On March 24, 2022 Yumanity Therapeutics (Nasdaq: YMTX), a clinical-stage biopharmaceutical company focused on the discovery and development of innovative, disease-modifying therapies for neurodegenerative diseases, reported financial results for full-year ended December 31, 2021 and provided an overview of the Company’s recent corporate developments (Press release, Yumanity Therapeutics, MAR 24, 2022, View Source [SID1234615744]).
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"We continue to believe in the potential of YTX-7739, which may represent a major advancement in the treatment paradigm for Parkinson’s patients," said Richard Peters, M.D., Ph.D., President, Chief Executive Officer and Director of Yumanity. "As previously announced, to preserve capital and optimize shareholder value, we took several rapid steps recently including engaging H.C. Wainwright to evaluate strategic alternatives for the Company; implementing an aggressive restructuring of our workforce; retiring our venture debt with Hercules; and reducing our lease expenses."
Recent Corporate Developments
In February 2022, the Company announced its exploration of strategic alternatives to enhance shareholder value and engaged H.C. Wainwright as its exclusive financial advisor to assist in this process. The Company also announced a restructuring of the Company to preserve capital.
In February 2022, the Company collected a $5 million milestone payment from Merck & Co. for its ongoing research collaboration in ALS and frontotemporal lobar dementia. Yumanity is eligible to receive more than $500 million in future milestones and royalties under this research agreement.
In January 2022, the U.S. Food and Drug Administration (FDA) placed a partial clinical hold on our multidose clinical trials of YTX-7739. The partial clinical hold suspends initiation of multiple dose clinical trials in the U.S. until the FDA’s concerns have been addressed. The FDA has not halted all clinical programming and is permitting our planned single dose formulation clinical trial to proceed. We anticipate working closely with the FDA to adequately address their concerns.
Announced successful Phase 1b clinical trial results for YTX-7739 in patients with Parkinson’s disease. YTX-7739 demonstrated target engagement in patients with mild-to-moderate disease, and was found to be generally well tolerated, demonstrating favorable pharmacokinetic/ pharmacodynamic (PK/PD) profiles and a safety profile with no serious adverse events. In a subset of patients studied, YTX-7739 demonstrated a statistically significant change compared to baseline in an exploratory measurement of quantitative electroencephalogram, suggestive of a potential improvement in synaptic function that may benefit Parkinson’s patients.
2021 Financial Highlights
Cash position: As of December 31, 2021, cash, cash equivalents and investments were $36.5 million, compared to $85.3 million as of December 31, 2020. The decrease was primarily due to spending on the clinical development of YTX-7739 and costs related to being a public company. The Company believes its cash, cash equivalents and marketable securities, including the $5 million milestone payment from Merck & Co., will not be sufficient to fund operating expenses and capital expenditure requirements for a period of twelve months.
Research and development expense (R&D): Research and development expense was $26.4 million compared to $22.3 million for the prior year. The increase in R&D expense was due to the costs associated with the YTX-7739 clinical program, the YTX-9184 preclinical program, and increased spending on early-stage discovery efforts.
General and administrative expense: General and administrative expense was $20.4 million compared to $11.9 million for the prior year. The increase was primarily attributable to increased professional services fees associated with operating as a public company.
Net loss: The Company reported a net loss of $39.5 million, or $3.84 per basic and diluted share, compared to a net loss of $50.8 million, or $21.57 per basic and diluted share for the prior year. The decrease was due to increased research and development expenses and increased general and administrative expenses offset by costs associated with a one-time in-process research and development assets acquired expense in 2020.
About YTX-7739
YTX-7739 is Yumanity Therapeutics’ proprietary lead small molecule investigational therapy designed to penetrate the blood-brain barrier and inhibit the activity of a novel target, stearoyl-CoA desaturase (SCD). SCD appears to play an important and previously unrecognized role in mitigating neurotoxicity arising from the effects of pathogenic alpha-synuclein protein aggregation and accumulation, which ultimately results in the death of neurons and the subsequent dysregulation of movement and cognition that afflicts patients living with these diseases. Through inhibition of SCD, YTX-7739 modulates an upstream process in the alpha-synuclein pathological cascade and has been shown to rescue or prevent toxicity in preclinical cellular and animal models. The company is assessing the potential utility of YTX-7739 as a disease modifying therapy for Parkinson’s disease.
About SCD
SCD is an enzyme that catalyzes fatty acid desaturation, the products of which are incorporated into phospholipids, triglycerides, or cholesterol esters. These classes of lipid molecules regulate multiple diverse cellular properties and processes, including membrane structure and function, vesicle and organelle trafficking, intracellular signaling and inflammation. SCD expression is regulated by a transcription factor known as SREBF1, which has been identified in human genome-wide association studies as a risk factor for Parkinson’s disease. In preclinical models, SCD inhibition appears to normalize the dynamic interaction of pathological alpha-synuclein with membranes, which improves neuronal function and reduces toxicity, leading to enhanced neuronal survival. Following the initial discovery of SCD’s role in synucleinopathy by Yumanity’s unbiased discovery engine, several prominent academic labs have independently focused on SCD as a promising upstream target for mitigating alpha-synuclein mediated neurodegeneration. Alpha-synuclein-dependent disruption of membrane-related biological pathways, such as vesicle trafficking, is closely linked to the formation of Lewy body protein/membrane aggregations a hallmark pathological feature of Parkinson’s disease, Lewy body dementia and other neurodegenerative diseases.