On August 2, 2018, Neptune Generics, LLC reported that it has submitted a petition for Inter Partes Review (IPR) at the U.S. Patent Trial and Appeal Board (PTAB) of U.S. Patent No. 8,921,348 (‘348) which is related to Corcept’s Korlym product (Filing, 8-K, Corcept Therapeutics, AUG 2, 2018, View Source [SID1234528820]).

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Neptune Generics, LLC does not have regulatory approval to sell any drug in the United States. It is backed by the litigation finance firm, Burford Capital Ltd., a U.K.-based company. The PTAB has not accorded a filing date to this petition.

On August 2, 2018 Insmed Incorporated (Nasdaq:INSM), a global biopharmaceutical company focused on the unmet needs of patients with rare diseases, reported financial results for the second quarter ended June 30, 2018 and provided a business update (Press release, Insmed, AUG 2, 2018, View Source [SID1234528759]).

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"We are approaching a key inflection point for the business as we prepare for the potential approval and launch of our first commercial product, ALIS, which we studied in adult patients with nontuberculous mycobacterial (NTM) lung disease caused by Mycobacterium avium complex (MAC)," commented Will Lewis, President and Chief Executive Officer of Insmed. "We look forward to the U.S. Food and Drug Administration (FDA) Advisory Committee meeting next week to discuss our New Drug Application for ALIS and the significant unmet need in this orphan disease, for which there are currently no approved inhaled therapies in the U.S. Our commercial team is executing our strategy in an effort to support a potential U.S. launch early in the fourth quarter of this year, and we continue to lay the groundwork for long-term growth, with efforts ongoing to support regulatory submissions in Japan and Europe and plans for additional studies to support life cycle management for ALIS."

Recent Corporate Developments

New Drug Application (NDA) Accepted for Priority Review with PDUFA Action Date of September 28, 2018; FDA Advisory Committee Set for August 7, 2018

In May, Insmed reported that the FDA granted Insmed’s request for Priority Review of its NDA for ALIS for adult patients with NTM lung disease caused by MAC and set a PDUFA action date of September 28, 2018. The Division of Antimicrobial Products of the FDA has scheduled an advisory committee meeting to review data supporting the NDA on August 7, 2018. The FDA previously designated ALIS an orphan drug, a breakthrough therapy, and a Qualified Infectious Disease Product (QIDP) under the Generating Antibiotic Incentives Now (GAIN) Act.

ALIS Data Presented at the American Thoracic Society (ATS) 2018 International Conference

In late May, Insmed presented detailed data from its ongoing Phase 3 CONVERT study of ALIS in adult patients with treatment refractory NTM lung disease caused by MAC at the ATS 2018 International Conference. The global CONVERT study met its primary endpoint of culture conversion by Month 6 with statistical significance (p <0.0001). In the study, the addition of ALIS to guideline-based therapy (GBT) eliminated evidence of NTM lung disease caused by MAC in sputum by Month 6 in 29% of patients, compared to 9% of patients on GBT alone.

Strengthening Expertise in Japan

In mid-May, Insmed also appointed Leo Lee to its Board of Directors. Mr. Lee has deep global commercial leadership experience, with more than 21 years of his career in the pharmaceutical industry spent in Japan, most recently at Merck KGaA, a global pharmaceutical company, where he served as President, Japan. Prior to his role at Merck KGaA, Mr. Lee served as President, Japan of Allergan plc, a global pharmaceutical company, from 2011 to 2015.

During the second quarter, Insmed hired Yuji Orihara to the position of General Manager, Insmed Asia Pacific, to advance our efforts toward potential commercialization of ALIS in Japan. Mr. Orihara joins Insmed from Gilead Sciences, Inc., where he was most recently the President of Gilead Sciences, Japan.

Second Quarter Financial Results

For the second quarter of 2018, Insmed reported a net loss of $76.4 million, or $1.00 per share, compared with a net loss of $44.7 million, or $0.72 per share, for the second quarter of 2017.

Research and development expenses were $35.7 million for the second quarter of 2018, compared with $26.9 million for the second quarter of 2017. The increase as compared to the second quarter of 2017 was primarily due to an increase in external manufacturing expenses for ALIS production-related activities and higher compensation and related expenses due to an increase in headcount.

General and administrative expenses for the second quarter of 2018 were $37.2 million, compared with $16.6 million for the second quarter of 2017. The increase was primarily due to higher compensation and related expenses due to an increase in headcount, including the hiring of our field force, and higher consulting expenses related to our pre-commercial planning activities for ALIS.

Balance Sheet and Cash Guidance

As of June 30, 2018, Insmed had cash and cash equivalents of $634.3 million. The Company’s operating expenses for the second quarter of 2018 were $72.9 million. The cash-based operating expenses for the second quarter of 2018 were $65.3 million.

The Company is investing in the following key activities in 2018: (i) the build-out of the commercial organization to support global expansion activities for ALIS; (ii) manufacturing of commercial inventory and build-out of an additional third-party manufacturing facility; and (iii) clinical activities for ALIS and the Phase 2 development program for INS1007, along with advancement of other pipeline programs. As a result of these activities, Insmed expects cash-based operating expenses and capital and other cash investments to be in the range of $150 million to $170 million for the second half of 2018.

Conference Call

Insmed will host a conference call beginning today at 8:30 AM Eastern Time. Shareholders and other interested parties may participate in the conference call by dialing (844) 707-0669 (domestic) or (703) 639-1223 (international) and referencing conference ID number 5199733. The call will also be webcast live on the Company’s website at www.insmed.com.

A replay of the conference call will be accessible approximately two hours after its completion through August 9, 2018 by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and referencing conference ID number 5199733. A webcast of the call will also be archived for 90 days under the Investor Relations section of the Company’s website at www.insmed.com.

Non-GAAP Financial Measures

In addition to the United States generally accepted accounting principles (GAAP) results, this earnings release includes cash-based operating expenses, a non-GAAP financial measure, which Insmed defines as total operating expenses excluding stock-based compensation expense and depreciation expense. A reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure is presented in the table attached to this press release.

Management believes that this non-GAAP financial measure is useful to both management and investors in analyzing our ongoing business and operating performance. Management believes that providing non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view our financial results in the way that management views financial results. Management does not intend the presentation of this non-GAAP financial measure to be considered in isolation or as a substitute for results prepared in accordance with GAAP. In addition, this non-GAAP financial measure may differ from similarly named measures used by other companies.

About NTM Lung Disease

NTM lung disease is a rare and serious disorder associated with increased rates of morbidity and mortality. There is an increasing prevalence of lung disease caused by NTM, and Insmed believes it is an emerging public health concern worldwide. Patients with NTM lung disease may experience a multitude of symptoms such as fever, weight loss, cough, lack of appetite, night sweats, blood in the sputum, and fatigue. Patients with NTM lung disease frequently require lengthy hospital stays to manage their condition. Insmed is not aware of any approved inhaled therapies specifically indicated for refractory NTM lung disease caused by MAC in North America, Japan or Europe. Current guideline-based approaches involve use of multi-drug regimens not approved for the treatment of NTM lung disease, and treatment can be as long as two years or more.

The prevalence of human disease attributable to NTM has increased over the past two decades. In a decade long study (1997 to 2007), researchers found that the prevalence of NTM lung disease in the U.S. was increasing at approximately 8% per year and that NTM patients on Medicare over the age of 65 were 40% more likely to die over the period of the study than those

who did not have the disease. In the U.S., Insmed estimates there will be between 75,000 and 105,000 patients with diagnosed NTM lung disease in 2018, of which the Company expects 40,000 to 50,000 will be treated for NTM lung disease caused by MAC. Insmed expects that between 10,000 and 15,000 of these patients will be refractory to treatment. In Japan, Insmed estimates there will be between 125,000 and 145,000 patients with diagnosed NTM lung disease in 2018, with approximately 60,000 to 70,000 of those patients being treated for NTM lung disease caused by MAC and 15,000 to 18,000 of these treated patients being refractory to treatment. Insmed also estimates there will be approximately 14,000 patients with diagnosed NTM lung disease in the EU5 (comprised of France, Germany, Italy, Spain and the United Kingdom) in 2018, of which the Company estimates approximately 4,400 will be treated for NTM lung disease caused by MAC and approximately 1,400 of these treated patients will be refractory to treatment.

About ALIS

ALIS is a novel, inhaled, once-daily formulation of amikacin that is in late-stage clinical development for adult patients with treatment-refractory NTM lung disease caused by MAC. Amikacin solution for parenteral administration is an established drug that has activity against a variety of NTM; however, its use is limited by the need to administer it intravenously and by toxicity to hearing, balance, and kidney function. Insmed’s advanced pulmonary liposome technology uses charge neutral liposomes to deliver amikacin directly to the lung where it is taken up by the lung macrophages where the NTM infection resides. This prolongs the release of amikacin in the lungs while minimizing systemic exposure thereby offering the potential for decreased systemic toxicities. ALIS’s ability to deliver high levels of amikacin directly to the lung distinguishes it from intravenous amikacin. ALIS is administered once daily using an optimized, investigational eFlow Nebulizer System manufactured by PARI Pharma GmbH (PARI), a portable aerosol delivery system.

About CONVERT (INS-212) and INS-312

CONVERT is a randomized, open-label, global Phase 3 trial designed to confirm the culture conversion results seen in Insmed’s Phase 2 clinical trial of ALIS in patients with refractory NTM lung disease caused by MAC. CONVERT is being conducted in 18 countries at more than 125 sites. The primary efficacy endpoint is the proportion of patients who achieved culture conversion at Month 6 in the ALIS plus GBT arm compared to the GBT-only arm. Patients who achieved culture conversion by Month 6 are continuing in the CONVERT study for an additional 12 months of treatment following the first monthly negative sputum culture. Patients who did not culture convert may have been eligible to enroll in our INS-312 study. INS-312 is a single-arm open-label extension study for patients who completed six months of treatment in the INS-212 study, but did not demonstrate culture conversion by Month 6. Under the study protocol, non-converting patients in the ALIS plus GBT arm of the INS-212 study will receive an additional 12 months of ALIS plus GBT. Patients who crossed over from the GBT-only arm of the INS-212 study will receive 12 months of treatment of ALIS plus GBT.

On August 2, 2018 argenx (Euronext & Nasdaq: ARGX), a clinical-stage biotechnology company developing a deep pipeline of differentiated antibody-based therapies for the treatment of severe autoimmune diseases and cancer, reported its second quarter business update and half-year financial results for 2018 (Press release, argenx, AUG 2, 2018, View Source [SID1234528750]).

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These half-year results and this business update will be discussed during a conference call and webcast presentation today at 3 p.m. CEST/ 9 a.m. EDT. To participate in the conference call, please select your phone number below, and use the confirmation code 7669735. The webcast may be accessed on the homepage of the argenx website at www.argenx.com or by clicking here.

"We made significant progress recently in building a pipeline-in-a-product opportunity around our lead candidate efgartigimod (ARGX-113) as we study its potential to treat a range of severe autoimmune diseases, including validation of its mechanism of action across two indications based on the proof-of-concept data from the Phase 2 clinical trial in generalized myasthenia gravis (gMG) and the early evidence of disease control from the first cohort of patients in our Phase 2 pemphigus vulgaris (PV) clinical trial. These results strengthen our conviction that reducing pathogenic autoantibodies may offer an innovative approach to treating gMG and PV and could give rise to potential therapeutic benefits in other conditions that are similarly mediated. We look forward to a productive second half of 2018 around efgartigimod with topline data from the Phase 2 immune thrombocytopenia clinical trial expected before the end of the third quarter and the launch of a Phase 3 clinical trial in gMG before the end of the year," commented Tim Van Hauwermeiren, CEO of argenx.

"We are also advancing a deep pipeline of differentiated antibodies beyond efgartigimod. We continue to enroll the Phase 2 clinical trial of ARGX-110 in acute myeloid leukemia (AML) and expect to report full data from the Phase 1 dose-escalation clinical trial in December around the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting. We achieved key milestones in our collaborations with AbbVie and Leo Pharma this quarter and have continued to showcase our ability to grow our pipeline through our productive Innovative Access Program."

SECOND QUARTER 2018 AND RECENT BUSINESS HIGHLIGHTS

Efgartigimod Program

Full Phase 2 Myasthenia Gravis Data: Presented complete data from Phase 2 clinical trial of efgartigimod in gMG at the American Academy of Neurology (AAN) Annual Meeting.

Data showed clinical improvement of efgartigimod over placebo through entire 10-week duration of the trial.

Clinical benefit in the treatment group maximized as of one week after administration of last dose, achieving statistical significance over the placebo group on the Myasthenia Gravis Activity-of-Daily-Living (MG-ADL) score.

All patients in the treatment arm showed reduction of total IgG levels, and clinically meaningful disease improvement was found to correlate with a reduction in pathogenic IgG levels.

Efgartigimod was well-tolerated in all patients, with most adverse events (AEs) characterized as mild and deemed unrelated to the study drug. No serious or severe AEs were reported.

End-of-Phase 2 Meeting with FDA: Received feedback from the U.S. Food and Drug Administration (FDA) during the end-of-Phase 2 meeting on the framework of our Phase 3 program for efgartigimod in gMG.

Global Phase 3 clinical trial expected to evaluate the efficacy of a 10 mg/kg intravenous (IV) dose of efgartigimod in approximately 150 gMG patients over a 26-week period.

argenx expects to enroll in the trial both AChR autoantibody positive patients and AChR autoantibody negative patients whose disease is driven by MuSK and LRP4 autoantibodies, among others.

Patients in the Phase 3 clinical trial would be able to roll over into an open-label extension study for a period of one year.

Interim Data from First Cohort in Phase 2 PV Trial: Reported interim data from the first cohort of our Phase 2 proof-of-concept clinical trial of efgartigimod for the treatment of PV.

Rapid disease control observed in four of the six mild-to-moderate PV patients treated, and efgartigimod was well-tolerated in all treated PV patients.

Strong pharmacodynamic effect correlated with an improvement in Pemphigus Disease Area Index (PDAI) score, characterized by the start of healing of existing lesions and absence of formation of new lesions.

Independent Data Monitoring Committee recommended advancing to cohort 2 with an increased dosing frequency and dosing duration during the maintenance phase.

Phase 1 Data using Subcutaneous Formulation: Announced data from the Phase 1 study of the subcutaneous (SC) formulation of efgartigimod, demonstrating comparable characteristics to the IV formulation, including half-life, pharmacodynamics and tolerability.

Data showed that repeat exposure to SC efgartigimod can maintain IgG suppression at a steady state, with the possibility to dose up or down based on patient needs.

argenx intends to explore various dosing schedules with the SC formulation to best address patient needs, including an IV loading dose followed by SC maintenance as one possible schedule.

ARGX-110 Program

Ongoing Enrollment in Phase 2 Trial of ARGX-110 in AML: argenx expects to enroll an initial 21 patients in the ongoing Phase 2 part of the Phase 1/2 proof-of-concept trial of ARGX-110 in combination with standard of care azacytidine in newly diagnosed, elderly AML and high-risk myelodysplastic syndromes patients who are unfit for chemotherapy. The Company expects to use the selected ARGX-110 dose of 10 mg/kg as determined from the dose-escalation part of the trial.

Corporate Updates

Received second preclinical milestone payment under the development agreement with AbbVie for ARGX-115 targeting novel immune checkpoints in oncology.

Received third preclinical milestone payment from collaboration with LEO Pharma following approval of our clinical trial application (CTA) filing for ARGX-112 to treat inflammatory skin disorders.

Received a milestone payment from the strategic collaboration with Shire triggered by Shire exercising its exclusive option to in-license an antibody discovered and developed using the Company’s proprietary SIMPLE Antibody platform and Fc engineering technologies.

Appointed R. Keith Woods as Chief Operating Officer.

Selected for BEL 20 Index representing the 20 largest companies traded on Euronext Brussels, subject to meeting Euronext Index Family criteria and review.

UPCOMING MILESTONES

Advance efgartigimod into Phase 3 clinical development in gMG before the end of 2018.

Report topline data from the Phase 2 proof-of-concept trial for efgartigimod in immune thrombocytopenia (ITP) before the end of the third quarter of 2018 and present the full dataset at a workshop around the ASH (Free ASH Whitepaper) Annual Meeting.

Report full data from the Phase 2 trial of efgartigimod in PV in the first half of 2019.

Report full data of the dose-escalation phase of the AML Phase 1/2 clinical trial and the cutaneous T-cell lymphoma Phase 2 clinical trial of ARGX-110 around the ASH (Free ASH Whitepaper) Annual Meeting.

DETAILS OF THE FINANCIAL RESULTS

•Total operating income was €20.5 million for the six months ended June 30, 2018, compared to €23.9 million for the six months ended June 30, 2017. The decrease in operating income in 2018 was primarily due to a decrease of €4.5 million in revenue primarily from the completion of the preclinical activities under our ongoing collaboration with LEO Pharma. The decrease was offset by an increase in other operating income of €1.2 million, mainly driven by an increase in payroll tax rebates for employing certain research and development personnel.

•Research and development expenses were €34.4 million for the six months ended June 30, 2018, compared to €25.6 million for the six months ended June 30, 2017. The increase in research and development expenses in 2018 was principally due to (i) an increase of €4.4 million in share-based compensation expense linked to the grant of stock options to our research and development employees (including an increase of €1.3 million in social security costs on stock options granted to certain Belgian and non-Belgian resident employees), (ii) an increase of €4.0 million in costs related to the advancement of the clinical development and manufacturing activities of ARGX-113 and ARGX-110 and (iii) costs associated with a planned increase in research and development headcount.

• Selling, general and administrative expenses were €11.5 million for the six months ended June 30, 2018, compared to €5.0 million for the six months ended June 30, 2017. The increase of €6.5 million in selling, general and administrative expenses in 2018 is mainly explained by an increase of €6.1 million of personnel expenses resulting from (i) an increase of €4.9 million in share-based compensation expense linked to the grant of stock options to our selling, general and administrative employees (including an increase of €1.1 million in social security costs on stock options granted to certain Belgian and non-Belgian resident employees) and (ii) the recruitment of additional employees (notably in our US office) to further strengthen our selling, general and administrative activities.

• Financial income and exchange gains amounted to €5.3 million for the six months ended June 30, 2018 compared to financial income and exchange losses of €0.8 million for the six months ended June 30, 2017, which was primarily attributable to unrealized exchange rate gains on our cash, cash equivalents and current financial assets position in USD linked to the favorable fluctuation of the USD exchange rate in the six months ended June 30, 2018.

• The Group generated a loss for the period and total comprehensive loss of €20.1 million for the six months ended June 30, 2018, compared to a loss for the period and total comprehensive loss of €8.2 million for the six months ended June 30, 2017.

• As at June 30, 2018, the Group’s cash, cash equivalents and current financial assets amounted to €338.9 million, compared to €359.8 million as at December 31, 2017.

EXPECTED 2018 FINANCIAL CALENDAR:

October 25, 2018: Third quarter 2018 business update and financial results.

On August 2, 2018 AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) reported unaudited consolidated financial results for the quarter ended June 30, 2018 (Press release, AMAG Pharmaceuticals, AUG 2, 2018, View Source [SID1234528748]). The company announced the sale of Cord Blood Registry (CBR) in June 2018, which is currently expected to close in mid-August 2018. As a result of the pending sale, CBR is being classified as discontinued operations for accounting purposes and is presented separately on AMAG’s GAAP consolidated statements of operations and consolidated balance sheets for all periods presented. The company has revised its full year 2018 financial guidance to reflect continued strong performance of its pharmaceutical products and the impact of the pending sale of CBR.

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Total GAAP revenue from continuing operations (excluding CBR) increased in the second quarter of 2018 to $146.3 million, 12% higher than the same period last year. The year-over-year increase was driven by increased sales of Feraheme (ferumoxytol injection) and Makena (hydroxyprogesterone caproate injection), as well as the commercial launch of Intrarosa (prasterone) in the third quarter of 2017. The company reported operating income from continuing operations of $41.9 million in the second quarter of 2018, compared with operating income of $3.3 million in the same period last year. Non-GAAP adjusted EBITDA (excluding CBR) totaled $60.6 million in the second quarter of 2018, compared with $41.4 million in the second quarter of 2017.1

"We have had an extraordinary first half of 2018, with the achievement of a number of important regulatory milestones and strong commercial success across the portfolio," said Bill Heiden, AMAG’s president and chief executive officer. "In the second quarter, our commercial teams generated record setting sales performance for each of our products and these strong results, combined with confidence in our prospects for the second half of 2018, allow us to again raise both annual revenue and adjusted EBITDA guidance for our pharmaceutical business. The divestiture of CBR is another important step in our plan to align the company’s balance sheet with our strategic growth plan, which focuses on the development and commercialization of innovative pharmaceuticals."

Second Quarter 2018 and Recent Business Highlights:

Achieved record quarterly sales

Makena revenues exceeded $105 million in the quarter, reaching an all-time high market share of 51%

Feraheme sales grew 37% over the prior year, generating revenues of $37.7 million in the quarter

1 See summaries of GAAP to non-GAAP adjustments at the conclusion of this press release.

Grew Intrarosa ex-factory shipments by 40% over the first quarter of 2018 and generated $3.2 million of net revenue in the second quarter of 2018, which continued to be impacted by high gross to net adjustments

Announced sale of CBR for $530 million in cash, the net proceeds of which the company expects to use to pay off $475 million of its high yield debt

Received FDA acceptance of the company’s new drug application for bremelanotide, with a PDUFA date of March 23, 2019

Continued strong conversion of Makena intramuscular product to the subcutaneous (SC) auto-injector

Approximately 60% of new enrollments through the Makena Care Connection through the end of the second quarter were for the SC auto-injector

Authorized AMAG’s partner, Prasco, to launch an authorized generic of the Makena single- and multi-dose intramuscular formulations

Increased Intrarosa market share to 3.8%, with approximately 93,000 total prescriptions written by more than 9,100 healthcare providers since the July 2017 launch

CMS clarified its position on reimbursement, which now allows for reimbursement coverage for Intrarosa; AMAG has initiated discussions with payers for Medicare Part D coverage

Began the first phase of the unbranded and branded Intrarosa digital consumer campaigns

Continued the launch of Feraheme with the broad iron deficiency anemia label, which is already capturing additional market share
–
Achieved market share of 16.3% for the second quarter of 2018, compared with 11.2% for the first quarter of 2018

Ended the quarter with more than $410 million2 of cash and investments, an increase of more than $40 million from the first quarter of 2018

Second Quarter Ended June 30, 2018 (unaudited)
Financial Results from Continuing Operations (GAAP Basis)
As a result of the pending sale of CBR, which is expected to close in mid-August, AMAG’s CBR business has been excluded from its continuing operations for all periods presented and is shown separately as discontinued operations.

Total revenues from continuing operations for the second quarter of 2018 increased 12% to $146.3 million, compared with $130.4 million in the second quarter of 2017. Sales of Feraheme and MuGard increased 37% to $37.8 million in the second quarter of 2018, compared with $27.7 million in the second quarter of 2017.

Net product sales of Makena increased 2% to $105.2 million in the second quarter of 2018, compared with $102.7 million in the same period last year. Intrarosa, which was commercially launched in July 2017, contributed $3.2 million in net sales during the second quarter of 2018.

Costs and expenses from continuing operations, including cost of product sales, totaled $104.4 million in the second quarter of 2018, compared with $127.1 million for the same period in 2017. Included in selling, general and administrative (SG&A) expenses was an expense reversal of $49.8 million, which was recorded to remove the Makena contingent consideration liability because the company no longer believes that it is probable that the sales milestone will be achieved. Excluding this accounting adjustment, total costs and expenses from continuing operations increased by $27.1 million to $154.2 million. Cost of product sales increased by $44.7 million, of which $36.4 million was an increase in amortization expense primarily related to the Makena intramuscular intangible asset. Research and development costs decreased by $18.6 million during the period. Acquired IPR&D expense in 2017 consisted of $5.8 million in connection with consideration paid under the company’s agreement with Endoceutics for the rights to Intrarosa.

2 Includes $60 million of cash and investments held in a CBR account, which is currently recorded as an asset held for sale. These cash and investments will be returned to AMAG upon closing of the transaction.

Operating income from continuing operations in the second quarter of 2018 was $41.9 million, compared with of $3.3 million for the same period last year. The company reported a net loss from continuing operations of $25.8 million, or $0.75 loss per basic and diluted share, for the second quarter of 2018, compared with a net loss of $14.3 million, or $0.41 loss per basic and diluted share, for the same period in 2017. The primary driver of the second quarter 2018 net loss from continuing operations was the $52 million expense incurred to increase the company’s valuation allowance on its deferred tax assets.

Financial Results from Continuing Operations (Non-GAAP Basis)1
Total costs and expenses from continuing operations on a non-GAAP basis totaled $85.7 million in the second quarter of 2018, compared with $89.0 million in the second quarter of 2017. This decrease was primarily due to lower research and development costs in 2018, partially offset by higher cost of product sales and higher SG&A expenses related to investments to support the launches of the broad Feraheme label, Makena SC auto-injector and Intrarosa.

Non-GAAP adjusted EBITDA (excluding CBR) for the second quarter of 2018 was $60.6 million, compared with $41.4 million in the second quarter of 2017.

Net Income from Discontinued Operations
As a result of the pending sale, CBR is being classified as discontinued operations for accounting purposes. Net income from discontinued operations in the second quarter of 2018 was $5.7 million compared with $0.2 million for the same period in 2017.

Balance Sheet Highlights
As of June 30, 2018, the company’s cash and investments totaled $410 million2 and total debt (principal amount outstanding) was $816.4 million.

"Continued execution across the business gives us confidence to increase our financial guidance for 2018," said Ted Myles, AMAG’s chief financial officer. "The sale of CBR will allow us to eliminate the senior notes from our capital structure and strengthen our balance sheet as we continue to generate adjusted EBITDA. Our long-term strategy focuses on continuing to grow and further diversify our pharmaceutical portfolio. Our liquidity profile gives us considerable flexibility to invest in and grow our current products and to pursue new business development opportunities."

Conference Call and Webcast Access
AMAG Pharmaceuticals, Inc. will host a conference call and webcast today at 8:00 a.m. ET to discuss the company’s second quarter 2018 financial results, recent business highlights and 2018 outlook.

Dial-in Number
U.S./Canada dial-in number: (877) 412-6083

International dial-in number: (702) 495-1202
Conference ID: 2757556

Replay dial-in number: (855) 859-2056
Replay International dial-in number: (404) 537-3406
Conference ID: 2757556

A telephone replay will be available from approximately 11:00 a.m. ET on August 2, 2018 through midnight on August 9, 2018.

The webcast with slides will be accessible through the Investors section of AMAG’s website at www.amagpharma.com. A replay of the webcast will be archived on the website for 30 days.

Use of Non-GAAP Financial Measures
AMAG has presented certain non-GAAP financial measures, including non-GAAP costs and expenses and non-GAAP adjusted EBITDA (earnings before income taxes, depreciation and amortization). These non-GAAP financial measures exclude certain amounts, expenses or income, from the corresponding financial measures determined in accordance with accounting principles generally accepted in the U.S. (GAAP). Management believes this non-GAAP information is useful for investors, taken in conjunction with AMAG’s GAAP financial statements, because it provides greater transparency regarding AMAG’s operating performance. Management uses these measures, among other factors, to assess and analyze operational results and trends and to make financial and operational decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of AMAG’s operating results as reported under GAAP, not as a substitute for GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. Reconciliations between these non-GAAP financial measures and the most comparable GAAP financial measures are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.

On August 2, 2018, the Company entered into a Third Amendment to Lease Agreement (the "Amendment") with ARE-SD Region No. 20 (the "Landlord") to amend the Lease Agreement, dated June 24, 2014, the First Amendment to Lease dated March 23, 2017, and the Second Amendment to Lease dated April 5, 2018 (the "Amended Lease") between the Company and Landlord (Filing, 8-K, Mirati, AUG 2, 2018, View Source [SID1234528662]). The Amendment expands the size of the existing premises by adding approximately 6,100 square feet of space for an additional base rent of $4,000 per month through January 31, 2020. In addition, our share of operating expenses of the building in which the premises are located, has increased from approximately 43% to 58%. All other material terms and covenants from the Amended Lease remain unchanged.

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