On April 29, 2020 InflaRx (Nasdaq: IFRX), a clinical-stage biopharmaceutical company developing anti-inflammatory therapeutics by targeting the complement system, reported financial results for the year ending December 31, 2019 (Press release, InflaRx, APR 29, 2020, View Source [SID1234556764]).

"The Company underwent significant changes in 2019 and has selected a compelling set of high unmet medical need indications for its lead drug candidate IFX-1," said Prof. Niels C. Riedemann, Chief Executive Officer and Founder of InflaRx. "The Company has also provided new evidence supporting the activity of IFX-1 in neutrophil-driven skin diseases, which continue to be a clear focus. With our current cash position and future value inflection points, we believe InflaRx is well positioned to weather the current global environment."

Prof. Riedemann continued, "With the recently initiated trial in severe progressed COVID-19 pneumonia, our Company is making a strong contribution to help identify potential treatment options for patients during this global pandemic, which is based on several years of in-house research on the role of C5a-driven lung injury and viral pneumonia."

Corporate and R&D highlights – 2019 through early 2020

Corporate

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Entered into a clinical collaboration agreement with Merck & Co, Inc., Kenilworth, NJ, USA (known as MSD outside the US and Canada) to evaluate the combination of IFX-1 and Merck’s anti-PD-1 therapy, KEYTRUDA (pembrolizumab) in patients with an undisclosed tumor type. Under the terms of the agreement, InflaRx will conduct a Phase IIa clinical study with two IFX-1 arms, including one with KEYTRUDA. KEYTRUDA is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Kenilworth, NJ, USA.

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Hired senior executives for key positions – Jordan Zwick (formerly of Bausch Health) as Global Head of Business Development and Corporate Strategy and Dr. Korinna Pilz as Global Head of Clinical Research and Development (>20 years of clinical development experience in different pharmaceutical companies, including Roche, Bayer, Boehringer Ingelheim and others).

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Expanding research and development activities supported by growth in number of employees to 45 as of December 31, 2019 (up from 38 in 2018).

Lead product candidate, IFX-1, first-in-class anti-human complement factor C5a antibody

Hidradenitis Suppurativa (HS)

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On June 5, 2019, the Company announced top-line results of the international SHINE Phase IIb study, investigating the safety and efficacy of IFX-1 in patients suffering from moderate to severe Hidradenitis Suppurativa (HS). The randomized, double-blind, placebo-controlled, multicenter study enrolled a total of 179 patients in four active dose arms and a placebo arm at over 40 sites in 9 countries in North America and Europe. The primary endpoint of the trial was not met, which was a dose response signal, assessed by HiSCR1 at week 16. The primary statistical analysis by multiple-comparison procedure modelling (MCP-mod) showed no significant dose response, but the IFX-1 treatment was well tolerated.

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On July 18, 2019 the Company published a post-hoc analysis demonstrating additional signals of efficacy for the IFX-1 high dose group compared to the placebo group within the initial phase of the SHINE study, including reductions in all combined inflammatory lesions, on draining fistula and on the International Hidradenitis Suppurativa Severity Score 4 (IHS4), which scores all inflammatory lesions. IHS4 was developed by an international expert group to score severity and track treatment response, although the score has not been utilized as a primary endpoint in late stage clinical studies in HS. The IHS4 weighs the most fluctuating lesions: inflammatory nodules (1 point), less than abscesses (2 points) or draining fistulas (4 points).

1 HiSCR response defined as: At least a 50% reduction in total AN count (abscesses & inflammatory nodules) with no increase in the number of abscesses from baseline and no increase in the number of draining fistulas from baseline

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On November 6, 2019, the Company reported positive results from the open label extension (OLE) part of the international SHINE Phase IIb study. The data were from a snapshot analysis at the end of the overall 9-month study treatment period (week 40). A total of 156 patients entered the 6-month OLE period upon completion of the 16-week initial phase of the SHINE study. Overall, patients completing the OLE period showed a sustained improvement in inflammatory lesion count at week 40 compared to baseline counts of the OLE treatment group on day 1 of the SHINE study.

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In Q1 2020, the Company requested an FDA End of Phase II meeting to discuss the path forward for a pivotal program with IFX-1 in HS. The meeting has been scheduled for mid-year.

ANCA-associated vasculitis (AAV)

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Since October 2018, 19 patients have been recruited in the randomized, triple-blind, placebo-controlled US Phase II IXPLORE study with IFX-1 in patients with AAV. The main objective of the study is to evaluate the efficacy and safety of two dose regimens of IFX-1 in patients with moderate to severe AAV when dosed on top of standard of care, which includes treatment with high dose glucocorticoids. The trial originally planned to enroll approximately 36 patients at centers in the US. Based on a blinded interim analysis and assessment of the potential impact of the COVID-19 pandemic, the Company has decided to stop the study and read out the existing results earlier than initially planned as part of a strategy to align and streamline the US and EU AAV development program.

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In May 2019, the Company initiated a randomized, double-blind, placebo-controlled European Phase II IXCHANGE study with IFX-1 in patients with AAV. The main objective of the study is to evaluate the efficacy and safety of IFX-1 in patients with moderate to severe AAV. The primary endpoint of the study is a 50% reduction in Birmingham Vasculitis Activity Score (BVAS) at week 16. The study was originally planned to enroll approximately 80 patients at about 60 sites in up to 12 European countries and Russia. The study is being conducted in two parts. In Part 1, patients are being randomized to receive either IFX-1 plus a reduced dose of glucocorticoids or placebo plus a standard dose of glucocorticoids. Patients in both arms receive the standard of care dosing of immunosuppressive therapy (rituximab or cyclophosphamide). In Part 2 of the study, patients will be randomized to receive either IFX-1 plus placebo glucocorticoids or placebo plus a standard dose of glucocorticoids (both on top of standard of care immunosuppressive therapy with rituximab or cyclophosphamide). The first part of the study has been fully enrolled. After analyzing the impact of COVID-19 on the study, a blinded interim analysis of Part 1 has been completed. Based on the analysis, the Company intends to continue with Part 2 of the study but decrease the number of enrolled patients.

Pyoderma Gangraenosum (PG)

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In February 2019, the Company received approval from Health Canada to initiate an open label Phase IIa exploratory study with a plan to enroll 18 patients with moderate to severe PG. The objectives of this study are to evaluate the safety and efficacy of IFX-1 in this patient population.

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In February 2020, the Company announced positive initial data from the first 5 patients dosed in this Phase IIa open label study. Of these 5 initial patients dosed with IFX-1, 2 patients achieved complete closure of the target ulcer and complete healing of all other PG ulcers. The drug was well tolerated and no drug-related severe adverse events (SAEs) have been recorded to date in the study. The study continues to enroll patients with the addition of two higher dose cohorts.

COVID-19 Pneumonia

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In March 2020, the Company initiated a Phase II clinical development program with IFX-1 in COVID-19 patients with severely progressed pneumonia and enrolled the first patient at the Amsterdam University Medical Centers in the Netherlands. Additional centers have since been opened in the Netherlands. In the study, patients are being randomized to two treatment arms – either Arm A, best supportive care and IFX-1, or Arm B, best supportive care alone. The primary endpoint is the relative percentage change from baseline to day 5 in the Oxygenation Index (PaO2 / FiO2). After all patients have been treated in the first part of the trial, an interim analysis will be performed to assess the clinical benefit of the treatment using the assessed clinical parameters in order to potentially adapt the confirmatory second part of the study. Part 1 is fully enrolled with 30 patients as of April 24, 2020.

2019 financial highlights

Research and development expenses increased by €19.6 million to €44.6 million in 2019, from €25.0 million in 2018. This increase was primarily attributable to a €20.9 million increase in clinical research and manufacturing organizations (CRO and CMO) costs related to IFX-1 in connection with the Phase IIb clinical trial in patients with HS, the Phase II clinical program in patients with AAV, the Phase II clinical program in patients with PG, the preparation of a Phase II clinical program in oncology as well as with the ongoing manufacturing activities for clinical trial-related material. In addition, there was a €1.8 million decrease in employee-related costs mainly due to a €2.6 million anticipated decrease in expenses related to non-cash share-based compensation.

General and administrative expenses decreased by €0.3 million to €12.5 million in 2019, from €12.8 million in 2018. This decrease was primarily attributable to a €1.6 million decrease in employee-related costs associated with a €2.6 million anticipated decrease in non-cash share-based compensation, partially offset by €1.0 million higher personnel expense due to new hires. Legal, consulting and audit fees and other expenses increased by €0.2 million to €2.2 million in 2019, from €2.0 million in 2018, the increase being mainly attributable to higher consulting costs. The increase in other expenses of €1.1 million is primarily related to higher D&O insurance costs, IT and office expenses.

Net financial result decreased by €4.2 million to €3.5 million in 2019, from €7.7 million in 2018. This change was mainly attributable to lower foreign exchange gains, which decreased by €4.8 million, partially offset by interest on marketable securities, which increased by €0.6 million.

Net loss for the year 2019 was €53.3 million or €2.05 per common share, compared to €29.8 million or €1.19 per common share for the year 2018. On December 31, 2019, the Company’s total funds available were €115.8 million, mostly composed of cash and cash equivalents (€33.1 million) and marketable securities (€81.9 million).

Net cash used in operating activities increased to €43.2 million in 2019, from €21.5 million in 2018, mainly due to the increase in research and development expenditures and higher personnel costs, excluding stock-based compensation.

Additional information regarding these results is included in the notes to the consolidated financial statements as of December 31, 2019 and "ITEM 18. Financial statements," which will be included in InflaRx’s Annual Report on Form 20-F as filed with the U.S. Securities and Exchange Commission on April 29, 2020.

About IFX-1:

IFX-1 is a first-in-class monoclonal anti-human complement factor C5a antibody, which highly and effectively blocks the biological activity of C5a and demonstrates high selectivity towards its target in human blood. Thus, IFX-1 leaves the formation of the membrane attack complex (C5b-9) intact as an important defense mechanism, which is not the case for molecules blocking the cleavage of C5. IFX-1 has been demonstrated to control the inflammatory response driven tissue and organ damage by specifically blocking C5a as a key "amplifier" of this response in pre-clinical studies. IFX-1 is believed to be the first monoclonal anti-C5a antibody introduced into clinical development. Approximately 300 people have been treated with IFX-1 in clinical trials, and the antibody has been shown to be well tolerated. IFX-1 is currently being developed for various indications, including Hidradenitis Suppurativa, ANCA-associated vasculitis, Pyoderma Gangraenosum and COVID-19 pneumonia.