You should read the following discussion and analysis of our financial condition
and results of operations together with our consolidated financial statements
and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and
our Annual Report on Form 10-K for the year ended
Overview
We are a precision oncology company focused on the development of targeted therapeutics for the treatment of cancer in genomically defined patient populations. Our vision is to elevate precision medicine to the forefront of every cancer treatment journey, as we believe that each patient living with cancer deserves the opportunity to benefit from a genomically-driven treatment decision. We utilize our deep expertise in developing drugs for rare, genomically defined patient populations and strategic collaborations with our diagnostic collaborators to work towards a future where each tumor's unique genomic test result can be matched with a purpose-built precision medicine.
We are focused on identifying oncogenic drivers that are known to be predominantly mutually exclusive with other driver alterations, and pursuing innovations and efficiencies in the conduct of clinical trials that we believe may enable development of targeted therapeutics against those oncogenic drivers.
Our most advanced program is focused on NRG1 fusions, which are rare genomic
alterations that have been identified as oncogenic driver alterations and that
we believe have the potential to be therapeutically actionable through targeted
HER3 inhibition. We have designed and initiated our potentially
registration-enabling Phase 2 CRESTONE trial to investigate the safety and
efficacy of seribantumab, an anti-HER3 monoclonal antibody, in advanced solid
tumors harboring an NRG1 fusion. We are conducting this trial in a
tumor-agnostic fashion, such that any patient with a solid tumor that harbors an
NRG1 fusion, regardless of the tissue of origin, may be eligible. We believe
that the design and conduct of the CRESTONE trial has the possibility to produce
results that may provide support for us to seek accelerated approval of
seribantumab for patients with advanced solid tumors harboring an NRG1 fusion,
subject to discussions with the
In
In
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From 12 evaluable patients with a median of one line of prior systemic therapy,
the investigator-assessed objective response rate (INV-ORR) was 33% across all
? tumor types, including two complete responses (CRs; 17%) and two partial
responses (PRs; 17%). In patients with non-small cell lung cancer (n=11), the
INV-ORR was 36%.
? Durations of response ranged from 1.4 - 11.5 months.
There was a favorable and tolerable safety profile across 35 patients with
eight different tumor types evaluable for safety from Cohorts 1, 2, and 3 along
? with those from the safety run-in portion of the study. The majority (80%) of
adverse events ("AEs") were mild or moderate (Grade 1 or 2) in severity, with
two Grade 3 treatment-related adverse events ("TRAEs") and no Grade 4 or 5
TRAEs. No patients discontinued seribantumab due to AEs.
We expect to report additional interim data from Cohort 1 of the CRESTONE trial in the first half of 2023, followed by topline data in 2024.
In
SYSA1801 is currently being evaluated by
We also plan to expand our drug development pipeline beyond seribantumab and
EO-3021 into additional genomically defined cancers by leveraging our
value-driving partnerships with
In
We were incorporated in
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preferred stock. In
Since inception, we have incurred significant operating losses annually and on
an aggregate basis. Our ability to generate product revenue sufficient to
achieve profitability will depend on the successful development and eventual
commercialization of one or more of our current or future product candidates.
Our net losses were
We believe our cash, cash equivalents and marketable securities of
Impact of COVID-19
Since it was reported to have surfaced in
While we are currently continuing the clinical trials we have underway, COVID-19 precautions may directly or indirectly impact the timeline for some of our clinical trials. To date, the COVID-19 pandemic has not affected our enrollment of patients in our Phase 2 CRESTONE clinical trial and we currently do not anticipate any interruptions of clinical enrollment which would be primarily due to the COVID-19 pandemic. However, we are continuing to assess the potential impact of the COVID-19 pandemic on our current and future business and operations, including our expenses and clinical trials, as well as on our industry and the healthcare system.
The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including expenses, clinical trials and research and development costs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international markets.
Components of our Results of Operations
Operating Expenses
Research and Development Expenses
Our operating expenses have consisted solely of research and development costs and general and administrative costs. Research and development expenses consist primarily of costs related to our research activities, including the development
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of our product candidates, and costs incurred for the in-licensing of EO-3021. Our research and development expenses include:
a one-time, upfront payment of
? License Agreement for the exclusive rights to develop and commercialize EO-3021
in the Territory. Of this amount,
development expense and
employee-related expenses, including salaries, related benefits, and
? stock-based compensation expense for employees engaged in research and
development activities;
external research and development expenses incurred in connection with the
? preclinical and clinical development of seribantumab, as well as the
preclinical development of EO-3021, including expenses incurred under
agreements with contract research organizations and consultants;
costs incurred with contract manufacturing organizations that manufacture drug
? products for use in our preclinical studies and clinical trials of
seribantumab;
? fees paid to consultants for services directly related to our product
development and regulatory efforts; and
? costs related to compliance with regulatory requirements related to conducting
our clinical activity.
Research and development costs consist of salaries and benefits, including associated stock-based compensation, and fees paid to other entities that conduct certain research and development activities on our behalf. Research and development costs are expensed as incurred. We estimate preclinical study and clinical trial expenses based on the services performed pursuant to contracts with research institutions and contract research organizations, and clinical manufacturing organizations that conduct and manage preclinical studies and clinical trials on our behalf based on actual time and expenses incurred by them. Further, we accrue expenses related to clinical trials based on the level of patient activity according to the related agreement. We monitor patient enrollment levels and related activity to the extent reasonably possible and adjust estimates accordingly.
To date, our research and development expenses have primarily been incurred to advance seribantumab and in-license EO-3021. We expect that significant additional spending will be required to progress seribantumab through the remainder of its clinical development, as well as advance EO-3021 and any future product candidate through clinical development. These expenses will primarily consist of expenses for the administration of clinical studies as well as manufacturing costs for clinical material supply. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of any of our product candidates.
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The following table provides a breakout of our research and development expenses by major categories of expense:
Three months ended Nine months ended September 30, September 30, 2022 2021 2022 2021 (in thousands) Seribantumab$ 5,729 $ 7,745 $ 29,119 $ 13,881 EO-3021 25,895 - 25,895 - Unallocated and other research and development expenses 508 611 2,547 1,240 Unallocated personnel costs (including stock-based compensation) 2,208 942 6,654 2,225
Total research and development expenses
The successful development and commercialization of seribantumab, EO-3021 or our other future product candidates is highly uncertain. The success of seribantumab, EO-3021 or any other future product candidate will depend on several factors, including the following:
? successful completion of preclinical studies and clinical trials, including our
CRESTONE trial;
acceptance of a biologic license application, or BLA, by the FDA, or other
? similar clinical trial applications from foreign regulatory authorities for
seribantumab and our future clinical trials for our future product candidates;
? timely and successful enrollment of patients in, and completion of, clinical
trials with favorable results;
demonstration of safety, efficacy and acceptable risk-benefit profiles of our
? product candidates, including our most advanced product candidate,
seribantumab, to the satisfaction of the FDA and foreign regulatory agencies;
? our ability, or that of our collaborators, to develop and obtain clearance or
approval of companion diagnostics, on a timely basis, or at all;
receipt and related terms of marketing approvals from applicable regulatory
? authorities, including the completion of any required post-marketing studies or
trials;
raising additional funds necessary to complete clinical development of and
? commercialize our product candidates, including our most advanced product
candidate, seribantumab;
? successfully identifying future acquisition, collaboration or in-license
candidates to expand our product candidate pipeline;
obtaining and maintaining patent, trade secret and other intellectual property
? protection and regulatory exclusivity for our product candidates, including our
most advanced product candidate, seribantumab;
making arrangements with third-party manufacturers, or establishing
? manufacturing capabilities, for both clinical and commercial supplies of our
product candidates;
? developing and implementing marketing and reimbursement strategies;
establishing sales, marketing and distribution capabilities and launching
? commercial sales of our products, if and when approved, whether alone or in
collaboration with others;
? acceptance of our products, if and when approved, by patients, the medical
community and third-party payors;
? effectively competing with other therapies;
? obtaining and maintaining third-party payor coverage and adequate
reimbursement; 28 Table of Contents
? protecting and enforcing our rights in our intellectual property portfolio; and
? maintaining a continued acceptable safety profile of the products following
approval.
Many of these factors are beyond our control, and it is possible that none of our product candidates, including our most advanced product candidate, seribantumab, will ever obtain regulatory approval even if we expend substantial time and resources seeking such approval. If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business. For example, our business could be substantially harmed if results of our ongoing CRESTONE clinical trial of seribantumab vary adversely from our expectations.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and other related costs, including stock-based compensation, for personnel in our executive and administrative functions. General and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax and consulting services, and insurance costs.
We anticipate that our general and administrative expenses will increase in the
future as we support our continued research activities and development of our
product candidates. We also expect to incur increased expenses associated with
operating as a public company, including costs of accounting, audit, legal,
investor and public relations, directors and officers insurance, and regulatory
and tax related services associated with maintaining compliance with exchange
listings and
Results of Operations
Three months ended
The following table summarizes our results of operations for the three months
ended
Three months ended September 30, 2022 2021 Change (in thousands) Operating expenses: Research and development$ 34,340 $ 9,298 $ 25,042 General and administrative 4,191 2,979 1,212 Total operating expenses 38,531 12,277 26,254 Loss from operations (38,531) (12,277) (26,254) Other income (expense), net (306) 10 (316) Net loss$ (38,837) $ (12,267) $ (26,570)
Research and Development Expenses
Research and development expenses were
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General and Administrative Expenses
General and administrative expenses were
Nine months ended
The following table summarizes our results of operations for the nine months
ended
Nine months ended September 30, 2022 2021 Change (in thousands) Operating expenses: Research and development$ 64,215 $ 17,346 $ 46,869 General and administrative 11,797 5,076 6,721 Total operating expenses 76,012 22,422 53,590 Loss from operations (76,012) (22,422) (53,590) Other income (expense), net (26) 5 (31) Net loss$ (76,038) $ (22,417) $ (53,621)
Research and Development Expenses
Research and development expenses were
General and Administrative Expenses
General and administrative expenses were
Liquidity and Capital Resources
Since inception, we have not generated any revenue from product sales or any other sources and have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of any product candidates for several years, if ever.
Through
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In
In
For additional information regarding the Loan Agreement, please refer to Note 7, "Debt-K2 HealthVentures Loan and Security Agreement," to the accompanying unaudited consolidated financial statements.
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