On January 7, 2017 Mast Therapeutics, Inc. (Mast, NYSE MKT: MSTX) and Savara Inc. (Savara), a privately-held emerging specialty pharmaceutical company focused on the treatment of rare respiratory diseases, reported that the two companies have entered into a definitive merger agreement, under which the stockholders of Savara would become the majority owners of Mast, and the operations of Mast and Savara would be combined (Press release, Mast Therapeutics, JAN 7, 2017, View Source [SID1234517382]). Subject to stockholder approval, the combined company will advance a pipeline of novel inhalation therapies for the treatment of diseases with significant unmet medical needs, featuring three product candidates, each in advanced clinical development.

The combined company pipeline will include:

•AeroVanc, an inhaled dry-powder vancomycin to treat chronic methicillin-resistant Staphylococcus aureus (MRSA) pulmonary infection in cystic fibrosis (CF) in preparation for a pivotal Phase 3 study

•Molgradex, an inhaled nebulized GM-CSF to treat pulmonary alveolar proteinosis (PAP) currently in Phase 2/3 development

•AIR001, an inhaled nebulized sodium nitrite solution to treat heart failure with preserved ejection fraction (HFpEF) currently in Phase 2 development

"Following an extensive review of strategic alternatives and a thorough process, the Mast Board of Directors chose to combine with Savara because we believe the proposed merger provides an attractive opportunity for our shareholders to obtain value appreciation from a diversified pipeline and positions the company for more rapid short- and long-term growth via a triad of late-stage clinical assets with important forthcoming milestones," stated Brian M. Culley, current Chief Executive Officer and Director of Mast Therapeutics. "We are excited for the prospects of the combined company and believe that Savara’s management team is well equipped to advance the pipeline toward regulatory approvals and commercialization in the US and EU."

Rob Neville, Chairman and CEO of Savara added, "This merger is transformative for Savara and marks our second transaction in a year, each expanding Savara’s pipeline of inhaled therapies for serious and life-threatening diseases. AeroVanc and Molgradex are orphan-designated product candidates in late-stage development, and we see Mast’s AIR001 program potentially adding significant value to our pipeline with a modest capital outlay in 2017. We believe the favorable risk profile of our product candidates combined with their market potential provides a unique opportunity for Savara to become the next breakout company in orphan pulmonary diseases."

Select Anticipated Upcoming Development Milestones

•
Initiate a pivotal Phase 3 study of AeroVanc for the treatment of MRSA in CF patients in Q3/2017.

•
Announce top-line results from a registration-enabling Phase 2/3 study of Molgradex for the treatment of PAP currently ongoing for Europe and Japan in Q1/2018.

•
Complete negotiations with the U.S. Food and Drug Administration (FDA) on the requirements for a pivotal clinical study of Molgradex in the U.S. in Q3/2017.

•
Announce results from an ongoing 100-patient Phase 2 study of AIR001 for the treatment of HFpEF being conducted by the Heart Failure Clinical Research Network in Q1/2018.

About the Proposed Merger

Under the terms of the merger agreement, pending stockholder approval of the transaction, Savara stockholders will receive newly issued shares of Mast common stock in exchange for their Savara stock. The exchange ratio was determined using a pre-transaction valuation of $115 million for Savara’s business, based on its latest priced investment round and an acquisition of assets of Serendex Pharmaceuticals A/S, and $36.5 million for Mast’s business, a premium to the 20-day volume weighted average share price of Mast. As a result, current Mast stockholders will collectively own approximately 24%, and Savara stockholders will collectively own approximately 76%, of the combined company on a pro-forma basis, subject to adjustment based on Mast’s net cash balance and Mast’s and Savara’s capitalization at closing.

The combined company, led by Savara’s current management team, is expected to be named Savara Inc. and be headquartered in Austin, TX. Prior to closing, Mast will seek stockholder approval to conduct a reverse split of its outstanding shares to satisfy listing requirements of the NYSE MKT. The combined company is expected to trade on the NYSE MKT under a new ticker symbol. At closing, the combined company’s board of directors is expected to consist of seven members, including five members of Savara’s current board and two members of Mast’s current board. The merger agreement has been unanimously approved by the board of directors of each company. The transaction is expected to close by the second quarter of 2017, subject to approvals by the stockholders of Mast and Savara, and other customary closing conditions.

Mast’s financial advisor in the transaction is Roth Capital Partners. Canaccord Genuity Inc. is acting as financial advisor to Savara. DLA Piper LLP (US) is serving as legal counsel to Mast and Wilson Sonsini Goodrich & Rosati, P.C. is serving as legal counsel to Savara.

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On January 6, 2017 Puma Biotechnology, Inc. (Nasdaq: PBYI), a biopharmaceutical company, reported it has expanded the fourth cohort from its Phase II SUMMIT clinical trial of its lead drug candidate PB272 (neratinib) as a single agent in patients with solid tumors who have an activating HER2 mutation (basket trial) (Press release, Puma Biotechnology, JAN 6, 2017, View Source [SID1234517291]). The cohort that has been expanded is the cohort that includes patients with metastatic cervical cancer and whose tumors have a HER2 mutation.

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The Phase II SUMMIT basket trial is an open-label, multicenter, multi-histology, international study to evaluate the safety and efficacy of PB272 administered daily to patients who have solid tumors with activating ERBB mutations including EGFR, HER2 and HER3. The cohorts included in the basket study receiving neratinib monotherapy are hormone receptor-negative breast cancer; biliary tract cancers; endometrial cancer; gastric/esophageal cancer; ovarian cancer; and all other solid tumors with a HER2 mutation. The cohorts receiving combination treatment are hormone receptor-positive breast cancer (neratinib plus fulvestrant) and bladder cancer (neratinib plus paclitaxel). The cervical cancer patients initially entered the study in the "other solid tumors with a HER2 mutation" cohort, and due to the preliminary activity seen in the trial, the Company has expanded a separate cervical cancer cohort pursuant to the protocol for the trial. The expanded HER2-mutant cervical cancer cohort will now enroll a total of 18 patients.

Dr. David Hyman, Director, Developmental Therapeutics at Memorial Sloan Kettering Cancer Center and principal investigator of the trial, stated, "We are pleased to expand our evaluation of neratinib in metastatic cervical cancer, an orphan and deadly disease with few treatment options. We believe this once again demonstrates the value of the basket study approach, in particular for developing targeted therapy for rare diseases with clinically-actionable mutations. We look forward to presenting the full results of the SUMMIT trial at a medical meeting in 2017."

"We are pleased to expand the fourth cohort in the basket trial," said Alan H. Auerbach, Chief Executive Officer and President of Puma. "Although it is early, we are pleased with the initial activity that we are seeing in the patients with HER2 mutated cervical cancer in the trial. We look forward to continuing enrollment into this expanded cohort and look forward to presenting the full results from the SUMMIT study in 2017."

On January 6, 2017 RedHill Biopharma Ltd. (NASDAQ:RDHL) (TASE:RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company primarily focused on the development and commercialization of late clinical-stage, proprietary, orally-administered, small molecule drugs for gastrointestinal and inflammatory diseases and cancer, reported the presentation of an abstract relating to YELIVA, the Company’s proprietary, first-in-class, orally-administered sphingosine kinase-2 (SK2) selective inhibitor, at the 2017 Cholangiocarcinoma Foundation Annual Conference, on February 2, 2017, in Salt Lake City, UT (Press release, RedHill Biopharma, JAN 6, 2017, View Source [SID1234517295]).

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The abstract, entitled ‘Targeting Sphingosine Kinase-2 for the Treatment of Cholangiocarcinoma (CCA)’1, was authored by scientists from the Mayo Clinic, Apogee Biotechnology Corp. (Apogee), the Medical University of South Carolina (MUSC) and RedHill. It will be presented by one of its authors, Dr. Lewis R. Roberts, M.B., Ch.B., Ph.D, a gastroenterologist and hepatologist at Mayo Clinic and the External Co-Chair of The Cancer Genome Atlas (TCGA) Cholangiocarcinoma Project of the National Cancer Institute (NCI).

The authors of the abstract assessed the effects of YELIVA on cholangiocarcinoma cells in culture and in patients in the Phase I clinical study with YELIVA, concluding that the findings from these studies suggest that YELIVA may be an effective drug for the treatment of cholangiocarcinoma. Cholangiocarcinoma (bile duct cancer) is a highly lethal malignancy for which there is a need for more effective systemic treatments. Surgery with complete resection remains the only curative therapy for cholangiocarcinoma, however only a minority of patients are classified as having a resectable tumor at the time of diagnosis2.

RedHill announced in June 2016 that the final results from the Phase I study with YELIVA in patients with advanced solid tumors confirmed that the study, conducted at MUSC Hollings Cancer Center, successfully met its primary and secondary endpoints, demonstrating that the drug is well-tolerated and can be safely administered to cancer patients at doses that provide circulating drug levels that are predicted to have therapeutic activity.

Of the three patients with cholangiocarcinoma in the Phase I study, one subject achieved a sustained partial response (Overall Survival (OS) = 20.3 months) and the other two subjects had stable disease (OS = 17.6 and 16.3 months).

YELIVA is a Phase II-stage, proprietary, first-in-class, orally-administered sphingosine kinase-2 (SK2) selective inhibitor with anticancer and anti-inflammatory activities, targeting multiple oncology, inflammatory and gastrointestinal indications. By inhibiting the SK2 enzyme, YELIVA blocks the synthesis of sphingosine 1-phosphate (S1P), a lipid signaling molecule that promotes cancer growth and pathological inflammation.

A Phase II study with YELIVA for the treatment of advanced hepatocellular carcinoma (HCC) was initiated at MUSC Hollings Cancer Center. The study is supported by a $1.8 million grant from the NCI, awarded to MUSC, which is intended to fund a broad range of studies on the feasibility of targeting sphingolipid metabolism for the treatment of a variety of solid tumor cancers, with additional support from RedHill.

A Phase Ib/II study with YELIVA for the treatment of refractory or relapsed multiple myeloma was initiated at Duke University Medical Center. The study is supported by a $2 million grant from the NCI Small Business Innovation Research Program (SBIR) awarded to Apogee, in conjunction with Duke University, with additional support from RedHill.

A Phase I/II clinical study evaluating YELIVA in patients with refractory/relapsed diffuse large B-cell lymphoma was initiated in June 2015 at the Louisiana State University Health Sciences Center in New Orleans and was recently amended to address overall recruitment prospects. The study will now also include Kaposi sarcoma patients. The study is supported by a grant from the NCI awarded to Apogee, with additional support from RedHill.

A Phase Ib study to evaluate YELIVA as a radioprotectant for prevention of mucositis in head and neck cancer patients undergoing therapeutic radiotherapy is planned to be initiated in the first half of 2017.

Additional Phase I/II studies with YELIVA for other indications are in various stages of preparation.

About YELIVA (ABC294640):

YELIVA (ABC294640) is a Phase II-stage, proprietary, first-in-class, orally-administered, sphingosine kinase-2 (SK2) selective inhibitor with anti-cancer and anti-inflammatory activities. RedHill is pursuing with YELIVA multiple clinical programs in oncology, inflammatory and gastrointestinal indications. By inhibiting the SK2 enzyme, YELIVA blocks the synthesis of sphingosine 1-phosphate (S1P), a lipid signaling molecule that promotes cancer growth and pathological inflammation. SK2 is an innovative molecular target for anticancer therapy because of its critical role in catalyzing the formation of S1P, which is known to regulate cell proliferation and activation of inflammatory pathways. YELIVA was originally developed by U.S.-based Apogee Biotechnology Corp. and completed multiple successful pre-clinical studies in oncology, inflammation, GI and radioprotection models, as well as the ABC-101 Phase I clinical study in cancer patients with advanced solid tumors. The Phase I study included the first-ever longitudinal analysis of plasma S1P levels as a potential pharmacodynamic (PD) biomarker for activity of a sphingolipid-targeted drug. The administration of YELIVA resulted in a rapid and pronounced decrease in S1P levels, with several patients having prolonged stabilization of disease. The development of YELIVA was funded to date primarily by grants and contracts from U.S. federal and state government agencies awarded to Apogee Biotechnology Corp., including the U.S. National Cancer Institute, the U.S. Department of Health and Human Services’ Biomedical Advanced Research and Development Authority (BARDA), the U.S. Department of Defense and the FDA Office of Orphan Products Development.

On January 6, 2017 Adaptive Biotechnologies, the leader in combining next-generation sequencing (NGS) and expert bioinformatics to profile T- and B-cell receptors of the adaptive immune system, reported it has entered into an agreement with Amgen to further develop and commercialize Adaptive’s NGS-based clonoSEQ Assay to assess minimal residual disease (MRD) in patients with Acute Lymphoblastic Leukemia (ALL) (Press release, Adaptive Biotechnologies, JAN 6, 2017, View Source [SID1234517298]).

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"Adaptive is fully committed to collaborating with Amgen to bring a robust, validated MRD measure to ALL patients who need better management and monitoring of their disease," said Chad Robins, President, CEO and Co-Founder of Adaptive Biotechnologies. "We are excited to demonstrate through this collaboration that Adaptive’s highly accurate and sensitive clonoSEQ Assay can be used to give patients and clinicians a more reliable and validated resource to improve monitoring and management of ALL."

Through the collaboration, the parties will work towards building the dataset for MRD as a validated measure of patient outcomes in ALL.

About Minimal/Measurable Residual Disease

Minimal/measurable residual disease (MRD) refers to cancer cells that remain in the body of a person with lymphoid cancer after treatment. These cells can be present at levels undetectable by traditional morphologic, microscopic examination of blood, bone marrow or a lymph node biopsy. Sensitive molecular technologies, such as next-generation sequencing utilized by the Adaptive Biotechnologies clonoSEQ Assay, are needed for reliable detection of MRD at levels below the limits of traditional assessment.

About the clonoSEQ Assay
The Adaptive Biotechnologies clonoSEQ Assay enables physicians to utilize next-generation sequencing-based minimal/measureable residual disease (MRD) detection to inform clinical decision making for patients with lymphoid malignancies. The clonoSEQ Assay detects and quantifies DNA sequences found in malignant cells which can be tracked throughout treatment. This robust assay provides consistent, accurate measurement of disease burden which allows physicians to visualize response to treatment over time to optimize patient management. Adaptive will be seeking marketing authorization from FDA for the clonoSEQ Assay.

On January 6, 2017 BioAtla and F1 Oncology reported a global license agreement to combine BioAtla’s CAB technology with F1 Oncology’s proprietary technolog ies to develop and commercialize chimeric antigen receptor T-­cell (CAR-­T) therapies and other ACTs for the treatment of cancer (Press release, EXUMA Biotechnology, JAN 6, 2017, View Source [SID1234621448]).

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F1 Oncology recently completed a $37M Series A financing led by F1 BioVentures LLC, Sinobioway Group, and SunTerra Capital. Through its international affiliates, F1 Oncology also entered into a development and commercialization agreement with Shanghai SunTerra Biotechnology Ltd. and its network of academic investigators to enable clinical investigation of CAB CAR-­T candidates in China. F1 Oncology’s partners intend to begin clinical trials in China in 2017 targeting a solid tumor indication using F1’s first CAB CAR-­T therapy candidate. The financial terms of this agreement include technical and regulatory milestone -­ based equity investments of up to $50 million through 2018, as well as supply -­ related payments by target and indication. F1 Oncology retains rights to all products outside China, Hong Kong, Macau and Taiwan.

We are pleased and excited to collaborate with Dr. Frost and his experienced team at F1 Oncology to combine our CAB technology with F1 Oncology’s proprietary technology and manufacturing expertise to develop new CAR-­T therapies.
JAY M. SHORT, PH.D., CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF BIOATLA.

BioAtla has granted F1 Oncology an exclusive worldwide license under patents and know -­ how controlled by BioAtla to discover, develop, manufacture and commercialize ACT preparations and treatments for cancer. The financial terms of this license to F1 Oncology include a mid-­single digit royalty outside of China, Hong Kong, Macau and Taiwan (the Territory). Within the Territory, the license is royalty-­free and fully paid, and BioAtla shares in the product revenue. In exchange for the license rights, as well as BioAtla’s agreement not to compete in ACTs, BioAtla received a majority, non-­controlling interest of the outstanding capital stock of F1 Oncology and has no funding or financial obligation. BioAtla also has a conditional and time-­limited option to acquire at a fixed valuation all of the outstanding equity securities of F1 Oncology held by all other investors.

BioAtla and F1 Oncology have identified CAR-­T and other ACT therapies as potential opportunities for the application of CAB technology. BioAtla has demonstrated in preclinical studies that CAB antibodies can be constructed in the same single chain format used by CAR-­Ts and can retain their selectivity for binding under conditions representative of the tumor microenvironment (TME) and with minimal to no detectable binding in normal cell conditions. CARs are constructs that contain an antigen–binding domain of an antibody fused to a strong T-­cell activator domain. T-­cells modified with the CAR construct can bind to the antigen and be stimulated to attack the bound cells. On-­target, off-­tumor toxicity has largely limited current CAR-­T therapies to target blood cancers such as leukemia and some lymphomas. While CAR-­T related toxicities are multifactorial and complex, CAR-­T cells containing CAB CAR domains targeting solid tumor antigens would be intended to reduce on-­target, off-­tumor toxicity and potentially increase patient safety.

"We are pleased and excited to collaborate with Dr. Frost and his experienced team at F1 Oncology to combine our CAB technology with F1 Oncology’s proprietary technology and manufacturing expertise to develop new CAR-­T therapies. Through our combined efforts, F1 Oncology will focus on developing effective and safer therapy to patients and especially to those afflicted with solid tumor cancers representing the great majority of cancer cases," stated Jay M. Short, Ph.D., Chairman, President and Chief Executive Officer of BioAtla. "The structure of our agreements provides for the advancement of CAB opportunities in the important field of ACTs while allowing BioAtla to focus its research, development and management capabilities and financial resources on its primary objectives of creating and commercializing CAB antibodies for cancer therapy and for treatment of other diseases."

"Dr. Short and I have a successful history of early research collaborations in protein evolution that we look forward to applying to this key challenge of adoptive cellular therapy for solid tumors" noted Gregory I.Frost, Ph.D., Chairman and CEO of F1 Oncology, Inc. "While patient safety, CAR-­T cell engraftment, and definitive radiologic response are the key milestones from which these first programs must be judged, we are encouraged by the successful generation and pre-­clinical testing by F1 Oncology of conditionally active CAR-­T cells in primary human lymphocytes with a number of BioAtla’s CAB domains in F1 Oncology’s CAR-­T platform."

ABOUT CONDITIONALLY ACTIVE BIOLOGICS (CABS)
Conditionally Active Biologic proteins are generated using BioAtla’s proprietary protein discovery, evolution and expression technologies. These proteins can be mAbs, enzymes and other proteins designed with functions dependent on changes in microphysiological conditions (e.g., pH level, oxidation, temperature, pressure, presence of certain ions, hydrophobicity and combinations thereof) both outside and inside cells.

Studies have shown that cancerous tumors create highly specific conditions at their site that are not present in normal tissue. These cancerous microenvironments are primarily a result of the well understood unique glycolytic metabolism associated with cancer cells, referred to as the Warburg Effect. CAB-­designed mAbs can be programmed to deliver their therapeutic payload and/or recruit the immune response in specific and selected locations and conditions within the body. CABs have the potential to increase safety because they are designed to be active only in the presence of a particular cellular microenvironment thereby preferentially binding to their intended target protein in the area of disease. In addition, the activation is reversible and can repeatedly switch ‘on and off’ should the CAB move from a diseased to a normal cellular microenvironment and vice versa, thereby further reducing chances the CAB would bind to the same protein located in healthy tissue or in other parts of the body and cause undesirable toxicity.