AdAlta Ltd (ASX:1AD) had a busy December quarter, with significant pipeline expansion, clinical progress and an injection of A$3.75 million from a placement offer all contributing to a positive outlook for 2022.
The clinical-stage drug discovery company, which develops novel therapeutic products from its i-body platform, ended the year with a healthy cash balance of A$9.08 million.
“In the second quarter of the financial year, we significantly strengthened AdAlta’s cash position while making substantial progress on our AD-214 inhalation program and iCAR-T collaboration with Carina Biotech," managing director Dr Tim Oldham said.
The company has also secured a patent for AD-214, while proof of principle has been reported for its iCAR-T data.
AD-214 inhaler progress
AdAlta is developing its lead product, AD-214, as a first-in-class, next-generation antibody therapeutic for the treatment of idiopathic pulmonary fibrosis (IPF) and interstitial lung disease (ILD), with potential in other fibrotic diseases and cancer.
The company is testing the product’s distribution in lungs when administered through an inhaler.
“Most importantly, we reported the successful nebulisation of AD-214 in commercial and preclinical inhalation devices, enabling us to commence pre-clinical efficacy studies of AD-214 in an inhaled format during the quarter,” Oldham said.
The company is now testing the comparative efficacy of intravenous versus inhaled AD-214 in the gold-standard bleomycin mouse model of pulmonary fibrosis. Initial results from these studies should be back during the current quarter.
“The results of inhalation efficacy studies, expected in the March 2022 quarter, and other development milestones planned for AD214 during the first half of 2022, have the potential to steadily increase the value of AD-214 to partners and may accelerate partnering discussions,” said Oldham.
Financials
AdAlta’s operating cash outflows for the quarter were A$2,257,961, compared with A$1,604,067 in the previous quarter, which reflected an increase in activity around several of its assets.
Cash inflows rose slightly too, and AdAlta received a rebate of A$2,663,660 under the Commonwealth R&D Tax Incentive (RDTI) scheme. Following full repayment of a loan facility secured over this rebate, net proceeds to AdAlta were A$894,329.
During the quarter, the company issued more than 50 million shares via a placement to new and existing institutional and sophisticated investors, raising A$3.75 million before costs. An entitlement offer is now open, from which the company hopes to raise another A$2.2 million.
The funds raised under the placement will allow the company to focus on strategic opportunities, following the development milestones scheduled in the first half of 2022. Proceeds from the entitlement offer will further expand these options.
“We are grateful for the support of existing and new shareholders who participated in our A$3.75 million placement, and for the ongoing support of the Australian Government and the Medical Research Future Fund via the R&D Tax Incentive and Biomedical Translational Bridge program that is supporting the development of our inhaled form of AD-214,” Oldham said.
CAR-T collaboration
Back in August, AdAlta and Carina Biotech Pty Ltd announced a collaboration to develop precision-engineered, i-body enabled chimeric antigen receptor T (iCAR-T) cell therapies against up to five solid tumour targets.
CAR-T cell therapy harnesses the body’s own immune system to fight cancer. A patient’s immune cells (T cells) are collected, then genetically engineered in a laboratory to include a chimeric antigen receptor (CAR) that recognises a specific antigen on the surface of cancer cells.
The CAR-T cells are expanded in a laboratory, then returned to the patient primed to locate and kill the cancer cells that have previously been invisible to the immune system. The first CAR-T cells were approved for blood cancers in 2017 and now generate more than US$1 billion per year.
A total of five CAR-T cell products are approved for blood cancers by the FDA and the market is forecast to reach US$20.3 billion by 2027.