On May 14, 2020 Exicure, Inc. (NASDAQ: XCUR), the pioneer in gene regulatory and immunotherapeutic drugs utilizing spherical nucleic acid (SNA) technology, reported financial results for the quarter ended March 31, 2020 and provided an update on corporate progress (Press release, Exicure, MAY 14, 2020, View Source [SID1234558068]).
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"Exicure has continued to execute on its core clinical and preclinical objectives for 2020 thanks largely to the ongoing commitment of our team and their families, as well as the patients and caregivers involved in our clinical trials," said Dr. David Giljohann Exicure’s Chief Executive Officer. "We have continued to advance our preclinical program in Friedreich’s ataxia and have initiated our Phase 2 clinical trial of AST-008, our immuno-oncology drug candidate for Merkel cell carcinoma and cutaneous squamous cell carcinoma. While COVID-19 presents many ongoing uncertainties, we are confident that our financial resources will allow continued pursuit of our strategic objectives," concluded Dr. Giljohann.
AST-008 Phase 2 clinical trial is open and enrolling patients in the second quarter of 2020
We have dosed 20 patients and completed enrollment in the Phase 1b stage of our clinical trial. To date, we have not observed any treatment-related serious adverse events or any dose-limiting toxicity.
In the second quarter of 2020, we will begin enrolling patients in the Phase 2 dose expansion phase of the trial for intratumoral AST-008 in combination with pembrolizumab or cemiplimab, approved checkpoint inhibitors, to treat patients with advanced or metastatic Merkel cell carcinoma or cutaneous squamous cell carcinoma.
Currently, seven clinical trial sites are open and we expect to open up to eight additional sites.
We are continuing to monitor the potential impact that COVID-19 may have on patient enrollment, site initiation, safety of patients and study integrity. We are putting in place a variety of measures to mitigate the effects of COVID-19 and maintain patient safety and trial continuity.
First Quarter Financial Results, Financial Guidance and Recent Developments
Cash Position: Cash, cash equivalents, and short-term investments were $98.8 million as of March 31, 2020 compared to $110.8 million as of December 31, 2019. During the quarter Exicure repaid, pursuant to its terms, the outstanding principal balance of $5.0 million on its loan with Hercules Technology Growth Capital and classified $1.2 million of cash to other noncurrent assets. On January 6, 2020 Exicure received gross proceeds of $3.0 million pursuant to the partial exercise of the underwriters’ option to purchase additional shares. This exercise represents additional proceeds in connection with Exicure’s underwritten public offering of Exicure common stock in December 2019.
Research and Development (R&D) Expenses: Research and development expenses were $6.1 million for the quarter ended March 31, 2020, compared to $3.4 million for the quarter ended March 31, 2019. We have increased full-time staffing in R&D from 19 at March 31, 2019 to 36 at March 31, 2020 and the associated increase in activity has driven our increase in costs. The increase in staffing and associated increases in platform and discovery related costs reflects increased preclinical R&D activities associated with our collaboration with Allergan plc, increased costs related to XCUR-FXN, our Friedreich’s ataxia program, as well as other preclinical discovery work in neurology and ophthalmology.
General and Administrative (G&A) Expenses: General and administrative expenses were $2.6 million for the quarter ended March 31, 2020, compared to $2.2 million for the quarter ended March 31, 2019. This increase is primarily due to costs related to higher legal and accounting fees, higher D&O insurance expenses and certain other costs associated with being a public company.
Net Income (Loss): Exicure had net income of $1.1 million for the quarter ended March 31, 2020 compared to a net loss of $5.3 million for the quarter ended March 31, 2019, reflecting a difference of $6.4 million. The increase in net income was driven principally by the recognition of $9.2 million of revenue associated with Exicure’s collaboration with Allergan. In November of 2019, Exicure received an upfront payment of $25.0 million from Allergan, which was then deferred, and is now being recognized as revenue as we satisfy our obligations under the terms of the Allergan collaboration agreement. The $9.2 million increase in revenue was offset by the increases in R&D expenses and G&A expenses as discussed above.
Capital Resources Guidance: Exicure believes that, based on its current operating plans and estimates of expenses, as of the date of this press release, its existing cash, cash equivalents and short-term investments will be sufficient to fund our operations into early 2022.
Response to COVID-19: With the global spread of the ongoing COVID-19 pandemic in the first quarter of 2020, we have been closely monitoring developments and have taken active measures to protect the health of our employees and their families, our communities, as well as our clinical trial investigators, patients and caregivers. Under social distancing guidelines for COVID-19, we are operating with less than 50% of our research and development staff on-site at any one time while our general and administrative team has generally been working from home. We are carefully managing laboratory staffing and taking other appropriate managerial actions to maintain progress on our preclinical and collaboration programs. We are also working closely with our third-party manufacturers and other partners to manage our supply chain activities and in our clinical operations we are taking such action as we believe appropriate to maintain patient safety and trial continuity.
Pipeline Updates
Neurology
In December of 2019, Exicure announced the development of XCUR-FXN, an SNA–based therapeutic candidate for the treatment of Friedreich’s ataxia (FA). FA is driven by triplet repeats in the frataxin gene which compromises the patient’s ability to generate adequate levels of frataxin protein. Exicure believes its SNA technology has the potential to address this genetic challenge and that its therapeutic strategy may lead to increases in the frataxin protein. Exicure plans to design and develop XCUR-FXN with guidance from, and in collaboration with, the Friedreich’s Ataxia Research Alliance (FARA). Preclinical research is ongoing and IND-enabling studies for XCUR-FXN are expected to commence in 2020.
Exicure is continuing preclinical research on the application of its SNA technology in neurological conditions, building on its early proof-of-concept work with nusinersen and its new therapeutic candidate, XCUR-FXN. Exicure is currently exploring additional neurological conditions, including spinocerebellar ataxia, Batten disease, amyotrophic lateral sclerosis (ALS) and Huntington’s disease.
Immuno-oncology; AST-008
AST-008 is an investigational SNA consisting of toll-like receptor 9 (TLR9) agonists designed for immuno-oncology applications. Exicure has now dosed 20 patients and completed enrollment in the Phase 1b stage of the Phase 1b/2 clinical trial. To date, Exicure has not observed any treatment related serious adverse events or any dose-limiting toxicity.
In the second quarter of 2020, we intend to enroll patients in a Phase 2 dose expansion phase of its Phase 1b/2 study for intratumoral AST-008 in combination with pembrolizumab or cemiplimab to treat two cohorts of patients with advanced or metastatic Merkel cell carcinoma or cutaneous squamous cell carcinoma. Each cohort is expected to enroll up to 29 patients.
Collaborations
Exicure entered into a collaboration, option and license agreement with Allergan plc in late 2019 and is now actively engaged in preclinical research and discovery in two clinical programs related to the treatment of hair loss disorders. Under the terms of the collaboration, Exicure received a $25.0 million upfront payment and is eligible to receive up to $725 million in potential milestones. In early 2019, Exicure also entered into a collaboration agreement with Dermelix Biotherapeutics under which Dermelix has the option to develop a targeted therapy for the treatment of Netherton Syndrome (NS).
About FARA
The Friedreich’s Ataxia Research Alliance (FARA) is a 501(c)(3), non-profit, charitable organization dedicated to accelerating research leading to treatments and a cure for Friedreich’s ataxia. www.CureFA.org.