On August 8, 2023 Recursion (Nasdaq: RXRX), a leading clinical stage TechBio company decoding biology to industrialize drug discovery, reported business updates and financial results for its second quarter ending June 30, 2023 (Press release, Recursion Pharmaceuticals, AUG 8, 2023, View Source [SID1234633988]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"As the world continues to undergo a revolution in artificial intelligence and computation, Recursion is leading the TechBio sector with one of the most advanced technology-enabled drug discovery platforms in the industry," said Chris Gibson, Ph.D., Co-Founder and CEO of Recursion. "Our recent acquisitions of Cyclica and Valence and our new partnership with NVIDIA bring industry-leading capabilities to our platform that have already delivered significant value across our pipeline and partnerships. With multiple clinical catalysts in the coming quarters, the extraordinary progress in our technology, and the commitment of our teams, Recursion is making its vision of industrialized drug discovery real day by day."

Summary of Business Highlights
•Pipeline
◦Cerebral Cavernous Malformation (CCM) (REC-994): Our Phase 2 SYCAMORE clinical trial is a double-blind, placebo-controlled safety, tolerability and exploratory efficacy study of this drug candidate in participants with CCM.

This study was fully enrolled as of June 2023 with 62 participants and all participants who have thus far finished their first year of treatment have enrolled in the long-term extension study. We expect to share Phase 2 proof-of-concept data in H2 2024.
◦Neurofibromatosis Type 2 (NF2) (REC-2282): Our Phase 2/3 POPLAR clinical trial is a two part study of REC-2282 in participants with progressive NF2-mutated meningiomas. Part A of the study is ongoing and is exploring two doses of REC-2282 in approximately 23 adults and 9 adolescents.We expect to share Phase 2 safety, tolerability, pharmacokinetics and preliminary efficacy in H2 2024.
◦Familial Adenomatous Polyposis (FAP) (REC-4881): We have enrolled multiple participants in our TUPELO clinical trial which evaluates REC-4881 in patients with FAP. We are now providing guidance on a data readout and expect to share Phase 2 safety, tolerability, pharmacokinetics and preliminary efficacy in H1 2025.
◦AXIN1 or APC Mutant Cancers (REC-4881): We will evaluate REC-4881 in a Phase 2 biomarker enriched study in patients with unresectable, locally advanced or metastatic cancer with AXIN1 or APC mutations. The IND was accepted by the FDA and we expect to initiate this Phase 2 study in Q4 2023.
◦Clostridioides difficile Infection (REC-3964): Our Phase 1 clinical trial is a first-in-human protocol evaluating single and multiple doses of REC-3964 in healthy volunteers and will assess the safety, tolerability and pharmacokinetic profile of REC-3964. Single ascending dose and multiple ascending dose studies are now complete. REC-3964 has been well tolerated and no safety issues have been identified to date. We expect to share Phase 1 safety and pharmacokinetics data in Q3 2023.
◦RBM39 HR-Proficient Ovarian Cancer: RBM39 (previously identified as Target Gamma) is a novel CDK12-adjacent target identified by the Recursion OS. We believe we can modulate this target to produce a therapeutic effect in HR-proficient ovarian cancer and potentially in other tumor types. This program is in the preclinical stage and IND-enabling studies are progressing.
•Partnerships
◦NVIDIA: In July 2023, we announced a $50 million investment and collaboration with NVIDIA. We will continue to build our own foundation models for biology and chemistry and NVIDIA will assist in optimizing these models, provide priority access to computational resources on NVIDIA’s cloud service DGX Cloud, and potentially host commercially-licensable machine learning and foundation models developed by Recursion on BioNeMo, NVIDIA’s marketplace for generative AI in drug discovery. In this partnership, we will maintain control of our proprietary data and models as well as how and where we could host our technology tools as we expand our business strategy of data as a value driver. Since the announcement in July, we have already deployed our digital chemistry technology together with NVIDIA’s computational resources to predict the ligand-protein interactions for approximately 36 billion compounds in the Enamine REAL Space, reported to be the world’s largest searchable chemical library, where we evaluated 2.8 quadrillion target-compound pairs.

◦Roche-Genentech and Bayer: We continue to advance our collaborations to discover potential new therapeutics with our strategic partners Roche-Genentech and Bayer. In the near-term, there is the potential for option exercises associated with partnership programs or option exercises associated with map building initiatives or data sharing.
•Platform
◦Digital Chemistry and Generative AI Capabilities: In May 2023, we acquired Cyclica and Valence Discovery to bolster our digital chemistry and generative AI capabilities and drive value across our pipeline, partnerships, and platform. Shortly after closing these acquisitions, we used Cyclica’s digital chemistry tools to predict the protein-ligand interactions for the over 1 million compounds in our internal, non-partnered chemical library. Now, less than one quarter after the closing of these acquisitions, we worked with our partners at NVIDIA to predict the protein-ligand interactions of approximately 36 billion compounds in the Enamine REAL Space, reported to be the world’s largest searchable chemical library.
◦Accelerating Pipeline and Partnership Value: For our internal pipeline, we have used our digital chemistry tools to deconvolve proteome-wide biological targets to confirm that certain compounds operate through a novel mechanism of action which was previously predicted by our functional phenomics maps. Such proteomic mapping capabilities provide an additional data layer to efficiently identify the most promising novel chemical series.
◦Foundation Model Construction: We continue to use our supercomputer, BioHive-1, to train a proprietary phenomics foundation model. As we have trained on larger quantities of our proprietary data, emergent properties have arisen out of the models and we have seen significant improvements over previous deep learning production models. We are also in the early stages of exploring more powerful and broadly useful foundation models based on our large-scale proprietary multi-omics data, which includes phenomics across 50 human cell types and approximately 1.7 million compounds, multi-timepoint live-cell microscopy, transcriptomics, proteomics, inVivomics, multi-target compound interactions, physicochemical properties, as well as predicted protein-ligand relationships. We may explore commercial licensing of some of our models in collaboration with NVIDIA and their BioNeMo platform in the coming year, though our state-of-the-art models will only be available to our team and close partners.
◦Large Language Models: One year ago, more than 40 employees were dedicated to exploring our maps of biology and chemistry to initiate programs at Recursion. Today, those same employees have been redeployed and our newest internal programs are being initiated autonomously. This efficiency and scale is through the deployment of large language models to map scientific literature in conjunction with our internally derived proprietary maps to identify opportunities for scientific arbitrage in areas of unmet need. These opportunities are then automatically prioritized for confirmation and validation in our highly-automated wetlabs. This is a significant step towards our vision of autonomous drug discovery and biological exploration.
◦Valence Labs – Powered by Recursion: In July 2023 at the International Conference for Machine Learning, we launched Valence Labs, Recursion’s cutting-edge machine learning research center for biology and chemistry in Montréal that aims to promote open-science and academic research. Recursion’s

commitment to open-science helps us recruit and retain the best talent in the field of generative AI, allows us to design and set the standards by which ML and AI are deployed in drug discovery, and may drive additional biopharma companies to consider partnering with Recursion to get access to our proprietary state-of-the-art tools, technology, datasets and programs.

Additional Corporate Updates
•Chief Medical Officer: In May 2023, David Mauro, M.D., Ph.D. joined Recursion as its Chief Medical Officer. Dr. Mauro has over 20 years experience in oncology drug development and has guided more than 25 Investigational New Drug candidates through the translational, preliminary and later stages of development at various companies.
•Chief Legal Officer: In July 2023, Recursion named Nathan Hatfield, J.D., M.B.A. as Chief Legal Officer. Mr. Hatfield has worked at Recursion for over 6 years, previously serving as SVP and Head of Legal. Prior to Recursion, Mr. Hatfield was a securities attorney at the law firm Wilson Sonsini Goodrich & Rosati.
•Toronto Office: In June 2023, we celebrated the opening of our Canadian Headquarters in Toronto with government officials as well as members of the technology and biotechnology communities.
•ESG Reporting: In June 2023, Recursion received a favorable ESG Risk Rating from Morningstar Sustainalytics which ranked Recursion as the #1 biotechnology company out of approximately 400 companies and the #14 pharmaceuticals company out of approximately 900 companies.

Second Quarter 2023 Financial Results

•Cash Position: Cash and cash equivalents were $405.9 million as of June 30, 2023. This cash position does not include the recent $50 million investment from NVIDIA.
•Revenue: Total revenue was $11.0 million for the second quarter of 2023, compared to $7.7 million for the second quarter of 2022. The increase was due to progress made in our Roche-Genentech collaboration.
•Research and Development Expenses: Research and development expenses were $55.1 million for the second quarter of 2023, compared to $38.4 million for the second quarter of 2022. The increase in research and development expenses was due to increased platform costs as we have expanded and upgraded our capabilities.
•General and Administrative Expenses: General and administrative expenses were $28.3 million for the second quarter of 2023, compared to $21.2 million for the second quarter of 2022. The increase in general and administrative expenses was due to an increase in salaries and wages of $3.0 million and increases in software and depreciation expense.
•Net Loss: Net loss was $76.7 million for the second quarter of 2023, compared to a net loss of $65.6 million for the second quarter of 2022.

On August 8, 2023 QIAGEN (NYSE: QGEN; Frankfurt Prime Standard: QIA) reported results for the second quarter and first half of 2023 (Press release, Qiagen, AUG 8, 2023, View Source [SID1234633987]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Net sales results of $497 million at constant exchange rates (CER) for Q2 2023 were above the outlook for at least $490 million CER, driven by 9% CER growth in the non-COVID-19 portfolio. Overall sales results for Q2 2023 declined 4% (-4% CER) to $495 million from Q2 2022, a period marked by significant COVID-19 sales. Adjusted diluted earnings per share (EPS) were $0.51, and results of $0.52 CER were above the outlook for at least $0.50 CER.

QIAGEN has revised its full-year 2023 outlook for net sales of at least $1.97 billion (prior $2.05 billion CER) due mainly to the significant drop in COVID-19 test demand and volatility in large-scale customer bulk orders in the OEM (Original Equipment Manufacturer) business, which impacts both COVID and non-COVID sales results. Sales growth from the non-COVID product groups is now expected to be at least 8% CER, driven by ongoing solid consumables demand across the portfolio. Adjusted diluted EPS are now expected to be at least $2.07 CER (prior $2.10 CER).

"Our teams at QIAGEN exceeded the outlook we set for both sales and profitability in the second quarter of 2023," said Thierry Bernard, Chief Executive Officer of QIAGEN. "This performance was especially important given the significant drop-off in COVID-19 testing and challenging macro environment."

"We are executing on a strategy to develop our portfolio across the Life Sciences and Molecular Diagnostics customer classes. The solid 9% CER sales growth in our non-COVID business shows the resilience of this portfolio, with 10% CER growth in our highly recurring consumables portfolio across all customer classes and led by QuantiFERON quarterly sales exceeding $100 million for the first time. We are well-positioned to continue our track record of delivering solid sales growth trends well beyond 2023 as we as we move beyond the impact of COVID-19 headwinds."

Roland Sackers, Chief Financial Officer of QIAGEN, said: "Our results show the resilience of our portfolio due to the significant share of recurring consumables revenues. Despite making significant investments into the business, particularly R&D investments that were about 10% of sales in the first half of 2023, QIAGEN achieved an adjusted operating income margin above 27% of sales in the second quarter of 2023 as we exceeded our targets for both sales and adjusted EPS."

Please find a PDF of the full press release incl. tables here.

Investor presentation and conference call

A conference call is planned for Wednesday, August 9, 2023 at 15:00 Frankfurt Time / 14:00 London Time / 9:00 New York Time. A live audio webcast will be made available in the investor relations section of the QIAGEN website, and a recording will also be made available after the event. A presentation is planned to be available before the conference call at View Source

Use of adjusted results

QIAGEN reports adjusted results, as well as results on a constant exchange rate (CER) basis, and other non-U.S. GAAP figures (generally accepted accounting principles), to provide additional insight into its performance. These results include adjusted net sales, adjusted gross income, adjusted gross profit, adjusted operating income, adjusted operating expenses, adjusted operating income margin, adjusted net income, adjusted net income before taxes, adjusted diluted EPS, adjusted EBITDA, adjusted EPS, adjusted income taxes, adjusted tax rate, and free cash flow. Free cash flow is calculated by deducting capital expenditures for Property, Plant & Equipment from cash flow from operating activities. Adjusted results are non-GAAP financial measures that QIAGEN believes should be considered in addition to reported results prepared in accordance with GAAP but should not be considered as a substitute. QIAGEN believes certain items should be excluded from adjusted results when they are outside of ongoing core operations, vary significantly from period to period, or affect the comparability of results with competitors and its own prior periods. Furthermore, QIAGEN uses non-GAAP and constant currency financial measures internally in planning, forecasting and reporting, as well as to measure and compensate employees. QIAGEN also uses adjusted results when comparing current performance to historical operating results, which have consistently been presented on an adjusted basis.

On August 8, 2023 Personalis, Inc. (Nasdaq: PSNL), a leader in advanced genomics for precision oncology, reported financial results for the second quarter ended June 30, 2023 and provided recent business highlights (Press release, Personalis, AUG 8, 2023, View Source [SID1234633986]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Recent Business Updates

•
Announced a collaboration with National Cancer Center Hospital East and Ono Pharmaceutical Co. Ltd to perform exploratory biomarker analysis using highly sensitive and comprehensive genomic tests from Personalis to better predict immunotherapy response for resectable rectal cancer with mismatch repair deficiency (dMMR)

•
Received notice from the U.S. Department of Veterans Affairs Million Veterans Program (VA MVP) that it has exercised the first of four one-year renewal options under the September 2022 contract

•
Filed second patent infringement lawsuit against Foresight Diagnostics as part of the company’s continuing efforts to protect its investment and industry-leading intellectual property position in whole genome, tumor-informed minimal residual disease (MRD) testing

"We continue expanding our biopharma funnel of opportunities for NeXT Personal and expect revenue growth to begin ramping later this year, which allowed us to tighten the revenue guidance range," said Chris Hall, President and CEO of Personalis. "We continue to crisply execute and plan to launch our highly sensitive MRD test later this year for oncologists. As we and our partners build a base of supportive evidence, we are paving the way for our successful entry into the clinical diagnostics market."

Second Quarter Financial Highlights

•
Reported total company revenue of $16.7 million for the second quarter of 2023, representing an 8% decrease compared with $18.2 million for the second quarter of 2022

o
Revenue from pharma tests, enterprise sales, and other customers of $13.7 million in the second quarter of 2023, representing a 3% decrease compared with $14.2 million in the second quarter of 2022; revenue from enterprise customers includes revenue from Natera of $7.4 million in the second quarter of 2023, compared with $6.9 million from Natera in the second quarter of 2022

o
Revenue from population sequencing for the VA MVP of $3.0 million in the second quarter of 2023, compared with $4.0 million in the second quarter of 2022

•
Cash, cash equivalents, and short-term investments of $137.2 million as of June 30, 2023

•
Net loss of $24.0 million, and net loss per share of $0.50 based on a weighted-average basic and diluted share count of 47.7 million in the second quarter of 2023

Third Quarter and Full Year 2023 Outlook

Personalis expects the following for the third quarter of 2023:

•
Total company revenue of approximately $17 million
•
Revenue from pharma tests, enterprise sales, and other customers of approximately $14 million, and revenue from population sequencing of approximately $3 million

Personalis expects the following for the full year of 2023:

•
Total company revenue in the range of $70 million to $72 million
•
Revenue from pharma tests, enterprise sales, and all other customers in the range of $61 million to $63 million, and revenue from population sequencing of approximately $9 million
•
Net loss of approximately $103 million reduced from $113 million in 2022 due to realization of headcount reduction savings, partially offset by investments in clinical evidence generation and non-cash depreciation expense for the new facility
•
Cash usage of approximately $70 million, reduced from $119 million in 2022

Webcast and Conference Call Information

Personalis will host a conference call to discuss the second quarter financial results after market close on Tuesday, August 8, 2023 at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The conference call can be accessed live by dialing 877-451-6152 for domestic callers or 201-389-0879 for international callers. The live webinar can be accessed at View Source A replay of the webinar will be available shortly after the conclusion of the call and will be archived on the company’s website.

On August 8, 2023 Olema Pharmaceuticals, Inc. ("Olema", "Olema Oncology", Nasdaq: OLMA), a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of targeted therapies for women’s cancers, reported financial results for the second quarter ended June 30, 2023, and provided a corporate update (Press release, Olema Oncology, AUG 8, 2023, View Source [SID1234633985]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Olema is on track to deliver on significant milestones this year, including initiating our first pivotal Phase 3 trial, OPERA-01, which will test palazestrant (OP-1250) as a monotherapy in the second- and third-line metastatic setting, as well as presenting new data from our ongoing monotherapy and combination clinical studies," said Sean P. Bohen, M.D., Ph.D., President and Chief Executive Officer of Olema Oncology. "We are actively engaged in start-up activities for our OPERA-01 Phase 3 clinical trial, with enrollment expected to begin in the fourth quarter. Among other upcoming milestones, we look forward to presenting our mature Phase 2 monotherapy data as part of an oral presentation at the ESMO (Free ESMO Whitepaper) Congress in Madrid in October. Our goal with palazestrant remains to significantly improve upon current standard-of-care endocrine therapy as the backbone treatment for metastatic breast cancer."

Recent Corporate Highlights

● Presented interim Phase 1b/2 clinical study results of palazestrant in combination with a CDK4/6 inhibitor (palbociclib) at the 2023 European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Breast Cancer Annual Congress in Berlin, Germany. Results demonstrated no dose-limiting toxicities and no observed drug-drug interaction, with an overall tolerability profile of the combination consistent with the FDA-approved label of palbociclib plus an endocrine agent.
● Presented trials-in-progress poster from the ongoing Phase 1b/2 dose escalation and dose expansion study of palazestrant in combination with CDK4/6 inhibitor, ribociclib or PI3Ka inhibitor, alpelisib at the 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in Chicago.

Upcoming Milestones

● Present palazestrant Phase 2 monotherapy clinical study results as an oral presentation at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2023 in Madrid, Spain, on October 22, 2023.
● Present palazestrant interim Phase 1b/2 clinical study results in combination with CDK4/6 inhibitor, palbociclib, in the fourth quarter of 2023.

1

● Present palazestrant interim Phase 1b clinical study results in combination with CDK4/6 inhibitor, ribociclib, in the fourth quarter of 2023.
● Initiate OPERA-01, Olema’s first pivotal Phase 3 clinical trial, testing palazestrant as a monotherapy in second- and third-line metastatic breast cancer, anticipated in the fourth quarter of 2023.

Second Quarter 2023 Financial Results

Cash, cash equivalents and marketable securities as of June 30, 2023, were $167.4 million, a reduction of approximately $18.6 million from the quarter ended March 31, 2023. Olema anticipates that this balance will be sufficient to fund operations into the second quarter of 2025.

Net loss for the quarter ended June 30, 2023, was $20.1 million, as compared to $32.9 million for the same period of the prior year. The decrease in net loss was primarily related to decreased spending on discovery research activities including a one-time upfront payment of $8.0 million to Aurigene Pharmaceuticals in June 2022 pursuant to the exclusive global license agreement entered into in June 2022 between the Company and Aurigene Pharmaceuticals (the Aurigene Agreement), and general and administrative activities including a reduction in corporate- and legal-related costs, which were primarily offset by increased spending on clinical development and operations-related activities as we continue to advance palazestrant into late-stage clinical development.

GAAP research and development (R&D) expenses were $18.0 million for the quarter ended June 30, 2023, as compared to $27.1 million for the quarter ended June 30, 2022. The decrease was primarily due to decreased spending on (i) preclinical research programs, which included the $8.0 million upfront payment in connection with the Aurigene Agreement incurred and paid in June 2022, (ii) clinical pharmacology-related costs, and (iii) personnel-related expenses, which primarily related to lower headcount as a result of the restructuring and portfolio prioritization during the first quarter of 2023, and a decrease of approximately $0.2 million in non-cash stock-based compensation expense. Total decreases were primarily offset by increased spending on clinical operations-related activities as we continue to advance palazestrant into late-stage clinical trials.

Non-GAAP R&D expenses were $15.0 million for the quarter ended June 30, 2023, excluding $3.0 million non-cash stock-based compensation expense. Non-GAAP R&D expenses were $23.8 million for the quarter ended June 30, 2022, excluding $3.2 million non-cash stock-based compensation expense. A reconciliation of GAAP to non-GAAP financial measures used in this press release can be found in the tables below.

GAAP general and administrative (G&A) expenses were $3.6 million for the quarter ended June 30, 2023, as compared to $6.2 million for the quarter ended June 30, 2022. The decrease in G&A expenses was primarily due to decreased spending on (i) corporate- and legal-related costs, and (ii) personnel-related expenses, primarily due to lower headcount as a result of the restructuring and portfolio prioritization, and a decrease of approximately $0.3 million in non-cash stock-based compensation expense.

Non-GAAP G&A expenses were $2.4 million for the quarter ended June 30, 2023, excluding $1.2 million non-cash stock-based compensation expense. Non-GAAP G&A expenses were $4.7 million for the quarter ended June 30, 2022, excluding $1.5 million non-cash stock-based compensation expense. A reconciliation of GAAP to non-GAAP financial measures used in this press release can be found in the tables below.

On August 8, 2023 Mirati Therapeutics, Inc. (NASDAQ: MRTX), a commercial stage biotechnology company, reported financial results for the second quarter 2023 along with recent pipeline and corporate updates (Press release, Mirati, AUG 8, 2023, View Source [SID1234633984]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We are pleased to share the significant progress made during the second quarter of 2023, highlighted by an update to the clinical data and articulation of our path to develop KRAZATI in front line non-small cell lung cancer (NSCLC). Coupled with strong second quarter KRAZATI sales performance, these data reinforce our belief that KRAZATI is the best-in-class KRASG12C inhibitor with significant potential to positively impact the lives of patients living with cancer," said Charles Baum, M.D, Ph.D., interim CEO, president and founder, Mirati Therapeutics, Inc. "Further, we advanced our robust pipeline of targeted oncology programs, including MRTX1719, our potentially first-in-class MTA cooperative PRMT5 inhibitor, where we demonstrated a favorable safety profile, proof of mechanism and compelling early clinical activity in patients with MTAP-deleted cancers. Looking ahead, we are confident in the potential of our broad pipeline of innovative, potentially best-in-class programs including MRTX1133 and our next generation of KRAS inhibitors, as well as MRTX1719 and MRTX0902, our SOS1 inhibitor. We continue to demonstrate our proven expertise in the discovery and development of transformational treatments to people living with cancer."

Pipeline Updates

Adagrasib (Potent and selective KRASG12C inhibitor)

•
In August, the Company shared updated clinical data in first-line NSCLC for the combination of adagrasib with pembrolizumab. The Company announced plans to begin enrolling patients with TPS ≥ 50% in a Phase 3 clinical study by year-end 2023.

•
In August, the Company shared that KRYSTAL 17, a Phase 2 clinical study evaluating adagrasib in combination with chemo-immunotherapy for patients with TPS < 50% has been initiated. The Company intends to provide an update on this study and outline potential registrational development plans in 2024.

•
In July, the company announced the European Medicine Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) issued a negative opinion on the Conditional Marketing Authorisation Application (MAA) for KRAZATI (adagrasib) for the treatment of patients with KRASG12C -mutated advanced NSCLC. The evaluation of the full MAA is not impacted and will be considered by the CHMP following the data from KRYSTAL-12, a Phase 3 clinical study of adagrasib versus docetaxel in second line NSCLC patients. The Company has requested a formal reexamination of the Conditional MAA. (View Release)

•
In June, the Journal of Clinical Oncology published clinical results from the KRYSTAL-1 study of adagrasib, a potent and selective KRASG12C inhibitor, demonstrating durable intracranial activity in patients living with KRASG12C-mutated NSCLC with untreated central nervous system metastases. (View Release)

•
In June, the Company presented updated clinical data for adagrasib as a targeted treatment for KRASG12C-mutated advanced pancreatic ductal adenocarcinoma (PDAC), biliary tract cancer and other solid tumors at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. Based on these results, the Company plans to discuss a tumor agnostic Accelerated Approval approach with FDA by year-end 2023. (View Release)

•
The Company is on track to complete a supplemental New Drug Application (sNDA) for third-line and beyond colorectal cancer in patients with a KRASG12C mutation by year-end 2023.

•
The Company continues to enroll in KRYSTAL-10, a Phase 3 registrational clinical study in second-line colorectal cancer patients, evaluating the combination of adagrasib plus cetuximab versus chemotherapy. The Company expects to complete enrollment by year-end 2023 and plans to share top line results in 2024.

•
The Company continues to enroll in KRYSTAL-12, a Phase 3 clinical study of adagrasib versus docetaxel in second line NSCLC patients. The Company plans to share data from this study in 2024.

MRTX1719 (MTA cooperative PRMT5 inhibitor)

•
In August, the Company presented initial clinical data from the Phase 1 dose escalation clinical study evaluating MRTX1719, an MTA cooperative PRMT5 inhibitor, in patients with solid tumors harboring MTAP-gene deletions, demonstrating a favorable safety profile and early signs of clinical activity. A manuscript characterizing the Company’s preclinical and early clinical experience with 1719 including case studies from the Phase 1 study was accepted by Cancer Discovery and will publish online on August 8, 2023. The Company expects to initiate a Phase 2 study in the first half of 2024.

MRTX1133 (Potent and selective KRASG12D inhibitor)

•
The Company continues to enroll patients in the Phase 1/2 clinical study with plans to share initial clinical data in the first half of 2024.

MRTX0902 (Potent SOS1 inhibitor)

•
In July, the Company initiated a cohort within the Phase 1/2 trial evaluating the combination of MRTX0902 plus adagrasib with plans to share initial clinical data in 2024.

Sitravatinib (Potent TAM receptor inhibitor)

•
In May, the Company announced that the Phase 3 SAPPHIRE study evaluating sitravatinib plus nivolumab (OPDIVO)1 in second or third line non-squamous NSCLC study did not meet its primary endpoint of overall survival at the final analysis. The Company plans to disclose study data at an upcoming medical meeting. (View Release)

Recent Corporate Updates

•
In August, the Company announced that David Meek departed as CEO. Charles Baum, M.D., Ph.D., will assume the role of interim CEO while the Company searches for a permanent CEO.

•
In June, the Company announced Carol Gallagher, Pharm.D. was appointed to the Company Board of Directors as an independent director. (View Release)

Second Quarter Financial Results

•
Cash, cash equivalents and short-term investments of approximately $779.4 million as of June 30, 2023. Net reduction in cash, cash equivalents and short-term investments for the second quarter of 2023 was $122.9 million. The Company expects 2023 net cash burn to annualize within a range of $560 million to $580 million.

•
Net KRAZATI product revenue for the three and six months ended June 30, 2023 was $13.4 million and $19.7 million, respectively. Net product revenue during the three months ended June 30, 2023 was comprised of $11.7 million of commercial sales and $1.7 million of sales to a third-party commercial customer for its clinical trials. There was no product revenue for the same periods in 2022.

•
License and collaboration revenue for the three and six months ended June 30, 2023 was $0.3 million and $1.2 million, respectively, related to clinical supply revenue earned under the agreement with Zai Lab. License and collaboration revenue for the same periods in 2022 was $5.4 million and $6.1 million, respectively, related to a $5 million milestone payment from Zai Lab for the initiation of the first pivotal clinical trial of adagrasib for the first indication in China, and clinical supply revenue earned under the agreement with Zai Lab.

•
Cost of product revenue for the three and six months ended June 30, 2023 was $1.3 million and $2.1 million, respectively, of which $1.0 million and $1.6 million, respectively, related to product manufacturing and distribution costs, and royalties incurred on net sales of KRAZATI, and the remainder represented non-cash amortization expense for our intangible asset. There was no cost of product revenue for the same periods in 2022.

•
Research and development expenses for three and six months ended June 30, 2023 were $124.2 million and $250.9 million, respectively, compared to $128.3 million and $259.3 million for the same periods in 2022, respectively. The decrease was primarily driven by a reduction in clinical development costs for sitravatinib as enrollment was completed in the SAPPHIRE Phase 3 clinical study in the second quarter of 2022, and a decrease in share-based compensation due to a decrease in the fair value of equity awards granted during the period, partially offset by increases in costs for earlier stage clinical development programs such as MRTX1133, and an increase in salaries and other employee related expense to support portfolio advancement.

•
Selling, general and administrative expenses for the three and six months ended June 30, 2023 were $75.5 million and $149.0 million, respectively, compared to $54.2 million and $108.2 million, respectively for the same periods in 2022. The increases were primarily due to an increase in headcount-related costs, including share-based compensation and salaries, and commercial-related costs to support the marketing and sales of KRAZATI.

•
Net loss for the three months ended June 30, 2023 was $176.9 million, or $3.04 per share basic and diluted, compared to a net loss of $176.4 million, or $3.18 per share basic and diluted for the same period in 2022. Net loss for the six months ended June 30, 2023 was $361.5 million, or $6.22 per share basic and diluted, compared to a net loss of $364.8 million, or $6.57 per share basic and diluted for the same period in 2022.

Conference Call Information

There will be a conference call on August 8, 2023 at 5:30 p.m. ET / 2:30 p.m. PT during which company executives will review financial information for the second quarter and provide corporate updates.

Investors and the general public are invited to listen to a live webcast of the call at the "Investors and Media" section on Mirati.com or by dialing the U.S. toll free +1 773-305-6853 or international +1 888-394-8218, confirmation code: 6674271.

A replay of the call will be available approximately 2 hours after the event has ended at the same website.