On November 3, 2016 GTx, Inc. (Nasdaq: GTXI) reported financial results for the third quarter ended September 30, 2016 and provided an update on the Company’s clinical development activities (Press release, GTx, NOV 3, 2016, View Source;p=RssLanding&cat=news&id=2219024 [SID1234516223]). The Company has three ongoing Phase 2 clinical trials: two trials evaluating enobosarm as a potential treatment for women with advanced androgen receptor positive breast cancer and another trial assessing enobosarm as a potential treatment for stress urinary incontinence in postmenopausal women.

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"We made excellent progress during the quarter, including demonstrating clinical benefit in Stage 1 of the 9 mg dose group which enabled us to advance this dose group to the second and final stage of the ER+/AR+ breast cancer trial," said Robert J. Wills, Ph.D., Executive Chairman of GTx. "In addition we are pleased with the continued financial support of key existing investors who participated in our equity offering last month which enables us to continue to pursue key milestones in the coming months for our breast cancer and stress urinary incontinence programs, as well as our SARD technology."

Corporate Highlights and Anticipated Milestones

Enobosarm in Breast Cancer: The Company’s lead product candidate, a selective androgen receptor modulator (SARM), is being developed as a targeted treatment for two advanced breast cancer indications: (i) estrogen receptor positive (ER+) and androgen receptor positive (AR+) breast cancer, and (ii) AR+ triple negative breast cancer (TNBC). For both clinical trials, the primary efficacy endpoint is a determination of clinical benefit (CB), which is defined as a complete response, partial response or stable disease.

ER+/AR+ breast cancer: The Company has an ongoing Phase 2 clinical trial of enobosarm (GTx-024) in women with advanced, ER+/ AR+ breast cancer. Patients receive orally-administered enobosarm (9 mg or 18 mg) daily for up to 24 months. The first stage of evaluation will be assessed among the first 18 evaluable patients for each cohort. If at least 3 of 18 patients per cohort achieve CB at week 24, the trial will proceed to the second stage of enrollment. The primary efficacy objective of the trial is clinical benefit response following 24 weeks of treatment, which, under the clinical trial protocol, will be demonstrated if at least 9 of 44 evaluable patients achieve CB. Those patients demonstrating CB at week 24 will continue to receive treatment for up to 24 months. The two dose cohorts in the trial will be treated independently for the purpose of assessing efficacy.

The Company announced in September 2016 that the 9 mg dose group demonstrated clinical benefit in Stage 1 of the trial allowing the 9 mg cohort to advance to Stage 2;
The Company expects to announce top-line results from Stage 1 of the 9 mg cohort before the end of 2016.
AR+ TNBC: The Company has an ongoing open-label, multi-center, multinational Phase 2 clinical trial to evaluate the efficacy and safety of orally administered enobosarm in up to 55 women with advanced, AR+ TNBC. Patients will receive 18 mg of enobosarm once daily for up to 12 months. Stage 1 of the trial will be assessed among the first 21 evaluable patients. If at least 2 of 21 patients achieve clinical benefit at week 16, then the trial will proceed to Stage 2 of enrollment of up to a total of 41 evaluable patients. The primary efficacy objective of the trial is clinical benefit response following 16 weeks of treatment in 41 evaluable patients.

The Company expects to have sufficient data from Stage 1 of the trial in the first quarter of 2017 to determine if patient enrollment should continue into Stage 2 of the trial.
SARMs in Non-Oncologic Indications: The Company is exploring SARMs as potential treatments for both stress urinary incontinence (SUI) and Duchenne muscular dystrophy (DMD), a rare disease characterized by progressive muscle degeneration and weakness.

Stress Urinary Incontinence: Enrollment in the Phase 2 proof-of-concept clinical trial of 3 mg of enobosarm in women with SUI is ongoing. This is the first clinical trial to evaluate a SARM for SUI. The Company believes that developing an oral therapy to treat the growing number of women who suffer a diminished quality of life from stress urinary incontinence presents a unique commercial opportunity, especially since current therapies may sometimes involve invasive procedures. The Company expects to have data from the trial during the first half of 2017.

Duchenne muscular dystrophy: Preclinical studies have confirmed the beneficial effects from SARMs in mice genetically altered to simulate DMD, compared to control groups. The Company continues to pursue a potential strategic collaboration with biopharma companies experienced in orphan drug development.

SARDs in Prostate Cancer: Our Selective Androgen Receptor Degrader (SARD) technology is being evaluated as a potentially novel treatment for men with castration-resistant prostate cancer (CRPC), including those who do not respond or are resistant to currently approved therapies. The Company believes that its SARD compounds will degrade multiple forms of the androgen receptor, including AR splice variants, such as AR-V7, along with mutant versions of the receptor.

Castration-Resistant Prostate Cancer: Lead SARD compounds are undergoing further preclinical development, including formulation and pharmacokinetic studies. The Company plans to initiate its first human clinical trial with a SARD in 2017.

Third Quarter and Nine Months 2016 Financial Results

In October 2016, the Company completed a registered direct offering of its common stock resulting in net proceeds of approximately $13.6 million. Under the terms of the offering, the Company sold 17.3 million shares of its common stock at a purchase price of $0.81 per share, which was the consolidated closing bid price of the Company’s common stock on October 11, 2016. The investors in the offering consisted of certain existing shareholders of the Company, including J.R. Hyde, III, its largest shareholder and Lead Director of the Company’s Board of Directors (the "Board"), Robert J. Wills, the Board’s Executive Chairman, and Marc S. Hanover, the Company’s Chief Executive Officer and a member of the Board.
As of September 30, 2016, cash and short-term investments were $13.4 million, which does not include the proceeds noted above from our recent equity financing, compared to $29.3 million at December 31, 2015.
Research and development expenses for the quarter ended September 30, 2016 were $4.6 million compared to $3.8 million for the same period of 2015.
General and administrative expenses were $2.3 million for the quarter ended September 30, 2016 compared to $2.0 million for the same period of 2015.
The net loss for the quarter ended September 30, 2016 was $6.9 million compared to net income of $34.9 million for the same period in 2015. Net income for the quarter ended September 30, 2015 included a non-cash gain of $40.7 million due to the change in the fair value of the Company’s warrant liability. During the first quarter of 2016, the Company recorded a non-cash reclassification of this warrant liability to stockholders’ equity due to modification of these warrants. No adjustments to the fair value of these warrants are required subsequent to the first quarter of 2016.
The net loss for the nine months ended September 30, 2016 was $10.9 million compared to a net loss of $15.5 million for the same period of 2015. The nine months ended September 30, 2016 included a non-cash gain of $8.2 million due to the change in the fair value of the Company’s warrant liability, recorded during the first quarter of 2016. The nine months ended September 30, 2015 included a non-cash gain of $352,000 due to the change in fair value of the Company’s warrant liability.
GTx had approximately 141.9 million shares of common stock outstanding as of September 30, 2016. Additionally, there remain warrants outstanding to purchase approximately 64.3 million shares of GTx common stock at an exercise price of $0.85 per share.