On August 14, 2017 Galena Biopharma, Inc. (NASDAQ: GALE), a biopharmaceutical company developing hematology and oncology therapeutics that address unmet medical needs, reported its financial results for the quarter ended June 30, 2017 (Press release, Galena Biopharma, AUG 14, 2017, View Source [SID1234520250]).

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"Last week we made a transformative announcement to merge with SELLAS Life Sciences Group in what we believe is the best option for our stockholders," said Stephen F. Ghiglieri, Interim Chief Executive Officer and Chief Financial Officer. "We reached out to hundreds of companies through our financial advisor during our review of strategic alternatives; and, after considerable effort and evaluation of alternative options, we chose SELLAS due to our belief that the combination of our two development pipelines gives our stockholders the best opportunity for a potential return on their investment in Galena."

Mr. Ghiglieri continued, "Our assets are synergistic with the SELLAS pipeline, and their galinpepimut-S (GPS) program has unique advantages for a cancer vaccine that we believe will make a significant impact in the cancer immunotherapy space. GPS is targeting Wilm’s Tumor 1, or WT1, which is ranked as a leading antigen by the National Cancer Institute and is present in over 25 different cancer types, giving GPS a potentially broad therapeutic opportunity. Unlike NeuVax, GPS is not HLA restrictive which broadens the eligible patient population; and, it has the ability to activate both CD4+ and CD8+ T cells to expand the immune response. And, finally, the ongoing and planned combination trials with the GPS vaccine and checkpoint inhibitors are part of the next treatment paradigm in cancer immunotherapy. Once the proposed merger is approved, GPS will be the lead program moving forward."

"Additionally, SELLAS is committed to supporting the three, ongoing NeuVax (nelipepimut-S) investigator sponsored trials through the end of 2019 and will evaluate the GALE-401 and GALE-301/GALE-302 programs for possible internal development or partnering to deliver value from those programs to our stockholders as well. The combined company has a series of near term milestones which could be significant value creating opportunities, including the interim efficacy readout from the NeuVax Phase 2b trial in HER2 1+/2+ patients, data readouts from two of the GPS trials, and planned trial initiations for GPS in several indications," added Mr. Ghiglieri.

Mr. Ghiglieri concluded, "The merger with SELLAS and the steps involved in completing this merger, including a reverse split of our stock, are necessary to ensure that the combined entity continues to be listed on the NASDAQ Capital Market and has sufficient access to capital to realize the value of the various clinical programs. I understand this has been a long and challenging road for many Galena stockholders. Our management and board undertook a diligent effort to reach this point of combining with SELLAS, and we believe the participation in the combined company offers multiple opportunities for value creation in the coming quarters. We firmly believe that the promise of the SELLAS assets, combined with its strong leadership team, and a new board of directors, offer the best opportunity to maximize Galena’s value."

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FINANCIAL REVIEW

Operating loss from Galena’s development programs and general and administrative expenses, classified as continuing operations, during the three months ended June 30, 2017 was $4.9 million, including $0.2 million in non-cash stock-based compensation, compared to an operating loss from continuing operations of $9.3 million, including $0.6 million in non-cash stock-based compensation for the same period in 2016. Operating loss for the first half of 2017 was $10.0 million, including $0.4 million in non-cash stock-based compensation, compared to an operating loss from continuing operations of $18.3 million, including $1.3 million in non-cash stock-based compensation for the same period in 2016.

Loss from continuing operations for the second quarter of 2017 was $7.1 million, or $0.19 per basic and diluted share, including $2.2 million in non-operating expense. Income from continuing operations for the second quarter of 2016 was $8.3 million, or $0.91 and $0.90 per basic and diluted share, respectively, including $17.6 million in non-operating income. Loss from continuing operations for the first half of 2017 was $9.4 million, or $0.29 per basic and diluted share, including $0.6 million in non-operating income. Loss from continuing operations for the first half of 2016 was $4.8 million, or $0.13 per basic and diluted share, including a $13.4 million in non-operating income.

Loss from discontinued operations from Galena’s former commercial business for the second quarter of 2017 was $1.3 million, or $0.03 per basic and diluted share, compared to $2.9 million, or $0.32 per basic and diluted share, for the same period of 2016. Loss from discontinued operations for the first half of 2017 was $10.7 million, or $0.34 per basic and diluted share, compared to $6.3 million, or $0.17 per basic and diluted share, for the same period of 2016. Loss from discontinued operations during the first half of 2017 includes an accrual for a one-time $7.5 million civil payment settlement, which was recognized in the first quarter of 2017 in current liabilities of discontinued operations, related to the oral agreement in principle with the U.S. Attorney’s Office for the District of New Jersey (USAO NJ) and the Department of Justice (DOJ). The final terms and details of this settlement are subject to change pending the completion and execution of a definitive settlement agreement among Galena and the USAO NJ and DOJ. The agreement is anticipated to be a global settlement encompassing any potential claims that might be made by state and federal agencies. There is no assurance that the Galena will be able to complete a definitive settlement agreement on the final terms of the oral agreement in principle including its financial impact or any future adjustment to the financial statements.

Net loss for the second quarter of 2017 was $8.4 million, or $0.22 per basic and diluted share, compared to net income of $5.4 million, or $0.59 and $0.58 per basic and diluted share, respectively, for the same period of 2016. Net loss for the first half of 2017 was $20.1 million, or $0.63 per basic and diluted share, compared to $11.1 million, or $0.30 per basic and diluted share, for the same period of 2016.

Galena had cash and cash equivalents of approximately $18.1 million as of June 30, 2017, compared with $18.1 million as of December 31, 2016. During the first half of 2017 Galena used $20.0 million in operating activities offset by $15.5 million in net proceeds from issuance of common stock and warrants to purchase common stock in February 2017 and $4.5 million in redemptions of the debenture paid by Galena in shares of common stock which facilitated the release of restricted cash in the same amount.

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SECOND QUARTER AND RECENT HIGHLIGHTS

Operational Highlights

Positive Interim Safety Data on the NeuVax (nelipepimut-S) Clinical Trial in Combination with Trastuzumab in High-Risk HER2 3+ Patients
In April 2017, a poster was presented on the NeuVax investigator-sponsored Phase 2 clinical trial in high-risk, HER2 3+ patients at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2017 in Washington, DC. The Phase 2 is a multi-center, prospective, randomized, single-blinded, placebo-controlled trial combining NeuVax and trastuzumab in the adjuvant setting to prevent recurrence in HER2-positive (HER2 3+) breast cancer patients. The poster, entitled, "Pre-specified interim analysis in a prospective, randomized phase II trial of trastuzumab vs trastuzumab + NeuVax to prevent breast cancer recurrence in HER2+ breast cancer patients," presented the interim safety analysis that was initiated after enrollment of the 50th patient in the trial (vaccine group (VG) n=22, control group (CG) n=28). The analysis demonstrated that the agent is well tolerated with no increased cardiotoxicity associated with giving NeuVax in combination with trastuzumab.

Corporate Highlights

Entry into Merger Agreement with SELLAS Life Sciences Group
On August 8, 2017, Galena and SELLAS Life Sciences Group Ltd, a privately-held, oncology-focused, clinical stage biopharmaceutical company, jointly announced they entered into an all stock definitive merger agreement under which SELLAS will merge into and become an indirect, wholly-owned subsidiary of Galena. The combined company will be renamed SELLAS Life Science Group, Inc. The proposed merger, if completed, will result in a combined company focused on the development of novel treatments for cancer. The proposed merger is expected to close in the fourth quarter of 2017, subject to the approval of Galena stockholders and other customary closing conditions.

Reached Binding Term Sheet in In Re Galena Biopharma, Inc.
As reported on its Current Report of Form 8-K filed on July 28, 2017, Galena entered into a binding settlement term sheet to settle the litigation currently pending in the Court of Chancery of the State of Delaware, captioned In re Galena Biopharma, Inc., C . A . No. 2017 – 0423 – JTL. The settlement resolves the putative stockholder class action claims against the defendants, Galena and/or certain of its current and former officers and directors, as well as Galena’s petition to validate certain corporate actions. The settlement will not become effective until approved by the court. Under the terms of the settlement, the class will receive a settlement payment of $1.3 million, in addition to attorney fees in an amount to be approved. The settlement payment of $1.3 million consists of $50,000 in cash to be paid by the defendants or their insurers and $1,250,000 in unrestricted shares of the Galena’s common stock pursuant to the terms and conditions of the settlement. Any amounts awarded by the Court for attorneys’ fees will be paid in part by the settlement fund and in part by the Company’s insurance carriers.

Reached Agreement in Principle with the U.S. Attorney’s Office for the District of New Jersey (USAO NJ) and the Department of Justice (DOJ)
In its Annual Report on Form 10-K filed on May 10, 2017, Galena previously announced it had reached an oral agreement in principle with USAO NJ and DOJ regarding the material terms of a settlement related to the USAO NJ and DOJ’s investigation. The final terms and details of this settlement are subject to change pending the completion and execution of a definitive civil settlement agreement among Galena and the USAO NJ and DOJ as well as the settlement of any claims that might be made by state agencies and federal agencies such as U.S. Department of Defense, the Office of Personnel Management, the Office of Inspector General for the U.S. Department of Health and Human Services. The agreement in principle involves a non-criminal resolution and a civil payment, the terms of which are being negotiated with the USAO NJ and DOJ, of approximately $7.5 million, plus interest accrued since the date of reaching an agreement in principle, in return for a release of government claims in connection with the investigation.

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Settlement with the Securities and Exchange Commission
In December 2016, Galena and its former CEO, Mark Ahn, reached an agreement in principle to a proposed settlement that would resolve an investigation by the staff of the Securities and Exchange Commission (SEC) involving conduct in the period 2012-2014 regarding the commissioning of internet publications by outside promotional firms. On April 10, 2017, the SEC made an announcement that marks a formal conclusion to the SEC investigation of Galena.

On August 14, 2017 Moleculin Biotech, Inc., (NASDAQ: MBRX) ("Moleculin" or the "Company"), a preclinical pharmaceutical company focused on the development of anti-cancer drug candidates, some of which are based on license agreements with The University of Texas System on behalf of the M.D. Anderson Cancer Center ("MD Anderson"), reported its financial and operating results for the second quarter ended June 30, 2017 and other recent developments (Press release, Moleculin, AUG 14, 2017, View Source [SID1234520245]).

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Walter Klemp, Chairman and CEO of Moleculin stated: "We are pleased with the results of this past quarter, especially in our recent achievements with the Mayo Clinic to supply WP1066 for a potential grant funded study, a discovery of a Metabolic Inhibitor with the potential to treat pancreatic cancer and signing a new technology license agreement with MD Anderson. We are also excited to have begun clinical testing site development efforts in Poland with our appointment of Bioscience SA as our Polish CRO. We look forward to submitting our IND for Annamycin for the treatment of relapsed or refractory AML and moving forward with the FDA to allow for clinical trials to begin."

Mr. Klemp continued: "The recent approvals of three new drugs (Rydapt, Vyxeos and Idhifa) for the treatment of AML are exciting, since they provide additional options for treatments in defined subpopulations, and because they help underscore the magnitude of the potential opportunity for Annamycin, which we will be studying for relapsed or refractory AML. With regard to AML, Rydapt is approved only for patients with a specific gene mutation, and for use in combination with the standard of care chemotherapy. Vyxeos is approved as an option to the standard of care, but only for specific AML patients, namely those with newly-diagnosed therapy-related acute myeloid leukemia (t-AML) or AML with myelodysplasia-related changes (AML-MRC). Jazz Pharmaceuticals purchased this drug in their $1.5 billion acquisition of Celator Pharmaceuticals.

"Although FDA approval of both of those drugs was based on overall survival comparisons with a standard of care, Idhifa was approved based on an accelerated clinical trial design that showed a 19% response rate in patients with relapsed or refractory AML and IDH2 mutation. What’s interesting is that Idhifa was approved with a single Phase 1/2 clinical trial based on response rate, not overall survival, and a relatively low response rate at that. Also, the patient population for which it is approved represents only 13% of all AML patients. We look forward to working with FDA on a similar approach for Annamycin — reliance on response rate in an accelerated path — but for a larger population of AML patients."

"While these new drugs make valuable incremental improvements in AML therapy," concluded Mr. Klemp. "Most AML patients will still fail to respond to (or relapse from) initial therapy; therefore, our initial clinical development plan will attempt to address the significant unmet need of patients who relapse from, or are refractory to, initial therapy. We also believe that, if Annamycin can demonstrate superior efficacy and safety to the current standard of care, the drug may be able to fill major areas for first-line AML treatment. In the meantime, these transactions serve to remind us of the opportunity for our company if Annamycin shows significant activity in our planned clinical trials."

Jonathan P. Foster, EVP and CFO of Moleculin stated: "We are extremely pleased with the ongoing support of our shareholder base. Late in the quarter and up to the first week in August we saw exercise activity of over 2 million warrants which will generate over $3 million in cash for the Company. The overhang of over 8 million warrants generated from our February offering is now below 500,000. As such, we are pleased to report that we believe we now have sufficient funds to pursue our planned operations into the second quarter of 2018."

Second Quarter & Recent Highlights
Commitment to Supply WP1066 for a potentially grant funded study at the Mayo Clinic – Physician-scientists at the Mayo Clinic have requested and Moleculin agreed to supply them with WP1066 for testing in a potential grant-funded clinical trial for children with Diffuse Intrinsic Pontine Gliomas (DIPG), a rare and very aggressive form of brain tumor.

Studies conducted at this center have suggested that DIPG may be particularly sensitive to the inhibition of the activated form of a cell-signaling protein call STAT3, a primary target of WP1066, and have indicated significant anti-tumor activity of WP1066 in DIPG in vitro and in vivo tumor models.

Announced the Discovery of a Metabolic Inhibitor with the Potential to Treat Pancreatic Cancer – The Company announced on June 21, 2017, that it has received attention from the scientific community for its glucose decoy technology as a potential means to starve tumors to death by exploiting their hyper-dependence on glycolysis for energy production. The Company has identified possible new properties of its compound WP1234, a modification to WP1122. In pre-clinical testing, WP1234 has shown improved drug characteristics when compared with WP1122 and a 20 to 50-fold greater ability to kill pancreatic cancer cell lines when compared with traditional inhibitors of glycolysis. The Company believes this discovery now makes WP1234 a promising drug candidate to be studied for the treatment of pancreatic cancer.

Closing of a Follow-On Public Offering – In February 2017, we completed a public offering of our common stock and warrants, pursuant to which we received $4.5 million in net proceeds, after deducting underwriting discounts and commissions and estimated offering expenses. On March 24, 2017, warrants associated with this offering were exercised generating an additional $0.80 million in net proceeds. During the second quarter of 2017, warrants associated with this offering were exercised generating an additional $2.4 million bringing the total net proceeds from this offering to above $7.6 million.

Regained Nasdaq Compliance – On July 6, 2017, the Company received a letter from NASDAQ notifying us that we had regained compliance with NASDAQ Listing Rule 5550(a)(2) as a result of the closing bid price for the Company’s common stock being at $1.00 or more for a minimum of 10 consecutive business days. On May 18, 2017, the Company received a prior deficiency letter from NASDAQ notifying us that for the last 30 consecutive business days, the bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market.

Signed a new technology license agreement with MDA Cancer Center – On July 18, 2017, the Company announced a new technology license agreement with MDA Cancer Center based on new patent applications the Company intends to file relating to its drug Annamycin for the treatment of relapsed or refractory AML.

John M. Climaco Added to the Board of Directors – The Company announced the appointment of John M. Climaco as an independent member of the Company’s Board of Directors, effective July 24, 2017 to fill a board vacancy. John M. Climaco, JD, 48, was most recently the Executive Vice President of Perma-Fix Medical S.A, a Polish subsidiary of the Perma-Fix Environmental Services, Inc. where he has served as a director since 2013. From 2003 to 2012, Mr. Climaco served as President and Chief Executive Officer, as well as a member of the Board of Directors of Axial Biotech, Inc., a venture-backed molecular diagnostics company specializing in spine disorders, which he cofounded in 2003. Since 2012, Mr. Climaco has served as a member of the Board of Directors for Digirad Corporation. Mr. Climaco has previously served as a board member for PDI, Inc. and as a board member for InfuSystem Holdings, Inc. From 2001 to 2007, he practiced law for the firm of Fabian and Clendenin, specializing in corporate and tax legal strategies for diverse clients across the U.S. and Europe, as well as joint venture, corporate and securities transactions. Mr. Climaco earned his B.A. in Philosophy from Middlebury College, Cum Laude, and holds a J.D. from the University of California Hasting College of the Law.

Moleculin Begins Clinical Testing Site Development Efforts in Poland – On August 3, 2017, the Company announced it had appointed Bioscience SA ("Bioscience"), a Polish contract research organization ("CRO") to begin identifying and preparing clinical testing sites in Poland for its drug Annamycin for the treatment of relapsed or refractory AML.
Planned Activities and Upcoming Potential Milestones

Anticipated Milestone Potential Timeframe
Announcement that our IND for Annamycin has become effective and that we may begin clinical trials September 2017
Initial IRB (Institutional Review Board) approvals and site initiations of various clinical sites participating in our Phase I/II clinical trial of Annamycin Second Half of 2017
Establishment of a new MTD for Annamycin First Half of 2018
A clinician sponsored IND for WP1066 for treatment of adult brain tumors moving forward Second Half of 2017
Announcement of Phase II data for Annamycin 2018
Announcement of further benefits of our sponsored research agreement with MD Anderson 2018

Unaudited Financial Results for the Quarter Ended June 30, 2017
Research and Development Expense. Research and development (R&D) expense was $0.5 million and $0.1 million for ((the three months ended June 30, 2017 and 2016, respectively. The increase of approximately $0.4 million mainly represents an increase of approximately: $0.1 million related to an increase in R&D headcount and associated headcount costs; $0.1 million for sponsored research and related expenses; and, approximately $0.2 million associated with developing and testing drug product as we prepare our IND for Annamycin and for the related clinical trials.

General and Administrative Expense. General and administrative expense was $0.8 million and $0.6 million for the three months ended June 30, 2017 and 2016, respectively. The expense increase of approximately $0.2 million was mainly attributable to the increase in headcount and associated payroll costs of $0.2 million, including roughly $0.1 (million of stock based compensation; and, approximately $0.1 million in legal, accounting, consulting, and other professional expenses. This was offset by a reduction in public listing expense of $0.3 million as we completed our IPO in Q2 2016.

Loss from Change in Fair Value of Warrant Liability. The Company recorded a net loss of $3.3 million in the second quarter of 2017 for the change in fair value on revaluation of its warrant liability associated with the warrants issued in conjunction with its stock offering in February 2017. The Company is required to revalue certain of its 2017 warrants at the end of each reporting period and reflect in the statement of operations a gain or loss from the change in fair value of the warrant in the period in which the change occurred. We calculate the fair value of the warrants outstanding using the Black-Scholes and Monte Carlo Simulation models. A gain results principally from a decline in the Company’s share price during the period and a loss results principally from an increase in the Company’s share price.

Gain from Expiration of Warrants. The Company recorded a gain in the second quarter of 2017 of $1.2 million related (to expiration of warrants issued as part of the February 2017 stock offering.

Interest expense. Interest expense included expense accrued on our convertible promissory notes issued in 2015 and 2016 bearing interest at the rate of 8% per annum. These convertible promissory notes were all converted into common stock during the second quarter of 2017.

Net Loss. The net loss for the three months ended June 30, 2017 was $2.3 million, which included non-cash income of $1.2 million related to a gain recognized on the expiration of warrants, which was offset by a non-cash expense of approximately $3.3 million on the change in fair value of the Company’s warrant liability. The net loss also included additional noncash charges for $0.1 million for stock based compensation and other stock based expenses.

Six Months Ended June 30, 2017 compared to six months ended June 30, 2016
Research and Development Expense. R&D expense was $1.2 million and $0.1 million for the six months ended June 30, 2017 and 2016, respectively. The increase of approximately $1.1 million mainly represents an increase of (approximately: $0.2 million related to an increase in R&D headcount and associated payroll costs; $0.2 million for sponsored research and related expenses; approximately $0.2 million associated with developing and testing drug product as we prepare for clinical trials; and, $0.5 million related to travel, legal, consultants, and other research costs associated in preparing our IND and Orphan Drug applications with the FDA.

General and Administrative Expense. General and administrative expense was $1.7 million and $0.9 million for the six months ended June 30, 2017 and 2016, respectively. The expense increase of approximately $0.7 million was mainly attributable to the increase in headcount and associated payroll costs of $0.5 million including roughly $0.2 million of stock based compensation; approximately $0.3 million in legal, accounting, consulting, and other professional expenses; approximately $0.1 million in insurance expense; and roughly $0.1 million in travel expenses. These costs were offset by a reduction in public listing expenses of $0.3 million.

Loss from Change in Fair Value of Warrant Liability. The Company recorded a net loss of $2.3 million in the six months ended June 30, 2017 for the change in fair value on revaluation of its warrant liability associated with the warrants issued in conjunction with its stock offering in February 2017. The Company is required to revalue certain of its 2017 warrants at the end of each reporting period and reflect in the statement of operations a gain or loss from the change in fair value of the warrant in the period in which the change occurred. We calculate the fair value of the (warrants outstanding using the Black-Scholes and Monte Carlo Simulation models. A gain results principally from a decline in the Company’s share price during the period and a loss results principally from an increase in the Company’s share price.

Gain from settlement of service. During the period, the Company settled a previously incurred expense utilizing shares of its common stock with an attributed value of $3 per share. The gain of roughly $0.2 million reflects the difference in the Company’s share price in the open market as of the settlement date and the $3 per share, and was recorded in the first quarter of 2017.

(Gain from Expiration of Warrants. The Company recorded a gain in the second quarter of $1.2 million related to expiration of warrants issued as part of the February 2017 stock offering.

Interest expense. Interest expense included expense accrued on our convertible promissory notes issued in 2015 and 2016 bearing interest at the rate of 8% per annum. These convertible promissory notes were all converted into common stock during the second quarter of 2017.

Net Loss. The net loss for the six months ended June 30, 2017 was $3.75 million which included non-cash expenses of approximately $2.6 million which included $2.3 million for change in fair value of warrants liability and $0.3 million for stock based compensation and depreciation.

Liquidity and Capital Resources. As of June 30, 2017, we had $9.3 million in cash and cash equivalents compared to $5.0 million at December 31, 2016. In February 2017, we completed a public offering of our common stock and warrants, pursuant to which we received approximately $4.5 million in net proceeds, after deducting underwriting discounts and commissions and estimated offering expenses. Additionally, through June 30, 2017, $3.2 million in cash was received from the exercise of warrants issued in our February public offering. Cash used in operations was $3.4 million for the period ending June 30, 2017. We believe that our existing cash and cash equivalents as of June 30, 2017 will be sufficient to fund our planned operations through the second quarter of 2018. Such plans are subject to change depending on clinical enrollment progress and use of drug product.

On August 14, 2017 Galectin Therapeutics Inc. (NASDAQ: GALT), the leading developer of therapeutics that target galectin proteins, reported financial results for the three months ended June 30, 2017 (Filing, 8-K, Galectin Therapeutics, AUG 14, 2017, View Source [SID1234520244]). These results are included in the Company’s Quarterly Report on Form 10-Q, which has been filed with the U.S. Securities and Exchange Commission and is available at www.sec.gov.

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"Our major program in treating patients with NASH cirrhosis with our galectin-3 inhibitor GR-MD-02 is progressing very well," said Peter G. Traber, M.D., president, chief executive officer and chief medical officer of Galectin Therapeutics. "The independent Data Safety Monitoring Board (DSMB) concluded its third review of the safety and conduct of our trial and we were lauded for both the manner in which this trial is being conducted as well as its safety profile. Over 99% of the doses have already been administered. The dropout rate remains well below expectations, which may increase the power of the trial. We currently expect approximately 151 subjects will complete the trial by September 2017, which is expected to give the study a power of over 95% to detect a difference if there is one. After completion of tests to determine the study endpoints and initial analysis of data, we are on track to report top line data in early December 2017."

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Summary of Key Development Programs and Updates

• As of August 11, 2017, 130 patients (80%) have completed all 52 weeks of infusions in the Company’s NASH-CX Phase 2b Clinical Trial. Approximately 99% of the entire study’s total number of infusions have been administered.

• Announced that in June, the DSMB concluded that, from a safety perspective, the Company’s NASH-CX trial should continue. As of the time of their evaluation, therapy had been completed in 68% of subjects in the NASH-CX trial. The feedback from the committee to the Company was positive, with the panel congratulating the company for a trial that has run very smoothly.

• Company remains on track to report top line data from the NASH-CX Phase 2b Clinical Trial in December 2017.

• Company is funded through January 2018, which is sufficient to report top line data of the NASH-CX Phase 2b Clinical Trial.

• Received notice of allowance for a U.S. Patent for "Galacto-Rhamnogalacturonate compositions for the treatment of a number of diseases associated with elevated inducible nitric oxide synthase" (iNOS). The patent’s principal claims cover method of use for GR-MD-02 in a broad category of diseases in which there is an inflammatory response characterized by an increase in the enzyme iNOS.

•
Issued U.S. Patent 9,649,327 for "Composition of Novel Carbohydrate Drug for Treatment of Human Diseases." The patent’s principal claims cover method of use for GR-MD-02 in patients with an autoimmune disease. The breadth of coverage for the patent portfolio includes; various types of organ fibrosis (liver,

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lung, kidney), non-alcoholic steatohepatitis, kidney disease, and cancer, including combination cancer immunotherapy. This method of use patent protects the use of GR-MD-02 in the general category of autoimmune disease, which covers multiple types of human diseases and strengthens our other patents.

• In partnership with the Providence Cancer Center, progressed our combination cancer immunotherapy program. The Phase 1b clinical trial that combines GR-MD-02 with pembrolizumab (KEYTRUDA) continues to enroll patients and recently completed the second cohort, which used 4 mg/kg GR-MD-02. The third cohort, which will start 85 days following the final patient enrollment in the second cohort, will enroll 10 patients at a dose of 8 mg/kg GR-MD-02. There will likely be additional data reported in early 2018.

• As of June 2017, completed the 24-week Phase 1 study in three patients with severe atopic dermatitis, with the last 12 weeks at the increased dose of 12 mg/kg. All three patients had approximately 50% improvement in their atopic dermatitis disease scores, with no increased improvement at the higher dose.

• Launched the Liver Line, an online community and publication on liver health and liver disease, which has already had 95,000 readers.
Management Commentary
"Many NASH trials are focused on NASH Stages I, II, and III, while our NASH-CX trial is focused on NASH cirrhosis (Stage IV), the only stage of NASH where it is believed an effective treatment can halt the progression of, or reverse, existing fibrosis. This would represent a breakthrough therapeutic intervention that may prevent complications, alleviate the need for liver transplant, and even save lives. We are pleased that our Phase 2b trial in NASH cirrhosis is fully enrolled as there

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are other NASH clinical trials that have reported challenges meeting their original enrollment goals. Some trials have even had to modify the veracity of their clinical endpoints, all of which makes the imminent reporting of our top line results in December that much more important. It is also reassuring to hear the independent DSMB laud our CX trial for the safe, consistent and efficient manner in which it is being conducted. This trial was designed, and is being conducted, with a primary endpoint that the U.S. Food and Drug Administration views may be a surrogate for outcomes for registration trials in this patient population."
"In this past quarter, we have received new patents that have extended the intellectual property protection of GR-MD-02 into multiple potential disease indications. For instance, we recently received a patent extending claims to a wide-range of diseases with an inflammatory response and another patent for the use of GR-MD-02 in patients with an autoimmune disease. The breadth of coverage for the patent portfolio includes; various types of organ fibrosis (liver, lung, kidney), non-alcoholic steatohepatitis, kidney disease, and cancer, including combination cancer immunotherapy. In particular, our combination cancer immunotherapy method of use patent protects the use of GR-MD-02 in the general category of autoimmune disease which covers multiple types of human diseases and strengthens our other patents. Galectin Therapeutics has additional patent applications pending, both domestically in the United States, as well as in a number of international markets."
"Liver Line is a central, online gathering place we have built for patients, medical professionals and researchers to learn about the latest developments in liver health and the treatment of diseases such as non-alcoholic steatohepatitis (NASH), liver fibrosis, and cirrhosis. This online community is an educational effort to ensure

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important stakeholders in drug development and research in NASH have access to the most up to date information. Most people don’t realize liver health is as important as heart health, and informing primary-care physicians is key, as they are on the front lines of liver health. Since its launch in May, Liver Line has reached over 95,000 readers and was featured as a model campaign to raise awareness of liver disease in The Wall Street Journal."
"While our main focus continues to be on the NASH-CX trial, we are also supporting parallel trials in skin disease and cancer where we have evidence that GR-MD-02 could have a therapeutic effect. Many organizations throughout the pharmaceutical industry have taken notice and informally shown interest in our trails. Our team is dedicated to demonstrating the value of our proprietary molecule, GR-MD-02, and will continue to conduct our trials, while also exploring additional uses that have the potential to enlarge our growth prospects."
Financial Results
For the three months ended June 30, 2017, the Company reported a net loss applicable to common stockholders of $4.8 million, or $0.14 per share, compared with a net loss applicable to common stockholders of $5.8 million, or $0.20 per share, for the three months ended June 30, 2016. The decrease is largely due to lower research and development expenses primarily related to pre-clinical and drug manufacturing and to lower stock compensation expenses.
Research and development expense for the three months ended June 30, 2017 was $3.4 million, compared with $4.2 million for the three months ended June 30, 2016. The decrease primarily relates lower research and development expenses primarily related to pre-clinical and drug manufacturing.

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General and administrative expense for quarter was $1.0 million, compared with $1.3 million for the prior year, with the decrease being primarily related to lower investor relations and non-cash stock compensation expenses.
As of June 30, 2017, the Company had $9.1 million of non-restricted cash and cash equivalents. The Company believes it has sufficient cash to fund currently planned operations and research and development activities through December 31, 2017.

On August 14, 2017 Fate Therapeutics, Inc. (NASDAQ: FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the second quarter ended June 30, 2017 (Filing, 8-K, Fate Therapeutics, AUG 14, 2017, View Source [SID1234520243]).

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"Clinical momentum across our first-in-class cellular immunotherapy programs continues to accelerate. The first subject was treated with FATE-NK100 in VOYAGE for AML, and we look forward to opening two additional clinical trials of FATE-NK100 for the treatment of multiple advanced solid tumor types including in combination with monoclonal antibody therapy," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "Our productive discussions with the FDA continue regarding the advancement of our proprietary iPSC-derived cancer immunotherapy pipeline toward first-in-human studies. We currently remain on-track to file, in the first quarter of 2018, an investigational new drug application with the FDA for FT500i, a first-of-kind natural killer cell product candidate derived from a master pluripotent cell line. We are also prepared to initiate enrollment in the Phase 2 efficacy stage of PROTECT next month. Six subjects received ProTmune and we have convened the study’s data monitoring committee to review the Phase 1 data."

Recent Highlights & Program Updates

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Convened PROTECT Data Monitoring Committee for ProTmune Phase 1 Review. The first six subjects in the Phase 1 safety stage of PROTECT received ProTmune, the Company’s next-generation cell graft for the prevention of acute graft-versus-host disease. The Company has convened the study’s data monitoring committee to seek its recommendation regarding the initiation of the Phase 2 efficacy stage. Following the committee’s Phase 1 data review, Fate Therapeutics plans to begin enrolling the randomized, controlled and blinded Phase 2 efficacy stage of PROTECT in adult subjects with hematologic malignancies undergoing matched unrelated donor transplant during the third quarter of 2017.

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First Subject Treated with FATE-NK100 in VOYAGE for AML. The Company’s first-in-class adaptive memory natural killer (NK) cell product candidate, FATE-NK100, was administered to the first subject in VOYAGE, an open-label dose-escalation clinical trial for the treatment of refractory or relapsed acute myelogenous leukemia (AML). VOYAGE is evaluating the safety and the in vivo persistence at Day 7 and Day 14 of a single intravenous infusion of FATE-NK100. The anti-tumor activity of FATE-NK100 as measured by rates of complete response at 42 days post-infusion and clearance of minimal residual disease is also being assessed.

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IND Cleared by FDA for FATE-NK100 in Ovarian Cancer. The U.S. Food and Drug Administration (FDA) cleared an Investigational New Drug (IND) application of FATE-NK100 for the treatment of women with ovarian cancer resistant to, or recurrent on, platinum-based treatment. The study is designed to evaluate the safety and determine the maximum dose of a single infusion of FATE-NK100 when administered directly into the peritoneum in an outpatient setting. Intraperitoneal delivery of NK cells is a novel strategy intended to promote co-localization with tumor cells and maximize NK cell persistence. Other study endpoints include objective response rate at 28 days post-infusion and progression-free and overall survival.

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IND Cleared by FDA for FATE-NK100 in Advanced Solid Tumors. In May 2017, the FDA cleared the Company’s IND application for the clinical investigation of FATE-NK100, including in combination with monoclonal antibody therapy, in subjects with advanced solid tumor malignancies. The Company is preparing to enroll the DIMENSION study, which is designed to evaluate the safety and anti-tumor activity of FATE-NK100 in the outpatient setting across three treatment arms: as monotherapy for small cell lung cancer and hepatocellular carcinoma; in combination with trastuzumab for advanced HER2+ breast and gastric cancers; and in combination with cetuximab for advanced EGFR1+ colorectal and head and neck cancers.

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Showcased First-of-Kind NK Cell Cancer Immunotherapy Pipeline at 2017 ISSCR. In June 2017, Fate Therapeutics, along with its collaborators, presented new preclinical data on the Company’s proprietary induced pluripotent stem cell (iPSC) platform and its iPSC-derived cancer immunotherapy candidates at the 2017 Annual Meeting of the International Society for Stem Cell Research (ISSCR). The Company expects to file an IND with the FDA during the first quarter of 2018 for FT500i, a first-of-kind iPSC-derived NK cell product candidate for the treatment of advanced solid tumors including in combination with checkpoint inhibitors. The session also featured the Company’s second iPSC-derived NK cell product candidate FT516i, which is derived from a master engineered pluripotent cell line expressing a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor.

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Extended Cash Runway through Loan Amendment. In July 2017, Fate Therapeutics amended its loan agreement with Silicon Valley Bank pursuant to which the Company repaid its existing debt obligations in full and entered into a new $15.0 million term loan. Cash proceeds to the Company after repayment of its existing debt obligations were $7.5 million. Under the new term loan, only payments of interest are owed through January 1, 2019, after which time the Company will repay principal plus interest in 30 monthly installments.

Second Quarter 2017 Financial Results

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Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of June 30, 2017 were $71.0 million compared to $92.1 million as of December 31, 2016. The decrease was primarily driven by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank. This balance as of June 30, 2017 did not include $7.5 million in cash proceeds received by the Company in July 2017 in connection with the amendment of its loan agreement with Silicon Valley Bank.

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Total Revenue: Revenue was $1.0 million for the second quarter of 2017 and as well as for the comparable period in 2016. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.

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Total Operating Expenses: Total operating expenses were $10.6 million for the second quarter of 2017 compared to $9.0 million for the comparable period in 2016. Operating expenses for the second quarter of 2017 included $1.0 million of stock compensation expense, compared to $0.8 million for the comparable period in 2016.

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R&D Expenses: Research and development expenses were $7.9 million for the second quarter of 2017 compared to $6.8 million for the comparable period in 2016. The increase in R&D expenses was primarily related to an increase in third-party service provider fees to support the clinical development of ProTmune and FATE-NK100 and the preclinical advancement of the Company’s off-the-shelf iPSC-derived cellular immunotherapy programs, and in facilities costs associated with the expansion of the Company’s laboratory space.

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G&A Expenses: General and administrative expenses were $2.7 million for the second quarter of 2017 compared to $2.2 million for the comparable period in 2016. The increase in G&A expenses was primarily related to an increase in intellectual property-related expenses.

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Shares Outstanding: Common shares outstanding as of June 30, 2017 and December 31, 2016 were 41.4 million. Preferred shares outstanding as of June 30, 2017 and December 31, 2016 were 2.82 million, each of which is convertible into five shares of common stock. All preferred shares outstanding are from the Company’s sale and issuance of non-voting Class A convertible preferred stock to Redmile Group, LLC in November 2016.

On August 14, 2017 ImmunoCellular Therapeutics, Ltd. ("ImmunoCellular") (NYSE MKT: IMUC) reported financial results for the second quarter 2017 (Press release, ImmunoCellular Therapeutics, AUG 14, 2017, View Source [SID1234520235]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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For the quarter ended June 30, 2017, ImmunoCellular incurred a net loss of $3.6 million, or $1.02 per basic and diluted share, compared to a net loss of $5.3 million, or $2.30 per basic and diluted share, for the quarter ended June 30, 2016.

For the quarter ended June 30, 2017, research and development expenses were $10.4 million compared to $4.4 million during the quarter ended June 30, 2016. The increase reflects additional patients enrolled in the Company’s phase 3 trial of ICT-107. The Company suspended this trial in June, and wrote off approximately $2.3 million of trial-related supplies and accrued approximately $3 million of expenses to wind down the trial.

During the quarter ended June 30, 2017, ImmunoCellular also recorded a credit of $7.7 million to account for the forgiveness of debt related to the CIRM award. This represents $5.5 million of funds advanced by CIRM for the phase 3 ICT-107 trial and the reversal of $2.2 million of accrued interest.

For the six months ended June 30, 2017, the Company incurred a net loss of $9.4 million, or $2.66 per basic and dilution share, compared to a loss of $11.0 million, or $4.76 per basic and diluted share during the same period in the prior year.

For the six months ended June 30, 2017, research and development expenses were $15.0 million compared to $9.2 million during the six months ended June 30, 2016. The increase reflects additional patients enrolled in the Company’s phase 3 trial of ICT-107 and the write-off of $2.3 million of trial related supplies and the accrual of approximately $3.0 million of expenses to wind down the trial.

The Company used $9.5 million of cash in operations for the six months ended June 30, 2017, compared to $11.2 million for the six months ended June 30, 2016. During the six months ended June 30, 2017, the Company reduced its vendor payments to conserve cash. As a result, accounts payable increased by $2.8 million. With the termination of the phase 3 trial of ICT-107, the Company expects future cash needs will decrease.

During the six months ended June 30, 2017, the Company incurred $3.6 million of non-cash expenses consisting of $30,000 of depreciation and $300,000 of stock based compensation and $2.4 million write-off of trial related supplies and $900,000 of accrued interest on the CIRM award. The Company also recorded non-cash credits of $8.3 million consisting of $7.7 million forgiveness of debt and $550,000 related to the revaluation of warrant derivatives. During the six months ended June 30, 2016, the Company incurred $1.1 million of non-cash expenses consisting of $500,000 of accrued interest on the CIRM award, $40,000 of depreciation, $30,000 of financing expenses and $500,000 of stock based compensation. The Company also recorded a non-cash credit of $900,000 related to the revaluation of warrant derivatives. As of June 30, 2017, the Company had $1.8 million of cash and 3.6 million shares of common stock issued and outstanding.

During the second quarter, the Company announced the wind down of the phase 3 registration trial of ICT-107 in newly diagnosed glioblastoma, while also seeking collaborative relationships relative to its pipeline of clinical-stage dendritic cell-based programs. The Company is focusing on financing and strategic alternatives for its immuno-oncology research and development pipeline and technology platform, which may include a potential merger, consolidation, reorganization or other business combination, as well as the sale of the Company or the Company’s assets.

As previously disclosed, in June, ImmunoCellular received a Deficiency Letter indicating that the Company is not in compliance with the stockholder’s equity requirement of the NYSE MKT Company Guide. As required, the Company submitted a plan to the NYSE MKT advising of actions it plans to undertake, to regain compliance with the continued listing standards by December 23, 2018. The Company is awaiting response from the NYSE MKT to its plan, elements of which included financing and restructuring of operations. If the Company’s plan is not accepted or if the Company fails to regain compliance by December 23, 2018, the NYSE MKT may commence delisting procedures.

In July 2017, ImmunoCellular completed the first tranche of a financing that provided $5 million in gross proceeds from the sale of convertible preferred stock, with the potential to secure an additional $9 million in funding from the exercise of warrants in the financing transaction over the next 12 months. Any additional proceeds in excess of the initial $5 million are dependent on the exercise of the warrants. Proceeds from the financing are being used to move forward with a restructuring plan focused on winding down ICT-107 activities and advancing early-stage research programs while continuing to seek partnership opportunities for development-stage assets.