On March 15, 2017 Galena Biopharma, Inc. (NASDAQ: GALE), a biopharmaceutical company developing hematology and oncology therapeutics that address unmet medical needs, reported its financial results for the quarter and year ended December 31, 2016 (Filing, Q4/Annual, Galena Biopharma, 2016, MAR 15, 2017, View Source [SID1234518180]).

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"I am honored to be selected by the Board of Directors to lead Galena as we explore the best possible outcome for the company and its shareholders," said Stephen F. Ghiglieri, Interim Chief Executive Officer. "As we announced last week, we are working closely with our advisors, Canaccord Genuity, Inc., to evaluate strategic alternatives that may include monetizing our assets, a sale of the company, a business combination, a merger or reverse merger, or remaining as a stand-alone entity. We do not have a set timetable for the process, but we are currently conserving working capital to allow us to make the best strategic decision for the future of the Company."

Mr. Ghiglieri continued, "2016 brought many challenges for Galena. Most significantly, our Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) trial was discontinued last June based on the recommendation from the independent data monitoring committee that the trial would be futile. While this was a serious setback, NeuVax continues to be our asset with the greatest market potential and the most near term data readout, and we are encouraged by the progress of our two ongoing investigator-sponsored combination trials with NeuVax and trastuzumab. After obtaining positive futility analyses on these trials from the data safety monitoring board (DSMB) last month, we look forward to enrollment being completed in both of those trials this year. To date, in these trials, NeuVax (nelipepimut-S plus GM-CSF) has been well tolerated with no increased cardiotoxicity associated with giving it in combination with trastuzumab. For the Phase 2b trial in patients with low-to-intermediate HER2 expression (HER2 1+/2+), the DSMB recommended to continue the trial and determined that the pre-specified interim efficacy analysis be moved up from 12 months to 6 months after the last patient is enrolled. Therefore, we expect enrollment to be completed in the second quarter of 2017, and for the DSMB to perform the interim efficacy analysis near the end of 2017. For the Phase 2 trial in high-risk, HER2 3+ patients, we expect enrollment to be completed by the end of the year. Furthermore, our single-agent trial in patients with ductal carcinoma in situ (DCIS) is also open for enrollment and screening patients. And, finally, our clinical team has locked the database and is closing out the PRESENT trial with the plan to present the final data at a medical conference later this year."


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"Over the second half of 2016, the clinical team was able to effectively refocus their efforts on GALE-401 and did an outstanding job preparing a robust development plan with the support of regulatory experts and key opinion leaders who treat myeloproliferative neoplasms. We were pleased to report that after a productive meeting with the U.S. Food and Drug Administration (FDA) in December, we received confirmation from the FDA that the GALE-401 development program is appropriate for a New Drug Application (NDA) filing using the 505(b)(2) regulatory pathway in patients with essential thrombocythemia (ET) who are intolerant or resistant to hydroxyurea. As a result, we have developed a clear path forward for GALE-401 in the treatment of ET and the team continues the internal work to prepare the Phase 3 trial for initiation. Subject to completing the manufacturing of the new formulation and the internal work to prepare the Phase 3 trial for initiation, the Company is evaluating the appropriate time to commence enrollment of the GALE-401 trial and anticipates making a definitive determination in the second half of 2017," added Mr. Ghiglieri.

Mr. Ghiglieri concluded, "Operationally, we have narrowed our focus in the very near term, strengthened our balance sheet, and are actively moving forward with evaluating strategic options while being keenly focused on providing the best possible outcome for patients and our shareholders. I look forward to keeping you updated in the coming months."


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FINANCIAL REVIEW

Operations

During the three months ended December 31, 2016, operating loss was $7.1 million, including $0.4 million in non-cash stock-based compensation, compared to $7.6 million, including $0.6 million in non-cash stock-based compensation for the same period in 2015. Operating loss for 2016 was $31.9 million, including $2.3 million in non-cash stock-based compensation, compared to $34.2 million, including $1.9 million in non-cash stock-based compensation for 2015. Galena’s development programs and general and administrative expenses are classified as continuing operations. Loss from continuing operations were as follows:
•
$1.9 million for the fourth quarter of 2016, or $0.17 per basic and diluted share, including $5.4 million in non-operating income; compared to $10.8 million for the fourth quarter of 2015, or $1.33 per basic and diluted share, including $2.9 million non-operating expense.
•
$11.1 million for 2016, or $1.11 per basic and diluted share, including $21.0 million in non-operating income; compared to $39.0 million for 2015, or $5.02 per basic and diluted share, including $4.4 million in non-operating expense.
Management believes the most relevant measure of our performance is our operating loss.

Net non-operating income (expense) is primarily driven by changes in the estimated fair value of warrants accounted for as liabilities and the contingent purchase price liability that are reflected as non-cash gains and losses in the consolidated financial statements. Net non-operating income (expense) can be broken down as follows:
•
$8.0 million gain for the fourth quarter of 2016 due to the significant decrease in the estimated fair value of warrants accounted for as liabilities compared to a $2.1 million gain during the same period in 2015.
•
$22.2 million gain for 2016 due to the significant decreases in the estimated fair value of warrants accounting for as liabilities compared to $1.2 million gain in 2015.
•
$5.0 million gain in 2016 due to the decrease in the contingent purchase price liability related to NeuVax and the decision to close the PRESENT study.
•
$1.5 million of interest expense and $1.0 million in litigation settlements partially offset the non-cash gains for the fourth quarter of 2016.
•
$3.5 million of interest expense and $2.8 million in litigation settlements partially offset the non-cash gains for 2016.
Loss from discontinued operations from Galena’s former commercial business for the fourth quarter of 2016 was $3.6 million, or $0.32 per basic and diluted share, compared to $8.9 million, or $1.10 per basic and diluted share, for the same period of 2015. Loss from discontinued operations for 2016 was $12.4 million, or $1.25 per basic and diluted share, compared to $24.9 million, or $3.21 per basic and diluted share, for 2015. The three and twelve months ended December 31, 2015 include a one-time non-cash impairment charge of $8.1 million from the former commercial business being classified as held for sale, in addition to a $4.5 million loss on sale of the commercial assets, and $1.3 million in severance and exit costs.

Overall, net loss for the fourth quarter of 2016 was $5.5 million, or $0.49 per basic and diluted share, compared to net loss of $19.7 million, or $2.43 per basic and diluted share, for the same period of 2015.
Net loss for 2016 was $23.5 million, or $2.36 per basic and diluted share, compared to $63.9 million, or $8.23 per basic and diluted share, for 2015.


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Cash and Cash Equivalents

Galena had cash and cash equivalents of approximately $18.1 million as of December 31, 2016, compared with $29.7 million as of December 31, 2015. The decrease of approximately $11.6 million in cash and cash equivalents during 2016 was attributable primarily to $44.9 million used in operating activities, $1.1 million in selling expenses paid related to the sale of the Company’s commercial products, and $5.6 million in payments on long-term debt. The decrease was partially offset by $33.5 million in net proceeds from issuance of common stock, and $5.8 million becoming available to the Company from long-term debt. As of December 31, 2016, Galena had $18.0 million of restricted cash of which $17.6 million is restricted under the terms of our debenture.

In its Annual Report on Form 10-K for December 31, 2016, Galena reported that as of February 28, 2017, the Company has approximately $29.1 million in cash and $13.7 million in restricted cash. The Company expects its cash burn for the remainder of 2017 to be approximately $18 million to $22 million based on its current limited operations and estimates of legal expenses associated with the ongoing government investigation and pending legal matters. The cash burn projection is subject to changes in the Company’s operating plans, resolution of the ongoing government investigation and legal matters, uncertainties inherent in the business, strategic alternatives outcomes, and the need to seek to replenish its existing cash and cash equivalents sooner than and in greater amounts than projected.


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FOURTH QUARTER AND RECENT HIGHLIGHTS

Operational Highlights

Positive Outcome from the Data Safety Monitoring Board on the Two NeuVax (nelipepimut-S) Clinical Trials in Combination with Trastuzumab

In February, Galena reported the results from a meeting of the DSMB for the two investigator-sponsored (IST) combination clinical trials with NeuVax plus trastuzumab. The DSMB reported that there are no safety concerns with either trial and neither was found to be futile. For the Phase 2b trial in patients with low-to-intermediate HER2 expression (HER2 1+/2+), n=242 patients were evaluated, and the recommendation from the DSMB is to continue the trial with one revision to the statistical analysis plan regarding the timing of the pre-specified interim analysis. Given the lengthy duration of enrollment for the trial, the DSMB determined that the pre-specified interim efficacy analysis be moved up from 12 months to 6 months after the last patient is enrolled. Completion of enrollment is expected in the second quarter of 2017; therefore, the DSMB expects to perform the interim efficacy analysis near the end of 2017. For the Phase 2 trial in high-risk, HER2 3+ patients, and per the trial protocol, the pre-specified interim safety analysis was also completed on n=50 patients and demonstrated that NeuVax is well tolerated with no increased cardiotoxicity associated with giving NeuVax in combination with trastuzumab. The recommendation from the DSMB is to continue the HER2 3+ trial unmodified.

FDA Confirms 505(b)(2) regulatory pathway for GALE-401 Phase 3 Trial.

After a productive meeting with the U.S. Food and Drug Administration (FDA) in December 2016, the FDA confirmed that the GALE-401 development program is appropriate for a NDA filing using the 505(b)(2) regulatory pathway in patients with essential thrombocythemia who are intolerant or resistant to hydroxyurea.

Announced the Phase 2 Clinical Trial of NeuVax in DCIS is Open for Enrollment and Screening Patients and Presented the Trial Design at the San Antonio Breast Cancer Symposium.

In December 2016, the Company announced the NeuVax Phase 2 clinical trial entitled, VADIS: Phase 2 trial of the Nelipepimut-S Peptide VAccine in Women with DCIS of the Breast, is now open for enrollment and screening patients. The trial is being run in collaboration with the National Cancer Institute (NCI) and The University of Texas MD Anderson Cancer Center Phase I and II Chemoprevention Consortium. The trial design was presented via poster at the San Antonio Breast Cancer Symposium (SABCS) in December 2016.

Presented multiple posters on the GALE-301/GALE-302 Phase 1b programs.

At SABCS, the poster, entitled, Determining the optimal vaccination strategy using a combination of the folate binding protein (FBP) peptide vaccine (E39+GM-CSF) and an attenuated version (E39’) to maximize the immunologic response in breast cancer patients, was presented on the breast cancer patients in the GALE-301 (E39) and GALE-302 (E39’) Phase 1b clinical trial targeting Folate Binding Protein. In the trial, both the E39 and E39’ peptide vaccines were noted to be well tolerated and immunogenic with no clinicopathologic differences between groups. Local reaction increased in all groups with administration of the vaccine as measured and assessed using orthogonal means. The greatest increase was seen in the treatment arm that administered GALE-301 followed by GALE-302, which approached statistical significance, and this arm was also the only arm with a statistically significant increase in delayed type hypersensitivity.


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In November 2016, data from the GALE-301/GALE-302 clinical program was presented at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Conference 2016. The presentation, entitled, Phase Ib Trial of Two Folate Binding Protein (FBP) Peptide Booster Vaccines (E39 and E39’) in Breast and Ovarian Cancer Patients, reported the peptide-specific immune response to E39 and E39’ after different combinations of vaccination and boosting. The data showed that both E39 and E39’ are well tolerated with all related adverse events at grade 1 or grade 2. Though numbers were small, patients boosted with the attenuated peptide showed increased cytotoxic T lymphocyte (CTL) response to boosting regardless of significant residual immunity resulting from the primary vaccination series. While this data needs to be confirmed with a larger sample size, this is consistent with the theoretical advantage of boosting with an attenuated peptide, which is expected to induce less antigen-induced cell death of CTLs.

In October 2016, a podium presentation was delivered on the GALE-301/GALE-302 clinical program at the American College of Surgeons Clinical Congress 2016. The presentation was entitled, A Phase Ib Trial Comparing Different Doses/Schedules of a Folate Binding Protein (FBP)-derived Peptide Vaccine, E39, and its Attenuated Version, E39’, to Induce Long-term FBP- specific Immunity in Disease-free Cancer Patients. In this trial, which enrolled mostly breast cancer patients who have lower FBP exposure than ovarian patients, the 500mcg dose appears to provide a more optimal immunological response. This differs from the results in ovarian cancer patients, who have much higher FBP expression, with potential secondary immune tolerance, where 1000mcg was the optimal dose. However, E39’ (GALE-302) given after E39 (GALE-301) was able to induce long-term immunity in both dosing cohorts, underscoring the potential importance of attenuated peptides in relatively antigen-naïve patients.

Presented NeuVax plus Trastuzumab Interim Safety Data.

Interim safety data from the NeuVax Phase 2b combination study with trastuzumab was presented at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016. The clinical trial is a randomized, multicenter, investigator-sponsored, 300 patient Phase 2b study enrolling HER2 1+ and 2+ node positive, and high-risk node negative patients. The poster, entitled, Interim safety analysis of a phase II trial combining trastuzumab and NeuVax, a HER2-targeted peptide vaccine, to prevent breast cancer recurrence in HER2 low expression, demonstrated that this novel combination of trastuzumab and NeuVax in HER2 low-expressing LE patients is well tolerated and the cardiac effects of trastuzumab are not impacted by the addition of NeuVax.

Corporate Highlights

Evaluation of Strategic Alternatives and Resignation of President and Chief Executive Officer.

On January 31, 2017, Galena’s Board of Directors announced that it is in the process of engaging an outside advisor to evaluate strategic alternatives for the company focused on maximizing stockholder value. On March 9, 2017, it was announced that Canaccord Genuity, Inc. was engaged as the Company’s financial advisor to assist in the review process. Potential strategic alternatives that may be explored or evaluated as part of this review include continuing to advance the clinical programs as a stand-alone entity, a sale of the company, a business combination, a merger or reverse merger, and a license or other disposition of corporate assets of the company. There is no set timetable for this process and there can be no assurance that this process will result in a transaction. On January 31, 2017, the Company also announced the resignation of Mark W. Schwartz, Ph.D. as President and Chief Executive Officer and as a member of the board of directors of each of Galena Biopharma, Inc., Apthera, Inc. and Mills Pharmaceutical, LLC.


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Appointed Interim Chief Executive Officer.

Stephen F. Ghiglieri was appointed by the Board of Directors as Interim Chief Executive Officer, effective February 21, 2017. Mr. Ghiglieri will also continue to serve as the Company’s Chief Financial Officer, a position to which he was appointed in November 2016.

Closed a Public Offering of Common Stock and Warrants.

On February 12, 2017, the Company closed the previously announced underwritten public offering of common stock and warrants. The net proceeds to Galena were approximately $15.5 million.

Settlement with the Securities and Exchange Commission.

In December 2016, Galena and its former CEO, Mark Ahn, reached an agreement in principle to a proposed settlement that would resolve an investigation by the staff of the Securities and Exchange Commission (SEC) involving conduct in the period 2012-2014 regarding the commissioning of internet publications by outside promotional firms. The proposed settlement is subject to approval by the Commission and would acknowledge our cooperation in the investigation and confirm our voluntary undertaking to continue that cooperation. If the Commission does not approve the settlement, we may need to enter into further discussions with the SEC staff to resolve the investigated matters on different terms and conditions. As a result, there can be no assurance as to the final terms of any resolution including its financial impact or any future adjustment to the financial statements.

Announced a Reverse Stock Split.

The reverse stock split became effective on November 11, 2016 and the Company’s common stock commenced trading on a split-adjusted basis on November 14, 2016. The Company’s common stock continues to trade on the NASDAQ Capital Market under the symbol "GALE" but under the new CUSIP number 363256504. The reverse stock split was authorized by the Company’s stockholders at the Special Meeting of Stockholders held on October 21, 2016.



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GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(Amounts in thousands, except share and per share data)


Quarter Ended December 31,

Year Ended December 31,

2016

2015

2016

2015
Operating expenses:







Research and development
$
4,618


$
4,849


$
19,860


$
23,611

General and administrative
2,517


2,740


12,007


10,609

Total operating expenses
7,135


7,589


31,867


34,220

Operating loss
(7,135
)

(7,589
)

(31,867
)

(34,220
)
Non-operating income (expense):







Litigation settlements
(950
)

(5,282
)

(2,750
)

(5,282
)
Change in fair value of warrants potentially settleable in cash
8,048


2,143


22,220


1,162

Interest expense, net
(1,520
)

(153
)

(3,508
)

(760
)
Change in fair value of the contingent purchase price liability
(135
)

440


5,047


509

Total non-operating income (expense), net
5,443


(2,852
)

21,009


(4,371
)
Loss before income taxes
(1,692
)

(10,441
)

(10,858
)

(38,591
)
Income tax expense
243


365


243


365

Loss from continuing operations
$
(1,935
)

$
(10,806
)

$
(11,101
)

$
(38,956
)
Discontinued operations







Loss from discontinued operations

(3,581
)

(8,872
)

(12,448
)

(24,946
)
Net loss
$
(5,516
)

$
(19,678
)

$
(23,549
)

$
(63,902
)
Net loss per common share:







Basic and diluted net loss per share, continuing operations
$
(0.17
)

$
(1.33
)

$
(1.11
)

$
(5.02
)
Basic and diluted net loss per share, discontinued operations
$
(0.32
)

$
(1.10
)

$
(1.25
)

$
(3.21
)
Basic and diluted net loss per share
$
(0.49
)

$
(2.43
)

$
(2.36
)

$
(8.23
)
Weighted-average common shares outstanding: basic and diluted
11,279,619


8,095,271


9,958,802


7,763,236










8


GALENA BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)


December 31, 2016

December 31, 2015
ASSETS



Current assets:



Cash and cash equivalents
$
18,083


$
29,730

Restricted cash
18,022


401

Litigation settlement insurance recovery
—


21,700

Prepaid expenses and other current assets
581


1,398

Current assets of discontinued operations
813


392

Total current assets
37,499


53,621

Equipment and furnishings, net
199


335

In-process research and development
12,864


12,864

GALE-401 rights
9,255


9,255

Goodwill
5,898


5,898

Deposits
96


171

Total assets
$
65,811


$
82,144

LIABILITIES AND STOCKHOLDERS’ EQUITY



Current liabilities:



Accounts payable
$
840


$
1,597

Accrued expense and other current liabilities
4,292


5,292

Litigation settlement payable
950


25,000

Fair value of warrants potentially settleable in cash
1,860


14,518

Current portion of long-term debt
16,397


4,739

Current liabilities of discontinued operations
6,059


5,925

Total current liabilities
30,398


57,071

Deferred tax liability, non-current
5,661


5,418

Contingent purchase price consideration, net of current portion
1,095


6,142

Total liabilities
37,154


68,631

Stockholders’ equity
28,657


13,513

Total liabilities and stockholders’ equity
$
65,811


$
82,144

On March 15, 2017 Inovio Pharmaceuticals, Inc. (NASDAQ:INO) reported financial results for the fourth quarter and year ended December 31, 2016 (Press release, Inovio, MAR 15, 2017, View Source;and-Year-End-Financial-Results/default.aspx [SID1234518170]).

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Total revenue was $8.5 million and $35.4 million for the quarter and year ended December 31, 2016, as compared to $5.9 million and $40.6 million for the same periods in 2015.

Total operating expenses for the quarter and year and ended December 31, 2016, were $30.9 million and $111.6 million as compared to $20.5 million and $74.9 million for the same periods in 2015.

The net loss attributable to common stockholders for the quarter and year ended December 31, 2016, was $26.2 million, or $0.35 per share, and $73.7 million, or $1.01 per share, compared to a net loss attributable to common stockholders of $18.0 million or $0.25 per share, and $29.2 million, or $0.43 per share, for the quarter and year ended December 31, 2015.

Dr. J. Joseph Kim, President and CEO, said: "In 2016 Inovio made significant progress on all three focuses of its Vision 2020 plan, which are HPV-related precancer, immuno-oncology, and infectious diseases, with notable data, multiple trial completions, progressive clinical study preparations, and multiple valuable collaborations and funding agreements. In 2017 we expect to report immune response data from clinical studies in six different diseases; the initiation of our phase 3 study of cervical dysplasia and two immuno-oncology combination studies, one by MedImmune and one by Inovio; and additional business development steps. We look forward to a highly productive year in advancing our unique immunotherapy platform and products."

Revenue

The decrease in revenue for the year was primarily due to $15.0 million of revenue recognized in 2015 from the up-front payment received from our partnership agreement with MedImmune. Accounting recognition of the remainder of the $27.5 million upfront payment was deferred and will be triggered by future events.

Operating Expenses

Research and development expenses for the quarter and year ended December 31, 2016, were $23.9 million and $88.7 million as compared to $15.6 million and $57.8 million for the same periods in 2015. The increase was primarily related to increased investment in our product development programs – notably the DARPA funded Ebola program and clinical trial preparations for the initiation of the VGX-3100 phase 3 study. General and administrative expenses for the quarter and year ended December 31, 2016, were $7.0 million and $23.9 million, compared to $4.9 million and $18.1 million for the quarter and year ended December 31, 2015. The increase was primarily related to employee non-cash stock-based compensation and employee headcount.

Capital Resources

As of December 31, 2016, cash and cash equivalents and short-term investments were $104.8 million compared with $163.0 million as of December 31, 2015. As of December 31, 2016, the company had 74.1 million shares outstanding and 82.0 million fully diluted.

During the year ended December 31, 2016, the Company sold 658,748 shares of common stock under its ATM common stock sales agreement for net proceeds of $6.3 million, with an average price of $9.75 per share.

Subsequent to year end Inovio announced a collaboration and license agreement providing ApolloBio Corporation (NEEQ:430187) with the exclusive right to develop and commercialize VGX-3100 within Greater China. In this agreement, Inovio will receive a $3 million signing fee and a $12 million milestone upon lifting of the VGX-3100 phase 3 pre-initiation clinical hold by the FDA. ApolloBio will also invest in Inovio common stock subsequent to lifting of the clinical hold at a volume weighted average price encompassing a trading period prior to and following the lifting of the clinical hold. The aggregate investment, expected to be completed in the first half of 2017, will not exceed $35 million and may be a lower amount such that ApolloBio will not be the largest shareholder in Inovio. Further details are provided under Corporate Update, HPV-Related Precancers below.

Inovio’s balance sheet and statement of operations are provided below. Form 10-K providing the complete 2016 annual financial report can be found at: View Source

Corporate Update

HPV-Related Precancers

In 2016 Inovio completed the scaling up of immunotherapy manufacturing to a commercial-scale facility as well as the commercial design and manufacturing process development for its new CELLECTRA 5PSP electroporation delivery device. We submitted a regulatory package to the U.S. Food and Drug Administration (FDA) supporting our proposed initiation of our phase 3 clinical program for VGX-3100 for HPV-related high grade cervical dysplasia. Included in this package was an extensive submission regarding the new device. Prior to the initiation of this study the FDA placed this program on clinical hold and subsequently provided Inovio with comments and questions, including a request for certain stability data relating to the device’s single-use disposable needle array. Inovio is generating the necessary data to prepare a comprehensive response. We aim to begin the phase 3 clinical program in the first half of 2017, subject to the FDA’s review of our response and lifting of the clinical hold. This clinical hold does not affect other Inovio clinical programs.
Inovio is planning to launch a phase 2 clinical study in 2017 for another HPV-related disease, vulvar intraepithelial neoplasia.
Subsequent to year end Inovio announced it entered into a collaboration and license agreement providing ApolloBio Corporation with the exclusive right to develop and commercialize VGX-3100 within Greater China (China, Hong Kong, Macao, Taiwan). The agreement provides for potential inclusion of the Republic of Korea three years following the effective date. Apart from financial terms discussed in Capital Resources above, ApolloBio will pay all clinical development costs within the licensed territory, up to $20 million based upon the achievement of certain regulatory milestones in the US, China and Korea, and double digit royalties on net sales of VGX-3100. The agreements are subject to People’s Republic of China (PRC) corporate and regulatory approvals, and payments are subject to PRC currency approvals. This collaboration encompasses treatment and/or prevention of pre-cancerous HPV infections and HPV-driven dysplasias, and excludes HPV-driven cancers and all combinations of VGX-3100 with other immunostimulants.
Immuno-Oncology

In the fourth quarter we reported interim data showing that INO-3112 generated robust HPV16/18 specific CD8+ T cell responses in peripheral blood in four of five subjects with HPV-related head and neck cancer who also showed increased T cell activation in resected tumor tissue samples. This data suggests the potential of Inovio’s DNA immunotherapies to turn tumors from cold to hot – by dramatically increasing the presence of killer T cells in the tumor, this technology represents an ideal approach to enhance the capabilities of checkpoint inhibitors. Inovio expects its partner, MedImmune, which licensed INO-3112 in 2015, to initiate a phase 1/2 immuno-oncology combination clinical study including INO-3112 in 1H 2017.
Subsequent to year end we reported data indicating that our SynCon WT1 cancer antigen was capable of breaking immune tolerance – a major challenge to researchers striving to develop potent cancer therapies — and induced neo-antigen-like T cell responses to cause tumor regression in pre-clinical studies. The results were published in Molecular Therapy in an article entitled, "A novel DNA vaccine platform enhances neo-antigen-like T-cell responses against WT1 to break tolerance and induce anti-tumor immunity." Inovio previously reported such results for its SynCon hTERT and PSMA cancer antigens. All three antigens are encoded in INO-5401, Inovio’s new universal cancer vaccine. Inovio intends to advance INO-5401 into a phase 1/2 study in combination with a checkpoint inhibitor in 1H 2017.
Completed enrollment of 62 subjects in the phase 1 study of our INO-5150 prostate cancer immunotherapy. We expect to report interim immune response and safety data in 2017.
Infectious Diseases

Subsequent to year end Inovio completed enrollment of its phase 1 study of its hepatitis B DNA immunotherapy (INO-1800). Inovio is independently advancing this program following Roche’s notice in 2016 that it will discontinue its INO-1800 collaboration with Inovio. All of Roche’s rights to INO-1800 have been returned. Inovio expects to report preliminary immune response data in 2H 2017. The study has completed interim safety reviews with a favorable safety profile to date.
Subsequent to year end we reported that in our emerging epidemic infectious disease program our fully enrolled 75-subject phase 1 study of our MERS DNA vaccine GLS-5300 generated high levels of binding antibodies (ELISA) in 92% (57 of 62) of evaluated subjects after three vaccinations (84% after two doses; 44% after one dose). Similarly, in our fully enrolled 40-subject phase 1 Zika study of GLS-5700, high levels of binding antibodies were measured (ELISA) in 100% (39 of 39) of evaluated subjects after three vaccinations; 82% (32 of 39) after two doses; 40% (16 of 40) after one dose. Both vaccines were well tolerated with no significant safety concerns to date. Both programs are being advanced through collaborations between Inovio and GeneOne Life Science Inc. (KSE: 011000).
We announced a collaboration and funding through our collaborator, GeneOne Life Science, with the International Vaccine Institute (IVI), which will provide technical, laboratory and financial support for GLS-5300 (MERS) clinical trials in Korea. This program is part of a grant provided to IVI by the Samsung Foundation.
Inovio and GeneOne initiated a phase 1 Zika DNA vaccine trial in Puerto Rico to test for safety, immune responses and initial evidence of efficacy. The placebo-controlled double-blind trial will assess differences in Zika infection rates in 160 healthy participants given either placebo or vaccine as part of an exploratory endpoint.
We expanded our phase 1 Ebola vaccine trial by fully enrolling an additional 125 subjects in a second stage after generating positive initial safety and immune response data in the first set of 75 healthy volunteers. The study will assess immune response characteristics generated with fewer intradermal administrations, lower doses, and with and without Inovio’s DNA-based IL-12 immune activator.
In 2016 we partnered with the National Cancer Institute and Mayo Clinic to initiate a phase 1 trial of our immunotherapy for hepatitis C (INO-8000). The dose escalation study will enroll patients in the early stages of chronic HCV infection to determine the therapy’s ability to decrease and potentially eliminate HCV viral load, measure HCV specific immune responses and durability of these immune responses, and evaluate safety and tolerability.
Completed enrollment of 94 subjects in the phase 1 study of our PENNVAX-GP HIV immunotherapy. After completing extensive immunogenicity analyses, we expect to report data in 2H 2017.
Other Developments

Signed collaborative research agreements with the Wistar Institute for preventive and therapeutic DNA-based immunotherapy applications and products for cancers and infectious diseases developed by David B. Weiner, Ph.D., board member and chairman of the scientific advisory board, and his Wistar laboratory. Inovio will have the exclusive right to in-license new intellectual property developed in this collaboration.
Inovio announced the award of a $6.1 million sub-grant through The Wistar Institute to develop a DNA-based monoclonal antibody designed to provide a fast-acting treatment against Zika infection. This program (a total of $8.8 million) is funded by the Bill & Melinda Gates Foundation.
Inovio’s DNA-based monoclonal antibody technology will be used to develop new immunotherapy approaches to treat HIV. This work will be funded by a $23 million grant, called BEAT-HIV: Delaney Collaboratory to Cure HIV-1 Infection by Combination Immunotherapy, from the National Institutes of Health to The Wistar Institute, an Inovio collaborator, and more than 30 of the nation’s leading HIV investigators.
Inovio incorporated a 100%-owned subsidiary, GENEOS Therapeutics, Inc., to develop and commercialize neo-antigen based personalized cancer therapies. GENEOS will exclusively focus on leveraging Inovio’s potent DNA immunotherapy technology platform to advance the emerging field of patient-specific neo-antigen therapies. GENEOS plans to independently raise capital and build a team to execute this complementary business model. Inovio will continue its focus on advancing its universal antigen-specific cancer immunotherapy portfolio.
Received $500,000 grant from the U.S. Army’s Small Business Innovation Research program to advance Inovio’s next generation delivery device capable of administering vaccines via skin-surface, needle-free electroporation.
Inovio completed the acquisition of all of Bioject Medical Technologies Inc.’s assets, including pioneering needle-free jet injection technology, devices, and intellectual property, for $5.5 million in cash and stock. Our goal is to design an integrated needle-free immunotherapy delivery and electroporation device.
Licensed a veterinary vaccine for foot and mouth disease (FMD) to Plumbline Life Sciences, an animal health company headquartered in South Korea. Plumbline will fund all development activities for this FMD vaccine and pay Inovio milestone payments as well as royalties on potential product sales.

On March 15, 2017 Idera Pharmaceuticals, Inc. (NASDAQ:IDRA), a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel nucleic acid-based therapeutics for oncology and rare diseases, reported its financial and operational results for the fourth quarter and year ended December 31, 2016 (Press release, Idera Pharmaceuticals, MAR 15, 2017, View Source [SID1234518167]).

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During 2016, the Company:

Completed enrollment in the dose escalation cohorts of the ipilimumab combination arm of the ongoing Phase 1/2 clinical trial of intratumoral IMO-2125 in PD-1 refractory metastatic melanoma;
– No dose-limiting toxicity reported in studied dose levels; MTD not reached;
– Patients with confirmed clinical responses have been on study past one year; and
– Supplementary patients being added to inform recommended phase 2 dose selection.
Commenced enrollment into the dose escalation cohorts of the pembrolizumab combination arm of the Phase 1/2 clinical trial of intratumoral IMO-2125 in PD-1 refractory metastatic melanoma;
Created 22 specific 3GA compounds targeting 22 genes for potential internal clinical development or partnering opportunities;
Selected the first clinical target for human development from the 3GA technology platform for an undisclosed liver target with expected initiation of clinical development targeted for 2018; IND-enabling activities underway;
Initiated enrollment into the IMO-8400 Phase 2 clinical trial in dermatomyositis which is being conducted at 22 sites both in the U.S. and abroad and is expected to complete enrollment in 2017 with data planned for the first half of 2018;
Planned additional IMO-2125 clinical trials to further understand drug activity as a monotherapy in additional solid tumors as well as exploration of additional combinations and tumor types with both trials anticipated to commence in 2017;
Executed an out-licensing agreement for Idera’s Toll-like Receptor 7, 8 and 9 antagonist IMO-9200 granting Vivelix Pharmaceuticals, Ltd. worldwide rights to develop and market the compound for non-malignant gastrointestinal disorders. Idera received $15 million in upfront payment and is eligible for future development, regulatory and sales milestone payments up to $140 million along with royalties from global net sales;
Generated estimated net proceeds of $49M, after deducting underwriters’ discounts and commissions and estimated offering expenses, from a public offering of common stock;
Presented positive clinical, translational and safety data from the initial cohorts of the phase 1 dose escalation portion of the Company’s ongoing Phase 1/2 clinical trial of intratumoral IMO-2125 in combination with ipilimumab in patients with PD-1 refractory metastatic melanoma at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting in November;
Presented pre-clinical data updates on both novel mechanism of action and selective targeting of single point mutations with 3rd Generation Antisense (3GA) at the Cold Springs Harbor Laboratory Conference on Regulatory & Non-Coding RNAs conference and the Annual Meeting of the Oligonucleotide Therapeutic Society, respectively; and,
Completed registrational development plan for IMO-2125 for PD-1 refractory metastatic melanoma.
“2016 was an incredibly important period for driving Idera’s future direction and opportunities for success,” stated Vincent Milano, Idera’s Chief Executive Officer. “And to that end, I am extremely proud of the contributions of every member of our team throughout 2016 as we now find ourselves exceedingly focused on our core priorities as we enter 2017 which is set up to be a pivotal year for our company, our patients and our shareholders.”

Continued Milano, “As we begin 2017, we are now in position to gain further insight into the potential for IMO-2125 with additional data, clarify the path to registration for IMO-2125 for PD-1 refractory melanoma, commence understanding of IMO-2125’s opportunity beyond melanoma, complete enrollment of the IMO-8400 trial in dermatomyositis and continue to advance the 3GA platform technology towards its first clinical evaluation in 2018. We also along the way, will opportunistically explore collaborations for both IMO-2125 and the 3GA platform technology to maximize the potential value and importantly patient reach for these exciting therapeutic solutions.”

Research and Development Program Updates
IMO-2125 and IMO-8400 are the Company’s lead clinical development drug candidates. IMO-2125 is an oligonucleotide-based agonist of Toll-like receptor (TLR) 9. IMO-8400 is an oligonucleotide-based antagonist of TLRs 7, 8, and 9. The Company also announced, in late 2015, the first two potential development targets from its proprietary 3GA technology platform: NLRP3 (NOD-like receptor family, pyrin domain containing protein 3) and DUX4 (Double Homeobox 4). The Company continues to evaluate these and other potential targets. The Company plans to take the first 3GA candidate into human proof of concept studies in 2017.

Toll-like Receptor (TLR) Agonism
Immuno-Oncology Program
Idera’s development program in immuno-oncology is based on the rationale that intra-tumoral injections of IMO-2125, a TLR9 agonist, will activate dendritic cells and modulate the tumor microenvironment to potentiate the anti-tumor activity of checkpoint inhibitors and other immunotherapies. This rationale is supported by pre-clinical data in multiple tumor types.

Idera is currently conducting a Phase 1/2 clinical trial of intratumoral IMO-2125 in combination with ipilimumab, a CTLA4 antibody, and in a separate arm exploration of the combination of intratumoral IMO-2125 with pembrolizumab, an anti-PD1 antibody. The Phase 1 dose exploration portion of the trial is being conducted at the University of Texas MD Anderson Cancer Center. This trial is being conducted in patients with relapsed or refractory metastatic melanoma who have failed prior PD-1 therapy. In the second half of 2016, the Company announced positive preliminary clinical data from the initial dosing cohorts in the ipilimumab arm of the dose escalation portion of the trial. The company has completed the dose escalation of intratumoral IMO-2125 in the ipilimumab arm of the trial and the combination appears generally well tolerated across all doses explored, without any dose-limiting toxicity and without reaching a maximally tolerated dose. The trial is currently enrolling additional patients with the goal to select the dose and commence the multi-center phase 2 portion of the trial in the second quarter of 2017. The company has also commenced enrollment into the pembrolizumab combination arm of the trial. The Company has requested and expects to conduct an end of phase 1 meeting with the U.S. Food and Drug Administration during the first quarter of 2017 to discuss the plans for registration trials and regulatory pathways for intratumoral IMO-2125 in PD1 refractory metastatic melanoma.

Additionally, in 2017 the company plans to initiate trials exploring IMO-2125 as a monotherapy agent in multiple solid tumor types and exploration of intratumoral IMO-2125 in combination with other checkpoint inhibitors in various solid tumor types.

At the 2017 ASCO (Free ASCO Whitepaper)-SITC Clinical Immuno-Oncology Symposium held February 23 through February 25, in Orlando, FL, Marc Uemura, M.D. of MD Anderson Cancer Center, presented an update of the ongoing IMO-2125 clinical trial in combination with ipilimumab in PD-1 refractory melanoma.

At the upcoming American Association for Cancer Research (AACR) (Free AACR Whitepaper) 2017 Annual Meeting being held April 1-5, in Washington DC, there will be two presentations related to IMO-2125.

On Wednesday, April 5, 2017, Dr. Cara Haymaker of MD Anderson Cancer Center will present an update on the translational data outcomes in a poster presentation entitled, “Translational evidence of reactivated innate and adaptive immunity with intratumoral IMO-2125 in combination with systemic checkpoint inhibitors form a Phase 1/2 study in patients with anti-PD-1 refractory metastatic melanoma.”

Additionally, on the same day, Daqing Wang, Ph.D., Principal Scientist, Idera Pharmaceuticals will present new IMO-2125 pre-clinical data in a poster entitled, “Local treatment with novel TLR9 agonist IMO-2125 demonstrates anti-tumor activity in preclinical models of pancreatic cancer.”

Third Generation Antisense Platform (3GA)
Idera’s proprietary third-generation antisense (3GA) platform technology is focused on silencing the mRNA associated with disease causing genes. Idera has designed 3GA oligonucleotides to overcome specific challenges associated with earlier generation antisense technologies and RNAi technologies such as immunotoxicities and less than optimal therapeutic index.

Over the past two years, Idera has generated 22 unique compounds developed to target specific genes across a wide variety of therapeutic areas such as rare diseases, oncology, autoimmune disorders, metabolic conditions and single point mutations. The company is currently conducting activities ranging from cell culture through IND-enabling toxicology. The current portfolio is designed to create both internal development candidates as well as partnering opportunities for disease areas outside of Idera’s stated focus.

The first partnering endeavor is demonstrated through Idera’s collaboration with GSK developing an undisclosed 3GA gene target for renal conditions. Idera and GSK entered into the collaboration in late 2015 and GSK’s stated goal is to achieve selection of clinical development candidate in the first quarter of 2018.

Additionally, in January of 2017, Idera announced selection of its first internal candidate to enter clinical development. For strategic and competitive purposes, Idera is withholding naming the specific target until the second half of 2017. Idera has selected a well-established liver target, with available, validated pre-clinical animal models, well-understood clinical endpoints, which has the potential for both rare and broader disease applications. Idera is currently conducting the IND-enabling toxicology for this program and expects to file and IND and enter the clinic in 2018.

Toll-like Receptor (TLR) Antagonism
Dermatomyositis Clinical Development Program
In late 2015, Idera announced the initiation of a Phase 2 clinical trial of IMO-8400 in patients with dermatomyositis, a rare auto-immune condition, which negatively affects skin and may result in debilitating muscle weakness. TLRs have been reported to play an important role in the pathogenesis of the disease. This randomized, double-blind, placebo controlled Phase 2 trial is expected to enroll 36 patients and will be conducted at approximately 22 clinical sites worldwide. The Company plans to complete enrollment of this trial by the end of 2017 and have clinical data available in 2018.

Financial Results
Fourth Quarter Results
Net income applicable to common stockholders for the three months ended December 31, 2016 was $0.8 million, or $0.01 per basic and diluted share, compared to a net loss applicable to common stockholders of $12.0 million, or $0.10 per basic and diluted share, for the same period in 2015. Revenue in the fourth quarter of 2016 was $15.3 million, primarily related to our Vivelix Agreement entered into in November 2016. There was nominal revenue recognized in the fourth quarter of 2015. Research and development expenses for the three months ended December 31, 2016 totaled $11.0 million compared to $8.6 million for the same period in 2015. General and administrative expense for the three months ended December 31, 2016 and December 31, 2015 were $3.5 million and $3.7 million, respectively.

Full Year Results
Net loss applicable to common stockholders for the year ended December 31, 2016 was $38.4 million or $0.30 per basic and diluted share, compared to net loss applicable to common stockholders of $48.6 million, or $0.42 per basic and diluted share, for the same period in 2015. Revenue for the year ended December 31, 2016 was $16.2 million, primarily related to our Vivelix Agreement entered into in November 2016. There was nominal revenue recognized for the year ended December 31, 2015. Research and development expenses for the year ended December 31, 2016 totaled $39.8 million compared to $33.7 million for the same period in 2015. General and administrative expenses for the year ended December 31, 2016 totaled $15.1 million compared to $15.4 million for the same period in 2015.

As of December 31, 2016, our cash, cash equivalents and investments totaled $109.0 million compared to $87.2 million as of December 31, 2015. We currently anticipate our cash position is capable of funding our operations into the second quarter of 2018.