On August 13, 2018 Sun BioPharma, Inc. (OTCQB:SNBP), a clinical stage biopharmaceutical company developing disruptive therapeutics for the treatment of pancreatic diseases,reported financial results for the quarter ended June 30, 2018 (Press release, Sun BioPharma, AUG 13, 2018, View Source [SID1234528948]).

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Front-Line Combination PDA Study
The Company’s newest trial, a Phase 1a/1b combination of SBP-101 to be administered with gemcitabine and nab-paclitaxel in previously untreated patients with metastatic pancreatic ductal adenocarcinoma (PDA), enrolled the first patients on June 13, 2018. Patients were enrolled at the Adelaide Cancer Centre in Adelaide, Australia under the direction of Associate Professor Dusan Kotasek and at the University of Florida Health Cancer Center in Gainesville,
Florida under the direction of Thomas J. George, MD, F.A.C.P. The Phase 1a portion of this study will treat up to 18 PDA patients in three cohorts in order to determine a recommended dose of SBP-101 to be given in combination with standard treatment. The Phase 1b portion will be an expansion at the recommended dose of SBP-101 and will guide SBP-101’s subsequent development for patients with PDA. This multi-center, front-line study has 3 sites in Australia, The Austin Health Cancer Trials Centre in Melbourne, The Adelaide Cancer Centre in Adelaide, The Blacktown Cancer and Haematology Centre in Sydney and one site in the United States, The University of Florida Health Cancer Center in Gainesville, Florida.

Suzanne Gagnon, MD, Chief Medical Officer for Sun BioPharma, Inc. commented, "The Company and our investigators are excited to have begun this first cohort of patients in the Phase 1a portion of this study. The clinics are enthusiastic about utilizing SBP-101 in front-line combination for previously untreated patients with metastatic PDA. We all will be closely monitoring these patients as they move through the protocol for this study."
Partial Close of Private Placement of Common Stock and Warrants During the quarter ended June 30, 2018 the Company entered into Securities Purchase Agreements (the "2018 Purchase Agreements") with accredited purchasers. The previously announced closing on May 16, 2018 totaled $1.0 million. Total common stock issued in this Private Placement was 216,000 shares with warrants to purchase up to an aggregate of 216,000
additional shares.

David B. Kaysen, President and CEO commented, "This private placement, managed by the Company, when completed, will provide the capital necessary to continue the first phase of our new combination trial for SBP-101. We anticipate early results from this first portion of the trial by early fourth quarter of 2018 depending on rate of patient enrollment. We are excited to take SBP-101 into the next stage of the clinical development process."
Financial Results for the Three and Six Months ending June 30, 2018

Operating Results
General and administrative ("G&A") expenses increased 34.3% to $654,000 in the second quarter of 2018 up from $487,000 in the second quarter of 2017. G&A decreased 24.5% to 1.3 million in the six months ended June 30, 2018, down from $1.7 million in the six months ended June 30, 2017. The increase in the second quarter is due primarily to an increase in stock compensation expense. The decrease in the six months ended June 30, 2018 is due primarily to lower salary expense associated with the waiver of contingent payments which occurred in February of 2018.
Our research and development ("R&D") expenses decreased 34.5% to $442,000 in the second
quarter of 2018 down from $675,000 in the second quarter of 2017. R&D decreased 27.8% to 1.0
million in the six months ended June 30, 2018, down from $1.4 million in the six months ended
June 30, 2017. The decrease for both the quarter and the six months ended June 30, 2018 was
due primarily to decreased salary expense associated with fewer employees and modest
spending on the Company’s new clinical study which just began dosing patients in the current
quarter.

Other net expense was $1.5 million and $364,000 for the three months ended June 30, 2018 and 2017, respectively. Other expense in the current quarter was primarily interest expense on the Company’s convertible notes payable, including the write-off of the outstanding debt discount on May 16, 2018 when the notes were converted to common stock and warrants per the original terms of the notes. Other expense in the quarter ended June 30, 2017 was prima Balance Sheet and Cash Flow

Total cash was $0.9 million as of June 30, 2018, compared to $152,000 as of December 31, 2017. Total current assets were $1.5 million and $767,000 as of June 30, 2018, and December 31, 2017, respectively. Thisincrease in cash is the result of our sale of equity securities in the 2018 Purchase Agreements totaling $2.3 million for the six months ended June 30, 2018 partially offset by the use of cash to fund operations. Current liabilities decreased to $1.4 million as of June 30, 2018, compared to $4.2 million as of December 31, 2017. The decrease in current liabilities resulted primarily from the conversion of the Company’s convertible notes payable, totaling approximately $3.3 million in principal and accrued interest, for common stock and warrants and from the waiver of contingent payment obligations of $1.1 million.

Net cash used in operating activities was $1.6 million in the six-months ended June 30, 2018, compared to $2.4 million in the same period of the prior year. The net cash used in each of these periods primarily reflects the net loss for these periods and was partially offset by the effects of changes in operating assets and liabilities. In the six months ended June 30, 2017, the net loss is also offset by non-cash charges recorded for the loss on induced debt conversion and sharebased compensation.

About SBP-101
SBP-101 is a first-in-class, proprietary, polyamine compound designed to exert therapeutic effects in a mechanism specific to the pancreas. Sun BioPharma originally licensed SBP-101 from the University of Florida Research Foundation in 2011. The molecule has been shown to be highly effective in preclinical studies of human pancreatic cancer models, demonstrating superior activity to existing FDA-approved chemotherapy agents. Combination therapy potential has also been shown for pancreatic cancer. SBP-101 is expected to differ from current pancreatic cancer
therapies in that it specifically targets the exocrine pancreas and has shown efficacy against primary and metastatic disease in animal models of human pancreatic cancer. Therefore management believes that SBP-101 may effectively treat both primary and metastatic pancreatic cancer, while leaving the insulin-producing islet cells and non-pancreatic tissue unharmed. The safety and metabolic profile demonstrated in our first-in-human safety study further supports
evaluation of the potential for additive or synergistic effects in combination with current standard pancreatic cancer treatment.