On November 14, 2022 HUTCHMED (China) Limited ("HUTCHMED") (Nasdaq/AIM: HCM, HKEX: 13) reported initial results from FRUTIGA, a Phase III study of fruquintinib combined with paclitaxel in 703 Chinese patients with advanced gastric or gastroesophageal junction ("GEJ") adenocarcinoma (Press release, HUTCHMED, NOV 14, 2022, View Source [SID1234623926]).

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The trial was positive, having met one of the primary endpoints of statistically significant improvement in progression-free survival ("PFS"), which is clinically meaningful. The other primary endpoint of overall survival ("OS") was not statistically significant per the pre-specified statistical plan, although there was an improvement in median OS. Fruquintinib also demonstrated a statistically significant improvement in secondary endpoints including objective response rate (ORR), disease control rate (DCR), and improved duration of response (DoR). The safety profile of fruquintinib in FRUTIGA was consistent with previously reported studies.

Full detailed results are subject to ongoing analysis and are expected to be disclosed at an upcoming scientific meeting. These results as well as further analyses will be shared with the China National Medical Products Administration ("NMPA").

"The combination of fruquintinib and paclitaxel demonstrated significant clinical benefits for these patients in controlling this disease. Our team will continue to analyze the data and discuss these findings with the NMPA for possible NDA filing," said Dr Weiguo Su, Chief Executive Officer and Chief Scientific Officer of HUTCHMED.

Professor Rui-Hua Xu, MD, President of the Sun Yat-Sen University Cancer Center, who served as the FRUTIGA lead principal investigator and Steering Committee Chairman, said: "By meeting the primary endpoint of PFS, fruquintinib demonstrated consistent efficacy and safety in gastric cancer indication in addition to its approved colorectal cancer indication. I am extremely excited that fruquintinib may provide a potential new oral treatment option for second line gastric cancer patients based on the FRUTIGA trial."

HUTCHMED retains all commercial rights to fruquintinib outside of China. In China, where fruquintinib is marketed under the brand name ELUNATE, HUTCHMED is partnered with Eli Lilly and Company. HUTCHMED is responsible for development and execution of all on-the-ground medical detailing, promotion and local and regional marketing. Fruquintinib is not approved for use outside of China.

About FRUTIGA and Gastric Cancer

The safety and efficacy of fruquintinib for the following investigational uses have not been established and there is no guarantee that it will receive health authority approval or become commercially available in any country for the uses being investigated:

The FRUTIGA study is a randomized, double-blind, Phase III study in China to evaluate fruquintinib combined with paclitaxel compared with paclitaxel monotherapy, for second-line treatment of advanced gastric cancer or GEJ adenocarcinoma. The trial enrolled patients who did not respond to first-line standard chemotherapy. Patients were randomized at a 1:1 ratio and stratified according to factors such as stomach vs. GEJ tumor type and performance status. Additional details about this study can be found at clinicaltrials.gov, using identifier NCT03223376.

Gastric cancer is the fourth leading cause of cancer death worldwide. Over one million new cases of gastric cancer and approximately 769,000 deaths were estimated in 2020 worldwide, with the highest incidence rates in several Eastern Asian countries. In 2020, there were 478,500 new gastric cancer cases and 331,600 deaths estimated in China.1 Due to late-onset symptoms, gastric cancer is often diagnosed at an advanced stage with poor prognosis and limited treatment options.

About Fruquintinib

Fruquintinib is a highly selective and potent oral inhibitor of VEGFR-1, -2 and -3. VEGFR inhibitors play a pivotal role in blocking tumor angiogenesis. Fruquintinib was designed to improve kinase selectivity to minimize off-target toxicities, improve tolerability and provide more consistent target coverage. The generally good tolerability in patients to date, along with fruquintinib’s low potential for drug-drug interaction based on preclinical assessment, suggests that it may also be highly suitable for combinations with other anti-cancer therapies.

About Fruquintinib Approval in China

Metastatic colorectal cancer ("CRC") in China: Fruquintinib was approved for marketing by the NMPA in September 2018 and commercially launched in China in November 2018 under the brand name ELUNATE. It has been included in the China National Reimbursement Drug List (NRDL) since January 2020. ELUNATE is indicated for the treatment of patients with metastatic CRC who have been previously treated with fluoropyrimidine, oxaliplatin and irinotecan, including those who have previously received anti-VEGF therapy and/or anti-EGFR therapy (RAS wild type). Results of the FRESCO study2, a Phase III pivotal registration trial of fruquintinib in 416 patients with metastatic CRC in China, were published in The Journal of the American Medical Association, JAMA, in June 2018 (NCT02314819).

About Other Fruquintinib Development

Metastatic CRC in the U.S., Europe, Japan and Australia: The FRESCO-2 study is a multi-regional clinical trial ("MRCT") conducted in the U.S., Europe, Japan and Australia that investigated fruquintinib plus best supportive care ("BSC") vs placebo plus BSC in patients with advanced, refractory metastatic CRC. The results were recently presented at the European Society for Medical Oncology Congress 2022. The MRCT FRESCO-2 study demonstrated that treatment with fruquintinib resulted in a statistically significant and clinically meaningful increase in the primary OS endpoint and key secondary PFS endpoint compared to treatment with placebo. The safety profile of fruquintinib in FRESCO-2 was consistent with previously reported fruquintinib studies. We plan to complete new drug application filings in the U.S., Europe and Japan in 2023 (NCT04322539). The U.S. FDA granted Fast Track Designation for the development of fruquintinib for the treatment of patients with metastatic CRC in June 2020.

Immunotherapy combinations: HUTCHMED has entered into collaboration agreements to evaluate the safety, tolerability and efficacy of fruquintinib in combination with PD-1 monoclonal antibodies, including with tislelizumab (developed by BeiGene, Ltd) and sintilimab (developed by Innovent Biologics, Inc.).

●Metastatic breast, endometrial, and colorectal cancers in the U.S.: HUTCHMED initiated this open-label, multi-center, non-randomized, Phase Ib/II study in the U.S. to investigate if the addition of fruquintinib can potentially induce activity to immune checkpoint inhibitor therapy in advanced, refractory triple negative breast cancer ("TNBC"), endometrial cancer, and CRC (NCT04577963). Safety and preliminary efficacy of fruquintinib as a single agent were demonstrated in advanced solid tumors, including TNBC, in a Phase I study conducted in China (NCT01645215) and a Phase I/Ib study is ongoing in the U.S. (NCT03251378).

●Gastric, colorectal and non-small cell lung cancers ("NSCLC") in China & Korea: BeiGene, Ltd. initiated this open-label, multi-center, Phase II study to assess the safety and efficacy of fruquintinib in combination with tislelizumab in patients with advanced or metastatic, unresectable gastric cancer, CRC or NSCLC (NCT04716634).

●Endometrial cancer and other solid tumors in China: HUTCHMED initiated this open-label, multi-center, non-randomized, Phase II study to assess the safety and efficacy of fruquintinib in combination with sintilimab in patients with advanced cervical cancer, endometrial cancer, gastric cancer, hepatocellular carcinoma (HCC), NSCLC or renal cell carcinoma (RCC). Preliminary results of certain cohorts were presented at the 2021 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting (ASCO) (Free ASCO Whitepaper) and the Chinese Society of Clinical Oncology Annual Meeting (CSCO). Following encouraging data in the advanced endometrial cancer cohort, it has been expanded into a single-arm registrational Phase II study of over 130 patients (NCT03903705).

On November 14, 2022 Vivoryon Therapeutics N.V. (Euronext Amsterdam: VVY; NL00150002Q7) (Vivoryon), a clinical stage company focused on the discovery and development of small molecule medicines to modulate the activity and stability of pathologically altered proteins, reported that it will publish its third quarter financial results for the period ended September 30, 2022, and provide a corporate update on Tuesday, November 22, 2022 (Press release, Vivoryon Therapeutics, NOV 14, 2022, View Source [SID1234623924]). The Company will host a conference call and webcast open to the public. The report will be available for download on the Company’s website (View Source).

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On November 14, 2022 Palatin Technologies, Inc. (NYSE American: PTN), a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor system, reported financial results for its fiscal first quarter ended September 30, 2022 (Press release, Palatin Technologies, NOV 14, 2022, View Source [SID1234623923]).

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"Topline results from our Phase 3 pivotal study of PL9643 is currently expected in the second quarter calendar of 2023, and the interim analysis from the Phase 2 study of oral PL8177 is currently expected in the first calendar quarter of 2023, with topline data expected in the third calendar quarter of 2023," stated Carl Spana, Ph.D., President and CEO of Palatin. "We closed on a $10 million equity offering earlier this month, which strengthened our balance sheet, providing us an operating cash runway through calendar year 2023."

Dr. Spana further commented, "Vyleesi brand value metrics continue to reflect significant growth. In fact, prescription refills, which is a top indicator of patient satisfaction, exceeds 50% of total prescriptions dispensed. Furthermore, net product revenue increased 13% and prescriptions dispensed increased 17% over the last quarter."

Financial Highlights for the Fiscal First Quarter Ended September 30, 2022

The Company reported a net loss for the quarter ended September 30, 2022, of $8.3 million, or $(0.86) per common share, compared to a net loss of $7.1 million, or $(0.75) per common share, for the same period in 2021.
The Company had $21.2 million in cash and cash equivalents as of September 30, 2022, compared to $29.9 million as of June 30, 2022.
Vyleesi (bremelanotide injection) for the treatment of Hypoactive Sexual Desire Disorder (HSDD): Gross product sales to pharmacy distributors amounted to $2.3 million, while net product revenue increased 13% and prescriptions dispensed increased 17%, over the prior quarter.
Business Highlights and Recent Updates

Anti-Inflammatory / Autoimmune Programs
PL9643 melanocortin agonist for the treatment of dry eye disease (DED)
Positive interim analysis in ongoing pivotal Phase 3 clinical study in patients with DED.
The independent data monitoring committee (DMC) performed their assessment on the first 120 patients to complete the study and based on their recommendation, Palatin plans to enroll a total of 350 patients.
No safety concerns were identified by the DMC.
Topline data readout expected in the second quarter of calendar year 2023.
Additional trial information, including inclusion and exclusion criteria, can be found at View Source via the identifier NCT04268069.
PL8177 oral melanocortin agonist for the treatment of ulcerative colitis (UC):
Commenced patient enrollment in a Phase 2 oral formulation study of PL8177 in patients with UC.
Interim assessment is currently expected to occur in the first quarter of calendar year 2023.
Topline data readout is currently expected in the third quarter of calendar year 2023.
Additional trial information, including inclusion and exclusion criteria, can be found at View Source via the identifier NCT05466890.
Vyleesi (bremelanotide injection) / Hypoactive Sexual Desire Disorder (HSDD): Goal of the Vyleesi program is to demonstrate commercial product value in the marketplace with an objective of re-licensing the U.S. rights to a committed women’s healthcare company.
For the fiscal first quarter ended September 30, 2022:
Gross product sales were $2.3 million for the quarter ended September 30, 2022 and the prior quarter, increased 64% over the comparable quarter in 2021.
Net product revenue increased 13% over the prior quarter, increased 445% over the comparable quarter in 2021.
Total prescriptions dispensed increased 17% over the prior quarter, increased 108% compared to the comparable quarter in 2021.
Refill rates, commercial insurance reimbursement, and net revenue per prescription dispensed, increased over the prior quarter and comparable quarter in 2021.
Patients and healthcare providers can learn more about HSDD and Vyleesi at www.vyleesi.com and www.vyleesipro.com
Other:
Registered Direct Offering: On October 31, 2022, Palatin entered into a securities purchase agreement with a certain institutional investor, selling and issuing an aggregate of (i) 1,020,000 shares of Palatin common stock, $0.01 par value per share, (ii) prefunded warrants (the "Pre-Funded Warrants") to purchase up to 798,182 shares of Palatin common stock, and (iii) common warrants (the "Common Warrants") to purchase up to 1,818,182 shares of Palatin common stock. Each share of common stock was offered with one accompanying Common Warrant for a combined offering price of $5.50. Each Pre-Funded Warrant was offered with one accompanying Common Warrant for a combined offering price of $5.4999. The Offering was completed on November 2, 2022. The Common Warrants have an exercise price of $5.83 per share, are exercisable beginning six months after the date of issuance and will expire five and one-half years from the date of issuance. The Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable upon issuance, and will expire when exercised in full.
Reverse Stock Split: The Board of Directors approved the implementation of a 1-for-25 reverse stock split effective as of 5:00 p.m. Eastern Time on August 30, 2022. The reverse stock split reduced the number of shares of Palatin’s common stock outstanding from approximately 231,774,000 shares to approximately 9,271,000 shares but did not change the authorized number of shares of Common Stock, which remain at 300,000,000 shares of Common Stock.
Fiscal First Quarter Ended September 30, 2022 Financial Results

All share and per share amounts are presented on a post-reverse-split basis, giving effect to the 1- for-25 reverse stock split.

Revenue
Total revenue consists of gross product sales of Vyleesi, net of allowances and accruals. Vyleesi gross product sales to pharmacy distributors for the quarter ended September 30, 2022, were $2.3 million, with net product revenue of $869,654, compared to gross product sales of $1.4 million, with net product revenue of $159,482, for the comparable quarter in 2021. Gross product sales increased 64% and net product revenue increased 445% over the comparable quarter in 2021.

Operating Expenses
Total operating expenses for the quarter ended September 30, 2022, were $9.6 million, compared to $7.4 million for the comparable quarter in 2021. The increase in operating expenses was the result of increased research and development expenses primarily related to our ongoing pivotal Phase 3 clinical trial of PL9643 and Phase 2 clinical trial of oral PL8177, offset by decreased commercial expenses related to Vyleesi.

Other Income / (Expenses)
Total other income, net, consist mainly of unrealized foreign currency transaction gains, of $418,376 for the quarter ended September 30, 2022, compared to $107,359 for the comparable quarter in 2021.

Cash Flows
Palatin’s net cash used in operations for the quarter ended September 30, 2022, was $8.6 million, compared to net cash used in operations of $6.4 million for the same period in 2021. The difference in net cash used in operations is mainly due to increased operating expenses in the quarter ended September 30, 2022.

Net Loss
Palatin’s net loss for the quarter ended September 30, 2022, was $8.3 million, or $(0.86) per basic and diluted common share, compared to a net loss of $7.1 million, or $(0.75) per basic and diluted common share for the same period in 2021.

The increase in net loss for the quarter ended September 30, 2022 over the quarter ended September 30, 2021, was mainly due to the increase in operating expenses offset by an increase in net product revenue of Vyleesi.

Cash Position
As of September 30, 2022, Palatin’s cash and cash equivalents were $21.2 million with $2.0 million of accounts receivable, compared to cash and cash equivalents of $29.9 million with $1.8 million of accounts receivable as of June 30, 2022.

The $21.1 million of cash and cash equivalents as of September 30, 2022, does not include $9.1 million of net proceeds from the Registered Direct Offering, which closed in November 2022, and the $15 Million Private Placement of Redeemable Convertible Preferred Stock. This $15 million is being held in an escrow account, pending the investors’ election to redeem the shares for cash or in notes, or convert the shares to common stock. Palatin currently expects an operating cash runway through calendar year 2023.

Conference Call / Webcast

Palatin will host a conference call and audio webcast on November 14, 2022, at 11:00 a.m. Eastern Time to discuss the results of operations in greater detail and provide an update on corporate developments. Individuals interested in listening to the conference call live can dial 1-866-580-3963 (US) or 1-786-697-3501 (International), conference ID 5980994#. The audio webcast and replay can be accessed by logging on to the "Investor/Webcasts" section of Palatin’s website at View Source A telephone and audio webcast replay will be available one hour after the completion of the call. To access the telephone replay, dial 1-866-583-1035 (US) or +44 (0) 20 8196 1480 (International), passcode 5980994#. The webcast and telephone replay will be available through November 21, 2022.

About Melanocortin Receptor Agonists and Inflammation

The melanocortin receptor ("MCr") system has effects on inflammation, immune system responses, metabolism, food intake, and sexual function. There are five melanocortin receptors, MC1r through MC5r. Modulation of these receptors, through use of receptor-specific agonists, which activate receptor function, or receptor-specific antagonists, which block receptor function, can have medically significant pharmacological effects.

Many tissues and immune cells located in the eye (and other places, for example the gut and kidney) express melanocortin receptors, empowering our opportunity to directly activate natural pathways to resolve disease inflammation.

On November 14, 2022 Calliditas Therapeutics reported the European Commission issued the conditional marketing authorization for Kinpeygo, which marked the first time that any drug has achieved approval for this rare disease in EU (Press release, Calliditas Therapeutics, NOV 14, 2022, View Source [SID1234623915]). We immediately started the process of transferring the market authorization to our European partner, STADA Arzneimittel AG, in order to enable a launch in Europe as quickly as possible. STADA is initially launching the product in Germany, with other European countries to follow over time.

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With approval and commercial efforts now ongoing in both the US and Europe, we are looking forward to the regulatory process in China, where our partner, Everest Medicines, expects to receive NDA acceptance notice from NMPA this quarter. We are excited to support Everest as they work with regulators in China, who are expected to reach a decision regarding a potential approval in the second half of next year. If Nefecon is approved, this would be the first and only approved medication for the by Everest estimated 5m biopsy-proven IgAN patients in China.

In the US, we continue to build on our early commercial success. Net sales from TARPEYO grew by 94% when compared to Q2, resulting in net sales from TARPEYO of SEK 123.4 million ($12.1m) for Q3. There is a growing number of nephrologists choosing to prescribe TARPEYO, with 166 new prescribers added in Q3, bringing total unique prescribers to 480 at the end of the quarter. We continue to see a continuous build of interest which mirrors the natural cadence of nephrology visits, which aligns with our expectations regarding this fairly silent, progressive disease. We expect to achieve net sales from TARPEYO for the year of between $35 – 40m, which aligns with our internal plans for 2022. We also expect to see significant continued growth in 2023 as nephrologists become more familiar with the clinical data, access becomes more streamlined, and as topline data from the Part B of the NefIgArd trial becomes available.

We were delighted to be able to have the Part A data published in Kidney International in October, 2022, as regulators also posted their review assessments. This data set, showing increasing reduction of proteinuria across the entire patient population during the 9 months on drug as well as significant continued reduction of proteinuria across the entire study population in the following 3 months when no drug was administered, showing a highly differentiated profile. The significance of this data was further confirmed by countless interactions at the American Society of Nephrology (ASN) Kidney Week in early November, where we had the opportunity to engage not only with KOLs but with the broader nephrology community treating IgAN patients."

CEO Renée Aguiar-Lucander

Summary of Q3 2022
July 1 – September 30
Net sales amounted to SEK 260.1 million, whereof TARPEYO net sales amounted to SEK 123.4 million, for the three months ended September 30, 2022. For the three months ended September 30, 2021 net sales amounted to SEK 198.2 million and no TARPEYO net sales were recognized.
Operating profit/(loss) amounted to (SEK 36.2 million) and SEK 7.9 million for the three months ended September 30, 2022 and 2021, respectively.
Earnings/(loss) per share before and after dilution amounted to (SEK 0.17) and SEK 0.21 for the three months ended September 30, 2022 and 2021, respectively.
Cash amounted to SEK 736.2 million and SEK 1,163.8 million as of September 30, 2022 and 2021, respectively.
Significant events during Q3 2022, in summary
In July 2022, Calliditas announced that the European Commission (EC) granted conditional marketing authorization for Kinpeygo for the treatment of IgA nephropathy (IgAN) in adults at risk of rapid disease progression with a urine protein-to-creatinine ratio (UPCR) ≥1.5 g/gram. Kinpeygo is an orphan medicinal product and became the first and only approved treatment for IgAN in EU. Kinpeygo will be marketed in the European Economic Area (EEA) exclusively by STADA Arzneimittel AG. Subsequently, in September 2022, Calliditas transferred its Market Authorization for Kinpeygo to it European commercial partner, STADA Arzneimittel AG, who will initially launch in Germany, with additional European countries to follow.
Investor Presentation November 14, 2022 14:00 CET
Audio cast with teleconference, Q3 2022

The information in the press release is information that Calliditas is obliged to make public pursuant to the EU Market Abuse Regulation. The information was sent for publication, through the agency of the contact persons set out above, on November 14, 2022 at 07:00 a.m. CET.

On November 14, 2022 Sesen Bio (Nasdaq: SESN) reported operating results for the third quarter ended September 30, 2022, and provided a business update (Press release, Sesen Bio, NOV 14, 2022, View Source [SID1234623287]).

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Business Updates

On September 21, 2022, Sesen Bio announced that it had entered into a definitive merger agreement with Carisma Therapeutics (Carisma). The combined company will focus on the development of Carisma’s chimeric antigen receptor macrophage (CAR-M) therapies, which are believed to be the only therapies of their kind with demonstrated proof of mechanism and safety data in clinical trials.
Immediately following the merger, pre-merger Sesen Bio stockholders are expected to own approximately 41.7% of the combined company and pre-merger Carisma stockholders are expected to own approximately 58.3% of the combined company, in each case before giving effect to a $30.6 million concurrent financing by Carisma and the conversion into shares of common stock of the combined company of a $35.0 million outstanding convertible note from one of Carisma’s key strategic partners, Moderna.

Immediately prior to the closing of the merger, Sesen Bio stockholders of record as of a date agreed to by Sesen Bio and Carisma will be issued a Contingent Value Right (CVR) for each outstanding share of Sesen Bio common stock held as of such date, representing the right to receive contingent cash payments upon the receipt by Sesen Bio of certain proceeds payable by Roche, if any, related to the asset purchase agreement with Roche for EBI-031 and all other IL-6 antagonist monoclonal antibody technology (Roche Asset Purchase Agreement) subject to customary deductions, including for expenses and taxes.

The combined company is expected to have approximately $180.0 million in cash, cash equivalents and marketable securities at the closing of the merger, which is expected to advance Carisma’s pipeline through upcoming catalysts and development milestones across its clinical programs.

The combined company will be led entirely by Carisma’s current management team, which has extensive cell therapy experience and a strong track record in oncology and drug development. This includes Carisma CEO Steven Kelly, who was named Ernst & Young Entrepreneur of the Year 2022 Greater Philadelphia1, and Carisma Chief Scientific Officer and co-founder Michael Klichinsky, Pharm.D., Ph.D.

On July 18, 2022, Sesen Bio announced it was voluntarily pausing further clinical development of Vicineum in the US and that it intends to seek a partner to continue Vicineum’s development. Sesen Bio remains focused on closing the proposed transaction with Carisma while it continues to evaluate potential opportunities for Vicineum.
On November 1, 2022, Carisma announced the acceptance of multiple abstracts to be presented at the upcoming Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 37th Anniversary Annual Meeting in Boston, Massachusetts, which is being held November 8 to November 12, 2022. Accepted abstracts include two abstracts of its clinical trial data, including one for oral presentation, four abstracts of pre-clinical study data, and one abstract overviewing the design of a Phase 1 clinical trial for CT-0508.
Third Quarter 2022 Financial Results

Cash Position: Cash, cash equivalents and marketable securities were $184.9 million as of September 30, 2022, compared to cash and cash equivalents of $162.6 million as of December 31, 2021.
Total Revenue: Total revenue for the three months ended September 30, 2022 was $40.0 million, which was due to the execution of the Roche Asset Purchase Agreement.
R&D Expenses: Research and development expenses were $2.9 million for the three months ended September 30, 2022, compared to $5.0 million for the three months ended September 30, 2021. The decrease of $2.0 million was primarily due to a decrease in costs associated with manufacturing ($1.9 million) and a decrease in other R&D related costs ($0.1 million), driven by the strategic decision to voluntarily pause further development of Vicineum in the US in the third quarter of 2022.
G&A Expenses: General and administrative expenses were $8.1 million for the three months ended September 30, 2022, compared to $8.7 million for the three months ended September 30, 2021. The decrease of $0.6 million was primarily due to a decrease in marketing and commercialization expenses, which were incurred in preparation for potential commercial launch of Vicineum but were discontinued as a result of the Complete Response Letter (CRL) from the US Food and Drug Administration (FDA) received in August 2021 ($2.3 million) and a decrease in professional fees for accounting services ($0.4 million). This was partially offset by an increase in legal expense ($1.3 million), driven by legal fees associated with our assessment of strategic alternatives incurred in the third quarter of 2022 ($2.2 million), partially offset by a decrease in legal fees associated with the internal review ($0.4 million) and other legal expenses ($0.5 million). Additionally, financial advisor fees increased due to the Company’s assessment of strategic alternatives in the third quarter of 2022 ($0.8 million).
Restructuring Charges: Restructuring charges were $10.9 million for the three months ended September 30, 2022, compared to $5.5 million for the three months ended September 30, 2021. Restructuring charges for the third quarter of 2022 consisted of severance and other employee-related costs ($6.9 million) and termination of certain contracts and other associated costs ($4.0 million) associated with the restructuring plan approved on July 15, 2022, following the decision to voluntarily pause further development of Vicineum in the US. Restructuring charges for the third quarter of 2021 consisted of severance and other employee-related costs ($2.8 million) and termination of certain contracts ($2.7 million) associated with the restructuring plan approved on August 30, 2021, following the receipt of the CRL.
Non-Cash Related Expenses:
The Company did not record any intangibles impairment charge for the three months ended September 30, 2022, and the Company recorded an intangibles impairment charge of $31.7 million in the three months ended September 30, 2021. In light of the CRL, the Company performed an interim impairment test for In-Process Research and Development (IPR&D) assets, which resulted in the decrease in fair value of Vicineum’s US rights.
The non-cash change in fair value of contingent consideration was a gain of $1.8 million for the three months ended September 30, 2022, compared to a gain of $114.0 million for the three months ended September 30, 2021. The gain from the fair value of contingent consideration of $1.8 million for the three months ended September 30, 2022, was due to the Company’s conclusion that it no longer expects to make earnout payments to Qilu Pharmaceutical Co., Ltd. for commercialization of Vicineum in the Greater China region. Accordingly, the Company reduced the remaining $1.8 million of contingent consideration liabilities to zero as of September 30, 2022. The gain from the fair value of contingent consideration of $114.0 million for the three months ended September 30, 2021, was primarily due to management’s assessment of a lower probability of regulatory success of Vicineum, and a refinement of associated timelines, following the CRL.
Income Tax Benefit: The Company did not record a benefit or loss for the three months ended September 30, 2022. In the third quarter of 2021, the Company determined that the fair value of the Company’s intangible asset of Vicineum US rights was zero, which resulted in an impairment charge of $31.7 million. In connection with this impairment charge, in the third quarter of 2021, the Company reduced the associated deferred tax liability, which resulted in an income tax benefit of $8.6 million.
Net Income: Net income was $20.5 million, or $0.10 per basic and $0.10 per diluted share, for the third quarter of 2022, compared to $71.7 million, or $0.36 per basic and $0.36 per diluted share, for the third quarter of 2021. The decrease was primarily attributable to unfavorable changes in non-cash related expenses of $89.1 million (including tax benefit) and increased restructuring charges of $5.4 million. This was partially offset by revenue of $40.0 million related to the execution of the Roche Asset Purchase Agreement.
1: Award presented by Ernst & Young; winners are selected by a panel of independent judges based on their demonstration of long-term value through entrepreneurial spirit, purpose, growth and impact, among other core contributions and attributes.