CStone Pharmaceuticals Reports First Half 2019 Financial Results

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Aug 15, 2019, 03:31 ET

SHANGHAI, Aug. 15, 2019 /PRNewswire/ -- CStone Pharmaceuticals ("CStone"; HKEX: 2616), a leading biopharmaceutical company focused on developing and commercializing innovative immuno-oncology therapies and molecularly-targeted drugs for the treatment of cancer, today released its recent business highlights and financial results for the first half of 2019.

"In the first half of 2019, our team continued to make significant progress across all functions," said Dr. Frank Jiang, Chairman and Chief Executive Officer of CStone. "On February 26, 2019, we successfully listed on the Main Board of Hong Kong Stock Exchange, which marked a significant milestone in the development of our company. We continue to build strategic partnerships, including a global collaboration with Bayer Healthcare LLC ("Bayer") to explore the potential of our lead product PD-L1 monoclonal antibody CS1001 in combination with regorafenib in multiple cancer types, and a licensing deal with Numab Therapeutics AG ("Numab") for a potential best-in-class next-generation backbone molecule. We advanced CS1001 in multiple indications in 5 registrational trials with more than 650 patients dosed. We advanced all our in-licensed products from Agios Pharmaceuticals and Blueprint Medicines, including ivosidenib, avapritinib, fisogatinib (CS3008) and pralsetinib (CS3009) into the stage of clinics for registration or potential registration. As a first step towards commercialization, we submitted a new drug application for ivosidenib in Taiwan in May 2019.

"Looking forward, we will present key data for our PD-L1 (CS1001) monoclonal antibody in esophageal cancer, gastric cancer, cholangiocarcinoma, microsatellite instable high and NKTL and Phase I clinical data for PD-1 (CS1003) and CTLA-4 (CS1002) monoclonal antibodies at upcoming Chinese Society of Clinical Oncology ("CSCO"), European Society for Medical Oncology and The American Society of Hematology in the second half of 2019. We will continue to advance multiple assets, including our PD-L1 and PD-1 monoclonal antibodies into new combination trials and registrational studies for large indications. With the continuous build-out in commercial, R&D and manufacturing capabilities, 2019 will be a transformational year for CStone and lay the foundation for the company to become a globally recognized leading Chinese biopharmaceutical company that will bring innovative therapies to cancer patients in China and globally."

FINANCIAL HIGHLIGHTS

Non-International Financial Reporting Standard ("IFRS") Measures:

The loss and total comprehensive expenses excluding the effect of the fair value changes of the conversion feature of preferred shares and share-based payment expenses decreased by RMB162.6 million from RMB439.3 million for the six months ended 30 June 2018 to RMB276.7 million for the six months ended 30 June 2019, primarily due to a decrease in our licensing fee compared to the same period in 2018.

IFRS Numbers:

Other income increased by RMB24.6 million from RMB4.0 million for the six months ended June 30, 2018 to RMB28.6 million for the six months ended June 30, 2019, primarily attributable to increases in interests from bank deposits and time deposits and gain from fair value changes of money market fund.
Other gains and losses increased by RMB493.0 million from losses of RMB202.2 million for the six months ended June 30, 2018 to losses of RMB695.2 million for the six months ended June 30, 2019, primarily attributable to a larger loss on fair value of derivative financial liabilities, which was a non-cash, one-time adjustment upon the listing as required under the IFRS.
Research and development expenses decreased by RMB125.1 million from RMB508.7 million for the six months ended June 30, 2018 to RMB383.6 million for the six months ended June 30, 2019, primarily attributable to the decrease in our licensing fee compared to the same period in 2018, and partially offset by the increase in third party contracting cost as a result of additional trials.
Administrative expenses increased by RMB130.5 million from RMB37.3 million for the six months ended June 30, 2018 to RMB167.8 million for the six months ended June 30, 2019, primarily attributable to the increase in employee cost due to the increase in headcounts and one-time share based compensation expenses relating to the IPO.
As a result of the above factors, the loss for the period increased by RMB491.5 million from RMB744.3 million for the six months ended June 30, 2018 to RMB1,235.8 million for the six months ended June 30, 2019.

BUSINESS HIGHLIGHTS

We have made significant progress with respect to our product pipeline and business operation in the first half of 2019:

We actively engaged in collaborations with multinational pharmaceutical companies. In June 2019, we entered into a global clinical collaboration with China focus with Bayer to evaluate the safety, tolerability, pharmacokinetics and antitumor activity of our PD-L1 monoclonal antibody drug CS1001 in combination with Bayer's regorafenib, an oral multi-kinase inhibitor, as a treatment for multiple cancers including gastric cancer. This is the first global proof of concept study carried out as a collaboration between the two companies. In May 2019, we entered into an exclusive regional licensing agreement with Numab that potentially provides us with access to Numab's novel multi-specific technology platform. Specifically, the agreement is for the development and commercialization of ND021, a potential best-in-class monovalent, tri-specific antibody-based molecule targeting PD-L1, 4-1BB, and HSA. We obtained exclusive rights to develop and commercialize ND021 in Greater China (including Mainland China, Hong Kong, Macau and Taiwan), South Korea and Singapore.
We made significant progress in advancing our pipeline candidates.
- PD-L1 antibody (CS1001) - In April 2019, we initiated a Phase III clinical trial of CS1001 in China for patients with gastric cancer. In June 2019, we received approval to initiate clinical trial of CS1001 in combination with fisogatinib (CS3008) in patients with locally advanced or metastatic hepatocellular carcinoma ("HCC") in China. We are currently undergoing 5 registrational trials for CS1001.
- Ivosidenib (CS3010) - Expanding beyond Mainland China, in May 2019, we submitted a new drug application for TIBSOVO (ivosidenib) to the Taiwan Food and Drug Administration as the first to-be-approved treatment of adult patients with relapsed or refractory acute myeloid leukemia ("R/R AML") with a susceptible IDH1 mutation. In July 2019 we received approval from the NMPA for a bridging trial of ivosidenib for IDH1m R/R AML in China and the first patient was dosed in a global Phase III AGILE trial in China in the same month.
- Avapritinib (CS3007) - In January 2019, we received the approval from the National Medical Products Administration of China ("NMPA") to join a global pivotal Phase III study of comparing avapritinib with regorafenib as a third line treatment for unresectable or metastatic gastrointestinal stroma tumor ("GIST") and have dosed the first patient in China in July 2019. In April 2019, we received the approval from the NMPA to start a China bridging study of avapritinib for the treatment of unresectable or metastatic GIST.
- Fisogatinib (CS3008) - In May 2019, we dosed the first patient in China for the global Phase I clinical study of fisogatinib, a FGFR4 inhibitor, for the treatment of advanced HCC.
- Pralsetinib (CS3009) - In March 2019, the NMPA approved our clinical trial application to begin a Phase I/II trial in China for pralsetinib, a RET inhibitor, for the treatment of RET-altered non-small cell lung cancer, medullary thyroid cancer and other advanced solid tumors. We have subsequently dosed the first patient in August 2019 in China.
We appointed four internationally-renowned oncologists Paul A. Bunn, Jr., MD, Elizabeth M. Jaffee, MD, Weiping Zou, MD, PhD and Richard S. Finn, MD, as members of our Scientific Advisory Board. We believe the addition of these four experts will considerably augment our public profile in the oncology field and provide valuable insights in our clinical development process.
In August 2019, we entered into an agreement (with a stated-owned enterprise under the Suzhou Industrial Park) to build an approximately 100,000 square meter research and development center and manufacturing facility in the Suzhou Industrial Park for large and small molecule drug development and commercial production. We expect to commence the construction of the facility in early 2020.

About CStone

CStone is a biopharmaceutical company focused on developing and commercializing innovative immune-oncology and molecularly-targeted drugs to address unmet medical needs for cancer patients in China and worldwide. Since the Company's inception in 2015, CStone has assembled a world-class management team that has a full spectrum of complementary skillsets from preclinical research to clinical development and commercialization. With combination therapies as a core strategy, the Company has built a rich oncology pipeline of 15 oncology drug candidates. Currently five late-stage drug candidates are at or near pivotal trials. With an experienced team, a rich pipeline, a robust clinical development-driven business model, and substantial funding, CStone's vision is to become globally recognized as a leading Chinese biopharmaceutical company by bringing innovative and differentiated oncology therapies to cancer patients worldwide.

For more information about CStone, please visit: www.cstonepharma.com.

Forward-looking Statement

The forward-looking statements made in this article relate only to the events or information as of the date on which the statements are made in this article. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this article completely and with the understanding that our actual future results or performance may be materially different from what we expect. In this article, statements of, or references to, our intentions or those of any of our Directors or our Company are made as of the date of this article. Any of these intentions may alter in light of future development.

SOURCE CStone Pharmaceuticals