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Integra LifeSciences Reports First Quarter 2020 Financial Results

On May 7, 2020 Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, reported financial results for the first quarter ending March 31, 2020 (Press release, Integra LifeSciences, MAY 7, 2020, View Source [SID1234557301]).

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First Quarter 2020 Financial Summary

Reported revenues were $354.3 million, representing a decrease of (1.5)% on a reported basis and (0.1)% on an organic basis, compared to the prior year. These results are in line with the preliminary results provided on April 7, 2020;

GAAP earnings per diluted share were $0.11, compared to GAAP earnings of $0.38 in the first quarter of 2019. Adjusted earnings per diluted share were $0.48, compared to $0.65 in the prior year. The decline in earnings was largely attributable to the negative impact of COVID-19;

For the first two and a half months of the first quarter of 2020, revenue was trending at the higher end of the Company’s expectations. The Company estimates the revenue impact from the decline in surgical procedures related to COVID-19 during the second half of March to be between $20 and $25 million;

Consistent with our previous communication on April 7, 2020, the Company’s full-year 2020 guidance, provided on February 19, 2020, remains withdrawn due to the uncertainty related to the decline and recovery in surgical procedures resulting from COVID-19.
"The COVID-19 pandemic has had such a profound impact on families, communities and the global healthcare system. Throughout this period, Integra has remained focused on safeguarding the health and well-being of our people, while continuing to deliver lifesaving products to our customers and patients," said Peter Arduini, Integra’s president and chief executive officer. "I remain extremely proud of our people’s spirit, resilience and professionalism, supporting each other, while navigating through these unprecedented times."

The Company reported GAAP gross margin of 62.3%, compared to 64.2% in the first quarter of 2019. Adjusted gross margin was 68.3% compared to 68.4% in the prior year.

Adjusted EBITDA for the first quarter of 2020 was $75.7 million, or 21.4% of revenue, compared to $87.4 million, or 24.3% of revenue, in the prior year.
The Company reported GAAP net income of $9.2 million, or $0.11 per diluted share, in the first quarter of 2020, compared to GAAP net income of $32.8 million, or $0.38 per diluted share, in the prior year.
Adjusted net income for the first quarter of 2020 was $41.3 million, compared to $56.4 million in the prior year.
The decreases in gross margin, EBITDA and net income are primarily attributable to COVID-19, which resulted in lower than expected revenues, as non-emergent surgical procedures were deferred, primarily in the U.S. This decline in U.S. revenue relative to growth in international revenue resulted in an unfavorable gross margin compared to original expectations. Additionally, lower revenue levels relative to our selling, general and administrative costs, research and development costs and a higher tax rate contributed to the declines in net income, and were similarly driven by COVID-19.
Integra’s financial position and liquidity remain strong. In early February, the Company renegotiated the terms of its $2.2 billion bank facility, extended the maturity of its credit agreement by two years to 2025, and issued a $575 million convertible note with a 0.5% fixed interest rate. The Company ended the quarter with $358 million in cash and cash equivalents, $1.15 billion in undrawn revolver capacity, and a net debt bank leverage ratio of 3.1x. The Company previously reported in February that it had entered into an accelerated share repurchase (ASR) agreement to repurchase, in aggregate, approximately $92.4 million of the Company’s common stock. Approximately 80% of the shares to be repurchased were received by the company in the first quarter, and the Company expects that all repurchases under the ASR will be completed by the end of the second quarter.

Impact of COVID-19
Integra’s primary focus during this global crisis remains on supporting patients, providing customers with life-saving products and protecting the well-being of its employees.
For the first two and a half months of the first quarter of 2020, revenue was trending at the higher end of our expectations. However, as noted in the Company’s April 7, 2020 press release, surgical procedures declined significantly in the second half of March as healthcare providers reallocated resources to address the increasing demands caused by COVID-19.

The Company has estimated the revenue impact from the decline in surgical procedures to be approximately $20 to $25 million in the first quarter. Based on April trends and the ongoing impact from restrictions on surgical procedures and shelter-in-place policies, the Company expects a more substantial negative impact on second quarter performance.
In February, the Company implemented contingency plans to address the operational impact of COVID-19, focusing primarily on the Asia Pacific region. During March, the rapid and evolving spread of the virus resulted in an unprecedented challenge to the global healthcare industry. In response to the challenge, the Company expanded its contingency plans to enable its manufacturing and distribution sites around the world to continue operating at levels required to meet demand and to provide for the safety of its employees. In addition, in April, the Company initiated significant cost-savings measures, which include the following:

Reduced executive management and board cash compensation

Reduced cash compensation for all other employees through reduced commissions, reduction in hours and/or furloughs

Hiring freeze, elimination of overtime, cessation of third-party services and temporary contractor relationships, and

Significant reduction in capital expenditures and discretionary spending including travel, events and marketing programs

These comprehensive spending cuts were necessary to protect our financial strength in the face of near-term challenges. Yet, despite those challenges, the Company remains focused on managing the business for the long-term, including preserving full time jobs needed to support the expected rebound in surgical procedure volumes. Our adaptability and resiliency in the face of this unprecedented crisis is made possible in part by prior investments in technology infrastructure and operations as well as our talented and committed global workforce. And despite the current cost-reduction measures, we continue to prioritize and invest in our critical R&D and clinical programs.

2020 Full-Year Outlook
Given the existing uncertainty related to COVID-19, the Company’s guidance for the full-year 2020, issued on February 19, 2020, remains withdrawn as announced on April 7, 2020.
Supplemental financial and operational information is included in a presentation that can be found in the "Investor" section of the Company’s website at investor.integralife.com under "Events & Presentations".
In the future, the company may record, or expects to record, gains or losses, expenses, or charges as described in the Discussion of Adjusted Financial Measures below, which will be excluded from the calculation of adjusted EBITDA, adjusted earnings per share for historical periods and in adjusted earnings per share guidance.

Conference Call and Presentation Available Online
Integra has scheduled a conference call for 8:30 AM ET today, Thursday, May 7, 2020, to discuss financial results for the first quarter. The conference call will be hosted by Integra’s senior management team and will be open to all listeners. Additional forward-looking information may be discussed in a question and answer session following the call.
Integra’s management team will reference a presentation during the conference call. The presentation can be found on investor.integralife.com.
Access to the live call is available by dialing (800) 263-0877 and using the passcode 5089204. The call can also be accessed via a webcast link provided on investor.integralife.com. A replay of the call will be available until May 15, 2020 by dialing (888) 203-1112 and using the passcode 5089204. The webcast will also be archived on the website.

Aurinia Pharmaceuticals to Release First Quarter 2020 Financial Results on May 14, 2020

On May 7, 2020 Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH / TSX:AUP) (the "Company") reported that it will release its first quarter 2020 financial results on Thursday, May 14, 2020, after the markets close (Press release, Aurinia Pharmaceuticals, MAY 7, 2020, View Source [SID1234557300]). Aurinia’s management team will host a conference call to discuss the Company’s financial results and to provide a general business update.

The conference call and webcast is scheduled for May 14, 2020 at 4:30pm ET. In order to participate in the conference call, please dial +1-877-407-9170 (Toll-free U.S. & Canada). An audio webcast can be accessed under "News/Events" through the "Investors" section of the Aurinia corporate website at www.auriniapharma.com. A replay of the webcast will be available on Aurinia’s website.

Oncternal Provides Business Update and Announces First Quarter 2020 Financial Results

On May 7, 2020 Oncternal Therapeutics, Inc. (Nasdaq: ONCT), a clinical-stage biopharmaceutical company focused on the development of novel oncology therapies, reported first quarter 2020 financial results (Press release, Oncternal Therapeutics, MAY 7, 2020, View Source [SID1234557299]).

"Despite the COVID-19 pandemic, we are pleased to see continuing progress for our promising oncology pipeline, as we recently reported deep clinical responses in 28.5% of patients with Ewing sarcoma treated with TK216 at the selected Phase 2 dose with or without vincristine, and a 50% complete response ("CR") rate in patients with Mantle Cell Lymphoma ("MCL") treated with cirmtuzumab plus ibrutinib," said James Breitmeyer, M.D., Ph.D., President and CEO, Oncternal. "Our team has worked closely with our clinical investigators to help ensure the safety of the patients and the clinical study staff, while preserving regulatory compliance and data quality. At this time, we do not expect delays to our previously articulated clinical data read-outs in 2020."

Recent Highlights

In April 2020, we announced an interim clinical data update for our ongoing, open-label, multicenter Phase 1 clinical trial of TK216, a targeted investigational small-molecule inhibitor of the E26 transformation-specific ("ETS") family of oncoproteins, in patients with relapsed or refractory Ewing sarcoma. As of the data cut-off date of March 26, 2020, seven patients treated at the recommended Phase 2 dose ("RP2D") of TK216 (200 mg/m2/day for 14 days without or with vincristine) were evaluable for clinical responses. Two of the seven patients (28.5%) had achieved partial responses ("PR"), one with a surgical CR, and one with 90% shrinkage of target lesions. Both responding patients remain on treatment, including one who has no evidence of disease after more than twelve months on study. Two patients had stable disease and three had progressive disease, for an overall clinical benefit of 57% (4/7).

In March 2020, we announced an interim clinical data update for cirmtuzumab, a monoclonal antibody targeting ROR1, or Receptor tyrosine kinase-like Orphan Receptor 1, in combination with ibrutinib in patients with relapsed/refractory MCL enrolled in our ongoing Phase 1/2 clinical trial. As of the data cut-off of March 6, 2020, we reported a 50% CR rate for the 12 evaluable patients and an 83% best objective response rate ("ORR", including CR or PR). Responses were determined by Cheson criteria, and one of the six patients with CR had a complete metabolic response by PET scan, with a bone marrow biopsy pending.

In February 2020, we presented ROR1 CAR-T preclinical data at the ASCO (Free ASCO Whitepaper)-SITC Clinical Immuno-Oncology Symposium. ROR1 CAR-T cell therapy demonstrated expansion, persistence and anti-tumor activity in an animal model of ROR1-expressing human leukemia. This research is being conducted by our collaborators at the University of California San Diego (UC San Diego) under a grant from the California Institute of Regenerative Medicine ("CIRM").

Oncternal’s first priority during the unprecedented public health emergency caused by the COVID-19 pandemic has been protecting the safety of the patients in our clinical trials, along with the safety of the staff at clinical sites and that of our own employees, while ensuring regulatory compliance and data integrity. Enrollment of new patients into our studies has slowed down, as most other drug developers are reporting, but we have continued to enroll additional patients into the Ewing sarcoma study recently despite COVID-19 related constraints. As of today, very few patients have discontinued their participation in our clinical trials because of COVID-19 concerns, and we remain on track to meet our previously disclosed expected clinical data milestones for 2020.

Expected Upcoming Milestones

TK216 program

Clinical data for 7-12 patients with Ewing sarcoma treated in the Phase 1 expansion cohort – in the second half of 2020

IND-enabling data in additional ETS-driven tumors – in the second half of 2020

Cirmtuzumab program

Clinical data update for patients with MCL, including for 15 or more patients treated with cirmtuzumab plus ibrutinib in the ongoing Phase 1/2 study – in mid-2020

Clinical data update for patients with CLL, including 12-month follow-up for up to 34 patients treated with cirmtuzumab plus ibrutinib in the ongoing Phase 1/2 study – in mid-2020

Clinical data update for patients with HER2-negative breast cancer in the ongoing Phase 1b study – in the second half of 2020

IND-enabling data in additional ROR1 expressing tumors – in the second half of 2020

ROR1 CAR-T program

First-in-human dosing in China – in the first half of 2021

First Quarter 2020 Financial Results

Our grant revenue was $0.6 million for the first quarter ended March 31, 2020. Our grant revenue is derived from a sub-award under a grant from CIRM to UC San Diego, which was awarded to advance our Phase 1/2 clinical trial evaluating cirmtuzumab in combination with ibrutinib for the treatment of patients with MCL or CLL.

Our total operating expenses for the first quarter ended March 31, 2020 were $5.3 million. Research and development expenses for the quarter totaled $2.7 million, and general and administrative expenses for the quarter totaled $2.6 million. Net loss for the first quarter was $4.7 million, or a loss of $0.31 per share, basic and diluted.

As of March 31, 2020, we had $16.0 million in cash and cash equivalents. We believe these funds will be sufficient to fund our operations into the fourth quarter of 2020. As of March 31, 2020, we had approximately 15.4 million shares of common stock outstanding.

Management Webcast

As previously announced, Oncternal will host a webcast today, May 7, 2020, at 3:00 p.m. ET (12:00 p.m. PT). The live webcast will be available online and may be accessed from the "Investors" page of the company website at View Source A replay of the webcast will be available beginning approximately one hour after the conclusion of the call and will remain available for at least 30 days thereafter.

Scholar Rock Reports First Quarter 2020 Financial Results and Highlights Business Progress

On May 7, 2020 Scholar Rock (NASDAQ: SRRK), a clinical-stage biopharmaceutical company focused on the treatment of serious diseases in which protein growth factors play a fundamental role, reported financial results for the first quarter ended March 31, 2020 and highlighted recent progress and upcoming milestones for its pipeline programs (Press release, Scholar Rock, MAY 7, 2020, View Source [SID1234557298]).

"We are humbled by the tenacity and commitment of the patients and clinicians with whom we have the privilege to work as we continue to adjust to the challenges of the COVID-19 pandemic," said Nagesh Mahanthappa, Ph.D., President and CEO of Scholar Rock. "It is with a primary focus on the safety and well-being of our patients, clinical investigators and employees, that we are committed to continuing the execution of the SRK-015 TOPAZ Phase 2 and the SRK-181 DRAGON Phase 1 trials. Though we may continue to experience uncertainty during these unprecedented times, Scholar Rock is planning for additional updates on both programs later this year."

Company Updates and Upcoming Milestones

SRK-015 Program for Spinal Muscular Atrophy (SMA):

Anticipate Interim Efficacy and Safety Data from the TOPAZ Phase 2 Trial in the Fourth Quarter of 2020. COVID-19-related restrictions have impacted patient access to clinical trial sites, which have led to missed or delayed doses or assessments (including efficacy) in some patients and has affected Scholar Rock’s ability to monitor trial data collected by sites. As a result, Scholar Rock now plans to report interim efficacy, safety, pharmacokinetic (PK), and pharmacodynamic (PD) results in the fourth quarter of 2020 for patients across the three cohorts who have progressed through at least six months of the treatment period. This is an approximately one quarter delay compared to the previous guidance of interim 6-month results in mid-2020.

As of May 1, 2020, the majority of patients have either completed or are on track to complete their 6-month visit for the interim efficacy and safety analysis. For patients who have had their 6-month visit impacted, Scholar Rock is working closely with clinical trial sites on scheduling to minimize any additional delays in dosing and assessments.
Enrollment of the TOPAZ proof-of-concept trial was completed in January 2020. 58 patients with Type 2 or Type 3 SMA were enrolled across the three cohorts (23 patients in Cohort 1, 15 patients in Cohort 2, and 20 patients in Cohort 3).
To date, one patient (Cohort 1) has discontinued from the trial for reasons unrelated to the study drug and which occurred prior to the COVID-19 pandemic.
As of May 1, 2020, 41 of 57 patients have completed the 6-month visit for the interim efficacy and safety analysis.
As of May 1, 2020, 51 of 57 patients have completed the 5-month visit.
Approximately 70% of patients are enrolled in the U.S. and the remaining 30% of patients are enrolled in Europe, including Italy, Spain, and Netherlands.

Top-line data for the 12-month treatment period are now expected in the first half of 2021 as compared to the previous guidance of the fourth quarter of 2020 and first quarter of 2021. There may be further impacts on the timing of future doses and assessments for patients in the trial, as the effects of the COVID-19 pandemic continue to evolve.
Identification of Second Indication for SRK-015 Planned for 2020. Scholar Rock continues to evaluate multiple potential opportunities beyond SMA, for which the selective inhibition of the activation of myostatin with SRK-015 may offer therapeutic benefit.
SRK-181 Program for Immuno-Oncology:

Update on Dose Escalation from the DRAGON Phase 1 Proof-of-Concept Trial in Solid Tumors Expected in the Fourth Quarter of 2020. SRK-181 is a potent and highly selective inhibitor of latent transforming growth factor beta 1 (TGFβ1) activation and is being developed with an aim of expanding anti-tumor responses from immunotherapy by overcoming primary resistance to anti-PD-1 or anti-PD-L1 therapy. The DRAGON Phase 1 dose escalation and dose expansion trial evaluating SRK-181 in patients with locally advanced or metastatic solid tumors was initiated in the first quarter of 2020. Scholar Rock continues to activate clinical trial sites and recently commenced patient enrollment and dosing. Update on dose escalation of SRK-181 as a single agent as well as in combination with anti-PD-(L)1 therapy is expected in the fourth quarter of 2020, subject to the pace of enrollment as impacted by the COVID-19 pandemic. Clinical response and safety data are anticipated in 2021. Timing of data read-outs may be further impacted by the COVID-19 pandemic.

The two-part DRAGON trial consists of a dose escalation portion (Part A) for SRK-181 as both a single-agent and in combination with an approved anti-PD-(L)1 therapy, followed by a dose expansion portion (Part B) evaluating SRK-181 in combination with an approved anti-PD-(L)1 therapy in patients with solid tumors exhibiting primary resistance to that anti-PD-(L)1 therapy. Part B will encompass multiple cohorts that are expected to include urothelial carcinoma, cutaneous melanoma, non-small cell lung cancer, and other solid tumors. Patients will be administered SRK-181 IV every 3 weeks (Q3W), and additional dosing regimens may be explored in the future. Key objectives of the study include evaluating the efficacy, PK, and safety of SRK-181.
Published Preclinical Data Detailing a Potent and Selective Inhibitor of TGFβ1 Overcoming Primary Resistance to Checkpoint Inhibition. In March 2020, Scholar Rock’s preclinical data establishing the therapeutic rationale for evaluating a potent and highly selective inhibitor of TGFβ1 activation to overcome primary resistance to checkpoint inhibitor therapy were published in the peer-reviewed journal Science Translational Medicine(1). Selective inhibition of latent TGFβ1 activation with SRK-181 has demonstrated in preclinical studies the potential to overcome primary resistance, which, if replicated in clinical studies, could meaningfully expand the number of patients who could benefit from checkpoint inhibitor therapy. In preclinical studies, an improved safety profile was observed for SRK-181 as compared to conventional inhibitors of TGFβ signaling.
RGMc Program for Iron-Restricted Anemias:

Nomination of a Product Candidate from the RGMc Program Planned in 2020. Scholar Rock is evaluating a number of highly specific inhibitors of repulsive guidance molecule C (RGMc) and plans to nominate an antibody as its third product candidate in 2020. RGMc’s known function is localized to hepatocytes and the identification of RGMc selective-antibodies may offer the potential for liver-specific modulation of BMP6 signaling to address iron-restricted anemias.
Additional Corporate Updates:

Chief Scientific Officer, Alan Buckler, Ph.D., to Step Down Effective June 1, 2020.
Alan Buckler, Ph.D., has decided to leave Scholar Rock to pursue other opportunities and will remain in his position through June 1 to ensure a smooth transition. Alan has been instrumental in helping to build a highly talented research team that has established Scholar Rock’s proprietary discovery platform as well as advanced two product candidates through research, discovery and preclinical development into the clinic.

On June 1, 2020, Gregory Carven, Ph.D., current Senior Vice President of Biologics, will be named to the new position of Head of Research to continue delivering on the Company’s commitment to drug discovery. Gregory is a gifted scientist with more than 15 years of experience in the discovery and development of antibody therapeutics and is a co-inventor of pembrolizumab. Since joining Scholar Rock in 2014, Gregory has led the Company’s biologics discovery, design, and manufacturing initiatives and played a central role in the discovery and preclinical development of both the SRK-015 and SRK-181 product candidates.
Announced Issuance of U.S. Patent Broadly Relevant to Antibodies that Modulate TGFβ Activation. The United States Patent Office (USPTO) issued U.S. Patent No. 10,597,443 with an expiry of May 2034 broadly covering methods for making activation modulators of TGFβ that utilize Scholar Rock’s proprietary platform approach of targeting the precursor form of growth factors. This broadly relates to TGFβ activation inhibitors that are specific to the context of presenting molecules, such as GARP and LTBP, as well as activation inhibitors that are not dependent on a specific presenting molecule, such as SRK-181.
First Quarter 2020 Financial Results

For the quarter ended March 31, 2020, net loss was $17.1 million or $0.58 per share compared to a net loss of $10.8 million or $0.42 per share for the quarter ended March 31, 2019.

Revenue was $5.0 million for the quarter ended March 31, 2020 and was related to the Gilead fibrosis-focused collaboration (the "Gilead Collaboration Agreement") that was executed in December 2018.
Research and development expense was $16.9 million for the quarter ended March 31, 2020 compared to $10.7 million for the quarter ended March 31, 2019. The increase year-over-year primarily reflects manufacturing costs and costs associated with the initiation of the DRAGON Phase 1 clinical trial for SRK-181, costs associated with the TOPAZ Phase 2 clinical trial for SRK-015, and higher personnel-related costs, slightly offset by lower early development costs.
General and administrative expense was $5.8 million for the quarter ended March 31, 2020 compared to $4.1 million for the quarter ended March 31, 2019. The increase year-over-year was primarily attributable to increased headcount and professional services.
As of March 31, 2020, Scholar Rock had cash, cash equivalents, and marketable securities of $160.6 million, which is inclusive of a $25 million payment from Gilead for the achievement of the preclinical milestone under the Gilead Collaboration Agreement. This compares to cash, cash equivalents, and marketable securities of $157.4 million as of December 31, 2019.

(1)
Martin, C., Datta, A., Schürpf, T., et al. Selective inhibition of TGFβ1 activation overcomes primary resistance to checkpoint blockade therapy by altering tumor immune landscape, Science Translational Medicine, 2020 Mar 25; 12(536), eaay8456.

Zymeworks Reports 2020 First Quarter Financial Results

On May 7, 2020 Zymeworks Inc. (NYSE: ZYME), a clinical-stage biopharmaceutical company developing multifunctional biotherapeutics, reported financial results for the first quarter ended March 31, 2020 (Press release, Zymeworks, MAY 7, 2020, View Source [SID1234557297]).

"While the COVID-19 pandemic has presented unprecedented global challenges, the entire Zymeworks team remains committed to our mission of returning patients home to their loved ones, disease free," said Ali Tehrani, Ph.D., Zymeworks’ President & CEO. "The clinical trials for our lead candidates, ZW25 and ZW49, provide potential options for patients whose cancer has become refractory to the standard of care. I am extremely proud of how our team, our collaborators, and our clinical investigators have responded to ensure that patients enrolled in our studies continue to receive their treatments as we advance these therapies through the clinic."

Dr. Tehrani added, "With a strong balance sheet and runway into 2022, substantial drug supply, and clinical trials in diverse sites around the globe, Zymeworks is well-prepared to continue moving forward through these challenging times. We look forward to providing a corporate update midyear to share our progress."

COVID-19 Business Update

Zymeworks continues to closely monitor the COVID-19 pandemic and adapt its business operations while prioritizing the health and well-being of patients, clinical investigators, and personnel. In accordance with recommendations from health authorities, Zymeworks has transitioned to a remote working arrangement to protect employees and the broader community while maintaining business continuity. All clinical trial sites remain open and active with a heightened focus on patient safety and data integrity. While the effects of the pandemic are expected to slow the pace of patient recruitment due to the diversion of healthcare resources to COVID-19 response activities, they have not had a material impact on the company’s financial condition, liquidity, or longer-term strategic development and commercialization plans. Following the guidance of local health authorities, Zymeworks has begun implementing plans for employees to return working on site.

First Quarter 2020 Business Highlights and Recent Developments

•Strong Financial Position; Extended Runway
Zymeworks completed an upsized public financing with gross proceeds of US$320.8 million and ended the first quarter with $562.7 million in cash resources. Based on current operating plans, Zymeworks expects to have cash to fund research and development programs and operations into 2022 and potentially beyond.

•ZW25 Advances in Three New Global Clinical Trials
Zymeworks’ partner BeiGene dosed the first patient in a Phase 1b/2 trial evaluating ZW25 in combination with chemotherapy as a first-line treatment for patients with metastatic HER2-positive breast cancer and in combination with chemotherapy and BeiGene’s PD-1-targeted antibody tislelizumab as a first-line treatment for patients with metastatic HER2-positive gastroesophageal adenocarcinoma (GEA). In addition, Zymeworks initiated a Phase 2 trial and collaboration with Pfizer to evaluate ZW25 in combination with palbociclib and fulvestrant in HER2-positive, hormone receptor-positive breast cancer.

•ZW49 Continues to Advance in Phase 1 Dose-Escalation Study
An update in January highlighted that there had been no dose-limiting toxicities observed and the maximum tolerated dose had not been reached. The majority of treatment-related adverse events were grade 1 or 2, and were reversible and manageable on an outpatient basis. Preliminary results from these initial dose cohorts included anti-tumor activity.

•Strengthens Commercial Leadership and Board of Directors
James Priour recently joined as Senior Vice President, Commercial, providing invaluable direction as Zymeworks begins registration-enabling trials with ZW25 this year. Before joining Zymeworks he held various international commercial leadership roles with Procter & Gamble Pharmaceuticals, Bristol Myers Squibb, and most recently at Amgen where he was the Global Product General Manager for Kyprolis and the early myeloma pipeline. Zymeworks also appointed Dr. Kelvin Neu, Partner at Baker Bros. Advisors LP, to the Board of Directors adding clinical knowledge and partnering expertise.

Financial Results for the Quarter Ended March 31, 2020

Revenue for the three months ended March 31, 2020 was $8.3 million as compared to $11.9 million in the same period of 2019. Revenue for the first quarter of 2020 included recognition of a $5.0 million development milestone and $2.2 million in drug supply revenue under the license and collaboration agreements with BeiGene as well as $1.1 million in research support and other payments from Zymeworks’ partners. Revenue for the first quarter of 2019 related primarily to an $8.0 million development milestone payment under the license and collaboration agreement with Lilly, recognition of $3.5 million of deferred revenue from the licensing and collaboration agreement with BeiGene, as well as $0.4 million in research support payments.

For the three months ended March 31, 2020, research and development expenses were $36.5 million as compared to $17.5 million in the same period of 2019. The change was primarily due to an increase in clinical trial activity and associated drug manufacturing costs for ZW25, as well as an increase in other research and discovery activities as compared to the same period in 2019. Research and development expenses also included non-cash stock-based compensation expense of $2.0 million from equity classified equity awards and a $1.8 million recovery related to the non-cash mark-to-market revaluation of certain historical liability classified equity awards.
For the three months ended March 31, 2020, general and administrative expenses were $7.6 million as compared to $9.0 million in the same period in 2019. The change was primarily due to a decrease in employee compensation expense relating to non-cash stock-based compensation, which was partially offset by an increase in head count in 2020 over 2019, associated with year-over-year corporate growth. General and administrative expenses included non-cash stock-based compensation expense of $2.2 million from equity classified equity awards and a $5.4 million recovery related to the non-cash mark-to-market revaluation of certain historical liability classified equity awards.
Net loss for the three months ended March 31, 2020 was $31.1 million as compared to $13.6 million in the same period of 2019. This was primarily due to the decrease in revenue and increase in research and development expenses referred to above, partially offset by higher interest and other income as well as lower general and administrative expenses.
Zymeworks expects research and development expenditures to increase over time in line with the advancement and expansion of the Company’s clinical development of its product candidates, as well as its ongoing preclinical research activities. Additionally, Zymeworks anticipates continuing to receive revenue from its existing and future strategic partnerships, including technology access fees and milestone-based payments. However, Zymeworks’ ability to receive these payments is dependent upon either Zymeworks or its collaborators successfully completing specified research and development activities.
As of March 31, 2020, Zymeworks had $562.7 million in cash resources consisting of cash, cash equivalents, short-term investments and certain long-term investments.