On March 20, 2017 Transgene (Paris:TNG) (Euronext Paris: TNG), a biotechnology company focused on designing and developing viral-based immune-targeted therapies for the treatment of cancers and infectious diseases, reported its financial results for the fiscal year ended December 31, 2016, and provided its outlook for 2017 (Press release, Transgene, MAR 20, 2017, View Source [SID1234518217]).
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In 2016, Transgene has focused its efforts on implementing its strategy, which looks to combine Transgene’s immunotherapies (therapeutic vaccines and oncolytic viruses, which boost the immune system), with immune checkpoint inhibitors (ICIs). Over the last twelve months, additional data from clinical studies combining active immunotherapies with ICIs have confirmed the strong rationale behind this strategy.
During the second half of 2016, Transgene signed two clinical collaboration agreements that allow clinical studies with:
TG4010 in combination with Bristol Myers-Squibb’s ICI nivolumab in lung cancer patients receiving a 2nd line of treatment and;
TG4001 with Merck KGaA’s and Pfizer’s ICI avelumab in patients with HPV-positive head and neck cancer.
Several clinical trials have recently started or are being initiated to confirm the potential of Transgene’s immunotherapeutics in combination with ICIs. The first results from these studies are expected around the end of 2017.
During the 2016 fiscal year, the Company strengthened its financial structure which will provide it with the funding to execute its clinical development plan through the end of 2018. This improved financial situation was the result of:
a loan of €20 million from the European Investment Bank (EIB), €10 million of which was drawn down in June 2016 ;
a €46.4 million rights issue that was completed in November 2016;
as well as the significant reduction of our net loss €25.2 million compared to €46.4 million in 2015.
In parallel with strengthening its financial position, Transgene completed its reorganization with the result it is now focused on research and clinical development (R&D). As part of the restructuring, Transgene sold its production facility to ABL Europe, a Mérieux Group Company, for €3.5 million.
Philippe Archinard, Chairman and Chief Executive Officer of Transgene said: "Our achievements in 2016 have reinforced our position as a major player in immunotherapy. Our portfolio of immunotherapies, our clinical collaborations and our much-improved financial position have put us in a strong position to execute our clinical plan which is designed to deliver a rich news flow over the coming months. Positive results from these studies would allow us to conclude partnership agreements with pharmaceutical companies. We are looking forward to demonstrating the important clinical benefits that our immunotherapies in combination with ICIs can offer to patients with severe diseases."
Product pipeline review
1. Therapeutic Vaccines
TG4010 in advanced non-squamous non-small cell lung cancer
TG4010 is a therapeutic vaccine that induces an immune response against MUC1 expressing cells. TG4010 is being developed in non-squamous non-small cell lung cancer (NSCLC). TG4010’s mechanism of action and excellent safety profile make it a very suitable candidate for combinations with other therapies.
TG4010’s development plan is focused on Phase 2 studies that can generate a comprehensive data package for TG4010 in 1st- and 2nd-line treatment of advanced NSCLC over the next 9 to 18 months.
The clinical trials aim to confirm the synergies that are expected to result from the combination of a therapeutic vaccine and an ICI. The expected clinical benefits are an increase in the response rate, in the quality and in the duration of the response to current and future standards of care.
TG4010
+ Opdivo (ICI)
(nivolumab)
Phase 2
Non-small cell lung cancer (NSCLC) – 2nd-line
Trial of TG4010 in combination with Opdivo, conducted by UC Davis Medical Center (USA), with the support of Bristol-Myers Squibb (supply of nivolumab)
First patient treated in March 2017 (NCT02823990) and first results expected around the end of 2017
TG4010
+ ICI
+ chemotherapy
Phase 2
Non-small cell lung cancer (NSCLC) – 1st-line
Preparation of a Phase 2 clinical trial combining TG4010 with an ICI and with standard chemotherapy in patients with tumor cells expressing low or undetectable levels of PD-L1
Ongoing discussion with a pharma to conduct this trial
First patient expected to be enrolled towards the end of 2017
TG4001: trial in combination with avelumab following collaboration agreement with Merck KGaA and Pfizer
TG4001 is a therapeutic vaccine that has already been administered to more than 300 patients with high grade cervical intra-epithelial neoplasia (CIN 2/3). This clinical experience has demonstrated good tolerability, a significant HPV clearance rate and promising efficacy results for TG4001. Its mechanism of action and good safety profile make TG4001 an appropriate candidate for combinations with other therapies, such as the anti-PD-L1 ICI avelumab.
TG4001
+ avelumab (ICI)
Phase 2
HPV positive head and neck cancer – 2nd-line
Signed clinical collaboration agreement with Merck KGaA and Pfizer, with supply of avelumab for the trial
First patient expected in 2H 2017
Prof. Christophe Le Tourneau, Institut Curie, principal investigator
TG1050: ongoing recruitment in the Phase 1/1b trial, results expected in 2H 2017
TG1050 is a therapeutic vaccine for the treatment of chronic hepatitis B. In 2015, Transgene started a study (NCT02428400) evaluating the safety and tolerability of TG1050 in patients who are currently being treated for chronic HBV infection with standard-of-care antiviral therapy. The technology of TG1050 is also being developed in China, where Transgene operates a joint-venture with Tasly Biopharmaceutical Technology.
TG1050
+ Standard-of-
Care Antiviral
Phase 1/1b
Chronic hepatitis B
Phase 1/1b clinical trial is progressing following positive recommendation of the Safety Review Committee in July 2016
First data readout in 2H 2017
2. Oncolytic viruses
Pexa-Vec: ongoing Phase 3 trial, initiation of the Phase 2 clinical trials in combination with ICIs
Pexa-Vec is an oncolytic virus designed to selectively destroy cancer cells through intracellular viral replication (oncolysis), and by stimulating the body’s immune response against cancer cells. Its mechanism of action and its tolerability profile make it an appropriate candidate for combinations with immune checkpoint inhibitors (ICIs).
Pexa-Vec
+ sorafenib
(PHOCUS)
Phase 3
Advanced liver cancer (hepatocellular carcinoma – HCC) – 1st-line
1st patient enrolled (January 2016)
Ongoing recruitment in line with forecasts, 1st patient to be treated shortly in Europe
Clinical trial conducted by SillaJen, Inc., Transgene’s partner
First data readout expected in 2019
Pexa-Vec
+ nivolumab (ICI)
Phase 2
Advanced liver cancer (hepatocellular carcinoma – HCC) – 1st-line
1st patient expected to be treated in 2Q 2017
Pexa-Vec
+ ipilimumab (ICI)
Phase 1
Solid tumors
1st patient treated in February 2017 in a clinical trial evaluating the tolerability and efficacy of intratumoral injection regimen
Centre Léon Bérard, sponsor of the trial (NCT02977156)
First readout around the end of 2017
TG6002: preparation of first-in-human trial
TG6002 is a next generation oncolytic immunotherapy. It has been designed to induce the breakdown of cancer cells (oncolysis) and express the FCU1 gene in cancer cells it has infected leading to the local production of 5-FU, a widely used chemotherapy. TG6002 could potentially be used both in combination or as monotherapy.
TG6002
Phase 1
Glioblastoma
Preparation of the clinical trial with AP-HP (Pr Delattre principal investigator), with the support of INCA (French national cancer institute)
Trial to start in 2Q 2017
3. Research and preclinical portfolio
Transgene has delivered multiple important research and preclinical milestones in 2016. Transgene is exploring a new generation of armed oncolytic viruses. These oncolytic viruses can be armed with ICIs and/or therapeutic moieties that modulate the tumor micro-environment. These novel therapeutic payloads are designed to modify cell interactions within the tumor and enhance the efficacy of oncolytic viruses.
Transgene has filed a patent for an oncolytic Vaccinia Virus expressing an anti-PD1 antibody. Transgene presented a poster at the AACR (Free AACR Whitepaper) (American Association for Cancer Research) meeting in April 2016, demonstrating our capacity to engineer advanced multifunctional viruses.
Corporate
Restructuring plan and sale of the production facility to ABL Europe for €3.5 million finalized. Annualized recurring savings are estimated to be approximately €15 million.
Management team strengthened: Maud Brandely, MD, PhD appointed Chief Medical Officer, and John Felitti, JD, LLM appointed General Counsel & Corporate Secretary.
Key financials for 2016
Net cash burn for 2016 was €30.6 million (including €5 million linked to the restructuring), versus €34.8 million in 2015. This was lower than expected due to a delay in an $4 million milestone payment to SillaJen. This payment is to be made in early 2017.
Cash available at year-end 2016: €56.2 million, compared to €31.7 million at the end of 2015. This higher cash balance includes the €10 million draw-down of the EIB loan and the net proceeds of €45.2 million from the rights issue which was concluded in November 2016.
Net operating expenses of €33.0 million in 2016, compared to €45.8 million in 2015.
Significantly reduced net loss of €25.2 million in 2016, compared to a loss of €46.4 million in 2015.
"Transgene’s 2016 financials reflect the completion of the reorganization that started in 2015. This has led to a significant reduction of our operating costs and as a result a 46% reduction in our net loss when compared to 2015. This reduction in fixed costs has enabled us to devote a greater proportion of our increased financial resources to our key strategic clinical and pre-clinical programs," said Jean-Philippe Del, Vice President, Finance.
The financial statements for 2016 as well as management’s discussion and analysis are attached to this press release (Appendices A and B).
Financial Outlook 2017
Transgene expects its cash burn to be around €30 million in 2017. This figure takes into account the increase in costs related to the launch of clinical trials in 2017, as well as a confirmed significant reduction of our fixed costs following the restructuring that has taken place since 2015.
The Company still has access to further funding of up to €10 million from the second tranche of the EIB loan.
Transgene will host a "R&D Day", on June 22, 2017. The event which will be conducted in English will feature presentations from several leading international scientists and clinicians.
The Board of Directors of Transgene met on March 17, 2017, under the chairmanship of Philippe Archinard and closed the 2016 financial statements. Audit procedures have been performed by the statutory auditors and the delivery of the auditors’ report is ongoing. The registration document, which includes the financial report, will be available in April 2017 on Transgene’s website, www.transgene.com.
A conference call in English is scheduled on March 20th at 6 PM CET.