On May 29, 2019 Akari Therapeutics, Plc (Nasdaq: AKTX), a biopharmaceutical company focused on innovative therapeutics to treat orphan autoimmune and inflammatory diseases where complement and/or leukotriene systems are implicated, reported its financial results for the first quarter ended March 31, 2019 and recent clinical progress (Press release, Akari Therapeutics, MAY 29, 2019, View Source [SID1234536631]).
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"We have seen positive clinical signals in all three of our new programs in BP, HSCT-TMA and AKC, with rapid improvement in the relevant clinical measures and with no drug-related serious adverse events," said Clive Richardson, Interim Chief Executive Officer of Akari Therapeutics. "Both AKC and BP have further planned clinical readouts this year, providing a potential opportunity to consider advancing both into pivotal trials in 2020 and further supporting the therapeutic role of combined C5 and LTB4 treatment."
First Quarter 2019 and Recent Business Highlights
Pediatric hematopoietic stem cell transplant-related thrombotic microangiopathy (HSCT-TMA).
In March 2019, the Company announced it had a successful Type B, pre-IND meeting with the U.S. Food and Drug Administration (FDA) regarding its proposed pivotal clinical trial program for HSCT-TMA. A pivotal trial for HSCT-TMA with nomacopan is expected to start in the fourth quarter of 2019. This condition has an estimated 80% mortality rate in children with this severe disease, with currently no approved treatments.
Phase II clinical trial in patients with bullous pemphigoid (BP).
During the first quarter, the Company announced initial results from the first three patients with mild-to-moderate BP in the ongoing Phase II trial with nomacopan, dosed daily subcutaneously. The data showed no drug-related adverse events and a rapid improvement in disease such that by day 42 of treatment with nomacopan, the BPDAI global score fell by a mean of 52% and blisters/erosions dropped by a mean of 87%. BP is a severe orphan inflammatory skin disease currently treated primarily with steroids and immunosuppressants which bring with them well-known side effects. The Company anticipates data in mild-to-moderate patients from this study by the fourth quarter of 2019, and extension within the current study to include more severe patients in the second half of 2019.
Phase I/II clinical trial in patients with atopic keratoconjunctivitis (AKC).
In a "first in eye" Phase I/II study in AKC, initial surface of the eye data from the first two patients in the study, treated topically with nomacopan demonstrated no drug-related adverse events. In addition, there was a >35% improvement in composite efficacy score at day 14 of treatment compared to baseline treatment on maximal cyclosporin, the standard of care. The Company is currently in Part A of the study and anticipates progressing into the Part B placebo-controlled efficacy arm by mid-year 2019, with completion of the study by the fourth quarter of 2019.
Expanding pipeline opportunities
The Company is identifying an expanding pipeline of opportunities in diseases where complement and leukotriene pathways are both potentially implicated. For example, at the 2019 Association for Research in Vision and Ophthalmology (ARVO) annual meeting Akari described the role of C5 and LTB4 in an experimental autoimmune uveitis model, underpinning the Company’s plans to develop a clinical back of the eye program.
Upcoming Events and Milestones
HSCT-TMA pivotal clinical trial expected to start in the fourth quarter of 2019.
Mild-to-moderate BP trial results expected in the fourth quarter of 2019.
Expansion of existing BP Phase II clinical trial into the severe patient population expected in the second half of 2019.
Expansion of the AKC Phase I/II trial into Part B placebo-controlled efficacy arm after an independent data review of Part A safety expected mid-year 2019.
Completion of Part B of AKC Phase I/II trial by the fourth quarter of 2019.
Initiate a Phase I clinical trial with new auto-injector pen formulation in the second half of 2019.
First Quarter 2019 Financial Results
Research and development (R&D) income in the first quarter of 2019 was $2.3 million, as compared to R&D expenses of $1.0 million in the same quarter the prior year. This difference is primarily due to the receipt of an R&D tax credit of $4.9 million in the first quarter of 2019, as compared to the receipt of an R&D tax credit of $3.8 million in the first quarter of 2018. Excluding the R&D tax credits in both periods, R&D expenses decreased $2.2 million, or 47%, in the first quarter of 2019 compared to the same period the prior year due primarily to lower expenses for manufacturing as the Company had previously manufactured clinical trial material for supply through 2019.
General and administrative (G&A) expenses in the first quarter of 2019 were $2.3 million, as compared to $3.3 million in the same quarter last year. This decrease was primarily due to lower expenses associated with professional services, personnel and rent, as well as lower stock-based non-cash compensation expense.
Total other expenses for the first quarter of 2019 was $2.6 million, as compared to total other income of $3.0 million in the same period the prior year. This change was primarily due to $5.3 million of higher expense related to the change in the fair value of the stock option liabilities in 2019 compared to 2018, and to higher foreign exchange gains in 2019 as compared to 2018.
Net loss for the first quarter of 2019 was $2.5 million, compared to a net loss of $1.3 million for the same period in 2018. The increase in net loss in the first quarter of 2019 was due primarily to the change in the fair value of the stock option liabilities and foreign exchange gains previously cited, offset by the receipt of a higher R&D tax credit in the first quarter of 2019.
As of March 30, 2019, the Company had cash of $6.1 million, as compared to cash of $5.4 million as of December 31, 2018. During the first quarter of 2019, the Company received an R&D tax credit of $4.9 million.
On September 26, 2018, the Company entered into a securities purchase agreement (the "Purchase Agreement") with Aspire Capital Fund, LLC ("Aspire Capital"), which provides that, upon the terms, Aspire Capital is committed to purchase up to an aggregate of $20.0 million of the Company’s ADSs over the 30-month term of the Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, the Company issued 30,000,000 ordinary shares to Aspire Capital and sold to Aspire Capital 25,000,000 ordinary shares for $0.02 per share (equivalent to $2.00 per ADS and $500,000). Currently, approximately $1.2 million of the $20.0 million facility has been drawn.