On October 30, 2019 United Therapeutics Corporation (Nasdaq: UTHR) reported its financial results for the quarter ended September 30, 2019 (Press release, United Therapeutics, OCT 30, 2019, View Source [SID1234550013]).

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"We are pleased to see continued growth during the quarter in the total number of U.S. patients treated with our prostacyclin product franchise, consisting of Remodulin, Tyvaso, and Orenitram," said Michael Benkowitz, President and Chief Operating Officer of United Therapeutics. "As we execute toward our commercial goals, we are also continuing to execute toward our clinical goals, which include the recent label update to indicate that Orenitram delays disease progression and continued progress toward near-term phase III clinical trial readouts for DISTINCT, the study of dinutuximab for small cell lung cancer, and INCREASE, the study of pulmonary hypertension associated with interstitial lung disease."

Revenues for the three months ended September 30, 2019 decreased by $11.2 million as compared to the same period in 2018, driven entirely by a decrease in Adcirca revenues following the onset of generic competition in 2018. Revenues for our other four commercial products grew by $33.1 million in the aggregate for the three months ended September 30, 2019. Additional details regarding each product are discussed below.

Remodulin net product sales increased by $14.7 million for the three months ended September 30, 2019, as compared to the same period in 2018. $32.7 million of the increase was due to an increase in total quantities sold, primarily to our international distributors, partially offset by a decrease of $13.9 million due to price reductions, primarily to our international distributors, and higher gross-to-net revenue deductions of $4.1 million. During the three months ended September 30, 2019, there was an increase in the number of U.S. patients being treated with Remodulin, as compared to the same period in 2018.

Tyvaso net product sales for the three months ended September 30, 2019 increased by $3.0 million, as compared to the same period in 2018, primarily due to a price increase implemented in January 2019.

Orenitram net product sales for the three months ended September 30, 2019 increased by $8.2 million as compared to the same period in 2018. This increase was primarily due to an increase in the number of patients being treated with Orenitram and a price increase implemented in January 2019, partially offset by higher gross-to-net revenue deductions.

Unituxin net product sales for the three months ended September 30, 2019 increased by $7.2 million as compared to the same period in 2018. This increase was due to an increase in the number of vials sold and a price increase implemented in April 2019.

Adcirca net product sales for the three months ended September 30, 2019 decreased by $44.3 million as compared to the same period in 2018. This decrease was primarily due to a decrease in bottles sold following the onset of generic competition for Adcirca beginning in August 2018.

Research and development expense, excluding share-based compensation. Research and development expense decreased by $9.8 million for the three months ended September 30, 2019, as compared to the same period in 2018. Research and development expense for the treatment of cardiopulmonary diseases decreased by $21.9 million for the three months ended September 30, 2019, as compared to the same period in 2018, due to: (1) a one-time $10.0 million payment under a research agreement with MannKind; and (2) an up-front payment of $10.0 million under our license agreement with Samumed, both of which occurred during the three months ended September 30, 2018. The decrease in cardiopulmonary research and development expense was partially offset by an $11.2 million increase in research and development expense for our organ manufacturing projects due to increased preclinical and clinical work on technologies designed to increase the supply of transplantable organs and tissues.

The decrease in share-based compensation expense of $27.5 million for the three months ended September 30, 2019, as compared to the same period in 2018, was primarily due to a $30.8 million decrease in STAP expense driven by a 2 percent increase in our stock price for the three months ended September 30, 2019, as compared to a 13 percent increase in our stock price for the same period in 2018; partially offset by: (1) a $1.8 million increase in stock option expense due to additional awards granted and outstanding in 2019; and (2) a $1.4 million increase in restricted stock unit expense due to additional awards granted and outstanding in 2019.

Other Expense, Net

The increase in other expense, net of $16.0 million for the three months ended September 30, 2019, as compared to the same period in 2018, was primarily due to the recognition of a net unrealized loss in publicly-traded equity securities. During the three months ended September 30, 2019, we recognized $13.0 million of net unrealized losses on these securities.

Impairment of Investment in a Privately-Held Company

During the quarter ended September 30, 2018, one of the privately-held companies in which we invested experienced an event triggering an impairment analysis to evaluate the recoverability of our investment. We determined that the fair value of our investment was lower than its carrying value, resulting in an impairment charge of $12.4 million.

Income Tax Expense

The income tax expense was $34.5 million for the three months ended September 30, 2019, as compared to $33.6 million for the same period in 2018. The income tax expense is based on an estimated effective tax rate (ETR) for the entire year. The estimated annual ETR is subject to adjustment in subsequent quarterly periods if components used to calculate the estimated annual ETR are updated or revised. Our actual ETR as of September 30, 2019 and September 30, 2018 was 33 percent and 21 percent, respectively. We recognized a loss before income taxes, and a corresponding income tax benefit, for the nine months ended September 30, 2019, as a result of the one-time $800.0 million payment to Arena Pharmaceuticals, Inc. in January 2019. As a result of this loss, our anticipated tax credits and foreign sales deduction, partially offset by non-deductible compensation expense, increased our tax benefit and resulting ETR for the nine months ended September 30, 2019, compared to the same period in 2018.

Non-GAAP Earnings

Non-GAAP earnings is defined as net income, adjusted for: (1) share-based compensation expense (including expenses relating to stock options, restricted stock units, share tracking awards and our employee stock purchase plan); (2) impairment of investment in privately-held company; (3) unrealized losses (gains) on equity securities; (4) asset impairment charges; (5) license-related fees; and (6) tax benefit on non-GAAP earnings adjustments.

Inducement Restricted Stock Units

On October 25, 2019, we granted a total of 2,604 restricted stock units under our 2019 Inducement Stock Incentive Plan to three newly hired employees. These restricted stock units vest in three equal installments on October 31, 2020, October 31, 2021 and October 31, 2022, assuming continued employment on such dates, and are subject to the standard terms and conditions we filed with the SEC as Exhibit 10.2 to our Current Report on Form 8-K on March 1, 2019. We are providing this information in accordance with Nasdaq Listing Rule 5635(c)(4).

Conference Call

We will host a half-hour teleconference on Wednesday, October 30, 2019, at 9:00 a.m. Eastern Time. The teleconference is accessible by dialing 1-877-351-5881, with international callers dialing 1-970-315-0533. A rebroadcast of the teleconference will be available for one week by dialing 1-855-859-2056, with international callers dialing 1-404-537-3406, and using access code: 7462119.

This teleconference will also be webcast and can be accessed via our website at View Source

On October 30, 2019 Exelixis, Inc. (Nasdaq: EXEL) reported financial results for the third quarter of 2019 and provided an update on progress toward fulfilling its key corporate objectives, as well as commercial and clinical development milestones (Press release, Exelixis, OCT 30, 2019, View Source [SID1234550036]).

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"In the third quarter of 2019, we made strong progress across all components of our business, highlighted in particular by our clinical and business development activities. Importantly, for the first time, global cabozantinib franchise net revenue exceeded $1 billion over four consecutive quarters," said Michael M. Morrissey, Ph.D., President and Chief Executive Officer of Exelixis. "Based on encouraging early clinical data, we expanded the COSMIC-021 study, our phase 1b trial of cabozantinib and atezolizumab across multiple tumor types, and we entered into a collaboration with Aurigene, our second in-licensing agreement of 2019, to develop novel therapies for cancer."

Dr. Morrissey continued: "As we close out Exelixis’ 25th year, our focus remains on continued execution across the organization, all towards building momentum for key milestones anticipated in 2020, including clinical results early in the year from the phase 3 pivotal CheckMate 9ER study being conducted in collaboration with Bristol-Myers Squibb, additional clinical data emerging from COSMIC-021 and initiating new pivotal trials which aim to expand the cabozantinib franchise opportunity. Furthermore, our continued positive cash flow enables us to drive toward building sustainable long-term growth through our internal discovery activities and targeted business development opportunities with the potential to expand the breadth and depth of our pipeline."

Third Quarter 2019 Financial Results

Total revenues for the quarter ended September 30, 2019 were $271.7 million, compared to $225.4 million for the comparable period in 2018.

Total revenues included net product revenues of $191.8 million for the quarter ended September 30, 2019, compared to $162.9 million for the comparable period in 2018. The increase in net product revenues reflected the continued growth of CABOMETYX (cabozantinib) in the U.S. for the treatment of patients with advanced

Exelixis Third Quarter 2019 Financial Results
Page 2 of 8
October 30, 2019

renal cell carcinoma (RCC), as well as the U.S. launch of CABOMETYX for the treatment of patients with hepatocellular carcinoma (HCC) who have been previously treated with sorafenib, following its approval by the U.S. Food and Drug Administration (FDA) in January 2019.

Total revenues for the quarter ended September 30, 2019 also include collaboration revenues of $79.9 million, compared to $62.5 million for the comparable period in 2018. The increase in collaboration revenues was primarily the result of the recognition of a $50.0 million milestone from Exelixis’ collaboration with Ipsen Pharma SAS (Ipsen) for the achievement of $250.0 million of net sales of cabozantinib in its territories over four consecutive fiscal quarters. In the comparable period in 2018, Exelixis recognized $42.6 million in milestone revenues from Ipsen.

Research and development expenses for the quarter ended September 30, 2019 were $97.3 million, compared to $44.7 million for the comparable period in 2018. The increase in research and development expenses was primarily related to increases in clinical trial costs, license and other collaboration costs and personnel expenses. The increase in clinical trial costs was primarily due to costs associated with the expanding clinical trial program for cabozantinib that includes four phase 3 pivotal studies (CheckMate 9ER, COSMIC-311, COSMIC-312 and COSMIC-313), as well as a multi-cohort phase 1b study (COSMIC-021). The increase in license and other collaboration costs was primarily a result of the collaboration, option and license agreement Exelixis entered into with Aurigene Discovery Technologies Limited (Aurigene) in July 2019. The increase in personnel expenses was primarily due to increases in headcount to support Exelixis’ expanded discovery and development efforts.

Selling, general and administrative expenses for the quarter ended September 30, 2019 were $51.3 million, compared to $48.1 million for the comparable period in 2018. The increase in selling, general and administrative expenses was primarily related to increases in personnel expenses and stock-based compensation partially offset by a decrease in corporate giving. The increase in personnel expenses was primarily due to increases in administrative headcount to support Exelixis’ commercial and research and development organizations. The increase in stock-based compensation was primarily due to increases in headcount, as well as the expense recognition for restricted stock units that were granted in September 2018 that either have vested or will vest upon the achievement of specific performance targets.

Provision for income taxes for the quarter ended September 30, 2019 was $25.2 million and Exelixis’ effective tax rate was 20.5%, compared to $2.3 million and 1.8%, respectively, for the comparable period in 2018. The provision for income taxes relating to Exelixis’ pre-tax income for the three months ended September 30, 2018 was largely offset by a valuation allowance against its net operating loss carryforwards and other deferred tax assets. At December 31, 2018, Exelixis released substantially all of the remaining valuation allowance against Exelixis’ deferred tax assets, after Exelixis determined that it was more likely than not that these deferred tax assets would be realized.

GAAP net income for the quarter ended September 30, 2019 was $97.5 million, or $0.32 per share, basic and $0.31 per share, diluted, compared to GAAP net income of $126.6 million, or $0.42 per share, basic and $0.41 per share, diluted, for the comparable period in 2018. The decrease in net income was primarily related to the increases in research and development expenses and the provision for income taxes; those changes were partially offset by the increases in both net product revenues and collaboration revenues recognized from Exelixis’ collaboration agreements.

Non-GAAP net income for the quarter ended September 30, 2019 was $107.6 million, or $0.35 per share, basic and $0.34 per share, diluted, compared to non-GAAP net income of $136.2 million, or $0.46 per share, basic and $0.44 per share, diluted, for the comparable period in 2018. Non-GAAP net income excludes stock-based compensation and adjusts for the related income tax effect.

Exelixis Third Quarter 2019 Financial Results
Page 3 of 8
October 30, 2019

Cash and investments totaled approximately $1.2 billion at September 30, 2019, compared to approximately $852 million at December 31, 2018.

Non-GAAP Financial Measures

To supplement Exelixis’ financial results presented in accordance with GAAP, Exelixis presents non-GAAP net income (and the related per share measures), which exclude from GAAP net income (and the related per share measures) stock-based compensation expense and adjust for the related income tax effect of this non-GAAP adjustment.

Exelixis believes that the presentation of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. In particular, Exelixis believes that these non-GAAP financial measures, when considered together with its financial information prepared in accordance with GAAP, can enhance investors’ and analysts’ ability to meaningfully compare Exelixis’ results from period to period, and to identify operating trends in Exelixis’ business. Exelixis has excluded stock-based compensation expense because it is a non-cash expense that may vary significantly from period to period as a result of changes not directly or immediately related to the operational performance for the periods presented. Exelixis also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions.

These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Exelixis encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP financial information and the reconciliation between these presentations, to more fully understand Exelixis’ business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

2019 Financial Guidance

Exelixis is providing the following updated financial guidance for the full year 2019. Cost of goods sold is expected to be between 4% and 5% of net product revenues. Research and development expenses are now expected to be approximately $350 million given the impact of the recent business development activities and include non-cash expenses related to stock-based compensation of approximately $20 million. Selling, general and administrative expenses are expected to be approximately $240 million and include non-cash expenses related to stock-based compensation of approximately $40 million. Guidance for the effective tax rate in 2019 is between 21% and 23%.

Cabozantinib Highlights

Continued Growth in Cabozantinib Franchise Net Revenues and Royalties. Net product revenues generated by the cabozantinib franchise in the U.S. were $191.8 million during the third quarter of 2019, an increase of 17.7% year-over-year, with net product revenues of $187.4 million for CABOMETYX and $4.4 million for COMETRIQ (cabozantinib). Based upon Exelixis’ partner Ipsen’s cabozantinib-related revenues in the third quarter of 2019, Exelixis earned $16.4 million in royalty revenues at the 22% royalty rate. Cabozantinib continues to expand its global footprint, where it is currently approved and commercially available in 49 and 34 countries, respectively. For the first time, global cabozantinib franchise net revenue exceeded $1 billion over four consecutive quarters.

$50.0 Million Milestone Earned from Ipsen Triggered by Growth of Cabozantinib Ex-U.S. Sales. In the third quarter of 2019, Ipsen reported cabozantinib net sales of approximately $73 million in its territories using the contractual exchange rate, resulting in the achievement of $250.0 million of net sales of cabozantinib

Exelixis Third Quarter 2019 Financial Results
Page 4 of 8
October 30, 2019

cumulatively over four consecutive fiscal quarters, and triggering a $50.0 million milestone to Exelixis. The milestone was earned and recognized by Exelixis in the third quarter of 2019, with the receipt of the cash payment anticipated in the fourth quarter of 2019.

Expansion to Clinical Research Protocol for Phase 1b COSMIC-021 Trial. In July, Exelixis announced an amendment to the protocol for COSMIC-021, the phase 1b trial of cabozantinib in combination with TECENTRIQ (atezolizumab), an anti-PDL1 antibody discovered and developed by Genentech, Inc. (a member of the Roche Group), in patients with locally advanced or metastatic solid tumors. Based on preliminary encouraging activity and safety data, the original immunotherapy-refractory non-small cell lung cancer and metastatic castration-resistant prostate cancer (CRPC) cohorts were expanded to 80 patients each. In addition, four new cohorts – two expansion and two exploratory – in metastatic CRPC settings were added to the trial. There are now 24 total cohorts, with 20 cohorts evaluating the combination of cabozantinib and atezolizumab and four cohorts evaluating cabozantinib or atezolizumab as single-agent therapies, and the trial now has a targeted enrollment of up to 1,732 patients. The primary goal of COSMIC-021 remains to determine the objective response rate in each cohort.

Health Canada Approves CABOMETYX for First-Line Treatment of Adults with Advanced RCC. In October, Ipsen announced Health Canada’s approval of CABOMETYX for the first-line treatment of adults with advanced RCC. Under the collaboration agreement with Ipsen, Exelixis is eligible to receive a $3.0 million milestone for the Health Canada approval, which will be recognized as revenue in the fourth quarter of 2019. CABOMETYX was originally approved in Canada in September 2018 for the treatment of adults with advanced RCC who have received prior vascular endothelial growth factor targeted therapy.

Corporate Updates

Exelixis and Aurigene Enter into Exclusive Collaboration, Option and License Agreement to Discover and Develop Novel Therapies for Cancer. In July, Exelixis announced an exclusive collaboration, option and license agreement with Aurigene, an India-based biotechnology company focused on oncology and inflammatory disorders, to in-license as many as six programs. Under the terms of the agreement, Exelixis made an upfront payment of $10.0 million for exclusive options to license three preexisting programs from Aurigene. In addition, Exelixis and Aurigene selected three additional Aurigene-led drug discovery programs on mutually agreed upon targets, in exchange for additional option payments totaling $7.5 million. Exelixis will also contribute research funding to facilitate discovery and preclinical development work on all six programs.

Exelixis and Invenra, Inc. (Invenra) Expand Collaboration Focused on the Discovery and Development of Multispecific Antibodies for the Treatment of Cancer. In October, Exelixis expanded its collaboration with Invenra to include the development of novel binders against six additional targets. Under the terms of the expanded collaboration agreement, Exelixis will have the option to use these binders to generate multispecific antibodies based on Invenra’s B-Body technology platform, or with other platforms and formats, at Exelixis’ option.

Exelixis Files Lawsuit to Enforce Its Intellectual Property Rights for CABOMETYX against Abbreviated New Drug Application (ANDA) Filer. In October, Exelixis filed a patent infringement lawsuit against MSN Pharmaceuticals, Inc. (MSN), following receipt of a Paragraph IV certification notice letter from MSN that it had filed an ANDA with the FDA requesting approval to market a generic version of CABOMETYX tablets, following expiration of the CABOMETYX composition of matter patent, U.S. Patent No. 7,579,473, which expires on August 14, 2026. Exelixis is seeking, among other relief, an order that the effective date of any FDA approval of the ANDA would be a date no earlier than the expiration of U.S. Patent No. 8,877,776 on October 8, 2030 and equitable relief enjoining MSN from infringing this patent.

Exelixis Third Quarter 2019 Financial Results
Page 5 of 8
October 30, 2019

Basis of Presentation

Exelixis has adopted a 52- or 53-week fiscal year that generally ends on the Friday closest to December 31st. For convenience, references in this press release as of and for the fiscal periods ended September 27, 2019, December 28, 2018 and September 28, 2018 are indicated as being as of and for the periods ended September 30, 2019, December 31, 2018 and September 30, 2018, respectively.

Conference Call and Webcast

Exelixis management will discuss the company’s financial results for the third quarter of 2019 and provide a general business update during a conference call beginning at 5:00 p.m. EDT / 2:00 p.m. PDT today, Wednesday, October 30, 2019.

To access the webcast link, log onto www.exelixis.com and proceed to the News & Events / Event Calendar page under the Investors & Media heading. Please connect to the company’s website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to listen to the webcast. Alternatively, please call 855-793-2457 (domestic) or 631-485-4921 (international) and provide the conference call passcode 5489464 to join by phone.

A telephone replay will be available until 8:00 p.m. EDT on November 1, 2019. Access numbers for the telephone replay are: 855-859-2056 (domestic) and 404-537-3406 (international); the passcode is 5489464. A webcast replay will also be archived on www.exelixis.com for one year.

On October 30, 2019 argenx (Euronext & Nasdaq: ARGX), a clinical-stage biotechnology company developing a deep pipeline of differentiated antibody-based therapies for the treatment of severe autoimmune diseases and cancer, reported that management will participate in several upcoming investor conferences in November (Press release, argenx, OCT 30, 2019, View Source [SID1234550052]):

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2019 Wolfe Research Healthcare Conference. Company presentation on Wednesday, November 6, 2019 at 12:55 p.m. ET in New York.

28th Annual Credit Suisse Healthcare Conference. Management will participate in investor meetings on Wednesday, November 13, 2019 in Scottsdale, AZ.

Guggenheim Healthcare Talks | Idea Forum | Neuro / Immunology Day. Company presentation on Monday, November 18, 2019 at 3:15 p.m. ET in New York.

Stifel 2019 Healthcare Conference. Company presentation on Tuesday, November 19, 2019 at 10:55 a.m. ET in New York.

Live webcasts of each presentation will be available on the Company’s website at www.argenx.com. Replays of the webcasts will be available for 90 days following each presentation on the argenx website.

On October 30, 2019 Nektar Therapeutics (Nasdaq: NKTR) reported that it will announce its financial results for the third quarter on Wednesday, November 6, 2019, after the close of U.S.-based financial markets (Press release, Nektar Therapeutics, OCT 30, 2019, View Source [SID1234550068]). Howard Robin, President and Chief Executive Officer, will host a conference call to review the results beginning at 5:00 p.m. Eastern Standard Time/2:00 p.m. Pacific Standard Time.

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The press release and a live Webcast of the conference call can be accessed through a link that is posted on the home page and Investors section of the Nektar website: View Source The web broadcast of the conference call will be available for replay through Monday, December 9, 2019.

To access the conference call, follow these instructions:

Dial: (877) 881-2183 (U.S.); (970) 315-0453 (international)

Conference ID: 3079832 (Nektar Therapeutics is the host)

On October 31, 2019 Daiichi Sankyo Company, Limited (hereafter, Daiichi Sankyo) and Sarah Cannon Research Institute (Sarah Cannon) reported that the first patient has been dosed in a first-in-human phase 1/2 study evaluating DS-7300, an investigational B7-H3 targeting antibody drug conjugate (ADC), in patients with various advanced solid tumors that have progressed on standard treatments or for whom no standard treatment exists (Press release, Daiichi Sankyo, OCT 31, 2019, View Source [SID1234550087]).

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The study is the first in the strategic oncology partnership announced between Daiichi Sankyo and Sarah Cannon, designed to expedite and optimize global clinical development of Daiichi Sankyo’s novel ADCs and other targeted cancer therapies by combining the operational and scientific expertise of both organizations.

DS-7300 is the fourth ADC in clinical development utilizing Daiichi Sankyo’s proprietary DXd technology and was designed to target and deliver chemotherapy inside cancer cells that express the B7-H3 protein. B7-H3 is frequently overexpressed in various types of cancers and has been associated with disease progression and poor prognosis in many tumor types.[1] No B7-H3 targeting therapies are currently approved for treatment of any cancer.

"This first-in-human phase 1/2 trial will evaluate the potential for DS-7300 to serve as a new mode of targeted therapy for patients with several types of advanced cancers where the B7-H3 protein is overexpressed," said Antoine Yver, MD, MSc, EVP & Global Head of Oncology Research and Development, Daiichi Sankyo. "Based on our preclinical assessments, the trial will focus initially on patients with non-small cell lung, head and neck, esophageal, and other cancers. We also will continue to conduct important biomarker and translational research to further assess the role this promising therapeutic target may play in treatment of various cancers."

"Given the prevalence of B7-H3 in certain tumors, we hope this unique approach will help us to more effectively target a number of cancer types," said Johanna Bendell, MD, Chief Development Officer, Sarah Cannon. "By combining Sarah Cannon’s expertise in developing novel therapies and Daiichi Sankyo’s capabilities in compound development, we have been able to expand our reach to patients across the U.S. and Japan who vitally need advanced treatment options."

B7-H3 (B7 homologue 3) is a transmembrane protein belonging to the B7 family. B7-H3 plays a role in tumor growth as well as in immune response.1,[2] B7-H3 is highly expressed on various types of tumors including lung, head and neck, esophageal, prostate, endometrial and breast cancers.1 In preclinical studies, DS-7300 demonstrated activity in B7-H3 expressing tumors, and activity was associated with target expression levels.

Based on initial preclinical research into the construct necessary for optimized safety and efficacy in B7-H3 expressing tumors, DS-7300 was engineered with a new proprietary Daiichi Sankyo technology, DAR-controlled conjugation, to create a drug-to-antibody ratio (DAR) of four. The technology has been used also to prepare DS-1062, Daiichi Sankyo’s TROP2 ADC under clinical development in patients with NSCLC who have failed standard of care, including immune checkpoint inhibitors.

About the Study
The first-in-human, open-label phase 1/2 study will investigate the safety, tolerability and preliminary activity of DS-7300 in adult patients with advanced/unresectable or metastatic solid tumors that are refractory or intolerable to standard treatment or for whom no standard treatment exists.

The first part of the study (dose escalation) will assess the safety and tolerability of increasing doses of DS-7300 to determine the maximum tolerated dose (MTD) and recommended dose for expansion (RDE). This portion of the trial will enroll approximately 40 patients with advanced/unresectable or metastatic squamous cell head and neck cancers, squamous cell esophageal cancer, squamous and adenocarcinoma cell non-small cell lung cancer (NSCLC), and other tumor types (ten total). The second part of the study (dose expansion) will evaluate the safety, tolerability and preliminary activity of DS-7300 at the RDE and assess overall survival. This portion of the trial will include three cohorts of 40 patients each, potentially including patients with advanced/unresectable or metastatic squamous cell head and neck cancers, squamous cell esophageal cancer, and squamous NSCLC. Additional or alternative indications may be added to expansion cohorts based on preliminary signals of activity.

The study will evaluate safety endpoints including adverse events and efficacy endpoints including objective-response rate, duration of response, disease control rate, time to response, progression-free survival, and overall survival. Pharmacokinetic endpoints and exploratory biomarker and immunogenicity endpoints will also be assessed.

A total of approximately 160 patients are expected to be enrolled in this study in the U.S. and Japan. For more information, please visit ClinicalTrials.gov

About DS-7300
DS-7300 is an investigational B7-H3 targeting ADC and one of four ADCs under clinical development in Daiichi Sankyo’s Cancer Enterprise pipeline. ADCs are targeted cancer medicines that deliver cytotoxic chemotherapy ("payload") to cancer cells via a linker attached to a monoclonal antibody that binds to a specific target expressed on cancer cells. Designed using Daiichi Sankyo’s proprietary DXd ADC technology, DS-7300 is comprised of a humanized anti-B7-H3 monoclonal antibody, which is attached to a novel topoisomerase I inhibitor payload by a tetrapeptide-based linker. It is designed to target and deliver chemotherapy inside cancer cells and reduce systemic exposure to the cytotoxic payload (or chemotherapy) compared to the way chemotherapy is commonly delivered.

DS-7300 is an investigational agent that has not been approved for any indication in any country. Safety and efficacy have not been established.

About Daiichi Sankyo Cancer Enterprise
The mission of Daiichi Sankyo Cancer Enterprise is to leverage our world-class, innovative science and push beyond traditional thinking to create meaningful treatments for patients with cancer. We are dedicated to transforming science into value for patients, and this sense of obligation informs everything we do. Anchored by three pillars including our investigational Antibody Drug Conjugate Franchise, Acute Myeloid Leukemia Franchise and Breakthrough Science, we aim to deliver seven distinct new molecular entities over eight years during 2018 to 2025. Our powerful research engines include two laboratories for biologic/immuno-oncology and small molecules in Japan, and Plexxikon Inc., our small molecule structure-guided R&D center in Berkeley, CA. For more information, please visit: www.DSCancerEnterprise.com.