On September 1, 2020 Akari Therapeutics, Plc (Nasdaq: AKTX), a late-stage biopharmaceutical company focused on innovative therapeutics to treat orphan autoimmune and inflammatory diseases where complement (C5) and/or leukotriene (LTB4) systems are implicated, reported financial results for the second quarter ended June 30, 2020, as well as recent clinical progress (Press release, Akari Therapeutics, SEP 1, 2020, View Source [SID1234564221]).
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"Akari continues to make good clinical progress, and since the beginning of the year has successfully completed its Phase II BP program and now has a clear pathway towards U.S. regulatory approval from the FDA. The HSCT-TMA program is set to commence recruitment in the fourth quarter of 2020 and we have initiated a COVID-19 pneumonia clinical program across multiple countries that leverages the unique dual C5 and LTB4 inhibition of nomacopan," said Clive Richardson, Chief Executive Officer of Akari Therapeutics.
Second Quarter 2020 and Recent Clinical Highlights
Akari’s lead programs are in BP, HSCT-TMA, COVID-19 pneumonia and AKC. These diseases have no approved treatments.
Patients with COVID-19 pneumonia
Clinical studies both underway and planned for patients with COVID-19 pneumonia in the U.S., U.K., and Brazil. In the U.S., a proposed multi-center randomized clinical program is in regulatory submission following the current treatment of patients via expanded access programs. In Brazil, patient recruitment has been completed for a proof of principle clinical study; potential progression into a follow-on randomized study is expected in early fourth quarter 2020. In the UK, nomacopan has been selected by the AGILE COVID-19 clinical trial initiative, and in addition data from approximately 50 COVID-19 pneumonia patients are expected in early fourth quarter 2020 from an observational study focused on identifying potential therapeutic biomarkers for optimizing use of nomacopan.
Nomacopan has been shown in clinical trials to inhibit both complement C5 activation and leukotriene B4 (LTB4), and has significant potential to simultaneously inhibit both microthrombi as well as block multiple cytokines (the cytokine storm) which together drive COVID-19 pneumonia and associated organ damage.
Phase II clinical trial in patients with BP
In August 2020, Akari announced a successful end-of-Phase II meeting with the U.S Food and Drug Administration (FDA) regarding its proposed pivotal Phase III program for the treatment of BP, which is now expected to start in the first half of 2021. The FDA has agreed to a two-part pivotal trial with Part A and Part B having the same structure, duration, endpoints and target population of moderate and severe BP patients. This follows positive topline results from Akari’s fully recruited Phase II study of nomacopan in BP patients previously announced in May 2020. The study achieved no reported drug-related serious adverse events. Seven of the nine treated patients showing a rapid and clinically significant reduction in Bullous Pemphigoid Disease Area Index (BPDAI) score, which measures the body surface area affected by blisters. Of the seven responders, three showed an 80%+ reduction in BPDAI score and three an approximately 40% reduction in BPDAI score within six weeks of starting nomacopan.
The European Medicines Agency (EMA) and the FDA have granted orphan drug designation for nomacopan for the treatment of BP.
Phase III clinical trial in pediatric patients with HSCT-TMA
During the first quarter of 2020, Akari initiated a pivotal Phase III trial for HSCT-TMA with nomacopan following the opening of an Investigational New Drug (IND) application by the FDA. As a result of the COVID-19 pandemic, site initiations were delayed and Akari expects enrollment to now commence in the fourth quarter of 2020. Akari has both FDA fast track for pediatric HSCT-TMA patients and orphan drug designation status for this program.
Phase I/II clinical trial in patients with AKC
As previously disclosed, enrollment into Part B of this study was paused due to the COVID-19 crisis. The study has now been unblinded to help evaluate next steps. Of the 12 patients recruited, a complete data set was available on 10 patients – two from Part A and eight from Part B. In Part B, of the eight patients recruited, six were placebo (four AKC patients and two other surface of the eye diagnosis) and two were treated with nomacopan (two AKC patients).
As a first-in-eye Phase I/II study, the primary endpoint measure was safety. Aggregating data from the eight AKC patients from Part A and Part B shows no ocular treatment emergent serious adverse events during the eight-week treatment period. Nomacopan is delivered topically without preservatives and is pH neutral. A comfort score measured after each eye drop installation showed the drug was comfortable and well tolerated. In all four efficacy categories (signs, symptoms, visual acuity and tear film break up) the four nomacopan treated AKC patients achieved a higher improved mean score than the four placebo AKC patients, however, the patient numbers are too small to show statistical significance on efficacy measures between the two treatment groups.
The interim data are encouraging and show that nomacopan eyedrops are safe and comfortable. Subject to operational constraints created by COVID-19, Akari aims to collect additional patient data with topical nomacopan. Akari recently received FDA approval for an IND for treatment with topical nomacopan which opens up the potential to broaden our topical ophthalmological program.
Second Quarter 2020 Financial Results
As of June 30, 2020, the Company had cash of approximately $12.7 million, compared to cash of $5.7 million as of December 31, 2019. Subsequent to the end of the second quarter of 2020, the Company received an additional $3.4 million in research & development tax credits.
On June 30, 2020, the Company entered into a securities purchase agreement with Aspire Capital Fund, LLC (Aspire Capital) which provides that Aspire Capital is committed to purchase up to an aggregate of $30.0 million of the Company’s ADSs, with each ADS representing one hundred ordinary shares, during a 30-month term of the purchase agreement. As of June 30, 2020, $30.4 million remains available under the facility together with a facility entered into with Aspire in 2018.
Research and development (R&D) expenses in the second quarter of 2020 were approximately $3.0 million, as compared to approximately $3.6 million in the same quarter the prior year. This decrease was primarily due to lower drug manufacturing costs and reductions of discretionary clinical expenses due to the COVID-19 outbreak delaying certain ongoing trials.
General and administrative (G&A) expenses in the second quarter of 2020 were approximately $2.9 million, as compared to approximately $2.4 million in the same quarter last year. This increase was primarily due to a one-time non-cash financing expense of $900,000 related to the 2020 purchase agreement with Aspire Capital. Higher expenses for insurance were partially offset by lower expenses for stock-based compensation, office rent and legal fees.
Total other expense for the second quarter of 2020 was approximately $2.4 million, as compared to total other income of $1.9 million in the same period the prior year. This change of $4.3 million was primarily due to approximately $4.3 million of loss related to the change in the fair value of the options and warrants liabilities in the second quarter of 2020 compared to the same period in 2019.
Net loss for the second quarter of 2020 was approximately $8.3 million, compared to a net loss of approximately $4.1 million for the same period in 2019. The increase in net loss was primarily due to higher Total Other Expense in 2020 and the aforementioned one-time non-cash financing expense related to the 2020 purchase agreement with Aspire Capital.
Important Message Regarding COVID-19
Akari’s clinical trial sites are based in areas currently affected by the global outbreak of the coronavirus, and public health epidemics such as this can adversely impact the Company’s business as a result of disruptions, such as travel bans, quarantines, and interruptions to access the trial sites and supply chains, which could result in material delays and complications with respect to research and development programs and clinical trials. Moreover, as a result of coronavirus, there is a general unease of conducting unnecessary activities in medical centers. As a consequence, the Company’s ongoing trials have been halted or disrupted. For example, the Phase I/II clinical trial in patients with AKC study has been halted and the Company expects that recruitment in the Phase III clinical trial in pediatric patients with HSCT-TMA will be delayed until the fourth quarter of 2020. It is too early to assess the full impact of the coronavirus outbreak on trials for nomacopan, but coronavirus is expected to affect Akari’s ability to complete recruitment in the original timeframe. The extent to which the coronavirus impacts operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and continued severity of the outbreak, and the actions that may be required to contain the coronavirus or treat its impact. In particular, the continued spread of the coronavirus globally, could adversely impact the Company’s operations and workforce, including research and clinical trials and the ability to raise capital, could affect the operations of key governmental agencies, such as the FDA, which may delay the development of the Company’s product candidates and could result in the inability of suppliers to deliver components or raw materials on a timely basis or at all, each of which in turn could have an adverse impact on the Company’s business, financial condition and results of operation.