Leap Therapeutics Reports Third Quarter 2018 Business Update and Financial Results

CAMBRIDGE, Mass., Nov. 9, 2018 /PRNewswire/ -- Leap Therapeutics, Inc. (Nasdaq: LPTX), a biotechnology company developing targeted and immuno-oncology therapeutics, today reported a business update and financial results for the third quarter ended September 30, 2018.

"Our team has executed extremely well over the past quarter, rapidly enrolling multiple clinical trials and presenting impressive clinical and preclinical data for both of our programs. We are excited about the potential for our DKN-01 antibody in patients with esophagogastric cancer, both in combination with KEYTRUDA® (pembrolizumab) and with paclitaxel. We believe that the emerging response and disease control rates, and now the progression-free survival and overall survival data, reflect outcomes that are clinically meaningful to patients with very difficult to treat cancer and are greater than what has previously been demonstrated with approved single agents," commented Christopher K. Mirabelli, Ph.D, President and Chief Executive Officer of Leap Therapeutics. "In addition, we look forward to presenting data from the studies of our TRX518 antibody in combination with KEYTRUDA, OPDIVO® (nivolumab) or gemcitabine at the European Society for Molecular Oncology 2018 Immuno-Oncology Congress in December."

Recent Developments

Since the end of the second quarter, the Company has continued to make strong progress with the development of their product candidates.

    --  DKN-01/KEYTRUDA: At the European Society for Molecular Oncology (ESMO)
        2018 Annual Congress, Leap presented clinical data from a study
        evaluating DKN-01 in combination with KEYTRUDA® (pembrolizumab) in
        patients with advanced esophagogastric cancer. As of the cut-off date
        for the poster, DKN-01 and pembrolizumab had a 23.5% overall response
        rate and 58.8% disease control rate in evaluable gastric or
        gastroesophageal junction cancer patients who have been heavily
        pre-treated and not received any prior anti-PD-1/PD-L1 therapy. All four
        of the responding patients had tumors that were microsatellite stable,
        which is a subgroup of patients who have historically experienced a less
        than ten percent response rate to KEYTRUDA monotherapy.

    --  DKN-01/PACLITAXEL: At the Society for Immunotherapy of Cancer 33rd
        Annual Meeting, Leap presented an update on a clinical study evaluating
        DKN-01 in combination with paclitaxel in patients with advanced
        esophagogastric cancer. The combination of DKN-01 and paclitaxel
        generated a 46.7% overall response rate, 19.6 weeks median progression
        free survival, and 61.1 weeks median overall survival in fifteen
        evaluable patients as a second line therapy. In the benchmark RAINBOW
        study, paclitaxel monotherapy in second line gastroesophageal junction
        or gastric cancer patients generated a 16.1% overall response rate, 2.9
        months median progression free survival, and 7.4 months median overall
        survival. Additionally, in our study in the subgroup of twelve evaluable
        patients with heavily pre-treated esophageal squamous cell carcinoma,
        the combination of DKN-01 and paclitaxel produced a 33.3% overall
        response rate, 13.7 weeks median progression free survival, and 31.0
        weeks median overall survival.

    --  DKN-01 in HCC: The first patient has been enrolled in Leap's
        investigator-initiated study of DKN-01 as a monotherapy and in
        combination with NEXAVAR® (sorafenib) in hepatocellular carcinoma
        patients with Wnt pathway activation.

    --  TRX518/BAVENCIO: In July, Leap announced a collaboration agreement with
        Pfizer and Merck KGaA, Darmstadt, Germany to evaluate TRX518 in
        combination with BAVENCIO® (avelumab) and cyclophosphamide
        chemotherapy. Under the terms of the collaboration, Leap will be
        conducting a Phase I/II clinical trial in advanced solid tumors
        including expansion populations in patients with relapsed/refractory
        ovarian, breast, and prostate cancers.
    --  TRX518/KEYTRUDA or OPDIVO or GEMCITABINE: During the third quarter, Leap
        presented initial data from a clinical trial evaluating TRX518 in
        combination with gemcitabine chemotherapy or in combination with
        KEYTRUDA® (pembrolizumab) or OPDIVO® (nivolumab). Three patients
        treated with TRX518 in combination with anti-PD1 antibodies have
        experienced clinical benefit. An esophageal squamous cell carcinoma
        patient treated with TRX518 and KEYTRUDA demonstrated a partial response
        with a 77% reduction in tumor volume, and an ocular melanoma patient
        experienced stable disease with a 23% reduction in tumor volume. An
        urothelial carcinoma patient who had progressed while on KEYTRUDA has
        had a partial response with TRX518 and OPDIVO with a 39% reduction in
        tumor volume. We have also fully enrolled the TRX518 and gemcitabine
        expansion cohort. We plan to present additional data from this trial at
        the ESMO Immuno-Oncology Congress in December 2018.

Selected Third Quarter 2018 Financial Results

Net loss was $6.6 million for the third quarter of 2018, compared to $6.8 million for the same period in 2017.

Research and development expenses were $6.5 million for the third quarter 2018, compared to $6.8 million for the same period in 2017. The decrease of $0.3 million was primarily due to a decrease of $1.3 million in manufacturing costs related to clinical trial material. This decrease was partially offset by an increase of $0.7 million in clinical trial costs, an increase of $0.2 million in payroll and other related costs and an increase of $0.1 million in stock based compensation expense.

General and administrative expenses were $2.1 million for the third quarter 2018, compared to $1.8 million for the same period in 2017. The increase of $0.3 million in general and administrative expenses was primarily due to a $0.2 million increase in stock based compensation expense and an increase of $0.1 million in legal, audit and consulting fees associated with corporate and business development activities.

Cash, cash equivalents and marketable securities totaled $23.2 million at September 30, 2018. Research and development incentive receivables totaled $2.1 million. In October 2018, we received $0.8 million of research and development tax incentive payments from the Commonwealth of Australia. We anticipate that our current cash resources will extend until late in the third quarter of 2019.

About Leap Therapeutics
Leap Therapeutics (NASDAQ:LPTX) is focused on developing targeted and immuno-oncology therapeutics. Leap's most advanced clinical candidate, DKN-01, is a humanized monoclonal antibody targeting the Dickkopf-1 (DKK1) protein, a Wnt pathway modulator. DKN-01 is in clinical trials in patients with esophagogastric cancer, hepatobiliary cancer, and gynecologic cancer. Leap's second clinical candidate, TRX518, is a humanized GITR agonist monoclonal antibody designed to enhance the immune system's anti-tumor response that is in advanced solid tumor studies. For more information about Leap Therapeutics, visit http://www.leaptx.com or our public filings with the SEC that are available via EDGAR at http://www.sec.gov.


This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These statements include statements relating to Leap's expectations with respect to the development and advancement of DKN-01, TRX518, and other programs, including the initiation, timing and design of future studies, enrollment in future studies, business development, and other future expectations, plans and prospects. Leap has attempted to identify forward looking statements by such terminology as ''believes,'' ''estimates,'' ''anticipates,'' ''expects,'' ''plans,'' ''projects,'' ''intends,'' ''may,'' ''could,'' ''might,'' ''will,'' ''should,'' or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Although Leap believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. These risks and uncertainties include, but are not limited to: our ability to operate as a going concern; the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for financing; the ability to complete a financing or form business development relationships to fund our expenses; the outcome, cost, and timing of our product development activities and clinical trials; the uncertain clinical development process, including the risk that clinical trials may not have an effective design or generate positive results; our ability to obtain and maintain regulatory approval of our drug product candidates; our plans to research, develop, and commercialize our drug product candidates; our ability to achieve market acceptance of our drug product candidates; unanticipated costs or delays in research, development, and commercialization efforts; the applicability of clinical study results to actual outcomes; the size and growth potential of the markets for our drug product candidates; our ability to continue obtaining and maintaining intellectual property protection for our drug product candidates; and other risks. Detailed information regarding factors that may cause actual results to differ materially will be included in Leap Therapeutics' periodic filings with the Securities and Exchange Commission (the "SEC"), including Leap Therapeutics' Form 10-K that Leap filed with the SEC on February 23, 2018. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors. Any forward looking statements contained in this release speak only as of its date. We undertake no obligation to update any forward-looking statements contained in this release to reflect events or circumstances occurring after its date or to reflect the occurrence of unanticipated events.

KEYTRUDA® is a registered trademark of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc. OPDIVO® is a registered trademark of Bristol-Myers Squibb Company. BAVENCIO® is a registered trademark of Pfizer, Inc. NEXAVAR® is a registered trademark of Bayer Healthcare Pharmaceuticals, Inc.


Leap Therapeutics, Inc.:
Douglas E. Onsi
Chief Financial Officer

Argot Partners:
Heather Savelle
Mary Jenkins

              Leap Therapeutics, Inc.

         Condensed Consolidated Statements of Operations

         (in thousands, except share and per share amounts)


                                                                                                            Three Months Ended September 30                Nine Months Ended September 30

                                                                                                                                       2018                                           2017                             2018                       2017

     Operating expenses:

            Research and development            $6,457                                                   $6,802                                        $14,922                          $18,087

            General and administrative   2,142                 1,780                                                       6,858                                         7,719

                                      Total operating expenses   8,599                 8,582                                                      21,780                                        25,806

     Loss from operations                                                                                                   (8,599)                                       (8,582)                        (21,780)                    (25,806)

     Interest income                                                                                                            128                                             40                              327                          130

     Interest expense                                                                                                           (4)                                          (21)                            (18)                        (12)

     Interest expense - related party                                                                                                                                                                                                   (121)

     Australian research and development incentives                                                                             299                                            961                            1,188                        1,852

     Foreign currency gains (loss)                                                                                            (249)                                           787                            (615)                         823

     Change in fair value of warrant liability                                                                                1,793                                                                        (3,720)

     Net loss                                                                                                               (6,632)                                       (6,815)                        (24,618)                    (23,134)

     Accretion of preferred stock to redemption value                                                                                                                                                                                   (244)

     Net loss attributable to common stockholders                                                                          $(6,632)                                      $(6,815)                       $(24,618)                   $(23,378)

     Net loss per share

            Basic                                         $(0.45)                                                    $(0.73)                                      $(1.76)                          $(2.72)

            Diluted                                       $(0.55)                                                    $(0.73)                                      $(1.76)                          $(2.72)

     Weighted average common shares outstanding

            Basic                              14,701,785                                                9,395,920                                     13,955,949                        8,584,558

            Diluted                            15,211,716                                                9,395,920                                     13,955,949                        8,584,558

                Leap Therapeutics, Inc.

            Condensed Consolidated Balance Sheets

         (in thousands, except share and per share amounts)

      September 30,  
     December 31,

                                                                                                                                                                                                                           2018              2017



     Current assets:

              Cash and cash equivalents                                                                                            $23,249               $25,737

              Research and development incentive receivable                                                                            937                 1,744

              Prepaid expenses and other current assets                                                                                191                   177

              Total current assets                                                                                                  24,377                27,658

              Property and equipment, net                                                                                               98                   135

              Research and development incentive receivable, net of current portion                                                             1,131                -

              Deferred tax asset                                                                                                       147                   158

              Other assets                                                                                                           1,373                 1,111

              Total assets                                                                                                         $27,126               $29,062

                Liabilities and Stockholders' Equity

     Current liabilities:

              Accounts payable                                                                                                      $4,149                $2,622

              Accrued expenses                                                                                                       1,897                 3,461

              Total current liabilities                                                                                              6,046                 6,083

     Non Current liabilities:

              Warrant liability                                                                                                     14,452                11,862

              Total liabilities                                                                                                     20,498                17,945

     Stockholders' equity:

                                                     Common stock, $0.001 par value; 100,000,000 shares authorized; 14,703,159 and
                                                      12,354,014                                                                                                                15                    12
                                             shares issued and outstanding as of September 30, 2018 and December 31, 2017,

              Additional paid-in capital                                                                                           161,468               141,770

              Accumulated other comprehensive income (loss)                                                                            160                 (268)

              Accumulated deficit                                                                                                (155,015)            (130,397)

              Total stockholders' equity                                                                                             6,628                11,117

              Total liabilities and stockholders' equity                                                                           $27,126               $29,062

                Leap Therapeutics, Inc.

         Condensed Consolidated Statements of Cash Flows

                (in thousands)

                                                                                                                                         Nine Months Ended September 30,

                                                                                                                                                                    2018            2017


                 Cash used in operating activities                                                                                                   $(18,983)        $(15,768)

                 Cash used in investing activities                                                                                                                         (64)

                 Cash provided by financing activities                                                                                                  15,946            29,868

                 Effect of exchange rate changes on cash and cash equivalents                                                                              549             (626)

                 Net increase (decrease) in cash and cash equivalents                                                                                  (2,488)           13,410

      Cash and cash equivalents at beginning of period                                                                                                    25,737               793

      Cash and cash equivalents at end of period                                                                                                         $23,249           $14,203

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SOURCE Leap Therapeutics, Inc.