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MEI Pharma Reports Second Quarter Fiscal Year 2019 Results and Operational Highlights

-- MEI Remains in Strong Position as ME-401 Advances to Global Phase 2 Study to Support FDA Accelerated Approval --

Feb 7, 2019

SAN DIEGO, Feb. 7, 2019 /PRNewswire/ -- MEI Pharma, Inc. (NASDAQ: MEIP), a late-stage pharmaceutical company focused on advancing new therapies for cancer, today reported results for its second quarter ended December 31, 2018.

"MEI remains in a strong position to continue to build on the clinical data presented at ASCO 2018 and at ASH 2018 across our pipeline of four clinical-stage oncology candidates – including two candidates in clinical studies that may support future submissions for potential marketing approval by FDA," said Daniel P. Gold, Ph.D., president and chief executive officer of MEI Pharma. "In particular, ME-401 continues to attract increasing notice from physicians for its emerging clinical profile, and there's been a heightened scientific focus on PI3K delta as a target with the potential to mechanistically match BTK inhibition in importance for targeting B-cell malignancies."

Upcoming Milestones and Recent Program Highlights

Upcoming Milestones

  • Dosing of the first patient in the global Phase 2 study to support accelerated approval of ME-401 in relapsed or refractory follicular lymphoma in the first calendar quarter of 2019.
  • Updates and presentations of clinical data from the ME-401 clinical development program, including at select 2019 medical/oncology meetings.
  • Initial clinical results from the ongoing Phase 1 study of voruciclib, including single agent dose ranging data and results from the combination with venetoclax in patients with B-cell malignancies and relapsed and refractory acute myeloid leukemia, by end of 2019.
  • Results from the investigator-initiated study of ME-344 in combination with bevacizumab (marketed as Avastin®) in patients with breast cancer at a medical/oncology meeting mid-year.
  • Pracinostat results from the Phase 2 clinical trial evaluating patients with myelodysplastic syndrome, including response and 1-year survival, expected to be available by the end of 2019.

Clinical Development Highlights

  • In December 2018, the Company opened the first clinical trial sites in its Phase 2 study that will evaluate both a continuous (CS) and intermittent (IS) dosing schedule of ME-401 in patients with third-line follicular lymphoma. The Phase 2 study is intended to support MEI's accelerated approval registration strategy, if successful.
  • In December 2018, at the 2018 American Society of Hematology Annual Meeting, the Company presented data from three clinical programs:
    • Interim results presented from the ongoing Phase 1b study evaluating ME-401, a selective phosphatidylinositol 3-kinase ("PI3K") delta inhibitor, support the complementary potential of intermittent and continuous dosing schedules of ME-401 to optimize the clinical risk-benefit ratio in patients with relapsed/refractory follicular lymphoma. The data demonstrate that ME-401, as both a single agent and in combination with rituximab, continues to be associated with overall high objective response rates. In addition, low rates of Grade 3 immune-related adverse events (irAEs) were observed in patients on the intermittent dosing schedule while maintaining a high level of clinical response.
    • Interim results presented from the ongoing Phase 2 study evaluating pracinostat, a histone deacetylase inhibitor, in combination with azacitidine for the treatment of patients with IPSS-R high/very high-risk of Myelodysplastic Syndrome ("MDS") demonstrate a 9% discontinuation rate due to adverse events, a substantially lower rate than observed in an earlier study. Additionally, the data presented demonstrated an encouraging 36% complete response rate among patients receiving at least 6 cycles of treatment.
    • Preclinical data presented demonstrate that voruciclib, MEI's orally available CDK9 inhibitor, synergistically induced apoptosis at clinically relevant concentrations when combined with venetoclax (marketed as Venclexta®) in human derived acute myeloid leukemia ("AML") cells lines and patient samples. Voruciclib is currently being evaluated in a Phase 1b dose ranging study in patients with B-cell malignancies and AML.
  • In October 2018, MEI entered into a clinical collaboration to evaluate the safety and efficacy of MEI's ME-401, an investigational PI3K delta inhibitor, in combination with BeiGene's zanubrutinib, an investigational Bruton's tyrosine kinase ("BTK") inhibitor, for the treatment of patients with B-cell malignancies.

Corporate Highlights

  • In November 2018, MEI entered into a license, development and commercialization agreement granting Kyowa Hakko Kirin ("KHK") exclusive rights to develop and commercialize ME-401 in Japan. Under the terms of the agreement, MEI received a $10.0 million upfront payment and is eligible to receive up to $87.5M in additional development and commercialization milestones, and royalties on sales.

Financial Highlights

  • As of December 31, 2018, MEI had $93.4 million in cash, cash equivalents and short-term investments, with no outstanding debt.
  • For the three months ending December 31, 2018, cash expenditures for operating activities were $7.2 million, compared to $4.7 million for 2017. For the six months ending December 31, 2018, cash expenditures for operating activities were $20.0 million, compared to $11.3 million for 2017. The increase in cash used for the six months ended December 31, 2018 primarily relates to changes in working capital associated with our clinical development programs, including start-up costs related to the ME-401 Phase 2 study.
  • Research and development expenses were $9.1 million for the quarter ended December 31, 2018, compared to $3.4 million for the same period in 2017. Research and development expenses primarily reflect increased costs associated with the development of ME-401.
  • General and administrative expenses were $3.8 million for the quarter ended December 31, 2018, compared to $2.4 million for the same period in 2017. The increase primarily relates to increased salary and share-based compensation associated with increased headcount, and increased professional services expenses.
  • The Company recognized revenues of $2.0 million for the quarter ended December 31, 2018, compared to $0.4 million for the same period in 2017. The increase is related to new license revenues from our agreement with KHK, and to higher levels of research and development activities performed pursuant to the Helsinn license agreement.
  • Net income for the quarter ended December 31, 2018, was $12.0 million, or $0.17 per share compared to a net loss of $6.1 million, or $0.16 per share for the same period in 2017. The Company had 71,131,486 shares of common stock outstanding as of December 31, 2018, compared with 37,052,361 shares as of December 31, 2017.
  • The adjusted net loss, excluding non-cash expenses related to changes in the fair value of the warrants issued in connection with the May 2018 financing (a non-GAAP measure) for the quarter ended December 31, 2018, was $11.4 million.

About MEI Pharma

MEI Pharma, Inc. (NASDAQ: MEIP) is a San Diego-based pharmaceutical company focused on leveraging its extensive development and oncology expertise to identify and advance new therapies for cancer. The Company's portfolio of drug candidates includes pracinostat, an oral HDAC inhibitor that is partnered with Helsinn Healthcare, SA. Pracinostat has been granted Breakthrough Therapy Designation from the U.S. Food and Drug Administration for use in combination with azacitidine for the treatment of patients with newly diagnosed acute myeloid leukemia (AML) who are unfit for intensive chemotherapy. Pracinostat is also being developed in combination with azacitidine for the treatment of patients with high and very high-risk myelodysplastic syndrome (MDS). MEI Pharma's clinical development pipeline also includes ME-401, a highly differentiated oral PI3K delta inhibitor currently in a Phase 1b study in patients with relapsed/refractory chronic lymphocytic leukemia (CLL) or FL, and voruciclib, an oral, selective cyclin-dependent kinase (CDK) inhibitor shown to suppress myeloid leukemia cell differentiation protein (MCL1), a known mechanism of resistance to B-cell lymphoma (BCL2) inhibitors. The Company is also developing ME-344, a novel mitochondrial inhibitor currently in an investigator-initiated study in combination with bevacizumab for the treatment of HER2-negative breast cancer. Pracinostat, ME-401, ME-344 and voruciclib are investigational agents and are not approved for use in the U.S. For more information, please visit www.meipharma.com.

Under U.S. law, a new drug cannot be marketed until it has been investigated in clinical studies and approved by the FDA as being safe and effective for the intended use. Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval, or the failure to obtain such approval, of our product candidates; uncertainties or differences in interpretation in clinical trial results; our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events. We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.

 

MEI PHARMA, INC.

CONDENSED BALANCE SHEETS

(In thousands, except per share amounts)






December 31,


June 30,


2018


2018





ASSETS

Current assets:




Cash and cash equivalents

$              8,748


$    13,309

Short term investments

84,667


89,434

Total cash, cash equivalents and short-term investments

93,415


102,743

Prepaid expenses and other current assets

2,418


1,586

Total current assets

95,833


104,329

Intangible assets, net

279


296

Property and equipment, net

193


32

Total assets

$            96,305


$  104,657





LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:




Accounts payable

$              2,158


$      3,643

Accrued liabilities

4,766


3,454

Deferred revenue

3,980


788

Total current liabilities

10,904


7,885

Deferred revenue, long-term

5,161


-

Warrant liability

26,770


46,313

Total liabilities

42,835


54,198





Stockholders' equity:




Preferred stock, $0.01 par value; 100 shares authorized;




     none outstanding

-


-

Common stock, $0.00000002 par value; 226,000 shares




     authorized; 71,131 and 70,406 shares issued and outstanding



     at December 31, 2018 and June 30, 2018, respectively

-


-

Additional paid-in-capital

270,387


264,858

Accumulated deficit

(216,917)


(214,399)

Total stockholders' equity

53,470


50,459

Total liabilities and stockholders' equity

$            96,305


$  104,657

 

MEI PHARMA, INC.

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)











Three Months Ended
December 31,


Six Months Ended
December 31,


2018


2017


2018


2017









Revenues

$      2,048


$       358


$      2,536


$         641









Operating expenses:








Cost of revenue

1,009


728


1,998


1,346

Research and development

9,066


3,444


15,197


9,508

General and administrative

3,821


2,358


7,222


4,846

Total operating expenses

13,896


6,530


24,417


15,700









Loss from operations

(11,848)


(6,172)


(21,881)


(15,059)









Other income (expense):








Change in fair value of warrant liability

23,437


-


18,475


-

Interest and dividend income

436


93


890


193

Income tax expense

-


-


(1)


(1)

Net income (loss)

$    12,025


$ (6,079)


$   (2,517)


$ (14,867)









Net income (loss):








Basic

$   12,025


$ (6,079)


$   (2,517)


$ (14,867)

Diluted

$ (11,412)


$ (6,079)


$ (25,954)


$ (14,867)

Net income (loss) per share:








Basic

$        0.17


$   (0.16)


$      (0.04)


$      (0.40)

Diluted

$      (0.15)


$   (0.16)


$      (0.36)


$      (0.40)

Shares used in computing net income (loss) per share:








Basic

71,124


37,414


71,005


37,390

Diluted

73,951


37,414


72,418


37,390

 

MEI PHARMA, INC.

Reconciliation of GAAP Net Loss to Adjusted Net Income (Loss)

(In thousands)




Three Months Ended
December 31,


Six Months Ended
December 31,



2018


2017


2018


2017










Net income (loss)


$   12,025


$ (6,079)


$   (2,517)


$ (14,867)

Add: Change in fair value of warrant liability


(23,437)


-


(18,475)


-

Adjusted net loss


$ (11,412)


$ (6,079)


$ (20,992)


$ (14,867)

 

MEI Pharma Logo. (PRNewsFoto/MEI Pharma, Inc.)

 

SOURCE MEI Pharma, Inc.

For further information: David A. Walsey, VP of Investor Relations and Corporate Communications, Tel: 858-369-7104, investor@meipharma.com or Jason I. Spark, Canale Communications for MEI Pharma, Tel: 619-849-6005, jason@canalecomm.com