XBiotech Inc.

XBiotech reported first-quarter 2017 operating expenses of about $10.9 million, roughly $700,000 above the first quarter of 2016. Cash and cash equivalents were approximately $54.6 million at March 31, 2017, and the company said its current burn rate supports operations into the third quarter of 2018. During the quarter, spending included about $3.8 million for contract and clinical operations, about $2.7 million for personnel, $1.2 million for laboratory supplies, and about $1.5 million of trailing construction/manufacturing costs. Management reiterated that the global Phase 3 colorectal cancer study has completed enrollment with 640 patients and that the second interim analysis is scheduled for mid-June. No revenue, EPS, or gross margin figures were stated in the transcript.

John Simard focused on the EMA decision process and argued strongly that the company’s Phase 3 colorectal cancer data were compelling and aligned with prior EMA guidance. He emphasized that the trial met its planned primary outcome on symptom control and said patients achieving that endpoint also showed better overall survival, less tumor progression, and fewer serious adverse events. His tone was defiant and highly optimistic, especially around reexamination, patient advocacy support, and the broader potential of the company’s antibody platform.

The financial update was brief and centered on spending and liquidity. XBiotech said first-quarter operating expenses were about $10.9 million, up about $700,000 year over year, with the largest use of cash in contract and clinical operations at about $3.8 million, followed by personnel at about $2.7 million, laboratory supplies at $1.2 million, and construction/manufacturing costs of about $1.5 million. Management also noted a $32 million registered direct offering in the prior quarter and said cash of $54.6 million should fund the business into the third quarter of 2018.

Analysts asked whether the ongoing U.S. colorectal trial could be used in the EMA reexamination and about the design of the future staph aureus Phase 3 trial after earlier arm imbalances. Management said the EMA reexamination process could potentially consider the ongoing U.S. study, but argued it may not be necessary because the European study already met its primary endpoint. On staph aureus, they acknowledged the Phase 1/2 trial had small numbers and imbalances, and said the Phase 3 study will use larger numbers and one-to-one randomization to reduce that risk.