(Filing, 10-Q, Cellular Biomedicine Group, NOV 13, 2015, View Source [SID:1234508233])

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On November 13, 2015 KaloBios Pharmaceuticals, Inc. (Nasdaq:KBIO) reported that it will wind down its operations and that it has engaged the Brenner Group to lead those efforts (Press release, KaloBios, NOV 13, 2015, View Source [SID:1234509374]).

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"Recent discussions around a number of possible strategic transactions have ended, and as a result, the company believes it is highly unlikely that continuing to explore strategic alternatives could generate a viable transaction within the time frame allowed by our limited cash resources," said Herb Cross, Chief Financial Officer and Interim Chief Executive Officer.

The company will discontinue its two current development programs, KB004, being studied in Phase 2 for certain hematologic malignancies, and lenzilumab, or KB003, scheduled to initiate Phase I development later this year in chronic myelomonocytic leukemia (CMML). KaloBios has engaged the restructuring firm of The Brenner Group to assist in the wind down of operations and liquidation of the company’s assets. The company recently announced a reduction in operations and headcount affecting approximately 60% of the company’s 28 employees. As a part of its wind down and handing over management of the wind down to The Brenner Group, the company expects to phase out the remaining employees over the next thirty to sixty days. As a result of these developments, the company will not be able to file its Form 10-Q for the third quarter, primarily due to resource constraints.

As a part of its restructuring and winding down, the company has repaid in full its outstanding secured loan obligation to MidCap Financial, secured lender to the company, in the approximate amount of $6.6 million.

On November 13, 2015 the U.S. Food and Drug Administration reported that it has granted accelerated approval for an oral medication to treat patients with advanced non-small cell lung cancer (NSCLC) (Press release, , NOV 13, 2015, View Source [SID:1234508240]). Tagrisso (osimertinib) is now approved for patients whose tumors have a specific epidermal growth factor receptor (EGFR) mutation (T790M) and whose disease has gotten worse after treatment with other EGFR-blocking therapy.
Lung cancer is the leading cause of cancer death in the United States, with an estimated 221,200 new diagnoses and 158,040 deaths in 2015, according to the National Cancer Institute. The most common type of lung cancer, NSCLC occurs when cancer cells form in the tissues of the lung. The EGFR gene is a protein involved in the growth and spread of cancer cells.

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"Our understanding of the molecular basis of lung cancer and reasons these cancers become resistant to prior treatments is rapidly evolving," said Richard Pazdur, M.D., director of the Office of Hematology and Oncology Products in the FDA’s Center for Drug Evaluation and Research. "This approval provides a new treatment for patients who test positive for the EGFR resistance mutation, T790M, and is based on substantial evidence from clinical trials that shows Tagrisso had a significant effect on reducing tumor size in over half of patients who were treated."

Today, the FDA also approved the first companion diagnostic test (cobas EGFR Mutation Test v2) to detect the type of EGFR resistance mutation that Tagrisso is known to target. The newly approved version (v2) of the test adds the T790M mutation to the clinically relevant mutations detected by the original cobas EGFR Mutation Test (v1).

"The approval of safe and effective companion diagnostic tests and drugs continue to be important developments in oncology," said Alberto Gutierrez, Ph.D., director of the Office of In Vitro Diagnostics and Radiological Health in the FDA’s Center for Devices and Radiological Health. "The availability of the cobas EGFR Mutation Test v2 meets a need for the detection of this important EGFR gene mutation, which can alter treatment effectiveness."

The safety and efficacy of Tagrisso were demonstrated in two multicenter, single-arm studies involving a total of 411 patients with advanced EGFR T790M mutation-positive NSCLC whose disease worsened after treatment with an EGFR-blocking medication. In these two studies, 57 percent of patients in the first study and 61 percent of patients in the second study experienced a complete or partial reduction in their tumor size (known as objective response rate).

Continued approval for this indication may be contingent upon further confirmatory studies.

The most common side effects of Tagrisso are diarrhea, skin and nail conditions such as dry skin, rash and infection or redness around the fingernails. Tagrisso may cause serious side effects, including inflammation of the lungs and injury to the heart. It also may cause harm to a developing fetus.

The FDA granted Astra Zeneca breakthrough therapy designation, priority review and orphan drug designation for Tagrisso. Breakthrough therapy designation is granted for a drug that is intended to treat a serious condition when, at the time an application is submitted, preliminary clinical evidence indicates that a drug may demonstrate substantial improvement over available therapies. Priority review designation is granted to drug applications that show a significant improvement in safety or effectiveness in the treatment of a serious condition. Orphan drug designation provides incentives such as tax credits, user fee waivers, and eligibility for market exclusivity to assist and encourage the development of drugs for rare diseases.

Tagrisso was approved under the agency’s accelerated approval program, which allows the approval of a drug to treat a serious or life-threatening disease based on clinical data showing the drug has an effect on a surrogate endpoint reasonably likely to predict clinical benefit to patients. This program provides earlier patient access to promising new drugs while the company conducts confirmatory clinical trials.

Tagrisso is marketed by Astra Zeneca Pharmaceuticals based in Wilmington, Delaware. The cobas EGFR Mutation Test v2 is marketed by Roche Molecular Systems of Pleasanton, California.

On November 13, 2015 NewLink Genetics Corporation (NASDAQ:NLNK), a biopharmaceutical company at the forefront of discovering, developing and commercializing novel immuno-oncology product candidates, including both cellular immunotherapy and checkpoint inhibitor platforms, to improve the lives of patients with cancer reported that data from NLG2101, a global randomized Phase 2 trial testing indoximod in combination with docetaxel or paclitaxel in patients with metastatic breast cancer, will be presented at the San Antonio Breast Cancer Symposium being held December 8-12, 2015 at the Henry B. Gonzalez Convention Center in San Antonio, Texas (Press release, NewLink Genetics, NOV 13, 2015, View Source [SID:1234508239]).

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Details for the presentation follow:

Abstract Title: A phase 2 randomized trial of the IDO pathway inhibitor indoximod in combination with taxane based chemotherapy for metastatic breast cancer: preliminary data
Abstract Number: P2-11-09
Time: 7:30-9:00 a.m.
Date: Thursday, December 10
Location: Halls A-B
Session Title: Treatment: Immunotherapy (Clinical)
Session Type: Poster

On November 13, 2015 Cellular Biomedicine Group Inc. (NASDAQ: CBMG) ("CBMG" or the "Company"), a biomedicine firm engaged in the development of effective stem cell therapies for degenerative diseases and immunotherapies for cancer, reported financial results for the quarter ended September 30, 2015 and provided business highlights (Press release, Cellular Biomedicine Group, NOV 13, 2015, View Source [SID:1234508232]).

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Dr. William Wei Cao, Chief Executive Officer, commented, "We achieved pivotal milestones in the third quarter that redefined CBMG’s business and strategically positioned the Company as an emerging, bifurcated and world-class immuno-oncology and cell therapy contender with international aspirations through the advancement of key infrastructure and clinical milestones. We are encouraged by the positive clinical development of our therapeutic platforms in the third quarter. The Chinese PLA General Hospital ("PLAGH") CAR-T Phase I clinical trial for the treatment of patients with EGFR expressing advanced relapsed/refractory solid tumors in Non-Small Cell Lung Cancer ("NSCLC") and cholangiocarcinoma, and the Phase IIa CD20 Non-Hodgkin’s Lymphoma ("NHL") clinical trial have inspired us to accelerate their development to treat these terminal conditions. We are planning to launch multi-site CAR-T and Dendristim vaccine (previously called GVax) clinical trials in China and are evaluating options to further develop this prospective treatment in the U.S. In addition, we continued to strengthen our scientific team with the appointments of Alan List, M.D., as Chair of the Scientific Advisory Board and Yihong Yao, Ph.D., as Chief Scientific Officer."

"In terms of infrastructure, in addition to our Shanghai and Wuxi sites, we opened a new GMP facility in Beijing, and now operate three GMP facilities in China housing nine independent production lines to address increasing manufacturing demands."

"We believe we are one of the few emerging and versatile biotech companies with a growing revenue-generating T cell technical service. We have proven our ability to make acquisitions and expand globally recognized therapies addressing large and critical markets. We believe we are in an enviable position for the future in carrying out our mission to deliver evolutionary science and serving large patient populations," concluded Dr. William Wei Cao, Chief Executive Officer of Cellular Biomedicine Group.

Third Quarter 2015 Financial Performance

Cash Position: Cash and cash equivalents as of September 30, 2015 were $20.1 million compared to $14.8 million as of December 31, 2014

Net Cash Used in Operating Activities: Net cash used in operating activities for the third quarter of 2015 was $2.9 million, compared to $3.4 million for the same period in 2014

Revenue: Revenues in the third quarter of 2015 were $0.6 million compared to nil for the same period in 2014. All of the revenue has resulted from our acquisition of Agreen Biotech Ltd. that provides T cell technical services, and we are continuing to expand our network of hospitals to grow our revenue.

G&A Expenses: General and administrative expenses for the third quarter of 2015 were $3.5 million compared to $1.9 million for the same period in 2014. Increased expenses in 2015 were primarily attributed to the hiring of senior technical leaders, expanded GMP facility expenses, and amortization of the IP expenses associated with previous acquisitions.

R&D Expenses: Research and development expenses for the third quarter of 2015 were $2.2 million, compared to $0.8 million for the same period in 2014. Approximately two thirds of the increase resulted from the addition of scientific talent to our immunotherapy research and development team, while the remaining increase stems from increased clinical trial expenditures in CAR-T, Tcm, and automated production techniques.

Net Loss: Net loss allocable to common stock holders was $5.1 million, compared to $2.8 million for the same period in 2014. Changes in net loss are primarily attributable to an increase in share-based compensation and clinical trial expenses.

During and since the third quarter of 2015, Cellular Biomedicine Group achieved the following milestones and significant events:

Business Highlights

Appointed Alan List, M.D. as Chair of the Scientific Advisory Board
Appointed former MedImmune/AstraZeneca Director, Yihong Yao, Ph.D., B.S., as Chief Scientific Officer
Opened new GMP facility in Beijing
Evaluating options for U.S. clinical trials on NSCLC and Dendristim vaccine immune-cell therapy

Technology Achievements

Received two new certifications from the China Food and Drug Administration (the "CFDA") for its proprietary cell and tissue preservation media kits respectively, in accordance with the CFDA’s new regulations announced on June 1, 2015
Expanded our intellectual property portfolio from 70 to 77 patents in various stages of approval
Announced preliminary Phase I clinical results of CAR-T EGFR-HER1 ("CBM-EGFR.1") for the treatment of patients with EGFR expressing advanced relapsed/refractory solid tumors, with overall disease control rate (DCR) of 79% (19 of 24). 100% DCR in cholangiocarcinoma (5/5), 71% DCR in NSCLC (12/17)
Upcoming Public Events

Management is scheduled to participate in the following upcoming industry and investor conferences:

November 18-19, Jefferies 2015 Global Healthcare Conference, London, UK
December 1-2, Piper Jaffray Annual Healthcare Conference, New York, NY