On November 5, 2019 Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, reported financial results for the third quarter ended September 30, 2019, and recent business highlights (Press release, Vericel, NOV 5, 2019, View Source [SID1234550348]).

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Third Quarter 2019 Financial Highlights

Total net product revenues increased 36% to $30.5 million compared to $22.5 million in the third quarter of 2018, marking the tenth consecutive quarter with record revenues for the reported quarter;

MACI net revenue of $20.6 million and Epicel net product revenue of $9.9 million, the highest quarterly Epicel revenue in history;

Gross margin of 69% compared to gross margin of 64% in the third quarter of 2018;

Net income of $3.5 million, or $0.07 per share, compared to a net loss of $1.1 million, or $0.02 per share, in the third quarter of 2018;

Non-GAAP adjusted EBITDA of $6.8 million compared to $0.9 million in the third quarter of 2018;

Operating cash flow of $7.9 million;

As of September 30, 2019, the company had $74.7 million in cash and short-term investments compared to $82.9 million as of December 31, 2018; and

Full year 2019 revenue guidance for MACI and Epicel raised to $116 to $118 million compared to previous full year revenue guidance of $112 to $116 million.

Recent Business Highlights

During and since the third quarter of 2019, the company:

Announced plans to expand the MACI sales force from 49 to 76 sales representatives and from six to nine sales regions by the second quarter of 2020;

Completed an initial expansion of the burn care sales team from six to nine sales representatives and burn clinical specialists; and

Announced initiation of the NexoBrid Expanded Access Treatment Protocol (NEXT) to treat patients with deep partial- and full-thickness burns in the United

States during the preparation and review of the NexoBrid Biologics License Application.

"We are very pleased with the growth of our business and expect to maintain strong double-digit revenue growth for the foreseeable future as we continue to make targeted investments in our sports medicine and burn care commercial franchises," said Nick Colangelo, president and CEO of Vericel. "Given the consistent improvement in our gross profit and operating margin, we believe that we are also well-positioned to generate strong profit and cash flow growth in the years ahead."

Third Quarter 2019 Results
Total net product revenues for the quarter ended September 30, 2019 increased 36% to $30.5 million compared to $22.5 million in the third quarter of 2018. Total net product revenues for the quarter included $20.6 million of MACI (autologous cultured chondrocytes on porcine collagen membrane) net revenue and $9.9 million of Epicel (cultured epidermal autografts) net revenue, compared to $16.4 million of MACI net revenue and $6.0 million of Epicel net revenue, respectively, in the third quarter of 2018.

Gross profit for the quarter ended September 30, 2019 was $21.2 million, or 69% of net revenues, compared to $14.3 million, or 64% of net revenues, for the third quarter of 2018.

Total operating expenses for the quarter ended September 30, 2019 were $18.1 million, compared to $15.7 million for the same period in 2018. The increase in operating expenses was primarily due to a $1.1 million increase in stock-based compensation expenses, a $0.8 million increase in marketing expenses and a $0.7 million increase in MACI sales force expenses driven by the sales force expansion in the second quarter of 2019.

Vericel’s net income for the quarter ended September 30, 2019 was $3.5 million, or $0.07 per share, compared to a net loss of $1.1 million, or $0.02 per share, for the third quarter of 2018.
Non-GAAP adjusted EBITDA was $6.8 million for the quarter ended September 30, 2019 compared to $0.9 million in the third quarter of 2018. A table reconciling non-GAAP measures is included in this press release for reference.

As of September 30, 2019, the company had $74.7 million in cash and short-term investments compared to $82.9 million as of December 31, 2018.

Full Year 2019 Financial Guidance
The company now expects total MACI and Epicel net product revenues for the full year 2019 to be in the range of $116 to $118 million, compared to the previous full year revenue guidance of $112 to $116 million.

Conference Call Information
Today’s conference call will be available live at 8:30am Eastern Standard Time and can be accessed through the Investor Relations section of the Vericel website at http://

investors.vcel.com/events-presentations. A slide presentation with highlights from today’s conference call will be available on the webcast and in the Investor Relations section of the Vericel website. Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software if necessary. To participate in the live call by telephone, please call (877) 312-5881 and reference Vericel Corporation’s second-quarter 2019 investor conference call. If calling from outside the U.S., please use the international phone number (253) 237-1173.

If you are unable to participate in the live call, the webcast will be available at View Source until November 5, 2020. A replay of the call will also be available until 11:00am (EDT) on November 10, 2019 by calling (855) 859-2056, or from outside the U.S. at (404) 537-3406. The conference ID is 1685887.

On November 5, 2019 Unum Therapeutics Inc. (NASDAQ: UMRX), a clinical-stage biopharmaceutical company focused on developing curative cell therapies for cancer, reported preclinical data for its BOXR1030 program presented at the SITC (Free SITC Whitepaper) meeting being held November 6–10, 2019 in National Harbor, MD (Press release, Unum Therapeutics, NOV 5, 2019, View Source [SID1234550347]).

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"Solid tumors create an unfavorable microenvironment that depletes T cells of critical nutrients and amino acids, drives T cell dysfunction, and inhibits the effectiveness of cellular therapies, and our BOXR platform was specifically developed to discover novel transgenes that can be co-expressed with chimeric-targeting receptors to improve T cell functionality in the solid tumor microenvironment," said Seth Ettenberg, Ph.D., Chief Scientific Officer of Unum. "At this year’s SITC (Free SITC Whitepaper), we present preclinical data on the first product candidate from our BOXR platform, BOXR1030, which contains the GOT2 transgene. In our preclinical studies using stringent animal xenograft models that simulate the solid tumor microenvironment, expression of the GOT2 mitochondrial enzyme in BOXR1030 increased the production of key amino acids and metabolites, improved the anti-oxidant balance of T cells, and prevented their dysfunction and exhaustion. This work extends the increasingly recognized importance of immunometabolism in ensuring proper immune cell function."

Poster presentation title: "Co-expression of the Metabolic Enzyme GOT2 with a GPC3-Targeted CAR-T Overcomes Challenges of the Solid Tumor Microenvironment, Substantially Improving Therapeutic Efficacy in Solid Tumor Xenografts"

BOXR1030 Summary:

BOXR1030 contains a humanized single-chain variable fragment (scFv) 4-1BB CAR targeting GPC3 and separately co-expresses the glutamic-oxaloacetic transaminase 2 (GOT2) transgene from a single viral construct. Unum’s BOXR platform led to the discovery of the utility of GOT2, a critical enzyme involved in cellular metabolism. When co-expressed with a GPC3-targeted CAR-T, GOT2 improved metabolic and transcriptional profiles resulted in greater anti-tumor activity compared with parental CAR-T when tested both in vitro and in vivo under stringent conditions representing the solid tumor microenvironment (TME).

Over one hundred BOXR candidates were generated by cloning a library of literature-derived, hypothesis-driven bolt-on genes into vectors containing a GPC3-targeted CAR-T and were screened through Unum’s novel TME assays. Candidates were selected for their ability to overcome multiple TME challenges, while maintaining specificity and tolerability.

In vitro, BOXR1030 T cells were resistant to suppressive TME-like conditions, showing improved T cell proliferation under both hypoxic and low glucose conditions compared with control GPC3+ CAR-T cells. In vivo, BOXR1030 demonstrated superior activity compared to the parental CAR-T with treated animals achieving complete tumor regressions. Tumor infiltrating lymphocytes isolated from the tumors of treated animals revealed that BOXR1030 cells were more resistant to dysfunction and had fewer markers of exhaustion as compared to the control CAR-T cells.

About Unum’s BOXR platform
Unum’s BOXR platform was established with the aim of discovering novel "bolt-on" transgenes that can be co-expressed with chimeric-targeting receptors to improve the function of T cells in the solid tumor microenvironment. Unum’s BOXR discovery capabilities broadly evaluate T cell phenotype through a rigorous, multi-stage screening strategy that simulates the tumor microenvironment. Unum has discovered and continues to enrich a library of master regulatory genes of T cell biology that regulate pathways essential for cell growth, proliferation, and survival under a variety of conditions. BOXR bolt-on transgenes identified in this platform are designed to address a variety of immunosuppressive mechanisms of solid tumors, including metabolic competition, immune suppressor cells, and exhaustion due to chronic stimulation. Once discovered, BOXR transgenes are designed to be incorporated into several different types of therapeutic T cells, including both ACTR T cells and CAR-T cells, to impart new functionality to T cells. BOXR platform objectives include expanding the scope of biological mechanisms and transgenes in its proprietary BOXR library, enabling BOXR bolt-on applications for a broad range of immune cell therapies, including both autologous and allogeneic approaches, and advancing new BOXR product candidates into the clinic.

On November 5, 2019 Ultragenyx Pharmaceutical Inc. (NASDAQ: RARE), a biopharmaceutical company focused on the development of novel products for serious rare and ultra-rare genetic diseases, reported its financial results and corporate update for the quarter ended September 30, 2019 (Press release, Ultragenyx Pharmaceutical, NOV 5, 2019, View Source [SID1234550346]).

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"The U.S. launch of Crysvita continues to be strong with the number of patients on reimbursed therapy continuing to increase, which will be further supported by the recently expanded label for both pediatric and adult patients," said Emil D. Kakkis, M.D., Ph.D., Chief Executive Officer and President of Ultragenyx. "The New Drug Application for UX007 is now being reviewed by FDA, and our second indication for Crysvita for tumor-induced osteomalacia will be submitted in the coming months, potentially giving us approved treatments for four different diseases in 2020."

Third Quarter 2019 Financial Results

Net Revenues

For the third quarter of 2019, Ultragenyx reported $25.8 million in total revenue, including $22.6 million in Crysvita revenue. Crysvita revenue includes $19.5 million in collaboration revenue in the North American profit share territory, $2.0 million in royalty revenue in the European territory from Kyowa Kirin Co., and product revenue in other regions of $1.1 million. The Company recognized $2.4 million in Mepsevii (vestronidase alfa) product revenue, $0.7 million in UX007 named patient revenue, and also $0.1 million in revenue from its research agreement with Bayer.

Revenue for the nine months ended September 30, 2019 was $68.1 million, including $57.3 million in Crysvita revenue. Crysvita revenue includes $48.7 million in collaboration revenue in the North American profit share territory, $5.9 million in royalty revenue in the European territory from Kyowa Kirin Co., and product revenue for Crysvita in other regions of $2.7 million. The Company recognized $8.3 million in Mepsevii product revenue, $2.0 million in UX007 named patient revenue, and also $0.5 million in revenue from its research agreement with Bayer.

Operating Expenses

Total operating expenses for the third quarter of 2019 were $143.8 million compared with $101.4 million for the same period in 2018, including a $20.0 million research and development expense in the third quarter of 2019 from the GeneTx agreement, and non-cash stock-based compensation of $19.9 million and $20.7 million in the third quarter of 2019 and 2018, respectively. Total operating expenses for the nine months ended September 30, 2019 were $397.8 million compared with $316.3 million for the same period in 2018, including a $15.6 million research and development expense from the Arcturus collaboration amendment, a $20.0 million research and development expense from the GeneTx agreement, and non-cash stock-based compensation of $62.3 million and $59.0 million in the first nine months of 2019 and 2018, respectively. The increase in total operating expenses is due to the increase in commercial, development, and general and administrative costs as the company commercializes, grows, and advances its pipeline.

For the third quarter of 2019, Ultragenyx reported a net loss of $113.0 million, or $1.96 per share, basic and diluted, compared with a net loss for the third quarter of 2018 of $87.3 million, or $1.74 per share, basic and diluted. For the nine months ended September 30, 2019, net loss was $308.9 million, or $5.50 per share, basic and diluted, compared with a net loss for the same period in 2018 of $109.8 million, or $2.22 per share, basic and diluted. The loss for the third quarter of 2019 and for the nine months ended September 30, 2019 includes unrealized gains of $2.2 million and $12.0 million, respectively, from the fair value adjustment on the investment in Arcturus equity securities. The loss for the first nine months of 2018 includes a $40.3 million gain from Ultragenyx’s portion of the sale of the priority review voucher (PRV) received with the Crysvita U.S. Food and Drug Administration (FDA) approval and includes a $130.0 million gain from the sale of the PRV received with the Mepsevii FDA approval. The net loss for the first nine months of 2019 reflected cash used in operations of $273.3 million compared to $234.7 million for the same period in 2018.

Cash, Cash Equivalents and Investments

Cash, cash equivalents and available-for-sale investments were $527.1 million as of September 30, 2019.

Recent Updates and Upcoming Milestones

Crysvita Commercial Progress in X-Linked Hypophosphatemia (XLH)

Strong U.S. launch continues, with approximately 170 new patients on reimbursed commercial therapy in the United States in the third quarter 2019.
U.S. Crysvita label expanded. The U.S. FDA approved a label expansion for Crysvita, which now includes clinical data demonstrating superiority of treatment with Crysvita versus conventional therapy in pediatric patients, and improvement in stiffness and maintenance of efficacy in adult patients with longer-term treatment. The indication has also been expanded to include infants as young as six months of age.
Crysvita Supplemental Biologics License Application (sBLA) for Tumor-Induced Osteomalacia (TIO)

Ultragenyx plans to submit a sBLA to the U.S. FDA for Crysvita for the treatment of TIO in the first half of 2020.
UX007 NDA for the Treatment of Long-Chain Fatty Acid Oxidation Disorders (LC-FAOD) Accepted for Review by U.S. FDA

The U.S. FDA accepted for review the New Drug Application (NDA) and has set a Prescription Drug User Fee Act (PDUFA) date of July 31, 2020. The FDA has indicated that it is not currently planning to hold an advisory committee meeting to discuss the application.
Clinical-stage Gene Therapy Programs Advance

DTX301 Phase 1/2 study in ornithine transcarbamylase (OTC) deficiency: Data from Cohorts 1 and 2 demonstrated that the two responders maintained ureagenesis levels above normal and normal ammonia levels for 78 and 52 weeks, respectively. There have been no infusion-related adverse events and no treatment-related serious adverse events reported. Ultragenyx plans to provide an update from the ongoing third dose cohort around the end of the year. The company also plans to proceed to an additional cohort using prophylactic steroids.
DTX401 Phase 1/2 Study in glycogen storage disease type Ia (GSDIa): Data from the first two dose cohorts demonstrated that all patients showed clinical responses, including improvements in glucose control shown by time to hypoglycemia and reductions in cornstarch requirements. In the second dose cohort, all three patients showed a more meaningful reduction in glycogen storage as measured by liver fat fraction and improvements in metabolism as measured by lactate levels. Based on these data, Ultragenyx is conducting a confirmatory expansion cohort of three patients at the second cohort dose of 6.0 × 10^12 GC/kg, with data from this cohort expected in the first half of 2020.
Corporate Updates

Agreement with GeneTx Biotherapeutics to advance treatment for Angelman Syndrome. Ultragenyx and GeneTx are collaborating on the development of GeneTx’s GTX-102, an antisense oligonucleotide (ASO) for the treatment of Angelman syndrome, a debilitating and rare neurogenetic disorder. GTX-102 has been granted Orphan Drug Designation and Rare Pediatric Disease Designation, and the Investigational New Drug (IND) timing is on track. Ultragenyx made an upfront payment of $20 million which included an exclusive option to acquire GeneTx. This option may be exercised any time prior to 30 days following FDA acceptance of the IND for GTX-102. The option period may be extended by paying an option extension payment of $25 million.
Conference Call and Webcast Information

Ultragenyx will host a conference call today, Tuesday, November 5, 2019, at 2 p.m. PT/ 5 p.m. ET to discuss third quarter 2019 financial results and provide a corporate update. The live and replayed webcast of the call will be available through the company’s website at View Source To participate in the live call by phone, dial (855) 797-6910 (USA) or (262) 912-6260 (international) and enter the passcode 9946526. The replay of the call will be available for one year.

On November 5, 2019 Tetraphase Pharmaceuticals, Inc. (NASDAQ:TTPH), a biopharmaceutical company focused on commercializing novel tetracyclines to treat serious and life-threatening conditions, reported that company management will host a conference call at 4:30 p.m. ET on Tuesday, November 12, 2019 to discuss the Company’s third quarter 2019 financial results and provide a general corporate update (Press release, Tetraphase, NOV 5, 2019, View Source [SID1234550345]).

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The conference call may be accessed by dialing 844-831-4023 (U.S. and Canada) or 731-256-5215 (international) and entering conference ID number 2362909. A live audio webcast of the conference call will be available online from the "Investors – Events & Presentations" section of the Tetraphase website at www.tphase.com.

A replay of the conference call will be available from 7:30 p.m. ET on Tuesday, November 12, 2019, through 7:30 p.m. ET on Tuesday, November 19, 2019 by dialing 855-859-2056 (U.S. and Canada) and 404-537-3406 for (international) callers. The conference ID number is 2362909. A replay of the webcast will be available by visiting Tetraphase’s website.

On November 5, 2019 Syros Pharmaceuticals (NASDAQ:SYRS), a leader in the development of medicines that control the expression of genes, reported that it will host a live conference call and webcast at 8:30 a.m. ET on Tuesday, November 12, 2019 to report its third quarter 2019 financial results and provide a corporate update (Press release, Syros Pharmaceuticals, NOV 5, 2019, View Source [SID1234550344]).

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To access the live conference call, please dial 866-595-4538 (domestic) or 636-812-6496 (international), and refer to conference ID 1994858. A webcast of the call will also be available on the Investors & Media section of the Syros website at www.syros.com. An archived replay of the webcast will be available for approximately 30 days following the presentation.