On March 30, 2023 Aptevo Therapeutics Inc. (NASDAQ:APVO), a clinical-stage biotechnology company focused on developing novel immuno-oncology therapeutics based on its proprietary ADAPTIR and ADAPTIR-FLEX platform technologies, reported financial results for the year ended December 31, 2022 and business highlights (Press release, Aptevo Therapeutics, MAR 30, 2023, View Source [SID1234629620]).
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2022 Highlights
APVO436 (Acute Myeloid Leukemia)
In December 2022 we announced that APVO436, in combination with venetoclax and azacitidine, demonstrated substantial clinical activity and a favorable safety and tolerability profile in adult venetoclax treatment naïve AML patients. More specifically:
The combination of venetoclax and azacitidine with APVO436 in venetoclax treatment naïve response-evaluable patients in Cohort 2 of the Phase 1b study outperformed a composite benchmark across all clinical benefit categories (Benchmark Composite References:
Aldoss 2019 , Maiti 2021 , Morsia 2020 , Garciaz 2022 , Feld 2021)
The data, which was presented in a poster session at the 64th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition (ASH) (Free ASH Whitepaper) in New Orleans, also showed that APVO436, when given in combination with venetoclax and azacitidine was observed to be generally safe and well tolerated
Based on Phase 1b outcomes, we plan to initiate a Phase 2 trial in the second half of 2023 to further evaluate APVO436 in combination with venetoclax and azacitidine in venetoclax treatment naïve patients
ALG.APV-527 (solid tumors)
In September 2022, we received a "may proceed" notification from the U.S. Food and Drug Administration (FDA), allowing us and our partner, Alligator Bioscience, to initiate clinical trials evaluating the compound for the treatment of 5T4-expressing tumors in multiple solid tumor types. A first-in-human study was initiated in the first quarter of 2023.
The first patient in this trial was dosed in February 2023. Patient recruitment is ongoing. ALG.APV-527 targets 4-1BB co-stimulatory receptor (on T lymphocytes and NK cells) and 5T4 (solid tumor antigen) and is designed to promote anti-tumor immunity.
The Preclinical Pipeline
On January 9, 2023, Aptevo filed a provisional patent with the U.S. Patent and Trademark Office (USPTO) pertaining to an anti-PD-L1 and anti-CD40 compound, APVO711, with the potential to fight a range of solid malignancies such as head and neck squamous cell carcinoma, melanoma, and carcinomas of the lung, gastrointestinal tract and colon. Aptevo initiated preclinical studies for APV0711 in the first quarter of 2023.
"2022 was a year of progress and momentum for Aptevo. As a Company we remained focused on our work, and the outcomes were both significant and impactful, while we, along with the industry, faced continued market challenges. As promised earlier in the year, we announced positive results from our Phase 1b trial evaluating APVO436 in adult patients with AML at ASH (Free ASH Whitepaper), successfully ushered our second candidate, ALG.APV-527, for evaluation in the treatment of solid tumors expressing the tumor-associated antigen 5T4, through the IND process and announced that we dosed the first patient in a Phase 1 trial in February 2023. We also announced a new pipeline molecule, APV0711, very early this year, the result of a focused and successful effort of our scientific team in 2022."
Mr. White concluded, "I am very pleased with our slate of accomplishments in 2022. Together, they demonstrate continued progress both in the clinic and across the pipeline and set us up for another successful year in 2023."
"In 2023 we are working to leverage the successes of 2022 to ensure we continue to progress in the clinic. For example, we are currently planning a Phase 2 trial evaluating APVO436 in adults with AML who are venetoclax treatment naïve. This process is informed by results reported in the fourth quarter 2022 showing substantial clinical activity, that outperformed a composite benchmark of similar patients, and a favorable safety and tolerability profile in every patient category we assessed. Retaining optionality for APVO436 development is critical to the planning process as we move toward trial initiation in the second half of the year," said Dirk Huebner, MD, Chief Medical Officer at Aptevo.
Dr. Huebner continued, "Our second clinical candidate, ALG.APV-527, is a bispecific antibody with a tumor-directed 4-1BB agonistic effect and the ability to specifically stimulate antitumor-specific T cells and NK cells involved in tumor control and we are excited about its potential.
The Phase 1 trial, initiated with our first patient dosed in February this year, is a multi-center, multi-cohort, open-label study that will include six cohorts in a 3+3 design. The trial will be conducted at up to 10 sites in the U.S. among adult patients with multiple solid tumor types likely to express the 5T4 antigen, including (but not limited to) non-small cell lung cancer (NSCLC), gastric/gastro-esophageal cancer and head and neck cancer. Recruitment for the trial is ongoing and we anticipate preliminary results from the study later this year."
2022 Summary Financial Results
Cash Position: Aptevo had cash and cash equivalents as of December 31, 2022 totaling $22.6 million.
Royalty Revenue: Royalty revenue for the period covered by this report reflects revenue recorded only in the first quarter of 2022 due to our Amendment to Royalty Purchase Agreement with HCR. As a result of the amendment, we ceased reporting as royalty revenue, royalties paid by Pfizer to HCR related to Pfizer’s sales of RUXIENCE (rituximab-pvvr). The last quarter for which we reported this royalty revenue was Q1 2022. The Amendment was effected to address a Nasdaq compliance matter and had the additional effect of eliminating the requirement to report all future Pfizer non-cash royalty revenue and extinguishing the liability that we recorded upon the initial sale of the royalties to HCR. RUXIENCE is a registered trademark of Pfizer.
Research and Development Expenses : Research and development expenses decreased by $1.1 million, to $17.9 million for the year ended December 31, 2022 from $19.0 million for the year ended December 31, 2021. The decrease was primarily due to lower spending on preclinical projects and employee costs. The decrease was partially offset by higher spending on our APVO436 Phase 1b clinical trial and getting ALG.APV-527 ready for entry into the clinic.
General and Administrative Expenses : For the year ended December 31, 2022, general and administrative expenses decreased by $0.8 million, to $13.9 million from $14.7 million for the year ended December 31, 2021. The decrease is primarily due to lower employee and consulting costs and no costs related to responding to stockholder activism matter.
Other Income (Expense): Other income (expense), net consists primarily of gain on extinguishment of liabilities, milestone income related to sale of royalties, costs related to debt extinguishment, accrued exit fees on debt, non-cash interest on financing agreements, and interest on debt.
Other Expense, Net
Other expense, net was $4.0 million for the year ended December 31, 2022 and $8.0 million for the year ended December 31, 2021. This decrease is primarily due to significant decrease of non-cash interest expenses recorded for the year ended December 31, 2022. We no longer record non-cash interest expense due to our Amendment to the Royalty Purchase Agreement in the second quarter of 2022, which eliminated the liability related to the sale of royalties. Additionally, interest expense on our MidCap Credit Agreement has decreased due to principal payments made in 2022.
Gain on Extinguishment of Liability Related to Royalties
We recorded $37.2 million in other income for the year ended December 31, 2022, due to our Amendment to Royalty Purchase Agreement. We did not have any such gain for the year ended December 31, 2021.
Milestone Income Related to Sale of Royalties
We recorded $2.5 million in other income for the year ended December 31, 2022, related to Pfizer’s net sales of RUXIENCE in fiscal year 2022. Due to our Amendment to Royalty Purchase Agreement, we record Milestone Amounts from HCR when they are earned. We received the 2021 milestone payment of $10 million, net of transaction costs, in the first quarter of 2022 and recorded the proceeds received as an additional liability related to sale of royalties under ASC 470-10-25, Debt – Sales of Future Revenues or Various Other Measures of Income.
Discontinued Operations: Income from discontinued operations was $1.0 million for the year ended December 31, 2022 and 2021. For the year ended December 31, 2022, we collected $1.0 million in deferred payments from Medexus related to IXINITY sales. For the year ended December 31, 2021, we collected $0.5 million related to the 2017 sale of the hyperimmune business to Saol International Limited, and deferred payments of $0.5 million from Medexus related to IXINITY sales.
Net Income (Loss) : Aptevo had net income of $8.0 million or $1.57 per share for the year ended December 31, 2022, compared to a net loss of $28.5 million or $6.07 per share for the corresponding period in 2021.
Aptevo Therapeutics Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
December 31, 2022 December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$ 22,635 $ 45,044
Restricted cash
- 1,259
Royalty and milestone receivable
2,500 3,664
Prepaid expenses
1,571 1,823
Other current assets
744 780
Total current assets
27,450 52,570
Property and equipment, net
1,462 2,379
Operating lease right-of-use asset
5,303 1,584
Other assets
- 68
Total assets
$ 34,215 $ 56,601
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities
$ 3,499 $ 3,462
Accrued compensation
2,105 2,077
Liability related to the sale of royalties, net – short-term
- 15,465
Current portion of long-term debt
2,000 11,667
Other current liabilities
1,102 2,086
Total current liabilities
8,706 34,757
Liability related to the sale of royalties, net – long-term
- 15,580
Long-term debt
1,456 3,707
Operating lease liability
6,079 1,341
Total liabilities
16,241 55,385
Stockholders’ equity:
Preferred stock: $0.001 par value; 15,000,000 shares authorized, zero
shares issued or outstanding
- -
Common stock: $0.001 par value; 500,000,000 shares authorized;
6,466,294 and 4,898,143 shares issued and outstanding at December
31, 2022 and December 31, 2021, respectively
48 47
Additional paid-in capital
223,962 215,232
Accumulated deficit
(206,036 ) (214,063 )
Total stockholders’ equity
17,974 1,216
Total liabilities and stockholders’ equity
$ 34,215 $ 56,601
Aptevo Therapeutics Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
For the Year Ended December 31,
2022 2021
Royalty revenue
3,114 12,292
Operating expenses:
Research and development
(17,882 ) (18,994 )
General and administrative
(13,873 ) (14,698 )
Loss from operations
(28,641 ) (21,400 )
Other income (expense):
Other expense from continuing operations, net
(4,027 ) (8,008 )
Gain on extinguishment of liability related to
sale of royalties
37,182 -
Milestone income related to sale of royalties
2,500 -
Net income (loss) from continuing operations
7,014 (29,408 )
Discontinued operations:
Income from discontinued operations
1,013 951
Net income (loss)
$ 8,027 $ (28,457 )
Net income (loss) per share:
Basic
$ 1.57 $ (6.07 )
Diluted
$ 1.57 $ (6.07 )
Shares used in calculation:
Basic
5,100,310 4,687,952
Diluted
5,102,914 4,687,952