On August 2, 2018 Genomic Health, Inc. (NASDAQ: GHDX) reported financial results and business progress for the quarter ended June 30, 2018 (Press release, Genomic Health, AUG 2, 2018, View Source [SID1234528315]).

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"We delivered record results in the first half of 2018, including 14 percent growth in revenue and an $8.3 million profit in the second quarter, driven by successful execution across our entire business, enhanced operational efficiency and greater leverage, strong reimbursement for the Oncotype DX Breast Recurrence Score test including the benefit from PAMA, and increased private payor reimbursement for the Genomic Prostate Score test," said Kim Popovits, chairman of the board, chief executive officer and president of Genomic Health. "With increasing reimbursement in our U.S. urology business and the global impact of the recently published landmark TAILORx results, we are on track to deliver double-digit revenue growth and full year profitability."

Pre-606 Adjusted Product Revenue
Effective January 1, 2018, the company adopted the new ASC 606 accounting standard for revenue, using the modified retrospective method, which applies the new standard prospectively and does not impact prior years’ financial statements. Since the as-reported 2017 quarterly and annual financial statements will not be restated to reflect the new accounting standard, the company has provided a supplemental financial schedule in the non-GAAP tables at the end of this press release, reflecting an estimate of revenue as if the new standard had been applied to the historical 2017 product revenue portion of revenue as of January 1, 2017, referred to herein as "pre-606 adjusted revenue."

Second Quarter and Six Months Ended June 30, 2018, Financial Results
Total revenue was $95.6 million in the second quarter of 2018, compared with pre-606 adjusted revenue of $83.8 million for the second quarter of 2017, an increase of 14 percent, and an increase of 13 percent on a non-GAAP constant currency basis. Reported revenue was $85.5 million in the second quarter of 2017.

U.S. product revenue was $81.4 million in the second quarter of 2018, compared with pre-606 adjusted revenue of $71.0 million for the second quarter of 2017, an increase of 15 percent. U.S. product reported revenue was $72.4 million in the second quarter of 2017. U.S. invasive breast revenue from Oncotype DX Breast Recurrence Score tests was $72.5 million in the second quarter of 2018, compared with U.S. invasive breast pre-606 adjusted revenue of $64.2 million for the second quarter of 2017, an increase of 13 percent. U.S. invasive breast revenue was $65.6 million in the second quarter of 2017. U.S. prostate test revenue from Oncotype DX Genomic Prostate Score (GPS) tests was $6.7 million in the second quarter of 2018, compared with $4.1 million in the second quarter of 2017, an increase of 63 percent.

International product revenue was $14.2 million in the second quarter of 2018, compared with pre-606 adjusted revenue of $12.8 million for the second quarter of 2017, an increase of 11 percent, and a 6 percent increase on a non-GAAP constant currency basis. International product reported revenue was $13.1 million in the second quarter of 2017.

Net income was $8.3 million, or $0.23 per share on a basic and diluted basis, in the second quarter of 2018, an improvement of $11.0 million, compared with a net loss of $2.7 million, or $0.08 per share on a basic and diluted basis, in the second quarter of 2017. Operating income was $7.1 million in the second quarter of 2018, an improvement of $10.2 million, compared with an operating loss of $3.1 million in the second quarter of 2017.

On a non-GAAP basis, net income was $9.4 million in the second quarter of 2018, compared with a $2.7 million non-GAAP net loss in the second quarter of 2017. Non-GAAP operating income was $9.4 million in the second quarter of 2018, compared with a non-GAAP operating loss of $3.1 million in the second quarter of 2017.

More than 33,590 Oncotype test results were delivered in the second quarter of 2018, an increase of 6 percent, compared with more than 31,550 test results delivered in the same period in 2017. Oncotype DX Breast Recurrence Score tests delivered in the U.S. grew 4 percent in the second quarter of 2018, compared with the same period in 2017. Oncotype DX GPS tests delivered in the U.S. grew 32 percent in the second quarter of 2018, compared with the same period in 2017. The number of international tests delivered in the second quarter of 2018 was consistent with the same period in 2017 and represented approximately 23 percent of total test volume in the quarter.

Total revenue for the six months ended June 30, 2018, was $188.2 million, compared with pre-606 adjusted revenue of $166.1 million for the same period in 2017, an increase of 13 percent, with a similar increase of 13 percent on a non-GAAP constant currency basis. Reported revenue was $169.5 million for the six months ended June 30, 2017.

International product revenue was $27.9 million for the six months ended June 30, 2018, compared with pre-606 adjusted revenue of $25.9 million for the six months ended June 30, 2017, an increase of 8 percent, and a 4 percent increase on a non-GAAP constant currency basis. International product reported revenue was $26.5 million for the six months ended June 30, 2017.

Net income was $4.5 million for the six months ended June 30, 2018, an improvement of $8.0 million, compared with a net loss of $3.5 million for the six months ended June 30, 2017. Operating income increased to $2.7 million for the six months ended June 30, 2018, an improvement of $8.7 million, compared with an operating loss of $6.0 million for the six months ended June 30, 2017.

Non-GAAP net income was $14.0 million for the first six months ended June 30, 2018, compared with a $5.5 million non-GAAP net loss for the six months ended June 30, 2017. Non-GAAP operating income was $13.6 million for the first six months ended June 30, 2018, compared with a non-GAAP operating loss of $6.0 million for the same period in 2017.

Cash and cash equivalents and short-term marketable securities at June 30, 2018 were $152.9 million, which included the fair value of the company’s investment in marketable equity securities of $3.7 million, compared with $129.6 million at December 31, 2017, which included the fair value of the company’s investment in marketable securities of $3.5 million.

2018 Financial Outlook

The outlook for 10% to 15% revenue growth in 2018 represents management’s estimates for 2018 versus 2017 reported revenues adjusted to reflect the impact of ASC 606 revenue recognition rules, which were effective January 1, 2018. Under the new rules, the company will report most uncollectible balances as a reduction in net revenues; historically, certain uncollectible amounts were classified as bad debt expense and were approximately 2.5% of revenue and classified within selling, general and administrative expenses. The company does not expect ASC 606 to impact net income or EPS.

Based on 36 million estimated shares outstanding.

Non-GAAP net income excludes charges for personnel reductions and asset write-offs associated with product cessation, and clinical and commercial development milestone payments.

Recent Business Highlights

Results from the landmark ECOG-ACRIN Cancer Research Group TAILORx study were published in The New England Journal of Medicine and presented in the Plenary Session at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. Results demonstrated that the Oncotype DX Breast Recurrence Score test identified 70 percent of early-stage breast cancer patients who receive no benefit from chemotherapy and can be effectively treated with endocrine therapy alone. Additionally, the trial established that chemotherapy may provide life-saving benefit to 30 percent of patients.
Following the TAILORx study publication, the U.K.’s National Institute for Health and Care Excellence (NICE) confirmed that it has requested that the External Assessment Group (EAG) review the results before finalizing its updated guidance on tumor profiling tests, and the German Federal Joint Committee (G-BA) commissioned the Institute for Quality and Efficiency in Health Care (IQWiG) to evaluate the new evidence before making a final coverage decision in Germany.
Established public coverage with the province of New Brunswick for the use of the Oncotype DX Breast Recurrence Score test in early-stage breast cancer patients with node-negative disease, increasing the total number of covered lives in Canada to more than 35 million. With this decision, all 10 provinces in Canada now cover the test.
Multiple private insurers, including a top five national payor, established new coverage for the Oncotype DX GPS test, bringing the total number of U.S. covered lives to more than 92 million, including Medicare.
Results from two studies demonstrating the positive impact of the Oncotype DX GPS test on risk assessment for better treatment decisions in clinically low-risk prostate cancer patients in real-world practice were presented at the 2018 American Urological Association (AUA) Annual Meeting.
JAMA Oncology published a study that demonstrated that the Oncotype DX AR-V7 Nucleus Detect test can identify patients with metastatic castration-resistant prostate cancer (mCRPC) who may live longer if they switch from targeted androgen receptor-signaling inhibitor (ARSi) therapy, such as enzalutamide and abiraterone, to taxane-based chemotherapy.
The company discontinued its early-stage development of the IsoPSA assay and terminated its milestone-based licensing agreement with Cleveland Diagnostics.
Non-GAAP Disclosure
The company makes reference in this press release to "non-GAAP operating income (loss)," which excludes 2018 expenses resulting from the restructuring charges for the cessation of the Oncotype SEQ Liquid Select test product development and commercialization activities in the first quarter of 2018, the expenses for a milestone payment to Biocartis N.V., and the cessation of its collaboration with Cleveland Diagnostics in the second quarter of 2018. Additionally, the company references "non-GAAP net income (loss)," which also excludes fair value adjustments related to its collaborations with Biocartis, Epic Sciences and Cleveland Diagnostics in the first and second quarters of 2018, and the gain on sale of marketable equity securities in the first quarter of 2017. The company believes that excluding these items and their related tax effects from its financial results reflects operating results that are more indicative of the company’s ongoing operating performance while improving comparability to prior periods, and, as such, may provide investors with an enhanced understanding of the company’s past financial performance and prospects for the future. The company also considers the impact of foreign currency exchange rates on its global business as described in the constant currency table accompanying this press release. The company’s management uses such non-GAAP measures internally to evaluate and assess its core operations and to make ongoing operating decisions. This information is not intended to be considered in isolation or as a substitute for income (loss) from operations or net income (loss) information prepared in accordance with GAAP. An explanation and reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the tables accompanying this press release.

Conference Call Details
To access the live conference call today, August 2, at 4:30 p.m. Eastern Time via phone, please dial (877) 303-7208 from the United States and Canada, or +1 (224) 357-2389 internationally. The conference call ID is 2089377. Please dial in approximately ten minutes prior to the start of the call. To access the live and subsequently archived webcast of the conference call, go to the Investor Relations section of the company’s website at View Source Please connect to the website at least 15 minutes prior to the presentation to allow for any software download that may be necessary

On August 2, 2018 AcelRx Pharmaceuticals, Inc. (Nasdaq: ACRX), (AcelRx), a specialty pharmaceutical company focused on innovative therapies for use in medically supervised settings, reported its second quarter 2018 financial results (Press release, AcelRx Pharmaceuticals, AUG 2, 2018, View Source [SID1234528314]).

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"The first half of the year has been productive on all fronts as we have accomplished all the milestones we established for the period. We’re very focused on reaching our remaining milestones for the year and, if DSUVIA is approved in November, eager to start commercializing our first U.S. product in Q1 2019," said Vince Angotti, Chief Executive Officer of AcelRx. "We continue to believe we have a unique product for the management of moderate to severe acute pain that can fulfill an unmet need within appropriate healthcare settings. We look forward to continued dialogue with the FDA during the coming months to achieve these objectives," continued Angotti.

Recent Highlights

The U.S. Food and Drug Administration (FDA) accepted the New Drug Application (NDA) for DSUVIA in May.
Received approval from the European Commission for DZUVEO for the management of acute moderate-to-severe pain in medically monitored settings.
Completed an underwritten public offering of 7,272,727 shares of common stock, at a price of $2.75 per share to the public with estimated net proceeds to the company of $18.7 million.
Financial Information

June 30, 2018 cash and short-term investment balance of $50.1 million;
R&D and G&A expenses for the quarter ended June 30, 2018 totaled $7.2 million compared to $9.1 million for the prior year period. Excluding stock-based compensation expense, these figures were $6.2 million for the second quarter of 2018 compared to $8.1 million for the prior year period. R&D and G&A expenses for the first half of 2018 totaled $14.7 million compared to $20.1 million in the first half of 2017. Excluding stock-based compensation expense, these figures were $12.8 million for the first half of 2018 compared to $18.1 million for the prior year period. The decrease in R&D and G&A expenses in both periods is primarily due to lower Zalviso-related expenses attributed to the Phase 3 clinical program completed in 2017. See the "Reconciliation of Non-GAAP Financial Measures" table below for a reconciliation of the non-GAAP operating expenses described above to their related GAAP measures;
Net cash use during the second quarter 2018 was $8.5 million excluding proceeds from ATM facility, included $2.3 million of debt service; and
For the second quarter of 2018 net loss was $10.5 million, or $0.20 per basic and diluted share, compared to $13.1 million, or $0.29 per basic and diluted share, for the second quarter of 2017. Net loss for the first half of 2018 was $22.1 million, or $0.43 basic and diluted net loss per share, compared to $28.6 million, or $0.63 basic and diluted net loss per share, for the prior year period.
2018 Remaining Milestones

Expected FDA advisory committee meeting for DSUVIA in late Q3/early Q4 2018;
Prescription Drug User Fee Act, PDUFA, date for DSUVIA on November 3, 2018; and
Anticipated resubmission of NDA for Zalviso in Q4 2018.
Conference Call and Webcast Information
As previously announced, AcelRx will conduct an investment-community conference call today, August 2, 2018 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these financial results and provide other corporate updates. Investors who wish to participate in the conference call may do so by dialing (866) 361-2335 for domestic callers, (855) 669-9657 for Canadian callers or (412) 902-4204 for international callers. Those interested in listening to a webcast of the conference call live via the Internet may do so by visiting the company’s website at www.acelrx.com and clicking on the webcast link on the Investors home page. The webcast will be archived on the AcelRx website for 90 days following the call.

On August 2, 2018 CTI BioPharma Corp. (NASDAQ:CTIC) today reported financial results for the second quarter and six months ended June 30, 2018 (Press release, CTI BioPharma, AUG 2, 2018, View Source;p=RssLanding&cat=news&id=2361698 [SID1234528313]).

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In July 2018, CTI BioPharma announced the continuation without modification of the PAC203 Phase 2 study following a planned interim review by an Independent Data Monitoring Committee. The Company also announced a pacritinib program update following a Type B meeting with the U.S. Food and Drug Administration (FDA) and announced a plan to conduct a new, randomized, Phase 3 study of pacritinib in patients with myelofibrosis. The Company has recently received the Day 180 List of Outstanding Issues from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) regarding the marketing authorization application (MAA) for pacritinib. Following the recently reported results from the PIX306 study, the Company is conducting a review of the clinical study data to assess the next steps for the PIXUVRI program.

Upcoming Milestones

In the third quarter of 2018, a second interim analysis of the PAC203 study of pacritinib in patients with myelofibrosis will be conducted by an Independent Data Monitoring Committee. PAC203 is expected to complete enrollment in the fourth quarter of 2018. Full top-line data from the study is expected in the second quarter of 2019.
The Company has been granted a two month extension for submitting the responses to the Day 180 List of Outstanding Issues. The extension will allow CTI to submit clinical data from PAC203 for review by the EMA. Given this extension, the CHMP opinion on the MAA is now expected in the fourth quarter of 2018.
"We believe we have now re-established a collaborative relationship with the FDA and have received greater clarity on the development path for pacritinib in the U.S.," commented Adam R. Craig, M.D., Ph.D., President and Chief Executive Officer of CTI BioPharma. "We plan to request a meeting with the FDA following the second interim analysis of PAC203 data with a meeting expected in the fourth quarter of 2018. The purpose of the meeting will be to discuss the interim data and to review the design of a registrational Phase 3 trial. We expect that this trial will begin in 2019, once the optimal dose of pacritinib has been confirmed using all pharmacokinetic, efficacy and safety data from the PAC203 study."

"In Europe, we continue to make progress with our marketing authorization application (MAA) and have now received the Day 180 List of Outstanding Issues report. The EMA has expressed interest in the emerging data from the PAC203 study, so the two month extension granted by CHMP will allow us to submit additional PAC203 data for review as part of our Day 180 responses."

Second Quarter Financial Results

Total revenues for the second quarter and six months ended June 30, 2018 were $0.6 million and $11.1 million, respectively, compared to $22.2 million and $23.0 million for the respective periods in 2017. The decrease in total revenues for the second quarter in 2018 compared to the same period in 2017 is primarily due to license and contract revenue that included the recognition of payments received from the expansion of the license and collaboration agreement for PIXUVRI with Servier in 2017 as well as the receipt of a payment from Teva Pharmaceutical Industries Ltd. related to the achievement of a sales milestone for TRISENOX (arsenic trioxide) in 2017. The decrease in total revenues for the six months ended June 30, 2018, compared to the same period in 2017 is primarily due to license and contract revenue that included the recognition of payments received from the expansion of the license and collaboration agreement for PIXUVRI with Servier in 2017.

GAAP operating loss was $14.0 million and $18.3 million for the second quarter and six months ended June 30, 2018, respectively, compared to GAAP operating income of $5.3 million and GAAP operating loss of $14.0 million for the respective periods in 2017. Non-GAAP operating loss, which excludes non-cash share-based compensation expense, for the second quarter and six months ended June 30, 2018 was $13.0 million and $16.0 million, respectively, compared to non-GAAP operating income of $6.4 million and non-GAAP operating loss of $11.1 million for the respective periods in 2017. Non-cash share-based compensation expense for the second quarter and six months ended June 30, 2018, was $1.0 million and $2.4 million, respectively, compared to $1.1 million and $2.9 million for the respective periods in 2017. Operating loss in the second quarter of 2018 as compared to an operating income for the same period in 2017 resulted primarily from the decrease in license and contract revenue as mentioned above and a decrease in selling, general and administrative expenses. Operating loss for the six months ended June 30, 2018, compared to the same period in 2017 resulted primarily from the decrease in license and contract revenue as mentioned above and a decrease in selling, general and administrative expenses. For information on CTI BioPharma’s use of non-GAAP operating loss and a reconciliation of such measure to GAAP operating loss, see the section below titled "Non-GAAP Financial Measures."

Net loss for the second quarter of 2018 was $11.3 million, or $(0.20) per share, compared to a net income of $1.0 million, or $0.03 per share, for the same period in 2017. Net loss for six months ended June 30, 2018, was $15.4 million, or $(0.29) per share, compared to a net loss of $18.8 million, or ($0.63) per share, for the same period in 2017.

As of June 30, 2018, cash, cash equivalents and short-term investments totaled $92.8 million, compared to $43.2 million as of December 31, 2017.

Conference Call Information
CTI BioPharma management will host a conference call to review its second quarter 2018 financial results and provide an update on business activities. The event will be held today at 1:30 p.m. PT / 4:30 p.m. ET. Participants can access the call at 877-260-1479 (domestic) or +1 334-323-0522 (international). To access the live audio webcast or the subsequent archived recording, visit www.ctibiopharma.com. Webcast and telephone replays of the conference call will be available approximately two hours after completion of the call. Callers can access the replay by dialing 1-888-203-1112 (domestic) or +1 719-457-0820 (international). The access code for the replay is 3255708. The telephone replay will be available until August 9, 2018.

On August 2, 2018 Sangamo Therapeutics, Inc. (Nasdaq: SGMO) reported that the Company will release its second quarter 2018 financial results after the market closes on Wednesday, August 8, 2018 (Press release, Sangamo Therapeutics, AUG 2, 2018, View Source [SID1234528312]). The press release will be followed by a conference call at 5:00 p.m. ET, which will be open to the public via telephone and webcast. During the conference call, the Company will review its financial results and provide a business update.

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The conference call dial-in numbers are (877) 377-7553 for domestic callers and (678) 894-3968 for international callers. The conference ID number for the call is 7179826. Participants may access the live webcast via a link on the Sangamo Therapeutics website in the Investors and Media section under Events and Presentations. A conference call replay will be available for one week following the conference call. The conference call replay numbers for domestic and international callers are (855) 859-2056 and (404) 537-3406, respectively. The conference ID number for the replay is 7179826

On August 2, 2018 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported financial results for the second quarter of 2018 and provided a business update (Press release, Regeneron, AUG 2, 2018, View Source [SID1234528311]).

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"Regeneron made important commercial progress in the second quarter with continued strong U.S. sales growth for EYLEA in retinal diseases and Dupixent in atopic dermatitis. We are particularly pleased by U.S. launch progress with Dupixent for adults with moderate-to-severe atopic dermatitis, driven by a positive experience in the marketplace by patients and physicians in this serious disease; we anticipate continued robust growth as more physicians increase their experience with the product," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "In the second half of the year, we anticipate two significant U.S. regulatory approvals: cemiplimab for advanced cutaneous squamous cell carcinoma and Dupixent for uncontrolled asthma. We also plan to submit regulatory applications for Dupixent in adolescent atopic dermatitis and to report Phase 3 results in nasal polyps, in addition to other advances across our innovative portfolio for serious diseases."

Financial Highlights

Bayer records net product sales of EYLEA outside the United States and Sanofi records global net product sales of Dupixent, Praluent, Kevzara, and ZALTRAP. Refer to Table 4 below for the Company’s share of profits/losses recorded in connection with sales of EYLEA outside the United States and global sales of Dupixent, Praluent, and Kevzara. Sanofi pays the Company a percentage of aggregate net sales of ZALTRAP.

Second Quarter 2018 Business Highlights

Key Pipeline Progress
Regeneron has nineteen product candidates in clinical development, which consist of EYLEA and fully human antibodies generated using the Company’s VelocImmune technology, including eight in collaboration with Sanofi. Updates from the clinical pipeline include:

EYLEA (aflibercept) Injection

The Company recently submitted a supplemental Biologics License Application (sBLA) for EYLEA for the treatment of diabetic retinopathy.
In the second quarter of 2018, the Company submitted an sBLA for EYLEA in a pre-filled syringe.
Dupixent (dupilumab) Injection

Dupixent, an antibody that blocks signaling of IL-4 and IL-13, is being studied in asthma, adolescent and pediatric atopic dermatitis, nasal polyps, eosinophilic esophagitis (EoE), and grass immunotherapy, with additional studies planned in 2018.
In May 2018, the Company and Sanofi reported that a Phase 3 trial evaluating Dupixent to treat moderate-to-severe atopic dermatitis in adolescents (12-17 years of age) met its primary and key secondary endpoints.
In May 2018, the Company and Sanofi announced that the New England Journal of Medicine published detailed, positive results from two Phase 3 trials of Dupixent in moderate-to-severe asthma.
In the second quarter of 2018, a Phase 2 study of Dupixent in grass immunotherapy was initiated.
Praluent (alirocumab) Injection

In May 2018, the Company and Sanofi announced they will lower the net price of Praluent in exchange for straightforward, more affordable patient access from Express Scripts. Praluent has been chosen as the exclusive PCSK9 inhibitor therapy on the Express Scripts national formulary. The agreement took effect on July 1, 2018.
An sBLA and a Marketing Authorization Application (MAA) for Praluent for cardiovascular risk reduction have been recently submitted.
An sBLA for first-line treatment of hyperlipidemia has also been recently submitted.
In the second quarter of 2018, a Phase 3 pediatric study in heterozygous familial hypercholesterolemia (HeFH) was initiated.
Cemiplimab, an antibody to PD-1, is being studied in patients with cancer.

In April 2018, the FDA accepted for priority review the BLA for cemiplimab for the treatment of patients with metastatic cutaneous squamous cell carcinoma (CSCC) or patients with locally advanced CSCC who are not candidates for surgery. The target action date for the FDA decision is October 28, 2018.
In April 2018, the European Medicines Agency (EMA) also accepted for review the MAA for cemiplimab in patients with metastatic CSCC or patients with locally advanced CSCC who are not candidates for surgery.
In June 2018, the Company and Sanofi announced that pivotal data from two trials evaluating cemiplimab in advanced CSCC were published in the New England Journal of Medicine.
In May 2018, the Company and Sanofi announced positive interim results from a Phase 1 study assessing cemiplimab as a potential treatment for advanced non-small cell lung cancer (NSCLC).
Fasinumab, an antibody targeting Nerve Growth Factor (NGF), is being studied in patients with osteoarthritis of the knee or hip.

In April 2018, an independent Data Monitoring Committee monitoring the ongoing safety and efficacy of the fasinumab clinical trials recommended that the higher dose-regimens be discontinued based on the risk benefit assessment and that the program may continue with the lower dose-regimens of fasinumab; the ongoing osteoarthritis trials have been modified accordingly. Since the Phase 3 clinical study in chronic low back pain in patients with concomitant osteoarthritis was only using higher doses, the Company is no longer actively dosing patients in this study.
Evinacumab is an antibody to ANGPTL3. In the second quarter of 2018, a Phase 3 study in severe hypertriglyceridemia was initiated.

REGN3500 is an antibody to IL-33. In the third quarter of 2018, a Phase 2 study in chronic obstructive pulmonary disease (COPD) was initiated.

REGN3918 (pozelimab) is an antibody to C5. The Company expects to report full data from its Phase 1 study in paroxysmal nocturnal hemoglobinuria (PNH) in the second half of 2018, and plans to initiate a Phase 2 study in PNH in early 2019.

REGN4018 is a bi-specific antibody targeting MUC16 and CD3. In the second quarter of 2018, a Phase 1 study in platinum-resistant ovarian cancer was initiated.

REGN4659 is an antibody against CTLA4. In the second quarter of 2018, a Phase 1 study in advanced NSCLC was initiated.

Select Upcoming 2018 Milestones

Programs

Milestones

EYLEA

FDA decision on sBLA for every 12-week dosing interval in wet AMD (target action date of August 11, 2018)
Report one-year data from Phase 3 PANORAMA study for the treatment of non-proliferative diabetic retinopathy in patients without diabetic macular edema (DME)
Dupixent (dupilumab)

FDA decision on sBLA for asthma in adult/adolescent patients (target action date of October 20, 2018)
Additional regulatory agency decisions on applications for atopic dermatitis in adults outside the United States
Submit sBLA and MAA for expanded indication in adolescent patients with atopic dermatitis (12-17 years of age)
Report data from Phase 3 studies in nasal polyps
Initiate Phase 3 study in EoE
Initiate Phase 2 study in peanut allergy
Praluent (alirocumab)

FDA decision on sBLA for use with apheresis (target action date of August 24, 2018)
Initiate Phase 3 pediatric study in homozygous familial hypercholesterolemia (HoFH)
Kevzara (sarilumab)

Initiate Phase 3 study in giant cell arteritis
Initiate Phase 3 study in polymyalgia rheumatica
Cemiplimab (PD-1 Antibody)

FDA decision on BLA for advanced CSCC (target action date of October 28, 2018)
Continue Phase 3 patient enrollment for the treatment of non-small cell lung cancer, as well as various other studies
Fasinumab (NGF Antibody)

Report data from first Phase 3 efficacy study in osteoarthritis pain
Continue patient enrollment in Phase 3 long-term safety and efficacy studies in osteoarthritis
REGN3500 (IL-33 Antibody)

Initiate Phase 2 study in atopic dermatitis
Bispecific Antibodies

Initiate Phase 2 study for REGN1979 (CD20xCD3 Antibody) in follicular lymphoma
Submit Investigational New Drug Application (IND) for BCMAxCD3 antibody

Financial Results

Product Revenues: Net product sales were $996 million in the second quarter of 2018, compared to $924 million in the second quarter of 2017. EYLEA net product sales in the United States were $992 million in the second quarter of 2018, compared to $919 million in the second quarter of 2017. Overall distributor inventory levels remained within the Company’s one- to two-week targeted range.

Total Revenues: Total revenues, which include product revenues described above, increased by 9% to $1.608 billion in the second quarter of 2018, compared to $1.470 billion in the second quarter of 2017. Total revenues include Sanofi and Bayer collaboration revenues of $501 million in the second quarter of 2018, compared to $432 million in the second quarter of 2017. Sanofi collaboration revenue in the second quarter of 2018 increased primarily due to the Company’s share of higher net sales of Dupixent and an increase in reimbursable expenses in connection with late-stage clinical development activities for cemiplimab. These increases were partly offset by the Company’s Discovery and Preclinical Development Agreement with Sanofi ending on December 31, 2017, lower reimbursement for Dupixent development activities, and an increase in the Company’s share of the collaboration’s Dupixent commercialization expenses. Bayer collaboration revenue increased in the second quarter of 2018 primarily due to an increase in the Company’s share of net profits in connection with higher sales of EYLEA outside the United States.

The Company adopted Accounting Standard Codification (ASC) 606, Revenue from Contracts with Customers, as of January 1, 2018. The Company adopted the standard using the modified retrospective method; prior period amounts have not been adjusted and the adoption of the new standard did not have a material impact on the Company’s total revenues in the second quarter of 2018.

Refer to Table 4 for a summary of collaboration and other revenue.

Research and Development (R&D) Expenses: GAAP R&D expenses were $529 million in the second quarter of 2018, compared to $510 million in the second quarter of 2017. The higher R&D expenses in the second quarter of 2018 were principally due to an increase in cemiplimab and fasinumab clinical trial costs and higher R&D headcount and facilities-related costs, partly offset by a decrease in Dupixent development expenses and the discontinuation of certain development programs. In the second quarter of 2018, R&D-related non-cash share-based compensation expense was $60 million, compared to $70 million in the second quarter of 2017.

Selling, General, and Administrative (SG&A) Expenses: GAAP SG&A expenses were $365 million in the second quarter of 2018, compared to $307 million in the second quarter of 2017. The higher SG&A expenses in the second quarter of 2018 were primarily due to higher headcount and headcount-related costs and an increase in commercialization-related expenses for EYLEA and Dupixent, and, to a lesser extent, for cemiplimab. In the second quarter of 2018, SG&A-related non-cash share-based compensation expense decreased to $40 million, compared to $45 million in the second quarter of 2017.

Income Tax Expense: In the second quarter of 2018, GAAP income tax expense was $105 million and the effective tax rate was 16.0%, compared to $138 million and 26.3% in the second quarter of 2017. The Company’s effective tax rate for the second quarter of 2018 was significantly impacted by the bill known as the Tax Cuts and Jobs Act (the "U.S. Tax Reform Act"), which reduced the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018. The effective tax rate for the second quarter of 2018 was positively impacted, compared to the U.S. federal statutory rate, primarily by the tax benefit associated with stock-based compensation, income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate, the foreign-derived intangible income deduction, and the federal tax credit for research activities.

Other income (expense), net: GAAP other income in the second quarter of 2018 included the recognition of $17 million of net unrealized gains on equity securities. In the first quarter of 2018, the Company adopted Accounting Standards Update ("ASU") 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, as of January 1, 2018, which requires the Company to measure equity investments at fair value with changes in fair value recognized in net income; previously, such changes in fair value were recognized in Other comprehensive income (loss). Refer to Table 3 for the non-GAAP adjustment related to gains and losses on investments in equity securities.

GAAP other expenses in the second quarter of 2017 included a $30 million loss on debt extinguishment related to the 2017 Tarrytown lease transaction.

GAAP and Non-GAAP Net Income(2): GAAP net income was $551 million, or $5.12 per basic share and $4.82 per diluted share, in the second quarter of 2018, compared to GAAP net income of $388 million, or $3.66 per basic share and $3.34 per diluted share, in the second quarter of 2017.

Non-GAAP net income was $624 million, or $5.79 per basic share and $5.45 per diluted share, in the second quarter of 2018, compared to non-GAAP net income of $487 million, or $4.59 per basic share and $4.17 per diluted share, in the second quarter of 2017.

A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

2018 Financial Guidance(3)

Regeneron records net product sales of EYLEA in the United States. Outside the United States, EYLEA net product sales comprise sales by Bayer in countries other than Japan and sales by Santen Pharmaceutical Co., Ltd. in Japan under a co-promotion agreement with an affiliate of Bayer. The Company recognizes its share of the profits (including a percentage on sales in Japan) from EYLEA sales outside the United States within "Bayer collaboration revenue" in its Statements of Operations.

This press release uses non-GAAP net income, non-GAAP net income per share, non-GAAP unreimbursed R&D, and non-GAAP SG&A, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). These non-GAAP financial measures are computed by excluding certain non-cash and other items from the related GAAP financial measure. Non-GAAP adjustments also include the estimated income tax effect of reconciling items.

The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate from period to period based on factors that are not within the Company’s control (such as the Company’s stock price on the dates share-based grants are issued or changes in the fair value of the Company’s equity investments) or items that are not associated with normal, recurring operations (such as changes in applicable laws and regulations). Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company’s core business operations. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company’s non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company’s historical GAAP to non-GAAP results is included in Table 3 of this press release.

The Company’s 2018 financial guidance does not assume the completion of any significant business development transactions not completed as of the date of this press release.

Conference Call Information

Regeneron will host a conference call and simultaneous webcast to discuss its second quarter 2018 financial and operating results on Thursday, August 2, 2018, at 8:30 AM. To access this call, dial (800) 708-4539 (U.S.) or (847) 619-6396 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron’s website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company’s website and will be available for 30 days.