On July 30, 2019 Eli Lilly and Company (NYSE: LLY) reported that Verzenio (abemaciclib) demonstrated a statistically significant improvement in overall survival in the Phase 3 MONARCH 2 clinical trial (Press release, Eli Lilly, JUL 30, 2019, View Source [SID1234537878]). These results were from a pre-planned interim analysis and are definitive. MONARCH 2 evaluated Verzenio in combination with fulvestrant for the treatment of women with hormone receptor-positive (HR+), human epidermal growth factor receptor 2-negative (HER2-) advanced or metastatic breast cancer previously treated with endocrine therapy. The study included both pre/peri- and postmenopausal women.

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The analysis showed that treatment with Verzenio in combination with fulvestrant met its secondary endpoint of overall survival. The MONARCH 2 study previously demonstrated a statistically significant improvement in progression-free survival, the trial’s primary endpoint which served as the basis for its approval of this regimen in more than 50 countries around the world. No new safety signals were observed in this analysis of MONARCH 2, consistent with the established safety profile of Verzenio.

"I believe we must continue to fight this devastating disease because the women who are living with metastatic breast cancer want to do everything they can to lead more fulfilling lives and be there for those who need them most," said Anne White, president, Lilly Oncology. "While Verzenio had already shown an impressive benefit for progression-free survival, we are delighted that Verzenio is the first and only CDK4 & 6 inhibitor in combination with fulvestrant that has significantly extended life for both pre/peri- and postmenopausal women."

Lilly plans to submit these data to regulatory authorities and present the detailed data at an upcoming medical meeting later this year.

"This definitive overall survival analysis from MONARCH 2 showed significant improvement in overall survival for women living with HR+, HER2- metastatic breast cancer, a complex disease that remains incurable," said Maura Dickler, M.D., vice president, late stage development, Lilly Oncology. "For many doctors and patients overall survival is the most important endpoint. It’s been difficult in the past to achieve meaningful improvements in this endpoint for women with advanced breast cancer, including those whose cancer progressed after prior endocrine therapy."

About MONARCH 2
MONARCH 2 is a Phase 3, randomized, double-blind, placebo-controlled trial that enrolled 669 patients with HR+, HER2- metastatic breast cancer who progressed on endocrine therapy. Patients were randomized 2:1 to Verzenio plus fulvestrant or placebo plus fulvestrant. Verzenio was dosed on a continuous dosing schedule until disease progression or unacceptable toxicity. The primary endpoint was progression-free survival (PFS). Key secondary endpoints were objective response rate (ORR), overall survival (OS), and duration of response (DoR). Patients enrolled in the study had experienced disease progression on or within 12 months of receiving endocrine treatment in the neoadjuvant or adjuvant setting or while receiving first-line endocrine therapy for metastatic disease. Patients could not have received chemotherapy or more than one line of endocrine therapy for metastatic breast cancer.

About Advanced Breast Cancer
Breast cancer is the most common cancer in women worldwide, with more than 2 million new cases diagnosed in 2018.1 An estimated 268,600 new cases of invasive breast cancer are expected to be diagnosed in women in the U.S. in 2019.2 Advanced breast cancer includes metastatic breast cancer, meaning cancer that has spread from the breast tissue to other parts of the body, and locally or regionally advanced breast cancer, meaning the cancer has grown outside the organ where it started but has not yet spread to other parts of the body.3 Of all early stage breast cancer cases diagnosed in the U.S., approximately 30 percent will become metastatic4 and an estimated 6 to 10 percent of all new breast cancer cases are initially diagnosed as being metastatic.5 Survival is lower among women with a more advanced stage at diagnosis: five-year relative survival is 99 percent for localized disease, 85 percent for regional disease, and 27 percent for metastatic disease.6 Other factors, such as tumor size, also impact five-year survival estimates.6

About Verzenio (abemaciclib)
Verzenio (abemaciclib) is an inhibitor of cyclin-dependent kinases (CDK)4 & 6, which are activated by binding to D-cyclins. In estrogen receptor-positive (ER+) breast cancer cell lines, cyclin D1 and CDK4 & 6 promote phosphorylation of the retinoblastoma protein (Rb), cell cycle progression, and cell proliferation.

In vitro, continuous exposure to Verzenio inhibited Rb phosphorylation and blocked progression from G1 to S phase of the cell cycle, resulting in senescence and apoptosis (cell death). Preclinically, Verzenio dosed daily without interruption resulted in reduction of tumor size. Inhibiting CDK4 & 6 in healthy cells can result in side effects, some of which may be serious. Clinical evidence also suggests that Verzenio crosses the blood-brain barrier. In patients with advanced cancer, including breast cancer, concentrations of Verzenio and its active metabolites (M2 and M20) in cerebrospinal fluid are comparable to unbound plasma concentrations.

Verzenio is Lilly’s first solid oral dosage form to be made using a faster, more efficient process known as continuous manufacturing. Continuous manufacturing is a new and advanced type of manufacturing within the pharmaceutical industry, and Lilly is one of the first companies to use this technology.

INDICATION
Verzenio is indicated for the treatment of HR+, HER2- advanced or metastatic breast cancer:

in combination with an aromatase inhibitor for postmenopausal women as initial endocrine-based therapy
in combination with fulvestrant for women with disease progression following endocrine therapy
as a single agent for adult patients with disease progression following endocrine therapy and prior chemotherapy in the metastatic setting
IMPORTANT SAFETY INFORMATION
Diarrhea occurred in 81% of patients receiving Verzenio plus an aromatase inhibitor in MONARCH 3, 86% of patients receiving Verzenio plus fulvestrant in MONARCH 2 and 90% of patients receiving Verzenio alone in MONARCH 1. Grade 3 diarrhea occurred in 9% of patients receiving Verzenio plus an aromatase inhibitor in MONARCH 3, 13% of patients receiving Verzenio plus fulvestrant in MONARCH 2 and in 20% of patients receiving Verzenio alone in MONARCH 1. Episodes of diarrhea have been associated with dehydration and infection.

Diarrhea incidence was greatest during the first month of Verzenio dosing. In MONARCH 3, the median time to onset of the first diarrhea event was 8 days, and the median duration of diarrhea for Grades 2 and 3 were 11 and 8 days, respectively. In MONARCH 2, the median time to onset of the first diarrhea event was 6 days, and the median duration of diarrhea for Grades 2 and 3 were 9 days and 6 days, respectively. In MONARCH 3, 19% of patients with diarrhea required a dose omission and 13% required a dose reduction. In MONARCH 2, 22% of patients with diarrhea required a dose omission and 22% required a dose reduction. The time to onset and resolution for diarrhea were similar across MONARCH 3, MONARCH 2, and MONARCH 1.

Instruct patients that at the first sign of loose stools, they should start antidiarrheal therapy such as loperamide, increase oral fluids, and notify their healthcare provider for further instructions and appropriate follow-up. For Grade 3 or 4 diarrhea, or diarrhea that requires hospitalization, discontinue Verzenio until toxicity resolves to ≤Grade 1, and then resume Verzenio at the next lower dose.

Neutropenia occurred in 41% of patients receiving Verzenio plus an aromatase inhibitor in MONARCH 3, 46% of patients receiving Verzenio plus fulvestrant in MONARCH 2 and 37% of patients receiving Verzenio alone in MONARCH 1. A Grade ≥3 decrease in neutrophil count (based on laboratory findings) occurred in 22% of patients receiving Verzenio plus an aromatase inhibitor in MONARCH 3, 32% of patients receiving Verzenio plus fulvestrant in MONARCH 2 and in 27% of patients receiving Verzenio alone in MONARCH 1. In MONARCH 3, the median time to first episode of Grade ≥3 neutropenia was 33 days, and in MONARCH 2 and MONARCH 1, was 29 days. In MONARCH 3, median duration of Grade ≥3 neutropenia was 11 days, and for MONARCH 2 and MONARCH 1 was 15 days.

Monitor complete blood counts prior to the start of Verzenio therapy, every 2 weeks for the first 2 months, monthly for the next 2 months, and as clinically indicated. Dose interruption, dose reduction, or delay in starting treatment cycles is recommended for patients who develop Grade 3 or 4 neutropenia.

Febrile neutropenia has been reported in <1% of patients exposed to Verzenio in the MONARCH studies. Two deaths due to neutropenic sepsis were observed in MONARCH 2. Inform patients to promptly report any episodes of fever to their healthcare provider.

Grade ≥3 increases in alanine aminotransferase (ALT) (6% versus 2%) and aspartate aminotransferase (AST) (3% versus 1%) were reported in the Verzenio and placebo arms, respectively, in MONARCH 3. Grade ≥3 increases in ALT (4% versus 2%) and AST (2% versus 3%) were reported in the Verzenio and placebo arms respectively, in MONARCH 2.

In MONARCH 3, for patients receiving Verzenio plus an aromatase inhibitor with Grade ≥3 increases in ALT or AST, median time to onset was 61 and 71 days, respectively, and median time to resolution to Grade <3 was 14 and 15 days, respectively. In MONARCH 2, for patients receiving Verzenio plus fulvestrant with Grade ≥3 increases in ALT or AST, median time to onset was 57 and 185 days, respectively, and median time to resolution to Grade <3 was 14 and 13 days, respectively.

For assessment of potential hepatotoxicity, monitor liver function tests (LFTs) prior to the start of Verzenio therapy, every 2 weeks for the first 2 months, monthly for the next 2 months, and as clinically indicated. Dose interruption, dose reduction, dose discontinuation, or delay in starting treatment cycles is recommended for patients who develop persistent or recurrent Grade 2, or Grade 3 or 4, hepatic transaminase elevation.

Venous thromboembolic events were reported in 5% of patients treated with Verzenio plus an aromatase inhibitor as compared to 0.6% of patients treated with an aromatase inhibitor plus placebo in MONARCH 3. Venous thromboembolic events were reported in 5% of patients treated with Verzenio plus fulvestrant in MONARCH 2 as compared to 0.9% of patients treated with fulvestrant plus placebo. Venous thromboembolic events included deep vein thrombosis, pulmonary embolism, pelvic venous thrombosis, cerebral venous sinus thrombosis, subclavian and axillary vein thrombosis, and inferior vena cava thrombosis. Across the clinical development program, deaths due to venous thromboembolism have been reported. Monitor patients for signs and symptoms of venous thrombosis and pulmonary embolism and treat as medically appropriate.

Verzenio can cause fetal harm when administered to a pregnant woman based on findings from animal studies and the mechanism of action. In animal reproduction studies, administration of abemaciclib to pregnant rats during the period of organogenesis caused teratogenicity and decreased fetal weight at maternal exposures that were similar to the human clinical exposure based on area under the curve (AUC) at the maximum recommended human dose. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment with Verzenio and for at least 3 weeks after the last dose. There are no data on the presence of Verzenio in human milk or its effects on the breastfed child or on milk production. Advise lactating women not to breastfeed during Verzenio treatment and for at least 3 weeks after the last dose because of the potential for serious adverse reactions in breastfed infants. Based on findings in animals, Verzenio may impair fertility in males of reproductive potential.

The mostcommon adverse reactions (all grades, ≥10%) observed in MONARCH 3 for Verzenio plus anastrozole or letrozole and ≥2% higher than placebo plus anastrozole or letrozole vs placebo plus anastrozole or letrozole were diarrhea (81% vs 30%), neutropenia (41% vs 2%), fatigue (40% vs 32%), infections (39% vs 29%), nausea (39% vs 20%), abdominal pain (29% vs 12%), vomiting (28% vs 12%), anemia (28% vs 5%), alopecia (27% vs 11%), decreased appetite (24% vs 9%), leukopenia (21% vs 2%), creatinine increased (19% vs 4%), constipation (16% vs 12%), ALT increased (16% vs 7%), AST increased (15% vs 7%), rash (14% vs 5%), pruritus (13% vs 9%), cough (13% vs 9%), dyspnea (12% vs 6%), dizziness (11% vs 9%), weight decreased (10% vs 3%), influenza-like illness (10% vs 8%), and thrombocytopenia (10% vs 2%).

The most common adverse reactions (all grades, ≥10%) observed in MONARCH 2 for Verzenio plus fulvestrant and ≥2% higher than placebo plus fulvestrant vs placebo plus fulvestrant were diarrhea (86% vs 25%), neutropenia (46% vs 4%), fatigue (46% vs 32%), nausea (45% vs 23%), infections (43% vs 25%), abdominal pain (35% vs 16%), anemia (29% vs 4%), leukopenia (28% vs 2%), decreased appetite (27% vs 12%), vomiting (26% vs 10%), headache (20% vs 15%), dysgeusia (18% vs 3%), thrombocytopenia (16% vs 3%), alopecia (16% vs 2%), stomatitis (15% vs 10%), ALT increased (13% vs 5%), pruritus (13% vs 6%), cough (13% vs 11%), dizziness (12% vs 6%), AST increased (12% vs 7%), peripheral edema (12% vs 7%), creatinine increased (12% vs <1%), rash (11% vs 4%), pyrexia (11% vs 6%), and weight decreased (10% vs 2%).

The most common adverse reactions (all grades, ≥10%) observed in MONARCH 1 with Verzenio were diarrhea (90%), fatigue (65%), nausea (64%), decreased appetite (45%), abdominal pain (39%), neutropenia (37%), vomiting (35%), infections (31%), anemia (25%), thrombocytopenia (20%), headache (20%), cough (19%), leukopenia (17%), constipation (17%), arthralgia (15%), dry mouth (14%), weight decreased (14%), stomatitis (14%), creatinine increased (13%), alopecia (12%), dysgeusia (12%), pyrexia (11%), dizziness (11%), and dehydration (10%).

The most frequently reported ≥5% Grade 3 or 4 adverse reactions that occurred in the Verzenio arm vs the placebo arm of MONARCH 3 were neutropenia (22% vs 2%), diarrhea (9% vs 1%), leukopenia (8% vs <1%), ALT increased (7% vs 2%), and anemia (6% vs 1%).

The most frequently reported ≥5% Grade 3 or 4 adverse reactions that occurred in the Verzenio arm vs the placebo arm of MONARCH 2 were neutropenia (27% vs 2%), diarrhea (13% vs <1%), leukopenia (9% vs 0%), anemia (7% vs 1%), and infections (6% vs 3%).

The most frequently reported ≥5% Grade 3 or 4 adverse reactions from MONARCH 1 with Verzenio were neutropenia (24%), diarrhea (20%), fatigue (13%), infections (7%), leukopenia (6%), anemia (5%), and nausea (5%).

Lab abnormalities (all grades; Grade 3 or 4) for MONARCH 3 in ≥10% for Verzenio plus anastrozole or letrozole and ≥2% higher than placebo plus anastrozole or letrozole vs placebo plus anastrozole or letrozole were increased serum creatinine (98% vs 84%; 2% vs 0%), decreased white blood cells (82% vs 27%; 13% vs <1%), anemia (82% vs 28%; 2% vs 0%), decreased neutrophil count (80% vs 21%; 22% vs 3%), decreased lymphocyte count (53% vs 26%; 8% vs 2%), decreased platelet count (36% vs 12%; 2% vs <1%), increased ALT (48% vs 25%; 7% vs 2%), and increased AST (37% vs 23%; 4% vs <1%).

Lab abnormalities (all grades; Grade 3 or 4) for MONARCH 2 in ≥10% for Verzenio plus fulvestrant and ≥2% higher than placebo plus fulvestrant vs placebo plus fulvestrant were increased serum creatinine (98% vs 74%; 1% vs 0%), decreased white blood cells (90% vs 33%; 23% vs 1%), decreased neutrophil count (87% vs 30%; 33% vs 4%), anemia (84% vs 33%; 3% vs <1%), decreased lymphocyte count (63% vs 32%; 12% vs 2%), decreased platelet count (53% vs 15%; 2% vs 0%), increased ALT (41% vs 32%; 5% vs 1%), and increased AST (37% vs 25%; 4% vs 4%).

Lab abnormalities (all grades; Grade 3 or 4) for MONARCH 1 with Verzenio were increased serum creatinine (98%; <1%), decreased white blood cells (91%; 28%), decreased neutrophil count (88%; 27%), anemia (68%; 0%), decreased lymphocyte count (42%; 14%), decreased platelet count (41%; 2%), increased ALT (31%; 3%), and increased AST (30%; 4%).

Strong and moderate CYP3A inhibitors increased the exposure of abemaciclib plus its active metabolites to a clinically meaningful extent and may lead to increased toxicity. Avoid concomitant use of the strong CYP3A inhibitor ketoconazole. Ketoconazole is predicted to increase the AUC of abemaciclib by up to 16-fold. In patients with recommended starting doses of 200 mg twice daily or 150 mg twice daily, reduce the Verzenio dose to 100 mg twice daily with concomitant use of strong CYP3A inhibitors other than ketoconazole. In patients who have had a dose reduction to 100 mg twice daily due to adverse reactions, further reduce the Verzenio dose to 50 mg twice daily with concomitant use of strong CYP3A inhibitors. If a patient taking Verzenio discontinues a strong CYP3A inhibitor, increase the Verzenio dose (after 3 to 5 half-lives of the inhibitor) to the dose that was used before starting the inhibitor. With concomitant use of moderate CYP3A inhibitors, monitor for adverse reactions and consider reducing the Verzenio dose in 50 mg decrements. Patients should avoid grapefruit products.

Avoid concomitant use of strong or moderate CYP3A inducers and consider alternative agents. Coadministration of strong or moderate CYP3A inducers decreased the plasma concentrations of abemaciclib plus its active metabolites and may lead to reduced activity.

With severe hepatic impairment (Child-Pugh Class C), reduce the Verzenio dosing frequency to once daily. The pharmacokinetics of Verzenio in patients with severe renal impairment (CLcr <30 mL/min), end stage renal disease, or in patients on dialysis is unknown. No dosage adjustments are necessary in patients with mild or moderate hepatic (Child-Pugh A or B) and/or renal impairment (CLcr ≥30-89 mL/min).

Please see full Prescribing Information for Verzenio.

On July 30, 2019 Karyopharm Therapeutics Inc. (Nasdaq:KPTI), an oncology-focused pharmaceutical company, reported that it will report second quarter 2019 financial results on Tuesday, August 6, 2019 (Press release, Karyopharm, JUL 30, 2019, View Source [SID1234537896]). Karyopharm’s management team will host a conference call and audio webcast at 8:30 a.m. ET on Tuesday August 6, 2019 to discuss the financial results and other company updates.

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To access the conference call, please dial (855) 437-4406 (local) or (484) 756-4292 (international) at least 10 minutes prior to the start time and refer to conference ID 5550468. A live audio webcast of the call will be available under "Events & Presentations" in the Investor section of the Company’s website, View Source An archived webcast will be available on the Company’s website approximately two hours after the event.

On July 30, 2019 Eli Lilly and Company (NYSE: LLY) reported financial results for the second quarter of 2019 (Press release, Eli Lilly, JUL 30, 2019, View Source [SID1234537879]).

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Certain financial information for 2019 and 2018 is presented on both a reported and a non-GAAP basis. Some numbers in this press release may not add due to rounding. Reported results were prepared in accordance with U.S. generally accepted accounting principles (GAAP), include all revenue and expenses recognized during the periods, and reflect Elanco Animal Health (Elanco) as discontinued operations for all periods presented. Non-GAAP measures reflect adjustments for the items described in the reconciliation tables later in the release, and assume that the disposition of Elanco occurred at the beginning of all periods presented (including the benefit from the reduction in shares of common stock outstanding). The company’s 2019 financial guidance is being provided on both a reported and a non-GAAP basis. The non-GAAP measures are presented to provide additional insights into the underlying trends in the company’s business.

"Lilly’s portfolio of newer medicines reached more patients in the second quarter, allowing the company to grow revenue despite headwinds, including the expiration of the U.S. patent for Cialis," said David A. Ricks, Lilly’s chairman and CEO. "We are continuing to make significant investments in our business to ensure the success of our recent product launches. At the same time, we are expanding investment in our pipeline in order to develop new medicines that have the potential to more effectively treat patients that have diabetes, cancer, autoimmune disorders and other serious conditions."

Key Events Over the Last Three Months

Regulatory

The U.S. Food and Drug Administration (FDA) approved Cyramza as a single agent for the treatment of patients with hepatocellular carcinoma (HCC) who have an alpha-fetoprotein (AFP) of ≥400 ng/mL and have been treated with sorafenib.
The FDA approved Emgality for the treatment of episodic cluster headache in adults.
The FDA approved Baqsimi (glucagon) nasal powder 3 mg for the treatment of severe hypoglycemia in people with diabetes ages four years and above.
The FDA granted Fast Track designation to empagliflozin for the reduction of the risk of cardiovascular death and hospitalization for heart failure in people with chronic heart failure.
Based on an assessment of the totality of subcutaneous tanezumab data and an initial discussion with the FDA during second-quarter 2019, the company and Pfizer have decided to pursue a U.S. regulatory submission for tanezumab in patients with moderate-to-severe osteoarthritis that is expected to be filed with the FDA by the first quarter of 2020, to be followed by potential regulatory filings in the EU and Japan. At this time, regulatory submissions are not planned for tanezumab in patients with moderate-to-severe chronic low back pain. The company and Pfizer intend to maintain an open dialogue with regulatory authorities on potential future regulatory pathways for tanezumab.
Clinical

The company announced that Verzenio demonstrated a statistically significant improvement in overall survival in a Phase 3 clinical trial evaluating Verzenio in combination with fulvestrant for the treatment of women with hormone receptor-positive (HR+), human epidermal growth factor receptor 2-negative (HER2-) advanced or metastatic breast cancer previously treated with endocrine therapy. The results were from a pre-planned interim analysis and are definitive. The company plans to submit these data to regulatory authorities and present the detailed data at an upcoming medical meeting later this year.
The company announced that the clinical trial studying higher investigational doses (3.0 mg and 4.5 mg) of Trulicity met its primary efficacy endpoint of superiority, significantly reducing HbA1c from baseline in people with type 2 diabetes, compared to once-weekly Trulicity 1.5 mg after 36 weeks. The trial also met the secondary efficacy endpoint for superiority on weight reduction. The safety and tolerability profile of the investigational dulaglutide doses was consistent with the known profile of Trulicity 1.5 mg. The clinical trial will continue through 52 weeks to evaluate longer-term safety data and is expected to complete in late 2019. The company plans to submit to regulatory authorities by late 2019 and will share detailed results at a future date.
Business Development/Other Developments

The company announced a license agreement to acquire the exclusive worldwide rights for CNTX-0290 from Centrexion Therapeutics Corporation. CNTX-0290 is a novel, small molecule somatostatin receptor type 4 agonist that is currently being studied in Phase 1 clinical testing as a potential non-opioid treatment for chronic pain conditions.
Second-Quarter Reported Results

In the second quarter of 2019, worldwide revenue was $5.637 billion, an increase of 1 percent compared with the second quarter of 2018. The increase in revenue was driven by a 6 percent increase due to volume, partially offset by a 3 percent decrease due to lower realized prices, and a 2 percent decrease due to the unfavorable impact of foreign exchange rates.

Revenue in the U.S. was essentially flat at $3.253 billion, as increased volume of 5 percent was almost entirely offset by lower realized prices. Increased U.S. volume for key growth products including Trulicity, Taltz, Jardiance, Verzenio, Basaglar, and Emgality, was largely offset by decreased volume for products that have lost exclusivity, including Cialis and Adcirca, as well as the impact from the impending product withdrawal of Lartruvo. U.S. prices were negatively impacted by increased coverage gap funding requirements in Medicare Part D, primarily driven by Trulicity and Humalog.

Revenue outside the U.S. increased 2 percent, to $2.384 billion, driven by increased volume of 9 percent, which was primarily from key growth products, including Trulicity, Olumiant, Taltz, Jardiance, and Verzenio. The increase in revenue due to volume was largely offset by the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices.

Gross margin increased 4 percent, to $4.512 billion, in the second quarter of 2019 compared with the second quarter of 2018. Gross margin as a percent of revenue was 80.0 percent, an increase of 2.1 percentage points compared with the second quarter of 2018. The increase in gross margin percent was primarily due to the favorable effect of foreign exchange rates on international inventories sold, lower intangibles amortization expense and greater manufacturing efficiencies, partially offset by unfavorable product mix and the impact of lower realized prices on revenue.

Operating expenses in the second quarter of 2019, defined as the sum of research and development and marketing, selling, and administrative expenses, increased 8 percent to $2.989 billion compared with the second quarter of 2018. Research and development expenses increased 10 percent to $1.402 billion, or 24.9 percent of revenue, driven by higher development expenses for late-stage assets. Marketing, selling, and administrative expenses increased 7 percent, to $1.586 billion, primarily due to increased marketing expenses to support the recent U.S. launch of Emgality, as well as other key growth products.

In the second quarter of 2019, the company recognized acquired in-process research and development charges of $25.0 million, related to the previously announced business development transaction with Avidity Biosciences, Inc. In the second quarter of 2018, the company recognized acquired in-process research and development charges of $1.624 billion, related to the acquisitions of ARMO BioSciences and AurKa Pharma, as well as a collaboration with Sigilon Therapeutics.

Operating income (loss) in the second quarter of 2019 was income of $1.498 billion, compared to a loss of $4.9 million in the second quarter of 2018. The increase in operating income was primarily driven by lower acquired in-process research and development charges.

Other income (expense) was expense of $32.4 million in the second quarter of 2019, compared with income of $46.6 million in the second quarter of 2018. The decrease in other income was primarily driven by higher net interest expense.

The effective tax rate was 9.5 percent in the second quarter of 2019, reflecting a net discrete tax benefit resulting from the resolution of certain global income tax audits. During the second quarter of 2018, the company incurred $273.3 million of tax expense, despite earning $41.7 million of income before taxes, as a result of the non-deductible acquired in-process research and development charges totaling $1.558 billion related to the acquisitions of ARMO BioSciences and AurKa Pharma.

In the second quarter of 2019, net income and earnings per share were $1.327 billion and $1.44, respectively, compared with a net loss of $259.9 million and loss per share of $0.25 in the second quarter of 2018. The increases in net income and earnings per share in the second quarter of 2019 were primarily driven by lower acquired in-process research and development charges. Earnings per share in the second quarter of 2019 benefited compared to the second quarter of 2018 as a result of the Elanco exchange offer and share repurchases.

Second-Quarter Non-GAAP Measures

On a non-GAAP basis, second-quarter 2019 gross margin increased 2 percent, to $4.563 billion compared with the second quarter of 2018. Gross margin as a percent of revenue was 81.0 percent, an increase of 1.2 percentage points. The increase in gross margin percent was primarily due to the favorable effect of foreign exchange rates on international inventories sold and greater manufacturing efficiencies, partially offset by unfavorable product mix and the impact of lower realized prices on revenue.

Operating income on a non-GAAP basis decreased $122.7 million, or 7 percent, to $1.575 billion in the second quarter of 2019 compared with the second quarter of 2018, due to higher operating expenses, partially offset by higher gross margin.

The effective tax rate on a non-GAAP basis was 10.0 percent in the second quarter of 2019, compared with 16.7 percent in the second quarter of 2018. The lower effective tax rate for the second quarter of 2019 was primarily driven by a net discrete tax benefit resulting from the resolution of certain global income tax audits, as well as timing associated with the impact of U.S. tax reform.

On a non-GAAP basis, in the second quarter of 2019, net income decreased 3 percent, to $1.388 billion, while earnings per share increased 1 percent, to $1.50, compared with $1.431 billion and $1.48, respectively, in the second quarter of 2018. The decrease in net income was driven by lower operating income and, to a lesser extent, lower other income, partially offset by lower tax expense. Earnings per share increased due to a reduction in weighted average shares outstanding resulting from the company’s share repurchase program. Non-GAAP weighted average shares outstanding for both periods have been reduced by the approximately 65 million shares retired in the Elanco exchange offer.

For further detail of non-GAAP measures, see the reconciliation below as well as the Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information table later in this press release.

Numbers may not add due to rounding.

(a) Non-GAAP earnings per share assume that the disposition of Elanco occurred at the beginning of all periods presented and, therefore, exclude the approximately 65.0 million shares of Lilly common stock retired in the Elanco exchange offer.

Year-to-Date Reported Results

For the first six months of 2019, worldwide revenue increased 2 percent, to $10.729 billion, compared with $10.549 billion in the same period in 2018. Reported net income and earnings per share for the first six months of 2019 were $5.569 billion and $5.84, respectively, compared with $957.5 million and $0.92 in the same period of 2018. The increases in net income and earnings per share in the first six months of 2019 were driven primarily by the gain recognized on the disposition of Elanco Animal Health.

Year-to-Date Non-GAAP Measures

For the first six months of 2019, net income and earnings per share, on a non-GAAP basis, were $2.625 billion and $2.83, respectively, compared with $2.721 billion and $2.79 in the same period of 2018.

For further detail of non-GAAP measures, see the reconciliation below as well as the Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information table later in this press release.

Numbers may not add due to rounding.

(a) Non-GAAP earnings per share assume that the disposition of Elanco occurred at the beginning of all periods presented and, therefore, exclude the approximately 65.0 million shares of Lilly common stock retired in the Elanco exchange offer.

(a) Humalog includes Insulin Lispro

(b) Jardiance includes Glyxambi and Synjardy

NM – not meaningful; Numbers may not add due to rounding

Trulicity

Second-quarter 2019 worldwide Trulicity revenue was $1.029 billion, an increase of 32 percent compared with the second quarter of 2018. U.S. revenue increased 29 percent, to $792.1 million, driven by increased demand, partially offset by lower realized prices due to higher contracted rebates, increased coverage gap funding requirements in Medicare Part D, and changes in segment mix. Revenue outside the U.S. was $236.4 million, an increase of 41 percent, driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices.

Humalog

For the second quarter of 2019, worldwide Humalog revenue decreased 12 percent compared with the second quarter of 2018, to $677.6 million. Revenue in the U.S. decreased 15 percent, to $396.1 million, driven by lower realized prices due to higher contracted rebates, increased coverage gap funding requirements in Medicare Part D, and the impact of patient affordability programs, and, to a lesser extent, decreased demand. Revenue outside the U.S. decreased 8 percent, to $281.5 million, driven primarily by the unfavorable impact of foreign exchange rates and, to a lesser extent, decreased volume.

Alimta

For the second quarter of 2019, worldwide Alimta revenue increased 4 percent compared with the second quarter of 2018, to $577.8 million. U.S. revenue increased 21 percent, to $341.7 million, primarily driven by increased demand and, to a lesser extent, the impact of buying patterns. Revenue outside the U.S. decreased 14 percent to $236.1 million, driven by decreased volume resulting from the entry of generic pemetrexed in Germany and, to a lesser extent, the unfavorable impact of foreign exchange rates.

Forteo

For the second quarter of 2019, worldwide Forteo revenue decreased 17 percent compared with the second quarter of 2018, to $360.8 million. U.S. revenue decreased 23 percent, to $172.8 million, driven by decreased demand and, to a lesser extent, lower realized prices. Revenue outside the U.S. decreased 10 percent to $188.0 million, driven by the unfavorable impact of foreign exchange rates and decreased volume.

Humulin

For the second quarter of 2019, worldwide Humulin revenue decreased 7 percent compared with the second quarter of 2018, to $322.6 million. U.S. revenue decreased 8 percent, to $220.1 million, driven by lower realized prices due to higher contracted rebates, changes in segment mix, and increased coverage gap funding in Medicare Part D, partially offset by increased demand. Revenue outside the U.S. decreased 4 percent, to $102.6 million, due to the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices, partially offset by increased volume.

Taltz

For the second quarter of 2019, worldwide Taltz revenue was $353.8 million, an increase of 61 percent compared with the second quarter of 2018. U.S. revenue was $268.1 million, an increase of 54 percent, driven by increased demand. Revenue outside the U.S. was $85.7 million, an increase of 84 percent, primarily driven by increased volume from recent launches, partially offset by the unfavorable impact of foreign exchange rates.

Basaglar

For the second quarter of 2019, Basaglar generated worldwide revenue of $290.7 million, an increase of 44 percent compared with the second quarter of 2018. U.S. revenue was $232.2 million, an increase of 48 percent, driven by higher realized prices and increased demand. Revenue outside the U.S. was $58.6 million, an increase of 29 percent, driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates. Basaglar is part of the company’s alliance with Boehringer Ingelheim, and Lilly reports total sales of Basaglar as revenue, with payments made to Boehringer Ingelheim for its portion of the gross margin reported as cost of sales.

Cialis

For the second quarter of 2019, worldwide Cialis revenue decreased 63 percent compared with the second quarter of 2018, to $200.2 million. U.S. revenue was $35.1 million in the second quarter, a 90 percent decrease compared with the second quarter of 2018, driven by decreased demand due to generic competition. Revenue outside the U.S. decreased 14 percent to $165.1 million, driven by decreased demand due to generic competition, the unfavorable impact of foreign exchange rates and, to a lesser extent, lower realized prices.

Cyramza

For the second quarter of 2019, worldwide Cyramza revenue was $241.8 million, an increase of 11 percent compared with the second quarter of 2018. U.S. revenue was $89.8 million, an increase of 19 percent, primarily driven by increased demand. Revenue outside the U.S. was $152.0 million, an increase of 6 percent, driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates.

Jardiance

The company’s worldwide Jardiance revenue during the second quarter of 2019 was $231.9 million, an increase of 58 percent compared with the second quarter of 2018. U.S. revenue increased 67 percent, to $142.6 million, driven by increased demand. Revenue outside the U.S. was $89.3 million, an increase of 45 percent, driven by increased volume, partially offset by the unfavorable impact of foreign exchange rates. Jardiance is part of the company’s alliance with Boehringer Ingelheim, and Lilly reports as revenue a portion of Jardiance’s gross margin.

Verzenio

For the second quarter of 2019, Verzenio generated worldwide revenue of $133.9 million, an increase of $24.5 million compared with the first quarter of 2019. U.S. revenue was $105.2 million, an increase of $11.7 million compared with the first quarter of 2019, primarily driven by increased demand. Revenue outside the U.S. was $28.7 million, an increase of $12.7 million compared with the first quarter of 2019.

Olumiant

For the second quarter of 2019, Olumiant generated worldwide revenue of $102.4 million. U.S. revenue was $10.7 million. Revenue outside the U.S. was $91.7 million, an increase of $48.7 million compared with the second quarter of 2018, driven by increased demand, partially offset by the unfavorable impact of foreign exchange rates.

Emgality

For the second quarter of 2019, Emgality generated worldwide revenue of $34.3 million, an increase of $20.1 million compared with the first quarter of 2019. U.S. revenue was $33.8 million, an increase of $21.7 million compared with the first quarter of 2019. Emgality launched in certain international markets in the first quarter of 2019 and generated revenue outside of the U.S. of $0.5 million in the second quarter of 2019.

2019 Financial Guidance

The company has updated certain elements of its 2019 financial guidance. On a reported basis, earnings per share for 2019 are now expected to be in the range of $8.58 to $8.68. On a non-GAAP basis, earnings per share are now expected to be in the range of $5.67 to $5.77.

Following the disposition of the company’s remaining ownership in Elanco Animal Health, Elanco’s financial results were no longer included in Lilly’s financial results beginning March 12, 2019. On a reported basis, the 2019 financial guidance outlined below includes the financial results of the Elanco business from January 1, 2019 to March 11, 2019 as discontinued operations, including the gain on the disposition of Elanco. The company’s 2019 non-GAAP financial guidance excludes the discontinued operations results for Elanco.

The company still anticipates 2019 revenue between $22.0 billion and $22.5 billion. Revenue growth is expected to be driven by volume from key growth products including Trulicity, Taltz, Basaglar, Jardiance, Verzenio, Cyramza and Olumiant. Revenue growth is also expected to benefit from the recent launch of Emgality and could benefit from the potential approval and launch of other medicines in 2019. Revenue growth is expected to be partially offset by lower revenue for Cialis and other products that have lost patent exclusivity. Revenue growth is also expected to be partially offset by the negative impact of foreign exchange rates, continued low- to mid-single digit realized price declines in the U.S. driven primarily by rebates and legislated increases to Medicare Part D cost sharing, patient affordability programs, price declines in some international markets and the impact of the impending product withdrawal of Lartruvo.

Gross margin as a percent of revenue rate is still expected to be approximately 79.0 percent on a reported basis and approximately 80.0 percent on a non-GAAP basis.

Non-GAAP adjustments are consistent with the earnings per share table above.

Webcast of Conference Call

As previously announced, investors and the general public can access a live webcast of the second-quarter 2019 financial results conference call through a link on Lilly’s website at www.lilly.com. The conference call will begin at 9:00 a.m. Eastern time (ET) today and will be available for replay via the website.

Lilly is a global healthcare leader that unites caring with discovery to create medicines that make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. F-LLY

This press release contains management’

On July 30, 2019 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported financial results for the three and six months ended June 30, 2019, and provided an operating forecast and program updates (Press release, Ligand, JUL 30, 2019, View Source [SID1234537897]). Ligand management will host a conference call today beginning at 9:00 a.m. Eastern time to discuss this announcement and answer questions.

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"During the quarter we reported positive top-line results from our Phase 1 trial with CE-Iohexol. Sage Therapeutics launched ZULRESSO, and in doing so added another key commercial asset to Ligand’s portfolio. We purchased a synthetic royalty from Novan on SB206, and Novan launched a Phase 3 trial with that compound for the treatment of molluscum contagiosum. Finally, our business development team has been very active in licensing, with two new partnerships from our OmniAb technology, two from our VDP technology and five new or advanced Captisol deals. In addition, this month we closed an acquisition of an antigen discovery company," said John Higgins, Chief Executive Officer of Ligand. "The sources of potential growth within our existing pipeline are rich and diversified, and we anticipate additional positive news flow throughout the remainder of the year. Over the longer term, we expect Ligand’s pipeline to be a significant source of meaningful and diversified cash flow."

Second Quarter 2019 Financial Results

Total revenues for the second quarter of 2019 were $25.0 million, compared with $90.0 million for the same period in 2018. Royalties were $6.6 million, compared with $31.4 million for the second quarter of 2018 and primarily consisted of royalties from Kyprolis and EVOMELA. Royalties in the second quarter of 2018 include royalties from Promacta, which was sold to Royalty Pharma as of March 6, 2019, for $827 million; Ligand did not receive any Promacta royalties in the second quarter of 2019 and will not receive any Promacta royalties going forward. Material sales were $8.5 million, compared with $7.6 million for the same period in 2018 due to the timing of Captisol purchases for use in clinical trials and commercial products. License fees, milestones and other revenues were $9.8 million, compared with $51.0 million for the same period in 2018, which included a $47 million payment from WuXi Biologics to amend its OmniAb platform license agreement.

Cost of material sales was $2.4 million for the second quarter of 2019, compared with $1.1 million for the same period in 2018, due to the timing and mix of Captisol sales. Amortization of intangibles was $3.5 million, compared with $3.3 million for the same period in 2018. Research and development expense was $12.2 million, compared with $6.1 million for the same period of 2018, due to costs associated with the VDP research team acquired recently and non-cash amortization of the upfront investments in the Palvella and Novan programs. General and administrative expense was $11.0 million, compared with $9.3 million for the same period in 2018.

Net loss for the second quarter of 2019 was $14.4 million, or $0.74 per diluted share, compared with net income of $73.2 million, or $2.99 per diluted share, for the same period in 2018. The second quarter of 2019 net loss was affected by a non-cash change in the value of Ligand’s investment in Viking Therapeutics of $12.4 million. Adjusted net income for the second quarter of 2019 was $13.9 million, or $0.68 per diluted share, compared with $60.6 million, or $2.59 per diluted share, for the same period in 2018.

As of June 30, 2019, Ligand had cash, cash equivalents and short-term investments of $1.3 billion, after having spent approximately $105 million on share repurchase and taxes, principally associated with taxes related to the $827 million sale of Promacta.

Year-to-Date Financial Results

Total revenues for the six months ended June 30, 2019 were $68.5 million, compared with $146.2 million for the same period in 2018. Royalties were $26.2 million, compared with $52.2 million for the six months ended June 30, 2018. Royalties for the six months ended June 30, 2019 primarily consisted of royalties from Promacta, Kyprolis and EVOMELA and do not include contribution from Promacta after March 6, 2019, whereas 2018 royalties included a full six months of Promacta royalties. Material sales were $17.5 million, compared with $12.0 million for the same period in 2018, due to the timing of Captisol purchases for use in clinical trials and commercial products. License fees, milestones and other revenues were $24.8 million, compared with $82.0 million for the same period in 2018, which included a $47 million payment from WuXi Biologics to amend its OmniAb platform license agreement as well as a $20 million upfront payment upon the licensing of Ligand’s GRA program.

Cost of material sales was $6.3 million for the six months ended June 30, 2019, compared with $1.9 million for the same period in 2018 due to the timing and mix of Captisol sales. Amortization of intangibles was $7.0 million, compared with $6.6 million for the same period in 2018. Research and development expense was $23.5 million, compared with $13.5 million for the same period of 2018, due to costs associated with recent acquisitions. General and administrative expense was $22.1 million, compared with $16.9 million for the same period in 2018, due to costs associated with recent acquisitions and non-cash stock-based compensation expense.

Net income for the six months ended June 30, 2019 was $651.9 million, or $31.34 per diluted share, compared with $118.4 million, or $4.81 per diluted share, for the same period in 2018. Net income for the six months ended June 30, 2019 was impacted by an after-tax gain of approximately $640 million on the sale of Ligand’s assets and royalty for Promacta to Royalty Pharma. Adjusted net income from continuing operations for the six months ended June 30, 2019 was $38.6 million, or $1.86 per diluted share, compared with $96.2 million, or $4.14 per diluted share, for the same period in 2018.

2019 Financial Guidance

Ligand is affirming its revenue guidance for 2019 with total revenues expected to be approximately $118 million. Ligand is also affirming its existing adjusted earnings per share guidance of approximately $3.20.

Second Quarter 2019 and Recent Business Highlights

OmniAb Platform Updates

Acquisition and New Licenses

Ligand announced the acquisition of Ab Initio Biotherapeutics for $12 million in cash. Ab Initio is a privately held antigen-discovery company based in South San Francisco, California.
Ligand entered into an OmniAb license agreement with Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited. Under the license, Takeda and its affiliates will be able to use OmniAb platform rodents and chickens in campaigns to discover fully human mono- and bispecific antibodies, as well as therapies using engineered cells and OmniAb-derived binders.
Ligand entered into an OmniAb license agreement with GigaGen, Inc., a South San Francisco-based biotherapeutics company, under which GigaGen will be able to use OmniAb platform rodents and chickens to discover fully human mono- and bispecific-antibodies.
Partner Updates

CStone Pharmaceuticals announced dosing of the first patient in a Phase 3 clinical trial assessing OmniAb-derived CS1001 in combination with chemotherapy for the treatment of gastric adenocarcinoma or gastro-esophageal junction adenocarcinoma.
CStone Pharmaceuticals announced the company has entered into a collaboration with Bayer to evaluate CS1001 in combination with Bayer’s regorafenib as a treatment for multiple cancers including gastric cancer.
OmniAb-derived DuoBody-PD-L1x4-1BB was highlighted in GenMab’s U.S. IPO Form S-1 filing and on clintrials.gov.
Immunovant announced presentation of detailed findings in healthy subjects for IMVT-1401 (formerly RVT-1401) in a poster session at the 2019 American Academy of Neurology Annual Meeting and initiated dosing in ASCEND-GO 1, an open-label, single-arm Phase 2a clinical trial evaluating IMVT-1401 in patients with moderate-to-severe active Graves’ ophthalmopathy.
Aptevo Therapeutics provided an update on OmniAb-derived APVO436 and announced that Phase 1 data is anticipated in the fourth quarter of 2019. New preclinical data for APVO436 was also presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) 2019 Annual Meeting.
OmniAb partner xCella Biosciences presented high-throughput functional screening of antibody libraries, highlighting OmniRat and OmniChicken, at the 2019 Protein Engineering Summit (PEGS).
Publications and Presentations

At PEGS 2019, Ligand scientists announced the launch of OmniClic, a novel next-generation common light chain OmniChicken-based antibody discovery technology focused on bispecific antibodies.
Ligand highlighted OmniChicken in a presentation titled "High Throughput SPR Demonstrates that V-lambda Expressing OmniChickens Exhibit Broad Epitope Coverage and Picomolar Affinity" and highlighted OmniClic in a presentation titled "Fixed Light Chain Transgenic Chicken for Bispecific Antibody Discovery" at Antibody Engineering and Therapeutics-Europe conference.
Other Licensing and Acquisition Events

Ligand announced the acquisition of economic rights to SB206 from Novan, Inc. SB206 is a Phase 3 topical antiviral gel for the treatment of skin infections, including molluscum contagiosum. Ligand paid $12 million to Novan and in return is entitled to receive a tiered royalty of 7% to 10%, as well as up to $20 million in regulatory and commercial milestones.
Ligand entered a worldwide license agreement granting Cumulus Oncology exclusive rights to develop and commercialize VER250840, a novel, oral, selective, preclinical Chk1 Kinase Inhibitor discovered using Ligand’s Vernalis Design Platform (VDP). Ligand received an upfront license fee and is eligible to receive more than $76 million of milestone payments, as well as tiered royalties in the mid-to-high single digits and an additional fee based on Cumulus achieving specified financing-related events.
Ligand entered an exclusive commercial license and supply agreement with SQ Innovation AG for use of Ligand’s Captisol technology in the formulation of high-concentration furosemide for the treatment of edema in patients with heart failure. Ligand is eligible to receive potential milestone payments and royalties, as well as revenue from materials sales of Captisol.
Ligand entered a VDP research collaboration agreement with PhoreMost Limited, a private UK-based biotech, on an undisclosed novel oncology target. Ligand and PhoreMost will share revenues from any future out-licenses. Based on Ligand’s contribution and stage of development at the time of licensing, Ligand will be entitled to a scaling interest in license economics.
Ligand recently entered into new Captisol clinical use or commercial license and supply agreements with Millennium/Takeda, Bexon Biomedical, Valanbio Therapeutics and BendaRx Corporation.
Additional Pipeline and Partner Developments

Sage Therapeutics launched ZULRESSO (brexanolone) injection. With this launch, ZULRESSO is the 11th U.S. Food and Drug Administration (FDA)-approved drug to use Ligand’s patented Captisol technology.
Novan announced that the company had exceeded 50% of expected patient enrollment in the company’s ongoing "B-SIMPLE" Phase 3 program evaluating topical nitric oxide product candidate SB206 for the treatment of molluscum contagiosum.
Viking Therapeutics presented new results from the company’s 12-week Phase 2 study of VK2809 in patients with non-alcoholic fatty liver disease and elevated low-density lipoprotein cholesterol at the International Liver Congress 2019.
Metavant has been working with FDA to determine a path forward for the glucagon receptor antagonist or GRA program now known as RVT-1502 in diabetes. Ligand believes that continued development of RVT-1502 for diabetes in the U.S. is highly unlikely based on preclinical and clinical trials now required by FDA for any drug in the GRA class intended for long-term use. Metavant may choose to explore certain other indications and/or geographies for RVT-1502 and expects to make a decision later this year.
Sermonix Pharmaceuticals announced that lasofoxifene has been granted Fast Track designation by the FDA and presented a poster on the preclinical performance of its lead investigational drug, lasofoxifene, at the 2019 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.
Daiichi Sankyo announced the launch in Japan of MINNEBRO (esaxerenone) tablets.
Melinta Therapeutics announced the FDA has accepted a supplemental New Drug Application (sNDA) for BAXDELA (delafloxacin) for priority review. The sNDA filing seeks to expand the current indication for BAXDELA to include adult patients with community-acquired bacterial pneumonia.
Verona Pharma announced the initiation of a Phase 2b dose-ranging study evaluating nebulized ensifentrine (RPL554) added on to a long-acting bronchodilator in patients with moderate-to-severe chronic obstructive pulmonary disease (COPD) and also presented clinically relevant findings from its COPD clinical trial program with ensifentrine at the American Thoracic Society International Conference.
Nucorion Pharmaceuticals announced the closing of a $5 million Series B Preferred Stock financing to support the Phase 1 clinical development in the US for its lead program, NCO-1010 for the potential treatment of hepatitis B, which utilizes Ligand’s LTP Platform technology. Guangdong Ji-Bao Pharmaceutical Company of Guangzhou, China invested $4 million and Ligand invested $1 million in the round.
Internal R&D

Ligand announced positive top-line results from a Phase 1 clinical trial of its internal Captisol-enabled (CE) Iohexol program. The trial achieved the primary endpoint by demonstrating pharmacokinetic bioequivalence of CE-Iohexol injection and a reference Iohexol injection (OMNIPAQUE) after intravenous (IV) administration in healthy adults. CE-Iohexol injection was safe and well tolerated, and adverse events were in line with the known safety profile of OMNIPAQUE.
Adjusted Financial Measures

The Company reports adjusted net income and adjusted net income per diluted share in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company’s financial measures under GAAP include stock-based compensation expense, amortization of debt-related costs, amortization related to acquisitions and intangible assets, changes in contingent liabilities, mark-to-market adjustments for amounts relating to its equity investments in public companies, unissued shares relating to its Senior Convertible Notes, gain on the sale of Promacta and others that are listed in the itemized reconciliations between GAAP and adjusted financial measures included at the end of this press release. However, other than with respect to total revenues, the Company only provides financial guidance on an adjusted basis and does not provide reconciliations of such forward-looking adjusted measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for changes in contingent liabilities, changes in the market value of its investments in public companies, stock-based compensation expense and effects of any discrete income tax items. Management has excluded the effects of these items in its adjusted measures to assist investors in analyzing and assessing the Company’s past and future core operating performance. Additionally, adjusted earnings per diluted share is a key component of the financial metrics utilized by the Company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.

Conference Call

Ligand management will host a conference call today beginning at 9:00 a.m. Eastern time (6:00 a.m. Pacific time) to discuss this announcement and answer questions. To participate via telephone, please dial (833) 591-4752 from the U.S. or (720) 405-1612 from outside the U.S., using the conference ID 1997313. To participate via live or replay webcast, a link is available at www.ligand.com.

On July 30, 2019 The U.S. Food and Drug Administration (FDA) reported that it approved Nubeqa (darolutamide), an androgen receptor inhibitor (ARi), for the treatment of patients with non-metastatic castration-resistant prostate cancer (nmCRPC) (Press release, Bayer, JUL 30, 2019, View Source [SID1234537914]).1 The FDA approval is based on the Phase III ARAMIS trial evaluating Nubeqa plus androgen deprivation therapy (ADT), which demonstrated a highly significant improvement in the primary efficacy endpoint of metastasis-free survival (MFS), with a median of 40.4 months versus 18.4 months for placebo plus ADT (p<0.0001).1 MFS is defined as the time from randomization to the time of first evidence of blinded independent central review (BICR)-confirmed distant metastasis or death from any cause within 33 weeks after the last evaluable scan, whichever occurred first. Nubeqa was approved under the FDA’s Priority Review designation, which is reserved for medicines that may provide significant improvements in the safety or effectiveness of the treatment for serious conditions.

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"Patients at this stage of prostate cancer typically don’t have symptoms of the disease. The overarching goals of treatment in this setting are to delay the spread of prostate cancer and limit the burdensome side effects of therapy," said Matthew Smith, M.D., Ph.D., Director of the Genitourinary Malignancies Program, Massachusetts General Hospital Cancer Center. "This approval marks an important new option for the prostate cancer community."

In the U.S., over 73,000 men are estimated to be diagnosed with castration-resistant prostate cancer (CRPC) in 2019.2 About 40 percent of these patients have prostate cancer that has not spread to other parts of the body and is also associated with a rising prostate-specific antigen (PSA) level, despite a castrate testosterone level, which is known as nmCRPC.2,3 This is important because about one-third of men with nmCRPC go on to develop metastases within two years.4 PSA monitoring is important to identify patients and help offset undertreatment in men before the disease spreads.5,6

"We know that men with nmCRPC are still in the prime of their lives and are at a critical point in their disease when action needs to be taken," said Howard R. Soule, Ph.D., Executive Vice President and Chief Science Officer, Prostate Cancer Foundation (PCF). "For 26 years, PCF has been focused on research aimed at improving patient outcomes and we welcome the addition of new treatment options that provide men with more choices when working with their doctor to select what’s right for them."

"With the approval of Nubeqa, we now have a new therapy that extends MFS and allows physicians greater flexibility to treat men living with nmCRPC," said Robert LaCaze, Member of the Executive Committee of Bayer’s Pharmaceuticals Division and Head of the Oncology Strategic Business Unit at Bayer. "Bayer is proud to take this latest step forward in the nmCRPC treatment landscape. Nubeqa is the newest addition to our prostate cancer portfolio and reflects Bayer’s commitment to finding treatments for men at different stages along the prostate cancer continuum."

In the ARAMIS trial, both arms showed a 9 percent discontinuation rate due to adverse reactions.1 The most frequent adverse reactions requiring discontinuation in patients who received Nubeqa included cardiac failure (0.4 percent), and death (0.4 percent).1 Adverse reactions occurring more frequently in the Nubeqa arm (≥2 percent over placebo) were fatigue (16 percent versus 11 percent), pain in extremity (6 percent versus 3 percent) and rash (3 percent versus 1 percent).1 Nubeqa was not studied in women and there is a warning and precaution for embryo-fetal toxicity.1

Overall survival (OS) and time to pain progression were additional secondary efficacy endpoints.1 OS data were not yet mature at the time of final MFS analysis.1 The MFS result was supported by a delay in time to pain progression, defined as at least a 2-point worsening from baseline of the pain score on Brief Pain Inventory-Short Form or initiation of opioids, in patients treated with Nubeqa as compared to placebo.1 Pain progression was reported in 28 percent of all patients on study.1

Bayer has filed for approval of Nubeqa in the European Union (EU), Japan, and with other health authorities. Nubeqa is developed jointly by Bayer and Orion Corporation, a globally operating Finnish pharmaceutical company.

Nubeqa will be available in oral tablets for adults.1 For more information, visit www.NUBEQA.com.

Value Program for Nubeqa Patients
Bayer is committed to ensuring that patients in the U.S. who are prescribed Nubeqa can access the medication and receive the support they may need. As part of this commitment, Bayer is launching an innovative patient support program, DUDE (Darolutamide User Drug Experience) Access Services, which offers a two-month Free Trial Program to eligible patients along with a $0 co-pay for commercially insured patients who qualify. To learn more about these and other services, please visit the website or call 1-833-337-DUDE (1-833-337-3833) available Monday-Friday, 9:00am-7:00pm EST.

Clinical Trial Results
The FDA approval of Nubeqa (darolutamide) is based on the ARAMIS trial, a randomized, double-blind, placebo-controlled, multi-center Phase III study, which evaluated the safety and efficacy of oral Nubeqa in patients with nmCRPC who were receiving a concomitant gonadotropin-releasing hormone (GnRH) analog or had a bilateral orchiectomy. In the clinical study, 1,509 patients were randomized in a 2:1 ratio to receive 600 mg of Nubeqa orally twice daily or placebo plus ADT. Patients with a history of seizure were allowed in the study.1

The primary efficacy endpoint of the trial was MFS, defined as the time from randomization to the time of first evidence of BICR-confirmed distant metastasis or death due to any cause within 33 weeks after the last evaluable scan, whichever occurred first.1 Nubeqa plus ADT demonstrated a statistically significant improvement in MFS, with a median MFS of 40.4 months versus 18.4 months with placebo plus ADT [HR=0.41, 95% CI (0.34, 0.50), p<0.0001].1 OS and time to pain progression were additional secondary efficacy endpoints.1 OS data were not yet mature at the time of final MFS analysis.1 The MFS result was supported by a delay in time to pain progression, defined as at least a 2-point worsening from baseline of the pain score on Brief Pain Inventory-Short Form or initiation of opioids, in patients treated with Nubeqa as compared to placebo.1 Pain progression was reported in 28 percent of all patients on study.1

Adverse reactions occurring more frequently in the Nubeqa arm (≥2 percent over placebo) were fatigue (16 percent versus 11 percent), pain in extremity (6 percent versus 3 percent) and rash (3 percent versus 1 percent).1 The only observed adverse reaction in ≥10 percent of patients receiving Nubeqa was fatigue.1 Additionally, clinically significant adverse reactions occurring in 2 percent or more of patients treated with Nubeqa included ischemic heart disease (4.0 percent versus 3.4 percent on placebo) and heart failure (2.1 percent versus 0.9 percent on placebo).1 Discontinuation due to adverse reactions occurred in 9 percent of patients in both arms of the study.1 The most frequent adverse reactions requiring discontinuation in patients who received Nubeqa included cardiac failure (0.4 percent), and death (0.4 percent).1 Dose interruptions due to an adverse reaction occurred in 13 percent of patients treated with Nubeqa.1 The most frequent adverse reactions requiring dosage interruption in patients who received Nubeqa included hypertension (0.6 percent), diarrhea (0.5 percent), and pneumonia (0.5 percent).1 Dose reductions due to an adverse reaction occurred in 6 percent of patients treated with Nubeqa.1 The most frequent adverse reactions requiring dosage reduction in patients treated with Nubeqa included fatigue (0.7 percent), hypertension (0.3 percent), and nausea (0.3 percent).1

About Nubeqa (darolutamide)
Nubeqa (darolutamide) is an androgen receptor inhibitor (ARi) with a distinct chemical structure that competitively inhibits androgen binding, AR nuclear translocation, and AR-mediated transcription.1 Nubeqa is approved for the treatment of patients with non-metastatic castration-resistant prostate cancer (nmCRPC).1 A Phase III study in metastatic hormone-sensitive prostate cancer (ARASENS) is ongoing. Information about this trial can be found at www.clinicaltrials.gov.

Bayer has submitted filings for darolutamide in the European Union (EU), Japan, and additional countries.

About Prostate Cancer
Prostate cancer is the second most commonly diagnosed malignancy and fifth leading cause of cancer in men worldwide.7 In 2018, an estimated 1.2 million men were diagnosed with prostate cancer, and about 358,000 died from the disease worldwide.7 Prostate cancer results from the abnormal proliferation of cells within the prostate gland, which is part of a man’s reproductive system.8 It mainly affects men over the age of 50, and the risk increases with age.9 Treatment options range from surgery to radiation treatment to therapy using hormone-receptor antagonists, i.e., substances that stop the formation of testosterone or prevent its effect at the target location.10 However, in nearly all cases, the cancer eventually becomes resistant to conventional hormone therapy.11

Castration-resistant prostate cancer (CRPC) is an advanced form of the disease where the cancer keeps progressing even when the amount of testosterone is reduced to very low levels in the body. The field of treatment options for castration-resistant patients is evolving rapidly, but until two years ago, there have been no FDA-approved treatment options for CRPC patients who have prostate cancer that has not spread to other parts of the body with rising prostate-specific antigen (PSA) levels despite a castrate testosterone level, which is called non-metastatic castration-resistant prostate cancer, or nmCRPC.6,12 About one-third of men with nmCRPC go on to develop metastases within two years.4 In men with progressive nmCRPC, a short PSA doubling time is correlated with shortened time to first metastasis and death.12

IMPORTANT SAFETY INFORMATION

Embryo-Fetal Toxicity: Safety and efficacy of NUBEQA have not been established in females. NUBEQA can cause fetal harm and loss of pregnancy. Advise males with female partners of reproductive potential to use effective contraception during treatment with NUBEQA and for 1 week after the last dose.

Adverse Reactions

Serious adverse reactions occurred in 25% of patients receiving NUBEQA and in 20% of patients receiving placebo. Serious adverse reactions in ≥ 1 % of patients who received NUBEQA were urinary retention, pneumonia, and hematuria. Overall, 3.9% of patients receiving NUBEQA and 3.2% of patients receiving placebo died from adverse reactions, which included death (0.4%), cardiac failure (0.3%), cardiac arrest (0.2%), general physical health deterioration (0.2%), and pulmonary embolism (0.2%) for NUBEQA.

Adverse reactions occurring more frequently in the NUBEQA arm (≥ 2% over placebo) were fatigue (16% vs. 11%), pain in extremity (6% vs. 3%) and rash (3% vs. 1%).

Clinically significant adverse reactions occurring in ≥ 2% of patients treated with NUBEQA included ischemic heart disease (4.0% vs. 3.4% on placebo) and heart failure (2.1% vs. 0.9% on placebo).

Drug Interactions

Effect of Other Drugs on NUBEQA – Concomitant use of NUBEQA with a combined P-gp and strong or moderate CYP3A4 inducer decreases darolutamide exposure, which may decrease NUBEQA activity. Avoid concomitant use of NUBEQA with combined P-gp and strong or moderate CYP3A4 inducers.

Concomitant use of NUBEQA with a combined P-gp and strong CYP3A4 inhibitor increases darolutamide exposure, which may increase the risk of NUBEQA adverse reactions. Monitor patients more frequently for NUBEQA adverse reactions and modify NUBEQA dosage as needed.

Effects of NUBEQA on Other Drugs – NUBEQA is an inhibitor of breast cancer resistance protein (BCRP) transporter. Concomitant use of NUBEQA increases the exposure (AUC) and maximal concentration of BCRP substrates, which may increase the risk of BCRP substrate-related toxicities. Avoid concomitant use with drugs that are BCRP substrates where possible. If used together, monitor patients more frequently for adverse reactions, and consider dose reduction of the BCRP substrate drug. Consult the approved product labeling of the BCRP substrate when used concomitantly with NUBEQA.

For important risk and use information about Nubeqa, please see the full Prescribing Information.

About Oncology at Bayer
Bayer is committed to delivering science for a better life by advancing a portfolio of innovative treatments. The oncology franchise at Bayer now expands to six marketed products and several other assets in various stages of clinical development. Together, these products reflect the company’s approach to research, which prioritizes targets and pathways with the potential to impact the way that cancer is treated.