On August 7, 2019 PDL BioPharma, Inc. ("PDL" or "the Company") (Nasdaq: PDLI) reported financial results for the three and six months ended June 30, 2019 (Press release, PDL BioPharma, AUG 7, 2019, View Source [SID1234538342]):

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Second Quarter and Recent Financial Highlights

Generally Accepted Accounting Principles ("GAAP") net loss attributable to PDL’s shareholders of $4.4 million or $0.04 per share.
Non-GAAP net income attributable to PDL’s shareholders of $12.7 million. A reconciliation of GAAP to non-GAAP financial results can be found in Table 3 at the end of this news release.
Cash and cash equivalents of $284.9 million as of June 30, 2019.
Invested $60.0 million in Evofem Biosciences, Inc. ("Evofem") in the second quarter of 2019.
Investment in Evofem resulted in an unrealized gain of $45.5 million due to the significant increase in Evofem’s stock price at the end of the second quarter of 2019.
Repurchased 8.0 million shares of common stock in the open market during the second quarter of 2019 for $26.0 million. The $100 million share repurchase program was completed in July 2019.
"Our investment in Evofem reflects our strategic shift with a focus on applying our capital and expertise to support the successful development and commercialization of innovative therapeutics by our partner companies," said Dominique Monnet, president and CEO of PDL. "We are transitioning away from our legacy portfolio of passive investments to build a focused portfolio of actively managed companies with exciting revenue growth potential.

"Indeed, a highlight of the second quarter is the completion of our $60 million equity investment in Evofem Biosciences," he added. "We are committed to working with Evofem’s experienced and inspired management team to support the successful launch of its flagship product, Amphora, with the ultimate goal of building the company into a leader in women’s health. This investment is a strong fit with our mission of creating value for shareholders and patients alike by enabling partner companies to maximize the potential of their novel therapeutics that address underserved needs. We expect to have an active role in managing this investment, as I have been appointed to the Evofem board of directors and PDL also has a board observer.

"We see significant revenue potential with Evofem’s investigational non-hormonal, on-demand contraceptive, Amphora, which addresses a considerable market opportunity," Monnet continued. "Evofem is preparing for a U.S. commercial launch in 2020, subject to FDA product approval, and has a well-defined commercial strategy designed to maximize product adoption and a strong balance sheet to support precommercial activities.

"The disappointing non-cash writedown of the fair market value of the AcelRx royalty asset underlines the importance of shifting our business model from passive investments to actively managed assets. We are pleased with the continued performance of our operating companies, Noden and LENSAR, which are both on target with the execution of their 2019 plans. We continue to receive significant royalties from the Assertio royalty asset and have ample cash on hand to execute on our business strategy. We expect cash flow generated by our current business will be in excess of our operational needs, thereby providing additional cash to invest in our future. We continue to review numerous opportunities and consider a broad range of potential transactions to build our portfolio," concluded Monnet.

Revenue Highlights

Total revenues for the second quarter of 2019 of negative $22.5 million included:
Product revenue of $17.8 million, which consisted of $7.4 million of product revenue from the LENSAR Laser System and $10.4 million from the sales of the Company’s branded prescription medicine products Tekturna and Tekturna HCT in the U.S. and Rasilez and Rasilez HCT in the rest of the world, as well as revenue generated from the sale of an authorized generic form of Tekturna in the U.S. (collectively, "the Noden Products").
Net royalty payments from acquired royalty rights and a change in fair value of the royalty rights assets of negative $40.4 million, primarily related to the non-cash AcelRx royalty asset fair value decrease of $60.0 million in the second quarter of 2019.
Following is a brief discussion by business segment:

Medical Devices

The Medical Devices segment consists of revenue derived from the LENSAR Laser System sales made by the Company’s subsidiary, LENSAR, Inc. ("LENSAR") and associated costs of operating the business. LENSAR is a medical device company focused on the next generation femtosecond cataract laser technology for refractive cataract surgery.

Product revenue from the LENSAR Laser System was $7.4 million, a 26% increase from the second quarter of 2018, and a 10% increase from the first quarter of 2019. Revenue generated outside the U.S. accounted for the majority of the increases. LENSAR procedure volume for the three months ended June 30, 2019 increased by 28% from the prior-year period and 7% from the first quarter of 2019.

Pharmaceutical

The Company’s Pharmaceutical segment consists of revenue derived from the Noden Products and associated costs of operating the business.

Product revenue from the Noden Products for the three months ended June 30, 2019 was $10.4 million, compared with $25.9 million in the prior-year period. Sales in the three months ended June 30, 2019 were comprised of $2.7 million in the U.S. and $7.7 million in the rest of the world, compared with $10.4 million and $15.5 million, respectively, in the prior-year period.

The decline in U.S. revenue in the three months ended June 30, 2019 is primarily due to the previously disclosed initial inventory stocking of the authorized generic launched late in the first quarter of 2019, which limited shipments of the authorized generic in the second quarter of 2019.
Sales of branded Tekturna in the U.S. declined due to both the Company’s launch of an authorized generic and the launch of a third-party generic form of aliskiren late in the first quarter of 2019.
Branded Tekturna and the authorized generic of Tekturna maintained a 74% U.S. market share at the end of the second quarter of 2019.
Sales of Rasilez and Rasilez HCT in the rest of the world declined primarily due to the initial inventory stocking in Japan in the second quarter of 2018 and to lower sales volume of Rasilez in other territories.
Income Generating Assets

The Company’s Income Generating Assets segment consists of revenue derived from (i) royalty rights – at fair value, (ii) notes and other long-term receivables, (iii) equity investments and (iv) royalties from issued patents in the U.S. and elsewhere covering the humanization of antibodies ("Queen et al. patents") and associated costs to manage these assets.

PDL recognized negative $40.4 million in revenue from royalty rights – change in fair value, compared with $12.8 million in the prior-year period.

The decrease is primarily related to a non-cash adjustment to the AcelRx royalty asset fair value of $60.0 million.
Due to the slower than expected adoption of Zalviso (sufentanil sublingual tablet system) since it was launched in Europe by Grünenthal relative to the Company’s estimates and the increased variance noted between the Company’s forecast model and actual results in the three months ended June 30, 2019, the Company utilized a third-party expert in the second quarter of 2019 to reassess the market and expectations of the product.
Key findings from the third-party study included: the post-surgical PCA (Patient-Controlled Analgesia) market was smaller than previously forecasted; the price of the product was higher relative to alternative therapies; the product was not being used as a replacement for systemic opioids; and, the design of the delivery device, which is pre-filled for up to three days of treatment, restricted its use for shorter recovery time procedures. The reduction in forecasted sales had a direct impact on both the sales-based royalties and the sales-based milestones expected to be received through 2033.
This decline was partially offset by higher royalty rights – change in fair value from the Assertio royalty asset.
PDL received $20.1 million in net cash royalties from all of its royalty rights in the three months ended June 30, 2019 compared with $19.4 million in the three months ended June 30, 2018.
Total revenues for the first half of 2019 were $16.4 million, compared with $85.1 million for the first half of 2018.
Following is a brief discussion by business segment:

Medical Devices

Product revenue from the LENSAR Laser System for the six months ended June 30, 2019 increased by $3.3 million, or 30%, to $14.1 million from $10.9 million for the six months ended June 30, 2018. Revenue generated outside of the U.S. was responsible for the majority of the increase. LENSAR procedure volume for the six months ended June 30, 2019 increased by 31% from the prior-year period.

Pharmaceutical

Product revenue from the Noden Products for the six months ended June 30, 2019 was $30.4 million, a $13.8 million decrease from $44.2 million for the prior-year period. Sales in the six months ended June 30, 2019 were comprised of $14.9 million in the U.S. and $15.5 million in the rest of the world, compared with $20.9 million and $23.3 million, respectively, in the prior-year period.

The decrease in sales of the Noden Products in the U.S. is due primarily to the launch and related initial inventory stocking of an authorized generic form of Tekturna in the U.S. and the launch of a third-party generic form of aliskiren late in the first quarter of 2019.
The decline in sales in the rest of the world is due to initial inventory stocking in Japan in the second quarter of 2018 and lower sales volume of Rasilez in other territories, in part reflecting additional measures to maximize the product profitability.
Income Generating Assets

Revenue from royalty rights – change in fair value was negative $28.1 million for the first half of 2019, compared with $23.9 million in the prior-year period.

The decrease is primarily related to a non-cash adjustment to the AcelRx royalty asset fair value of $60.0 million.
PDL received $32.7 million in net cash royalties from its royalty rights in the first half of 2019.
Royalties from PDL’s licensees to the Queen et al. patents were less than $0.1 million for the first half of 2019, compared with $4.0 million for the prior-year period, reflecting the runout of the royalties on the sales of Tysabri.

Interest revenue decreased by $1.5 million from the prior-year period due to modifications to the Company’s agreement with CareView Communications which suspended interest payments for the first half of 2019.

Operating Expense Highlights

Operating expenses for the three months ended June 30, 2019 were $27.4 million, a $144.3 million decrease from $171.7 million for the three months ended June 30, 2018. The decrease was primarily a result of:
the $152.3 million impairment of the Noden Products intangible assets in the second quarter of 2018 due to the increased probability of a third-party generic version of aliskiren being launched in the U.S.,
a $4.8 million decline in amortization expense for the Noden intangible assets as a result of the 2018 impairment recorded for these intangible assets,
a $4.0 million, or 28%, decline in general and administrative expenses primarily due to lower professional fees,
a $3.3 million, or 62% decline in sales and marketing expenses, reflecting the cost savings from the change in the Company’s marketing strategy for the Noden Products, and
a $2.2 million decrease in cost of product revenue.
The decrease was partially offset by:
the $22.1 million reduction to the contingent liability in the second quarter of 2018 for future Noden products milestone payments that were less likely to be made with the increased probability of a third-party generic version of aliskiren being launched in the U.S., and
increased research and development expenses of $0.2 million associated with product development in our Medical Devices segment.
Operating expenses for the six months ended June 30, 2019 were $55.8 million, a $150.1 million decrease from $205.9 million for the prior-year period. The decrease was primarily a result of:
the net impact of the above-described impairment of the Noden Products intangible assets in the second quarter of 2018 and related reductions to the Noden Products contingent liability and amortization expense associated with those intangible assets, which, in aggregate, accounted for $139.1 million of the decrease,
a $5.2 million, or 20%, decline in general and administrative expenses primarily due to lower professional fees, and
a $6.1 million, or 56%, decline in sales and marketing expenses, reflecting the cost savings from the change in the Company’s marketing strategy for the Noden Products.
The decrease was partially offset by:
increased research and development expenses of $0.3 million associated with product development in our Medical Devices segment.
Stock Repurchase Programs

In November 2018, PDL began repurchasing shares of its common stock pursuant to the $100.0 million share repurchase program authorized by the Company’s board of directors in September 2018. During the second quarter of 2019, the Company repurchased 8.0 million shares for an aggregate purchase price of $26.0 million.
Subsequent to the close of the second quarter of 2019, the Company repurchased 1.3 million shares of its common stock for a total of $4.1 million. These repurchases concluded this share repurchase program. Under this program, the Company repurchased a total of 31.0 million shares for $100.0 million, at an average cost of $3.22 per share.
Since initiating its first stock repurchase program in March 2017, the Company has repurchased a total of 53.1 million shares for $155.0 million, at an average cost of $2.92 per share.
As of July 30, 2019, the Company had approximately 114.2 million shares of common stock outstanding.
Other Financial Highlights

PDL had cash and cash equivalents of $284.9 million as of June 30, 2019, compared with cash and cash equivalents of $394.6 million as of December 31, 2018.
The $109.7 million reduction in cash and cash equivalents during the first six months of 2019 was primarily the result of common stock repurchases of $71.3 million and the Company’s investment in Evofem of $60.0 million, partially offset by the proceeds from royalty rights.
In August 2019, PDL received a royalty payment from Bausch Health in the amount of $11.3 million for royalties earned on sales of Glumetza for the month of June. This royalty payment will be recognized in the third quarter of 2019.
Conference Call and Webcast Details

PDL will hold a conference call to discuss financial resultsand provide a business update at 4:30 p.m. Eastern time today. Slides to accompany the conference call will be available in the Investor Relations section of www.pdl.com.

To access the live conference call via phone, please dial 844-535-4071 from the U.S. and Canada or 706-679-2458 internationally. The conference ID is 9787426. A telephone replay will be available beginning approximately one hour after the call through one week following the call and can be accessed by dialing 855-859-2056 from the U.S. and Canada or 404-537-3406 internationally. The replay passcode is 9787426.

To access the live and subsequently archived webcast of the conference call, go to the Investor Relations section of www.pdl.com and select "Events & Presentations."

On August 7, 2019 Quantum Leap Healthcare Collaborative (QLHC) joins Merck in acknowledging the promising data from the KEYNOTE-522 trial (Press release, Merck & Co, AUG 7, 2019, View Source [SID1234538341]). Merck recently reported that the Phase 3 KEYNOTE-522 trial met a primary endpoint, demonstrating statistically significant improved rates of pathological complete response for KEYTRUDA (pembrolizumab), Merck’s anti-PD-1 therapy, in combination with chemotherapy as neoadjuvant therapy for patients with triple negative breast cancer (TNBC). The positive finding serves as validation of the QLHC-sponsored I-SPY 2 trial, an adaptive phase II platform trial designed to rapidly screen agents and find the most effective drug combinations for each specific tumor subtype. In this study, patients start with chemotherapy before surgery so that response to treatment can be assessed. I-SPY 2’s evaluation of pembrolizumab formed the basis for targeting the immunotherapy to the TNBC subtype.

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I-SPY TRIALs are sponsored by Quantum Leap Healthcare Collaborative (QLHC), a 501c(3) charitable organization dedicated to facilitating and accelerating the development and transfer of high-impact solutions to advance healthcare and evidence-based medicine. (PRNewsfoto/Quantum Leap Healthcare Collabo)
I-SPY TRIALs are sponsored by Quantum Leap Healthcare Collaborative (QLHC), a 501c(3) charitable organization dedicated to facilitating and accelerating the development and transfer of high-impact solutions to advance healthcare and evidence-based medicine. (PRNewsfoto/Quantum Leap Healthcare Collabo)
As stated by Dr. Roger M. Perlmutter, president, Merck Research Laboratories, "When I have been asked over the last two years why I was prepared to see Merck initiate a Phase 3 trial in triple negative breast cancer, my response has always rested heavily on data from I-SPY 2. The KEYNOTE-522 pCR results offer promise for triple negative breast cancer patients who need better treatment options."

The I-SPY 2 trial is considered the archetype of a new approach to clinical trials. Rather than the traditional ‘one drug, one disease’ model for drug development, it is a ‘platform’ trial. I-SPY 2 evaluates up to 5 drugs (or combination of drugs) in parallel with the goal of determining which drugs work best in various types of breast cancer. I-SPY 2 is also designed for efficiency and speed, by employing an ‘adaptive’ statistical model. In this approach, the results of each patient are used to refine how the investigational drugs are assigned to new patients. In this way, I-SPY 2 can achieve similar results in a fraction of the time with fewer patients than traditional trials. The goal is to get the right drug to the right patient at the right time.

In results presented at the 2017 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, I-SPY 2 investigators reported that pembrolizumab, when added to standard neoadjuvant therapy for early breast cancer, nearly tripled the response (the chance of the tumor going away before surgery) in HER2 negative breast cancer subtypes. It was observed to be particularly effective in the difficult-to-treat ‘triple negative’ subset of breast cancers, which do not express genes for estrogen or progesterone receptors, nor the HER2 oncogene. I-SPY 2’s adaptive model predicted that there was a greater than 99% chance that the treatment regimen including pembrolizumab would be successful in a Phase 3 trial in TNBC.

I-SPY 2 principal investigator, Dr. Laura Esserman of the University of California San Francisco, said the KEYNOTE-522 results validate both I-SPY 2’s pioneering approach and the vision of Merck leadership for being one of the trial’s early partners.

"The whole I-SPY team is thrilled to see that the KEYNOTE-522 results came out just as we predicted. It is an important advance for TNBC patients and a clear demonstration that the I-SPY model can not only accelerate the development of new cancer treatments, it can target treatment to the patients who will benefit most."

Importantly, the 2017 I-SPY 2 results were obtained after only 11 months and enrolling only 69 patients to the pembrolizumab arm of the study; Traditional Phase 2 trials typically require 100-200 patients and last two years or more.

About I-SPY and the I-SPY 2 TRIAL

The I-SPY (Investigation of Serial Studies to Predict Your Therapeutic Response with Imaging And moLecular Analysis) TRIAL is conducted by a consortium that brings together the U.S. Food and Drug Administration (FDA), leading academic medical centers, and patient advocates, as well as Merck and other pharmaceutical and biotech companies.

The I-SPY 2 TRIAL is a collaborative effort among academic investigators from 20 major cancer research centers across the U.S. and Quantum Leap Healthcare Collaborative, the FDA, and the Foundation for the National Institutes of Health (FNIH) Cancer Biomarkers Consortium. Major supporters include The Safeway Foundation, and the Bill Bowes Foundation.

The I-SPY 2 TRIAL’s adaptive statistical design was developed by the pioneering principal investigators for the I-SPY trial, Laura J. Esserman, M.D., MBA, and Donald A. Berry, Ph.D., professor of biostatistics at The University of Texas MD Anderson Cancer Center and founder of Berry Consultants in collaboration with the FDA, industry, and many leading academic collaborators including the Agents working group chair (Doug Yee, M.D., University of Minnesota) and the Trial Operations working group chair (Angie DeMichele, M.D., University of Pennsylvania). The trial is a unique collaborative effort where over 50 clinicians are actively engaged in the conduct of the trial.

The I-SPY 2 TRIAL adaptive-trial design is based on Bayesian predictive probability that a biological regimen will be shown to be statistically superior to standard therapy in an equally randomized 300-patient confirmatory trial. Regimens that have a high Bayesian predictive probability of showing superiority in at least one of 10 predefined signatures graduate from the trial. Regimens are dropped for futility if they show a low predictive probability of showing superiority over standard therapy in all 10 signatures. A maximum total of 120 patients can be assigned to each experimental regimen. A regimen can graduate early and at any time after having 60 patients assigned to it.

Based on the confirmatory results of the Merck phase 3 trial, the I SPY 2 team is working on an improved design in an effort to get over 90% of high-risk patients to experience a complete response (disappearance of tumor) with targeted and less toxic combinations before surgery. This will accelerate the ability to personalize care for women with breast cancer.

On August 7, 2019 Clovis Oncology, Inc. (NASDAQ: CLVS) reported that, subject to market and other conditions, it intends to offer $225 million aggregate principal amount of its convertible senior notes due 2024 (the "notes") in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") (Press release, Clovis Oncology, AUG 7, 2019, View Source [SID1234538340]). Clovis Oncology also expects to grant the initial purchasers a 13-day option to purchase up to $33.75 million aggregate principal amount of additional notes on the same terms and conditions.

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The interest rate, conversion rate and other terms will be determined at the time of pricing of the offering of the notes. The holders of the notes may convert their notes at their option at any time prior to the close of business on the business day immediately preceding the maturity date. Clovis Oncology will not have the right to redeem the notes prior to their maturity. Holders of the notes may require Clovis Oncology to repurchase for cash all or part of their notes upon certain fundamental changes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date, Clovis Oncology will, in certain circumstances, increase the conversion rate for a holder who elects to convert its notes in connection with such corporate event.

Concurrently with the offering, in separate transactions, Clovis Oncology intends to use a portion of the net proceeds from the offering to repurchase in privately negotiated transactions with a limited number of holders, a portion of Clovis Oncology’s outstanding 2.50% Convertible Senior Notes due 2021 (the "2021 Notes"), depending on negotiations and pricing determinations in connection with such proposed repurchase transactions. Any repurchase of the 2021 Notes could affect the market price of Clovis Oncology’s common stock. Clovis Oncology intends to use the remaining net proceeds from this offering for general corporate purposes, including sales and marketing expenses associated with Rubraca (rucaparib), funding of our development programs, payment of milestones pursuant to our license agreements, general and administrative expenses, acquisition or licensing of additional product candidates or businesses, repurchase or repayment of other debt obligations and working capital.

The offer and sale of the notes and the shares of common stock issuable upon conversion of the notes have not been registered under the Securities Act or any state securities laws and, unless so registered, the notes and any such shares may not be offered or sold in the United States except pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy the notes or any other securities, nor will there be any sale of notes or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

On August 7, 2019 Quanterix Corporation (Nasdaq: QTRX), a company digitizing biomarker analysis with the goal of advancing the science of precision health, reported that it has commenced an underwritten public offering of $75 million of shares of its common stock (Press release, Quanterix, AUG 7, 2019, View Source [SID1234538339]). In connection with the offering, Quanterix intends to grant the underwriters a 30-day option to purchase up to an additional 15% of the shares of common stock at the public offering price. All of the shares in the offering will be sold by Quanterix. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

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J.P. Morgan Securities LLC and SVB Leerink LLC are acting as joint book-running managers for the offering. Canaccord Genuity LLC is acting as co-manager for the offering.

The public offering will be made pursuant to a shelf registration statement on Form S-3 that was previously filed with and declared effective by the Securities and Exchange Commission ("SEC"). A preliminary prospectus supplement and accompanying base prospectus relating to and describing the terms of the offering will be filed with the SEC and will be available on the SEC’s website located at View Source The offering is being made only by means of a prospectus and related prospectus supplement, copies of which may be obtained, when available, from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone: (866) 803-9204; or SVB Leerink LLC, Attention: Syndicate Department, One Federal Street, 37th Floor, Boston, MA, 02110, by telephone at (800) 808-7525, ext. 6132 or by e-mail at [email protected]. The final terms of the offering will be disclosed in a final prospectus supplement to be filed with the SEC.

This press release shall not constitute an offer to sell, or a solicitation of an offer to buy, nor will there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

On august 7, 2019 Five Prime Therapeutics, Inc. (NASDAQ: FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, reported its results for the second quarter and provided an update on the company’s recent activities (Press release, Five Prime Therapeutics, AUG 7, 2019, View Source [SID1234538338]).

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

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"We are pleased that enrollment in our Phase 3 FIGHT trial continues to exceed expectations due to FGFR2b biomarker prevalence above 30% and continued strong investigator support. We are enthusiastic about the potential of bemarituzumab to be an important new medicine for patients with previously untreated, advanced gastric cancer," said Aron Knickerbocker, Chief Executive Officer of Five Prime Therapeutics. "We estimate that the FIGHT trial will reach sufficient enrollment in the coming months to support the planned, event-driven futility analysis in the first half of 2020, allowing us to pause enrollment in the fourth quarter of this year. This is consistent with our portfolio prioritization, which is currently focused on conducting the FIGHT trial, advancing the most promising FPA150 opportunities, as well as assessing safety and dose finding for FPT155."

Second Quarter 2019 Business Highlights and Milestones

Clinical Pipeline:

Bemarituzumab (anti-FGFR2b) is a first-in-class isoform-selective antibody with enhanced antibody-dependent cell-mediated cytotoxicity (ADCC) in development as a targeted immunotherapy for tumors that overexpress FGFR2b. Bemarituzumab and mFOLFOX6 are being evaluated in combination with mFOLFOX6 in the Phase 3 FIGHT (FGFR2b Inhibition in Gastric and Gastroesophageal Junction Cancer Treatment) trial.

Enrollment in the FIGHT trial continues ahead of projections due to FGFR2b biomarker prevalence that has remained steady at more than 30%, strong clinical trial execution, and continued support and enthusiasm from clinical investigators.
The company plans to conduct an early futility analysis for the FIGHT trial during the first half of 2020. The purpose of the futility analysis is to ensure the trial is adequately powered to detect an overall survival benefit at full enrollment.
Consistent with its portfolio prioritization and given the higher than expected enrollment rate, the company will pause enrollment in the FIGHT trial when sufficient patients have been enrolled in the trial to support the planned futility analysis. The company expects the pause in enrollment to occur during the fourth quarter of 2019.
FPA150 (anti-B7-H4) is a first-in-class B7-H4 antibody designed to target tumor cells by enhancing killing of B7-H4 overexpressing tumors through ADCC and by blocking B7-H4 from sending an inhibitory signal to CD8 T cells. B7-H4 is frequently overexpressed in breast, ovarian and endometrial cancers.

Five Prime will present a poster at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress that will include preliminary FPA150 data from the monotherapy Phase 1b expansion cohorts at the 20 mg/kg dose in patients with breast, ovarian or endometrial cancers that overexpress B7-H4 and early safety data from the Phase 1a lead-in testing FPA150 in combination with Keytruda.
The company presented preliminary monotherapy safety data from the dose escalation and exploration portions of the Phase 1a/1b trial of FPA150 in patients with advanced solid tumors at the 2019 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.
FPT155 (CD80-Fc) is a first-in-class CD80-Fc fusion protein that uses the binding interactions of soluble CD80 to directly engage CD28 to enhance its co-stimulatory T cell activity without inducing super agonism and to block CTLA-4 from competing for endogenous CD80, allowing CD28 signaling to prevail in T cell activation in the tumor microenvironment.

Enrollment is proceeding according to plan in the dose escalation portion of the Phase 1a/1b trial, with six dose level cohorts enrolled and dose escalation continuing.
An abstract was submitted for the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting, where the company expects to present safety and pharmacokinetic data from the Phase 1a dose escalation portion of the ongoing Phase 1a/1b trial.
Cabiralizumab (anti-CSF1R) is an antibody that inhibits CSF1R and has been shown to block the activation and survival of tumor-associated macrophages. Pursuant to a worldwide collaboration agreement, Bristol-Myers Squibb (BMS) has an exclusive worldwide license for the development and commercialization of cabiralizumab, and Five Prime retains the rights to a U.S. co-promotion option.

The next anticipated event is completion of enrollment in the Phase 2 trial testing the combination of cabiralizumab with Opdivo (nivolumab) with and without chemotherapy in approximately 160 patients with locally advanced or metastatic pancreatic cancer that has progressed during or after one line of chemotherapy.
BMS-986258 (anti-TIM-3) is a fully-human monoclonal antibody targeting TIM-3 (T cell immunoglobulin and mucin domain-3), an immune checkpoint receptor that may limit the duration and magnitude of T cell responses. This is the first clinical candidate from the discovery collaboration between Five Prime and BMS that includes targets in three immune checkpoint pathways.

The Phase 1/2 clinical trial continues to progress, and, in July, the expected size of the trial was increased from 308 to 383 patients.
Corporate Highlights

During the second quarter, the company announced the appointment of Carol Schafer and Lori Lyons-Williams to its board of directors. The company also announced the departure of Dr. Sheila Gujrathi from the board.
Summary of Financial Results and Guidance:

Cash Position: Cash, cash equivalents and marketable securities totaled $214.1 million as of June 30, 2019, compared to $237.0 million as of March 31, 2019. The decrease in cash, cash equivalents and marketable securities was primarily attributable to quarterly operating expenses that exceeded quarterly revenues.

Revenue: Collaboration and license revenue for the second quarter of 2019 decreased by $4.3 million, or 56.6%, to $3.3 million from $7.6 million for the second quarter of 2018. This decrease was primarily related to lower collaboration revenues from BMS due to a reduction in activities in the Phase 1a/1b trial of the combination of cabiralizumab and nivolumab and the completion of the research term under the immuno-oncology research collaboration in March 2019.

R&D Expenses: Research and development expenses for the second quarter of 2019 decreased by $4.0 million, or 12.0%, to $29.4 million from $33.4 million for the second quarter of 2018. This decrease was primarily due to lower compensation costs, as well lower manufacturing costs related to FPT155 drug production and lower diagnostic costs related to the FIGHT trial. These cost reductions were partially offset by higher CRO costs that were related to strong patient enrollment and the opening of new clinical trial sites.

G&A Expenses: General and administrative expenses for the second quarter of 2019 decreased by $0.1 million, or 1%, to $9.7 million from $9.8 million for the second quarter of 2018. The decrease was primarily due to decreased use of consultants in a number of functions across the company.

Net Loss: Net loss for the second quarter of 2019 was $34.4 million, or $0.99 per basic and diluted share, compared to a net loss of $34.1 million, or $0.99 per basic and diluted share, for the second quarter of 2018.

Shares Outstanding: Weighted average shares outstanding for the second quarter of 2019 was 34,909,479 as of June 30, 2019.

Cash Guidance: Five Prime expects full-year 2019 net cash used in operating activities to be between $117 and $122 million and estimates ending 2019 with cash, cash equivalents and marketable securities between $148 and $153 million.

Conference Call Information

Five Prime will host a conference call and live audio webcast today at 4:30 p.m. (ET) / 1:30 p.m. (PT) to discuss its financial results and provide a corporate update. To participate in the conference call, please dial (877) 878-2269 (domestic) or (253) 237-1188 (international) and refer to conference ID 3575436. To access the live webcast please visit the "Events & Presentations" page under the "Investors" tab on Five Prime’s website at www.fiveprime.com. An archived copy of the webcast will be available on Five Prime’s website beginning approximately two hours after the conference call. Five Prime will maintain an archived replay of the webcast on its website for at least 30 days after the conference call.