On May 09, 2016 Apricus Biosciences, Inc. (Nasdaq:APRI), a biopharmaceutical company advancing innovative medicines in urology and rheumatology, reported financial results for the first quarter of 2016 and provided a corporate update on its priorities for 2016 (Press release, Apricus Biosciences, MAY 9, 2016, View Source;p=RssLanding&cat=news&id=2166289 [SID:1234512311]). Apricus will hold a previously announced webcast this morning at 8:00 am PDT with Edward D. Kim, M.D., a member of the Company’s Scientific Advisory Board and a Vitaros clinical investigator, to discuss the Vitaros opportunity as part of the Company’s corporate activities concurrent with the American Urological Association’s 2016 Annual Meeting, May 6 – 10 in San Diego. Please join the webcast at www.apricusbio.com to view the presentation slides or, to participate by telephone, dial (877) 841-3961 (Domestic) or (201) 689-8589 (International). The conference ID number is 13633850.

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"In March, we sharpened our focus on growth of the Vitaros brand, as we streamlined our organization in an effort to align our corporate strategy and our financial resources with the goal of achieving profitability in 2017," stated Richard W. Pascoe, Chief Executive Officer. "Importantly, we experienced record Vitaros royalties in Europe in the first quarter of 2016 and we continue to have a productive dialogue with the Food and Drug Administration ("FDA") regarding the Vitaros New Drug Application ("NDA") resubmission content and format. As such, we remain on track to resubmit the NDA for Vitaros U.S. in the third quarter of 2016 with an approval decision expected after a six month review period. Finally, we will continue to work closely with our partners to grow Vitaros revenue by supporting additional regulatory approvals and launches, licensing additional territories, and leveraging our existing partnerships to help ensure Vitaros is actively commercialized in all approved territories."

First Quarter Highlights and Recent Developments

Apricus recently updated its corporate goals to focus on increasing Vitaros’ value through the fostering and expansion of its commercial partnerships, in the U.S. and globally, and strengthening the Company’s financial position. First quarter and recent highlights include:

Closed on a $10 million registered direct offering with certain institutional investors, including existing investors Sarissa Capital and Aspire Capital;
Reported top-line Phase 2b data for fispemifene in symptomatic secondary hypogonadism that failed to achieve statistical significance in key clinical benefit endpoints and abandoned further clinical activities surrounding fispemifene; and
Expanded the Company’s exclusive distribution agreement with Ferring Pharmaceuticals to market Vitaros in the United Kingdom as part of the Company’s ongoing initiative to consolidate Vitaros territories with existing partners in an effort to maximize efficiencies and revenue.
2016 Priorities

Apricus is focused on achieving the following key strategic objectives:

Vitaros* (alprostadil)

Continue implementation of the U.S. regulatory approval strategy to address the safety and manufacturing issues raised by the FDA in the original Vitaros NDA submission, with an NDA resubmission on target for the third quarter of 2016;
Continue to support the Company’s ex-U.S. partners’ efforts to increase revenue in countries where partners have launched Vitaros, seek solutions to ensure that Vitaros is available to patients in every country where it is approved but not currently marketed, support new commercial launches by the Company’s partners and assist the Company’s partners in obtaining additional regulatory approvals in their respective territories; and
Continue to generate the required data in 2016 to support delivery device improvements and related regulatory submission(s) with a priority to support the U.S. NDA resubmission of the refrigerated version of Vitaros.
RayVa (alprostadil)

Complete the formulation development for at-home dosing;
Finalize the Phase 2b study protocol;
Explore Orphan Drug Designation in the U.S. and EU; and
Explore global or regional partnerships prior to initiating the Phase 2b study.
First Quarter Financial Results

Revenue during the quarter ended March 31, 2016 was $0.6 million, compared to revenue of $0.5 million during the first quarter of 2015. Revenue during the quarter ended March 31, 2016 was comprised of $0.4 million in royalty revenues, an increase of $0.3 million or 317% over the quarter ended March 31, 2015. Revenue during the quarter ended March 31, 2015 included $0.4 million in license fee revenue related to the expansion of the Company’s license agreement with Sandoz to commercialize Vitaros in certain Asian and Pacific countries. Basic net loss for the quarter ended March 31, 2016 was $2.5 million, or basic loss per share of $0.05, compared to a net loss of $6.4 million, or $0.13 per share for the first quarter of 2015. Reducing the net loss for the quarter ended March 31, 2016 was a non-cash change in the fair value of the Company’s warrant liability in the amount of $2.6 million.

As of March 31, 2016, cash and cash equivalents totaled $6.9 million, compared to $3.9 million as of December 31, 2015.

2016 Financial Outlook

Early in the second quarter of 2016, Apricus reduced its staff, including the executive team, by approximately 30%, decreased the size of the Board by one member and reduced the Board’s cash compensation. Apricus plans to continue to reduce operating expenses (excluding non-cash stock-based compensation expense and depreciation expense), with a goal of achieving reductions of approximately 30% in 2016 and 60% in 2017 as compared to 2015 operating expenses (excluding non-cash stock-based compensation expense and depreciation expense).

In 2016, Apricus expects to continue to generate cash from milestone or licensing payments and royalty revenues from its partners’ sales of Vitaros. Apricus will also continue to pursue out-licensing opportunities for Vitaros in Asia-Pacific. Apricus’ expenditures will include minimal costs for the preparatory Phase 2b clinical development of RayVa, as well as costs for activities associated with supporting the regulatory approval of Vitaros in the U.S. and the commercialization of Vitaros in Europe.

On May 9, 2016 PureTech Health plc ("PureTech," LSE: PRTC) reported the launch of Vor BioPharma, an immuno-oncology company dedicated to developing a new class of targeted cell therapies (Press release, FierceBiotech, MAY 9, 2016, View Source [SID:1234512233]). The company, which is advancing a novel approach to chimeric antigen receptor (CAR) T-cell therapy, has licensed its core technology from the lab of Vor scientific co-founder, Siddhartha Mukherjee, M.D., Ph.D., Assistant Professor of Medicine at Columbia University and Pulitzer Prize-winning author of The Emperor of All Maladies: A Biography of Cancer.

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"PureTech is excited to be collaborating with Sid Mukherjee and to have the support of a world-class team of immunologists and oncologists"
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"CAR T-cell therapies have shown remarkable progress in the clinic, yet their applicability beyond a small subset of cancers is currently very limited," said Sanjiv Sam Gambhir, M.D., Ph.D., Vor Scientific Advisory Board Member, Professor of Radiology and Bioengineering, Chair of the Department of Radiology, Director of the Canary Center for Cancer Early Detection and Director of the Molecular Imaging Program at Stanford University. "This technology seeks to address bottlenecks that prevent CAR T-cell therapy from becoming more broadly useful in treating cancers outside of B-cell cancers."

Researchers continue to make big advances in using the immune system to fight cancer. CAR T-cell therapy, which modifies the body’s own immune cells (T-cells) to recognize and kill cancer cells, has emerged as a promising therapy for patients with advanced B-cell leukemias. These approaches have focused on targeting markers that are present on all B-cells, both healthy and cancerous. While the body can safely function without B-cells, using CAR T-cell therapy to treat other cancers—which would involve targeting cells necessary for survival—remains elusive. Furthermore, CAR T-cell therapy has shown more limited results in treating solid tumors. Vor is developing an entirely new approach to CAR T-cell therapy that seeks to broaden its applicability in other cancers, particularly those with limited therapeutic options, by removing key barriers generated by current modalities.

"We continue to make great strides in developing new ways to treat cancer using the body’s immune system," said Dr. Mukherjee. "The positive clinical response researchers have achieved with CAR T-cell therapies in B-cell leukemias has led to great interest within the oncology community and is something we hope to achieve in other cancers over time."

"PureTech is excited to be collaborating with Sid Mukherjee and to have the support of a world-class team of immunologists and oncologists," said David Steinberg, Executive Vice President of PureTech Health and Co-Founder of Vor BioPharma. "We look forward to advancing this technology that has the potential to expand immuno-oncology to currently untreatable, fatal malignancies."

Leading oncologists and immunologists are supporting Vor in developing its pipeline of novel immunotherapies. The company’s team of scientific founders and Scientific Advisory Board (SAB) members includes:

Joseph Bolen, Ph.D. – Scientific Advisory Board member and acting Chief Scientific Officer of Vor BioPharma and former President and Chief Scientific Officer of Moderna Therapeutics. Dr. Bolen has more than 30 years of industry and research experience and has been at the forefront of cancer and immunology research. He began his career at the NIH, where he contributed to the discovery of a class of proteins known as tyrosine kinase oncogenes as key regulators of the immune system. Dr. Bolen most recently oversaw all aspects of research and development for Moderna. Previously, he was Chief Scientific Officer and Global Head of Oncology Research at Millennium: The Takeda Oncology Company. Prior to joining Millennium in 1999, Dr. Bolen held senior research and development positions at Hoechst Marion Roussel, Schering-Plough, and Bristol-Myers Squibb.
Sanjiv Sam Gambhir, M.D., Ph.D. – Professor of Radiology, Materials Science & Engineering, and Bioengineering at Stanford University, where he is also the Chair of the Department of Radiology, Director of the Canary Center for Cancer Early Detection and Director of the Molecular Imaging Program. His research focuses on interrogating cellular and molecular events in living subjects through imaging and on the early detection of cancer. He is the recipient of over $90M in NIH funding as the principal investigator and served on the NCI Board of Scientific advisors for eight years. Dr. Gambhir has received several awards including the Hounsfield Medal, Tesla Medal, Holst Medal, and is an elected fellow of the National Academy of Medicine, as well as the National Academy of Inventors. He has co-founded several startups and is an advisor to several large corporations and biotechnology startups.
Dan Littman, M.D., Ph.D. – Howard Hughes Medical Institute Investigator and the Helen L. and Martin S. Kimmel Professor of Molecular Immunology and Professor of Pathology and Microbiology at New York University (NYU) School of Medicine. Dr. Littman has made numerous groundbreaking discoveries in the field of virology and immunology, including identification and isolation of receptors required for human immunodeficiency virus (HIV) entry, molecular mechanisms of immune cells that mediate autoimmunity and the role of specific members of the gut microbiota in T-cell differentiation. Dr. Littman is a Fellow of the American Academy of Arts and Sciences and is a Member of the National Academy of Sciences. He was awarded the 2004 New York City Mayor’s Award for Excellence in Science and Technology.
Siddhartha Mukherjee, M.D., Ph.D. – Assistant Professor of Medicine at Columbia University and oncologist. Dr. Mukherjee is the author of The Emperor of All Maladies: A Biography of Cancer, winner of the 2011 Pulitzer Prize in general nonfiction, and The Laws of Medicine. He has published distinguished articles in numerous publications, including Nature, The New England Journal of Medicine, Cell and The New York Times.
Derrick J. Rossi, Ph.D. – Associate Professor in the Stem Cell and Regenerative Biology Department at Harvard Medical School and Harvard University. Dr. Rossi is an investigator in the Program in Cellular and Molecular Medicine at Boston Children’s Hospital, and is also a principal faculty member of the Harvard Stem Cell Institute. TIME Magazine cited Dr. Rossi’s discovery of modified-mRNA reprogramming as one of the top ten medical breakthroughs of 2010. TIME Magazine also named Dr. Rossi as one of "People Who Mattered" in 2010, and as one of the 100 Most Influential People (Time 100) in 2011. Dr. Rossi co-founded Moderna Therapeutics and Intellia Therapeutics.

On May 9, 2016 Cellular Biomedicine Group, Inc. (Nasdaq:CBMG) ("CBMG" or the "Company"), a clinical-stage biomedicine firm engaged in the development of effective stem cell therapies for degenerative diseases and immunotherapies for cancer, reported financial results for the first quarter ended March 31, 2016 and provided business highlights (Press release, Cellular Biomedicine Group, MAY 9, 2016, View Source [SID:1234512205]).

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"In the first quarter of 2016, we made several key clinical and business advancements that we expect will promote long-term growth and strengthen our presence in the cancer and osteoarthritis markets," commented Tony (Bizuo) Liu, CBMG’s Chief Executive Officer. "We reported encouraging Phase IIb data from our most advanced stem cell program for autologous adipose-derived mesenchymal progenitor cell (haMPC) ReJoin therapy for Knee Osteoarthritis (KOA), and launched a Phase I clinical trial for an off-the-shelf allogeneic haMPC AlloJoinTM therapy for KOA. The closing of a $43.13 million strategic investment through April 2016 brings us closer to reaching our objectives of launching multi-site clinical trials in immuno-oncology cell therapies in China, to file INDs and launch clinical trials for AlloJoinTM therapy for KOA patients in the US and to further strengthen our pipeline. We are determined to build on the momentum from the first quarter and believe that we can accomplish meaningful progress on our 2016 operating objectives."

First Quarter 2016 Financial Performance

Cash Position: Cash and cash equivalents as of March 31, 2016 were $15.7 million compared to $14.9 million as of December 31, 2015. We had an increase in cash generated from financing activities due to a private placement financing in February 2016 for gross proceeds of approximately $5 million.
Net Cash Used in Operating Activities: Net cash used in operating activities for the first quarter of 2016 was $3.58 million, compared to $2.41 million for the same period in 2015.
Revenue: Revenues in the first quarter of 2016 were $488,491 compared to $603,390 for the same period in 2015. The revenue in first quarter 2016 is solely comprised of the hospital’s technology services related to cell therapy treatments.
G&A Expenses: General and administrative expenses for the first quarter of 2016 were $2.8 million compared to $2.7 million for the same period in 2015.
R&D Expenses: Research and development expenses for the first quarter of 2016 were $2.40 million, compared to $1.46 million for the same period a year ago. The increase was primarily attributable to the increase of the Company’s immunotherapy research and development team and expenses related to clinical trials.
Net Loss: Net loss allocable to common stock holders was $4.2 million, compared to $4.3 million for the same period in 2015.
Business & Technology Highlights of 2016 To Date

Announced encouraging 48-week clinical data from the Phase IIb trial of the Company’s ReJoin haMPC therapy for Knee Osteoarthritis (KOA), revealing increase of patient’s knee cartilage volume and relief of pain;
Launched an investigator initiated Phase I clinical trial of an off-the-shelf allogeneic adipose-derived mesenchymal progenitor cell (haMPC) AlloJoinTM therapy for KOA patients in China;
Advanced the Company’s cash position following the closing of an agreement with Wuhan Dangdai Science & Technology Industries Group Inc. to invest up to $43.13 million for 2.27 million shares of the Company’s common stock, representing a 16.2% post-money stake investment as of April 15, 2016.

On May 9, 2016 Verastem, Inc. (NASDAQ:VSTM), focused on discovering and developing drugs to treat cancer, reported financial results for the first quarter ended March 31, 2016, and also provided an overview of certain corporate developments (Press release, Verastem, MAY 9, 2016, View Source;p=RssLanding&cat=news&id=2166539 [SID:1234512196]).

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"To date in 2016, Verastem has announced two new clinical collaborations with world-class organizations, including Merck KGaA and Pfizer, and Washington University in St. Louis and Merck & Co., to further elucidate the potential of FAK inhibition to enhance the efficacy of PD-(L)1 inhibitors in patients with pancreatic and ovarian cancer," said Robert Forrester, President and Chief Executive Officer of Verastem. "The data generated from these trials will continue to inform the ongoing development of our anti-cancer therapeutics which reduce cancer stem cells and modulate the local tumor microenvironment to allow both cancer treatments and the immune system to do their job more efficiently. We’ve had a strong start to 2016 with the announcement of these clinical collaborations in addition to attracting key strategic hires on the development team, including Dr. Greg Berk as Chief Medical Officer and Dr. Toyin Shonukan as Vice President of Clinical Development, to oversee and execute on our ongoing and future studies. We are well financed with approximately $100 million in available capital and we look forward to keeping you updated in the coming quarters on our progress."

First Quarter 2016 and Recent Highlights:
Focal Adhesion Kinase Inhibition Program
Clinical Collaboration with Pfizer and Merck KGaA to Evaluate Combination of VS-6063 and Avelumab in Ovarian Cancer – In March 2016, the companies announced a clinical trial collaboration agreement to evaluate the combination of Verastem’s focal adhesion kinase (FAK) inhibitor VS-6063 and Pfizer and Merck KGaA’s anti-PD-L1 immunotherapy avelumab. Verastem has previously reported initial signs of clinical activity in patients with ovarian cancer when VS-6063 is used in combination with paclitaxel. Under the terms of the agreement, the parties will conduct a planned Phase 1/1b clinical trial evaluating escalating doses of the combination of VS-6063 and avelumab as a potential treatment option for patients with advanced ovarian cancer.

Washington University in St. Louis Initiated a Clinical Study of VS-6063 in Combination with Merck & Co.’s Pembrolizumab and Gemcitabine in Pancreatic Cancer – In January 2016, Verastem announced the initiation of a Phase 1 dose-escalation study at Washington University to evaluate its FAK inhibitor VS-6063 in combination with Merck & Co.’s anti-PD-1 immunotherapy pembrolizumab and gemcitabine in patients with pancreatic cancer. The trial builds upon preclinical research conducted by Dr. David Denardo, presented at several conferences in late 2015 and early 2016, demonstrating the ability of FAK inhibition to increase the efficacy of checkpoint inhibition in the reduction of tumor volume and overall survival in models of pancreatic cancer. This Phase 1 clinical trial is currently enrolling and is anticipated to enroll approximately 50 patients with advanced pancreatic cancer.

Presented Scientific Data Supporting FAK Inhibition in Combination with Immunotherapy at Key Medical Meetings – During the first quarter of 2016, Verastem presented data in support of its new development programs focused on advancing its FAK inhibitors in combination with immune-oncology agents and other current and emerging standard of care cancer treatments. Data were presented at several medical and scientific meetings, including the 2016 American Academy of Cancer Research (AACR) (Free AACR Whitepaper), the Society for Gynecologic Oncology’s 2016 Annual Meeting on Women’s Cancer, the Keystone Symposium on Cancer Pathology, the Keystone Symposium on Stem Cells and Cancer, and Immunotherapy World 2016.

Presented Clinical Data from the Window of Opportunity Study at iMig 2016 – In May 2016, the Company announced results from the ongoing open-label, single-center, neoadjuvant Window of Opportunity study evaluating tolerability, along with biomarker and tumor volume response to VS-6063 (400mg BID) following either 12 days (Cohort 1) or 35 days (Cohort 2) of treatment in surgically-eligible patients with malignant pleural mesothelioma. Data analysis from Cohort 1 and Cohort 2 showed that VS-6063 was generally well tolerated with early signs of tumor reduction observed, with six of the twenty patients demonstrating an encouraging tumor reduction after brief treatment with VS-6063.

Development of VS-4718 Continues in Solid Tumors – Dosing continues in a Phase 1 dose escalation trial evaluating single-agent VS-4718 and a Phase 1 clinical trial evaluating VS-4718 in combination with gemcitabine and Abraxane is currently ongoing. Following results from the dose escalation trial, an expansion cohort of VS-4718 + Gemcitabine/Abraxane vs Gemcitabine/Abraxane alone in patients with pancreatic cancer is planned.

Dual PI3K/mTORC1/2 Inhibition Program
Confirmatory Recommended Phase 2 Dose and Expansion Cohorts – The maximum tolerated dose of single-agent VS-5584 has been reached in a Phase 1 study, and the recommended Phase 2 dose (RP2D) is being confirmed. Reductions in pharmacodynamic markers of PI3K and mTOR activity and clinical activity has been observed in some tumor types.

Corporate
Gregory I. Berk, MD Named Chief Medical Officer – In April 2016, the Company announced the appointment of Gregory I. Berk, MD as Chief Medical Officer. Dr. Berk, a highly accomplished physician and a well-regarded oncology veteran with more than 25 years of both industry and academic experience, will be responsible for leading the Company’s global clinical development strategy and clinical operations.

Announced Key Executive Management Appointments and Changes – In April 2016, the Company strengthened its management team through the appointment and promotion of several key individuals. Jonathan Pachter, PhD was promoted to Chief Scientific Officer, David Weaver, PhD was appointed Vice President, Translational Medicine, Joe Chiapponi, Vice President, Finance, was named Treasurer, Principal Accounting and Financial Officer and Oluwatoyin (Toyin) Shonukan, MD, has been appointed Vice President, Clinical Development. Dr. Shonukan most recently served as Senior Medical Director, Oncology Clinical Development at Vertex Pharmaceuticals and has held previous senior appointments at Millennium: The Takeda Oncology Company, Novartis Oncology and Eli Lilly.

First Quarter 2016 Financial Results
Net loss for the first quarter ended March 31, 2016 (2016 Quarter) was $8.3 million, or $0.22 per share, as compared to a net loss of $15.2 million, or $0.46 per share, for the first quarter ended March 31, 2015 (2015 Quarter). Net loss for the 2016 Quarter and 2015 Quarter, excluding non-cash stock-based compensation expense of $1.7 million and $2.9 million, was $6.6 million and $12.3 million, respectively.

Research and development expense for the 2016 Quarter was $4.2 million compared to $10.5 million for the 2015 Quarter. The $6.3 million decrease from the 2015 Quarter to the 2016 Quarter was primarily related to a decrease of $4.2 million in contract research organization expense for outsourced biology, chemistry, development and clinical services, which includes our clinical trial costs, a decrease in personnel related costs of $1.4 million, a decrease of approximately $550,000 in stock-based compensation, and a decrease of approximately $441,000 in travel, facilities and other research and development costs. These decreases were partially offset by an increase of approximately $276,000 in consulting fees.

General and administrative expense for the 2016 Quarter was $4.3 million compared to $4.7 million for the 2015 Quarter. The decrease of approximately $400,000 from the 2015 Quarter to the 2016 Quarter primarily resulted from approximate decreases in stock-based compensation expense of $734,000 and $148,000 in personnel related costs. These decreases were offset by an increase of approximately $411,000 in consulting and professional fees.

As of March 31, 2016, Verastem had cash, cash equivalents and investments of $99.5 million compared to $110.3 million as of December 31, 2015. Verastem used $10.8 million for operating activities during the 2016 Quarter settling one-time compensation payments, severance payments and paying down accounts payable and accruals.
The number of outstanding common shares as of March 31, 2016, was 36,992,418.

Financial Guidance
Based on current operating plans, we expect to have sufficient cash, cash equivalents and short-term investments to fund our research and development programs and operations into 2018.

About Focal Adhesion Kinase
Focal Adhesion Kinase (FAK) is a non-receptor tyrosine kinase encoded by the PTK-2 gene that is involved in cellular adhesion and, in cancer, metastatic capability. VS-6063 (defactinib) and VS-4718 are orally available compounds that are potent inhibitors of FAK. VS-6063 and VS-4718 utilize a multi-faceted approach to treat cancer by reducing cancer stem cells, enhancing anti-tumor immunity, and modulating the local tumor microenvironment. VS-6063 and VS-4718 are currently being studied in multiple clinical trials for their ability to improve patient survival.

About VS-5584
VS-5584 is an orally available compound that has demonstrated potent and highly selective activity against class 1 PI3K enzymes and dual inhibitory actions against mTORC1 and mTORC2. In preclinical studies, VS-5584 has been shown to reduce the percentage of cancer stem cells and induce tumor regression in chemotherapy-resistant models. Verastem is currently conducting a dose escalation trial of VS-5584 in patients with advanced solid tumors.

On May 9, 2016 Novocure (NASDAQ: NVCR), a commercial stage oncology company pioneering a novel therapy for solid tumors, reported financial results for the first quarter ended March 31, 2016, highlighting strong growth in prescriptions, active patients and reported revenues (Press release, NovoCure, MAY 9, 2016, View Source [SID:1234512153]).

First quarter 2016 highlights include:
Three months ended March 31,
2016 2015 % change
Non-financial
Prescriptions received in period(1) 755 437 73 %
Active patients at period end(2) 797 372 114 %

Financial, in millions (unaudited)

Revenues(3) $ 13.1 $ 5.2 151 %

Net loss $ (35.4 ) $ (23.3 )

Cash and cash equivalents at the end of period $ 115.9 $ 74.2
Short-term investments at the end of period $ 119.8 $ 22.0

(1) A "prescription received" is a commercial order for Optune that is received from a physician certified to treat patients with Tumor Treating Fields (TTFields) therapy for a patient not previously on TTFields therapy. Orders to renew or extend treatment are not included in this total. In the future, Novocure may have regulatory approvals and commercial programs for multiple clinical indications, at which time Novocure will recognize a commercial order as a prescription for the same patient for each clinical indication treated. For example, in the future, a patient may have a prescription for the treatment of lung cancer and a prescription for the treatment of brain metastases from the lung cancer.
(2) An "active patient" is a patient who is on TTFields therapy under a commercial prescription order as of the measurement date, including patients who may be on a temporary break from treatment and who plan to resume treatment in less than 60 days.
(3) For the reported periods, all revenues were recognized when cash was collected and all other revenue recognition criteria had been met.

"I am pleased to see commercial momentum building following the October 2015 FDA approval of Optune for the treatment of newly diagnosed GBM and the December 2015 publication of EF-14 phase 3 pivotal trial results in the Journal of the American Medical Association," commented Asaf Danziger, Chief Executive Officer. "Our sales and marketing teams are intensely focused on the education of oncologists as we introduce a completely new treatment modality to the market. I am extremely proud of the hard-earned progress we have made in the two quarters since approval." Mr. Danziger continued, "I believe that we are well positioned to deliver substantial year-over-year growth in 2016. We expect the incorporation of Optune for newly diagnosed GBM into treatment guidelines, the launch, pending FDA approval, of our second generation Optune system in the United States, and the continued expansion of our U.S. and German sales forces to provide additional catalysts to support our commercial execution. We are committed to bringing Optune to all GBM patients who may benefit from it." Wilco Groenhuysen, Chief Financial Officer, stated, "2015 started a transformational phase for Novocure with the October FDA approval of Optune for newly diagnosed GBM. I am pleased to report triple digit growth in both active patients and revenues in the first quarter of 2016 compared to the same period in 2015 and believe we will continue to see significant year-over-year growth in operating statistics and revenues throughout 2016." "As our commercial teams focus on execution within the glioblastoma indication, our R&D team continues to make progress toward developing TTFields for a variety of additional solid tumors," added William Doyle, Chairman. "We have five ongoing or completed phase 2 pilot trials in brain metastases, non-small cell lung cancer, ovarian cancer, pancreatic cancer and mesothelioma. We plan to open phase 3 pivotal trials in brain metastases and non-small cell lung cancer in 2016. In addition to our clinical development activities, our engineering team continues its work to improve all aspects of TTFields delivery to enhance ease-of-use for patients." 2016 First Quarter Operating Statistics and Financial Update Prescriptions in the quarter ended March 31, 2016, increased by 318 prescriptions, or 73 percent, compared to the same period in 2015. The increase in prescriptions was driven primarily by commercial activities in the United States after the October 2015 U.S. Food and Drug Administration (FDA) approval of Optune for the treatment of newly diagnosed glioblastoma (GBM), increased commercial activities in Germany, and enhanced awareness of Optune following the December 2015 publication of EF-14 phase 3 pivotal trial results in the Journal of the American Medical Association.
In the United States, 684 prescriptions were received in the quarter ended March 31, 2016, an increase of 273 prescriptions, or 66 percent, compared to the same period in 2015.
In Germany and other EMEA markets, 71 prescriptions were received in the quarter ended March 31, 2016, an increase of 45 prescriptions, or 173 percent, compared to the same period in 2015.
The conversion of prescriptions to new patients is driven by the prescription fill rate and the time to fill the prescription. The prescription fill rate for the 12 months ended March 31, 2016, was 75 percent. The increase or decrease in active patients in any given period reflects the number of new patients less the number of patients discontinuing therapy. The rate of patients discontinuing therapy is determined by the treatment duration for patients starting therapy in prior periods. Novocure expects average treatment duration of its total active patient population to increase as the ratio of newly diagnosed GBM to recurrent GBM active patients increases. The portion of Optune prescriptions for newly diagnosed GBM was more than 50 percent in the first quarter of 2016. There were 797 active patients on Optune therapy at March 31, 2016, an increase of 425 active patients, or 114 percent, compared to March 31, 2015. The increase in active patients was driven both by prescription growth and by an increase in the percentage of newly diagnosed GBM patients who started Optune in prior periods.
In the United States, there were 699 active patients on Optune therapy at March 31, 2016, an increase of 352 active patients, or 101 percent, compared to March 31, 2015.
In Germany and other EMEA markets, there were 98 active patients on Optune therapy at March 31, 2016, an increase of 73 active patients, or 292 percent, compared to March 31, 2015.
For the 12 months ended March 31, 2016, the average cash payment received was more than $14,000 per charged month in the United States. The difference between billed and paid amounts consists of patient financial assistance, charitable care, discounts, disputed underpayments and indirect taxes. Generally, Novocure’s average time to collect on billed charges ranges between four and five months in the United States. The "payment amount" and "average time to collect" metrics do not include Novocure’s experience with patients covered by the Medicare fee-for-service program, as Novocure has not received material payments from the Medicare fee-for-service program, or Novocure’s experience with patients outside of the United States. For the three months ended March 31, 2016, revenues increased to $13.1 million compared to $5.2 million for the same period in 2015, representing 151 percent growth. This growth was primarily driven by increased Optune adoption. For the three months ended March 31, 2016, cost of revenues increased to $8.0 million compared to $3.9 million for the same period in 2015, representing 105 percent growth. This was primarily driven by an increase in the cost of transducer array shipments due to an increase in active Optune patients as well as increased personnel costs to establish infrastructure necessary to support an increasing volume of shipments to patients. Research, development and clinical trials expenses for the three months ended March 31, 2016, were $11.4 million compared to $9.9 million for the same period in 2015, representing growth of 15 percent. This growth was primarily due to increased personnel costs and increased expenses related to clinical education and investigator-sponsored trials, partially offset by reduced expenses related to the development of the second generation Optune system. Sales and marketing expenses for the three months ended March 31, 2016, were $13.3 million compared to $6.4 million for the same period in 2015, representing growth of 109 percent. This growth was primarily due to increased personnel costs as well as increased marketing expenses to expand commercial operations in the United States and Germany and to establish commercial operations in Switzerland and Japan. General and administrative expenses for the three months ended March 31, 2016, were $12.3 million compared to $7.0 million for the same period in 2015, representing growth of 76 percent. This growth was primarily due to increased personnel costs as well as increased expenses related to professional services and activities associated with being a public company. Personnel costs for the three months ended March 31, 2016, included $5.5 million in non-cash share-based compensation expenses, comprised of $0.1 million in cost of revenues; $0.8 million in research, development and clinical trials; $1.3 million in sales and marketing; and $3.2 million in general and administrative expenses. Total non-cash share-based compensation expenses for Q1 2015 were $1.8 million. Net losses for the three months ended March 31, 2016, were $35.4 million compared to $23.3 million for the same period in 2015. As of March 31, 2016, we had $115.9 million in cash and cash equivalents and $119.8 million in short-term investments for a total balance of $235.8 million in cash, cash equivalents and short-term investments. Other first quarter 2016 corporate achievements
Expanded coverage: Novocure expanded coverage of Optune for the treatment of newly diagnosed and/or recurrent GBM to include more than 63 million additional lives through new policies with Anthem, Cigna, Humana, Regence Blue Cross Blue Shield, Preferred One, Univera Healthcare, and Asuris Northwest Health. This brought the total number of covered lives to more than 107 million in the United States as of March 31, 2016. Subsequent to the quarter end, positive coverage polices were issued by Group Health Cooperative Washington and Idaho, and Blue Cross Blue Shield of Michigan, bringing the total number of covered lives to more than 112 million in the United States as of May 1, 2016.
Second generation Optune system European launch: All Optune patients in Europe are now on the second generation of Optune, which is less than half the weight and half the size of the original commercial system.
PANOVA phase 2 pilot data in pancreatic cancer: Results from the first cohort of the PANOVA trial were presented at ASCO (Free ASCO Whitepaper) GI suggesting TTFields therapy plus chemotherapy may be safe as first-line treatment and improve survival of patients with advanced pancreatic cancer. Progression free survival and overall survival of patients treated with TTFields combined with gemcitabine were more than double those of gemcitabine-treated historical controls. Of the evaluable tumors, 30 percent had partial response and another 30 percent had stable disease.
Recognition as a clinical cancer advance by ASCO (Free ASCO Whitepaper): Phase 3 pivotal trial results of TTFields in combination with temozolomide for the treatment of newly diagnosed GBM were selected for inclusion in the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper)’s Clinical Cancer Advances 2016: Annual Report on Progress against Cancer. The report reviews the recent top advances and emerging trends in clinical cancer research that are leading to improved cancer treatments for patients.
Anticipated milestones over the next nine months
NCCN guidelines update: With the October 2015 FDA approval of Optune for the treatment of newly diagnosed GBM, Novocure expects that Optune should be added to the National Comprehensive Cancer Network (NCCN) Clinical Practice Guidelines in Oncology for Central Nervous System Cancers for newly diagnosed GBM in 2016.
FDA approval for the second generation Optune system: In December 2015, Novocure filed a premarket approval (PMA) supplement application with the FDA seeking approval of the second generation of Optune for the approved indications. The company subsequently received and, in April 2016, responded to questions from the FDA on the PMA supplement application. Assuming no further FDA comments or requests for additional information, the company hopes to begin marketing the second generation Optune system in the United States in the third quarter of 2016.
PANOVA phase 2 pilot trial last patient in: Following the approval of nab-paclitaxel, a taxane-based chemotherapy, for the treatment of advanced pancreatic cancer, the PANOVA study was expanded to include 20 additional patients treated with TTFields in combination with nab-paclitaxel and gemcitabine. Novocure expects to finish enrollment of the second patient cohort in 2016 and, with an expected six months follow-up, anticipates phase 2 pilot data will be available for presentation in 2017.
INNOVATE phase 2 pilot trial last patient in: In October 2014, the INNOVATE trial opened to study TTFields together with weekly paclitaxel for patients with recurrent ovarian cancer. The trial is expected to finish enrollment in 2016 and, with an expected six months follow-up, Novocure anticipates phase 2 pilot data will be available for presentation in 2017.
METIS phase 3 pivotal trial first patient in: Based upon pre-clinical data showing TTFields can prevent metastatic seeding in vivo and the established safety and efficacy of TTFields in GBM, Novocure believes TTFields could be an effective treatment for patients with brain metastases. Novocure submitted a pre-submission package to the FDA for discussion and feedback in December 2015 and submitted a full investigational device exemption (IDE) application in April 2015. The open-label randomized study will test the effectiveness of TTFields following stereotactic radiosurgery (SRS) compared with watchful waiting alone in patients with brain metastases stemming from non-small cell lung cancer. Novocure plans to open the trial in mid-2016 subject to FDA approval of the IDE.
LUNAR phase 3 pivotal trial first patient in: Novocure has completed a phase 2 pilot trial in advanced non-small cell lung cancer and is planning a randomized phase 3 pivotal trial for the treatment of non-small cell lung cancer. Given recent preclinical research of TTFields in combination with PD-1 inhibitors, the company is currently reviewing the protocol design to possibly capitalize on the potential synergies with taxane-based chemotherapies and the potential additivity with PD-1 inhibitors. The company plans to open the trial in late 2016 subject to FDA approval of the IDE.
Japanese approval for newly diagnosed GBM: Novocure submitted a partial amendment application to the Japanese Pharmaceuticals and Medical Devices Agency for the treatment of newly diagnosed GBM patients in December 2015 and hopes to receive Japanese Ministry of Health, Labour and Welfare (MHLW) approval in late 2016. The MHLW approved the use of Optune in patients with recurrent GBM in March 2015. The company plans to wait until MHLW approval for newly diagnosed GBM before submitting an application for public reimbursement in Japan.

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