– Data from Shire expected in Q2 2017 could
further validate proprietary PolyXen™ platform technology and
provide cash milestone –
– Company on track to commence patient
recruitment for lead product candidate XBIO-101 for the treatment
of progestin resistant endometrial cancer –
– Management to host quarterly update
conference call and webcast today at 8:30 AM ET –
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, announced today its
financial results for the quarter ended March 31, 2017. As
previously announced, the Company’s management team will host a
quarterly update conference call with a live webcast today, May 16,
2017 at 8:30 AM ET for investors, analysts and other interested
parties (details below).
Xenetic also provided an update on its license deal with Shire
plc (LSE: SHP, NASDAQ: SHPG), a significant stockholder of the
Company, along with the clinical status of the product candidate
SHP656, or PSA-Recombinant Factor VIII (“rFVIII”) being developed
as a long-acting therapeutic for the treatment of hemophilia
utilizing Xenetic’s proprietary PolyXen™ platform technology. The
stated goal of Shire is to introduce an innovative, modified rFVIII
protein with a significantly prolonged circulating half-life, with
the objective of providing a once weekly treatment or reaching
higher trough activity levels for greater efficacy. SHP656 is
currently in a Phase 1/2 clinical study. Shire expects to report
topline data from this Phase 1/2 study in the second quarter of
2017 and, if the outcome of the trial is successful, Xenetic
expects Shire to launch a Phase 3 trial before the end of 2017.
Xenetic has the potential to receive from Shire up to $100 million
in cash milestones plus royalties linked to sales.
Additionally, Xenetic 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. The Company is currently on track to commence patient
recruitment in the second quarter of 2017 for a Phase 2 clinical
study of XBIO-101 in conjunction with progestin therapy for the
treatment of progestin resistant endometrial cancer, and has filed
a protocol under its existing Investigational New Drug application
(“IND”) to expand the development of XBIO-101 into a biomarker
study in triple negative breast cancer (“TNBC”) patients.
Recent Corporate Highlights
- Presented case study of PolyXen™
platform technology at the 13th Annual Protein Engineering Summit
(“PEGS”) Boston;
- Rang Nasdaq Stock Market Opening
Bell;
- Appointed James F. Parslow, MBA, CPA as
Chief Financial Officer;
- Filed a protocol under existing IND for
a biomarker study of XBIO-101 in TNBC patients;
- Expanded its patent portfolio
geographically into key markets including areas of Europe, Asia and
North America and strengthened the patent portfolio in the US
providing robust protection of its platform technology;
- Received a $3 million milestone payment
from Shire plc related to Shire’s advancing the Phase 1/2 clinical
study for SHP656 being developed as a long-acting therapeutic for
the treatment of hemophilia; and
- Appointed Curtis A. Lockshin, Ph.D. as
Chief Scientific Officer.
“We have continued to lay a strong foundation for the Company in
the first quarter of 2017, showcasing our commitment to operational
excellence and importantly, further positioning ourselves for what
we believe will be a truly transformational year. We’ve continued
to make corporate advancements with key appointments to our
management team, as well as clinical advancements with the
preparatory work for our XBIO-101 Phase 2 trial and the filing of a
protocol under our existing IND for TNBC. We look forward to the
topline data from the Shire Phase 1/2 study of SHP656 in the second
quarter, and our team remains focused on advancing our flagship
product candidate, XBIO-101, with the launch of patient recruitment
in our Phase 2 trial for the treatment of endometrial cancer, both
of which are value-driving events for Xenetic,” stated M. Scott
Maguire, Xenetic’s CEO.
Expected Near-Term Milestones
- Commence patient recruitment in Q2 2017
for a Phase 2 clinical study of XBIO-101 in conjunction with
progestin therapy for the treatment of endometrial cancer in women
with recurrent or persistent disease who have failed progestin
monotherapy;
- Announce topline data from the Shire
Phase 1/2 study of SHP656 in Q2 2017;
- Receive milestone payment from Shire if
endpoints are achieved in Phase 1/2 study of SHP656; and
- Leverage Shire SHP656 program to enter
into more industry collaborations involving the PolyXen
technology.
Summary of Financial Results for First Quarter 2017
Net loss for the three months ended March 31, 2017, was $2.9
million compared to a net loss of approximately $3.6 million for
the same period in 2016. The net loss in the first quarter of 2016
included a net charge of approximately $1.7 million associated with
hybrid debt instruments including changes in derivative fair value,
issuance losses as well as interest expense associated with the
instruments. All hybrid debt instruments were settled in 2016 and
none were issued or outstanding during the three months ended March
31, 2017.
The Company ended the quarter with approximately $4.3 million of
cash.
Conference Call and Webcast Information
Xenetic management will host a conference call for investors,
analysts and other interested parties on Tuesday, May 16, 2017 at
8:30 a.m. ET. The conference call and live webcast will be
accompanied by presentation slides.
To participate in the call, please dial (877) 407-6914
(domestic) or (201) 493-6709 (international). The live webcast and
accompanying slides will be available by accessing the IR Calendar
in the Investors section of Xenetic’s website (www.xeneticbio.com).
A replay of the webcast will be available for 90 days, starting
approximately two hours after the presentation ends.
About Xenetic Biosciences
Xenetic Biosciences, Inc. is a clinical-stage
biopharmaceutical company focused on the discovery, research and
development of next-generation biologic drugs and novel orphan
oncology therapeutics. Xenetic's proprietary drug development
platforms include PolyXen™, which enables next generation biologic
drugs by improving their half-life and other pharmacological
properties. Xenetic's lead investigational product candidates
include oncology therapeutic XBIO-101 (sodium cridanimod) for the
treatment of progesterone resistant endometrial cancer (EC), and a
polysialylated form of erythropoietin for the treatment of anemia
in pre-dialysis patients with chronic kidney disease.
Xenetic is also working together with Shire plc
(formerly Baxalta, Baxter Incorporated and Baxter Healthcare)
to develop a novel series of polysialylated blood coagulation
factors, including a next generation Factor VIII. This
collaboration relies on Xenetic's PolyXen technology to conjugate
polysialic acid (“PSA”) to therapeutic blood-clotting factors, with
the goal of improving the pharmacokinetic profile and extending the
active life of these biologic molecules. Shire is a significant
stockholder of the Company, having invested $10 million in the
Company during 2014. The agreement is an exclusive research,
development and license agreement which grants Shire a worldwide,
exclusive, royalty-bearing license to Xenetic's PSA patented and
proprietary technology in combination with Shire's proprietary
molecules designed for the treatment of blood and bleeding
disorders. Under the agreement, Xenetic may receive regulatory and
sales target payments for total potential milestone receipts of up
to $100 million plus royalties on sales. Additionally,
Xenetic has previously received strategic investments from OPKO
Health (Nasdaq: OPK), Serum Institute of India Limited and
Pharmsynthez.
Xenetic is also developing a broad pipeline of clinical
candidates for breakthrough biologics and novel oncology
therapeutics in a number of orphan disease indications. For more
information, please visit the company's website
at www.xeneticbio.com and connect on Twitter, LinkedIn,
Facebook and Google+.
Forward-Looking Statements
This press release contains "forward-looking statements," as
that term is defined under the Private Securities Litigation Reform
Act of 1995 (PSLRA), which statements may be identified by words
such as "expects," "plans," "projects," "will," "may,"
"anticipates," "believes," "should," "intends," "estimates," and
other words of similar meaning, including statements regarding
expected benefits of NGS cancer panels, the ability to accurately
determine the heritable factors increasing the risk of cancer,
permitting tailored treatment, screening and prevention of cancer
in patients, as well as other non-historical statements about our
expectations, beliefs or intentions regarding our business,
technologies and products, financial condition, strategies or
prospects. Many factors could cause our actual activities or
results to differ materially from the activities and results
anticipated in forward-looking statements. These factors include
those described in our filings with the Securities and Exchange
Commission, as well as the risks inherent in funding, developing
and obtaining regulatory approvals of new, commercially-viable and
competitive products and treatments. In addition, forward-looking
statements may also be adversely affected by general market
factors, competitive product development, product availability,
federal and state regulations and legislation, the regulatory
process for new products and indications, manufacturing issues that
may arise, patent positions and litigation, among other factors.
The forward-looking statements contained in this press release
speak only as of the date the statements were made, and we do not
undertake any obligation to update forward-looking statements. We
intend that all forward-looking statements be subject to the
safe-harbor provisions of the PSLRA.
XENETIC BIOSCIENCES, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS March 31, 2017
December 31, 2016 (Unaudited) ASSETS Current
assets: Cash $ 4,323,511 $ 4,048,131 Restricted cash 66,510 66,510
Accounts receivable – 3,000,000 Prepaid expenses and other
1,820,023 1,224,009 Total current assets 6,210,044 8,338,650
Property and equipment, net 40,083 42,366 Goodwill 3,283,379
3,283,379 Indefinite-lived intangible assets 9,243,128 9,243,128
Other assets 54,884 66,342 Total assets $
18,831,518 $ 20,973,865 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 1,368,529 $ 1,006,903
Accrued expenses 605,094 838,888 Other current liabilities
20,483 20,205 Total current liabilities 1,994,106 1,865,996
Deferred tax liability 2,918,518 2,918,518 Other liabilities
15,020 19,876 Total liabilities
4,927,644 4,804,390 Commitments and contingent
liabilities Stockholders' equity: Preferred stock,
10,000,000 shares authorized Series B, $0.001 par value: 2,185,742
and 2,305,742 issued and outstanding as of March 31, 2017, and
December 31, 2016, respectively 2,185 2,305 Series A, $0.001 par
value: 970,000 shares issued and outstanding as of March 31, 2017,
and December 31, 2016 970 970 Common stock, $0.001 par value;
45,454,546 shares authorized as of March 31, 2017, and December 31,
2016; 8,976,426 and 8,731,029 shares issued as of March 31, 2017
and December 31, 2016, respectively; 8,652,541 and 8,407,144 shares
outstanding as of March 31, 2017 and December 31, 2016,
respectively 8,975 8,730 Additional paid in capital 164,122,816
163,522,921 Accumulated deficit (145,203,626 ) (142,338,005 )
Accumulated other comprehensive income 253,734 253,734 Treasury
stock (5,281,180 ) (5,281,180 ) Total stockholders'
equity 13,903,874 16,169,475 Total liabilities
and stockholders' equity $ 18,831,518 $ 20,973,865
XENETIC BIOSCIENCES, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
THREE MONTHS ENDED MARCH 31, 2017
2016 Operating costs and expenses: Research and
development $ (1,221,144 ) $ (429,281 ) General and administrative
(1,634,533 ) (1,422,366 ) Loss from operations
(2,855,677 ) (1,851,647 ) Other non-operating income
(expense): Change in fair value of derivative liability – 136,014
Loss on issuance of hybrid debt instruments – (1,584,218 ) Other
expense (9,356 ) (26,414 ) Interest income – 14 Interest expense
(588 ) (245,384 ) Total other non-operating expense
(9,944 ) (1,719,988 ) Net loss $ (2,865,621 )
$ (3,571,635 ) Basic and diluted loss per share $ (0.34 ) $
(0.78 ) Weighted-average shares of common stock outstanding,
basic and diluted 8,518,830 4,591,364
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Jenene Thomas Communications, LLC.Jenene Thomas,
908-938-1475jenene@jenenethomascommunications.com
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