On August 03, 2016 Loxo Oncology, Inc. (Nasdaq:LOXO), a biopharmaceutical company innovating the development of highly selective medicines for patients with genetically defined cancers, reported financial results for the second quarter ended June 30, 2016 (Press release, Loxo Oncology, AUG 3, 2016, View Source [SID:1234514192]). Loxo Oncology will not be conducting a conference call in conjunction with this earnings release.

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"We had a productive second quarter," said Josh Bilenker, M.D., chief executive officer of Loxo Oncology. "In April, we provided an important durability update for our adult Phase 1 LOXO-101 trial at AACR (Free AACR Whitepaper), and published our first pediatric response to LOXO-101 in a peer-reviewed journal. In May, we added new investors with a follow-on financing. In June, we presented data on our pediatric formulation and development plans to an FDA advisory committee, in a public forum. And just after the close of the quarter, we secured Breakthrough Therapy Designation for LOXO-101 from the FDA."

Recent Highlights

LOXO-101 Received Breakthrough Therapy Designation: In July, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy Designation to LOXO-101 "for the treatment of unresectable or metastatic solid tumors with NTRK-fusion proteins in adult and pediatric patients who require systemic therapy and who have either progressed following prior treatment or who have no acceptable alternative treatments."
LOXO-101 Selected for FDA Pediatric Advisory Committee Meeting: In June, Loxo Oncology participated in a meeting of the FDA’s Pediatric Oncology Subcommittee of the Oncologic Drugs Advisory Committee. The purpose of the meeting was to improve and encourage the development of oncology and hematology drugs for pediatric use. A replay of that presentation is available. Loxo Oncology also submitted a briefing package in advance of this meeting, which is publicly available.
Strengthened Balance Sheet: Loxo Oncology raised $41.4 million in gross proceeds in an equity financing in May 2016. Loxo Oncology’s cash, cash equivalents and investments are expected to be sufficient to fund operations into late 2018.
LOXO-101 Update at AACR (Free AACR Whitepaper) and Pediatric Case Report: In April, investigators provided an update of the Phase 1 adult trial of LOXO-101, highlighting patients with TRK fusion cancers. Of note from the presentation, all responding patients remained in response, all had shown evidence of tumor regression, and five of six patients had achieved a confirmed partial response (PR) by standard RECIST criteria. Importantly, five of these six patients were treated at or below the recommended Phase 2 dose. Separately, investigators also published a peer-reviewed case report of the first pediatric patient treated with a liquid formulation of LOXO-101 in the setting of infantile fibrosarcoma. The patient achieved a confirmed partial response and began again to achieve appropriate developmental milestones.
Upcoming Milestones

Loxo Oncology continues to make significant progress across its drug development pipeline. Upcoming milestones are expected to include:

Continued enrollment of the LOXO-101 NAVIGATE Phase 2 global, multi-center, single-arm, open-label basket trial in adult patients with solid tumors that harbor a TRK fusion. Loxo Oncology plans to provide an enrollment update in the second half of 2016.
Initiation of a Phase 1 study of a selective RET inhibitor in late 2016/ early 2017.
Initiation of a Phase 1 study of next-generation TRK inhibitor LOXO-195, addressing previously treated patients with acquired resistance, in 2017. Loxo Oncology may provide access to LOXO-195 for emergency investigational use prior to 2017 if medically necessary, requested by a treating clinician, and authorized by the appropriate regulatory authorities. LOXO-195 is designed to retain potency against a common resistance mutation that has been described in two separate patients who have progressed on a competitor’s TRK inhibitor.
Second Quarter 2016 Financial Results

As of June 30, 2016, Loxo Oncology had aggregate cash, cash equivalents and investments of $171.7 million, compared to $153.9 million as of December 31, 2015.

Loxo Oncology continues to expect cash burn of $48 to $52 million in 2016. Based on the current operating plan, the company believes existing capital resources will be sufficient to fund anticipated operations into late 2018.

Research and development expenses were $12.3 million for the second quarter of 2016 compared to $5.7 million for the second quarter of 2015. This increase was primarily due to expanded clinical development activities for LOXO-101, as well as additional expenses related to the preclinical pipeline. Loxo Oncology also recognized research and development-related stock-based compensation expense of $0.2 million during the second quarter of 2016, compared to $0.9 million for the second quarter of 2015.

Research and development expenses were $20.7 million for the six months ended June 30, 2016, compared to $9.5 million for the six months ended June 30, 2015. This increase was primarily due to expanded clinical development activities for LOXO-101, as well as additional expenses related to the preclinical pipeline. Loxo Oncology also recognized research and development-related stock-based compensation expense of $0.5 million during the six months ended June 30, 2016, compared to $1.3 million for the six months ended June 30, 2015.

General and administrative expenses were $3.8 million for the second quarter of 2016 compared to $2.4 million for the second quarter of 2015. This increase was primarily attributable to employment costs and professional fees. Loxo Oncology also recognized general and administrative-related stock-based compensation expense of $1.1 million during the second quarter 2016, compared to $0.8 million for the second quarter 2015.

General and administrative expenses were $7.2 million for the six months ended June 30, 2016, compared to $4.8 million for the six months ended June 30, 2015. This increase was primarily attributable to employment costs and professional fees. Loxo Oncology also recognized general and administrative-related stock-based compensation expense of $2.1 million during the six months ended June 30, 2016, compared to $1.3 million for the six months ended June 30, 2015.

Net loss was $15.9 million and $27.5 million for the three and six months ended June 30, 2016, respectively, compared to $8.1 million and $14.2 million for the three and six months ended June 30, 2015, respectively.

About LOXO-101
LOXO-101 is a potent, oral and selective investigational new drug in clinical development for the treatment of patients with cancers that harbor abnormalities involving the tropomyosin receptor kinases (TRKs). Growing research suggests that the NTRK genes, which encode for TRKs, can become abnormally fused to other genes, resulting in growth signals that can lead to cancer in many sites of the body. In an ongoing Phase 1 clinical trial, LOXO-101 has demonstrated encouraging preliminary efficacy. LOXO-101 is also being evaluated in the NAVIGATE global Phase 2 multi-center basket trial in patients with solid tumors that harbor TRK gene fusions and the SCOUT Phase 1 trial in pediatric patients including infantile fibrosarcoma. LOXO-101 has been granted Breakthrough Therapy Designation by the U.S. FDA. For additional information about the LOXO-101 clinical trials, please refer to www.clinicaltrials.gov. Interested patients and physicians can contact the Loxo Oncology Physician and Patient Clinical Trial Hotline at 1-855-NTRK-123 or visit www.loxooncologytrials.com.