On November 15, 2021 Galectin Therapeutics, Inc. (NASDAQ: GALT), the leading developer of therapeutics that target galectin proteins, reported financial results and provided a business update for the quarter ended September 30, 2021 (Press release, Galectin Therapeutics, NOV 15, 2021, View Source [SID1234595628]). These results are included in the Company’s Quarterly Report on Form 10-Q, which has been filed with the U.S. Securities and Exchange Commission and is available at www.sec.gov.

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!

Joel Lewis, Chief Executive Officer and President of Galectin Therapeutics, said, "I am extremely impressed with our new team members and our continuing progress this quarter. Building on our previous announcements of additional financing from our Chairman, Richard E. Uihlein, and positive results from a cancer immunotherapy extension trial of belapectin in combination with KEYTRUDA, we are pleased to inform you about the progress we have made in working with Dr. Ben Carson, our strategic consultant. I am grateful to Board members and to Dr. Carson, who previously noted that belapectin has broad potential applications as it pertains to galectin-3 inhibition, including in oncology, where data has demonstrated the role that galectin-3 plays in the tumor micro-environment to stimulate tumor progression. Through Dr. Carson’s introductions, we met and retained new oncology consultants who are each affiliated with prestigious university medical centers. These consultants will assist us with strategic planning for the development of belapectin in cancer indications. Such a Company-sponsored oncology program would complement our existing NASH cirrhosis program and leverage belapectin’s potential as a galectin-3 inhibitor. Galectin-3 plays a major role in liver cirrhosis and is also strongly associated with cancer progression. Last week, the Board approved this important first step in exploring Company-sponsored oncology programs, and I hope to have more details at our annual meeting in December. At our most recent Board meeting, immediately after the Board approved Mr. Uihlein’s generous financing, I expressed to Dick and Rick Zordani, our audit committee chairman, that my goal was to assemble a highly qualified team and be able to have further discussions about an oncology program at our Annual Meeting in December. I intend to achieve that goal.

"The NAVIGATE trial for NASH cirrhosis is progressing, and we have seen increases in activity in the United States over the past several months. While this program is strongly supported by the hepatology and gastroenterology community, activity in Europe, South Korea and Latin America remains slower than we anticipated due to lingering effects of the COVID-19 pandemic and the emergence of new COVID-19 variants. These activities include clinical trial applications, clinical research site start-ups, patient screenings and randomizations. Over the past few weeks our team has thoroughly analyzed these dynamics. While we do need to extend the estimated completion of enrollment in the Phase 2b portion of the NAVIGATE trial by six months to around the end of the second quarter of 2022, we only need to extend the anticipated initial top-line results by three months, until the end of the first quarter of 2024. This is in large measure due to the additional capacity and expertise of my team. We have added talented and experienced professionals in key leadership roles this year that have and will continue to strengthen the Company. This strategy will progress until we believe we have the best team in place, giving us the critical mass we need for success."

Richard E. Uihlein, Chairman of the Board, added, "I am pleased with the additional management personnel that have been recently attracted to join the Company and believe they will assist in continuing to move us forward. While we are similar to many other companies who have experienced slower than planned clinical trial enrollment during the pandemic, I am encouraged by the recent acceleration that we will fully enroll the NAVIGATE trial. Finally, I am gratified by the interest shown in our combination cancer immunotherapy program by the esteemed physicians that are now collaborating with us. I look forward to hearing their insights, as well as sharing them with you."

Program Review

Cancer Immunotherapy

In our cancer immunotherapy program, we previously announced positive top-line results in our Phase 1b investigator initiated clinical trial extension of belapectin in combination with KEYTRUDA in advanced metastatic melanoma and head and neck cancer. The study provided further clinical evidence that using belapectin, a potent galectin-3 inhibitor, in combination with pembrolizumab (KEYTRUDA), a PD-1 inhibitor, significantly enhances tumor response to immunotherapy in patients with advanced metastatic melanoma (MM) and head and neck squamous cell carcinoma (HNSCC).

In furtherance of this program, the Company engaged three new key oncology opinion leaders as consultants to assist the Company in formulating our strategic and operational directions. Additional information will be provided in the near future.

NAVIGATE Study (NASH Cirrhosis)

A protocol amendment adopted in the third quarter, aimed at refining criteria for patients with portal hypertension and based on input from investigators, has been approved by institutional review boards and implemented globally. This protocol amendment has resulted in an improved quality of screening and, importantly, more patients qualifying for enrollment.

Our innovative NAVIGATE study web portal, NAVIGATEnash.com, continues to be a useful resource for patients and physicians interested in the trial, NASH cirrhosis, and portal hypertension. The site provides a steady stream of new information about NASH cirrhosis, the diagnosis and consequences of portal hypertension, and the NAVIGATE study. NAVIGATEnash.com is also attracting significant activity as we build a community where NASH cirrhosis patients and physicians can share information.

Corporate Development

The Company continues to build its management team to achieve its goal of advancing belapectin and recently welcomed Hugh Huang, Ph.D., as Vice President, Chemical Manufacturing and Controls (CMC) Pharmaceutical Development. Dr. Huang has broad and successful product development experiences in parenteral and non-parenteral formulations and has had roles of increasing responsibility in both large and mid-sized pharma companies. Dr. Huang received his Ph.D. in biochemistry from Ohio State University.

Additionally, as previously announced, several other key leadership positions have been recently filled, including Dakshina Reddy, MSM, as Executive Director, Regulatory Affairs; Ezra R. Lowe, Ph.D., as Executive Director, Clinical and Preclinical Pharmacology; Marla Mills-Wilson, as Executive Director, Clinical Operations; and Jessica Kopaczewski, as Associate Director, Clinical Operations.

These strategic appointments strengthen the company’s clinical, regulatory, CMC, and operational efforts across its ongoing programs in cancer immunotherapy and NASH cirrhosis. The Company expects to add additional key senior resources in the near future.

On September 21, the company announced that it had entered into a $20 million convertible debt financing agreement with Richard E. Uihlein, the Company’s Chairman and largest individual stockholder. The loan agreement comprises two separate $10 million convertible notes, the first of which closed and funded on September 17, 2021, and the second of which is expected to close on or before December 17, 2021.

Scientific Presentations

The Company presented six scientific abstracts at The Liver Meeting 2021, hosted by the American Association for the Study of Liver Diseases (AASLD), held virtually from November 12 to 15, 2021.

Financial Results

For the three months ended September 30, 2021, the Company reported a net loss applicable to common stockholders of $8.6 million, or ($0.14) per share, compared to a net loss applicable to common stockholders of $6.0 million, or ($0.10) per share for the three months ended September 30, 2020. The increase is largely due to an increase in 2021 research and development expenses related to the Company’s NAVIGATE trial.

Research and development expenses for the three months ended September 30, 2021, was $6.6 million compared with $4.8 million for the three months ended September 30, 2020. The increase was primarily due to costs related to our NAVIGATE clinical trial and other supportive activities. General and administrative expenses for the three months ended September 30, 2021, were $1.6 million, compared to $1.1 million for the three months ended September 30, 2020.

As of September 30, 2021, the Company had $36.6 million of cash and cash equivalents. On September 17, 2021, the Company received $10 million in proceeds from an unsecured convertible promissory note from its Board Chairman, Richard E. Uihlein. The Company also has an agreement for an additional $10 million unsecured promissory note from Mr. Uihlein to close in December 2021. The Company believes it has sufficient cash to fund currently planned operations and research and development activities through at least March 31, 2023.

The Company expects that it will require more cash to fund operations after March 31, 2023, and believes it will be able to obtain additional financing as needed. Currently, we expect to require an additional approximately $30-$35 million to cover costs of the NAVIGATE trial to reach the planned interim analysis estimated to occur around the end of the first quarter of 2024, along with drug manufacturing and other scientific support activities and general and administrative costs. However, there can be no assurance that we will be successful in obtaining such new financing or, if available, that such financing will be on terms favorable to us.

About Belapectin

Belapectin is a complex carbohydrate drug that targets galectin-3, a critical protein in the pathogenesis of NASH and fibrosis. Galectin-3 plays a major role in diseases that involve scarring of organs, including fibrotic disorders of the liver, lung, kidney, heart and vascular system. Belapectin binds to galectin-3 and disrupts its function. Preclinical data in animals have shown that belapectin has robust treatment effects in reversing liver fibrosis and cirrhosis. A Phase 2 study showed belapectin may prevent the development of esophageal varices in NASH cirrhosis, and these results provide the basis for the conduct of the NAVIGATE trial. The NAVIGATE trial (www.NAVIGATEnash.com), titled "A Seamless Adaptive Phase 2b/3, Double-Blind, Randomized, Placebo-controlled Multicenter, International Study Evaluating the Efficacy and Safety of Belapectin (GR-MD-02) for the Prevention of Esophageal Varices in NASH Cirrhosis," began enrolling patients in June 2020, and is posted on www.clinicaltrials.gov (NCT04365868). Galectin-3 has a significant role in cancer, and the Company has supported a Phase 1b study in combined immunotherapy of belapectin and KEYTRUDA in advanced melanoma and in head and neck cancer. This trial provided a strong rationale for moving forward into a Company-sponsored Phase 2 development program, which the company is exploring.

About Fatty Liver Disease with Advanced Fibrosis and Cirrhosis

Non-alcoholic steatohepatitis (NASH) has become a common disease of the liver with the rise in obesity and other metabolic diseases. NASH is estimated to affect up to 28 million people in the U.S. It is characterized by the presence of excess fat in the liver along with inflammation and hepatocyte damage (ballooning) in people who consume little or no alcohol. Over time, patients with NASH can develop excessive fibrosis, or scarring of the liver, and ultimately liver cirrhosis. It is estimated that as many as 1 to 2 million individuals in the U.S. will develop cirrhosis as a result of NASH, for which liver transplantation is the only curative treatment available. Approximately 8,890 liver transplants are performed annually in the U.S. There are no drug therapies approved for the treatment of liver fibrosis or cirrhosis.

On November 15, 2021 Biodesix, Inc. (Nasdaq: BDSX), a leading data-driven diagnostic solutions company with a focus in lung disease, reported its financial and operating results for the third quarter ended September 30, 2021 and provided a corporate update (Press release, Biodesix, NOV 15, 2021, View Source [SID1234595627]).

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 third quarter was highlighted by the growth of our core lung diagnostics and biopharma service product offerings, which grew year-over-year 51% and 133% respectively, despite the headwinds from the COVID-19 Delta variant, offset by expected reductions in COVID-19 testing from increased vaccination rates and adoption of non-laboratory testing," said Scott Hutton, CEO of Biodesix. "Driven by the productivity from our growing sales force, and expanding body of clinical evidence supporting the value of our tests, we expect growth in core lung diagnostics testing to continue through the remainder of the year and into 2022. We are very pleased with the initial results from the ORACLE study recently presented at CHEST as they demonstrate that the Nodify XL2 test is performing as expected in the clinic, is changing physician decisions, and reducing unnecessary interventions on benign nodules. In addition to the CHEST and other data releases this quarter, we are pleased to announce that we have launched our 72-hour liquid NGS test ahead of schedule to a select group of physicians, with broad US launch still anticipated for the first quarter of 2022. Given the material progress made across all aspects of our base business this past quarter, we look forward to finishing strong through the end of 2021."

Third Quarter 2021 Financial Results

For the three-month period ended September 30, 2021, as compared to the same period of 2020 (where applicable):

Total revenue of $6.5 million was driven by our core lung diagnostic revenue of $4.5 million, an increase of 51%;
Continued lung diagnostic year over year growth despite recent surges in COVID-19 Delta variant;
Lung diagnostic growth driven primarily from sales of Nodify nodule management tests and sales force expansion;
Services revenue of $1.5 million, an increase of 133%;
Clinical trial services showed improvement and we expect further recovery in clinical trial enrollments in remainder of 2021;
COVID-19 testing revenue of $0.5 million, a decline of 91%;
Decline commensurate with our prior commentary on the expectation of COVID-19 testing declines, excluding any potential impact of the Biden administration COVID-19 Action Plan;
Gross margin was $3.8 million or 58% as a percentage of revenue as compared to 40% in the quarter ended June 30, 2021, primarily as a result of the mix shift of sales to higher margin lung diagnostic and services;
Operating expenses (excluding direct costs and expenses) of $16.9 million, which includes an investment in the planned expansion of our sales force, increased 46%;
Remain on track to double size of lung focused direct and dedicated sales force in 2021;
Includes non-cash stock compensation expense of $1.4 million;
Recorded a non-cash gain of $3.1 million in the period associated with our PPP loan forgiveness from the Small Business Administration;
Net loss of $11.5 million, an increase of 30%; and
Cash and cash equivalents of $47.9 million.
For a full list of Biodesix’s press releases and webinars, please visit Biodesix.com.

Conference call and webcast information

Management will host an investor conference call and webcast today, November 15, 2021 at 9:00 a.m. Eastern Time.
An archived replay of the webcast will be available on the Company’s website for a period of 90 days.

On November 15, 2021 Pyxis Oncology, Inc. (Nasdaq: PYXS), a preclinical oncology company focused on developing next-generation therapeutics for difficult to treat cancers, reported financial results for its third quarter ended September 30, 2021 and provided a business update (Press release, Pyxis Oncology, NOV 15, 2021, View Source [SID1234595626]).

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!

"Our initial public offering was a tremendous milestone for Pyxis, allowing us to debut as a public company with a strong balance sheet well positioned to advance our lead programs toward the clinic," said Lara Sullivan, M.D., Chief Executive Officer of Pyxis. "We are on track to submit Investigational New Drug (IND) applications for PYX-201 and PYX-202 by mid-2022, and for PYX-203 by 2023. With the resources we now have in hand, we are also focused on fully leveraging our ADC technology platform and proprietary target catalog."

Initial Public Offering (IPO)

In October 2021, Pyxis completed its IPO of 10,500,000 shares of common stock at a public offering price of $16.00 per share. Gross proceeds from the IPO were $168 million and net proceeds from the offering, after deducting underwriting discounts, commissions and offering expenses, were approximately $152.2 million.

Third Quarter 2021 Financial Results

Cash: Pyxis has a strong cash position of approximately $283 million as of November 15, 2021 which is expected to fund operations into the second half of 2024.

Research and Development (R&D) Expenses: R&D expenses were $7.8 million for the three months ended September 30, 2021, compared to $2.4 million for the three months ended September 30, 2020. The year-over-year increase in R&D spending was primarily due to increased expenses associated with the addition of three antibody drug conjugates to our portfolio and increase in headcount to support our research and development activities. We expect our R&D expenses to increase substantially for the foreseeable future as we continue to invest in R&D activities to advance our clinical programs and expand and advance our product candidate pipeline.

General and Administrative (G&A) Expenses: G&A expenses were $3.8 million for the three months ended September 30, 2021, compared to $0.8 million for the three months ended September 30, 2020. The year-over-year increase was primarily due to higher personnel-related expenses (including stock-based compensation), recruiting fees, consulting, and other professional costs. We expect our G&A expenses to increase to support our growth and operations as a public company.

Net Loss: Net loss was $14.2 million ($8.96 per common share) for the three months ended September 30, 2021, compared to $3.2 million ($2.93 per common share) for the three months ended September 30, 2020.

Upcoming Investor Event

November 18, 2021 – Pyxis will present at the Jefferies Virtual London Healthcare Conference

On November 15, 2021 Nuvo Pharmaceuticals Inc. (TSX:MRV; OTCQX:MRVFF) d/b/a Miravo Healthcare (Miravo or the Company), a Canadian-focused healthcare company with global reach and a diversified portfolio of commercial products, reported its financial and operational results for the three and nine months ended September 30, 2021 (Press release, Nuvo Pharmaceuticals, NOV 15, 2021, View Source [SID1234595625]). For further details on the results, please refer to Miravo’s Management, Discussion and Analysis (MD&A) and Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, which are available on the Company’s website (www.miravohealthcare.com) and on SEDAR (www.sedar.com). All figures are in Canadian dollars, unless otherwise noted.

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!

Key Developments

Three months ended September 30, 2021 include the following:

Adjusted total revenue(1) was $17.1 million, an increase of 3% compared to $16.7 million for the three months ended September 30, 2020.
Adjusted EBITDA(1) was $7.0 million, an increase of 7% compared to $6.6 million for the three months ended September 30, 2020.
Revenue related to Blexten, Cambia and Suvexx was $8.1 million, an increase of 24% compared to revenue of $6.5 million for the three months ended September 30, 2020. Total Canadian prescriptions of Blexten and Cambia increased by 16% and 5% respectively compared to the three months ended September 30, 2020.
The Company repaid $3.7 million (US$2.9 million) of the Amortization Loan to Deerfield Management Company, L.P. (Deerfield).
As at September 30, 2021, cash and cash equivalents were $28.4 million.
Nine months ended September 30, 2021 include the following:

Adjusted total revenue(1) was $51.6 million, a decrease of 4% compared to $53.6 million for the nine months ended September 30, 2020.
Adjusted EBITDA(1) was $18.8 million, a decrease of 15% compared to $22.2 million for the nine months ended September 30, 2020.
Revenue related to Blexten, Cambia and Suvexx was $23.5 million, an increase of 26% compared to revenue of $18.7 million for the nine months ended September 30, 2020. Canadian prescriptions of Blexten and Cambia increased by 22% and 10% respectively compared to the nine months ended September 30, 2020.
The Company repaid $10.3 million (US$8.3 million) of the Amortization Loan to Deerfield.
(1) Non-International Financial Reporting Standards (IFRS) financial measure defined by the Company below.

Business Update

In October 2021, Resultz was commercially launched in the U.S. market by The Mentholatum Company, Resultz is marketed in the U.S. under the brand name Mentholatum Kids Headlice Removal Kit. The Company’s Irish subsidiary, Nuvo Pharmaceuticals (Ireland) DAC (Miravo Ireland) receives revenue from the supply of finished product to The Mentholatum Company.
In September 2021, Miravo Ireland’s distribution partner for Suvexx in South Korea, SK Chemicals Co., Ltd. (SK Chemicals), filed the Suvexx marketing authorization application with the Ministry of Food and Drug Safety (the MFDS) in South Korea. In July 2021, Miravo Ireland entered into an exclusive license and supply agreement with SK Chemicals for the exclusive right to commercialize Suvexx in the Republic of South Korea. Miravo Ireland will receive up to €1.1 million in upfront consideration, regulatory and sales-based milestone payments, as well as royalties on net sales of Suvexx in South Korea and revenue pursuant to the supply of product.
In August 2021, Miravo announced Health Canada issued a Notice of Compliance (NOC) in relation to the Company’s Supplement to New Drug Submission for the pediatric use of Blexten. The pediatric use expands the label for use in children as young as 4 years old and includes the two new dosage formats; a 2.5mg/mL oral solution and a 10mg Quick Melt tablet. Upon commercial launch, which is anticipated for Q1 2022, the pediatric formats will be available to patients with a prescription from their healthcare provider.
"We are encouraged by the strength of our key promoted brands, Blexten, Cambia and Suvexx, which continued their year-over-year gains in prescription and revenue growth despite the fact that many prescribers have not yet resumed seeing patients in-person at pre-COVID-19 pandemic levels. We anticipate that the gradual return of in-person, patient-physician visits, over the coming quarters, will provide enhanced opportunities for patient education and new prescription growth," said Jesse Ledger, Miravo’s President & CEO. "We continued to execute on our plans to expand and diversify our revenue base during the quarter, with the Health Canada approval of the pediatric form of Blexten, as well as the submission of a marketing authorization application for Suvexx in South Korea by our partner SK Chemicals."

Third Quarter 2021 Financial Results
Adjusted total revenue was $17.1 million and $51.6 million for the three and nine months ended September 30, 2021 compared to $16.7 million and $53.6 million for the three and nine months ended September 30, 2020. The $0.4 million increase in adjusted total revenue in the current quarter was primarily attributable to an increase of $1.8 million in the Commercial Business segment and an increase of $0.4 million of revenue from the Licensing and Royalty Business segment, offset by a decrease of $1.8 million of revenue in the Production and Service Business segment.

Revenue attributable to the Commercial Business segment increased during the three months ended September 30, 2021 due to a $1.8 million increase in sales of the Company’s promoted products (Blexten, Cambia, Suvexx and Neovisc). In the current quarter, revenue from the Company’s mature products was consistent with the three months ended September 30, 2020.

The Production and Service Business segment revenue decreased during the three months ended September 30, 2021, primarily due to a decrease in Pennsaid 2% product sales, slightly offset by an increase in sales of Pennsaid.

The increase in revenue attributable to the License and Royalty business segment during the three months ended September 30, 2021 was primarily attributable to a $0.5 million increase in royalty earned on European net sales of Vimovo, a $0.2 million increase in royalty earned from net sales of Yosprala and a $0.2 million increase from the recognition of milestones in the SK Chemicals contract. The increase in license revenue in the current three-month period was slightly offset by an unfavourable foreign exchange movement where a stronger Canadian dollar against the U.S. dollar reduced the contribution from U.S. denominated royalty streams, as well as a $0.6 million decrease in royalty earned on U.S. net sales of Vimovo due to a competitor launching a generic version of Vimovo in March 2020. The Company earned a $0.2 million and $1.0 million royalty on U.S. net sales of Vimovo during the three and nine months ended September 30, 2021 compared to $0.8 million and $4.4 million during the three and nine months ended September 30, 2020.

Adjusted EBITDA was $7.0 million and $18.8 million for the three and nine months ended September 30, 2021 compared to $6.6 million and $22.2 million for the three and nine months ended September 30, 2020. During the three months ended September 30, 2021, an increase in gross profit from the Company’s Commercial Business and License and Royalty Business segments was offset by a decrease in gross profit contribution from the Production and Service Business segment, an increase in sales and marketing expenses and an increase in general and administrative expenses. During the three months ended September 30, 2021, the Company recorded $nil in government assistance resulting from the Canada Emergency Wage Subsidy (CEWS). The Company recognized $1.1 million in government assistance resulting from CEWS in the comparative three-month period.

Non-IFRS Financial Measures

The Company discloses non-IFRS measures (such as adjusted total revenue, adjusted EBITDA, adjusted EBITDA per share and cash value of loans) that do not have standardized meanings prescribed by IFRS. The Company believes that shareholders, investment analysts and other readers find such measures helpful in understanding the Company’s financial performance. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and may not have been calculated in the same way as similarly named financial measures presented by other companies. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS. Please see below and refer to the MD&A for a reconciliation of these measures to standardized IFRS measures.

Adjusted Total Revenue

The Company defines adjusted total revenue as total revenue, plus amounts billed to customers for existing contract assets, less revenue recognized upon recognition of a contract asset. Management believes adjusted total revenue is a useful supplemental measure to determine the Company’s ability to generate cash from its customer contracts used to fund its operations.

Adjusted EBITDA
EBITDA refers to net income (loss) determined in accordance with IFRS, before depreciation and amortization, net interest expense (income) and income tax expense (recovery). The Company defines adjusted EBITDA as EBITDA, plus amounts billed to customers for existing contract assets, inventory step-up expenses, stock-based compensation expense, Other Expenses (Income), less revenue recognized upon recognition of a contract asset and other income. Management believes adjusted EBITDA is a useful supplemental measure to determine the Company’s ability to generate cash available for working capital, capital expenditures, debt repayments, interest expense and income taxes.

(1) Income tax expense for the three and nine months ended September 30, 2021 includes $0.7 million and $2.1 million for deferred income tax due to the utilization of loss carryforwards that were previously recognized. The Company did not recognize deferred income tax expense in the comparative three and nine-month periods.

(2) The Company’s derivative liabilities are measured at fair value through profit or loss at each reporting date. As a result of the increase in the share price in the current quarter and an increase in the volatility of the Company’s shares, amongst other inputs, the value of the Company’s derivative liabilities increased and the Company recognized losses of $2.9 million and $14.4 million on the change in fair value of derivative liabilities for the three and nine months ended September 30, 2021.

(3) During the three and nine months ended September 30, 2021, the Company recorded impairment of $14.7 million and $14.7 million of goodwill and certain intangible assets in the Commercial Business and Licensing and Royalty segments. During the three months ended September 30, 2021, the Company reviewed carrying values of certain intangible assets as it had changed its commercial expectations for certain products in response to COVID-19 trends. Additional details regarding the Company’s methodology and assumptions are disclosed in Note 4, Intangible Assets and Note 5, Goodwill to the unaudited Condensed Consolidated Interim Financial Statements for the three and nine months ended September 30, 2021.

With respect to the above noted impairment, the Company will continue to carefully monitor the situation as it pertains to COVID-19. With the ongoing prevalence of the COVID-19 pandemic, the length and severity of impacts on the Company’s business and industry in which it operates remain subject to uncertainty, and accordingly, may materially and adversely affect our commercial expectations and the assumptions used in our consideration of the impairment of goodwill and intangible assets. See "Impairment" and "Risk Factors" in the MD&A.

Management to Host Conference Call/Webcast
Management will host a conference call to discuss the results today (Monday, November 15, 2021) at 11:00 a.m. ET. To participate in the conference call, please dial (289) 536-4777 or 1 (888) 550-2239 / Conference ID: 6216508. Please call in 15 minutes prior to the call to secure a line. You will be put on hold until the conference call begins.

A live audio webcast and replay webcast of the conference call will be available through View Source

Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to hear the webcast.

On November 15, 2021 Theseus Pharmaceuticals, Inc. (NASDAQ: THRX), a biopharmaceutical company focused on improving the lives of cancer patients through the discovery, development and commercialization of transformative targeted therapies, reported financial results for the third quarter ended September 30, 2021 (Press release, Theseus Pharmaceuticals, NOV 15, 2021, View Source [SID1234595624]).

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!

"At Theseus, we are leveraging our deep expertise in the development of targeted therapies to address the problem of drug resistance mutations in cancer," said Tim Clackson, Ph.D., President and Chief Executive Officer of Theseus Pharmaceuticals. "The third quarter marked two significant milestones for Theseus: our entrance into the public markets and the start of our transition into a clinical-stage company. The recent IND clearance for our lead candidate, THE-630, a pan-variant KIT inhibitor with the potential to address unmet need in patients with previously treated gastrointestinal stromal tumors (GIST), and the completion of our successful IPO position Theseus well to advance both the Phase 1/2 clinical trial of THE-630 and our pipeline of novel pan-variant inhibitors specifically designed to overcome the full range of drug resistance mutations."

Third Quarter Highlights and Upcoming Milestones:

Received FDA clearance of an investigational new drug (IND) application to evaluate THE-630 in patients with GIST. Theseus plans to initiate a Phase 1/2 dose escalation and expansion clinical trial of THE-630, its lead development program, in patients with previously treated advanced GIST between late fourth quarter 2021 and mid-first quarter 2022. THE-630 is a pan-variant inhibitor of the receptor tyrosine kinase KIT designed for patients with advanced GIST whose cancer has developed resistance to earlier lines of therapy.
Completed $178.8 million upsized initial public offering. In October 2021, Theseus sold 11,172,190 shares of common stock at a price to the pubic of $16.00 per share. The gross proceeds from the offering were approximately $178.8 million, before deducting underwriting discounts and commissions and other estimated offering expenses.
Leadership strengthened through appointments to senior scientific team. Theseus recently appointed Nachu Narasimhan, Ph.D., as Senior Vice President, Drug Metabolism and Preclinical Safety, and Len Rozamus as Senior Vice President, Technical Operations. Together, their deep experience in targeted oncology research and development will help to further advance Theseus’ pipeline.
Dr. Narasimhan brings over 30 years of experience in drug metabolism and bioanalytical disciplines and over 10 years’ experience in preclinical safety and clinical pharmacology. Dr. Narasimhan was most recently Vice President of Drug Metabolism and Clinical Pharmacology at Verastem Oncology. Previously, he contributed to the development and approval of several drugs while working at Merck, ARIAD Pharmaceuticals, and Bristol-Myers-Squibb.
Mr. Rozamus brings over 30 years of experience in pharmaceutical discovery and development, from pre-clinical programs through commercial products. Most recently, Mr. Rozamus served as Founder and President of Rozamus and Associates, Inc. Previously, his work while Senior Director of Manufacturing Operations at ARIAD Pharmaceuticals contributed to the approval of three oncology drugs.
Advanced fourth-generation epidermal growth factor receptor (EGFR) program towards development candidate nomination in the first half of 2022, and thereafter initiate IND-enabling studies. For its second development program, Theseus expects to nominate an EGFR candidate designed to inhibit the full range of single-, double-, and triple-mutant EGFR variants found in the tumors of patients with EGFR-mutant non-small cell lung cancer (NSCLC) that have developed resistance to osimertinib, including the C797S mutation.
One or more additional kinase targets expected to be nominated by the end of 2022.
Third Quarter Financial Results:

As of September 30, 2021, Theseus had cash and cash equivalents of $90.4 million, which does not include net proceeds from its IPO, which was completed in October 2021.
Theseus expects its cash and cash equivalents, including proceeds from the IPO, to fund operations and capital expenditures into the second half of 2024.
Research & Development expenses for the third quarter of 2021 were $5.0 million.
General & Administrative expenses for the third quarter of 2021 were $2.4 million.
Net Loss for the third quarter 2021 was $7.4 million, or $5.16 per share.