On March 2, 2020 Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) ("Eagle" or the "Company") reported financial results for the three and twelve months ended December 31, 2019 (Press release, Eagle Pharmaceuticals, MAR 2, 2020, View Source [SID1234555063]).

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Business and Recent Highlights:

On a non-GAAP basis, invested $14 million, or $0.63 per diluted share in Q4 2019, to advance the Company’s pipeline, bringing total R&D, plus legal expenses related to Vasopressin and PEMFEXY, for the full year to $43 million, or $2.30 per diluted share.
Received final approval from FDA for its novel product, PEMFEXY (ready-to-dilute pemetrexed for injection), a branded alternative to ALIMTA. This approval follows the Company’s settlement agreement with Eli Lilly and Company in December 2019 and allows for an initial entry of PEMFEXY (equivalent to approximately a three-week supply of current ALIMTA utilization) on February 1, 2022, and a subsequent uncapped entry on April 1, 2022.
Entitled to a milestone payment from Japanese licensing partner SymBio, upon approval of its ready-to-dilute bendamustine product, TREAKISYM, expected in September; future royalties and milestones could range from $10 million to $25 million per year for launches of the 500 ml bag and then the 50 ml bag.
Announced collaboration and agreement on terms for an exclusive worldwide license with the University of Pennsylvania ("UPenn") for the development of dantrolene sodium for the potential treatment of people living with Alzheimer’s disease. At the 2019 Alzheimer’s Association International Conference in July, Eagle and UPenn shared results from a proof-of-concept preclinical study documenting that intranasal administration of dantrolene sodium provided therapeutic effects on memory and cognition in an animal model.
Resubmitted New Drug Application ("NDA") for RYANODEX for the treatment of exertional heat stroke ("EHS"), in conjunction with body cooling, to FDA. Eagle anticipates approval by its PDUFA date of July 8, 2020, with the potential to be commercially available for the upcoming heat season.
Announced a strategic collaboration with TYME Technologies to advance pivotal trials and commercialization of SM-88, an investigational oral tyrosine derivative that is believed to interrupt the metabolic processes of cancer cells, leading to cell death through oxidative stress and exposure to the body’s immune system. Eagle will be responsible for 25% of the promotional sales efforts of SM-88 and will receive 15% of net revenues of SM-88 in the United States. TYME retains all commercial rights to SM-88 outside the U.S. and reserves the right to repurchase Eagle’s U.S. co-promotion right for $200 million.
Entered into a research agreement with NorthShore University HealthSystem to study dantrolene sodium for the treatment of traumatic brain injury ("TBI"), including concussion, for which there are currently no drug treatments. A readout of data on the current animal studies is expected later this year. After completion of the study, Eagle plans to meet with the FDA and discuss the path forward, including the design of human studies.
Granted Orphan Drug Designation by FDA for RYANODEX for the treatment of exposure to organophosphates, a class of chemicals that includes potent pesticides and chemical weapons, known as nerve agents ("NA").
Eagle is currently working on the design of a second study for RYANODEX for the treatment of brain damage secondary to NA exposure. This indication is being developed under the FDA’s "Animal Rule," which requires that efficacy studies are conducted in two animal species. The Company expects to commence the study this year, with the intention to file an NDA for this indication before year-end 2020.
Completed dosing in pilot clinical study of its innovative fulvestrant product candidate, a novel therapeutic that has the potential to enhance estrogen receptor ("ER") inhibition and improve patient outcomes in ER positive breast cancer patients. Initial data from the pilot study has not yielded the anticipated results. The Company has additional clinical work under way and remains encouraged about the outcome of this important program.
Financial Highlights

Fourth Quarter 2019

Total revenue for Q4 2019 was $48.3 million, compared to $56.1 million in Q4 2018, primarily reflecting lower product sales of BENDEKA and RYANODEX and lower argatroban royalty revenue, partially offset by higher product sales of BELRAPZO and higher BENDEKA royalty revenue following an increase in the royalty rate effective October 1, 2019.
Q4 2019 net income was $1.0 million, or $0.07 per basic and diluted share, compared to net income of $12.6 million, or $0.88 per basic and $0.86 per diluted share in Q4 2018.
Q4 2019 adjusted non-GAAP net income was $6.7 million, or $0.49 per basic and $0.48 per diluted share, compared to adjusted non-GAAP net income of $17.7 million, or $1.23 per basic and $1.20 per diluted share, in Q4 2018.
Cash and cash equivalents were $109.8 million, net accounts receivable was $48.0 million, and debt was $39.0 million as of December 31, 2019.
Full Year 2019

Total revenue for the 12 months ended December 31, 2019 was $195.9 million, compared to $213.3 million in 2018. 2019 included a $9.0 million milestone payment for BENDEKA.
2019 net income was $14.3 million, or $1.04 per basic and $1.01 per diluted share, compared to net income of $31.9 million, or $2.16 per basic and $2.09 per diluted share in 2018.
2019 adjusted non-GAAP net income was $36.9 million, or $2.68 per basic and $2.61 per diluted share, compared to adjusted non-GAAP net income of $59.2 million, or $4.01 per basic and $3.87 per diluted share in 2018.
From August 2016 through December 31, 2019, Eagle has repurchased $171.9 million of its common stock.
"Based on the current strength of our marketed products, and assuming an on-time approval for RYANODEX for exertional heat stroke and an affirmation of our orphan drug decision by the Appellate Court for BENDEKA, we believe that 2020 could be the best year in Eagle’s history in terms of total revenue and gross profit. We believe we are at the start of what could be a period of accelerated growth for Eagle," stated Scott Tarriff, Chief Executive Officer of Eagle Pharmaceuticals.

"We have multiple product candidates underway that have the potential to expand treatment options and provide first-in-class therapies to bridge significant care gaps across CNS/critical care and oncology patient populations. With a number of exciting studies under way in our critical care and oncology pipeline, we look forward to multiple data readouts this year, all of which will help us progress these important initiatives. We remain focused on realizing the full potential of our pipeline assets and creating value for our stakeholders," concluded Tarriff.

Fourth Quarter 2019 Financial Results

Total revenue for the three months ended December 31, 2019 was $48.3 million, as compared to $56.1 million for the three months ended December 31, 2018.

Q4 2019 BELRAPZO product sales were $7.6 million, compared to $6.8 million in Q4 2018.

Q4 2019 RYANODEX product sales were $3.5 million, compared to $5.1 million in Q4 2018.

Royalty revenue was $32.8 million in the fourth quarter of 2019, compared to $35.7 million in the fourth quarter of 2018. BENDEKA royalties were $32.4 million in the fourth quarter of 2019, compared to $31.9 million in the fourth quarter of 2018. A summary of total revenue is outlined below:

Three Months Ended December 31,

2019

2018

(unaudited)

(unaudited)

Revenue (in thousands):

Product sales

$15,421

$20,343

Royalty revenue

32,837

35,711

Total revenue

$48,258

$56,054

Gross Margin was 76% during the fourth quarter of 2019, as compared to 67% in the fourth quarter of 2018. The expansion in gross margin in the fourth quarter of 2019 was primarily driven by a decrease in BENDEKA product sales to our marketing partner, on which Eagle earns no profit, and the increase in BENDEKA royalty revenue.

R&D expense was $11.3 million for the fourth quarter of 2019, compared to $5.9 million in the fourth quarter of 2018. The increase is largely attributable to spending on fulvestrant and payroll expenses. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense during the fourth quarter of 2019 was $9.1 million.

SG&A expense in the fourth quarter of 2019 increased to $22.5 million compared to $15.5 million in the fourth quarter of 2018. External legal spend associated with litigation on pemetrexed and vasopressin, as well as payroll costs, account for the year-over-year increase. Excluding stock-based compensation and other non-cash and non-recurring items, fourth quarter 2019 SG&A expense was $17.8 million.

Net income for the fourth quarter of 2019 was $1.0 million, or $0.07 per basic and diluted share, compared to net income of $12.6 million, or $0.88 per basic and $0.86 per diluted share, in the fourth quarter of 2018, due to the factors discussed above.

Adjusted non-GAAP net income for the fourth quarter of 2019 was $6.7 million, or $0.49 per basic and $0.48 per diluted share, compared to adjusted non-GAAP net income of $17.7 million or $1.23 per basic and $1.20 per diluted share in the fourth quarter of 2018. For a full reconciliation of adjusted non-GAAP net income to the most comparable GAAP financial measures, please see the tables at the end of this press release.

Full Year 2019 Financial Results

Total revenue for the year ended December 31, 2019 was $195.9 million, as compared to $213.3 million for the year ended December 31, 2018. A summary of total revenue is outlined below:

Twelve Months Ended December 31,

2019

2018

Revenue (in thousands):

Product sales

$73,989

$70,835

Royalty revenue

112,903

142,927

License and other income

9,000

—

Total revenue

$195,892

$213,312

Product sales increased $3.6 million in the year ended December 31, 2019, primarily driven by increases in sales of BELRAPZO and BENDEKA. The increased sales were partially offset by decreases in product sales of RYANODEX due to lower volume on a low reorder cycle period and the discontinuation of Non-Alcohol Docetaxel Injection in September 2018. Royalty revenue totaled $112.9 million in 2019 compared to $142.9 million in 2018. BENDEKA royalties were $111.2 million in 2019, compared to $134.4 million in 2018. In 2019, Eagle received a milestone payment of $9 million for BENDEKA.

Gross margin was 69% in 2019, as compared to 71% in 2018. The compression in gross margin in 2019 was primarily driven by an increase in product sales of BELRAPZO, an increase in BENDEKA product sales to our marketing partner, on which Eagle earns no profit, the decrease in RYANODEX product sales, and the decrease in BENDEKA royalty revenue.

R&D expense decreased to $36.8 million in 2019, compared to $44.4 million in 2018, primarily reflecting a decrease in project spending for the Company’s fulvestrant formulation, partially offset by the cost of bringing vasopressin to market. Excluding stock-based compensation and other non-cash and non-recurring items, R&D expense in 2019 was $31.1 million.

SG&A expenses increased by $15.9 million to $76.4 million in 2019, compared to $60.5 million in 2018. External legal spend associated with litigation on pemetrexed and vasopressin, as well as payroll costs, account for the year-over-year increase. Excluding stock-based compensation and other non-cash and non-recurring items, SG&A expense in 2019 was $56.4 million.

Net income for the year ended December 31, 2019 was $14.3 million or $1.04 per basic and $1.01 per diluted share as compared to net income of $31.9 million or $2.16 per basic and $2.09 per diluted share for the year ended December 31, 2018, as a result of the factors discussed above.

Adjusted non-GAAP net income for 2019 was $36.9 million, or $2.68 per basic and $2.61 per diluted share, compared to adjusted non-GAAP net income of $59.2 million, or $4.01 per basic and $3.87 per diluted share in 2018.

2020 Expense Guidance

R&D spend in 2020, on a non-GAAP basis, is expected to be $46-$50 million, as compared to $31.1 million in 2019.
SG&A spend in 2020, on a non-GAAP basis, is expected to be $61-$64 million, as compared to $56.4 million in 2019.
The guidance provided in this section represents forward-looking information, and actual results may vary. Please see the risks and assumptions referred to in the Forward-Looking Statements section of this press release.

Liquidity

As of December 31, 2019, the Company had $109.8 million in cash and cash equivalents plus $48.0 million in net accounts receivable, $38.3 million of which was due from Teva Pharmaceutical Industries Ltd. The Company had $39.0 million in outstanding debt. Therefore, at December 31, 2019, the Company had net cash plus receivables of $118.8 million.

In the fourth quarter of 2019, we purchased $3.0 million of Eagle’s common stock as part of our $150.0 million Share Repurchase Program. From August 2016 through December 31, 2019, we have repurchased $171.9 million of our common stock.

Conference Call

As previously announced, Eagle management will host its fourth quarter 2019 conference call as follows:

Date

Monday, March 2, 2020

Time

8:30 A.M. EDT

Toll free (U.S.)

877-876-9173

International

785-424-1667

Webcast (live and replay)

www.eagleus.com, under the "Investor + News" section

A replay of the conference call will be available for one week after the call’s completion by dialing 800-839-3020 (US) or 402-220-7234 (International) and entering conference call ID EGRXQ419. The webcast will be archived for 30 days at the aforementioned URL.

On March 2, 2020 Sanofi reported that the U.S. Food and Drug Administration (FDA) has approved Sarclisa (isatuximab-irfc) in combination with pomalidomide and dexamethasone (pom-dex) for the treatment of adults with relapsed refractory multiple myeloma (RRMM) who have received at least two prior therapies including lenalidomide and a proteasome inhibitor (Press release, Sanofi, MAR 2, 2020, View Source [SID1234555079]). Sarclisa is expected to be available to patients in the U.S. shortly.

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Sarclisa is a monoclonal antibody that binds to the CD38 receptor on multiple myeloma cells.

"Today’s FDA approval of Sarclisa provides a new treatment option for patients with difficult-to-treat multiple myeloma. These are patients whose disease has returned or become resistant to their prior treatments," said Paul Hudson, Chief Executive Officer, Sanofi. "At Sanofi, we are focused on discovering and developing medicines that may change the practice of medicine, and Sarclisa offers a potential new standard of care in the United States. We continue to evaluate Sarclisa in a comprehensive clinical program in multiple myeloma, as well as in other blood cancers and solid tumors."

Sarclisa Safety Profile and Efficacy in Difficult-to-Treat Patients

In the ICARIA-MM study, Sarclisa added to pom-dex (Sarclisa combination therapy) demonstrated a statistically significant improvement in progression free survival (PFS) with a median PFS of 11.53 months compared to 6.47 months with pom-dex alone (HR 0.596, 95% CI: 0.44-0.81, p=0.0010). Sarclisa combination therapy also demonstrated a significantly greater overall response rate compared to pom-dex alone (60.4% vs. 35.3%, p<0.0001).

"Most patients with multiple myeloma unfortunately relapse and become refractory to currently available therapies. Sarclisa used in combination with pomalidomide and dexamethasone offers an important new treatment option for patients in the United States living with this incurable disease," said Paul Richardson, MD, principal investigator of ICARIA-MM, and clinical program leader and director of clinical research at the Jerome Lipper Multiple Myeloma Center at Dana-Farber Cancer Institute. "The pivotal ICARIA-MM trial was the first Phase 3 study of a CD38 antibody in combination with pom-dex to present results demonstrating significant clinical benefit in this setting. The study enrolled a broad population of patients with relapsed and refractory multiple myeloma that is particularly difficult to treat and with poor prognosis, which is reflective of real-world practice."

The most common adverse reactions (occurring in 20% or more of patients) in patients who received Sarclisa combination therapy were neutropenia (96%), infusion-related reactions (39%), pneumonia (31%), upper respiratory tract infection (57%) and diarrhea (26%). Serious adverse reactions that occurred in more than 5% of patients who received Sarclisa combination therapy included pneumonia (25.3%) and febrile neutropenia (12.3%). Permanent discontinuation of Sarclisa combination therapy due to an adverse reaction (Grades 3-4) occurred in 7% of patients, and 3% of patients discontinued due to an infusion-related reaction.

An Important New Option for Treating Multiple Myeloma

Sarclisa offers an intravenous (IV) administration and is dosed at 10 mg/kg, in combination with pom-dex, every week for four weeks and then every two weeks, until disease progression or unacceptable toxicity. The first cycle is administered in an infusion time of 200 minutes, which can decrease to 75 minutes for the third cycle onwards. A treatment cycle is 28 days.

The U.S. list price (wholesale acquisition cost, or WAC) for Sarclisa is $650 per 100 mg vial and $3,250 per 500 mg vial. For a typical patient in the U.S., between 70-80 kg (154-176 lbs), this correlates to a cost of $5,200 per infusion. Actual costs to patients are generally anticipated to be lower as the list price does not reflect insurance coverage, copay support, or financial assistance from patient support programs. Sanofi is committed to responsible pricing while bringing innovative and valuable therapies to patients with significant unmet need.

Patients in the U.S. who have been prescribed Sarclisa may be eligible to enroll in the CareASSIST Patient Support Program, which provides reimbursement support and financial assistance to eligible patients. For more information, please call 1-833-WE+CARE (1-833-930-2273) or visit SanofiCareAssist.com/Sarclisa.

Multiple Myeloma Leads to Significant Disease Burden

Multiple myeloma is the second most common hematologic malignancy,i affecting more than 130,000 patients in the United States; approximately 32,000 Americansii are diagnosed with multiple myeloma each year. Despite available treatments, multiple myeloma remains an incurable malignancy, and is associated with significant patient burden. As patients relapse, they can become refractory to therapies they have received. There is a need for new agents so that patients and physicians can have options as the disease progresses over time. Relapsed (or recurrent) multiple myeloma means that the cancer returns after treatment or a period of remission. Since multiple myeloma does not have a cure, most patients will relapse at some point. Refractory multiple myeloma refers to cancer that does not respond to therapy.

About Sarclisa

Sarclisa is a monoclonal antibody (mAb) that binds to the CD38 receptor on multiple myeloma cells. It is designed to induce programmed tumor cell death (apoptosis) and immunomodulatory activity. CD38 is highly and uniformly expressed on multiple myeloma cells and cell surface receptors, making it a potential target for antibody-based therapeutics such as Sarclisa.

Sarclisa has Orphan Drug Designation status from the FDA and the European Medicines Agency (EMA). In the second quarter of 2019, the EMA accepted for review the Marketing Authorization Application for use of Sarclisa in combination with pom-dex for the treatment of certain patients with RRMM. The safety and efficacy of Sarclisa has not been fully evaluated by any regulatory authority outside of the U.S.

Sarclisa continues to be evaluated in multiple ongoing Phase 3 clinical trials in combination with current standard treatments for people with relapsed refractory or newly diagnosed multiple myeloma. It is also under investigation for the treatment of other blood cancer types (hematologic malignancies) and solid tumors.

IMPORTANT SAFETY INFORMATION AND INDICATION FOR U.S. PATIENTS

What is SARCLISA?

SARCLISA is a prescription medicine used in combination with pomalidomide and dexamethasone to treat adults who have received at least 2 prior therapies, including lenalidomide and a proteasome inhibitor, to treat multiple myeloma.

It is not known if SARCLISA is safe and effective in children.

Do not receive SARCLISA if you have a history of severe allergic reaction to isatuximab-irfc or any of the ingredients in SARCLISA (see the list of ingredients in full Prescribing Information).

Before receiving SARCLISA, tell your healthcare provider about all of your medical conditions, including if you:

are pregnant or plan to become pregnant. SARCLISA may harm your unborn baby. You should not receive SARCLISA during pregnancy.
Females who are able to become pregnant should use an effective method of birth control during treatment and for 5 months after your last dose of SARCLISA. Talk to your healthcare provider about birth control methods that you can use during this time.
Tell your healthcare provider right away if you think you are pregnant or become pregnant during treatment with SARCLISA.

are breastfeeding or plan to breastfeed. It is not known if SARCLISA passes into your breast milk. You should not breastfeed during treatment with SARCLISA.
Tell your healthcare provider about all the medicines you take, including prescription and over-the-counter medicines, vitamins, and herbal supplements.

How will I receive SARCLISA?

SARCLISA will be given to you by your healthcare provider by intravenous (IV) infusion into your vein.
SARCLISA is given in treatment cycles of 28 days (4 weeks), together with the medicines pomalidomide and dexamethasone.
In cycle 1, SARCLISA is usually given weekly.
Starting in cycle 2, SARCLISA is usually given every 2 weeks.
Your healthcare provider will decide how long you should receive SARCLISA.

If you miss any appointments, call your healthcare provider as soon as possible to reschedule your appointment.
Your healthcare provider will give you medicines before each dose of SARCLISA to help reduce the risk of infusion reactions (make them less frequent and severe).
What are the possible side effects of SARCLISA?

SARCLISA may cause serious side effects, including:

Infusion reactions. Infusion reactions are common with SARCLISA and can sometimes be severe.
Your healthcare provider will prescribe medicines before each infusion of SARCLISA to help decrease your risk for infusion reactions or to help make any infusion reaction less severe. You will be monitored for infusion reactions during each dose of SARCLISA.
Your healthcare provider may slow down or stop your infusion, or completely stop treatment with SARCLISA, if you have an infusion reaction.
Tell your healthcare provider right away if you develop any of the following symptoms of infusion reaction during or within 24 hours after an infusion of SARCLISA:

feeling short of breath
cough
chills
nausea
Decreased white blood cell counts. Decreased white blood cell counts are common with SARCLISA and certain white blood cells can be severely decreased. You may have an increased risk of getting certain infections, such as upper and lower respiratory infections.
Your healthcare provider will check your blood cell counts during treatment with SARCLISA. Your healthcare provider may prescribe an antibiotic or antiviral medicine to help prevent infection, or a medicine to help increase your white blood cell counts during treatment with SARCLISA.

Tell your healthcare provider right away if you develop any fever or symptoms of infection during treatment with SARCLISA.

Risk of new cancers. New cancers have happened in people during treatment with SARCLISA. Your healthcare provider will monitor you for new cancers during treatment with SARCLISA.
Change in blood tests. SARCLISA can affect the results of blood tests to match your blood type. Your healthcare provider will do blood tests to match your blood type before you start treatment with SARCLISA. Tell all of your healthcare providers that you are being treated with SARCLISA before receiving blood transfusions.
The most common side effects of SARCLISA include:

lung infection (pneumonia)
upper respiratory tract
infection
diarrhea
decreased red blood cell
counts (anemia)
decreased platelet counts
(thrombocytopenia)

These are not all the possible side effects of SARCLISA. For more information, ask your healthcare provider or pharmacist.

On March 2, 2020 Xilio Therapeutics, a company developing potent, tumor-selective immuno-oncology (IO) therapies for patients with cancer, reported the closing of a $100.5 million Series B financing. Proceeds from the financing will be used to progress Xilio’s first two therapeutic candidates, XTX201 (tumor-selective IL-2) and XTX101 (tumor-selective aCTLA4 mAb) through Investigational New Drug (IND) enabling studies and into Phase 1 clinical trials, as well as advance additional tumor-selective cytokine programs using Xilio’s proprietary technology (Press release, Xilio Therapeutics, MAR 2, 2020, View Source [SID1234555020]).

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The financing was led by Takeda Ventures, Inc. with new investors SV Health Investors, MRL Ventures Fund, RiverVest Venture Partners, Bay City Capital, Solasta Ventures, M Ventures, and Ipsen Ventures joining existing investors F-Prime Capital and Atlas Venture in the syndicate.

"We are fortunate to have the support of investors who share our vision to deliver highly potent and effective tumor-selective cancer therapies to patients," said Rene Russo, Chief Executive Officer of Xilio Therapeutics. "This is a transformational moment for the company as we work to bring our first development programs to patients with cancer and expand our tumor-selective cytokine pipeline."

Xilio Therapeutics is developing its proprietary technology to create a new class of ultra-potent IO therapies that are activated selectively within the tumor. These tumor-selective therapies are designed to overcome the significant toxicities associated with validated IO therapies, such as IL-2 and aCTLA4, which have historically limited the number of patients that can be treated and prevented patients from completing full courses of treatment. XTX201 (IL-2) and XTX101 (aCTLA4 mAb) have demonstrated tumor-selective activity in preclinical models, significantly widening the potential therapeutic index for these therapies.

"IO has emerged as a major driver of cancer therapeutic development, and agents in this space have proven effective, resulting in compelling durable clinical responses," stated Jayson Punwani, Investment Partner with Takeda Ventures. "We believe Xilio’s proprietary platform offers a compelling approach that builds upon the advancements in IO therapeutics. It is encouraging to see such a strong and supportive Series B syndicate, including leading venture capital groups and strategic partners. We look forward to working with Xilio’s current investors and the leadership team to support the advancement of its pipeline into the clinic."

In connection with the closing of the financing, Mr. Punwani, Mike Ross of SV Health Investors, Peter Dudek of MRL Ventures Fund (the therapeutics-focused venture capital group within Merck), and Nancy Hong of RiverVest Venture Partners each joined the Board of Directors of Xilio.

The rebranding of the company from Akrevia Therapeutics to Xilio Therapeutics (pronounced "ex-il-ee-oh") reflects the company’s evolution from a research-focused organization to a development stage company and commitment to developing the next generation of ultra-potent IO therapies. Xilio is derived from the Latin term Ex Nihilo, meaning creation or big-bang, and embodies the company’s vision to create the next generation of transformative cancer treatments for individuals living with cancer by unleashing the full power of highly potent immune therapies precisely in tumors.

On March 2, 2020 CNS Pharmaceuticals Presented he Corporate Presentation (Presentation, CNS Pharmaceuticals, MAR 2, 2020, View Source [SID1234555048]).

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On March 2, 2020 Kaleido Biosciences, Inc. (Nasdaq: KLDO), a clinical-stage healthcare company with a chemistry-driven approach to leveraging the microbiome organ to treat disease and improve human health, reported financial results for the fourth quarter and full year ended December 31, 2019, and provided a corporate update (Press release, Kaleido Biosciences, MAR 2, 2020, View Source [SID1234555064]).

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"2019 was a transformational year for Kaleido as we validated our platform with patient clinical data, advanced our pipeline, continued to build our library of Microbiome Metabolic Therapies (MMT), and completed our Initial Public Offering," said Alison Lawton, President and Chief Executive Officer of Kaleido. "We initiated five clinical studies with three MMTs, including our first Phase 2 trial, and the results we reported from the three completed studies support our development programs for KB195 in urea cycle disorders and KB174 in hepatic encephalopathy. We also established collaborations with leaders at the forefront of microbiome research."

Ms. Lawton continued, "We enter 2020 with strong momentum as we aim to deliver key data sets later this year, first from our Phase 2 trial in patients with UCD and then our multi-drug resistant pathogens clinical study with KB109. We also anticipate reporting in vivo findings from our programs in immuno-oncology and cardiometabolic and liver diseases before year end. Importantly, through efficient resource management during Q4 2019 and into 2020, we now anticipate that we have sufficient cash to extend our runway into Q1 2021."

Recent Highlights

Announced positive top-line results from a proof of concept clinical study of KB174 in patients with well-compensated cirrhosis and plans to advance the program into a clinical study in patients with hepatic encephalopathy (HE) in the second half of 2020.
Multiple abstracts relating to KB174 and Kaleido’s MMT development program for HE have been accepted for presentation during The International Liver Congress, the Annual Meeting of the European Association for the Study of the Liver (EASL), April 15-19, 2020, and Digestive Disease Week (DDW), May 2-5, 2020.
Announced a collaboration with Janssen to explore the potential for MMTs to promote healthy function of the gut microbiome and effects on childhood-onset of atopic, immune and metabolic conditions.
Anticipated Milestones

Top-line data expected in Q4 2020 from:
Phase 2 clinical trial (UNLOCKED) of KB195 in patients with UCD inadequately controlled on standard of care; and
Clinical study of KB109 (VITORA) in patients colonized with multi-drug resistant pathogens.
In vivo findings from ongoing programs in immuno-oncology and cardiometabolic and liver diseases also expected in Q4 2020.
Fourth Quarter and Full Year 2019 Financial Results

For the full year 2019, Kaleido reported a net loss of $86.3 million, or $3.36 per common share, compared to $61.7 million, or $12.09 per common share, for the prior year. Kaleido reported a net loss of $19.5 million, or $0.65 per common share, for the fourth quarter of 2019 compared to $21.2 million, or $3.81 per common share, for the same period in 2018. Related to the measures announced in October 2019 to focus resources on pipeline programs and extend cash runway, headcount was reduced by approximately 25 percent and the fourth quarter net loss figure was inclusive of a one-time severance charge of $1.2 million. Additionally, the 2019 fourth quarter net loss includes non-cash stock-based compensation expenses of $2.2 million, as compared to $2.4 million in the fourth quarter of 2018. The full year 2019 net loss included non-cash stock-based compensation expenses of $10.1 million, as compared to $7.0 million in 2018.

Research and development (R&D) expenses were $14.1 million for the three months ended December 31, 2019 and $64.2 million for the full year ended December 31, 2019, compared to $15.2 million for the three months ended December 31, 2018 and $42.1 million for the full year ended December 31, 2018. The 2019 full year increase in R&D was primarily driven based on increases in direct costs related to the KB195 program, R&D headcount, external manufacturing and research costs, and consulting fees.

General and administrative (G&A) expenses were $4.9 million for the three months ended December 31, 2019 and $22.4 million for the full year ended December 31, 2019, compared to $5.6 million for the three months ended December 31, 2018 and $18.6 million for the full year ended December 31, 2018. The 2019 full year increase in G&A was primarily due to increased facility-related expenses. The fourth quarter 2019 decrease in G&A, as compared to the fourth quarter of 2018, was primarily due to reduced personnel-related costs.

As of December 31, 2019, the Company reported cash and cash equivalents of $71.2 million. Kaleido expects that its cash and cash equivalents will enable it to fund its planned operating expenses and capital expenditure requirements into the first quarter of 2021.

About Microbiome Metabolic Therapies (MMT)

Kaleido’s Microbiome Metabolic Therapies, or MMTs, are designed to drive the function and distribution of the microbiome organ’s existing microbes in order to decrease or increase the production of metabolites, or to advantage or disadvantage certain bacteria in the microbiome community. The Company’s initial MMT candidates are targeted glycans that are orally administered, have limited systemic exposure, and are selectively metabolized by enzymes in the microbiome. Kaleido utilizes its human-centric discovery and development platform to study MMTs in microbiome samples in an ex vivo setting, followed by advancing MMT candidates rapidly into clinical studies in healthy subjects and patients. These human clinical studies are conducted under regulations supporting research with food, evaluating safety, tolerability and potential markers of effect. For MMT candidates that are further developed as therapeutics, the Company conducts clinical trials under an Investigational New Drug (IND) or regulatory equivalent outside the U.S., and in Phase 2 or later development.