On May 7, 2020 Magenta Therapeutics (Nasdaq: MGTA), a clinical-stage biotechnology company developing novel medicines to bring the curative power of immune reset to more patients, reported recent business highlights and financial results for the first quarter ended March 31, 2020 (Press release, Magenta Therapeutics, MAY 7, 2020, View Source [SID1234557315]).

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"The first quarter of 2020 has shown Magenta to be well-positioned to advance our programs and to weather unexpected obstacles. Magenta continues to execute and progress our pipeline, and we remain committed wholeheartedly to our patients, their families, our employees and our business partners," said Jason Gardner, D.Phil., President and Chief Executive Officer, Magenta. "In this first quarter, Magenta has showcased significant clinical and preclinical results, and we are building on these results to advance quickly."

Recent Business Highlights:

MGTA-117 lead clinical candidate for conditioning for stem cell transplant and gene therapy demonstrates broad therapeutic index; advancing MGTA-117 to deliver initial clinical data in 2021. Data presented at the Transplant and Cellular Therapies (TCT) conference in February 2020 demonstrated that MGTA-117’s optimized linker payload resulted in potent depletion of stem and progenitor cells with an improved therapeutic index of 30 (range for approved ADCs at this stage of development has been two- to six- fold). The ADC is advancing in GMP manufacture. Magenta will also present data in an oral presentation at the upcoming American Society of Gene & Cell Therapy (ASGCT) (Free ASGCT Whitepaper) annual conference, to be held May 12-15, demonstrating that a single dose of CD117-ADC enables hematopoietic stem cell (HSC)-based gene therapy in non-human primates.

The Company is scaling up manufacturing of MGTA-117 and expects to complete investigational new drug (IND)-enabling studies in 2020. This program is on track to complete GLP toxicology studies and progress GMP manufacturing in 2020, as well as to deliver initial clinical data in 2021.

Announced research and clinical collaboration agreement with AVROBIO to evaluate potential utility of MGTA-117 targeted ADC for conditioning patients with one or more AVROBIO lentiviral gene therapies. The collaboration will combine Magenta’s leadership in ADC-based conditioning with AVROBIO’s expertise in lentiviral gene therapies and will further the two companies’ shared mission to allow patients to live free from disease. Under the collaboration, Magenta and AVROBIO will jointly evaluate MGTA-117 in conjunction with one or more of AVROBIO’s investigational gene therapies. Magenta will retain all commercial rights to MGTA-117. AVROBIO will retain all commercial rights to its gene therapies and will be responsible for the clinical trial costs related to the evaluation of MGTA-117 with AVROBIO’s gene therapies.

The Phase 1 trial of MGTA-145, Magenta’s first-line stem cell mobilization therapy, met all primary and secondary endpoints, demonstrating rapid, same-day first line stem cell mobilization and collection in healthy volunteers, and enrollment in the renal pharmacokinetic study is complete. At TCT in February, Magenta presented data showing MGTA-145 was safe and well tolerated as a single agent and in combination with plerixafor and demonstrated rapid, same-day mobilization and collection of sufficient numbers of stem cells to enable a successful transplant.

Based on the results of the Phase 1 study, Magenta intends to initiate multiple Phase 2 trials of MGTA-145 which may be staggered over the course of this year due to clinical trial impacts from COVID-19. The Phase 2 trials will include both allogeneic and autologous transplant settings and will evaluate mobilization and collection of functional cells and engraftment of the cells after transplant to rebuild the immune system. There is potential for the Company to present initial Phase 2 data on MGTA-145 in 2020.

At the upcoming ASGCT (Free ASGCT Whitepaper) conference, Magenta will present two sets of preclinical data on MGTA-145. In one study, MGTA-145 plus plerixafor was shown to be a rapid, reliable, efficient and G-CSF-free method to obtain high numbers of HSCs, including HSCs that were gene-modified with robust and durable engraftment, which could be used to improve HSC collection and autologous gene therapy outcomes for a variety of therapeutic indications. In a separate preclinical study, MGTA-145 plus plerixafor was shown to serve as an efficient same-day mobilization regimen for in vivo gene therapy of HSCs, which could be applicable in patients with sickle cell disease and other genetic disorders.

IND-enabling work on CD45-ADC for immune system reset will progress in 2020, with lead antibody identified. Magenta is developing targeted ADCs designed to precisely remove the disease-causing cells in the body without the need for chemotherapy or radiation. Magenta’s CD45-ADC program targets CD45, a protein expressed on immune cells and stem cells and is designed to remove the cells that cause autoimmune diseases in order to enable curative immune reset.

Enrollment timelines for the MGTA-456 Phase 2 trial in inherited metabolic disorders have been shifted into 2021, due to COVID-19-related impacts. The trial remains open with seven of 12 patients enrolled and continued longer term follow-up on these patients will be conducted. Sixteen patients have been enrolled in the Phase 2 trial of MGTA-456 in patients with blood cancers at the University of Minnesota, and this trial is currently expected to complete enrollment in 2020.

Expanded senior leadership team. In February 2020, Magenta announced it had expanded its senior leadership with two new strategic hires, Kristen Stants as Chief People Officer, and Li Malmberg, Ph.D., as Senior Vice President, Head of Manufacturing. In April 2020, Magenta announced the promotion of John Davis Jr., M.D., M.P.H., M.S. to Head of Research and Development and Chief Medical Officer.

COVID-19-related operational changes. Magenta has taken important steps to help ensure the safety of employees and their families and to reduce the spread of COVID-19 in the Cambridge community. In early March, Magenta created an internal, cross-functional COVID-19 response team, focused on employee safety and business continuity, to monitor closely the evolving situation and advise on the Company’s response. Magenta has established a work-from-home policy for all employees, other than those performing or supporting business-critical laboratory-based experiments, such as certain members of the Company’s laboratory and facilities staff. For those employees, Magenta has implemented stringent safety measures designed to comply with applicable federal, state and local guidelines instituted in response to the COVID-19 pandemic. Magenta has also maintained frequent communication with its partners and clinical sites as the COVID-19 situation has progressed.

Financial Results:

Cash Position: Cash, cash equivalents and marketable securities as of March 31, 2020, were $130.4 million, compared to $145.7 million on December 31, 2019. Magenta anticipates that its cash, cash equivalents and marketable securities will be sufficient to fund operations and capital expenditures into the first quarter of 2022.

Research and Development Expenses: Research and development expenses were $14.0 million in the first quarter of 2020, compared to $10.5 million in the first quarter of 2019. The increase was driven primarily by investments in manufacturing related to our conditioning programs and MGTA-456, increases in personnel to support the Company’s operations as a clinical-stage company and certain clinical activities for MGTA-145.

General and Administrative Expenses: General and administrative expenses were $7.3 million for the first quarter of 2020, compared to $5.8 million for the first quarter of 2019. The increase was primarily due to an increase in personnel and facilities associated with the growth of the Company, in addition to consulting work related to pre-commercialization activities.

Net Loss: Net loss was $20.0 million for the first quarter of 2020, compared to net loss of $14.8 million for the first quarter of 2019.

Conference Call Details:

To access the call, please reference the dial-in details below. In addition, a live webcast will be available, and a playback of the call will be available on the Magenta Therapeutics website at View Source for 90 days following the call.

On May 7, 2020 Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE), a clinical-stage biotechnology company developing a new generation of human enzyme therapeutics as innovative solutions for rare and other high-burden diseases, reported its first quarter 2020 financial results, and provided recent corporate and program highlights (Press release, Aeglea BioTherapeutics, MAY 7, 2020, View Source [SID1234557331]).

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"These past few months have brought unique challenges as we navigate the impact of COVID-19, and reminds us all of the critical need for healthcare innovation and new medicines. These needs are all too familiar for people with rare diseases, like Arginase 1 Deficiency, where adequate treatment options are often not available," said Anthony Quinn, M.B Ch.B, Ph.D., president and chief executive officer of Aeglea. "With our recently completed financing, we have the resources to advance our pegzilarginase program for Arginase 1 Deficiency through regulatory submission and potential FDA approval. With the recent approval of our Clinical Trial Application for ACN00177 for the treatment of Homocystinuria, the company is positioned to bring forward its second clinical-stage human enzyme – both with the potential to be transformative solutions for rare genetic disorders."

Recent Highlights & COVID-19 Update

Pegzilarginase in Arginase 1 Deficiency

Aeglea is working with treating physicians to implement individual treatment plans and potentially developing a home healthcare option for patients enrolled in the Phase 3 PEACE trial.
To date, most enrolled patients have continued to receive treatment. The Company is developing a plan to analyze results for patients that are missing data points. The Phase 3 PEACE trial protocol is designed in such a way that a patient may miss a few doses without being disqualified from the trial.
The supply chain has not experienced any significant impact at this time and the Company currently has sufficient supply available for completion of its ongoing clinical trials.
The Company expects to complete enrollment of its Phase 3 PEACE trial in the third quarter of 2020 and to provide topline data in the first quarter of 2021.
ACN00177 in Homocystinuria

In April, Aeglea announced the approval of its Clinical Trial Application (CTA) by the United Kingdom’s Medicines and Healthcare Products Regulatory Agency (MHRA) for ACN00177, a novel engineered human enzyme therapy designed to treat Homocystinuria, a serious metabolic disorder characterized by elevated plasma homocysteine which leads to a wide range of life-altering complications and reduced life expectancy.
The Company continues its patient identification and administrative activities to quickly move forward with dosing patients once trial sites are able to initiate clinical trials.
While Aeglea continues to prepare to initiate a Phase 1/2 trial for ACN00177 in the second quarter of 2020, the timing will depend on determination by individual sites that each is ready to open for recruitment in light of COVID-19; the Company’s priorities at this time are to avoid further overburdening hospital staff and to minimize the risk of trial participants exposure to COVID-19.
Corporate Highlights

In April, the Company strengthened its financial position with a public offering resulting in gross proceeds of $138 million, which extended its cash runway through 2022.
The Company implemented policies and practices to protect the health and wellbeing of the Company’s employees and communities, including asking employees to work from home and implementing a work rotation for essential lab employees.
Aeglea suspended all business travel and transitioned all meetings, including conference attendance and industry events, to virtual meetings.
First Quarter 2020 Financial Results

As of March 31, 2020, Aeglea had available cash, cash equivalents, marketable securities and restricted cash of $50.5 million. In addition, in April 2020 the Company raised approximately $129.6 million in net proceeds from a public offering. Based on Aeglea’s current operating plan, and taking into account the net offering proceeds, management believes it has sufficient capital resources to fund anticipated operations through 2022.

Research and development expenses totaled $14.6 million for the first quarter of 2020 and $14.4 million for the first quarter of 2019. The increase was primarily associated with investing in manufacturing and pre-commercial activities for Aeglea’s lead product candidate, pegzilarginase; ramp-up in toxicology, nonclinical studies, and manufacturing activities for ACN00177 in Homocystinuria; and personnel-related expenses. The increase was offset by a decrease in clinical development expenses as a result of completing a Phase 1/2 clinical trial in patients with Arginase 1 Deficiency, a Phase 1 clinical trial in patients with advanced solid tumors, and concluding enrollment of a Phase 1/2 combination trial in patients with small cell lung cancer.

General and administrative expenses totaled $4.5 million for the first quarter of 2020 and $3.3 million for the first quarter of 2019. This increase was primarily due to additional employee headcount, ramping up commercial capabilities, and additional facilities to support company growth.

Net loss totaled $18.7 million and $17.2 million for the first quarter of 2020 and 2019, respectively, with non-cash stock compensation expense of $1.3 million and $1.1 million for the first quarter of 2020 and 2019, respectively.

About Pegzilarginase in Arginase 1 Deficiency

Pegzilarginase is an enhanced human arginase that enzymatically lowers levels of the amino acid arginine. Aeglea is developing pegzilarginase for the treatment of patients with Arginase 1 Deficiency (ARG1-D), a rare debilitating disease presenting in childhood with persistent hyperargininemia, severe progressive neurological abnormalities and early mortality. Pegzilarginase is intended for use as an enzyme therapy to reduce elevated blood arginine levels in patients with ARG1-D. Aeglea’s Phase 1/2 and Phase 2 open-label extension data for pegzilarginase in patients with ARG1-D demonstrated clinical improvements and sustained lowering of plasma arginine. The Company’s single, global pivotal Phase 3 PEACE trial is designed to assess the effects of treatment with pegzilarginase versus placebo over 24 weeks with a primary endpoint of plasma arginine reduction.

About ACN00177 in Homocystinuria

Aeglea is developing ACN00177 for the treatment of patients with cystathionine beta synthase (CBS) deficiency, also known as Classical Homocystinuria. Homocysteine accumulation plays a key role in multiple progressive and serious disease-related complications, including thromboembolic vascular events, skeletal abnormalities including severe osteoporosis, developmental delay, intellectual disability, lens dislocation and severe near-sightedness. ACN00177 has been designed as a novel recombinant human enzyme, which degrades the amino acid homocysteine and its related homocystine dimer. With this mechanism, ACN00177 is intended to lower the abnormally high blood levels of homocysteine in patients with Homocystinuria. Preclinical data demonstrated that ACN00177 improved important disease-related abnormalities and survival in a mouse model of Homocystinuria. The Company received approval from the United Kingdom’s Medicines and Healthcare Products Regulatory Agency (MHRA) for its Clinical Trial Application (CTA) and continues to prepare to initiate a Phase 1/2 trial in the second quarter of 2020.

On May 7, 2020 UroGen Pharma Ltd. (Nasdaq: URGN), a biopharmaceutical company dedicated to building and commercializing novel solutions that treat specialty cancers and urologic diseases, reported financial results for the first quarter ended March 31, 2020 and provided an overview of the Company’s recent developments (Press release, X4 Pharmaceuticals, MAY 7, 2020, View Source [SID1234557357]).

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"The first quarter of 2020 was marked by flawless execution by our team as we prepared for the landmark FDA approval of Jelmyto, the first and only non-surgical treatment for patients with low-grade upper tract urothelial cancer. It has been our mission to pioneer novel treatments for patients in areas of unmet need, and our team has developed innovative solutions to engage key stakeholders so we can bring this effective, kidney-sparing therapy to patients who have been waiting for new treatment options," said Liz Barrett, President and Chief Executive Officer of UroGen. "Our momentum continues as we advance our portfolio of product candidates, highlighted by our recent UGN-102 data readout for the treatment of patients with low-grade intermediate-risk non-muscle invasive bladder cancer, a disease associated with high rates of recurrence and the need for repetitive surgical intervention. The recently published positive interim UGN-102 data, combined with pivotal data for Jelmyto, further supports our confidence in the broad potential of our pipeline. We remain on track to initiate a pivotal Phase 3 study later this year."

Recent Highlights and Upcoming Milestones

Jelmyto (mitomycin) for pyelocalyceal solution, formerly known as UGN-101, for adult patients with low-grade upper tract urothelial cancer (LG-UTUC)

UroGen announced the U.S. FDA granted approval of Jelmyto for the treatment of patients with LG-UTUC on April 15, 2020. Jelmyto is the first and only FDA approved non-surgical treatment option for patients with LG-UTUC.
The most commonly reported adverse events (≥ 20%) were ureteric obstruction, flank pain, urinary tract infection, hematuria, renal dysfunction, fatigue, nausea, abdominal pain, dysuria, and vomiting. No treatment-related deaths occurred.
The Lancet Oncology published pivotal results from the Phase 3 OLYMPUS trial, reporting that 59% of LG-UTUC patients treated with Jelmyto achieved a Complete Response (CR). Durability at 12-months (based on interim data) was estimated to be 84% by Kaplan-Meier analysis.
At the 12-month time point for assessment of durability, 19 patients remained in CR, seven had experienced recurrence of disease, nine patients continued to be followed for the 12-month duration of response, and median duration of response was not reached as of the FDA-approval date.
Jelmyto Commercial Readiness

The Company expects to commence the official commercial launch of Jelmyto on June 1, 2020.
To maximize engagement with health care professionals and key stakeholders in this current environment, the Company has developed innovative solutions, including a virtual platform, to allow for an effective launch.
The team has completed the application for submission of the C-code, and submission of the J-code application to CMS is in process. The company continues to expect a C-code will be secured by October and a J-code by the end of the year.
UGN-102 (mitomycin) for intravesical solution for patients with low-grade intermediate risk non-muscle invasive bladder cancer (LG-IR-NMIBC)

UroGen announced a positive interim data analysis of UGN-102 in patients with LG-IR-NMIBC, featured in a late-breaking abstract published in the April Supplement to The Journal of Urology.
The Phase 2b OPTIMA II trial demonstrated a CR rate at three months following onset of treatment of 65% (41/63 patients). In this subset of patients, 31/32 patients (97%) and 17/20 patients (85%) remained free of disease at six- and nine-months follow-up, respectively.
The most commonly reported adverse events seen to date (≥ 10%) were reported as mild to moderate and include dysuria, hematuria, urinary frequency, fatigue, urgency and urinary tract infection.
The detailed results presentation from the Phase 2b OPTIMA II trial will be available online via the American Urological Association (AUA) in mid-May 2020.
The Company remains on track to initiate a pivotal Phase 3 trial in 2H 2020.
There are no drugs currently approved by the FDA as first-line treatment for LG-IR-NMIBC. UGN-102 has the potential to provide a non-surgical treatment alternative for approximately 80,000 patients diagnosed with LG-IR-NMIBC in the United States alone.
First Quarter 2020 Financial Results; 2020 Guidance

As of March 31, 2020, cash, cash equivalents and marketable securities totaled $159.2 million, excluding restricted cash.
Research and development expenses for the three months ended March 31, 2020 were $16.6 million, including non-cash share-based compensation expense of $1.9 million, and a one-time payment of $6.6 million to unwind our obligation to the IIA.
Selling, general and administrative expenses for the three months ended March 31, 2020 were $22.0 million, including non-cash share-based compensation expense of $5.7 million.
UroGen reported a net loss of $37.8 million, or basic and diluted net loss per ordinary share of $1.79, for the three months ended March 31, 2020.
The 2020 financial guidance set forth during the Company’s full year and fourth quarter 2019 quarterly call on March 2, 2020 remains the same based on current business goals and anticipated activities.
Conference Call & Webcast Information

Members of UroGen’s management team will host a live conference call and webcast today at 8:30 AM Eastern Time to review the Company’s financial results and provide a general business update.

The live webcast can be accessed by visiting the Investors section of the Company’s website at View Source Please connect at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. Alternatively, please call (855) 765-5685 (U.S.) or (615) 247-5916 (International) to listen to the live conference call. The conference ID number for the live call will be 4575088. An archive of the webcast will be available for two weeks on the Company’s website.

About the Phase 3 OLYMPUS Trial

OLYMPUS (Optimized DeLivery of Mitomycin for Primary UTUC Study) is an open-label, single-arm Phase 3 clinical trial of UGN-101, Jelmyto (mitomycin) for pyelocalyceal solution, to evaluate the safety, tolerability and tumor ablative effect of Jelmyto in patients with low-grade UTUC. Seventy-one patients were treated at clinical sites across the United States and Israel. Study participants were treated with six weekly instillations of Jelmyto administered via a standard catheter. Four to six weeks following the last instillation, patients underwent a Primary Disease Evaluation (PDE) to determine Complete Response (CR), the primary endpoint of the study. PDE involved a ureteroscopy and wash cytology, a standard microscopic test of cells obtained from the urine to detect cancer and for cause biopsy. Patients who achieved a CR at the PDE timepoint were then followed for up to 12 months to determine the durability of response with Jelmyto.

About JelmytoTM

Jelmyto (mitomycin) for pyelocalyceal solution, is a drug formulation of mitomycin indicated for the treatment of adult patients with low-grade upper tract urothelial cancer (LG-UTUC). Utilizing the RTGel technology platform, UroGen’s proprietary sustained release, hydrogel-based formulation, Jelmyto is designed to enable longer exposure of urinary tract tissue to mitomycin, thereby enabling the treatment of tumors by non-surgical means. Jelmyto is delivered to patients using standard ureteral catheters or nephrostomy tube. The U.S. FDA previously granted Orphan Drug, Fast Track, and Breakthrough Therapy Designations to Jelmyto for the treatment of LG-UTUC. On April 15, 2020, the FDA approved Jelmyto, making it the first drug approved for the treatment of LG-UTUC in adult patients.

About Upper Tract Urothelial Cancer (UTUC)

Urothelial cancer is the ninth most common cancer globally and the eighth most lethal neoplasm in men in the U.S. Between five percent and ten percent of primary urothelial cancers originate in the ureter or renal pelvis and are collectively referred to as upper tract urothelial cancers (UTUC). In the U.S., there are approximately 6,000 – 7,000 new or recurrent low-grade UTUC patients annually. Most cases are diagnosed in patients over 70 years old, and these older patients often face comorbidities. There are limited treatment options for UTUC, with the most common being endoscopic surgery or nephroureterectomy (removal of the entire kidney and ureter). These treatments can lead to a high rate of recurrence and relapse.

IMPORTANT SAFETY INFORMATION

You should not receive JELMYTO if you have a hole or tear (perforation) of your bladder or upper urinary tract.

Before receiving JELMYTO, tell your healthcare provider about all your medical conditions, including if you:

are pregnant or plan to become pregnant. JELMYTO can harm your unborn baby. You should not become pregnant during treatment with JELMYTO. Tell your healthcare provider right away if you become pregnant or think you may be pregnant during treatment with JELMYTO.
Females who are able to become pregnant: You should use effective birth control (contraception) during treatment with JELMYTO and for 6 months after the last dose.

Males being treated with JELMYTO: If you have a female partner who is able to become pregnant, you should use effective birth control (contraception) during treatment with JELMYTO and for 3 months after the last dose.

are breastfeeding or plan to breastfeed. It is not known if JELMYTO passes into your breast milk. Do not breastfeed during treatment with JELMYTO and for 1 week after the last dose.
Tell your healthcare provider if you take water pills (diuretic).
How will I receive JELMYTO?

Your healthcare provider will tell you to take a medicine called sodium bicarbonate before each JELMYTO treatment.
You will receive your JELMYTO dose from your healthcare provider 1 time a week for 6 weeks. It is important that you receive all 6 doses of JELMYTO according to your healthcare provider’s instructions. If you miss any appointments, call your healthcare provider as soon as possible to reschedule your appointment. Your healthcare provider may recommend up to an additional 11 monthly doses.
JELMYTO is given to your kidney through a tube called a catheter.
During treatment with JELMYTO, your healthcare provider may tell you to take additional medicines or change how you take your current medicines.
After receiving JELMYTO:

JELMYTO may cause your urine color to change to a violet to blue color. Avoid contact between your skin and urine for at least 6 hours.
To urinate, males and females should sit on a toilet and flush the toilet several times after you use it. After going to the bathroom, wash your hands, your inner thighs, and genital area well with soap and water.
Clothing that comes in contact with urine should be washed right away and washed separately from other clothing.
JELMYTO may cause serious side effects, including:

Swelling and narrowing of the tube that carries urine from the kidney to the bladder (ureteric obstruction). If you develop swelling and narrowing, and to protect your kidney from damage, your healthcare provider may recommend the placement of a small plastic tube (stent) in the ureter to help the kidney drain. Tell your healthcare provider right away if you develop side pain or fever during treatment with JELMYTO.
Bone marrow problems. JELMYTO can affect your bone marrow and can cause a decrease in your white blood cell, red blood cell, and platelet counts. Your healthcare provider will do blood tests prior to each treatment to check your blood cell counts during treatment with JELMYTO. Your healthcare provider may need to temporarily or permanently stop JELMYTO if you develop bone marrow problems during treatment with JELMYTO.
The most common side effects of JELMYTO include: side pain, urinary tract infection, blood in your urine, kidney problems, tiredness, nausea, stomach pain, trouble with urination, vomiting, low red blood cell count, frequent urination, itching, chills, and fever.

On May 7, 2020 ANI Pharmaceuticals, Inc. ("ANI") (NASDAQ: ANIP) reported its financial results for the three months ended March 31, 2020 (Press release, ANI Pharmaceuticals, MAY 7, 2020, View Source [SID1234557401]). The Company will host its earnings conference call this morning, May 7, 2020, at 10:30 AM ET. Investors and other interested parties can join the call by dialing (866) 776-8875. The conference ID is 5243607.

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"ANI generated net revenues and non-GAAP earnings that met management’s expectations during a period that was marked by significant uncertainties due to the COVID-19 pandemic. Our performance during this period is a testament to the commitment of our employees and to the strength of the business that we have built. I am proud of the accomplishments that were made during my eleven-year tenure as CEO of ANI. During this time, we have built ANI from a small private company to a thriving public specialty pharmaceutical business with an increasing diverse commercial product offering and an incredibly valuable pipeline opportunity in Cortrophin Gel. As I depart ANI, I am confident that I leave the business in good health, in the hands of a very strong management team, and with its best days ahead of it. I welcome Patrick Walsh from the Board of Directors to the role of interim CEO and trust in his ability to lead the Company until such time as my replacement is identified."

Appoints Interim CEO

As previously announced, Mr. Przybyl will depart as President and CEO on May 10, 2020. The Board of Directors of ANI (BOD) has appointed Patrick D. Walsh interim President and CEO, effective May 11, 2020, until such time that Mr. Przybyl’s permanent replacement is hired. Mr. Walsh has served on the ANI BOD since 2018 and has extensive pharmaceutical industry experience. For Mr. Walsh’s complete bio, please refer to ANI’s proxy statement filed on April 23, 2020. The BOD has retained nationally recognized executive search firm Heidrick & Struggles and is currently conducting the search for a President and CEO.

Continues Expansion of Commercialized Product Portfolio

During the first quarter of 2020, we successfully integrated the Amerigen Pharmaceuticals, Ltd. U.S. product portfolio, which was purchased in January for $52.5 million. This transaction increased our commercialized generic product portfolio by nine products from 35 to 44 and increased our pipeline portfolio by an additional thirteen opportunities. In addition, we launched five generic products during the quarter, further expanding our generic offerings to 49, and our total commercialized offerings including brands to 60.

Generic Pharmaceutical Products

Net revenues for generic pharmaceutical products were $37.5 million during the three months ended March 31, 2020, an increase of 19% compared to $31.6 million for the same period in 2019. The primary drivers of the increase are the September 2019 launch of Vancomycin Oral Solution and the January 2020 launch of Miglustat, Mixed Amphetamine Salts, Penicillamine and Paliperidone, all products acquired in January from Amerigen Pharmaceuticals, Ltd. ("Amerigen"). These increases were tempered by decreases in sales of Vancomycin capsules, Esterified Estrogen with Methyltestosterone ("EEMT"), Erythromycin Ethylsuccinate ("EES"), and Ezetimibe Simvastatin.

Branded Pharmaceutical Products

Net revenues for branded pharmaceutical products were $9.2 million during the three months ended March 31, 2020, a decrease of 48% compared to $17.5 million for the same period in 2019. The primary reasons for the decrease were lower unit sales of Inderal XL, Inderal LA and Atacand as well as decreased sales of Arimidex.

Contract Manufacturing

Contract manufacturing revenues were $2.0 million during the three months ended March 31, 2020, a decrease of 19% compared to $2.4 million for the same period in 2019, due to the timing and volume of orders from contract manufacturing customers in the period.

Royalty and Other

Royalty and other were $1.1 million during the three months ended March 31, 2020, a decrease of $0.2 million from $1.3 million for the same period in 2019, primarily due to a decrease in royalty and laboratory service revenues, tempered by increases in product development revenues earned by ANI Canada during the three months ended March 31, 2020.

Operating Expenses

Operating expenses increased to $57.6 million for the three months ended March 31, 2020, from $48.5 million in the prior year period. The increase was primarily due to the following:

– $7.1 million increase in cost of sales, primarily as a result of $2.7 million in cost of sales representing the excess of fair value over cost for inventory acquired in the Amerigen acquisition and subsequently sold during the period, increased volumes related to a shift in product mix towards generic products, current period inventory reserve charges and increased sales of products subject to profit-sharing arrangements,
– $4.6 million in the build of Cortrophin pre-launch commercial inventories (which are expensed for US GAAP); there were no such comparable activities in the first quarter 2019, and
– $2.0 million increase in research and development expense, primarily due to $3.8 million in-process research and development expense from the Amerigen acquisition, partially offset by a decrease in expense related to the Cortrophin re-commercialization project as we begin to complete our development efforts.

These increases were tempered by a $4.9 million decrease in depreciation and amortization expense, primarily due to the non-reoccurrence of amortization expense recorded in relation to the January 2019 royalty buy out, partially offset by the amortization of the Abbreviated New Drug Applications and marketing and distribution rights acquired in January 2020 from Amerigen.

Cost of sales exclusive of the $2.7 million net impact related to the excess of fair value over the cost of inventory sold during the period as a percentage of net revenues increased to 38% during the three months ended March 31, 2020, from 28% during same period in 2019, primarily as a result of a shift in product mix to an increased volume of generic products, which have lower average selling prices, inventory reserve charges in the current quarter as well as increased sales of products subject to profit-sharing arrangements during the current quarter.

Net Loss and Diluted Loss per Share

Net loss was $7.0 million for the three months ended March 31, 2020, as compared to net income of $0.4 million in the prior year period. The effective consolidated tax benefit rate for the three months ended March 31, 2020 was 29.7%.

Diluted loss per share for the three months ended March 31, 2020 was $0.59, based on 11,902 thousand diluted shares outstanding, as compared to diluted earnings per share of $0.04 in the prior year period. Adjusted non-GAAP diluted earnings per share was $1.04, as compared to adjusted non-GAAP diluted earnings per share of $1.30 in the prior year period. For a reconciliation of adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure, please see Table 4.

ANI filed the sNDA for Cortrophin Gel re-commercialization on March 23, 2020, on track with our long-standing publicly projected Q1 2020 target filing date. The FDA initially set a PDUFA goal date of July 23, 2020, however as announced on April 29, 2020, subsequently issued a Refusal to File (RTF) letter. ANI will request a Type-A meeting with the FDA in order to discuss the deficiencies identified in the RTF letter and our plan to address each of them. In addition, significant accomplishments since the fourth quarter 2020 press release (dated February 27, 2020) include:

ANI successfully completed manufacturing for a sixth commercial scale batch of Corticotropin API. All six commercial scale batches have been analytically consistent with each other and have met all API release specifications.
ANI obtained 6 months accelerated and real-time stability on all API registration batches which facilitated sNDA filing by the end of first quarter 2020.
ANI successfully completed three media fill simulations demonstrating sterility assurance for our Cortrophin Gel manufacturing process.
ANI obtained 6 months accelerated and real-time stability on all drug product registration batches which also facilitated sNDA filing by the end of first quarter 2020.
ANI successfully completed full shipping validation which confirmed that the integrity of Cortrophin Gel is fully maintained to support our commercial launch and distribution plan.
In preparation for a future launch, ANI has continued to stockpile porcine pituitaries and corticotropin API to ensure that it can satisfy market demand.
For further details, please see ANI’s Cortrophin Gel Re-commercialization Milestone Update in Table 5.

ANI Guidance for the Full Year 2020

Due to inherent uncertainties regarding the duration and impact of the coronavirus (COVID-19) pandemic, ANI is suspending its previously announced 2020 financial guidance.

ANI Product Development Pipeline

ANI’s pipeline consists of 116 products, addressing a total annual market size of $5.8 billion, based on data from IQVIA. Of these, ANI expects that at least 52 can be commercialized based on either CBE-30s or prior approval supplements filed with the FDA.

Non-GAAP Financial Measures

Adjusted non-GAAP EBITDA

ANI’s management considers adjusted non-GAAP EBITDA to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by non-cash stock-based compensation and differences in capital structures, tax structures, capital investment cycles, ages of related assets, and compensation structures among otherwise comparable companies. Management uses adjusted non-GAAP EBITDA when analyzing Company performance.

Adjusted non-GAAP EBITDA is defined as net income, excluding tax expense or benefit, interest expense, depreciation, amortization, the excess of fair value over cost of acquired inventory, stock-based compensation expense, expense from acquired in-process research and development, gains on inventory reserve recoveries, transaction and integration expenses, Cortrophin pre-launch charges, other income / expense and certain other items that vary in frequency and impact on ANI’s results of operations. Adjusted non-GAAP EBITDA should be considered in addition to, but not in lieu of, net income or loss reported under GAAP. A reconciliation of adjusted non-GAAP EBITDA to the most directly comparable GAAP financial measure is provided in Table 3.

Adjusted non-GAAP Net Income

ANI’s management considers adjusted non-GAAP net income to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, inventory reserve recoveries, Cortrophin pre-launch charges, acquired IPR&D expense, transaction and integration expenses and certain other items that vary in frequency and impact on ANI’s results of operations. Management uses adjusted non-GAAP net income when analyzing Company performance.

Adjusted non-GAAP net income is defined as net income, plus the excess of fair value over cost of acquired inventory sold, stock-based compensation expense, transaction and integration expenses, non-cash interest expense, depreciation and amortization expense, expense from acquired in-process research and development, Cortrophin pre-launch charges and certain other items that vary in frequency and impact on ANI’s results of operations, less the tax impact of these adjustments calculated using an estimated statutory tax rate. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP net income should be considered in addition to, but not in lieu of, net income reported under GAAP. A reconciliation of adjusted non-GAAP net income to the most directly comparable GAAP financial measure is provided in Table 4.

Adjusted non-GAAP Diluted Earnings per Share

ANI’s management considers adjusted non-GAAP diluted earnings per share to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, inventory reserve recoveries, Cortrophin pre-launch charges, acquired IPR&D expense, transaction and integration expenses and certain other items that vary in frequency and impact on ANI’s results of operations.

Management uses adjusted non-GAAP diluted earnings per share when analyzing Company performance.

Adjusted non-GAAP diluted earnings per share is defined as adjusted non-GAAP net income, as defined above, divided by the diluted weighted average shares outstanding during the period, as adjusted for the dilutive effect of the convertible debt notes (in 2019), when applicable. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP diluted earnings per share should be considered in addition to, but not in lieu of, diluted earnings or loss per share reported under GAAP. A reconciliation of adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure is provided in Table 4.

On May 7, 2020 Vivoryon Therapeutics AG (Euronext Amsterdam: VVY, ISIN DE0007921835), which develops first-in-class drugs targeting post-translational modifying enzymes, reported that it will publish its first quarter business update for the period ended March 31, 2020 on Thursday, May 14, 2020, in the form of an interim management report (Press release, Vivoryon Therapeutics, MAY 7, 2020, View Source [SID1234557205]).

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