On August 13, 2020 Ayala Pharmaceuticals, Inc. (Nasdaq: AYLA) (the Company or Ayala), a clinical-stage oncology company focused on developing and commercializing small molecule therapeutics for patients suffering from rare and aggressive cancers, primarily in genetically defined patient populations, reported financial results for the second quarter ended June 30, 2020 and highlighted recent progress and upcoming milestones for its pipeline programs (Press release, Ayala Pharmaceuticals, AUG 13, 2020, View Source [SID1234563990]).

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"Our successful IPO in the second quarter represents an important step for Ayala as we work to make meaningful strides across our exciting programs. With a well-capitalized foundation on which to further develop our novel pipeline of therapies for genetically defined cancers, we are poised to execute across multiple milestones in the remainder of 2020 and through the first half of 2021," said Roni Mamluk, Ph.D., Chief Executive Officer of Ayala. "We are looking forward to presenting new interim data from our Phase 2 ACCURACY study of AL101 for the treatment of ACC in September 2020, while also continuing to dose patients in the 6mg dose cohort of the study. Now more than ever, the need for innovation and drug development is evident and we are pleased by the additional clinical progress we have made to-date. This quarter our IND was accepted for our Phase 2 TENACITY study of AL101 monotherapy in patients with recurrent or metastatic triple negative breast cancer who have undergone up to three prior lines of therapy and we are on track to begin dosing patients this year."

Key Business and Clinical Highlights

Phase 2 TENACITY Study of AL101 For Treatment of Triple Negative Breast Cancer: In April 2020, the U.S. Food and Drug Administration (FDA) accepted the investigational new drug application (IND) for the Phase 2 TENACITY study of AL101 for the treatment of Triple Negative Breast Cancer (TNBC). The FDA approved the dosing to commence at 6mg in a monotherapy study to evaluate TNBC patients bearing Notch activating mutations who have undergone 3 or fewer prior lines of therapy. Ayala has opened its first U.S. clinical site for the study.
Upcoming Milestones

New Interim Data from Phase 2 ACCURACY Study of AL101 for the Treatment of Recurrent/Metastatic Adenoid Cystic Carcinoma to be Presented at European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Virtual Congress 2020: Ayala will provide an oral presentation of new interim data from its ongoing Phase 2 ACCURACY study of AL101 for the treatment of recurrent/metastatic adenoid cystic carcinoma (R/M ACC) harboring Notch activating mutations at the upcoming ESMO (Free ESMO Whitepaper) Virtual Congress 2020 on September 18, 2020, at 03:55 CEST.

On Track to Begin Patient Dosing in Phase 2 TENACITY Study of AL101 for the Treatment of TNBC: Ayala expects to initiate patient dosing before year-end 2020 in the Phase 2 TENACITY study of AL101 for the treatment of TNBC harboring Notch activating mutations.

On Track to Initiate Two Phase 2 Clinical Trials in 2021:

Phase 2 Study of AL102 for the Treatment of Desmoid Tumors: Ayala expects to initiate a Phase 2 study of AL102, a potent, selective, oral gamma secretase inhibitor, in patients with desmoid tumors, a category of rare, disfiguring and often debilitating soft tissue tumors, in the first half of 2021.

Phase 2 Study of AL101 for the Treatment of Relapsed or Refractory T-cell Acute Lymphoblastic Leukemia: Based on findings from Ayala’s Phase 1 study of AL101 and supporting data from its preclinical studies, Ayala expects to initiate a Phase 2 study of AL101 for the treatment of relapsed or refractory T-cell acute lymphoblastic leukemia (R/R T-ALL), an aggressive and rare form of T-cell specific leukemia, in the first half of 2021.
Second Quarter 2020 Financial Results

Cash Position: Cash and cash equivalents were $57.4 million as of June 30, 2020, as compared to $16.7 million as of December 31, 2019. Ayala expects its existing cash balance to fund operations through multiple potential key clinical and development milestones into the second half of 2022.

Collaboration Revenue: Collaboration revenue was $1.0 million for the second quarter of 2020 compared to $0.9 million for the same period in 2019. The increase in revenue was attributed to the advancement of Ayala’s collaboration with Novartis for the development of AL102 in combination with Novartis’ anti-B-cell maturation antigen agent.

R&D Expenses: Research and development expenses were $5.1 million for the second quarter of 2020, compared to $3.4 million for the same period in 2019. The increase was primarily driven by additional costs in connection with the advancement of AL101 trials and other preclinical development.

G&A Expenses: General and administrative expenses were $1.5 million for the second quarter of 2020, compared to $1.0 million for the same period in 2019. The increase was primarily related to higher professional services and personnel costs to support the growth of the Company.

Net Income/Loss: Net loss was $6.7 million, or $0.74 loss per share, for the second quarter of 2020, compared to $3.8 million, or $0.76 loss per share, for the same period in 2019, mainly attributable to the advancement of the clinical trials and other preclinical development.