On August 4, 2021 Oncorus, Inc. (Nasdaq: ONCR), a viral immunotherapies company focused on driving innovation to transform outcomes for cancer patients, reported second quarter 2021 financial results and highlighted recent achievements and developments (Press release, Oncorus, AUG 4, 2021, View Source [SID1234585725]).

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"We’re pleased that our Phase 1 clinical trial of ONCR-177, our lead oHSV candidate, continues to enroll and progress as expected, and we remain on track to report initial clinical data in the fourth quarter of this year. ONCR-177 is unique among oHSVs in that it retains the ability to resist interferon via retention of γ34.5 and is armed with five complementary immunomodulatory payloads in order to drive systemic activity," said Theodore (Ted) Ashburn, M.D., Ph.D., President and Chief Executive Officer at Oncorus. "This quarter, we also announced the nomination of our lead Synthetic vRNA immunotherapy candidates, ONCR-021 and ONCR-788, which we plan to investigate in multiple cancers, including those of the lung. Our proprietary Synthetic vRNA Immunotherapy Platform involves a novel combination of RNA- and viral immunotherapy-based modalities. To date, we believe that neither of these modalities has reached its full potential due to several well-established challenges, which we believe we can overcome through our novel and innovative approach and, in doing so, potentially create a new pillar of therapy for cancer patients."

Second Quarter 2021 and Recent Highlights

Continued to progress Phase 1 clinical trial of ONCR-177. Oncorus continues to enroll patients in a Phase 1 clinical trial of its lead oHSV product candidate, ONCR-177, an intratumorally (iTu) administered oHSV viral immunotherapy being developed for multiple solid tumor indications. The Phase 1 open-label, multi-center, dose escalation and expansion clinical trial is designed to evaluate the safety and tolerability of ONCR-177 alone and in combination with Merck’s anti-PD-1 therapy, KEYTRUDA (pembrolizumab), in patients with advanced and/or refractory cutaneous, subcutaneous or metastatic nodal solid tumors. Oncorus anticipates reporting initial interim data from the Phase 1 trial in the fourth quarter of 2021.
Announced nomination of its first Synthetic vRNA immunotherapy clinical candidates, ONCR-021 and ONCR-788. In May 2021, Oncorus nominated its first Synthetic vRNA immunotherapy clinical candidates, ONCR-021 and ONCR-788. Oncorus’ pioneering IV-administered approach involves encapsulating the genomes of RNA viruses known to kill cancer cells (i.e., oncolytic viruses, or OVs) in a lipid nanoparticle (LNP), creating a Synthetic vRNA immunotherapy. ONCR-021 encodes an optimized strain of Coxsackievirus A21 (CVA21), and ONCR-788 encodes a modified version of the Seneca Valley Virus (SVV). Both CVA21 and SVV have extensive clinical experience and favorable safety profiles when administered IV. Oncorus’ novel Synthetic vRNA approach holds the potential for IV-administration and avoids the challenge of neutralizing antibodies seen in previous approaches with IV-administered OVs. Oncorus plans to investigate its novel Synthetic vRNA immunotherapies in multiple histologies, including cancers of the lung, both as monotherapy and in combination with immune checkpoint inhibitors and other cancer treatments.

Click here to read a white paper published by Oncorus’ leadership on its Synthetic vRNA Immunotherapy Platform and lead candidates and here for the slide deck presented at Oncorus’ recent investor meeting. Click here to view an animation depicting Oncorus’ novel Synthetic vRNA immunotherapy approach.
Continued to advance second oHSV viral immunotherapy candidate, ONCR-GBM, toward candidate nomination. Leveraging its oHSV Platform, Oncorus is pursuing ONCR-GBM to specifically target brain cancer, including glioblastoma multiforme (GBM). The company is utilizing its knowledge of microRNA expression to engineer a microRNA attenuation strategy to protect healthy brain tissue and to select a combination of payloads intended to address the specific drivers of immune suppression in brain cancer.
Progressed buildout of Good Manufacturing Practice (GMP) viral immunotherapy clinical manufacturing facility. Oncorus continues to make progress building out its state-of-the-art, 88,000 square foot GMP viral immunotherapy clinical manufacturing facility in Andover, Massachusetts. The facility, for which Oncorus has signed a 15-year lease, is intended to provide a comprehensive solution for Oncorus’ Chemistry, Manufacturing and Controls (CMC) development needs, enabling the manufacture, quality control and supply of clinical-grade viral immunotherapies for investigational new drug (IND)-enabling and clinical studies. The company remains on track to complete the first phase of the facility’s buildout in 2021, including process development and quality control, with GMP multi-product manufacturing capabilities and full operation expected to commence in the first half of 2023.
Expanded Board of Directors with two new appointments. Oncorus expanded its Board with the appointments of Eric H. Rubin, M.D., and Barbara Yanni, in June 2021 and July 2021, respectively. Dr. Rubin currently serves as Senior Vice President of Global Clinical Oncology at Merck, known as MSD outside of the United States and Canada. Ms. Yanni was formerly Vice President and Chief Licensing Officer at Merck, prior to her retirement in 2014.
Second Quarter Financial Results

Cash and cash equivalents were $159.9 million as of June 30, 2021 compared to $130.3 million as of December 31, 2020.
Research and development expenses for the quarter ended June 30, 2021 were $10.7 million compared to $6.7 million for the corresponding quarter in 2020. The increase in research and development expenses was mainly attributable to increased personnel-related expenses, including stock-based compensation, which was driven by increased headcount, increased rent expense related to the Company’s new manufacturing facility and increased development costs related to the Company’s nominated candidates.
General and administrative expenses for the quarter ended June 30, 2021 were $4.9 million compared to $2.0 million for the corresponding quarter in 2020. The increase in general and administrative expenses was primarily attributable to increases in personnel-related expenses, including stock-based compensation, which was driven by increased compensation and increased headcount and other increased costs, such as insurance expense and professional and consultant expenses, related to operating as a public company.
Net loss attributable to common stockholders for the quarter ended June 30, 2021 was $15.5 million, or $0.60 per share, compared to a net loss attributable to common stockholders of $12.1 million, or $12.09 per share for the same quarter in 2020. The share and net loss per share amounts in the second quarter of 2021 reflect the impact of the company’s IPO, which closed in October 2020, including the conversion of outstanding preferred stock into approximately 15.0 million shares of common stock.
Financial Guidance

Based upon its current operating plans and cash and cash equivalents, Oncorus expects to have sufficient capital to fund its operating expenses and capital expenditure requirements into late 2023.

On August 4, 2021 Anavex Life Sciences Corp. ("Anavex" or the "Company") (Nasdaq: AVXL), a clinical-stage biopharmaceutical company developing differentiated therapeutics for the treatment of neurodegenerative and neurodevelopmental disorders including Alzheimer’s disease, Parkinson’s disease, Rett syndrome and other central nervous system (CNS) disorders, reported that Christopher U. Missling, PhD, President and Chief Executive Officer of Anavex, will participate in a fireside chat in the BTIG Virtual Biotechnology Conference 2021 on Tuesday, August 10, 2021 at 9:30 a.m. EDT (Press release, Anavex Life Sciences, AUG 4, 2021, View Source [SID1234585724]).

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Webcast for the conference will be available in the Investors section under "Events" of the Anavex corporate website at www.anavex.com. To listen to the live event, please contact a BTIG representative with interest.

On August 4, 2021 Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS), a clinical-stage biotechnology company advancing novel biotherapeutics through its proprietary Anticalin technology platform for respiratory diseases, cancer, and other indications, reported financial results for the second quarter of 2021 ended June 30, 2021 and provided an update on the Company’s recent and anticipated future developments (Press release, Pieris Pharmaceuticals, AUG 4, 2021, View Source [SID1234585723]).

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"We had a very productive second quarter, having advanced and expanded our pipeline while ending with a cash balance exceeding $119 million, largely bolstered by additional non-dilutive funding. As we further validate the Anticalin platform for local applications, we are pleased to have closed a strategic partnership with Genentech in the areas of respiratory and ophthalmology, providing another opportunity to grow our respiratory franchise while exploring a novel application for Anticalin proteins via ocular delivery. We are also excited to have unveiled our proprietary inhaled respiratory program PRS-220 for IPF alongside a grant from the Bavarian government to evaluate the program for post-COVID pulmonary fibrosis. PRS-220 is expected to enter the clinic next year. Additionally, we have made significant progress in advancing our immuno-oncology pipeline. In the coming weeks, we expect to dose the first patient in the phase 2 trial of cinrebafusp alfa in HER2-expressing cancers, for which FDA recently granted orphan drug designation, and we expect to start the phase 1 trial of PRS-344/S095012 with our partner, Servier, later this year," said Stephen S. Yoder, President and Chief Executive Officer of Pieris.

PRS-060/AZD1402 and AstraZeneca Collaboration: Enrollment continues in the first (safety) part of the global phase 2a study of PRS-060/AZD1402, an inhaled IL-4 receptor alpha inhibitor under development in collaboration with AstraZeneca for the treatment of moderate-to-severe asthma. Pieris and AstraZeneca expect to announce data from the phase 2a study next year.Upon completion of the study, which is being sponsored and funded by AstraZeneca, Pieris will have the options to co-develop and, separately, co-commercialize PRS-060/AZD1402 in the United States. Pieris and AstraZeneca continue to advance each of the four programs in the collaboration beyond PRS-060/AZD1402.
Cinrebafusp Alfa (PRS-343): Pieris plans to dose the first patient in a two-arm phase 2 study for cinrebafusp alfa, a 4-1BB/HER2 bispecific for the treatment of HER2-expressing solid tumors, in gastric cancer in the coming weeks. One arm of the study will evaluate cinrebafusp alfa in combination with ramucirumab and paclitaxel in HER2-high gastric cancer, and the other arm of the study will evaluate cinrebafusp alfa in combination with tucatinib in HER2-low gastric cancer. As previously indicated, Go/No-Go criteria for advancement of this program will evaluate a composite of measures, including a minimum target of 50% ORR in the HER2-high arm and a minimum target of 40% ORR in the HER2-low arm, duration of response, and safety. The Company expects to report results from both study arms next year. Recently, FDA granted orphan drug designation to cinrebafusp alfa for the treatment of HER2-high and HER2-low expressing gastric cancers.
PRS-344/S095012 and Servier Collaboration: The phase 1 study of PRS-344/S095012, a 4-1BB/PD-L1 bispecific, is expected to begin later this year. Pieris holds exclusive commercialization rights for PRS-344/S095012 in the United States and will receive royalties on ex-U.S. sales for this program. Additionally, Servier has obtained in vivo proof of concept for PRS-352, an Anticalin-based bispecific beyond 4-1BB, triggering an undisclosed milestone payment to Pieris. Servier is responsible for further development of the program.
PRS-220: Pieris is developing PRS-220, a proprietary inhaled Anticalin protein targeting connective tissue growth factor (CTGF) for the treatment of idiopathic pulmonary fibrosis (IPF). The Company was selected to receive a 14.2 million euro (approximately 17 million USD) grant from the Bavarian government for the research and development of PRS-220 for post-acute sequelae of SARS-CoV-2 infection (PASC) pulmonary fibrosis (PASC-PF), also known as post-COVID pulmonary fibrosis. The Company plans to present initial preclinical data from the program at the European Respiratory Society International Congress 2021 (ERS) in September, and clinical development is expected to begin next year.
Genentech Collaboration: Pieris entered into a multi-program research collaboration and license agreement with Genentech to discover, develop, and commercialize locally delivered respiratory and ophthalmology therapies that leverage Pieris’ proprietary Anticalin technology. Under the terms of the agreement, Pieris received a $20 million upfront payment, and may be eligible to receive more than $1.4 billion in additional milestone payments across multiple programs, including up to $11 million in preclinical milestones for each program, as well as tiered royalties up to low double-digits for any commercialized programs. The collaboration comprises two committed programs, and Genentech has an option to initiate up to two additional programs for a further payment of $10 million per program.
Executive R&D Leadership: Pieris announced the appointment of Tim Demuth, M.D., Ph.D. as SVP and Chief Medical Officer. Dr. Demuth will oversee all clinical, medical, safety, and regulatory aspects at the Company. Pieris additionally announced the promotion of Shane Olwill, Ph.D., to SVP and Chief Development Officer. In his new role, Dr. Olwill will lead all translational activities to inform the replenishing and positioning of Pieris’ portfolio across all stages of development in addition to overseeing project leadership on projects following declaration of a development candidate.
First Quarter Financial Update:

Cash Position – Cash and cash equivalents totaled $119.1 million for the quarter ended June 30, 2021, compared to a cash and cash equivalents balance of $70.4 million for the year ended December 31, 2020. The cash increase in the first half of 2021 was more than $78.0 million, primarily due to new and existing collaboration agreements, along with targeted use of the Company’s ATM program. This increase was partially offset by cash used to fund operations for the first six months of 2021. The June 30th cash position does not include the impact of the Bavarian government grant, as those proceeds will be reimbursed for qualifying program costs incurred over the PRS-220 development period.

R&D Expense – R&D expenses were $15.8 million for the quarter ended June 30, 2021, compared to $11.3 million for the quarter ended June 30, 2020. The increase reflects higher spending on preclinical activities for PRS-220, an increase in manufacturing costs across multiple immuno-oncology programs, and higher royalty costs associated with entering new collaboration agreements.

G&A Expense – G&A expenses were $4.2 million for the quarter ended June 30, 2021, compared to $4.6 million for the quarter ended June 30, 2020. The decrease reflects lower legal and project management costs in 2021, along with higher one-time office and building equipment costs incurred related to the move to the new R&D facility in Hallbergmoos, Germany in the prior year.

Net Loss – Net loss was $15.5 million or $(0.25) per share for the quarter ended June 30, 2021, compared to a net loss of $5.0 million or $(0.09) per share for the quarter ended June 30, 2020.

Conference Call:
Pieris management will host a conference call beginning at 8:00 AM EDT on Wednesday, August 4, 2021, to discuss the second quarter of 2021 financial results and provide a corporate update. Individuals can join the call by dialing +1-877-407-8920 (US & Canada) or +1-412-902-1010 (International). Alternatively, a listen-only audio webcast of the call can be accessed here.

For those unable to participate in the conference call or listen to the webcast, a replay will be available on the Investors section of the Company’s website, www.pieris.com.

On August 4, 2021 IVERIC bio, Inc. (Nasdaq: ISEE) reported financial and operating results for the quarter ended June 30, 2021 and provided a general business update (Press release, Ophthotech, AUG 4, 2021, View Source [SID1234585722]).

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"This is an exciting time for the Company as we have delivered on several transformational milestones, particularly with regard to the execution of our Zimura pivotal program," stated Glenn P. Sblendorio, Chief Executive Officer of Iveric Bio. "For GATHER2, our second Zimura Phase 3 clinical trial for geographic atrophy secondary to age-related macular degeneration, we received a Special Protocol Assessment agreement from the FDA, we completed enrollment four months ahead of schedule, and patient retention, as measured by the injection fidelity rate, continues to exceed expectations and we are targeting the 12-month rate to be greater than 90%. In addition, the results of post-hoc analyses from GATHER1, our first Zimura Phase 3 clinical trial in GA secondary to AMD, indicate that Zimura may have a therapeutic benefit in earlier stages of GA."

"We are extremely proud of the momentum that we have created," stated Pravin U. Dugel, President of Iveric Bio. "During July 2021, we strengthened our balance sheet with a public offering. We believe this enables us to further support the impressive recruitment with superb retention in our Zimura GATHER2 Phase 3 trial, prepare and potentially file a New Drug Application for Zimura in GA secondary to AMD, begin preparations for a potential commercial launch of Zimura in GA secondary to AMD, initiate a drusen clinical development program, and invest in sustained release delivery technologies for Zimura. We are committed to execute on our strategy to develop and deliver treatments for diseases of the retina through our Zimura, HtrA1 inhibitor and gene therapy programs, with the potential to create long-term shareholder value."

Therapeutics Programs Targeting Geographic Atrophy (GA) Secondary to Age-Related Macular Degeneration (AMD)

Zimura (avacincaptad pegol): Complement C5 Inhibitor

Special Protocol Assessment (SPA) for GATHER2
The Company announced on July 6, 2021, that it received written agreement from the U.S. Food and Drug Administration (FDA) under a Special Protocol Assessment (SPA) for the overall design of GATHER2, the Company’s second pivotal clinical trial of Zimura in development for the treatment of GA secondary to AMD. The agreement further solidifies the Company’s plans to file an application with the FDA for marketing approval of Zimura for GA secondary to AMD, if the ongoing GATHER2 clinical trial meets its primary endpoint at 12 months. Zimura met its pre-specified primary efficacy endpoint at 12 months and reached statistical significance in the previously completed GATHER1 pivotal clinical trial.

In parallel discussions with those for the GATHER2 SPA, the FDA indicated to the Company that, as part of a future NDA submission for Zimura, the GATHER1 results will be considered using the original prespecified primary efficacy endpoint analysis, together with a post-hoc analysis using the same FDA preferred method that will be used for the GATHER2 trial (mean rate of growth (slope) estimated based on GA area measured by fundus autofluorescence (FAF) in the relevant timepoints). The GATHER 1 results as analyzed by the FDA preferred analysis is highly consistent with and strongly supportive of the results from the original prespecified analysis. The complete results of both analyses for GATHER1 have been presented in the Company’s July 6, 2021 press release and Form 8-K filing.
GATHER2 Enrollment, Retention, and Injection Fidelity Rate
On July 26, 2021, the Company announced completion of enrollment in GATHER2, four months ahead of the Company’s original schedule. Based on this timeline, the Company expects topline GATHER2 data to be available in the second half of 2022, approximately one year after the enrollment of the last patient plus the time needed for database lock and analysis.

In June 2021, the Company announced that it is targeting patient retention for the GATHER2 trial, as measured by injection fidelity rate through month 12, of greater than 90%. The injection fidelity rate continues to exceed the Company’s expectations. Injection fidelity is calculated by dividing the total number of actual injections by the total number of expected injections based on the number of enrolled patients. The Company considers injection fidelity to be the most important and stringent measure of patient retention because it reflects the timely administration of the drug into the patient’s eye.
Earlier Stages of Dry AMD Prior to Geographic Atrophy
In June 2021, Vas Sadda, MD, of Doheny Eye Institute at UCLA, presented new post-hoc analyses from the GATHER1 trial on progression of drusen and nascent GA (iRORA/cRORA), which are earlier forms of dry AMD, in patients treated with Zimura 2 mg as compared to patients in the sham group. These post-hoc analyses suggest that Zimura may have the potential to impact AMD even before atrophy occurs, thereby changing the natural course of the disease. The Company expects to initiate a drusen clinical development program in 2022.
Autosomal Recessive Stargardt Disease
Patient enrollment in the Phase 2b screening clinical trial of Zimura for the treatment of autosomal recessive Stargardt disease, referred to as the STAR trial, is ongoing with the goal of enrolling approximately 25 new patients for a total of approximately 120 patients.
IC-500: HtrA1 (high temperature requirement A serine peptidase 1 protein) Inhibitor

During the second quarter of 2021, the Company commenced its first preclinical tolerability study for IC-500 and is currently planning additional preclinical studies, including pharmacokinetic and target engagement studies. Formulation optimization and other manufacturing activities are also ongoing. The Company expects to submit an investigational new drug application (IND) to the FDA for IC-500 in GA secondary to AMD in the second half of 2022.

Gene Therapy Programs in Orphan Inherited Retinal Diseases (IRDs)

IC-200: BEST1-Related IRDs
The Company has completed an IND-enabling preclinical toxicology study of IC-200, in a naturally occurring canine disease model of Best disease. Subject to regulatory review, the Company plans to initiate a Phase 1/2 clinical trial of IC-200 during the fourth quarter of 2021. The first IC-200 clinical trial will focus on patients with the autosomal recessive form of the disease, autosomal recessive bestrophinopathy.
IC-100: Rhodopsin-Mediated Autosomal Dominant Retinitis Pigmentosa (RHO-adRP)
As previously disclosed, the Company was planning to discuss with the FDA the results from its toxicology studies of IC-100, and the design of its first-in-human clinical trial, before submitting an IND. The FDA advised, in lieu of this meeting, additional discussion should be conducted during the 30-day IND review period following IND submission. The Company is currently considering its development options for this product candidate.
Minigene Programs
The Company, through its minigene collaboration with the University of Massachusetts Medical School (UMMS), has identified a lead construct for its Leber Congenital Amaurosis Type 10 (LCA10) miniCEP290 program and is currently planning preclinical development for this program. The Company is evaluating preclinical data from its Stargardt Disease (ABCA4) program and expects to obtain preliminary results from its USH2A-related inherited retinal diseases (USH2A) program in the first half of 2022.

The Company recently hired four individuals who were previously at UMMS, including Hemant Khanna, Ph.D., the principal investigator for the Company’s miniCEP290, miniABCA4 and miniUSH2A sponsored research programs. Dr. Khanna joined the Company as Vice President, Pre-Clinical Ocular Research. The Company is working to transition the research and preclinical development activities for these programs from UMMS to the Company. The Company is also preparing to establish laboratory space for these employees to continue working on these programs and other preclinical research and development activities for the Company.
Management Updates

In August 2021, Christopher Simms joined Iveric Bio as Senior Vice President and Chief Commercial Officer. Mr. Simms is an accomplished healthcare leader with more than 20 years of diverse commercial leadership experience at Johnson & Johnson, Genentech, and Novartis, including focused experience in retina, ophthalmology, and optometry.
Second Quarter Financial Results and 2021 Cash Guidance

As of June 30, 2021, the Company had $159.9 million in cash and cash equivalents.
In July 2021, the Company raised approximately $108 million in net proceeds in an underwritten public offering of common stock. The Company sold 13,397,500 shares of its common stock in this public offering.
The Company now estimates its year-end 2021 cash, cash equivalents and available for sale securities to range between $215 million and $225 million. The Company also estimates that its cash, cash equivalents and available for sale securities will be sufficient to fund its planned capital expenditure requirements and operating expenses through at least mid-year 2024. These estimates are based on the Company’s current business plan including the continuation of its ongoing clinical development programs for Zimura, preparation and potential filing of a New Drug Application and a Marketing Authorization Application for Zimura in GA secondary to AMD, beginning preparations for a potential commercial launch of Zimura in GA secondary to AMD, initiating a drusen clinical development program, and investing in sustained release delivery technologies for Zimura, the progression of its IC-200 and IC-100 programs into the clinic, and the advancement of its IC-500 development program. Excluded from these estimates are any potential approval or sales milestones payable to Archemix Corp. and potential expenses for actual commercial launch of Zimura, any additional expenditures related to potentially studying Zimura in indications outside of GA and drusen or resulting from the potential in-licensing or acquisition of additional product candidates or technologies, and any associated development the Company may pursue.
2021 Q2 Financial Highlights

R&D Expenses: Research and development expenses were $23.5 million for the quarter ended June 30, 2021, compared to $12.7 million for the same period in 2020. For the six months ended June 30, 2021, research and development expenses were $42.0 million compared to $26.5 million for the same period in 2020. Research and development expenses increased primarily due to the commencement of patient enrollment and ongoing progress of the GATHER2 clinical trial, increased manufacturing activities for Zimura and increases in research and development personnel.
G&A Expenses: General and administrative expenses were $6.7 million for the quarter ended June 30, 2021, compared to $6.3 million for the same period in 2020. For the six months ended June 30, 2021, general and administration expenses were $15.0 million compared to $11.3 million for the same period in 2020. General and administration expenses increased primarily due to legal costs associated with continued litigation efforts.
Income Tax Benefit: The Company recorded no income tax benefit for the three and six months ended June 30, 2021. Income tax benefits of $0.4 million and $3.7 million for the three and six months ended June 30, 2020, respectively, were recognized to reflect a favorable settlement of a state corporate income tax audit.
Net Loss: The Company reported a net loss for the quarter ended June 30, 2021 of $30.1 million, or ($0.32) per diluted share, compared to a net loss of $18.6 million, or $(0.32) per diluted share, for the same period in 2020. For the six months ended June 30, 2021, the Company reported a net loss of $56.9 million or ($0.61) per diluted share, compared to a net loss of $33.7 million or ($0.61) for the same period in 2020.
Conference Call/Web Cast Information
Iveric Bio will host a conference call/webcast to discuss the Company’s financial and operating results and provide a business update. The call is scheduled for August 4, 2021 at 8:00 a.m. Eastern Time. To participate in this conference call, dial 1-888-317-6003 (USA) or 1-412-317-6061 (International), passcode 7257034 . A live, listen-only audio webcast of the conference call can be accessed on the Investors section of the Iveric Bio website at www.ivericbio.com. A replay will be available approximately two hours following the live call for two weeks. The replay number is 1-877-344-7529 (USA) or 1-412-317-0088 , passcode 10158843.

On August 4, 2021 United Therapeutics Corporation (Nasdaq: UTHR) reported its financial results for the quarter ended June 30, 2021 (Press release, United Therapeutics, AUG 4, 2021, View Source [SID1234585721]). Total revenue in the second quarter of 2021 grew 23% year over year to $446.5 million, compared to $362.0 million in the second quarter of 2020.

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"We are pleased to continue our expansion into new indications outside of WHO Group 1 PAH with strong Tyvaso financial results, and with patient enrollment continuing in our PERFECT and TETON phase 3 studies in COPD-associated pulmonary hypertension and in IPF, respectively," said Martine Rothblatt, Ph.D., Chairperson and Chief Executive Officer of United Therapeutics. "Meanwhile, we are also focused on expanding our medical armamentarium for PAH with the continued progress of our phase 3 studies of once-daily ralinepag, and with our next-generation treprostinil molecules and delivery systems."

"As we build traction with the Tyvaso PH-ILD launch, I am also tremendously excited about the uptake of all of our products during the past quarter," said Michael Benkowitz, President and Chief Operating Officer of United Therapeutics. "Indeed, we are currently seeing some of the highest levels of referrals of Tyvaso and Orenitram since their launches and we’re well on our way to our goal of doubling the number of Tyvaso patients on therapy by the end of 2022."

SECOND QUARTER 2021 FINANCIAL RESULTS

See definition of non-GAAP earnings, a non-GAAP financial measure, and a reconciliation of net income to non-GAAP earnings below.

Revenues

The table below summarizes the components of total revenues (dollars in millions):

Net product sales from our treprostinil-based products (Remodulin, Tyvaso, and Orenitram) grew by $56.2 million in the second quarter of 2021 compared to the second quarter of 2020. The increase in Remodulin revenues was driven by a $19.0 million increase in sales outside the United States. While generic competition continues to increase pressure on our international Remodulin revenues, this increase primarily reflects the irregular ordering patterns we typically experience with our international distributors. The growth in Tyvaso revenues resulted primarily from an increase in quantities sold, reflecting an increased number of patients following the pulmonary hypertension associated with interstitial lung disease (PH-ILD) label expansion. The growth in Unituxin revenues resulted primarily from an increase in quantities sold.

Refer to Share-based compensation below.

Cost of product sales, excluding share-based compensation. Cost of product sales for the three months ended June 30, 2021 increased as compared to the same period in 2020, primarily due to an increase in product costs due to an overall increase in sales.

Research and development expense. The table below summarizes research and development expense by major category (dollars in millions):

Research and development expense, excluding share-based compensation. Research and development expense for the three months ended June 30, 2021 decreased as compared to the same period in 2020, primarily due to: (1) a decrease in milestone payments for the Tyvaso DPI program; (2) a decrease in spending due to the completion of the phase 3 DISTINCT study of Unituxin in 2020; and (3) a decrease in spending following our decision to discontinue development of biomechanical lungs in March 2021.

Refer to Share-based compensation below.

General and administrative, excluding share-based compensation. The increase in general and administrative expense for the three months ended June 30, 2021, as compared to the same period in 2020, was primarily due to: (1) an increase in legal expenses related to litigation matters; (2) an increase in expenses related to disposals of property, plant, and equipment; and (3) an increase in consulting expenses.

Share-based compensation. The table below summarizes share-based compensation expense by major category (dollars in millions):

The decrease in share-based compensation expense for the three months ended June 30, 2021, as compared to the same period in 2020, was primarily due to: (1) a decrease in STAP expense driven by a seven percent increase in our stock price for the three months ended June 30, 2021, as compared to a 28 percent increase in our stock price for the same period in 2020; and (2) a decrease in stock option expense due to fewer awards granted and outstanding in 2021.

Other expense, net. The change in other expense, net for the three months ended June 30, 2021, as compared to the same period in 2020, was primarily due to net unrealized and realized gains and losses on equity securities.

Income tax expense. Income tax expense for the three months ended June 30, 2021 and 2020, was $43.9 million and $26.8 million, respectively. The effective income tax rate was 20 percent for the three months ended June 30, 2021 and 2020.

Non-GAAP Earnings

Non-GAAP earnings is defined as net income, adjusted for: (1) share-based compensation expense (including expenses relating to stock options, restricted stock units, share tracking awards, and our employee stock purchase plan); (2) impairment charges; (3) net changes in recurring fair value measurements; (4) license-related fees; (5) unrealized gains on investments in privately-held companies; (6) purchase of a priority review voucher; and (7) tax impact on non-GAAP earnings adjustments.

A reconciliation of net income to non-GAAP earnings is presented below (in millions, except per share data):

Recorded within operating expenses on our consolidated statements of operations.

For the three months ended June 30, 2021, we recognized impairment charges of $2.3 million related to investments in privately-held companies. These impairment charges were recorded within impairments of investments in privately-held companies on our consolidated statements of operations.

For the three months ended June 30, 2021 and June 30, 2020, we recognized $1.3 million of net unrealized losses and $8.9 million of net unrealized and realized losses, respectively, on equity securities issued by public companies. For the three months ended June 30, 2021, we recognized a $0.8 million loss related to changes in the fair values of our contingent consideration assets. The net unrealized and realized losses on equity securities and changes in fair value of our contingent consideration assets were recorded within other expense, net on our consolidated statements of operations.

Recorded within research and development on our consolidated statements of operations.

PRODUCT COMMERCIALIZATION UPDATE

Thus far in 2021, we launched one new product and one new product indication. In February 2021, we launched commercial sales of the Remunity Pump for Remodulin, and in April 2021, we launched a label expansion for Tyvaso to include an indication for PH-ILD following approval by the U.S. Food and Drug Administration (FDA) on March 31, 2021. We expect FDA action on our Tyvaso DPI
new drug application (NDA) in October 2021.

Remunity Pump for Remodulin. In February 2021, we launched sales of the Remunity Pump for Remodulin. The Remunity Pump is a pre-filled, semi-disposable system for subcutaneous delivery of treprostinil. The system consists of a small, lightweight, durable pump and controller designed to have a service life of at least three years. The pump uses disposable cartridges filled with Remodulin, which can be connected to the pump with less patient manipulation than is typically involved in filling other currently-available subcutaneous pumps.

Tyvaso Inhalation Solution in PH-ILD. In February 2020, the INCREASE study of Tyvaso in patients with PH-ILD met its primary endpoint of demonstrating improvement in six-minute walk distance (6MWD). Tyvaso also showed benefits across several key subgroups, including etiology of PH-ILD, disease severity, age, gender, baseline hemodynamics, and dose. Significant improvements were also observed in each of the study’s secondary endpoints, including reduction in the cardiac biomarker NT-proBNP, time to first clinical worsening event, change in peak 6MWD at week 12, and change in trough 6MWD at week 15. Treatment with Tyvaso of up to 12 breaths per session, four times daily, in the INCREASE study was well tolerated and the safety profile was consistent with previous Tyvaso studies and known prostacyclin-related adverse events. Comprehensive data from the INCREASE study were published in the New England Journal of Medicine.

The FDA approved Tyvaso for the PH-ILD indication on March 31, 2021, and we launched commercial efforts for the new indication shortly thereafter.

Tyvaso DPI. In April 2021, we submitted an NDA for Tyvaso DPI for pulmonary arterial hypertension (PAH) and PH-ILD indications. The FDA accepted our NDA for review, and we expect the agency’s review to be complete in October 2021. This represents an expedited review timeframe as a result of our use of the priority review voucher we purchased for $105.0 million in January 2021. The FDA has indicated that approval of the NDA would be subject to an inspection of the Tyvaso DPI manufacturing facility in Danbury, Connecticut, operated by our partner MannKind Corporation, which has been commenced by the FDA and is ongoing.

Our Tyvaso DPI NDA includes the results of two clinical studies we conducted of Tyvaso DPI. One was a study in healthy volunteers, comparing the pharmacokinetics of Tyvaso DPI to Tyvaso Inhalation Solution. The study was completed in October 2020, and demonstrated comparable systemic treprostinil exposure between Tyvaso DPI and Tyvaso Inhalation Solution. In December 2020, we completed a clinical study (called BREEZE), which evaluated the safety and pharmacokinetics of switching PAH patients from Tyvaso Inhalation Solution to Tyvaso DPI. The BREEZE study demonstrated the safety and tolerability of Tyvaso DPI in subjects with PAH transitioning from Tyvaso Inhalation Solution, and comparable systemic treprostinil exposure between Tyvaso DPI and Tyvaso Inhalation Solution.

Implantable System for Remodulin. In June 2021, we and Medtronic, Inc. (Medtronic) agreed to discontinue further efforts to develop and commercialize the Implantable System for Remodulin (ISR). We are working with Medtronic on a mutually-agreed approach to wind-down the development program, and to support patients already enrolled in clinical studies of the ISR, at United Therapeutics’ sole expense.

RESEARCH AND DEVELOPMENT UPDATE

Updates on select later-stage programs are below.

Tyvaso in chronic fibrosing interstitial lung diseases — TETON. We have launched a new phase 3 program called TETON, which will be comprised of one or more phase 3 studies of Tyvaso in subjects with various forms of chronic fibrosing interstitial lung diseases, including patients with idiopathic interstitial pneumonias (IIP), chronic hypersensitivity pneumonitis (CHP), and environmental/occupational lung disease. The first TETON study is enrolling subjects with idiopathic pulmonary fibrosis. The primary endpoint of this study is the change in absolute forced vital capacity (FVC) from baseline to week 52.

The TETON program was prompted by data from the INCREASE study, which demonstrated improvements in certain key parameters of lung function in pulmonary hypertension patients with fibrotic lung disease. Specifically, in the INCREASE study, treatment with Tyvaso resulted in significant improvements in percent predicted FVC at weeks 8 and 16, with subjects having underlying etiologies of IIP showing greater improvement. Consistent positive effects were also observed in patients with CHP and environmental/occupational lung disease. These data points, combined with substantial preclinical evidence of antifibrotic activity of treprostinil, suggest that Tyvaso may offer a treatment option for patients with fibrotic lung disease.

Tyvaso in PH-COPD — PERFECT. Enrollment is ongoing for the phase 3 PERFECT study evaluating Tyvaso in patients with WHO Group 3 pulmonary hypertension associated with chronic obstructive pulmonary disease (PH-COPD). In a 30-week crossover study, 136 subjects will be randomized between inhaled treprostinil and placebo for a 26-week treatment period. The primary endpoint of the study is the change in 6MWD from baseline to week 12.

Ralinepag phase 3 clinical studies — ADVANCE CAPACITY and ADVANCE OUTCOMES. We are enrolling two phase 3 clinical studies to support the potential approval of oral ralinepag for PAH.

INDUCEMENT RESTRICTED STOCK UNITS

On July 30, 2021, we granted a total of 141 restricted stock units under our 2019 Inducement Stock Incentive Plan to one newly hired employee. These restricted stock units vest in three equal installments on July 31, 2022, 2023, and 2024, assuming continued employment on such dates, and are subject to the standard terms and conditions we filed with the SEC as Exhibit 10.2 to our Current Report on Form 8-K on March 1, 2019. We are providing this information in accordance with Nasdaq Listing Rule 5635(c)(4).

WEBCAST

We will host a webcast to discuss our second quarter 2021 financial results on Wednesday, August 4, 2021, at 9:00 a.m. Eastern Time. The webcast can be accessed live via our website at View Source A replay of the webcast will also be available at the same location on our website.