On April 20, 2016 RedHill Biopharma Ltd. (NASDAQ:RDHL) (TASE:RDHL) ("RedHill" or the "Company"), a biopharmaceutical company primarily focused on development and commercialization of late clinical-stage, proprietary, orally-administered, small molecule drugs for inflammatory and gastrointestinal diseases, including cancer, reported its financial results for the quarter ended March 31, 2016 (Press release, RedHill Biopharma, APR 20, 2016, View Source [SID:1234511125]).
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Financial highlights for the quarter ended March 31, 2016:
Research and Development Expenses in the first quarter of 2016 were approximately $4.7 million, an increase of approximately $0.9 million, compared to approximately $3.8 million in the first quarter of 2015. The increase resulted primarily from clinical trial costs related to the ongoing Phase III MAP US clinical study with RHB-104 (Crohn’s disease) and the preparations for several Phase II studies with YELIVA for multiple oncology, inflammatory and gastrointestinal indications.
General and Administrative Expenses in the first quarter of 2016 were approximately $1.2 million, an increase of approximately $0.3 million, compared to approximately $0.9 million in the first quarter of 2015. The increase was mainly due to professional fees associated with business development activities, intellectual property costs and share-based compensation costs.
Operating Loss in the first quarter of 2016 was approximately $5.9 million, an increase of approximately $1.1 million, compared to approximately $4.8 million in the first quarter of 2015. The increase was mainly in Research and Development Expenses and General and Administrative Expenses.
Net Cash Used in Operating Activities in the first quarter of 2016 was approximately $5.0 million, an increase of approximately $1.6 million, compared to approximately $3.4 million in the first quarter of 2015. The increase was mainly a result of an increase in research and development activities.
Net Cash Used in Investment Activities in the first quarter of 2016 was approximately $4.6 million, a decrease of approximately $2.5 million, compared to approximately $7.1 million in the first quarter of 2015. The decrease was mainly in bank deposit investments.
Cash Provided by Financing Activities in the first quarter of 2016 was immaterial, compared to approximately $13.2 million in the first quarter of 2015, resulting from a public offering in February 2015 in the U.S.
Cash Balance1 as of March 31, 2016 was approximately $53.4 million, a decrease of approximately $5 million, compared to approximately $58.4 million as of December 31, 2015. The decrease was a result of the ongoing operations, mainly related to research and development activities.
Micha Ben Chorin, RedHill’s CFO, said: "We made significant progress with our advanced clinical programs during the first quarter of 2016 and are excited about the potential milestones expected during the second half of 2016, including the interim DSMB analysis of the RHB-104 Phase III MAP US study for Crohn’s disease, top-line results from the BEKINDA Phase III GUARD study for gastroenteritis and the initiation of a confirmatory Phase III study with RHB-105 for the treatment of H. pylori infection. With a strong cash position of approximately $53 million at the end of the first quarter, we are well-positioned to execute our strategic and operational plans for 2016."
Recent operational highlights:
On February 8, 2016, RedHill announced a research collaboration with Leipzig-based Fraunhofer Institute for Cell Therapy and Immunology (IZI), a research unit of the Fraunhofer Society, one of the largest and most prominent applied research organizations in the world, for the evaluation of RedHill’s Phase II-stage oncology drug candidate, RP101. The research collaboration tests RP101 in pre-clinical oncology models, including pancreatic cancer, in combination with standard-of-care chemotherapies to support existing Phase I and Phase II clinical data. Results from the studies are expected during the second quarter of 2016.
On February 10, 2016, RedHill announced that it had received a Notice of Allowance from the United States Patent and Trademark Office (USPTO) for a new patent covering RHB-104. The patent, entitled "Compositions Comprising Rifabutin, Clarithromycin, and Clofazamine and Uses Therof" has since been issued and is valid through 2029. RedHill currently holds five U.S. patents and multiple international patents for RHB-104.
On March 1, 2016, RedHill announced that it had completed enrollment of over half of the planned 270 patients in the Phase III MAP US study for Crohn’s disease in the U.S. and additional countries. Interim DSMB analysis of the study is expected in the second half of 2016.
On March 10, 2016, RedHill announced the publication of an article evaluating the therapeutic potential of YELIVA (ABC294640), the Company’s orally-administered first-in-class Sphingosine kinase-2 (SK2) selective inhibitor, for the treatment of cholangiocarcinoma (bile duct cancer). The article, describing non-clinical studies conducted with YELIVA, was authored by scientists from the Mayo Clinic Cancer Center, the Hollings Cancer Center at the Medical University of South Carolina and Apogee Biotechnology Corporation. The authors concluded that these findings provide preliminary insight into the possible use of YELIVA as an anticancer drug for cholangiocarcinoma treatment, as well as novel evidence that SK2 may be a rational therapeutic target in the treatment of this cancer.
On March 29, 2016, RedHill and its co-development partner for RIZAPORT, IntelGenx Corp., announced that they had entered into a binding term sheet with Grupo JUSTE S.A.Q.F ("Grupo JUSTE") granting Grupo JUSTE the exclusive license to commercialize RIZAPORT in Spain and a right of first refusal for additional territories. Under the term sheet, subject to remaining conditions, a definitive agreement is planned to be entered into within 60 days of the execution of the term sheet. Under the term sheet, RedHill and IntelGenx Corp. will receive an upfront payment and will be eligible to receive additional milestone payments upon achievement of certain predefined regulatory and commercial targets, as well as tiered royalties. Commercial launch in Spain is estimated to take place in the second half of 2017. RedHill also reported that a new U.S. formulation patent covering RIZAPORT was issued by the USPTO on April 5, 2016. The patent is valid until 2034.
On March 31, 2016, RedHill announced encouraging top-line interim results from its ongoing CEASE-MS Phase IIa proof-of-concept (PoC) clinical study evaluating fixed oral dose RHB-104 in patients treated for relapsing-remitting multiple sclerosis (RRMS). The ongoing CEASE-MS, single-arm, open-label study was designed with a series of exploratory endpoints to evaluate the safety and potential efficacy of fixed oral dose RHB-104 as an add-on therapy to interferon beta-1a in 18 patients treated for RRMS. Interim results after completion of the 24-week treatment period of the study demonstrated positive safety and clinical signals and support further clinical development based on encouraging preliminary data. Additional data reads are due at week 48 following a 24-week follow-up treatment period with interferon beta-1a, without RHB-104 add-on. The top-line interim results demonstrated an annualized relapse rate (ARR) at 24 weeks of 0.288 in the modified intent-to-treat (mITT) population and 0.0 in the per-protocol (PP) population, comparing favorably with previously reported pivotal studies of interferon beta-1a therapies Avonex (0.67)[2] and Rebif (0.87-0.91)[3]. 88% of the mITT patient population and 100% of the PP patient population were relapse free at 24 weeks, comparing favorably with previously reported pivotal data on the use of Rebif (75%) in comparison with Avonex (63%) as standalone first line therapies[4]; No patients in the CEASE-MS study relapsed after week 8 of treatment. With only a single active T1 post gadolinium lesion noted among all patients followed, combined unique active lesions (CUAs) – the primary outcome measure in the study – were almost entirely MRI T2 lesions; Although not powered for efficacy, a reduction in total MRI T2 lesion volume was observed at 24 weeks as compared to baseline, suggesting a decreased burden of disease and comparing favorably with previously reported Avonex[5] and Rebif[6] data.
On April 11, 2016, RedHill announced that it had initiated a randomized, double-blind, placebo-controlled, 2-arm parallel group Phase II clinical study in the U.S. evaluating the safety and efficacy of BEKINDA 12 mg in patients with diarrhea-predominant irritable bowel syndrome (IBS-D). The study is expected to be conducted in 12 clinical sites in the U.S. and to enroll 120 patients who will be randomized 60:40 to receive either BEKINDA 12 mg or a placebo, once daily, for a period of eight weeks. The primary endpoint for the study is the proportion of patients in each treatment group with response in stool consistency as compared to baseline, per FDA guidance definition. Secondary endpoints include the proportion of patients in each treatment group who are pain responders and the proportion of patients in each treatment group who are responders to the combined endpoints of stool consistency and pain, per FDA guidance definition.
On April 18, 2016, RedHill announced that it had concluded a positive Type B Meeting with the U.S. Food and Drug Administration (FDA) regarding the path to marketing approval of RHB-105 and the planned confirmatory Phase III study for the treatment of H. pylori infection. The FDA confirmed, subject to final minutes of the meeting, the planned two-arm, randomized, double-blind, active comparator design of the confirmatory Phase III study with RHB-105 for the treatment of H. pylori infection, expected to be initiated in the second half of 2016. Based on FDA feedback, and subject to successful completion, the planned confirmatory Phase III study, along with the successfully completed first Phase III study and data from a supportive PK program, are expected to support a U.S. New Drug Application (NDA) for RHB-105. The announcement followed the successful final results from the first Phase III clinical study with RHB-105 for the eradication of H. pylori (the ERADICATE Hp study) reported on March 8, 2016. The Phase III Clinical Study Report (CSR) confirmed the positive top-line results. The study successfully met its primary endpoint of superiority over historical standard-of-care (SoC) eradication rate levels of 70%, with high statistical significance (p < 0.001). The final results demonstrated 89.4% efficacy in eradicating H. pylori infection with RHB-105. RHB-105 has been granted Qualifying Infectious Disease Product (QIDP) designation by the FDA, providing a Fast-Track development pathway, as well as Priority Review status, potentially leading to a shorter review time by the FDA of a NDA, if filed. If approved, RHB-105 will also receive an additional five years of U.S. market exclusivity, in addition to the standard exclusivity period, for a total of 8 years of market exclusivity.