Source: Hemispherx Biopharma, Inc.
Letter to Shareholders Posted on Website
Revenue
Up, Burn Rate Down Dramatically; Progress Cited with FDA Discussions on
Ampligen; Manufacturing Facility for FDA-Approved Alferon N Fully
Repaired; Immuno-oncology Seen as Major Opportunity
Hemispherx Biopharma (NYSE American:HEB) announced the posting of a letter to shareholders on its website, www.hemispherx.com, in which CEO Thomas K. Equels reviews corporate activities progress over the past nine months and outlines key objectives going forward.
The letter appears below:
To our shareholders:
We
have achieved significant milestones during the short period of time I
have been CEO. We are making steady progress with our plans to
commercialize Alferon N Injection®, expand the market opportunities for
Ampligen®, and streamline operating infrastructure and related costs to
put us on a stronger financial footing.
Drastically reduced our cash burn rate while aggressively opening new opportunities for Ampligen in the fast-growing field of immuno-oncology |
Specifically,
revenue for the first nine months of 2017 totaled $387,000, a greater
than five-fold increase compared to $76,000 a year ago, and our net loss
for the quarter ended September 30, 2017 decreased by more than 50
percent to $1.3 million from $2.9 million a year-ago. The more than
fifty-percent decrease is attributed to a reduction of operating
expenses of $0.5 million and an increase in revenue of $1.4 million
resulting from the revaluation of the redeemable warrants as of
September 30, 2017. Operating costs and expenses, inclusive of research
and development, were $2.7 million in the quarter just ended vs. $3.2
million in the year-ago period. The bottom line is we have achieved
important milestones and reduced expenses as compared to prior years.
Moreover,
we have tremendous confidence in our product portfolio. I believe
Ampligen is the ‘shape of things to come’ in immunology. It is poised to
potentially become an important therapy in the rapidly expanding field
of immuno-oncology. It is the only activator of Toll-like Receptor 3
with a well-established safety record.
Some of
the key developments in our Ampligen program have included regulatory
approval in one of South America’s largest markets, a stepped-up
collaboration to support a regulatory submission for ME/CFS in Canada,
positive results from an intranasal safety study, and several new
initiatives to leverage the immunotherapeutic properties of Ampligen in
state-of-the-art cancer treatment strategies.
Key Advancements For Ampligen
- Ampligen
has been approved in Argentina for severely debilitated Myalgic
Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) patients and we are
pursuing similar approvals in Chile and Peru. We are collaborating with
Millions Missing Canada to bring Ampligen to Canadians suffering from
ME/CFS. In addition, we are in continuing discussions with the FDA
regarding our New Drug Application in ME/CFS. Ampligen is the only drug
to have completed a Phase 3 clinical trial in the U.S. in ME/CFS, a
condition which according to the Center for Disease Control (CDC)
afflicts more than one million people in this country. Taking into
account that trial’s results, and the FDA’s indication at our last
meeting that they would be open and receptive to review a proposal by
the Sponsor (Hemispherx), we plan to seek approval tied to a protocol we
are developing for conducting a study, limiting enrollment to patients
with high responder potential.
- Earlier this year we
began supplying Ampligen for pancreatic cancer patients in an Early
Access Program (EAP) in the Netherlands managed by myTomorrows, an
international leader in providing physicians with early access to
experimental drugs.
- Significant research at the
University of Pittsburgh and Roswell Park Cancer Center is underway to
determine the extent to which Ampligen alone and in combination with
other agents may prime the tumor microenvironment in ways that could
improve the lethality of cancer-killing T cells in conjunction with PD-1
and PD-L1 checkpoint inhibitors, such as Keytruda from Merck and Opdivo
from Bristol-Myers Squibb. The success of these studies and others
being planned could lead to a significant advance in the fast-growing
field of immuno-oncology.
- Attracting a greater number of
antigen-specific cytotoxic T cells into the tumor microenvironment
while increasing their ratio to immunosuppressive Treg cells is expected
to significantly improve the overall effectiveness of checkpoint
inhibitors, a new class of drugs designed to destroy the blocking
mechanisms that prevent effector cytotoxic T cells from attacking tumor
cells. The use of checkpoint inhibitors is growing rapidly (Cowan &
Co. projects sales to grow to $30 billion annually by 2020) and we are
developing Ampligen with the anticipation of it becoming an integral
part of combinational therapies tapping into that growth.
- We recently commenced full data analysis of an intranasal vaccine study of Ampligen plus FluMist. Intranasal Ampligen was generally well-tolerated in this study. Numerous studies have shown that Ampligen is a generally well-tolerated and highly selective Toll-like Receptor 3 agonist capable of inducing the innate immune responses needed for adaptive protective immunity. Monkeys immunized with H5N1 vaccine and Ampligen showed enhanced protection against a highly pathogenic H5N1 virus. Mouse models showed Ampligen generates cross-protection against 3 clades of highly pathogenic H5N1 using a seasonal vaccine. The human intranasal safety study demonstrated antibodies against viral strains not present in the immunizing vaccine. Highly pathogenic bird strains of influenza remain a clear and present human danger for a devastating influenza pandemic. Only one or two mutations in the viral attachment receptor of these highly pathogenic bird influenza viruses are required to provide an easily spread and highly lethal virus in humans. The clinical data from our FluMist study extends the mouse and monkey studies. The experimental data suggests that intranasal immunization with Ampligen may provide a rapid and well tolerated means of protection in at-risk humans. We are currently exploring co-development partnerships with vaccine producers.
Our
cancer-directed programs with Ampligen build on a safety data base
consisting of approximately 100,000 Ampligen doses, primarily in ME/CFS
trials, and earlier Phase 1/2 oncology clinical studies including renal
cell carcinoma and metastatic melanoma.
We have
finalized a commercial-scale “fill and finish” production agreement to
fulfill our forecasts for Ampligen demand in 2018. New inventory is
planned to be available 2Q18 for Argentina, for US based clinical
studies and for Early Access Program sales in Europe.
New Jersey manufacturing facility - completed work to resume production and awaiting funding and FDA re-certification |
It
will cost about $10 million to put the Alferon manufacturing line at
the New Brunswick, NJ plant back into full operation. We are exploring
several avenues for funding. While the insurance has fully covered the
physical damage to the plant, we are still working to get additional
coverage under policy provisions which will help us defray the costs of
restarting production. In the interim we are also examining other
options, including co-development opportunities.As many of you know, we
experienced a major setback in our Alferon N Injection program when a
broken water main for the sprinkler system flooded key sections of our
New Jersey manufacturing facility. Insurance has reimbursed us for all
the physical damage and all repair and reconstruction work has been
completed. The next step is FDA re-certification of the facility.
We
have an agreement with Asembia, a leading national supplier to
specialty pharmacies, to market and distribute the product in the U.S.
when manufacturing resumes. Alferon N is approved for refractory or
recurring external genital warts in the US and Argentina, and is also
approved in Argentina for any patient refractory to recombinant
interferon.
In summary, the stage is set for
Hemispherx to capitalize on significant new opportunities during the
balance of this year and 2018. We have repaired our flood-damaged
manufacturing facility. It is now ready, pending additional start-up
funding and FDA certification, to produce FDA-approved Alferon N
Injection. A marketing and distribution agreement is in place. We have
secured our first country approval for Ampligen in ME/CFS and we expect
several more in the coming years. We are steadily expanding our EAP
strategy for Ampligen internationally. We are making progress in
defining the next steps for FDA registration of Ampligen. We are
aggressively opening new opportunities for Ampligen in the fast-growing
field of immuno-oncology. All of this is being accomplished with
cautious use of capital and our commitment to increasing shareholder
value. Our new management motto is EFFICIENT EXECUTION OF PRIORITY
GOALS. We have accomplished all the above while slashing the burn rate
by 50 percent.
I look forward to keeping you updated on our progress.
/s/Thomas K. Equels
Chief Executive Officer
Hemispherx Biopharma, Inc. is an advanced specialty pharmaceutical company engaged in the clinical development of new drug entities for treatment of seriously debilitating disorders. Hemispherx’s flagship products include Alferon N Injection® and the experimental therapeutic rintatolimod (tradenames Ampligen® or Rintamod®). Rintatolimod is an experimental RNA nucleic acid being developed for globally important debilitating diseases and disorders of the immune system, including Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS). Hemispherx’s platform technology includes components for potential treatment of various severely debilitating and life threatening diseases. Because rintatolimod is experimental in nature, it is not designated safe and effective by the FDA for general use and is legally available only through clinical trials.
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