On November 9, 2020 Neoleukin Therapeutics, Inc., "Neoleukin" (NASDAQ:NLTX), a biopharmaceutical company utilizing sophisticated computational methods to design de novo protein therapeutics, reported financial results and a corporate update for the third quarter ended September 30, 2020 (Press release, Neoleukin Therapeutics, NOV 9, 2020, View Source [SID1234570302]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
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
Schedule Your 30 min Free Demo!
"The past quarter has been highly productive at Neoleukin as we continue to advance NL-201 toward an IND and prepare to initiate our first clinical trial in patients with advanced cancer," said Jonathan Drachman, M.D., Chief Executive Officer of Neoleukin. "This represents an important step for Neoleukin and for the field of de novo protein design. In addition, we recently disclosed details about NL-CVX1, a de novo protein designed to bind the spike protein of SARS-CoV-2 and to block viral infection of mammalian cells. These data, published in the journal Science, demonstrate the broad applicability and speed of our de novo design platform to address serious biological problems."
Recent Updates
NL-201 – IND on Track, CTN Application Submission in Australia
Neoleukin remains focused on its efforts to submit an Investigational New Drug (IND) application for its lead immunotherapy therapeutic candidate, NL-201, an IL-2 and IL-15 agonist, during the fourth quarter of 2020. At this time, Neoleukin does not expect a delay in the submission of its IND due to COVID-19 but acknowledges the potential exists for this timing to be impacted. In addition, the company has submitted a Clinical Trial Notification (CTN) application for NL-201 in Australia. The planned first-in-human clinical trials for NL-201 will test intravenous, monotherapy in patients with advanced solid tumors to determine the safety and tolerability of various dosing regimens.
De Novo Protein Design for Coronavirus – NL-CVX1
In November 2020, Neoleukin announced the publication of its scientific work in the journal Science describing the creation of novel molecules designed to treat or prevent infection by SARS-CoV-2, the virus that causes COVID-19. As reported, the optimized, hyperstable proteins act as decoys that bind to the SARS-CoV-2 spike protein with high affinity, preventing its association with the viral receptor hACE2 and blocking cellular entry. The lead molecule, NL-CVX1 (CTC-445.2d) was shown to prevent infection of multiple human cell lines in vitro and to protect hamsters from serious consequences of SARS-CoV-2 infection when administered intranasally. Neoleukin is currently evaluating the possibility of advancing this molecule to clinical trials in humans.
These results demonstrate the potential of Neoleukin’s computational protein design platform and its scientific team to rapidly engineer de novo proteins that could potentially address a variety of biological problems.
Executive & Board Appointments
In September 2020, Neoleukin announced the appointment of Martin Babler, President and Chief Executive Officer of Principia Biopharma, Inc. (NASDAQ: PRNB), to the company’s Board of Directors. Mr. Babler brings decades of experience in business and commercial development, marketing and leadership in the biopharmaceutical industry.
In October 2020, Neoleukin announced the appointment of Holly K. Vance as General Counsel. Ms. Vance joins Neoleukin from the Bill & Melinda Gates Foundation, where she served as Associate General Counsel, working with the foundation’s Strategic Investment Fund with a focus in the life sciences sector. She previously served as partner in the Seattle office of the global law firm K&L Gates LLP.
Summary of Financial Results
Cash Position: Cash and cash equivalents totaled $201.2 million as of September 30, 2020, compared to $143.1 million as of December 31, 2019. The increase was primarily the result of Neoleukin’s July financing in which the company raised $71.3 million in net proceeds.
Based upon its current operating plan, Neoleukin believes that its cash-on-hand will be sufficient to fund operations into 2023.
R&D Expenses: Research and development expenses for the third quarter of 2020 increased to $6.2 million from $1.4 million for the third quarter of 2019. This increase resulted primarily from ongoing development of NL-201 and excludes $47.7 million of acquired in-process R&D in the third quarter of 2019.
G&A Expenses: General and administrative expenses for the third quarter of 2020 decreased to $3.9 million from $10.4 million for the third quarter of 2019. Higher G&A expenses in the third quarter of 2019 were primarily due to one-time severance costs and the recognition of stock-based compensation expense for certain options that vested as
a result of the merger between Neoleukin Therapeutics, Inc. ("Former Neoleukin") and Aquinox Pharmaceuticals, Inc. ("Aquinox").
Acquired in-process R&D: The acquired in-process research and development expense arose from the merger between Former Neoleukin and Aquinox in 2019 and was expensed immediately as management determined that the asset has no alternative future use in accordance with ASC 730.
Gain on Sale of Aquinox Canada: The gain relates to the sale of Aquinox Canada, a wholly owned subsidiary of the company, during the three months ended September 30, 2020. The gain of $7.8 million recognized is the total consideration of $8.2 million, less transaction costs of $0.4 million.
Net Loss: Net loss for the third quarter of 2020 was $2.2 million compared to a net loss of $59.1 million in the third quarter of 2019. The net loss in the third quarter of 2019 included the significant acquired in-process R&D recognized in the period. Furthermore, net loss was reduced in the third quarter of 2020 due to the recognition of the gain on sale of Aquinox Canada.
About NL-201
NL-201 is a de novo receptor agonist of the IL-2 and IL-15 receptors, designed to expand cancer-fighting CD8 T cells and natural killer (NK) cells without any bias toward cells expressing the alpha receptor subunit (CD25). Previously presented preclinical data has demonstrated the ability of NL-201 to stimulate and expand CD8+ and NK cells at very low doses with minimal impact on immunosuppressive regulatory T cells