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Vaxart Announces Fourth Quarter and Full Year 2019 Financial Results and Provides Corporate Update

On March 19, 2020 Vaxart, Inc., a clinical-stage biotechnology company developing oral recombinant vaccines that are administered by tablet rather than by injection, reported financial results for the fourth quarter and full year ended December 31, 2019, and provided a corporate update (Press release, Vaxart, MAR 19, 2020, View Source [SID1234555707]).

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"SARS CoV-2, the coronavirus that causes COVID-19, is primarily transmitted by viral particles that enter through the nose, mouth or eyes, and cause a respiratory infection," said Wouter Latour, MD, chief executive officer of Vaxart Inc. "Unlike injectable vaccines, our oral vaccines have been shown to protect against respiratory infection based on mucosal immunity, the first line of defense for such infections. This could be essential for an effective vaccine that protects the population from COVID-19. In addition, the Vaxart vaccine would be administered using a room temperature-stable tablet, an enormous logistical advantage in large vaccination campaigns."

"This outbreak is a call to duty for all of us here at Vaxart and we are highly focused on the development of the COVID-19 vaccine," Dr. Latour continued. "Accordingly, we have put several vaccine programs on hold, including the norovirus vaccine program for which we recently successfully completed a Phase 1 study and for which we are actively seeking a development partner, as well as our therapeutic HPV vaccine program. The Janssen-partnered Universal Flu program is fully active and on track to be completed in the coming weeks."

All Vaxart vaccines are based on its oral Vector-Adjuvant platform, VAASTTM. In a recent clinical study published in the Lancet Infectious Diseases, the Company demonstrated that the Vaxart oral H1 influenza tablet vaccine primarily protected against infection based on mucosal immunity, in contrast to the injectable flu vaccine that protected primarily through systemic immunity.

In January, Vaxart initiated a program to develop a coronavirus vaccine candidate based on its VAASTTM platform and is currently producing multiple research grade COVID-19 vaccine candidates to be evaluated in a preclinical model. In addition, Vaxart announced this week that it had entered into an agreement with Emergent BioSolutions Inc. Per the agreement, development services are to begin immediately and upon Vaxart’s election, Emergent is expected to produce bulk cGMP vaccine in time for a Phase 1 clinical study to begin early in the second half of 2020.

Other Corporate Updates:

The Universal Influenza vaccine collaboration with Janssen is proceeding as planned and remains on schedule to provide results in 1H 2020, barring delays due to the Coronavirus outbreak.

Published results from the H1 seasonal influenza oral tablet vaccine challenge study in the Lancet Infectious Diseases. The study demonstrated that Vaxart’s oral tablet influenza vaccine generated a 39 percent reduction in clinical disease relative to placebo, compared to a 27 percent reduction by Fluzone. It also reduced infection rates by 47 percent, compared to 43 percent by Fluzone.

Restructured the manufacturing and process development departments resulting in, among other things, a reduction in headcount.

Raised approximately $9.8 million in net proceeds from the exercise of Warrants during the first quarter of 2020 to date.

Completed a registered direct offering in March 2020, through which Vaxart raised aggregate gross proceeds of $10.0 million from the sale of 4.0 Million shares of common stock and warrants to purchase 2.0 million shares of common stock that are exercisable for $2.50 per share.

Regained compliance with the continuing listing standards of The Nasdaq Capital Market.

Financial Results for the Three Months Ended December 31, 2019

Vaxart reported a net loss of $6.4 million for the fourth quarter of 2019 compared to $4.9 million for the fourth quarter of 2018. The principal reason for the increase was a charge of $4.9 million for restructuring, partially offset by an increase in revenue and a reduction in research and development expenditure.

Revenue for the quarter was $3.9 million compared to $1.8 million in the fourth quarter of 2018. The increase was mostly due to non-cash royalty revenue related to the sale of future royalties.

For the quarter ended December 31, 2019, royalty revenue from Inavir increased by $2.2 million, or 148%, compared to the quarter ended December 31, 2018.

Financial Results for the Full Year 2019

Vaxart reported a net loss of $18.6 million for 2019 compared to $18.3 million for 2018. The principal reason for the increase was the absence of a bargain purchase gain of $6.8 million, partially offset by an increase in revenue of $5.7 million.

Revenue for the year was $9.9 million compared to $4.2 million in 2018. The increase was mostly due to $3.5 million of 2018 revenue having been recorded in the pre-Merger period of January 1-February 13, 2018 and increased royalty revenue from Inavir in the fourth quarter of 2019.

Research and development expenses were $14.5 million for 2019 compared to $17.3 million for 2018. The decrease was mainly due to the absence of clinical trials costs for teslexivir and HHS BARDA contract costs and a reduction in pre-clinical research costs, partially offset by higher manufacturing and clinical trial costs incurred in Vaxart’s norovirus program.

General and administrative expenses were $6.2 million for the year compared to $6.7 million for 2018. The decrease was mainly due to reductions in legal fees and other costs associated with becoming a public company.

Other operating expenses were $4.9 million for 2019 due to restructuring costs related to the suspension of Vaxart’s manufacturing operations, compared to $2.0 million for 2018, which related to the impairment of intangible assets related to teslexivir and the sublease of Vaxart’s premises in Georgia.

Vaxart ended the year with cash and cash equivalents of $13.5 million compared to $11.5 million at December 31, 2018. The increase was primarily due to funds raised via issuances of equity totaling $19.8 million during 2019, partially offset by cash used in operations totaling $13.1 million and the repayment of debt for $3.8 million.

Corporate Presentation

On March 19, 2020 MorphoSys Presented the Corporate Presentation (Press release, MorphoSys, MAR 19, 2020, View Source [SID1234556369]).

NIH study provides genetic insights into osteosarcoma in children

On March 19, 2020 National Cancer Institute (NCI), part of the National Institutes of Health, reported that offers new insight into genetic alterations associated with osteosarcoma, the most common cancerous bone tumor of children and adolescents (Press release, US NIH, MAR 19, 2020, View Source [SID1234555739]). The researchers found that more people with osteosarcoma carry harmful, or likely harmful, variants in known cancer-susceptibility genes than people without osteosarcoma. This finding has implications for genetic testing of children with osteosarcoma, as well as their families.

The study was published March 19, 2020, in JAMA Oncology.

"With this study, we wanted to find out how many people with osteosarcoma may have been at high risk for it because of their genetics," said Lisa Mirabello, Ph.D., of NCI’s Division of Cancer Epidemiology and Genetics (DCEG), who led the research. "We not only learned that at least a quarter of the people in the study with osteosarcoma had a variant in a gene known to predispose someone to cancer, we also uncovered variants that had never before been associated with this cancer."

In the study, the researchers looked for harmful (or likely harmful) variants in 238 known cancer-susceptibility genes in DNA samples from 1,244 people with osteosarcoma and compared the frequency of such variants with that in people in a cancer-free control group. They identified a harmful or likely harmful variant in a known cancer-susceptibility gene in 28% of the people with osteosarcoma. By contrast, only 12% of people in the cancer-free control group had such a variant.

When the authors looked at a subset of 166 genes that are known to be inherited in an autosomal dominant fashion—that is, where inheriting one alteration from one parent is sufficient to increase cancer risk—they saw harmful or likely harmful variants in about 18% of the patients but only 5% of controls. And another 25% of the patients had a rare variant of uncertain significance that was predicted to be harmful.

Patients who had harmful variants were younger at age of osteosarcoma diagnosis, on average, than patients who did not (15.3 years versus 16.9 years). In addition, the youngest children in the study (ages 0-10 years) had the highest prevalence of harmful variants.

If a child is found to have a gene variant associated with osteosarcoma, the authors say that genetic testing may be warranted for the child’s family members, who may also carry the variant. Family members who have the variant could undergo screening for the cancers associated with that variant, potentially leading to earlier detection.

"The idea is, if you have a new patient with osteosarcoma, we found that a quarter of them have a [harmful] variant in a gene associated with increased risk of other cancers," said Sharon Savage, M.D., senior author of the study, also of DCEG. "Genetic testing of the patient likely makes sense, because they could be at risk of other cancers, and they might have family members who carry the variant who might be at risk of other cancers."

Because osteosarcoma is a rare cancer, the researchers assembled case samples from 10 international research centers, making this the largest collection to date of a pediatric solid cancer evaluated for cancer-susceptibility gene variants.

The researchers found harmful or likely harmful variants in several cancer-susceptibility genes that hadn’t been associated with osteosarcoma—or, indeed, pediatric cancers—before. Because the biological function for the variants newly found to be associated with osteosarcoma remain unknown, this could open new areas of research related to cancer susceptibility.

This study is part of a larger pediatric cancer susceptibility research program at NCI through which researchers are studying common and rare causes of osteosarcoma and other pediatric cancers. In earlier research, Dr. Mirabello found that TP53 gene variants, which are associated with the cancer predisposition disease Li-Fraumeni Syndrome, were more common than previously thought in children and adolescents with osteosarcoma. In the current study, TP53 gene variants had the highest frequency of the harmful or likely harmful cancer-susceptibility gene variants in children with osteosarcoma, another finding that Dr. Mirabello said warrants additional research.

Scientists identify factors for predicting which patients with ovarian cancer won’t benefit from immunotherapy-PARP inhibitor combination

On March 19, 2020 Dana-Farber Cancer Institute reported that In patients with advanced ovarian cancer, a combination of drugs known as immune checkpoint inhibitors and PARP inhibitors can produce powerful remissions, clinical trials have shown, but up until now investigators haven’t been able to predict which patients won’t benefit from the treatment and should explore other options (Press release, Dana-Farber Cancer Institute, MAR 19, 2020, View Source [SID1234555738]). A new study by Dana-Farber Cancer Institute researchers, is showing that it’s now possible to identify such patients in advance.

The study, published online today by Nature Communications, will help investigators testing this combination direct such patients to trials that may have a better chance of helping them.

The study authors found that two factors – a specific pattern of gene mutations in the tumor cells and evidence of a vigorous immune response to the cancer – are markers of whether patients will respond to the combination therapy. Patients whose tumor tissue had either of these features were more likely to have their disease held in check for an extended period of time, whereas those whose tissue lacked either feature showed no benefit from the drug combination.

"By taking these factors into account, researchers leading trials of this combination in patients with advanced, chemotherapy-resistant ovarian cancer may select individuals who may respond to this combination of drugs," says Panagiotis Konstantinopoulos, MD, PhD, director of translational research, Gynecologic Oncology, at Dana-Farber, the co-senior author of the study with Alan D. D’Andrea, MD, director of Dana-Farber’s Susan F. Smith Center for Women’s Cancers.

While checkpoint inhibitors – which strip tumors of certain protections against an attack by the immune system – work exceptionally well in many types of cancer, ovarian cancer has been an exception. The PD-1 checkpoint inhibitor pembrolizumab, for example, produces responses in less than 5% of patients with PD-L1-negative cancers. The same is true of PARP inhibitors, which undermine cancer cells by reducing their ability to repair DNA damage. As a single agent, the PARP inhibitor niraparib has a beneficial effect in just 3% of patients with ovarian cancer that is resistant to platinum-based chemotherapy and isn’t BRCA-mutated.

When checkpoint and PARP inhibitors are used together, however, those benefits multiply. The TOPACIO/Keynote-162 clinical trial led by Konstantinopoulos found that the pembrolizumab-niraparib combination produced complete or partial responses – total or limited shrinkage of ovarian tumors – in 18% of patients with platinum-resistant ovarian cancer. Furthermore, 65% of the study participants had their disease kept under control. For some of those who responded, the benefits lasted for well over a year. The results were especially impressive because all the participants had received multiple previous treatments for ovarian cancer, making them especially hard to treat.

Encouraging as these findings were, study leaders had no way to determine, in advance, which participants wouldn’t be helped by the therapy. To see if they could be identified, Konstantinopoulos and his colleagues conducted two analyses of participants’ tumor samples: a letter-by-letter search of the tumor cells’ genome for abnormalities, and a census of "exhausted" immune system T cells within the tumor tissue. (T cells are said to be exhausted when they are primed to attack tumor cells but fail to do so. Tumors containing large numbers of such T cells can be especially vulnerable to checkpoint-inhibiting drugs.) The researchers then correlated their findings with information on whether, and how extensively, patients responded to the combination therapy.

They found that patients whose tumor cells carried either "mutational signature 3" (a pattern of gene mutations associated with an inability to repair certain kinds of DNA damage) or a "positive immune score" (a measure of signaling activity between tumor cells and the immune system) may derive a benefit from the pembrolizumab-niraparib combination. Patients whose cells lacked either of these features received no such benefit.

"Patients with advanced or metastatic ovarian cancer who are resistant to standard platinum-based chemotherapy agents often have few further options for treatment," Konstantinopoulos remarks. "Our findings will help ensure that patients for whom a PARP inhibitor-checkpoint inhibitor combination won’t be beneficial can focus on other clinical trials of treatments that may be more effective for them."

The co-first authors of the study are Anniina Färkkilä, MD, PhD, of Dana-Farber; Doga Gulhan, PhD, of Harvard Medical School; and Julia Casado, MS, of the University of Helsinki. Co-authors are Huy Nguyen, MS, Bose Kochupurakkal, PhD, Dipanjan Chowdhury, PhD, Geoffrey I. Shapiro, MD, PhD, Ursula A. Matulonis, MD, and Peter J. Park, PhD, of Dana-Farber; Connor A. Jacobson, Zoltan Maliga, PhD, Clarence Yapp, DPhil, Yu-An Chen, MS, Denis Schapiro, PhD, and Peter K. Sorger, PhD, of Harvard Medical School; Yinghui Zhou, PhD, Julie R. Graham, PhD, and Bruce J. Dezube, MD, of TESARO, Waltham, Mass.; Pamela Munster, MD, of the Helen Diller Family Comprehensive Cancer Center, San Francisco, Calif.; Sandro Santagata, MD, PhD, Elizabeth Garcia, PhD, Scott Rodig, MD, PhD, and Ana Lako, of Brigham and Women’s Hospital; Sampsa Hautaniemi, DTech, of the University of Helsinki; and Elizabeth M. Swisher, MD, of the University of Washington.

The study was supported by a grant from Stand Up to Cancer, the Ovarian Cancer Research Fund, TESARO, GSK Company, and Merck & Co.

Tarveda Therapeutics and SciClone Pharmaceuticals International Establish Licensing Agreement for PEN-866 in Greater China

On March 19, 2020 Tarveda Therapeutics, Inc. ("Tarveda"), a clinical stage biopharmaceutical company developing a new class of potent and selective precision oncology medicines, which it refers to as Pentarin miniature drug conjugates, for the treatment of patients with various solid tumor malignancies, and SciClone Pharmaceuticals International Ltd., ("SciClone") reported that they have entered into a licensing agreement for PEN-866, the initial clinical program from Tarveda’s HSP90 binding miniature drug conjugate platform, which is designed to bind to the activated form of Heat Shock Protein 90 (HSP90) to accumulate and release its potent topoisomerase 1 inhibitor (SN-38) payload in solid tumors (Press release, Tarveda Therapeutics, MAR 19, 2020, View Source [SID1234555737]).

Under the terms of the agreement, SciClone will obtain exclusive licensing rights to co-develop and commercialize PEN-866 in the Greater China territory, including mainland China, Hong Kong, Macau and Taiwan. SciClone will be responsible for development, product registration and commercialization in these territories. Per the agreement, SciClone will pay Tarveda an upfront payment of U.S. $4 million with the right to make a future equity investment in Tarveda of up to U.S. $5 million. Tarveda will be eligible to receive up to $75 million in aggregate development, approval and commercial sales milestone payments. Tarveda is also eligible to receive royalties based on sales in the Greater China territory. Shanghai Yafo Capital Asset Management Co., Ltd acted as banking and financial advisor on this transaction for Tarveda.

"We are excited to partner with SciClone, a leading specialty pharmaceutical company with valuable experience developing and commercializing oncology and infectious disease products in Greater China that shares our dedication to advancing PEN-866," said Drew Fromkin, President and Chief Executive Officer of Tarveda. "We have completed Phase 1 clinical trials for PEN-866 and look forward to working closely with SciClone as PEN-866 moves into the later phases of its development. With SciClone’s experienced team and broad knowledge related to bringing drugs to commercialization in the Greater China region, we are confident that we have found an excellent partner to help advance PEN-866 in China."

"Tarveda’s HSP90 binding miniature drug conjugate platform offers a promising approach to the development of precision oncology medicines," said Hong Zhao, President and Chief Executive Officer of SciClone. "We are pleased to partner with the Tarveda team to develop and commercialize PEN-866, the first clinical program from Tarveda’s HSP90 binding miniature drug conjugate platform, in the Greater China region."

PEN-866 is a miniature drug conjugate that preferentially binds to the activated form of HSP90 in solid tumors and is linked to the topoisomerase 1 inhibitor (SN-38), a potent anti-cancer payload. PEN-866 is designed to accumulate and be retained in tumors. As the SN-38 payload is cleaved in the tumor over time, the sustained release of SN-38 in the tumor results in prolonged DNA damage and tumor regressions as demonstrated in multiple patient-derived and other xenograft tumor models. PEN-866 has recently completed the Phase 1, all-comers, dose escalation and safety portion of its Phase 1/2a clinical trial. PEN-866 is the first miniature drug conjugate from Tarveda’s HSP90 binding drug conjugate platform.

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Important Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the proposed transaction between Organovo Holdings, Inc. ("Organovo") and Tarveda. In connection with the proposed transaction, Organovo has filed relevant materials with the SEC, including a registration statement on Form S-4 that contains a proxy statement/prospectus/information statement, which was declared effective on February 24, 2020. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND STOCKHOLDERS ARE URGED TO READ THESE MATERIALS CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Stockholders may obtain, free of charge, copies of the definitive proxy statement and any other documents filed by Organovo with the SEC in connection with the proposed transactions at the SEC’s website (View Source) and at Organovo’s website (www.organovo.com).

Organovo and its directors and executive officers and Tarveda and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Organovo in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the merger is included in the proxy statement/prospectus/information statement referred to above. Additional information regarding the directors and executive officers of Organovo is included in Organovo’s Definitive Proxy Statement on Schedule 14A relating to the 2019 Annual Meeting of Stockholders, filed with the SEC on July 26, 2019. This document is available free of charge at the SEC website (www.sec.gov) or at Organovo’s website (www.organovo.com).