On October 24, 2017 Illumina, Inc. (NASDAQ:ILMN) reported its financial results for the third quarter of fiscal year 2017.

Third quarter 2017 results:
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Revenue of $714 million, an 18% increase compared to $607 million in the third quarter of 2016
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GAAP net income attributable to Illumina stockholders for the quarter of $163 million, or $1.11 per diluted share, compared to $129 million, or $0.87 per diluted share, for the third quarter of 2016
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Non-GAAP net income attributable to Illumina stockholders for the quarter of $163 million, or $1.11 per diluted share, compared to $144 million, or $0.97 per diluted share, for the third quarter of 2016 (see the table entitled “Itemized Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders” for a reconciliation of these GAAP and non-GAAP financial measures)
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Cash flow from operations of $235 million compared to $176 million in the third quarter of 2016
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Free cash flow (cash flow from operations less capital expenditures) of $153 million for the quarter, compared to $119 million in the third quarter of 2016

Gross margin in the third quarter of 2017 was 67.5% compared to 70.2% in the prior year period. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 68.8% for the third quarter of 2017 compared to 72.0% in the prior year period.

Research and development (R&D) expenses for the third quarter of 2017 were $134 million compared to $126 million in the prior year period. R&D expenses as a percentage of revenue were 18.7%, including 0.8% attributable to Helix. This compares to 20.7% in the prior year period, including 2.4% attributable to GRAIL and Helix.

Selling, general and administrative (SG&A) expenses for the third quarter of 2017 were $167 million compared to $139 million in the prior year period. Excluding the amortization of acquired intangible assets, SG&A expenses as a percentage of revenue were 23.2%, including 1.7% attributable to Helix. This compares to 22.6% in the prior year period, including 1.5% attributable to GRAIL and Helix.

Depreciation and amortization expenses were $40 million and capital expenditures for free cash flow purposes were $82 million during the third quarter of 2017. At the close of the quarter, the company held $2.0 billion in cash, cash equivalents and short-term investments, compared to $1.6 billion as of January 1, 2017.

“We delivered strong financial results in the third quarter with revenue growth across both our sequencing and microarray portfolios,” said Francis deSouza, President and CEO. “NovaSeqTM momentum continued to grow in the third quarter, with close to 200 NovaSeq systems now in customers’ hands. Further innovations, including the recently launched S4 flow cell, Xp workflow and Nextera DNA Flex library preparation kit, are expected to fuel incremental NovaSeq demand.”

Updates since our last earnings release:

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Released the NovaSeq S4 flow cell, reagent kit for the NovaSeq 6000 System, delivering up to 6TB of output in two days
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Announced the upcoming availability of NovaSeq Xp workflow, enabling users to load libraries directly into individual lanes of the flow cells, further enhancing the flexibility of the NovaSeq 6000 System
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Launched the Nextera DNA Flex library preparation kit, offering a fast, integrated workflow for a wide variety of applications
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Announced Verogen, Inc., a newly established independent company focused on accelerating growth of Illumina’s next-generation sequencing technology in the forensic genomics market
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Repurchased $75 million of common stock in the third quarter under the previously announced share repurchase program

Financial outlook and guidance
The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.

For fiscal 2017, the company now projects approximately 13% revenue growth from fiscal 2016, GAAP earnings per diluted share attributable to Illumina stockholders of $5.56 to $5.61 and non-GAAP earnings per diluted share attributable to Illumina stockholders of $3.73 to $3.78.

Quarterly conference call information
The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Tuesday, October 24, 2017. Interested parties may access the live teleconference through the Investor Relations section of Illumina’s web site under the “company” tab at www.illumina.com. Alternatively, individuals can access the call by dialing 888-771-4371, or 1-847-585-4405 outside North America, both with passcode 45640029.

A replay of the conference call will be available from 4:30 pm Pacific Time (7:30 pm Eastern Time) on October 24, 2017 through October 31, 2017 by dialing 888-843-7419, or 1-630-652-3042 outside North America, both with passcode 45640029.

Statement regarding use of non-GAAP financial measures
The company reports non-GAAP results for diluted net income per share, net income, gross margins, operating expenses, operating margins, other income, and free cash flow in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company’s financial measures under GAAP include substantial charges such as amortization of acquired intangible assets, non-cash interest expense associated with the company’s convertible debt instruments that may be settled in cash, and others that are listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Additionally, non-GAAP net income attributable to Illumina stockholders and diluted earnings per share attributable to Illumina stockholders are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.

The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

Use of forward-looking statements
This release contains forward-looking statements that involve risks and uncertainties, such as Illumina’s expectations regarding the launch of new products. Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are (i) our ability to further develop and commercialize our instruments and consumables and to deploy new products, services, and applications, and expand the markets, for our technology platforms; (ii) our ability to manufacture robust instrumentation and consumables; (iii) our ability to successfully identify and integrate acquired technologies, products, or businesses; (iv) our expectations and beliefs regarding future conduct and growth of the business and the markets in which we operate; (v) challenges inherent in developing, manufacturing, and launching new products and services, including the timing of customer orders and impact on existing products and services; and (vi) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update

these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current quarter.

On October 24, 2017 Cellectar Biosciences, Inc. (Nasdaq: CLRB), an oncology-focused, clinical stage biotechnology company (the “company”), reported the design of the multiple dose fifth cohort of its Phase I dose escalation safety trial of lead PDC compound, CLR 131, in relapse or refractory multiple myeloma (Press release, Cellectar Biosciences, OCT 24, 2017, View Source [SID1234521126]). Cohort 5 will utilize two 15.625 mCI/m2 doses given one week apart with the total combined dose equaling 31.25 mCi/m2, the same total dose provided to patients that resulted in a partial response in Cohort 4. In previous cohorts, CLR 131 was given in a single infusion.

In September, the trial’s Data Monitoring Committee (DMC) determined that the fourth cohort single dose of 31.25 mCi/m2 was safe and tolerated. In addition, the DMC determined that the use of a split, or repeat dose might be advantageous. Given internal company data and recently announced results of preclinical studies in which 2 doses of CLR 131 demonstrated a statistically significant improvement in survival benefits and reduction of tumor volume in multiple mouse models (April 27, 2017), the company has enhanced the study’s protocol such that subsequent cohorts will include repeat dosing.

“Given the encouraging results we’ve observed to date in previous cohorts, we hope to see similar, or perhaps even improved safety results in this arm of the trial,” said Natalie Callander, M.D., professor of medicine, director, University of Wisconsin Carbone Cancer Center Myeloma Clinical Program, and the study’s lead investigator. “Previous participants have asked us if it was possible to receive additional doses, as this therapy has been so well tolerated.”

Patients participating in the fifth cohort will receive a total of two doses of CLR 131 as 30-minute infusions on their first and seventh days. They will then be evaluated over the course of 85 days to determine the safety and efficacy of the treatment as per the study protocol. During the previous cohort, one of three evaluable patients experienced a partial response to treatment with CLR 131, while the other two achieved stable disease. All Cohort 4 patients had heavily pretreated relapsed or refractory multiple myeloma (greater than five prior lines) and high degree of tumor burden upon entry into the trial, and the company expects to recruit similar trial subjects for Cohort 5. Despite the challenging patient population enrolled to date, 89 percent of all Phase 1 patients achieved a clinical benefit response.

“This fifth cohort represents an important opportunity to better understand the clinical utility of a split dose regimen and to further explore the safety and efficacy of CLR 131. Utilizing two doses provides an opportunity to increase the total amount of drug delivered to the patients which could result in an improvement in efficacy while maintaining similar or better safety profile,” said Jim Caruso, president and CEO of Cellectar Biosciences. “Clinical assessment, along with the improved benefits demonstrated by two doses in preclinical studies, suggest to us that the protocol changes should enhance our chances to see improved patient outcomes in this and future study arms.”

About CLR 131

CLR 131 is an investigational compound under development for a range of hematologic malignancies. It is currently being evaluated as a single-dose treatment in a Phase 1 clinical trial in patients with relapsed or refractory (R/R) multiple myeloma (MM) as well as in a Phase 2 clinical trial for R/R MM and select R/R lymphomas with either a one- or two-dose treatment. CLR 131 represents a novel approach to treating hematological diseases and based upon preclinical and interim Phase 1 study data may provide patients with therapeutic benefits including, overall survival, an improvement in progression-free survival, and overall quality of life. CLR 131 utilizes the company’s patented PDC tumor targeting delivery platform to deliver a cytotoxic radioisotope, iodine-131, directly to tumor cells. The FDA has granted Cellectar an orphan drug designation for CLR 131 in the treatment of multiple myeloma.

About Phospholipid Drug Conjugates (PDCs)

Cellectar’s product candidates are built upon its patented cancer cell-targeting delivery and retention platform of optimized phospholipid ether-drug conjugates (PDCs). The company designed its phospholipid ether (PLE) carrier platform to be coupled with a variety of payloads to facilitate the discovery and development of improved targeted novel therapeutic compounds. The basis for selective tumor targeting of our PDC compounds lies in the differences between the plasma membranes of cancer cells compared to those of normal cells. Cancer cell membranes are highly enriched in lipid rafts, which are glycolipoprotein microdomains of the plasma membrane of cells that contain high concentrations of cholesterol and sphingolipids, and serve to organize cell surface and intracellular signaling molecules. PDCs have been tested in more than 80 different xenograft models of cancer.

On October 24, 2017 Moleculin Biotech, Inc., (NASDAQ: MBRX) (“Moleculin” or the “Company”), a clinical stage pharmaceutical company focused on the development of anti-cancer drug candidates, some of which are based on license agreements with The University of Texas System on behalf of the M.D. Anderson Cancer Center, reported that has submitted its request for Clinical Trial Authorization (“CTA”) in Poland which, if allowed, will enable a clinical trial to study Annamycin for the treatment of relapsed or refractory acute myeloid leukemia (“AML”) in Poland (Press release, Moleculin, OCT 24, 2017, View Source [SID1234521124]). This will be in addition to the previously announced allowance of its Investigative New Drug filing with the Food & Drug Administration in the US.

“Consistent with our prior guidance, we have now taken the final step required to expand our Annamycin clinical trial to Poland,” commented Walter Klemp, Chairman and CEO of Moleculin. “Unlike the US, the process for beginning a clinical trial in Poland requires a hospital contract before a request for CTA can be made. We recently announced the required hospital contract and this announcement now marks the formal request for Polish approval.”
Mr. Klemp continued: “The CTA request process in Poland normally takes 60 days, so we hope to be enrolling patients there near year-end. Increasing the breadth of clinical trial sites beyond the US will give Moleculin access to more potential patients, and, hopefully, speed the Phase IIa portion of the trial.”

On October 24, 2017 Molecular Templates, Inc., (Nasdaq:MTEM) a clinical stage biopharmaceutical company focused on the discovery and development of Engineered Toxin Bodies (ETBs), reported the dosing of the first patient in a Phase 1 expansion study of MT-3724, a first-generation ETB that targets the CD20 cell surface antigen present in a variety of lymphomas and leukemias (Press release, Molecular Templates, OCT 24, 2017, View Source [SID1234521123]). Strong evidence of anti-tumor activity in heavily pre-treated patients has been observed in Part 1 of the study.

“MT-3724 has shown activity in heavily pre-treated DLBCL patients with a median of greater than four prior therapies in the dose escalation portion of this study,” said Eric E. Poma, Ph.D., Chief Executive and Chief Scientific Officer of Molecular Templates. “We are pleased to begin dosing patients in the expansion cohort, which is designed to further characterize the efficacy and response rates in these difficult to treat patients.”
The Phase 1 study is a two-part study in patients with relapsed or refractory B-cell non-Hodgkin’s lymphoma or relapsed/refractory B-cell CLL. In Part 1, patients were treated with MT-3724 given as intravenous (IV) infusions at doses ranging from 5 mcg/kg up to 100 mcg/kg. The primary outcome measures are safety and tolerability, while secondary endpoints are pharmacokinetics (PK), pharmacodynamics (PD) and tumor response. The MTD was identified as 75 mcg/kg and this was supported by a dose-dependent clearance of CD20+ peripheral B cells, which is an acknowledged surrogate marker of efficacy.

Establishment of the MTD has triggered initiation of Part 2 of the study, in which relapsed or refractory DLBCL patients without high serum levels of Rituxan will be treated with MT-3724 as a monotherapy at the MTD dose. The study has been designed to enroll up to 40 patients in total.

Part 2 of the study is being conducted at multiple centers across the United States including Memorial Sloan-Kettering Cancer Center in New York City, the MD Anderson Cancer Center in Houston, Texas, and the University of Arizona in Tucson, Arizona with data expected in the first half of 2018. Molecular Templates anticipates initiating a phase II monotherapy study in relapsed and refractory DLBCL patients in 2018 that could be pivotal in nature. The first patient was dosed at the University of Arizona. Additional information on the study, including inclusion/exclusion criteria, can be found at www.clinicaltrials.gov (NCT Identifier: NCT02715843).

About MT-3724
MT-3724, Molecular Templates’ lead drug candidate, is an immunotoxin that targets the CD20 cell surface antigen present in a variety of lymphomas and leukemias. CD20 is a non-internalizing receptor and MT-3724 is the first immunotoxin to induce internalization and destruction of CD20 positive cells to enter the clinic. MT-3724 is currently being investigated in a Phase 1 clinical trial in heavily pre-treated Diffuse Large B-cell Lymphoma (DLBCL) patients. More information is available at clinicaltrials.gov.

On October 24, 2017 Varian (NYSE: VAR) reported five patients with brain cancer became the first patients in the US to be treated using the company’s HyperArc High Definition Radiotherapy (HDRT), a new type of radiosurgery treatment, at the University of Alabama at Birmingham Comprehensive Cancer Center (Press release, InfiMed, OCT 24, 2017, View Source [SID1234521122]). HyperArc is designed to automate and simplify sophisticated treatments such as stereotactic radiosurgery (SRS) and make them available to more cancer patients around the world.

“We have been doing preclinical and clinical development of single isocenter radiosurgery for a decade,” said John Fiveash, M.D., professor and vice chair for academic programs in the UAB Department of Radiation Oncology. “Over the last five years, our radiosurgery plan quality has improved to equal or exceed our Gamma Knife. Physicians and patients preferred the frameless and highly efficient delivery on our TrueBeam and Edge systems and our Gamma Knife was decommissioned June 2017. HyperArc planning automates much of the radiosurgery treatment planning strategies that we have implemented at UAB and could enable more clinics to perform higher quality radiosurgery for more patients.”

“Working closely with leading institutions like UAB played an important role in the development of HyperArc,” said Kolleen Kennedy, president of Varian’s Oncology Systems business. “We value their continued contributions to the advancement of cancer care and we are excited that HyperArc treatments have now begun in the US.”

HyperArc capitalizes on the unique capabilities of Varian’s TrueBeam and EDGE treatment systems. HyperArc treatments allow clinicians the ability to deliver more compact radiation doses that closely conform to the size, shape, and location of tumors while sparing more surrounding healthy tissue. These advanced treatments can be delivered in a conventional treatment time slot. The treatment planning for HyperArc is supported by Varian’s Eclipse treatment planning software.

For more information on HyperArc, visit www.varian.com/hyperarc