On May 10, 2016 Allergan plc (NYSE: AGN) reported strong performance with net revenue from continuing operations increasing 48 percent to $3.8 billion for the quarter ended March 31, 2016, compared to $2.6 billion in the first quarter 2015 (Press release, Allergan, MAY 10, 2016, View Source;p=irol-newsArticle&ID=2166833 [SID:1234512266]). On a non-GAAP basis, diluted earnings per share from continuing operations increased 15 percent to $3.04 for the first quarter 2016, compared to $2.65 in the first quarter 2015. GAAP loss from continuing operations per diluted share for the first quarter 2016 was $0.38, compared to GAAP loss from continuing operations per diluted share of $2.80 in the prior year period. GAAP results were impacted by amortization, acquisition-related expenses, research and development (R&D) expenses resulting from the acquisition of R&D assets from Anterios, Pfizer-related expenses, acquisition accounting valuation related expenses and severance associated with acquired businesses, mainly the acquisition of Allergan on March 17, 2015. These results include Allergan results as of the date of the close of the acquisition, March 17, 2015.

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"Allergan once again delivered strong performance in the first quarter of 2016, powered by double-digit pro forma branded revenue growth2 and our top global products within the U.S. Brands, U.S. Medical and International Brands segments. We also grew our Non-GAAP EPS by 15 percent, marking the seventh consecutive quarter of double-digit, year-over-year EPS growth since I became the CEO in July 2014," said Brent Saunders, CEO and President of Allergan. "Thanks to the effort of our 30,000 colleagues around the world, Allergan remains the most dynamic and exciting company in our industry. That dynamism is evident in our results, in the way we operate our business, in the way we build category leadership through our Open Science model and in our highly responsive, service oriented approach to customers."

"Our branded business continues to grow at a fast pace and is very well positioned in each of our seven therapeutic areas. As we look ahead, we see durable global brands with strong fundamentals, broad-based geographic expansion, and many opportunities to continue growing our innovative business," added Saunders.

For the first quarter 2016, adjusted EBITDA from continuing operations increased 65 percent to $1.8 billion, compared to $1.1 billion for the first quarter 2015. Non-GAAP operating income from continuing operations in the first quarter 2016 was $1.75 billion. GAAP operating loss from continuing operations in the first quarter 2016 was $154 million. Cash flow from operations for the first quarter of 2016 was $1.2 billion and cash and marketable securities were $2.3 billion as of March 31, 2016. Cash from operations in the quarter was impacted by the acquired R&D assets from Anterios and integration expenses.

_____________________________________
1 Excludes Fx impact, Namenda IR and divestitures
2 Excludes Fx impact, Namenda IR and divestitures

Operating Expenses
Total non-GAAP SG&A was $1.0 billion for the first quarter 2016 compared to $609 million in the prior year period. Non-GAAP R&D investment for the first quarter 2016 was $277 million. As of March 31, 2016, the Company had outstanding indebtedness of $42.6 billion primarily as a result of legacy Allergan, Forest and other recent acquisitions.

Amortization and Tax
Amortization expense for the first quarter 2016 was $1.6 billion, compared to $788 million in the first quarter of 2015. The increase was primarily due to the Allergan acquisition.

The Company’s non-GAAP continuing operations tax rate was 9.7 percent in the first quarter 2016. The Company experienced a benefit to its tax rate as a result of the impact of its entire interest expense being included within continuing operations earnings.

Top Global Branded Product Highlights
The following table represents revenue from Allergan’s top promoted products.

ALLERGAN PLC
NET REVENUES TOP GLOBAL PRODUCTS
(Unaudited; in millions)

Three Months Ended March 31,

Global

U.S.

International

2016

2015

$ Change
% Change

2016

2015

$ Change
% Change

2016

2015

$ Change
% Change

Botox

$ 637.5

$ 84.0

$ 553.5
n.m.

$ 455.5

$ 60.7

$ 394.8
n.m.

$ 182.0

$ 23.3

$ 158.7
n.m.
Restasis

313.7

29.9

283.8
n.m.

298.7

28.7

270.0
n.m.

15.0

1.2

13.8
n.m.
Fillers

214.7

24.6

190.1
n.m.

114.1

12.8

101.3
n.m.

100.6

11.8

88.8
n.m.
Namenda XR

173.1

150.6

22.5
14.9%

173.1

150.6

22.5
14.9%

–

–

–
n.a.
Lumigan/Ganfort

169.6

21.2

148.4
n.m.

81.5

8.1

73.4
n.m.

88.1

13.1

75.0
n.m.
Bystolic

164.0

164.1

(0.1)
(0.1)%

163.6

163.7

(0.1)
(0.1)%

0.4

0.4

–
0.0%
Linzess/Constella

140.9

96.2

44.7
46.5%

137.1

95.5

41.6
43.6%

3.8

0.7

3.1
n.m.
Alphagan/Combigan

126.7

16.0

110.7
n.m.

84.9

10.1

74.8
n.m.

41.8

5.9

35.9
n.m.
Asacol/Delzicol

121.2

149.2

(28.0)
(18.8)%

105.9

132.0

(26.1)
(19.8)%

15.3

17.2

(1.9)
(11.0)%
Lo Loestrin

89.3

83.3

6.0
7.2%

89.3

82.7

6.6
8.0%

–

0.6

(0.6)
(100.0)%
Viibryd/Fetzima

83.3

79.6

3.7
4.6%

83.3

79.6

3.7
4.6%

–

–

–
n.a.
Estrace Cream

80.7

71.9

8.8
12.2%

80.7

71.9

8.8
12.2%

–

–

–
n.a.
Minastrin 24

80.4

65.4

15.0
22.9%

79.6

64.8

14.8
22.8%

0.8

0.6

0.2
33.3%
Silicone Implants

67.4

9.4

58.0
n.m.

33.9

2.4

31.5
n.m.

33.5

7.0

26.5
n.m.
Carafate / Sulcrate

61.5

53.6

7.9
14.7%

61.0

53.6

7.4
13.8%

0.5

–

0.5
n.a.
Ozurdex

60.5

7.0

53.5
n.m.

19.4

2.7

16.7
n.m.

41.1

4.3

36.8
n.m.
Aczone

33.0

6.0

27.0
n.m.

33.0

6.0

27.0
n.m.

–

–

–
n.a.
Namenda IR

5.8

245.4

(239.6)
(97.6)%

5.8

245.4

(239.6)
(97.6)%

–

–

–
n.a.
Other Products Revenues

807.9

650.9

157.0
24.1%

657.5

618.3

39.2
6.3%

150.4

32.6

117.8
n.m.
Total Products Revenues

3,431.2

2,008.3

1,422.9
70.9%

2,757.9

1,889.6

868.3
46.0%

673.3

118.7

554.6
467.2%
ANDA Revenues

364.7

554.3

(189.6)
(34.2)%

364.7

554.3

(189.6)
(34.2)%

–

–

–
n.a.
Total Net Revenues

$ 3,795.9

$ 2,562.6

$ 1,233.3
48.1%

$ 3,122.6

$ 2,443.9

$ 678.7
27.8%

$ 673.3

$ 118.7

$ 554.6
467.2%
For the first quarter 2016, total global branded product revenues were $3.4 billion versus $2.0 billion in the prior year quarter. Top key branded product highlights in the quarter included:

Botox revenues in the first quarter of 2016 were $638 million, driven by continued strong performance in both aesthetic and therapeutic indications.
Restasis revenues in the first quarter of 2016 were $314 million, driven by continuing strong promotional efforts.
Fillers’ revenues in the first quarter of 2016 were $215 million, reflecting continued strong performance.
Namenda XR revenues in the first quarter of 2016 were $173 million, as prescriptions and formulary coverage remained stable following the loss of exclusivity of Namenda IR.
Lumigan/Ganfort revenues in the first quarter of 2016 were $170 million reflecting stable performance across Allergan’s glaucoma product franchise.
Bystolic revenues in the first quarter of 2016 remained stable at $164 million.
Linzess/Constella revenues in the first quarter of 2016 were $141 million, driven by continued strong OTC conversion momentum and increasing sales in the long-term care market.
Asacol/Delzicol revenues in the first quarter of 2016 were $121 million, impacted by lower prescriptions and trade buying patterns.
Viibryd/Fetzima revenues in the first quarter of 2016 were $83 million, driven by double digit prescription growth in Fetzima.
Lo Loestrin revenues in the first quarter of 2016 were $89 million, driven by continuing strong demand and promotional efforts.
Minastrin and Estrace Cream revenues in the first quarter of 2016 were $80 million and $81 million, respectively.
Silicone breast implant revenues in the first quarter of 2016 were $67 million, as a result of increased market share.
First Quarter 2016 Business Segment Results

U.S. Brands

Three Months Ended

March 31,

Change
(Unaudited; in millions)
2016

2015

Dollars
%
Central Nervous System (CNS)
$ 554.3

$ 548.4

$ 5.9
1.1%
Eye care
533.0

94.7

438.3
n.m.
Gastroenterology (GI)
403.6

366.6

37.0
10.1%
Women’s Health
263.7

229.3

34.4
15.0%
Urology
74.1

37.3

36.8
98.7%
Infectious Disease
51.5

41.9

9.6
22.9%
Other
422.5

491.0

(68.5)
(14.0)%
Net revenues
$ 2,302.7

$ 1,809.2

$ 493.5
27.3%
Operating expenses:

Cost of sales(1)

259.4

218.2

41.2
18.9%
Selling and marketing

431.9

372.3

59.6
16.0%
General and administrative

68.1

58.5

9.6
16.4%
Segment contribution

$ 1,543.3

$ 1,160.2

$ 383.1
33.0%
Segment margin

67.0%

64.1%

2.9%
Segment gross margin

88.7%

87.9%

0.8%

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.
U.S. Brands net revenue of $2.3 billion for the first quarter 2016 represents a 27 percent increase over $1.8 billion in the first quarter of 2015. Growth was mainly attributed to the acquisition of legacy Allergan products, including Botox, Restasis, Lumigan/Ganfort, and Combigan, and strong growth from Linzess/Constella, Carafate/Sulcrate, Zenpep, Namenda XR, Lo Loestrin, Estrace Cream and Minastrin 24 and new product launches Avycaz, Dalvance and Liletta.

U.S. Brands gross margin for the first quarter of 2016 was 88.7 percent. Selling & marketing (S&M) expenses increased 16 percent in the first quarter 2016 due mainly to the acquisition of legacy Allergan and the launches of Viberzi and Vraylar offset, in part, by the impact of synergies from Forest Laboratories and Allergan acquisitions. G&A expenses increased versus first quarter 2015 reflecting the addition of legacy Allergan, which was offset by related synergies from the acquisitions of Forest Laboratories and Allergan. Overall, net segment contribution for the first quarter 2016 increased 33 percent over the prior year period to $1.5 billion primarily as a result of the Allergan acquisition.

U.S. Medical Aesthetics

Three Months Ended

March 31,

Change
(Unaudited; in millions)
2016

2015

Dollars
%
Facial Aesthetics
$ 279.4

$ 35.2

$ 244.2
n.m.
Medical Dermatology and Other
122.2

30.5

91.7
n.m.
Plastic Surgery
48.1

14.1

34.0
n.m.
Net revenues
$ 449.7

$ 79.8

$ 369.9
n.m.
Operating expenses:

Cost of sales(1)

30.9

4.5

26.4
n.m.
Selling and marketing

110.0

13.8

96.2
n.m.
General and administrative

13.3

2.7

10.6
n.m.
Segment contribution

$ 295.5

$ 58.8

$ 236.7
n.m.
Segment margin

65.7%

73.7%

(8.0)%
Segment gross margin

93.1%

94.4%

(1.3)%

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.
First quarter 2016 U.S. Medical Aesthetics net revenue was $450 million reflecting continued strong performance in BOTOX and Fillers including Juvederm.

U.S. Medical Aesthetics selling and marketing (S&M) expenses for the first quarter of 2016 were $110 million, and general & administrative expenses (G&A) for the first quarter of 2016 were $13 million.

U.S. Medical Aesthetics segment gross margin for the first quarter of 2016 was 93.1 percent compared to 94.4 percent in the prior year quarter.

International Brands

Three Months Ended

March 31,

Change
(Unaudited; in millions)
2016

2015

Dollars
%
Eye care
$ 291.5

$ 40.5

$ 251.0
n.m.
Facial Aesthetics
205.5

24.8

180.7
n.m.
Other Therapeutics
139.5

45.6

93.9
n.m.
Plastic Surgery
36.8

7.8

29.0
n.m.
Net revenues
$ 673.3

$ 118.7

$ 554.6
n.m.
Operating expenses:

Cost of sales(1)

99.2

23.7

75.5
n.m.
Selling and marketing

187.3

42.3

145.0
n.m.
General and administrative

27.6

7.4

20.2
n.m.
Segment contribution

$ 359.2

$ 45.3

$ 313.9
n.m.
Segment margin

53.3%

38.2%

15.1%
Segment gross margin

85.3%

80.0%

5.3%

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.
International Brands net revenues for the first quarter of 2016 was $673 million compared to $119 million in the first quarter of 2015. Growth was mainly attributed to revenues associated with acquired legacy Allergan products, including Botox, Juvederm and Ozurdex.

International Brands selling and marketing (S&M) expenses for the first quarter of 2016 were $187 million, and general & administrative expense (G&A) were $28 million. International Brands segment gross margin for the first quarter of 2016 was 85.3 percent compared to 80.0 percent in the prior year quarter.

Anda Distribution

Three Months Ended

March 31,

Change
(Unaudited; in millions)
2016

2015

Dollars
%
Net revenues
$ 364.7

$ 554.3

$ (189.6)
(34.2)%
Operating expenses:

Cost of sales(1)

302.9

473.5

(170.6)
(36.0)%
Selling and marketing

28.8

37.6

(8.8)
(23.4)%
General and administrative

10.2

10.8

(0.6)
(5.6)%
Segment contribution

$ 22.8

$ 32.4

$ (9.6)
(29.6)%
Segment margin

6.3%

5.8%

0.5%
Segment gross margin

16.9%

14.6%

2.3%

(1) Excludes amortization and impairment of acquired intangibles including product rights, as well as indirect cost of sales not attributable to segment results.
Anda Distribution net revenues for the first quarter of 2016 were $365 million, reflecting a $189.6 million decline primarily due to the loss of Target Corporation business due to CVS Health acquiring Target’s in store pharmacies.

Anda Distribution gross margin for the first quarter of 2016 was 16.9 percent compared to 14.6 percent in the previous year period.

Discontinued Operations
As a result of the proposed divestiture of Allergan’s Global Generics business to Teva on July 27, 2015, the financial results of the Company’s Global Generics business are being reported as discontinued operations in the condensed consolidated statements of operations. These portions of the Company’s results will continue to be reported as discontinued operations until the close of that transaction. Continuing operations includes the U.S. Brands, U.S. Medical, International Brands and Anda Distribution segments. All prior year results have been recast to reflect continuing operations results.

Pipeline Update
R&D productivity continued during the quarter. Key development highlights included:

First Quarter U.S. and International Branded Product Approvals and Launches

ACZONE (dapsone) Gel, 7.5%, received U.S. Food and Drug Administration (FDA) approval for the topical treatment for acne in patients 12 years of age and older.
BOTOX (onabotulinumtoxinA) received FDA approval for the treatment of lower limb spasticity in adult patients to decrease the severity of increased muscle stiffness in ankle and toe muscles.
DALVANCE (dalbavancin) for injection received FDA approval for its supplemental New Drug Application (sNDA) and EU approval to expand the product’s label. The expanded label includes a single-dose administered as a 30-minute intravenous (IV) infusion of DALVANCE for the treatment of acute bacterial skin and skin structure infections (ABSSSI) caused by designated susceptible Gram-positive bacteria in adults, including infections caused by methicillin-resistant Staphylococcus aureus (MRSA).
Allergan launched VRAYLAR (cariprazine), a once-daily oral atypical antipsychotic in the U.S. VRAYLAR was approved by the FDA in September 2015 for the treatment of acute manic or mixed episodes of bipolar I disorder and schizophrenia in adults.
First Quarter 2016 Regulatory Milestones & Clinical Updates

Allergan announced that rapastinel (GLYX-13) received Breakthrough Therapy designation from the FDA for adjunctive treatment of Major Depressive Disorder (MDD). This follows the Fast Track Designation for rapastinel granted by the FDA in 2014.
Allergan announced that the FDA accepted for filing the company’s supplemental New Drug Application (sNDA) for TEFLARO (ceftaroline fosamil). If approved, this filing will expand the label of TEFLARO beyond adults to include the treatment of children two months of age and older with acute bacterial skin and skin structure infections (ABSSSI) including infections caused by methicillin-resistant Staphylococcus aureus (MRSA) and community-acquired bacterial pneumonia (CABP) caused by Staphylococcus pneumoniae and other designated susceptible bacteria.
Allergan announced that the FDA accepted for filing the company’s supplemental New Drug Application (sNDA) for AVYCAZ (ceftazidime and avibactam). This filing will add important new clinical data to the current label from two Phase 3 trials evaluating the safety and efficacy of AVYCAZ, in combination with metronidazole, for the treatment of complicated intra-abdominal infections (cIAI), including patients with infections due to ceftazidime-nonsusceptible (CAZ-NS) pathogens.
Allergan has submitted an NDA to the FDA for Oxymetazoline, a potential treatment for rosacea.
Allergan submitted an sNDA to the FDA for Linzess 72 mcg for the treatment of Chronic Idiopathic Constipation (CIC).
Allergan submitted an sNDA to the FDA for a single-inserter with optimized packaging for use with Liletta.
FDA accepted an NDA submission for SER 120, an investigational treatment for nocturia.
Top-line results from the first Phase 3 study of Ulipristal Acetate were reported in the first half of 2016. The study met all co-primary and secondary endpoints with both ulipristal treatment arms achieving statistically significant results over placebo (p<0.0001).
Allergan initiated a Phase 3 study for Cariprazine in Bipolar Depression in the first half of 2016.
Full Year 2016 Continuing Operations Guidance
Allergan’s full year 2016 continuing operations standalone estimates are based on management’s current belief about prescription trends, pricing levels, inventory levels and the anticipated timing of future product launches and events. Continuing operations includes the U.S. Brands, U.S. Medical, International Brands and Anda distribution segments.

Total Non-GAAP Net Revenues are expected to be ~$17 Billion
Non-GAAP Branded Net Revenues are expected to be ~$15 Billion (10% Growth1)
No material changes to gross margin from current levels in each segment
Non-GAAP R&D investment is expected to be ~$1.5 Billion
SG&A as a percent of non-GAAP Net Revenues is expected to be ~25% reflecting plans to restructure and simplify the business following the divestiture of the Global Generics business to Teva
Non-GAAP tax rate anticipated to return to normalized levels following the close of Teva of ~14%
1 Excluding Namenda IR, divestitures and Anda.

Share Repurchase Program
Allergan reported that the Company’s board of directors has authorized a new share repurchase program of up to $10 billion of the Company’s common stock. Allergan expects to execute $4 – $5 billion in open market repurchases over four to six months subject to favorable market conditions. If favorable market conditions persist, the Company will consider extending the program following completion of the initial portion of the share repurchase program.

The share repurchase program is pending the completion of and receipt of proceeds from the divestiture of Allergan’s Global Generics business to Teva, expected to close by the end of June 2016.

First-Quarter 2016 Conference Call and Webcast Details
Allergan will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss first quarter 2016 results. The dial-in number to access the call is U.S./Canada (877) 251-7980, International (706) 643-1573, and the conference ID is 94452083. To access the live webcast, go to Allergan’s Investor Relations Web site at View Source

A taped replay of the conference call will also be available beginning approximately two hours after the call’s conclusion and will remain available through 11:30 PM Eastern Time on May 24, 2016. The replay may be accessed by dialing (855) 859-2056 and entering conference ID 94452083. From international locations, the replay may be accessed by dialing (404) 537-3406 and entering the same conference ID. To access the webcast, go to Allergan’s Investor Relations Web site at View Source A replay of the webcast will also be available.

On May 10, 2016 Fortress Biotech, Inc. (NASDAQ: FBIO) ("Fortress"), a biopharmaceutical company dedicated to acquiring, developing and commercializing novel pharmaceutical and biotechnology products, reported its financial results and recent corporate highlights for the quarter ended March 31, 2016 (Filing, Q1, Fortress Biotech, 2016, MAY 10, 2016, View Source [SID:1234512260]).

Dr. Lindsay A. Rosenwald, Chairman, President and CEO of Fortress, said, "This year, we have continued to build our portfolio of products under development and Journey Medical Corporation’s roster of marketed products. We have also made significant progress advancing the pipeline of many of our other Fortress Companies, including Mustang Bio, which presented positive initial Phase I data on its CAR-T therapy MB-101 for the treatment of glioblastoma at the American Society of Gene and Cell Therapy 19th Annual Meeting. In addition, we are excited to possibly bring National Holdings Corporation under the Fortress umbrella with the goal of building a world-class biotech and life sciences investment banking operations franchise. In 2016, we plan to continue to seek business development opportunities for Fortress and our Fortress Companies, as we expand our therapeutic focus and advance multiple milestones in our robust pipeline. We look forward to another transformative year in support of our mission of rapidly advancing meaningful treatments to people in need."

Financial Results:

· At March 31, 2016, Fortress’ consolidated cash and cash equivalents totaled $81.4 million compared to $98.2 million at December 31, 2015, a decrease of $16.8 million for the quarter. These totals exclude restricted cash of $14.6 million. The majority of the cash payments were related to Fortress and Fortress Companies previously accrued liabilities and upfront fees.
· Revenue totaled $0.7 million for the first quarter of 2016.
· Research and development expenses were $7.7 million for the first quarter of 2016, compared to $1.6 million for the first quarter of 2015.
· General and administrative expenses were $7.9 million for the first quarter of 2016, compared to $3.5 million for the first quarter of 2015.
· Net loss was $12.2 million, or $0.31 per share, for the first quarter of 2016, compared to a net loss of $12.1 million, or $0.31 per share, for the first quarter of 2015.
· Noncash stock-based compensation expense included in net loss for the first quarter of 2016 was $2.9 million, compared to $1.5 million for the first quarter of 2015.

Recent Corporate Highlights:

Avenue Therapeutics, Inc.

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· During the three months ended March 31, 2016, Avenue completed a pharmacokinetics (PK) study for intravenous (IV) Tramadol.

Checkpoint Therapeutics, Inc.

· In February 2016, Checkpoint repaid its National Securities Corporation (NSC) Debt of $2.8 million.

FBIO Acquisition, Inc.

· In April 2016, Fortress, FBIO Acquisition, Inc. and National Holdings Corporation ("NHLD") entered into an agreement and plan of merger for the acquisition of NHLD by FBIO Acquisition, Inc.

Helocyte, Inc.

· In February 2016, Helocyte entered into an Investigator-Initiated Clinical Research Support Agreement with the City of Hope National Medical Center, to support a Phase 2 clinical study of its Triplex immunotherapy for CMV control in allogeneic stem cell transplant recipients. The Phase 2 study is additionally supported by grants from the National Cancer Institute.
· In February 2016, Helocyte entered into an option agreement with The University of Texas Health Science Center at Houston, for the exclusive rights to license certain intellectual property and clinical data relating to the use of bone marrow derived mononuclear cells for the treatment of severe Traumatic Brain Injury.
· In March 2016, Helocyte entered into an Investigator-Initiated Clinical Research Support Agreement with the City of Hope National Medical Center, to support a Phase 2 clinical study of its PepVax immunotherapy for CMV control in allogeneic stem cell transplant recipients. The Phase 2 study is additionally supported by grants from the National Cancer Institute.

Journey Medical Corporation (JMC)

· In January 2016, JMC entered into a licensing agreement with a third party to distribute a prescription wound cream. JMC intends to commercialize this product in the second quarter of 2016.
· In January 2016, JMC entered into a licensing agreement with a third party to distribute an emollient for the treatment of various types of dermatitis. JMC intends to commercialize this product in the second quarter of 2016.
· Both products will be marketed under the JMC brand.

Mustang Bio, Inc.

· In April 2016, Mustang announced that two abstracts pertaining to MB-101 (IL13Rα2-specific CAR T cells) for the treatment of glioblastoma were selected for presentation at the American Society of Gene and Cell Therapy 19th Annual Meeting (ASGCT) (Free ASGCT Whitepaper). Pre-clinical and preliminary Phase I data were presented at ASGCT (Free ASGCT Whitepaper) on Thursday, May 5.

On May 10, 2016 BioTime, Inc. (NYSE MKT and TASE: BTX), a clinical-stage regenerative medicine company with a focus on pluripotent stem cell technology, reported financial results for the first quarter ended March 31, 2016 and provided a corporate update (Press release, BioTime, MAY 10, 2016, View Source;p=RssLanding&cat=news&id=2167228 [SID:1234512255]). The Company also announced that management will host a conference call with investors to discuss the recent operating progress and corporate developments on Tuesday, May 17, 2016 at 4:30 p.m. Eastern / 1:30 p.m. Pacific. Details on how to access the call are provided later in this news release.

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"We are off to a strong start in 2016 as we continue to make progress with BioTime’s key clinical therapeutic programs, Renevia in medical aesthetics and OpRegen in dry AMD," said Adi Mohanty, Co-Chief Executive Officer. "We are also pleased with the significant operating progress achieved by our non-core assets as these companies mature towards standalone businesses. In particular, we are excited to see our digital health subsidiary, LifeMap Solutions, gaining more traction with clients and partners, including best-in-class institutions. Meanwhile, we in the BioTime organization continue to sharpen our focus on clinical progress and simplifying our corporate structure and seeking ways to unlock the value of our more mature revenue-generating subsidiaries for BioTime shareholders."

First Quarter and Recent Highlights

Clinical Progress

OpRegen (retinal pigment epithelial cells)

The first cohort was successfully dosed earlier this year in a Phase I/IIa clinical trial evaluating the safety and efficacy of OpRegen for the treatment of the advanced form of dry age-related macular degeneration (AMD). The trial is evaluating three different dose regimens. BioTime expects the Data Safety Monitoring Board (DSMB), an independent group of experts established for the Phase I/IIa trial, will complete its review of the initial safety data from the first cohort and recommend dose escalation to the second cohort during the second quarter of 2016. The second cohort will receive a higher, more clinically significant, dose of OpRegen. The Company expects to complete enrollment in the second cohort in 2016 and, if the data are positive, anticipates DSMB approval to proceed to the third cohort by the end of 2016. OpRegen has received Fast Track designation from the U.S. Food and Drug Administration for the treatment of dry AMD, which occurs in approximately 90% of those afflicted with AMD.
Renevia (adipose cells + cell delivery matrix)

The Company expects to complete enrollment for its Renevia pivotal clinical trial in Europe in the second half of 2016 with top line data availability in early 2017. If the data are positive, BioTime plans to submit an application for CE Mark approval in the first half of 2017. The objective of the trial is to assess the efficacy of Renevia, which consists of BioTime’s HyStem hydrogel cell-transplantation delivery matrix combined with the patient’s own adipose cells, in restoring normal skin contours in patients whose subcutaneous fat, or adipose tissue, has been lost due to antiviral drug treatment for HIV. Positive data from the pivotal trial is expected to provide the foundation for studying Renevia in the much broader applications of fat tissue deficits in various medical aesthetics applications, such as for age-related and trauma related facial fat loss.
AST-VAC1 (antigen-presenting autologous dendritic cells)

In February, BioTime’s subsidiary Asterias Biotherapeutics, Inc. completed the End-of-Phase 2 meeting with the U.S. Food and Drug Administration (FDA) for AST-VAC1, the company’s lead clinical program targeting maintenance of relapse-free-survival in acute myeloid leukemia (AML) patients. Asterias is planning for the initiation of a single pivotal Phase 3 trial that could support an accelerated development pathway towards a potential future biologic license application (BLA) filing.
Asterias presented data from the Phase II clinical trial of its cancer immunotherapy AST-VAC1 in acute myeloid leukemia (AML) at the American Society of Gene and Cell Therapy (ASGCT) (Free ASGCT Whitepaper) 19th Annual Meeting on May 5, 2016.
AST-OPC1 (oligodendrocyte progenitor cells)

Asterias Biotherapeutics presented an overview of the AST-OPC1 therapeutic development program that is currently in a Phase I/IIa dose escalation clinical trial in spinal cord injury at the Stem Cell Summit 2016 meeting on April 27, 2016.
Cancer Diagnostics

OncoCyte Corporation, the cancer diagnostics subsidiary of BioTime and developer of novel, non-invasive blood and urine based tests for the early detection of cancer, announced that its bladder cancer abstract has been selected for presentation in a poster session, including a live panel discussion on the results, at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in Chicago, Illinois to be held on June 3-7, 2016. The study to be presented at the upcoming ASCO (Free ASCO Whitepaper) annual meeting is based on the continued development of the diagnostic first reported at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) 2015 Annual Meeting. At AACR (Free AACR Whitepaper), OncoCyte presented interim clinical study data for the non-invasive detection of bladder cancer that demonstrated a high level of sensitivity and specificity in the detection of urothelial carcinoma, the most common type of bladder cancer.
On April 4, 2016, OncoCyte and the Wistar Institute, an international biomedical research leader in cancer, immunology and infectious diseases, announced positive research results for a lung cancer diagnostic test being developed at Wistar. This study of 620 subjects replicates a previous study that was carried out at Wistar, which was presented at the American Thoracic Society conference in May 2015. The results of this study are being further evaluated by OncoCyte and mark a successful transition of the assay platform from Illumina microarrays to a Nanostring nCounter machine, which is the platform that OncoCyte intends to use for commercialization. OncoCyte has exclusive commercial rights to the lung cancer diagnostic test developed by Wistar. OncoCyte must now independently validate these results in its own follow-up study based on the results of Wistar’s latest study. OncoCyte will attempt to finalize and lock down both the assay and the classifier or algorithm that interprets test results, and if successful, will initiate an internal analytical validation study.
Non-core Assets

LifeMap Solutions, the digital health subsidiary of BioTime and co-developer of ResearchKit-enabled app Asthma Health, launched its new mobile health app design and development service to help research institutions and health companies worldwide develop custom smartphone apps and research studies. Through the new service, LifeMap offers clients its deep expertise in medical science, consumer behavior, app analytics, and design. LifeMap’s innovative, data-driven mobile health (mHealth) apps are designed to recruit clinical study participants, obtain patient consent through the iPhone, and passively collect participants’ health information. LifeMap Solutions has developed innovative digital health apps in collaboration with leading research institutions including the Icahn School of Medicine at Mount Sinai, Stanford University School of Medicine, and National Jewish Health, as well as with strategic partners like 23andMe.
Corporate Developments

On May 10, 2016, Asterias finalized the pricing of an underwritten public offering of 5,147,059 units at a public offering price of $3.40 per unit. Each unit consists of one share of common stock and 0.5 of a warrant to purchase a share of common stock at an exercise price of $4.37 per share. The warrants are immediately exercisable and expire on the fifth anniversary of the date of issuance. The offering is expected to close on May 13, 2016, subject to customary closing conditions. If completed, Asterias would receive net proceeds of $16,275,000 after underwriting discounts but before paying other costs of the offering. Asterias has granted the underwriters a 30-day option to purchase up to an additional 772,059 shares of common stock and/or additional warrants to purchase up to 386,029 shares of common stock to cover over-allotments, if any. If the over-allotment option is exercised in full, net proceeds of the offering after underwriting discounts but before other expenses are expected to be approximately $18.7 million.
On April 28, 2016, Howard I. Scher, M.D., one of the world’s leading oncology experts, was appointed to the Board of Directors of Asterias Biotherapeutics.
In February, pharmaceutical industry veteran Stephen L. Cartt was appointed as President and Chief Executive Officer of Asterias, and member of the company’s Board of Directors. Mr. Cartt previously served as Chief Operating Officer of Questcor Pharmaceuticals Inc. until its sale in 2014 to Mallinckrodt, plc for $5.6 billion. In addition, Don M. Bailey was appointed to Asterias’ Board of Directors and named Chairman of the Board of Directors. Mr. Bailey previously served as President and Chief Executive Officer of Questcor until its sale in 2014 to Mallinckrodt.
First Quarter Financial Results

Cash (and available-for-sale securities) Position: Cash and cash equivalents totaled $27.1 million as of March 31, 2016, compared to $42.2 million as of December 31, 2015. The cash on hand as of March 31, 2016 includes $16.4 million held by subsidiaries. As of March 31, 2016, BioTime held $829,000 in available-for-sale securities. As of March 31, 2016, BioTime owned 21.7 million shares of Asterias common stock and 14.7 million shares of OncoCyte common stock, which represented an aggregate market value of $170 million as of that date.

Revenues: BioTime’s operating revenues are currently generated from research grants, licensing fees and advertising from the marketing of online database products. Total consolidated revenues were $2.1 million for the first quarter, compared to $1.3 million in the first quarter of 2015. The increase was primarily due to increases in grant revenue and subscription and advertising revenues.

R&D Expenses: Research and development expenses were $13.7 million for the first quarter, compared to $9.3 million for the comparable period in 2015. The increase is in part a result of increased expenses primarily related to regulatory and clinical trials of Asterias’ AST-OPC1 program, and OncoCyte’s cancer diagnostics.

G&A Expenses: General and administrative expenses were $11.9 million for the first quarter, compared to $5.2 million for the first quarter of 2015. The increase is in part a result of $3.1 million in non-cash expense for the estimated fair value of the distribution of 3,331,229 warrants to purchase Asterias common stock to Asterias shareholders other than BioTime declared by the Asterias board of directors on March 30, 2016, increased staffing needed to advance programs under development at BioTime, including non-cash stock-based compensation from BioTime, Asterias, and OncoCyte.

Net Loss attributable to BioTime: Net loss attributable to BioTime was $17.1 million for the three months ended March 31, 2016, or $0.19 per share. There was no deferred income tax benefit recorded in the three months ended March 31, 2016. For the first quarter of 2015, net loss attributable to BioTime was $10.2 million, or $0.13 per share including deferred income tax benefits of $1.2 million. Net loss attributable to BioTime includes losses from BioTime’s majority owned and consolidated subsidiaries based upon BioTime’s percentage ownership of those subsidiaries.

On May 10, 2016 Aradigm Corporation (NASDAQ: ARDM) (the "Company") reported financial results for the first quarter and three months ended March 31, 2016 (Press release, Aradigm, MAY 10, 2016, View Source [SID:1234512241]).

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Liquidity and Capital Resources

On April 22, 2016, the Company announced the pricing of $23 million of its senior convertible notes due 2021 and related warrants to purchase 263,436 shares of the Company’s common stock in a private placement conducted pursuant to Regulation D under the Securities Act of 1933, as amended. The initial conversion rate will be 191.9386 shares of common stock for each $1,000 principal amount of notes, which represents an initial conversion price of approximately $5.21 per share of common stock. Interest on the notes will be paid semi-annually in arrears at the rate of 9% per year. The warrants are exercisable at an exercise price of $5.21 per share beginning on the later of 180 days after the date of issuance or the date the Company issues a press release announcing data related to the ORBIT-3 and ORBIT-4 Phase 3 pivotal clinical trials in non-cystic fibrosis bronchiectasis (non-CF BE) patients with chronic respiratory infections with Pseudomonas aeruginosa treated with the Company’s investigational product Pulmaquin (proprietary formulation of inhaled ciprofloxacin). The first closing of the sale of the notes and warrants occurred on April 25, 2016, and the second closing is expected to occur immediately after the Company’s resale registration statement to be filed in connection with the offering has been declared effective, each subject to customary closing conditions.

The Company intends to use the net proceeds from the offering, estimated to be $20.7 million, to fund the current clinical development and regulatory submission for licensure of Pulmaquin and for general corporate purposes.

As of March 31, 2016, the Company reported cash and cash equivalents of $22.4 million which did not include the proceeds from the first closing of the private placement offering of $23 million senior convertible notes.

First Quarter 2016 Financial Results

The Company recorded $6,000 in revenue in the first quarter of 2016 compared with $8.8 million in revenue in the first quarter of 2015. The reduction in revenue occurred because the Company utilized in prior periods the full amount of the $65 million of Grifols-funded budget provided under the inhaled ciprofloxacin collaboration arrangement for funding the bronchiectasis program.

Total operating expenses for the first quarter of 2016 were $8.1 million, compared with total operating expenses of $9.9 million for the first quarter of 2015. The decrease in research and development expenses was due to lower contract manufacturing and clinical trial costs because the manufacturing, labeling and packaging expenses for clinical supplies and the enrollment activities of the Pulmaquin Phase clinical trials are complete, offset by higher employee-related expenses due to the higher number of employees and higher consulting expenses in support of the Pulmaquin bronchiectasis regulatory process towards US and EU approvals for market authorization. General and administrative costs were higher primarily due to increased non-cash stock compensation expense and slightly higher legal expense.

Net loss for the first quarter of 2016 was $8.1 million or $0.55 per share, compared with a net loss of $1.2 million or $0.08 per share in the first quarter of 2015. Net loss increased due to lower contract revenue of $8.7 million, partially offset by lower operating expenses of $1.8 million.

About Pulmaquin

Pulmaquin is a dual release formulation composed of a mixture of liposome encapsulated and unencapsulated ciprofloxacin. Ciprofloxacin, available in oral and intravenous formulations, is a widely prescribed antibiotic. It is used to treat acute lung infections and is often preferred because of its broad-spectrum antibacterial activity against various bacteria, such as Pseudomonas aeruginosa. Pulmaquin is being evaluated in two ongoing Phase 3 studies to determine its safety and effectiveness as a once-a-day inhaled formulation for the chronic treatment of patients with non-CF BE who have chronic lung infections with Pseudomonas aeruginosa.

Following Phase 2a development of the liposomal portion of Pulmaquin (Lipoquin) and Phase 1 development of Pulmaquin, the Phase 2b study ORBIT-2 with Pulmaquin was a 24-week multicenter, randomized, double-blind, placebo-controlled trial in 42 adult non-CF BE subjects. This study demonstrated a significant reduction in P.aeruginosa sputum activity (p=0.002) and a decrease in time to first exacerbation in the per protocol population (p=0.046) and the mITT (p=0.057) populations in the Pulmaquin treated subjects compared to placebo. Overall, the incidence of all treatment emergent adverse events was similar between groups. The most frequently reported treatment related adverse events (reported by ≥ 3 patients in either treatment group) included product taste abnormal and nausea in the Pulmaquin group and wheezing in the placebo group. No serious adverse events were considered treatment related. There were no deaths reported during ORBIT-2.

The Phase 3 clinical program for Pulmaquin in non-CF BE consists of two worldwide, double-blind, placebo-controlled pivotal trials (ORBIT-3 and ORBIT-4) that are identical in design except for a pharmacokinetics sub-study to be conducted in one of the trials. Each trial has enrolled patients (278 in ORBIT-3 and 304 in ORBIT-4) into a 48-week double-blind period consisting of 6 cycles of 28 days on treatment with Pulmaquin or placebo plus 28 days off treatment, followed by a 28 day open label extension in which all participants will receive Pulmaquin (total treatment duration approximately one year). The superiority of Pulmaquin vs. placebo during the double-blind period is being evaluated in terms of the time to first pulmonary exacerbation (primary endpoint), while key secondary endpoints include the reduction in the number of pulmonary exacerbations and improvements in the quality of life measures. Lung function is being monitored as a safety indicator.

Aradigm has been granted orphan drug designations for liposomal ciprofloxacin as well as for ciprofloxacin for inhalation for non-CF BE in the U.S. In addition, the U.S. Food and Drug Administration (FDA) has designated Pulmaquin as a Qualified Infectious Disease Product (QIDP). The QIDP designation is granted for treatment of non-CF BE patients with chronic lung infections with Pseudomonas aeruginosa. The QIDP designation made Pulmaquin eligible for Fast Track designation which was granted by the FDA in September 2014.

In 2013, Aradigm granted an exclusive, world-wide license for the Company’s inhaled liposomal ciprofloxacin product candidates for the indication of non-CF BE and other indications to Grifols S.A. More information on the terms of this license may be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 13, 2014.

About Non-Cystic Fibrosis Bronchiectasis

Non-CF BE is a severe, chronic and rare disease characterized by abnormal dilatation of the bronchi and bronchioles, frequently associated with chronic lung infections. It is often a consequence of a vicious cycle of inflammation, recurrent lung infections, and bronchial wall damage. Non-CF BE represents an unmet medical need with high morbidity and mortality that affects more than 110,000 people in the U.S. and over 200,000 people in Europe. There is currently no drug approved for the treatment of this condition.

On May 10, 2016 Aptose Biosciences Inc. (NASDAQ:APTO) (TSX:APS), a clinical-stage company developing new therapeutics and molecular diagnostics that target the underlying mechanisms of cancer, reported unaudited financial results for the three months ended March 31, 2016 and reported on corporate developments (Press release, Aptose Biosciences, MAY 10, 2016, View Source;p=RssLanding&cat=news&id=2167184 [SID:1234512240]). Unless specified otherwise, all amounts are in Canadian dollars.

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Net loss for the three months ended March 31, 2016 was $5.1 million ($0.42 per share) compared with $3.6 million ($0.30 per share) during the three months ended March 31, 2015. Total cash and cash equivalents and investments at March 31, 2016 were $15.0 million.

"During the first quarter we made considerable progress towards developing an improved methodology to create a stable formulation of APTO-253 for returning to the clinic," said William G. Rice, Ph.D., Chairman, President and Chief Executive Officer. "Our team has diligently tested the performance of the drug product in the IV delivery system used for patients, as well as performed numerous manufacturing, formulation development and stability and solubility studies. We believe that we are close to defining a methodology that can deliver a clinical drug product of the utmost quality and functionality. We look forward to sharing our findings with the FDA, as we seek to re-initiate dosing at our existing Phase 1b clinical trial sites and initiating dosing at our new sites in patients with acute myeloid leukemia and other hematologic malignancies."

Corporate Highlights
During the first quarter, and in collaboration with a qualified formulation contract manufacturing organization (CMO), Aptose explored numerous methodologies to identify conditions that would enhance the solubility and stability properties of the APTO-253 formulation drug product.

The company has made significant progress toward selecting a formulation methodology to manufacture a new batch of drug product that is unlikely to cause clogging of the in-line filters in the clinical setting.

Aptose scientists demonstrated that, in addition to reversing the leukemogenic dysregulation of the KLF4 gene expression, APTO-253 inhibits expression of the c-Myc oncogene in a concentration and time-dependent manner in AML cells. The c-Myc oncogene is a major driver of cancer cell proliferation, and inhibition of c-Myc gene expression and c-Myc protein levels by APTO-253 suggests APTO-253 may have anti-cancer application among a host of hematologic malignancies and solid tumors.

Aptose’s clinical team has prepared additional clinical sites at major cancer research and treatment centers in preparation to enroll patients for dosing of APTO-253. The expedited engagement of these new sites is intended to ensure an accelerated pace of patient accrual in the company’s ongoing Phase 1b clinical study after lifting of the clinical hold.

Subsequent to the quarter end, the company issued 115,927 common shares under the at-the-market facility for gross proceeds of approximately US $297 thousand.
Financial Results
Net loss for the three months ended March 31, 2016 was $5.1 million ($0.42 per share) compared with $3.6 million ($0.30 per share) during the three months ended March 31, 2015. The increase in net loss is due to increased research and development costs related to APTO-253, as well as a foreign exchange loss on USD cash and cash equivalents balances due to the appreciation of the Canadian dollar during the quarter.
Aptose utilized cash of $4.5 million in operating activities in the three months ended March 31, 2016 compared with $2.2 million in the three months ended March 31, 2015. The increase in cash used in operating activities in the current period is due to an increased net loss compared with the prior year, as well as a reduction in accounts payable and accrual balances during the quarter compared with an increase in these balances in the three months ended March 31, 2015.
Research and Development
Research and development expenses totaled $2.3 million in the three months ended March 31, 2016 compared to $884 thousand in the prior year period. Research and development costs consist of the following:
Components of research and development expenses:
Three months ended
(in thousands) March 31,
2016 March 31,
2015

Program costs $ 2,247 $ 860
Stock-based compensation 56 19
Depreciation of equipment 12 5
$ 2,315 $ 884

The increase in research and development costs in the three months ended March 31, 2016 compared with the three months ended March 31, 2015 is due to the following reasons:
Costs associated with the LALS/Moffitt collaboration developing epigenetic single molecule inhibitors of multiple targets, including the bromodomain and extraterminal domain (BET) proteins, and other kinases for which no comparable expenses existed in the prior year;
Formulation and manufacturing costs associated with APTO-253 and the root cause analysis of the filter clogging identified in November 2015;
Increased Contract Research Organization costs related to consultants and advisors as the company works towards returning APTO-253 to the clinic; and
Increased research and clinical operations headcount.
Stock-based compensation costs allocated to research and development increased in the three months ended March 31, 2016 to reflect option grants to new employees.
General and Administrative
General and administrative expenses totaled $2.6 million for the three months ended March 31, 2016 compared to $2.7 million in the three months ended March 31, 2015. General and administrative expenses consist of the following:
Components of general and administrative expenses:
Three months ended
(in thousands) March 31,
2016 March 31,
2015

General and administrative excluding salaries $ 1,133 $ 1,029
Salaries 975 753
Stock-based compensation 479 940
Depreciation of equipment 21 7
$ 2,608 $ 2,729

General and administrative costs excluding salaries are higher in the three months ended March 31, 2016 compared with the prior year due to higher rent costs associated with an additional office location, additional patent costs due to timing, as well as a depreciation in the Canadian dollar compared with the prior year period which has resulted in an increase to the cost of our US dollar denominated expenditures.
Increased salary costs have increased in the three months ended March 31, 2016 compared with the prior year due to additional headcount, the establishment of a benefits plan for employees in the United States and higher Canadian dollar salary costs for our US employees due to the lower value of the Canadian dollar during the three month period.
Stock-based compensation costs decreased in the three months ended March 31, 2016 compared with prior year due to large option grants in June and July 2014 which vested 50% during the first year and therefore contributed to higher stock based compensation expense during the first twelve-month period.
Finance Expense
Finance expense for the three months ended March 31, 2016 was $196 thousand compared with $60 thousand for the three months ended March 31, 2015. Finance expense includes the following items:
Three months ended
(in thousands) March 31,
2016 March 31,
2015
Interest expense $ − $ 20
Foreign exchange loss 196 40
$ 196 $ 60

Interest expense for the three months ended March 31, 2015 relates to interest accrued at a rate of 10% on the remaining balance of convertible promissory notes issued in September 2013 as well as accretion expense related to the conversion feature of the notes. All of the promissory notes have now been converted into common shares.
Foreign exchange loss in the three months ended March 31, 2016 is the result of a decrease in the value of our US dollar denominated cash and cash equivalents balances during the period due to the appreciation of the Canadian dollar compared to the US dollar.
Finance Income
Finance income, consisting solely of interest income, totaled $47 thousand in the three months ended March 31, 2016 compared to $104 thousand in the three months ended March 31, 2015. Interest income represents interest earned on cash and cash equivalent and investment balances.

Aptose Biosciences Inc.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(unaudited)

Three Three
months ended months ended
(amounts in 000’s of Canadian Dollars except for per common share data) March 31, 2016 March 31, 2015
REVENUE $ - $ -

EXPENSES

Research and development 2,315 884

General and administrative 2,608 2,729

Operating expenses 4,923 3,613

Finance expense 196 60

Finance income (47 ) (104 )

Net financing income 149 (44 )

Net loss and comprehensive loss for the period 5,072 3,569

Basic and diluted loss per common share $ 0.42 $ 0.30

The press release, the financial statements and the management’s discussion and analysis for the quarter ended March 31, 2016 will be available on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml