On November 14, 2018 CASI Pharmaceuticals, Inc. (Nasdaq: CASI), a biopharmaceutical company dedicated to the development and delivery of high quality, cost-effective pharmaceutical products and innovative therapeutics to patients in the U.S., China and throughout the world, reported financial results for the third quarter and nine months ended September 30, 2018 and provided a review of recent accomplishments and anticipated upcoming milestones (Press release, CASI Pharmaceuticals, NOV 14, 2018, View Source [SID1234531333]).
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Ken K. Ren, Ph.D., CASI’s Chief Executive Officer, commented, "CASI made substantial progress in the third quarter. We continue working with relevant regulatory authorities and our strategic partners in the U.S. and in China to advance EVOMELA, MARQIBO, and ZEVALIN closer to the finish line in terms of CFDA approval and are making solid progress on all fronts. Our recent appointments of George Chi as Chief Financial Officer and Larry Zhang as President of CASI’s Beijing operations further underscore our commitment to bringing high-quality, cost-effective pharmaceutical products and innovative therapeutics to the market, and enables us to significantly ramp up our commercial preparatory activities. We recently acquired a U.S. FDA-approved ANDA for HBV from Laurus Labs Limited and continue to pursue opportunities to further augment our pipeline in conjunction with our broader mission."
Third Quarter and Recent Business Highlights
September Financing – During September, CASI received gross proceeds of approximately $37.5 million from a private placement of shares of common stock and warrants to purchase common stock to new and existing shareholders. The net proceeds will be used to support commercial activities, ongoing business development and for general working capital purposes.
CASI Pharmaceuticals, Inc. / 9620 Medical Center Drive / Suite 300 / Rockville, MD 20850
Phone 240.864.2600 / Fax 301.315.2437
New Executive Appointments: Chief Financial Officer and President of CASI China – On September 28, CASI announced the appointment of George Chi as Chief Financial Officer to oversee the company’s expanding fiduciary responsibilities as it gears up for commercialization in China and to lead the company’s financial strategy and affairs. On October 2, the company announced the appointment of Larry Zhang as President of CASI (Beijing) Pharmaceuticals Co., Ltd., the China operating subsidiary of CASI Pharmaceuticals, Inc. Mr. Zhang is overseeing operations in China as CASI prepares for commercial activities.
Acquired U.S. FDA-approved abbreviated new drug application (ANDA) from Laurus Labs Limited – On October 23, CASI announced that it had acquired tenofovir disoproxil fumarate (TDF), indicated for the treatment of hepatitis B virus (HBV), from Laurus Labs Limited. The aggregate purchase price for the ANDA was $3 million, with an upfront payment of $700,000 and $2.3 million to be paid upon completion of certain milestones. The acquisition of TDF is consistent with the company’s mission to commercialize U.S. FDA approved drugs in China.
China FDA (CFDA) import drug registration priority review of EVOMELA in progress – CASI has received a series of standard questions from the CFDA related to EVOMELA drug product production, which usually reflect the final stage of CFDA assessment before approval based on the Import Drug Approval registration pathway. CASI is working with Spectrum Pharmaceuticals, and its vendors, from whom EVOMELA is in-licensed to address the questions and submit the requested documents.
Preparation continues for EVOMELA’s commercial launch in China – CASI has established a core in-house marketing and sales team led by Thomas Zhang, who possesses a 20-year track record of commercializing oncology drugs in China for Roche and Johnson & Johnson.
CFDA review in progress for MARQIBO and ZEVALIN – CASI continues to make good progress with the CFDA toward advancing MARQIBO’s and ZEVALIN’s import drug clinical trial applications. The ZEVALIN antibody kit and the radioactive Yttrium-90 component of the application require separate submissions; both are currently under technical review by the Center for Drug Evaluation of the CFDA and the quality confirmatory testing by National Institute for Food and Drug Control (NIFDC) of the CFDA as part of the regulatory review process.
Third Quarter and First Nine Months 2018 Financial Results
Cash Position: As of September 30, CASI had cash and cash equivalents of $98.9 million compared to $66.2 million as of June 30, 2018. This increase primarily reflects the gross proceeds of $37.5 million received in September 2018 related to CASI’s $48.5 million private placement announced in September 2018, partially offset by costs related to operating expenses during the quarter.
R&D Expenses: Research and development (R&D) expenses for the three and nine months ended September 30, 2018, were $1.8 million and $5.2 million, respectively, compared to $1.0 million and $3.7 million for the same periods in 2017. The increase in R&D expenses primarily reflects personnel costs associated with the technology transfer activities and regulatory support services associated with the recently acquired ANDA portfolio, as well as increased costs associated with the Company’s internal preclinical activities in China.
G&A Expenses: General and administrative (G&A) expenses for the three and nine months ended September 30, 2018, were $6.9 million and $12.3 million, respectively, compared to $0.6 million and $2.0 million for the same periods in 2017. The increase in G&A over the prior year is primarily attributed to non-cash stock-based compensation expense for the stock options issued to the Company’s Executive Chairman and an increase in salary, benefits and recruitment expense in China, largely related to sales and marketing efforts to prepare for the anticipated launch of the Company’s first commercial product in China, as well as other G&A functions. There were also increased costs associated with business development related to exploratory acquisition activities, investor and public relations activities, and an increase in legal and other professional services fees during the 2018 period. G&A expenses include non-cash stock-based compensation of $1.6 million and $3.3 million for the three and nine months ended September 30, 2018, respectively, compared to $0.1 million and $0.3 million in the respective periods in 2017.
Net Loss: The Company reported a net loss attributable to common shareholders for the three and nine months ended September 30, 2018 of ($8.8) million, or ($0.10) per share, and ($18.2) million, or ($0.22) per share, respectively, compared to ($1.6) million, or ($0.03) per share, and ($5.7) million, or ($0.10) per share for the same periods in 2017. The larger net loss for both periods is primarily due to the non-cash stock-based compensation expense for stock options issued to the Company’s Executive Chairman, costs associated with the technology transfer activities and regulatory support for our ANDA portfolio, the write-off of approximately $0.7 million in January 2018 due to acquired in-process R&D primarily related to ANDAs not approved by the FDA, and increased costs associated with G&A functions, including employment costs for sales and marketing efforts, increased business development related to exploratory acquisition efforts and investor relations activities, higher professional service fees, and administrative fees associated with the Company’s September 2018 financing.
Further information regarding the Company, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, can be found at www.casipharmaceuticals.com.