How Might the Immunic Combination with Vital Therapies Impact Investors

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Vital Therapies, Inc. (NASDAQ: VTL) is a biotherapeutic company, focused on developing cell-based therapies for the treatment of acute forms of liver failure.

The Company’s ELAD® System, an extracorporeal human allogeneic cellular liver therapy, recently reported top-line data from its phase 3 clinical trial in severe alcoholic hepatitis. Although there was a numerical improvement in survival in the ELAD-treated group between three months and one year following randomization, the study failed to meet the primary endpoint of a significant improvement in overall survival through at least ninety-one days assessed using the Kaplan Meier statistical method. The secondary endpoint of the proportion of survivors at study day ninety-one also showed no statistically significant difference between the groups.

In light of these results, the Company does not believe the ELAD System can be approved in the United States or European Union, if ever, without additional clinical trials that would require substantial capital and time to complete. Consequently, the Company has ceased any further development of the ELAD System and is exploring strategic options.

Recent Events

April 04, 2019. Vital Therapies announced that its stockholders voted to approve the proposals required to complete the business combination with Immunic AG at a special meeting of Vital Therapies stockholders held earlier today.  Approximately 98.82% of the shares voted at the special stockholder meeting voted in favor of the Exchange Agreement proposal, with each of the other related proposals also receiving sufficient votes for approval. The Boards of Directors of both Vital Therapies and Immunic unanimously approved the business combination, which is expected to be consummated by mid-April 2019. In connection with the closing of the transaction, Vital Therapies will change its name to Immunic, Inc. and the Company’s shares will commence trading on The Nasdaq Stock Market under the symbol “IMUX”.

Immunic is a privately-held clinical-stage biopharmaceutical company focused on developing best-in-class therapies for the treatment of chronic inflammatory and autoimmune diseases. Immunic’s lead program, IMU-838, is an orally available, next-generation selective immune modulator which inhibits the intracellular metabolism of activated immune cells by blocking the enzyme dihydroorotate dehydrogenase (DHODH). IMU-838 was successfully tested in two phase 1 clinical trials in 2017 and is currently being tested in a phase 2 trial in patients with ulcerative colitis. Immunic intends to initiate additional phase 2 trials in patients with Crohn’s disease and multiple sclerosis throughout the course of 2019. Furthermore, the Mayo Clinic plans to start a phase 2 study testing IMU-838 activity in patients with primary sclerosing cholangitis (PSC) in the first quarter of 2019.

Immunic’s second asset is IMU-935, an orally available small molecule inverse agonist of RORγt, a nuclear receptor known to influence the production of cytokines involved in autoimmune disease. The IMU-935 program, currently in preclinical development, is expected to enter clinical phase 1 trials in mid-2019.

Under the terms of the agreement, on a pro forma basis and after giving effect to the concurrent financing, current Vital Therapies stockholders are expected to own approximately 11% of the company and current Immunic stockholders are expected to own approximately 89% of the company. The actual allocation will be subject to adjustment based on Vital Therapies’ net cash balance at the closing of the transaction. Prior to closing, Vital Therapies will seek stockholder approval to affect a reverse split of its outstanding common stock to satisfy listing requirements of the NASDAQ Global Market.


 VTL is a biotherapeutic company that has been developing a cell-based therapy targeting the treatment of acute forms of liver failure. Their initial product candidate, the ELAD ® System, or ELAD, is a human-cell-based, bio-artificial liver, which was being developed to improve rates of survival among patients with acute forms of liver failure. Since inception, they have devoted essentially all of their efforts to product development, clinical testing and pilot manufacturing and have not recognized revenues from planned principal operations.

In September 2018, VTL reported top-line data from a phase 3 clinical trial of ELAD, VTL-308, in 151 subjects with severe alcoholic hepatitis. Although there was a numerical improvement in survival in the ELAD-treated group between three months and one year following randomization, the study failed to meet the primary endpoint of a significant improvement in overall survival through at least ninety-one days. The secondary endpoint of the proportion of survivors at study day ninety-one also showed no statistically significant difference between the groups.

Financial review

Year Ended December 31, 2018

The Company reported a net loss of $41.5 million for the year ended December 31, 2018, which compared with a net loss of $52.1 million for the prior year.  This resulted in a net loss of $0.98 per share for the year ended December 31, 2018, as compared to a net loss of $1.31 per share for 2017, on both a basic and diluted basis.

Research and development expenses decreased to $24.8 million for the year ended December 31, 2018 as compared to $39.3 million for the year ended December 31, 2017. General and administrative expenses were $13.6 million for the year ended December 31, 2018, as compared to $13.3 million for the year ended December 31, 2017.

Cash and cash equivalents at December 31, 2018, totaled $13.3 million compared to $56.9 million at December 31, 2017.

Stock influences and risk factors

Stockholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the Company following the closing of the Transaction as compared to their current ownership and voting interest.

They are substantially dependent on our remaining employees to facilitate the consummation of a strategic transaction.

They are a clinical-stage company with no approved products.

The market price of their common stock following the Transaction may decline as a result of the Transaction.

Stock chart

On Friday, April 5, 2019, VTL shares closed at $.51 per share on traded volume of 154 million shares. The current RSI (14) is 87.29

At $.51, VTL shares are trading above their 50 DMA of $.22 and below their 200 DMA of $2.47.


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