BATF3

Researchers have adapted CRISPR technologies for high-throughput screening of gene function in human immune cells and discovered that a single master regulator of the genome can be used to reprogram a network of thousands of genes in T-cells and greatly enhance cancer cell killing. Researchers at Duke University have adapted CRISPR technologies for high-throughput screening of gene function in human immune cells and discovered that a single master regulator of the genome can be used to reprogram a network of thousands of genes in T cells and greatly enhance cancer cell killing. The master regulator is called BATF3 and is one of several genes that the researchers identified and tested for improving T-cell therapies. These targets, and the methods developed to identify, test and manipulate them, could make any of the T cell cancer therapies currently in use and under development more potent. Combined with other advances, the platform could also enable generalized, off-the-shelf versions of the therapy and expansion into other disease areas such as autoimmune disorders. The results appear online November 9 in the journal Nature Genetics. T-cell therapy is a decade-old approach to treating cancer. More recent versions involve reprogramming the immune system's primary soldiers to seek and destroy cancerous cells that they might otherwise overlook. Many companies are working to enhance the technology, mostly through the use of genetic engineering techniques that instruct the T cells how to identify cancerous cells and make them more effective at destroying them. There are currently six FDA-approved T-cell therapies for specific leukemias, lymphomas and multiple myeloma. Their approaches, however, do not currently fare well when applied to solid tumors, although there are hints of success in certain studies. Solid tumors often present large physical barriers for the T cells to overcome, and the sheer number and density of cancer cells presenting targets can lead to "T-cell exhaustion," wearing the attackers out to the point that they are not able to mount an antitumor response. "In some cases, T-cell therapy works like a miracle drug, but in most others, it hardly works at all," said Charles Gersbach, the John W. Strohbehn Distinguished Professor of Biomedical Engineering at Duke. "We are looking for generic solutions that can make these cells better across the board by reprogramming their gene regulation software, rather than rewriting or damaging their genetic hardware. This demonstration is a crucial step toward overcoming a major hurdle to getting T-cell therapy to work in more patients across a greater range of cancer types." Gersbach and his laboratory have spent the past several years developing a method that uses a version of the gene-editing technology CRISPR-Cas9 to explore and modulate genes without cutting them. Instead, it makes changes to the structures that package and store the DNA, affecting the activity level of the accompanying genes. Sean McCutcheon, a PhD candidate working in Gersbach's lab and lead author of the study, focused on regions of this 'dark genome' that change as T cells transition between states, such as functional versus exhausted. He identified 120 genes that encode "master regulators," which are responsible for the activity levels of many other genes. Using the CRISPR platform, he dialed the activity levels of these targets both up and down to see how they affected other known markers of T cell function. While several promising candidates emerged, one of the most promising was a gene called BATF3. When McCutcheon subsequently delivered BATF3 directly to the T cells, there were thousands of tweaks to the packaging structure of the T cells' DNA, and this correlated with increased potency and resistance to exhaustion. "A known barrier to using T cells to fight cancer is that they tend to get 'tired' over time and lose their ability to kill cancer cells," McCutcheon said. "We're identifying manipulations that make T cells stronger and more resilient by mimicking naturally occurring cell states that work well in clinical products." The researchers put BATF3 through a battery of tests. The most interesting results came when they overexpressed BATF3 in T cells programmed to attack human breast cancer tumors in a mouse model. While the standard-of-care T-cell therapy struggled to slow tumor growth, the exact same dose of T cells engineered with BATF3 completely eradicated the tumors. While the results with BATF3 are exciting to Gersbach, McCutcheon and the rest of the group, they are even more enthusiastic about the general success of the methodology to identify and modulate master regulators to improve therapeutic performance, which they have been developing for the better part of a decade. They can now readily pro regulators of T cell fitness using any T cell source or cancer model and under various experimental conditions that mimic the clinical setting. For example, in the last part of this study, McCutcheon screened T cells, with or without BATF3, while using CRISPR to remove every other master regulator of gene expression -- more than 1,600 regulators in total. This led to the discovery of a whole new set of factors that could be targeted alone or in combination with BATF3 to increase the potency of T-cell therapy. "This study focused in depth on one particular target identified by these CRISPR screens, but now that Sean and the team have the whole discovery engine up and running, we can do this over and over again for different models and tumor types," Gersbach said. "This study suggests many strategies for applying this approach to enhance T-cell therapy, from using a patient's own T cells to having a bank of generalized T cells for a wide variety of cancers. We hope that these technologies can be generally applicable across all strategies." This research was supported by the National Institutes of Health (U01AI146356, UM1HG012053, UM1HG009428, RM1HG011123), the National Science Foundation (EFMA-1830957), the Paul G. Allen Frontiers, the Open Philanthropy Project, and the Duke-Coulter Translational Partnership.

Reports 2Q product sales of $25.8 million, up 26% year-over-yearRaised $85 million in total transaction value in 2Q for total of $125 million in proceeds from sales of non-core assets in 1H 2022, and reduced Senior Credit Facility balance from $150 million to $57.5 millionCash used in operating activities for 1H 2022 was reduced 42% over the prior yearPresented promising early Phase 1 clinical trial data for CD19 and GD2 CAR-NKT cell products at ASTCT/CIBMTR Tandem Meetings and ASGCT annual meeting in 2Q 2022, respectivelyMaintains full-year 2022 product revenue guidance range of 20-25% growth year-over-year Management to host conference call and webcast today at 8:00 a.m. EDT BUFFALO, N.Y., July 28, 2022 (GLOBE NEWSWIRE) -- Athenex, Inc. (NASDAQ: ATNX), a global biopharmaceutical company dedicated to the discovery, development, and commercialization of novel therapies for the treatment of cancer and related conditions, today provided a corporate and financial update for the second quarter ended June 30, 2022. “Our team has made significant progress advancing our new strategy this quarter. I am proud of our operational execution in the first half of 2022 and pleased to say we are continuing this momentum into the second half of the year,” said Dr. Johnson Lau, Chief Executive Officer of Athenex. “By monetizing non‑core assets, we have paid down a significant amount of our senior secured debt and extended our cash runway. Athenex remains focused on advancing our NKT cell therapy platform during this transformational period and is highly encouraged by the clinical trial data to date demonstrating the potential of CAR‑NKT cells to offer a more durable, safe, and effective cell therapy option for patients with advanced solid tumors or hematological malignancies.” Second Quarter 2022 and Recent Business Highlights Business Updates APD/APS division delivered new product launches and generated 26% growth in product revenues during the second quarter of 2022 versus the prior yearAnnounced sale of revenues from U.S. and European royalty and milestone interests in Klisyri® (tirbanibulin) for a total transaction value of $85 million in JuneEntered into an agreement in July to sell China API Business for approximately $19 millionAppointed Darrel P. Cohen, MD, PhD as new Chief Medical Officer of Cell TherapyEntered a clinical collaboration with Merck to support the expansion of the Phase 1 clinical trial to evaluate Oral Paclitaxel plus KEYTRUDA® (pembrolizumab) in patients with non-small cell lung cancer (NSCLC) Clinical Programs NKT Cell Therapy Presented early Phase 1 ANCHOR dose escalation data for KUR-502, an allogeneic CD19 CAR-NKT therapy at the American Society of Transplantation and Cellular Therapy (ASTCT)/Center for International Blood & Marrow Transplant Research (CIBMTR) Tandem Meetings in April 2022. Data demonstrated a 60% ORR and 6-month CR rate of 40% in 5 patients from the Non-Hodgkin’s Lymphoma (NHL) cohort, including 1 ongoing CR at 34 weeks. Encouraging response rates were observed at low doses, including 2 durable responses in patients who failed prior autologous CAR-T cell therapy. KUR-502 remains well-tolerated without cytokine release syndrome (CRS) in the NHL cohort, immune effector cell-associated neurotoxicity syndrome (ICANS), or graft versus host disease (GvHD).Presented early Phase 1 GINAKIT2 dose escalation data for KUR-501, an autologous GD2 CAR-NKT cell therapy for relapsed/refractory high-risk neuroblastoma at the American Society of Gene & Cell Therapy (ASGCT) annual meeting in May 2022. Study demonstrated expansion of CAR-NKT cells in all patients and dose response, with 2 out of 3 responses observed at the 1x108 cells/m2 dose level, including a durable complete response lasting at least 12 months. Analysis of results found that responses correlated with CD62L+ NKT cell expression as well as CAR‑NKT cell area under the curve (AUC). Treatment remains well-tolerated without any dose-limiting toxicity, no ICANS, and 1 case of Grade 2 CRS.Presented pre-clinical data for KUR-503, an allogeneic GPC3 CAR-NKT cell therapy, at the ASCO Annual Meeting in June 2022. Study demonstrated CAR-NKT cells overexpressing BATF3 enhanced NKT cell proliferation, long-term tumor control, and survival compared to IL-15 CAR-NKT cells.Made the strategic decision to deprioritize development of AX-TCRT-001 and plan to close the Phase 1 open-label study of TCRT-ESO-A2 autologous T cells expressing TCR specific for NY-ESO-1 in patients with advanced solid tumors. Commercial Update Specialty Pharmaceutical Business Athenex Pharmaceutical Division (APD) currently markets a total of 31 products with 57 SKUs.Athenex Pharma Solutions (APS) currently markets 6 products with 16 SKUs. Key Anticipated Milestones Oral Paclitaxel: Phase 2 data from I-SPY 2 trial evaluating Oral Paclitaxel in combination with dostarlimab in neoadjuvant breast cancer expected in 2H 2022Regulatory interactions with UK MHRA for Oral Paclitaxel in advanced breast cancer in UK remain on track with responses to questions expected later this quarter KUR-501: autologous GD2 CAR-NKT cell therapy for relapsed/refractory high-risk neuroblastoma Ongoing enrollment of additional patients in single-institution Phase 1 dose escalation GINAKIT2 study at the 2 highest dose levels (DL5: 3x108 cells/m2; DL6: 1x109 cells/m2)Next data update from the ongoing GINAKIT2 study expected in 2023 KUR-502: allogeneic CD19 CAR-NKT cell therapy for relapsed/refractory B-cell malignancies Ongoing multicenter expansion of Phase 1 dose escalation ANCHOR studyNext clinical trial data update from the ongoing ANCHOR study anticipated in 4Q 2022 or 1Q 2023 KUR-503: allogeneic GPC3 CAR-NKT cell therapy for hepatocellular carcinoma IND filing for KUR-503 in GPC3-expressing hepatocellular carcinoma planned in 2023 Second Quarter 2022 Financial Highlights Revenues from product sales increased to $25.8 million for the three months ended June 30, 2022, from $20.4 million for the three months ended June 30, 2021, an increase of $5.4 million or 26%. This increase was primarily attributable to an increase in APD specialty product sales, which increased by $4.2 million as the result of increases in shortage product sales and product launches during 2022. License fees and other revenue for the three months ended June 30, 2022, was $5.7 million, compared to $0.3 million for the same period in 2021, an increase of $5.4 million. This increase was primarily due to the recognition of $5.0 million of license revenue pursuant to the 2017 Almirall License Agreement upon the commencement of a line extension trial for Klisyri in the U.S. Cost of sales for the three months ended June 30, 2022, totaled $23.1 million, an increase of $4.0 million, or 21%, as compared to $19.1 million for the three months ended June 30, 2021. The increase was primarily due to an increase of $1.3 million in cost of APD product sales and an increase of $2.7 million in cost of 503B product sales. R&D expenses totaled $13.1 million for the three months ended June 30, 2022, a decrease of $7.6 million, or 37%, as compared to $20.6 million for the three months ended June 30, 2021. This decrease was primarily due to a decrease in Oral Paclitaxel product development and medical affairs costs, costs of clinical and regulatory operations, compensation costs, and costs of preclinical operations. SG&A expenses totaled $17.2 million for the three months ended June 30, 2022, a decrease of $0.5 million, or 3%, as compared to $17.6 million for the three months ended June 30, 2021. The decrease was primarily due to a $2.5 million decrease of costs for preparing to commercialize Oral Paclitaxel as significant pre-launch activities occurred in 2020 and a $0.2 million decrease in compensation related costs. These decreases were partially offset by a $2.2 million increase in operating costs. Interest expense totaled $4.3 million and $5.6 million, respectively, for the three months ended June 30, 2022, and 2021. Interest expense in both periods was incurred from the Senior Credit Agreement with Oaktree, and the decrease in 2Q 2022 was due to principal repayments made to the Agreement. Income tax benefit for the three months ended June 30, 2022, amounted to less than $0.1 million, compared to an $11.0 million benefit for the same period in 2021. The income tax benefit in 2Q21 was the result of a taxable temporary difference due to the deferred tax liability recognized for the indefinite lived intangible assets acquired in connection with the acquisition of Kuur’s IPR&D. We did not record a provision for U.S. federal income taxes for the three months ended June 30, 2022, because we expect to generate a loss for the year ending December 31, 2022. Net loss attributable to Athenex for the three months ended June 30, 2022, was $32.2 million, or ($0.28) per diluted share, as compared to a net loss of $34.3 million, or ($0.33) per diluted share, for the same period in 2021. For further details on the Company’s financial results, including the results for the three months ended June 30, 2022, refer to the Form 10Q filed with the SEC. 2022 Financial Guidance Athenex continues to expect product sales from continuing operations growth to be in the range of 20-25% over the prior year period. Cash Conservation Update As of June 30, 2022, the Company had cash and cash equivalents, restricted cash, and short-term investments of $37.1 million. The Company is implementing cost savings programs and monetizing non-core assets, and as the Company completes such activities, the Company plans to extend its cash runway into next year. Conference Call and Webcast Information Athenex will host a conference call and live audio webcast today, Thursday, July 28, 2022, at 8:00 a.m. Eastern Time to discuss the financial results and provide a business update. To participate in the call, dial either the domestic or international number fifteen minutes before the conference call begins: Domestic:1-855-327-6837International:1-631-891-4304Passcode:10019801 The live conference call and replay can also be accessed via audio webcast here and on the Investor Relations section of the Company’s website under “Events and Presentations”, located at https://ir.athenex.com/investor-calendar. About Athenex, Inc. Founded in 2003, Athenex, Inc. is a global clinical-stage biopharmaceutical company dedicated to becoming a leader in the discovery, development, and commercialization of next generation cell therapy drugs for the treatment of cancer. In pursuit of this mission, Athenex leverages years of experience in research and development, clinical trials, regulatory standards, and manufacturing. The Company’s current clinical pipeline is derived mainly from the following core technologies: (1) Cell therapy, based on NKT cells and (2) Orascovery, based on a P-glycoprotein inhibitor. Athenex’s employees worldwide are dedicated to improving the lives of cancer patients by creating more active, accessible, and tolerable treatments. For more information, please visit www.athenex.com. Forward-Looking Statements Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. These forward-looking statements are typically identified by terms such as “anticipate,” “continue,” “could,” “expect,” “intend,” “may,” “plan,” “potential,” “strategy” “will,” and similar expressions. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: our ability to complete the sale of our equity interests in our China subsidiaries; our history of operating losses and the substantial doubt about our ability to continue as a going concern; our strategic pivot to focus on our cell therapy platform and our plan to dispose of non-core assets; our ability to obtain financing to fund operations, successfully redirect our resources and reduce our operating expenses; our ability to refinance, extend or repay our substantial indebtedness owed to our senior secured lender; the development stage of our primary clinical candidates, including NKT Cell Therapy and related risks involved in drug development, clinical trials, regulation, uncertainties around regulatory reviews and approvals; the preclinical and clinical results for Athenex’s drug candidates, which may not support further development of such drug candidates; the Company’s ability to successfully demonstrate the safety and efficacy of its drug candidates and gain approval of its drug candidates on a timely basis, if at all; the uncertainty of ongoing legal proceedings; risks related to our ability to successfully integrate the business of Kuur Therapeutics into our existing businesses, including uncertainties associated with maintaining relationships with customers, vendors, and employees, as well as differences in operations, cultures, and management philosophies that may delay successful integration and our ability to support the added cost burden of Kuur’s business; risks related to counterparty performance, including our reliance on third parties for success in certain areas of Athenex’s business; risks and uncertainties inherent in litigation, including purported stockholder class actions; the impact of the COVID-19 pandemic and other macroeconomic factors, such as the war in Ukraine, and their ongoing impact on our operations, supply chain, cash flow, and financial condition; competition; intellectual property risks; risks relating to doing business internationally and in China; the risk of development, operational delays, production slowdowns or stoppages or other interruptions at our manufacturing facility as well as our ability to find alternative sources of supply to meet our obligations and requirements; the risk that our common stock will be delisted from the Nasdaq Global Market if we are unable to regain compliance with its continued listing standards, and the other risk factors set forth from time to time in our SEC filings, copies of which are available for free in the Investor Relations section of our website at http://ir.athenex.com/phoenix.zhtml?c=254495&p=irol-sec or upon request from our Investor Relations Department. All information provided in this release is as of the date hereof, and we assume no obligation and do not intend to update these forward-looking statements, except as required by law. Athenex Contacts Investor Relations Daniel Lang, MD Athenex, Inc. E-mail: danlang@athenex.com Caileigh Dougherty Athenex, Inc. E-mail: cdougherty@athenex.com ATHENEX, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited) June 30, December 31, 2022 2021 Selected Balance sheet data: Cash, cash equivalents, and restricted cash$35,964 $51,702 Short-term investments 1,189 10,207 Working capital(1) 27,575 37,349 Total assets attibutable to discontinued operations 26,542 63,210 Total assets 221,887 267,448 Long-term debt 51,939 148,507 Royalty financing liability 75,006 — Total liabilities attibutable to discontinued operations 11,164 17,205 Total liabilities 227,360 232,996 Non-controlling interests (17,408) (16,679)Total stockholders' (deficit) equity (5,473) 34,452 (1)working capital: total current assets less total current liabilities ATHENEX, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(In thousands)(Unaudited) Three Months ended June 30, Six Months ended June 30, 2022 2021 2022 2021 Revenue Product sales, net$25,786 $20,394 54,154 38,881 License and other revenue 5,730 304 6,504 20,969 Total revenue 31,516 20,698 60,658 59,850 Cost of sales (23,092) (19,117)(45,613)(34,158)Gross profit 8,424 1,581 15,045 25,692 Research and development expenses (13,094) (20,646)(27,179)(42,390)Selling, general, and administrative expenses (17,172) (17,641)(30,979)(36,840)Interest income 46 32 122 61 Interest expense (4,307) (5,608)(8,820)(10,538)Gain (loss) on partial extinguishment of debt 2,051 — (1,450)— Income tax benefit (expense) 19 11,035 (8)10,881 Net loss from continuing operations (24,033) (31,247)(53,269)(53,134)Gain (loss) from discontinued operations (8,341) (3,368)2,963 (7,084)Net loss (32,374) (34,615)(50,306)(60,218)Less: net loss attributable to non-controlling interests (217) (341)(729)(894)Net loss attributable to Athenex, Inc. (32,157) (34,274)(49,577)(59,324)Net loss per share attributable to Athenex, Inc. common stockholders, basic and diluted (0.28) (0.33)(0.44)(0.60)Weighted-average shares used in computing net loss per share attributable to Athenex, Inc. common stockholders, basic and diluted 113,006,158 103,370,268 111,762,029 98,427,561