On August 6, 2020 Mirati Therapeutics, Inc. (NASDAQ: MRTX), a clinical-stage targeted oncology company, reported financial results and a corporate update for the second quarter ended June 30, 2020 (Press release, Mirati, AUG 6, 2020, View Source [SID1234563108]).

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"Mirati is working to design, develop and deliver novel oncology therapies for patients with significant unmet medical need. With MRTX849, our KRAS G12C selective inhibitor, we remain on track to complete enrollment of the registration-enabling monotherapy arm of the KRYSTAL Phase 1/2 clinical trial in patients with 2nd or 3rd line non-small cell lung cancer (NSCLC) in the third quarter. We look forward to presenting updated Phase 1/1b data at the 32nd EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) Symposium on Molecular Targets and Cancer Therapeutics in October," said Charles M. Baum, M.D., Ph.D., President and Chief Executive Officer. "Today, we are also pleased to announce that we have selected MRTX1133, a potentially first-in-class KRAS G12D selective inhibitor to advance into IND-enabling GLP toxicology studies. We will share additional detail about MRTX1133 later this year and expect to file an IND in the first half of 2021."

RECENT CORPORATE UPDATES:

MRTX849 (KRAS G12C Selective Inhibitor)

Enrollment ongoing in the KRYSTAL Phase 1/2 clinical trial, including the following arms:

Single-agent Phase 2 registrational arm in 2nd or 3rd line therapy in NSCLC

Combination with a PD-1 (pembrolizumab) in 1st line NSCLC

Single-agent and in combination with an EGFR inhibitor (cetuximab) in 2nd line colorectal cancer (CRC)

Enrollment ongoing, under a separate clinical trial protocol, in the Phase 1/2 combination with TNO155, Novartis’ development-stage SHP2 inhibitor, in 2nd or 3rd line NSCLC and CRC

Initiated combination cohort of the KRYSTAL clinical trial with a pan-EGFR inhibitor (afatinib) in 2nd or 3rd line NSCLC

Plan to initiate the combination clinical trial with a CDK4/6 inhibitor (palbociclib) in patients with a CDK4 amplification in 2nd or 3rd line NSCLC later this year

MRTX1133 (KRAS G12D Selective Inhibitor)

Announced selection of a lead clinical candidate, MRTX1133

Completed dose-ranging toxicology studies and advancing into IND-enabling GLP toxicology studies

Sitravatinib

Enrollment ongoing in the Phase 3 SAPPHIRE trial in combination with nivolumab (OPDIVO) in patients with NSCLC

Operational Updates

On May 18th, 2020, announced the appointment of Joseph Leveque, M.D., as Chief Medical Officer

Ended the second quarter 2020 with $645.7 million in cash, cash equivalents, and short-term investments

Financial Results for the Second Quarter 2020

No license and collaboration revenues were earned for the three months ended June 30, 2020 and $0.3 million in license and collaboration revenues were earned for the six months ended June 30, 2020. License and collaboration revenues for the three and six months ended June 30, 2019 were $0.6 million and $1.8 million, respectively. License and collaboration revenues earned for these periods relate to a manufacturing supply services agreement with BeiGene.

Research and development expenses for the second quarter of 2020 were $65.1 million, compared to $38.3 million for the same period in 2019. Research and development expenses for the six months ended June 30, 2020 were $136.8 million, compared to $72.6 million for the same period in 2019. The increase in research and development expenses is due to an increase in expense associated with the development of MRTX849, MRTX1133, and other preclinical and early discovery activities, as well as an increase in salaries and related expense, including an increase in share-based compensation expense. The Company recognized research and development-related share-based compensation expenses of $11.5 million during the second quarter of 2020, compared to $6.6 million for the same period in 2019, and $23.3 million during the six months ended June 30, 2020, compared to $11.8 million for the same period in 2019.

General and administrative expenses for the second quarter of 2020 were $19.8 million, compared to $9.9 million for the same period in 2019. General and administrative expenses for the six months ended June 30, 2020 were $37.8 million, compared to $19.7 million for the same period in 2019. The increase is due primarily to an increase in share-based compensation expense and, to a lesser extent, an increase in employee-related expenses and professional service expense. The Company recognized general and administrative-related share-based compensation expenses of $9.3 million during the second quarter of 2020, compared to $6.0 million for the same period in 2019, and $19.0 million during the six months ended June 30, 2020, compared to $12.0 million for the same period in 2019.

Net loss for the second quarter of 2020 was $82.9 million, or $1.89 per share basic and diluted, compared to net loss of $45.7 million, or $1.26 per share basic and diluted for the same period in 2019. Net loss for the six months ended June 30, 2020 was $169.5 million, or $3.91 per share basic and diluted, compared to net loss of $86.6 million, or $2.43 per share basic and diluted for the same period in 2019.

Cash, cash equivalents, and short-term investments were $645.7 million at June 30, 2020.

About MRTX849

MRTX849 is an investigational, orally available small molecule that is designed to potently and selectively inhibit a form of KRAS, which harbors a substitution mutation (G12C). KRAS G12C mutations are present in approximately 14% of non-small cell lung cancer (NSCLC) adenocarcinoma patients, 4% of colorectal cancer patients, and subsets of other types of cancer. Tumors characterized by KRAS G12C

mutations are commonly associated with poor prognosis and resistance to therapy, and patients with these mutations have few treatment options. MRTX849 is being evaluated in a Phase 1/2 trial treating patients with molecularly identified, KRAS G12C-positive advanced solid tumors and in the first quarter of 2020, enrollment began in the registration enabling cohort in monotherapy NSCLC, colorectal cancer and pancreatic cancer.

About Sitravatinib

Sitravatinib is an investigational spectrum-selective kinase inhibitor that potently inhibits receptor tyrosine kinases (RTKs), including TAM family receptors (TYRO3, Axl, Mer), split family receptors (VEGFR2, KIT) and RET. Sitravatinib is being evaluated in combination with nivolumab (OPDIVO), an anti-PD-1 checkpoint inhibitor, in patients whose cancers have progressed despite treatment with a checkpoint inhibitor. Sitravatinib’s potent inhibition of TAM and split family RTKs may overcome resistance to checkpoint inhibitor therapy through targeted reversal of an immunosuppressive tumor microenvironment, enhancing antigen-specific T cell response and expanding dendritic cell-dependent antigen presentation. Sitravatinib is being evaluated in multiple clinical trials to treat patients who are refractory to prior immune checkpoint inhibitor therapy, including the ongoing potentially registration-enabling Phase 3 trial of sitravatinib in combinations with a checkpoint inhibitor in non-small cell lung cancer (NSCLC). In addition, sitravatinib in combinations with checkpoint inhibitors are being evaluated in selected checkpoint inhibitor naïve patients.

On August 6, 2020 IGM Biosciences, Inc. (Nasdaq: IGMS), a clinical-stage biotechnology company focused on creating and developing engineered IgM antibodies, reported its financial results for the second quarter ended June 30, 2020 and provided an update on recent developments (Press release, IGM Biosciences, AUG 6, 2020, View Source [SID1234563098]).

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"We continue to make steady progress advancing our pipeline of engineered IgM antibodies," said Fred Schwarzer, Chief Executive Officer of IGM Biosciences. "Today, we are pleased to announce that the FDA has cleared our Investigational New Drug (IND) application for IGM-8444, our anti-Death Receptor 5 IgM antibody, which we believe may prove to be helpful in treating a broad range of solid and hematologic malignancies. Later this year, we look forward to beginning our Phase 1 trial of IGM-8444 in solid cancers and to sharing our initial clinical data from our Phase 1 trial of IGM-2323 in relapsed/refractory NHL."

IGM-8444

Investigational New Drug (IND) application for IGM-8444 cleared by the U.S. Food and Drug Administration (FDA). IGM reported that the FDA has cleared the Company to proceed to conduct clinical trials pursuant to its IND for IGM-8444, an IgM antibody targeting the Death Receptor 5 (DR5) protein, which may prove to be useful for the treatment of patients with solid and hematologic malignancies. The proposed multicenter, open-label Phase 1 clinical trial will evaluate IGM-8444 intravenously administered as a monotherapy and in combination with chemotherapy in patients with relapsed and/or refractory solid cancers. The key objectives of this Phase 1 clinical trial are to provide an initial assessment of pharmacokinetics, safety, biomarkers and preliminary efficacy of IGM-8444 both as a single agent and in combination with standard of care chemotherapy.

Corporate Updates

Kathy Miller, Ph.D., appointed as Vice President, Antibody Discovery. IGM reported the appointment of Kathy Miller, Ph.D., as Vice President, Antibody Discovery. Prior to joining IGM, Dr. Miller served as Vice President, Biotherapeutics at Five Prime Therapeutics from 2015-2020. She has also served in various scientific and leadership roles at Novartis Institutes for Biomedical Research, and at Merck Research Laboratories at the former DNAX/Schering Plough site. Dr. Miller received a B.S. and a Ph.D. in Molecular Genetics from The Ohio State University and conducted post-doctoral research at Genentech.

Phase I Clinical Trial of IGM-2323. IGM is continuing the dose escalation portion of its Phase I clinical trial evaluating IGM-2323 in patients with relapsed/refractory NHL, the first-in-human application of IGM’s engineered IgM antibody technology. IGM continues to expect to present initial data from this clinical trial in the fourth quarter of 2020.

Second Quarter 2020 Financial Results

Cash and Investments: Cash and investments as of June 30, 2020 were $203.1 million, compared to $236.6 million as of December 31, 2019.

Research and Development (R&D) Expenses: For the second quarter of 2020, R&D expenses were $15.0 million, compared to $8.3 million for the same period in 2019.

Net Loss: For the second quarter of 2020, net loss was $18.8 million, or a loss of $0.62 per share, compared with a net loss of $10.7 million, or a loss of $19.08 per share, for the same period in 2019.

Shares Outstanding: Weighted-average shares outstanding for the second quarter of 2020 were 30.6 million, compared to 0.6 million for the same period in 2019.

2020 Financial Guidance

IGM reiterates its previously issued financial guidance which consisted of non-GAAP operating expenses for 2020 of approximately $75–$85 million, excluding estimated non-cash stock-based compensation expense of approximately $8 million. Including non-cash stock-based compensation expense, IGM estimates GAAP operating expenses for 2020 of $83–$93 million. IGM also expects to end 2020 with a balance of over $140 million in cash and investments.

On August 6, 2020 Principia Biopharma Inc. (Nasdaq: PRNB), a late-stage biopharmaceutical company focused on developing treatments for immune mediated diseases, reported financial results for the second quarter ended June 30, 2020 (Press release, Principia Biopharma, AUG 6, 2020, View Source [SID1234563097]).

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"We are very pleased with the progress the company made on each program in the first half of the year despite the ongoing COVID-19 pandemic challenges. Our investigators were able to present additional positive data for both ITP and pemphigus and Sanofi announced positive Phase 2 data in multiple sclerosis," said Martin Babler, president and chief executive officer of Principia. "With the initiation of a Phase 3 trial in patients with relapsing multiple sclerosis, we received a $50 million milestone payment from Sanofi which enhances our balance sheet and allows us to continue strong execution on our programs."

Six-month and year-to date program highlights

Rilzabrutinib for the treatment of pemphigus

Announced full data set from the Phase 2 Part B pemphigus BELIEVE PV trial during the virtual late-breaker research session of the American Academy of Dermatology

Results to date demonstrate a positive risk/benefit profile while decreasing daily corticosteroid usage

Enrollment of the PEGASUS Phase 3 trial continues to be on target

Rilzabrutinib for the treatment of ITP

Announced updated positive data from an ongoing Phase 1/2 trial in 47 heavily pre-treated patients during the virtual session of the European Hematology Association (EHA) (Free EHA Whitepaper)

Interim results demonstrate rilzabrutinib reaches primary endpoint in 50 percent of patients treated > 12 weeks with 400 mg twice-daily dose; demonstrated fast onset and durable responses

Granted orphan drug designation by the European Commission (EC)

Anticipate initiating a pivotal Phase 3 trial by the end of 2020, assuming no COVID-19 related impact

Rilzabrutinib for the treatment of IgG4-RD

Announced the expansion of development of rilzabrutinib into IgG4-RD

PRN473 Topical for the treatment of immune mediated diseases of the skin

Announced expansion of its BTK franchise with PRN473 Topical

Initiated two Phase 1 trials in Australia — a single ascending dose/multiple dose trial in healthy volunteers and a challenge study

Anticipate Phase 1 single ascending dose/multiple dose trial results in the second half of 2020

PRN2246/SAR442168 for the treatment of multiple sclerosis

Demonstrated a significant reduction in disease activity in partner Sanofi’s Phase 2 relapsing multiple sclerosis (MS) trial

Met primary and secondary objectives with 85 percent or greater relative reduction achieved in the number of new gadolinium-enhancing T1 and new or enlarging T2 hyperintense lesions

First patient dosed in Sanofi’s Phase 3 trial in relapsing MS, triggering a $50 million milestone payment in the third quarter of 2020

Immunoproteasome Inhibitor

Selected a candidate molecule to move forward into the preclinical development phase

General Corporate Highlights

Hosted a virtual Analyst Event highlighting BTK inhibitors’ significant potential beyond B cells, how rilzabrutinib is differentiated from other BTKs due to its reversible covalent binding as well the company’s maturing pipeline and research focus

The company has hired key employees to meet the expanded development programs and expected organizational growth

Second Quarter 2020 Financial Results

Cash Position: Cash, cash equivalents, and marketable securities were $316.5 million as of June 30, 2020, compared to $367.8 million as of December 31, 2019. In addition, the company received an additional $50.0 million milestone payment from Sanofi in the third quarter of 2020.

Revenues: Collaboration revenues were $50.0 million for the three months ended June 30, 2020, compared to $30.0 million for the same period in 2019, for the achievement of clinical development milestones in our Sanofi collaboration.

R&D Expenses: Total research and development expenses were $30.9 million for the three months ended June 30, 2020, including stock-based compensation expense of $3.9 million, compared to $18.7 million for the same period in 2019, including stock-based compensation expense of $1.8 million. The increase in total research and development expenses was mainly driven by an increase in rilzabrutinib program costs, due to the progression of our global Phase 3 trial in pemphigus, ongoing Phase 2 trial in ITP and certain

Anticipate initiating a Phase 2 trial in the second half of 2020

manufacturing campaigns to supply drug products for our rilzabrutinib clinical trials, the initiation of our Phase 1 trial for PRN473 Topical in March 2020 and an increase in employee-related expenses.

G&A Expenses: General and administrative expenses were $9.2 million for the three months ended June 30, 2020, including stock-based compensation expense of $3.1 million, compared to $5.2 million for the same period in 2019, including stock-based compensation expense of $1.7 million. The increase in total general and administrative expenses was primarily driven by increased employee-related expenses and costs related to operating as a public company.

Net Income (Loss): For the three months ended June 30, 2020, net income was $10.8 million compared to net income of $7.1 million for the same period in 2019.

On August 6, 2020 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported financial results for the second quarter ended June 30, 2020 (Press release, Puma Biotechnology, AUG 6, 2020, View Source [SID1234563096]). Unless otherwise stated, all comparisons are for the second quarter of 2020 compared to the second quarter of 2019.

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Product revenue, net consists entirely of sales revenue from NERLYNX, Puma’s first commercial product. Net NERLYNX product revenue in the second quarter of 2020 was $48.8 million, compared to $53.8 million in the second quarter of 2019. Net NERLYNX product revenue in the first six months of 2020 was $97.4 million, compared to $99.4 million in the first six months of 2019.

Based on accounting principles generally accepted in the United States (GAAP), Puma reported net income of $3.4 million, or $0.09 per basic share and $0.08 per diluted share, for the second quarter of 2020, compared to a net loss of $37.4 million, or $0.97 per basic and diluted share, for the second quarter of 2019. Net loss for the first six months of 2020 was $13.5 million, or $0.34 per basic and diluted share, compared to a net loss of $47.5 million, or $1.23 per basic and diluted share, for the first six months of 2019.

Non-GAAP adjusted net income was $14.0 million, or $0.36 per basic share and $0.35 per diluted share, for the second quarter of 2020, compared to non-GAAP adjusted net loss of $22.0 million, or $0.57 per basic and diluted share, for the second quarter of 2019. Non-GAAP adjusted net income for the first six months of 2020 was $6.0 million, or $0.15 per basic and diluted share, compared to non-GAAP adjusted net loss of $13.9 million, or $0.36 per basic and diluted share, for the first six months of 2019. Non-GAAP adjusted net income (loss) excludes stock-based compensation expense. For a reconciliation of GAAP net income (loss) to non-GAAP adjusted net income (loss) and a reconciliation of GAAP net income (loss) per share to non-GAAP adjusted net income (loss) per share, please see the financial tables at the end of this news release.

Net cash provided by operating activities for the second quarter of 2020 was $16.2 million, compared to $44.2 million for the second quarter of 2019. Net cash provided by operating activities for the first six months of 2020 was $4.7 million, compared to $28.1 million for the first six months of 2019. At June 30, 2020, Puma had cash, cash equivalents and marketable securities of $107.3 million, compared to $111.6 million at December 31, 2019.

"We are pleased to announce that despite the challenges presented by the COVID-19 situation as well as a significant inventory draw down by specialty pharmacies in the quarter, we were able to achieve NERLYNX revenues that were within the Company’s previously stated second quarter guidance range," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "Although we anticipate that COVID-19 may continue to impact our revenues going forward, we remain focused on and committed to providing support to patients battling breast cancer. The addition of Jeff Ludwig to our team as Chief Commercial Officer demonstrates our commitment to increasing the global success of NERLYNX. Maintaining the health and safety of our employees remains a priority for all of us at Puma, and we are pleased with the accomplishments made by our team as they adjusted to working remotely and responding to any COVID-related challenges."

Mr. Auerbach added, "We anticipate the following key milestones over the next 12 months: (i) reporting Phase II data from the hormone receptor positive breast cancer cohort of the SUMMIT trial of neratinib in patients with HER2 mutations in the fourth quarter of 2020; (ii) reporting additional data from the Phase II CONTROL trial in the fourth quarter of 2020; (iii) reporting data from the Phase II TBCRC-022 trial of the combination of Kadcyla plus neratinib in patients with HER2 positive breast cancer with brain metastases who have previously been treated with Kadcyla in the first half of 2021; (iv) conducting a pre-

NDA meeting with the FDA to discuss accelerated approval of neratinib in HER2 mutated hormone receptor positive breast cancer in the first half of 2021; and (v) receiving regulatory decisions for an extended adjuvant HER2-positive early stage breast cancer indication in additional countries."

Revenue

Total revenue consists of product revenue, net from sales of NERLYNX, Puma’s first commercial product, license revenue, and royalty revenue. For the second quarter of 2020, total revenue was $70.6 million, of which $48.8 million was net product revenue, $20.7 million was license revenue received from Puma’s sub-licensees, and $1.1 million was royalty revenue from Puma’s sub-licensees. This compares to total revenue for the second quarter of 2019 of $53.9 million, of which $53.8 million was net product revenue and $0.1 million was royalty revenue from Puma’s sub-licensees. For the first six months of 2020, total revenue was $121.8 million, of which $97.4 million was net product revenue, $22.7 million was license revenue received from Puma’s sub-licensees, and $1.7 million was royalty revenue also from Puma’s sub-licensees. This compares to total revenue for the first six months of 2019 of $153.0 million, of which $99.4 million was net product revenue, $53.5 million was license revenue received from Puma’s sub-licensees, and $0.1 million was royalty revenue also from Puma’s sub-licensees.

Operating Costs and Expenses

Total operating costs and expenses were $63.5 million for the second quarter of 2020, compared to $79.7 million for the second quarter of 2019. Operating costs and expenses in the first six months of 2020 were $128.9 million, compared to $168.9 million in the first six months of 2019.

Cost of Sales

Cost of sales was $9.4 million for the second quarter of 2020 and $18.5 million for the first six months of 2020, compared to $9.3 million for the second quarter of 2019 and $17.3 million for the first six months of 2019.

Selling, General and Administrative Expenses

Selling, general and administrative (SG&A) expenses were $29.4 million for the second quarter of 2020, compared to $33.5 million for the second quarter of 2019. SG&A expenses for the first six months of 2020 were $60.3 million, compared to $79.0 million for the first six months of 2019. The $18.7 million year-over-year decrease for the first six months resulted primarily from a decrease in stock-based compensation expense of approximately $7.9 million, a decrease in professional fees and expenses of approximately $7.7 million, a decrease in expenses associated with travel and meetings of approximately $2.5 million, and a decrease of approximately $0.4 million in payroll and payroll-related expenses.

Research and Development Expenses

Research and development (R&D) expenses were $24.7 million for the second quarter of 2020, compared to $36.9 million for the second quarter of 2019. R&D expenses for the first six months of 2020 were $50.1 million, compared to $72.6 million for the first six months of 2019. The $22.5 million year-over-year decrease for the first six months resulted primarily from a decrease in clinical trial expense of approximately $13.5 million, a decrease in employee stock-based compensation expense of approximately $6.1 million, and a decrease in consultant and contractors expenses of approximately $2.9 million primarily due to the close out of certain clinical trials.

Total Other Income (Expenses)

Total other expenses were $3.7 million for the second quarter of 2020 and $6.4 million for the first six months of 2020, compared to total other expenses of $11.6 million for the second quarter of 2019 and $31.6 million for the first six months of 2019. The $25.2 million year-over-year decrease for the first six months primarily resulted from a decrease in debt extinguishment loss of approximately $8.1 million, a decrease in legal verdict expense of approximately $16.2 million, and a decrease in interest expense of approximately $2.0 million, partially offset by a decrease in interest income of approximately $1.3 million.

Conference Call

Puma Biotechnology will host a conference call to report its second quarter 2020 financial results and provide an update on the Company’s business and outlook at 1:30 p.m. PDT/4:30 p.m. EDT on Thursday, August 6, 2020. The call may be accessed by dialing 1-877-709-8150 (domestic) or 1-201-689-8354 (international). Please dial in at least 10 minutes in advance and inform the operator that you would like to join the "Puma Biotechnology Conference Call." A live webcast of the conference call and presentation slides may be accessed on the Investors section of the Puma Biotechnology website at View Source A replay of the call will be available shortly after completion of the call and will be archived on Puma’s website for 90 days.

On August 6, 2020 Arcus Biosciences, Inc. (NYSE:RCUS), an oncology-focused biopharmaceutical company working to create best-in-class cancer therapies, reported financial results for the second quarter ended June 30, 2020 and provided corporate updates (Press release, Arcus Biosciences, AUG 6, 2020, View Source [SID1234563095]).

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"The multitude and quality of accomplishments from the Arcus team over the course of these dynamic few months have illustrated Arcus’s extraordinary commitment to its vision to consistently create, develop and deliver life-changing therapies to patients," said Terry Rosen, Ph.D., Chief Executive Officer. "In this short period of time, Arcus and Gilead executed a partnership framework that enables Arcus to expand and accelerate the opportunities inherent in Arcus’s broad pipeline and discovery organization and expedite Arcus’s evolution into a sustainable, fully-integrated biopharmaceutical company. Arcus’s concurrent public offering raised additional funding to support aggressive advancement of four clinical molecules in highly pursued immuno-oncology pathways – TIGIT, the Adenosine Axis, and PD-1, including its near-term goals to expand its development programs and begin potential registrational studies in 2021. In addition, Arcus reported early clinical activity of etrumadenant (AB928) plus mFOLFOX-6 in late-line metastatic colorectal cancer during this year’s AACR (Free AACR Whitepaper) conference, further enhancing the growing confidence in etrumadenant and its unique biological mechanism and providing basis for expanded future studies in the metastatic colorectal cancer setting. We are excited for this momentum to continue building in the second half of 2020 as we advance our mission to serve patients."

As we continue to navigate through these unique and unprecedented times for the biotechnology industry and the world as a whole, the Arcus team has demonstrated their ability to be nimble and quickly adapt to shifting environments. We would like to acknowledge our staff for their extraordinary commitment to our mission, as well as the patients, caregivers and investigators that enabled our ongoing and new clinical trials and our shareholders for their ongoing support, particularly with respect to our May financing. We would also like to express our gratitude to Gilead for their collaborative efforts in designing, executing and closing an alliance that enables and cements Arcus’s trajectory toward becoming an independent biopharmaceutical company and to our colleagues at Taiho for their highly-regarded long-term support of Arcus since our early days and continued partnership in Japan. We enter the second half of 2020 in a stronger position than ever.

Recent Key Highlights

•

Established a 10-year collaboration with Gilead that provides Gilead with access to Arcus’s broad and growing immuno-oncology pipeline and Arcus with substantial, non-dilutive funding through opt-in payments and ongoing R&D support.

"All-in" framework with global co-development for optioned programs allows both companies to combine their expertise and resources to bring transformative therapies to patients.

Arcus retains rights to co-commercialize optioned programs in the U.S., with equal profit sharing, and receives double-digit royalties on sales outside of the U.S.

Concurrent with the execution of the Gilead partnership, Arcus successfully completed a public offering of common stock, raising approximately $348 million in gross proceeds. This financing included participation by Gilead, in addition to the capital provided as part of the collaboration agreement. This represents the company’s first public financing since its March 2018 initial public offering, providing new and existing stockholders an additional opportunity to participate in the next phase of growth of the company.

Presented early clinical activity of etrumadenant plus mFOLFOX-6 in late-line metastatic colorectal cancer (mCRC) patients in the ARC-3 study at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Meeting, including the following observations:

A disease control rate (DCR) of 76% across all lines of therapy (requiring a minimum of 2 disease assessments).

A DCR of 64% in third-line or higher mCRC patients, with a median time on treatment of nearly 17 weeks.

Several deep responses were observed across first- to third-line plus patients including patients with tumors shown to have KRAS/BRAF mutations; in further evidence of the deep responses associated with therapy, five patients discontinued study treatment at the investigator’s discretion to undergo surgical resection with curative intent.

An additional clinical study to further evaluate and advance etrumadenant in mCRC is planned and in development.

Initiated enrollment in ARC-6, a Phase 1b/2 platform trial in metastatic castrate resistant prostate cancer, evaluating various combinations of etrumadenant, zimberelimab, and AB680, alone or in combination, with standard of care therapies.

Appointed Bob Goeltz as Chief Financial Officer (CFO). Mr. Goeltz is a proven leader with substantial operational experience in both large and small cap biopharmaceutical company environments. His experience includes CFO roles at UNITY Biotechnology and CytomX Therapeutics, and an 11-year tenure at Amgen where he also served as the CFO of Onyx Pharmaceuticals after its acquisition by Amgen.

Appointed David Lacey, M.D. and Merdad Parsey, M.D., Ph.D. to Arcus’s Board of Directors.

Anticipated Near-Term Corporate Milestones

Presentation of efficacy and safety data from the ongoing ARC-4 study, a Phase 1/1b study of etrumadenant plus carboplatin, pemetrexed and anti-PD-1 therapy in patients with metastatic non-small cell lung cancer at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Virtual Congress 2020 in September: Abstract #1309P. The presentation will include an update on the dose-escalation cohort, as well as ongoing evaluation of the Ph1b expansion data assessing mutant EGFR patients who have failed 1-2 prior tyrosine kinase inhibitor (TKI) therapies.

Recommended dose for expansion for AB680 from the Phase 1 dose-escalation portion of ARC-8, a combination trial evaluating AB680 plus zimberelimab with gemcitabine/nab-paclitaxel in first-line metastatic pancreatic cancer.

Preliminary randomized data from two Phase 2 clinical collaborations with Genentech involving combination trials with etrumadenant in metastatic colorectal and pancreatic cancers, expected in the fourth quarter of 2020.

Preliminary randomized data from ARC-7, a Phase 2 trial involving domvanalimab (AB154) with unique intra-portfolio combinations in first-line metastatic high PD-L1 NSCLC, expected in the fourth quarter of 2020.

Initiation of a Phase 1 clinical trial for at least one of our existing discovery/preclinical development programs in late 2020/early 2021.

Through most of the second quarter, Arcus’s employees had been working remotely due to shelter-in-place orders, but in late June, Arcus began to transition its laboratory-based personnel back into its facilities. Arcus instituted a regular testing/monitoring program for COVID-19 in order to minimize the risks to Arcus’s employees as they return to work. Arcus continues to actively monitor the COVID-19 pandemic and its effects on our clinical trial operations, research and development programs, key vendors and employees. While we do not anticipate modifications to the timelines above, this will depend on future developments which are currently unknown, including aFinancial Results for the Second Quarter 2020 and Six Months Ended June 30, 2020

Cash, cash equivalents and investments in marketable securities were $462.5 million as of June 30, 2020, compared to $188.3 million at December 31, 2019. After June 30, 2020, Arcus received a $175 million upfront payment and $200 million equity investment upon closing of our partnership with Gilead on July 13, 2020, the amounts of which will be included in our results for the period ended September 30, 2020. The increase at June 30, 2020 as compared to December 31, 2019 was due to the completion of a public equity offering in May 2020 resulting in net proceeds of $326.2 million, partially offset by cash utilized for operations during the first half of 2020.

Revenues: Collaboration and license revenue were $1.8 million for each of the three months ended June 30, 2020 and 2019. Collaboration and license revenue was $3.5 million for each of the six months ended June 30, 2020 and 2019. The revenue in each of these periods was recognized from non-refundable upfront payments previously received and deferred for recognition pursuant to our option and license agreement with Taiho Pharmaceutical.

R&D Expenses: Research and development expenses were $35.7 million for the three months ended June 30, 2020, compared to $25.0 million for the same period in 2019. The increase in expense was due to increases in manufacturing costs required to supply our clinical studies, increases in clinical costs for our ongoing clinical studies, as well as increases in employee compensation costs primarily driven by increases in our headcount. Research and development expenses were $58.8 million for the six months ended June 30, 2020, compared to $40.6 million for the same period in 2019.

G&A Expenses: General and administrative expenses were $11.4 million for the three months ended June 30, 2020, compared to $5.9 million for the same period in 2019. The increase in expense was due to increases in legal and accounting expenses resulting from our collaboration agreement with Gilead and our ongoing public company compliance obligations. Employee compensation costs also increased primarily due to an increase in headcount and related costs. General and administrative expenses were $18.4 million for the six months ended June 30, 2020, compared to $10.9 million for the same period in 2019.

Net Loss: Net loss was $45.1 million for the three months ended June 30, 2020, compared to $28.1 million for the same period in the prior year. The increase in net loss as compared to the prior period was primarily attributable to an increase in operating expenses as noted above. Net loss for the six months ended June 30, 2020 was $72.8 million, compared to $45.8 million for the same period in 2019.

ny new information that may emerge concerning the duration and/or severity of the outbreak and any resurgences, any new actions by government authorities to contain the spread of the virus, and when and to what extent normal economic and operating conditions can resume.