Leap Therapeutics Reports Third Quarter 2019 Financial Results

CAMBRIDGE, Mass., Nov. 14, 2019 /PRNewswire/ -- Leap Therapeutics, Inc. (NASDAQ:LPTX) today reported financial results for the third quarter ended September 30, 2019.

"The body of clinical data we presented in the third quarter for both DKN-01 monotherapy and combination treatment for cancer patients continues to demonstrate impressive activity. Patients with advanced gastroesophageal junction and gastric cancer whose tumors expressed high levels of DKK1 (DKK1-high) achieved higher survival and objective response outcomes to the combination of DKN-01 and KEYTRUDA," commented Christopher K. Mirabelli, Ph.D., President and Chief Executive Officer of Leap. "DKN-01 also showed durable benefit in patients with endometrial cancer with Wnt pathway alterations, including a monotherapy complete response, highlighting the potential utility of DKN-01 for biomarker-targeted patient populations."

Dr. Mirabelli continued: "We also completed enrollment in the dose escalation phase of our clinical trial evaluating TRX518 in combination with BAVENCIO and cyclophosphamide; however, we've made the strategic decision to deprioritize further development of TRX518 at this time in order to focus our resources on our more advanced DKN-01 program. The safety profile observed to date was acceptable, and patients who are benefiting from treatment in the TRX518 program will continue to be treated."

DKN-01 Development Program Update

    --  DKN-01 in ESOPHAGOGASTRIC CANCER: Leap presented data from the
        KEYNOTE-731 clinical study evaluating DKN-01 in combination with
        KEYTRUDA® (pembrolizumab) in patients with advanced esophagogastric
        cancer. Study results demonstrated that patients with DKK1-high status
        had improved outcomes, including longer progression free survival (PFS)
        independent of PD-L1 Combined Positive Scores (CPS). In ten evaluable
        gastroesophageal junction and gastric cancer patients who had not
        received prior PD-1/PD-L1 therapy, DKK1-high patients experienced 22.1
        weeks median progression free survival (PFS) and 31.6 weeks median
        overall survival (OS), with a 50% overall response rate (ORR) and 80%
        disease control rate (DCR). Fifteen evaluable DKK1-low patients
        experienced 5.9 weeks PFS and 17.4 weeks OS, with a 20% DCR. PD-L1 CPS
        did not predict efficacy to the combination of DKN-01 plus KEYTRUDA.
    --  DKN-01 in GYNECOLOGICAL CANCERS: The Company presented data from the
        ongoing clinical study of DKN-01 as a monotherapy and in combination
        with paclitaxel in patients with advanced gynecological cancers at the
        International Gynecologic Cancer Society Annual Global Meeting held in
        September. In the cohort of sixteen evaluable monotherapy patients with
        epithelial endometrial cancer (EEC) with identified Wnt signaling
        mutations, patients had higher response rates and demonstrated longer
        PFS as compared to patients without Wnt signaling mutations.
        Specifically, one patient had a complete response and one patient had a
        partial response, representing a 12.5% single agent ORR, seven patients
        had a best response of stable disease, and seven patients had
        progressive disease.  In the six evaluable monotherapy EEC patients who
        did not have any identified Wnt signaling mutations, none had clinical
        benefit. Patient follow-up is continuing in this study, which has been
        expanded to include focused cohorts of patients with carcinosarcoma.
    --  DKN-01 plus OPDIVO in BILIARY TRACT CANCER: The first patients have been
        dosed in an investigator-initiated clinical study to evaluate DKN-01 in
        combination with Bristol-Myers Squibb's OPDIVO® (nivolumab) in
        previously treated patients with advanced biliary tract cancer. The
        study is being conducted by Massachusetts General Hospital and will
        enroll up to 36 biliary tract cancer patients who have progressed after
        one or more lines of systemic therapy for advanced biliary tract cancer.
        The primary endpoint of the study will be ORR, to be assessed in the
        overall population as well as in subgroups stratified by tumor DKK1 and
        PD-L1 expression. Bristol-Myers Squibb is providing OPDIVO drug supply
        and partial funding for the study, with Leap providing DKN-01 drug
        supply as well as additional partial funding.

TRX518 Development Program Update

        enrollment in dose escalation phase of the clinical trial evaluating
        TRX518 in combination with cyclophosphamide chemotherapy and BAVENCIO®
        (avelumab).  However, instead of pursuing additional enrollment through
        the expansion cohorts in this study as initially planned, the Company
        has decided to reprioritize resources on the further development of the
        DKN-01 program. There were no safety or efficacy concerns leading to
        this decision, and patients who are benefitting from the combination
        therapy will continue to be treated in the study.

Selected Third Quarter 2019 Financial Results

Net loss was $7.9 million for the third quarter 2019, compared to $6.6 million for the same period in 2018. This increase was primarily due to the recording of a $1.8 million gain in the third quarter 2018 as a result of a change in the fair value of the warrant liability, partially offset by a decrease in research and development expense.

Research and development expenses were $5.8 million for the third quarter 2019, compared to $6.5 million for the same period in 2018. This decrease was primarily due to a decrease of $0.4 million in clinical trial costs as a result of the timing of patient enrollment and a decrease of $0.3 million in manufacturing costs related to clinical trial material manufacturing campaigns.

General and administrative expenses were $2.2 million for the third quarter 2019, compared to $2.1 million for the same period in 2018. The increase was primarily due to a $0.1 million increase in stock based compensation as a result of new stock options granted to employees and directors in 2019.

Cash, cash equivalents and marketable securities totaled $10.1 million at September 30, 2019. Research and development incentive receivables, short term, totaled approximately $752,000 at September 30, 2019.

About Leap Therapeutics

Leap Therapeutics (NASDAQ:LPTX) is focused on developing novel cancer 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, hepatobiliary, gynecologic, and prostate cancers. 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 or via https://investors.leaptx.com/.


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 regarding 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 known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from our expectations. Such risks and uncertainties include, but are not limited to: 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 SEC, including Leap Therapeutics' Annual Report on Form 10-K for the fiscal year ended December 31, 2018 that Leap filed with the SEC on April 1, 2019. 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., Kenilworth, NJ, USA. OPDIVO(®) is a registered trademark of Bristol-Myers Squibb Company, New York, NY, USA. BAVENCIO® is a registered trademark of Merck KGaA, Darmstadt, Germany, and is marketed under a global strategic alliance between Merck KGaA, Darmstadt, Germany, and Pfizer Inc., New York, USA.


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

Argot Partners
Investor Relations
Heather Savelle

              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,

                                                                                                                                                                       2019                           2018                         2019              2018

     Operating expenses:

            Research and development                    $5,772                 $6,457                   $18,698                        $14,922

            General and administrative                          2,151                    2,142                      6,481                          6,858

            Total operating expenses                            7,923                    8,599                     25,179                         21,780

     Loss from operations                                                                                                                                    (7,923)                       (8,599)                    (25,179)         (21,780)

     Interest income                                                                                                                                              80                            128                          281               327

     Interest expense                                                                                                                                            (5)                           (4)                        (21)             (18)

     Australian research and development incentives                                                                                                              (7)                           299                          129             1,188

     Foreign currency loss                                                                                                                                      (80)                         (249)                       (114)            (615)

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

     Net loss                                                                                                                                                 (7,935)                       (6,632)                    (24,904)         (24,618)

     Dividend attributable to down round feature of warrants                                                                                           (359)

     Net loss attributable to common stockholders                                                           $(7,935)        $(6,632)               $(25,263)                 $(24,618)

     Net loss per share

            Basic                                               $(0.33)                 $(0.45)                   $(1.15)                       $(1.76)

            Diluted                                             $(0.33)                 $(0.55)                   $(1.15)                       $(1.76)

     Weighted average common shares outstanding

            Basic                                                       23,923,196                14,701,785                     22,039,386                   13,955,949

            Diluted                                                     23,923,196                15,211,716                     22,039,386                   13,955,949

                Leap Therapeutics, Inc.
                                                                                         Condensed Consolidated Balance Sheets
                                                                                   (in thousands, except share and per share amounts)

        September 30,  
         December 31,

                                                                                                                                                                    2019                  2018



           Current assets:

                Cash and cash equivalents                                                                                                                $10,058               $16,284

                Research and development incentive receivable                                                                                                752                   836

                Prepaid expenses and other current assets                                                                                                    210                   202

                          Total current assets                                                                                                            11,020                17,322

                Property and equipment, net                                                                                            149    86

                Right of use asset, net                                                                                                                    1,214

                Research and development incentive receivable, net of current portion                                                                        177

                Deferred tax assets                                                                                                                          120                   124

                Other assets                                                                                                         1,461 1,542

                          Total assets                                                                                                                   $14,141               $19,074

                Liabilities and Stockholders' Equity

           Current liabilities:

                Accounts payable                                                                                                                          $4,889                $3,579

                Accrued expenses                                                                                                                           2,317                 2,872

                Restricted stock liability                                                                                                                   159

                Lease liability - current portion                                                                                                            566

                          Total current liabilities                                                                                                        7,931                 6,451

           Non current liabilities:

                Warrant liability                                                                                                                                               3,448

                Lease liability, net of current portion                                                                                                      648

                          Total liabilities                                                                                                                8,579                 9,899

           Stockholders' equity:

                Common stock, $0.001 par value; 100,000,000 shares authorized; 24,194,877 and                                                                 24                    15
      14,703,159 shares issued and outstanding as of September 30, 2019 and December 31,
      2018, respectively

                Additional paid-in capital                                                                                                               192,383               162,393

                Accumulated other comprehensive income                                                                                                       327                   302

                Accumulated deficit                                                                                                                    (187,172)            (153,535)

                          Total stockholders' equity                                                                                                       5,562                 9,175

                          Total liabilities and stockholders' equity                                                                                     $14,141               $19,074

                Leap Therapeutics, Inc.
                                                      Condensed Consolidated Statements of Cash Flows
                                                                      (in thousands)

                                                                                                                              Nine Months Ended September 30,

                                                                                                                         2019                   2018


                 Cash used in operating activities                                      $(21,008)  $(18,983)

                 Cash used in investing activities                                                              (100)

                 Cash provided by financing activities                                                         14,836                15,946

                 Effect of exchange rate changes on cash and cash equivalents                                      46                   549

                 Net decrease in cash and cash equivalents                                                    (6,226)              (2,488)

      Cash and cash equivalents at beginning of period                                                           16,284                25,737

      Cash and cash equivalents at end of period                                            $10,058     $23,249

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SOURCE Leap Therapeutics, Inc.