MEI Pharma Inc
For the period ended Mar 31, 2024. Filed May 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 9, 2024
LITS$1.02+4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-02-13.
0000950170-24-014640
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0000950170-24-056834
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 166 previous paragraphs and 184 current paragraphs.
128 unchanged; 29 reworded; 25 added; 6 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
In April 2024, the Company reported that its Board unanimously aligned on a strategy to prioritize clinical development of voruciclib while enabling development of a new ME-344 formulation for Phase 1 study. Additionally, the Company’s Board unanimously determined not to proceed with a the Potential Second Return of Capital under the October 31, 2023, Cooperation Agreement in order to conserve resources and align strategic investment, and thereby extend the Company’s operational runway.
Current report
Subsequently, and consistent with the reported pre-clinical studies, data from an ongoing Phase 1 study evaluating voruciclib as a single agent and in combination with venetoclax in patients with relapsed or refractory (R/R) AML have also demonstrated the anticipated decreases in Mcl-1 protein.
Current report
Since reporting data from the monotherapy stage of the study, we have advanced to the next stage of the study to evaluate seven voruciclib dose levels from 50 mg every other day to 300 mg daily for 14 consecutive days in a 28-day cycle in combination with standard dose venetoclax in patients with R/R AML. In April 2024, we reported that a total of 29 patients with R/R AML, median age 67 years (range 34-89), enrolled in this dose escalation stage of the study evaluating voruciclib in combination with venetoclax. These patients were generally heavily pretreated; the median number of prior therapies was 3 (range 1-7), and 15 (52%) patients had ≥3 prior lines. Almost all patients (28/29) were treated with venetoclax in an earlier line of therapy. Additionally, 21 (72%) patients were noted as being in an adverse 2017 ELN Risk Category due to adverse cytogenetics and molecular mutations.
Current report
Of the 20 patients administered voruciclib at a dose of 100 mg or more in combination with venetoclax, three patients achieved a response, including two patients that achieved a complete response with incomplete hematologic recovery (CRi) and one patient that achieved a morphologic leukemia-free state (MLFS), in each case having received venetoclax in an earlier line of treatment. Responses lasted 7 months in one patient, 5 months and ongoing in the second patient, and the third patient was referred to stem cell transplant. Further, an additional 14 patients had stable disease which lasted more than 90 days in 5 patients.
Current report
In the 20 patients administered voruciclib at a dose of 100 mg or more in combination with venetoclax, initial results from correlative biomarker assay studies of available samples from patients treated with the combination also demonstrated anticipated decreases of Mcl-1, including a greater decrease in Mcl-1 at higher doses. This supports our hypothesis that voruciclib, as an inhibitor or CDK9, regulates Mcl-1 and therefore may address the upregulation of MCL1 associated with venetoclax. Additional evidence of anti-leukemic activity was also demonstrated by decreases in bone marrow blast counts post voruciclib/venetoclax administration versus pre drug administration in 50% (10/20) of evaluable patients.
Current report
Voruciclib at doses up to 300 mg administered on 14 consecutive days in a 28-day cycle in combination with standard dose venetoclax was well tolerated with no dose limiting toxicities observed. The maximum tolerated dose of voruciclib administered on this schedule with venetoclax has not been established. There were no discontinuations due to drug-related adverse events and no evidence of overlapping toxicity has been observed to date. The most common (≥5% of patients) grade 3 adverse events were myelosuppression associated with AML. Only 1 patient was observed as having a non-hematologic grade 3 drug-related adverse event (diarrhea).
Current report
The study is ongoing and is also evaluating a 12-patient expansion cohort of voruciclib administered at 300 mg daily for 14 consecutive days in a 28-day cycle in combination with venetoclax. The study will further evaluate escalating doses of voruciclib administered over 21 consecutive days in a 28-day cycle in combination with venetoclax to increase dose intensity and potentially optimize patient response. Clinical data is expected to be reported from the ongoing Phase 1 clinical trial evaluating voruciclib plus venetoclax in patients with R/R AML in the remainder of calendar 2024.
Current report
Currently, we are advancing ME-344 via development of a new formulation with the goal of increasing biological activity, improving patient convenience of administration and increasing commercial opportunity. We believe a new formulation represents the optimal approach to pursue the potential of the program after observing encouraging data in two clinical studies evaluating the prior ME-344 formulation in combination with bevacizumab (Avastin®).
Current report
Building on the clinical study evaluating patients with breast cancer, a Phase 1b study evaluating ME-344 in combination with bevacizumab in patients with relapsed metastatic colorectal cancer (“mCRC”) after failure of standard therapies was initiated. The study was designed to evaluate ME-344 plus bevacizumab in up to two cohorts of approximately 20 patients each. The option to enroll the second cohort was conditioned upon Cohort 1 reaching a predetermined non-progression threshold of at least 20% at four months. Patients in the study were treated until disease progression or intolerability. The primary endpoint of the study was 16-week progression free survival (“PFS”), and secondary endpoints included overall PFS, duration of response, overall survival and safety.
Current report
ME-344 was administered once weekly on Days 1, 8 and 15 combined with bevacizumab on Days 1 and 15 of each 28-day cycle. Cohort 1 enrolled a total of 23 patients with relapsed mCRC. Patients were generally heavily pretreated; the median number of prior lines of therapy was 4 (range 1-8), 18 (78%) patients had ≥3 prior lines, and all patients had previously received bevacizumab and standard chemotherapy. As reported in April 2024, the combination was generally well tolerated with no overlapping toxicities observed. Two patients (9%) discontinued therapy due to an adverse event: fatigue considered related to study drugs and sepsis considered unrelated. The most common (≥10% of patients) drug-related adverse events (all grades/grade ≥3) were fatigue in 8 (35%) / 3 (13%) patients and abdominal pain in 3 (13%) / 2 (9%) patients.
Current report
It was further reported that in the first cohort, 5 of 20 (25%) evaluable patients completed 16 weeks of therapy without evidence of disease progression, exceeding the 20% predetermined threshold as set forth in the Clinical Study Protocol to proceed to Cohort 2. The median PFS was 1.9 months, the 4-month PFS rate was 31.2%, and the median overall survival was 6.7 months with 15 patients censored at the time of analysis. Nine (45%) of the 20 evaluable patients had stable disease. Although Cohort 1 exceeded the predetermined PFS threshold, the Company decided not to initiate enrollment in a second cohort.
Current report
We are continuing to pursue ME-344 via development of a new formulation to advance our novel approach to inducing synthetic lethality in tumors in combination with VEGF inhibitors such as bevacizumab (Avastin®). The Company has already initiated research and development activity of the new formulation, with the goal of increasing biological activity, improving convenience of administration and increasing commercial opportunity.
Current report
Components of Results of Operations
Current report
Operating Expenses
Current report
Research and development
Current report
We expense research and development costs as incurred. Research and development activities are central to our business model. In-licensing fees and other costs to acquire technologies used in research and development that have not yet received regulatory approval and that are not expected to have an alternative future use are expensed when incurred.
Current report
We expect research and development expenses will continue to increase for the foreseeable future and will comprise a larger percentage of our total expenses as we conduct clinical trials for our current product candidates in development and continue to discover and develop additional candidates.
Current report
General and Administrative
Current report
General and administrative expenses consist primarily of personnel costs, which include salaries and other related costs, including share-based compensation for personnel in our executive, finance, business development, operations and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters; professional fees for accounting, auditing, tax and consulting services; insurance costs; travel expenses; facilities-related costs, which include direct depreciation costs and expenses for rent and maintenance of facilities and other operating costs that are not specifically attributable to research activities.
Current report
Other Income (Expense)
Current report
Other income (expense) primarily relates to investment income received on our short-term investments. During fiscal 2023, other income (expense) also included changes in fair value related to our warrant liability.
Current report
The following table summarizes certain components of our results of operations (in thousands):
Current report
Other Income, net: Other income, net, decreased by $0.3 million to $0.7 million for the three months ended March 31, 2024 compared to $1.0 million for the three months ended March 31, 2023 primarily due to lower interest and dividend income as a result of less short-term investments.
Current report
The following table summarizes certain components of our results of operations (in thousands):
Removed paragraphs (6)
Previous report
We believe our cash is sufficient to fund operations for at least 12 months and through the reporting of clinical data readouts from the ongoing voruciclib Phase 1 and ME-344 Phase 1b clinical programs.
Previous report
As further presented in the ASH 2023 poster, the second stage of the study evaluating the combination of voruciclib and venetoclax in patients with R/R AML is ongoing. All patients were heavily pre-treated with a median of three prior therapies including venetoclax. Voruciclib at doses up to 300 mg on the intermittent schedule have been administered in combination with venetoclax in patients with relapsed or refractory AML. No DLTs have been reported and no evidence of overlapping toxicity has been observed to date. Voruciclib doses from 50 mg to 200 mg administered in combination with venetoclax, as reported in the ASH 2023 poster, demonstrated anti-tumor activity as evidenced by objective responses and reductions in transfusions, with multiple patients continuing on therapy for ≥ four months.
Previous report
Currently, we are evaluating ME-344 in combination with bevacizumab (AVASTIN®) in patients with metastatic colorectal cancer.
Previous report
We are currently evaluating the combination of ME-344 and bevacizumab in patients with metastatic colorectal cancer in an ongoing Phase 1b study.
Previous report
We are advancing ME-344 in combination with the anti-angiogenic antibody bevacizumab in a Phase 1b study evaluating patients with relapsed colorectal cancer. The study is enrolling patients with progressive disease after failure of standard therapies with patients treated until disease progression or intolerance. The primary objective is progression free survival. Secondary endpoints include overall response rate, duration of response, overall survival and safety. Safety and efficacy data from the first cohort of approximately 20 patients in the ongoing ME-344 Phase 1b study is expected to be reported in the first half of calendar 2024. Additionally, ME-344 may also have clinical potential against hematological malignancies. At the AACR Annual Meeting 2022, a poster presentation reported results from preclinical studies exploring the ability of ME-344 to enhance the activity of venetoclax against AML. Data from the in vitro and in vivo preclinical studies evaluating the combination of ME-344 with venetoclax in standard-of-care-resistant AML cell lines and relapsed or refractory AML patient samples suggest that ME-344, both alone and in combination with venetoclax, inhibits purine biosynthesis, suppresses oxidative phosphorylation, induces apoptosis and decreases MCL-1, which together target metabolic vulnerabilities of AML cells. The data demonstrated that ME-344 and venetoclax prolong survival in MV4-11 and MV4-11/AraC-R-derived xenograft AML models. The poster concluded that ME-344 enhances venetoclax activity against AML cells including resistant AML.
Previous report
As previously discussed in the overview section above, we may be required to pay a second return of capital of not to exceed $9.33 million if authorized by our Board as further described in the Cooperation Agreement.
Reworded paragraphs (29)
Previous wording
On October 31, 2023, we announced entry into a Cooperation Agreement (Cooperation Agreement) with Anson Funds (Anson) and Cable Car Capital (Cable Car) which contains the following key terms:
Current wording
We believe our cash is sufficient to fund operations for at least 12 months. On October 31, 2023, we announced entry into a Cooperation Agreement (Cooperation Agreement) with Anson Funds (Anson) and Cable Car Capital (Cable Car) which contains the following key terms:
Previous wording
Capital Return to Stockholders: Payment of a dividend to stockholders in the amount of $1.75 per share of common stock to all stockholders, which was issued on December 6, 2023. Additionally, a second return of capital of not to exceed $9.33 million (the Potential Second Return of Capital) could be issued if authorized by the board of directors (Board) should our ongoing ME-344 phase 1b trial fail to meet certain endpoints or our Board determines not to proceed with a second cohort. The Potential Second Return of Capital may take the form of a dividend or tender offer and is subject to Board approval as well as modification associated with applicable requirements under Delaware law, as detailed in the Cooperation Agreement.
Current wording
Capital Return to Stockholders: Payment of a $11.7 million dividend to stockholders on December 6, 2023 and a Potential Second Return of Capital not to exceed $9.33 million. As described below, the Board voted not to proceed with the Potential Second Return of Capital.
Previous wording
Our clinical-stage drug candidate pipeline includes voruciclib, an oral CDK9 inhibitor, and ME-344, an intravenous small molecule mitochondrial inhibitor targeting OXHPHOS in the mitochondria.
Current wording
Our clinical-stage drug candidate pipeline includes voruciclib, an oral CDK9 inhibitor, and ME-344, an intravenous small molecule inhibitor mitochondrial oxidative phosphorylation (OXHPHOS).
Previous wording
Voruciclib is a potent and selective orally administered CDK9 inhibitor. Voruciclib is being studied in a Phase 1 trial evaluating dose and schedule in patients with acute myeloid leukemia (AML) and B-cell malignancies as a single-agent, and in combination with the B-cell lymphoma 2 (BCL2) inhibitor venetoclax (marketed as Venclexta®) in patients with AML. Voruciclib is also being evaluated in pre-clinical studies to explore potential activity in various solid tumor cancers including in combination with therapies that target the RAS signaling pathway, such as KRAS inhibitors.
Current wording
Voruciclib is a selective orally administered CDK9 inhibitor. Voruciclib is being studied in a Phase 1 trial currently evaluating dose and schedule in patients with acute myeloid leukemia (AML) in combination with the B-cell lymphoma 2 (BCL-2) inhibitor venetoclax (marketed as Venclexta®). Voruciclib is also being evaluated in pre-clinical studies to explore potential activity in various solid tumor cancers including in combination with therapies that target the RAS signaling pathway, such as KRAS inhibitors.
Previous wording
CDK9 is a transcriptional regulator of the myeloid leukemia cell differentiation protein (MCL1), a member of the family of anti-apoptotic proteins which, when elevated, may prevent the cell from undergoing cell death and result in poor prognosis in cancer. Inhibition of CDK9 blocks the production of MCL1, which is also an established resistance mechanism to the BCL2 inhibitor venetoclax.
Current wording
CDK9 is a transcriptional regulator of the myeloid leukemia cell differentiation protein (Mcl-1), a member of the family of anti-apoptotic proteins which, when elevated, may prevent the cell from undergoing cell death and result in poor prognosis in cancer. Inhibition of CDK9 blocks the production of Mcl-1, which is also an established resistance mechanism to the BCL-2 inhibitor venetoclax.
Previous wording
The research suggests that voruciclib is potentially an attractive therapeutic agent for treating cancers in combination with venetoclax or other BCL-2 inhibitors, to address potential resistance associated with MCL1, and is supportive of our ongoing clinical evaluation of voruciclib in B-cell malignancies and AML.
Current wording
The research suggests that voruciclib is potentially an attractive therapeutic agent for treating cancers in combination with venetoclax or other BCL-2 inhibitors, to address potential resistance associated with MCL1, and is supportive of our ongoing clinical evaluation of voruciclib in AML.
Previous wording
We are evaluating patients with hematological malignancies in a Phase 1 clinical trial evaluating the dose and schedule of voruciclib monotherapy and in combination with venetoclax. The trial started with the evaluation of dose and schedule of voruciclib as a monotherapy in patients with relapsed and refractory B-cell malignancies and AML after failure of prior standard therapies to determine the safety, preliminary efficacy and maximum tolerated dose. After completing the monotherapy dose escalation stage of the study, we are now evaluating the dose and schedule of voruciclib in combination with venetoclax, a BCL-2 inhibitor, initially in patients with R/R AML. The primary goal of the Phase 1 study is to assess the safety, and possible synergies, of voruciclib administered in combination with venetoclax. Clinical data is expected to be reported from the dose escalation portion of the ongoing Phase 1 clinical trial evaluating voruciclib plus venetoclax in patients with R/R AML in the first calendar quarter of 2024.
Current wording
In a Phase 1 clinical trial, we are currently evaluating the dose and schedule of voruciclib in combination with venetoclax, a BCL-2 inhibitor, in patients with R/R AML. The trial started with the evaluation of dose and schedule of voruciclib as a monotherapy in patients with relapsed and refractory B-cell malignancies and AML after failure of prior standard therapies to determine the safety, preliminary efficacy and maximum tolerated dose. The primary objectives of the study are to determine the safety and biologic effective dose of voruciclib monotherapy or voruciclib in combination with venetoclax. Secondary objectives of the study include assessing the preliminary efficacy, pharmacokinetics, pharmacodynamics, and biomarkers of voruciclib monotherapy or voruciclib in combination with venetoclax.
Previous wording
As we reported in a poster presented at the American Society of Hematology (ASH) Annual Meeting in December 2023, the voruciclib monotherapy dose escalation/expansion stage of the study enrolled a total of 40 patients and is complete. The majority of patients (n=21) had AML and the remaining patients (n=19) had B-cell malignancies. Of the 40 patients enrolled, the first 16 were dosed daily continuously at 50 and 100 mg and the following 24 patients were dosed on an intermittent schedule (14 consecutive days on therapy in a 28-day cycle) at 100, 150 and 200 mg. All patients were heavily pre-treated with a median of three prior therapies
Current wording
As we reported in a poster presented at the American Society of Hematology (ASH) Annual Meeting in December 2023, the voruciclib monotherapy dose escalation/expansion stage of the study enrolled a total of 40 patients and is complete. The majority of patients (n=21) had AML and the remaining patients (n=19) had B-cell malignancies. Of the 40 patients enrolled, the first 16 were dosed daily continuously at 50 and 100 mg and the following 24 patients were dosed on an intermittent schedule (14 consecutive days on therapy in a 28-day cycle) at 100, 150 and 200 mg. All patients were heavily pre-treated with a median of three prior therapies (range 1-9), and five patients had prior hematopoietic stem cell transplant. Voruciclib at doses up to 200 mg administered on 14 consecutive days in a 28-day cycle (Cohort 2) was well tolerated with no dose limiting toxicities (DLT) reported. The most common adverse events (≥20% of patients) were diarrhea, nausea, anemia and fatigue. The large majority of adverse events were Grade 1-2; of note, the only Grade 3-4 adverse events in Cohort 2 were diarrhea (n=1) and anemia (n=5). Pharmacokinetics were dose proportional and a mean half-life of approximately 24 hours supports once daily dosing.
Previous wording
ME-344 is a novel drug candidate that inhibits mitochondrial OXPHOS, a fundamental metabolic pathway involved in the production of adenosine triphosphate (ATP) in the mitochondria. ATP provides energy to drive many metabolic cell processes, including division, proliferation, and growth. By disrupting the production of ATP, ME-344 has been shown to induce cancer cell death in nonclinical models and was associated with antitumor activity in clinical studies.
Current wording
ME-344 is a novel drug candidate that inhibits mitochondrial OXPHOS, a fundamental metabolic pathway involved in the production of adenosine triphosphate (ATP) in the mitochondria. ATP provides energy to drive many metabolic cell processes, including division, proliferation, and growth. By disrupting the production of ATP, ME-344 has been shown to induce cancer cell death in nonclinical models and was associated with antitumor activity in clinical studies. ME-344 has also demonstrated clinical activity in multiple clinical studies in combinations, including with bevacizumab (Avastin®).
Previous wording
We obtained initial clinical validation of this approach ina completed investigator-initiated, multi-center, randomized, controlled, window of opportunity clinical trial evaluating ME-344 in combination with bevacizumab that enrolled a total of 42 patients with human epidermal growth factor receptor 2 (HER2) negative breast cancer. An earlier Phase 1 clinical study evaluating ME-344 as a single-agent in patients with refractory solid tumors also demonstrated anti-tumor activity, further validating the potential of mitochondrial inhibition as a promising therapeutic modality.
Current wording
We obtained initial clinical data on this approach ina completed investigator-initiated, multi-center, randomized, controlled, window of opportunity clinical trial evaluating ME-344 in combination with bevacizumab that enrolled a total of 42 patients with human epidermal growth factor receptor 2 (HER2) negative breast cancer. Further clinical support for the combination of ME-344 in combination with bevacizumab was reported in April 2024 from a Phase 1b study of patients with relapsed metastatic colorectal cancer (“mCRC”) after failure of standard therapies. This study demonstrated clinical activity, including an effect on progression free survival in a cohort of 23 patients.
Previous wording
Pre-clinical studies, have shown that one outcome of anti-angiogenics is a reduced rate of glycolysis in tumors as a mechanism to slow tumor growth. However, when faced with reduced glycolysis and reduced ATP production, tumor metabolism was able to shift to mitochondrial metabolism for energy production to support continued tumor proliferation. In such cases of tumor plasticity in the presence of treatment with anti-angiogenics, contemporaneously targeting the mitochondria as an alternative metabolic source of ATP with ME-344 may open an important therapeutic opportunity.
Current wording
Pre-clinical studies, have shown that one outcome of anti-angiogenics is a reduced rate of glycolysis in tumors as a mechanism to slow tumor growth. However, when faced with reduced glycolysis and reduced ATP production, tumor metabolism was able to shift to mitochondrial metabolism for energy production to support continued tumor proliferation. In such cases of tumor plasticity in the presence of treatment with anti-angiogenics, contemporaneously targeting the mitochondria as an alternative metabolic source of ATP with ME-344 may open an important development opportunity.
Previous wording
Results published in the November 2019 issue of Clinical Cancer Research from a multi-center, investigator-initiated, randomized, controlled, clinical trial that evaluated the combination of ME-344 and bevacizumab in 42 women with early HER2-negative breast cancer further support the combinatorial use of ME-344 with anti-angiogenic therapeutics.
Current wording
Results published in the November 2019 issue of Clinical Cancer Research from a multi-center, investigator-initiated, randomized, controlled, clinical trial that evaluated the combination of ME-344 and bevacizumab in 42 women with early HER2-negative breast cancer provided evidence for the combinatorial use of ME-344 with anti-angiogenic therapeutics.
Previous wording
Results from our earlier, first-in-human, single-agent Phase 1 clinical trial of ME-344 in patients with refractory solid tumors were published in the April 1, 2015 edition of Cancer. The results indicated that eight of 21 evaluable patients (38%) treated with ME-344 achieved stable disease or better, including five who experienced progression-free survival that was at least twice the duration of their last prior treatment before entry into the trial. In addition, one of these patients, a heavily pre-treated patient with small cell lung cancer, achieved a confirmed partial response and remained on study for two years. ME-344 was generally well tolerated at doses equal to or less than 10 mg/kg delivered on a weekly schedule for extended durations. Treatment-related adverse events included nausea, dizziness and fatigue. Dose-limiting toxicities were observed at both the 15 mg/kg and 20 mg/kg dose levels, consisting primarily of grade 3 peripheral neuropathy.
Current wording
Results from an earlier, first-in-human, single-agent Phase 1 clinical trial of ME-344 in patients with refractory solid tumors were published in the April 1, 2015 edition of Cancer. The results indicated that eight of 21 evaluable patients (38%) treated with ME-344 achieved stable disease or better, including five who experienced progression-free survival that was at least twice the duration of their last prior treatment before entry into the trial. In addition, one of these patients, a heavily pre-treated patient with small cell lung cancer, achieved a confirmed partial response and remained on study for two years. ME-344 was generally well tolerated at doses equal to or less than 10 mg/kg delivered on a weekly schedule for extended durations. Treatment-related adverse events included nausea, dizziness and fatigue. Dose-limiting toxicities were observed at both the 15 mg/kg and 20 mg/kg dose levels, consisting primarily of grade 3 peripheral neuropathy.
Previous wording
On July 14, 2023, we entered into a Termination Agreement (the Termination Agreement) with KKC to terminate all agreements between the parties and cease further zandelisib clinical development globally. As of December 31, 2023, activities associated with the compassionate use supply were completed. We anticipate completing the wind-down activities associated with the KKC Commercialization Agreement in fiscal year 2024.
Current wording
On July 14, 2023, we entered into a Termination Agreement (the Termination Agreement) with KKC to terminate all agreements between the parties and cease further zandelisib clinical development globally. Activities associated with the compassionate use supply were completed during the first half of fiscal 2024. We anticipate completing the wind-down activities associated with the KKC Commercialization Agreement in fiscal year 2024.
Previous wording
As of June 30, 2023, we had $64.9 million of aggregate deferred revenue associated with the KKC Commercialization Agreement, of which $64.5 million was allocated to the U.S. License and $0.3 million was allocated to the Development Services performance obligations which were recognized based on the proportional performance of these development activities through wind-down of the associated trials. As further discussed in Note 7. License Agreements, in connection with the execution of the Termination
Current wording
As of June 30, 2023, we had $64.9 million of aggregate deferred revenue associated with the KKC Commercialization Agreement, of which $64.5 million was allocated to the U.S. License and $0.3 million was allocated to the Development Services performance obligations which were recognized based on the proportional performance of these development activities through wind-down of the associated trials. As further discussed in Note 7. License Agreements, in connection with the execution of the Termination Agreement during the three months ended September 30, 2023, we recognized the $64.5 million of noncash long-term deferred revenue associated with the U.S. License as well as the remaining $0.3 million noncash deferred revenue associated with the completion of the underlying proportional performance activities. As of September 30, 2023, all deferred revenue associated with the KKC Commercialization Agreement had been recognized.
Previous wording
Revenue: We recognized no revenue for the three months ended December 31, 2023 compared to $32.7 million for the three months ended December 31, 2022. The decrease in revenue was due to thetermination of the KKC Commercialization Agreement in July 2023 and all remaining deferred revenue having been recognized in the three months ended September 30, 2023.
Current wording
Revenue: We recognized no revenue for the three months ended March 31, 2024 compared to $5.9 million for the three months ended March 31, 2023. The decrease in revenue was due to thetermination of the KKC Commercialization Agreement in July 2023 and all remaining deferred revenue having been recognized during the three months ended September 30, 2023.
Previous wording
Research and development expenses consist primarily of clinical trial costs and includes payments to contract research organizations CROs, pre-clinical study costs, and costs to manufacture our drug candidates for non-clinical and clinical studies. Other research and development expenses consist primarily of salaries and personnel costs, share-based compensation, legal costs, and other costs not allocated to specific drug programs. Costs related to zandelisib decreased $8.3 million primarily due to the discontinuation of the program during fiscal year 2023. Costs related to voruciclib increased $0.1 million mainly due to increased clinical costs in the Phase 1 study. Costs related to ME-344 increased $1.3 million due to increased clinical and manufacturing costs related to the Phase 1b study. Other research and development costs decreased $4.5 million primarily due to a decrease of $4.0 million in personnel costs resulting from our reductions in workforce including a $0.7 million decrease in one-time employee termination benefits.
Current wording
Costs related to zandelisib decreased $7.7 million primarily due to the discontinuation of the program during fiscal year 2023. Costs related to voruciclib increased $0.7 million mainly due to increased clinical costs in the Phase 1 study. Costs related to ME-344 increased $1.6 million due to increased clinical costs related to the Phase 1b study and manufacturing costs of ME-344 to support clinical and non-clinical studies. Other research and development costs decreased $4.4 million primarily due to a decrease of $4.2 million in personnel costs resulting from our reductions in workforce including a $1.1 million decrease in one-time employee termination benefits.
Previous wording
General and Administrative: General and administrative expenses decreased by $0.5 million to $8.0 million for the three months ended December 31, 2023 compared to $8.5 million for the three months ended December 31, 2022. The decrease was primarily due to $1.3 million less personnel costs resulting from our reductions in workforce partially offset by a $0.8 million increase in legal fees primarily associated with the Cooperation Agreement.
Current wording
General and Administrative: General and administrative expenses decreased by $2.6 million to $4.6 million for the three months ended March 31, 2024 compared to $7.2 million for the three months ended March 31, 2023. The decrease was primarily due to $1.0 million less personnel costs resulting from our reductions in workforce, a $0.7 million decrease in legal fees and a $0.6 million decrease in external professional services.
Previous wording
Comparison of Six Months Ended December 31, 2023 and 2022
Current wording
Comparison of Nine Months Ended March 31, 2024 and 2023
Previous wording
Revenue: We recognized revenue of $65.3 million for the six months ended December 31, 2023 compared to $41.5 million for the six months ended December 31, 2022. The increase in revenue was primarily due to the recognition of all remaining deferred revenue associated withthe KKC Commercialization Agreement that was terminated in July 2023, offset by a decrease in revenue recognized during the six months ended December 31, 2023, related to cost sharing from the KKC Commercialization Agreement.
Current wording
Revenue: We recognized revenue of $65.3 million for the nine months ended March 31, 2024 compared to $47.4 million for the nine months ended March 31, 2023. The increase in revenue was primarily due to the recognition of all remaining deferred revenue associated withthe KKC Commercialization Agreement that was terminated in July 2023, offset by a decrease in revenue recognized during the nine months ended March 31, 2024, related to cost sharing from the KKC Commercialization Agreement.
Previous wording
Research and development expenses consist primarily of clinical trial costs and includes payments to contract research organizations CROs, pre-clinical study costs, and costs to manufacture our drug candidates for non-clinical and clinical studies. Other research and development expenses consist primarily of salaries and personnel costs, share-based compensation, legal costs, and other costs not allocated to specific drug programs. Costs related to zandelisib decreased $19.5 million primarily as a result of the discontinuation of the program during fiscal year 2023 with lower costs in fiscal year 2024 associated with wind-down activities. Costs related to voruciclib decreased $1.0 million mainly due to lower recognized clinical costs in the Phase 1 study. Costs related to ME-344 increased $1.8 million due to higher clinical and manufacturing costs related to the Phase 1b study. Other research and development costs decreased $8.7 million primarily due to a decrease of $7.4 million in personnel costs resulting from our reductions in workforce, including a $0.7 million decrease in one-time employee termination benefits and a $0.8 million decrease in noncash stock-based compensation.
Current wording
Costs related to zandelisib decreased $27.2 million primarily as a result of the discontinuation of the program during fiscal year 2023 with lower costs in fiscal year 2024 associated with wind-down activities. Costs related to voruciclib decreased $0.3 million mainly due to lower manufacturing costs. Costs related to ME-344 increased $3.3 million due to higher clinical costs related to the Phase 1b study and manufacturing costs of ME-344 to support clinical and non-clinical studies. Other research and development costs decreased $13.1 million primarily due to a decrease of $11.6 million in personnel costs resulting from our reductions in workforce, including a $1.7 million decrease in one-time employee termination benefits and a $1.0 million decrease in noncash stock-based compensation.
Previous wording
General and Administrative: General and administrative expenses decreased by $1.4 million to $14.5 million for the six months ended December 31, 2023 compared to $16.0 million for the six months ended December 31, 2022. The decrease was primarily due to $2.3 million less personnel costs resulting from our reductions in workforce, $0.4 million less noncash stock-based compensation, and $0.5 million less corporate overhead costs partially offset by a $1.7 million increase in legal fees primarily associated with the Cooperation Agreement.
Current wording
General and Administrative: General and administrative expenses decreased by $4.0 million to $19.2 million for the nine months ended March 31, 2024 compared to $23.2 million for the nine months ended March 31, 2023. The decrease was primarily due to $3.3 million less personnel costs resulting from our reductions in workforce, $0.7 million less external professional services, $0.6 million less corporate overhead costs and $0.4 million less noncash stock-based compensation partially offset by a $1.0 million increase in legal fees primarily associated with the Cooperation Agreement.
Previous wording
Other Income, net: Other income, net, decreased by approximately $1.0 million to $2.0 million for the six months ended December 31, 2023 compared to $2.9 million for the six months ended December 31, 2022. We recorded a noncash gain of $1.6 million during the six months ended December 31, 2022, due to a change in the fair value of our warrant liability with no similar gain during the six months ended December 31, 2023, because of the underlying warrants expiring in May 2023. Additionally, we received interest and dividend income of $2.0 million for the six months ended December 31, 2023 compared to $1.3 million for the six months ended December 31, 2022. The increase in interest and dividend income is primarily due to higher yields during the six months ended December 31, 2023 compared to the six months ended December 31, 2022.
Current wording
Other Income, net: Other income, net, decreased by approximately $1.2 million to $2.7 million for the nine months ended March 31, 2024 compared to $3.9 million for the nine months ended March 31, 2023. We recognized a noncash gain of $1.6 million during the nine months ended March 31, 2023, due to a change in the fair value of our warrant liability with no similar gain during the nine months ended March 31, 2024, because of the underlying warrants expiring in May 2023. Additionally, we received interest and dividend income of $2.7 million for the nine months ended March 31, 2024 compared to $2.3 million for the nine months ended March 31, 2023. The increase in interest and dividend income is primarily due to higher yields during the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023.
Previous wording
We have accumulated losses of $360.7 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of December 31, 2023, we had $59.5 million in cash and cash equivalents, and short-term investments. We believe that these resources will be sufficient to fund our operations for at least 12 months from the issuance of this Quarterly Report. Our current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operations and operating expenses may affect actual future use of existing cash resources. We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials.
Current wording
We have accumulated losses of $369.8 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of March 31, 2024, we had $56.6 million in cash and cash equivalents, and short-term investments. We believe that these resources will be sufficient to fund our operations for at least 12 months from the issuance of this Quarterly Report. Our current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operations and operating expenses may affect actual future use of existing cash resources. We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials.
Previous wording
Net cash used in operating activities for the six months ended December 31, 2023 of $29.5 million consisted of our net income of $45.3 million and $2.1 million for noncash items offset by $77.0 million in changes in our operating assets and liabilities primarily due to recognition of $64.9 million in noncash deferred revenue. Net cash used in operating activities for the six months ended December 31, 2022 of $29.1 million consisted of our net loss of $6.4 million and changes in our operating assets and liabilities of $24.3 million partially offset by $1.7 million in noncash items.
Current wording
Net cash used in operating activities for the nine months ended March 31, 2024 of $32.5 million consisted of our net income of $36.2 million and $3.3 million for noncash items offset by $71.9 million in changes in our operating assets and liabilities primarily due to recognition of $64.9 million in noncash deferred revenue. Net cash used in operating activities for the nine months ended March 31, 2023 of $41.2 million consisted of our net loss of $21.8 million and changes in our operating assets and liabilities of $22.9 million partially offset by $3.5 million in noncash items.
Previous wording
Net cash provided by investing activities for the six months ended December 31, 2023 was $29.5 million as compared to $24.3 million cash provided by investing activities for the six months ended December 31, 2022. The increase was primarily due to timing differences between the purchases of and maturities of short-term investments during the six months ended December 31, 2023 against the comparative period.
Current wording
Net cash provided by investing activities for the nine months ended March 31, 2024 was $29.6 million as compared to $34.3 million cash provided by investing activities for the nine months ended March 31, 2023. The increase was primarily due to timing differences between the purchases of and maturities of short-term investments during the nine months ended March 31, 2024 against the comparative period.
Previous wording
Net cash used in financing activities during the six months ended December 31, 2023 was $11.7 million due to the payment of dividends agreed to under the Cooperation Agreement. Net cash used in financing activities during the six months ended December 31, 2022 was $40,000 due to the payment of withholding taxes upon the vesting of restricted stock units (RSU) in exchange for common shares surrendered by RSU holders.
Current wording
Net cash used in financing activities during the nine months ended March 31, 2024 was $11.7 million due to the payment of dividends agreed to under the Cooperation Agreement. Net cash used in financing activities during the nine months ended March 31, 2023 was $40,000 due to the payment of withholding taxes upon the vesting of restricted stock units (RSU) in exchange for common shares surrendered by RSU holders.
Previous wording
In January 2022, we amended our facility lease for an additional 20 months through November 2029. The amended lease agreement also provided for additional lease space that we took control over on July 1, 2022. Under the terms of the lease, we are obligated to make aggregate remaining lease payments as of December 31, 2023 of $15.2 million, excluding common area maintenance and other variable consideration due under the lease agreement. Estimated lease payments for the remainder of our fiscal year ended June 30, 2024 are expected to be $1.2 million, excluding common area maintenance and other variable consideration due under the lease agreement.
Current wording
In January 2022, we amended our facility lease for an additional 20 months through November 2029. The amended lease agreement also provided for additional lease space that we took control over on July 1, 2022. Under the terms of the lease, we are obligated to make aggregate remaining lease payments as of March 31, 2024 of $14.6 million, excluding common area maintenance and other variable consideration due under the lease agreement. Estimated lease payments for the remainder of our fiscal year ended June 30, 2024 are expected to be $0.6 million, excluding common area maintenance and other variable consideration due under the lease agreement.
Previous wording
Due to recent disruptions in access to bank deposits and lending commitments associated with bank failures, macroeconomic and geopolitical conditions, there has been uncertainty and disruption in the global economy and financial markets. We are not aware of any specific event or circumstance that would require an update to our estimates or judgments or a revision of the carrying value of its assets or liabilities as of December 31, 2023. While there was no material impact to our condensed consolidated financial statements as of and for the three and six months ended December 31, 2023, these estimates may change, as new events occur and additional information is obtained, which could materially impact our condensed consolidated financial statements in future reporting periods.
Current wording
Due to recent disruptions in access to bank deposits and lending commitments associated with bank failures, macroeconomic and geopolitical conditions, there has been uncertainty and disruption in the global economy and financial markets. We are not aware of any specific event or circumstance that would require an update to our estimates or judgments or a revision of the carrying value of its assets or liabilities as of March 31, 2024. While there was no material impact to our condensed consolidated financial statements as of and for the three and nine months ended March 31, 2024, these estimates may change, as new events occur and additional information is obtained, which could materially impact our condensed consolidated financial statements in future reporting periods.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
An earlier Phase 1 clinical study evaluating ME-344 as a single-agent in patients with refractory solid tumors also demonstrated anti-tumor activity, further validating the potential of mitochondrial inhibition as a promising therapeutic modality.
Current report — wording carried from elsewhere
Research and development expenses consist primarily of clinical trial costs and includes payments to contract research organizations (CROs), pre-clinical study costs, and costs to manufacture our drug candidates for non-clinical and clinical studies. Other research and development expenses consist primarily of salaries and personnel costs, share-based compensation, and other costs not allocated to specific drug programs.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
(range 1-9), and five patients had prior hematopoietic stem cell transplant. Voruciclib at doses up to 200 mg administered on 14 consecutive days in a 28-day cycle (Cohort 2) was well tolerated with no dose limiting toxicities (DLT) reported. The most common adverse events (≥20% of patients) were diarrhea, nausea, anemia and fatigue. The large majority of adverse events were Grade 1-2; of note, the only Grade 3-4 adverse events in Cohort 2 were diarrhea (n=1) and anemia (n=5). Pharmacokinetics were dose proportional and a mean half-life of approximately 24 hours supports once daily dosing.
Previous report — wording carried elsewhere
Agreement during the three months ended September 30, 2023, we recognized the $64.5 million of noncash long-term deferred revenue associated with the U.S. License as well as the remaining $0.3 million noncash deferred revenue associated with the completion of the underlying proportional performance activities. As of September 30, 2023, all deferred revenue associated with the KKC Commercialization Agreement had been recognized.
Previous report — wording carried elsewhere
Other Income, net: Other income, net, decreased by $0.5 million to $0.9 million for the three months ended December 31, 2023 compared to $1.3 million for the three months ended December 31, 2022. We recorded a noncash gain of $0.5 million during the three months ended December 31, 2022, due to a change in the fair value of our warrant liability with no similar gain during the three months ended December 31, 2023, because of the underlying warrants expiring in May 2023.