On February 27, 2017 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported a novel approach to profiling immuno-oncology protein targets through digital quantification using the nCounter Analysis System (Press release, NanoString Technologies, FEB 27, 2017, View Source [SID1234517891]). The data was presented by David Lee, M.D., Ph.D., a Senior Investigator, with the Novartis Institutes for BioMedical Research as part of a Technology Access Program (TAP) for NanoString’s Digital Spatial Profiling (DSP) technology, and was the focus of a poster presentation at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) – Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) (ASCO-SITC) joint conference, being held Orlando, Florida.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Our DSP platform enabled the assessment of 30 proteins simultaneously with digital spatial context that demonstrated strong correlation with IHC methods," stated Joe Beechem, Ph.D., senior vice president of R&D for NanoString. "We were able to characterize the tumor microenvironment allowing us to better understand the function of the immune system and the status of T-cells and checkpoint markers that are critical in immuno-oncology."

Through the collaboration with Novartis, researchers demonstrated:

Spatially-resolved, quantitative protein profiling in FFPE tissue enables detailed molecular characterization of tonsil, melanoma and colorectal tumors

A prototype instrument enabled 30+ multiplexed protein characterization from regions of interest 650 micron down to single cell resolution

The strong correlation of NanoString DSP data to Novartis IHC data indicates the feasibility to spatially profile multiple key proteins with no destruction of patient tissue

Future advances may enable characterization of up to 800 RNA and protein targets at high resolution within spatial context from the complex tumor microenvironment
NanoString is expanding access to the Digital Spatial Profiling TAP. Under the program, technology access partners can submit up to 20 FFPE tissue sections and NanoString will perform a high-plex protein spatial profiling assay from a panel of 30 pre-validated antibodies. An assay report along with raw digital data and processed results will be provided back to partners. Researchers interested in participating in NanoString’s technology access program for its Digital Spatial Profiling technology should contact the company at [email protected].

Digital Spatial Profiling poster:
"A new approach for immuno-oncology biomarker discovery: High-plex, spatial protein profiling based on NanoString digital quantification. (Abstract 27 / BOARD C10)"

First Author: David Lee, M.D., Ph.D., Senior Investigator, Novartis Institutes for BioMedical Research
Poster Session B: Biomarkers and Inflammatory Signatures, and Modulating Innate Immunity
Date: Friday, February 24: 11:30 AM-1:00 PM and 5:30 PM-6:30 PM

On February 27, 2017 Horizon Pharma plc (NASDAQ: HZNP), a biopharmaceutical company focused on improving patients’ lives by identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs, reported its fourth-quarter and full-year 2016 financial results today and provided its full-year 2017 net sales and adjusted EBITDA guidance (Press release, Horizon Pharma, FEB 27, 2017, View Source [SID1234517887]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We delivered a strong fourth quarter and another exceptional year of performance driven by continued commercial execution and the completion of two transformative acquisitions that bolster our rapidly expanding rare disease business," said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. "Our performance and continued strategic acquisitions have strengthened and diversified the Company and positioned us well to deliver on our growth objectives over the long term."
Financial Highlights

(in millions except for per share amounts and percentages) Q4 16 Q4 15 %
Change FY 16 FY 15 %
Change
Net sales (2)
$ 310.3 $ 244.5 27 $ 981.1 $ 757.0 30
Non-GAAP adjusted net sales (2)
310.3 244.5 27 1,046.1 757.0 38
Net (loss) income (1)
(130.5 ) 24.0 NM (166.8 ) 39.5 NM
Non-GAAP net income
106.4 105.5 1 354.4 256.9 38
Adjusted EBITDA
136.4 122.5 11 470.7 362.1 30
Net (loss) earnings per share – diluted
(0.81 ) 0.15 NM (1.04 ) 0.25 NM
Non-GAAP earnings per share – diluted
0.64 0.64 — 2.16 1.65 31

(1) The fourth-quarter and full-year 2016 net losses were primarily impacted by the impairment of in-process research and development and other wind-down costs and charges related to the discontinuation of ACTIMMUNE development for Friedreich’s ataxia and acquisition-related costs primarily related to the acquisition of Raptor Pharmaceutical Corp.
(2) On Sept. 26, 2016, Horizon Pharma agreed to pay Express Scripts $65 million as part of a litigation settlement, which was recorded as a one-time reduction to GAAP net sales for the three months ended Sept. 30, 2016, in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The exclusion of the $65 million settlement from GAAP net sales is the only adjustment reflected in year-to-date 2016 non-GAAP adjusted net sales.

1
LOGO

Company Highlights

• Fourth-quarter 2016 net sales were $310.3 million, an increase of 27 percent compared to the fourth-quarter of 2015, driven by growth across each of the Company’s business units: orphan, rheumatology and primary care.

• Medicines for rare diseases, which include RAVICTI , PROCYSBI , ACTIMMUNE , KRYSTEXXA , BUPHENYL and QUINSAIR represented 43 percent of combined adjusted non-GAAP net sales for the full-year 2016. This includes full-year 2016 PROCYSBI net sales of $128.6 million and QUINSAIR net sales of $3.9 million on a combined and adjusted basis.

• In December 2016, the Company secured formulary status with an additional pharmacy benefit manager (PBM) resulting in contracts with three leading pharmacy benefit managers to improve patient access and long-term durability for the Company’s clinically differentiated primary care medicines.

• In November 2016, the Company presented data on both KRYSTEXXA and RAYOS at the American College of Rheumatology meeting. The Company expects to continue to expand the awareness of KRYSTEXXA as an important treatment option for refractory chronic gout patients.

• On October 25, 2016, Horizon Pharma completed the acquisition of Raptor Pharmaceutical Corp., which was a significant step in advancing the Company’s strategy to expand its rare disease business with the addition of two orphan medicines, PROCYSBI and QUINSAIR.

2
LOGO

Fourth-Quarter and Full-Year 2016 Business Unit Net Sales Results

(in millions except for percentages) Q4 16 Q4 15 %
Change FY 16 FY 15 %
Change
Orphan
$ 88.1 $ 68.2 29 $ 299.3 $ 207.8 44
RAVICTI (1)
32.9 34.5 (4 ) 151.5 86.9 74
ACTIMMUNE
24.2 28.1 (14 ) 104.6 107.4 (3 )
BUPHENYL (1)
4.7 5.6 (16 ) 16.9 13.5 25
PROCYSBI (3)
25.3 — NM 25.3 — NM
QUINSAIR (3)
1.0 — NM 1.0 — NM
Rheumatology
41.6 13.5 208 142.7 45.2 215
KRYSTEXXA (2)
29.5 — NM 91.1 — NM
RAYOS
11.3 11.1 1 47.4 40.3 17
LODOTRA
0.8 2.4 (67 ) 4.2 4.9 (14 )
Primary Care
180.6 162.8 11 604.1 504.0 20
PENNSAID 2%
96.6 55.4 74 304.4 147.0 107
DUEXIS
50.9 60.4 (16 ) 173.7 190.4 (9 )
VIMOVO
31.6 47.0 (33 ) 121.3 166.6 (27 )
MIGERGOT (2)
1.5 — NM 4.7 — NM
Litigation settlement (4)
— — NM (65.0 ) — NM



















Total GAAP net sales (4)
$ 310.3 $ 244.5 27 $ 981.1 $ 757.0 30













Total non-GAAP adjusted net sales (4)
$ 310.3 $ 244.5 27 $ 1,046.1 $ 757.0 38














(1) RAVICTI and BUPHENYL were acquired on May 7, 2015.
(2) KRYSTEXXA and MIGERGOT were acquired on January 13, 2016.
(3) PROCYSBI and QUINSAIR were acquired on October 25, 2016.
(4) On Sept. 26, 2016, Horizon Pharma agreed to pay Express Scripts $65 million as part of a litigation settlement, which was recorded as a one-time reduction to GAAP net sales for the twelve months ended December 31, 2016, in accordance with U.S. GAAP. The exclusion of the $65 million settlement from GAAP net sales is the only adjustment reflected in year-to-date non-GAAP adjusted net sales.

• Orphan Business Unit: Fourth-quarter orphan business unit net sales increased 29 percent compared to the fourth quarter of 2015, and full-year 2016 net sales increased 44 percent compared to the full year of 2015.
RAVICTI net sales in the fourth quarter of 2016 were $32.9 million. RAVICTI net sales for the second half of 2016 were $75.1 million, representing an increase of 11 percent over the same period in 2015. The Company is awaiting approval for its supplemental New Drug Application (sNDA) submitted on June 29, 2016, with the U.S. Food and Drug Administration (FDA) for RAVICTI to expand the age range for chronic management of urea cycle disorders (UCDs) in patients to two months of age and older from two years of age and older. RAVICTI is also expected to launch in Europe in 2017 in partnership with Swedish Orphan Biovitrum AB (SOBI).
ACTIMMUNE net sales in the fourth quarter of 2016 were $24.2 million, relatively flat sequentially versus the third quarter of 2016. The Company has evolved its strategy to establish the role of ACTIMMUNE in a broader range of chronic granulomatous disease (CGD) patients and anticipates ACTIMMUNE returning to growth in 2017.

3
LOGO

On February 23, 2017, at the American Society for Clinical Oncology – Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) meeting, investigators from Fox Chase Cancer Center presented safety data from the first two cohorts of the Phase 1 dose escalation trial evaluating ACTIMMUNE as part of a combination therapy in solid tumors for certain cancers. The preliminary data showed that combination therapy of ACTIMMUNE with nivolumab, a PD-1 inhibitor, was safe and well-tolerated in the first two cohorts. The data also showed statistically significant activation of certain monocytes, or white blood cells in peripheral blood, which demonstrates that ACTIMMUNE is having the desired effect of stimulating immune cells. These are early results, and the third cohort of patients is still under study. Additionally, the Company has received interest in studying ACTIMMUNE in oncology from a number of academic and oncologic institutions and is evaluating additional investigator-initiated trials that could begin in 2017.
On October 25, 2016, the Company completed the acquisition of Raptor Pharmaceutical Corp., adding two orphan medicines to its orphan business unit, PROCYSBI for the treatment of nephropathic cystinosis, a rare metabolic disorder, and QUINSAIR for the management of chronic pulmonary infections for patients with cystic fibrosis. PROCYSBI net sales for the partial fourth quarter of 2016 were $25.3 million. For the full-year 2016, PROCYSBI total sales were $128.6 million on a combined and adjusted basis, which represented growth of 36 percent, compared to Raptor’s sales of PROCYSBI during the full-year 2015.

• Rheumatology Business Unit: KRYSTEXXA sales in the fourth quarter of 2016 were $29.5 million, an increase of 16 percent sequentially compared to the third quarter of 2016. The Company has invested in additional commercial support, education and outreach efforts to continue to drive long-term growth of this medicine. This additional investment and improved commercial strategy has driven a steady increase in average monthly KRYSTEXXA vials and net sales since acquiring the medicine in January of 2016. RAYOS sales in the fourth quarter of 2016 were $11.3 million, an increase of 1 percent compared to the fourth quarter of 2015.

• Primary Care Business Unit: Total sales for the primary care business unit increased 11 percent compared to the fourth quarter of 2015, driven by strong performance of PENNSAID 2% . Sales of PENNSAID 2%, DUEXIS and VIMOVO in the fourth quarter of 2016 were $96.6 million, $50.9 million and $31.6 million, respectively.
Fourth-Quarter 2016 Financial Results
Note: For additional detail and reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, please refer to the tables at the end of this release.

• Gross Profit: Under U.S. GAAP in the fourth quarter of 2016, the gross profit ratio was 51.7 percent compared to 72.4 percent in the fourth quarter of 2015. The non-GAAP gross profit ratio in the fourth quarter of 2016 was 91.9 percent compared to 91.6 percent in the fourth quarter of 2015.

4
LOGO


• Operating Expenses: On a GAAP basis in the fourth quarter of 2016, total operating expenses were 93.7 percent of sales which includes $66 million for the impairment of in-process research and development and other wind-down costs related to the discontinuation of ACTIMMUNE for Friedreich’s ataxia and acquisition-related costs primarily related to the acquisition of Raptor Pharmaceutical Corp. Non-GAAP total operating expenses in the fourth quarter of 2016 were 47.6 percent of net sales. Research & development (R&D) expenses were 7.7 percent of net sales, sales & marketing (S&M) expenses were 29.9 percent of net sales and general & administrative (G&A) expenses were 34.8 percent of net sales. Non-GAAP R&D expenses were 5.6 percent of net sales, non-GAAP S&M expenses were 27.6 percent of net sales, and non-GAAP G&A expenses were 14.4 percent of net sales.

• Income Tax Rate: The income tax rate in the fourth quarter of 2016 on a GAAP basis was 18.3 percent and on a non-GAAP basis was 5.7 percent. The income tax rate for the full-year 2016 on a GAAP basis was 26.9 percent and on a non-GAAP basis was 12.2 percent.

• Net (Loss) Income: On a GAAP basis in the fourth quarter of 2016, net loss was $130.5 million and was impacted by the impairment of in-process research and development and other wind-down costs and charges related to the discontinuation of development of ACTIMMUNE in Friedreich’s ataxia and acquisition-related costs primarily related to the acquisition of Raptor Pharmaceutical Corp. Non-GAAP adjusted net income was $106.4 million.

• EBITDA: In the fourth quarter of 2016, EBITDA was ($8.7) million and was impacted by the impairment of in-process research and development and other wind-down costs and charges related to the discontinuation of development of ACTIMMUNE in Friedreich’s ataxia and acquisition-related costs primarily related to the acquisition of Raptor Pharmaceutical Corp. Adjusted EBITDA in the fourth quarter of 2016 was $136.4 million.

• Earnings (Loss) per Share: On a GAAP basis in the fourth quarter of 2016, diluted loss per share was $0.81 and in the fourth quarter of 2015, diluted earnings per share was $0.15. Non-GAAP diluted earnings per share in the fourth quarter of 2016 and 2015 were $0.64 and $0.64, respectively. Weighted average shares outstanding used for calculating GAAP diluted loss per share and non-GAAP diluted earnings per share in the fourth quarter of 2016 were 161.4 million and 165.1 million, respectively.
Cash Flow Statement and Balance Sheet Highlights

• On a GAAP basis in the fourth quarter of 2016, operating cash flow was $139.2 million. Non-GAAP operating cash flow was $193.1 million in the fourth quarter of 2016.

• On a GAAP basis for the full-year 2016, operating cash flow was $369.5 million. Non-GAAP operating cash flow was $452.9 million for the full-year 2016.

• The Company had cash and cash equivalents of $509.1 million as of December 31, 2016.

5
LOGO


• Total principal amount of debt outstanding was $1.944 billion as of December 31, 2016, which was composed of $769 million in senior secured term loans due 2021, $475 million senior notes due 2023, $300 million senior notes due 2024 and $400 million exchangeable senior notes due 2022. Net debt at December 31, 2016, was $1.435 billion.
Horizon Pharma Provides Full-Year and First-Half 2017 Guidance

• Full-year 2017 net sales guidance of $1.24 billion to $1.29 billion, representing year-over-year growth of 19 to 23 percent.

• Full-year 2017 adjusted EBITDA guidance of $525 million to $575 million, representing year-over-year growth of 12 to 22 percent and approximately 43.5 percent of sales.

• The Company is providing guidance on the expected pacing of 2017 net sales and adjusted EBITDA in the tables below. They include first-quarter and second-quarter net sales guidance as a percent of full-year 2017 net sales guidance, first-quarter and second-quarter adjusted EBITDA guidance as a percent of full-year 2017 adjusted EBITDA guidance, as well as the quarterly cadence for historical net sales or non-GAAP adjusted net sales and adjusted EBITDA.

Percent of Full-Year Net Sales Contribution

Q1 Q2 2H
2014
17.5 % 22.2 % 60.3 %
2015
14.9 % 22.8 % 62.2 %
2016
19.6 % 24.6 % 55.8 %
2017 estimate*
18-20 % 22-24 % 56-60 %
Percent of Full-Year Adjusted EBITDA Contribution

Q1 Q2 2H
2014
10.0 % 24.7 % 65.2 %
2015
9.0 % 21.0 % 70.0 %
2016
15.3 % 25.7 % 59.0 %
2017 estimate*
12-14 % 22-24 % 62-66 %

* 2017 percentages based on midpoint of full-year 2017 guidance range.

On February 28, 2017 Checkpoint Therapeutics, Inc. ("Checkpoint") (OTCQX: CKPT), a Fortress Biotech (NASDAQ: FBIO) company, reported that the U.S. Patent and Trademark Office has issued a composition of matter patent for CK-101 (also known as RX518), Checkpoint’s oral, third-generation epidermal growth factor receptor (EGFR) inhibitor product candidate under development for the treatment of patients with EGFR mutation-positive non-small cell lung cancer (NSCLC) (Press release, Fortress Biotech, FEB 27, 2017, View Source [SID1234517885]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

U.S. Patent No. 9,550,770 specifically covers the compound, CK-101, and a broad range of related compounds, salts, pharmaceutical compositions and various dosage forms of such pharmaceutical compositions. Pursuant to Checkpoint’s existing license agreement with NeuPharma, Inc., the U.S. patent protects CK-101 through at least August 2034, exclusive of any additional patent-term extensions that might become available.

"We are excited to announce the issuance of the first U.S. patent for CK-101, which affords broad, foundational composition of matter protection for our compound," commented James F. Oliviero, President and CEO of Checkpoint. "We plan to continue to expand and fortify our intellectual property estate for CK-101 in the U.S. and abroad as we advance CK-101 through clinical development."

CK-101 is currently being studied in the Phase 1 dose-escalation portion of a Phase 1/2 clinical study. The Phase 1 portion of the study is evaluating the safety and tolerability of ascending doses of CK‐101 in patients with advanced solid tumors to determine the maximum tolerated dose and/or recommended Phase 2 dose. The Phase 2 portion of the study is expected to commence in the second half of 2017 and will evaluate the safety and efficacy of CK-101 in patients with EGFR T790M mutation-positive NSCLC.

Checkpoint’s common stock currently trades on the OTCQX Best Market under the ticker symbol "CKPT."

On February 27, 2017 Exelixis, Inc. (Nasdaq:EXEL) reported financial results for the fourth quarter and full year of 2016 and provided an update on progress toward delivering upon its key corporate objectives, as well as commercial and clinical development milestones (Press release, Exelixis, FEB 27, 2017, View Source [SID1234517861]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Exelixis is focused on maximizing the opportunity for its two internally-discovered compounds, cabozantinib and cobimetinib, each of which has the potential to help patients around the world fighting a variety of cancers. The company’s most immediate priority is continuing to execute on the U.S. launch of CABOMETYX (cabozantinib) tablets as a treatment for patients with advanced renal cell carcinoma (RCC) who have received prior anti-angiogenic therapy. CABOMETYX generated $44.7 million and $93.5 million in net product revenue during the fourth quarter and full year of 2016, respectively. COMETRIQ (cabozantinib) capsules for the treatment of medullary thyroid cancer generated an additional $7.2 million and $41.9 million in net product revenue during the fourth quarter and full year of 2016, respectively. In addition, Exelixis is preparing a regulatory filing for cabozantinib as a treatment for previously-untreated patients with advanced RCC based on the positive data from the CABOSUN randomized phase 2 trial. Exelixis and its partner Genentech, a member of the Roche Group, are co-promoting Cotellic (cobimetinib) in the United States, while Genentech continues to advance the cobimetinib clinical development program, which now includes three ongoing or planned phase 3 pivotal trials of combination regimens including cobimetinib for forms of colorectal cancer and advanced melanoma.

"2016 marked an inflection point for Exelixis, with the U.S. approval and launch of CABOMETYX, and the emergence of key data sets that have supported a significantly expanded late-stage clinical development program for cobimetinib. At the same time, we secured important partnerships and collaborations that will further advance the cabozantinib franchise on a global basis and improved our balance sheet, providing strength and flexibility as we move forward," said Michael M. Morrissey, Ph.D., President and Chief Executive Officer of Exelixis.

"We started 2017 in a strong financial position with a focus on driving the business to generate free cash to reinvest in our pipeline. We are making progress towards a U.S. regulatory filing based on the CABOSUN results, targeted for the third quarter of this year, and have recently announced collaborations focused on conducting late-stage clinical trials of cabozantinib in combination with leading immunotherapies. Separately, our partner Genentech continues to expand its late-stage clinical development program for cobimetinib in areas of considerable therapeutic and commercial potential. The robust clinical development programs for both cabozantinib and cobimetinib form a solid foundation to build on in the year ahead as we and our partners work to improve cancer care for patients around the world."

Cabozantinib Highlights

Strong Growth in Cabozantinib Franchise Net Revenues. Cabozantinib generated $51.9 million in net product revenue during the fourth quarter of 2016, an increase of 21 percent from the third quarter of 2016. Full year 2016 net product revenue was $135.4 million, an increase of 296 percent year-over-year. The year-over-year increase was driven primarily by the U.S. introduction of CABOMETYX following FDA approval in April 2016 as a treatment for patients with advanced RCC who have received prior anti-angiogenic therapy.

Presented Positive Results from Phase 2 CABOSUN Trial in Advanced RCC. At the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress in October 2016, detailed results were presented from CABOSUN, the randomized phase 2 trial of cabozantinib compared with sunitinib in patients with previously untreated advanced RCC with intermediate- or poor-risk disease per the International Metastatic Renal Carcinoma Database Consortium risk criteria. In this trial, cabozantinib demonstrated a statistically significant and clinically meaningful reduction in the rate of disease progression or death as compared to sunitinib. The CABOSUN results were the subject of a late-breaking abstract at ESMO (Free ESMO Whitepaper), and were highlighted at one of the Congress’ Presidential Symposia and in its official media program. CABOSUN was conducted by The Alliance for Clinical Trials in Oncology (The Alliance) with support from the National Cancer Institute’s Cancer Therapy Evaluation Program (NCI-CTEP).

Advanced Filing Plans for Cabozantinib in Previously Untreated Advanced RCC. In the fourth quarter 2016, the transfer of the CABOSUN clinical database from The Alliance to Exelixis was completed, and Exelixis is preparing a Supplemental New Drug Application, which is targeted for submission in the third quarter of 2017.

Phase 1 Trial Results for Cabozantinib in Combination with Nivolumab in Advanced Genitourinary Tumors. Also at the ESMO (Free ESMO Whitepaper) 2016 Congress, encouraging results were presented from Part 1 of the two part NCI-CTEP-sponsored phase 1 trial of cabozantinib in combination with nivolumab in patients with previously treated genitourinary tumors. Expansion cohorts assessing cabozantinib and nivolumab, including patients with bladder, renal, and rare genitourinary cancers, are also currently being accrued.

At the ASCO (Free ASCO Whitepaper) Genitourinary Cancers Symposium in February 2017, investigators presented new data from Part 1 as well as Part 2 of the trial, which adds ipilimumab to the combination regimen of cabozantinib and nivolumab.

Collaborations for Late-Stage Development of Cabozantinib in Combination with Immunotherapies. After the year ended, Exelixis announced agreements with Bristol-Myers Squibb (BMS) and Roche to collaborate on the development of cabozantinib in combination with immunotherapy agents. Exelixis and BMS announced their intent to collaborate on the evaluation of cabozantinib in combination with Opdivo (nivolumab) alone or in combination with Yervoy (ipilimumab) in a phase 3 trial in first-line RCC, and potentially in other tumor types including hepatocellular carcinoma (HCC) and bladder cancer. Studies are anticipated to begin in 2017. The collaborations build upon previously published preclinical and clinical data that underscore the scientific rationale for combining cabozantinib with immunotherapies, and provide the resources and collaborative framework to evaluate the potential for cabozantinib combination regimens to benefit patients with a variety of cancers. Separately, Exelixis and Roche will collaborate to initiate testing of cabozantinib in combination with Tecentriq (atezolizumab), an anti-PD-L1 antibody, in patients with advanced RCC or bladder cancer.

New and Amended Partnerships to Support the Global Cabozantinib Franchise. On December 21, 2016, Exelixis and Ipsen announced an amendment to their exclusive collaboration and licensing agreement for the commercialization and continued development of cabozantinib, to include commercialization rights in Canada for Ipsen. Exelixis received a $10.0 million upfront payment and is eligible to receive regulatory milestones for the approvals of cabozantinib in Canada for advanced RCC after prior treatment, for first-line advanced RCC, and advanced HCC, as well as additional regulatory milestones for potential further indications. In line with the prior transaction between the parties, the agreement also includes commercial milestones and provides for Exelixis to receive tiered royalties on Ipsen’s net sales of cabozantinib in Canada.

After the year ended, in January 2017 Exelixis and Takeda jointly announced an exclusive licensing agreement for the commercialization and further development of cabozantinib in Japan, including rights to CABOMETYX and COMETRIQ. Under the terms of the agreement, Exelixis received a $50.0 million upfront payment. Exelixis is eligible to receive development, regulatory, and first-sales milestones of $95.0 million for the first three planned indications. In addition, Exelixis will be eligible to receive royalties on sales by Takeda. Takeda will be responsible for 20 percent of the costs associated with the global cabozantinib development plan and 100 percent of costs associated with the cabozantinib development activities that are exclusively for the benefit of Japan.

Cobimetinib Highlights

Results Presented at ESMO (Free ESMO Whitepaper) 2016 from Cobimetinib Combination Trials Support Further Advancement. Cobimetinib, the Exelixis-discovered MEK inhibitor that is the subject of a worldwide collaboration with Genentech, a member of the Roche Group, was featured in seven presentations at the ESMO (Free ESMO Whitepaper) 2016 Congress. For the first time, investigators presented preliminary results from the phase 1b clinical trial of the triple combination of cobimetinib, vemurafenib, and atezolizumab in patients with previously untreated BRAF V600 mutation-positive advanced melanoma. The regimen was associated with promising antitumor activity and a manageable safety profile. These results provided the rationale for the Roche-sponsored phase 3 pivotal trial, IMspire150 TRILOGY, which began enrolling patients in January 2017.

Investigators also presented updated results from the phase 1 trial of cobimetinib plus atezolizumab in advanced colorectal cancer that provide the rationale for IMblaze370 (formerly known as COTEZO), the ongoing phase 3 pivotal trial in the same disease setting. New data from the phase 1 part of COLET, the phase 1/2 trial of cobimetinib and paclitaxel in triple-negative breast cancer, were also the subject of a poster presentation at the meeting.

Presentation of Cobimetinib Combination Therapy Data at the Society for Melanoma Research 2016 Congress. On November 7, 2016, Exelixis announced the presentation of data from the metastatic melanoma cohort of a phase 1b dose escalation trial of cobimetinib and atezolizumab in patients with solid tumors. Data from this trial will form the basis of a Genentech-sponsored phase 3 pivotal trial of the combination in patients with previously untreated BRAF wild-type advanced melanoma, which is also expected to start this year.

Update on Dispute between Exelixis and Genentech. Since the conclusion of the fourth quarter, Exelixis announced that Genentech, Inc., a member of the Roche Group, had withdrawn its counterclaim against Exelixis in the ongoing JAMS arbitration concerning alleged breaches of the parties’ collaboration agreement. Genentech had asserted a counterclaim for breach of contract, which sought monetary damages and interest related to cost allocations under the collaboration agreement. When notifying the arbitral panel, and Exelixis, of this unilateral action, Genentech further stated that it is changing the manner in which it allocates promotional expenses of the Cotellic plus Zelboraf (vemurafenib) combination therapy. Genentech’s revised allocation applies retrospectively and prospectively and substantially reduces Exelixis’ exposure to costs associated with promotion of the Cotellic plus Zelboraf combination in the United States.

2017 Financial Guidance

The company is providing guidance that total costs and operating expenses for the full year will be between $290 million and $310 million. This guidance includes approximately $25 million of non-cash costs and expenses related primarily to stock-based compensation expense.

Fourth Quarter and Full Year 2016 Financial Results

Total revenues for the quarter ended December 31, 2016 were $77.6 million, compared to $9.9 million for the comparable period in 2015. Total revenues for the year ended December 31, 2016 were $191.5 million, compared to $37.2 million for the comparable period in 2015.

Total revenues for the quarter ended December 31, 2016 include $51.9 million of net product revenues compared to $9.9 million for the comparable period in 2015. Net product revenues for the year ended December 31, 2016 were $135.4 million, compared to $34.2 million for the comparable period in 2015. The increase in net product revenues for both the quarter and year ended December 31, 2016, as compared to the same periods in 2015, primarily reflects the impact of the commercial launch of CABOMETYX in late April 2016.

Total revenues for the quarter ended December 31, 2016 also include two $10.0 million milestones achieved for the first commercial sales of CABOMETYX by Ipsen in Germany and the United Kingdom. Total revenues for the year ended December 31, 2016 also include the recognition of $20.0 million of revenue for milestones from two of our collaboration partners, Daiichi Sankyo and Merck. Total revenues for the quarter and year ended December 31, 2016 also include $1.0 million and $2.8 million, respectively, of royalty revenues from Ipsen and Roche and $4.7 million and $13.3 million, respectively, of license revenues from Ipsen.

In comparison, during the year ended December 31, 2015, we recognized $3.0 million of contract revenues for a milestone payment received from Merck.

Research and development expenses for the quarter ended December 31, 2016 were $23.8 million, compared to $23.5 million for the comparable period in 2015. Research and development expenses for the year ended December 31, 2016 were $96.0 million, compared to $96.4 million for the comparable period in 2015. For both the quarter and year-ended December 31, 2016 as compared to the same periods in 2015, decreases in share-based compensation and the allocation of general corporate costs were offset by increases in personnel related expenses resulting from an increase in headcount predominantly associated with the build-out of the Exelixis Medical Affairs organization. For the year-ended December 31, 2016 as compared to the same period in 2015, there were also decreases in clinical trial costs for METEOR, the Company’s phase 3 trial in advanced RCC.

Selling, general and administrative expenses for the quarter ended December 31, 2016 were $13.0 million, compared to $17.1 million for the comparable period in 2015. Selling, general and administrative expenses for the year ended December 31, 2016 were $116.1 million, compared to $57.3 million for the comparable period in 2015. For both the quarter and year-ended December 31, 2016 as compared to the same periods in 2015, there were increases in personnel related expenses resulting from an increase in headcount connected with the build-out of the Exelixis U.S. commercial organization and outside services to support the launch and commercialization of CABOMETYX. These increases were offset by a decrease in marketing costs related to losses on our collaboration with Genentech.

As described above, in December 2016 Genentech stated that it changed, both retroactively and prospectively, the manner in which it allocates promotional expenses of the Cotellic plus Zelboraf combination therapy. As a result, Exelixis is relieved of $18.7 million of disputed costs previously recorded by Exelixis, and Exelixis has invoiced Genentech for expenses, with interest, that Exelixis had previously paid. Accordingly, during the quarter ended December 31, 2016, we offset selling, general and administrative expenses for a $23.1 million recovery of net losses, which had been recorded from 2013 through September 30, 2016, including $13.3 million for losses that we had recognized and recorded prior to 2016. During the quarter and year ended December 31, 2016, we also recognized a net gain of $0.6 million and a net loss of $4.5 million, respectively, for current U.S. activities in those periods under the collaboration agreement as computed under Genentech’s revised cost allocation approach.

Other expense, net for the quarter ended December 31, 2016 was a net expense of ($3.8) million compared to ($9.9) million for the comparable period in 2015. Other expense, net for the year ended December 31, 2016 was a net expense of ($42.1) million compared to ($40.3) million for the comparable period in 2015. The decrease in other expense, net for the quarter ended December 31, 2016 as compared to 2015 was primarily due to the reduction in interest expense as a result of the conversion and redemption of $287.5 million in aggregate principal amount of our 4.25% Convertible Senior Subordinated Notes due 2019 (2019 Notes). For the year ended December 31, 2016, the reduction in interest expense was offset by $13.9 million of loss associated with the conversion of our 2019 Notes for 54,009,279 shares of our common stock.

Net income (loss) for the quarter ended December 31, 2016 was net income of $35.1 million, or $0.12 per share, basic and fully diluted, compared to a net loss ($41.6) million, or ($0.18) per share, basic and fully diluted, for the comparable period in 2015. Net loss for the year ended December 31, 2016 was a net loss ($70.2) million, or ($0.28) per share, basic and fully diluted, compared to a net loss ($161.7) million, or ($0.77) per share, basic and fully diluted, for the comparable period in 2015. The decrease in net loss for the quarter and year ended December 31, 2016 was primarily due to increases in net product revenues; increases in collaboration revenues; the recovery of net losses previously recorded under our collaboration agreement with Genentech; and a decrease in interest expense; partially offset by increases in personnel expenses associated with the increase in headcount connected with the build-out of the Exelixis U.S. commercial and medical affairs organizations and other costs associated with the launch of CABOMETYX. For the year ended December 31, 2016, the decrease in net loss was also partially offset by the loss associated with the conversion of the 2019 Notes.

Cash and cash equivalents, short- and long-term investments and long-term restricted cash and investments totaled $479.6 million at December 31, 2016 as compared to $253.3 million at December 31, 2015.

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 December 30, 2016 and January 1, 2016 are indicated as being as of and for the periods ended December 31, 2016 and December 31, 2015, respectively.

On February 27, 2017 Advaxis, Inc. (NASDAQ:ADXS) and SELLAS Life Sciences Group, both late-stage biopharmaceutical companies focused on developing cancer immunotherapies, reported that Advaxis has granted SELLAS a license to develop a novel cancer immunotherapy agent using Advaxis’ proprietary Lm-based antigen delivery technology with SELLAS’ patented WT1 targeted heteroclitic peptide antigen mixture (galinpepimut-S) (Press release, Advaxis, FEB 27, 2017, View Source [SID1234517853]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Advaxis’ proprietary technology generates innate immune stimulation, alongside potent and sustained T-cell responses. When combined with SELLAS’ WT1 antigens, this has the potential to precisely direct an immune response, yielding improved clinical activity against many cancer types that express WT1. SELLAS’ future clinical studies will investigate this capability in the presence of measurable residual or recurrent disease.

Galinpepimut-S has demonstrated positive phase 2 clinical results in acute myeloid leukemia and malignant pleural mesothelioma and positive early clinical data in multiple myeloma. It has been shown to induce strong immune responses (CD4+/CD8+) against the WT1 antigen and to access a broad range of HLA types. Advaxis’ Lm-based antigen delivery technology has demonstrated the potential to induce an enhanced innate immune stimulation and generate specific T cells while reducing immune tolerance in the tumor microenvironment.

Under the terms of the collaboration, Advaxis will conduct all pre-clinical activities required for an IND filing. Thereafter, SELLAS will be responsible for all clinical development and commercial activities. Advaxis will receive future payments of up to $358 million from SELLAS if certain development, regulatory, and commercial milestones are met. Following any regulatory approval of the product candidate emanating from this particular program, SELLAS has agreed to pay Advaxis single-digit to low double-digit royalties based on worldwide net sales upon commercialization.

"WT1 is one of the most widely expressed cancer antigens and was named a top target for cancer immunotherapy by the National Cancer Institute," said Daniel J. O’Connor, President and Chief Executive Officer of Advaxis. "SELLAS’ proprietary galinpepimut-S therapy has already demonstrated clinical benefit and a strong immune response against WT1 expressing cancer cells. We believe that the use of our proprietary Lm-based antigen delivery technology with SELLAS’ proprietary technology could result in a very compelling WT1-targeted cancer immunotherapy."

Angelos Stergiou, MD, ScD h.c., Vice Chairman and Chief Executive Officer of SELLAS, added: "The combined Advaxis-SELLAS Lm-WT1 active immunotherapy candidate has the potential to deliver SELLAS’ WT1 proprietary peptide antigens in a novel way, taking advantage of our antigen’s ability to target a wide variety of tumors of diverse immune system HLA genotypes. The delivery afforded by the Advaxis technology expands upon our current programs and should substantially enhance the clinical utility seen with galinpepimut-S, and eventually, the cancer immunotherapy armamentarium for a variety of tumors."

About SELLAS Life Sciences Group

SELLAS Life Sciences is a late-stage biopharmaceutical company focused on the development of novel cancer immunotherapies and therapeutics for a broad range of cancer indications. The Company’s lead product candidate, galinpepimut-S, is a cancer immunotherapeutic agent licensed from Memorial Sloan Kettering Cancer Center that targets a broad spectrum of hematologic cancers and solid tumor indications. Galinpepimut-S is poised to enter Phase 3 clinical trials in patients with acute myeloid leukemia (AML) and mesothelioma in the first and second half of 2017, respectively. SELLAS recently received orphan drug designations by the US FDA, as well as the EMA, for galinpepimut-S in AML and MPM; as well as Fast Track Designation for AML and mesothelioma (MPM) by the US FDA.

Galinpepimut-S also is in various development phases in multiple myeloma, ovarian cancer, and soon in other indications as monotherapy or in combination with other immuno-oncology agents.

SELLAS was founded in 2012 and is headquartered in Bermuda, with additional offices in New York. For more information, visit www.sellaslifesciences.com.

About SELLAS’ WT1 Immunotherapeutic Anti-cancer Treatment, Galinpepimut-S

SELLAS’ WT1 immunotherapeutic anti-cancer treatment, galinpepimut-S, which was licensed by Sellas from Memorial Sloan Kettering Cancer Center, is a clinical-stage cancer immunotherapy being developed to target hematologic cancers and solid tumors, including AML, MPM, multiple myeloma, ovarian cancer, and multiple other cancers. The WT1 antigen is a transcription factor that is not generally expressed in normal adult cells, but appears in a large number of cancers, as well as in certain cancer stem cells. WT1 has been ranked by the NCI as the number 1 target for cancer immunotherapy. While WT1 has not been druggable by traditional approaches, it can be targeted by the immune system. Specifically, a number of different peptide sequences from the WT1 antigen have been identified as immunogenic and capable of stimulating cytotoxic T cells that can target and kill WT1-expressing cancer cells. Studies also have shown that WT1 does not provoke tolerization and that patients’ T cells can remain reactive to the antigen over time.

Galinpepimut-S, originally developed by MSK and licensed to SELLAS, comprises four modified heteroclitic peptide chains that induce a strong innate immune response (CD4+/CD8+ T cells) against the WT1 antigen. Galinpepimut-S is administered in combination with an adjuvant and an immune modulator to improve the immune response to the target. Based on its mechanism and the accumulating evidence of activity in mid-stage trials, galinpepimut-S may have the potential to complement currently available therapies by destroying residual tumor cells of cancers in remission and providing ongoing immune surveillance for recurrent tumors. Overall, SELLAS’ galinpepimut-S could target over 20 cancers that over-express WT1, many of which are associated with relapse rates of up to 80 percent or more, as seen in patients with AML and MPM.