On February 9, 2017 Immunomedics, Inc. (NASDAQ:IMMU) ("Immunomedics" or "the Company") reported financial results for the second quarter ended December 31, 2016 (Filing, Q2, Immunomedics, 2017, FEB 9, 2017, View Source [SID1234517688]). The Company also highlighted recent key developments and planned activities for its clinical pipeline. Schedule your 30 min Free 1stOncology Demo! Second Quarter Fiscal 2017 Results
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Total revenues for the second quarter of fiscal 2017, which ended on December 31, 2016, were $0.4 million, compared to $0.7 million for the same quarter last fiscal year, a decrease of $0.3 million, or approximately 43%. The decrease was due primarily to a $0.3 million decrease in LeukoScan product sales, primarily from a delay in obtaining regulatory approval for new LeukoScan inventory.
Total costs and expenses for the quarter ended December 31, 2016 were $15.7 million, compared to $16.4 million for the same quarter in fiscal 2016, a decrease of $0.7 million or approximately 4%. This decrease was due primarily to $1.5 million reduction in research and development expenses resulting from a $4.6 million reduction in expenses related to the Phase 3 PANCRIT-1 clinical trial, which was terminated during the third quarter of fiscal 2016, and a $0.6 million reduction in manufacturing material purchases compared to the same period in the prior year. These reductions were partially offset by a $3.7 million increase in product development expense related to manufacturing of the antibody drug-conjugate sacituzumab govitecan (IMMU-132). The decrease in research and development expenses was also partially offset by a $1.1 million increase in general and administrative expenses, due primarily to a $0.5 million increase in legal fees and a $0.9 million increase in professional fees associated with the proxy contest commenced by venBio Select Advisor LLC ("venBio"), partially offset by a reduction in employee related costs.
The Company recognized a $7.2 million non-cash expense during the three-month period ended December 31, 2016 reflecting the corresponding increase in the fair value of the warrant liability at December 31, 2016 resulting from the increase of the common stock price from the issuance date of October 11, 2016. Interest expense related to the 4.75% Convertible Senior Notes due 2020 was $1.4 million for both quarters ended December 31, 2016, and December 31, 2015, including amortization of $0.2 million debt issuance costs in each quarter.
There was no income tax benefit for the quarter ended December 31, 2016, compared to $3.2 million income tax benefit for the same quarter in fiscal 2016, which is related to the sale of a portion of our New Jersey State tax net operating losses (NOL) and research and development (R&D) tax credits.
Net loss attributable to stockholders was $24.4 million, or $0.23 per basic and diluted share, for the second quarter of fiscal year 2017, compared to net loss attributable to stockholders of $13.7 million, or $0.15 per basic and diluted share, for the same quarter in fiscal 2016, an increase of $10.7 million, or approximately 78%. The increase was due primarily to the increase in the fair value of the warrant liability of $7.2 million, the receipt of proceeds from the non-recurring $3.2 million NOL and R&D tax credit sale in 2015, and the $1.1 million increase in general and administrative expenses primarily attributable to the proxy contest commenced by venBio, partially offset by a $1.5 million decrease in research and development expenses.
First Half Fiscal 2017 Results
Total revenues for the first half of fiscal 2017 were $1.1 million, compared to $1.4 million for the same period last fiscal year, a decrease of $0.3 million, or approximately 21%. The decrease was due primarily to $0.3 million decrease in LeukoScan product sales, primarily from a delay in obtaining regulatory approval for new LeukoScan inventory.
Total costs and expenses for the six-month period ended December 31, 2016 were $31.4 million, compared to $31.2 million for the same period in fiscal 2016, an increase of $0.2 million or approximately 0.6%. Research and development expenses increased $0.1 million over the prior year due primarily to a $8.4 million increase in product development expense from manufacturing the antibody drug-conjugate sacituzumab govitecan (IMMU-132), which was partially offset by a $7.7 million decrease in expenses related to the early termination of the Phase 3 PANCRIT-1 clinical trial. General and administrative expenses increased $0.1 million compared to the previous year, reflecting an $0.8 million increase in legal fees and a $0.9 million increase in professional fees associated with the proxy contest commenced by venBio, offset by approximately $1.5 million in adjustments for deferred unearned executive bonuses compared to the same period in the prior year.
The Company recognized a $7.2 million non-cash expense during the six-month period ended December 31, 2016 reflecting the corresponding increase in the fair value of the warrant liability at December 31, 2016 resulting from the increase of the common stock price from the issuance date of October 11, 2016. Interest expense related to the 4.75% Convertible Senior Notes due 2020 was $2.7 million for both periods ended December 31, 2016 and December 31, 2015, including amortization of $0.4 million debt issuance costs in each quarter.
There was no income tax benefit for the six-month period ended December 31, 2016, compared to $3.2 million income tax benefit for the same period in fiscal 2016, which is related to the sale of a portion of our New Jersey State tax NOL’s or R&D tax credits.
Net loss attributable to stockholders was $40.7 million, or $0.41 per basic and diluted share, for this period, compared to net loss attributable to stockholders of $29.1 million, or $0.31 per basic and diluted share, for the same period last fiscal year, an increase of $11.6 million, or approximately 40%. The increase was due primarily to the increase in the fair value of the warrant liability of $7.2 million and the receipt of proceeds from the non-recurring $3.2 million NOL and R&D tax credit sale in fiscal 2016.
Cash, cash equivalents, and marketable securities were $46.6 million as of December 31, 2016.
Michael R. Garone, Vice President Finance and Chief Financial Officer, said, "We continue to make significant progress in our efforts to initiate a Phase 3 trial and file a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for accelerated approval of IMMU-132 in patients with metastatic triple-negative breast cancer (TNBC) in mid-2017. As always, we are committed to taking all actions to realize the full potential of our pipeline, including a robust strategic process, and delivering on the significant promise it holds for cancer patients."
Additionally, during the quarter Immunomedics achieved and planned for critical milestones, including:
Sacituzumab Govitecan (IMMU-132)
Updated Phase 2 clinical results in patients with metastatic TNBC were presented at the 2016 San Antonio Breast Cancer Symposium
The Company achieved its target enrollment of 100 assessable TNBC patients with at least two prior therapies required for a BLA submission to the FDA, which is on track for mid-2017
As part of the preparation for the BLA filing, the Company has retained an outside consultant to conduct an independent audit of commercial manufacturing facilities, processes, and other relevant Chemistry, Manufacturing, and Controls matters
New data in metastatic TNBC, urothelial cancer (UC) , non-small-cell lung cancer (NSCLC) and small-cell lung cancer (SCLC) were presented at the Company’s Investor R&D Day in January 2017
Results in patients with metastatic UC will be updated at the 2017 Genitourinary Cancers Symposium in Orlando, Florida