1. The Company
|12 Months Ended|
Dec. 31, 2016
|Organization, Consolidation and Presentation of Financial Statements [Abstract]|
Xenetic Biosciences, Inc. (“Xenetic,” the “Company,” “we” or “us”), incorporated in the state of Nevada and based in Lexington, Massachusetts, is a biopharmaceutical company focused on the discovery, research and development of next-generation biologic drugs and novel orphan oncology therapeutics. Our 200+ patent portfolio covers next generation biologic drugs and novel oncology therapeutics and provides protection for our current drug candidates and positions us well for strategic partnership and commercialization opportunities. Our objective is to leverage our portfolio to maximize out-license opportunities that generate working capital to both build incremental shareholder value and provide funding necessary to clinically develop our orphan oncology drug candidate pipeline through to market launch.
We incorporate our patented and proprietary technologies into a number of drug candidates currently under development either in-house or with biotechnology and pharmaceutical collaborators in order to create what we believe will be the next-generation biologic drugs and therapeutics. While we primarily focus on researching and developing orphan oncology drugs, we also have significant interests in drugs being developed by our collaborators to treat, among other conditions, hemophilia and anemia.
Our lead drug candidate, XBIO-101 (formerly known as Virexxa), is a small-molecule immunomodulator and interferon inducer, which, in preliminary studies, has been shown to increase progesterone receptor (PrR) expression in endometrial tissue. We have exclusive rights to develop and commercialize XBIO-101 worldwide, except for specified countries in the Commonwealth of Independent States (CIS), including Russia. XBIO-101 has been granted orphan drug designation by the U.S. Food and Drug Administration (FDA) for the potential treatment of progesterone receptor negative endometrial cancer in conjunction with progesterone therapy. We plan to commence a Phase 2 trial for XBIO-101 in the first half of 2017.
Our lead proprietary technology is PolyXen, an enabling platform technology designed for protein drug delivery. It uses the natural polymer PSA to prolong the drug's half-life and potentially improve the stability of therapeutic peptides and proteins. We believe this technology may be used in a variety of drug candidates to enhance the properties of the therapeutic, potentially providing advantages over competing products.
We are engaged in a strategic exclusive collaboration with Shire plc (formerly Baxalta, Baxter Incorporated and Baxter Healthcare) with the primary objective of developing a novel series of polysialylated blood coagulation factors, including a next generation factor VIII hemophilia A treatment. This collaboration relies on our proprietary PolyXen technology to conjugate PSA to therapeutic blood-clotting factors, with the goal of improving the pharmacokinetic profile and extending the active half-life of these biologic molecules. We granted Shire a worldwide, exclusive, royalty-bearing license to our proprietary PolyXen technology for use in combination with Shire’s proprietary molecules in the development of drug candidates designed for the treatment of blood and bleeding disorders. Shire is responsible for the costs and development of SHP656 (formerly BAX 826), an investigational, extended half-life factor VIII treatment being developed as a long-acting therapeutic for the treatment of hemophilia. Shire filed a Clinical Trial Application (“CTA”) for the program in the fourth quarter of 2015 and commenced human clinical trials during the first quarter of 2016. In December 2016, the Company earned a $3 million milestone payment from Shire related to the advancement of the Phase 1/2 clinical trial of SHP656. Under the terms of the collaboration, most recently amended in January 2014, we are eligible to receive additional regulatory and sales target payments for total potential milestone receipts of up to $100 million plus royalties on sales. Shire is one of our significant, long-term stockholders, having most recently invested $10 million in our Company in January 2014.
All of our drug candidates have arisen from our research activities or those of our collaborators, and are in the development stage. We commit significant resources to our research and development activities. None of our drug candidates have yet received regulatory approval for marketing in the U.S. by the FDA or by any applicable agencies in other countries. We are also developing a broad pipeline of clinical candidates for next generation biologics and novel oncology therapeutics in a number of orphan disease indications. Though the Company holds a broad IP portfolio, the current focus of our internal development efforts is XBIO-101 and PolyXen, in part due to capital constraints.
We, directly or indirectly, through our wholly-owned subsidiary, Xenetic U.K., and its wholly-owned subsidiaries, Lipoxen, Xenetic Technologies, Inc. and SymbioTec, GmbH, own various U.S. federal trademark registrations and applications, and unregistered trademarks and service marks, including but not limited to Virexxa®, OncoHist™, PolyXen™, ErepoXen™, ImuXen™, Xemys™, and PulmoXen™. Altogether, we, directly or indirectly, hold more than 201 patents with 40 in the United States and an additional 161 international patents, and we have approximately 101 pending patent applications worldwide.
We incorporate our patented and proprietary technologies into a number of drug candidates currently under development either in-house or with biotechnology and pharmaceutical collaborators in order to create what we believe will be the next-generation of biologic drugs and therapeutics. While we primarily focus on researching and developing orphan oncology drugs, we also have ownership and other economic interests in drugs being developed by our collaborators to treat hemophilia and anemia, among other conditions. Our patent portfolio spans four core proprietary technologies including two platforms, small molecules and biologics. The figure below depicts our current intellectual property, technologies and drug candidates.
Our four proprietary technologies are:
Though the Company holds a broad IP portfolio, the current focus of our internal development efforts is XBIO-101 and PolyXen, in part due to capital constraints.
Our proprietary technologies may address unmet needs, improve the performance of existing drugs, and create new patentable drug candidates. All of our drug candidates are in the development stage and none have yet received regulatory approval for marketing in the U.S. by the FDA or by any applicable agencies in other countries.
Going Concern and Management’s Plan
We incurred a net loss of approximately $54.2 million for the year ended December 31, 2016. At December 31, 2016, we had working capital of approximately $6.5 million and at December 31, 2015, we had a working capital deficit of approximately $3.2 million. As of December 31, 2016, we had an accumulated deficit of approximately $142.3 million, as compared to an accumulated deficit of approximately $88.1 million as of December 31, 2015. We expect to continue incurring losses for the foreseeable future and will need to raise additional capital to pursue our business plan and continue as a going concern.
The Company believes that it has access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means, if needed; however, we have not secured any commitment for new financing at this time. The terms, timing and extent of any future financing will depend upon on several factors including the achievement of progress in our clinical development programs, our ability to identify and enter into in-licensing or other strategic arrangements and factors related to financial, economic and market conditions, many of which are beyond our control.
While these consolidated financial statements have been prepared on a going concern basis, if the Company does not successfully raise additional working capital, there can be no assurance that the Company will be able to continue its operations and these conditions raise substantial doubt about its ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
Under such circumstances, the Company would have to further reduce the planned scale of, or possibly suspend, some or all of its pre-clinical development initiatives and clinical trials delivered by external service providers. In addition, the Company would have to reduce general and administrative expenses, and delay or cease the purchase of clinical research services if and until the Company is able to obtain additional financing. The recoverability and classification of the Company’s intangible assets and goodwill could also be adversely affected.
The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).
No definition available.