Phio Pharmaceuticals Reports Third Quarter 2021 Financial Results and Provides Business Update

On November 10, 2021 Phio Pharmaceuticals Corp. (Nasdaq: PHIO), a biotechnology company developing the next generation of immuno-oncology therapeutics based on its proprietary self-delivering RNAi (INTASYL) therapeutic platform, reported its financial results for the quarter ended September 30, 2021 and provided a business update (Press release, Phio Pharmaceuticals, NOV 10, 2021, View Source [SID1234595110]).

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"Our development programs continue to generate positive in vivo data showing how INTASYL technology can be utilized in various applications to treat cancer. These data have generated broad interest in our programs as we prepare to enter the clinic with the initiation of two trials expected in the next couple of quarters," said Dr. Gerrit Dispersyn, President and CEO of Phio. "We expect to initiate our first-in-human clinical study of our lead program, PH-762, in the first quarter of 2022, which will be followed by the first study with PH-762-empowered tumor infiltrating lymphocyte therapy to start in Q2. In addition, we’ve generated a lot of exciting in vivo data in support of the development of our PH-894 compound, showing it provides enhanced immunotherapeutic activity by reprograming T cells and other cells in the TME, and supporting our plans to file for a clinical trial application with the FDA in the second half of 2022."

Quarter in Review and Recent Corporate Updates

Presented positive data from several in vivo preclinical studies demonstrating the flexibility and application of INTASYL in the field of immuno-oncology at leading scientific conferences held during the third quarter of 2021:
Announced new data showing that local treatment in vivo with INTASYL has the potential to cure locally treated and distal untreated tumors and generate systemic tumor immunity that is both durable and tumor specific, further highlighting the technology’s potential in direct therapeutic applications. Data from this study, presented at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2021, showed a complete response in up to 83% of the animals treated with a low dose formulation of dual-targeting INTASYL PH-3861 (targeting PD-1 and BRD4).
Introduced new in vitro and in vivo data that showed silencing BRD4 with INTASYL compound PH-894 had a significant impact on T cell function and phenotype promoting T cell activation and immunosuppression in the tumor microenvironment as presented at the AACR (Free AACR Whitepaper)-NCI-EORTC AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper). These new data build upon a growing body of evidence that BRD4 plays a role in tumor cells and can also regulate T cell function, and that PH-894 can reprogram T cells to provide enhanced immunotherapeutic activity.
Completed additional in vivo and in vitro preclinical studies with PH-894, an INTASYL product candidate for direct drug therapy, which showed the potential of INTASYL compounds to modulate the expression of intracellular and/or commonly considered "undruggable" targets, such as epigenetic targets. These data will support our regulatory filings and the Company expects to file a clinical trial application for PH-894 in the second half of 2022.
Upcoming Pipeline Milestones

Expect to initiate a first-in-human clinical study on the direct therapeutic use of PH-762 in patients with advanced melanoma in the first quarter of 2022.
Expect to initiate a first-in-human clinical study on the use of PH-762 and tumor infiltrating lymphocytes (TILs) in adoptive cell therapy (ACT) in patients with advanced melanoma in the second quarter of 2022.
Expect to file a clinical trial application for PH-894 in the second half of 2022.
Additional data publications on the Company’s pipeline programs.
Financial Results

Cash Position

At September 30, 2021, the Company had cash of $26.5 million as compared with $14.2 million at December 31, 2020. The Company expects its current cash will be sufficient to fund currently planned operations to the second quarter of 2023.

Research and Development Expenses

Research and development expenses were approximately $2.8 million for the quarter ended September 30, 2021, compared to approximately $1.3 million for the quarter ended September 30, 2020. The increase in research and development expenses was primarily due to manufacturing costs for the Company’s PH-762 and PH-894 INTASYL compounds and fees for the required preclinical studies in support of the Company’s clinical trials for PH-762 as compared to the same period in the prior year.

General and Administrative Expenses

General and administrative expenses were approximately $0.9 million for the quarter ended September 30, 2021, compared to approximately $1.1 million for the quarter ended September 30, 2020. The decrease is primarily due to a decrease in legal fees partially offset by increased stock-based compensation expense as the Company did not grant equity awards in the same period in the prior year.

Net Loss

Net loss was $3.7 million, or $0.28 per share, for the quarter ended September 30, 2021, compared with $2.3 million, or $0.40 per share, for the quarter ended September 30, 2020. The increase in net loss was primarily attributable to the increase in research and development expenses related to the Company’s preclinical activities in preparation for the start of its clinical trials with PH-762, as described above. The change in net loss per share was primarily due to an increase in the number of shares outstanding as a result of the Company’s capital raise activities as compared to the prior year period.

Everest Medicines and Gilead Sciences Jointly Announce Phase 2b Study of Sacituzumab Govitecan Conducted in China of Patients With Metastatic Triple-Negative Breast Cancer Meets Primary Overall Response Rate Endpoint

On November 10, 2021 Gilead Sciences, Inc. (Nasdaq: GILD) reported that the Everest Medicines (HKEX 1952.HK) sponsored Phase 2b EVER-132-001 study of sacituzumab govitecan (marketed as Trodelvy in the United States) met its primary endpoint of overall response rate (ORR) in metastatic triple-negative breast cancer (TNBC) (Press release, Everest Medicines, NOV 10, 2021, View Source [SID1234595143]).

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EVER-132-001 is a single-arm, multi-center Phase 2b registrational study evaluating sacituzumab govitecan in 80 patients enrolled in China for the treatment of adults with unresectable locally advanced or metastatic TNBC who have received two or more prior systemic therapies, at least one for metastatic disease. The results demonstrated an ORR of 38.8% (CI: 95%) as evaluated by an Independent Review Committee. The safety profile of sacituzumab govitecan was similar to that reported in prior studies, and no new safety signals were identified.

The primary endpoint measured ORR according to RECIST v1.1 by an Independent Review Committee. The results were consistent with results demonstrated in the global Phase 3 ASCENT study. Gilead and Everest Medicines are engaged in a joint partnership for the development and commercialization of sacituzumab govitecan in Asia.

In May 2020, the Center for Drug Evaluation (CDE) of the China National Medical Products Administration (NMPA) granted priority review to the Biologics License Application (BLA) for sacituzumab govitecan for adult patients with unresectable locally advanced or metastatic TNBC who have received two or more prior systemic therapies, at least one of them for metastatic disease.

"These topline results confirm that sacituzumab govitecan has the potential to help change the treatment outlook for people in China living with mTNBC," said Yang Shi, Chief Medical Officer for Oncology at Everest Medicines. "These data, along with the benefit seen in the global ASCENT study, support its potential as a novel treatment for patients who currently have extremely limited options."

Kerry Blanchard, MD, PhD, CEO of Everest Medicines added, "With the goal of delivering treatment to as many patients as quickly as possible, we are building the commercialization team for Trodelvy in preparation for product launch in China."

"These data from the clinical trial of sacituzumab govitecan in China are extremely encouraging," said Bill Grossman, MD, PhD, Senior Vice President, Oncology Clinical Research, Gilead Sciences. "We are confident in the potential of Trodelvy to help more women around the world."

The Trodelvy U.S. Prescribing Information has a BOXED WARNING for severe or life-threatening neutropenia and severe diarrhea; see below for Important Safety Information.

About Triple-Negative Breast Cancer (TNBC)

TNBC is the most aggressive type of breast cancer and accounts for approximately 15% of all breast cancers. TNBC is diagnosed more frequently in younger and premenopausal women and is more prevalent in Black and Hispanic women. TNBC cells do not have estrogen and progesterone receptors and have limited human epidermal growth factor receptor 2 (HER2). Due to the nature of TNBC, effective treatment options are extremely limited compared with other breast cancer types. TNBC has a higher chance of recurrence and metastases than other breast cancer types. The average time to metastatic recurrence for TNBC is approximately 2.6 years compared with 5 years for other breast cancers, and the relative five-year survival rate is much lower. Among women with metastatic TNBC, the five-year survival rate is 12%, compared with 28% for those with other types of metastatic breast cancer.

About Sacituzumab Govitecan

Sacituzumab govitecan (Trodelvy) is a first-in-class antibody and topoisomerase inhibitor conjugate directed to the Trop-2 receptor, a protein overexpressed in multiple types of epithelial tumors, including metastatic TNBC and metastatic urothelial cancer (UC), where high expression is associated with poor survival and relapse. Trodelvy is approved in second-line metastatic TNBC in multiple countries worldwide, including Australia, Canada, Great Britain, Switzerland and the United States based on data submitted from the Phase 3 ASCENT study. Review is also underway in the European Union and Singapore and China through our partner Everest Medicines. Trodelvy is also approved for use in metastatic UC in the United States and continues to be developed for potential use in other TNBC and metastatic UC populations. It is also being developed as an investigational treatment for hormone receptor-positive/human epidermal growth factor receptor 2-negative (HR+/HER2-) metastatic breast cancer and metastatic non-small cell lung cancer. Additional evaluation across multiple solid tumors is also underway.

Under a licensing agreement with Gilead Sciences, Inc., Everest Medicines has exclusive rights to develop, register, and commercialize sacituzumab govitecan for all cancer indications in Greater China, South Korea, and certain Southeast Asian countries. In October 2020, sacituzumab govitecan was included in the updated 2020 China Guidelines for the Standardized Diagnosis and Treatment of Advanced Breast Cancer, compiled by the Breast Cancer Expert Committee of the National Cancer Control Center, the Breast Cancer Professional Committee of the Chinese Anti-Cancer Association, and the Cancer Drug Clinical Research Professional Committee of the Chinese Anti-Cancer Association.

The Ministry of Food and Drug Safety (MFDS) in South Korea has granted Fast Track Designation and Orphan Drug Designation (ODD) to SG for the treatment of metastatic TNBC. In addition, Everest announced in January 2021 that it submitted a New Drug Application (NDA) to the Health Sciences Authority (HSA) of Singapore for SG for the treatment of patients with metastatic TNBC who have received two prior therapies, at least one for metastatic disease. That application is currently under review.

In the United States, Trodelvy is indicated for the treatment of:

Adult patients with unresectable locally advanced or metastatic TNBC who have received two or more prior systemic therapies, at least one of them for metastatic disease.
Adult patients with locally advanced or metastatic UC who have previously received a platinum-containing chemotherapy and either programmed death receptor-1 (PD-1) or programmed death-ligand 1 (PD-L1) inhibitor.
U.S. Important Safety Information for Trodelvy

BOXED WARNING: NEUTROPENIA AND DIARRHEA

Severe or life-threatening neutropenia may occur. Withhold Trodelvy for absolute neutrophil count below 1500/mm3 or neutropenic fever. Monitor blood cell counts periodically during treatment. Consider G-CSF for secondary prophylaxis. Initiate anti-infective treatment in patients with febrile neutropenia without delay.
Severe diarrhea may occur. Monitor patients with diarrhea and give fluid and electrolytes as needed. Administer atropine, if not contraindicated, for early diarrhea of any severity. At the onset of late diarrhea, evaluate for infectious causes and, if negative, promptly initiate loperamide. If severe diarrhea occurs, withhold Trodelvy until resolved to ≤Grade 1 and reduce subsequent doses.
CONTRAINDICATIONS

Severe hypersensitivity reaction to Trodelvy.
WARNINGS AND PRECAUTIONS

Neutropenia: Severe, life-threatening, or fatal neutropenia can occur and may require dose modification. Neutropenia occurred in 61% of patients treated with Trodelvy. Grade 3-4 neutropenia occurred in 47% of patients. Febrile neutropenia occurred in 7%. Withhold Trodelvy for absolute neutrophil count below 1500/mm3 on Day 1 of any cycle or neutrophil count below 1000/mm3 on Day 8 of any cycle. Withhold Trodelvy for neutropenic fever.

Diarrhea: Diarrhea occurred in 65% of all patients treated with Trodelvy. Grade 3-4 diarrhea occurred in 12% of patients. One patient had intestinal perforation following diarrhea. Neutropenic colitis occurred in 0.5% of patients. Withhold Trodelvy for Grade 3-4 diarrhea and resume when resolved to ≤Grade 1. At onset, evaluate for infectious causes and if negative, promptly initiate loperamide, 4 mg initially followed by 2 mg with every episode of diarrhea for a maximum of 16 mg daily. Discontinue loperamide 12 hours after diarrhea resolves. Additional supportive measures (e.g., fluid and electrolyte substitution) may also be employed as clinically indicated. Patients who exhibit an excessive cholinergic response to treatment can receive appropriate premedication (e.g., atropine) for subsequent treatments.

Hypersensitivity and Infusion-Related Reactions: Serious hypersensitivity reactions including life-threatening anaphylactic reactions have occurred with Trodelvy. Severe signs and symptoms included cardiac arrest, hypotension, wheezing, angioedema, swelling, pneumonitis, and skin reactions. Hypersensitivity reactions within 24 hours of dosing occurred in 37% of patients. Grade 3-4 hypersensitivity occurred in 2% of patients. The incidence of hypersensitivity reactions leading to permanent discontinuation of Trodelvy was 0.3%. The incidence of anaphylactic reactions was 0.3%. Pre-infusion medication is recommended. Observe patients closely for hypersensitivity and infusion-related reactions during each infusion and for at least 30 minutes after completion of each infusion. Medication to treat such reactions, as well as emergency equipment, should be available for immediate use. Permanently discontinue Trodelvy for Grade 4 infusion-related reactions.

Nausea and Vomiting: Nausea occurred in 66% of all patients treated with Trodelvy and Grade 3 nausea occurred in 4% of these patients. Vomiting occurred in 39% of patients and Grade 3-4 vomiting occurred in 3% of these patients. Premedicate with a two or three drug combination regimen (e.g., dexamethasone with either a 5-HT3 receptor antagonist or an NK1 receptor antagonist as well as other drugs as indicated) for prevention of chemotherapy-induced nausea and vomiting (CINV). Withhold Trodelvy doses for Grade 3 nausea or Grade 3-4 vomiting and resume with additional supportive measures when resolved to Grade ≤1. Additional antiemetics and other supportive measures may also be employed as clinically indicated. All patients should be given take-home medications with clear instructions for prevention and treatment of nausea and vomiting.

Increased Risk of Adverse Reactions in Patients with Reduced UGT1A1 Activity: Patients homozygous for the uridine diphosphate-glucuronosyl transferase 1A1 (UGT1A1)*28 allele are at increased risk for neutropenia, febrile neutropenia, and anemia and may be at increased risk for other adverse reactions with Trodelvy. The incidence of Grade 3-4 neutropenia was 67% in patients homozygous for the UGT1A1*28, 46% in patients heterozygous for the UGT1A1*28 allele and 46% in patients homozygous for the wild-type allele. The incidence of Grade 3-4 anemia was 25% in patients homozygous for the UGT1A1*28 allele, 10% in patients heterozygous for the UGT1A1*28 allele, and 11% in patients homozygous for the wild-type allele. Closely monitor patients with known reduced UGT1A1 activity for adverse reactions. Withhold or permanently discontinue Trodelvy based on clinical assessment of the onset, duration and severity of the observed adverse reactions in patients with evidence of acute early-onset or unusually severe adverse reactions, which may indicate reduced UGT1A1 function.

Embryo-Fetal Toxicity: Based on its mechanism of action, Trodelvy can cause teratogenicity and/or embryo-fetal lethality when administered to a pregnant woman. Trodelvy contains a genotoxic component, SN-38, and targets rapidly dividing cells. Advise pregnant women and females of reproductive potential of the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment with Trodelvy and for 6 months after the last dose. Advise male patients with female partners of reproductive potential to use effective contraception during treatment with Trodelvy and for 3 months after the last dose.

ADVERSE REACTIONS

In the ASCENT study (IMMU-132-05), the most common adverse reactions (incidence ≥25%) were fatigue, neutropenia, diarrhea, nausea, alopecia, anemia, constipation, vomiting, abdominal pain, and decreased appetite. The most frequent serious adverse reactions (SAR) (>1%) were neutropenia (7%), diarrhea (4%), and pneumonia (3%). SAR were reported in 27% of patients, and 5% discontinued therapy due to adverse reactions. The most common Grade 3-4 lab abnormalities (incidence ≥25%) in the ASCENT study were reduced neutrophils, leukocytes, and lymphocytes.

In the TROPHY study (IMMU-132-06), the most common adverse reactions (incidence ≥25%) were diarrhea, fatigue, neutropenia, nausea, any infection, alopecia, anemia, decreased appetite, constipation, vomiting, abdominal pain, and rash. The most frequent serious adverse reactions (SAR) (≥5%) were infection (18%), neutropenia (12%, including febrile neutropenia in 10%), acute kidney injury (6%), urinary tract infection (6%), and sepsis or bacteremia (5%). SAR were reported in 44% of patients, and 10% discontinued due to adverse reactions. The most common Grade 3-4 lab abnormalities (incidence ≥25%) in the TROPHY study were reduced neutrophils, leukocytes, and lymphocytes.

DRUG INTERACTIONS

UGT1A1 Inhibitors: Concomitant administration of Trodelvy with inhibitors of UGT1A1 may increase the incidence of adverse reactions due to potential increase in systemic exposure to SN-38. Avoid administering UGT1A1 inhibitors with Trodelvy.

UGT1A1 Inducers: Exposure to SN-38 may be substantially reduced in patients concomitantly receiving UGT1A1 enzyme inducers. Avoid administering UGT1A1 inducers with Trodelvy.

G1 Therapeutics to Participate in Two Upcoming Conferences

On November 10, 2021 G1 Therapeutics, Inc. (Nasdaq: GTHX), a commercial-stage oncology company, reported that the Company will participate in two upcoming virtual investor conferences (Press release, G1 Therapeutics, NOV 10, 2021, View Source [SID1234595184]).

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On November 17, 2021 at 8:00 AM EST, G1’s Chief Executive Officer Jack Bailey will present at the Stifel 2021 Virtual Healthcare Conference.

On December 1, 2021 at 12:35 PM EST, Mr. Bailey will participate in a fireside chat at the 4th Annual Evercore ISI HealthCONx Conference.
The webcast of both events will be accessible on the Events & Presentations page of View Source

Business Results for the Third Quarter of the Fiscal Year Ending December 31, 2021 (Unaudited)

On November 10, 2021 Kuraray reported that (Press release, Kuraray, NOV 10, 2021, https://pdf.irpocket.com/C3405/l3Fa/TF2c/T3bA.pdf [SID1234595213])

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1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2021 (January 1, 2020 to September 30, 2021)
(1) Consolidated Operating Results (Percentage changes displayed for net sales, operating income, ordinary income and net income attributable to owners of the parent are comparisons with the corresponding period of the previous fiscal year.)
(2) Consolidated Financial Position

2. Dividends
3. Forecasts of Consolidated Financial Results for the Fiscal Year Ending December 31, 2021 (January 1, 2021 to December 31, 2021) (Percentage changes displayed for net sales, operating income, ordinary income and net income attributable to owners of the parent are comparisons with the corresponding period of the previous fiscal year.)

1. Qualitative Information regarding Business Results
(1) Overview of Consolidated Business Results In the third quarter of fiscal 2021 (January 1, 2021–September 30, 2021), the world economy recovered overall as COVID-19 vaccinations rates continued to rise and economic activities have been invigorated, particularly in advanced countries and China. However, the outlook is currently growing more unclear due mainly to a continued rise in raw material and fuel prices in addition to shortages of semiconductors and other components, prolonged logistics disruptions, and concerns about an economic slowdown in China. Consequently, consolidated operating results for the third quarter of fiscal 2021 are as follows: net sales rose ¥65,380 million, or 16.6%, compared with the previous fiscal year to ¥459,159 million; operating income increased ¥21,790 million, or 67.0%, to ¥54,318 million; ordinary income increased ¥21,178 million, or 71.0%, to ¥51,001 million; and net income attributable to owners of the parent increased ¥13,455 million, or 88.8%, to ¥28,602 million.

The Group’s long-term vision for its 100th anniversary coming up in 2026, "Kuraray Vision 2026", is to become a "Specialty Chemical Company, growing sustainably by incorporating new foundational platforms into its own technologies." We will continue striving to optimize our business portfolio by steadily taking specific measures based on the three basic policies of "Kuraray Vision 2026": pursuing competitive superiority, expanding new business fields and enhancing the comprehensive strengths of the Kuraray Group. In fiscal 2021, we will focus on safe and stable operations amid the pandemic and thoroughly implement various measures decided on during the period of the previous medium-term management plan "PROUD 2020." At the same time, we will move ahead with formulating the next medium-term management plan, which is set to start in fiscal 2022.Results by Business Segment Vinyl Acetate Sales in this segment increased 20.4% year on year to ¥224,861 million, and segment income rose 53.3% year on year to ¥42,926 million.

(1) Sales of PVA resin increased for a wide range of applications as global demand has been recovering, but performance was impacted by high raw material and fuel prices. Sales of optical-use poval film were brisk against a backdrop of robust demand for LCD panels continuing from the second half of the previous fiscal year. The sales volume of PVB film rose year on year but were affected by a decrease in the production of automobiles caused by a shortage of semiconductors in the third quarter. Sales of water-soluble PVA film steadily expanded for use in unit dose detergent packets, including for laundry and dish detergents.
(2) The sales volume of EVAL ethylene vinyl alcohol copolymer (EVOH resin) increased due to a recovery in demand for gas tank applications and solid demand for food packaging applications but were affected by a decrease in the production of automobiles and high raw material and fuel prices in the third quarter.

MorphoSys AG Reports First Nine Months and Third Quarter 2021 Results

On November 10, 2021 MorphoSys AG (FSE: MOR; NASDAQ: MOR) reported its financial results for the third quarter and the first nine months of 2021 (Press release, MorphoSys, NOV 10, 2021, View Source [SID1234595230]).

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"Monjuvi sales continued to build momentum in the third quarter where we saw a broadening of the prescriber base and increased utilization in second-line patients," said Jean-Paul Kress, M.D., Chief Executive Officer of MorphoSys. "We are excited to share new data for Monjuvi and pelabresib at the upcoming ASH (Free ASH Whitepaper) conference. For pelabresib, we will share the latest data from our MANIFEST trial, including important data from the third combination arm that confirm previous results. This further underpins our confidence in the ongoing phase 3 MANIFEST-2 study."

Tafasitamab Highlights

– Monjuvi(R) (tafasitamab-cxix) U.S. net product sales of € 18.6 million (US$ 22.0 million) for the third quarter of 2021 and € 46.4 million (US$ 55.5 million) for the first nine months of 2021.

– On August 24, 2021, Health Canada granted conditional marketing authorization for Minjuvi(R) (tafasitamab) in combination with lenalidomide for the treatment of adults with relapsed or refractory diffuse large B-cell lymphoma

– On August 26, 2021, MorphoSys and Incyte announced that the European Commission granted conditional marketing authorization for Minjuvi(R) (tafasitamab) in combination with lenalidomide, followed by Minjuvi monotherapy, for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplant (ASCT).

– In the third quarter 2021, MorphoSys received, for the first time, royalty revenue of € 82 thousand for Minjuvi sales outside of the U.S. pursuant to the agreement with Incyte.

Other Highlights after the end of the third quarter of 2021

– On October 20, 2021, MorphoSys announced that the first patient has been dosed in the Phase 2 IGNAZ clinical trial evaluating felzartamab for patients with Immunoglobulin A Nephropathy (IgAN). IgAN, also known as Berger’s disease, is a chronic and debilitating autoimmune disease affecting the kidneys and the most common glomerular disease worldwide.

– On November 4, 2021, MorphoSys announced the presentation of interim results from
M-PLACE, the ongoing Phase 1b/2a, proof of concept study with felzartamab at the 2021 Annual Meeting of the American Society of Nephrology (ASN).

– On November 4, 2021, MorphoSys announced that new data on tafasitamab and pelabresib will be presented during the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting from December 11-14, 2021. Ten abstracts were accepted, including two oral presentations on the MANIFEST and RE-MIND2 clinical studies.

Financial Results for the Third Quarter of 2021 (IFRS)
Total revenues for the third quarter of 2021 amounted to € 41.2 million (Q3 2020: € 22.0 million). The Group revenues include revenues of € 18.6 million from the recognition of Monjuvi(R) product sales in the US.

Cost of Sales: In the third quarter of 2021, cost of sales increased to € 7.5 million (Q3 2020: € 3.7 million).

Research and Development (R&D) Expenses: In the third quarter of 2021, R&D expenses were € 64.4 million (Q3 2020: € 34.2 million). The increase in R&D expenses is primarily due to the inclusion of R&D expenses from Constellation and higher investment to support the advancement of clinical programs.

Selling, General and Administrative (SG&A) Expenses: Selling expenses decreased in the third quarter of 2021 to € 32.4 million (Q3 2020: € 32.9 million) and general and administrative (G&A) expenses amounted to € 19.4 million (Q3 2020: € 13.3 million). The increase of G&A expense in the third quarter was driven by transaction costs for the acquisition of Constellation and the inclusion of Constellation’s G&A expenses.

Operating Loss: Operating loss amounted to € 82.4 million in the third quarter of 2021 (Q3 2020: operating loss of € 62.0 million).

Consolidated Net Profit / Loss: For the third quarter of 2021, consolidated net loss was € 112.8 million (Q3 2020: consolidated net loss of € 65.3 million).

Financial Results for First Nine Months of 2021 (IFRS)

Total revenues for the first nine months of 2021 amounted to € 126.7 million (9M 2020: € 291.7 million). The Group revenues include revenues of € 46.4 million from the recognition of Monjuvi(R) product sales in the US. The year-over-year decline was driven by the upfront payment of the collaboration and license agreement with Incyte in the first quarter 2020 for the out-licensing of tafasitamab outside the U.S.

Cost of Sales: In the first nine months of 2021, cost of sales increased to € 22.7 million (9M 2020: income of € 0.2 million).

Research and Development (R&D) Expenses: In the first nine months of 2021, R&D expenses were € 138.2 million (9M 2020: € 86.6 million). The R&D expenses increased due to higher development activity and the inclusion of expenses from the Constellation acquisition since July 15, 2021.

Selling, General and Administrative (SG&A) Expenses: Selling expenses increased in the first nine months of 2021 to € 89.0 million (9M 2020: € 75.0 million) and general and administrative (G&A) expenses amounted to € 60.1 million (9M 2020: € 37.2 million). The year-over-year increase in selling expenses was primarily driven by the commercialization activities for Monjuvi(R) in 2021 that were higher than during the ramp up of activities in 2020. The year-over-year increase in G&A expenses was driven primarily by the transaction costs related to the Constellation and Royalty Pharma agreements and the inclusion of Constellation’s G&A expenses.

Operating Loss: Operating loss amounted to € 183.3 million in the first nine months of 2021 (9M 2020: operating profit of € 93.1 million).

Consolidated Net Profit / Loss: For the first nine months of 2021, consolidated net loss was € 133.5 million (9M 2020: consolidated net profit of € 114.4 million).

Cash and Investments: As of September 30, 2021, the Company had cash and investments of € 1,130.9 million compared to € 1,244.0 million on December 31, 2020.

Number of shares: The number of shares issued totaled 34,231,943 at the end of Q3 2021 (year-end 2020: 32,890,046).

*Group revenues include full year Tremfya royalties and exclude any royalties from potential tafasitamab sales outside of the U.S. as well as any significant milestones from development partners and/or licensing partnerships other than those that were already recorded in the first 9-month period. This revenue guidance is subject to a number of uncertainties including the potential for variability from the first full year of the Monjuvi product launch, the limited visibility that MorphoSys has on the Tremfya royalty stream as well as the ongoing COVID-19 pandemic and the impact on our as well as our partner’s business operations.

**Operating expenses is comprised of R&D and SG&A, inclusive of Incyte’s share of Monjuvi selling costs in the U.S.

MorphoSys Group Key Figures (IFRS, September 30, 2021)

*Value as of December 31, 2020

MorphoSys will hold its conference call and webcast tomorrow, November 11, 2021, to present the results for the third quarter and first nine months of 2021 and the further outlook for 2021.

A live webcast and slides will be made available at the Investors section under "Presentations and Conferences" on MorphoSys’ website at View Source and after the call, a slide-synchronized audio replay of the conference will be available at the same location.

The statement for the third quarter/first nine months of 2021 (IFRS) is available online:
View Source/Reports

About Monjuvi(R) (tafasitamab)
Tafasitamab is a humanized Fc-modified cytolytic CD19 targeting monoclonal antibody. In 2010, MorphoSys licensed exclusive worldwide rights to develop and commercialize tafasitamab from Xencor, Inc. Tafasitamab incorporates an XmAb(R) engineered Fc domain, which mediates B-cell lysis through apoptosis and immune effector mechanism including Antibody-Dependent Cell-Mediated Cytotoxicity (ADCC) and Antibody-Dependent Cellular Phagocytosis (ADCP).
In the United States, Monjuvi(R) (tafasitamab-cxix) is approved by the U.S. Food and Drug Administration in combination with lenalidomide for the treatment of adult patients with relapsed or refractory DLBCL not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant (ASCT). This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial(s).

In Europe, Minjuvi(R) (tafasitamab) received conditional approval, in combination with lenalidomide, followed by Minjuvi monotherapy, for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplant (ASCT).

Tafasitamab is being clinically investigated as a therapeutic option in B-cell malignancies in several ongoing combination trials.

Minjuvi(R) and Monjuvi(R) are registered trademarks of MorphoSys AG. Tafasitamab is co-marketed by Incyte and MorphoSys under the brand name Monjuvi(R) in the U.S., and marketed by Incyte under the brand name Minjuvi(R) in the EU.

XmAb(R) is a registered trademark of Xencor, Inc.