On May 15, 2023 VBI Vaccines Inc. (Nasdaq: VBIV) (VBI), a biopharmaceutical company driven by immunology in the pursuit of powerful prevention and treatment of disease, reported a business update and announced financial results for the quarter ended March 31, 2023 (Press release, VBI Vaccines, MAY 15, 2023, View Source [SID1234631751]).

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Jeff Baxter, VBI’s President and CEO, commented: "As highlighted earlier this year, we continue to focus on three core priorities: (1) making a difference in the fight against hepatitis B including prevention and treatment, (2) advancing key development programs that target significant unmet needs with meaningful near-term milestones, and (3) managing our operational expenses and capital to fuel sustainable growth and value for key stakeholders – patients, healthcare providers, and shareholders. We continue to make good progress across all three endeavors, and I am especially excited to note the increase in use of PreHevbrio in the U.S. With an ever-expanding access and distribution network in place, and our focus on commercial execution, we hope and expect to see this momentum continue throughout 2023 and beyond. Complementing our work in prevention, the encouraging clinical data announced earlier this year from our partnership with Brii Biosciences underscores the belief that a functional cure with broader efficacy for more hepatitis B patients is within reach, and that our immunotherapeutic candidate, VBI-2601, has the potential to be a meaningful part of that combination regimen."

Recent Key Program Achievements and Projected Upcoming Milestones

Hepatitis B (HBV)

PreHevbrio [Hepatitis B Vaccine (Recombinant)]

Net product sales increased 90% from Q4 2022, with $0.5 million earned in Q1 2023
Product sales are net of the provision for discounts, chargebacks, rebates, and fees – in the aggregate, these discounts reduced sales by $0.3 million in Q1 2023, from $0.8 million gross sales to $0.5 million net sales.
PreHevbrio is now available for purchase at six retail pharmacy chains in the U.S., including Costco, RiteAid, Walmart, and three of the top 10 regional retail pharmacy networks, as well as through the U.S. Department of Veterans Affairs (VA), Federal Bureau of Prisons, and at certain military treatment facilities
Work is underway to continue to expand the number of U.S. integrated delivery networks (IDNs) and hospital systems that offer PreHevbrio
Access continues to broaden for PreHevbrio in the U.S., with a 170% increase in the total number of customer orders in Q1 2023 compared to Q4 2022
S. coverage rates remain strong for the PreHevbrio-specific Current Procedural Terminology (CPT) code across Medicare, commercial, and state Medicaid plans
Q1 2023: Initial stocking order supplied to VBI’s marketing and distribution partner, Valneva, for the U.K. market at the end of Q1 2023 – brand name in U.K. and Europe is PreHevbri [Hepatitis B Vaccine (Recombinant, Adsorbed)]
Q2 2023: PreHevbri is expected to be available in certain European countries beginning in the second quarter of 2023
By Year-End 2023: Availability expected in Canada under brand name PreHevbrio [3-Antigen Hepatitis B Vaccine (Recombinant)]
VBI-2601 (BRII-179): HBV Immunotherapeutic Candidate

Q1 2023: Initial Phase 2 combination study data, announced in February 2023, suggest VBI-2601 has potential to be a valuable immunomodulatory component of a functional cure regimen
H2 2023: Interim topline clinical data expected from part one of the two-part Phase 2a/2b combination study evaluating VBI-2601 (BRII-179) as an add-on to existing pegylated interferon (PEG-IFN-α) and nucleos(t)ide reverse transcriptase inhibitor (Nrtl) therapy in non-cirrhotic chronic HBV patients
Around Year-End 2023: Additional data from Phase 2 combination study expected
Glioblastoma (GBM)

VBI-1901: Cancer Vaccine Immunotherapeutic Candidate

Mid-year 2023: Expected initiation of next phase of development in recurrent GBM setting
Q3 2023: Expected initiation of VBI-1901 study arm, as part of the Individualized Screening Trial of Innovative Glioblastoma Therapy (INSIGhT), a Phase 2 adaptive platform trial, in combination with Agenus’ anti-PD-1, balstilimab, in the primary GBM setting
COVID-19 & Coronaviruses

VBI-2901: Multivalent Coronavirus Vaccine Candidate

Mid-year 2023: Interim data expected from Phase 1 study of VBI-2901, VBI’s multivalent eVLP vaccine candidate that expresses the SARS-CoV-2 (COVID-19), SARS-CoV-1 (SARS), and MERS-CoV (MERS) spike proteins
Additional Corporate Updates

Leadership Appointments

April 2023: Nell Beattie appointed as Chief Financial Officer and Head of Corporate Development, and member of VBI’s Board of Directors
April 2023: Vaughn Himes, Ph.D., Chief Technical Officer at Seagen Inc., appointed to VBI’s Board of Directors – Link Here
Recent Peer-Reviewed Publications

May 2023: Talbird, Anderson, et al., "Cost-effectiveness of a 3-Antigen Versus Single-Antigen Vaccine for the Prevention of Hepatitis B in Adults in the United States" published in Vaccine – Link Here
May 2023: Diaz-Mitoma, Vesikari, et al., "The Persistence of Seroprotective Levels of Antibodies After Vaccination With PreHevbrio, a 3-Antigen Hepatitis B Vaccine" published in Vaccine – Link Here
Organizational Changes and Cost Savings

April 4, 2023: Announcement of plans to reduce internal workforce and operational expenses by 30-35% – a reduction which began in April and is expected to largely complete by the end of June 2023. As a result of this and other reductions in spend, operating expenses from normal business are expected to be 30-35% lower in the second half of 2023 compared to the second half of 2022.
First Quarter 2023 Financial Results

Cash Position: VBI ended the first quarter of 2023 with $40.4 million in cash as compared with $62.6 million in cash as of December 31, 2022.
Revenues, net: Revenues, net for the first quarter of 2023 was $0.5 million as compared to $0.1 million for the same time period in 2022. The revenue increase of 285% was a result of an increase in product sales of PreHevbrio in the U.S., in addition to initial product sales of PreHevbri to our partner, Valneva, in the U.K., offset by lower sales in the Israeli market.
Cost of Revenues: Cost of revenues was $3.6 million in the first quarter of 2023 as compared to $2.8 million in the first quarter of 2022. The increase in the cost of revenues was due to increased product sales, direct labor costs, and inventory related costs for our 3-antigen HBV vaccine.
Research and Development (R&D): R&D expenses for the first quarter of 2023 were $3.2 million as compared to $2.4 million for the first quarter of 2022. R&D expenses were offset by $2.4 million in the first quarter of 2023 and $2.8 million in the first quarter of 2022 due to government grants and funding arrangements. The increase in R&D expenses was mainly related to the continued development of our vaccine candidates, specifically VBI-2901, as the Phase 1 study began in Q3 2022 and completed subject enrollment during Q1
Sales, General and Administrative (SG&A): SG&A expenses for the first quarter of 2023 were $13.3 million as compared to $10.9 million for the same period in 2022. The increase in SG&A, partially offset by government grants and funding arrangements, was a result of the increase in commercial activities related to PreHevbrio, most notably the deployment of our commercial field teams which occurred in the middle of Q1 2022, and the continued development of our distribution infrastructure. Additional increased costs include increased insurance costs, professional costs, and labor costs.
Net Cash Used in Operating Activities: Net cash used in operating activities for the three months ended March 31, 2023 was $21.7 million compared to $19.9 million for the same period in 2022. The increase in cash outflows was largely a result of an increase in net loss, offset by the change in operating working capital, most notably in other current assets and accounts payable. As announced on April 4, 2023, VBI is implementing cost saving measures that are expected to reduce operating expenses from normal business in the second half of 2023 by 30-35% compared to the second half of 2022.
Net Loss and Net Loss Per Share: Net loss and net loss per share for the first quarter of 2023 were $27.8 million and $3.22, respectively, compared to a net loss and net loss per share of $21.3 million and $2.47 for the first quarter of 2022, respectively.
Net Loss and Net Loss Per Share, Excluding Foreign Exchange Loss: Net loss and net loss per share, excluding foreign exchange loss, for the first quarter of 2023 were $20.9 million and $2.43, respectively, compared to a net loss and a net loss per share, excluding foreign exchange loss, of $16.9 million and $1.96 for the first quarter of 2022, respectively. Foreign exchange loss for the first quarter 2023 was $6.8 million as compared to a loss of $4.4 million for the first quarter of 2022. Certain intercompany loans between VBI Vaccines Inc. and our subsidiaries are denominated in a currency other than the functional currency of each entity. The primary driver of the increase in foreign exchange loss was the impact of the relative strengthening of the U.S. and Canadian Dollars against the New Israeli Shekel upon translation of these intercompany loans.
Use of Non-GAAP Financial Measures

Net Loss Excluding Foreign Exchange Loss and Net Loss per Share Excluding Foreign Exchange Loss are non-GAAP financial measures. VBI’s management believes that the presentation of Net Loss Excluding Foreign Exchange Loss and Net Loss per Share Excluding Foreign Exchange Loss is useful to investors because management does not consider foreign exchange loss, which is primarily driven by changes in exchange rates related to certain intercompany loans, when evaluating VBI’s operating performance. Non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial results. The presentation of these non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the Company’s financial statements prepared in accordance with GAAP. Reconciliations of the Company’s non-GAAP measures are included below.

The following represents a reconciliation of Net Loss to Net Loss Excluding Foreign Exchange Loss and Net Loss per Share Excluding Foreign Exchange Loss.

On May 15, 2023 VBL Therapeutics (Nasdaq: VBLT) ("VBL"), reported financial results for the first quarter ended March 31, 2023, and provided a corporate update (Press release, VBL Therapeutics, MAY 15, 2023, View Source [SID1234631750]).

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"During the first quarter, we made continued progress in the steps we are taking to maximize shareholder value and are focused on closing the announced merger with Notable Labs, as expeditiously as possible," said Prof. Dror Harats, M.D., Chief Executive Officer of VBL Therapeutics. "We believe the proposed merger with Notable represents the best path forward for shareholders of both companies and patients. The combined organization will apply Notable’s Predictive Precision Medicines Platform to develop a pipeline of clinical-stage precision medicines with the goal of transforming the standard of care in oncology. We recently filed an S-4 registration statement, and subject to SEC review and shareholder approvals, expect to close the merger in the third quarter of 2023."

Recent Corporate Highlights

On February 23, 2023 VBL announced that it entered into a definitive merger agreement with Notable Labs, Inc. ("Notable"). The combined company will focus on the advancement of Notable’s proprietary Predictive Precision Medicines Platform ("PPMP") and therapeutic pipeline focused on cancer patients with high unmet medical needs.
A Registration Statement on Form S-4 in connection with the proposed merger with Notable was filed by VBL with the U.S. Securities and Exchange Commission ("SEC") on May 11, 2023.
On March 9, 2023, VBL closed on the sale of its manufacturing facility in Modi’in, Israel, and certain related assets, for $7.1 million in cash to Aleph Farms, an Israel-based food technology company. The proceeds from the facility sale will remain in VBL for the benefit of shareholders and the future combined company.
Financial Results for the First Quarter of 2023

On March 31, 2023, VBL had cash, cash equivalents, short-term bank deposits and restricted bank deposits of $26.5 million.
For the quarter ended March 31, 2023, VBL reported a net loss of $2.6 million, or ($0.03) per basic share, compared to a net loss of $10.4 million, or ($0.13) per basic share, in the comparable period in 2022.
For the quarter ended March 31, 2023, total operating expenses were approximately $2.7 million, consisting of $0.06 million in research and development expenses, net, (after reversal of $0.3 million in stock-based compensation expense due to employee terminations), $3.2 million in general and administrative expenses, and $0.6 million in gain on sale of assets from the March 2023 facility sale. This compares with total operating expenses of $10.7 million in the quarter ended March 31, 2022, which was comprised of $7.5 million in research and development expenses, net, and $3.2 million in general and administrative expenses.

On May 15, 2023 Vaccinex, Inc. (Nasdaq: VCNX), a clinical-stage biotechnology company pioneering a differentiated approach to treating neurodegenerative disease (NDD) and cancer through the inhibition of SEMA4D reported financial results for the first quarter ended March 31, 2023 and provided a corporate update on key programs and financing in the first five months of the year (Press release, Vaccinex, MAY 15, 2023, View Source [SID1234631749]).

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"Vaccinex continues to make important progress in our clinical programs to develop pepinemab, our proprietary immunotherapy product candidate, to improve patient outcomes in neurodegenerative disease and cancer," said Maurice Zauderer, Ph.D., President and Chief Executive Officer of Vaccinex. "We completed enrollment in the Phase 1b/2 SIGNAL-AD (Alzheimer’s Disease) study, which we expect will read-out when all participants have completed 12 months of double-blind treatment in mid-2024. In parallel, we submitted a briefing document to the FDA with additional data to support use of the Huntington’s Disease Cognitive Assessment Battery (HD-CAB) as a meaningful measure of cognitive benefit in a planned Phase 3 study intended to demonstrate evidence of treatment efficacy in Huntington’s Disease (HD). FDA agreement on a study design that, if positive, could meet requirements for regulatory approval is an important issue to partner/finance such a study based on the promising data obtained in our completed phase 2 SIGNAL trial (Nature Medicine). FDA has advised that they expect to provide a written response later this month."

Dr. Zauderer continued, "In our oncology program, we reached the targeted enrollment of 36 patients specified for a pre-planned interim analysis of responses to treatment in the Phase 1b/2 KEYNOTE-B84 trial of pepinemab in combination with KEYTRUDA for first-line head and neck cancer. We expect to meet with our collaborator, Merck, in early June to review the results and consider plans for continued development of this novel immunotherapy combination. Separately, we initiated enrollment in a Phase 1b/2 study to evaluate pepinemab in combination with BAVENCIO/avelumab in patients with metastatic pancreatic cancer (PDAC). In addition, an innovative investigator sponsored trial combining pepinemab with adoptive cell therapy for breast cancer continues to enroll patients at the Moffitt Cancer Center. This trial is based on preclinical studies demonstrating that antibody blockade of SEMA4D increases tumor targeting and efficacy of a dendritic cell vaccine."

Summary of Recent Milestones and Upcoming News
Neurodegenerative Disease:

Huntington’s Disease Program: Submitted briefing documents along with a Type C meeting request to the FDA related to the proposed plan for a Phase 3 study of pepinemab in HD. FDA has indicated that they expect to provide a written response later this month to the questions posed in the briefing package.
Alzheimer’s Disease Program: Enrollment completed in the Phase 1b/2 SIGNAL-AD study evaluating pepinemab as a potential treatment for people with mild dementia due to Alzheimer’s Disease (NCT04381468). The study builds on learnings from the previously completed Phase 2 SIGNAL study in HD. Topline data from this SIGNAL-AD study are expected in mid-2024, after the last enrolled patients will have received 12 months of treatment.
Oncology:

KEYNOTE B-84: The Phase 1b/2 KEYNOTE B-84 study reached targeted enrollment of 36 patients for a pre-planned interim analysis. This open-label, Phase 1b/2 study (NCT04815720) is evaluating first line therapy of pepinemab in combination with KEYTRUDA, Merck & Co. Inc’s (MRK) anti-PD-1 therapy, in immunotherapy naïve patients with recurrent or metastatic head and neck squamous cell carcinoma (R/M HNSCC). Vaccinex plans to complete the interim analysis in May and to publicize results in June, 2023 after meeting with Merck to discuss the next steps.
ASCO 2023 Annual Meeting: Two abstracts will be presented at the Annual Meeting of the American College of Clinical Oncology (ASCO) (Free ASCO Whitepaper), being held in Chicago from June 3-6. The first will describe the Vaccinex-sponsored Phase 1b/2 PDAC Study to evaluate pepinemab in combination with BAVENCIO/avelumab as second line combination immunotherapy for patients with metastatic pancreatic ductal adenocarcinoma (PDAC, NCT05102721). This Vaccinex-sponsored study will be conducted with the University of Rochester Cancer Center and Wilmot Cancer Institute, with grant support from a Gateway Discovery Award. Prior studies suggest that treatment with pepinemab may promote the infiltration and activation of dendritic cells and CD8+ cells into the tumor microenvironment, rendering "cold" tumors such as PDAC immunologically "hot" and leading to enhanced efficacy of immune checkpoint inhibitors (ICIs) such as avelumab. The second abstract presents rationale and update of an ongoing Phase 1/2 trial evaluating pepinemab in combination with adoptive cell therapy for breast cancer patients and will be presented by our collaborators, Dr. Hyo S. Han and Dr. Brian Czerniecki of the Moffitt Cancer Center (NCT05378464). In preclinical studies, it was shown that SEMA4D antibody blockade in combination with a dendritic cell vaccine improved trafficking of dendritic cells to tumors and stimulated adaptive tumor immunity, resulting in improved regression of both primary and distant tumors. ASCO (Free ASCO Whitepaper) is the largest clinical oncology meeting in US and affords an opportunity to discuss progress and strategy with partners and collaborators.
ActivMAb Platform Technology:

Nature Communications Paper: Vaccinex and its collaborators published a report in Nature Communications, March 30, 2023, "A Vaccinia-based system for directed evolution of GPCRs in mammalian cells", describing a novel way that the ActivMAb platform can be used for functional studies and drug discovery of the "hard to drug" class of membrane-associated G protein-coupled receptors (GPCRs) and ion channels. The publication highlights the potential for the ActivMAb system to generate improved variants of any GPCR in a mammalian signaling system, enabling a better understanding of the functional properties of these complex receptors and the potential development of new and valuable drugs against these important targets.
First ActivMab-based clinical program: Vaccinex’s partner, Surface Oncology, announced the initiation of a Phase 1/2 study of SRF114, a fully human monoclonal antibody targeting CCD8, for the potential treatment of solid tumors. SRF114 is the first clinical candidate to emerge from the ActivMAb platform.
Financial Results for the Three Months Ended March 31, 2023:
Cash and Cash Equivalents and Marketable Securities. Cash and cash equivalents and marketable securities on March 31, 2023 were $3.3 million, as compared to $6.4 million as of December 31, 2022.

Cash and Cash Equivalents and Marketable Securities: Subsequent Events.

On May 15, 2023, the Company closed the private placement of approximately 7.9 million shares of its common stock for aggregate gross proceeds of $3.0 million, following the private placement that raised $2.0 million in aggregate gross proceeds on March 31, 2023. FCMI Parent Co. ("FCMI"), which is controlled by Albert D. Friedberg, the chairman of the Company’s board of directors, purchased shares in both the March and May 2023 transactions and Vaccinex (Rochester) L.L.C., which is majority owned and controlled by Dr. Maurice Zauderer, the Company’s President, Chief Executive Officer, and a member of its board of directors, purchased shares in the March transaction. The Company intends to use the net proceeds from these private placements to fund the ongoing development and clinical trials of its lead drug candidate, pepinemab, in Alzheimer’s disease and in cancer and for working capital and general corporate purposes.
Research and Development Expenses. Research and development expenses for the quarter ended March 31, 2023 were $3.8 million as compared to $3.0 million for the comparable period in 2022.

The increase in research and development expenses is primarily attributable to increased patient enrollment in the SIGNAL-AD study and the Phase 1b/2 KEYNOTE B84 study in R/M HNSCC.

General and Administrative Expenses. General and administrative expenses for the quarter ended March 31, 2023 were $1.7 million as compared to $1.6 million for the comparable period in 2022.

Essentially flat level of general and administrative expenses reflects careful cost control measures.

Revenue. Vaccinex recorded revenue for the quarter ended March 31, 2023 of $0.6 million in recognition of a milestone payment from Surface Oncology, following dosing of the first patient in a Phase 1/2 study for SRF114.

Comprehensive loss/Net loss per share. The Comprehensive Loss and Net loss per share for the quarter ended March 31, 2023 was $5.0 million and $(0.10) per share compared to $4.6 million and $(0.12) per share for the comparable period in 2022.

Full financial tables are included below. For further details on Vaccinex’s financials, please refer to its Form 10Q filed May 15, 2023 with the SEC.

Vaccinex has global commercial and development rights to pepinemab and is the sponsor of the KEYNOTE-B84 study which is being performed in collaboration with Merck Sharp & Dohme Corp, a subsidiary of Merck and Co, Inc. Kenilworth, NJ, USA. Additional information about the study is available at: clinicaltrials.gov link.

KEYTRUDA is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co. Inc., Kenilworth, NJ, USA.

BAVENCIO/avelumab is co-developed and co-commercialized by Merck KGaA, Darmstadt, Germany and Pfizer Inc.

About Pepinemab
Pepinemab is a humanized IgG4 monoclonal antibody that inhibits SEMA4D, which regulates the actin cytoskeleton of cells that plays an important role in inflammatory reactions in the brain as well as in tumor immune evasion. Data show that by preventing deleterious inflammatory gliosis during disease progression, pepinemab preserves normal function of astrocytes and microglia, two types of glial cells that play a crucial role in the function and health of neurons in the brain. Additional clinical data show that pepinemab promotes infiltration and activation of dendritic cells and CD8+ T cells and reverses immunosuppression within the tumor microenvironment. Pepinemab is being evaluated in several studies in neurodegenerative disease and oncology. Pepinemab has been administered to more than 400 patients and appears to have a favorable safety and tolerability profile.

About ActivMAb
Vaccinex has developed a proprietary mammalian cell-based antibody discovery platform with unique capabilities for multi-pass membrane targets such as G-protein-coupled receptors (GPCRs) and ion channels. The ActivMAb technology has five main applications: complex membrane antigen presentation, antibody or antigen discovery, directed evolution, and protein optimization. The first clinical candidate selected through use of this technology (SRF114, a fully human monoclonal antibody targeting CCR8 for the potential treatment of solid tumors), recently entered development in a Phase 1/2 study sponsored by our licensee, Surface Oncology. Vaccinex has entered into multiple antibody discovery collaborations with leading biopharmaceutical companies.

On May 15, 2023 Terns Pharmaceuticals, Inc. ("Terns" or the "Company") (Nasdaq: TERN), a clinical-stage biopharmaceutical company developing a portfolio of small-molecule product candidates to address serious diseases, including oncology, non-alcoholic steatohepatitis (NASH) and obesity, reported financial results for the first quarter ended March 31, 2023 and corporate updates (Press release, Terns Pharmaceuticals, MAY 15, 2023, View Source [SID1234631748]).

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"We are excited to announce plans to share key clinical and preclinical updates across our three lead programs at upcoming scientific congresses and look forward to several important clinical milestones later this year," said Sen Sundaram, chief executive officer at Terns. "We anticipate top-line data from our Phase 2a DUET trial of TERN-501 as a treatment for NASH in the third quarter and the initiation of Phase 1 clinical trials in our chronic myeloid leukemia (CML) and obesity programs in the second half of this year. In addition, I’m impressed with the progress our partner, Hansoh, has made in enrolling the Phase 1 trial in China so quickly and hope we will see early data accepted for presentation by the end of the year. We continue to rapidly advance our development programs with the goal of making a significant difference in the lives of people living with serious diseases."

Recent Developments and Anticipated Milestones

TERN-701: Oral, allosteric BCR-ABL tyrosine kinase inhibitor (TKI) for chronic myeloid leukemia (CML)

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Terns expects to initiate a clinical trial for TERN-701 in the United States in the second half of 2023, with potential top-line readouts from initial dose-escalation cohorts in 2024
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The Phase 1 trial for TERN-701 is expected to include sites from U.S., Europe and other countries
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A poster detailing non-clinical xenograft activity of TERN-701 will be presented at the American Society for Pharmacology and Experimental Therapeutics (ASPET) on May 18, 2023 at 5:00 PM CDT
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A trial-in-progress (TiP) poster and status update will be presented at the 2023 ASCO (Free ASCO Whitepaper) Annual Meeting on June 5, 2023 at 8:00 AM CDT summarizing the ongoing Phase 1 study of TERN-701 (HS-10382) in China
o
The Phase 1 trial is a dose-escalation and dose-expansion trial (NCT05367700) evaluating the tolerability, efficacy, and pharmacokinetics of once-daily TERN-701 (HS-10382) in approximately 100 people with CML in China conducted by Terns’ partner Hansoh Pharmaceutical Group
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Terns welcomed Emil Kuriakose, M.D. as Chief Medical Officer of Terns Oncology in May 2023. Dr. Kuriakose brings more than a decade of oncology clinical development and medical affairs experience
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Terns plans to host a virtual R&D event with a focus on the evolving CML treatment paradigm and the potential role for TERN-701 in July 2023

TERN-501: Oral, thyroid hormone receptor-beta (THR-β) agonist for NASH

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The Phase 2a DUET trial (NCT05415722), evaluating TERN-501 as a monotherapy and in combination with TERN-101 (farnesoid X receptor (FXR) agonist), completed enrollment in February 2023 with top-line data expected in the third quarter of 2023
o
Primary endpoint is the relative change from baseline in liver fat content as measured by MRI protein density fat fraction (MRI-PDFF) at Week 12 for TERN-501 monotherapy compared with placebo
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Secondary endpoints include assessment of safety and tolerability, pharmacokinetics, changes in MRI-PDFF and MRI corrected T1 (cT1)
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DUET is the first clinical trial assessing a THR-β agonist as monotherapy and in combination with an FXR agonist in people with NASH

TERN-601: Oral, small-molecule glucagon-like peptide-1 (GLP-1) receptor agonist for obesity

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Terns’ lead GLP-1 receptor agonist program remains on track to initiate a Phase 1 first-in-human clinical trial in subjects with elevated BMI in the second half of 2023, with top-line data expected in 2024
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A poster evaluating activity of TERN-601 in transgenic mice expressing human GLP-1 receptor will be presented at a major diabetes conference in June 2023

TERN-800: Oral, small-molecule glucose-dependent insulinotropic polypeptide receptor (GIPR) modulators for obesity

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Lead structural series of GIPR modulators have been identified, with lead optimization efforts underway
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Candidate nomination and initiation of IND-enabling activities expected in 2024
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GIPR modulators have the potential for combination with GLP-1 receptor agonists, such as TERN-601

First Quarter 2023 Financial Results

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Cash Position: As of March 31, 2023, cash, cash equivalents and marketable securities were $297.5 million, as compared with $283.1 million as of December 31, 2022. Based on its current operating plan, Terns expects these funds will be sufficient to support its planned operating expenses into 2026.
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Research and Development (R&D) Expenses: R&D expenses were $17.1 million for the quarter ended March 31, 2023, as compared with $8.1 million for the quarter ended March 31, 2022.
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General and Administrative (G&A) Expenses: G&A expenses were $7.1 million for the quarter ended March 31, 2023, as compared with $5.7 million for the quarter ended March 31, 2022.
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Net Loss: Net loss was $21.5 million for the quarter ended March 31, 2023, as compared with $13.8 million for the quarter ended March 31, 2022.

On May 15, 2023 Sutro Biopharma, Inc. (Sutro or the Company) (NASDAQ: STRO), a clinical-stage oncology company pioneering site-specific and novel-format antibody drug conjugates (ADCs), reported its financial results for the first quarter of 2023, its recent business highlights, and a preview of select anticipated milestones (Press release, Sutro Biopharma, MAY 15, 2023, View Source [SID1234631747]).

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"We’ve had a strong start to the year with the continued advancement of our pipeline," said Bill Newell, Sutro’s Chief Executive Officer. "As we look toward the rest of the year, we are excited for the imminent initiation of REFRaME, our registration-directed trial for luveltamab tazevibulin, or luvelta, in the second quarter of 2023, in addition to the data readout from our ongoing dose expansion Cohort C in ovarian cancer anticipated in the second half of 2023. We will seek to build on the positive momentum from this quarter to deliver on our goal to provide transformational therapies to cancer patients."

Recent Business Highlights and Select Anticipated Milestones

STRO-002, International Nonproprietary Name, "luveltamab tazevibulin," abbreviated as "luvelta", FolRα-Targeting ADC: Luveltamab tazevibulin (luvelta) is being studied in the clinic, in the U.S. and Europe, for patients with ovarian and endometrial cancers.

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Data from the Phase 1 dose expansion study will be featured as an oral presentation at the 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) (ASCO 2023) Annual Meeting in Chicago, IL in June 2023.
Presentation Title: Luveltamab Tazevibulin (STRO-002), an anti-Folate Receptor alpha (FolRα) Antibody Drug Conjugate (ADC), Safety and Efficacy in a Broad Distribution of FOLRα Expression in Patients with Recurrent Epithelial Ovarian Cancer (OC): Update of STRO-002-GM1 Phase 1 Dose Expansion Cohort

Session Type/Title: Oral Abstract Session – Gynecologic Cancer

Session Time: Saturday, June 3, 2023, 3:00 p.m. – 6:00 p.m. CDT

Presentation Time: 5:24 p.m. CDT

Abstract Number: #5508

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Sutro plans to initiate REFRaME, a Phase 2/3 registration-directed study for patients with platinum-resistant ovarian cancer, in the second quarter of 2023, as discussed with the U.S. Food and Drug Administration (FDA). Once results are collected on approximately 110 patients in the selected dose of the luvelta arm, Sutro plans to apply for accelerated approval based on overall response rate (ORR) as the primary endpoint. At the end of the trial, full approval can be sought based on progression-free survival (PFS) as the primary endpoint, comparing results from the luvelta arm and the standard of care arm.
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In January 2023, the company announced results from the luvelta Phase 1 dose-expansion study demonstrating that FolRα-selected patients, defined as patients with TPS >25%, experienced meaningful clinical benefit, with 43.8% ORR, median duration of response (DOR) of 5.4 months, and median PFS of 6.6 months for those receiving the higher starting dose of 5.2 mg/kg. The safety profile is generally consistent with previously released data; asymptomatic, transient neutropenia was the primary adverse event and no new safety signals were observed. Interim data from an exploratory cohort (Cohort C), with 5.2 mg/kg doses of luvelta together with prophylactic pegfilgrastim, appear to demonstrate reduced dose delays and lower incidences of Grade 3+ neutropenia. Sutro plans to announce updated data from Cohort C in the second half of 2023.
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Patients with CBFA2T3::GLIS2 (CBF/GLIS) AML, a highly refractory and uniformly fatal subtype of acute myeloid leukemia found exclusively in infants and young children, were treated with luvelta under compassionate use. During the 64th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition (ASH 2022), an oral presentation was given by Soheil Meshinchi, M.D., Ph.D. summarizing preliminary results from compassionate use of luvelta in this rare indication, suggesting that luvelta was well tolerated as a monotherapy agent and in combination with standard cancer therapies.
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Additional ongoing clinical studies for luvelta include a combination study with bevacizumab for patients with advanced ovarian cancer and a dose-expansion study for patients with endometrial cancer. Sutro expects to announce data from both the combination study and endometrial study in the second half of 2023.
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Translational work is ongoing to support an Investigational New Drug (IND) application for the initiation of a non-small cell lung cancer (NSCLC) study, for which submission is planned in 2023.
STRO-001, CD74-Targeting ADC: The Phase 1 study for patients with B‑cell malignancies has been completed in global sites ex-Greater China and clinical studies in Greater China have been initiated.

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Sutro has completed the Phase 1 dose-escalation study in patients with non-Hodgkin’s lymphoma (NHL) and multiple myeloma (MM), after reaching a maximum tolerated dose (MTD). Sutro plans to leverage the clinical data produced by its partner BioNova Pharma (BioNova) in Greater China to make future prioritization decisions regarding further clinical development.
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BioNova is advancing clinical development of BN301 (STRO-001) for patients with hematological malignancies in Greater China. In February 2023, BioNova announced that the first patient had been dosed in the Phase 1 clinical study of BN301 for the treatment of advanced non-Hodgkin’s lymphoma(NHL).
STRO-003, ROR1-Targeting ADC: IND-enabling studies and manufacturing development are underway for STRO-003 with an IND planned for Q1 2024.

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STRO-003, a novel, next-generation ADC that has been designed to target ROR1, features eight precisely placed β-Glucuronidase-cleavable linkers attached to next-generation exatecan warheads, which, when released, inhibit topoisomerase-1 (TOPO-1) and cause DNA disruption.
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Expanded preclinical data for STRO-003 was presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April 2023, demonstrating potent anti-tumor activity and immune-modulating properties, suggesting that STRO-003 may have the potential to augment checkpoint blockade therapy.

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STRO-003 has demonstrated, in NSCLC and breast cancer patient-derived xenograft models, strong cell-killing activity in low and heterogeneous ROR1-expressing tumors. STRO-003 has also exhibited promising tolerability in preclinical studies involving rodents and non-human primates, with potentially reduced lung toxicity relative to other TOPO-1 inhibiting ADCs.
Collaboration Updates: Sutro continues to seek to maximize the value of its proprietary cell-free platform by working with partners on programs in multiple disease spaces and geographies and has generated from collaborators an aggregate of approximately $626 million in payments through March 31, 2023, including equity investments.

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In December 2022, Sutro and Vaxcyte expanded upon a nearly decade-long relationship through a new agreement, under which Vaxcyte acquired an option to access expanded rights to develop and manufacture cell-free extract, among other rights, and includes a $22.5 million upfront payment and, upon exercise of the option, up to an additional $135 million in option exercise and contingent payments. Under an existing license agreement with Vaxcyte, Sutro is eligible to receive four percent (4%) royalties on worldwide net sales of any licensed vaccine candidates for human health use.
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Sutro’s collaboration with Astellas on the discovery of immunostimulatory antibody-drug conjugates (iADCs) for three targets is ongoing, for which Sutro receives additional financial support for its research efforts, potential milestone payments and royalties, and has an option to co-develop and co-commercialize product candidates in the U.S.
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Sutro is manufacturing initial drug supply for the clinical development of Merck’s MK-1484, currently in Phase 1; and clinical trial materials for Bristol Myers Squibb’s (BMS) CC-99712, a BCMA‑targeting ADC for treatment of multiple myeloma, also currently in Phase 1.
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Sutro is providing clinical drug supply to BioNova for clinical studies for BN301 (STRO-001) in Greater China. Sutro is currently supporting Tasly Biopharmaceuticals (Tasly) for their IND filing and the initiation of clinical development activities in Greater China for STRO-002 and will provide initial clinical drug supply.
Corporate Updates: Sutro strengthened and continues to build upon a world-class leadership team.

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Venkatesh Srinivasan, Ph.D., has been promoted to Chief Technical Operations Officer from SVP, Process and Analytical Development, and will be responsible for Chemistry, Manufacturing, and Controls (CMC) and Process and Analytical Development (P&AD) for Sutro’s cell-free manufacturing technology and platform.
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Shabbir T. Anik, Ph.D., who has served as Sutro’s Chief Technical Operations Officer since March 2016, will transition to the role of Strategic Advisor.
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As previously announced, Trevor Hallam, Ph.D., will be stepping down from his role as President of Research & Chief Scientific Officer, effective May 31, 2023. Dr. Hallam will become a member of Sutro’s Scientific Advisory Board. Nicki Vasquez, Ph.D., Chief Portfolio Strategy & Alliance Officer, will assume interim responsibility for leading the research organization. An executive search is ongoing for a Chief Scientific Officer.
First Quarter 2023 Financial Highlights

Cash, Cash Equivalents and Marketable Securities

As of March 31, 2023, Sutro had cash, cash equivalents and marketable securities of $251.5 million, as compared to $302.3 million as of December 31, 2022, and approximately 0.7 million shares of Vaxcyte common stock with a fair value of $25.0 million, which together provide a projected cash runway into the second half of 2024, based on current business plans and assumptions.

Unrealized Loss from Decrease in Value of Vaxcyte Common Stock

The non-operating, unrealized loss of $7.0 million in the quarter ended March 31, 2023 was due to the decrease since December 31, 2022 in the estimated fair value of Sutro’s holdings of Vaxcyte common stock. Vaxcyte common stock held by Sutro will be remeasured at fair value based on the closing price of Vaxcyte’s common stock on the last trading day of each reporting period, with any non-operating, unrealized gains and losses recorded in Sutro’s statements of operations.

Revenue

Revenue was $12.7 million for the quarter ended March 31, 2023, as compared to $5.9 million for the same period in 2022, with the 2023 amount related principally to the Astellas, Merck and BMS collaborations. Future collaboration and license revenue under existing agreements, and from any additional collaboration and license partners, will fluctuate as a result of the amount and timing of revenue recognition of upfront, milestones, and other agreement payments.

Operating Expenses

Total operating expenses for the quarter ended March 31, 2023 were $54.9 million, as compared to $45.0 million for the same period in 2022. The first quarter 2023 amount includes non-cash expenses for stock-based compensation of $6.0 million and depreciation and amortization of $1.6 million, as compared to $7.0 million and $1.3 million, respectively, in the comparable 2022 period. Total operating expenses for the quarter ended March 31, 2023 were comprised of research and development expenses of $39.4 million and general and administrative expenses of $15.5 million, which are expected to increase in the remainder of 2023 as Sutro’s internal product candidates advance in clinical development and additional general and administrative expenses are incurred as a public company.