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 June 30,
2017.
Xenetic also 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, and an update on its proprietary PolyXen™ platform
technology.
“The second quarter was marked by the advancement of our
flagship program, XBIO-101, into our Phase 2 program for the
treatment of endometrial cancer, along with the important data we
received from Shire’s Phase 1/2 study of SHP656, which utilized our
PolyXen platform technology. While this study did not meet its
primary endpoint and Shire has subsequently stated the program has
been discontinued, key findings from the study specific to our
PolyXen platform technology, provide further validation that it has
the potential to improve the clinical utility of protein and
peptide drugs,” stated M. Scott Maguire, Xenetic’s CEO.
XBIO-101 Program Update
In the second quarter of 2017, the Company commenced patient
enrollment for its 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 the open-label, multi-center,
single-arm, two-period Phase 2 study is to assess the antitumor
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.
Xenetic has also filed a protocol under its existing
Investigational New Drug application to expand the development of
XBIO-101 into a biomarker study related to the treatment of triple
negative breast cancer.
Expected Upcoming Milestones
- Commence patient dosing in the Phase 2
clinical study evaluating XBIO-101 in conjunction with progestin
therapy for the treatment of progestin resistant endometrial cancer
in Q3 2017; and
- Announce interim data from Phase 2
study before the end of 2018.
PolyXen Platform Technology Update
In May 2017, the Company, along with its strategic collaborator,
Shire plc (LSE: SHP, NASDAQ: SHPG), announced data from Shire’s
Phase 1/2 program of SHP656, its PSA-Recombinant Factor VIII
(“rFVIII”), which was being developed as a long-acting therapeutic
for the treatment of hemophilia A, utilizing Xenetic's PolyXen
platform technology to conjugate polysialic acid to therapeutic
blood-clotting factors. Despite not achieving the principal
objective of once-weekly dosing in this Phase 1/2 study, the
Company’s PolyXen technology demonstrated that it works as a
platform to successfully extend the circulating half-life of rFVIII
with no drug-related serious adverse events reported to date.
Including the Company’s own studies with a polysialylated
erythropoietin (“PSA-EPO”, “ErepoXen™”) candidate, this is the
second instance in which PolyXen platform technology has been
demonstrated, in a human clinical trial setting, to confer extended
half-life to a biotherapeutic, while maintaining pharmacological
activity and a favorable safety and tolerability
profile. Moving forward, Xenetic believes data from Shire’s
SHP656 program, although discontinued, continues to support the
broad utility of its proprietary PolyXen technology platform, and
expects the growing body of data from this platform will enable the
Company to build a pipeline of partnerships utilizing this proven
technology.
Expected Next Steps
- Pursue business development activities
to identify target molecules to explore partnerships utilizing
PolyXen delivery platform; and
- Explore other potential applications of
the PolyXen platform technology within the Shire portfolio.
“We remain focused on driving forward with our strategy,
including the continued advancement of our lead product candidate
XBIO-101, as well as leveraging our proprietary PolyXen platform
technology with the goal of building shareholder value in both the
near and long-term,” concluded Mr. Maguire.
Summary of Financial Results for Second Quarter 2017
Net loss for the three months ended June 30, 2017, was $2.9
million compared to a net loss of approximately $47.8 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 $2.3 million of
cash.
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, and a polysialylated
form of erythropoietin for the treatment of anemia in pre-dialysis
patients with chronic kidney disease.
Xenetic is party to an agreement with Baxalta US Inc. and
Baxalta AB (wholly owned subsidiaries of Shire plc) covering the
development of a novel series of polysialylated blood coagulation
factors. 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. The first program under this agreement was a next
generation Factor VIII, and this program was terminated by Shire
following a Phase 1/2 clinical trial. Xenetic and Shire are
currently exploring whether to engage in further development of
other blood coagulation factors. Additionally, Xenetic has
previously received strategic investments from OPKO Health (Nasdaq:
OPK), Serum Institute of India Limited and PJSC Pharmsynthez.
Xenetic is also developing a broad pipeline of clinical
candidates for next-generation 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 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; 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
June 30, 2017
December 31, 2016 (Unaudited)
ASSETS Current assets: Cash $ 2,331,950 $ 4,048,131
Restricted cash 66,510 66,510 Accounts receivable – 3,000,000
Prepaid expenses and other 1,432,512
1,224,009 Total current assets 3,830,972 8,338,650
Property and equipment, net 37,610 42,366 Goodwill 3,283,379
3,283,379 Indefinite-lived intangible assets 9,243,128 9,243,128
Other assets 43,380 66,342
Total assets $ 16,438,469 $
20,973,865 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable $ 1,013,316 $ 1,006,903
Accrued expenses 920,313 838,888 Deferred revenue and other current
liabilities 67,495 20,205
Total current liabilities 2,001,124 1,865,996 Deferred tax
liability 2,918,518 2,918,518 Other liabilities 10,016
19,876 Total liabilities
4,929,658 4,804,390
Commitments and contingent liabilities (Note 10)
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 June 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 June 30, 2017 and December 31, 2016 970 970
Common stock, $0.001 par value; 45,454,546 shares authorized as of
June 30, 2017 and December 31, 2016; 9,041,426 and 8,731,029 shares
issued as of June 30, 2017 and December 31, 2016, respectively;
8,717,541 and 8,407,144 shares outstanding as of June 30, 2017 and
December 31, 2016, respectively 9,040 8,730 Additional paid in
capital 164,646,683 163,522,921 Accumulated deficit (148,122,556 )
(142,338,005 ) Accumulated other comprehensive income 253,734
253,734 Treasury stock (5,281,180 )
(5,281,180 ) Total stockholders' equity 11,508,811
16,169,475 Total liabilities and
stockholders' equity $ 16,438,469 $ 20,973,865
XENETIC BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
THREE MONTHS ENDEDJUNE
30, SIX MONTHS ENDEDJUNE 30,
2017
2016 2017
2016 Operating costs and expenses:
Cost of research and
development revenue $ (59,091 ) $ – $ (59,091 ) $ – Research and
development (873,837 ) (2,205,213 ) (2,094,981 ) (2,634,494 )
In-process research and development expense – (39,500,000 ) –
(39,500,000 ) General and administrative (1,970,471 )
(1,557,677 ) (3,605,004 )
(2,980,043 ) Loss from operations (2,903,399 )
(43,262,890 ) (5,759,076
) (45,114,537 ) Other non-operating
income (expense): Change in fair value of derivative liability –
1,769,275 – 1,905,289 Loss on issuance of hybrid debt instruments –
– – (1,584,218 ) Loss on conversion of debt – (6,187,337 ) –
(6,187,337 ) Other income (expense) (25,276 ) 12,863 (34,632 )
(13,551 ) Interest income 10,201 13 10,201 27 Interest expense
(456 ) (103,086 )
(1,044 ) (348,470 ) Total other non-operating
expense (15,531 ) (4,508,272 )
(25,475 ) (6,228,260 )
Net loss $ (2,918,930 ) $ (47,771,162 )
$ (5,784,551 ) $ (51,342,797 ) Basic and
diluted loss per share $ (0.34 ) $ (6.12 )
$ (0.67 ) $ (8.28 ) Weighted-average
shares of common stock outstanding, basic and diluted
8,706,387 7,804,187
8,613,127 6,197,776
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Jenene Thomas Communications, LLC.Jenene Thomas,
908-938-1475jenene@jenenethomascommunications.com
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