On November 14, 2022 Cullinan Oncology, Inc. (Nasdaq: CGEM) a biopharmaceutical company focused on modality-agnostic targeted oncology, reported its financial results for the third quarter ended September 30, 2022 (Press release, Cullinan Oncology, NOV 14, 2022, View Source [SID1234623977]).

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"We continued to execute across our programs through the third quarter and will deliver multiple important milestones in 2023," said Nadim Ahmed, Chief Executive Officer of Cullinan Oncology. "For our lead program, zipalertinib, we have initiated the pivotal study in patients with EGFR exon 20 non-small cell lung cancer. We remain on track to report initial clinical data for our two additional clinical-stage programs, CLN-049 and CLN-619, in mid-2023 and to file IND applications for CLN-617 and CLN-978 in the first half of 2023, which will advance our portfolio to potentially five clinical stage programs. With $607 million of cash and investments at the end of the quarter, we have cash runway well beyond these important milestones. We will continue to strategically deploy our capital for pipeline investment, acceleration, and expansion, such as our recent purchase of additional ownership in our Cullinan MICA subsidiary. Lastly, we made important additions to our leadership team and Board of Directors with the appointments of Jacquelyn Sumer as Chief Legal Officer and Dr. David Ryan as a new independent director. Both individuals will provide important expertise to support our evolution into a late-stage oncology company."

Portfolio Highlights

Zipalertinib (previously CLN-081/TAS6417): Cullinan Oncology, in collaboration with our partners at Taiho Oncology, Inc., has initiated a pivotal study of zipalertinib in EGFR exon 20 non-small-cell lung cancer patients progressing after prior systemic therapy. As previously planned, the study will enroll patients at the 100 mg BID dose, and will now also include a limited cohort of patients to evaluate safety and efficacy at 150 mg BID administered with food.

CLN-049: CLN-049 is a FLT3/CD3 T cell-engaging bispecific antibody being investigated in patients with relapsed/refractory acute myeloid leukemia (AML) or myelodysplastic syndrome (MDS). CLN-049 is currently in Phase I investigation with initial clinical data expected in mid-2023.

CLN-619: CLN-619 is a monoclonal antibody that stabilizes expression of MICA/MICB on the tumor cell surface to promote tumor cell lysis from both cytotoxic innate and adaptive immune cells. CLN-619 has broad therapeutic potential and is being investigated as both monotherapy and in combination with checkpoint inhibitor therapy in an ongoing Phase I study in patients with advanced solid tumors with initial clinical data expected in mid-2023.

Cullinan Oncology presented a poster at the Society for Immunotherapy (SITC) (Free SITC Whitepaper) meeting further characterizing the unique mechanism of action of CLN-619. The preclinical data demonstrated the requirement of Fc functionality for the potency of CLN-619, as well as a further potential mechanism of action, antibody dependent cellular phagocytosis (ADCP), to mediate anti-tumor activity.

In October, Cullinan Oncology announced that it increased its ownership in its Cullinan MICA Corp. (MICA) subsidiary, which holds the worldwide rights to CLN-619. Ownership increased from 54% to 92% through the purchase of equity from two of MICA’s financial investors. The Myeloma Investment Fund, a venture philanthropy fund for the Multiple Myeloma Research Foundation (MMRF), retained its ownership in the entity.

CLN-617: CLN-617 is a cytokine fusion protein uniquely combining IL-12 and IL-2 with a collagen binding domain designed for retention in the tumor microenvironment (TME) following intratumoral injection. Cullinan Oncology remains on track to file an Investigational New Drug (IND) application in the first half of 2023.

Cullinan Oncology presented a poster at the recent Society for Immunotherapy (SITC) (Free SITC Whitepaper) meeting. The preclinical data demonstrate that CLN-617 can mobilize a systemic, tumor-specific cellular immune response, remodeling the tumor microenvironment in both the injected and distal tumors.

CLN-978: CLN-978 is a novel CD19/CD3-bispecific therapeutic with extended serum half-life and robust potency against target cells expressing low levels of CD19. Cullinan Oncology remains on track to file an IND application in the first half of 2023.

Corporate Updates

In August, Cullinan Oncology strengthened its leadership team by adding Jacquelyn Sumer as Chief Legal Officer.

In November, Dr. David Ryan was appointed to Cullinan Oncology’s Board of Directors. Dr. Ryan is Chief of Hematology/Oncology, Massachusetts General Hospital (MGH) Cancer Center, the Clinical Director of the MGH Cancer Center, and a Professor of Medicine, Harvard Medical School.

Third Quarter 2022 Financial Results

Cash Position: Cash and investments1 were $606.7 million as of September 30, 2022. During the third quarter of 2022, we received the remaining $5.0 million of the $275.0 million upfront payment and paid $32.6 million in taxes from the sale of our equity interest in Cullinan Pearl to Taiho Pharmaceutical Co. Ltd. Based on our current estimate, we expect to pay approximately $7 million in cash in the fourth quarter for the remaining tax liability resulting from the transaction. Subsequent to the end of the quarter, we spent an additional $30.7 million in cash to increase our ownership in our Cullinan MICA subsidiary to 92%.

R&D Expenses: Research and development (R&D) expenses were $19.7 million for the third quarter of 2022, compared to $26.4 million for the prior quarter. R&D expenses for the third and second quarters of 2022 included $1.1 million and $4.4 million of equity-based compensation expenses, respectively. The decrease in R&D expenses was primarily related to a decrease in chemistry, manufacturing, and control activities for zipalertinib, CLN-619 and CLN-617 and the initiation of expense reimbursement for zipalertinib due to the collaboration agreement with Taiho Oncology, Inc. in the third quarter.

G&A Expenses: General and administrative (G&A) expenses were $10.1 million for the third quarter of 2022, compared to $10.7 million for prior quarter. G&A expenses in each of the third and second quarters of 2022 included $4.2 million of equity-based compensation expenses. The decrease in G&A expenses is primarily driven by nonrecurring expenses related to the Cullinan Pearl transaction of $1.7 million in the second quarter of 2022, partially offset by an increase in professional services expense.

Net Loss: Net loss (before items attributable to noncontrolling interest) for the third quarter of 2022 was $24.9 million.