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On Course 2020:

Letter to Shareholders

This past year we made significant progress in navigating a course mapped out to develop innovative therapies that hold potential to deliver improved benefits to patients with cancer.

Dear Shareholders

This past year we made significant progress in navigating a course mapped out to develop innovative therapies that hold potential to deliver improved benefits to patients with cancer. Our lead drug-candidate and strategic focus remains firmly on zandelisib. Formerly called ME-401, zandelisib is a selective PI3K delta inhibitor which continues to display best-in-class potential in patients with B-cell malignancies.

Zandelisib is being evaluated in our Phase 2 TIDAL study intended to support an accelerated approval marketing application with FDA for patients with relapsed/refractory follicular lymphoma. Follicular lymphoma, and other B-cell malignancies more broadly, are generally not curable and there continues to be a significant need for new treatments.

Perhaps chief among our zandelisib achievements this past year is the global development and commercialization agreement we entered with Kyowa Kirin, Co., Ltd. The agreement, which came with a $100 million upfront payment from Kyowa Kirin, validates the potential for zandelisib to be best-in-class and is key to broadly developing and commercializing zandelisib inside and outside the U.S.

Two of the key benefits of the alliance with Kyowa Kirin are the ability to explore zandelisib’s potential more expeditiously beyond the current TIDAL study and the solid foundation it provides to advance the staged build-out of our commercial infrastructure. Coupled with the medical need across B-cell malignancies and the clinical promise zandelisib has shown to date, we are positioned to make the most of the investment in, and the promise of, zandelisib for patients while creating value for shareholders.

To that end, we’ve announced the addition of an arm to the TIDAL study to evaluate patients with marginal zone lymphoma, another B-cell malignancy. We’ve also announced our plans to start a confirmatory Phase 3 trial evaluating patients with follicular lymphoma and marginal zone lymphoma — this is required by FDA in connection with the accelerated approval of a drug candidate.

Our other development programs include voruciclib, a CDK inhibitor that we believe has potential to improve on existing treatments for B-cell malignancies and AML, particularly in combination with Venclexta®, an FDA approved BCL-2 inhibitor. We are initially studying voruciclib as a monotherapy in patients with relapsed or refractory B-cell malignancies or AML and then plan to evaluate voruciclib in combination with Venclexta to confirm synergies observed in preclinical studies and to advance the opportunity for combination treatments across multiple indications.

Next is ME-344, our novel and tumor selective mitochondrial inhibitor, which is understood to block ATP production in the mitochondria. ATP is a source of energy for many cell processes. We previously reported promising results from a clinical trial in women with breast cancer showing that when ME-344 is given in combination with Avastin® there was evidence of biologic activity as measured by a reduction in tumor proliferation. The next step for ME-344 is an upcoming advisory board meeting to identify and consider the most efficient options for moving ME-344 forward.

Our fourth clinical candidate is pracinostat, an oral HDAC inhibitor that we licensed to Helsinn Group in 2016. As announced in July 2020, a Phase 3 study of pracinostat in AML sponsored by Helsinn was terminated based on findings from an interim futility analysis. Pracinostat continues to be evaluated in a Phase 2 trial in patients with high or very high-risk MDS. Over the coming months, Helsinn will determine whether to continue its development.

This past fiscal year we also started to experience a world impacted by the COVID-19 pandemic. At MEI, we were proactive and successful to date in taking steps to adjust our business. Specifically with respect to our clinical trials, consistent with guidance from the FDA and other regulatory authorities, we instituted procedures to accommodate patient and physician concerns in order to keep our studies up and running. While the pandemic clearly impacts our business and clinical development efforts, we adjusted successfully and we remain ready to adjust to a fluid and ongoing situation.

In sum, while not without challenge, fiscal 2020 was very successful in advancing zandelisib as well as key business objectives. This includes two appointments to the board of directors, both with more than 25 years industry experience, and the strengthening of our operational runway with the approximately $52 million from a December 2019 financing, about $21 million in proceeds from our ATM facility, and the $100 million upfront payment related to the Kyowa Kirin alliance.

Looking at the route we have before us, we plan to stay the course, maintaining focus on execution across the pipeline, delivering new benefits to patients with cancer, and building value for our shareholders.

President & Chief Executive Officer
October 23, 2020

2020 Highlights

About $203 million in cash and cash equivalents, on a pro forma basis, at the start of our fiscal year to support continued progress of MEI’s ongoing clinical programs.

New zandelisib global license, development and commercialization agreement with Kyowa Kirin Co., Ltd.

Fast Track Designation from FDA for the zandelisib development program for the treatment of relapsed or refractory follicular lymphoma.

A maturing zandelisib data set supporting best-in-class potential as a monotherapy and in combination with other therapeutics for the treatment of B-cell malignancies.