On December 8, 2016 PellePharm, a clinical-stage biopharmaceutical company committed to developing patidegib, a topical hedgehog inhibitor to treat basal cell carcinomas (BCCs), including those in Gorlin Syndrome, a devastating orphan disease, reported its launch with financing from BridgeBio Pharma (Press release, BridgeBio, DEC 8, 2016, View Source [SID1234527852]). This financing supports the development of topical patidegib through the completion of two phase 2 clinical trials that are underway, including a clinical trial in Gorlin Syndrome that just completed enrollment. In addition, the company has a drawable pool of capital from BridgeBio Pharma that enables it to finance future clinical trials through registration.

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PellePharm was founded by a team of globally recognized experts in dermatology, oncology and hedgehog signaling and is managed by a team of industry experts. The company is dedicated to finding an effective therapy to manage the extensive tumor burden in Gorlin Syndrome, a rare genetic disease that causes patients to develop multiple BCCs. Gorlin Syndrome affects about 10,000 people in the United States and 15,000 people in the European Union. The disease results from a mutation in a tumor-suppressor gene, which acts as the primary inhibitor of the hedgehog signaling pathway. PellePharm’s founders developed a topical gel formulation of a proprietary hedgehog inhibitor that it exclusively licensed from Infinity Pharmaceuticals to help mitigate certain adverse events observed with oral hedgehog inhibitors.

"It made sense that a potent inhibitor of the hedgehog pathway should provide a therapeutic benefit for patients suffering from Gorlin Syndrome, but we needed an approach that would allow us to target the disease at its source without eliciting harmful toxicity reactions," said Ervin Epstein, M.D., co-founder of PellePharm. "We are hopeful that patidegib will provide the balance of targeted treatment without the adverse events associated with oral formulations."

PellePharm’s approach attracted the attention of industry veterans Mark de Souza, Ph.D. and Karl Beutner, M.D., Ph.D. who joined the team. "It’s not often that you find a program as attractive as PellePharm’s patidegib," said de Souza, executive chairman of PellePharm. "This investigational treatment has the potential to address a very high unmet need among patients with Gorlin Syndrome, whose current standard of care is to undergo multiple surgeries each year to manage their symptoms. We know that hedgehog pathway inhibitors have therapeutic potential for this condition, and we believe PellePharm’s topical formulation may offer a truly effective treatment option for these patients."

PellePharm is currently conducting two double-blinded, placebo-controlled, randomized, phase 2 clinical trials that are evaluating the safety, tolerability and effect of topical patidegib on both pre-existing tumors and the frequency of the development of new tumors. A U.K.-based study is evaluating 18 patients with Gorlin syndrome to determine whether the product shrinks the tumors present at the beginning of the study and reduces the number of new tumors that develop during the trial. A U.S.-based study is evaluating 36 patients with sporadic BCCs to determine whether tumor diameter decreases after 12 weeks of treatment. Both studies also will evaluate safety and tolerability, as well as a biomarker (GLI-1) of hedgehog signaling. Enrollment in the U.K. trial is complete and topline data is expected in the second quarter of 2017.

"PellePharm is really at the intersection of precision oncology and monogenic dermatology – these are the types of assets we look for at BridgeBio Pharma," said Frank McCormick, investment committee member of BridgeBio Pharma and board member of PellePharm. "Gorlin Syndrome is a well-researched disease that can be treated directly at its source. We have had the privilege of knowing the founding and operating team of PellePharm for years and look forward to working with them to bring patidegib to patients in need."

Founders and Scientific Advisory Board Members
PellePharm was founded by a group of globally recognized experts in dermatology, oncology and hedgehog signaling who continue to lend expertise and counsel to the PellePharm management team. Founders and scientific advisory board members include:

Philip Beachy, Ph.D., professor of biochemistry and developmental biology, Stanford University
Ervin Epstein, M.D., senior scientist, Children’s Hospital of Oakland Research Institute
Jean Tang, M.D., Ph.D., associate professor of dermatology, Stanford University
About Basal Cell Carcinomas (BCCs) and Gorlin Syndrome
Basal cell carcinomas (BCCs) are a type of skin cancer that begins when one of the skin cells spontaneously develops a mutation in its DNA, usually due to UV radiation (sunlight, tanning lamps). They commonly occur in sun-exposed areas like the face and neck and generally in people of European descent with lighter skin and in the elderly and in people with chronic sun exposure. There are more than four million BCCs diagnosed in the United States each year. BCCs are usually treated with surgery, which can leave disfiguring scars.

Gorlin Syndrome, also known as nevoid basal cell carcinoma syndrome, is a rare genetic disease where patients develop many BCCs. Patients with Gorlin Syndrome have heritable mutations in the tumor suppressor gene encoding Patched1 (PTCH1), which acts as the primary inhibitor of the hedgehog signaling pathway; this leads to hundreds of BCCs, especially on the face and sun-exposed areas. The standard of care is surgery, as there are no FDA-approved drugs for Gorlin Syndrome. Individuals who have severe Gorlin Syndrome have as many as 30 surgeries per year, many of which can be scarring.

On December 8, 2016 OncoSec Medical Incorporated ("OncoSec") (NASDAQ: ONCS), a company developing DNA-based intratumoral cancer immunotherapies, reported financial results for the fiscal first quarter 2017 (Press release, OncoSec Medical, DEC 8, 2016, View Source [SID1234517020]).

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"We are delivering on our commitment to address an unmet medical need in melanoma with ImmunoPulse IL-12. We are pleased with the early clinical response data presented from the melanoma combination trial, and we are focused on advancing our lead program – ImmunoPulse IL-12 – in anti-PD-1 non-responder advanced melanoma patients. Based on our current cash runway, we are positioned to meet our value-driving clinical and regulatory milestones into calendar 2018 and have a clear strategy to expand our therapeutic platform," noted Punit Dhillon, OncoSec President and Chief Executive Officer. "Our primary focus for the next year is to initiate a melanoma registration-directed clinical study. We believe we will generate meaningful data in 2017 and 2018 to support the discussions with the FDA and a future biologics license application (BLA) to attract a partner, who is ready to advance this innovative therapy."

FINANCIAL RESULTS
For the first quarter of fiscal 2017, OncoSec reported a net loss of $5.6 million or $0.29 per share, compared to a net loss of $7.0 million, or $0.47 per share for the same period last year. The decrease in net loss for the quarter ended October 31, 2016, compared with the same period in fiscal 2016, resulted primarily from (i) the completion of the melanoma monotherapy extension clinical trial, (ii) decreased engineering and lab supplies costs due to the completion of next-generation electroporation prototypes, (iii) decreased outside service fees due to leveraging in-house capabilities, and (iv) decreased stock-based compensation expense. There were no revenues for the quarter ended October 31, 2016 or October 31, 2015.

Research and development expenses were $3.1 million for the first quarter of fiscal 2017, compared to $3.7 million for the same period in fiscal 2016. General and administrative expenses were $2.5 million for the first quarter of fiscal 2017, compared to $3.4 million for the same period in fiscal 2016.

At October 31, 2016, OncoSec had $24.4 million in cash and cash equivalents, as compared to $28.7 million of cash and cash equivalents at July 31, 2016. OncoSec expects these funds to be sufficient to allow it to continue to operate its business for at least the next 12 months.

On December 8, 2016 Enzo Biochem, Inc. (NYSE: ENZ) reported strong operating results for the first fiscal quarter ended October 31, 2016, with significant operating profit achieved at Enzo Clinical Labs (Filing, Q1, Enzo Biochem, 2016, DEC 8, 2016, View Source [SID1234517012]).

Quarterly Highlights

· Consolidated revenues grew 4% and Clinical Labs revenue grew 9% over the prior year period as a result of demand for high margin molecular diagnostic services.
· Gross margin at Clinical Labs increased 100 basis points to 41% and consolidated gross margins increased to 46%.
· Non-GAAP net loss and Non-GAAP EBITDA registered steady quarterly progress, improving 35% and 53%, respectively, year-over-year. Both Clinical Labs and Life Science units remained profitable, in addition to generating positive cash flow.
· Balance sheet remains strong with cash and cash equivalents and working capital exceeding $67 million and $69 million, respectively. Remaining bank debt was eliminated following quarter’s end.
· Also post-quarter, federal court in Delaware set firm trial target dates for next year on three patent infringement cases.

Barry Weiner, President, Comments

"The year has gotten off to a good start, and we expect to see the year progress nicely as we continue to complete development and file for approval of additional proprietary low cost, high performance molecular diagnostic products designed to capitalize on reimbursement pressures facing diagnostic labs. Our strategic focus is paying off, notably at the Clinical Labs, where our molecular diagnostics services are increasing and our extensive and growing women’s health diagnostic services is experiencing increased usage. As we add to our product line-up in this field, we are providing cost savings that can ensue from our growing line of high performing competitive cost products. We are increasing marketing efforts to we expand into the national market."

"Meanwhile, we are operating at a highly efficient level, as underscored by steady improvement in gross margins as the Company moves to sustained profitability. We are holding expenses flat overall, while increasing our sales and marketing and development efforts. Life Sciences continues to see delayed orders and currency fluctuations that impact quarterly product revenues, however, it remains focused on developing medically relevant products that are of the highest quality and easily adaptable to market needs. For example, we recently introduced our PolyView Plus line of pathology-based detection systems which has been shown in a peer-reviewed publication to provide improved results to the marketplace. Furthermore, our product pipeline continues to be robust. We will shortly introduce extensions to our human papillomavirus (HPV) product line, providing our customers additional optionality. We also continue to progress on development of a comprehensive suite of women’s health infectious disease tests based on our AmpiProbe platforms, as well as a biomarker assay for the rapidly growing infertility market. The common thread connecting all of these products is that they are easily adaptable to open laboratory systems, providing our customers with the flexibility to offer such tests while reducing their cost of goods."

"On the legal front, the recent announcement by the federal court in Delaware setting trial dates should help progress the remaining patent infringement cases."

"We are highly encouraged and confident regarding the outlook for our business, and our exceptionally strong and debt free financial position assures us of the ability to move forward toward operational profitability and further growth."

October 2016 First Fiscal Quarter Results

Consolidated revenues increased 4%, to $26.3 million from $25.2 million. Gross profit increased to $12.1 million, or 8%, and gross margin advanced 100 basis points, to 46%. Selling, general and administrative (SG&A) expenses were $11.5 million, an increase of $1.2 million, or 12%, due largely to commissions, bonuses and salaries, along with increased administrative expenses related to the greater molecular diagnostics volume. The provision for uncollectible receivables, reflecting improved collection efforts, continues to decline, falling 5% for the quarter. Legal expenses were sharply lower at $0.4 million compared to $1.6 million, a decline of 77% from a year ago.

The Company reported an operating loss of $1.3 million compared to a year ago operating income of $4.6 million. The prior year period included a licensing and legal settlement of $6.8 million. Net loss amounted to $1.5 million or $0.03 per diluted share, compared to a year ago net income of $4.4 million or $0.10 per diluted share. Adjusted for licensing and legal settlements, the non-GAAP net loss was $1.5 million or $0.03 per diluted share compared to a loss of $2.3 million or $0.05 per diluted share in the prior year, an improvement of $0.8 million, or 35%. EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to a loss of $0.6 million, compared with a positive $5.5 million a year ago (which included the licensing and legal settlement of $6.8 million, as noted above). Non-GAAP EBITDA was a loss of $0.6 million compared to a loss of $1.2 million, an improvement of 53% year over year.

On October 31, 2016, cash and cash equivalents totaled $67.2 million, and working capital was $69.7 million. Consolidated cash flows used in operation was only $334,000 in the current year quarter. With the retirement in December 2016 of our outstanding bank loan, the Company, apart from lease obligations, currently has no outstanding debt.

Segment Analysis

Enzo Clinical Labs continued to benefit from growing demand and new accounts for molecular diagnostics, especially in the women’s health marketplace. Service revenues were $18.6 million, an increase of $1.5 million, or 9%, from the year ago period. Gross profit improved 13%, to $7.7 million, and gross margin increased to 41%, from 40%, helped by an increasing menu of approved, laboratory-developed tests (LDTs) tests. Despite higher SG&A related to sales growth, operating income increased to approximately $1 million, compared to $0.8 million a year ago, a 31% increase.

Enzo Life Sciences reported revenue of $7.7 million compared to $8.1 million from the year ago period. The segment continues to rationalize its product offerings to higher valued items, while focusing on product development and sales and marketing efforts. Gross profit remained flat, at $4.1 million, and gross margin advanced 200 basis points, to 57%. SG&A declined to $2.9 million, or 4%. Operating income amounted to $0.8 million. The year ago period operating income totaled $7.6 million, including the aforementioned $6.8 million legal settlement, net.

Legal Developments

The federal court in Delaware in late November issued orders regarding certain pending patent infringement cases brought by Enzo against various defendants. For the cases involving Gen-Probe/Hologic, Becton Dickinson, and Roche, the court has set summary judgment briefing deadlines, a summary judgment argument hearing, and trial dates in October, November and December 2017. "We are encouraged to have our day in court regarding our claims of infringement, and look forward to presenting our cases, a similar number of which have already been resolved by settlements," said Mr. Weiner.

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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