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Pliant Therapeutics Provides Corporate Update and Announces Second-Quarter 2020 Financial Results

On August 11, 2020 Pliant Therapeutics, Inc. (Nasdaq: PLRX), a clinical stage biotechnology company focused on discovering and developing novel therapeutics for the treatment of fibrosis, reported second-quarter 2020 financial results (Press release, Pliant Therapeutics, AUG 11, 2020, View Source [SID1234563429]).

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"2020 has been a productive year as we’ve made progress on multiple fronts, including the initiation of a 12-week Phase 2a clinical trial evaluating PLN-74809 in patients with idiopathic pulmonary fibrosis, as well as dosing initial cohorts in our first-in-human trial of our Novartis partnered program, PLN-1474, for the potential treatment of liver fibrosis," said Bernard Coulie, M.D., Ph.D., chief executive officer and president of Pliant Therapeutics. "Bolstered by a strong cash position from our Series C financing in February and our IPO in June, we continue to advance our robust pipeline. We’re now focused on executing our Phase 2a program for PLN-74809 and look forward to sharing further updates on all of our programs."

Recent Highlights

Completed an initial public offering (IPO) and concurrent private placement with Novartis. The IPO priced at $16.00 per share, generating gross proceeds of $165.6 million including shares sold to the underwriters pursuant to the full exercise of their overallotment option before deducting underwriting discounts, commissions and other offering expenses payable by Pliant. The company also received $10.0 million in additional proceeds from a concurrent private placement with Novartis Institutes for BioMedical Research, Inc. at the public offering price of $16.00 per share. The Company’s common stock commenced trading on the Nasdaq Global Select Market under the ticker symbol "PLRX" on June 3rd, 2020.
Phase 2a 12-week trials of PLN-74809 in idiopathic pulmonary fibrosis (IPF) and primary sclerosing cholangitis (PSC) have resumed enrollment. Through close coordination with over 100 global trial sites, Pliant has continued to conduct site initiation activities throughout the COVID-19 pandemic. The Company is offering a hybrid approach to clinical trial participation with home-health solutions designed to minimize the requirements for visits to healthcare facilities, as well as a campaign to raise awareness of the IPF and PSC programs across patient communities and patient advocacy groups. Phase 2a clinical trial sites are currently enrolling patients in both the IPF and PSC trials.
Opened Investigational New Drug (IND) Application for PLN-74809 for treatment of acute respiratory distress syndrome (ARDS) associated with COVID-19. Pliant submitted the COVID-19 ARDS IND in June and the FDA has since issued a "safe to proceed" letter. The Company plans to initiate a Phase 2 trial evaluating safety, tolerability and pharmacokinetics (PK) of PLN-74809, as well as exploratory clinical outcome measures in patients hospitalized with severe and critical COVID-19 in the second half of 2020. This represents the fourth IND that Pliant has successfully opened since operations began in 2016.
Completed dosing of initial cohorts of a Phase 1 trial of PLN-1474. The Phase 1 trial is designed to evaluate safety and tolerability, as well as PK of PLN-1474 in approximately 100 healthy volunteers across a dose range compared to placebo. The Phase 1 trial site has experienced delays due to COVID-19; however, it is now open and expected to continue dosing the remaining cohorts with topline data expected in the first quarter of 2021, subject to further impact of the COVID-19 pandemic. PLN-1474 is partnered with Novartis.
COVID-19 Preparedness

Pliant has worked proactively to establish policies and procedures to enable the Company to operate safely and productively during the pandemic. The Company has experienced delays in clinical trial operations which will impact the expected timing of data readouts, but is working closely with clinical sites to continue site initiation activities in compliance with study protocols while observing government and institutional guidelines. The clinical site conducting Pliant’s Phase 2a PET trial of PLN-74809 in IPF remains closed to clinical research, but expects to resume trial activities in the third quarter. Pliant has made significant progress in opening trial sites for its Phase 2a 12-week IPF and PSC trials by offering a hybrid approach to clinical trial participation with home-health solutions designed to minimize the requirements for visits to healthcare facilities, as well as a campaign to raise awareness of the IPF and PSC programs across patient communities and patient advocacy groups. The Company intends to provide more specific guidance regarding clinical trial progress and the timing of data readouts as the impacts of the pandemic are better understood.

Second-Quarter 2020 Financial Results

Related party revenue was $3.6 million as compared to nil for the prior-year period.
Research and development expenses were $17.5 million, as compared to $13.1 million for the prior-year period. The increase was primarily related to higher external research and development expenses associated with the advancement of several programs and ongoing Phase 2 clinical trials.
General and administrative expenses were $3.0 million, as compared to $2.6 million for the same period in 2019. The increase was due to higher personnel-related and professional services expenses.
Net loss of $17.0 million as compared to a net loss of $15.5 million for the prior-year period.
As of June 30, 2020, Pliant had cash, cash equivalents and short-term investments of $312.5 million, compared to $102.8 million as of December 31, 2019. Pliant believes it has sufficient funds to meet its operating and capital requirements into 2023.

HTG Molecular Diagnostics Reports Second Quarter 2020 Results

On August 11, 2020 HTG Molecular Diagnostics, Inc. (Nasdaq: HTGM) (HTG), a life science company whose mission is to advance precision medicine, reported its financial results for the quarter ended June 30, 2020 (Press release, HTG Molecular Diagnostics, AUG 11, 2020, sec.gov/Archives/edgar/data/1169987/000156459020039296/htgm-ex991_6.htm [SID1234563428]).

Recent Accomplishments & Highlights:

Entered into a 10-year Commercialization and Distribution Agreement (Master Agreement) with QIAGEN Manchester Limited (QIAGEN), providing the foundation for HTG and QIAGEN to combine their technological and commercial strengths with the goal to offer pharmaceutical companies global development, distribution and commercialization capabilities for companion diagnostic assays developed on the HTG EdgeSeq platform.
Introduced three previously released research use only (RUO) assays for use with the Thermo Fisher Scientific Ion Torrent Ion S5 next-generation sequencing (NGS) platform. With the release of the HTG EdgeSeq Precision Immuno-Oncology Panel, the HTG EdgeSeq Mouse MRNA Tumor Response Panel and the HTG EdgeSeq Autoimmune Panel, HTG’s entire RUO profiling assay menu is now available on both the Illumina and Thermo Fisher Scientific NGS platforms.
Announced the launch of the new HTG EdgeSeq Pan B-Cell Lymphoma Panel, which is commercially available for purchase in kit form or as a service in HTG’s VERI/O laboratory. The HTG EdgeSeq Pan B-Cell Lymphoma Panel is an RUO panel designed to provide molecular characterization of aggressive lymphomas by allowing researchers to measure the expression of genes associated with the aggressive lymphoma transcriptome.
Signed three new European distributor agreements to promote HTG products and services in Nordic and Eastern European Countries with BioNordika (Denmark), Explorea (Czech Republic), and ELTA 90 (Bulgaria).
HTG’s EdgeSeq technology was highlighted in posters presented by partners at both the American Association for Cancer Research (AACR) (Free AACR Whitepaper) and the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2020 virtual meetings.
Secured a $10.0 million senior term loan from Silicon Valley Bank. Proceeds from the senior term loan were used to pay off the principal balances outstanding on HTG’s term loan with MidCap Financial and its subordinated convertible promissory note held by QIAGEN North American Holdings, Inc. The duration of the senior term loan is 42 months, with interest only payments through June 30, 2021 plus additional months under certain conditions.
"The COVID-19 pandemic continued to have a negative impact on our business and that of our customers in the second quarter of 2020 and we believe it will continue to have a negative impact likely through at least the remainder of 2020 as a number of our larger customers have communicated their intentions to remain operating at partial capacity or with limited external visitors through the end of the year," said John Lubniewski, President and CEO of HTG. "However, we have also been encouraged to see a number of our academic customers in Europe and the United States return to their laboratories, resume planned studies with HTG technologies and initiate new ones that we have been discussing and developing with them during the last several months of remote engagement. While we cannot be certain of the ultimate impact of the COVID-19 pandemic on us or our customers, this positive trend allows us to continue to be optimistic that demand for our products and services will increase in the future."

Mr. Lubniewski continued, "Our product development teams have made progress towards the key milestones during the quarter. Our California and Arizona development teams continue to implement our development strategy and we believe we are on track to deliver upcoming anticipated development milestones. While the pandemic has created some near-term uncertainty, we are very proud of how our employees have faced the challenges – with flexibility and a commitment to ensuring our long-term success. When our customers eventually return to a more normal work environment, we will be prepared to meet demand and for growth in our business."

Second Quarter 2020 Financial Highlights:

Total revenue for the quarter ended June 30, 2020 was $2.0 million, compared with $5.8 million for the same period in 2019. The decrease in revenue is a result of the impact of the COVID-19 pandemic requiring the closure of customer facilities around the globe for a large portion of the second quarter of 2020. These closures limited HTG’s ability to ship instruments and consumables to customer facilities and the ability of customers to prepare and ship samples to HTG’s VERI/O laboratory for processing.

Product and product-related services revenue was $1.7 million for the quarter ended June 30, 2020, compared with $4.4 million for the same period in 2019. In addition to the impacts of the COVID-19 pandemic, this decrease reflects a decline in lower margin subcontracted laboratory services revenue when compared with second quarter of 2019.

Collaborative development services revenue for the quarter ended June 30, 2020 was $0.2 million compared with $1.4 million for the same period in 2019, reflecting a decrease in activity as we continue to await additional activity based on customer decision points relating to our existing programs.

Net loss from operations for the quarter ended June 30, 2020 was $5.0 million, compared with $4.7 million for the second quarter of 2019. Net loss per share was $(0.09) for the second quarter of 2020 compared with $(0.17) for the second quarter of 2019.

Cash, cash equivalents and short-term available-for-sale securities totaled $32.9 million as of June 30, 2020, with current liabilities of approximately $4.9 million and non-current liabilities of $15.7 million.

Conference Call and Webcast:

HTG will host a conference call for the investment community today beginning at 4:30 p.m. Eastern Time. Conference call and webcast details are as follows:

Date: Tuesday, August 11, 2020
Time: 4:30 p.m. Eastern Time
Toll Free: (877) 407-0789
International: (201) 689-8562
Conference ID: 13706480
Webcast: View Source

Alector Reports Second Quarter 2020 Financial Results and Provides Corporate Update

On August 11, 2020 Alector, Inc. (Nasdaq: ALEC), a clinical-stage biotechnology company pioneering immuno-neurology, reported corporate updates and financial results for the second quarter ended June 30, 2020 (Press release, Alector, AUG 11, 2020, View Source [SID1234563427]).

"I am proud of the continued progress across our portfolio, most notably the initiation of our pivotal Phase 3 trial evaluating AL001 for the treatment of people with frontotemporal dementia," said Arnon Rosenthal, Ph.D., co-founder and chief executive officer of Alector. "We are encouraged by the findings from the Phase 2 study of AL001 and look forward to sharing additional data after longer-term treatment and follow up. Our novel immuno-neurology approach and commitment to delivering transformative new therapies to people living with devastating forms of degenerative brain diseases are at the core of what we do. We have taken significant steps to ensure that we will continue to be in a position to achieve our goals, and ultimately, deliver therapies to the people who need them."

Clinical Pipeline Highlights and Corporate Update

Progranulin Portfolio:

Announced dosing of first participant in pivotal Phase 3 trial evaluating AL001 in people at risk for or with frontotemporal dementia due to a progranulin gene mutation (FTD-GRN). In July 2020, Alector announced that the first participant was dosed in INFRONT-3, a global, pivotal Phase 3 trial, evaluating the efficacy and safety of AL001 in pre-symptomatic and symptomatic participants with FTD-GRN. The trial will enroll up to 180 participants at approximately 50 centers globally.

Presented preliminary findings from AL001 Phase 1b and Phase 2 open label studies at the Alzheimer’s Association International Conference (AAIC). In July 2020, Alector presented promising preliminary data from the Phase 1b and Phase 2 open-label studies evaluating the long-term dosing of AL001 in patients with FTD-GRN at the virtual AAIC. The data demonstrated that AL001 was well-tolerated in both studies. Additionally, in the Phase 2 study, treatment with AL001 led to sustained restoration of plasma progranulin (PGRN) levels in all FTD-GRN participants back to the normal range. These preliminary findings also showed that the majority of symptomatic FTD-GRN participants (six out of the eight) experienced a decrease in neurofilament light chain levels (NfL), an exploratory biomarker of neurodegeneration, from baseline at the last measured time point. Alector plans to continue this 96-week open-label Phase 2 study and present additional data from study participants, including findings on safety, fluid and imaging biomarkers, and clinical outcomes assessments, at a later date.
Alzheimer’s Disease Portfolio:

Continued progress for multiple Alzheimer’s disease clinical programs:

In collaboration with its partner AbbVie, Alector plans to initiate a Phase 2 study evaluating AL002 in patients with Alzheimer’s disease in the second half of 2020.

Alector continues to advance the Phase 1b trial of AL003 in Alzheimer’s disease, also being developed in collaboration with AbbVie.

Alector plans to initiate Phase 1 development for AL014 in the first half of 2021. AL014 is the latest prioritized candidate that targets MS4A4A, a transmembrane receptor protein that is expressed selectively in microglia in the brain and is associated with control of microglia functionality and potential viability.
Notable Clinical and Early-Stage Research:

Published new findings from the AL002 program in leading research journal. In June 2020, Alector announced the publication of preclinical and Phase 1 data demonstrating the potential of AL002 as a treatment for Alzheimer’s disease in The Journal of Experimental Medicine.

Published research showing role of Trem2 in a multiple sclerosis disease model. In August 2020, Alector researchers and academic collaborators published findings highlighting the role of Trem2 as induced by AL002a (a murine specific Trem2 antibody) in promoting myelin debris clearance and remyelination in a cuprizone mouse model of multiple sclerosis in Acta Neuropathologica.
Ongoing COVID-19 Response Activities:

Alector continues to actively monitor the evolving impact of COVID-19 on its business and clinical operations, with a primary focus on the health and safety of clinical trial participants, clinical trial site teams and employees.

To help mitigate the potential effects of the ongoing COVID-19 pandemic on current participant recruitment activities, the Company has implemented a number of activities to enhance clinical trial continuation and patient recruitment including: increased remote support for clinical sites and study staff; evaluation of the availability of in-home dosing and monitoring services for trial participants; and concierge travel support for trial participants who prefer to visit clinical sites in person. A targeted disease education campaign is also planned to help drive awareness of FTD and the AL001 Phase 3 clinical trial.
Second Quarter 2020 Financial Results

Revenue. Collaboration revenue for the quarter ended June 30, 2020, was $3.2 million, compared to $6.9 million for the same period in 2019. Alector recognizes revenue from the upfront payments under an agreement with AbbVie over time as the services are provided. Revenues are recognized as the program costs are incurred by measuring actual costs incurred to date compared to the overall total expected costs to satisfy the performance obligation. Changes in estimates for revenue recognized over time are recognized on a cumulative basis.

R&D Expenses. Total research and development expenses for the quarter ended June 30, 2020, were $34.1 million, compared to $25.6 million for the same period in 2019. This increase was mainly driven by an increase in expenses to support the advancement of the clinical and pre-clinical programs across several therapeutic programs and an increase in personnel-related expenses.

G&A Expenses. Total general and administrative expenses for the quarter ended June 30, 2020, were $15.7 million, compared to $8.4 million for the same period in 2019. This increase was primarily due to an increase in personnel-related expenses due to increased headcount and an increase in legal costs associated with our ongoing arbitration proceedings for certain intellectual property matters.

Net Loss. For the quarter ended June 30, 2020, Alector reported a net loss of $45.3 million, compared to a net loss of $24.6 million for the same period in 2019.

Cash Position. Cash, cash equivalents, and marketable securities were $503.6 million as of June 30, 2020. The Company believes that its cash and investments as of June 30, 2020, will be sufficient to fund its anticipated operations through 2022.

Alpine Immune Sciences Reports Second Quarter 2020 Financial Results and Provides Corporate Update

On August 11, 2020 Alpine Immune Sciences, Inc. (NASDAQ:ALPN), a leading clinical-stage immunotherapy company focused on developing innovative treatments for cancer and autoimmune/inflammatory diseases, reported financial results for the second quarter ended June 30, 2020 (Press release, Alpine Immune Sciences, AUG 11, 2020, View Source [SID1234563426]).

Key Second Quarter 2020 and Subsequent Highlights

Announced ALPN-101 Option and License Agreement with AbbVie for up to $865 million plus royalties on future sales. In June, Alpine and AbbVie announced an exclusive worldwide option and license agreement for ALPN-101, a first-in-class dual CD28/ICOS costimulation antagonist. Under the terms of the agreement, Alpine received an upfront payment of $60 million and is eligible to receive up to an aggregate of $805 million for exercise of the option and success-based development, regulatory, and commercial milestones. In addition, Alpine is eligible to receive tiered royalties on net sales of ALPN-101. In exchange, AbbVie received an exclusive option to an exclusive license for ALPN-101.
Initiated the first-in-human, Phase 1 Trial of ALPN-202. In June, Alpine announced the first patient had been successfully dosed in its NEON-1 Phase 1 study of ALPN-202, a first-in-class conditional CD28 costimulator and dual checkpoint inhibitor, in advanced malignancies.
Raised $60 Million in a Private Placement. In July, Alpine raised $60 million in gross proceeds through a private placement led by Omega Funds with participation from Avidity Partners, EcoR1 Capital, LLC, Invus Public Equities, L.P., and Samsara BioCapital, among others. Alpine intends to use the net proceeds to fund the development of its clinical and preclinical pipeline as well as for general corporate purposes.
Presented at Multiple Scientific Meetings. From April to June, Alpine made a number of presentations at important scientific conferences including:
ALPN-202 Study Design Presented at AACR (Free AACR Whitepaper) I – "NEON-1: A first-in-human phase I open-label study of ALPN-202, a conditional CD28 costimulator and dual checkpoint inhibitor, in advanced malignancies."
ALPN-202 Additional Preclinical Data at AACR (Free AACR Whitepaper) II – "ALPN-202 combines checkpoint inhibition with conditional T cell costimulation to overcome T cell suppression by M2c macrophages and improve the durability of engineered T cell anti-tumor responses."
Novel Dual BAFF/APRIL Inhibitory Domains (ALPN-303) for B cell Mediated Autoimmune Diseases at EULAR 2020 – "B Cell Modulatory Variant TNF Receptor Domains (vTDs) Identified by Directed Evolution to Inhibit BAFF and APRIL, Alone or Combined with Variant Ig Domains (vIgD) that Inhibit T Cell Costimulation, for the Treatment of Severe Autoimmune and/or Inflammatory Disease."
ALPN-101 Phase 1 Trial Data at EULAR 2020 – "A Double Blind, Placebo Controlled, Single Ascending Dose (SAD) and Multiple Ascending Dose (MAD) Study of ALPN-101, a First-in-Class Dual ICOS/CD28 Antagonist, in Healthy Volunteers (HV)."
"The highlight of Alpine’s second quarter was the signing of a transformative option and license agreement for ALPN-101 with AbbVie. This highly competitive deal provides validation of our scientific approach and our unique Directed Evolution platform," said Mitchell H. Gold, M.D., Executive Chairman and Chief Executive Officer of Alpine. "Importantly, the progression of ALPN-101 is now supported by our AbbVie partnership. Our platform has yielded multiple product candidates in addition to ALPN-101. First among these is ALPN-202, for which we dosed the first patient in our NEON-1 Phase 1 study during the quarter. In addition, we were able to further strengthen our balance sheet via a $60 million private financing, adding a number of high-quality institutions to our shareholder roster. I am very proud of all we have achieved of late and I look forward to further updating you on our progress."

Financial Highlights

As of June 30, 2020, Alpine had cash, cash equivalents, restricted cash, and short-term investments totaling $90.5 million. This balance includes the $60 million upfront cash payment from AbbVie for the option to license ALPN-101, but does not include the $60 million of gross proceeds from our July private placement. Taking the recent private placement into account, we ended July 31, 2020 with $147.5 million in cash, cash equivalents, restricted cash, and short-term investments. This compares to $36.1 million as of March 31, 2020.
Net cash provided by operating activities for the six months ended June 30, 2020 was $44.8 million compared to $19.1 million in net cash used for the same period in 2019.
Alpine recorded a net loss of $9.9 million and $11.9 million for the second quarters ended June 30, 2020 and 2019, respectively, and $15.5 million and $24.2 million for the six months ended June 30, 2020 and 2019, respectively.
Research and development expenses for the second quarter ended June 30, 2020 were $7.1 million compared to $10.2 million for the second quarter ended June 30, 2019. For the first six months of 2020 they were $12.0 million compared to $20.5 million for the same period in 2019.
General and administrative expenses for the second quarter ended June 30, 2020 were $3.3 million compared to $2.6 million for the second quarter ended June 30, 2019, and $5.1 million and $4.9 million for the six months ended June 30, 2020 and 2019, respectively.
Cash Guidance

Taking the recent private placement into account, Alpine ended July 31, 2020 with $147.5 million in cash, cash equivalents, restricted cash, and short-term investments. Alpine expects that its current cash resources, combined with the potential $75 million in pre-option exercise milestones payable under its option and license agreement with AbbVie, for the development and commercialization of ALPN-101, are sufficient to fund Alpine’s planned operations through 2024, including a planned Phase 2 study of ALPN-101 in systemic lupus erythematosus and the further development of ALPN-202 and ALPN-303.

For additional information regarding Alpine’s planned operations, please refer to "Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources" in Alpine’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, which Alpine anticipates filing with the Securities and Exchange Commission on or about August 11, 2020.

Conference Call

Individuals interested in listening to the conference call may do so by dialing (800) 816-3005 for domestic callers, or (857) 770-0069 for international callers, and using the conference ID: 1699961; or from the webcast link in the investor relations section of the company’s website at: www.alpineimmunesciences.com. The recorded webcast will be available for replay for approximately 30 days following the call.

About ALPN-101

ALPN-101 is a novel Fc fusion protein of a human inducible T cell costimulatory ligand (ICOSL) variant immunoglobulin domain (vIgD), a first-in-class therapeutic designed to inhibit simultaneously the CD28 and ICOS inflammation pathways. CD28 and ICOS are closely related costimulatory molecules with partially overlapping roles in T cell activation likely playing a role in multiple autoimmune and inflammatory diseases. In June 2020, Alpine and AbbVie signed an option and license agreement for the development and commercialization of ALPN-101. During the option period, Alpine will conduct a phase 2 study in systemic lupus erythematosus. Upon exercise of the option, AbbVie will conduct all future clinical development, manufacturing, and commercialization activities for ALPN-101.

About ALPN-202

ALPN-202 is a first-in-class, conditional CD28 costimulator and dual checkpoint inhibitor with the potential to improve upon the efficacy of combined checkpoint inhibition while limiting significant toxicities. Preclinical studies of ALPN-202 have successfully demonstrated superior efficacy in tumor models compared to checkpoint inhibition alone. A phase 1 trial of ALPN-202 in advanced malignancies (NEON-1, NCT04186637) is currently enrolling.

About ALPN-303

ALPN-303 is a dual BAFF/APRIL B cell cytokine antagonist under development for the treatment of B cell-mediated inflammatory diseases. BAFF and APRIL are clinically validated targets, and in preclinical studies, ALPN-303 appears to have superior activity compared to other available inhibitors of these pathways, suggesting the potential to be best-in-class. Development activities to enable clinical trials have been initiated.

Sunesis Pharmaceuticals Reports Second Quarter 2020 Financial Results and Recent Highlights

On August 11, 2020 Sunesis Pharmaceuticals, Inc. (Nasdaq: SNS) reported financial results for the second quarter ended June 30, 2020. Loss from operations for the three months ended June 30, 2020 was $6.3 million (Press release, Sunesis, AUG 11, 2020, View Source [SID1234563425]). As of June 30, 2020, cash, cash equivalents and restricted cash totaled $23.2 million. Subsequent to the end of the quarter, the Company raised approximately $12.6 million in net proceeds from an underwritten public offering of its common stock and repaid its outstanding debt.

"We are committing our resources to the development of our first-in-class PDK-1 inhibitor, SNS-510, as we evaluate the path forward for vecabrutinib. In addition, we initiated a review of strategic alternatives to maximize shareholder value that can include in-licensing, partnering, and mergers and acquisitions," said Dayton Misfeldt, Interim Chief Executive Officer of Sunesis. "We also took action to strengthen our financial position by extending our cash runway. In July, we completed a reduction in workforce to right-size the company, we raised $12.6 million through a public equity offering and repaid our outstanding debt with Silicon Valley Bank. We are now well positioned to execute on our objectives."

Recent Highlights

Bolstered Balance Sheet with Completion of Public Offering and Retiring Debt. In July 2020, Sunesis completed an underwritten public offering of shares of its common stock with net proceeds of approximately $12.6 million. Also in July, the Company repaid its outstanding debt with Silicon Valley Bank.

Announced Reduction in Workforce to Streamline Resources. In July, Sunesis announced a reduction in workforce of approximately 30% to right size the organization to achieve its objectives and preserve cash resources.

Announced Review of Strategic Alternatives. In July, the Company announced plans to review strategic alternatives to maximize shareholder value that can include asset in-licensing, partnering, and mergers and acquisitions. There can be no assurance that the strategic review will result in any transaction or other outcome. The Company does not currently intend to publicly discuss or disclose further developments of the strategic review unless and until its Board of Directors has approved a transaction or otherwise determined that further disclosure is appropriate.

Continued program of IND-enabling Activities for its PDK-1 Inhibitor SNS-510. In June 2020, Sunesis announced that it will focus its resources on the development of its first-in-class PDK-1 inhibitor, SNS-510. Preclinical studies of SNS-510 revealed that CDKN2A-mutated tumors are particularly sensitive to SNS-510. CDKN2A alterations are common in human cancers and may prove to be useful biomarkers for broad investigation of SNS-510 as a monotherapy and in combination with other anticancer agents. The Company is currently conducting IND-enabling studies and expects to present additional preclinical findings at a scientific meeting later this year.

This follows the Company’s decision to not advance its non-covalent BTK inhibitor vecabrutinib into the originally planned Phase 2 portion of the Phase 1b/2 trial in adults with BTK inhibitor resistant relapsed/refractory chronic lymphocytic leukemia (CLL) and other B-cell malignancies. Vecabrutinib continues to exhibit an excellent safety profile and showed clinical activity, although this was insufficient to support advancing to the Phase 2 in BTK inhibitor resistant disease. One CLL patient experienced a partial remission and several patients had stable disease for over 6 months.

Financial Highlights

Cash and cash equivalents and restricted cash totaled $23.2 million as of June 30, 2020, as compared to $34.6 million as of December 31, 2019. The decrease of $11.4 million was due to cash used in operating activities, mainly resulting from our net loss of $12.2 million for the six months ended June 30, 2020, partially offset by adjustments for non-cash items of $0.7 million. In July 2020, the Company raised approximately $12.6 million in net proceeds from a common stock public offering.

Revenue was nil and $0.1 million for the three and six months ended June 30, 2020, respectively, and nil for the same periods in 2019. The revenue during the six months ended June 30, 2020 was primarily due to revenue recognized from the upfront payment received under the license agreement with Denovo.

Research and development expense was $4.3 million and $8.0 million for the three and six months ended June 30, 2020, respectively, compared to $3.7 million and $6.9 million for the same periods in 2019. The increase of $0.6 million between the comparable three months periods was primarily due to a $1.1 million increase in professional service expenses related to the progress in the Phase 1b portion of the clinical trial for vecabrutinib. The increase is partially offset by a $0.3 million decrease in salary and personnel expenses due to lower headcount and a $0.2 million decrease in clinical research organizations related expenses. The $1.1 million increase in the comparable six months period was primarily due to a $1.7 million increase in professional services and a $0.1 million increase in clinical expenses related to the progress in the Phase 1b portion of our ongoing clinical trial for vecabrutinib. The increase is partially offset by a $0.7 million decrease in salary and personnel expenses due to lower headcount.

General and administrative expense was $2.1 million and $4.3 million for the three and six months ended June 30, 2020, respectively, compared to $2.5 million and $5.0 million for the same periods in 2019. The decreases between the comparable periods was primarily due to decrease in professional service expenses due to lower patent expenses and decrease in salary and personnel expenses due to lower headcount and less business-related travel.

Interest expense was $0.1 million for each of the three and six months ended June 30, 2020, compared to $0.1 million and $0.4 million for the same periods in 2019, respectively. The decrease in interest expenses in the comparable six months period resulted from lower interest paid due to the lower interest rate on the lower principal amount under the SVB Loan Agreement as compared to the prior loan agreement with Western Alliance Bank and Solar Capital Ltd. in 2019.

Net cash used in operating activities was $11.5 million for the six months ended June 30, 2020, as compared to $13.0 million for the same period in 2019. Net cash used in the six months ended June 30, 2020, resulted primarily from the net loss of $12.2 million, partially offset by adjustments for non-cash items of $0.7 million. Net cash used in the six months ended June 30, 2019, resulted primarily from the net loss of $12.1 million, partially offset by adjustments for non-cash items of $0.9 million and changes in operating assets and liabilities of $1.8 million.
Conference Call Information

Sunesis will host a conference call today at 4:30 p.m. Eastern Time. The call can be accessed by dialing (844) 296-7720 (U.S. and Canada) or (574) 990-1148 (international) and entering passcode 3484194. To access the live audio webcast, or the subsequent archived recording, visit the "Investors and Media – Calendar of Events" section of the Sunesis website at www.sunesis.com. The webcast will be recorded and available for replay on the company’s website for two weeks.

About SNS-510

SNS-510 is a PDK1 inhibitor licensed from Millennium Pharmaceuticals, Inc. ("Takeda Oncology"), a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited. SNS-510 interaction with PDK1 inhibits both PI3K signaling and PIP3-independent pathways integral to many malignancies, and PDK1 can also be overexpressed in breast, lung, prostate, hematologic and other cancers. Evaluation of SNS-510 in the Eurofins Oncopanel, a panel of >300 genomically profiled cancer cell lines from diverse tissue origins, indicated that CDKN2A-mutated tumors are particularly sensitive to SNS-510. CDKN2A alterations are common in human cancers and may prove to be useful biomarkers for broad investigation of SNS-510 as a monotherapy and in combination with other anticancer agents. Sunesis is conducting an Investigational New Drug ("IND")-enabling program for SNS-510.