On November 19, 2021 Exicure, Inc. (NASDAQ: XCUR), a pioneer in gene regulatory and immunotherapeutic drugs utilizing spherical nucleic acid (SNA) technology, reported financial results for the quarter ended September 30, 2021 and provided an update on corporate progress (Press release, Exicure, NOV 19, 2021, View Source [SID1234595851]).
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"I would first like to recognize the amazing work from the high-quality team members at Exicure as we continue to invest into driving value from our SNA platform technology, most notably being recognized in the third quarter through the consummation of another strategic partnership which brought in additional non-dilutive capital," said Exicure CEO Dr. David Giljohann. "It is important to note our SNA platform is grounded in 15 years of intensive and rigorous scientific development across industry and academia. Although a recent claim of improprieties from one researcher, specifically related to our FXN program, are concerning, we are highly confident in our platform technology which delivers DNA and RNA into cells and tissues more effectively. I remain proud of the team members at Exicure who continue to work hard to bring new medicines to patients in need."
Corporate Updates
As previously reported, on November 9, 2021, the Audit Committee of the Board of Directors of the Company was notified of a claim made by a former Company senior researcher regarding alleged improprieties that researcher claims to have committed with respect to the Company’s XCUR-FXN preclinical program for the treatment of Friedreich’s ataxia. The Audit Committee has retained external counsel to conduct an internal investigation of the claim. The Company is currently unable to predict the timing or outcome of the investigation.
Pipeline Highlights & Updates
Neurology
Ipsen Collaboration
On August 2, 2021, Ipsen Biopharm Limited (Ipsen) and Exicure announced an exclusive collaboration agreement to research, develop, and commercialize novel Spherical Nucleic Acids (SNAs) as potential investigational treatments for Huntington’s disease (HD) and Angelman syndrome (AS). Under the terms of the collaboration:
Exicure received a $20 million upfront payment and is eligible to receive up to $1 billion in option exercise fees and milestone payments should Ipsen opt into both programs, as well as tiered royalties.
Collaborative efforts associated with the Ipsen partnership commenced in the third quarter of 2021, and the upfront payment was recorded as deferred revenue on the Company’s balance sheet and will be recognized as revenue on the Company’s income statement related to services as the Company’s performance obligations are satisfied.
XCUR-FXN–Friedreich’s Ataxia
Exicure remains committed to maintaining its development plans and to pursuing its business strategy in the best interests of its stockholders as well as the patients it looks to serve; however, it acknowledges that, at this point in time, it is unable to determine the potential impact of the asserted claim on its research and development activities or the timing of completion of its current research and development of its XCUR-FXN preclinical program for the treatment of FA, as the investigation of the asserted claim remains ongoing.
Immuno-Oncology
Cavrotolimod (AST-008)
The Phase 1b/2 clinical trial of intra-tumoral cavrotolimod in combination with approved checkpoint inhibitors pembrolizumab or cemiplimab, for the treatment of patients with advanced or metastatic Merkel cell carcinoma (MCC) or cutaneous squamous cell carcinoma (CSCC), is open and actively enrolling patients, and as of November 4, 2021:
the Company had 25 clinical trial sites activated and 2 additional sites pending activation of an approximate target of 27 total clinical trial sites; and
37 patients had been dosed with 32 mg of cavrotolimod (AST-008) in the Phase 2 portion of the clinical trial.
As a result of enrollment delays contributed to by COVID-19, the Company now expects to report top-line overall response rates (ORR) results in the second half of 2022 rather than the first half of 2022.
Third Quarter Financial Results and Financial Guidance
Cash Position: Cash, cash equivalents, short-term investments, and restricted cash were $62.0 million as of September 30, 2021 compared to $57.3 million as of June 30, 2021.
Research and Development (R&D) Expenses: R&D expenses were $16.5 million for the quarter ended September 30, 2021, compared to $9.1 million for the quarter ended September 30, 2020. The Company has increased full-time headcount in R&D from 48 as of September 30, 2020 to 65 as of September 30, 2021. The increase in R&D expense reflects this increased headcount and the related increase in R&D activities, in addition to increased clinical trial activities.
General and Administrative Expenses: General and administrative expenses were $2.9 million for the quarter ended September 30, 2021, compared to $2.4 million for the quarter ended September 30, 2020. This increase is primarily due to costs related to new hires needed to grow the Company as it evolves, as well as higher legal costs.
Net Loss: Exicure had a net loss of $23.5 million for the quarter ended September 30, 2021 compared to a net loss of $8.8 million for the quarter ended September 30, 2020. The increase in net loss was primarily driven by higher R&D costs to advance Exicure’s pipeline as discussed above, as well as lower non-cash revenue during the period largely impacted by the reversal of non-cash revenue associated with Exicure’s collaboration with AbbVie Inc. (AbbVie). During the third quarter of 2021, as a result of a change in the workplan for the AbbVie collaboration, we increased the estimated total project hours to complete our research services associated with the AbbVie collaboration, which resulted in less progress occurring to date compared to the increased estimate of total project hours and thus requiring an adjustment to cumulative revenue recognized through September 30, 2021.
Cash Runway Guidance: The Company believes that, based on its current operating plans and estimates of future expenses, as of the date of this press release, it is uncertain whether the Company’s existing cash and cash equivalents is sufficient to fund operations over the next twelve months. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.
For further financial information for the period ending September 30, 2021, please refer to the financial statements appearing at the end of this release.