FORWARD-LOOKING STATEMENT NOTICE
This Form 10-Q contains certain forward-looking statements. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.
Description of Business
Targeted Conditioning
To the best of our knowledge, we are advancing the only multi-target, multi-indication, clinical-stage pipeline for targeted conditioning and the only ARC-based targeted conditioning regimens in development. Our ARCs for targeted conditioning are intended to potentially enable improved access and outcomes to cell-based therapies with curative potential, including BMT, ACT, and gene therapy Conditioning in the context of BMT, ACT or gene therapy is the act of depleting certain blood and immune-forming cells, including bone marrow stem cells and, in some cases, cancer cells prior to transplanting new cells into a patient. Currently, conditioning is accomplished using a combination of cytotoxic chemotherapeutic agents and external radiation. These non-targeted conditioning regimens are highly toxic and may prevent a patient from receiving a potentially curative therapy and hinder outcomes. ARCs have the potential to increase patient access and outcomes by way of their ability to selectively deplete targeted cells while sparing normal healthy cells, resulting in potentially lower systemic and off-target toxicities. We use our ARCs both at high isotope dose levels to achieve myeloablation, which fully depletes bone marrow stem cells and at lower isotope dose levels to achieve lymphodepletion, which spares bone marrow stem cells from depletion. In addition, dosing may be titrated downward from myeloablative doses to achieve partial myeloablation, which may be appropriate for certain gene therapy programs.
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CD45 Targeted Conditioning Program
Our CD45 ARC is comprised of the anti-CD45 monoclonal antibody known as
apamistamab (formerly BC8) and the radioisotope Iodine-131 ("
Our lead CD45 targeted conditioning product candidate is Iomab-B, which uses
high doses of
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Data from the first 113 patients enrolled in the SIERRA trial, which represents
75% of the total of 150 patients that were enrolled in the trial, was presented
in oral presentations at the
Data from SIERRA trial has been accepted for presentation at the
Our Iomab-ACT program is intended for targeted conditioning prior to ACT or gene
therapy and uses the same
We believe our Iomab-ACT program is highly differentiated when compared to Fludarabine and Cyclophosphamide ("Flu/Cy") or other chemotherapy-based regimens that are used as the standard of practice today for lymphodepletion prior to CAR-T. CD45 is an antigen expressed on certain immune cell types that are relevant to the mechanism of CAR-T therapies including lymphocytes, regulatory T-cells and macrophages that have been associated with clinical responses that may limit the safety, efficacy and durability of response of these CAR-T therapies including cytokine release syndrome ("CRS") and neurotoxicity. Some of these limitations may be attributable to the chemotherapy-based conditioning agents that are being used prior to CAR-T therapies. Preclinical data supporting the rational for our Iomab-ACT program was presented at multiple medical conferences in 2019. Unlike chemotherapy, Iomab-ACT is targeted in nature and, due to this CD45-directed targeting, we expect we can improve CAR-T cell expansion, potentially resulting in responses that are more durable, but also resulting in reduced CAR-T related toxicities. Importantly, we expect the Iomab-ACT program construct to enable lymphodepletion through a single-dose, outpatient administration versus Flu/Cy or other chemotherapy-based lymphodepletion regimens that can require multiple infusion cycles over several days. Because of this potentially superior profile, the Iomab-ACT construct could result in improved access to CAR-T therapy and better outcomes.
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We are studying Iomab-ACT in a clinical collaboration with
In addition, we are working in collaboration with the
We are also exploring an Ac-225-based CD45 ARC, as a potential next-generation targeted conditioning agent. Dosimetry results with this Ac-225-based alpha emitting ARC showed selective accumulation in immune cell target organs such as bone marrow, spleen, and liver with the potential for lower exposure to non-target tissues from longer path length beta emitter radioisotopes like Iodine-131 and Lutetium-177 ("Lu-177"). Preclinical data demonstrated that conditioning with this Ac-225-based CD45-targeting agent result in depletion of peripheral immune cells and hematopoietic progenitor cells, thereby enabling engraftment of donor cells. A dose dependent response was observed with low doses depleting white blood cells without affecting hematopoietic progenitor cells, representing a lymphodepletive dose that is relevant for adoptive cell therapies such as CAR-T, while higher doses eliminated peripheral immune cells and hematopoietic progenitor cells, which is applicable to ex vivo gene therapies and BMT.
CD33 Program: Combinations and Therapeutics
Our CD33 program is evaluating the clinical utility of Actimab-A, an ARC
comprised of the anti-CD33 mAb lintuzumab linked to the potent alpha-emitting
radioisotope Actinium-225 ("Ac-225"). CD33 is expressed in the majority of
patients with AML and myelodysplastic syndrome ("MDS") as well as approximately
one-third of patients with multiple myeloma. Ac-225 emits four alpha particles
and can kill a cell with one alpha-particle hit, making it one of the most
powerful cell-killing agents with no know resistance mechanism to the double
strand DNA breaks it can cause. We source Ac-225 from the
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Our CD33 development program is driven by data obtained from nearly one hundred fifty treated patients, including results from a Phase 1/2 trial that was conducted in 58 patients with newly diagnosed AML, which was completed in 2018. This clinical data, as well as our experience with Iomab-B, is shaping a two-pronged approach with our CD33 program, where at high doses we are exploring its use for targeted conditioning and at low doses we are exploring its use for therapeutic combinations with other treatment modalities.
We believe that radiation via an ARC can be synergistic when used in combination with chemotherapy, targeted agents and immunotherapy based on mechanistic rationales supported by our own clinical data, preclinical research and scientific and clinical evidence in the literature. We have prioritized our efforts and resources in favor of combination trials for our CD33 program development strategy rather than single agent trials at this time as we believe Actimab-A can be a backbone therapy in AML when combined with other therapeutic modalities. Our CD33 ARC development program encompasses the following ongoing trials:
Combination Trials: ? Phase 1 investigator initiated Actimab-A + CLAG-M combination trial with the salvage chemotherapy regimen CLAG-M (cladribine, cytarabine, filgrastim and mitoxantrone) for fit patients age 18 and above with relapsed or refractory AML at theMedical College of Wisconsin ("MCW"). The combination of Actimab-A + CLAG-M is supported by mechanistic rationale for combining inhibitors of DNA replication and/or repair processes such as mitoxantrone, a topoisomerase-II inhibitor, and radiation, as imparted by tumor-targeting of Ac-225 with Actimab-A. Thus far, we have reported preliminary data from dose cohorts one, two and the third and planned final dose cohort of 0.75 µCi/kg of Actimab-A. At the 2020American Society of Hematology Annual Meeting, it was reported that 100% of patients (3/3) receiving 0.75 µCi/kg of Actimab-A, and CLAG-M achieved a complete remission, which is nearly 85% greater than the 55% remission rate observed in a study of CLAG-M alone conducted at MCW in the same r/r AML patient population. Complete Remission or Complete Remission with Incomplete blood count recovery ("CRi") were observed in all dose cohorts (0.25, 0.50 and 0.75 µCi/kg) with 67% of patients (10/15) achieving CR or CRi. The 0.25 and 0.50 µCi/kg doses of Actimab-A have been shown to be subtherapeutic as a single agent. Of the 10 patients achieving CR or Cri, 70% achieved negative minimal residual disease ("MRD") status with no detectable disease via flow cytometry, indicating that these are deep remissions. No dose-limiting toxicities ("DLTs") were reported in the third dose cohort of 0.75 µCi/kg and therefore maximum tolerable dose ("MTD") was not reached. As a result, MCW amended the study protocol to allow for continued dose escalation and the trial is now enrolling patients at a dose of 1.0 µCi/kg. Upon completion of this Phase 1 trial, we will work to develop a regulatory and development pathway that can potentially support a registration for the Actimab-A + CLAG-M combination. In addition, the Actimab-A + CLAG-M combination study has provided proof of principle that the addition of subtherapeutic doses of Actimab-A to other AML therapies can lead to well-tolerated regimens with improved responses. InNovember 2021 , we announced that we completed enrollment of the fourth and planned final dose cohort in this Phase 1 dose escalation study and that we will present data from this trial including additional patients from the fourth dose cohort of 1.0 µCi/kg of Actimab-A at ASH inDecember 2021 . ? Phase 1/2 Actimab-A + Ven combination trial with the BCL-2 inhibitor Venetoclax ("ven") for fit and unfit patients age 18 and above with relapsed or refractory AML. This multi-center trial is being led byUCLA Medical Center . This combination is supported by mechanistic evidence in preclinical studies using ven-resistant AML tumor cell lines. In these models, we have demonstrated that Actimab-A can deplete Mcl-1 and Bcl-XL, two proteins implicated in mediating resistance to venetoclax, in addition to causing potentially lethal double-stranded DNA breaks in these CD33 expressing cells. Furthermore, in vivo studies in animal models of ven-resistant AML demonstrated robust tumor regression and improved survival in cohorts receiving the Actimab-A ven combination compared to ven alone. The rationale for this clinical study is that the addition of Actimab-A will; 1) have a direct anti-tumor effect via double-stranded DNA breaks and 2) deplete Mcl-1 and BCL-XL making the AML cells more susceptible to ven. At the 2020 ASH annual meeting, data from the first dose cohort of 0.50 µCi/kg Actimab-A in combination with ven were presented. There was a 67% overall response rate (2/3 patients), including one CR and one partial response ("PR") with blast count reduction of 50%. All 3 patients were poor risk with adverse cytogenetics and each patient had an additional high-risk marker (FLT3-ITD+, antecedent JAK2+ myelofibrosis, or TP53 mutation). The patient achieving a CR was in second relapse and a TP53 mutation as well as multiple other high-risk markers. The trial is now active and recruiting at 4 trial sites in dose escalation cohorts. We will present data from additional dose cohorts of 0.75 and 1.0 µCi/kg of Actimab-A from the Phase 1 portion of this novel combination study at ASH inDecember 2021 . 20
In addition to these active trials, we actively seek and evaluate additional
modalities and agents that can be the basis for Actimab-A therapeutic
combinations such as the CD47 combinations we announced in
CD47 Based ARC Combinations in Solid Tumors and Blood Cancers
CD47 is a macrophage checkpoint that is upregulated in multiple cancers
including blood cancers such as AML and MDS as well as solid tumors. CD47 acts
as a "don't eat me" signal on cancer cells to suppress phagocytosis and evade
detection and destruction by the immune system. It has become an immunotherapy
target of significant interest with multiple biopharmaceutical companies
actively developing CD47 targeting agents across a wide range of oncology and
hematology indications. CD47 targeting agents have shown limited efficacy as
single agent monotherapies in AML/MDS or solid tumors, which has led to
combinations such as with hypomethylating agents in AML/MDS. We hypothesized
that targeted radiotherapy via ARCs could synergize with CD47 targeting agents
via the direct cytotoxic and immunogenic effect of ARCs without overlapping
toxicities. To explore this synergy and the potential to improve patient
outcomes and we have initiated a program in AML with our Actimab-A ARC,
consistent with our strategy to establish Actimab-A a backbone AML therapy, and
in solid tumors with a HER-2 targeting ARC, which emanated from our AWE
technology platform. To our knowledge, these are the first and only ARC-based
targeted radiotherapy combinations with CD47 immunotherapy. Data from these
novel combinations were presented at the 36th Annual Meeting of the
The most advanced CD47 development programs are being studied in patients with AML and MDS. Leveraging our clinical experience with Actimab-A in these indications we have begun studying Actimab-A with the anti-CD47 antibody immunotherapy magrolimab, which is owned by Gilead Sciences, Inc., in preclinical models of AML. In preclinical models, it was shown that in multiple AML cell lines, the combination of Actimab-A with magrolimab led to increased phagocytosis of AML cells compared to magrolimab alone. Our studies also demonstrated that AML cell lines exposed to Actimab-A had an upregulation of calreticulin, which is a pro-phagocytic or "eat me" signal, which we hypothesize makes Actimab-A potentially synergistic with magrolimab and other anti-CD47 antibodies. The Actimab-A and magrolimab combination showed a significant increase in survival compared to Actimab-A alone in a disseminated AML animal tumor model. We intend to continue to study preclinically this combination with the goal of advancing to human clinical trials.
In addition, we are studying an anti-HER2 ARC using the antibody Trastuzumab
with either Ac-225 or Lu-177 radioisotopes, which was developed using our AWE
technology platform, in combination with magrolimab in solid tumor preclinical
models. Anti-CD47 monotherapies have not shown meaningful responses in clinical
studies of solid tumors. We hypothesized that an ARC would upregulate
calreticulin, a pro-phagocytic "eat me" signal that when combined with an
anti-CD47 blockade therapy would enhance antitumor activity. Data from this
combination was presented at the 36th Annual Meeting of the
Antibody Warhead Enabling Technology Platform
Our proprietary AWE technology platform is supported by intellectual property,
know-how and trade secrets that cover the generation, development, methods of
use and manufacture of ARCs and certain of their components. Our AWE technology
patent portfolio presently includes 38 patent families comprised of 168 issued
patents and pending patent applications, of which 8 are issued and 31 are
pending in
We have enhanced our research and development capabilities around AWE by securing and staffing research facilities. Our research laboratories are focused on applying our AWE technology platform to the development of radiation conjugates and to execute on research collaborations. Our R&D efforts employ a multidisciplinary approach leveraging our team's knowledge and experience in cancer cell biology, radiochemistry, radiation sciences, immunology and oncology drug development. We intend to focus on generating ARCs using our existing intellectual property, evaluating assets for in-licensing to complement our existing clinical pipeline and securing collaborations and partnerships with biopharmaceutical companies. By adding research and development capabilities to our clinical development and clinical supply chain capabilities, we seek to enable the rapid translation of radiotherapies. We have formed a wholly owned research subsidiary for the purposes of advancing certain of our R&D objectives.
Our AWE technology platform is being utilized in our ongoing research collaboration with Astellas to arm select targeting agents owned by Astellas with the alpha-emitting radioisotope Ac-225 for the development of theranostics for solid tumor indications, which combine the ability of radioisotopes to be used for both diagnostic and therapeutic purposes.
21 Recent Developments Impact of COVID-19 Pandemic
The global health crisis caused by the novel coronavirus COVID-19 pandemic and its resurgences has and may continue to negatively impact global economic activity, which, despite progress in vaccination efforts, remains uncertain and cannot be predicted with confidence. In addition, the Delta variant of COVID-19, which appears to be the most transmissible variant to date, has spread globally. The full impact of the Delta variant cannot be predicted at this time, and could depend on numerous factors, including vaccination rates among the population, the effectiveness of COVID-19 vaccines against the Delta variant and the response by governmental bodies and regulators. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID-19 pandemic on our business.
Many countries around the world have continued to impose quarantines and restrictions on travel and mass gatherings to slow the spread of the virus. Accordingly, our ability to continue to operate our business may also be limited. Such events may result in a period of business, supply and drug product manufacturing disruption, and in reduced operations, any of which could materially affect our business, financial condition and results of operations. In response to COVID-19, we implemented remote working and thus far have not experienced a significant disruption or delay in our operations as it relates to the clinical development of our drug candidates. Such government-imposed precautionary measures may have been relaxed in certain countries or states, but there is no assurance that more strict measures will be put in place again due to a resurgence in COVID-19 cases, including those involving new variants of the coronavirus, which may be more contagious and deadly than prior strains. Therefore, the COVID-19 pandemic may continue to affect our operation, may further divert the attention and efforts of the medical community to coping with COVID-19 and disrupt the marketplace in which we operate and may have a material adverse effect on our operations.
A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.
The Phase 3 SIERRA trial for our lead program, Iomab-B, remained active at a
majority of our clinical trial sites, with investigators providing feedback that
recruitment and enrollment would remain active because of the acute nature of
the disease, the high unmet needs of patients with relapsed or refractory AML,
the potentially curative nature of BMT and the differentiated profile of
Iomab-B. Certain Phase 3 SIERRA trial sites that had not been actively enrolling
due to COVID-19 at the initial outbreak of the pandemic resumed recruitment and
enrollment in mid-2020, and we completed patient recruitment in
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Additionally, COVID-19 may result in delays in receiving approvals from local and foreign regulatory authorities, delays in necessary interactions with IRB's or Institutional Review Boards, local and foreign regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees.
To date, COVID-19 has not had a financial impact on our company. We continue to monitor the impacts of COVID-19 on the global economy and on our business operations. Although we expect that vaccinations for COVID-19 will continue to improve conditions, the ultimate impact from COVID-19 on our business operations and financial results during 2021 will depend on, among other things, the ultimate severity and scope of the pandemic, including the new variants of the virus, the pace at which governmental and private travel restrictions and public concerns about public gatherings will ease, the rate at which historically large increases in unemployment rates will decrease, if at all, and whether, and the speed with which the economy recovers. We are not able to fully quantify the impact that these factors will have on our financial results during 2021 and beyond.
Results of Operations - Three Months Ended
The following table sets forth, for the periods indicated, data derived from our statements of operations: For the Three Months Ended September 30, (in thousands) 2021 2020 Revenue: Revenue $ - $ - Other revenue 233 - Total revenue 233 - Operating expenses: Research and development, net of reimbursements 4,708 3,788 General and administrative 1,994 1,825 Total operating expenses 6,702 5,613 Other income: Interest income - net 46 73 Total other income 46 73 Net loss$ (6,423 ) $ (5,540 ) Revenue
We recorded no commercial revenue for the three months ended
Other revenue
The
Research and development expense
Research and development expenses increased
General and administrative expense
General and administrative expenses of
23 Other income
Other income is comprised of net interest income in both reporting periods. The
amount for the three months ended
Net loss
Net loss of
Results of Operations - Nine months Ended
The following table sets forth, for the periods indicated, data derived from our statements of operations: For the Nine months Ended September 30, (in thousands) 2021 2020 Revenue: Revenue $ - $ - Other revenue 1,121 - Total revenue 1,121 - Operating expenses: Research and development, net of reimbursements 12,615 11,446 General and administrative 5,422 4,512 Total operating expenses 18,037 15,958 Other income: Interest income - net 152 123 Total other income 152 123 Net loss$ (16,764 ) $ (15,835 ) Revenue
We recorded no commercial revenue for the nine months ended
Other revenue
In addition to the recognized revenue of
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Research and development expense
Research and development expenses increased
General and administrative expense
General and administrative expenses of
Other income
Other income is comprised of net interest income in both reporting periods. The
amount for the nine months ended
Net loss
Net loss of
Liquidity and Capital Resources
We have financed our operations primarily through sales of shares of our common stock and warrants. The following tables sets forth selected cash flow information for the periods indicated:
For the Nine months Ended September 30, (in thousands) 2021 2020 Cash used in operating activities$ (15,814 ) $ (15,359 ) Cash used in investing activities (133 ) (8 ) Cash provided by financing activities 34,420 54,347
Net change in cash, cash equivalents and restricted cash
Net cash used in operating activities for the nine months ended
Net cash used in investing activities for the nine months ended
Net cash provided by financing activities for the nine months ended
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During the nine months ended
On
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Critical Accounting Policies and Use of Estimates
Our management's discussion and analysis of financial condition and results of
operations is based on our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in
Our significant accounting policies are described in detail in the notes to our
consolidated financial statements appearing in our Annual Report filed on Form
10-K for the year ended
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.
Revenue Recognition
We recognize revenue in accordance with ASC 606. Under ASC 606, we recognize revenue when our customer obtains control of promised goods or services, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer to the customer.
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At contract inception, once the contract is determined to be within the scope of ASC 606, we assess whether the promised goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation. Goods and services that are determined not to be distinct are combined with other promised goods and services until a distinct bundle is identified. In determining whether goods or services are distinct, we evaluate certain criteria, including whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (capable of being distinct) and (ii) the good or service is separately identifiable from other goods or services in the contract (distinct in the context of the contract).
ASC 606 requires us to allocate the arrangement consideration on a relative standalone selling price basis for each performance obligation after determining the transaction price of the contract and identifying the performance obligations to which that amount should be allocated. The relative standalone selling price is defined in the new revenue standard as the price at which an entity would sell a promised good or service separately to a customer. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation as each performance obligation is satisfied, either at a point in time or over time, and if over time, recognition is based on the use of an output or input method.
Collaborative Arrangements
We follow the accounting guidance for collaboration agreements, which requires that certain transactions between us and collaborators be recorded in our consolidated statements of operations and comprehensive loss on either a gross basis or net basis, depending on the characteristics of the collaborative relationship, and requires enhanced disclosure of collaborative relationships. We evaluate our collaboration agreements for proper classification in our consolidated statements of operations and comprehensive loss based on the nature of the underlying activity. When we conclude that we have a customer relationship with one of our collaborators, we follow the guidance of ASC 606.
Research and Development Costs
Research and development costs are expensed as incurred. These costs include the costs of manufacturing drug product, the costs of clinical trials, costs of employees and associated overhead, and depreciation and amortization costs related to facilities and equipment. Research and development reimbursements are recorded by us as a reduction of research and development costs.
Share-Based Payments
We estimate the fair value of each stock option award at the grant date by using the Black-Scholes option pricing model. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. We account for forfeitures of stock options as they occur.
Accounting Standards Recently Adopted
In
Accounting Standards Recently Issued
In
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