On May 4, 2016 Nordic Nanovector ASA (OSE: NANO), a biotechnology company focusing on the development of novel targeted therapeutics in haematology and oncology, reported that the first patient has been enrolled into one of the two new arms of its expanded Lymrit 37-01 clinical study with Betalutin (Press release, Nordic Nanovector, MAY 4, 2016, View Source [SID:1234511950]).

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Betalutin is a novel anti-CD37 targeting Antibody Radionuclide Conjugate in development for the treatment of major types of non-Hodgkin’s lymphoma (NHL), including Follicular Lymphoma (FL).

The new arm (Arm 3) is designed to investigate the safety and efficacy of Betalutin in up to 12 patients with relapsed FL pre-dosed with standard anti-CD20 immunotherapy (rituximab) on Day 0, a few hours prior to the administration of Betalutin.

Luigi Costa, Nordic Nanovector CEO, commented: "We are pleased to initiate the first of the two new cohorts in our ongoing clinical study, which represents a significant step forward in Betalutin’s development plan. Data we have seen to date suggest that we can achieve strong clinical efficacy with a regimen that controls haematological side effects. The two new arms are investigating if different pre-dosing regimens will allow the use of higher doses of Betalutin to potentially achieve even higher efficacy than that so far observed, and therefore an even more compelling product profile."

The Lymrit 37-01 study is a Phase 1/2 open label, single injection ascending dose study investigating three dose levels of Betalutin and different dosing regimens in patients with relapsed NHL with the aim of identifying an optimal dose regimen to take into the Phase 2 PARADIGME study, which is expected to start in 2H 2017.

Patient recruitment into the Phase 2 part of Arm 1 (15Mbq/kg plus 50mg/ml unconjugated "cold" HH1 anti-CD37 antibody) is progressing as planned with dose-escalation expected to begin in 2H 2016. Patient screening is also underway for the final arm in the expanded Lymrit 37-01 study (Arm 4), in which escalating doses of Betalutin plus pre-treatment with a higher dose of cold anti-CD37 antibody than in Arm 1 will be evaluated in relapsed FL patients.

A decision to increase the dose of Betalutin to 17.5 MBq/kg in Arm 1 can be made based on the evaluation of the safety and efficacy data observed in the 15 patients treated with 15 MBq/kg. A decision to increase the dose of Betalutin to 17.5 MBq/kg or 20 MBq/kg in one or the other of Arms 3 and 4 can be made based on the evaluation of the safety and efficacy data observed in the first three patients of both cohorts.

Data and analysis recently published at the American Association of Cancer Research annual meeting (16-20 April) confirmed that Betalutin was generally well tolerated and showed a 63.2% Overall Response Rate (ORR) and a 31.6% Complete Response (CR) in evaluable patients. Clinical responses observed were sustained, with Duration of Response exceeding 12 months in most responders in the 15 MBq/kg group who have been followed up for at least 12 months.

On May 4, 2016 Exelixis, Inc. (Nasdaq: EXEL) reported financial results for the first quarter of 2016 and provided an update on progress toward delivering upon its key 2016 corporate objectives and clinical development milestones (Press release, Exelixis, MAY 4, 2016, View Source;p=RssLanding&cat=news&id=2165093 [SID:1234511947]).

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Corporate Updates and Key Priorities for 2016

On April 25, 2016, the U.S. Food and Drug Administration (FDA) approved CABOMETYX (cabozantinib) tablets as a treatment for patients with advanced renal cell carcinoma (RCC) who have received prior anti-angiogenic therapy. With approval granted, Exelixis is highly focused on the U.S. commercial launch for CABOMETYX. CABOMETYX was shipped to wholesalers and pharmacies within three days of approval, with the first prescription filled on April 28, 2016. The European Medicines Agency (EMA) is reviewing the company’s Marketing Authorization Application (MAA) for cabozantinib for advanced RCC; assuming approval, the product would be marketed in the EU by the company’s corporate partner, Ipsen Pharma SAS (Ipsen).

Exelixis continues to work with its partner Genentech, a member of the Roche Group, to co-promote COTELLIC (cobimetinib) in the United States as a treatment for patients with BRAF V600E or V600K mutation-positive advanced melanoma, in combination with vemurafenib, also known as Zelboraf. COTELLIC is also approved in multiple other territories including the EU and Canada.

Corporate Highlights

Exclusive Licensing Agreement with Ipsen for Cabozantinib in Regions Outside the United States, Canada and Japan. On February 29, 2016, Exelixis announced an exclusive licensing agreement with Ipsen for the commercialization and further development of cabozantinib for its current and potential future indications, including COMETRIQ (cabozantinib) capsules, outside the United States, Canada and Japan. Pursuant to the parties’ agreement, Exelixis received an upfront payment from Ipsen of $200.0 million in the first quarter of 2016. The company is also eligible to receive regulatory milestones, including $60.0 million upon the approval of cabozantinib in Europe for advanced RCC and $50.0 million upon the filing and approval of cabozantinib in Europe for advanced hepatocellular carcinoma (HCC), as well as additional development and regulatory milestones for potential further indications. The agreement includes up to $545.0 million of potential commercial milestones and provides for Exelixis to receive tiered royalties up to 26% on Ipsen’s net sales of cabozantinib in its territories. Exelixis and Ipsen have agreed to collaborate on the global development of cabozantinib for current and potential future indications as well.

Cabozantinib Highlights

FDA Approval of CABOMETYX, the Third Approved Medicine to Have Been Discovered by Exelixis. On April 25, 2016, the U.S. FDA approved CABOMETYX for the treatment of patients with advanced RCC who have received prior anti-angiogenic therapy. CABOMETYX is the first therapy to demonstrate robust and clinically meaningful improvements in all three key efficacy parameters – overall survival (OS), progression-free survival (PFS) and objective response rate (ORR) – in a phase 3 trial (METEOR) for patients with advanced RCC.

The CABOMETYX label includes data from the second interim analysis of the METEOR trial’s OS secondary endpoint. In February 2016, Exelixis announced that CABOMETYX demonstrated a highly statistically significant and clinically meaningful improvement in OS as compared to everolimus. These results have been accepted as an oral presentation at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper)’s (ASCO) (Free ASCO Whitepaper) 2016 Annual Meeting, June 3-7, in Chicago, and will be presented in detail on Sunday, June 5, during the Oral Abstract Session: Genitourinary (Nonprostate) Cancer, 10:12 – 10:24 a.m.

Progress on EU Regulatory Filing for Cabozantinib in Advanced RCC. In January 2016, Exelixis submitted, and the EMA subsequently validated, the company’s regulatory application for cabozantinib as a treatment for patients with advanced RCC who have received one prior therapy. In validating the MAA, the EMA granted accelerated assessment, making the application eligible for a shortened 150-day review excluding clock-stops when information is requested from Exelixis. Exelixis intends to transfer the MAA to Ipsen later this year.

Continued Enrollment in CELESTIAL; Data Anticipated in 2017. Exelixis continues to make progress with enrollment of CELESTIAL, the phase 3 pivotal trial comparing cabozantinib to placebo in patients with advanced HCC who have previously been treated with sorafenib. Initiated in September 2013, the trial is designed to enroll 760 patients at approximately 200 sites. Patients are being randomized 2:1 to receive 60 mg of cabozantinib daily or placebo. The primary endpoint for CELESTIAL is OS, and the secondary endpoints include PFS and ORR. Exelixis continues to anticipate top-line results from CELESTIAL in 2017. At this time, there is no approved treatment for HCC patients who progress following sorafenib treatment, the current standard of care.

Broad Cabozantinib Development Program Updates. While Exelixis pursues cabozantinib’s late-stage development in advanced RCC and advanced HCC, earlier-stage investigation of the compound continues through the company’s collaboration with the National Cancer Institute’s Cancer Therapy Evaluation Program (NCI-CTEP), and its ongoing Investigator-Sponsored Trial (IST) program. Through these two programs, there are more than 45 ongoing or planned studies including trials in advanced RCC, bladder cancer, colorectal cancer, non-small cell lung cancer, and endometrial cancer.

Cabozantinib, Cobimetinib and XL888 Data Presentations at ASCO (Free ASCO Whitepaper) 2016. Exelixis-discovered compounds will be the subject of 18 presentations at the meeting. In addition to the OS results from the METEOR study in advanced RCC, there will be a poster presentation from the same trial on outcomes based on prior therapy. Additional presentations will highlight results from early and mid-stage trials of cabozantinib in other disease settings, including metastatic colorectal cancer, endometrial cancer and metastatic urothelial carcinomas. Cobimetinib data will include updates on combination trials of the compound in metastatic melanoma, triple-negative breast cancer, and colorectal cancer. Exelixis will also host an investor/analyst briefing at the meeting on Sunday, June 5, 2016; see the Investors & Media section of www.exelixis.com for more details when available.

Cobimetinib Highlights

Additional Regulatory Approvals for COTELLIC. In April and May 2016, Australia’s Therapeutic Goods Administration and Brazil’s ANVISA, respectively, approved COTELLIC for use in combination with Zelboraf for the treatment of patients with unresectable or metastatic melanoma with a BRAF V600 mutation. As previously announced, in February 2016 Health Canada approved COTELLIC in combination with Zelboraf for the treatment of patients with unresectable or metastatic melanoma with a BRAF V600 mutation.

2016 Financial Guidance

The Company is maintaining its guidance that operating expenses for the full year 2016 will be between $240 million and $270 million, including approximately $30 million of non-cash items primarily related to stock-based compensation expense.

"The first quarter of 2016, and the time period following it, was marked by important advances not only for our company, but for the patients we serve," said Michael M. Morrissey, Ph.D., president and chief executive officer of Exelixis. "Most notably, just a little over a week ago we announced that the FDA approved CABOMETYX for advanced RCC, a major milestone for the company. We are especially pleased that the label includes the robust overall survival data from the METEOR trial. CABOMETYX is now the first and only therapy to have demonstrated improvements in the three key efficacy parameters in a phase 3 trial of advanced renal cell carcinoma, one of the most common forms of cancer for men and women in the United States. We are moving quickly to introduce this new and important medicine to the medical community, with our experienced U.S. commercial team already in the field and meeting with healthcare providers. With our partner Ipsen, we are also well positioned to advance the process of seeking approval and potentially commercializing CABOMETYX in markets beyond the U.S., Canada and Japan."

First Quarter 2016 Financial Results

Net revenues for the quarter ended March 31, 2016 were $15.4 million, compared to $9.4 million for the comparable period in 2015. Net revenues for the first quarter of 2016 consisted of $9.1 million of net product revenue related to the sale of COMETRIQ, $5.0 million of contract revenues for a milestone earned from Merck in the first quarter of 2016 related to their worldwide license of our PI3K-delta program and $1.2 million of license revenues recognized from the upfront payment we received from Ipsen under our collaboration and license agreement.

Research and development expenses for the quarter ended March 31, 2016 were $28.9 million, compared to $22.3 million for the comparable period in 2015. The increase was primarily related to an increase in stock-based compensation expense for performance-based stock-options and an annual bonus to our employees in the form of fully-vested restricted stock units, an increase in personnel related expenses resulting from an increase in headcount and an increase in consulting and outside services for medical affairs and drug safety.

Selling, general and administrative expenses for the quarter ended March 31, 2016 were $34.9 million, compared to $9.5 million for the comparable period in 2015. The increase was primarily related to an increase in personnel related expenses resulting from an increase in headcount, predominantly connected to the expansion of our U.S. sales force, higher marketing expenses which includes a portion of commercialization expenses from COTELLIC under our collaboration agreement with Genentech, consulting and outside services expenses which includes an accrual for the estimated termination fee due to Sobi, and stock-based compensation expense for performance-based stock-options and an annual bonus to our employees in the form of fully-vested restricted stock units.

Other income (expense), net for the quarter ended March 31, 2016 was a net expense of ($12.2) million compared to ($12.4) million for the comparable period in 2015. The net expense is comprised primarily of interest expense which includes $7.2 million of non-cash expense related to the accretion of the discounts on both the 4.25% Convertible Senior Subordinated Notes due 2019 and the Company’s indebtedness under our Secured Convertible Notes due June 2018 held by entities associated with Deerfield for the quarter ended March 31, 2016, as compared to $7.7 million for the comparable period in 2015.

Net loss for the quarter ended March 31, 2016 was ($61.3) million, or ($0.27) per share, basic, compared to ($35.2) million, or ($0.18) per share, basic, for the comparable period in 2015. The increased net loss for the quarter was primarily due to increases in selling, general and administrative expenses and research and development expenses, partially offset by an increase in net revenues.

Cash and cash equivalents, short- and long-term investments and long-term restricted cash and investments totaled $407.6 million at March 31, 2016, which increased from $253.3 million at December 31, 2015 as a result of the $200.0 million upfront payment we received from Ipsen in connection with our February 29, 2016 licensing agreement.

Basis of Presentation

Exelixis adopted a 52- or 53-week fiscal year that generally ends on the Friday closest to December 31st. For convenience, references in this press release as of and for the fiscal periods ended April 1, 2016, January 1, 2016 and March 28, 2015 are indicated as being as of and for the periods ended March 31, 2016, December 31, 2015 and March 31, 2015, respectively.

On May 04, 2016 XOMA Corporation (Nasdaq:XOMA), a leader in the discovery and development of therapeutic antibodies, t recent operational achievements and financial results for the first quarter ended March 31, 2016 (Press release, Xoma, MAY 4, 2016, View Source [SID:1234511945]).

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"Our efforts are squarely focused on generating the data for XOMA 358 and understanding its potential impact in patients with rare hyperinsulinemia indications. Our top priority is our ongoing Phase 2 proof-of-concept study of XOMA 358 in patients with hypoglycemia due to congenital hyperinsulinism, which is progressing as anticipated. We are in the process of opening a third clinical site in Germany to offer European congenital hyperinsulinism patients increased opportunity to participate. We also recently opened our Phase 2 proof-of-concept study of XOMA 358 to post gastric bypass patients who develop a condition where they experience severe hypoglycemia after eating a meal. These actions are driving XOMA 358 towards our first data readouts in hyperinsulinemia patients, and we continue to believe we will be able to provide an update on our clinical experience with XOMA 358 later this summer," said John Varian, Chief Executive Officer of XOMA. "In addition to unmet medical need for a potential long-acting antibody to treat hyperinsulinemia indications, we believe there is an unmet medical need for a short-acting antibody treatment for severe acute hypoglycemia. The first data from XOMA 129, a novel antibody fragment derived from our XMetD program, were presented in April at the Endocrine Society’s Annual Meeting (ENDO 2016). These data support our continued development of XOMA 129 as a first-in-class targeted therapy for the treatment of acute hypoglycemic conditions."

"Our first quarter financial results show that we are executing our business priorities on budget," stated Tom Burns, Vice President, Finance and Chief Financial Officer of XOMA. "We out-licensed a phage display library, which generated $1.5 million in revenue, and we reduced our debt balance by paying the first €3.0 million installment on the Servier loan. We are confident we have the financial resources to fund our operations through at least the first quarter of 2017."

Recent Achievements

Initiated XOMA 358 proof-of-concept study in patients with hypoglycemia post gastric bypass surgery, representing the second rare hypoglycemic indication in which this first-in-class insulin receptor antibody is being studied.
Presented preclinical data from XOMA 129 at the ENDO 2016 conference. XOMA 129, the lead antibody fragment (Fab) from the XMetD program, binds to an allosteric site on the insulin receptor and was designed to have a rapid onset and limited duration of action, two important clinical requirements in reversing an acute hypoglycemic event. The data showed XOMA 129 exhibits the preclinical profile required to pursue further study as a novel potential treatment for severe acute hypoglycemic episodes.
Effected a novation of the Company’s existing contracts with the National Institutes of Allergy and Infectious Diseases (NIAID) for biodefense-related development activities to Nanotherapeutics, Inc. All associated assets, contracts, and materials have been transferred to Nanotherapeutics.
Terminated remaining XOMA clinical development of gevokizumab and initiated formal licensing activities.
First Quarter 2016 Financial Results
XOMA recorded total revenues of $4.0 million for the three months ended March 31, 2016, compared with $2.7 million during the corresponding period of 2015. The increase in first quarter 2016 revenues was due primarily to the receipt of $1.5 million from the licensure of a phage display library, an increase of $0.5 million in revenue recognized related to the loan agreement with Servier, and an increase of $0.2 million in milestone payments related to assets the Company previously licensed to other parties, which were partially offset by decreased revenues from NIAID and Servier.

Research and development (R&D) expenses for the first quarter of 2016 were $13.6 million compared with $20.0 million in the corresponding 2015 period. The decrease reflects a $5.0 million reduction in salaries and related expenses, a decrease of $0.7 million in depreciation and facility expenses due to the sale of the Company’s manufacturing facilities to Agenus Inc. in late 2015, and a decrease of $0.6 million in outside consulting fees due to the termination of the EYEGUARD Phase 3 program.

Selling, general and administrative expenses (SG&A) were $4.3 million for the three months ended March 31, 2016, compared with $5.2 million incurred during the same period in 2015, reflecting the reduction in salary and related personnel costs following the Company’s restructuring initiated in the third quarter of 2015.

For the first quarter ended March 31, 2016, XOMA had a net loss of $8.4 million compared with a net loss of $21.7 million in the quarter ended March 31, 2015. The net losses in the three months ended March 31, 2016 and 2015, included a $6.9 million gain and $40,000 loss, respectively, in non-cash revaluations of contingent warrant liabilities, resulting primarily from fluctuations in XOMA’s stock price. Excluding those revaluations, the net loss for the three months ended March 31, 2016, was $15.3 million compared with a net loss of $21.7 million for the same reporting period in 2015.

On March 31, 2016, XOMA had cash and cash equivalents of $46.2 million compared with $65.8 million at December 31, 2015. In January 2016, XOMA paid €3.2 million in principal and interest to Servier as stipulated in the companies’ amended loan agreement.

The Company expects its available capital will be sufficient to fund operations through at least the first quarter of 2017.

About XOMA 358
Insulin is the major physiologic hormone for controlling blood glucose levels. Abnormal increases in insulin secretion can lead to profound hypoglycemia (low blood sugar), a state that can result in significant morbidities, including brain damage, seizures and epilepsy. XOMA, leveraging its scientific expertise in allosteric monoclonal antibodies, developed the XMet platform, consisting of separate classes of selective insulin receptor modulators (SIRMs) that could have a major effect on treating patients with abnormal metabolic states. XOMA 358 binds selectively to insulin receptors and attenuates insulin action.

XOMA 358 is being investigated as a novel treatment for non-drug-induced, endogenous hyperinsulinemic hypoglycemia, as well as hypoglycemia after bariatric surgery and other related disorders. XOMA recently initiated Phase 2 development activities for XOMA 358 in patients with congenital hyperinsulinism, and in patients with hypoglycemia post bariatric surgery. A therapy that safely and effectively mitigates insulin-induced hypoglycemia has the potential to address a significant unmet therapeutic need for certain rare medical conditions associated with hyperinsulinism. More information on the XOMA 358 clinical trials may be found at www.clinicaltrials.gov.

About Congenital Hyperinsulinism
Congenital Hyperinsulinism (CHI) is a genetic disorder in which the insulin cells of the pancreas (beta cells) secrete inappropriate and excessive insulin. Ordinarily, beta cells secrete just enough insulin to keep blood sugar in the normal range. In people with CHI, the secretion of insulin is not properly regulated, causing excess insulin secretion and frequent episodes of low blood sugar (hypoglycemia). In infants and young children, these episodes are characterized by a lack of energy (lethargy), irritability or difficulty with feeding. Repeated episodes of low blood sugar increase the risk for serious complications, such as breathing difficulties, seizures, intellectual disability, vision loss, brain damage, coma, and possibly death. About 60 percent of infants with CHI experience a hypoglycemic episode within the first month of life. Other affected children develop hypoglycemia by early childhood. Current treatments for CHI are limited to medical therapy and surgical removal of part or all of the pancreas (pancreatectomy).

About Hypoglycemia Post Gastric Bypass Surgery
As the number of gastric bypass surgeries to treat severe obesity has increased, so too has the awareness that this population may experience postprandial hypoglycemia (low blood glucose following a meal) with symptoms developing months or years following the gastric bypass surgery. Postprandial hypoglycemia occurs with a range of severity in post-gastric bypass patients. The mild end of the spectrum may be managed largely through diet modification. The most severe forms are more prevalent in patients who underwent a Roux-en-Y procedure, and result in severe refractory postprandial hyperinsulinemic hypoglycemia with neuroglycopenic symptoms (altered mental status, loss of consciousness, seizures) that cannot be managed through diet modification. If currently available pharmacologic agents do not resolve the condition, these patients are treated with either a partial pancreatectomy or reversal of the gastric bypass.

About XOMA 129
XOMA 129 is a fully human, high affinity monoclonal antibody fragment that specifically targets the human insulin receptor. Insulin is the major hormone for lowering blood glucose levels. Profound hypoglycemia can result in significant morbidities, including organ damage and potentially death. There are acute and more persistent hypoglycemia conditions associated with abnormally high insulin levels, which represent unmet medical needs. As a negative allosteric modulator, XOMA 129 binds with high affinity to a site distinct from insulin binding and dampens insulin signaling. This drug candidate has been designed to provide a rapid onset of action and a duration of action tailored to meet the pharmacotherapy needs in certain conditions. The Company intends to pursue an Investigational New Drug (IND) application in the US for XOMA 129 upon completion of its IND-enabling nonclinical development activities.

On May 4, 2016 Sequenom, Inc. (NASDAQ: SQNM), a life sciences company committed to enabling healthier lives through the development of innovative products and services, today reported total revenues of $27.6 million, total accessioned units of 46,400, and a net loss of $13.4 million, or $0.11 per basic and diluted share, for the first quarter of 2016 (Press release, Sequenom, MAY 4, 2016, View Source [SID:1234511939]).

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"During the quarter, we executed on a number of key initiatives designed to return Sequenom to sustainable growth, resulting in quarter over quarter growth in our unit volume," said Dirk van den Boom, Ph.D., President and CEO of Sequenom. "Overall, we made meaningful progress toward achieving our goal of becoming financially self-sustaining while solidifying our position as a leader in reproductive health."

Operational Updates

To date in 2016, Sequenom and Sequenom Laboratories made significant progress on several key corporate objectives:

Total tests accessioned in the first quarter of 2016 reflect growth of 10% in test volume compared to the fourth quarter of 2015. Sequenom Laboratories’ total noninvasive prenatal test (NIPT) accessions in the first quarter of 2016 were up 3,900 units sequentially from the fourth quarter of 2015, for growth of 11%;
Completed the consolidation of Sequenom Laboratories’ North Carolina laboratory location into the San Diego laboratory location;
Enhanced San Diego laboratory productivity and restructured other key functions, consistent with the annualized cost reduction goal of greater than $20 million before the end of 2016;
Negotiated in-network contracts with Anthem Blue Cross and Blue Shield Health Plans for 11 states. Sequenom Laboratories has coverage for over 200 million commercial lives and 46 million lives under Medicaid programs;
Filed a writ of certiorari asking the U.S. Supreme Court to decide if the claims of Sequenom’s ‘540 patent are directed to patent-eligible subject matter;
Launched Sequenom Laboratories’ testing portfolio into the average-risk pregnancy market and optimized its sales approach to better serve the obstetrician channel; and
Introduced a multi-faceted physician and patient customer experience program that seeks to provide a best-in-class experience at every step of the customer journey.
First Quarter 2016 Results

First quarter 2016 revenues of $27.6 million declined 27% from $37.8 million in the first quarter of 2015. Revenues and unit volumes in the first quarter of 2016 were lower than the first quarter of 2015, primarily reflecting the conversion of certain laboratory customers to licensee status under the Pooled Patents Agreement, and a smaller amount available to collect during the first quarter of 2016 for testing services performed in prior periods. This latter factor reflects the improvement in the timeliness of Sequenom Laboratories collections as a result of additional payor contracts. These changes resulted in approximately $10 million in net revenue reduction for the first quarter of 2016 compared to the first quarter of 2015.

Total patient samples accessioned decreased by 12% to 46,400 patient samples during the first quarter of 2016, compared to the prior year’s first quarter. Approximately 41,200 of those patient samples accessioned were for NIPT, including the MaterniT 21 PLUS, VisibiliT and MaterniT GENOME laboratory-developed tests, which is a 9% decrease in testing volume compared to the first quarter of 2015. The decrease in tests accessioned was driven by the conversions of laboratory customers to licensee status, as described above, partially offset by the increase in tests accessioned for patients in the average-risk pregnancy market.

The total volume of tests from Sequenom’s core business increased by 7% over the first quarter of 2015, largely as a result of Sequenom Laboratories’ entry into the average-risk pregnancy market. In this press release, "core business" refers to Sequenom’s revenue and unit volume excluding the effect of the conversion of certain laboratory customers to licensee status in 2015. Notably, the volume of NIPT tests in Sequenom’s core business, which includes average-risk pregnancies, increased by 14% for the first quarter of 2016 over the first quarter of 2015.

License revenue was $2.2 million in the first quarter of 2016, compared to $2.1 million for the first quarter of 2015, and $2.3 million in the fourth quarter of 2015. Sequenom continues to expect a total of $10 million in license fee revenue for 2016.

Total cost of revenues decreased to $16.8 million for the first quarter of 2016, compared to $19.3 million for the prior year period. Cost of revenues decreased primarily due to the decrease in test volumes as a result of the conversion of certain laboratory customers to licensee status.

Gross margin for the first quarter of 2016 was 39% compared to gross margin of 49% for the first quarter of 2015. The effect of laboratory customers who converted to licensee status, costs associated with Sequenom Laboratories’ laboratory consolidation and restructuring, the impact of entering the average-risk pregnancy market and increased MaterniT GENOME volume largely drove the decrease. Incremental costs related to the laboratory consolidation reduced gross margin for the first quarter of 2016 by 3%. Sequenom continues to expect gross margin to increase for the remaining quarters of 2016.

Total operating expenses for the first quarter of 2016 were $22.1 million, compared to $23.0 million for the first quarter of 2015. Total operating expenses for the first quarter of 2016 were up only slightly from total operating expenses of $21.9 million for the fourth quarter of 2015, due to the costs associated with Sequenom Laboratories’ laboratory consolidation and other restructuring activities, which offset the benefit of reduced spending for research and development and general and administrative activities.

Operating loss for the first quarter of 2016 was $11.4 million, compared to operating income of $16.5 million for the same period in 2015. Operating and net income for the first quarter of 2015 included a $21.0 million gain on the Pooled Patents Agreement with Illumina. Net loss for the first quarter of 2016 was $13.4 million or $0.11 per basic and diluted share, as compared to net income of $14.3 million, or $0.11 per diluted share, and $0.12 per basic share for the same period in 2015.

Cash burn for the first quarter of 2016 was $10.4 million, compared to $9.4 million in the same period of 2015 and $4.7 million in the fourth quarter of 2015. Cash burn increased in the first quarter of 2016 primarily due to reduced revenue collected for testing services performed in prior periods and delays in collections related to the launch of tests into the average-risk pregnancy market. Cash burn in the first quarter also included semi-annual interest payments on Sequenom’s convertible debt.

Unrecorded accounts receivable for tests performed and recognized on a cash basis are estimated to be $16 million to $18 million as of March 31, 2016, the same as the estimate as of December 31, 2015.

As of March 31, 2016, cash, cash equivalents, and marketable securities totaled $66.1 million.

Non-GAAP Financial Measures

"GAAP" refers to financial information presented in accordance with generally accepted accounting principles in the United States. To supplement the condensed consolidated financial statements and discussion presented on a GAAP basis, this press release includes non-GAAP financial measures with respect to the quarter ended March 31, 2016. Management uses non-GAAP financial measures because it believes that a cash flow metric incorporating cash used in operations and certain other uses of cash are important to understand the cash requirements of the business. The Company reported cash burn as a non-GAAP financial measure. This non-GAAP financial measure is not in accordance with, or an alternative to, GAAP.

Management uses cash burn to evaluate performance compared to forecasts. Cash burn is calculated as the sum of net cash used in operating activities, purchases of property, equipment and leasehold improvements, and payments on long-term obligations. The reconciliations of cash used by operating activities, the GAAP measure most directly comparable to cash burn, is provided on the attached schedule.

On May 4, 2016 PDL BioPharma, Inc. (PDL) (NASDAQ: PDLI) reported financial results for the first quarter ended March 31, 2016(Press release, PDL BioPharma, MAY 4, 2016, View Source [SID:1234511937]).

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Total revenues of $103.1 million for the first quarter of 2016.
Non-GAAP diluted earnings per share (EPS) of $0.52 increased approximately 11 percent versus the same period in 2015.
Non-GAAP net income increased 7 percent to $84.8 million.
GAAP diluted EPS of $0.34 decreased by 32 percent compared to the same period of 2015.
GAAP net income decreased by 34 percent to $55.9 million.
The largest component of the difference in non-GAAP measure compared to GAAP is the exclusion of mark-to-market adjustments related to the fair value election of our investments in royalty rights. A full reconciliation of all components of the GAAP to Non-GAAP quarterly financial results can be found in Table 4 at the end of this release.
Revenue Highlights
Total revenues of $103.1 million for the quarter ended March 31, 2016 included:
Royalties from PDL’s licensees to the Queen et al. patents of $121.5 million, which consisted of royalties earned on sales of products under license agreements associated with the Queen et al. patents;
Net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of negative $27.1 million, which consisted of revenues associated with the change in estimated fair value of our royalty right assets and primarily related to the Depomed, Inc. royalty rights acquisition;

Interest revenue from notes receivable debt financings to late-stage healthcare companies of $9.0 million; and
License and other revenues of negative $0.2 million, which consisted of a negative $0.3 million mark-to-market adjustments on warrants held and, a realized gain of $0.1 million from the sale of PDL’s investment in AxoGen Inc. common stock.
Total revenues decreased by 31 percent for the first quarter ended March 31, 2016, when compared to the same period in 2015.
The decrease in royalties from PDL’s licensees to the Queen et al. patents is due to decreased Lucentis and Actemra royalties as a result of the conclusion of their license agreements, partially offset by increased royalties from other Queen et al. royalty revenues.

PDL expects its revenue from the Queen et al. patents to materially decrease beyond this first quarter of 2016.
The decrease in royalty rights – change in fair value was driven by the $47.9 million decrease in the fair value of the Depomed royalty rights assets and is primarily a result of lower than expected cash royalties in the first quarter and an adjustment reducing future cash flows due to lower projected demand data, greater erosion of market share due to the launch of a generic, and higher gross-to-net adjustments for Glumetza.

PDL received $17.2 million in net cash royalty payments from its acquired royalty rights in the first quarter of 2016, compared to $0.9 million for the same period of 2015.
The decrease in interest revenues was due to reduced interest from Direct Flow Medical, Inc. as a result of ceasing to accrue interest due to the loan being impaired.

Operating Expense Highlights
Operating expenses were $9.8 million for the quarter ended March 31, 2016, compared to $7.7 million for the same period of 2015.
The increase in operating expenses for the quarter, as compared to the same period in 2015, was a result of an increase in general and administrative expenses of $1.5 million for legal service expenses mostly related to business development activities, the asset management of Wellstat Diagnostics, legal expenses related to a complaint against Merck Sharp & Dohme, Corp, and $0.9 million for compensation, including stock-based compensation, offset in part by a decrease in professional services from asset management expenses.

Other Financial Highlights
PDL had cash, cash equivalents, and short-term investments of $292.0 million at March 31, 2016, compared to $220.4 million at December 31, 2015.

The increase was primarily attributable to proceeds from royalty right payments of $17.2 million and cash generated by operating activities of $92.5 million, offset in part by the repayment of a term loan for $25.0 million, payment of dividends of $8.2 million and an additional note receivable purchase of $5.0 million.
Net cash provided by operating activities in the first quarter of 2016 was $92.5 million, compared with $71.8 million in the same period in 2015.

Recent Developments
Q2 2016 Dividends
On May 2, 2016, our board of directors declared a quarterly dividend of $0.05 per share of common stock to be paid on June 13, 2016 to stockholders of record on June 6, 2016, the record date of the dividend payment.