8-K: Leap Therapeutics Announces Third Quarter 2024 Financial Results and Provides Clinical Pipeline Update

Leap Therapeutics reported its third quarter 2024 financial results, highlighted by increased R&D spending and progress in clinical trials for DKN-01 and the initiation of development for FL-501.

Summary

• Leap Therapeutics announced its financial results for the third quarter ended September 30, 2024.
• The company reported a net loss of $18.2 million for the quarter, compared to a $13.7 million loss in the same period of 2023.
• The increased loss was primarily due to a rise in research and development expenses.
• Research and development expenses increased to $14.9 million, up from $11.5 million in the third quarter of 2023.
• This increase was driven by higher manufacturing costs for clinical trial materials, increased clinical trial costs due to patient enrollment, and increased consulting fees.
• General and administrative expenses decreased slightly to $2.9 million from $3.3 million in the same period last year.
• The company's cash and cash equivalents totaled $62.8 million as of September 30, 2024.
• Leap completed enrollment in the expanded Part B of the Phase 2 DeFianCe study for DKN-01 in advanced colorectal cancer, with data expected in mid-2025.
• Patient follow-up is ongoing in the Part C of the DisTinGuish study for DKN-01 in gastroesophageal junction and gastric cancer, with data expected in late 2024 or early 2025.
• Leap has initiated development of FL-501, an anti-GDF-15 monoclonal antibody, based on positive preclinical data.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive due to the progress in clinical trials and the initiation of a new program, but the increased net loss and R&D expenses temper the overall outlook.

Positives

• Leap has completed enrollment in the expanded Part B of the Phase 2 DeFianCe study, a significant milestone for the DKN-01 program.
• The company has a strong cash position of $62.8 million, which is expected to fund operations into Q2 2026.
• Leap is advancing FL-501 into development, a potential best-in-class anti-GDF-15 antibody, based on promising preclinical data.
• Patient follow-up is progressing in the Part C of the DisTinGuish study.

Negatives

• The company's net loss increased to $18.2 million in Q3 2024, compared to $13.7 million in Q3 2023.
• Research and development expenses increased by $3.4 million compared to the same period last year, primarily due to increased manufacturing and clinical trial costs.

Risks

• The company's ability to successfully execute its clinical trials and the timing of enrollment in and cost of such clinical trials are risks.
• The results of Leap's clinical trials and pre-clinical studies are uncertain.
• Leap's ability to successfully enter into new strategic partnerships and maintain existing collaborations is a risk.
• There is no guarantee that any Leap clinical trials and products will receive approval from regulatory agencies.
• The company is exposed to inflation, currency rate and interest rate fluctuations, as well as fluctuations in the market price of Leap's traded securities.

Future Outlook

The company expects to report initial data from the DeFianCe study in mid-2025 and from the DisTinGuish study in late 2024 or early 2025. Leap's cash position is expected to fund operations into Q2 2026.

Management Comments

• We have made significant progress advancing our pipeline this quarter, including the completion of enrollment in the expanded Part B of the Phase 2 DeFianCe study of DKN-01 in patients with advanced colorectal cancer, said Douglas E. Onsi, President and Chief Executive Officer of Leap.
• We look forward to sharing initial randomized controlled data from the DisTinGuish study and the DeFianCe study in the coming months.
• In addition, based on positive preclinical data, we are enthusiastically moving FL-501 into development.
• With a strong cash position that is expected to fund operations into Q2 2026, Leap is well positioned for continued success and long-term growth to deliver personalized medicines to patients fighting against cancer.

Industry Context

The announcement reflects the ongoing trend in the biotechnology industry of advancing clinical trials for novel cancer therapies and the importance of securing sufficient funding for research and development. The focus on monoclonal antibodies and immuno-oncology aligns with current industry trends.

Comparison to Industry Standards

• Leap's increased R&D spending is typical for a biotech company in clinical development, as seen in companies like Xencor and MacroGenics, which also invest heavily in clinical trials.
• The completion of enrollment in the DeFianCe study is a positive milestone, similar to other companies reaching enrollment targets in their Phase 2 trials, such as Arcus Biosciences.
• The cash runway into Q2 2026 is a positive sign, comparable to other biotech companies that have secured funding to support their clinical programs, such as Mirati Therapeutics.
• The development of FL-501 is in line with the industry's focus on novel targets and mechanisms of action, similar to companies like IGM Biosciences that are developing novel antibody formats.

Stakeholder Impact

• Shareholders may be concerned about the increased net loss, but encouraged by the clinical trial progress and cash runway.
• Employees may be positively impacted by the company's continued growth and development of new programs.
• Patients may benefit from the potential development of new cancer therapies.
• Creditors may be reassured by the company's strong cash position.

Next Steps

• Leap will continue patient follow-up in the DisTinGuish study.
• The company will prepare for the release of initial data from the DisTinGuish study in late 2024 or early 2025.
• Leap will prepare for the release of initial data from the DeFianCe study in mid-2025.
• The company will continue development of FL-501.

Key Dates

Keywords

Leap Therapeutics, DKN-01, FL-501, clinical trials, oncology, biotechnology, financial results, research and development, monoclonal antibody, cancer