On August 10, 2023 TScan Therapeutics, Inc. (Nasdaq: TCRX), a clinical-stage biopharmaceutical company focused on the development of T cell receptor-engineered T cell therapies (TCR-Ts) for the treatment of patients with cancer, reported financial results and provided a corporate update for the second quarter ended June 30, 2023 (Press release, TScan Therapeutics, AUG 10, 2023, View Source [SID1234634220]).

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"The success of the second quarter has been a testament to the hard work here at TScan over the last six months," said Gavin MacBeath, Ph.D., Chief Executive Officer. "We are encouraged by the initial clinical data from our heme malignancies program and look forward to reaching the recommended Phase 2 dose for both TSC-100 and TSC-101 and providing a more extensive update by the end of this year. We continue to successfully enroll and treat patients in the dose escalation portion of the Phase 1 study and have not observed any dose limiting toxicities to date. Both TCR-T product candidates are now proceeding through dose level 2. With regards to the solid tumor program, we continue to focus our efforts on populating the ImmunoBank with TCR-Ts that address different targets and diverse HLA types to enable tailored, multiplexed TCR-T therapies. Following the close of an underwritten public offering in June, we are well capitalized to execute on upcoming anticipated milestones into 2026, by which time we expect to report data for both clinical programs."

Corporate Highlights

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In May 2023, the Company presented preliminary data from its ongoing multi-arm Phase 1 clinical trial evaluating TSC-100 and TSC-101, two different TCR-T cell therapy product candidates that are designed to treat residual disease and prevent relapse following hematopoietic cell transplantation in patients with acute myeloid leukemia (AML), myelodysplastic syndromes (MDS), or acute lymphocytic leukemia (ALL). Data were presented at the American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper) 26th Annual Meeting 2023. Both TSC-100 and TSC-101 showed markers of T cell activation and proliferation in patients, with no dose limiting toxicities. The Company also reported donor chimerism data for three patients. Two medium-risk MDS patients in the control arm showed incomplete donor chimerism, whereas the high-risk MDS patient in the TSC-101 arm showed complete donor chimerism within three weeks of receiving the

engineered TCR-T cell product. The study is now advancing to dose level 2 in both the TSC-100 and TSC-101 arms. TScan remains on track to reach the recommended Phase 2 dose for both products and report interim clinical data for the program by the end of 2023.

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The Company recently announced the U.S. Food and Drug Administration (FDA) has cleared its investigational new drug (IND) application for TSC-200-A0201, a TCR-T targeting the E7 protein of human papillomavirus 16 (HPV16). TSC-200-A0201 is the third TCR-T cleared to initiate clinical development in the Company’s solid tumor program. TSC-204-A0201 and TSC-204-C0702, which target MAGE-A1 presented on HLA types A*02:01 and C*07:02, respectively, were cleared earlier this year. TScan is on-track to initiate clinical development of all three TCR-T candidates in a multi-arm Phase 1 basket study in the second half of 2023. The clinical trial, which has received clearance from the FDA, is designed to assess the safety and efficacy of each candidate individually at two different dose levels, and then to assess custom combinations of TCR-Ts at dose levels 3 and 4 in patients that qualify to receive more than one therapeutic candidate. TScan plans to file INDs for three additional TCR-T candidates by year end, including a TCR-T that targets the tumor-associated antigen PRAME. Upon FDA clearance, these candidates will be introduced into the ongoing clinical trial, thereby increasing patient eligibility for multiplexed TCR-T cell therapy.

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During the second quarter, TScan announced the closing of an underwritten public offering with net proceeds of approximately $134.7 million. The Company intends to use the proceeds for general corporate purposes. Following this offering, the Company expects that its existing cash and cash equivalents, along with proceeds from the collaboration agreement with Amgen, will fund its operating expenses and capital expenditure requirements into 2026.

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In June 2023, TScan presented a trial in progress poster for its solid tumor program at the 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. A copy of the poster can be found on the "Publications" section of the Company’s website at www.tscan.com.

Upcoming Anticipated Milestones

Heme Malignancies Program:

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Expects to reach the recommended Phase 2 dose for both TSC-100 and TSC-101 and report interim clinical data for the program by the end of 2023.
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Plans to complete Phase 1 dosing and report prevention of relapse data in 2024.

Solid Tumor Program:

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Anticipates further expansion of the ImmunoBank with the recent filing of an IND for TSC-203-A0201, an HLA-A*02:01-restricted TCR targeting PRAME, and IND filings for two additional TCRs by year-end.
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Plans to initiate Phase 1 solid tumor clinical study in the second half of 2023 and anticipates sharing preliminary data by the end of 2023.

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Expects to report initial multiplexed therapy data for its first combinations of TCR-Ts under T-Plex, as well as response data for singleplex cohorts, in 2024.

Second Quarter 2023 Financial Results

As of June 30, 2023, TScan Therapeutics had cash and cash equivalents of $208.8 million, excluding $5.0 million of restricted cash. Based on current operating plans, the Company believes that existing cash and cash equivalents, along with proceeds from the collaboration with Amgen, will be sufficient to fund its operating expenses and capital expenditure requirements into 2026.

Revenue for the second quarter ended June 30, 2023, was $3.1 million, compared to $4.1 million for the second quarter ended June 30, 2022 (2022 Quarter). This decrease is primarily due to timing of research activities related to the collaboration agreement with Amgen in the second quarter of 2023 versus timing of research activities related to a collaboration and license agreement with Novartis Institutes for Biomedical Research, Inc. in the 2022 Quarter.

Research and development expenses for the second quarter ended June 30, 2023, were $21.2 million, compared to $14.5 million for the 2022 Quarter. The increase of $6.7 million was primarily driven by increased costs associated with clinical trial start-up fees and patient enrollment, increased personnel costs, and expansion of facilities.

General and administrative expenses for the second quarter ended June 30, 2023, were $6.5 million, compared to $4.8 million for the 2022 Quarter. The increase of $1.7 million in general and administrative expenses was primarily driven by increased legal fees related to transactions entered into during the second quarter of 2023.

For the second quarter ended June 30, 2023, TScan Therapeutics reported a net loss of $24.0 million, compared to a net loss of $15.1 million for the 2022 Quarter.

As of June 30, 2023, the Company had issued and outstanding shares of 47,818,766, which consists of 43,542,178 shares of voting common stock and 4,276,588 shares of non-voting common stock, and outstanding pre-funded warrants to purchase 47,010,526 shares of common stock at an exercise price of $0.0001 per share.

On August 10, 2023 Theseus Pharmaceuticals, Inc. (NASDAQ: THRX) (Theseus or the Company), a clinical-stage biopharmaceutical company focused on improving the lives of cancer patients through the discovery, development, and commercialization of transformative targeted therapies, reported business highlights and highlighted financial results for the second quarter ended June 30, 2023 (Press release, Theseus Pharmaceuticals, AUG 10, 2023, View Source [SID1234634219]).

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"We are excited to be advancing our pipeline, including lead candidate THE-349, a potential best-in-class fourth generation EGFR inhibitor, and continue to expect an IND submission for THE-349 in EGFR-mutant NSCLC in the fourth quarter of this year. Additionally, we look forward to nominating development candidates from our BCR-ABL and next-generation KIT programs in the first half of next year," said Tim Clackson, Ph.D., President and Chief Executive Officer of Theseus. "While we are disappointed by the outcome of the THE-630 program in GIST patients, we believe the update announced today supports the exploration of THE-630 in mast cell-driven diseases, which we anticipate pursuing internally or through a partnership."

Pipeline Highlights and Upcoming Expected Milestones:

THE-349 is a fourth-generation epidermal growth factor receptor (EGFR) tyrosine kinase inhibitor (TKI) product candidate with activity against single-, double-, and triple-mutant EGFR variants, including T790M and C797X, found in EGFR-mutant non-small cell lung cancer (NSCLC) that has developed resistance to first- or later-line osimertinib.
•Preclinical data demonstrate that THE-349 can potently inhibit all major classes of EGFR activating and resistance mutations observed in a post-first- or later-line osimertinib setting, possesses kinome and wild-type EGFR selectivity, and has central nervous system (CNS) activity.
•IND-enabling toxicology studies have been completed, and Theseus remains on track to submit an Investigational New Drug Application (IND) for THE-349 in the fourth quarter of 2023, and commence its clinical program as soon as possible thereafter, subject to clearance of the IND by the U.S. Food and Drug Administration.
BCR-ABL Program: Theseus is aiming to develop a potent and selective, next-generation, pan-variant BCR-ABL TKI candidate that optimizes the balance of safety and efficacy for patients with relapsed/refractory chronic myelogenous leukemia (CML) and patients with newly diagnosed Philadelphia chromosome-positive (Ph+) acute lymphoblastic leukemia (ALL).
•Theseus plans to pursue clinical development in patients with CML who have been previously treated with a second-generation TKI or have the T315I mutation, and in newly diagnosed patients with Ph+ ALL.
•Preclinically, Theseus lead molecules have shown a high degree of potency against BCR-ABL and clinically relevant resistance mutations, such as the T315I gatekeeper mutation, and substantial kinome selectivity.
•Theseus expects to nominate a development candidate for this program in the first half of 2024.

Next-Generation KIT Program: Theseus is aiming to develop a potent and selective pan-variant TKI candidate targeting all major activating and resistance KIT mutations for treatment of early-line gastrointestinal stromal tumors (GIST).
•Theseus has maintained an extensive medicinal chemistry effort to target KIT, which has led to the discovery of a series of chemically distinct, highly selective, pan-variant KIT inhibitors for the treatment of early-line GIST.
•Theseus plans to nominate a development candidate from this series in the first half of 2024.
THE-630: In July, Theseus discontinued enrollment in its phase 1/2 study of THE-630 in patients with GIST. Theseus subsequently analyzed trial data to inform the feasibility of developing low dose THE-630 for KIT-associated mast cell-driven inflammatory indications.

•Theseus measured levels of serum tryptase, a biomarker for mast cell activation, in GIST patients treated with once-daily oral THE-630 in the phase 1 dose escalation trial at doses of 4 mg to 18 mg.
•Dose-dependent and sustained reductions in serum tryptase observed at all doses, including reductions below detection limit of the assay in some patients, seen at first timepoint (day 8).
•Theseus is evaluating next steps for potential plans to explore doses of 9 mg and below in clinical studies in patients with mast cell-driven diseases, such as chronic urticaria. The safety profile at these doses was generally favorable in GIST patients.

Second Quarter Financial Results:

Cash Position: As of June 30, 2023, Theseus had cash, cash equivalents, and marketable securities of $234.2 million, as compared to $211.8 million as of December 31, 2022. Theseus expects its current cash, cash equivalents, and marketable securities to fund operations and capital expenditures into 2026 based on its current operating plan.
R&D Expenses: Research and development expenses were $12.9 million for the second quarter of 2023, as compared to $7.3 million for the same period in 2022. This increase was primarily due to a $2.1 million increase in expense for preclinical studies and drug manufacturing to support THE-349 IND enabling studies, a $1.2 million increase in development expense related to discovery programs, as well as a $1.6 million increase in employee-related costs driven by an increase in headcount.

G&A Expenses: General and administrative expenses were $4.7 million for the second quarter of 2023, consistent with the expense for the same period in 2022.
Net Loss: Net loss was $14.8 million for the second quarter of 2023, as compared to a net loss of $11.6 million for the same period in 2022.

On August 10, 2023 Tempest Therapeutics, Inc. (Nasdaq: TPST), a clinical-stage oncology company developing first-in-classi therapeutics that combine both targeted and immune-mediated mechanisms, reported financial results for the quarter ended June 30, 2023 and provided a corporate update (Press release, Tempest Therapeutics, AUG 10, 2023, View Source [SID1234634218]).

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"2023 continues to be a productive and potentially transformative year for Tempest," said Stephen Brady, chief executive officer of Tempest. "In the second quarter, we presented data from our second clinical program, TPST-1495, the company’s novel dual EP2/EP4 antagonist designed to selectively modulate the prostaglandin pathway, both at ASCO (Free ASCO Whitepaper) and in a paper published in Cancer Research Communications. These presentations were made on the heels of announcing early exciting triplet data from our lead TPST-1120 program demonstrating a clinically-meaningful improvement over standard of care alone in first-line HCC patients in an ongoing, global, randomized Phase 1b/2 study. We expect to be able to discuss an updated and comprehensive data set from the formal review of this trial in the second half of 2023."

Recent Highlights

TPST-1120 (clinical PPARα antagonist): announced positive early results from the ongoing randomized first-line HCC study comparing TPST-1120 combined with the standard-of-care regimen of atezolizumab and bevacizumab, with head-to-head to standard-of-care alone. The data were positive in multiple categories, and demonstrated a favorable safety profile:
Unconfirmed responses of 30% for the TPST-1120 triplet arm (12/40) vs. 17.2% for the active control arm (5/29), demonstrating a 74.4% relative improvement in objective response rate (ORR);
Confirmed responses of 17.5% for the TPST-1120 triplet arm (7/40) vs. 10.3% for the active control arm (3/29), demonstrating a 69.9% relative improvement in confirmed ORR;
47.5% (19/40) of the TPST-1120 arm patients are on treatment vs. 23.3% (7/30) in the control arm; and
80% (32/40) of the TPST-1120 arm patients are on study vs. 50% (15/30) in the control.ii
TPST-1495 (clinical dual EP2/4 prostaglandin receptor antagonist): (i) presented data from a Phase 1 study evaluating TPST-1495 as a monotherapy and in combination with the anti-PD-1 checkpoint inhibitor pembrolizumab in advanced solid tumors at the 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting; (ii) published mechanism of action data highlighting the increased potency of the molecule against prostaglandin-driven tumor models in Cancer Research Communications, a journal of the American Association for Cancer Research (AACR) (Free AACR Whitepaper); and (iii) continued enrollment of an endometrial cancer-specific arm investigating the two highest doses of TPST-1495 in combination with pembrolizumab.

Potential Upcoming Milestones

TPST-1120 (clinical PPARα antagonist): we expect to be able to discuss an updated and comprehensive data set from the formal review of the ongoing, global, randomized Phase 1b/2 study in first-line liver cancer patients in the second half of 2023.
TPST-1495 (clinical dual EP2/4 prostaglandin receptor antagonist): we plan to report data from the combination arm at the two highest TPST-1495 doses in patients with advanced endometrial cancer in 2024.
TREX1 Inhibitor (preclinical tumor-selective STING pathway activator): we expect to advance new proprietary small molecule series TREX1 inhibitors generated through insights resulting from human TREX1-inhibitor co-crystal structures.

Financial Results

Second Quarter 2023

Tempest ended the second quarter with $17.6 million in cash and cash equivalents, compared to $31.2 million on December 31, 2022.
Net loss and net loss per share for the quarter ended June 30, 2023 were $7.6 million and $0.54, respectively, compared to $9.2 million and $0.79, respectively, for the same period in 2022.
Research and development expenses for the quarter ended June 30, 2023 were $4.4 million compared to $5.7 million for the same period in 2022. The decrease was primarily due to a decrease in costs incurred from contract research organizations and third-party vendors, partially offset by an increase in personnel costs, as well as facilities expenses.
General and administrative expenses for the quarter ended June 30, 2023 were $3.1 million. The decrease was primarily due to a decrease in consulting and professional expenses.

Year-to-Date

Net cash used in operations for the six months ended June 30, 2023 was $14.7 million.
Net loss and net loss per share for the six months ended June 30, 2023 were $15.2 million and $1.09, respectively, compared to $17.7 million and $1.88, respectively, for the same period in 2022.
Research and development expenses for the six months ended June 30, 2023 were $9.1 million compared to $10.8 million for the same period in 2022. The $1.7 million decrease was primarily due to a decrease in costs incurred from contract research organizations and third-party vendors, partially offset by an increase in personnel costs, as well as facilities expenses.
General and administrative expenses for the six months ended June 30, 2023 were $6.0 million compared to $6.2 million for the same period in 2022. The $0.2 million decrease was primarily due to a decrease in consulting and professional expenses.

On August 10, 2023 Sutro Biopharma, Inc. (Sutro or the Company) (NASDAQ: STRO), a clinical-stage oncology company pioneering site-specific and novel-format antibody drug conjugates (ADCs), reported its financial results for the second quarter of 2023, its recent business highlights, and a preview of select anticipated milestones (Press release, Sutro Biopharma, AUG 10, 2023, View Source [SID1234634217]).

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"We are delighted with the initiation of the REFRaME study, a pivotal Phase 2/3 trial for patients with platinum-resistant ovarian cancer. The oral presentation at ASCO (Free ASCO Whitepaper) has generated significant interest of luvelta within the medical community, providing momentum for patient enrollment into REFRaME across our global sites," said Bill Newell, Sutro’s Chief Executive Officer. "Our financial position has been bolstered by the Blackstone royalty agreement, which helps to extend our cash runway into the first half of 2025. We remain committed to our pipeline progress and eagerly anticipate sharing updated data from the Phase 1 STRO-002-GM1 study in the second half of this year for ovarian and endometrial cancers."

Recent Business Highlights and Select Anticipated Milestones

STRO-002, International Nonproprietary Name, "luveltamab tazevibulin," abbreviated as "luvelta", FolRα-Targeting ADC: Luveltamab tazevibulin (luvelta) is being studied in the clinic globally for patients with ovarian and endometrial cancers.

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Data from the Phase 1 dose-expansion study for luvelta, in ovarian cancer were featured as an oral presentation at the 2023 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) (ASCO 2023) Annual Meeting in Chicago, IL in June 2023. Consistent with data reported in January 2023, luvelta demonstrated substantial clinical benefit in FolRα-selected patients, defined by a Tumor Proportion Score (TPS) of >25%, irrespective of staining intensity, in which the data collected has shown to represent approximately 80% of the advanced ovarian cancer patient population. Additionally, Sutro expects to release updated data from the Phase 1 STRO-002-GM1 study in patients with ovarian cancer in the second half of 2023.
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In June 2023, Sutro announced the initiation of REFRaME, a Phase 2/3 registration-directed study for patients with platinum-resistant ovarian cancer. Patient dosing has begun, and global sites have been activated, with additional sites expected this year. Once results are analyzed on ~110 patents with demonstrated high or unmet need, Sutro plans to apply for accelerated approval based on overall response rate (ORR) as the primary endpoint. At the end of the trial, full approval may be pursued based on progression-free survival (PFS) as the primary endpoint, comparing results from the luvelta arm and the standard of care arm.
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Patients with CBFA2T3::GLIS2 (CBF/GLIS; RAM phenotype) AML, a highly refractory and uniformly fatal subtype of acute myeloid leukemia found exclusively in infants and young children, were treated with luvelta under compassionate use. During the 64th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition (ASH 2022), an oral presentation was given by Soheil Meshinchi, M.D., Ph.D. summarizing preliminary results from compassionate use of luvelta in this rare indication, suggesting that luvelta was well tolerated as a monotherapy agent and in combination with standard cancer therapies. Sutro plans to initiate a pivotal, or registration-enabling protocol to pursue registration in this high unmet need, vastly underserved patient population.
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Additional ongoing clinical studies for luvelta include a combination study with bevacizumab for patients with advanced ovarian cancer and a dose-expansion study for patients with endometrial cancer. Sutro will present data from the Phase 1 dose expansion off luveltamab tazevibulin for patients with endometrial cancers as a Mini Oral Session at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2023 to be held October 20-24, 2023 in Madrid, Spain.
Title: Luveltamab Tazevibulin (STRO-002), an anti-Folate Receptor Alpha (FolRα) Antibody Drug Conjugate (ADC), Demonstrates Clinical Activity in Recurrent/Progressive Epithelial Endometrial Cancer (EEC): STRO-002-GM1 Phase 1 Dose Expansion

Session: Mini Oral Session 1 – Gynecological cancers

Date & Time: Sunday, October 22, 2023, 10:15am-11:45am CEST

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Translational work is ongoing to support an Investigational New Drug (IND) application for the initiation of a non-small cell lung cancer (NSCLC) study, for which submission is planned in 2023.
STRO-001, CD74-Targeting ADC: The Phase 1 study for patients with B‑cell malignancies has been completed in global sites ex-Greater China and clinical studies in Greater China have been initiated.

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Sutro has completed the Phase 1 dose-escalation study in patients with non-Hodgkin’s lymphoma (NHL) and multiple myeloma (MM), after reaching a maximum tolerated dose (MTD). Sutro plans to leverage the clinical data produced by its partner BioNova Pharma (BioNova) in Greater China to make future prioritization decisions regarding further clinical development.
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BioNova is advancing clinical development of BN301 (STRO-001) for patients with hematological malignancies in Greater China. In February 2023, BioNova announced that the first patient had been dosed in the Phase 1 clinical study of BN301 for the treatment of advanced non-Hodgkin’s lymphoma (NHL).
Additional Pipeline Development: STRO-003, a ROR1-targeting ADC and STRO-004, a tissue factor-targeting ADC have INDs planned for Q1 2024 and Q1 2025, respectively.

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STRO-003, a novel, next-generation ADC that has been designed to target ROR1, features eight precisely placed β-Glucuronidase-cleavable linkers attached to next-generation exatecan warheads, which, when released, inhibit topoisomerase-1 (TOPO-1) and cause DNA disruption.
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Expanded preclinical data for STRO-003 was presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April 2023, demonstrating potent anti-tumor activity and immune-modulating properties, suggesting that STRO-003 may have the potential to augment checkpoint blockade therapy.
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STRO-003 has demonstrated, in NSCLC and breast cancer patient-derived xenograft models, strong cell-killing activity in low and heterogeneous ROR1-expressing tumors. STRO-003 has also exhibited promising tolerability in preclinical studies involving rodents and non-human primates, with potentially reduced lung toxicity relative to other TOPO-1 inhibiting ADCs.
Collaboration Updates: Sutro continues to seek to maximize the value of its proprietary cell-free platform by working with partners on programs in multiple disease spaces and geographies and has generated from collaborators an aggregate of approximately $772 million in payments through June 30, 2023, including equity investments.

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In June 2023, Sutro announced a royalty monetization agreement with Blackstone Life Sciences, an affiliate of Blackstone, under which Sutro received $140 million upfront and is eligible to receive up to an additional $250 million in future milestone payments in exchange for the 4% royalty, or revenue interest, in potential future sales of Vaxcyte’s products. This transaction with Blackstone provides non-dilutive capital to Sutro for continued pipeline advancement. Sutro retains the right to discover and develop vaccines for the treatment or prophylaxis of any disease that is not caused by an infectious pathogen, including cancer.
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In December 2022, Sutro and Vaxcyte expanded upon a nearly decade-long relationship through a new agreement, under which Vaxcyte acquired an option to access expanded rights to develop and manufacture cell-free extract, among other rights, and includes a $22.5 million upfront payment and, upon exercise of the option, up to an additional $135 million in option exercise and contingent payments.
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Sutro’s collaboration with Astellas on the discovery of immunostimulatory antibody-drug conjugates (iADCs) for three targets is ongoing, for which Sutro receives financial support for its research efforts, potential milestone payments and royalties, and has an option to co-develop and co-commercialize product candidates in the U.S.
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Sutro is manufacturing initial drug supply for its partners including for Merck’s MK-1484, currently in Phase 1 as monotherapy and in combination with pembrolizumab in advanced or metastatic solid tumors. Sutro is providing clinical drug supply to BioNova for clinical studies for BN301 (STRO-001) in Greater China. Sutro is currently supporting Tasly Biopharmaceuticals (Tasly) for their IND filing and the initiation of clinical development activities in Greater China for STRO-002 and will provide initial clinical drug supply.
Corporate Updates: Sutro continues to strengthen its Research team.

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Gang Yin, Ph.D., has been promoted to Vice President, Platform and Process Sciences, and will continue to lead protein biochemistry efforts and serve as a key interface with other Sutro teams working on its cell-free technology and platform.
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Alice Yam, Ph.D., has been promoted to Vice President, Drug Discovery, and will lead pharmacology efforts and continue to provide leadership for pre-clinical efforts on Sutro’s emerging product development candidates.
Second Quarter 2023 Financial Highlights

Cash, Cash Equivalents and Marketable Securities

As of June 30, 2023, Sutro had cash, cash equivalents and marketable securities of $358.3 million, as compared to $251.5 million as of March 31, 2023, and approximately 0.7 million shares of Vaxcyte common stock with a fair value of $33.3 million, which together provide a projected cash runway into the first half of 2025, based on current business plans and assumptions.

Unrealized Gain from Increase in Value of Vaxcyte Common Stock

The non-operating, unrealized gain of $8.3 million in the quarter ended June 30, 2023 was due to the

increase since March 31, 2023 in the estimated fair value of Sutro’s holdings of Vaxcyte common stock. Vaxcyte common stock held by Sutro will be remeasured at fair value based on the closing price of Vaxcyte’s common stock on the last trading day of each reporting period, with any non-operating, unrealized gains and losses recorded in Sutro’s statements of operations.

Revenue

Revenue was $10.4 million for the quarter ended June 30, 2023, as compared to $28.1 million for the same period in 2022, with the 2023 amount related principally to the Astellas, Merck and BMS collaborations. Future collaboration and license revenue under existing agreements, and from any additional collaboration and license partners, will fluctuate as a result of the amount and timing of revenue recognition of upfront, milestones, and other agreement payments.

Operating Expenses

Total operating expenses for the quarter ended June 30, 2023 were $56.6 million, as compared to $47.5 million for the same period in 2022. The second quarter 2023 amount includes non-cash expenses for stock-based compensation of $6.7 million and depreciation and amortization of $1.7 million, as compared to $6.7 million and $1.4 million, respectively, in the comparable 2022 period. Total operating expenses for the quarter ended June 30, 2023 were comprised of research and development expenses of $41.6 million and general and administrative expenses of $15.0 million, which are expected to increase in the remainder of 2023 as Sutro’s internal product candidates advance in clinical development and additional general and administrative expenses are incurred as a public company.

Royalty Monetization Agreement

As related to the royalty monetization agreement between Sutro and an affiliate of Blackstone Life Sciences, Sutro received in June 2023 a $140.0 million upfront payment and is eligible to receive up to an additional $250.0 million in future milestone payments. Sutro recorded the $140.0 million upfront payment from Blackstone as a deferred royalty obligation related to the sale of future royalties on the Company’s condensed Balance Sheets as of June 30, 2023. Due to the Company’s ongoing manufacturing obligations, the Company accounted for the proceeds as imputed debt and will recognize future non-cash royalty revenues. Non-cash interest expense will be recognized over the estimated life of the royalty term arrangement using the effective interest method based on the imputed interest rate derived from estimated amounts and timing of future royalty payments to be received from Vaxcyte. As part of the sale, Sutro incurred approximately $3.8 million in transaction costs, which are being amortized over the estimated life of the royalty term arrangement using the effective interest method. As future royalties are earned from Vaxcyte by Blackstone, the balance of the deferred royalty obligation will be amortized over the estimated life of the royalty term arrangement.

On August 10, 2023 Soligenix, Inc. (Nasdaq: SNGX) (Soligenix or the Company), a late-stage biopharmaceutical company focused on developing and commercializing products to treat rare diseases where there is an unmet medical need, reported that patient enrollment has been opened for the investigator-initiated study (IIS) at the University of Pennsylvania, supported by a $2.6 million Orphan Products Development grant award by the U.S. Food and Drug Administration (FDA) (Press release, Soligenix, AUG 10, 2023, View Source [SID1234634216]). The IIS will evaluate the expanded treatment, including up to 12 months of treatment, with HyBryte (synthetic hypericin) in patients with early-stage cutaneous T-cell lymphoma (CTCL). The trial is sponsored by Ellen Kim, MD, Director, Penn Cutaneous Lymphoma Program, Vice Chair of Clinical Operations, Dermatology Department, and Professor of Dermatology at the Hospital of the University of Pennsylvania who was a leading enroller in the recently published positive Phase 3 FLASH (Fluorescent Light Activated Synthetic Hypericin) study in the treatment of early-stage CTCL.

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"In the Phase 3 FLASH study, HyBryte was shown to be efficacious with a promising safety profile. CTCL patients are often searching for alternative treatments, with limited options especially for early-stage disease. HyBryte offers a distinct treatment option which patients found extremely useful and continue to specifically request. We look forward to demonstrating the expanded use of HyBryte in a "real world" setting and thank both the FDA and Soligenix for their support of this study," noted Dr. Kim, principal investigator of the IIS, RW-HPN-MF-01.

"We are pleased the FDA is supporting the HyBryte program and giving patients an opportunity to access the therapy in an open-label setting," stated Christopher J. Schaber, President and CEO of Soligenix, Inc. "CTCL is an incredibly difficult to treat orphan disease and remains an area of unmet medical need with a very limited number of safe and effective treatment options. With the demonstration of statistical significance in the primary endpoint and continued improvement in treatment response with extended treatment in our published Phase 3 FLASH study, we are continuing discussions with FDA on the design of a second confirmatory Phase 3 study. This IIS has the potential to augment the expanding safety database for synthetic hypericin, as well as provide further real-world evidence into the practical use of HyBryte once commercially available."

The clinical study RW-HPN-MF-01, "Assessment of Treatment with Visible Light Activated Synthetic Hypericin Ointment in Mycosis Fungoides Patients" is designed as an open-label, multicenter clinical trial enrolling approximately 50 patients at select high enrolling clinical centers that participated in the Phase 3 FLASH study. Patients have the potential to be treated for up to 12 months with twice a week dosing (visible light activation to follow ointment application by 24 ± 6 hours). The study also allows for potential transition to the home-use setting. The primary endpoint for the study will be evaluating the number of treatment successes defined as ≥50% reduction in the cumulative CAILS (Composite Assessment of Index Lesion Severity) score from baseline to end of the treatment.

About HyBryte

HyBryte (research name SGX301) is a novel, first-in-class, photodynamic therapy utilizing safe, visible light for activation. The active ingredient in HyBryte is synthetic hypericin, a potent photosensitizer that is topically applied to skin lesions that is taken up by the malignant T-cells, and then activated by visible light approximately 24 hours later. The use of visible light in the red-yellow spectrum has the advantage of penetrating more deeply into the skin (much more so than ultraviolet light) and therefore potentially treating deeper skin disease and thicker plaques and lesions. This treatment approach avoids the risk of secondary malignancies (including melanoma) inherent with the frequently employed DNA-damaging drugs and other phototherapy that are dependent on ultraviolet exposure. Combined with photoactivation, hypericin has demonstrated significant anti-proliferative effects on activated normal human lymphoid cells and inhibited growth of malignant T-cells isolated from CTCL patients. In a published Phase 2 clinical study in CTCL, patients experienced a statistically significant (p=0.04) improvement with topical hypericin treatment whereas the placebo was ineffective. HyBryte has received orphan drug and fast track designations from the FDA, as well as orphan designation from the European Medicines Agency (EMA).

The recently published Phase 3 FLASH trial enrolled a total of 169 patients (166 evaluable) with Stage IA, IB or IIA CTCL. The trial consisted of three treatment cycles. Treatments were administered twice weekly for the first 6 weeks and treatment response was determined at the end of the 8th week of each cycle. In the first double-blind treatment cycle, 116 patients received HyBryte treatment (0.25% synthetic hypericin) and 50 received placebo treatment of their index lesions. A total of 16% of the patients receiving HyBryte achieved at least a 50% reduction in their lesions (graded using a standard measurement of dermatologic lesions, the CAILS score) compared to only 4% of patients in the placebo group at 8 weeks (p=0.04) during the first treatment cycle (primary endpoint). HyBryte treatment in the first cycle was safe and well tolerated.

In the second open-label treatment cycle (Cycle 2), all patients received HyBryte treatment of their index lesions. Evaluation of 155 patients in this cycle (110 receiving 12 weeks of HyBryte treatment and 45 receiving 6 weeks of placebo treatment followed by 6 weeks of HyBryte treatment), demonstrated that the response rate among the 12-week treatment group was 40% (p<0.0001 vs the placebo treatment rate in Cycle 1). Comparison of the 12-week and 6-week treatment groups also revealed a statistically significant improvement (p<0.0001) between the two groups, indicating that continued treatment results in better outcomes. HyBryte continued to be safe and well tolerated. Additional analyses also indicated that HyBryte is equally effective in treating both plaque (response 42%, p<0.0001 relative to placebo treatment in Cycle 1) and patch (response 37%, p=0.0009 relative to placebo treatment in Cycle 1) lesions of CTCL, a particularly relevant finding given the historical difficulty in treating plaque lesions in particular.

The third (optional) treatment cycle (Cycle 3) was focused on safety and all patients could elect to receive HyBryte treatment of all their lesions. Of note, 66% of patients elected to continue with this optional compassionate use / safety cycle of the study. Of the subset of patients that received HyBryte throughout all 3 cycles of treatment, 49% of them demonstrated a positive treatment response (p<0.0001 vs patients receiving placebo in Cycle 1). Moreover, in a subset of patients evaluated in this cycle, it was demonstrated that HyBryte is not systemically available, consistent with the general safety of this topical product observed to date. At the end of Cycle 3, HyBryte continued to be well tolerated despite extended and increased use of the product to treat multiple lesions.

Overall safety of HyBryte is a critical attribute of this treatment and was monitored throughout the three treatment cycles (Cycles 1, 2 and 3) and the 6-month follow-up period. HyBryte’s mechanism of action is not associated with DNA damage, making it a safer alternative than currently available therapies, all of which are associated with significant and sometimes fatal, side effects. Predominantly these include the risk of melanoma and other malignancies, as well as the risk of significant skin damage and premature skin aging. Currently available treatments are only approved in the context of previous treatment failure with other modalities and there is no approved front-line therapy available. Within this landscape, treatment of CTCL is strongly motivated by the safety risk of each product. HyBryte potentially represents the safest available efficacious treatment for CTCL. With very limited systemic absorption, a compound that is not mutagenic and a light source that is not carcinogenic, there is no evidence to date of any potential safety issues.

The Phase 3 CTCL clinical study was partially funded by the National Cancer Institute via a Phase II SBIR grant (#1R44CA210848-01A1) awarded to Soligenix, Inc. In addition, the FDA awarded an Orphan Products Development grant to support the evaluation of HyBryte for expanded treatment in patients with early-stage CTCL, including in the home use setting. The grant, totaling $2.6 million over 4 years, was awarded to the University of Pennsylvania that was a leading enroller in the Phase 3 FLASH study.

About Cutaneous T-Cell Lymphoma (CTCL)

CTCL is a class of non-Hodgkin’s lymphoma (NHL), a type of cancer of the white blood cells that are an integral part of the immune system. Unlike most NHLs which generally involve B-cell lymphocytes (involved in producing antibodies), CTCL is caused by an expansion of malignant T-cell lymphocytes (involved in cell-mediated immunity) normally programmed to migrate to the skin. These malignant cells migrate to the skin where they form various lesions, typically beginning as patches and may progress to raised plaques and tumors. Mortality is related to the stage of CTCL, with median survival generally ranging from about 12 years in the early stages to only 2.5 years when the disease has advanced. There is currently no cure for CTCL. Typically, CTCL lesions are treated and regress but usually return either in the same part of the body or in new areas.

CTCL constitutes a rare group of NHLs, occurring in about 4% of the approximate 700,000 individuals living with the disease. It is estimated, based upon review of historic published studies and reports and an interpolation of data on the incidence of CTCL that it affects over 25,000 individuals in the U.S., with approximately 3,000 new cases seen annually.