Kitov Pharma Ltd. (“Kitov”) (NASDAQ/TASE: KTOV), a clinical-stage
company advancing first-in-class therapies to overcome tumor immune
evasion and drug resistance, today announced financial results for
the six-month period ended June 30, 2019.
Key Financial Highlights for the first half of
2019:
· |
Revenues of
$1 million as a result of the first milestone payment from Coeptis
Pharmaceuticals. |
· |
Decrease in
research and development expenses to $1.7 million compared to $2.8
million in 1H18. |
· |
SG&A
expenses of $3.3 million, similar to 1H18. |
· |
Net cash
used in operating activities decreased to $2.3 million compared to
$3.5 million in 1H18. |
· |
Net cash
balance and short-term deposits at the end of 1H19 of $7.8 million,
not including $3.5 million investment in Kitov by Orbimed, Pontifax
and Arkin expected following completion of the FameWave
acquisition. |
Isaac Israel, chief executive officer of Kitov
Pharma, commented, “During the first half of 2019, we made a great
progress in the acquisition of FameWave announced earlier this
year, with fulfillment of the major closing conditions including
the clinical collaboration agreement signed with BMS. This
acquisition of a clinical stage oncology asset is a major step in
our shift towards an oncology focused company. With the recent
successful completion of the IND-enabling studies to advance NT-219
into the clinic and the almost completed acquisition of CM-24, we
will soon initiate clinical trials with both candidates which we
believe have a great potential to provide effective and
long-lasting treatments for patients.”
Mr. Israel added, “We have additionally achieved
significant milestones with Consensi™ during this period. With our
plans to launch in the U.S., through our partnership with Coeptis
Pharmaceuticals, we are already bringing additional revenues to
support our oncology programs. The success of this program is also
a reflection of our team’s ability to successfully execute
end-to-end development of pharma products.”
Key Research and Development Highlights
NT-219
NT-219 is a first-in-class small molecule dual
inhibitor of STAT3 and IRS1/2, with the potential to prevent and
overcome drug resistance in various cancer types when used in
combination with existing agents. Key achievements for the NT-219
program for the six-month period ended June 30, 2019 include:
· |
Completed
IND-enabling studies to advance NT-219 for the treatment of
patients with recurrent or metastatic head and neck cancers. |
· |
Planned
Phase 1/2 open label multi-center study which will include a dose
escalation with fewer than 20 patients and an expansion cohort with
30 patients, to investigate NT-219 in combination with cetuximab in
patients with recurrent and metastatic squamous cell carcinoma of
head & neck cancer (SCCHN). The main goal of the study is to
evaluate the safety, tolerability and maximum tolerated dose, with
a secondary endpoint to obtain preliminary efficacy data. |
· |
Announced
new findings related to NT-219 mechanism of action showing that
even a short exposure of cancerous cells to NT219 was sufficient to
trigger irreversible shutdown of cancer pathways, resulting in a
long-term anti-cancer effect. These new findings suggested that
IRS1/2 dissociates from the cell membrane, undergoes serine
phosphorylation which prevents rebinding to the receptor, and is
finally degraded by the proteasome. This sequence of events leads
to the blockage of PI3K - AKT pathway – a major cancer cell
survival pathway. |
CM-24
CM-24 is a clinical-stage monoclonal antibody
antagonist of CEACAM1, a novel immune checkpoint that supports
tumor immune evasion and survival through multiple pathways. Kitov
plans to develop CM-24 as a combination therapy with the PD-1
checkpoint inhibitor nivolumab (Opdivo®) in clinical collaboration
with Bristol-Myers-Squibb (BMS) to treat non-small cell lung cancer
(NSCLC) patients. Key achievements for the CM-24 program for the
six-month period ended June 30, 2019 include:
· |
Announced
signature of agreement to acquire FameWave Ltd., a privately held
biopharmaceutical company developing CM-24. |
· |
Announced
key milestone in the acquisition of FameWave, with the signature of
a clinical collaboration agreement between FameWave and BMS for a
Phase 1/2 clinical trials to evaluate the combination of CM-24 with
nivolumab (Opdivo®), BMS's PD-1 inhibitor, in NSCLC. |
· |
The safety
profile of CM-24 was previously evaluated and found to be well
tolerated in a Phase 1 study conducted by Merck at doses up to
10mg/kg. Analysis of the Phase 1 data suggested that CEACAM-1
receptor saturation requires a higher dose of CM-24, which is
expected be achieved with less than 20mg/kg if administrated every
two weeks. Kitov believes that the combination of CM-24 with
Opdivo® is advantageous over Merck’s pembrolizumab (Keytruda®) due
to Opdivo®'s Q2W administration protocol, compared to the Q3W
administration protocol for Keytruda®. |
· |
FameWave
entered into a manufacturing agreement with its contract
manufacturer for the production of CM-24 for the planned Phase 1/2
study. |
Consensi™
Consensi™ is a fixed-dose combination of
celecoxib (Celebrex), a non-steroidal anti-inflammatory drug
(NSAID) for the treatment of pain caused by osteoarthritis, and
amlodipine besylate (Norvasc), a drug designed to treat
hypertension. Consensi™ is under patent protection in the U.S.
until 2030 and is the only NSAID whose labeling indicates a
reduction of blood pressure and consequent risk reduction of heart
attack, stroke, and death. Kitov plans to use revenue from
milestone payments from multiple regional licensing deals for
Consensi™ to advance its oncology pipeline. Key achievements for
the Consensi™ program for the six-month period ended June 30, 2019
include:
· |
Kitov signed
an exclusive marketing and distribution agreement with Coeptis
Pharmaceuticals for the U.S. market. The agreement provides for
total milestone payments from Coeptis to Kitov of $3.5 million, of
which Kitov has already received $1 million upon execution of the
agreement. Additional milestone payments are due in the upcoming
months upon completion of an agreed manufacturing plan and upon
first commercial sales in the U.S. In addition, Kitov will be paid
40%-60% of Coeptis’ net profit on Consensi™ sales. |
Expected Milestones for 2H19:
· |
Submit IND
for the initiation of Phase 1/2 study with NT-219 in combination
with cetuximab in patients with recurrent and metastatic
SCCHN. |
· |
Complete
closing of transaction for the acquisition of FameWave and its
CM-24 candidate |
· |
Complete
preparation for launch of Consensi™ in the U.S. with commercial
partner Coeptis Pharmaceuticals. |
· |
Submit
marketing approval applications to the local regulatory authorities
for potential registration of Consensi™ in China which will trigger
an additional milestone payment to Kitov. |
Financial Results for the Six-Month Period Ended June
30, 2019
· |
Revenue for
the six-month period ended June 30, 2019 was $1 million, resulting
from a milestone payment from Coeptis related to Consensi™ in 2019,
and same as in the first half of 2018 due to milestone payment from
CSBio on Consensi™ in the first half of 2018. |
· |
Research and
development expenses for the first half of the year ended June 30,
2019 were $1.7 million, a decrease of $1.1 million compared to the
six-month period ended June 30, 2018. The decrease is mainly due to
a reduction in clinical trials and regulatory expenses related to
Consensi™ prior to its approval by the FDA in the first half of
2018, a decrease in bonuses accrued in the first half of 2018 in
connection with FDA approval of Consensi™ as well as a decrease in
ESOP costs in the first half of 2019 compared to the first half of
2018. |
· |
Selling,
general and administrative expenses for the first half of the year
ended June 30, 2019 were $3.3 million, compared to $3.4 million for
the first half of year ended June 30, 2018. |
· |
Net cash
used in operating activities was $2.3 million for the first half of
the year ended June 30, 2019, compared to $3.5 million for the
first half of year ended June 30, 2018. The decrease reflects a
reduction of operating expenses of $1.2 million in the first half
of 2019 compared to first half of 2018. |
· |
Kitov's
operating loss for the six-month period ended June 30, 2019
amounted to $3.6 million, compared with an operating loss of $4.4
million for the six-month period ended June 30, 2018. The decrease
in operating loss reflects the decrease in operating expenses as
mentioned above during 2019. |
· |
Kitov's net
loss for the six-month period ended June 30, 2019 amounted to $2.6
million, compared with a net loss of $5.2 million for the six-month
period ended June 30, 2018. Basic and diluted loss per share in the
first half of 2019 was 14 cents compared to 42 cents in the first
half of 2018. |
· |
Cash, cash
equivalents and short-term bank deposits totaled $7.8 million as of
June 30, 2019. Upon closing of the FameWave acquisition, Kitov will
receive an additional $3.5 million investment from Orbimed,
Pontifax and Arkin. |
About Kitov Pharma
Kitov Pharma (Kitov Pharma Ltd.; NASDAQ/TASE:
KTOV) is a clinical-stage company advancing first-in-class
therapies to overcome tumor immune evasion and drug resistance, to
create successful long-lasting treatments for people with cancer.
Kitov’s oncology pipeline includes NT-219, a small molecule
targeting the novel cancer drug resistance pathways IRS1/2 and
STAT3. Kitov is currently advancing NT-219 in combination with
cetuximab as a third-line or second-line treatment option for the
treatment of recurrent and metastatic squamous cell carcinoma of
head & neck cancer (SCCHN). Kitov is also under contract to
acquire 100% of FameWave Ltd. which owns CM-24, a monoclonal
antibody blocking CEACAM1, a novel immune checkpoint that supports
tumor immune evasion and survival through multiple pathways. Kitov
will advance CM-24 as a combination therapy with anti-PD1
checkpoint inhibitors for the treatment of non-small cell lung
cancer (NSCLC). Following the receipt of the approval of Kitov’s
shareholders for the acquisition of FameWave, and the finalization
of a clinical collaboration agreement between FameWave and Bristol
Myers Squibb (NYSE:BMY) for their planned Phase 1/2 clinical trials
to evaluate the combination of CM-24 with the PD-1 inhibitor
nivolumab (Opdivo®), the acquisition is expected to close during
the third quarter of 2019, subject to fulfillment of certain
additional closing conditions. Consensi™, a fixed-dose combination
of celecoxib and amlodipine besylate, for the simultaneous
treatment of osteoarthritis pain and hypertension was approved by
the FDA for marketing in the U.S in May 2018 and is expected to be
launched in the U.S. at the end of 2019 by its partner Coeptis
Pharmaceuticals. Kitov has also partnered to commercialize
Consensi™ in China and South Korea.
The company is headquartered in Tel Aviv,
Israel. For more information, please visit
http://www.kitovpharma.com.
Forward-Looking Statements and Kitov's
Safe Harbor Statement
Certain statements in this press release that
are forward-looking and not statements of historical fact are
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements include, but are not limited to,
statements that are not statements of historical fact, and may be
identified by words such as “believe”, “expect”, “intend”, “plan”,
“may”, “should”, “could”, “might”, “seek”, “target”, “will”,
“project”, “forecast”, “continue” or “anticipate” or their
negatives or variations of these words or other comparable words or
by the fact that these statements do not relate strictly to
historical matters. You should not place undue reliance on these
forward-looking statements, which are not guarantees of future
performance. Forward-looking statements reflect our current views,
expectations, beliefs or intentions with respect to future events,
and are subject to a number of assumptions, involve known and
unknown risks, many of which are beyond our control, as well as
uncertainties and other factors that may cause our actual results,
performance or achievements to be significantly different from any
future results, performance or achievements expressed or implied by
the forward-looking statements. Important factors that could cause
or contribute to such differences include, among others, risks
relating to: the manner in which the parties to the transaction for
the acquisition of FameWave by Kitov plan to effect the
transaction; the expected benefits, synergies and costs of the
transaction; management plans relating to the transaction; the
expected timing of the completion of the transaction; the parties’
ability to complete the transaction considering the various closing
conditions; the plans, strategies and objectives of management for
future operations; product development for NT219 and CM-24; the
potential future financial impact of the transaction; and any
assumptions underlying any of the foregoing; the process by which
early stage products such as CM-24 or NT-219 could potentially lead
to an approved product is long and subject to highly significant
risks, particularly with respect to a joint development
collaboration; the fact that drug development and commercialization
involves a lengthy and expensive process with uncertain outcomes;
our ability to successfully develop and commercialize our
pharmaceutical products; the expense, length, progress and results
of any clinical trials; the lack of sufficient funding to finance
the clinical trials; the impact of any changes in regulation and
legislation that could affect the pharmaceutical industry; the
difficulty in receiving the regulatory approvals necessary in order
to commercialize our products; the difficulty of predicting actions
of the U.S. Food and Drug Administration or any other applicable
regulator of pharmaceutical products; the regulatory environment
and changes in the health policies and regimes in the countries in
which we operate; the uncertainty surrounding the actual market
reception to our pharmaceutical products once cleared for marketing
in a particular market; the introduction of competing products;
patents attained by competitors; dependence on the effectiveness of
our patents and other protections for innovative products; our
ability to obtain, maintain and defend issued patents with
protective claims; the commencement of any patent interference or
infringement action; our ability to prevail, obtain a favorable
decision or recover damages in any such action; and the exposure to
litigation, including patent litigation, and/or regulatory actions;
the uncertainty surrounding an investigation by the Israel
Securities Authority into our historical public disclosures and the
potential impact of such investigation on the trading of our
securities or on our clinical, commercial and other business
relationships, or on receiving the regulatory approvals necessary
in order to commercialize our products, and other factors that are
discussed in our in our Annual Report on Form 20-F for the year
ended December 31, 2018 and in our other filings with the SEC,
including our cautionary discussion of risks and uncertainties
under ‘Risk Factors’ in our Registration Statements and Annual
Reports. These are factors that we believe could cause our actual
results to differ materially from expected results. Other factors
besides those we have listed could also adversely affect us. Any
forward-looking statement in this press release speaks only as of
the date which it is made. We disclaim any intention or obligation
to publicly update or revise any forward-looking statement, or
other information contained herein, whether as a result of new
information, future events or otherwise, except as required by
applicable law. You are advised, however, to consult any additional
disclosures we make in our reports to the SEC, which are available
on the SEC’s website, http://www.sec.gov For further
information, contact: Gil Efron Deputy CEO & Chief
Financial Officer +972-3-933-3121 ext. #105
IR@kitovpharma.com
Media Inquiries:Darren Opland,
Ph.D.darren@lifescipublicrelations.com +1 646 627 8387
Condensed Consolidated Unaudited Interim Statements of
Financial Position as of
|
|
|
|
|
June 30, 2019 |
|
|
December 31, 2018 |
|
|
|
Note |
|
|
USD thousand |
|
|
USD thousand |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
2,757 |
|
|
|
5,163 |
|
Short term
deposits |
|
|
|
|
|
|
5,060 |
|
|
|
1,521 |
|
Financial
asset |
|
|
5 |
|
|
|
2,000 |
|
|
|
- |
|
Other
current assets |
|
|
|
|
|
|
851 |
|
|
|
1,830 |
|
Total
current assets |
|
|
|
|
|
|
10,668 |
|
|
|
8,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non -
current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Right of use
assets |
|
|
3 |
|
|
|
311 |
|
|
|
- |
|
Fixed
assets, net |
|
|
|
|
|
|
40 |
|
|
|
37 |
|
|
|
|
|
|
|
|
351 |
|
|
|
37 |
|
Intangible
assets |
|
|
|
|
|
|
6,172 |
|
|
|
6,172 |
|
Total
assets |
|
|
|
|
|
|
17,191 |
|
|
|
14,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Lease
liability - short term |
|
|
3 |
|
|
|
194 |
|
|
|
- |
|
Accounts
payable |
|
|
|
|
|
|
861 |
|
|
|
705 |
|
Other
payables |
|
|
|
|
|
|
1,859 |
|
|
|
2,055 |
|
Derivative
liability |
|
|
7 |
|
|
|
2,451 |
|
|
|
554 |
|
Total
current liabilities |
|
|
|
|
|
|
5,365 |
|
|
|
3,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non -
current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Lease
liability |
|
|
|
|
|
|
132 |
|
|
|
- |
|
Post-employment benefit liabilities |
|
|
|
|
|
|
256 |
|
|
|
405 |
|
Total
non-current liabilities |
|
|
|
|
|
|
388 |
|
|
|
405 |
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Share capital, no par value |
|
|
6 |
|
|
|
- |
|
|
|
- |
|
Share premium |
|
|
|
|
|
|
46,945 |
|
|
|
44,597 |
|
Receipts on
account of warrants |
|
|
|
|
|
|
7,940 |
|
|
|
7,982 |
|
Capital
reserve for share-based payments |
|
|
8 |
|
|
|
2,448 |
|
|
|
1,714 |
|
Capital
reserve from transactions with related parties |
|
|
|
|
|
|
761 |
|
|
|
761 |
|
Capital
reserve from transactions with non- controlling interest |
|
|
|
|
|
|
(859 |
) |
|
|
(859 |
) |
Accumulated
loss |
|
|
|
|
|
|
(46,247 |
) |
|
|
(43,672 |
) |
Equity
attributable to owners of the Company |
|
|
|
|
|
|
10,988 |
|
|
|
10,523 |
|
Non-controlling interests |
|
|
|
|
|
|
450 |
|
|
|
481 |
|
Total
equity |
|
|
|
|
|
|
11,438 |
|
|
|
11,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity |
|
|
|
|
|
|
17,191 |
|
|
|
14,723 |
|
Condensed Consolidated Unaudited Interim Statements of
Changes in Equity
|
|
|
|
|
For the six months ended June 30 |
|
|
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
Note |
|
|
|
USD thousand |
|
|
|
USD thousand |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
9 |
|
|
|
1,000 |
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses |
|
|
|
|
|
|
1,688 |
|
|
|
2,842 |
|
General and
administrative expenses |
|
|
|
|
|
|
3,305 |
|
|
|
3,394 |
|
Reimbursement of legal fees |
|
|
|
|
|
|
(430 |
) |
|
|
- |
|
Other
income, net |
|
|
|
|
|
|
- |
|
|
|
(866 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
expenses |
|
|
|
|
|
|
4,563 |
|
|
|
5,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss |
|
|
|
|
|
|
3,563 |
|
|
|
4,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change
in fair value of derivatives |
|
|
|
|
|
|
(992 |
) |
|
|
758 |
|
Finance
expense |
|
|
|
|
|
|
108 |
|
|
|
79 |
|
Finance
income |
|
|
|
|
|
|
(73 |
) |
|
|
(24 |
) |
Finance
expense (income), net |
|
|
|
|
|
|
(957 |
) |
|
|
813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for
the period |
|
|
|
|
|
|
2,606 |
|
|
|
5,183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
Owners of
the Company |
|
|
|
|
|
|
2,575 |
|
|
|
4,853 |
|
Non-controlling interests |
|
|
|
|
|
|
31 |
|
|
|
330 |
|
|
|
|
|
|
|
|
2,606 |
|
|
|
5,183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per share - USD |
|
|
|
|
|
|
0.14 |
|
|
|
**0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
shares used in calculation |
|
|
|
|
|
|
19,183,303 |
|
|
|
**12,405,856 |
|
|
** |
Restated to reflect a 20:1 reverse share split, that took place
in January 2019. |
Condensed Consolidated Unaudited Interim Statements of
Cash Flows
|
|
For the six monthsended June
30 |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
USD thousand |
|
|
|
USD thousand |
|
Cash
flows from operating activities: |
|
|
|
|
|
|
|
|
Loss for the
period |
|
|
(2,606 |
) |
|
|
(5,183 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
95 |
|
|
|
3 |
|
Finance
expenses (income), net |
|
|
(957 |
) |
|
|
813 |
|
Share-based
payments |
|
|
499 |
|
|
|
612 |
|
Income in
regards with settlement with a minority shareholder of a
subsidiary |
|
|
- |
|
|
|
(866 |
) |
|
|
|
(2,969 |
) |
|
|
(4,621 |
) |
Changes
in assets and liabilities: |
|
|
|
|
|
|
|
|
Changes in
other current assets |
|
|
953 |
|
|
|
202 |
|
Changes in
accounts payables |
|
|
142 |
|
|
|
525 |
|
Changes in
other payables |
|
|
(226 |
) |
|
|
412 |
|
Changes in
post - employment benefit liabilities |
|
|
(170 |
) |
|
|
- |
|
|
|
|
699 |
|
|
|
1,139 |
|
|
|
|
|
|
|
|
|
|
Net cash
used in operating activities |
|
|
(2,270 |
) |
|
|
(3,482 |
) |
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
|
|
|
|
|
Interest
received |
|
|
30 |
|
|
|
24 |
|
Increase in
short term deposits |
|
|
(3,500 |
) |
|
|
(3,061 |
) |
Investment
in Financial asset |
|
|
(2,000 |
) |
|
|
- |
|
Acquisition
of fixed assets |
|
|
(8 |
) |
|
|
(5 |
) |
Net cash
used in investing activities |
|
|
(5,478 |
) |
|
|
(3,042 |
) |
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds
from warrants exercised |
|
|
43 |
|
|
|
515 |
|
Proceeds
from issuance of shares and ADSs |
|
|
2,594 |
|
|
|
4,683 |
|
Share and
ADS issuance expenses paid |
|
|
(264 |
) |
|
|
(407 |
) |
Proceeds
from issuance of warrants |
|
|
3,406 |
|
|
|
3,467 |
|
Warrants
issuance expenses paid |
|
|
(347 |
) |
|
|
(301 |
) |
Repayment of
lease liability |
|
|
(89 |
) |
|
|
- |
|
Interest
paid |
|
|
(14 |
) |
|
|
(7 |
) |
Net cash
provided by financing activities |
|
|
5,329 |
|
|
|
7,950 |
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents |
|
|
(2,419 |
) |
|
|
1,426 |
|
Cash and
cash equivalents at the beginning of the period |
|
|
5,163 |
|
|
|
3,947 |
|
Effect of
translation adjustments on cash and cash equivalents |
|
|
13 |
|
|
|
(10 |
) |
Cash and
cash equivalents at the end of the period |
|
|
2,757 |
|
|
|
5,363 |
|
Kitov Pharma (NASDAQ:KTOV)
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