On August 7, 2018 Tocagen Inc. (Nasdaq: TOCA), a clinical-stage, cancer-selective gene therapy company, reported financial results and business highlights for the second quarter ended June 30, 2018 (Press release, Tocagen, AUG 7, 2018, View Source [SID1234528487]).

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"We conclude the mid-point of 2018 on a high note, with robust site activation and enrollment in our Phase 3 Toca 5 clinical trial, a license agreement with ApolloBio for development and commercialization of Toca 511 & Toca FC in the greater China region, and continued progress in our pipeline-expanding R&D efforts," said Marty Duvall, chief executive officer of Tocagen. "We expect to continue to achieve a number of milestones during the second half of the year, including the completion of enrollment for the Toca 5 clinical trial in patients with recurrent brain cancer and conducting the first of two pre-planned interim analyses of the trial. During the second half of 2018, we also plan to advance our R&D programs to build our gene therapy pipeline."

Tocagen finished 2017 with $88.7 million in cash and cash equivalents. The cash guidance for 2018, provided early this year, implied a year-end projected cash balance of approximately $40 million. Recent progress has substantially strengthened Tocagen’s cash position to execute, expand and explore the company’s highly differentiated cancer-selective gene therapy platform. Tocagen now expects to conclude 2018 with approximately $70 million in cash and cash equivalents.

Second Quarter 2018 and Recent Highlights

Closed license agreement with ApolloBio: In July 2018, Tocagen and ApolloBio closed a license agreement to develop and commercialize Toca 511 & Toca FC within the greater China region. Under the terms of the agreement, Tocagen received an initial upfront payment of $16 million, before taxes. Tocagen is eligible to receive additional potential payments of $4 million in near-term development milestones, including completion of enrollment in the ongoing Phase 3 Toca 5 study, and an additional $107 million in development and commercial milestones, plus additional double-digit tiered sales royalties.
Restructured 2015 venture debt to strengthen cash position: In May 2018, Tocagen entered into an amended and restated loan and security agreement with Oxford Finance and Silicon Valley Bank. Under the agreement, approximately $18 million was added to Tocagen’s cash reserve and may be used to satisfy the company’s future working capital needs and to fund its general business requirements. Additionally, further principal amortization on this debt was deferred until January 2020.
Presentation and publication of Toca 511 & Toca FC data: At the 2018 American Academy of Neurology (AAN) Annual Meeting and the 2018 American Association of Neurological Surgeons (AANS) Annual Scientific Meeting, research collaborators presented updated durable response data from the Phase 1 study involving patients with recurrent high-grade glioma (rHGG) who received Toca 511 & Toca FC at the time of surgical resection. In May 2018, data were published online in Neuro-Oncology demonstrating the multiyear durable responses observed in rHGG patients treated in the Toca 511 & Toca FC Phase 1 trial. These data will be included in the Neuro-Oncology October print edition to be distributed at the 23rd Annual Scientific Meeting and Education Day of the Society for Neuro-Oncology.
Advanced Toca 521 as part of pipeline-building strategy: At the 2018 Annual Meeting of The American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper), research collaborators introduced Toca 521, a retroviral replicating vector expressing a single-chain variable fragment targeting PD-L1. The preclinical data demonstrate Toca 521 has robust, durable and highly selective anti-tumor activity superior to systemically administered anti-PD-1 or anti-PD-L1 monoclonal antibodies. These data inform Tocagen’s plans to advance Toca 521 into investigational new drug application (IND) enabling studies this year.
Second Quarter 2018 Financial Results

Research and Development (R&D) Expenses: R&D expenses were $12.8 million for the quarter ended June 30, 2018, compared to $6.6 million for the quarter ended June 30, 2017. The increase in R&D expenses in 2018 was primarily driven by higher costs to support the expanded Toca 5 trial, manufacturing activities related to Toca 511 & Toca FC, and personnel and related costs due to increased headcount.

General and Administrative (G&A) Expenses: G&A expenses were $2.6 million for the quarter ended June 30, 2018, compared to $2.0 million for the quarter ended June 30, 2017. The increase in G&A expenses was primarily due to increased stock-based compensation expense.

Net Loss: Net loss was $16.1 million, or $0.81 per common share (basic and diluted), for the quarter ended June 30, 2018, compared to a net loss of $9.1 million, or $0.56 per common share (basic and diluted), for the quarter ended June 30, 2017. The 2018 calculation is based on 19.9 million average common shares outstanding for the second quarter of 2018, compared to 16.3 million average common shares outstanding for the second quarter of 2017. The average common shares outstanding for the second quarter of 2017 includes the issuance of 9.8 million common shares, as well as the conversion of convertible preferred stock and convertible promissory notes into 7.8 million common shares, upon Tocagen’s initial public offering in April 2017.

2018 Six-Month Results

R&D Expenses: R&D expenses were $23.2 million for the six months ended June 30, 2018 compared to $13.3 million for the six months ended June 30, 2017. Similar to the second quarter results, the R&D expenses primarily reflect increased costs to support the expanded Toca 5 Phase 3 clinical trial, manufacturing activities related to Toca 511 & Toca FC, and personnel and related costs due to increased headcount.

G&A Expenses: G&A expenses were $5.0 million for the six months ended June 30, 2018 compared to $4.0 million for the first six months ended June 30, 2017, with the increase primarily driven by higher stock-based compensation expense.

Net Loss: Net loss for the first six months ended June 30, 2018 was $29.0 million, or $1.45 per common share (basic and diluted), compared to a net loss of $18.1 million, or $1.95 per common share (basic and diluted), for the six months ended June 30, 2017. This calculation is based on 19.9 million average common shares outstanding for the six months ended June 30, 2018, compared to 9.3 million average shares outstanding for the same period in 2017.

Cash Position and Guidance

Cash, cash equivalents and marketable securities were $79.5 million at June 30, 2018 compared to $88.7 million at December 31, 2017. The decrease of approximately $10 million reflects the use of $29 million of cash during the six months ended June 30, 2018, partially offset by the net proceeds of approximately $18 million from the restructured debt and a $1 million installment payment from ApolloBio. Subsequent to the end of the second quarter, Tocagen closed its license agreement with ApolloBio and received a total upfront payment of $16 million before applicable China taxes. Tocagen reiterates its annual cash burn guidance and continues to estimate the total cash used in 2018 to fund operations, capital expenditures and debt amortization will not exceed $50 million, resulting in a year-end cash balance of approximately $70 million.

About Toca 511 & Toca FC

Tocagen’s lead product candidate is a two-part cancer-selective immunotherapy comprised of an investigational biologic, Toca 511 and an investigational small molecule, Toca FC. Toca 511 (vocimagene amiretrorepvec) is a retroviral replicating vector (RRV) that selectively infects cancer cells and delivers a gene for the enzyme, cytosine deaminase (CD). Through this targeted delivery, infected cancer cells carry the CD gene and produce CD. Toca FC is an orally administered, extended-release formulation of the prodrug, 5-fluorocytosine (5-FC), which is converted into an anti-cancer drug, 5-fluorouracil (5-FU), when it encounters CD. 5-FU kills cancer cells and immune-suppressive myeloid cells in the tumor microenvironment resulting in anti-cancer immune activation and subsequent tumor killing.

On August 7, 2018 Agilvax, Inc., a biotechnology company developing a novel cancer immunotherapy for the treatment of triple negative breast cancer (TNBC), reported the receipt of a Fast Track Small Business Innovation Research (SBIR) grant from the National Cancer Institute (NCI) (Press release, Agilvax, AUG 7, 2018, View Source [SID1234528503]). The grant will provide up to $2.3 million in funding for preclinical studies, cGMP manufacturing and a nonclinical toxicology study that will enable an investigational new drug application (IND) submission for Agilvax’s lead immunotherapy product, AX09. The SBIR award is the result of a highly competitive federal grant program supporting significant innovations that address critical unmet needs in public health.

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AX09 is being developed as an immunotherapeutic agent for the treatment of TNBC by inhibiting the function of xCT, which is associated with tumor growth and metastatic progression. xCT has known metabolic functions in normal and cancer cells, where it plays a critical role in cellular defenses, detoxification and intracellular balance. xCT overexpression occurs in several cancers leading to overarching metabolic changes that reprogram cells for tumor growth and survival. Agilvax’s AX09 shows significant anti-xCT immune response in preclinical breast cancer models, where tumor impairment and reduced metastatic progression have been demonstrated. Several peer reviewed publications elucidate the preclinical evidence of AX09 and the important role of xCT in cancer metastasis.

"We are delighted to receive this grant award from the National Cancer Institute (NCI) to advance the development of AX09 in TNBC, which is one of the lead indications for this product," said Federica Pericle, Ph.D., president and chief executive officer of Agilvax, and the Principal Investigator of the award. "The SBIR award is an important indication of the significant clinical and commercial opportunity of AX09. We are extremely grateful to the NCI and our investors as we execute our development of this novel immunotherapy."

"There is a desperate need for targeted therapies and combinational approaches for patients with TNBC," said George Peoples, M.D., F.A.C.S., Director, Cancer Vaccine Development Program, Metis Foundation. "AX09 shows promise in preclinical studies to inhibit an exploitable target and its novel mechanism of action makes AX09 a potentially powerful combination therapy to achieve durable responses for breast cancer patients."

On August 7, 2018 Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) reported its second quarter 2018 financial results and described recent clinical and corporate accomplishments including (Press release, Synta Pharmaceuticals, AUG 7, 2018, View Source [SID1234528529]):

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· Positive Phase 2 Clinical Results – MGL-3196 demonstrated highly statistically significant results for the key 36-week endpoints in its Phase 2 clinical trial in non-alcoholic steatohepatitis (NASH), including statistically significant reductions of liver fat and resolution of NASH

· Madrigal’s abstract "In a Placebo-Controlled 36-Week Phase 2 Trial, Treatment with MGL-3196 Compared to Placebo Results in Significant Reductions in Hepatic Fat (MRI-PDFF), Liver Enzymes, Fibrosis Biomarkers, Atherogenic Lipids, and Improvement in NASH on Serial Liver Biopsy" has been selected for oral presentation at The Liver Meeting 2018 in San Francisco. The presentation will take place on Monday, November 12, 2018, at 8:15 AM during the Presidential Plenary — Clinical Science

· Increased Capital Position — Madrigal completed an underwritten registered public offering in which the gross proceeds to Madrigal from the offering, before deducting the underwriting discounts and commissions and other estimated offering expenses, were approximately $329 million

· Progress in out-licensed legacy oncology programs — Madrigal’s licensee for its Hsp90 inhibitor program, Aldeyra Therapeutics, Inc., recently announced that, ADX-1612, its lead Hsp90 compound, is being advanced in multiple indications: mesothelioma, ovarian cancer and lymphoproliferative immune disease

"We believe the 36-week data from our recently completed Phase 2 clinical study of MGL-3196 in patients with NASH suggest a high likelihood of success in a similarly designed Phase 3 study, for which we are actively preparing, pending regulatory agreement," stated Paul Friedman, M.D., Chief Executive Officer of Madrigal. "With our financial raise completed, which provided more than $300 million of additional capital, we are in a strong position to expedite the MGL-3196 development program in NASH and dyslipidemias."

Becky Taub, M.D., CMO and Executive VP, Research & Development of Madrigal added, "We believe the totality of data from our clinical and preclinical studies to date, including the consistency of the various parameters related to clinical benefits and safety, demonstrate the potential of MGL-3196 to resolve NASH and improve multiple atherogenic lipids. We are pleased our abstract was selected by AASLD as an oral presentation in the presidential plenary clinical session and look forward to presenting these encouraging clinical outcomes in November at The Liver Meeting 2018."

Financial Results for the Three Months and Six Months Ended June 30, 2018

As of June 30, 2018, Madrigal had cash, cash equivalents and marketable securities of $490.3 million, compared to $191.5 million at December 31, 2017. The increase in cash and marketable securities resulted primarily from the net proceeds of $311.8 million from Madrigal’s public offering of common stock in June 2018, partially offset by cash used in operations of $14.0 million.

Operating expenses were $7.8 million and $14.9 million, respectively, for the three month and six month periods ended June 30, 2018, compared to $8.4 million and $14.5 million in the comparable prior year periods.

Research and development expenses for the three month and six month periods ended June 30, 2018 were $5.1 million and $10.3 million, respectively, as compared to $6.8 million and $11.2 million in the comparable prior year periods. The decreases are primarily attributable to completion of treatment in our Phase 2 clinical studies in 2018.

General and administrative expenses for the three month and six month periods ended June 30, 2018 were $2.7 million and $4.6 million, respectively, as compared to $1.6 million and $3.3 million in the comparable prior year periods. The increases are due primarily to higher non-cash stock compensation expense from stock option awards.

Interest income for the three month and six month periods ended June 30, 2018 was $1.2 million and $1.9 million, respectively, as compared to $92 thousand and $168 thousand in the comparable prior year periods. The change in interest income was due primarily to a higher average principal balance in our investment account in 2018.

Out-Licensed Legacy Oncology Programs

Madrigal’s licensee for its Hsp90 inhibitor program, Aldeyra Therapeutics, Inc., provided a pipeline update during its June 2018 Research Day. ADX-1612 is a novel Hsp90 inhibitor in development for the treatment of post-transplant lymphoproliferative disorder and cancer. Hsp90 is a protein that facilitates cell replication, which is excessive and uncontrolled in certain inflammatory diseases and cancer. ADX-1612 is currently being studied in investigator-sponsored trials for mesothelioma, with clinical results expected in the second half of 2018, and ovarian cancer, with Phase 2 clinical trial initiation expected in the second half of 2018. Aldeyra is further developing ADX-1612 for the

treatment of lymphoproliferative immune disease, with Phase 2 clinical testing expected to start in 2019.

Clinical Program Summaries for MGL-3196

NASH

Non-alcoholic Steatohepatitis (NASH) is a common liver disease in the United States and worldwide, unrelated to alcohol use, that is characterized by a build-up of fat in the liver, inflammation, damage (ballooning) of hepatocytes and increasing fibrosis. Although people with NASH may feel well and often do not know they have the disease, NASH can lead to permanent damage, including cirrhosis and impaired liver function in a high percentage of patients.

In October 2016, the first patient was treated in the ongoing Phase 2 trial of MGL-3196 for the treatment of NASH. The randomized, double-blind, placebo-controlled, multi-center Phase 2 study enrolled 125 patients 18 years of age and older with liver biopsy-confirmed NASH and included approximately 25 clinical sites in the United States. Patients were randomized to receive either MGL-3196 or placebo in a 2:1 ratio.

The primary endpoint of the study was the reduction of liver fat at 12 weeks compared with baseline (relative change), assessed by MRI-PDFF. Key secondary endpoints at 36 weeks included: reduction in liver fat compared with baseline (relative change), also assessed by MRI-PDFF; a two-point reduction in NAS (NALFD activity score) on biopsy; resolution of NASH on biopsy; and, safety and tolerability based on adverse events and changes in laboratory values.

The primary endpoint of the study at 12 weeks was achieved. Liver fat was reduced by 36.3% in all MGL-3196 treated patients (78) and 42.0% in a pre-specified group of high exposure MGL-3196 treated patients (44/78), as compared with 9.6% median reduction in liver fat in 38 placebo treated patients. These results were statistically significant (p<0.0001) for both MGL-3196 treatment groups. Further, 75% of the high-exposure MGL-3196 treated patients showed liver fat reductions of >30%.

At 36 weeks, MGL-3196 achieved multiple key secondary endpoints including a sustained highly significant (p<0.001) reduction in liver fat compared to placebo as measured by MRI-PDFF; mean relative fat reduction for MGL-3196 was 37% versus 8.9% for placebo. MGL-3196 was associated with a greater percentage of subjects with a 2-point improvement in NAS (56% of 73 patients vs 32% of 34 placebo subjects, p=0.02). NASH resolution (NR) was seen in 27% of MGL-3196 compared with 6% of placebo subjects, p=0.02. MGL-3196 patients with > 30% fat reduction on Week 12 MRI-PDFF demonstrated a higher percentage of 2-point improvement in NAS (70%, p=0.001) and NR (39%, p=0.001) compared with placebo, demonstrating a strong relationship between early reduction in liver fat as demonstrated by week 12 MRI-PDFF and NASH improvement on liver biopsy at Week 36. In patients with NASH Resolution,

35% of the MGL-3196 treated patients and no placebo patients had more advanced NASH (baseline NAS >5).

At Week 36, MGL-3196 treated patients showed sustained reduction of fibrosis biomarkers. In MGL-3196 patients with NASH resolution, fibrosis also resolved in 50% of patients and was decreased statistically significantly reduced relative to all placebo patients.

There were statistically significant reductions in liver enzymes in MGL-3196 treated patients compared to placebo treated patients; reductions of greater magnitude were achieved with longer duration of MGL-3196 treatment. Statistically significantly more MGL-3196 treated patients than placebo treated patients had normalization of ALT (alanine transaminase).

Similar to week 12, at week 36 there were sustained, statistically significant reductions in low-density lipoprotein cholesterol (LDL-C), triglycerides, ApoB and lipoprotein(a).

MGL-3196 was well tolerated in this trial with mostly mild and a few moderate AEs which were balanced between drug treated and placebo patients. An increase in incidence of mild transient diarrhea in MGL-3196-treated, often a single episode, at the start of treatment. Diarrhea incidence was not increased later in the study.

Based on liver enzyme inclusion criteria, some patients are receiving extended treatment beyond 36 weeks for up to 36 additional weeks. All patients in this extension study will receive MGL-3196 and only non-invasive assessments will be made, including serial MRI-PDFF, safety labs, and circulating biomarkers.

Additional information about the study [NCT02912260] can be obtained at www.ClinicalTrials.gov.

Heterozygous familial hypercholesterolemia (HeFH), and a much rarer form called homozygous familial hypercholesterolemia (HoFH), are severe genetic dyslipidemias typically caused by inactivating mutations in the LDL receptor. Both forms of FH lead to early onset cardiovascular disease. HeFH, the most common dominantly inherited disease, is present in up to 1 in 200 people; the disease is found in higher frequencies in certain more genetically homogenous populations. Treatments exist for both HeFH and HoFH but many patients (as many as 40 percent of HeFH patients) are not able to reach their cholesterol (LDL-C) reduction goals on these therapies, reflecting the lifetime burden of cholesterol buildup in their bodies. Based on evidence of impressive LDL cholesterol lowering in Phase 1, and data suggesting that MGL-3196 has a mechanism of action that is different from and complementary to statins, Madrigal initiated a Phase 2 proof-of-concept trial in HeFH in February 2017 and enrolled 116 patients.

In this Phase 2 HeFH trial, patients who were not at their LDL-C goal were randomized in a 2:1 ratio to receive either MGL-3196 or placebo, in addition to their current cholesterol lowering regimen, which included approximately 75% taking high intensity statins (20/40 mg rosuvastatin or 80 mg atorvastatin), and about 2/3 of patients also taking ezetimibe. MGL-3196 treated patients (placebo corrected) achieved highly significant (p< 0.0001) LDL-C lowering of 18.8%, and 21% LDL-C lowering in those on an optimal dose of MGL-3196. LDL-C lowering was 28.5% in MGL-3196 treated compared to placebo in a prespecified group of patients who did not tolerate high intensity statin doses. Highly significant reductions (p<0.0001) relative to placebo were also observed with ApoB, triglycerides (TG) (25-31%), apolipoprotein CIII (Apo CIII) and Lp(a) (25-40%) in all MGL-3196 treated patients and prespecified subgroups, irrespective of statin treatment.

MGL-3196 was well-tolerated with primarily mild and some moderate AEs, the numbers of which were balanced between placebo and drug-treatment groups.

About MGL-3196

Among its many functions in the human body, thyroid hormone, through activation of its beta receptor, plays a central role in controlling lipid metabolism, impacting a range of health parameters from levels of serum cholesterol and triglycerides to the pathological buildup of fat in the liver. Attempts to exploit this pathway for therapeutic purposes in cardio-metabolic and liver diseases have been hampered by the lack of selectivity of older compounds for the thyroid hormone receptor (THR)-β, chemically-related toxicities and undesirable distribution in the body.

Madrigal recognized that greater selectivity for thyroid hormone receptor (THR)-β and liver targeting might overcome these challenges and deliver the full therapeutic potential of THR-β agonism. Madrigal believes that MGL-3196 is the first orally administered, small-molecule, liver- directed, truly β-selective THR agonist. MGL- 3196 has now demonstrated in two Phase 2 double-blind, placebo-controlled trials in NASH and HeFH the potential for a broad array of therapeutically beneficial effects, improving components of both metabolic syndrome, such as insulin resistance and dyslipidemia, and fatty liver disease, including lipotoxicity and inflammation. Based on evidence of these pleiotropic actions, coupled with an excellent safety profile, Madrigal plans to initiate a Phase 3 clinical program in NASH and dyslipidemias.

On August 7, 2018 Sierra Oncology, Inc. (Nasdaq: SRRA), a clinical stage drug development company focused on advancing next generation DNA Damage Response (DDR) therapeutics for the treatment of patients with cancer, reported that Dr. Nick Glover, President and Chief Executive Officer, will present an overview of the company at the 2018 Wedbush PacGrow Healthcare Conference being held in New York on August 14-15 (Press release, Sierra Oncology, AUG 7, 2018, View Source [SID1234528571]). The presentation is scheduled for 9:10 a.m. ET on Wednesday, August 15. A live audio webcast and archive of the presentation will be accessible through the Sierra Oncology website at www.sierraoncology.com.

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On August 7, 2018 XOMA Corporation (Nasdaq: XOMA), a pioneer in the discovery, development and licensing of therapeutic antibodies, reported its second quarter 2018 financial results (Press release, Xoma, AUG 7, 2018, View Source [SID1234528769]).

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"We continue to focus our efforts on expanding our portfolio of partner-funded programs through both acquisition and out-license activities," said Jim Neal, Chief Executive Officer at XOMA. "We believe we are well-positioned to execute on our royalty-aggregator strategy to create near- and long-term value for shareholders."

Financial Results
XOMA recorded total revenues of $2.3 million for the second quarter of 2018, $1.8 million of which was recognized under XOMA’s license agreement and common stock purchase agreement with Rezolute. In the second quarter of 2017, XOMA reported $10.9 million in revenue, $10.0 million of which was milestone revenue earned under one of the Company’s license agreements with Novartis.

Research and development (R&D) expenses were $0.4 million for the second quarter of 2018, compared to $2.9 million for the second quarter of 2017. The decrease in R&D expenses was due primarily to reductions of $1.0 million in clinical trial costs, $0.4 million in consulting costs, $0.4 million in the allocation of facilities costs, $0.4 million in external manufacturing activities, and $0.1 million in stock-based compensation. The significant reduction in R&D spending is a result of the discontinuation of clinical trial activities and the execution of the Company’s royalty-aggregator business model.

General and administrative (G&A) expenses were $4.4 million for the second quarter of 2018, compared to $5.2 million for the second quarter of 2017. The decrease in G&A expenses was due primarily to reductions of $0.9 million in stock-based compensation, $0.2 million in legal and accounting fees, and $0.1 million in information technology costs, partially offset by increases of $0.2 million in consulting services and $0.4 million in the allocation of facilities costs due to a greater proportion of G&A personnel after the Company’s restructuring activities.

The Company recorded a lease-related restructuring charge of $0.5 million in the second quarter of 2018, compared with $1.5 million for personnel-related restructuring expenses in the same period of 2017.

Total other income, net was $1.2 million for the second quarter of 2018, compared to other expense of $0.7 million for the second quarter of 2017. During the second quarter of 2018, we recorded $1.0 million in income from Ology Bioservices related to the disposition of our biodefense business in March 2016. Separately, we received long-term equity securities that consisted of an investment in Rezolute Inc.’s common stock under the terms of a licensing agreement. As of June 30, 2018, the fair value of the long-term equity securities had decreased, and we recognized a loss of $0.4 million.

Net loss for the second quarter of 2018 was $1.9 million, compared to net income of $0.3 million for the second quarter of 2017.

On June 30, 2018, XOMA had cash and cash equivalents of $38.7 million. The Company ended December 31, 2017, with cash and cash equivalents of $43.5 million. The Company’s current cash and cash equivalents are expected to be sufficient to fund its operations for multiple years.