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Investor Presentation

On February 5, 2020 Genprex, Inc Presented the corporate Presentation (Presentation, Genprex, FEB 5, 2020, View Source [SID1234553889]).

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Genprex to Focus Its Clinical Efforts on Oncoprex™ in Combination Therapy with Osimertinib for Non-Small Cell Lung Cancer (NSCLC)

On February 5, 2020 Genprex, Inc. ("Genprex" or the "Company") (Nasdaq: GNPX), a clinical-stage gene therapy company utilizing a unique, non-viral proprietary platform designed to deliver tumor suppressor genes to cancer cells, reported a clinical update and focus for its Oncoprex immunogene therapy program for 2020, prioritizing the development of Oncoprex in combination with osimertinib for the treatment of non-small cell lung cancer (NSCLC) (Press release, Genprex, FEB 5, 2020, View Source [SID1234553888]).

On January 14, 2020, the Company received U.S Food and Drug Administration (FDA) Fast Track Designation for its Oncoprex immunogene therapy in combination with the EGFR tyrosine kinase inhibitor (TKI) osimertinib (AstraZeneca’s Tagrisso, which had worldwide sales in 2018 of $1.86 billion and $2.31 billion in the first nine months of 2019, and it is currently AstraZeneca’s highest grossing product) for the treatment of NSCLC patients with EFGR mutations that progressed after treatment with osimertinib alone. Oncoprex consists of the TUSC2 (Tumor Suppressor Candidate 2) gene, the active agent in Oncoprex, complexed with a lipid nanovesicle.

The Company’s current Phase I/II clinical trial utilizes the combination of the EGFR inhibitor erlotinib (marketed by Genentech in the U.S. and elsewhere by Roche as Tarceva) and Oncoprex against NSCLC. The current Phase I/II trial is active but is not currently enrolling patients, though the Company had planned to resume enrollment in mid-2020. Tumor shrinkage in patients resistant to erlotinib enrolled in this trial showed that Oncoprex can overcome resistance to TKIs and provided support for the Fast Track Designation.

Osimertinib is now considered a new standard of care for NSCLC patients with an EGFR mutation. Given this and receipt of FDA’s Fast Track Designation for use of Oncoprex combined with osimertinib in patients whose tumors progress on osimertinib, the Company has decided to prioritize this drug combination and patient population. Therefore, the Company plans to initiate a Phase I/II clinical trial of Oncoprex combined with osimertinib in mid-2020 at multiple cancer centers across the United States, and it does not intend to reopen enrollment in the current Phase I/II trial using the combination of Oncoprex and erlotinib at this time.

Genprex plans to file an amendment to its Investigational New Drug (IND) application with the FDA for the Oncoprex and osimertinib combination therapy trial within the first quarter of 2020. Upon FDA acceptance of the amendment, the Company expects to be in a position to enroll patients shortly thereafter. The Company believes that enrollment in the new clinical trial may be rapid, as the tumors of almost all patients who are treated with osimertinib progress after treatment, and these patients may be candidates for its clinical trial combining Oncoprex with osimertinib, for which the Company received Fast Track Designation.

Thus, given the changing landscape in NSCLC and the recent Fast Track Designation, the Company believes prioritizing the combination therapy of Oncoprex with osimertinib represents the most efficient way to advance its lead drug candidate through the clinical process for FDA approval, to have the best commercial success in the $17.9 billion global lung cancer market and to make its treatment available to patients as soon as possible.While prioritizing the combination therapy of Oncoprex with osimertinib, the Company will also proceed with its plan to file an IND for the additional combination therapy of Oncoprex combined with the immunotherapy drug pembrolizumab (marketed as Keytruda by Merck in the U.S.) for NSCLC.

MaaT Pharma Announces €18 Million Series B Financing Round to Support Further Clinical Development of Microbiome Biotherapeutics

On February 5, 2020 MaaT Pharma announced today an €18 million Series B financing round including a microbiome-focused US investor, SymBiosis, LLC, and support from its existing investors Seventure Partners, Crédit Mutuel Innovation, and Biocodex (Press release, MaaT Pharma, FEB 5, 2020, View Source [SID1234553886]). The funding will enable the continued clinical development of the company’s current pipeline, as well as the expansion into additional oncological indications where restoring a functional microbiome could provide significant therapeutic benefit when combined with other cancer treatments such as immune checkpoint inhibitors.

"We are excited to have added a US-based investor to our syndicate based on the strategic importance of the US market for our future development. I would like to thank our existing investors and our network of scientific advisors for their continued support as we enter into this next development phase for the company," said Hervé Affagard, co-founder and CEO of MaaT Pharma. "A growing body of evidence suggests that a functional microbiome can improve cancer outcomes, and we look forward to continue building on our initial proof of concept by going beyond hematological malignancies into solid tumors."

The proceeds will be used to complete the ongoing HERACLES Phase II clinical trial (NCT03359980) of MaaT’s lead compound, MaaT013, in patients that developed steroid-refractory, gastrointestinal-predominant, acute Graft-versus-Host-Disease (SR aGvHD) following allogeneic Hematopoietic Stem Cell Transplantation (allo-HSCT). In addition, the company will accelerate the development of a capsule formulation of MaaT013, MaaT033, which will ease administration and facilitate the expansion of the company’s pipeline into new oncological indications, including the initiation of a Phase 1b clinical trial with MaaT033. Recent studies demonstrated that restoring a balanced microbiome can significantly improve the clinical outcomes of checkpoint inhibitors, and MaaT Pharma will investigate this potential in a combination trial in solid tumors. Preliminary data from the safety and dose-finding Phase 1b trial of MaaT033 is expected in H2 2020.

MaaT Pharma’s product candidates are based on the company’s proprietary MaaT Microbiome Restoration Biotherapeutics (MMRB) platform. MaaT Pharma’s lead product candidate, MaaT013, is an enema formulation characterized by a high consistent richness of microbial species, whose specific bacteria are protected thanks to a proprietary formulation, derived from pooling the full intestinal ecosystems of stringently vetted, healthy donors. The product is manufactured at MaaT’s centralized European cGMP production facility. Apart from the ongoing HERACLES Phase II trial, from which results are expected in 2020, MaaT has provided MaaT013 to a compassionate use program for patients who had failed to respond to previous treatments for SR aGvHD. In total, over 50 patients with severe hematological malignancies have been treated with the company’s product candidate. The data collected up to date demonstrate that reintroduction of a full-ecosystem microbiota is well tolerated in these patients and provides initial signs of therapeutic benefit. Initial results from the company’s compassionate use program were presented at the 2019 ASH (Free ASH Whitepaper) conference in Orlando, Florida.

CD19 CAR NK-cell therapy achieves 73% response rate in patients with leukemia and lymphoma

On February 5, 2020 The University of Texas MD Anderson Cancer Center reported that results from a Phase I/IIa trial treatment with cord blood-derived chimeric antigen receptor (CAR) natural killer (NK)-cell therapy targeting CD19 resulted in clinical responses in a majority of patients with relapsed or refractory non-Hodgkin’s lymphoma (NHL) and chronic lymphocytic leukemia (CLL), with no major toxicities observed (Press release, MD Anderson, FEB 5, 2020, View Source [SID1234553885]).

The trial results were published today in the New England Journal of Medicine. Of the 11 patients participating in the study, eight (73%) responded to therapy and seven of those achieved a complete response, meaning they no longer showed evidence of disease at a median follow-up of 13.8 months. Post-remission therapy was administered to five of the responding patients. No patients experienced cytokine release syndrome or neurotoxicity.

Responses to the CD19 CAR NK cell therapy were evident within one month following infusion, and persistence of these cells was confirmed out to one year post-infusion.

"We are encouraged by the results of the clinical trial, which will launch further clinical studies to investigate allogeneic cord blood-derived CAR NK cells as a potential treatment option for patients in need," said corresponding author Katy Rezvani, M.D., Ph.D., professor of Stem Cell Transplantation & Cellular Therapy.

Rezvani led the development of MD Anderson’s CAR NK platform with the support of the adoptive cell therapy (ACT) platform, Chronic Lymphocytic Leukemia Moon Shot and B-Cell Lymphoma Moon Shot, all part of the institution’s Moon Shots Program, a collaborative effort to rapidly develop scientific discoveries into meaningful clinical advances that save patients’ lives.

CAR NK cells are allogeneic, meaning the cells are taken from a non-related healthy donor rather than the patient themselves. Thus, CAR NK cells have the potential to be manufactured in advance and stored for off-the-shelf immediate use. In contrast, currently commercially available CAR T cells require the use of a patient’s own genetically modified T cells, created through a multi-week manufacturing process.

At MD Anderson, NK cells are isolated from donated umbilical cord blood and genetically engineered to express the desired CAR, which recognizes cancer-specific targets. The CAR NK cells also are ‘armored’ with IL-15, an immune signaling molecule that is designed to enhance proliferation and survival of the cells. The CD19 CAR NK cells used in this study were designed to target B-cell malignancies.

On the clinical trial, 11 patients received a single dose of cord blood-derived CD19 CAR NK cells, administered at one of three dose levels. Five patients had CLL and six had NHL. All patients were treated with a minimum of three and maximum of 11 lines of prior therapy. The first nine patients treated received CD19 CAR NK cells that were partially matched according to the individual’s human leukocyte antigen (HLA) type, but the protocol allowed the final two patients to be treated with no HLA matching.

Side effects experienced by participants were primarily related to the conditioning chemotherapy given before cell infusion and were resolved within one to two weeks, said Rezvani. No patient required admission to an intensive care unit for management of treatment side effects.

"Due to the nature of the therapy, we’ve actually been able to administer it in an outpatient setting," said Rezvani. "We look forward to building upon these results in larger multi-center trials as we work with Takeda to make this therapy available more broadly."

MD Anderson’s CAR NK cell therapy platform was licensed to Takeda Pharmaceutical Company Limited in 2019. As part of the license agreement and research agreement, Takeda has exclusive rights to develop and commercialize up to four CAR NK programs, including the CD19 CAR NK cell therapy (TAK-007) and B-cell maturation antigen (BCMA)-targeted CAR NK cells.

With continued support from the ACT platform, the Department of Lymphoma and Myeloma, and MD Anderson’s Therapeutics Discovery division, Takeda and MD Anderson are collaborating to initiate a pivotal clinical trial for the CD19 CAR NK-cell therapy TAK-007 in 2021. MD Anderson will implement an Institutional Conflict of Interest Management and Monitoring Plan for this research.

Merck to Focus on Key Growth Pillars Through Spinoff of Women’s Health, Trusted Legacy Brands and Biosimilars Products into New Company (“NewCo”)

On February 5, 2020 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported its intention to spin-off products from its Women’s Health, trusted Legacy Brands, and Biosimilars businesses into a new, yet-to-be-named, independent, publicly traded company (Press release, Merck & Co, FEB 5, 2020, View Source [SID1234553878]). The spinoff will allow both management teams to drive increased responsiveness to the particular needs of their patients and customers and achieve faster growth through focused and fit-for-purpose operating models.

Merck will continue to benefit from strong growth across its current key pillars of Oncology, Vaccines, Hospital and Animal Health, while remaining fully committed to investing in research and development in pursuit of breakthrough innovations across all areas of science and to driving value from its deep late-stage pipeline. As a premier research-intensive biopharmaceutical company, Merck will continue its pursuit to advance the prevention and treatment of diseases that threaten people and communities around the world.

"Over the past several years, we have purposefully shifted the focus of our efforts and resources to our best opportunities for growth," said Kenneth C. Frazier, chairman and chief executive officer, Merck. "This has led to the exceptional results we are reporting today. Given the opportunities now in front of us, we believe we can benefit from even greater focus. At the same time, we believe additional resources and focus will help ensure that our expansive portfolio, including many trusted and medically important products, reach their full potential. We have therefore made the decision to separate into two growth companies: Merck and NewCo. By optimizing our human health portfolio, Merck can move closer to its aspiration of being the premier research-intensive biopharmaceutical company, while also properly prioritizing a set of products at NewCo that are important to public health and the patients who rely on them, and which present real opportunities for growth."

SPINOFF CREATES TWO INDEPENDENT GROWTH COMPANIES

Compelling Strategic Rationale for Spinoff

Merck believes the spinoff will deliver significant benefits for both Merck and NewCo and create value for Merck shareholders. The transaction is expected to create two companies with:

Enhanced strategic and operational focus on key drivers to accelerate growth,
Improved agility to anticipate and respond to customer needs and rapidly evolving market dynamics,
Simplified operating models with reduced complexity and improved efficiencies,
Optimized capital structures and resource allocation to pursue their distinct strategic agendas for long-term success and deliver greater returns to shareholders, and
Improved financial profiles making for unique and compelling investment cases.
Merck to Retain its Portfolio of Key Growth Drivers in Oncology, Vaccines, Hospital and Animal Health

Merck will retain its current growth pillars of Oncology, Vaccines, Hospital and Animal Health and continue to invest in research and development of breakthrough innovations across all areas of science. Led by highly innovative products, including KEYTRUDA (pembrolizumab), Lynparza (olaparib), Lenvima (lenvatinib mesylate), GARDASIL (Human Papillomavirus Vaccine, Recombinant), BRIDION (sugammadex), ZERBAXA (ceftolozane and tazobactam), and BRAVECTO (fluralaner), as well as its leading diabetes business and other key products, Merck will continue to benefit from broad commercial scale and remains committed to ensuring continued access to its innovative medicines across the globe.

The spinoff of NewCo will reduce Merck’s Human Health manufacturing footprint by approximately 25% and the number of Human Health products it manufactures and markets by approximately 50%. This will allow for a more focused operating model in support of its growth products. As a result, Merck expects to optimize its resources, grow faster and achieve meaningful operating margin expansion over time through increased productivity and efficiency.

NewCo to be Comprised of Products from Merck’s Women’s Health, Trusted and Medically Important Legacy Brands and Biosimilars Businesses

NewCo will pursue global leadership and focused, sustainable growth in Women’s Health led by the growing and patent-protected NEXPLANON (etonogestrel implant) franchise and fueled by its leading contraceptive and fertility businesses. NewCo expects to establish a leading position in Biosimilars along with its partner, Samsung Bioepis Co., Ltd., focusing on its current portfolio including RENFLEXIS (infliximab-abda) and BRENZYS (etanercept) in immunology and ONTRUZANT (trastuzumab-dttb) in oncology, and is well-positioned to be a partner in the commercialization of biosimilars worldwide. NewCo will have a large portfolio of highly profitable and trusted brands consisting of dermatology, pain, respiratory, select cardiovascular products including ZETIA (ezetimibe) and VYTORIN (ezetimibe/simvastatin), as well as the rest of Merck’s Diversified Brands, with strong cash flows that will support investments in future growth opportunities. In addition, NewCo will pursue opportunities to partner with biopharmaceutical innovators looking to commercialize their products by leveraging NewCo’s scale and presence in fast growing international markets.

NewCo will have a global footprint with approximately 75% of sales generated from ex-U.S. markets, significant scale and geographic reach, world-class commercial capabilities, and approximately 10,000 to 11,000 employees. NewCo is expected to be headquartered in New Jersey.

FINANCIAL OUTLOOK

Merck Targeting 40%+ Operating Margins by 2024; Believes Revenue Potential is Underappreciated; Retaining Current Dividend

Merck expects strong revenue growth each year through 2024, which will accelerate as a result of the spinoff.

Merck continues to expect meaningful operating margin expansion over time. The spinoff of NewCo should enable Merck to achieve incremental operating efficiencies in excess of $1.5 billion by 2024, while continuing to increase investment in key growth drivers and pipeline assets. Merck is therefore targeting Non-GAAP operating margins greater than 40% in 2024, higher than what Merck expected to achieve pre-spinoff.

Merck expects to receive $8 billion to $9 billion through a special tax-free dividend from NewCo. Merck expects that these funds will be allocated to business development or share repurchases and will provide more details about the planned usage of these funds closer to the spinoff date.

Merck will retain its current 2020 dividend of $2.44 per share and anticipates future increases with the goal of achieving a 47% to 50% payout ratio over time.

Combined Value Creation

Shareholders holding both Merck and NewCo post spinoff are expected to benefit from increased combined non-GAAP (generally accepted accounting principles) earnings per share assuming dilution (EPS) over time, as well as higher combined dividends. The combined non-GAAP EPS of the two companies is expected to be nominally lower initially than what Merck would have achieved pre-spinoff, reflecting costs necessary to operate NewCo as an independent company. However, as a result of the incremental growth that NewCo is expected to achieve, combined with the benefit of ongoing operating efficiencies at Merck enabled by the spinoff, the company expects Merck and NewCo to realize higher combined non-GAAP EPS within 12 to 24 months post-spinoff.

NewCo Expects to Achieve Strong Profitability and Low-Single-Digit Revenue Growth from 2021 Base; Expects to Pay Incremental Dividend

The products to be spun off into NewCo are expected to generate 2020 revenue of approximately $6.5 billion within Merck, with a non-GAAP operating margin of approximately 45%. As an independent company from a 2021 base-year of approximately $6.0 billion to $6.5 billion in revenue, NewCo is expected to achieve low-single-digit revenue growth. Inclusive of costs necessary in standing up NewCo as an independent company, non-GAAP operating margins are expected to be in the mid-30% range in the first year post separation and increase over time. NewCo’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins are expected to be in the low-to-mid 40% range in the first year post separation and increase over time.

NewCo is expected to have $8.5 billion to $9.5 billion in initial debt, with substantial cash flow that will provide ample financial flexibility for potential business development, debt paydown and a meaningful dividend. This expected dividend will be entirely incremental to Merck’s dividend.

LEADERSHIP AND GOVERNANCE

NewCo to be Led by Experienced Pharmaceutical Executives

Kevin Ali, who brings three decades of pharmaceutical commercial experience from within Merck, will be named chief executive officer of NewCo. Ali has led Merck’s enterprise portfolio strategy initiative, reporting to Frazier, for the past year. Prior to this, Ali served in many leadership roles within Merck, including president, MSD International; president, Emerging Markets; senior vice president in charge of the Bone, Respiratory, Immunology and Dermatology franchise; managing director of Germany and managing director of Turkey.

"Built on the foundation of a trusted, high-quality portfolio, NewCo will help people around the world live healthier lives, with a special focus on investing in innovations for the distinct healthcare needs of women," Ali said. "We are committed to becoming a leader in Women’s Health driven by organic and inorganic opportunities fueled by our portfolio of trusted legacy brands and our commitment to growing our rapidly expanding biosimilars business."

Carrie Cox will be named NewCo’s Chairman of the Board of Directors. Cox has extensive experience in the pharmaceutical industry and deep expertise in women’s health, formerly serving as chairman of Array BioPharma Inc., CEO and chairman of Humacyte Inc., president of Global Pharmaceuticals at Schering-Plough Corporation (acquired by Merck in 2009), executive vice president of Pharmacia Corporation and vice president of Women’s Health Care at Wyeth-Ayerst Laboratories, Inc.

"I am delighted to be joining the leadership of NewCo and excited by the growth opportunities in its portfolio," Cox said. "The time has come for a company dedicated to serving the healthcare needs of women, in addition to a broad portfolio that continues to be important for the public health needs of patients around the world."

More information about NewCo Board, governance structure and management team will be provided in the future.

Transaction Intended to be Completed in the First Half of 2021

The transaction is intended to take the form of a tax-free distribution to Merck shareholders of a new publicly traded stock in NewCo. The spinoff is expected to be completed in the first half of 2021, subject to market and certain other conditions.

Conference Call

Merck will discuss this transaction on its previously scheduled earnings conference call today, Feb. 5, at 8:00 a.m. EST, which investors, journalists and the general public may access via a live audio webcast on Merck’s website at View Source Institutional investors and analysts can participate in the call by dialing (706) 758-9927 or (877) 381-5782 and using ID code number 8583879. Members of the media are invited to listen to the call by dialing (706) 758-9928 or (800) 399-7917 and using ID code number 8583879. Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team at the conclusion of the call.