On May 9, 2022 Dragonfly Capital ("Dragonfly"), a global crypto-focused investment firm, reported the final closing of its third venture fund, Dragonfly Ventures III, L.P. ("Fund III") with capital commitments from limited partners of $650 million, exceeding the Fund’s original target of $500 million (Press release, Dragonfly Therapeutics, MAY 9, 2022, View Source [SID1234613969]). The oversubscribed fund was closed at its hard cap and received strong support from institutional limited partners including leading Ivy League endowments, KKR, Tiger Global, Sequoia China, Invesco, US pensions, and sovereign wealth funds.

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Dragonfly previously closed Dragonfly Ventures II in 2021 after raising over $250 million. The new fund enhances the firm’s capacity to invest across all stages of blockchain and cryptocurrency companies, native protocols, and tokens that seek to create new digital economies. Dragonfly will build on the team’s investment track record and its global, technologist first approach to investing in crypto companies.

"Dragonfly has always been different because of two things: our global approach to investing, which reflects the borderless nature of crypto, and our technical bent, as most of our team understands crypto technology from first principles. In Fund III, we will double down on backing the next breakthroughs in crypto infrastructure, DeFi, smart contract scaling, and breakthrough consumer products like NFTs, crypto games, and DAOs. It’s an exciting moment in the history of web3 and we’re eager to partner with the next generation of builders," said Haseeb Qureshi, Managing Partner at Dragonfly.

"We’re looking forward to continuing to do what we love – working closely with founders at the very earliest stages to build generational companies in crypto. Most of our investment team previously worked at crypto startups and we lean on this hands-on experience to help entrepreneurs navigate the difficult parts of creating amazing companies in this space," said Tom Schmidt, General Partner at Dragonfly.

Since its inception in 2018, Dragonfly has established a strong track record and invested over $700 million of capital across seed, series A, series B, and liquid crypto deals. To date, the firm has made early investments in many top projects and companies, including Avalanche, NEAR Protocol, Compound, MakerDAO, 1inch, Matter Labs, Amber Group, Anchorage, Bybit, and Dune Analytics.

On May 9, 2022 Arcus Biosciences, Inc. (NYSE:RCUS), a clinical-stage, global biopharmaceutical company focused on developing differentiated molecules and combination therapies for people with cancer, reported financial results for the first quarter ended March 31, 2022 and provided a pipeline update on its six clinical-stage molecules targeting TIGIT, the adenosine axis (CD73 and dual A2a/A2b receptor), HIF-2a and PD-1 across multiple common cancers (Press release, Arcus Biosciences, MAY 9, 2022, View Source [SID1234613968]). In addition, today Arcus announced encouraging results from the third interim analysis of the ongoing Phase 2 ARC-7 study. In this interim analysis, both domvanalimab-containing arms continued to show meaningful differentiation compared to zimberelimab alone across multiple efficacy measures, including overall response rate (ORR) and duration of response (DoR). The clinical activity of zimberelimab alone was in line with established anti-PD-1 therapies in this patient population. At the time of data cut off, no unexpected safety signals were observed.

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"We are optimistic about the potential for and committed to the goal of domvanalimab becoming a best-in-class anti-TIGIT antibody," said Terry Rosen, Ph.D., chief executive officer of Arcus. "The results from our most recent interim analysis further support the significant investment we and Gilead are making in the domvanalimab program, which is on track to increase from two ongoing to four Phase 3 studies by year-end and include expansion into new areas of unmet need with broader populations in lung and upper gastrointestinal cancers. Moreover, with a strong cash balance and six clinical-stage molecules across multiple cancer types, we are well-positioned to develop potentially practice-changing therapies for cancer patients in need of better treatment options."

Anti-TIGIT program (domvanalimab and AB308)

Update on ARC-7:

Arcus conducted a third interim analysis (IA3) for ARC-7, a randomized Phase 2 study evaluating the safety and efficacy of zimberelimab alone vs. domvanalimab plus zimberelimab (doublet) vs. domvanalimab plus zimberelimab and etrumadenant (triplet) as a first-line treatment for metastatic NSCLC PD-L1 TPS≥50% with no actionable mutations. The study has a target total enrollment of 150 patients who are being randomized 1:1:1 across three study arms and treated until disease progression or loss of clinical benefit.
ARC-7 is an ongoing study and the data continues to mature as more patients are enrolled and patients are followed for longer durations.
Gilead and Arcus are co-developing and equally share co-development costs for the three investigational molecules: domvanalimab, an Fc-silent anti-TIGIT antibody, etrumadenant, a dual adenosine A2a/A2b receptor antagonist, and zimberelimab, an anti-PD1 antibody.
Summary of Efficacy and Safety Observations from IA3:

With more patients and longer follow up, both domvanalimab-containing arms continued to show meaningful differentiation compared to zimberelimab alone across multiple efficacy measures, including ORR and DoR.
Since the last interim analysis, ORR for the doublet continued to increase and further separate from zimberelimab alone.
Although early, the depth of response for the triplet remains encouraging; Arcus and Gilead will continue to monitor the triplet for potential differentiation in duration and depth of response vs. the doublet.
At this interim analysis, Arcus performed its first assessment of DoR. While the data are still immature, at the time of IA3, Arcus observed a substantial improvement for the domvanalimab-containing arms compared to zimberelimab alone.
Zimberelimab alone continued to demonstrate activity consistent with that of marketed anti-PD-1 antibodies in the setting.
No unexpected safety signals were observed; early safety data from this interim analysis showed a lower incidence of infusion reactions relative to published numbers from other anti-TIGIT plus anti-PD-(L)1 clinical studies.
Other Anti-TIGIT Updates:

In May 2022, Arcus presented Phase 1 and preclinical data at the Annual Meeting of the American Association of Immunologists; the data demonstrated the potential of domvanalimab, as an Fc-silent antibody, to achieve anti-tumor effects and the incidence of pruritis, rash, maculopapular rash and infusion-related adverse events appear to be lower than Fc-enabled anti-TIGIT monoclonal antibodies. The poster can be found in the publications section of the Arcus website.
2022 Anti-TIGIT Milestones:

Enrollment for ARC-7 remains on track to complete mid-2022; we expect to provide a data update in the second half of 2022.
Arcus and Gilead plan to initiate STAR-121, in 4Q 2022, a Phase 3 registrational trial to evaluate the combination of domvanalimab plus zimberelimab and chemotherapy versus standard of care pembrolizumab with chemotherapy in first-line NSCLC PD-L1 all-comers.
STAR-221, a pivotal Phase 3 study of a domvanalimab-based combination in upper gastrointestinal cancers, is currently in advanced stages of planning.
Arcus and Gilead expect to initiate two signal-finding Phase 2 studies to further evaluate multiple domvanalimab-combinations, including triplet combinations with etrumadenant and quemliclustat, by year-end.
Etrumadenant (A2a/A2b adenosine receptor antagonist)

Recent Etrumadenant Updates:

Gilead announced the addition of etrumadenant plus Trodelvy (sacituzumab govitecan-hziy) cohorts in the ongoing Phase 2 ARC-6 trial in castration-resistant prostate cancer.
2022 Etrumadenant Milestones:

As discussed above, Arcus and Gilead expect to initiate a Phase 2 platform study to evaluate domvanalimab-based combinations, including with etrumadenant, this year.
Data analysis from the randomized cohort of ARC-6 evaluating etrumadenant plus zimberelimab and docetaxel versus docetaxel in second-line metastatic castrate-resistant prostate cancer (CRPC) is anticipated in the second half of 2022 with a presentation of results expected in 2023.
Quemliclustat (small molecule CD73 inhibitor)

2022 Quemliclustat Milestones:

Results from ARC-8, including an assessment of progression-free survival, are expected in the second half of 2022 with detailed results to be presented at a future medical congress.
Additional clinical studies for quemliclustat are being planned with Gilead.
AB521 (HIF-2a inhibitor)

Recent AB521 Updates:

Initial PK/PD data from the evaluation of AB521 in healthy human volunteers as well as preclinical data for AB521, alone and in combination with cabozantinib, were presented at the ESMO (Free ESMO Whitepaper) Targeted Anticancer Therapies Congress in March 2022. The early clinical data suggest that AB521 potentially has an improved clinical profile compared to that of the approved HIF-2a inhibitor.
2022 AB521 Milestones:

A Phase 1/1b study to explore AB521 in clear-cell renal cell carcinoma, alone and in combination with other molecules, including those targeting the CD73-adenosine axis, is anticipated to be initiated in mid-2022. Data from the healthy volunteer study should enable Arcus to start dose escalation in patients at a biologically relevant dose level.
Discovery Programs:

AB598 (Arcus’ anti-CD39 antibody) continues to progress through preclinical development, and we expect to file an IND in the first half of 2023. Recent clinical data at AACR (Free AACR Whitepaper) from a competitor antibody is supportive of Arcus’ development plans for this molecule, in combination with other agents in our portfolio.
Arcus anticipates selection of a development candidate for at least one other discovery program to occur this year, with potential for IND filing in 2023.
Financial Results for the First Quarter 2022

Cash, cash equivalents and investments were $1,342.4 million as of March 31, 2022, compared to $681.3 million as of December 31, 2021. The increase was primarily due to the receipt of $725 million from Gilead in January 2022. Arcus expects cash, cash equivalents and marketable securities on-hand to be sufficient to fund operations into 2026.
Revenues: Collaboration and license revenues were $18.0 million for the three months ended March 31, 2022, compared to $9.5 million for the same period in 2021. In the three months ended March 31, 2022, Arcus recognized $8.3 million in collaboration revenue related to Gilead’s ongoing rights to access Arcus’ research and development pipeline in accordance with the Gilead collaboration agreement, $7.9 million in license and development service revenues for all programs optioned by Gilead, based on estimates of progress made toward satisfying the related performance obligations, as well as $1.8 million related to the collaboration agreement with Taiho. In the three months ended March 31, 2021, Arcus recognized $7.7 million in other collaboration revenue related to Gilead’s access to Arcus’ research and development pipeline, as well as $1.8 million related to the Taiho collaboration agreement.
R&D Expenses: Research and development expenses were $61.2 million for the three months ended March 31, 2022, compared to $66.4 million for the same period in 2021. The decrease was due to increased cost-sharing reimbursements from Gilead for its optioned programs and decreases in milestone expenses due to the timing of development milestones and the related payments, largely offset by an increase in costs incurred to support Arcus’ expanded clinical and development activities. There was a $2.3 million increase in compensation costs related to non-cash stock-based compensation to approximately $8.5 million for the three months ended March 31, 2022 compared to the prior year period.
G&A Expenses: General and administrative expenses were $24.0 million for the three months ended March 31, 2022, compared to $15.8 million for the same period in 2021. The increase was driven by the increased size and complexity of Arcus’s clinical development organization associated with Arcus’s expanding clinical pipeline and collaboration obligations. Arcus’s growing employee base and 2022 stock awards drove increases in office facilities expense and employee compensation costs, including a $1.4 million increase in non-cash stock-based compensation to approximately $8.0 million for the three months ended March 31, 2022 compared to the prior year period.
Net Loss: Net loss was $68.0 million for the three months ended March 31, 2022, compared to a net loss of $72.6 million for the same period in the prior year.
Arcus Ongoing and Announced Clinical Studies

Trial Name

Arms

Setting

Status

NCT No.

Lung Cancer

ARC-7

zim vs. dom + zim vs. dom + etruma + zim

1L NSCLC (PD-L1 ≥ 50%)

Ongoing Randomized Phase 2

NCT04262856

PACIFIC-8

dom + durva vs. durva

Curative-Intent Stage 3 NSCLC

Ongoing Registrational Phase 3

NCT05211895

ARC-10

dom + zim vs. zim vs. chemo

1L NSCLC (PD-L1 ≥ 50%)

Ongoing Registrational Phase 3

NCT04736173

STAR-121

dom + zim + chemo vs pembro + chemo

1L NSCLC (PD-L1 all-comers)

Planned Registrational Phase 3

TBD

EDGE-Lung

dom + zim + (quemli or etruma)

1L/2L NSCLC (lung cancer platform study)

In Planning Phase 2

TBD

Gastrointestinal Cancers

ARC-9

etruma + zim + mFOLFOX vs. SOC

2L/3L/3L+ CRC

Ongoing

Randomized Phase 2

NCT04660812

ARC-21

dom + zim ± chemo

1L/2L Upper GI Malignancies

Ongoing

Phase 2

NCT05329766

STAR-221

dom + zim + chemo vs. SOC

GI Malignancies

Planned Registrational Phase 3

TBD

Pancreatic Cancer

ARC-8

quemli + zim + gem/nab-pac vs. quemli + gem/nab-pac

1L, 2L PDAC

Ongoing Randomized Phase 1/1b

NCT04104672

Prostate Cancer

ARC-6

etruma + zim + SOC vs. SOC (Adding sacituzumab govitecan (Trodelvy) combination cohorts)

2L/3L CRPC

Ongoing Randomized Phase 2

NCT04381832

Various

ARC-12

AB308 + zim

Advanced Malignancies

Ongoing

Phase 1/1b

NCT04772989

ARC-14

AB521

Healthy Volunteer

Ongoing

NCT05117554

Carbo/pem: carboplatin/pemetrexed; dom: domvanalimab; durva: durvalumab; etruma: etrumadenant; gem/nab-pac: gemcitabine/nab-paclitaxel; quemli: quemliclustat; R/R: relapsed/refractory; SOC: standard of care; zim: zimberelimab CRC: colorectal cancer; CRPC: castrate-resistant prostate cancer; GI: gastrointestinal; NSCLC: non-small cell lung cancer; PDAC: pancreatic ductal adenocarcinoma

About the Gilead Collaboration

In May 2020, Gilead and Arcus entered into a 10-year collaboration that provided Gilead immediate rights to zimberelimab and the right to opt into all other Arcus programs arising during the collaboration term. In November 2021, Gilead and Arcus amended the collaboration in connection with Gilead’s option exercise for three of Arcus’s then-clinical stage programs. For all other programs that are in clinical development or new programs that enter clinical development thereafter, the opt-in payments are $150 million per program. Gilead’s option, on a program-by-program basis, expires after a specified period of time following the achievement of a development milestone for such program and Arcus’s delivery to Gilead of the requisite qualifying data package. Concurrent with the May 2020 collaboration agreement, Gilead and Arcus entered into a stock purchase agreement under which Gilead made a $200 million equity investment in Arcus. That stock purchase agreement was amended and restated in February 2021 in connection with Gilead’s increased equity stake in Arcus from 13% to 19.7%, with an additional $220 million investment.

Gilead and Arcus are co-developing and equally share global development costs for five clinical candidates, including domvanalimab, an Fc-silent anti-TIGIT antibody, etrumadenant, a dual adenosine A2a/A2b receptor antagonist, and zimberelimab, an anti-PD1 antibody.

On May 9, 2022 Verastem Oncology (Nasdaq: VSTM), a biopharmaceutical company committed to advancing new medicines for patients with cancer, reported financial results for the three months ended March 31, 2022 and highlighted recent progress (Press release, Verastem, MAY 9, 2022, View Source [SID1234613967]).

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"In the first quarter of this year, we made significant progress building on our breakthrough therapy designation in recurrent low-grade serous ovarian cancer and advancing our development programs and scientific platform to establish VS-6766 as the backbone therapy for RAS-driven solid tumors. This includes completing enrollment for the selection phase of both our RAMP 201 trial in low-grade serous ovarian cancer and our RAMP 202 trial in KRAS G12V-mutant non-small cell lung cancer, with topline results planned for the second quarter and the second half of this year, respectively. Further, we initiated enrollment in the Phase 1/2 trial with Amgen to evaluate VS-6766 in combination with LUMAKRASTM (sotorasib) in patients with KRAS G12C-mutant non-small lung cancer," said Brian Stuglik, Chief Executive Officer of Verastem Oncology. "At the same time, we strengthened our flexibility by entering into a term loan facility with Oxford, which combined with our financial resources will allow us to effectively advance our current development and commercial objectives, working to bring VS-6766 and defactinib to patients with high unmet needs."

First Quarter 2022 and Recent Highlights

Low Grade Serous Ovarian Cancer (LGSOC)

Planned enrollment is complete in the selection phase (Part A; n=64) of the registration-directed Phase 2 RAMP 201 study investigating VS-6766 alone or in combination with defactinib for the treatment of recurrent LGSOC. Verastem plans to report topline results from Part A during the second quarter of 2022, following discussions with regulatory authorities.
Enrollment has commenced in the expansion phase (Part B) of RAMP 201, with both treatment arms (VS-6766 alone and in combination with defactinib) currently advancing in all patients. Verastem expects to complete enrollment in Part B during the second half of 2022.
Translational data presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) meeting in April provided mechanistic insights into the encouraging response rates and progression free survival observed in patients with LGSOC treated with VS-6766 with defactinib in the investigator-initiated FRAME study. These data support the ongoing registration-directed Phase 2 RAMP 201 study assessing VS-6766 with defactinib for patients with LGSOC regardless of KRAS status.
KRAS Mutant Non-Small Cell Lung Cancer (NSCLC)

Planned enrollment is now complete in the selection phase (Part A; n=32) of the registration-directed RAMP 202 study investigating VS-6766 alone and in combination with defactinib in patients with KRAS G12V-mutant NSCLC. Enrollment has also been completed in the non-G12Vmutant cohort in the expansion phase (Part B). The Company expects to report topline results from Part A and initiate Part B during the second half of 2022, following discussions with regulatory authorities.
Based on preclinical rationale, Verastem has added BRAF-mutant cohorts to the RAMP 202 study to efficiently evaluate VS-6766 with defactinib in BRAF-mutant NSCLC. In Part A of the study, the Company expects to enroll two cohorts comprised of 15 patients each to evaluate the combination in patients with V600E or non V600E BRAF mutations, respectively. These cohorts are open and enrolling.
The Phase 1/2 RAMP 203 study evaluating VS-6766 in combination with Amgen’s LUMAKRASTM (sotorasib) in G12C-mutant NSCLC opened and is enrolling. The initial results are expected to be reported during the second half of 2022.
Corporate Updates

Secured debt facility with Oxford Finance LLC for up to $150 Million. Under the terms of the credit facility with Oxford Finance LLC, Verastem drew an initial $25 million term loan at closing. The Company has the ability to access up to an additional $125 million in a series of tranches, $75 million of which is based on certain pre-determined milestones and $50 million of which is available at the lender’s discretion.
With the credit facility and expected milestones related to the sale of COPIKTRA (duvelisb) to Secura Bio Inc. (Secura) in 2020, the Company expects to have a cash runway through 2025 to support the continued development and potential commercial launches of VS-6766 and defactinib.
Secura sublicensee, CSPC Pharmaceutical Group Limited (CSPC), obtained drug registration approval for duvelisib granted by the National Medical Products Administration of the People’s Republic of China for the treatment of adult patients with relapsed or refractory follicular lymphoma after at least two prior systematic therapies, which entitles Verastem to a $2.5 million milestone payment.
Preclinical data presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) meeting in April continued to support the versatility of VS-6766 in RAS-driven tumors, including KRAS G12C-mutant NSCLC, low-grade serous ovarian cancer and cutaneous melanoma.
First Quarter 2022 Financial Results

Verastem Oncology ended the first quarter 2022 with cash, cash equivalents and investments of $106.3 million.

Total revenue for the three months ending March 31, 2022 (2022 Quarter) was $2.6 million, compared to $1.0 million for the three months ended March 31, 2021 (2021 Quarter). Revenue for the 2022 Quarter was primarily comprised of one regulatory milestone for $2.5 million achieved by Secura’s sublicensee, CSPC. Revenue for the 2021 Quarter was primarily comprised of one regulatory milestone for $0.8 million achieved by Secura’s sublicensee, Sanofi.

Total operating expenses for the 2022 Quarter were $19.6 million, compared to $15.1 million for the 2021 Quarter.

Research & development expenses for the 2022 Quarter were $13.6 million, compared to $8.9 million for the 2021 Quarter. The increase of $4.7 million, or 52.8%, primarily resulted from an increase in drug product and drug substance costs, contract research organization costs and investigator fees.

Selling, general & administrative expenses for the 2022 Quarter were $5.9 million, compared to $6.2 million for the 2021 Quarter. The decrease of $0.3 million, or 4.8%, primarily resulted from lower consulting and professional fees.

Net loss for the 2022 Quarter was $17.0 million, or $0.09 per share (basic and diluted), compared to net loss of $15.0 million, or $0.09 per share (basic and diluted), for the 2021 Quarter.

For the 2022 Quarter, non-GAAP adjusted net loss was $15.3 million, or $0.08 per share (diluted), compared to non-GAAP adjusted net loss of $12.4 million, or $0.07 per share (diluted), for the 2021 Quarter. Please refer to the GAAP to Non-GAAP Reconciliation attached to this press release.

Use of Non-GAAP Financial Measures

To supplement Verastem Oncology’s condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), the Company uses the following non-GAAP financial measures in this press release: non-GAAP adjusted net (loss) income and non-GAAP net (loss) income per share. These non-GAAP financial measures exclude certain amounts or expenses from the corresponding financial measures determined in accordance with GAAP. Management believes this non-GAAP information is useful for investors, taken in conjunction with the Company’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to the Company’s operating performance and can enhance investors’ ability to identify operating trends in the Company’s business. Management uses these measures, among other factors, to assess and analyze operational results and trends and to make financial and operational decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the Company’s operating results as reported under GAAP, not in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. Reconciliations between these non-GAAP financial measures and the most comparable GAAP financial measures for the three months ended March 31, 2022 and 2021 are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.

About VS-6766

VS-6766 (formerly known as CH5126766 and RO5126766) is a RAF/MEK clamp that induces inactive complexes of MEK with ARAF, BRAF and CRAF potentially creating a more complete and durable anti-tumor response through maximal RAS pathway inhibition. VS-6766 is currently in late-stage development.

In contrast to other MEK inhibitors, VS-6766 blocks both MEK kinase activity and the ability of RAF to phosphorylate MEK. This unique mechanism allows VS-6766 to block MEK signaling without the compensatory activation of MEK that appears to limit the efficacy of other inhibitors. The U.S. Food and Drug Administration granted Breakthrough Therapy designation for the combination of Verastem Oncology’s investigational RAF/MEK inhibitor VS-6766, with defactinib, its FAK inhibitor, for the treatment of all patients with recurrent low-grade serous ovarian cancer (LGSOC) regardless of KRAS status after one or more prior lines of therapy, including platinum-based chemotherapy.1

Verastem Oncology is conducting Phase 2 registration-directed trials of VS-6766 alone and with defactinib in patients with recurrent LGSOC and in patients with recurrent KRAS G12V-mutant NSCLC as part of its RAMP (Raf And Mek Program) clinical trials, RAMP 201 and RAMP 202, respectively. Verastem Oncology has also established clinical collaborations with Amgen and Mirati to evaluate LUMAKRAS (sotorasib) and adagrasib in combination with VS-6766 in KRAS G12C-mutant NSCLC as part of the RAMP 203 and RAMP 204 trials, respectively.

On May 9, 2022 Castle Biosciences, Inc. (Nasdaq: CSTL), a company improving health through innovative tests that guide patient care, reported its financial results for the first quarter ended March 31, 2022 (Press release, Castle Biosciences, MAY 9, 2022, View Source [SID1234613966]).

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"We saw significant progress and execution on our growth initiatives in the first quarter, with record test report volume," said Derek Maetzold, president and chief executive officer of Castle Biosciences. "We remain laser-focused on the execution of our three operational growth pillars — our strong core dermatology business, pipeline initiatives and strategic opportunities — and are pleased with our results.

"In 2021, we made commercial investments, including a significant sales team expansion, in our proprietary skin cancer test business to further our position of strength in 2022 and beyond. We believe these investments, coupled with the demonstrated utility of our tests, are the drivers behind the nearly 70% increase in total test volume during the first quarter.

"We reported initial proof of concept data on our sample collection method for our pipeline test for inflammatory skin diseases, and we remain on track to launch this test in 2025, which would add an additional $1.9 billion to our estimated U.S. total addressable market (TAM), if successful.

"We are encouraged with the initial progress on our gastroenterology franchise and TissueCypher Barrett’s Esophagus (BE) test. We successfully hired and trained our commercial team for this test, who were in the field in February 2022, and received new Advanced Diagnostic Laboratory Test (ADLT) status from the Centers for Medicare & Medicaid Services (CMS) in March 2022. Further, the recent acquisition of AltheaDx and the IDgenetix pharmacogenomic test (PGx), in alignment with our M&A strategy to diversify our portfolio and create near- and long-term revenue growth opportunity, adds approximately $5.0 billion to our estimated U.S. TAM. IDgenetix now has expanded Medicare coverage, from depression only to seven additional mental health conditions. We are entering the remainder of 2022 with an estimated in-market U.S. TAM of just under $8 billion, for all our franchises combined.

"We believe our progress is only possible through the dedication of our Castle team, who allows us to execute at a high level, further our impact on patient care and position ourselves for continued value creation."

First Quarter Ended March 31, 2022, Financial and Operational Highlights

Revenues were $26.9 million, an 18% increase compared to $22.8 million during the same period in 2021. Included in revenue for the current year was $0.6 million related to tests delivered in prior periods. Revenue for the same quarter last year included $5.3 million related to tests delivered in prior periods.
Adjusted revenues, which exclude the effects of revenue adjustments related to tests delivered in prior periods, were $26.3 million, an 50% increase, compared to $17.5 million for the same period in 2021.
Delivered 8,627 total test reports in the first quarter of 2022, an increase of 68% compared to 5,142 in the same period of 2021:
DecisionDx-Melanoma test reports delivered in the quarter were 6,023, compared to 4,060 in the first quarter of 2021, an increase of 48%.
DecisionDx-SCC test reports delivered in the quarter were 1,142, compared to 527 in the first quarter of 2021, an increase of 117%.
myPath Melanoma and DecisionDx DiffDx-Melanoma (Castle’s comprehensive diagnostic offering) aggregate test reports delivered in the quarter were 950, compared to 218 in the first quarter of 2021, an increase of 336%.
DecisionDx-UM test reports delivered in the quarter were 456, compared to 337 in the first quarter of 2021, an increase of 35%.
TissueCypher Barrett’s Esophagus test reports delivered in the quarter were 56.
Gross margin for the quarter ended March 31, 2022, was 72%, and adjusted gross margin was 77%.
Operating cash flow was $(21.4) million, compared to $(3.6) million for the same period in 2021, and adjusted operating cash flow was $(21.4) million, compared to $(5.5) million for the same period in 2021.
Net loss for the first quarter, inclusive of non-cash stock-based compensation expense of $8.4 million, was $(24.6) million, compared to $(4.3) million for the same period in 2021.
Adjusted EBITDA for the first quarter was $(11.4) million, compared to $0.9 million for the same period in 2021.
Cash and Cash Equivalents

As of March 31, 2022, the Company’s cash and cash equivalents totaled $309 million.

2022 Revenue Guidance

Castle Biosciences is increasing its previously issued guidance for anticipated total revenue in 2022. The Company now anticipates generating $118-123 million in total revenue in 2022, compared to the previously provided guidance of $115-120 million. This includes expected revenue from the TissueCypher Barrett’s Esophagus test, acquired in December 2021, and the IDgenetix pharmacogenomics test for mental health conditions, acquired in April 2022.

First Quarter and Recent Accomplishments and Highlights

Dermatology

In April, the Company announced new real-world data from its ongoing collaborative study with the National Cancer Institute (NCI). This new data showed that patients who received DecisionDx-Melanoma test results in addition to traditional clinicopathologic factors, as part of their clinical care, had improved survival compared to patients who were not tested (that is, their clinician could only rely upon available traditional clinicopathologic factors), with a 27% (hazard ratio (HR)=0.73, p=0.028) and 21% (HR=0.79, p=0.006) MSS (melanoma specific survival) and OS (overall survival) survival benefit compared to matched patients who were not tested, respectively. The data was shared in a poster presentation at the 18th European Association of Dermato-Oncology (EADO) Congress. See the Company’s news release from April 21, 2022, for more information.
Castle’s U.S. Federal Supply Schedule (FSS) contract with the Veterans Health Administration (VHA) was expanded to include coverage for the Company’s entire skin cancer test portfolio, effective April 15, 2022. Castle’s expanded U.S. FSS contract now includes DecisionDx-SCC, DecisionDx DiffDx-Melanoma, myPath Melanoma and DecisionDx-CMSeq, in addition to DecisionDx-Melanoma. Castle was awarded its first U.S. FSS contract in August 2021 for DecisionDx-Melanoma. See the Company’s news release from April 29, 2022, for more information.
In April, the Company gave a poster presentation highlighting data and concluding that its non-invasive skin scraping technique produces sufficient ribonucleic acid (RNA) to assess reproducible gene expression for its inflammatory skin disease pipeline test. The poster was presented at the 4th Annual Revolutionizing Atopic Dermatitis Conference. The Company expects to launch this pipeline test by the end of 2025. See the Company’s news release from April 18, 2022, for more information.
In March, the Company announced new data further demonstrating the performance of DecisionDx-Melanoma and i31-SLNB to provide improved risk prediction of sentinel lymph node (SLN) positivity, compared to using T-stage factors alone, in patients with cutaneous melanoma. In the study, the DecisionDx-Melanoma test outperformed T-stage in identifying patients with low-risk tumors who could forgo SLN biopsy, with an Area Under the Curve of 0.89 versus 0.78 for T-stage in patients with T1-T2 tumors, indicating that DecisionDx-Melanoma provides improved predictions compared to those of the T-stage system. See the Company’s news release from March 11, 2022, for more information.
Uveal Melanoma

In January, the Company announced the publication of a study in Ocular Oncology and Pathology demonstrating that the combined application of DecisionDx-UM, DecisionDx-PRAME and DecisionDx-UMSeq allows for highly accurate analysis of RNA and DNA from a single biopsy sample for patients with uveal melanoma (UM). DecisionDx-UMSeq is Castle’s 7-gene test that uses next-generation sequencing to identify somatic mutations relevant to UM. This information, together with results from the DecisionDx-UM gene expression profile test, is designed to help build a comprehensive genomic profile of an individual UM tumor from a single biopsy, which can then be used to inform patient care. See the Company’s news release from Jan. 12, 2022, for more information.
Gastroenterology

In March, the Company announced that CMS granted ADLT status for the TissueCypher Barrett’s Esophagus test, effective March 24, 2022. TissueCypher is Castle’s prognostic test designed to predict future development of high-grade dysplasia and/or esophageal cancer in patients with BE. ADLT status requires that a clinical diagnostic laboratory test provide new clinical diagnostic information that cannot be obtained from any other test or combination of tests, among other criteria.1 The announcement of ADLT status for TissueCypher confirms that the test meets these criteria established by CMS for laboratory tests under the Protecting Access to Medicare Act of 2014 (PAMA). See the Company’s news release from March 29, 2022, for more information.
In April, the company announced an independent, peer-reviewed article published in Clinical Gastroenterology and Hepatology. The study reinforces the ability of TissueCypher to significantly improve predictions of progression to esophageal cancer in patients with BE, compared to predictions based on traditional clinicopathologic variables alone, allowing for more informed disease management decisions. See the Company’s news release from April 27, 2022, for more information.
Mental Health

In April, the Company diversified and expanded its portfolio into the mental health market with the acquisition of AltheaDx and the IDgenetix PGx test for mental health conditions. IDgenetix has been reimbursed by Medicare for depression since the fall of 2020, and in a randomized, controlled clinical-use trial demonstrated clinical utility over standard of care, when physicians used the test prior to prescribing a medication. The acquisition adds approximately $5.0 billion to the Company’s estimated U.S. TAM. See the Company’s news release from April 26, 2022, for more information.
In May, the Company announced a collaboration with Camille Schrier, Miss America 2020, as part of Mental Health Awareness Month, to promote the potential of genetic testing and the IDgenetix test to help improve treatment for mental health conditions. See the Company’s news release from May 6, 2022, for more information.
Conference Call and Webcast Details

Castle Biosciences will hold a conference call on Monday, May 9, 2022, at 4:30 p.m. Eastern time to discuss its first quarter 2022 results and provide a corporate update.

A live webcast of the conference call can be accessed here: or via the webcast link on the Investor Relations page of the Company’s website, View Source Please access the webcast at least 10 minutes before the conference call start time. An archive of the webcast will be available on the Company’s website until May 30, 2022.

To access the live conference call via phone, please dial 844 200 6205 from the United States, or +1 929 526 1599 internationally, at least 10 minutes prior to the start of the call, using the conference ID 355837.

There will be a brief Question & Answer session following management commentary.

Use of Non-GAAP Financial Measures (UNAUDITED)

In this release, we use the metrics of Adjusted Revenue, Adjusted Gross Margin, Adjusted Operating Cash Flow and Adjusted EBITDA, which are non-GAAP financial measures and are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Adjusted Revenue and Adjusted Gross Margin reflect adjustments to net revenues to exclude changes in variable consideration related to test reports delivered in previous periods. Adjusted Gross Margin further excludes acquisition-related intangible asset amortization. Adjusted Operating Cash Flow excludes the effects of repayments to Medicare of COVID-19 government relief advancements to healthcare providers. Adjusted EBITDA excludes from net loss interest expense, depreciation and amortization expense, income tax expense, stock compensation expense, and change in fair value of contingent consideration.

We use Adjusted Revenue, Adjusted Gross Margin, Adjusted Operating Cash Flow and Adjusted EBTIDA internally because we believe these metrics provide useful supplemental information in assessing our revenue and cash flow performance reported in accordance with GAAP, respectively. We believe Adjusted Revenue and Adjusted Gross Margin are also useful to investors because they provide additional information on current-period performance by removing the effects of revenue adjustments related to tests delivered in previous periods and acquisition-related intangible asset amortization, which we believe may facilitate revenue and gross margin comparisons to historical periods. We believe Adjusted Operating Cash Flow is also useful to investors as a supplement to GAAP measures in the assessment of our cash flow performance by removing the effects of COVID-19 government relief payments, which we believe are not indicative of our ongoing operations. We believe Adjusted EBITDA may enhance an evaluation of our operating performance based on recent revenue generation and product/overhead cost control because it excludes the impact of prior decisions made about capital investment, financing and other expenses. However, these non-GAAP financial measures may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes.

These non-GAAP financial measures are not meant to be considered in isolation or used as substitutes for net revenues, gross margin, net cash (used in) provided by operating activities or net loss reported in accordance with GAAP; should be considered in conjunction with our financial information presented on GAAP basis; have no standardized meaning prescribed by GAAP; and are not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation tables have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of this release.

1Centers for Medicare & Medicaid Services: View Source

On May 9, 2022 Nuvation Bio Inc. (NYSE: NUVB), a biopharmaceutical company tackling some of the greatest unmet needs in oncology by developing differentiated and novel therapeutic candidates, reported its financial results for the first quarter ended March 31, 2022, and provided a business update (Press release, Nuvation Bio, MAY 9, 2022, View Source [SID1234613965]).

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"We are encouraged by the important progress we have made so far this year across our pipeline of novel oncology therapeutic candidates for difficult-to-treat cancers. In the first quarter, we dosed the first patient in our Phase 1 study of NUV-868 in patients with advanced solid tumors and continued to advance our NUV-422 program across multiple tumor types, well positioning us to execute on multiple milestones later this year," said David Hung, M.D., founder, president, and chief executive officer of Nuvation Bio. "We believe that our NUV-422, NUV-868, and DDC development programs are our most unique and differentiated programs with the highest potential to meaningfully change the lives of cancer patients. To further focus on these programs, efficiently allocate our robust cash balance and strategically manage our pipeline, we have decided to deprioritize our early stage NUV-569 and A2A programs."

Recent Business Highlights

NUV-422, CDK 2/4/6i: GBM, aBC, mCRPC

On track for multiple milestones across tumor types in 2022. Nuvation Bio expects to share data from the Phase 1 dose escalation study of NUV-422 later this year. As supported by these data and following selection of a recommended Phase 2 dose, the Company plans to initiate Phase 2 monotherapy dose expansion cohorts in glioblastoma multiforme (GBM), advanced breast cancer (aBC), and metastatic castration-resistant prostate cancer (mCRPC) to evaluate the safety and efficacy of NUV-422. In addition, the Company is planning to initiate Phase 1b combination studies of NUV-422 plus fulvestrant in aBC and NUV-422 plus enzalutamide in mCRPC to evaluate safety and tolerability and to determine a recommended Phase 2 combination dose. The Company plans to initiate the Phase 2 monotherapy and Phase 1b combination studies before the end of the year.
NUV-868, BD2-Selective BETi: Advanced solid tumors

Dosed the first patient in the Phase 1 study of NUV-868. In January 2022, the U.S. Food and Drug Administration (FDA) cleared Nuvation Bio’s Investigational New Drug (IND) application for NUV-868 for the treatment of advanced solid tumors, including ovarian cancer, pancreatic cancer, mCRPC, and triple negative breast cancer (TNBC). The recently initiated Phase 1 study is designed to determine the safety and dose of NUV-868 to be used as a monotherapy and in combination with olaparib or enzalutamide for the Phase 2 and 2b portions of the study.
Drug-Drug Conjugate (DDC) Program: Solid tumors

Nuvation Bio is on track to select its first clinical candidate for the DDC program by the end of 2022.
First Quarter 2022 Financial Results

As of March 31, 2022, Nuvation Bio had cash, cash equivalents and marketable securities of $737.7 million.

For the three months ended March 31, 2022, research and development expenses were $20.7 million, compared to $15.9 million for the three months ended March 31, 2021. The increase was primarily due to a $5.4 million increase in third-party costs related to research services and manufacturing to advance our current preclinical programs and Phase 1/2 clinical trial, as well as a $3.1 million increase in personnel-related costs driven by an increase in headcount and stock-based compensation, partially offset by $3.7 million related to the issuance of common stock as consideration for the purchase of in-process research and development in the prior year that did not recur in 2022.

For the three months ended March 31, 2022, general and administrative expenses were $7.5 million, compared to $4.6 million for the three months ended March 31, 2021. The increase was primarily due to a $1.9 million increase in personnel-related costs driven by an increase in headcount and stock-based compensation, a $0.5 million increase in insurance, a $0.4 million increase in legal fees, a $0.3 million increase in professional fees, and a $0.1 million increase in other miscellaneous expenses, partially offset by a $0.4 million decrease in taxes.

For the three months ended March 31, 2022, Nuvation Bio reported a net loss of $21.3 million, or $(0.10) per share. This compares to a net loss of $20.4 million, or $(0.12) per share, for the comparable period in 2021.