On May 7, 2021 Daewoong Pharmaceutical(CEO Sengho Jeon) reported its management performance (based on consolidation) in Q1 of 2021 (Press release, Daewoong Pharmaceutical, MAY 7, 2021, View Source [SID1234579500]). Its sales and operating profit were 269.6 billion and 26.6 billion KRW. It rose 4.7 percent and 305 percent yoy, respectively. Operating profit surpassed 20 billion won in eight years as ETC and OTC drugs maintained solid sales plus upfront from Fexuprazan to China and decreased legal cost as ITC lawsuits were settled.

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The ETC division revenue grew 11.7 percent yoy(from 162.1 billion won to 181 billion won). Sales of products such as Ursa(prescription drug), Luphere Depot, and Crezet and introduced items such as Crestor, Forxiga, and Lixiana have increased. The OTC division showed stable results(from 26.1 billion KRW to 26.4 billion KRW). Impactamin(vitamin B complex) series and liver function-enhancing drug URSA(non prescription) continued stable sales.

Nabota’s sales reached 15.4 billion won from 15.1 billion won Q1, 2020. Not only did domestic sales increase, but ITC’s agreement on February 19 resolved uncertainties, resulted in surged U.S. sales, marking the historical high performance in March. Turkey and Chile, which recently acquired product licenses, are also planning to launch Nabota in Q3.

HanAll Biopharma, a major subsidiary, recorded 27.8 billion won this year from 22.1 billion won in sales in the same period last year, and its operating profit increased from 3 billion won to 5.4 billion won during the same period. Upfronts for new drug candidates, such as HL036(for dry eyes) and HL161(for autoimmune diseases) contributed to make better performance.

"We have been showing sluggish performance by many non business factors, but our performance defintely begun to improve from Q1. In particular, Nabota’s scalability in U.S. is just opening and it is expected to stand out in Europe, China and other markets." said from an insider. "Foistar Tab and DWRX2003(Niclosamide) for COVID19 treatmenmt and new drugs such as Fexuprazan and Enavogliflozin, are also considered to have great market potential" he said.

Meanwhile, Daewoong Co., a holding company of Daewoong Pharma., also announced its Q1 performance(based on consolidation). Its sales grew 6.2 percent year-on-year to 348.5 billion won and operating profit rose 78.7 percent to 44.3 billion won.

On May 7, 2021 Abingworth reported that it has raised $582 million for its second clinical co-development fund (Press release, Abingworth Venture, MAY 7, 2021, View Source [SID1234579496]). The fund, ACCD 2, equips Abingworth to make triple-digit million investments in late-stage clinical programs.

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London-based Abingworth got into clinical co-development investing in 2009. Initially, Abingworth used money from its venture funds, but by 2016 the strategy had matured to the point that it set up a dedicated $105 million clinical co-development fund. The new, far larger ACCD 2 sets Abingworth up to continue making late-stage bets at a time when table stakes are higher than in the past.

"[The larger fund] really just allows us to participate," Tim Haines, chairman and managing partner at Abingworth, said. "The deal sizes are certainly going up to some degree. And I think we’ll probably be doing more larger deals. We may do some deals by ourselves directly."

Abingworth has previously invested through its co-development portfolio companies Avillion and SFJ Pharmaceuticals. The co-development companies both finance and facilitate clinical trials, taking on all of the clinical and regulatory risk in return for a pre-agreed return if the drug is approved. Going forward, Abingworth may also invest directly.

The sweet spot for investments is in the range of $100 million to $200 million, Haines said, although Abingworth has gone up to $250 million in the past. By investing directly, Abingworth will be able to support companies that have the internal resources to run a program but need capital.

When Abingworth first got into clinical co-development, it primarily worked with pharma companies that had more clinical candidates than their budgets could support given the desire to limit spending to protect earnings per share (EPS). Rather than running EPS-suppressing clinical programs, pharma companies partnered with Abingworth and only paid out if the project was successful, by which time the cost of the deal could be amortized over the sales of the product.

Abingworth still works with pharma companies, but they are no longer the only game in town. "What has changed quite significantly is the interest from biotechs," Haines said. "The motivation there is slightly different. Clearly, most biotechs are not profitable, so the earnings per share issue is less critical. But what we’re able to do is to significantly reduce the dilutive impact if they had to go out and raise the money on the public market."

Haines cited Apellis Pharmaceuticals as an example of why biotechs are interested in the financing option. In 2019, SFJ, in its first partnership with a pre-revenue biotech, provided Apellis with upfront and near-term payments to support development of APL-2 in hematologic indications in return for a chance to receive regulatory approval milestones.

"When we did the deal, it was about an $800 million market cap. Today, [it’s $3.8 billion] based on the data that was generated from the capital that we provided them. So they saved a huge diluted impact," Haines said.

Abingworth has had one exit from ACCD 1 so far and has another four deals that are still in progress. Factoring in investments made from venture funds, Abingworth has done 11 deals, seven of which have completed. One deal failed, but the rest returned capital, generating "very good returns to the funds," Haines said.

Despite the returns available, Abingworth is part of a small number of investors to target the space. Blackstone, which backs SFJ with Abingworth, is active in the sector but the risk—and need for deep expertise to mitigate it—is a potential deterrent to new entrants.

"You need to really be able to assess the likelihood of success of these products, because if we get it wrong, we get nothing, we get no returns at all. So in some respects, it’s kind of a venture-like model where you need to really dig deep into the clinical data [and] likelihood of success," Haines said.

News of ACCD 2 comes months after Abingworth raised a $465 million venture fund.

On May 7, 2021 Mirati Therapeutics reported that investors waiting to hear the latest in the KRAS inhibitor story were disappointed Thursday evening, as the biotech reported that a few key clinical developments have slipped to 2022 (Press release, Mirati, MAY 7, 2021, View Source [SID1234579495]).

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Hot on Amgen’s heels in the race to bring a KRAS-inhibiting cancer drug to market, Mirati said Thursday that most of its clinical programs for adagrasib are on track, including solo studies in non-small cell lung cancer and two colorectal cancer studies.

However, Mirati had been expecting additional data this year from a phase 1/2 study of adagrasib, which targets G12C mutations, combined with Novartis’ experimental SHP-2 inhibitor. That’s now been pushed to the first quarter of 2022.

Mirati will hold off on launching a clinical trial of MRTX1133, a second KRAS inhibitor that targets G12D mutations, until next year. The candidate was previously expected to be a traditional oral or IV formulation, but Mirati has pivoted to a long-acting formulation that will require fewer infusions.

RELATED: Amgen’s up-and-coming KRAS inhibitor gets a name: Lumakras

The company’s shares dipped more than 10% around noon as investors reacted to the so-so news.

"While these delays may be poorly received by some investors, we believe that there remain several significant data readouts this year that could drive additional upside," SVB Leerink said in a note.

The delay could stem from the FDA’s decision to impose a post-marketing trial requirement on Amgen—Mirati’s chief rival in the KRAS arena, SVB Leerink said. In late April, the agency asked Amgen to study a lower dose of Lumakras, the KRAS inhibitor previously known as sotorasib. This could signal that the FDA has concerns about the safety of these emerging treatments.

Mirati told investors during the earnings call that the FDA has not requested a similar study for its KRAS program. And the company is already conducting several clinical trials examining different doses, which were kicked off without prodding from the agency, SVB Leerink said.

Amgen, too, had a trial in the hopper studying a lower dose, putting them in a good position to respond to the FDA’s request.

RELATED: Mirati’s KRAS drug shrinks 45% of NSCLC tumors, putting it in Amgen’s slipstream on race to FDA

Amgen will likely be the first company to reach the KRAS market as Lumakras is set for an August decision from the FDA on its first indication in non-small cell lung cancer.

But Mirati is close behind, with an expected FDA filing for adagrasib’s first new drug application in the second half of this year in the same indication.

"Mirati continues to advance an innovative pipeline of drug candidates," said Mirati President and CEO Charles Baum in a statement. "The company expects to file IND applications for two potentially first-in-class therapies—our KRAS G12D inhibitor, MRTX1133, in 2022, and a synthetic lethal MTA cooperative PRMT5 inhibitor, in the first half of 2022."

On May 7, 2021 Leidos Holdings, Inc. (NYSE: LDOS) ("Leidos"), a FORTUNE 500 science and technology leader, reported the completed acquisition of Gibbs & Cox, Inc. ("Gibbs & Cox") for approximately $380 million in cash (Press release, Leidos, MAY 7, 2021, View Source;Cox/default.aspx [SID1234579493]). The transaction was previously announced on Feb. 23, 2021. Gibbs & Cox will operate as a wholly owned subsidiary and will be combined with Leidos’ maritime systems division.

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Gibbs & Cox-designed DDG-51 Arleigh Burke-class destroyer

Headquartered in Arlington, Virginia, Gibbs & Cox is the largest independent ship design firm focused on naval architecture and marine engineering. The company’s world class naval architects, designers, engineers and program managers develop innovative vessel designs and naval capabilities. The acquisition positions Leidos to provide a broad set of engineering solutions to the US Navy and to an expanding set of foreign Navies.

"We are delighted to welcome the Gibbs & Cox team to the Leidos family," said Leidos Chairman and CEO Roger Krone. "Gibbs & Cox is widely regarded for developing the most talented and experienced naval designers in the world. We look forward to this new era of innovation while combining the best of both companies."

"We are excited to join Leidos, whose employee culture and history of innovation strongly mirror our own legendary 91-year history", said Gibbs & Cox President and Chief Executive Chris Deegan. "Gibbs & Cox will remain the nation’s largest independent provider of maritime services. The combination of our world-class naval architecture, design and engineering services with Leidos’ speed, security and scale will significantly enhance our combined offerings in the fast growing maritime undersea, autonomous and cyber security segments. We look forward to mapping a new Gibbs & Cox with Leidos for the next 90 years."

Advisors

Citigroup Global Markets Inc. served as exclusive financial advisor and Holland & Knight LLP served as legal advisor to Leidos. Houlihan Lokey served as exclusive financial advisor and Greenburg Traurig, LLP served as legal advisor to Gibbs & Cox in connection with this transaction.

On May 7, 2021 Sutro Biopharma, Inc. (NASDAQ: STRO), a clinical-stage drug discovery, development and manufacturing company focused on the application of precise protein engineering and rational design to create next-generation cancer and autoimmune therapeutics, reported its financial results for the quarter ended March 31, 2021, its recent business highlights, and provided a preview of anticipated selected milestones in 2021 (Press release, Sutro Biopharma, MAY 7, 2021, View Source [SID1234579487]).

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"We are enthusiastic about the meaningful clinical benefit of STRO-002, our FolRα-targeting Antibody-Drug Conjugate (ADC), for women with advanced ovarian cancer, as demonstrated by the Phase 1 dose-escalation data, and look forward to providing follow-up data at ASCO (Free ASCO Whitepaper)," said Bill Newell, Sutro’s Chief Executive Officer. "We continue to enroll patients for the dose-expansion portion of the Phase 1 study and we have activated additional clinical sites. STRO-002 is one of the four product candidates in the clinic that were discovered, developed, and are manufactured using our proprietary and integrated cell-free protein synthesis platform. We intend to continue creating value by leveraging our platform to deliver on therapeutics that are precise, rationally designed, and homogenous, for a broad set of patients with unmet medical needs."

Recent Business Highlights and Expected 2021 Milestones

STRO-002, FolRα-targeting ADC: Ongoing enrollment in dose-expansion trial for patients with advanced ovarian cancer

The dose-escalation portion of the Phase 1 trial, in patients with advanced ovarian cancer, completed enrollment as of August 31, 2020. Follow-up data will be presented as a poster at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Virtual Annual Meeting being held in the second quarter of 2021.
Abstract Number: 5550
Session: Gynecologic Cancer
Title: Phase 1 dose-escalation study of STRO-002, an antifolate receptor alpha (FRα) antibody drug conjugate (ADC), in patients with advanced, progressive platinum-resistant/refractory epithelial ovarian cancer (EOC)
Presenter: R. Wendel Naumann, M.D., Professor & Director of Gynecologic Oncology Research at Levine Cancer Institute, Atrium Health
The enrollment for the dose-expansion portion of the Phase 1 trial, in a less heavily pre-treated patient population, is ongoing with additional sites activated in the US and a CTA approved by the Spanish Agency for Medicine and Health Products to intiate the study in Spain.
The initial data for dose-expansion is expected to be reported in the second half of 2021; the data is expected to inform regulatory interactions and registration strategy and enable the identification of the broadest patient population that may benefit from STRO-002.
STRO-001, CD74-targeting ADC: Continuing enrollment in Phase 1 dose-escalation for patients with B-cell malignancies

The dose-escalation trial is enrolling patients with lymphoma and multiple myeloma and the maximum tolerated dose has not yet been reached.
Interim data from the dose-escalation portion of the trial in patients with non-Hodgkin lymphoma and preclinical data from our collaboration with Fred Hutchinson Cancer Research Center were presented at the 62nd American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in December 2020.
STRO-003: Preclinical development underway and product candidate expected to be unveiled in the second half of 2021

Merck collaboration on cytokine derivatives: Moving towards the clinic on the first cytokine derivatives program for cancer and autoimmune disorders

In April 2021, Merck initiated IND-enabling toxicology studies for the first program under the July 2018 cytokine derivatives collaboration, for which Sutro earned a $15 million milestone payment.
In August 2020, Sutro entered into a supply agreement with Merck, providing Sutro with responsibility for manufacturing pre-clinical and clinical supply for products emerging from the collaboration.
Merck has exclusive worldwide rights to therapeutic candidates derived from the collaboration. Sutro is eligible to receive contingent payments for each of the target programs selected by Merck, assuming the development and sale of the therapeutic candidate and all possible indications identified under the collaboration. In addition, Sutro is eligible to receive tiered royalties ranging from mid-single digit to low teen percentages on worldwide sales of any commercial products that may result from the collaboration.
BMS collaboration on CC-99712, BCMA-targeting ADC: Ongoing enrollment for Phase 1 trial for patients with multiple myeloma

Since the Phase 1 trial initiation in the second half of 2019, Bristol Myers Squibb (BMS) has been enrolling patients in a dose-escalation/expansion trial to assess treatment of relapsed and refractory multiple myeloma, with the last reported dose level at 3.0 mg/kg, as reported in June 2020.
CC-99712 was granted Orphan Drug Designation by the FDA for multiple myeloma.
BMS is responsible for the worldwide clinical development and commercialization of CC–99712. Sutro is responsible for clinical supply manufacturing and certain development services for CC-99712 and is entitled to development and regulatory contingent payments and tiered royalties ranging from mid to high single digit percentages on worldwide sales of any commercial products that may result from the collaboration.
EMD Serono collaboration on M1231, Bispecific ADC-targeting MUC1-EGFR: Entered Phase 1 clinical trial in the first quarter 2021

Merck KGaA, EMD Serono (EMD Serono) began enrolling patients in a Phase 1 dose-escalation trial in the first quarter of 2021 for patients in the dose-escalation portion of a Phase 1 trial of M1231 for treatment of metastatic solid tumors, including non-small cell lung cancer (NSCLC) and esophageal squamous cell carcinoma.
Sutro is responsible for manufacturing early clinical supply of M1231 and is eligible for milestone or contingent payments and tiered royalties ranging from low to mid single digit percentages, along with certain additional one-time royalties, on worldwide sales of any commercial products that may result from the collaboration.
Vaxcyte relationship on conjugated vaccines: Utilization of Sutro’s cell-free technology

Under a license from Sutro, Vaxcyte has the right to use the XpressCF and XpressCF+ platforms to discover and develop vaccine candidates for the treatment or prophylaxis of infectious diseases.
Vaxcyte is progressing their broad spectrum pneumococcal conjugate vaccine (VAX–24) through preclinical development.
Sutro is eligible to receive four percent (4%) royalties on worldwide net sales of any licensed vaccine candidates. Sutro retains the right to discover and develop vaccines for treatment or prophylaxis of any disease not caused by an infectious pathogen, including cancer.
In June 2020, Vaxcyte completed an initial public offering of its common stock. Sutro owns approximately 1.6 million shares of Vaxcyte common stock as of March 31, 2021.
First Quarter 2021 Financial Highlights

Cash, Cash Equivalents and Marketable Securities

As of March 31, 2021, Sutro had cash, cash equivalents and marketable securities of $294.9 million, as compared to $326.5 million as of December 31, 2020, with projected runway into the second half of 2023, based on current business plans and assumptions and not including the value associated with Sutro’s holdings of approximately 1.6 million shares of Vaxcyte common stock. As of March 31, 2021, the fair value of the Vaxcyte common stock held by Sutro was $31.0 million.

Unrealized Loss from Decrease in Value of Vaxcyte Common Stock

The non-operating, unrealized loss of $10.7 million for the quarter ended March 31, 2021 was due to the decrease since December 31, 2020 in the estimated fair value of Sutro’s holdings of approximately 1.6 million shares of Vaxcyte common stock. Vaxcyte common stock held by Sutro will be remeasured at fair value based on the closing price of Vaxcyte’s common stock on the last trading day of each reporting period, with any non-operating, unrealized gains and losses recorded in Sutro’s statements of operations.

Revenue

Revenue was $14.7 million for the quarter ended March 31, 2021, compared to $7.2 million in the corresponding 2020 quarter, related principally to the Merck, BMS, and EMD Serono collaborations. Future collaboration revenue from Merck, BMS, and EMD Serono, and from any future collaboration partners, will fluctuate as a result of the amount and timing of revenue recognition of upfront, milestones and other collaboration agreement payments.

Operating Expenses

Total operating expenses for the quarter ended March 31, 2021 were $33.7 million, compared to $26.3 million in the corresponding 2020 quarter, including non-cash stock-based compensation of $4.0 million and $2.7 million, and depreciation and amortization expense of $1.3 million and $1.1 million, in the 2021 and 2020 quarters, respectively. Total operating expenses for the first quarter of 2021 were comprised of research and development expenses of $22.6 million and general and administrative expenses of $11.1 million, which are expected to increase in 2021 as Sutro’s internal product candidates advance in clinical development and additional general and administrative expenses are incurred as a public company.