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Organization and Description of Business
12 Months Ended
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business

1. Organization and Description of Business

 

Description of the Business

 

Humanigen, Inc. (the “Company”) was incorporated on March 15, 2000 in California and reincorporated as a Delaware corporation in September 2001 under the name KaloBios Pharmaceuticals, Inc. Effective August 7, 2017, the Company changed its legal name to Humanigen, Inc.

 

The Company is a clinical stage biopharmaceutical company, developing its portfolio of immuno-oncology and immunology monoclonal antibodies. The Company is focusing its efforts on the development of its lead product candidate, lenzilumab™, its proprietary Humaneered® (“Humaneered”) anti-human granulocyte-macrophage colony-stimulating factor (“GM-CSF”) monoclonal antibody. Lenzilumab is a monoclonal antibody that has been demonstrated in animal models to neutralize GM-CSF, a cytokine that we believe is of critical importance in the hyperinflammatory cascade, sometimes referred to as cytokine release syndrome (“CRS”) or cytokine storm, associated with COVID-19, chimeric antigen receptor T-cell (“CAR-T”) therapy and acute Graft versus Host Disease (“GvHD”) associated with bone marrow transplants. GM-CSF neutralization with lenzilumab has been shown to reduce downstream inflammatory cytokines, prevent CRS and reduce its associated neurologic toxicities in-vivo in validated preclinical human xenograft models (Blood. 2019 Feb 14;133(7):697-709).

 

Lenzilumab has completed full enrollment in a Phase 3, multi-center, double-blind, placebo-controlled potential registrational trial for hospitalized, hypoxic patients with COVID-19 pneumonia. If the data from the trial are favorable, based on the Company’s discussions with the U.S. Food and Drug Administration (“FDA”), including a Type B meeting, and in consultation with the regulatory experts at Operation Warp Speed, the Company plans on filing an Emergency Use Authorization (“EUA”) application in the second quarter of 2021. If the EUA is granted, the Company could begin to commercialize lenzilumab for the treatment of hospitalized COVID-19 pneumonia patients. The Company also intends to file a Biologics License Application (“BLA”) in 2021, again assuming the data from the Phase 3 trial are favorable and support such an application. Based on discussions with FDA, the Company understands that a BLA will require it to generate and present more clinical and manufacturing data than would be required to support an EUA. If the ACTIV-5/BET study described below is successful and completed on a timely basis, the Company plans to include the results in its BLA filing. COVID-19 infections are widespread and as of February 26, 2021 in the United States, there were over 28 million cases, nearly 1.8 million hospitalizations and over 510 thousand deaths.. Several vaccines have been developed which show efficacy in excess of 90%, however the slow rollout of inoculations and the emergence of numerous COVID-19 variants lead us to believe the need for therapeutics to treat COVID-19 currently exists and will continue to exist.

 

Lenzilumab has been selected to be part of the ACTIV-5 “Big Effect Trial” (ACTIV-5/BET NCT 04583969). This study is sponsored by the National Institutes of Health (“NIH”). ACTIV-5/BET is designed to determine whether certain approved therapies or investigational drugs in late-stage clinical development show promise against COVID-19 and, therefore, merit advancement into larger clinical trials. ACTIV-5/BET, currently has 17 active U.S. sites enrolling and is expected to enroll in up to 40 U.S. sites, will evaluate lenzilumab with remdesivir, compared to placebo and remdesivir, in hospitalized COVID-19 patients, with approximately 100 patients expected to be assigned to each study arm. The Company is providing lenzilumab for the study, which is fully funded by NIH.

 

Lenzilumab is also being studied in a multicenter phase 1b/2 potential registrational trial as a sequenced therapy with Yescarta® (axicabtagene ciloleucel) to reduce CRS and neurotoxicity in patients with relapsed or refractory diffuse large B-cell lymphoma (“DLBCL”) (NCT 04314843). This trial currently has 10 active sites and is being conducted in partnership with Kite Pharmaceuticals, Inc., a Gilead company (“Kite”), which markets Yescarta. The Company is also in the final planning stages for a Phase 2/3 trial for lenzilumab to treat patients who have undergone allogeneic hematopoietic stem cell therapy (“HSCT”) who are at high and intermediate risk for acute GvHD. The trial is expected to be conducted by the IMPACT Partnership, a collection of 22 stem cell transplant centers located in the United Kingdom.

 

The Company’s proprietary, patented Humaneered technology platform is a method for converting existing antibodies (typically murine) into engineered, high-affinity human antibodies designed for therapeutic use, particularly with acute and chronic conditions. The Company has developed or in-licensed targets or research antibodies, typically from academic institutions, and then applied our Humaneered technology to produce them. Lenzilumab and the Company’s other two product candidates, ifabotuzumab and HGEN005, are Humaneered monoclonal antibodies. The Company’s Humaneered antibodies are closer to human antibodies than chimeric or conventionally humanized antibodies and have a high affinity for their target but low immunogenicity. The Company believes its Humaneered antibodies offer additional advantages, such as high potency, a slow off-rate and a lower likelihood to induce an inappropriate immune response or infusion related reactions.

 

Our Pipeline

 

The Company’s lenzilumab-based clinical-stage pipeline comprises a Phase 3 potential registration study in COVID-19 which has fully enrolled, the NIH-sponsored and funded ACTIV-5/BET program in COVID-19, a currently enrolling Phase 1b/2 study (ZUMA-19) as sequenced therapy of lenzilumab and Yescarta, a planned Phase 2/3 study in acute GvHD, and a planned Phase 2 study in CMML, the latter two of which the Company expects will be majority funded by partners. While the majority of the Company’s clinical programs involve lenzilumab, it has also fully enrolled an ifabotuzumab Phase 1 study in GBM.

 

Except for the potential of lenzilumab for COVID-19 under an EUA, the Company’s product candidates are in the clinical stage of development and will require substantial time, resources, research and development, and regulatory approval prior to commercialization. Furthermore, it may be years before any of its products are approved for use, if at all. The Company’s current pipeline is depicted below:

 

1 Phase 3 may not be necessary for approval in ZUMA-19; precedent is CAR-Ts to date have been approved on Phase 2 data

2 UK

3 US, EU, Australia

 

Liquidity and Going Concern

 

The Consolidated Financial Statements for the years ended December 31, 2020 and 2019 were prepared on the basis of a going concern, which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business.  However, the Company has incurred net losses since its inception and has negative operating cash flows. These conditions raised substantial doubt about the Company’s ability to continue as a going concern as described in the Company’s historical Condensed Consolidated Financial Statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.

 

The Company has been continuing to advance its efforts to submit an application for EUA for lenzilumab, with potential product launch subject to EUA being granted as early as the second quarter of 2021, in the event data from the Phase 3 clinical trial are favorable. The Company currently anticipates that top-line data from the trial will be available in the first quarter of 2021. To support the potential launch of lenzilumab under an EUA, the Company has entered into agreements with several organizations for clinical trial services, contract manufacturing services and commercialization services, as more fully described under “Item 1. Business—Manufacturing and Raw Materials.” The agreements currently in effect commit the Company to spend approximately $58 million during the first quarter of 2021 in support of these efforts. The Company expects to be able to fund these cash commitments from its cash and cash equivalents on hand, which approximated $67.7 million as of December 31, 2020, although it may pursue other funding opportunities on an opportunistic basis to support our liquidity.

 

The Company is working with its existing contract manufacturing organizations and with additional contract manufacturing organizations to bolster its ability to supply lenzilumab in the event of receipt of EUA. Most of these manufacturing agreements, like the ones currently in place, are expected to require payment of upfront fees upon execution and further payments against performance of the manufacturing services to be provided, often over a lengthy performance period. Given the competitive environment, it is not possible for the Company to estimate the aggregate amount of these potential future payments or the timing in which they may be made. If the COVID-19 clinical study is successful and an EUA is granted in the second quarter of 2021, the Company expects to be able to satisfy the bulk of the cash requirements associated with its manufacturing commitments from revenues from the commercial sale of lenzilumab, supplemented as necessary with proceeds from the sale of its equity securities; the incurrence of debt; upfront and milestone payments from licensees; and government funding or financial support, if offered.

 

Following completion of the 2020 Private Placement in June 2020 and the 2020 Underwritten Public Offering in September 2020, as well as net proceeds received from sales of its common stock under the Controlled Equity Offering Sales Agreement of $36.2 million (unaudited), as of March 5, 2021, the Company had cash and cash equivalents of $74.3 million (unaudited). Accordingly, the Company re-evaluated its potential going concern disclosure requirements in accordance with ASC 205-40-50 as of the date of filing. Upon completion of this evaluation, the Company has concluded that its existing cash and cash equivalents have alleviated that prior substantial doubt about the Company’s ability to continue as a going concern.

 

The Company believes that its cash and cash equivalents will be sufficient to fund its planned operations and capital expenditure requirements for at least 12 months. This evaluation is based on relevant conditions and events that are currently known or reasonably knowable. As a result, the Company could deplete its available capital resources sooner than it currently expects, and a delay in obtaining or failure to obtain an EUA could further constrain its cash resources. The Company has based these estimates on assumptions that may prove to be wrong, and its operating projections, including its projected net revenue following the potential receipt of an EUA for lenzilumab in COVID-19 patients, may change as a result of many factors currently unknown to it. If the Company is unable to raise additional capital when needed or on acceptable terms, it would be forced to delay, reduce, or eliminate its research and development programs and commercialization efforts. Alternatively, the Company might raise funds through strategic collaborations, public or private financings or other arrangements. Such funding, if needed, may not be available on favorable terms, or at all. The financial statements included herein do not include any adjustments that might result from the outcome of these uncertainties.