On March 5, 2020 Newron Pharmaceuticals S.p.A. ("Newron") (SIX: NWRN, XETRA: NP5), a biopharmaceutical company focused on the development of novel therapies for patients with diseases of the central and peripheral nervous system, reported its financial results and operational highlights for the year ended December 31, 2019, and provided an outlook for 2020 (Press release, Newron Pharmaceuticals SpA, MAR 5, 2020, View Source [SID1234555228]).

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Highlights:

Sarizotan (Rett syndrome)

Newron successfully completed enrolment of 129 patients in the STARS Phase III study and advanced the study towards the end of the 24-week, double-blind treatment period, with the clinical database locked and blinded
Newron participated in a meeting with the U.S. Food and Drug Administration (FDA) to discuss the STARS study statistical analysis plan, ahead of STARS clinical trial data unblinding, and now expects top-line results in H1 2020
The FDA granted Rare Pediatric Disease Designation for sarizotan, following an earlier decision to grant sarizotan Orphan Drug Designation
Evenamide (Schizophrenia)

Newron and the FDA have agreed on the design and conduct of explanatory studies with Evenamide required to address previously announced potential safety issues raised by the FDA, including a four-week explanatory study in patients with schizophrenia; initial results in rats and humans are expected in Q3 2020
Subject to the successful completion of these additional studies, Newron intends to commence its proposed Phase III clinical trial program with Evenamide comprising of two efficacy studies
Xadago/safinamide (Parkinson’s disease)

Zambon and its regional partners have launched safinamide in Australia, Canada and Colombia and received marketing authorization in Brazil and the UAE; Meiji Seika and partner Eisai have launched safinamide in Japan
Successful negotiations with the Italian authorities have resulted in the reimbursement cap being removed, allowing for further potential revenue growth
Progress made in plans to perform the levodopa-induced dyskinesia (PD LID) study with Xadago
Zambon previously held discussions with the FDA on the design of a potentially pivotal efficacy study to evaluate the effects of Xadago/safinamide in patients with PD LID
Intention is to perform the study in the US, Europe and Asia/Australia
Zambon acknowledges Newron’s experience in the development of Xadago in patients with Parkinson’s disease; discussions to have Newron as the party responsible for conducting the study; Zambon will remain associated with the study
Financial terms to stay unchanged
Corporate

Newron received two tranches of funding from the European Investment Bank of EUR 10 million and EUR 7.5 million respectively, out of a total of up to EUR 40 million; this funding is used to boost the Company’s R&D activities and support its pivotal and post-approval CNS development programs
In addition to its primary listing on the Swiss Stock Exchange, Newron began trading in Germany on the Düsseldorf Stock Exchange and XETRA to facilitate access to Newron’s shares for investors based in the EU via EU brokers
Cash (incl. Other current financial assets) as of December 31, 2019 is EUR 39.2 million
Stefan Weber, Newron’s Chief Executive Officer, commented:

"2019 has been a successful year of strategy execution for Newron. We are pleased to have continued to develop and mature our pipeline of innovative therapies for central and peripheral nervous system diseases. We have made significant progress with our STARS clinical study, advancing the study to the end of the 24-week, double-blind treatment period, with the clinical database locked and blinded. We now expect to announce top-line results from the study later in H1 2020."

Stefan Weber continued: "We are pleased that our partners worldwide were successful in launching safinamide in Australia, Canada, Colombia and Japan and we hope that more patients worldwide will gain access to safinamide through further launches in the coming months. Prior to the start of our Phase III development program with Evenamide in schizophrenia, we have initiated additional short-term explanatory studies which we expect to report initial results in Q3 2020. We would like to thank all our shareholders for their continued support and confidence in Newron, and we look forward to updating markets on our progress throughout 2020."

Sarizotan

In 2019, Newron made significant progress with its STARS clinical study, completing patient recruitment, with 129 Rett syndrome patients qualified and enrolled, and more than 85% of enrolled patients completing the 24-week, double-blind period, have continued into the long-term open-label extension. This is an indicator of the critical need within the Rett syndrome community and demonstrates the potential of a new treatment option such as sarizotan.

In addition, the U.S. Food and Drug Administration (FDA) decided to grant a Rare Pediatric Disease Designation to sarizotan, which followed earlier decisions by the U.S. and EU authorities to grant Orphan Drug Designations to this compound for the U.S. and the EU. Newron believes that this highlights the large unmet medical need in Rett syndrome, as well as represents progress towards potential marketing authorization with U.S., Canadian and EU regulatory agencies in the future. This designation also represents progress towards qualifying sarizotan for a rare pediatric disease priority review voucher upon potential future U.S. marketing approval.

A communication from the FDA in December suggested that Newron discuss the Company’s statistical analysis plan in a meeting prior to unblinding the STARS clinical trial results. The clinical database has been locked and remains blinded. We currently expect unblinding of the STARS clinical trial data and disclosure of the top-line results in H1 2020. Subject to a positive study outcome, our goal is to initiate discussions with the regulatory agencies towards filing of the dossiers for marketing authorization. Upon regulatory approval, Newron intends to commercialize sarizotan for Rett syndrome in the U.S. and – if viable – in key EU territories.

As part of its commitment to the rare disease patient community, Newron is conducting a landmark International Burden of Illness study, partnered with the global Rett syndrome community. The survey outreach launched in the beginning of November 2019 in the U.S. and aims to deliver data and analytics to quantify the physical, emotional and financial challenges of Rett syndrome for patients, their families and caregivers. In February 2020, this survey outreach was expanded to reach families and caregivers in the U.K., Germany, Italy and Australia.

Evenamide

In May, the FDA requested that Newron complete additional short-term explanatory studies in rats and human subjects to address questions on findings from a recently completed pre-clinical study of Evenamide. The Company engaged with the FDA in order to address the agency’s concerns prior to the initiation of the Phase III development program. In early January 2020, Newron announced that it had reached agreement with the FDA on the design and conduct of these explanatory studies with Evenamide, as well as the protocol for a first, four-week explanatory study in patients with schizophrenia. Newron expects to see initial results from these additional studies in rats and humans in Q3 2020.

Subject to the successful completion of these studies, Newron intends to commence its proposed Phase III clinical trial program with Evenamide in two pivotal efficacy studies in patients with schizophrenia. One for patients experiencing worsening of psychosis on atypical antipsychotics, and the other study in ultra-treatment-resistant schizophrenia patients not responding to clozapine, with the latter representing an orphan-like indication affecting approximately 20,000 to 25,000 patients in the U.S. (with similar numbers in the EU). Positive results in both studies could lead to Evenamide being the first add-on therapy for the treatment of patients with positive symptoms of schizophrenia who show an inadequate response to their current atypical medication. In key territories, Newron expects to commercialize Evenamide itself in the treatment-resistant schizophrenia indication.

Xadago/safinamide

In 2019, Meiji Seika together with Eisai announced the approval and launch of safinamide in Japan, under the brand name Equfina. Seqirus launched Xadago (safinamide) in Australia, Zambon in Colombia, and Valeo Pharma in Canada under the brand name Onstryv. Xadago has received marketing approval in Brazil and the United Arab Emirates and dossiers for marketing authorization are currently under review in Mexico and Israel. Newron is pleased with this progress and remains optimistic for additional launches in 2020.

Newron’s total income from the marketed territories increased by 75% over the prior year, to EUR 7.0 million, of which EUR 2.3 million is due to one-time non-refundable milestone payments. The Company expects further growth in Europe, aided by the cap on reimbursement being removed in Italy effective March 1, 2019.

Newron progresses in the plans to perform the LID study with Xadago: Zambon had previously held discussions with the FDA on the design of a potentially pivotal efficacy study to evaluate the effects of Xadago/safinamide in patients with PD LID. The intention is to perform the study in the U.S., Europe and Asia/Australia.

Zambon acknowledges Newron’s experience in the development of Xadago in patients with Parkinson’s disease and there have been discussions to have Newron as the party responsible for conducting the study. Zambon will remain associated to the study. Financial terms will stay unchanged: Newron will make a fixed financial contribution to the study, in return for a one-time milestone payment and a greater share of royalties should the study lead to a label extension.

Financial Highlights:

In 2019, Xadago-related payments received increased by 75% (EUR 7.0 million versus EUR 4.0 million in 2018), including a one-time milestone payment for approval in Japan of net EUR 2.0 million.
At the same time, Newron’s net R&D expenses increased to EUR 17.4 million from EUR 9.8 million in 2018, largely due to the ongoing STARS study in Rett syndrome and work relating to the preparation for the two pivotal efficacy studies in patients with schizophrenia.
Newron received Italian R&D tax credits of EUR 5.0 million that can be offset with future tax and social contribution payments by the Company, versus EUR 5.9 million in 2018.
In 2019, G&A expenses reached EUR 9.9 million compared to EUR 8.8 million in 2018 (increase refers to evaluation of and preparation for additional listings of Newron’s shares).
In 2019, Newron reported a net loss of EUR 20.2 million, compared to EUR 15.0 million in 2018.
Cash used in operating activities has increased to EUR 22.2 million from EUR 16.0 million in 2018.
Cash and Other current financial assets at December 31, 2019 were at EUR 39.2 million, compared to EUR 43.9 million at the beginning of the year.
Financial Summary (IFRS):

(1): The Group adopted in 2019, for the first time, the new standard IFRS 16 Leases applying the full retrospective method that requires the restatement of previous financial statements.

Newron’s full 2019 Annual Report is available on www.newron.com/financial-report-2019

Outlook for 2020:

"2020 will be an important year for Newron, with sarizotan in late-stage clinical development and Evenamide poised to enter a Phase III pivotal program. We look forward to reporting on our meeting with the FDA on the statistical plan for our STARS study and remain confident that we can address the FDA’s questions around Evenamide. We are encouraged by the continued success of our global partners in the approvals and launches of safinamide and expect these to continue into 2020. We started 2020 with total available funds of up to EUR 61.7 million, including the EUR 22.5 million of EIB funds not yet drawn, which will cover the pursuit of Newron’s development programs and operations as currently contemplated beyond 2021," outlined Stefan Weber, CEO of Newron.

2020 Shareholders’ Meeting Agenda:

Newron’s Board of Directors has approved the below agenda for the March 31, 2020, Shareholders’ meeting, which will take place at the Company’s registered office (Via Antonio Meucci 3) in Bresso (Mi), Italy, starting at 10:00 am CET. The formal invitation to shareholders will be issued and disclosed in the statutory papers on or around March 5. The full invitation and supporting material will be made available on the Company’s website on the same date. The agenda is as follows:

Approval of the balance sheet as of 31 December 2019
Appointment of the members of the Board of Directors, after determination of the relevant number, for the financial years 2020, 2021 and 2022 and, therefore, until the approval of the financial statements as of December 31st, 2022, as follows:
– Ulrich Köstlin, in quality of Chairman of the Board and non-executive director;
– Stefan Weber, in quality of executive director;
– Patrick Langlois, in quality of non-executive director;
– Robert Leslie Holland, in quality of non-executive director;
– Luca Benatti, in quality of non-executive director; and,
– Donald deBethizy, in quality of non-executive director

Determination of the remuneration of the Board of Directors

Dial-in details to the media/analyst/investor conference on March 5, 2020, 04:00 pm CET:

The Newron management team will present the 2019 full-year results and provide an update and guidance for 2020. The conference call can be accessed via the following dial-in numbers:

Switzerland/Europe: +41 (0)58 310 50 00
United Kingdom: +44 (0)207 107 0613
United States: +1 (1)631 570 5613
The slide deck for the call is available at www.newron.com/downloads/reports-presentations–webcasts/2020

Upcoming events:

AGM 2020: March 31, 2020
Half-year report 2020: September 15, 2020

On March 5, 2020 EyePoint Pharmaceuticals, Inc. (NASDAQ: EYPT), a pharmaceutical company committed to developing and commercializing innovative ophthalmic products, reported financial results for the fourth quarter and full year ended December 31, 2019 and highlighted recent corporate developments (Press release, pSivida, MAR 5, 2020, View Source [SID1234555227]).

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"Q4 2019 was a pivotal quarter for EyePoint as we continued our commercial momentum, serving an increasing number of patients who suffer from ocular diseases and need better treatment options," said Nancy Lurker, President and Chief Executive Officer of EyePoint Pharmaceuticals. "Our commercial launch initiatives for DEXYCU and YUTIQ are driving increased reception and adoption from the ophthalmology community resulting in strong customer demand and sales growth in the fourth quarter for both products. We anticipate that these initiatives coupled with additional access agreements with ambulatory surgery centers and integrated healthcare networks, continued target account penetration and education efforts with key opinion leaders will continue to drive customer demand throughout 2020."

Ms. Lurker continued, "We are very excited about our lead development asset EYP-1901, an anti-VEGF, tyrosine kinase inhibitor (TKI) six-month sustained release potential therapy using our bioerodible Durasert technology targeting wet age-related macular degeneration, diabetic retinopathy and retinal vein occlusion. These indications represent large markets with patient populations in need of treatments that require fewer injections and more consistent drug delivery to control their serious eye diseases."

Commercial Performance in Fourth Quarter 2019

DEXYCU (dexamethasone intraocular suspension) 9% for the treatment of post-operative inflammation following ocular surgery

Customer demand, represented as units purchased by ambulatory surgical centers from the Company’s distributors, was up 111% over Q3 with repeat customers representing 98% of Q4 order volume.

Since launch, over 14,000 patients have been treated with DEXYCU.

The Company secured multiple new agreements for expanded access of DEXYCU, including contracts with The Vision Center Network of America, LLC (VCNA) and EyeSouth Partners which collectively perform approximately 115,000 cataract surgeries per year. The Company is actively negotiating agreements with additional group purchasing organizations and networks.

YUTIQ (fluocinolone acetonide intravitreal implant) 0.18 mg for chronic non-infectious uveitis affecting the posterior segment of the eye

Customer demand, represented as units purchased by physicians from the Company’s distributors, was up 59% over Q3, driven by underlying growth and the permanent and specific J-Code for YUTIQ in effect as of October 1, 2019.

Repeat customers represented 87% of Q4 order volume, and importantly, 42% of the target account list has ordered, including 98% of the treating uveitis specialists, representing solid adoption with continued growth opportunity.

R&D Highlights

In March 2020, the Company announced positive topline 36-month follow-up data from the second Phase 3 trial of YUTIQ for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. This second double-masked, randomized Phase 3 trial of YUTIQ enrolled 153 patients in 15 clinical centers in India, with 101 eyes treated with YUTIQ and 52 eyes receiving sham injections. At 36-months, the recurrence rate in YUTIQ randomized eyes was significantly lower than in sham treated eyes (46.5% vs. 75.0%, respectively; p=0.001). Visual acuity gains or losses of 3-lines or more were both similar between treatment groups. Safety data showed no unanticipated side effects at each follow-up timepoint at 12, 24 and 36-months. These positive results were consistent with the findings from the first Phase 3 study of YUTIQ and provide further validation of its long-term ability to reduce uveitic flares.

In February 2020, the Company signed an exclusive license agreement with Equinox Science, LLC, to develop vorolanib, a TKI targeting vascular endothelial growth factor (VEGF) receptors for the treatment of wet age-related macular degeneration, diabetic retinopathy and retinal vein occlusion. Vorolanib is being developed as EYP-1901 utilizing Eyepoint’s bioerodible Durasert technology as a potential 6-month intravitreal sustained release treatment option. The Company recently completed a positive Type B pre-Investigational New Drug (IND) meeting with the U.S. Food and Drug Administration (FDA) clarifying the pathway for a Phase 1 clinical trial that is expected to provide data in the second half of 2021. Under the terms of the agreement, EyePoint made an upfront payment of $1 million and is required to make additional payments upon the achievement of certain developmental and regulatory milestones, as well as the payment of post-commercialization royalties.

Positive retrospective case study data supporting DEXYCU were highlighted in an oral presentation at the 2020 Caribbean Eye Meeting in an oral session entitled, "Drug Delivery: Real-World Experience With Dexamethasone Intraocular Suspension". The ongoing retrospective study is designed to provide large-scale, real-world data on early experiences with DEXYCU from surgeons. Interim results presented are from 154 patients administered DEXYCU with each time point of data based on patient chart data and frequency of measurement by participating physicians. The proportion of patients with complete anterior chamber cell clearing (cell score=0) was 47.5%, 50.0%, 84.1% and 87.5% at postoperative day 1, 8, 14 and 30, respectively. The proportion of patients with no anterior chamber flares (flare score=0), another measurement of inflammation, was 77.7%, 98.5%, 98.8% and 99.1% at postoperative day 1, 8, 14 and 30, respectively. Mean intraocular pressure at postoperative day 1 was 17.6mmHg, with levels decreasing through to postoperative day 30.

Corporate Developments

In February 2020, the Company completed an underwritten public offering of 15,000,000 shares of its common stock at a public offering price of $1.45 per share. The gross proceeds of the offering were $21,750,000, before deducting the underwriting discounts and commissions and other transaction expenses. In addition, underwriters were granted a thirty-day option to purchase up to an additional 2,250,000 shares of common stock at the public offering price, less underwriting discounts and commissions. This offering closed on February 25, 2020.

In January 2020, the Company signed an exclusive license agreement with Ocumension Therapeutics for the development and commercialization of DEXYCU for the treatment of post-operative inflammation following ocular surgery in Mainland China, Hong Kong, Macau and Taiwan. Under the terms of the agreement, EyePoint received an upfront payment of $2 million and is eligible to receive up to an additional $12 million if certain prespecified development, regulatory and commercial sales milestones are achieved by Ocumension, as well as royalties on future product sales. EyePoint maintains worldwide development and commercialization rights outside of the territories licensed to Ocumension.

In November 2019, George O. Elston was appointed Chief Financial Officer and Head of Corporate Development. Mr. Elston brings more than 25 years of diverse financial and senior leadership experience in the biopharmaceutical sector with both global publicly-traded and privately-held organizations. He most recently served as Chief Financial Officer and Head of Corporate Development at Enzyvant Therapeutics and has also held senior executive roles at 2X Oncology, Inc, Juniper Pharmaceuticals, Inc., KBI Biopharma and Optherion, Inc.

Review of Results for Fourth Quarter Ended December 31, 2019

For the three months ended December 31, 2019, total revenue was $8.6 million compared to $2.4 million in the corresponding quarter in 2018. Net product revenue was $7.9 million, with $4.8 million for YUTIQ and $3.1 million for DEXYCU. There was no net product revenue in the corresponding quarter in 2018.

Net revenue from licenses, royalties and collaborations for the three months ended December 31, 2019 totaled $750,000 compared to $2.4 million in the corresponding quarter in 2018. The prior year quarter included $1.7 million from an up-front licensing fee for YUTIQ.

Operating expenses for the three months ended December 31, 2019 increased to 17.6 million from $13.4 million in the prior year period, due primarily to investments in sales and

marketing infrastructure and program costs, and cost of sales related to product revenue. Non-operating expense, net, for the three months ended December 31, 2019 totaled $1.4 million of net interest expense. Net loss for the three months ended December 31, 2019 was 10.4 million, or $0.10 per share, compared to a net loss of $11.6 million, or $0.12 per share, for the prior year quarter.

Review of Results for Full Year Ended December 31, 2019

For the full year ended December 31, 2019, total revenue was $20.4 million compared to $4.6 million in the corresponding period in 2018. Net product revenue was $16.8 million, with $12.0 million for YUTIQ and $4.8 million for DEXYCU. There was no net product revenue in 2018.

Net revenue from licenses, royalties and collaborations for the full year ended December 31, 2019 totaled $3.5 million compared to $4.6 million in the corresponding period in 2018.

Operating expenses for the full year ended December 31, 2019 increased to $68.2 million from $43.6 million in the prior year period, due primarily to investments in sales and marketing infrastructure and program costs, increase in personnel expenses related to senior management additions and the full year impact of prior additions, and cost of sales related to product revenue, partially offset by a decrease in research and development expense. Non-operating expense, net, for the full year ended December 31, 2019 totaled $8.9 million and consisted of $5.1 million of net interest expense and $3.8 million from the loss on extinguishment of debt related to the payoff of the SWK term loan. Net loss for the full year ended December 31, 2019 was $56.8 million, or $0.54 per share, compared to a net loss of $86.1 million, or $1.27 per share, for the prior year period.

Cash and cash equivalents at December 31, 2019 totaled $22.2 million compared to $31.8 million at September 30, 2019.

Financial Outlook

We expect that the Company’s cash and cash equivalents combined with the February 2020 underwritten public offering proceeds and projected cash inflows from anticipated YUTIQ and DEXYCU product sales can fund the Company’s operating plan into 2021.

Fourth Quarter and Full Year 2019 Financial Results Conference Call

Eyepoint Pharmaceuticals will host a conference call and webcast to discuss fourth quarter and full year 2019 financial results on Thursday, March 5, 2020 at 8:30 AM ET. To access the conference call, please dial (877) 312-7507 from the U.S. and Canada or (631) 813-4828 (international) at least 10 minutes prior to the start time and refer to conference ID 7314529. A live webcast will be available on the Investor Relations section of the corporate website at View Source A replay of the webcast will also be available on the corporate website.

On March 5, 2020 Enzo Biochem, Inc. (NYSE:ENZ), an integrated diagnostics company focusing on delivering and applying advanced technology to produce affordable, reliable diagnostic products and services, reported results for the fiscal second quarter ended January 31, 2020 (Press release, Enzo Biochem, MAR 5, 2020, View Source [SID1234555226]).

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The Company reported both operational and financial progress against its stated objective to provide a cost-effective, comprehensive menu of molecular diagnostic products and services.

On February 11, 2020, Enzo announced it received New York State approval for its CT/NG/TV tests using liquid-based cytology sample collection on its proprietary GenFlex platform. GenFlex is a sample-to-result molecular diagnostic platform that includes sample collection, sample processing, amplification and detection (utilizing AMPIPROBE technology). Compared favorably to all other proprietary platforms dominating the diagnostic testing market, Enzo’s GenFlex platform offers 30-50% cost-savings over current closed systems. GenFlex addresses the $450 million annualized global diagnostic market for the detection of chlamydia trachomatis (CT), neisseria gonorrhoeae (NG), and trichomonas vaginalis (TV) as well as the $1.3 billion Women’s Health market. Extensions of the GenFlex platform, which Enzo is currently developing, could eventually address the entire $7 billion molecular diagnostic market.

The Company’s laboratory services segment recognized top-line growth of 4% year-over-year to $12.5 million in the second quarter. The lab segment experienced growing accession counts sequentially and year-over-year with more than 813,000 accessions in the last twelve months period. Days Sales Outstanding in the laboratory segment improved to 43 days in the second quarter, a 23 day improvement from 66 days in the previous year’s period. Furthermore, gross margins expanded 1,000 basis points to 18.1% in the second quarter.

The products segment remained profitable despite continued investment in product development. The division’s order value (average order size by dollar amount at which its products are sold) experienced its third straight quarter of sequential growth. This trend has continued into the first month of the third quarter. The product segment has experienced its fourth consecutive quarter of gross margins above 50% despite fluctuations in product mix and order timing. Overall, operating results from the two segments improved by $1.7 million through the initiation of cost cutting and growth initiatives.

Enzo continues to make solid progress in its previously announced program to realize more than $10 million in annualized cost savings. Benefits are already being realized, and full implementation is anticipated by the end of this year.

Highlights for the Quarter

•New Commercial Platform: Enzo received New York State Department of Health approval for its CT/NG/TV tests using liquid-based cytology sample collection on its proprietary GenFlex platform. GenFlex is a commercially available sample-to-result molecular diagnostic platform that includes sample collection, sample processing, amplification and detection. The GenFlex open system delivers high-throughput, high capacity, workflow efficiency and flexibility at a much greater level of affordability than existing systems. This is the latest successful development in Enzo’s strategic plan to provide a cost-effective, comprehensive menu of molecular diagnostic products and services.
•Therapeutics Progress: Enzo continues to explore various avenues to unlock value in Enzo Therapeutics, a biopharmaceutical subsidiary of Enzo Biochem. Alternatives under consideration include a possible spin-off, sale, joint venture or licensing of its intellectual property. Also, underscoring Therapeutics’ depth of opportunity, subsequent to the quarter end Enzo reported the publication of a Study Detailing a Promising Activity of Drug Candidate SK1-I in a Model of Lupus.
•Board / Management Additions: During the second quarter, Rebecca Fischer, CFO of Bellevue Hospital, was appointed as a new independent Director and David Bench was appointed as the Chief Financial Officer of Enzo. Subsequent to the quarter end, Fabian Blank and Peter Clemens IV were also added as directors.
•Patent Portfolio: The Company has built a substantial portfolio of intellectual property assets, comprised of 463 issued patents worldwide and over 75 pending patent applications, along with extensive enabling technologies and platforms. Enzo is currently evaluating its robust intellectual property portfolio and will continue to aggressively defend its patents.

Elazar Rabbani, PhD., Chairman and Chief Executive Officer, Commented:

"Enzo showed strong progress against many of our important growth initiatives during the second quarter. With the arduous proxy contest behind us, we welcome our new Directors to our

Board and look forward to working collaboratively to capitalize on our distinct and highly promising market position in the molecular diagnostics marketplace as well as our immunoassay, immunohistochemistry and cytology offerings. New York State approval of our proprietary GenFlex molecular diagnostics platform provides additional validation of our program as we focus on the next phase of commercialization of these products and services and we are preparing to engage with the FDA to secure the final stage of approval. This milestone achievement highlights our continued ability to deliver high performance, open, flexible, adaptable and cost-effective products, devices and services to a diagnostic industry that continues to be impacted by regulatory price cuts and sustained high product costs.

"Enzo’s strength in technology and product development is illustrated by GenFlex’s rapid development over the past four years as it offers important cost-savings over current closed systems. GenFlex particularly addresses the $450 million annualized global CT/NG/TV diagnostic market as well as the $1.3 billion Women’s Health market. Extensions of the GenFlex platform, currently under development, are aimed at addressing the entire $7 billion molecular diagnostic market.

"At the same time, we are also making positive strides in our extensive cost reduction program at the labs while continuing to invest and grow the higher margin and growth segments of our business that will help assure our objective of building Enzo’s value."

Second Quarter Operating Results

·Total second quarter revenue amounted to $19.4 million, compared to $19.3 million in the year ago period, up slightly year over year despite sharply lower industry-wide PAMA reimbursement rates.
·Clinical Services revenue for the second quarter amounted to $12.5 million compared to $12.0 million in the previous year period, an increase of 4%. Volume increases in core and other non-genetic testing services contributed to the revenue gain. Total diagnostic testing volume measured by the number of accessions increased 7% in the period. However, the Protecting Access to Medicare Act ("PAMA") continues to negatively impact reimbursements from Medicare and third-party payers. Gross profit margin at Clinical Services was 18% in the most recent quarter compared to 8% in the 2019 period. This margin expansion was attributable to reductions in outside reference testing expense and headcount efficiencies, partially offset by increased reagent costs resulting largely from higher accession volume.
·Life Science revenue for the second quarter was $6.9 million compared to $7.3 million in the previous year’s second quarter. The decrease of 6% is primarily due to lower product sales volume in the U.S. market based on the timing of orders. The gross profit margin on products was 52% in the 2020 period and 50% in the 2019 period due to the mix of products sold.
·Consolidated gross profit was $5.8 million versus $4.6 million in the previous year’s quarter. Gross margins for the quarter were 30% compared with 24% a year ago.

·Research and development expenses were $1.0 million in the 2020 period and $0.8 million in the 2019 period, an increase of 28%. The increase is entirely attributed to the Clinical Services division for lab developed tests based on our proprietary GenFlex platform.
·Selling, general and administrative expenses declined to $10.7 million during the 2020 period from $11.5 million during the 2019 period, and as a percentage of revenue amounted to 55% versus 60% a year ago. The Clinical Services expense declined $0.3 million, primarily due to the initial results of the aforementioned cost savings program. The Life Sciences Products expense decreased $0.5 million primarily due to reductions in operating expenses and related costs.
·Legal and related expenses were approximately $2.0 million during the 2020 period compared to $1.1 million in the 2019 period, an increase of $0.9 million. During the 2020 period, the Company incurred $1.8 million for proxy costs relating to the February 2020 annual shareholders meeting.
·GAAP net loss was ($7.7) million, or ($0.16) per diluted share, an improvement of 9% compared with a year ago quarter net loss of ($8.4) million, or ($0.18) per diluted share. The non-GAAP net loss, adjusted primarily for proxy related costs, was ($5.8) million, compared to ($8.4 million) a year ago, an improvement of $2.6 million. On a per share basis, the non-GAAP loss equaled ($0.12), compared with ($0.18) a year ago. Adjusted EBITDA loss in the quarter and a year ago approximated ($5.3) million and ($7.9) million reflecting a $2.6 million improvement.

First Half Operating Results

Total revenue for the first half of fiscal year 2020 was $39.6 million compared to $40.6 million in the prior year, a decline of 2%. Gross profit totaled $11.5 million, compared to $11.7 million a year ago, with gross margins of 29% in each of the periods. Sales, General and Administrative Expenses decreased to $21.8 million from $22.5 million or 55% of revenue for both periods. Research & Development increased to $2.1 million, or 36% in the period. Legal expenses amounted to $3.8 million versus $2.4 million in the prior year period. The GAAP net loss totaled $15.3 million, or ($0.32) per share compared to a net loss of $14.4 million, or ($0.30) per share in the previous period. Adjusted EBITDA was a loss of $11.8 million compared to a loss of $13.4 million a year ago.

At quarter-end, cash, cash equivalent and restricted cash totaled $52 million, and working capital amounted to $48 million. As of March 2, 2020, the company had 47.6 million shares outstanding.

Conference Call

The Company will conduct a conference call Friday, March 6, 2020 at 8:30 AM ET. The call can be accessed by dialing (888) 459-5609. International callers can dial (973) 321-1024. Please reference PIN number 4496317.

Interested parties may also listen over the Internet at: View Source

To listen to the live call, individuals should go to the website at least 15 minutes early to register, download and install any necessary audio software. Any pop up blocker installed on your PC should be disabled while accessing the webcast. A rebroadcast of the call will be available starting approximately two hours after the conference call ends, through March 20, 2020. The replay of the conference call can be accessed by dialing (855) 859-2056. International callers can dial (404) 537-3406 and, when prompted, use the same PIN number 4496317.

On March 5, 2020 Heat Biologics, Inc. ("Heat") (NASDAQ:HTBX), a clinical-stage biopharmaceutical company specializing in the development of therapeutics designed to activate patients’ immune systems against cancer, reported that it will be presenting at the Spring Investor Summit being held on March 25th-26th in New York City (Press release, Heat Biologics, MAR 5, 2020, View Source [SID1234555225]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

The Spring Investor Summit will take place at the Essex House, featuring over 500 registered executives and investors.

On March 5, 2020 Oncolytics Biotech Inc. (NASDAQ: ONCY) (TSX: ONC), currently developing pelareorep, an intravenously delivered immuno-oncolytic virus, reported its financial results and operational highlights for the quarter and year ended December 31, 2019 (Press release, Oncolytics Biotech, MAR 5, 2020, View Source [SID1234555224]). All dollar amounts are expressed in Canadian currency unless otherwise noted.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

"As we implemented our focused clinical development and investor relations strategies during 2019, our market valuation and trading volume experienced significant increases," said Kirk Look, Chief Financial Officer at Oncolytics. "Since the middle of the fourth quarter and into 2020, we have leveraged multiple prudent and effective financing strategies, while maintaining trading volume and share price. As of today, with cash of $29.7 million, our financial runway takes us to the middle of 2021, fully funding our 2020 program and a considerable set of catalysts, including multiple clinical data announcements."

"During 2019, we successfully delivered on our strategy to engage pharma as we laid the groundwork for a catalyst rich 2020 and 2021," said Dr. Matt Coffey, President and CEO of Oncolytics Biotech. "We engaged industry leaders, including Pfizer, Roche, Merck, EMD Serono and BMS, to establish relationships and support four of our five ongoing clinical studies in which we combine pelareorep with checkpoint inhibitors. While we continue to focus on demonstrating the effectiveness of pelareorep in patients with metastatic breast cancer, parallel efforts by large pharma seek to use pelareorep to enhance the efficacy and broaden the application of their immune checkpoint inhibitors. Indeed, we are hopeful that our biomarker strategy, along with our distinct competitive advantages of intravenous delivery and excellent safety profile, makes pelareorep an attractive therapy to boost the range and potency of checkpoint inhibitors commercialized by multiple large pharma companies."

Select highlights from 2019 and early 2020

Breast Cancer Program

We announced a co-development agreement with Pfizer and EMD Serono to run BRACELET-1, a study of pelareorep in combination with paclitaxel and avelumab (Bavencio), for the treatment of hormone-receptor positive, human epidermal growth factor 2-negative (HR+ / HER2-) metastatic breast cancer. The phase 2 study objective is to confirm the biomarker of T cell clonality, to demonstrate that pelareorep is acting as an immunotherapy and to evaluate the ability of pelareorep to make tumors immunologically visible to checkpoint inhibitors. Costs will be shared by Oncolytics and Pfizer.

We announced that PrECOG, a leading cancer research network running multiple immuno-oncology trials, will run the BRACELET-1 study, with lead investigator Kathy Miller, MD, Ballve-Lantero Professor of Oncology at Indiana University School of Medicine and Associate Director of Clinical Research at Indiana University Melvin and Bren Simon Cancer Center, and PrECOG member.

We commenced enrollment in the AWARE-1 window of opportunity study and presented clinical data from the safety run-in at the Society of Immunotherapy for Cancer conference. Viral replication was demonstrated to be exclusively in tumor tissue and created an increase in inflammatory cells through the expansion of existing T cell clones, as well as the creation of new T cell clones. Data also demonstrated that pelareorep changes the immunogenetic environment within the tumor, and to date, the results of this early-stage breast cancer study support the use of T cell clonality as a biomarker that may be able to predict tumor response.

Multiple Myeloma Program

We presented data from multiple myeloma study NCI-9603 at the 61st Annual Meeting & Exposition of the American Society of Hematology (ASH) (Free ASH Whitepaper). Data demonstrated synergies between pelareorep and the proteasome inhibitor carfilzomib through inflammation, apoptosis and tumor responses, including the expansion of CD8+ killer T cells and confirmed the selectivity of pelareorep, which infected multiple myeloma cells while leaving normal bone marrow cells alone.

We announced highlights from a Key Opinion Leader call featuring Dr. Craig Hofmeister of Winship Cancer Institute at Emory University and Dr. Flavia Pichiorri of the Judy and Bernard Briskin Center for Multiple Myeloma at City of Hope, demonstrating that carfilzomib promotes pelareorep infection by suppressing the innate antiviral response and suggested that the combination does not interfere with T cell activation. It was also noted that pelareorep infection, not proteasome inhibition, can upregulate PD-L1 expression on myeloma cells and the adaptive immune system can then assist in clearing infected tumor cells.

Biomarker

We announced clinical data from REO 024 in pancreatic cancer at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting demonstrating the potential utility of T cell clonality as a predictive and prognostic biomarker of pelareorep therapy. Measured with a simple blood draw, the biomarker will allow physicians to understand which patients are likely to respond to treatment. Higher T cell clonality at baseline correlates with longer progression free survival (HR=0.05, p=0.01) and overall survival (HR=0.12, p=0.01) demonstrating the predictive value of the assay and enhanced T cell clonality after the first cycle of treatment correlates with improved overall survival (HR=0.08, p=0.01) and serves as an on-treatment prognostic biomarker.

We hosted a key opinion leader meeting with investors and analysts to discuss the emerging role of biomarkers and oncolytic viruses in the treatment of cancer, featuring Dirk Arnold, MD, PhD, Executive Board Member of the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) and Chief of Oncology at Asklepios Klinik Altona

We announced statistically significant data identifying CEACAM6 as a prospective biomarker for pelareorep in the treatment of pancreatic cancer. Data in the presentation associate low levels of the gene CEACAM6 with prolonged progression free survival (PFS) in pelareorep treated patients with pancreatic cancer. PFS increased over 80%, from 5.72 months to 10.32 months (p=0.05). Oncolytics is now working with industry and academic institutions to verify the findings not only in pancreatic cancer but potentially in other GI indications where this biomarker is linked to clinical outcomes.

Additional Scientific Collaborations: Future Opportunities

Academic collaborators presented preclinical data at IOVC on the synergies between pelareorep and the CDK4/6 inhibitor Ibrance, suggesting pelareorep synergizes with CDK4/6 inhibitors by blocking cellular signaling pathways and releasing more double-stranded RNA into the tumor cell, triggering immunogenic cell death, resulting in another effective way to engage the innate and adaptive immune systems. These results, supported by AWARE-1 results in early-stage breast cancer, as well as pelareorep’s demonstrated memory/vaccination effect, which may result in these patients not having a disease recurrence, highlight the potential for pelareorep to be an integral component across the breast cancer treatment spectrum. From early-stage breast cancer through to advanced metastatic disease.

Corporate Updates

Mr. Leonard Kruimer, MBA, CPA, joined the Oncolytics’ Board of Directors. His financing, partnering and M&A experience will be invaluable as Oncolytics advances towards a transformational partnership leading into a phase 3 registrational study in metastatic breast cancer.

Anticipated Milestones

AWARE-1 breast cancer study – interim safety data: Q1 2020

Initiate phase 2 BRACELET-1 study in HR+ / HER2- mBC: Q1 2020

AWARE-1 breast cancer study – interim biomarker data: Q2 2020

Multiple myeloma study (NCI-9603) – interim data (ASCO) (Free ASCO Whitepaper)*: Q2 2020

Phase 2 second line pancreatic cancer study – interim data (ASCO) (Free ASCO Whitepaper)*: Q2 2020

Phase 2 second line pancreatic cancer study – final data*: 2H 2020

AWARE-1 breast cancer study – final biomarker data: 2H 2020

Multiple myeloma study (Opdivo combination) – interim data (ASH) (Free ASH Whitepaper)*: Q4 2020

Phase 2 BRACELET-1 metastatic breast cancer study – interim safety update: Q4 2020

Complete enrollment in BRACELET-1 metastatic breast cancer study: Q1 2021

Phase 2 BRACELET-1 metastatic breast cancer study – final data: 2H 2021

*Guidance provided by clinical investigators

Financial

As at December 31, 2019, the company reported $14.1 million in cash and cash equivalents.

Operating expense for the fourth quarter of 2019 was $4.1 million and $9.6 million for the year 2019, compared to $2.4 million in the fourth quarter 2018 and $7.2 million for the year 2018.

R&D expense for the fourth quarter of 2019 was $2.8 million and $11.1 million for the year 2019, compared to $2.5 million in the fourth quarter 2018 and $9.4 million for the year 2018.

Net cash used in operating activities for the fourth quarter of 2019 was $7.3 million and $19.9 million for the year 2019 compared to $4.4 million for the fourth quarter 2018 and $11.9 million for the year 2018.

The consolidated net loss for the fourth quarter of 2019 was $19.4 million compared to $4.8 million in the fourth quarter 2018. The net loss for the fourth quarter of 2019 reflected a $12.5 million non-cash change in fair value of warrant derivative compared to nil for the fourth quarter of 2018. The consolidated net loss for the year 2019 was $33.1 million or $1.50 per share compared to $17.0 million or 1.06 per share for the year 2018. The net loss for the year 2019 reflected a $12.6 million non-cash change in fair value of warrant derivative compared to nil in the year 2018. The warrants issued in connection with our August 2019 public offering are required to be treated as a financial instrument and are revalued at each exercise date and reporting period. Gains and losses resulting from the revaluation are non-cash, do not impact our cash flow and are recorded as a change in fair value of warrant derivative.

As at March 5, 2020, the Company had approximately $29.7 million in cash and cash equivalents, an unlimited number of authorized common shares with 37,375,025 common shares issued and outstanding, 16,443,500 warrants (exercisable into 1,730,894 common shares) issued in 2017 with a $9.025 strike price, 538,938 warrants issued in 2019 with a US$0.90 strike price and 2,474,491 options and share units.

Webcast and Conference Call
Management will host a conference call for Analysts and Institutional Investors at 5:00 pm ET, today, Thursday, March 5, 2020. The live call may be accessed by dialing 1-888-231-8191 for callers in North America. Overseas callers should contact investor relations for the toll-free dial information for their country.

A replay of this call will be available approximately two hours after the call is ended at 1-855-859-2056, using the replay code 3119607 and will be available for one week.

A live webcast of the call will be accessible on the Investor Relations page of Oncolytics’ website at www.oncolyticsbiotech.com and will be archived for three months.

About Pelareorep
Pelareorep is a non-pathogenic, proprietary isolate of the unmodified reovirus: a first-in-class intravenously delivered immuno-oncolytic dsRNA virus in development for the treatment of solid tumors and hematological malignancies. The compound induces selective tumor lysis and promotes an inflamed tumor phenotype through innate and adaptive immune responses to treat a variety of cancers and has been demonstrated to be able to escape neutralizing antibodies found in patients.