On November 8, 2018 BioLineRx Ltd. (NASDAQ: BLRX) (TASE: BLRX), a clinical-stage biopharmaceutical company focused on oncology and immunology, reported its financial results for the third quarter ended September 30, 2018 and provided a corporate update (Press release, BioLineRx, NOV 8, 2018, View Source;p=irol-newsArticle&ID=2376172 [SID1234530927]).

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Highlights and achievements during the third quarter 2018 and subsequent period:

Reported positive results from lead-in period of Phase 3 GENESIS trial in stem-cell mobilization; data from first lead-in patient cohort prompted Data Monitoring Committee to recommend early continuation to randomized placebo-controlled part 2 of trial;
Presented data from ongoing Phase 2a COMBAT/KEYNOTE-202 pancreatic cancer study in collaboration with Merck at the ESMO (Free ESMO Whitepaper) 2018 Congress demonstrating that BL-8040 in combination with KEYTRUDA (pembrolizumab) showed encouraging disease control and overall survival in patients with metastatic pancreatic cancer; compelling pharmacodynamic data also demonstrated T-cell infiltration into tumors and a reduction of the tumor immuno-suppressive microenvironment;
Based on COMBAT/KEYNOTE-202 results, announced expansion of immuno-oncology collaboration with Merck to include a triple combination arm investigating the safety, tolerability and efficacy of BL-8040, KEYTRUDA and chemotherapy;
Entered into agreement with Biokine Therapeutics to increase the Company’s economic stake in BL-8040 to 80% from the previous level of 60%;
Initiated Phase 1/2a multicenter, open-label clinical study in the UK and Israel for AGI-134, a novel immunotherapy evoking a direct anti-tumor response and vaccine effect for the treatment of solid tumors;
"We made significant progress during the third quarter and subsequent period advancing clinical development of both of our oncology programs – BL-8040 and AGI-134," said Philip Serlin, Chief Executive Officer of BioLineRx. "The Phase 3 GENESIS study in stem-cell mobilization is now advancing in the randomized placebo-controlled part 2 of the trial. We are also rapidly moving forward in our expanded collaboration with Merck in pancreatic cancer, on the basis of the encouraging results recently presented at ESMO (Free ESMO Whitepaper), with an additional cohort adding chemotherapy to the BL-8040/KEYTRUDA combination. Further, we are very pleased to have initiated the first-in-human clinical study for AGI-134, our unique immunotherapy cancer vaccine. These achievements follow BL-8040’s very promising results in relapsed/refractory AML that were presented at the recent EHA (Free EHA Whitepaper) Congress during the second quarter, showing significantly improved overall survival compared to historical data."

"BL-8040 is currently being evaluated in eight Phase 2 or Phase 3 clinical trials in multiple oncology indications, four of which are being run under collaborations with global pharma companies. In addition, based on the very promising data seen in relapsed/refractory AML, we intend to further pursue this indication and we continue to evaluate the optimal clinical development pathway going forward. The broad dataset from BL-8040’s robust clinical development program was the motivation behind our recent decision to significantly increase our economics in BL-8040, and sets the stage for a catalyst-rich 2019," Mr. Serlin concluded.

Expected significant milestones through end of 2019:

Initiation of Phase 2 triple combo pancreatic cancer trial of BL-8040, KEYTRUDA and chemotherapy under collaboration with Merck by the end of 2018;
Potential interim results from Phase 2 AML consolidation study in mid-2019;
Initial safety results from part 1 of Phase 1/2a trial for AGI-134 in second half of 2019;
Top-line results from the Phase 2 triple combo pancreatic cancer trial of BL-8040, KEYTRUDA and chemotherapy under collaboration with Merck toward the end of 2019;
Top-line results from one or more of the solid tumor trials under collaboration with Genentech during 2019.
Financial Results for the Third Quarter Ended September 30, 2018

Research and development expenses for the three months ended September 30, 2018 were $5.0 million, a decrease of $0.6 million, or 11.1 %, compared to $5.6 million for the three months ended September 30, 2017. The decrease resulted primarily from higher expenses associated with drug product development and manufacturing for AGI-134 in the 2017 period. Research and development expenses for the nine months ended September 30, 2018 were $14.6 million, an increase of $1.3 million, or 9.6 %, compared to $13.3 million for the nine months ended September 30, 2017. The increase in the 2018 period resulted primarily from higher expenses associated with BL-8040, including the GENESIS and COMBAT trials; preparations for initiation of the AGI-134 clinical trial; and BL-1230.

Sales and marketing expenses for the three months ended September 30, 2018 were $0.3 million, similar to the comparable period in 2017. Sales and marketing expenses for the nine months ended September 30, 2018 were $1.1 million, a decrease of $0.1 million, or 6.7%, compared to $1.2 million for the nine months ended September 30, 2017. The decrease resulted primarily from one-time legal fees related to AGI-134 paid in the 2017 period.

General and administrative expenses for the three months ended September 30, 2018 were $0.9 million, a decrease of $0.3 million, or 22.7%, compared to $1.2 million for the three months ended September 30, 2017. The decrease resulted from a decrease in fees paid for consulting services. General and administrative expenses for the nine months ended September 30, 2018 were $2.9 million, a decrease of $0.2 million, or 5.9%, compared to $3.0 million for the nine months ended September 30, 2017. The decrease also resulted from a decrease in fees paid for consulting services.

The Company’s operating loss for the three months ended September 30, 2018 amounted to $6.2 million, compared with an operating loss of $7.1 million for the corresponding 2017 period. The Company’s operating loss for the nine months ended September 30, 2018 amounted to $18.6 million, compared with an operating loss of $17.6 million for the corresponding 2017 period.

Non-operating income (expenses) for the three and nine months ended September 30, 2018 primarily relate to fair-value adjustments of warrant liabilities on the Company’s balance sheet and the capital gain from realization of the investment in iPharma. Non-operating income (expenses) for the three and nine months ended September 30, 2017 primarily relate to fair-value adjustments of warrant liabilities on the Company’s balance sheet.

Net financial income amounted to $0.1 million for the three months ended September 30, 2018, similar to the comparable period in 2017. Net financial income for both periods relates primarily to gains recorded on foreign currency hedging transactions and investment income earned on bank deposits. Net financial income amounted to $0.4 million for the nine months ended September 30, 2018, compared to net financial income of $0.9 million for the nine months ended September 30, 2017. Net financial income for the 2018 period primarily relates to investment income earned on bank deposits, offset by losses recorded on foreign currency hedging transactions. Net financial income for the 2017 period relates primarily to gains recorded on foreign currency hedging transactions and investment income earned on bank deposits.

The Company’s net loss for the three months ended September 30, 2018 amounted to $6.3 million, compared with a net loss of $7.2 million for the corresponding period. The Company’s net loss for the nine months ended September 30, 2018 amounted to $17.3 million, compared with a net loss of $17.0 million for the corresponding 2017 period.

The Company held $35.0 million in cash, cash equivalents and short-term bank deposits as of September 30, 2018.

Net cash used in operating activities was $19.1 million for the nine months ended September 30, 2018, compared with net cash used in operating activities of $14.2 million for the nine months ended September 30, 2017. The $4.9 million increase in net cash used in operating activities during the nine-month period in 2018, compared to the nine-month period in 2017, was the result of increased research and development expenses in the 2018 period, as well as a decrease in accounts payable and increase in prepaid expenses and other receivables.

Net cash provided by investing activities was $16.0 million for the nine months ended September 30, 2018, compared to net cash used in investing activities of $19.5 million for the nine months ended September 30, 2017. The changes in cash flows from investing activities relate primarily relate primarily to investments in, and maturities of, short-term bank deposits, as well as the investment in Agalimmune in 2017 and the realization of the investment in iPharma in 2018.

Net cash provided by financing activities was $2.8 million for the nine months ended September 30, 2018, compared to net cash provided by financing activities of $37.7 million for the nine months ended September 30, 2017. The decrease in cash flows from financing activities reflects the public offering completed in April 2017.

Conference Call and Webcast Information

BioLineRx will hold a conference call today, November 8, 2018 at 10:00 a.m. EDT. To access the conference call, please dial +1-888-281-1167 from the U.S. or +972-3-918-0685 internationally. The call will also be available via webcast and can be accessed through the Investor Relations page of BioLineRx’s website. Please allow extra time prior to the call to visit the site and download any necessary software to listen to the live broadcast.

A replay of the conference call will be available approximately two hours after completion of the live conference call on the Investor Relations page of BioLineRx’s website. A dial-in replay of the call will be available until November 10, 2018; please dial +1-888-326-9310 from the U.S. or +972-3-925-5925 internationally.

On November 8, 2018 BioCryst Pharmaceuticals, Inc. (Nasdaq:BCRX) reported that the company will present at the Jefferies London Healthcare Conference on Thursday, November 15, 2018 at 3:00 a.m. ET and the Piper Jaffray 30th Annual Healthcare Conference in New York on Tuesday, November 27 at 3:30 p.m. ET (Press release, BioCryst Pharmaceuticals, NOV 8, 2018, http://ir.biocryst.com/news-releases/news-release-details/biocryst-present-upcoming-investor-conferences [SID1234530926]).

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Links to a live audio webcast and replay of these presentations may be accessed in the Investors section of BioCryst’s website at http://www.biocryst.com.

On November 8, 2018 Loxo Oncology, Inc. (Nasdaq:LOXO), a biopharmaceutical company developing highly selective medicines for patients with genomically defined cancers, reported third quarter 2018 financial results (Press release, Loxo Oncology, NOV 8, 2018, View Source [SID1234530925]).

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"In the third quarter we made significant progress across our pipeline," said Josh Bilenker, M.D., chief executive officer of Loxo Oncology. "At ESMO (Free ESMO Whitepaper), larotrectinib investigators provided a comprehensive program update that included durability and additional response data in patients with TRK fusion cancers. Medical meeting updates for LOXO-292 in September and October showed encouraging ongoing durability of response for patients with RET-driven cancers. Taken together, these data have increased our conviction around a foundational company thesis—that selective, purpose-built medicines offer the best opportunity for durable efficacy and a manageable safety profile. In the fourth quarter, we look forward to LOXO-305, our fourth program, entering the clinic."

Recent Highlights

Larotrectinib

Conference presentations
European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2018 Congress: On October 21, 2018, updated clinical data for larotrectinib were presented at ESMO (Free ESMO Whitepaper). The oral presentation provided approximately one year of additional follow-up for the primary dataset, the 55 patients with TRK fusion cancer described in the larotrectinib New England Journal of Medicine publication from February 2018. In addition, the update included data for a supplementary dataset, an additional 67 patients with TRK fusion cancer who were subsequently enrolled across the larotrectinib development program. Response evaluations were based on investigator assessment. As of a data cut-off date of July 30, 2018, in the primary dataset (n=55), the overall response rate (ORR) was 80% (44/55) (95% CI: 67-90%) and in the supplementary dataset (n=67), the ORR was 81% (44/54) (95% CI: 69-91%). Across both datasets, the ORR was 81% (88/109) (95% CI: 72-88%). The ORR analyses for the supplementary and integrated datasets included nine patients with unconfirmed partial responses awaiting confirmatory response assessments, but did not include 13 patients who were awaiting an initial response assessment and continuing on study. Median duration of response (DOR) had not been reached in either the primary dataset or supplementary dataset, with median follow-up of 17.6 months and 7.4 months, respectively. Larotrectinib was well tolerated, with the majority of adverse events recorded as grade 1 or 2. The most common treatment-emergent adverse events occurring in 15% or more of patients in the trial were fatigue, dizziness, nausea, constipation, anemia, increased alanine aminotransferase (ALT), increased aspartate aminotransferase (AST), cough, diarrhea, vomiting, pyrexia, dyspnea, headache, myalgia and peripheral oedema. See the presented data here.
Annual Meeting of the American Thyroid Association (ATA): On October 4, 2018, clinical data for patients with TRK fusion thyroid cancer enrolled in the larotrectinib development program were presented in an oral presentation at ATA. See the presented data here.
International Association for the Study of Lung Cancer (IASLC) 19th World Conference on Lung Cancer: On September 24, 2018, clinical data for patients with TRK fusion non-small cell lung cancer (NSCLC) enrolled in the larotrectinib development program were presented in a poster presentation at the IASLC World Conference on Lung Cancer. The poster can be found here.
Molecular Analysis for Personalised Therapy 2018 Congress: On September 15, 2018, Ventana Medical Systems, Inc., a member of the Roche Group, and Loxo Oncology, presented a co-authored poster on the analytical validation of Ventana’s pan-TRK IHC assay at the Molecular Analysis for Personalised Therapy 2018 Congress. These data, in addition to other recently published evidence, suggest an annual incidence of approximately 2,500 to 3,000 cases of TRK fusion cancer in the United States. The poster can be found here.
Integrative Therapies Program for Children with Cancer (ITPCC): On September 13, 2018, clinical data for children and adolescents with TRK fusion metastatic thyroid carcinoma enrolled in the larotrectinib development program were presented at the ITPCC conference. The poster can be found here.
Publications
Targeted Oncology Publication: On October 2, 2018, a manuscript was published online in Targeted Oncology detailing the potential effectiveness of TRK inhibition, including larotrectinib treatment, in patients with tumors harboring NTRK gene fusions, and the need for effective testing strategies. The publication can be found here.
British Journal of Cancer Publication: On September 17, 2018, a case report was published in the British Journal of Cancer detailing a patient with TRK fusion high-grade glioma treated with larotrectinib. The publication can be found here.
Cancer Publication: On September 11, 2018, a manuscript was published online in Cancer detailing the treatment of children with locally advanced TRK fusion sarcoma who were treated preoperatively with larotrectinib and underwent subsequent surgical resection. The publication can be found here.
JCO Precision Oncology Publication: On August 2, 2018, a case report was published in JCO Precision Oncology detailing an adolescent patient with a TRK fusion undifferentiated sarcoma treated with larotrectinib. The publication can be found here.
European Marketing Authorization Application (MAA): On August 27, 2018, Loxo Oncology and Bayer announced that Bayer had submitted an MAA for larotrectinib to the European Medicines Agency (EMA). More information can be found here.
LOXO-195

LOXO-195 Orphan Drug Designation (ODD): In October, the U.S. Food and Drug Administration (FDA) granted ODD to LOXO-195 for the treatment of solid tumors with neurotrophic tyrosine receptor kinase (NTRK)-fusion proteins that have developed acquired resistance to prior TRK inhibitor therapy. The FDA’s Office of Orphan Drug Products grants orphan drug designation to support the development of medicines for underserved patient populations, or rare disorders, that affect fewer than 200,000 people in the United States. Orphan drug designation provides to Loxo Oncology certain benefits, including market exclusivity upon regulatory approval if received, exemption of FDA application fees and tax credits for qualified clinical trials.
LOXO-292

Annual Meeting of the ATA: On October 6, 2018, updated interim clinical data for LOXO-292 from the global Phase 1/2 LIBRETTO-001 trial in patients with RET-mutant medullary thyroid cancer (MTC) and RET fusion-positive thyroid cancer were presented at the Annual Meeting of the ATA. The data presented were based on a July 19, 2018 data cut-off date and included the 29 patients with RET-mutant MTC and the nine patients with RET fusion-positive thyroid cancer who were included in the LOXO-292 presentation at the 2018 ASCO (Free ASCO Whitepaper) Annual Meeting. With 3.5 months of additional follow-up since the ASCO (Free ASCO Whitepaper) presentation, LOXO-292 demonstrated encouraging, early evidence of durable activity. Sixteen of 17 (94%) responding RET-mutant MTC patients remained on therapy and in response (median follow-up of 7.6 months for all 29 patients; median follow-up of 8.4 months for responding patients). Seven of seven (100%) responding RET fusion-positive thyroid remained on therapy and in response (median follow-up of 7.6 months for all nine patients; median follow-up of 8.5 months for responding patients). In RET-mutant MTC, the overall response rate was 59% (17/29) (95% CI: 39-77%) and the confirmed overall response rate was 56% (15/27) (95% CI: 35-75%). Of nine patients with RET fusion-positive thyroid cancer, the confirmed overall response rate was 78% (7/9) (95% CI: 40-97%). Of the 82 patients in the safety analysis, most treatment-emergent adverse events were Grade 1 in severity and judged by the investigator as not related to LOXO-292. See the presented data here.
IASLC 19th World Conference on Lung Cancer: On September 25, 2018, updated interim clinical data for LOXO-292 from the global Phase 1/2 LIBRETTO-001 trial in patients with RET fusion-positive NSCLC were presented at the IASLC World Conference on Lung Cancer. The data presented were based on a July 19, 2018 data cut-off date and included the 38 patients with RET fusion-positive NSCLC who were initially included in the LOXO-292 presentation at the 2018 ASCO (Free ASCO Whitepaper) Annual Meeting. With 3.5 months of additional follow-up since the ASCO (Free ASCO Whitepaper) presentation, LOXO-292 demonstrated encouraging, early evidence of durable activity, with 25 of 26 (96%) responding RET fusion-positive NSCLC patients remaining on therapy and 24 of 26 (92%) remaining in response (median follow-up of 8.5 months for all 38 patients; median follow-up of 9.5 months for responding patients). The overall response rate was 68% (26/38) (95% CI: 51-83%) and the confirmed overall response rate was 68% (25/37) (95% CI: 50-82%). Of the 82 patients in the safety analysis, most treatment-emergent adverse events were Grade 1 in severity and judged by the investigator as not related to LOXO-292. See the presented data here.
LOXO-292 Breakthrough Therapy Designations: The FDA granted three Breakthrough Therapy Designations to LOXO-292:
for the treatment of patients with metastatic RET fusion-positive non-small cell lung cancer who require systemic therapy and have progressed following platinum-based chemotherapy and an anti-PD-1 or anti-PD-L1 therapy;
for the treatment of patients with RET-mutant medullary thyroid cancer who require systemic therapy, have progressed following prior treatment and have no acceptable alternative treatment options; and for
for the treatment of patients with advanced RET fusion-positive thyroid cancer who require systemic therapy, have progressed following prior treatment and have no acceptable alternative treatment options.
More information can be found here and here.
LOXO-292 Orphan Drug Designation: In October, the FDA granted ODD to LOXO-292 for the treatment of pancreatic cancer. The FDA’s Office of Orphan Drug Products grants orphan drug designation to support the development of medicines for underserved patient populations, or rare disorders, that affect fewer than 200,000 people in the United States. Orphan drug designation provides to Loxo Oncology certain benefits, including market exclusivity upon regulatory approval if received, exemption of FDA application fees and tax credits for qualified clinical trials.
LOXO-305

Society of Hematologic Oncology (SOHO) Annual Meeting: On September 12, 2018, preclinical characterization data for LOXO-305 were presented at the SOHO Annual Meeting. The poster can be found here.
Third Quarter 2018 Financial Results

As of September 30, 2018, Loxo Oncology had aggregate cash, cash equivalents and investments of $647.6 million, compared to $626.2 million as of December 31, 2017.

Revenue from the collaboration agreement was $42.5 million for the third quarter of 2018, compared to none for the third quarter of 2017. This represents $52.9 million in revenue recognized from the $400.0 million upfront payment from the Bayer collaboration offset by $10.5 million, Loxo Oncology’s share of the joint larotrectinib co-promotion costs in the same period.

Revenue from the collaboration agreement was $123.5 million for the nine months ended September 30, 2018, compared to none for the nine months ended September 30, 2017. This represents $147.0 million in revenue recognized from the $400.0 million upfront payment from the Bayer collaboration offset by $23.5 million, Loxo Oncology’s share of the joint larotrectinib co-promotion costs in the same period. Loxo Oncology recognizes revenue from the upfront payment on a proportional performance basis utilizing a calculation based on quarterly research and development spending associated with larotrectinib and LOXO-195, relative to cumulative and forecasted research and development spending on larotrectinib and LOXO-195 over the course of the collaboration agreement. As a result, the quarterly revenue recognized for the upfront payment varies from quarter to quarter. A supporting schedule that shows the different components of revenue from the collaboration agreement is included with the attached financial statements.

Research and development expenses were $56.9 million for the third quarter of 2018 compared to $64.8 million for the third quarter of 2017. This decrease was primarily due to a non-recurring charge related to the $40.0 million asset acquisition of the BTK inhibitor program from Redx in the third quarter of 2017, offset by expanded development expenses across the LOXO-292 and LOXO-305 programs and higher employment costs primarily due to increased headcount. These numbers are net of 50/50 cost-sharing with Bayer for larotrectinib and LOXO-195 development costs. Loxo Oncology recognized research and development-related stock-based compensation expense of $4.2 million during the third quarter of 2018 as compared to $2.1 million for the third quarter of 2017.

Research and development expenses were $130.5 million for the nine months ended September 30, 2018 compared to $109.3 million for the nine months ended September 30, 2017. This increase was primarily due to expanded development expenses across the LOXO-292 and LOXO-305 programs and higher employment costs primarily due to increased headcount. These numbers are net of 50/50 cost-sharing with Bayer for larotrectinib and LOXO-195 development costs. Loxo Oncology recognized research and development-related stock-based compensation expense of $14.3 million during the nine months ended September 30, 2018 as compared to $8.0 million for the nine months ended September 30, 2017.

General and administrative expenses were $15.9 million for the third quarter of 2018 compared to $9.7 million for the third quarter of 2017. The increase was primarily due to additional headcount, associated employment costs, and general and administrative professional fees. Loxo Oncology recognized general and administrative-related stock-based compensation expense of $6.9 million during the third quarter of 2018 compared to $3.1 million for the third quarter of 2017.

General and administrative expenses were $43.8 million for the nine months ended September 30, 2018 compared to $21.0 million for the nine months ended September 30, 2017. The increase was primarily due to additional headcount, associated employment costs, and general and administrative professional fees. Loxo Oncology recognized general and administrative-related stock-based compensation expense of $18.8 million during the nine months ended September 30, 2018 compared to $6.7 million for the nine months ended September 30, 2017.

Net loss was $27.1 million and $42.3 million for the three and nine months ended September 30, 2018, respectively, compared to $73.3 million and $128.2 million for the three and nine months ended September 30, 2017, respectively. This decrease in net loss was primarily driven by the revenue recognized from the $400.0 million upfront payment from the Bayer collaboration, the larotrectinib and LOXO-195 development reimbursement from the Bayer collaboration, offset by increases in operating expenses.

Non-GAAP net loss was $68.8 million and $156.2 million for the three and nine months ended September 30, 2018, respectively, compared to $28.1 million and $73.6 million for the three and nine months ended September 30, 2017, respectively. This non-GAAP net loss measure, more fully described below under "Non-GAAP Financial Measures," excludes the recognition of collaboration revenue related to the Bayer upfront payment and share-based compensation expenses. A reconciliation of the GAAP financial results to non-GAAP financial results is included with the attached financial statements.

Earnings Conference Call and Webcast Information
Loxo Oncology will host a conference call today at 8:00 a.m. ET to discuss the third quarter 2018 financial results and company updates. A live webcast can be accessed under "Events & Presentations" in the Investors & Media section of the company’s website at www.loxooncology.com. The conference call can be accessed by dialing (877) 930-8065 (domestic) or (253) 336-8041 (international) and referring to conference ID 8379404. The webcast will be archived and made available for replay on the company’s website beginning approximately two hours after the event.

On November 8, 2018 Cambrex Corporation (NYSE: CBM), a leading manufacturer of small molecule innovator and generic Active Pharmaceutical Ingredients ("APIs"), and finished dosage forms, reported its results for the third quarter ended September 30, 2018 (Press release, Cambrex, NOV 8, 2018, View Source;p=irol-newsArticle&ID=2376146 [SID1234530924]).

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Third Quarter 2018 Highlights

Completed the acquisition of Halo Pharma ("Halo"), a leading finished dosage form Contract Development and Manufacturing Organization ("CDMO") specializing in product development and commercial manufacturing, for $425 million in total cash consideration.

Net revenue decreased 7% under current U.S. GAAP, ASC 606 – Revenue from Contracts with Customers ("ASC 606"). Under ASC 605, the previous revenue recognition standard, Net revenue decreased 9% compared to the same quarter last year.

Under ASC 606, Diluted EPS from continuing operations was $0.79 per share compared to $0.52 per share in the same quarter last year. 2018 performance reflects a lower tax rate resulting from tax reform in the United States and New Jersey. Under ASC 605, Diluted EPS from continuing operations would have been $0.94 per share.

Under ASC 606, EBITDA decreased to $15.8 million from $33.7 million in the same quarter last year. Adjusted EBITDA, which excludes the impact of adopting ASC 606, Halo’s results and acquisition and integration costs, was $28.1 million (see table at the end of this press release).

Net debt was $227.9 million at the end of the quarter, an increase of $399.2 million during the quarter primarily driven by the acquisition of Halo Pharma and partially offset by cash flows from operations during the quarter.

The Company now expects full year 2018 Adjusted Net revenue, which excludes the impact of foreign currency and the adoption of ASC 606, to be between -1% and -3% compared to 2017 and Adjusted EBITDA to be between $153 and $159 million, excluding the impact of the Halo acquisition (see Financial Expectations – Continuing Operations section below for related explanations and additional financial guidance).
"We’re very pleased to have closed the Halo acquisition this quarter, which diversifies our business into the large, growing market for outsourced finished dosage form contract development and manufacturing. Halo’s capabilities complement Cambrex’s existing global API manufacturing expertise and Halo expands our customer base and broadens our small molecule funnel. Integration is well underway and we are confident that this business will allow us to better meet the needs of our global network of customers and create future growth synergies," commented Steven M. Klosk, President and Chief Executive Officer of Cambrex.

"Market conditions in the Innovator sector remain strong and the addition of a new late stage project during the third quarter brings our total to 18 such products. A key component of our long term growth strategy is to steadily increase the number of late stage products in our portfolio. We believe that Cambrex is increasingly well positioned to execute against this strategy."

Basis of Reporting
The Company has provided a reconciliation of GAAP to adjusted (i.e. Non-GAAP) amounts at the end of this press release. Cambrex management believes that the adjustments provide useful information to investors due to the magnitude and nature of certain amounts recorded under GAAP.

Third Quarter 2018 Operating Results – Consolidated, Continuing Operations
Net revenue under ASC 606 was $104.6 million. Under ASC 605, the previous revenue recognition standard, Net revenue decreased to $102.7 million, or 9%, from $112.6 million in the same quarter last year. Net revenue during the quarter includes the acquisition of Halo which contributed revenue of $5.2 million under ASC 606 and $6.3 million under ASC 605. Results under ASC 606 and ASC 605 include a 1% unfavorable impact of foreign exchange compared to the third quarter of 2017.

Gross margins under ASC 606 were 31%. Under ASC 605, gross margins were 38% compared to 42% in the same quarter last year.

Selling, general and administrative expenses were $14.5 million, compared to $17.2 million in the same quarter last year. The decrease was mainly due to lower personnel related costs, an accounts receivable write-off in the same quarter last year and the impact of foreign currency.

Research and development expenses were flat year over year at $4.2 million.

Acquisition and integration expenses of $7.4 million represents costs associated with the acquisition of Halo.

Operating profit under ASC 606 was $6.6 million. Under ASC 605, operating profit was $13.2 million compared to $25.5 million in the same quarter last year. The decrease was primarily the result of higher operating expenses related to the purchase of Halo and lower gross profit. Adjusted EBITDA was $28.1 million compared to $33.7 million in the same quarter last year (see table at the end of this press release).

Income tax expense was a benefit of $15.4 million compared to an expense of $7.5 million and an effective tax rate of 30% in the same quarter last year. The income tax benefit during the quarter reflects the immediate recognition of certain effects of share-based compensation, acquisition and integration expenses, unrealized gain on investment in equity securities, a $2.1 million benefit for the finalization of the toll charge on undistributed foreign earnings under U.S. tax reform, and a $12.2 million benefit for the release of a state valuation allowance and the revaluation of state deferred tax balances due to New Jersey tax reform enacted during the third quarter of 2018. Excluding these items, the effective tax rate would have been approximately 20% during the quarter.

Income from continuing operations under ASC 606 was $26.8 million or $0.79 per share.

Adjusted income from continuing operations, calculated under ASC 605 and including other adjustments described in the table at the end of this press release, was $16.7 million or $0.49 per share, compared to $18.5 million or $0.55 per share in the same quarter last year.

Capital expenditures were $10.8 million and depreciation and amortization was $9.2 million compared to $15.4 million and $8.2 million, respectively, in the same quarter last year.

Net debt was $227.9 million at the end of the third quarter, an increase of $399.2 million during the quarter. The increase was driven by the acquisition of Halo and partially offset by cash flows from operations.

Third Quarter 2018 Operating Results – Finished Dosage Form ("FDF") segment
The acquisition of Halo resulted in the creation of the FDF segment for Cambrex. Included in Cambrex’s consolidated results for the third quarter of 2018 are the results of Halo for the period from acquisition date, September 12, 2018, through September 30, 2018 and are as follows.

Net revenue in the third quarter of 2018 under ASC 606 was $5.2 million. Net revenue under ASC 605 was $6.3 million.

Gross margins under ASC 606 in the third quarter of 2018 were 32%. Gross margins under ASC 605 were 28%.

Selling, general and administrative expenses were $1.1 million in the third quarter of 2018.

Operating profit under ASC 606 was $0.5 million. Under ASC 605, operating profit was $0.6 million. Both exclude $0.4 million in integration costs and includes increased depreciation and amortization expense resulting from the application of purchase accounting.

Financial Expectations – Continuing Operations
The following table shows the Company’s current expectations for its full year 2018 financial performance versus its expectations from the previous quarter. The expectations in the table below reflect expected results from the business excluding the recent acquisition of Halo and are consistent with the basis on which prior guidance was provided.

On November 8, 2018 Histogenics Corporation (Histogenics) (Nasdaq: HSGX), a leader in the development of restorative cell therapies that may offer rapid-onset pain relief and restored function, reported its financial and operating results for the quarter ended September 30, 2018 (Press release, Histogenics, NOV 8, 2018, View Source [SID1234530923]).

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"We continue to focus on advancing NeoCart towards the potential submission of a Biologics License Application by the end of the first quarter of 2019 and have an extensive dialogue with the FDA covering all aspects of the NeoCart development program, including the clinical data and related statistics from the NeoCart Phase 3 clinical trial," said Adam Gridley, President and Chief Executive Officer of Histogenics. "We believe, based on our continued analysis of the totality of the data, that NeoCart, if approved, may offer patients a treatment alternative that provides a more rapid recovery from pain and return to daily activity than other options to treat damaged knee cartilage. We are also working closely with MEDINET, our development and commercialization partner in Japan, toward the goal of initiating the Japanese Phase 3 clinical trial of NeoCart in 2019."

Third Quarter 2018 and Recent Highlights

Meeting Held with FDA to Discuss Potential NeoCart Regulatory Submission: Histogenics recently met with the United States Food and Drug Administration (FDA) to discuss the NeoCart Phase 3 clinical trial data and the potential for the submission of a Biologics License Application (BLA) for NeoCart. The FDA and Histogenics continue to discuss the clinical data generated to date, the potential need for any additional supplemental clinical data, including longer-term data from the ongoing Phase 3 trial or additional studies, and possible alternative regulatory pathways for acceptance of the BLA. The FDA has not made a final decision regarding a potential BLA submission and based on expected feedback from the FDA, Histogenics intends to provide a further update on these negotiations by the end of November 2018.

NeoCart Top-Line Phase 3 Data Announced in Third Quarter of 2018: Histogenics reported top-line data from the NeoCart Phase 3 clinical trial in September 2018. This trial is believed to be the largest and first prospectively designed, randomized clinical trial in North America evaluating the safety and efficacy of a restorative cell therapy to treat knee cartilage damage. It is also believed to be the only trial with a dual threshold responder analysis endpoint. While the Phase 3 clinical trial did not meet its primary endpoint of a statistically significant improvement in pain and function in the dual threshold responder analysis one year after treatment as compared to microfracture, patients treated with NeoCart saw statistically significant and clinically meaningful improvements in their pain and function levels using a variety of clinically validated scales. In addition, NeoCart demonstrated superiority on the responder analysis endpoint at six months, and in different subgroups at one year such as patients with lesions greater than 2 cm or with higher body mass index. Both NeoCart and microfracture were well tolerated and exhibited strong safety profiles.

Completion of $17.0 Million Financing: In October 2018, Histogenics completed an underwritten public offering of common stock and warrants that generated $17.0 million in gross proceeds and approximately $15.4 million in net proceeds after deducting underwriting discounts and commissions, and estimated offering expenses payable by Histogenics. These amounts do not include the proceeds, if any, that Histogenics may receive in connection with any exercise of the warrants issued in the offering. The financing was led by healthcare-focused, institutional investors and supported by existing Histogenics investors. Histogenics believes the financing will be sufficient to fund its projected cash needs into the middle of 2019.

Development and Presentation of Additional NeoCart Biomechanical Data to Support Potential Commercialization: As part of their Sponsored Research Agreement, Histogenics and Cornell University continue to generate additional biomechanical data to support the potential commercialization of NeoCart, if approved. The most recent data were presented at the Biomedical Engineering Society Annual Meeting in October 2018. These data build upon earlier studies and further demonstrate the importance of the presence of extracellular matrix, or tissue, in making biomechanically competent cartilage. Histogenics believe the data may be important to both regulatory agencies and clinicians regarding the potential performance advantages of NeoCart when compared to other treatment alternatives.
Financial Results for the Third Quarter of 2018

Histogenics’ loss from operations was $(7.0) million in the third quarter of 2018, compared to $(5.7) million in the third quarter of 2017. The increase in loss from operations was due to higher operating expenses in the third quarter of 2018 relative to the third quarter of 2017.

Research and development expenses were $4.6 million in the third quarter of 2018, compared to $3.5 million in the third quarter of 2017. The increase was primarily due to increases in consulting and compensation related expenses in connection with the preparation and evaluation of the data from the NeoCart Phase 3 clinical trial and the potential submission of a BLA for NeoCart with the FDA. General and administrative expenses were $2.4 million in the third quarter of 2018, compared to $2.2 million in the third quarter of 2017. The increase was primarily due to higher salaries and consulting expenses related to increased activities to support the potential commercialization of NeoCart.

As of September 30, 2018, Histogenics had cash, cash equivalents and marketable securities of $5.2 million, compared to $8.0 million at December 31, 2017. In October 2018, Histogenics received net proceeds of approximately $15.9 million through an underwritten public offering of common stock and warrants and sales through its at-the-market offering facility. Histogenics believes its current cash position will be sufficient to fund its operations into the middle of 2019.

Conference Call and Webcast Information

Histogenics management will host a conference call on Thursday, November 8, 2018 at 8:30 a.m. ET. A question-and-answer session will follow Histogenics’ remarks. To participate on the live call, please dial (877) 930-8064 (domestic) or (253) 336-8040 (international) and provide the conference ID "5491168" five to ten minutes before the start of the call.

To access a live audio webcast of the presentation on the "Investor Relations" page of the Histogenics website, please click here. A replay of the webcast will be archived on Histogenics’ website for approximately 45 days following the presentation.