 Companys first IND accepted by FDA for MORF-057 in IBD Phase 1 study expected to begin in third-quarter 2020 Positive data presented at DDW 2020 further support MORF-057 preclinical profile WALTHAM, Mass., Aug. 10, 2020 GLOBE NEWSWIRE -- Morphic Therapeutic NASDAQ: MORF, a biopharmaceutical company developing a new generation of oral integrin therapies for the treatment of serious chronic diseases, today reported corporate highlights and second quarter 2020 financial results.Morphic has made tremendous strides with our lead program, MORF-057, an oral small molecule inhibitor of α4β7 in development to treat inflammatory bowel disease. Im so proud of the efforts of our team that has taken this program from the bench in Dr. Tim Springers Lab to the clinic in just a few short years, commented Praveen Tipirneni, M.D., president and chief executive officer of Morphic Therapeutic. We recently presented a substantive preclinical data set at Digestive Disease Week that support MORF-057s profile as a candidate for the treatment of IBD through the proven mechanism of α4β7 inhibition with many potential advantages, including oral administration. While we are just beginning our clinical journey, I congratulate the Morphic team for the achievement of these important milestones on our mission to deliver a new generation of oral integrin therapeutics.Peter Linde, M.D., Morphics chief medical officer, added, We expect to initiate a robust clinical development program for MORF-057 imminently, beginning with a phase 1 clinical trial designed to evaluate the safety, pharmacokinetic and pharmacodynamic profile of this compound with single and multiple ascending dose cohorts. The phase 1 trial will also generate important receptor occupancy data that we believe could provide early clinical proof of concept and dose selection guidance for use in future studies within the MORF-057 program in IBD patients.Morphic is developing MORF-057 as a selective, oral small molecule inhibitor of the α4β7 integrin, a target for the treatment of inflammatory bowel disease IBD with an initial focus on moderate-to-severe ulcerative colitis UC. The mechanism of α4β7 inhibition to treat IBD has been clinically validated by the success of the approved infused antibody therapy, vedolizumab.Second quarter and recent corporate highlights: Announced acceptance of the Investigational New Drug IND filing for MORF-057 by the U.S. Food and Drug Administration FDA, with a phase 1 clinical trial in healthy subjects expected to begin in the third quarter of 2020 The phase 1 trial is a randomized, double-blind placebo-controlled single and multiple ascending dose study in healthy adults evaluating endpoints including safety, tolerability, and pharmacokinetic and pharmacodynamic measures, as well as a concurrent food effect study The full data set from the MORF-057 phase 1 trial is expected to be presented by mid-2021 Presented new positive preclinical data supporting MORF-057 in models of increasing complexity at the virtual Digestive Disease Week 2020 These data demonstrated MORF-057s inhibition of α4β7 -expressing lymphocyte migration to the gut, a fundamental contributor to IBD, acting through the same mechanism of action as the approved antibody therapeutic, vedolizumab Further, oral administration of a MORF-057 analog in non-human primate studies demonstrated saturation of the α4β7 receptor throughout the entire 7-day dosing period receptor saturation at the dosages assessed in preclinical studies provide further evidence that MORF-057 is an extremely potent inhibitor of α4β7 and may produce clinical efficacy Continued progress in our collaboration with AbbVie on the development of integrin inhibitors, including αvβ6 and other integrin targets Appointed Marc Schegerin, M.D., MBA, as chief operating officer and chief financial officer; Dr. Schegerin was previously chief financial officer of ArQule until its acquisition by Merck. His prior roles include senior positions in finance, business development and healthcare investment bankingCOVID-19 Preparedness Morphic is not currently aware of any significant delay to its timelines due to the COVID-19 pandemic. In light of the evolving circumstances, Morphic will continue to assess any potential impact of the COVID-19 pandemic in dialogue with regulators, partners and vendors.Financial Results for Second Quarter 2020Net loss for the quarter ended June 30, 2020 was 15.9 million or 0.52 per share compared to a net loss of 9.4 million or 4.73 per share for the same quarter last year. Revenue was 7.7 million for the quarter ended June 30, 2020 compared to 5.6 million for the same quarter last year. The increase was due to higher level of research development efforts in collaboration agreements signed with AbbVie in October 2018 and Janssen in February 2019 Research and development expenses were 19.9 million for the quarter ended June 30, 2020, compared to 13.9 million in the same quarter last year. The 6.0 million increase year-over-year reflects development and manufacturing costs associated with lead wholly owned product candidate, MORF-057; research costs associated with preclinical studies related to our partnered product candidate MORF-720 with AbbVie; as well as increased personnel-related costs to support continued progress with the companys pipeline General and administrative expenses were 4.2 million for the quarter ended June 30, 2020, compared to 2.1 million in the same quarter last year. The 2.1 million increase year-over-year was primarily attributable to increased headcount and higher professional fees to operate as a public company along with consulting fees associated with ongoing business development activitiesAs of June 30, 2020, Morphic had cash, cash equivalents and marketable securities of 202.5 million, compared to 237.0 million at the end of 2019. Morphic believes its cash, cash equivalents and marketable securities balance as of June 30, 2020 will be sufficient to fund operating expenses and capital expenditure requirements at least through the end of 2022.Financial Tables Follow Morphic Holding Inc. Condensed Consolidated Statements of Operations unaudited in thousands, except share and per share data Three Months Ended Six Months Ended June 30 June 30 2020 2019 2020 2019 Collaboration revenue7,693 5,567 13,287 11,635 Operating expenses: Research and development 19,918 13,907 38,878 24,278 General and administrative 4,195 2,077 8,618 3,908 Total operating expenses 24,113 15,984 47,496 28,186 Loss from operations 16,420 10,417 34,209 16,551 Interest income, net 407 1,119 1,293 2,182 Total other income 407 1,119 1,293 2,182 Loss before benefit from provision for income taxes 16,013 9,298 32,916 14,369 Benefit from provision for income taxes 155 135 312 264 Net loss15,858 9,433 32,604 14,633 Net loss per share, basic and diluted0.52 4.73 1.08 7.54 Weighted-average common shares outstanding, basic and diluted 30,360,851 1,992,410 30,274,713 1,940,923 Morphic Holding Inc. Condensed Consolidated Balance Sheets unaudited in thousands June 30, 2020 December 31, 2019 Assets Cash, cash equivalents and marketable securities202,538 237,016 Other current assets 6,072 6,557 Total current assets 208,610 243,573 Other assets 3,389 3,862 Total assets211,999 247,435 Liabilities and Stockholders Equity Current liabilities45,284 35,350 Long-term liabilities 51,798 71,167 Total liabilities 97,082 106,517 Total stockholders equity 114,917 140,918 Total liabilities and stockholders equity211,999 247,435 About Morphic Therapeutic Morphic Therapeutic is a biopharmaceutical company developing a new generation of oral integrin therapies for the treatment of serious chronic diseases, including autoimmune, cardiovascular and metabolic diseases, fibrosis and cancer. In collaboration with AbbVie, Janssen and Schrödinger, Morphic is advancing its pipeline and discovery activities using its proprietary MInT technology platform which leverages the Companys unique understanding of integrin structure and biology. For more information, visit Note Regarding 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, including, but not limited to: Morphics plan to develop and commercialize oral small-molecule integrin therapeutics and Morphics expectations about timing and ability to commence or complete clinical studies and to obtain regulatory approvals for MORF-057, MORF-720, and other candidates in development, the ability of MORF-057 to treat inflammatory bowel disease, the potential impact of the COVID-19 pandemic and the sufficiency of our cash, cash equivalents and investments to fund our operations. Statements including words such as believe, plan, continue, expect, will be, develop, signal, potential, or ongoing and statements in the future tense are forward-looking statements. These forward-looking statements involve risks and uncertainties, as well as assumptions, which, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. 