On November 13, 2020 Xenetic Biosciences, Inc. (NASDAQ:XBIO) ("Xenetic" or the "Company"), a biopharmaceutical company focused on advancing XCART, a personalized CAR T platform technology engineered to target patient- and tumor-specific neoantigens,reported its financial results for the three and nine months ended September 30, 2020 and provided a corporate update (Press release, Xenetic Biosciences, NOV 13, 2020, View Source [SID1234570903]).

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"We continue to make progress as we work to advance XCART through preclinical development and into a Phase 1 study as quickly as possible. This includes finalizing the protocol of our upcoming exploratory study in Belarus which will be used to evaluate the XCART process in a clinical setting," commented Jeffrey Eisenberg, Chief Executive Officer of Xenetic. "As we proceed through our preclinical development phase, we, along with our scientific advisors, continue to refine our analysis to identify which NHL patient populations would most benefit from XCART therapy, including those who can no longer be treated effectively with CD19 targeting therapeutics due to loss of the CD19 antigen."

XCART Platform Technology Overview: Significantly differentiated, proprietary approach to personalized CAR T therapy for the treatment of multiple tumor types of B-cell Non-Hodgkin lymphomas, an area of significant unmet need, with the potential to address an initial global market opportunity of over $5 billion annually.[1] Xenetic believes XCART has the potential to transform CAR T therapy.

Program Highlights:

Collaboration with Pharmsynthez and multiple academic institutions in Russia and Belarus to optimize the overall XCART workflow, including clinical manufacturing processes, and to ultimately dose B-cell non-Hodgkin lymphoma (NHL) patients.
Research and development collaboration with Scripps Research covering design and implementation of the preclinical development program, as well as method development activities supporting process development for clinical manufacturing.
PolyXen Platform Technology: Patent-protected platform technology designed for protein or peptide therapeutics, enabling next-generation biological drugs by prolonging a drug’s circulating half-life and potentially improving other pharmacological properties.

Program Highlights:

Exclusive License Agreement with Takeda Pharmaceuticals Co. Ltd. ("Takeda") in the field of coagulation disorders. Takeda currently has one active development program underway utilizing the PolyXen platform technology.
Royalty payments of approximately $0.3 million received in the first nine months of 2020 as the relevant product has now launched worldwide and continues to be rolled out by Takeda’s sublicensee.
Summary of Financial Results for Third Quarter 2020
Net loss for the nine months ended September 30, 2020 was approximately $9.7 million compared to a net loss of approximately $11.6 million for the same period in 2019. The results for the nine months ended September 30, 2020 included $6.3 million of non-cash expenses representing the impairment of indefinite-lived intangibles of $9.2 million less a $2.9 million income tax benefit. The results for the nine months ended September 30, 2019 included $6.3 million of non-cash expenses composed of in-process research and development expenses of $3.0 million and Goodwill impairment of $3.3 million, as well as $1.1 million of transactions costs related to our acquisition of XCART. Excluding the non-cash charges of $6.3 million for both the nine months ended September 30, 2020 and 2019, respectively, and the $1.1 million of transaction costs in 2019, adjusted net loss was $3.4 million and $4.2 million for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, working capital was $7.2 million compared to $9.7 million as of December 31, 2019. The decrease in working capital was primarily due to the Company’s net loss for the nine months ended September 30, 2020. The Company ended the quarter with approximately $7.1 million of cash.

Non-GAAP Measures
Adjusted net loss is a Non-GAAP financial measure, which is utilized by management in comparing our operating performance on a consistent basis. We present this non-GAAP financial measure because we believe such measure provides important supplemental information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP.