On August 2, 2018 Kitov Pharma Ltd. (NASDAQ/TASE: KTOV), an innovative biopharmaceutical company, reported financial results for the six months ended June 30, 2018 (Press release, Kitov Pharmaceuticals , AUG 29, 2018, View Source [SID1234529162]).
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"The first half of 2018 has been a transformational period for Kitov," said Kitov’s CEO, Isaac Israel. "Most importantly, we received U.S. Food and Drug Administration (FDA) approval to market Consensi (amlodipine and celecoxib) oral tablets for the simultaneous treatment of pain caused by osteoarthritis, as well as hypertension. We are now focused on securing an optimal U.S. commercialization partner for Consensi in the U.S. who has the capability to execute a successful product launch and provide Kitov with a solid on-going revenue stream."
"Moreover, we are excited about the continued progress we have achieved in advancing NT-219, our promising cancer therapy drug candidate," continued Mr. Israel. "We have generated compelling pre-clinical results for NT-219 to date, and expect to submit an Investigational New Drug application to the FDA and to initiate clinical trials for NT-219 in 2019."
"Finally, following our recent fund raise of approximately $8.1 million in gross proceeds, we are supported by a strong balance sheet with approximately $11.8 million in cash and deposits and no debt as of June 30, 2018," concluded Mr. Israel.
Recent Corporate Highlights:
●Received FDA approval to market Consensi in the U.S.
●Signed a License Agreement for Consensi for the territory of China with Hebei Changshan Biochemical Pharmaceutical Co., Ltd., a leading Chinese pharmaceutical company; Received $1 million down payment and entitled to receive additional milestone payments of up to $8.5 million, as well as potential double-digit royalties
●Raised $8,150,000 in gross proceeds through a registered direct offering
●Completed the acquisition of additional shares in TyrNovo from unaffiliated minority shareholders; Kitov now holds 97% of TyrNovo’s issued and outstanding shares, with the remaining 3% held by the TyrNovo founder and CTO
●Reported positive pre-clinical data from NT219 demonstrating its dose-dependent anti-tumor efficacy, supporting planned IND in 2019
●Entered into a Stipulation of Settlement with respect to the two U.S. shareholder class-action lawsuits; settlement consideration of $2.0 million expected to be fully covered by Kitov’s insurance carriers
Expected Upcoming Milestones:
●Secure a U.S. commercialization partner for Consensi
●Product launch of Consensi in the U.S. by our commercialization partner
●Expand global commercialization network for Consensi to additional territories
●Initiate regulatory approval process for Consensi in China and South Korea, by our partners
●Complete GLP toxicology studies for NT-219
●Complete manufacturing of GMP NT-219 drug product for clinical trials
Submit an IND and initiate clinical trials for NT-219
The information contained below should be read in conjunction with (1) our Unaudited Condensed Consolidated Interim Financial Statements as of June 30, 2018, and for the six months then ended; and, (2) our audited consolidated financial statements for the year ended December 31, 2017, which appears in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 5, 2018, as well as the other information contained in such Annual Report on Form 20-F and in our Registration Statements and Prospectuses filed with the SEC.
Financial Results for Six Months Ended June 30, 2018
Revenues for the six months ended June 30, 2018 were $1.0 million, consisting of an up-front payment from Changshan Biochemical Pharmaceutical Co., Ltd. in accordance with the terms of the License Agreement for Consensi. There were no revenues in the six months ended June 30, 2017.
Research and development expenses for the six months ended June 30, 2018, were $2.8 million, an increase of 13%, compared to $2.5 million for the six months ended June 30, 2017. The increase resulted primarily from higher expenses related to pre-clinical trials for NT-219, partially offset by a reduction in expenses related to Consensi, following submission of the NDA in 2017 and receipt of FDA approval in May 2018.
General and administrative expenses for the six months ended June 30, 2018, were $3.4 million, an increase of 34%, compared to $2.5 million for the six months ended June 30, 2017. The increase resulted from increases in legal fees, as well as increases in business development and other advisory services and officers’ and directors’ insurance.
Other income for the six months ended June 30, 2018, was $0.9 million, representing a reversal of other expenses of $1.0 million for the six months ended June 30, 2017, which consisted of the fair value of rights granted to Taoz, a minority shareholder in TyrNovo, upon the Company’s acquisition of Taoz’s shares in TyrNovo in June 2018, net of expenses associated with the acquisition.
Finance expense for the six months ended June 30, 2018, was $0.8 million and was primarily related to the valuation of non-registered warrants issued in 2017 and expenses related to non-registered warrants issued in 2018. Finance income for the six months ended June 30, 2017, was $0.1 million and was primarily related to interest on bank deposits.
The Company’s net loss for the six months ended June 30, 2018, amounted to $5.2 million, compared with a loss of $6.0 million for the corresponding period in 2017.
Balance Sheet Highlights
●Cash, cash equivalents and short-term deposits totaled $11.8 million at June 30, 2018, compared to 7.4 million on December 31, 2017. The increase compared to December 31, 2017, reflects net cash of approximately $7.4 million raised in a direct registered offering completed in June 2018, plus revenues of $1.0 million, less cash used in operations.
●Shareholders equity totaled $10.7 million, including $0.5 million in non-controlling interests as of June 30, 2018, compared to $8.7 million as of December 31, 2017.