On November 6, 2019 Natera, Inc. (NASDAQ: NTRA), a leader in non-invasive genetic testing and the analysis of circulating cell-free DNA, reported financial results for the third quarter ended September 30, 2019 and provided an update on recent business progress (Press release, Natera, NOV 6, 2019, View Source [SID1234550516]).

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Recent Accomplishments & Highlights

Generated total revenues of $77.9 million in the third quarter of 2019 compared to $65.3 million in the third quarter of 2018, an increase of 19%.
Processed over 200,000 tests in the third quarter of 2019, compared to approximately 167,000 tests processed in the third quarter of 2018, an increase of approximately 20%.
Processed approximately 136,000 Panorama tests in the third quarter of 2019, compared to approximately 106,000 Panorama tests processed in the third quarter of 2018, an increase of approximately 28%.
Accessioned approximately 55,000 Horizon carrier screening (HCS) tests in the third quarter of 2019 compared to approximately 44,000 HCS tests accessioned in the third quarter of 2018, an increase of approximately 25%.
Received positive draft local coverage decision from Medicare for reimbursement of Signatera in colorectal cancer.
Completed key technical and commercialization milestones with BGI Genomics.
Entered into partnership to develop and commercialize personalized circulating tumor DNA monitoring assays with Foundation Medicine.
Successfully completed $230 million follow-on equity offering.
"Q3 was in many ways a transformational quarter for Natera," said Steve Chapman, Natera’s CEO. "We continued to see strong momentum in volume growth and improved average selling price per test. We received a positive draft coverage decision for Signatera in colorectal cancer and signed a partnership with Foundation Medicine. We also recently executed a very successful follow-on equity offering which is intended to ensure we are well capitalized for the commercial efforts planned for 2020. We clearly have momentum across the business."

Third Quarter Ended September 30, 2019 Financial Results

Total revenues were $77.9 million in the third quarter of 2019 compared to $65.3 million for the third quarter of 2018, an increase of 19%. The increase in total revenues was driven primarily by increased sales of our Panorama and HCS tests. There were approximately 200,200 tests processed in the third quarter of 2019, including approximately 187,200 tests accessioned and 12,100 processed through the Constellation software platform (Constellation units), compared to approximately 167,200 tests processed in the third quarter of 2018, including approximately 156,600 tests accessioned and 9,500 Constellation units, an overall increase of approximately 20%.

In the three months ended September 30, 2019, Natera recognized revenue on approximately 189,600 tests for which results were reported to customers in the period (tests reported), including approximately 178,000 tests accessioned and 11,600 Constellation units, compared to approximately 154,900 tests reported, including approximately 145,700 tests accessioned and 9,200 Constellation units, in the third quarter of 2018, which represents an increase of approximately 22%.

Total tests reported less Constellation units reported

Natera recognized revenues on approximately 120,100 Panorama tests accessioned and 9,900 Panorama Constellation units in the three months ended September 30, 2019, compared to approximately 100,900 Panorama tests accessioned and 7,800 Panorama Constellation units in the same period in 2018. Natera recognized revenue on approximately 52,600 HCS tests accessioned in the three months ended September 30, 2019, compared to approximately 41,000 HCS tests accessioned in the same period in 2018.

Gross profit for the three months ended September 30, 2019 and 2018 was $34.0 million and $23.6 million, respectively, representing a 44% and 36% gross margin, respectively*. We were able to achieve higher gross margins in Q3 2019 as a result of improved cost of goods sold per test and approximately $6.9 million in licensing revenues earned from the BGI Genomics.

Total operating expenses, representing research and development expenses and selling, general and administrative expenses, for the third quarter of 2019 were $55.1 million, an increase of approximately 8.5% compared to $50.8 million in the same period of the prior year. The increase was driven primarily by higher stock-based compensation expenses, litigation costs, and other outside services, and partially offset by a gain from the sale of the Evercord business of approximately $14.4 million.

Loss from operations for the third quarter of 2019 was $21.1 million compared to $27.2 million for the same period of the prior year.

Net loss for the third quarter of 2019 was $23.1 million, or ($0.33) per basic and diluted share, compared to net loss of $29.6 million, or ($0.49) per basic and diluted share, for the same period in 2018. Weighted average shares outstanding were 70.5 million in the third quarter of 2019.

At September 30, 2019, Natera held $238.4 million in cash, cash equivalents, short-term investments and restricted cash, compared to $158.5 million as of December 31, 2018. As of September 30, 2019, Natera had a total outstanding debt balance of $123.7 million, comprised of $50.1 million with accrued interest under its $50.0 million line of credit with UBS at a variable interest rate of 30-day LIBOR plus 110 bps and a net carrying amount of $73.6 million under its $125.0 million debt facility with OrbiMed Advisors.

2019 Financial Outlook

Natera’s updated outlook incorporates the sale of the Evercord business in the third quarter, which reduced the 2019 revenue outlook by approximately $4 million and increased the cash balance by approximately $10 million. Natera anticipates 2019 total revenue of $295 million to $302 million; 2019 cost of revenues to be approximately 59% to 61% of revenues; selling, general and administrative costs to be approximately $195 million to $205 million; research and development costs to be $52 million to $57 million, and net cash burn to be $65 million to $75 million**.

* Gross profit is calculated as GAAP total revenues less GAAP cost of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.

** Cash burn is calculated as the sum of GAAP net cash used by operating activities (estimated for 2019 to be between $57 million and $67 million) and GAAP net purchases of property and equipment (estimated for 2019 to be approximately $8 million).

On November 6, 2019 Celularity, Inc., a clinical-stage cell therapeutics company developing allogeneic cellular therapies harnessed from human placentas, reported it will present data supporting its allogeneic, off-the-shelf, placental derived cell therapy programs at the 61st American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting & Exposition, taking place December 7-10 at the Orange County Convention Center in Orlando, Florida (Press release, Celularity, NOV 6, 2019, View Source [SID1234550530]).

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"We believe the placenta is nature’s cell factory, and the data being presented at ASH (Free ASH Whitepaper) will illustrate the potential of our investigational placental derived NK- and T cell-based allogeneic cell therapy programs in oncology," said Robert J. Hariri, M.D., Ph.D., Founder, Chairman and CEO at Celularity. "We look forward to advancing Celularity’s leading-edge technologies that harness the placenta’s unique immunologic and pro-regenerative biology to produce therapeutic solutions targeting unmet healthcare needs globally."

ASH abstracts are now available at View Source

Details for the 2019 ASH (Free ASH Whitepaper) poster presentations are as follows:

Title: Development of CD38 CAR Engineered Human Placental Hematopoietic Stem Cell Derived Natural Killer Cells (PNK-CAR38) As Allogeneic Cancer Immunotherapy
Date: Saturday, December 7, 2019

Title: Engineering High Affinity and Cleavage Resistant CD16 to Augment ADCC of Placental Hematopoietic Stem Cells-Derived Natural Killer Cells
Date: Saturday, December 7, 2019

Title: Preclinical Evaluation of Human Placental-Derived Allogeneic CD19 CAR-T Cells Against B Cell Malignancies
Date: Sunday, December 8, 2019

Title: Results of a Phase I Study of PNK-007, Allogeneic, Off the Shelf NK Cell, Post Autologous Transplant in Multiple Myeloma (NCT02955550)
Date: Monday, December 9, 2019

Title: Immune Monitoring of CD34+ Placental Cell Derived Natural Killer Cell Therapy (PNK-007) in Phase I Study of Multiple Myeloma
Date: Monday, December 9, 2019

About PNK-007
PNK‐007 is the only allogeneic, off-the-shelf NK cell therapy being developed from placental hematopoietic stem cells as a potential treatment option for various hematologic cancers and solid tumors. NK cells are a unique class of immune cells, innately capable of targeting cancer cells and interacting with adaptive immunity. When derived from the placenta, these cells offer intrinsic safety and versatility, allowing potential use across a range of organs and tissues. PNK cells are currently being investigated as a treatment for acute myeloid leukemia (AML) and multiple myeloma (MM).

About CYNK-001
CYNK-001, a cryopreserved formulation of PNK-007 cells, is the only cryopreserved, off-the-shelf NK cell therapy being developed from placental hematopoietic stem cells as a potential treatment option for various hematologic cancers and solid tumors.

On November 6, 2019 Sanofi Analyses from the ICARIA-MM trial for isatuximab, an investigational anti-CD38 monoclonal antibody, reported that will highlight outcomes in an elderly patient population, depth of response and associated long-term outcomes, and health-related quality of life (Press release, Sanofi Genzyme, NOV 6, 2019, View Source [SID1234550546]). These results are among data for isatuximab, being investigated for the treatment of multiple myeloma, that will be presented at the 61st American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting & Exposition from December 7-10 in Orlando, FL.

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"We look forward to presenting further insights into isatuximab, including efficacy and safety data in patients 75 years of age and older, who generally experience poorer outcomes than those who are younger. In addition, we are detailing new results on depth of response, which is associated with long-term progression-free and overall survival," said Dietmar Berger, Head of Global Development at Sanofi. "These data advance our understanding of multiple myeloma, a difficult-to-treat disease with significant patient need."

The ICARIA-MM clinical trial serves as the basis of a Biologic License Application for isatuximab, which is currently under review by the U.S. Food and Drug Administration (FDA) with a target action date for a decision of April 30, 2020. The clinical trial is among a number of ongoing pivotal studies to evaluate the potential role of isatuximab in multiple standard-of-care treatment regimens for multiple myeloma. A Marketing Authorization Application for isatuximab was also accepted for review by the European Medicines Agency (EMA) in the second quarter of 2019.

Key Sanofi data being presented at ASH (Free ASH Whitepaper) include:

Efficacy of Isatuximab with Pomalidomide and Dexamethasone in Elderly Patients with Relapsed/Refractory Multiple Myeloma: ICARIA-MM Subgroup Analysis (Dr. Fredrik Schjesvold; Saturday, December 7, 2019: Poster Presentation, 5:30-7:30 p.m. ET)
Depth of Response and Response Kinetics in the ICARIA-MM Study of Isatuximab/Pomalidomide/Dexamethasone in Relapsed/Refractory Multiple Myeloma (Dr. Cyrille Hulin; Sunday, December 8, 2019: Poster Presentation, 6:00-8:00 p.m. ET)
Health-Related Quality of Life in Patients with Relapsed/Refractory Multiple Myeloma Treated with Isatuximab plus Pomalidomide and Dexamethasone: ICARIA-MM Study (Katherine Houghton; Saturday, December 7, 2019: Poster Presentation, 5:30-7:30 p.m. ET)
Evaluating Isatuximab Interference with Monoclonal Protein Detection By Immuno-Capture and Liquid Chromatography Coupled to High Resolution Mass Spectrometry in the Pivotal Phase 3 Multiple Myeloma Trial, ICARIA-MM (Dr. Greg Finn; Sunday, December 8, 2019: Poster Presentation, 6:00-8:00 p.m. ET)
The Relationship Between Baseline Biomarkers and Efficacy of Isatuximab in Combination with Pomalidomide and Dexamethasone in RRMM: Insights from Phase 1 and Phase 3 studies (Dr. Paul Richardson; Sunday, December 8, 2019: Poster Presentation, 6:00-8:00 p.m. ET)
Exposure-response Analyses and Disease Modeling for Selection and Confirmation of Optimal Dosing Regimen of Isatuximab in Combination Treatment in Patients with Multiple Myeloma (Dr. Fatiha Rachedi; Saturday, December 7, 2019: Poster Presentation, 5:30-7:30 p.m. ET)

In addition, new Phase 2 results in smoldering multiple myeloma will be presented (Investigator-Sponsored Study):

A Multicenter Phase II Single Arm Trial of Isatuximab in Patients with High Risk Smoldering Multiple Myeloma (Dr. Elisabet E. Manasanch; Sunday, December 8, 2019: Poster Presentation, 6:00-8:00 p.m. ET)

About ICARIA-MM and isatuximab

ICARIA-MM is a pivotal Phase 3 randomized, open-label, multi-center trial evaluating isatuximab in combination with pomalidomide and dexamethasone (pom-dex) versus pom-dex alone in patients with relapsed/refractory multiple myeloma (RRMM). The study enrolled 307 patients with RRMM across 96 centers spanning 24 countries. Overall, patients had received a median of three prior lines of anti-myeloma therapy, including at least two consecutive cycles of lenalidomide and a proteasome inhibitor given alone or in combination.

During the trial, isatuximab was administered through an intravenous infusion at a dose of 10mg/kg once weekly for four weeks, then every other week for 28-day cycles in combination with standard doses of pom-dex for the duration of treatment.

Isatuximab targets a specific epitope on the CD38 receptor and is designed to trigger multiple, distinct mechanisms of action that are believed to directly promote programmed tumor cell death (apoptosis) and immunomodulatory activity. CD38 is highly and uniformly expressed on multiple myeloma cells and cell surface receptors, making it a potential target for antibody-based agents such as isatuximab. The clinical significance of these findings is under investigation.

Isatuximab is an investigational agent and its safety and efficacy have not been evaluated by the U.S. FDA, the EMA, or any other regulatory authority.

On November 6, 2019 Primmune Therapeutics reported that it will present primate pharmacology data on PRX034 at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting 2019 in National Harbor, MD (Press release, Primmune Therapeutics, NOV 6, 2019, View Source [SID1234550592]). PRX034 is a novel orally bioavailable small molecule toll-like receptor 7 (TLR7) agonist that activates innate immunity by systemically targeting plasmic cytoid dendritic cells in vivo. PRX034 was derived from Primmune’s lead series of novel TLR7 agonists and demonstrates the potential of these compounds to improve response rates and treatment durability of adaptive immune therapies.

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"There is a very strong rationale for combining agents that activate innate immunity, like PRX034, with drugs that engage adaptive immunity, like checkpoint inhibitors, to potentially address patients who inadequately respond to approved treatments," said James Appleman, Ph.D., Co-founder and Chief Scientific Officer at Primmune Therapeutics. "Our program builds upon historical clinical experience with TLR7 agonists, which we used to identify an ideal pharmacologic profile supporting the notion that long-term systemic dosing with TLR7 agonists best complements adaptive immunity approaches."

"PRX034 meets the initial target product profile criteria that we outlined at the beginning of our discovery campaign and we are in the process of completing the final set of confirmatory studies before entering formal IND enabling GLP non-clinical studies," said Charlie McDermott, Chairman & Chief Executive Officer of Primmune Therapeutics.

Poster presentation details:

Title: Pharmacodynamic response in vitro and in vivo of novel orally administered Toll¬-like Receptor 7 agonists for systemic immunotherapy of cancer
Abstract #: P670
Category: Immune stimulants and immune modulators
Presentation: Saturday, November 9, 2019 by James R. Appleman, Ph.D.

On November 6, 2019 Trillium Therapeutics Inc. (NASDAQ/TSX: TRIL), a clinical stage immuno-oncology company developing innovative therapies for the treatment of cancer, reported that new preclinical data from its STING agonist program will be presented at the 34th annual meeting of the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) (Press release, Trillium Therapeutics, NOV 6, 2019, View Source [SID1234550409]). The meeting will be held November 6-10 in National Harbor, MD. The poster presentation will highlight the anti-tumor activity of TTI-10001, a novel small molecule STING agonist, when delivered intravenously or orally. Details of the presentation are listed below.

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Title: "TTI-10001, a next generation small molecule STING agonist, demonstrates potent anti-tumor activity in mice following intravenous or oral administration"

Presenter: Bob Uger, Ph.D., Chief Scientific Officer, Trillium Therapeutics Inc.

Date and Time: November 9, 2019 from 8:00 a.m. – 8:30 p.m. ET

Location: Gaylord National Hotel & Convention Center

Abstract Number: P668