On March 16, 2017 Karyopharm Therapeutics Inc. (Nasdaq:KPTI), a clinical-stage pharmaceutical company, reported financial results for the fourth quarter and full year 2016 and provided a clinical update for selinexor (KPT-330), its lead, novel, oral Selective Inhibitor of Nuclear Export (SINE) compound (Filing, Q4/Annual, Karyopharm, 2016, MAR 16, 2017, View Source [SID1234518187]). The Company also provided an overview of select accomplishments related to its other pipeline assets, including KPT-8602, its second-generation oral SINE compound, KPT-9274, its oral, dual inhibitor of p21-activated kinase 4 (PAK4) and nicotinamide phosphoribosyltransferase (NAMPT), and KPT-350, an oral SINE compound with potential applications in neurological and autoimmune indications.

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"2016 marked a year of several key achievements for Karyopharm, including the rapid advancement of oral selinexor in relapsed or refractory multiple myeloma (MM), a disease for which we believe we have a path to regulatory approval," said Michael G. Kauffman, MD, PhD, Chief Executive Officer of Karyopharm. "To date, 2017 has brought several significant developments. Today we announced the planned development path for selinexor in diffuse large B-cell lymphoma (DLBCL), our second lead indication after MM. Following the observation of a 28.4% overall response rate (ORR) in the Phase 2b SADAL study, we consulted with the U.S. Food and Drug Administration (FDA) and obtained their agreement to our amendment of the SADAL study to focus solely on the 60mg twice weekly treatment cohort, in which we plan to enroll up to 90 more patients. Assuming we continue to see the response rate we have observed to date, we intend to use the data from the SADAL study to support an accelerated approval in DLBCL. We look forward to presenting additional top-line data from the Phase 2b SADAL study in a late-breaking poster at the upcoming American Association for Cancer Research (AACR) (Free AACR Whitepaper) 2017 annual meeting in early April."

As previously announced on March 10, 2017, Karyopharm’s selinexor clinical trials have been placed on a partial clinical hold by the FDA due to incomplete information in the existing version of the investigator’s brochure (IB), including an incomplete list of serious adverse events (SAEs) associated with selinexor. The partial clinical hold is not the result of any patient death or any new information regarding the safety profile of selinexor. While the partial clinical hold remains in effect, patients with stable disease or better may remain on selinexor therapy, but no new patients may be enrolled until the partial clinical hold is lifted. The Company has provided all requested materials to the FDA believed to be required to lift the partial clinical hold. Karyopharm is working diligently with the FDA to seek the release of the partial clinical hold and resume enrollment in its selinexor clinical trials as expeditiously as possible. The Company believes that its previously disclosed enrollment rates and timelines for its ongoing trials will remain materially unchanged.

Targeting Disease at the Nuclear Pore

Clinical Update for Selinexor in DLBCL:
Today Karyopharm reported a 28.4% overall response rate (ORR) in the ongoing Phase 2b SADAL study evaluating 60mg and 100mg of selinexor dosed twice weekly in patients with relapsed or refractory DLBCL. In a recent analysis of the first 63 patients between both arms, the ORR, as determined by independent Central Radiological Review, was 28.4%, with consistent response rates across both arms, but greater durability and tolerability observed in the 60mg arm. As a result of these findings, and in consultation with the FDA, the Company has decided to amend the SADAL study protocol to become a single-arm study focusing solely on single-agent selinexor dosed at 60mg twice weekly, eliminating the 100mg arm. The Company will also make certain other protocol amendments, including reducing the 14-week washout period to 8 weeks for patients who achieved at least a partial response on their most recent therapy. The FDA agreed that the changes to the single-arm study were reasonable and that the proposed trial design and indication appear appropriate for accelerated approval, though eligibility for accelerated approval will depend on the complete trial results and available therapies at the time of regulatory action. The Company plans to enroll up to an additional 90 patients to the new 60mg single-arm cohort, and expects to report top-line results from the completed SADAL study in mid-2018.

Dr. Kauffman continued, "Looking ahead to the remainder of 2017, we are focusing on initiation of the pivotal Phase 3 BOSTON trial where we will evaluate selinexor in combination with Velcade (bortezomib) and dexamethasone in patients with MM previously treated with one to three regimens, moving selinexor into much earlier lines of treatment. After the presentation of the SADAL data at the AACR (Free AACR Whitepaper) 2017 annual meeting, we anticipate multiple other important data readouts during the year, including top-line data from the Phase 2 portion of our randomized Phase 2/3 SEAL study in patients with liposarcoma, our most advanced solid tumor indication in mid-2017. We also plan to present top-line Phase 1 safety and tolerability data for KPT-9274 in the second half of the year."
"Our other key objectives include continued execution of the expanded STORM and STOMP studies in relapsed or refractory MM. For STORM, the expansion arm evaluating oral selinexor in patients with penta-refractory MM is expected to read out in early 2018. Assuming a positive outcome, we intend to use the STORM study data to support accelerated approval for selinexor in MM. For STOMP, we recently completed enrollment in the selinexor, Velcade (bortezomib) and dexamethasone arm and expect to soon initiate a new expansion arm evaluating oral selinexor in combination with the anti-CD38 monoclonal antibody Darzalex," Dr. Kauffman concluded.
Fourth Quarter 2016 and Recent Events, Highlights and Milestones:
Selinexor in Multiple Myeloma (MM)

• Initiating Pivotal Phase 3 BOSTON Study in Early 2017. Based on the strong combination data recently reported from the Phase 1b STOMP study, Karyopharm plans to initiate a pivotal randomized Phase 3 study, known as the BOSTON (Bortezomib, Selinexor and dexamethasone) study, which will evaluate selinexor in combination with Velcade (bortezomib) and dexamethasone (SVd), compared to Velcade and low-dose dexamethasone (Vd) in patients with MM who have had one to three prior lines of therapy. Karyopharm has identified the combination dose of selinexor (100mg weekly), Velcade (1.3 mg/m2 weekly given subcutaneously for 4 of 5 weeks) and dexamethasone (40mg weekly) to be used in the BOSTON study and expects that the study will enroll approximately 360 patients. The Company expects to commence the BOSTON study in early 2017.

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Expanded STORM Study to Include 122 Additional Patients with Penta-refractory MM. The Company has expanded the STORM study, which is expected to include 122 additional patients with penta-refractory MM,

Targeting Disease at the Nuclear Pore


a growing unmet medical need in which there are no approved therapies available. Karyopharm expects to report top-line data from the expanded cohort in early 2018, and, assuming a positive outcome, intends to use the expanded STORM study data to support accelerated approval for selinexor in MM.

• Completed Enrollment in STOMP Arm Evaluating Selinexor in Combination with Velcade. In February 2017, Karyopharm completed enrollment in the Phase 1b/2 STOMP arm designed to evaluate selinexor in combination with the proteasome inhibitor Velcade and low-dose dexamethasone (SVd) in heavily pretreated patients with MM. The SVd arm of the STOMP study enrolled 42 patients and the Company expects to report updated data towards the end of 2017.

• On Track to Initiate New STOMP Expansion Arm Evaluating Selinexor in Combination with Darzalex (daratumumab). Karyopharm expects to dose the first patient in a new Phase 1b/2 STOMP expansion arm designed to evaluate selinexor in combination with the anti-CD38 monoclonal antibody Darzalex and low-dose dexamethasone (SDd) in heavily pretreated patients with MM. The SDd arm of the STOMP study is expected to enroll approximately 44 patients and the Company expects to report top-line data in late 2017 or early 2018.

• Reported Updated STORM and STOMP Data at ASH (Free ASH Whitepaper) 2016 Annual Meeting. Karyopharm presented updated clinical data from the ongoing Phase 2b STORM study and the ongoing Phase 1b STOMP study at the American Society of Hematology (ASH) (Free ASH Whitepaper) 2016 annual meeting. The updated STORM data demonstrated that patients treated with selinexor plus low-dose dexamethasone achieved an overall response rate (ORR), adjudicated by an Independent Review Committee, of 21% (n=78), and that the ORR was similar between patients with quad-refractory (21%; n=48) and penta-refractory (20%; n=30) disease. The updated STOMP data showed that selinexor in combination with Velcade (bortezomib) and dexamethasone (SVd) produced an ORR of 77% (investigator assessed) across all evaluable patients in the study (n=22), including patients with MM not refractory to a proteasome inhibitor (ORR 100%; n=7) and those with disease previously refractory to a proteasome inhibitor (ORR 67%; n=15).

• Co-hosted Expert Panel Discussion with the Multiple Myeloma Research Foundation (MMRF) at ASH (Free ASH Whitepaper) 2016 Annual Meeting. Karyopharm and the MMRF hosted a panel discussion featuring leading MM thought leaders at the ASH (Free ASH Whitepaper) 2016 annual meeting. Topics discussed by recognized expert panelists included the need for new MM treatments with novel mechanisms of action and the combinability of MM agents for synergistic activity. A webcast replay and transcript of the panel discussion are available at View Source

• Presented an Overview of Clinical Data Demonstrating Selinexor Activity in Combination with Proteasome Inhibitors and Immunomodulatory Agents. In an oral presentation at the International Myeloma Workshop 2017 annual meeting held March 1-4, 2017 in New Delhi, India, Karyopharm researchers presented an overview of clinical data demonstrating selinexor’s activity in combination with proteasome inhibitors and immunomodulatory drugs for the treatment of relapsed or refractory MM.
Selinexor in Diffuse Large B-Cell Lymphoma

• Top-line Data from Phase 2b SADAL Study in DLBCL Selected as a Late-Breaking Abstract at AACR (Free AACR Whitepaper) 2017 Annual Meeting. In March 2017, Karyopharm announced that an abstract highlighting top-line data from its Phase 2b SADAL study evaluating single-agent selinexor with dexamethasone in patients with relapsed or refractory DLBCL was selected as a late-breaking poster at the AACR (Free AACR Whitepaper) 2017 Annual Meeting. The poster will be presented by Marie Maerevoet, Institute Jules Bordet, Belgium, on Tuesday, April 4, 2017 from 1:00-5:00PM ET.

Targeting Disease at the Nuclear Pore

Selinexor in Other Hematologic Malignancies

• Announced Outcome of Phase 2 SOPRA Interim Analysis; Updated AML Development Strategy. In March 2017, Karyopharm announced the results of the planned interim analysis of the Phase 2 SOPRA study evaluating single-agent selinexor in relapsed or refractory acute myeloid leukemia (AML). In concert with the study’s independent Data Safety Monitoring Board (DSMB), the Company determined that the SOPRA study would not reach statistical significance for showing superiority of overall survival (OS) on selinexor versus OS on physician’s choice (PC), the study’s primary endpoint. However, since the 13% of selinexor-treated patients who achieved a complete response with or without full hematologic recovery (CR/CRi) showed a substantial OS benefit as compared to PC, they will be permitted to continue on the selinexor arm or the PC arm, as applicable, following discussion between the patient and his or her treating physician. Importantly, selinexor demonstrated a safety profile consistent with previous studies. Importantly, in the selinexor arm, there were similar rates of sepsis and lower rates of febrile neutropenia compared with the PC arm. Karyopharm plans to continue to explore the use of selinexor in combination with novel and standard agents through investigator-sponsored AML studies in both adults and children.

• Reported Final Data from Phase 2 SAIL Study in AML at ASH (Free ASH Whitepaper) 2016 Annual Meeting. Final clinical data from the Phase 2 SAIL study evaluating selinexor in combination with Ara-C and idarubicin demonstrated a compelling 55% ORR in heavily pretreated patients with relapsed or refractory AML. We believe that selinexor in combination with Ara-C and idarubicin may be an effective AML treatment option and serve as a bridge to stem cell transplantation in this patient population. Given the encouraging data observed to date across these settings, Karyopharm plans to continue clinical development of selinexor in AML through investigator sponsored trials in multiple combination regimens, including with chemotherapy.

• Published Clinical Data Demonstrating Selinexor’s Activity in Pediatric Patients with Relapsed/Refractory Leukemia in the Journal of Clinical Oncology. A paper describing results from the investigator-sponsored SELHEM study evaluating selinexor’s activity in pediatric patients with relapsed or refractory leukemia were recently published in the Journal of Clinical Oncology. In the paper, authored by Thomas B. Alexander, et al., titled "Phase I Study of Selinexor, a Selective Inhibitor of Nuclear Export, in Combination With Fludarabine and Cytarabine, in Pediatric Relapsed or Refractory Acute Leukemia," Karyopharm collaborators report that seven of the 15 evaluable patients, or 47%, achieved either a CR or a CRi. Five of the responses included CRs negative for minimal residual disease (MRD) and two patients had MRD negative CRs within the first cycle after receiving only selinexor therapy prior to any chemotherapy. Based on these data, Karyopharm plans to explore the benefit of selinexor in combination with intensive chemotherapy through investigator-sponsored Phase 2 clinical trials in pediatric patients with heavily pretreated AML.
Selinexor in Solid Tumors

• Completed Enrollment in Phase 2 Portion of the SEAL Study. In March 2017, Karyopharm completed enrollment in the randomized Phase 2 portion of the SEAL study evaluating selinexor in patients with advanced liposarcoma. The company expects to report top-line data in mid-2017.

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Reported Final Data from Phase 2 SIGN Study in Gynecologic Malignancies. In October 2016, Karyopharm reported final data from its Phase 2 SIGN study evaluating oral selinexor for the treatment of gynecological

Targeting Disease at the Nuclear Pore


malignancies, including ovarian, endometrial and cervical cancers, at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) 2016 annual meeting. Of the 20 evaluable patients with endometrial cancer, 9 met the primary endpoint (3 confirmed partial responses and 6 with stable disease of > 12 weeks), for a disease control rate of 45%. Median progression-free survival for the endometrial cancer arm was 3 months and median OS was 8 months. An investigator-sponsored Phase 3 randomized double-blind study evaluating selinexor in patients with advanced or recurrent endometrial cancer is in development and expected to initiate enrollment in late 2017.
Selinexor Early Scientific Research

• Published Preclinical Data Demonstrating Selinexor Anti-Tumor Activity in Combination with Immunotherapeutic Agents. Two papers describing the synergistic anti-tumor activity of selinexor in combination with immunotherapeutic agents, including PD-1 or PD-L1 checkpoint inhibitors, and further validating the selinexor clinical dosing schedules, were published online in Molecular Cancer Therapeutics. In the first paper, authored by Matthew R. Farren et al., titled "The exportin-1 inhibitor selinexor exerts superior anti-tumor activity when combined with T cell checkpoint inhibitors," Karyopharm researchers, in collaboration with Emory University and Ohio State University, report that selinexor combined with immune checkpoint inhibitors, including PD-1, PD-L1 or CTLA-4 blocking antibodies, significantly limited tumor growth in an aggressive murine model of melanoma. The reduction in tumor growth was accompanied by systemic changes in natural killer cells, myeloid derived suppressor cells, T cell differentiation and increased infiltration of T cells in the tumor microenvironment.

• In the second paper, authored by Paul M. Tyler et al., titled "Clinical dosing regimen of selinexor maintains normal immune homeostasis and T cell effector function in mice: implications for combination with immunotherapy," Karyopharm researchers, in collaboration with the Dana-Farber Cancer Institute, University of Amsterdam and Massachusetts General Hospital, discuss preclinical results supporting further evaluation of selinexor in combination with anti-PD-1 monoclonal antibodies as a potential treatment approach for cancer patients. In this study, it was determined that selinexor in combination with anti-PD-1 monoclonal antibodies, dosed twice weekly is the optimal dosing schedule to allow sufficient time for a fully functional CD8 T cell response and development of anti-tumor immunity. Therefore, the combination of selinexor with a PD-1 or PD-L1 checkpoint inhibitor was predicted to have added benefit over selinexor treatment alone.
KPT-8602

• Reported Phase 1 Clinical Data for KPT-8602 at ASH (Free ASH Whitepaper) 2016 Annual Meeting. Clinical data from a Phase 1/2 study evaluating KPT-8602, Karyopharm’s second-generation SINE compound, were presented at the ASH (Free ASH Whitepaper) 2016 annual meeting by Frank Cornell, MD, Vanderbilt Ingram Cancer Center. These data demonstrated that oral KPT-8602 was well tolerated in heavily pretreated patients with relapsed or refractory MM and showed early signs of encouraging efficacy.
KPT-9274

• Preclinical Data Highlighting KPT-9274’s Anti-Cancer Activity in Dogs Selected as a Late-Breaking Abstract at AACR (Free AACR Whitepaper) 2017 Annual Meeting. In March 2017, Karyopharm announced that an abstract highlighting preclinical data demonstrating KPT-9274’s activity and synergy with doxorubicin to treat dogs with lymphoma was selected as a late-breaking poster at the AACR (Free AACR Whitepaper) 2017 annual meeting. The poster will be presented by Cheryl London, Tufts University, on Wednesday, April 5, 2017 from 8:00 AM-12:00PM ET.

Targeting Disease at the Nuclear Pore

KPT-350

• Target ALS Consortium Grants $900,000 in Research Funding. The Target ALS Foundation awarded a $900,000 grant to support preclinical studies of KPT-350 in amyotrophic lateral sclerosis (ALS). The project, led by Karyopharm in collaboration with researchers from Johns Hopkins University and the University of Florida, is studying KPT-350 in preclinical models and will seek to develop an oral suspension formulation to dose patients who cannot swallow tablets.

Fourth Quarter and Year Ended December 31, 2016 Full Year Financial Results
Cash, cash equivalents and investments as of December 31, 2016, including restricted cash, totaled $175.5 million, compared to $210.0 million as of December 31, 2015.

For the year ended December 31, 2016, research and development expense was $86.9 million compared to $97.7 million for the year ended December 31, 2015. For the year ended December 31, 2016, general and administrative expense was $23.9 million compared to $21.6 million for the year ended December 31, 2015.
Karyopharm reported a net loss of $109.6 million, or $2.92 per share, for the year ended December 31, 2016, compared to a net loss of $118.2 million, or $3.32 per share, for the year ended December 31, 2015. Net loss includes stock-based compensation expense of $22.3 million and $17.1 million for the years ended December 31, 2016 and December 31, 2015, respectively.

For the quarter ended December 31, 2016, research and development expense was $20.7 million compared to $24.1 million for the quarter ended December 31, 2015. The decrease in research and development expenses resulted primarily from the timing of clinical expenses related to the development of selinexor. For the quarter ended December 31, 2016, general and administrative expense was $6.5 million compared to $5.3 million for the quarter ended December 31, 2015. Karyopharm reported a net loss of $26.9 million, or $0.65 per share, for the quarter ended December 31, 2016, compared to a net loss of $29.0 million, or $0.81 per share, for the quarter ended December 31, 2015. Net loss includes stock-based compensation expense of $5.1 million and $5.4 million for the quarters ended December 31, 2016 and December 31, 2015, respectively.

Financial Outlook
Karyopharm expects its operating cash burn, including research and development and general and administrative expenses, for the year ending December 31, 2017 to be in the range of $85 to 90 million. Based on current operating plans, Karyopharm expects that its existing cash and cash equivalents will fund its research and development programs and operations until the end of 2018, including through the data readout for the expanded STORM cohort, completion of enrollment for the BOSTON study and the advancement of other ongoing selinexor clinical studies to their next data inflection points.

On March 16, 2017 Fate Therapeutics, Inc. (NASDAQ: FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the fourth quarter and year ended December 31, 2016 (Filing, Q4/Annual, Fate Therapeutics, 2016, MAR 16, 2017, View Source [SID1234518176]).

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"The past twelve months has been a period of significant progress for Fate Therapeutics, including advancing two first-in-class product candidates to clinical development and launching our revolutionary induced pluripotent cell platform to enable our ‘one cell, many patients’ approach to cancer immunotherapy. We have recently treated the first subject in our PROTECT study with ProTmune, our next-generation mobilized peripheral blood graft with the potential to change the field of allogeneic hematopoietic cell transplantation, and FDA clearance was granted for clinical investigation of FATE-NK100, our first-in-class adaptive memory natural killer cell product candidate. Additionally, we established collaborations with Dr. Jeffrey S. Miller at the University of Minnesota and Dr. Michel Sadelain at Memorial Sloan Kettering Cancer Center to build our off-the-shelf cancer immunotherapy pipeline using master pluripotent cell lines," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "Looking ahead to a data-rich 2017, having recently raised approximately $70 million from a leading investor syndicate, we are in a position of financial strength and are poised to be the first company to advance a cancer immunotherapy created from a master pluripotent cell line toward clinical development."

Recent Highlights & Program Updates

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First Subject Treated with ProTmune for GvHD Prevention. The Company’s Phase 1/2 PROTECT study of ProTmune for the prevention of acute graft-versus-host disease (GvHD) has treated its first subject and is open across ten U.S. centers. The Phase 1 stage of the clinical study is expected to enroll up to ten adult subjects with hematologic malignancies undergoing allogeneic mobilized peripheral blood hematopoietic cell transplantation. ProTmune has been granted Fast Track and Orphan Drug Designations by the U.S. Food and Drug Administration (FDA) and Orphan Medicinal Product Designation by the European Medicines Agency.



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IND Cleared by FDA for FATE-NK100 in AML. Enrollment of a first-in-human clinical trial of FATE-NK100 under an investigator-initiated clinical trial is poised to commence at the Masonic Cancer Center, University of Minnesota (UMN). In February 2017, the FDA cleared the Investigational New Drug (IND) application of FATE-NK100 for the treatment of refractory or relapsed acute myelogenous leukemia (AML). An oral presentation at the 58th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition in December 2016 featured FATE-NK100 preclinical data. The natural killer (NK) cell product candidate demonstrated enhanced anti-tumor activity across a broad range of liquid and solid tumors, improved persistence and increased resistance to immune checkpoint pathways as compared to current conventional NK cell therapies.

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Expanded Collaboration with UMN to Advance hnCD16-iNK Cell Product Candidate. In February 2017, Fate Therapeutics and UMN expanded their collaboration, initiating the clinical translation of a first-of-kind product candidate, an off-the-shelf cellular immunotherapy created from an induced pluripotent stem cell (iPSC) line for the treatment of cancer. Similar to the manufacture of therapeutic antibodies using master cell lines, the Company’s targeted NK cell product candidate is created from a master iPSC line engineered to express a proprietary high-affinity, non-cleavable CD16 (hnCD16) receptor. Preclinical data, which the Company plans to present at the upcoming 2017 Annual Meeting of the American Association for Cancer Research (AACR) (Free AACR Whitepaper), demonstrates the potential of its hnCD16-iNK cell product candidate to complement standard-of-care monoclonal antibody therapy for the treatment of breast, head and neck, colorectal and certain blood cancers by binding to and selectively killing antibody-coated tumor cells.

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Launched iPSC-derived NK Cell Research Collaboration with Oslo University Hospital. In February 2017, Fate Therapeutics formed a two-year research collaboration with Oslo University Hospital to develop NK cell product candidates expressing certain activating and targeting receptors using master pluripotent cell lines. The collaboration is being led by Karl-Johan Malmberg, M.D., Ph.D., Group Leader of Natural Killer Cell Biology and Cell Therapy, Department of Immunology, who has extensively studied the human NK cell repertoire, including the influence of killer cell immunoglobulin-like receptors, in regulating anti-tumor activity.

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Bolstered NK Cell Product and iPSC Platform Intellectual Property. In December 2016, the Company exclusively licensed intellectual property from UMN covering compositions of a modified CD16, as well as certain chimeric antigen, receptors and immune cells expressing such receptors. In addition, in March 2017, the U.S. Patent and Trademark Office issued U.S. Patent No. 9,593,311, which is owned by the Whitehead Institute for Biomedical Research and licensed exclusively to the Company for all therapeutic purposes, protecting cellular compositions comprising an iPSC and a WNT pathway activator. Publications in the pluripotent cell biology field have shown that WNT pathway activation is required to enable single cell isolation and clonal expansion of iPSCs, which are critical steps in generating, engineering and maintaining master pluripotent cell lines.

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Completed $56.7M Common and Preferred Stock Private Placement. In November 2016, Fate Therapeutics issued 2.82 million shares of non-voting Class A Preferred Stock at $13.30 per share, each of which is convertible into five shares of common stock upon certain conditions, and 7.24 million shares of common stock at $2.66 per share. The sale and issuance was pursuant to a securities purchase agreement with certain institutional and accredited investors including Redmile



Group LLC, BVF Partners L.P., EcoR1 Capital LLC, Franklin Advisers, Inc. and certain members of the Company’s Board of Directors and management.

Fourth Quarter 2016 Financial Results

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Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of December 31, 2016 were $92.1 million compared to $64.8 million as of December 31, 2015. The increase was primarily driven by net proceeds from the sale of the Company’s securities in two private issuances, a $56.7 million sale and issuance of preferred and common stock in November 2016 and a $10.2 million sale and issuance of common stock in August 2016. These proceeds were offset by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank.

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Total Revenue: Revenue was $1.0 million for the fourth quarter of 2016 compared to $1.1 million for the comparable period in 2015. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.

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Total Operating Expenses: Total operating expenses were $8.7 million for the fourth quarter of 2016 compared to $8.0 million for the comparable period in 2015. Operating expenses for the fourth quarter of 2016 included $0.8 million of stock compensation expense, compared to $0.5 million for the comparable period in 2015.

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R&D Expenses: Research and development expenses were $6.2 million for the fourth quarter of 2016 compared to $5.4 million for the comparable period in 2015. The increase in R&D expenses was primarily related to an increase in third-party service provider fees to support the Company’s clinical development of ProTmune and the preclinical development of its NK cell programs.

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G&A Expenses: General and administrative expenses were $2.5 million for the fourth quarter of 2016 compared to $2.6 million for the comparable period in 2015. The decrease in G&A expenses was primarily related to a decrease in intellectual property-related expenses.

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Common Shares Outstanding: Common shares outstanding as of December 31, 2016 were 41.4 million compared to 28.7 million as of December 31, 2015. Common shares outstanding increased primarily as a result of the Company’s sale and issuance of its securities in two private issuances in November and August 2016, respectively.

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Preferred Shares Outstanding: Preferred shares outstanding as of December 31, 2016 were 2.82 million. Preferred shares outstanding increased as a result of the Company’s sale and issuance of 2.82 million shares of non-voting Class A convertible preferred stock to Redmile Group, LLC in November 2016.

On March 16, 2017 Omeros Corporation (NASDAQ: OMER), a biopharmaceutical company committed to discovering, developing and commercializing both small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system, reported recent highlights and developments as well as financial results for the fourth quarter and year ended December 31, 2016 (Press release, Omeros, MAR 16, 2017, View Source [SID1234518173]).

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4Q 2016 total and OMIDRIA revenues were $12.9 million. Revenues from OMIDRIA sales rose 94% from the prior year’s fourth quarter and 14% from 3Q 2016. OMIDRIA units sold in the fourth quarter increased by 22% over the third quarter.
Total year 2016 revenues were $41.6 million, a 208% increase over 2015, the year in which OMIDRIA was launched.
Net loss in 4Q 2016 was $19.6 million, or $0.45 per share, and, for the full year of 2016, was $66.7 million, or $1.65 per share. Both periods included a $5.6 million ($0.13 per share in 4Q) charge for early extinguishment of previously existing debt. Non-cash expenses for 4Q and the full year of 2016 were $5.2 million, or $0.12 per share, and $16.1 million, or $0.40 per share, respectively.
Successful outcome of post-marketing clinical trial of OMIDRIA in pediatric patients undergoing cataract surgery, which is expected to result in an additional six months of regulatory exclusivity.
Opened enrollment in Phase 3 clinical trial of OMS721 in patients with atypical hemolytic uremic syndrome (aHUS).
Positive data from Phase 2 clinical trials of OMS721 in both renal disorders and hematopoietic stem cell transplant-associated thrombotic microangiopathy (HSCT-TMA).
"2016 was a year of significant achievements across a wide range of our programs," said Gregory A. Demopulos, M.D., chairman and chief executive officer of Omeros. "OMIDRIA sales grew more than two hundred percent over the previous year and our pipeline made equally impressive progress. Our Phase 3 trial in aHUS with our MASP-2 inhibitor OMS721 is underway, and positive OMS721 Phase 2 data in both IgA nephropathy and HSCT-TMA have set the stage for additional Phase 3 registration trials this year. MASP-3, targeted by our OMS906 program, was shown to be the key activator of the alternative pathway. Both OMS906 and our PDE7 inhibitor OMS527 are advancing quickly toward the clinic, and our GPCR program continues to generate exciting data over broad therapeutic areas, including immuno-oncology. We are pleased with Omeros’ accomplishments in 2016, and we expect that 2017 will build on those successes."

Fourth Quarter and Recent Highlights and Developments

Omeros reported in November 2016 the successful outcome of its recently completed post-marketing clinical trial of the effect of OMIDRIA in pediatric patients undergoing cataract surgery. In the trial, OMIDRIA was well tolerated with adverse event rates consistent with those seen in pediatric cataract surgery and with the control group. The company plans to submit a supplemental NDA this year, requesting expanded label language to cover patients of any age. Omeros expects that this submission will result in an additional six months of regulatory exclusivity for OMIDRIA.
Highlights and developments regarding OMS721, Omeros’ lead human monoclonal antibody in its mannan-binding lectin-associated serine protease-2 (MASP-2) program for the treatment of thrombotic microangiopathies (TMAs), including aHUS and HSCT-TMA, and for the treatment of complement-related renal diseases, include:
Enrollment has opened in Omeros’ Phase 3 clinical trial in patients with aHUS.
Omeros reported positive data (p = 0.017) from its Phase 2 clinical trial of OMS721 for the treatment of renal disorders, including IgA nephropathy and membranous nephropathy, in October 2016. In this trial, OMS721 significantly improved key endpoints of renal function, and patients achieved partial remission with only 12 weeks of dosing. Also in October 2016, Omeros announced positive results in patients with HSCT-TMA from the company’s Phase 2 clinical trial of OMS721 in TMAs, with clinically meaningful improvement in measures of red blood cell destruction, specifically lactate dehydrogenase (LDH) and haptoglobin levels (p < 0.01 and p < 0.06, respectively).
Following discussion with the FDA, the company plans to pursue breakthrough therapy designation for OMS721 in IgA nephropathy and in HSCT-TMA. Omeros also has been pursuing accelerated approval for OMS721 in both of these indications as well as in aHUS. The FDA has granted fast track designation for OMS721 in patients with aHUS and orphan designation for OMS721 in patients with TMAs, including aHUS and HSCT-TMA.
Highlights and developments regarding OMS906, Omeros’ lead antibody targeting mannan-binding lectin-associated serine protease-3 (MASP-3), a protein essential for the activation of the alternative pathway of complement (APC), include:
In November 2016, the company announced data from the evaluation of OMS906 in non-human primates. Single-dose administration of OMS906 to cynomolgus monkeys resulted in sustained ablation of systemic APC activity for approximately 16 days. The APC is involved in a wide range of diseases, including paroxysmal nocturnal hemoglobinuria (PNH), aHUS, age-related macular degeneration, arthritis, asthma and traumatic brain injury. No safety concerns were identified.
Omeros is finalizing selection of lead and back-up molecules and preparing to initiate scale-up for clinical trials. The company is evaluating PNH as the first clinical indication for OMS906.
In October 2016, Omeros entered into a $125.0 million senior secured credit facility with CRG Servicing LLC, under which the company borrowed $80.0 million in November 2016. The credit facility has a six-year term with four years (through December 31, 2020) of interest-only payments after which quarterly principal and interest payments will be due through the September 30, 2022 maturity date; in addition, there is the potential to extend the interest-only period through maturity if certain milestones are satisfied. The company may borrow additional tranches of up to $25.0 million and $20.0 million, subject to the satisfaction of certain milestones on or before June 30, 2017 and December 31, 2017, respectively.
Financial Results

Fourth Quarter 2016

For the quarter ended December 31, 2016, total revenues were $12.9 million, all relating to sales of OMIDRIA. This compares to OMIDRIA revenues of $6.7 million for the same period in 2015. On a sequential quarter-over-quarter basis, OMIDRIA revenue grew $1.6 million, or 14%. The increase in units sold from 3Q to 4Q 2016 was 22%. The quarter-over-quarter increases in OMIDRIA revenue and units sold are due to continued acceptance of and increased demand for OMIDRIA in the ophthalmic surgery community.

Total operating costs and expenses for the three months ended December 31, 2016 were $24.8 million compared to $24.7 million for the same period in 2015. The change in the current year quarter was primarily due to increased legal costs associated with the company’s patent infringement lawsuit against Par Pharmaceutical and additional headcount-related costs, partially offset by a decrease in research and development costs due to the timing of clinical and manufacturing activities.

In November 2016, the company incurred a $5.6 million loss ($0.13 per share) on early extinguishment of debt associated with the initiation of a new secured credit facility and the prepayment of Omeros’ prior secured credit facility.

For the three months ended December 31, 2016, Omeros reported a net loss of $19.6 million, or $0.45 per share, which included noncash expenses of $5.2 million ($0.12 per share). This compares to the prior year’s fourth quarter when Omeros reported a net loss of $19.8 million, or $0.52 per share, which included non-cash expenses of $2.8 million ($0.07 per share).

At December 31, 2016, the company had cash, cash equivalents and short-term investments of $45.3 million. In addition, the company had $5.8 million of restricted cash on hand to satisfy its credit facility covenant and lease obligations.

Full Year 2016

Revenues for the full year 2016 were $41.6 million, compared to $13.5 million for the full year 2015.

Total operating costs and expenses for the year ended December 31, 2016 were $95.9 million, an increase of $11.1 million compared to 2015. The 2016 increase related primarily to the Par lawsuit and to increased employee costs, including stock compensation costs.

For the full year 2016, Omeros reported a net loss of $66.7 million, or $1.65 per share, including non-cash expenses of $16.1 million, or $0.40 per share. This compares to a net loss of $75.1 million, or $2.00 per share in 2015, including non-cash expenses of $11.0 million, or $0.29 per share.