On May 7, 2019 Novelion Therapeutics Inc. (NASDAQ: NVLN), a biopharmaceutical company dedicated to developing and commercializing therapies for individuals living with rare diseases ("Novelion" or the "Company"), reported financial results for the first quarter ended March 31, 2019 (Press release, QLT, MAY 7, 2019, View Source [SID1234535833]).

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Novelion’s Interim Chief Executive Officer Ben Harshbarger commented, "We continue to execute on our goals of achieving target revenues, maximizing the impact of the operating cost reductions that we implemented in late 2018, working with the FDA on the development program for the potential expansion of the metreleptin label in the U.S. to include the partial lipodystrophy (PL) indication, and pursuing a comprehensive capital restructuring."

Business Update

Sales growth was supported by the launch of MYALEPTA (metreleptin) in Germany in the fourth quarter of 2018. Following marketing authorization of MYALEPTA for generalized lipodystrophy (GL) and PL by the EMA, Novelion’s subsidiary Aegerion Pharmaceuticals commenced the pricing and reimbursement processes in key EU markets. Reimbursement decisions in many of the key EU markets are anticipated throughout 2019.

In January 2019, Aegerion held a meeting with the U.S. Food and Drug Administration (FDA) to obtain feedback on the design of the placebo-controlled study for the PL indication for MYALEPT in the U.S. Aegerion is assessing feedback on the study design and integrating it into the Phase 3 study protocol.

Aegerion plans to file for regulatory approvals for metreleptin in GL and PL in certain key markets outside the U.S. and EU, including Brazil, in 2019.

As previously announced, Novelion and Aegerion have each engaged advisors to independently explore and advise them on all available strategic alternatives regarding the Company’s capital structure, such as a restructuring of Aegerion’s Convertible Notes due August 2019 (including a restructuring that would likely involve a debt for equity exchange), a sale or merger of Novelion or Aegerion, or the sale or other disposition of certain businesses or assets. The implementation of one or more of such transactions (or the failure to complete any such transaction or transactions) will likely require Aegerion, and could require Novelion, to seek the protections of applicable bankruptcy laws allowing for corporations to seek to restructure their debts and other affairs under a court supervised reorganization process.

First Quarter 2019 Financial Results

JUXTAPID: The Company reported net revenues of JUXTAPID of $14.2 million in the first quarter of 2019, compared to $13.4 million for the same period in 2018, $9.1 million, or 64.1%, of which was from prescriptions written in the U.S. and $0.8 million of which was royalty revenue from sales in the EMEA region. Growth in JUXTAPID revenue in the first quarter of 2019 compared to the same period in 2018 was due to an increase in revenues in the U.S., primarily resulting from a price increase, and a greater number of patients on therapy in Japan.

MYALEPT/MYALEPTA: The Company reported net revenues of MYALEPT/MYALEPTA of $18.0 million in the first quarter of 2019, compared to $14.1 million for the same period in 2018, $11.4 million, or 63.3%, of which was from prescriptions written in the U.S. MYALEPT/MYALEPTA revenue growth in the first quarter was driven by increased sales in Germany, as a result of the recent launch, and the U.S., as a result of a greater number of shipments to patients as well as a price increase, partially offset by a decline in sales in Brazil.

GAAP total net revenues for the first quarter of 2019 were $32.2 million compared to $27.5 million for the same period in 2018.

Cost of product sales for the first quarter of 2019 was $15.2 million compared to $13.5 million for the same period in 2018. The increase is primarily attributed to higher stability testing costs and higher supply chain costs as well as a higher royalty rate on U.S. sales of metreleptin, partially offset by a lower inventory cost basis in the first quarter of 2019. Despite the increase, gross margin improved from 50.9% to 52.7% as a result of higher revenues in comparison to certain fixed costs.

GAAP total operating expenses for the first quarter of 2019 were $33.0 million compared to total operating expenses of $35.5 million, a 7.0% reduction compared to the same period in 2018. GAAP selling, general and administrative (SG&A) expenses were $26.0 million in the first quarter of 2019, including approximately $13.8 million of costs related to the Company’s ongoing debt restructuring and strategic review processes, compared to $23.7 million for the same period in 2018. GAAP R&D expenses were $6.9 million in the first quarter of 2019 compared to $11.8 million for the same period in 2018.

On a non-GAAP basis, during the first quarter of 2019, SG&A expenses were $11.7 million compared to $21.6 million for the same period in 2018. In the first quarter of 2019, we incurred $12.3 million of non-ordinary course expenses, which primarily consist of legal, financial/restructuring advisory, and consulting fees, in connection with our ongoing strategic alternatives review, as well as a $1.5 million payment to extend the maturity date of Aegerion’s bridge loans. The 45.8% decrease in non-GAAP SG&A expenses in the first quarter of 2019 compared with the same period in 2018 is primarily the result of cost reduction initiatives implemented in late 2018 as well as the delay of certain ordinary course projects and initiatives to later in the year.

On a non-GAAP basis, during the first quarter of 2019, R&D expenses decreased 41.4% to $6.8 million compared to $11.6 million for the same period in 2018, reflecting cost reduction initiatives, as well as the delay of certain ordinary course projects and initiatives to later in the year, partially offset by higher spending related to pharmacovigilance activities.

On a non-GAAP basis, during the first quarter of 2019, total operating expenses were $18.6 million compared to $33.3 million for the same period in 2018, reflecting a decrease in expenses for the reasons set forth above.

GAAP net loss in the first quarter of 2019 was $31.8 million, an improvement of approximately 3.0% compared to GAAP net loss of $32.8 million during the same period in 2018.

On a non-GAAP basis, net income was $1.9 million in the first quarter of 2019 compared to a net loss of $13.5 million for the same period in 2018.

A full reconciliation of the GAAP financial results to non-GAAP financial results is included in the financial information tables below.

Debt and Government Settlement Payments

As of March 31, 2019, Aegerion’s debt liabilities and government settlement payments included $302.5 million in outstanding principal under Aegerion’s Convertible Notes due August 15, 2019, $74.4 million in outstanding principal (including paid in kind fees and interest) under Aegerion’s secured term loans having a maturity date of June 30, 2019, $35.7 million outstanding under Aegerion’s secured intercompany term loan with Novelion, as lender, which has a maturity date of July 1, 2019, as well as $29.3 million owed under Aegerion’s settlements with the Department of Justice and the U.S. Securities and Exchange Commission (the "Commission"), payable in prescribed installments until the first quarter of 2021.

Financial Guidance

Novelion expects total net revenues in 2019 to be between $160.0 and $175.0 million, including approximately $30.0 million of licensing revenues, in the form of the $25.0 million upfront licensing payment and $5.0 million payment upon transfer of the marketing authorization to Recordati Rare Diseases Inc. ("Recordati"), resulting from the licensing agreement entered into between Aegerion and Recordati for the commercialization of JUXTAPID in Japan in February 2019.

About Novelion Therapeutics

Novelion Therapeutics is a global biopharmaceutical company dedicated to developing and commercializing therapies that deliver new standards of care for people living with rare and underserved diseases. With a global footprint and an established commercial portfolio, including MYALEPT (metreleptin) and JUXTAPID (lomitapide), our business is supported by differentiated treatments that treat severe and rare diseases.

Cautionary Note

Novelion is the parent company of Aegerion, our operating subsidiary and the source of the consolidated company’s revenues. References to "we," "our" and the "Company" refer to the entire enterprise, whose assets and operations reside primarily at Aegerion. As described above, Aegerion has a substantial amount of debt, including a secured term loan entered into in November 2018, which matures on June 30, 2019, its 2% Convertible Notes, which mature on August 15, 2019, and a secured intercompany term loan from Novelion, which matures on July 1, 2019. In light of these arrangements and their provisions, which prohibit Aegerion from making certain payments,

including payments in cash, to Novelion (including for out-of-pocket costs incurred, and services rendered, by or on behalf of Novelion, for the benefit of Aegerion), investors are cautioned that Aegerion’s interests may not always be aligned, and may in certain circumstances be in conflict, with those of Novelion or its shareholders. The risks attendant to these conflicts of interest are described below under the caption "Forward Looking Statements and Risk Factors," which section you should read carefully and in its entirety.

Non-GAAP Results

The non-GAAP results in this press release, including, without limitation, non-GAAP R&D expenses, non-GAAP SG&A expenses, non-GAAP total operating expenses and non-GAAP net income (loss), are provided as a complement to results provided in accordance with GAAP because management believes, when considered together with the GAAP information, these non-GAAP financial measures help indicate underlying trends in the Company’s business, are important in comparing current results with prior period results and provide additional information regarding the Company’s financial performance. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally, and to manage the Company’s business and evaluate its performance. The non-GAAP financial measures have no standardized meaning under GAAP and therefore may not be comparable to similar measures presented by other companies. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for, or superior to, the financial measures prepared and presented in accordance with GAAP and should be reviewed in conjunction with the relevant GAAP financial measures. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.

On May 7, 2019 Pfizer Inc. (NYSE: PFE) reported that the European Commission (EC) granted conditional marketing authorization for LORVIQUA (lorlatinib, available in the U.S., Canada and Japan under the brand name LORBRENA), as a monotherapy for the treatment of adult patients with anaplastic lymphoma kinase (ALK)-positive advanced non-small cell lung cancer (NSCLC) whose disease has progressed after alectinib or ceritinib as the first ALK tyrosine kinase inhibitor (TKI) therapy, or crizotinib and at least one other ALK TKI (Press release, Pfizer, MAY 7, 2019, View Source [SID1234535832]). LORVIQUA is a third-generation ALK TKI that was specifically developed to penetrate the blood brain barrier, in the presence or absence of resistance mutations.

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"Pfizer has worked to pioneer biomarker-driven medicine for patients with ALK-positive non-small cell lung cancer and we continue to advance patient care with the approval of LORVIQUA," said Andreas Penk, M.D., regional president, Oncology International Developed Markets at Pfizer. "We are proud that LORVIQUA is our second lung cancer medication approved in Europe within two months and our third biomarker-driven medicine for lung cancer. We look forward to making LORVIQUA available for European patients with ALK-positive non-small cell lung cancer who have progressed on prior therapy with a second generation ALK medicine."

The conditional marketing authorization was based on results from a non-randomized, dose-ranging and activity-estimating, multi-cohort, multi-center Phase 1/2 study, B7461001, evaluating LORVIQUA for the treatment of patients with ALK-positive advanced NSCLC, who were previously treated with one or more ALK TKIs. A total of 139 patients with ALK-positive metastatic NSCLC after treatment with at least one second-generation ALK TKI, such as alectinib, brigatinib or ceritinib, were enrolled in the Phase 2 portion of the study. Among these patients, the overall response rate (ORR) for those who have been treated with one prior ALK TKI (N=28) was 42.9% (95% CI: 24.5, 62.8) and 39.6% (95% CI: 30.5, 49.4) for those with two or more prior ALK TKI treatments (N=111). In the trial, 67% of patients had a history of brain metastases.

"Over the last decade, our understanding of ALK-positive non-small cell lung cancer has advanced dramatically, leading to multiple medications for patients. However, the common challenges associated with treating the disease, including resistance and brain metastases have created an urgent need for additional treatment options," said Enriqueta Felip, M.D., Ph.D., Vall d’Hebron University Hospital, Vall d’Hebron Institute of Oncology in Spain. "The LORVIQUA approval marks an exciting time in lung cancer innovation and I look forward to using this next-generation ALK inhibitor to treat my patients."

Among 295 ALK-positive or ROS1-positive metastatic NSCLC patients who received LORVIQUA 100 mg once daily in study B7461001, the most common (≥ 20%) adverse reactions were hypercholesterolemia (84.4%), hypertriglyceridemia (67.1%), edema (54.6%), peripheral neuropathy (47.8%), cognitive effects (28.8%), fatigue (28.1%), weight increased (26.4%), arthralgia (24.7%), mood effects (22.7%) and diarrhea (22.7%).

Conditional approval is granted to a medicinal product that fulfils an unmet medical need, where the benefit-risk balance is positive and the benefit of the product’s immediate availability outweighs the risk of less comprehensive data than normally required.1 Under the provisions of the conditional approval, Pfizer will provide additional data from the post-marketing studies, including the Phase 3 CROWN study of LORVIQUA versus crizotinib in the first-line treatment of patients with ALK-positive NSCLC, which is currently ongoing.

About LORVIQUA (lorlatinib)

LORVIQUA is a TKI that has been shown to be highly active in preclinical lung cancer models harboring chromosomal rearrangements of ALK. LORVIQUA was specifically developed to inhibit tumor mutations that drive resistance to other ALK inhibitors and to penetrate the blood brain barrier. LORVIQUA is approved in the EU as monotherapy for the treatment of adult patients with ALK-positive advanced NSCLC whose disease has progressed after:

alectinib or ceritinib as the first ALK TKI therapy; or
crizotinib and at least one other ALK TKI.
LORVIQUA is also approved:

Under the brand name LORBRENA in Japan for the treatment of ALK fusion gene-positive unresectable advanced and/or recurrent NSCLC with resistance or intolerance to ALK tyrosine kinase inhibitor(s).
Under the brand name LORBRENA in Canada, where it is conditionally approved as monotherapy for the treatment of adult patients with ALK-positive metastatic NSCLC who have progressed on: crizotinib and at least one other ALK inhibitor, or patients who have progressed on ceritinib or alectinib.
Under the brand name LORBRENA in the U.S. for the treatment of patients with ALK-positive metastatic NSCLC whose disease has progressed on:
crizotinib and at least one other ALK inhibitor for metastatic disease; or
alectinib as the first ALK inhibitor therapy for metastatic disease; or
ceritinib as the first ALK inhibitor therapy for metastatic disease.
The U.S. indication is approved under accelerated approval based on tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.

LORBRENA (lorlatinib) IMPORTANT SAFETY INFORMATION FROM THE U.S. PRESCRIBING INFORMATION

Contraindications: LORBRENA is contraindicated in patients taking strong CYP3A inducers, due to the potential for serious hepatotoxicity.

Risk of Serious Hepatotoxicity with Concomitant Use of Strong CYP3A Inducers: Severe hepatotoxicity occurred in 10 of 12 healthy subjects receiving a single dose of LORBRENA with multiple daily doses of rifampin, a strong CYP3A inducer. Grade 4 ALT or AST elevations occurred in 50% of subjects, Grade 3 in 33% of subjects, and Grade 2 in 8% of subjects. Discontinue strong CYP3A inducers for 3 plasma half-lives of the strong CYP3A inducer prior to initiating LORBRENA. Avoid concomitant use of LORBRENA with moderate CYP3A inducers. If concomitant use of moderate CYP3A inducers cannot be avoided, monitor AST, ALT, and bilirubin 48 hours after initiating LORBRENA and at least 3 times during the first week after initiating LORBRENA. Depending upon the relative importance of each drug, discontinue LORBRENA or the CYP3A inducer for persistent Grade 2 or higher hepatotoxicity.

Central Nervous System (CNS) Effects: A broad spectrum of CNS effects can occur. These include seizures, hallucinations, and changes in cognitive function, mood (including suicidal ideation), speech, mental status, and sleep. Withhold and resume at the same or reduced dose or permanently discontinue based on severity.

Hyperlipidemia: Increases in serum cholesterol and triglycerides can occur. Grade 3 or 4 elevations in total cholesterol occurred in 17% and Grade 3 or 4 elevations in triglycerides occurred in 17% of the 332 patients who received LORBRENA. Eighty percent of patients required initiation of lipid-lowering medications, with a median time to onset of start of such medications of 21 days. Initiate or increase the dose of lipid-lowering agents in patients with hyperlipidemia. Monitor serum cholesterol and triglycerides before initiating LORBRENA, 1 and 2 months after initiating LORBRENA, and periodically thereafter. Withhold and resume at same dose for the first occurrence; resume at same or reduced dose of LORBRENA for recurrence based on severity.

Atrioventricular (AV) Block: PR interval prolongation and AV block can occur. In 295 patients who received LORBRENA at a dose of 100 mg orally once daily and who had a baseline electrocardiography (ECG), 1% experienced AV block and 0.3% experienced Grade 3 AV block and underwent pacemaker placement. Monitor ECG prior to initiating LORBRENA and periodically thereafter. Withhold and resume at reduced or same dose in patients who undergo pacemaker placement. Permanently discontinue for recurrence in patients without a pacemaker.

Interstitial Lung Disease (ILD)/Pneumonitis: Severe or life-threatening pulmonary adverse reactions consistent with ILD/pneumonitis can occur. ILD/pneumonitis occurred in 1.5% of patients, including Grade 3 or 4 ILD/pneumonitis in 1.2% of patients. Promptly investigate for ILD/pneumonitis in any patient who presents with worsening of respiratory symptoms indicative of ILD/pneumonitis. Immediately withhold LORBRENA in patients with suspected ILD/pneumonitis. Permanently discontinue LORBRENA for treatment-related ILD/pneumonitis of any severity.

Embryo-fetal Toxicity: LORBRENA can cause fetal harm. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use an effective non-hormonal method of contraception, since LORBRENA can render hormonal contraceptives ineffective, during treatment with LORBRENA and for at least 6 months after the final dose. Advise males with female partners of reproductive potential to use effective contraception during treatment with LORBRENA and for 3 months after the final dose.

Adverse Reactions: Serious adverse reactions occurred in 32% of the 295 patients; the most frequently reported serious adverse reactions were pneumonia (3.4%), dyspnea (2.7%), pyrexia (2%), mental status changes (1.4%), and respiratory failure (1.4%). Fatal adverse reactions occurred in 2.7% of patients and included pneumonia (0.7%), myocardial infarction (0.7%), acute pulmonary edema (0.3%), embolism (0.3%), peripheral artery occlusion (0.3%), and respiratory distress (0.3%). The most common (≥20%) adverse reactions were edema, peripheral neuropathy, cognitive effects, dyspnea, fatigue, weight gain, arthralgia, mood effects, and diarrhea; the most common (≥20%) laboratory abnormalities were hypercholesterolemia, hypertriglyceridemia, anemia, hyperglycemia, increased AST, hypoalbuminemia, increased ALT, increased lipase, and increased alkaline phosphatase.

Drug Interactions: LORBRENA is contraindicated in patients taking strong CYP3A inducers. Avoid concomitant use with moderate CYP3A inducers and strong CYP3A inhibitors. If concomitant use of moderate CYP3A inducers cannot be avoided, monitor ALT, AST, and bilirubin as recommended. If concomitant use with a strong CYP3A inhibitor cannot be avoided, reduce the LORBRENA dose as recommended. Concomitant use of LORBRENA decreases the concentration of CYP3A substrates.

Lactation: Because of the potential for serious adverse reactions in breastfed infants, instruct women not to breastfeed during treatment with LORBRENA and for 7 days after the final dose.

Hepatic Impairment: No dose adjustment is recommended for patients with mild hepatic impairment. The recommended dose of LORBRENA has not been established for patients with moderate or severe hepatic impairment.

Renal Impairment: No dose adjustment is recommended for patients with mild or moderate renal impairment. The recommended dose of LORBRENA has not been established for patients with severe renal impairment.

Please see full prescribing information for LORBRENA in the U.S. here.

About Non-Small Cell Lung Cancer

Lung cancer is the most common cancer worldwide, with more than two million new cases diagnosed globally in 2018.2 About 85 percent of all lung cancers are identified as non-small cell, and approximately 75 percent of these are metastatic, or advanced, at diagnosis.3

ALK gene rearrangement is a genetic alteration that drives the development of lung cancer in some patients.4,5 Epidemiology studies suggest that approximately three to five percent of NSCLC tumors are ALK-positive.6

About Pfizer in Lung Cancer

Pfizer Oncology is committed to addressing the unmet needs of patients with lung cancer, the leading cause of cancer-related deaths worldwide and a particularly difficult-to-treat disease. Pfizer strives to address the diverse and evolving needs of patients with non-small cell lung cancer (NSCLC) by developing efficacious and tolerable therapies, including biomarker-driven therapies and immuno-oncology (IO) agents and combinations. By combining leading scientific insights with a patient-centric approach, Pfizer is continually advancing its work to match the right patient with the right medicine at the right time. Through our growing research pipeline and collaboration efforts, we are committed to delivering renewed hope to patients living with NSCLC.

On May 7, 2019 MorphoSys AG (FSE: MOR; Prime Standard Segment, MDAX & TecDAX; NASDAQ: MOR) reported results for the first quarter of 2019 (Press release, MorphoSys, MAY 7, 2019, View Source [SID1234535831]).

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"We have made a very good start to the year 2019 with significant achievements in our proprietary and partnered programs as well as in our corporate development," said Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. "First of all I am very pleased to announce that MOR208 now has been given an International Nonproprietary Name (INN). From now on MOR208 will be called tafasitamab. This marks another major milestone in the development of the compound and together with the strong build-up of our commercial structures and capabilities in the U.S., we get more and more ready for the planned launch in the U.S. mid of next year, given FDA approval. Rolling submission to the FDA continues according to plan, which could support a potential approval in the U.S. in mid-2020. Furthermore, we are encouraged by discussions we have had with European regulatory authorities on a path to market in Europe based on our L-MIND study. A successful outcome here could result in MOR208 (tafasitamab) being on the market in Europe earlier than previously assumed."

"We also saw encouraging progress in other programs. Our partner I-Mab Biopharma initiated pivotal clinical trials of MOR202 in second and third line multiple myeloma during the first quarter. GSK announced its intention to start a phase 3 study of MOR103/GSK3196165 in rheumatoid arthritis later this year. Also, the clinical development of Janssen’s Tremfya(R), the most important program in our Partnered Discovery segment, was further expanded into ulcerative colitis and familial adenomatous polyposis," Dr. Moroney continued.

"With our solid financial position, MorphoSys is well equipped to execute the plans for our proprietary product development. We are excited to have David Trexler join as president and head of our U.S. based subsidiary. He is building our commercial capabilities for a potential launch of MOR208 (tafasitamab) in the U.S., subject, of course, to FDA approval. The increasing royalty stream from Tremfya(R) product sales will continue to provide strong financial support to our plans to become a fully-fledged biopharmaceutical company," said Jens Holstein, Chief Financial Officer of MorphoSys AG.

Financial Review for Q1 2019 (IFRS)

In Q1 2019, MorphoSys continued to focus on applying its proprietary technology and expertise to the research and development of innovative drug candidates, both for partners and for its own account. Group revenues rose to EUR 13.5 million, compared to EUR 2.8 million in the first quarter of 2018. Revenues for the first quarter of 2019 include EUR 11.0 million for success-based payments received primarily from Janssen and I-Mab (Q1 2018: EUR 1.8 million) including an estimate of royalties on net sales of Tremfya(R) amounting to EUR 6.6 million (royalty report from Janssen for Q1 2019 has not yet been received).

In its Proprietary Development segment, MorphoSys focuses on the research and clinical development of its own drug candidates. In Q1 2019, this segment recorded revenues of EUR 5.8 million (Q1 2018: EUR 0.2 million). The increase was primarily driven by a milestone payment of USD 5.0 million from our partner I-Mab due to the start of the pivotal phase 2 development of MOR202 in Taiwan.

In the Partnered Discovery segment, MorphoSys applies its proprietary technology to the discovery of new drug candidates for pharmaceutical companies, benefiting through R&D funding, licensing fees, success-based milestone payments and royalties. Revenues in the Partnered Discovery segment increased from EUR 2.6 million in Q1 2018 to EUR 7.8 million in Q1 2019.

Total operating expenses reached EUR 37.3 million in the first quarter of 2019 compared to EUR 21.9 million in Q1 2018. The increase is mainly driven by higher R&D, selling and general & administrative expenses and the introduction of cost of sales as new item compared to Q1 2018. In Q1 2019, research and development expenses amounted to EUR 24.7 million, as compared to EUR 17.2 million in the first quarter of 2018. Expenses for proprietary R&D, including technology development amounted to EUR 22.6 million in Q1 2019, compared to EUR 15.5 million in the first quarter of 2018. In the first quarter of 2019, selling expenses amounted to EUR 1.7 million (Q1 2018: EUR 0.8 million). General and administrative expenses increased from EUR 3.9 million in Q1 2018 to EUR 5.9 million in Q1 2019.

Earnings before interest and taxes (EBIT) amounted to EUR -23.6 million in the first quarter of 2019 (Q1 2018: EUR -19.0 million). The Proprietary Development segment reported an EBIT of EUR -25.0 million (Q1 2018: EUR -15.9 million). EBIT in the Partnered Discovery segment was EUR 5.5 million (Q1 2018: EUR 0.6 million). In Q1 2019, the consolidated net loss amounted to EUR -22.7 million (Q1 2018: EUR -19.5 million). The loss per share for the first quarter of 2019 was EUR -0.72 (Q1 2018: EUR -0.67).

At the end of Q1 2019, the Company had EUR 431.2 million in cash, reported on the balance sheet under the line items "cash and cash equivalents"; "financial assets at fair value through profit or loss"; and current and non-current "other financial assets at amortized cost". On December 31, 2018, the Group’s liquidity position amounted to EUR 454.7 million. The number of shares issued totaled 31,839,572 at the end of Q1 2019 (year-end 2018: 31,839,572).

Financial Guidance and Operational Outlook for 2019

For the financial year 2019, MorphoSys continues to expect Group revenues in the range of EUR 43 to 50 million. Expenses for proprietary development and technology development are expected to be in a corridor of EUR 95 to 105 million. The Company confirmed its guidance for earnings before interest and taxes (EBIT) of EUR -127 to -137 million. This guidance does not include a potential larger milestone payment for the start of a phase 3 clinical trial of MOR103/GSK3196165 that could occur in the course of 2019. The guidance also does not include revenues from potential future partnership or licensing agreements for MOR208 (tafasitamab) or any other compound that is in MorphoSys’s proprietary development. Effects from potential in-licensing or co-development deals for new development candidates are also not included in the guidance.

In its Proprietary Development segment, MorphoSys expects the following events and activities in 2019:

MOR208 (tafasitamab)

– L-MIND: Complete data evaluation for primary completion analysis for all 81 patients enrolled under the current study protocol of the fully recruited L-MIND trial in r/r DLBCL and present the data at the upcoming International Conference on Malignant Lymphoma (ICML) in Lugano in June.

– Regulatory: Complete submission of Biologics License Application (BLA) to U.S. FDA for MOR208 (tafasitamab) by year-end and continue interactions with National European Regulatory Authorities to explore possibilities for approval in Europe.

– B-MIND: Continue pivotal phase 3 study evaluating MOR208 (tafasitamab) plus bendamustine versus rituximab plus bendamustine in r/r DLBCL and conduct a pre-planned, event-driven, interim analysis of B-MIND, which is projected to take place in the second half of 2019.

– Regulatory: Planned discussions with the FDA regarding future assay validation procedures to be used in conjunction with the amended B-MIND study.

– COSMOS: Continue phase 2 trial of MOR208 (tafasitamab) plus idelalisib or venetoclax in r/r CLL/SLL and present data towards the end of 2019.

– Front-line DLBCL: Initiate phase 1b trial of MOR208 (tafasitamab) in H2 2019.

– Commercial activities: Continue set-up of commercial capabilities in the U.S. in order to prepare for expected commercialization of MOR208 (tafasitamab), assuming FDA approval.

MOR202

– MorphoSys: Prepare for and start an exploratory clinical trial of MOR202 in an autoimmune indication.

– I-Mab: Continue recently started pivotal development programs of MOR202 in multiple myeloma in the Chinese region.

MOR106

– Together with Galapagos, continue phase 2 intravenous IGUANA study, phase 1 subcutaneous bridging study and the recently started phase 2 GECKO trial towards primary completion under global licensing agreement with Novartis.

– Preparations for a Japanese ethno-bridging study in atopic dermatitis together with Galapagos.

MOR107: Continue preclinical investigation of MOR107 with a focus on oncology indications.

MOR103/GSK3196165: Based on announcements made by GSK earlier this year, the initiation of a phase 3 clinical trial of MOR103/GSK3196165 in rheumatoid arthritis by GSK is expected for the second half of 2019, which would trigger a milestone payment to MorphoSys.

In its Partnered Discovery segment, MorphoSys expects the following events in 2019:

According to information provided on clinicaltrials.gov, by the end of 2019 primary completion may be reached in up to 10 clinical trials in phases 2 and 3 from partners evaluating antibodies made using MorphoSys’s technology. This includes:

– a potentially pivotal phase 2b study by Mereo Pharma in osteogenesis imperfecta (brittle bone syndrome) of the HuCAL antibody setrusumab (BSP804) directed against the target molecule sclerostin (this antibody was generated within the scope of MorphoSys’s partnership with Novartis and subsequently licensed from Novartis to Mereo).

– further phase 3 trials of Tremfya(R) conducted by Janssen in psoriatic arthritis.

Whether, when and to what extent news will be published following the primary completion of trials in the Partnered Discovery segment is at the full discretion of MorphoSys’s partners.

MorphoSys will continue to support its proprietary development activities by evaluating potential in-licensing, co-development, and/or acquisition opportunities or the potential initiation of new proprietary development programs with the goal of maintaining and expanding the Company’s position in its current therapeutic and technological fields of activities.

On May 7, 2019 MannKind Corporation (NASDAQ:MNKD) reported financial results for the quarter ended March 31, 2019 (Press release, Mannkind, MAY 7, 2019, View Source [SID1234535830]).

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"In the first quarter of 2019, we executed against the United Therapeutics License and Collaboration agreement, achieving the first of four milestone payments of $12.5 million. We also continued to grow Afrezza net revenue by 49% compared to 1Q 2018 and we released new clinical data at scientific meetings that continue to differentiate Afrezza from other rapid acting insulins," said Michael Castagna, Chief Executive Officer of MannKind Corporation.

Total revenues were $17.4 million for the first quarter of 2019, reflecting Afrezza net revenue of $5.1 million and collaboration and services revenue of $12.4 million. Afrezza net revenue increased 49% compared to $3.4 million in the first quarter of 2018, primarily driven by higher product demand, a more favorable mix of cartridges and price. Collaboration and services revenue increased $12.4 million, primarily due to the United Therapeutics licensing and research agreements.

Afrezza cost of goods sold was $4.0 million for the first quarters of both 2019 and 2018. Afrezza gross profit for the first quarter of 2019 was $1.1 million, the second consecutive quarter that gross profit was recognized for Afrezza. Afrezza gross profit for the first quarter of 2018 was negative $0.6 million. The increase was primarily driven by higher Afrezza sales.

Research and development expenses for the first quarter of 2019 were $1.7 million compared to $2.6 million for the first quarter of 2018. This 37% decrease was primarily attributable to $0.4 million decreases in both lower clinical trial spending and lower personnel costs.

Selling, general and administrative expenses for the first quarter of 2019 were $25.7 million compared to $20.6 million for the first quarter of 2018. This 25% increase was primarily due to $9.3 million spent on direct-to-consumer television advertising offset by a $1.2 million decrease in personnel costs, a $0.9 million decrease in stock-based compensation expense, and a $0.7 million decrease in professional fees.

Interest expense on notes (facility financing obligation and senior convertible notes) for the first quarter of 2019 was $0.6 million compared to $1.8 million for the first quarter of 2018. This $1.2 million decrease was primarily due to a reduction in debt principal balances.

The net loss for the first quarter of 2019 was $14.9 million, or $0.08 per share compared to a $30.4 million net loss in the first quarter of 2018 or $0.25 per share. The lower net loss is mainly attributable to a $14.0 million increase in total revenues.

Cash, cash equivalents, restricted cash, and short-term investments at March 31, 2019 was $59.8 million compared to $71.7 million at December 31, 2018. The decrease was primarily due to net cash used in operating activities of $11.6 million in the first quarter of 2019, which included the receipt of a $12.5 million milestone payment from United Therapeutics.

Conference Call

MannKind will host a conference call and presentation webcast to discuss these results today at 9:00 a.m. Eastern Time. To participate in the live call by telephone, please dial (800) 289-0438 or (323) 794-2423 and use the participant passcode: 6329706. Those interested in listening to the conference call live via the Internet may do so by visiting the Company’s website at View Source under News & Events.

A telephone replay of the call will be accessible for approximately 14 days following completion of the call by dialing (844) 512-2921 or (412) 317-6671 and use the participant passcode: 6329706#. A replay will also be available on MannKind’s website for 14 days.

On May 7, 2019 Kezar Life Sciences, Inc. (Nasdaq: KZR), a clinical-stage biotechnology company discovering and developing novel small molecule therapeutics to treat unmet needs in autoimmunity and cancer, reported its first quarter 2019 financial results and corporate highlights (Press release, Kezar Life Sciences, MAY 7, 2019, View Source [SID1234535829]).

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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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"The entire team at Kezar is excited to build on last year’s momentum and advance both of our programs in 2019," said John Fowler, Kezar’s Chief Executive Officer. "Our strategy of evaluating KZR-616 in Phase 2 trials across multiple autoimmune indications is underway, building our case around the broad therapeutic potential of immunoproteasome inhibition. Pursuant to that goal, we look forward to reporting the first in patient data for KZR-616 at a major medical conference later this quarter. In addition, our novel protein secretion program continues to progress, with our first oncology clinical candidate anticipated to be selected this year."

First Quarter and Recent Clinical and Business Highlights

The United States Food and Drug Administration (FDA) accepted an IND for KZR-616 for the treatment of AIHA and ITP. A Phase 2 trial for these indications in addition to a Phase 2 trial in DM and PM are anticipated to begin 2H 2019.

Our SLE and LN program is advancing with enrollment continuing in the open-label dose escalation Phase 1b portion in SLE patients. We expect to report data from the first two cohorts of this portion at a major medical conference later this quarter in addition to initiating the Phase 2 portion of the trial in patients with active, proliferative LN.

Our protein secretion program (Sec61 translocon modulation) was showcased in two poster presentations at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) in Atlanta, GA on April 2,

2019. We remain on track to nominate a first clinical candidate in oncology before the end of the year.

In April of this year, we continued to strengthen the depth and breadth of our management team with the appointment of Mark Schiller as Vice President of Legal Affairs.

Financial Results

Cash, cash equivalents and marketable securities totaled $101.1 million as of March 31, 2019, compared to $107.4 million as of December 31, 2018. The decrease in cash, cash equivalents and marketable securities was primarily attributable to cash used by the Company in operations to advance its clinical stage programs as well as preclinical research and development.

Research and development expenses for the first quarter of 2019 increased by $2.3 million to $5.9 million from $3.6 million in the first quarter of 2018. This increase was primarily related to advancing both the KZR-616 clinical program across indications and the protein secretion preclinical program.

General and administrative expenses for the first quarter of 2019 increased by $0.9 million to $2.4 million from $1.5 million in the first quarter of 2018. The increase was primarily due to an increase in stock-based compensation, personnel expenses, and costs related to operating as a public company.

Net loss for the first quarter of 2019 was $7.6 million, or $0.40 per basic and diluted common share, compared to a net loss of $4.9 million, or $6.53 per basic and diluted common share, for the first quarter of 2018.

Total shares outstanding were 19.1 million as of March 31, 2019. Additionally, there were 2.8 million outstanding options granted to purchase common stock at a $7.73 weighted average exercise price as of March 31, 2019.

About KZR-616

KZR-616 is a novel, first-in-class, selective immunoproteasome inhibitor with broad therapeutic potential across multiple autoimmune diseases. Nonclinical research demonstrates that selective immunoproteasome inhibition results in a broad anti-inflammatory response in animal models of several autoimmune diseases, while avoiding immunosuppression. Phase 1a clinical trial results in healthy volunteers provide evidence that KZR-616 potentially avoids adverse effects caused by currently marketed non-selective proteasome inhibitors, which we believe prevent them from being utilized as a chronic treatment in autoimmune disorders. A Phase 1b trial in systemic lupus erythematosus (SLE) is currently underway, with a Phase 2 trial in lupus nephritis (LN) expected to initiate during the second quarter of 2019. Phase 2 trials in dermatomyositis (DM), polymyositis (PM), autoimmune hemolytic anemia (AIHA), and immune thrombocytopenia (ITP) are expected to commence the second half of 2019.