On August 10, 2020 Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, reported financial results for the second quarter ending June 30, 2020 (Press release, Integra LifeSciences, AUG 10, 2020, View Source [SID1234563343]).
Second Quarter 2020 Financial Summary

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Reported revenues were $258.7 million, representing a decrease of 32.6% on a reported basis and 31.3% on an organic basis compared to the prior year. These results were above the high end of the preliminary results provided on July 9, 2020;

GAAP loss per diluted share was ($0.00), compared to GAAP earnings of $0.34 in the second quarter of 2019. Adjusted earnings per diluted share were $0.33, compared to $0.73 in the prior year. The decline was largely attributable to lower revenues due to the impact of COVID-19;

The Company’s full-year 2020 guidance remains withdrawn due to the uncertainty related to COVID-19 and the extent of the recovery in surgical procedure volumes.
"We are encouraged by the sequential, monthly improvement in revenue throughout the second quarter following the lows experienced in April," said Peter Arduini, Integra’s president and chief executive officer. "I want to thank our Integra colleagues for their perseverance and commitment to our customers and patients during these challenging times. Given the strength of our people and our financial agility, I remain confident the Company will return to long-term growth."

The Company reported GAAP gross margin of 59.2%, compared to 62.6% in the second quarter of 2019. Adjusted gross margin was 66.2%, compared to 67.4% in the prior year.
Adjusted EBITDA for the second quarter of 2020 was $52.8 million, or 20.4% of revenue, compared to $97.9 million, or 25.5% of revenue, in the prior year.
The Company reported GAAP net loss of $(0.4) million, or ($0.00) per diluted share, in the second quarter of 2020, compared to GAAP net income of $29.7 million, or $0.34 per diluted share, in the prior year.

Adjusted net income for the second quarter of 2020 was $28.4 million, or $0.33 per diluted share, compared to $63.4 million, or $0.73 per diluted share, in the prior year.
Second quarter revenues were negatively impacted by COVID-19 and the associated reduction of non-emergent surgical procedures. Lower procedure volumes also contributed to the lower gross margins, EBITDA and net income, year over year. To partially mitigate this impact, the Company initiated a cost savings plan in April, while maintaining investments in critical R&D, clinical and long-term growth programs. These actions contributed to a 28% reduction of total operating expenses in the second quarter as compared to the prior period.
Integra’s financial position and liquidity remain strong. The Company ended the quarter with $361 million in cash and cash equivalents, $1.15 billion in undrawn revolver capacity, and a consolidated total leverage ratio of 3.4x.
In July, the Company amended its credit agreement to temporarily increase its maximum consolidated total leverage ratio from 5.0x to 5.5x for the four financial quarters beginning July 1, 2020 and ending June 30, 2021. The Company entered into this amendment to increase financial flexibility in light of the unprecedented impact of the COVID-19 pandemic and the related uncertainty surrounding the global economy.
During the second quarter, the Company completed the accelerated share repurchase (ASR) agreement, entered into in February 2020. A total of 1.9 million shares were repurchased in the first half of 2020.
2020 Full-Year Outlook
Due to the ongoing uncertainty around the scope and duration of the pandemic and the timing of recovery across the globe, the Company’s guidance for the full-year 2020 remains withdrawn. The Company continues to expect quarterly sequential revenue improvement in the second half of 2020 as compared to the second quarter of 2020. For the third quarter of 2020, revenues are expected to remain below prior year levels due to COVID-19 and the associated reduction of non-emergent surgical procedures. The Company does not expect all markets and product lines to improve at the same rate. The level and location of COVID-19 emergence or recurrence and its associated impact on surgical procedure volumes, as well as economic normalization, will shape the Company’s recovery.
Supplemental financial and operational information is included in a presentation that can be found in the "Investor" section of the Company’s website at investor.integralife.com under "Events & Presentations".
In the future, the Company may record, or expects to record, gains or losses, expenses, or charges as described in the Discussion of Adjusted Financial Measures below, which will be excluded from the calculation of adjusted EBITDA, adjusted earnings per share for historical periods and in adjusted earnings per share guidance.

Conference Call and Presentation Available Online
Integra has scheduled a conference call for 4:30 PM ET today, Monday, August 10, 2020, to discuss financial results for the second quarter. The conference call will be hosted by Integra’s senior management team and will be open to all listeners. Additional forward-looking information may be discussed in a question and answer session following the call.
Integra’s management team will reference a presentation during the conference call. The presentation can be found on investor.integralife.com.
Access to the live call is available by dialing (800) 263-0877 and using the passcode 4133628. The call can also be accessed via a webcast link provided on investor.integralife.com. A replay of the call will be available until August 15, 2020 by dialing (888) 203-1112 and using the passcode 4133628. The webcast will also be archived on the website.

On August 10, 2020 Castle Biosciences, Inc. (Nasdaq: CSTL), a skin cancer diagnostics company providing personalized genomic information to improve cancer treatment decisions, reported its financial results for the second quarter and six months ended June 30, 2020 (Press release, Castle Biosciences, AUG 10, 2020, View Source [SID1234563331]).
"While our second quarter financial results reflect COVID-19 impacts, thanks to the strong execution by our employees, we continue to successfully navigate these challenging times," said Derek Maetzold, Castle’s president and chief executive officer. "We have seen a notable improvement in DecisionDx-Melanoma orders since April’s low, with sequential gains throughout the quarter leading to a year-over-year increase in June and continued year-over-year gains in July. Additionally, we maintained strong gross margins and delivered positive operating cash flow for the quarter.
"With the publication of multiple peer-reviewed articles, we saw significant evidence development, including publication of two systematic reviews and meta-analyses regarding Decision-Dx Melanoma. Evidence development supports both clinician adoption and payor coverage of our commercially available tests, DecisionDx-Melanoma and DecisionDx-UM, and our pipeline tests. Additionally, as we continue to position ourselves for near- and long-term growth, we are moving forward with our planned commercial team expansion in the second half of 2020.
"We are pleased with the continued progress of our pipeline tests, which importantly allows us to expand our services for patients who are diagnosed with early stage skin cancers. We plan for DecisionDx-SCC, our pipeline test for patients with high-risk cutaneous squamous cell carcinoma (SCC), to be commercially available at the beginning of September. DecisionDx-SCC is designed to identify a patient’s risk of metastasis, in order to enable more informed, risk-appropriate clinical decisions regarding adjuvant therapy and other management options.
"In addition, our team completed the clinical validation work needed to launch our pipeline test for use in suspicious pigmented lesions, and as previously stated, we expect this test to become commercially available in the second half of 2020. We estimate that combined, our three skin cancer products, DecisionDx-Melanoma, DecisionDx-SCC and our test for suspicious pigmented lesions, will have a total addressable U.S. market of approximately $2.0 billion."
Second Quarter Ended June 30, 2020, Selected Results
•Revenue was $12.7 million in the second quarter of 2020, an 18% increase compared to $10.7 million in the second quarter of 2019.
•Delivered 3,008 DecisionDx-Melanoma test reports in the second quarter of 2020, which represents a 19% decrease compared to the 3,691 reports delivered in the second quarter of 2019. The Company believes this decrease is the result of fewer patient visits to physicians during the quarter due to the COVID-19 pandemic.
•The number of new ordering clinicians (first time ordering a test) for DecisionDx-Melanoma decreased by 43% in the second quarter, compared to the same period in 2019; however, the Company did

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convert new clinicians during the quarter. The Company believes this decrease is the result of physician office closures and limited physician access during the quarter due to the COVID-19 pandemic.
•Delivered 306 DecisionDx-UM test reports in the second quarter of 2020, compared to 376 reports in the second quarter of 2019. The Company believes this decrease is the result of fewer patient visits to physicians during the quarter due to the COVID-19 pandemic.
•Gross margin in the second quarter of 2020 was 83.1%.
•Operating cash flow was $13.5 million in the second quarter of 2020, compared to $0.5 million in the second quarter of 2019.
•Adjusted operating cash flow, excluding the effects of certain relief payments described below, was $3.3 million in the second quarter of 2020, compared to $0.5 million in the second quarter of 2019.
Six Months Ended June 30, 2020, Selected Results
•Revenues were $30.1 million, a 55% increase compared to $19.5 million during the same period in 2019.
•Delivered 7,582 DecisionDx-Melanoma test reports, an increase of 10% over the same period in 2019.
•Delivered 667 DecisionDx-UM test reports, a decrease of 9% over the same period in 2019.
•The number of new ordering clinicians for DecisionDx-Melanoma decreased by 6%, compared to the same period in 2019.
•Gross margin was 84.9%.
•Operating cash flow was $13.3 million, compared to $1.8 million for the same period in 2019.
•Adjusted operating cash flow, excluding the effects of certain relief payments described below, was $3.0 million, compared to $1.8 million for the same period in 2019.
Cash and Cash Equivalents
As of June 30, 2020, the Company’s cash and cash equivalents totaled $179.8 million, which includes net proceeds of approximately $69.5 million from the Company’s June 2020 public offering of 2,000,000 shares of common stock. On July 2, 2020, the Company announced that the underwriters of the public offering exercised in full their option to purchase an additional 300,000 shares of common stock. The additional net proceeds were approximately $10.4 million.
As of June 30, 2020, the outstanding principal balance on the Company’s bank term loan was $25.9 million.
COVID-19 Update
Since the beginning of the pandemic to date, the Company has maintained uninterrupted access to its proprietary DecisionDx-Melanoma test and DecisionDx-UM test and has maintained normal turnaround times for delivery of test reports. Based upon an analysis of the Company’s supply channel and current inventory levels, the Company believes it has adequate access to reagents and consumables needed for testing patient samples and expects to continue providing normal turnaround times for delivery of test reports.
In the second quarter of 2020, the number of DecisionDx-Melanoma test reports the Company delivered decreased by 19%, compared to the same quarter of 2019. Additionally, COVID-19 negatively impacted clinician orders of the Company’s DecisionDx-Melanoma test, which the Company believes is linked to delays and/or cancellations in patient visits, resulting in reduced diagnostic biopsies and thus reduced diagnoses of cutaneous melanoma. The largest impact was seen in April, improving sequentially throughout the remainder of the quarter. Specifically:
•In April, DecisionDx-Melanoma orders decreased 45% year-over-year;
•In May, DecisionDx-Melanoma orders decreased 39% year-over-year; and
•In June, DecisionDx-Melanoma orders increased 10% year-over-year.

The year-over-year increase of monthly DecisionDx-Melanoma orders continued in July 2020. In light of COVID-19, the Company believes this order data provides additional insight into current demand trends when considered in conjunction with test report volumes. However, orders received in a particular period do not necessarily correspond with actual delivered test reports or reported revenues for the same period or subsequent periods.
In the second quarter of 2020, COVID-19 negatively impacted the Company’s year-over-year number of new ordering clinicians for DecisionDx-Melanoma. The largest impact was seen in April, improving sequentially throughout the remainder of the quarter. The improvement, over April figures, of the Company’s year-over-year number of new ordering clinicians for DecisionDx-Melanoma continued in July 2020.
The Company believes the improvement observed in DecisionDx-Melanoma test orders since April is driven in part by the reopening of dermatology practices and rescheduled patient visits, which have generally coincided with the easing of state and local government restrictions.
The COVID-19 pandemic’s impact on the Company’s future test report volumes, operating results, cash flows, results of operations and/or financial condition, among other things, will be primarily driven by such variables as the pandemic’s severity, duration and the impact of state and local government restrictions on the U.S. healthcare system, which the Company is unable to predict or control.
Supplemental Revenue Information
Included in revenue for the quarter ended June 30, 2020, were positive revenue adjustments related to tests delivered in prior periods of $2.3 million. This compares to positive adjustments of $3.3 million for the quarter ended June 30, 2019. For the six months ended June 30, 2020 and 2019, these amounts totaled $1.0 million and $2.8 million, respectively. The positive revenue adjustments include the recognition of revenue for certain tests delivered in prior periods for which no revenue was recognizable originally but was recognized upon cash collection of payments for the tests in the applicable periods.

Second Quarter Business and Clinical Evidence Highlights
•Data from a systematic review and meta-analysis of the DecisionDx-Melanoma test was published in the Journal of the American Academy of Dermatology (JAAD). Under multi-variate analysis, the DecisionDx-Melanoma test was shown to be independent from other clinical factors (age, Breslow tumor thickness, ulceration and node status) and improve upon risk assessment performed with staging factors alone. Under the Strength of Recommendation Taxonomy (SORT) system, a systematic review and meta-analysis provides for the highest level of evidence for a prognostic biomarker (Level 1 evidence). The SORT system is used by the American Academy of Dermatology and other organizations to evaluate the quality, quantity and consistency of evidence supporting tests, such as DecisionDx-Melanoma. For details, see the Company’s news release from April 1, 2020.
•The development and validation data of DecisionDx-SCC for patients diagnosed with high-risk cutaneous SCC was recently published in JAAD. The results demonstrate that DecisionDx-SCC is the strongest, as well as an independent, predictor of metastatic risk relative to current SCC staging systems and can complement clinicopathologic risk factors to better stratify risk of metastasis in patients with high-risk SCC. For details, see the Company’s news release from April 29, 2020.
•Study data supporting a framework for integration of DecisionDx-SCC into risk-appropriate management of 300 high-risk cutaneous SCC patients (as defined by National Comprehensive Cancer Network (NCCN)), were recently published in Current Medical Research & Opinion (CMRO) and found combining DecisionDx-SCC class with American Joint Committee on Cancer (AJCC) T stage identified a group of 159 low-risk patients (Class 1, T1-T2) with a 7.5% rate of metastasis. Similarly, combining test results with Brigham and Women’s Hospital (BWH) staging identified 173 patients with a metastasis rate of 8.1%. By comparison, Class 2B patients in the study had rates of metastasis

surpassing 50%, regardless of the staging system with which it was combined, a rate that may warrant a high intensity plan within NCCN management recommendations. With the incorporation of DecisionDx-SCC results with T stage for these 300 patients with NCCN high-risk features, more than 50% would have been recommended a low intensity management plan, while 34-39% would be recommended for a moderate intensity plan, and only 8% for a high intensity plan. For details, see the Company’s news release from May 5, 2020.
•Results from an intended use survey involving 162 clinicians were also published in CMRO. Using the established pre-test post-test vignette methodology, clinicians determined the treatment plan they would employ for patients with high-risk SCC. Clinicians were then asked to determine the treatment plan with the addition of DecisionDx-SCC test results. Adding a DecisionDx-SCC low-risk Class 1 result to clinicopathologic information led to an overall reduction in treatment plan modality intensity by more than 60% when compared to clinicopathological features alone. Adding a Decision-SCC Class 2B test result to clinicopathologic information led to an overall escalation in treatment plan modality intensity by more than 90% when compared to clinicopathological features alone. Importantly, more than 95% of the changes were made in a risk appropriate manner within established NCCN-guidelines for patient management. For more details, see the Company’s news release from May 19, 2020.
Recent Business and Clinical Evidence Updates
•The Company recently received approval from the New York State Department of Health for its DecisionDx-UMSeq 7-gene test that uses next-generation sequencing to identify somatic mutations relevant to uveal melanoma. The receipt of this approval allows patients in that state to benefit from the DecisionDx-UMSeq test. The Company previously received its New York State Clinical Laboratory permit in June 2018 and has current approval for all of its commercially available molecular diagnostic tests. The Company’s laboratory is accredited by the College of American Pathologists (CAP) and is certified under the Centers for Medicare & Medicaid Services (CMS) Clinical Laboratory Improvement Amendments (CLIA).
•A second and independent, systematic review and meta-analysis was published recently in SKIN: The Journal of Cutaneous Medicine, demonstrating DecisionDx-Melanoma as an independent predictor of recurrence, distant metastasis and overall survival in cutaneous melanoma. Under multi-variate analysis, the DecisionDx-Melanoma test was shown to be independent from other clinical factors (age, Breslow tumor thickness, ulceration and node status) and improve upon risk assessment performed with staging factors alone. As noted above, a systematic review and meta-analysis represents the highest level of evidence for prognostic risk of metastasis tests, such as DecisionDx-Melanoma. For more details, see the Company’s news release from July 9, 2020.
•Data from a multicenter, prospective study demonstrating that DecisionDx-UM test results significantly impacted treatment plan recommendations for patients with uveal melanoma (UM) were recently published in the peer-reviewed journal Ocular Oncology and Pathology. The results of this study support that DecisionDx-UM is used to appropriately guide metastatic surveillance in UM patients. DecisionDx-UM high-risk Class 2 patients were managed more intensely, in accordance with an observed metastatic rate of greater than 50%, while low-risk Class 1 patients were managed with low-intensity surveillance, resulting in appropriate utilization of healthcare resources. For more details, see the Company’s news release from July 15, 2020.

Conference Call and Webcast Details
Castle Biosciences will hold a conference call on Monday, August 10, 2020, at 4:30 p.m. Eastern time to discuss its second quarter 2020 results and provide a corporate update.
A live webcast of the conference call can be accessed here: View Source

or via the webcast link on the Investor Relations page of the Company’s website (www.castlebiosciences.com). Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company’s website until August 31, 2020.
To access the live conference call via phone, please dial 877-282-2581 from the United States and Canada, or +1 470-495-9479 internationally, at least 10 minutes prior to the start of the call, using the conference ID 7388802.
There will be a brief Question & Answer session following management commentary.
Use of Non-GAAP Financial Measures (UNAUDITED)
In this release, we use the metric of Adjusted Operating Cash Flow, which is a non-GAAP financial measure and is not calculated in accordance with generally accepted accounting principles in the United States (GAAP). This non-GAAP financial measure reflects adjustments to net cash provided by operating activities to remove the effects of two payments we received associated with government aid to healthcare providers due to COVID-19, which we believe are not indicative of our ongoing operations.
We use Adjusted Operating Cash Flow internally because we believe this metric provides useful supplemental information in assessing our cash flow performance from our core ongoing business activities by removing the effects of these items on our operating cash flows. We believe this metric is also useful to investors as a supplement to GAAP measures in analyzing the performance of our business. However, this non-GAAP financial measure may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes. This non-GAAP financial measure is not meant to be a substitute for net cash provided by operating activities reported in accordance with GAAP and should be considered in conjunction with our financial information presented on GAAP basis. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of this non-GAAP financial measure to the most directly comparable GAAP financial measure are presented in the table at the end of this press release.

On August 10, 2020 AVEO Oncology (Nasdaq: AVEO) reported financial results for the second quarter ended June 30, 2020 and provided a business update (Press release, AVEO, AUG 10, 2020, View Source [SID1234563330]).

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"The first half of 2020 was one of the most important periods in AVEO’s history to date, with the successful completion of the TIVO-3 study and the acceptance for filing and substantive review of a New Drug Application (NDA) for tivozanib as a treatment for relapsed or refractory renal cell carcinoma (RCC)," said Michael Bailey, president and chief executive officer of AVEO. "Through successful debt and equity financings, we now expect to have access to the capital to ensure a robust launch of FOTIVDA (tivozanib) into 2022 to potentially address what we believe is a significant unmet need for an effective, better tolerated drug. Currently, more than half of patients are opting to forego third or later lines of therapy, largely due to issues of tolerability and a lack of evidence-based studies in this setting.1 Supported by positive results from TIVO-3, we believe tivozanib could address these challenges and allow patients to continue their fight against cancer, and therefore has the potential to become a standard of care in this large and growing segment of the market."

Mr. Bailey added, "With TIVO-3 complete, we are now evaluating several opportunities to initiate new pivotal studies for both tivozanib and ficlatuzumab. Building on the TiNivo and DEDUCTIVE trials in RCC and hepatocellular carcinoma (HCC) respectively, we believe tivozanib’s activity, favorable safety profile, and ability to significantly reduce regulatory T cells2 all have the potential to make tivozanib a companion tyrosine kinase inhibitor of choice in these settings. In addition, the early data we have seen in the randomized head and neck cancer (HNSCC) study with ficlatuzumab combined with cetuximab (ERBITUX), which could serve as the basis for pursuing a pivotal study in this tumor type, has led us to initiate the process to evaluate securing additional clinical manufacturing capacity. Finally, we expect AV-380 to enter into a Phase 1 study

in the first quarter of 2021, if an Investigational New Drug (IND) application which we expect to file by year end 2020, is accepted by the U.S. Food and Drug Administration (FDA)."

Tivozanib Updates

Announced FDA Acceptance for Filing of an NDA for Tivozanib as a Treatment of Relapsed or Refractory RCC. In June 2020, AVEO announced that the FDA accepted for filing its NDA seeking approval for tivozanib, the Company’s next-generation vascular endothelial growth factor receptor tyrosine kinase inhibitor (VEGFR-TKI), as a treatment for relapsed or refractory RCC. The FDA has assigned the application standard review and a Prescription Drug User Fee Act target action date of March 31, 2021. The FDA also indicated that they do not currently plan on convening an Oncologic Drug Advisory Committee (ODAC) to discuss the application.

The NDA submission is based on AVEO’s pivotal Phase 3 study, TIVO-3, comparing tivozanib to sorafenib in 3rd and 4th line RCC. The application is also supported by three additional trials in RCC and includes safety data from over 1,000 clinical trial subjects.

Preparations Underway to Support Potential Commercial Launch of Tivozanib in the U.S. In preparation for the potential commercial launch of tivozanib in the U.S., the Company is actively engaged in the expansion of its sales, marketing, market access and medical affairs teams, as well as working to enable distribution capabilities by the end of the year. The Company also reported that the FDA has conditionally accepted "FOTIVDA" as the proprietary brand name for tivozanib in the U.S.

Presented TIVO-3 Final Overall Survival Results at ASCO (Free ASCO Whitepaper) 2020 Virtual Scientific Program. In May 2020, the Company presented data from the final overall survival (OS) analysis of the pivotal Phase 3 TIVO-3 trial at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2020 Virtual Scientific Program. The final OS hazard ratio (HR) of 0.97 was similar to those observed with prior approved VEGFR TKI vs. VEGFR TKI pivotal studies in RCC.3-6 TIVO-3 represents the first positive Phase 3 superiority study designed to help guide treatment decisions in third and fourth line RCC, a growing patient population with a high unmet medical need for effective and better tolerated therapies.

A copy of the presentation is available on the Publications & Presentations section of AVEO’s website.

Announced Advancement to the Phase 2 Portion of Phase 1b/2 DEDUCTIVE Study of Tivozanib in Combination with IMFINZI (durvalumab) in Previously Untreated HCC After No Dose-Limiting Toxicities Observed in Phase 1 Portion. In May 2020, AVEO announced that the Phase 1b/2 DEDUCTIVE clinical trial evaluating tivozanib in combination with IMFINZI (durvalumab), AstraZeneca’s human monoclonal antibody directed against programmed death-ligand 1 (PD-L1), in patients with first line metastatic HCC has progressed to the Phase 2 portion of the trial. Advancement of the study into the Phase 2 portion, for which enrollment is currently underway, was based on findings from the recently completed Phase 1 portion of the combination in which no dose limiting toxicities were observed.

Taken together with positive results from the TiNivo study, a Phase 1b/2 multicenter trial of tivozanib in combination with PD-1 inhibitor nivolumab (OPDIVO, Bristol-Myers Squibb) in first or second line metastatic RCC, AVEO is currently evaluating opportunities to initiate potential registrational immunotherapy combination studies.

Tivozanib Non-Oncology Partnership Update

$2.8 Million Development Milestone from Kyowa Kirin Co., Ltd. The Company recently announced that it earned a $2.8 million development milestone payment from partner Kyowa Kirin Co., Ltd. (Kyowa Kirin). The milestone relates to acceptance by the Japanese Pharmaceuticals and Medical Devices Agency of an IND application for tivozanib in a non-oncology indication being developed by Kyowa Kirin.

Under the terms of AVEO’s agreement with Kyowa Kirin, in addition to the previously-paid upfront payment of $25 million to AVEO, waiver of AVEO’s obligation to make an $18 million milestone payment upon AVEO gaining U.S. marketing approval of tivozanib for RCC, and the $2.8 million IND development milestone, Kyowa Kirin has also agreed to pay AVEO up to an additional $388 million in potential milestone payments upon the successful achievement of certain development, regulatory, and commercial objectives in non-oncology indications of tivozanib. Kyowa Kirin will also be obligated to make tiered royalty payments on the net sales of a product for these indications, ranging from a high single-digit to low double-digit percent.

Ficlatuzumab Update

Based on Early Data from Randomized Phase 2 Study of Ficlatuzumab in Combination with Erbitux in Head and Neck Cancer, AVEO Currently Evaluating Phase 3 Study Opportunities. AVEO’s potent hepatocyte growth factor (HGF) inhibitory antibody, ficlatuzumab, which binds to the HGF ligand with high affinity and specificity to inhibit HGF/c-Met biological activities, is being studied in an ongoing randomizedconfirmatory Phase 2 study in combination with cetuximab, an EGFR-targeted antibody, in metastatic HNSCC. The study was designed to confirm findings from a Phase 1 study of ficlatuzumab and cetuximab where the combination was well tolerated and resulted in a disease control rate of 67%, as well as prolonged progression free and OS compared to historical controls. The Phase 2 multi-center study is being conducted under the direction of Julie E. Bauman, MD, MPH, Professor of Medicine, Chief, Division of Hematology/Oncology, Associate Director of Translational Research, University of Arizona Cancer Center. Enrollment is expected to conclude in the fourth quarter of 2020, and results from the study are expected to be presented at a scientific meeting in the first half of 2021. AVEO and its partner Biodesix are evaluating the process to secure additional clinical manufacturing of ficlatuzumab to potentially enable a Phase 3 clinical trial of ficlatuzumab for the treatment of HNSCC in 2022.

Data from Phase 1 Study of Ficlatuzumab and Cetuximab in HNSCC Published in Cancers. Data from the Phase 1 study of ficlatuzumab and cetuximab in patients with HNSCC were recently published in the journal Cancers. The combination of ficlatuzumab and cetuximab demonstrated an acceptable safety profile and showed promising antitumor activity in a refractory HNSCC patient population. A link to the publication, titled, "Phase I Study of Ficlatuzumab and Cetuximab in Cetuximab-Resistant, Recurrent/Metastatic Head and Neck Cancer", is available on the Publications & Presentations section of AVEO’s website.

Company on Track for IND Application Submission by Year-end, with Phase 1 Clinical Study Planned for the First Quarter of 2021. AVEO plans to submit an IND application to the FDA for AV-380, its first-in-class, potent, humanized inhibitory antibody targeting growth differentiation factor 15 (GDF15), for the treatment of cancer cachexia by year-end. Cachexia, a common complication in patients with advanced cancer and other chronic diseases, is a complex metabolic syndrome characterized by malnutrition and severe involuntary weight loss due to the loss of muscle and fat tissue, as well as the clinical manifestation of anemia, inflammation and suppression of immune functions. Preparations for a Phase 1 trial are currently underway.

Corporate Updates

Raised Gross Proceeds of $51.1M in Oversubscribed Public Offering. In June 2020, AVEO announced the closing of an oversubscribed underwritten public offering yielding aggregate gross proceeds of approximately $51.1 million, before deducting underwriting discounts and commissions and offering expenses payable by AVEO. The financing was led by investors Deerfield Management, New Enterprise Associates and Cormorant Capital.

Announced Restructuring of Existing Term Loan with Closing of New Tranched, $35 Million Debt Facility, Potentially Providing for Working Capital into 2022. The Company announced today the closing of a tranched, $35 million debt facility with Hercules Capital, Inc. and its affiliates. The new facility has a maturity of 36 months, extendable up to 48-months, and an interest-only period of 12 months, extendable up to 30 months upon the achievement of performance milestones related to the approval and commercialization of tivozanib. Under the terms of the agreement, the initial tranche of $15 million fully refinanced AVEO’s existing Hercules term loan facility, which had an outstanding principal amount of approximately $9.7 million, providing net new proceeds of $5.3 million. A second $10 million tranche is contingent upon the approval of the tivozanib NDA by the FDA as a treatment for RCC, and certain other terms and conditions. An additional two $5 million tranches will become available after that time – one if net product revenues of tivozanib reach $20.0 million within a specified time frame, and the other at the lender’s consent. As previously announced, the FDA has assigned AVEO’s NDA a Prescription Drug User Fee Act target action date of March 31, 2021

Second Quarter 2020 Financial Results

AVEO ended Q2 2020 with $71.4 million in cash, cash equivalents and marketable securities as compared with $47.7 million at December 31, 2019.

Total revenue was approximately $0.7 million in each of Q2 2020 and Q2 2019.

Research and development expense for Q2 2020 was $4.4 million compared with $2.6 million for Q2 2019.

General and administrative expense for Q2 2020 was $3.7 million compared with $3.0 million for Q2 2019.

Net loss for Q2 2020 was $7.3 million, or net loss of $0.42 per basic and diluted share, compared with net loss of $3.1 million for Q2 2019, or net loss of $0.20 per basic and diluted share, respectively. The net loss in Q2 2019 reflects a $2.2 million non-cash gain that was attributable to the decrease in fair value of the 2016 private placement warrant liability that principally resulted from a decrease in the stock price that occurred within the period.

Financial Guidance

AVEO believes that its as-adjusted $79.5 million in cash, cash equivalents and marketable securities as of June 30, 2020, consisting of $71.4 million in cash, cash equivalents and marketable securities at June 30, 2020 together with the $2.8 million KKC milestone and the $5.3 million in new loan funding from Hercules, along with partnership cost sharing reimbursements, royalties from EUSA’s FOTIVDA sales and, if the pending marketing application for FOTIVDA is approved by the FDA, resulting product revenues upon commercial launch and the potential additional $20 million in credit under the Hercules loan, would allow the Company to fund planned operations into 2022.

In accordance with Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Accounting Standards Codification Subtopic 205-40), cash flows that are contingent on FDA approval, such as product revenues, cannot be reflected in the going concern assessment. As a result, Hercules loan funding contingent on such approval and revenue is also excluded from our going concern assessment. Accordingly, the Company continues to have a going concern opinion.

About Tivozanib (FOTIVDA)

Tivozanib (FOTIVDA) is an oral, once-daily, next-generation vascular endothelial growth factor receptor (VEGFR) tyrosine kinase inhibitor (TKI) discovered by Kyowa Kirin and approved for the treatment of adult patients with advanced renal cell carcinoma (RCC) in the European Union and other countries in the EUSA territory. It is a potent, selective and long half-life inhibitor of all three VEGF receptors and is designed to optimize VEGF blockade while minimizing off-target toxicities, potentially resulting in improved efficacy and minimal dose modifications.8,9 Tivozanib is being studied in the TIVO-3 trial, which is supporting a regulatory submission of tivozanib in the U.S. seeking marketing approval as a treatment for relapsed or refractory RCC. Tivozanib has been shown to significantly reduce regulatory T-cell production in preclinical models2 and has demonstrated synergy in combination with nivolumab (anti PD-1) in a Phase 2 study in RCC.10 Tivozanib has been investigated in several tumor types, including renal cell, hepatocellular, colorectal, ovarian and breast cancers. Tivozanib is also being studied by partner Kyowa Kirin in non-oncology indications.

AV-380 Update

On August 10, 2020 Athersys, Inc. (NASDAQ: ATHX) reported its financial results for the three months ended June 30, 2020 (Press release, Athersys, AUG 10, 2020, View Source [SID1234563329]).
Highlights of the second quarter of 2020 and recent events include:

•Initiated and advanced enrollment in the Phase 2/3 COVID-19 induced acute respiratory distress syndrome (ARDS) clinical trial (the MACOVIA study) and currently evaluating the safety, tolerability and dose levels of MultiStem cell therapy in this indication;
•Continued interactions with the Biomedical Advanced Research and Development Authority (BARDA) regarding a potential collaboration;
•HEALIOS K.K. (Healios), our Japanese partner, enrolled the first COVID-19 induced ARDS patient in its ONE-BRIDGE arm and continues to advance this study and the TREASURE stroke study, both studies expected to complete enrollment in Q4 of 2020;
•Following the authorization from the Food and Drug Administration (FDA) and the Institutional Review Board (IRB) approval, The University of Texas Health Science Center at Houston (UTHealth) submitted the protocol for the Phase 2 clinical trial evaluating MultiStem Administration for Trauma Related Inflammation and Complications (MATRICS-1) to the Human Research Protection Office (HRPO) for approval to initiate this important trial;
•Advanced our partnering discussions with companies interested in MultiStem commercialization rights in Europe and other regions;
•Participated in several events throughout the second quarter, including the Bank of America Healthcare Conference, the Alliance for Regenerative Medicine webinar, the International Society of Cell & Gene Therapy, and a CEO round table at LifeScience Leader, and participated in several media interviews and podcasts;
•Continued to advance the enrollment of the MASTERS-2 ischemic stroke study despite the impacts of COVID-19;
•New research coverage initiated by covering analysts at Bank of America and SMBC Nikko Securities;
•Advanced manufacturing technical transfer operations and bioreactor scaling to prepare for commercial readiness;
•Successfully attracted new talent and added new employees to the dedicated staff to help meet the corporate goals; including Mr. Ivor Macleod as Chief Financial Officer and Ms. Maia Hansen as Senior Vice President and Head of Operations and Supply Chain;
•Raised gross proceeds of approximately $57.6 million, before deducting the underwriting discount and offering expenses, through an underwritten public offering of 25,587,500 shares of common stock, providing additional working capital for general corporate purposes, including the initiation of the MACOVIA trial, further advancement of process development and manufacturing projects, and other key initiatives;
•Recognized net loss of $18.4 million, or $0.10 net loss per share, for the quarter ended June 30, 2020; and
•Ended the second quarter with $80.7 million of cash and cash equivalents.

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"Over the past quarter, we have made additional progress in our key clinical programs, partnering discussions and efforts regarding the establishment of key infrastructure to support our planned transition to becoming a commercial stage company. While the COVID-19 pandemic continues to have a global impact and has impacted many patients and their families, as well as disrupted operations and clinical trials for many companies, we have continued to move forward and are in the strongest financial position in the history of the Company," commented Dr. Gil Van Bokkelen, Chairman and CEO of Athersys. "We remain focused on supporting our partner Healios while it approaches completion of enrollment in both the TREASURE and ONE-BRIDGE trials in Japan, while we advance towards the establishment of new alliances in other key geographies, including Europe.

"A major focus for the Company in 2020 has been to advance our planning and preparation related to the establishment of infrastructure that will support our commercialization objectives, as well as the addition and integration of personnel and
1capabilities that will support the evolution. Despite the challenges posed by the COVID-19 pandemic, we are on track to achieve our core objectives in the second half of the year," concluded Dr. Van Bokkelen.

Second Quarter Results
Revenues were $0.1 million for the three months ended June 30, 2020 compared to $4.3 million for the three months ended June 30, 2019. The revenues in both periods were primarily generated from our collaboration with Healios related to manufacturing services performed. We expect our collaboration revenues to vary over time as we contract with Healios to perform manufacturing services and as we potentially enter into new collaborations.
Research and development expenses increased to $13.8 million for the three months ended June 30, 2020 from $11.1 million for the comparable period in 2019. The $2.7 million net increase is associated with increases in clinical trial and manufacturing process development costs of $0.8 million, research supplies of $0.5 million, stock compensation costs of $0.5 million, personnel costs of $0.3 million, outside services of $0.3 million and other research and development costs of $0.3 million. Our clinical development, clinical manufacturing and manufacturing process development expenses vary over time based on the timing and stage of clinical trials underway, manufacturing campaigns for clinical trials and manufacturing process development projects.
General and administrative expenses increased to $4.4 million for the three months ended June 30, 2020 compared to $2.9 million in the comparable period in 2019. The $1.5 million increase was primarily due to increased personnel costs, outside services, professional fees, consulting costs and stock compensation costs.
Net loss for the second quarter of 2020 was $18.4 million compared to a net loss of $9.7 million in the second quarter of 2019. The difference primarily results from the above variances.
During the six months ended June 30, 2020, net cash used in operating activities was $24.8 million compared to $17.0 million in the six months ended June 30, 2019. At June 30, 2020, we had $80.7 million in cash and cash equivalents, compared to $35.0 million at December 31, 2019.

Conference Call
Gil Van Bokkelen, Chairman and Chief Executive Officer, Ivor Macleod, Chief Financial Officer, and Karen Hunady, Director of Corporate Communications and Investor Relations will host a conference call today to review the results as follows:
Date August 10, 2020 Time 4:30 p.m. (Eastern Time) Live webcast registration www.athersys.com under the Investors section Phone registration View Source

We encourage shareholders to listen using the webcast link above. If you would like to dial in using the phone to ask a question, please register for the conference call ahead of time using the call registration link above. Once registered, you will be provided the call details and a registrant ID.

On August 10, 2020 DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage biotechnology company, reported the closing of its previously announced underwritten registered public offering of 4,600,000 of its common shares, including 600,000 shares sold upon full exercise of the underwriters’ option to purchase additional shares, at a price to the public of $5.00 per share, primarily with institutional investors including several specialist biotech funds and certain existing shareholders (Press release, DiaMedica, AUG 10, 2020, View Source [SID1234563328]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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The gross proceeds from the offering were $23.0 million, before deducting the underwriting discount and other estimated offering expenses payable by DiaMedica. Net proceeds, after the underwriting discount, but before estimated offering expenses payable by DiaMedica, were approximately $21.6 million.

As previously announced, DiaMedica intends to use the net proceeds from the offering to continue its clinical and product development activities, including the addition of a new cohort III to its REDUX Chronic Kidney Disease study to be comprised of participants with chronic kidney disease and Type II diabetes mellitus, and for other working capital and general corporate purposes.

Guggenheim Securities, LLC acted as lead book-running manager for the offering. Craig-Hallum Capital Group LLC acted as joint book-running manager and National Securities Corporation, a wholly owned subsidiary of National Holdings Corporation (NASDAQ: NHLD), acted as lead manager. Lake Street Capital Markets acted as a financial advisor to DiaMedica.

The securities described above were offered by DiaMedica pursuant to a shelf registration statement on Form S-3 (File No. 333-235775) previously filed with and declared effective by the U.S. Securities and Exchange Commission (SEC). A final prospectus supplement and accompanying prospectus relating to and describing the terms of the offering were filed with the SEC on August 7, 2020 and may be obtained by visiting the SEC’s website at www.sec.gov or by contacting Guggenheim Securities, LLC Attention: Equity Syndicate Department, 330 Madison Avenue, New York, NY 10017, by telephone at (212) 518-9544, or by email at [email protected].

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.