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Polyphor announces financial results for the first half 2019 and realigns strategy
Polyphor AG (SIX: POLN), a clinical stage biopharmaceutical company, focused on the discovery and development of immuno-oncology compounds and a new class of antibiotics, publishes today its financial results for the first half of 2019 and announces a realignment of the strategy. Following the safety findings leading to the discontinuation of the murepavadin i.v. program, Polyphor has decided to realign its strategy by directing it towards its very attractive immuno-oncology Phase III asset, balixafortide, and by refocusing its activity in antibiotics towards the promising inhaled formulation of murepavadin in cystic fibrosis and the progress of the innovative OMPTA platform - both extensively leveraging external funding. Activities on murepavadin i.v. will be at this point limited to low cost preclinical studies to assess the opportunity to reengineer and possibly relaunch the product in the future. Balixafortide entering Phase III and progressing significantly In June the company announced that the first patient has been enrolled in the FORTRESS Phase III clinical study evaluating balixafortide (POL6326) in combination with eribulin for the treatment of patients with HER2 negative, locally recurrent or metastatic breast cancer (MBC). The study is progressing well. The first readout from the trial is expected around end of Q1 2021 and could lead to an accelerated approval in the US. In this combination alone, balixafortide has an estimated USD 1.3 billion market opportunity in HER2 negative MBC. Balixafortide's breast cancer market opportunity could be expanded to USD 6-7 billion if Polyphor can leverage the compound in other combination therapies, such as the widely prescribed taxanes. In addition, balixafortide may have further significant potential in other high CXCR4 expressing cancer indications, beyond MBC, in both solid and hematologic tumors - where a preclinical Proof of Concept (PoC) has already been achieved in combination with cytarabine. Some of these activities are developed in collaboration with global leading institutions such as the MD Anderson Cancer Center. Refocusing the antibiotics effort on inhaled murepavadin in CF and on the OPMTA platform - leveraging external financing Polyphor is progressing the development of inhaled murepavadin for the treatment of patients with cystic fibrosis (CF). The program is substantially funded by the Innovative Medicines Initiative (IMI), a partnership between the European Union and EFPIA, the European pharmaceutical industry association. The company expects inhaled murepavadin should not lead to kidney toxicity, given its much lower dose and local administration. It is a very attractive orphan drug opportunity, potentially changing the treatment paradigm in CF. Besides CF, inhaled murepavadin could be developed in other indications such as, for example, bronchiectasis. A Clinical Trial Application (CTA)is expected in the next 9 months (mid 2020) and start of clinical studies shortly after. In addition, after the successful completion of the collaboration with the Wellcome Trust and the closing of the funding agreement with the Novo REPAIR Impact Fund last year, Polyphor has been awarded a non-dilutive award from CARB-X (Combating Antibiotic-Resistant Bacteria Biopharmaceutical Accelerator). This award supports the preclinical and early clinical development of Polyphor's novel OMPTA candidate (POL7306), a medium spectrum antibiotic with substantial therapeutic and commercial potential, until the completion of the Phase I clinical trial. POL7306 addresses a different target than murepavadin, has a different chemical scaffold and safety studies completed suggest an adequate safety margin - to be further validated in the GLP safety and toxicology development phase, which has already started. A CTA is expected in the next 9 months (mid 2020) and start of clinical studies shortly after. Finally, for murepavadin i.v., after the discontinuation of the trial, the company concluded that a continuation would have failed to result in an adequate clinical benefit for the patients and to generate value for the shareholders. It was therefore decided to carry only low cost preclinical studies to assess the opportunity to reengineer and possibly relaunch the product in the future. Realigning the strategy, advancing the attractive pipeline, reallocating resources and strengthening the management team Product development remains the core of Polyphor's strategy. Given the considerable progress of a number of pipeline products and their value creation potential for patients and shareholders, the company is reallocating financial and personnel resources to focus clearly on the most promising programs in its portfolio, while tightly managing the organization to ensure appropriate spending. First, the strategy will focus on the further development of balixafortide, both with regard to the Phase III program and to the preclinical studies of other combinations/indications to fully exploit the potential of the asset. In addition, the company will focus on the continued development of inhaled murepavadin in cystic fibrosis and of the antibiotics of the OMPTA platform - both supported by substantial external funding. Under the current plan, the cash position will allow the company to develop balixafortide towards the next value inflection point (ORR - Objective Response Rate - around end of Q1 2021) and management is optimistic that the development programs will deliver a substantial value creation opportunity to shareholders. To effectively implement this plan, Polyphor is further strengthening its management team. Effective September 1st, Frank Weber, MD has stepped down from the Board of Directors to become the company's new Chief Medical and Development Officer, bringing his profound product development capabilities and a strong experience in oncology and immunology. In June, Gökhan Batur has joined as Chief Commercial Officer, strengthening our commercial capabilities and insights needed for the effective development of our products. Effective October 1st Hernan Levett, currently CFO of the NASDAQ listed company Auris Medical, will become CFO, succeeding Kalina Scott who will leave Polyphor to pursue other professional opportunities. Mr. Levett brings over 25 years of finance and pharma/ biotech experience at leading companies such as Acino Pharma, InterMune and Novartis. Frank Weber, Gokhan Batur and Hernan Levett are or will be members of the Executive Committee. Finally, François Ringeisen, MD, PhD will join Polyphor as per October 1st, 2019 as Head of Oncology Medical & Clinical Sciences. Dr. Ringeisen is an oncologist with over 10 years academic and clinical breast oncology experience and over 10 years industry experience in translational research, clinical development and medical affairs with leading companies such as Lilly and Novartis. "On behalf of the Board of Directors and executive team at Polyphor, I would like to welcome Hernan and François to Polyphor, two seasoned executives who will further strengthen the organization in its next phase of development," said Giacomo Di Nepi, Chief Executive Officer of Polyphor. "I would also like to thank Kalina for her many contributions to the company during these years and wish her all the best for her future." Financial results of the first half year and updated guidance 2019 Considering the development of the priority programs, the residual commitments for the closure of the murepavadin i.v. trials and overall cost management, Polyphor expects development costs to be lower than the guidance given at the beginning of 2019. In the first half of 2019 R&D cost increased by CHF 6.5 million to a total of CHF 25.3 million, mainly due to the Phase III murepavadin i.v. and balixafortide programs. The total loss for the period amounted to CHF 27.9 million. Operating cost guidance for the year 2019 has been reduced to CHF 60-65 million (previous CHF 65-80 million); cash position at the end of the year is estimated to be CHF 68-72 million (CHF 97 million at the end of June 2019). To the full financial statement