Market Overview

Xenetic Biosciences Reports 2017 Third Quarter Financial Results and Provides Corporate Update


Xenetic Biosciences, Inc. (NASDAQ:XBIO) ("Xenetic" or the "Company"), a
clinical-stage biopharmaceutical company focused on the discovery,
research and development of next-generation biologic drugs and novel
orphan oncology therapeutics, announced today its unaudited financial
results for the quarter ended September 30, 2017.

Xenetic also provided a corporate update and anticipated milestones for
the Company's lead product candidate, XBIO-101
(sodium cridanimod), a small-molecule immunomodulator and interferon
inducer which, in preliminary studies, has been shown to increase
progesterone receptor ("PrR") expression in endometrial tumor tissue,
and an update on its proprietary PolyXen™
platform technology.

Recent Corporate Highlights:

"I believe we are well positioned to build on the momentum of our recent
corporate and clinical achievements. We remain focused on the solid
execution of our Phase 2 study of XBIO-101 for the treatment of
endometrial cancer, with the goal of announcing interim data before the
end of next year. Further, our recent right to sublicense agreement with
Baxalta not only leverages our PolyXen platform technology and provides
a source of non-dilutive capital, but also positions Xenetic for value
driving opportunities in the near and long-term," stated Jeffrey
Eisenberg, Chief Executive Officer
of Xenetic Biosciences.

XBIO-101 Program Update

Patient dosing recently commenced for the Company's Phase 2 clinical
study of XBIO-101 in conjunction with progestin therapy for the
treatment of endometrial cancer. The study targets a population of
patients who have either failed progestin monotherapy or who have been
identified as having progesterone receptor negative ("PrR-") tumors.

The primary objective of this open-label, multi-center, single-arm,
two-period Phase 2 study is to assess the anti-tumor activity of
XBIO-101 in conjunction with progestin therapy as measured by Overall
Disease Control Rate in women with recurrent or persistent endometrial
carcinoma not amenable to surgical treatment or radiotherapy who have
either failed progestin monotherapy or who have been identified as PrR-.
Secondary objectives include assessments of efficacy and
safety/tolerability parameters.

The study is expected to enroll up to 72 women with recurrent or
persistent endometrial cancer not amenable to surgical treatment or
radiotherapy but suitable to be treated with progestins. All subjects
determined to be PrR- at screening, as well as those subjects who
experience disease progression after at least 4 weeks of progestin
monotherapy, will receive XBIO-101 in combination with continued
progestin treatment. Subjects will receive treatment until disease
progression as defined according to RECIST 1.1 criteria.

The Company expects to announce interim data from the Phase 2 study
before the end of 2018.

PolyXen Platform Technology Update

The Company recently announced that it has entered into a Right to
Sublicense Agreement (the "Right to Sublicense Agreement") with Baxalta
Incorporated, Baxalta US Inc., and Baxalta GmbH (collectively, with
their affiliates, "Baxalta"), wholly-owned subsidiaries of Shire plc
((LSE: SHP, NASDAQ:SHPG). Pursuant to the Right to Sublicense Agreement,
Xenetic granted to Baxalta the right to grant a nonexclusive sublicense
to certain patents related to the Company's PolyXen technology that were
previously exclusively licensed to Baxalta pursuant to an agreement
between the Company and Baxalta in connection with products relating to
the treatment of blood and bleeding disorders.

As part of the Right to Sublicense Agreement, Baxalta paid Xenetic a
one-time payment of $7.5 million and is expected to make single digit
royalty payments based upon net sales of the products covered under the
related sublicense throughout the term of the agreement.

Additionally, Xenetic expects to continue to pursue business development
activities to explore partnerships utilizing its PolyXen delivery

Summary of Financial Results for Third Quarter 2017

Net loss for the nine months ended September 30, 2017, was $8.0 million
compared to a net loss of approximately $53.8 million for the same
period in 2016. The decrease in net loss was primarily due to a decrease
of in-process research and development expense, as well as a decrease in
share-based compensation expense related to warrants previously issued
in 2016. These decreases were offset by an increase in general operating
costs and costs related to the initiation of our XBIO-101 Phase 2
clinical study.

The Company ended the quarter with approximately $0.7 million of cash.
With the addition of the $7.5 million milestone payment under the Right
to Sublicense Agreement, as of the date of this release, the Company's
current cash position is approximately $8.0 million. Based on
management's current projections, the Company has sufficient cash to
fund its operations through the second quarter of 2018.

About Xenetic Biosciences

Xenetic Biosciences, Inc. is a clinical-stage biopharmaceutical company
focused on the discovery, research and development of next-generation
biologic drugs and novel orphan oncology therapeutics. Xenetic's lead
investigational product candidate is oncology therapeutic XBIO-101
(sodium cridanimod) for the treatment of progesterone resistant
endometrial cancer. Further, Xenetic's proprietary drug development
platform, PolyXen, enables next-generation biologic drugs by improving
their half-life and other pharmacological properties. The Company has
ongoing business development activities to explore partnerships
utilizing its PolyXen delivery platform.

For more information, please visit the Company's website at
and connect on Twitter,
and Google+.

Forward-Looking Statements

This press release contains forward-looking statements for purposes of
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. All statements contained in this press release other than
statements of historical facts may constitute forward-looking statements
within the meaning of the federal securities laws. These statements can
be identified by words such as "expects," "plans," "projects," "will,"
"may," "anticipates," "believes," "should," "intends," "estimates," and
other words of similar meaning, including statements regarding the
Company's ability to develop and customize the Company's PolyXen
platform technology to improve the clinical utility of protein and
peptide drugs; the Company's anticipated corporate development
strategies and pursuit of current and future collaborations to
co-develop new product candidates; its ability to add new programs to
its pipeline and expand the development of its current product
candidates into new indications; the initiation, timing, progress,
enrollment and reporting of results of its preclinical programs and
clinical trials; the Company's potential for future growth and creation
of shareholder value; the Company's expectation of cash flow from the
royalties under the Right to Sublicense Agreement; and the Company's
liquidity and ability to fund its future operations;. Any
forward-looking statements contained herein are based on current
expectations, and are subject to a number of risks and uncertainties.
Many factors could cause our actual activities or results to differ
materially from the activities and results anticipated in
forward-looking statements. These risks and uncertainties include those
described in the "Risk Factors" section of the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2016 and filed with
the Securities and Exchange Commission on March 31, 2017, and subsequent
reports that it may file with the Securities and Exchange Commission. In
addition, forward-looking statements may also be adversely affected by
general market factors, competitive product development, product
availability, federal and state regulations and legislation, the
regulatory process for new product candidates and indications,
manufacturing issues that may arise, patent positions and litigation,
among other factors. The forward-looking statements contained in this
press release speak only as of the date the statements were made, and
the Company does not undertake any obligation to update forward-looking
statements, except as required by law.





September 30,


December 31,

Current assets:
Cash $ 694,752 $ 4,048,131
Restricted cash 66,510 66,510
Accounts receivable 42,500 3,000,000
Prepaid expenses and other   1,245,252           1,224,009  
Total current assets 2,049,014 8,338,650
Property and equipment, net 32,293 42,366
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