Leap Therapeutics Reports Second Quarter 2020 Financial Results

CAMBRIDGE, Mass., Aug. 13, 2020 /PRNewswire/ -- Leap Therapeutics, Inc. (Nasdaq:LPTX), a biotechnology company focused on developing targeted and immuno-oncology therapeutics, today reported financial results for the second quarter ended June 30, 2020.

Leap Second Quarter Highlights:

    --  Completed a $51.75 million public offering of common stock and
        pre-funded warrants to purchase common stock
    --  Presented updated data for DKN-01 monotherapy that showed a complete
        response and partial response in endometrial cancer patients with
        additional responses observed for the DKN-01 plus paclitaxel combination
        in carcinosarcoma patients
    --  Announced Orphan Drug Designation of DKN-01 for the treatment of gastric
        and gastroesophageal junction cancer

"Our partnership with BeiGene for the clinical development and commercialization of DKN-01 is progressing extremely well, and we look forward to dosing the first patient this quarter in the combination study of DKN-01 plus tislelizumab, BeiGene's anti-PD-1 antibody, for the treatment of gastric or gastroesophageal junction cancer patients," said Douglas E. Onsi, President and Chief Executive Officer of Leap. "DKN-01 continues to show potential to treat multiple biomarker-defined cancers, as both a single agent and in combination with chemotherapy or anti-PD-1 therapies. We are excited about the promise of this program and, with the proceeds from our recent public offering, are well funded to drive development forward."

Business Update

    --  Leap Completed $51.75 Million Public Offering of Common Stock and
        Pre-Funded Warrants to Purchase Common Stock - In June 2020, Leap
        announced the closing of an underwritten public offering yielding
        aggregate gross proceeds of $51.75 million, before deducting
        underwriting discounts and commissions and other offering expenses
        payable by Leap.

DKN-01 Clinical Update

DKN-01 is a humanized monoclonal antibody that binds to and blocks the activity of the Dickkopf-1 (DKK1) protein, a modulator of Wnt/Beta-catenin signaling. DKK1 has an important role in tumor cell signaling and in mediating an immuno-suppressive tumor microenvironment.

    --  Leap Presented Updated Data for DKN-01 Monotherapy and Paclitaxel
        Combination in Gynecologic Cancers - Leap announced updated clinical
        data from its ongoing Phase 2 clinical trial of DKN-01, as both a
        monotherapy and in combination with paclitaxel chemotherapy, in patients
        with advanced gynecological malignancies. Leap hosted a conference call
        with Rebecca Arend, M.D., Assistant Professor and Associate Scientist,
        Gynecologic Oncology Clinic, The University of Alabama at Birmingham
        School of Medicine Comprehensive Cancer Center Experimental Therapeutics
        Program, on April 23, 2020, to discuss the data. Key findings from the
        P204 study include the following:
        --  DKN-01 Monotherapy in Endometrial Cancer: Twenty-nine endometrial
            cancer patients were enrolled in the DKN-01 monotherapy arm, over
            75% of whom had experienced three or more prior lines of therapy. Of
            those patients, 26 were evaluable for response. In the 20 patients
            with a Wnt signaling alteration, one patient (5%) has an ongoing
            complete response, one patient (5%) had a partial response, eight
            patients (40%) had a best response of stable disease, and 10
            patients (50%) had progressive disease, representing an overall
            response rate (ORR) of 10% and a disease control rate (DCR) of 50%.
            In the group of six patients without any Wnt signaling alterations,
            one patient (16.6%) had a best response of stable disease and five
            patients (83.3%) had progressive disease.
        --  DKN-01 plus Paclitaxel in Carcinosarcoma: Fifteen patients with
            carcinosarcoma were enrolled in the DKN-01 plus paclitaxel arm, six
            of whom were evaluable for response as of the data-cutoff date. Two
            patients (33%) have had a partial response, one patient (17%) has
            had a best response of stable disease, and three patients (50%) had
            progressive disease, representing an ORR of 33% and a DCR of 50%.
            Nine patients had not reached their first tumor assessment.
    --  Leap Announced Orphan Drug Designation of DKN-01 for the Treatment of
        Gastric and Gastroesophageal Junction Cancer - Leap announced that the
        U.S. Food and Drug Administration (FDA) granted the Company Orphan Drug
        Designation for DKN-01 for the treatment of gastric and gastroesophageal
        junction cancer. The FDA's Office of Orphan Drug Products grants orphan
        status to support development of medicines for underserved patient
        populations, or rare disorders, that affect fewer than 200,000 people in
        the U.S. Orphan Drug Designation provides to Leap certain benefits,
        including market exclusivity upon regulatory approval if received,
        exemption of FDA application fees, and tax credits for qualified
        clinical trials.

Selected Second Quarter 2020 Financial Results

Net loss was $6.5 million for the second quarter 2020, compared to $8.4 million for the same period in 2019. This decrease was primarily due to revenue recognized from the BeiGene agreement, a decrease in clinical development expenses and non-cash foreign currency gains associated with changes in the Australian dollar exchange rate related to certain manufacturing activities.

Research and development expenses were $5.4 million for the second quarter 2020, compared to $6.1 million for the same period in 2019. The decrease was primarily due to lower clinical trial costs due to timing of patient enrollment and lower consulting fees associated with research and development activities.

General and administrative expenses were $2.5 million for the second quarter 2020, compared to $2.3 million for the same period in 2019. The increase was primarily due to higher legal, audit and consulting fees associated with corporate and business development activities.

Cash, cash equivalents and marketable securities totaled $64.9 million at June 30, 2020. Research and development incentive receivables, current and long term, totaled approximately $0.3 million at June 30, 2020.

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, hepatobiliary, gynecologic, and prostate cancers. Leap has formed a partnership with BeiGene, Ltd. for the rights to develop DKN-01 in Asia (excluding Japan), Australia, and New Zealand. For more information about Leap Therapeutics, visit http://www.leaptx.com or view 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 Leap's expectations with respect to the development and advancement of DKN-01, including the initiation, timing and design of future studies, enrollment in future studies, potential for the receipt of future option exercise, milestones or royalty payments from BeiGene, and other future expectations, plans and prospects. 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: that the initiation, conduct, and completion of clinical trials, laboratory operations, manufacturing campaigns, and other studies may be delayed, adversely affected, or impacted by COVID-19 related issues, the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for financing; 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; 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's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC on March 16, 2020 and as may be updated by Leap's Quarterly Reports on Form 10-Q and the other reports we file from time to time with the SEC. 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.


Douglas E. Onsi
President & Chief Executive Officer
Leap Therapeutics, Inc.

Heather Savelle
Investor Relations
Argot Partners

              Leap Therapeutics, Inc.

        Condensed Consolidated Statements of Operations

        (in thousands, except share and per share amounts)

                                                                                                                         (Unaudited)                (Unaudited)

                                                                                                                 Three Months Ended June 30, Six Months Ended June 30,

                                                                                                                                        2020                       2019        2020             2019

     License revenue                                                                                                                   $375    
            $            -       $750  
     $           -

     Operating expenses:

                                                                                                                                       5,350                      6,136       9,953           12,926

     Research and development

                                                                                                                                       2,521                      2,325       4,674            4,330

     General and administrative

                                                                                                                                       7,871                      8,461      14,627           17,256

     Total operating expenses

     Loss from operations                                                                                                           (7,496)                   (8,461)   (13,877)        (17,256)

     Interest income                                                                                                                     20                        119          88              201

     Interest expense                                                                                                                  (13)                       (9)       (25)            (16)

     Australian research and development incentives                                                                                      30                         61         115              136

     Foreign currency gains (loss)                                                                                                      943                       (76)       (48)            (34)

     Net loss                                                                                                                       (6,516)                   (8,366)   (13,747)        (16,969)

     Dividend attributable to down round feature of warrants                                                                                                               (303)           (359)

     Dividend attributable to Series A & B convertible preferred stock                                                                                                     (372)

     Series A & B convertible preferred stock - beneficial conversion feature                                                                                            (9,399)

     Net loss attributable to common stockholders                                                                                  $(6,516)                  $(8,366)  $(23,821)       $(17,328)

     Net loss per share

                                                                                                                                     $(0.12)                   $(0.37)    $(0.57)         $(0.82)


                                                                                                                                     $(0.12)                   $(0.37)    $(0.57)         $(0.82)


     Weighted average common shares outstanding

                                                                                                                                  52,442,597                 22,906,025  42,037,405       21,081,869


                                                                                                                                  52,442,597                 22,906,025  42,037,405       21,081,869


                Leap Therapeutics, Inc.

            Condensed Consolidated Balance Sheets

         (in thousands, except share and per share amounts)

                June 30,          
     December 31,

                                                                                                                                                           2020                      2019



     Current assets:

              Cash and cash equivalents                                                                                                $64,887                    $3,891

              Research and development incentive receivable                                                                                181                       185

              Prepaid expenses and other current assets                                                                                    212                       165

                                                                                                                                                         65,280                     4,241

              Total current assets

              Property and equipment, net                                                                                                   81                       124

              Right of use assets                                                                                                          711                     1,026

                                 Research and development incentive receivable, net of current portion                                                        124

              Deferred tax assets                                                                                                          125                       127

              Deferred costs                                                                                                               413                       831

              Deposits                                                                                                                           939                            1,099

                                                                                                                                                        $67,673                    $7,448

              Total assets

                Liabilities and Stockholders' Equity (Deficiency)

     Current liabilities:

              Accounts payable                                                                                                          $2,716                    $4,571

              Accrued expenses                                                                                                           2,232                     3,441

              Deferred revenue - current portion                                                                                         1,500

              Lease liability - current portion                                                                                            388                       474

                                                                                                                                                          6,836                     8,486

              Total current liabilities

     Non current liabilities:

              Restricted stock liability                                                                                                                            159

              Deferred revenue, net of current portion                                                                                     750

              Lease liability, net of current portion                                                                                      354                       552

                                                                                                                                                          7,940                     9,197

              Total liabilities

     Stockholders' equity (deficiency):

                                 Common stock, $0.001 par value; 240,000,000 shares authorized;
                                  59,657,742 and

                                 24,194,877 shares issued and outstanding as of June 30, 2020 and

              December 31, 2019, respectively                                                                                               60                        24

              Additional paid-in capital                                                                                               268,770                   193,319

              Accumulated other comprehensive income                                                                                       121                        76

              Accumulated deficit                                                                                                    (209,218)                (195,168)

                                                                                                                                                         59,733                   (1,749)

              Total stockholders' equity (deficiency)

                                                                                                                                                        $67,673                    $7,448

              Total liabilities and stockholders' equity (deficiency)

                 Leap Therapeutics, Inc.

                Condensed Consolidated Statements of Cash Flows

                 (in thousands)


                                                                                                                                                           Six Months Ended June 30

                                                                                                                                                     2020          2019

                 Cash used in operating activities                                     $(13,377)                                $(14,051)

                 Cash provided by (used in) investing activities                                                                               25       (100)

                 Cash provided by financing activities                                                                                     74,382      13,582

                 Effect of exchange rate changes on cash and cash equivalents                                                                (34)         32

                 Net increase in cash and cash equivalents                                                                                 60,996       (537)

      Cash and cash equivalents at beginning of period                                                                                        3,891      16,284

      Cash and cash equivalents at end of period                                           $64,887                                   $15,747

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SOURCE Leap Therapeutics, Inc.