On May 9, 2016 Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) reported results for the quarter ended March 31, 2016 (Press release, Teva, MAY 9, 2016, View Source;p=RssLanding&cat=news&id=2166269 [SID:1234512128]).
Q1 2016
Revenues $4.81 billion
Cash flow from Operations $1.38 billion
Non-GAAP EPS $1.20
GAAP EPS $0.62

Non-GAAP EPS adjusted to exclude December 2015 equity offerings was $1.36, in line with results in the first quarter of 2015.
Exchange rate fluctuations reduced revenues by $107 million and non-GAAP operating profit by $30 million.
Second quarter 2016 revenues are expected to be $4.7-$4.9 billion; non-GAAP EPS expected to be $1.16-$1.20; non-GAAP EPS, adjusted to exclude the impact of the December 2015 equity offerings, is expected to be $1.32-$1.36.
Our guidance for the second quarter of 2016 does not include any Actavis Generics revenues or profit. We expect to close the Actavis Generics acquisition in June 2016.
"We start 2016 with solid performance across the business, strong financial results and the achievement of several key milestones. Generics remains a core contributor to our performance despite no major launches in the U.S. this quarter as we had in the first quarter 2015 with continuous operational and financial improvement across the business. We finalized our acquisition of Rimsa and completed the business venture in Japan with Takeda. We continue to make important progress in our specialty business where we see great promise," stated Erez Vigodman, President & CEO of Teva. "Looking forward, we have several upcoming approvals and key clinical milestones in our pipeline and of course the much anticipated close of Actavis Generics. We are excited to be in the final stages of completing the acquisition of Actavis Generics, which will enable us to further realize the enormous potential in the growing global generics universe and deliver the benefits of this transaction to our stockholders, customers, patients and healthcare systems around the world."
First Quarter 2016 Results
Revenues in the first quarter of 2016 amounted to $4.8 billion, down 3% compared to the first quarter of 2015. Excluding the impact of foreign exchange fluctuations, revenues were down 1%.
Exchange rate differences (net of profits from certain hedging transactions) between the first quarter of 2016 and the first quarter of 2015 decreased revenues by $107 million, and both non-GAAP and GAAP operating income by $30 million.
Non-GAAP gross profit was $3.0 billion in the first quarter of 2016, down 2% from the first quarter of 2015. Non-GAAP gross profit margin was 62.7% in the first quarter of 2016, compared to 61.5% in the first quarter of 2015. GAAP gross profit was $2.8 billion in the first quarter of 2016, down 2% compared to the first quarter of 2015. GAAP gross profit margin was 58.0% in the quarter, compared to 56.9% in the first quarter of 2015.
Research and Development (R&D) expenses (excluding equity compensation expenses and purchase of in-process R&D) in the first quarter of 2016 amounted to $375 million, compared to $328 million in the first quarter of 2015. R&D expenses were 7.8% of revenues in the quarter, compared to 6.6% in the first quarter of 2015. R&D expenses related to our generic medicines segment increased 23% to $136 million, compared to $111 million in the first quarter of 2015. The increase is mainly due to increased development of complex generic products such as sterile and respiratory medicines. R&D expenses related to our specialty medicines segment increased 7% to $229 million, compared to $215 million in the first quarter of 2015, mainly due to increased development costs related to assets acquired through the Labrys and Auspex transactions.
Selling and Marketing (S&M) expenses (excluding amortization of purchased intangible assets and equity compensation expenses) amounted to $821 million, or 17.1% of revenues, in the first quarter of 2016, compared to $908 million, or 18.2% of revenues, in the first quarter of 2015. S&M expenses related to our generic medicines segment decreased 25% to $279 million, compared to $374 million in the first quarter of 2015. The decrease was mainly due to reduced royalties related to our sales of budesonide (Pulmicort) in the United States. S&M expenses related to our specialty medicines segment decreased 6% to $457 million, compared to $486 million in the first quarter of 2015.
General and Administrative (G&A) expenses (excluding equity compensation expenses) amounted to $294 million in the first quarter of 2016, or 6.1% of revenues, compared to $293 million and 5.9% in the first quarter of 2015.
Quarterly non-GAAP operating income was $1.5 billion, similar to the first quarter of 2015. Quarterly GAAP operating income was $1.2 billion in the first quarter of 2016, an increase of 56% compared to $0.7 billion in the first quarter of 2015.
We calculate EBITDA as non-GAAP operating income (which excludes amortization and certain other items) plus depreciation expenses for the period. In the first quarter of 2016, depreciation amounted to $108 million, compared to $113 million in the first quarter of 2015. EBITDA for the first quarter of 2016 amounted to $1.6 billion, down 1% compared to the first quarter of 2015.
Non-GAAP financial expenses amounted to $52 million in the first quarter of 2016, compared to $49 million in the first quarter of 2015. GAAP financial expenses for the first quarter of 2016 amounted to $298 million, compared to $192 million in the first quarter of 2015. The higher expenses, on a GAAP basis, were mainly the result of a $246 million impairment of net monetary assets following the devaluation in Venezuela.
The provision for non-GAAP income taxes for the first quarter of 2016 amounted to $302 million on pre-tax non-GAAP income of $1.5 billion, for a quarterly tax rate of 21%. The provision for non-GAAP income taxes in the first quarter of 2015 was $312 million on pre-tax non-GAAP income of $1.5 billion, for a quarterly tax rate of 21%. GAAP income tax expenses for the first quarter of 2016 amounted to $228 million or 26%, on pre-tax income of $867 million. In the first quarter of 2015, the provision for income taxes amounted to $104 million or 19%, on pre-tax income of $557 million. While the tax rate may fluctuate quarterly, we expect our annual tax rate for 2016 to be similar to that for 2015.
Non-GAAP net income attributable to ordinary shareholders and non-GAAP diluted EPS were $1.2 billion and $1.20, respectively, in the first quarter of 2016, compared to $1.2 billion and $1.36 in the first quarter of 2015. Non-GAAP EPS adjusted to exclude the December 2015 equity offerings was $1.36. GAAP net income attributable to ordinary shareholders and GAAP diluted EPS were $570 million and $0.62, respectively, in the first quarter of 2016, compared to $446 million and $0.52, respectively, in the first quarter of 2015.
Non-GAAP information: Net non-GAAP adjustments in the first quarter of 2016 amounted to $536 million. Non-GAAP net income and non-GAAP EPS for the quarter were adjusted to exclude the following items:
Financial expenses of $246 million related to the impairment of our net monetary assets in Venezuela following a change in exchange rates;
Amortization of purchased intangible assets totaling $189 million, of which $178 million is included in cost of goods sold and the remaining $11 million in selling and marketing expenses;
Acquisition and related expenses of $101 million;
Equity compensation of $24 million;
Restructuring expenses of $19 million;
Impairment of long-lived assets of $13 million;
Other non-GAAP items of $43 million;
Income from legal settlements and loss contingencies of $25 million; and
Corresponding tax benefit of $74 million.
Teva believes that excluding such items facilitates investors’ understanding of its business and financial results. See the attached tables for a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures.
Cash flow from operations generated during the first quarter of 2016 amounted to $1.4 billion, as in the first quarter of 2015. Free cash flow, excluding net capital expenditures, amounted to $1.2 billion, similar to the first quarter of 2015.
Cash and investments at March 31, 2016 decreased to $7.2 billion, compared to $8.4 billion at December 31, 2015, mainly due to the funding of the Rimsa acquisition.
For the first quarter of 2016, the weighted average outstanding shares for the fully diluted earnings per share calculation were 979 million on a non-GAAP basis and 920 million on a GAAP basis. The average weighted diluted shares outstanding used for the fully diluted share calculation for the first quarter of 2015 were 859 million shares, on both a non-GAAP and GAAP basis. The increase in the number of shares resulted from our December 2015 equity offerings, with the number of shares on a non-GAAP basis including the potential dilution resulting from our recently issued mandatory convertible preferred shares, which had a dilutive effect on our non-GAAP earnings per share.
Excluding the impact of the December 2015 equity offerings to finance the Actavis Generics acquisition, the weighted average outstanding shares for the fully diluted earnings per share calculation on a non-GAAP basis for the first quarter of 2016 was 861 million shares.
As of March 31, 2016, the fully diluted share count for calculating Teva’s market capitalization was approximately 1,003 million shares.
Total shareholders’ equity was $30.6 billion at March 31, 2016, compared to $29.9 billion at December 31, 2015.
Segment Results for the First Quarter 2016
Generic Medicines Segment
Three Months Ended March 31,
2016 2015
U.S.$ in millions / % of Segment Revenues

Revenues $ 2,170
100.0%
$ 2,621
100.0%
Gross profit 999 46.0% 1,284 49.0%
R&D expenses 136 6.3% 111 4.2%
S&M expenses 279 12.8% 374 14.3%
Segment profit* $ 584 26.9% $ 799 30.5%
____________________
* Segment profit consists of gross profit for the segment, less R&D and S&M expenses related to the segment. Segment profit does not include G&A expenses, amortization and certain other items.

Generic Medicines Revenues
Generic medicines revenues in the first quarter of 2016 amounted to $2.2 billion, a decrease of 17% compared to the first quarter of 2015. In local currency terms, revenues decreased 15%.
Generic revenues consisted of:
U.S. revenues of $976 million, a decrease of 32% or of $463 million, compared to the first quarter of 2015. The decrease resulted mainly from a decline in sales of $427 million due to the loss of exclusivity on esomeprazole (Nexium) and budesonide (Pulmicort).
European revenues of $671 million, a decrease of 1%, but up 1% in local currency terms, compared to the first quarter of 2015. This resulted mainly from our strategy of pursuing profitable and sustainable business in the region, along with higher API sales to third parties.
ROW revenues of $523 million, an increase of 4%, or 13% in local currency terms, compared to the first quarter of 2015. The increase in local currency terms was mainly due to higher revenues in Venezuela and Canada, which were partially offset by lower revenues in Japan and Russia.
API sales to third parties of $197 million (which is included in the market revenues above), an increase of 25% compared to the first quarter of 2015, with higher revenues in both Europe and the United States.
Generic medicines revenues comprised 45% of our total revenues in the quarter, compared to 52% in the first quarter of 2015.
Generic Medicines Gross Profit
Gross profit from our generic medicines segment in the first quarter of 2016 amounted to $1.0 billion, a decrease of 22% compared to the first quarter of 2015. The lower gross profit was mainly a result of the lower sales of esomeprazole (Nexium) and budesonide (Pulmicort) in the United States, which are both high gross profit products. This decrease was partially offset by higher gross profit of our ROW markets and API business. Gross profit margin for our generic medicines segment in the first quarter of 2016 decreased to 46.0%, from 49.0% in the first quarter of 2015.
Generic Medicines Profit
Our generic medicines segment generated profit of $584 million in the first quarter of 2016, a decrease of 27% compared to the first quarter of 2015. Generic medicines profitability as a percentage of generic medicines revenues was 26.9% in the first quarter of 2016, down from 30.5% in the first quarter of 2015. The decrease was primarily due to the lower gross profit of the segment, which was partially offset by lower S&M expenses.
Specialty Medicines Segment
Three Months Ended March 31,
2016 2015
U.S.$ in millions / % of Segment Revenues

Revenues $ 2,152
100.0%
$ 1,956
100.0%
Gross profit 1,871 86.9% 1,678 85.8%
R&D expenses 229 10.6% 215 11.0%
S&M expenses 457 21.2% 486 24.9%
Segment profit* $ 1,185 55.1% $ 977 49.9%
____________________
* Segment profit is comprised of gross profit for the segment, less R&D and S&M expenses related to the segment. Segment profit does not include G&A expenses, amortization and certain other items.

Specialty Medicines Revenues
Specialty medicines revenues in the first quarter of 2016 amounted to $2.2 billion, an increase of 10% compared to the first quarter of 2015. In local currency terms, revenues increased 11%. U.S. specialty medicines revenues amounted to $1.7 billion, up 13% compared to the first quarter of 2015. European specialty medicines revenues amounted to $394 million, a decrease of 3%, but flat in local currency terms, compared to the first quarter of 2015. ROW specialty revenues amounted to $81 million, up 13%, or 27% in local currency terms, compared to the first quarter of 2015.
Specialty medicines revenues comprised 45% of our total revenues in the quarter, compared to 40% in the first quarter of 2015.
The increase in specialty medicines revenues compared to the first quarter of 2015 was primarily due to higher sales of our CNS and respiratory products.
The following table presents revenues by therapeutic area and key products for our specialty medicines segment for the three months ended March 31, 2016 and 2015:

Three Months Ended
March 31,
Percentage
Change
2016 2015 2016 – 2015
U.S. $ in millions
CNS $ 1,323 $ 1,220 8%
Copaxone 1,006 924 9%
Azilect 113 107 6%
Nuvigil 103 85 21%
Respiratory 366 265 38%
ProAir 173 124 40%
QVAR 134 98 37%
Oncology 268 264 2%
Treanda and Bendeka 155 157 (1%)
Women’s Health 110 129 (15%)
Other Specialty 85 78 9%
Total Specialty Medicines $ 2,152 $ 1,956 10%

Global revenues of Copaxone (20 mg/mL and 40 mg/mL), the leading multiple sclerosis therapy in the U.S. and globally, amounted to $1.0 billion, an increase of 9% compared to the first quarter of 2015.
Copaxone revenues in the United States amounted to $821 million, an increase of 12% compared to the first quarter of 2015. The increase was mainly due to higher net pricing, including a price increase of 7.9% in January 2016. At the end of the first quarter of 2016, according to March 2016 IMS data, our U.S. market shares for the Copaxone products in terms of new and total prescriptions were 28.1% and 29.8%, respectively. Copaxone 40 mg/mL accounted for over 81% of total Copaxone prescriptions in the U.S.
Copaxone revenues outside the United States amounted to $185 million, a decrease of 4%, but an increase of 2% in local currency terms, compared to the first quarter of 2015.
Our global Azilect revenues amounted to $113 million, an increase of 6% compared to the first quarter of 2015. In local currency terms, revenues increased 7%. Global in-market sales decreased 13%.
Revenues of our respiratory products amounted to $366 million, up 38% compared to the first quarter of 2015. ProAir revenues in the quarter increased 40% to $173 million, compared to the first quarter of 2015, due to volume growth and positive price effects. QVAR global revenues increased 37% to $134 million in the first quarter of 2016, compared to the first quarter of 2015, mainly due to positive price effects.
Revenues of our oncology products amounted to $268 million in the first quarter of 2016, up 2% from the first quarter of 2015. Revenues of Treanda and Bendeka amounted to $155 million, down 1% compared to the first quarter of 2015.
Specialty Medicines Gross Profit
Gross profit from our specialty medicines segment amounted to $1.9 billion, an increase of $193 million compared to the first quarter of 2015. Gross profit margin for our specialty medicines segment in the first quarter of 2016 was 86.9%, compared to 85.8% in the first quarter of 2015.
Specialty Medicines Profit
Our specialty medicines segment profit amounted to $1.2 billion in the first quarter of 2016, up 21% compared to the first quarter of 2015, mainly due to higher gross profit and lower S&M expenses.
Specialty medicines profit as a percentage of segment revenues was 55.1% in the first quarter of 2016, up from 49.9% in the first quarter of 2015.
The following tables present details of our multiple sclerosis franchise and of our other specialty medicines for the three months ended March 31, 2016 and 2015:
Multiple Sclerosis
Three months ended March 31,
2016 2015
U.S.$ in millions / % of MS Revenues

Revenues $ 1,006
100.0%
$ 924
100.0%
Gross profit 919 91.4% 819 88.6%
R&D expenses 25 2.5% 27 2.9%
S&M expenses 89 8.9% 135 14.6%
MS profit $ 805 80.0% $ 657 71.1%

Other Specialty
Three months ended March 31,
2016 2015
U.S.$ in millions / % of Other Specialty Revenues

Revenues $ 1,146
100.0%
$ 1,032
100.0%
Gross profit 952 83.1% 859 83.2%
R&D expenses 204 17.8% 188 18.2%
S&M expenses 368 32.1% 351 34.0%
Other Specialty profit $ 380 33.2% $ 320 31.0%

Other Activities
Our OTC revenues related to PGT amounted to $288 million, an increase of 35% compared to $213 million in the first quarter of 2015. In local currency terms, revenues increased 47%, mainly due to inflation and higher volumes in Venezuela. PGT’s in-market sales amounted to $411 million in the first quarter of 2016, an increase of $37 million compared to the first quarter of 2015.
Other revenues amounted to $200 million in the first quarter of 2016, mostly from the distribution of third-party products in Israel and Hungary, compared to revenues of $192 million in the first quarter of 2015.
Financial Outlook
Pending the closing of the Actavis Generics acquisition, we are providing revenue and non-GAAP EPS guidance for the second quarter 2016. This includes the results of the Rimsa acquisition and the Teva-Takeda business venture, but not of the Actavis Generics acquisition. Additional guidance will be provided after closing the Actavis Generics acquisition.
We continue to work toward satisfying all conditions for the closing and, based on our estimate of the timing to obtain clearance from the U.S. Federal Trade Commission, we currently expect to close in June 2016.
We expect revenues for the second quarter of 2016 to be $4.7-$4.9 billion.
Non-GAAP EPS for the second quarter of 2016 is expected to be $1.16-$1.20. Excluding the impact of the December 2015 equity offerings, non-GAAP EPS is expected to be $1.32-$1.36.
Cash flow from operating activities for the second quarter of 2016 is expected to be $1.2-$1.3 billion.
These estimates reflect management`s current expectations for Teva’s performance in 2016. Actual results may vary, whether as a result of exchange rate differences, market conditions or other factors. In addition, the non-GAAP figures exclude the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements and reserves, impairments and related tax effects.
The non-GAAP data presented by Teva are the results used by Teva’s management and board of directors to evaluate the operational performance of the company, to compare against the company’s work plans and budgets, and ultimately to evaluate the performance of management. Teva provides such non-GAAP data to investors as supplemental data and not in substitution or replacement for GAAP results, because management believes such data provides useful information to investors.
Dividend
On May 5, 2016, the Board of Directors declared a cash dividend of $0.34 per ordinary share for the first quarter of 2016. For holders of our ordinary shares that are traded on the Tel Aviv Stock Exchange, the dividend will be converted into new Israeli shekels based on the official exchange rate as of May 9, 2016.
The record date will be May 24, 2016, and the payment date will be June 7, 2016. Tax will be withheld at a rate of 15%.
On March 15, 2016, we paid a dividend of $71 million (including withholding taxes) to the holders of record of our mandatory convertible preferred shares as of March 1, 2016.

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On May 09, 2016 Stemline Therapeutics, Inc. (Nasdaq:STML) reported financial results for the quarter ended March 31, 2016 (Press release, Stemline Therapeutics, MAY 9, 2016, View Source [SID:1234512127]).

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Ivan Bergstein, M.D., Stemline’s Chief Executive Officer, commented, "During the first quarter, we made substantial progress across our multiple clinical programs. In particular, we continued to advance our ongoing potentially pivotal Phase 2 trial of SL-401 in blastic plasmacytoid dendritic cell neoplasm (BPDCN). We look forward to sharing updated data from this trial at our principal investigator’s oral presentation at the upcoming annual meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper)."

Dr. Bergstein, continued, "Our team has executed extremely well, reaching our first quarter enrollment goals in our ongoing SL-401 trials in BPDCN and additional indications, as well as treating the first patients with SL-801 in our Phase 1 trial of advanced solid tumors. We also continue to meet accrual expectations in our SL-701 Phase 2 trial in second-line glioblastoma. With this level of performance, coupled with our strong cash position, we believe we have the resources to achieve significant clinical and regulatory milestones this year and beyond."

First Quarter 2016 Financial Results Review
Stemline ended the first quarter of 2016 with $87.8 million in cash, cash equivalents and investments, as compared to $97.5 million as of December 31, 2015, which reflects a cash burn of $9.7 million for the quarter. The company ended the first quarter of 2016 with 19.0 million shares outstanding.

For the first quarter of 2016, Stemline had a net loss of $9.0 million, or $0.51 per share, compared with a net loss of $7.7 million, or $0.46 per share, for the same period in 2015.

Research and development expenses were $6.5 million for the first quarter of 2016, which reflects an increase of $0.5 million, or 8%, compared with $6.0 million for the first quarter of 2015. The higher expenses during the first quarter were primarily attributable to the ramp up in clinical trial activities.

General and administrative expenses were $2.9 million for the first quarter of 2016, which reflects an increase of $1.1 million, or 58%, compared with $1.8 million for the first quarter of 2015. The increase in expense year over year was primarily attributable to higher non-cash stock based compensation and payroll costs relating to employees.

On May 09, 2016 Protalix BioTherapeutics, Inc. (NYSE MKT:PLX) (TASE:PLX), reported financial results for the fiscal quarter ended March 31, 2016 and provided a corporate update (Press release, Protalix, MAY 9, 2016, View Source;p=RssLanding&cat=news&id=2166296 [SID:1234512126]).

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"Over the past few months, Protalix has made great strides towards moving PRX-102 into phase III development," said Moshe Manor, Protalix’s President and Chief Executive Officer. "We filed a Special Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA), and have since been in close contact with the agency to implement its feedback. We anticipate completing the SPA with the FDA around mid-year 2016, and announcing the commencement of our phase III clinical development program for PRX-102 shortly thereafter. Additionally, we met with the European Medicines Agency (EMA), and we expect to reach and announce a clear path forward for PRX-102 in the European Union as well by mid-year."

"We are also very excited about the advancement of our PRX-110 and PRX-106 product candidates into advanced clinical trials in patients. Given results from earlier trials, both drug candidates have the potential to bring significant benefit to currently underserved patient populations worldwide."

Financial Results for the Period Ended March 31, 2016
Net loss for the quarter was $8.6 million, or $0.09 per share, for the three months ended March 31, 2016, an increase of $2.6 million, or 43%, from $6.0 million, or $0.06 per share, for the same period in 2015.

Total operating expenses increased to $8.0 million for the three months ended March 31, 2016 compared to $6.8 million for three months ended March 31, 2015, primarily due to the advancement of our entire pipeline into more advanced clinical stages.

Cash and cash equivalents as of March 31, 2016 were $66.7 million, which we expect to be sufficient to finance our activities into 2018 through significant milestones.

First Quarter Clinical and Corporate Highlights
Positive six and twelve month interim clinical data for PRX-102 for the treatment of Fabry Disease were presented at the 12th Annual WORLDSymposiumTM 2016 held in San Diego, CA. PRX-102 demonstrated effectiveness across all disease parameters including cardiac and kidney functions and showed very low levels of antibody formation.

SPA submitted to the FDA in connection with PRX-102 for the treatment of Fabry disease.

Successfully completed phase I clinical trial of PRX-110 in 18 healthy volunteers with clean safety profile.

Received approval from the Israeli Ministry of Health of the protocol for our phase II clinical trial of PRX-110 in Cystic Fibrosis patients. We anticipate initiation of the study before mid-year.

Proposed protocol for a phase II clinical trial of PRX-106 in Ulcerative Colitis patients in Israel filed with the Israeli Ministry of Health; the protocol is expected to be filed with a number of European ethics committees shortly, as well. We expect to announce initiation of the study during the third quarter.

On May 09, 2016 OXiGENE, Inc. (Nasdaq:OXGN), a biopharmaceutical company developing vascular disrupting agents (VDAs) for the treatment of orphan oncology indications, reported financial results for the first quarter of 2016 (Press release, OXiGENE, MAY 9, 2016, View Source [SID:1234512125]).

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For the three months ended March 31, 2016, OXiGENE reported a net loss of $3.3 million compared to a net loss of $2.8 million for the three months ended March 31, 2015. R&D expenses increased to $2.0 million in the first quarter of 2016 compared to $1.7 million in the first quarter of 2015, while general and administrative expenses increased to $1.4 million in the first quarter of 2016 compared to $1.1 million in the first quarter of 2015.

At March 31, 2016, OXiGENE had cash, cash equivalents and short-term investments of $22.9 million.

"We continued this past quarter to advance and strengthen our clinical programs, and I am optimistic about our future," stated William D. Schwieterman, M.D., OXiGENE’s President and Chief Executive Officer. "The FDA recently granted Fast Track designation for our lead investigational drug, CA4P, for the treatment of platinum-resistant ovarian cancer, and our phase 2/3 clinical trial in this program, called the FOCUS study, is expected to begin enrolling patients next month. We have received additional orphan drug designations for CA4P and we continue to believe our vascular-targeted therapies hold great promise for patients and present a great opportunity for shareholders."

On May 09, 2016 Oncothyreon Inc. (NASDAQ:ONTY), a clinical-stage biopharmaceutical company, reported a corporate update and reported financial results for the quarter ended March 31, 2016 (Press release, Oncothyreon, MAY 9, 2016, View Source [SID:1234512124]).

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"During the first quarter, the Company continued to advance its portfolio of oncology product candidates and achieved a major milestone with the commencement of the Phase 2 combination trial of ONT-380 with Herceptin and Xeloda in patients with HER2-positive, third-line metastatic breast cancer," said Scott Myers, President and CEO of Oncothyreon.

"In my short tenure so far, it is already clear the Company is committed to making an impact on the lives and outcomes of cancer patients, and I look forward to building upon that foundation," continued Mr. Myers. "In the coming months, the Company plans to review all programs and implement a development strategy for the optimal allocation of resources, with the goal of delivering novel therapies to cancer patients."

First Quarter and Recent Highlights:

Clinical Development:

ONT-380 Phase 2 Combination Trial Underway in Patients with HER2-Positive Breast Cancer. This randomized, double-blind, placebo-controlled trial is evaluating ONT-380 in combination with Herceptin (trastuzumab) and Xeloda (capecitabine). ONT-380 is an oral, HER2-selective, central nervous system (CNS)-active tyrosine kinase inhibitor. The Phase 2 trial is targeted to enroll approximately 180 heavily pretreated patients with advanced HER2-positive breast cancer who present with or without brain metastases. Building on encouraging Phase 1b results, the primary and secondary endpoint objectives are designed to measure ONT-380’s contribution on both systemic and CNS disease, an area of unmet need for patients.

Presentation of data highlighting the preclinical development of orally bioavailable, potent and selective checkpoint kinase 1 (Chk1) inhibitors. Results presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2016 highlighted preclinical data demonstrating that select Oncothyreon Chk1 inhibitors display cellular potency against Chk1, are active against a diverse range of cancer cell lines and demonstrate synergistic activity in combination with certain chemotherapeutic drugs. The pharmaceutical properties also indicate good metabolic stability and pharmacokinetic properties, with good oral bioavailability in preclinical models. The research was conducted pursuant to a research collaboration agreement with Sentinel Oncology.
Corporate Update:

Appointment of Scott Myers, President and CEO and member of the Board of Directors.
Scott Myers joined Oncothyreon on April 4, 2016. Mr. Myers most recently served as Chief Executive Officer and President for Aerocrine AB, a life sciences company based in Stockholm, Sweden and Morrisville, NC. Aerocrine was acquired by Circassia Pharmaceuticals, a UK-based immunotherapy company, in July of 2015. Mr. Myers also served as an independent Director for Orexo, AB, a pharmaceutical company and is currently an industry advisor to EQT, a large Scandinavian investment fund. Prior to joining Aerocrine in 2011, he served as Vice President, Head of European Mid-Markets for UCB Pharma, SA, a Belgian-based, global biopharmaceutical company. In this role, Mr. Myers oversaw commercial operations and medical affairs for 32 countries in the EU. Prior to UCB, he served in senior roles responsible for business development, strategic marketing and pharmaceutical portfolio management at several leading companies including Johnson & Johnson.

New board members appointed. In January 2016, Oncothyreon appointed new board members Mark Lampert and Gwen Fyfe, M.D. Mr. Lampert brings extensive biotechnology and finance experience to the board. He is the founder of BVF Partners L.P., affiliates of which, including Biotechnology Value Fund, L.P., have been stockholders of Oncothyreon since 2011. Dr. Fyfe previously served as vice president of Genentech’s oncology development group and later as vice president, Avastin Franchise Team at Genentech.
First Quarter 2016 Financial Highlights

Cash, cash equivalents and investments totaled $46.5 million as of March 31, 2016, compared to $56.4 million at December 31, 2015, a decrease of $9.9 million, or 17.6%. The decrease was primarily attributable to cash used to fund operations of $9.8 million.

Net loss for the quarter ended March 31, 2016 was $12.9 million, or $0.14 per basic and diluted share, compared with a net loss of $7.9 million, or $0.08 per basic and diluted share, for the comparable period in 2015. The increase in net loss for the quarter was primarily attributable to increases in general and administrative expenses of $4.3 million primarily related to the retirement and separation agreement that Oncothyreon entered into with its former CEO in January 2016 and increases in research and development expenses of $0.5 million primarily due to greater activity related to the development of the product candidates.
Financial Guidance

Oncothyreon believes the following financial guidance to be correct as of the date provided. Oncothyreon is providing this guidance as a convenience to investors and assumes no obligation to update it.

Oncothyreon currently expects operating expenses in 2016 to be higher than in 2015. This increase will primarily be related to expenditures associated with the Phase 2 trial of ONT-380. Oncothyreon currently expects cash used in operations in 2016 to be approximately $38.0 million to $40.0 million. With cash, cash equivalents and investments of $46.5 million as of March 31, 2016, Oncothyreon estimates that its cash, cash-equivalents and investments will be sufficient to fund operations for at least the next 12 months.

Upcoming Events

ONT-380 Poster Presentation at ASCO (Free ASCO Whitepaper) Annual Meeting:

Abstract 513: "Efficacy results of a phase 1b study of ONT-380, a CNS-penetrant TKI, in combination with T-DM1 in HER2+ metastatic breast cancer (MBC), including patients (pts) with brain metastases." Virginia F. Borges, MD from the University of Colorado Cancer center will discuss the poster at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting in Chicago on Sunday, June 5, 2016, from 11:30 a.m. – 12:45 p.m. CT in Hall D2, with a poster session preceding from 8 a.m. to 11:30 a.m. CT in Hall A.
R & D Day:

Oncothyreon will host an R & D Day in New York City on June 14, 2016. Company management will discuss an overview of the company’s lead product candidate, ONT-380. Several distinguished oncology thought leaders will also participate. This event will be webcast.