Nexvet doubles down on R&D spending as net loss widens

Dog at Vet

It's been a rough ride for Dublin-based Nexvet ($NVET) ever since the company offered its shares to the public in February at $10 a piece. By the time it announced its fiscal 2015 earnings results on Sept. 3, its shares had fallen to $4.27, as its two lead drugs to treat osteoarthritis in pets have produced mixed results in clinical trials. The numbers clearly show the company is still laboring to define the future of its late-stage pipeline.

Nexvet reported that its net loss widened from $6.7 million in 2014 to $11.9 million as R&D and other operating expenses doubled to $20 million. The company has $52 million in cash and no product revenues.

Nexvet's two lead investigational products are NV-01 and NV-02, monoclonal antibodies to treat pain from osteoarthritis in dogs and cats respectively. In April, the company announced that its initial trial of NV-01 in 200 dogs would be unlikely to show that the drug produces a significant enough change in symptoms, and that it would need to launch a second study of 150 dogs at a cost of $1 million. In the earnings announcement, Nexvet said the second study is on track to be completed by the end of the year, at which point the company will determine what the future plan will be for the drug.

NV-02 has had a much smoother development path so far. In June, Nexvet said that during a proof-of-concept study in cats, the drug produced a statistically significant improvement in activity levels after just two weeks of treatment. Now the company is planning a pilot study in 90 cats, and it expects to report data from that study in early 2016, according to the earnings announcement.

Nexvet was founded on proprietary technology designed to rapidly create species-specific monoclonal antibodies. In treating osteoarthritis, the company has long said that its drugs could offer benefits over traditional nonsteroidal anti-inflammatory drugs, in that the antibodies could be given as infrequent injections and may be less likely to cause side effects, such as stomach upset. In addition to completing the trials designed to prove those attributes, Nexvet continues to look for opportunities to extend its technology to other therapeutic areas.

"Moving forward, we remain focused on delivering successful clinical development outcomes for our lead product candidates, while building operational capacity for a larger portfolio and commercialization activities," said Mark Heffernan, Nexvet's CEO, in the earnings release.