On February 27, 2019 Tocagen Inc. (Nasdaq: TOCA), a clinical-stage, cancer-selective gene therapy company, reported financial results and business highlights for the fourth quarter and full year ended December 31, 2018 (Press release, Tocagen, FEB 27, 2019, View Source [SID1234533808]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We had a very strong close to the year, accomplishing all of our 2018 business goals. In particular, NRG Oncology’s selection of Toca 511 & Toca FC for a Phase 2/3 trial in newly diagnosed glioblastoma was a major accomplishment for our team and we look forward to initiating this trial in late 2019. Expansion of our late-stage cancer-selective gene therapy program regimen into the front-line indication could pave the way to having a greater impact on more patients in the years ahead," said Marty Duvall, chief executive officer of Tocagen. "Furthermore, having ended the year with approximately $96 million in cash, we have a favorable financial position as we look towards the results in 2019 from our Phase 3 Toca 5 trial in recurrent high grade glioma and build for success going into 2020."

Fourth Quarter 2018 Highlights

NRG Oncology, a member of the National Cancer Institute’s National Clinical Trial Network, announced in November 2018 plans to conduct and sponsor a clinical trial to evaluate Toca 511 & Toca FC for the treatment of patients with newly diagnosed glioblastoma (GBM). The proposed NRG-BN006 Phase 2/3 trial will be the first clinical trial of the Toca 511 & Toca FC regimen in the newly diagnosed GBM setting, and is expected to commence in late 2019. NRG Oncology conducts practice-defining, multi-institutional trials funded primarily by the NCI.

Under Tocagen’s PRIME (PRIority MEdicines) designation for Toca 511 & Toca FC, the European Medicines Agency indicated that the statistical analyses, seamless design and use of overall survival as the primary endpoint in the ongoing Phase 3 Toca 5 clinical trial are appropriate for a potential marketing authorization applications for Toca 511 & Toca FC in Europe.

Tocagen presented clinical and preclinical data at congresses hosted by the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) and Society for Neuro-Oncology (SNO). We identified immunologic biomarkers in our clinical trials that may help predict patient outcomes following treatment with Toca 511 & Toca FC, and preclinical studies demonstrated the additive benefits of combining Toca 511 & Toca FC with chemotherapy.

In December 2018, Tocagen raised $30.0 million of gross proceeds in an underwritten public offering of its common stock.

2019 Milestones

Toca 5 second interim analysis expected in the second quarter of 2019

Toca 5 final analysis planned for the fourth quarter of 2019

Prepare to initiate a rolling biologics license application (BLA) for Toca 511 & Toca FC in recurrent high grade glioma

Build U.S. commercial team for potential launch of Toca 511 & Toca FC

NRG Oncology to initiate NRG-BN006 clinical trial evaluating Toca 511 & Toca FC in newly diagnosed GBM in late 2019

Report updated Toca 6 safety and immune activity data in advanced solid tumors

Fourth Quarter 2018 Financial Results

Research and Development (R&D) Expenses: R&D expenses were $15.6 million for the quarter ended December 31, 2018, compared to $8.3 million for the quarter ended December 31, 2017. The R&D expenses in both periods were primarily driven by costs to support the Toca 5 trial and to support the manufacturing of drug product. The increase in 2018 reflects primarily higher manufacturing spend as compared to the same period in 2017.

General and Administrative (G&A) Expenses: G&A expenses were $3.5 million for the quarter ended December 31, 2018, compared to $2.4 million for the quarter ended December 31, 2017. The increase in G&A expenses was primarily due to higher costs to support increased operations activity.

Net Loss: Net loss was $19.6 million, or $0.96 per common share (basic and diluted), for the quarter ended December 31, 2018, compared to a net loss of $10.8 million, or $0.55 per common share (basic and diluted), for the quarter ended December 31, 2017. The 2018 calculation is based on 20.5 million average common shares outstanding for the fourth quarter of 2018, compared to 19.8 million average common shares outstanding for the fourth quarter of 2017.

2018 Twelve-Month Results

License Revenue: License revenue was $18.0 million for the 12 months ended December 31, 2018, compared to less than $0.1 million for the 12 months ended December 31, 2017. The 2018 revenue was associated with a $16.0 million upfront payment and a $2.0 million development milestone earned upon completion of enrollment in the Toca 5 clinical study, both recognized under Tocagen’s license agreement with ApolloBio.

R&D Expenses: R&D expenses were $51.1 million for the 12 months ended December 31, 2018, compared to $29.1 million for the 12 months ended December 31, 2017. The increase in R&D expenses primarily reflects increased costs in manufacturing and our Toca 5 clinical trial.

G&A Expenses: G&A expenses were $12.8 million for the 12 months ended December 31, 2018, compared to $8.6 million for the 12 months ended December 31, 2017, with the increase primarily driven by higher personnel costs and costs to support increased operations activity.

Net Loss: Net loss was $49.0 million, or $2.44 per common share (basic and diluted), for the 12 months ended December 31, 2018, compared to a net loss of $38.9 million, or $2.66 per common share (basic and diluted), for the 12 months ended December 31, 2017. The 2018 calculation is based on 20.1 million average common shares outstanding for the 12 months ended December 31, 2018, compared to 14.6 million average common shares outstanding for the prior year.

Cash Position and Guidance

Cash, cash equivalents and marketable securities were $96.1 million at December 31, 2018 compared to $88.7 million at December 31, 2017. Total gross cash burn to support operations was $51.3 million for the year ended December 31, 2018. Based on current operating plans, Tocagen estimates the total cash used in 2019 to fund operations and capital expenditures will be approximately $65 million.

About Toca 511 & Toca FC

Tocagen’s lead product candidate is a two-part cancer-selective immunotherapy comprising an investigational biologic, Toca 511 (vocimagene amiretrorepvec), and an investigational small molecule, Toca FC (flucytosine, extended-release). Toca 511 is a retroviral replicating vector (RRV) that selectively infects cancer cells and delivers a gene for the enzyme, cytosine deaminase (CD). Through this targeted delivery, infected cancer cells carry the CD gene and produce CD. Toca FC is an orally administered prodrug, 5-fluorocytosine (5-FC), which is converted into an anti-cancer drug, 5-fluorouracil (5-FU), when it encounters CD. 5-FU kills cancer cells and immune-suppressive myeloid cells resulting in anti-cancer immune activation and subsequent tumor killing.

On February 27, 2019 Aprea Therapeutics, a clinical-stage biotechnology company developing novel anticancer therapies targeting the p53 tumor suppressor protein, reported that funds managed by Janus Henderson Investors joined its Series C financing as a new investor, raising the total amount of the financing to EUR 55 million (Press release, Aprea, FEB 27, 2019, View Source [SID1234535073]). Janus Henderson Investors joins the financing round closed in November, 2018 and led by Redmile Group, with participation by Rock Springs Capital and existing investors: 5AM Ventures, Versant Ventures, HealthCap, Sectoral Asset Management and Karolinska Development AB (Nasdaq Stockholm: KDEV).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The addition of Janus to our investor group further broadens our US investor base and better positions the company to both advance its clinical strategy in hematological malignancies and take advantage of future strategic opportunities," said Christian S. Schade, President and Chief Executive Officer of Aprea Therapeutics.

Proceeds from the financing will be used to advance the clinical development of APR-246, a first-in-class anticancer agent that reactivates mutated p53 tumor suppressor protein. Aprea has commenced a Phase 3 clinical study in myelodysplastic syndromes (MDS) and has completed enrollment in a Phase Ib/II clinical trial in p53 mutated high-risk myelodysplastic syndromes (MDS) and oligoblastic acute myeloid leukemia (AML) with APR-246 and azacitidine. Additional studies in MDS and AML are underway and in planning with other approved agents.

About Myelodysplastic Syndromes

Myelodysplastic syndromes (MDS) represents a spectrum of hematopoietic stem cell malignancies in which bone marrow fails to produce sufficient numbers of healthy blood cells. Approximately 30-40% of MDS patients progress to acute myeloid leukemia (AML) and mutation of the p53 tumor suppressor protein is thought to contribute to disease progression. Mutations in p53 are found in up to 20% of MDS and AML patients and are associated with poor overall prognosis.

About p53 and APR-246

The p53 tumor suppressor gene is the most frequently mutated gene in human cancer, occurring in approximately 50% of all human tumors. These mutations are often associated with resistance to anti-cancer drugs and poor overall survival, representing a major unmet medical need in the treatment of cancer.

APR-246 has been shown to reactivate mutant and inactivated p53 protein – by restoring wild-type p53 conformation and function – and thereby induce programmed cell death in human cancer cells. APR-246 has demonstrated pre-clinical anti-tumor activity in a wide variety of solid and hematological (blood) tumors, including MDS, AML, and ovarian cancer, among others. Additionally, strong synergy has been seen with both traditional anti-cancer agents, such as chemotherapy, as well as newer mechanism-based anti-cancer drugs and immuno-oncology checkpoint inhibitors. In addition to pre-clinical testing, a Phase I/II clinical program with APR-246 has been completed, demonstrating a favorable safety profile and both biological and confirmed clinical responses in hematological malignancies and solid tumors with mutations in the TP53 gene.

On February 27, 2019 Jounce Therapeutics, Inc. (NASDAQ: JNCE), a clinical-stage company focused on the discovery and development of novel cancer immunotherapies and predictive biomarkers, reported that data from its Phase 1/2 ICONIC trial, an open label trial evaluating JTX-2011 monotherapy and in combination with nivolumab, will be the subject of two poster presentations at the upcoming 2019 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting at the Georgia World Congress Center in Atlanta, GA on March 31- April 3, 2019 (Press release, Jounce Therapeutics, FEB 27, 2019, View Source [SID1234535390]). In addition, Jounce Therapeutics will present a poster that will describe the preclinical evaluation of JTX-8064, a highly specific monoclonal antibody that aims to reprogram human macrophages from an immune suppressive to immune active state by inhibiting the cell surface receptor LILRB2.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The JTX-2011 clinical data being presented show that ICONIC patients with emergence of ICOS hi CD4 T cells in the peripheral blood have improved progression free and overall survival. This finding further validates the role of this ICOS pharmacodynamic biomarker in directing the next stage of the clinical development strategy for JTX-2011. Establishing the importance of this biomarker and its association with improved survival leads us to two distinct paths; first, combination with other agents that are known to induce ICOS hi CD4 T cells which JTX-2011 may then further stimulate; and second, using candidate predictive biomarkers identified through analysis of baseline samples of patients with and without emergence of these cells," said Elizabeth Trehu, M.D., chief medical officer of Jounce Therapeutics. "In addition to the data from our JTX-2011 program, we will also highlight JTX-8064 and the preclinical evaluation of this novel product candidate and its role in reprogramming tumor-associated macrophages within the tumor microenvironment."

JTX-2011 Posters Details:
Improved progression-free and overall survival (PFS/OS) in patients (pts) with emergence of JTX-2011 associated biomarker (ICOS high CD4 T cells) on the ICONIC trial
Session Title: Phase II-III Clinical Trials: Part 2
Location: Exhibit Hall B, Poster Section 16
Date and Time: Tuesday April 2, 20191:00 PM – 5:00 PM ET
Poster Board Number: 3; Permanent Abstract Number: CT189

Genetic and molecular profiling of ICOS hi CD4 T cells demonstrates clonal expansion of TH1 effector cells following JTX-2011 treatment in subjects with solid tumors
Session Title: Biomarkers and Immune Monitoring
Location: Exhibit Hall B, Poster Section 22
Date and Time: Tuesday April 2, 20191:00 PM – 5:00 PM ET
Poster Board Number: 16; Permanent Abstract Number: 4053

JTX-8064 Poster Details:
Preclinical evaluation of JTX-8064, an anti-LILRB2 antagonist antibody, for reprogramming tumor-associated macrophages
Session Title: Tumor Immune Microenvironment
Location: Exhibit Hall B, Poster Section 25
Date and Time: Wednesday April 3, 20198:00 AM – 12:00 PM ET
Poster Board Number: 1; Permanent Abstract Number: 5007

The posters will be available at the start of each session on the "Our Approach" section of the Jounce Therapeutics website at www.jouncetx.com.

Jounce Therapeutics to Host Event and Webcast
Jounce Therapeutics will host an investor and analyst event beginning at 6:30 p.m. ET and live webcast beginning at 7:00 p.m. ET, on Tuesday, April 2, 2019. To access the live webcast, please visit the "Events & Presentations" page in the Investors and Media section of the company’s website at www.jouncetx.com. The webcast will be archived and made available for replay on the company’s website approximately two hours after the call and will be available for 30 days thereafter.

About JTX-2011
Jounce’s lead product candidate, JTX-2011, is a monoclonal antibody that binds to and activates ICOS, a protein on the surface of certain T cells. The company is developing JTX-2011 to treat solid tumors as a single agent and in combination with other therapies.

About JTX-8064
JTX-8064 is an anti-Leukocyte Immunoglobulin Like Receptor B2 (LILRB2) antibody and is the first candidate to emerge from Jounce’s Translational Science Platform efforts that focuses on tumor-associated macrophages. JTX-8064 is currently in IND-enabling activities and Jounce anticipates filing an IND and initiating a Phase 1 clinical trial for JTX-8064 in 2019.

On February 27, 2019 Nordic Nanovector ASA (OSE: NANO) reported its results for the fourth quarter and full year 2018 (Press release, Nordic Nanovector, FEB 27, 2019, View Source;results-for-the-fourth-quarter-and-full-year-2018-300802989.html [SID1234533702]). A presentation by the company’s senior management team will take place today in Oslo at 08:30 CET, see details below.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Eduardo Bravo, CEO, commented:

"We believe we have made solid progress during 2018 advancing the key clinical development programmes for Betalutin as a single agent and in combination with rituximab in non-Hodgkin’s lymphoma patients. The latest results from the LYMRIT 37-01 trial, presented at ASH (Free ASH Whitepaper) in December, continue to highlight strong clinical profiles of two dosing regimens that we are now testing in the pivotal PARADIGME trial. Furthermore, the recent financing enables us to expand our preparatory activities for the future commercialisation of our exciting lead asset, pending completion of PARADIGME and successful regulatory review. Our clear priority for the coming year is on recruiting patients into PARADIGME to ensure we can achieve our goal of data read-out in the first half of 2020."

Q4’18 Highlights

• Updated results from Phase 1/2 LYMRIT 37-01 demonstrating that single-administration Betalutin is effective and well-tolerated in relapsed/refractory indolent non-Hodgkin’s lymphoma (R/R iNHL) patients reported at ASH (Free ASH Whitepaper) (December)

• Pivotal Phase 2b PARADIGME trial progressing with 69 (of 80-85) sites in 23 countries open for enrolment, as of 26 February 2019, including the first site in the US

• Promising Innovative Medicine (PIM) designation (October) in the UK granted for the treatment of advanced R/R FL, adding to US Fast Track designation (granted in June)

• First patient dosed in Phase 1b Archer-1 trial of Betalutin in combination with rituximab in second-line (2L) FL patients (November)

• Promising results from an R&D collaboration to develop a CD37-targeted alpha therapy published at ASH (Free ASH Whitepaper)

Events after Q4’18

• Approximately NOK 222 million (USD 26m) (gross) raised in an oversubscribed private placement which provides funds to support manufacturing and other activities in preparation for the commercialisation of Betalutin

• Jan H. Egberts, M.D. elected new Chairman, succeeding Ludvik Sandnes who stepped down from the board of directors

• Dr Mark Wright appointed as Head of Manufacturing to lead production of Betalutin for clinical trials and future commercialisation, and of CD37-targeting candidates emerging from the company’s pipeline

Financial Highlights Q4 and FY’18

(Figures in brackets = same period 2017 unless otherwise stated)

• Revenues for the fourth quarter amounted to NOK 0.0 million (NOK 0.05 million). Revenues for the full year 2018 were NOK 0.0 million (NOK 0.3 million).

• Total operating expenses for the fourth quarter were NOK 96.3 million (NOK 102.0 million). Total operating expenses for the full year 2018 amounted to NOK 340.0 million (NOK 316.8 million).

• Comprehensive loss for the fourth quarter amounted to NOK 87.7 million (loss of NOK 87.6 million). Comprehensive loss for the full year 2017 was NOK 336.8 million (NOK 295.6 million).

• Cash and cash equivalents amounted to NOK 440.1 million at the end of December 2018 (NOK 756.6 million).

Outlook

Nordic Nanovector aspires to become a leader in the field of targeted therapies for haematological cancers by developing, manufacturing and commercialising innovative therapies to address major unmet medical needs and advance cancer care.

Betalutin, the company’s most advanced product candidate, has a highly differentiated, competitive, clinical profile for R/R FL, based on the promising results from the LYMRIT 37-01 Phase 1/2 clinical study. The company’s pivotal Phase 2b PARADIGME trial with a once-only administration of Betalutin in 3L R/R FL is underway with the initial clinical data read-out targeted for 1H 2020 and subsequent filing in 2020 for marketing approval.

Nordic Nanovector intends to maximize the value of Betalutin and other CD37-targeting opportunities across other stages of FL, NHL and other haematological cancer indications.

The company is confident that Betalutin could become an attractive and convenient therapeutic option, which, based on detailed market research, has the potential to be commercially successful.

Current cash resources are expected to be sufficient to reach data read-out from PARADIGME in the first half of 2020.

Presentation and webcast – Q4 and Full Year 2018 results

A presentation by Nordic Nanovector’s senior management team will take place today at 8:30 am CET at:

Thon Hotel Vika Atrium, Munkedamsveien 45, 0250 Oslo

Meeting Room: AKER

The presentation will be recorded as a webcast and will be available at www.nordicnanovector.com in the section: Investors & Media

The results report and the presentation is available at www.nordicnanovector.com in the section: Investors & Media/Reports and Presentation/Interim Reports/2018.

For further information, please contact:

IR enquiries

Malene Brondberg, VP Investor Relations and Corporate Communications

Cell: +44-7561-431-62

Email: [email protected]

Media Enquiries

Mark Swallow/David Dible (Citigate Dewe Rogerson)

Tel: +44-207-638-9571

Email: [email protected]

on February 27, 2019 Horizon Pharma plc (Nasdaq: HZNP) reported its fourth-quarter and full-year 2018 financial results and provided its full-year 2019 net sales and adjusted EBITDA guidance (Press release, Horizon Pharma, FEB 27, 2019, View Source [SID1234533746]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"2018 was a year of exceptional progress – in addition to generating total company net sales growth of 14 percent, we executed on our strategic objectives – advancing our pipeline and driving net sales growth of KRYSTEXXA, which increased 65 percent," said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. "We enrolled the Phase 3 trial of our biologic candidate teprotumumab well ahead of schedule and are now expecting top-line data by the end of the first quarter.

"We are building on the momentum we established in 2018 and expect continued strong commercial execution across our operating segments," continued Walbert. "We plan to submit our biologics license application for teprotumumab in mid-2019 if the clinical data is positive and expect to initiate two important clinical trials for KRYSTEXXA, with the MIRROR trial initiating in the second quarter and a new study in kidney transplant patients with uncontrolled gout beginning in the second half of 2019."

Fourth-Quarter and Recent Company Highlights

Accelerated Teprotumumab Phase 3 Top-Line Data Read-Out Timeline: The Company announced in January that it expects top-line data results for its pivotal teprotumumab Phase 3 confirmatory trial, OPTIC (Treatment of Graves’ Orbitopathy (Thyroid Eye Disease) to Reduce Proptosis with Teprotumumab Infusions in a Randomized, Placebo-Controlled, Clinical Study), by the end of first quarter of 2019. This is accelerated from the initial second quarter of 2019 timeline, and the Company is tracking to a mid-2019 biologics license application (BLA) submission.

Teprotumumab is a fully human monoclonal antibody insulin-like growth factor-1 receptor (IGF-1R) inhibitor in Phase 3 development for the treatment of thyroid eye disease (TED), in which the muscles and fatty tissue behind the eye expand and become inflamed, which can lead to proptosis (eye bulging) and diplopia (double vision) as well as quality-of-life issues.
Phase 2 Teprotumumab Data Presented at American Thyroid Association (ATA)and American Academy of Ophthalmology (AAO) Meetings: Additional data for the pivotal Phase 2 teprotumumab trial presented at ATA and AAO demonstrated durability of the Phase 2 trial 48 weeks following the end of the treatment period (Week 24) and nearly a year off therapy. At Week 24, 71.4 percent (30 of 42) of patients responded with reductions of ≥2mm in proptosis and 61.9 percent of patients (26 of 42) responded with improvement of at least one grade in diplopia, both of which are considered a clinically meaningful change. At Week 72, 48 weeks following the study completion and nearly a year off therapy, 53.3 percent of the Week 24 proptosis responders maintained the reductions and 69.2 percent of patients with diplopia improvement maintained the benefit. These results demonstrate that teprotumumab has the potential to be the first and only disease-modifying therapy for thyroid eye disease.
New KRYSTEXXA Study in Kidney Transplant Patients with Uncontrolled Gout: The Company is announcing today that it plans to initiate a clinical trial in the second half of 2019 evaluating the effect of KRYSTEXXA, the Company’s medicine for uncontrolled gout, on serum uric acid levels in kidney transplant patients with uncontrolled gout (uncontrolled gout is chronic gout that is refractory to conventional therapies). Kidney transplant patients have more than a tenfold increase in the prevalence of gout when compared to the general population, and literature suggests that high serum uric acid levels are associated with organ rejection. Managing uncontrolled gout is one of the most common and significant unmet needs of kidney transplant patients.
New KRYSTEXXA Immunomodulation Data Presented at American College of Rheumatology/ Association of Rheumatology Health Professionals (ACR) Meeting: At the October 2018 ACR meeting, external investigators shared results from a case series of nine sequential patients with uncontrolled gout, evaluating the administration of KRYSTEXXA with the immunomodulator methotrexate to improve the durability of KRYSTEXXA response. The study stated that of the nine patients followed out to five months, all nine were responders as defined by >80 percent of serum uric acid levels being maintained at goal <6.0 mg/dL during the observation period.
Expanded Indication for RAVICTI: The Company received U.S. Food and Drug Administration (FDA) approval in December to expand the age range for chronic management of urea cycle disorders to birth and older from the previous age range of two months of age and older.
Recent Business Development Initiatives: On Dec. 28, 2018, the Company sold the rights to RAVICTI and AMMONAPS outside of North America and Japan to Medical Need Europe AB for $35 million. In addition, effective Jan. 1, 2019, the RAYOS and LODOTRA license and supply agreements were amended, including the transfer of LODOTRA to Vectura Group plc, the current third-party supplier. Beginning in 2019, the Company will no longer recognize revenue from RAVICTI and AMMONAPS sales outside of North America and Japan, or from sales of LODOTRA. AMMONAPS is known as BUPHENYL and LODOTRA is known as RAYOS in the United States.
Research and Development Programs

Orphan Candidate and Program:

Teprotumumab: The pivotal Phase 3 confirmatory study, OPTIC, is evaluating teprotumumab for the treatment of TED, which has no FDA-approved treatments. OPTIC completed enrollment September of 2018, ahead of the year-end target, and top-line results are expected by the end of first-quarter 2019. OPTIC-X, a 48-week extension study in which participants may receive up to eight additional infusions of teprotumumab, continues to enroll patients. The objective of OPTIC-X is to evaluate the potential for retreatment as well as longer duration of treatment with teprotumumab.
Rheumatology Pipeline Candidates and Programs:

KRYSTEXXA Study in Kidney Transplant Patients: The Company plans to initiate a clinical trial in the second half of 2019 evaluating the effect of KRYSTEXXA on serum uric acid levels in kidney transplant patients with uncontrolled gout. Kidney transplant patients have more than a tenfold increase in the prevalence of gout when compared to the general population, and literature suggests that high serum uric acid levels are associated with organ rejection. Managing uncontrolled gout is one of the most common and significant unmet needs of kidney transplant patients.
KRYSTEXXA Immunomodulation Study: The Company is evaluating the use of methotrexate to enhance the response rate to KRYSTEXXA through its MIRROR (Methotrexate to Increase Response Rates in Patients with UncontrolledGOut Receiving KRYSTEXXA) open-label study. Methotrexate, the immunomodulator most commonly used by rheumatologists, has been shown to reduce anti-drug antibodies when combined with other biologics. The Company is adapting MIRROR’s trial design to support the potential for registration, with enrollment expected to begin in the second quarter of 2019.
Next-generation Biologic Programs for Uncontrolled Gout: The Company is pursuing two development programs for next-generation biologics for uncontrolled gout, HZN-003 and PASylated uricase technology, to support and sustain the Company’s market leadership in uncontrolled gout. The programs are exploring the use of optimized uricase technology coupled with optimized PEGylation or PASylation technology, to improve the molecule’s half-life, with the potential for subcutaneous dosing.
Augmented Rheumatology Pipeline with HemoShear Collaboration: The Company is collaborating with HemoShear Therapeutics, LLC, a privately held biotechnology company, to discover and develop novel therapeutics for gout.
Fourth-Quarter Financial Results

Note:For additional detail and reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, please refer to the tables at the end of this release.

Net Sales: Fourth-quarter 2018 net sales were $355.5 million, an increase of 30 percent, driven by continued strong growth of the Company’s orphan and rheumatology segment.
Gross Profit: Under U.S. GAAP, the fourth-quarter 2018 gross profit ratio was 69.2 percent compared to 47.8 percent in the fourth quarter of 2017. The non-GAAP gross profit ratio in the fourth quarter of 2018 was 89.1 percent compared to 89.3 percent in the fourth quarter of 2017.
Operating Expenses: Research and development (R&D) expenses were 5.5 percent of net sales and selling, general and administrative (SG&A) expenses were 49.1 percent of net sales. Non-GAAP R&D expenses were 5.3 percent of net sales and non-GAAP SG&A expenses were 41.4 percent of net sales.
Income Tax Rate: In the fourth quarter of 2018, the income tax benefit rate on a GAAP basis was 114.9 percent and the income tax expense rate on a non-GAAP basis was 8.2 percent.
Net Income: On a GAAP basis in the fourth quarter of 2018, net income was $87.6 million. Fourth-quarter 2018 non-GAAP net income was $116.8 million.
Adjusted EBITDA: Fourth-quarter 2018 adjusted EBITDA was $151.1 million.
Earnings (Loss) per Share: On a GAAP basis in the fourth quarter of 2018, diluted earnings per share were $0.50 versus a diluted loss per share of $0.23 in the fourth quarter of 2017. Non-GAAP diluted earnings per share in the fourth quarter of 2018 and 2017 were $0.67 and $0.29, respectively. Weighted average shares outstanding used for calculating GAAP and non-GAAP diluted earnings per share in the fourth quarter of 2018 were 174.2 million.
Fourth-Quarter Segment Results

Management uses net sales and segment operating income to evaluate the performance of the Company’s two segments. While segment operating income contains certain adjustments to the directly comparable GAAP figures in the Company’s consolidated financial results, it is considered to be prepared in accordance with GAAP for purposes of presenting the Company’s segment operating results.

(1)On Jun. 23, 2017, Horizon Pharma completed the divestiture of a European subsidiary that owned the marketing rights to PROCYSBI and QUINSAIR in Europe, the Middle East and Africa (EMEA) to Chiesi Farmaceutici S.p.A. Horizon Pharma retains marketing rights for the two medicines in the United States, Canada, Latin America and Asia. Horizon Pharma’s 2017 net sales of PROCYSBI and QUINSAIR in EMEA were $9.5 million.

Fourth-quarter 2018 net sales of the orphan and rheumatology segment were $237.6 million, an increase of 33 percent over the prior year’s quarter, driven by continued strong KRYSTEXXA growth as well as growth of RAVICTI, PROCYSBI and RAYOS. Fourth-quarter 2018 orphan and rheumatology segment operating income was $84.8 million, an increase of 39 percent.
For the full-year 2018, KRYSTEXXA net sales of $258.9 million represented a 65 percent year-over-year increase, in line with the Company’s expectation.
On Dec. 28, 2018, the Company sold the rights to RAVICTI and AMMONAPS (AMMONAPS is known as BUPHENYL and LODOTRA is known as RAYOS in the United States) outside of North America and Japan to Medical Need Europe AB for $35.0 million. In addition, effective Jan. 1, 2019, the RAYOS and LODOTRA license and supply agreements were amended, including the transfer of LODOTRA to Vectura Group plc, the current third-party supplier. Beginning in 2019, the Company will no longer recognize revenue from RAVICTI and AMMONAPS sales outside of North America and Japan, or from sales of LODOTRA.

Fourth-quarter 2018 net sales of the primary care segment were $117.9 million and operating income was $66.2 million.
Cash Flow Statement and Balance Sheet Highlights

On a GAAP basis in the fourth quarter of 2018, operating cash flow was $108.7 million. Non-GAAP operating cash flow was $115.1 million.
The Company had cash and cash equivalents of $958.7 million as of Dec. 31, 2018.
As of Dec. 31, 2018, the total principal amount of debt outstanding was $1.993 billion, which consisted of $818 million in senior secured term loans due 2024; $300 million senior notes due 2024; $475 million senior notes due 2023 and $400 million exchangeable senior notes due 2022. As of Dec. 31, 2018, net debt was $1.034 billion and our net-debt-to-last-12-months adjusted EBITDA leverage ratio was 2.3 times.
2019 Guidance

The Company expects full‐year 2019 net sales to range between $1.23 billion and $1.25 billion and full‐year 2019 adjusted EBITDA is expected to range between $440 million and $455 million, reflecting investment in preparation for the potential U.S. launch of teprotumumab and continued R&D pipeline programs to drive long-term growth.

Webcast

At 8 a.m. EST / 1 p.m. IST today, the Company will host a live webcast to review its financial and operating results and provide a general business update. The live webcast and a replay may be accessed at View Source Please connect to the Company’s website 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. A replay of the webcast will be available approximately two hours after the live webcast.