On February 27, 2024 Recursion (Nasdaq : RXRX), a leading clinical stage TechBio company decoding biology to industrialize drug discovery, reported business updates and financial results for its fourth quarter and fiscal year ended December 31, 2023 (Press release, Recursion Pharmaceuticals, FEB 27, 2024, View Source [SID1234640542]).

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"2023 was a year of remarkable progress for Recursion as we continued to demonstrate how combining technology, biology, chemistry, and patient data can industrialize drug discovery, and we look forward to the milestones ahead of us in 2024," said Chris Gibson, Ph.D., Co-founder and CEO of Recursion. "As we have watched the dynamics of our landscape, it appears that BioTech is increasingly evolving into TechBio, where it is imperative for life science companies to embrace digital nativity similar to how SaaS companies 10+ years ago evolved to being cloud-native in order to thrive. In this data-driven age, we believe the most important differentiator will be connected data in order to increasingly understand and treat the complexities of human disease. Recursion plans to continue leading the field in terms of data generation and aggregation."

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Summary of Business Highlights

•Platform
◦Causal AI Modeling and Additional Datasets: We have been training causal AI models leveraging over 20 petabytes of multimodal precision oncology patient data from Tempus to support the discovery of potential biomarker-enriched therapeutics at scale. By combining the forward genetics approach of Tempus

with the reverse genetics approach at Recursion, we believe we have an opportunity to improve the speed, precision, and scale of therapeutic development in oncology. This work has already resulted in a directed-oncology program against a novel gene/disease relationship in a large oncology indication. Recursion intends to operate both as a data generator and multimodal data aggregator. In the future, we intend to augment our dataset and hone the Recursion OS with germline genetic data, organoid technologies, and automated nano-synthesis technologies.
◦LOWE (Large Language Model-Orchestrated Workflow Engine): LOWE is an LLM agent that represents the next evolution of the Recursion OS. LOWE supports drug discovery programs by orchestrating complex wet and dry-lab workflows via natural language prompts. These workflows are the steps and tools available in the Recursion OS, from finding significant relationships across biology, chemistry, and patient-centric data to generating novel compounds and scheduling them for synthesis and experimentation. Through its natural language interface and interactive graphics, LOWE can put state-of-the-art AI tools into the hands of every drug discovery scientist.
•Pipeline
◦Cerebral Cavernous Malformation (CCM) (REC-994): Our Phase 2 SYCAMORE clinical trial is a randomized double-blind, placebo-controlled, safety, tolerability and exploratory efficacy study of REC-994 in participants with CCM. This trial was fully enrolled in June 2023 with 62 participants and the vast majority of participants who completed 12 months of treatment continue to elect to enter the long-term extension study. We expect to share Phase 2 data in Q3 2024.
◦Neurofibromatosis Type 2 (NF2) (REC-2282): Our adaptive Phase 2/3 POPLAR clinical trial is a randomized, two part study of REC-2282 in participants with progressive NF2-mutated meningiomas. Part 1 of the study is ongoing and is exploring two doses of REC-2282 in approximately 23 adults and 9 adolescents, with enrollment in adults expected to complete in H1 2024. We expect to share Phase 2 safety and preliminary efficacy data in Q4 2024.
◦Familial Adenomatous Polyposis (FAP) (REC-4881): Our Phase 1b/2 TUPELO clinical trial is an open label, multicenter, two part study of REC-4881 in participants with FAP. Part 1 is complete with FPI for Part 2 anticipated in H1 2024. We expect to share Phase 2 safety and preliminary efficacy data in H1 2025.
◦AXIN1 or APC Mutant Cancers (REC-4881): Our Phase 2 LILAC clinical trial is an open label, multicenter study of REC-4881 in participants with unresectable, locally advanced or metastatic cancer with AXIN1 or APC mutations. This study was initiated at the end of 2023, with FPI anticipated in Q1 2024. We expect to share Phase 2 safety and preliminary efficacy data in H1 2025.
◦Clostridioides difficile Infection (REC-3964): We conducted a Phase 1 healthy volunteer study to evaluate the safety, tolerability and PK of REC-3964 at increasing oral doses in comparison with placebo. REC-3964 was safe and well tolerated and there were no serious adverse events, deaths or TEAEs that led to discontinuation. REC-3964 is a first-in-class C. difficile toxin inhibitor and the first new chemical entity developed by Recursion, with promising preclinical efficacy data seen in relevant models (superiority versus bezlotoxumab). We expect to initiate a Phase 2 study in 2024.

◦RBM39 HR-Proficient Ovarian Cancers and Other Solid Tumors: RBM39 is a novel CDK12-adjacent target identified by the Recursion OS. We intend to position our lead candidate as a single agent for the potential treatment of HR-proficient ovarian cancers and other HR-proficient solid tumors. As a result of our strategic collaboration with Tempus, we are leveraging genomic data across all tumor types to identify clinical biomarkers for patient expansion. We are advancing our lead candidate through IND-enabling studies with IND submission expected in H2 2024.
◦Undisclosed Indication in Fibrosis (Target Epsilon): Phenotypic screening of human PBMCs identified novel and structurally diverse small molecules that reverse the phenotypic features of disease-state fibrocyte cells into those of healthy-state cells. The most promising compounds were confirmed as potent inhibitors of a novel target for fibrosis. This program originated under our initial fibrosis collaboration with Bayer and we have since in-licensed from Bayer all rights to this program which is now entering IND-enabling studies.
•Partnerships
◦Transformational Collaborations: We continue to advance efforts to discover potential new therapeutics with our strategic partners in the areas of undruggable oncology (Bayer) as well as neuroscience and a single indication in gastrointestinal oncology (Roche-Genentech). In the near-term, there is the potential for option exercises associated with partnership programs, option exercises associated with map building initiatives or data sharing and additional partnerships in large, intractable areas of biology or technological innovation.
◦Enamine: In December 2023, we entered a collaboration with Enamine to generate and design enriched compound libraries for the global drug discovery industry. By leveraging MatchMaker, a Recursion AI model, to identify compounds in the Enamine REAL Space (~36 billion chemical compounds) predicted to bind to high-value targets, we believe we can generate more powerful compound libraries for drug discovery purposes. Enamine may offer the resulting libraries to customers for purchase and will co-brand any libraries under both the Enamine and Recursion’s trademarks. This collaboration is an example of how select data layers can drive value in novel ways.

Additional Corporate Updates
•Letter to Shareholders: Recursion Co-Founder & CEO Chris Gibson, Ph.D. wrote an annual letter to shareholders which may be found in the 10-K report.
•L(earnings) Call: Recursion will host a L(earnings) Call on February 27, 2024 at 5:00 pm Eastern Time / 3:00 pm Mountain Time. A L(earnings) Call is Recursion’s take on interacting with a broad public audience around notable business developments. Recursion will broadcast the live stream from Recursion’s X (formerly Twitter), LinkedIn and YouTube accounts and analysts, investors and the public will be able to ask questions of the company.
•Chief Business Operations Officer: In February 2024, Recursion named Kristen Rushton, M.B.A. as Chief Business Operations Officer. Ms. Rushton has worked at Recursion for over 6 years, previously serving as Senior Vice President of Business Operations. Prior to Recursion, Ms. Rushton worked at Myriad Genetics and Myrexis.
•Annual Shareholder Meeting: Recursion’s Annual Shareholder Meeting will be held on June 3, 2024 at 10:00 am Eastern Time / 8:00 am Mountain Time.

Fourth Quarter and Fiscal Year 2023 Financial Results
•Cash Position: Cash and cash equivalents were $391.6 million as of December 31, 2023, compared to $549.9 million as of December 31, 2022.
•Revenue: Total revenue, consisting primarily of revenue from collaborative agreements, was $10.9 million for the fourth quarter of 2023, compared to $13.7 million for the fourth quarter of 2022. Total revenue, consisting primarily of revenue from collaboration agreements, was $44.6 million for the year ended December 31, 2023, compared to $39.8 million for the year ended December 31, 2022. For the fourth quarter of 2023, the decrease compared to the prior period was due to the timing of workflows from our strategic partnership with Roche-Genentech. For the year ended December 31, 2023 compared to the prior year, the increase was due to revenue recognized from our Roche-Genentech collaboration, which has progressed from primarily cell type evaluation work to inference based Phenomap building and additional cell type evaluation work.
•Research and Development Expenses: Research and development expenses were $69.5 million for the fourth quarter of 2023, compared to $44.0 million for the fourth quarter of 2022. Research and development expenses were $241.2 million for the year ended December 31, 2023, compared to $155.7 million for the year ended December 31, 2022. The increase in 2023 research and development expenses compared to the prior year was due to increased platform costs as we have expanded and upgraded our capabilities in platform including our chemical technology, machine learning and transcriptomics platform.
•General and Administrative Expenses: General and administrative expenses were $30.5 million for the fourth quarter of 2023, compared to $19.8 million for the fourth quarter of 2022. General and administrative expenses were $110.8 million for the year ended December 31, 2023, compared to $81.6 million for the year ended December 31, 2022. The increase in 2023 general and administrative expenses compared to the prior year was primarily driven by an increase in salaries and wages of $12.4 million and increases in legal, software and depreciation expense.
•Net Loss: Net loss was $93.0 million for the fourth quarter of 2023, compared to a net loss of $57.5 million for the fourth quarter of 2022. Net loss was $328.1 million for the year ended December 31, 2023, compared to a net loss of $239.5 million for the year ended December 31, 2022.
•Net Cash: Net cash used in operating activities was $74.1 million for the fourth quarter of 2023, compared to net cash used in operating activities of $44.7 million for the fourth quarter of 2022. Net cash used in operating activities was $287.8 million for the year ended December 31, 2023, compared to net cash used in operating activities of $83.5 million for the year ended December 31, 2022. The difference was primarily driven by a $150.0 million upfront payment from Roche-Genentech in early 2022 and an increase in operating expenses in 2023.

On February 27, 2024 Dynavax Technologies Corporation (Nasdaq: DVAX), a commercial-stage biopharmaceutical company developing and commercializing innovative vaccines, reported that the Company will present at TD Cowen’s 44th Annual Health Care Conference on Monday, March 4 at 10:30 a.m. ET. (Press release, Dynavax Technologies, FEB 27, 2024, View Source [SID1234640540]).

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The presentation will be webcast and may be accessed through the "Events & Presentations" page on the "Investors" section of the Company’s website at View Source

On February 27, 2024 Zentalis Pharmaceuticals, Inc. (Nasdaq: ZNTL), a clinical-stage biopharmaceutical company discovering and developing clinically differentiated small molecule therapeutics targeting fundamental biological pathways of cancers, reported financial results for the year ended December 31, 2023 , and highlighted recent corporate accomplishments (Press release, Zentalis Pharmaceuticals, FEB 27, 2024, View Source [SID1234640537]).

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"Zentalis is making remarkable progress in advancing our clinical development program for azenosertib, our potentially groundbreaking WEE1 inhibitor, across various tumor types," stated Kimberly Blackwell, M.D., Chief Executive Officer of Zentalis. "In November 2023, we disclosed promising clinical data demonstrating the potential of azenosertib as an effective monotherapy in ovarian cancer and uterine serous carcinoma. Our team is diligently executing a clinical strategy, which is firmly on track, designed to rapidly bring this promising therapeutic option to patients with gynecological cancers that continue to have a poor prognosis based on currently available treatment options. We anticipate an exciting and data-rich period ahead during the remainder of 2024 and into 2025 where we plan to share multiple clinical datasets to help further demonstrate the potential of azenosertib in multiple cancer types as a monotherapy and in combination."

Program Updates and Highlights

•Azenosertib development program updates. In November 2023, the Company announced an updated analysis of the ongoing Phase 1 clinical trial of azenosertib as a monotherapy in solid tumors (ZN-c3-001), which continued to show anti-tumor activity with intermittent dosing. In the same population of 19 platinum resistant or refractory ovarian cancer and uterine serous carcinoma (USC) patients that were included in the data reported on June 6, 2023, the objective response rate (ORR) was 37%. Median follow-up had increased and the median progression free survival (mPFS) had increased to 6.5 months. The Company also disclosed in November 2023, that, with additional safety-evaluable patients and follow-up, azenosertib continued to demonstrate a favorable safety and tolerability profile similar to or better than approved ovarian cancer products.

•Azenosertib development continues to progress across a broad array of tumor types. Azenosertib is being evaluated in more than 10 ongoing and planned clinical trials as a monotherapy and in combinations supported by compelling scientific rationales across a broad array of tumor types, including platinum resistant ovarian cancer (PROC), platinum sensitive ovarian cancer (PROC), BRAF mutant metastatic colorectal cancer, and other solid tumors. In addition, the Company is evaluating azenosertib and its BCL-2 inhibitor in patients with relapsed or refractory Acute Myeloid Leukemia (AML).

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•On track to disclose multiple clinical data readouts during 2024 and 2025 (anticipated milestones noted below) and on track to submit its first New Drug Application (NDA) for azenosertib in a gynecologic malignancy in 2026.

Corporate Updates

•Strengthened Leadership Team with the addition of Diana Hausman, M.D. as Chief Medical Officer, and Kyle Rasbach, Ph.D., Pharm.D. as Chief Business Officer. Dr. Hausman is an oncologist with extensive experience in all aspects of drug development and clinical strategy, including over a decade of experience as a Chief Medical Officer at various biopharma companies. During her career, she has contributed to the development of multiple cancer therapeutics, including small molecules, antibody drug conjugates, and immunotherapies. Dr. Rasbach joins from Eventide Asset Management, where he was a Portfolio Manager for Eventide’s healthcare and life sciences strategies, a Managing Director for Eventide Ventures, and a Senior Research Analyst for other Eventide investments. He previously held investment management and equity research roles at several other firms.

•Strengthened balance sheet with licensing of ROR1 antibody drug conjugate and proprietary technology platform to Immunome. Under the terms of the transaction, in January 2024 Zentalis received an up-front payment of $35 million in cash and Immunome common stock and remains eligible to receive up to $275 million of milestone payments and mid-to-high single-digit royalties.

•Hosted a webcast with gynecologic oncology academic expert highlighting the strength of the emerging clinical profile for azenosertib. On November 10, 2023, Zentalis participated in a webcast with Joyce F. Liu, M.D., MPH, to discuss azenosertib ovarian cancer clinical data.

Anticipated Upcoming Milestones

•1H 2024
•Final results of Phase 1 azenosertib + chemotherapy (gemcitabine) trial in osteosarcoma (ZN-c3-003)
•2H 2024
•Final results of Phase 1b azenosertib monotherapy trial in solid tumors (ZN-c3-001)
•Topline data from Phase 1/2 azenosertib + PARP inhibitor (niraparib) and azenosertib monotherapy trial in platinum resistant ovarian cancer in partnership with GSK (MAMMOTH, ZN-c3-006)
•Initial data from Phase 1 azenosertib + BEACON regimen (encorafenib + cetuximab) trial in BRAF mutant metastatic colorectal cancer in partnership with Pfizer (ZN-c3-016)
•Initial data from Phase 1 of azenosertib + ZN-d5 trial in R/R AML (ZN-d5-004C)
•Additional details on planned clinical trial of azenosertib in PSOC in the 1L maintenance setting
•1H 2025
•Topline data from Phase 2 azenosertib monotherapy trial in platinum resistant high-grade serous ovarian cancer (DENALI, ZN-c3-005)
•2H 2025
•Topline data from Phase 2 azenosertib monotherapy trial in recurrent or persistent USC (TETON, ZN-c3-004)
•2025

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•Initiate clinical trial of azenosertib in PSOC in the 1L maintenance setting
•2026
•First NDA for azenosertib in a gynecologic malignancy

Full Year 2023 Financial Results

•Cash, Cash Equivalents and Marketable Securities Position: As of December 31, 2023, Zentalis had cash, cash equivalents and marketable securities of $482.9 million. The Company believes that its existing cash, cash equivalents and marketable securities as of December 31, 2023 will be sufficient to fund its operating expenses and capital expenditure requirements into 2026. The December 31, 2023 cash, cash equivalents and marketable securities balance does not reflect the up-front payment from Immunome of $35 million in cash and Immunome stock, which was received in January 2024, as the Company’s agreement was executed and announced in January 2024.

•Research and Development Expenses: Research and development (R&D) expenses for the year ended December 31, 2023 were $189.6 million, compared to $172.7 million for the year ended December 31, 2022. The increase of $16.9 million was primarily due to a $7.5 million increase in expense relating to our cost sharing relationship with Zentera that was terminated in June 2023, a $7.4 million increase related to personnel expenses, of which $5.8 million related to non-cash stock-based compensation expense, a $2.8 million increase in facilities and overhead expenses and a $2.8 million increase in consulting expense. These increases were partially offset by decreases of $2.8 million and $0.9 million in collaborations expense and supplies/other expenses, respectively.

•General and Administrative Expenses: General and administrative expenses for the year ended December 31, 2023 were $64.4 million, compared to $54.6 million during the year ended December 31, 2022. The increase of $9.8 million was primarily attributable to a $4.9 million non-cash operating lease impairment charge, a $5.1 million increase related to personnel expenses, of which $3.7 million related to non-cash stock-based compensation expense, and $1.4 million related to outside services. This was partially offset by a $1.6 million decrease in facilities and overhead and other expense.

About Azenosertib
Azenosertib is a potentially first-in-class and best-in-class small molecule WEE1 inhibitor in development for the treatment of cancer. Inhibition of WEE1, a DNA damage response kinase, drives cancer cells into mitosis without being able to repair damaged DNA, resulting in cell death. Currently, there are no FDA-approved WEE1 inhibitors, and azenosertib has been designed for superior selectivity and pharmacokinetic properties. Azenosertib is being developed in therapeutic areas of high unmet need and is being evaluated as a monotherapy, in combination with chemotherapy, and in combination with molecularly targeted agents.

On February 27, 2024 Zai Lab Limited (NASDAQ: ZLAB; HKEX: 9688) reported financial results for full-year 2023, along with recent product highlights and corporate updates (Press release, Zai Laboratory, FEB 27, 2024, View Source [SID1234640536]).

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"We made excellent progress on several key strategic priorities in 2023, notably the launch of VYVGART in China for generalized myasthenia gravis (gMG) in September and the drug’s successful inclusion on China’s NRDL for this indication effective January 1, 2024," said Dr. Samantha Du, Founder, Chairperson, and Chief Executive Officer of Zai Lab. "The launch is off to an impressive start with more patients treated with VYVGART in January than the last four months of 2023 combined, fueled by high physician adoption and increased patient access as hospitals add VYVGART to formularies. Looking ahead, we expect strong commercial performance across our portfolio this year, and are preparing for three new potential launches in 2024. We are also excited by the progress of our late-stage pipeline and our growing global early-stage development efforts. We are on track to achieve the objectives outlined in our five-year strategic plan and to position Zai Lab as a high-growth, profitable and innovative biotech company."

"We are focused on achieving three corporate objectives," said Josh Smiley, President and Chief Operating Officer of Zai Lab. "First, we seek to accelerate top-line growth supported by multiple launches of new products and indications over the next two to three years. Second, we aim to reach corporate profitability by the end of 2025 through revenue growth and continued focus on efficiency and productivity. Third, we are committed to building a global portfolio through our internal discovery activities and strategic business development. These corporate objectives capture our vision for Zai Lab, where we lead with innovation, grow with purpose, and deliver on our mission of improving patient lives globally," Mr. Smiley concluded.
Full-Year 2023 Financial Results
•Product revenue was $266.7 million in 2023, compared to $212.7 million in 2022, representing 25% y-o-y growth and 31% y-o-y growth at CER. This increase was primarily driven by increased sales volumes, the launch of VYVGART, and decreased negative effects from the COVID-19 pandemic, partially offset by an increase in sales rebates to distributors and the effects on hospital and physician practices from the recent industry-wide anti-corruption enforcement efforts in China in the second half of 2023.
–Sales rebates to distributors resulting from price reductions in connection with NRDL listings were $13.0 million in 2023, up from $5.3 million in 2022, driven by an increased number of new and renewed NRDL listings.
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Key Highlights by Commercial Products
ZEJULA
–$168.8 million in 2023, which increased 16% y-o-y from $145.2 million in 2022.
–The increase was driven by increased hospital sales in first-line ovarian cancer and duration of treatment prolongment, partially offset by sales rebates in connection with the renewal in the NRDL.
–ZEJULA continues to be the leading PARP inhibitor in hospital sales for ovarian cancer in China, in its third year on the NRDL.
–ZEJULA’s NRDL listing was renewed for the maintenance treatment of adult patients with first-line and recurrent ovarian cancer, effective January 1, 2024.
VYVGART
–$10.0 million in 2023, compared to nil in 2022.
–We successfully launched VYVGART for the treatment of adult patients with gMG, who are anti-acetylcholine receptor (AChR) antibody positive, in September 2023.
–We estimate that nearly 1,000 patients were treated from launch through the fourth quarter of 2023.
–VYVGART was added to the NRDL for the treatment of gMG, effective January 1, 2024.
–We estimate that nearly 1,000 new patients were treated in January 2024 alone driven by positive physician and patient reception as well as increased patient access as VYVGART is added to hospital formularies.
–We are expecting more than $70.0 million in VYVGART revenue in 2024.
OPTUNE
–$47.0 million in 2023, which was relatively flat compared to $47.3 million in 2022.
–Continued growth in supplemental insurance coverage was offset by the effects of industry-wide anti-corruption efforts.
QINLOCK
–$19.2 million in 2023, which increased 29% y-o-y from $15.0 million in 2022.
–Growth was supported by its inclusion in the NRDL in the first quarter of 2023 for the fourth-line treatment of advanced gastrointestinal stromal tumors (GIST), partially offset by sales rebates in connection with the NRDL listing.
NUZYRA
–$21.7 million in 2023, which increased by 316% y-o-y from $5.2 million in 2022.
–Growth was driven by the initial inclusion of NUZYRA (IV formulation) for the treatment of adults with community-acquired bacterial pneumonia (CABP) and acute bacterial skin and skin structure infections (ABSSSI) in the NRDL in the first quarter of 2023.
–The oral formulation of NUZYRA was added to the NRDL for these indications, effective January 1, 2024, which we expect to further increase patient access.
•Research and Development (R&D) expenses were $265.9 million for 2023, compared to $286.4 million for 2022. This decrease was primarily due to decreased upfront and milestone payments for our license and collaboration agreements, partially offset by an increase in personnel compensation and related costs.
•Selling, General and Administrative expenses were $281.6 million for 2023, compared to $259.0 million for 2022. This increase was primarily due to higher general selling expenses related to commercial operations to support the launch of VYVGART, partially offset by a decrease in professional services fees.
•Net loss was $334.6 million for 2023, or a loss per ordinary share attributable to common stockholders of $0.35 (or loss per American Deposit Share ("ADS") of $3.46), compared to a net loss of $443.3 million for 2022, or a loss per ordinary share of $0.46 (or loss per ADS of $4.63). The decrease in net loss was primarily due to product revenue growing faster than net operating expenses, increased interest income, and decreased foreign currency loss.
•Cash and cash equivalents, short-term investments and restricted cash totaled $807.6 million as of December 31, 2023, compared to $1.0 billion as of December 31, 2022.
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2024 Strategic Priorities
Zai Lab will focus on the following strategic priorities in 2024 to drive innovation in China and beyond:
Commercial Execution
•Drive VYVGART ramp-up in gMG in its first year of NRDL inclusion and increase access via hospital listing
•Maintain ZEJULA leadership position in ovarian cancer in China
•Continue to grow supplemental insurance coverage for OPTUNE GIO in glioblastoma (GBM)
•Successfully launch additional products (up to 3) from our innovative pipeline
Clinical Data and Regulatory Actions
•Potential China approvals:
–Sulbactam-durlobactam in infections caused by susceptible isolates of Acinetobacter baumannii-calcoaceticus complex
–Efgartigimod SC in gMG
–Repotrectinib in ROS1-positive NSCLC
•Planned China submissions:
–Efgartigimod SC in chronic inflammatory demyelinating polyneuropathy (CIDP)
–Adagrasib in second-line+ NSCLC
–Tisotumab vedotin in second-line+ cervical cancer
–Tumor Treating Fields in second-line+ NSCLC
•Key clinical data readouts:
–Tumor Treating Fields in first-line brain metastases from NSCLC (METIS) and first-line locally advanced pancreatic cancer (PANOVA-3)
–Adagrasib in first-line NSCLC and second-line+ NSCLC
Clinical Development
•Join the global Phase 3 registrational study of efgartigimod in thyroid eye disease (TED) in Greater China1
•Join the global Phase 3 ADEPT-2 and ADEPT-3 studies of xanomeline-trospium (or KarXT) in Alzheimer’s disease psychosis (ADP) in Greater China
•Complete enrollment in the China bridging Phase 3 study of xanomeline-trospium (or KarXT) in schizophrenia
•Advance ZL-1102 (IL-17 Humabody) into global Phase 2 development in chronic plaque psoriasis (CPP)
•Enroll patients in the global Phase 1 study for ZL-1310 (DLL3 ADC) in small cell lung cancer (SCLC)
1 Mainland China, Hong Kong, Macau, and Taiwan (collectively, Greater China).
Recent Pipeline Highlights
Below are key product updates since our last earnings release:
Oncology Pipeline
•Tumor Treating Fields:
–In January 2024, Zai Lab partner Novocure announced that the U.S. Food and Drug Administration (FDA) had accepted for filing its Premarket Approval (PMA) application seeking approval for the use of Tumor Treating Fields therapy together with standard systemic therapies for the treatment of NSCLC, following progression on or after platinum-based therapy. We are preparing a similar submission for this indication, with a goal to submit a Marketing Authorization Application (MAA) to the National Medical Products Administration (NMPA) in 2024.
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•Repotrectinib (ROS1/TRK):
–In February 2024, Zai Lab partner Bristol-Myers Squibb (BMS) announced that, based on the results of the TRIDENT-1 trial, the FDA has accepted its supplemental NDA (sNDA) for repotrectinib for the treatment of adult and pediatric patients 12 years of age and older with solid tumors that have a neurotrophic tyrosine receptor kinase (NTRK) gene fusion, and are locally advanced or metastatic or where surgical resection is likely to result in severe morbidity. The application was granted priority review status, with a Prescription Drug User Fee Act (PDUFA) goal date of June 15, 2024.
–In November 2023, BMS announced that, based on results from the TRIDENT-1 trial, the FDA approved repotrectinib for the treatment of adult patients with locally advanced or metastatic ROS1-positive NSCLC. The New Drug Application (NDA) that Zai Lab submitted to the NMPA for this indication is under priority review.
•Adagrasib (KRASG12C)
–In February 2024, Zai Lab partner BMS announced that, based on the results of the KRYSTAL-1 trial, the FDA has accepted its sNDA for adagrasib in combination with cetuximab for the treatment of patients with previously treated KRASG12C-mutated locally advanced or metastatic colorectal cancer (CRC). The application was granted priority review status, with a PDUFA goal date of June 21, 2024. We are participating in the global confirmatory Phase 3 KRYSTAL-10 study in second-line KRASG12C-mutated CRC in Greater China.
•Bemarituzumab (FGFR2b):
–Zai Lab has joined the global Phase 3 FORTITUDE-102 study of bemarituzumab in combination with nivolumab and chemotherapy in first-line gastric or GEJ cancer in Greater China. We expect the first patient in Greater China to be treated in the first quarter of 2024.
•ZL-1310 (DLL3 ADC):
–Zai Lab is currently enrolling patients in the United States and China in the global Phase 1 study in relapsed and refractory second-line+ SCLC who have progressed after platinum-based treatment.
Autoimmune Disorders, Infectious Disease, and Neuroscience Pipeline
•Efgartigimod (FcRn):
–In February 2024, argenx announced that the FDA has accepted the supplemental Biologics License Application (sBLA) for efgartigimod SC for the treatment of CIDP with priority review. The application has been granted a PDUFA goal date of June 21, 2024.
–We plan to submit an sBLA to the NMPA for efgartigimod SC in CIDP in the first half of 2024.
•Xanomeline-Trospium (or KarXT) (M1/M4-agonist):
–In November 2023, Karuna announced that the FDA has accepted its NDA for xanomeline-trospium for the treatment of schizophrenia in adults. The application has been granted a PDUFA goal date of September 26, 2024. We continue to enroll patients in the registrational bridging study in mainland China, and we expect to complete the study this year.
–In November 2023, Karuna announced positive results from its Phase 1b open-label, eight-week inpatient trial evaluating the effect of xanomeline-trospium on 24-hour ambulatory blood pressure in adults with schizophrenia demonstrating that xanomeline-trospium was not associated with increases in blood pressure.
Anticipated Major Milestones in 2024
Oncology
Tumor Treating Fields
•Zai Lab to submit an MAA to the NMPA in second-line+ NSCLC, following progression on or after platinum-based therapy.
•Zai Lab partner Novocure to provide a topline data readout from the phase 3 METIS clinical trial in brain metastases from NSCLC in the first quarter of 2024. We are participating in the study in Greater China.
4

•Novocure to provide a topline data readout from the phase 3 PANOVA-3 clinical trial in locally advanced pancreatic cancer in the fourth quarter of 2024. We are participating in the study in Greater China.
Repotrectinib (ROS1/TRK)
•Potential NMPA approval of the NDA in locally advanced or metastatic ROS1-positive NSCLC.
Adagrasib (KRASG12C)
•Zai Lab to submit an NDA to the NMPA in second-line+ KRASG12C-mutated NSCLC.
•Zai Lab to join the global Phase 3 KRYSTAL-7 study in first-line KRASG12C-mutated NSCLC with Tumor Proportion Score (TPS) ≥ 50% in Greater China in the second half of 2024.
•Zai Lab partner Mirati, a BMS company, to provide a clinical data update for the global confirmatory Phase 3 KRYSTAL-12 study in second-line+ KRASG12C-mutated NSCLC. We are participating in the study in Greater China.
•Mirati to provide a clinical data update for the global Phase 2 KRYSTAL-17 study in first-line KRASG12C-mutated NSCLC with TPS < 50%.
Tisotumab Vedotin (Tissue Factor ADC)
•Zai Lab to submit an NDA to the NMPA in second-line+ cervical cancer.
Neuroscience, Autoimmune Disorders, and Infectious Diseases (NSAiID)
Efgartigimod (FcRn)
•Potential NMPA approval of the sBLA for efgartigimod SC in gMG.
•Zai Lab to submit an sBLA to the NMPA for efgartigimod SC in CIDP in the first half of 2024.
•Zai Lab partner argenx to initiate a registrational study of efgartigimod in TED. Zai Lab plans to participate in the study in Greater China in the second half of 2024.
Sulbactam-Durlobactam (SUL-DUR)
•Potential NMPA approval of the NDA in infections caused by susceptible isolates of Acinetobacter baumannii-calcoaceticus complex.
Xanomeline-Trospium (or KarXT) (M1/M4-agonist)
•Zai Lab to complete patient enrollment in the China bridging study in schizophrenia in the fourth quarter of 2024.
•Zai Lab to join the global Phase 3 ADEPT-2 and ADEPT-3 studies in ADP in Greater China in mid-year.
•Zai Lab partner Karuna to report topline data from the EMERGENT-4 and EMERGENT-5 trials evaluating the long-term safety for treatment of schizophrenia in the second half of 2024.
ZL-1102 (IL-17 Humabody)
•Zai Lab to initiate a global Phase 2 study in mild-to-moderate chronic plaque psoriasis in mid-year.
Conference Call and Webcast Information
Zai Lab will host a live conference call and webcast tomorrow, February 28, 2024, at 8:00 a.m. ET (9:00 p.m. HKT). Listeners may access the live webcast by visiting the Company’s website at View Source Participants must register in advance of the conference call.
Details are as follows:
Registration Link: https://register.vevent.com/register/BIa1fd72e50c9e4117b696c49bdfa9f83b
All participants must use the link provided above to complete the online registration process in advance of the conference call. Dial-in details will be in the confirmation email which the participant will receive upon registering.

On February 27, 2024 Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies for the treatment of cancer and other serious diseases, reported financial results for the fourth quarter and full year ended December 31, 2023 and provided a review of recent business and clinical highlights (Press release, Xencor, FEB 27, 2024, View Source [SID1234640535]). The Company also presented encouraging early clinical data from its Phase 2 study of vudalimab monotherapy for patients with clinically defined high-risk metastatic castration-resistant prostate cancer (mCRPC).

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"We begin 2024 with a focus on advancing our high-potential XmAb CD3 and CD28 T-cell engagers for the treatment of patients with solid tumors and the evaluation of our PD-1 x CTLA-4 dual checkpoint inhibitor, vudalimab, in patients with metastatic castration-resistant prostate cancer and front-line non-small cell lung cancer," said Bassil Dahiyat, Ph.D., president and chief executive officer of Xencor. "This focused pipeline is supported by our strong financial foundation. In 2023, we significantly strengthened our balance sheet with our partial royalty monetization and milestone payments and royalties from our partners, for which we received more than $325 million in proceeds.

"The growing validation of T-cell engagers in solid tumors has encouraged us to build a range of new XmAb bispecific T-cell engager candidates, and we plan to select our next candidate for clinical development this year."

Vudalimab (PD-1 x CTLA-4) Monotherapy in Patients with High-Risk mCRPC

Xencor is advancing vudalimab, a selective dual checkpoint inhibitor, in multiple clinical studies, including a Phase 2 monotherapy study (Study XmAb717-05) in patients with clinically defined high-risk metastatic castration-resistant prostate cancer (mCRPC). Early data from the study indicates that vudalimab has been generally well tolerated and associated with response to treatment in multiple patients who have visceral or lymph node metastases.

At the February 7, 2024 data cut off, 14 patients with clinically defined high-risk mCRPC had been treated with vudalimab every three weeks at a flat dose of 1000 mg, or 1200 mg for patients greater than 80 kg. Patients were a median of 72 years old and were heavily pretreated, having a median of four lines of prior therapy. 79% (11/14) of patients had metastatic disease at diagnosis; all patients had measurable disease.

The efficacy-evaluable population included 12 patients who had baseline and at least one post-baseline RECIST assessment. The objective response rate was 33% (4/12). Three patients had a confirmed partial response per RECIST 1.1 guidelines, and one additional patient had an unconfirmed partial response. An additional two patients experienced a best overall response of stable disease. Prostate-specific antigen (PSA) reductions of more than 90% from baseline (PSA90) were observed in 25% (3/12) of evaluable patients.

The safety analysis included all 14 patients. The most common immune-related adverse events of any grade were rash (29%) and alanine transaminase (ALT) increases (21%). Treatment-emergent adverse events led to treatment discontinuation for two patients (14%). One Grade 5 adverse event of autoimmune hepatitis was deemed treatment related; there have been no known additional cases of Grade 5 autoimmune hepatitis among three clinical studies with more than 240 patients treated with vudalimab.

Additional Vudalimab Clinical Studies and 2024 Priorities

Enrollment of patients with mCRPC in the study of vudalimab in combination with chemotherapy (Study XmAb717-04) is ongoing; revised chemotherapy dosing regimens are being evaluated, as previously disclosed.

In the fourth quarter of 2023, the Company dosed the first patient in a Phase 1b/2 study (Study XmAb717-06) evaluating vudalimab as a first-line treatment in patients with locally advanced or metastatic non-small cell lung cancer (NSCLC).

Xencor plans to:

Continue enrollment and provide a data update and decision whether to advance vudalimab as a monotherapy for patients with mCRPC in the first half of 2025.
Continue enrollment and provide a data update and decision whether to advance vudalimab in combination with chemotherapy for patients with mCRPC in the first half of 2025.
Continue to enroll the Phase 1b part of a study of vudalimab in front-line metastatic NSCLC.
Additional Program Highlights and 2024 Priorities

XmAb819 (ENPP3 x CD3): XmAb819 is a bispecific antibody in Phase 1 clinical development for patients with advanced clear-cell renal cell carcinoma (ccRCC). XmAb819 is designed to engage the immune system, activating T cells for highly potent and targeted killing of tumor cells expressing ENPP3, an antigen highly expressed on kidney cancers. Xencor’s XmAb 2+1 multivalent format used in XmAb819 enables greater selectivity of ENPP3-expressing tumor cells compared to normal cells, which express lower levels of ENPP3. During 2024, Xencor plans to advance the ongoing Phase 1 dose-escalation study toward target dose levels.

XmAb808 (B7-H3 x CD28): XmAb808 is a tumor-selective, co-stimulatory CD28 bispecific antibody in Phase 1 clinical development. XmAb808 binds to the broadly expressed tumor antigen B7-H3 and is constructed with the XmAb 2+1 format. Co-stimulation is required for T cells to achieve full activation, and targeted CD28 bispecific antibodies may provide conditional co-stimulation of T cells when the antibodies are bound to tumor cells. During 2024, Xencor plans to advance the ongoing Phase 1 dose-escalation study toward target dose levels.

XmAb541 (CLDN6 x CD3): XmAb541 is a bispecific antibody being developed for patients with advanced ovarian cancer and other solid tumor types. XmAb541 is designed to engage the immune system, activating T cells for highly potent and targeted killing of tumor cells expressing Claudin-6 (CLDN6), a tumor-associated antigen. Xencor’s XmAb 2+1 multivalent format used in XmAb541 enables greater selectivity for cells expressing CLDN6 over similarly structured Claudin family members, which may be expressed on normal tissue. During the first half of 2024, Xencor plans to dose the first patient in a Phase 1 dose-escalation study.

Engineered Cytokines: Xencor has been conducting Phase 1 studies evaluating engineered cytokines XmAb564 (IL2-Fc in autoimmune disease) and XmAb662 (IL12-Fc in solid tumors). In the first half of 2024, Xencor plans to conclude studies of XmAb564 and XmAb662, complete internal data packages, and pause further development of both programs until after assessments of future data from competitor programs in this class and safety and biomarker data from Xencor’s studies.
Recent Partnership Developments

Janssen Biotech, Inc., a Johnson & Johnson Company: JNJ-9401 (PSMA x CD28) and JNJ-1493 (CD20 x CD28) are clinical-stage XmAb bispecific antibodies that J&J is developing for patients with prostate cancer and B-cell malignancies, respectively. Both programs entered Phase 1 clinical development during the fourth quarter of 2023, and Xencor received $20 million in development milestones. J&J also selected two B-cell targeting CD28 bispecific antibody candidates for further development, and Xencor received an additional $7.5 million in research milestones. In the fourth quarter of 2023, Xencor completed enrollment in subcutaneous dose-escalation cohorts of a Phase 1 study evaluating plamotamab.
Corporate Update: In January 2024, Xencor reduced its workforce to align resources with the company’s clinical development focus on high potential T cell engaging bispecific antibodies and a more narrowly defined clinical program to evaluate vudalimab. The workforce reductions affected approximately 10% of positions at the Company.

Financial Guidance: Based on current operating plans, Xencor expects to end 2024 with between $475 million and $525 million in cash, cash equivalents and marketable debt securities, and to have cash to fund research and development programs and operations into 2027.

Financial Results for the Fourth Quarter and Full Year Ended December 31, 2023

Cash, cash equivalents, and marketable debt securities totaled $697.4 million as of December 31, 2023, compared to $584.5 million on December 31, 2022.

Total revenue for the fourth quarter ended December 31, 2023 was $44.7 million compared to $21.6 million for the same period in 2022. Revenues earned in the fourth quarter of 2023 were primarily from the research and milestone revenue from the two J&J collaboration agreements, and royalty revenue from Alexion and MorphoSys, compared to the same period in 2022, which were primarily royalty revenue from the Alexion and Vir agreements and research collaboration revenue from the second J&J collaboration. Revenues for the full year 2023 were $168.3 million compared to $164.6 million for the same period in 2022. Revenues for the full year 2023 were primarily milestone revenue from Alexion, Gilead, J&J, Omeros and Zenas and collaboration revenue from the second J&J collaboration, compared to the same period in 2022, which were earned primarily royalties from Alexion, MorphoSys and Vir, milestone revenue from Astellas and collaboration revenue from the second J&J collaboration.

Research and development (R&D) expenses for the fourth quarter ended December 31, 2023 were $63.0 million compared to the same period in 2022 which were $51.5 million. R&D expenses for the year ended December 31, 2023 were $253.6 million compared to $199.6 million for the same period in 2022. Increased R&D spending for fourth quarter and full year 2023, compared to amounts for the same periods in 2022, reflects additional spending on XmAb bispecific antibody programs including XmAb541, vudalimab and early-stage research programs.

General and administrative (G&A) expenses for the fourth quarter ended December 31, 2023 were $15.3 million compared to $12.8 million for the same period in 2022. G&A expenses for the full year ended December 31, 2023 were $53.4 million compared to $47.5 million for the same period in 2022. Increased G&A spending for the fourth quarter and full year 2023, compared to amounts for the same periods in 2022, reflects additional compensation costs on general and administrative staffing and spending on professional fees.

Other income for the fourth quarter ended December 31, 2023 was $20.2 million compared to $30.1 million in the same period in 2022. Other income for both periods represents unrealized gain from the change in fair value of equity securities and interest income earned on investments. Other income for the full year ended December 31, 2023 was $18.2 million, compared to $28.0 million in the same period in 2022, which reflects a net decrease in unrealized gain from equity securities, partially offset by an increase in interest income in 2023.

Non-cash, stock-based compensation expense for the full year ended December 31, 2023 was $53.8 million compared to $48.9 million for the same period in 2022.

Net loss for the fourth quarter ended December 31, 2023 was $19.1 million or $(0.31) on a fully diluted per share basis, compared to net loss of $12.0 million or $(0.20) on a fully diluted per share basis, for the same period in 2022. For the full year ended December 31, 2023 net loss was $126.1 million or $(2.08) on a fully diluted per share basis, compared to net loss of $55.2 million or $(0.93) on a fully diluted per share basis, for the same period in 2022. Greater net loss reported for the fourth quarter ended December 31, 2023, compared to the same period in 2022, is primarily due to increased R&D spending. Greater net loss for the full year 2023, compared to the same period in 2022, is primarily due to increased R&D spending, a decrease in other income and an increase in tax expense in 2023.

The total shares outstanding were 60,998,191 as of December 31, 2023, compared to 59,997,713 as of December 31, 2022.

Conference Call and Webcast

Xencor will host a conference call and webcast today at 4:30 p.m. ET (1:30 p.m. PT) to discuss the financial results, provide a corporate update and review the clinical update of vudalimab monotherapy in mCRPC.

The live webcast may be accessed through "Events & Presentations" in the Investors section of the Company’s website, located at investors.xencor.com. Telephone participants may register to receive a dial-in number and unique passcode that can be used to access the call. A recording will be available for at least 30 days.