On July 30, 2020 Oncoceutics, Inc. reported that a series of presentations at the 2019 DIPG/DMG Symposium to be held August 2-3 in Sydney, Australia, will highlight ONC201 as a promising treatment for specific types of lethal brain cancer (Press release, Oncoceutics, JUL 30, 2019, View Source [SID1234558335]). These presentations are part of a session describing progress in new drug development for diffuse midline gliomas (DMG), which includes diffuse intrinsic pontine glioma (DIPG).

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The first of the ONC201-related talks will describe the clinical experience with ONC201, the first small molecule DRD2 antagonist for oncology, in pediatric patients with gliomas containing a specific mutation, called H3 K27M, that has a high prevalence in DMGs and DIPGs. Sharon Gardner, MD, New York University, who is the principal investigator of the clinical trial, will present the clinical data. The next talk will feature William Hoos, CCO of XCures, who will present on the topic of innovative trial designs, which will highlight the partnership between Oncoceutics and XCures that enables efficient clinical research and data collection in ultra-rare diseases. Wolfgang Oster, MD, PhD, CEO and Chairman of Oncoceutics, will provide an industry perspective on drug development for DMGs as part of the same session on August 3rd.

These presentations report results from systematic clinical studies with ONC201 combined with a real-life experience gathered in an Expanded Access Program (EAP), when patients are not able to enroll on a clinical protocol but fulfill a narrowly defined set of characteristics that mimic the ones in clinical studies. Ongoing and planned clinical programs with ONC201 for DIPG and DMG were presented on June 20, 2019 at the Pediatric Subcommittee of the FDA’s Oncology Drugs Advisory Committee. A webcast recording of this event can be viewed at the following link (required Adobe Connect): View Source

A team of Oncoceutics members will be present at the conference in Sydney. If you have any questions please contact us at [email protected].

On July 30, 2019 SpringWorks Therapeutics, Inc., a clinical-stage biopharmaceutical company focused on developing life-changing medicines for patients with severe rare diseases and cancer, reported that the European Commission has granted Orphan Drug Designation for mirdametinib (formerly PD-0325901), an oral, small molecule inhibitor of MEK1 and MEK2, for the treatment of neurofibromatosis type 1 (NF1) (Press release, SpringWorks Therapeutics, JUL 30, 2019, View Source [SID1234538849]).

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NF1 is a rare genetic disorder characterized by mutations in the MAPK pathway. Throughout their lifetime, up to half of NF1 patients progress to develop plexiform neurofibromas, which are peripheral nerve sheath tumors that cause significant pain, disfigurement and morbidity. NF1-associated plexiform neurofibromas (NF1-PN) are most often diagnosed in the first two decades of life and are characterized by aggressive tumor growth, which is typically more rapid during childhood.1-3 There are currently no therapies approved for the treatment of NF1-PN.

"This orphan designation in the European Union is another important recognition of the significant need for an effective treatment for patients with NF1, and follows the orphan drug and fast-track designations already granted for mirdametinib in the U.S. by the FDA," said Saqib Islam, Chief Executive Officer of SpringWorks. "We expect to initiate our Phase 2b trial of mirdametinib in children and adults with NF1-PN this quarter and look forward to working closely with regulatory authorities throughout our development program."

The European Commission grants orphan medicinal status for products intended for the treatment, prevention or diagnosis of life-threatening or very serious conditions that affect no more than 5 in 10,000 people in the European Union, and where the product represents a significant benefit over existing treatments. Orphan designation provides companies with certain benefits and incentives in the EU, including a 10-year period of market exclusivity after product approval, reduced regulatory fees and protocol assistance.4

Mirdametinib previously received Orphan Drug Designation from the FDA for the treatment of neurofibromatosis type 1 and Fast Track Designation from the FDA for the treatment of patients ≥ 2 years of age with neurofibromatosis type 1-associated inoperable plexiform neurofibromas that are progressing or causing significant morbidity. SpringWorks expects to initiate the ReNeu trial, a Phase 2b open-label, single-arm trial with mirdametinib that will enroll both pediatric and adult NF1-PN patients, in the third quarter of 2019.

About Neurofibromatosis Type 1

Neurofibromatosis type 1 (NF1) is a rare genetic disorder that arises from mutations in the NF1 gene, which encodes for neurofibromin, a key suppressor of the MAPK pathway. NF1 is the most common form of neurofibromatosis, with an estimated global birth incidence of approximately 1 in 3,000 individuals.2,3 The clinical course of NF1 is heterogeneous and manifests in a variety of symptoms across numerous organ systems, including abnormal pigmentation, skeletal deformities, tumor growth and neurological complications, such as cognitive impairment. Patients with NF1 have an eight to 15-year mean reduction in their life expectancy compared to the general population.5 NF1 patients have an approximately 30% to 50% lifetime risk of developing plexiform neurofibromas, or PN, which are tumors that grow in an infiltrative pattern along the peripheral nerve sheath and that can cause severe disfigurement, pain and functional impairment; in rare cases, NF1-PN may be fatal.2,3 NF1-PN are most often diagnosed in the first two decades of life. These tumors are characterized by aggressive growth, which is typically more rapid during childhood.1,2,5 The only definitive treatment for NF1-PN is surgical removal of the tumors, however, because NF1-PN arise from nerve cells and grow in an infiltrative pattern, it is challenging to successfully resect tumors without severe comorbidities, such as permanent nerve damage and disfigurement. 6 There are no therapies currently approved for the treatment of NF1-PN.

About Mirdametinib

Mirdametinib is an oral, small molecule inhibitor of MEK1 and MEK2. MEK proteins occupy a pivotal position in the MAPK pathway, a key signaling network that regulates cell growth and survival, and that plays a central role in multiple oncology and rare disease indications.

Mirdametinib has been evaluated in several Phase 1 and Phase 2 clinical trials, with over 200 subjects having been exposed to treatment. A Phase 2 trial was conducted by the Neurofibromatosis Clinical Trial Consortium and evaluated mirdametinib in 19 adolescent and adult patients with inoperable and symptomatic or growing plexiform neurofibromas. Patients received an oral dose of 2 mg/m2 BID with a maximum dose of 4 mg BID on a four-week cycle of three weeks-on, one week-off. Eight patients (42%) achieved an objective response by cycle 12, prospectively defined as volumetric reduction in their target PN of at least 20 percent. Mirdametinib was generally well-tolerated in this trial. The most commonly reported treatment-emergent grade 2 or higher AEs were acneiform rash in 53% (10/19), fatigue in 26% (5/19) and nausea in 21% (4/19) of patients.

In addition to the Phase 2b monotherapy trial in NF1-associated PN, and given the critical role that the MAPK pathway plays in the growth and proliferation of a large number of tumor types, SpringWorks is also pursuing mirdametinib in combination with other rational anticancer agents across a range of solid tumors.

On July 30, 2019 Hutchison China MediTech Limited ("Chi-Med") (AIM/Nasdaq: HCM) reported its unaudited financial results for the six months ended June 30, 2019 and provides updates on key clinical programs (Press release, Hutchison China MediTech, JUL 30, 2019, View Source [SID1234537891]). Major highlights include:

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Positive surufatinib China Phase III study in non-pancreatic neuroendocrine tumors ("NET")—Interim analysis of SANET-ep study confirmed to have met primary endpoint and the Independent Data Monitoring Committee ("IDMC") recommended the study be un-blinded, a year ahead of schedule. New Drug Application ("NDA") is now being prepared for submission during 2019;

Early progress on Elunate (fruquintinib capsules) with China in-market sales in colorectal cancer ("CRC") of $11.4 million1 (RMB77.1 million) during H1 2019; Discussions in progress for potential inclusion in the China National Reimbursement Drug List ("NRDL") at the next update in Q4 2019;

Potential for first savolitinib NDA targeted for H1 2020—for MET2 Exon 14 deletion non-small cell lung cancer ("NSCLC") in China. Oral presentations of savolitinib data made at scientific conferences in H1 2019 in lung cancer (monotherapy and combination with Tagrisso) and kidney cancer (combination with Imfinzi).
Video webcast presentation at 9:00 a.m. BST and additional conference call at 9:00 a.m. EDT.

"Chi-Med’s business is progressing well on all fronts." said Simon To, Chairman, Chi-Med. "All major clinical readouts in the first half were encouraging, with the stand-out results being surufatinib’s positive Phase III outcome in non-pancreatic NET and savolitinib’s preliminary data in MET Exon 14 deletion NSCLC along with the completion of enrollment of its registration study. We believe these accomplishments have the potential to support Chi-Med’s next two NDA submissions, surufatinib later this year and savolitinib early next year."

"Highly encouraging preliminary data was also reported for the savolitinib / Tagrisso combination in NSCLC, which led to the initiation of a global registration intent trial by AstraZeneca AB (publ) ("AstraZeneca"), the SAVANNAH study, early this year. Also, recently released preliminary data for the savolitinib / Imfinzi combination in kidney cancer is promising."

"Our first approved oncology drug, Elunate, is making progress, with first six-month revenue well ahead, at the same stage, of the five small molecule VEGFR3 inhibitors previously launched by multinational companies in China. In our view, with time and inclusion in the China NRDL, Elunate’s well documented efficacy and safety profile will make it a formidable competitor."

[1] In-market sales figures for Elunate are based on information provided by Eli Lilly and Company ("Lilly");

[2] mesenchymal epithelial transition receptor ("MET");

[3] Vascular endothelial growth factor receptor ("VEGFR");

"Business is as usual for our Commercial Platform, which generated 9% net income growth on a CER4 basis versus same period last year. This income helps significantly to fund our clinical development programs as well as our discovery engine which produced yet another exciting oncology asset, our ninth, with the IND5 submission of our novel IDH 1/2 inhibitor6 HMPL-306."

"Our organization is expanding rapidly, with our New Jersey-based international clinical and regulatory team scaling up to manage global registration studies on surufatinib and fruquintinib and early development on our B-cell malignancy assets. Our in-house oncology commercial team in China is also growing fast, managing medical affairs and getting ready for the potential launch of surufatinib late next year."

"Looking ahead at the next two years, we expect to accelerate our transformation into a fully integrated and globally-facing biopharmaceutical company with capability to discover, develop and launch multiple novel drug innovations aimed at addressing a broad range of unmet medical needs and benefiting a large number of patients."

FINANCIAL HIGHLIGHTS

The items below are selected financial data for the six months ended June 30, 2019. All monetary figures are expressed in U.S. dollars unless otherwise stated. For more details, please refer to "Financial Review", "Operations Review" and "Interim Unaudited Condensed Consolidated Financial Statements" below.

OVERALL GROUP: sufficient resources to reach multiple value inflection points on our pipeline

Group revenue $102.2 million (H1-18: $102.2m).

Net loss attributable to Chi-Med of $45.4 million (H1-18: net loss of $32.7m).

Adjusted Group net cash flows (non-GAAP) was -$63.7 million in H1 2019 including the repayment of a total of $26.9 million in bank loans, leaving the Group with no outstanding bank borrowings. Cash from our Commercial Platform, as well as payments received from our multinational partners, continued to offset a material part of our research and development ("R&D") expenses.

Cash resources of $383.6 million at Group level as of June 30, 2019 (December 31, 2018: $420.3m), including cash, cash equivalents and short-term investments of $237.3 million (December 31, 2018: $301.0m) and unutilized bank facilities of $146.3 million (December 31, 2018: $119.3m).
INNOVATION PLATFORM: increased investment in R&D driven by expansion of our organization, operations and progress on our clinical development pipeline

Consolidated revenue was $12.0 million (H1-18: $13.6m) mainly due to payments from AstraZeneca and Lilly. During H1 2019, following the launch of Elunate in late 2018, we recorded $5.5 million (H1-18: $1.1m) in manufacturing and service fee revenues as well as royalty income from Lilly.

[4] Constant Exchange Rate ("CER"). Certain financial information in this announcement is presented on a constant exchange rate basis, or at CER. These financial measures are not prepared in accordance with U.S. generally accepted accounting principles (GAAP) because they remove the effects of currency movements from our reported results. Please refer to "Use of Non-GAAP Financial Measures and Reconciliation" below for further information relevant to the interpretation of these financial measures and reconciliations of these financial measures to the most comparable GAAP measures;

R&D expenses on an as adjusted (non-GAAP) basis increased to $74.5 million (H1-18: $66.7m), primarily driven by the progress in the development of our eight clinical drug candidates, five of which are either in or about to start development outside China; the ramp-up of our small molecule manufacturing operations in Suzhou; expansion of U.S. and international clinical and regulatory operations; and establishment of our oncology commercial infrastructure in China.

Net loss from our Innovation Platform attributable to Chi-Med of $63.8 million (H1-18: net loss of $52.9m).
COMMERCIAL PLATFORM: solid net income growth on a CER basis due to continued progress in our Prescription Drugs business

Total consolidated sales grew 2% (7% at CER) to $90.2 million (H1-18: $88.6m) mainly due to progress on our Prescription Drugs subsidiary Hutchison Sinopharm7 being partially offset by rationalization of certain low contribution products in the Consumer Health business.

Total sales of non-consolidated joint ventures increased 2% (8% at CER) to $276.9 million (H1-18: $271.7m) driven by solid performance on our leading prescription cardiovascular drug, She Xiang Bao Xin ("SXBX") pill, which grew 9% (15% at CER) to $141.0 million (H1-18: $129.8m).

Total consolidated net income from our Commercial Platform attributable to Chi-Med increased 3% (9% at CER) to $27.7 million (H1-18: $26.9m).
—

U.K. Analysts Meeting and Webcast Scheduled Today at 9:00 a.m. BST (4:00 p.m. HKT)—at Citigate Dewe Rogerson, 8th Floor, Holborn Gate, 26 Southampton Buildings, London WC2A 1AN, UK. Investors may participate in the call at +44 20 3003 2666 (800 900 476 toll free in Hong Kong), or access a live video webcast of the call via Chi-Med’s website at www.chi-med.com/investors/event-information/.

U.S. Conference Call Scheduled Today at 9:00 a.m. EDT—to participate in the call from the U.S., please dial 1 866 966 5335.

Additional dial-in numbers are also available at Chi-Med’s website. For both calls please use conference ID "Chi-Med."

OPERATING HIGHLIGHTS

The points below summarize some of Chi-Med’s operating highlights so far this year. For more details, please refer to "Operations Review" below.

SURUFATINIB (HMPL-012 or sulfatinib)—angio-immuno kinase inhibitor of VEGFR 1/2/3, fibroblast growth factor receptor ("FGFR") 1, and colony stimulating factor-1 receptor ("CSF-1R"):

Positive China Phase III in non-pancreatic NET: An interim analysis in June 2019 confirmed that the Phase III non-pancreatic NET (SANET-ep) study met its primary endpoint of progression-free survival ("PFS"). As a result, the IDMC recommended the study be un-blinded, a year ahead of schedule, and preparations are now underway for an NDA submission in late 2019 for this indication in China;

Initiated China Phase II/III in biliary tract cancer ("BTC"): Based on preliminary Phase Ib/IIa data, we initiated a Phase IIb/III registration study in BTC in China in March 2019; and

[7] Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Company Limited ("Hutchison Sinopharm").

Initiated PD-1 combination development: Received China IND clearance during early 2019 and initiated a Phase I safety run-in study in China of surufatinib plus Tuoyi, an approved PD-1 monoclonal antibody from Shanghai Junshi Biosciences Co. Ltd. ("Junshi").
FRUQUINTINIB—highly selective tyrosine kinase inhibitor ("TKI") of VEGFR 1/2/3—potential best-in-class in terms of both efficacy and safety:

Early progress on Elunate (fruquintinib capsules) in third-line CRC in China:

$11.4 million (RMB77.1 million) in sales during H1 2019: In-market sales of Elunate to third-parties, as provided by Lilly, in the first full six-month period since its November 25, 2018 launch;

Progress in reimbursement discussion: Elunate was included in the Shanghai provincial reimbursement drug list ("RDL") in June 2019. Discussions now in-progress for potential inclusion in the China NRDL at the next update in early Q4 2019.

Cleared Phase III interim analysis in second-line gastric cancer: In April 2019, we conducted an interim analysis of the FRUTIGA study in China for futility. The analysis evaluated PFS and overall survival ("OS") trends after six months of therapy for the first 100 patients in the study. The IDMC recommended to continue the study without changes; and

Initiated PD-1 combination development: Received China IND clearance in early 2019 and initiated a Phase I study of fruquintinib plus Tyvyt, an approved PD-1 monoclonal antibody from Innovent Biologics (Suzhou) Co. Ltd. ("Innovent"). Phase I development of fruquintinib plus genolimzumab, a PD-1 monoclonal antibody under development by Genor Biopharma Co. Ltd. ("Genor") is also now underway.
SAVOLITINIB—potential first-in-class selective MET inhibitor in late-stage clinical development:

Reached enrollment goal in Phase II registration study—MET Exon 14 deletion NSCLC: Encouraging interim data, for 31 evaluable patients, for the China Phase II registration study in MET Exon 14 deletion NSCLC were presented during the 2019 American Association for Cancer Research (AACR) (Free AACR Whitepaper) ("AACR") Annual Meeting. We have now reached our enrollment goal for this Phase II registration study, and subject to clinical outcome, with potential to be our first NDA submission for savolitinib in early 2020;

AstraZeneca collaboration, leading global position in EGFR-TKI resistant NSCLC:

56% objective response rate ("ORR") and 7.1 months’ median duration of response—in patients with acquired resistance to Iressa or Tarceva driven by MET amplification: Preliminary TATTON Phase Ib/IIa data for the savolitinib/Tagrisso combination regimen were presented at the 2019 AACR (Free AACR Whitepaper) Annual Meeting for a total of 43 evaluable patients who were T790M- and had not previously received a third-generation EGFR inhibitor;

31% ORR and 9.7 months’ median duration of response—in patients with acquired resistance to Tagrisso driven by MET amplification: Preliminary TATTON Phase Ib/IIa data for the savolitinib/Tagrisso combination regimen were also presented at the 2019 AACR (Free AACR Whitepaper) Annual Meeting for a total of 39 evaluable patients who had reported disease progression after receiving a third-generation EGFR inhibitor. The SAVANNAH Phase IIb registration intent study, which is being conducted in North and South America, Europe and Asia in this target patient population, dosed its first patient in early 2019;

Emerging signal for savolitinib/Imfinzi (PD-L1) combination in renal cell carcinoma ("RCC"): Interim results for the papillary RCC ("PRCC") cohort of the CALYPSO Phase II study were presented at the 2019 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Genitourinary Symposium ("ASCO GU") reporting a 27% ORR for all 41 patients and a 32% ORR for the 28 previously untreated patients. The combination was tolerable and associated with durable responses in PRCC.
Further progress in early/proof-of-concept clinical trials and discovery, including:

HMPL-523—potential first-in-class selective Syk inhibitor: A Phase Ib dose expansion study in both China and Australia accelerated enrollment in H1 2019 in multiple sub-types of non-Hodgkin’s lymphoma ("NHL"). We intend to use Phase Ib data to guide registration strategy in China during late 2019; and multiple U.S. / Europe sites are also now open for a Phase I/Ib study with patient screening underway.

HMPL-689—potential best-in-class selective PI3Kd inhibitor: A recommended dose for Phase II study has been selected based on the China Phase I study; U.S. / Europe IND applications cleared; and

IND submission in China for HMPL-306: A novel selective small molecule TKI of isocitrate dehydrogenase ("IDH") 1/2, discovered in-house with IND submitted H1 2019.
Major organizational expansion, including:

Expansion of international clinical and regulatory operations: accelerated expansion of New Jersey team to support development of multiple un-partnered compounds outside of Asia; and

Establishment of China oncology commercial organization: currently numbering about 60 commercial staff, primarily focused on medical affairs and preparation for potential surufatinib launch in late 2020.
POTENTIAL UPCOMING KEY EVENTS

China—H2 2019 Global—H2 2019
Savolitinib—Registration study completion—MET Exon 14 deletion NSCLC (occurred July); HMPL-523 (Syk)—Phase I—Initiate U.S. / E.U. Phase I/Ib in indolent NHL;

Surufatinib—Phase III data (SANET-ep)—presentation at scientific conference;

HMPL-689 (PI3Kd)—Phase I—Initiate U.S. / E.U. Phase I/Ib in indolent NHL;

Surufatinib—NDA submission—in non-pancreatic NET;

Savolitinib—Phase II data (VIKTORY)—gastric cancer data (patient tumor molecular profiling).

Fruquintinib—Phase III data (FALUCA)—submit for presentation in NSCLC at conference;

Fruquintinib—Reimbursement—possible Elunate inclusion in China NRDL in Q4 2019.

Fruquintinib—Phase III interim analysis (FRUTIGA)—2nd interim in gastric cancer; Phase II/III start—initiate U.S. / E.U. study in pancreatic NET;

Surufatinib—Phase III interim analysis (SANET-p)—planned final interim analysis;

Fruquintinib—Phase II/III start—initiate U.S. / E.U. Phase II/III study in metastatic CRC;

Savolitinib—NDA submission—in MET Exon 14 deletion NSCLC;

Savolitinib—Phase II data (CALYPSO)—Imfinzi (PD-L1) combo in RCC;

Surufatinib—Phase Ib/II data—submit for presentation of BTC at conference;

Savolitinib—Phase II registration study (SAVANNAH) interim analysis—in NSCLC;

HMPL-523—Phase II study start—potential registration study indolent NHL.

FINANCIAL GUIDANCE

We are providing the following updated Financial Guidance for the year ending December 31, 2019. Our updated guidance takes into account the weakening of the RMB, which was down 6% against the U.S. dollar during H1 2019 (using the average exchange rate for the period) relative to the same period last year due to global macroeconomic factors. We expect this trend to continue through the balance of 2019, and this depreciation of the RMB has the effect of reducing our R&D expenses in China in U.S. dollar terms.

In addition, we have both expanded and extended existing studies of surufatinib and fruquintinib in the U.S. ahead of upcoming regulatory authority end of Phase II meetings. This will move certain start-up costs of our global Phase II/III registration studies on surufatinib and fruquintinib into 2020.

Use of Non-GAAP Financial Measures—References in this announcement to adjusted R&D expenses, adjusted Group net cash flows and adjusted Group net cash flows excluding financing activities and financial measures reported at CER are based on non-GAAP financial measures. Please see the "Use of Non-GAAP Financial Measures and Reconciliation" below for further information relevant to the interpretation of these financial measures and reconciliations of these financial measures to the most comparable GAAP measures.

On July 30, 2019 Personalis, Inc. (Nasdaq: PSNL), a leader in advanced genomics for cancer, reported it will release its second quarter 2019 financial results after the market closes on Tuesday, August 13, 2019. In conjunction with the release, the Company will host a conference call and webcast that day at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss its financial results and recent highlights (Press release, Personalis, JUL 30, 2019, View Source [SID1234537908]).

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Interested parties may access the live call via telephone by dialing (866) 220-8061 for domestic callers or (470) 495-9168 for international callers, using conference ID: 5981178. The live webinar of the call may be accessed by visiting the Events section of the company’s website at investors.personalis.com. A replay of the webinar will be available shortly after the conclusion of the call and will be archived on the company’s website.

On July 30, 2019 Incyte Corporation (Nasdaq:INCY) reported 2019 second quarter financial results and provides a status update on the Company’s development portfolio (Press release, Incyte, JUL 30, 2019, View Source [SID1234537892]).

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"Revenue growth continues to be strong, and we are pleased that Jakafi is also now available as an approved therapeutic option for patients with steroid-refractory acute GVHD," stated Hervé Hoppenot, Chief Executive Officer, Incyte. "In addition, we made good progress across our development portfolio during the quarter, including presenting data from the Phase 2 trial of ruxolitinib cream in patients with vitiligo at the World Congress of Dermatology (WCD) which drove our decision to advance the program into pivotal development. We remain on track to file a New Drug Application (NDA) seeking approval of pemigatinib in cholangiocarcinoma in the second half, and we look forward to announcing the results of multiple pivotal trials of ruxolitinib and itacitinib in GVHD by year-end. In summary, we continue to execute on our key strategic goals of further diversifying our revenue base and driving sustainable long-term growth."

Portfolio Update

Oncology – key highlights

The U.S. Food and Drug Administration (FDA) approved Jakafi for the treatment of steroid-refractory acute GVHD in May. Additionally, the results from the randomized Phase 3 trials of ruxolitinib versus best available therapy in steroid-refractory acute (REACH2) and steroid-refractory chronic (REACH3) GVHD, respectively, are currently expected to be available by the end of 2019.

GRAVITAS-301, the Phase 3 trial of itacitinib as a treatment for patients with newly-diagnosed acute GVHD, is also expected to readout before the end of 2019. GRAVITAS-309, a Phase 3 trial of itacitinib as a treatment for patients with newly-diagnosed chronic GVHD, was initiated in January of this year.

The Phase 1/2 trial evaluating the combination of itacitinib and osimertinib as a second-line treatment for patients with EGFR mutation-positive non-small cell lung cancer (NSCLC) has been completed; there are currently no plans for additional clinical evaluations of this combination.

Incyte is planning to submit an NDA seeking approval for pemigatinib as a second-line treatment for patients with FGFR2 translocated cholangiocarcinoma in the second half of 2019. The Phase 3 trial of pemigatinib for the first-line treatment of patients with FGFR2 translocated cholangiocarcinoma was initiated in June. Enrollment in the continuous dosing cohort of the Phase 2 trial of pemigatinib in patients with bladder cancer is expected to complete by the end of 2019, and a Phase 2 study of pemigatinib in patients with driver-activations of FGFR, that is agnostic to the tumor type, is expected to open in the coming months.

Indication and status

Ruxolitinib

Steroid-refractory acute GVHD: Phase 3 (REACH2)

(JAK1/JAK2)

Steroid-refractory chronic GVHD: Phase 3 (REACH3)

Essential thrombocythemia: Phase 2 (RESET)

Refractory myelofibrosis: Phase 2 with PI3Kδ, PIM or JAK1 inhibition

Itacitinib

Treatment-naïve acute GVHD: Phase 3 (GRAVITAS-301)

(JAK1)

Treatment-naïve chronic GVHD: Phase 3 (GRAVITAS-309)

Pemigatinib

Cholangiocarcinoma: Phase 2 (FIGHT-202), Phase 3 (FIGHT-302)

(FGFR1/2/3)

Bladder cancer: Phase 2 (FIGHT-201)

8p11 MPN: Phase 2 (FIGHT-203)

Tumor agnostic: Phase 2 (FIGHT-207) in preparation

Parsaclisib

Follicular lymphoma: Phase 2 (CITADEL-203)

(PI3Kδ)

Marginal zone lymphoma: Phase 2 (CITADEL-204)

Mantle cell lymphoma: Phase 2 (CITADEL-205)

INCMGA0012

MSI-high endometrial cancer: Phase 2 (POD1UM-101)

(PD-1)1

Merkel cell carcinoma: Phase 2 (POD1UM-201)

Anal cancer: Phase 2 (POD1UM-202)

Notes:
1) INCMGA0012 licensed from MacroGenics

Inflammation and autoimmunity (IAI) – key highlights

Data from the randomized Phase 2 trial of ruxolitinib cream in patients with vitiligo were presented at WCD. The study met its primary endpoint, demonstrating that significantly more patients treated with ruxolitinib cream for 24 weeks achieved a ≥50 percent improvement from baseline in the facial vitiligo area severity index (F-VASI50) score compared to patients treated with a vehicle control (non-medicated cream). Phase 3 development of ruxolitinib cream in patients with vitiligo is expected to begin by the end of 2019.

Indication and status

Ruxolitinib cream

Atopic dermatitis: Phase 3 (TRuE-AD)

(JAK1/JAK2)

Vitiligo: Phase 3 in preparation (TRuE-V)

INCB54707

Hidradenitis suppurativa: Phase 2

(JAK1)

Itacitinib
(JAK1)

Ulcerative colitis: Phase 2

Parsaclisib

Autoimmune hemolytic anemia: Phase 2

(PI3Kδ)

Sjögren’s syndrome: Phase 2

Discovery and early development – key highlights

Incyte’s portfolio of earlier-stage clinical candidates is detailed below.

Modality

Candidates

Small molecules

INCB01158 (ARG)1, INCB81776 (AXL/MER), INCB62079 (FGFR4), epacadostat (IDO1),
INCB59872 (LSD1), INCB53914 (PIM), INCB86550 (PD-L1)

Monoclonal antibodies2

INCAGN1876 (GITR), INCAGN2385 (LAG-3), INCAGN1949 (OX40),
INCAGN2390 (TIM-3)

Bispecific antibodies

MCLA-145 (PD-L1xCD137)3

Notes:
1) INCB01158 development in collaboration with Calithera
2) Discovery collaboration with Agenus
3) MCLA-145 development in collaboration with Merus

Partnered – key highlights

Phase 3 data from BREEZE-AD1 and BREEZE-AD2, two Phase 3 trials of baricitinib in patients with moderate-to-severe atopic dermatitis, were presented at WCD. Lilly expects topline results from additional ongoing Phase 3 trials in this indication to be available later in 2019.

Data from the GEOMETRY mono-1 Phase 2 clinical trial illustrate the promise of the investigational MET inhibitor capmatinib as a potential first- and second/third-line treatment option for patients with locally advanced or metastatic non-small cell lung cancer (NSCLC) that harbor the MET exon-14 skipping mutation. These data were presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June. In addition, Novartis announced in June that the FDA granted Breakthrough Therapy designation for capmatinib as a treatment for patients with metastatic NSCLC harboring MET exon-14 skipping mutation with disease progression on or after platinum-based chemotherapy.

Novartis continues to expect to submit an NDA seeking approval of capmatinib in the second half of 2019.

Indication and status

Baricitinib (JAK1/JAK2)1

Atopic dermatitis: Phase 3 (BREEZE-AD)

Systemic lupus erythematosus: Phase 3

Severe alopecia areata: Phase 3

Capmatinib (MET)2

NSCLC (with MET exon 14 skipping mutations): NDA expected in H2 2019 (by Novartis)

Notes:
1) Worldwide rights to baricitinib licensed to Lilly: approved as Olumiant in multiple territories globally for certain patients with moderate to severe rheumatoid arthritis
2) Worldwide rights to capmatinib licensed to Novartis

2019 Second-Quarter Financial Results

The financial measures presented in this press release for the three and six months ended June 30, 2019 and 2018 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers.

Beginning in the first quarter of 2019, after reviewing our Reconciliation of GAAP Net Income to Selected Non-GAAP Adjusted Information with the U.S. Securities & Exchange Commission, we no longer adjust for upfront consideration and milestones that are part of collaboration agreements with new or existing partners. This revised methodology is reflected in this press release for the three and six months ended June 30, 2019 and 2018.

Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.

The Company’s 2019 financial guidance related to research and development and selling, general and administrative expenses does not include estimates associated with any potential future strategic transactions.

Revenues For the quarter ended June 30, 2019, net product revenues of Jakafi were $410 million as compared to $346 million for the same period in 2018, representing 18 percent growth. For the six months ended June 30, 2019, net product revenues of Jakafi were $785 million as compared to $659 million for the same period in 2018, representing 19 percent growth. For the quarter ended June 30, 2019, net product revenues of Iclusig (ponatinib) were $24 million as compared to $20 million for the same period in 2018. For the six months ended June 30, 2019, net product revenues of Iclusig were $45 million as compared to $41 million for the same period in 2018.

For the quarter and six months ended June 30, 2019, product royalties from sales of Jakavi (ruxolitinib), which has been out-licensed to Novartis outside of the United States, were $57 million and $102 million, respectively, as compared to $47 million and $88 million, respectively, for the same periods in 2018. For the quarter and six months ended June 30, 2019, product royalties from sales of Olumiant (baricitinib), which has been out-licensed to Lilly globally, were $19 million and $35 million, respectively, as compared to $9 million and $15 million, respectively, for the same periods in 2018.

For the quarter and six months ended June 30, 2019, milestone and contract revenues earned from our collaborative partners were $20 million and $60 million, respectively, as compared to $100 million for the same periods in 2018.

For the quarter and six months ended June 30, 2019, total revenues were $530 million and $1 billion, respectively, as compared to $522 million and $904 million, respectively, for the same periods in 2018.

Cost of product revenues GAAP cost of product revenues for the quarter and six months ended June 30, 2019 was $29 million and $52 million, respectively, as compared to $25 million and $43 million, respectively, for the same periods in 2018. Non-GAAP cost of product revenues for the quarter and six months ended June 30, 2019 was $24 million and $41 million, respectively, as compared to $19 million and $32 million, respectively, for the same periods in 2018. Non-GAAP cost of product revenues excludes the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the cost of stock-based compensation.

Research and development expenses GAAP research and development expenses for the quarter and six months ended June 30, 2019 were $289 million and $560 million, respectively, as compared to $298 million and $601 million, respectively, for the same periods in 2018. The decrease in GAAP research and development expenses over the prior year quarter and prior year six month period was driven primarily by our decision to no longer co-fund the development of baricitinib with Lilly.

Non-GAAP research and development expenses for the quarter and six months ended June 30, 2019 were $262 million and $505 million, respectively, including upfront and milestone expenses related to collaborative agreements of $25 million. Non-GAAP research and development expenses for the quarter and six months ended June 30, 2018 were $273 million and $552 million, respectively, including upfront and milestone expenses related to collaborative agreements of $20 million and $32 million, respectively. Non-GAAP research and development expenses exclude the cost of stock-based compensation.

Selling, general and administrative expenses GAAP selling, general and administrative expenses for the quarter and six months ended June 30, 2019 were $106 million and $230 million, respectively, as compared to $108 million and $230 million, respectively, for the same periods in 2018.

Non-GAAP selling, general and administrative expenses for the quarter and six months ended June 30, 2019 were $93 million and $204 million, respectively, as compared to $96 million and $206 million, respectively, for the same periods in 2018. Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation.

Change in fair value of acquisition-related contingent consideration GAAP change in fair value of acquisition-related contingent consideration for the quarter and six months ended June 30, 2019 was $7 million and $13 million, respectively, as compared to $7 million and $14 million, respectively, for the same periods in 2018.

Unrealized gain (loss) on long term investments GAAP unrealized loss on long-term investments for the quarter ended June 30, 2019 was $5 million and the GAAP unrealized gain for the six months ended June 30, 2019 was $16 million. GAAP unrealized loss on long-term investments for the quarter and six months ended June 30, 2018 was $35 million and $12 million, respectively. The unrealized gain (loss) on long-term investments represents the fair market value adjustments of the Company’s investments in Agenus, Calithera, Merus and Syros.

Net income GAAP net income for the quarter ended June 30, 2019 was $105 million, or $0.49 per basic and $0.48 per diluted share, as compared to net income of $52 million, or $0.25 per basic and $0.24 per diluted share for the same period in 2018. GAAP net income for the six months ended June 30, 2019 was $208 million, or $0.97 per basic and $0.96 per diluted share, as compared to net income of $11 million, or $0.05 per basic and diluted share for the same period in 2018.

Non-GAAP net income for the quarter ended June 30, 2019 was $162 million, or $0.76 per basic and $0.75 per diluted share, as compared to Non-GAAP net income of $136 million, or $0.64 per basic and $0.63 per diluted share for the same period in 2018. Non-GAAP net income for the six months ended June 30, 2019 was $297 million, or $1.39 per basic and $1.37 per diluted share, as compared to Non-GAAP net income of $121 million, or $0.57 per basic and $0.56 per diluted share for the same period in 2018.

Cash, cash equivalents and marketable securities position As of June 30, 2019 and December 31, 2018, cash, cash equivalents and marketable securities totaled $1.7 billion and $1.4 billion, respectively.

2019 Financial Guidance

The Company has updated its full year 2019 financial guidance, as detailed below.

Unchanged

(1) Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc. and the estimated cost of stock-based compensation.
(2) Adjusted to exclude the estimated cost of stock-based compensation.
(3) Adjusted to exclude the change in fair value of estimated future royalties relating to sales of Iclusig in the licensed territory relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.

Future Non-GAAP financial measures may also exclude impairment of goodwill or other assets, changes in the fair value of equity investments in our collaboration partners, non-cash interest expense related to the amortization of the initial discount on our 2020 Senior Notes and the impact on our tax provision of discrete changes in our valuation allowance position on deferred tax assets.

Conference Call and Webcast Information

Incyte will hold a conference call and webcast this morning at 8:00 a.m. EDT. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13692111.

If you are unable to participate, a replay of the conference call will be available for 30 days. The replay dial-in number for the United States is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference identification number, 13692111.

The conference call will also be webcast live and can be accessed at www.incyte.com in the Investors section under "Events and Presentations".