-β1 mechanism of action and is currently being evaluated by Gyre for the treatment of nonalcoholic steatohepatitis (“NASH”)-associated liver fibrosis in the U.S. and by Gyre Pharmaceuticals for the treatment of chronic hepatitis B (“CHB”)-associated liver fibrosis in the PRC.
2
F573: Gyre Pharmaceuticals is developing F573, a caspase inhibitor and potential Category 1 new drug, for the treatment of acute/acute-on-chronic liver failure (“ALF/ACLF”).
Preclinical Development Updates
Financial Results
Cash Position
As of December 31, 2023, Gyre had cash and cash equivalents of $33.5 million, compared to $25.2 million as of December 31, 2022. The $8.3 million change was primarily due to a $25.9 million increase from net cash provided by operating activities, a $19.8 million decrease from net cash used in investing activities and a $2.5 million increase from net cash provided by financing activities.
Financial Results for the Full Year Ended December 31, 2023
3
Use of Non-GAAP Financial Measures by Gyre Therapeutics, Inc.
Gyre reports financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). This release presents the financial measure “adjusted net income (loss),” which is not calculated in accordance with GAAP. The most directly comparable GAAP measure for this non-GAAP financial measure is “net income (loss).” Adjusted net income (loss) presents Gyre’s results of operations after excluding acquired in-process research and development, loss from change in fair value of warrants, stock-based compensation, divestiture losses, and income tax adjustments. This is meant to supplement, and not substitute, Gyre’s financial information presented in accordance with GAAP. Adjusted net income (loss) as defined by Gyre may not be comparable to similar non-GAAP measures presented by other companies. Management believes that presenting adjusted net income (loss) provides investors with additional useful information in evaluating the Gyre's performance and valuation. See the reconciliation of adjusted net income (loss) to net income (loss) in the section titled “Reconciliation of GAAP to Non-GAAP Financial Measures” below.
About F351 (Hydronidone)
F351 is a structural analogue of the approved anti-fibrotic (IPF) drug Pirfenidone and has been shown to inhibit in vitro both p38γ kinase activity and TGF-β1-induced excessive collagen synthesis in hepatic stellate cells (“HSCs”), which are recognized as critical event in the development and progression of fibrosis in the liver. This is further supported by its anti-proliferative effects on the HSCs in the liver. In vitro anti-fibrotic effects of F351 were also confirmed in several established in vivo models of liver fibrosis such as CC14-induced liver fibrosis mouse model, DMN-induced liver fibrosis rat model, and HSA-induced liver rat model, as well as mouse model of NASH fibrosis (CC14+Western High Fat Diet).
4
About Gyre Pharmaceuticals
Gyre Pharmaceuticals is a commercial-stage biopharmaceutical company committed to the research, development, manufacturing and commercialization of innovative drugs for organ fibrosis. Its flagship product, ETUARY (Pirfenidone capsule), was the first approved treatment for IPF in the PRC in 2011 and has maintained a prominent market share (2023 net sales of $112.1 million). In addition, Gyre Pharmaceuticals is evaluating F351 in a Phase 3 clinical trial in CHB-associated liver fibrosis in the PRC, which is expected to readout topline data by early 2025. F351 received Breakthrough Therapy designation by the National Medical Products Administration’s (“NMPA”) Center for Drug Evaluation in March 2021. Gyre Pharmaceuticals is also developing treatments for COPD, PAH and ALF/ACLF. In October 2023, Gyre Therapeutics acquired an indirect majority interest in Gyre Pharmaceuticals (also known as Beijing Continent Pharmaceuticals Co., Ltd.).
About Gyre Therapeutics
Gyre Therapeutics is a biopharmaceutical company headquartered in San Diego, CA, with a primary focus on the development and commercialization of F351 (Hydronidone) for the treatment of NASH-associated fibrosis in the U.S. Gyre’s development strategy for F351 in NASH is based on the company's experience in NASH rodent model mechanistic studies and CHB-induced liver fibrosis clinical studies. Gyre is also advancing a diverse pipeline in the PRC through its indirect controlling interest in Gyre Pharmaceuticals, including ETUARY therapeutic expansions, F573, F528, and F230.
Forward-looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions. All statements, other than statements of historical facts included in this press release, including statements concerning: the expectations regarding and goals of Gyre’s research and development efforts, timing of expected clinical readouts, initiation of Gyre’s Phase 2 trial in the U.S. for F351, interactions with regulators, expectations regarding future product sales, and Gyre’s financial position and cash resources, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms, and similar expressions intended to identify forward-looking statements. These statements reflect our plans, estimates, and expectations, as of the date of this press release. These statements involve known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the forward-looking statements expressed or implied in this press release. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation: Gyre’s ability to execute on its clinical development strategies; positive results from a clinical trial may not necessarily be predictive of the results of future or ongoing clinical trials; the timing or likelihood of regulatory filings and approvals; competition from competing products; the impact of general economic, health, industrial or political conditions in the United States or internationally; the sufficiency of Gyre’s capital resources and its ability to raise additional capital. Additional risks and factors are identified under “Risk Factors” in Gyre’s Annual Report on Form 10-K filed on March 27, 2023 and subsequent reports filed with the Securities and Exchange Commission, including in the Definitive Proxy Statement filed on July 20, 2023.
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Gyre expressly disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
For Investors:
Stephen Jasper
stephen@gilmartinir.com
6
Gyre Therapeutics, Inc.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
|
|
Year Ended December 31, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Revenues |
|
$ |
113,450 |
|
|
$ |
102,290 |
|
Operating expenses: |
|
|
|
|
|
|
||
Cost of revenues |
|
|
4,636 |
|
|
|
4,793 |
|
Selling and marketing |
|
|
61,159 |
|
|
|
54,238 |
|
Research and development |
|
|
13,780 |
|
|
|
16,686 |
|
General and administrative |
|
|
14,662 |
|
|
|
17,370 |
|
Acquired in-process research and development |
|
|
83,104 |
|
|
|
— |
|
Divestiture losses |
|
|
2,711 |
|
|
|
— |
|
Loss on disposal of property and equipment |
|
|
628 |
|
|
|
— |
|
Total operating expenses |
|
|
180,680 |
|
|
|
93,087 |
|
(Loss) income from operations |
|
|
(67,230 |
) |
|
|
9,203 |
|
Other income (expense), net: |
|
|
|
|
|
|
||
Interest income, net |
|
|
1,044 |
|
|
|
726 |
|
Other income |
|
|
1,076 |
|
|
|
857 |
|
Change in fair value of warrant liability |
|
|
(9,261 |
) |
|
|
— |
|
Other expenses |
|
|
(2,594 |
) |
|
|
(1,374 |
) |
(Loss) income before income taxes |
|
|
(76,965 |
) |
|
|
9,412 |
|
Provision for income taxes |
|
|
(8,515 |
) |
|
|
(5,098 |
) |
Net (loss) income from operations |
|
|
(85,480 |
) |
|
|
4,314 |
|
Net income attributable to noncontrolling interest |
|
|
7,453 |
|
|
|
2,012 |
|
Net (loss) income attributable to common stockholders |
|
$ |
(92,933 |
) |
|
$ |
2,302 |
|
Net (loss) income per share attributable to common stockholders: |
|
|
|
|
|
|
||
Basic |
|
$ |
(1.41 |
) |
|
$ |
0.04 |
|
Diluted |
|
$ |
(1.41 |
) |
|
$ |
0.03 |
|
Weighted average shares used in calculating net (loss) income per share attributable to common stockholders: |
|
|
|
|
|
|
||
Basic |
|
|
65,831,675 |
|
|
|
63,588,119 |
|
Diluted |
|
|
65,831,675 |
|
|
|
75,686,406 |
|
7
Gyre Therapeutics, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
33,509 |
|
|
$ |
25,175 |
|
Accounts and note receivables, net |
|
|
15,552 |
|
|
|
17,136 |
|
Other receivables from GNI |
|
|
1,287 |
|
|
|
— |
|
Inventories, net |
|
|
4,281 |
|
|
|
6,122 |
|
Prepaid assets |
|
|
1,547 |
|
|
|
377 |
|
Other current assets |
|
|
1,045 |
|
|
|
843 |
|
Total current assets: |
|
|
57,221 |
|
|
|
49,653 |
|
Property and equipment, net |
|
|
23,288 |
|
|
|
17,709 |
|
Long-term receivable from GCBP |
|
|
4,722 |
|
|
|
— |
|
Intangible assets, net |
|
|
205 |
|
|
|
297 |
|
Right-of-use assets |
|
|
489 |
|
|
|
666 |
|
Land use rights, net |
|
|
1,493 |
|
|
|
1,559 |
|
Deferred tax assets |
|
|
4,695 |
|
|
|
4,081 |
|
Long-term certificates of deposit |
|
|
23,431 |
|
|
|
7,394 |
|
Other assets, noncurrent |
|
|
995 |
|
|
|
3,394 |
|
Total assets |
|
$ |
116,539 |
|
|
$ |
84,753 |
|
Liabilities, convertible preferred stock, and equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
355 |
|
|
$ |
122 |
|
Deferred revenue |
|
|
39 |
|
|
|
145 |
|
Due to related parties |
|
|
1,369 |
|
|
|
118 |
|
CVR excess closing cash payable |
|
|
1,085 |
|
|
|
— |
|
Accrued expenses and other current liabilities |
|
|
11,935 |
|
|
|
9,264 |
|
Income tax payable |
|
|
5,054 |
|
|
|
2,101 |
|
Operating lease liabilities, current |
|
|
210 |
|
|
|
492 |
|
Total current liabilities: |
|
|
20,047 |
|
|
|
12,242 |
|
Operating lease liabilities, noncurrent |
|
|
199 |
|
|
|
121 |
|
Deferred government grants |
|
|
213 |
|
|
|
118 |
|
CVR derivative liability, noncurrent |
|
|
4,722 |
|
|
|
— |
|
Warrant liability, noncurrent |
|
|
12,835 |
|
|
|
— |
|
Other noncurrent liabilities |
|
|
49 |
|
|
|
55 |
|
Total liabilities |
|
$ |
38,065 |
|
|
$ |
12,536 |
|
Convertible Preferred Stock, $0.001 par value, 5,000,000 shares authorized; 13,151 shares and nil shares issued and outstanding at December 31, 2023 and 2022, respectively |
|
|
64,525 |
|
|
|
— |
|
Equity: |
|
|
|
|
|
|
||
Common stock, $0.001 par value, 400,000,000 shares authorized; 76,595,616 shares and 63,588,119 shares issued and outstanding at December 31, 2023 and 2022, respectively |
|
|
77 |
|
|
|
64 |
|
Additional paid-in capital |
|
|
68,179 |
|
|
|
32,795 |
|
Statutory reserve |
|
|
3,098 |
|
|
|
2,660 |
|
(Accumulated deficit) retained earnings |
|
|
(85,538 |
) |
|
|
7,395 |
|
Accumulated other comprehensive loss |
|
|
(1,644 |
) |
|
|
(392 |
) |
Total Gyre stockholders’ (deficit) equity |
|
|
(15,828 |
) |
|
|
42,522 |
|
Noncontrolling interest |
|
|
29,777 |
|
|
|
29,695 |
|
Total equity |
|
|
13,949 |
|
|
|
72,217 |
|
Total liabilities, convertible preferred stock, and equity |
|
$ |
116,539 |
|
|
$ |
84,753 |
|
8
Gyre Therapeutics, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands)
(unaudited)
|
Years Ended December 31, |
|
|||||
|
2023 |
|
|
2022 |
|
||
Net (loss) income from operations |
$ |
(85,480 |
) |
|
$ |
4,314 |
|
Acquired in-process research and development (1) |
|
83,104 |
|
|
|
— |
|
Loss from change in fair value of warrants (2) |
|
9,261 |
|
|
|
— |
|
Stock-based compensation |
|
7,281 |
|
|
|
13,366 |
|
Divestiture losses (3) |
|
2,711 |
|
|
|
— |
|
Provision for income taxes |
|
8,515 |
|
|
|
5,098 |
|
Non-GAAP adjusted net income from consolidated operations |
$ |
25,392 |
|
|
$ |
22,778 |
|
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