On August 9, 2021 Avidity Biosciences, Inc. (Nasdaq: RNA), a biopharmaceutical company committed to delivering a new class of RNA therapeutics called Antibody Oligonucleotide Conjugates (AOCs), reported financial results for the second quarter and six months ended June 30, 2021 and highlighted recent corporate progress (Press release, Avidity Biosciences, AUG 9, 2021, View Source [SID1234586123]).

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"The FDA clearance to proceed with our AOC 1001 Phase 1/2 MARINA trial in adults with myotonic dystrophy (DM1) is a huge milestone for Avidity and our AOC platform. AOC 1001 will be the first program based on our novel technology to enter clinical development. This also marks an important step forward for the DM1 community who have no approved therapies and so desperately needs therapeutic options," said Sarah Boyce, president and chief executive officer. "In addition, over the past quarter we made significant advances in our pipeline including nominating AOC 1044 as the clinical development candidate for our lead DMD program. We remain on track for both AOC 1044 and our AOC FSHD program to advance into the clinic in 2022."

"We are well funded with $280 million at the end of Q2’21, along with an additional $155 million in estimated net proceeds from our successful financing in August 2021. Our strong financial position allows us to further progress our late stage programs while continuing to invest in our skeletal muscle pipeline and our AOC platform," said Mike MacLean, chief financial officer.

AOC Platform and Pipeline Highlights

Received FDA clearance to proceed with clinical studies for AOC 1001 in adults with DM1.

Avidity recently received clearance to proceed with the Phase 1/2 MARINA trial of AOC 1001 in adults with DM1, under its Investigational New Drug application (IND). Avidity continues to be on track to initiate the Phase 1/2 MARINA clinical trial this year. In the second half of 2022, the Company plans to conduct a preliminary assessment of safety, tolerability and key biomarkers.

Detailed information on the MARINA study was presented during Volume 2 of Avidity’s virtual investor and analyst event series. Volume 2 featured presentations on AOC 1001, the MARINA study and a presentation on the clinical impact of DM1 by Nicholas E. Johnson, MD, MSCI, FAAN, an associate professor, division chief of neuromuscular, and vice chair of research in the department of neurology at Virginia Commonwealth University. The event also featured a live Q&A session with Avidity’s management team and Dr. Johnson. Volume 2 in the series follows Volume 1 which was focused on the years of engineering underpinning Avidity’s AOC platform and AOC 1001. Replays of Volume 1 and Volume 2 can be found on the events page in the investors section of the Avidity website.

In July, the FDA granted Orphan Drug Designation for AOC 1001 for the treatment of DM1. The FDA grants Orphan Drug Designation to novel drugs that seek to treat a rare disease or condition and, if the drug is approved for the designated orphan indication, provides 7 years of market exclusivity, along with certain financial incentives, including tax credits, opportunities for grant funding towards clinical trial costs and FDA user-fee waivers.

In May, Avidity reported results from its IND-enabling toxicology study of AOC 1001. Results from the study showed the highest dose tested was the maximum feasible dose and was the no-observed adverse effect level (NOAEL). The Company did not observe any treatment-related histopathologic toxicity or any changes in safety pharmacology parameters (cardiac, respiratory and neurological). All dose levels in the study produced a greater than 80% reduction in the expression of dystrophy myotonic protein kinase (DMPK) across multiple skeletal muscles, demonstrating that pharmacology was essentially saturated even at the lowest dose tested.
Progressed Skeletal Muscle Pipeline including nominating AOC 1044 to move into IND-enabling studies.

AOC 1044 was recently nominated as the clinical development candidate for the DMD program targeting Exon 44. AOC 1044 is entering into IND-enabling studies and is on track with plans to advance into the clinic in 2022.

Data from the AOC FSHD program targeting facioscapulohumeral muscular dystrophy (FSHD) was presented at the 28th Annual FSHD Society International Research Congress (IRC) in June. The data demonstrated promising preclinical activity in both in vitro and in vivo experiments in the cells of patients with FSHD.
Second Quarter 2021 Financial Results

Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents and marketable securities totaled $279.5 million as of June 30, 2021, compared to $328.1 million as of December 31, 2020.
Collaboration Revenue: Collaboration revenue, including reimbursable expenses, primarily relates to Avidity’s partnership with Eli Lilly and Company and totaled $2.6 million for the second quarter of 2021 compared with $1.5 million for the second quarter of 2020, and $5.3 million for the first six months of 2021 compared with $2.9 million for the first six months of 2020.
Research and Development (R&D) Expenses: R&D expenses include external and internal costs associated with research and development activities. These expenses were $22.7 million for the second quarter of 2021 compared with $9.0 million for the second quarter of 2020, and $43.4 million for the first six months of 2021 compared with $14.5 million for the first six months of 2020. The increases were primarily driven by the advancement of AOC 1001, AOC 1044 and our AOC FSHD program, as well as costs related to the expansion of our overall research capabilities.
General and Administrative (G&A) Expenses: G&A expenses primarily consist of employee-related expenses, professional fees, insurance costs, and patent filing and maintenance fees. These expenses were $6.3 million for the second quarter of 2021 compared with $2.9 million for the second quarter of 2020, and $12.2 million for the first six months of 2021 compared with $4.9 million for the first six months of 2020. The increases were primarily due to higher personnel costs (including noncash stock-based compensation), professional fees and insurance costs related to being a public company.