On May 1, 2017 Lion Biotechnologies, Inc. (NASDAQ: LBIO), a biotechnology company developing novel cancer immunotherapies based on tumor-infiltrating lymphocyte (TIL) technology, reported its first quarter 2017 financial results and provided a corporate update (Press release, Lion Biotechnologies, MAY 1, 2017, View Source [SID1234518772]).

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"We started 2017 with a clear focus on execution toward expanding our manufacturing capacity, our clinical program and initiation of engagement with health authorities. During the first quarter of 2017, we increased our manufacturing capacity and are now focused on expansion of our clinical program as well as access to clinical data through collaborations. I am very excited about our recently announced collaboration with MD Anderson, which allows us access to rare patient populations as well as a new method of manufacturing TIL using the MD Anderson process. Lion now has strategic relationships with leading academic and governmental institutions in the U.S. researching TIL technology including the NCI, MD Anderson, and the H. Lee Moffitt Cancer Center as well as one of a leading institution in Europe, the Karolinska Institute, providing Lion the ability to pursue a much broader clinical program than would otherwise be possible as a standalone company," said Dr. Maria Fardis, PhD, MBA, Chief Executive Officer of Lion Biotechnologies. "With this new collaboration in place, by year-end we may have partner-sponsored trials in pancreatic, glioblastoma, ovarian cancer, various sarcomas and melanoma combination trials with three of the approved checkpoint inhibitors in addition to the three ongoing Lion-sponsored TIL clinical studies in metastatic melanoma, head and neck and cervical cancers. This gives us a robust pipeline based on our TIL technology."

First Quarter 2017 and Recent Highlights

Partnerships:

Multi-year strategic alliance with MD Anderson Cancer Center: Lion entered a multi-year strategic alliance agreement involving multi-arm clinical trials to evaluate the safety and efficacy of TIL therapy in ovarian cancer, various sarcomas and pancreatic cancer. In addition, Lion and MD Anderson will conduct preclinical research exploring the expansion of TIL in other rare tumor types.
Manufacturing services agreement with PharmaCell enables expansion of clinical studies in Europe: Lion has entered in to a new, three-year Manufacturing Services Agreement (MSA) with PharmaCell B.V. (PharmaCell), a contract manufacturing services company based in the Netherlands, to manufacture the Company’s autologous cell therapy products. PharmaCell will manufacture TIL products for Lion in its clinical and commercial facility in Geleen, the Netherlands.
Clinical Trial Progress:

Enrollment in LN-144 Phase 2 melanoma study continues: Lion has initiated enrolling patients into the second cohort of its LN-144 program. This cohort utilizes the generation 2 manufacturing process. This process reduces the time from excision to infusion from approximately six weeks to approximately three and half weeks.
Two new Phase 2 studies initiated: The Company has now initiated two Phase 2 trials for LN-145 for the treatment of head and neck and cervical cancers. Clinical trial sites are open for both studies and they are actively screening for patients.
Regulatory:

Global conduct of clinical trials: The Company is engaging health authorities outside the U.S. to gain clarity around conduct of clinical trials outside of US.
Publications:

Publication of new translational data in the journal Science: Lion highlighted a publication in the journal Science that provided new translational data from a clinical trial of TIL therapy for the treatment of advanced metastatic cervical cancer conducted at the Surgery Branch of the National Cancer Institute (NCI). This trial has been supported in part by Lion under a Cooperative Research and Development Agreement (CRADA) with Dr. Steven Rosenberg, Chief of the Surgery Branch, NCI, National Institutes of Health.
First Quarter 2017 Financial Results

As of March 31, 2017, the Company held $147.2 million in cash and cash equivalents and short-term investments, compared to $166.5 million as of December 31, 2016.

GAAP and Non-GAAP net loss

GAAP net loss for the quarter ended March 31, 2017 was $20.7 million, or ($0.33) per share, compared to GAAP net loss of $6.9 million or ($0.14) per share for the quarter ended March 31, 2016.

Non-GAAP net loss, which excludes amounts related to stock-based compensation, for the quarter ended March 31, 2017 was $17.4 million, or ($0.28) per share, compared to non-GAAP net loss of $5.1 million, or ($0.10) per share for the quarter ended March 31, 2016. The non-GAAP net loss for the quarter ended March 31, 2017 excludes $3.3 million of non-cash stock-based compensation.

The Company believes that it is important for investors to understand these non-cash charges as they materially impact the net loss and loss per share calculations. See "Use of Non-GAAP Financial Measures" below for a description of the Company’s Non-GAAP Financial Measures. Reconciliation between certain GAAP and Non-GAAP measures is provided at the end of this press release.

GAAP and Non-GAAP expenses

GAAP research and development (R&D) expenses were $16.6 million for the quarter ended March 31, 2017, an increase of $12.4 million compared to the quarter ended March 31, 2016. The increase in R&D expense is due to increased spending on clinical activities and expansion of manufacturing capabilities. This level of spending is consistent with cell therapy companies at Lion’s stage of clinical development. In addition, R&D-associated stock option expenses were $1.4 million for the three months ended March 31, 2017. Non-GAAP R&D expenses were $15.2 million for the quarter ended March 31, 2017, an increase of $11.6 million, compared to $3.6 million for the quarter ended March 31, 2016.

GAAP general and administrative (G&A) expenses were $4.3 million, an increase of $1.4 million compared to the quarter ended March 31, 2016. The increase in G&A expense is primarily due to the increase in headcount and legal and outside services. Non-GAAP G&A expenses were $2.4 million, which excludes amounts related to stock-based compensation of $1.9 million, for the quarter ended March 31, 2017 an increase of $0.8 million, compared to $1.6 million for the quarter ended March 31, 2016.

Reconciliation between certain GAAP and Non-GAAP measures is provided at the end of this press release.

Use of Non-GAAP Financial Measures

This press release contains non-GAAP financial measures, including expenses adjusted to exclude certain non-cash expenses. These measures are not in accordance with, or an alternative to, generally accepted accounting principles, or GAAP, and may be different from non-GAAP financial measures used by other companies. The item included in GAAP presentations but excluded for purposes of determining non-GAAP financial measures for the periods presented in this press release relates to the non-cash stock-based compensation expense which may fluctuate from period to period based on factors including the timing and accounting of grants for stock options and changes in the Company’s stock price which impacts the fair value of options granted. The Company believes the presentation of non-GAAP financial measures provides useful information to management and investors regarding various financial and business trends relating to the Company’s financial condition and results of operations. When GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of Lion’s ongoing operating performance. In addition, these non-GAAP financial measures are among those indicators the Company uses as a basis for evaluating operational performance, allocating resources and planning and forecasting future periods. Non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP financial measures. To the extent this release contains historical or future non-GAAP financial measures, the Company has also provided corresponding GAAP financial measures for comparative purposes. Reconciliation between certain GAAP and non-GAAP measures is provided at the end of this press release.

On May 1, 2017 AstraZeneca and its global biologics research and development arm, MedImmune, reported that the US Food and Drug Administration (FDA) has granted accelerated approval to Imfinzi (durvalumab) (Press release, AstraZeneca, MAY 1, 2017, View Source [SID1234518771]). Imfinzi is indicated for the treatment of patients with locally advanced or metastatic urothelial carcinoma (mUC) who have disease progression during or following platinum-containing chemotherapy, or whose disease has progressed within 12 months of receiving platinum-containing chemotherapy before (neoadjuvant) or after (adjuvant) surgery. Imfinzi is approved under the FDA’s accelerated approval pathway, based on tumour response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

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Pascal Soriot, Chief Executive Officer of AstraZeneca, said: "We are excited to offer Imfinzi as a breakthrough therapy for patients with locally-advanced or metastatic bladder cancer. Imfinzi is the cornerstone of our extensive Immuno-Oncology programme, in development across many tumour types, as monotherapy and in combination. This first approval for Imfinzi is an important milestone in our return to growth and brings us another step closer to our goal of redefining the way cancer is treated."

Imfinzi is also under investigation in the Phase III DANUBE trial as 1st- line treatment in urothelial carcinoma as monotherapy and in combination with tremelimumab.

Nicholas J. Vogelzang, MD, FACP, FASCO, Clinical Professor at the University of Nevada School of Medicine; SWOG GU Vice Chair; US Oncology Research GU Chair; Comprehensive Cancer Centers of Nevada, said: "The usual course of treatment for patients with advanced bladder cancer begins with a standard platinum-containing chemotherapy. Patients who have disease progression during or following chemotherapy are left with few other treatment options. The approval of Imfinzi to treat this population of select patients signifies hope for those who are currently suffering, or may find themselves with limited options in the future."

The recommended dose of Imfinzi is 10 mg/kg body weight administered as an intravenous infusion over 60 minutes every two weeks until disease progression or unacceptable toxicity.

The accelerated FDA approval of Imfinzi, a human monoclonal antibody that blocks PD-L1, is based on data from Study 1108. This Phase I/II trial evaluated the safety and efficacy of Imfinzi in patients with locally-advanced or metastatic urothelial carcinoma of the bladder. Patients had progressed while on or after a platinum-containing chemotherapy, including those who progressed within 12 months of receiving therapy in a neoadjuvant or adjuvant setting.

In the trial, Imfinzi demonstrated rapid and durable responses, with an objective response rate (ORR) of 17.0% (95% confidence interval [CI]: 11.9; 23.3) in all evaluable patients, regardless of PD-L1 status, and 26.3% (95% CI: 17.8; 36.4) in patients with PD-L1 high-expressing tumours (as determined by the VENTANA PD-L1 (SP263) Assay, Ventana Medical Systems Inc., a member of the Roche Group). PD-L1 high was defined as ≥25% of tumour cells (TC) or tumour-infiltrating immune cells (IC) expressing membrane PD-L1 if ICs involved >1% of the tumour area, or TC≥25% or IC=100% if ICs involved ≤1% of the tumour area. Additionally, approximately 14.3% of all evaluable patients achieved partial response and 2.7% achieved complete response. Of patients who had received only neoadjuvant or adjuvant therapy prior to trial entry, 24% (n=9) responded. Based on a secondary endpoint in this single-arm trial, median time to response was six weeks. Among the total 31 responding patients, 14 patients (45%) had ongoing responses of six months or longer and five patients (16%) had ongoing responses of 12 months or longer.

Efficacy results for Study 1 (bladder cancer cohort of Study 1108


All Patients
(N=182)
PD-L1
High
(N=95)
PD-L1 Low/Negative (N=73)
PD-L1 Not Evaluable (N=14)
Objective Response Rate (ORR) by BICR*, n (%)
(95% confidence interval [CI])
31 (17.0%)
(11.9; 23.3)
25 (26.3%)
(17.8; 36.4)
3 (4.1%)
(0.9; 11.5)
3 (21.4%)
(4.7; 50.8)
Complete Response (CR)
5
3
1
1
Partial Response (PR)
26
22
2
2
Median Duration of Response (DoR), months (range)
Not reached
(0.9+; 19.9+)
Not reached
(0.9+; 19.9+)
12.3
(1.9+; 12.3)
Not reached
(2.3+; 2.6+)
*BICR=Blinded Independent Central Review
+ Denotes a censored value

Patients should be monitored for immune-mediated adverse reactions including pneumonitis, hepatitis, colitis, endocrinopathies (including adrenal insufficiency, hypophysitis, or Type 1 diabetes mellitus), nephritis, rash, thrombocytopenic purpura, infection, infusion-related reactions, or embryo-fetal toxicity. Serious adverse reactions occurred in 46% of patients. The most frequent serious adverse reactions (>2%) were acute kidney injury (4.9%), urinary tract infection (4.4%), musculoskeletal pain (4.4%), liver injury (3.3%), general physical health deterioration (3.3%), sepsis, abdominal pain, and pyrexia/tumour associated fever (2.7% each). Eight patients (4.4%) who were treated with Imfinzi experienced Grade 5 adverse events of cardiorespiratory arrest, general physical health deterioration, sepsis, ileus, pneumonitis, or immune-mediated hepatitis. Three additional patients were experiencing infection and disease progression at the time of death. Imfinzi was discontinued for adverse reactions in 3.3% of patients.

Clinical trials have demonstrated that patients with PD-L1 high-expressing tumours have a higher likelihood of response through blockade of the PD-1/PD-L1 pathway. PD-L1 expression testing may be a useful tool to help guide physicians in their treatment decisions, but it is not required for use of Imfinzi.

About Imfinzi (durvalumab)

Imfinzi (durvalumab, previously known as MEDI4736) is a human monoclonal antibody directed against PD-L1, which blocks the interaction of PD-L1 with PD-1 and CD80.

Durvalumab is also being tested in the 1st-line treatment of patients with unresectable and metastatic bladder cancer as a monotherapy and in combination with tremelimumab, a checkpoint inhibitor that targets CTLA-4, as part of the DANUBE Phase III trial, which had the last patient commenced dosing during the first quarter of 2017 (global trial, excluding China). Additional clinical trials are ongoing to investigate durvalumab as monotherapy or in combination in multiple solid tumours and blood cancers.

About bladder cancer

Urothelial bladder cancers arise from the epithelium of the bladder and are the ninth most common form of cancer worldwide. It is estimated that in 2016, about 430,000 people were diagnosed with bladder cancer around the world and 165,000 did not survive. Metastatic bladder cancer remains an area of unmet medical need in particular; among patients treated with standard-of-care chemotherapy, the five-year survival rate is below 15%.

The tumour microenvironment of urothelial carcinoma (UC) significantly impairs lymphocyte function, helping the cancer to evade immune detection by exploiting inhibitory checkpoint pathways, such as PD-L1/PD-1. PD-L1 is widely expressed in tumour and immune cells in UC patients and helps tumours to evade detection from the immune system through binding to the PD-1 receptor on cytotoxic T lymphocytes.