On March 12, 2020 Harpoon Therapeutics, Inc. (Nasdaq: HARP), a clinical-stage immunotherapy company developing a novel class of T cell engagers, reported financial results for the fourth quarter and full year ended December 31, 2019 and provided a corporate update (Press release, Harpoon Therapeutics, MAR 12, 2020, View Source [SID1234555487]).

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"In the fourth quarter of 2019, Harpoon closed a potentially transformational option and license transaction and expanded an existing discovery collaboration with AbbVie that further validates our proprietary TriTAC technology," said Gerald McMahon, Ph.D., President and Chief Executive Officer of Harpoon Therapeutics. "We are expecting continued clinical milestone progress throughout 2020 with data updates for HPN424 potentially at ASCO (Free ASCO Whitepaper) and proof of concept data for HPN536 in the second half of the year."

Fourth Quarter 2019 Business Highlights and Other Recent Developments

In November, Harpoon and AbbVie announced an exclusive worldwide development and option agreement for HPN217, which targets BCMA. Under the terms of the development and option agreement, Harpoon granted to AbbVie an option to license worldwide exclusive rights to HPN217 for BCMA. AbbVie may exercise its option after completion of the Phase 1/2 clinical trial, which Harpoon expects to initiate in the first half of 2020. The development and option agreement represents a potential transaction value of up to $510 million in upfront, option and milestone payments, plus royalties on global commercial sales, of which a $30 million upfront payment was received in December 2019 and up to $50 million for dosing the first patient in the HPN217 clinical trial, which we expect to occur in the first half of 2020.

In November 2019, Harpoon and AbbVie also announced the expansion of its existing discovery collaboration for up to six additional targets. The expanded discovery collaboration represents a deal transaction value of up to $1.86 billion, with an upfront payment of $20 million received in December 2019.

In October, Harpoon presented preclinical data on HPN328 for the treatment of small cell lung cancer at the AACR (Free AACR Whitepaper)-NCI-EORTC AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper) in Boston. The presentation demonstrated that HPN328 has the potential to be an efficacious, well-tolerated and convenient therapeutic for patients with DLL3-expressing malignancies. HPN328 was well-tolerated in cynomolgus monkeys at 1 and 10 mg/kg and pharmacokinetic data support the potential for once weekly dosing. Harpoon expects to initiate a Phase 1/2a trial in the second half of 2020.

Patient enrollment and dose escalation continues in the Phase 1 trial for HPN424 in metastatic castration resistant prostate cancer and the Phase 1/2a trial for HPN536, initially for ovarian cancer. Harpoon has submitted an abstract and to plans to present a clinical trial update with interim HPN424 results at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2020 Annual Meeting and plans to present preliminary data for HPN536 in second half of 2020.

Anticipated Milestones

HPN424 – present interim data from the dose escalation phase of our Phase 1 trial at ASCO (Free ASCO Whitepaper) 2020 and initiate expansion cohort in 2020

HPN536 – present interim data from Phase 1/2a trial in the second half of 2020

HPN217 – initiate Phase 1/2 trial in the first half of 2020

HPN328 – initiate Phase 1/2a trial in the second half of 2020

Fourth Quarter and Full Year 2019 Financial Results

Harpoon ended 2019 with $155.1 million in cash, cash equivalents and marketable securities compared to $89.5 million as of December 31, 2018. Net cash provided by financing activities for the year ended December 31, 2019 was $71.6 million, primarily comprised of approximately $70.7 million in net proceeds from Harpoon’s initial public offering, completed in February 2019, partially offset by cash used in operations. Net cash used in investing activities for the year ended December 31, 2019 was $69.3 million, primarily related to the purchase and maturities of marketable securities. Net cash used in operations for the year ended December 31,2019 was $2.9 million.

Revenue for the fourth quarter ended December 31, 2019 was $2.2 million compared to $1.1 million for the fourth quarter ended December 31, 2018. Revenue for the year ended December 31, 2019 was $5.8 million, compared to $4.8 million for the prior year. The increase in revenue for both comparative periods was primarily due to collaboration and license revenue recognized from the upfront payment under the Development and Option Agreement with AbbVie, which occurred during the fourth quarter of 2019. During both the fourth quarter and year ended December 31, 2019, revenue primarily consisted of the revenue recognized related to research and development services performed under the Collaboration Agreement and the Development and Option Agreement with AbbVie.

Research and development expense for the fourth quarter ended December 31, 2019 was $12.2 million compared to $8.7 million for the fourth quarter ended December 31, 2018. R&D expense for the year ended December 31, 2019 was $41.6 million, compared to $26.4 million for the prior year. The increases over both comparative periods primarily arose from clinical development expenses and an increase in personnel-related expenses, which included conducting preclinical studies, the continuation of the clinical trials for HPN424 and HPN536, and manufacturing activities for four TriTAC product candidates in various stages of development.

General and administrative expenses for the quarter ended December 31, 2019 was $4.4 million compared to $2.2 million for the quarter ended December 31, 2018. General and administrative

expenses for the year ended December 31, 2019 were $22.4 million, compared to $6.1 million for the prior year. The increases over both comparative periods were due to higher expenses primarily related to legal fees associated with ongoing Maverick litigation, consulting and accounting services, an increase in headcount, and other professional services to support our ongoing operations as a public company.

Net loss for the fourth quarter ended December 31, 2019 was $14.3 million compared to $9.7 million for the fourth quarter ended December 31, 2018. Net loss for the year ended December 31, 2019 was $55.6 million, compared to $27.4 million for the prior year.

Conference Call Information

Harpoon will host a conference call and live audio webcast this afternoon at 1:30 p.m. PT / 4:30 p.m. ET to discuss the fourth quarter and full year 2019 financial results and provide a corporate update. The live call may be accessed by dialing 866-951-6894 for domestic callers and 409-261-0624 for international callers and using conference ID: 5468929. A live webcast of the call will be available online from the investor relations section of the Harpoon Therapeutics website at View Source

An archived replay of the webcast will be available on Harpoon Therapeutics’ website shortly after the conference call.