Regulus Provides Strategic Update and Reports Fourth Quarter and Year-End 2013 Financial Results and Recent Highlights

Regulus Provides Strategic Update and Reports Fourth Quarter and Year-End 2013
                   Financial Results and Recent Highlights

- Achieved All Goals on 'Road to the Clinic'; Launched 'Clinical Map
Initiative'-

- Regulatory Approval Received for Phase I Clinical Study of RG-101 -

- Strengthened Focus on Orphan Diseases and Oncology -

- Exceeded YE 2013 Guidance with $114.0M in Cash -

PR Newswire

LA JOLLA, Calif., Feb. 27, 2014

LA JOLLA, Calif., Feb. 27, 2014 /PRNewswire/ -- Regulus Therapeutics Inc.
(NASDAQ:RGLS), a biopharmaceutical company leading the discovery and
development of innovative medicines targeting microRNAs, today provided an
update on its corporate strategy and reported financial results for the fourth
quarter and year ended December 31, 2013, including a summary of recent
corporate highlights.

Corporate Strategy Update:

Achieved All Goals on 'Road to the Clinic' and Launches 'Clinical Map
Initiative'

  oRegulus announced today that it has achieved all goals under its 'Road to
    the Clinic' Strategy:

       oRegulus has nominated two microRNA candidates for clinical
         development, RG-101, a GalNAc-conjugated anti-miR targeting miR-122
         for the treatment of chronic hepatitis C virus infection ("HCV"), and
         RG-012, an anti-miR targeting microRNA-21 ("miR-21") for the
         treatment of Alport Syndrome, a life-threatening kidney disease
         driven by genetic mutations with no approved therapy;
       oRegulus has received regulatory approval to initiate the Phase I
         clinical study of RG-101; and
       oRegulus exceeded its previously issued cash guidance, ending 2013
         with $114.0 million in cash, cash equivalents and short-term
         investments.

  oRegulus also announced today its 'Clinical Map Initiative', which outlines
    certain corporate goals to advance its microRNA therapeutics pipeline over
    the next several years:

       oDemonstrate human proof-of-concept results in the Phase I clinical
         study of RG-101 for the treatment of HCV by the end of 2014;
       oInitiate a Phase I clinical study of RG-012 for the treatment of
         Alport Syndrome in the first half of 2015;
       oNominate a third microRNA candidate for clinical development by the
         end of 2014; and
       oMaintain a strong financial position and end 2014 with at least $75.0
         million in cash, cash equivalents and short-term investments.

"In 2013, we demonstrated significant progress toward our goal of building a
leading biopharmaceutical company dedicated to discovering and developing a
new and major class of medicines targeting microRNAs. Today, we are pleased
to have achieved our goals on the 'Road to the Clinic' and transition into a
clinical-stage company with the launch of our 'Clinical Map Initiative," said
Kleanthis G. Xanthopoulos, Ph.D., President and CEO of Regulus. "We believe
that 2014 will be another exciting year for Regulus. We expect to commence
dosing in our Phase I clinical trial of RG-101, advance RG-012 toward clinical
development, potentially nominate a third candidate for clinical development
and maintain a strong financial position to support these goals. Importantly,
we look forward to our first human proof-of-concept study with RG-101 in HCV
patients. If positive, these results will go a long way toward validating our
technology platform and approach to treating disease. Overall, we are pleased
with our achievements and we look forward to building a meaningful clinical
portfolio based on microRNA therapeutics."

Recent Pipeline Highlights

  oRegulatory Approval Received for Phase I Clinical Study of RG-101.

       oIn November 2013 at the American Association for the Study of Liver
         Diseases (AASLD) meeting, Regulus presented data evaluating RG-101
         for in vitro and in vivo potency, pharmacokinetic/pharmacodynamics,
         toxicology and safety pharmacology and inhibition of HCV replication.
         In addition, Regulus has also tested RG-101 for efficacy in a human
         chimeric liver mouse model infected with HCV genotypes 1a and 3a. In
         this model, up to a 2 log reduction in HCV viral load titer was
         observed in both genotypes after a single dose of RG-101. The
         duration of action observed for RG-101 supports the potential for a
         once-a-month dosing regimen. To date, RG-101 has demonstrated an
         excellent preclinical safety profile and has been well tolerated.
       oThe Phase I clinical study of RG-101 will have four parts: (i) a
         single ascending-dose study in healthy volunteer subjects; (ii) a
         multiple-ascending dose study in healthy volunteer subjects; (iii) a
         single-dose drug-drug interaction study of RG-101 in combination with
         an approved oral direct-acting antiviral ("DAA") in healthy volunteer
         subjects; and (iv) a single-dose study in HCV patients to assess the
         safety and viral load reduction, which is designed to demonstrate
         human proof-of-concept. The primary objective of the Phase I
         clinical study of RG-101 is to evaluate safety and tolerability and
         the secondary objectives are to evaluate pharmacokinetics, viral load
         reduction and any impact an oral DAA may have on the pharmacokinetics
         of RG-101. Up to approximately 100 healthy volunteer subjects and
         HCV patients are planned to be enrolled in the Phase I study, which
         is being conducted in the Netherlands, and dosing is expected to
         commence in the near term.

  oStrengthened Focus on Orphan Diseases and Oncology Indications.

       oNominated RG-012 as Clinical Development Candidate for the Treatment
         of Alport Syndrome. In November 2013 at the American Society of
         Nephrology (ASN) Kidney Week meeting, Regulus presented data
         demonstrating that RG-012 is a potent inhibitor of miR-21 in both in
         vitro and in vivo preclinical models and that subcutaneous
         administration of RG-012 has significantly decreased the rate of
         renal fibrosis and increased the lifespan of the mice up to 50%.
         RG-012 has been well tolerated to date with a favorable
         pharmacokinetic profile that supports the potential for a once/week
         dosing regimen. Regulus expects to initiate a natural history of
         disease study in the third quarter of 2014 and to initiate a Phase I
         clinical study of RG-012 for the treatment of Alport Syndrome in the
         first half of 2015.
       oRenewed Strategic Alliance with Sanofi; Received Additional $10
         Million Equity Investment. Regulus renewed its strategic alliance
         with Sanofi to discover, develop, and commercialize microRNA
         therapeutics to focus on specific orphan disease and oncology
         targets. Regulus will lead development of its RG-012 program for the
         treatment of Alport Syndrome, its program targeting miR-21 in
         oncology and its program targeting microRNA-221/microRNA-222 for the
         treatment of hepatocellular carcinoma. Regulus is responsible for
         advancing the clinical candidates in these programs to
         proof-of-concept. Sanofi will have the exclusive option, exercisable
         after proof-of-concept, to take over further development and
         commercialization of each microRNA therapeutic program. If Sanofi
         chooses to exercise its option on any program, Sanofi will reimburse
         Regulus for a significant portion of its preclinical and clinical
         development costs and will pay Regulus an option exercise fee.
         Regulus is eligible to receive development and commercialization
         milestone payments and will have an option to co-promote in the
         United States or receive royalty payments in the mid 10% to 20% range
         on any of these programs. 
       oDiscovery Efforts Continued to Support Therapeutic Pipeline. Regulus
         continued to pursue several additional undisclosed microRNA targets,
         namely for orphan disease and oncology indications, with the goal of
         potentially nominating a third candidate for clinical development by
         the end of 2014.

  oAstraZeneca Collaboration to Focus on miR-103/107, miR-19 and Replacement
    Target for miR-33 Program.

       oUnder its collaboration with AstraZeneca to discover and develop
         microRNA therapeutics for cardiovascular diseases, metabolic diseases
         and oncology, Regulus announced today that the ongoing efforts on two
         of the collaboration programs are targeting microRNA-103/107 for the
         treatment of metabolic diseases and microRNA-19 for oncology
         indications, a target selected by AstraZeneca in October 2013.
         Additionally, Regulus announced today that the companies have agreed
         to terminate the program targeting microRNA-33 ("miR-33") for the
         treatment of atherosclerosis as a collaboration target. AstraZeneca
         has a contractual right to substitute a new target for miR-33.

"Our scientific accomplishments in 2013 have advanced our therapeutic pipeline
in a meaningful way and have prepared us to enter the clinic," said Neil W.
Gibson, Ph.D., Chief Scientific Officer of Regulus. "Additionally, we are
pleased to have strengthened our focus on orphan diseases and oncology
indications and we look forward to expanding our clinical portfolio in the
coming year."

Recent Corporate Highlights

  oExpanded microRNA Biomarkers Platform and Established Regulus
    microMarkers™ R&D  Division. The division utilizes a
    clinically-validated, highly reproducible, proprietary technology platform
    to identify microRNAs as potential biomarkers for disease. In 2012,
    Regulus formed a research collaboration with Biogen Idec focused on the
    discovery of microRNAs as biomarkers for multiple sclerosis and has
    entered into an arrangement with another leading, commercial-stage
    pharmaceutical company to explore microRNAs as biomarkers for specific
    patient populations.
  oAttracted Key Talent. Regulus  strengthened its executive management team
    with the addition of David Szekeres as Chief Business Officer and General
    Counsel. Additionally, Martin Beaulieu, Ph.D. joined Regulus as head of
    the Regulus microMarkers™ division.

Fourth Quarter and Year-End 2013 Financial Results and 2014 Financial Outlook

Regulus completed 2013 with $114.0 million in cash, cash equivalents and
short-term investments, compared to $98.1 million as of December 31, 2012.

Regulus reported a net loss of $1.9 million and $18.7 million for the quarter
and year ended December 31, 2013, respectively, compared to $6.9 million and
$17.4 million for the same periods in 2012.

Basic and diluted net loss per share was $0.05 and $0.11 for the quarter ended
December 31, 2013, respectively, compared to basic and diluted net loss per
share of $0.22 for the same period in 2012.Basic and diluted net loss per
share was $0.49 for the year ended December 31, 2013, compared to basic and
diluted net loss per share of $2.12 for 2012. Comparability of net loss per
share for the periods presented is impacted by the initial public offering and
concurrent common stock issuances in October 2012 and the public offering of
common stock in July 2013.

Regulus reported revenue of $5.5 million for the quarter ended December 31,
2013, compared to $3.2 million for the same period in 2012. Revenue for the
quarter ended December 31, 2013 included $4.5 million from the Sanofi
collaboration and license agreement and $1.0 million from other strategic
alliances and collaborations, including approximately $0.3 million in research
milestones. The increase in revenues in the fourth quarter 2013 compared to
the same period in 2012 was primarily due to the incremental recognition of
$3.3 million from the change in Regulus' estimated period of performance for
the research term within the Sanofi collaboration and license agreement, which
extended through the end of the option period in early 2014. Revenues were
$19.6 million for the year ended December 31, 2013 compared to $12.7 million
in 2012. Revenues for the year ended December 31, 2013 included approximately
$15.4 million from the Sanofi collaboration and license agreement and $4.2
million from other strategic alliances and collaborations. Revenue during
these periods consisted primarily of amortization of upfront payments received
from Regulus' strategic alliances and collaborations, which is recognized over
the estimated period of performance.

Research and development expenses were $8.2 million and $29.9 million for the
quarter and year ended December 31, 2013, compared to $5.6 million and $20.3
million for the same periods in 2012. These increases were substantially
attributable to IND-enabling activities for RG-101 and other programs in
2013. Regulus expects its research and development expenses to continue to
increase to the extent it commences clinical studies and initiates additional
IND-enabling activities.

General and administrative expenses were $1.9 million and $7.4 million for the
quarter and year ended December 31, 2013, compared to $1.9 million and $4.9
million for the same periods in 2012. The increase in 2013 was primarily
attributable to operating costs associated with the growth of the company and
incremental costs associated with being a public reporting company.

Net loss in the quarter ended December 31, 2013 included a non-cash gain of
$2.6 million from the change in value of the amended and restated convertible
promissory note originally issued to GlaxoSmithKline plc in 2010, with such
change in value attributable to a decrease in value of Regulus common stock
during the quarter. Net loss in the quarter ended December 31, 2012 included
a non-cash charge of $2.6 million, with such change in value attributable to
an increase in value of common stock of the Company during the quarter. For
the years ended December 31, 2013 and 2012, total net non-cash charges
associated with the convertible promissory note were $1.1 million and $4.7
million, respectively.

Regulus expects to finish 2014 with at least $75.0 million in cash, cash
equivalents and short-term investments, which includes the $10.0 million
common stock purchase made by its strategic alliance partner Sanofi in
February 2014.

Conference Call & Webcast Information

Regulus will host a conference call and webcast at 5:00 p.m. Eastern Standard
Time today to discuss its fourth quarter and year-end 2013 financial results,
recent company highlights and its expectations for 2014. A live webcast of
the call will be available online at www.regulusrx.com. To access the call,
please dial (877) 257-8599 (domestic) or (970) 315-0459 (international) and
refer to conference ID 2177234. To access the telephone replay of the call,
dial (855) 859-2056 (domestic) or (404) 537-3406 (international), passcode
2177234. The webcast and telephone replay will be archived on the company's
website following the call.

About Regulus

Regulus Therapeutics Inc. (NASDAQ:RGLS) is a biopharmaceutical company leading
the discovery and development of innovative medicines targeting
microRNAs.Regulus is uniquely positioned to leverage a mature therapeutic
platform that harnesses the oligonucleotide drug discovery and development
expertise of Alnylam Pharmaceuticals, Inc. and Isis Pharmaceuticals, Inc.,
which founded the company. Regulus has a well-balanced microRNA therapeutic
pipeline entering clinical development, an emerging microRNA biomarkers
platform to support its therapeutic programs, and a rich intellectual property
estate to retain its leadership in the microRNA field. Regulus intends to
focus its proprietary efforts on developing microRNA therapeutics for oncology
indications and orphan diseases and is currently advancing several programs
toward clinical development in oncology, fibrosis and metabolic diseases.
Specifically, Regulus is developing RG-012, an anti-miR targeting microRNA-21
for the treatment of Alport Syndrome, a life-threatening kidney disease driven
by genetic mutations with no approved therapy, and RG-101, a GalNAc-conjugated
anti-miR targeting microRNA-122 for the treatment of chronic hepatitis C virus
infection. Regulus' commitment to innovation and its leadership in the
microRNA field have enabled the formation of strategic alliances with
AstraZeneca, GlaxoSmithKline and Sanofi. In addition, the Company has
established Regulus microMarkers™, a research and development division focused
on identifying microRNAs as biomarkers of human disease, which is designed to
support its therapeutic pipeline, collaborators and strategic partners.

For more information, please visithttp://www.regulusrx.com.

Forward-Looking Statements

Statements contained in this press release regarding matters that are not
historical facts are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements
associated with financial estimates (including Regulus' projected cash at the
end of 2014), the projected sufficiency of Regulus' capital position for
future periods, the expected ability of Regulus to undertake certain
activities and accomplish certain goals (including with respect to development
and other activities related to RG-012 and RG-101 and with respect to the
nomination of a third microRNA candidate for clinical development), the
projected timeline of clinical development activities, and expectations
regarding future therapeutic and commercial potential of Regulus' business
plans, technologies and intellectual property related to microRNA therapeutics
being discovered and developed by Regulus. Because such statements are
subject to risks and uncertainties, actual results may differ materially from
those expressed or implied by such forward-looking statements. Words such as
"believes," "anticipates," "plans," "expects," "intends," "will," "goal,"
"potential" and similar expressions are intended to identify forward-looking
statements. These forward-looking statements are based upon Regulus' current
expectations and involve assumptions that may never materialize or may prove
to be incorrect. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking statements as a
result of various risks and uncertainties, which include, without limitation,
risks associated with the process of discovering, developing and
commercializing drugs that are safe and effective for use as human
therapeutics, and in the endeavor of building a business around such drugs.
These and other risks concerning Regulus' financial position and programs are
described in additional detail in Regulus filings with the Securities and
Exchange Commission. All forward-looking statements contained in this press
release speak only as of the date on which they were made. Regulus undertakes
no obligation to update such statements to reflect events that occur or
circumstances that exist after the date on which they were made.

Regulus Therapeutics Inc.

Selected Financial Information

Condensed Statement of Operations

(In thousands, except share and per share data)
                                         Three months ended          Year ended

                                         December 31,                December 31,
                                         2013          2012          2013          2012
Revenues:
Revenue under strategic                  $ 5,454       $ 3,238       $ 19,569      $ 12,700
alliances
Total revenues                           5,454         3,238         19,569        12,700
Operating expenses:
Research and development                 8,232         5,607         29,942        20,342
General and administrative               1,884         1,934         7,429         4,932
Total operating expenses                 10,116        7,541         37,371        25,274
Loss from operations                     (4,662)       (4,303)       (17,802)      (12,574)
Other income (expense), net              2,716         (2,555)       (889)         (4,844)
Loss before income taxes                 (1,946)       (6,858)       (18,691)      (17,418)
Income tax (benefit) expense             (19)            18          (23)          (10)
Net loss                                 $ (1,927)     $ (6,876)     $ (18,668)    $ (17,408)


Net loss per share:
 Basic                                $ (0.05)      $ (0.22)      $ (0.49)      $ (2.12)
 Diluted                              $ (0.11)      $ (0.22)      $ (0.49)      $ (2.12)
Weighted average shares used to compute
net loss per share:
                                                         
 Basic                                  41,779,422                  38,479,447    8,212,538
                                                         31,907,152
 Diluted                                43,191,081    31,907,152    38,479,447    8,212,538



Regulus Therapeutics Inc.

Condensed Balance Sheets

(In thousands)
                                                   December 31,  December31,
                                                   2013          2012
Assets
Cash, cash equivalents and short-term investments  $   114,005   $   98,100
Other current assets                               3,177         829
Non-current assets                                 5,883         4,589
 Total assets                                    $   123,065   $   103,518
Liabilities and stockholders' equity
Current liabilities                                $   5,482     $   2,317
Total deferred revenue                             11,388        28,207
Convertible notes payable, at fair value           11,279        10,134
Other long-term obligations liabilities            1,459         767
Stockholders' equity                               93,457        62,093
 Total liabilities and stockholders' equity      $   123,065   $   103,518



SOURCE Regulus Therapeutics Inc.

Website: http://www.regulusrx.com
Contact: Amy Conrad, Director, Investor Relations and Corporate
Communications, Regulus Therapeutics Inc., 858-202-6321, aconrad@regulusrx.com
or Media: Liz Bryan, Spectrum Science, lbryan@spectrumscience.com,
202-955-6222 x2526
 
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