On March 16, 2020 Leap Therapeutics, Inc. (Nasdaq:LPTX), a biotechnology company focused on developing targeted and immuno-oncology therapeutics, reported financial results for the fourth quarter and year ended December 31, 2019 (Press release, Leap Therapeutics, MAR 16, 2020, View Source [SID1234555606]).
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Leap Highlights:
·Entered into an exclusive option and licence agreement with BeiGene, Ltd. for the clinical development and commercialization of DKN-01, Leap’s anti-Dickkopf-1 (DKK1) antibody, in Asia (excluding Japan), Australia, and New Zealand
·Completed a $27 million equity financing with BeiGene, Perceptive Advisors, and a lead institutional investor
·Presented final data from its Phase 1/2 clinical trial of DKN-01 plus Keytruda (pembrolizumab) in patients with advanced or recurrent esophagogastric cancer at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2020 Gastrointestinal Cancers Symposium
·Presented updated data from its Phase 2 clinical trial of DKN-01 as monotherapy and in combination with paclitaxel chemotherapy in patients with advanced gynecological malignancies at the 2019 International Gynecologic Cancer Society Annual Global Meeting and at the Society of Gynecologic Oncology 50th Annual Meeting on Women’s Cancer
·Announced investigator-initiated study of DKN-01 in patients with DKK1+ advanced prostate cancer
·Announced investigator-initiated study of DKN-01 plus Opdivo (nivolumab) in patients with advanced biliary tract cancer that is partially supported by Bristol-Myers Squibb
·Announced investigator-initiated study of DKN-01 plus Tecentriq (atezolizumab) in patients with advanced esophagogastric cancer that is funded by Roche
"We ended 2019 having made significant progress in the clinical development of DKN-01 as both a monotherapy and in combination with other therapies as a treatment for cancer. We’ve generated an abundance of data that continues to demonstrate DKN-01’s activity against multiple difficult-to-treat tumor types," said Christopher K. Mirabelli, Ph.D., President and Chief Executive Officer of Leap. "We’ve carried this momentum into the new year, having achieved our top corporate goal of securing a strategic partner for development of DKN-01 in the Asia-Pacific region. We look forward to working with BeiGene to bring DKN-01 to patients in this geographic area where the incidence of esophagogastric cancer is highly prevalent and to develop DKN-01 in combination with tizlelizumab, their anti-PD-1 antibody."
Business Update
·Leap and BeiGene Sign Exclusive Option and License Agreement for DKN-01 – Leap and BeiGene announced an exclusive option and license agreement for the clinical development and commercialization of DKN-01. Under the terms of the agreement, Leap will receive an upfront cash payment of $3 million from BeiGene in exchange for granting BeiGene an option to an exclusive license to develop and commercialize DKN-01 in Asia (excluding Japan), Australia, and New Zealand, and will be eligible to receive an additional payment from BeiGene upon BeiGene’s exercise of the option following initial proof-of-concept studies. Leap will retain exclusive rights for the development, manufacturing, and commercialization of DKN-01 for the rest of the world. Additionally, Leap is eligible to receive payments from BeiGene based upon the achievement of certain development, regulatory, and sales milestones for a total deal value of up to $132 million, together with tiered royalties on any product sales of DKN-01 in the licensed territory.
·Leap Completes $27 Million Equity Financing with BeiGene, Perceptive Advisors and another institutional investor – In connection with the licensing agreement with BeiGene, Leap has also entered into a securities purchase agreement to issue and sell in a private placement 1,421,801 shares of Series A mandatorily convertible preferred stock to a lead institutional investor and 1,137,442 shares of Series B mandatorily convertible preferred stock to BeiGene and Perceptive Advisors. On March 5, 2020, the Leap stockholders approved the conversion of the Series A preferred stock into a pre-funded warrant to purchase 14,413,902 shares of common stock and the conversion of the Series B preferred stock into 11,531,133 shares of common stock. Each investor also received a warrant to purchase an equal number of shares at an exercise price of $2.11 per share.
DKN-01 Clinical Update
DKN-01 is a humanized monoclonal antibody targeting the DKK1 protein, a Wnt pathway modulator. DKN-01, as a single agent, has achieved partial responses in three different cancer indications. In combination with immune checkpoint inhibitors and with chemotherapy, DKN-01 has achieved overall response rates and survival data that is greater than the historical benchmarks, particularly in biomarker targeted patient populations.
·ESOPHAGOGASTRIC CANCER (EGC): Leap completed a multi-part Phase 1/2 clinical study of DKN-01 as a monotherapy and in combination with paclitaxel or KEYTRUDA (pembrolizumab) in advanced EGC. Two DKN-01 monotherapy patients experienced partial responses (PRs) by central imaging assessment, one of whom had previously been treated with prior immunotherapies, including an anti-PD-L1 antibody, was on therapy for one year. Six additional monotherapy patients were determined to have had a best response of stable disease (SD). The combination of DKN-01 and pembrolizumab in gastroesophageal junction cancer (GEJ) and gastric cancer (GC) patients demonstrated improved outcomes in DKK1-high patients and who had not previously been treated with PD-1/PD-L1 therapy. DKK1-high patients experienced over 22 weeks median progression-free survival (PFS) and nearly 32 weeks overall survival (OS), with a 50% overall response rate (ORR) and 80% disease control rate (DCR) in ten evaluable patients. DKK1-low patients experienced nearly 6 weeks median PFS and over 17 weeks OS, with a 20% DCR in 15 evaluable patients.
As part of the collaboration with BeiGene, Leap plans to study the combination of DKN-01 and BeiGene’s anti-PD-1 antibody, tislelizumab and will evaluate approximately 40 DKK1-high patients with second-line GC or GEJ. In addition, Leap plans to evaluate the combination of DKN-01 with tislelizumab and chemotherapy in approximately 20 patients with first-line GC/GEJ. These clinical trials are expected to initiate in the first half of 2020.
·GYNECOLOGICAL CANCERS: The ongoing Phase 2 clinical study of DKN-01 as a monotherapy and in combination with paclitaxel in patients with advanced gynecological cancers has recently completed patient enrollment. As of September 2019, twenty-two patients who had previously received one to ten lines of therapy have been enrolled to receive DKN-01 monotherapy. In the cohort of sixteen monotherapy patients with epithelial endometrial cancer with identified Wnt signaling mutations, one patient had a complete response and one patient had a partial response, seven patients had a best response of SD, and seven patients had progressive disease. Patient follow-up is continuing in this study, which has been expanded to include focused cohorts of patients with carcinosarcoma.
In light of the global emergency of the new coronavirus, COVID-19, the Society of Gynecologic Oncology will not conduct its 2020 Annual Meeting on Women’s Cancer, previously scheduled for March 28-31, 2020, in Toronto, Canada. Leap is currently awaiting additional information about the oral presentation that was to be made at the conference and evaluating other data presentation opportunities for the study in gynecologic cancers.
Selected Year-End and Fourth Quarter 2019 Financial Results
Net loss was $32.9 million for the year ended December 31, 2019, compared to $23.1 million for the year ended December 31, 2018. This increase was primarily due to increased research and development expenses and a change in warrant liability accounting.
Research and development expenses were $24.4 million for the full year 2019, compared to $21.8 million for the same period in 2018. This increase was primarily due to increased full-year clinical trial costs due to increased patient enrollment, payroll and stock-based compensation expense, offset by reduced manufacturing expenses of our clinical product candidates and consulting expenses. Research and development expenses were $5.7 million for the fourth quarter of 2019, compared to $6.9 million for the same period in 2018. This decrease was primarily due to reduced clinical trial costs in the fourth quarter of 2019 resulting from the maturing of our clinical trials and from lower manufacturing and consulting expenses.
General and administrative expenses were $9.1 million for the full year 2019, compared to $8.9 million for the same period in 2018. General and administrative expenses were $2.6 million for the fourth quarter of 2019, compared to $2.1 million for the same period in 2018. These increases were due to increases in performance-based and stock-based compensation expense.
Cash, cash equivalents and marketable securities totaled $3.9 million at December 31, 2019. Research and development incentive receivables totaled $0.2 million. Subsequent to the financial year end, Leap completed a $27.0 million private placement and received $3.0 million from the agreement with BeiGene.