On September 21, 2020 Illumina, Inc. (NASDAQ: ILMN) and GRAIL, a healthcare company whose mission is focused on multi-cancer early detection, reported they have entered into a definitive agreement under which Illumina will acquire GRAIL for cash and stock consideration of $8 billion upon closing of the transaction (Press release, Illumina, SEP 21, 2020, View Source [SID1234565421]). In addition, GRAIL stockholders will receive future payments representing a tiered single digit percentage of certain GRAIL-related revenues. The agreement has been approved by the Boards of Directors of Illumina and GRAIL.

"Over the last four years, GRAIL’s talented team has made exceptional progress in developing the technology and clinical data required to launch the GalleriTM multi-cancer screening test. Galleri is among the most promising new tools in the fight against cancer, and we are thrilled to welcome GRAIL back to Illumina to help transform cancer care using genomics and our NGS platform," said Francis deSouza, Illumina’s President and Chief Executive Officer. "Together, we have an important opportunity to introduce routine and broadly available blood-based screening that enables early cancer detection when treatment can be more effective and less costly. Multi-cancer early detection is better for patients, their physicians, and payors. As we accelerate our path to clinical leadership and the path to multi-cancer early detection, we will continue to drive significant value creation for our stockholders."

"Cancer is one of society’s most significant challenges, with most cancer being detected too late," said Hans Bishop, Chief Executive Officer of GRAIL. "We believe multi-cancer early detection technology could address a tremendous unmet need and reduce the cancer burden worldwide. Combining forces with Illumina enables broader and faster adoption of GRAIL’s innovative, multi-cancer early detection blood test, enhancing patient access and expanding global reach. We are excited about this next step in our journey to transform cancer detection and outcomes and create value for patients and their families and communities, health care providers and payors, employers, and stockholders."

GRAIL was founded by Illumina in 2016 and was spun out as a standalone company, powered by Illumina’s NGS technology, to develop state-of-the-art data science and machine learning and create the atlas of cancer signals in the blood, enabling multi-cancer early detection tests. GRAIL raised approximately $2 billion to support its innovative technology platform and develop Galleri. An earlier version of Galleri was able to detect more than 50 cancer types, over 45 of which have no recommended screening in the United States. Galleri is expected to launch commercially in 2021 as a multi-cancer, laboratory developed test for early cancer detection from blood. GRAIL plans to follow Galleri with future blood-based tests for cancer diagnosis, detection and post-treatment monitoring of cancer patients.

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Strategic Benefits

Increases Illumina’s Directly Accessible Total Addressable Market and Offers Multiple Future Growth Opportunities. GRAIL extends Illumina’s portfolio to include cancer screening, diagnosis and cancer monitoring, creating a portfolio of best-in-class, proprietary tests in each of the major oncology testing application areas. Oncology test utilization and payor coverage is accelerating, and the total NGS oncology opportunity is expected to grow at a CAGR of 27% to $75 billion in 2035.

Accelerates Adoption of NGS-Based Early Multi-Cancer Detection Test to Reach More Patients Faster. Illumina plans to leverage its global scale, manufacturing and clinical capabilities to support GRAIL’s commercialization efforts, realize the total addressable market potential and drive significant growth in the clinical value chain.

Enhances Illumina’s Position in Clinical Genomics. NGS is poised to revolutionize oncology care, and this acquisition allows Illumina to participate more fully in the high value clinical solutions that are enabled by its NGS sequencing technology. With GRAIL, Illumina will continue as a leading sequencing innovator and partner, while also becoming a proprietary test provider.

Transaction Details

Under the terms of the agreement, at closing, GRAIL stockholders (including Illumina) will receive total consideration of $8 billion, consisting of $3.5 billion in cash and $4.5 billion in shares of Illumina common stock, subject to a collar. Illumina currently holds 14.5% of GRAIL’s shares outstanding, and approximately 12% on a fully diluted basis.

The collar on the stock consideration will ensure that GRAIL stockholders excluding Illumina receive a number of Illumina shares equal to approximately $4 billion in value if the 20-trading-day volume weighted average price of Illumina stock as of 10 trading days prior to closing is between $295 and $399. GRAIL stockholders excluding Illumina will receive approximately 9.9 million Illumina shares if the 20-trading-day volume weighted average price of Illumina stock as of 10 trading days prior to closing is above $399 and approximately 13.4 million Illumina shares if the 20-trading-day volume weighted average price of Illumina stock as of 10 trading days prior to closing is below $295. Upon closing of the transaction, current Illumina stockholders are expected to own approximately 93% of the combined company, while GRAIL stockholders are expected to own approximately 7% based on the mid-point of the collar.

The cash consideration to GRAIL stockholders excluding Illumina of approximately $3.1 billion is expected to be funded using balance sheet cash of both Illumina and GRAIL plus up to $1 billion in capital raised through either a debt or equity issuance. In advance of this anticipated issuance, Illumina has obtained financing commitments for a $1.0 billion bridge facility with Goldman Sachs Bank USA.

In connection with the transaction, GRAIL stockholders will also receive contingent value rights, which will entitle holders to receive future payments representing a pro rata portion of certain GRAIL-related revenues each year for a 12-year period. This will reflect a 2.5% payment right to the first $1 billion of revenue each year for 12 years. Revenue above $1 billion each year would be subject to a 9% contingent payment right during this same period. Illumina will offer GRAIL stockholders the option to receive additional cash and/or stock consideration, in an amount to be determined prior to closing, in lieu of the contingent value rights.

We expect the transaction will be accretive to Illumina revenue starting in 2021, and to meaningfully accelerate revenue growth over time.

Structure and Approvals

The transaction is subject to customary closing conditions, including applicable regulatory approvals. Illumina expects to close the transaction in the second half of 2021.

Following the completion of the transaction, GRAIL will operate as a standalone division within Illumina with a dedicated leadership team to ensure continuation of GRAIL’s success.

Advisors

Goldman Sachs & Co. LLC is serving as exclusive financial advisor and Cravath, Swaine & Moore LLP is serving as legal advisor to Illumina. Morgan Stanley & Co. LLC is serving as exclusive financial advisor and Latham & Watkins LLP is serving as legal advisor to GRAIL.

Conference Call Information

Illumina will host a conference call to discuss the transaction today, September 21, 2020 at 8:00 a.m. EDT.

Interested parties may access the live teleconference through the Investor Relations section of Illumina’s web site under the "company" tab at www.illumina.com. Alternatively, individuals can access the call by dialing the Toll-Free Dial-In Number: (866) 211-4597, or the International Dial-In Number: (647) 689-6853 outside North America, both with passcode 2245817. Following the call, a replay will be posted on Illumina website and will be available for at least 30 days following posting.

On September 21, 2020 Kintara Therapeutics, Inc. (Nasdaq: KTRA) ("Kintara" or the "Company"), a biopharmaceutical company focused on the development of new solid tumor cancer therapies, reported its financial results for the year ended June 30, 2020 and provided a corporate update (Press release, DelMar Pharmaceuticals, SEP 21, 2020, View Source [SID1234565419]).

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"The past fiscal year was one of the most important periods in the Company’s history, as it set the stage for the recently consummated acquisition of Adgero which was truly a transformational milestone," commented Saiid Zarrabian, President and Chief Executive Officer of Kintara. "Moving forward, we believe we are now well positioned to execute our growth strategy as we approach the important final stage of both of our clinical development programs with the initiation of the GCAR GBM AGILE registrational study for VAL-083 and the confirmatory cutaneous metastatic breast cancer study for REM-001."

Recent Corporate Highlights

Completed a private placement of Series C Convertible Preferred Stock for aggregate gross proceeds of approximately $25 million, or net proceeds of approximately $21.7 million (August 2020).
Consummated the acquisition of Adgero Biopharmaceuticals Holdings, Inc. (Adgero), a privately held biopharmaceutical company focused on the development of its late stage photodynamic therapy platform for the treatment of serious cutaneous oncology indications, which created a diversified biopharmaceutical company with a robust product pipeline targeting rare, unmet medical needs in oncology (August 2020).
Received a notification of award of a Small Business Technology Transfer grant to study the use of REM-001 in the prevention of arteriovenous fistula maturation failure (AFMF), a cardiovascular-related condition that occurs in hemodialysis patients. This grant will allow Kintara to study the use of REM-001 in the prevention of AFMF further in preclinical models (July 2020).
Accepted invitation from the Global Coalition for Adaptive Research (GCAR) to include VAL-083 in GCAR’s Glioblastoma Adaptive Global Innovative Learning Environment (GBM AGILE) study, an adaptive clinical trial platform in glioblastoma multiforme (GBM). The Company expects to utilize the GBM AGILE study to serve as the basis for VAL-083’s new drug application submission and registration (June 2020).
Entered into a $500,000 loan agreement with the National Brain Tumor Society and the National Foundation for Cancer Research to support VAL-083’s preparation for participation in the GBM AGILE study (June 2020).
SUMMARY OF FINANCIAL RESULTS FOR FISCAL YEAR ENDED JUNE 30, 2020

At June 30, 2020, the Company had cash and cash equivalents of approximately $2.4 million. In August 2020, the Company completed the private placement of Series C Convertible Preferred Stock for gross proceeds of approximately $25 million, or net proceeds of approximately $21.7 million. The cash and cash equivalents at June 30, 2020 plus the private placement proceeds are expected to be sufficient to fund the Company’s planned operations into the fourth quarter of calendar year 2021.

For the year ended June 30, 2020, the Company reported a net loss of approximately $9.1 million, or $0.87 per share, compared to a net loss of approximately $8.0 million, or $3.16 per share, for the year ended June 30, 2019.

On September 21, 2020 TRACON Pharmaceuticals (NASDAQ:TCON), a clinical stage biopharmaceutical company focused on the development and commercialization of novel targeted cancer therapeutics and utilizing a cost efficient, CRO-independent product development platform to partner with ex-U.S. companies to develop and commercialize innovative products in the U.S., reported updated clinical data from the pivotal trial of envafolimab in MSI-H/dMMR cancer patients that were recently presented by the Company’s corporate partners, 3D Medicines and Alphamab Oncology (Press release, Tracon Pharmaceuticals, SEP 21, 2020, View Source [SID1234565418]).

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In a presentation highlighting updated clinical results at the Chinese Society of Clinical Oncology (CSCO) 2020 Virtual Scientific Program entitled, "Subcutaneous Injection of PD-L1 Antibody Envafolimab (KN035) in Advanced Tumors with Mismatch-Repair Deficiency," single agent envafolimab was shown to have a 32% confirmed objective response rate (ORR) by central radiographic review of 41 patients with MSI-H/dMMR colorectal cancer (CRC) who failed a fluoropyrimidine, oxaliplatin and irinotecan, and had at least two on-study tumor assessments. Duration of response (DOR) was greater than or equal to 12 months in 75% of patients and overall survival (OS) was greater than or equal to 12 months in 65% of patients. The ORR in the overall population (N=103) was 43%, DOR was greater than or equal to 12 months in 92% of patients and OS was greater than or equal to 12 months in 75% of patients. Envafolimab demonstrated good tolerability and safety and there continued to be no infusion-related reactions.

Earlier data from this trial were presented by 3D Medicines and Alphamab Oncology at ASCO (Free ASCO Whitepaper) 2020, in a presentation entitled, "Envafolimab (KN035) in Advanced Tumors with Mismatch-Repair Deficiency," at which time single agent envafolimab was shown to have a 28% confirmed ORR by central radiographic review in 39 patients with MSI-H/dMMR CRC who failed a fluoropyrimidine, oxaliplatin and irinotecan, and had at least two on-study tumor assessments. The trial enrolled 103 patients with MSI-H CRC, GC or with dMMR in other advanced solid tumors at clinical sites in China, in an open label format with efficacy endpoints, including the primary endpoint of confirmed ORR determined by independent central review. MSI-H/dMMR status was assessed centrally for CRC and GC and locally for other tumors.

The confirmed ORR in MSI-H/dMMR colorectal cancer patients treated with envafolimab who failed a fluoropyrimidine, oxaliplatin and irinotecan reported at CSCO 2020 of 32% is similar to the 28% confirmed ORR reported in the Opdivo package insert in MSI-H/dMMR colorectal cancer patients who failed a fluoropyrimidine, oxaliplatin, and irinotecan, and the 27.9% confirmed ORR reported for Keytruda in MSI-H/dMMR CRC patients who failed a fluoropyrimidine, oxaliplatin and irinotecan seen in cohort A of the pivotal KEYNOTE-164 trial.

"The CSCO 2020 data provide further clinical evidence that envafolimab’s activity is similar to that of Opdivo and Keytruda in MSI-H/dMMR cancer. Also impressive is the durability of response at 12 months," said James Freddo, M.D., TRACON Chief Medical Officer. "Given the 4% ORR reported in the pivotal study of Votrient, the only approved therapy for refractory UPS and MFS, and the demonstrated efficacy of immune checkpoint

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inhibitors in these populations, we believe the clinical results of our ENVASARC pivotal trial, if positive, could position envafolimab as a transformative new standard of care for sarcoma patients. Moreover, the elimination of PD-L1 associated infusion-related reactions observed to date and the convenience provided by envafolimab as the only subcutaneously administered PD-L1 inhibitor currently being studied in registrational trials, could provide significant benefits for clinicians and their patients."

About ENVASARC

Key elements for the planned ENVASARC pivotal trial include:

Multi-center, open-label, randomized, non-comparative, parallel cohort study at approximately 25 top cancer centers in the United States.

Eligible patients will have undifferentiated pleomorphic sarcoma (UPS) or myxofibrosarcoma (MFS) and received one or two prior cancer therapies, but no prior immune checkpoint inhibitor therapy.

Planned total enrollment of 160 patients, with 80 patients enrolled into cohort A of treatment with single agent envafolimab and 80 patients enrolled in cohort B of treatment with envafolimab and Yervoy.

Primary endpoint of confirmed ORR with duration of response a key secondary endpoint.

Open-label format with blinded independent central review of efficacy endpoint data.

About Envafolimab

Envafolimab (KN035), a novel, single-domain antibody against PD-L1, is the first subcutaneously administered PD-(L)1 inhibitor to be studied in registrational trials. Envafolimab is currently dosing in a Phase 2 registration trial as a single agent in MSI-H/dMMR advanced solid tumor patients and a Phase 3 registration trial in combination with gemcitabine and oxaliplatin in advanced biliary tract cancer patients in China. 3D Medicines and Alphamab Oncology, TRACON’s corporate partners for this program, plan to submit a BLA to the NMPA in China for envafolimab in 2020 based on the ORR in MSI-H/dMMR advanced solid tumor patients. The confirmed ORR in MSI-H/dMMR colorectal cancer patients treated with envafolimab who failed a fluoropyrimidine, oxaliplatin and irinotecan reported at CSCO 2020 was 32%, which was similar to the 28% confirmed ORR reported in the Opdivo package insert in MSI-H/dMMR colorectal cancer patients who failed a fluoropyrimidine, oxaliplatin, and irinotecan and the 27.9% confirmed ORR reported for Keytruda in MSI-H/dMMR CRC patients who failed a fluoropyrimidine, oxaliplatin and irinotecan in cohort A of KEYNOTE-164.

On September 21, 2020 Leap Therapeutics, Inc. (Nasdaq:LPTX), a biotechnology company focused on developing targeted and immuno-oncology therapeutics, and BeiGene, Ltd., (Nasdaq:BGNE; HKEX: 06160), a commercial-stage biotechnology company focused on developing and commercializing innovative medicines worldwide, reported that the first patient has been dosed in the DisTinGuish study, a Phase 2a clinical trial evaluating Leap’s investigational anti-Dickkopf-1 antibody (DKK1), DKN-01, in combination with tislelizumab, BeiGene’s anti-PD-1 antibody, with or without chemotherapy, in patients with gastric or gastroesophageal junction cancer (G/GEJ) (Press release, Leap Therapeutics, SEP 21, 2020, View Source [SID1234565416]).

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"Dosing of the first patient in the DisTinGuish study is a key milestone for the DKN-01 development program," said Cynthia Sirard, M.D., Chief Medical Officer of Leap Therapeutics. "We are excited to have the opportunity to combine DKN-01 with tislelizumab due to the promising signals in a DKK1 biomarker-defined population of esophagogastric cancer patients. We look forward to working closely alongside BeiGene to evaluate this potential new combination therapy for a patient population with a high global unmet medical need."

The DisTinGuish trial (NCT04363801) is a Phase 2a, nonrandomized, open-label, multicenter study of DKN-01 in combination with tislelizumab with or without chemotherapy as first-line or second-line therapy in adult patients with inoperable, locally advanced G/GEJ adenocarcinoma. The study, which will be conducted in two parts, is expected to enroll up to 72 patients.

Part A will enroll up to 24 patients with G/GEJ adenocarcinoma who have received no prior systemic treatment in the locally advanced/metastatic setting (first-line treatment), and Part B will enroll up to 48 patients with previously treated, inoperable, locally advanced or metastatic DKK1-high G/GEJ adenocarcinoma (second-line treatment). The study is designed to evaluate safety, tolerability, and efficacy of the combination therapy of intravenous DKN-01 and tislelizumab ± CAPOX (capecitabine + oxaliplatin) in G/GEJ adenocarcinoma patients. Treatment will be conducted in repeating 21-day cycles until the patient meets pre-established criteria for discontinuation or is no longer deriving clinical benefit. Part A and Part B of the study will be conducted concurrently.

Leap is conducting this combination study in the United States as part of an exclusive option and license agreement with BeiGene for the development of DKN-01 in Asia (excluding Japan), Australia and New Zealand. Leap retains exclusive rights for the development, manufacturing and commercialization of DKN-01 for the rest of the world.

About DKN-01

DKN-01 is a humanized monoclonal antibody that binds to and blocks the activity of the Dickkopf-1 (DKK1) protein, a modulator of Wnt/Beta-catenin signaling, a signaling pathway frequently implicated in tumorigenesis and suppressing the immune system. DKK1 has an important role in tumor cell signaling and in mediating an immuno-suppressive tumor microenvironment through enhancing the activity of myeloid-derived suppressor cells and downregulating NK ligands on tumor cells. DKN-01 has received Orphan Drug Designation for the treatment of gastric and gastroesophageal junction cancer from the U.S. Food and Drug Administration.

About Tislelizumab

Tislelizumab is a humanized IgG4 anti-PD-1 monoclonal antibody specifically designed to minimize binding to FcγR on macrophages. In pre-clinical studies, binding to FcγR on macrophages has been shown to compromise the anti-tumor activity of PD-1 antibodies through activation of antibody-dependent macrophage-mediated killing of T effector cells. Tislelizumab is approved by the China National Medical Products Administration (NMPA) as a treatment for patients with classical Hodgkin’s lymphoma who received at least two prior therapies and for patients with locally advanced or metastatic urothelial carcinoma (UC) with PD-L1 high expression whose disease progressed during or following platinum-containing chemotherapy or within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy.

In addition, three supplemental new drug applications (sNDAs) for tislelizumab have been accepted by the Center for Drug Evaluation (CDE) of the NMPA and are under review – for first-line treatment of patients with advanced squamous non-small cell lung cancer (NSCLC) in combination with chemotherapy, for first-line treatment of patients with advanced non-squamous NSCLC in combination with chemotherapy, and for previously treated unresectable hepatocellular carcinoma.

Tislelizumab is not approved for use outside of China.

About gastric / gastroesophageal junction cancer

Gastric adenocarcinoma (gastric cancer) remains one of the most common and deadly cancers worldwide, especially among older malesi. Based on GLOBOCAN 2018 data, stomach cancer is the 5th most common neoplasm and the 3rd most deadly cancer, with an estimated 783,000 deaths globally in 2018i. Ninety-five percent of cancers of the stomach are adenocarcinomas i. Gastric cancer incidence and mortality are highly variable by region and highly dependent on diet and Helicobacter pylori infectioni. The gastroesophageal junction (GEJ) is the area where the esophagus and stomach join together. Given its anatomic location, GEJ adenocarcinomas have often been grouped together with either esophageal or gastric cancers in clinical trials.

On September 21, 2020 MacroGenics, Inc. (Nasdaq: MGNX), a clinical-stage biopharmaceutical company focused on discovering and developing innovative monoclonal antibody-based therapeutics for the treatment of cancer, reported that a $15 million milestone payment has been triggered under its exclusive global collaboration and license agreement with Incyte for retifanlimab (MGA012), an investigational anti-PD-1 monoclonal antibody designed by MacroGenics and licensed to Incyte (as INCMGA00012) (Press release, MacroGenics, SEP 21, 2020, View Source [SID1234565415]). The milestone was triggered by the initiation of the Phase 3 POD1UM-304 clinical trial, evaluating the efficacy and safety of retifanlimab with platinum-based chemotherapy in patients with metastatic squamous and non-squamous non-small cell lung cancer (NSCLC).

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MacroGenics and Incyte have each established multiple development programs for retifanlimab, evaluating the anti-PD-1 molecule either as monotherapy or in combination with other agents. Incyte is conducting clinical trials that are potentially registration-enabling for patients with metastatic NSCLC, squamous carcinoma of the anal canal (SCAC), MSI-high endometrial cancer, Merkel cell carcinoma, and MacroGenics is conducting a potentially registration-enabling study in HER2-positive gastric cancer.

"Anti-PD-1 therapy has become a mainstay in cancer treatment across multiple tumor types, and we are excited to see our Incyte partnership continue to advance the development of retifanlimab across a broad set of monotherapy and combination regimens," said Scott Koenig, M.D., Ph.D., President and CEO of MacroGenics. "We look forward to continued progress on this program over the coming months."

Under the collaboration agreement with Incyte, MacroGenics is eligible to receive up to a total of $390 million in potential remaining development and regulatory milestones and up to $330 million in potential commercial milestones. If retifanlimab is approved and commercialized, MacroGenics would be eligible to receive royalties, tiered from 15 to 24 percent, on future worldwide net sales of the molecule.