On September 11, 2017 Peregrine Pharmaceuticals, Inc. (NASDAQ:PPHM) (NASDAQ:PPHMP), a biopharmaceutical company committed to improving patient lives by manufacturing high quality products for biotechnology and pharmaceutical companies and through its proprietary R&D pipeline, reported financial results for the first quarter of fiscal year (FY) 2018 ended July 31, 2017, and provided an update on its contract manufacturing operations, research and development programs, and other corporate highlights (Press release, Peregrine Pharmaceuticals, SEP 11, 2017, View Source [SID1234520488]).

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Highlights Since April 30, 2017
"We have been working diligently toward the transformation from an R&D focused business to a business dedicated to a contract development and manufacturing organization or CDMO. The appointment of Roger Lias, Ph.D., as president of our CDMO subsidiary, Avid Bioservices, and his appointment to Peregrine’s board of directors marks an important next step in this transition. Roger is a highly experienced executive with a long track record of success in the CDMO industry, and was an ideal candidate for the position," stated Steven W. King, president and chief executive officer of Peregrine. "We have built a successful commercial CDMO business with an excellent regulatory track record and we look forward to taking Avid to the next level under Roger’s leadership. Naturally, job one will be a smooth transition to ensure we continue to support our existing clients while simultaneously working to attract new clients as we look to grow the business on multiple fronts."
Avid Bioservices was established as Peregrine’s internal biologics manufacturing and development group, and began formal operations in January 2002. Avid has grown from an internal support operation to a full service CDMO that manufactures bulk drug substance for products that are approved and marketed in over 18 countries by leading biopharma companies. Avid was recently recognized as a leading CDMO by Life Science Leader as a recipient of multiple 2017 Contract Manufacturing Leadership Awards for Quality, Reliability, Capabilities, Expertise and Compatibility. Avid has an outstanding regulatory inspection history and state-of-the-art cGMP manufacturing facilities. Mr. King has been president of Avid since its formation in addition to his role as president and CEO of Peregrine Pharmaceuticals since 2003.
Mr. King continued, "As we focus on the CDMO business, we have been evaluating the best option for divesting our R&D assets through licensing or asset sale. The goal being to find a partner that will make a significant short term investment in the bavituximab program in order to validate the subset analysis from the Phase III SUNRISE trial. The subset analysis, which supports the combination of bavituximab with checkpoint inhibitors, is compelling but needs further clinical validation. These data, combined with findings from our collaborators at Memorial Sloan Kettering Cancer Center (MSKCC) supporting combination with cellular therapy and the ongoing trials from our partners at the National Comprehensive Cancer Network (NCCN), have bolstered our drive to find a suitable partner for advancing the bavituximab and PS-exosome diagnostic programs. We are moving forward expeditiously as we recognize the need to move quickly from the R&D standpoint, as well as the establishment of a pure play CDMO with no R&D expenses. We hope to bring this process to completion over the coming months and will update you on our progress."
Avid Bioservices Highlights
"Avid had a strong first quarter, recognizing revenue of $27 million," stated Paul Lytle, chief financial officer of Peregrine. "When combined with a 57% decrease in R&D spending and a moderate decrease in SG&A, our net loss for the quarter decreased 89% to $1.2 million. During this transition year where we have seen a lower manufacturing demand from our top two customers, we are still expecting to generate between $50 and $55 million in revenue while we continue to focus on securing new customers and diversifying our customer base as we have added four new customers this calendar year thus far."
The company is providing manufacturing revenue guidance for the full FY 2018 of $50 million – $55 million.

Avid’s current manufacturing revenue backlog is $33 million, representing estimated future manufacturing revenue to be recognized under committed contracts. Most of the backlog is expected to be recognized during the remainder of FY 2018.
Research and Development Highlights
ASCO Highlights:
Peregrine researchers presented additional supportive data demonstrating that patients in the bavituximab containing arm who had low baseline PD-L1 expression on tumor cells (i.e., patients typically with poorer response to PD-1/PD-L1 checkpoint inhibitors) lived significantly longer than patients with high baseline PD-L1 expression.
ESMO Highlights:
Clinical investigators and Peregrine researchers presented the final clinical results from the company’s Phase III SUNRISE trial of bavituximab in patients with previously treated locally advanced or metastatic non-squamous non-small cell lung cancer.
As previously reported, study results demonstrated that the addition of bavituximab to docetaxel did not result in improvement of the study’s primary endpoint of overall survival in the intent-to-treat population. However, a subgroup analysis on the final dataset demonstrated that for bavituximab plus docetaxel patients who received subsequent immunotherapy, the median overall survival was not yet reached. This compared to a median overall survival of 12.6 months for patients who received placebo plus docetaxel, and subsequent immunotherapy [HR = 0.46; p = 0.006].
NCCN Highlights:
The three clinical trials under the collaboration with the NCCN are advancing as planned.
Massachusetts General Hospital Cancer Center—Phase I/II Clinical Trial of Bavituximab with Radiation and Temozolomide for Patients with Newly Diagnosed Glioblastoma. Patient dosing was initiated in September 2017.

Moffitt Cancer Center—A Phase I Trial of Sorafenib and Bavituximab Plus Stereotactic Body Radiation Therapy for Unresectable Hepatitis C Associated Hepatocellular Carcinoma. This trial is open for enrollment.

The Sidney Kimmel Comprehensive Cancer Center at Johns Hopkins—Phase II Study of Pembrolizumab and Bavituximab for Progressive Recurrent/Metastatic Squamous Cell Carcinoma of the Head and Neck. This trial is expected to be initiated by the end of the calendar year 2017.
PS Exosome Technology Highlights:
The company continues to make progress with its PS exosome diagnostic technology that is designed to detect and monitor cancer. The assay has been successfully optimized and we are evaluating options to license, partner, or sell this technology.
Financial Highlights and Results
Contract manufacturing revenue from Avid’s clinical and commercial biomanufacturing services was $27,077,000 for the first quarter of FY 2018 compared to $5,609,000 for the first quarter of FY 2017. This represents total revenue growth of 383% for FY 2018 compared to the same prior year period. It is important to note that the $27 million included the shipment of $10 million in product, which was held over from the fourth quarter of 2017 due to delays in shipping at the customer’s request. The first quarter increase was primarily attributed to an increase in demand for contract manufacturing services associated with process validation activities in addition to the greater number of manufacturing runs shipped during the quarter.

Total costs and expenses for the first quarter of FY 2018 were $28,306,000, compared to $16,691,000 for the first quarter of FY 2017. Research and development expenses decreased 57% to $3,645,000, compared to $8,569,000 for the first quarter of FY 2017.

Cost of contract manufacturing increased to $20,448,000 in the first quarter of FY 2018 compared to $3,062,000 for the first quarter of FY 2017. This increase is primarily due to an increase in the cost of contract manufacturing associated with higher reported revenue. Also contributing to this increase and impacting gross margins for the period was idle capacity due to lower demand and unavailable capacity during the installation of the new 2,000 liter bioreactors combined with a higher percentage of revenue related to pass through charges, such as raw materials, that are recorded as revenue at cost plus a nominal mark-up, thereby lowering the overall gross margin. During the current quarter, 38% of our revenue was related to pass-through charges versus 20% in the same prior year quarter.

For the first quarter of FY 2018, selling, general and administrative expenses decreased to $4,213,000 compared to $5,060,000 for FY 2017.

Peregrine’s consolidated net loss attributable to common stockholders was $2,647,000 or $0.06 per share, for the first quarter of FY 2018, compared to a net loss attributable to common stockholders of $12,437,000, or $0.36 per share, for the same prior year quarter.

Peregrine reported $37,256,000 in cash and cash equivalents as of July 31, 2017, compared to $46,799,000 at fiscal year ended April 30, 2017.
More detailed financial information and analysis may be found in Peregrine’s Quarterly Report on Form 10-Q, which will be filed with the Securities and Exchange Commission today.

On September 11, 2017 Daiichi Sankyo Company, Limited (hereafter, Daiichi Sankyo) reported that DS-8201, an investigational HER2-targeting antibody drug conjugate (ADC), demonstrated preliminary antitumor activity in patients with HER2-expressing solid tumors such as colon cancer, non-small cell lung cancer and other tumor types (Press release, Daiichi Sankyo, SEP 11, 2017, View Source [SID1234520480]). These data were presented during a poster session at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2017 Congress in Madrid, Spain.

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Preliminary results from the ongoing DS-8201 phase 1 study showed that DS-8201 demonstrated an overall confirmed response rate of 32 percent and a disease control rate of 82 percent in a subgroup analysis of 22 of 25 evaluable patients with HER2-expressing solid tumors, which included colon cancer (11 patients), non-small cell lung cancer (6 patients), salivary gland cancer (4 patients), Paget’s disease (2 patients), cholangiocarcinoma (1 patient) and esophageal cancer (1 patient). Two of 10 evaluable patients with colon cancer, one out of five evaluable patients with non-small cell lung cancer and three of four evaluable patients with salivary gland cancer achieved partial responses. Two additional patients with colon cancer and non-small cell lung cancer with one post baseline scan showed a partial response yet to be confirmed at subsequent scans. A total of 168 patients have been treated in both the dose escalation (24 patients) and dose expansion (144 patients) parts of the study as of August 1, 2017.

Safety data for 168 patients who received at least one dose of DS-8201 in study parts 1 and 2 and across different cohorts of the study also were reported. The most common adverse events (any grade) seen in all patients to date included nausea (67 percent), decreased appetite (56 percent), vomiting (33 percent), anemia (30 percent) and decreased platelet count (29 percent). Grade 3 adverse events occurring in >10 percent of patients included anemia (13 percent), decreased neutrophil count (14 percent) and decreased white blood cell count (11 percent). Grade 4 adverse events occurred in ≤ 3 percent of patients and included decreased platelet count (3.0 percent), decreased neutrophil count (2.4 percent), decreased white blood cell count (1.8 percent) and anemia (1.2 percent).

"These preliminary results are consistent with other data previously reported in the HER2-positive metastatic breast and gastric cancer cohorts of this study, demonstrating that further study is warranted for DS-8201 across other HER2-expressing solid tumors," said Antoine Yver, MD, MSc, Executive Vice President and Global Head, Oncology Research and Development, Daiichi Sankyo. "These data add to the growing body of clinical evidence suggesting that DS-8201 could potentially become an important new treatment option for many different types of solid tumors that overexpress HER2. In addition to initiating our pivotal phase 2 study of DS-8201 in HER2-positive metastatic breast cancer, we are exploring next steps for the development of DS-8201 across multiple HER2-expressing tumor types."

About the DS-8201 Phase 1 Study
The open-label two-part phase 1 dosing study is currently evaluating DS-8201 in patients with advanced/
unresectable or metastatic solid tumors that are refractory or intolerant to standard treatment, or for whom no standard treatment is available. The primary objective of the dose escalation phase of the study was to assess the safety and tolerability of DS-8201 and determine the maximum tolerated dose. In the dose expansion part of the phase 1 study, DS-8201 is given in one of two doses (5.4 mg/kg and 6.4 mg/kg) to patients with HER2-positive advanced or metastatic breast cancer and gastric cancer, HER2 low-expressing breast cancer and other HER2-expressing solid tumors. Patient enrollment in the two breast cancer cohorts is ongoing in the U.S. and Japan. For more information about the study, please visit ClinicalTrials.gov.

About DS-8201
DS-8201 is the lead product in the ADC Franchise of the Daiichi Sankyo Cancer Enterprise. ADCs are a type of targeted cancer medicine that deliver cytotoxic chemotherapy ("payload") to cancer cells via a linker attached to a monoclonal antibody that binds to a specific target expressed on cancer cells. Using Daiichi Sankyo’s proprietary ADC technology, DS-8201 is a smart chemotherapy comprised of a humanized HER2 antibody attached to a novel topoisomerase I inhibitor (DXd) payload by a tetrapeptide linker. It is designed to deliver enhanced cancer cell destruction upon release inside the cell and reduce systemic exposure to the cytotoxic payload (or chemotherapy) compared to the way chemotherapy is commonly delivered.

DS-8201 is currently in phase 2 clinical development for HER2-positive unresectable and/or metastatic breast cancer resistant or refractory to T-DM1 (DESTINY-Breast01), and in phase 1 development for HER2 low-expressing breast cancer, HER2-positive gastric cancer and other HER2-expressing solid tumors.
The U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy designation to DS-8201 for the treatment of patients with HER2-positive, locally advanced or metastatic breast cancer who have been treated with trastuzumab and pertuzumab and have disease progression after ado-trastuzumab emtansine (T-DM1), and Fast Track designation for the treatment of HER2-positive unresectable and/or metastatic breast cancer in patients who have progressed after prior treatment with HER2-targeted therapies including T-DM1. DS-8201 is an investigational agent that has not been approved for any indication in any country. Safety and efficacy have not been established, and there is no guarantee DS-8201 will become commercially available.

On September 11, 2017 Advaxis, Inc. (NASDAQ:ADXS), a late-stage biotechnology company focused on the discovery, development and commercialization of immunotherapy products, reported a business update and announced its financial results for the third quarter (Q3) ended July 31, 2017 (Press release, Advaxis, SEP 11, 2017, View Source [SID1234520477]).

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"The board of directors selected Anthony Lombardo as interim chief executive officer in July, given his 30 years of leadership experience in the life sciences industry, including previous CEO and executive management positions in both public and private companies," said Dr. David Sidransky, chairman of the board at Advaxis. "We’re confident in his abilities and the value he’s already helping to deliver, and he will remain in this role for the foreseeable future. Over the past two months, Lombardo has been leading an effort to conduct a review of the current Advaxis business portfolio and our future strategic direction. We have a strong scientific and clinical asset base on which to build value, and the board and the management team are aligned on the path forward to commercialization. To further strengthen the management team, our top priority is conducting a search for a chief medical officer, to ensure the effective execution of our refined clinical strategy. The board and the management team are aligned on Advaxis’ path forward."

A Four Franchise Approach to Increasing Shareholder Value

This path forward is anchored in the company’s Lm Technology, a proven platform unique in its ability to safely and effectively target various cancers in multiple ways. As the field of immunotherapy continues to evolve, the flexibility of the Lm platform has allowed Advaxis to continue to adapt and introduce highly innovative programs.

"To fully leverage the technology’s potential and enhance the lives of more cancer patients, while also optimizing shareholder value, we’re reprioritizing programs for continued internal clinical development and implementing alternative strategies for others," said Anthony Lombardo, interim chief executive officer at Advaxis.

Advaxis’ sharpened growth strategy centers on four clear, distinct franchises that will drive significant value creation: HPV-associated cancers, prostate cancer, neoantigen therapy and hotspot mutation therapy.

1. Franchise One: HPV- Associated Cancers

Continue our commitment to commercializing axalimogene filolisbac:
Completion of the MAA submission for conditional approval in Europe is on track for year end.
Enrollment continues in eight countries for AIM2CERV to evaluate axalimogene filolisbac as an adjuvant therapy in patients with high-risk locally advanced cervical cancer.
Collaboration with AstraZeneca on the Phase 2 combination trial with durvalumab in cervical and head and neck cancers is ongoing and continues to enroll.
The combination trial with ADXS-DUAL and BMS’s nivolumab for the treatment of women with persistent, recurrent or metastatic cervical cancer will be initiated in 1H 2018. This program will provide a second registrational opportunity in cervical cancer.
Given the promising early data in head and neck and anal cancers, Advaxis is actively pursuing opportunities to continue development through investigator-sponsored trials (ISTs) or other third-party approaches.
2. Franchise Two: Prostate Cancer

Preliminary data presented at the 3rd International Cancer Immunotherapy Conference (CIMT) (Free CIMT Whitepaper) suggests that ADXS-PSA shows monotherapy activity in prostate cancer that is associated with a distinct immunologic and gene expression pattern. The ongoing trial, ADXS-PSA: Phase 1/2 Study (Keynote-046), evaluates ADXS-PSA as monotherapy and in combination with Merck’s pembrolizumab. The clinical benefit in prostate cancer could be a significant value creator to expand the Lm platform into the prostate cancer market.
In addition, the company is actively developing an additional product for prostate cancer, currently in preclinical testing, which could complement ADXS-PSA.
3. Franchise Three: Personalized Therapies Targeting Neoantigens

ADXS-NEO, in partnership with Amgen Inc., has the potential to be a major step forward in personalized medicine. First patient dosed is expected in 1H 2018.
The initial tumor types for ADXS-NEO are metastatic microsatellite stable colon, head and neck, and non-small cell lung cancers.
4. Franchise Four: Targeting Shared Hotpot Mutations and Tumor Associated Antigens

Advancement of the proprietary ADXS-HOT preclinical program will expand Lm Technology into multiple products targeting several of the most common cancers.
Advaxis expects to file INDs for the first HOT products in 2018.
As part of its portfolio refinement, the company has determined it will not pursue further clinical study of ADXS-HER2 at this time, but remains open to ISTs or licensing opportunities.

"We believe that focusing on these four franchises gives us the greatest opportunity to increase shareholder value and have a significant impact on patients and their families," said Lombardo. "Our excitement about the clinical potential of our Lm Technology is balanced by focus and fiscal discipline."

Financial Highlights for Q3

"The company had a productive third quarter while advancing the development of its core assets," said Sara Bonstein, chief financial officer at Advaxis. "There was increased spend in Q3 due to higher costs to support the regulatory filing of axalimogene filolisbac in Europe, and several one-time costs, which are not anticipated to recur. Our Q4 activities will focus on the execution of our core programs, and the disciplined identification and analysis of additional opportunities to leverage our Lm Technology platform."

Cash, cash equivalents and investments totaled $89.4 million, compared to $115.3 million as of April 30, 2017.
$34.2 million in disbursements include several one-time cash disbursements, among them technical operations costs associated with the European filing of axalimogene filolisbac (which is anticipated to be completed by the end of 2017) and increased clinical trial costs, together totaling approximately $7 million. Cash disbursements are anticipated to normalize in the fourth quarter.
Cash receivables totaled $8.2 million, primarily from partner reimbursements, specifically $4.5 million from Amgen in support of the ADXS-NEO program and $3 million from Stendhal in support of the AIM2CERV program.
Net loss was $70.1 million ($1.74 per share), compared to a net loss of $51.8 million ($1.52 per share) for the same period in 2016, largely due to increased research and development (R&D) expenses.
R&D expenses were $47.8 million, compared to $32.0 million in Q3 2016, related to an increase in clinical trial expense and technical operation support, primarily related to our HPV-franchise.
General and administrative expenses were $33.2 million, compared to $20.4 million in Q3 2016; the difference is primarily attributed to stock and cash compensation expense for past employees, of which approximately $9.5 million was a non-cash expense.
41 million common shares outstanding and 49.5 million shares outstanding on a fully diluted basis as of July 31, 2017.
"We continue to focus on building shareholder value and are committed to bringing clinically beneficial solutions to our patients and their families," said Lombardo.

To learn more about Advaxis and its immunotherapy clinical programs, visit www.advaxis.com.

On September 11, 2017 Kancera reported that it has launched the second part of the ongoing clinical Phase I study of KAND567 (Press release, Kancera, SEP 11, 2017, View Source [SID1234520475]). During this part of the study, KAND567 is administered to groups of healthy subjects in increasing doses, twice a day for seven days. The study is scheduled for completion in the fourth quarter of 2017.

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KAND567 works by blocking the Fractalkine system and has been demonstrated in preclinical disease models to effectively combat relapses in autoimmune disease as well as nerve inflammation and pain associated with chemotherapy against cancer.

In the clinical study KAND567 is administered orally to a total of 80 subjects, first in single doses and then in multiple doses. The purpose of the study is to evaluate KAND567 in healthy volunteers in terms of safety, tolerance and pharmacokinetics (drug absorption, exposure and excretion) as well as food interaction (how food affects the absorption of the drug in the body).

The study will be carried out at the QPS facility in Groningen. QPS is an internationally established contract research company that performs clinical studies, develops drug preparations and conducts laboratory analyses according to GLP and GCP quality standards (Good Laboratory Practice and Good Clinical Practice).

About the Fractalkine project
KAND567 is an orally available small molecule that blocks CX3CR1, the Fractalkine receptor. Fractalkine is an immune-modulating factor, a so-called chemokine, which transmits signals via the CX3CR1 receptor, thereby controlling the function of immune cells and cancer cells. The levels of Fractalkine molecules and CX3CR1 receptors have been shown to be elevated in several inflammatory diseases, in cancer and in chronic pain conditions.

Kancera’s drug candidate KAND567 is the most advanced drug candidate against CX3CR1 and has been shown to be effective against inflammation and pain in multiple preclinical disease models.

In the healthy individual, Fractalkine and its receptor, CX3CR1, regulate migration of immune cells from the blood capillary wall into areas where the immune system is needed. Cancer cells use the same system (CX3CR1 and Fractalkine) to invade healthy organs and form metastases. In addition, the presence of Fractalkine has been associated with a lack of effect of immuno-oncological drugs. Therefore, Kancera evaluates how well KAND567 can stop tumor growth.

Animal studies show that Fractalkine’s receptor is not essential for survival and that important immune functions remain intact despite the lack of receptor. The basis for successful development of KAND567 lies in effectively addressing local inflammation while maintaining a healthy immune system.

In clinical trials, blocking of the Fractalkine system has been shown to have the desired effect against auto-immune diseases such as Crohn’s disease and rheumatoid arthritis in refractory patients. These studies have been conducted by the pharmaceutical company Eisai using a monoclonal antibody. The results of these studies indicate that the probability increases for the Kancera AB drug candidate KAND567 to achieve clinical and commercial success as the first small-molecule drug that works through the Fractalkine system to combat many common diseases.