On May 10, 2017 SciClone Pharmaceuticals, Inc. (NASDAQ: SCLN) reported financial results for the quarter ended March 31, 2017 (Press release, SciClone Pharmaceuticals, MAY 10, 2017, View Source [SID1234519065]).

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Revenues: In the first quarter 2017, SciClone reported revenues of $42.9 million, compared to $36.5 million for the same period in 2016.
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GAAP Diluted EPS: In the first quarter 2017, SciClone reported GAAP diluted earnings per share of $0.28, compared to $0.15 for the same period in 2016.
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Non-GAAP Diluted EPS: In the first quarter 2017, SciClone reported non-GAAP diluted earnings per share of $0.31, compared to $0.19 for the same period in 2016.

Revenues in the first quarter of 2017 were $42.9 million, a $6.4 million or 18% increase, compared to $36.5 million for the same period in 2016. ZADAXIN revenues were $39.5 million in the first quarter of 2017, a $5.9 million or 17% increase, compared to $33.6 million for the same period in 2016. Of the $39.5 million in ZADAXIN revenues, $4.2 million was attributed to revenues from sales generated in the fourth quarter of 2016 but recognized in the first quarter of 2017. This $4.2 million of revenue is a result of fourth quarter sales that were above the reference tender price under a provision in the agreement with the Company’s China distributor to share, in part, in the burden of price reductions. Promotion services revenues were $1.3 million for the first quarter of 2017, a $0.1 million or 6% increase, compared to $1.2 million for the same period in 2016.

On a GAAP basis, SciClone reported net income in the first quarter of 2017 of $14.6 million, or $0.28 and $0.28 per share on a basic and diluted basis, respectively, compared to net income of approximately $7.9 million, or $0.16 and $0.15 per share on a basic and diluted basis, respectively, for the same period in 2016.

SciClone’s non-GAAP net income in the first quarter of 2017 was $16.6 million, or $0.32 and $0.31 per share on a basic and diluted basis, respectively, compared with non-GAAP net income of $9.7 million, or $0.20 and $0.19 per share on a basic and diluted basis, respectively, for the same period of the prior year.Both GAAP and non-GAAP net income were favorably impacted by the additional revenue recognition for ZADAXIN fourth quarter sales and a Chinese government subsidy in the first quarter of 2017.

Friedhelm Blobel, PhD, SciClone’s Chief Executive Officer commented: "We delivered a strong first quarter performance, in line with our expectations, and reflecting the continued demand for, and growth potential of, ZADAXIN and our core business. ZADAXIN’s competitive position remains strong, with continued volume growth despite generic competition. ZADAXIN’s double digit volume growth rate continued this quarter, underscoring its strength as the leading branded thymalfasin, with a 17% volume share and more than a 40% value share. We do face continued pricing pressure, with tenders in two provinces recently announced at prices lower than the reference price with our distributor. We cannot determine at this time with certainty when these prices will take effect, or when they will impact prices in other provinces, but we are likely to experience some effect of those lower prices at some point during the next few quarters. We may also see some pressure on unit volumes in some areas as a result of reduced national-level reimbursement for thymalfasins."

"We have demonstrated our ability to manage the various challenges of the China market effectively to date, and we are continuing to focus on strategies to expand the market for ZADAXIN, manage the impact of potential reimbursement changes and provincial pricing pressures and actively seek to participate in the provincial reimbursement negotiations for thymalfasins to maximize future reimbursement for ZADAXIN. We further expect that pricing pressures on revenue in 2017 will be offset, at least in part, through continued sharing of the burden with our China distributor and potentially through volume increases. We are confident that ZADAXIN has significant growth potential as a differentiated, high quality, Western-manufactured brand."

"We were pleased to see continued strong growth in our oncology portfolio in the first quarter. The market introduction of DC Bead to treat liver cancer is continuing to progress, although slower than anticipated. We are continuing implementation of our academic-focused marketing effort to build the market for DC Bead as an alternative to conventional TACE procedures using gels. Our development portfolio continue to advance, led by Angiomax (bivalirudin) for which we expect to file the NDA in the coming months."

"As we near the mid-year mark for 2017, we have confidence that our core strategies to grow our commercial business, advance and expand our development portfolio through creative partnering, maintain high levels of fiscal responsibility, and strong compliance are on track. We believe we are well positioned to continue to build our reputation and standing as a key player in the evolving China pharma market."

For the first quarter of 2017, sales and marketing (S&M) expenses were $12.8 million, compared with $12.4 million for the same period in 2016. The increase in S&M expenses for first quarter of 2017, compared to the same period in 2016, related to increases in salaries and benefits, mainly from annual increases, and to increased sales commissions based on increased ZADAXIN sales.

For the first quarter of 2017, research and development (R&D) expenses were $2.5 million, compared with $1.5 million of R&D expenses for the same period of 2016. R&D expenses were higher for the first quarter of 2017, compared to the first quarter of 2016, related to R&D activities in China that relate to development expenses of product candidates in-licensed from certain business partners.

For the first quarter of 2017, general and administrative (G&A) expenses were $7.2 million, compared with $7.4 million for the same period in 2016. G&A expenses were lower for the first quarter of 2017, compared to the first quarter of 2016, due to a foreign currency gain of $615 thousand on re-measuring operational monetary assets partially offset by an increase in salaries and benefits mainly from annual increases.

For the first quarter of 2017, other income, net was $1.0 million, compared with $0.1 million for the same period in 2016. Other income, net was higher principally for the first quarter of 2017, compared to the first quarter of 2016, as a result of a $1.0 million government subsidy related to the Company’s China operations which had no future performance obligations and was recognized upon receipt as other income.

For the first quarter of 2017, income tax provision was approximately $1.0 million, compared with $1.9 million for the same period in 2016. The $1.9 million income tax provision for the first quarter of 2016 included $1.2 million in additional tax expense representing the correction of an error related to a previously unrecognized liability for an uncertain tax provision in China.

As of March 31, 2017, cash and cash equivalents totaled $141.3 million, compared to $134.4 million as of December 31, 2016.

SciClone has presented non-GAAP information above as the Company believes this non-GAAP information is useful for investors, taken in conjunction with SciClone’s GAAP financial statements, because management uses such information internally for its operating, budgeting and financial planning purposes. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of SciClone’s operating results as reported under GAAP. The non-GAAP calculations and reconciliation are provided in the accompanying table titled "Reconciliation of GAAP to Non-GAAP Net Income."

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On May 10, 2017 Onxeo S.A. (Euronext Paris, NASDAQ Copenhagen: ONXEO), a clinical-stage biotechnology company specializing in the development of innovative drugs for the treatment of orphan diseases, in particular in oncology, reported that it has received a Notice of Allowance from the U.S. Patent and Trademark Office for a patent application covering the specific route of administration for Livatag, which is currently in a phase III clinical trial (ReLive) for the second-line treatment of hepatocellular carcinoma (primary liver cancer) (Press release, Onxeo, MAY 10, 2017, View Source [SID1234519054]).

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Livatag (doxorubicin Transdrug) is based on an innovative technology allowing the formulation of doxorubicin (a chemotherapeutic agent) within nanoparticles composed of polyalkylcyanoacrylate, cyclodextrin, and poloxamer. This nanoparticle formulation provides new and promising properties, including overcoming the mechanisms of chemoresistance developed by tumor cells that affect the efficacy of chemotherapy agents.

"The United States represents a significant target market for Livatag. This new U.S. patent significantly strengthens our Livatag intellectual property portfolio, and enhances the value of this late-stage product candidate. We look forward to the availability of data from our ReLive trial in mid-2017," said Judith Greciet, CEO of Onxeo.

The new patent provides protection of the associated claims in the U.S. until 2032, and is in addition to the previously issued patents for the same patent family in other major territories, such as Europe and Japan. An additional patent family has also been filed based on a specific composition of Livatag nanoparticles that, if granted, would extend the patent protection of Livatag to 2036.

On May 10, 2017 Progenra, Inc. reported that it has received the Official Notice of Allowance (dated March 30, 2017) of its patent application entitled "Methods of treating cancer through the inhibition of USP7 and immune system modulation (Press release, Progenra, MAY 10, 2017, View Source [SID1234519053])." The patent, based on work described in a recent publication, is related to a new immune oncology therapy based on the inhibition of the ubiquitin-deconjugating enzyme USP7 by a small molecule. USP7 is a master positive regulator of cancer as it both directly supports the growth and survival of cancer cells and prevents the patient’s immune cells from recognizing and eradicating the tumor. Progenra is developing small molecule inhibitors of USP7 for clinical trial and, according to its President, Dr. Tauseef Butt, hopes to initiate Phase I in early 2018. He stated that "we continue to obtain data showing that our USP7 inhibitors have the potential to eliminate cancer by both direct cytotoxic and indirect immunological mechanisms. This class of drug could become a powerful alternative to the biological immune checkpoint inhibitors currently on the market (such as Opdivo and Keytruda), as well as a component of combination therapy with these agents." In animal efficacy models, Progenra compounds have demonstrated anti-cancer activity that was superior to that of Yervoy, Opdivo, or Keytruda. These results point to a potentially radical development in cancer treatment — a small molecule single agent that works as well as or better than combination protocols.

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On May 10, 2017 Puma Biotechnology, Inc. (NASDAQ: PBYI), a biopharmaceutical company, reported financial results for the first quarter ended March 31, 2017 (Press release, Puma Biotechnology, MAY 10, 2017, View Source [SID1234519047]).

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Unless otherwise stated, all comparisons are for the first quarter 2017 compared to the first quarter 2016.

Based on accounting principles generally accepted in the United States (GAAP), Puma reported a net loss applicable to common stock of $72.9 million, or $1.97 per share, for the first quarter of 2017, compared to a net loss applicable to common stock of $71.0 million, or $2.19 per share, for the first quarter of 2016.

Non-GAAP adjusted net loss was $43.1 million, or $1.16 per share, for the first quarter of 2017, compared to non-GAAP adjusted net loss of $41.5 million, or $1.28 per share, for the first quarter of 2016. Non-GAAP adjusted net loss excludes stock-based compensation expense, which represents a significant portion of overall expense and has no impact on the cash position of the Company. For a reconciliation of GAAP net loss to non-GAAP adjusted net loss and GAAP net loss per share to non-GAAP adjusted net loss per share, please see the financial tables at the end of this news release.

Net cash used in operating activities for the first quarter of 2017 was $36.0 million. At March 31, 2017, Puma had cash and cash equivalents of $105.1 million and marketable securities of $88.9 million, compared to cash and cash equivalents of $194.5 million and marketable securities of $35.0 million at December 31, 2016.

"We made significant progress with our lead investigational drug, neratinib, during the first quarter of 2017," said Alan H. Auerbach, Chairman, Chief Executive Officer and President of Puma. "We look forward to continuing to work with the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA) as they review our New Drug Application (NDA) and Marketing Authorization Application (MAA) filings, respectively, and we look forward to presenting the data on neratinib at the upcoming FDA Oncologic Drugs Advisory Committee on May 24th.

"Data on neratinib was also presented at the 2017 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April which included data on the use of antidiarrheal prophylaxis to reduce the diarrhea with neratinib in the extended adjuvant treatment of patients with early stage HER2-overexpressed/amplified breast cancer who have received prior adjuvant trastuzumab-based therapy (CONTROL trial). There was also clinical data presented on neratinib in the treatment of patients who have solid tumors with activating HER2 or HER3 mutations (SUMMIT trial). Additional data was also presented on the combination of T-DM1 and neratinib in patients with HER2 positive metastatic breast cancer (MBC) that has previously been treated with pertuzumab and trastuzumab. We look forward to continuing to achieve our objectives and believe that Puma is very well-positioned to build value for our shareholders."

Mr. Auerbach added, "During 2017, we anticipate the following key milestones with neratinib: (i) reporting data from the Phase III trial in third-line HER2-positive MBC patients in the second quarter of 2017; (ii) reporting data in the second quarter of 2017 from the TBCRC-022 Phase II trial of neratinib plus capecitabine in HER2-positive MBC patients with brain metastases; (iii) reporting final 5-year disease free survival (DFS) data during the second quarter of 2017 from the ExteNET Phase III trial of neratinib as an extended adjuvant treatment in HER2-positive early stage breast cancer; and (iv) announcing regulatory decisions in the United States and European Union on neratinib for the extended adjuvant treatment of patients with HER2-positive early stage breast cancer in the third quarter of 2017."

Operating Expenses

Operating expenses were $73.2 million for the first quarter of 2017, compared to $71.2 million for the first quarter of 2016.

General and Administrative Expenses:

General and administrative expenses were $18.4 million for the first quarter of 2017, compared to $11.0 million for the first quarter of 2016. The approximately $7.4 million increase resulted primarily from increases of approximately $1.4 million for stock-based compensation, $3.9 million for professional fees, $1.3 million for payroll and related costs, and $0.5 million for facility and equipment costs. These increases reflect overall corporate growth.

Research and Development Expenses:

Research and development (R&D) expenses were $54.8 million for the first quarter of 2017, compared to $60.2 million for the first quarter of 2016. The approximately $5.4 million decrease resulted primarily from decreases of approximately $1.1 million for stock-based compensation and $5.0 million for clinical trial expenses, partially offset by an increase of $0.6 million for consultants and contractors. For our existing clinical trials, we expect R&D expenses to decrease in subsequent quarters as clinical trials wind down.

On May 10, 2017 Intrexon Corporation (NYSE: XON), a leader in the engineering and industrialization of biology to improve the quality of life and health of the planet, reported its first quarter financial results for 2017 (Press release, Intrexon, MAY 10, 2017, View Source [SID1234519041]).

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Business Highlights and Recent Developments:

Intrexon’s proprietary methanotroph bioconversion platform has achieved yields necessary for site selection on two molecules, isbobutyraldehyde and 2,3 butanediol (2,3 BDO), each of which represent a multi-billion dollar revenue opportunity for the Company. Yields for 2,3 BDO, a precursor to butadiene, increased by greater than 30% during the first quarter of 2017. This yield level produces a positive "in the money" gross margin based on current natural gas and product prices. While additional yield improvements and scaling milestones must be met, the current yields and business implications have led the Company to retain Moelis & Company to advise it on strategic and financial options with respect to its bioconversion platform and specific products;
Announced formation of Precigen, Inc., a wholly owned subsidiary of the Company, to accelerate strategic evaluation of structural alternatives for consolidation of Intrexon’s health-related assets to enhance shareholder value and maximize the potential of the Company’s programs in health;
Provided update on development of next-generation chimeric antigen receptor T cell (CAR-T) therapy for cancer in strategic collaboration with ZIOPHARM Oncology, Inc. (NASDAQ: ZIOP) and biopharmaceutical division of Merck KGaA, Darmstadt, Germany, announcing the approach for the previously chosen two targets will focus on use of the proprietary RheoSwitch Therapeutic System (RTS) platform to regulate expression of membrane-bound interleukin-15 (mbIL15) co-expressed with CARs and Sleeping Beauty non-viral gene integration;
Entered into a definitive agreement to acquire GenVec, Inc. (NASDAQ: GNVC) and announced plans to develop a next generation adenoviral (AdV) platform with significantly higher payload capacity compared to current systems by combining GenVec’s expertise in AdV vectors and cGMP drug product manufacturing with Intrexon’s proficiency in viral and non-viral gene transfer;
Signed a Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute (NCI) in collaboration with ZIOPHARM for the development of adoptive cell transfer-based immunotherapies using autologous peripheral blood lymphocytes genetically modified using the Sleeping Beauty system to express T-cell receptors for the treatment of solid tumors in patients with advanced cancers;
Collaborator ZIOPHARM announced U.S. Food and Drug Administration (FDA) acceptance of investigator-initiated Investigational New Drug (IND) application for a Phase 1 trial infusing the Company’s CD33-specific CAR+ T therapy, which incorporates a kill switch, for relapsed or refractory acute myeloid leukemia (AML), with the first patient to be enrolled in the study expected to begin treatment in the third quarter of 2017;
Collaborator ZIOPHARM reported successful end-of-phase 2 meeting with the FDA for Ad-RTS-hIL-12 + veledimex in recurrent glioblastoma and is assessing protocol design options for a pivotal Phase 3 trial in conjunction with its investigators and regulators;
Collaborator ZIOPHARM announced improved production times in its ongoing Phase I trial of 2nd generation Sleeping Beauty CD19+ CAR-T cells and progress toward its "Point-of-Care" approach. One patient with multiple-relapsed acute lymphoblastic leukemia achieved a complete response and a patient with triple-hit non-Hodgkin lymphoma was treated with T cells manufactured in 2 weeks;
Collaborator Fibrocell Science, Inc. (NASDAQ: FCSC) received fast track designation from the FDA for FCX-007 for treatment of recessive dystrophic epidermolysis bullosa (RDEB) and announced dosing of first patient in Phase I portion of Phase I/II clinical trial of FCX-007 gene therapy;
Exemplar Genetics, a wholly-owned subsidiary of Intrexon, was awarded a subcontract to create genetically engineered miniswine models of sickle cell disease as part of a national resource that could lead to new treatments for the disorder;
Oxitec, a wholly owned subsidiary of Intrexon, and the Municipality of Santiago de Cali, Colombia announced a memorandum of understanding to deploy Friendly Aedes in the Comuna 16 region, an area of over 104,000 residents, to control populations of the Aedes aegypti mosquito, the primary vector for dengue, chikungunya, Zika, and yellow fever;
In collaboration with Gangabishan Bhikulal Investment and Trading Limited, Oxitec initiated outdoor caged trials in India to demonstrate the efficacy of Oxitec’s Friendly mosquitoes;
Oxitec reported its Friendly Aedes achieved greater than 80% suppression of wild Aedes aegypti in CECAP/Eldorado in Piracicaba, Brazil, in the second year of the project, as well as 78% reduction in the São Judas neighborhood of Piracicaba only six months after initial releases;
AquaBounty Technologies, Inc. (NASDAQ: AQB; AIM: ABTU), majority-owned subsidiary of Intrexon, completed the listing of its common shares on the NASDAQ Stock Market and finalized an equity subscription from Intrexon. In conjunction with the listing, Intrexon distributed a special stock dividend of shares of AquaBounty common stock it owned to its shareholders while maintaining majority ownership of AquaBounty’s outstanding common stock;
Announced appointment of Andy Bass as Senior Vice President, Consumer Sector, which will henceforth do business as BioPop, to lead the design and commercialization of new biologically-based products and applications across the consumer market; and
Appointed leading pharma executive Vinita Gupta to Intrexon’s Board of Directors.
First Quarter Financial Highlights:

Total revenues of $53.7 million, an increase of 24% over the first quarter of 2016;
Net loss of $31.4 million attributable to Intrexon, or $(0.26) per basic share, including non-cash charges of $24.7 million;
Adjusted EBITDA of $(7.1) million, or $(0.06) per basic share;
The net change in deferred revenue related to upfront and milestone payments, which represents the cash and stock received from collaborators less the amount of revenue recognized during the period, was a decrease of $10.2 million compared to a net increase of $13.5 million in the first quarter of 2016;
Cash consideration received for reimbursement of research and development services covered 54% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries);
Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 64% of consolidated cash operating expenses; and
Cash, cash equivalents, and short-term investments totaled $205.2 million, the value of investments in preferred stock totaled $134.7 million, and the value of equity securities totaled $21.5 million at March 31, 2017.
"Considering the company’s progress in the first quarter and year to date," commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon, "I am gratified by the vision that underlies this company, by the business plan that has made it possible to do so much relative to such a modest expenditure of our shareholder’s cash, by the confidence of our shareholders, our board and our team in that plan’s ultimate feasibility and by the patience of all while our brilliant team would mature the company’s technical assets and human capital into realizations that will make a great difference in the world."

Mr. Kirk concluded, "We believe that we quite clearly have before us a number of significant realizations – in health, in energy, in food, in environment and in consumer industries – and we are fully engaged upon them."

First Quarter 2017 Financial Results Compared to Prior Year Period

Total revenues increased $10.3 million, or 24%, over the quarter ended March 31, 2016. Collaboration and licensing revenues increased $9.0 million from the quarter ended March 31, 2016 due to (i) the recognition of deferred revenue for upfront payments received from collaborations signed by the Company between April 1, 2016 and March 31, 2017 and the recognition of the payment received in June 2016 from ZIOPHARM to amend the collaborations between us; and (ii) increased research and development services for these collaborations and for the progression of programs or the addition of new programs with previously existing collaborators. Product revenues decreased $0.4 million, or 5% primarily due to a decrease in the quantities of pregnant cows sold due to lower customer demand for these products. Gross margin on products was consistent period over period. Service revenues increased $1.4 million, or 13%, due to an increase in the number of bovine in vitro fertilization cycles performed due to higher customer demand. Gross margin on services decreased slightly in the current period primarily due to an increase in royalties and commissions due to vendors.

Research and development expenses increased $8.3 million, or 32%, due primarily to increases in (i) salaries, benefits and other personnel costs for research and development employees, (ii) lab supplies and consulting expenses, and (iii) depreciation and amortization. Salaries, benefits and other personnel costs increased $2.6 million due to an increase in research and development headcount to support new and expanded collaborations. Lab supplies and consulting expenses increased $3.4 million as a result of (i) the progression of certain programs into the preclinical and clinical phases with certain of Intrexon’s collaborators, and (ii) the increased level of research and development services provided to Intrexon’s collaborators. Depreciation and amortization increased $1.3 million primarily as a result of amortization of developed technology acquired from Oxitec Limited which began in November 2016 upon the completion of certain operational and regulatory events. Selling, general and administrative (SG&A) expenses decreased $7.7 million, or 18%. Salaries, benefits and other personnel costs decreased $4.9 million primarily due to the reversal of previously recognized stock-based compensation expense for stock options granted to a former employee. In 2016, the Company recorded $4.2 million in litigation expenses arising from the entrance of a court order in the Company’s trial with XY, LLC. These SG&A decreases were offset by an increase of $2.1 million of legal and professional fees due to (i) expenses incurred to support domestic and international government affairs for regulatory and other approvals necessary to commercialize the Company’s products and services; and (ii) increased legal fees to defend ongoing litigation.

Total other income (expense), net, increased $24.8 million, or 116%, from the quarter ended March 31, 2016. This increase was primarily attributable to (i) a decline in unrealized depreciation in the Company’s equity securities portfolio of $20.3 million, and (ii) dividend income of $3.9 million from the Company’s investments in preferred stock.