On November 14, 2023 Aptevo Therapeutics Inc. (NASDAQ:APVO), a clinical-stage biotechnology company focused on developing novel immune-oncology therapeutics based on its proprietary ADAPTIR and ADAPTIR-FLEX platform technologies, reported financial results for the quarter ended September 30, 2023 and provided a business update (Press release, Aptevo Therapeutics, NOV 14, 2023, View Source [SID1234637662]).

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Business Highlights

On August 4, 2023, Aptevo closed a public offering for $5 million that included healthcare-focused institutional investors. The Company raised an additional $2 million through the exercise of warrants in November 2023. This funding extends cash runway for at least the next twelve months
The Company may also receive up to $9.2 million if additional warrants are exercised
The ALG.APV-527 Phase 1 dose escalation trial for the treatment of multiple solid tum 5T4 continues to dose patients and progress in the clinic
Trial endpoints include identification of an expansion phase dose and signals of clinical activity
Planning for initiation of the Company’s Phase 2 program evaluating APVO436 in two clinical trials (relapsed/refractory and frontline AML) is ongoing
The Phase 2 program is intended to further evaluate the triplet combination of APVO436 + venetoclax + azacitidine among frontline and relapsed/refractory AML patients who are venetoclax treatment naïve
" Our work in the third quarter demonstrates Aptevo’s continued commitment to making progress across the pipeline with the goal of helping people in the fight against cancer and we are making strides. We remain on track with the execution of our Phase 1 dose escalation trial evaluating ALG.APV-527 for multiple solid tumors. We are excited about 527 because of its potential for broad applicability in solid tumors expressing 5T4 and the emerging therapeutic promise of the 4-1BB pathway," said Marvin White , President and Chief Executive Officer at Aptevo. "We also raised a total of $7 million through an equity raise and the exercise of warrants. This funding extends cash runway well into 4Q24 when we will reach impactful clinical milestones."

"We are extremely pleased with our APVO436 AML data which demonstrate the safety, clinical activity and durability of the treatment effect," said Dirk Huebner, MD, Chief Medical Officer at Aptevo. "Importantly, we also learned that the drug can be safely administered together with an established standard of care without significantly adding to the toxicity burden for the patient. The data show that APVO436 is combinable with chemotherapy, and we are particularly interested in the combination of APVO436 with venetoclax and azacitidine."

Third Quarter 2023 Financial Results

Cash Position: Aptevo had cash and cash equivalents as of September 30, 2023 totaling $19.1 million.

Royalty Revenue: Royalty revenue for the period covered by this report reflects revenue recorded only in the first quarter of 2022 due to our Amendment to Royalty Purchase Agreement with HCR. As a result of the amendment, we ceased reporting as royalty revenue, royalties paid by Pfizer to HCR related to Pfizer’s sales of RUXIENCE (rituximab-pvvr). The last quarter for which we reported this royalty revenue was Q1 2022. The Amendment had the effect of eliminating the requirement to report all future Pfizer non-cash royalty revenue and extinguishing the liability that we recorded upon the initial sale of the royalties to HCR. RUXIENCE is a registered trademark of Pfizer.

Research and Development Expenses : Research and development expenses decreased by $0.6 million, from $4.5 million for three months ended September 30, 2022 to $3.9 million for the three months ended September 30, 2023. The decrease was primarily due to lower spending on the APVO436 Phase 1b clinical trial as we concluded enrollment in that study and lower spending on preclinical projects and employee costs. The decrease is partially offset by higher spending on the ALG.APV-527 Phase 1 clinical trial as we continue to enroll new patients and sites.

General and Administrative Expenses : General and administrative expenses decreased by $0.6 million, from $3.3 million for the three months ended September 30, 2022 to $2.7 million for the three months ended September 30, 2023. The decrease is primarily due to lower employee and consulting costs.

Other Income (Expense) Net: Other income (expense), net consists primarily of a gain related to the sale of a nonfinancial asset, costs related to debt extinguishment, accrued exit fees on debt, non-cash interest on financing agreements, and interest on debt. Other income, net was $0.2 million for the three months ended September 30, 2023. Other expense, net was $0.1 million for the three months ended September 30, 2022. The change in other income (expense), net is primarily due to higher interest income from our money market funds and not having interest expense related to our MidCap term loan during the quarter due to full repayment of the outstanding balance in the first quarter of 2023.

Discontinued Operations: We did not have income from discontinued operations for the three months ended September 30, 2023. As a result of our Purchase Agreement with XOMA (US) LLC in March 2023, we no longer receive deferred payments from Medexus. We are still entitled to receive a percentage of future milestones based on Medexus’ achievement of certain IXINITY net sales and regulatory approvals. Income from discontinued operations was $0.2 million for the three months ended September 30, 2022, which related to collection of deferred payments from Medexus related to IXINITY sales.

Net Income (Loss) : Aptevo had a net loss of $6.3 million or $0.50 per share for the three months ended September 30, 2023, compared to a net loss of $7.6 million or $1.50 per share for the corresponding period in 2022.