Apr 07, 2020

Quarterly Cashflow and Activity Report

Quarterly Cashflow and Activity Report

Melbourne, Australia; 7 April 2020: Starpharma (ASX: SPL, OTCQX: SPHRY) today released its Appendix 4C – Quarterly Cashflow Report for the period ended 31 March 2020.

Starpharma’s cash balance as at 31 March 2020 was $36.1 million, an increase of $0.2 million compared to the previous quarter’s cash balance. Net operating cash outflows for the quarter were $0.9 million, or $6.0 million for the nine months to 31 March 2020. Starpharma’s strong cash reserves and clean balance sheet places the Company in a strong position to continue to progress its commercial and R&D activities in the current uncertain global environment of the COVID-19 pandemic.

Receipts for the quarter of $4.7 million included a US$3 million payment from AstraZeneca in relation to the DEP® milestone for commencement of patient enrolment in the clinical trial of AZD0466, and cash receipts for VivaGel® products. Cash outflows relate to product manufacturing and regulatory/commercialisation costs for VivaGel® BV products as well as R&D‑related expenditure, including for Starpharma’s three internal DEP® clinical programs.

From the outset of COVID-19 emerging, Starpharma has implemented a comprehensive range of measures to protect the health and safety of its workforce while continuing to deliver and develop medicines for patients in need. The laboratory and on-site GMP manufacturing facility are currently fully operational and non-lab staff all continue to work on products and programs remotely during this time.

Key recent activities and events:

  • Receipt of US$3 million milestone payment from AstraZeneca for the successful dosing of the first patient in the phase 1 DEP® clinical trial for AZD0466. AstraZeneca recently indicated this trial is continuing, and they are progressing activities in preparation for opening additional sites in the US.
  • Starpharma’s three DEP® clinical trials progressed and further encouraging efficacy signals were observed. Significant developments in the ongoing trials, include:
  • DEP® docetaxel – continued observation of further encouraging efficacy signals including stable disease and substantial target tumour shrinkage in patients with cancers including pancreatic, gastric and oesophageal cancer.
  • DEP® cabazitaxel – demonstration of encouraging efficacy signals, including stable disease, significant target tumour shrinkage and substantial tumour marker reductions (e.g. PSA[1]), in cancers including prostate, gastro-oesophageal, breast and cholangiocarcinoma.
  • DEP® irinotecan – dosing continues in the escalation phase and the product continues to be well-tolerated with encouraging efficacy signals observed, not only in patients with colorectal cancer, for which conventional Irinotecan is approved, but also in patients with breast and pancreatic cancer, for which it is not. For instance, one advanced breast cancer patient with extensive liver metastases has achieved 27 weeks’ stable disease. This impressive result is despite the patient having been heavily pre-treated - with more than 100 cycles of 11 different breast cancer treatments previously. DEP® irinotecan has been well-tolerated, with no patients exhibiting the severe diarrhoea that is particularly problematic with the marketed form of irinotecan, Camptosar®.

Consistent with previously reported clinical results, patients treated with these DEP® products typically exhibited fewer and/or less severe side-effects, than are observed with the conventional therapies.

  • VivaGel® BV was launched in Asia under the brand name BETADINE™ BV Gel (available Over-The-Counter). Preparations continued for product roll-out of BETADINE™ BV Gel across Asia, in readiness for further regulatory approvals as they are granted. Regulatory activities are progressing for multiple countries across other Mundipharma regions. Starpharma also manufactured product to support Mundipharma’s international roll-out of VivaGel® BV.
  • Promotional activities for Fleurstat BVgel were expanded across Australia, with strong support from physicians and pharmacists, and the product now ranks as the #1 topical BV treatment in Australia.
  • Okamoto’s licensed territory was expanded to include marketing rights for the VivaGel® condom in a further 11 countries in Asia, which include South Korea, Indonesia, Malaysia, Thailand, Singapore and the consumer (non-government) China market.
  • Regulatory activities to pursue US FDA approval of VivaGel® BV continued, including the formal review process.
  • Aspen recently launched Fleurstat BVgel in New Zealand, and advertising and promotion activities have commenced, although launch activities may be somewhat impacted by COVID-19 related restrictions.
  • Progress with several preclinical programs, including advancing DEP® gemcitabine towards the clinic.
  • Starpharma is currently finalising arrangements with potential partners prior to commencement of new Targeted (ADC) and non-ADC DEP® programs, following successful meetings at the JP Morgan Healthcare Conference in San Francisco in January.
  • As part of Starpharma’s DEP® pipeline development strategy the Company continues to explore therapeutic areas outside oncology. In 2019, Starpharma initiated a range of antiviral DEP® programs with several market-leading antiviral products. Given the renewed importance of antiviral therapies in the current environment, Starpharma is prioritising further work on these programs, including partnering opportunities and is also exploring other antiviral strategies within in its portfolio.

Dr Jackie Fairley, Starpharma CEO, commented: “We’re pleased to have ended the quarter in such a strong financial position. During the period we continued to make progress with programs across both product portfolios, including regulatory progress and further roll-out of VivaGel® BV internationally, expanding Okamoto’s VivaGel® licence and advancing our clinical and preclinical DEP® programs”.

“In the next few months, we look forward to the continued roll-out of products in the VivaGel® portfolio throughout multiple regions, and to supporting the regulatory, marketing and distribution activities of our partners”, Dr Fairley added.

Operating cash outflows for the quarter reflects the investment in product R&D ($3.4 million) on clinical and preclinical studies and regulatory activities, while product manufacturing and operating outflows ($0.4 million) support the commercialisation of VivaGel® and DEP® product opportunities. Staff costs for the quarter were $1.7 million, and staffing levels remain stable.

COVID-19 pandemic

Since the emergence of COVID-19, Starpharma has implemented a broad program of measures to protect the health and safety of staff and clinical trial patients, and to ensure product supply to customers. The company has established a range of strategies and controls to mitigate the impact of COVID-19 on its business and continues to update these as the situation evolves.

Starpharma’s business operations continue to operate with minimal disruption, with stringent hygiene protocols in place to ensure that staff can continue in their roles in a safe and secure way, including work from home arrangements, virtual meetings, minimal onsite visitation and frequent cleaning/disinfecting on the premises. The Company’s laboratory and in-house GMP manufacturing facilities are currently in full operation, and collaborations with various groups continue, which enables preclinical programs, other research and clinical trial support to progress as normal.

The burden of COVID-19 on healthcare resources globally is unprecedented, with a significant redirection of healthcare professionals to the care of COVID-19 patients. Industry-wide, this will impact the ability of many clinical research sites to enrol new trial patients, and may impact on the overall timing of Starpharma’s clinical programs. Importantly, the design of the DEP® clinical programs is such that we do not anticipate COVID-19 to adversely affect the integrity of trial results.

In the face of COVID-19, patient safety continues to be of utmost importance. To minimise patient exposure to COVID-19, DEP® trial sites are implementing a number of strategies to enable patients already receiving DEP® treatment to continue doing so. While most enrolled patients are continuing DEP® treatment, recruitment of new patients is not currently occurring at most sites as hospitals prepare for the potential need to re-allocate staff to COVID-19 patient care. In view of the demands on the healthcare system, Starpharma has paused the commencement of new DEP® combination studies for the time being.

AstraZeneca has indicated that dosing in its phase 1 DEP® trial for AZD0466 continues.

With regard to VivaGel® BV, to date there has been no disruption to supply chain activities and key inventory levels remain adequate. VivaGel® BV product roll-out plans are continuing, though there may be some delays in certain countries, dependent upon partner’s activities, such as sales representative visits.

As part of its strategy for FDA approval of VivaGel® BV, Starpharma continues to progress the FDA review process with input from a team of expert FDA consultants (regulatory, statistical, clinical, legal; several ex-FDA) and we are advised that it is possible that COVID‑19 activities within the FDA may impact on timing. In view of the COVID-19 pandemic, and in particular, the potential disruption to the US healthcare system, the Company has paused activities relating to a potential BV treatment trial in the US, and this decision also supports Starpharma’s objective to preserve its strong cash position. Starpharma will continue to monitor the situation in the coming months.

Dr Jackie Fairley, Starpharma CEO, commented: “Whilst COVID-19 is impacting companies around the world, Starpharma is in a very favourable position with $36.1 million in cash and is currently fully operational with laboratory and in-house manufacturing facilities unaffected. Starpharma is well-positioned with programs continuing to operate across each portfolio, including commercial partnering activities.”

“With regard to our DEP® clinical trials, we continue to support all of our programs, to minimise potential impact. Given the COVID-19 burden on healthcare systems around the world, we have taken the responsible step not to initiate new clinical studies at this time. The past few months has been a very busy time for Starpharma as we implemented continuity plans across the business in relation to COVID-19 and we thank staff for their exceptional dedication over this period”, concluded Dr Fairley.

Download ASX Announcement: Quarterly Cashflow and Activity Report (pdf, 500kb)

[1] PSA – Prostate Specific Antigen

 This contains certain forward-looking statements.