On August 14, 2017 Asterias Biotherapeutics, Inc. (NYSE MKT:AST), a biotechnology company pioneering the field of regenerative medicine, reported financial and operational results for the quarter ended June 30, 2017, as well as recent corporate progress (Press release, BioTime, AUG 14, 2017, View Source [SID1234520224]).

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"We made significant progress during the second quarter and in recent months in our two lead development programs: our AST-OPC1 program in spinal cord injury and our AST-VAC2 cancer immunotherapy program in non-small cell lung cancer," said Mike Mulroy, President and Chief Executive Officer of Asterias. "We reported encouraging data from our SCiStar study that shows meaningful improvements in arm, hand, and finger function in patients with severe cervical spinal cord injuries. Importantly, these improvements have been sustained—and in some cases further improved—at nine months following administration of AST-OPC1. In our cancer immunotherapy program, we recently completed a major step toward advancing AST-VAC2 into the clinic. In particular, together with our research partner Cancer Research UK, we successfully completed the production of the first cGMP clinical grade lot of AST-VAC2. This lot of AST-VAC2 provides the initial clinical trial material for patients enrolling in the upcoming clinical study evaluating AST-VAC2 in non-small cell lung cancer. Lastly, we continue to be mindful of our cost structure as we advance our programs and make adjustments to our operating expenses where appropriate."

2017 Upcoming Milestones

In late third quarter or early fourth quarter of 2017, Asterias will report 12-month data from the AIS-A 10 million cell cohort in the SCiStar Phase 1/2a clinical study of AST-OPC1 in complete cervical spinal cord injury.
Asterias expects to complete patient enrollment with a total of between 25-30 subjects in the SCiStar study by the end of 2017.
In the second half of 2017, Asterias expects to have all necessary regulatory clearances to commence the first clinical study of the company’s cancer immunotherapy product candidate AST-VAC2 in non-small cell lung cancer.
By the end of 2017, Asterias expects to have up to three sites opened and patient enrollment initiated in the AST-VAC2 clinical study.
Second Quarter 2017 and Recent Key Achievements

During the second quarter, the company continued to provide promising updates on recovery of arm, hand and finger function for patients that have been administered AST-OPC1:

Reported nine-month data from the AIS-A 10 million cell cohort that showed improvements in arm, hand, and finger function observed at three months and six months following administration of AST-OPC1 were confirmed and in some patients further increased at nine months. The results suggest a meaningful and favorable improvement to date in recovery of arm, hand, and finger function in patients treated with the 10 million cell dose of AST-OPC1 compared to the level of expected rates of spontaneous recovery based on historical control data of a closely matched patient population.
Reported new MRI data from the SCiStar study that indicates AST-OPC1 cells have durably engrafted in patients post-implantation, and have the potential to prevent lesion cavity formation, possibly reducing spinal cord tissue deterioration after spinal cord injury.
Lucas Lindner of Eden, Wisconsin, a former quadriplegic patient who has regained functional use of his fingers, hands, and lower arms after receiving 10 million cells of AST-OPC1 in the SCiStar study, threw out the ceremonial first pitch at a Major League Baseball game on August 13, 2017.
Management executed well to drive forward the AST-OPC1 program, particularly as it relates to enrollment, and will be providing additional data readouts for a growing number of patients in early 2018:

Completed enrollment and dosing in the AIS-B 10 million cell and AIS-A 20 million cell cohorts of the SCiStar study in July. The company has completed enrollment and dosing in four of the five planned cohorts in this study.
Enrollment and dosing of the fifth patient in the AIS-A 20 million cell cohort triggered the final $1.5 million grant payment from the California Institute for Regenerative Medicine (CIRM) under the existing $14.3 million Strategic Partnerships Award grant awarded to Asterias. Asterias expects to receive this grant payment in the third quarter of 2017.
Enrolled and dosed first patient in fifth and final cohort in the SCiStar study. Twenty-two patients have been administered AST-OPC1 in the SCiStar study and twenty-seven patients have been administered AST-OPC1 after including patients from a previous Phase 1 safety trial.
The FDA accepted the company’s amendment to the clinical research protocol for the SCiStar study. The amendment expands the eligibility criteria to include patients with a C-4 spinal cord injury and extends the dosing window to allow for administration of AST-OPC1 at up to 42 days post-injury.
Opened two additional clinical sites for the SCiStar study, providing additional geographical reach and previous experience with spinal cord injury trials. Asterias now has eight clinical sites throughout the country enrolling patients in the study.
Management is making progress related to its cancer immunotherapy programs as its AST-VAC2 program gets closer to entering the clinic:

Published positive AST-VAC1 Phase 2 clinical data in Acute Myeloid Leukemia in ‘Cancer,’ a leading peer-reviewed journal of the American Cancer Society.
Cancer Research UK, supported by Asterias technical personnel, successfully completed the manufacture of the first cGMP (current Good Manufacturing Practice) clinical grade lot of AST-VAC2, which met all release specifications. This lot will provide initial clinical trial material for patients enrolling in the upcoming Phase 1/2a study evaluating AST-VAC2 in non-small cell lung cancer.
Financial Results

Cash and cash equivalents as of June 30, 2017 were $11.9 million, while available-for-sale securities were $13.1 million. The combined total of cash, cash equivalents, and available-for-sale securities totaled $25.0 million.

Total revenues were $0.3 million for the second quarter. Revenues were comprised of grant income as well as royalty revenues on product sales by licensees. Research and development expenses were $7.0 million in the second quarter, with the primary driver being expenses associated with the company’s AST-OPC1 program. General and administrative expenses were $1.8 million in the second quarter.

Net loss was $8.7 million, or $0.18 per share, for the second quarter. For the quarter ended June 30, 2017, net cash used in operating activities was $7.0 million and net cash provided from financing activities was $0.9 million.

On August 14, 2017 Asterias Biotherapeutics, Inc. (NYSE MKT:AST), a biotechnology company pioneering the field of regenerative medicine, reported that Cancer Research UK, supported by Asterias technical personnel, has successfully completed manufacture of the first cGMP (current Good Manufacturing Practice) clinical grade lot of AST-VAC2, which meets all specifications for release (Press release, BioTime, AUG 14, 2017, View Source [SID1234520223]). This lot will provide clinical trial material for patients enrolling in the first clinical study evaluating AST-VAC2 in non-small cell lung cancer.

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"The successful production of this first cGMP lot of AST-VAC2 is a major step towards initiating the upcoming study in non-small cell lung cancer," said Mike Mulroy, President and Chief Executive Officer. "With its potential as a ready-to-use, off-the-shelf cancer immunotherapy, AST-VAC2 represents an exciting opportunity for Asterias in the rapidly evolving cancer immunotherapy sector."

Investigational therapies intended for human clinical applications must be manufactured in accordance with cGMP standards designed to help assure the safety and potency of drug products. To achieve cGMP standards, a product must be manufactured and released according to rigorous systems designed to ensure appropriate control of manufacturing facilities, equipment, raw materials, processes and testing procedures. Under the company’s agreement with Cancer Research UK, Asterias has transferred its innovative laboratory scale AST-VAC2 manufacturing process to Cancer Research UK’s Biotherapeutics Development Unit, which has developed and optimized the process for cGMP manufacture and is responsible for producing cGMP AST-VAC2 for use in the upcoming clinical study in non-small cell lung cancer.

About AST-VAC2

AST-VAC2 is an innovative immunotherapy product that contains mature dendritic cells derived from pluripotent stem cells. These non-patient specific (allogeneic) AST-VAC2 cells are engineered to express a modified form of telomerase, a protein widely expressed in tumor cells, but rarely found in normal cells. The modified form of telomerase permits enhanced stimulation of immune responses to the protein. The AST-VAC2 dendritic cells instruct the immune system to generate responses against telomerase which will target tumor cells. AST-VAC2 is based on a specific mode of action that is complementary and potentially synergistic to other immune therapies.

About Non-Small Cell Lung Cancer

Lung cancer (both small cell and non-small cell) is the leading cause of cancer-related death, accounting for about one-quarter of all cancer deaths and more than colorectal, breast, and prostate cancers combined. Non-small cell lung cancer (NSCLC) accounts for about 80% to 85% of lung cancers, according to the American Cancer Society. The three main types of NSCLC are adenocarcinoma, squamous cell carcinoma, and large cell carcinoma. The American Cancer Society’s estimates for lung cancer in the United States for 2017 are: about 222,500 new cases of lung cancer, and about 155,870 deaths from lung cancer. Despite the large number of people afflicted by non-small cell lung cancer, patients remain vastly underserved due to a scarcity of effective treatments. According to statistics published by Cancer Research UK, the five year survival rate for lung cancer patients in England and Wales is less than 10%.

On August 14, 2017 Diffusion Pharmaceuticals Inc. (NASDAQ:DFFN) ("Diffusion" or "the Company"), a clinical-stage biotechnology company focused on the development of novel small molecule therapeutics for cancer and other hypoxia-related diseases, reported financial results for the three months ended June 30, 2017 and provided a business update (Press release, Diffusion Pharmaceuticals, AUG 14, 2017, View Source [SID1234520221]).

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Highlights of the second quarter of 2017 and recent weeks include:

Advanced trans sodium crocetinate (TSC) for the treatment of newly diagnosed inoperable glioblastoma multiforme (GBM) in preparation for a planned Phase 3 trial with the engagement of a contract research organization and the completion of a major TSC production run
Appointed long-standing pharmaceutical executive Robert R. Ruffolo, Jr., Ph.D. to the Company’s board of directors
Received $8.3 million from the second closing of a private placement of Series A convertible preferred stock
Obtained stockholder approval for a potential offering of up to $20.0 million of Series B convertible preferred stock
David Kalergis, Chairman and Chief Executive Officer of Diffusion Pharmaceuticals, stated, "During the second quarter we made solid progress in advancing preparations for a planned Phase 3 trial of TSC in newly diagnosed inoperable GBM patients, and are on track to complete a protocol review in the third quarter of 2017. Assuming FDA sign-off on the final protocol design, we plan to begin enrolling patients into the study by the end of 2017."

"We have engaged a premier contract research organization to conduct the Phase 3 study and entered into agreements with top-tier partners to manage the MRI imaging, clinical data management, drug supply and other functions related to the trial," Mr. Kalergis added. "We completed a major production run of TSC and now have sufficient quantity of the drug to support the entire Phase 3 trial."

Second Quarter Financial Results

Research and development expenses for the second quarter of 2017 were $1.2 million, compared with $1.4 million for the second quarter of 2016. This decrease was attributable to lower expenses related to animal toxicology studies, partially offset by an increase in API and drug manufacturing costs.

General and administrative expenses for the second quarter of 2017 were $1.8 million, compared with $2.3 million for the second quarter of 2016. The decrease was primarily attributable to lower professional fees, partially offset by an increase in salary and salary-related expenses.

The Company recorded a loss from operations of $3.0 million for the second quarter of 2017, compared with a loss from operations of $3.8 million for the second quarter of 2016. The narrowed operating loss reflects lower research and development expenses, as well as lower general and administrative expenses.

We recognized a non-cash gain of $23.4 million in the second quarter of 2017 related to the change in fair value of warrant liabilities, which was attributable to a decrease in the fair market value of our common stock during the period. This non-cash gain resulted in net income for the second quarter, which is not indicative of ongoing operations.

Net cash used in operating activities for the first half of 2017 was $6.2 million, compared with $7.5 million during the first half of 2016.

In April 2017 we received the remaining $8.3 million related to our Series A financing and as of June 30, 2017, the Company had cash and cash equivalents of $7.4 million and a certificate of deposit of $10.0 million.

At our annual meeting of stockholders on June 15, 2017, stockholders approved a potential offering of up to $20.0 million of shares of our Series B convertible preferred stock, $0.001 par value per share ("Series B Preferred Stock"), at a price of $2.10 per share, with each share of Series B Preferred Stock being initially convertible into one share of our common stock, subject to adjustment. For each share of Series B Preferred Stock purchased in the offering, the investor will receive a five-year warrant to purchase one share of common stock with an exercise price of $2.31. There is no assurance we will successfully close such an offering at such terms due to the current trading price of our common stock or for any other reason.

Additional Information

This press release is neither an offer to sell, nor a solicitation of an offer to buy, any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The Series B Preferred Stock and related warrants described herein have not been and will not be registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act, and applicable state securities laws.

On August 14, 2017 OncoCyte Corporation (NYSE MKT:OCX), a developer of novel, non-invasive tests for the early detection of cancer, reported the following developments (Press release, BioTime, AUG 14, 2017, View Source [SID1234520216]).

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Financial results for the quarter ended June 30, 2017,
Planned expansion of the senior management team by adding a Vice President of Sales and full time Chief Financial Officer,
Branding for its lung cancer diagnostic test, and
Progress toward CLIA lab licensing.
OncoCyte announced that it is planning to expand its senior management team. The Company is now in the final stages of hiring a Vice President of Sales. If hired, this individual will bring many years of sales and marketing leadership within the healthcare industry at leading diagnostic companies. In addition, OncoCyte has begun the process of hiring a full time Chief Financial Officer.

The Company has selected the name DetermaVu for its lung cancer test, a name that directly speaks to how the test will assist clinicians in determining the next steps for their patients by providing information that is not available by using only the current standard of care, a low-dose CT scan.

OncoCyte also announced that its clinical laboratory has passed the required review and inspection by the California Department of Public Health Laboratory Field Services for State Clinical Laboratory licensing and CLIA certification. OncoCyte expects to receive its California State Clinical Laboratory license and CLIA Certificate in the coming weeks.

"Our team has established a solid track record of achieving important milestones and, as a result of recent progress, we are continuing to plan for the commercial launch of our lung cancer diagnostic test in the fourth quarter of 2017," said William Annett, Chief Executive Officer. "Upon launch, DetermaVu will be the only commercially available non-invasive liquid biopsy confirmatory lung cancer diagnostic test in what we estimate could be a $4.7 billion annual market in the U.S. depending on market penetration and reimbursable pricing."

Other Recent Operating Highlights

Announced positive data from the Company’s lung cancer Analytical Validation Study, which established the performance characteristics of DetermaVu. The results were consistent with the data reported at the American Thoracic Society 2017 International Conference, which demonstrated sensitivity of 95%, specificity of 73%, and Area Under the Curve (AUC) of 0.92. Sensitivity and specificity are statistical measures of test performance, with sensitivity measuring the percentage of malignant nodules that are identified correctly by the test and specificity measuring the percentage of benign nodules correctly identified. The AUC of a test is a measure of overall global accuracy that combines sensitivity and specificity, with 1.0 being perfect accuracy and 0.50 being a random result. The reported score of 0.92 means that 92% of samples were correctly identified,

Commenced its CLIA Lab Validation Study in which OncoCyte will assay approximately 120 samples previously tested in the 299-patient study presented at the ATS meeting, with the goal of demonstrating that OncoCyte’s new clinical laboratory will provide the same results on clinical samples as those obtained in the R&D lab, and

Completed a follow-on study of OncoCyte’s breast cancer diagnostic test, confirming the findings of the Company’s previous breast cancer study, which were presented at the San Antonio Breast Cancer Symposium in December 2016. The follow-on study, known as NICE-BC (Non-Invasive Confirmatory dEtection (of) Breast Cancer), has been submitted for presentation at a major medical conference.
Near-Term Milestones

OncoCyte’s goals for the near term include the following:

Data from OncoCyte’s latest confirmatory lung cancer diagnostic research will be presented in a slide presentation at the American College of Chest Physician’s CHEST 2017 annual meeting. The meeting will be held in Toronto, Ontario, Canada, from October 28 to November 1,

An abstract concerning the lung cancer Analytical Validation Study results has been accepted for presentation at the International Association for the Study of Lung Cancer, which will take place in Chicago from September 14-16. The oral presentation will be given by Philip McQuary, Ph.D., Director, Product Development, at OncoCyte,

William Haack, Vice President of Market Access at OncoCyte, will address the Next Generation Dx Summit 2017 on successful reimbursement strategies for diagnostic tests. Mr. Haack’s presentation will focus on clinical utility studies as the key to successful reimbursement, and is being given on August 16. The Next Generation DX Summit will take place at the Grand Hyatt Washington in Washington, D.C.,

A DetermaVu Clinical Validation Study to assess the performance of DetermaVu against clinically confirmed cancer diagnoses will be conducted. All of the samples required for this study have now been collected,

Commercial launch of DetermaVu as a liquid biopsy lung cancer diagnostic test, if the results of the CLIA Lab Validation Study and the Clinical Validation Study results confirm that the test meets commercial standards for sensitivity and specificity,

Expansion of OncoCyte’s commercial capabilities in sales and marketing, revenue cycle management and reimbursement,

Seek agreements with international distributors for DetermaVu, payments for which OncoCyte anticipates will be on a cash basis, and

Begin the execution of a comprehensive, proactive approach to pursuing coverage and reimbursement from Medicare and U.S. private payers. OncoCyte expects that U.S. revenue will be limited until if and when reimbursement is received from Medicare and/or private payers.
Second Quarter 2017 Financial Results

For the quarter ended June 30, 2017, OncoCyte incurred a net loss of $3.8 million, or ($0.13) per share, compared to a net loss of $2.5 million, or ($0.10) per share, in the second quarter of 2016.

Operating expenses for the three months ended June 30, 2017, were $3.6 million, as reported, and were $3.1 million, on an as adjusted basis.

Research and development expenses for the quarter ended June 30, 2017, were $2.0 million compared to $1.2 million for the same period in 2016. The increase is primarily attributable to increases of $0.3 million in development and clinical trials expenses for DetermaVu, $0.1 million in amounts charged to OncoCyte for facilities and services provided by BioTime, $0.1 million in salaries and payroll related expenses due to increased headcount, $0.1 million in stock based compensation expenses, and $0.1 million in outside service expenses and consulting fees.

General and administrative expenses of $1.1 million were substantially the same as the amount incurred during the same period of 2016.

At June 30, 2017, OncoCyte had cash and cash equivalents of $8.6 million and available-for-sale securities valued at $1.1 million. In July 2017, the Company raised $5.74 million through the exercise of stock purchase warrants by certain investors.

Six Month 2017 Financial Results

The net loss for the six months ended June 30, 2017, was $8.5 million, or ($0.29) per share, compared to $5.5 million, or ($0.22) per share, in the first six months of 2016.

Operating expenses for the six months ended June 30, 2017, were $8.1 million, as reported, and were $6.1 million, on an as adjusted basis.

Research and development expenses for the six months ended June 30, 2017, increased to $3.8 million from $2.9 million for the same period in 2016. The increase in research and development expenses of $0.9 million for the six months ended June 30, 2017, compared to six months ended June 30, 2016, is primarily attributable to increases of $0.3 million in development and clinical trial expenses for DetermaVu, $0.3 million in salaries and payroll related expenses, $0.3 million in stock based compensation expenses and $0.2 million in amounts charged to us by BioTime, Inc. for facilities and services. Those increases were offset by a decrease of $0.5 million in outside services expenses and consulting fees.

For the six months ended June 30, 2017, general and administrative expenses increased to $3.2 million from $2.1 million for the same period in 2016. The increase is mainly attributable to $1.1 million in shareholder noncash expense for the issuance of additional warrants to certain investors who agreed to exercise certain stock purchase warrants substantially before the warrant expiration date.