VANCOUVER, British Columbia, May 02, 2017 (GLOBE NEWSWIRE) -- Kalytera Therapeutics, Inc. (TSXV:KALY) (OTCQB:KALTF), a clinical-stage biopharmaceutical company developing cannabinoid-derived therapeutics for Graft versus Host Disease (“GvHD”) and certain other disorders, today reported its Fiscal Year 2016 results and provided a corporate update and outlook for 2017. (All dollars U.S. unless otherwise noted.)
- Plans clinical trial on its CBD product candidate for GvHD in H2 2017; to be completed over the next 18 months
- Expects to advance at least one of its CBD prodrugs into Phase 1 human clinical testing over the next 18 months
- $2.9 million in working capital as of December 31, 2016
- CEO: ‘Kalytera positioned to become a market leader in CBD pharmaceutical R&D’
Fiscal Year 2016 Result Highlights
Working capital totaled $2.9 million, including cash and cash equivalents of $673,000, as of December 31, 2016 compared with $422,000 and $622,000, respectively, as of December 31, 2015.
Subsequent to year-end, the Company’s March 31, 2017 cash balance was $2.69 million (unaudited) and reflects its February 2017 equity private placement of CDN$15 million, approximately CDN$13.5 million (USD$10 million) of which was invested in its acquisition of Talent Biotechs in that same month.
As of May 1, 2017, Kalytera had 129,235,073 common shares outstanding.
Research and development expenses were $1.6 million for the full year ended December 31, 2016 compared with $629,000 for the same period in 2015.
General and administrative expenses were $3.45 million for the full year ended December 31, 2016 compared with $775,000 a year ago. The increase resulted primarily from a higher level of operations as well as certain one-time expenses allocated from its Canadian going public transaction in the fourth quarter of 2016.
Net loss for the year ended December 31, 2016 was $(11.55 million) compared with a net loss of $(1.4 million) for 2015. The 2016 net loss reflects $6.9 million in one-time expenses associated with its going public transaction in the fourth quarter of 2016.
(Financial tables follow the narrative section, below.)
Kalytera Corporate Update
Kalytera’s December 30, 2016 transition to a publicly traded company on the TSXV was an important milestone. The Company would like to thank its long-term shareholders for their support, welcome its hundreds of new shareholders, and on the occasion of its first fiscal year report as a public company, take this opportunity to discuss its market position, strategy and goals for 2017.
2016: Establishing the Foundation
Kalytera highlights for 2016 include:
- Appointed Robert Farrell, J.D. as President, COO, CFO and member of the Board of Directors. Mr. Farrell has over 25 years of experience in the pharmaceutical, biotechnology, and medical device sectors
- Appointed Andrew L. Salzman, M.D. as Kalytera’s CMO, CEO, and member of the Board of Directors. Dr. Salzman is a renowned physician, inventor, and biomedical entrepreneur who has brought numerous medicines from conception to clinical trials. As the founder of Inotek Pharmaceuticals (Nasdaq:ITEK), a clinical-stage developer of therapies for glaucoma and other serious eye diseases, Dr. Salzman helped raise $92M in venture capital and concluded a $600M licensing transaction with Genentech.
- Raised gross proceeds of approximately CDN$11.3 million in privately placed equity capital.
- Developed its pre-clinical stage pipeline of CBD prodrugs for the treatment of a variety of disorders, with an initial focus on atopic dermatitis and acne vulgaris. CBD prodrugs are designed to specifically modify physiochemical properties and functionality of CBD. Kalytera anticipates that, based on pre-clinical animal studies it has conducted to date, its prodrug pipeline will be well tolerated.
- Kalytera’s going public transaction in Canada on December 30, 2016.
2017: Transformed to a Clinical-Stage Biopharmaceutical Company
Since the start of 2017, Kalytera’s achievements include:
- In January, the Company announced preliminary results of a 12 patient Phase 2a study evaluating the safety and efficacy of prolonged use of CBD in the prevention of GvHD. Preliminary results of the study demonstrate that only 15% of patients in the CBD treatment group developed Grades 2-4 GvHD, as compared to a 60-70% incidence predicted by historical data used as a control. The study was conducted by Talent Biotechs.
- In February, the Company completed an equity private placement of CDN$15 million.
- In February, the Company closed the acquisition of Talent Biotechs, a privately held, Israeli-based developer of CBD therapeutics, acquiring its CBD program for GvHD.
- In February, the Company announced results from a Phase 2a study evaluating the safety and efficacy of CBD for the treatment of acute (Grades 3-4) GvHD. In this study, ten patients with acute (Grades 3-4) GvHD that was refractory to standard treatment with high-dose steroids, were administered daily doses of CBD for up to three months. Nine of the ten patients enrolled in the study responded to treatment; seven achieved complete remission, and two achieved a near-complete response.
- In April, the Company announced that it had applied for a $5 million grant from the Israel Innovation Authority to fund development of its portfolio of CBD prodrugs.
Commenting, Kalytera Chief Executive Officer Dr. Salzman said, “In just the past five months, we have become publicly traded in Canada, closed the strategic acquisition of Talent Biotechs allowing us to become a clinical-stage biopharmaceutical company, and successfully raised CDN$15 million. Our most recent Phase 2a study on CBD for treatment of acute GvHD is encouraging, and we are actively developing our plan for a forthcoming clinical trial slated to begin later this year.”
Kalytera’s next clinical trial on its CBD product candidate for GvHD is expected to be a dose range-finding study via adaptive design with proposed definitive efficacy and safety endpoints to be completed over the next 18 months-- that may potentially be considered sufficient to support drug registration.
“We believe that CBD has the potential to be one of the more important and versatile pharmaceutical compounds in the years to come, and Kalytera is well positioned to become a global leader in this exciting area of research,” Dr. Salzman added. “We have a highly accomplished senior management team and boards for a young company comprised of world-class scientific, medical, and pharmaceutical industry executives whose bios are available at: https://kalytera.co/about/management-team/ and https://kalytera.co/about/scientific-advisory-board/. Further, much of our research is conducted in Israel, a global center for cannabis-related medical research and a hub for many industry-leading researchers and facilities.
“I am confident that Kalytera’s development in 2017 will continue to accelerate. With an initial clinical focus on treatment and prevention of GvHD, as well as development of our portfolio of CBD product candidates we have invented or licensed, we are positioned to become a market leader in CBD pharmaceutical R&D,” Dr. Salzman concluded.
Kalytera Growing Product Candidate Portfolio
In addition to CBD for the treatment and prevention of GvHD, Kalytera has invented and applied for composition of matter patent protection for four CBD prodrugs. It has proprietary CBD drug pre-clinical programs that may address:
- Atopic Dermatitis / Acne Vulgaris
- Acute Respiratory Distress Syndrome (“ARDS”)
- Sepsis Induced Acute Renal Failure
- Traumatic Brain Injury (“TBI”)
- Ulcerative Colitis (Irritable Bowel Syndrome (“IBS”) / Crohn’s Disease)
2017 Goals
Kalytera is entering 2017 with strong momentum and its business plan features an ambitious 18-month agenda. Goals include:
- Take CBD/GvHD program through Clinical Trials. Kalytera plans to apply to the FDA for a definitive efficacy investigation with multi-center, randomized, double blind, placebo-controlled investigation in patients with GvHD to find definitive dosing efficacy with safety endpoints in that population. The Company anticipates beginning that study in the second half of the year.
- Advance at least one of its CBD prodrugs into Phase 1 human clinical testing.
- Retain a Top-Tier CRO, or contract research management organization, to help manage the Company’s FDA and EMEA-compliant clinical research for the most capital-efficient path to registration and commercialization.
- Develop the Pipeline. The Company has several, proprietary CBD derivative and prodrug pre-clinical compounds that may address exciting new areas for CBD such as ARDS, IBS, and TBI. Kalytera expects to be increasingly opportunistic to pursue licensing, joint venture, or acquisition of CBD formulations.
- Build the CBD IP Portfolio. Continue to file for patents to protect formulations the Company is acquiring, licensing, or inventing in medicinal chemistry around CBD in the U.S. and Israel.
- Reinforce Management Team. Kalytera has an exceptionally accomplished management team and Board of Directors for a young company. In the weeks and months ahead, it will reinforce its leadership, including the Scientific Advisory Board, with well-respected authorities on cannabis biotech research and business.
- Raise Growth Capital. By going public in Canada, Kalytera has the potential to lower its cost of capital. When the time is right, it plans to raise additional capital.
- Communicate Proactively. As a public company, Kalytera is implementing programs to communicate proactively with the investment community and media on its progress. That includes plans to begin presenting at investment banking conferences on cannabis pharmaceutical research.
About GvHD and Kalytera’s CBD Clinical Research Program
GvHD is an FDA and EMEA-designated “orphan disease.” GvHD is a major cause of morbidity and mortality after hematopoietic stem cell transplantation (“HCT”). It is a multisystem disorder that occurs when the transplanted cells from a donor (“the graft”) recognize the transplant recipient (“the host”) as foreign. Typically, we estimate that only 60% of patients respond to first-line therapy with high-dose steroids. The 12-month mortality rate among patients with steroid-refractory Grade 3 and 4 GvHD exceeds 60% and 80%, respectively. In February 2017, Kalytera published results of a Phase 2a Clinical Study evaluating the safety and efficacy of CBD for treating Acute GvHD, with promising initial results.
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||||||
| Kalytera Therapeutics, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | December 31, | |||||||
| U.S. dollars in thousands | 2016 | 2015 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 673 | $ | 622 | ||||
| Other receivables and prepaid expenses | 4,141 | - | ||||||
| Non-current assets | - | 19 | ||||||
| Total assets | $ | 4,814 | $ | 641 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Total current liabilities | $ | 1,897 | $ | 200 | ||||
| Total equity | 2,917 | 441 | ||||||
| Total liabilities and stockholders' equity | $ | 4,814 | $ | 641 | ||||
| Kalytera Therapeutics, Inc. | ||||||||
| Condensed Consolidated Statement of Operations | Year ended | |||||||
| U.S. dollars in thousands, except share and per share data | December 31, | |||||||
| 2016 | 2015 | |||||||
| Operating expenses: | ||||||||
| Research and development | $ | 1,622 | $ | 629 | ||||
| General and administrative | 3,451 | 775 | ||||||
| Expenses in connection with reverse merger | 6,923 | - | ||||||
| Total operating expenses | $ | 11,996 | $ | 1,404 | ||||
| Loss from operations | $ | 11,996 | $ | 1,404 | ||||
| Other income (expense): | ||||||||
| Finance expense, net | 187 | - | ||||||
| Revaluation of warrants (income) | (629 | ) | - | |||||
| Loss before income taxes | $ | 11,554 | $ | 1,404 | ||||
| Income taxes | - | - | ||||||
| Net loss and comprehensive loss | $ | 11,554 | $ | 1,404 | ||||
| Basic and diluted loss per share | $ | (0.39 | ) | $ | (0.07 | ) | ||
| Weighted average number of Common shares outstanding | 29,407,922 | 21,043,842 | ||||||
| Kalytera Therapeutics, Inc. | Year ended | |||||||
| Condensed Consolidated Statements of Cash Flows | December 31, | |||||||
| U.S. dollars in thousands | 2016 | 2015 | ||||||
| Net loss | $ | (11,554 | ) | $ | (1,404 | ) | ||
| Net cash used in operating activities | (1,636 | ) | (1,132 | ) | ||||
| Net cash used in investing activities | - | (20 | ) | |||||
| Net cash provided by financing activities | 1,687 | 1,647 | ||||||
| Increase in cash and cash equivalents | 51 | 495 | ||||||
| Cash and cash equivalents at the beginning of the year | 622 | 127 | ||||||
| Cash and cash equivalents at the end of the year | $ | 673 | $ | 622 | ||||
| Non-cash transactions: | ||||||||
| Receivable for Common shares issued | $ | 4,119 | - | |||||
| Issuance of common shares for warrants surrendered in reverse merger | $ | 2,007 | - | |||||
About Kalytera
Kalytera (TSXV:KALY) (OTCQB:KALTF) is a clinical-stage pharmaceutical company developing cannabinoid therapeutics (https://kalytera.co/). CBD has shown activity against a number of pharmacological targets. However, there are limitations associated with CBD, including its poor oral bioavailability which greatly limits the efficacy of medical marijuana edible products that contain a high level of CBD.
Through its proven leadership, drug development expertise, and growing intellectual property portfolio, Kalytera seeks to establish a leading position in the development of novel cannabinoid medicines for a range of important unmet medical needs -- with an initial focus on Graft versus Host Disease (“GvHD”).
Kalytera is also developing its own proprietary cannabidiol (“CBD”) prodrugs, with an initial focus on atopic dermatitis and acne vulgaris.
Kalytera is developing innovative CBD formulations and prodrugs intended for commercialization as FDA and EMEA-approved prescription medications. In addition to licensed IP rights, Kalytera has filed composition of matter and method of use patents covering its inventions to reinforce its position in the market.
Safe Harbor
This news release contains “forward-looking information” within the meaning of applicable securities laws, including in respect of its product candidate pipeline, planned clinical trials, regulatory approval prospects, intellectual property objectives, management goals, capital raising abilities and other statements included in this news release of a forward-looking nature. Although Kalytera believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because Kalytera can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. The statements in this press release are made as of the date of this release. Kalytera undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of Kalytera, its securities, or its respective financial or operating results (as applicable). Kalytera disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.