On May 4, 2020 Aduro Biotech, Inc. (NASDAQ: ADRO), a clinical-stage biopharmaceutical company focused on developing therapies targeting the Stimulator of Interferon Genes (STING) and A Proliferation Inducing Ligand (APRIL) pathways for the treatment of cancer, autoimmune and inflammatory diseases, reported financial results for the first quarter ended March 31, 2020 (Press release, Aduro Biotech, MAY 4, 2020, View Source [SID1234556962]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We ended the first quarter of 2020 with a cash position of $205.9 million, which enables us to continue supporting the development of our STING and APRIL programs into 2023. We are currently focused on activating clinical trial sites and enrolling patients for Part 3 of our Phase 1 study of BION-1301 in IgA nephropathy and driving enrollment of patients in our Phase 2 study of ADU-S100 in combination with pembrolizumab in squamous cell carcinoma of the head and neck (SCCHN)," said Stephen T. Isaacs, chairman, president and chief executive officer of Aduro. "Despite the challenges associated with the current COVID-19 pandemic, our Board and leadership team remain committed to supporting the safety of our employees while moving our STING and APRIL clinical programs forward."

Recent Highlights

Announced corporate restructuring to reduce operating expenses and extend cash runway into 2023.

Received a $10 million development milestone payment from license partner, Merck & Co., Inc. (known as MSD outside the United States and Canada) (Merck). The payment was received as a result of Merck’s initiation of a Phase 2 clinical trial of MK-5890, the anti-CD27 agonist antibody licensed to Merck in 2014, in patients with advanced squamous or non-squamous non-small cell lung cancer (NSCLC) that have been previously treated with anti-PD-L1 therapy.

Announced an update on clinical trial timelines and business operations in light of the COVID-19 global pandemic.

We expect delays in activating additional sites and enrolling patients into Part 3 of the Phase 1 clinical trial of BION-1301 in IgA nephropathy. As a result, our ability to report data in IgA nephropathy patients will likely be delayed until the first half of 2021.

Despite some delays in additional site activation and patient enrollment and anticipated delays in patient follow-up and data analysis, we expect to present interim data for the ongoing Phase 2 clinical trial evaluating ADU-S100 and pembrolizumab in SCCHN in the second half of 2020.

We are continuing preparations to initiate a Phase 1 clinical trial evaluating ADU-S100 as an intravesical monotherapy for non-muscle invasive bladder cancer in the second half of 2020. However, study start-up activities may be delayed.

Financial Results

Cash Position – Cash, cash equivalents and marketable securities totaled $205.9 million at March 31, 2020, compared to $213.6 million at December 31, 2019.

Revenue – Revenue was $14.0 million for the first quarter of 2020 compared to $3.9 million for the same period in 2019. The increase in revenue for the quarter was primarily due to recognition of the $10.0 million development milestone payment received under our license and research agreement with Merck.

Expenses –

Research and development expenses were $15.8 million for the first quarter of 2020 compared to $17.5 million for the same period in 2019. The quarter to date costs decreased primarily due to lower costs related to our programs that are winding down partially offset by higher costs as a result of focused spending towards our STING and APRIL programs. The decrease was also attributable to lower compensation and related personnel costs as well as stock-based compensation as compared to 2019.

General and administrative expenses were $7.8 million for the first quarter of 2020 compared to $8.2 million for the same period in 2019. The quarter to date costs decreased primarily due to lower personnel and stock-based compensation expense, as compared to 2019.

Restructuring and related expense was $4.3 million for the first quarter of 2020 compared to $3.0 million for the same period in 2019. The 2020 restructuring and related expenses consisted of severance and employee retention costs as well as the impairment of property and equipment associated with the planned closure of the Oss facility as part of the January 2020 restructuring plan. The $3.0 million restructuring and related expense recorded in 2019, which includes employee severance and retention payments, related to the January 2019 strategic reset.

Net Loss – Net loss for the first quarter of 2020 was $7.6 million or $0.09 per share compared to net loss of $23.4 million or $0.29 per share for the same period in 2019. In addition to the factors described above, the net loss was offset by approximately $5.7 million of income tax benefit related to an income tax refund resulting from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The income tax refund is expected to be received in the second half of 2020.