On May 7, 2018 Diplomat Pharmacy, Inc. (NYSE: DPLO), the nation’s largest independent provider of specialty pharmacy services, reported financial results for the quarter ended March 31, 2018 (Press release, Diplomat Speciality Pharmacy, MAY 7, 2018, View Source [SID1234526166]). All comparisons, unless otherwise noted, are to the quarter ended March 31, 2017.

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First Quarter 2018 Highlights include:

Revenue of $1,342 million, compared to $1,079 million, an increase of 24%
Specialty segment revenue of $1,153 million, compared to $1,079 million
PBM segment revenue of $191 million, which was not part of the business in the prior year period
Specialty segment total prescriptions dispensed of 223,000, compared to 220,000
PBM segment total volume, adjusted to 30-day equivalent, of 2,181,000
Gross margin of 8.2% versus 7.9%
Specialty segment gross margin of 8.1% versus 7.9%
PBM segment gross margin of 9.2%
EPS of $(0.01) per diluted common share versus $0.06
Adjusted EPS of $0.20 versus $0.19
Adjusted EBITDA of $39.6 million, compared to $26.8 million
Adjusted EBITDA margin of 3.0% versus 2.5%
Net cash provided by operating activities was $48.6 million, compared to $44.3 million
Net debt, including contingent consideration, reduced to $601.5 million, from $648.7 million at December 31, 2017
Jeff Park, Interim CEO, commented "Diplomat reached a new high mark this quarter in which the incredible team we’ve built executed on our plan and achieved record revenues. Our first quarter demonstrated strong performance in both our Specialty segment and our PBM segment – relaunched last week under its new brand, CastiaRx. Our PBM integration has progressed rapidly, and as our innovation, growth and profitability initiatives continue to gain momentum, we believe we can drive substantial market share gains over time and generate long term value for all our stakeholders."

First Quarter Financial Summary:

Revenue for the first quarter of 2018 was $1,342 million, compared to $1,079 million in the first quarter of 2017, an increase of $263 million or 24%. Revenue was comprised of $1,153 million and $191 million from our Specialty segment and our newly formed Pharmacy Benefit Management ("PBM") segment, respectively. There was a $2.0 million inter-company elimination of revenue, and associated cost of sales, between the segments. The increase in our Specialty segment revenue was primarily driven by $31 million of revenue from our other acquisitions as well as manufacturer price increases, access to dispense drugs that were new in the past year and increased volume through payor relationships. These increases were partially offset by a decrease in hepatitis C business versus the prior year period and drug mix.

Gross profit in the first quarter of 2018 was $110.6 million and generated an 8.2% gross margin, compared to $85.0 million gross profit and 7.9% gross margin in the first quarter of 2017. Gross profit was comprised of $93.0 million and $17.6 million from our Specialty segment and PBM segment, respectively. The gross margin increase in the quarter was primarily due to the impact of our PBM acquisitions, which includes all contracts reflected on a net revenue basis with associated product and service cost of goods, as well as the impact of the acquired entities in our Specialty segment, and manufacturer price increases in the first quarter of 2018 versus the prior year period.

Selling, general, and administrative expenses ("SG&A") for the first quarter of 2018 were $101.9 million, an increase of $25.4 million, compared to $76.5 million in the first quarter of 2017. This increase is primarily driven by $11.5 million related to employee cost, including employee cost for our acquired entities and stock option compensation. Also contributing to the SG&A expense increase was a $7.5 million increase in amortization expense from definite-lived intangible assets, including the capitalized software for internal use, associated with our acquired entities and a one-time $2.1 million severance and merger and acquisition expense associated with our acquired entities. We also experienced increases in other SG&A; including, freight, building and equipment, travel, insurance, and other miscellaneous expenses.

Net (loss) income attributable to Diplomat for the first quarter of 2018 was $(0.5) million compared to $4.4 million in the first quarter of 2017. This decrease was primarily driven by an $8.4 million increase in interest expense due to a significant increase in outstanding debt to fund our PBM acquisitions, partially offset by an income tax benefit of $0.9 million in the first quarter of 2018 versus income tax expense of $2.3 million in the prior year period. The income tax benefit during the first quarter of 2018 was inclusive of a $0.3 million excess tax benefit related to share-based awards. Adjusted EBITDA for the first quarter of 2018 was $39.6 million compared to $26.8 million in the first quarter of 2017, an increase of $12.8 million.

Earnings per share for the first quarter of 2018 was $(0.01), compared to $0.07 for the first quarter of 2017. On a diluted basis, earnings per share was $(0.01) in the first quarter of 2018, compared to $0.06 in the prior year period. Diluted non-GAAP adjusted earnings per share ("Adjusted EPS") was $0.20 in the first quarter of this year compared to $0.19 in the first quarter of 2017.

2018 Financial Outlook

For the full-year 2018, we are increasing our revenue guidance to account for the earlier than anticipated transition to account for revenue in our PBM segment on a gross basis. We are maintaining our previous financial guidance on all other financial measures:

Revenue between $5.5 and $5.9 billion, versus the previous range of $5.3 and $5.6 billion
Net income attributable to Diplomat between $4.5 and $13.0 million
Adjusted EBITDA between $164 and $170 million
Diluted EPS between $0.06 and $0.17
Adjusted EPS between $0.87 and $0.97
Our EPS and Adjusted EPS expectations assume approximately 74,900,000 weighted average common shares outstanding on a diluted basis and a tax rate of 24% and 27%, for the low- and high-end of the range, respectively, for the full year 2018, which could differ materially.

Earnings Conference Call Information

The Company will now hold a conference call to discuss its first quarter performance tomorrow morning, May 8, 2018, at 8:00 a.m. Eastern Time. Shareholders and interested participants may listen to a live broadcast of the conference call by dialing 833-286-5805 (647-689-4450 for international callers) and referencing participant code 5178318 approximately 15 minutes prior to the call. A webcast and audio file of the conference call will be available on the investor relations section of the Company’s website for approximately 90 days at ir.diplomat.is

On May 7, 2018 Delcath Systems, Inc. (OTCQB:DCTHD), an interventional oncology company focused on the treatment of primary and metastatic liver cancers, reported that the Company has initiated its pivotal trial of Melphalan Hydrochloride for Injection for use with the Delcath Hepatic Delivery System (Melphalan/HDS) to treat patients with intrahepatic cholangiocarcinoma (ICC) (Press release, Delcath Systems, MAY 7, 2018, View Source;p=RssLanding&cat=news&id=2347300 [SID1234526165]). Duke Medical Center in Durham, North Carolina is the first cancer center to open for patient enrollment. Dr. Sabino Zani, a surgical oncologist with Duke Medical Center, is serving as the principal investigator for the trial in the United States.

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The trial, entitled A Randomized, Controlled Study to Compare the Efficacy, Safety and Pharmacokinetics of Melphalan/HDS Treatment Given Sequentially Following Cisplatin/Gemcitabine versus Cisplatin/Gemcitabine (Standard of Care) in Patients with Intrahepatic Cholangiocarcinoma, (the ALIGN Trial) will seek to enroll approximately 295 ICC patients at approximately 40 clinical sites in the U.S. and Europe. The trial is being conducted under a Special Protocol Assessment (SPA) agreement reached with the U.S. Food and Drug Administration (FDA) in March 2017. Under the terms of the SPA, the primary endpoint is overall survival (OS) and secondary and exploratory endpoints include safety, progression-free survival (PFS), overall response rate (ORR) and quality-of-life measures. The SPA agreement indicates that the pivotal trial design adequately addresses objectives that, if met, would support regulatory requirements for approval of Melphalan/HDS.

"The ALIGN Trial is based on a strong efficacy signal observed in the ICC tumor type through our commercial experience with CHEMOSAT in Europe," said Jennifer K. Simpson, PhD, MSN, CRNP, President and Chief Executive Officer of Delcath Systems. "The sequential design of the therapies under investigation in the trial will allow us to minimize capital investment requirements in 2018. We are also leveraging our existing network of trial sites from our FOCUS Phase 3 trial to rollout the trial protocol as efficiently as possible, and intend to conduct the trial in a financially prudent manner. In this orphan population where there exists a huge unmet need, this trial provides us with a second pathway to commercial drug approval in the United States, and if successful we believe will be an important value driver for the Company."

On May 7, Cellectis (Euronext Growth: ALCLS – Nasdaq: CLLS), a clinical-stage biopharmaceutical company focused on developing immunotherapies based on gene-edited allogeneic CAR T-cells (UCART), reported its results for the three-month period ended March 31, 2018 (Press release, Cellectis, MAY 7, 2018, file:///C:/Users/LENOVO/Downloads/20180507_PR_Q1_2018%20(1).pdf [SID1234526163]).

(Press release, Cellectis, MAY 7, 2018, file:///C:/Users/LENOVO/Downloads/20180507_PR_Q1_2018%20(1).pdf [SID1234526163])

"2018 is off to a strong start for Cellectis and the message is clear – off-the-shelf, gene edited CAR T-cells are the next wave of innovation in oncology. As leaders and pioneers of this space, we continue to show our excellence, notably in manufacturing, which is a critical segment of the value chain, with the completion of the production of a 3rd UCART product, UCART22, enabling the recent IND filing in ALL. We are also excited about the ongoing clinical development of UCART123 in high-risk AML and BPDCN patients, and we will aim to accelerate our clinical trial timelines. Finally, after close to 4 years of a rewarding and productive partnership with Pfizer, Cellectis is thrilled by the assumption of this partnership by Allogene Therapeutics, Inc., which is a new company that was formed by Dr. Arie Belldegrun and Dr. David Chang, former top executives of Kite Pharmaceuticals. We believe that our collaboration with Allogene opens a huge opportunity to accelerate the development of certain of our allogeneic CAR T-cells that were developed together with Pfizer and Servier," said André Choulika, Chairman and Chief Executive Officer, Cellectis.

"Furthermore, we are humbled by our recent partnership with Prof. George Church and Harvard’s Wyss Institute, utilizing the TALEN gene editing technology in the Genome Recode Project—a project to recode the human genome and create the first ever virus-resistant human cells. This milestone project of modern biology will influence the future of gene editing in human science in this 21st Century."

RECENT CORPORATE HIGHLIGHTS

Cellectis – Therapeutics

IND filing for UCART22 in Acute Lymphoblastic Leukemia (ALL)

On May 2, 2018, Cellectis filed an IND with the FDA for its UCART22 product candidate to be investigated in a Phase I clinical trial in ALL patients. This submission marks the third UCART product candidate IND application.

Harvard’s Wyss Institute partnership on Human Recode Project, part of GP-Write

On May 1, 2018, Cellectis announced that the Recode Project, a part of Genome Project-Write, will use Cellectis’ TALEN gene editing technology to seek to create the first virus-resistant human cells for manufacturing therapeutics and develop new cell-based therapies. The cell lines would be engineered to be able to carry out their normal functions while being resistant to debilitating viral infections, and could offer synthetic biologists opportunities for engineering entirely new functions. The Recode Project is led by Prof. George Church, Core Faculty member at the Wyss Institute, Professor of Genetics at Harvard Medical School (HMS) and of Health Sciences and Technology at Harvard and the Massachusetts Institute of Technology (MIT).

Strategic collaboration with Allogene Therapeutics, Inc.

On April 3, 2018, Pfizer, Inc. ("Pfizer") and Allogene Therapeutics, Inc. ("Allogene") entered into an asset contribution agreement, the closing of which was announced on April 9, 2018, pursuant to which Allogene purchased Pfizer’s portfolio of assets related to allogeneic CAR T-cell therapy (the "Asset Contribution Transaction"), including the Research Collaboration and License Agreement dated June 17, 2014 (as amended from time to time, the "Collaboration Agreement") signed between Pfizer and Cellectis. Cellectis remains eligible to receive clinical and commercial milestone payments of up to $2.8 billion, or $185 million per target for 15 targets, and tiered royalties in the high single digits on net sales of any products that are commercialized by Allogene under the Collaboration Agreement. As part of the Asset Contribution Transaction, Allogene has received Pfizer’s rights to UCART19, which were sub-licensed to Pfizer by Les Laboratoires Servier ("Servier"), which has an exclusive license to UCART19 from Cellectis under the Product Development, Option, License and Commercialization Agreement between Servier and Cellectis dated as of February 17, 2014.

We believe that this alliance with Allogene’s dedicated team will lead to a strong acceleration of CAR T therapies.

$190.5 million raised in a follow-on offering

On April 10, 2018, Cellectis closed a follow-on offering of 5,646,000 American Depositary Shares, each representing one ordinary share of Cellectis ("ADS"), at a public offering price of $31.00 per ADS.

Cellectis reported that on May 4, 2018, the underwriters partially exercised their option to purchase additional ADSs with respect to 500,000 additional ADSs (the "Option"), under the same terms and conditions as the initial offering completed on April 10, 2018 of 5,646,000

ADSs at a public offering price of $31.00 per ADS. The settlement-delivery of the Option is contemplated on May 11, 2018, subject to customary conditions.

Note Regarding Use of Non-GAAP Financial Measures
Cellectis S.A. presents adjusted net income (loss) attributable to shareholders of Cellectis in this press release. Adjusted net income (loss) attributable to shareholders of Cellectis is not a measure calculated in accordance with IFRS. We have included in this press release a reconciliation of this figure to Net income (loss) attributable to shareholders of Cellectis, which is the most directly comparable financial measure calculated in accordance with IFRS.
Because adjusted net income (loss) attributable to shareholders of Cellectis excludes Noncash stock-based compensation expense—a non-cash expense, we believe that this financial measure, when considered together with our IFRS financial statements, can enhance an overall understanding of Cellectis’ financial performance. Moreover, our
management views the Company’s operations, and manages its business, based, in part, on this financial measure. In particular, we believe that the elimination of Non-cash stock-based expenses from Net income (loss) attributable to shareholders of Cellectis can provide a useful measure for period-to-period comparisons of our core businesses. Our use of adjusted net income (loss) attributable to shareholders of Cellectis has limitations as an analytical tool,
and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS. Some of these limitations are: (a) other companies, including companies in our industry which use similar stock-based compensation, may address the impact of Non-cash stock-based compensation expense differently; and (b) other companies may report adjusted net income (loss) attributable to shareholders or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider adjusted net income (loss) attributable to shareholders of Cellectis alongside our IFRS financial results, including Net income (loss) attributable to shareholders of Cellectis

The gross proceeds for the Option are $15.5 million, bringing the total gross proceeds for the follow-on offering, as increased by the Option, to $190.5 million, before deducting the expenses related to the offering and the underwriting discounts and commissions payable by Cellectis.

1) When we have adjusted net loss, in accordance with IFRS, we use the Weighted average
number of outstanding shares, basic to compute the Diluted adjusted net income (loss)
attributable to shareholders of Cellectis ($/share). When we have adjusted net income, in
accordance with IFRS, we use the Weighted average number of outstanding shares, diluted to
compute the Diluted adjusted net income (loss) attributable to shareholders of Cellectis
($/share)

The ADSs are listed on the Nasdaq Global Market under the symbol "CLLS" and Cellectis’ ordinary shares are listed on the Euronext Growth market of Euronext in Paris under the symbol "ALCLS".

The Company intends to use the net proceeds from this offering (i) to establish commercial capabilities, including a proprietary state-of-the-art gene-edited cell manufacturing plant for commercial supplies for its current proprietary immuno-oncology UCART product candidates, (ii) to fund the advancement of one additional UCART product candidate, (iii) to pursue new human therapeutics approaches based on its proprietary gene editing technology outside of oncology and (iv) for working capital and other general corporate purposes.

Elsy Boglioli Named Chief Operating Officer

Following the retirement of Dr. Mathieu Simon as Executive Vice President and Chief Operating Officer, Elsy Boglioli was named Chief Operating Officer in March 2018. Prior to assuming the COO role, Ms. Boglioli served as Executive Vice President, Strategy and Corporate Development. Ms. Boglioli joined Cellectis in December 2017 from The Boston Consulting Group (BCG), where she served as Partner and Managing Director, and leader of BCG’s biotech-focused business in Europe.

Conferences

American Association for Cancer Research (AACR) (Free AACR Whitepaper) 2018 Annual Meeting

Cellectis and its academic partners presented at the AACR (Free AACR Whitepaper) Annual Meeting held in Chicago in April 2018 three posters showcasing the Company’s allogeneic, off-the-shelf, CAR-T product candidates:

Repurposing endogenous immune pathways to improve chimeric antigen receptor T-cells potency;
Preclinical efficacy of allogeneic anti-CD123 CAR T-cells for the therapy of blastic plasmacytoid dendritic cell neoplasm (BPDCN); and
Prediction of immunotherapy outcome by multimodal assessment of minimal residual disease and persistence of allogeneic anti-CD123 CAR T-cells (UCART123) in pre-clinical models of acute myeloid leukemia.

European society for Blood and Marrow Transplantation (EBMT) 2018 Annual Meeting

Preliminary data from the UCART19 clinical trials were presented at the 44th EBMT Annual Meeting in March 2018 in Lisbon, Portugal. UCART19, which is exclusively licensed to Servier, is an investigational allogeneic anti-CD19 CAR T-cell product, being studied in adult and pediatric patients with relapsed or refractory (R/R) CD19-positive B-cell acute lymphoblastic leukemia (B-ALL). Servier is the sponsor of both clinical trials.

Calyxt, Inc. – Cellectis’ plant science subsidiary

As of March 31, 2018, Cellectis owned approximately 79.1% of Calyxt, Inc.’s outstanding common stock. Calyxt’s common stock is listed on the Nasdaq market under the ticker symbol "CLXT". Please refer to Calyxt’s Q1 2018 Earnings Press Release and its quarterly report on Form 10-Q for the period ended March 31, 2018 for further information.

Financial Results

Cellectis’ consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board ("GAAP").

First quarter 2018 Financial Results

Cash: As of March 31, 2018 Cellectis had $282.1 million in total cash, cash equivalents and current financial assets compared to $ 297.0 million as of December 31, 2017. This decrease of $14.9 million primarily reflects (i) the net cash flows used by operating activities of $20.0 million, (ii) the net cash flows provided by investing activities of $0.6 million, partially offset by (iii) the net cash flows provided by financing activities of $3.5 million due to the exercise of Cellectis and Calyxt stock options during the period and (iv) the unrealized positive translation effect of exchange rate fluctuations on U.S. dollar cash and cash equivalents and current financial assets of $2.2 million.

We believe that our cash, cash equivalents and current financial assets, together with the net proceeds from our follow-on offering will be sufficient to fund our operations through 2021.

Revenues and Other Income: During the three-month periods ended March 31, 2017 and 2018, we recorded $10.3 million and $8.1 million, respectively, in revenues and other income. This decrease of $2.2 million is mainly due to (i) a $0.8 million decrease in revenues under our collaboration agreements, of which a $1.1 million decrease relates to lower research and development cost reimbursements, partially offset by a $0.3 million increase in recognition of upfront fees already paid to Cellectis, (ii) a $0.1 million increase in other licenses revenue, and (iii) a $1.5 million decrease in research tax credits due to lower research and development purchases and external expenses during the period that are eligible for the tax credit.

Total Operating Expenses: Total operating expenses for the three-month period ended March 31, 2018 were $33.0 million, compared to $30.0 million for the three-month period ended March 31, 2017. The non-cash stock-based compensation expenses included in these amounts were $12.0 million and $13.6 million, respectively.

R&D Expenses: For the three-month periods ended March 31, 2017 and 2018, research and development expenses decreased by $1.2 million from $19.6 million in 2017 to $18.4 million in 2018. Personnel expenses decreased by $1.8 million from $10.4 million in 2017 to $8.7 million in 2018, primarily due to a $2.7 million decrease in non-cash stock based compensation expense, partly offset by a $0.9 million increase in wages and salaries. Purchases and external expenses increased by $0.2 million from $8.7 million in 2017 to $8.9 million in 2018, mainly due to increased expenses related to payments to third parties participating in product development, purchases of biological raw materials, process development and expenses associated with the use of laboratories and other facilities. Other expenses relate to continuing leasing and other commitments by $0.4 million.

SG&A Expenses: During the three-month periods ended March 31, 2017 and 2018, we recorded $9.7 million and $14.0 million, respectively, of selling, general and administrative expenses. The increase of $4.3 million primarily reflects (i) an increase of $2.5 million in personnel expenses from $7.7 million to $10.2 million, attributable to a $1.4 million increase in wages and salaries, a $1.1 million increase in non-cash stock based compensation expense, (ii) a $1.6 million increase in purchases and external expenses and (iii) a $0.2 million increase of other expenses relate to taxes, various depreciation and amortization and other commitments.

Financial Gain (Loss): The financial loss was de minimis for the three-month period ended March 31, 2017 compared with financial loss of $2.1 million for the three-month period ended March 31, 2018. The change in financial result was mainly attributable to (i) the decrease in net foreign exchange gain ($1.0 million), and (ii) the decrease of foreign exchange derivatives fair value ($1.1 million).

Net Income (Loss) Attributable to Shareholders of Cellectis: During the three-month periods ended March 31, 2017 and 2018, we recorded a net loss attributable to shareholders of Cellectis of $19.8 million (or $0.56 per share) and a net loss attributable to shareholders of Cellectis of $25.4 million (or $0.71 per share), respectively. Adjusted net loss attributable to shareholders of Cellectis for the three-month period ended March 31, 2018 was $14.2 million ($0.39 per share) compared to adjusted net loss attributable to shareholders of Cellectis of $6.2 million ($0.17 per share), for the three-month period ended March 31, 2017. Adjusted loss attributable to shareholders of Cellectis for the three-month periods ended March 31, 2018 and 2017 excludes a non-cash stock-based compensation expense of $11.3 million and $13.6 million, respectively. Please see "Note Regarding Use of Non-GAAP Financial Measures" for a reconciliation of GAAP net income (loss) attributable to shareholders of Cellectis to Adjusted income (loss) attributable to shareholders of Cellectis

On May 7, 2018 Castle Biosciences, Inc., the skin cancer diagnostics company providing molecular diagnostics to improve cancer treatment decisions, reported the presentation of data supporting clinical use of the DecisionDx-Melanoma test to inform sentinel lymph node biopsy (SLNB) recommendations (Press release, Castle Biosciences, MAY 7, 2018, View Source [SID1234526162]). The study was presented as a poster at the American College of Mohs Surgery (ACMS) 50th Annual Meeting in Chicago.

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The study found that the DecisionDx-Melanoma test result can be used with clinicopathologic factors to inform patient discussions and recommendations for SLNB in line with national melanoma clinical practice guidelines.

Study Background:

SLNB is recommended to assess prognosis of melanoma patients. Current guidelines recommend that clinicians discuss the SLNB procedure with patients who have a greater than 5% likelihood of SLN positivity; the guidelines do not generally recommend the procedure if a patient has a less than 5% likelihood of SLN positivity.
Previously, a patient’s risk for SLN positivity has been determined using traditional clinicopathologic features such as Breslow’s thickness and ulceration status. Importantly, it is recognized that older patients have a lower likelihood of SLN positivity but are at higher risk of recurrence and death from melanoma.
The DecisionDx-Melanoma test is a 31-gene expression profile (GEP) test that uses tumor biology to provide an individual risk of recurrence in cutaneous melanoma patients. The validity and performance of the test has been confirmed in three multicenter archival tissue studies involving 690 patients and three prospective studies involving 702 patients. The test has been shown to be an independent predictor of recurrence compared to clinicopathologic factors of Breslow’s thickness, ulceration status, mitotic rate and SLN status.
This study was designed to determine whether the test could be used along with clinicopathologic factors to improve identification of patients with a low likelihood of SLN positivity (<5%) as well as those with a higher likelihood.
Key Study Findings:

Using the DecisionDx-Melanoma GEP test in combination with clinicopathologic factors of age and T category, an algorithm predicting the likelihood of SLN positivity was validated in two independent, prospective, multicenter cohorts totaling 1,421 patients.
For patients with T1-T2 tumors older than 65 years of age who had a Class 1A test result (lowest risk of recurrence), SLN positivity was less than the 5% threshold below which guidelines do not generally recommend the procedure.
For patients with T1-T2 tumors who had a Class 2B test result (highest risk of recurrence), SLN positivity exceeded the 10% threshold for all age groups. Guidelines suggest that patients whose SLN positivity risk exceeds 10% be offered the SLNB procedure.
The impact of not performing SLN biopsy in Class 1A patients was evaluated based on a retrospective dataset of 690 patients with long-term follow-up. At 5 years, Class 1A patients with T1-T2 tumors had a melanoma-specific survival of 99.6%, overall survival of 98.2%, and distant metastasis-free survival of 95.3%.
"The incorporation of the DecisionDx-Melanoma test result, along with tumor thickness and age, helps to identify a group of patients who have a likelihood of a positive sentinel lymph node of less than 5%, suggesting they may be able to safely avoid the SLNB procedure," said Federico Monzon, M.D., FCAP, Chief Medical Officer at Castle Biosciences. "Based on these study results, the DecisionDx-Melanoma test can inform the discussion of SLNB options with melanoma patients and provides an important advance in the management of early stage melanoma patients."

Oral Presentation Features Initial Data from Cutaneous Squamous Cell Carcinoma GEP Test Development Program

Also at the meeting, Dr. Sarah Arron, M.D., Ph.D., Associate Professor in the Department of Dermatology at the University of California San Francisco, presented initial data from Castle Biosciences’ prognostic GEP test in development for cutaneous squamous cell carcinoma (cSCC).

The goal of the development program is to validate a prognostic test that can predict which cSCC patients are at higher risk of metastasis or recurrence and thus inform clinical management decisions. Data from a development cohort of samples show that preliminary predictive models can improve upon current staging methods. These results support the feasibility of the program to develop a clinically valuable test to predict which cSCC patients are at higher risk for recurrence.

"For patients with cutaneous squamous cell carcinoma, accurate prediction of their individual risk of recurrence or metastasis remains a challenge," commented Dr. Arron, who is an investigator for the study. "The development of a prognostic test that improves risk prediction could better inform important management decisions such as optimal surgical procedure, use of adjuvant radiation and selection of patients for SLNB or adjuvant immunotherapy, and has the potential to drive improvements in patient management."

Continued collaborative site recruitment and development activities are ongoing.

About DecisionDx-Melanoma

The DecisionDx-Melanoma test uses tumor biology to predict individual risk of melanoma recurrence and sentinel lymph node positivity independent of traditional factors. Using tissue from the primary melanoma, the test measures the expression of 31 genes. The test has been validated in three multi-center studies that have included 690 patients and have demonstrated consistent results. Performance has also been confirmed in four prospective studies including 702 patients. The consistent high performance and accuracy demonstrated in these studies, which combined have included over 1,300 patients, provides confidence in disease management plans that incorporate DecisionDx-Melanoma test results. Prediction of the likelihood of sentinel lymph node positivity has also been validated in two prospective multicenter studies that included over 1,400 patients. Clinical impact has been demonstrated in multi-center and single-center studies showing that test results impact clinical management decisions for one of every two patients tested. More information about the test and disease can be found at www.SkinMelanoma.com.

On May 7, 2018 ArQule, Inc. (Nasdaq: ARQL) reported its financial results for the first quarter of 2018 (Press release, ArQule, MAY 7, 2018, View Source [SID1234526161]).

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For the quarter ended March 31, 2018, the Company reported a net loss of $6,532,000, or $0.07 per share, compared with net loss of $7,576,000, or $0.11 per share, for the quarter ended March 31, 2017.

At March 31, 2018, the Company had a total of approximately $42,884,000 in cash and marketable securities.

Key Highlights

ARQ 531, our potent and reversible BTK inhibitor, demonstrated good oral bioavailability and pharmacokinetics in data presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) on April 15, 2018. The Phase 1a portion of the Phase 1a/b trial continues to recruit on schedule with no safety concerns, and we plan to present more advanced data at one or more major congresses later in 2018.
Miransertib, our lead proprietary AKT inhibitor, was featured in an oral presentation at AACR (Free AACR Whitepaper) in which it showed positive signs of activity in hormone- sensitive tumors with AKT1 or PI3K dysregulation. The Phase 1b trial of miransertib with anastrozole in patients with advanced endometrial cancer produced one complete response and three partial responses out of 8 patients and continues to recruit.
Miransertib has been granted Orphan Drug Designation by EMA for the rare disease, Proteus syndrome. We continue to make progress with our registrational strategy in Proteus syndrome; in addition, we are progressing our rare disease expansion strategy with the Phase 1/2 trial in PROS and Proteus syndrome which is recruiting on schedule.
The Company granted Basilea Pharmaceutica Ltd. ("Basilea") an exclusive license to develop and commercialize derazantinib, our pan-FGFR inhibitor, in all parts of the world except the People’s Republic of China, Hong Kong, Macau and Taiwan, where the Company has licensed rights to Sinovant Sciences, Ltd., a subsidiary of Roivant Sciences Ltd. Terms of the transaction include a $10 million upfront payment, an additional $326 million in regulatory and commercial milestones, and royalties on net sales ranging from single to double digits; Basilea will be responsible for all costs and expenses of development, manufacture and commercialization in its territory.
"We have continued to build on the momentum that we created during 2017 with presentations of important data at the recent AACR (Free AACR Whitepaper) meeting and the licensing of derazantinib to our partner, Basilea," said Paolo Pucci, Chief Executive Officer of ArQule. "This new partnership further supports our mid-term strategy by allowing us to develop derazantinib in ways that we could not have done on our own and by strengthening our balance sheet thus enabling us to focus more on our BTK and ATK programs in potential fast-to-market settings."

"After a very strong 2017 scientifically, our execution in 2018 continues to be at a high level, highlighted by continuing progress across all pipeline assets," said Brian Schwartz, M.D., Head of Research and Development and Chief Medical Officer of ArQule. "We are approaching therapeutic levels in the dosing of patients in the Phase 1a/b trial with our BTK inhibitor, ARQ 531, and look forward to presenting a comprehensive data set from that trial later this year. The AKT program is also progressing well in both rare diseases and oncology. We are launching an expansion of the Phase 1b trial with miransertib plus anastrozole in patients with advanced endometrial cancers and are executing our registrational strategy for Proteus and PROS."

Revenues and Expenses

Revenues for the quarter ended March 31, 2018, were $4,138,000 compared with revenues of zero for the quarter ended March 31, 2017. Research and development revenue in the quarter ended March 31, 2018 consisted of $3,000,000 from the February 2018 Roivant licensing agreement and $1,138,000 from our October 2017 non-exclusive license agreement for certain library compounds.

Research and development expenses in the first quarter of 2018 were $5,812,000, compared with $5,194,000 for the first quarter 2017.

Research and development expenses increased $0.6 million in the first quarter of 2018 compared to the first quarter of 2017 primarily due to higher outsourced pre-clinical, clinical and product development costs.

General and administrative expenses in the first quarter of 2018 were $2,351,000, compared with $2,074,000 for the first quarter of 2017. General and administrative expenses increased $0.3 million in the first quarter of 2018 compared to the first quarter of 2017 primarily due to higher labor related costs of $0.2 million and professional fees of $0.1 million.

2018 Updated Financial Guidance

As a result of the April 2018 exclusive license agreement with Basilea, our guidance for 2018 is being updated. For 2018, ArQule now expects revenue to range between $14 and $17 million. Net use of cash is expected to range between $27 and $29 million for the year. Net loss is expected to range between $16 and $21 million, and net loss per share to range between $(0.18) and $(0.24) for the year. ArQule expects to end 2018 with between $40 and $42 million in cash and marketable securities.

Conference Call and Webcast

ArQule will hold its first quarter 2018 financial results call today, May 7, 2018 at 9:00 a.m. ET. The live webcast can be accessed in the "Investors & Media" section of our website, www.arqule.com, under "Events & Presentations." You may also listen to the call by dialing (877) 868-1831 within the U.S. or (914) 495-8595 outside the U.S. A replay will be available two hours after the completion of the call and can be accessed in the "Investor and Media" section of our website, www.arqule.com, under "Events & Presentations."