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Vertex Reports Second Quarter 2022 Financial Results

On August 4, 2022 Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) reported consolidated financial results for the second quarter ended June 30, 2022 and updated its full year 2022 financial guidance (Press release, Vertex Pharmaceuticals, AUG 4, 2022, View Source [SID1234617552]).

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"With sustained and growing leadership in CF, programs in five disease areas now entering or progressing through late-stage clinical development and the next wave of innovation beginning to enter the clinic later this year, Vertex has reached a new inflection point," said Reshma Kewalramani, M.D., Chief Executive Officer and President of Vertex. "As we reach more CF patients, we are poised to deliver significant, durable financial returns for years to come. In parallel, we are advancing a broad and deep clinical pipeline of potentially transformative medicines across multiple serious diseases, spanning small molecules, cell and genetic therapies, and we expect this diversified portfolio of medicines will serve many more patients and drive substantial growth in the future."

Product revenues increased 22% to $2.20 billion compared to the second quarter of 2021, primarily driven by the strong uptake of TRIKAFTA/KAFTRIO in multiple countries internationally and continued strong performance of TRIKAFTA in the U.S., including the June 2021 launch of TRIKAFTA in children 6-11 years old in the U.S. Net product revenues in the second quarter of 2022 increased 13% to $1.42 billion in the U.S. and increased 46% to $781 million outside the U.S., compared to the second quarter of 2021.

GAAP and Non-GAAP net income increased compared to the second quarter of 2021, primarily due to strong product revenue growth and a one-time $900 million payment in connection with the amendment of Vertex’s collaboration with CRISPR Therapeutics in the second quarter of 2021. The payment to CRISPR is included in acquired in-process research and development expenses ("Acquired IPR&D") in the second quarter of 2021.

Cash, cash equivalents and marketable securities as of June 30, 2022 were $9.3 billion, an increase of approximately $1.7 billion compared to December 31, 2021. The increase was primarily driven by strong revenue growth and operating cash flow.

*Starting in the first quarter of 2022, Vertex no longer excludes research and development charges resulting from upfront or contingent milestone payments in connection with collaborations, asset acquisitions and/or licensing of third-party intellectual property rights from its Non-GAAP financial measures. These charges are included as "Acquired in-process research and development expenses," and were previously included in "Research and development expenses," in Vertex’s consolidated statements of operations. Non-GAAP financial measures for the second quarter of 2021 have been recast to reflect this change.

Combined GAAP and Non-GAAP R&D, Acquired IPR&D and SG&A expenses decreased compared to the second quarter of 2021, primarily due to the one-time $900 million payment to CRISPR in the second quarter of 2021, partially offset by increased investment in support of multiple programs that have advanced in mid- and late-stage clinical development and the costs to support launches of Vertex’s therapies globally.

GAAP and Non-GAAP income taxes increased compared to the second quarter of 2021, primarily due to the income tax impact of the $900 million payment to CRISPR in the second quarter of 2021. GAAP income taxes also increased due to a discrete tax benefit recorded in the second quarter of 2021. Please refer to Note 1 for further details.

Full Year 2022 Financial Guidance

Vertex is raising its full year 2022 product revenue guidance to $8.6 to $8.8 billion. The increase primarily reflects the robust uptake of KAFTRIO/TRIKAFTA in countries outside the U.S. where Vertex has recently achieved reimbursement. Vertex is also increasing full year 2022 combined GAAP and non-GAAP R&D, Acquired IPR&D and SG&A expense guidance. The increase results from the advancement of the company’s clinical pipeline, including a number of programs that have recently entered or are initiating late-stage development, and from incremental expenses related to recent business development activity.

Key Business Highlights

Cystic Fibrosis (CF) Marketed Products

Vertex anticipates the number of CF patients treated with its medicines will continue to grow as a result of the uptake of TRIKAFTA in the U.S. and the launches of KAFTRIO outside the U.S., additional reimbursement agreements outside the U.S., and new approvals for the treatment of younger patients. Recent progress includes:

Vertex has completed the Phase 3 study of TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor) in children 2 to 5 years old. Data from this study showed similarly compelling efficacy of TRIKAFTA/KAFTRIO in children 2 to 5 years old to other age groups and no new safety findings. The Company expects to present the results at a medical forum later in 2022. Vertex anticipates submitting global regulatory filings for TRIKAFTA/KAFTRIO in children 2 to 5 years old this year.
At the European Cystic Fibrosis Society’s (ECFS) European Cystic Fibrosis Conference in June, Vertex presented data from the U.S. CF Foundation Patient Registry (CFFPR) of more than 16,000 people treated with TRIKAFTA for an average of nine months, showing that treatment with TRIKAFTA was associated with improved lung function and reduced risk of pulmonary exacerbations compared to pre-TRIKAFTA baseline, as well as lower risks of lung transplant and death, compared to the historical 2019 U.S. CFFPR population. Vertex also presented data for TRIKAFTA demonstrating no loss in mean lung function in people with F/F and F/MF mutations over a two-year period, in contrast to declines seen in the matched controls.
In April, Health Canada granted marketing authorization for TRIKAFTA in children 6 to 11 years of age. With this approval, approximately 500 children with CF became newly eligible for treatment with a CFTR modulator. Vertex recently signed a Letter of Intent (LOI) with the pan-Canadian Pharmaceutical Alliance (pCPA) paving the way for reimbursement of TRIKAFTA for this age group.
Vertex has filed a Supplemental New Drug Application (sNDA) with the U.S. Food and Drug Administration (FDA) and a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA) for the use of ORKAMBI in children 12 months to less than 24 months old. The FDA has assigned a Prescription Drug User Fee Act (PDUFA) target date of September 4, 2022.
TRIKAFTA/KAFTRIO is now approved and reimbursed or accessible in more than 25 countries.

R&D pipeline

Vertex is delivering on a diversified pipeline of potentially transformative small molecule, cell and genetic therapies aimed at serious diseases. Recent and anticipated progress for key pipeline programs is summarized below.

Cystic Fibrosis

Vertex continues to pursue next-in-class, small molecule CFTR modulator therapies as well as new treatment options for the approximately 5,000 patients who cannot benefit from CFTR modulators.

Vertex is conducting two Phase 3 global, randomized, double-blind, active-controlled clinical trials (SKYLINE 102 and SKYLINE 103) evaluating Vertex’s new once-daily investigational triple combination of VX-121/tezacaftor/VX-561 in patients with CF 12 years of age and older. The SKYLINE 102 and SKYLINE 103 trials will compare the efficacy and safety of VX-121/tezacaftor/VX-561 to TRIKAFTA. More than 250 sites across both studies are active and enrolling patients. Enrollment in both trials is expected to be completed in late 2022 or early 2023.
In parallel to SKYLINE 102 and 103, Vertex has also initiated a study of VX-121/tezacaftor/VX-561 in children with CF 6 to 11 years of age.
In collaboration with Moderna, Vertex is developing CFTR mRNA therapeutics designed to treat the underlying cause of CF by programming cells in the lungs to produce functional CFTR protein for the treatment of the approximately 5,000 people with CF who do not produce any CFTR protein. IND-enabling studies have been completed, and Vertex is on track to submit an IND for this program in 2H 2022.
Beta Thalassemia and Sickle Cell Disease

The exa-cel (CTX001) program employs a non-viral ex vivo CRISPR gene-editing therapy, which is being developed as a potential functional cure for transfusion-dependent thalassemia (TDT) and severe sickle cell disease (SCD). Vertex is developing exa-cel in collaboration with CRISPR Therapeutics.

In June, at the European Hematology Association (EHA) (Free EHA Whitepaper) Congress, Vertex and CRISPR presented data from 75 patients (44 with TDT, 31 with SCD) from the CLIMB-111, CLIMB-121 and CLIMB-131 studies with follow-up ranging from 1.2 to 37.2 months after exa-cel infusion. All 31 patients with severe SCD, characterized by recurrent vaso-occlusive crises (VOCs), were free of VOCs after exa-cel infusion through the duration of follow-up, with follow-up ranging from 2.0 to 32.3 months. Of the 44 patients with TDT, 42 were transfusion-free with follow-up ranging from 1.2 to 37.2 months. Two patients who were not yet transfusion-free had 75% and 89% reductions in transfusion volume, respectively. The safety profile was generally consistent with myeloablative conditioning with busulfan and autologous stem cell transplant.
Two additional Phase 3 studies of exa-cel have been initiated in pediatric patients, one in TDT and a second in SCD.
Vertex has completed discussions with the EMA and the Medicines and Healthcare products Regulatory Agency (MHRA) on the submission package for exa-cel and is on track to submit for regulatory approvals of exa-cel for SCD and TDT in Europe and the UK by the end of 2022. Discussions with the U.S. FDA are ongoing.
APOL1-Mediated Kidney Disease (AMKD)

Vertex has discovered multiple oral, small molecule inhibitors of APOL1, pioneering a new class of medicines that target an underlying genetic driver of kidney disease.

In March, Vertex initiated pivotal development of inaxaplin (VX-147) in a single Phase 2/3 study in patients with two APOL1 mutations and proteinuric kidney disease.
This Phase 2/3 adaptive study will first evaluate two doses of inaxaplin to select a dose for Phase 3 and subsequently evaluate the efficacy and safety of the single, selected dose in the Phase 3 portion of the study. The primary efficacy endpoint for the final analysis is eGFR slope in patients receiving the selected dose of inaxaplin compared to placebo at two years. The study is designed to have a pre-planned interim analysis at Week 48 evaluating eGFR slope, supported by a percent change from baseline in proteinuria in the inaxaplin arm versus placebo. If positive, the interim analysis may serve as the basis for Vertex to seek accelerated approval of inaxaplin in the U.S. for patients with AMKD. Enrollment is ongoing, with more than 30 sites active in the U.S.
The U.S. FDA recently granted inaxaplin Breakthrough Therapy designation for APOL1-mediated focal segmental glomerulosclerosis (FSGS) and the EMA has also granted inaxaplin Priority Medicines (PRIME) designation for AMKD.
Pain (NaV1.8)

Vertex has discovered multiple selective small molecule inhibitors of NaV1.8 with the objective of creating a new class of pain medicines that have the potential to provide effective pain relief, without the limitations of opioids and other standard-of-care pain medicines.

In March, Vertex reported positive data from two Phase 2 dose-ranging acute pain studies with VX-548, one following bunionectomy surgery and the other following abdominoplasty surgery. Both studies met their primary endpoint and established proof of concept for VX-548.
Vertex has completed its end-of-phase 2 meeting with the FDA and has reached agreement on the design of the Phase 3 program in acute pain. The Phase 3 program will include two randomized, double-blind, placebo-controlled studies evaluating the efficacy and safety of VX-548 for moderate to severe acute pain following bunionectomy or abdominoplasty surgery. Each study will also include a hydrocodone bitartrate/acetaminophen (HB/APAP) treatment arm. A third single-arm study will evaluate treatment with VX-548 for up to 14 days in multiple other types of moderate to severe acute pain. Vertex expects to initiate this program in the fourth quarter of 2022.
Vertex also intends to initiate a Phase 2 dose-ranging study of VX-548 in neuropathic pain by the end of 2022.
The U.S. FDA has granted VX-548 Breakthrough Therapy designation for moderate to severe acute pain.
Type 1 Diabetes (T1D)

Vertex is evaluating cell therapies using stem cell-derived islets to replace the endogenous insulin-producing islet cells that are destroyed in people with T1D, with the goal of developing a potential functional cure for this disease.

VX-880 is a stem cell-derived, fully differentiated islet replacement therapy, used in combination with standard immunosuppression to protect the implanted cells. VX-880 is being evaluated in a Phase 1/2 clinical trial for the treatment of T1D.
In June, at the American Diabetes Association (ADA) Scientific Sessions Conference, Vertex provided additional data on the two patients dosed at half the target dose in Part A of its VX-880 Phase 1/2 study. Vertex had previously reported that both patients had achieved glucose-responsive insulin production, improvements in glycemic control and reductions in exogenous insulin requirements. Additional data presented at ADA also showed significant increases in the blood glucose time-in-range compared to baseline, following treatment with VX-880. Patient 1 showed a blood glucose time-in-range increase from 40.1% at baseline to 99.9% at Day 270 and was insulin independent. Patient 2 showed a time-in-range increase from 35.9% at baseline to 51.9% at Day 150 with a 30% reduction in exogenous insulin use.
The VX-880 Phase 1/2 clinical trial has resumed enrollment in the U.S. Part B of the study is open for enrollment at sites in the U.S. and Canada.
Vertex is advancing additional programs in T1D, in which these same stem cell-derived islets are encapsulated and implanted in an immunoprotective device or modified to produce hypoimmune stem cell islets, with the goal of eliminating the need for immunosuppression.
Vertex is on track to submit an IND for the cells plus device program in 2022.
Alpha-1 Antitrypsin (AAT) Deficiency

Vertex is working to address the underlying genetic cause of alpha-1 antitrypsin (AAT) deficiency by developing novel small molecule correctors of Z-AAT protein folding, with the goal of increasing the secretion of functional AAT into the blood and addressing both the lung and the liver aspects of AAT deficiency.

Vertex is on track to advance one or more novel small molecule Z-AAT correctors into the clinic in 2022.
Duchenne Muscular Dystrophy (DMD)

Vertex is investigating a novel approach to treating DMD by delivering CRISPR/Cas9 gene-editing technology to muscle cells, with the goal of restoring near-full length dystrophin protein expression by targeting specific mutations in the dystrophin gene that cause the disease.

IND-enabling studies for the first in vivo gene editing therapy for DMD are underway. Vertex anticipates submitting an IND in 2023.
Consistent with its overall strategy, Vertex takes a portfolio approach to all of its programs, with additional assets in CF, SCD, Beta Thalassemia, AMKD, T1D, Pain, and AATD in earlier stages of development.

Investments in External Innovation

Consistent with its strategy to develop transformative medicines for serious diseases, Vertex recently entered into the following transactions:

In July, Vertex entered into a definitive agreement to acquire ViaCyte, a privately held company focused on delivering novel stem cell-derived cell replacement therapies as a functional cure for type 1 diabetes, for $320 million in cash. The acquisition will provide Vertex with complementary assets, capabilities and technologies that could accelerate Vertex’s existing T1D programs. Vertex anticipates the acquisition will close later this year.
Also in July, Vertex entered into a research collaboration with Verve Therapeutics, focused on discovering and developing an in vivo gene editing program for a liver disease.
In May, Vertex acquired Catalyst Biosciences’ complement portfolio and related intellectual property for $60 million in cash, adding capabilities in the area of complement-mediated diseases.
Non-GAAP Financial Measures

In this press release, Vertex’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. In particular, non-GAAP financial results and guidance exclude from Vertex’s pre-tax income (i) stock-based compensation expense, (ii) gains or losses related to the fair value of the company’s strategic investments, (iii) increases or decreases in the fair value of contingent consideration, (iv) acquisition-related costs, (v) an intangible asset impairment charge and (vi) other adjustments. The company’s non-GAAP financial results also exclude from its provision for income taxes the estimated tax impact related to its non-GAAP adjustments to pre-tax income described above and certain discrete items. These results should not be viewed as a substitute for the company’s GAAP results and are provided as a complement to results provided in accordance with GAAP. Management believes these non-GAAP financial measures help indicate underlying trends in the company’s business, are important in comparing current results with prior period results and provide additional information regarding the company’s financial position that the company believes is helpful to an understanding of its ongoing business. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally, to manage the company’s business and to evaluate its performance. The company’s calculation of non-GAAP financial measures likely differs from the calculations used by other companies. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.

The company provides guidance regarding combined R&D, Acquired IPR&D and SG&A expenses and effective tax rate on a non-GAAP basis. The guidance regarding combined GAAP and non-GAAP R&D, Acquired IPR&D and SG&A expenses does not include estimates associated with any potential future business development transactions, including collaborations, asset acquisitions and/or licensing of third-party intellectual property rights. The company does not provide guidance regarding its GAAP effective tax rate because it is unable to forecast with reasonable certainty the impact of excess tax benefits related to stock-based compensation and the possibility of certain discrete items, which could be material.

1: In the three and six months ended June 30, 2022 and 2021, "Tax adjustments" included the estimated income taxes related to non-GAAP adjustments to the company’s pre-tax income (loss) and excess tax benefits related to stock-based compensation. "Tax adjustments" in the three and six months ended June 30, 2021 also included a $100 million discrete tax benefit related to an increase in the U.K.’s corporate tax rate from 19% to 25%, which was enacted in June 2021 and will become effective in April 2023.

2: The difference between the company’s full year 2022 combined GAAP R&D, Acquired IPR&D and SG&A expenses and combined non-GAAP R&D, Acquired IPR&D and SG&A expenses guidance relates primarily to $445 million to $500 million of stock-based compensation expense. The guidance regarding combined GAAP and non-GAAP R&D, Acquired IPR&D and SG&A expenses does not include estimates associated with any potential future business development transactions, including collaborations, asset acquisitions and/or licensing of third-party intellectual property rights.

3: Vertex classifies upfront, contingent milestone, and other payments pursuant to its business development transactions, including collaborations, licenses of third-party technologies, and asset acquisitions as "Acquired in-process research and development expenses" in its consolidated statements of operations. These amounts were previously classified as "Research and development expenses." To conform prior periods to current presentation, the company reclassified $958 million and $960 million from "Research and development expenses" to "Acquired in-process research and development expenses" for the three and six months ended June 30, 2021, respectively. In the three and six months ended June 30, 2021, "Acquired in-process research and development expenses" primarily related to the $900 million upfront payment to CRISPR.

4: "Other (expense) income, net" includes net gains and losses related to changes in the fair value of the company’s strategic investments.

5: In June 2022, the company revised the scope of certain acquired programs, resulting in a $13 million "Intangible asset impairment charge" and a decrease in the associated fair value of contingent consideration.

6: "Acquisition-related costs" in the three and six months ended June 30, 2022 and 2021 related to costs associated with the company’s acquisition of Exonics.

Arrowhead Pharmaceuticals Reports Fiscal 2022 Third Quarter Results

On August 4, 2022 Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) reported financial results for its fiscal third quarter ended June 30, 2022 (Press release, Arrowhead Research Corporation, AUG 4, 2022, View Source [SID1234617551]). The company is hosting a conference call today, August 4, 2022, at 4:30 p.m. ET to discuss the results.

Conference Call and Webcast Details

Investors may access a live audio webcast on the Company’s website at View Source For analysts that wish to participate in the conference call, please dial 888-243-4451 or 412-542-4135 and ask to join the Arrowhead Pharmaceuticals call.

A replay of the webcast will be available on the company’s website approximately two hours after the conclusion of the call and will remain available for 90 days. An audio replay will also be available approximately two hours after the conclusion of the call and will be available for 3 days. To access the audio replay, dial 877-344-7529 or 412-317-0088 and provide Conference ID 8080876.

Selected Recent Events

Published results from a Phase 2 clinical study of investigational fazirsiran (TAK-999/ARO-AAT) for the treatment of liver disease associated with alpha-1 antitrypsin deficiency in the New England Journal of Medicine (NEJM) and presented in an oral presentation at The International Liver Congress 2022 – The Annual Meeting of the European Association for the Study of the Liver (EASL). Key results included the following:
Fibrosis regression observed in 58% (7 of 12) of patients receiving 200 mg fazirsiran
Median reduction of 83% of Z-AAT accumulation in the liver
Reduction of 69% in histologic globule burden
Substantial and sustained improvements in clinically relevant biomarkers of liver health
Hosted a pulmonary research & development (R&D) Day in New York City to discuss the emerging pipeline of pulmonary targeted RNAi therapeutic candidates that leverage the company’s proprietary Targeted RNAi Molecule (TRIM) platform
Initiated Phase 1/2a clinical studies for two new investigational medicines designed to treat various muco-obstructive and inflammatory pulmonary conditions
ARO-MUC5AC, an investigational RNAi therapeutic designed to inhibit the production of mucin 5AC (MUC5AC)
ARO-RAGE, an investigational RNAi therapeutic designed to inhibit the production of Receptor for Advanced Glycation End products (RAGE)
Initiated the Phase 2 GATEWAY clinical study of ARO-ANG3, Arrowhead’s investigational medicine designed to silence the hepatic expression of angiopoietin-like protein 3 (ANGPTL3), in patients with homozygous familial hypercholesterolemia (HoFH)
Strengthened the management team with the hiring of Tracie Oliver as chief commercial officer and promotion of Patrick O’Brien to chief operating officer
Formed a joint venture, Visirna Therapeutics, with Vivo Capital to expand the reach of innovative medicines in Greater China
Broke ground on construction of a new drug manufacturing facility and announced awards of up to $18.5 million in tax incentives from the city of Verona and the Wisconsin Economic Development Corporation

Kronos Bio Reports Recent Business Progress and Second-Quarter 2022 Financial Results

On August 4, 2022 Kronos Bio, Inc. (Nasdaq: KRON), a company dedicated to transforming the lives of those affected by cancer and other serious diseases, reported recent business progress and second-quarter 2022 financial results (Press release, Kronos Bio, AUG 4, 2022, View Source [SID1234617550]).

"We are continuing to execute across our clinical programs, with the registrational Phase 3 AGILITY study of our lead SYK inhibitor, entospletinib, under way in newly diagnosed patients with NPM1-mutated acute myeloid leukemia (AML)," said Norbert Bischofberger, Ph.D., president and chief executive officer of Kronos Bio. "We are also making progress with our CDK9 inhibitor, KB-0742, as we work toward identifying a recommended Phase 2 dose in the fourth quarter."

Second Quarter and Recent Company Updates

SYK Inhibitor Programs

The company continued to enroll patients in the Phase 3 AGILITY clinical trial of entospletinib, a selective inhibitor targeting spleen tyrosine kinase (SYK), in combination with standard of care anthracycline and cytarabine (7+3) chemotherapy in newly diagnosed NPM1-mutated AML. Data are anticipated in the second half of 2023 with a primary endpoint of measurable residual disease negative complete response.

Kronos Bio opened additional sites for its planned Phase 1b/2 clinical trial of lanraplenib, the company’s next generation SYK inhibitor, in combination with gilteritinib in patients with FLT3-mutated AML.

The company shared preclinical data that provide additional support for the biological rationale for the targeting of SYK in patients with genetically defined subsets of AML at the European Hematology Association (EHA) (Free EHA Whitepaper) congress in Vienna in two poster presentations. The first poster described the analysis of mutational and gene expression signatures from bone marrow and peripheral blood samples of patients with NPM1-mutated AML, suggesting that the NPM1 mutation, with or without co-mutation of FLT3, is a strong predictor of entospletinib anti-leukemic activity. That research was conducted as part of a collaboration with scientists at the Oregon Health & Science University.

A second poster described the company’s findings of synergistic activity of lanraplenib in combination with other targeted agents, including gilteritinib, in an NPM1-mutated/FLT3-mutated PDX model.
KB-0742

Kronos Bio is continuing to enroll patients in the dose escalation stage of the Phase 1/2 study of KB-0742 in solid tumors. The company anticipates announcing the recommended Phase 2 dose in the fourth quarter of 2022.
Corporate Update

Kronos Bio believes the company has sufficient runway to fund operations into Q4 2024. This is as a result of ongoing financial prudence measures that have included prioritizing clinical programs to focus on entospletinib and KB-0742.
Second Quarter 2022 Financial Highlights

Cash, Cash Equivalents and Investments: With its ongoing and currently planned clinical programs and $292.4 million in cash, cash equivalents and investments as of June 30, 2022, the company anticipates sufficient resources to fund its planned operations into the second half of 2024.

R&D Expenses: Research and development expenses were $22.7 million for the second quarter of 2022, which includes non-cash stock-based compensation expense of $4.1 million.

G&A Expenses: General and administrative expenses were $10.8 million for the second quarter of 2022, which includes non-cash stock-based compensation expense of $4.2 million.

Net Loss: Net loss for the second quarter of 2022 was $32.9 million, or $0.59 per share, including non-cash stock-based compensation expense of $8.2 million.

Codiak BioSciences Reports Second Quarter 2022 Financial Results and Operational Progress

On August 4, 2022 Codiak BioSciences, Inc. (NASDAQ: CDAK), a clinical-stage biopharmaceutical company pioneering the development of exosome-based therapeutics as a new class of medicines, reported second quarter 2022 financial results and recent operational progress (Press release, Codiak Biosciences, AUG 4, 2022, View Source [SID1234617549]).

"During the second quarter we made strong progress supporting our approach and making advancements across our pipeline. We reported Phase 1 data sets from both our exoSTING and exoIL-12 programs, further validating our engEx platform, and demonstrating we were able to deliver repeat doses of exoSTING and exoIL-12 to the tumor with a high level of specificity. Importantly, we did so with no observed systemic exposure or associated toxicity, and an enhanced therapeutic index – while demonstrating tumor shrinkage in both injected and uninjected lesions," said Douglas E. Williams, Ph.D., President and CEO of Codiak. "We also initiated a Phase 1 study of exoASO-STAT6, our third program to enter the clinic, in patients with certain liver, gastric and colorectal cancers. These updates, in combination with preclinical data showing the promise of our engEx-AAV program and a partnership with CEPI to advance our pan Betacoronavirus program, show that Codiak is broadly advancing its portfolio programs in 2022, momentum we aim to carry through this year and into 2023."

Second Quarter 2022 and Recent Highlights

Announced platform-validating data from Phase 1 trials of exoSTING and exoIL-12; both candidates demonstrated potential for best-in-class profile; Codiak has identified a recommended Phase 2 dose for each program and intends to finalize study plans with the FDA during the second half of this year to prepare for initiation of Phase 2 trials for both candidates early next year.
In a Phase 1 trial, exoIL-12 demonstrated a differentiating safety and tolerability profile, with no detectable systemic exposure of IL-12 and no treatment-related adverse events, which has not previously been reported by others with recombinant IL-12. The two patients with cutaneous T cell lymphoma (CTCL) who have been treated each received multiple (>20) injections of exoIL-12 and experienced tumor regressions in both injected and non-injected lesions, including a partial response in one patient.
In the Phase 1/2 clinical trial evaluating exoSTING as a single agent in patients with late-stage refractory solid tumors, data across all five dose cohorts showed repeat doses of exoSTING were well-tolerated, demonstrated tumor retention with no systemic exposure of the STING agonist, and in a subset of patients, tumor shrinkage was observed in injected and uninjected lesions.
Initiated patient dosing in the Phase 1 clinical trial of exoASO-STAT6 in patients with advanced hepatocellular carcinoma, liver metastases from primary gastric cancer and colorectal cancer; exoASO-STAT6 is Codiak’s third clinical program and the first to evaluate a systemically administered exosome-based drug candidate.
Partnered with CEPI to continue the advancement of vaccine candidates from the Company’s pan Betacoronavirus program; as part of the partnership, CEPI will provide seed funding of up to $2.5 million, which Codiak anticipates will fund the completion of preclinical development and identification of a clinical candidate.
Presented preclinical data on the Company’s engEx-AAV discovery program, a novel strategy that aims to leverage exosomes to improve adeno-associated virus (AAV) vector gene therapy, at the 25th Annual Meeting of the American Society of Gene and Cell Therapy (ASGCT) (Free ASGCT Whitepaper); data demonstrated that exosome engineering generates significant increases in AAV yield compared to unmodified exosomes, while retaining the functionality to transduce cells with AAV and resist neutralizing antibodies that impair gene therapy efficacy.
Anticipated Milestones and Events

Initiate Phase 2 study of exoIL-12 in an expanded group of tumor types in 1H 2023; continue to monitor patients enrolled in Phase 1 study.
Initiate Phase 2 study of exoSTING in bladder cancer in 1H 2023; continue to monitor patients enrolled in ongoing Phase 1/2 study, reporting additional data at an upcoming scientific conference.
Continue enrollment for ongoing Phase 1 trial for exoASO-STAT6, with initial data expected in 1H 2023.
Advance exoVACC pan Betacoronavirus program toward identification of a clinical candidate through new partnership with CEPI.
Second Quarter 2022 Financial Results
Total revenues for the quarter ended June 30, 2022, were $13.1 million, compared to $0.9 million for the same period in 2021. These results reflect deferred revenue recognized under the Company’s collaboration with Jazz Pharmaceuticals.

Net loss for the quarter ended June 30, 2022, was $6.8 million, compared to a net loss of $21.8 million for the same period in 2021. The decrease in net loss for the quarter was driven primarily by an increase in revenues in connection with the Company’s agreement with Jazz Pharmaceuticals.

Research and development expenses were $12.8 million for the quarter ended June 30, 2022, compared to $15.4 million for the same period in 2021. The decrease in research and development expenses was driven primarily by decreases in lab expenses and personnel-related costs in connection with the Company’s agreement with Lonza.

General and administrative expenses were $7.4 million for the quarter ended June 30, 2022, compared to $6.9 million for the same period in 2021. The increase was due primarily to professional services driven by legal fees for intellectual property rights.

As of June 30, 2022, Codiak had cash, cash equivalents, and marketable securities of approximately $41.8 million.

Sana Biotechnology Reports Second Quarter 2022 Financial Results and Business Updates

On August 4, 2022 Sana Biotechnology, Inc. (NASDAQ: SANA), a company focused on creating and delivering engineered cells as medicines, reported financial results and business highlights for the second quarter 2022 (Press release, Sana Biotechnology, AUG 4, 2022, View Source [SID1234617548]).

"We are pleased with the continued progress this quarter both across our platforms and with our product candidates. We made executive hires in critical operational roles, executed on key pre-IND activities for both SC291 and SG295, made business decisions that extend our cash runway to allow more potential clinical data readouts across multiple drug candidates with our current balance sheet, and presented important preclinical data across multiple platforms at various scientific conferences," said Steve Harr, Sana’s President and Chief Executive Officer. "We are well-positioned with our current resources to file INDs across several platforms with multiple drug products in both 2022 and 2023, and our team is enthusiastic to understand the potential of these medicines to improve outcomes for patients."

Continued progress in building Sana’s hypoimmune ex vivo platform and in vivo fusogen platform with presentations at AACR (Free AACR Whitepaper), ASGCT (Free ASGCT Whitepaper), ADA, and ISSCR

Ex vivo hypoimmune platform (HIP): Sana’s HIP platform makes multiple genomic modifications to cells with the goal of preventing allogeneic transplant rejection, and importantly includes modifications to prevent both adaptive and innate immune recognition and rejection. Presented data showed survival of transplanted allogeneic HIP cells of several different types – including pancreatic islet cells, cardiomyocytes, and retinal pigment epithelial (RPE) cells – in a variety of locations in non-human primates. Sana also presented data showing that HIP allogeneic regulatory T cells function and are able to evade immune detection in preclinical models. These cells have the potential to treat a variety of autoimmune disorders. Finally, Sana scientists presented in vitro and in vivo data showing that exposure to an anti-CD47 antibody leads to elimination of HIP induced pluripotent stem cells (iPSCs) as well as HIP pancreatic islet cells. These data provide a path for a potential safety strategy as well as validation of the mechanism of immune protection. Sana’s pipeline includes HIP-modified cells to replace damaged or missing cells in the body in a number of different diseases, including, among others, cancer, type 1 diabetes, cardiac disease, and various neurologic conditions.
HIP pancreatic islet cells: Type 1 diabetes is a disease where a person’s immune system destroys one’s own pancreatic beta cells, which are a key component in pancreatic islets. Presented data showed that transplanted HIP pancreatic islet cells evade allogeneic immune response and autoimmune response in a type 1 diabetes mouse model. These data build upon previous in vitro data showing that HIP pancreatic islet cells are not recognized by serum from type 1 diabetic patients, including no T cell or antibody recognition. HIP technology is incorporated in SC451, Sana’s islet cell product candidate, which has a goal of filing an IND in 2023 for the treatment of type 1 diabetes.
In vivo fusogen platform: Presented additional preclinical data utilizing retargeted fusosomes for in vivo delivery of genetic payloads to various cells, including CD8+ T cells, CD4+ T cells, and human hepatocytes. This technology is the backbone of Sana’s in vivo delivery platform and is incorporated into various product candidates, including SG295.
Announced expected cash runway into 2025 to enable multiple data readouts across the platforms; largest part of cash savings from plans to relocate manufacturing facility to Bothell, Washington

Expect cash runway into 2025 enabling multiple data readouts across the platforms based on current timelines for lead programs. The extension includes a slowed pace of investment for multiple programs with INDs expected in 2024 and beyond.
Announced decision to move Sana’s manufacturing plant from Fremont, CA to Bothell, WA, resulting in approximately $100 million in expected cost savings over the next three years. As part of this decision, Sana signed a lease agreement to develop an approximately 80,000 square foot manufacturing facility in Bothell, WA. The facility will be designed to support the late-stage clinical and early commercial manufacturing of multiple product candidates across the portfolio.
Announced key executive hires and appointments, building on the company’s scientific excellence and operational capabilities

Strengthened the leadership team with the appointments of Snehal Patel to lead internal and external manufacturing and Julie Lepin to lead regulatory affairs.
Second Quarter 2022 Financial Results

GAAP Results

Cash Position: Cash, cash equivalents, and marketable securities as of June 30, 2022 were $579.6 million compared to $746.9 million as of December 31, 2021. The decrease of $167.3 million was primarily driven by cash used in operations of $149.2 million and cash used for the purchase of property and equipment of $11.9 million. Cash used in operations includes $6.2 million of upfront payments related to licensing technology for our CD22 and BCMA programs, $3.2 million of costs incurred related to the previously planned manufacturing facility in Fremont, CA (the Fremont facility) which will be replaced by the Bothell, WA site (the Bothell facility), as well as multiple cash payments that will not recur this year.

Research and Development Expenses: For the three and six months ended June 30, 2022, research and development expenses, inclusive of non-cash expenses, were $72.5 million and $145.2 million, respectively, compared to $45.0 million and $86.9 million for the same periods in 2021. The increases of $27.5 million and $58.3 million were due to increases in personnel expenses related to increased headcount to expand Sana’s research and development capabilities, increased third-party manufacturing costs for contract development and manufacturing organizations including pass-through costs for materials, facility and other allocated costs, research and laboratory costs, and costs to acquire technology complementary to our own. Research and development expenses for the three and six months ended June 30, 2022 include non-cash stock-based compensation of $7.4 million and $13.1 million, respectively, and $3.1 million and $5.8 million for the same periods in 2021.

Research and Development Related Success Payments and Contingent Consideration: For the three and six months ended June 30, 2022, we recognized non-cash gains of $17.9 million and $73.4 million, respectively, in connection with the change in the estimated fair value of the success payment liabilities and contingent consideration in aggregate, compared to a gain of $76.0 million and an expense of $51.0 million for the same periods in 2021. The value of these potential liabilities can fluctuate significantly with changes in our market capitalization and stock price.

General and Administrative Expenses: General and administrative expenses for the three and six months ended June 30, 2022, inclusive of non-cash expenses, were $18.3 million and $32.7 million, respectively, compared to $12.5 million and $24.3 million for the same periods in 2021. The increases of $5.8 million and $8.4 million, respectively, were primarily due to the write-off of construction in progress costs incurred in connection with the previously planned Fremont facility which will be replaced by the Bothell facility. The increases were also due to personnel-related expenses attributable to an increase in headcount to support our continued research and development activities, increased facility and information technology costs, including rent. These increases were partially offset by a decrease in legal fees. General and administrative expenses for the three and six months ended June 30, 2022 include stock-based compensation of $2.5 million and $4.5 million, respectively, and $1.8 million and $3.3 million for the same periods in 2021.

Net Loss: Net loss for the three and six months ended June 30, 2022 was $72.5 million, or $0.39 per share, and $103.9 million, or $0.56 per share, respectively, compared to net income of $18.7 million, or $0.10 per share, and net loss of $161.9 million, or $1.08 per share for the same periods in 2021.
Non-GAAP Measures

Non-GAAP Operating Cash Burn: Non-GAAP operating cash burn for the six months ended June 30, 2022 was $155.4 million compared to $89.8 million for the same period in 2021. Non-GAAP operating cash burn is the decrease in cash, cash equivalents, and marketable securities, excluding cash inflows from financing activities, cash outflows from business development activities, and the purchase of property and equipment.

Non-GAAP General and Administrative Expense: Non-GAAP general and administrative expense for the three and six months ended June 30, 2022 was $13.8 million and $28.3 million, respectively, compared to $12.5 million and $24.3 million for the same periods in 2021. Non-GAAP general and administrative expense excludes the write-off of construction in progress costs incurred in connection with the previously planned Fremont facility, which will be replaced by the Bothell facility.

Non-GAAP Net Loss: Non-GAAP net loss for the three and six months ended June 30, 2022 was $85.9 million, or $0.47 per share, and $172.8 million, or $0.93 per share, respectively, compared to $57.3 million, or $0.32 per share, and $110.9 million, or $0.74 per share for the same periods in 2021. Non-GAAP net loss excludes certain one-time costs to acquire technology, non-cash expenses related to the change in the estimated fair value of contingent consideration and success payment liabilities, and the write-off of construction in progress costs incurred in connection with the previously planned Fremont facility, which will be replaced by the Bothell facility.
A discussion of non-GAAP measures, including a reconciliation of GAAP and non-GAAP measures, is presented below under "Non-GAAP Financial Measures."