Exact Sciences Advances Innovative Cancer Technologies and Approaches Through Visionary Collaborations

On June 21, 2023 Exact Sciences Corp. (NASDAQ: EXAS), a leading provider of cancer screening and diagnostic tests, reported separate collaborations with two renowned healthcare organizations at the forefront of cancer research (Press release, Exact Sciences, JUN 21, 2023, View Source [SID1234632822]). The agreements aim to improve patient care by increasing access to genomic information. Combining cutting-edge technologies with expertise from thought leaders at Broad Institute of MIT and Harvard and Baylor Scott & White, Exact Sciences will provide smarter answers before diagnosis and throughout cancer treatment.

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"These collaborations mark a significant milestone in Exact Sciences’ pursuit to eradicate cancer," said Jorge Garces, Chief Science Officer at Exact Sciences. "Our combined efforts will unlock new insights into the complexities of cancer. We hope to enable preventive measures and treatments that address the unique needs of each patient to maximize their chances of achieving positive outcomes."

Agreements with Broad Institute of MIT and Harvard provide e xclusive license to next-generation technology for ultra-sensitive detection of molecular residual disease and ongoing research

Exact Sciences and Broad Institute have entered into a 5-year sponsored research agreement and an exclusive license agreement to utilize Minor Allele Enriched Sequencing Through Recognition Oligonucleotides (MAESTRO) as its molecular residual disease diagnostic testing platform. MAESTRO is a next-generation circulating tumor DNA technology that can detect thousands of patient-specific mutations using minimal sequencing and advanced bioinformatics, creating a scalable test platform for enhanced detection of molecular residual disease. The Broad Institute is globally recognized for leading innovations in the field of genomics and next-generation sequencing methodology. MAESTRO was developed at the Broad Institute’s Gerstner Center for Cancer Diagnostics which is focused on breakthrough innovations for significant unmet needs in cancer diagnostics.

Collaboration with Baylor Scott & White creates real-world experience and evidence supporting Exact Sciences’ multi-cancer early detection (MCED) approach

Exact Sciences and Baylor Scott & White (BSW) have entered an agreement to establish the Texas Multicancer Early Detection Registry program, including implementation of Exact Sciences’ MCED test within a subset of BSW primary care clinics. As part of the program, Exact Sciences will generate real-world evidence related to MCED testing in a clinical setting and provide comprehensive support to patients, ordering providers, and clinical staff. The program aims to provide about 50,000 testing opportunities over three years, helping optimize the clinical workflows of MCED testing. The collaboration will also generate data to support discussions with regulatory agencies, payers, and guideline bodies.

Investor Day

On June 21, 2023 Exact Sciences presented its corporate presentation (Presentation, Exact Sciences, JUN 21, 2023, View Source [SID1234632821]).

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DiaMedica Therapeutics Announces $37.5 Million Private Placement

On June 21, 2023 DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage biopharmaceutical company focused on developing novel treatments for neurological disorders and kidney diseases ("DiaMedica" or the "Company"), reported that it has entered into definitive agreements to sell its common shares in a private placement with accredited investors (Press release, DiaMedica, JUN 21, 2023, View Source [SID1234632820]). The transaction is expected to result in gross proceeds of $37.5 million.

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Pursuant to the terms of the securities purchase agreements, the Company will issue a total of 11,011,406 common shares at a purchase price of $3.40 per share, equal to the average per share closing price of the Company’s common shares for the five trading days ended June 20, 2023, except in the case of DiaMedica management who agreed to a higher purchase price of $3.91 per share, equal to the closing sale price of the Company’s common shares on June 20, 2023. The private placement is expected to close on or about June 23, 2023, subject to the satisfaction of customary closing conditions.

The Company expects to use the net proceeds from the private placement to continue its clinical and product development activities for DM199, including its pivotal Phase 2/3, ReMEDy2 clinical trial, and for other working capital and general corporate purposes. The Company believes that with the addition of this funding, the Company’s cash resources will be sufficient to fund the Company’s ReMEDy2 trial through the completion of the interim analysis.

Earlier today, DiaMedica also announced that the U.S. Food and Drug Administration ("FDA") has removed the clinical hold on the Company’s Phase 2/3 ReMEDy2 clinical trial studying the use of the Company’s product candidate, DM199, to treat acute ischemic stroke patients.

Craig-Hallum Capital Group LLC acted as the placement agent for the private placement investment by certain of the investors. Lake Street Capital Markets, LLC acted as financial advisor to the Company. Fox Rothschild LLP and Pushor Mitchell LLP acted as counsel to DiaMedica in the private placement and Mintz Levin acted as counsel for certain investors in the private placement.

The offer and sale of the foregoing securities in the private placement have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or any state or other applicable jurisdiction’s securities laws, and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state and other securities laws. The Company has agreed to file a registration statement with the U.S. Securities and Exchange Commission registering the resale of the common shares issued in the private placement.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the foregoing securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Delcath Systems Reports Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)

On June 21, 2023 Delcath Systems, Inc. (Nasdaq: DCTH) (the "Company" or "Delcath"), an interventional oncology company focused on the treatment of primary and metastatic cancers of the liver, reported that the Company granted equity awards, previously approved by the Company’s Compensation Committee and the Board of Directors, as a material inducement to employment for two individuals, the Chief Medical Officer, Vojislav Vukovic, and the Principal Accounting Officer and Principal Financial Officer, Sandra Pennell (Press release, Delcath Systems, JUN 21, 2023, View Source [SID1234632819]).

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Mr. Vukovic received a total of 150,000 shares of the Company’s common stock, outside of the Company’s Omnibus 2020 Equity Incentive Plan, as amended ("Plan"). The options were issued upon the employee’s grant date, and all stock options included within the equity inducement award have an exercise price equal to the closing price of Delcath common stock on the grant date with ten-year terms. One-third of the options will vest on the first anniversary of the grant date with the remaining two-thirds of the options vesting in equal monthly installments over the following twenty-four months.

Ms. Pennell received a total of 100,000 shares of the Company’s common stock, outside of the Plan. The options were issued upon the employee’s grant date, and all stock options included within the equity inducement award have an exercise price equal to the closing price of Delcath common stock on the grant date with ten-year terms. One-third of the options will vest on the first anniversary of the grant date with the remaining two-thirds of the options vesting in equal monthly installments over the following twenty-four months.

The above-described awards were each granted in accordance with NASDAQ Listing Rule 5635(c)(4), and were granted pursuant to the terms of the Plan.

Avid Bioservices Reports Financial Results for Fourth Quarter and Fiscal Year Ended April 30, 2023

On June 21, 2023 Avid Bioservices, Inc. (NASDAQ:CDMO), a dedicated biologics contract development and manufacturing organization (CDMO) working to improve patient lives by providing high quality development and manufacturing services to biotechnology and pharmaceutical companies, reported financial results for the fourth quarter and full fiscal year ended April 30, 2023 (Press release, Avid Bioservices, JUN 21, 2023, View Source [SID1234632818]).

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Highlights from the Quarter Ended April 30, 2023, and Other Events:

"Fiscal 2023 was a record-setting year, with Avid recording its highest single quarter revenue, its highest annual revenue, and ending the year with its largest backlog to-date," stated Nick Green, president and CEO.

"Our business development team continues to execute, generating net fourth quarter bookings of $55 million, and as a result, we ended fiscal 2023 with a new record-high backlog of $191 million.

"In operations, our mammalian cell manufacturing and process development facility expansions are now in full operation and we are actively working on customer projects. We continue to make progress with our cell and gene therapy facility ("CGT Facility") and remain on schedule to bring this online later this calendar year.

"We are pleased to begin fiscal 2024 with a strong backlog and a mature pipeline. Having said that, we acknowledge today’s challenging macro-economic conditions and their impact on the biotech sector. Accordingly, we feel compelled to broaden our revenue guidance for fiscal year 2024 to between $145 million to $165 million. We do note, however, that the industry’s focus on late-phase and commercial projects should benefit Avid’s long-term growth prospects, as we are one of a small number of biotech CDMOs with extensive experience manufacturing approved biologics. This is evidenced by the contribution made to our backlog by late phase projects (defined as Phase III and PPQ campaigns) increasing by 34% in fiscal 2023 over the prior fiscal year."

Financial Highlights and Guidance

· The company is providing revenue guidance for fiscal year 2024 of between $145 million and $165 million.

· Revenues for the fourth quarter of fiscal 2023 were $39.8 million, representing a 28% increase compared to $31.2 million recorded in the prior year period. For the 2023 full fiscal year, revenues were $149.3 million, a 25% increase compared to $119.6 million in the prior year period. For both the quarter and the fiscal year, the increase in revenues can primarily be attributed to increases in manufacturing runs and process development services provided to new customers.

· As of April 30, 2023, the company’s revenue backlog was $191 million, representing an increase of 25% compared to $153 million at the end of the fourth quarter of fiscal 2022. The company expects a growing portion of the backlog will extend beyond a year.

· Gross margin for the fourth quarter of fiscal 2023 was 21%, and in-line as compared to a gross margin of 22% for the fourth quarter of fiscal 2022. Gross margin for the 2023 full fiscal year was 21%, compared to a gross margin of 31% for the same period during fiscal 2022. During the three and twelve months ended April 30, 2023, as compared with the same prior year periods, our labor, overhead, and depreciation expenses increased primarily due to the hiring of personnel and additional facility, equipment and related costs ahead of our mammalian and cell and gene therapy CGMP facility expansions. This decrease in margin was partially offset by a current year period benefit to margin from revenue associated with a change in variable consideration under a contract where uncertainties have been resolved. In addition, the same period in the prior year included a margin benefit from unutilized capacity fees. Excluding these factors, our fourth quarter and fiscal year adjusted gross margin would have been six percentage points and three percentage points higher, respectively, than the adjusted gross margin would have been in the same prior year periods.

· Selling, general and administrative ("SG&A") expenses for the fourth quarter of fiscal 2023 were $7.6 million, an increase of 29% compared to $5.9 million recorded for the fourth quarter of fiscal 2022. SG&A expenses for 2023 full fiscal year were $27.9 million, an increase of 32% as compared to $21.2 million recorded in the same prior year period. The increases in SG&A for both the fourth quarter and full fiscal year were primarily due to increases in compensation and benefits, legal, accounting, and other professional expenses.

· During the fourth quarter of fiscal 2022, Avid recorded a non-cash income tax benefit of $115 million, or $1.63 per diluted share, due to release of the company’s valuation allowance recorded against the company’s deferred tax assets ("DTAs"). The company previously maintained a valuation allowance on its DTAs until there was sufficient evidence to support the reversal of all or some portion of those allowances. During the prior year fourth quarter, the company determined that it was more-likely-than-not that its DTAs would be realized and released the valuation allowance related to federal and state DTAs as of April 30, 2022.

For the fourth quarter of fiscal 2023, the company recorded a net loss of approximately $0.3 million or $0.00 per basic and diluted share, as compared to net income of $115.6 million or $1.87 per basic and $1.65 per diluted share, for the fourth quarter of fiscal 2022. For the 2023 full fiscal year, the company recorded net income of approximately $0.6 million or $0.01 per basic and diluted share, as compared to net income of $127.7 million or $2.08 per basic and $1.84 per diluted share, respectively, during the same prior year period.

· Avid reported $38.5 million in cash and cash equivalents as of April 30, 2023, compared to $126.2 million as of April 30, 2022.

More detailed financial information and analysis may be found in Avid Bioservices’ Annual Report on Form 10-K, which will be filed with the Securities and Exchange Commission today.

Recent Corporate Developments

· The company’s commercial team signed multiple new orders during the fourth quarter, totaling approximately $55 million net. These orders are with new and existing customers, and span all areas of the business, from process development to commercial manufacturing.

· During fiscal 2023, the company completed and opened each of its mammalian expansion projects in the same quarter as backlog equaled or exceeded prior capacity. As a result, the company transitioned to a fully disposable platform with more than 20,000 liters of state-of-the-art capacity. The company’s remaining expansion project is the build-out of its new CGT Facility, which will support early-stage development through commercial manufacturing. The company has already launched analytical and process development capabilities at this facility and remains on track to launch the CGMP manufacturing suites by the end of the third quarter of calendar 2023.

· As previously reported, on March 14, 2023, the company entered into a credit agreement (the "Credit Agreement") with certain guarantors, certain lenders and Bank of America, N.A., as administrative agent and letter of credit issuer. The Credit Agreement provides for a revolving credit facility (the "Credit Facility") in an amount equal to the lesser of (i) $50 million, and (ii) a borrowing base calculated as the sum of (a) 80% of the value of certain eligible accounts of the company, plus (b) up to 100% of the value of eligible cash collateral. The Credit Facility will mature on March 13, 2024 and is secured by substantially all the assets of the company. Loans under the Credit Facility will bear interest on the outstanding principal, at either (1) a term secured overnight financing rate ("SOFR") for a specified interest period plus a SOFR adjustment (equal to 0.10%) plus a margin of 1.40% or (2) base rate plus a margin of 0.40% at the option of the company. Should the company obtain any loans under the Credit Facility, the proceeds are expected to be used for general corporate purposes.

Statement Regarding Use of Non-GAAP Financial Measures

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

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

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

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

Webcast

Avid will host a webcast this afternoon, June 21, 2023, at 4:30 PM EDT (1:30 PM PDT).

To listen to the live webcast, or access the archived webcast, please visit: View Source