On March 24, 2022 Aptevo Therapeutics Inc. (NASDAQ:APVO), a clinical-stage biotechnology company focused on developing novel immuno-oncology therapeutics based on its proprietary ADAPTIR and ADAPTIR-FLEX platform technologies, reported its financial results for the year ended December 31, 2021 and provided 2021 business highlights (Press release, Aptevo Therapeutics, MAR 24, 2022, View Source [SID1234610925]).

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!

"2021 was an eventful year for Aptevo Therapeutics. A year of progress against a backdrop of macro challenges at both the industry and global levels. Among our achievements was completing and announcing positive results for our Phase 1b dose escalation trial for lead drug candidate APVO436 in the treatment of acute myeloid leukemia, or AML, and myelodysplastic syndrome, or MDS. Those results showed a positive safety and tolerability profile and encouraging signs of clinical activity. More specifically, of 40 evaluable patients, promising clinical activity was observed in 11 of 40 or 27.5%, including two complete remissions among AML patients and three complete marrow responses among MDS patients," said Marvin L. White, President and Chief Executive Officer.

Mr. White continued, "Also on the APVO436 front, we initiated the second part of that trial — a dose expansion phase — structured as a multi-center, multi cohort study that will evaluate up to 90 adult AML patients in both monotherapy and in combination with standard of care chemotherapies. Most exciting, we announced a complete remission in the fourth quarter and have since shared that this patient is proceeding to transplant. Our pipeline also continues to progress, as we plan to file an Investigational New Drug Application (IND) for ALG.APV-527 for the treatment of solid tumors, later this year. We are excited about the opportunity to expand our clinical programs and view our progress as continued validation of our technology platforms."

"From a financial perspective we have sufficient cash for at least the next 12 months. Importantly, completion of enrollment of the APVO436 expansion trial and initiation of the ALG.APV-527 clinical program are expected inside this cash window," he concluded.

2021 Highlights

Announced results from the Phase 1b dose escalation trial evaluating lead drug candidate, APVO436, for the treatment of AML and MDS. Results showed:
APVO436 exhibited a favorable safety profile with acceptable tolerability and generally manageable drug-related adverse events.
Promising clinical activity was observed in 11 of 40 patients (27.5%) evaluable for efficacy. This included two complete remissions in patients with AML and three complete marrow responses in patients with MDS.
Initiated the dose expansion part of the APVO436 Phase 1b trial, evaluating adult patients with acute myeloid leukemia (AML) in a multi-center, multi-cohort study of up to 90 patients who will receive APVO436 in combination and monotherapy.
Published three articles in two peer-reviewed publications, Cancers and Frontiers in Medicine, discussing APVO436 data. Results were also presented at the American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting in November 2021.
Announced that a high-risk AML patient treated with a combination of chemotherapy plus APVO436 achieved a complete remission after one cycle of therapy. The chemotherapy regimen included the standard leukemia drugs Mitoxantrone, Etoposide, and Cytarabine. The patient tolerated treatment without evidence of overt toxicity.
More recently, Aptevo reported that this patient will proceed to transplant.
Solidified plans with Alligator Bioscience to submit an IND for ALG.APV-527 in the second half of 2022 to evaluate the compound for the treatment of multiple solid tumor types.
Aptevo will investigate the initial differentiating benefits of ALG.APV-527 to induce stronger and more tumor-directed T cell activity with the potential for improved safety and efficacy than existing 4-1BB monoclonal antibody treatments
Received $35 million from our sale of the right to royalty payments made by Pfizer Inc. ("Pfizer") with respect to net sales of RUXIENCE to an entity managed by HealthCare Royalty Management, LLC ("HCR").
Earned a $10 million milestone payment related to 2021 sales of RUXIENCE under the terms of its royalty purchase agreement with HCR. Received the proceeds from the milestone payment in March 2022, which will be used to pay down our MidCap Financial term loan to $5 million, further strengthening the company’s balance sheet.
2021 Summary Financial Results

Cash Position: Aptevo had cash and cash equivalents as of December 31, 2021 totaling $46.3 million, including restricted cash of $1.3 million. The restricted cash is expected to be released over the next twelve months.

Royalty Revenue: Royalty revenue increased by $8.0 million from $4.3 million for the year ended December 31, 2020 to $12.3 million for the year ended December 31, 2021. The increase is related to royalty revenue from Pfizer on global net sales of RUXIENCE, a biosimilar to the drug RITUXAN, launched by Pfizer in early 2020. Due to our continuing involvement under the Definitive Agreement originally between Trubion and Wyeth, we continue to recognize royalty revenue on net sales of RUXIENCE and record the royalty payments to HCR as a reduction of the liability when paid. As such payments are made to HCR, the balance of the liability will be effectively repaid over the life of the Royalty Purchase Agreement. RUXIENCE is a trademark of Pfizer; RITUXAN is a trademark of Biogen.

Research and Development Expenses: Research and development expenses increased by $1.1 million, to $19.0 million for the year ended December 31, 2021 from $17.9 million for the year ended December 31, 2020. The increase is due to higher spending on consulting services for our APVO436 clinical trial as we continue to advance that trial and increased spending on analytical analysis for our preclinical programs, including ALG.APV-527, APVO603, and APVO442. Further, we have now started dosing in our Phase 1b expansion program for our APVO436 clinical trial.

General and Administrative Expenses: For the year ended December 31, 2021, general and administrative expenses increased by $0.7 million, or 5%, to $14.7 million from $14.0 million for the year ended December 31, 2020. This increase was primarily due to higher costs related to responding to stockholder activism matters and higher employee costs.

Other Expense: Other expense consists primarily of costs related to debt extinguishment, accrued exit fees on debt, non-cash interest on financing agreements, and interest on debt. Other expense, net was $8.0 million for the year ended December 31, 2021 and $3.4 million for the year ended December 31, 2020. This increase is primarily due to interest expense and accrued exit fees for the MidCap Credit Agreement, as well as non-cash interest expense for the Royalty Purchase Agreement.

Discontinued Operations: Income from discontinued operations was $1.0 million for the year ended December 31, 2021 and $13.2 million for the year ended December 31, 2020. For the year ended December 31, 2021, we collected $0.5 million related to the sale of hyperimmune business to Saol as a result of the collection of certain accounts receivable and deferred payment of $0.5 million received from Medexus related to IXINITY sales. For the year ended December 31, 2020, we recognized net income from discontinued operations totaling $13.2 million. This included the gain on the sale of Aptevo BioTherapeutics of $14.3 million, net operating losses from Aptevo BioTherapeutics of $1.6 million related to the period prior to the sale on February 28, 2020, and $0.4 million deferred payment from Medexus related to IXINITY sales.

Net Loss: Aptevo’s net loss for the year ended December 31, 2021 was $28.5 million or $6.07 per share, compared to a net loss of $17.8 million or $5.23 per share for the corresponding period in 2020.