On November 7, 2019 Triple-S Management Corporation (NYSE: GTS), a leading managed care company in Puerto Rico, reported its third quarter 2019 results (Press release, Triple-S Management, NOV 7, 2019, https://www.prnewswire.com/news-releases/triple-s-management-corporation-reports-third-quarter-2019-results-300953651.html [SID1234550706]).

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Quarterly Consolidated and Other Highlights

Net income of $13.9 million, or $0.58 per diluted share, versus net loss of $17.6 million, or $0.77 per share, in the prior-year period;
Adjusted net income of $12.1 million, or $0.51 per diluted share, versus adjusted net loss of $22.2 million, or $0.97 per share, in the prior-year period;
Operating revenues of $836.0 million, a 9.4% increase from the prior-year period, primarily reflecting higher Managed Care net premiums earned;
Consolidated loss ratio decreased 400 basis points to 83.4% versus the third quarter of 2018; this results from the unfavorable reserve development related to Hurricane Maria claims recognized by the Property and Casualty ("P&C") segment in the prior-year period;
Medical loss ratio ("MLR") increased 320 basis points to 86.4%;
Consolidated operating income was $19.0 million, compared to consolidated operating loss of $25.6 million in the prior-year period;
Expansion of share repurchase program to $25 million of availability, approved subsequent to quarter end.
"We had a solid third quarter, mainly driven by year-over-year growth in Medicare premiums and valuable bottom line contributions from our Life and P&C segments," said Roberto Garcia-Rodriguez, President and Chief Executive Officer. "We’ve continued strengthening our product offerings, improving the overall quality of service, and advancing our goal of creating a unique and optimal member experience."

"With respect to our P&C segment, our quarterly review of outstanding claims reaffirms our belief that our reserves remain adequate as of September 30, 2019," added Mr. Garcia-Rodriguez. "Given our confidence in the Company’s long-term strategy and our belief that its stock is undervalued, our Board has expanded our share repurchase program’s availability to $25 million. We anticipate commencing repurchases under the program during the week of November 11, 2019."

Selected Consolidated Quarterly Details

Consolidated net premiums earned were $815.0 million, up 9.8% from the prior-year period, primarily reflecting higher average premium rates within the Managed Care segment and an increase in membership in the Medicare and fully insured Commercial businesses. The increase was partially offset by lower Medicaid membership.
Consolidated claims incurred were $680.0 million, up 4.8% year-over-year. Consolidated loss ratio of 83.4% improved 400 basis points from the prior-year period, driven by the $52.3 million unfavorable prior period reserve development related to Hurricane Maria recognized by the P&C segment in the third quarter of 2018 that did not recur in the third quarter of 2019.
Consolidated operating expenses of $136.9 million decreased by $4.1 million, or 2.9%, from the prior-year period, primarily resulting from savings due to the suspension in 2019 of the HIP Fee, partially offset by higher personnel costs and commission expense. The Company’s operating expense ratio improved 220 basis points year-over-year to 16.7%, mostly driven by the increase in premiums during the third quarter of 2019.
Consolidated income tax expense was $5.9 million, compared to an income tax benefit of $3.4 million in the prior-year period. The income tax benefit in the third quarter of 2018 mainly reflects the loss before taxes in that period incurred by the P&C segment.
Selected Managed Care Segment Quarterly Details

Managed Care premiums earned were $746.5 million, up 9.7% year over year.
Medicare premiums earned of $367.1 million increased 29.4% from the prior-year period, largely due to an increase of approximately 52,000 member months and higher average premium rates, primarily reflecting a more competitive product offering and an increase in the average membership risk score.
Commercial premiums earned of $203.1 million increased 2.9% from the prior-year period, mainly reflecting higher fully insured enrollment during the quarter of approximately 25,000 member months and higher average premium rates, partially offset by the suspension of the HIP Fee pass-through in 2019.
Medicaid premiums earned decreased 11.8% from the prior-year period to $176.3 million, primarily reflecting a decrease in membership of approximately 126,000 member months, and the suspension of the HIP Fee pass-through in 2019. The decrease in membership follows the lower membership assigned to Triple-S by ASES when implementing the new Medicaid contract that became effective November 1, 2018.
Reported MLR of 86.4% increased 320 basis points from the prior-year period. This increase largely reflected the improved benefits offered in the Medicare Advantage 2019 product offering, the elimination of the HIP Fee pass-through, and the higher target MLR of the current Medicaid contract.
Update on P&C Segment Reserves related to Hurricane María

As of September 30, 2019:

Triple-S Propiedad, Inc. (TSP), the Company’s P&C subsidiary, has paid a cumulative amount of $692 million in claims related to Hurricane María. Estimated gross losses remain unchanged at $967 million.
TSP received 10 new claims during the third quarter, increasing the total number of claims to 17,746. It has closed approximately 96% of these claims. 709 claims remain open.
The Company evaluated any developments involving open claims, including new information that arose from lawsuits in which TSP has been served, as is customary when the Company conducts its quarterly review of TSP’s reserve levels. In addition, as described below, the Company conducted additional analysis of case reserves for claims in which lawsuits have been filed against TSP but not served.
TSP has been served with process in 218 lawsuits related to the 709 claims that remain open.
The Company conducted a search of the Puerto Rico court system’s electronic docket to identify lawsuits filed against TSP with respect to which TSP has not been served. This docket is a public record over which the Company has no control; furthermore, the Company is unable to verify its accuracy or completeness.
The docket search identified an additional 178 lawsuits filed against TSP that have not yet been served as required by law. All of them relate to claims previously registered with and evaluated by the Company.
The Company then performed additional analysis of case reserves for claims in which lawsuits have been filed against TSP but not served. Based on this analysis, as well as the customary review described above, the Company determined that there is no need to increase its estimate of gross losses nor adjust reserves related to Hurricane María.
As is the case for all claim liabilities, the gross losses related to Hurricane Maria are based on the Company’s best estimate of the ultimate expected cost of claims with the information currently on hand and are subject to change.
Results of Internal Investigation Related to Vital RFP

As previously disclosed in an 8-K filed with the Securities and Exchange Commission on July 30, 2019, the Company’s audit committee of independent directors engaged outside counsel to conduct a proactive investigation into the Company’s participation in the Vital RFP process. That investigation is substantially complete and has not uncovered any evidence of attempts by the Company to improperly influence the outcome of the Vital RFP process.

2019 Outlook

The Company is raising its full year 2019 guidance for adjusted net income per diluted share and reducing its guidance for operating expense ratio. It is maintaining its full year 2019 guidance for its consolidated operating income revenue, Managed Care premiums, consolidated claims incurred ratio and Managed Care MLR ratio. More specifically:

The Company continues to expect consolidated operating revenue for 2019 to be between $3.29 billion and $3.33 billion, which includes Managed Care premiums earned, net between $2.95 billion and $2.99 billion;
The Company continues to expect the consolidated claims incurred ratio for 2019 to be between 81.3% and 83.3%, and Managed Care MLR to be between 84.0% and 86.0%;
The Company is reducing consolidated operating ratio expectations for 2019 to be between 16.75% and 17.25%. The Company’s previous outlook was for consolidated operating expense ratio to be between 17.0% and 17.5%;
The Company continues to expect its effective tax rate to be between 29.0% and 33.0%; and
The Company raised adjusted net income per diluted share expectations for 2019 to be between $2.50 and $2.70, compared to its previous outlook for adjusted net income per diluted share between $2.40 and $2.60. Adjusted net income per diluted share guidance accounts for the August 2019 share dividend and does not account for any potential share repurchase activity during 2019. Estimated weighted average diluted share count for full year 2019 is expected to be 23.443 million shares.
Conference Call and Webcast

Management will host a conference call and webcast today at 8:30 a.m. Eastern Time to discuss its financial results for the three months ended September 30, 2019. To participate, callers within the U.S. and Canada should dial 1-877-451-6152 and international callers should dial 1-201-389-0879 at least five minutes before the call.

To listen to the webcast, participants should visit the "Investor Relations" section of the Company’s website at www.triplesmanagement.com several minutes before the event is broadcast and follow the instructions provided to ensure they have the necessary audio application downloaded and installed. This program is provided at no charge to the user. An archived version of the call, also located on the "Investor Relations" section of Triple-S Management’s website, will be available about two hours after the call ends and for at least the following two weeks. This news release, along with other information relating to the call, will be available on the "Investor Relations" section of the website.

In addition, a replay will be available through November 21, 2019 by calling 1-844-512-2921 or 1-412-317-6671 and entering passcode 13695866. A replay will also be available at www.triplesmanagement.com for 30 days.

On November 7, 2019 Aldeyra Therapeutics, Inc. (Nasdaq: ALDX) (Aldeyra), a biotechnology company devoted to developing and commercializing next-generation medicines to improve the lives of patients with immune-mediated diseases, reported financial results for the quarter ended September 30, 2019 (Press release, Aldeyra Therapeutics, NOV 7, 2019, View Source [SID1234550722]). In addition, the company updated investors on anticipated clinical milestones.

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"Aldeyra continued to make significant progress during the quarter in advancing our immunology platform toward the goal of reducing the burden of disease and helping patients lead healthier lives," said Aldeyra President and CEO Todd C. Brady, M.D., Ph.D. "We have reached agreement with the U.S. Food and Drug Administration (FDA) on the primary endpoint for our pivotal INVIGORATE Phase 3 clinical trial of reproxalap in allergic conjunctivitis. In addition, this quarter we expect to complete Part 1 of our adaptive RENEW Phase 3 clinical trial of reproxalap in dry eye disease, and initiate the first part of our adaptive GUARD Phase 3 clinical trial in proliferative vitreoretinopathy, representing the expansion of our ocular program from the front of the eye to the retina."

Clinical Milestone Updates

Dry Eye Disease: Part 1 of Adaptive RENEW Phase 3 Clinical Trial Scheduled for Completion in the Fourth Quarter of 2019. Part 1 of the two-part adaptive RENEW Phase 3 dry eye disease clinical trial of topical ocular reproxalap, the company’s lead reactive aldehyde species (RASP) inhibitor, is scheduled for completion in the fourth quarter of 2019, at which point Aldeyra plans to announce the endpoints, dosing regimen, and sample size planned for Part 2 of the trial. Dry eye disease affects more than 34 million adults in the U.S., and physicians and patients generally regard current therapeutic options as inadequate.

Allergic Conjunctivitis: INVIGORATE Phase 3 Clinical Trial Scheduled to Initiate in the First Half of 2020. Aldeyra recently released expanded data from the completed allergen chamber clinical methods trial of topical ocular reproxalap and announced the design of the INVIGORATE Phase 3 clinical trial, which is expected to initiate in the first half of 2020. The primary endpoint of INVIGORATE is statistical significance versus vehicle in ocular itch (0-4 scale) at a majority of 11 time points between 110 and 210 minutes after chamber entry. In October, the company presented the results of the ALLEVIATE Phase 3 clinical trial in allergic conjunctivitis at the American Academy of Ophthalmology Annual Meeting in San Francisco. ALLEVIATE met the primary endpoint of reduction of ocular itch versus vehicle following conjunctival allergen challenge. Of the estimated 100 million allergic conjunctivitis sufferers in the U.S., up to 30 million do not respond adequately to, or are dissatisfied with, antihistamines.

Proliferative Vitreoretinopathy: Part 1 of the Adaptive GUARD Phase 3 Clinical Trial Scheduled to Initiate in the Fourth Quarter of 2019. Patient enrollment in Part 1 of the adaptive GUARD Phase 3 Clinical Trial of ADX-2191 is expected to begin in the fourth quarter of 2019. GUARD will compare recurrence rates across patients treated with ADX-2191 or standard of care following surgical repair of retinal detachment due to proliferative vitreoretinopathy (PVR). In September, the FDA granted fast track designation to ADX-2191 for the prevention of PVR, a rare inflammatory disorder of the retina that leads to severe retinal scarring and blindness. There is no approved therapy for PVR. More than 50% of PVR cases result in severe uncorrectable vision loss, and 76% of patients suffer from at least moderate uncorrectable vision loss.

Systemic Autoimmune Disease: ADX-629 Phase 1 Clinical Trial Initiated. Patient enrollment is underway in the Phase 1 clinical trial of ADX-629, a novel orally administered RASP inhibitor in development for the treatment of systemic autoimmune disease and potentially other serious medical conditions.

Post-transplant Lymphoproliferative Syndrome: Phase 2 Clinical Trial of ADX-1612 Scheduled to Initiate in the Fourth Quarter of 2019. The Phase 2 clinical trial of ADX-1612, Aldeyra’s lead chaperome inhibitor, is slated to start in the fourth quarter of 2019 in patients with post-transplant lymphoproliferative syndrome, a rare and potentially fatal immunological disease that can occur following solid organ transplant.

Outlook

"We expect our clinical momentum to accelerate as we move through the fourth quarter of this year and into 2020," Dr. Brady said. "We believe that reproxalap has the potential to be the next novel entrant in dry eye disease and allergic conjunctivitis, part of a spectrum of conditions estimated to affect more than four in ten Americans. Our ocular programs represent the initial step of our mission to develop therapies for a broad category of systemic immune-mediated diseases."

Quarter Ended September 30, 2019 Financial Review

For the quarter ended September 30, 2019, Aldeyra reported a net loss of approximately $18.7 million, compared with a net loss of approximately $10.8 million for the quarter ended September 30, 2018. Basic and diluted net loss per share was $0.69 for the quarter ended September 30, 2019, compared with $0.52 per share for the same period in 2018. Losses resulted from the costs of research and development programs, as well as from general and administrative expenses.

Research and development expenses were $16.2 million for the quarter ended September 30, 2019, compared with $7.9 million for the same period in 2018. The increase of $8.3 million is primarily related to an increase in clinical and preclinical development and manufacturing costs; an increase in personnel costs; and non-cash compensation costs related to a portion of upfront acquisition consideration that is subject to vesting based on continued service.

General and administrative expenses were $2.8 million for the quarter ended September 30, 2019, compared with $3.1 million for the quarter ended September 30, 2018. The decrease of $0.3 million is primarily related to lower consulting costs.

For the quarter ended September 30, 2019, total operating expenses were approximately $19.0 million, compared with total operating expenses of approximately $10.9 million for the same period in 2018.

As of September 30, 2019, cash, cash equivalents, and marketable securities were $76.2 million, which includes $15.0 million drawn from the company’s debt facility in September 2019.

Conference Call & Webcast Information

Aldeyra will host a conference call today at 8:00 a.m. ET to discuss its third-quarter financial results and provide a corporate update. The dial-in numbers are 1-866-211-4098 for domestic callers and 1-647-689-6613 for international callers. The conference ID number for the live call will be 9487086.

A live webcast of the conference call will also be available on the Investors Relations section of the Aldeyra Therapeutics website at View Source After the live webcast, the event will remain archived on the Aldeyra Therapeutics website for one year.

On November 7, 2019 Phanes Therapeutics and Phanes Biopharmaceuticals ("Phanes") reported an important strategic alliance with Fosun Kite Biotechnology ("Fosun Kite") (Press release, Phanes Therapeutics, NOV 7, 2019, View Source [SID1234550786]). Under the alliance agreement, Phanes will exclusively provide Fosun Kite a collection of all high-affinity humanized antibodies targeting two novel cancer antigens for the development and commercialization of innovative CAR-T products for solid tumor treatments in China (including Hong Kong SAR, Macau SAR and Taiwan). Under the terms of the agreement, Phanes is eligible for upfront and milestone payments as well as royalty fees in China. Fosun Kite also owns the Right of First Negotiation for global commercialization of the antibody use rights outside of China.

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Dr. Ming Wang, CEO of Phanes commented: "This is our second deal of the year following the out-licensing agreement with Hanmi Pharmaceuticals in September. We are very excited about the opportunity to partner with Fosun Kite. Fosun Kite has built tremendous capabilities and expertise in cell therapy while leveraging the CAR-T experience of Kite Pharma, a global pioneer in CAR-T therapy, and they understand what innovation is like. Becoming a partner of Fosun Kite is an important validation of the scientific strength and capability of Phanes Therapeutics in delivering robust biological molecules that are suitable for therapeutic use. Our mission is to become a source of innovation for the biotech and pharma industry in the oncology field, and our efforts since the inception of the company 3 years ago have led to a very impressive pipeline, including monoclonal antibodies (mAbs), bispecific antibodies and single-chain variable fragments (scFvs), among which one mAb and one bispecific antibody have entered the CMC stage. In addition, we have established the PACbody platform, a proprietary technology for building bispecific antibodies. While we are aggressively advancing our internal programs, we are starting to reach out for various types of partnerships to maximize the positive impact of our pipeline in the fight against cancer. Moving forward, deal-making will be one of our major focuses. I’m very confident that we are going to have more deals added to our portfolio."

"We are quite pleased to have Phanes as a partner to advance the discovery and development of our CAR-T pipeline for solid tumor treatment. Phanes has rich experiences in development of humanized therapeutic antibodies as one of the leaders in the industry," said Dr. Richard Wang, Fosun Kite CEO, "In treating patients with hematologic malignancies, CAR-T has already demonstrated its superior efficacies. But in solid tumor treatment the world is still striving for a breakthrough of the technology. With the continuous progress of CAR-T, we believe it has tremendous potential. Fosun Kite has built unparalleled technology platforms and experiences through Yescarta’s commercialization in China, hence we are confident to start building a sustainable R&D pipeline while driving Yescarta’s NDA approval forward in China. With our newly opened R&D Center and the expansion of top R&D talents from China and overseas, we have established a firm foundation to realize this R&D strategy. We look forward to a successful partnership with Phanes, leading to more immuno-cell therapy product development to benefit cancer patients."

On November 7, 2019 Titan Pharmaceuticals, Inc. (NASDAQ:TTNP) reported it will announce its third quarter 2019 financial results after market close on Thursday, November 14, 2019 (Press release, Titan Pharmaceuticals, NOV 7, 2019, View Source;conference-call-to-follow-300954308.html [SID1234550841]). Following the release, Titan management will host a conference call at 4:30 p.m. EST / 1:30 p.m. PST to review the financial results and discuss business developments in the period.

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The conference call will be hosted by Sunil Bhonsle, President and CEO; Kate Beebe DeVarney, Ph.D., Executive Vice President and Chief Scientific Officer; Dane Hallberg, Executive Vice President and Chief Commercial Officer; Brian Crowley, Vice President of Finance; and Marc Rubin, M.D., Executive Chairman.

The live conference call may be accessed by dialing 1-888-317-6003 (U.S.) or 1-412-317-6061 (international) and providing passcode 9174896. The call will also be broadcast live and archived on Titan’s website at www.titanpharm.com/news/events.

On November 7, 2019 Surface Oncology (Nasdaq: SURF), a clinical-stage immuno-oncology company developing next-generation immunotherapies that target the tumor microenvironment, reported that it will present at the Society for the Immunotherapy of Cancer (SITC) (Free SITC Whitepaper)’s (SITC) (Free SITC Whitepaper) 34th Annual Meeting in National Harbor, MD (Press release, Surface Oncology, NOV 7, 2019, View Source [SID1234550596]). The presentations will include posters highlighting preclinical data from three programs in the Company’s portfolio, SRF388 (targeting IL-27), SRF617 (targeting CD39) and SRF231 (targeting CD47).

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"Each therapeutic candidate at Surface provides a compelling and differentiated biological rationale as an anti-tumor agent, with SRF617 and SRF388 IND filings anticipated in the fourth quarter of 2019," said Vito Palombella, Ph.D., chief scientific officer of Surface Oncology. "As demonstrated in these preclinical data presentations, the Surface team performs world-class research that has given us unique insights into these important immunomodulatory pathways."

Selected details of preclinical data presented in the posters include:

Friday, November 8, 2019:

Poster #P805: SRF388, a first-in-class, fully human monoclonal antibody targeting IL-27, blocks the immunoregulatory effects of IL-27 in immune cells and demonstrates preclinical in vivo anti-tumor activity

SRF388 binds to the p28 subunit of IL-27 with high affinity, inhibits IL-27 from interacting with IL-27RA, and inhibits IL-27-induced STAT1 phosphorylation in cells.
By preventing IL-27 from interacting with IL-27RA, SRF388 inhibits IL-27-stimulated immunoregulatory receptor expression.
SRF388 blocks IL-27 inhibition of PD-1-mediated cytokine production.
SRF388 inhibits the growth of disseminated lung tumors in vivo.
Saturday, November 9, 2019:

Poster #P652: The fully human antibody SRF617 is a potent enzymatic inhibitor of CD39 with strong immunomodulatory activity

SRF617 inhibits the enzymatic activity of CD39 on cells.
By blocking CD39, SRF617 enhances total CD4 cell proliferation and dendritic cell maturation in the presence of exogenous ATP.
SRF617 inhibits CD39 enzymatic activity in tumors, reduces systemic adenosine levels, inhibits tumor growth and increases tumor associated macrophages in preclinical tumor models.
Combination of a murine surrogate of SRF617 with anti-PD-1 inhibition significantly increases survival versus anti-PD-1 inhibition alone, in a preclinical mouse tumor model.
Poster# P272: SRF231, a fully human high-affinity anti-CD47 antibody, exerts potent preclinical antitumor activity through engagement of the Fc receptor (FcR), CD32a

SRF231 delivers an activating signal to myeloid cells via interactions between the Fc region of SRF231 and CD32a expressed on myeloid cells.
SRF231 displays favorable preclinical characteristics with respect to receptor occupancy/tumor exposure/efficacy relationship.
The posters will be available to view on the Surface Oncology website, here.

Individuals wishing to attend the Surface R&D day on November 18th should contact [email protected].