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
unaudited financial results for the quarter ended September 30,
2017.
Xenetic also provided a corporate update 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.
Recent Corporate Highlights:
- Appointed Jeffrey F. Eisenberg as Chief
Executive Officer;
- Entered into Right to Sublicense
Agreement related to the Company’s PolyXen Technology with Baxalta
Inc., a wholly-owned subsidiary of Shire plc; and
- Commenced patient dosing in the Phase 2
clinical study of XBIO-101 in conjunction with progestin therapy
for the treatment of endometrial cancer.
“I believe we are well positioned to build on the momentum of
our recent corporate and clinical achievements. We remain focused
on the solid execution of our Phase 2 study of XBIO-101 for the
treatment of endometrial cancer, with the goal of announcing
interim data before the end of next year. Further, our recent right
to sublicense agreement with Baxalta not only leverages our PolyXen
platform technology and provides a source of non-dilutive capital,
but also positions Xenetic for value driving opportunities in the
near and long-term,” stated Jeffrey Eisenberg, Chief Executive
Officer of Xenetic Biosciences.
XBIO-101 Program Update
Patient dosing recently commenced for the Company’s 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 this open-label, multi-center,
single-arm, two-period Phase 2 study is to assess the anti-tumor
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.
The Company expects to announce interim data from the Phase 2
study before the end of 2018.
PolyXen Platform Technology Update
The Company recently announced that it has entered into a Right
to Sublicense Agreement (the “Right to Sublicense Agreement”) with
Baxalta Incorporated, Baxalta US Inc., and Baxalta GmbH
(collectively, with their affiliates, “Baxalta”), wholly-owned
subsidiaries of Shire plc (LSE: SHP, NASDAQ: SHPG). Pursuant to the
Right to Sublicense Agreement, Xenetic granted to Baxalta the right
to grant a nonexclusive sublicense to certain patents related to
the Company’s PolyXen technology that were previously exclusively
licensed to Baxalta pursuant to an agreement between the Company
and Baxalta in connection with products relating to the treatment
of blood and bleeding disorders.
As part of the Right to Sublicense Agreement, Baxalta paid
Xenetic a one-time payment of $7.5 million and is expected to make
single digit royalty payments based upon net sales of the products
covered under the related sublicense throughout the term of the
agreement.
Additionally, Xenetic expects to continue to pursue business
development activities to explore partnerships utilizing its
PolyXen delivery platform.
Summary of Financial Results for Third Quarter 2017
Net loss for the nine months ended September 30, 2017, was $8.0
million compared to a net loss of approximately $53.8 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 $0.7 million of
cash. With the addition of the $7.5 million milestone payment under
the Right to Sublicense Agreement, as of the date of this release,
the Company’s current cash position is approximately $8.0 million.
Based on management’s current projections, the Company has
sufficient cash to fund its operations through the second quarter
of 2018.
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 lead investigational product candidate is
oncology therapeutic XBIO-101 (sodium cridanimod) for the treatment
of progesterone resistant endometrial cancer. Further, Xenetic's
proprietary drug development platform, PolyXen, enables
next-generation biologic drugs by improving their half-life and
other pharmacological properties. The Company has ongoing business
development activities to explore partnerships utilizing its
PolyXen delivery platform.
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 for
purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements contained in this
press release other than statements of historical facts may
constitute forward-looking statements within the meaning of the
federal securities laws. These statements can 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 the
Company’s ability to develop and customize the Company’s PolyXen
platform technology to improve the clinical utility of protein and
peptide drugs; the Company’s anticipated corporate development
strategies and pursuit of current and future collaborations to
co-develop new product candidates; its ability to add new programs
to its pipeline and expand the development of its current product
candidates into new indications; the initiation, timing, progress,
enrollment and reporting of results of its preclinical programs and
clinical trials; the Company’s potential for future growth and
creation of shareholder value; the Company’s expectation of cash
flow from the royalties under the Right to Sublicense Agreement;
and the Company’s liquidity and ability to fund its future
operations;. Any forward-looking statements contained herein are
based on current expectations, and are subject to a number of risks
and uncertainties. Many factors could cause our actual activities
or results to differ materially from the activities and results
anticipated in forward-looking statements. These risks and
uncertainties include those described in the "Risk Factors" section
of the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2016 and filed with the Securities and Exchange
Commission on March 31, 2017, and subsequent reports that it may
file with the Securities and Exchange Commission. 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 product candidates 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 the Company does not undertake any
obligation to update forward-looking statements, except as required
by law.
XENETIC BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
September 30, 2017
December 31, 2016
(Unaudited) ASSETS Current assets: Cash $ 694,752 $
4,048,131 Restricted cash 66,510 66,510 Accounts receivable 42,500
3,000,000 Prepaid expenses and other 1,245,252
1,224,009 Total current assets
2,049,014 8,338,650 Property and equipment, net 32,293
42,366 Goodwill 3,283,379 3,283,379 Indefinite-lived intangible
assets 9,243,128 9,243,128 Other assets 31,831
66,342 Total assets $ 14,639,645
$ 20,973,865 LIABILITIES
AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $
1,026,728 $ 1,006,903 Accrued expenses 1,113,446 838,888 Deferred
revenue and other current liabilities 21,071
20,205 Total current liabilities
2,161,245 1,865,996 Deferred tax liability 2,918,518
2,918,518 Other liabilities 4,980
19,876 Total liabilities
5,084,743 4,804,390
Commitments and contingent liabilities Stockholders'
equity: Preferred stock, 10,000,000 shares authorized Series B,
$0.001 par value: 2,120,742 and 2,305,742 issued and outstanding as
of September 30, 2017 and December 31, 2016, respectively 2,120
2,305 Series A, $0.001 par value: 970,000 shares issued and
outstanding as of September 30, 2017 and December 31, 2016 970 970
Common stock, $0.001 par value; 45,454,546 shares authorized as of
September 30, 2017 and December 31, 2016; 9,041,426 and 8,731,029
shares issued as of September 30, 2017 and December 31, 2016,
respectively; 8,717,541 and 8,407,144 shares outstanding as of
September 30, 2017 and December 31, 2016, respectively 9,040 8,730
Additional paid in capital 164,948,674 163,522,921 Accumulated
deficit (150,378,456 ) (142,338,005 ) Accumulated other
comprehensive income 253,734 253,734 Treasury stock
(5,281,180 ) (5,281,180 ) Total
stockholders' equity 9,554,902
16,169,475 Total liabilities and stockholders'
equity $ 14,639,645 $ 20,973,865
XENETIC BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
THREE MONTHS
ENDEDSEPTEMBER 30, NINE
MONTHS ENDEDSEPTEMBER 30,
2017 2016
2017
2016 Revenue
Collaboration services $ 85,000
$ – $ 85,000
$ – Total revenues 85,000 –
85,000
– Operating costs and expenses: Cost of research and
development revenue (97,028 ) – (156,119 ) – Research and
development (884,797 ) (891,828 ) (2,979,778 ) (3,526,322 )
In-process research and development expense – – – (39,500,000 )
General and administrative (1,343,671 )
(1,359,801 ) (4,948,675 )
(4,339,844 ) Loss from operations
(2,240,496 ) (2,251,629 )
(7,999,572 ) (47,366,166
) Other non-operating income (expense): Change in fair value
of derivative liability – 241,298 – 2,146,587 Loss on issuance of
hybrid debt instruments – (106,566) – (1,690,784 ) Loss on
conversion of debt – – – (6,187,337 ) Other income (expense)
(14,979 ) (13,440) (49,611 ) (26,991 ) Interest income – 4 10,201
31 Interest expense (425 )
(341,648 ) (1,469 )
(690,118 ) Total other non-operating expense
(15,404 ) (220,352 )
(40,879 ) (6,448,612 )
Net loss $ (2,255,900 ) $ (2,471,981 )
$ (8,040,451 ) $
(53,814,778 )
Basic and diluted loss per share $
(0.26 ) $ (0.28 ) $ (0.93
) $ (7.54 ) Weighted-average shares of
common stock outstanding, basic and diluted 8,717,541
8,987,145
8,648,314 7,134,352
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Jenene Thomas Communications, LLC.Jenene Thomas,
908-938-1475jenene@jenenethomascommunications.com
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