You should read the following discussion and analysis of our financial condition
and results of operations together with our unaudited consolidated financial
statements and related notes for the three months ended
Overview
We are a clinical-stage biotechnology company developing first-in-class antibodies focused on unmet medical needs in inflammation. Our proprietary anti-inflammatory pipeline includes imsidolimab, our anti-IL-36R antibody, previously referred to as ANB019, for the treatment of dermatological inflammatory diseases, including generalized pustular psoriasis, or GPP, and moderate-to-severe hidradenitis suppurativa; rosnilimab, our anti-PD-1 agonist program, previously referred to as ANB030, for the treatment of moderate-to-severe alopecia areata; and our anti-BTLA agonist program, ANB032, which is broadly applicable to human inflammatory diseases associated with lymphoid and myeloid immune cell dysregulation. Our antibody pipeline has been developed using our proprietary somatic hypermutation, or SHM platform, which uses in vitro SHM for antibody discovery and is designed to replicate key features of the human immune system to overcome the limitations of competing antibody discovery technologies. We have also developed multiple therapeutic antibodies in an immuno-oncology collaboration with GSK, including an anti-PD-1 antagonist antibody (JEMPERLI (dostarlimab-gxly) GSK4057190), an anti-TIM-3 antagonist antibody (cobolimab, GSK4069889) and an anti-LAG-3 antagonist antibody (GSK4074386).
Imsidolimab, our wholly-owned IL-36R antibody previously referred to as ANB019,
inhibits the interleukin-36 receptor ("IL-36R"), and is being developed for the
treatment of multiple dermatological inflammatory diseases. We completed a Phase
1 clinical trial in healthy volunteers, which was presented at the
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unique patients were diagnosed with GPP at least twice, by a physician between 2017 and 2019 using the International Classification of Diseases 10th Revision ("ICD-10") diagnostic code pertaining to GPP (L40.1).
We met with the FDA during the second quarter of 2021 for an end-of-Phase 2 meeting to review an orphan disease registration plan for imsidolimab for the treatment of GPP. We have initiated our first Phase 3 trial for imsidolimab for GPP, called GEMINI-1. GEMINI-1 will enroll approximately 45 moderate-to-severe GPP patients, each undergoing an active flare at baseline, which will be randomized equally to receive a single dose of 750mg intravenous ("IV") imsidolimab, 300mg IV imsidolimab, or placebo. The primary endpoint of the Phase 3 program is the proportion of patients achieving clear or almost clear skin as determined by a GPPPGA score of zero or 1 at week 4 of GEMINI-1. Patients completing the GEMINI-1 trial will subsequently be enrolled in GEMINI-2, our second Phase 3 trial for imsidolimab in GPP, where they will receive monthly doses of 200mg subcutaneous imsidolimab or placebo depending upon whether they are responders, partial responders or non-responders to treatment under GEMINI-1. The objective of GEMINI-2 is to assess the efficacy and safety of imsidolimab after 6 months of monthly dosing. Top-line data from an interim analysis of GEMINI-1 is anticipated in the fourth quarter of 2023.
We are conducting a global registry of GPP patients, also referred to as the RADIANCE study, which we anticipate will improve understanding of the patient journey and assist in enrollment of future GPP clinical trials.
We are conducting clinical development of imsidolimab in hidradenitis
suppurativa, also known as acne inversa, which is a chronic inflammatory skin
disease characterized by painful nodules in intertriginous areas that can
progress to abscesses, sinus tracks and scarring. Current treatment options for
hidradenitis suppurativa, including antibiotics, corticosteroids and anti-TNF
therapy, have variable efficacy in moderate-to-severe patients, which often
leads to surgery for removal of hidradenitis suppurativa nodules. Human
translational studies have demonstrated elevated IL-36 cytokine expression in
hidradenitis suppurativa skin biopsies, and we believe treatment of
moderate-to-severe hidradenitis suppurativa with imsidolimab may lead to
therapeutic benefit for this patient population. Moderate-to-severe hidradenitis
suppurativa affects approximately 150,000 adults in
Our second wholly-owned program, rosnilimab, previously referred to as ANB030,
is an anti-PD-1 agonist antibody program designed to augment PD-1 signaling
through rosnilimab treatment to suppress T-cell driven human inflammatory
diseases. Genetic mutations in the PD-1 pathway are known to be associated with
increased susceptibility to human inflammatory diseases, and hence we believe
that rosnilimab is applicable to diseases where PD-1 checkpoint receptor
function may be under-represented. We presented preclinical data for rosnilimab
at the Festival of Biologics Annual Meeting in
Pharmacokinetic analyses demonstrated a favorable profile for rosnilimab with an estimated two-week half-life for subcutaneous and IV routes of administration. Full PD-1 receptor occupancy was observed rapidly during the first week following single subcutaneous rosnilimab doses at or above 60mg, and was maintained for at least 30 days at or above 200mg single subcutaneous doses. These data support monthly subcutaneous dosing of rosnilimab for future patient trials. Rosnilimab's pharmacodynamic activity resulted in rapid and sustained reduction in the quantity and functional activity of PD-1+ T cells, which are known to be pathogenic drivers of inflammatory diseases. Conventional T (Tcon) cells (CD3+, CD25 low) expressing PD-1, which represented approximately 25% of peripheral T cells at baseline, were reduced by 50%, including in both CD4+ and CD8+ subsets, in a dose-dependent manner and in correlation with receptor occupancy. This effect was maximized on high-PD-1 expressing Tcon cells, which represented approximately 5% of peripheral T cells, with 90% reduction relative to baseline. Conversely, total T cells (CD3+), total Tcon cells (CD3+, CD25low) and total regulatory T (Treg) cells (CD3+, CD4+, CD25 bright, CD127-) were unchanged (<5% change from baseline), resulting in a favorable shift in the ratio of PD-1+ Tcon cells to total Treg cells post-treatment. No effect (<5% reduction from baseline) was observed on any of the aforementioned cell types in placebo-dosed subjects. In addition, an antigen-specific functional T cell recall response, measured
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as ex vivo interferon-gamma released in response to tetanus toxoid challenge, was inhibited in a receptor occupancy dependent manner and was consistent with the observed reduction of PD-1+ Tcon cells, to a maximum of approximately 90% relative to baseline within 30 days following single rosnilimab dose, while placebo administration had no effect. Based upon these data, we believe rosnilimab's in vivo mechanism has the potential to treat T-cell driven human inflammatory diseases. During the fourth quarter of 2021, we initiated AZURE, a randomized placebo-controlled 45-patient Phase 2 trial of rosnilimab in moderate-to-severe alopecia areata patients with at least 50% scalp hair loss for at least 6 months prior to enrollment, where the primary endpoint is change in severity of alopecia tool (SALT) relative to baseline. Top-line data from the AZURE clinical trial is anticipated during the first half of 2023. We continue to assess clinical development opportunities for rosnilimab in additional indications, including vitiligo and rheumatoid arthritis.
Our third wholly-owned program is an anti-BTLA agonist antibody, known as
ANB032, which is broadly applicable to human inflammatory diseases associated
with lymphoid and myeloid immune cell dysregulation. Genetic studies have
demonstrated that BTLA pathway mutations increase human susceptibility to
multiple autoimmune diseases and insufficient BTLA signaling can lead to
dysregulated T or B cell responses. ANB032 is anticipated to down-modulate the
activity of T cells, B cells and BTLA expressing myeloid dendritic cells via
several potential mechanisms: direct BTLA agonistic activity, stabilization of
the interaction of BTLA and HVEM in cis which prevents pro-inflammatory
signaling mediated by HVEM ligands such as LIGHT, and abrogation of
pro-inflammatory HVEM signaling mediated by BTLA in trans. We announced positive
top-line data from a healthy volunteer Phase 1 trial of ANB032, under an
Australian Clinical Trial Notification ("CTN"), in
ANB032 was generally well-tolerated, no dose limiting toxicities were observed and there were no discontinuations due to adverse events other than one patient quarantined for potential COVID infection. No serious adverse events (SAEs) were reported. Most adverse events were considered to be mild-to-moderate, of short duration, resolved without sequelae and occurred sporadically in a dose-independent manner. Three severe adverse events (2 blood creatine phosphokinase (CPK) increase and 1 aspartate aminotransferase (AST) increase), none of which were treatment-related, were reported in two subjects in the lowest dose MAD cohort.
Pharmacokinetic analyses demonstrated a favorable profile for ANB032 including an approximate two-week half-life for subcutaneous and IV routes of administration. ANB032 demonstrated rapid and sustained target engagement on both T cells and B cells with full BTLA receptor occupancy was observed within hours and was maintained for greater than 30 days following IV or subcutaneous ANB032 dosing. ANB032 pharmacodynamic activity resulted in reduction of cell surface BTLA expression on T cells and B cells following dosing. A portion of the cell surface BTLA was shed from the cells as soluble BTLA (sBTLA), while the residual approximately 60% of baseline BTLA on T cells and B cells remained occupied by ANB032. The duration of reduced BTLA expression correlated with receptor occupancy in a dose-dependent manner and was maintained for greater than 30 days following IV or subcutaneous ANB032 dosing. Importantly, reduction of cell surface BTLA expression and the shedding of a portion of the cell surface BTLA as soluble BTLA, which was previously demonstrated to occur with ANB032 treatment in animal models of inflammation where robust efficacy was observed, confirmed the pharmacodynamic activity of ANB032 in humans. Based upon these data, we believe ANB032's in vivo mechanism has the potential to broadly treat T and B-cell driven human inflammatory diseases.
In addition to our wholly-owned antibody programs, multiple Company-developed
antibody programs have been advanced to preclinical and clinical milestones
under our collaborations. We have received to date approximately
Under the GSK Agreement, a Biologics License Application ("BLA") for our most
advanced partnered program, which is an anti-PD-1 antagonist antibody called
JEMPERLI (dostarlimab), was approved by the FDA in
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development for various solid tumor indications, including first-line advanced/recurrent endometrial cancer, first line ovarian cancer, and non-small cell lung cancer.
In addition, under the collaboration, GSK is developing dostarlimab in combination with two other development programs from the GSK Agreement: cobolimab, an anti-TIM-3 antibody, and GSK40974386, an anti-LAG-3 antibody for multiple solid tumor indications.
Also, under a separate collaboration between GSK and iTeos Therapeutics,
dostarlimab is being developed in combination with EOS-448 (anti-TIGIT) and
inupadenant (A2A receptor antagonist) in various solid tumor indications,
including registration-directed trials combining dostarlimab and EOS-448 for
first-line PD-L1 high non-small cell lung cancer (NSCLC) patients, head and neck
squamous cell cancer (HNSCC) and a third undisclosed indication. In addition,
GSK is conducting combination trials of dostarlimab with Zejula, belantamab
mafodotin (BCMA ADC), GSK6097608 (anti-CD96), GSK3745417 (
In
The following table summarizes certain key information about our wholly-owned product candidates:
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COVID-19
We are continuing to proactively monitor and assess the COVID-19 global pandemic. The full impact of the COVID-19 pandemic is inherently uncertain. Our ongoing clinical trials have been, and may continue to be, affected by the closure of offices, or country borders, among other measures being put in place around the world.
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The COVID-19 pandemic has caused us to modify our business practices (including
but not limited to curtailing or modifying employee travel, moving to full
remote work, and cancelling physical participation in meetings, events, and
conferences). While we have begun to re-open our offices, we continue to allow
remote work, we continue to monitor developments of the COVID-19 pandemic and we
may take further actions as may be required by government authorities or that we
determine are in the best interests of our employees, patients, and business
partners. We have implemented appropriate safety measures, following guidance
from the
The extent of the impact of the COVID-19 pandemic on our future liquidity and operational performance will depend on certain developments, including the duration and spread of the outbreak, including its variants, the availability and effectiveness of vaccines, the impact on our clinical trials, patients, and collaboration partners, and the effect on our suppliers.
Components of Operating Results
Collaboration Revenue
We have not generated any revenue from product sales. Our revenue has been
derived from amortization of upfront license payments, research and development
funding, milestone and royalty payments under collaboration and license
agreements with our collaborators. From inception through
Research and Development Expense
Research and development expenses consist of costs associated with our research and development activities, including drug discovery efforts, preclinical and clinical development of our programs, and manufacturing. Our research and development expenses include:
•External research and development expenses incurred under arrangements with third parties, such as contract research organizations ("CROs"), consultants, members of our scientific and therapeutic advisory boards, and contract manufacturing organizations ("CMOs");
•Employee-related expenses, including salaries, benefits, travel, and stock-based compensation;
•Facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory supplies; and
•License and sub-license fees.
We expense research and development costs as incurred. We account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expense when the service has been performed or when the goods have been received.
We are conducting research and development activities primarily on inflammation programs. We have a research and development team that conducts antibody discovery, characterization, translational studies, IND-enabling preclinical studies, and clinical development. We conduct some of our early research and preclinical activities internally and plan to rely on third parties, such as CROs and CMOs, for the execution of certain of our research and development activities, such as in vivo toxicology and pharmacology studies, drug product manufacturing, and clinical trials.
We have completed Phase 1 and Phase 2 clinical trials and have ongoing Phase 2 and 3 clinical trials for imsidolimab, completed a Phase 1 clinical trial and have an ongoing Phase 2 clinical trial in rosnilimab, and have completed a Phase 1 trial in ANB032. We expect our research and development expenses to be higher for the foreseeable future as we continue to advance our product candidates into larger clinical trials.
General and Administrative Expense
General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation for our executive, finance, legal, business development, human resource, and support functions. Other general and administrative expenses include allocated facility-related costs not otherwise included in research and development expenses, travel expenses, and professional fees for auditing, tax, and legal services.
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Non-cash Interest Expense for the Sale of Future Royalties
Non-cash interest expense for the sale of future royalties consists of interest related to the liability for the sale of future royalties, as well as the amortization of debt issuance costs. We impute interest on the unamortized portion of the liability for the sale of future royalties using the effective interest method and record interest expense based on timing of the payments over the term of the Royalty Monetization Agreement. Our estimate of the interest rate under the arrangement is based on forecasted royalty and milestone payments expected to be made to Sagard over the life of the agreement.
Interest Income
Interest income consists primarily of interest earned on our short-term and long-term investments and is recognized when earned.
Critical Accounting Policies and Use of Estimates
Our management's discussion and analysis of our financial condition and results
of operations are based on our financial statements, which have been prepared in
accordance with
Results of Operations - Comparison of the Three Months Ended
Collaboration Revenue
Collaboration revenue consists of both milestone payments under the
collaborations, and royalty payments. We recognized
We expect that any collaboration revenue we generate will continue to fluctuate from period to period as a result of the timing and amount of milestones from our existing collaborations.
Royalty revenue is a function of our partners' product sales and the applicable
royalty rate. During the three months ended
Research and Development Expenses
Research and development expenses were
We do not track fully burdened research and development costs separately for each of our product candidates. We review our research and development expenses by focusing on external development and internal development costs. External development expenses consist of costs associated with our external preclinical and clinical trials, including pharmaceutical development and manufacturing. Included in preclinical and other unallocated costs are external corporate overhead costs that are not specific to any one program. Internal costs consist of salaries and wages, share-based compensation and benefits, which are not tracked by product candidate as several of our departments support multiple product candidate research and development programs. The following table summarizes the external costs attributable to each program and internal costs:
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Three Months Ended March 31, (in thousands) 2022 2021 Increase/(Decrease) External Costs Imsidolimab$ 10,489 $ 12,266 $ (1,777) Rosnilimab 1,544 1,779 (235) Etokimab 625 565 60 ANB032 433 755 (322) Preclinical and other unallocated costs 2,783 2,952 (169) Total External Costs 15,874 18,317 (2,443) Internal Costs 6,642 5,868 774 Total Costs$ 22,516 $ 24,185 $ (1,669)
General and Administrative Expenses
General and administrative expenses were
We expect that our general and administrative expenses will increase for the foreseeable future as we incur additional costs associated with being a publicly traded company, including legal, auditing and filing fees, additional insurance premiums, investor relations expenses and general compliance and consulting expenses. We also expect our intellectual property related legal expenses, including those related to preparing, filing, prosecuting and maintaining patent applications, to increase as our intellectual property portfolio expands.
Non-cash Interest Expense for the Sale of Future Royalties
Non-cash interest expense was
Interest Income
Interest income was
Other Income, Net
Other income, net was less than
Liquidity and Capital Resources
From our inception through
In addition to our existing cash, cash equivalents and investments, we are eligible to earn milestone and other contingent payments for the achievement of defined collaboration objectives and certain nonclinical, clinical, regulatory and sales-based events, and royalty payments under our collaboration agreements, including the GSK Agreement. Our ability to earn these milestone and contingent payments and the timing of achieving these milestones is primarily dependent upon the outcome of
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our collaborators' research and development activities. Our rights to payments under our collaboration agreements are our only committed external source of funds.
In
In
Funding Requirements
We may seek to obtain additional financing in the future through equity or debt financings or through collaborations or partnerships with other companies. If we are unable to obtain additional financing on commercially reasonable terms, our business, financial condition and results of operations will be materially adversely affected.
Our primary uses of capital are, and we expect will continue to be, third-party clinical and preclinical research and development services, including manufacturing, laboratory and related supplies, compensation and related expenses, legal, patent and other regulatory expenses, and general overhead costs. We have entered into agreements with certain vendors for the provision of services, including services related to commercial manufacturing, that we are unable to terminate for convenience. Under such agreements, we are contractually obligated to make certain minimum payments to the vendors with the amounts to be based on the timing of the termination and the specific terms of the agreement.
Cash, cash equivalents and investments totaled
Cash Flows
The following table summarizes our cash flows for the three months endedMarch 31, 2022 and 2021: Three Months Ended March 31, (in thousands) 2022 2021 Net cash (used in) provided by: Operating activities$ (21,014) $ (23,204) Investing activities (312,912) 56,729 Financing activities 4,609 167
Net (decrease) increase in cash and cash equivalents
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Operating Activities
Net cash used in operating activities during the three months ended
Investing Activities
Net cash (used in) and provided by investing activities during the three months
ended
Financing Activities
The net cash provided by financing activities during the three months ended
Contractual Obligations
We have entered into agreements with certain vendors for the provision of goods and services, which includes manufacturing services with contract manufacturing organizations and development services with contract research organizations. These agreements may include certain provisions for purchase obligations and termination obligations that could require payments for the cancellation of committed purchase obligations or for early termination of the agreements. The amount of the cancellation or termination payments vary and are based on the timing of the cancellation or termination and the specific terms of the agreement and therefore are cancellable contracts.
For further information related to our operating lease and future minimum annual obligations, see Note 9 - Commitments and Contingencies in the accompanying notes to the consolidated financial statements.
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