Polyphor announces financial results for the first half 2020

Polyphor AG (SIX: POLN), a research-driven clinical-stage, Swiss biopharmaceutical company committed to discovering and developing best-in-class molecules in oncology and antimicrobial resistance, today announced its financial results for the first half of 2020 and provided a business update.

“Despite the unprecedented challenges brought by the COVID-19 pandemic, Polyphor has made significant progress during the first half of 2020. Most notably, due to our proactive measures to safeguard patients, investigators and the study conduct of the Phase III balixafortide (FORTRESS) trial, we have been able to successfully continue the enrollment and execution of the program and expect to complete enrollment in the coming weeks", says Gokhan Batur, CEO of Polyphor. "We are very pleased with the exclusive licensing agreement for China with our new partner Fosun Pharma. This agreement is a strong recognition of the scientific value and commercial potential of balixafortide. Along with our diligent financial planning, this deal has extended our cash runway well into Q3 2021, with additional flexibility through an equity-linked financing arrangement with IRIS.”

Strong FORTRESS Phase III study progress with balixafortide
Polyphor's FORTRESS study, a pivotal Phase III study evaluating balixafortide (POL6326) in combination with eribulin for the treatment of patients with HER2 negative, locally recurrent or metastatic breast cancer, has randomized 366 patients as per August 31, 2020. Polyphor expects to complete enrollment in the coming weeks reaching 320 patients in 3^rd or later lines as specified by the protocol. Currently the trial has enrolled 279 patients with third line and later and 87 second line patients.

The independent Data Safety Monitoring Board (DSMB) has completed the first and second, pre-specified interim analyses, of safety outcomes for the 193 and 284 randomized patients in the FORTRESS study and recommended that it should continue without any modifications.

The key primary endpoint, Progression Free Survival (PFS) data, is expected in Q4 2021 to serve as a basis for a regular submission of an New Drug Application (NDA) and Marketing Authorisation Application in the U.S. (fast track granted) and EU, respectively. The first coprimary endpoint, Objective Response Rate (ORR) data, is expected in Q2 of 2021. These data could potentially lead to an accelerated approval in the U.S. Completion of the dossier for the NDA filing is on track to support potential breakthrough designation.

Exclusive licensing agreement for balixafortide in China
In August 2020, Polyphor has entered into an exclusive licensing agreement for balixafortide in China with Fosun Pharma, one of the leading Chinese healthcare companies, which has a global footprint. This agreement represents an important next milestone for the development and commercialization of balixafortide in one of the largest markets in oncology, and is a strong validation from a leading innovative Chinese healthcare company. Polyphor is entitled to a USD 15 million upfront payment, is eligible for additional development milestone payments of up to USD 19 million, sales milestone payments of up to USD 148 million and royalties on net sales in the territory, which start in the low double digits and increase to the mid-teens based on net sales achieved.

Oncology pipeline expansion
Polyphor is spearheading a novel immuno-oncology approach with balixafortide in metastatic breast cancer. Depending on positive ORR and PFS results balixafortide could represent a significant business opportunity in the initial indication with the potential to build a pipeline around balixafortide.

Because there is strong evidence that CXCR4 tumor expression correlates with poor outcomes in earlier lines of metastatic breast cancer and in many other solid cancer types, Polyphor intends to investigate balixafortide as a novel treatment option in earlier lines of metastatic breast cancer and tumors with other combinations beyond breast cancer. The company is also conducting preclinical experiments with balixafortide in different combinations and plans to initiate a Phase Ib/II trial in earlier lines of metastatic breast cancer in Q4 2020. Beyond balixafortide, Polyphor plans to investigate new lead compounds to be nominated as development candidates following potential positive ORR results.

Preparing to initiate Phase I study of inhaled murepavadin in Q4 2020
Polyphor’s inhaled murepavadin program is largely funded by the Innovative Medicines Initiative (IMI), a partnership between the European Union and the European pharmaceutical industry. The available non-clinical and translational studies suggest significantly higher safety margins (at least 5–10 times) versus the intravenous formulation, so the likelihood of inhaled murepavadin causing kidney damage at the planned doses in humans is expected to be low. In the first half of 2020, Polyphor focused on optimizing a formulation of inhaled murepavadin to prepare for the first human trials. The Clinical Trial Application (CTA) is expected in Q4 2020 and the start of a Phase I study shortly thereafter.

Infections remain a significant problem for people with cystic fibrosis who require novel treatment options, despite the availability of CFTR modulators. If approved for commercial use, inhaled murepavadin would be the first new class of antibiotics for Gram-negative pathogens in the last 50 years. It would also be the first agent to target specifically Pseudomonas aeruginosa bacteria versus the current standard of care, broad spectrum inhaled antibiotics.

Renewed preclinical antibiotic strategy
Antimicrobial resistance (AMR) is a leading cause of mortality for COVID-19 patients due to secondary infections, and awareness of such public health threats has risen substantially amongst the public, policy makers and healthcare providers during the pandemic. Polyphor is continuing its research and preclinical development efforts of the OMPTA BamA program with an ongoing partnership with CARB-X.

Polyphor has also a new program within the OMPTA class, thanatin derivatives, specifically targeting Enterobacteriaceae including multidrug resistant strains, which is progressing well. The company continues to conduct research and development for the antibiotics pipeline with the support of existing and future non-dilutive and/or external financing to ensure external scientific validation while minimizing the impact of these programs on the cash position.

Financial results
Polyphor started 2020 with a strong financial position, a renewed strategy and organizational restructuring. In the first half of 2020, the majority of the cash position was allocated to the balixafortide program, while cystic fibrosis and antibiotics drug candidates have been largely externally funded.

In the first half of 2020, the total loss was CHF 27.8 million. R&D costs were primarily driven by the balixafortide Phase III trial, and are expected to decrease slightly in Q4 2020 following the closure of patient enrollment. The total cash position was CHF 43.7 million (cash and cash equivalents) as of June 30, 2020.

Polyphor has entered into an equity-linked financing arrangement with the French company IRIS to raise a gross amount of up to CHF 19.3 million over a period of two years providing additional flexibility in extending current cash if needed.

In addition, Polyphor is entitled to a USD 15 million upfront payment as part of the partnering agreement with Fosun Pharma. As a result of diligent financial stewardship we revise our guidance for operating expenses to CHF 57 million to CHF 59 million for 2020. Based on projected cash and the expected upfront payment from Fosun Pharma, our operations are financed throughout 2020 and well into Q3 2021. The equity-linked financing arrangement with IRIS allows for additional flexibility to further extend our cash outlook if needed.

Financial Highlights

CHF millions

1) based on the consolidated IFRS financial statements
2) represents the average monthly cash used in operating and investing activities