On August 6, 2019 Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, reported financial results for the second quarter ended June 30, 2019, and recent business highlights (Press release, Vericel, AUG 6, 2019, View Source [SID1234538205]).

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Second Quarter 2019 Financial Highlights

Total net product revenues increased 38% to $26.2 million compared to $19.0 million in the second quarter of 2018;

Gross margin of 66% compared to gross margin of 59% in the second quarter of 2018;

Net loss of $19.8 million, or $0.45 per share, which includes the $17.5 million upfront license payment to MediWound for North American rights to NexoBrid;

Non-GAAP adjusted net loss, excluding the $17.5 million upfront license payment to MediWound, of $2.3 million, or $0.05 per share, compared to a net loss of $4.7 million, or $0.12 per share, in the second quarter of 2018;

Non-GAAP adjusted EBITDA of $1.8 million compared to a loss of $1.4 million in the second quarter of 2018;

As of June 30, 2019, the company had $66.0 million in cash and short-term investments compared to $82.9 million as of December 31, 2018; and

Full year 2019 revenue guidance for MACI and Epicel raised to $112 to $116 million compared to previous full year revenue guidance of $110 million to $114 million.

Recent Business Highlights
During and since the second quarter of 2019, the company:

Reported record second quarter revenues, marking the ninth consecutive quarter with record revenues for the reported quarter and the highest Epicel revenue for a second quarter in history;

Deployed the expanded MACI sales force, which increased from 40 to 48 sales representatives and initiated a MACI sales force sizing assessment based on an expanded target audience of approximately 5,000 surgeons who perform a high volume of cartilage repair procedures;

Announced an exclusive license agreement with MediWound for North American rights to NexoBrid, a registration-stage biological orphan product for debridement of severe thermal burns;

Announced that the U.S. Biomedical Advanced Research and Development Authority (BARDA) has agreed to fund the NexoBrid expanded access treatment (NEXT) protocol; and

Confirmed plans after meeting with the U.S. Food and Drug Administration (FDA) to submit a Biologics License Application (BLA) for NexoBrid to the FDA in the second quarter of 2020.

"The continued strength in MACI revenue growth reflects the increasing number of surgeons who view MACI as the standard of care for certain large, full thickness cartilage defects," said Nick Colangelo, president and CEO of Vericel. "Given the significant growth in new surgeons and biopsy volume, as well as the strength in Epicel demand, we have increased our revenue guidance for 2019. Looking forward, we anticipate submitting the NexoBrid BLA in the second quarter of 2020 which, upon FDA approval, would create a third growth driver for the company in 2021 and beyond."

Second Quarter 2019 Results
Total net product revenues for the quarter ended June 30, 2019 increased 38% to $26.2 million compared to $19.0 million in the second quarter of 2018. Total net product revenues for the quarter included $20.8 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue and $5.3 million of Epicel (cultured epidermal autografts) net revenue, compared to $14.1 million of MACI net revenue and $4.9 million of Epicel net revenue, respectively, in the second quarter of 2018.

Gross profit for the quarter ended June 30, 2019 was $17.1 million, or 66% of net revenues, compared to $11.3 million, or 59% of net revenues, for the second quarter of 2018.

Total operating expenses for the quarter ended June 30, 2019 were $37.3 million, including the $17.5 million upfront license payment to MediWound Ltd. for North American Rights to NexoBrid. Excluding the $17.5 million license payment, operating expenses were $19.8 million, compared to $15.5 million for the same period in 2018. The increase in operating expenses was primarily due to a $1.4 million increase in stock-based compensation, an incremental $0.7 million in MACI sales force expenses as a result of the sales force expansion in 2019, and a $0.9 million increase in selling expenses and patient reimbursement support services.

Vericel’s net loss for the quarter ended June 30, 2019, which includes the $17.5 million upfront license payment for NexoBrid, was $19.8 million, or $0.45 per share. Non-GAAP adjusted net loss, excluding the $17.5 million upfront license payment for NexoBrid, was $2.3 million, or $0.05 per share, compared to a net loss of $4.7 million, or $0.12 per share, for the second quarter of 2018. See table reconciling non-GAAP measures for more details.Non-GAAP adjusted EBITDA was $1.8 million for the quarter ended June 30, 2019 compared to a loss of $1.4 million in the second quarter of 2018. See table reconciling non-GAAP measures for more details.
As of June 30, 2019, the company had $66.0 million in cash and short-term investments compared to $82.9 million as of December 31, 2018.

Full Year 2019 Financial Guidance
The company now expects total MACI and Epicel net product revenues for the full year 2019 to be in the range of $112 to $116 million, compared to the previous full year revenue guidance of $110 to $114 million.

Conference Call Information
Today’s conference call will be available live at 8:00am Eastern time in the Investor Relations section of the Vericel website at View Source." target="_blank" title="View Source." rel="nofollow">View Source A presentation supporting today’s conference call will be available on the webcast and in the Investor Relations section of the Vericel website. Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software if necessary. To participate in the live call by telephone, please call (877) 312-5881 and reference Vericel Corporation’s second-quarter 2019 investor conference call. If calling from outside the U.S., please use the international phone number (253) 237-1173.

If you are unable to participate in the live call, the webcast will be available at View Source until August 6, 2020. A replay of the call will also be available until 11:00am (EDT) on August 11, 2019 by calling (855) 859-2056, or from outside the U.S. (404) 537-3406. The conference ID is 6576007.

On August 6, 2019 Cleave Therapeutics, Inc. (formerly Cleave Biosciences), a biopharmaceutical company focused on protein homeostasis and stress pathways in cancer and neurodegeneration, reported that it has appointed industry veterans Amy Burroughs as chief executive officer and Scott Harris as chief operating officer (Press release, Cleave Biosciences, AUG 6, 2019, View Source [SID1234538221]). Cleave also announced the closing of a $12 million financing to advance CB-5339, its second-generation, IND-ready, valosin-containing protein (VCP)/p97 inhibitor through early clinical development. The financing was led by 5AM Ventures, Celgene Corporation, Orbimed, U.S. Venture Partners (USVP), Arcus Ventures, Astellas Venture Management, and Osage University Partners (OUP).

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Cleave’s lead drug development candidate, CB-5339, is a potent, oral, selective, second-generation inhibitor of VCP/p97, which addresses limitations of earlier compounds, including exposure and selectivity to the target. The company is initiating a Phase 1 clinical study in acute myeloid leukemia (AML), for which there is compelling preclinical data and a significant unmet medical need. In addition, the National Cancer Institute, which has a decades-long interest in VCP/p97 as a target, is planning to sponsor a Phase 1 trial with CB-5339 in solid tumors in collaboration with Cleave.

"There is increasing scientific rationale supporting VCP/p97 as a key regulator of cell processes critical for cancer cell survival, particularly in acute myeloid leukemia (AML)," said Peter Thompson, MD, partner, Orbimed and Cleave co-founder. "The Cleave team has made significant progress in overcoming the challenges of earlier molecules, and generated robust preclinical data from strategic collaborators at the National Cancer Institute and academic institutions."

In addition to the management appointments, Laura Shawver, PhD, CEO of Synthorx, was named board chair of Cleave.

"We are thrilled that Cleave will be advancing CB-5339 to clinical development and welcome Ms. Burroughs to lead the company," said Dr. Shawver. "Amy has spent her career helping move novel drug candidates through the drug development process with a focus on understanding market needs, building partnerships and attracting top-notch talent. She will be instrumental as the company prepares for clinical studies in hematologic malignancies and solid tumors and continues to assess the potential in neurodegenerative diseases."

Ms. Burroughs brings more than 25 years of healthcare and life sciences leadership experience, most recently serving as executive-in-residence (EIR) at 5AM Ventures and as a strategic commercial advisor to Crinetics Pharmaceuticals. She began her biopharmaceutical career at Genentech and was previously founder and managing partner of The Ventral Group, a strategic life sciences consulting and investor advisory firm. Ms. Burroughs’ industry experience also includes consulting with Egon Zehnder and serving as the chief commercial officer and head of business development for APT Pharmaceuticals. She received her BA from Dartmouth College and her MBA from Harvard Business School, where she graduated as a Baker Scholar.

Scott Harris brings more than 20 years of broad cross-functional experience advancing novel products through preclinical and clinical development. Mr. Harris most recently held executive positions at two BridgeBio subsidiaries, including serving as executive vice president, corporate development and operations at Navire Pharma. Previously, he was executive vice president of regulatory affairs and technical operations at Adynxx, where he directed development activities from pre-clinical through Phase 2 studies. Mr. Harris also held positions of increasing responsibility at Corthera, BioMarin Pharmaceutical, Attenuon, Angstrom Pharmaceutical and Biosite. He obtained his BS in biochemistry and cell biology from University of California, San Diego, and his MS in regulatory affairs from San Diego State University.

About VCP/p97

VCP/p97 is a critical enzyme in the AAA (ATPases Associated with diverse cellular Activities) family of ATPases and is a key regulator of various aspects of protein homeostasis and cellular stress pathways that are critical for cancer cell growth and survival. Inhibition of VCP/p97 has been shown to impact multiple stress response pathways — including proteotoxic stress and DNA damage repair where cancer cells are differentially sensitive—and drive cancer cells past the tipping point towards apoptosis. In neurodegenerative diseases, VCP/p97 has been shown to be important for the health and function of mitochondria, and Cleave’s research has demonstrated the potential for therapeutic benefit for patients with these debilitating diseases.

On August 6, 2019 MorphoSys AG (FSE: MOR; Prime Standard Segment; MDAX & TecDAX; NASDAQ: MOR) reported its intention to submit a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) based on its phase 2 L-MIND study of tafasitamab (MOR208) and lenalidomide in relapsed or refractory diffuse large B cell lymphoma (r/r DLBCL) (Press release, MorphoSys, AUG 6, 2019, View Source [SID1234538247]). A letter of intent was submitted to EMA in early July and MorphoSys plans to complete the MAA submission by mid-2020.

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L-MIND is a single-arm, open-label phase 2 study investigating the antibody tafasitamab in combination with lenalidomide in patients with relapsed or refractory diffuse large B cell lymphoma who are not eligible for high-dose chemotherapy and autologous stem cell transplantation. In July 2019, the company presented positive primary analysis data from L- MIND at the ICML conference in Lugano. These data will form the basis for the planned filing package of the MAA that, if granted, allows for earliest approval in Europe in 2021.

"We are excited about the progress we are making with our plan for a possible regulatory approval for tafasitamab in Europe," said Dr. Malte Peters, Chief Development Officer at MorphoSys. "The preceding constructive interaction with the European regulatory authorities has given us the confidence to pursue an MAA submission for approval in Europe based on L-MIND. This complements our current focus on seeking approval of tafasitamab in the U.S. on the basis of L-MIND, for which we will complete a BLA submission to the FDA by year-end."

On August 6, 2019 Fate Therapeutics, Inc. (NASDAQ: FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the second quarter ended June 30, 2019 (Press release, Fate Therapeutics, AUG 6, 2019, View Source [SID1234538189]).

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"The early safety and tolerability signals observed in patients receiving multiple doses of FT500, the first iPSC-derived cell therapy to undergo clinical investigation in the United States, are very encouraging. The ability to cost-effectively mass-produce a universal cell-based cancer immunotherapy, and to safely deliver that therapy ‘on demand’ in multiple doses, has the potential to transform outcomes for many patients," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "We continue to be very pleased with the Company’s rapid pace of innovation, product development and leadership in bringing iPSC-derived cell-based immunotherapies engineered with potent anti-tumor functionality to cancer patients. Our first engineered iPSC-derived NK cell product candidate, FT516, is ready for Phase 1 clinical evaluation following successful completion of cGMP production, and the IND application for our multi-antigen targeted CAR19 NK cell product candidate, FT596, has been submitted to the FDA. Additionally, with the renewal of our collaboration with Memorial Sloan Kettering Cancer Center for the development of iPSC-derived T-cell immunotherapies, we are well positioned to continue to lead the field in the development of off-the-shelf CAR T-cell therapy."

Universal, Off-the-Shelf NK Cell Cancer Immunotherapy Clinical Programs

No DLTs Reported at 300M Cell Dose Level in FT500 Monotherapy Arm. The first three patients with advanced solid tumors have been treated with multiple doses of FT500, the Company’s universal, off-the-shelf natural killer (NK) cell product candidate derived from a clonal master induced pluripotent stem cell (iPSC) line, at the second dose level in the study’s monotherapy arm. All three patients received three weekly doses of FT500 at 300 million cells per dose in an outpatient setting, which treatment cycle was well-tolerated with no dose-limiting toxicities (DLTs) and no FT500-related serious adverse events reported by investigators. All three subjects were eligible to receive a second, multi-dose treatment cycle of FT500 at 300 million cells per dose.
No DLTs Reported at 100M Cell Dose Level in FT500 ICI Combination Arm. The first three patients with advanced solid tumors have been treated with multiple doses of FT500 in combination with immune checkpoint inhibitor (ICI) in the study’s combination arm. All three patients received three weekly doses of FT500 at 100 million cells per dose in an outpatient setting, which treatment cycle was well-tolerated with no dose-limiting toxicities and no FT500-related serious adverse events reported by investigators. All three subjects were eligible to receive a second, multi-dose treatment cycle of FT500 at 100 million cells per dose in combination with ICI.
FT516 cGMP Production Completed and Product Released for Clinical Trial Initiation. The Company completed final product release testing for FT516, a universal, off-the-shelf NK cell product candidate derived from a clonal master iPSC line engineered to express a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor. Starting with a single cryopreserved vial from a master engineered iPSC bank, hundreds of cryopreserved doses of FT516 were produced in a single cGMP campaign at a low cost per dose. The cryopreserved FT516 cell product met stringent post-thaw release specifications, including identity, purity, viability and functional activity. The Company is currently initiating clinical investigation of FT516 as a monotherapy for the treatment of acute myeloid leukemia and in combination with CD20-directed monoclonal antibodies for the treatment of B-cell lymphoma. FT516 is the first-ever cell product in the world derived from a genetically engineered pluripotent stem cell to be cleared for clinical investigation.
Universal, Off-the-Shelf NK Cell and T-cell Cancer Immunotherapy Preclinical Pipeline

Submitted IND for FT596 Multi-Antigen Targeted CAR NK Cell. FT596 is the Company’s first universal, off-the-shelf chimeric antigen receptor (CAR) NK cell product candidate, and is uniquely designed to engage multiple tumor-associated antigens expressed on cancer cells for best-in-class activity. The product candidate is derived from a master iPSC line engineered to express three functional anti-tumor components: a proprietary CAR targeting the B-cell antigen CD19; a novel hnCD16 Fc receptor for augmented antibody-dependent cellular cytotoxicity; and a unique IL-15 receptor fusion for enhanced NK cell activity. The Company submitted its Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for clinical investigation of FT596 as a monotherapy and in combination with monoclonal antibody therapy for the treatment of subjects with advanced B-cell lymphomas and advanced chronic lymphocytic leukemia.
Renewed iPSC-derived T-cell Collaboration with MSK. Under its collaboration with Memorial Sloan Kettering Cancer Center (MSK) led by Michel Sadelain, M.D., Ph.D., Director of the Center for Cell Engineering and the Stephen and Barbara Friedman Chair, the Company is currently conducting IND-enabling activities for FT819, its first universal, off-the-shelf CAR T-cell product candidate. FT819 is derived from a clonal master engineered iPSC line having complete elimination of T-cell receptor (TCR) expression and insertion of a novel 1XX CAR targeting CD19 into the T-cell receptor alpha (TRAC) locus. The three-year renewal extends the Company’s exclusive collaboration with Dr. Sadelain for the research and development of iPSC-derived T-cell product candidates.
Corporate Highlights

Received New U.S. Patent for CAR-encoded iPSCs. In May 2019, the U.S. Patent and Trademark Office granted to the Company a patent foundational to off-the-shelf, iPSC-derived CAR T-cell therapy. U.S. Patent Number 10,287,606, entitled "Genomic Engineering of Pluripotent Cells," covers iPSCs having a CAR construct encoded into the TRAC locus and an endogenous TCR alpha gene knocked out. The complete elimination of the endogenous TCR gene is critical in allogeneic CAR T-cell therapy to ensure the prevention of graft-versus-host disease, a life-threatening disease that can occur when donor T-cells attack a patient’s healthy tissue.
Expanded Board of Directors. In July 2019, the Company appointed Dr. Shefali Agarwal to its Board of Directors. Dr. Agarwal has nearly two decades of leadership experience across clinical development, medical research, clinical operations, regulatory, and medical affairs in oncology, and is currently the Chief Medical Officer of Epizyme, Inc., a clinical-stage company developing novel epigenetic therapies for cancer and other serious diseases.
Second Quarter 2019 Financial Results

Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of June 30, 2019 were $162.0 million, compared to $201.0 million as of December 31, 2018. The decrease was driven primarily by the Company’s use of cash to fund operating activities.
Total Revenue: Revenue was $2.8 million for the second quarter of 2019, compared to $1.0 million for the same period in 2018. Revenue was derived primarily from the Company’s collaboration with Ono Pharmaceutical.
R&D Expenses: Research and development expenses were $21.6 million for the second quarter of 2019, compared to $16.8 million for the same period in 2018. The increase in R&D expenses was attributable primarily to an increase in employee compensation, including share-based compensation, and in expenses associated with the clinical development and manufacture of the Company’s product candidates and the conduct of our research activities including under our collaboration agreements.
G&A Expenses: General and administrative expenses were $5.3 million for the second quarter of 2019, compared to $3.8 million for the same period in 2018. The increase in G&A expenses was attributable primarily to an increase in employee compensation, including share-based compensation.
Shares Outstanding: Common shares outstanding were 65.3 million as of June 30, 2019 and 64.7 million as of December 31, 2018. Preferred shares outstanding as of June 30, 2019 and December 31, 2018 were 2.8 million, each of which is convertible into five shares of common stock.
Today’s Conference Call and Webcast
The Company will conduct a conference call today, Tuesday, August 6, 2019 at 5:00 p.m. ET to review financial and operating results for the quarter ended June 30, 2019. In order to participate in the conference call, please dial 877-303-6235 (domestic) or 631-291-4837 (international) and refer to conference ID 3898842. The live webcast can be accessed under "Events & Presentations" in the Investors & Media section of the Company’s website at www.fatetherapeutics.com. The archived webcast will be available on the Company’s website beginning approximately two hours after the event.

About Fate Therapeutics’ iPSC Product Platform
The Company’s proprietary induced pluripotent stem cell (iPSC) product platform enables mass production of off-the-shelf, engineered, homogeneous cell products that can be administered in repeat doses to mediate more effective pharmacologic activity, including in combination with cycles of other cancer treatments. Human iPSCs possess the unique dual properties of unlimited self-renewal and differentiation potential into all cell types of the body. The Company’s first-of-kind approach involves engineering human iPSCs in a one-time genetic modification event and selecting a single iPSC for maintenance as a clonal master iPSC line. Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, clonal master iPSC lines are a renewable source for manufacturing cell therapy products which are well-defined and uniform in composition, can be mass produced at significant scale in a cost-effective manner, and can be delivered off-the-shelf for patient treatment. As a result, the Company’s platform is uniquely capable of overcoming numerous limitations associated with the production of cell therapies using patient- or donor-sourced cells, which is logistically complex and expensive and is fraught with batch-to-batch and cell-to-cell variability that can affect safety and efficacy. Fate Therapeutics’ iPSC product platform is supported by an intellectual property portfolio of over 200 issued patents and 150 pending patent applications.

About FT500
FT500 is an investigational, universal, off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line. Despite the clinical benefit conferred by approved immune checkpoint inhibitor (ICI) therapy against a variety of tumor types, these therapies are not curative and, in most cases, patients either fail to respond or progress on these agents. One common mechanism of resistance to ICI therapy is associated with loss-of-function mutations in genes critical for antigen presentation. A potential strategy to overcome resistance is through the administration of allogeneic NK cells, which have the inherent capability to recognize and directly kill tumor cells with these mutations. FT500 is being investigated in an open-label, multi-dose Phase 1 clinical trial for the treatment of advanced solid tumors (clinicaltrials.gov ID number NCT03841110). The study is designed to assess the safety and activity of three once-weekly doses of FT500 as a monotherapy and in combination with one of three FDA-approved ICI therapies – nivolumab, pembrolizumab or atezolizumab – in patients that have failed prior checkpoint inhibitor therapy. Patients who are clinically stable following the first cycle of FT500 treatment are eligible to receive a second treatment cycle of three additional once-weekly doses of FT500.

About FT516
FT516 is an investigational, universal, off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line engineered to express a novel high-affinity (158V), non-cleavable CD16 (hnCD16) Fc receptor. CD16 mediates antibody-dependent cellular cytotoxicity (ADCC), a potent anti-tumor mechanism by which NK cells recognize, bind and kill antibody-coated cancer cells. CD16 occurs in two variants, either with high (158V) or low (158F) affinity for the Fc domain of IgG1 antibodies. Numerous clinical studies with FDA-approved tumor-targeting antibodies, including rituximab, trastuzumab and cetuximab, have demonstrated that patients homozygous for the CD16 high-affinity variant, which is present in approximately 15% of patients, have improved clinical outcomes. In addition, ADCC is dependent on NK cells maintaining active levels of CD16 expression, and the expression of CD16 on NK cells has been shown to undergo considerable down-regulation in cancer patients, which can significantly inhibit anti-tumor activity. FT516 incorporates a novel CD16 Fc receptor, which has been modified to prevent its down-regulation and augment its binding to tumor-targeting antibodies for enhanced ADCC. The FDA has allowed investigation of FT516 in an open-label, multi-dose Phase 1 clinical trial as a monotherapy for the treatment of acute myeloid leukemia and in combination with CD20-directed monoclonal antibodies for the treatment of B-cell lymphoma (clinicaltrials.gov ID number NCT04023071).

On August 6, 2019 Neon Therapeutics, Inc. (Nasdaq: NTGN), a clinical-stage immuno-oncology company developing neoantigen-based therapeutics, reported financial results for the second quarter ended June 30, 2019 and provided a business update (Press release, Neon Therapeutics, AUG 6, 2019, View Source [SID1234538206]).

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"We continue to make important progress across Neon’s programs as we continue to advance our leadership in the field of neoantigen-bases therapies. In recent months, we made important steps forward, including the release of the top-line data from our NT-001 trial of NEO-PV-01 that demonstrated consistent prolongation of progression-free survival across all three tumor types compared with historical checkpoint inhibitor monotherapy studies. We are also proud that the FDA recently cleared the IND for our off-the-shelf neoantigen vaccine candidate, NEO-SV-01," said Hugh O’Dowd, Neon’s Chief Executive Officer. "In the months ahead, we look forward to presenting detailed data from our NT-001 trial at a fall medical society meeting, including potential immune correlates and biomarker-selection strategies that could guide Phase 2 development, and also to completing process development work that will enable our planned CTA filing in Europe for our personal neoantigen T cell therapy candidate, NEO-PTC-01."

Pipeline Updates

Neon is developing neoantigen-targeting therapies across multiple treatment modalities, including both personal and precision vaccine and T cell therapy candidates.

NEO-PV-01: Neon’s investigational personal neoantigen vaccine, NEO-PV-01, is custom-designed and manufactured based on the unique mutational fingerprint of each individual patient. NEO-PV-01 is being studied in multiple ongoing Phase 1b clinical trials.

NT-001 Trial: Neon’s ongoing, multicenter Phase 1b clinical is evaluating a combination of NEO-PV-01 with OPDIVO (nivolumab) in patients with metastatic melanoma, smoking-associated non-small cell lung cancer (NSCLC) or bladder cancer.

In July, Neon announced top-line results from 82 patients in the NT-001 trial, with at least 12-month median follow-up in each of the three cohorts.

Across all three distinct tumor types, the results demonstrated prolonged and consistent improvements in progression-free survival (PFS) that compare favorably to those observed with checkpoint inhibitor monotherapy, based on historical benchmark data. At 13.4-month median follow-up in 34 patients with metastatic melanoma, the median PFS had not yet been reached; in 27 patients with metastatic NSCLC, median PFS was 5.6 months; and in 21 patients with metastatic bladder cancer, median PFS was 5.6 months.

No serious adverse events were observed that were related to the NEO-PV-01/OPDIVO combination. Low grade adverse events attributable to the NEO-PV-01/OPDIVO combination included injection site reactions, fatigue and influenza-like illness.

These top-line data, which come from the 82 patients in the Intention-to-Treat population who received at least one dose of OPDIVO in the Phase 1b NT-001 trial, support further development of NEO-PV-01, including randomized Phase 2 trials of NEO-PV-01 in metastatic disease settings.

Neon plans to present more detailed data from its NT-001 clinical trial at an upcoming medical society meeting.

NT-002 Trial: In April, Neon completed enrollment in NT-002, its Phase 1b clinical trial evaluating NEO-PV-01 in combination with the current standard of care, KEYTRUDA (pembrolizumab) and chemotherapy, in first-line patients with untreated advanced or metastatic NSCLC. This trial is evaluating the safety, tolerability and efficacy of NEO-PV-01 in the metastatic setting. Neon expects to report immune monitoring and clinical outcome data from this trial by the end of Q3 2020.

NT-003 Trial: This Phase 1b clinical trial of NEO-PV-01 in metastatic melanoma combinations is currently enrolling. NT-003 will evaluate NEO-PV-01 and OPDIVO in combination with other agents, including Apexigen’s CD40 agonist (APX005M) or a CTLA-4 antagonist, to further enhance any NEO-PV-01-induced neoantigen immune response and improve clinical outcomes. This trial will also evaluate alternative NEO-PV-01 dosing schedules. Neon plans to announce immune monitoring data from this study in the second half of 2020.

NEO-PTC-01: Neon’s personal adoptive T cell therapy candidate consists of multiple T cell populations targeting neoantigens that are predicted to be the most therapeutically relevant from each patient’s tumor. NEO-PTC-01 uses T cells from the periphery of each patient that are then primed, activated and expanded to generate a therapy that specifically targets that patient’s personal neoantigens, with the potential to drive a robust and persistent anti-tumor response.

CTA Filing: Building on success to date in generating both memory and de novo immune responses, Neon is completing process development, which supports its plan to file a CTA in Europe in the second half of 2019 to evaluate NEO-PTC-01 in refractory solid tumor settings. This work is being performed in collaboration with the Netherlands Cancer Institute (NKI), a leading academic research and treatment center with expertise in T cell biology and treatments.

NEO-SV-01: Neon is planning to develop its off-the-shelf neoantigen vaccine for the treatment of a genetically-defined subset of hormone receptor-positive (HR+) breast cancer, potentially across disease stages, in combination with hormonal, chemotherapy or targeted therapies.

IND Clearance: Neon reported that the U.S. Food & Drug Administration (FDA) has cleared Neon’s IND application for NEO-SV-01.

Expected Milestones

NEO-PV-01: Clinical results and correlative immune data from NT-001 Phase 1b trial planned for presentation at a medical congress (2H 2019)

NEO-PTC-01: Planned European CTA filing to evaluate NEO-PTC-01 in a refractory solid tumor setting (2H 2019)

NEO-PV-01: Planned clinical results and correlative immune data, including 12-month follow-up, from NT-002 Phase 1b trial in first-line metastatic NSCLC (Q3 2020)

NEO-PTC-01: Planned Phase 1 initiation in a refractory solid tumor setting (Q2 or Q3 2020)

NEO-PV-01: Planned immune data from NT-003 Phase 1b trial in metastatic melanoma combinations (2H 2020)

NEO-PV-01: Planned Phase 2 initiation of randomized clinical trial in first-line metastatic melanoma (2020)

Second Quarter 2019 Financial Results and Financial Guidance:

R&D Expenses: Research and development expenses were $16.7 million for the second quarter of 2019, compared to $14.8 million for the same period last year. The increase was primarily due to costs related to continued research and development of NEO-PV-01, NEO-PTC-01 and NEO-SV-01, as well as investments in R&D headcount to support the advancement of Neon’s pipeline.

G&A Expenses: General and administrative expenses were $5.6 million for the second quarter of 2019, compared to $4.3 million for the same period last year. The increase was primarily due to personnel-related costs, expenses associated with intellectual property protection and costs associated with being a public company.

Net Loss: Net loss was $21.9 million for the second quarter of 2019, compared to $18.9 million for the same period last year.

Cash Position: As of June 30, 2019, cash, cash equivalents and marketable securities were $61.0 million, as compared to cash, cash equivalents and marketable securities of $103.3 million as of December 31, 2018.

Financial Guidance: Based on its current operating plan, Neon expects that its existing cash, cash equivalents and marketable securities will enable the Company to fund its anticipated operating expenses and capital expenditure requirements into June 2020.

OPDIVO is a registered trademark of Bristol-Myers Squibb Company. KEYTRUDA is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Kenilworth, NJ, USA