On November 14, 2022 Neoleukin Therapeutics, Inc., "Neoleukin" (NASDAQ:NLTX), a biopharmaceutical company utilizing sophisticated computational methods to design de novo protein therapeutics, reported financial results for the third quarter ended September 30, 2022 as well as a strategic decision to discontinue development of NL-201, a fully de novo IL-2/IL-15 agonist, and focus on advancing next-generation de novo protein therapeutics based on Neoleukin’s expertise in designing and testing novel cytokine mimetics and experience with advanced machine learning (Press release, Neoleukin Therapeutics, NOV 14, 2022, View Source [SID1234624008]).
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"We will be using the information we have learned from the development of NL-201 and advances in protein design to build the next generation of de novo protein therapeutics," said Jonathan Drachman, M.D., Chief Executive Officer at Neoleukin. "We expect to focus on technology that widens the therapeutic window, such as the development of targeted and conditionally activated molecules to create potent immune agonists. We believe we are well positioned to do this work based on our expertise in de novo protein design combined with our experience in advanced machine learning and neural networks, which allows us to predict and create structures for de novo proteins with more sophisticated and dynamic structural elements than was previously possible."
"This coincides with a strategic decision to discontinue development of NL-201, which we believe was the first fully de novo protein to be evaluated in clinical trials," said Dr. Drachman. "We are grateful to the patients and families that participated in this Phase 1 trial and to the investigators and study personnel who enabled rapid testing of NL-201 during a global pandemic."
Discontinuation of NL-201 Development
Neoleukin announced today that it is discontinuing development of NL-201, its first de novo cytokine mimetic to be tested in patients. Preliminary monotherapy data from the Phase 1 study of NL-201 demonstrated engagement of the target receptor, expected pharmacodynamic changes for a potent IL-2/IL-15 agonist, and did not demonstrate significant immunogenicity even after multiple cycles of therapy—an important de-risking of the potential for de novo proteins that may be administered over many weeks and months. However, based on a review of the preliminary data, the expected benefit to risk ratio for patients, and recent developments in the field of IL-2 therapeutics, Neoleukin determined that the resources required to continue development would be better applied to advancing the next generation of de novo protein therapeutics.
Corporate Reorganization
As a result of the decision to discontinue development of NL-201, on November 12, 2022, Neoleukin’s Board of Directors approved a restructuring plan, including a reduction in force of approximately 40%. Cost savings as a result of this reduction in force as well as the discontinuation of development of NL-201 are expected to extend Neoleukin’s existing cash runway into the second half of 2025.
Summary of Financial Results
Cash Position: Cash, cash equivalents, and short-term investments totaled $106.9 million as of September 30, 2022, compared to $142.5 million as of December 31, 2021.
R&D Expenses: Research and development expenses for the third quarter of 2022 decreased to $9.5 million from $9.9 million for the third quarter of 2021. The decrease was primarily due to a decrease in personnel-related costs, partially offset by increases in costs related to the Phase 1 clinical trial of NL-201.
G&A Expenses: General and administrative expenses for the third quarter of 2022 decreased to $4.1 million from $5.6 million for the third quarter of 2021. The decrease was primarily attributable to decreases in personnel-related and facility-related costs.
Net Loss: Net loss for the third quarter of 2022 was $13.1 million compared to a net loss of $15.4 million in the third quarter of 2021.