On March 24, 2020 Sun BioPharma, Inc. (OTCQB: SNBP), a clinical stage biopharmaceutical company developing disruptive therapeutics for the treatment of pancreatic cancer, reported financial results for the year ended December 31, 2019 (Press release, Sun BioPharma, MAR 24, 2020, View Source [SID1234555789]). Sun BioPharma is developing SBP-101, a proprietary polyamine analogue designed to induce polyamine metabolic inhibition (PMI), a metabolic pathway of critical importance to cell function in multiple tumor types, including pancreatic cancer.

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"I am delighted with the progress we have made in advancing the development of SBP-101 for patients with metastatic pancreatic cancer. In the past 12 months, we have completed enrollment in the four dose escalation cohorts of our current trial, presented interim data ASCO (Free ASCO Whitepaper) GI Cancer Symposium, initiated two new clinical sites in the United States, and opened an expansion cohort to patient enrollment at what we believe to be the optimal dose and schedule," said Michael T. Cullen, MD, MBA, Chairman and CEO of Sun BioPharma. "We look forward to completing the design of a randomized phase 2 study."

Significant Progress Made in Advancing SBP-101 Clinical Development
In early 2020, enrollment was completed in the fourth cohort of the ongoing Phase 1a/1b study of SBP-101 in patients with metastatic pancreatic ductal adenocarcinoma (PDA). Based upon the study data generated to date, an expansion cohort in patients with PDA was initiated in February of 2020. This expansion phase will enroll up to 36 additional patients at the recommended dose and schedule. A total of six clinical sites are now participating in the SBP-101 clinical program.

Interim Phase 1 Results Presented in Poster Session at ASCO (Free ASCO Whitepaper) GI Cancers Symposium Interim Phase 1 clinical data for SBP-101 was presented in a poster session at the American Society for Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2020 Gastrointestinal Cancers Symposium on January 24, 2020. The adverse event profile of SBP-101 below the maximal tolerated dose was manageable, and SBP-101 was well tolerated in combination with gemcitabine and nab-paclitaxel. The addition of SBP-101 to the combination of gemcitabine plus nab-paclitaxel did not increase the frequency of moderate or severe hematologic adverse events, peripheral neuropathy, nausea or diarrhea when compared to historical control data for patients who were treated with gemcitabine plus nab-paclitaxel. The most common adverse events attributed to treatment with SBP-101 were fatigue, elevated hepatic enzymes, and injection site pain.

Available study results in 13 evaluable subjects enrolled in the two highest dose cohorts (n=16) demonstrated an overall response rate (ORR) of 62% by RECIST criteria. The disease control rate (DCR) was 85% by RECIST criteria. Eleven subjects in those cohorts (69%, n=16) saw a maximum decrease in CA 19-9 of more than 60%.

Financial Results for the Three Months and Full Year Ended December 31, 2019

General and administrative (G&A) expenses were flat at $468,000 in the fourth quarter of 2019, compared with $467,000 in the fourth quarter of 2018. G&A expenses for the full year decreased 6.4% to $2.0 million in 2019, down from $2.1 million in 2018. The decrease for the full year of 2019 is primarily due to fewer staff members versus the 2018 staff level.

Research and development (R&D) expenses increased 74.9% to $787,000 in the fourth quarter of 2019 up from $450,000 in the fourth quarter of 2018. R&D expenses for the full year of 2019 increased 31.7% to $2.3 million as compared with $1.8 million for 2018. The increase in the fourth quarter resulted from the cost to begin production of drug substance for future phase 2 clinical trials. The full-year increase in R&D expenses resulted from an increase in spending on the Company’s clinical trial during 2019 and the manufacturing of drug substance initiated during the fourth quarter of 2019.

Other income, net, was $196,000 in the current quarter compared to other expense, net, of $64,000 in the fourth quarter of 2018. Other expense, net, was flat at $2.3 million for both 2019 and 2018. The amounts reflected in the fourth quarter of each year are primarily a foreign currency translation adjustment on the intercompany balance with our Australian subsidiary. For both 2018 and 2019 the full year expense is primarily the amortization of debt discount, which is recorded as interest expense.

Net loss for the quarters ended December 31, 2019 and 2018 was $1.0 million and $0.9 million, or $0.15 and $0.18 per diluted share, respectively. The net loss for the full year 2019 was $6.2 million, or $1.09 per diluted share, compared to a net loss of $5.9 million, or $1.27 per diluted share, for 2018.

Balance Sheet and Cash Flow

Total cash resources were $2.4 million as of December 31, 2019, compared to $1.4 million as of December 31, 2018. Total current assets were $3.1 million and $1.8 million as of December 31, 2019, and December 31, 2018, respectively. These increases resulted primarily from the proceeds raised from the sale of convertible promissory notes in January 2019 of $0.8 million and the sale of equity securities in the second half of 2019 totaling $3.2 million, partially offset by the Company’s use of cash to fund operations during 2019.

Current liabilities increased to $1.8 million as of December 31, 2019, compared to $1.6 million as of December 31, 2018. The increase in current liabilities is reflective of an increase in vendor payables associated with increased clinical and manufacturing activity in 2019.

Net cash used in operating activities was $2.7 million for the year ended December 31, 2019, compared to $2.4 million for the year ended December 31, 2018. The net cash used in each of these periods primarily reflected the net loss for these periods and was partially offset by stockbased compensation expense and amortization of debt discount as well as by the effects of changes in operating assets and liabilities.