Xenetic Biosciences, Inc. Reports Second Quarter 2019 Financial Results and Provides Corporate Update

On August 15, 2019 Xenetic Biosciences, Inc. (NASDAQ: XBIO) ("Xenetic" or the "Company"), a clinical-stage biopharmaceutical company focused on the discovery, research and development of next-generation biologic drugs and novel orphan oncology therapeutics, reported its financial results for the quarter ended June 30, 2019 and provided a corporate update (Press release, Xenetic Biosciences, AUG 15, 2019, View Source [SID1234538782]).

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Recent Corporate Highlights

Closed $15.0 million underwritten public offering;
Completed transformative acquisition of novel CAR T ("Chimeric Antigen Receptor T Cell") platform technology, called "XCART," a proximity-based screening platform capable of identifying CAR constructs that can target patient-specific tumor neoantigens, which has demonstrated proof-of-mechanism in B-cell Non-Hodgkin lymphomas;
Commenced XCART development efforts to conduct initial tech transfer of XCART methods to a future academic collaborator; and
Strengthened scientific advisory board with recent appointments and continued build out of expertise in hematologic cancers and cell therapy.
"Over the course of 2019 we have taken deliberate steps to transition Xenetic’s focus and opportunities with the acquisition of the XCART platform technology. We signed the acquisition agreement in the first quarter, then worked to not only fund the transaction but also to secure the capital required to advance this potentially game-changing technology through early development. Now that the financing and transaction closing are behind us, we believe we have opportunities to successfully achieve corporate, clinical and regulatory milestones and drive significant shareholder value," commented Jeffrey Eisenberg, Chief Executive Officer of Xenetic.

"We acknowledge that this has been a challenging period for our stakeholders, and unfortunately, we believe our recent progress and momentum is not properly reflected in our current share price. However, I am pleased to say that today we are essentially a new company with a clear mission and vision, and we believe that our catalytic shift in strategy with this differentiated CAR T platform technology will prove to be transformational for Xenetic. Moving forward, our team is focused on leveraging our R&D efforts on the advancement of the XCART platform to develop cell-based therapeutics for the treatment of multiple tumor types of B-cell Non-Hodgkin lymphomas, with the potential to address an initial global market opportunity of over $5 billion annually.[1] I believe Xenetic has the potential to become a significant player in this dynamic CAR T oncology space," added Mr. Eisenberg.

Platform Technologies Update

XCART Technology

On July 19, 2019, the Company completed its previously announced acquisition of a novel CAR T platform technology, called "XCART." XCART is a proximity-based screening platform capable of identifying CAR constructs that can target patient-specific tumor neoantigens, with a demonstrated proof of mechanism in B-cell Non-Hodgkin lymphomas. The XCART technology, developed by The Scripps Research Institute in collaboration with the Shemyakin-Ovchinnikov Institute of Bioorganic Chemistry, is believed to have the potential to significantly enhance the safety and efficacy of cell therapy for B-cell lymphomas by generating patient- and tumor-specific CAR T cells.

Curtis Lockshin, Ph.D., Chief Scientific Officer of Xenetic, stated, "Having completed the acquisition of our novel XCART technology platform, we are excited to embark on the development of a personalized CAR T therapy for B-cell lymphomas, with the potential to offer cancer patients substantial benefits over the existing standard of care and currently approved CAR T therapies. Our plan is to leverage this platform technology to innovate and develop new oncology therapeutics through regulatory approval and commercialization in areas of significant unmet medical need. Along the development path, we expect to identify multiple opportunities to collaborate with others in the CAR T field to maximize the potential and impact of XCART. We are intensely gratified to have this opportunity to improve human health, and by the enthusiasm of our growing team of scientific advisors in this novel and differentiated approach to Non-Hodgkin lymphomas."

The XCART technology platform was designed by its originators to utilize an established screening technique to identify peptide ligands that bind specifically to the unique B-cell receptor ("BCR") on the surface of an individual patient’s malignant tumor cells. The peptide is then inserted into the antigen-binding domain of a CAR, and a subsequent transduction/transfection process is used to engineer the patient’s T cells into a CAR T format which redirects the patient’s T cells to attack the tumor. Essentially, the XCART screening platform is the inverse of a typical CAR T screening protocol wherein libraries of highly specific antibody domains are screened against a given target. In the case of XCART screening, the target is itself an antibody domain, and hence highly specific by its nature. The XCART technology creates the possibility of personalized treatment of lymphomas utilizing a CAR with an antigen-binding domain that should only recognize, and only be recognized by, the unique BCR of a particular patient’s B-cell lymphoma.

An expected result for XCART is reduced off-tumor toxicities, such as B-cell aplasia. Xenetic’s clinical development program will seek to confirm the early preclinical results, and to demonstrate a more attractive safety profile than existing therapies.

Xenetic recently entered into a research agreement to begin the process of technology transfer of the XCART technology and enable advancement towards Xenetic’s stated goal of establishing an academic collaboration for XCART development. The Company’s early activities will build off of the work of the XCART inventors which was previously described in a Science Advances article published in November 2018.[2]

PolyXen Platform Technology

The Company’s proprietary drug development platform, PolyXen, is a platform technology which can be applied to protein or peptide therapeutics, enabling next-generation biological drugs to prolong a drug’s circulating half-life and potentially improve other pharmacological properties. PolyXen has been demonstrated in human clinical trials to confer prolonged half-life on biotherapeutics such as recombinant human erythropoietin and recombinant Factor VIII ("rFVIII"). Additionally, the Company believes that PolyXen has potential utility in other molecule classes such as small molecules.

Xenetic incorporates its patented and proprietary technologies into a number of drug candidates currently under development with biotechnology and pharmaceutical industry collaborators to create what the Company believes will be the next-generation biologic drugs with improved pharmacological properties over existing therapeutics. The Company currently has an Exclusive License Agreement with Takeda Pharmaceuticals Co. Ltd. ("Takeda") in the field of coagulation disorders. Takeda currently has one active development program underway utilizing the PolyXen platform technology. In addition, in October 2017, Xenetic granted rights to Takeda to grant a nonexclusive sublicense to certain patents related to PolyXen to a third party. The potential royalty stream resulting from the sublicense could commence by the end of 2019.

Summary of Financial Results for Second Quarter 2019

Net loss for the six months ended June 30, 2019 decreased approximately 29% to approximately $2.7 million compared to a net loss of approximately $3.8 million for the same period in 2018. The Company has continued to reduce expenses, control non-essential spending and maximize its available resources to advance its research and development efforts. The Company ended the quarter with approximately $1.0 million in cash. Subsequent to quarter end, the Company completed its $15 million public offering resulting in approximately $13.4 million of net proceeds to the Company.

"With the closing of our recent financing, the Company is now in a much stronger financial position to successfully execute on our strategic plan," James Parslow, Chief Financial Officer of Xenetic concluded. "This is truly an exciting time for Xenetic and we look forward to continuing to leverage our innovative technologies, build shareholder value in both the near and long term, and ultimately provide important therapies by leveraging our XCART platform technology."

Bavarian Nordic Announces First Half 2019 Results

On August 15, 2019 Bavarian Nordic A/S (OMX: BAVA, OTC: BVNRY) reported its interim financial results and business progress for the first half of 2019 and releases its financial calendar for 2020 (Press release, Bavarian Nordic, AUG 15, 2019, View Source [SID1234538781]).

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Paul Chaplin, President & Chief Executive Officer of Bavarian Nordic said: "We have made important progress in our strategic objectives during the first half of this year with the initiation of a Phase 3 study for the freeze-dried formulation of MVA-BN and the expansion of our proof of concept Phase 2 study for BN-Brachyury. Our financial results are fully in line with our guidance and expectations and we are looking forward to the rest of the year with a rich news flow ahead of us. We expect to report additional clinical oncology data for CV301; finalize our registration plans for RSV; obtain our first ever US approval together with a priority review voucher for MVA-BN and lastly complete the construction of our fill and finish plant that will unlock higher future revenues and return the company to profitability. It is a very exciting time to be at Bavarian Nordic".

OPERATIONAL HIGHLIGHTS

Delivering our strategy
Our strategy is four-fold, and aims to secure and reinforce a sustainable foundation, while also expanding the commercial opportunities:

MAINTAIN global leadership of our smallpox vaccine business
EXPAND and rapidly ADVANCE the pipeline of infectious disease programs
ESTABLISH a broad and deep cancer immunotherapy portfolio
EXPAND the commercial footprint and capabilities
Smallpox

The BLA review for liquid-frozen MVA-BN is continuing, with an anticipated approval and award of a Priority Review Voucher in September 2019.
In June, we initiated the pivotal and fully funded Phase 3 trial of the freeze-dried formulation of MVA-BN as planned. This randomized and double-blind study will enroll 1,110 healthy subjects into 3 groups and investigate the safety and immunogenicity of 3 different lots of freeze-dried MVA-BN. The study is expected to be completed by the end of 2020 and will support the subsequent approval of the freeze-dried formulation.
In June, the U.S. Government passed the Pandemic and All-Hazards Preparedness and Advancing Innovation Act (PAHPA) of 2019. This bill improves the funding for critical federal biodefense programs and agencies, including Biomedical Advanced Research and Development Authority (BARDA) and the Strategic National Stockpile (SNS) at 1.2 billion annually for the next five years, while the Project BioShield Special Reserve Fund (SRF) will be funded at US$ 710 million annually over the next 10 years. This strong financial support creates a more sustainable market place for companies like ours developing biological countermeasures.
The production of the bulk vaccine for the current BARDA order for freeze-dried MVA-BN has been initiated and is running smoothly, however the majority of the batches will only be invoiced in the second half of 2019 adding up to a total of USD 50 million included in our guided 2019 revenues. By year-end we will then have produced bulk vaccine worth USD 333 million since our first order in 2015.
In January, we were awarded USD 44 million by the U.S. Government for qualification of our new fill and finish facility, as well as for transfer and validation of the production process for freeze-dried MVA-BN. These activities will be finalized in 2020 before starting production of the current order to convert the bulk vaccine to approx. 13 million freeze-dried doses.
Infectious diseases

We remain at the forefront of RSV vaccine development with our differentiated vaccine candidate, which has successfully concluded Phase 2 development in elderly subjects. We continue to prepare for initiating a Phase 3 trial in 2020 and plan to announce the final plans once the Phase 3 design has been confirmed with the US regulatory authorities.
In February, our partner Janssen initiated a Phase 1/2a of the therapeutic HPV vaccine regimen. This is the first of three commercial programs under our partnership to enter clinical trials. The second program for a therapeutic HIV vaccine, is also expected to enter a Phase1/2a clinical trial later this year. Collectively, these programs, along with our Ebola collaboration, represent USD 1 billion in potential future milestone payments, in addition to royalties on future sales.
Our partnership with the U.S. Department of Defense on the development of a prophylactic vaccine against the equine encephalitis virus – a rare, but potentially deadly illness – further evolved, as we received funding to support a Phase 1 clinical trial, which we expect to initiate later this year. Successful trial results could lead to additional funding of clinical development towards licensure.
Cancer immunotherapy

In June, we reported the first results from the ongoing Phase 2 trial of BN-Brachyury for the treatment of chordoma. A partial response was observed in one of the first 10 patients recruited and treated with the vaccine in combination with radiation, thereby reaching the threshold for advancing the study into stage 2, where enrollment will be expanded to a total of 29 patients. We have seen strong support from the chordoma community for this study and expect to see a rapid enrollment of patients. For the study to be considered successful, a minimum of four out of the 29 patients with objective responses are required.
Our other immune-oncology candidate, CV301, is currently subject of three Phase 2 trials in multiple cancers, where the vaccine is combined with different immune checkpoint inhibitors. The first results from one of these trials, where CV301 is combined with atezolizumab in bladder cancer, is expected to become available later in 2019.
Both vaccine candidates will also be employed in new trials later this year to investigate new routes of administration as part of our strategy to further enhance our immuno-oncology platform.
Commercial

Construction of our fill and finish facility is progressing according to plan, and we expect the building to be completed by end of 2019, which is the peak investment year with approximately DKK 270 million in total investments. Subsequently, qualification and validation activities will begin and continue into late 2020 before initiating production of MVA-BN.
OTHER DEVELOPMENTS

The Danish tax authority decided in July to withdraw the proposed adjustment of the allocation of the PROSTVAC development costs between Bavarian Nordic A/S and its U.S. subsidiary, Bavarian Nordic, Inc. for the income years 2012-2016. The transfer pricing tax audit for 2012-2016 has thereby been completed without any changes to taxable income.
FINANCIALS AND OUTLOOK

Financial results for the first half in line with expectations

Revenue generated for the six months ending June 30, 2019 was DKK 228 million/USD 35 million (DKK 98 million/USD 15 million in the first six months of 2018).
The income before interest and tax (EBIT) was a loss of DKK 201 million/USD 31 million (loss of DKK 280 million/USD 43 million in the six months of 2018).
As of June 30, 2019, the Group’s cash preparedness was DKK 1,882 million/USD 287 million (DKK 2,314 million/USD 353 million as of December 31, 2018), including unutilized credit lines of DKK 244 million/USD 37 million (DKK 244 million/USD 37 million as of December 31, 2018).
Danish kroner (DKK) is the Company’s reporting currency. The USD figures provided above are based upon an assumed exchange rate of DKK 6.56 per 1.00 USD, which was the exchange rate as of June 30, 2019.

Outlook for 2019 maintained

The majority of our 2019 revenues are related to the production and release of bulk smallpox vaccine for the U.S. Government, which will occur in the second half of 2019. Hence, we maintain our financial expectations for 2019 as announced on March 21, 2019 with revenues of approximately DKK 600 million/USD 92 million for the full year, a loss before interest and tax (EBIT) of approximately DKK 360 million/USD 55 million and a cash preparedness at year-end of approximately DKK 1,600 million/USD 246 million.

While the Company anticipates the award of a Priority Review Voucher upon the expected approval of MVA-BN smallpox vaccine by the FDA in 2019, income from the sale of this voucher has not been included in the guidance.

The financial expectations are based on an exchange rate of DKK 6.50 per 1.00 USD. For further details regarding assumptions behind the guidance see the Annual Report 2018.

Financial calendar 2019 and 2020

The 2020 dates for announcement of the Company’s financial reports and the annual general meeting have now been determined, and planned future reporting dates are as follows:

November 7, 2019 Third quarterly report (Q3) for the nine-month period ended September 30, 2019
March 13, 2020 2019 Annual Report
April 21, 2020 Annual General Meeting *
May 14, 2020 First quarterly report (Q1) for the three-month period ended March 31, 2020
August 26, 2020 Half-year report (Q2) for the six-month period ended 30 June 2020
November 11, 2020 Third quarterly report (Q3) for the nine-month period ended 30 September 2020
* Pursuant to Article 12 of the Articles of Association, shareholders who wish to submit a request for proposals for consideration at the annual general meeting must lodge this with the Company no later than Wednesday, March 11, 2020.

Conference call and webcast
The management of Bavarian Nordic will host a conference call today at 2 pm CEST (8 am EST) to present the interim results followed by a Q&A session. A listen-only version of the call can be accessed via View Source To join the Q&A session, use one of the following dial-in numbers: Denmark: +45 32 72 80 42, UK: +44 (0) 844 571 8892, USA: +1 631-510-7495. Participant code is 5278296.

Contacts
Rolf Sass Sørensen
Vice President Investor Relations (EU)
Tel: +45 61 77 47 43

Graham Morrell
Paddock Circle Advisors (US)
[email protected]
Tel: +1 781 686 9600

Company Announcement no. 14 / 2019

Xynomic Pharma Receives Important Accreditation from Independent Ethics Committees of Leading Chinese Cancer Hospitals

On August 15, 2019 Xynomic Pharmaceuticals Holdings, Inc. ("Xynomic", stock ticker: XYNO), a clinical stage US-China oncology drug development company, reported that the Independent Ethics Committees at three leading Chinese cancer hospitals (Fujian Provincial Hospital, Tongji Medical College in Huazhong University of Science and Technology, and Qilu Hospital of Shandong University) have approved Xynomic’s application to conduct pivotal Phase 3 trial using Xynomic’s abexinostat, in combination with pazopanib, in patients with renal cell carcinoma (Press release, Xynomic Pharmaceuticals, AUG 15, 2019, View Source [SID1234538778]).

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Dr. Jun Guo, a professor and the medical director at Peking University Cancer Hospital & Institute, will be the leading principal investigator for this trial in China. According to Fudan University’s Hospital Management Institute, Peking University Cancer Hospital & Institute is one of the top 3 cancer specialty hospitals in China.

"High performing investigator sites are essential to a successful clinical trial. One of the most important decisions Xynomic makes when embarking on a new clinical trial is the choice of the principal investigators. We are very pleased to work with these sites that have world-class infrastructure to fulfill all the activities specified in the protocol. In addition, these sites routinely treat a large number of lymphoma patients, critical to our patient recruitment effort." Mr. Y. Mark Xu, Chairman and CEO of Xynomic commented.

In addition, the Independent Ethics Committees at the Cancer Hospital Chinese Academy of Medical Sciences in Beijing and West China Hospital of Sichuan University have approved Xynomic’s application to conduct two pivotal Phase 2 trials, one to test abexinostat as a third-line mono therapy against diffuse large B-cell lymphoma ("DLBCL") and the other as a third-line mono therapy against follicular lymphoma ("FL"). According to Chinese Medical Association’s Chinese Society of Hematology, DLBCL and FL are the most prevalent and second most prevalent non-Hodgkin’s lymphoma subtype, respectively, in China.

Xynomic Filed Fast-Track Designation Application for Follicular Lymphoma Treatment with the U.S. FDA

On August 15, 2019 Xynomic Pharmaceuticals Holdings, Inc. ("Xynomic", stock ticker: XYNO), a clinical stage U.S.-China oncology drug development company, reported that it has filed an application with the U.S. Food and Drug Administration ("U.S. FDA") seeking Fast-Track designation for its drug candidate abexinostat as a monotherapy for the treatment of relapsed or refractory follicular lymphoma ("r/r FL") (Press release, Xynomic Pharmaceuticals, AUG 15, 2019, View Source [SID1234538777]).

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Fast-Track designation is designed to aid in the development and expedite the review of drug candidates, which show promise in treating a serious or life-threatening disease, and address an unmet medical need. A drug candidate that receives Fast-Track designation is eligible for more frequent meetings and correspondences with the U.S. FDA and potential accelerated or priority review and more. The U.S. FDA will review the request and attempt to make a decision within 60 days.

According to Cancer.net, follicular lymphoma is the second most common form of lymphoma in the U.S. and Europe. Xynomic is conducting a Phase 2 trial to test abexinostat as a single agent in patients with r/r FL. Designed as a single arm trial, this trial will enroll approximately 120 patients in the U.S. and Europe who have undergone at least three lines of therapy to test abexinostat as a fourth line monotherapy.

The U.S. FDA has already granted Fast-Track designation to abexinostat, in combination with pazopanib, as a first- or second-line treatment of renal cell carcinoma ("RCC"). A global, randomized pivotal Phase 3 trial is underway to test abexinostat combined with pazopanib as a first- or second-line therapy in patients with locally advanced or metastatic RCC.

About Xynomic Pharmaceuticals Holdings, Inc.
Xynomic Pharmaceuticals Holdings, Inc. is a clinical stage oncology-focused biopharmaceutical company. Its current pipeline mainly consists of 3 drug candidates; Xynomic owns global exclusive development, manufacturing and commercialization rights to each of these. Its lead drug candidate abexinostat is in global potentially pivotal clinical trials against renal cell carcinoma (in combination with pazopanib) and non-Hodgkin’s lymphoma (as a single agent). Xynomic’s XP-105 (BI 860585) is a Phase 2 ready, ATP-competitive mTORC1/2 inhibitor against solid tumors. Xynomic’s XP-102 (BI 882370) is a Phase 1 ready pan-RAF inhibitor.

Use of Forward-Looking Statements

This press release contains "forward-looking" statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of these terms or other similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause

Phio Pharmaceuticals and Helmholtz Zentrum München to Collaborate on Novel Targets for the Use of Self-Delivering RNAi In T Cell and NK Cell Adoptive Cell Therapy Therapeutics

On August 15, 2019 Phio Pharmaceuticals Corp. (NASDAQ: PHIO), a biotechnology company developing the next generation of immuno-oncology therapeutics based on its proprietary self-delivering RNAi (sd-rxRNA) therapeutic platform, reported that is has entered into a research collaboration with the Helmholtz Zentrum München (Press release, Phio Pharmaceuticals, AUG 15, 2019, View Source [SID1234538776]). The agreement covers the design and development of new targets based on Phio Pharmaceuticals’ proprietary self-delivering RNAi platform for use in cancer immunotherapies. This work will be performed at the Immunoanalytics Core Facility & research group under leadership of Prof. Dr. Elfriede Nößner and will complement Phio Pharmaceuticals’ internal research and development activities and collaborations with various other academic and industry partners.

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Dr. John A. Barrett, Chief Development Officer of Phio Pharmaceuticals, stated: "We are excited to be working with Dr. Nößner and her team who are experts in the study of lymphoid and myeloid effector cells and how to improve their contribution in overcoming tumor immunosuppression. In addition, the group has a successful track record of industry collaborations, thus the work will be of direct relevance for the development of the next generation therapeutics based on our self-delivering RNAi platform."

Prof. Dr. Elfriede Nößner, Head of Immunoanalytics at the Helmholtz Zentrum München, said: "Available data shows that Phio Pharmaceuticals’ self-delivering RNAi technology is ideally suited to inhibit checkpoints in immune effector cells such as T cells and NK cells in the microenvironment of solid tumors or inflammatory diseases. I look forward to working with the Phio team on targets beyond their interesting checkpoint-inhibiting self-delivering RNAi pipeline."