On August 15, 2017 Xenetic Biosciences, Inc. (NASDAQ: XBIO) ("Xenetic" or the "Company"), a clinical-stage biopharmaceutical company focused on the discovery, research and development of next-generation biologic drugs and novel orphan oncology therapeutics, reported its unaudited financial results for the quarter ended June 30, 2017 (Press release, Xenetic Biosciences, AUG 15, 2017, View Source [SID1234537805]).

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Xenetic also provided an update to its corporate progress as well as clinical and regulatory status and anticipated milestones for the Company’s lead product candidate, XBIO-101 (sodium cridanimod), a small-molecule immunomodulator and interferon inducer which, in preliminary studies, has been shown to increase progesterone receptor ("PrR") expression in endometrial tumor tissue, and an update on its proprietary PolyXen platform technology.

"The second quarter was marked by the advancement of our flagship program, XBIO-101, into our Phase 2 program for the treatment of endometrial cancer, along with the important data we received from Shire’s Phase 1/2 study of SHP656, which utilized our PolyXen platform technology. While this study did not meet its primary endpoint and Shire has subsequently stated the program has been discontinued, key findings from the study specific to our PolyXen platform technology, provide further validation that it has the potential to improve the clinical utility of protein and peptide drugs," stated M. Scott Maguire, Xenetic’s CEO.

XBIO-101 Program Update

In the second quarter of 2017, the Company commenced patient enrollment for its Phase 2 clinical study of XBIO-101 in conjunction with progestin therapy for the treatment of endometrial cancer. The study targets a population of patients who have either failed progestin monotherapy or who have been identified as having progesterone receptor negative ("PrR-") tumors.

The primary objective of the open-label, multi-center, single-arm, two-period Phase 2 study is to assess the antitumor activity of XBIO-101 in conjunction with progestin therapy as measured by Overall Disease Control Rate in women with recurrent or persistent endometrial carcinoma not amenable to surgical treatment or radiotherapy who have either failed progestin monotherapy or who have been identified as PrR-. Secondary objectives include assessments of efficacy and safety/tolerability parameters.

The study is expected to enroll up to 72 women with recurrent or persistent endometrial cancer not amenable to surgical treatment or radiotherapy but suitable to be treated with progestins. All subjects determined to be PrR- at screening, as well as those subjects who experience disease progression after at least 4 weeks of progestin monotherapy, will receive XBIO-101 in combination with continued progestin treatment. Subjects will receive treatment until disease progression as defined according to RECIST 1.1 criteria.

Xenetic has also filed a protocol under its existing Investigational New Drug application to expand the development of XBIO-101 into a biomarker study related to the treatment of triple negative breast cancer.

Expected Upcoming Milestones

Commence patient dosing in the Phase 2 clinical study evaluating XBIO-101 in conjunction with progestin therapy for the treatment of progestin resistant endometrial cancer in Q3 2017; and
Announce interim data from Phase 2 study before the end of 2018.
PolyXen Platform Technology Update

In May 2017, the Company, along with its strategic collaborator, Shire plc (LSE: SHP, NASDAQ: SHPG), announced data from Shire’s Phase 1/2 program of SHP656, its PSA-Recombinant Factor VIII ("rFVIII"), which was being developed as a long-acting therapeutic for the treatment of hemophilia A, utilizing Xenetic’s PolyXen platform technology to conjugate polysialic acid to therapeutic blood-clotting factors. Despite not achieving the principal objective of once-weekly dosing in this Phase 1/2 study, the Company’s PolyXen technology demonstrated that it works as a platform to successfully extend the circulating half-life of rFVIII with no drug-related serious adverse events reported to date. Including the Company’s own studies with a polysialylated erythropoietin ("PSA-EPO", "ErepoXen") candidate, this is the second instance in which PolyXen platform technology has been demonstrated, in a human clinical trial setting, to confer extended half-life to a biotherapeutic, while maintaining pharmacological activity and a favorable safety and tolerability profile. Moving forward, Xenetic believes data from Shire’s SHP656 program, although discontinued, continues to support the broad utility of its proprietary PolyXen technology platform, and expects the growing body of data from this platform will enable the Company to build a pipeline of partnerships utilizing this proven technology.

Expected Next Steps

Pursue business development activities to identify target molecules to explore partnerships utilizing PolyXen delivery platform; and
Explore other potential applications of the PolyXen platform technology within the Shire portfolio.
"We remain focused on driving forward with our strategy, including the continued advancement of our lead product candidate XBIO-101, as well as leveraging our proprietary PolyXen platform technology with the goal of building shareholder value in both the near and long-term," concluded Mr. Maguire.

Summary of Financial Results for Second Quarter 2017

Net loss for the three months ended June 30, 2017, was $2.9 million compared to a net loss of approximately $47.8 million for the same period in 2016. The decrease in net loss was primarily due to a decrease of in-process research and development expense, as well as a decrease in share-based compensation expense related to warrants previously issued in 2016. These decreases were offset by an increase in general operating costs and costs related to the initiation of our XBIO-101 Phase 2 clinical study.

The Company ended the quarter with approximately $2.3 million of cash.