Diffusion Pharmaceuticals Reports 1st Quarter 2018 Results
Monday, May 14, 2018
Diffusion Pharmaceuticals Inc., a clinical-stage biotechnology company focused on extending the life expectancy of cancer patients using the novel small molecule trans sodium crocetinate (TSC) in conjunction with standard radiation and chemotherapy, reports financial results for the three months ended March 31, 2018 and provides a business update.
“During the first quarter patients continued to be screened and enrolled into our lead clinical program, the INvestigation of TSC Against Cancerous Tumors (INTACT) trial for the treatment of inoperable glioblastoma multiforme, or GBM,” said David Kalergis, Chairman and Chief Executive Officer of Diffusion Pharmaceuticals. “In January the first patients were dosed in this 236-patient Phase 3 study. The protocol calls for half of patients to be enrolled in the treatment arm, which is standard of care radiation and chemotherapy, plus TSC, and half to be enrolled in the control arm, which is standard of care alone. The design of INTACT is based on an almost four-fold increase in overall survival at two years demonstrated in inoperable GBM patients in the preceding Phase 2 study. We are hopeful that similar survival will be demonstrated in our pivotal Phase 3 study and that TSC will provide an effective treatment for these patients, for whom current options are limited.”
The Company continues to prepare for a Phase 2, randomized, double-blind, placebo-controlled trial with TSC in acute stroke. The contemplated study, based on an abstract that was presented in January at the International Stroke Conference, calls for the administration of TSC by specially-trained Emergency Medical Technicians to ambulance-transported patients within two hours of the onset of a suspected acute stroke. The in-ambulance administration could potentially overcome the current severe timing delay in administering therapy to stroke patients. The trial, which has been named the Pre-Hospital Ambulance Stroke Trial - TSC (PHAST-T), is expected to commence in late 2018, subject to funding.
Diffusion is pleased to announce the granting of U.S. patent number 9,950,067, which expands the Company’s coverage of the use of TSC and related compounds in cancer therapy. The claims of the new U.S. patent relate to the treatment of a number of cancer types such as brain cancer (including glioblastoma) and pancreatic cancer, using TSC in conjunction with radiation therapy and chemotherapy. “This new U.S. patent further strengthens our IP portfolio in cancer treatment and is relevant to our technology in the Phase 3 study,” stated General Counsel and IP Counsel Thomas Byrne.
“Intellectual property is an important component of our growth strategy, and we are pleased this patent has issued,” Mr. Kalergis added. “We are expecting additional patent allowances in the near future that will further augment our IP.”
Financial Results for the Three Months Ended March 31, 2018
Theyhad cash and cash equivalents of $16.2 million as of March 31, 2018. They believe that their cash and cash equivalents will enable them to fund their operating expenses and capital expenditure requirements through June 2019.
They recognized $1.8 million in research and development expenses during the three months ended March 31, 2018, compared with $1.0 million during the three months ended March 31, 2017. The increase was mainly attributable to a $1.1 million increase in expense related to their Phase 3 GBM trial, offset by a $0.3 million decrease in manufacturing costs.
General and administrative expenses for the three months ended March 31, 2018 were $1.5 million compared with $1.6 million for the three months ended March 31, 2017. Salaries and wages increased by $0.2 million due to the increase in headcount, which was offset by a decrease in professional fees of approximately $0.3 million.
In connection with the private placement of our Series A preferred stock and common stock warrants in March of 2017, they determined the warrants to be classified as liabilities and subject to remeasurement at each reporting period. As a result, they recognized $10.2 million in excess fair value of the common stock warrants over the gross proceeds from their private placement. They also recognized $2.9 million in placement agent commission and other offering costs. In total, for the three months ended March 31, 2017, they recorded a $12.9 million expense for the change in fair value of our common stock warrant liabilities, which was primarily attributable to the increase in the market price for our Common Stock. There were no such charges in 2018 as the warrants were reclassified into equity in November of 2017.