8-K: Leap Therapeutics Announces First Quarter 2024 Financial Results and Clinical Trial Updates

Leap Therapeutics reported its first quarter 2024 financial results, highlighted by a $40 million private placement and progress in its DKN-01 clinical trials.

Summary

• Leap Therapeutics announced its financial results for the first quarter of 2024, reporting a net loss of $13.8 million, compared to a $41.9 million loss in the same period of 2023.
• The decrease in net loss was primarily due to a $29.6 million reduction in in-process research and development expenses related to the Flame merger in 2023.
• Research and development expenses decreased to $11.3 million from $38.9 million year-over-year, mainly due to the IPR&D expense reduction.
• The company completed a $40 million private placement in April 2024, which is expected to fund operations into the second quarter of 2026.
• Clinical trial updates include the expansion of the DeFianCe study to 180 patients and completion of enrollment in the DisTinGuish study.
• Initial data from Part A of the DeFianCe study showed a 30% overall response rate and a 93% disease control rate across all patients, with enhanced activity in left-sided tumors and rectal/rectosigmoid carcinomas.
• The company expects to complete enrollment in Part B of the DeFianCe study in late Q3 or early Q4 2024 and report initial data from Part C of the DisTinGuish study in the second half of 2024 or early 2025.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong clinical trial results, a successful capital raise, and a significant reduction in net loss. The company appears to be well-positioned for future growth and clinical milestones.

Positives

• The $40 million private placement significantly strengthens Leap's financial position, extending the cash runway into the second quarter of 2026.
• Clinical data from Part A of the DeFianCe study shows promising results, particularly in patients with left-sided tumors and rectal/rectosigmoid carcinomas.
• The expansion of the DeFianCe study to 180 patients will provide more robust data for the left-sided colorectal cancer subpopulation.
• The completion of enrollment in Part C of the DisTinGuish study is a significant milestone, with initial data expected soon.
• The company's net loss decreased substantially year-over-year, primarily due to reduced research and development expenses.

Negatives

• The company still reported a net loss of $13.8 million for the first quarter of 2024.
• The company is still reliant on external funding to continue operations and clinical trials.

Risks

• The company's ability to successfully execute its clinical trials and the timing of enrollment are subject to risks.
• The results of clinical trials and pre-clinical studies may not be favorable.
• The company's ability to enter into new strategic partnerships and maintain existing collaborations is crucial for its success.
• Regulatory approvals for Leap's clinical trials and products are not guaranteed.
• The company is exposed to inflation, currency rate, and interest rate fluctuations.
• Global conflicts and supply chain issues could delay or adversely affect clinical trials and other operations.

Future Outlook

The company expects the $40 million private placement to fund operations into the second quarter of 2026, enabling the expansion of the DeFianCe study and the maturation of data from the DisTinGuish study. They anticipate achieving major clinical milestones in the year ahead.

Management Comments

• We appreciate the strong support of Gilead and the new and existing institutional investors who participated in our recent $40 million financing that will enable the expansion and continued execution of the DKN-01 development program, said Douglas E. Onsi, President and Chief Executive Officer of Leap.
• The financing provides cash runway into the second quarter of 2026, allowing the expansion of Part B of the DeFianCe CRC study to 180 patients, the full maturation of data in Part C of the DisTinGuish GEJ/gastric cancer study, and the manufacturing of Phase 3 clinical trial material.
• We are well positioned for continued success and look forward to achieving major clinical milestones in the year ahead.

Industry Context

Leap Therapeutics is operating in the competitive biotechnology sector, focusing on targeted and immuno-oncology therapeutics. The company's progress with DKN-01, particularly in colorectal and gastroesophageal cancers, positions it to address significant unmet medical needs. The collaboration with Gilead Sciences and other investors highlights the potential of their approach.

Comparison to Industry Standards

• The overall response rate (ORR) of 30% in the DeFianCe study for all patients is within the range of other second-line colorectal cancer treatments, but the 46% ORR in the rectal/rectosigmoid subgroup is notably higher.
• The median progression-free survival (PFS) of 6.3 months across all patients in the DeFianCe study is comparable to some existing therapies, but the 8.6 months in left-sided tumors and 9.4 months in rectal/rectosigmoid carcinomas are promising.
• Companies like Bristol Myers Squibb and Merck have also been developing immuno-oncology therapies for similar cancers, making the competitive landscape intense.
• The expansion of the DeFianCe study to 180 patients is a strategic move to increase statistical power, similar to how other companies enhance their clinical trial designs to improve data quality.
• The cash runway into the second quarter of 2026 is a positive sign, as many biotech companies face funding challenges, and this provides Leap with a longer period to execute its clinical programs.

Stakeholder Impact

• Shareholders will benefit from the extended cash runway and positive clinical trial results.
• Employees will have job security due to the company's improved financial position.
• Patients may benefit from the development of new cancer treatments.
• Investors will be encouraged by the company's progress and financial stability.

Next Steps

• The company will continue enrollment in Part B of the DeFianCe study, with completion expected in late Q3 or early Q4 2024.
• Initial data from Part C of the DisTinGuish study is expected in the second half of 2024 or early 2025.
• Leap will focus on the continued development of DKN-01 and other pipeline candidates.
• The company will continue to seek strategic partnerships to further its development programs.

Key Dates

Keywords

Leap Therapeutics, DKN-01, Colorectal Cancer, Gastroesophageal Cancer, Clinical Trials, Private Placement, Oncology, Biotechnology, Financial Results, Bevacizumab, Tislelizumab