On August 3, 2022 TransCode Therapeutics, Inc. (Nasdaq: RNAZ) ("TransCode" or the "Company"), the RNA oncology company, and The University of Texas MD Anderson Cancer Center ("MD Anderson"), reported a strategic alliance to advance TransCode’s pipeline of RNA-targeted oncology therapeutic and diagnostic candidates (Press release, TransCode Therapeutics, AUG 3, 2022, View Source [SID1234617396]).

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Through the alliance, TransCode and MD Anderson scientists will collaborate on preclinical studies to further validate TransCode’s therapeutic and diagnostic candidates and to expand the reach of TransCode’s discovery engine. The results of these studies will inform future clinical trials with these agents, including trials to be led at MD Anderson.

"RNA-based therapeutics offer exciting possibilities to treat cancer. We can now examine how regulatory RNAs affect signaling, both spatially and temporally, at the single-cell level in tumor cells, immune cells and stem cells — all critical for tumor progression, relapse and immune evasion," said principal investigator Sendurai Mani, Ph.D., Professor of Translational Molecular Pathology. "Our goals in collaborating with TransCode are to gain a deeper understanding of RNA-targeted therapies and to bring innovative new treatment options to our patients."

The collaboration has the potential to inform multiple clinical programs in TransCode’s pipeline, starting with its lead therapeutic candidate, TTX-MC138, designed to treat multiple metastatic cancers. Future clinical trials will be designed and led by Vivek Subbiah, M.D., Associate Professor of Investigational Cancer Therapeutics at MD Anderson.

"This strategic alliance offers the opportunity to further unlock the potential of our therapeutic pipeline by combining the promise of our image capable delivery platform and discovery engine with the unique talent and resources found at MD Anderson," said Zdravka Medarova, PhD, Co-Founder and CTO of TransCode.

Prior to a Phase I clinical trial, TTX-MC138 is scheduled to enter a first-in-human Phase 0 clinical trial designed to demonstrate delivery of the therapeutic candidate to metastatic lesions in patients with advanced solid tumors.

"We are acutely aware of the expectations that come with a therapeutic approach that has the potential to induce durable regressions of metastatic disease. We are committed to taking every opportunity to fulfill the promise of RNA in cancer," said Michael Dudley, Co-Founder and CEO of TransCode.

On August 3, 2022 Surface Oncology (Nasdaq: SURF), a clinical-stage immuno-oncology company developing next-generation immunotherapies that target the tumor microenvironment, reported financial results and business highlights for the second quarter of 2022 as well as upcoming anticipated corporate milestones (Press release, Surface Oncology, AUG 3, 2022, View Source [SID1234617395]).

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"In the second quarter, we presented encouraging new SRF388 clinical data in an oral presentation at the 2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting," said Rob Ross, M.D., chief executive officer. "SRF388, our first-in-class anti-IL27 antibody, demonstrated activity as both a monotherapy and in combination with other IO agents, bolstering our belief that this agent holds the potential to treat a broad range of tumor types. With cash runway into 2024, we believe we are well positioned to deliver a series of meaningful clinical data updates across our pipeline beginning later this year and through the first half of 2023."

Second Quarter and Subsequent Corporate Highlights

In June, Surface announced the publication of a new study highlighting the role of the IL-27 pathway in hepatocellular carcinoma (HCC). Surface collaborated with Cedars-Sinai Medical Center and Fox Chase Cancer Center to conduct the study which evaluated the role of the IL-27 pathway in the development of HCC. The study was published in the online edition of Cancer Discovery, a journal of the American Association for Cancer Research (AACR) (Free AACR Whitepaper).

In June, Surface presented new SRF388 Phase 1/1b clinical data at the 2022 ASCO (Free ASCO Whitepaper) Annual Meeting. SRF388 demonstrated clinical activity in multiple solid tumor types with three partial responses across non-small-cell lung cancer (NSCLC), renal cell carcinoma (RCC) and HCC. Surface also announced plans to conduct a new expansion study of SRF388 in combination with pembrolizumab in up to 40 patients with relapsed/refractory NSCLC.

In June, Surface announced the appointment of Carsten Brunn, Ph.D., to the board of directors. Dr. Brunn brings more than 25 years of senior leadership experience within multiple biotech and pharmaceutical companies worldwide.

In April, Surface announced the initiation of two Phase 2 clinical studies evaluating SRF388 in multiple tumor types, including a randomized Phase 2 clinical study evaluating SRF388 in combination with atezolizumab and bevacizumab in patients with treatment-naïve HCC and a Phase 2 monotherapy study in patients with previously-treated NSCLC. In addition, the company announced an expansion of the open-label lead-in of the SRF388 randomized Phase 2 study in first-line HCC. The 30-patient lead-in is expected to inform the start of the randomized stage and could elucidate important biomarkers to support enriched patient selection.

At the AACR (Free AACR Whitepaper) Annual Meeting 2022 in April, Surface presented preclinical and translational data supporting the SRF388 recommended Phase 2 monotherapy dose of 10 mg/kg administered intravenously every four weeks.

In April, the company announced that it was recognized by the Boston Business Journal as one of the Best Places to Work for the second year in a row

In Q2, Surface received the anticipated $30 million milestone payment from GlaxoSmithKline for the initiation of the first Phase 1 study for GSK4381562. As part of the licensing agreement, Surface is eligible to receive up to $700 million in potential milestone payments, as well as tiered royalties on global net sales.

The company granted non-qualified stock options to one new employee to purchase 80,000 shares of the company’s common stock with a per share exercise price of $1.64, the closing price on August 1, 2022. The option grant was made under Surface’s 2021 Inducement Plan (the Plan) as an inducement material to the employee entering into employment with the company in accordance with Nasdaq Listing Rule 5635(c)(4) and was granted pursuant to the terms of the Plan.
Selected Anticipated Near-term Corporate Milestones

The company expects to provide a clinical data update on SRF617, a fully human antibody designed to inhibit CD39, in the fourth quarter of 2022.

Surface remains on track to file an Investigational New Drug (IND) application for SRF114, a fully human IgG1 anti-CCR8 antibody, before the end of the year.

Surface anticipates providing multiple SRF388 clinical updates in the first half of 2023, including initial safety and efficacy data from the expanded 30 patient lead-in to the Phase 2 study in first-line HCC.
Financial Results
As of June 30, 2022, cash, cash equivalents and marketable securities were $156.6 million, compared to $154.1 million on December 31, 2021.

General and administrative (G&A) expenses were $6.4 million for both the second quarter ended June 30, 2022, and for the same period in 2021. Decreases in legal and professional fees were partially offset by increased personnel related costs and increased insurance premiums. G&A expenses included $1.3 million in stock-based compensation expense for the second quarter ended June 30, 2022.

Research and development (R&D) expenses were $18.2 million for the second quarter ended June 30, 2022, compared to $12.7 million for the same period in 2021. This increase was primarily driven by progress on our SRF617 and SRF388 Phase 1 and Phase 2 clinical trials. R&D expenses included $0.8 million in stock-based compensation expense for the second quarter ended June 30, 2022.

For the second quarter ended June 30, 2022, net loss was $25.2 million, or basic and diluted net loss per share of $0.46. Net loss was $19.0 million for the same period in 2021, or basic and diluted net loss per share of $0.44.

Surface Oncology continues to project that current cash and cash equivalents are sufficient to fund the company into 2024.

On August 3, 2022 Signify Health, Inc. (NYSE: SGFY), a leading healthcare platform that leverages advanced analytics, technology and nationwide healthcare networks to create and power value-based payment programs, reported the Company’s financial results for the second quarter 2022 (Press release, Signify Health, AUG 3, 2022, View Source [SID1234617394]).

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"Our strong second quarter results reflect the meaningful value we are delivering for our clients and the members we serve through our unique capabilities in closing hard-to-reach gaps in care, engaging people in their homes, and connecting providers with the actionable insights required to be successful in value-based payment models," said Kyle Armbrester, Chief Executive Officer of Signify Health. "We are seeing tremendous demand for our comprehensive evaluations as our health plan clients prioritize member engagement and closing clinical, behavioral, and social care gaps in order to improve health outcomes. In order to meet the needs of our clients, we are focused on driving operational efficiency, expanding our ability to bring connected diagnostic devices into the home, and returning people to care by connecting them with primary care providers, specialists, and care management programs."

Mr. Armbrester continued, "Since our acquisition of Caravan Health in March, our total cost of care enablement business has outperformed our expectations, including strong shared savings performance and adding new clients that are expected to significantly expand the population managed through our platform in 2023. We are also seeing increasing interest from healthcare providers in moving forward with their roadmaps for beginning, or expanding, their participation in total cost of care payment programs in partnership with us, including several clients who quickly transitioned from episodes-focused models to total cost of care programs. We believe this is a clear testament to the value and deep relationships Signify has created with our health system partners, and their confidence in our ability to drive savings for the healthcare system. Overall, Signify has significant momentum heading into the second half of the year as we continue to pursue our mission to accelerate the transformation of the U.S. healthcare system from fee-for-service to value-based care."

Second Quarter 2022 Financial Results

Total revenue for the second quarter grew 16% to $246.2 million, up from $212.8 million in the year-ago period. Growth in the second quarter of 2022 was driven by an 18% increase in Home & Community Services (HCS) segment revenue to $207.6 million and a 3% increase in Episodes of Care Services (ECS) segment revenue to $38.6 million.
HCS revenue was a quarterly record and is attributable to an increase in in-home evaluation (IHE) volume, which grew to approximately 624 thousand in the second quarter from approximately 497 thousand in the year-ago period.
Caravan Health, which was acquired in March 2022, contributed $16.6 million of revenue to the ECS segment in the second quarter.
Second quarter net loss was $490.0 million compared to a net loss of $0.1 million for the year-ago period. Second quarter net loss included a $519.9 million loss on impairment related to the wind down of the ECS segment and $26.9 million of other income related to the remeasurement of the fair value of our Equity Appreciation Rights (EAR) due to a decrease in the Company’s stock price in the second quarter.
Non-GAAP Adjusted EBITDA1 for the second quarter increased 15% to $62.6 million, compared to $54.6 million for the second quarter 2021, driven primarily by HCS revenue growth.
2022 Outlook

The Company is providing full year 2022 estimates as follows:

HCS revenue in the range of $800 million to $810 million;
Caravan Health revenue in the range of $45 million to $48 million for the 10-month period following the acquisition;
Adjusted EBITDA margin for HCS and Caravan Health of 29% to 30%, which is before shared costs that are currently allocated to the company’s ECS segment;
Of the $60 million in annualized shared costs that are currently allocated to the ECS segment, the Company continues to expect to eliminate approximately $30 million to $35 million in annualized expenses by the end of 2022
The Company is not providing guidance for the Episodes business that it is in the process of winding down.
1Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. Refer to the reconciliation in "Non-GAAP Financial Measures." We have not reconciled 2022 guidance for adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, and have not provided forward-looking guidance for net income (loss) because of the uncertainty around certain items that may impact net income (loss), including, among others, the wind down of the Episodes of Care Services business, asset impairments, stock-based compensation and the fair valuation of the EARs, that are not within our control or cannot be reasonably estimated.

Conference Call Information

Signify Health will host a conference call to discuss the Company’s second quarter 2022 results on August 4, 2022 at 8:30am ET. A live audio webcast of the conference call may be accessed through the investor relations section of Signify Health’s website at View Source and will be available for replay for one year.

On August 3, 2022 Seres Therapeutics, Inc. (Nasdaq: MCRB), a leading microbiome therapeutics company, reported second quarter 2022 financial results and provided business updates (Press release, Seres Therapeutics, AUG 3, 2022, View Source [SID1234617393]).

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"We made considerable progress on key clinical, corporate and commercial initiatives that bolster our leadership in the microbiome field," said Eric Shaff, President and Chief Executive Officer at Seres. "We were delighted to report positive confirmatory safety and efficacy data from our SER-109 ECOSPOR IV study in recurrent C. difficile infection, which help complete the FDA’s predefined safety database requirements for investigational product SER-109. These ECOSPOR IV data are consistent with our prior ECOSPOR III study and we expect them to complete the SER-109 Phase 3 development program. These data form the basis for our recently initiated rolling BLA submission, which we expect to complete in the coming weeks. In addition, we continue to advance our commercial readiness activities with our collaborator, Aimmune Therapeutics, Inc., a Nestlé Health Science company, in advance of our expected launch in the first half of 2023. We also recently strengthened our balance sheet with a $100 million registered direct equity offering to further support our efforts to prepare for a successful SER-109 product launch."

Program and Corporate Updates

SER-109 Phase 3 ECOSPOR III study in recurrent C. difficile infection: SER-109, an investigational oral, live microbiome therapeutic, achieved its primary endpoint of superiority to placebo in reducing recurrence in patients with recurrent CDI (rCDI).

In June 2022, Seres reported positive confirmatory results from ECOSPOR IV, an open-label study of SER-109 in patients with rCDI (ClinicalTrials.gov identifier: NCT03183141) designed to expand the SER-109 safety database in support of the ongoing rolling BLA filing. The open-label ECOSPOR IV study evaluated adults with rCDI, providing 24-week data for an additional 263 subjects administered SER-109. In the study, 91.3% of patients in the overall population achieved a sustained clinical response at eight weeks. The results were consistent with the previous ECOSPOR III results and were consistent across key subpopulations, including in individuals with a first recurrence of CDI.

The study enrolled subjects with a clinical profile consistent with those commonly evaluated and treated in clinical practice. The overall safety profile through the 24-week follow-up showed that SER-109 was well tolerated, consistent with the safety profile observed in ECOSPOR III. Similarly low recurrence rates were observed in key subpopulations at eight weeks, including subjects with a first recurrence (6.5%), second recurrence (6.1%) and three or more recurrences (13.8%). Furthermore, the study allowed for initial CDI diagnosis to be made with either toxin or PCR, reflecting the variability across local medical practices; on-study recurrences continued to be confirmed by toxin to ensure study data integrity.

The ECOSPOR IV data were consistent with the prior Phase 3 ECOSPOR III study evaluating SER-109 for the treatment of rCDI. These results, published in the New England Journal of Medicine (NEJM) indicated that SER-109 was superior to placebo in reducing CDI recurrence, with 88% of SER-109 patients achieving a sustained clinical response compared to 60% on placebo at eight weeks. SER-109 was well tolerated in the study, with no drug-related serious adverse events.

The Company recently initiated a rolling BLA submission for SER-109 and expects to complete the filing in the coming weeks.

Seres has an active SER-109 expanded access program at various sites across the U.S. The program is designed to enable eligible adults with rCDI to obtain access to the investigational therapeutic prior to a potential FDA product approval.

The Company continues to prepare for a successful product launch with Aimmune Therapeutics, Inc. The Company believes that a substantial commercial opportunity exists for SER-109. The cost of a patient with CDI has been estimated to result in approximately $34,000 in annual direct healthcare expenses; this does not include the substantial indirect costs associated with this disease. There are approximately 170,000 cases of rCDI annually in the U.S. and CDI results in over 20,000 deaths annually.

Seres continues to execute pre-commercialization activities in collaboration with Aimmune Therapeutics, including market education and data dissemination to the medical community. In addition, activities are ongoing to engage payers in accordance with FDA guidance on pre-approval information exchange. The Company continues to make progress expanding commercial-scale production of SER-109 to prepare for anticipated market demand. An ongoing agreement with Bacthera, a global leader in biopharmaceutical product manufacturing, is designed to increase longer-term SER-109 product supply and adds to existing manufacturing capabilities.

SER-155 Phase 1b clinical study activities: Seres continues to advance a Phase 1b clinical study of SER-155 designed to evaluate safety and microbiome drug pharmacology. The trial will also assess the impact on infections and/or graft versus host disease, or GvHD, associated with SER-155 in adult subjects who are undergoing allogeneic hematopoietic stem cell transplantation (allo-HSCT). SER-155 is an investigational oral, rationally designed, cultivated microbiome therapeutic designed to reduce the incidence of gastrointestinal (GI) infections, bloodstream infections, and GvHD in patients receiving allo-HSCT. In April 2022, the SER-155 Data and Safety Monitoring Committee met as part of a planned data review and approved a recommendation to continue with enrollment in Cohort 1 based on an evaluation of available safety data. The study is being conducted at a number of leading cancer centers across the US.

SER-155 is a consortium of bacterial species selected using Seres’ reverse translation discovery and development platforms. The design incorporates microbiome biomarker data from human clinical data and nonclinical human cell-based assays and in vivo disease models. The SER-155 composition aims to decrease the colonization and translocation of antibiotic-resistant bacteria in the GI tract to decrease the incidence of bloodstream infections and additionally to modulate host immune responses to decrease GvHD. In addition to SER-109, SER-155 represents Seres’ second active clinical development program in its Infection Protection franchise.

Registered direct common stock offering: In July 2022, the Company closed a registered direct equity offering of its common stock resulting in proceeds, net of placement agent fees, of approximately $96.8 million. The Company intends to use the net proceeds from the offering for commercial readiness and manufacture of SER-109 for the U.S. market, including expanding longer-term commercial manufacturing capacity, advancing the clinical development of SER-109 for the EU market, and other general corporate and working capital purposes. The offering included participation by Federated Hermes Kaufmann Funds, Flagship Pioneering, Heights Capital Management, Inc., Janus Henderson Investors, and Nestlé Health Science, as well as other new and existing investors.

2022 Digestive Disease Week (DDW) annual meeting: Seres presented a pre-planned exploratory analysis from the SER-109 ECOSPOR III trial showing that approximately two-thirds of CDI recurrences occurred within the first two weeks following antibiotic treatment for CDI – the window of vulnerability – when the microbiome is further decimated and C. difficile spores, untouched by antibiotics, are free to germinate into toxin-producing vegetative bacteria. These findings suggest that the first two weeks following antibiotic treatment may be the optimal time when microbiome therapeutics may have the greatest potential benefit, to restructure bacterial diversity and disrupt the cycle of recurrent C. difficile.

The Company also presented data from stool samples collected from ECOSPOR III participants that were analyzed for changes in their microbial makeup and fatty acid concentrations across the eight weeks following SER-109 treatment. For participants who received SER-109, butyrate, valerate and hexanoate levels rapidly increased, starting within the two-week window of vulnerability, and remained significantly higher than the placebo group for the eight-week data analysis period. Fatty acids with long and medium carbon chain lengths, such as butyrate, valerate and hexanoate, have been shown to inhibit the growth of C. difficile.

2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting: The Company presented data detailing the design of the Phase 1b trial evaluating the efficacy, safety and pharmacokinetics of SER-155 in adults undergoing allo-HSCT. In addition, Seres presented preclinical data supporting further investigation of microbiome therapeutics to prevent or treat GI mucositis – a common and often painful complication of radiation and chemotherapy involving the breakdown of the rapidly-dividing epithelial cells lining the GI tract.

Infection Protection research: The Company continues to conduct research to bring forward new clinical candidates related to using microbiome therapeutics as a novel approach for Infection Protection for medically compromised individuals, including those with cancer neutropenia, cirrhosis, or solid organ transplant. Preclinical studies are evaluating the potential to reduce the abundance of targeted pathogens to decrease the potential for pathogen transmission, strengthen epithelial barriers to further reduce the frequency of bloodstream infections and to modulate immune responses to tackle medical complications such as graft versus host disease. The Company anticipates advancing an additional Infection Protection therapeutic candidate into clinical development in 2023.

Ulcerative colitis (UC) research: The Company previously reported clinical, microbiome and metabolomic data from the SER-287 Phase 2b study and the first cohort of its SER-301 Phase 1b study. Available data for these investigational microbiome therapeutics suggest that there may be an opportunity to utilize biomarker-based patient selection and stratification for future studies. Research activities remain ongoing to inform potential further development activities.

Financial Results

Seres reported a net loss of $64.7 million for the second quarter of 2022, as compared with a net loss of $48.3 million for the same period in 2021.

Research and development expenses for the second quarter of 2022 were $43.9 million, compared with $36.0 million for the same period in 2021. The research and development expenses were primarily related to Seres’ late-stage SER-109 clinical development program and manufacturing costs, as well as personnel expenses.

General and administrative expenses for the second quarter of 2022 were $20.3 million, compared with $17.5 million for the same period in 2021. General and administrative expenses were primarily related to personnel expenses, professional fees, including SER-109 commercial readiness and pre-launch expenses, and facility costs.

Seres ended the second quarter of 2022 with approximately $195.8 million in cash, cash equivalents and investments. Subsequent to the end of the quarter, in July 2022, the Company closed a $100 million registered direct offering of its common stock, resulting in proceeds, net of placement agent and other fees, of approximately $96.8 million. As a result, the June 30, 2022, pro-forma cash balance, inclusive of the registered direct offering net proceeds, was approximately $291.4 million.

Conference Call Information

Seres’ management will host a conference call today, August 3, 2022, at 8:30 a.m. ET. To access the conference call, please dial 800-715-9871 (domestic) or 646-307-1963 (international) and reference Conference ID 3171491. To join the live webcast, please visit the "Investors and News" section of the Seres website at www.serestherapeutics.com.

A webcast replay will be available on the Seres website beginning approximately two hours after the event and will be archived for at least 21 days.

On August 3, 2022 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported that financial results for the second quarter of 2022 and provided a business update (Press release, Regeneron, AUG 3, 2022, View Source [SID1234617391]).

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"The second quarter of 2022 was distinguished by record net product sales of EYLEA, Dupixent, and Libtayo, as well as multiple regulatory achievements for Dupixent, including U.S. approvals for atopic dermatitis among very young patients and for eosinophilic esophagitis in adults and adolescents, as well as European approval for pediatric asthma," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "In addition, we have continued to strengthen our oncology franchise, including through the purchase of worldwide rights to Libtayo as well as encouraging but preliminary anti-tumor activity observed at higher doses of our novel PSMAxCD28 costimulatory bispecific in combination with Libtayo for advanced metastatic castration-resistant prostate cancer."

Financial Highlights

"We are pleased with our second quarter 2022 financial performance, including 20% revenue growth when excluding contributions from REGEN-COV. This demonstrates the continued strength of our core business," said Robert E. Landry, Executive Vice President, Finance and Chief Financial Officer of Regeneron. "Additionally, we updated our full-year 2022 financial guidance primarily to reflect the recently completed acquisition of Libtayo global rights from Sanofi, a transaction that we believe will deliver significant shareholder value over time. In the second half of 2022, we look forward to advancing our pipeline with important clinical data readouts in oncology and ophthalmology as well as continued commercial execution and prudent capital allocation to drive value creation for shareholders."

Business Highlights

Key Pipeline Progress
Regeneron has approximately 35 product candidates in clinical development, including a number of marketed products for which it is investigating additional indications. Updates from the clinical pipeline include:

Dupixent (dupilumab)

In June 2022, the U.S. Food and Drug Administration (FDA) approved Dupixent as the first biologic medicine for children aged 6 months to 5 years with moderate-to-severe atopic dermatitis.
In May 2022, the FDA approved Dupixent for adults and adolescents aged 12 years and older with eosinophilic esophagitis (EoE).
In April 2022, the European Commission (EC) approved Dupixent for the treatment of severe asthma in children aged 6 to 11 years.
The Company and Sanofi announced positive results from a Phase 3 trial in children aged 1 to 11 years with EoE. The trial met its primary endpoint of histological disease remission at 16 weeks with both higher and lower dose weight-tiered regimens.
The FDA accepted for priority review the supplemental Biologics License Application (sBLA) for Dupixent for adults with prurigo nodularis, with a target action date of September 30, 2022. Regulatory applications have also been submitted in the European Union (EU) and Japan.
EYLEA (aflibercept) Injection

The FDA accepted for review the sBLA for EYLEA for an every-16-weeks dosing regimen in patients with diabetic retinopathy (DR), with a target action date of February 28, 2023.
REGN5678, a PSMAxCD28 costimulatory bispecific antibody

Reported preliminary, first-in-human data in combination with Libtayo in patients with advanced metastatic castration-resistant prostate cancer.
Antibodies to SARS-CoV-2 virus

The Company is continuing to progress investigational "next generation" antibodies that are active against multiple variants including those of Omicron-lineage.
REGN5381, an agonist antibody to NPR1

A Phase 2 study in heart failure was initiated.
Corporate and Business Development Updates

In May 2022, the Company completed its acquisition of Checkmate Pharmaceuticals, Inc. for a total equity value of approximately $250 million. In connection with the acquisition, the Company obtained the rights to vidutolimod (immune activator targeting TLR9), which is in clinical development for oncology.
Effective July 1, 2022, the Company obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide under an Amended and Restated Immuno-oncology License and Collaboration Agreement with Sanofi. Under the terms of the agreement, the Company made a $900 million up-front payment, and Sanofi is eligible to receive a $100 million regulatory milestone and up to an aggregate of $100 million in sales-based milestones upon achieving certain amounts of worldwide net product sales of Libtayo through 2023. The Company will also pay Sanofi a royalty on net product sales of Libtayo.
Also effective July 1, 2022, the Company will increase from 10% to 20% the share of its profits that are paid to Sanofi in connection with the development balance reimbursement under the antibody collaboration.
Second Quarter 2022 Financial Results

* Percentage not meaningful

** Effective July 1, 2022, the Company will record global net product sales of Libtayo.

Total revenues decreased by 44% to $2.857 billion in the second quarter of 2022, compared to $5.139 billion in the second quarter of 2021. Total revenues excluding REGEN-COV and Ronapreve(b) revenues for both periods increased by 20% to $2.849 billion in the second quarter of 2022, compared to the second quarter of 2021(a). There have been no sales of REGEN-COV in the United States during 2022 as the Company had completed its final deliveries of drug product under its agreements with the U.S. government as of December 31, 2021.

Sanofi collaboration revenue increased by 55% to $678 million in the second quarter of 2022, compared to the second quarter of 2021. This increase was primarily due to the Company’s share of profits from commercialization of antibodies, which were $497 million in the second quarter of 2022, compared to $328 million in the second quarter of 2021. The change in the Company’s share of profits from commercialization of antibodies was driven by higher Dupixent profits. Roche collaboration revenue decreased in the second quarter of 2022, compared to the second quarter of 2021, due to lower sales of Ronapreve.

* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been recorded.

** Beginning with the first quarter of 2022, the Company added this new line item to its Statements of Operations, which includes IPR&D acquired in connection with asset acquisitions as well as up-front/opt-in payments related to license and collaboration agreements. Amounts recorded in this line would have historically been recorded to R&D. This change does not affect previously reported non-GAAP results for the three and six months ended June 30, 2021 as the Company recorded no such charges during either of these periods.

GAAP and non-GAAP R&D expenses increased in the second quarter of 2022, compared to the second quarter of 2021, primarily due to higher headcount and headcount-related costs and an increase in clinical manufacturing activities, partly offset by lower costs incurred in connection with REGEN-COV development activities.
Acquired IPR&D in the second quarter of 2022 included a $195 million charge related to the Company’s acquisition of Checkmate Pharmaceuticals.
The increase in GAAP and non-GAAP SG&A expenses in the second quarter of 2022, compared to the second quarter of 2021, was primarily due to higher headcount and headcount-related costs and an increase in commercialization-related expenses for EYLEA, partly offset by costs in 2021 for educational campaigns related to COVID-19 that did not recur in 2022.
GAAP and non-GAAP COGS decreased in the second quarter of 2022, compared to the second quarter of 2021, primarily due to the Company not recognizing any REGEN-COV net product sales in the United States during 2022.
Other Financial Information

GAAP other income (expense) included the recognition of net unrealized losses on equity securities of $164 million in the second quarter of 2022, compared to $409 million of net unrealized gains in the second quarter of 2021.

In the second quarter of 2022, the Company’s GAAP effective tax rate (ETR) was 11.5%, compared to 17.4% in the second quarter of 2021. The decrease in the GAAP ETR was primarily driven by the proportion of income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate, the impact of income earned in the United States during 2021 related to REGEN-COV, and, to a lesser extent, stock-based compensation. In the second quarter of 2022, the non-GAAP ETR was 13.6%, compared to 17.0% in the second quarter of 2021.

GAAP net income per diluted share was $7.47 in the second quarter of 2022, compared to $27.97 in the second quarter of 2021. Non-GAAP net income per diluted share was $9.77 in the second quarter of 2022, compared to $25.80 in the second quarter of 2021. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

During the second quarter of 2022, the Company repurchased shares of common stock under its share repurchase program, and recorded the cost of the shares received, or $394 million, as Treasury Stock. As of June 30, 2022, $2.099 billion remained available for share repurchases under the program.

2022 Financial Guidance(d)

The Company’s full year 2022 financial guidance consists of the following components (inclusive of updates made in connection with the Company’s purchase of Sanofi’s stake in Libtayo and acquisition of Checkmate Pharmaceuticals):

* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been or are expected to be recorded.

** ETR guidance excludes the impact of the provision requiring capitalization and amortization of R&D expenses enacted as part of the Tax Cuts and Job Act (TCJA), as management’s current expectation is it will be deferred or repealed by Congress in 2022. If this provision of the TCJA is not deferred or repealed, the Company would expect its ETR to be lower than the guidance disclosed herein.

A reconciliation of full year 2022 GAAP to non-GAAP financial guidance is included below:

This press release uses non-GAAP R&D, non-GAAP SG&A, non-GAAP COGS, non-GAAP gross margin on net product sales, non-GAAP other income (expense), net, non-GAAP ETR, non-GAAP net income, non-GAAP net income per share, total revenues excluding REGEN-COV and Ronapreve, and free cash flow, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are computed by excluding certain non-cash and/or other items from the related GAAP financial measure. The Company also includes a non-GAAP adjustment for the estimated income tax effect of reconciling items. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate from period to period based on factors that are not within the Company’s control (such as the Company’s stock price on the dates share-based grants are issued or changes in the fair value of the Company’s investments in equity securities) or items that are not associated with normal, recurring operations (such as restructuring- or integration-related expenses). Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. With respect to free cash flows, the Company believes that this non-GAAP measure provides a further measure of the Company’s operations’ ability to generate cash flows. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company’s core business operations. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company’s non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP.

The casirivimab and imdevimab antibody cocktail is known as REGEN-COV in the United States and Ronapreve in other countries. The Company records net product sales of REGEN-COV in the United States and Roche records net product sales of Ronapreve outside the United States.

The Company’s collaborators provide it with estimates of the collaborators’ respective sales and the Company’s share of the profits or losses (if applicable) from commercialization of products for the most recent fiscal quarter. These estimates are revised, if necessary, in subsequent periods if the Company’s actual share of the profits or losses differ from those estimates.

The Company’s 2022 financial guidance does not assume the completion of any significant business development transactions not completed as of the date of this press release.

Gross margin on net product sales represents gross profit expressed as a percentage of total net product sales recorded by the Company. Gross profit is calculated as net product sales less cost of goods sold.

Corresponding reimbursements from collaborators and others for manufacturing of commercial supplies is recorded within revenues.

Conference Call Information

Regeneron will host a conference call and simultaneous webcast to discuss its second quarter 2022 financial and operating results on Wednesday, August 3, 2022, at 8:30 AM Eastern Time. Participants may access the conference call live via webcast, or register in advance and participate via telephone, on the "Investors and Media" page of Regeneron’s website at View Source Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A replay of the conference call and webcast will be archived on the Company’s website for at least 30 days.