On February 29, 2016 Intrexon Corporation (NYSE: XON), a leader in synthetic biology, reported its fourth quarter and full year results for 2015 (Filing, Q4/Annual, Intrexon, 2015, FEB 29, 2016, View Source [SID:1234509288]).

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Business Highlights and Recent Developments:

• Currently engaging with agencies of numerous governments and non-governmental organizations concerning the potential use of Oxitec’s OX513A to reduce or eradicate populations of the Aedes aegypti mosquito, the primary vector for dengue, chikungunya, and Zika virus;

• Announced expansion of Oxitec’s ‘Friendly Aedes aegypti Project’ in Piracicaba, Brazil to an area covering 35,000 to 60,000 residents following strong results demonstrating 82% reduction in wild Ae. aegypti larvae. In preparation of this growing program and to meet increasing demand for its proprietary vector control solution, Oxitec is initiating a new mosquito production facility in Piracicaba that will have capacity to protect over 300,000 people;

• Entered into research collaboration with Janssen Pharmaceutica NV, one of the Janssen Pharmaceutical Companies of Johnson & Johnson, to discover and develop ActoBiotics therapies directed against selected targets to treat Type 2 diabetes (T2D), obesity and/or metabolic disorders related to energy dysregulation. The ActoBiotics oral delivery system for biological effectors is well suited to tackle multiple aspects of T2D;

• In addition to Janssen, signed three additional health collaborations in 2015 utilizing the ActoBiotics platform: Oragenics (NYSE MKT: OGEN) for treatment of diseases of the oral cavity, Synthetic Biologics (NYSE MKT: SYN) for treatment of the metabolic disorder phenylketonuria, and ZIOPHARM Oncology (NASDAQ: ZIOP) for treatment of graft-versus-host-disease;

• Expanded relationship with Fibrocell Science via a new Exclusive Channel Collaboration (ECC) for the development of genetically-modified fibroblasts to treat chronic inflammatory and degenerative diseases of the joint, including arthritis and related conditions, with cell-based therapeutics that have been modified to express one or more proteins at sites of joint inflammation helping overcome the limitations of existing treatment approaches;

• Entered into a multi-year collaboration with the Harvest Intrexon Enterprise Fund, sponsored by Harvest Capital Strategies, LLC. The fund, which raised $245 million, is dedicated to the inventions and discoveries of Intrexon suitable for pursuit by a startup;

• Announced first ECC with a startup, Thrive Agrobiotics, Inc., backed by the Harvest Intrexon Enterprise Fund, utilizing the ActoBiotics platform for expression of nutritive proteins to improve the overall growth and feed efficiency in weaning piglets;

• Established Intrexon Energy Partners II, a joint venture with a select group of external investors employing the Company’s proprietary gas-to-liquids bioconversion platform utilizing methanotrophs to produce 1,4-butanediol (BDO), a key chemical intermediate with a global market value exceeding $5 billion used to manufacture spandex, polyurethane, plastics, as well as polyester;
• Announced exclusive agreement between Intrexon Energy Partners (IEP) and Dominion Energy, a subsidiary of Dominion Resources (NYSE: D), to explore the potential for commercial-scale biological conversion of natural gas to isobutanol, a drop-in fuel with numerous advantages over other clean burning gasoline blendstocks. Dominion will be the exclusive partner to construct, own, operate, and maintain the production facilities in the Marcellus and Utica Shale Basins via potential long-term services agreements with IEP;

• Strengthened the Company’s immuno-oncology efforts via a collaboration with the biopharmaceutical business of Merck KGaA, Darmstadt, Germany including advancement of the first two chimeric antigen receptor (CAR) T-cell targets of interest, a Cooperative Research and Development Agreement with the National Cancer Institute, as well as through an exclusive licensing agreement with The University of Texas MD Anderson Cancer Center for pursuit of non-viral adoptive cellular therapies in conjunction with ZIOPHARM Oncology;

• Declared a special stock dividend of 17,830,305 shares of ZIOPHARM common stock owned by Intrexon to its shareholders;

• In the food sector where Intrexon’s strategy centers on responsibly harnessing the power of biology and technology to produce nutritious food that is more appetizing and convenient to consumers, two of its subsidiaries received landmark approvals in 2015 – the AquAdvantage Salmon by the U.S. Food and Drug Administration and Arctic Apples by the U.S. Department of Agriculture Animal and Plant Health Inspection Service and Health Canada; and

• Completed the acquisitions of Oxitec Ltd., a company that has pioneered a targeted and innovative approach to control mosquitoes that spread disease and insect pests that damage crops; Okanagan Specialty Fruits, the pioneering agricultural company behind the Arctic apple; and ActoGeniX, the biopharmaceutical company forging a new frontier in cellular therapeutics.
Fourth Quarter Financial Highlights:

• Total revenues of $41.5 million, an increase of 34% over the fourth quarter of 2014;

• Net loss of $32.7 million attributable to Intrexon, or $(0.28) per basic share, including non-cash charges of $19.4 million;

• Adjusted EBITDA of $9.4 million, or $0.08 per basic share;

• Cash consideration received for reimbursement of research and development services covered 64% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries); and

• Cash, cash equivalents, and short-term and long-term investments totaled $343.8 million, and the value of equity securities totaled $83.7 million at December 31, 2015.
Full Year Financial Highlights:

• Total revenues of $173.6 million, an increase of 141% over the year ended December 31, 2014;

• Net loss of $84.5 million attributable to Intrexon, or $(0.76) per basic share, including non-cash charges of $61.6 million;

• Adjusted EBITDA of $53.4 million, or $0.48 per basic share;

• Distributed as a dividend to Intrexon’s shareholders equity securities having a market value of $172.4 million at the time of distribution;

• Total consideration received for technology access fees and reimbursement of research and development services covered 167% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries); and

• Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 133% of consolidated cash operating expenses.

"Our essential strategy is accomplished when our team executes well, and in 2015 our team executed beautifully its mission to advance its leadership position in the rapidly emergent field of engineered biology," commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon. "Our model has as its chief objective the attainment of a large portfolio of significant economic interests in products across multiple industries while maintaining the discipline of living within our means, those being provided chiefly from our partners with whom we are working to develop world-changing products."

Mr. Kirk concluded, "We are well positioned and excited as we look forward to the remainder of 2016, a year in which we intend to make progress along three principal axes. First, extending the trend that we showed in 2015 over 2014, we expect to continue our financial growth trajectory. Second, we expect to deliver to the world in this year several examples of projects that were initiated within our company, and these may include specimens from our methanotrophic bioconversion platform and clinical stage therapeutic candidates. Finally, we expect to partner some of our mature stage assets with companies that add real value toward their maximized commercial realizations."

Fourth Quarter 2015 Financial Results Compared to Prior Year Period
Total revenues were $41.5 million for the quarter ended December 31, 2015 compared to $31.1 million for the quarter ended December 31, 2014, an increase of $10.4 million, or 34%. Collaboration and licensing revenues increased $8.2 million over the three months ended December 31, 2014 due to (i) the recognition of deferred revenue for upfront payments received from the Company’s license and collaboration agreement with the biopharmaceutical business of Merck KGaA, which became effective in May 2015, and from other collaborations signed by Intrexon in 2015 and (ii) increased research and development services for both new collaborations and for the expansion or addition of new programs with previously existing collaborators, including ZIOPHARM Oncology, Inc. (ZIOPHARM) and Intrexon’s joint venture with Intrexon Energy Partners, LLC (Intrexon Energy Partners). Product revenues were $9.2 million for the three months ended December 31, 2015 compared to $7.4 million for the three months ended December 31, 2014, an increase of $1.8 million, or 25%. The increase in product revenues during the three months ended December 31, 2015 primarily relates to an increase in the quantity of pregnant cows and weaned calves sold due to higher customer demand. Gross margin on product revenues declined for the period due to a decline in the average sales price and gross margins for sales of livestock previously used in production. Service revenues and gross margins remained consistent period over period.

Total operating expenses were $75.9 million for the quarter ended December 31, 2015 compared to $50.1 million for the quarter ended December 31, 2014, an increase of $25.8 million, or 51%. Research and development expenses were $26.2 million for the three months ended December 31, 2015 compared to $17.6 million for the three months ended December 31, 2014, an increase of $8.6 million, or 49 percent. Salaries, benefits and other personnel costs increased $3.6 million due to (i) an increase in research and development employees necessary to support new and expanded collaborations, (ii) the additional costs of stock options and performance-based bonus awards for all research and development employees and (iii) the cost of new employees assumed as a result of Intrexon’s various acquisitions. Lab supplies and contract research organizations expenses increased $2.7 million as a result of (i) the progression of programs into the preclinical phase with certain of Intrexon’s collaborators; (ii) the increased level of research and development services provided to the Company’s collaborators; and (iii) costs incurred as a result of the Company’s various acquisitions. Depreciation and amortization increased $1.8 million primarily from the acquisition of property and equipment and intangible assets assumed as a result of Intrexon’s various acquisitions. Selling, general and administrative expenses were $34.7 million for the three months ended December 31, 2015 compared to $19.8 million for the three months ended December 31, 2014, an increase of $14.9 million, or 75 percent. Salaries, benefits and other personnel costs increased $10.5 million due to (i) an increase in selling, general and administrative employees necessary to support Intrexon’s expanding operations, (ii) the additional costs of stock options and performance-based bonus awards, including those paid under the 2015 annual executive bonus plan, for all selling, general and administrative employees; (iii) the cost of new employees assumed as a result of the Company’s various acquisitions. Legal and professional expenses increased $2.9 million primarily due to (i) incremental legal and professional fees related to the ongoing operations of acquired subsidiaries; and (ii) increased professional and business development expenses related to certain collaborations entered into during the three months ended December 31, 2015.
Total other income, net, was $3.7 million for the quarter ended December 31, 2015 compared to $38.5 million for the quarter ended December 31, 2014, a decrease of $34.8 million, or 90%. This decrease was primarily related to the changes in the value of Intrexon’s securities portfolio.

Full Year 2015 Financial Results Compared to Prior Year Period
Total revenues were $173.6 million for the year ended December 31, 2015 compared to $71.9 million for the year ended December 31, 2014, an increase of $101.7 million, or 141%. For the year ended December 31, 2015, total product revenues of $41.9 million were derived primarily from the sale of pregnant cows, live calves and livestock used in production and service revenues of $42.9 million were derived primarily from the provision of in vitro fertilization and embryo transfer services. For the year ended December 31, 2014, product and service revenues were $11.5 million and $14.8 million, respectively. The increases relate primarily to the inclusion of a full year of results for Trans Ova in 2015 versus approximately five months of results for 2014. Collaboration and licensing revenues increased $42.6 million over the year ended December 31, 2014 due to (i) the recognition of deferred revenue for upfront payments received from Intrexon’s license and collaboration agreement with the biopharmaceutical business of Merck KGaA, which became effective in May 2015, and from other collaborations signed by the Company in 2015; (ii) increased research and development services performed for both for new collaborations and for the expansion or addition of new programs with previously existing collaborators, including primarily ZIOPHARM, Fibrocell Science, Inc., Genopaver, LLC, and Intrexon Energy Partners and (iii) the recognition of previously deferred revenue related to collaboration agreements for which Intrexon satisfied all of its obligations or which were terminated during in 2015.

Total operating expenses were $320.5 million for the year ended December 31, 2015 compared to $141.9 million for the year ended December 31, 2014, an increase of $178.6 million, or 126%. Research and development expenses were $147.5 million for the year ended December 31, 2015 compared to $59.0 million for the year ended December 31, 2014, an increase of $88.5 million, or 150%. In January 2015, Intrexon paid $59.6 million in common stock for an exclusive license to certain technologies owned by the University of Texas MD Anderson Cancer Center, or MD Anderson. Salaries, benefits and other personnel costs increased $12.5 million due to (i) an increase in research and development employees necessary to support new and expanded collaborations, (ii) the additional costs of stock options and performance-based bonus awards for all research and development employees; and (iii) the cost of new employees assumed as a result of Intrexon’s various acquisitions. Lab supplies and contract research organization expenses increased $8.2 million as a result of (i) the progression of programs into the preclinical phase with certain of Intrexon’s collaborators; (ii) the increased level of research and development services provided to the Company’s collaborators; and (iii) costs incurred as a result of the Company’s various acquisitions. Depreciation and amortization increased $4.0 million primarily from the acquisition of property and equipment and intangible assets assumed as a result of Intrexon’s various acquisitions. Selling, general and administrative expenses were $109.1 million for the year ended December 31, 2015 compared to $63.6 million for the year ended December 31, 2014, an increase of $45.5 million, or 72%. Salaries, benefits and other personnel costs increased $28.0 million due to (i) the inclusion of selling, general and administrative employees of Trans Ova for a full year in 2015 compared to approximately five months in 2014; (ii) an increase in selling, general and administrative employees necessary to support Intrexon’s expanding operations, (iii) the additional costs of stock options and performance-based bonus awards, including those paid under the 2015 annual executive bonus plan, for all selling, general and administrative employees; and (iv) the cost of new employees assumed as a result of the Company’s various acquisitions. Legal and professional expenses increased $7.0 million primarily due to costs associated with Intrexon’s various 2015 acquisitions, the license agreement with MD Anderson, a full year of legal and professional costs for Trans Ova, Intrexon’s 2015 public offerings, and other business development activity. Other selling, general and administrative expenses, including rent, utilities and depreciation and amortization, have increased in 2015 as a result of (i) the expansion of Intrexon’s operations, including through the Company’s various acquisitions, and (ii) a full year of Trans Ova expenses compared to approximately five months in 2014. Total operating expenses for the year ended December 31, 2015 also include $63.9 million of products and services costs which primarily consist of employee compensation costs, livestock, feed, drug supplies, recipient costs and facility charges related to the production of such products and services; this amount was $19.3 million for the year ended December 31, 2014. The increase relates primarily the inclusion of a full year of results for Trans Ova in 2015 versus five months of results for 2014.

Total other income, net, was $68.8 million for the year ended December 31, 2015 compared to total other expense, net, of $10.5 million for the year ended December 31, 2014, an increase of $79.3 million. This increase was primarily related to the $81.4 million realized gain recognized upon the special stock dividend of all of Intrexon’s shares of ZIOPHARM to Intrexon’s shareholders in June 2015.

On February 29, 2016 PTC Therapeutics, Inc. (NASDAQ: PTCT) reported a corporate update and reported financial results for the fourth quarter and full year ending December 31, 2015 (Filing, Q4/Annual, PTC Therapeutics, 2015, FEB 29, 2016, View Source [SID:1234509287]).

"We are shocked and disappointed to have received a Refuse to File (RTF) letter from the FDA regarding our NDA for Translarna, and we are engaging in dialogue with the FDA to determine a path forward," said Stuart W. Peltz, Ph.D., Chief Executive Officer, PTC Therapeutics, Inc. "Despite this recent setback, we achieved a number of key milestones in 2015 as we continue to build PTC into a global, commercial biotechnology company. Translarna had a landmark first year launch in nonsense mutation Duchenne muscular dystrophy and we are currently under regulatory review in the EU to remove the condition to the existing marketing authorization as well as expand our label to include nonsense mutation cystic fibrosis. Our Phase 3 ACT CF clinical trial is fully enrolled and our clinical stage SMA and cancer stem cell assets continue to progress. I am proud of what we accomplished in 2015. Resilience has been one of our key values since I founded PTC in 1998 and our team continues to work diligently to bring Translarna to patients globally."

Key Fourth Quarter, Full Year 2015 and other Corporate Highlights:

· Refuse to File letter received from the FDA regarding Translarna for nonsense mutation Duchenne muscular dystrophy (nmDMD). The letter from the U.S. Food and Drug Administration (FDA) received on February 22, 2016 stated that the new drug application (NDA) for Translarna was not sufficiently complete to permit a substantive review. Specifically, PTC was notified in the letter that, in the view of the FDA, both the Phase 2b and ACT DMD trials were negative and do not provide substantial evidence of effectiveness. The FDA also characterized certain of the company’s adjustments to the ACT DMD study as post hoc and therefore not supportive of effectiveness. In addition, the FDA noted that the NDA did not contain adequate information regarding the abuse potential of Translarna, a requirement for new molecules that cross the blood-brain barrier. PTC is engaging in dialogue with the FDA to discuss and clarify the matters set forth in the letter and to determine the best path forward.

· Successful first year Translarna launch with 2015 revenues of $33.7M. PTC has established a strong global commercial footprint launching the first approved therapy in Duchenne muscular dystrophy (DMD), with sales generated in 23 countries including most recently Argentina, the Czech Republic, Hungary, Portugal and Singapore. PTC is targeting to expand access to Translarna to over 35 countries by the end of 2016. Market access discussions regarding funding on a country-by-country basis are ongoing. In the UK, PTC has had constructive discussions with the National Health Services (NHS) England regarding a managed access agreement for Translarna with a decision from the National Institute for Health and Care Excellence (NICE) expected in the coming months. In Germany, PTC has had multiple discussions with the German Federal Association of the Statutory Health Insurances (GKV-SV) over the last several months to come to agreement on pricing and reimbursement. Recently, these discussions transitioned into an arbitration process, which did not lead to an acceptable agreement. As a result, PTC expects to delist Translarna from the German pharmacy ordering system. Under these circumstances, patients and healthcare professionals may be able to

access Translarna through a reimbursed importation pathway possible under German law, thus minimizing any access issues for existing and new German patients.

· Actively pursuing regulatory approvals for Translarna in DMD globally. In early January 2016, PTC submitted the ACT DMD Phase 3 results to the European Medicines Agency (EMA) in fulfillment of the principal condition of the EMA marketing authorization for the treatment of nmDMD in ambulatory patients aged five and over. The submission to the EMA, called a type II variation, seeks to remove the condition to the existing marketing authorization. PTC anticipates the Committee for Medicinal Products for Human Use (CHMP) will issue its recommendation regarding this request in mid-2016. Translarna also received regulatory approvals in both Israel and South Korea in 2015. In September 2015, Health Canada initiated an expedited review of Translarna for potential approval for nmDMD in the first half of 2016.

· ACT CF Phase 3 clinical trial on track for completion by year-end 2016 with top-line results expected early 2017. In November 2015, PTC announced that it had completed enrollment for ACT CF, the company’s second Phase 3 clinical trial of Translarna for patients with nonsense mutation cystic fibrosis (nmCF). ACT CF is a 48-week placebo-controlled Phase 3 clinical trial designed to evaluate the effect of Translarna in patients six years of age or older with nmCF not receiving chronic inhaled aminoglycosides. During the third quarter, PTC submitted a variation to its marketing authorization requesting EMA approval of Translarna for the treatment of nmCF based on the company’s previous Phase 3 study. PTC anticipates the CHMP will issue its recommendation regarding this submission in mid-2016.

· As part of 10 by ‘20 strategy, four additional indications in development for Translarna. Given its mechanism of action, Translarna has the potential to address numerous genetic disorders caused by a nonsense mutation to address significant unmet need across a spectrum of many rare diseases. In addition to its advanced DMD and CF programs, PTC is pursuing indications in mucopolysaccharidosis type I (MPS I), aniridia, and two genetically defined epilepsy disorders, Dravet syndrome and CDKL5. PTC’s goal is to investigate Translarna’s activity in a minimum of ten indications beyond DMD

and CF by 2020 in order to deliver on its commitment to patients and maximize the potential of Translarna as both a product and a pipeline.

· Internally developed pipeline continues to progress. In January 2016, clinical development of the spinal muscular atrophy (SMA) program, a collaboration with Roche and the SMA Foundation, resumed with a second compound, RG7916, beginning a Phase 1 study in healthy volunteers. In addition, PTC’s cancer stem cell program in oncology continues to advance with Phase 1 data expected in 2016. PTC’s discovery group is focused on the advancement of novel programs for rare and neglected disorders including next generation nonsense read-through, Huntington’s disease and familial dysautonomia.

· Maintained strong balance sheet with approximately $339 million in cash and cash equivalents. PTC completed a successful $150 million offering of 3.00% convertible senior notes due 2022 in August 2015, raising net proceeds of approximately $145 million. PTC finished 2015 with approximately $339 million in cash and cash equivalents.

Upcoming Events:

PTC will participate in the following upcoming conferences:

· Cowen and Company’s 36th Annual Health Care Conference on March 8 at 11:20 a.m. (ET) in Boston, MA
· Barclay’s Global Healthcare Conference on March 15 at 1:35 p.m. (ET) in Miami, FL
· Deutsche Bank’s 41st Annual Healthcare Conference on May 4-5 in Boston, MA

The presentations will be webcast live on the Events and Presentations page under the investor relations section of PTC’s website at www.ptcbio.com and will be archived for two weeks following the presentation. PTC’s current investor presentation is available at the same website location.

Fourth Quarter and Full Year 2015 Financial Highlights:

· Translarna net product sales were $12.7 million for the fourth quarter of 2015, representing 30% sequential growth versus $9.8 million in the third quarter of 2015. For the full year 2015, Translarna generated $33.7 million in net product sales compared to $0.7 million in the prior year.

· Total revenues for the fourth quarter of 2015 were $12.7 million compared to $12.7 million in the same period of 2014. Total revenues for 2015 were $36.8 million compared to $25.2 million for the same period of 2014. The change in total revenue was a result of the expanded commercial launch of Translarna during 2015, which received marketing authorization from the EMA in August 2014, offset by lower grant revenue.

· Non-GAAP R&D expenses were $31.4 million for the fourth quarter of 2015, excluding $3.7 million in non-cash, stock-based compensation expense, compared to $23.7 million for the fourth quarter of 2014, excluding $3.2 million in non-cash, stock-based compensation expense. GAAP R&D expenses were $35.0 million for the fourth quarter of 2015 compared to $26.9 million for the fourth quarter of 2014. For the full year 2015, non-GAAP R&D expenses were $105.7 million, excluding $16.1 million in non-cash, stock-based compensation expense, compared to $70.1 million for 2014, excluding $9.7 million in non-cash, stock-based compensation expense. For the full year 2015, GAAP R&D expenses were $121.8 million compared to $79.8 million in the prior year period. The increase in R&D expense for the fourth quarter and year ended December 31, 2015, as compared to the prior year periods was primarily due to expansion of our clinical development activities including late-stage studies and extension programs in both Duchenne muscular dystrophy and cystic fibrosis.

· Non-GAAP SG&A expenses were $21.7 million for the fourth quarter of 2015, excluding $4.2 million in non-cash, stock-based compensation expense, compared to $14.5 million for the fourth quarter of 2014, excluding $3.5 million in non-cash, stock-based compensation expense. GAAP SG&A expenses were $25.9 million for the fourth quarter of 2015 compared to $18.0 million for the fourth quarter of 2014. For the full year 2015,

non-GAAP SG&A expenses were $64.2 million, excluding $17.8 million in non-cash, stock-based compensation expense, compared to $35.2 million for 2014, excluding $9.6 million in non-cash, stock-based compensation expense. GAAP full-year 2015 SG&A expenses were $82.1 million compared to $44.8 million in 2014. The increase in SG&A expense for the fourth quarter and year ended December 31, 2015, as compared to the prior year periods primarily resulted from additional costs associated with commercial activities in support of the launch of Translarna for DMD.

· Net loss for the fourth quarter of 2015 was $50.9 million compared to a net loss of $27.3 million for the same period in 2014. Net loss for the full year 2015 was $170.4 million compared to $93.8 million for the same period in 2014.

· Cash, cash equivalents, and marketable securities totaled approximately $339 million at December 31, 2015 compared to approximately $315 million at December 31, 2014. This increase includes net proceeds of approximately $145 million from a $150 million convertible debt offering completed in the third quarter of 2015.

· Shares issued and outstanding as of December 31, 2015 were 34.3 million, which includes 0.3 million shares of unvested restricted stock.

2016 Guidance:

· Total ex-U.S. Translarna nmDMD revenues for 2016 are anticipated to be between $65 and $85 million. This guidance assumes current exchange rates and the continued commercial expansion for Translarna in nmDMD outside of the U.S.

· Operating expenses for 2016 are currently under review as a result of the Refuse to File letter recently received from the FDA.

Non-GAAP Financial Measures

In this press release, PTC’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. In particular, non-GAAP financial results exclude stock-based compensation expense. These results are provided as a complement to results reported in GAAP because management believes these non-GAAP financial measures are the best indication of the company’s business.

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On February 29, 2016 OPKO Health, Inc. (NYSE:OPK), a multinational biopharmaceutical and diagnostics company, reported financial and operating results for the three months and year ended December 31, 2015 (Filing, Q4, Opko Health, 2015, FEB 29, 2016, View Source [SID:1234509286]).

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Business Highlights

Clinical Utility Study Demonstrates 4Kscore Test Reduces Unnecessary Prostate Biopsies While Improving Risk Prediction for Aggressive Prostate Cancer: The results of a 611 patient peer-reviewed study, "The 4Kscore Test Reduces Prostate Biopsy Rates in Community and Academic Urology Practices", written by Badrinath Konety, MD, et al. (Reviews in Urology, January 2016), indicated that the 4Kscore test led to 65% fewer prostate biopsies being performed among participating patients and influenced approximately 89% of decisions about performing a prostate biopsy. A higher 4Kscore test result was significantly associated with a greater likelihood of having a prostate biopsy.

4Kscore Blood Test to Identify Risk of Aggressive Prostate Cancer Assigned a Level 1 CPT Code: The American Medical Association (AMA) Current Procedural Terminology (CPT) Editorial Panel granted a Category I CPT code which will be effective in January 2017 for OPKO’s 4Kscore Test, the only blood test that accurately identifies an individual patient’s risk for aggressive prostate cancer. A Category I CPT code is a designation reserved for established diagnostic tests, and will provide broader access to the 4Kscore Test to urologists and their patients across the United States.

Rayaldee PDUFA Date Remains on Track for March 29, 2016: In late 2014, OPKO announced successful top-line results from both pivotal Phase 3 trials with Rayaldee. These trials were identical randomized, double-blind, placebo-controlled, multisite studies intended to establish the safety and efficacy of Rayaldee as a new treatment for secondary hyperparathyroidism (SHPT) in patients with stage 3 or 4 chronic kidney disease (CKD) and vitamin D insufficiency.

Topline Phase 3 Results for hGH-CTP in Adults Expected 2H 2016; Pediatric Phase 3 Initiation Anticipated in 2H 2016: The Phase 3 trial in adults is designed to evaluate the safety and efficacy of hGH-CTP with a primary endpoint of superiority compared with placebo in decreasing fat mass in adults with GHD. The trial is a randomized, double-blind, placebo-controlled, multicenter, global study in adults with growth hormone deficiency (GHD). The study is divided into two treatment periods: a 26-week, double blind, placebo-controlled period, followed by a 26-week, open-label extension. A Phase 3 trial in pediatric patients is anticipated to commence in 2H 2016.

First Patient Dosed in Phase 2a Clinical Trial of Long Acting Factor VIIa for the Treatment of Hemophilia: In February 2016, the first patient was dosed in OPKO’s Phase 2a clinical trial of its long acting Factor VIIa, a dose escalation study to determine safety and explore efficacy endpoints of OPKO’s long acting form of coagulation Factor VIIa (Factor VIIa-CTP) for the treatment of bleeding episodes in hemophilia A or B patients with inhibitors to Factor VIII or Factor IX. The study will enroll 24 patients in the United States.

Clinical Studies for Long Acting Oxyntomodulin for Obesity and Diabetes Expected to Begin: OPKO expects to commence studies for its long acting subcutaneous oxyntomodulin for diabetes and obesity in Q1 2016.

VARUBITM (Rolapitant) was Approved by the FDA on September 2, 2015 and Commercial Launch Commenced in November 2015: OPKO’s partner, TESARO received FDA approval of oral VARUBI, a neurokinin-1 (NK-1) receptor antagonist, in combination with other antiemetic agents in adults for the prevention of delayed nausea and vomiting associated with initial and repeat courses of emetogenic chemotherapy. TESARO commenced commercial sales in the U.S. in November 2015 and expects to submit its Marketing Authorization Application to the European Medicines Agency for oral VARUBI in Q2. VARUBI has been included in the NCCN Guidelines as a recommended option in combination with other antiemetic agents for patients receiving both high emetic risk intravenous chemotherapy (HEC) and moderate emetic risk intravenous chemotherapy (MEC). Category 1, the highest level category of evidence and consensus, was granted to VARUBI for both HEC and MEC chemotherapy. OPKO is eligible to receive up to $95 million in additional milestones and tiered, double-digit royalties.

Varubi (Rolapitant) IV Formulation NDA Submission. TESARO expects to submit NDA for IV formulation of Varubi in Q1.

"We made great progress during 2015," stated Phillip Frost, M.D., Chairman and Chief Executive Officer of OPKO. "We have recently begun to expand the marketing and sales of our 4Kscore Test utilizing the commercial infrastructure of Bio-Reference, with very promising results. As we obtain broad reimbursement for the 4Kscore Test, we believe patients, providers and insurers will realize the benefits of this test in 2016 and beyond. We are now preparing for our launch of Rayaldee for treatment of SHPT in patients with stage 3 or 4 CKD later this year. Our commercial partner, TESARO, launched VARUBI late in 2015 and the launch is progressing as expected. Our collaboration with Pfizer is on track and we expect to have topline data for our ongoing Phase 3 clinical trial for hGH-CTP in adults later this year and expect to initiate the pivotal clinical trial for the pediatric indication later this year. We continue to pursue other development programs as well and, earlier this month, initiated a clinical study utilizing our CTP platform technology for our long-acting Factor VIIa project. We expect to begin a Phase 1 clinical trial for long acting oxyntomodulin next month," Dr. Frost continued.

Financial Highlights

Consolidated revenues increased to $276.2 million from $25.5 million for the three months ended December 31, 2015 compared to the 2014 period, and increased to $491.7 million from $91.1 million for the year ended December 31, 2015 as compared to 2014. The 2015 periods include revenue from Bio-Reference and EirGen beginning with their acquisitions in August and May 2015, respectively. Revenue for the three months and year ended December 31, 2015 also includes $17.7 million and $65.5 million, respectively, from OPKO’s collaboration with Pfizer. The 2015 periods also include a $15.0 million milestone payment from TESARO related to the launch of VARUBI in November 2015.

Net income for the three months ended December 31, 2015 was $1.6 million compared with a net loss of $53.0 million for the 2014 period and net losses for the year ended December 31, 2015 decreased to $30.0 million compared to $171.7 million for the 2014 period. In addition to the revenue related items, the 2015 three month and year periods include significant non-recurring and non-cash activities, including:

• $26.5 million and $113.7 million of income tax benefit, respectively, reflecting the release of valuation allowances against all of OPKO’s U.S.-based deferred tax assets as a result of the Bio-Reference acquisition in 2015;
• $15.9 million gain related to the deconsolidation of OPKO’s previously consolidated variable interest entity, SciVac, in the year ended December 31, 2015 as SciVac completed an initial public offering by merger with Levon Resources Ltd. in July 2015;
• $25.9 million of non-recurring operating expense related to the repayment of a grant to the Office of the Chief Scientist in Israel related to the Pfizer transaction in the nine month period of 2015; and,
• Other income and (expense) of ($15.9) million and ($39.5) million primarily related to the change in fair value of derivative instruments as well as a ($7.3) million temporary impairment charge of an available for sale investment in the three months and year ended December 31, 2015, respectively, compared with ($20.9) million and ($25.2) million in the 2014 periods. The change in fair value is principally related to an embedded derivative in our January 2013 convertible senior notes due in 2033.
Cash, cash equivalents and marketable securities were $193.6 million as of December 31, 2015.
• This reflects receipt of Pfizer upfront payments of $295.0 million, partially offset by a $94.7 million cash payment for the acquisition of EirGen (net of EirGen’s cash on hand) and a one-time $25.9 million payment to the Office of the Chief Scientist in Israel related to the Pfizer transaction and cashed used by operations, principally related to our research and development expense.

On February 29, 2016 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported financial results for the fourth quarter and year ended December 31, 2015 (Press release, NanoString Technologies, FEB 29, 2016, View Source [SID:1234509284]).

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Fourth Quarter Financial Highlights

Total revenue of $22.3 million, 43% year-over-year growth
Total product and service revenue of $19.4 million, 36% year-over-year growth
Instrument revenue of $7.9 million, 25% year-over-year growth
Consumables revenue of $10.7 million, including $0.8 million of Prosigna IVD kits, 46% year-over-year growth

Full Year 2015 Financial Highlights

Total revenue of $62.7 million, 32% year-over-year growth
Total product and service revenue of $56.6 million, 27% year-over-year growth
Instrument revenue of $21.0 million, 16% year-over-year growth
Consumables revenue of $33.1 million, including $2.5 million of Prosigna IVD kits, 35% year-over-year growth

"We had a successful year in 2015 achieving virtually all of our strategic objectives, and closing the year with an expanded product line-up, substantially larger addressable markets, increased momentum in diagnostic commercialization, and multiple biopharma collaborations. Simultaneously, our business model delivered another year of strong and consistent revenue growth," said President and Chief Executive Officer, Brad Gray. "In addition, our leadership position in precision oncology has been strengthened by two recent biopharma collaborations that validate our platform and are expected to provide substantial near-term cash flow."

Recent Business Highlights

Grew installed base to over 350 nCounter Analysis Systems at December 31, 2015, with approximately 100 systems sold during the year
Sold 14 nCounter SPRINT Profiler systems in the fourth quarter, bringing total systems sold by year end to 20
Surpassed 1,000 cumulative peer-reviewed publications of studies based on nCounter technology
Expanded collaboration with Merck to develop and commercialize a novel diagnostic test to predict response to KEYTRUDA in multiple tumor types
Entered into collaboration with Medivation and Astellas Pharma to adapt Prosigna for development as a companion diagnostic for XTANDI (enzalutamide) in triple negative breast cancer
Presented the first proof-of-concept data for Hyb & Seq, a highly accurate DNA sequencing chemistry based on the company’s optical barcoding technology, which requires no enzymes, amplification or library prep

Fourth Quarter Financial Results
Revenue for the three months ended December 31, 2015 rose 43% to $22.3 million, from $15.6 million for the fourth quarter of 2014. Instrument revenue was $7.9 million, up 25% over the prior year period, driven by sales of the nCounter SPRINT Profiler. Consumables revenue, excluding Prosigna, was $9.9 million for the fourth quarter of 2015, 38% higher than in the comparable 2014 quarter. Prosigna IVD kit revenue was $0.8 million for the quarter, and collaboration revenue totaled $2.9 million. Gross margin on product and service revenue was 56% for the fourth quarter of 2015, up from 53% for the fourth quarter of 2014.

Research and development expense rose 30% to $7.1 million for the fourth quarter of 2015 versus $5.4 million for the fourth quarter of 2014, reflecting increased investment in products under development for the life science research market, as well as higher costs related to diagnostic development. Selling, general and administrative expense was $14.2 million for the fourth quarter of 2015 compared to $15.0 million for the prior year period, reflecting efficiencies gained through streamlining the sales and marketing organization in the first quarter of 2015.

Net loss for the three months ended December 31, 2015 declined to $8.8 million, or a loss of $0.44 per diluted share, compared with $12.4 million, or a loss of $0.68 per diluted share, for the fourth quarter of 2014.

Full Year 2015 Financial Results

Revenue for 2015 rose 32% to $62.7 million, from $47.6 million for 2014. Instrument revenue was $21.0 million, up 16% from the prior year. Consumables revenue was $30.6 million for 2015, 28% higher than for the prior year. Prosigna IVD kit revenue for 2015 was $2.5 million, and revenue associated with companion diagnostic collaborations was $6.0 million for the year. Gross margin on product and service revenue improved to 54% for 2015.

Research and development expense was $24.6 million for 2015, versus $21.4 million for 2014. Selling, general and administrative expense was $53.2 million for 2015 compared to $51.1 million for the prior year.

Net loss for 2015 was $45.6 million, or a loss of $2.40 per diluted share, compared with $50.0 million, or a loss of $2.80 per diluted share, for 2014.

The company ended 2015 with approximately $49 million of cash, cash equivalents, and short-term investments, before the receipt of any cash from the Medivation/Astellas or Merck transactions.

Outlook for 2016

Total revenue in the range of $86 million to $90 million
Gross margin on product and service revenues in the range of 54% to 55%
Operating expenses in the range of $94 million to $99 million
Operating loss in the range of $40 million to $43 million
Net loss per share in the range of $2.30 to $2.45
Cash from collaborations in 2016 in the range of $40 million to $45 million

On February 29, 2016 MacroGenics, Inc. (NASDAQ: MGNX), a clinical-stage biopharmaceutical company focused on discovering and developing innovative monoclonal antibody-based therapeutics for the treatment of cancer, as well as autoimmune disorders and infectious diseases, today provided a corporate progress update and reported financial results for the year ended December 31, 2015 (Filing, Annual, MacroGenics, 2015, FEB 29, 2016, View Source [SID:1234509283]).

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"I am thrilled with MacroGenics’ progress towards advancing breakthrough biologics and life-changing medicines, and particularly our industry leadership in creating bi-specific molecules," said Scott Koenig, M.D., Ph.D., President and CEO of MacroGenics. "There are now six Dual-Affinity Re-Targeting, or DART, molecules based on our proprietary platform, in or entering clinical development – four led by MacroGenics and two led by our collaborators, Janssen Biotech and Pfizer. In addition, we are actively enrolling patients with metastatic breast cancer in SOPHIA, our Phase 3 study of our Fc-optimized HER2 antibody, margetuximab. During 2015, in addition to updating our Phase 1 margetuximab data at the ASCO (Free ASCO Whitepaper) annual meeting, we also reported encouraging initial results from an ongoing Phase 1 study of enoblituzumab, our Fc-optimized B7-H3 antibody, at the SITC (Free SITC Whitepaper) annual meeting. Finally, given the strength of our cash and investments balance, we continue to be well positioned to advance our proprietary pipeline of immunotherapeutic product candidates."

"For 2016, we have already initiated a Phase 1b/2 study combining margetuximab and pembrolizumab in advanced HER2-positive gastric cancer," added Dr. Koenig. "Later this year, we plan to share additional enoblituzumab clinical data and provide clinical updates on multiple DART molecules being evaluated in Phase 1 studies. We also expect to submit an Investigational New Drug (IND) application for MGA012. Over the next few years, we intend to continue to advance at least one additional IND per year."
Pipeline Update

Margetuximab is an Fc-optimized monoclonal antibody that targets the human epidermal growth factor receptor 2, or HER2. Recent highlights include:

· Phase 1b/2 Gastric Cancer Study: MacroGenics recently dosed the first patient in a Phase 1b/2 clinical trial of margetuximab in combination with pembrolizumab, an anti-PD-1 therapy, in patients with advanced HER2-positive gastric cancer. Treatment options for these patients are limited and our proposed combination regimen would avoid chemotherapy while exploiting the expected enhanced immune-mediated killing properties of both margetuximab and pembrolizumab. We recently elected to expand the scope of this trial to include centers in both Asia and the United States. This study is being conducted in collaboration with Merck.

· SOPHIA Study: The Company’s Phase 3 pivotal study in patients with HER2-positive metastatic breast cancer is ongoing, as the Company continues to initiate sites and enroll patients. This study is evaluating the efficacy of margetuximab plus chemotherapy compared to trastuzumab plus chemotherapy in approximately 530 patients following progression after at least two lines of previous therapy. The Company is targeting completion of this study in 2018.
B7-H3 Franchise. MacroGenics is developing a portfolio of therapeutics that target B7-H3, a member of the B7 family of molecules involved in immune regulation. The Company is advancing multiple programs that target B7-H3 through complementary mechanisms of action and take advantage of this antigen’s broad expression across multiple solid tumor types. Recent highlights of ongoing clinical programs include:

· Enoblituzumab (MGA271): Data from the ongoing monotherapy study of enoblituzumab, an Fc-optimized monoclonal antibody that targets B7-H3, was presented in a late-breaking abstract session at the 2015 Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting in November. Enoblituzumab has been generally well tolerated in patients and has shown encouraging initial single-agent, anti-tumor activity in heavily pre-treated patients, including those with prostate and bladder cancer as well as melanoma. In addition, evidence of T-cell immunomodulatory function has been observed in patients treated with enoblituzumab. The Company has expanded its development program to include two combination studies with either ipilimumab or pembrolizumab.

· MGD009: This DART molecule targeting B7-H3 and CD3 is being evaluated in a Phase 1 study across multiple solid tumor types.
DART Product Candidates. There are currently six DART molecules in or entering Phase 1 clinical development, including MGD006 (CD123 x CD3, also known as S80880), MGD007 (gpA33 x CD3), MGD011 (CD19 x CD3, also known as JNJ-64052781), MGD010 (CD32B x CD79B), MGD009 (B7-H3 x CD3) and PF-06671008 (P-cadherin x CD3). The Company expects to submit IND applications for two additional DART molecules in 2017. These two product candidates are:

· MGD013: MacroGenics is developing an Fc-bearing DART molecule, MGD013, to simultaneously block two immune checkpoint molecules, PD-1 and LAG-3. The Company has presented promising pre-clinical data demonstrating the activity of a DART molecule with these specificities and expects that this bi-specific combination may be useful for treatment of a wide range of solid tumors and hematological malignancies.

· MGD014: In 2015, MacroGenics presented pre-clinical data on MGD014, a DART molecule that is being developed to eliminate latent HIV infection. MGD014 is being developed under a contract awarded to MacroGenics by the National Institute of Allergy and Infectious Diseases for up to $24.5 million. This is the first infectious disease DART program planned for clinical testing.
Beyond MGD013 and MGD014, MacroGenics is generating and evaluating multiple other candidates that target a range of immune regulatory and other molecules using both its DART and Trident platforms, the latter for generating tri-specific molecules.
Corporate Update

· Commercial Preparation: Tom Farrell recently joined MacroGenics as Vice President, Market Development and Strategy and will lead the Company’s effort in preparing for commercialization of its lead product candidates. Tom was most recently at Genentech, a Member of the Roche Group, where he was Global Pricing & Market Access Head (Oncology/Hemophilia), and responsible for leading the development and implementation of global pricing and payer strategies for all oncology (including Perjeta and Kadcyla) and hemophilia molecules from early- through late-stage development.

· Pfizer’s DART Molecule Advances: MacroGenics’ collaboration partner, Pfizer, recently advanced PF-06671008, a DART molecule that targets P-cadherin and CD3, by submitting an IND application that has been cleared by the FDA. Increased levels of the protein P-cadherin have been reported in various tumors, including breast, gastric, endometrial, colorectal and pancreatic cancers, and is correlated with poor survival of patients.
2015 Financial Results and Financial Guidance

· Cash Position: Cash, cash equivalents and investments as of December 31, 2015 were $339.0 million, compared to $157.6 million as of December 31, 2014. In the first quarter of 2015, MacroGenics closed a global collaboration and license agreement for MGD011 with Janssen Biotech, Inc. and received a $50 million upfront license fee. Johnson & Johnson Innovation – JJDC, Inc. also purchased $75 million of newly issued shares of MacroGenics common stock. In July 2015, MacroGenics completed an equity offering that raised net proceeds of $141 million.

· Revenue: Total revenues, consisting primarily of revenue from collaborative agreements, were $100.9 million for the year ended December 31, 2015, compared to $47.8 million for the year ended December 31, 2014. Revenue from collaborative agreements includes the recognition of deferred revenue from payments received in previous periods as well as payments received during the year.

· R&D Expenses: Research and development expenses were $98.3 million for the year ended December 31, 2015, compared to $70.2 million for the year ended December 31, 2014. This increase was due primarily to the initiation of SOPHIA, a margetuximab Phase 3 study, and a Phase 1b/2 study of margetuximab in combination with pembrolizumab, increased activity in our pre-clinical immune checkpoint programs, including MGD013, and the initiation of a Phase 1a study of MGD010.

· G&A Expenses: General and administrative expenses were $22.8 million for the year ended December 31, 2015, compared to $15.9 million for the year ended December 31, 2014. This increase was primarily due to higher labor-related costs, including stock-based compensation expense and information technology-related expenses.

· Net Loss: Net loss was $20.1 million for the year ended December 31, 2015, compared to a net loss of $38.3 million for the year ended December 31, 2014.

· Shares Outstanding: Shares outstanding as of December 31, 2015 were 34,345,754.

· Financial Guidance: MacroGenics expects that its current cash, cash equivalents and investments, combined with anticipated funding under its strategic collaborations, should fund the Company’s operations into 2018.