OvaScience Reports First Quarter 2016 Financial Results

— AUGMENT treatment gains traction in growing fertility market and
Company expands access internationally —

— New research supports AUGMENT and pipeline treatments—

WALTHAM, Mass.–(BUSINESS WIRE)–OvaScienceSM (NASDAQ: OVAS), a global fertility company
focused on the discovery, development and commercialization of new
treatment options, today reported its first quarter 2016 financial
results and highlighted recent accomplishments.

“OvaScience is currently focused on building our operational platform to
support the expansion of the AUGMENT treatment. We are focusing our
AUGMENT commercial efforts to target Canada and Japan as our initial,
primary commercial markets,” said Michelle Dipp, M.D., Ph.D., Executive
Chair and Chief Executive Officer of OvaScience. “We remain committed to
building a pipeline of promising fertility treatments and continue to
make progress in developing our OvaPrime and OvaTure programs. Over the
coming months, we look forward to presenting validating data on our
science at upcoming medical meetings and industry conferences. In
addition, by year-end, we expect to update you on our path forward for
OvaPrime.”

First Quarter and Recent Highlights

AUGMENT Treatment: The AUGMENTSM treatment is designed
to improve egg health by using mitochondria from a woman’s own egg
precursor (EggPCSM) cells during in vitro
fertilization (IVF). Improved egg health is essential for fertilization
and embryo development.

  • Implementing deep and narrow commercial expansion
    The
    Company is growing its business in Canada. Clinics with which
    OvaScience has existing relationships are continuing to offer the
    AUGMENT treatment. Further, OvaScience recently entered into
    agreements under which two new Canadian clinics, CReATe Fertility
    Centre and NewLife Fertility Centre, will offer the AUGMENT treatment.

    In
    addition, enrollment of the non-commercial preceptorship training
    program at IVF Japan is complete. The Company continues to make
    progress toward commercialization in Japan.

  • Advancing egg allocation study with the IVI Group
    OvaScience
    is currently working with the IVI Group in Valencia, Spain, the
    largest IVF clinic network in the world. Enrollment of patients in an
    adaptive, controlled, double-blind, prospective and randomized egg
    allocation study to evaluate the success rates of the AUGMENT
    treatment compared to standard IVF is ongoing. The Company expects to
    announce data from the study in the second half of 2017.
  • Scientific data further validating the AUGMENT treatment
    approach published in Scientific Reports

    In March
    2016, data from a proof-of-concept study using a large animal model
    was published in a peer-reviewed article in Scientific Reports, a
    Nature journal. Results further validate the AUGMENT
    treatment’s mechanism of action and support the current body of
    evidence on the potential role of EggPC cell mitochondria to improve
    female fertility and rescue poor quality eggs.
  • Additional healthy babies born with the AUGMENT treatment
    The
    Company is continuing to see success with the AUGMENT treatment. To
    date, 30 babies have been born using AUGMENT. The first baby born with
    the AUGMENT treatment recently celebrated his first birthday.

OvaPrimeSM Treatment: 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% 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. In preclinical studies, OvaPrime was shown to
result in a mature, fertilizable egg.

  • Advanced OvaPrime clinical study
    OvaScience advanced its
    study of the OvaPrime treatment outside the U.S. The study is designed
    to evaluate safety, changes in a patient’s hormone levels and
    follicular development as measured by ultrasound. The Company plans to
    provide an update on the path forward for OvaPrime by year-end.

OvaTureSM 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 EggPC cells into eggs outside the body. It may be
an option for women with compromised eggs, who are unable to make eggs
or may be unwilling or unable to undergo hormone hyperstimulation.

  • Continued to advance process for the OvaTure treatment
    OvaScience
    continues to advance the OvaTure treatment and made progress in
    maturing and characterizing EggPC-derived eggs.

Upcoming Presentations:

  • Ovarian Club VII, May 21-22, in Hong Kong, China

    • Abstract title:“Structural integrity
      and bioenergetics activity of human ovarian egg precursor cell
      (EggPC)-derived mitochondria are maintained by a novel
      cryopreservation approach.”
  • European Society of Human Reproduction and Embryology (ESHRE), July
    3-6, in Helsinki, Finland

    • Abstract title: “Preclinical data
      support the safety of egg precursor cell (EggPC) repositioning
      using a method designed to address poor response to controlled
      ovarian stimulation.”
  • Society for the Study of Reproduction (SSR), July 15-16, in San
    Diego, CA

    • Abstract title: “Characterization of
      human oocytes using immunohistochemistry and polymerase chain
      reaction.”
    • Abstract title: “Isolation and
      Characterization of a Human Monoclonal Antibody Against DEAD Box
      Protein 4 For Use in Isolating Human Egg Precursor Cells From
      Ovarian Tissue.”

Upcoming Milestones
The Company is focused on execution in
2016 and expects to achieve the following milestones by the end of the
year:

  • Continue commercial expansion of AUGMENT in key regions;
  • Progress enrollment in the egg allocation study with the IVI Group;
  • Prepare for commercialization of AUGMENT in Japan; and
  • Determine the path forward for OvaPrime by year-end.

First Quarter Financial Results

  • Revenue for the quarter ended March 31, 2016 was $146,000 as compared
    to $15,000 for the same period in 2015. The revenue recognized in the
    first quarter of 2016 relates to 24 AUGMENT cycles, including
    treatments offered under various pricing programs. These pricing
    programs are designed to broaden the customer base knowledge and
    hands-on experience with the AUGMENT treatment. In 2015, the Company
    recognized revenue from 22 AUGMENT cycles for the full fiscal year.
  • Net loss for the quarter ended March 31, 2016 was $21.8 million,
    or ($0.80) per share, as compared to net loss of $17.2 million,
    or ($0.65) per share, for the same period in 2015. Net loss for the
    quarter ended March 31, 2016 included non-cash stock-based
    compensation expense of $3.6 million. The increase in net loss was
    primarily attributable to planned higher personnel costs, and costs
    associated with the commercial expansion of the AUGMENT treatment in
    certain international IVF clinics.
  • Research and development expense for the quarter ended March 31,
    2016 was $6.0 million, compared to $5.7 million for the same period in
    2015. This increase was primarily driven by a $1.1 million increase in
    employee compensation and related benefits driven by the hiring of
    additional research and development personnel; a $0.6 million increase
    in lab supplies and patient-related costs associated with our ongoing
    clinical study being conducted at IVI Valencia and a $0.5 million
    increase in facilities, consulting and other costs, which was
    partially offset by a $2.0 million decrease in stock-based
    compensation expense related to certain mark-to-market adjustments of
    founders’ stock, which was fully expensed and vested in the first
    quarter of 2015 that did not recur.
  • Selling, general and administrative expense for the quarter
    ended March 31, 2016, was $14.5 million, as compared to $11.0
    million for the same period in 2015. This increase was primarily a
    result of a $2.2 million increase in employee compensation and related
    benefits driven by the hiring of additional selling, general and
    administrative personnel; a $1.6 million increase to support our
    international growth and a $0.6 million increase in facilities and
    other costs, which was partially offset by a $1.0 million decrease in
    stock-based compensation expense related to certain mark-to-market
    adjustments of Founders’ stock, which was fully expensed and vested in
    the first quarter of 2015 that did not recur.

As of March 31, 2016, OvaScience had cash, cash equivalents, and
short-term investments of $110.1 million.

Conference Call
OvaScience will host a conference call at
4:30 p.m. EDT today, Thursday, May 5, 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 6908190. 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. EDT on
Thursday, May 5, 2016, through 11:59 p.m. EDT on Thursday, May 12, 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 6908190.

About OvaScience
OvaScience, Inc. (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 announce data and study
results, plans for growth, progress towards commercialization in Japan,
study goals, plans to decide whether to progress the OvaPrime program,
based on data, by the end of 2016 and 2016 milestones, including
commercial expansion, enrollment in the egg allocation study with the
IVI Group, preparation for commercialization in Japan and determining
the Company’s path forward for OvaPrime, based on preliminary data.
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 OvaScience works with may determine not to provide or
continue providing or studying the AUGMENT treatment or OvaPrime
treatment, or to delay providing such treatments, based on clinical
efficacy, safety or commercial, logistic, regulatory, enrollment,
inability to agree on commercial terms, or other reasons; the science
underlying the company’s treatments (including the AUGMENT, OvaPrime and
OvaTure treatments), which is unproven; the company’s ability to obtain
regulatory approval or licenses where necessary for its treatments;
OvaScience’s ability to develop its treatments on the timelines it
expects, if at all; the Company’s ability to commercialize its
treatments, on the timelines it expects, 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 the Company’s current views with respect to future
events. It anticipates that subsequent events and developments will
cause its views to change. However, while it may elect to update these
forward-looking statements in the future, it specifically disclaims any
obligation to do so. These forward-looking statements should not be
relied upon as representing OvaScience’s view as of any date subsequent
to the date hereof.

 
OvaScience, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In
thousands)
       
As of

March 31,
2016

December 31,
2015

Assets
Current assets:
Cash and cash equivalents $ 20,478 $ 43,224
Short-term investments 89,610 83,438
Prepaid expenses and other current assets   2,651   3,199
Total current assets 112,739 129,861
Property and equipment, net 8,667 8,313
Investment in joint venture 215
Restricted cash   439   439
Total assets $ 122,060 $ 138,613
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 4,218 $ 3,352
Accrued expenses and other current liabilities   7,589   7,891
Total current liabilities 11,807 11,243
Deferred rent and other non-current liabilities   1,409   520
Total liabilities   13,216   11,763
Total stockholders’ equity   108,844   126,850
Total liabilities and stockholders’ equity $ 122,060 $ 138,613
 
OvaScience, Inc.
Condensed Consolidated Statements of
Operations

(Unaudited)
(In thousands, except
per share data)
    Three Months Ended
March 31,

2016

   

2015

Revenues $ 146 $ 15
Costs and expenses:
Costs of revenues 1,176 35
Research and development 5,955 5,747
Selling, general and administrative   14,454     11,046  
Total costs and expenses   21,585     16,828  
Loss from operations   (21,439 )   (16,813 )
Interest income, net 174 44
Other (expense) income, net (27 ) 34
Loss from equity method investment   (391 )   (471 )
Loss before income taxes (21,683 ) (17,206 )
Income tax expense   75      
Net loss $ (21,758 ) $ (17,206 )
Net loss per share—basic and diluted $ (0.80 ) $ (0.65 )
Weighted average number of shares used in net loss per share—basic
and diluted
  27,301     26,588  

###

Contacts

OvaScience
Rebecca J. Peterson, 617-420-8736
rpeterson@ovascience.com