OVERVIEW
We are a biopharmaceutical company focused on the acquisition, development and commercialization of innovative and medically important pharmaceutical products for the treatment of cancer and other underserved therapeutic needs. We aim to acquire rights to these technologies by licensing or otherwise acquiring an ownership interest, funding their research and development and eventually out-licensing or bringing the technologies to market. Currently we are developing ublituximab (TGTX-1101), a novel, third generation monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found on mature B-lymphocytes.
Developed for the treatment of B-cell proliferative disorders, including Non-Hodgkin’s Lymphoma (“NHL”) and Chronic Lymphocytic Leukemia (“CLL”), anti-CD20 antibodies target and aid in the depletion of B-cell lymphocytes. Anti-CD20 antibodies have also been shown to be effective in treating select autoimmune diseases such as Rheumatoid Arthritis (“RA”) and Systemic Lupus Erythematosus (“SLE”), along with the neurological disorder Multiple Sclerosis (“MS”).
TGTX-1101 has demonstrated both safety and preliminary clinical efficacy in a recently completed Phase I clinical trial in relapsed and refractory patients with Chronic Lymphocytic Leukemia (“CLL”).
Our portfolio of product candidates is summarized below:
The Company has discontinued development of the topical GEL for the treatment of mild psoriasis.
We also actively engage in business development activities that include seeking strategic relationships for our product candidates, as well as evaluating compounds and companies for in-licensing or acquisition. To date, we have not received approval for the sale of any of our drug candidates in any market and, therefore, have not generated any product sales from our drug candidates.
CORPORATE INFORMATION
We were incorporated in Delaware in 1993. Our executive offices are located at 787 Seventh Avenue, New York, New York 10019. Our telephone number is 212-554-4484, and our e-mail address is info@tgtxinc.com.
We file reports with the SEC on an annual basis using Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.. You may read and copy any such reports and amendments thereto at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 on official business days during the hours of 10:00 a.m. to 3:00 p.m. Please call the SEC at 1-800-SEC-0330 for information on the Public Reference Room. Additionally, the SEC maintains a website that contains annual, quarterly, and current reports, proxy statements, and other information that issuers (including us) file electronically with the SEC. The SEC’s website address is http://www.sec.gov.
RECENT DEVELOPMENTS
Exchange Transaction with TG Therapeutics, Inc. and its majority shareholders
On December 29, 2011, the Company entered into and consummated an Exchange Transaction Agreement with Opus Point Partners, LLC (“Opus”) and TG Therapeutics, Inc. (“TG”) (the “Agreement”).
Under the Agreement, Opus exchanged (the “Exchange Transaction”) its shares of common stock in TG (“TG Common Stock”) for shares of Series A preferred stock in the Company (“Company Preferred Stock”). The exchange ratio was $2.25, divided by $.04, divided by 500. As a result Opus received 281,250 shares of Company Preferred Stock. Furthermore, the Agreement provides that each holder of restricted TG Common Stock outstanding on December 29, 2011 receive restricted shares of Company Preferred Stock using the same exchange ratio, and such shares will carry the same restrictions that existed prior to the execution of the Agreement.
As a result of the Agreement, TG Therapeutics, Inc. became a majority-owned subsidiary of the Company. Since the stockholders of TG received the majority of the voting shares of the Company, the merger was accounted for as a reverse acquisition whereby TG was the accounting acquirer (legal acquiree) and the Company was the accounting acquiree (legal acquirer) under the acquisition method of accounting.
In April 2011, TG acquired from LFB Biotechnologies, a fully owned subsidiary of France based LFB S.A., an option (the “License Option”) for exclusive worldwide rights (except France/Belgium) to develop and market ublituximab (“LFB-R603”), a monoclonal antibody that targets a specific epitope on the B-cell lymphocyte CD20 antigen.
On January 30, 2012, TG Therapeutics exercised the License Option and entered into a license agreement with GTC Biotherapeutics, Inc., LFB Biotechnologies S.A.S. (“LFB”), and LFB/GTC LLC, all wholly-owned subsidiaries of LFB Group. In connection with the license agreement, TG Therapeutics issued 7,368,000 shares of its common stock to LFB, and the Company agreed to contribute $15 million, less applicable fees and expenses associated with the financing, to TG Therapeutics to fund the development of ublituximab under the license agreement, in exchange for 7,500,000 shares of TG Therapeutics common stock.
In addition, in connection with the issuance of 7,368,000 TG Therapeutics shares, the Company and TG Therapeutics provided LFB Group, the option to, in its sole discretion, elect to convert all, and not less than all, of the TG Therapeutics’ shares into 828,900 shares of Manhattan’s Series A Preferred Stock, $0.001 par value per share. Each share of Manhattan preferred stock shall be convertible into 500 shares of Manhattan’s common stock, $0.001 par value per share, in accordance with the terms of the Series A Preferred Stock Certificate of Designation filed with the Secretary of State of the State of Delaware on December 29, 2011. In addition, should Manhattan have sufficient common stock authorized and available for issuance at the time the Purchaser elects to convert, then Purchaser will receive such number of shares of Manhattan Common Stock into which the Manhattan Preferred Stock is then convertible. This option may be exercised by LFB Group at any time within 60 days of the filing of Manhattan’s Annual Report on Form 10-K for the year ended December 31, 2011.
PRODUCTS UNDER DEVELOPMENT
Overview
TGTX-1101 (“LFB-R603” or “R603”) is a chimeric murine/human monoclonal antibody with the generic name “ublituximab” that targets a unique epitope on the CD20 antigen found on the surface of B-cell lymphocytes developed to aid in the depletion of circulating B-cells. We hold exclusive worldwide rights (excepting France/Belgium) to develop and commercialize ublituximab for all indications, including the treatment of cancer and autoimmune diseases such as Non-Hodgkin’s Lymphoma (“NHL”) and Chronic Lymphocytic Leukemia (“CLL”).
Multiple preclinical studies both in vitro and in vivo produced data that support the activity and potency of ublituximab as an efficient and selective B-cell targeting anti-CD20 antibody with the ability to effectively deplete B lymphocytes in both malignant laboratory cell models as well as NHL and CLL patient donor cell lines. B-cell depletion has been demonstrated to occur through three primary mechanisms: direct or programmed cell death (“DCD” or “PCD”), complement dependent cytotoxicity (“CDC”), and antibody dependent cell-mediated cytotoxicity (“ADCC”) - the primary mechanism for which ublituximab has been bio-engineered for enhanced activity.
A two part, dose escalating Phase I clinical trial was recently completed in France in which ublituximab was introduced in relapsed or refractory CLL patients. In Part 1 of the study, 21 CLL patients in escalating dosage cohorts received once weekly infusions of ublituximab over the course of 4 weeks, with an additional 12 patients in Part 2 of the study receiving weekly infusions of ublituximab at a higher flat dose for 8 weeks. According to the investigators, results of Part 2 indicate single agent ublituximab therapy was well tolerated with primary adverse events including infusion related reactions, neutropenia, pyrexia and thrombocytopenia. Though the primary endpoint of this Phase I clinical study was to assess the safety and tolerability of ublituximab in CLL patients, robust B-cell depletion and an encouraging rate of partial responses may suggest preliminary evidence of efficacy. A portion of the data from Part 2 of this study was presented at the 53rd Annual American Society of Hematology Meeting in San Diego, CA. The Company intends to utilize the data generated from patients in the recently completed Phase I clinical trial to design and conduct future Phase I, II and III studies in the United States and internationally.
Manufacturing of ublituximab is currently performed by our partner, LFB Biotechnologies, using mammalian cells with plans to explore a second manufacturing method utilizing a transgenic animal vector developed by GTC Biotherapeutics, a wholly owned subsidiary of LFB S.A. To date, both LFB and GTC have invested in excess of a combined $60 million in direct expenses related to the development of ublituximab.
Pre-Clinical Data Overview
The mechanism of action of anti-CD20 antibodies, including rituximab and ublituximab has been elucidated and detailed in numerous academic and clinical studies. Upon conjugation of the antibody to the CD20 surface antigen, rituximab has been found to deplete B-lymphocytes through three primary mechanisms: direct cell death (“DCD” or “programmed cell death” or “PCD”), complement dependent cytotoxicity (“CDC”), and antibody dependent cell-mediated cytotoxicity (“ADCC”).
In programmed cell death, the binding of the antibody ligand to the CD20 antigen leads to the activation of apoptotic signaling pathways which include caspase-3, caspase-9, and the bcl-2 family of proteins. The resulting signaling cascade induces apoptosis of the B-lymphocyte, and has been found to be enhanced by hyper-crosslinking of antibodies and the binding of the Fc region of the antibody to an FcγR receptor on effector cells such as natural killer (“NK”) cells, macrophages, neutrophils or monocytes. Additionally anti-CD20 antibodies such as rituximab can induce non-apoptotic programmed cell death via vacuolar or lysosomal mechanisms.
Cell depletion via complement dependent cytotoxicity occurs when binding of the antibody to the CD20 epitope leads to activation of the complement immune system. The C1q component of the complement system binds to the Fc portions of the complexed anti-CD20 antibody, triggering a “complement cascade” of proteolytic events eventually leading to the formation of a membrane attack complex (“MAC”) which lyses the cell via osmotic influx. Alternatively, the complement cascade can trigger the opsonization of the B-cell by the C3b component which strongly targets the cell for phagocytosis by macrophages and neutrophils.
Antibody dependent cellular cytotoxicity is a mechanism that is dependent on interactions between the Fc region of the antibody and the FcγR receptors on immune system effector cells, most notably the FcγRIIIA (“CD16”) receptor found on NK cells. Fc-FcγR interactions trigger cells to release pre-forming proteins and proteases resulting in B-cell death. Empirically, ADCC has been the most heavily described and studied mechanism of action, and the subsequent focal point in the research and development of improved CD20 targeted antibodies.
Ublituximab is a type I chimeric murine/human IgG1 monoclonal antibody with an engineered Fc region designed specifically to induce higher ADCC activity in comparison to rituximab. The antibody consists of 37% murine variable regions fused to 63% human constant regions.
In vitro preclinical testing has confirmed the superior ADCC induction ability of ublituximab over rituximab (see Figure 1). Tested on CLL patient donor B-cell samples at concentrations of 50 ng/mL, ublituximab produces ADCC activity of 35%, while rituximab was found to exhibit ADCC levels of only 5% at the same concentration.
Ublituximab has also demonstrated significant CDC activity in vitro, competitive with rituximab when tested in an assay utilizing both Raji and Wil2S B-cell Lymphoma cell lines. Further in vitro studies have been conducted to evaluate the mechanism by which ublituximab affects apoptotic signaling pathways. Binding of ublituximab to the CD20 antigen was found to inhibit the NF-kB survival pathway which is often seen constitutively active in cancer cell lines, including NHL (see Figure 2). Deactivation of the NF-kB survival pathway causes inhibition of the Snail transcription factor which, when active, plays a role in repressing RKIP and PTEN, two pro-apoptotic genes. Once Snail is inactivated, RKIP and PTEN expression is unrepressed, leading to further inhibition of the NF-kB pathway by RKIP and inhibition of the of the PI3/Akt survival pathway by PTEN. The end result of these signaling alterations by ublituximab is the sensitization of the cell to apoptotic factors such as the TNF-related apoptosis inducing ligand (“TRAIL”) and chemotherapeutic agents. The Company believes these findings may suggest an enhanced synergistic ability of ublituximab when delivered in combination with chemotherapeutic agents in the treatment of B-cell proliferative diseases, leading to improved therapeutic outcomes.
Ublituximab was also studied in vivo in severe combined immunodeficient (“SCID”) mice and cynomolgus monkeys. SCID mice with Mantle Cell Lymphoma (“MCL”) xenografts displayed markedly delayed tumor volume growth when treated with ublituximab compared with equivalent doses of rituximab. The inhibition of tumor growth by ublituximab is greater than rituximab at 4 dosage levels ranging from 3 mg/kg to 60 mg/kg (see Figure 3).
In further in vivo studies, B-cell lymphocyte levels were observed in cynomolgus monkeys administered a single IV injection of ublituximab at varying concentrations. At the lowest dosage point of 0.3 mg/kg, depletion of B-cell lymphocytes was sustained for 77 days and recovered to only 16% of basal level at day 130 (see Figure 4).
Additional pre-clinical studies of ublituximab, including in vivo assays in combination with chemotherapeutic agents, were presented in abstract and poster form at the 53rd Annual American Society of Hematology Meeting in San Diego, CA in December 2011. As a result of the elucidation of the mechanism of action of ublituximab, and observance of its performance in various in vitro and in vivo assays in comparison to the gold standard, rituximab, the Company believes ublituximab is an active and potent CD20 targeted antibody.
A multicenter, open-label Phase I clinical trial of ublituximab was recently completed which aimed to assess the safety, tolerability, and efficacy of ublituximab in patients with relapsed or refractory CLL. This two part, first-in-man, dose escalating trial was conducted in 9 centers in France with preliminary results from Parts 1 and 2 presented at the 52nd and 53rd Annual American Society of Hematology (“ASH”) meetings.
The study included patients who had relapsed or refractory CLL following at least one prior course of fludarabine and were between the ages of 18 and 80 years old. Patients were excluded if they had prior treatment with any anti-CD20 monoclonal antibody within the 6 months prior to enrollment, displayed a creatinine clearance level below 60 mL/mn, or had an ALT and/or AST level greater than 1.5N.
In Part 1 of this trial, 21 patients were enrolled with a median age of 62 years. Disease status included 20 CLL patients relapsed and 1 CLL patient refractory to treatment with 12 patients (57%) having had prior exposure to rituximab. All patients (100%) displayed lymph node enlargement with 8 patients (38%) considered “Bulky” (>5cm).
The study regimen in Part 1 involved 21 patients receiving infusions of ublituximab at a dose ranging from 5mg to 450mg once weekly over the course of 4 weeks. Premedication consisted of allopurinol, dexchlorpheniramine and paracetamol combined with methylprednisolone at 1 mg/kg prior to the first two infusions. Patients were assessed at week 16 with a follow up assessment at week 24 for those patients displaying a partial response (“PR”) at week 16.
The patients were divided into 5 dosing cohorts with dosages escalated based on safety in a 3+3 design. Total dosage over 4 weeks ranged from 75 mg in cohort A to 1650 mg in cohort E (see Figure 5).
Adverse events were consistent with those exhibited by other anti-CD20 antibodies and consisted mostly of infusion related reactions, infection, headache, neutropenia, thrombocytopenia and transient elevation of AST/ALT levels. Assessing patients according to the National Cancer Institute-Working Group (“NCI/WG”) CLL guidelines, 5 out of 18 (28%) of evaluable patients were in partial response (“PR”) at week 16 in Part 1, with three of these five having confirmed PR at week 24.
Part 2 of this study evaluated the safety and efficacy profile of ublituximab when administered in an 8-dose regimen (150mg initial dose, followed by 7 doses of 450mg). Inclusion criteria were the same as Part 1, with 12 patients enrolled, having a median age of 69.5 years, and a median of 3 prior therapies. Seven of these patients had received at least one prior rituximab containing regimen.
Adverse events were similar to Part 1 of this study, with the most frequent being infusion related reactions, neutropenia, pyrexia, and thrombocytopenia. All AEs were reversible spontaneously or with supportive care.
Rapid, near total blood lymphocyte depletion was observed in all patients except one and was sustained up to 10 months after the last infusion of ublituximab. With efficacy assessment at month 4 according to NCI-WG guidelines following treatment, ublituximab was found to produce a durable PR in 5/11 (45%) evaluable patients. The Company intends to pursue additional Phase I and II trials to explore the use of ublituximab in CLL and other B-cell proliferative diseases.
Market Opportunity
Anti-CD20 antibodies have been approved and studied in a variety of diseases falling into several therapeutic areas including oncology, autoimmune disorders, and neurologic disease, creating a market with worldwide sales of roughly $7 Billion in 2010. NHL and CLL are the most common B-cell proliferative diseases for which rituximab, the first anti-CD20 antibody approved by the FDA, is the current gold standard treatment. While the addition of rituximab to chemotherapeutic treatment of NHL has dramatically improved patient outcomes, there are still many drawbacks to the current standard of care.
Rituximab’s usage as a single agent for lymphoma has proved to be largely ineffective with half of patients refractory to treatment or relapsing shortly following therapy. Patients with CLL have been shown to be poor responders to rituximab treatment, an outcome attributed to weak expression of the CD20 cell surface antigen on B-CLL lymphocytes.
Rituximab resistance is becoming an increasing concern for clinicians as relapsing patients are exposed to multiple lines of rituximab containing regimens to treat recurrence of disease. Approximately half of patients initially responsive to their first exposure to rituximab do not respond upon retreatment.
We believe these factors contribute to an immediate and sustained need for anti-CD20 monoclonal antibody that is differentiated and therapeutically superior to the gold standard rituximab in order to extend and enhance CD20 therapy as it stands today.
AST-726 is a nasally delivered form of hydroxocobalamin for the treatment of Vitamin B12 deficiency. The Company acquired global rights to AST-726 as part of the Ariston acquisition. AST-726 has demonstrated pharmacokinetic equivalence to a marketed intramuscular injection product for Vitamin B12 remediation. The Company believes that AST-726 may enable both a single, once-monthly treatment for maintenance of normal Vitamin B12 levels in deficient patients, and more frequent administration to restore normal levels in newly diagnosed B12 deficiency. Further, we believe that AST-726 could offer a convenient, painless, safe and cost-effective treatment for Vitamin B12 deficiency, eliminating the need for intramuscular injections.
The Company has reached an agreement with the U.S. Food and Drug Administration (FDA) on a special protocol assessment (SPA) for the design of a Phase 3 clinical trial of AST-726 in patients with a confirmed medical history of Vitamin B12 deficiency. The Company has designed an open label, multicenter study for investigating the maintenance of trough serum cobalamin levels after monthly administration of AST-726, with a goal of enrolling approximately 75 subjects and a goal of having 53 evaluable subjects complete the study.
The Company is currently reviewing its development plans for AST-726, which may include: (1) ceasing further development and attempting to sell or license AST-726, (2) continuing development as originally contemplated under the SPA or (3) evaluating and implementing alternative development plans. No decision has been made as to which approach to execute. A final decision is expected to take 6-12 months, but may occur earlier or later.
The Company has a sponsored research arrangement for AST-915, an orally delivered treatment for essential tremor, which is currently ongoing and we expect to conclude in June 2012. It is unlikely that the Company will continue the development of AST-915 thereafter, but a final determination will be reserved until development activities have concluded.
COSTS AND TIME TO COMPLETE PRODUCT DEVELOPMENT
The information below provides estimates regarding the costs associated with the completion of the current development phase and our current estimated range of the time that will be necessary to complete that development phase for our key pipeline products. We also direct your attention to the risk factors which could significantly affect our ability to meet these cost and time estimates found in this report in Item 1A under the heading “Risks Related to Manhattan’s Business and Industry.”
Completion dates and costs in the above table are estimates due to the uncertainties associated with clinical trials and the related requirements of development. In the cases where the requirements for clinical trials and development programs have not been fully defined, or are dependent on the success of other trials, we cannot estimate trial completion or cost with any certainty. The actual spending on each trial during the year is also dependent on funding. We therefore direct your attention to Item 7 under the heading “Liquidity and Capital Resources.”
INTELLECTUAL PROPERTY AND PATENTS
General
Our goal is to obtain, maintain and enforce patent protection for our products, formulations, processes, methods and other proprietary technologies, preserve our trade secrets, and operate without infringing on the proprietary rights of other parties, both in the United States and in other countries. Our policy is to actively seek to obtain, where appropriate, the broadest intellectual property protection possible for our product candidates, proprietary information and proprietary technology through a combination of contractual arrangements and patents, both in the U.S. and elsewhere in the world.