On August 9, 2016 Aptose Biosciences Inc. (NASDAQ:APTO) (TSX:APS), a clinical-stage company developing new therapeutics and molecular diagnostics that target the underlying mechanisms of cancer, reported unaudited financial results for the three months ended June 30, 2016 and reported on corporate developments. Unless specified otherwise, all amounts are in Canadian dollars (Press release, Aptose Biosciences, AUG 9, 2016, View Source;p=RssLanding&cat=news&id=2194360 [SID:1234514415]).

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Net loss for the three months ended June 30, 2016 was $5.6 million ($0.46 per share) compared with $3.4 million ($0.28 per share) during the three months ended June 30, 2015. Total cash and cash equivalents at June 30, 2016 were $12.6 million.
"During the second quarter, we continued our disciplined approach to developing a stable formulation of APTO-253 and evaluating multiple formulations in order to select the best method for delivery of the product to patients," said William G. Rice, Ph.D., Chairman, President and Chief Executive Officer. "We have selected a methodology to create a stable formulation of APTO-253 and are performing numerous mock infusion studies and extensive analyses on that formulation. In parallel we continue to research alternate formulations to ensure we leave no stone unturned. We look forward to reporting back to you regarding the mock infusion studies, discussions with the FDA, and potential re-initiation of our Phase 1B clinical trial of APTO-253."

Corporate Highlights
During the quarter, Aptose worked with a formulation contract manufacturing organization (CMO) to select a new methodology to manufacture APTO-253 drug product with greatly improved solubility and stability characteristics, including an ability to remain stable and soluble at room temperature. Aptose performed mock infusion studies at multiple dose levels, and no filter clogging events were observed. Multiple contract research organizations are now performing the mock infusion studies and conducting extensive analyses on the optimized formulation of APTO-253.

Aptose’s clinical team has prepared additional clinical sites for the potential re-initiation of the Phase 1b trial of APTO-253, expanding the number of sites, at major cancer research and treatment centers in the U.S., to as many as 15.

Aptose has modified the clinical trial design for the Phase 1b study, pending approval from the FDA. Under the proposed modification, Arm B of the dose-escalation phase of the study, initially designed to enroll approximately fifteen (15) patients with multiple myeloma and lymphoma, will be discontinued. Arm A of the study, focused on patients with acute leukemias and myelodysplastic syndromes (MDS) remains unchanged. The rationale underlying this modification is to focus all resources on the patient population most likely to benefit from APTO-253.

In June, Aptose and CrystalGenomics, Inc. announced an exclusive global option and license agreement focused on the development of CG‘806, a highly potent, non-covalent small molecule anti-cancer agent. This multi-kinase inhibitor exhibits a picomolar IC50 toward the FMS-like tyrosine kinase 3 with the Internal Tandem Duplication (FLT3-ITD) and potency against a host of mutant forms of FLT3, as well as single-digit nanomolar IC50’s against Bruton’s tyrosine kinase and its C481S mutant.

Aptose and its collaborators have submitted three abstracts for presentation at the American Society of Hematology (ASH) (Free ASH Whitepaper) Meeting, planned for December 3-6, 2016 in San Diego, CA.
Financial Results
Net loss for the three months ended June 30, 2016 was $5.6 million ($0.46 per share) compared with $3.4 million ($0.28 per share) in the same period in the prior year. Net loss for the six months ended June 30, 2016 was $10.7 million ($0.88 per share) compared with $6.9 million ($0.59 per share) during the six months ended June 30, 2015.
Aptose utilized cash of $4.6 million in operating activities in the three-month period ended June 30, 2016 compared with $4.3 million during the three months ended June 30, 2015. For the six months ended June 30, 2016, Aptose utilized cash of $9.2 million compared with $6.5 million in the six months ended June 30, 2015. The cash utilized in the three month period ended June 30, 2016 is only slightly higher than the three months ended June 30, 2015 despite a higher net loss due to cash used to reduce accounts payable and accrual balances in the prior year period. The cash utilized in the six months ended June 30, 2016 increased compared to the prior year comparable period due to an increased net loss offset by cash used to reduce accounts payable and accrual balances in the prior year period.
Research and Development
Research and development expenses totaled $3.3 million in the three months ended June 30, 2016 compared to $1.3 million during the three months ended June 30, 2015 and totaled $5.6 million for the six month period ended June 30, 2016 compared with $2.2 million in the same period in the prior year. Research and development costs consist of the following:
Components of research and development expenses:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
(in thousands) 2016 2015 2016 2015

Program costs $ 1,879 $ 1,257 $ 4,126 $ 2,117
CrystalGenomics Option Fee 1,294 − 1,294 −
Stock-based compensation 109 46 165 65
Depreciation of equipment 11 5 23 10
$ 3,293 $ 1,308 $ 5,608 $ 2,192

The increase in research and development costs in the three and six months ended June 30, 2016 compared with the three and six months ended June 30, 2015 is due to the following reasons:
Costs associated with the LALS/Moffitt collaboration developing epigenetic single molecule inhibitors of multiple targets, including the BET proteins, and other kinases for which no comparable expenses existed in the prior year;
Increased research and clinical operations headcount;
Formulation and manufacturing costs associated with APTO-253 and the root cause analysis of the filter clogging identified in November 2015; and
Increased Contract Research Organization costs related to consultants and advisors as we work towards returning APTO-253 to the clinic.
During the three months ended June 30, 2016 Aptose paid US$1.0 million ($1.3 million) to CG for an option fee related to the CG’806 technology. Should the results of the planned pre-clinical studies be positive, we would choose to pay an additional US$2.0 million in cash or common shares to exercise the option and receive the commercial license prior to initiating any clinical studies. No comparable expense existed in the same period in the prior year.
Stock-based compensation costs allocated to research and development increased in the three and six months ended June 30, 2016 to reflect option grants to new employees.
General and Administrative
General and administrative expenses totaled $2.3 million in the three-month period ended June 30, 2016 compared to $2.5 million in the three months ended June 30, 2015. For the six month period ended June 30, 2016, general and administrative expenses totaled $5.0 million compared with $5.2 million in the same period in the prior year. General and administrative expenses consist of the following:
Components of general and administrative expenses:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
(in thousands) 2016 2015 2016 2015

General and administrative excluding salaries $ 822 $ 1,149 $ 1,955 $ 2,178
Salaries 823 757 1,798 1,510
Stock-based compensation 677 579 1,156 1,519
Depreciation of equipment 21 19 42 26
$ 2,343 $ 2,504 $ 4,951 $ 5,233

General and administrative expenses excluding salaries, decreased in the three months ended June 30, 2016 compared with the three months ended June 30, 2015. The decrease is primarily attributable to lower legal and patent costs as well as lower regulatory and filing fees related to transactions completed in the same period in the prior year.
General and administrative expenses excluding salaries, decreased in the six months ended June 30, 2016 compared with the six months ended June 30, 2015. The decrease is the result of lower legal costs related to transactions completed in the prior year as well as costs due to the clean-up and move associated with the Toronto office and lab relocation completed in the six months ended June 30, 2015 for which comparable expenses do not exist in the current year.
Salary charges in the three and six months ended June 30, 2016 increased in comparison with the three and six months ended June 30, 2015 due to additional headcount as well as a higher average CA/US exchange rate which increased the cost of our US denominated salaries.
Stock-based compensation costs increased in the three months ended June 30, 2016 compared with the three months ended June 30, 2015 due to annual option grants at the end of March 2016 compared with June 2015 which resulted in higher amortization earlier in the year.
Stock-based compensation decreased in the six months ended June 30, 2016 compared with the six months ended June 30, 2015 due to large option grants in April, June and July 2014 which vested 50% during the first year and therefore contribute to higher stock-based compensation expense during the first twelve month period captured in the prior year period.
Finance Expense
Finance expense for the three months ended June 30, 2016 totaled $9 thousand compared with $15 thousand for the three months ended June 30, 2015. For the six months ended June 30, 2016, finance expense totaled $205 thousand compared with $35 thousand for the same period in the prior year. Finance expense includes the following items:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
(in thousands) 2016 2015 2016 2015
Interest expense $ − $ 15 $ − $ 35
Foreign exchange loss 9 − 205 −
$ 9 $ 15 $ 205 $ 35

Interest expense for the three and six months ended June 30, 2015 relates to interest accrued at a rate of 10% on the remaining balance of convertible promissory notes issued in September 2013 as well as accretion expense related to the conversion feature of the notes. As the promissory notes were converted before September 2015, no interest expense was incurred in 2016.
Foreign exchange loss is the result of the fluctuation of exchange rates between US and Canadian dollars and the impact on our US dollar denominated cash balances.
Finance Income
Finance income totaled $33 thousand in the three months ended June 30, 2016 compared to $462 thousand in the three months ended June 30, 2015. For the six months ended June 30, 2016, finance income totaled $80 thousand compared with $526 thousand in the same period in the prior year. Finance income includes the following items:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
(in thousands) 2016 2015 2016 2015
Interest income $ 33 $ 72 $ 80 $ 176
Foreign exchange gain − 390 − 350
$ 33 $ 462 $ 80 $ 526
Interest income represents interest earned on our cash and cash equivalent and investment balances. The foreign exchange gain incurred in the three and six months ended June 30, 2015 was the result of an increase in the value of US dollar denominated cash and cash equivalents balances during such periods due to a depreciation of the Canadian dollar compared to the US dollar.
Aptose Biosciences Inc.
Condensed Consolidated Interim Statements of Loss and
Comprehensive Loss

(unaudited)

(amounts in 000’s of Canadian Dollars except for per common share data)

Three months
ended
June 30, 2016 Three months
ended
June 30, 2015 Six months
ended
June 30, 2016 Six months
ended
June 30, 2015
REVENUE $ - $ - $ - $ -
EXPENSES
Research and development 3,293 1,308 5,608 2,192
General and administrative 2,343 2,504 4,951 5,233
Operating expenses 5,636 3,812 10,559 7,425
Finance expense 9 15 205 35
Finance income (33 ) (462 ) (80 ) (526 )
Net financing (income) expense (24 ) (447 ) 125 (491 )
Net loss and comprehensive loss for the period 5,612 3,365 10,684 6,934
Basic and diluted loss per common share $ 0.46 $ 0.28 $ 0.88 $ 0.59
Weighted average number of common shares
outstanding used in the calculation of
basic and diluted loss per common share (000’s) 12,231 11,909 12,140 11,852

On August 9, 2016 Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) report financial results for its fiscal 2016 third quarter ended June 30, 2016 (Press release, Arrowhead Research Corporation, AUG 9, 2016, View Source [SID:1234514413]). The company is hosting a conference call at 4:30 p.m. EDT to discuss results.

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Conference Call and Webcast Details

Investors may access a live audio webcast on the Company’s website at View Source For analysts that wish to participate in the conference call, please dial 855-215-6159 or 315-625-6887 and enter Conference ID 57990579.

A replay of the webcast will be available on the company’s website approximately two hours after the conclusion of the call and will remain available for 90 days. An audio replay will also be available approximately two hours after the conclusion of the call and will be available for 3 days. To access the audio replay, dial 404-537-3406 and enter Conference ID 57990579.

Fiscal 2016 Third Quarter and Recent Company Highlights

Corporate Events

Today priced an at-the-market private offering of $45 million of common stock
ARC-520

Presented promising ARC-520 hepatitis B data at The International Liver Congress 2016
Expanded the MONARCH study to include additional sites, investigators, and cohorts, including patients with HBV and hepatitis Delta virus co-infection
ARC-521

Initiated a Phase 1/2 study of ARC-521 designed to evaluate the safety, tolerability, and pharmacokinetics of single doses of ARC-521 in healthy volunteers and the safety, tolerability, and antiviral activity of single and multiple doses of ARC-521 in patients with chronic HBV. Two of a planned six normal volunteer cohorts have dosed, with the third cohort expected to dose this week
ARC-AAT

Completed enrollment in Part A of a Phase 1 study in healthy volunteers
Received approval from regulatory authorities in Canada, Ireland, and Sweden to begin a Phase 2 study designed to determine the effect of multiple doses of ARC-AAT on intrahepatic alpha-1 antitrypsin levels as evidenced by changes in liver biopsy in patients with alpha-1 antitrypsin deficiency
Platform and Early Pipeline

Presented promising new preclinical data on ARC-LPA for cardiovascular diseases and ARC-HIF2 for renal cell carcinoma showing that important advancements are being made to Arrowhead’s delivery platforms to include subcutaneous administration and extra-hepatic targeting capabilities
Selected Fiscal 2016 Third Quarter Financial Results

ARROWHEAD PHARMACEUTICALS, INC.
CONSOLIDATED CONDENSED FINANCIAL INFORMATION (unaudited)

Three Months Ended
June 30,
Nine Months Ended
June 30,
OPERATING SUMMARY
2016 2015 2016 2015

REVENUE $ 39,583 $ 123,750 $ 127,083 $ 338,250
OPERATING EXPENSES
Research and development 9,423,195 7,490,400 29,782,854 36,877,925
Acquired in-process research and development - - - 10,142,786
Salaries and payroll-related costs 4,113,262 3,570,531 12,281,841 10,262,799
General and administrative expenses 2,275,628 1,829,393 8,045,571 5,612,219
Stock-based compensation 2,750,785 2,486,074 7,547,967 6,706,009
Depreciation and amortization 818,200 741,058 2,416,461 1,480,656
TOTAL OPERATING EXPENSES 19,381,070 16,117,456 60,074,694 71,082,394
OPERATING LOSS (19,341,487 ) (15,993,706 ) (59,947,611 ) (70,744,144 )
OTHER INCOME/(EXPENSE), PROVISION FOR INCOME TAXES (79,256 ) 57,653 446,595 3,546,398
NET LOSS $ (19,420,743 ) $ (15,936,053 ) $ (59,501,016 ) $ (67,197,746 )

EARNINGS PER SHARE (BASIC AND DILUTED): $ (0.32 ) $ (0.27 ) $ (1.00 ) $ (1.19 )
WEIGHTED AVERAGE SHARES OUTSTANDING 59,966,955 59,492,867 59,764,129 56,631,297

FINANCIAL POSITION SUMMARY
June 30, September 30,
2016 2015
CASH AND CASH EQUIVALENTS 43,616,543 81,214,354
SHORT-TERM INVESTMENTS 1,030,556 17,539,902
TOTAL CASH RESOURCES (CASH, CASH EQUIVALENTS AND INVESTMENTS) 44,647,099 98,754,256
OTHER ASSETS 40,886,397 33,513,658
TOTAL ASSETS 85,533,496 132,267,914
TOTAL LIABILITIES 26,108,330 22,646,280
TOTAL STOCKHOLDERS’ EQUITY 59,425,166 109,621,634
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 85,533,496 132,267,914

SHARES OUTSTANDING 60,429,405 59,544,677
PROFORMA SHARES OUTSTANDING (INCLUDING CONVERSION OF PREFERRED SHARES) 63,100,395 62,215,667

On August 9, 2016 Anthera Pharmaceuticals, Inc. (Nasdaq:ANTH) reported a business update and reported financial results for the second quarter ended June 30, 2016 (Filing, Q2, Anthera, 2016, AUG 9, 2016, View Source [SID:1234514412]).

Recent Developments and Business Highlights:

Sollpura (liprotamase) – Exocrine Pancreatic Insufficiency ("EPI")

o Phase 3 SOLUTION Clinical Study Enrollment Target of 126 Patients Met

We met the enrollment target in our Phase 3 SOLUTION clinical study evaluating the efficacy and safety of the capsule formulation of Sollpura to treat exocrine pancreatic insufficiency in patients with cystic fibrosis in early August. We expect to report topline efficacy data in the fourth quarter of 2016. For more information on the SOLUTION clinical study, please visit View Source study/.

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o Initiated SIMPLICITY Clinical Study with an Enrollment Target of 46 Patients

We began dosing patients in the SIMPLICITY clinical study which is evaluating the efficacy and safety of Sollpura supplied as a powder for oral solution. In this study, Sollpura is packaged in a convenient, easy-to-administer packet. The soluble dose form of all three digestive enzymes is mixed with water or apple juice. After an initial cohort of patients older than seven is treated for one week, this study will allow for administration of Sollpura powder for oral solution to pediatric patients ranging in age from 28 days to seven years. For more information on the study, please visit View Source

o Manufacturing Progressing to Support SIMPLICITY Study and Commercial Readiness

We successfully manufactured and released two sachet dosage strengths with a newly developed dry powder formulation for oral solution, enabling the initiation of the SIMPLICITY clinical study. We made progress with manufacturing technical transfer of all three enzymes to our contract manufacturers site. We completed demonstration batch manufacturing at commercial launch scale for lipase. Additionally, proof-of-concept was demonstrated for a high dose Lipase unit capsule – a further step towards reducing capsule burden in patients with EPI.

Blisibimod – Systemic Lupus Erythematosus ("SLE")

o Topline Data from Phase 3 CHABLIS-SC1 Clinical Study

We continue to collect and prepare final data from the Phase 3 CHABLIS-SC1 clinical study as the final patients continue treatment in the study. The last patient in the study received their final study dose on July 28th. As described in the protocol, patients are followed for eight weeks after their last dose at which time the final safety data is collected. Due to timing of this final visit, the company expects topline efficacy and safety data will be available prior to the annual American College of Rheumatology Annual Meeting in November. Topline data from the CHABLIS-SC1 will include the primary endpoint evaluation, a six-point reduction in the Systemic Lupus Erythematosus Responder Index (SRI-6) as well as safety and tolerability data from the study. For more information on the CHABLIS-SC1 study, please visit View Source

o Phase 3 CHABLIS 7.5 Clinical Study Initiated

CHABLIS 7.5, Anthera’s second Phase 3 clinical study successfully enrolled its first patient. This study will evaluate the efficacy and safety of blisibimod in patients who, despite corticosteroid use, continue to have clinically-active lupus (SLE) and the presence of anti-double-stranded DNA and low complement which are of known serological markers of lupus. For more information about the CHABLIS 7.5 study, visit View Source

Blisibimod – IgA Nephropathy

o Positive Trends Reported on Phase 2 BRIGHT-SC Clinical Study

In June 2016, interim data from the BRIGHT-SC study, which enrolled 57 patients, demonstrated a positive trend in lower proteinuria in blisibimod versus placebo treated patients. While the numerical reduction in proteinuria in blisibimod versus placebo treated patients at week 24 in the BRIGHT-SC study did not meet the predefined primary endpoint of complete or partial response, longer-term data from the study demonstrated an increasingly large separation in proteinuria favoring the blisibimod treated arm compared to placebo. Additionally, secondary biomarker data from the study, including changes in total B cell counts and changes in immunoglobulins IgA, IgG, and IgM, were highly consistent with previous studies with blisibimod and demonstrated marked reduction after 8 weeks on study. As a result of the increasing proteinuria effect after 24 weeks of dosing, and the demonstration of blisibimod’s effect on immunological markers relevant to IgA nephropathy including reductions of B cells, and immunoglobulins including IgA, IgG and IgM, we elected to continue the study until the last subject enrolled completes 48 weeks of evaluation. For more information about the BRIGHT-SC study, visit View Source

Summary of Financial Results

· Cash Position. We ended the second quarter of 2016 with cash and cash equivalents totaling $28.5 million, compared to $47.0 million as of December 31, 2015. The decrease in cash was mainly attributable to research, development and operating expenses during the six months ended June 30, 2016.
· R&D Expense. Research and development expenses for the three and six months ended June 30, 2016 totaled $12.0 million and $21.6 million, respectively, compared to $8.5 million and $14.5 million for the corresponding periods in 2015. The increase is mainly attributable to higher clinical development expenses resulting from the acceleration of patient enrollment in the SOLUTION clinical study, the initiation of the SIMPLICITY clinical study, manufacturing scale-up costs associated with Sollpura, and the initiation of the CHABLIS-7.5 clinical study in severe lupus patients.
· G&A Expense. General and administrative expenses for the three and six months ended June 30, 2016 totaled $2.6 million and $4.8 million, respectively, compared to $1.7 million and $3.6 million for the corresponding periods in 2015. The increase is primarily due to higher non-cash stock-based compensation expense of $0.6 million and $0.9 million, respectively, recognized during the three and six months ended June 30, 2016.
· Research Award. A research award, granted to us in March 2015 by the Cystic Fibrosis Foundation Therapeutics, Inc. and recorded as an offset to operating expense, totaled $261,000 for the three and six months ended June 30, 2016. The amount of research award recognized represents the value prescribed to the milestones that we achieved under the award agreement during the current period. There were no research award amounts recorded during the comparative period in 2015.
· Net Loss. Net loss for the three and six months ended June 30, 2016 was $14.3 million, or $0.35 per basic and diluted share and $26.1 million, or $0.64 per basic and diluted share, respectively, compared to $8.9 million, or $0.25 per basic and diluted share and $16.6 million, or $0.52 per basic and diluted share for the corresponding periods in 2015.

On August 9, 2016 GTx, Inc. (Nasdaq: GTXI) reported financial results for the second quarter ended June 30, 2016 and highlighted upcoming milestones (Press release, GTx, AUG 9, 2016, View Source;p=RssLanding&cat=news&id=2194053 [SID:1234514411]). The Company is currently enrolling patients in three Phase 2 clinical trials: two trials evaluating enobosarm as a potential treatment for women with advanced breast cancer, and another assessing enobosarm as a potential treatment for stress urinary incontinence in postmenopausal women.

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"We have maintained considerable momentum in our lead enobosarm programs as well as our emerging SARD program. In the coming months, I look forward to reporting preliminary data from our two Phase 2 clinical trials of enobosarm in women with advanced breast cancer, which should enable us to determine if the clinical benefit response will permit each trial to advance to the second and final stage of the trial," said Dr. Robert J. Wills, Executive Chairman of GTx. "In addition, the clinical trial of enobosarm to treat stress urinary incontinence in postmenopausal women has continued to enroll and we expect data from this trial during the first half of 2017."

Corporate Highlights and Anticipated Milestones

Enobosarm in Breast Cancer: The Company’s lead product candidate, a selective androgen receptor modulator (SARM), is being developed as a targeted treatment for two advanced breast cancer indications: (i) estrogen receptor positive (ER+) and androgen receptor positive (AR+) breast cancer, and (ii) AR+ triple negative breast cancer (TNBC). For both clinical trials, the primary efficacy endpoint is a determination of clinical benefit, which is defined as a complete response, partial response or stable disease.

ER+/AR+ breast cancer: We currently expect to have sufficient data from the first stage of this open-label, Phase 2 clinical trial of enobosarm in women with metastatic or locally advanced, ER+/AR+ breast cancer before the end of 2016 to allow us to make a determination as to whether we will enroll additional patients in each of the two study cohorts for the second stage of the trial. While the first stage of the trial will evaluate 18 patients for each of the two dosing arms, 9 mg and 18 mg of enobosarm, the trial is designed to enroll up to 118 patients in total in order to obtain data from 88 evaluable patients (44 evaluable patients in each dose group) to assess the primary efficacy objective of clinical benefit response following 24 weeks of treatment.
AR+ TNBC: We expect to have sufficient data from the first stage of this open-label, proof-of-concept Phase 2 clinical trial of 18 mg of enobosarm in women with advanced AR+ TNBC by the end of 2016 to allow us to make a determination as to whether we will continue enrolling patients into the second stage of the trial. While the first stage will include 21 evaluable patients, the trial is designed to enroll up to 55 patients in total in order to obtain data from 41 evaluable patients to assess the primary efficacy objective of clinical benefit response following 16 weeks of treatment.
SARMs in Non-Oncologic Indications: The Company is exploring SARMs as potential treatments for both stress urinary incontinence (SUI) and Duchenne muscular dystrophy (DMD), a rare disease characterized by progressive muscle degeneration and weakness.

SUI: Enrollment in the Phase 2 proof-of-concept clinical trial of 3 mg of enobosarm in postmenopausal women with SUI is ongoing. This trial, in up to 35 women, is the first clinical trial to evaluate a SARM for SUI. Data from the trial is expected during the first half of 2017, at which point we plan to determine if continued development of enobosarm or another of our SARM compounds in SUI is warranted.
DMD: Preclinical studies have continued to confirm beneficial effects from SARMs in mice genetically altered to simulate DMD, compared to control groups. The Company continues to advance its preclinical initiatives while pursuing a potential strategic collaboration with biopharma companies experienced in orphan drug development.
SARDs in Prostate Cancer: our Selective Androgen Receptor Degrader (SARD) technology is being evaluated as a potentially novel treatment for men with castration-resistant prostate cancer (CRPC), including those who do not respond or are resistant to currently approved therapies. The Company believes that its SARD compounds will degrade multiple forms of the androgen receptor, including AR splice variants, such as AR-V7, along with mutant versions of the receptor.

CRPC: Lead SARD compounds are undergoing required preclinical development, including formulation and metabolism studies. The Company’s plan is to initiate its first human clinical trial with a SARD in 2017.
Second Quarter 2016 Financial Results

As of June 30, 2016, cash and short-term investments were $19.8 million compared to $29.3 million at December 31, 2015.
Research and development expenses for the quarter ended June 30, 2016 were $4.1 million compared to $3.0 million for the same period of 2015.
General and administrative expenses were $2.0 million for both the quarter ended June 30, 2016 and June 30, 2015.
The net loss for the quarter ended June 30, 2016 was $6.1 million compared to a net loss of $48.0 million for the same period in 2015. The second quarter of 2015 included a non-cash loss of $43.0 million due to the change in fair value of the Company’s warrant liability. During the first quarter of 2016, the Company recorded a non-cash reclassification of this warrant liability to stockholders’ equity due to the modification of these warrants. No adjustments to the fair value of these warrants are required subsequent to the first quarter of 2016.
The net loss for the six months ended June 30, 2016 was $4.0 million compared to a net loss of $50.3 million for the same period of 2015. The six months ended June 30, 2016 included a non-cash gain of $8.2 million due to the change in the fair value of the Company’s warrant liability, recorded during the first quarter of 2016. The six months ended June 30, 2015 included a non-cash loss of $40.4 million due to the change in fair value of the Company’s warrant liability.
GTx had approximately 141.7 million shares of common stock outstanding as of June 30, 2016. Additionally, there remain warrants outstanding to purchase approximately 64.3 million shares of GTx common stock at an exercise price of $0.85 per share.

On August 9, 2016 Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) reported that its financial results for the first half of 2016 were in line with the Company’s expectations and the Company is on track to meet its pro forma NOL and cash guidance for the year (Press release, Ionis Pharmaceuticals, AUG 9, 2016, View Source;p=RssLanding&cat=news&id=2194067 [SID:1234514400]).

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Ionis Pharmaceuticals (PRNewsFoto/Ionis Pharmaceuticals, Inc.)
"The recent announcement to file for regulatory approval of nusinersen based on positive results from an interim analysis of the Phase 3 ENDEAR study was an important next step in our goal to bring this potentially transformational medicine to the patients who desperately need it as quickly as possible. This is the first time a potential treatment for infantile-onset SMA has demonstrated a clinical benefit in a controlled clinical study," said B. Lynne Parshall, chief operating officer of Ionis Pharmaceuticals. "We are excited about the opportunity we now have to accelerate the advancement of nusinersen into regulatory review. We and Biogen are well along in preparing the U.S. and E.U. regulatory dossiers, and Biogen plans to file marketing applications in the U.S. and E.U. in the next few months, with other countries to follow. We are very pleased that our interactions with the FDA remain very constructive as we and Biogen continue to explore possible expedited mechanisms to accelerate the regulatory review timeline."

Biogen has exercised its option to license nusinersen and will be responsible for all development, regulatory and commercialization activities and costs going forward. Over the next several months, Ionis will be working closely with Biogen to transition patients in the ENDEAR and EMBRACE studies to an open-label study that will allow all patients in these studies to have access to nusinersen. Once these patients have been transitioned into an open-label study, Biogen plans to open an expanded access program to make nusinersen available to eligible patients with infantile-onset SMA (consistent with type 1). Ionis will continue to conduct the Phase 3 CHERISH study in childhood-onset SMA patients. Biogen will also continue to conduct the NURTURE study in pre-symptomatic SMA infants.

"We believe that Biogen is the right company to bring nusinersen to patients with this devastating disease. They understand the unique needs of the SMA community and the impact SMA has on patients and their families. Importantly, Biogen has the global commercial infrastructure and expertise needed to successfully launch and commercialize nusinersen. Nusinersen is the first antisense drug from our neurological disease collaboration with Biogen that we expect to advance to regulatory review, and we are excited about the possibility of bringing other therapies to patients with severe neurological diseases with limited or no treatment options," continued Ms. Parshall.

Financial Results

"We finished the second quarter in a strong financial position. In the first half of this year, we earned $75 million of revenue, including more than $15 million in milestone payments, the majority of which were related to the progression of our Phase 3 program for nusinersen, and $15 million from Kastle when Kastle acquired the global rights to develop and commercialize KYNAMRO. Consistent with the guidance we have provided, we expect our revenue to be significantly higher in the second half of this year. We are well on our way to achieving our second half projections with the revenue we have already earned in the third quarter from the nusinersen and Janssen license fees, which total $85 million," said Elizabeth L. Hougen, chief financial officer of Ionis Pharmaceuticals.

"We have continued to advance our Phase 3 programs and to prepare to commercialize volanesorsen through Akcea while prudently managing our expenses. As a result, we finished the first half of 2016 with a GAAP loss from operations of $104 million, which included nearly $40 million in non-cash compensation expense related to equity awards, that when excluded, resulted in a pro forma net operating loss of $64 million. We also ended the first half of this year with more than $660 million in cash. Neither our operating loss nor our cash balance at June 30th included the $85 million in license fees we have earned already in the third quarter. We are on track to meet our guidance of a pro forma NOL in the low $60 million range and a year-end cash balance in excess of $600 million. Importantly, with the projected accelerated timeline for approval of nusinersen, we have the opportunity to begin earning commercial revenue next year," concluded Ms. Hougen.

All pro forma amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the reconciliation of GAAP to pro forma measures, which is provided later in this release.

Revenue

Ionis’ revenue for the three and six months ended June 30, 2016 was $38.5 million and $75.3 million, compared to $120.4 million and $183.0 million for the same periods in 2015. Ionis’ revenue in the first half of 2016 consisted of the following:

$15 million from Kastle Therapeutics in an upfront payment for KYNAMRO;
$14.5 million from Biogen for advancing the Phase 3 program for nusinersen and advancing IONIS-BIIB4Rx;
$1.5 million from GSK for advancing IONIS-HBV-LRx; and
$44.3 million primarily from the amortization of upfront fees and manufacturing services Ionis performed for its partners.
Ionis’ revenue in the first half of 2015 included $91.2 million in connection with the exclusive license agreement with Bayer, $56.8 million in milestone payments from partnered programs and $35.0 million, primarily from the amortization of upfront fees and manufacturing services Ionis performed for its partners.

Ionis’ revenue fluctuates based on the nature and timing of payments under agreements with its partners and consists primarily of revenue from the amortization of upfront fees, milestone payments and license fees. Already in the third quarter of 2016, Ionis has earned $85 million in license fee revenue consisting of $75 million from Biogen for nusinersen and $10 million from Janssen for the Company’s first oral antisense drug designed to act locally in the GI tract.

Operating Expenses
Ionis’ operating expenses included costs to support the Company’s five ongoing Phase 3 studies and three open-label extension studies related to its Phase 3 programs for nusinersen, IONIS-TTRRx and volanesorsen. In addition, Akcea continued to build its operations in preparation for the commercial launch of volanesorsen. As such, Ionis’ operating expenses increased for the three and six months ended June 30, 2016 and on a GAAP basis were $87.4 million and $178.9 million, respectively, and on a pro forma basis, were $68.1 million and $139.6 million, respectively. This is compared to GAAP operating expenses of $75.8 million and $147.7 million and pro forma operating expenses of $62.2 million and $120.8 million for the same periods in 2015. In addition, Ionis’ operating expenses on a GAAP basis increased due to an increase in non-cash compensation expense that resulted from an increase in the exercise price of the stock options the Company has granted over the past several years.

Net Income (Loss)
Ionis reported a net loss of $56.9 million and $119.8 million for the three and six months ended June 30, 2016, respectively, compared to net income of $35.6 million and $18.9 million for the same periods in 2015. Basic net loss per share for the three and six months ended June 30, 2016 was $0.47 and $0.99, respectively, compared to basic net income per share of $0.30 and $0.16 for the same periods in 2015. Diluted net loss per share for the three and six months ended June 30, 2016 was $0.47 and $0.99, respectively, compared to diluted net income per share of $0.29 and $0.15 for the same periods in 2015. Ionis had a net loss for the three and six months ended June 30, 2016 compared to net income for the same periods in 2015 primarily due to variations in the timing of revenue from license fees and milestone payments. For example, in the second quarter of 2015, the Company recognized $91.2 million in revenue related to its exclusive license agreement with Bayer.

Balance Sheet
As of June 30, 2016, Ionis had cash, cash equivalents and short-term investments of $664.1 million compared to $779.2 million at December 31, 2015. Ionis’ cash balance decreased in the first half of 2016 primarily due to spending to support the Company’s ongoing Phase 3 programs for nusinersen, IONIS-TTRRx and volanesorsen. Ionis’ working capital was $586.9 million at June 30, 2016 compared to $688.1 million at December 31, 2015. The decline in Ionis’ working capital was a result of the cash used in operations and a decline in the Company’s investment in Regulus Therapeutics resulting from a decline in Regulus’ share price. Ionis’ cash balance at June 30, 2016 did not include $85 million, comprised primarily of the $75 million from Biogen for the license of nusinersen, which it will add to its balance sheet in the third quarter.