On June 29, 2022 Avid Bioservices, Inc. (NASDAQ:CDMO), a dedicated biologics contract development and manufacturing organization (CDMO) working to improve patient lives by providing high quality development and manufacturing services to biotechnology and pharmaceutical companies, reported financial results for the fourth quarter and full fiscal year, ended April 30, 2022 (Press release, Avid Bioservices, JUN 29, 2022, View Source [SID1234616360]).

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Highlights from the Quarter and Fiscal Year Ended April 30, 2022, and Other Events:

"We made considerable progress during fiscal 2022. During the year, we achieved revenue of $120 million, representing a doubling of revenues recorded in fiscal 2020. Notably, Q4 fiscal 2022 was the eighth consecutive quarter of operational profitability for the company. The company signed net new project orders for $155 million in fiscal 2022, leading to a backlog of $153 million; Avid’s largest backlog to-date. Supporting this growth, as well as that which we anticipate in the coming years, our facilities and service expansions continue to proceed according to plan," stated Nick Green, president and chief executive officer of Avid Bioservices.

"Our momentum in fiscal 2022 was driven in part by the exceptional performance of our enhanced commercial team. Over the last six months, we expanded the sales teams for both our mammalian and our cell and gene therapy businesses. We also expanded our business operations team to best support our growing project pipeline. This new organization has had great success, highlighted by the fact that it signed the same number of new projects in the second half of fiscal 2022 as signed in all of fiscal 2021.

"During the period, our facilities and service expansions continued to advance on a timeline that will allow us to meet the demand of existing customers that are expanding their manufacturing work with us as well as our newest and prospective customers. With respect to our 53,000 square foot cell and gene therapy facility, we recently completed the first phase of a two-phase construction plan, opening our new analytical and process development laboratories eight months to the day after we announced our intention to expand into the cell and gene therapy business. Construction of the CGMP suites for our cell and gene therapy facility, the second phase of this expansion, remains on track and those manufacturing suites are expected to come online in mid-calendar 2023. The expansion of our Myford facility, which houses our mammalian operations, is also being constructed in a two-phase process. As reported last quarter, the company completed the first phase with the opening of a new downstream suite. The second phase of this project is focused on the Myford South facility and is on track to come online at the beginning of calendar year 2023, which at our current growth rate will be ideally timed to provide much needed capacity for fiscal 2024.

"Finally, we are delighted to announce a further expansion of our process development capacity for our mammalian cell business. Once complete at the end of this calendar year, these new suites will double our current process development capacity which came online in October of 2019. This new line will significantly increase capacity at the front-end of our mammalian cell business, which is critical to the efficient on-boarding of new clients. It is expected that this expansion will cost approximately $6 million, and upon completion, will have the potential to generate approximately $20 million in additional revenue capacity.

"Given the growth momentum achieved during fiscal 2022, our significant year-end backlog, and the increase in demand anticipated during fiscal 2023, we are pleased to announce revenue guidance for fiscal 2023 of between $140 and $145 million."

Financial Highlights and Guidance

The company is providing revenue guidance for fiscal 2023 of $140 million to $145 million, a 17% – 21% increase over fiscal 2022.

Revenues for the fourth quarter of fiscal 2022 were $31.2 million, representing a 13% increase compared to $27.6 million recorded in the prior year period. The increase in revenues for the quarter can primarily be attributed to an increase in the scope of in-process and completed manufacturing runs and an increase in process development revenues primarily associated with services provided to new customers as compared to the prior year period. For the 2022 full fiscal year, revenues were $119.6 million, a 25% increase compared to $95.9 million in the prior year period. The increase in revenues for the 2022 full fiscal year, as compared to the prior year period can primarily be attributed to an increase in the number and scope of in-process and completed manufacturing runs, unutilized reserved capacity fees, and process development revenues.

As of April 30, 2022, revenue backlog was $153 million, representing a net increase of 30% compared to $118 million at the end of fiscal 2021. The company expects to recognize the majority of this backlog during fiscal 2023.

Gross margin for the fourth quarter of fiscal 2022 was 22%, compared to a gross margin of 29% for the fourth quarter of fiscal 2021. Factors impacting the gross margin for the quarter were primarily from increases in costs associated with the growth of our business and our facility expansions including compensation and benefit expenses as well as increases in facility and related expenses, partially offset by higher revenues during the period. Gross margin for the 2022 full fiscal year was 31%, consistent with 31% for the prior year period.

Selling, general and administrative expenses ("SG&A") for the fourth quarter of fiscal 2022 were $5.9 million, an increase of 17% as compared to $5.1 million recorded for the fourth quarter of fiscal 2021. The increase in SG&A for the fourth quarter was primarily due to higher compensation and benefit expenses as well as increased facility and related expenses. For the 2022 full fiscal year, SG&A expenses were $21.2 million as compared to $17.1 million for the prior year. The increase in SG&A during the 2022 full fiscal year was primarily due to compensation and benefit expenses, facility and related expenses, advertising costs and legal and accounting fees.

During the fourth quarter of fiscal 2022 we recorded a non-cash income tax benefit of $115 million, or $1.63 per diluted share, due to release of our valuation allowance recorded against the company’s deferred tax assets (DTAs). The company previously maintained a valuation allowance on its DTAs until there is sufficient evidence to support the reversal of all or some portion of these allowances. On a periodic basis, the company reassesses the valuation allowance of its DTAs, weighing all positive and negative evidence, to assess if it is more-likely-than-not that some or all of the company’s DTAs will be realized. As of the fourth quarter of fiscal 2022, the company has demonstrated profitability and cumulative pretax income as well as forecasting revenue growth. After assessing both the positive and negative evidence, the company determined that it was more-likely-than-not that its DTAs would be realized and released the valuation allowance related to federal and state DTAs as of April 30, 2022.

For the fourth quarter of fiscal 2022, the company recorded net income attributable to common stockholders of $115.6 million or $1.87 per basic and $1.65 per diluted share, as compared to a net loss attributable to common stockholders of $2.7 million or $0.04 per basic and diluted share, for the fourth quarter of fiscal 2021. For the 2022 full fiscal year, the company recorded net income attributable to common stockholders of $127.7 million or $2.08 per basic and $1.84 per diluted share, compared to net income attributable to common stockholders of $3.3 million or $0.06 per basic and diluted share, for the 2021 full fiscal year. Excluding the non-cash income tax benefit of $115.0 million recorded during the fourth quarter of fiscal 2022, the company’s net income attributable to common stockholders was approximately $600 thousand or $0.01 per basic and diluted share for the quarter, and $12.7 million or $0.21 per basic and diluted share for the full fiscal year 2022.

The company reported $126.2 million in cash and cash equivalents as of April 30, 2022 compared to $169.9 million as of the prior fiscal year ended April 30, 2021.
More detailed financial information and analysis may be found in Avid Bioservices’ Annual Report on Form 10-K, which will be filed with the Securities and Exchange Commission today.

Recent Corporate Developments

The company’s commercial team signed multiple new project orders during the fourth quarter, totaling approximately net $44 million. For the 2022 full fiscal year, the company signed new project orders totaling approximately net $155 million. These projects span all areas of the business, from process development to commercial manufacturing.

The company continues to make progress with both the Myford South expansion, as well as the construction of its new dedicated cell and gene therapy facility. The company currently expects to complete the second phase of its Myford South expansion, which includes both upstream and downstream CGMP manufacturing suites, during the first quarter of calendar 2023. With respect to the cell and gene therapy business, the company brought its process and analytical development capacity online in mid-June 2022. The company remains on track to bring the CGMP manufacturing suites online in mid-calendar 2023. Please visit the Avid website Facilities page for more information about the company’s expansions and videos documenting progress (View Source).
Statement Regarding Use of Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures such as non-GAAP adjusted net income, free cash flow, as well as adjusted EBITDA. The company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of our operating performance and future prospects, and allow for greater transparency with respect to key metrics used by management in our financial and operational decision making. These non-GAAP financial measures exclude amounts that the company does not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization and our senior management. The company computes non-GAAP financial measures using the same consistent method from quarter to quarter and year to year, and may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

The company reports non-GAAP financial measures in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. generally accepted accounting principles (GAAP). These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. The company believes that non-GAAP financial measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures, and encourages investors to carefully consider our results under GAAP, as well as the supplemental non-GAAP information and the reconciliations between these presentations, to more fully understand our business.

Non-GAAP net income excludes stock-based compensation; business transition and related costs including corporate initiatives into new business activities such as our expansion into viral vectors for the cell and gene therapy sector of the market and other costs directly associated with such activities, and severance and related expenses; non-cash interest expense on convertible senior notes for the accretion of the issuance costs associated with our convertible senior notes; and other income or expense items. Adjusted EBITDA excludes non-cash operating charges for stock-based compensation, depreciation and amortization as well as non-operating items such as interest income, interest expense, and income tax expense or benefit. For the reasons explained above, adjusted EBITDA also excludes certain business transition and related costs. The company also uses measures such as free cash flow, which represents cash flow from operations less cash used in the acquisition and disposition of capital.

Additionally, non-GAAP net income and adjusted EBITDA are key components of the financial metrics utilized by the company’s compensation committee to measure, in part, management’s performance and determine significant elements of management’s compensation. The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP financial measures included at the end of this press release.

Conference Call

Avid will host a conference call and webcast this afternoon, June 29, 2022, at 4:30 PM EST (1:30 PM PST).

To listen to the conference call, please dial (877) 312-5443 or (253) 237-1126 and request the Avid Bioservices conference call. To listen to the live webcast, or access the archived webcast, please visit: View Source

On June 29, 2022 Aileron Therapeutics (Nasdaq: ALRN), a chemoprotection oncology company that aspires to make chemotherapy safer and thereby more effective to save more patients’ lives, reported interim data from its Phase 1b chemoprotection trial of patients with advanced p53-mutated NSCLC undergoing treatment with first-line carboplatin plus pemetrexed with or without immune checkpoint inhibitors (Press release, Aileron Therapeutics, JUN 29, 2022, View Source [SID1234616359]). Aileron plans to stop further enrollment in the NSCLC trial and to apply key learnings from the interim analysis to strengthen the Phase 1b breast cancer trial in accordance with clinical and regulatory precedents.

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The interim analysis consisted of the first 20 patients randomized to ALRN-6924 0.3 mg/kg plus carboplatin/pemetrexed (n=11) or placebo plus carboplatin/pemetrexed (n=9).1,2 ALRN-6924-treated patients were able to stay on chemotherapy treatment longer, completing 93% of the first 4 cycles of carboplatin/pemetrexed administered compared to 78% on placebo.2,3 This imbalance of completed cycles between the treatment arms may have introduced a bias against ALRN-6924 on the composite primary endpoint. The imbalance increases further when looking at percentages of patients completing 6 cycles of treatment (79% on ALRN-6924 versus 57% on placebo). This is reflected in the progression free survival, which was 4.6 months in the ALRN-6924 arm versus 3.2 months in the placebo arm. The composite primary endpoint consisted of the proportion of treatment cycles free of Grade ≥3 neutropenia, Grade ≥3 thrombocytopenia, Grade ≥3 anemia, blood transfusions, and the use of growth factors, as well as dose reductions or dose delays within the first 4 cycles of treatment. ALRN-6924-treated patients demonstrated 56% of cycles free from these Grade ≥3 hematologic toxicities and related events compared to 50% on placebo.

"We remain passionate about advancing ALRN-6924 for patients with p53-mutated cancer, and these interim NSCLC findings have significantly helped to clarify our development path toward that goal. We are very encouraged by the finding that ALRN-6924-treated patients were able to complete more cycles of chemotherapy in the NSCLC trial, but unfortunately it also appears that this may have worked against us given the nature of the exploratory composite primary endpoint. The more cycles patients completed the more opportunity they had to experience toxicities. This introduced an imbalance of toxicities between the active and placebo arms and, may have resulted in a bias against ALRN-6924 on the composite primary endpoint," said Manuel Aivado, M.D., Ph.D., President and CEO of Aileron.

While the ALRN-6924 0.3 mg/kg dose previously demonstrated protection against topotecan-induced hematologic toxicities in Aileron’s small cell lung cancer trial, Aileron believes that a higher dose level could provide more durable cell cycle arrest and, thus more chemoprotection against certain chemotherapies, including carboplatin/pemetrexed. This is supported by the recently generated data from the company’s healthy volunteer study. In that study, serum MIC-1 levels were measured as an indicator of the duration of effect of ALRN-6924, including the duration of cell cycle arrest. Increasing dose levels of ALRN-6924 elicited more durable p53 activation, which correlates with cell cycle arrest in the bone marrow. Cell cycle arrest is a basis for protecting cells from chemotherapy.

Dr. Aivado continued, "By stopping the NSCLC trial, we plan to fully focus our resources on our Phase 1b breast cancer trial to continue our development of ALRN-6924 to protect p53-mutated cancer patients from chemotherapy-induced side effects. Neoadjuvant chemotherapy for breast cancer is associated with frequent severe neutropenia in cycle 1, and we believe this offers a well-established endpoint, which has been used to secure FDA approval of multiple supportive care drugs. This endpoint also obviates any potential imbalance in the number of cycles completed on ALRN-6924 versus placebo. The breast cancer trial also gives us the ability to evaluate protection against alopecia, which occurs in more than 90% of breast cancer patients on neoadjuvant chemotherapy compared to less than 10% of patients receiving carboplatin/pemetrexed."

The learnings from the NSCLC interim analysis create an opportunity for Aileron to take several steps to strengthen the Phase 1b breast cancer trial, including revising the primary endpoint to duration of severe neutropenia in cycle 1 and changing the chemotherapy regimen to a simultaneous administration of doxorubicin plus cyclophosphamide and docetaxel, referred to as TAC. Additionally, the company plans to modify the dosing strategy for the trial and will not further enroll additional patients in the ongoing 0.3 mg/kg and 0.6 mg/kg dose cohorts.

Additional NSCLC Trial highlights (Cycles 1-6)

Of the 83 cycles of carboplatin/pemetrexed administered, Grade ≥3 hematologic toxicities were observed in 25 cycles (30%): 18 cycles with 28 instances4 of hematologic toxicities on ALRN-6924, and 7 cycles with 10 instances of hematologic toxicities on placebo.
One patient receiving ALRN-6924 accounted for 15 of the total 28 Grade ≥3 hematologic instances observed on that arm, or 53%.
Grade 4 events5 were infrequent, occurring in 1 patient on ALRN-6924 and 2 patients on placebo.
5 of 11 patients treated with ALRN-6924 completed 6 planned cycles (45%) versus 1 out of 9 placebo patients (11%).
Frequency of patients experiencing Grade ≥3 hematologic events:
Treatment
(n of patients) Patients with grade≥3
neutropenia
n (%) Patients with grade ≥3
thrombocytopenia
n (%) Patients with grade ≥3
anemia
n (%)
ALRN-6924 (n=11) 5 (45%) 5 (45%) 1 (9%)
Placebo (n=9) 2 (22%) 4 (44%) 2 (22%)

Investor Webcast Details

Aileron will host a conference call and webcast today at 8:00 am ET to discuss these data and the company’s planned strategic prioritization of its breast cancer trial. The conference call can be accessed by dialing 844-838-0770 (United States) or 213-320-2558 (International) with the conference code 3218779. A live webcast may be accessed using the link here, or by visiting the "Events and Presentations" page in the investors section of the Aileron website at www.aileronrx.com. After the live webcast, the event will be archived on the Company’s website for approximately 30 days after the call.

On June 29, 2022 Advaxis, Inc. (Nasdaq: ADXS), a clinical-stage biotechnology company focused on the development and commercialization of immunotherapy products, reported an update on the Phase 1 clinical study evaluating ADXS-504, the company’s off-the-shelf neoantigen drug candidate, in patients with biochemically recurrent (early) prostate cancer that is being conducted at Columbia University Irving Medical Center (Press release, Advaxis, JUN 29, 2022, View Source [SID1234616358]). Karie Runcie, MD, assistant professor of medicine, and Mark N. Stein, MD, associate professor of medicine, in the division of hematology/oncology at Columbia University Vagelos College of Physicians and Surgeons, are the study’s principal and senior investigators, respectively.

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The Phase 1 open-label dose escalation study completed evaluation of the safety and tolerability of the first dose level (DL-1 1e7 CFU) and has initiated enrollment of the second dose level cohort (DL-2 1e8 CFU). In this cohort, ADXS-504 will be administered via infusion every four weeks for a total of six doses, followed by four additional maintenance doses every twelve weeks, in patients with biochemically recurrent prostate cancer, i.e., those with elevation of prostate-specific antigen (PSA) in the blood after radical prostatectomy or radical radiotherapy (external beam or brachytherapy) and who are not currently receiving androgen ablation therapy.

The preliminary clinical assessment of patients at the first dose level has shown that ADXS-504 monotherapy is safe and well tolerated. Clinical and immunogenicity data, including PSA values, for patients in both cohorts will be presented at a future medical conference.

ADXS-504 is a novel Lm-based immunotherapy, bioengineered to elicit T cell responses against 24 tumor antigens, including 14 peptide antigens derived from hotspot mutations in patients with prostate cancer and 10 peptide antigens derived from sequence-optimized tumor-associated antigens (TAAs) that are differentially expressed or overexpressed in prostate cancer. ADXS-504 is designed to express multiple tumor antigen targets, potentially leading to generation of a broad set of effector T cells that may enhance tumor control. Similar to Advaxis’s other Lm-based immunotherapies, ADXS-504 is expected to induce an innate immune response followed by the adaptive response and modification of the immunosuppressive tumor microenvironment (TME) by reducing regulatory T cells (Tregs) and myeloid-derived suppressor cell (MDSC) frequencies in the TME.

Dr. Runcie remarked, "Thus far, patients have only experienced mild and short-lived flu-like symptoms after the infusion of ADXS-504 at the first dose level. We look forward to collecting data at the second dose level to gain further insight into the safety and efficacy of this novel therapy."

Kenneth A. Berlin, President and Chief Executive Officer of Advaxis, said, "We are encouraged by the recent data regarding the safety profile of this new Advaxis’ HOT construct at the first dose level. As ADXS-504 is now being administered to healthier patients with longer life expectancies than to those evaluated in other Lm immunotherapy programs, it is important to have a relatively clean safety profile in this setting," he added. "Safety is an essential component of the regimen in this healthier population, which will now move on to dose level 2 at 1e8 CFU, a level that has also proven to be a relatively safe in our other Lm HOT-program," he concluded.

On June 29, 2022 Adagene Inc. ("Adagene") (Nasdaq: ADAG), a company transforming the discovery and development of novel antibody-based therapies, reported that its board of directors has authorized a share repurchase program under which, Adagene may repurchase up to US$10 million of its ordinary shares in the form of American depositary shares, subject to the relevant rules under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Company’s insider trading policy (such repurchase program, the "2022 Share Repurchase Program") (Press release, Adagene, JUN 29, 2022, View Source [SID1234616357]).

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The Company’s share repurchases, if any, under the 2022 Share Repurchase Program may be made from time to time on the open market at prevailing market prices, in open-market transactions, privately negotiated transactions or block trades, and/or through other legally permissible means, depending on market conditions and in accordance with the applicable rules and regulations. The timing and conditions of the share repurchases will be subject to various factors including the requirements under Rule 10b-18 and Rule 10b5-1 of the Exchange Act. The Company’s board of directors will review the 2022 Share Repurchase Program periodically and may authorize adjustments to its terms and size or suspend or discontinue the program. The Company expects to utilize its existing funds to fund repurchases made under this program.

The Company has disclosed certain details of the repurchases made in accordance with the prior share repurchase program in its annual report for the year ended December 31, 2021 filed with the SEC. See Item 16.E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers on page 212.

The 2022 Share Repurchase Program will be effective upon and from the date on which a formal stock repurchase plan engagement agreement is signed with a qualified broker-dealer(s), and terminates over a twelve-month period depending upon market and economic conditions, and other factors including price, legal and regulatory requirements and capital availability. The 2022 Share Repurchase Program does not obligate Adagene to acquire any particular number of American depositary shares, and the 2022 Share Repurchase Program may be modified or suspended at any time at the management’s discretion.

On June 29, 2022 Abbott (NYSE: ABT) reported that it will announce its second-quarter 2022 financial results on Wednesday, July 20, 2022, before the market opens (Press release, Abbott, JUN 29, 2022, View Source [SID1234616356]).

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The announcement will be followed by a live webcast of the earnings conference call at 8 a.m. Central time (9 a.m. Eastern), and will be accessible through Abbott’s Investor Relations website at www.abbottinvestor.com. An archived edition of the call will be available later that day.