On April 17, 2023 Flare Therapeutics, a biotechnology company targeting transcription factors to discover precision medicines for cancer and other diseases, reported the first preclinical data from its lead compound FX-909, a novel, small molecule peroxisome proliferator-activated receptor gamma (PPARG) inhibitor to potentially treat patients with advanced urothelial cancer (UC), in an oral presentation and poster format at the AACR (Free AACR Whitepaper) Annual Meeting being held in Orlando, FL from April 14-19, 2023 (Press release, Flare Therapeutics, APR 17, 2023, View Source [SID1234630190]).

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"These initial findings suggest that FX-909 could become a backbone therapy for patient populations harboring the luminal subtype of UC, much like ER therapies in the luminal subtype of breast cancer," said Rob Sims, Ph.D., Chief Scientific Officer and Co-founder of Flare. "We are eager to continue advancing FX-909, which will be further evaluated in a Phase 1 trial that will begin later in the year. This will be a milestone moment for Flare, as we are the first company slated to enter the clinic with a small molecule inhibitor targeting the PPARG transcription factor for advanced UC."

Flare is building a pipeline of potentially first-in-class therapies against genetically validated transcription factor targets, initially focused on cancer. Although challenging to drug, elusive transcription factors remain high-value targets across numerous disease categories, most notably oncology. Treatments that target cell lineage have become mainstay therapies in breast and prostate cancer, through the successful inhibition of the estrogen receptor (ER) and androgen receptor (AR) transcription factors. Similar to ER and AR, PPARG drives luminal cell identity and accounts for two thirds of all advanced UC, highlighting its potential as a therapeutic target.

The oral presentation, titled, "Discovery of FX-909, a first-in-class inverse agonist of the peroxisome proliferator-activated receptor gamma (PPARG) lineage transcription factor, to potentially treat patients with the luminal subtype of advanced urothelial cancer (UC)," shows that administration of FX-909 elicited durable tumor regressions in animal models of UC. The projected human starting dose of 50 mg/kg is also anticipated to be pharmacologically active.

Additional key takeaways are as follows:

FX-909 is a highly selective and potent covalent small molecule inhibitor of PPARG (cellular EC50, 1 nM), showing >2000-fold selectivity for PPARG over PPARA/PPARD (related transcription factors) – acting through a mechanism that promotes a repressive conformation of PPARG.
FX-909 inhibited cell growth in UC cell lines with activated PPARG signaling but had no effect on cell lines without activated PPARG.
FX-909 administered orally twice a day caused tumor regression in PPARG-amplified and RXRA-mutant UC xenograft models at 1 mg/kg doses, and tumor eradication at 3 mg/kg doses.
FX-909 demonstrated predictable, on-target and reversible pharmacology in normal tissues at supra-pharmacologic doses, mimicking PPARG loss-of-function mutations with notable remodeling in adipose tissue and the normal urothelium.
The poster presentation titled, "Development of a surrogate tissue pharmacodynamic (PD) assay for potential clinical use with FX-909, a novel inhibitor of the urothelial luminal lineage transcription factor peroxisome proliferator-activated receptor gamma (PPARG)," outlines the FX-909-dose dependent expression of PPARG target genes as markers of PD response in tumor, adipose and skin tissue from mouse xenograft, and normal rat and normal human skin preclinical models.

"Based on our observation of the consistent correlation of PPARG target gene expression patterns in tumor and normal tissues, we have elected to develop a normal skin PD biomarker assay to support early assessment of FX-909 biological activity in our Phase 1 study," said Michaela Bowden, Ph.D., Chief Development Officer of Flare. "These findings reinforce the importance of uncovering valuable translational insights and applying them to further guide our drug development process, potentially enabling us to reduce the burden of repeated, invasive tumor biopsy collections for patients with late-stage cancer by offering surrogate skin biopsies as a viable alternative."

Additional key takeaways are as follows:

In a rat pharmacology study, 30% of all genes that responded to FX-909 treatment in skin displayed a similar dose-dependent response profile in fat.

PPARG target genes including FABP4/Fabp4, AGT/Agt, IVT/Ivd and ARG1/Arg1 are repressed across different species and/or tissues, exemplified by dose-dependent suppression of FABP4/Fabp4 (a target gene for PPARG) and showing a strong correlation (r=0.98, p value=0.003) between tumor and skin tissues.
Skin explant models bridge the interspecies translational gap for studying FX-909-mediated effects, where preliminary evidence shows on-target regulation of genes involved in known PPARG-mediated processes.

About Urothelial Cancer

Bladder cancer is the third most common cancer in men in the United States alone. Each year, there are more than 83,000 new cases diagnosed among men and women, and about 25% of those cases are classified as muscle-invasive UC. This disease has high rates of recurrence and the five-year survival rate is approximately 15% in metastatic cases. The transcription factor peroxisome proliferator-activated receptor gamma (PPARG) is associated with the luminal lineage subtype reflecting approximately 65% of all advanced UC cases. Recurrent genetic alterations in PPARG, including focal amplification, missense mutations, and fusions, as well as hotspot mutations in its binding partner, retinoid X receptor alpha (RXRA) are characteristic of this molecular subtype.

On April 17, 2023 Innovent Biologics, Inc. ("Innovent") (HKEX: 01801), a world-class biopharmaceutical company that develops, manufactures and commercializes high quality medicines for the treatment of oncology, autoimmune, metabolic, ophthalmology and other major diseases, reported the final analysis results of ORIENT-16, the Phase 3 study evaluating sintilimab in combination with chemotherapy compared to chemotherapy for the first-line treatment of advanced or metastatic gastric or gastroesophageal junction (G/GEJ) cancer at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2023 (Abstract CT078) (Press release, Innovent Biologics, APR 17, 2023, View Source [SID1234630189]).

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As of data cutoff date (September 2, 2022), a total of 650 patients were randomly assigned and received treatment, and the median follow-up was 33.9 months.

Sintilimab in combination with chemotherapy continuously demonstrated superior overall survival (OS) compared to placebo plus chemotherapy with a 41.3% reduction in the risk of death (HR 0.587 [95% CI: 0.467, 0.738]; P<0.0001) and a 6.3-month improvement in median OS (19.2 months vs. 12.9 months) in patients with CPS ≥5, and 31.9% reduction in the risk of death (HR 0.681 [95% CI: 0.571, 0.812]; P<0.0001）and a 2.9-month improvement in mOS (15.2 months vs. 12.3 months) in all randomized patients.
In all randomized patients, the estimated OS rates at 2-year and 3-year for sintilimab plus chemotherapy vs chemotherapy were 37.6% vs 20.6% and 26.0% vs 10.7%, respectively. In patients with CPS≥5, the estimated OS rates at 2-year and 3-year for sintilimab plus chemotherapy vs chemotherapy were 43.6% vs 22.0% and 29.0% vs 10.7%, respectively. In addition, OS benefits were consistent in all prespecified subgroup analyses.
The safety profile of this final analysis was consistent with that observed in previously reported interim analysis, and no additional safety signals were identified with additional 15-month follow-up.
The principal investigator of the ORIENT-16 study, Prof. Jianming Xu from the Fifth Medical Center of People’s Liberation Army General Hospital, stated, "ORIENT-16 is the first phase 3 trial in China to demonstrate a significant overall survival benefit in patients with advanced G/GEJ cancer treated with anti-PD-1 antibody plus chemotherapy in first line setting. Sintilimab has been approved by National Medical Products Administration (NMPA) in China as the first line treatment for patients with advanced G/GEJ adenocarcinoma and this new indication has been included in the updated National Reimbursement Drug List (2022 Version), making it the first and only PD-1 inhibitor for gastric cancer included in the NRDL. This final analysis showed OS benefit of sintilimab plus chemotherapy was more evident in overall population and in patients with CPS ≥5 compared with that of interim analysis, further confirming sintilimab plus chemotharapy as a standard of care of first line treatment for G/GEJ adenocarcinoma. Gastric cancer is one of the most common malignant tumor types globally and nearly half of all cases are diagnosed in China[i]. Advanced gastric cancer generally has very poor prognosis with high unmet medical need. Approval and inclusion into the updated NRDL of sintilimab plus chemotherapy as first line standard of care for G/GEJ adenocarcinoma has bring an important new treatment option to patients with G/GEJ cancer."

Dr. Zhou Hui, Senior Vice President of Innovent, stated, "The treatment options for advanced G/GEJ cancer are relatively limited and the ORIENT-16 study aimed to address this urgent unmet medical need. Both interim and final analysis results have consistently demonstrated the significant clinical benefit of sintilimab plus chemotherapy as first-line treatment of advanced G/GEJ cancer. And we hope to enhance the accessibility of this novel immunotherapy to benefit a wider group of cancer patients. We are grateful for all the contributions made by every investigator and patient in this study. We are thrilled to share this news with the medical community and look forward to continuing our efforts to bring this innovative treatment option to market and improve outcomes for more patients with gastric cancer. Up until now, sintilimab has demonstrated improved survival in the first-line treatment of five major types of cancer – non-squamous non-small cell lung cancer, squamous non-small cell lung cancer, hepatocellular carcinoma, esophageal squamous cell carcinoma, and gastric cancer. Thanks to that, sintilimab has become the only PD-1 inhibitor for the first-line treatment of five high-incidence cancer types in the NRDL."

About the ORIENT-16 Study

ORIENT-16 is a randomized, double-blind, multicenter Phase 3 clinical study evaluating sintilimab in combination with chemotherapy, compared to placebo in combination with chemotherapy, for the first-line treatment of unresectable, locally advanced, recurrent or metastatic gastric or gastroesophageal junction (GEJ) adenocarcinoma (ClinicalTrials.gov, NCT03745170). The primary endpoint was overall survival, in all randomized and in PD-L1 positive patients.

About Gastric Cancer

Gastric cancer is one of the most common malignant tumor types worldwide. According to GLOBOCAN estimates, there were approximately one million new cases and 769,000 new deaths of gastric cancer in 2020, making it the fifth most common cancer and third leading cause of cancer death globallyi[ii]. About half of all gastric cancer cases occurred in East Asia, mainly in Chinai. The first-line treatment of advanced gastric cancer remains limited. Currently, the 5-year survival rate of advanced or metastatic gastric cancer ranges from 5 to 20 percent. The median survival was about 1 year for patients who received chemotherapy only[iii][iv].

About Sintilimab

Sintilimab, marketed as TYVYT (sintilimab injection) in China, is a PD-1 immunoglobulin G4 monoclonal antibody co-developed by Innovent and Eli Lilly and Company. Sintilimab is a type of immunoglobulin G4 monoclonal antibody, which binds to PD-1 molecules on the surface of T-cells, blocks the PD-1 / PD-Ligand 1 (PD-L1) pathway, and reactivates T-cells to kill cancer cells[v]. Innovent is currently conducting more than 20 clinical studies of sintilimab to evaluate its safety and efficacy in a wide variety of cancer indications, including more than 10 registrational or pivotal clinical trials.

In China, sintilimab has been approved and included in the National Reimbursement Drug List (NRDL) for all six indications. The updated NRDL reimbursement scope of TYVYT (sintilimab injection) include:

For the treatment of unresectable locally advanced, recurrent or metastatic gastric or gastroesophageal junction adenocarcinoma;
For the treatment of unresectable locally advanced, recurrent or metastatic esophageal squamous cell carcinoma;
For the treatment of unresectable locally advanced or metastatic non-squamous non-small cell lung cancer lacking EGFR or ALK driver gene mutations;
For the treatment of unresectable locally advanced or metastatic squamous non-small cell lung cancer;
For the treatment of unresectable or metastatic hepatocellular carcinoma with no prior systematic treatment;
For the treatment of relapsed or refractory classic Hodgkin’s lymphoma after two lines or later of systemic chemotherapy.
Innovent currently has the regulatory submission for sintilimab in combination with bevacizumab biosimilar and chemotherapy for EGFR-TKI failed EGFR-mutated non-squamous NSCLC under review in the China’s NMPA.

Additionally, two clinical studies of sintilimab have met their primary endpoints:

Phase 2 study of sintilimab monotherapy as second-line treatment of esophageal squamous cell carcinoma;
Phase 3 study of sintilimab monotherapy as second-line treatment for squamous NSCLC with disease progression following platinum-based chemotherapy.

On April 17, 2023 Innovent Biologics, Inc. ("Innovent") (HKEX: 01801), a world-class biopharmaceutical company that develops, manufactures and commercializes high quality medicines for the treatment of oncology, autoimmune, metabolic, ophthalmology and other major diseases, reported the updated results of IBI351 (GFH925) (KRASG12C inhibitor) from a phase 1 clinical trial (NCT05005234) in an oral presentation at the 2023 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting (Press release, Innovent Biologics, APR 17, 2023, View Source [SID1234630188]).

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Topic: Phase I study of IBI351 (GFH925) monotherapy in patients with advanced solid tumors: updated results
Main Researcher: Prof. Qing Zhou, Prof. Yi-Long Wu, Guangdong Lung Cancer Institute, Guangdong Provincial People’s Hospital
Abstract Number: CT030
Presentation Date/Time: Monday Apr 17, 2023 2:30 PM – 4:30 PM

IBI351(GFH925) is a novel, irreversible covalent inhibitor of KRASG12C mutation. The NCT05005234 study presented was a first-in-human study conducted in China to evaluate the safety, tolerability and efficacy of IBI351 monotherapy in patients with advanced solid tumors who failed or intolerant to standard of care treatment. As data cutoff date (30 November 2022), 74 subjects were enrolled in the study, including 67 patients with non-small cell lung cancer (NSCLC), 6 colorectal cancer (CRC) and 1 pancreatic cancer. In the presentation, we updated safety and efficacy of NSCLC subjects. Approximately 38.8% of NSCLC patients had brain metastases at baseline. The highlights of the study results were as follows:

As of February 10, 2023, of the 67 evaluable NSCLC patients, 41 achieved partial response (PR), with investigator assessed ORR 61.2% and DCR 92.5%. Most patients remained on treatment.
Of 30 patients with NSCLC treated at 600mg BID (the recommended phase 2 dose), better efficacy signal was observed, with investigator assessed ORR 66.7% (confirmed ORR 53.3%) and DCR 96.7%. The mDOR was not reached yet, the 6m DoR rate was 74.5%（95% CI, 39.8-91.7）. The mPFS was 8.2m (PFS events 46.7%), the data is immature yet. The 6m and 9m PFS rate were 58.9%（95% CI, 39.0-74.3） and 47.3%（95% CI, 26.1-65.8, respectively, with a median follow-up of 8.1 months.
As of 30 November 2022, IBI351 was well tolerated. No DLT was reported and MTD was not reached. Treatment-related adverse events (TRAEs) occurred in 94.0% (63/67) patients and the most common TRAEs were anemia, pruritus, transferase increased, asthenia, protein urine present and bilirubin increased. The majority of the TRAEs were grade 1-2 with 31.3% of patients reporting ≥grade 3 TRAEs. There were no TRAEs led to treatment discontinuation or death.
Favorable safety and tolerability and promising antitumor activity of IBI351 monotherapy were observed in previously-treated advanced NSCLC harboring KRASG12C mutation. A single-arm registrational trial of IBI351 monotherapy in previously-treated advanced non-small cell lung cancer is ongoing.

Professor Yi-Long Wu from Guangdong Lung Cancer Institute, Guangdong Provincial People’s Hospital, stated: "KRAS mutation as the "undruggable" target for decades has become one of the most popular direction for clinical development recently. IBI351 is a novel, irreversible covalent inhibitor of KRASG12C mutation, whose preliminary data of safety and efficacy was reported at 2022 ASCO (Free ASCO Whitepaper) and CSCO. The update data shows the favorable safety and promising activity of IBI351 (GFH925) monotherapy in KRAS G12C mutated advanced NSCLC. Median duration of response (DOR) was not reached and the data of median progression free survival (PFS) was immature. We look forward to more positive clinical data from this study. "

Dr. Hui Zhou, Senior Vice President of Innovent, stated: "We are pleased to present our clinical development updates at the 2023 AACR (Free AACR Whitepaper), and that IBI351 monotherapy demonstrated encouraging efficacy and safety data in phase I study. A single-arm registrational trial of IBI351 monotherapy in previously-treated advanced NSCLC is ongoing. We are working to advance into late stage clinical development to explore the potential of IBI351 as monotherapy and in combo-therapy. We are actively exploring next-generation cancer therapies, hoping to benefit more cancer patients."

About IBI351/GFH925 (KRASG12C Inhibitor)

Discovered by GenFleet Therapeutics, GFH925 (Innovent R&D code: IBI351) is a novel, orally active, potent KRASG12C inhibitor designed to effectively target the GTP/GDP exchange, an essential step in pathway activation, by modifying the cysteine residue of KRASG12C protein covalently and irreversibly. Preclinical cysteine selectivity studies demonstrated high selectivity of IBI351 towards G12C. Subsequently, IBI351 effectively inhibits the downstream signal pathway to induce tumor cells’ apoptosis and cell cycle arrest. In September 2021, Innovent and GenFleet Therapeutics entered into an exclusive license agreement for the development and commercialization of IBI351 in China (including mainland China, Hong Kong, Macau and Taiwan) with additional option-in rights for global development and commercialization.

On April 17, 2023 Oncotelic Therapeutics, Inc. ("Oncotelic", "We" or the "Company") (OTCQB:OTLC) reported summary of its financial results for the year ended December 31, 2022 ("FY 2022") as compared to the prior year ended December 31, 2021 ("FY 2021") (Press release, Oncotelic, APR 17, 2023, View Source [SID1234630187]). We are also providing updates on our product and therapeutic development initiatives and other corporate matters. The financial results are based on the 2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2023.

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FY 2022 compared to FY 2021 Financial Results Overview

ONCOTELIC THERAPEUTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31

2022 2021 Variance
Operating expense:
Research and development $ 756,910 $ 3,658,617 $ (2,901,707 )
General and administrative 4,853,664 5,467,266 (613,602 )
Goodwill impairment 4,111,079 - 4,111,079
Total operating expense 9,721,653 9,125,883 (595.770 )
Loss from operations (9,721,653 ) (9,125,883 ) 595,770
Interest expense, net (2,971,046 ) (2,002,813 ) (968,233 )
PPP loan forgiveness - 346,761 (346,761 )
Reimbursement for expenses – related party 533,485 - 533,485
Gain on derecognition of non-financial asset 16,951,477 - 16,951,477
Loss on debt conversion (257,810 ) (27,504 ) (230,306 )
Change in the value of derivatives on debt 142,150 292,149 (149,999 )
Net income (loss) before controlling interests $ 4,676,603 $ (10,517,290 ) $ 15,193,894
Net Income (Loss)

We recorded net income of approximately $4.7 million for the year ended December 31, 2022, compared to a loss of approximately $10.5 million for the year ended December 31, 2021, resulting in a reduced loss of approximately $15.2 million. Factors contributing to our decreased loss are described below.

Research and Development Expense

Research and Development ("R&D") expenses declined by over $2.9 million, to approximately $0.76 million for the year ended December 31, 2022, as compared to approximately $3.7 million for the year ended December 31, 2021. The primary reason for the decreased R&D activities cost is a reduction in clinical trial costs of $1.8 million, for the trials for OT-101 and Artemisinin, a reduction in compensation costs of approximately $1 million and $0.2 million decrease in operational costs as these costs have been borne by our JV.

General and Administrative Expense

General and administrative ("G&A") expenses decreased by approximately $0.6 million, from approximately $4.9 million for the year ended December 31, 2022, compared to approximately $5.4 million for the same period of 2021. The primary causes for the decline in G&A expenses was due to reduced compensation costs of approximately $0.8 million and a decrease in legal and professional costs of approximately $0.5 million, offset by an increase of around $0.7 million in non-cash stock-compensation expenses.

Having established the joint venture with GMP Bio, we can now transfer the responsibility for our drug development program, related to OT-101, as well as some or most of our G&A expenses, to GMP Bio.

We do anticipate increasing R&D activities related to apomorphine, the initiation of new clinical trials for our other oncology indications, continuing or expanding on our clinical trials and development of some of our AI based tools and applications for OT-101 and Artemisinin for COVID-19 and other epidemics. As a result, R&D expenses might increase in the future, contingent on our ability to secure sufficient funding to continue planned development operations. In a similar vein, while we may be able to transfer some or most of the responsibility of our G&A expenses to GMP Bio, G&A expenses could increase due to other corporate activities and will be subject to our continuing ability to secure sufficient funding to maintain planned operations.

Goodwill Impairment

We recorded a goodwill impairment of approximately $4.1 million on the approximately $16.2 million goodwill, which we recorded upon our acquisition of PointR, for the year ended December 31, 2022. No similar impairment was recorded for the same period of 2021.

In the third and fourth quarters of 2022, we observed a steep decline of our stock price, the market capitalization of our Company, and the general economic conditions, which adversely impacted the majority of the pharmaceutical and biotechnology industry. These factors indicated a potential impairment to our goodwill. Although we assessed and determined that the AI technologies assets related to the PointR acquisition were not adversely impacted, and the Company continues to develop other newer AI technologies, the substantial reduction of our market capitalization compelled us to record an impairment on the goodwill to the extent of the difference between the net assets of the Company over the fair value based on the market capitalization. This is in accordance with US GAAP and other authoritative accounting literature.

Interest Expense

We recorded interest expense, comprising amortization of debt costs, amounting to approximately $3.0 million for the year ended December 31, 2022, related to debt raised from the various convertible notes and a private placement memorandum as compared to $2.0 million on convertible notes and a portion of the private placement memorandum for the same period of 2021.

PPP Loan Forgiveness

For the year ended December 31, 2021, we recorded a PPP Loan Forgiveness of approximately $0.35 million. No comparable forgiveness was recorded during the year ended December 31, 2022.

Reimbursement of expenses

During the year ended December 31, 2022, the Company was reimbursed approximately $0.5 million, by Autotelic Inc. a related party, for expenses incurred by the Company on behalf of our JV. No comparable reimbursement was made during the year ended December 31, 2021.

Gain on derecognition of non-financial Asset

For the year ended December 31, 2022, we recorded a gain of approximately $16.9 million on the sale of our non-financial asset, OT-101, as our capital contribution to GMP Bio. We adopted fair value measurements, under the equity method, and the gain was net of the asset’s fair value of approximately $22.6 million, reduced by the intangibles’ value of approximately $0.8 million for OT-101 and goodwill value of approximately $4.9 million recorded during the 2019 Merger with Oncotelic Inc. No comparable gain was recorded during the year ended December 31, 2021.

Loss on Conversion of Debt

For the year ended December 31, 2022, we recorded a loss on conversion of debt of approximately $0.3 million, attributable to the difference in fair value compared to the price at which the debt was converted. We recorded a similar loss of $28 thousand for the debt conversion by Peak One and TFK in 2021.

Change in value of derivatives

For the year ended December 31, 2022, we recorded a gain of $0.1 million due to the change in value of derivatives on the notes issued to our CEO and the bridge investors. Correspondingly, during the year concluded December 31, 2021, we recorded a gain of $0.3 million due to the change in value of derivatives on the notes issued to our CEO and the bridge investors.

Liquidity, Financial Condition and Capital Resources ($s in ‘000’s)

December 31, 2022 December 31, 2021
Cash, including restricted cash $ 261 $ 589
Working capital (16,620 ) (14,828 )
Stockholders’ Equity 19,193 8,158
The Company has incurred net losses every year since inception and as of December 31, 2022, had an accumulated deficit of approximately $25.933 million, which includes approximately $4.1 million goodwill impairment recorded during the fourth quarter of 2022. As of December 31, 2022, the Company had approximately $0.3 million in cash and current liabilities of approximately $16.9 million, with approximately $1.3 million being net assumed liabilities of the Company as part of the Oncotelic Inc. reverse merger, $4.1 million of debt for conducting clinical trials for OT-101 from GMP and $2.6 million in contingent liability to issue common shares to PointR shareholders upon achievement of certain specific milestones.

For more information on our financial condition, please refer to our 2022 Annual Report on form 10-K filed with the SEC on April 14, 2023.

Cash Flows ($s in ‘000s)

Year ended December 31,
2022 2021
Net cash used in operating activities $ (1,453 ) $ (4,434 )
Net cash provided by financing activities 1,125 4,529
Increase/ (decrease) in cash $ (327 ) $ 95
Operating Activities

Net cash used in operating activities totaled approximately $1.5 million for the year ended December 31, 2022. The net income of approximately $4.7 million primarily decreased by approximately $17 million due to a non-cash gain recorded upon derecognition of our non-financial assets and approximately $0.1 million resulting from a change in fair value of derivatives. Net cash mainly increased by approximately $4.1 million due to goodwill impairment, approximately $2.0 million of amortization of debt and finance discounts, approximately $2.9 million of non-cash stock-based expense on issuance of warrants, approximately $0.9 million of stock compensation, approximately $0.3 million of loss on conversion of debt and approximately $0.8 million due to changes in operating assets and liabilities.

Financing Activities

For the year ended December 31, 2022, net cash provided by financing activities was approximately $1.1 million. Net cash provided was due to approximately $0.2 million raised from sale of common stock under the equity purchase agreement with Peak One and approximately $1.0 million raised through issuance of convertible debt.

2022 Business Highlights

In 2022 and continuing in the first quarter of 2023, the Company has made significant progress in various areas. This included the initiation of several clinical trials, in a wide range of indications, such as pancreatic cancer, melanoma, and mesothelioma. The Company also attended and participated in over ten different conferences and events during 2022 and made presentations at several. In April, we completed our much-anticipated joint venture ("JV"), GMP Biotechnology Limited ("GMP Bio"), with Dragon Overseas Capital Limited ("Dragon Overseas"). In October 2022, we established the animal health division for the Company, which led to the formation of Pet2DAO, Inc. The Company was also awarded funding from the Biomedical Advanced Research and Development Authority ("BARDA") for the development of OT-101 for long COVID-19. The award was under the EZ-BAA funding program. We were awarded up to $750,000, the maximum award under the EZ-BAA program.

Highlights post close of FYE 2022:

"FY 2022 was a challenging yet exciting year for all of us at Oncotelic," said Amit Shah, CFO of Oncotelic. "We anticipate FY 2023 to be even more exciting, with the completion and the evolution of our JV, enabling the rapid development of the OT-101 asset. Moving forward, with the Company’s cash requirement significantly reduced due to offloading the development and commercialization costs related to OT-101, as well as a considerable portion of our G&A expenses, we anticipate a substantial decrease in our operational expenses related to OT-101. However, this does not include any funds we may have to raise to develop our other products and G&A expenses related to the Company. We are also evaluating and considering uplisting the Company to a national stock exchange to complete the corporate turnaround."

Additional information is included in the Company’s Form 10-K for the year ended December 31, 2022, filed on April 14, 2023, a copy of which is available free of charge at View Source

Recent Corporate Update

In November 2022, the Company established a Decentralized Autonomous Organization ("DAO") entity, Pet2DAO, Inc. ("Pet2DAO"), as a wholly owned subsidiary. A DAO is an emerging legal structure, with no central governing body, where members share a common goal to act in the entity’s best interest. Pet2DAO is a DAO technology company, combining traditional corporate governance with innovative DAO architecture. The Company aims to engage stakeholders, build value through the DAO, and maintain traditional corporate rigor, including governance, compliance, and accountability by bringing together public company veterans and innovators in AI, blockchain and Web3. The Company will issue regular tokens and non-fungible tokens ("NFT" and collectively "Tokens") of Pet2DAO, called PDAO, to its employees, shareholders and key opinion leaders ("KOLs’), using the Tokens to propose and vote on various programs. In the future, the Company intends to register these tokens with the SEC to enable free trading at a later date. Additionally, in April 2023, we announced that eligible shareholders could claim PDAO tokens to participate in the subsidiary to make proposals and vote on such proposals. Eligible shareholders have 4 months from April 1st, 2023, until July 31, 2023, to claim the Tokens, with 1 PDAO Token issued for every 2,000 Company shares owned by the shareholder as of April 1st, 2023. As previously announced, no fractional Tokens will be issued. For instance, a shareholder owning 4,500 OTLC shares on April 1st, 2023, would receive 2 PDAO Tokens.

Recent Product Development Highlights

In January 2023, we announced the submission of a clinical study protocol to the US Food and Drug Administration ("US FDA") for initiating a Phase 2b/3 Trial (designated "P201") for OT-101, the Company’s transforming growth factor beta 2 ("TGF-β2") inhibitor, as a treatment for metastatic pancreatic cancer. This study will be funded by our JV. The study is titled P201: A Randomized Phase 2b/Phase 3 Study of the TGF-β2 Targeting Antisense Oligonucleotide OT-101 in Combination with FOLFOX Compared with FOLFOX Alone as Second-Line Therapy in Patients with Metastatic Pancreatic Cancer that has Progressed During or Following a First-Line Gemcitabine-Containing Regimen.

In February 2023, we announced the initiation of a second investigator initiated study (IIS) in a series of planned clinical studies. This study will also be funded by our JV. We submitted a protocol, to the US FDA, for a study with approximately 30 patients with non-small cell lung cancer in collaboration with the Fred Hutchinson Cancer Center and a large pharmaceutical company in the field of immuno-oncology. The study will combine our oligodeoxynucleotide OT-101 and a US FDA approved anti-PD-L1 checkpoint inhibitor.

With these two studies, we now have a total of four planned studies, including two that were planned in 2022, for pediatric gliomas and mesothelioma. We continue to work on planning up to 10 studies, including both IIS and our own studies. In addition to these studies, we have a program with BARDA to conduct a study for long COVID-19, related to OT-101 based on our clinical trial in South America.

On April 17, 2023 Agenus Inc. (Nasdaq: AGEN), a leading immuno-oncology company specializing in immunological agents for cancer and infectious diseases, reported that it has been granted Fast Track Designation from the US Food and Drug Administration (FDA) for the investigation of the combination of botensilimab (AGEN1181) and balstilimab (AGEN2034) (Press release, Agenus, APR 17, 2023, View Source [SID1234630186]). The designation is for patients with non-microsatellite instability-high (MSI-H)/deficient mismatch repair (dMMR) metastatic colorectal cancer with no active liver involvement. Patients targeted with this designation are heavily pretreated are resistant or intolerant to a fluoropyrimidine, oxaliplatin, and irinotecan, and who have also received a VEGF inhibitor, an EGFR inhibitor and/or a BRAF inhibitor, if indicated. The company is conducting a global, randomized Phase 2 trial of botensilimab in combination with balstilimab compared to standard of care in non-microsatellite instability-high (non-MSI-H) colorectal cancer patients.

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"We are pleased that the FDA has granted Fast Track designation for the combination of botensilimab with balstilimab in patients with non-MSI-H colorectal cancer, recognizing the high unmet medical need in this population," said Dr. Steven O’Day, Chief Medical Officer of Agenus. "The Fast Track designation offers important benefits, including the potential eligibility for a Priority Review, and we will be working with the FDA and all key stakeholders to rapidly advance the botensilimab/balstilimab combination in colorectal cancer as well as other solid tumor indications."

During the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) – Gastrointestinal Cancers Symposium in January 2023, Agenus presented positive results from its ongoing clinical trials of the botensilimab/balstilimab combination in patients with non-MSI-H colorectal cancer. The combination therapy showed an overall response rate of 23% and a 12-month survival rate of 63%, which compares to very limited activity of 1-2% overall response rate and ~25% 12-month survival rate reported for the standard of care. Responses to the botensilimab/balstilimab therapy have been durable, with 69% ongoing at data cut-off, and median overall survival not reached.

About Botensilimab
Botensilimab is a novel, multifunctional CTLA-4 investigational antibody that has been designed to extend clinical benefits to "cold" tumors that have not historically responded to standard of care or investigational therapies. In addition to binding to the CTLA-4 receptor, its Fc-enhanced structure induces a memory immune response, downregulates regulatory T cells, and delivers better priming and activation of T cells, thereby amplifying immune responses.

In a Phase 1b clinical study of more than 350 patients, botensilimab has demonstrated clinical responses in nine, previously IO unresponsive, solid tumor cancers, either alone or in combination with Agenus’ PD-1 antibody, balstilimab (data presented at ASCO (Free ASCO Whitepaper) GI 2023, SGO 2023, CTOS 2022, SITC (Free SITC Whitepaper) 2022). Agenus is conducting global, randomized Phase 2 trials in non-MSI-H colorectal cancer, pancreatic cancer, and melanoma as part of its ACTIVATE trial programs. Additional information about these botensilimab trials can be found at www.clinicaltrials.gov under the identifiers NCT05608044, NCT05630183, and NCT05529316, respectively. A global Phase 3 trial in non-MSI-H CRC is expected to launch in 2023.