On May 15, 2017 Moleculin Biotech, Inc., (NASDAQ: MBRX) ("Moleculin" or the "Company"), a preclinical pharmaceutical company focused on the development of anti-cancer drug candidates, some of which are based on license agreements with The University of Texas System on behalf of the M.D. Anderson Cancer Center ("MD Anderson"), reported its financial and operating results for the first quarter ended March 31, 2017 and other recent developments Moleculin Biotech, Inc. Reports Financial Results for the First Quarter Ended March 31, 2017.

First Quarter & Recent Highlights

Annamycin
· Appointed Theradex Systems, Inc. as its contract research organization ("CRO") for its planned Phase I/II clinical trial for Annamycin for the treatment of relapsed or refractory acute myeloid leukemia ("AML").
· Received Orphan Drug Designation by the U.S. Food and Drug Administration ("FDA") for the treatment of AML. The FDA grants orphan drug designation to drugs and biologics that are intended for the treatment of rare diseases that affect fewer than 200,000 people in the U.S. Orphan drug status is intended to facilitate drug development for rare diseases and may provide several benefits to drug developers, including tax credits for qualified clinical trial costs, exemptions from certain FDA application fees, and seven years of market exclusivity upon regulatory product approval.
· Recently filed the IND application for Annamycin, with a Phase I/II approach with the intent of increasing the Maximum Tolerable Dose ("MTD"). In subsequent discussions, the FDA requested certain revisions to the protocol, additional information, and additional data related to Chemistry, Manufacturing and Controls ("CMC"). The Company has the additional information, has made the requested revisions to the protocol, and is working on developing the CMC data. In the interim, Moleculin has withdrawn the IND application in order to resubmit it when the requested data are available. The Company believes that the resubmission of the IND application will occur in time for the IND to go into effect prior to the end of July 2017 and allow for clinical trials. However, if the Company is unable to obtain the required CMC data on a timely basis, it will be delayed in resubmitting its IND application, which will delay the commencement of the clinical trials for Annamycin beyond July 2017.
· Updated the Annamycin clinical strategy to add a Phase I arm to its next Phase II trial that leverages a potential increase in the MTD, which could increase the chance for positive outcomes. The Company believes that it will be able to publicly announce results from its Phase I/II clinical trial sometime in 2018.

WP1066
· An MD Anderson physician is sponsoring a study of WP1066 for the treatment of brain tumors. While the Company is not participating in and has no influence on the conduct of this study, we understand that the sponsoring physician has submitted an IND to the FDA and the IND is on hold until documentation of Good Manufacturing Process or GMP production of WP1066 can be presented to the FDA, which Moleculin has agreed to provide. The Company expects that the sponsor’s IND will move forward in 2017 and may produce publishable clinical results in 2018.
· Physician-scientists at another major US cancer center have requested and Moleculin has agreed to supply them with WP1066 for testing in a potential grant-funded clinical trial for children with Diffuse Intrinsic Pontine Gliomas (DIPG), a rare and very aggressive form of brain tumor. Studies conducted at this center have suggested that DIPG may be particularly sensitive to the inhibition of the activated form of a cell-signaling protein called STAT3, a primary target of WP1066, and their studies have demonstrated significant anti-tumor activity of WP1066 in DIPG in vitro and in vivo tumor models.

Corporate
· Announced the closing of an underwritten public offering of securities for net proceeds of approximately $4.5 million. Roth Capital Partners and National Securities Corporation acted as joint book-running managers. Subsequently, approximately $0.8 million of additional funds have been received through the exercise of associated warrants issued in the offering bringing the total net raised in excess of $5 million.
· Announced that Drs. Sandra Silberman and Paul Waymack have joined the Company’s Scientific Advisory Board ("SAB"). The Company’s current SAB also includes Dr. Waldemar Priebe (Chair) and Dr. Madeleine Duvic.

Planned Activities and Upcoming Potential Milestones

Anticipated Milestone Potential Timeframe
Announcement that our IND for Annamycin has become effective and that we may begin clinical trials End of July 2017
IRB (Institutional Review Board) approvals and site initiations of various clinical sites participating in our Phase I/II clinical trial of Annamycin Second Half of 2017
Establishment of a new MTD for Annamycin Second Half of 2017
A clinician sponsored IND for WP1066 for treatment of adult brain tumors moving forward Second Half of 2017
Announcement of Phase II data for Annamycin 2018
Announcement of further benefits of our sponsored research agreement with MD Anderson 2018

Walter Klemp, Chairman and CEO of Moleculin stated: "We remain focused on developing the CMC data needed to submit our IND to move forward with the FDA by the end of July and to allow for clinical trials to begin. Additionally, we are pleased to have Theradex Systems as our CRO for our planned Phase I/II clinical trial for Annamycin. As we transition from a preclinical to a clinical stage company, we will continue to provide updates on our upcoming key milestones. We believe we have sufficient funds to pursue our planned operations into the first quarter of 2018."

Unaudited Financial Results for the Quarter Ended March 31, 2017

Research and development (R&D) expense was $0.68 million and $0.02 million for the three months ended March 31, 2017 and 2016, respectively. The increase of approximately $0.66 million is mainly due to the Company becoming fully operational post its June 1, 2016 Initial Public Offering ("IPO"). The difference mainly consists of increases of $0.15 million in sponsored research and research consultants, $0.13 million in employee related costs, $0.14 million in manufacturing and stability costs associated with the Company’s IND application, $0.1 million in regulatory counsel, $0.07 million in costs associated with the Company’s licenses, and $0.07 million of other costs. This increased activity represents the Company’s efforts in obtaining Orphan Drug designation for Annamycin and its associated IND application with the FDA.

General and administrative ("G&A") expense was $0.85 million and $0.31 million for the three months ended March 31, 2017 and 2016, respectively. The expense increase of approximately $0.54 million is mainly due to the Company becoming fully operational post its June 1, 2016 IPO. Specifically, these increases were attributable to $0.25 million associated with added headcount and associated payroll costs, $0.23 million in legal, auditing, and accounting costs, and $0.06 million in other G&A costs.

The Company recorded a gain of $1.06 million in the first quarter of 2017 for the change in fair value on revaluation of its warrant liability associated with the warrants issued in conjunction with its stock offering on February 14, 2017. The Company is required to revalue certain of its 2017 warrants at the end of each reporting period and reflect in the statement of operations a gain or loss from the change in fair value of the warrant in the period in which the change occurred. A gain results principally from a decline in the Company’s share price during the period and a loss results principally from an increase in the Company’s share price.

During the period, the Company settled a previously incurred expense utilizing shares of its common stock with an attributed value of $3.00 per share. The gain of $0.15 million reflects the difference in the Company’s share price in the open market as of the settlement date and $3.00 per share.

Interest expense includes expense accrued on convertible promissory notes issued in 2015 and 2016 bearing interest at the rate of 8% per annum.

The net loss for the three months ended March 31, 2017 was $0.33 million, which included the non-cash gains mentioned above aggregating to $1.21 million. Excluding this amount, the net loss for the period was $1.54 million, which is an increase of $1.21 million over the previous years’ $0.33 million net loss. Included in both net loss numbers for the three months presented was $0.11 million and $0.00 million for the 2017 and 2016, respectively, in stock based compensation.

As of March 31, 2017, the Company had $8.88 million of cash and cash equivalents compared to $5.00 million at December 31, 2016. In February 2017, Moleculin completed a public offering of its common stock and warrants, pursuant to which it received approximately $4.5 million in net proceeds, after deducting underwriting discounts and commissions and estimated offering expenses. Additionally, during the three months ended March 31, 2017, $0.80 million in cash was received due to warrants being exercised. Cash used in operations was $1.39 million for the first quarter of 2017. The Company believes that its existing cash and cash equivalents as of March 31, 2017 continues to be sufficient to fund planned operations into the first quarter of 2018.

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On May 15, 2017 Cellular Biomedicine Group Inc. (NASDAQ: CBMG) ("CBMG" or the "Company"), a clinical-stage biopharmaceutical firm engaged in the development of effective immunotherapies for cancer and stem cell therapies for degenerative diseases, reported the addition of a new independent Phase I clinical trial of the Company’s ongoing CARD-1 study in patients with chemorefractory and aggressive DLBCL (Press release, Cellular Biomedicine Group, MAY 15, 2017, View Source [SID1234519124]). The Company and Shanghai Tongji Hospital (Tongji) are conducting a single arm, non-randomized study to evaluate the safety and efficacy of C-CAR011 (Anti-CD19 single-chain variable fragment (scFv) (41BB-CD3f)) therapy in relapsed or refractory B cell Non-Hodgkin Lymphoma (NHL). The trial will enroll 15 patients comprised of DLBCL, Primary Mediastinal Large B-Cell Lymphoma (PMBCL) and Follicular Lymphoma (FL).

"Driven by Shanghai’s regional demand, Tongji’s CAR-T expertise, the requirement to confirm site to site consistency and our need to prepare for the next phase of a confirmatory clinical trial, the new trial will benefit patients in Shanghai and provide CBMG with incremental data in safety and tolerability of C-CAR011 in more chemorefractory and aggressive DLBCL patients comprised of unique histogenesis and those with the most common indolent form of non-Hodgkin lymphoma (NHL). " said Mr. Tony Liu, Chief Executive Officer for CBMG.

Mr. Tony Liu added, "Due to our robust clinical pipeline, we believe the Company’s stock is currently undervalued. The management and our scientific team are committed to delivering long-term clinical benefits to patients that have the potential to address very large cancer and knee osteoarthritis markets and create long-term value for shareholders. We believe that CBMG has one of the very few leading integrated chemistry, manufacturing, and controls (CMC) facilities in the world for a cell therapy company, which when fully built out in China, will have the manufacturing capacity to support the treatment of 10,000 cancer and 10,000 knee osteoarthritis patients per year. With a healthy balance sheet and an efficient deployment of capital that will enable CBMG to execute on its clinical developments over the next twelve months, we are well equipped to further our clinical trials including the addition of new cancer indications by adding more top cancer centers in China for DLBCL and ALL trials using our C-CAR011 product. As a reminder, each year China has approximately five million new cancer patients, which far surpasses the U.S. We are pleased with our CAR-T patient screening and trial enrollment progress thus far and are on track to share our topline clinical data in the fourth quarter of this year as it becomes available. We look forward to evaluating new interests in expanding our clinical development and CAR-T partnerships with leading hospitals in major cities in China."

2017 Business & Technology Highlights

● In 2016, commenced patient enrollment in China for its CARD-1 ("CAR-T Against DLBCL") Phase I clinical trial utilizing CBMG’s optimized proprietary C-CAR011 construct of CD19 chimeric antigen receptor T-cell (CAR-T) therapy for the treatment of patients with refractory Diffuse Large B-cell Lymphoma (DLBCL);

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● Announced addition of second clinical trial site for its Chimeric Antigen Receptor T-cell (CAR-T) Phase I Clinical Trial for its CARD-1 Trial in patients with refractory Diffuse Large B-cell Lymphoma (DLBCL) in Shanghai with Tongji Hospital;

● Commenced CALL-1 ("CAR-T against Acute Lymphoblastic Leukemia") Phase I clinical trial in China utilizing its optimized proprietary C-CAR011 construct of CD19 chimeric antigen receptor T-cell (CAR-T) therapy for the treatment of patients with relapsed or refractory (r/r) CD19+ B-cell Acute Lymphoblastic Leukemia (ALL);

● Received the first disbursement of $1.2 million in the $2.29 million grant by California Institute for Regenerative Medicine (CIRM), California’s stem cell agency, to support pre-clinical studies of AlloJoinTM, CBMG’s "Off-the-Shelf" Allogeneic Human Adipose-derived Mesenchymal Stem Cells for the treatment of Knee Osteoarthritis in the United States;

● Completed expansion of its 30,000 square foot facility in Huishan High Tech Park in Wuxi, China, with 20,000 square feet of the Wuxi GMP facility dedicated to advanced stem cell culturing, centralized plasmid and viral vector production, cell banking and development of reagents;

● Began construction of a new GMP facility in "Pharma Valley" in Shanghai Zhangjiang High-Tech Park, which will consist of 40,000 square feet dedicated to advanced cell manufacturing;

● Established a strategic research collaboration with GE Healthcare Life Sciences China to co-develop certain high-quality industrial control processes in Chimeric Antigen Receptor T-cell (CAR-T) and stem cell manufacturing, and form a joint laboratory within CBMG’s new Shanghai Zhangjiang GMP-facility dedicated to the joint research and development of a functionally integrated and automated immunotherapy cell preparation system.

On May 15, 2017 Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, and Patheon N.V. (NYSE: PTHN), a leading global provider of high-quality drug development and delivery solutions to the pharmaceutical and biopharma sectors, reported that their boards of directors have approved Thermo Fisher’s acquisition of Patheon (Press release, Thermo Fisher Scientific, MAY 15, 2017, View Source [SID1234519129]). Thermo Fisher will commence a tender offer to acquire all of the issued and outstanding shares of Patheon for $35.00 per share in cash. The transaction represents a purchase price of approximately $7.2 billion, which includes the assumption of approximately $2.0 billion of net debt.

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Patheon provides comprehensive, integrated and highly customizable solutions as well as the expertise to help biopharmaceutical companies of all sizes satisfy complex development and manufacturing needs. It is a leader in the high-growth, $40 billion CDMO market, which is fueled by growing customer demand for end-to-end solutions, flexible and scalable capacity, and regulatory expertise. Patheon has an extensive network of state-of-the-art facilities primarily in North America and Europe, and approximately 9,000 professionals worldwide. The company generated 2016 revenue of approximately $1.9 billion and will become part of Thermo Fisher’s Laboratory Products and Services Segment.

"Patheon’s development and manufacturing capabilities are an excellent complement to our industry-leading offering for the biopharma market," said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. "Our combined capabilities will enhance our unique value proposition for these customers, create significant value for our shareholders and further accelerate our company’s growth."

James C. Mullen, chief executive officer of Patheon, said, "Over the past several years, we have increased our capabilities to become a leading CDMO provider in a highly fragmented market. We are confident that our combined offerings and Thermo Fisher’s proven track record of disciplined M&A and successful integrations will take our business to the next level."

Casper added, "We look forward to welcoming our new colleagues from Patheon to Thermo Fisher. Patheon’s commitment to quality and service excellence is directly aligned with our focus on helping our biopharma customers accelerate innovation and drive productivity."

Benefits of the Transaction

Patheon Provides Entry into the Attractive, High-growth CDMO Market. Patheon serves a large, fragmented market growing in the mid-single to high-single digits, which is fueled by strong demand for outsourcing services that allow customers to simplify their supply-chain networks. By offering both small- and large-molecule development and manufacturing solutions, the company helps customers reduce the time and cost of delivering medicines to market. Patheon has invested significantly to become a scale player in the CDMO market and extend its leadership position.

Combination Significantly Strengthens Thermo Fisher’s Unique Value Proposition for Pharmaceutical and Biotech Customers by Adding Highly Complementary Services. Thermo Fisher is the leading supplier to the biopharmaceutical industry, supporting research, clinical trials and production. It has become a trusted outsourcing partner by providing clinical trials logistics services over the past decade. Combining these capabilities with Patheon’s CDMO services will allow Thermo Fisher to be a stronger partner for pharmaceutical and biotech customers.

Creates Substantial Synergies and Positions Combined Company to Further Accelerate Growth. The combined company’s extensive and deep relationships in the biopharma industry will enable significant cross-selling opportunities. For example, having biologics development and manufacturing capabilities as well as bioproduction technologies in one company will allow Thermo Fisher to offer a more comprehensive portfolio to gain share with these customers.

Delivers Attractive Financial Benefits. The transaction is expected to be immediately and significantly accretive to Thermo Fisher’s adjusted EPS1 by $0.30 in the first full year after close. Thermo Fisher expects to realize total synergies of approximately $120 million by year three following the close, consisting of approximately $90 million of cost synergies and approximately $30 million of adjusted operating income1 benefit from revenue-related synergies.
Approvals and Financing

The transaction, which is expected to be completed by the end of 2017, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an Extraordinary General Meeting of Patheon’s shareholders, and completion of the tender offer. Thermo Fisher has entered into tender and support agreements with affiliates of JLL Partners and Royal DSM, whose collective holdings represent approximately 73% of Patheon shares, under which they will tender their shares in the transaction.

Thermo Fisher has obtained committed debt financing from Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC. The company expects to finance the purchase price with debt of approximately $5.2 billion and equity of approximately $2 billion. The offer is not subject to any financing condition.

Advisors

Goldman Sachs & Co. LLC is acting as financial advisor to Thermo Fisher, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel. Morgan Stanley & Co. LLC is acting as financial advisor to Patheon, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted EPS and adjusted operating income, which exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs; restructuring and other costs/income; and amortization of acquisition-related intangible assets. Adjusted EPS also excludes certain other gains and losses that are either isolated or cannot be expected to occur again with any regularity or predictability, tax provisions/benefits related to the previous items, benefits from tax credit carryforwards, the impact of significant tax audits or events and the results of discontinued operations. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. We believe that the use of non-GAAP measures helps investors to gain a better understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company’s performance, especially when comparing such results to previous periods or forecasts.

(Filing, 10-Q, Galectin Therapeutics, MAY 15, 2017, View Source [SID1234519119])

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Syros Pharmaceuticals has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Syros Pharmaceuticals, 2017, MAY 15, 2017, View Source [SID1234521271]).

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