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Alpine Immune Sciences Provides Corporate Update and Reports Fourth Quarter and Full Year 2021 Financial Results

On March 17, 2022 Alpine Immune Sciences, Inc. (NASDAQ: ALPN), a leading clinical-stage immunotherapy company focused on developing innovative treatments for cancer and autoimmune and inflammatory diseases, reported financial results for the fourth quarter and year ended December 31, 2021 (Press release, Alpine Immune Sciences, MAR 17, 2022, View Source [SID1234610303]).

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"2021 was a period of significant growth at Alpine with the advancement of all three of our clinical programs into significant stages of development," said Mitchell H. Gold, MD, Executive Chairman and Chief Executive Officer of Alpine. "As a result we secured $176 million in additional capital through a PIPE financing, the achievement of milestones as part of our AbbVie collaboration and an upfront payment from our recently announced discovery partnership with Horizon Therapeutics."

Dr. Gold added: "2022 looks to be a transformative year for Alpine with several important readouts anticipated across our programs, including the completion of dose escalation for davoceticept monotherapy and initiation of expansion cohorts; as well as the completion of the phase 1 healthy volunteer study for ALPN-303 and initiation of one or more patient-based studies in autoantibody-related diseases by the end of the year."
Full Year 2021 and Recent Clinical and Corporate Updates
•Davoceticept (ALPN-202): Conditional CD28 costimulator and dual checkpoint inhibitor
◦Davoceticept monotherapy dose escalation data (NEON-1) will be presented in an oral presentation at the 2022 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting on April 12, 2022. Initial findings of davoceticept’s tolerability and clinical activity were previously reported in an oral presentation at the 2021 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.
◦NEON-1 monotherapy expansion cohorts in patients with cutaneous melanoma and PD-L1+ tumors projected to be initiated in the first half of 2022.
◦Announced partial clinical hold on the NEON-2 trial combining davoceticept with pembrolizumab. Participants previously enrolled can continue to receive davoceticept and pembrolizumab; the NEON-1 monotherapy trial was not affected.
•ALPN-303: Dual APRIL/BAFF inhibitor
◦Began a first-in-human, phase 1 study of ALPN-303 in healthy volunteers in the fourth quarter of 2021; initial safety, pharmacokinetic, and pharmacodynamic findings anticipated by mid-2022.
◦Preclinical data, highlighting the differentiation and potential best-in-class profile of ALPN-303, were presented in two oral presentations at the European Alliance of Associations for Rheumatology and American College of Rheumatology Convergence 2021 meetings.
◦Plan to initiate studies in systemic lupus erythematosus (SLE) and potentially additional autoantibody-related diseases in the second half of 2022.
•Acazicolcept (ALPN-101): Dual CD28/ICOS inhibitor
◦Received $45 million in pre-option exercise development milestones as part of the Option and License Agreement with AbbVie, bringing total upfront and milestone payments received through December 31, 2021, to $105 million.
◦Continue to enroll Synergy, a phase 2 trial of acazicolcept in patients with SLE.

◦With collaborators at the French National Institute of Health and Medical Research (INSERM), demonstrated that acazicolcept decreased manifestations of systemic sclerosis in preclinical mouse models (Arthritis Res Ther 24: 13, 2022)

•General Corporate
◦Announced an exclusive license and collaboration agreement with Horizon Therapeutics plc for the development and commercialization of up to four preclinical candidates generated from Alpine’s unique discovery platform, which included $40 million in upfront payments ($25 million cash and $15 million equity investment at a 25% premium to the 30-day volume-weighted average share price) and eligibility to receive up to $1.5 billion in total, through future milestone-based payments.

◦Raised $91 million in a private placement, led by Frazier Life Sciences Public Fund with participation from Decheng Capital, BVF Partners, TCG X, Avidity Partners, OrbiMed, Omega Fund, and Logos Capital, among others.
Fourth Quarter and Full Year 2021 Financial Results
As of December 31, 2021, we had cash, cash equivalents, and investments totaling $215.4 million. Net cash used in operating activities for the year ended December 31, 2021 was $15.2 million compared to net cash provided by operating activities of $30.1 million for the year ended December 31, 2020. The Company recorded net losses of $50.3 million and $27.9 million for the years ended December 31, 2021 and 2020, respectively.
Collaboration revenue for the fourth quarter ended December 31, 2021 was $4.5 million compared to $5.6 million for the fourth quarter ended December 31, 2020. Collaboration revenue for the year ended December 31, 2021 was $23.4 million compared to $9.3 million for the year ended December 31, 2020. The amounts were primarily attributable to the revenue recognized under our AbbVie Agreement.

Research and development expenses for the fourth quarter ended December 31, 2021 were $15.4 million compared to $9.1 million for the fourth quarter ended December 31, 2020. Research and development expenses for the year ended December 31, 2021 were $58.7 million compared to $27.2 million for the year ended December 31, 2020. The increases were primarily attributable to our Synergy and NEON studies, contract manufacturing and process development of our product candidates primarily for acazicolcept and ALPN-303, increased personnel costs and other direct research activities.

General and administrative expenses for the fourth quarter ended December 31, 2021 were $4.5 million compared to $3.0 million for the fourth quarter ended December 31, 2020. General and administrative expenses for the year ended December 31, 2021 were $14.6 million compared to $10.9 million for the year ended December 31, 2020. The increase was primarily attributable to increases in professional and legal services and personnel costs.
The Company expects that its current cash resources, combined with the $25 million up-front payment received from Horizon in January 2022 and the potential $30 million in pre-option exercise milestones payable under its option and license agreement with AbbVie, for the development and commercialization of acazicolcept, will be sufficient to fund its planned operations into 2024.

CymaBay Reports Fourth Quarter and Year Ended December 31, 2021 Financial Results and Provides Corporate Update

On March 17, 2022 CymaBay Therapeutics, Inc. (NASDAQ: CBAY), a clinical-stage biopharmaceutical company focused on developing therapies for liver and other chronic diseases with high unmet need, reported corporate updates and financial results for the fourth quarter and fiscal year ended December 31, 2021 (Press release, CymaBay Therapeutics, MAR 17, 2022, View Source [SID1234610302]).

Sujal Shah, President and CEO of CymaBay, stated, "2021 was a year of growth for CymaBay and included accomplishments that position CymaBay for long-term success. A non-dilutive, risk-sharing development financing agreement of up to $100 million signed with Abingworth in July, together with a $75 million public equity offering in November support the completion of our ongoing Phase 3 program for seladelpar in PBC. We now have over 120 sites activated across over 20 countries in our global registration study, RESPONSE, and expect these efforts to continue and ultimately drive the completion of enrollment in the first half of 2022. We have seen a high level of interest in our long-term safety study, ASSURE, where we have enrolled more than 120 patients from our prior studies of seladelpar in PBC. We were also excited to share additional data at The Liver Meeting 2021 that we believe demonstrate improved benefit of seladelpar between one to two years of treatment, and differentiation from other existing treatments in a population of PBC patients with more advanced disease."

"Heading into 2022, we are well positioned to deliver on our laser focus of improving the lives of patients with PBC. Although the pandemic and recent global unrest have presented our entire industry with evolving challenges, I am confident we have assembled talent across the organization that will allow us to achieve both our near-term goals and our longer-term vision of establishing a pipeline of opportunities for patients with unmet need. Despite these challenges, we have seen steady progress since re-initiating our development program in PBC in 2021. I’m also proud of the relationships we have established with patient communities, the medical community, and high-quality investors that all support the work we are dedicated to day-in and day-out."

Recent Corporate Highlights

Continued enrollment in RESPONSE, a 52-week, placebo-controlled, randomized, global, Phase 3 registrational study evaluating the safety and efficacy of seladelpar in patients with PBC. This study is targeting enrollment of 180 patients who have an inadequate response to, or intolerance to, ursodeoxycholic acid, in a 2:1 randomization to oral, once daily seladelpar 10 mg or placebo. The primary outcome measure is the responder rate at 52 weeks. A responder is defined as a patient who achieves an alkaline phosphatase level < 1.67 times the upper limit of normal with at least a 15% decrease from baseline and has a normal level of total bilirubin. Additional key outcomes of efficacy will compare the rate of normalization of alkaline phosphatase at 52 weeks and the level of pruritus at 6-months for patients with moderate to severe pruritus at baseline assessed by a numerical rating scale recorded with an electronic diary. To date we have over 120 sites activated across more than 20 countries.
Continued enrollment in ASSURE, an open-label, long-term study of seladelpar in patients with PBC intended to collect additional long-term safety data to support registration. To date we have enrolled over 120 patients in the study, building our already extensive safety database for seladelpar treated PBC patients.
Supported enrollment efforts in a Phase 2a proof-of-pharmacology study to evaluate the potential for MBX-2982, a GPR119 agonist, to prevent hypoglycemia in patients with type 1 diabetes. The study is being conducted by the AdventHealth Translational Research Institute in Orlando, Florida and fully funded by The Leona M. and Harry B. Helmsley Charitable Trust with CymaBay retaining full rights to MBX-2982.
Announced that results of analyses from two clinical studies of seladelpar were delivered during The Liver Meeting Digital Experience 2021 (TLMdX) of the American Association for the Study of Liver Diseases (AASLD), as follows:
Oral presentation titled "Long-Term Safety and Efficacy of Seladelpar in Patients with Primary Biliary Cholangitis" delivered by Dr. Marlyn J. Mayo, MD, highlighting the efficacy and safety of seladelpar during 2 years of treatment in patients with primary biliary cholangitis (PBC).
A clinical presentation titled "Efficacy and Safety of Seladelpar in Patients with Compensated Cirrhosis and Evidence of Portal Hypertension due to Primary Biliary Cholangitis" delivered by Dr. Cynthia Levy, MD, highlighting the treatment effects of seladelpar in compensated cirrhotic patients with portal hypertension after 3 months, which led to ALP changes of -30% in the 5 mg and -45% in the 10 mg groups.
Continued to grow our team from 40 to 59 employees during the year, including the hiring of two executive officers; Dr. Dennis Kim as Chief Medical Officer, a physician-scientist trained in endocrinology who brings significant clinical development and executive experience and Lewis Stuart as Chief Commercial Officer, an executive who brings a diverse set of experiences launching products in both the pharmaceutical and molecular diagnostics healthcare sectors.
Expanded the Board of Directors composition by appointing Thomas Wiggans a biopharma industry veteran and Janet Dorling a senior commercial executive at Gilead. Recently appointed Dr. Éric Lefebvre, the Chief Medical Officer of Pliant Therapeutics, to the Board.
Executed a non-dilutive financing transaction with Abingworth LLP for the development of seladelpar in PBC. CymaBay will receive up to $100 million of funding for seladelpar development costs, of which $75 million has been received to date. CymaBay has an option to receive an additional $25 million after the completion of enrollment of CymaBay’s Phase 3 RESPONSE clinical trial.
Completed public equity offering in November 2021, CymaBay sold 15,625,000 shares of common stock at $4.00 per share and pre-funded warrants to purchase 3,125,000 shares of common stock at $3.9999 per share. After deducting underwriting commissions and other estimated offering expenses, net proceeds of the offering were $70.5 million.
Held $194.6 million in cash, cash equivalents and short-term investments as of December 31, 2021. We believe that cash and investments on hand, together with committed capital available through the development financing agreement with Abingworth, is sufficient to fund CymaBay’s operating plan through 2023.

Fourth Quarter and Year Ended December 31, 2021 Financial Results

Research and development expenses for the three months ended December 31, 2021 and 2020 were $18.4 million and $10.7 million, respectively. Research and development expenses for the twelve months ended December 31, 2021 and 2020 were $64.5 million and $35.9 million, respectively. Research and development expenses in the three and twelve months ended December 31, 2021 were higher than the corresponding periods in 2020 primarily due to an increase in clinical trial activities associated with the development of seladelpar in PBC. In particular, cost increases were primarily driven by an expansion of our site activation, patient enrollment, and other clinical trial activities associated with RESPONSE and ASSURE, our two active global late-stage clinical trials in PBC.
General and administrative expenses for the three months ended December 31, 2021 and 2020 were $6.1 million and $5.2 million, respectively. General and administrative expenses for the twelve months ended December 31, 2021 and 2020 were $23.0 million and $16.7 million, respectively. General and administrative expenses in the three and twelve months ended December 31, 2021 were higher than the corresponding periods in 2020 due to higher employee compensation associated with the hiring of additional personnel and an increase in consulting and other expenses upon resumption of development of seladelpar in the second half of 2020.
Net loss for the three months ended December 31, 2021 and 2020 was $26.5 million and $15.8 million, or ($0.34) and ($0.23) per diluted share, respectively. Net loss for the twelve months ended December 31, 2021 and 2020 was $90.0 million and $51.0 million, or ($1.27) and ($0.74) per diluted share, respectively. Net loss was higher largely due to increases in clinical operating expenses, which were incurred following the resumption of our clinical development of seladelpar in PBC during the second half of 2020. We expect our operating expenses to increase in the future as we continue to execute on our clinical development plans.
Conference Call Details

CymaBay will host a conference call today at 4:30 p.m. ET to discuss fourth quarter and fiscal year end 2021 financial results and provide a business update. To access the live conference call, please dial 877-407-0784 from the U.S. and Canada, or 201-689-8560 internationally, Conference ID# 13726915. To access the live and subsequently archived webcast of the conference call, go to the Investors section of the company’s website at View Source

Scilex Holding Company, a Majority-Owned Subsidiary of Sorrento Therapeutics, Inc., to Become Publicly Traded Through a Merger With Vickers Vantage Corp. I

On March 17, 2022 Scilex Holding Company ("Scilex"), a majority-owned subsidiary of Sorrento Therapeutics, Inc. (Nasdaq: SRNE, "Sorrento"), a commercial biopharmaceutical company focused on developing and commercializing non-opioid therapies for patients with acute and chronic pain, and Vickers Vantage Corp. I (Nasdaq: VCKA; VCKAW) ("VCKA"), a special purpose acquisition company sponsored by Vickers Venture Fund VI Pte Ltd and Vickers Venture Fund VI (Plan) Pte Ltd, reported that they have entered into a definitive business combination agreement ("BCA"). Prior to the closing of the transaction, VCKA will be redomesticated as a Delaware corporation. Upon closing of the transaction, the combined company (the "Combined Company") will be renamed Scilex Holding Company, and its common stock and warrants are expected to be listed on Nasdaq under the ticker symbols "SCLX" and "SCLXW", respectively (Press release, Sorrento Therapeutics, MAR 17, 2022, View Source [SID1234610301]). The boards of directors of each of VCKA, Scilex and Sorrento have unanimously approved the proposed transaction. The closing of the transaction, which is expected to occur by the third quarter of 2022, is subject to the approval of VCKA’s shareholders and the satisfaction or waiver of certain other customary closing conditions.

"We are thrilled to have the opportunity to partner with the team at Scilex. We believe Scilex is a uniquely compelling company with excellent non-opioid pain management therapies, which we expect may become cornerstone therapies for treating many acute and chronic pain conditions worldwide," said Dr. Jeffrey Chi, Chief Executive Officer and Chairman of VCKA and Vice Chairman of Vickers Venture Partners.

More than 60% of U.S. opioid prescriptions are for the treatment of chronic low back pain (CLBP)1 despite the fact that opioids are associated with serious and potentially life-threatening side effects and have not demonstrated efficacy in the treatment of CLBP.2,3,4 In 2018, more than 67,000 drug overdose deaths occurred in the United States5 of which almost 47,000 (70%) were opioid-related. Over 70% of the 70,630 deaths in 2019 involved an opioid.6 Provisional data released by the Centers for Disease Control and Prevention showed drug overdose deaths rose by nearly 29% over a 12-month period ending in April 2021, to an estimated 100,306.7

"Scilex was advanced through key milestones, and we are proud of Scilex’s continued path of success, most notably with the FDA approval and commercialization of ZTlido along with the highly significant positive top-line pivotal Phase 3 results of SP-102 (SEMDEXA) previously announced in December 2021," said Henry Ji, Ph.D., Chairman and Chief Executive Officer of Sorrento and Executive Chairman of Scilex. "With Scilex on its way to becoming a publicly-traded entity, our unique model continues to demonstrate the multiple ways in which we are generating value at Sorrento, including equity stakes in public and private entities, royalties and milestone payments due to us from certain proprietary products, pharma collaborations worldwide to advance core programs, and most importantly, our rapidly progressing and advanced wholly-owned pipeline which we see as our major value driver going forward. In addition to Sorrento’s advanced pipeline of oncology, immunology and virology assets, its wholly and majority owned subsidiaries are an additional source of value and Scilex is now set to join the growing list of publicly-traded entities in which Sorrento is an investor, which also include Celularity Inc., which was funded by Sorrento at its inception."

The Combined Company is expected to have funds of up to $140 million held in VCKA’s trust account at closing before expenses, assuming no redemptions from Vickers Vantage Corp I’s existing public shareholders, and will be led by Scilex’s experienced management team, headed by Jaisim Shah, Chief Executive Officer. The Combined Company might raise additional capital through a PIPE or other financing method as it might see fit for the business, although there are no specific plans for such an offering at this time.

"I am proud of the many landmark milestones delivered by the Scilex team this past year, including completion of our phase 3 study for SP-102 (SEMDEXA) and a highly successful pivotal Phase 3 program demonstrating robust efficacy and safety in sciatica patients and the upcoming expected initiation of broad Phase 1 and 2 non-opioid programs for SP-102 (SEMDEXA) with both first-in-class and best-in-class potential in multiple areas of acute and chronic pain with high unmet patient need. We believe the efficacy and safety profile demonstrated by SP-102 (SEMDEXA) to date and the observed duration of effect represent important differentiating features of this potentially first-to-market non-opioid candidate for the many millions of sciatica patients who are confronting this very painful condition. I would like to thank the team at VCKA and existing shareholders and all of the teams at Scilex and Sorrento and our advisors for their dedication in preparing for this business combination. Today’s transaction will allow us to continue to pursue our vision to enhance lives for millions of patients with acute and chronic pain conditions," said Jaisim Shah, Chief Executive Officer of Scilex.

Available proceeds from the transaction are expected to fund commercialization plans for SP-102 (SEMDEXA), if approved, along with potential Phase 3 and Phase 2 clinical development programs. Scilex also intends to pursue additional indications for SP-102 (SEMDEXA) in the future. Scilex also plans to use the funding from the transaction to bolster the continued build out of the commercial team, enhance business development activities and support general corporate activities.

A corporate presentation describing Scilex’s development plans can be found at www.scilexholding.com.

Key Transaction Terms

Assuming no redemptions from VCKA’s shareholders, it is estimated that the current stockholders of Scilex will own approximately 88% of the outstanding shares of the Combined Company, assuming no debt adjustment. As part of the transaction, Scilex’s existing equity holders will roll 100% of their equity into the Combined Company. In connection with the transactions, VCKA’s sponsors have agreed to cancel 40% of their private warrants if redemptions exceed 75%.

The Combined Company is expected to have funds of up to $140 million held in VCKA’s trust account at closing before expenses, assuming no redemptions from VCKA’s shareholders, which is expected to occur by the third quarter of 2022. The close of the transaction is subject to the approval of VCKA’s shareholders and the satisfaction or waiver of certain other customary closing conditions.

The boards of directors of each of VCKA, Scilex and Sorrento have unanimously approved the proposed transaction.

The description of the transaction contained herein is only a summary and is qualified in its entirety by reference to the definitive agreement relating to the transaction. A copy of the definitive agreement, this press release and a corporate presentation will be filed by VCKA and Sorrento with the Securities and Exchange Commission (the "SEC") as exhibits to a Current Report on Form 8-K, which can be accessed through the SEC’s website at www.sec.gov.

Loeb & Loeb, LLP is serving as legal counsel to VCKA. Paul Hastings LLP is serving as legal counsel to Scilex.

KYORIN and Nanjing Neiwa Faith Signed License Agreement for Lascufloxacin in China

On March 17, 2022 KYORIN Holdings, Inc. reported that KYORIN Pharmaceutical Co., Ltd. (Head office: Chiyoda-ku, Tokyo, President & CEO: Shigeru Ogihara, "Kyorin"), a wholly owned subsidiary of KYORIN Holdings, Inc signed a license agreement with Nanjing Neiwa Faith Co., Ltd. (Head office: Nanjing, China, President & CEO: Xu Liang, "Nanjing Neiwa Faith") to grant Nanjing Neiwa Faith an exclusive license to develop and commercialize Lascufloxacin, an oral novel quinolone antibacterial drug in China (Press release, Kyorin, MAR 17, 2022, View Source [SID1234610300]).

Lascufloxacin is a novel quinolone antibacterial drug manufactured by Kyorin as a new therapeutic agent for respiratory and ENT infections. In Japan, Kyorin launched the product under the name of "Lasvic Tablets 75 mg" in January 2020.

Kyorin is developing activities to provide solutions in infection-related fields in Japan. By continuously providing the latest information in the respiratory and otolaryngology fields, which are the priority areas of Kyorin, Kyorin will contribute to further treatment of infectious diseases, promote this drug in China through the alliance with Nanjing Neiwa Faith, and continue to develop global licensing activities actively.

The impact of this transaction on business performance for the fiscal year ending March 2022 is to be negligible.

RedHill Biopharma Reports Operational Highlights and Fourth Quarter & Full Year 2021 Financial Results

On March 17, 2022 RedHill Biopharma Ltd. (NASDAQ: RDHL) ("RedHill" or the "Company"), a specialty biopharmaceutical company, reported its operational highlights and financial results for the fourth quarter and full year ended December 31, 2021 (Press release, RedHill Biopharma, MAR 17, 2022, View Source;full-year-2021-financial-results-301505002.html [SID1234610292]).

Dror Ben-Asher, RedHill’s Chief Executive Officer, said: "In 2021, RedHill’s team delivered record revenues against a pandemic backdrop, overall contribution of commercial operations to the company was positive for the first time in Q4/21 and positive late-stage clinical data for two novel oral COVID-19 drugs. A very strong fourth quarter for both Talicia and Movantik, coupled with disciplined cost-control measures across the business and intensive out-licensing and in-licensing activities, sets us up for continued organic and non-organic growth in 2022 and beyond."

Mr. Ben-Asher added: "Our R&D team’s drive in remaining at the forefront of the global search for much needed novel oral COVID-19 therapies has been outstanding. The challenge of developing any drug is not to be underestimated and RedHill’s R&D team has delivered exciting efficacy data with both opaganib and RHB-107, our variant-agnostic investigational drug candidates for the treatment of hospitalized and non-hospitalized COVID-19 respectively – a striking achievement."

Micha Ben Chorin, Chief Financial Officer at RedHill, added: "We have realigned focus within our 120-person strong customer-facing sales team in the U.S., providing even greater sales emphasis. In addition, a substantial decrease in our quarterly operational expenses achieved through a tight but agile cost-containment plan that allows for rapid re-adjustments based on compelling business need, are now starting to be realized following implementation in Q4/21 and we believe will continue to bear fruit throughout 2022. These activities are key in our ongoing ability to deliver record revenues, which amounted to $85.8 million for 2021, while keeping gross margins highly competitive, with commercial operations profitability expected in 2022. We are committed to continued substantial cost reduction in 2022."

Financial results for the quarter ended December 31, 2021 (Unaudited)[4]

Net Revenues for the fourth quarter of 2021 were $22.1 million, as compared to $21.6 million in the third quarter of 2021.

Cost of Revenues for the fourth quarter of 2021 were $19.3 million, as compared to $9.2 million in the third quarter of 2021. The increase was attributed to recognition of approximately $9 million impairment related to the intangible asset of Aemcolo for travelers’ diarrhea.

Gross Profit for the fourth quarter of 2021 was $2.7 million, as compared to $12.4 million in the third quarter of 2021. The decrease was attributed to the impairment recognized, as detailed above.

Research and Development Expenses for the fourth quarter of 2021 were $5.9 million, similar to the $5.8 million in the third quarter of 2021.

Selling, Marketing and General and Administrative Expenses for the fourth quarter of 2021 were $17.6 million, as compared to $24.0 million in the third quarter of 2021. The decrease was a result of the cost-containment plan implemented.

Operating Loss for the fourth quarter of 2021 were $20.7 million, as compared to $17.4 million in the third quarter of 2021. The increase is attributed to the impairment recognized, as detailed above, partly offset by the decrease in operating expenses, as detailed above.

Net Cash Used in Operating Activities for the fourth quarter of 2021 was $14.9 million, as compared to $19.0 million in the third quarter of 2021. The decrease was a direct result of the decrease in operating expenses, as detailed above.

Net Cash Provided by Financing Activities for the fourth quarter of 2021 was $17.6 million, mainly due to proceeds from equity offerings, as compared to Net Cash Used in Financing Activities of $1.0 million in the third quarter of 2021.

Financial results for the year ended December 31, 2021[4]

Net Revenues were $85.8 million for the year ended December 31, 2021, as compared to $64.4 million for the year ended December 31, 2020, a 33.2% increase in net revenues. The increase was attributable to the launch of Talicia and Movantik in March 2020 and April 2020, respectively, as well as growth in sales in comparable periods of both products.

Cost of Revenues were $49.4 million for the year ended December 31, 2021, as compared to $36.9 million for the year ended December 31, 2020. The increase was mostly attributable to recognition of approximately $9 million impairment related to the intangible asset of Aemcolo for travelers’ diarrhea and in-line with the increase in net revenues from our commercial products.

Gross Profit was $36.4 million for the year ended December 31, 2021, as compared to $27.5 million for the year ended December 31, 2020. The increase was primarily due to the increase in net revenues, and partially offset by the recognized impairment of Aemcolo intangible asset.

Research and Development Expenses were $29.5 million for the year ended December 31, 2021, as compared to $16.5 million for the year ended December 31, 2020. The increase was mainly attributable to the advancement of our COVID-19 programs with opaganib and RHB-107.

Selling, Marketing and General and Administrative Expenses were $88.0 million for the year ended December 31, 2021, as compared to $74.7 million for the year ended December 31, 2020. The increase was mainly attributable to the expansion of commercialization activities related to Talicia and Movantik and to expenses related to share-based compensation.

Operating Loss was $81.1 million for the year ended December 31, 2021, as compared to $63.7 million for the year ended December 31, 2020. The increase was mainly attributable to the intensified activities in both commercial operations and R&D.

Net Cash Used in Operating Activities was $65.0 million for the year ended December 31, 2021, as compared to $48.6 million for the year ended December 31, 2020. The increase was mainly attributable to the increase in operating loss, as described above.

Net Cash Provided by Financing Activities was $73.5 million for the year ended December 31, 2021, comprised primarily of proceeds from equity offerings. Net Cash Provided by Financing Activities for the year ended December 31, 2020, was $84.4 million, comprised primarily of debt and equity-based financing, partially offset by $16 million classified as restricted cash.

Liquidity and Capital Resources

Cash Balance[2] as of December 31, 2021, was $54.2 million, as compared to $51.5 million as of September 30, 2021, and approximately $46 million as of December 31, 2020[5].

Strategic investment in RedHill by South Korea’s Kukbo Co. ("Kukbo") – $5 million received and an additional $5 million investment expected per the agreement.

Opaganib[6] for COVID-19 licensed by Kukbo for South Korea for $1.5 million in upfront payment and additional payment up to $5.6 million in milestone payments and royalties on net sales.

Talicia for H. pylori licensed by Gaelan Medical for the United Arab Emirates, with $2 million upfront to be received plus milestones and royalties on net sales.

Discussions are ongoing with additional potential partners for Talicia in other territories.

Commercial Highlights

Movantik (naloxegol)[7]

Movantik is the market leader in the PAMORA class holding 73% market share. The Company’s drive and commitment to further growing Movantik and the PAMORA class, which has increased over the past 12 months, is delivering. In Q4/2021 Movantik had its best performance since RedHill’s launch, growing new prescriptions by 2.4% compared to the previous quarter.

Nearly 92% of insurance plans provide access for Movantik – best-in-class coverage – and in December 2021, the Company announced that Movantik had been approved for inclusion as preferred and unrestricted brand on a major National Medicare Part D formulary serving more than 10 million Americans as of January 1, 2022. Movantik’s total commercial coverage now extends to 151 million American patients’ lives and has grown to 46 million Medicare lives, with over 93% coverage of Medicare Part D lives.

In 2021 the Company also successfully brought to a close all presently pending Movantik patent litigation brought pursuant to the ‘Drug Price Competition and Patent Term Restoration Act’ (the Hatch-Waxman Act). The earliest licensed entry date of any generic naloxegol in the U.S. is October 1, 2030.

Talicia (omeprazole magnesium, amoxicillin and rifabutin)[8]

Talicia is now the most prescribed branded H. pylori therapy in the U.S. and achieved another record quarter, delivering a 25.5% increase in prescriptions compared to the previous quarter, reflecting 78.4% growth of Talicia as compared to Q4/2020.

In January 2022, the Company announced that it had entered into an exclusive license agreement with Gaelan Medical Trade LLC, a wholly owned subsidiary of the Ghassan Aboud Group (GAG), for Talicia in the United Arab Emirates (UAE). Under the terms of the agreement, RedHill will receive an upfront payment of $2 million and is eligible for additional milestone payments as well as tiered royalties up to mid-teens on net sales of Talicia in the UAE. Gaelan Medical received the exclusive rights to commercialize Talicia in the UAE, as well as a right of first refusal to commercialize Talicia in the Gulf Cooperation Council region (Saudi Arabia, Kuwait, Qatar, Bahrain and Oman) for a pre-determined period.

In October, Medi-Cal, California’s Medicaid Health Care program covering two million beneficiaries, added Talicia to its Contract Drug List (CDL) for H. pylori treatment, with no prior authorization required. This coverage expanded to 14 million beneficiaries on January 1, 2022. As of December 2021, total Talicia coverage stood at greater than 197 million American lives, equating to 8 out of ten lives.

Also in October 2021, the Company announced the grant of a new U.S. Patent covering Talicia. This patent reinforces the protection for Talicia through 2034, and the Company has listed this patent in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book.

Aemcolo (rifamycin)[9]

The Company has maintained promotion of Aemcolo in the fourth quarter of 2021 in anticipation of renewed post-COVID-19 travel opportunities for Americans. In December 2021, the exclusive license agreement between the Company and Cosmo was amended to allow for provision for either party to terminate the agreement upon 90 days’ notice at any time.

R&D Highlights

COVID-19 Program: Opaganib (ABC294640)

The Company previously announced top-line results from the oral opaganib global 463-patient Phase 2/3 study in hospitalized patients with severe COVID-19 pneumonia (NCT04467840).

Since the initial results were announced, extensive review of all the data has shown compelling and consistent efficacy in large and important sub-group analyses and, earlier this year, the Company announced results from several recently completed prespecified analyses from the study showing that opaganib significantly reduced mortality when given to patients who received remdesivir and corticosteroids, delivered a significant benefit in time to recovery and improved the median time to viral RNA clearance:

A prespecified mortality analysis, undertaken for all patients from the Phase 2/3 study who were receiving remdesivir and corticosteroids at baseline, demonstrated a significant 70.2% mortality benefit for opaganib-treated patients, with a mortality rate of 6.98% (n=3/43) for the opaganib arm + SoC versus 23.4% (n=11/47) for placebo + SoC by Day 42 (p-value=0.034).
A second prespecified analysis showed that opaganib delivered a significant 34% benefit in time to recovery, defined as achieving a score of 1 or less on the WHO Ordinal Scale by Day 14, with 37.4% of opaganib-treated patients (n=86/230) reaching this event versus 27.9% of patients (n=65/233) treated with placebo + SoC (p-value=0.013, Hazard Ratio 1.49).
A third prespecified analysis, of all oral opaganib’s Phase 2/3 study patients with positive PCR at screening, demonstrated that opaganib improved the median time to viral RNA clearance by at least 4 days. Treatment with opaganib resulted in viral RNA clearance in a median of 10 days while the median for clearance in the placebo arm was not reached by the end of 14-days treatment for placebo (Hazard Ratio 1.34; nominal p-value=0.043, N=437/463)
In December 2021, the Company also announced that because opaganib’s proposed mechanism of action is not impacted by spike protein mutations, opaganib is expected to be unaffected by mutations associated with Omicron and other known variants of concern.

Regulatory discussions are in progress, with opaganib data submissions in the U.S., Europe, UK and additional countries. Discussions remain ongoing with initial guidance requiring confirmatory data on potential path to approval received from the EU’s EMA, the U.S. FDA, UK’s MHRA and others. Data and other regulatory submissions are in process in multiple other countries. The Company continues its discussions with U.S. and other government agencies, non-governmental organizations and potential partners around potential funding to support the ongoing development of opaganib.

In March 2022, the Company announced that it has entered into an exclusive license agreement with Kukbo Co. Ltd., a South Korean corporation, which will receive the exclusive rights to commercialize opaganib for the treatment of COVID-19 in South Korea. Under the terms of the agreement, which adds to the previously announced strategic investment by Kukbo of up to $10 million, RedHill will in addition receive an upfront payment of $1.5 million and is eligible for $5.6 million in additional milestone payments, as well as low double-digit royalties on net sales of opaganib.

COVID-19 Program: RHB-107 (upamostat)[10]

RedHill continues to advance the Phase 2/3 study of novel, once-daily, orally-administered, antiviral drug candidate, RHB-107, for the treatment of non-hospitalized patients with symptomatic COVID-19 in the early course of the disease (NCT04723537), who do not require supplemental oxygen – the vast majority of COVID-19 patients. In March 2022, the Company announced positive top-line results from the Phase 2 part of the Phase 2/3 study, predominantly conducted in the U.S. (60/61 patients) as well as South Africa.

Although not powered for efficacy assessment, the study showed highly promising efficacy results delivering a 100% reduction in hospitalization due to COVID-19, with zero patients on the RHB-107 arm hospitalized with COVID-19 (0/41) compared to 15% on the placebo-controlled arm requiring hospitalization (3/20) (nominal p-value=0.0317). Furthermore, the study showed an 87.8% reduction in reported new severe COVID-19 symptoms, with only one patient on RHB-107 (2.4%, 1/41) compared to 20% (4/20) of patients on the placebo-controlled arm experiencing new COVID-19 related severe symptoms (nominal p-value=0.036).

The study met its primary outcome measure, demonstrating a favorable safety and tolerability profile of RHB-107. Study arms were well-balanced with respect to baseline disease severity, risk factors and vaccination status. Patients were also tested for the specific viral strain (last patient randomized November 12, 2021), with the most common variant being Delta, found in 62.5% of the patients that had next generation sequencing (NGS).

The Phase 2 part of the study was designed to evaluate safety for dose selection and to provide preliminary assessment of parameters to be used for efficacy evaluation in Part B. A total of 61 patients were enrolled in Part A and randomized on a 1:1:1 basis to receive one of two dose levels of RHB-107 or a placebo control.

Discussions with regulators to discuss next steps are expected during Q2/22.

RHB-204 – Pulmonary Nontuberculous Mycobacteria (NTM) Disease[11]

A U.S. Phase 3 study is ongoing in the U.S. to evaluate the efficacy and safety of RHB-204 in adults with pulmonary NTM disease caused by Mycobacterium avium Complex (MAC) infection (NCT04616924). Expansion of sites and the waning of COVID-19 is expected to increase the pace of enrolment.

The study protocol provides for 6 months co-primary endpoint of sputum culture conversion (SCC) and clinical outcome (patient-reported outcomes – PRO) in a randomized placebo-controlled design, followed by open label active treatment with RHB-204 for 12 months from conversion.

Conference Call and Webcast Information:

The Company will host a webcast today, Thursday, March 17, 2022, at 8:30 a.m. EDT, during which it will present key highlights for the fourth quarter and full year of 2021.

The webcast including slides will be broadcast live on the Company’s website, View Source, and will be available for replay for 30 days.