On May 10, 2018 Genocea Biosciences, Inc. (NASDAQ:GNCA), a biopharmaceutical company developing neoantigen cancer vaccines, reported financial and operating results for the first quarter ended March 31, 2018 (Press release, Genocea Biosciences, MAY 10, 2018, View Source [SID1234526480]).

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"2018 has been an exciting year for Genocea," said Chip Clark, president and chief executive officer of the company. "Following our January financing, we are funded to advance our lead neoantigen cancer vaccine candidate GEN-009 into clinical trials later this year, and to continue to generate and present scientific data further elaborating on the ability of our ATLAS platform to identify and characterize neoantigens for use in cancer vaccines."

Recent Milestones & Events

January 2018: Genocea announced completion of a financing resulting in net proceeds of $51.7 million, including significant investments by New Enterprise Associates (NEA) and Vivo Capital. (Vivo).
January 2018: The U.S. Patent and Trademark Office issued an allowance on United States Patent 9,873,870, further strengthening the Company’s intellectual property position on its ATLAS platform for the identification and characterization of neoantigens and tumor-associated antigens.
January 2018: Genocea and Oncovir, Inc. entered into a license and supply agreement for Oncovir’s Hiltonol (poly-ICLC) adjuvant, a key component of Genocea’s personalized cancer vaccine candidate, GEN-009.
February and March 2018: Genocea strengthened its leadership through the election of NEA partner Ali Behbahani, M.D., to its Board of Directors, and the appointment of industry veteran Narinder Singh as senior vice president of pharmaceutical sciences and manufacturing.
April 2018: Genocea scientists presented data at the 2018 Annual Meeting of the American Association for Cancer Research (AACR) (Free AACR Whitepaper) further highlighting the advantages of its ATLAS platform over in silico methods in neoantigen identification and detailing the development of a novel model to study the mechanism of inhibitory antigens identified by ATLAS.
April 2018: Genocea filed an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) to begin clinical development of GEN-009. Genocea plans to initiate a Phase 1/2a clinical trial for GEN-009 in patients with a variety of tumor types in the second half of 2018 and to report top-line immune response data from this trial in the first half of 2019.
First Quarter 2018 Financial Results

Cash Position: As of March 31, 2018, cash and cash equivalents were $51.2 million compared to $12.3 million as of December 31, 2017.
Research and Development (R&D) Expenses: R&D expenses were $7.3 million for the quarter ended March 31, 2018, compared to $9.7 million for the same period in 2017. The decrease was largely due to reduced headcount, consulting and professional service costs, and decreased clinical costs.
General and Administrative (G&A) Expenses: G&A expenses were $3.1 million for the quarter ended March 31, 2018, compared to $3.6 million for the same period in 2017. The decrease was primarily due to reduced compensation, consulting, and professional services.
Net Loss: Net loss was $15.3 million for the quarter ended March 31, 2018, compared to a net loss of $13.7 million for quarter ended March 31, 2017. The increase in net loss is principally due to the change in fair value of warrants during the first quarter of 2018, related to the January 2018 public offering.
Financial Guidance
Genocea expects that its existing cash and cash equivalents are sufficient to support its operating expenses and capital expenditure requirements into the fourth quarter of 2019, having recently refinanced its debt facility with Hercules Capital.

Subsequent to the close of the first quarter ended March 31, 2018 and under its existing at-the-market equity offering program (ATM), Genocea sold an aggregate of 3.6 million shares of its common stock, receiving approximately $3.1 million in net proceeds after deducting commissions.

Genocea continues to explore strategic alternatives for GEN-003, its Phase 3-ready investigational immunotherapy for the treatment of genital herpes.

Conference Call
Genocea will host a conference call and webcast today at 9:00 a.m. ET. The conference call may be accessed by dialing (844) 826-0619 (domestic) or (315) 625-6883 (international) and refer to conference ID number 3866939. A live webcast of the conference call will be available online from the investor relations section of the Company’s website at View Source A webcast replay of the conference call will be available on the Genocea website beginning approximately two hours after the event and will be archived for 30 days.

On May 10, 2018 Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), a biopharmaceutical company dedicated to acquiring, developing and commercializing novel pharmaceutical and biotechnology products, reported financial results and recent corporate highlights for the first quarter ended March 31, 2018 (Press release, Fortress Biotech, MAY 10, 2018, View Source [SID1234526479]).

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Lindsay A. Rosenwald, M.D., Fortress’ Chairman, President and Chief Executive Officer, said, "We have made significant advancements in the four years since we created and implemented our unique and efficient business model to benefit all stakeholders. The centralization of a number of critical corporate and R&D functions at Fortress allows our subsidiaries, or "Fortress Companies," to leverage internal synergies and minimize costs, so they can focus on getting drugs into the hands of people who need them. Our focus on continuing to build value through our strong business development engine and R&D team has led to the launch of nine development-stage subsidiaries, one specialty dermatology subsidiary and the in-licensing of more than 25 development-stage therapies since January 2014. The long-term success of our subsidiaries benefits Fortress through modest royalties on sales and annual and event-driven equity grants."

Dr. Rosenwald added, "By offering investment opportunities to finance specific Fortress Companies, we enable investors to select more concentrated exposure in innovative therapeutic areas, like CAR-T therapy and checkpoint inhibitors. We have done just that in the 18 months since we completed a successful tender offer for the majority of shares in National Holdings Corporation. This unique relationship enables us to offer National Holdings’ clients the opportunity to invest in drug candidates across a range of developmental stages and therapeutic areas. We are pleased with our synergistic collaboration with National Holdings and the significant progress National Holdings has made in the past 18 months to transform its firm culture."

Accomplishments since launch of Fortress business model in January 2014:

Research and development

Established 9 development-stage Fortress Companies in areas including CAR-T therapy, checkpoint inhibitors, gene therapy, rare diseases and pain management

Established Journey Medical Corporation, a specialty dermatology company with four marketed products (Targadox, Ceracade, Triderm and Luxamend) and a contract sales and marketing operation of more than 30 professionals

In-licensed more than 25 development-stage programs across multiple therapeutic areas, which are currently in development at Fortress and the Fortress Companies

Established a 27,000 sq. foot CAR-T processing facility at UMass Medicine Science Park in Worcester, Massachusetts, to manufacture Mustang Bio’s CAR-T therapies

Corporate

Established a business development / search and evaluate team, and expanded headcount to approximately 20 employees

Built a corporate operations team (finance, accounting, legal, investor relations and human resources) of 15 employees and expanded manufacturing, quality, regulatory, clinical and R&D staff to 34 employees

Financial Results:

As of March 31, 2018, Fortress’ consolidated cash, cash equivalents, short-term investments (certificates of deposit), cash deposits with clearing organizations and restricted cash totaled $179.4 million, compared to $168.3 million as of December 31, 2017, an increase of $11.1 million for the quarter.

Net revenue totaled $55.4 million for the first quarter of 2018, compared to $44.7 million for the first quarter of 2017. Total revenue as of March 31, 2018, includes $5.9 million of Fortress revenue and $49.5 million of revenue from National Holdings. Total revenue as of March 31, 2017, included $2.8 million of Fortress revenue and $41.9 million of revenue from National Holdings.

Research and development expenses were $25.0 million for the first quarter of 2018, of which $22.8 million was related to Fortress Companies. This compares to $7.1 million for the first quarter of 2017, of which $5.4 million was related to Fortress Companies. Non-cash, stock-based compensation expenses included in research and development were $2.3 million for the first quarter of 2018, compared to $0.8 million for the first quarter of 2017.

Research and development expenses from license acquisitions totaled $0.1 million for the first quarter of 2018, compared to $1.3 million for the first quarter of 2017.

General and administrative expenses were $13.5 million for the first quarter of 2018, of which $8.4 million was related to Fortress Companies. This compares to $10.3 million for the first quarter of 2017, of which $6.7 million was related to Fortress Companies. Non-cash, stock-based compensation expenses included in general and administrative expenses were $2.5 million for the first quarter of 2018, compared to $2.1 million for the first quarter of 2017.

National Holdings’ operating expenses totaled $50.8 million for the first quarter of 2018, compared to $43.1 million for the first quarter of 2017.

Net loss attributable to common stockholders was $21.0 million, or $0.49 per share, for the first quarter of 2018, compared to a net loss attributable to common stockholders of $12.0 million, or $0.30 per share, for the first quarter of 2017.

Recent Fortress and Fortress Company Highlights:

Aevitas Therapeutics, Inc.

In January 2018, Aevitas entered into a sponsored research agreement with the laboratory of Guangping Gao, Ph.D., at the University of Massachusetts Medical School to evaluate construct optimization for Aevitas’ AAV gene therapy treatment for complement-mediated diseases.

Avenue Therapeutics, Inc.

In March 2018, Avenue received Notices of Allowance from the U.S. Patent and Trademark Office ("USPTO") for three patent applications covering methods of administration for IV tramadol. Issuance of these patents is expected in the second quarter of 2018.

In April 2018, Avenue completed enrollment in its Phase 3, multicenter, randomized, double-blind, three-arm clinical trial evaluating the efficacy and safety of IV tramadol 50 mg and 25 mg versus placebo for the treatment of moderate to moderately severe pain in patients following bunionectomy surgery. Avenue expects to report topline data in the second quarter of 2018.

Caelum Biosciences, Inc.

In March 2018, a new analysis of data from the Phase 1b trial of Caelum’s CAEL-101 (mAb 11-1F4) for the treatment of relapsed or refractory amyloid light chain ("AL") amyloidosis was presented at the 16th International Symposium on Amyloidosis. The data demonstrated a correlation between a sustained decrease in N-terminal pro-brain natriuretic peptide (NT-proBNP) levels and an improvement in global longitudinal strain ("GLS") following CAEL-101 treatment in patients with cardiac AL amyloidosis.

Checkpoint Therapeutics, Inc.

In March 2018, Checkpoint completed an underwritten public offering that raised net proceeds of $20.8 million.

Also in March 2018, Checkpoint completed the dose escalation portion of the ongoing Phase 1 trial of CK-301, a fully human anti-PD-L1 antibody, in selected recurrent or metastatic cancers, and initiated the first dose expansion cohort, which is evaluating an 800 mg dose of CK-301 administered every two weeks.

In April 2018, Checkpoint presented preclinical data on BET inhibitor CK-103 at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting. CK-103 demonstrated combinatorial effects in an in vivo model with anti-PD-1 antibodies, which may support the development of CK-103 as an anti-cancer agent alone and in combination with Checkpoint’s anti-PD-L1 antibody CK-301.

Mustang Bio, Inc.

In March 2018, Mustang announced that Sadik Kassim, Ph.D., was appointed Chief Scientific Officer, and Knut Niss, Ph.D., was named Chief Technology Officer.

National Holdings Corporation:

Fortress acquired approximately 57% of National Holdings Corporation ("National Holdings") in September 2016.
Accomplishments since closing the tender include:

Established new client-focused leadership team at National Holdings and at its wholly-owned operating companies National Securities Corporation and National Asset Management, Inc.;
Invested in new technology infrastructure geared toward risk management and improved client performance; and
Continued to increase revenues, particularly in investment banking, as described in its Q1 10-Q, filed February 14, 2018

On May 10, 2018 Fate Therapeutics, Inc. (NASDAQ:FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the first quarter ended March 31, 2018 (Press release, Fate Therapeutics, MAY 10, 2018, View Source [SID1234526478]).

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"We have generated a strong package of preclinical safety, efficacy and manufacturing data for FT500, and expect to submit an IND application for this first-of-kind NK cell product in the second quarter of 2018. We look forward to continuing our productive interactions with the FDA to pioneer the use of clonal master iPSC lines for the renewable production and clinical use of universal, off-the-shelf cellular immunotherapies for cancer," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "In addition, we are encouraged by the initial clinical data emerging from our two donor-derived cell therapy programs. We have observed safety, persistence and anti-tumor activity with NK100 in initial Phase 1 dose escalation against solid and liquid tumors. Additionally, no events of cancer relapse have been reported in our Phase 1 PROTECT study of ProTmune, and new immune reconstitution data from these subjects support the potential of ProTmune to fight against infections and residual disease."

Clinical Programs – Highlights & Updates

Reported New ProTmune Clinical Data Showing No Events of Cancer Relapse. In March, the Company presented additional Phase 1 PROTECT data from seven subjects administered ProTmune, the Company’s next-generation hematopoietic cell graft for patients with hematologic malignancies. As of a February 26, 2018 data cut-off, with a median time on study of 228 days, no serious adverse events related to ProTmune and no events of cancer relapse had been reported by investigators. The Company also presented immune reconstitution data, which indicate that the T- and NK cell compartments of ProTmune are functional and capable of fighting against infections and cancer. The randomized, controlled and double-blinded Phase 2 PROTECT study is currently open for enrollment at 15 U.S. centers.
Advancing FATE-NK100 in Multiple Phase 1 Studies. In February, the first subject was administered NK100, the Company’s first-in-class, donor-derived adaptive memory natural killer (NK) cell cancer immunotherapy, in the DIMENSION study. This ongoing Phase 1 clinical trial is assessing the safety and efficacy of NK100 when administered as a monotherapy and in combination with trastuzumab or cetuximab, two FDA-approved monoclonal antibodies that are widely used today to treat various solid tumor malignancies. Additionally, initial clinical data from the first two subjects administered NK100 in the ongoing Phase 1 APOLLO study for recurrent ovarian cancer were presented at the Innate Killer Summit in March and showed no dose-limiting toxicities. The Day 28 response evaluation for Subject 2 showed stable disease with evidence of tumor reduction.
Universal Off-the-Shelf Cancer Immunotherapy Preclinical Programs – Highlights & Updates

Completed Key Activities to Support FT500 IND Submission. The Company remains on track to submit in the second quarter of 2018 an Investigational New Drug (IND) application for FT500, a universal, off-the-shelf NK cell product manufactured from a clonal master induced pluripotent stem cell (iPSC) line. A preclinical in vivo GLP toxicity and tumorigenicity study in animals demonstrated that FT500 was well tolerated. There were no mortality events in any FT500-treated cohorts and no adverse clinical observations related to FT500. Additionally, FT500 produced from multiple clinical-scale manufacturing runs met pre-established specifications for identity, purity and potency as set forth in the Company’s pre-IND meeting with the FDA. The Company plans to clinically investigate FT500 in combination with FDA-approved checkpoint inhibitors as a rescue therapy.
Secured $4M from CIRM to Advance FT516 into a First-in-Human Clinical Trial. The award from the California Institute for Regenerative Medicine (CIRM) is being used to support ongoing IND-enabling activities. FT516 is a universal, off-the-shelf NK cell product manufactured from a clonal master iPSC line engineered to uniformly express a high-affinity, non-cleavable CD16 Fc receptor. Since CD16 is able to bind the Fc region of tumor-targeted antibodies, FT516 can be combined with FDA-approved monoclonal antibody therapies to target a broad spectrum of tumor-associated antigens. The Company has shown in preclinical studies that FT516 exhibits potent and persistent anti-tumor activity in vitro and in vivo against multiple tumor types, including in combination with monoclonal antibody therapies that target CD20, HER2 and EGFR.
Presented Dual-targeted Anti-tumor Activity of FT819 for Antigen Escape. The Company presented breakthrough preclinical data demonstrating the dual-targeted anti-tumor activity of FT819, a universal, off-the-shelf CAR19 T-cell product, at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April. FT819 exhibited a target-specific T-cell response in vitro when challenged with CD19-positive tumor cells and displayed robust production of effector cytokines and cytolytic proteins. In addition, FT819 elicited antibody-dependent cell-mediated cytotoxicity in vitro against CD19-negative, CD20-positive tumor cells when combined with rituximab, a monoclonal antibody targeting CD20. The Company is developing FT819, which is derived from a clonal master iPSC line engineered to completely eliminate the T-cell receptor, insert a chimeric antigen receptor (CAR) targeting CD19 into the T-cell receptor (TRAC) locus and express CD16 to mitigate antigen escape, under its exclusive iPSC-derived T-cell collaboration with Memorial Sloan Kettering Cancer Center led by Michel Sadelain, M.D., Ph.D., Director, Center for Cell Engineering.
First Quarter 2018 Financial Results

Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of March 31, 2018 were $88.6 million compared to $100.9 million as of December 31, 2017. The decrease was primarily driven by the Company’s use of cash to fund operating activities.
Total Revenue: Revenue was $1.0 million for the first quarter of 2018 as well as for the same period in 2017. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.
R&D Expenses: Research and development expenses were $11.5 million for the first quarter of 2018, compared to $8.0 million for the same period in 2017. The increase in R&D expenses was primarily attributable to an increase in third-party service provider fees related to the clinical development and manufacture of ProTmune and FATE-NK100 and to IND-enabling activities for FT500, as well as an increase in equipment and materials associated with the preclinical development of the Company’s iPSC-derived cancer immunotherapy programs and in employee compensation associated with growth in headcount.
G&A Expenses: General and administrative expenses were $3.6 million for the first quarter of 2018, compared to $3.0 million for the same period in 2017. The increase in G&A expenses was primarily attributable to an increase in stock-based compensation expense and in intellectual property costs.
Shares Outstanding: Common shares outstanding were 52.9 million as of March 31, 2018 and 52.6 million as of December 31, 2017. Preferred shares outstanding as of March 31, 2018 and December 31, 2017 were 2.8 million, each of which is convertible into five shares of common stock. All preferred shares outstanding are from the Company’s sale and issuance of non-voting Class A convertible preferred stock to Redmile Group, LLC in November 2016.
Today’s Conference Call and Webcast

The Company will conduct a conference call today, Thursday, May 10th, 2018 at 5:00 p.m. ET to review financial and operating results for the quarter ended March 31, 2018. In order to participate in the conference call, please dial 877-303-6235 (domestic) or 631-291-4837 (international) and refer to conference ID 5592629. The live webcast can be accessed under "Events & Presentations" in the Investors & Media section of the Company’s website at www.fatetherapeutics.com. The archived webcast will be available on the Company’s website beginning approximately two hours after the event.

About FATE-NK100

FATE-NK100 is an investigational, first-in-class, allogeneic donor-derived natural killer (NK) cell cancer immunotherapy comprised of adaptive memory NK cells, a highly specialized and functionally distinct subset of activated NK cells expressing the maturation marker CD57. Higher frequencies of CD57+ NK cells in the peripheral blood or tumor microenvironment in cancer patients have been linked to better clinical outcomes. In August 2017, non-clinical data describing the unique properties and anti-tumor activity of FATE-NK100 were published by Cancer Research (doi:10.1158/0008-5472.CAN-17-0799), a peer-reviewed journal of the American Association of Cancer Research. Three clinical trials of FATE-NK100 are currently being conducted: VOYAGE for the treatment of refractory or relapsed acute myelogenous leukemia; APOLLO for the treatment of recurrent ovarian cancer; and DIMENSION for the treatment of advanced solid tumors, including in combination with monoclonal antibody therapy.

About ProTmune

ProTmune is an investigational next-generation hematopoietic cell graft for the prevention of acute graft-versus-host disease (GvHD) in patients undergoing allogeneic hematopoietic cell transplantation (HCT). ProTmune is manufactured by pharmacologically modulating a donor-sourced, mobilized peripheral blood graft ex vivo with two small molecules (FT1050 and FT4145) to decrease the incidence and severity of acute GvHD while maintaining the anti-leukemia activity of the graft. ProTmune has been granted Orphan Drug and Fast Track Designations by the U.S. Food and Drug Administration, and Orphan Medicinal Product Designation by the European Commission. ProTmune is currently being investigated in a randomized, controlled and double-blinded Phase 2 clinical trial in adult subjects with hematologic malignancies undergoing matched unrelated donor HCT.

About Fate Therapeutics’ iPSC Product Platform

The Company’s proprietary iPSC product platform enables mass production of off-the-shelf, engineered, homogeneous cell products that can be administered in repeat doses to mediate more effective pharmacologic activity, including in combination with cycles of other cancer treatments. Human iPSCs possess the unique dual properties of unlimited self-renewal and differentiation potential into all cell types of the body. The Company’s first-of-kind approach involves engineering human iPSCs in a one-time genetic modification event, and selecting a single iPSC for maintenance as a clonal master iPSC line. Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, clonal master iPSC lines are a renewable source for consistently and repeatedly manufacturing homogeneous cell products in quantities that support the treatment of many thousands of patients in an off-the-shelf manner. Fate Therapeutics’ iPSC product platform is supported by an intellectual property portfolio of over 90 issued patents and 100 pending patent applications

On May 10, 2018 Diffusion Pharmaceuticals Inc. (Nasdaq:DFFN) ("Diffusion" or "the Company"), a clinical-stage biotechnology company focused on extending the life expectancy of cancer patients using the novel small molecule trans sodium crocetinate (TSC) in conjunction with standard radiation and chemotherapy, reported financial results for the three months ended March 31, 2018 and provides a business update (Press release, Diffusion Pharmaceuticals, MAY 10, 2018, View Source [SID1234526477]).

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"During the first quarter patients continued to be screened and enrolled into our lead clinical program, the INvestigation of TSC Against Cancerous Tumors (INTACT) trial for the treatment of inoperable glioblastoma multiforme, or GBM," said David Kalergis, Chairman and Chief Executive Officer of Diffusion Pharmaceuticals. "In January the first patients were dosed in this 236-patient Phase 3 study. The protocol calls for half of patients to be enrolled in the treatment arm, which is standard of care radiation and chemotherapy, plus TSC, and half to be enrolled in the control arm, which is standard of care alone. The design of INTACT is based on an almost four-fold increase in overall survival at two years demonstrated in inoperable GBM patients in the preceding Phase 2 study. We are hopeful that similar survival will be demonstrated in our pivotal Phase 3 study and that TSC will provide an effective treatment for these patients, for whom current options are limited."

The Company continues to prepare for a Phase 2, randomized, double-blind, placebo-controlled trial with TSC in acute stroke. The contemplated study, based on an abstract that was presented in January at the International Stroke Conference, calls for the administration of TSC by specially-trained Emergency Medical Technicians to ambulance-transported patients within two hours of the onset of a suspected acute stroke. The in-ambulance administration could potentially overcome the current severe timing delay in administering therapy to stroke patients. The trial, which has been named the Pre-Hospital Ambulance Stroke Trial – TSC (PHAST-T), is expected to commence in late 2018, subject to funding.

Diffusion is pleased to announce the granting of U.S. patent number 9,950,067, which expands the Company’s coverage of the use of TSC and related compounds in cancer therapy. The claims of the new U.S. patent relate to the treatment of a number of cancer types such as brain cancer (including glioblastoma) and pancreatic cancer, using TSC in conjunction with radiation therapy and chemotherapy. "This new U.S. patent further strengthens our IP portfolio in cancer treatment and is relevant to our technology in the Phase 3 study," stated General Counsel and IP Counsel Thomas Byrne.

"Intellectual property is an important component of our growth strategy, and we are pleased this patent has issued," Mr. Kalergis added. "We are expecting additional patent allowances in the near future that will further augment our IP."

Financial Results for the Three Months Ended March 31, 2018

We had cash and cash equivalents of $16.2 million as of March 31, 2018. We believe that our cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements through June 2019.

We recognized $1.8 million in research and development expenses during the three months ended March 31, 2018, compared with $1.0 million during the three months ended March 31, 2017. The increase was mainly attributable to a $1.1 million increase in expense related to our Phase 3 GBM trial, offset by a $0.3 million decrease in manufacturing costs.

General and administrative expenses for the three months ended March 31, 2018 were $1.5 million compared with $1.6 million for the three months ended March 31, 2017. Salaries and wages increased by $0.2 million due to the increase in headcount, which was offset by a decrease in professional fees of approximately $0.3 million.

In connection with the private placement of our Series A preferred stock and common stock warrants in March of 2017, we determined the warrants to be classified as liabilities and subject to remeasurement at each reporting period. As a result, we recognized $10.2 million in excess fair value of the common stock warrants over the gross proceeds from our private placement. We also recognized $2.9 million in placement agent commission and other offering costs. In total, for the three months ended March 31, 2017, we recorded a $12.9 million expense for the change in fair value of our common stock warrant liabilities, which was primarily attributable to the increase in the market price for our Common Stock. There were no such charges in 2018 as the warrants were reclassified into equity in November of 2017.

On May 10, 2018 Delcath Systems, Inc. (OTCQB:DCTHD), an interventional oncology Company focused on the treatment of primary and metastatic liver cancers, reported financial results for the quarter ended March 31, 2018 (Press release, Delcath Systems, MAY 10, 2018, View Source;p=RssLanding&cat=news&id=2348432 [SID1234526476]).

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Highlights from the first quarter of 2018 and recent weeks include:

Revenue from European sales for the quarter was $0.7 million;
Completed a $5.0 million capital raise in February 2018;
Announced that the independent Data Safety Monitoring Board (DSMB) of the Phase 3 FOCUS clinical trial has again recommended that the study continue without modification;
Announced the opening of the ALIGN registration trial for the treatment of Intrahepatic Cholangiocarcinoma (ICC);
Modified the Special Protocol Agreement (SPA) with the U.S. Food and Drug Administration (FDA) for the Company’s Phase 3 clinical trial of Melphalan Hydrochloride for Injection for use with the Delcath Hepatic Delivery System (Melphalan/HDS) to treat patients with hepatic dominant ocular melanoma (OM);
CHEMOSAT featured in main stage training presentation at European Conference on Interventional Oncology;
Reported the 500th CHEMOSAT treatment in Europe;
Announced results from a multi-center analysis of Delcath’s Percutaneous Hepatic Perfusion (PHP) therapy in the peer-reviewed Journal of Surgical Oncology; largest data set outside of clinical trial showed manageable toxicity and overall median overall survival of 15.3 months; and
Secured a commercial supply of melphalan hydrochloride for injection through an agreement with Tillomed Laboratories
Management Commentary

"Our focus continues to be on resolving the cash constraints and other restrictions related to our capital structure," said Jennifer K. Simpson, Ph.D., MSN, CRNP President and CEO of Delcath. "These limitations have necessitated the series of transactions we completed in second half of 2017 and the early weeks of 2018, permitting us to exit our 2016 Convertible Note, raise additional capital, invest in our clinical development program, and advance our commercialization efforts for CHEMOSAT in Europe. We continue to work to resolve the remaining issues and secure new equity financing in order to execute our plan and create value for our shareholders."

"Despite cash constraints, revenues for the first quarter of 2018 were $0.7 million, consistent with the prior year quarter and reflecting steady adoption of CHEMOSAT in our core European markets. During the quarter, we announced a commercial supply agreement with Tillomed Laboratories for the supply of melphalan hydrochloride. This agreement provides us with firm control over our melphalan supply chain in Europe and, over time, will provide economies of scale. The supply agreement with Tillomed also gives Delcath access to the drug dossier for melphalan hydrochloride, an important asset that potentially provides a drug approval pathway with the European Medicines Agency (EMA) in Europe. As many of the cancers of the liver we are treating with CHEMOSAT are orphan indications in the United States, a Marketing Authorization Application (MAA) approval by the EMA for CHEMOSAT could potentially provide added market protection for these indications in Europe.

"Regarding our FOCUS Phase 3 Trial, we recently announced that the independent Data Safety Monitoring Board (DSMB) has completed another review of safety data for treated patients in the trial, and has again recommended that the study continue without modification. Enrollment in this trial remains slower than projected, and our ability to take proactive steps to support enrollment continues to be limited by the cash constraints we have been operating under. We continue to rollout the SPA protocol modification we announced in January to participating centers, and hope to accelerate enrollment in 2018 once cash constraints are alleviated. Any impact on enrollment from the SPA modification is not expected to be immediate, and it is unlikely that enrollment for this trial will be completed in time to submit an NDA to the FDA in 2019. We plan to update our enrollment projections in the second half of this year.

"On May 7, 2018 we announced the initiation our registration trial of Melphalan Hydrochloride for Injection for use with the Delcath Hepatic Delivery System (Melphalan/HDS) to treat patients with intrahepatic cholangiocarcinoma (ICC). Called The ALIGN Trial, this trial will seek to enroll approximately 295 ICC patients at approximately 40 clinical sites in the U.S. and Europe. The trial is being conducted under a Special Protocol Assessment (SPA) agreement reached with the U.S. Food and Drug Administration (FDA) in March 2017. The ALIGN Trial is based on a strong efficacy signal observed in the ICC tumor type through our commercial experience with CHEMOSAT in Europe. The sequential design of the therapies under investigation in the trial will allow us to minimize capital investment requirements in 2018. We are also leveraging our existing network of trial sites from our FOCUS Phase 3 trial to rollout the trial protocol as efficiently as possible. In this orphan population where there exists a huge unmet need, this trial provides us with a second pathway to commercial drug approval in the United States, and if successful we believe will be an important value driver for the Company.

"Though the recent months have been financially difficult, we remain committed to advancing our clinical and commercial programs. We are continuously working to improve our ability to operate so we can realize the potential of PHP therapy and return value to our shareholders," concluded Dr. Simpson.

First Quarter 2018 Financial Results

Revenue for the three months ended March 31, 2018 was $0.7 million, a slight decrease from $0.74 million for the prior year period. Selling, general and administrative expenses were approximately $2.4 million, unchanged from the prior year quarter. Research and development expenses for the current quarter increased to $5.7 million from $2.3 million in the prior year quarter. Total operating expenses for the current quarter were $8.1 million compared with $4.7 million in the prior year quarter.

The Company recorded net income for the three months ended March 31, 2018, of $7.2 million, an increase of $18.5 million, or 163.4%, compared to a net loss of $11.3 million for the same period in 2017. This increase in net income is primarily due to an $8.3 million decrease in interest expense primarily related to the amortization of debt discounts related to convertible notes that were fully satisfied in 2017, and a $13.5 million increase in the change in the fair value of the warrant liability, both non-cash items. Additionally, there was a $3.3 million increase in operating expenses primarily related to increased investment in our clinical trial initiatives.

Balance Sheet Highlights

As of March 31, 2018, Delcath had cash and cash equivalents of $2.0 million, compared with $4.0 million as of December 31, 2017. During the first quarter, the Company used $6.4 million of cash to fund operating activities.

In February 2018, the Company completed the sale of 424,000 shares of its common stock and the issuance of warrants to purchase 1.0 million common shares (the "February 2018 Warrants") pursuant to a placement agent agreement. The Company received net proceeds of $4.6 million, with cash proceeds after related expenses from this transaction of $4.3 million.

On April 9, 2018 the Company announced that shareholders approved the provisions of the Company’s Consent Solicitation filed with the Securities Exchange Commission (SEC) on February, 26, 2018. By a vote of 54.3%, shareholders as of the record date of February 9, 2018 approved the Company’s proposals to amend its certificate of incorporation to increase its authorized shares of common stock from 500,000,000 to 1,000,000,000 (the Authorized Share Increase), and, by a vote of 52.8%, to effect a reverse stock split of the Company’s common stock at a range of 1-for-100 to 1-for-500 (the Reverse Stock Split Authorization). We effected our increase in authorized shares on April 21, 2018 and our 1-for-500 reverse stock split on May 2, 2018.

Delcath believes it has sufficient capital and access to committed capital to fund its operating activities through May of 2018.