On August 12, 2021 Humanigen, Inc. (Nasdaq: HGEN) ("Humanigen"), a clinical stage biopharmaceutical company focused on preventing and treating an immune hyper-response called "cytokine storm’" with its lead drug candidate, lenzilumab, reported financial results for the second quarter and six months ended June 30, 2021 (Press release, Humanigen, AUG 12, 2021, View Source [SID1234586479]).

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Update on Status of Emergency Use Authorization ("EUA") Application

On May 28, 2021, Humanigen submitted an EUA application for lenzilumab in patients hospitalized with COVID-19. Since that time, the company has responded to several requests from the U.S. Food and Drug Administration ("FDA") regarding the application. No formal timelines exist for the FDA to complete their review of our EUA application and as a result the company is unable to give guidance on the timing of a decision by the FDA.

"We remain firm in our belief the results of our LIVE-AIR Phase 3 study warrant lenzilumab being granted emergency use authorization. The achievement of the primary endpoint for the overall patient population, and the recent supplemental subset analysis which showed significant response to treatment by Black and African-American patients in the study, support our view of the potential benefit lenzilumab could bring to patient care if authorization were to be granted," said Cameron Durrant, MD, Chief Executive Officer, Humanigen.

Timothy Morris, CFO and COO, Humanigen, noted, "While the review of the EUA application continues, we are preparing for potential launch in the U.S., and simultaneously working to complete, before the end of the third quarter 2021, the submission of the Marketing Authorization Application ("MAA") to the Medicines Healthcare products Regulatory Agency ("MHRA") in the U.K. We have initiated the MAA process to the European Medicines Agency ("EMA") and anticipate the appointment of rapporteurs in the near term."

Second Quarter and Recent Highlights:

Lenzilumab in hospitalized COVID-19

Submitted an application to the FDA for an EUA for lenzilumab for the treatment of patients hospitalized with COVID-19.
Initiated filing and received acknowledgement the UK submission for Marketing Authorization for lenzilumab in COVID-19 has been accepted for expedited COVID-related rolling review by the MHRA. The submission is expected to be completed by September 30, 2021.
Initiated the process to make a submission to the European Medicines Agency for Marketing Authorization of lenzilumab in COVID-19.
The company’s commercial partners in South Korea and the Philippines, KPM Tech and Telcon RF Pharmaceutical, received approval from South Korea’s Ministry of Food and Drug Safety, the South Korean equivalent of FDA, to conduct a Phase 1 clinical study of lenzilumab, to enable submission and potential approval in South Korea.
Announced analysis of results from our Phase 3 LIVE-AIR study of lenzilumab in hospitalized patients with COVID-19 suggesting Black and African-American patients having a CRP<150 mg/L may be the highest responders to treatment, with a nearly 9-fold increase in likelihood of survival without ventilation ("SWOV") [n=51, p-value=0.0418]. In the overall population with CRP<150 mg/L, LIVE-AIR Phase 3 results show patients treated with lenzilumab demonstrated a 2.5-fold increased likelihood of SWOV [mITT, n=351, p-value=0.0009].
Entered into manufacturing agreement with Chime Biologics to produce lenzilumab bulk drug substance and drug product to be sold, with requisite regulatory authorization, in regions outside the United States.
Corporate

Completed underwritten public offering of common stock, raising net proceeds of $94.2 million.
The company was added to the Russell 3000 Index in June 2021.
Ken Trbovich was appointed to the newly-created role of SVP Investor Relations.
ACTIV-5 Update

In August 2021, the National Institutes of Health ("NIH") announced the expansion of the Accelerating COVID-19 Therapeutic Interventions and Vaccines ("ACTIV-5") and Big Effect Trial, in the "B" arm of the trial ("BET-B"), referred to as ACTIV-5/BET-B. Following feedback from and consultation with the company, the NIH advanced the study to a Phase 2/3 study with target enrollment of at least 400 patients and amended the protocol for ACTIV-5/BET-B in a manner that aligns with the design of the company’s LIVE-AIR trial. As a result of the advancement to a Phase 2/3 and amended protocol, the company anticipates that ACTIV-5/BET-B may serve as a second confirmatory study required for submission to FDA as part of a Biologics License Application ("BLA") that the company would submit if the ACTIV-5/BET-B data further validate the benefits of lenzilumab in COVID-19 patients.

Second Quarter and Six Months Ended June 30, 2021 Financial Results

Net loss for the three months ended June 30, 2021 was $70.8 million or $1.20 per share as compared to $24.0 million or $0.79 per share for the three months ended June 30, 2020. The net loss for the six months ended June 30, 2021 was $136.4 million or $2.45 per share as compared to $26.5 million or $1.00 per share for the six months ended June 30, 2020. The increase in net loss for both periods was largely due to an increase in total expenses, mainly Research and Development ("R&D") expense which rose significantly as the company accelerated its efforts to manufacture lenzilumab for potential commercialization upon a regulatory authorization. R&D expense increased $41.9 million from $21.1 million for the three months ended June 30, 2020, to $63.0 million for the three months ended June 30, 2021, and increased $101.1 million from $21.8 million for the six months ended June 30, 2020, to $122.9 million for the six months ended June 30, 2021. The manufacturing expense included in R&D was $57.1 million for the second quarter of 2021 as compared to $17.1 million for the prior year quarter, and $107.1 million for the six months ended June 30, 2021, as compared to $17.4 million for the prior year period. The costs incurred to produce lenzilumab will continue to be included in R&D expense until lenzilumab is authorized or approved for commercial use, at which point the amounts expended for production would be reclassified as inventory. A meaningful portion of these expenses are associated with initiation of manufacturing processes on a site-by-site basis.

Cash and Cash Equivalents

Net cash used in operating activities, net of balance sheet changes, was $103.8 million for the six months ended June 30, 2021. During the same period, the company raised net proceeds of $36.1 million from the sale of shares of common stock under its At-the-Market offering program, drew the first tranche of $25.0 million under its credit facility with Hercules Capital, providing net proceeds of $24.4 million, and completed a public offering of common stock with net proceeds of $94.2 million. As of June 30, 2021, the company had cash and cash equivalents of $120.5 million. The company expects to continue to use its funds on the manufacturing of lenzilumab in anticipation of its potential commercialization under EUA in the US or conditional marketing authorization in the UK. For the third quarter of 2021 the company anticipates the R&D expense related to lenzilumab production will be same level as the second quarter of 2021. If an EUA or CMA for lenzilumab is not received in the third quarter of 2021, the company would seek to decrease its spending on lenzilumab production.

A summary of key financial highlights as of and for the three and six months ended June 30, 2021 and 2020 is as follows ($ in thousands):

On August 12, 2021 bioAffinity Technologies, a privately held company focused on early diagnostics and cancer therapeutics, announced publication in the peer-reviewed Journal of Visualized Experiments (JoVE) (Press release, BioAffinity Technologies, AUG 12, 2021, View Source [SID1234586478]). The paper, entitled Quality-Controlled Sputum Analysis by Flow Cytometry, presents an efficient and effective method to analyze sputum on a flow cytometric platform, allowing for development of high-throughput diagnostic tests for lung cancer and other lung diseases.

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"Sputum provides a superior sample in which to analyze cellular content and other microenvironmental features. Analysis of sputum by the method we describe opens a new and exciting window of opportunity for determining the health of an individual’s lungs," bioAffinity President and CEO Maria Zannes said. "The processing method provided in JoVE describes an innovative and highly efficient method to process sputum for use with flow cytometry, an approach that can rapidly analyze a sample for the presence of diseases such as COPD, asthma and lung cancer."

bioAffinity Technologies has developed CyPath, a platform technology to diagnose cancer. The Company’s first product is CyPath Lung, a non-invasive and cost-effective test for the early detection of lung cancer that allows patients to collect their sputum sample at home.

bioAffinity Technologies recently completed a test validation trial of CyPath Lung evaluating sputum from people at high risk for lung cancer, including patients with the disease and others who were cancer-free. The trial resulted in 92% sensitivity and 87% specificity in the group of patients who had no or smaller than 2 cm nodules in the lung.

CyPath Lung uses flow cytometry, a method able to interrogate an individual cell in a fraction of seconds, and automated analysis to identify parameters indicative of cancer. Unlike genomic or other molecular markers used in many liquid biopsies, bioAffinity’s CyPath technology does not collect genetic material for evaluation. CyPath uses flow cytometry to investigate the lung micro-environment by identifying cell populations including those preferentially labeled by the porphyrin TCPP that are indices of cancer.

On August 12, 2021 Immune-Onc Therapeutics, Inc. ("Immune-Onc"), a clinical-stage cancer immunotherapy company developing novel biotherapeutics targeting immunosuppressive myeloid checkpoints, reported that the U.S. Food and Drug Administration (FDA) has cleared the company’s Investigational New Drug (IND) application for IO-108, a novel antagonist antibody targeting Leukocyte Immunoglobulin-Like Receptor B2 (LILRB2, also known as ILT4) for the treatment of solid tumors (Press release, Immune-Onc Therapeutics, AUG 12, 2021, View Source [SID1234586477]). Preclinical data presented at the 2020 Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper)’s annual meeting demonstrate that IO-108 functions as a myeloid checkpoint inhibitor. IO-108 reprograms immune-suppressive myeloid cells toward a pro-inflammatory phenotype, leading to enhanced innate and adaptive anti-tumor immunity.

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"The clearance of the IO-108 IND represents another major milestone for Immune-Onc as we progress our pipeline of novel myeloid checkpoint inhibitors targeting the LILRB family of immune inhibitory receptors," said Charlene Liao, Ph.D., chief executive officer of Immune-Onc. "We are highly encouraged by the strength of the preclinical data of IO-108 and are pleased that our expertise in LILRB biology and translational sciences enables us to advance this asset into the clinic. We look forward to initiating the trial to further understand the role of LILRBs in cancer, and to test the potential of IO-108 in treating patients with advanced solid tumors."

The Phase 1, multicenter, dose-escalation study will consist of a monotherapy cohort and a combination therapy cohort to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of IO-108 alone and in combination with pembrolizumab, an anti-PD-1 antibody. Biomarkers will be assessed to enable a mechanistic understanding of clinical data and inform future trials. This study may also provide an opportunity to identify preliminary efficacy signals. After determination of the recommended Phase 2 dose, Immune-Onc plans to evaluate the efficacy, safety, and tolerability of IO-108 in combination with pembrolizumab and as monotherapy in indication-specific expansion cohorts.

IO-108 binds to LILRB2 with high affinity and specificity and blocks the interaction of LILRB2 with multiple ligands that are involved in cancer-associated immune suppression including HLA-G, ANGPTLs, SEMA4A, and CD1d. In preclinical studies, treatment of various primary human immune cell systems containing myeloid cells with IO-108 results in enhanced pro-inflammatory responses to multiple stimuli that are relevant to anti-tumor immunity. As a single agent, IO-108 reverses the anti-inflammatory myeloid cell phenotype that results from "tumor conditioning" and promotes the differentiation of monocytes into pro-inflammatory dendritic cells. Moreover, IO-108 potentiates the effect of PD-1 blocking antibodies on CD4+ T cell activation in co-cultures with allogeneic macrophages. In mouse models IO-108 inhibits the growth of solid tumors, which is associated with enhanced T cell responses. Together these data demonstrate that IO-108 has the potential to provide additive or synergistic benefit in combination with standard-of-care immunotherapies and/or immunogenic therapies for solid tumors that are both resistant and sensitive to T-cell checkpoint inhibitors.

ABOUT LILRB2 (ILT4)

LILRB2, also known as ILT4, is expressed mostly on myeloid cells, including monocytes, dendritic cells, macrophages, and neutrophils. In solid tumors, interaction of LILRB2 with tumor microenvironment (TME) relevant ligands, including HLA-G, ANGPTLs, SEMA4A, and CD1d, makes myeloid cells pro-tumorigenic (tolerating or promoting tumor growth) and promotes tumor immune evasion.

On August 12, 2021 Australian clinical-stage drug development company Noxopharm Limited (ASX:NOX) has reported pre-clinical data confirming a survival benefit of adding Veyonda to 177lutetium-PSMA-617 (LuPSMA) treatment in prostate cancer (Press release, Noxopharm, AUG 12, 2021, View Source [SID1234586476]). This result validates the survival benefit of the same combination seen in a recently completed Phase I/II trial of Veyonda in men with end-stage metastatic castrate-resistant prostate cancer (mCRPC).

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Pre-Clinical Data Confirm Survival Benefit of Combination Treatment

A study in mice bearing human prostate cancer xenografts, and led by Professor Kristofer Thurecht, Ph.D., at The University of Queensland, confirmed a potent ability of Veyonda to enhance the cancer-killing effect of LuPSMA treatment.

"The combination of Veyonda with LuPSMA exhibited an impressive synergistic therapeutic response, with sustained and almost complete regression of the tumor and minimally observed systemic toxicity," said Dr. Thurecht. "This combined response was not observed in any of the animals treated with monotherapy."

Results Support Survival Benefit Found in Phase I/II Clinical Trial

The results of Noxopharm’s LuPIN Phase I/II clinical trial were published recently in The Journal of Nuclear Medicine and showed a median overall survival of 19.7 months with combination therapy in men with mCRPC with no remaining treatment options.

"The LuPIN study was a non-randomized study, so the question remained of how much the remarkable outcome of 19.7 months was due to the combination effect versus LuPSMA monotherapy alone," said Noxopharm CEO, Graham Kelly. "The pre-clinical study results confirmed that LuPSMA monotherapy had an impressive anti-cancer effect on tumor growth — but when Veyonda was added, the tumors mostly disappeared."

On August 12, 2021 Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based software platform is transforming the way therapeutics and materials are discovered, reported financial results for the quarter ended June 30, 2021, and provided an update on the company (Press release, Schrodinger, AUG 12, 2021, View Source [SID1234586475]).

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"The second quarter was highly productive for Schrödinger. We continued to make progress on our key strategic priorities, including our investments to advance our internal drug discovery pipeline and drive adoption of our software," stated Ramy Farid, Ph.D., chief executive officer at Schrödinger. "We announced a collaboration on a new program with Zai Lab, which expands our pipeline and provides the option to co-develop and co-commercialize in collaboration with an established commercial leader in oncology. We look forward to sharing additional updates on our progress throughout the year, and remain committed to making strategic investments in our business to drive long-term growth of the company."

Recent Business Highlights

Continued pipeline progress

During the second quarter, Schrödinger continued to advance its MALT1, CDC7 and Wee1 preclinical development programs. The company has initiated IND-enabling studies for its MALT1 program, and CDC7 and Wee1 continue to advance toward IND-enabling studies. Subject to completion of the preclinical data packages, the company expects to submit up to three IND applications in 2022, with the first submission to the FDA expected in the first half of next year. Schrödinger expects to present preclinical data from at least one of its internal programs in the second half of 2021.
The company continued to advance discovery efforts to allow the addition of new programs to the company’s internal pipeline in 2021.
Collaborations highlight continued strategic execution

In August, Schrödinger and Zai Lab Limited announced a global discovery, development and commercialization collaboration focused on a novel DNA damage response program in oncology. The research program will be conducted jointly by the Schrödinger and Zai Lab scientific teams. Following the selection of a development candidate, Zai Lab will assume primary responsibility for global development, manufacturing and commercialization. Schrödinger has the option to equally fund clinical development in the U.S. with Zai Lab, as well as the option to co-commercialize in the U.S. The companies will share research expenses for the program, and Zai Lab will make an upfront payment to Schrödinger to help fund Schrödinger’s share of research costs. If Schrödinger elects to co-fund clinical development of a product candidate under the collaboration, it will be entitled to 50 percent of any profits from the commercialization of such product candidate in the U.S. Schrödinger will also be eligible to receive up to approximately $338 million in preclinical, development, regulatory and sales-based milestone payments. Additionally, Schrödinger is entitled to receive royalties on net sales outside the U.S.
In June, Schrödinger’s partner, Ajax Therapeutics, completed a $40 million financing to support the advancement of Ajax’s lead drug development programs targeting hematologic malignancies. Through the companies’ collaboration, Schrödinger and Ajax scientists are working together to design and optimize molecules targeting cytokine signaling pathways.
Continued commitment to education and publication

In August, Schrödinger hosted its first annual Educator’s Day, which brought together K-12 and university educators from across the globe to discuss the growing role of computational tools in the classroom. The company also announced "Teaching with Schrödinger," a new initiative to develop curricula for academic institutions to teach students about chemical interactions, drug design and materials research using Schrödinger software.
During the second quarter, Schrödinger scientists authored multiple publications in peer-reviewed journals, independently and with customers, supporting application of the company’s platform to advance both drug discovery and materials science. Materials science advancements included research with the Edwards Air Force Base to develop molecular dynamics simulations to aid in the development of next-generation aerospace materials, as well as research with Panasonic Corp. to identify new molecules that can improve the efficiency of printed electronics.
Second Quarter 2021 Financial Results

Revenue was $29.8 million for the second quarter of 2021, a 29 percent increase compared to the second quarter of 2020.
Software revenue was $24.1 million for the second quarter of 2021, a 15 percent increase compared to the second quarter of 2020.
Drug discovery revenue was $5.7 million for the second quarter of 2021, compared to $2.2 million in the second quarter of 2020. Discovery revenue in the second quarter of 2021 included $3.3 million in revenue from our collaboration with Bristol Myers Squibb. Discovery revenue in the second quarter of 2021 also included a payment from a collaborator for the acquisition of intellectual property from Schrödinger related to a drug discovery program following the achievement of a lead optimization milestone.
Gross profit was $12.0 million in the second quarter of 2021, compared to $13.6 million in the second quarter in 2020. Software gross margin was 77 percent in the second quarter of 2021, compared to 82 percent for the same period in the prior year, reflecting planned investment to drive and support large-scale adoption of Schrödinger’s platform.
Operating expenses for the second quarter of 2021 were $42.3 million, compared to $30.7 million in the second quarter of 2020, driven by expenses required to scale the company’s business and advance its internal drug discovery programs.
Other expense, which included gains and losses on equity investments, changes in fair value of equity investments and interest income, was $4.6 million in the second quarter of 2021 compared to income of $13.1 million for the second quarter of 2020 due to adjustments to the fair value of the company’s equity investments.
Net loss, after adjusting for non-controlling interest, was $34.6 million for the second quarter of 2021, compared to a net loss of $3.4 million in the second quarter of 2020, driven by adjustments to the fair value of the company’s equity investments as well as planned investments to advance the company’s growth strategy.
Cash, cash equivalents, restricted cash and marketable securities as of June 30, 2021 were $616.6 million, compared to $649.0 million as of March 31, 2021.
Full-Year 2021 Financial Outlook

As of August 12, 2021, Schrödinger continues to expect total revenue to range from $124 million to $142 million, with software revenue expected to range from $102 million to $110 million and drug discovery revenue expected to range from $22 million to $32 million for the fiscal year ending December 31, 2021. Additional details are as follows:

Schrödinger expects the majority of anticipated second half software revenue growth to occur in the fourth quarter of 2021.
Drug discovery revenue can be highly variable quarter to quarter based on the timing of potential milestones related to collaborative agreements.
Schrödinger continues to aggressively fund R&D to advance its technology and drug discovery pipeline. The company continues to expect operating expense growth to be higher than the 42 percent annual growth rate reported in 2020 and expects software gross margin to be lower than the 81 percent reported in 2020.
Webcast and Conference Call Information

Schrödinger will host a conference call to discuss its second quarter financial results on Thursday, August 12, 2021, at 8:30 a.m. ET. The conference call can be accessed live by dialing (833) 727-9520 (domestic) or +1 (830) 213-7697 (international) and referring to conference ID 5365647 The webcast can also be accessed under "News & Events" in the investors section of Schrödinger’s website, View Source The archived webcast will be available on Schrödinger’s website for approximately 90 days following the event.