MEI Pharma Reports Fiscal Year 2019 Results and Operational Highlights

SAN DIEGO, Aug. 28, 2019 /PRNewswire/ -- MEI Pharma, Inc. (NASDAQ: MEIP), a late-stage pharmaceutical company focused on advancing new therapies for cancer, today reported results for its fiscal year ended June 30, 2019.

"It was a very productive year, with each of the four clinical-stage programs within our oncology portfolio advancing in development, led by ME-401 and the initiation of our global Phase 2 study which may support an accelerated approval of a marketing application with FDA, the BeiGene clinical collaboration to combine ME-401 with zanubrutinib, BeiGene's BTK inhibitor, and a regional licensing deal with Kyowa Kirin for the development and commercialization of ME-401 in Japan," said Daniel P. Gold, Ph.D., president and chief executive officer of MEI Pharma. "We were also pleased to report the progress made from all our programs as featured at key medical meetings including ICML 2019, ASCO 2019 and ASH 2018."

Dr. Gold continued: "Looking to the year ahead, we are in a great position to continue strengthening our foundation and creating value through data generation across our development pipeline, evaluating drug combination opportunities, unlocking innovations like the intermittent schedule for ME-401, and exploring additional collaboration and licensing opportunities to most effectively leverage the potential of our drug candidates."

Fiscal Year 2019 and Recent Highlights

ME-401 for B-Cell Malignancies

    --  In October 2018, MEI (the Company) entered into a clinical collaboration
        to evaluate in patients with B-cell malignancies the safety and efficacy
        of ME-401 in combination with BeiGene's zanubrutinib, an investigational
        Bruton's tyrosine kinase ("BTK") inhibitor
    --  In October 2018, MEI entered into a license, development and
        commercialization agreement granting Kyowa Kirin Company exclusive
        rights to develop and commercialize ME-401 in Japan. MEI received a
        $10.0 million upfront payment and is eligible to receive up to $87.5
        million in additional development and commercialization milestones, and
        royalties on sales.
    --  In December 2018, the Company initiated the ongoing Phase 2 clinical
        trial evaluating ME-401 in patients with relapsed or refractory
        follicular lymphoma which may support an accelerated approval of a
        marketing application with FDA.
    --  In December 2018, at the American Society of Hematology (ASH) Annual
        Meeting, the Company presented interim results from the ongoing Phase 1b
        study demonstrating that ME-401 continues to be associated with overall
        high objective response rates as a single agent and in combination with
        rituximab. Lower rates of Grade 3 adverse events of special interest
        were observed in patients on the intermittent dosing schedule.
    --  In June 2019, at the American Society of Clinical Oncology (ASCO) Annual
        Meeting and the International Conference on Malignant Lymphoma (ICML),
        the Company presented updated data from the ongoing ME-401 Phase 1b
        study demonstrating an 80% overall response rate in patients with
        relapsed or refractory follicular lymphoma and an 83% overall response
        rate in patients with relapsed or refractory follicular lymphoma,
        chronic lymphocytic leukemia or small lymphocytic lymphoma.  The
        intermittent dosing schedule demonstrated comparable overall response
        rates with a lower rate of delayed Grade 3 adverse events of special
        interest (<=10%) compared to the continuous dosing schedule.

Voruciclib for B-Cell Malignancies and Acute Myeloid Leukemia ("AML")

    --  In December 2018 at ASH, the Company presented preclinical data
        demonstrating that voruciclib synergistically induced apoptosis at
        clinically relevant concentrations when combined with venetoclax
        (marketed as Venclexta®) in human derived AML cells lines and patient
        samples.

ME-344 for Solid Tumors

    --  In June 2019 at ASCO, the Company presented the data from an
        investigator-initiated study of ME-344 in combination with bevacizumab
        (marketed as Avastin®) in patients with early HER2-negative breast
        cancer. The data demonstrated proof of biologic anti-tumor activity as
        measured by a statistically significant reduction in Ki67, a measure of
        cell proliferation that is highly correlated with tumor response, in
        patients treated with ME-344 compared to an increase in the group
        receiving saline.

Pracinostat for Myelodysplastic Syndrome ("MDS")

    --  In December 2018 at ASH, the Company and Helsinn Healthcare presented
        interim results from the ongoing Phase 2 study evaluating pracinostat in
        combination with azacitidine for the treatment of patients with IPSS-R
        high/very high-risk of MDS. The data demonstrate a 9% discontinuation
        rate due to adverse events, a substantially lower rate than observed in
        an earlier Phase 2 study, as well as an encouraging 36% complete
        response rate among patients receiving at least 6 cycles of treatment.
    --  In February 2019, the Company and Helsinn Healthcare published data in
        the medical journal, Blood Advances, from a Phase 2 study evaluating the
        safety and efficacy of pracinostat in combination with azacitidine for
        the treatment of patients suffering from AML who cannot undergo
        treatment with intensive chemotherapy. The full article can be found
        here.

Corporate Highlights

    --  In July 2018, the Company announced that David M. Urso, J.D., senior
        vice president of corporate development and general counsel, was
        promoted to chief operating officer. Mr. Urso continues as the Company's
        general counsel and head of corporate development.
    --  In July 2019, Tamar Howson, M.S., MBA a highly experienced business
        development executive with over 30 years of service in the
        pharmaceutical and biotechnology industry joined the Board of Directors.

Fiscal Year 2019 Financial Results

    --  As of June 30, 2019, MEI had $79.8 million in cash, cash equivalents,
        short-term investments, and common stock proceeds receivable, with no
        outstanding debt.
    --  For the year ended June 30, 2019, cash used in operations was $39.4
        million, compared to $21.0 million for 2018
    --  Research and development expenses were $32.3 million for the year ended
        June 30, 2019, compared to $17.0 million for 2018. The increase was
        primarily related to increased activities in all clinical programs
        including development costs associated with ME-401 and voruciclib.
    --  General and administrative expenses were $14.6 million for the year
        ended June 30, 2019, compared to $9.8 million for 2018. The increase
        primarily relates to professional services expenses, share-based
        compensation, and general corporate expenses incurred during the year
        ended June 30, 2019.
    --  MEI recognized revenues of $4.9 million for the year ended June 30,
        2019, compared to $1.6 million for the year ended June 30, 2018.
        Revenues resulted from the recognition of fees allocated to research and
        development activities related to the Helsinn and Kyowa Kirin license
        agreements. Revenue increased due to higher levels of research and
        development activities during the year ended June 30, 2019.
    --  Net loss was $16.8 million, or $0.24 per share, for the fiscal year
        ended June 30, 2019, compared to net loss of $40.1 million, or $0.97 per
        share for 2018. The Company had 73,544,576 shares of common stock
        outstanding as of June 30, 2019, compared with 70,406,283 shares as of
        June 30, 2018.
    --  The adjusted net loss for the fiscal year ended June 30, 2019, excluding
        non-cash expenses related to changes in the fair value of the warrants
        issued in connection with the May 2018 financing (a non-GAAP measure),
        was $44.5 million.

Conference Call and Webcast

MEI Pharma will host a conference call with simultaneous webcast today, August 28, 2019, at 5:00 p.m. Eastern time to provide a corporate update. To access the live call, please dial (866) 939-3921 (United States) or (678) 302-3550 (International), conference ID 48926540. The conference call will also be webcast live and can be accessed at www.meipharma.com. A replay of the webcast will be available approximately one hour after the conclusion of the call.

About MEI Pharma

MEI Pharma, Inc. (Nasdaq: MEIP) is a late-stage pharmaceutical company focused on developing potential new therapies for cancer. Our portfolio of drug candidates contains four clinical-stage assets, including one candidate in an ongoing global registration trial and another candidate in a Phase 2 clinical trial which may support an accelerated approval marketing application with the U.S. Food and Drug Administration. Each of our pipeline candidates leverages a different mechanism of action with the objective of developing therapeutic options that are: (1) differentiated, (2) address unmet medical needs and (3) deliver improved benefit to patients either as standalone treatments or in combination with other therapeutic options. For more information, please visit www.meipharma.com.

Under U.S. law, a new drug cannot be marketed until it has been investigated in clinical studies and approved by the FDA as being safe and effective for the intended use. Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize our product candidates; costs and delays in the development and/or FDA approval, or the failure to obtain such approval, of our product candidates; uncertainties or differences in interpretation in clinical trial results; our inability to maintain or enter into, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of any products; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of any products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events. We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward-looking statements.


               
            
              MEI PHARMA, INC.


                
            
              BALANCE SHEETS


      
         
              (In thousands, except per share amounts)




                                                                June 30,



                                                      2019                     2018

                                                                               ---



                  
            
              ASSETS



       Current assets:


        Cash and cash equivalents                   $9,590                  $13,309


        Short term investments                      64,899                   89,434

                                                                               ---

        Total cash, cash equivalents
         and short-term investments                 74,489                  102,743


        Common stock proceeds
         receivable                                  5,274


        Prepaid expenses and other
         current assets                              2,435                    1,586



       Total current assets                        82,198                  104,329


        Intangible assets, net                         261                      296


        Property and equipment, net                    204                       32



       Total assets                               $82,663                 $104,657





      
         
              LIABILITIES AND STOCKHOLDERS' EQUITY



       Current liabilities:



       Accounts payable                            $4,787                   $3,643



       Accrued liabilities                          4,559                    3,454



       Deferred revenue                             4,955                      788


        Total current liabilities                   14,301                    7,885


        Deferred revenue, long-term                  2,819



       Warrant liability                           17,613                   46,313

                                                                               ---


       Total liabilities                           34,733                   54,198

                                                                               ---




       Stockholders' equity:


        Preferred stock, $0.01 par
         value; 100 shares authorized;
         none outstanding                                                        -


        Common stock, $0.00000002 par
         value; 226,000 shares
         authorized; 73,545 and 70,406
         shares issued and outstanding
         at June 30, 2019 and 2018,
         respectively                                                            -


        Additional paid-in-capital                 279,148                  264,858



       Accumulated deficit                      (231,218)               (214,399)


        Total stockholders' equity                  47,930                   50,459

                                                                               ---

        Total liabilities and
         stockholders' equity                      $82,663                 $104,657


                            
              
                MEI PHARMA, INC.


                        
              
                STATEMENTS OF OPERATIONS


                
              
                (In thousands, except per share amounts)




                                                                                 Years Ended June 30,



                                                                      2019               2018             2017

                                                                                                         ---




     Revenue                                                       $4,915             $1,622          $23,249






     Operating expenses:


      Cost of revenue                                                4,263              3,383            5,000


      Research and development                                      32,300             17,038            7,237


      General and
       administrative                                               14,597              9,787            8,628


      Total operating expenses                                      51,160             30,208           20,865

                                                                                                         ---



      (Loss) income from
       operations                                                 (46,245)          (28,586)           2,384





     Other income (expense):


      Change in fair value of
       warrant liability                                            27,632            (9,705)


      Financing costs
       associated with
       warrants                                                                      (2,367)               -


      Interest and dividend
       income                                                        1,795                591              287


      Income tax expense                                               (1)               (1)             (1)


      Net (loss) income                                          $(16,819)         $(40,068)          $2,670

                                                                                                         ===




     Net (loss) income:



     Basic                                                      $(16,819)         $(40,068)          $2,670

                                                                                                         ===


     Diluted                                                    $(54,613)         $(40,068)          $2,670

                                                                                                         ===


     Net (loss) income per share:



     Basic                                                        $(0.24)           $(0.97)           $0.07




     Diluted                                                      $(0.75)           $(0.97)           $0.07



      Shares used in computing net (loss) income per share:



     Basic                                                         71,139             41,431           36,813

                                                                                                         ===


     Diluted                                                       72,385             41,431           36,938

                                                                                                         ===


            
              
                MEI PHARMA, INC.



     
                Reconciliation of GAAP Net Loss to Adjusted Net Loss


             
              
                (In thousands)




                                                Years Ended June 30,



                               2019                       2018              2017

                                                                           ---



      Net (loss)
       income             $(16,819)                 $(40,068)           $2,670


      Add: Change in
       fair value of
       warrant
       liability           (27,632)                     9,705

                                                                           ---

      Adjusted net
       (loss) income      $(44,451)                 $(30,363)           $2,670

                                                                           ===

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SOURCE MEI Pharma, Inc.