On November 9, 2022 Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC, NASDAQ: CYCCP; "Cyclacel" or the "Company"), a biopharmaceutical company developing innovative medicines based on cancer cell biology, reported third quarter 2022 financial results and provided a business update (Press release, Cyclacel, NOV 9, 2022, View Source [SID1234623559]).

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"Our recent R&D Day highlighted interim clinical data emerging from our ongoing Phase 1/2 study of oral fadraciclib in solid tumors and lymphoma," said Spiro Rombotis, President and Chief Executive Officer. "We are excited about fadra’s tolerability profile, as well as clear evidence of its anticancer activity as a single agent in late-line patients with lymphoma, gynecological, liver and pancreatic cancers. Moreover, we are seeing this activity during dose-escalation which is designed to evaluate safety. We expect to shortly determine the recommended Phase 2 dose (RP2D) and advance into Phase 2 proof-of-concept stage. We look forward to reporting updated data from our ongoing Phase 1/2 studies of fadraciclib and CYC140 in 2023."

"We have presented progress with our two clinical-stage programs, oral fadraciclib (CDK2/9 inhibitor) and oral CYC140 (PLK1 inhibitor), at our recent R&D Day and the ENA 2022 meeting," said Mark Kirschbaum, M.D., Chief Medical Officer. "In the 065-101 study of oral fadra, we have reached the sixth dose level after observing that fadra was well tolerated in the first five dose levels. Two out of three lymphoma patients achieved partial response and 11/15 patients with cervical, endometrial, hepatocellular and ovarian cancers achieved stable disease with target lesion reductions. A pancreatic patient achieved stable disease for 5 cycles of treatment. In addition, we achieved levels of fadraciclib that are adequate to inhibit CDK2 and CDK9 for approximately 5 to 7 hours per dose on continuous dosing. At our R&D Day, we also reported preliminary data from the first two dose levels of our Phase 1/2 study of oral CYC140 in patients with advanced solid tumors and lymphoma. We were surprised to observe stable disease at the first dose level in an ongoing patient with metastatic, KRAS G12V mutated, non-small cell lung cancer for 6 cycles and a patient with metastatic ovarian cancer for 5 cycles. We believe that CYC140 is differentiated from other PLK1 inhibitors by its PLK-centric kinase profile and by inhibiting BRD4, a validated, epigenetic target in cancer biology."

Key Corporate Highlights

·On October 31, 2022 the Company held an R&D Day (Webcast replay) at which updated clinical and preclinical data on fadraciclib and CYC140 were presented:

Interim results from oral fadraciclib 065-101 Phase 1/2 study in advanced solid tumors and lymphoma

o18 evaluable patients with advanced solid tumors or lymphoma were treated in DL 1-5 (median treatment duration of 2.4 cycles; range 1-5 cycles)
oWell tolerated at all dose levels thus far
o2/3 partial responses (PR) in T-cell lymphoma patients; 4 patients with cervical, endometrial, hepatocellular and ovarian cancer) showed stable disease with target lesion reductions and a pancreatic cancer patient achieved stable disease for 5 cycles
oAchieved target engagement levels predicted to inhibit CDK2 and CDK9 for approximately 5 to 7 hours per dose on continuous dosing
oEnrollment continues at DL6 (150mg twice a day, Monday-Friday, weeks 1-4)
oA principal investigator from Seoul National University Hospital presented preclinical data showing sensitivity to fadra in biliary tract and pancreatic cancer cells obtained from patient specimens

Interim findings from oral CYC140 140-101 Phase 1/2 study in advanced solid tumors and lymphoma

oNo dose limiting toxicities observed to date in the first two doses levels (DL1-2)
oStable disease at dose level 1 in an ongoing patient with metastatic, KRAS G12V mutated, non-small cell lung cancer for 6 cycles and a patient with metastatic ovarian cancer for 5 cycles

·Enrollment continues in the 065-102 study of oral fadraciclib in patients with advanced leukemia.

·The Company will not be pursuing further development of sapacitabine and has advised Daiichi Sankyo Co., Ltd., the licensor, that it wishes to terminate their license agreement for commercial reasons with the termination expected to be effective as of March 23, 2023.

Key Near-Term Business Objectives and Expected Timeline

4Q 2022

·Determine recommended Phase 2 dose (RP2D) with oral fadraciclib from the Phase 1 stage of 065-101 study with oral fadraciclib in patients with advanced solid tumors and lymphoma

1H 2023

·First patient dosed with oral fadraciclib in Phase 2 proof-of-concept stage of 065-101 study in patients with advanced solid tumors and lymphoma

·Report final data from dose escalation stage of 065-101 study with oral fadraciclib in patients with advanced solid tumors and lymphoma

·Report interim data from 140-101 study with oral CYC140 in patients with advanced solid tumors and lymphoma

2H 2023

·Report interim data from initial cohorts in Phase 2 proof-of-concept stage of 065-101 study with oral fadraciclib in patients with advanced solid tumors and lymphoma

·Report interim data from dose escalation stage of 065-102 study with oral fadraciclib in patients with advanced leukemia

·Report final data from dose escalation stage of 140-101 study with oral CYC140 in advanced solid tumors and lymphoma

Financial Highlights

As of September 30, 2022, cash and cash equivalents totaled $23.7 million, compared to $36.6 million as of December 31, 2021. Net cash used in operating activities was $15.7 million for the nine months ended September 30, 2022 compared to $14.0 million for the same period of 2021. The Company estimates that its available cash will fund currently planned programs to the end of 2023. 

Research and development (R&D) expenses were $4.4 million for the three months ended September 30, 2022, as compared to $4.2 million for the same period in 2021. R&D expenses relating to fadraciclib were $2.5 million for the three months ended September 30, 2022, as compared to $3.3 million for the same period in 2021, due to decrease in clinical trial costs of $0.3 million associated with ongoing clinical trials evaluating fadraciclib in Phase 1/2 studies and a reduction of $0.5 million in non-clinical expenditures. R&D expenses related to CYC140 were $1.7 million for the three months ended September 30, 2022, as compared to $0.7 million for the same period in 2021, due to clinical trial costs associated with the CYC140 Phase 1/2 study.

General and administrative expenses for the three months ended September 30, 2022 were $2.1 million, compared to $1.8 million for the same period of the previous year, due to an increase in professional and legal costs.

Total other income, net, for the three months ended September 30, 2022 was $0.4 million, compared to $13,000 for the same period of the previous year. The increase of $0.3 million for the three months ended September 30, 2022, is primarily related to foreign exchange gains.

United Kingdom research & development tax credits were $1.0 million for each of the three months ended September 30, 2022 and September 30, 2021 and are directly correlated to qualifying research and development expenditure.

Net loss for the three months ended September 30, 2022 was $5.1 million, compared to $5.0 million for the same period in 2021. 

On November 9, 2022 MaxCyte, Inc., (NASDAQ: MXCT; LSE: MXCT), a leading, cell-engineering focused company providing enabling platform technologies to advance the discovery, development and commercialization of next-generation cell therapeutics and to support innovative, cell-based research, reported financial results for the third quarter ended September 30, 2022 (Press release, MaxCyte, NOV 9, 2022, View Source [SID1234623558]).

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Third Quarter Highlights

●Total revenue of $10.6 million in the third quarter of 2022, an increase of 5% over the third quarter of 2021.
●Core business revenues grew 22% led by revenue from cell therapy customers which increased 27%, with drug discovery revenues growing by 4%.
●Reiterating 2022 guidance for core business revenue growth to be approximately 30%.
●Expecting SPL Program-related revenue to be approximately $4.0 million for the full year.
●Total cash, cash equivalents and short-term investments were $232.9 million as of September 30, 2022.
"We reported another strong quarter, with 22% year-over-year core business revenue growth, highlighted by 27% growth in revenues from cell therapy customers. We continue to make ongoing investments in the company to drive revenue growth and are focused on increasing customer adoption of our ExPERT platform in the industry, to enable a broad range of cell types and target a wide array of indications. Our strong business performance continues to validate our technology and our market leading position in cell engineering, therapeutic discovery and development and commercialization," said Doug Doerfler, President and CEO of MaxCyte.

"Overall, our SPL pipeline continues to be robust and we are confident in the potential of our customers to develop into future SPL partners with therapeutic programs to generate revenue in clinical and commercial settings. With the expansion into our new headquarters and manufacturing facility, we have increased our in-house manufacturing and process development capabilities to further support our partners as they move forward in clinical development towards potential commercialization."

Third Quarter 2022 Financial Results

Total revenue for the third quarter of 2022 was $10.6 million, compared to $10.1 million in the third quarter of 2021, representing an increase of 5%.

Core business revenue (instruments and disposables to cell therapy and drug discovery customers and excluding program-related revenue) was $9.9 million, including 27% revenue growth from cell therapy customers and 4% from drug discovery customers, compared to core business revenue of $8.1 million in the same period last year.

Our SPL Program-related revenue was $0.8 million, compared to $2.0 million in the third quarter of 2021.

Gross profit for the third quarter of 2022 was $9.3 million (87% gross margin), compared to $9.2 million (91% gross margin) in the same period of the prior year.

Operating expenses for the third quarter of 2022 were $17.0 million, compared to operating expenses of $11.6 million in the third quarter of 2021. The overall increase in operating expenses was primarily driven by increased staff in field sales, field science, and manufacturing, as well as product development expenses to support our customers’ and partners’ growth. The increase also included additional sales and marketing expenses, stock-based compensation and occupancy expenses compared with the same period a year ago.

Third quarter 2022 net loss was $6.4 million compared to net loss of $2.7 million for the same period in 2021. EBITDA, a non-GAAP measure, was a loss of $7.1 million for the third quarter of 2022, compared to a loss of $2.4 million for the third quarter of the prior year. Stock-based compensation expense was $3.2 million for the third quarter versus $2.3 million for the same period in the prior year.

Total cash, cash equivalents and short-term investments were $232.9 million as of September 30, 2022, compared to $255.0 million at December 31, 2021.

2022 Revenue Guidance

We expect core business revenue in 2022 to grow approximately 30% compared to 2021. We continue to expect SPL Program-related revenue to be approximately $4.0 million in 2022.

Webcast and Conference Call Details

MaxCyte will host a conference call today, November 9, 2022, at 4:30 p.m. Eastern Time. Investors interested in listening to the conference call are required to register online. A live and archived webcast of the event will be available on the "Events" section of the MaxCyte website at View Source

About MaxCyte

MaxCyte is a leading, cell-engineering focused company providing enabling platform technologies to advance the discovery, development and commercialization of next-generation cell therapeutics and to support innovative, cell-based research. Over the past 20 years, we have developed and commercialized our proprietary Flow Electroporation technology, which facilitates complex engineering of a wide variety of cells. Our ExPERT platform, which is based on our Flow Electroporation technology, has been designed to support the rapidly expanding cell therapy market and can be utilized across the continuum of the high-growth cell therapy sector, from discovery and development through commercialization of next-generation, cell-based medicines. The ExPERT family of products includes: four instruments,

the ATx, STx GTx and VLx; a portfolio of proprietary related processing assemblies or disposables; and software protocols, all supported by a robust worldwide intellectual property portfolio.

Non-GAAP Financial Measures

This press release contains EBITDA, which is a non-GAAP measure defined as earnings, before interest, tax, depreciation and amortization. MaxCyte believes that EBITDA provides useful information to management and investors relating to its results of operations. The company’s management uses this non-GAAP measure to compare the company’s performance to that of prior periods for trend analyses, and for budgeting and planning purposes. The company believes that the use of EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the company’s financial measures with other companies, many of which present similar non-GAAP financial measures to investors, and that it allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making.

Management does not consider EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of EBITDA is that it excludes significant expenses that are required by GAAP to be recorded in the company’s financial statements. In order to compensate for these limitations, management presents EBITDA together with GAAP results. Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. A reconciliation table of net loss, the most comparable GAAP financial measure, to EBITDA is included at the end of this release. MaxCyte urges investors to review the reconciliation and not to rely on any single financial measure to evaluate the company’s business.

On November 9, 2022 Aprea Therapeutics, Inc. (Nasdaq: APRE), a biopharmaceutical company focused on developing and commercializing novel synthetic lethality-based cancer therapeutics targeting DNA damage response (DDR) pathways today reported financial results for the three and nine months ended September 30, 2022 and provided a business update (Press release, Aprea, NOV 9, 2022, View Source [SID1234623557]).

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"We are excited about the advancement of ATRN-119, the first macrocyclic ATR inhibitor, into clinical development," said Oren Gilad, Ph.D., President and Chief Executive Officer of Aprea. "We look forward to collecting clinical data from our Phase 1 trial."

Third Quarter Financial Results

Cash and cash equivalents: As of September 30, 2022, the Company had $33.1 million of cash and cash equivalents compared to $53.1 million of cash and cash equivalents as of December 31, 2021. The Company believes its cash and cash equivalents as of September 30, 2022 will be sufficient to meet its current projected operating requirements through the end of 2023.
Research and Development (R&D) expenses: R&D expenses were $1.1 million for the quarter ended September 30, 2022, compared to $6.0 million for the comparable period in 2021. R&D expenses for the quarter ended September 30, 2022 primarily represented close out costs for (i) the Company’s pivotal Phase 3 clinical trial of eprenetapopt with azacitidine for the frontline treatment of TP53 mutant MDS, (ii) the Company’s Phase 2 post-transplant MDS/AML clinical trial, (iii) the Company’s Phase 1 AML trial, and (iv) the Company’s Phase 1/2 solid tumor trial and the Company’s Phase 1 dose-escalation trial of APR-548 as well as decreased non-cash stock-based compensation expense resulting from the acceleration of vesting of all outstanding stock options and restricted stock units in connection with the acquisition of Atrin in May 2022.
General and Administrative (G&A) expenses: G&A expenses were $3.1 million for the quarter ended September 30, 2022, compared to $3.4 million for the comparable period in 2021. The decrease in G&A expenses was primarily due to decreased non-cash stock-based compensation expense resulting from the acceleration of vesting of all outstanding stock options and restricted stock units in connection with the acquisition of Atrin in May 2022, offset in part by increased professional fees.
Net loss: Net loss was $4.0 million, or $0.12 per share for the quarter ended September 30, 2022, compared to a net loss of $9.5 million, or $0.45 per share for the quarter ended September 30, 2021. The Company had 52,237,885 shares of common stock outstanding as of September 30, 2022. The increased common stock outstanding resulted primarily from the conversion of 2,821,033 shares of Series A preferred stock into 28,210,330 shares of common stock during the third quarter of 2022.
Business Operations Update:

DDR Programs

ATRN-119 – ATRN-119 is an orally-bioavailable, highly potent and selective macrocyclic small molecule inhibitor of ATR, a protein with key roles in response to DNA damage. The Company is conducting a Phase 1 clinical trial to evaluate ATRN-119 monotherapy in cancer patients with defined genetic mutations. This trial was activated and opened for enrollment in the third quarter of 2022 and the Company expects to open 1-2 additional sites in the fourth quarter of 2022.

ATRN-W1051 – ATRN-W1051 is an orally-bioavailable, highly potent and selective small molecule inhibitor of WEE1, a key regulator of multiple phases of the cell cycle. ATRN-W1051 is currently in preclinical development and the Company anticipates commencing IND-enabling studies in the fourth quarter of 2022.

p53 Reactivator Programs

Eprenetapopt – APR-246, or eprenetapopt, is a small molecule p53 reactivator that has been tested in clinical trials for solid tumors and for hematologic malignancies. We currently have no ongoing clinical trials of eprenetapopt.

APR-548 – APR-548 is a second generation p53 reactivator that is being developed in an oral dosage form. We initiated a Phase 1 clinical trial testing APR-548 in relapsed/refractory MDS and AML and enrollment in the first dosing cohort was completed. There are currently no patients receiving APR-548 in this trial and enrollment into the trial has been closed.

On November 9, 2022 Precigen, Inc. (Nasdaq: PGEN), a biopharmaceutical company specializing in the development of innovative gene and cell therapies to improve the lives of patients, reported third quarter 2022 financial results and progress of clinical programs (Press release, Precigen, NOV 9, 2022, View Source [SID1234623556]).

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"Focusing and prioritizing our portfolio has led to rapid progression of our clinical programs. We are exceptionally pleased with the pace and results we are seeing from our portfolio, especially for the PRGN-2012 AdenoVerse Immunotherapy study in RRP, and are excited to showcase data at an investigator-led virtual R&D event in January. We expect the data will make a compelling case for the potential of PRGN-2012 to address the underserved RRP patient population and provide validation for the highly differentiated, first-in-class AdenoVerse therapeutic platform," said Helen Sabzevari, PhD, President and CEO of Precigen. "We also have multiple data presentations at ASH (Free ASH Whitepaper) in December, which will highlight continued safety and efficacy of the UltraCAR-T platform."

"Precigen continues to exercise financial prudence and we believe our cash runway is sufficient to advance our clinical priorities into Q4 2023," said Harry Thomasian Jr., CFO of Precigen. "Utilizing proceeds from the sale of Trans Ova, through today, we have been able to retire $144.0 million of the outstanding convertible notes due in July 2023. Retiring this debt, combined with our efforts to streamline and improve our operational efficiencies, further strengthens our financial position and significantly reduces our interest burden through the term of the notes."

Key Program Highlights

·PRGN-2012 AdenoVerse Immunotherapy in RRP

oEnrollment (N=15) was completed in the Phase 1 study and patient follow up is ongoing.

oThe Company will host a virtual R&D event in early January 2023, timed to coincide with the 41st Annual JP Morgan Healthcare Conference. The presentation will showcase complete clinical trial data from the Phase 1 dose escalation and expansion cohort of PRGN-2012 AdenoVerse Immunotherapy in RRP and will be led by Clint T. Allen, MD, Senior Investigator, Surgical Oncology Program, Center for Cancer Research, National Cancer Institute (NCI) and lead associate investigator for the PRGN-2012 clinical trial.

oEnrollment is ongoing in the Phase 2 study of PRGN-2012 in adult patients with RRP (clinical trial identifier: NCT04724980) with 16 patients enrolled to date.

o The US Food and Drug Administration (FDA) has granted orphan drug designation for PRGN-2012 for patients with RRP.

oDiscussions with the FDA are ongoing to evaluate various regulatory paths given the high unmet medical need for this patient population.

·PRGN 2009 AdenoVerse Immunotherapy in HPV-associated Cancers

oEnrollment was completed in the Phase 1 monotherapy (N=6) and combination therapy (N=11) arms in patients with recurrent or metastatic HPV-associated cancers (clinical trial identifier: NCT04432597). Patient follow up is ongoing. The Company expects Phase 1 data to be presented in the first half of 2023.

oEnrollment is nearing completion in the Phase 2 monotherapy arm in newly diagnosed oropharyngeal squamous cell carcinoma (OPSCC) patients with 19 of 20 estimated patients enrolled to date. Patient follow up is ongoing.

·PRGN-3006 UltraCAR-T in AML

oEnrollment was completed in the Phase 1 dose escalation cohorts of the Phase 1/1b study. An abstract for the clinical data of the PRGN-3006 Phase 1 study (Abstract# 4633) titled, "Phase 1/1b Safety Study of PRGN-3006 UltraCAR-T in Patients with Relapsed or Refractory CD33-Positive Acute Myeloid Leukemia and Higher Risk Myelodysplastic Syndromes," has been selected for poster presentation at ASH (Free ASH Whitepaper) on December 12, 2022, from 6:00 to 8:00 PM CT.

oThe Phase 1b study of PRGN-3006 UltraCAR-T (clinical trial identifier: NCT03927261) has been expanded to Mayo Clinic in Rochester, Minnesota as the first of several new sites expected as part of the multicenter expansion of the study.

oThe first patient was successfully dosed at the expansion site with PRGN-3006 UltraCAR-T. Site activation activities are in progress at several additional major cancer centers across the US. In addition, the Company has received FDA clearance to incorporate repeat dosing in the Phase 1b expansion phase of the study.

oThe FDA has granted orphan drug designation and fast track designation for PRGN-3006 UltraCAR-T for patients with relapsed or refractory (r/r) AML.

·PRGN-3005 UltraCAR-T in Ovarian Cancer

o Enrollment was completed in the Phase 1 dose escalation cohorts of the intraperitoneal (IP) and intravenous (IV) arms without lymphodepletion as well as in the lymphodepletion cohort in the IV arm (clinical trial identifier: NCT03907527). Patient follow up is ongoing and the Company expects Phase 1 data to be presented in the first half of 2023.

oThe first patient has received a repeat PRGN-3005 dose via IV infusion, following FDA clearance to incorporate repeat dosing in the study.

oEnrollment is ongoing in the Phase 1b expansion study of PRGN-3005 UltraCAR-T at Dose Level 3 with lymphodepletion prior to IV infusion. Site activation activities are in progress at multiple major cancer centers in the US.

·PRGN-3007 UltraCAR-T in Advanced ROR1+ Hematological and Solid Tumors

oPRGN-3007 is based on the next generation UltraCAR-T and incorporates intrinsic PD-1 checkpoint inhibition in addition to the three effector genes (chimeric antigen receptor (CAR), membrane-bound interleukin 15 (mbIL15) and kill switch).

oThe Phase 1/1b umbrella study of PRGN-3007 in advanced receptor tyrosine kinase-like orphan receptor 1-positive (ROR1+) hematological and solid tumors is on track to initiate dosing in the fourth quarter of 2022.

oAn abstract for the PRGN-3007 Phase 1 study (Abstract# 3334) titled, "A Phase1/1b Dose Escalation/Dose Expansion Study of PRGN-3007 UltraCAR-T Cells in Patients with Advanced Hematologic and Solid Tumor Malignancies," has been selected for trial-in-progress presentation at ASH (Free ASH Whitepaper) on December 11, 2022, from 6:00 to 8:00 PM CT.

Third Quarter and First Nine Months 2022 Financial Highlights

·On August 18, 2022, the Company completed the previously announced sale of its wholly-owned subsidiary, Trans Ova Genetics.

·As of November 9, 2022, the Company has successfully retired $144.0 million of the original $200 million convertible notes due in July 2023 at a discount to par.

·Cash, cash equivalents, short-term investments and restricted cash totaled $153.8 million as of September 30, 2022.

·Net cash used in operating activities was $49.6 million during the nine months ended September 30, 2022 compared to $41.2 million during the nine months ended September 30, 2021.

·Selling, general and administrative (SG&A) expenses decreased for both the three and nine months ended September 30, 2022 compared to the prior year periods.

Third Quarter 2022 Financial Results Compared to Prior Year Period

Total revenues increased $13.4 million, or greater than 200%, from the quarter ended September 30, 2021. Collaboration and licensing revenues increased $14.5 million compared to the three months ended September 30, 2021, primarily due to the recognition of revenue related to agreements for which revenue was previously deferred, as it became probable that additional performance under the agreements would not be required. Product and service revenues generated by Exemplar decreased $1.1 million from the quarter ended September 30, 2021. Gross margin on products and services declined as a result of the decreased revenues, and increased costs for supplies, drugs, and personnel costs.

Research and development expenses increased $0.2 million, or 2%, from the three months ended September 30, 2021. Contract research organization costs and lab supplies decreased $0.8 million due to timing differences, the completion of our 1b/2a clinical trial of AG019 in the fourth quarter of the prior year, as well as a continued prioritization of clinical product candidates with less expense incurred related to preclinical research programs for the comparable period. This decrease was partially offset with an increase in salaries, benefits, and other personnel costs of $1.0 million primarily due to an increase in the hiring of employees to support the growth of our operations.

SG&A expenses decreased $0.8 million, or 8%, from the three months ended September 30, 2021. Salaries, benefits, and other personnel costs decreased $0.1 million primarily due to reduced head count. Professional fees decreased $0.6 million, primarily due to decreased legal and consulting fees associated with certain matters.

Loss from continuing operations was $7.6 million, or $(0.04) per basic and diluted share, compared to loss from continuing operations of $26.3 million, or $(0.13) per basic and diluted share, in 2021.

First Nine months 2022 Financial Results Compared to Prior Year Period

Total revenues increased $14.6 million, or 138%, from nine months ended September 30, 2021. Collaboration and licensing revenues increased $14.2 million from the nine months ended September 30, 2021, primarily due to the recognition of revenue related to agreements for which revenue was previously deferred, as it became probable that additional performance under the agreements would not be required. Product and service revenues generated by Exemplar increased $0.6 million from the nine months ended September 30, 2021, with that increase occurring earlier in 2022. Gross margin on product and services remained comparable to the prior year as increased revenues were offset by increased costs for supplies, drugs, and personnel costs.

Research and development expenses increased $0.6 million, or 2%, from the nine months ended September 30, 2021. Salaries, benefits, and other personnel costs increased $2.2 million due to an increase in the hiring of employees to support the growth in the Company’s development activities. This increase was partially offset with a decrease in contract research organization costs and lab supplies of $1.6 million, primarily due to timing differences, the completion of our 1b/2a clinical trial of AG019 in the fourth quarter of the prior year, as well as a continued prioritization of clinical product candidates with less expense incurred related preclinical research programs for the comparable period.

SG&A expenses decreased $3.7 million, or 9%, from the nine months ended September 30, 2021. Salaries, benefits, and other personnel costs decreased $3.6 million primarily due to $2.6 million reduced stock compensation in 2022 and reduced head count.

Loss from continuing operations was $57.6 million, or $(0.29) per basic and diluted share, compared to loss from continuing operations of $84.1 million, or $(0.43) per basic and diluted share, in 2021.

On November 9, 2022 Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688), a patient-focused, innovative, commercial-stage, global biopharmaceutical company, reported financial results for the third quarter of 2022, along with recent product highlights and corporate updates (Press release, Zai Laboratory, NOV 9, 2022, View Source [SID1234623555]).

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"Zai Lab’s third quarter was marked by a new regional and highly synergistic collaboration, strong revenue growth across our commercial products, and significant progress toward achieving our remaining 2022 corporate priorities," said Dr. Samantha Du, Founder, Chairperson and CEO, of Zai Lab. "The company’s strategic positioning with respect to its targeted disease areas provides a robust and synergistic platform to benefit patients in Greater China and around the world as we continue to increase our sales and developmental efforts. Looking ahead, we expect this momentum to be bolstered by our late-stage development candidates that are progressing through pivotal studies and regulatory submissions. As one example, we reached an agreement with the NMPA on the development plan for a bridging study for KarXT in schizophrenia in China. In addition, our recently announced strategic collaboration with Seagen for the license of TIVDAK strengthens our ability to address unmet medical needs in women’s cancer. TIVDAK is the first and only ADC approved in the U.S. for the treatment of adult patients with recurrent or metastatic cervical cancer. Zai Lab is progressing this asset in pivotal studies in China."

Recent Product Developments and Anticipated Milestones

Oncology

ZEJULA (Niraparib)

ZEJULA is an oral, once-daily small-molecule poly (ADP-ribose) polymerase (PARP) 1/2 inhibitor. It is the only PARP inhibitor approved in the United States, the European Union, and China as a first-line maintenance monotherapy for patients with advanced ovarian cancer, regardless of their biomarker status.

Recent Product Highlights

•Throughout this year, the U.S. Food and Drug Administration (FDA) has been reviewing data on PARP inhibitors, and other companies have issued Dear HCP Letters in the U.S. as a result of ongoing discussions with the FDA. In September 2022, Zai Lab partner GlaxoSmithKline (GSK) disclosed that it was in discussions with the FDA to discuss overall survival (OS) data from GSK’s ENGOT-OV16/NOVA phase III clinical trial for adult patients with recurrent ovarian cancer irrespective of the gBRCA mutation. Zai Lab does not expect the FDA’s discussions with GSK to impact its approval from the NMPA for ZEJULA in China. The NMPA’s full approval of ZEJULA in the recurrent ovarian cancer setting is based on a separate study, the NORA study, which is a Phase 3 randomized, double-blind, placebo-controlled study of ZEJULA that the Company independently conducted in China. While the NORA study is not fully mature, to date, favorable trends have been observed in OS irrespective of gBRCA mutation status. We expect to present this data at a future scientific congress. As a result, the Company does not anticipate that its second-line all-comer label in China will be affected by the FDA’s discussions with GSK. The Company also does not expect a change in its first-line label for ZEJULA; the FDA’s discussions with GSK do not apply to this indication.

1

Tumor Treating Fields

Tumor Treating Fields (TTFields) are electric fields that disrupt cancer cell division. Optune and Optune Lua, commercial TTFields devices, are approved or marketed in certain countries or regions for the treatment of newly diagnosed and recurrent glioblastoma and malignant pleural mesothelioma.

Recent Product Highlight

•As of September 30, 2022, Optune has been listed in 72 regional customized commercial health insurance plans guided by provincial or municipal governments (or supplemental insurance plans) since its commercial launch in China in the third quarter of 2020, compared to 25 supplemental insurance plans as of September 30, 2021.

Anticipated 2022 / Early 2023 Partner and Zai Milestones

•Last patient enrollment anticipated in the Phase 3 pivotal METIS study evaluating the efficacy and safety of stereotactic radiosurgery plus TTFields compared to stereotactic radiosurgery alone in patients with brain metastases resulting from Non-small Cell Lung Cancer (NSCLC).

•Top-line results from the Phase 3 pivotal LUNAR study in NSCLC in the early first quarter of 2023. Zai Lab joined the global LUNAR study in April 2021.

QINLOCK (Ripretinib)

QINLOCK is a switch-control tyrosine kinase inhibitor engineered to broadly inhibit KIT- and PDGFRα-mutated kinases. It is the only therapeutic approved in the United States and China for advanced gastrointestinal stromal tumor (GIST) patients who have received prior treatment with three or more kinase inhibitors in the all-comer setting.

Recent Product Highlights

•As of September 30, 2022, QINLOCK has been listed in 96 supplemental insurance plans since its commercial launch in China in May 2021, compared to 28 supplemental insurance plans as of September 30, 2021.

•In August 2022, the recommendation level of QINLOCK for second-line treatments for advanced GIST patients was advanced from Level III to Level II (1A evidence) in the Chinese Society of Clinical Oncology (CSCO) Guidelines for Diagnosis and Treatment of GIST 2022.

Anticipated 2022 Zai Milestone

•Seek National Reimbursement Drug List (NRDL) inclusion for a fourth-line GIST indication.

Adagrasib

Adagrasib is a highly selective and potent oral small-molecule inhibitor of KRASG12C for treating KRASG12C-mutated NSCLC, colorectal cancer (CRC), pancreatic cancer, and other solid tumors.

Recent Product Highlights

•In September 2022, Zai Lab partner Mirati Therapeutics, Inc. (Mirati) presented results from KRYSTAL-1, a multicohort Phase 1/2 study evaluating adagrasib with or without cetuximab in patients with advanced CRC harboring a KRASG12C mutation at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2022.
–Of the evaluable patients in the adagrasib monotherapy cohort (n=43), the investigator assessed confirmed objective response rate (ORR) was 19% (8/43) and the disease control rate (DCR) was 86% (37/43). The median duration of response (DOR) was 4.3 months (95% CI, 2.3–8.3) and median PFS was 5.6 months (95% CI, 4.1–8.3).
–Of the evaluable patients in the adagrasib plus cetuximab combination cohort (n=28), the investigator assessed confirmed ORR was 46% (13/28) and the DCR was 100% (28/28). The median DOR was 7.6 months (95% CI 5.7–NE) and median PFS was 6.9 months (95% CI, 5.4–8.1).
–The prognosis for patients with CRC has historically been poor in later lines of therapy with response rates of approximately 1-2% and median PFS of approximately 2 months in patients with late-line CRC; patients with KRASG12C-mutated CRC tend to have even worse outcomes than the broader CRC patient population.
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–In the overall subset of patients with KRASG12C-mutated CRC evaluated in this study, adagrasib was found to be well-tolerated as a monotherapy and in combination with cetuximab. The majority of observed treatment-related adverse events (TRAEs) were grade 1-2 (59%); no grade 5 TRAEs were observed.

•In August 2022, Zai Lab treated the first patient in Greater China for the global Phase 2 KRYSTAL-7 study of adagrasib in combination with pembrolizumab in first-line KRASG12C-mutated NSCLC patients.

Anticipated 2022 Partner Milestones

•Potential FDA approval and commercial launch in the United States for adagrasib as the treatment for patients with NSCLC harboring the KRASG12C mutation who have received at least one prior systemic therapy; Prescription Drug User Free Act (PDUFA) target action date of December 14, 2022.

•Update for the Phase 2 KRYSTAL-7 study of adagrasib in combination with pembrolizumab in first-line KRASG12C-mutated NSCLC in the fourth quarter of 2022.

•Additional clarity on the regulatory pathway of adagrasib monotherapy in first-line KRASG12C-mutated NSCLC.

Bemarituzumab

Bemarituzumab is a potential first-in-class antibody that is being developed in gastric and gastroesophageal junction (GEJ) cancer as a targeted therapy for tumors that overexpress FGFR2b.

Recent Product Highlight

•Zai Lab partner Amgen continues to enroll patients in several studies of bemarituzumab, including:
–FORTITUDE-101, a Phase 3 study of bemarituzumab plus chemotherapy, versus placebo plus chemotherapy in first-line gastric cancer with FGFR2b overexpression.
–FORTITUDE-102, the Phase 3 portion of the 1b/3 study of bemarituzumab plus chemotherapy and nivolumab versus chemotherapy and nivolumab in first-line gastric cancer with FGFR2b overexpression.

Anticipated 2022 / Early 2023 Zai Milestone

•Initiate a registrational study of bemarituzumab in first-line advanced gastric and GEJ cancer in Greater China.

Odronextamab

Odronextamab is a bispecific antibody designed to trigger tumor killing by linking and activating a cytotoxic T-cell (binding to CD3) to a lymphoma cell (binding to CD20).

Anticipated 2022 Zai Milestone

•Complete enrollment in China in a potentially pivotal Phase 2 study in B-Cell Non-Hodgkin Lymphoma (B-NHL).

Anticipated 2022 Partner Milestone

•Report additional results from the potentially pivotal Phase 2 study in B-NHL.

Repotrectinib

Repotrectinib is a next-generation tyrosine kinase inhibitor (TKI) designed to effectively target ROS1 and TRK A/B/C, with the potential to treat TKI-naïve or TKI-pretreated patients.

Recent Product Highlights

•In October 2022, Zai Lab partner Turning Point Therapeutics (a wholly owned subsidiary of Bristol Myers Squibb Company) provided a clinical data update from the global, registrational Phase 1/2 TRIDENT-1 study of repotrectinib at the 34th EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) (ENA) Symposium 2022.
–Repotrectinib continued to demonstrate meaningful clinical activity in patients with ROS1+ advanced NSCLC, who were TKI-naïve or TKI-pretreated, including with ROS1 G2032R resistance mutation. Durable responses and intracranial efficacy were observed in both TKI-naïve and TKI-pretreated patients.
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–Repotrectinib also continued to show clinical activity in patients with NTRK+ advanced solid tumors who were TKI-naïve or TKI-pretreated, and responses were seen across diverse tumor types.
–Safety is well characterized, manageable with known protocols, and signals potential compatibility with long-term use.

•In October 2022, Zai Lab completed enrollment in China in all cohorts of the registrational Phase 1/2 TRIDENT-1 study.

Anticipated Early 2023 Zai Milestone

•Discuss regulatory pathway with the National Medical Products Administration (NMPA) at a pre-NDA meeting.

CLN-081

CLN-081 is an orally available, irreversible epidermal growth factor receptor (EGFR) inhibitor that selectively targets cells expressing EGFR exon 20 insertion mutations while sparing cells expressing wild type EGFR.

Anticipated 2022 Partner Milestone

•Initiate a pivotal study following the completion of a pharmacokinetic (PK) food effect study.

BLU-945

BLU-945 is a selective and potent investigational inhibitor of the activating EGFR L858R mutation and on-target T790M and C797S resistance mutations, for the potential treatment of EGFR-driven NSCLC.

Recent Product Highlight

•In November 2022, Zai Lab partner Blueprint Medicines presented an update on the Phase 1/2 SYMPHONY trial data supporting plans to develop BLU-945 in combination with osimertinib in first-line EGFR L858R mutation-positive NSCLC.

Autoimmune Disorders

VYVGART (Efgartigimod)

Efgartigimod is an antibody fragment designed to reduce disease-causing immunoglobulin G (IgG) autoantibodies and block the IgG recycling process. It binds to the neonatal Fc receptor (FcRn), which is widely expressed throughout the body and plays a central role in rescuing IgG from degradation.

Recent Product Highlights

•As of November 1, 2022, VYVGART (efgartigimod alfa-fcab) has been listed in 10 supplemental insurance plans in China.

•In September 2022, Zai Lab partner argenx announced the submission of a BLA to the FDA for subcutaneous (SC) efgartigimod for the treatment of generalized myasthenia gravis (gMG) in adult patients.

•In September 2022, argenx also announced that the European Commission (EC) has granted marketing authorization for VYVGART as an add-on to standard therapy for the treatment of adult patients with gMG who are anti-acetylcholine receptor (AChR) antibody positive.

Anticipated 2022 / Early 2023 Zai Milestones

•Launch the proof-of-concept trials in two autoimmune renal diseases.

•Continue to explore and advance additional indications in coordination with argenx.

Anticipated Early 2023 Partner Milestone

•Report topline data from the registrational ADHERE trial of SC efgartigimod for chronic inflammatory demyelinating polyneuropathy (CIDP) in the first quarter of 2023.

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Infectious Disease

NUZYRA (Omadacycline)

NUZYRA is a once-daily oral and intravenous antibiotic for the treatment of adults with community-acquired bacterial pneumonia (CABP) and acute bacterial skin and skin structure infections (ABSSSI). Zai Lab led the China development and obtained approval by the NMPA in December 2021.

Anticipated 2022 Zai Milestone

•Seek NRDL inclusion for CABP and ABSSSI indications.

Sulbactam-Durlobactam (SUL-DUR, Asia Pacific Rights)

Sulbactam-Durlobactam is a beta-lactam/beta-lactamase inhibitor combination that provides unique activity against Acinetobacter organisms, including carbapenem-resistant strains.

Anticipated 2022 / Early 2023 Zai Milestone

•Submit an NDA to the NMPA.

Neuroscience

KarXT

KarXT combines xanomeline, a novel muscarinic agonist, with trospium, an approved muscarinic antagonist. In November 2021, Zai partnered with Karuna Therapeutics, Inc. (Karuna) to develop KarXT in Greater China for the treatment of schizophrenia and possibly other indications like dementia-related psychosis.

Recent Product Highlights

•In September, 2022, Zai Lab obtained agreement from the NMPA on the development plan of a bridging study in schizophrenia in China.

•In October 2022, Zai Lab partner Karuna announced that data from the Phase 3 EMERGENT-2 trial of KarXT in schizophrenia was shared at the 35th European College of Neuropsychopharmacology (ECNP) Congress in Vienna, Austria. A poster presentation and symposium included previously reported efficacy and safety data, as well as new additional safety data from the trial.

•Karuna initiated the Phase 3 ADEPT-1 study evaluating KarXT as a treatment for psychosis in Alzheimer’s disease in the third quarter of 2022.

•Karuna completed enrollment in the Phase 3 EMERGENT-3 trial in schizophrenia in the fourth quarter of 2022.

Anticipated Early 2023 Partner Milestone

•Report topline data from the Phase 3 EMERGENT-3 trial in schizophrenia in the first quarter of 2023.

Global R&D Autoimmune Disorder Programs

ZL-1102 (IL-17 Human VH Antibody Fragment, Global Rights)

ZL-1102 is a novel human VH antibody fragment (Humabody) targeting the IL-17A cytokine with high affinity and avidity. Unlike other anti-IL-17 products, ZL-1102 is being developed as a topical treatment for mild-to-moderate chronic plaque psoriasis (CPP).

Recent Product Highlight

•In September 2022, Zai Lab presented results of the Phase 1 proof-of-concept study for ZL-1102 at the 2022 European Academy of Dermatology and Venereology Congress (EADV) in Milan, Italy.

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Anticipated 2022 / Early 2023 Zai Milestone

•Initiate a global Phase 2 study for CPP.

Global R&D Oncology Programs

Recent Highlight

•In November 2022, Zai Lab presented data from its internal oncology pipeline at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting in Boston, Mass. These presentations focus on two key global discovery programs: ZL-1211, an anti-CLDN18.2 antibody, and ZL-1218, an anti-CCR8 antibody.

Corporate Updates

•In September 2022, Zai Lab entered into a collaboration and license agreement with Seagen, Inc. for the development and commercialization of TIVDAK in Greater China. TIVDAK is the first and only ADC approved in the U.S. for the treatment of adult patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy and is an important addition to our oncology portfolio.

•In the second half of 2022, Zai Lab has continued to enhance its global leadership team. For example, Dr. Peter Huang joined the Company from Zentalis Pharmaceutical in November as Chief Scientific Officer (CSO). Dr. Huang brings to the Company an extensive scientific background and strong leadership and research and development experience, including over 16 years working within the biopharmaceutical industry. Dr. Huang will be a key member of the Company’s executive management team and is responsible for leading and overseeing the Company’s discovery efforts and translational medicine. In addition, Alette Verbeek joined the Company from Novartis in October as SVP, Head of Global Strategic Partnering. She is our first employee based in Europe and is responsible, among other things, for leading our European business development efforts.

•In November 2022, The Stock Exchange of Hong Kong Limited ("Hong Kong Stock Exchange") approved the Company’s transition from a listing under Chapter 18A of the Listing Rules of the Hong Kong Stock Exchange (Biotech Companies) to a general listing under Rule 8.05(3) of the Listing Rules (Qualifications for Listing), as the Company has satisfied applicable revenue and market capitalization requirements for listing outside of Chapter 18A. As a result of this approval, the "B" marker will be removed from the Company’s stock short name on the Hong Kong Stock Exchange, effective November 11, 2022.

Third-Quarter 2022 Financial Results

•For the three months ended September 30, 2022, total revenues were $57.5 million, compared to $43.1 million for the same period in 2021. Net product revenues for the period were $39.2 million for ZEJULA, compared to $28.2 million for the same period in 2021; $10.7 million for Optune, compared to $10.7 million for the same period in 2021; $5.5 million for QINLOCK, compared to $4.3 million for the same period in 2021, and $1.5 million for NUZYRA, compared to nil for the same period in 2021.

•Research and Development (R&D) expenses were $99.5 million for the three months ended September 30, 2022, compared to $55.1 million for the same period in 2021. The increase in R&D expenses was primarily due to the $30.0 million upfront payment for the new collaboration and license agreement with Seagen in the third quarter of 2022, increased expenses related to ongoing and newly initiated clinical trials, and higher payroll and payroll-related expenses from increased R&D headcount and share-based compensation.

•Selling, General and Administrative (SG&A) expenses were $66.6 million for the three months ended September 30, 2022, compared to $59.0 million for the same period in 2021. The increase was primarily due to payroll and payroll-related expenses from increased commercial and general and administrative headcount and share-based compensation as Zai Lab continued to enhance infrastructure and commercial operations in anticipation of new drug approvals and launches. We expect our net product revenue to exceed cost of goods sold and commercial expenses in 2023.

•Net loss was $161.2 million for the three months ended September 30, 2022, compared to $96.4 million for the same period in 2021. The increase in net loss was primarily due to a $30.0 million upfront payment for the new collaboration and license agreement with Seagen and an increase in foreign exchange loss of $36.7 million, which is a non-cash adjustment. Net loss per ordinary share during the three months ended September 30, 2022 was $0.17, compared to $0.10 for the same period in 2021. Net loss per ADS during the three months ended September 30, 2022, was $1.68, compared to $1.01 for the same period in 2021.
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•As of September 30, 2022, cash and cash equivalents, short-term investments, and restricted cash totaled $1,120.3 million, which we expect will provide us with cash runway through 2025.

Conference Call and Webcast Information

Zai Lab will host a live conference call and webcast tomorrow, November 10, 2022, at 8:00 a.m. ET. Listeners may access the live webcast by visiting the Company’s website at View Source Participants must register in advance of the conference call. Details are as follows:

Registration Link: https://register.vevent.com/register/BI98db73679f254c8eb1024c9df5ea85a8

All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a dial-in number, Direct Event passcode, and a unique access PIN, which can be used to join the conference call.

A replay will be available shortly after the call and can be accessed by visiting the Company’s website at View Source