OvaScience Reports Fourth Quarter and Year-End 2015 Financial Results

— Harald Stock, Ph.D., Appointed as CEO-Elect, Paul Chapman Appointed as
COO to Expand Global Commercial and Operational Expertise —

— Egg Allocation Study Commenced in Spain —

— Access to the AUGMENTSM Treatment Expanded to Japan —

— In 2016 OvaScience Will Continue to Build Global Infrastructure to
Support Its Fertility Platform in Select Regions —

WALTHAM, Mass.–(BUSINESS WIRE)–OvaScienceSM (NASDAQ: OVAS), a global fertility company
focused on the discovery, development and commercialization of new
treatment options, today reported fourth quarter and year end 2015
financial results. The Company also highlighted key commercial and
development progress related to its infertility treatments.

“This past year, we focused on strengthening our leadership as we grow
globally, expanding access to AUGMENT internationally and developing
OvaPrime and OvaTure,” said Michelle Dipp, M.D., Ph.D., Executive
Chairman and Chief Executive Officer of OvaScience. “Additionally, we
launched our first fertility treatment at select centers outside the
U.S., and demonstrated the potential of our robust pipeline. We are
accelerating the build of our commercial infrastructure including
operations and patient support services. To that end, we also recently
announced the appointment of CEO-elect Harald F. Stock to help us drive
the Company to the next stage of growth.”

2015 Accomplishments and Key Recent
Highlights

  • Strengthened executive leadership with appointment of CEO-elect
    Harald F. Stock, Ph.D., and COO Paul Chapman

    In January 2016,
    OvaScience announced the appointment of Dr. Stock as CEO-elect with a
    transition planned for July 1, 2016. Dr. Stock has nearly two decades
    of experience driving global commercial growth in the healthcare
    industry, as well as a strong operational track record of increasing
    sales of multiple products in Asia, Europe, the U.S. and other key
    markets around the world. He has served on the OvaScience Board since
    2013. Michelle Dipp was appointed Executive Chair of the Board of
    Directors and will remain CEO until July 1. In her new role, Dr. Dipp
    will work closely with Dr. Stock to evolve the Company’s corporate
    strategy and focus on business development.

Earlier today, OvaScience announced the appointment of Paul W.D. Chapman
as Chief Operating Officer, effective immediately. Mr. Chapman, an
industry veteran with substantial commercial and operational experience,
joins the Company from ArjoHuntleigh AB, where he served as Regional
President of North America.

  • Prospective, randomized, controlled egg allocation study at IVI
    Group

The Company is working with the IVI Group, the largest IVF clinic
network in the world, to enroll patients in a controlled, double-blind,
prospective and randomized egg allocation study of the AUGMENT
treatment. This adaptive study is designed to evaluate the success rates
of standard IVF and the AUGMENT treatment.

The AUGMENT treatment is specifically designed to improve egg health by
using mitochondria from a patient’s own egg precursor (EggPCSM)
cells during IVF. Improved egg health is essential for fertilization and
embryo development. The AUGMENT treatment is not available in the U.S.

  • Expanded access to the AUGMENT treatment into Japan

OvaScience expanded the availability of the AUGMENT treatment in select
international regions including Japan, one of the largest IVF markets in
the world. The treatment is offered through a non-commercial
preceptorship training program at IVF JAPAN, one of the most prestigious
fertility clinic systems in that country. The initiation of the
preceptorship training program, in which patients will receive the
AUGMENT treatment, followed approval from the Japan Society of
Obstetrics and Gynecology (JSOG).

  • Commenced preceptorship training program with the OvaPrime treatment

OvaScience commenced a non-commercial preceptorship training program
with the OvaPrime treatment outside the U.S. The Company will decide
whether to progress the program, based on data, by the end of 2016.

The OvaPrime treatment is a potential fertility treatment that could
enable a woman who makes too few or no eggs to increase her egg reserve.
Poor egg reserve affects approximately 25 percent of those seeking
fertility treatment. The OvaPrime treatment is designed to transfer a
woman’s EggPC cells to her own ovary where they may mature into
fertilizable eggs during a standard IVF process. The OvaPrime treatment
is not available in the U.S.

  • Defined process for the OvaTure treatment

The Company has also defined the process for maturing EggPC cells that
is required for development of the OvaTure treatment.

The OvaTure treatment is a potential next-generation IVF treatment that
could help a woman produce healthy, young, fertilizable eggs without
hormone injections by maturing her EggPC cells into eggs outside the
body. It may be an option for women with compromised eggs, who are
unable to make eggs or who may be unwilling or unable to undergo hormone
hyperstimulation, such as women diagnosed with cancer.

  • More than 25 babies born using the AUGMENT treatment for infertility

The first live birth of a baby who was conceived using the AUGMENT
treatment occurred in Toronto, Canada and was announced on May 7, 2015.
To date, there have been more than 25 babies born with the AUGMENT
treatment.

  • Clinical benefit of the AUGMENT treatment published
    in peer-reviewed journal

A peer-reviewed analysis of the AUGMENT treatment showed statistically
significant improvements in embryo selection and transfer compared to
standard IVF.1 The first published analysis comparing the
AUGMENT treatment to standard IVF using an egg allocation method
demonstrated statistically significant higher rates of embryo selection
and transfer with the AUGMENT treatment based on standard embryo quality
measures, including pre-implantation genetic diagnosis/screening.
Improved pregnancy rates with the AUGMENT treatment were also reported
in the publication.

Fourth Quarter Financial Results

  • Revenue for the three months ended December 31, 2015 was $0.2 million.
    The revenue recognized in the fourth quarter relates to 14 AUGMENT
    cycles at a blended cost per treatment, including discounted
    treatments offered under various pricing programs launched during the
    fourth quarter. These programs are designed to broaden the customer
    base knowledge and hands on experience with the AUGMENT treatment. The
    company did not record revenue in 2014 as the AUGMENT treatment was
    introduced commercially in 2015.
  • Net loss for the three months ended December 31, 2015 was $20.6
    million, or ($0.76) per share, as compared to net loss of $18.9
    million, or ($0.79) per share, for the three months ended December 31,
    2014. This included non-cash stock-based compensation expense of $4.9
    million. The increase is primarily attributable to planned higher
    personnel costs, and costs associated with the launch of the AUGMENT
    treatment in certain international IVF clinics. Commercial costs
    include legal and consulting services and establishment of lab-based
    operations, which will also support introductions of future fertility
    treatments.
  • Research and development expense for the three months ended December
    31, 2015 was $4.7 million, compared to $7.3 million for the same
    period in 2014. This decrease is primarily driven by a decrease of
    $2.7 million related to stock-based compensation expense, including a
    $3.1 million decrease in expense for non-employee awards driven by
    Founders’ shares being fully vested and expensed in the first quarter
    of 2015, partially offset by a $0.4 million increase in expense for
    employee awards driven by the hiring of additional personnel.
  • Selling, general and administrative expense for the three months ended
    December 31, 2015 was $14.6 million, as compared to $11.0 million for
    the same period in 2014. This increase was primarily a result of $2.4
    million for employee compensation and related benefits, including
    stock-based compensation expense driven by the hiring of additional
    personnel in 2015, $1.8 million to support our international growth,
    $0.4 million of facilities expenses and $0.4 million in accounting,
    tax and other expenses offset by a decrease of $1.5 million for costs
    associated with our non-commercial preceptorship training program due
    to higher patient enrollment in the fourth quarter of 2014.

At December 31, 2015, OvaScience had cash, cash equivalents and
short-term investments of $126.7 million.

Conference Call
OvaScience will host a conference call at
4:30 p.m. EST today, Thursday, February 25, 2016, to discuss these
financial results and provide an update on the company. The conference
call can be accessed by dialing (888) 424-8151 (U.S.) or (847) 585-4422
(international) five minutes prior to the start of the call and
providing the passcode 5767395. Additionally, the live, listen-only
webcast of the conference call can be accessed by visiting the Investors
section of the Company’s website at www.ovascience.com.
A replay of the conference call will be available from 7:00 p.m. EST on
Thursday, February 25, 2016, through 11:59 p.m. EST on Thursday, March
3, 2016, and may be accessed by visiting OvaScience’s website or by
dialing (888) 843-7419 (U.S.) and (630) 652-3042 (international). The
replay access code is 5767395.

About OvaScience
OvaScience (NASDAQ: OVAS) is a global
fertility company dedicated to improving treatment options for women
around the world. OvaScience is discovering, developing and
commercializing new fertility treatments because we believe women
deserve more options. Each OvaScience treatment is based on the
Company’s proprietary technology platform that leverages the
breakthrough discovery of egg precursor (EggPCSM) cells –
immature egg cells found inside the protective ovarian lining. The
AUGMENTSM treatment, a fertility option specifically designed
to improve egg health, is available in certain IVF clinics in select
international regions. OvaScience has commenced a non-commercial
preceptorship training program with the OvaPrimeSM treatment,
which could increase a woman’s egg reserve, and is developing the OvaTureSM treatment,
a potential next-generation IVF treatment that could help a woman
produce healthy, young, fertilizable eggs without hormone injections.
OvaScience treatments are not available in the U.S. For more
information, please visit www.ovascience.com
and www.augmenttreatment.com
and connect with us on Twitter
and Facebook.

Forward-Looking Statements
This press release includes
forward-looking statements about the Company’s plans for the AUGMENT
treatment, OvaPrime treatment and OvaTure treatment, including
statements relating to the Company’s plans to build its commercial
infrastructure, plans for growth, plans to decide whether to progress
the OvaPrime program, based on data, by the end of 2016 and potential
indications for the OvaPrime and OvaTure treatments. Actual results may
differ materially from those indicated by these forward-looking
statements as a result of various important factors, including risks
related to:
the possibility that international IVF clinics that
we work with may determine not to provide or
continue providing
the AUGMENT treatment or OvaPrime treatment, or to delay providing such
treatments, based on clinical efficacy, safety or commercial, logistic,
regulatory or other reasons; the science underlying our treatments
(including the AUGMENT, OvaPrime and OvaTure treatments), which is
unproven; our ability to obtain regulatory approval or licenses where
necessary for our treatments; our ability to develop our treatments on
the timelines we expect, if at all; our ability to commercialize our
treatments, on the timelines we expect, if at all; as well as those
risks more fully discussed in the “Risk Factors” section of our most
recently filed Quarterly Report on Form 10-Q and/or Annual Report on
Form 10-K. The forward-looking statements contained in this press
release reflect our current views with respect to future events. We
anticipate that subsequent events and developments will cause our views
to change. However, while we may elect to update these forward-looking
statements in the future, we specifically disclaim any obligation to do
so. These forward-looking statements should not be relied upon as
representing our view as of any date subsequent to the date hereof.

 

OvaScience, Inc.

Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
           
As of
December 31,
2015
December 31,
2014
Assets
Current assets:
Cash and cash equivalents $ 43,224 $ 6,414
Short-term investments 83,438 53,817
Prepaid expenses and other current assets 3,199 1,647
Total current assets 129,861 61,878
Property and equipment, net 8,313 3,367
Restricted cash 439 197
Other long-term assets 130
Total assets $ 138,613 $ 65,572
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 3,352 $ 2,520
Accrued expenses and other current liabilities 7,891 7,654
Total current liabilities 11,243 10,174
Other non-current liabilities 520 73
Total liabilities 11,763 10,247
Total stockholders’ equity 126,850 55,325
Total liabilities and stockholders’ equity $ 138,613 $ 65,572
 
 
OvaScience, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
 
      Three Months Ended
December 31,
      Year Ended
December 31,
2015       2014       2015       2014
Revenues $ 157 $       $ 277 $
Costs and expenses:
Costs of revenues 1,158 2,249
Research and development 4,667 7,273 18,433 21,784
Selling, general and administrative 14,572       11,016       51,594       26,149
Total costs and expenses 20,397       18,289       72,276       47,933
Loss from operations (20,240)       (18,289)       (71,999)       (47,933)
Interest income (expense), net 150 (17) 436 (126)
Other (expense) income, net (51) 84 (20) 122
Loss from equity method investment (385)       (668)       (1,561)       (1,583)
Loss before income taxes (20,526) (18,890) (73,144) (49,520)
Income tax expense   75                 75        
Net loss $ (20,601)       $ (18,890)       $ (73,219)       $ (49,520)
Net loss per share—basic and diluted $ (0.76)       $ (0.79)       $ (2.70)       $ (2.19)
Weighted average number of shares used in net loss per share—basic
and diluted
27,280       23,998       27,085       22,647
 

###

1 Fakih, M. et al. Journal of Fertilization: In Vitro,
IVF-Worldwide, Reproductive Medicine, Genetics & Stem Cell Biology, 2015.

Contacts

OvaScience
Media and Investor Contact:
Rebecca
J. Peterson, 617-420-8736
rpeterson@ovascience.com