MEI Pharma, Inc. - Quarter Report: 2022 September (Form 10-Q)

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ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

For the quarterly period ended September 30, 2022

OR

Commission File Number: 000-50484

MEI Pharma, Inc.

(Exact name of registrant as specified in its charter)

11455 El Camino Real, San Diego, CA 92130

(Address of principal executive offices) (Zip Code)

(858) 369-7100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of November 10, 2022, the number of shares outstanding of the issuer’s common stock, $0.00000002 par value, was 133,260,865.

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MEI PHARMA, INC.

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PART I FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

MEI PHARMA, INC.

CONDENSED BALANCE SHEETS

(In thousands, except par value data)

See accompanying notes to condensed financial statements.

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MEI PHARMA, INC.

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

See accompanying notes to condensed financial statements.

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MEI PHARMA, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

See accompanying notes to condensed financial statements.

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MEI PHARMA, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

See accompanying notes to condensed financial statements.

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MEI PHARMA, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q ("Quarterly Report") includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding the future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation, those described in “Risk Factors” in our 2022 Annual Report on Form 10-K ("2022 Annual Report"), as filed with the Securities and Exchange Commission on September 8, 2022. Set forth below is a summary of the principal risks we face:

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These risks are not exhaustive. Other sections of this report and our other filings with the Securities and Exchange Commission ("SEC") include additional factors which could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. There is substantial uncertainty regarding the impact of the ongoing COVID-19 pandemic on our business, industry, global economic conditions and government policy. New risk factors emerge from time to time and it is not possible for us to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Past performance may not be an indicator of future results. The following discussion is qualified in its entirety by, and should be read in conjunction with, the more detailed information set forth in the financial statements and the notes thereto appearing elsewhere in this Quarterly Report and the audited financial statements and notes thereto included in our 2022 Annual Report, as filed with the SEC. Operating results are not necessarily indicative of results that may occur in future periods.

Overview

We are a late-stage pharmaceutical company committed to the development and commercialization of novel cancer therapies intended to improve outcomes for patients. Our portfolio of drug candidates includes three clinical-stage assets, including zandelisib (f/k/a ME-401), currently in multiple ongoing clinical studies intended to support marketing applications with the U.S. Food and Drug Administration (“FDA”) and other regulatory authorities globally. Our approach to building our pipeline is to license or acquire promising cancer agents and build value in programs through development, commercialization and strategic partnerships, as appropriate. Our common stock is listed on the Nasdaq Capital Market under the symbol “MEIP.”

Clinical Development Programs

We build our pipeline by licensing or acquiring promising cancer agents and creating value in programs through development, commercialization and strategic partnerships, as appropriate. Our objective is to leverage the mechanisms and properties of our pipeline drug candidates to optimize the balance between efficacy and tolerability to meet the needs of patients with cancer. Our drug candidate pipeline includes:

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Zandelisib: PI3Kδ Inhibitor in Multiple Trials Intended to Support Marketing Approvals in Relapsed or Refractory Follicular and Marginal Zone Lymphomas

Zandelisib is an oral, once-daily, selective PI3Kδ inhibitor in clinical development for the treatment of B-cell malignancies. Registrational and combination clinical studies are focused on the time-limited, intermittent dosing ("ID"), of zandelisib in patients with relapsed or refractory (“r/r”) indolent non-Hodgkin lymphomas and chronic lymphocytic leukemia ("CLL"). “Time-limited” therapy is treatment which is to be administered for a fixed period of time and not based on an event like disease progression or tolerability to study drug.

In March 2020, the FDA granted zandelisib Fast Track designation for the treatment of adult patients with r/r follicular lymphoma (“FL”) who have received at least two prior systemic therapies. In November 2021, the FDA granted orphan-drug designation to zandelisib for the treatment of follicular lymphoma. In April 2020, we entered into a global license, development and commercialization agreement to further develop and commercialize zandelisib with Kyowa Kirin Co., Ltd. (“KKC”). MEI Pharma and KKC will co-develop and co-promote zandelisib in the U.S., with MEI Pharma recording all revenue from U.S. sales. KKC has exclusive commercialization rights outside of the U.S.

We are conducting multiple ongoing studies evaluating zandelisib. Our studies include TIDAL, a global Phase 2 study evaluating zandelisib as a monotherapy in patients with r/r FL and marginal zone lymphoma (“MZL”) patients who have received at least two prior lines of treatment.

Enrollment in the FL cohort of TIDAL is complete. Data from the TIDAL study as reported at the American Society of Clinical Oncology Annual Meeting 2022 and the European Hematology Association 2022 Hybrid Congress in the cohort of patients with FL, demonstrated an overall response rate of 70.3% in the primary efficacy population of 91 patients as determined by Independent Review Committee assessment; the complete response rate was 35.2%. It was also reported that zandelisib was generally well tolerated in the TIDAL study; with 9.4 months (range: 0.8-24) median duration of follow-up in the total study population of 121 patients with FL, interim data demonstrated a discontinuation rate due to any drug related adverse event of 9.9%. Patients enrolled in the study continue to be followed for safety as well as duration of response.

On March 24, 2022, we reported on the outcome of an end of Phase 2 meeting with the FDA to discuss the TIDAL study. Specifically, the FDA stated that a randomized trial is needed to adequately assess drug efficacy and safety of PI3Kδ inhibitor drug candidates, including zandelisib. Based on this view, the agency discouraged a planned filing based on the single arm Phase 2 TIDAL study data and emphasized that the Company continue efforts with the ongoing, randomized Phase 3 COASTAL study as planned. In addition, while the FDA stated that safety on the 60 mg ID schedule appears reasonable, it recommended continued dose exploration. We will continue to evaluate our existing data, forthcoming dose-response data and any other additional efforts, as appropriate, to ensure we address questions from the FDA concerning the selection of our current zandelisib dose and schedule.

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On April 21, 2022, the FDA’s Oncology Drugs Advisory Committee (“ODAC”) concluded that, to better assess potential safety concerns, companies developing PI3Kδ inhibitors for hematologic malignancies should conduct randomized trials, not single arm studies, to support approval. At a subsequent ODAC meeting on September 23, 2022, the FDA heard an update on the new drug application, for COPIKTRA® (duvelisib), a PI3K inhibitor approved for adult patients with relapsed or refractory CLL or small lymphocytic lymphoma ("SLL") after at least two prior therapies. The committee voted that given the potential detriment to overall survival, as well as concerns related to dose and safety issues with approved PI3Kδ inhibitors, duvelisib did not demonstrate a favorable benefit/risk ratio for patients with r/r CLL.

The FDA has been contemporaneously communicating a broader initiative called Project FrontRunner, replacing its long-standing approach to accelerated approvals generally. In brief, under Project FrontRunner, the FDA communicated its intent to consider support for accelerated approval of cancer drugs based on data from randomized studies, rendering data generated by single arm studies, such as TIDAL, generally insufficient by the FDA to adequately assess risk and benefit, and thus support an accelerated approval marketing authorization. Accordingly, in line with the FDA’s recommendation, and Project FrontRunner, and associated regulatory activity relevant approved PI3Kδ inhibitors, we no longer plan to submit an FDA marketing application based on the single arm Phase 2 TIDAL study.

COASTAL, the ongoing Phase 3, randomized study, is evaluating the ID and time-limited therapy of zandelisib in combination with rituximab in patients with r/r FL and MZL who have received at least one prior line of treatment. COASTAL is intended to support marketing applications in the U.S. and globally in r/r FL and MZL patients receiving at least one prior line of treatment.

We are also conducting a multi-arm, open-label, Phase 1b dose finding and expansion trial evaluating zandelisib as a monotherapy and in combination with other therapies in patients with relapsed or refractory B-cell malignancies. Other initiated studies include Phase 1 and Phase 2 studies ("MIRAGE") being conducted by KKC evaluating zandelisib as a monotherapy in patients in Japan with indolent B-cell malignancies, pursuant to our agreement with KKC.

Zandelisib: Potentially Highly Differentiated Pharmaceutical Properties within a Clinically Validated Class of Treatments

The approved PI3Kδ inhibitors have been developed for the treatment of B-cell malignancies. Previous entrants to the class have been challenged by toxicities, modest efficacy and/or inconvenience of administration route. We believe this provides an opportunity for the development of a next-generation candidate with pharmaceutical properties that may realize the therapeutic potential of PI3Kδ inhibition by limiting toxicities and improving upon modest efficacy, which together hinder clinical utility.

The molecular structure and pharmacodynamic characteristics of zandelisib are distinct from the FDA approved PI3Kδ inhibitors. Clinical and preclinical data demonstrate that zandelisib’s distinct characteristics include prolonged target binding, preferential cellular accumulation, high volume of distribution throughout the body tissues, and an approximately 28-hour half-life suitable for once daily oral administration. The properties of zandelisib support the evaluation of an ID regimen. The ID regimen consists of daily dosing only in the first seven days of each 28-day dosing cycle. The unique zandelisib ID regimen is hypothesized to allow for the recovery of regulatory T cells, which in turn may lead to fewer and/or less severe immune-related adverse events. This may provide long-term disease control through maintenance therapy, without the need for dose reductions or premature discontinuations. Clinical evaluation of the ID regimen to date has demonstrated the potential to maintain clinical benefit while minimizing immune-related toxicities common to approved PI3Kδ agents, either as a monotherapy or in combination with other therapies.

KKC License, Development and Commercialization Agreement

In April 2020, we entered into a License, Development and Commercialization Agreement (the “KKC Commercialization Agreement”) with KKC under which we granted to KKC a co-exclusive, sublicensable, payment-bearing license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in the U.S. (the "U.S. License"), and an exclusive (subject to certain retained rights to perform obligations under the agreement), sublicensable, payment-bearing, license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in countries outside of the U.S. (the “Ex-U.S.” and the "Ex-U.S. License"). KKC granted to us a co-exclusive, sublicensable, license under certain patents and know-how controlled by KKC to develop and commercialize zandelisib for all human indications in the U.S., and a co-exclusive, sublicensable, royalty-free, fully paid license under certain patents and know-how controlled by KKC to perform our obligations in the Ex-U.S. under the KKC Commercialization Agreement. The KKC Commercialization Agreement substantially retains and consolidates the terms of the 2018 license agreement with KKC to develop and commercialize zandelisib in Japan.

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KKC will be responsible for the development and commercialization of zandelisib in the Ex-U.S. and, subject to certain exceptions, will be solely responsible for all costs related thereto. We will co-develop and co-promote zandelisib with KKC in the U.S., with the Company recording all revenue from U.S. sales. We will share U.S. profits and costs (including development costs) on a 50-50 basis with KKC. We will also provide to KKC certain drug supplies necessary for the development and commercialization of zandelisib in the Ex-U.S. pursuant to supply agreements to be entered into on customary terms, with the understanding that KKC will assume responsibility for manufacturing for the Ex-U.S. as soon as practicable.

Under the terms of the KKC Commercialization Agreement, KKC paid us an initial payment of $100.0 million. Additionally, during the fiscal year ended June 30, 2022, two $10.0 million milestones were received in connection with the initiation of the Phase 3 COASTAL study. We may also earn up to approximately $582.5 million in potential development, regulatory and commercialization milestone payments, plus royalties on net sales of zandelisib in the Ex-U.S., which are tiered beginning in the teens.

Zandelisib Scientific Overview: at the Crossroads of B-cell Signaling Pathways

The PI3K/AKT/mTOR pathway is an important signaling pathway for many cellular functions such as cell survival, cell cycle progression and cellular growth. PI3Ks are a family of enzymes within this pathway that have been shown to play a critical role in the proliferation and survival of certain cancer cells.

There are several isoforms of PI3K that are expressed in different types of cells. The PI3Kδ isoform is at the crossroads of B-cell receptor signaling pathways that are major drivers of survival and proliferation of many B-cell malignancies. Because the δ isoform is often overexpressed in cancer cells of the B-lymphocyte lineage, such as B-cell leukemias and lymphomas, it is understood to be important for survival of these cells. Zandelisib displays high selectivity for the PI3K delta isoform and functions to inhibit its activity.

Clinical Program Overview

We are conducting multiple ongoing studies evaluating zandelisib including TIDAL and COASTAL. Clinical evaluation is focused on ID of zandelisib as part of time-limited therapy.

Additionally, we are conducting a multi-arm, open-label, Phase 1b dose escalation and expansion trial as a monotherapy and in combination with rituximab or zanubrutinib in patients with FL and other B-cell malignancies. Zanubrutinib (marketed as BRUKINSA®), is an inhibitor of Bruton’s tyrosine kinase developed by BeiGene, Ltd. (“BeiGene”). This study arm completed the safety evaluation stage in patients with B-cell malignancies and expanded into disease specific FL and mantle cell lymphoma ("MCL") cohorts. The evaluation of zandelisib in combination with zanubrutinib is conducted under a collaboration established with BeiGene in October 2018, pursuant to which the cost of the combination trial is being equally shared, and each company is supplying its own investigational agent. We retain all commercial rights to zandelisib (subject to the KKC Commercialization Agreement), and BeiGene retains all commercial rights to zanubrutinib.

Ongoing clinical trials also include Phase 1 and Phase 2 studies conducted by KKC evaluating zandelisib as a monotherapy in patients in Japan with indolent B-cell malignancies. The Phase 2 study is intended to support marketing authorization in Japan.

In addition to other planned and ongoing clinical studies sponsored by us, such as the Phase 2 CORAL study evaluating zandelisib in combination with venetoclax plus rituximab in patients with CLL, in which we plan to dose the first patient by the end of calendar year 2022, we also are supporting select investigator-initiated studies, including one being conducted at the Cleveland Clinic evaluating zandelisib combined with standard of care in patients with newly diagnosed diffuse large B-cell lymphoma (“DLBCL”).

All ongoing studies, as well as planned studies, utilize zandelisib’s unique ID regimen intended to optimize zandelisib’s therapeutic profile and also support its potential as a backbone for combination approaches with other modalities in the treatment of B-cell malignancies.

Phase 1b Multi-Arm Trial

In July 2022, results from the Phase 1b study evaluating zandelisib with continuous or ID as monotherapy or in combination with rituximab in patients with relapsed or refractory B-cell malignancy were published in The Lancet Oncology. The manuscript reports on a total of 97 patients, including 31 patients in the dose escalation stage that established 60 mg once daily as the recommended Phase 2 dose. The study evaluated zandelisib in 56 patients as a monotherapy and 41 patients in combination with rituximab. Zandelisib was administered either on a continuous schedule of 60 mg once daily (38 patients) or an ID schedule of 60 mg once daily for the initial two 28-day cycles followed by the ID schedule of 60 mg once daily on days 1-7 starting in Cycle 3 (59 patients).

In the initial monotherapy dose-finding part of the study, no dose-limiting toxicities were observed across the evaluated doses of 60 mg, 120 mg and 180 mg given daily continuously, and anti-tumor activity was similar across doses. With a median duration of treatment of 10.4 months and 15.2 months, in the continuous and ID group respectively, Grade 3 or worse adverse events of special interest occurred less frequently in the ID group than in the continuous dosing group. For example, Grade 3 diarrhea or colitis in 8%

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vs 24%, and Grade 3 lung infection or pneumonia occurred in 2% vs 16%, of patients in the ID group vs the continuous dosing group, respectively. Grade 3 or worse aspartate aminotransferase ("AST") or alanine aminotransferase ("ALT") elevation and rash were uncommon (5% each in each dosing schedule). There was a continued increased risk of Grade 3 diarrhea or colitis in the continuous dosing group, compared with a decreased risk over time in the ID group after switching to the ID. At a median follow-up of 24.9 months in the continuous dosing group and 15.7 months (95% CI 6·5-33·9) in the ID group the cumulative incidence of Grade 3 or worse adverse events of special interest was 45% in the continuous dosing group and 20% in the ID group. ID showed comparable efficacy to continuous dosing. Patients with indolent B-cell malignancies (follicular lymphoma, chronic lymphocytic leukemia or small lymphocytic lymphoma, and marginal zone lymphoma) demonstrated an objective overall response rate of 87%.

In June 2022, updated data from the Phase 1b clinical trial was also featured in a poster presentation at the European Hematology Association 2022. The poster included the report of data of 32 patients with FL administered zandelisib 60 mg on ID regimen from Cycle 1 plus zanubrutinib 80 mg twice daily. The overall response rate in patients treated with zandelisib plus zanubrutinib was 82.1% (23 of 28 patients). The median duration of response was not yet mature in this group of patients, with median drug exposure of 7.1 months. The safety and tolerability of zandelisib plus zanubrutinib was generally well tolerated. One patient in this group had reversible Grade 4 drug rash with eosinophilia and systemic symptoms (DRESS) syndrome. The Phase 1b study also enrolled patients with r/r MCL in an expansion cohort evaluating the combination of zandelisib 60 mg administered on days 1-7 starting Cycle 1 and zanubrutinib administered at 80 mg twice daily.

TIDAL: A Phase 2 Trial Evaluating Zandelisib as a Single-Agent in Follicular and Marginal Zone Lymphoma Patients

TIDAL is an ongoing global Phase 2 trial evaluating the intermittent administration of zandelisib as a monotherapy across two study cohorts: the first study cohort for the treatment of adults with r/r FL and the second study cohort for r/r MZL, in both cases after failure of at least two prior systemic therapies including chemotherapy and an anti-CD20 antibody. The study is evaluating zandelisib administered once daily at 60 mg for two 28-day cycles and then on the ID regimen of once daily dosing for the first seven days of each subsequent 28-day cycle. The primary efficacy endpoint is the rate of objective responses to therapy, and other endpoints include duration of response and tolerability of zandelisib. The primary efficacy population ("PEP") sample size for r/r FL is 91 patients. Total study enrollment in the FL cohort is 121 patients administered zandelisib on the ID regimen after two cycles (56 days) of daily dosing, and also 16 FL patients administered zandelisib once daily continuously, to provide additional safety data. Enrollment of the FL cohort of the TIDAL study is complete. To support and focus enrollment on the Phase 3 COASTAL study, we have closed enrollment of the MZL cohort in the TIDAL study and will follow enrolled MZL patients to assess safety and tolerability as well as response and durability of response.

In November 2021, we first reported data from the TIDAL study, which data was also reported at the American Society of Clinical Oncology Annual Meeting 2022 and the European Hematology Association 2022 Hybrid Congress. The primary endpoint of overall response rates ("ORR") of zandelisib as a single agent in the PEP was 70.3% (64 patients) as assessed by Independent Review Committee; the complete response rate was 35.2% (32 patients). Responses across sub-groups (i.e. response to last treatment, number of prior therapies and POD24) were all greater than 63%. Responses were first observed in the first two cycles of therapy in 87.5% of all responses (56 patients) and 75% of all CRs (24 patients) were observed in the first four cycles. As of the data cutoff date, the data are not sufficiently mature to accurately estimate the final duration of response in the PEP.

With a median follow-up of 9.4 months (range 0.8 to 24 months) in the safety population of 121 patients, 9.9% (12 patients) of patients had discontinued therapy due to any drug-related adverse event. Grade 3 adverse events of special interest ("AESI") were diarrhea in 5% (6 patients), colitis in 1.7% (2 patients), cutaneous rash in 3.3% (4 patients), stomatitis in 2.5% (3 patients), and 0.8% (1 patient) each for AST and ALT elevation, and non-infectious pneumonitis. Grade 3 AESIs primarily (83%, 15 of 18 patients) occurred in Cycles 1-3, with only 3 cases reported on ID in Cycles 4 or more. No Grade 4 or Grade 5 AESI were recorded. Treatment-emergent COVID-19 infections were reported in 8.3% of patients (10), and 8.3% of patients (10) reported other Grade 3 infections. Four COVID infections were fatal, as were one case each of pneumonia and Tumor Lysis Syndrome.

We plan to report new data from the FL cohort in the Phase 2 TIDAL study by the end of calendar year 2022.

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COASTAL: A Phase 3 Trial Intended to Support Full FDA and Global Marketing Authorizations

COASTAL is a global, randomized, two-arm Phase 3 trial comparing the intermittent and time-limited administration of zandelisib plus rituximab to standard of care chemotherapy plus rituximab, in patients with r/r FL or MZL who received at least one prior line of therapy, which must have included an anti-CD20 antibody in combination with chemotherapy or lenalidomide. COASTAL is expected to enroll 534 patients. Zandelisib will be administered once daily for two 28-day cycles followed by an intermittent schedule of once daily dosing for seven days of each subsequent 28-day cycle for a total of 24 months, in combination with rituximab ("R") in the first six months only. The control arm will consist of six cycles of the standard chemoimmunotherapy regimens R-CHOP or R-bendamustine. The primary efficacy endpoint is progression-free survival; secondary endpoints include overall response rate, overall survival, patient reported outcomes assessments, and safety and tolerability.

COASTAL is intended to support marketing applications in the U.S. and globally in r/r FL and MZL patients who have received at least one prior line of treatment.

Impact of Current Events on the TIDAL and COASTAL Studies

The extent to which the ongoing COVID-19 pandemic will further impact the progress of the zandelisib development program, including the enrollment and completion of the COASTAL and TIDAL studies, is subject to future developments, which are highly uncertain and cannot be anticipated with confidence. Currently, we believe that the integrity of the program and individual studies remains intact; however, the pandemic did have a negative impact on the rate of enrollment in the TIDAL study. Enrollment in the FL cohort of the TIDAL study was completed in August 2021, and data was reported in November 2021; enrollment in the MZL cohort was discontinued in August 2022. The COASTAL study was initiated in 2021, with the first patient enrolled in July 2021. The COVID-19 pandemic and the military conflict between Russia and Ukraine have had a negative impact on the enrollment of the COASTAL study. We will continue to closely monitor for ongoing negative impacts on the development program related to these current events, as well as other factors which may be having a negative impact on the zandelisib development program, such as the FDA's communications regarding the risk benefit analysis of approved PI3Kδ inhibitors to treat indolent lymphomas. We will continue efforts to be proactive in managing the impact from the pandemic, the ongoing military conflict between Russia and Ukraine, and other potential factors, such as various actions to communicate with sites and investigators, and making accommodations to patients consistent with FDA guidance and guidance from other regulatory authorities, as we may deem appropriate.

Impact of Supply Chain Issues on COASTAL and CORAL Clinical Studies

We are currently experiencing what we believe to be a temporary supply chain issue affecting the availability of properly labeled zandelisib blister packs for use in the COASTAL and CORAL clinical studies. The issue relates to a change in the zandelisib packaging material intended to facilitate greater ease of opening without damaging capsules. The zandelisib drug supply using the current packaging material is exhibiting an estimated 42 month shelf life, 13 months shorter than the previous 55 month estimate. We believe there is no safety issue for patients nor a diminution of potency for zandelisib drug product. Patients currently on study continue to receive drug. However, we must pause enrollment of new patients until regulatory review of the new specification is complete and newly labelled blister packs are supplied to depots. We believe that this pause will extend enrollment completion in COASTAL by approximately three months.

Voruciclib: Potent Orally Administered CDK9 Inhibitor in Phase 1 Studies

Voruciclib is a potent orally administered CDK9 inhibitor. Voruciclib is being evaluated in a Phase 1 trial evaluating dose and schedule in patients with acute myeloid leukemia (“AML”) and B-cell malignancies. Voruciclib is also being evaluated in pre-clinical studies to explore the potential synergistic activity in various solid tumor cancers of voruciclib in combination with drug-candidates that targets in the RAS signaling pathway, including KRAS.

Voruciclib Scientific Overview: Cell Cycle Signaling

CDK9 has important functions in cell cycle regulation, including the modulation of two therapeutic targets in cancer:

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Voruciclib: Inhibition of MCL1

In pre-clinical studies voruciclib shows dose-dependent suppression of MCL1; in December 2017, a study of voruciclib published in the journal Nature Scientific Reports reported that the combination of voruciclib plus the BCL-2 inhibitor venetoclax was capable of inhibiting two master regulators of cell survival, MCL-1 and BCL-2, and achieved synergistic antitumor effect in an aggressive subset of DLBCL pre-clinical models.

In a peer reviewed manuscript published in 2020 by Luedtke et al, it was reported that the inhibition of CDK9 by voruciclib synergistically enhances cell death induced by the Bcl-2 selective inhibitor venetoclax in preclinical models of AML. The data demonstrated that voruciclib synergizes with venetoclax to induce programmed cell death, or apoptosis, in both AML cell lines and primary patient samples. It was also demonstrated that voruciclib downregulates MCL1, which is relevant for the synergy between voruciclib and venetoclax, and further that voruciclib also downregulates MYC, which also contributes to the synergies with venetoclax.

The research presented suggests that voruciclib is an attractive therapeutic target for treating cancers in combination with venetoclax or other BCL-2 inhibitors and is supportive of our ongoing clinical evaluation of voruciclib in B-cell malignancies and AML.

Voruciclib: Inhibition of MYC

Many cancers are associated with overexpression of MYC, a transcription factor regulating cell proliferation and growth. CDK9 is a known regulator of MYC transcription and a modulator of MYC protein phosphorylation. Data reported at the American Association for Cancer Research ("AACR") Annual Meeting 2021 in preclinical models demonstrates that voruciclib:

The research presented suggests that voruciclib could be an attractive therapeutic agent for cancers, including solid tumors, dependent on the activity of MYC.

Clinical Program

We are evaluating patients with hematological malignancies in a Phase 1 clinical trial evaluating the dose and schedule of voruciclib. The trial started with the evaluation of dose and schedule of voruciclib as a monotherapy in patients with relapsed and refractory B-cell malignancies and AML after failure of prior standard therapies to determine the safety, preliminary efficacy and maximum tolerated dose. We are now also starting to evaluate the dose and schedule of voruciclib in combination with venetoclax, a BCL2 inhibitor, to assess synergies and the opportunity for combination treatments, initially in patients with AML and subsequently across multiple indications.

As reported at the American Society of Hematology 2021 annual meeting in a poster presentation, data to date from the Phase 1 study evaluating voruciclib as a monotherapy on an optimized schedule of 14 consecutive days in a 28-day cycle was well tolerated. No dose limiting toxicities were observed and no significant myelosuppression was seen in patients with B-cell malignancies, suggesting a lower likelihood of additive toxicities in combination with venetoclax. Disease stabilization was observed in heavily pretreated patients and differentiation syndrome was observed in AML patients, which is indicative of biologic activity. We expect to initiate a Phase 1 study to evaluate voruciclib in combination with venetoclax in patients with AML by the end of calendar year 2022.

Voruciclib was also previously evaluated in more than 70 patients with solid tumors in multiple Phase 1 studies. The totality of the clinical data, along with data from pre-clinical studies, suggests voruciclib’s ability to inhibit its molecular target at a projected dose as low as 150 mg daily. In one clinical study, voruciclib was evaluated in combination with vemurafenib (marketed as Zelboraf®) in nine patients with BRAF mutated advanced/inoperable malignant melanoma. All three BRAF/MEK naive patients achieved a response: two partial responses and one complete response. In this study voruciclib was dosed at 150 mg daily plus vemurafenib 720 mg or 960 mg twice daily in 28-day cycles. The most common adverse events were fatigue, constipation, diarrhea, arthralgia and headache. One instance of grade 3 fatigue was dose limiting, and no serious adverse events related to voruciclib were reported. Other clinical studies evaluated voruciclib at doses up to 850 mg in patients with solid tumors, demonstrating additional evidence of potential biologic activity and an adverse event profile generally consistent with other drugs in its class.

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Impact of COVID-19 on the Voruciclib Clinical Development Program

While the extent to which the ongoing COVID-19 pandemic will further impact the progress of the voruciclib clinical development program, including the ongoing Phase 1 study, is subject to future developments which are highly uncertain and cannot be predicted with confidence, the Phase 1 study remains ongoing and is continuing to enroll patients; however, the rate of enrollment of patients has been negatively impacted by the pandemic. We will continue efforts to be proactive in managing the impact from the pandemic, including various actions to communicate with sites and investigators, and making accommodations to patients consistent with FDA guidance as we may deem appropriate.

ME-344: Clinical Stage Mitochondrial Inhibitor with Combinatorial Potential

ME-344 is our novel and tumor selective, isoflavone-derived mitochondrial inhibitor drug candidate. It targets the OXPHOS pathway involved in adenosine triphosphate ("ATP") production in the mitochondria. ME-344 was studied in an investigator-initiated, multi-center, randomized clinical trial in combination with the vascular endothelial growth factor (“VEGF”) inhibitor bevacizumab (marketed as Avastin®) that enrolled a total of 42 patients with human epidermal growth factor receptor 2 (“HER2”) negative breast cancer.

ME-344 Scientific Overview: Cancer Metabolism

Tumor cells often display a high metabolic rate to support cell division and growth. This heightened metabolism requires a continual supply of energy in the form of ATP. The two major sources of ATP are the specialized cellular organelles termed mitochondria and through the metabolism of carbohydrates via the glycolysis pathway, which is frequently upregulated in cancer cells in a phenomenon called the Warburg Effect.

ME-344 was identified through a screen of more than 400 new chemical structures originally created based on the central design of naturally occurring plant isoflavones. We believe that some of these synthetic compounds, including our drug candidate ME-344, interact with specific mitochondrial enzyme targets, resulting in the inhibition of ATP generation. When these compounds interact with their target, a rapid reduction in ATP occurs, which leads to a cascade of biochemical events within the cell and ultimately to cell death.

Clinical Program

ME-344 demonstrated evidence of single agent activity against refractory solid tumors in a Phase 1 trial, and in pre-clinical studies tumor cells treated with ME-344 resulted in a rapid loss of ATP and cancer cell death. In addition to single agent activity, ME-344 may also have significant potential in combination with anti-angiogenic therapeutics. In pre-clinical studies, it was shown that one outcome of anti-angiogenics was to reduce the rate of glycolysis in tumors as a mechanism to slow tumor growth. However, tumor metabolism was able to shift to mitochondrial metabolism for energy production to support continued tumor proliferation. In such cases of tumor plasticity in the presence of treatment with anti-angiogenics, targeting the alternative metabolic source with ME-344 may open an important therapeutic opportunity.

Support for this combinatorial use of ME-344 was first published in the June 2016 edition of Cell Reports; pre-clinical data from a collaboration with the Spanish National Cancer Research Centre in Madrid demonstrated mitochondria-specific effects of ME-344 in cancer cells, including substantially enhanced anti-tumor activity when combined with agents that inhibit the activity of VEGF. These data demonstrating the potential anti-cancer effects of combining ME-344 with a VEGF inhibitor due to an inhibition of both mitochondrial and glycolytic metabolism provided a basis for commencement of an investigator-initiated trial of ME-344 in combination with bevacizumab in HER2 negative breast cancer patients.

Results published in the November 2019 issue of Clinical Cancer Research from a multicenter, investigator-initiated, randomized, open-label, clinical trial that evaluated the combination of ME-344 and bevacizumab in 42 women with early HER2-negative breast cancer further support the combinatorial use of ME-344 with anti-angiogenic therapeutics.

The primary objective of the trial was to show proof of ME-344 biologic activity as measured by Ki67 reductions in the presence of the nuclear protein Ki67 (expression of which is strongly associated with tumor cell proliferation and growth) from days 0 to 28 compared to the control group who received bevacizumab alone. Secondary objectives included determining whether ME-344 biologic activity correlates with vascular normalization. The data demonstrate significant biologic activity in the ME-344 treatment group:

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Treatment was generally well tolerated; three grade 3 adverse events of high blood pressure were reported, two in the ME-344 arm and one in the bevacizumab monotherapy arm.

Results from our earlier, first-in-human, single-agent Phase 1 clinical trial of ME-344 in patients with refractory solid tumors were published in the April 1, 2015 edition of Cancer. The results indicated that eight of 21 evaluable patients (38%) treated with ME-344 achieved stable disease or better, including five who experienced progression-free survival that was at least twice the duration of their last prior treatment before entry into the trial. In addition, one of these patients, a heavily pre-treated patient with small cell lung cancer, achieved a confirmed partial response and remained on study for two years. ME-344 was generally well tolerated at doses equal to or less than 10 mg/kg delivered on a weekly schedule for extended durations. Treatment-related adverse events included nausea, dizziness and fatigue. Dose-limiting toxicities were observed at both the 15 mg/kg and 20 mg/kg dose levels, consisting primarily of grade 3 peripheral neuropathy. We are planning to advance ME-344 in combination with the anti-angiogenic antibody bevacizumab in a Phase 1b study evaluating patients with relapsed colorectal cancer in the first half of calendar year 2023.

Additionally, ME-344 may also have clinical potential against hematological malignancies. At the AACR Annual Meeting 2022, a poster presentation reported results from preclinical studies exploring the ability of ME-344 to enhance the activity of venetoclax against AML. Data from the in vitro and in vivo preclinical studies evaluating the combination of ME-344 with venetoclax in standard-of-care-resistant AML cell lines and relapsed or refractory AML patient samples suggest that ME-344, both alone and in combination with venetoclax, inhibits purine biosynthesis, suppresses oxidative phosphorylation, induces apoptosis and decreases MCL-1, which together target metabolic vulnerabilities of AML cells. The data demonstrated that ME-344 and venetoclax prolong survival in MV4-11 and MV4-11/AraC-R-derived xenograft AML models. The poster concludes that ME-344 enhances venetoclax activity against AML cells including resistant AML.

Results of Operations

Comparison of three months ended September 30, 2022 and 2021

Revenue: We recognized revenue of $8.7 million for the three months ended September 30, 2022 compared to $7.8 million for the three months ended September 30, 2021. Revenue increased as a result of higher progress towards completion of our performance obligations under our KKC Commercialization Agreement, offset by decreased reimbursement of expenses from KKC due to research and development activity related to zandelisib.

Research and Development: The following is a summary of our research and development expenses to supplement the more detailed discussion below. The dollar values in the following table are in thousands.