On May 4, 2017 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported financial results for the first quarter of 2017 and provided a business update (Press release, Regeneron, MAY 4, 2017, View Source [SID1234518845]).

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Financial Highlights

($ in millions, except per share data)

Three Months Ended
March 31,


2017

2016*

% Change



EYLEA U.S. net product sales

$
854


$
781


9
%



Total revenues

$
1,319


$
1,201


10
%



GAAP net income

$
249


$
181


38
%



GAAP net income per share – diluted

$
2.16


$
1.59


36
%



Non-GAAP net income(2)

$
337


$
273


23
%



Non-GAAP net income per share – diluted(2)

$
2.92


$
2.40


22
%












* See note (6) below and Table 3 for an explanation of revisions made to certain amounts
previously reported for the three months ended March 31, 2016.



"In the first quarter, we were thrilled to receive U.S. FDA approval for Dupixent, our breakthrough therapy for moderate-to-severe atopic dermatitis, and are working to support access for appropriate patients who suffer from this serious disease," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "We are also pleased to have positive Phase 2 results with dupilumab in moderate-to-severe eosinophilic esophagitis, which marks the fourth allergic disease in which dupilumab has shown proof of concept. These data further validate the hypothesis that the IL-4/IL-13 pathway is a major driver in multiple allergic diseases. Additionally, we have received a new FDA action date for Kevzara, our therapy for rheumatoid arthritis, and are looking forward to a potential U.S. approval and launch in late May 2017."

Business Highlights

Marketed Product Update

EYLEA (aflibercept) Injection for Intravitreal Injection

In the first quarter of 2017, net sales of EYLEA in the United States increased 9% to $854 million from $781 million in the first quarter of 2016. Overall distributor inventory levels remained within the Company’s one- to two-week targeted range.
Bayer commercializes EYLEA outside the United States. In the first quarter of 2017, net sales of EYLEA outside of the United States(1) were $484 million, compared to $419 million in the first quarter of 2016. In the first quarter of 2017, Regeneron recognized $175 million from its share of net profit from EYLEA sales outside the United States, compared to $146 million in the first quarter of 2016.
Dupixent (dupilumab) Injection

Dupilumab, an antibody that blocks signaling of IL-4 and IL-13, is currently being studied in asthma, children with atopic dermatitis, nasal polyps, and eosinophilic esophagitis.
The launch of Dupixent commenced following the March 28, 2017 U.S. Food and Drug Administration (FDA) approval for the treatment of adult patients with moderate-to-severe atopic dermatitis whose disease is not adequately controlled with topical prescription therapies or when those therapies are not advisable.
In the first quarter of 2017, a Phase 3 study of Dupixent in adolescent patients (12-17 years of age) with moderate-to-severe atopic dermatitis was initiated.
In March 2017, the Company and Sanofi presented additional detailed results from the Phase 3 LIBERTY AD CHRONOS study. The study met its primary and secondary endpoints, with patients receiving Dupixent with topical corticosteroids (TCS) achieving significantly improved measures of overall disease severity at 16 and 52 weeks, compared to TCS alone in adults with uncontrolled moderate-to-severe atopic dermatitis.
In the second quarter of 2017, a Phase 3 study of dupilumab in pediatric patients (6-11 years of age) with uncontrolled persistent asthma was initiated.
The Company recently completed a positive primary analysis from a Phase 2 proof-of-concept study of dupilumab in patients with active, moderate-to-severe eosinophilic esophagitis, which can be a manifestation of food allergy. Detailed data from this study will be presented at an upcoming medical conference. The Company and Sanofi plan to meet with the FDA and other regulators to determine next steps for development of dupilumab in this indication.
Praluent (alirocumab) Injection for the Treatment of Elevated Low-Density Lipoprotein (LDL) Cholesterol

In the first quarter of 2017, global net sales of Praluent were $36 million, compared to $13 million in the first quarter of 2016. Product sales for Praluent are recorded by Sanofi, and the Company shares in any profits or losses from the commercialization of Praluent.
On January 5, 2017, the United States District Court for the District of Delaware issued a permanent injunction prohibiting the Company and Sanofi from marketing, selling, or commercially manufacturing Praluent in the United States. On February 8, 2017, the United States Court of Appeals for the Federal Circuit stayed (suspended) the injunction pending appeal. This ruling means that Regeneron and Sanofi will continue to market, sell, and commercially manufacture Praluent in the United States during the appeal process. Oral argument on the appeal is currently scheduled for June 6, 2017.
In April 2017, the FDA approved the supplemental Biologics License Application (sBLA) for a once-monthly (every four weeks), 300 mg dose of Praluent.
The ODYSSEY OUTCOMES trial remains ongoing, and is assessing the potential of Praluent to demonstrate cardiovascular benefit.
Kevzara (sarilumab) Injection

In January 2017, Health Canada approved Kevzara for the treatment of adult patients with moderately to severely active rheumatoid arthritis who have an inadequate response to or intolerance to one or more biologic or non-biologic Disease-Modifying Anti-Rheumatic Drugs (DMARDs). This was the first approval of Kevzara worldwide.
In March 2017, the Company and Sanofi resubmitted the BLA for Kevzara, which the FDA has accepted for review with a target action date of May 22, 2017.
In April 2017, the European Medicine Agency’s Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for the marketing authorization of Kevzara, recommending its approval for use in adult patients with moderately to severely active rheumatoid arthritis.
Pipeline Progress

Regeneron has sixteen product candidates in clinical development. These consist of EYLEA and fifteen fully human monoclonal antibodies generated using the Company’s VelocImmune technology, including six in collaboration with Sanofi. In addition to EYLEA, Dupixent (dupilumab), Praluent, and Kevzara, updates from the clinical pipeline include:

REGN2810, an antibody to programmed cell death protein 1 (PD-1), is being studied in patients with cancer. A Phase 2 potentially pivotal study for the treatment of advanced cutaneous squamous cell carcinoma (CSCC), as well as various Phase 1 studies (both alone and in combination with other antibodies and treatments), continue to enroll patients. Data from a cohort of patients with CSCC from our Phase 1 trial will be presented at the upcoming American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) conference in June 2017.

Suptavumab, an antibody to the Respiratory Syncytial Virus-F (RSV-F), finished enrolling patients in a Phase 3 study in the first quarter of 2017 subsequent to the completion of the Northern Hemisphere RSV season. Final enrollment in this study was approximately 1,200 patients.

Nesvacumab, an antibody to Ang2 co-formulated with aflibercept for intravitreal injection, is currently being studied in patients with neovascular age-related macular degeneration (wet AMD) and diabetic macular edema (DME). The Phase 2 ONYX study of nesvacumab/aflibercept for the treatment of wet AMD completed enrollment during the first quarter of 2017, and the Phase 2 RUBY study of nesvacumab/aflibercept for the treatment of DME completed enrollment during 2016.

REGN2477, an antibody to Activin A, received orphan drug designation from the FDA for the treatment of Fibrodysplasia Ossificans Progressiva (FOP) in the first quarter of 2017.

Evinacumab, an antibody to Angptl-3, received Breakthrough Therapy designation from the FDA in the first quarter of 2017 for the treatment of hypercholesterolemia in patients with homozygous familial hypercholesterolemia (HoFH).

REGN3500, an antibody to interleukin-33 receptor (IL-33), entered Phase 1 clinical development for the treatment of asthma in the first quarter of 2017.

Select Upcoming 2017 Milestones



Programs
Milestones


Dupixent (dupilumab)
Submission for additional regulatory approvals and
regulatory agency decisions on applications outside of
the United States
Report results from Phase 3 asthma study
Submit sBLA for asthma in adults
Initiate Phase 3 study in pediatric patients in atopic
dermatitis
Initiate Phase 2 study in food allergies



Kevzara
FDA target action date of May 22, 2017
Submission for additional regulatory approvals and
regulatory agency decisions on applications outside of
the United States



Praluent
Complete ODYSSEY OUTCOMES study



Suptavumab (REGN2222;
RSV-F Antibody)
Report results from Phase 3 study



Fasinumab (NGF Antibody)
Initiate additional Phase 3 study in osteoarthritis pain
Initiate Phase 3 study in chronic low back pain



REGN2810 (PD-1 Antibody)
Initiate Phase 3 study in first-line non-small cell lung
cancer
Initiate Phase 2 study in basal cell carcinoma



Nesvacumab/aflibercept
(Ang2 Antibody co-formulated
with aflibercept)
Report data from Phase 2 studies in DME (RUBY) and
wet AMD (ONYX)


First Quarter 2017 Financial Results

Product Revenues: Net product sales were $858 million in the first quarter of 2017, compared to $784 million in the first quarter of 2016. EYLEA net product sales in the United States were $854 million in the first quarter of 2017, compared to $781 million in the first quarter of 2016.

Total Revenues: Total revenues, which include product revenues described above, increased by 10% to $1.319 billion in the first quarter of 2017, compared to $1.201 billion in the first quarter of 2016. Total revenues also include Sanofi and Bayer collaboration revenues of $404 million in the first quarter of 2017, compared to $399 million in the first quarter of 2016.

Research and Development (R&D) Expenses: GAAP R&D expenses were $507 million in the first quarter of 2017, compared to $470 million in the first quarter of 2016. The higher R&D expenses in the first quarter of 2017 were principally due to higher development costs, including an increase in fasinumab and REGN2810 clinical trial costs (partly offset by a decrease in clinical trial costs for dupilumab), manufacturing drug supplies, and higher headcount to support the Company’s increased R&D activities. In addition, in the first quarter of 2017, R&D-related non-cash share-based compensation expense was $74 million, compared to $78 million in the first quarter of 2016.

Selling, General, and Administrative (SG&A) Expenses: GAAP SG&A expenses were $297 million in the first quarter of 2017, compared to $290 million in the first quarter of 2016. The increase in SG&A expenses was primarily due to higher headcount and commercialization-related expenses in connection with preparing to launch Kevzara and Dupixent. In addition, in the first quarter of 2017, SG&A-related non-cash share-based compensation expense was $54 million, compared to $60 million in the first quarter of 2016.

Cost of Goods Sold (COGS): GAAP COGS was $61 million in the first quarter of 2017, compared to $79 million in the first quarter of 2016. COGS decreased principally due to a decrease in royalties since the Company’s obligation to pay Genentech based on U.S. sales of EYLEA ended in May 2016, partly offset by an increase in various start-up costs in connection with the Company’s Limerick, Ireland commercial manufacturing facility.

Cost of Collaboration and Contract Manufacturing (COCM): GAAP COCM was $23 million in the first quarter of 2017, compared to $33 million in the first quarter of 2016. COCM decreased primarily due to lower royalties since the Company’s obligation to pay Genentech based on sales of EYLEA outside the United States also ended in May 2016.

Income Tax Expense: In the first quarter of 2017, GAAP income tax expense was $183 million and the effective tax rate was 42.4%, compared to $149 million and 45.1% in the first quarter of 2016. The effective tax rate for the first quarter of 2017 was negatively impacted, compared to the U.S. federal statutory rate, by losses incurred in foreign jurisdictions with rates lower than the federal statutory rate and the non-tax deductible Branded Prescription Drug Fee, partly offset by the tax benefit associated with stock-based compensation, the domestic manufacturing deduction, and the federal tax credit for research activities.

GAAP and Non-GAAP Net Income(2): The Company reported GAAP net income of $249 million, or $2.36 per basic share and $2.16 per diluted share, in the first quarter of 2017, compared to GAAP net income of $181 million, or $1.74 per basic share and $1.59 per diluted share, in the first quarter of 2016.

The Company reported non-GAAP net income of $337 million, or $3.19 per basic share and $2.92 per diluted share, in the first quarter of 2017, compared to non-GAAP net income of $273 million, or $2.62 per basic share and $2.40 per diluted share, in the first quarter of 2016.

A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

Tarrytown, New York Facilities Update: On March 3, 2017, the Company completed a new lease financing for its Tarrytown, New York facilities (the Facility). As a result of this transaction, the Company leased the Facility from Banc of America Leasing & Capital, LLC (BAL) for a term of five years. At the end of the lease term, the Company has an option to extend the term of the lease, purchase the Facility at a predetermined amount, or sell the Facility to a third party on behalf of BAL. The rent payments under this lease are expected to be lower than those under the Company’s previous leases for its corporate headquarters.

2017 Financial Guidance(3)

The Company’s updated full year 2017 financial guidance consists of the following components:




EYLEA U.S. net product sales
Single digit percentage growth over 2016 (reaffirmed)
Sanofi reimbursement of Regeneron
commercialization-related expenses
$385 million – $425 million
(previously $400 million – $450 million)
Non-GAAP unreimbursed R&D(2)(4)
$950 million – $1.025 billion (reaffirmed)
Non-GAAP SG&A(2)(4)
$1.140 billion – $1.200 billion
(previously $1.175 billion – $1.250 billion)
Effective tax rate
32% – 38% (reaffirmed)
Capital expenditures
$300 million – $350 million
(previously $375 million – $450 million)


(1)
Regeneron records net product sales of EYLEA in the United States. Outside the United States, EYLEA net product sales comprise sales by Bayer in countries other than Japan and sales by Santen Pharmaceutical Co., Ltd. in Japan under a co-promotion agreement with an affiliate of Bayer. The Company recognizes its share of the profits (including a percentage on sales in Japan) from EYLEA sales outside the United States within "Bayer collaboration revenue" in its Statements of Operations.


(2)
This press release uses non-GAAP net income, non-GAAP net income per share, non-GAAP unreimbursed R&D, and non-GAAP SG&A, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). These non-GAAP financial measures are computed by excluding certain non-cash and other items from the related GAAP financial measure. Non-GAAP adjustments also include the income tax effect of reconciling items.

The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate from period to period based on factors that are not within the Company’s control, such as the Company’s stock price on the dates share-based grants are issued. Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company’s core business operations. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company’s non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company’s historical GAAP to non-GAAP results is included in Table 3 of this press release.


(3)
The Company’s 2017 financial guidance does not assume the completion of any significant business development transactions not completed as of the date of this press release and assumes that Praluent will remain on the market throughout 2017.


(4)
A reconciliation of full year 2017 non-GAAP to GAAP financial guidance is included below:






Projected Range


(In millions)

Low

High


GAAP unreimbursed R&D (5)

$
1,245


$
1,340



R&D: Non-cash share-based compensation expense

(295)


(315)



Non-GAAP unreimbursed R&D

$
950


$
1,025










GAAP SG&A

$
1,345


$
1,435



SG&A: Non-cash share-based compensation expense

(205)


(235)



Non-GAAP SG&A

$
1,140


$
1,200



(5)
Unreimbursed R&D represents R&D expenses reduced by R&D expense reimbursements from the Company’s collaborators and/or customers.


(6)
Applicable GAAP amounts previously reported for the three months ended March 31, 2016 have been revised due to the adoption of Accounting Standards Update 2016-09 ("ASU 2016-09"), Compensation – Stock Compensation, Improvements to Employee Share-Based Payment Accounting, during the second quarter of 2016. The Company revised its GAAP net income from the amounts originally reported for the quarterly period ended March 31, 2016 to include a $15.6 million income tax benefit, which was originally recorded as additional paid-in capital. In addition, refer to Table 3 for a description of revisions to non-GAAP measures previously reported for the three months ended March 31, 2016.

On May 4, 2017 Juno Therapeutics, Inc. (NASDAQ:JUNO), a biopharmaceutical company developing innovative cellular immunotherapies for the treatment of cancer, reported financial results and business highlights for the first quarter 2017 (Press release, Juno, MAY 4, 2017, View Source [SID1234518844]).

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"In the first quarter 2017, we made significant progress with our lead program, JCAR017, and we look forward to presenting updated data in DLBCL at ASCO (Free ASCO Whitepaper)," said Hans Bishop, Juno’s President and Chief Executive Officer. "We also continue to advance our pipeline more broadly with eleven product candidates now in human testing. Already this year, we have initiated a number of trials, including a BCMA CAR T, a CD19-directed 4-1BBL armored CAR, a fully-human CD19 CAR T, a combination trial with JCAR014 and durvalumab, and a combination trial with JCAR014 and ibrutinib. With up to 20 ongoing trials by year end, we expect to gain additional insights that may lead to product candidates that can deliver long-term durable remissions for patients in need."
First Quarter 2017 and Recent Corporate Highlights
Corporate News:
Hired key talent to our leadership team, including the:

Appointment of Corsee Sanders, Ph.D. as Executive Vice President and Head of Development Operations. Dr. Sanders leads a newly organized Development Operations group that combines clinical operations, biometrics and data management, patient operations, medical writing, and program and project management.
Appointment of Sunil Agarwal, M.D. as President of Research & Development. Dr. Agarwal is responsible for the execution of Juno’s drug development pipeline, integration of translational insights into ongoing programs, and the prioritization of research and development initiatives.
Appointment to Board of Directors of Rupert Vessey, MA, BM BCh, FRCP, DPhil, who is Celgene Corporation’s President of Research and Early Development.
First Quarter 2017 Financial Results
Cash Position: Cash, cash equivalents, and marketable securities as of March 31, 2017 were $850.7 million compared to $922.3 million as of December 31, 2016.
Cash Burn: Cash burn in the first quarter of 2017, excluding cash inflows and outflows from business development activities, was $75.3 million, including $21.2 million for the purchase of property and equipment, the majority of which were non-recurring costs to build out Juno’s planned headquarters facility. Cash burn in the first quarter of 2016, excluding cash inflows and outflows from business development activities, was $61.0 million. The cash burn increase of $14.3 million was primarily driven by cash outflows in connection with the overall growth of the business including clinical, manufacturing, and research, costs to build out Juno’s planned headquarters facility, and purchases of manufacturing equipment. These increases were offset by $11.2 million received from Celgene for the partial reimbursement of costs incurred by Juno in connection with the CD19 program.
Revenue: Revenue for the three months ended March 31, 2017 and 2016 was $19.3 million and $9.8 million, respectively. The increase was primarily due to revenue recognized in connection with the Celgene collaboration and CD19 License for the partial reimbursement by Celgene of research and development costs incurred by Juno in the first quarter of 2017.
R&D Expenses: Research and development expenses for the three months ended March 31, 2017 and 2016, inclusive of non-cash expenses and computed in accordance with GAAP, were $82.9 million and $73.7 million, respectively. The increase was primarily due to increased costs to execute Juno’s clinical development strategy, manufacture its product candidates, and expand its overall research and development capabilities. For the three months ended March 31, 2017 expense related to our success payment and contingent consideration obligations increased $14.0 million and $1.5 million, respectively, compared to the three months ended March 31, 2016. These increases were offset by a decrease in milestone expense.
Non-GAAP R&D Expenses: Non-GAAP research and development expenses for the three months ended March 31, 2017 and 2016 were $74.4 million and $80.1 million, respectively and include $9.6 million and $9.1 million of stock-based compensation expense, respectively. Non-GAAP research and development expenses for three months ended March 31, 2017 exclude the following:

An expense of $7.4 million associated with the change in the estimated fair value and elapsed service period for Juno’s potential success payment liabilities to Fred Hutchinson Cancer Research Center ("FHCRC") and Memorial Sloan Kettering Cancer Center ("MSK").
Non-cash stock-based compensation expense of $0.7 million related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.
An expense of $0.4 million associated with the change in the estimated fair value of the contingent consideration liabilities recorded in connection with the Stage and X-Body acquisitions.

Non-GAAP research and development expenses for the three months ended March 31, 2016 exclude the following:
A gain of $6.6 million associated with the change in estimated fair value and elapsed service period for Juno’s potential success payment liabilities to FHCRC and MSK.
Non-cash stock-based compensation expense of $1.2 million related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.
A gain of $1.0 million associated with the change in the estimated fair value of the contingent consideration liabilities recorded in connection with the Stage and X-Body acquisitions.
G&A Expenses: General and administrative expenses on a GAAP basis for the three months ended March 31, 2017 and 2016 were $20.7 million and $16.0 million, respectively. The increase of $4.7 million was due to an increase in personnel expenses primarily related to increased headcount to support the business, an increase in consulting and other expenses including costs related to commercial readiness, and an increase in stock-based compensation expense. The increases were partially offset by a decrease in business development expenses. General and administrative expenses include $6.1 million and $4.9 million of non-cash stock-based compensation expense for the three months ended March 31, 2017 and 2016, respectively.
GAAP Net Loss: Net loss for the three months ended March 31, 2017 and 2016 was $82.2 million, or $0.79 per share, and $71.1 million, or $0.72 per share, respectively.
Non-GAAP Net Loss: Non-GAAP net loss, which incorporates the non-GAAP R&D expense, for the three months ended March 31, 2017 and 2016 was $73.7 million, or $0.71 per share, and $77.5 million, or $0.78 per share, respectively.
A reconciliation of GAAP net loss to non-GAAP net loss and GAAP R&D expense to non-GAAP R&D expense is presented below under "Non-GAAP Financial Measures."
2017 Financial Guidance
Juno reaffirms 2017 cash burn, excluding cash inflows or outflows from upfront payments related to business development activities, of between $270 million and $300 million.
Operating burn estimated to be between $245 million and $275 million.
Capital expenditures, net of tenant improvement allowances, estimated to be between $22 million and $27 million, the majority of which are related to one-time infrastructure build-outs.

On May 4, 2017 Idera Pharmaceuticals, Inc. (NASDAQ:IDRA), a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel nucleic acid-based therapeutics for oncology and rare diseases, reported its financial and operational results for the first quarter ended March 31, 2017 (Press release, Idera Pharmaceuticals, MAY 4, 2017, View Source [SID1234518840]).

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Since January 1, 2017, the Company:

• Completed enrollment in the dose escalation cohorts of the ipilimumab combination arm of the ongoing Phase 1/2 clinical trial of intratumoral IMO-2125 in PD-1 refractory metastatic melanoma;

No dose-limiting toxicity reported in studied dose levels; MTD not reached; and
Durable responses of over a year have been observed;
• Commenced enrollment of the Phase 2 portion of the clinical trial of 8mg intratumoral IMO-2125 in combination with ipilimumab in PD-1 refractory melanoma;

21 patients planned for evaluation, with 9 already enrolled; and
Overall Response Rate (ORR) data expected to be available in first quarter of 2018;
• Continued enrollment into the dose escalation cohorts of the pembrolizumab combination arm of the Phase 1/2 clinical trial of intratumoral IMO-2125 in PD-1 refractory metastatic melanoma;

• Commenced and will continue to engage in discussions with global regulatory authorities regarding the path to registration for IMO-2125 in combination with ipilimumab in PD-1 refractory metastatic melanoma;

• Activated first site for Phase 1 clinical trial of intratumoral IMO-2125 monotherapy in multiple tumor types;

• Continued accruing patients into the IMO-8400 Phase 2 clinical trial in dermatomyositis which is being conducted at 22 sites both in the U.S. and abroad and is expected to complete enrollment in 2017 with data planned for the first half of 2018; and

• Continued all pre-clinical and IND-enabling activities for IDRA 008, Idera’s first clinical candidate from the Third Generation Antisense (3GA) technology platform, with expected IND filing and initiation of human proof-of-concept clinical trial in the first half of 2018.

"We are very focused on bringing the first treatment option to PD1 refractory metastatic melanoma patients. Having selected our phase 2 dose earlier than we planned is good example of this focus," stated Vincent Milano, Idera’s Chief Executive Officer. "We set very clear objectives in the beginning of this year for each of our programs, and I am very pleased with the output and progress through the first several months of 2017."

Research and Development Program Updates
IMO-2125 and IMO-8400 are the Company’s lead clinical development drug candidates. IMO-2125 is an oligonucleotide-based agonist of Toll-like receptor (TLR) 9. IMO-8400 is an oligonucleotide-based antagonist of TLRs 7, 8, and 9. The Company also announced, in early 2017, the selection of the first development target from its proprietary 3GA technology platform. The company plans to disclose the specific target, disease and clinical pathway in the second half of 2017. The Company plans to take the first 3GA candidate into human proof of concept studies in 2018.

Toll-like Receptor (TLR) Agonism
Immuno-Oncology Program
Idera’s development program in immuno-oncology is based on the rationale that intra-tumoral injections of IMO-2125, a TLR9 agonist, will activate dendritic cells and modulate the tumor microenvironment to potentiate the anti-tumor activity of checkpoint inhibitors and other immunotherapies. This rationale is supported by pre-clinical data in multiple tumor types.

Idera is currently conducting a Phase 2 clinical trial of intratumoral IMO-2125 in combination with ipilimumab, a CTLA4 antibody, and in a separate arm exploration of the combination of intratumoral IMO-2125 with pembrolizumab, an anti-PD1 antibody. The Phase 1 dose exploration portion of the trial was conducted at the University of Texas MD Anderson Cancer Center and the Phase 2 portion of the trial is being conducted at multiple centers. This trial is being conducted in patients with relapsed or refractory metastatic melanoma who have failed prior PD-1 therapy. In the second half of 2016, the Company announced positive preliminary clinical data from the initial dosing cohorts in the ipilimumab arm of the dose escalation portion of the trial. The company has completed the dose escalation of intratumoral IMO-2125 in the ipilimumab arm of the trial and the combination appears generally well tolerated across all doses explored, without any dose-limiting toxicity and without reaching a maximally tolerated dose. The company selected the 8mg dose for Phase 2 and enrollment is underway. The company has also continued enrollment into the pembrolizumab combination arm of the trial.

Additionally, the company has begun and will continue to engage in discussions with regulatory authorities regarding the path to registration for IMO-2125 in combination with ipilimumab in PD-1 refractory metastatic melanoma patients.

Also during the first quarter of 2017, the phase 1 trial of intratumoral IMO-2125 monotherapy in multiple tumor types has been activated and the first patient is expected to enroll early in the second quarter of 2017.

At the 2017 ASCO (Free ASCO Whitepaper)-SITC Clinical Immuno-Oncology Symposium held February 23 through February 25, in Orlando, FL, Marc Uemura, M.D. of MD Anderson Cancer Center, presented an update of the ongoing IMO-2125 clinical trial in combination with ipilimumab in PD-1 refractory melanoma.

At the 2017 American Academy of Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting held, April 1 through April 5, in Washington, DC, Dr. Cara Haymaker of MD Anderson Cancer Center presented an update on the translational data outcomes in a poster presentation entitled, "Translational evidence of reactivated innate and adaptive immunity with intratumoral IMO-2125 in combination with systemic checkpoint inhibitors form a Phase 1/2 study in patients with anti-PD-1 refractory metastatic melanoma."

Additionally, on the same day, Daqing Wang, Ph.D., Principal Scientist, Idera Pharmaceuticals presented new IMO-2125 pre-clinical data in a poster entitled, "Local treatment with novel TLR9 agonist IMO-2125 demonstrates anti-tumor activity in preclinical models of pancreatic cancer."

Third Generation Antisense Platform (3GA)
Idera’s proprietary third-generation antisense (3GA) platform technology is focused on silencing the mRNA associated with disease causing genes. Idera has designed 3GA oligonucleotides to overcome specific challenges associated with earlier generation antisense technologies and RNAi technologies such as immunotoxicities and less than optimal therapeutic index.

Over the past two years, Idera has generated 22 unique compounds developed to target specific genes across a wide variety of therapeutic areas such as rare diseases, oncology, autoimmune disorders, metabolic conditions and diseases driven by a single point mutation. The company is currently conducting activities ranging from cell culture through IND-enabling toxicology. The current portfolio is designed to create both internal development candidates as well as partnering opportunities for disease areas outside of Idera’s stated focus.

The first partnering endeavor is demonstrated through Idera’s collaboration with GSK developing an undisclosed 3GA gene target for renal conditions. Idera and GSK entered into the collaboration in late 2015 and GSK’s stated goal is to achieve selection of clinical development candidate in the first quarter of 2018.

Additionally, in January of 2017, Idera announced selection of its first internal candidate to enter clinical development. For strategic and competitive purposes, Idera is withholding naming the specific target until the second half of 2017. Idera has selected a well-established liver target, with available, validated pre-clinical animal models, well-understood clinical endpoints, which has the potential for both rare and broader disease applications. Idera is currently conducting the IND-enabling toxicology for this program and expects to file and IND and enter the clinic in 2018.

Toll-like Receptor (TLR) Antagonism
Dermatomyositis Clinical Development Program
In late 2015, Idera announced the initiation of a Phase 2 clinical trial of IMO-8400 in patients with dermatomyositis, a rare auto-immune condition, which negatively affects skin and may result in debilitating muscle weakness. TLRs have been reported to play an important role in the pathogenesis of the disease. This randomized, double-blind, placebo controlled Phase 2 trial is expected to enroll 36 patients and is being conducted at 22 clinical sites worldwide. The Company plans to complete enrollment of this trial by the end of 2017 and have clinical data available in 2018.

Financial Results
First Quarter Results
Net loss applicable to common stockholders for the three months ended March 31, 2017 was $15.1 million, or $0.10 per basic and diluted share, compared to a net loss applicable to common stockholders of $12.8 million, or $0.11 per basic and diluted share, for the same period in 2016. Research and development expenses for the three months ended March 31, 2017 totaled $11.5 million compared to $9.3 million for the same period in 2016. General and administrative expense for the three months ended March 31, 2017 and March 31, 2016 were $4.1 million and $3.9 million, respectively.

As of March 31, 2017, our cash, cash equivalents and investments totaled $91.3 million. We currently anticipate our cash position is capable of funding our operations into the second quarter of 2018.

On May 4, 2017 Five Prime Therapeutics, Inc. (Nasdaq:FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, reported a corporate update and reported financial results for the quarter ending March 31, 2017 (Press release, Five Prime Therapeutics, MAY 4, 2017, View Source [SID1234518839]).

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"We had a productive quarter at Five Prime, in which we made notable progress in our clinical and preclinical programs," said Lewis T. "Rusty" Williams, M.D., Ph.D., president and chief executive officer of Five Prime. "We achieved an important milestone by completing enrollment in the Phase 2 part of the ongoing trial of cabiralizumab in patients with pigmented villonodular synovitis, or PVNS. Additionally, we have completed enrollment in some of the Phase 1b cohorts in the cabiralizumab immuno-oncology trial. Each of our three clinical-stage programs advanced and we look forward to announcing clinical trial data from these programs this year. Additionally, we continue to make progress in our pre-clinical programs and, beginning this year, are on track to file at least one IND application for a new molecule each year for the foreseeable future."

Business Highlights and Recent Developments

Clinical Pipeline:

Cabiralizumab (FPA008): an investigational antibody that inhibits CSF1R and has been shown to block the activation and survival of monocytes and macrophages. In the setting of advanced cancer, tumor-associated macrophages (TAMs) can inhibit the immune system’s ability to eradicate the disease. In the CSF-1-driven tumor diffuse tenosynovial giant cell tumor (dsTGCT), also known as pigmented villonodular synovitis (PVNS), the bulk of the tumor mass in joints is formed by the macrophages themselves. Five Prime and Bristol-Myers Squibb (BMS) have an exclusive worldwide collaboration agreement for the development and commercialization of cabiralizumab for these and potentially additional indications.

– Advanced the ongoing Phase 1 trial of cabiralizumab/OPDIVO in immuno-oncology.

– Five Prime and BMS are evaluating the safety, tolerability and preliminary efficacy of the immunotherapy combination of cabiralizumab with the PD-1 immune checkpoint inhibitor OPDIVO (nivolumab) in advanced solid tumors, including non-small cell lung cancer, squamous cell carcinoma of the head and neck, pancreatic cancer, glioblastoma, renal cell carcinoma and ovarian cancer. The companies are also evaluating cabiralizumab as monotherapy and in combination with OPDIVO in additional tumor settings.

– Five Prime and BMS are also assessing multiple tissue biomarkers on tumors, TAMs and T cells. These assessments are guiding optimal dose selection to maximize the probability of success in future development.

– Five Prime completed enrollment in some of the Phase 1b cohorts in the cabiralizumab immuno-oncology trial and expects to complete enrollment in all of the current Phase 1b trial cohorts in the second half of 2017.

– The company expects to announce initial clinical trial data from the cabiralizumab immuno-oncology trial in the second half of 2017.

– Advanced the ongoing Phase 1/2 trial of cabiralizumab in patients with PVNS.

– In April, Five Prime completed enrollment in the initially planned 30-patient cohort of the Phase 2 part of the ongoing clinical trial evaluating cabiralizumab in patients with PVNS, an aggressive tumor confined to the synovium. Five Prime is evaluating clinical measures, including response rate, pain and range of motion.

– Five Prime plans to seek regulatory guidance to initiate a pivotal trial studying cabiralizumab in PVNS to begin in 2018.

– The company also plans to disclose initial clinical data from the cabiralizumab PVNS trial at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2017 Annual Meeting.

FPA144: an isoform-selective antibody in development as a targeted immuno-therapy for tumors that overexpress FGFR2b, a splice variant of a receptor for some members of the fibroblast growth factor (FGF) family. FPA144 has been engineered for enhanced antibody-dependent cell-mediated cytotoxicity (ADCC) to increase direct tumor cell killing by recruiting natural killer (NK) cells.

– Advanced the Phase 1 monotherapy trial of FPA144 in patients with gastric cancer. Enrollment continues in the expansion portion of the trial, evaluating the safety, PK and efficacy of biweekly 15 mg/kg infusions of FPA144 in patients with gastric cancer whose tumors overexpress FGFR2b.

– Plan to disclose updated gastric cancer clinical trial data from the FPA144 program at the ASCO (Free ASCO Whitepaper) 2017 Annual Meeting.

– Plan to seek regulatory guidance on a registrational path for FPA144 in combination with chemotherapy as a front-line gastric cancer therapy. Preclinical data suggest that the combination of FPA144 with standard-of-care chemotherapy is additive. Five Prime plans to initiate a combination trial of FPA144 with chemotherapy to advance into front-line therapy.

– Plan to launch a Phase 1 safety trial for FPA144 in patients with gastric cancer in Japan. The observed incidence of gastric cancer is higher in Asian populations than in other populations. Five Prime recently received clinical trial notification (CTN) approval from the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan and plans to initiate a Phase 1 monotherapy clinical trial in Japan in the third quarter of 2017.

– Advanced the Phase 1 monotherapy trial of FPA144 in patients with bladder cancer. Five Prime observed a complete response in a Stage 4 metastatic bladder cancer patient who received FPA144 in the dose escalation portion of the trial. That patient remains in remission and on treatment since April 15, 2015. The company opened an additional cohort in the Phase 1 clinical trial to test FPA144 as a treatment for bladder cancer patients whose tumors overexpress FGFR2b, as assessed by the company’s immunohistochemistry (IHC) test. Five Prime is adding sites that specialize in bladder cancer.

FP-1039: a protein drug designed to block FGF signaling. As a ligand trap, FP-1039 binds to and neutralizes a subset of FGF ligands (such as FGF2), preventing these growth-promoting and angiogenic proteins from reaching FGFR1 on the surface of tumor cells.

– Patients continue to be dosed with FP-1039 in the ongoing Phase 1b clinical trial in mesothelioma. Five Prime regained full rights to FP-1039 from GlaxoSmithKline (GSK) in September 2016. GSK is completing the ongoing Phase 1b trial combining FP-1039 with front-line pemetrexed and cisplatin in untreated, unresectable mesothelioma. GSK concluded trial recruitment with 25 patients enrolled at the 15 mg/kg dose in June 2016. Further clinical development of FP-1039 in mesothelioma will be determined after data are mature.

– Five Prime plans to disclose clinical data from the FP-1039 program at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2017 Congress.
Preclinical Research and Development:

Featured three preclinical research poster presentations during the 2017 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting that took place from April 1 – 5 in Washington, D.C.
– Preclinical results demonstrated that both anti-CSF-1R and anti-GITR synergize with anti-PD1 therapy.
– Highlighted Five Prime’s robust in vitro and in vivo platforms to discover new immuno-oncology targets.
Continues to advance three preclinical development candidates in IND-enabling studies
– FPA150 (anti-B7-H4)
– An antibody designed for two mechanisms of action: to block an inhibitory T cell checkpoint pathway and to enhance killing of B7-H4-expressing tumors by ADCC.
– Investigational New Drug (IND) application planned for the fourth quarter of 2017.

– FPA154 (GITR agonist antibody)
– A tetravalent agonist antibody designed for greater GITR activation versus conventional antibodies. Conventional GITR agonist antibodies have two GITR binding sites while FPA154 has four.
– IND application planned for the fourth quarter of 2017.

– FPT155 (CD80-Fc)
– A multi-targeting immune modulator that can stimulate T cell responses through three critical pathways: CTLA4 blockade, CD28 agonism (without superagonism) and PD-L1 blockade.
– IND application planned in 2018.
Progress in pre-clinical and research programs.
– Five Prime is on track to achieve the goal of filing at least one IND application for a new molecule each year for the foreseeable future, beginning this year.

Continues to conduct multiple immuno-oncology research screens to identify new targets and drug candidates.
– Five Prime initiated antibody campaigns for new targets.
– Five Prime’s research team previously conducted in vivo screens of approximately 700 immune-related cell surface proteins to find immune proteins that could be new targets for validation as potential novel immuno-oncology therapeutics.
Summary of Financial Results and Guidance:

Cash Position. Cash, cash equivalents and marketable securities totaled $380.3 million on March 31, 2017, compared to $421.7 million on December 31, 2016. The decrease in cash was primarily attributable to cash used in operations to advance the FPA144 clinical trial, the cabiralizumab Phase 2 clinical trial in PVNS and preclinical development programs.
Revenue. Collaboration revenue for the first quarter of 2017 increased by $3.6 million to $10.1 million from $6.5 million in the first quarter of 2016. This increase was primarily due to revenue recognized under the 2015 cabiralizumab collaboration agreement with BMS, under which Five Prime is reimbursed for the expenses from the cabiralizumab immuno-oncology trial.
R&D Expenses. Research and development expenses for the first quarter of 2017 increased by $14.9 million to $33.8 million from $18.9 million in the first quarter of 2016. This increase was primarily related to advancing cabiralizumab in the Phase 2 clinical trial in PVNS and the Phase 1a/1b clinical trial in immuno-oncology, advancing the FPA144 Phase 1 clinical trial and further advancing preclinical development programs.
G&A Expenses. General and administrative expenses for the first quarter of 2017 increased by $2.4 million to $10.5 million from $8.1 million in the first quarter of 2016. This increase was primarily due to increases in payroll and stock-based compensation expenses.
Net Loss. Net loss for the first quarter of 2017 was $33.4 million, or $1.21 per basic and diluted share, compared to a net loss of $13.0 million, or $0.49 per basic and diluted share, for the first quarter of 2016.

Shares Outstanding. Total shares outstanding were 28.6 million as of March 31, 2017.
Cash Guidance. Five Prime expects full-year 2017 net cash used in operating activities to be less than $120 million. The company estimates ending 2017 with approximately $300 million in cash, cash equivalents and marketable securities.

On May 4, 2017 Epizyme, Inc. (NASDAQ:EPZM), a clinical-stage biopharmaceutical company creating novel epigenetic therapies, reported it has earned a $10 million milestone payment from GlaxoSmithKline (GSK) (Press release, Epizyme, MAY 4, 2017, View Source [SID1234518838]). The milestone payment follows GSK’s initiation of GLP toxicology studies for a first-in-class methyltransferase inhibitor discovered by Epizyme and licensed to GSK.

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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"We are pleased to achieve another milestone under our collaboration with GSK, further validating the strength of our epigenetic approach and drug discovery platform, as well our success in collaborating with industry leaders like GSK," said Susan Graf, Chief Business Officer of Epizyme. "We are encouraged that this investigational medicine continues to advance toward the clinic."

About the Epizyme-GSK Collaboration
Under the terms of its collaboration and license agreement with GSK, Epizyme granted GSK exclusive worldwide license rights to methyltransferase inhibitors directed to three targets. During the research term of the collaboration, which is now complete, Epizyme was primarily responsible for preclinical research, and now GSK is responsible for subsequent research, development and commercialization of the three programs. Using its proprietary drug discovery platform, Epizyme discovered and optimized compounds targeting three methyltransferases. GSK3326595 (formerly EPZ015938), a first-in-class PRMT5 inhibitor, was the first of these to enter the clinic in September 2016. GSK holds worldwide rights to all three programs. Epizyme has earned $69 million in up-front, research, and milestone payments to date, and may receive up to an additional $607 million from GSK if all milestones are met for all three programs. Epizyme is eligible to receive up to double-digit royalties on worldwide net sales of collaboration products.