On November 7, 2019 AbbVie Inc. (NYSE:ABBV) ("AbbVie") reported that the requisite number of consents have been received to adopt certain proposed amendments (the "Amendments") with respect to all outstanding notes of certain series issued by Allergan Finance, LLC ("Allergan Finance"), Allergan, Inc. ("Allergan Inc"), Allergan Sales, LLC ("Allergan Sales") and Allergan Funding SCS ("Allergan Funding" and, together with Allergan Finance, Allergan Inc and Allergan Sales, "Allergan") (Press release, AbbVie, NOV 7, 2019, View Source [SID1234550723]). The results are based on (i) early tenders in the offers to exchange (each an Exchange Offer" and, collectively, the "Exchange Offers") any and all Allergan Notes (as defined below) for new notes to be issued by AbbVie (the "AbbVie Notes") and (ii) early delivery of consents in the related consent solicitations (each, a "Consent Solicitation" and, collectively, the "Consent Solicitations") being made by AbbVie on behalf of Allergan to adopt the Amendments to each of the indentures (each, an "Allergan Indenture") governing the Allergan Notes.

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The applicable Allergan obligors have executed a supplemental indenture with respect to each Allergan Indenture implementing the Amendments. The Amendments will become operative only upon settlement of the Exchange Offers. The settlement date is expected to occur promptly after the Expiration Date (as defined below), which is expected to be on or about the closing date of AbbVie’s previously announced proposed acquisition of Allergan (the "Acquisition").

As of 5:00 p.m., New York City time, on November 7, 2019 (the "Early Participation Date"), the principal amounts of Allergan Notes set forth in the table below were validly tendered and not validly withdrawn (and consents thereby validly given and not validly revoked). For each $1,000 principal amount of Allergan USD Notes (as defined below) or €1,000 principal amount of Allergan Euro Notes (as defined below) validly tendered and not validly withdrawn at or prior to the Early Participation Date, eligible holders will be eligible to receive an early participation payment of $1.00 or €1.00, as applicable, in cash (the "Early Participation Payment"). The Early Participation Payment will be paid on the settlement date for the Exchange Offers to the noteholder of record on the Early Participation Date, even if such noteholder is no longer the noteholder of record of such Allergan Notes on the settlement date. In addition, for each $1,000 principal amount of Allergan USD Notes or €1,000 principal amount of Allergan Euro Notes validly tendered and not validly withdrawn prior to the Expiration Date, eligible holders will be eligible to receive $1,000 principal amount of the AbbVie USD Notes of the applicable series or €1,000 principal amount of the AbbVie Euro Notes of the applicable series, as applicable (the "Exchange Consideration"). The total consideration consists of (a) the Exchange Consideration plus (b) the Early Participation Payment (collectively, the "Total Consideration").

After the Early Participation Date, tendered Allergan Notes may be withdrawn. However, to be eligible to receive the Exchange Consideration component of the Total Consideration, such withdrawn Allergan Notes must be validly re-tendered and not validly withdrawn at or prior to the Expiration Date. A valid withdrawal of the tendered Allergan Notes will not be deemed a revocation of the related consents and such consents will continue to be deemed delivered.

The Exchange Offers and Consent Solicitations are being made pursuant to the terms and subject to the conditions set forth in the confidential offering memorandum and consent solicitation statement, dated October 25, 2019, and the related letter of transmittal (collectively, the "Offering Documents"), and are conditioned upon the closing of the Acquisition, which condition may not be waived by AbbVie, and certain other conditions that may be waived by AbbVie.

Each Exchange Offer will expire at 11:59 p.m., New York City time, on November 22, 2019 (as the same may be extended, the "Expiration Date"), unless terminated. Each Consent Solicitation expired at the Early Participation Date. The settlement date for the Exchange Offers is expected to occur promptly after the Expiration Date and the Expiration Date of each of the Exchange Offers is expected to be extended to occur on or about the closing date of the Acquisition, which is expected to occur in early 2020. As a result, the Expiration Date may be extended one or more times. AbbVie currently anticipates providing notice of any such extension in advance of the Expiration Date.

In this news release, references to the "Allergan Euro Notes" collectively refer to (i) the Floating Rate Notes due 2020 issued by Allergan Funding, (ii) the 0.500% Senior Notes due 2021 issued by Allergan Funding, (iii) the 1.500% Senior Notes due 2023 issued by Allergan Funding, (iv) the 1.250% Senior Notes due 2024 issued by Allergan Funding, (v) the 2.625% Senior Notes due 2028 issued by Allergan Funding and (vi) the 2.125% Senior Notes due 2029 issued by Allergan Funding. References to the "Allergan USD Notes" collectively refer to (i) the 3.375% Senior Notes due 2020 issued by Allergan Inc, (ii) the 4.875% Senior Notes due 2021 issued by Allergan Sales, (iii) the 5.000% Senior Notes due 2021 issued by Allergan Sales, (iv) the 3.450% Senior Notes due 2022 issued by Allergan Funding, (v) the 3.250% Senior Notes due 2022 issued by Allergan Finance, (vi) the 2.800% Senior Notes due 2023 issued by Allergan Inc, (vii) the 3.850% Senior Notes due 2024 issued by Allergan Funding, (viii) the 3.800% Senior Notes due 2025 issued by Allergan Funding, (ix) the 4.550% Senior Notes due 2035 issued by Allergan Funding, (x) the 4.625% Senior Notes due 2042 issued by Allergan Finance, (xi) the 4.850% Senior Notes due 2044 issued by Allergan Funding and (xii) the 4.750% senior notes due 2045 issued by Allergan Funding. The Allergan USD Notes and the Allergan Euro Notes are referred to herein collectively as the "Allergan Notes."

Documents relating to the Exchange Offers and Consent Solicitations will only be distributed to eligible holders of Allergan Notes who complete and return an eligibility form confirming that they are either a "qualified institutional buyer" as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), or not a "U.S. person" and outside the United States within the meaning of Regulation S under the Securities Act. The complete terms and conditions of the Exchange Offers and Consent Solicitations are described in the Offering Documents, copies of which may be obtained by contacting Global Bondholder Services Corporation, the exchange agent and information agent in connection with the Exchange Offers and Consent Solicitations, at (866) 470-3900 (U.S. toll-free) or (212) 430-3774 (banks and brokers). The eligibility form is available electronically at: View Source Holders of Allergan Notes that are not eligible holders will not be able to receive such documents, but AbbVie will make alternative arrangements available, subject to applicable law. Such holders should contact Global Bondholder Services Corporation to receive information about arrangements available to them.

This news release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation or sale would be unlawful. The Exchange Offers and Consent Solicitations are being made solely pursuant to the Offering Documents and only to such persons and in such jurisdictions as are permitted under applicable law.

The AbbVie Notes offered in the Exchange Offers have not been registered under the Securities Act or any state securities laws. Therefore, the AbbVie Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.

On November 7, 2019 Aldeyra Therapeutics, Inc. (Nasdaq: ALDX) (Aldeyra), a biotechnology company devoted to developing and commercializing next-generation medicines to improve the lives of patients with immune-mediated diseases, reported financial results for the quarter ended September 30, 2019 (Press release, Aldeyra Therapeutics, NOV 7, 2019, View Source [SID1234550722]). In addition, the company updated investors on anticipated clinical milestones.

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"Aldeyra continued to make significant progress during the quarter in advancing our immunology platform toward the goal of reducing the burden of disease and helping patients lead healthier lives," said Aldeyra President and CEO Todd C. Brady, M.D., Ph.D. "We have reached agreement with the U.S. Food and Drug Administration (FDA) on the primary endpoint for our pivotal INVIGORATE Phase 3 clinical trial of reproxalap in allergic conjunctivitis. In addition, this quarter we expect to complete Part 1 of our adaptive RENEW Phase 3 clinical trial of reproxalap in dry eye disease, and initiate the first part of our adaptive GUARD Phase 3 clinical trial in proliferative vitreoretinopathy, representing the expansion of our ocular program from the front of the eye to the retina."

Clinical Milestone Updates

Dry Eye Disease: Part 1 of Adaptive RENEW Phase 3 Clinical Trial Scheduled for Completion in the Fourth Quarter of 2019. Part 1 of the two-part adaptive RENEW Phase 3 dry eye disease clinical trial of topical ocular reproxalap, the company’s lead reactive aldehyde species (RASP) inhibitor, is scheduled for completion in the fourth quarter of 2019, at which point Aldeyra plans to announce the endpoints, dosing regimen, and sample size planned for Part 2 of the trial. Dry eye disease affects more than 34 million adults in the U.S., and physicians and patients generally regard current therapeutic options as inadequate.

Allergic Conjunctivitis: INVIGORATE Phase 3 Clinical Trial Scheduled to Initiate in the First Half of 2020. Aldeyra recently released expanded data from the completed allergen chamber clinical methods trial of topical ocular reproxalap and announced the design of the INVIGORATE Phase 3 clinical trial, which is expected to initiate in the first half of 2020. The primary endpoint of INVIGORATE is statistical significance versus vehicle in ocular itch (0-4 scale) at a majority of 11 time points between 110 and 210 minutes after chamber entry. In October, the company presented the results of the ALLEVIATE Phase 3 clinical trial in allergic conjunctivitis at the American Academy of Ophthalmology Annual Meeting in San Francisco. ALLEVIATE met the primary endpoint of reduction of ocular itch versus vehicle following conjunctival allergen challenge. Of the estimated 100 million allergic conjunctivitis sufferers in the U.S., up to 30 million do not respond adequately to, or are dissatisfied with, antihistamines.

Proliferative Vitreoretinopathy: Part 1 of the Adaptive GUARD Phase 3 Clinical Trial Scheduled to Initiate in the Fourth Quarter of 2019. Patient enrollment in Part 1 of the adaptive GUARD Phase 3 Clinical Trial of ADX-2191 is expected to begin in the fourth quarter of 2019. GUARD will compare recurrence rates across patients treated with ADX-2191 or standard of care following surgical repair of retinal detachment due to proliferative vitreoretinopathy (PVR). In September, the FDA granted fast track designation to ADX-2191 for the prevention of PVR, a rare inflammatory disorder of the retina that leads to severe retinal scarring and blindness. There is no approved therapy for PVR. More than 50% of PVR cases result in severe uncorrectable vision loss, and 76% of patients suffer from at least moderate uncorrectable vision loss.

Systemic Autoimmune Disease: ADX-629 Phase 1 Clinical Trial Initiated. Patient enrollment is underway in the Phase 1 clinical trial of ADX-629, a novel orally administered RASP inhibitor in development for the treatment of systemic autoimmune disease and potentially other serious medical conditions.

Post-transplant Lymphoproliferative Syndrome: Phase 2 Clinical Trial of ADX-1612 Scheduled to Initiate in the Fourth Quarter of 2019. The Phase 2 clinical trial of ADX-1612, Aldeyra’s lead chaperome inhibitor, is slated to start in the fourth quarter of 2019 in patients with post-transplant lymphoproliferative syndrome, a rare and potentially fatal immunological disease that can occur following solid organ transplant.

Outlook

"We expect our clinical momentum to accelerate as we move through the fourth quarter of this year and into 2020," Dr. Brady said. "We believe that reproxalap has the potential to be the next novel entrant in dry eye disease and allergic conjunctivitis, part of a spectrum of conditions estimated to affect more than four in ten Americans. Our ocular programs represent the initial step of our mission to develop therapies for a broad category of systemic immune-mediated diseases."

Quarter Ended September 30, 2019 Financial Review

For the quarter ended September 30, 2019, Aldeyra reported a net loss of approximately $18.7 million, compared with a net loss of approximately $10.8 million for the quarter ended September 30, 2018. Basic and diluted net loss per share was $0.69 for the quarter ended September 30, 2019, compared with $0.52 per share for the same period in 2018. Losses resulted from the costs of research and development programs, as well as from general and administrative expenses.

Research and development expenses were $16.2 million for the quarter ended September 30, 2019, compared with $7.9 million for the same period in 2018. The increase of $8.3 million is primarily related to an increase in clinical and preclinical development and manufacturing costs; an increase in personnel costs; and non-cash compensation costs related to a portion of upfront acquisition consideration that is subject to vesting based on continued service.

General and administrative expenses were $2.8 million for the quarter ended September 30, 2019, compared with $3.1 million for the quarter ended September 30, 2018. The decrease of $0.3 million is primarily related to lower consulting costs.

For the quarter ended September 30, 2019, total operating expenses were approximately $19.0 million, compared with total operating expenses of approximately $10.9 million for the same period in 2018.

As of September 30, 2019, cash, cash equivalents, and marketable securities were $76.2 million, which includes $15.0 million drawn from the company’s debt facility in September 2019.

Conference Call & Webcast Information

Aldeyra will host a conference call today at 8:00 a.m. ET to discuss its third-quarter financial results and provide a corporate update. The dial-in numbers are 1-866-211-4098 for domestic callers and 1-647-689-6613 for international callers. The conference ID number for the live call will be 9487086.

A live webcast of the conference call will also be available on the Investors Relations section of the Aldeyra Therapeutics website at View Source After the live webcast, the event will remain archived on the Aldeyra Therapeutics website for one year.

On November 7, 2019 Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX), reported financial results and provided a business update for the three months ended September 30, 2019 (Press release, Lexicon Pharmaceuticals, NOV 7, 2019, View Source;2019.htm [SID1234550721]).

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"We continue to make good progress on our XERMELO business, with XERMELO net sales growing more than 30% in the third quarter of 2019 versus the same period in 2018," said Lonnel Coats, Lexicon’s president and chief executive officer. "We now have full rights for Zynquista. We expect to complete the core Phase 3 studies in type 2 diabetes in the near term and anticipate being in a position to file for regulatory approval for that indication in the U.S. and in Europe in the first half of 2020. We continue to have productive dialogue with the FDA on a path forward for Zynquista in type 1 diabetes in the U.S."

Third Quarter Product and Pipeline Highlights

XERMELO (telotristat ethyl)

XERMELO U.S. net sales were $8.4 million in the third quarter of 2019.

The Telotristat Ethyl for Advanced Biliary Tract Cancer, or TELE-ABC, study, a Phase 2a clinical study of telotristat ethyl in patients with biliary tract cancer, continues to enroll patients.

Zynquista (sotagliflozin)

In September, Lexicon and Sanofi terminated their alliance for the development and commercialization of sotagliflozin. In connection with the termination, Lexicon regained all rights to sotagliflozin and assumed full responsibility for the worldwide development and commercialization of sotagliflozin in both type 1 and type 2 diabetes. Under the terms of the settlement, Sanofi will pay Lexicon $260 million, of which $208 million was paid in September and the remainder is payable within twelve months. Sanofi continues to coordinate with Lexicon in the transition of responsibility for ongoing clinical studies and other activities.

Clinical data for sotagliflozin were highlighted in two oral presentations at the European Association for the Study of Diabetes (EASD) 55th annual meeting (September 16-20; Barcelona, Spain), demonstrating the effect of sotagliflozin on body weight and composition in adults with type 1 diabetes. In addition, five posters were presented, detailing the reductions in glucose variability and risk for hyperglycemia in adults with type 1 diabetes treated with sotagliflozin alone, improved treatment satisfaction in patients with type 1 diabetes treated with sotagliflozin and insulin versus insulin alone, lower rates of clinically relevant hypoglycemic events at any A1C level at 52 weeks in adults with type 1 diabetes, the positive impact of sotagliflozin on renal function, albuminuria and blood pressure in adults with type 1 diabetes and the reduction in markers of arterial stiffness in patients with type 1 diabetes.

In September, a post-hoc analysis of hypoglycemia as a function of A1C in patients with type 1 diabetes receiving sotagliflozin or placebo in combination with optimized insulin therapy was published in Diabetes Technology and Therapeutics. The pooled analysis from inTandem1 and inTandem2 trials showed that at 52 weeks, level 1 and 2 hypoglycemia events were 22% to 30% less frequent with sotagliflozin added to optimized insulin therapy versus placebo in adults with type 1 diabetes at any A1C level, with greater differences at lower A1C values.

In August, 52-week cardiorenal results from a pooled analysis from the inTandem1 and inTandem2 studies of sotagliflozin in adults with type 1 diabetes were published in Diabetes Care. Sotagliflozin demonstrated changes in clinical biomarkers such as estimated glomerular filtration rate (eGFR), hematocrit, serum albumin, uric acid, systolic blood pressure and urinary albumin-to-creatinine ratio (UACR) that suggest sotagliflozin may reduce cardiovascular risk and progression of chronic kidney disease. Sotagliflozin was associated with short- and long-

term renal hemodynamic changes. After cessation of 52 weeks of therapy, eGFR was comparable to baseline and significantly higher than placebo in sotagliflozin-treated patients.

In July, Lexicon announced the preliminary topline results received from Sanofi from SOTA-MET, SOTA-CKD3 and SOTA-CKD4, the first three of a total of nine clinical trials included in the core Phase 3 development program for sotagliflozin in type 2 diabetes.

Third Quarter 2019 Financial Highlights

Revenues: Revenues for the three months ended September 30, 2019 increased to $294.4 million from $7.0 million for the corresponding period in 2018, primarily due to an increase of collaborative revenues of $260 million from the termination of the alliance with Sanofi and recognition of the remaining amount of $23.5 million allocated to performance obligations from the initial agreement with Sanofi and an increase in net product revenue. Net product revenues for the three months ended September 30, 2019 consisted of $8.4 million from net sales of XERMELO in the U.S., which were up 33% from the prior year quarter.

Cost of Sales: Cost of sales related to sales of XERMELO for each of the three months ended September 30, 2019 and 2018 was $0.6 million.

Research and Development (R&D) Expenses: Research and development expenses for the three months ended September 30, 2019 increased to $26.7 million from $13.8 million for the corresponding period in 2018, primarily due to an increase in external clinical development costs related to sotagliflozin subsequent to the termination of the alliance with Sanofi, in which Lexicon regained the rights and responsibilities for development and commercialization for sotagliflozin.

Selling, General and Administrative (SG&A) Expenses: Selling, general and administrative expenses for the three months ended September 30, 2019 decreased to $13.9 million from $15.6 million for the corresponding period in 2018, primarily due to decreased marketing costs.

Impairment Loss on Intangible Asset: An impairment loss for the three months ended September 30, 2019 of $28.6 million was recognized to an indefinite lived intangible asset associated with Lexicon’s 2010 acquisition of Symphony Icon, due to the decision to terminate research and development activities related to a program for irritable bowel syndrome that was among the assets acquired.

Income Tax Benefit: An income tax benefit of $6.0 million for the three months ended September 30, 2019 was recognized in connection with the impairment loss on the indefinite lived intangible asset, which resulted in a decrease to the deferred tax liability and created an income tax benefit.

Net Income (Loss): Net income for the three months ended September 30, 2019 was $226.1 million, or $1.95 per diluted share, as compared to a net loss of $27.4 million, or a loss of $0.26 per share, in the corresponding period in 2018. For the three months ended September 30, 2019 and 2018, net income included non-cash, stock-based compensation expense of $3.6 million and $2.9 million, respectively.

Cash and Investments: As of September 30, 2019, Lexicon had $296.3 million in cash and investments, as compared to $160.1 million as of December 31, 2018. The cash position as of September 30, 2019 includes proceeds of $208 million in connection with the termination of the alliance with Sanofi.

Anticipated Near-Term Milestones

Q4 2019 – Topline Phase 1 data for LX9211
•
Q4 2019 / early 2020 – Topline results from core Phase 3 studies for sotagliflozin in type 2 diabetes

Q4 2019 – Completion of patient enrollment of the initial safety cohort in the Phase 2 study of telotristat ethyl in biliary tract cancer

Conference Call and Webcast Information

Lexicon management will hold a live conference call and webcast today at 8:00 am EST / 7:00 am CST to review its financial and operating results and to provide a general business update. The dial-in number for the conference call is 888-645-5785 (U.S./Canada) or 970-300-1531 (international). The conference ID for all callers is 8189178. The live webcast and replay may be accessed by visiting Lexicon’s website at www.lexpharma.com/investors. An archived version of the webcast will be available on the website for 14 days.

About XERMELO (telotristat ethyl)

Discovered using Lexicon’s unique approach to gene science, XERMELO (telotristat ethyl) is the first and only approved oral therapy for carcinoid syndrome diarrhea. XERMELO targets tryptophan hydroxylase, an enzyme that mediates the excess serotonin production within metastatic neuroendocrine tumor (mNET) cells. XERMELO is approved in the United States, the European Union and certain additional countries for the treatment of carcinoid syndrome diarrhea in combination with somatostatin analog (SSA) therapy in adults inadequately controlled by SSA therapy. Carcinoid syndrome is a rare condition that occurs in patients living with mNETs and is characterized by frequent and debilitating diarrhea. XERMELO targets the overproduction of serotonin inside mNET cells, providing an additional treatment option for patients suffering from carcinoid syndrome diarrhea.

Lexicon has granted Ipsen an exclusive royalty-bearing right and license to commercialize XERMELO outside of the United States and Japan. We are commercializing XERMELO in the United States and Ipsen is commercializing XERMELO in multiple countries, including the United Kingdom and Germany.

XERMELO (telotristat ethyl) Important Safety Information

Warnings and Precautions: XERMELO may cause constipation, which can be serious. Monitor for signs and symptoms of constipation and/or severe, persistent, or worsening abdominal pain in patients taking XERMELO. Discontinue XERMELO if severe constipation or severe, persistent, or worsening abdominal pain develops.

Adverse Reactions: The most common adverse reactions (≥5%) include nausea, headache, increased gamma-glutamyl-transferase, depression, flatulence, decreased appetite, peripheral edema, and pyrexia

Drug Interactions: If necessary, consider increasing the dose of concomitant CYP3A4 substrates, as XERMELO may decrease their systemic exposure. If combination treatment with XERMELO and short-acting octreotide is needed, administer short-acting octreotide at least 30 minutes after administering XERMELO.

For more information about XERMELO, see Full Prescribing Information at www.xermelo.com.

About Zynquista (sotagliflozin)

Discovered using Lexicon’s unique approach to gene science, Zynquista is an oral dual inhibitor of two proteins responsible for glucose regulation known as sodium-glucose co-transporter types 1 and 2 (SGLT1 and SGLT2). SGLT1 is responsible for glucose absorption in the gastrointestinal tract, and SGLT2 is responsible for glucose reabsorption by the kidney. Zynquista is approved in the European Union (EU) for use as an adjunct to insulin therapy to improve blood sugar (glycemic) control in adults with type 1 diabetes with a body mass index ≥ 27 kg/m2, who could not achieve adequate glycemic control despite optimal insulin therapy. Outside of such approval, Zynquista is investigational and has not been approved by any other regulatory authority for type 1 or type 2 diabetes.

On November 7, 2019 Athenex, Inc. (NASDAQ: ATNX), a global biopharmaceutical company dedicated to the discovery, development and commercialization of novel therapies for the treatment of cancer and related conditions, reported its financial results and business highlights for the third quarter of 2019 (Press release, Athenex, NOV 7, 2019, View Source [SID1234550720]).

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"We continue to make strong progress across the board, bringing us closer to our goal of becoming a fully integrated global pharma company," stated Dr. Johnson Lau, Chief Executive Officer and Chairman of Athenex. "We have several major catalysts upcoming, including two anticipated NDA submissions. We are also scheduled to deliver an oral presentation to discuss the Phase III data for Oral Paclitaxel in metastatic breast cancer at the San Antonio Breast Cancer Symposium in December. We have been strategic in building out and integrating our clinical and manufacturing operations in order to maximize the commercial opportunities of our rapidly advancing pipeline. We believe we are in a strong position to develop multiple, potentially successful therapies in the future."

Mr. Jeffrey Yordon, Chief Operating Officer of Athenex, commented, "We are continually optimizing our commercial infrastructure, developing the market, and building awareness of our Athenex Oncology brand in anticipation of commercial launch of Oral Paclitaxel. We have finalized our staffing and organizational plan, and intend to make additional key hires next year, including medical science liaisons and regional sales leaders, with the full sales team expected to come on board in the months leading up to potential approval. In addition to late-stage pipeline progress, we once again achieved strong revenue growth for our existing commercial business. We plan to continue launching additional products in the remainder of 2019 and into next year."

Third Quarter 2019 and Recent Business Highlights:

Clinical Programs:

Phase III Study of Oral Paclitaxel and Encequidar for Metastatic Breast Cancer

Study met primary endpoint showing statistically significant improvement in overall response rate for oral paclitaxel and encequidar ("Oral Paclitaxel") compared to IV paclitaxel.

Strong trend in progression-free survival (PFS) and overall survival (OS) of Oral Paclitaxel compared to IV paclitaxel.

Proportion of confirmed responders with duration of response >150 days was 2.5 times higher for Oral Paclitaxel than IV paclitaxel.

Neuropathy was less frequent with Oral Paclitaxel compared to IV paclitaxel.

Planning to meet with the FDA and present data at SABCS.

Other Oral Paclitaxel Developments

European Commission granted orphan designations for paclitaxel and for encequidar for the treatment of soft tissue sarcoma.

Presented three posters at European Society for Medical Oncology Congress 2019 demonstrating the results from clinical studies of Oral Paclitaxel for patients with a number of advanced solid tumor types as well as in combination with ramucirumab, an anti-VEGFR2 antibody therapy.

Tirbanibulin Ointment for Actinic Keratosis (AK)

Partner Almirall announced a progress update on the program, including AK recurrence rates in those patients who had complete clearance at the primary evaluation endpoint on day 57 and who were followed quarterly in the 12-month extension period.

Athenex completed pre-NDA consultation with the FDA.

Partner Almirall reiterated its expectations for launch of tirbanibulin ointment in the US and Europe in Q1 2021 and Q2 2021, respectively.

Phase I Clinical Study of KX2-361 Oral

Partner Xiangxue Pharmaceutical initiated a Phase I study in China. KX2-361 is the second compound derived from Athenex’s Src kinase inhibition platform, for the treatment of glioblastoma multiforme.

Corporate Announcements:

Appointed Daniel Lang, MD, as President of Axis Therapeutics Limited (Axis) and Senior Director of Corporate Development at Athenex.

Completed construction of new API (active pharmaceutical ingredients) facility in Chongqing, China.

The 440,000-square-foot facility is expected to commence operations in the first half of 2020.

The construction of the facility is part of Athenex’s strategy for vertical integration to capture value across the supply chain.

Commercial Business:

Athenex Pharmaceutical Division (APD) currently markets a total of 31 products with 59 SKUs.

Athenex Pharma Solutions (APS) currently markets 5 products with 13 SKUs.

Goal is to launch 3-5 products in the remainder of 2019.

Financial Results for the Quarter Ended September 30, 2019

Product sales for the three months ended September 30, 2019 were $19.2 million, compared with $13.3 million for the three months ended September 30, 2018, an increase of $5.9 million or 45%. This increase was primarily attributable to an increase in specialty product revenue and 503B revenue of $4.7 million and $2.5 million, respectively. The licensing fees and consulting revenue recorded in the three months ended September 30, 2018 primarily related to our tirbanibulin license agreement with Almirall.

Cost of sales for the three months ended September 30, 2019 totaled $17.1 million, an increase of $5.1 million, or 43%, as compared to $12.0 million for the three months ended September 30, 2018. The increase in cost of sales was in line with the increase in product sales.

Research and development expenses for the three months ended September 30, 2019 were $19.6 million as compared to $51.2 million for the three months ended September 30, 2018. This was primarily due to a decrease in licensing fees, product development, clinical operations, and R&D related compensation. The licensing fee decrease mainly resulted from a $29.5 million non-cash license fee related to the license of TCR-T technology in connection with the establishment of Axis, recorded in the third quarter of 2018 and which did not recur. The decrease in R&D expenses was offset primarily by an increase in preclinical development costs related to the Arginine Deprivation Therapy and TCR-T Immunotherapy platforms.

Selling, general and administrative expenses for the three months ended September 30, 2019 totaled $16.3 million, compared to $11.5 million for the three months ended September 30, 2018. This was primarily due to an increase in costs of preparing to commercialize our proprietary drugs, if approved, and an increase in general administrative expenses including legal fees and other professional service fees. Administrative-related compensation expense remained consistent with the prior year.

Net loss attributable to Athenex for the three months ended September 30, 2019 was $34.8 million, or ($0.45) per diluted share, compared to a net loss of $46.2 million, or ($0.70) per diluted share, in the same period last year.

The Company received a $20 million milestone payment from Almirall during the second quarter of 2019 in connection with the partnership on tirbanibulin and expects this payment to be recorded as revenue in the fourth quarter of 2019.

At September 30, 2019, the Company had cash, cash equivalents, restricted cash and short-term investments of $129.2 million, compared to $107.4 million at December 31, 2018. Based on the current operating plan, we expect that our cash, cash equivalents, and restricted cash as of September 30, 2019, together with cash to be generated from our operating activities, will enable us to fund our operations into the third quarter of 2020.

Financial Results for the Nine Months Ended September 30, 2019

Product sales increased to $66.4 million for the nine months ended September 30, 2019, from $37.4 million for the nine months ended September 30, 2018.

Total revenue for the nine months ended September 30, 2019 decreased by $1.0 million, to $66.9 million, as compared to $67.8 million for the nine months ended September 30, 2018. The decrease was primarily due to $30.0 million related to license milestone revenue earned during 2018, and $2.3 million decrease in medical device product sales and contract manufacturing revenue, offset by a $15.2 million increase in specialty product sales, a $13.4 million increase in 503B sales, and a $2.7 million increase in sales of API. Revenue from 503B and API sales is expected to decline for the remainder of the year as we ceased sales of vasopressin in August 2019 and suspended production of API in the second quarter of 2019.

Cost of sales for the nine months ended September 30, 2019 totaled $53.9 million, an increase of $21.2 million, or 65%, as compared to $32.7 million for the nine months ended September 30, 2018. This was primarily due to the increase of $16.9 million in cost of sales from the sale of specialty products and $4.3 million in cost of sales from 503B and API products. The increase in cost of sales was lower than that in product sales, primarily as a result of changes in our product portfolio.

Research and development expenses for the nine months ended September 30, 2019 totaled $62.6 million, as compared to $99.1 million for the nine months ended September 30, 2018. This was primarily due to a decrease in licensing fees, as well as expenses in relation to clinical operations and product development, partially offset by an increase in preclinical development costs related to the Arginine Deprivation Therapy and TCR-T Immunotherapy platforms, and an increase of R&D related compensation expense.

Selling, general and administrative expenses for the nine months ended September 30, 2019 totaled $48.6 million, as compared to $37.4 million for the nine months ended September 30, 2018. This was primarily due to an increase related to the costs of preparing to commercialize our proprietary drugs, if approved, and an increase in general administrative expenses including legal fees and other professional service fees, partially offset by a decrease of in administrative related compensation expense.

Net loss attributable to Athenex for the nine months ended September 30, 2019 was $102.0 million, or ($1.41) per diluted share, compared to a net loss of $90.3 million, or ($1.42) per diluted share, in the same period last year.

Outlook and Upcoming Milestones:

Oral presentation of Phase III results for Oral Paclitaxel at the San Antonio Breast Cancer Symposium (December 13, 2019)

Expect to submit an NDA for tirbanibulin ointment in actinic keratosis (Q1 2020)

Expect to submit an NDA for Oral Paclitaxel in metastatic breast cancer (Q1 2020)

Raising Financial Guidance:

Athenex provides revenue guidance for product sales only. The Company is raising its product sales guidance for the full year 2019 to an increase of 35% to 40% year-over-year from $56.4 million in 2018, versus prior guidance of 30% to 35% year-over-year. This new revenue guidance has taken into account our discontinuation of vasopressin sales and the suspension of operations at our Taihao API plant. The revenue guidance excludes license and collaboration fees.

Conference Call and Webcast Information:

The Company will host a conference call and live audio webcast today, Thursday, November 7, 2019, at 8:00am Eastern Time to discuss the financial results and provide a business update.

To participate in the call, dial 877-407-0784 (domestic) or 201-689-8560 (international) fifteen minutes before the conference call begins and reference the conference passcode 13694941. The live conference call and replay can also be accessed via audio webcast here and on the Investor Relations section of the Company’s website, located at View Source

On November 7, 2019 EyePoint Pharmaceuticals, Inc. (NASDAQ: EYPT), a specialty biopharmaceutical company committed to developing and commercializing innovative ophthalmic products, reported financial results for the third quarter ended September 30, 2019 and highlighted recent corporate developments (Press release, pSivida, NOV 7, 2019, View Source [SID1234550719]).

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"We are pleased with the strong growth in customer orders during the quarter as our sales team is making significant progress in penetrating targeted accounts for both DEXYCU and YUTIQ," said Nancy Lurker, President and Chief Executive Officer of EyePoint Pharmaceuticals. "At the customer level, DEXYCU is gaining momentum at high volume ambulatory surgery centers with increasing repeat orders by physicians who favor its targeted, efficient ocular administration, and its positive efficacy and safety profile. We also saw continued strong growth of 17% in physician demand for YUTIQ quarter over quarter despite a cumbersome reimbursement process under a miscellaneous J-Code. We expect that the issuance of a permanent and specific J-Code for YUTIQ, which went into effect on October 1, 2019, will enable customers to experience a faster and more straightforward reimbursement process and will support continued growth in demand for this important product. These positive customer and reimbursement trends were masked by our distributor’s strategic decision to substantially reduce carried inventory, limiting their restocking during the quarter and resulting in decreased reported revenue from the prior quarter."

Commercial Performance in Third Quarter 2019

DEXYCU (dexamethasone intraocular suspension) 9% for the treatment of post-operative inflammation following ocular surgery

Customer orders up 207% over Q2 with September representing the highest volume month to date, and with repeat customers representing 74% of Q3 order volume.

The average time for an account to re-order dropped from 4.8 weeks during Q2 to 2.5 weeks during Q3, as customers incorporate DEXYCU as part of their surgical protocol.

Medicare fee for service claims continue to be paid consistently, and Medicare Advantage and Commercial insurance claims increased quarter over quarter.

The average time to payment in all payor sectors continues to improve post launch. We expect the time to payment to decrease as payor systems incorporate DEXYCU’s J-Code.

Since launch, over 5,400 patients have been injected with DEXYCU. In that time, over 500 physicians have been trained to use the product.

YUTIQ (fluocinolone acetonide intravitreal implant) 0.18 mg for chronic non-infectious uveitis affecting the posterior segment of the eye

Customer orders up 17% over Q2, prior to effective date of a permanent J-Code.

Repeat customers represented 85% of order volume, and importantly, 40% of the target account list has ordered, representing solid adoption with continued growth opportunity.

Medicare fee for service claims paid consistently and Medicare Advantage and Commercial payors beginning to cover YUTIQ.

The permanent and specific J-Code, J7314, was issued by the Centers for Medicare and Medicaid Services (CMS) one quarter earlier than under prior CMS policy and is in effect as of October 1, 2019.

Corporate Developments

In November 2019, EyePoint announced two new agreements to expand the reach of DEXYCU and YUTIQ within large integrated healthcare networks. An interim agreement with the U.S. Department of Veterans Affairs (VA) became effective on November 2, 2019, adding DEXYCU and YUTIQ to the Federal Supply Schedule. The VA serves approximately nine million beneficiaries. A final VA contract is anticipated within several months and is expected to have a five-year term. In addition, a three-year contract was signed with Vizient Inc., effective November 1, 2019, offering DEXYCU to its diverse membership network. Vizient provides solutions and services to over 50% of the nation’s acute care providers, including 95% of the nation’s academic medical centers, and more than 20% of ambulatory care providers.

In August 2019, EyePoint received a $1 million milestone payment from Ocumension Therapeutics triggered by the approval of its Investigational New Drug (IND) in China for Eyepoint’s three-year intravitreal micro-insert containing 0.18mg of fluocinolone acetonide using the Durasert technology (known as YUTIQ in the United States). The IND allows the importation of finished product into China for use in its initiated clinical trial to support regulatory approval for the treatment of chronic uveitis affecting the posterior segment of the eye. Ocumension has also received a special approval by the Hainan Province People’s Government to market this product for chronic, non-infectious posterior segment uveitis in the Hainan Bo Ao Lecheng International Medical Tourism Pilot Zone.

R&D Highlights

Two oral presentations highlighting 36-month data supporting YUTIQ for the treatment of non-infectious uveitis affecting the posterior segment of the eye occurred at the annual Retina Society meeting held in London, United Kingdom, on September 11-15, 2019. The first presentation "Minimizing Uveitic Recurrences: Results from a 36M Study of Fluocinolone Acetonide Intravitreal Insert (FAi) in Subjects with Chronic Non-Infectious Uveitis Affecting the Posterior Segment" concluded that treatment with YUTIQ not only resulted in a reduction in the 3-year rate of uveitic recurrences but that YUTIQ also reduced the cumulative number of inflammatory episodes in eyes that did relapse. The second presentation, "The Use of Adjunctive Anti-inflammatory Medications: Results from a 36M Study of a Fluocinolone Acetonide

Intravitreal Insert (FAi) in Subjects with Chronic Non-Infectious Uveitis (NIPU) Affecting the Posterior Segment" highlighted that the treatment with a single intravitreal injection of YUTIQ significantly reduced the need for adjunctive therapies in this group of patients.

YUTIQ was highlighted in separate events at the American Academy of Ophthalmology (AAO) 2019 Annual Meeting held October 12 – 15, 2019 in San Francisco, CA. First, an oral presentation entitled, "Effect of Fluocinolone Acetonide Insert on the Presence of Uveitic Macular Edema: Outcomes at 36 Months" was presented at a well-attended session at the Retina Subspecialty Day and demonstrated the long-term durability of YUTIQ for this difficult to treat ocular disease. Additionally, a poster entitled, "Fluocinolone Acetonide Intravitreal Insert for Noninfectious Posterior Uveitis: Analysis of Significant IOP Elevation" provided further evidence of the favorable safety and tolerability profile of YUTIQ.

Review of Results for Third Quarter Ended September 30, 2019

For the three months ended September 30, 2019, total revenue was $2.5 million. Net product revenue was $1.0 million, primarily generated from sales of DEXYCU.

DEXYCU and YUTIQ are sold through a distributor under a title model and, accordingly, product revenue is recognized as inventory is shipped to the distributor and title transfers. Due to this title model, quarterly reported revenue and underlying customer sales will likely track separately for an extended period of time beyond initial launch, as customer demand patterns may not align with the distributor’s inventory restocking procedures.

Net revenue from licenses, royalties and collaborations for the three months ended September 30, 2019 totaled $1.5 million compared to $486,000 in the corresponding quarter in 2018.

Operating expenses for the three months ended September 30, 2019 increased to $16.6 million from $14.0 million in the prior year period, due primarily to investments in sales and marketing infrastructure and program costs, professional services, and cost of sales related to product revenue, partially offset by a decrease in research and development expense. Non-operating expense, net, for the three months ended September 30, 2019 totaled $1.6 million of net interest expense. Net loss for the three months ended September 30, 2019 was $15.6 million, or $0.15 per share, compared to a net loss of $33.1 million, or $0.44 per share, for the prior year quarter.

Review of Nine Months Results Ended September 30, 2019

For the nine months ended September 30, 2019, total net product revenue was $8.9 million. Neither product had net revenue in the corresponding period in 2018. Net revenue from licenses, royalties and collaborations for the nine months ended September 30, 2019 totaled $2.8 million compared to $2.1 million in the corresponding period in 2018.

Operating expenses for the nine months ended September 30, 2019 increased to $50.6 million from $30.1 million in the prior year period, due primarily to investments in sales and marketing infrastructure and program costs, professional services, stock-based compensation, cost of sales related to product revenue and amortization of the DEXYCU intangible asset, partially offset by a decrease in research and development expense. Non-operating expense, net, for the nine months ended September 30, 2019 totaled $7.5 million and consisted of $3.7 million of net interest expense and $3.8 million from the loss on extinguishment of debt related to the payoff of the SWK term loan. Net loss for the nine months ended September 30, 2019 was $46.4 million, or $0.45 per share, compared to a net loss of $74.5 million, or $1.27 per share, for the prior year period.

Cash and cash equivalents at September 30, 2019 totaled $31.8 million compared to $44.2 million at June 30, 2019.

Financial Outlook

We expect that the Company’s existing cash and cash equivalents at September 30, 2019 and cash inflows from anticipated YUTIQ and DEXYCU product sales will be sufficient to fund the Company’s operating plan into 2020.

Conference Call Information

EyePoint will host a conference call today, Thursday, November 7, 2019 at 8:30 AM ET to discuss the results for the third quarter ended September 30 and recent operational developments. To access the conference call, please dial (877) 312-7507 from the U.S. and Canada or (631) 813-4828 (international) at least 10 minutes prior to the start time and refer to conference ID 3149087. A live webcast will be available on the Investor Relations section of the corporate website at View Source A replay of the webcast will also be available on the corporate website.