On November 7, 2019 Oncternal Therapeutics, Inc. (Nasdaq: ONCT), a clinical-stage biopharmaceutical company focused on the development of novel oncology therapies, reported financial results for the third quarter ended September 30, 2019, and provided a business update (Press release, Oncternal Therapeutics, NOV 7, 2019, View Source [SID1234550676]).

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"We are excited about the potential of cirmtuzumab and TK216 in treating multiple types of hematologic and solid tumors, and by the encouraging interim results from our ongoing clinical trials of these product candidates," said James Breitmeyer, M.D., Ph.D., Oncternal’s President and CEO. "We have now rounded out an experienced leadership team with key new hires and are focused on advancing our programs for the benefit of patients with cancer. We look forward to presenting additional interim clinical data for cirmtuzumab in patients with chronic lymphocytic leukemia (CLL), mantle cell lymphoma (MCL) and breast cancer, and for TK216 in patients with Ewing sarcoma, in the fourth quarter of 2019."

Recent Highlights

Opened randomized, Phase 2 clinical trial of cirmtuzumab in patients with CLL – In August, Oncternal announced the opening of a randomized, Phase 2 study of cirmtuzumab, its investigational anti-ROR1 monoclonal antibody, combined with ibrutinib in patients with CLL. The decision to open the Phase 2 portion of this ongoing Phase 1/2 clinical trial was based on favorable outcomes from the dose-finding and dose-confirming cohorts of the trial that included an observed interim objective response rate (ORR) of 100% for the first nine CLL patients with evaluable data receiving the recommended dosing regimen who completed 12 weeks of cirmtuzumab plus ibrutinib treatment in the dose-confirming cohort, and a well-tolerated safety profile consistent with that seen with ibrutinib alone.
Opened Phase 1b expansion cohort of a clinical trial of cirmtuzumab in patients with MCL – In October, Oncternal announced the opening of a Phase 1b expansion cohort of its clinical trial of cirmtuzumab in combination with ibrutinib for the treatment of patients with MCL. The decision to open the expansion cohort in MCL was based on favorable interim results from the dose-finding cohort of the trial, which included complete responses observed in two patients who had failed multiple prior treatment regimens, and the observation that the combination was well-tolerated with a safety profile consistent with that seen with ibrutinib alone.
Reported first sustained objective response in a patient with Ewing sarcoma treated with TK216 in a Phase 1 clinical trial – In September, Oncternal announced the presentation of a case study of a patient with Ewing sarcoma who achieved a sustained response following treatment with TK216, Oncternal’s investigational, targeted ETS oncoprotein inhibitor, in the company’s ongoing Phase 1 clinical trial. The patient, who had metastatic, recurrent Ewing sarcoma, achieved a confirmed objective response following two cycles of TK216 therapy given as a single agent. The response was sustained and continued at six months of treatment, with the patient receiving TK216 and vincristine in subsequent treatment cycles. The final remaining residual tumor nodule was later surgically removed, leading to a surgical complete remission. Treatment with TK216 was well-tolerated by this patient.
Strengthened leadership team – In August and September, Oncternal announced appointments of Frank Hsu, M.D., as Chief Medical Officer, Rajesh Krishnan, Ph.D., as Senior VP, CMC and Manufacturing, Gunnar Kaufmann, Ph.D., as Chief Scientific Officer, and Igor Bilinsky, Ph.D., as Chief Business Officer.
Expected Upcoming Milestones

Cirmtuzumab program
Presentation of additional interim data from the ongoing Phase 1/2 clinical study of cirmtuzumab in combination with ibrutinib in patients with CLL or MCL at the American Society of Hematology (ASH) (Free ASH Whitepaper) 2019 annual meeting in December 2019. The abstract for the presentation, which is entitled, "Cirmtuzumab, a ROR1 Targeted Mab, Reverses Cancer Stemness, and Its Combination with Ibrutinib is Safe and Effective: Planned Analysis of the CIRLL Phase 1/2 Trial for CLL and MCL," is available on the conference website
Presentation of interim data from the ongoing, investigator-sponsored Phase 1 clinical study of cirmtuzumab in combination with paclitaxel in patients with Her2 negative, metastatic or locally advanced unresectable breast cancer in the fourth quarter of 2019
TK216 program
Presentation of interim data from the ongoing Phase 1 clinical study of TK216 in patients with Ewing sarcoma at the Connective Tissue Oncology Society (CTOS) annual meeting in November 2019
ROR1 CAR-T program
Selection of a candidate CAR-T construct for hematologic malignancies in the first half of 2020
Financial Results for the Third Quarter 2019

Oncternal’s grant revenue was $0.5 million for the quarter ended September 30, 2019. The company’s grant revenue is derived from a subaward under a grant from the California Institute for Regenerative Medicine (CIRM) to the University of California San Diego, which was awarded to advance Oncternal’s Phase 1/2 clinical trial evaluating cirmtuzumab in combination with ibrutinib for the treatment of patients with CLL or MCL.

The company’s total operating expenses for the third quarter ended September 30, 2019, were $5.5 million. Research and development expenses for the quarter totaled $3.1 million, and general and administrative expenses for the quarter totaled $2.4 million. Net loss for the third quarter was $4.9 million, or a loss of $0.32 per share, basic and diluted.

As of September 30, 2019, Oncternal had $23.1 million in cash and cash equivalents. The company believes these funds will be sufficient to fund its operations through the second quarter of 2020. As of September 30, 2019, Oncternal had approximately 15.4 million shares of common stock outstanding.

Management Webcast

Oncternal will host a webcast conference today, November 7, 2019, at 2:00 p.m. PST (5:00 p.m. EST) to review quarterly results and provide an update on the company’s development programs. 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.

On November 7, 2019 NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider of life science tools for translational research and molecular diagnostic products, reported the highlights of numerous abstracts demonstrating advances in understanding of immune response and cancer immunotherapy using the nCounter and GeoMx Digital Spatial Profiler (DSP) platforms that will be presented at the 34th Annual Meeting of the Society of Immunotherapy for Cancer (SITC) (Free SITC Whitepaper) (Press release, NanoString Technologies, NOV 7, 2019, View Source [SID1234550675]).

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"Immunotherapy represents one of the most exciting fields for developing breakthrough treatments for cancer," said Brad Gray, president and CEO of NanoString. "We are honored to see the continuing contribution that our nCounter and GeoMx DSP technologies are making toward understanding the mechanism of cancers and the critical role that the immune system plays in predicting patient response."

More than 30 abstracts using NanoString’s nCounter and GeoMx DSP platforms will be presented at the SITC (Free SITC Whitepaper) Annual Meeting, being held Nov. 7–10, 2019, at the Gaylord National Hotel & Convention Center in National Harbor, Md. The research being presented spans a wide breadth of applications, including biomarker development, the study of immune responsiveness and resistance, and digital pathology.

Five studies include the use of NanoString’s GeoMx DSP platform in immuno-oncology research. These abstracts include numbers P3, P24, P30, P126 and P305 that are described below. GeoMx DSP allows for digital quantification of protein and gene expression from discrete regions of FFPE tissue in an automated and multiplex format.

NanoString is currently accepting applications for its Technology Access Program (TAP). To inquire, please e-mail [email protected].

nCounter-based Abstracts

Poster #: P361

Title: Molecular and Immunologic Profiling of CD8+ T Cell Responses in Patients Receiving a Multiple Antigen-Engineered Dendritic Cell Vaccine

Authors: Juraj Adamik, PhD; Patricia M. Santos, PhD; Samuel Du, BS; Lazar Vujanovic, PhD; Timothy Howes; Sarah Warren, PhD; Andrea Gambotto, MD; John M. Kirkwood, MD; Lisa H. Butterfield, PhD

Summary: This study utilized the new CAR-T panel and the PanCancer Immune Profiling panel to understand T cell biology in patients receiving a dendritic cell vaccine

View Source;ABSID=12232&CONF=SITC19&ssoOverride=OFF&CKEY=

Poster #: P123

Title: Identification of mRNA signatures that predict response to immunotherapy in melanoma patients

Authors: Ioannis A. Vathiotis, MD; Amy Sullivan; Sarah Warren, PhD; Nicole Gianino; Sandra Martinez-Morilla, PhD; Pok Fai Wong, MD, MPhil; Harriet Kluger, MD; Konstantinos N. Syrigos; David L. Rimm, MD, PhD

Summary: This study highlights the utility of the nCounter IO360 Gene Expression Panel and Data Analysis Service for biomarker discovery.

View Source;ABSID=12506&CONF=SITC19&ssoOverride=OFF&CKEY=

Poster #: P125

Title: Adenosine and AMP gene expression profiles predict response to adenosine pathway therapies and indicate a need for dual blockade of CD73 and A2AR with CD73 inhibitors

Authors: Stephen Willingham, PhD; Drew Hotson, PhD; Jessica Hsieh; Brian Munneke; Long Kwei, PhD; Joseph J. Buggy; Richard A. Miller, MD

Summary: This study investigates potential biomarkers of response for novel IO agents.

View Source;ABSID=12270&CONF=SITC19&ssoOverride=OFF&CKEY=

GeoMx DSP Abstracts

Poster #: P03

Title: Immune infiltration correlates with TP53 mutational status in a multi-cohort acute myeloid leukemia study

Authors: Sergio Rutella, MD, PhD, FRCPath, Nottingham Trent University, John van Geest Cancer Research Centre and Centre for Health, Ageing and Understanding Disease (CHAUD), Sergio Rutella, MD, PhD, FRCPath, Jayakumar Vadakekolathu, PhD, Stephen Reeder, BS, Jenny Ashforth, Melissa Courtney, Amanda Coutts, PhD, Tressa Hood, MS, Sarah E. Church, PhD, Clare Coveney, PhD, Jan Davidson-Moncada, MD, PhD, Jorn Meinel, MD, Marc Schmitz, MD, Francesco M. Marincola, MD, Martin Bornhauser, MD, Sergio Rutella, MD, PhD, FRCPath

Summary: This study found that P53 mutational status was associated with increase inflammatory gene expression in AML. Additionally, immune infiltrate was evaluated spatially in a subset of samples using GeoMx.

View Source;ABSID=11562&CONF=SITC19&ssoOverride=OFF&CKEY=

Poster #: P24

Title: Molecularly guided digital spatial profiling for highly multiplexed analysis of gene expression with spatial and single cell resolution

Authors: Anushka Dikshit, PhD; Chris Merritt, PhD; Jamie Rose Kuhar, PhD; Karen Nguyen; Kristina Sorg; Bingqing Zhang; Courtney M. Anderson, PhD; Xiao-Jun Ma

Summary: Abstract highlights the combination of RNAscope reagents and GeoMx DSP workflow. Demonstrates that the chemistries perform well when the workflow is combined on a single slide and that data concordance between both technologies is robust.

View Source;ABSID=12091&CONF=SITC19&ssoOverride=OFF&CKEY=

Poster #: P30

Title: Deep Spatial Profiling of the Immune Landscape of MSI and MSS Colorectal Tumors

Authors: Sarah E. Church, PhD; Jason W. Reeves; Daniel R. Zollinger; Jill McKay-Fleisch; Andrew M. White, BSc; Michael D. Bailey; Arya Bahrami, PhD; Chris Merritt, PhD; Margaret Hoang; Sarah Warren, PhD; Joseph M. Beechem, PhD

Summary: Colorectal tumors that were characterized as Microsatellite Stable (MSS) or Microsatellite Instable (MSI) were profiled using IO360 and GeoMx DSP. 60 samples were run on IO360 for bulk gene expression profiling and then profiled using the tumor inflammation signature (TIS) scores, along with MSI status to identify immune hot and cold tumors for further profiling with GeoMx DSP using the new Cancer Transcriptome Atlas assay.

View Source;ABSID=12628&CONF=SITC19&ssoOverride=OFF&CKEY=

Poster #: P126

Title: Discovery of biomarkers associated with benefit from PD-1 checkpoint blockade in non-small-cell lung cancer (NSCLC) using high-plex digital spatial profiling

Authors: Jon Zugazagoitia, MD, PhD, Yale University School of Medicine, Pathology, Jon Zugazagoitia, MD, Swati Gupta, PhD, Kit Fuhrman, MS PhD, Scott N. Gettinger, MD, Roy S. Herbst, MD, PhD, Kurt A. Schalper, MD, PhD, David L. Rimm, MD, PhD

Summary: Digital Spatial Profiling (DSP) technology identifies spatially-resolved protein markers associated with outcome from single-agent PD-1 checkpoint blockade in NSCLC. High levels of CD56 (top tertile) and CD4 (median) measured in the CD45 compartment were the only markers that were predictive for all clinical outcomes, including longer PFS.

View Source;ABSID=12617&CONF=SITC19&ssoOverride=OFF&CKEY=

Poster #: P305

Title: Response to Pembrolizumab and tumor microenvironment composition is associated with IL8 expression in a head and neck squamous-cell carcinoma cohort

Authors: Arun Khattri, PhD; Jason W. Reeves; SuFey Ong; Riyue Bao, PhD; Arya Bahrami, PhD; Yi-Hung Carol Tan, PhD; Andrew M. White, BSc; Michael P. Bailey; Heather A. Brauer, PhD; Sarah Warren, PhD; Joseph M. Beechem, PhD; Tanguy Seiwert, MD

Summary: More than 100 head and neck cancer samples were profiled using IO360. There was a modest association between tumor inflammation signature (TIS) and response. There was also a modest association between IL8 expression and progressive disease (PD) status. Follow-up analysis with GeoMx DSP used ISH staining to guide the selection of IL8+ and IL8- ROIs.

At the 2019 SITC (Free SITC Whitepaper) Annual Meeting, NanoString will showcase its nCounter platform, IO360 and Data Analysis and GeoMx Digital Spatial Profiler at booth #511.

ID

Abstract Title

First Author

Institution

NanoString
Platform

O2

Combining transcriptomic and tissue-based immune biomarkers to improve recurrence prediction in stage II-III melanoma

Robyn Gartrell, MD

Columbia University

nCounter

O3

Immune infiltration correlates with TP53 mutational status in a multi-cohort acute myeloid leukemia study

Sergio Rutella, MD, PhD

Nottingham Trent University

GeoMx DSP

O74

Fibroblast activation protein is expressed by human and murine leukocytes and nonspecific inhibition of FAP enhances anti-PD-1 therapy in murine models of PDAC

Louis Weiner, MD

Georgetown

nCounter

O75

Selective induction of S100a8/a9 heterodimer protein in pancreatic cancer in response to immune selection pressure

Louis Weiner, MD

Georgetown

nCounter

O82

A Phase 1 Dose Escalation Study of PRS-343, a HER2/4-1BB Bispecific Molecule, in Patients with HER2-positive Malignancies

Sarina A. Piha-Paul, MD

MD Anderson Cancer Center

nCounter (IO360)

P123

Identification of mRNA signatures that predict response to immunotherapy in melanoma patients

Ioannis A. Vathiotis, MD

Yale University

nCounter (IO360)

P125

Adenosine and AMP gene expression profiles predict response to adenosine pathway therapies and indicate a need for dual blockade of CD73 and A2AR inhibitors

Stephen Willingham, PhD

Corvus Pharmaceuticals

nCounter

P126

Discovery of biomarkers associated with benefit from PD-1 checkpoint blockade in non-small-cell lung cancer (NSCLC) using high-plex digital spatial profiling

Jon Zugazagoitia, MD, PhD

Yale University

GeoMx DSP

P22

Transcriptomic Characterization of Immune Response within Diverse Tumor Environments using the NanoString nCounter PanCancer IO 360 Assay

Jessica Perez, PhD

NanoString

nCounter (IO360)

P24

Molecularly guided digital spatial profiling for highly multiplexed analysis of gene expression with spatial and single cell resolution

Anushka Dikshit, PhD

Advanced Cell Diagnostics

GeoMx DSP

P260

Characterization of AB154, a Humanized, Non-depleting α-TIGIT Antibody Undergoing Clinical Evaluation in Subjects with Advanced Solid Tumors

Joanne BL. Tan, PhD

Arcus Biosciences

nCounter

P289

Macrophages modulate patient response to immune checkpoint inhibition in a novel lung tumour explant model

Lauren Evans, BSc, MSc

Cardiff University

nCounter IO360

P30

Deep Spatial Profiling of the Immune Landscape of MSI and MSS Colorectal Tumors

Sarah Church, PhD

NanoString

GeoMx DSP, IO360

P305

Response to Pembrolizumab and tumor microenvironment composition is associated with IL8 expression in a head and neck squamous-cell carcinoma cohort

Arun Khattri, PhD

Johns Hopkins Medical Center

GeoMx DSP, IO360

P361

Molecular and Immunologic Profiling of CD8+ T Cell Responses in Patients Receiving a Multiple Antigen-Engineered Dendritic Cell Vaccine"

Juraj Adamik, PhD

Lisa Butterfield, Pitt/PICI

nCounter

P42

An Integrated Multiplexing Approach for the Immunoprofiling of the Tumor Microenvironment of Ovarian Granulosa Cell Tumors

Juncker-Jensen, PhD

NeoGenomics

nCounter (PCIP

P433

Initial results of the phase 1 portion of an ongoing phase 1/2 study of RP1 as a single agent and in combination with nivolumab in patients with solid tumors

Mark R. Middleton, MD, PhD

University of Oxford

nCounter

P454

Induction of serum CXCL10 by tebentafusp, a gp100-CD3 bispecific fusion protein, was associated with survival in uveal melanoma in a Phase I/II Study

Marcus O. Butler, MD

Princess Margaret Cancer Centre

nCounter

P481

Obesity impairs immunotherapeutic efficacy in pre-clinical breast cancer

Justin T Gibson, BS

University of Alabama at Birmingham

nCounter

P485

Synergistic efficacy of anti-PD-L1/IL-15 fusion protein in combination with anti-CTLA-4 antibody in a murine orthotopic 4T1 breast carcinoma model

Stella Martomo, PhD

Kadmon Corporation

nCounter (IO360)

P557

A2bR contributes to adenosine-mediated immunosuppression, which is relieved by the dual A2aR/A2bR antagonist AB928

Daniel DiRenzo, PhD

Arcus Biosciences

nCounter

P583

Building a translational pathway using pharmacodynamic and syngeneic tumour models in conjunction with gene expression to enable the development of cancer immune therapies

Louise Brackenbury, PhD

Charles River Portishead

nCounter (M-IO360)

P634

Predicting radiation-induced immune trafficking and activation in localized prostate cancer

Simon P. Keam

Peter MacCallum Cancer Center

nCounter (PCIP)

P647

Is intracellular STING expression a biomarker for oncolytic herpes virus immunotherapy?

Praveen Bommareddy, MS, PhD

Rutgers University

nCounter

P654

CD137 agonists as an adjunct to immune checkpoint inhibitors to overcome resistance in melanoma

Sreedevi Danturti, PhD

University of Pennsylvania

nCounter (IO360)

P666

Selective activation of antigen presenting cells by exoSTING enhances tumor antigen-specific immune response

Su Chul Jang, PhD

Codiak Biosciences

nCounter

P706

A TCR-CD3 bispecific fusion protein mediates increased presentation of peptide-HLA which associates with improved T cell activation and tumour cell killing

Duncan M Gascoyne, PhD

Immunocore

nCounter

P723

Interleukin-6 blockade to de-couple CTLA-4 blockade colitis from anti-tumor efficacy

Yared Hailemichael, PhD

MD Anderson Cancer Center

nCounter (PCIP)

P740

Leveraging Artificial Intelligence to Advance Immuno-oncology Drug Development using Functional Ex-Vivo 3D-Tumor Organoid Platforms of Fresh Patient Tissue Samples

Jenny Kreahling, PhD

Nilogen Oncosystems

nCounter

P816

DRP-104 Induces Durable Responses In Vivo by Inhibiting Tumor Glutamine Addiction, Remodeling the Tumor Microenvironment and Stimulating Both the Innate & Adaptive Immune Systems

Yumi Yokoyama, PhD

Dracen Pharmaceutical

nCounter

Session 305 Oral

Session 305: SITC (Free SITC Whitepaper) Sparkathon 2018 (SITCure): When is it Safe to Stop Immunotherapy? A Randomized Trial of Early Cessation of Immunotherapy in Patients with Melanoma after 6 Months or More of Stable Disease on Nivolumab Maintenance

Thomas Marron

SITC Sparkathon

nCounter (IO360)

P509

Myeloid Cell-Selective STAT3 Inhibition Sensitizes Head and Neck Cancers to Radiation Therapy and Stimulates T-cell-Dependent Tumor Regression

Marcin Kortylewski, PhD

Beckman Research Institute

nCounter

P521

MEK inhibition enhances oncolytic herpes virus immunotherapy

Praveen Bommareddy, MS, PhD

Rutgers University

nCounter

P532

Increased adiposity reduces the response rate to a combinatorial CTLA-4 based therapy in diet-matched, renal tumor-bearing mice without substantially altering intra-tumoral T cell profiles

William J. Turbitt Jr., PhD

University of Alabama at Birmingham

nCounter

On November 7, 2019 DermTech, Inc. (NASDAQ: DMTK) ("DermTech" or the "Company"), a leader in precision dermatology enabled by a non-invasive skin genomics platform, reported business and financial results as of and for the quarter ended September 30, 2019 and provided a corporate update (Press release, DermTech International, NOV 7, 2019, View Source [SID1234550674]).

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Third Quarter 2019 Business Highlights:

Received Proprietary Laboratory Analyses ("PLA") code (0089U) and favorable crosswalk recommendation to code 0005U by Clinical Diagnostic Laboratory Test Committee ("CDLT")
Signed new agreements for $1.4 million of contract revenue with pharmaceutical partners with the majority of these amounts expected to be recognized as revenue in the fourth quarter
Strengthened the senior leadership team with the hiring of CFO and COO
Continued to expand the commercial team with the hiring of Sr. VP of Payer Access, Director of Managed Care and Payor Contracts and built out the direct sales force
Initiated the TRUST clinical study to further confirm the Pigmented Lesion Assay’s high negative predictive value, through repeat clinical assessment and genomic testing of suspicious lesions after up to two years follow-up
Announced the publication of consensus expert panel recommendations for use for the Pigmented Lesion Assay
Expanded patent portfolio to include PRAME, a key gene in the non-invasive assessment of melanoma using genomics
Presented 1-year Pigmented Lesion Assay real-world registry study data
Third Quarter 2019 Financial Highlights:

Closed Business Combination and PIPE financing to list on The Nasdaq Capital Market, and generated gross cash proceeds of approximately $29 million
Reported assay revenue of $0.4 million, a 20% increase compared to the third quarter of 2018
Reported billable sample volume increase of 18% to 3,596 for the third quarter of 2019 compared to 3,043 for the same period in 2018
Ended the quarter with $21.4 million in cash and cash equivalents
"We spent much of the last quarter building the foundation to scale our commercial operations around our breakthrough Pigmented Lesion Assay for enhanced early melanoma detection. Key areas of success included: completing the business combination and financing, strengthening our senior management team with seasoned executives from the life sciences industry, expanding our payor access team and direct sales force, and establishing our reimbursement code and anticipated price with Medicare. We are off to a strong start as a newly public company and I look forward to a successful year," said John Dobak, M.D., Chief Executive Officer of DermTech.

Third Quarter 2019 Financial Results

Assay revenue increased 20% to $0.4 million for the three months ended September 30, 2019, compared to $0.3 million for the same period of 2018. Total revenues were $0.6 million for each of the three months ended September 30, 2019 and 2018. Contract revenue decreased to $0.2 million for the three months ended September 30, 2019, compared to $0.3 million for the same period of 2018. Contract revenue can be highly variable as it is dependent on the pharmaceutical customers’ clinical trial progress, which can be difficult to forecast due to variability of patient enrollment, drug safety and efficacy and other factors.

Gross margin for the three months ended September 30, 2019 was (38)% compared to (7)% in the same period of 2018. The decrease in gross margin is due to the decrease in contract revenue which produces higher positive gross margins than assay revenue.

Sales and marketing expense increased $1.3 million to $2.0 million for the three months ended September 30, 2019, compared to $0.7 million for the same period of 2018. The increase was primarily attributable to sales force expansion and increased marketing investment.

Research and development expense increased $0.2 million to $0.8 million for the three months ended September 30, 2019, compared to $0.5 million for the same period of 2018. The increase was primarily attributable to higher compensation and recruiting costs related to expanding the research and development team as well as increased laboratory supplies.

General and administrative expense increased $2.4 million to $3.2 million for the three months ended September 30, 2019, compared to $0.8 million for the same period of 2018. The increase was primarily due to additional public company costs, including higher audit and legal costs related to SEC filings in connection with the Business Combination and preparing quarterly financial statements.

Loss from operations was $6.2 million for the three months ended September 30, 2019, which included $0.7 million of non-cash stock-based compensation. We incurred approximately $1.8 million in non-recurring operating costs for the three months ended September 30, 2019, predominantly related to legal fees, Registration Statement filing fees, audit fees and an acceleration of stock-based compensation expense associated with the close of the Business Combination.

Net loss for the three months ended September 30, 2019 was $5.7 million, compared to a net loss of $2.2 million for the same period of 2018.

Cash and cash equivalents totaled $21.4 million as of September 30, 2019.

Closed Business Combination

On August 29, 2019, DermTech completed its business combination with Constellation Alpha Capital Corp. ("Constellation") (the "Business Combination"), a publicly traded special purpose acquisition company prior to the Business Combination. As a result of the Business Combination, the previous DermTech stockholders own a controlling interest in the combined company (the "Company"). Shortly following the completion of the Business Combination, the Company effected a one-for-two reverse stock split of its common stock. DermTech’s Business Combination with Constellation was funded through proceeds received from a private sale of Constellation stock at a split-adjusted price of $6.50 per common share, and cash remaining in Constellation’s trust account after giving effect to stockholder redemptions. As a result of the Business Combination, the Company generated gross proceeds of approximately $29 million, which exceeded the $15 million closing cash requirement previously announced. Participating investors included experienced life sciences investors such as RTW Investments, HLM Venture Partners, Irwin and Gary Jacobs, the founding family of Qualcomm, Inc., and two institutional investors each with over $10 billion in assets under management.

PLA Code Issued

The American Medical Association ("AMA") has issued a PLA Common Procedural Terminology (CPT) code for the DermTech Pigmented Lesion Assay. This PLA code (0089U) was published online with an effective date of July 1, 2019 and is included in the CPT 2020 publication. The CDLT voted nearly unanimously to crosswalk the reimbursement of our code to a currently priced CPT code, 0005U. Final Medicare rate setting for this PLA code is currently in process, with the final fee schedule expected to be published in December 2019. We currently have a draft Local Coverage Determination ("LCD") from MolDX and anticipate that we will have the final LCD policy by year-end. These activities will enable us to establish our coding, coverage, and reimbursement for the Pigmented Lesion Assay with Medicare for dates of service in early 2020 following the receipt of the final LCD.

New Contract Revenue Agreements

During the three months ended September 30, 2019, DermTech entered into $1.4 million of new agreements with two large pharmaceutical companies to support their clinical trials. We expect the majority of these amounts will be recognized as revenue prior to year-end.

New Leadership Hires

In September, the Company announced that Kevin Sun was appointed Chief Financial Officer, Treasurer and Secretary. Mr. Sun brings nearly two decades of corporate finance experience, including debt and equity financings, acquisitions, commercial product launches and infrastructure scaling and expansion projects mostly in the medical device and diagnostic industries. From 2008 to 2018, Mr. Sun served in various executive and management roles for DexCom, Inc., a NASDAQ-listed medical device company, including most recently as Vice President, Corporate Controller and Treasury, Interim Chief Financial Officer, and Vice President, Finance. Prior to DexCom, Mr. Sun held various roles of increasing responsibility at Biosite Incorporated, a NASDAQ-listed leader in rapid point of care diagnostics. Mr. Sun holds a B.S. in Business with a dual major in Accounting and Finance, a minor in Psychology, a Masters in Strategic Management and an MBA from the Kelley School of Business at Indiana University.

In November, Claudia Ibarra started employment as the Company’s Chief Operating Officer. Ms. Ibarra has over 25 years of experience in clinical laboratory operations, in the areas of oncology, immunology and molecular biology. In her leadership roles, she grew and developed the laboratory operations of renowned diagnostic companies to a highly efficient and successful state, with high quality, service level and inspection track records. Before joining DermTech, Ms. Ibarra served as Senior Vice President, Laboratory Operations at Exagen, Director of the molecular oncology laboratory at Genoptix, Inc., where she was also the Molecular Genetic Training Program Coordinator, and other reference clinical laboratories focused on immunology and solid tumors. Ms. Ibarra holds a degree in Biochemistry with specialization in clinical laboratory science from the University of Buenos Aires, Argentina and a California License as Clinical Laboratory Scientist.

Commercial Team Expansion

In November, Dan Visage started employment as the Company’s Senior Vice President of Payor Access. Mr. Visage has over 20 years of health care leadership experience, principally in developing high-performing teams to contract and manage health plan relationships. These include, large national payors, Blues plans, and other large local payors. He has held many diverse leadership roles that give him a unique understanding of the Sales, Marketing, Sales Management, Operations, and Finance functions of a healthcare organization. He most recently was the Vice-President of Managed Care at Progenity and prior to that has held leadership positions at Bio Reference Laboratories / OPKO Health and LabCorp. In each role he has expanded covered lives and obtained coverage for several diagnostic technologies. These include, whole exome sequencing, non-invasive prenatal testing, targeted oncology genomic sequencing, expanded carrier screening genetic testing and a prostate cancer algorithmic test. He also has extensive experience working at various health plans and has held management roles at Florida Blue, Kaiser Permanente and CareCentrix. He has an Accounting degree from Cal State Sacramento, an MBA from the University of Tampa, and is a CPA (inactive).

In September, Chris Murphy started employment as the Company’s Director of Managed Care and Payor Contracting. Mr. Murphy has over 15 years of leadership experience across the legal, consulting, and healthcare industries. Within healthcare, Mr. Murphy has worked with niche-product/service providers in the areas of durable medical equipment, cardiac diagnostics, post-acute care, and home dialysis. In these roles, he has deployed effective contracting and business strategies and collaborated with large national payors, Blues plans, and other large local payors, in which he expanded market access and established mutually beneficial processes with the payor partner. Mr. Murphy also has extensive operational experience in the areas of reimbursement, compliance and sales management. Before joining DermTech, Mr. Murphy served as the Director of Revenue Cycle at Fresenius Medical Care, Director of Revenue Management at NxStage Kidney Care, and Manager, Contracts at ZOLL Services. Mr. Murphy holds a B.A. in History from the University of Wisconsin, and a J.D. from the UIC John Marshall Law School in Chicago, Illinois.

During the third quarter we continued to increase our direct sales force from 7 sales reps at the beginning of the year to 23 sales reps as of the beginning of the fourth quarter. All sales reps have significant experience direct selling and launching new products in dermatology. In preparation for our anticipated LCD from Medicare, territory locations for hiring were determined by assessing Medicare procedure volumes for melanoma surgical biopsies.

Initiated TRUST Clinical Study

The TRUST study is the first of its kind for the Company to provide repeat clinical assessments and genomic testing on pigmented lesions suspicious for melanoma that were initially tested negative with the Pigmented Lesion Assay. This study will further confirm the high negative predictive value of the Pigmented Lesion Assay (>99%), by examining the long-term clinical behavior of pigmented lesions initially determined to be negative for melanoma after testing with the Pigmented Lesion Assay. The study will perform the repeat assessment and testing 1 to 2 years following the initial test. We expect the results to be available in 2020.

Inclusion in Clinical Management Recommendations

In October, the Company announced its inclusion in Clinical Management Recommendations, "Appropriate Use Criteria for the Integration of Diagnostic and Prognostic Gene Expression Profile Assays into the Management of Cutaneous Malignant Melanoma: An Expert Panel Consensus-Based Modified Process Assessment" published in the September issue of SKIN. A panel of dermatologists and dermatopathologists with expertise in pigmented lesions, melanoma, and gene expression technology evaluated commercially available gene expression tests and recommended use of DermTech’s non-invasive Pigmented Lesion Assay, or 2-Gene Expression Profile test, in cases in which patients present with atypical lesions requiring additional assessment beyond visual inspection in order to inform the decision to surgically biopsy. This recommendation closely aligns with the previously published utility data on the Pigmented Lesion Assay (Ferris et al., Melanoma Research, 2018), which found that clinicians appropriately biopsied all Pigmented Lesion Assay positive lesions while managing 99% of Pigmented Lesion Assay negative lesions with surveillance and without surgical biopsies.

Expanded Patent Portfolio

In October, the Company announced the issuance of a patent, US 10,407,729, to further expand the Company’s intellectual property and leadership position. This patent is entitled "Diagnosis of melanoma by nucleic acid analysis" and includes claims in connection with DermTech’s technology to non-invasively obtain genomic information for characterizing skin lesions. The patent includes claims related to using expression levels of PRAME (also known as preferentially expressed antigen in melanoma, which is overexpressed in this type of cancer) to differentiate melanoma from non-melanoma skin samples obtained via the company’s adhesive patch-based sample collection platform. DermTech has discovered that PRAME is a key gene in the non-invasive assessment of melanoma using genomics.

Presentation of 1-Year Pigmented Lesion Assay Registry Study Data

In August, the Company presented 1-year Pigmented Lesion Assay registry data on 3,418 real-world cases from 53 US-based sites at the ‘Practical Symposium,’ an annual well recognized dermatology conference held in Beaver Creek, CO. The Pigmented Lesion Assay reduced avoidable biopsies by over 90%. Pigmented Lesion Assay positive cases were surgically biopsied 98% of the time and Pigmented Lesion Assay negative cases were clinically monitored and not surgically biopsied in over 99%. Clinicians follow the guidance of the Pigmented Lesion Assay.

On November 7, 2019 AvantGen, Inc., a biotechnology company with its array of technology platforms for antibody discovery, optimization, and novel NK cell engager generation, reported a strategic collaboration with an undisclosed biopharmaceutical company for the purpose of generating multiple novel bi-specific NK cell engaging therapeutic antibody product candidates (Press release, AvantGen, NOV 7, 2019, View Source [SID1234550673]).

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Under the terms of the agreement, AvantGen will be responsible for engineering bi-specific variants of specified molecules using its proprietary NK cell engager platform and the biopharmaceutical company’s antibodies against a novel disease target. The biopharmaceutical company will receive worldwide rights on an exclusive basis with respect to its proprietary target to develop and commercialize product candidates arising from the collaboration. AvantGen receives upfront payments and is eligible to receive milestone payments and royalties associated with the development and sale of any products derived from the collaboration.

"We are pleased to collaborate with a team of talented leaders in the field of immuno-oncology to generate a novel class of anti-cancer molecules with superior efficacy. Our cutting-edge NK cell engager platform is comprised of binders that are exquisitely specific for CD16a, an activating receptor expressed on NK cells, but do not cross-react with the highly homologous CD16b receptor which is expressed on neutrophils. These attributes are intended to greatly enhance desirable NK cell-mediated antibody dependent cellular cytotoxicity (ADCC) activity against cancer cells while minimizing the undesirable inhibitory effects of neutrophil-mediated ADCC functions," said Xiaomin Fan, Ph.D., founder and president of AvantGen. Dr. Fan continued, "Our platform is further differentiated by designing the NK cell engagers to activate NK cells only in the presence of cancer cells that are recognized by the tumor targeting moiety of the engager and in a manner that is not affected by high concentrations of human IgG. We welcome the opportunity to generate novel product candidates for our biopharmaceutical company partner under this collaboration, and look forward to entering similar arrangements with others on a cancer target-exclusive basis."

On November 7, 2019 Tizona Therapeutics, Inc., a clinical stage, privately held company developing first-in-class cancer immunotherapies, reported the online publication of an article in Cancer Discovery describing novel mechanisms to more potently modulate the adenosine pathway and activate anti-tumor immune responses using antibodies that block CD39 (Press release, Tizona Therapeutics, NOV 7, 2019, View Source [SID1234550672]).

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The paper, "Targeting CD39 in Cancer Reveals an Extracellular ATP and Inflammasome-driven Tumor Immunity", found that blocking CD39 enzymatic activity with an anti-CD39 antibody facilitated immune cell infiltration into T cell-poor tumors and rescued anti-PD-1 resistance. This activity was shown to be mediated by ATP’s signaling of the P2X7 receptor and consequent stimulation of the inflammasome. Stimulating inflammasome-driven anti-tumor immunity through the preservation of ATP coupled with preventing the production of immune suppressive adenosine is only achieved through targeting CD39.

TTX-030, a first-in-class anti-CD39 antibody discovered at Tizona, is currently being evaluated in collaboration with AbbVie in a Phase 1/1b clinical study as a monotherapy and in combination with an approved anti-PD-1 agent and standard chemotherapy in adults with advanced cancer (NCT03884556).

"Targeting CD39 is a promising approach to modulate the adenosine pathway within the tumor microenvironment to both stimulate the immune system and counter immune suppression," said Scott Clarke, CEO of Tizona. "This paper provides additional evidence that CD39 is a key immune regulatory switch in the TME, and we are excited to develop TTX-030, our first-in-class anti-CD39 antibody, with the potential to transform outcomes for people with cancer."

About TTX-030, the Adenosine Axis, and the Tumor Microenvironment

TTX-030 is a monoclonal antibody that inhibits the activity of CD39, a cell surface enzyme upregulated on tumors, exhausted T cells, as well as many suppressive cell types. It catalyzes the conversion of ATP to AMP, the first step in the generation of adenosine. By blocking the action of CD39, TTX-030 prevents the formation of immune suppressive extracellular adenosine, which would otherwise inhibit effector cells in the TME. In addition to preventing the formation of suppressive adenosine, TTX-030 also prevents the degradation of ATP, preserving ATP’s ability to stimulate dendritic and myeloid-derived cells responsible for innate immunity and the immune cell priming necessary for adaptive immunity.