On November 2, 2022 Surface Oncology (Nasdaq: SURF), a clinical-stage immuno-oncology company developing next-generation immunotherapies that target the tumor microenvironment, reported financial results for the third quarter of 2022 (Press release, Surface Oncology, NOV 2, 2022, View Source [SID1234622765]).

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"We are excited by the monotherapy activity seen with SRF388 in relapsed non-small cell lung cancer (NSCLC), an area of high unmet need globally," said Rob Ross, M.D., chief executive officer. "Two patients with squamous NSCLC have had confirmed partial responses to monotherapy treatment. Both patients had progressed on multiple prior systemic treatments, including anti-PD-(L)1 antibodies and chemotherapy. In addition, a third patient with highly pretreated NSCLC experienced durable disease stabilization and has remained on study for over a year without progression. Based on these promising results in relapsed NSCLC, we have opened the second stage of our trial investigating SRF388 as a monotherapy, and we have treated our first patients in a new cohort to investigate SRF388 in combination with pembrolizumab in second to fourth line NSCLC. We look forward to sharing additional data from those trials in the first half of 2023."

Dr. Ross added, "While we continue to believe SRF617 holds therapeutic potential in a variety of tumor types, we have made the strategic decision to pause internal development of that program and focus our efforts on SRF388 and SRF114. As a result, we are implementing a corresponding reduction in our workforce. The work done by our impressive team of scientists and clinicians was outstanding, but we believe it is in the best interest of patients and our shareholders to invest our resources where they can have the greatest potential impact in the near term. We are actively pursuing partnership opportunities to advance SRF617 outside of Surface."

Clinical Program Updates

SRF388, first-in-class antibody targeting IL-27

In the ongoing study evaluating SRF388 as a monotherapy in NSCLC, two confirmed partial responses have been observed as of the data cut-off of August 24, 2022, in patients treated at or above the recommended Phase 2 dose (22% ORR (2/9)), which includes 100% (2/2) of patients with squamous NSCLC. Additionally, a patient with adenocarcinoma has experienced durable disease stabilization, ongoing for more than 56 weeks. All three of these patients had previous treatment with chemotherapy and with anti-PD-(L)1 agents. Based on these results, Surface has opened the second stage of the Simon’s 2-stage trial which is expected to enroll 40 patients with NSCLC in total.
Surface has initiated a single-arm Phase 2 study evaluating SRF388 in combination with pembrolizumab in patients with NSCLC who have progressed after 1-3 prior lines of therapy, including chemotherapy and anti-PD-1 agents. The study is anticipated to enroll up to 40 patients with NSCLC.
Surface anticipates sharing clinical results from the ongoing SRF388 studies in the first half of 2023.
Surface has stopped enrollment in the renal cell carcinoma (RCC) study to focus efforts on NSCLC and HCC based on encouraging data seen in those indications.
SRF617, novel antibody targeting CD39

Following a portfolio review, Surface made the strategic decision to pause the internal clinical development of SRF617, a novel antibody targeting CD39. In conjunction with this change, Surface is implementing an organizational restructuring that will result in a reduction of approximately 20% of its workforce.
This change will enable the company to focus its resources on the advancement of SRF388 and SRF114, which Surface believes hold the greatest near-term potential to provide benefit to patients and drive value for shareholders.
Management now projects that current cash and cash equivalents are sufficient to fund Surface into the second quarter of 2024.
Surface is actively pursuing potential business development opportunities for SRF617.
SRF114, potential best-in-class antibody targeting CCR8

In October, the U.S. Food and Drug Administration (FDA) cleared the Investigational New Drug (IND) application for SRF114, a potential best-in-class CCR8 inhibitor. Surface expects to enroll the first patient soon.
Third Quarter and Subsequent Corporate Highlights

In October, Surface announced the publication of a study entitled, "Structural basis of activation and antagonism of receptor signaling mediated by Interleukin-27" in Cell Reports. The study was a collaborative research effort between the Unit for Structural Biology at the VIB-University of Ghent Center for Inflammation Research and Surface Oncology. The research provides important structural evidence that the SRF388 antibody directly competes with the IL-27 receptor to prevent downstream signaling of the cytokine.
In September, Surface presented new preclinical data demonstrating IL-27 induces a gene expression signature that has been associated with resistance to chemotherapy, radiotherapy, and checkpoint inhibition at the 10th Annual Cytokines Meeting of the International Cytokine and Interferon Society (ICIS). The findings support the continued clinical investigation of SRF388 in multiple tumor types.
Corporate Update Conference Call and Webcast
Surface management will host a conference call and live webcast today, November 2, 2022, at 8:30 a.m. ET to discuss the SRF388 data and other corporate updates. Individuals interested in viewing the webcast may do so by registering via this webcast link or by visiting the Investor Relations section of the company’s website at: www.surfaceoncology.com.

To access the conference call by phone, please use this registration link, and you will be provided with dial-in details. A webcast re-play will be available in the investor relations section on the company’s website shortly following the completion of the call.

Financial Results

As of September 30, 2022, cash, cash equivalents and marketable securities were $146.4 million, compared to $154.1 million on December 31, 2021. General and administrative (G&A) expenses were $6.0 million for the third quarter ended September 30, 2022, compared to $5.8 million for the same period in 2021. The increase primarily relates to personnel related costs from increased headcount. G&A expenses included $1.1 million in stock-based compensation expense for the third quarter ended September 30, 2022.

Research and development (R&D) expenses were $16.9 million for the third quarter ended September 30, 2022, compared to $14.0 million for the same period in 2021. The increase was primarily driven by expenses incurred for the SRF388 and SRF617 Phase 1 and Phase 2 clinical trials as well as manufacturing expenses incurred for the SRF114 program. R&D expenses included $0.7 million in stock-based compensation expense for the third quarter ended September 30, 2022.

For the third quarter ended September 30, 2022, net loss was $23.2 million, or basic and diluted net loss per share of $0.39. Net loss was $19.9 million for the same period in 2021, or basic and diluted net loss per share of $0.44.

On November 2, 2022 United Therapeutics Corporation (Nasdaq: UTHR), a public benefit corporation, reported its financial results for the quarter ended September 30, 2022 (Press release, United Therapeutics, NOV 2, 2022, View Source [SID1234622764]). Total revenues in the third quarter of 2022 grew 16% year-over-year to $516.0 million, compared to $444.7 million in the third quarter of 2021.

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"We are thrilled to report the highest quarterly revenue in our history," said Martine Rothblatt, Ph.D., Chairperson and CEO of United Therapeutics. "On top of our historic performance, we continue to innovate with the recent launch of the pivotal TETON 2 study of Tyvaso in idiopathic pulmonary fibrosis, which adds to the four other registration studies we have underway."

"We are extremely pleased to have achieved several commercial milestones in the third quarter, highlighted by Tyvaso becoming our first $1 billion annual run rate product," said Michael Benkowitz, President and Chief Operating Officer of United Therapeutics. "Tyvaso DPI has provided a catalyst to our growth trajectory and has us well positioned to achieve our goal of 6,000 patients on Tyvaso by the end of the year."

(1) Net product sales include both the drug product and the respective inhalation devices for both Tyvaso and Tyvaso DPI.

(2) Net product sales include sales of infusion devices, such as the Remunity Pump.

Net product sales from our treprostinil-based products (Tyvaso, Remodulin, and Orenitram) grew by $84.4 million for the third quarter of 2022, as compared to the same period in 2021. The growth in Tyvaso revenues resulted primarily from an increase in quantities sold and, to a lesser extent, the impact of a price increase and lower gross-to-net deductions. The increase in quantities sold was driven by our launch of sales of Tyvaso DPI in June 2022 and continued growth in the number of patients following the Tyvaso label expansion in March 2021 to include the treatment of pulmonary hypertension associated with interstitial lung disease (PH-ILD). The decrease in Remodulin revenues was due to a $6.8 million decrease in international Remodulin net product sales and a $4.6 million decrease in U.S. Remodulin net product sales.

Expenses

Cost of product sales. The table below summarizes cost of product sales by major category (dollars in millions):

Cost of product sales, excluding share-based compensation. Cost of product sales for the three months ended September 30, 2022 increased as compared to the same period in 2021, primarily due to an increase in royalty expense and product costs due to an overall increase in sales.

Research and development expense. The table below summarizes the nature of research and development expense by major expense category (dollars in millions):

(1) External research and development primarily includes fees paid to third parties (such as clinical trial sites, contract research organizations, and contract laboratories) for preclinical and clinical studies and payments to third-party contract manufacturers before FDA approval of the relevant product.

(2) Internal research and development primarily includes salary-related expenses for research and development functions, internal costs to manufacture product candidates before FDA approval, and internal facilities-related expenses, including depreciation, related to research and development activities.

(3) Refer to Share-based compensation below.

(4) Impairments primarily includes impairment charges to write-down the carrying value of in-process research and development and of certain property, plant, and equipment as a result of research and development activities.

(5) Other primarily includes upfront fees and milestone payments to third parties under license agreements related to development-stage products, and adjustments to the fair value of our contingent consideration obligations.

Research and development expense, excluding share-based compensation. Research and development expense for the three months ended September 30, 2022 decreased as compared to the same period in 2021, primarily due to adjustments to the fair value of our contingent consideration obligations.

General and administrative, excluding share-based compensation. The increase in general and administrative expense for the three months ended September 30, 2022, as compared to the same period in 2021, was primarily due to: (1) an increase in branded prescription drug fee expense associated with sales of Tyvaso; and (2) an impairment expense related to property, plant, and equipment.

The increase in share-based compensation benefit for the three months ended September 30, 2022, as compared to the same period in 2021, was primarily due to an increase in STAP benefit driven by an 11 percent decrease in our stock price for the three months ended September 30, 2022, as compared to a three percent increase in our stock price for the same period in 2021.

Other expense, net. The decrease in other expense, net of $17.6 million for the three months ended September 30, 2022, as compared to the same period in 2021, was primarily due to net unrealized and realized gains and losses on equity securities.

Income tax expense. Income tax expense for the three months ended September 30, 2022 and 2021 was $73.2 million and $41.7 million, respectively. The effective income tax rate (ETR) for the three months ended September 30, 2022 and 2021 was 23 percent and 20 percent, respectively. The ETR for the three months ended September 30, 2022 increased compared to the ETR for the three months ended September 30, 2021 primarily due to an increase in the valuation allowance in the current period compared to a decrease in the prior period.

PRODUCT COMMERCIALIZATION UPDATE

Tyvaso DPI. The FDA approved Tyvaso DPI in May 2022 for pulmonary arterial hypertension (PAH) and PH-ILD. Our first commercial shipments to specialty pharmacies occurred in June 2022 and the first patients started Tyvaso DPI therapy shortly thereafter.

Tyvaso Inhalation Solution in PH-ILD. The FDA approved Tyvaso for the PH-ILD indication on March 31, 2021, and we launched commercial efforts for the new indication shortly thereafter. In April 2022, the Centers for Medicare and Medicaid Services updated its Local Coverage Determination (LCD) for Tyvaso to include an indication for PH-ILD. This LCD became effective on June 5, 2022.

Remunity Pump for Remodulin. In February 2021, we launched U.S. commercial sales of the Remunity Pump for Remodulin, which is a pre-filled, semi-disposable system for subcutaneous delivery of treprostinil. The Remunity Pump consists of a small, lightweight, durable pump and separate controller. The Remunity Pump uses disposable cassettes filled with Remodulin, which can be connected to the pump with less patient manipulation than is typically involved in filling other currently-available subcutaneous pumps. The Remunity Pump was initially made available to patients in the United States primarily by contracted specialty pharmacies, with weekly shipments of disposable cassettes pre-filled with Remodulin. In September 2022, we launched a patient-filled version, which enables patients to receive monthly shipments of Remunity cassettes and Remodulin instead of weekly shipments of pre-filled cassettes.

RESEARCH AND DEVELOPMENT UPDATE

Updates on select later-stage programs are below.

Tyvaso in IPF — TETON 1 and TETON 2. We are enrolling two phase 3 studies, called TETON 1 and TETON 2, of Tyvaso for the treatment of idiopathic pulmonary fibrosis (IPF). TETON 1 is being conducted in the United States and Canada, and TETON 2 is being conducted outside the United States and Canada. The primary endpoint of both studies is the change in absolute forced vital capacity (FVC) from baseline to week 52. The TETON 1 study enrolled its first patient in June 2021, and the TETON 2 study enrolled its first patient in October 2022.

The TETON program was prompted by data from the INCREASE study which demonstrated improvements in certain key parameters of lung function in pulmonary hypertension patients with fibrotic lung disease. Specifically, in the INCREASE study, treatment with Tyvaso resulted in significant improvements in percent predicted FVC at weeks 8 and 16, with subjects having an underlying etiology of IPF showing the greatest improvement. Consistent positive effects were also observed in patients with chronic hypersensitivity pneumonitis and environmental/occupational lung disease. In May 2022, data from the INCREASE open-label, long-term extension trial were presented at a medical conference, indicating that improvements in FVC were sustained for at least 64 weeks for IPF patients. For those patients who received placebo during the INCREASE study, marked improvements in FVC were observed following transition to active Tyvaso during the open-label extension study. These data points, combined with substantial preclinical evidence of antifibrotic activity of treprostinil, suggest that Tyvaso may offer a treatment option for patients with fibrotic lung disease.

Ralinepag phase 3 studies — ADVANCE CAPACITY and ADVANCE OUTCOMES. We are enrolling two phase 3 studies to support the potential approval of oral ralinepag for PAH.

Centralized Lung Evaluation System (CLES) for ex-vivo lung perfusion (EVLP). We are evaluating the use of the CLES technology for EVLP through a registration study of 186 lung transplant participants. Enrollment for this study is nearly complete.

Tyvaso in PH-COPD — PERFECT. In September 2022, we discontinued the PERFECT clinical study of Tyvaso for the treatment of WHO Group 3 pulmonary hypertension associated with chronic obstructive pulmonary disease. We terminated the study in accordance with a recommendation of the study’s independent Data Safety Monitoring Committee (DSMC), following a routine safety and efficacy analysis conducted by the DSMC.

WEBCAST

We will host a webcast to discuss our third quarter 2022 financial results on Wednesday, November 2, 2022, at 9:00 a.m. Eastern Time. The webcast can be accessed live via our website at View Source A replay of the webcast will also be available at the same location on our website.

On November 2, 2022 Alligator Bioscience (Nasdaq Stockholm: ATORX) reported the publication of a peer-reviewed article highlighting how bispecific Neo-X-Prime antibodies targeting CD40 and tumor-associated antigens (TAA) represent a promising novel treatment modality with the potential to meet key needs in immuno-oncology (Press release, Alligator Bioscience, NOV 2, 2022, View Source [SID1234622763]).

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The publication in the Journal for ImmunoTherapy of Cancer demonstrates how Alligator´s Neo-X-Prime platform can be used to generate 3rd generation bispecific antibodies with significantly superior anti-tumor effect to the monospecific CD40 antibodies. The results of the study also demonstrated in vitro that the antibodies induced clustering of tumor debris and CD40-expressing cells in a dose-dependent manner and superior T cell priming when added to dendritic cells, and antigen-containing tumor debris or exosomes. Further, the data show that the CD40 x TAA bispecific antibodies induced TAA-conditional CD40 activation both in vitro and in vivo, which shows the potential for a wide therapeutic window for Neo-X-Prime bispecific antibodies.

The full article, entitled "Bispecific antibodies targeting CD40 and tumor associated antigens promote cross-priming of T cells resulting in an anti-tumor response superior to monospecific antibodies", is available in print and online via this link.

The publication of our peer-reviewed study in this renowned scientific journal is a welcome endorsement of the work we are undertaking at Alligator on bispecific CD40 antibodies," said Peter Ellmark, CSO of Alligator Bioscience and one of the study’s authors. "The mechanism we describe demonstrates these antibodies provide a new opportunity to enhance cross-priming of T cells, which has the potential to meet key needs in immuno-oncology by increasing the quantity and quality of tumor specific T cells, while at the same time remodelling the tumor microenvironment through myeloid cell activation to allow for more efficient treatment of cancer patients.

On November 2, 2022 GlaxoSmithKline reported that strong Q3 2022 sales of £7.8 billion +18% AER, +9% CER and Total EPS 255.9p +>100% AER, +>100% CER; Adjusted EPS of 46.9p +25% AER, +11% CER (Press release, GlaxoSmithKline, NOV 2, 2022, View Source [SID1234622762])

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Highlights
Strong commercial execution drives continued sales growth across Specialty Medicines, Vaccines and General Medicines
Specialty Medicines £2.7 billion +36% AER, +24% CER; HIV +19% AER, +7% CER; Oncology +28% AER, +19% CER; Immuno-inflammation and other specialty +29% AER +17% CER; COVID-19 solutions (Xevudy) sales £0.4 billion
Vaccines £2.5 billion +14% AER, +5% CER; Shingrix £760 million +51% AER, +36% CER
General Medicines £2.6 billion +7% AER, +1% CER
Prioritised investment in growth with cost discipline
Total continuing operating margin 15.2%. Total EPS 255.9p >100% AER, >100% CER primarily reflecting the gain from discontinued operations arising on the demerger of the Consumer Healthcare business. Total continuing EPS 18.8p -14% AER, -35% CER
Adjusted operating margin 33.3%. Adjusted operating profit growth +18% AER, +4% CER. This included a contribution to growth from COVID-19 solutions of approximately +1% AER, +2% CER
Adjusted EPS 46.9p +25% AER, +11% CER. This included a contribution to growth from COVID-19 solutions of approximately +1% AER, +3% CER
Q3 2022 continuing cash generated from operations £1.9 billion. Free cash flow £0.7 billion
Continued strengthening of late-stage R&D pipeline with regulatory approvals, positive data read-outs and further complementary business development
US FDA approval for Boostrix maternal and Menveo single-vial presentation. Momelotinib for treatment of
myelofibrosis submitted to US FDA
Positive phase III data for RSV older adults candidate vaccine presented at ID Week 2022. Priority Review granted in the US and regulatory submission acceptance in EU and Japan
Completed Affinivax acquisition on 15 August 2022. Announced exclusive licence agreement with Spero Therapeutics for late-stage antibiotic tebipenem
Phase III data readouts expected in Q4 2022: Jemperli in 1L endometrial cancer, Blenrep in 3L multiple
myeloma and gepotidacin for treatment of uncomplicated urinary tract infection
Growing revenues and improving margin support confidence in outlooks
2022 Guidance raised: expect to deliver growth in sales of between 8% to 10% CER and growth in 2022 adjusted operating profit of between 15% to 17% CER
2022 guidance excludes any contribution from COVID-19 solutions
Dividend of 13.75 declared for Q3 2022. No change to expected dividend from GSK of 61.25p/share for FY 2022
q3 2022 results
Emma Walmsley, Chief Executive Officer, GSK:
"GSK has delivered another quarter of excellent performance, with strong growth in Specialty Medicines, record sales for our shingles vaccine, Shingrix, and further improvements in adjusted operating profit. We are again raising our full-year guidance and expect good momentum in 2023, further strengthening our confidence in our performance outlooks, driven by Shingrix global expansion and expected new launches including our new RSV vaccine. We are also making good progress to strengthen our early-stage pipeline and will continue to invest in targeted business development to build optionality and support growth in the second half of the decade."

On November 1, 2022 AIGEN Sciences reported the company signed a joint research and development agreement with Noveltinobility to develop an artificial intelligence (AI)-based antibody-drug conjugate (ADC) (Press release, AIGEN Sciences, NOV 1, 2022, View Source [SID1234643562]).

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In this joint development, Eisen Science is responsible for designing and synthesizing drugs (payloads) with high selectivity and apoptosis function for cancer cells by applying its own artificial intelligence platform. Noveltinobility is responsible for new ADC design and evaluation of drug efficacy and toxicity using its expertise in antibody new drug development and the payload developed by Eisen Science. The goal of both companies is to develop ADC drugs that increase treatment effectiveness while minimizing side effects.

Eisen Science has a platform technology that can screen and design drugs with new structures that induce transcriptome changes similar to knock down expression of disease targets using transcriptome data-based artificial intelligence technology. The explanation is that through this, off-target side effects of the drug can be minimized.

Novelinobility is an antibody-based innovative new drug development company that has PREXISE-D, a fully human antibody discovery platform using humanized mice (Hu-mice). Novelty is developing pipelines such as single antibodies, ADCs, and double antibodies using antibodies discovered directly using this platform. In addition, Novelty is advancing the ADC linker platform technology PREXISE-L and promoting the development of next-generation ADC through cooperation with biotech companies specialized in developing new drugs for small molecule compounds.

Park Sang-gyu, CEO of Novelinobility, said, "Through cooperation with Igenscience, we have accelerated the development of the next-generation ADC pursued by the company." He added, "If we combine our know-how in developing new antibody drugs with Igenscience’s artificial intelligence platform, we can achieve diverse functionality and excellent drug efficacy." -We expect to be able to develop an ADC with toxicity balance," he said.

Jae-Woo Kang, CEO of Eisen Science, said, "We want to apply artificial intelligence to the development of ADC anticancer drugs through joint development with Nobel Innovation." He added, "The development of a new payload using Eisen Science’s artificial intelligence platform based on transcriptome data is expected to expand the ADC development market. "We expect it to contribute to the expansion," he said.