On August 11, 2022 Applied DNA Sciences, Inc. (NASDAQ: APDN) ("Applied DNA" or the "Company"), a leader in PCR-based DNA technologies, reported consolidated financial results for the third quarter of fiscal 2022, ended June 30, 2022 (Press release, Applied DNA Sciences, AUG 11, 2022, View Source [SID1234618136]). The Company’s results are in line with preliminary selected quarterly results issued in the Company’s Form S-1/A filed on August 1, 2022.

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"We executed well in the fiscal third quarter, managing our financial results through COVID-19 testing seasonality inherent to our academia-heavy client base and the implementation of cost management initiatives to optimize our cost structure and reallocate resources towards our strategic growth pillars to drive long-term growth," stated Dr. James A. Hayward, president and CEO of Applied DNA. "Revenues increased substantially year-over-year driven by continued demand for fast, accurate detection of COVID-19 especially considering the high transmissibility of the new sub-variants. Fiscal management remained a key focus, resulting in a 15% sequential decline in total operating expenses and a halving of our average monthly cash burn rate since the beginning of this fiscal year. These organizational adjustments underscore our commitment to our LinearDNA platform’s value-creation potential and to sustainable long-term growth.

"Our performance during the quarter was notable also for the groundwork laid for multiple inflection points over the balance of the current fiscal year and as we look ahead to fiscal 2023," continued Dr. Hayward. "Notably, we ramped up the positioning of our LinearDNA platform as an alternative to plasmids (pDNA) to service the growing global demand for DNA for genetic medicines. We have determined that the platform’s near-term opportunity lies in its use as a replacement for pDNA in the manufacture of mRNA therapeutics. To that end, we recently presented for the first-time key data demonstrating the numerous advantages of using linearDNA to manufacture mRNA at an industry conference. The industry’s receptivity to linearDNA gives us confidence that we are at the right place and at the right time with a cell-free workflow for mRNA manufacture that is potentially more cost-effective and more scalable than pDNA and, in our view, even outpaces our competition in certain use cases. We are moving to cultivate linearDNA supply contracts across the mRNA production spectrum, from therapy developers to contract development and manufacturing organizations.

"At ADCL, we believe the recent receipt of a 12-month contract extension from the City University of New York (CUNY), our largest client for COVID-19 testing services, serves as a solid foundation for continued revenue. Having established ADCL’s workflow with high-throughput COVID-19 testing and with its access to the Company’s DNA expertise, ADCL can develop molecular diagnostics quickly and, we believe, profitably," continued Dr. Hayward. "Our ongoing development of a monkeypox virus test and pharmacogenomics (PGx) panel offers the excellent potential for uplift in ADCL’s profit margin upon commercialization. We are on track to submit the validation package for the monkeypox test in the coming weeks and anticipate the commercial launch of the PGx panel in early 2023, both contingent on the New York State Department of Health (NYSDOH) approval as Laboratory Developed Tests (LDTs). Armed with an approved LDT, ADCL can serve as a reference lab to hospital systems and larger clinical labs in New York State and clinical labs in many other States that accept clinical labs permitted under the NYSDOH Clinical Laboratory Evaluation Program.

"As for our supply chain integrity business, we believe the implementation of the Uyghur Forced Labor Prevention Act (UFLPA) on June 21 is driving the industry’s conversations around regulatory compliance towards our CertainT authentication platform following the Federal government’s recognition of isotopic testing and DNA traceability as evidence of compliance with the UFLPA. CertainT’s layered, technology-first, and forensic approach, we believe, makes it ideally suited to enable customers to withstand the rigor of a Customs and Border Protection inquiry of goods about to enter the U.S. marketplace that can also serve to secure brands’ supply chains and backstop their product claims. We have begun to onboard new CertainT clients for isotopic testing catalyzed by the UFLPA while concurrently pursuing sales opportunities both domestically and internationally catalyzed by the need to differentiate cottons and production from those under the UFLPA’s scrutiny."

Concluded Dr. Hayward, "Subsequent to the close of the quarter, we closed on an equity offering primarily to fund the further development of our LinearDNA platform and support the expansion of ADCL’s diagnostics offering through commercialization. We are focused on advancing the LinearDNA platform to serve as the common denominator for the next generation of DNA-based therapies – beyond mRNA to DNA vaccines and gene and cell therapies. We believe we are well positioned for future growth with a strengthened balance sheet supporting our pivot towards a growing biotherapeutics opportunity."

Third Quarter Fiscal 2022 Financial Highlights:

Revenues increased 153% for the third quarter of fiscal 2022 to $4.3 million, compared with $1.7 million reported in the same period of the prior fiscal year and decreased 30% from $6.1 million for the second quarter of fiscal 2022. The increase in revenues year-over-year was due primarily to an increase in clinical laboratory service revenues from the safeCircle COVID-19 testing platform of $3.1 million. This increase was offset by a decrease in product revenues of approximately $420 thousand due mainly to a decrease in sales of the Linea 1.0 COVID-19 Assay Kit and supplies.
Gross profit for the three months ended June 30, 2022, was $1.0 million, or 24%, compared with $584 thousand and 34% for the same period in the prior fiscal year. The decline in the gross profit percentage was the result of a significant portion of our clinical laboratory service revenues coming from the testing contracts where we also provide and staff the testing centers, as these contracts have higher costs associated with them as compared to our surveillance testing contracts.
Total operating expenses decreased to $3.9 million for the third quarter of fiscal 2022, compared with $4.0 million in the prior-year quarter and decreased from $4.5 million for the second quarter of fiscal 2022. The year-over-year decrease is primarily attributable to a decrease in research and development expenses of approximately $279 thousand, offset by an increase in selling, general and administrative expenses of approximately $130 thousand.
Net loss applicable to common stockholders for the third quarter of fiscal 2022, was $1.1 million, or $0.13 per share, compared with a net loss of $3.4 million, or $0.48 per share, for the prior-year quarter.
Excluding non-cash expenses, Adjusted EBITDA was negative $2.3 million and negative $2.8 million for the third quarters of fiscal 2022 and 2021, respectively. See below for information regarding non-GAAP measures.
Cash and cash equivalents stood at $4.7 million on June 30, 2022, compared with $6.6 million as of September 30, 2021. Cash and cash equivalents do not include the proceeds from a public offering that closed on August 8, 2022, which raised gross proceeds of $12 million and warrant exercises on August 8, 2022, totaling $3.6 million.
Third Quarter Fiscal 2022 Conference Call Information
The Company will hold a conference call and webcast to discuss its third quarter fiscal 2022 financial results today, Thursday, August 11, 2022, at 4:30 PM ET. To participate in the conference call, please follow the instructions below. While every attempt will be made to answer investors’ questions on the Q&A portion of the call, not all questions may be answered.

To Participate:

Telephonic replay (available 1 hour following the conclusion of the live call through August 18, 2022):

Participant Toll Free: 1-877-344-7529
Participant Toll: 1-412-317-0088
Participant Passcode: 7769802
Presentation slides will also be posted to the "News & Events" section of the Applied DNA website at View Source and embedded into the live webcast.

Information about Non-GAAP Financial Measures
As used herein, "GAAP" refers to accounting principles generally accepted in the United States of America. To supplement our condensed consolidated financial statements prepared and presented in accordance with GAAP, this earnings release includes Adjusted EBITDA, which is a non-GAAP financial measure as defined in Rule 101 of Regulation G promulgated by the Securities and Exchange Commission. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information presented in accordance with GAAP. We use this non-GAAP financial measure for internal financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons of the performance and results of operations of our core business. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the performance of our business by excluding non-cash expenses that may not be indicative of our recurring operating results. We believe this non-GAAP financial measure is useful to investors as they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.

"EBITDA"- is defined as earnings (loss) before interest expense, income tax expense and depreciation and amortization expense.

"Adjusted EBITDA"- is defined as EBITDA adjusted to exclude (i) stock-based compensation and (ii) other non-cash expenses.

On August 11, 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 reported financial results for the three and six months ended June 30, 2022 and provided a business update (Press release, Aprea, AUG 11, 2022, View Source [SID1234618135]).

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"This is an exciting time for Aprea as we advance our ATR program into clinical development this year, continue to progress our WEE1 program toward IND submission and leverage our unique discovery platform capabilities to build for future success," said Oren Gilad, Ph.D., President and Chief Executive Officer of Aprea. "We believe our current cash resources will last through the end of 2023 and enable us to execute on our development plan to reach near term clinical milestones."

Second Quarter Financial Results

Cash and cash equivalents: As of June 30, 2022, the Company had $39.1 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 June 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 $6.8 million for the quarter ended June 30, 2022, compared to $6.7 million for the comparable period in 2021. R&D expenses for the quarter ended June 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.
General and Administrative (G&A) expenses: G&A expenses were $15.6 million for the quarter ended June 30, 2022, compared to $3.3 million for the comparable period in 2021. The increase in G&A expenses was primarily due to an increase in 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.
Acquired In-Process Research and Development (IPR&D) expenses: Acquired IPR&D expense was $76.0 million for the quarter ended June 30, 2022. Acquired IPR&D resulted from the Atrin Acquisition in May 2022 which was accounted for as an asset acquisition. The acquisition cost allocated to acquired IPR&D with no alternative future use was recorded as an expense as of the closing date.
Net loss: Net loss was $98.3 million, or $4.34 per share for the quarter ended June 30, 2022, compared to a net loss of $10.3 million, or $0.48 per share for the quarter ended June 30, 2021. The increase in net loss was primarily attributable to the acquired in process research and development of $76.0 million associated with the Atrin acquisition. The Company had 23,401,846 shares of common stock outstanding as of June 30, 2022.
Business Operations Update:

On May 16, 2022 the Company completed the acquisition of Atrin Pharmaceuticals, Inc. ("Atrin"), a privately held biotechnology company focused on the discovery and development of novel therapeutics targeting proteins in the DDR, pathway in oncology through synthetic lethality. Following the Company’s Annual Meeting of Stockholders on July 28, 2022, Christian S. Schade transitioned to the role of Executive Chairman of the Board of Directors and Oren Gilad, Ph.D., assumed the role of Chief Executive Officer.

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. ATRN-119 has received FDA IND approval for a first-in-human clinical trial for cancer patients and this trial is expected to begin in the third 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 we anticipate commencing IND-enabling studies in the second half 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. A manuscript describing the results of a Phase 2 clinical trial of eprenetapopt with azacitidine after allogeneic stem-cell transplantation in TP53 mutant acute myeloid leukemia and myelodyspastic syndromes has recently been published online in the Journal of Clinical Oncology and a manuscript describing results of a Phase 1b clinical trial of eprenetapopt with pembrolizumab in advanced solid tumors has been accepted for publication in ESMO (Free ESMO Whitepaper) Open. We currently have no ongoing clinical trials of eprenetapopt.

APR-548 – APR-548 is a second generation p53 reactivator that is a unique analog of eprenetapopt. APR-548 exhibits high oral bioavailability in preclinical testing and is being developed in an oral dosage form. We initiated a Phase 1 clinical trial testing APR-548 in relapsed/refractory MDS and AML. 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 August 11, 2022 Erasca, Inc. (Nasdaq: ERAS), a clinical-stage precision oncology company singularly focused on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers, reported financial results for the fiscal quarter ended June 30, 2022, and provided business updates (Press release, Erasca, AUG 11, 2022, View Source [SID1234618134]).

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"We continued to advance our development-stage programs this quarter, while also establishing a strong clinical foundation for their future expansion. We also were excited to enter two new clinical partnerships that broaden the clinical potential of ERAS-007 and ERAS-601 and complement our ongoing HERKULES and FLAGSHP-1 trials, respectively," said Jonathan E. Lim, M.D., Erasca’s chairman, CEO, and co-founder. "These partnerships include a second clinical trial collaboration with Eli Lilly to explore cetuximab with our SHP2 inhibitor ERAS-601 in EGFR-driven cancers dependent on RAS/MAPK signaling and a partnership with Dr. Ryan Corcoran at Harvard Medical School and Dr. Scott Kopetz at MD Anderson Cancer Center to evaluate our ERK inhibitor ERAS-007 with a KRAS G12C inhibitor in KRAS G12C-driven non-small cell lung cancer (NSCLC) and colorectal cancer (CRC), which trial is being funded under a grant from Stand Up To Cancer (SU2C)."

Dr. Lim continued, "In the second half of the year, we look forward to providing clinical updates on ERAS-007 and ERAS-601 and expect to file an IND for our central nervous system (CNS)-penetrant KRAS G12C inhibitor ERAS-3490 in KRAS G12C mutant NSCLC. For ERAS-007 and ERAS-601, we expect to report preliminary monotherapy safety and pharmacokinetics data to help inform dose selection and administration for combination regimens, as well as preliminary monotherapy efficacy data for our two lead clinical candidates. With a strong balance sheet and focused therapeutic strategies, we remain on track to execute across our near-term catalysts in the second half of the year and our long-term mission to erase cancer."

Research and Development (R&D) Highlights

Presented Six Poster Presentations at the 2022 AACR (Free AACR Whitepaper) Annual Meeting: In April 2022, Erasca presented six poster presentations supporting the clinical development of programs with best-in-class potential, including ERK1/2 inhibitor ERAS-007, SHP2 inhibitor ERAS-601, and CNS-penetrant KRAS G12C inhibitor ERAS-3490, at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) 2022 annual meeting
Hosted a Key Opinion Leader (KOL) Investor Webinar on AACR (Free AACR Whitepaper) Data: In April 2022, Erasca hosted an investor webinar highlighting its 2022 AACR (Free AACR Whitepaper) presentations and featuring a presentation by KOL Scott Kopetz, M.D., Ph.D., of MD Anderson Cancer Center
Announced Clinical Trial for ERAS-007 and KRAS G12C Inhibitor Combination: In June 2022, Erasca announced a Phase 1b clinical proof-of-concept trial to evaluate the ERK1/2 inhibitor ERAS-007 in combination with a KRAS G12C inhibitor in KRAS G12C-driven NSCLC and CRC in partnership with Ryan Corcoran, M.D., Ph.D., at Harvard Medical School and Scott Kopetz, M.D., Ph.D., at MD Anderson Cancer Center, which trial is being funded under a grant from SU2C

Corporate Highlights

Expanded Board of Directors: In April 2022, Erasca increased the size of its board of directors (the Board) by one director and appointed Jean I. Liu, J.D., to the Board and the audit committee of the Board
Opened New Corporate Headquarters: In April 2022, Erasca opened its new corporate headquarters in San Diego, CA, to accommodate and unify its expanded employee base
Strengthened Clinical, Operational, and Commercial Leadership: In May 2022, Erasca appointed Shannon Morris, M.D., Ph.D., as senior vice president of clinical development, Amy Grekowicz Parker as vice president of clinical operations, and John Lo, Ph.D., as senior commercial advisor and member of Erasca’s newly expanded Research, Development, and Commercial Advisory Board. In August 2022, Erasca appointed Tim Grammer, Ph.D., as vice president of portfolio, program, and alliance management (PPAM). Dr. Grammer brings 20 years of project and program management, portfolio prioritization and planning, and alliance management experience in the life sciences. Most recently, as vice president of program management at Nektar Therapeutics, Dr. Grammer served as global program management lead for the bempegaldesleukin (NKTR-214) program for multiple solid tumors. He holds a Ph.D. in biochemistry from Harvard University, an M.S. in medicine from Harvard, an MBA from the Wharton School at the University of Pennsylvania, and a B.S. in biochemistry from the University of Illinois. He is a certified project management professional (PMP)
Entered into a Clinical Trial Collaboration and Supply Agreement (CTCSA) with Eli Lilly (Lilly): In July 2022, Erasca announced that it had entered into a CTCSA under which Lilly will supply its EGFR inhibitor cetuximab (ERBITUX) at no cost in connection with a clinical proof-of-concept trial evaluating ERAS-601, an oral SHP2 inhibitor, in various combinations including with cetuximab for the treatment of triple wildtype (KRAS/NRAS/BRAF wildtype) metastatic CRC and human papillomavirus (HPV)-negative advanced head and neck squamous cell carcinoma (HNSCC) as part of the ongoing Phase 1/1b FLAGSHP-1 trial. This CTCSA complements the CTCSA we previously entered into with Lilly and Pfizer, respectively, to evaluate cetuximab and encorafenib (BRAFTOVI) in combination with the ERK1/2 inhibitor ERAS-007 in the HERKULES-3 Phase 1b/2 trial
Key Upcoming Milestones

HERKULES-1: Phase 1b/2 trial for ERAS-007/MAPKlamp in patients with advanced solid tumors
Initial Phase 1b monotherapy data expected in the second half of 2022
HERKULES-3: Phase 1b/2 trial for ERAS-007 in patients with gastrointestinal (GI) malignancies
Initial Phase 1b combination data expected in the first half of 2023
FLAGSHP-1: Phase 1/1b trial for ERAS-601 in patients with advanced solid tumors
Initial Phase 1 monotherapy data expected in the second half of 2022
Initial Phase 1b combination data in triple wildtype (KRAS/NRAS/BRAF wildtype) CRC expected in the first half of 2023
HERKULES-2: Phase 1b/2 trial for ERAS-007 in patients with advanced NSCLC
Initial Phase 1b combination data expected in 2023
ERAS-3490: CNS-penetrant KRAS G12C inhibitor
IND filing expected in the second half of 2022

Second Quarter 2022 Financial Results

Cash Position: Cash, cash equivalents, and marketable securities were $390.8 million as of June 30, 2022, compared to $459.2 million as of December 31, 2021. Erasca expects its current cash, cash equivalents, and marketable securities balance to fund operations into the second half of 2024.

Research and Development Expenses: R&D expenses were $27.5 million for the quarter ended June 30, 2022, compared to $17.6 million for the quarter ended June 30, 2021. The increase was primarily driven by expenses incurred in connection with clinical trials, preclinical studies, discovery activities, personnel costs due to increased headcount to support increased development activities, and stock-based compensation. Erasca also recorded $0 and $5.5 million of in-process R&D expense during the quarters ended June 30, 2022 and 2021, respectively, related to the issuance of shares of its common stock issued in connection with the amendment to its license agreement with The Regents of the University of California, San Francisco.

General and Administrative (G&A) Expenses: G&A expenses were $8.4 million for the quarter ended June 30, 2022, compared to $5.1 million for the quarter ended June 30, 2021. The increase was primarily driven by personnel costs, insurance costs, and stock-based compensation.

Net Loss: Net loss was $35.6 million, or $(0.30) per basic and diluted share, for the quarter ended June 30, 2022, compared to $28.2 million, or $(1.20) per basic and diluted share, for the quarter ended June 30, 2021.

On August 11, 2022 SELLAS Life Sciences Group, Inc. (NASDAQ: SLS) ("SELLAS’’ or the "Company"), a late-stage clinical biopharmaceutical company focused on the development of novel therapies for a broad range of cancer indications, reported its financial results for the quarter ended June 30, 2022 (Press release, Sellas Life Sciences, AUG 11, 2022, View Source [SID1234618133]).

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"During the second quarter of 2022, SELLAS continued to progress our pipeline of treatment options to potentially improve and prolong the lives of patients battling cancer, with our lead asset, GPS, achieving several important milestones," said Angelos Stergiou, M.D., Sc.D. h.c., President and Chief Executive Officer of SELLAS. "We reported clinical benefits seen in preliminary data from our Phase 1/2 clinical trial of GPS in combination with the checkpoint inhibitor KEYTRUDA in patients battling WT1+ advanced ovarian cancer as well as encouraging updated clinical data from a Phase 1 investigator-sponsored clinical trial of GPS in combination with another checkpoint inhibitor, OPDIVO, in patients with malignant pleural mesothelioma (MPM). In our Phase 3 REGAL study, we continued enrolling patients and activating additional sites across the United States, Europe, and Asia."

"Additionally, we were pleased to report encouraging preliminary results for our GFH009 program, a novel and highly selective, potentially first and best in class CDK9 inhibitor. Clinical data from the ongoing Phase 1 dose-escalating clinical trial of GFH009 in the United States and China in advanced relapsed and refractory lymphoma and acute myeloid leukemia (AML) shows no dose-limiting toxicities at all dose levels studied to date, while also demonstrating early indications of biological efficacy in assessable patients at multiple dose levels. We are excited by these preliminary results as well as the data from preclinical in vitro studies showing significant inhibition of cancer cell growth in four cell lines announced earlier this week, and we look forward to continuing to study GFH009 to further explore its anticancer effects," concluded Dr. Stergiou.

Pipeline Updates:

Galinpepimut-S (GPS): Wilms Tumor-1 (WT1) targeting peptide immunotherapeutic

Phase 1/2 Study in Combination with KEYTRUDA (pembrolizumab): In May 2022, SELLAS announced top-line clinical data showing clinical benefit from its Phase 1/2 trial of GPS in combination with Merck’s anti-PD-1 therapy, KEYTRUDA, in patients diagnosed with WT1+ relapsed or refractory platinum resistant advanced metastatic ovarian cancer.

Phase 1 Study in Combination with OPDIVO (nivolumab): In June 2022, SELLAS announced encouraging updated clinical data from a Phase 1 investigator-sponsored clinical trial of GPS in combination with the checkpoint inhibitor OPDIVO in patients with MPM who were either refractory to or relapsed after at least one line of the standard of care therapy.

Phase 3 REGAL Study: During the second quarter of 2022, SELLAS continued enrolling patients and activated additional sites in Poland, Greece and Hungary for its registrational global Phase 3 REGAL clinical trial in patients with AML. Enrollment for the study is scheduled to be completed in early in 2023, with an interim analysis planned to occur by the end of the first half of 2023. This timeline is based on current assumptions related to COVID-19 and its impact on the operations of clinical sites, as well as the duration of the pandemic. Because the interim analysis is event driven, it may become available at a different time than currently expected. The Company plans to activate additional sites in the United States and several countries in Europe and Asia throughout the remainder of 2022, including Serbia, Spain, Italy, Poland, Turkey and Taiwan.
GFH009: small molecule, highly selective CDK9 inhibitor

Preclinical In Vitro Studies in Solid Cancer and AML Cell Lines: In early August, the Company announced results from its preclinical in vitro studies in solid cancer and AML cell lines. The data shows that GFH009 demonstrated significant anti-tumor effects in all four selected cell lines with cancer cell growth inhibited by 90 to 100 percent in three out of the four cell lines and by more than 50 percent in the fourth cell line.

Clinical Update on Phase 1 Trial: As of August 1, 2022, enrollment at all originally planned dose levels, administered twice a week, in the AML group (30 mg) and at the 22.5 mg dose level for the lymphoma group was completed. Among the 30 patients evaluable for safety and efficacy, no dose limiting toxicities have been observed. Four lymphoma patients (three at 4.5 mg and one at 9 mg) achieved stable disease (SD). One patient with peripheral T cell lymphoma treated at the 9 mg dose had 62% decrease in sum of the product of the perpendicular diameters for multiple lesions (SPD) based on computed tomography (CT). Two AML patients, one treated at the 9 mg dose level and one treated at the 15 mg dose level, had decreases of bone marrow blasts equal to or greater than 50%.

Phase 1 Clinical Trial Protocol Amendment: The Company announced in July that a second, once-a-week dose cohort has been added in its ongoing Phase 1 clinical trial in both the United States and China to study once-a-week administration starting at the higher dose level of 30 mg which will provide additional data for the safety and efficacy profile for GFH009.
Corporate Updates:

Underwritten Public Offering: On April 5, 2022, the Company closed an underwritten public offering providing gross proceeds of $25.0 million, before deducting underwriting discounts and commissions and offering expenses.

Milestone Payment: The Company received a $1.0 million milestone payment in May 2022 for the approval by China’s National Medical Products Administration (NMPA) of an IND application to initiate the first clinical trial in China for GPS.
Financial Results for the Second Quarter 2022:

Licensing revenue: There was no licensing revenue for the second quarter of 2022 and $1.0 million for the first half of 2022, which related to China’s NMPA approval of an IND application by 3D Medicines. This compares to $1.9 million for the second quarter of 2021 and $7.6 million for the first half of 2021.

R&D Expenses: Research and development expenses for the second quarter of 2022 were $5.5 million, compared to $3.5 million for the same period in 2021. Research and development expenses were $10.1 million for the first half of 2022, compared to $7.7 million for the same period in 2021. The increase was primarily due to an increase in clinical trial expenses related to the Company’s ongoing Phase 3 REGAL clinical trial of GPS in AML patients, a ramp up of the manufacture of clinical trial materials and registration batches of GPS, and personnel related expenses due to increased headcount.

Acquired In-Process Research and Development: There was no acquired in-process research and development for the second quarter of 2022. Acquired in-process research and development was $10.0 million for the first half of 2022, resulting from the in-licensing of GFH009. There was no acquired in-process research and development during the same periods in 2021.

G&A Expenses: General and administrative expenses for the second quarter of 2022 were $3.1 million, as compared to $2.8 million for the same period in 2021. The increase was primarily due to personnel related expenses due to increased headcount. General and administrative expenses were $6.1 million for the first half of 2022, compared to $6.4 million for the same period in 2021. The decrease was primarily due to a decrease in amortization expense associated with the capitalized contract acquisition costs of the 3D Medicines license agreement and a decrease in professional service fees, partially offset by an increase in personnel related expenses due to increased headcount.

Net Loss: Net loss was $8.4 million for the second quarter of 2022, or a basic and diluted loss per share of $0.41, compared to a net loss of $4.6 million for the same period in 2021, or a basic and diluted loss per share of $0.30. Net loss was $25.2 million for the first half of 2022, or a basic and diluted loss per share of $1.39, compared to a net loss of $7.0 million for the same period in 2021, or a basic and diluted loss per share of $0.47.

Cash Position: As of June 30, 2022, cash and cash equivalents totaled approximately $27.0 million.

Upcoming Investor Symposium

The Company will host a virtual investor symposium on Thursday, September 15, 2022, from 1:00 p.m. to 2:00 p.m. ET. The event will focus on the Company’s lead clinical asset, GPS, including the potential commercial opportunity for GPS in AML patients.

For interested individuals unable to join the conference call, a replay will be available through September 29, 2022, at +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International). Participants must use the following code to access the replay of the call: 13730135. An archived version of the webcast will also be available on SELLAS’ Investor Relations site: View Source

On August 11, 2022 Molecular Templates, Inc. (Nasdaq: MTEM, "Molecular Templates," or "MTEM"), a clinical-stage biopharmaceutical company focused on the discovery and development of proprietary targeted biologic therapeutics, engineered toxin bodies (ETBs), to create novel therapies with potent and differentiated mechanisms of action for cancer and other serious diseases, reported financial results and business updates for the second quarter of 2022 (Press release, Molecular Templates, AUG 11, 2022, View Source [SID1234618132]).

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"We are pleased with the progress we are making to advance our potent ETB pipeline of drug candidates which are highly differentiated from Antibody-Drug Conjugates (ADCs), each with a substantial and unique value proposition," said Eric Poma, PhD., Chief Executive and Chief Scientific Officer of Molecular Templates. "We presented six posters on our programs at the 2022 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting, as well as two posters on MT-6402 (PD-L1 ETB with Antigen Seeding Technology) and MT-5111 at the 2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, and we look forward to reporting updates in the second half of the year as we plan to expand our Phase 1 study of MT-6402 in PD-L1+ patients and continue dose-finding in the MT-5111 and MT-0169 programs. We remain on track toward our anticipated IND submission for MT-8421 (CTLA-4 ETB with unique I/O approach) and are executing on additional novel ETB programs targeting TROP2, TIGIT, and BCMA. We also continue to move forward with our collaboration agreement with Bristol Myers Squibb."

Company Highlights and Upcoming Milestones

Corporate

MTEM expects to provide periodic updates on MT-6402, MT-8421, MT-5111, and MT-0169 throughout 2022.
Data presentations are expected at the 2022 Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) and 2022 San Antonio Breast Cancer Symposium (SABC).
MTEM expects to file an IND for MT-8421 (CTLA-4 ETB) at year-end 2022.
MTEM is advancing momentum on the development of its additional ETB candidates (TROP2, TIGIT, and BCMA).
MTEM presented six posters on its pipeline programs at the 2022 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting, which took place April 8 – April 13, 2022 in New Orleans, LA. Copies of the posters presented at AACR (Free AACR Whitepaper) can be accessed here.
MTEM provided a virtual company presentation at H.C. Wainwright Global Investment Conference, which took place May 23-26, 2022.
MTEM presented two posters on MT-6402 (PD-L1 ETB with Antigen Seeding Technology) and MT-5111 (HER2 ETB) at the 2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, which took place June 3-7, 2022 in Chicago, IL. Copies of the posters presented at ASCO (Free ASCO Whitepaper) can be accessed here.
MTEM held a fireside chat at Jefferies Healthcare Conference, which took place June 9, 2022 in New York, NY.
MTEM will provide a virtual company presentation and participate in-person at HC Wainwright 24th Annual Global Investment Conference September 12-14, 2022 in New York, NY.
MTEM will participate at the Morgan Stanley 20th Annual Global Healthcare Conference September 12-14, 2022 in New York, NY.
Dr. Grace Kim was appointed Head of Investor Relations.
ETB Technology

ETBs represent a novel platform for therapeutic development with unique biology. In contrast to Antibody Drug Conjugates (ADCs), ETBs leverage differentiated biology and MoAs which include internalizing or non-internalizing targets, endosomal escape with self-routing to cytosol, enzymatic ribosome inactivation, and cytosolic/ER delivery. ETBs can also alter the immunophenotype of tumor cells through Antigen Seeding technology. MTEM is developing ETBs against validated targets where its differentiated biology may allow for efficacy in a relapsed/refractory setting.

Immuno-Oncology ETBs:

MT-6402 and MT-8421 represent MTEM’s unique approach to immuno-oncology based on dismantling the TME through direct cell-kill of immune cells rather than blocking of ligand-ligand interactions as seen with current antibody therapeutics.

MT-6402 (PD-L1 ETB with Antigen Seeding Technology)

MT-6402 is a 3rd generation ETB designed to induce potent anti-tumor activity via PD-L1 targeting with unique effects that include the dismantling of the tumor microenvironment by directly destroying PD-L1+ immune cells, direct cell-kill of PD-L1+ tumor cells, and immunophenotype alteration of PD-L1+ tumor cells in HLA-A*02 /CMV+ patients.
The Phase 1 study of MT-6402 began in July 2021. It is a multi-center, open-label, dose escalation and dose expansion trial. Patients with confirmed PD-L1 expressing tumors or confirmed PD-L1 expression in the tumor microenvironment (TME) are eligible for enrollment.
As of August 5, 2022, 16 patients with relapsed/refractory tumors that express PD-L1 have been treated to date across three dose cohorts: 16 mcg/kg (n=6), 24 mcg/kg (n=6) and 32 mcg/kg (n=4). Dosing continues with two patients currently enrolled in cohort 4 at 42 mcg/kg.
At the 24 mcg/kg dose, there was a grade 2 dermatitis that resolved rapidly with oral steroids. The patient reported mild pruritus and was rechallenged without incident at the same dose. No other DLTs have been reported. Cohort 3 (32 mcg/kg) was completed with no DLTs. Cohort 4 (42 mcg/kg) has been initiated.
One patient in Cohort 1 (16 mcg/kg) with non-small cell lung cancer (NSCLC) demonstrated tumor regression. This patient was one of two patients with high tumor PD-L1 expression and was also HLA-A*02/ CMV+. Another patient with modest PD-L1 expression of 10% Tumor Proportion Score has remained on treatment with stable disease for greater than nine months.
Following determination of the maximum tolerated dose (MTD), MTEM will plan expansion cohorts to evaluate MT-6402, both as a monotherapy and as a combination approach with a PD-1 inhibitor in tumor-specific and PD-L1 positive basket tumor cohorts.
MTEM continues to observe pharmacodynamic (PD) effects not seen with PD-L1 antibodies and consistent with the dismantling of the TME including PD-L1+ immune cell depletion and T cell activation, as well as cytokine changes in TNF-α, IL-2, and vascular endothelial growth factor (VEGF) in all dose escalation cohorts evaluated to date. The extent and timing of these PD effects appear dose-related with patients in the 24 and 32 mcg/kg cohorts generally showing a more rapid and profound PD effect, including monocyte depletion and T cell activation, potentially in a dose-dependent manner.
PD effects associated with immune activation were seen across the majority of patients irrespective of HLA genotype or level of tumor or immune cell PD-L1 staining. The patient who demonstrated tumor regression was one of two patients treated with high tumor PD-L1 expression and may represent engagement of direct tumor cell-kill and antigen seeding.
MT-8421 (CTLA-4 ETB)

Preclinical data from MTEM’s CTLA-4 program were featured in a poster at the AACR (Free AACR Whitepaper) annual meeting held April 8-13, 2022. In a transgenic mouse model expressing human CTLA-4 and bearing syngeneic subcutaneous tumors, MT-8421 treatment depleted immune suppressive regulatory T cells (Tregs) in the TME.
MT-8421 was well tolerated in a non-human primate toxicology study and achieved serum levels well-above projected IC50 concentrations for Tregs in the TME.
An IND filing for MT-8421 is expected year-end 2022, with clinical studies expected to commence in the second quarter of 2023.
The ETB approach includes potent destruction of CTLA-4+ Tregs via enzymatic ribosome destruction, and the mechanism of cell kill is independent of the TME. There is also preferential activity on high CTLA-4 expressing Tregs in the TME.
Research

MTEM continues to expand its unique approach to immuno-oncology targets with lead optimization ongoing for a TIGIT-targeting ETB and additional exploration around new immuno-oncology targets. TIGIT ETB candidates deplete TIGIT+ immune cells ex vivo and in vivo. Sub-nM potency on TIGIT+ cell lines and reversal of Treg mediated suppression of T-cell proliferation have been seen along with depletion of Tregs in murine TME.
Targeted Solid Tumor ETBs:

MT-5111 (HER2 ETB)

The Phase 1 study of MT-5111 in HER2-positive cancers is ongoing with multiple sites open for enrollment.
The HER2-positive breast cancer expansion cohort was initiated in November 2021 at a dose of 10 mcg/kg.
As of June 2022, 35 patients have been treated with MT-5111 across nine dose escalation cohorts ranging from 0.5 mcg/kg to 17 mcg/kg without any DLTs, including two patients who were treated for six months or longer.
Enrollment in the 23 mcg/kg cohort has been initiated.
Six patients have been treated with breast cancer on the expansion cohort at 10 mcg/kg; three patients have remained on treatment for greater than 28, 16, and 10 weeks, respectively, with stable disease.
One patient with gastric cancer experienced a grade 3 rash at a dose of 23 mcg/kg. The rash subsided to grade 1 with topical steroids and the patient continues to be treated at the same dose. Dose escalation will continue to determine the MTD while the breast cancer expansion cohort collects efficacy and safety data.
To date, no cases of clinically significant cardiotoxicity have been observed in human subjects who have been dosed with MT-5111.
Serum concentration of MT-5111 showed predictable and dose-proportional increasing exposure in the last four evaluable dose cohorts.
Higher MT-5111 doses (6.75 mcg/kg and above) appear to saturate circulating soluble HER2 (sHER2) receptors with patients’ sHER2 levels stabilizing or decreasing at higher doses.
Research

Lead optimization on a 3rd generation ETB targeting TROP-2 continues.
Hematologic Malignancy Targeted ETBs:

MT-0169 (CD38 ETB)

The revised protocol for the ongoing Phase 1 study in patients with relapsed/refractory multiple myeloma (MM) or non-Hodgkin’s lymphoma is now open. One patient with MM has started treatment at 5 mcg/kg. The revised protocol explores a lower dose of MT-0169 to reduce the risk of adverse events observed at the initial dose of 50 mcg/kg and to enable patients to continue MT-0169 therapy for a longer duration that may drive tumor benefit. The robust and rapid NK cell depletion that was observed at the starting dose of 50 mcg/kg is expected to be observed at lower doses, based upon IC50 in vitro data.
MTEM is opening new sites for the Phase 1 study and enrollment resumed in July 2022.
Research

Lead optimization on BCMA continues.
Financial Results

The net loss attributable to common shareholders for the second quarter of 2022 was $24.4 million, or $0.43 per basic and diluted share. This compares with a net loss attributable to common shareholders of $15.6 million, or $0.28 per basic and diluted share, for the same period in 2021.

Revenues for the second quarter of 2022 were $4.4 million, compared to $15.1 million for the same period in 2021. Revenues for the second quarter of 2022 were comprised of revenues from collaborative research and development agreements with Bristol Myers Squibb.

Total research and development expenses for the second quarter of 2022 were $21.4 million, compared with $21.1 million for the same period in 2021. Total general and administrative expenses for the second quarter of 2022 were $6.6 million, compared with $8.9 million for the same period in 2021.

As of June 30, 2022, MTEM’s cash and investments totaled $104.4 million. MTEM’s current cash and investments are expected to fund operations to the end of 2023.

For more details on MTEM’s financial results for the second quarter 2022, refer to Form 10Q filed with the SEC.