On January 8, 2018 AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) reported a business update, including preliminary unaudited fourth quarter and full year 2017 financial results and 2018 financial guidance (Press release, AMAG Pharmaceuticals, JAN 8, 2018, View Source [SID1234522984]). The company will present further details at the 36th Annual J.P. Morgan Healthcare Conference in San Francisco on Tuesday, January 9, 2018 at 10:00 a.m. PT (1:00 p.m. ET). A live audio webcast of the presentation and following breakout session will be accessible through the Investors section of AMAG’s website at www.amagpharma.com.

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William Heiden, AMAG’s president and chief executive officer, said, "Over the last few years we have transformed AMAG from a one product company into a company with five marketed products and two additional products in development. Today we are reporting double-digit revenue growth in 2017 of more than $600 million, along with strong bottom-line cash generation. Throughout the year, we also achieved many important goals that will be key to our long-term success, including the establishment of our new 200-person women’s health commercial team, the launch of Intrarosa (prasterone), a novel women’s health product, and the filing of supplemental new drug applications to extend our Makena and Feraheme brands."

"Our flexible operating plan supports the 2018 top-line revenue and adjusted EBITDA guidance ranges provided today, which incorporate the opportunities and key risks across our product portfolio. 2018 promises to be an exciting year for AMAG with many key value drivers ahead of us, including potential FDA approvals of the Makena subcutaneous auto-injector and the Feraheme broad label, as well as building on the successful launch of Intrarosa, with approximately 20,000 total prescriptions already written by more than 4,200 healthcare providers since our July 2017 launch," Mr. Heiden concluded.

Preliminary Fourth Quarter and Full Year 2017 Financial Results (unaudited)
Fourth Quarter 2017
AMAG expects total GAAP revenue for the fourth quarter of 2017 to be between $155 million and $162 million, representing approximately 5% growth over the same period in 2016. This includes Makena (hydroxyprogesterone caproate injection) net product sales of between $97 million and $102 million, Feraheme (ferumoxytol) injection and MuGard net product sales of between $26 million and $28 million, Intrarosa (launched in July 2017) net product sales of approximately $2 million, and Cord Blood Registry (CBR) service revenue of approximately $30 million.

AMAG expects total fourth quarter 2017 total non-GAAP revenue to be between $156 million and $163 million, which reflects a $1.4 million purchase accounting adjustment related to CBR deferred revenue.

For the fourth quarter of 2017, AMAG expects an operating loss of between $6 million and $16 million and adjusted EBITDA of between $58 million and $68 million.1

Full Year 2017
AMAG expects 2017 total GAAP revenue to be between $607 million and $614 million, representing 15% growth over 2016. This includes Makena net product sales of between $385 million and $390 million, Feraheme and MuGard net product sales of between $106 million and $108 million, Intrarosa net product sales of approximately $2 million, and CBR service revenue of approximately $114 million.

AMAG expects 2017 total non-GAAP revenue to be between $613 million and $620 million, which reflects a $5.5 million purchase accounting adjustment related to CBR deferred revenue.

For the full year of 2017, AMAG expects an operating loss of between $292 million and $302 million (due primarily to a third quarter non-cash accounting charge) and adjusted EBITDA of between $220 million and $230 million, the higher end of the guidance range.

In 2017, AMAG reduced total debt by approximately 20%, extended average debt maturities, and repurchased and retired approximately 1.4 million shares in the fourth quarter at an average price of $14.27 per share.

The company ended 2017 with approximately $329 million in cash and investments and total debt (principal amount outstanding) of approximately $815 million. In late February 2018, the company expects to report final financial results for the fourth quarter and audited results for full year of 2017.

2018 Financial Guidance
The company is providing the following financial guidance for 2018. This guidance encompasses management’s current assumptions about the potential impact of multiple opportunities and risks across AMAG’s product portfolio, including various potential outcomes of the pending FDA submissions for the Makena subcutaneous auto-injector and the Feraheme label expansion, as well as the entrance of generics to compete with the Makena intramuscular formulation in 2018.

$ in millions 2018 GAAP Guidance 2018 Non-GAAP Guidance
Total revenue $500 – $560 $500 – $560
Operating loss ($147) – ($117) N/A
Adjusted EBITDA N/A $100 – $130

2018 Key Dates and Priorities
•
February 2, 2018: PDUFA date for the expansion of the Feraheme label beyond the current chronic kidney disease (CKD) indication to include all eligible adult patients with iron deficiency anemia (IDA); prepare for first quarter 2018 potential approval and subsequent launch;
•
February 3, 2018: loss of Makena orphan drug exclusivity – While the company is currently ready with a partner to launch its own authorized generic to the intramuscular formulation (IM) as early as February, the company believes that a generic competitor may not enter the market until later in 2018;
•
February 14, 2018: PDUFA date for Makena subcutaneous auto-injector; prepare for first quarter 2018 potential approval and subsequent launch;
•
First quarter 2018: submit bremelanotide new drug application to FDA;
•
Continue to broaden awareness and drive prescriptions of Intrarosa
‒
Increase formulary coverage (65% unrestricted commercial lives covered anticipated by month end);
‒
Increase the number of healthcare professional prescribers (from ~4,200 achieved in 2017);
‒
Increase the number of total prescriptions written (from ~20,000 in 2017);
‒
Increase market share (from year-end weekly NRx share of 2.6%);
‒
Launch digital-to-direct consumer campaign in first half of 2018;
•
Expand CBR first time enrollments; and
•
Further diversify product portfolio through disciplined business development.

"In 2017, we delivered strong top-line and adjusted EBITDA results while investing aggressively in the products that will drive our future growth. We also improved our liability profile so that our balance sheet is better aligned with our evolving business strategy. Finally, we have managed and will continue to manage our expenses carefully to maintain operational flexibility," said Ted Myles, AMAG’s chief financial officer. "​We are guiding to continued positive adjusted EBITDA generation​ in 2018, and with $329 million of cash on hand as of December 31, 2017, ​we are in a strong position to continue to invest in our current products, while remaining active in the search for additional asset acquisitions or licensing transactions that provide durable, long-term growth."

Webcast Information
A live audio webcast of the company’s presentation and the following breakout session, along with the accompanying slide presentation at the 36th Annual J.P. Morgan Healthcare Conference, will be accessible through the Investors section of the company’s website at www.amagpharma.com on January 9, 2018 at 10:00 a.m. P.T. (1:00 p.m. E.T.). Following the conference, the webcast will be archived on the company’s website until February 9, 2018.

Use of Non-GAAP Financial Measures
AMAG has presented certain non-GAAP financial measures, including non-GAAP revenue and non-GAAP adjusted EBITDA (earnings before income taxes, depreciation and amortization). These non-GAAP financial measures exclude certain amounts, revenue, expenses or income, from the corresponding financial measures determined in accordance with accounting principles generally accepted in the U.S. (GAAP). Management believes this non-GAAP information is useful for investors, taken in conjunction with AMAG’s GAAP financial statements, because it provides greater transparency regarding AMAG’s operating performance. Management uses these measures, among other factors, to assess and analyze operational results and trends and to make financial and operational decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of AMAG’s operating results as reported under GAAP, not as a substitute for GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. Reconciliations between these non-GAAP financial measures and the most comparable GAAP financial measures are included in the tables at the conclusion of this press release.

On January 8, 2018 Five Prime Therapeutics, Inc. (Nasdaq:FPRX), a biotechnology company discovering and developing innovative immuno-oncology protein therapeutics, reported that it has achieved a milestone for the first Investigational New Drug (IND) application to the U.S. Food and Drug Administration by Bristol-Myers Squibb Company (BMS) (NYSE:BMY) for a therapeutic candidate under the immune checkpoint pathway discovery collaboration between the companies (Press release, Five Prime Therapeutics, JAN 8, 2018, View Source [SID1234522980]). The first clinical candidate from the collaboration is a fully-human monoclonal antibody targeting TIM-3 (T-cell immunoglobulin and mucin domain-3), an immune checkpoint receptor that is known to limit the duration and magnitude of T-cell responses1. This first IND application triggers a $5 million milestone payment to Five Prime.

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"We are excited to see Bristol-Myers Squibb file an IND for the first innovative immuno-oncology therapeutic candidate to advance to the clinic under our immuno-oncology discovery collaboration," said Bryan Irving, Ph.D. Senior Vice President, Research at Five Prime. "TIM-3 is thought to inhibit the response of T cells and other crucial immune cell types, so blocking this checkpoint pathway could be a promising component of an immuno-oncology strategy to treat a variety of tumors."

Under the terms of the discovery collaboration agreement, BMS has exclusive, worldwide rights to develop and commercialize products directed toward certain protein targets in three checkpoint pathways. Five Prime is eligible to receive up to $300 million in future development, regulatory and sales-based milestone payments for each collaboration target, including TIM-3. Five Prime is also eligible to receive tiered royalties starting from mid-single-digit increasing to low-double-digit percentages of global net sales of each product commercialized by BMS.

In addition, BMS has exercised its option to further extend the research term of the collaboration between the companies for the discovery, development and commercialization of immuno-oncology (I-O) therapies directed toward targets in two additional undisclosed immune checkpoint pathways. BMS has elected to extend the research term to March 2019 and will provide additional funding to Five Prime for the extended term. This is the second extension to the original collaboration term under the agreement that was established in March 2014.

BMS will continue to utilize Five Prime’s discovery capabilities to advance the immune checkpoint programs, including to identify and select drug candidates for preclinical development. Drug candidates developed against targets in these pathways may be studied either as single agents or in combination with approved BMS immuno-oncology therapies or others in development.

On January 8, 2018 Celgene Corporation (NASDAQ:CELG) reported a business update as well as its preliminary 2017 unaudited results and financial guidance for 2018 at the 36th Annual J.P. Morgan Healthcare Conference (Press release, Celgene, JAN 8, 2018, View Source [SID1234522979]). Based on U.S. Generally Accepted Accounting Principles (GAAP), GAAP diluted earnings per share (EPS) for the full-year of 2017 is expected to be in the range of $3.64 to $4.19, a 57 percent year-over-year increase based on the mid-point of the range. Full year 2017 GAAP operating margin is expected to be approximately 36 percent, an increase from 28 percent in the prior year, primarily due to increased product sales. For the fourth quarter 2017, GAAP EPS is expected to be in the range of ($0.09) to $0.46, a 65 percent year-over-year decrease based on the mid-point of the range. Fourth quarter 2017 GAAP operating margin is expected to be approximately 34 percent, an increase from 31 percent in the prior year, primarily due to increased product sales.

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Adjusted EPS is expected to be approximately $7.44 for the full year of 2017, a 25 percent year-over-year increase. Full year 2017 adjusted operating margin is expected to be 58.1 percent, an increase of 310 basis points (bps) year-over-year. For the fourth quarter of 2017, adjusted EPS is expected to be approximately $2.00, a 24 percent year-over-year increase. Fourth quarter 2017 adjusted operating margin is expected to be 55.3 percent, a decrease of 70 bps year-over-year.

"2017 was a strong year for Celgene as we delivered excellent top- and bottom-line growth and achieved critical milestones across our hematology, oncology, inflammation and immunology franchises," said Mark J. Alles, Chief Executive Officer of Celgene. "We are executing on a strategy to achieve our 2020 targets, accelerate portfolio diversification and expand our pipeline of innovative therapies."

Preliminary Q4 and FY 2017 Net Product Sales and Total Revenue are expected to be (Unaudited, in millions):

Q4 2017

Y/Y%

FY 2017

Y/Y%

REVLIMID $2,188 21% $8,187 17%
POMALYST/IMNOVID $442 17% $1,614 23%
OTEZLA $371 22% $1,279 26%
ABRAXANE $251 (6)% $992 2%
Total Revenue $3,483 17% $13,003 16%

Certain activities involved in determining the audited results for the fiscal year ended December 31, 2017 are in-process and could result in the final reported audited results being different from the unaudited results noted in this press release. The ranges of our estimated GAAP diluted earnings per share for the quarter and year ended December 31, 2017 include an estimated financial statement impact of between approximately $800 million and approximately $1,300 million related to the Tax Cuts and Jobs Act ("Tax Act"), which was enacted on December 22, 2017. Our estimate of the impact of the Tax Act is based on currently available information and interpretation of its provisions. Our actual results may materially differ from our current estimate due to, among other things, further guidance that may be issued by U.S. tax authorities or regulatory bodies and/or changes in interpretations and assumptions we have preliminarily made. We will continue to analyze the Tax Act to finalize its financial statement impact, including the mandatory deemed repatriation of foreign earnings, re-measurement of deferred taxes and certain other provisions of the Tax Act. We anticipate finalizing our preliminary analysis and the impact on our December 31, 2017 financial statements by the time we announce our financial results currently anticipated on January 25, 2018. Additionally, please see the attached Use of Non-GAAP Financial Measures and Reconciliation of Estimated/Projected GAAP to Adjusted (Non-GAAP) Measures for further information relevant to the interpretation of adjusted financial measures and reconciliations of these adjusted financial measures to the most comparable GAAP measures, respectively, for each of 2017 and 2018.

Celgene Expects Volume-Driven Product Sales and Earnings Growth in 2018

In 2018, total revenue is expected to be approximately $14.4 billion to $14.8 billion, a 12 percent increase year-over-year, based on the mid-point of the range. Based on GAAP, EPS for the full-year 2018 is expected to be in the range of $6.58 to $6.95, excluding the impact of any strategic transactions, impairments, loss contingencies, changes in the fair value of equity investments and non-operating tax adjustments that have not yet occurred. For the full-year 2018, adjusted diluted EPS is expected to be in the range of $8.70 to $8.90, an 18 percent increase year-over-year, based on the mid-point of the range.

Year-over-Year

Change

Total Revenue $14.4B to $14.8B 12%*
REVLIMID Net Product Sales Approximately $9.4B 15%
POMALYST/ IMNOVID Net Product Sales Approximately $1.9B 18%
OTEZLA Net Product Sales Approximately $1.5B 17%
ABRAXANE Net Product Sales Approximately $1.0B 1%
GAAP diluted EPS $6.58 to $6.95 N/M**
Adjusted diluted EPS $8.70 to $8.90 18%*
GAAP operating margin Approximately 46.5% N/M**
Adjusted operating margin Approximately 60.0% ~ +200 bps
Weighted average diluted shares 775M -34M
Adjusted Tax Rate ~18% ~ +200 bps
*Year-over-year percentage change based on the mid-point of the range.

**Not meaningful as the 2018 measures exclude the impact of any strategic transactions, impairments, loss contingencies, changes in the fair value of equity investments and non-operating tax adjustments that have not yet occurred.

Reaffirming Expected 2020 Long-term Financial Targets

2020 total revenue range of $19.0 billion to $20.0 billion
Adjusted Diluted EPS to exceed $12.50
2018 Expected Operational Milestones

Hematology & Oncology

Regulatory Submissions

Submission of a supplemental New Drug Application (sNDA) to the U.S. Food and Drug Administration (FDA) for REVLIMID in combination with bortezomib and dexamethasone (RVd) in patients with newly diagnosed multiple myeloma (NDMM)
Submission of a New Drug Application (NDA) to the FDA for fedratinib in myelofibrosis
Trial Initiations

Initiate the pivotal program with CC-122 in non-Hodgkin lymphoma (NHL)
Initiate the pivotal program with BGB-A317 (tislelizumab) in non-small cell lung cancer (NSCLC)
Initiate a phase III trial with bb2121 in third-line plus multiple myeloma in collaboration with bluebird bio
Initiate a phase III trial with JCAR017 in transplant-eligible second-line diffuse large B-cell lymphoma (DLBCL) in collaboration with Juno Therapeutics
Initiate the phase III COMMANDS trial with luspatercept in first-line, lower-risk myelodysplastic syndromes (MDS)
Clinical Data

Data from the phase III AUGMENT trial with REVLIMID in combination with rituximab in patients with relapsed and/or refractory follicular lymphoma (FL)
Data from the phase III ROBUST trial with REVLIMID in patients with first-line ABC-subtype DLBCL
Data from the phase III apact trial with ABRAXANE as adjuvant therapy in patients with surgically resected pancreatic cancer
Data from the phase III QUAZAR AML-001 trial with CC-486 as maintenance therapy in post-induction acute myeloid leukemia (AML)
Data from the phase III OPTIMISMM trial with POMALYST in combination with bortezomib and dexamethasone (PVd) in second-line multiple myeloma
Data from the phase III MEDALIST trial with luspatercept in patients with ring sideroblast-positive (RS+) MDS in collaboration with Acceleron Pharma
Data from the phase III BELIEVE trial with luspatercept in patients with beta-thalassemia in collaboration with Acceleron Pharma
Data from phase I/II trial with CC-220 in relapsed and/or refractory multiple myeloma (RRMM)
Trial Enrollment

Complete enrollment in the pivotal KarMMa trial with bb2121 in RRMM in collaboration with bluebird bio
Complete enrollment in the pivotal TRANSCEND WORLD trial with JCAR017 in third-line DLBCL in collaboration with Juno Therapeutics
Inflammation and Immunology

Regulatory Submissions/Decisions

FDA decision on the submission of an NDA for ozanimod in patients with relapsing multiple sclerosis (RMS)
FDA decision on the submission of an sNDA for OTEZLA once-daily formulation
Submission of an sNDA for OTEZLA in Behçet’s disease
Submission of a Marketing Authorization Application (MAA) for ozanimod in RMS
Trial Initiations

Initiate a phase III trial with OTEZLA in ulcerative colitis
Initiate a phase III trial with OTEZLA in mild-to-moderate psoriasis
Initiate a phase III trial with ozanimod in secondary progressive multiple sclerosis (SPMS)
Clinical Data

Data from a phase III trial with OTEZLA in scalp psoriasis
Data from a phase II trial with OTEZLA in ulcerative colitis to be presented at a medical meeting in the first quarter of 2018

Trial Enrollment

Complete enrollment in the phase III TRUE NORTH trial with ozanimod in ulcerative colitis
Research and Early Development

File at least 5 Investigational New Drug (IND) or Clinical Trial Applications (CTA) for novel assets

On January 8, 2018 TG Therapeutics, Inc. (NASDAQ:TGTX) (or "TG") and Jiangsu Hengrui Medicine Co., Ltd. (SSE:600276) (or "Hengrui") reported that the companies have entered into an exclusive global license agreement pursuant to which TG Therapeutics will obtain worldwide rights, excluding Asia but including Japan, for the development of Hengrui’s Bruton’s Tyrosine Kinase (BTK) inhibitor program, including lead candidate TG-1701 (known in China as SHR-1459), as monotherapy and in combination with ublituximab (TG-1101), TG’s glycoengineered anti-CD20 monoclonal antibody, and umbralisib (TGR-1202), TG’s next generation PI3K-delta inhibitor (Press release, TG Therapeutics, JAN 8, 2018, View Source [SID1234523028]). In addition to TG-1701, the global license agreement covers TG-1702 (SHR-1266), another BTK inhibitor in pre-clinical development.

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Under the terms of the agreement, Hengrui will receive an up-front licensing fee and near-term milestones, payable in TG common stock, and will be eligible to receive additional payments contingent on certain clinical, regulatory, and commercial milestones, totaling approximately $350MM, as well as tiered royalties on net sales.

TG-1701 (SHR-1459) and TG-1702 (SHR-1266) are orally available, covalently-bound BTK inhibitors that exhibit superior selectivity to BTK compared to ibrutinib in in vitro kinase screening. Hengrui commenced a Phase 1 clinical trial for TG-1701 (SHR-1459) in China in December 2017 while TG-1702 (SHR-1266) is in pre-clinical development.

Previously, TG reported that the triple combination of ublituximab, umbralisib, and the BTK inhibitor ibrutinib, resulted in a 100% Overall Response Rate (ORR) among 19 treated patients with Chronic Lymphocytic Leukemia (CLL)/Small Lymphocytic Lymphoma (SLL), an 86% ORR among 7 treated patients with iNHL (Follicular Lymphoma and Marginal Zone Lymphoma) and 100% ORR in the 4 treated patients with Mantle Cell Lymphoma (MCL).

Michael S. Weiss, Executive Chairman and Chief Executive Officer of TG Therapeutics stated, "We are pleased to be partnering with one of the leading Chinese biopharmaceutical companies. We have been evaluating potential BTK inhibitors for quite some time and we were really impressed with Hengrui’s research that led to the development of these two highly selective BTK inhibitors. We believe TG-1701 could be comparable to the best-in-class BTK inhibitors and in combination with ublituximab and umbralisib, could represent a truly unique triple combination treatment option across CLL and NHL." Mr. Weiss continued, "With our UNITY program, we have pivotal and registration directed trials either already fully enrolled or enrolling across CLL and NHL for our U2 combination of umbralisib + ublituximab, and for umbralisib as a single agent. With this license, we have taken a major step toward the development of a next generation, wholly-owned, proprietary, triplet therapy. Our goal is to advance TG-1701 into the clinic as quickly as possible in the first half of this year."

"TG Therapeutics has a distinctive strategy towards addressing B-cell lymphomas, employing unique combination strategies to harness key drivers of oncogenesis based on a portfolio of differentiated assets," said Lianshan Zhang, Ph.D., President of Global R&D of Hengrui. "We have been very impressed by the leadership at TG Therapeutics and their vision in re-defining the treatment landscape for lymphoma patients."

"Our steadfast commitment towards providing better and safer medicines for patients has propelled Hengrui to be a leading biopharmaceutical company in China," said Piaoyang Sun, Ph.D., Chairman of Hengrui. "In recent years we have worked hard to generate and develop novel, potentially high impact oncology assets across modalities including immuno-oncology, targeted therapies, hormonal therapies, antibody-drug conjugates, oncolytic viruses, and epigenetics, among others. Hengrui is absolutely delighted to be a partner of TG Therapeutics to jointly make a difference for patients who suffer hematology malignancies around the world."

ABOUT BTK INHIBITORS

Bruton’s tyrosine kinase (BTK) is an essential component of the B-cell receptor signaling pathways that regulate the survival, activation, proliferation, and differentiation of B lymphocytes. Targeting BTK with small molecule inhibitors has been demonstrated to be an effective treatment option for B-cell lymphomas and autoimmune diseases.

On January 8, 2018 Moderna Therapeutics, a clinical stage biotechnology company that is pioneering messenger RNA (mRNA) therapeutics and vaccines to create a new generation of transformative medicines for high unmet medical needs in patients, reported important advances in its mRNA development pipeline, demonstrating the increasing productivity of its platform, including its first mRNA program to enter phase 2, new infectious disease vaccine and oncology programs entered into Phase 1 clinical studies, and the ongoing expansion of its pipeline with several new development candidates (DCs) (Press release, Moderna Therapeutics, JAN 8, 2018, View Source [SID1234523026]). A leader in mRNA science and development, Moderna continues to make notable progress across its broad, diverse pipeline, which now includes 19 mRNA drug candidates spanning infectious diseases, immuno-oncology, rare diseases and cardiovascular diseases.

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Moderna’s Chief Executive Officer Stéphane Bancel detailed company strategy and progress today at the 36th Annual J.P. Morgan Healthcare Conference in San Francisco.

The company reported several new advances including:

A Phase 2a study of mRNA AZD8601, a localized mRNA therapeutic encoding for vascular endothelial growth factor, VEGF-A, being developed in partnership with AstraZeneca. Information on the clinical study, including design and target indication, will be detailed in the coming weeks. Led by AstraZeneca, this will be Moderna’s first phase 2 study.

A new development candidate, mRNA-3927, for a rare disease within the liver modality. mRNA-3927 directs liver expression of a deficient enzyme in patients with propionic acidemia (PA), a serious and potentially life-threatening rare disease, which is part of a family of disorders known as organic acidemias. There are no approved therapies or ongoing clinical trials for PA. In September, Moderna announced its first rare disease DC, mRNA-3704, to treat methylmalonic acidemia, or MMA, another serious and often deadly organic acidemia.

The filing of an investigational new drug (IND) application for mRNA-5671, a KRAS cancer vaccine. KRAS is one of the most frequently mutated oncogenes in human cancer (approximately 30 percent of all cases). mRNA-5671 encodes for the four most commonly found KRAS mutations, which will cover most of the mutations that occur in non-small cell lung cancer, colorectal cancer and pancreatic cancer.

The initiation of two phase 1 prophylactic vaccine studies for mRNA-1647, a cytomegalovirus (CMV) vaccine, and mRNA-1653, a human metapneumovirus and parainfluenza virus type 3 (HMPV+PIV3) combination vaccine. CMV is the most common cause of newborn disability and the most frequent viral disease in transplant recipients, often leading to transplant failure. mRNA-1647 is made of 6 mRNAs, one coding for the herpesvirus glycoprotein (gB) antigen and 5 coding for the pentamer. HMPV and PIV3 are the second and third most common causes, respectively, of lower respiratory hospitalizations in children, behind respiratory syncytial virus (RSV). Currently, there are no approved vaccines for CMV, HMPV or PIV3.

A new development candidate, mRNA-1944, which directs liver expression of an antibody that can potentially neutralize chikungunya virus circulating in the blood. Moderna has a Phase 1 study underway for a prophylactic vaccine, mRNA-1388, to prevent infection from the chikungunya virus. An antibody approach would be more desirable in certain settings, such as in immuno-compromised populations, when rapid post-exposure treatment or prophylaxis is warranted, or when protection is needed only for short periods of time. This program is sponsored by DARPA.

"We are proud of the progress we have made over the past year as we continue to see real development pipeline momentum and productivity from our platform, and continue to deliver to the clinic important advances in mRNA science. We have achieved critical milestones in R&D, having gone from four clinical programs at the beginning of the year to now having 10 medicines in human testing, and our intention is to continue to rapidly advance our pipeline with an array of new development programs," said Bancel. "2016 was the year of mRNA vaccines in the clinic. 2017 was the year of several mRNA therapeutics in the clinic. In 2018, we will continue to evolve our pipeline of mRNA therapeutics, specifically focusing on discovering new rare disease drug candidates, while remaining committed to advancing new vaccine development candidates to address serious unmet needs. We also will continue to work toward a summer 2018 opening and rolling scale-up of our GMP clinical mRNA manufacturing facility, which is a cornerstone of our long-term strategy to move multiple development programs simultaneously into and through phase 1, phase 2, and phase 3 clinical studies."

As of today, nearly 700 subjects have been dosed across Moderna’s internally developed and partnered clinical programs with AstraZeneca and Merck. Moderna’s full pipeline can be found here.

2018 Strategic Priorities
During today’s presentation, Mr. Bancel outlined Moderna’s key strategic priorities for 2018 which include:

Effective execution of the development pipeline by continuing to advance programs through clinical study and by moving additional development programs into the clinic;

Emphasis on the discovery of new rare disease development candidates and new prophylactic vaccines to address high unmet medical needs;

Continued investment in the evolution of the company’s mRNA platform, including exploring new modalities to expand the application of its technology in new therapeutic areas;

Completion of construction of the company’s 200,000 square foot GMP mRNA clinical manufacturing facility in Norwood, Mass., with an anticipated opening in the summer of 2018 and subsequent rolling scale-up of the facility.

Detailed Q4 2017 Clinical and Development Program Updates
Moderna’s pipeline spans five modalities: prophylactic vaccines, therapeutic vaccines, intratumoral immuno-oncology therapeutics, localized therapeutics and liver therapeutics. Following are advances from across modalities since the company’s September business update:

Commercial Prophylactic Vaccines

Initiation of Phase 1 study of mRNA-1647, a cytomegalovirus (CMV) vaccine: The Phase 1, placebo-controlled multi-center study of mRNA-1647 began dosing patients in November 2017, and will assess safety, tolerability and immunogenicity. [clinicaltrials.gov listing]. A complex vaccine, mRNA-1647 consists of six mRNAs, including five proteins (gH, gL, UL128, UL130 and UL131A) designed to express the pentamer complex, and another CMV antigen, the herpesvirus glycoprotein (gB) protein. CMV is the most common cause of newborn disability, leading to deafness, microcephaly (small, not fully developed heads and severe disabilities), vision loss and mental deficiencies, among other serious complications. It is also the most frequent viral disease in transplant recipients, often leading to transplant failure. Currently, there is no approved vaccine for CMV.

Initiation of Phase 1 study of mRNA-1653, a combination human metapneumovirus and parainfluenza virus type 3 (HMPV+PIV3) vaccine: The placebo-controlled, multi-site Phase 1 study of mRNA-1653 began dosing patients in December 2017 and will assess for safety, tolerability, and immunogenicity. HMPV and PIV3 typically cause mild respiratory illness, but can become severe in young children, the elderly and other immunocompromised adults. HMPV and PIV3 are the second and third most common causes, respectively, of lower respiratory hospitalizations in children, behind RSV. Currently, there is no approved vaccine for either HMPV or PIV3.

Publications: in September, Moderna announced a publication in the August issue of Molecular Therapy that provides mechanistic insights about its mRNA prophylactic vaccines. The research, led by Professor Karin Loré, Ph.D., and her group at the Karolinska Institutet in Stockholm, Sweden, characterizes how Moderna’s vaccines target key antigen-presenting cells, leading to both B cell and T cell activation, which yields a potent immune response. Two additional papers based on Dr. Lore’s work offer additional insights into the method of action of Moderna’s vaccine technology. A paper published in November 2017 in Frontiers in Immunology demonstrates that Moderna vaccine technology is able to stimulate a type of B cell that makes high-quality, antigen-specific antibodies consistent with high seroconversion rates in humans. A second paper published in November in the Journal of Immunology, shows that Moderna’s vaccine technology produces a desirable kinetic immune activation and subsequent suppression by myeloid derived suppressor cells (MDSCs), which are major regulators of T- cell responses.

Moderna also continues to advance vaccines in collaboration with government agencies and non-government organizations to address major public health issues. The company is furthering its efforts through its current contract with the Biomedical Advanced Research and Development Agency (BARDA) – part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services – to develop an mRNA Zika vaccine, now including a head-to-head comparison of two potential mRNA candidates (mRNA 1325 and mRNA 1893) through Phase 1, after which it will determine the best candidate for further clinical development to BLA submission for licensure.

Therapeutic Vaccines

Initiation of Phase 1 study of personalized cancer vaccine (PCV), mRNA-4157 (KEYNOTE-603): In November, Moderna announced that it has initiated dosing for a Phase 1 study of its PCV. The Phase 1 open-label, dose escalation, multicenter study in the United States will assess the safety, tolerability and immunogenicity of mRNA-4157 alone in subjects with resected solid tumors and in combination with KEYTRUDA (pembrolizumab), an anti-PD-1 therapy, marketed by Merck (known as MSD outside the U.S. and Canada) in subjects with unresectable solid tumors. Moderna has a strategic collaboration with Merck to develop PCVs in collaboration with KEYTRUDA. Moderna first identifies neoepitopes present in a patient’s tumor and then creates an mRNA-based PCV encoding for approximately 20 neoepitopes. When injected into the patient, the mRNA-based PCV directs the patient’s cells to express the selected neoepitopes. In turn, this may help the patient’s immune system better recognize cancer cells as foreign and eradicate them. mRNA-4157 also has the potential to enhance clinical outcomes associated with checkpoint inhibitor therapies. Leveraging its rapid cycle time, small-batch manufacturing technique and digital infrastructure, Moderna plans to manufacture and supply each individually tailored and manufactured PCV to patients within weeks.

Investigational new drug (IND) application filed for mRNA-5671, a KRAS cancer vaccine: KRAS is one of the most frequently mutated oncogenes in human cancer (approximately 30% of all cases). KRAS mutations are found principally in non-small cell lung cancer (NSCLC), colorectal cancer and pancreatic cancer, and are associated with worse outcomes. Hotspots of KRAS mutations are found in different tumor types and can serve as tumor rejection epitopes. Presentation of these epitopes to the immune system may elicit a robust anti-tumor response. mRNA-5671 encodes for the four most commonly found KRAS mutations, which will cover most of the mutations that occur in NSCLC, colorectal cancer and pancreatic cancer.

National Cancer Institute (NCI) to study mRNA-based PCV: In collaboration with Moderna, the Surgery Branch of the NCI’s Center for Cancer Research plans to sponsor a Phase 1/2 study to investigate the safety and immunogenicity of mRNA-based PCVs for patients under the direction of Steven A. Rosenberg, M.D., Ph.D., Chief of Surgery, NCI. As part of this collaboration, Moderna will manufacture mRNA-based personalized cancer vaccines (NCI-4650) for up to 12 patients with advanced-stage, metastatic cancers.
Localized Therapeutics

Phase 2a study of mRNA AZD-8601: Phase 2a study of mRNA AZD8601: Dosing of patients is anticipated for early in the first quarter of 2018 for the Phase 2a study of mRNA AZD8601, a localized mRNA therapeutic encoding for vascular endothelial growth factor, VEGF-A. The mRNA AZD8601 program is led by AstraZeneca. Data from a Phase 1 randomized, double-blind, placebo-controlled, single ascending dose study that assessed the safety, tolerability and pharmacokinetics (PK) of mRNA AZD8601 after single dose administration in male patients with Type 2 diabetes mellitus are expected to be presented at a scientific congress and published in 2018.
Liver Therapeutics

Naming of pre-clinical development candidate mRNA-3927, encoding an intracellular enzyme to treat Propionic Acidemia (PA): PA is a rare, autosomal recessive organic acidemia/aciduria caused by a mitochondrial enzyme deficiency in propionyl-CoA carboxylase (PCC) due to mutations in PCCA (PA type I) or PCCB (PA type II). mRNA-3927 combines mRNA-encoded proteins for both the PCCA and PCCB enzyme components with the goal of addressing all PA subtypes. PA is a natural follow-on to the MMA program, as both are organic acidemias with defective enzymes along the same metabolic pathway. PA is a rare disease with no approved therapy. The disorder typically impacts newborn children, and patients with PA often present acutely with metabolic acidosis, cardiac arrhythmias and hyperammonemia causing severe central nervous system dysfunction.

Naming of pre-clinical development candidate mRNA-1944, encoding an antibody against the chikungunya virus: mRNA-1944 encodes for an antibody that can neutralize the chikungunya virus circulating in the blood. Moderna has a Phase 1 study underway for a prophylactic mRNA vaccine (mRNA-1388) to prevent infection from chikungunya virus. However, in certain situations, such as in immuno-compromised populations, when rapid post-exposure treatment or prophylaxis is warranted, or when protection is needed only for short periods (three to six months), an antibody approach is desirable. Chikungunya typically causes mild fever and transient joint pain. In approximately 15 percent of infected patients, it can cause long-term, severe arthritis. Chikungunya historically has been limited to warmer climates in Asia and Africa, but recent cases have been identified in the Americas and Europe. There is no approved vaccine or treatment for chikungunya.

Collaboration for mRNA AZD-7970, encoding the secreted protein relaxin to treat heart failure: In November, Moderna and AstraZeneca announced a new strategic agreement to co-develop and co-commercialize mRNA AZD-7970, which is designed to instruct cells in the body to produce and express relaxin, a secreted protein with systemic effect. Heart failure occurs when the heart is weakened and cannot pump enough blood to meet the body’s needs. Biologic functions for relaxin suggest that expression of the hormone may directly impact underlying conditions that exacerbate heart failure, leading to the regrowth of heart tissue, controlling inflammation, reordering the extracellular matrix, improving renal function, and relieving hepatic portal pressure.

Publications: In December, Moderna announced the publication of preclinical data supporting its first rare disease development program, mRNA-3704, a therapeutic for methylmalonic acidemia (MMA), a serious and often life-threatening organic acidemia disorder. The data, published in the journal Cell Reports, demonstrate that intravenous (IV) administration of an mRNA therapeutic encoding for human methylmalonyl-CoA mutase (hMUT), the enzyme most frequently mutated in MMA, enabled liver expression of hMUT in MMA mouse models, leading to a significant reduction in methylmalonic acid and complete survival of treated mice versus control group with a dramatic improvement in weight gain. Repeat IV dosing did not increase markers of liver toxicity or inflammation. The study was conducted in partnership with researchers at the Medical Genomics and Metabolic Genetics Branch of the National Human Genome Research Institute at the National Institutes of Health.

Q4 2017 AND RECENT BUSINESS/FINANCIAL UPDATES
Board of Directors and Organizational Updates

John Mendlein joined Moderna as President, Corporate and Product Strategy. Earlier this month, Moderna announced that John Mendlein, Ph.D., joined the company as President, Corporate and Product Strategy. In this role, Dr. Mendlein will be responsible for corporate strategy, product advancement and strategy, partnering and product protection. He will serve on Moderna’s Executive Committee and report to Chief Executive Officer Stéphane Bancel.

Dr. Mendlein has helped start and lead numerous innovative life sciences companies. He is Vice Chairman of the Board and a founder of Fate Therapeutics, Inc., and holds board positions with Editas Medicine, Inc., and Axcella Health, Inc. He also serves on the Biotechnology Industry Organization ("BIO") emerging companies board. Dr. Mendlein previously served as the Chief Executive Officer of aTyr Pharma, and Fate Therapeutics, as well as Adnexus Therapeutics, Inc., (acquired by BMS). Before that, he served as Chairman and Chief Executive Officer of Affinium Pharmaceuticals, Ltd. (acquired by Debiopharm Group), and as a board member, General Counsel and Chief Knowledge Officer at Aurora Bioscience Corporation (acquired by Vertex Pharmaceuticals).

Stephen Berenson appointed to Board of Directors. In October, Moderna announced that Stephen Berenson was joining the company’s Board of Directors. Mr. Berenson, who joined Flagship Pioneering in June of 2017, previously served for 12 years as the Vice Chairman of Investment Banking at J.P. Morgan, and focused on providing high-touch strategic advice and complex transaction execution to leading companies across all industries globally. In total, Mr. Berenson spent more than 33 years with J.P. Morgan as an investment banker, where he worked across all major geographies, product areas and industry groups. He played key roles in building J.P. Morgan’s M&A, equities and technology investment banking businesses.

Continued growth across organization: In 2016, Moderna expanded its headcount from approximately 500 to nearly 600 team members.

Continued strong cash position: Moderna maintained a strong cash position in 2017. As of December 31, 2017, the company had approximately $910 million in cash, as compared to $1.306 billion in cash as of December 31, 2016.
2017 cash inflows: From reimbursement, product milestones and investment income was approximately $55 million.
Significant investments in the business: Moderna’s cash operating expense and capital expenditures in 2017 totaled approximately $455 million.