Helix BioPharma Corp. announces fiscal 2021 first quarter results

On December 21, 2020 Helix BioPharma Corp. (TSX: "HBP"), ("Helix" or the "Company"), a clinical-stage biopharmaceutical company developing unique therapies in the field of immuno-oncology based on its proprietary technological platform DOS47, reported its fiscal 2021 first quarter results for the period ending October 31, 2020 (Press release, Helix BioPharma, DEC 21, 2020, View Source [SID1234573193]).

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Helix BioPharma Corp. (the "Company"), incorporated under the Canada Business Corporations Act, is an immune-oncology company primarily focused in the areas of cancer prevention and treatment. The Company has funded its research and development activities, mainly through the issuance of common shares and warrants.

The Company expects to incur additional losses and therefore will require additional financial resources, on an ongoing basis. It is not possible to predict the outcome of future research and development activities or the financing thereof.

1. Basis of presentation and going concern These condensed unaudited interim financial statements have been prepared on a going-concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations.

The Company’s ability to continue as a going concern is dependent mainly on obtaining additional financing. The Company does not have sufficient cash to meet anticipated cash needs for working capital and capital expenditures through the next twelve months. The Company reported a net loss and total comprehensive loss of $222,000 for the three-month period ended October 31, 2020 (October 31, 2019-$2,214,000).

As at October 31, 2020 the Company had working capital of $2,426,000, shareholders’ equity of $2,596,000 and a deficit of $180,738,000. As at July 31, 2020 the Company had working capital of $2,735,000, shareholders’ equity of $2,981,000, a deficit of $180,516,000. The Company will require additional financing in the immediate near term and in the future to see the current research and development initiatives through to completion. There can be no assurance however, that additional financing can be obtained in a timely manner, or at all. Not raising sufficient additional financing on a timely basis may result in delays and possible termination of all or some of the Company’s research and development initiatives, and as a result, may cast significant doubt as to the ability of the Company to operate as a going concern and accordingly, the appropriateness of the use of the accounting principles applicable to a going concern.

These condensed unaudited interim financial statements do not include any adjustments to the carrying amount and classification of reported assets, liabilities and expenses that might be necessary should the Company not be successful in its aforementioned initiatives. Any such adjustments could be material. The Company cannot predict whether it will be able to raise the necessary funds it needs to continue as a going concern.

Statement of compliance These condensed unaudited interim financial statements have been prepared in compliance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34"). The notes presented in these condensed unaudited interim financial statements include only significant events and transactions occurring since the Company’s last fiscal year end and are not fully inclusive of all matters required to be disclosed in its annual audited consolidated financial statements. The policies applied in these condensed unaudited interim financial statements are based on International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

The condensed unaudited interim financial statements of the Company were approved and authorized for issue by the Board of Directors on December 15, 2020. Use of estimates and critical judgments The preparation of the Company’s financial statements requires management to make critical judgments, estimates and assumptions that affect the reported amounts of expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. On an ongoing basis, management evaluates its judgments, estimates and assumptions using historical experience and various other factors it believes to be reasonable under the given circumstances. Actual outcomes may differ from these estimates that could require a material adjustment to the reported carrying amounts in the future. The Company has also assessed the impact of COVID-19 on estimates and critical judgements. Although the Company expects COVID-19 related disruptions to continue into the Company’s fiscal 2021 year, the Company believes that the long-term estimates and assumptions do not require significant revisions. Although the Company determined that no significant revisions to such estimates, judgements or assumptions were required, the pandemic is fluid and given the inherent uncertainty at this time, revisions may be required in future periods to the extent that the negative impacts on the Company’s business operations arising from COVID-19 continue or become worse. Any such revision could result in a material impact on the Company’s financial performance and financial condition.

The Company has received no government assistance. The most significant critical estimates and judgments made by management include the following: a) Going Concern Significant judgments related to the Company’s ability to continue as a going concern are disclosed in the first paragraph above in Note 1. 6 HELIX BIOPHARMA CORP.

Notes to condensed unaudited interim financial statements For the three-month periods ended October 31, 2020 and 2019 Tabular dollar amounts in thousands of Canadian dollars, except per share amounts

b) Consolidation Control is achieved when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Subsidiaries are fully consolidated from the date on which control is acquired by the Company. Intercompany transactions and balances are eliminated upon consolidation. Subsidiaries are de-consolidated from the date that control by the Company ceases. Significant judgment is used in determining whether the Company has lost control of a subsidiary resulting in de-consolidating the subsidiary.

c) Clinical study expenses Clinical study expenses are accrued based on services received and efforts expanded pursuant to contracts with contract research organizations ("CROs"), consultants, clinical study sites and other vendors. In the normal course of business, the Company contracts with third parties to perform various clinical study activities. The financial terms of these agreements vary from contract to contract and are subject to negotiations that may result in uneven payment outflows. Payments under the contracts depend on various factors such as the achievement of certain events, the successful enrolment of patients or the completion of portions of the clinical study and/or other similar conditions.

The Company determines the accruals by reviewing contracts, vendor agreements and purchase orders, and through discussions with internal personnel and external providers as to the progress or stage of completion of the clinical studies or services and the agreed-upon fee to be paid for such services. However, actual costs and timing of the Company’s clinical studies is uncertain, subject to risk and may change depending upon a number of factors, including the Company’s clinical development plans and trial protocols.

d) Valuation of share-based compensation and warrants Management measures the costs for share-based compensation and warrants using market-based option valuation techniques. Assumptions are made and estimates are used in applying the valuation techniques. These include estimating the future volatility of the share price, expected dividend yield, future employee turnover rates, and future exercise behaviours. Such estimates and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates of share-based payments and warrants.

e) Income taxes Deferred tax assets, including those arising from unutilized tax losses, require management to assess the likelihood that the Company will generate future taxable income in future years in order to utilize any deferred tax asset which has been recognized. Estimates of future taxable income are based on forecasted cash flows. At the current statement of financial position date, no deferred tax assets have been recognized in these financial statements.

f) Impairment of long-lived assets Long-lived assets are reviewed for impairment upon the occurrence of events or changes in circumstances indicating that the carrying value of the asset may not be recoverable. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or cash-generating unit). An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Management evaluates impairment losses for potential reversals when events or circumstances warrant such consideration. Functional and presentation currency The functional and presentation currency of the Company is the Canadian dollar.

2. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these condensed unaudited interim financial statements. Basis of accounting for subsidiary The Company’s investment in Helix Immuno-Oncology S.A. ("HIO") was consolidated and classified as held for sale and was presented as discontinued operations at July 31, 2020. At September 3, 2020 HIO completed a direct financing with an arm’s length party. As a result of the financing the Company’s ownership in HIO was diluted down to 29.89% and as a result, the Company has determined that it has lost control of HIO. As the Company’s interest allows the Company to exert significant influence over HIO, the Company’s remaining interest is now accounted for as an interest in associate using the equity method. HIO was incorporated on July 6, 2013 in Poland.

At October 31, 2020, the Company’s ownership in HIO was diluted to 29.89%. 7 HELIX BIOPHARMA CORP. Notes to condensed unaudited interim financial statements For the three-month periods ended October 31, 2020 and 2019 Tabular dollar amounts in thousands of Canadian dollars, except per share amounts Cash The Company considers cash on hand, bank deposits in Canada and Poland and bank term deposits with maturities of 90 days or less as cash. Property, plant and equipment Property, plant and equipment are recorded at cost less accumulated depreciation. Impairment charges are included in accumulated depreciation. Leases The Company recognizes a right-of-use asset and a lease liability at the lease commencement date.

The right-of-use asset is initially measured at cost. Subsequent to initial application, the right-of-use asset is measured at cost less any accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability. In comparison, the lease liability is increased by the interest cost on the lease liability and decreased by lease payments made.

It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Company has applied judgment to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognized.

Research and development costs Research costs are expensed as incurred. Development costs are expensed as incurred except for those which meet the criteria for deferral, in which case, the costs are capitalized and amortized to operations over the estimated period of benefit. No costs have been deferred to date. Investment tax credits The Company is entitled to Canadian federal and provincial investment tax credits, which are earned as a percentage of eligible research and development expenditures incurred in each taxation year. Investment tax credits are accounted for as a reduction of the related expenditure for items of a current nature and a reduction of the related asset cost for items of a capital nature, provided that the Company has reasonable assurance that the tax credits will be realized. Stock-based compensation The Company accounts for stock-based compensation and other stock-based payments awarded to employees in accordance with the fair value method.

The fair value of stock options granted is determined at the appropriate measurement date using the Black-Scholes option pricing model, and generally expensed over the options’ vesting period for employee awards. Awards with graded vesting are considered multiple awards for fair value measurement and stock-based compensation calculation. In determining the expense, the Company accounts for forfeitures using an estimate based on historical trends. When stock-based compensation and other stock-based payments are awarded to persons other than non-employees, share capital is increased for the fair value of goods and services received. Foreign currency translation The Company’s currency of presentation is the Canadian dollar, which is also the Company’s functional currency. Foreign currency-denominated items are translated into Canadian dollars. Monetary assets and liabilities in foreign currencies are translated into Canadian dollars at the rates of exchange in effect at the balance sheet dates. Non-monetary items are translated at historical exchange rates. Revenue and expenses are translated at the exchange rates prevailing at their respective transaction dates. Exchange gains and losses arising on translation are included in income. Income taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement 8

HELIX BIOPHARMA CORP.

Notes to condensed unaudited interim financial statements For the three-month periods ended October 31, 2020 and 2019 Tabular dollar amounts in thousands of Canadian dollars, except per share amounts carrying amounts of certain existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of substantive enactment. Given the Company’s history of net losses and expected future losses, the Company is of the opinion that it is probable that these tax assets will not be realized in the foreseeable future and therefore, the deferred tax asset has not been recognized. Financial instruments The Company’s financial assets and liabilities are initially recorded at fair value and subsequently measured based on their assigned classifications as follows.

The classification depends on the nature and purpose of the financial asset or liability and is determined at the time of initial recognition. De-recognition of financial assets and liabilities De-recognition is applied for all or part of a financial asset when the contractual rights to the cash flows and benefits from the financial asset expire, the Company loses controls of the assets, or the Company substantially transfers the significant risks and rewards of ownership of the asset. De-recognition is applied for all or part of a financial liability when the liability is extinguished due to cancellation or discharge or expiry of the obligation.

Impairment
(i) Financial assets: On an individual basis, material financial assets are assessed for indicators of impairment at the end of each reporting period. Other individually non-material financial assets are tested as a group of financial assets based on similar risk characteristic. Financial assets are considered to be impaired when based upon an expected loss model as prescribed by IFRS 9, taking into consideration both historic and forward-looking information. For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s effective interest rate. Impairment losses are recognized in income and reflected in an allowance account against the respective financial asset.

(ii) Non-financial assets: The carrying amounts of the Company’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the recoverable amount is estimated. The recoverable amount of an asset or a cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of cash inflows of other assets or cash-generating units.

An impairment loss is recognized if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount. Impairment losses recognized in prior periods are assessed each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized. Basic and diluted loss per common share Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted loss per share is computed similarly to basic loss per share, except that the weighted average shares outstanding are increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price

9 HELIX BIOPHARMA CORP.
Notes to condensed unaudited interim financial statements For the three-month periods ended October 31, 2020 and 2019 Tabular dollar amounts in thousands of Canadian dollars, except per share amounts during the reporting periods. The inclusion of the Company’s stock options and warrants in the computation of diluted loss per share has an anti-dilutive effect on the loss per share and, therefore, they have been excluded from the calculation of diluted loss per share. Government Grants and Disclosure of Government Assistance Government grant funds are recognised in income when there is reasonable assurance that the Company has complied with the conditions attached to them and that the grant funds will be received. Grant funds receivable are recognized in income over the periods in which the entity recognizes as expenses, the related costs for which the grant is intended to compensate.

3. New accounting standards and pronouncements not yet adopted There are no new accounting standards and pronouncements issued but not yet effective up to the date of issuance of the Company’s condensed unaudited interim financial statements that are expected to have a material impact on the Company.

4. Property, plant and equipment5. Right-of-use assets The movement and carrying amounts of the Company’s right-of-use assets and lease liabilities for the three-month periods ended: 6. Shareholders’ equity Preferred shares Authorized 10,000,000 preferred shares. As at October 31, 2020 and July 31, 2020 the Company had nil preferred shares issued and outstanding.

Common shares and share purchase warrants Authorized unlimited common shares without par value. As at October 31, 2020 the Company had 132,933,017 (July 31, 2020 – 132,933,017) common shares issued and outstanding. On August 21, 2019, the Company completed a private placement financing of 13,725,500 units of the Company at a price of $0.51 per unit and the disposition of a 25% stake of its Polish subsidiary, for aggregate gross proceeds of approximately $7,000,000. Each unit consisted of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share of the Company at a price of $0.72 until August 20, 2024. Of the aggregate gross proceeds, approximately $755,000 was allocated to the disposition of the Company’s 25% stake in its Polish subsidiary with costs totalling approximately $99,000. Of the residual gross proceeds amount of $6,245,000, approximately $2,275,000 was allocated to the share purchase warrants based on fair value and approximately $3,970,000 was allocated to thecommon shares.

Share issue costs totalling $815,000 were proportionately allocated to the share purchase warrants ($297,000) and the common shares ($518,000), respectively. On January 13, 2020, the Company completed a private placement financing of 2,940,000 units of the Company at a price of $1.02 per unit and the disposition of an 8.5% stake of its Polish subsidiary, for aggregate gross proceeds of approximately $2,999,000. Each unit consisted of one common share and one common share purchase warrant.

Each common share purchase warrant entitles the holder to purchase one common share of the Company at a price of $1.42 until January 12, 2025. Of the aggregate gross proceeds, approximately $433,000 was allocated to the disposition of the Company’s 8.5% stake in its Polish subsidiary with costs totalling approximately $57,000. Of the residual gross proceeds amount of $2,566,000, approximately $956,000 was allocated to the share purchase warrants based on fair value and approximately $1,610,000 was allocated to the common shares. Share issue costs totalling approximately $339,000 were proportionately allocated to the share purchase warrants ($126,000) and the common shares ($213,000), respectively.

On March 12, 2020, the Company completed a private placement financing of 5,042,016 units of the Company at a price of $1.19 per unit including the disposition of a 15.5% stake of its Polish subsidiary, for aggregate gross proceeds of approximately $6,000,000. Each unit consisted of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share of the Company at a price of $1.67 until March 11, 2025. Of the aggregate gross proceeds, approximately $791,000 was allocated to the disposition of the Company’s 15.5% stake in its Polish subsidiary with costs totalling approximately $103,000. Of the residual gross proceeds amount of $5,209,000, approximately $1,900,000 was allocated to the share purchase warrants based on fair value and approximately $3,310,000 was allocated to the common shares. Share issue costs totalling approximately $682,000 were proportionately allocated to the share purchase warrants ($249,000) and the common shares ($433,000), respectively.During the three-month perioded ended October 31, 2020, a total of 4,546,000 warrants expired unexercised.

Stock options The Company’s equity compensation plan reserves up to 10% of the Company’s outstanding common shares from time to time for granting to directors, officers and employees of the Company or any person or company engaged to provide ongoing management or consulting services. Based on the Company’s current issued and outstanding common shares as at October 31, 2020, options to purchase up to 13,293,301 common shares (July 31, 2020 – 13,293,301) may be granted under the plan. As at October 31, 2020, options to purchase a total of 7,275,000 common shares (July 31, 2020 – 5,225,000) were issued and outstanding under the equity compensation plan.Weighted average market share prices for stock options exercised during the three-month periods ended October 31, 2020 and 2019 were both $nil, respectively.

For the three-month period ended October 31, 2020, 1,075,000 stock options vested (October 31, 2019 – nil) with a fair value of $327,000 (October 31, 2019 – $nil)7. Commitments, contingent liabilities and contingent assets 8. Capital risk managementSince inception, the Company has financed its operations from public and private sales of equity, the exercise of warrants and stock options, and, to a lesser extent, from interest income from funds available for investment, government grants and investment tax credits. Since the Company does not have net earnings from its operations, the Company’s long-term liquidity depends on its ability to access capital markets, which depends substantially on the success of the Company’s ongoing research and development programs, as well as capital market conditions and availability.

The Company does not currently have enough cash reserves to fully fund its clinical trials nor does the Company have sufficient cash reserves to meet anticipated cash needs for working capital and capital expenditures through at least the next twelve months. The Company does not have any credit facilities and is therefore not subject to any externally imposed capital requirements or covenants. See also Note 1-Basis of presentation and going concern.

9. Financial instruments and risk management Fair value hierarchy Financial instruments recorded at fair value on the balance sheet are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements.

The fair value hierarchy has the following levels:

a. Level 1 reflects valuation based on quoted prices observed in active markets for identical assets or liabilities;
b. Level 2 reflects valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and c. Level 3 reflects valuation techniques with significant unobservable market inputs.

A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. Fair value The fair value of financial instruments as at October 31, 2020 and July 31, 2020 approximates their carrying value because of the near-term maturity of these instruments.

Financial risk management The Company is exposed to a variety of financial risks by virtue of its activities: market risk (including currency and interest rate risk), credit risk and liquidity risk. The overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on financial performance. Risk management (the identification and evaluation of financial risk) is carried out by the finance department, in close cooperation with management. The finance department is charged with the responsibility of establishing controls and procedures to ensure that financial risks are mitigated in accordance with the approved policies.

The Company’s Board of Directors has the overall responsibility for the oversight of these risks and reviews the Company’s policies on an ongoing basis to ensure that these risks are appropriately managed. Market risk Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the Company’s income or the value of its financial instruments. Currency risk The Company has international transactions and is exposed to foreign exchange risks from various currencies, primarily the Euro and U.S. dollar.

In addition, foreign exchange risks arise from purchase transactions, as well as recognized financial assets and liabilities denominated in foreign currencies.Any fluctuation in the exchange rates of the foreign currencies listed above could have an impact on the Company’s results from operations; however, they would not impair or enhance the ability of the Company to pay its foreign-denominated expenses. Interest rate risk Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in interest rates, which are affected by market conditions. The Company is exposed to interest rate risk arising from fluctuations in interest rates received on its cash and cash equivalents.

The Company does not have any credit facilities and is therefore not subject to any debt related interest rate risk. The Company manages its interest rate risk by maximizing the interest income earned on excess funds while maintaining the liquidity necessary to conduct its operations on a day-to-day basis. Any investment of excess funds is limited to risk-free financial instruments. Fluctuations in the market rates of interest do not have a significant impact on the Company’s results of operations due to the relatively short-term maturity of any investments held by the Company at any given point in time and the low global interest rate environment.

The Company does not use derivative instruments to reduce its exposure to interest rate risk. Credit risk Credit risk is the risk of a financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligation.Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its obligations as they come due. Since inception, the Company has mainly relied on financing its operations from public and private sales of equity.

The Company does not have any credit facilities and is therefore not subject to any externally imposed capital requirements or covenants. The Company manages its liquidity risk by continuously monitoring forecasts and actual cash flow from operations and anticipated investing and financing activities. The Company’s cash reserves as at October 31, 2020 are insufficient to meet anticipated cash needs for working capital and capital expenditures through the next twelve months, nor are they sufficient to see the current research and development initiates through to completion. To the extent that the Company does not believe it has sufficient liquidity to meet its current obligations, management considers securing additional funds primarily through equity arrangements to be of utmost importance.

The Company’s long-term liquidity depends on its ability to access the capital markets, which depends substantially on the success of the Company’s ongoing research and development programs, as well as economic conditions relating to the state of the capital markets generally. Accessing the capital markets is particularly challenging for companies that operate in the biotechnology industry

10. Related party transactions

11. Research and development projects Included in research and development expenditures are costs directly attributable to the various research and development functions and initiatives the Company has underway and include: salaries; bonuses; benefits; stock-based compensation; depreciation of property, plant and equipment; patent costs; consulting services; third party contract manufacturing, third party clinical research organization services; and all overhead costs associated with the Company’s research facilities.

12. Operating, General and Administration13. Deconsolidation of subsidiary held for sale The Company’s investment in HIO was classified as held for sale and was presented as discontinued operations at July 31, 2020.

At September 3, 2020 HIO completed a direct financing with an arm’s length party. As a result of the financing the Company’s ownership in HIO was diluted down to 29.89% and as a result, the Company has determined that it has lost control of HIO. As the Company’s interest allows the Company to exert significant influence over HIO, the Company’s remaining interest is now accounted for as an interest in associate using the equity method. The Company’s remaining interest in HIO was recognized at its fair value as at September 3, 2020 based on the post financing valuation.

The difference between the carrying value of the net assets of HIO and non-controlling interest and the value assigned to the shares of $2,231,000 was recognized as a gain on loss of control of subsidiary14. Subsequent events On November 9, 2020, the Company announced that it has signed a definitive share purchase agreement with CAIAC Fund Management AG ("CAIAC") to purchase the Company’s remaining 29.89% holdings in HIO, for gross proceeds of PLN 6,700,000 (CAD$2,308,000). The funds were wired by CAIAC on November 13, 2020.

Closing of the transaction is to occur upon finalizing administrative reporting requirements and evidence of share registry changes in Poland. COVID-19 has had an impact on closing the transaction. Upon closing of the transaction, the Company is committed to paying ACMest a transaction fee equal to 12.5% of the gross proceeds. On December 4, 2020, the Company closed a private placement financing of 2,200,000 units at a price of $0.50 per unit, for aggregate gross proceeds of $1,100,000. Each unit consisted of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one common share of the Company at a price of $0.70 and have an expiry of five years from the date of issuance.

Janssen Initiates Rolling Submission of a Biologics License Application to U.S. FDA for BCMA CAR-T Therapy Ciltacabtagene Autoleucel (cilta-cel) for the Treatment of Relapsed and/or Refractory Multiple Myeloma

On December 21, 2020 The Janssen Pharmaceutical Companies of Johnson & Johnson reported the initiation of a rolling submission of its Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for ciltacabtagene autoleucel (cilta-cel), an investigational B-cell maturation antigen (BCMA)-directed chimeric antigen receptor T cell (CAR-T) therapy, for the treatment of adults with relapsed and/or refractory multiple myeloma (Press release, Janssen Pharmaceuticals, DEC 21, 2020, View Source [SID1234573187]).

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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

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"We are committed to innovation in cell therapy and advancing the science of multiple myeloma to improve patients’ lives," said Peter Lebowitz, M.D., Ph.D., Global Therapeutic Area Head, Oncology, Janssen Research & Development, LLC. "Today’s milestone is the culmination of a remarkable clinical development effort and collaboration with Legend Biotech. We look forward to working with the FDA in their review of cilta-cel with the goal of bringing a highly-active, dual-binding BCMA CAR-T therapy to patients with relapsed and/or refractory multiple myeloma who are in need of new treatment options."

The FDA previously granted Breakthrough Therapy Designation (BTD) for cilta-cel and has agreed to a rolling review of the BLA in which completed portions of the application will be submitted and reviewed on an ongoing basis. Data for cilta-cel were recently presented (Abstract #177) at the 62nd American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting.

"Our immuno-oncology capabilities combined with our dedicated Janssen R&D team, who continue to work in close collaboration with Legend Biotech, have enabled the expeditious investigational advancement of cilta-cel," said Mathai Mammen, M.D., Ph.D., Global Head, Janssen Research & Development, Johnson & Johnson. "Today’s submission marks Janssen’s first cell therapy application, but more importantly, brings cilta-cel one step closer to our goal of making new medical options available to patients with multiple myeloma."

About CARTITUDE-1
CARTITUDE-1 (NCT03548207) is an ongoing Phase 1b/2, open-label, multi-center study evaluating the safety and efficacy of cilta-cel in adults with relapsed and/or refractory multiple myeloma, 99 percent of whom were refractory to the last line of treatment and 88 percent of whom were triple-class refractory, meaning their cancer did not respond, or no longer responds, to an immunomodulatory agent (IMiD), a proteasome inhibitor (PI) and an anti-CD38 antibody.

The primary objective of the Phase 1b portion of the study was to characterize the safety and confirm the dose of cilta-cel, informed by the first-in-human study with LCAR-B38M CAR-T cells (LEGEND-2). Based on the safety profile observed in this portion of the CARTITUDE-1 study, the Phase 2 portion further evaluated the efficacy of cilta-cel at the recommended Phase 2 dose with overall response as the primary endpoint.

About ciltacabtagene autoleucel (cilta-cel)
Cilta-cel is an investigational CAR-T therapy being studied in a comprehensive clinical development program for the treatment of patients with relapsed and/or refractory multiple myeloma and in earlier lines of treatment. Cilta-cel is a unique, structurally differentiated CAR-T cell therapy containing a 4-1BB co-stimulatory domain and two BCMA-targeting single-domain antibodies with a preferential CD8+ T-cell expansion. BCMA is a protein that is highly expressed on myeloma cells.1 CAR-T cells are an innovative approach to eradicating cancer cells by harnessing the power of a patient’s own immune system. The safety profile observed to date for cilta-cel supports the potential for outpatient dosing, which will be evaluated in ongoing clinical studies.

In December 2017, Janssen Biotech, Inc. entered into an exclusive worldwide license and collaboration agreement with Legend Biotech USA Inc. to develop and commercialize cilta-cel.

In addition to a U.S. BTD granted in December 2019, cilta-cel received a PRIority MEdicines (PRiME) designation from the European Commission in April 2019, and a BTD in China in August 2020. Janssen also received Orphan Drug Designation for cilta-cel from the FDA in February 2019 and from the European Commission in February 2020.

About Multiple Myeloma
Multiple myeloma is an incurable blood cancer that affects a type of white blood cell called plasma cells, which are found in the bone marrow.2,3 When damaged, these plasma cells rapidly spread and replace normal cells with tumors in the bone marrow.3 In 2020, it is estimated that 32,270 people will be diagnosed and 12,830 will die from the disease in the U.S.4 While some patients with multiple myeloma have no symptoms, most patients are diagnosed due to symptoms which can include bone fracture or pain, low red blood cell counts, tiredness, high calcium levels, kidney problems or infections.3

BioEclipse Initiates Enrollment in Phase 1 Dose-Escalation Clinical Trial for CRX100

On December 21, 2020 BioEclipse Therapeutics (BioEclipse), a private clinical-stage biopharmaceutical company with a proprietary platform for developing next-generation cancer immunotherapies, reported the initiation of patient enrollment in a Phase 1 dose-escalation trial to treat refractory solid tumors (Press release, BioEclipse Therapeutics, DEC 21, 2020, View Source [SID1234573186]). The trial marks the first-in-human study of CRX100, an intravenously-delivered cancer therapy designed to target and destroy multiple cancer types and address disease recurrence.

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Patient enrollment is underway at our first clinical trial site, Moores Cancer Center at UC San Diego Health in La Jolla, CA. Additional clinical trial sites are expected to follow. More information about this study and general information about participating in clinical trials can be found at ClinicalTrials.gov.

"The launch of this clinical trial marks a significant milestone in the clinical development of CRX100 and is a further step toward bringing patients with few treatment options a single therapeutic designed to attack multiple cancer types," stated Pamela Contag, Ph.D., founder and CEO of BioEclipse. "We believe CRX100 has the potential to address the growing unmet need for treatments of solid tumors and metastatic disease believed to be untreatable, and that are currently underrepresented in clinical trials."

This open-label, Phase 1 dose-escalation study is designed to determine the safety, tolerability, and pharmacokinetic (PK) properties of CRX100 in up to 24 participants ­18 years or older with advanced solid tumors that do not respond to standard of care. The trial specifically targets six potential cancer indications, including: triple-negative breast cancer, colorectal cancer, hepatocellular carcinoma, osteosarcoma, epithelial ovarian cancer, and gastric cancer. Each patient will receive up to two doses of CRX100. As secondary endpoints, the trial will also investigate the effect CRX100 has on a participant’s tumor progression and overall immune response.

BioEclipse is currently focused on the treatment of recurring cancers with a unique multi-mechanistic approach that could address cancers believed to be untreatable. Developed with technology exclusively licensed from Stanford University, CRX100 combines activated immune cells, known as cytokine-induced killer (CIK) cells, with a tumor-killing virus. As stand-alone therapies, these two agents have previously been assessed in human studies. When combined to create CRX100, the CIK cells protect the oncolytic virus and deliver it to cancer cells throughout the body. The two components then work together to attack primary tumors and metastatic disease. Data from preclinical studies shows that this combination approach also can trigger a long-lasting immune response that protects against relapse and disease recurrence.

"The initiation of this clinical trial is welcome news given the urgent need for more effective approaches, especially for patients with cancer refractory to standard treatments," said Sandip Patel, M.D., Associate Professor at University of California San Diego School of Medicine and a Principal Investigator for this study. "If CRX100’s treatment approach delivers the same compelling results in humans as it has in preclinical models, it has the potential to address several types of cancer with an otherwise poor prognosis and bring new hope to our patients and their families."

Jazz Pharmaceuticals Announces Initiation of Biologics License Application Submission for JZP-458 for the Treatment of Acute Lymphoblastic Leukemia or Lymphoblastic Lymphoma

On December 21, 2020 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported that the company has initiated the submission of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) seeking marketing approval for JZP-458 for use as a component of a multi-agent chemotherapeutic regimen for the treatment of acute lymphoblastic leukemia (ALL) or lymphoblastic lymphoma (LBL) in adult and pediatric patients who have developed hypersensitivity or silent inactivation to E. coli-derived asparaginase (Press release, Jazz Pharmaceuticals, DEC 21, 2020, View Source [SID1234573184]).

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The BLA was initiated and will be reviewed under the Real-Time Oncology Review (RTOR) pilot program, an initiative of the FDA’s Oncology Center of Excellence designed to expedite the delivery of safe and effective cancer treatments to patients.

"Given the urgent need for a reliable and high-quality recombinant asparaginase option for patients with hypersensitivity to E. coli-derived asparaginase, we are committed to bringing JZP-458 to market as quickly as possible and pleased to be initiating our BLA submission," said Robert Iannone, M.D., M.S.C.E., executive vice president, research and development of Jazz Pharmaceuticals. "Receiving a Fast Track designation for JZP-458 from the FDA in October 2019 and being able to submit the BLA under the RTOR program is significant, potentially allowing us to more quickly address patient need with a new asparaginase option."

The company continues to plan for a mid-2021 launch of JZP-458 following completion of the BLA submission and FDA review and approval.

An ongoing Phase 2/3 study is being conducted in collaboration with the Children’s Oncology Group (COG) to evaluate JZP-458 as a potential treatment option for pediatric and adult patients with ALL or LBL who are hypersensitive to E. coli-derived asparaginases. Hypersensitivity reactions affect up to 30 percent of patients with ALL and LBL who are treated with E. coli-derived asparaginase.1

About JZP-458
JZP-458 is a recombinant Erwinia asparaginase that uses a novel Pseudomonas fluorescens expression platform. It is being developed for use as a component of a multi-agent chemotherapeutic regimen in the treatment of pediatric and adult patients with acute lymphoblastic leukemia (ALL) or lymphoblastic lymphoma (LBL) who are hypersensitive to E. coli-derived asparaginase products. JZP-458 was granted Fast Track designation by the U.S. Food and Drug Administration in October 2019 for the treatment of this patient population.

About Acute Lymphoblastic Leukemia
Acute lymphoblastic leukemia (ALL) is a cancer of the blood and bone marrow that can progress quickly if not treated.2 Leukemia is the most common cancer in children, and about three out of four of these cases are ALL.3 Although it is one of the most common cancers in children, ALL is among the most curable of the pediatric malignancies due to recent advancements in treatment.4,5 Adults can also develop ALL, and about four of every 10 cases of ALL diagnosed are in adults.6 The American Cancer Society estimates that almost 6,000 new cases of ALL will be diagnosed in the United States in 2019.6 Asparaginase is a core component of multi-agent chemotherapeutic regimens in ALL.7 However, asparaginase treatments derived from E. coli are associated with the potential for development of hypersensitivity reactions.8

GT BIOPHARMA ANNOUNCES FDA DATA – GTB-3550 TriKE™ REDUCES CANCER CELLS BY 61.7% FOR A HIGH-RISK MYELODYSPLASTIC SYNDROMES (HR-MDS) PATIENT

On December 21, 2020 GT Biopharma, Inc. (OTCQB: GTBP) (GTBP.PA) an immuno-oncology company focused on innovative therapies based on the Company’s proprietary NK cell engager (TriKE) technology platform reported the presentation of additional interim data results for the Company’s lead therapeutic candidate, GTB-3550, for the treatment of high-risk myelodysplastic syndromes (HR-MDS) (Press release, GT Biopharma, DEC 21, 2020, View Source;gtb-3550-trike-reduces-cancer-cells-by-61-7-for-a-high-risk-myelodysplastic-syndromes-hr-mds-patient-301196659.html [SID1234573183]).

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Erica Warlick, M.D, Principal Investigator for the GTB-3550 clinical trial, presented additional clinical data results with the treatment with HR-MDS patient #7 of its TriKE GTB-3550 during the Q&A session following her presentation at the 62nd American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition. Dr. Warlick’s HR-MDS patient presentation can be viewed on the GT Biopharma web site at View Source

Mr. Anthony Cataldo, the Chairman and Chief Executive Officer of GT Biopharma commented, "Our clinical data demonstrates that our proprietary TriKE (CD16/IL15/CD33), safely activated and harnessed the patient’s native NK cell’s cancer killing ability in a target-directed fashion without side effects. Which is not the case with highly expensive and intrusive supplemental NK cell therapies. We look forward to progressing to the next level."

Clinical Benefit Achieved

Prior to being treated with TriKE GTB-3550, the HR-MDS patient failed hypomethylating agent (HMA) and Luspatercept therapies. With TriKE GTB-3550 at 50mcg/kg/day (three consecutive 96-hour continuous infusions), the patient achieved a successful bone marrow blast level reduction from 12% before GTB-3550 therapy to 4.6% post GTB-3550 therapy determined by morphological assessment, Additionally, the patient achieved stable hematologic parameters including normal platelet counts throughout therapy. Following this single course of GTB-3550 TriKE therapy causing significant reduction in bone marrow blast levels, the patient achieved clinical benefit from GTB-3550 therapy, which qualified patient #7 to receive a hematopoietic stem cell transplant (HSCT).

No Toxicities / Potent Native NK Cell Activation and Proliferation achieved without Supplemental NK Cell Therapy

The patient exhibited NO SIDE AFFECTS or signs of clinical immune activation, and NO DOSE LIMITING TOXICITY such as cytokine release syndrome (CRS) or serious adverse events (SAEs) or fevers, tachycardia or constitutional symptoms which are synonymous with other NK Cell Therapy and NK Engagers. Correlative studies showed no shedding of CD16 from patient’s NK cells, and potent NK cell activation, proliferation and target cell killing without the need for supplemental autologous NK cell therapy.

Targeted delivery of IL-15 to NK cells via GTB-3550 TriKE therapy showed preferential proliferation of NK cells, significantly less effect on CD8+ T-cells, and no observed toxicity at 25x the previous reported MTD for continuous infusion of recombinant human IL-15. GTB-3550 TriKE is a single-chain, tri-specific scFv recombinant fusion protein conjugate composed of the variable regions of the heavy and light chains of anti-CD16 and anti-CD33 antibodies, and a modified form of IL-15.

GTB-3550 Therapy Prior to Hematopoietic Stem Cell Transplant (HSCT)

The only treatment with curative intent for a majority of elderly HR-MDS or relapsed/refractory AML patients is allogeneic hematopoietic stem cell transplant (HSCT). Age is one of the strongest risk factors associated with poor outcome. Difficulties in treating elderly patients include comorbidities, reduced performance status, and a disease biology with more frequent aberrant cytogenetics and multidrug resistance. There is a significant gap between elderly patients in need of HSCT, and those actually receiving HSCT due to their failure to meet the eligibility requirements. TriKEGTB-3550 represents a novel, low intensity therapeutic option which has the potential to increase HSCT eligibility for elderly HR-MDS and relapsed/refractory AML patients.

Mr. Anthony Cataldo, the Chairman and Chief Executive Officer of GT Biopharma commented "we are gratified that GTB-3550 TriKE achieved the threshold of clinical benefit, and the HR-MDS patient became eligible for HSCT." Mr. Cataldo further stated "we believe our clinical data demonstrates that our proprietary CD16 and IL-15 incorporated in TriKE safely activates and harnesses the patient’s native NK cell’s cancer killing ability in a target-directed fashion without the need for highly expensive and intrusive supplemental NK cell therapies. The TriKE platform biologic technology is demonstrating its capabilities as a first in class drug never before done technology."

About High-Risk Myelodysplastic Syndromes (MDS)

MDS is a rare form of bone marrow-related cancer caused by irregular blood cell production within the bone marrow. As a result of this irregular production, MDS patients do not have sufficient normal red blood cells, white blood cells and/or platelets in circulation. High-risk MDS is associated with poor prognosis, diminished quality of life, and a higher chance of transformation to acute myeloid leukemia. Approximately 40% of patients with High-Risk MDS transform to acute myeloid leukemia (AML), another aggressive cancer with poor outcomes.

About GTB-3550 TriKE Clinical Trial

Patients with CD33+ malignancies (primary induction failure or relapsed AML with failure of one reinduction attempt or high-risk MDS progressed on two lines of therapy) age 18 and older are eligible (NCT03214666). The primary endpoint is to identify the maximum tolerated dose (MTD) of GTB-3550 TriKE. Correlative objectives include the number, phenotype, activation status and function of NK cells and T cells.

About GTB-3550 TriKE

GTB-3550 is the Company’s first TriKE product candidate being initially developed for the treatment or relapsed/refractory acute myeloid leukemia (AML), high-risk myelodysplastic syndrome (HR-MDS). GTB-3550 is a single-chain, tri-specific scFv recombinant fusion protein conjugate composed of the variable regions of the heavy and light chains of anti-CD16 and anti-CD33 antibodies and a modified form of IL-15. The natural killer (NK) cell stimulating cytokine human IL-15 portion of the molecule provides a self-sustaining signal that activates NK cells and enhances their ability to kill cancer cells.