On August 7, 2019 Dynavax Technologies Corporation (NASDAQ: DVAX), a biopharmaceutical company focused on commercializing novel vaccines, reported financial results for the second quarter ended June 30, 2019 (Press release, Dynavax Technologies, AUG 7, 2019, View Source [SID1234538291]).

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"HEPLISAV-B net product revenue was $8.3 million for the second quarter of this year, which was in line with our expectations," said Ryan Spencer, Co-President and Senior Vice President of Commercial for Dynavax. "Hepatitis B is a highly infectious and potentially fatal disease, which can be prevented with effective vaccination. Although hepatitis B vaccines have been available for decades, recently cases of
hepatitis B have been on the rise. We believe there is a need for a vaccine that provides higher and faster rates of protection, and that HEPLISAV-B, as the only two-dose hepatitis B vaccine approved by the FDA, has the potential to become the standard of care hepatitis B adult vaccine in the U.S. and we are focused on reaching that goal."

Second Quarter and Recent Business Highlights

HEPLISAV-B [Hepatitis B Vaccine (Recombinant), Adjuvanted]

Second quarter 2019 sales of $8.3 million compared to $5.6 million in the first quarter 2019
The company has achieved sales into 6 of the 7 top national retail pharmacy chains, and contracting efforts are underway to secure additional pharmacy partners
More than 1,790 individual customers have purchased HEPLISAV-B since launch
17 of the top 20 Integrated Delivery Networks (IDNs) have made HEPLISAV-B available to order
668 of our targeted accounts, which represent 59% of the total doses in our targeted customers, have made HEPLISAV-B available to order
187 of the top 300 targeted customers have ordered HEPLISAV-B
Financial Results

Product Revenue, Net. Dynavax’s first commercial product, HEPLISAV-B, was launched in the first quarter of 2018. Net product revenue for the second quarter of 2019 was $8.3 million, compared to $1.3 million for the second quarter of 2018. Net product revenue for the six months ended June 30, 2019, was $13.9 million, compared to $1.4 million for the six months ended June 30, 2018. Product revenue from sales is recorded at the net sales price, which reflects reductions for estimated product returns, chargebacks, discounts and other fees.

Cost of Sales – Product. Cost of sales – product, for the second quarter of 2019 was $2.1 million, compared to $5.2 million for the second quarter of 2018. Cost of sales – product, for the six months ended June 30, 2019, was $3.9 million, compared to $5.4 million for same period in 2018. The quarter ended June 30, 2018 included costs relating to excess capacity at the company’s manufacturing facility in Düsseldorf, Germany, which were previously included in research and development expense. The 2018 excess capacity charge is a result of costs associated with resuming operating activities at the Düsseldorf facility after receiving regulatory approval of pre-filled syringes ("PFS") of HEPLISAV-B in late March 2018. Included in cost of sales – product for both periods are fill, finish and overhead costs for HEPLISAV-B incurred after U.S. Food and Drug Administration (FDA) approval. A higher percentage of HEPLISAV-B inventory sold in 2019 used components manufactured after FDA approval compared to 2018, when most of the expense associated with product sold was expensed to research and development prior to approval. The company expects HEPLISAV-B cost of sales will increase in future periods, both in absolute dollars and as a percentage of product revenue, as we produce and then sell inventory that reflects the full cost of manufacturing the product.

R&D Expenses. Research and development expenses for the second quarter of 2019 were $16.2 million, compared to $16.3 million for the second quarter of 2018. Research and development expenses for the six months ended June 30, 2019, were $37.4 million, compared to $35.2 million for the same period in 2018. In May 2019, the company announced a strategic organizational restructuring to align its operations around its vaccine business and significantly curtail further investment in immuno-oncology research and development.

SG&A Expenses. Selling, general and administrative expenses for the second quarter of 2019 were $17.9 million, compared to $15.7 million for the second quarter of 2018. Selling, general and administrative expenses for the six months ended June 30, 2019 were $36.2 million, compared to $32.5 million for the same period in 2018. The increase was due primarily to additional personnel in support of HEPLISAV-B commercial activities.

Restructuring and Related Expenses. On May 23, 2019, the company implemented a strategic organizational restructuring to principally align its operations around its vaccine business. The company is exploring strategic alternatives for its immuno-oncology portfolio. The total restructuring costs related to the restructuring are estimated to be $9.4 million, of which $5.3 million is related to severance, other termination benefits and outplacement services and $4.1 million is related to stock-based compensation expense as a result of accelerated vesting of stock awards and extension of exercise period of stock options. During the three months ended June 30, 2019, the company recognized restructuring charges of $8.8 million and the remaining $0.6 million is expected to be recognized by the end of 2019. The workforce reduction is expected to reduce compensation and benefits cost by approximately $16 million annually. After all existing oncology trials and commitments are complete, the company estimates its operating expenditures related to external oncology costs will be reduced by approximately $8 million per quarter as compared to the first quarter ended March 31, 2019.

Net Loss. Net loss for the second quarter of 2019 was $42.7 million, or $0.66 per basic and diluted share, compared to a net loss of $39.4 million, or $0.63 per basic and diluted share, for the second quarter of 2018. Net loss for the six months ended June 30, 2019, was $82.4 million, or $1.28 per basic and diluted share, compared to a net loss of $78.4 million, or $1.26 per basic and diluted share for the six months ended June 30, 2018.

Cash Position. Cash, cash equivalents and marketable securities totaled $140.5 million at June 30, 2019.

2019 HEPLISAV-B Revenue Expectations

Dynavax expects HEPLISAV-B net product revenue of $32-$36 million for the full year 2019.

Conference Call and Webcast Information

Dynavax will hold a conference call today at 4:30 p.m. ET/1:30 p.m. PT. To access the call, participants may dial (877) 423-9813 (domestic) or (201) 689-8573 (international) and refer to conference ID 13693069. The live call will be webcast and can be accessed in the "Investors and Media" section of the company’s website at www.dynavax.com. A replay of the webcast will be available for 30 days following the live event.

About Hepatitis B
Hepatitis B is a viral disease of the liver that can become chronic and lead to cirrhosis, liver cancer and death. The hepatitis B virus is 50 to 100 times more infectious than HIV,i and transmission is on the rise. There is no cure for hepatitis B, but effective vaccination can prevent the disease.

In adults, hepatitis B is spread through contact with infected blood and through unprotected sex with an infected person. The CDC recommends vaccination for those at high risk for infection due to their jobs, lifestyle, living situations and travel to certain areas.ii Because people with diabetes are particularly vulnerable to infection, the CDC recommends vaccination for adults age 19 to 59 with diabetes as soon as possible after their diagnosis, and for people age 60 and older with diabetes at their physician’s discretion.iii Approximately 20 million U.S. adults have diabetes, and 1.5 million new cases of diabetes are diagnosed each year.iv

About HEPLISAV-B
HEPLISAV-B is an adult hepatitis B vaccine that combines hepatitis B surface antigen with Dynavax’s proprietary Toll-like Receptor (TLR) 9 agonist to enhance the immune response. Dynavax has worldwide commercial rights to HEPLISAV-B.

For more information about HEPLISAV-B, visit View Source

On August 7, 2019 AstraZeneca and Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported positive results from the Phase 3 PROfound trial of LYNPARZA in men with metastatic castration-resistant prostate cancer (mCRPC) who have an homologous recombination repair gene mutation (HRRm) and have progressed on prior treatment with new hormonal anticancer treatments (e.g. enzalutamide and abiraterone) (Press release, Merck & Co, AUG 7, 2019, View Source [SID1234538307]).

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Results from the trial showed a statistically-significant and clinically-meaningful improvement in the primary endpoint of radiographic progression-free survival (rPFS) with LYNPARZA vs. enzalutamide or abiraterone in men with mCRPC selected for BRCA 1/2 or ATM gene mutations, a subpopulation of HRR gene mutations. HRR gene mutations occur in approximately 25% of men diagnosed with mCRPC within which BRCA 1/2 and ATM form the majority. The safety and tolerability profile of LYNPARZA was generally consistent with previous trials.

José Baselga, executive vice president, Oncology R&D, AstraZeneca, said, "For men with metastatic castration-resistant prostate cancer, the disease remains deadly, especially in those who have failed on a new hormonal anticancer treatment. This is the only positive Phase 3 trial of any PARP inhibitor in metastatic castration-resistant prostate cancer, where the need for new, effective therapies is high. The PROfound trial also demonstrates the potential value of genomic testing in this at-risk patient population. We look forward to discussing these results with global health authorities soon."

Dr. Roy Baynes, senior vice president and head of global clinical development, chief medical officer, Merck Research Laboratories, said, "Metastatic castration-resistant prostate cancer is a deadly disease and represents an area of critical unmet medical need. The Phase 3 PROfound trial is another example of Merck and AstraZeneca’s shared commitment to improving long-term outcomes for people living with cancer. These results represent the potential for a new, oral, and targeted treatment option for this patient population."

AstraZeneca and Merck plan to present the full data from the trial at a future medical meeting. The companies are also exploring additional trials in prostate cancer, including the ongoing Phase 3 PROpel trial, evaluating LYNPARZA as a first-line therapy in mCRPC, in combination with abiraterone.

About PROfound

PROfound is a prospective, multi-center, randomized, open-label, Phase 3 trial evaluating the efficacy and safety of LYNPARZA versus enzalutamide or abiraterone in patients with metastatic castration-resistant prostate cancer (mCRPC) who have progressed on prior treatment with a new hormonal anticancer treatment and have a qualifying tumor mutation in one of 15 genes involved in the homologous recombination repair (HRR) pathway, among them BRCA 1/2 , ATM and CDK12.

IMPORTANT SAFETY INFORMATION

CONTRAINDICATIONS

There are no contraindications for LYNPARZA.

WARNINGS AND PRECAUTIONS

Myelodysplastic Syndrome/Acute Myeloid Leukemia (MDS/AML): Occurred in <1.5% of patients exposed to LYNPARZA monotherapy, and the majority of events had a fatal outcome. The duration of therapy in patients who developed secondary MDS/AML varied from <6 months to >2 years. All of these patients had previous chemotherapy with platinum agents and/or other DNA-damaging agents, including radiotherapy, and some also had a history of more than one primary malignancy or of bone marrow dysplasia.

Do not start LYNPARZA until patients have recovered from hematological toxicity caused by previous chemotherapy (≤Grade 1). Monitor complete blood count for cytopenia at baseline and monthly thereafter for clinically significant changes during treatment. For prolonged hematological toxicities, interrupt LYNPARZA and monitor blood count weekly until recovery.

If the levels have not recovered to Grade 1 or less after 4 weeks, refer the patient to a hematologist for further investigations, including bone marrow analysis and blood sample for cytogenetics. Discontinue LYNPARZA if MDS/AML is confirmed.

Pneumonitis: Occurred in <1% of patients exposed to LYNPARZA, and some cases were fatal. If patients present with new or worsening respiratory symptoms such as dyspnea, cough, and fever, or a radiological abnormality occurs, interrupt LYNPARZA treatment and initiate prompt investigation. Discontinue LYNPARZA if pneumonitis is confirmed and treat patient appropriately.

Embryo-Fetal Toxicity: Based on its mechanism of action and findings in animals, LYNPARZA can cause fetal harm. A pregnancy test is recommended for females of reproductive potential prior to initiating treatment.

Females

Advise females of reproductive potential of the potential risk to a fetus and to use effective contraception during treatment and for 6 months following the last dose.

Males

Advise male patients with female partners of reproductive potential or who are pregnant to use effective contraception during treatment and for 3 months following the last dose of LYNPARZA and to not donate sperm during this time.

ADVERSE REACTIONS—First-Line Maintenance BRCAm Advanced Ovarian Cancer

Most common adverse reactions (Grades 1-4) in ≥10% of patients in clinical trials of LYNPARZA in the first-line maintenance setting for SOLO-1 were: nausea (77%), fatigue (67%), abdominal pain (45%), vomiting (40%), anemia (38%), diarrhea (37%), constipation (28%), upper respiratory tract infection/influenza/ nasopharyngitis/bronchitis (28%), dysgeusia (26%), decreased appetite (20%), dizziness (20%), neutropenia (17%), dyspepsia (17%), dyspnea (15%), leukopenia (13%), UTI (13%), thrombocytopenia (11%), and stomatitis (11%).

Most common laboratory abnormalities (Grades 1-4) in ≥25% of patients in clinical trials of LYNPARZA in the first-line maintenance setting for SOLO-1 were: decrease in hemoglobin (87%), increase in mean corpuscular volume (87%), decrease in leukocytes (70%), decrease in lymphocytes (67%), decrease in absolute neutrophil count (51%), decrease in platelets (35%), and increase in serum creatinine (34%).

ADVERSE REACTIONS—Maintenance Recurrent Ovarian Cancer

Most common adverse reactions (Grades 1-4) in ≥20% of patients in clinical trials of LYNPARZA in the maintenance setting for SOLO-2 were: nausea (76%), fatigue (including asthenia) (66%), anemia (44%), vomiting (37%), nasopharyngitis/upper respiratory tract infection (URI)/influenza (36%), diarrhea (33%), arthralgia/myalgia (30%), dysgeusia (27%), headache (26%), decreased appetite (22%), and stomatitis (20%).

Study 19: nausea (71%), fatigue (including asthenia) (63%), vomiting (35%), diarrhea (28%), anemia (23%), respiratory tract infection (22%), constipation (22%), headache (21%), decreased appetite (21%), and dyspepsia (20%).

Most common laboratory abnormalities (Grades 1-4) in ≥25% of patients in clinical trials of LYNPARZA in the maintenance setting (SOLO-2/Study 19) were: increase in mean corpuscular volume (89%/82%), decrease in hemoglobin (83%/82%), decrease in leukocytes (69%/58%), decrease in lymphocytes (67%/52%), decrease in absolute neutrophil count (51%/47%), increase in serum creatinine (44%/45%), and decrease in platelets (42%/36%).

ADVERSE REACTIONS—Advanced gBRCAm ovarian cancer

Most common adverse reactions (Grades 1-4) in ≥20% of patients in clinical trials of LYNPARZA for advanced gBRCAm ovarian cancer after 3 or more lines of chemotherapy (pooled from 6 studies) were: fatigue/asthenia (66%), nausea (64%), vomiting (43%), anemia (34%), diarrhea (31%), nasopharyngitis/upper respiratory tract infection (URI) (26%), dyspepsia (25%), myalgia (22%), decreased appetite (22%), and arthralgia/musculoskeletal pain (21%).

Most common laboratory abnormalities (Grades 1-4) in ≥25% of patients in clinical trials of LYNPARZA for advanced gBRCAm ovarian cancer (pooled from 6 studies) were: decrease in hemoglobin (90%), mean corpuscular volume elevation (57%), decrease in lymphocytes (56%), increase in serum creatinine (30%), decrease in platelets (30%), and decrease in absolute neutrophil count (25%).

ADVERSE REACTIONS—gBRCAm, HER2-negative metastatic breast cancer

Most common adverse reactions (Grades 1-4) in ≥20% of patients in OlympiAD were: nausea (58%), anemia (40%), fatigue (including asthenia) (37%), vomiting (30%), neutropenia (27%), respiratory tract infection (27%), leukopenia (25%), diarrhea (21%), and headache (20%).

Most common laboratory abnormalities (Grades 1-4) in >25% of patients in OlympiAD were: decrease in hemoglobin (82%), decrease in lymphocytes (73%), decrease in leukocytes (71%), increase in mean corpuscular volume (71%), decrease in absolute neutrophil count (46%), and decrease in platelets (33%).

DRUG INTERACTIONS

Anticancer Agents: Clinical studies of LYNPARZA in combination with other myelosuppressive anticancer agents, including DNA-damaging agents, indicate a potentiation and prolongation of myelosuppressive toxicity.

CYP3A Inhibitors: Avoid concomitant use of strong or moderate CYP3A inhibitors. If a strong or moderate CYP3A inhibitor must be co-administered, reduce the dose of LYNPARZA. Advise patients to avoid grapefruit, grapefruit juice, Seville oranges, and Seville orange juice during LYNPARZA treatment.

CYP3A Inducers: Avoid concomitant use of strong or moderate CYP3A inducers when using LYNPARZA. If a moderate inducer cannot be avoided, there is a potential for decreased efficacy of LYNPARZA.

USE IN SPECIFIC POPULATIONS

Lactation: No data are available regarding the presence of olaparib in human milk, its effects on the breastfed infant or on milk production. Because of the potential for serious adverse reactions in the breastfed infant, advise a lactating woman not to breastfeed during treatment with LYNPARZA and for 1 month after receiving the final dose.

Pediatric Use: The safety and efficacy of LYNPARZA have not been established in pediatric patients.

Hepatic Impairment: No adjustment to the starting dose is required in patients with mild or moderate hepatic impairment (Child-Pugh classification A and B). There are no data in patients with severe hepatic impairment (Child-Pugh classification C).

Renal Impairment: No adjustment to the starting dose is necessary in patients with mild renal impairment (CLcr=51-80 mL/min) but patients should be monitored closely for toxicity. In patients with moderate renal impairment (CLcr=31-50 mL/min), reduce the dose to 200 mg twice daily. There are no data in patients with severe renal impairment or end-stage renal disease (CLcr ≤30 mL/min).

INDICATIONS

LYNPARZA is a poly (ADP-ribose) polymerase (PARP) inhibitor indicated:

First-Line Maintenance BRCAm Advanced Ovarian Cancer

For the maintenance treatment of adult patients with deleterious or suspected deleterious germline or somatic BRCA-mutated (gBRCAm or sBRCAm) advanced epithelial ovarian, fallopian tube or primary peritoneal cancer who are in complete or partial response to first-line platinum-based chemotherapy. Select patients with gBRCAm advanced epithelial ovarian, fallopian tube or primary peritoneal cancer for therapy based on an FDA-approved companion diagnostic for LYNPARZA.

Maintenance Recurrent Ovarian Cancer

For the maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer, who are in complete or partial response to platinum-based chemotherapy.

Advanced gBRCAm ovarian cancer

For the treatment of adult patients with deleterious or suspected deleterious germline BRCA-mutated (gBRCAm) advanced ovarian cancer who have been treated with 3 or more prior lines of chemotherapy. Select patients for therapy based on an FDA-approved companion diagnostic for LYNPARZA.

gBRCAm, HER2-negative metastatic breast cancer

In patients with deleterious or suspected deleterious gBRCAm, human epidermal growth factor receptor 2 (HER2)-negative metastatic breast cancer who have been treated with chemotherapy in the neoadjuvant, adjuvant or metastatic setting. Patients with hormone receptor (HR)-positive breast cancer should have been treated with a prior endocrine therapy or be considered inappropriate for endocrine therapy. Select patients for therapy based on an FDA-approved companion diagnostic for LYNPARZA.

Please click here for complete Prescribing Information, including Patient Information (Medication Guide).

About LYNPARZA (olaparib)

LYNPARZA is a first-in-class PARP inhibitor and the first targeted treatment to potentially exploit DNA damage response (DDR) pathway deficiencies, such as BRCA mutations, to preferentially kill cancer cells. Inhibition of PARP with LYNPARZA leads to the trapping of PARP bound to DNA single-strand breaks, stalling of replication forks, their collapse and the generation of DNA double-strand breaks and cancer cell death. LYNPARZA is being tested in a range of tumor types with defects and dependencies in the DDR.

LYNPARZA, which is being jointly developed and commercialized by AstraZeneca and Merck, has a broad and advanced clinical trial development program, and AstraZeneca and Merck are working together to understand how it may affect multiple PARP-dependent tumors as a monotherapy and in combination across multiple cancer types.

About Metastatic Castration-Resistant Prostate Cancer (mCRPC)

Prostate cancer is the second-most common cancer in men, with an estimated 1.6 million new cases diagnosed worldwide in 2015 and is associated with a significant mortality rate. Development of prostate cancer is often driven by male sex hormones called androgens, including testosterone. mCRPC occurs when prostate cancer grows and spreads to other parts of the body despite the use of androgen-deprivation therapy to block the action of male sex hormones. Approximately 10-20% of men with advanced prostate cancer will develop CRPC within five years, and at least 84% of these will have metastases at the time of CRPC diagnosis. Of men with no metastases at CRPC diagnosis, 33% are likely to develop metastases within two years. Despite an increase in the number of available therapies for men with mCRPC, remains low.

About Homologous Recombination Repair (HRR) Mutations

Homologous recombination repair (HRR) plays a significant role in maintaining the genetic stability of cells and suppressing tumor growth by repairing damaged DNA. Mutations, or defects, in homologous recombination (HR) pathway genes – which include ataxia telangiectasia mutated (ATM) and BRCA1/2 genes – increase the risk for breast, ovarian, pancreatic, prostate and other cancers.

About the AstraZeneca and Merck Strategic Oncology Collaboration

In July 2017, AstraZeneca and Merck & Co., Inc., Kenilworth, NJ, US, known as MSD outside the United States and Canada, announced a global strategic oncology collaboration to co-develop and co-commercialize LYNPARZA, the world’s first PARP inhibitor, and potential new medicine selumetinib, a MEK inhibitor, for multiple cancer types. Working together, the companies will develop LYNPARZA and selumetinib in combination with other potential new medicines and as monotherapies. Independently, the companies will develop LYNPARZA and selumetinib in combination with their respective PD-L1 and PD-1 medicines.

Merck’s Focus on Cancer

Our goal is to translate breakthrough science into innovative oncology medicines to help people with cancer worldwide. At Merck, the potential to bring new hope to people with cancer drives our purpose and supporting accessibility to our cancer medicines is our commitment. As part of our focus on cancer, Merck is committed to exploring the potential of immuno-oncology with one of the largest development programs in the industry across more than 30 tumor types. We also continue to strengthen our portfolio through strategic acquisitions and are prioritizing the development of several promising oncology candidates with the potential to improve the treatment of advanced cancers. For more information about our oncology clinical trials, visit www.merck.com/clinicaltrials.

On August 7, 2019 Horizon Therapeutics plc (Nasdaq: HZNP) reported its second-quarter 2019 financial results and increased its full-year 2019 net sales and adjusted EBITDA guidance (Press release, Horizon Therapeutics, AUG 7, 2019, View Source [SID1234538323]).

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"The second quarter was another quarter of outstanding execution and strategic progress," said Timothy Walbert, chairman, president and chief executive officer, Horizon. "We generated double-digit net sales growth in our orphan and rheumatology segment, driven by continued momentum from KRYSTEXXA, our medicine for uncontrolled gout and our main growth driver. In addition, we recently submitted teprotumumab for U.S. FDA approval, another milestone toward delivering the first FDA-approved treatment to people living with active thyroid eye disease."

Second-Quarter and Recent Company Highlights

Submitted BLA for Teprotumumab for Active TED: In early July, the Company submitted a BLA for its investigational medicine teprotumumab for the treatment of active TED to the U.S. Food and Drug Administration (FDA). The submission included results from the Phase 3 clinical trial, OPTIC (Treatment of Graves’ Orbitopathy (Thyroid Eye Disease) to Reduce Proptosis with Teprotumumab Infusions in a Randomized, Placebo-Controlled, Clinical Study), as well as the positive Phase 2 results.

Teprotumumab has Breakthrough Therapy, Orphan Drug and Fast Track designations from the FDA. Horizon has requested Priority Review for the application, which, if granted, could result in a six-month review process. The FDA has a 60-day filing review period to determine whether the BLA is complete and acceptable for filing. If approved, teprotumumab would be the first and only approved treatment for active TED.

In April, additional results from OPTIC were presented at the American Association of Clinical Endocrinologists (AACE) Scientific and Clinical Congress, which included measurements of improvement in proptosis, the major driver of morbidity in TED. These data showed that after the full course of treatment for 24 weeks, patients treated with teprotumumab demonstrated a mean proptosis reduction of 3.32 mm compared with 0.53 mm for patients on placebo (p<0.001).

Announced Teprotumumab Expanded Access Program (EAP): The Company recently announced the availability of an expanded access program for teprotumumab. The expanded access program will be available for people living with active TED while the FDA reviews the teprotumumab BLA.

Initiated KRYSTEXXA Immunomodulation Trial: In June,the Company initiated its registrational clinical trial MIRROR (Methotrexate to Increase Response Rates in Patients with Uncontrolled GOut Receiving KRYSTEXXA). The trial is evaluating administration of KRYSTEXXA in combination with methotrexate to determine the potential for dampening anti-drug antibody formation and increasing response rates with KRYSTEXXA, allowing more patients living with uncontrolled gout to fully benefit from treatment. The randomized placebo-controlled study is expected to enroll approximately 135 patients to receive either KRYSTEXXA and methotrexate or KRYSTEXXA and placebo. The primary endpoint will assess the proportion of serum uric acid (sUA) responders (sUA <6 mg/dL) at Month 6.

FDA Accepted New Drug Application (NDA) for PROCYSBI Oral Granules: In July, the FDA accepted the NDA for PROCYSBI Delayed-Release Oral Granules in Packets. If approved, this new dosage form would provide another administration option for patients, in addition to the currently available PROCYSBI delayed-release capsules, which are FDA-approved for children one year of age and older and adults living with nephropathic cystinosis. The submission is part of the Company’s ongoing investment in the cystinosis community.

Appointed Sue Mahony to the Board of Directors: The Company recently appointed Sue Mahony, Ph.D., MBA, to its board of directors. Dr. Mahony brings more than 30 years of diverse industry experience to the Board, including an 18-year tenure at Eli Lilly and Company, where she served in a variety of global and domestic leadership roles of increasing responsibility, including helping oversee the development of an innovative pipeline. Before Lilly, Dr. Mahony spent five years at Bristol-Myers Squibb Company.

Changed Company Name to Horizon Therapeutics plc: In May, shareholders approved the change of the Company’s name to Horizon Therapeutics Public Limited Company at the Annual General Meeting. The new name captures the Company’s long-term strategy to develop and commercialize innovative new medicines that address rare and rheumatic diseases with very few effective treatment options. The Company believes the new name also better reflects its work with patients, caregivers, physicians and communities that goes well beyond its medicines.

Improved the Company’s Capital Structure: In May,the Company repaid $250 million of its outstanding debt, reducing it to $1.443 billion as of June 30, 2019. In May, the Company also refinanced its senior secured term loans, lowering the interest rate by 25 basis points and extending the final maturity date to May 22, 2026. Additionally, in July, the Company issued $600 million of 5.5 percent Senior Notes due 2027 and is using the proceeds along with cash on hand to repay $625 million of its outstanding debt. These actions serve to reduce interest expense and extend the maturity of the debt, furthering the Company’s strategy to improve its capital structure.
Research and Development Programs

Orphan Disease Candidate and Program:

Teprotumumab: Teprotumumab is a fully human monoclonal antibody insulin-like growth factor-1 receptor (IGF-1R) inhibitor candidate for the treatment of active TED, a serious, progressive, vision-threatening autoimmune disease in which the muscles and fatty tissue behind the eye become inflamed and expand. This can lead to proptosis (eye bulging) and diplopia (double vision) and impact activities of daily living and quality of life. The development program for teprotumumab in TED includes positive Phase 2 results published in The New England Journal of Medicine, as well as positive results from the confirmatory Phase 3 OPTIC clinical trial, announced in February 2019. The OPTIC study met its primary endpoint of a ≥2 mm reduction in proptosis (p<0.001), the main cause of morbidity in TED, with 82.9 percent of patients treated with teprotumumab demonstrating a significant improvement in proptosis compared to 9.5 percent of placebo patients. In addition, all secondary endpoints were met (p≤0.001), and the safety profile was consistent with the Phase 2 study.
Rheumatology Pipeline Candidates and Programs:

KRYSTEXXA Immunomodulation Trial: The Company is evaluating the use of methotrexate to increase the response rate with KRYSTEXXA through its MIRROR study. Methotrexate is the immunomodulator most used by rheumatologists, and has been shown to reduce anti-drug antibody formation to biologic therapies when combined with these therapies. The MIRROR trial is designed to support the potential for registration and commenced in June.
KRYSTEXXA Study in Kidney Transplant Patients with Uncontrolled Gout: The Company plans to initiate a clinical trial in the second half of 2019 evaluating the effect of KRYSTEXXA on serum uric acid levels in kidney transplant patients with uncontrolled gout. Kidney transplant patients have more than a tenfold increase in the prevalence of gout when compared to the general population, and literature suggests that persistently high serum uric acid levels can be associated with organ rejection. Managing uncontrolled gout is one of the most common and significant unmet needs of kidney transplant patients.
Next-generation Biologic Programs for Uncontrolled Gout: The Company is pursuing several development programs for next-generation biologics for uncontrolled gout to support and sustain the Company’s market leadership in this area. These include HZN-003, HZN-007 and a discovery and development collaboration with HemoShear Therapeutics, LLC.
Second-Quarter Financial Results

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

Net Sales: Second-quarter 2019 net sales were $320.6 million, an increase of 6 percent.

Gross Profit: Under U.S. GAAP, the second-quarter 2019 gross profit ratio was 72.2 percent compared to 69.8 percent in the second quarter of 2018. The non-GAAP gross profit ratio in the second quarter of 2019 was 90.9 percent compared to 90.2 percent in the second quarter of 2018.

Operating Expenses: Research and development (R&D) expenses were 8.8 percent of net sales and selling, general and administrative (SG&A) expenses were 52.1 percent of net sales. Non-GAAP R&D expenses were 6.9 percent of net sales, and non-GAAP SG&A expenses were 45.4 percent of net sales.

Income Tax Rate: In the second quarter of 2019, the income tax benefit rate on a GAAP basis was 48.8 percent and the income tax expense rate on a non-GAAP basis was 11.3 percent.

Net Income (Loss): On a GAAP basis in the second quarter of 2019, net loss was $5.1 million. Second-quarter 2019 non-GAAP net income was $95.6 million.

Adjusted EBITDA: Second-quarter 2019 adjusted EBITDA was $124.1 million.

Earnings (Loss) per Share: On a GAAP basis diluted loss per share in the second quarter of 2019 and 2018 was $0.03 and $0.15, respectively. Non-GAAP diluted earnings per share in the second quarter of 2019 and 2018 was $0.49 and $0.48, respectively. Weighted average shares outstanding used for calculating GAAP and non-GAAP diluted earnings per share in the second quarter of 2019 were 185.3 million and 193.2 million, respectively.
Second-Quarter Segment Results

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

Beginning in 2019, the Company no longer recognizes revenue from RAVICTI and AMMONAPS sales outside of North America and Japan, nor from sales of LODOTRA. On Dec. 28, 2018, the Company divested the rights to RAVICTI and AMMONAPS outside of North America and Japan. AMMONAPS is known as BUPHENYL in the United States. In addition, effective Jan. 1, 2019, the RAYOS and LODOTRA license and supply agreements were amended, including the transfer of LODOTRA to Vectura Group plc. LODOTRA is known as RAYOS in the United States.

Second-quarter 2019 net sales of the orphan and rheumatology segment, the Company’s strategic growth segment, were $223.5 million, an increase of 11 percent over the prior year’s quarter, driven by growth of KRYSTEXXA, RAYOS, PROCYSBI and ACTIMMUNE.
Second-quarter 2019 orphan and rheumatology segment operating income was $74.5 million, which includes the impact of investment in teprotumumab pre-launch activities.

Previously known as the primary care segment.

(2)

In June 2019, the Company divested the rights to MIGERGOT.

Second-quarter 2019 net sales of the inflammation segment were $97.1 million and segment operating income was $49.7 million.
Cash Flow Statement and Balance Sheet Highlights

On a GAAP basis in the second quarter of 2019, operating cash flow was $91.3 million. Non-GAAP operating cash flow was $95.7 million.

The Company had cash and cash equivalents of $866.0 million as of June 30, 2019.

As of June 30, 2019, the total principal amount of debt outstanding was $1.443 billion. As of June 30, 2019, net debt was $577 million and net-debt-to-last-12-months adjusted EBITDA leverage ratio was 1.1 times, compared to 3.6 times at June 30, 2018.

In May,the Company repaid $250 million of its outstanding debt, reducing it to $1.443 billion as of June 30, 2019. In May, the Company also refinanced its senior secured term loans, lowering the interest rate by 25 basis points and extending the final maturity date to May 22, 2026. In July, the Company issued $600 million of 5.5 percent Senior Notes due 2027 and is using the proceeds along with cash on hand to repay $625 million of its outstanding debt. Following the refinancing transactions, the Company expects the total principal amount of debt outstanding to be $1.418 billion, consisting of $418 million in senior secured term loans due 2026, $600 million of Senior Notes due 2027 and $400 million of Exchangeable Senior Notes due 2022.
New 2019 Guidance

The Company now expects full-year 2019 net sales to range between $1.28 billion to $1.30 billion, an increase from the previous guidance range of $1.26 billion to $1.28 billion. Full-year 2019 adjusted EBITDA is now expected to range between $460 million to $475 million, an increase from the previous guidance range of $450 million to $465 million.

Webcast

At 8 a.m. EDT / 1 p.m. IST today, the Company will host a live webcast to review its financial and operating results and provide a general business update. The live webcast and a replay may be accessed at View Source Please connect to the Company’s website at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. A replay of the webcast will be available approximately two hours after the live webcast.

On August 7, 2019 Quantum Leap Healthcare Collaborative (QLHC) joins Merck in acknowledging the promising data from the KEYNOTE-522 trial (Press release, Merck & Co, AUG 7, 2019, View Source [SID1234538341]). Merck recently reported that the Phase 3 KEYNOTE-522 trial met a primary endpoint, demonstrating statistically significant improved rates of pathological complete response for KEYTRUDA (pembrolizumab), Merck’s anti-PD-1 therapy, in combination with chemotherapy as neoadjuvant therapy for patients with triple negative breast cancer (TNBC). The positive finding serves as validation of the QLHC-sponsored I-SPY 2 trial, an adaptive phase II platform trial designed to rapidly screen agents and find the most effective drug combinations for each specific tumor subtype. In this study, patients start with chemotherapy before surgery so that response to treatment can be assessed. I-SPY 2’s evaluation of pembrolizumab formed the basis for targeting the immunotherapy to the TNBC subtype.

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I-SPY TRIALs are sponsored by Quantum Leap Healthcare Collaborative (QLHC), a 501c(3) charitable organization dedicated to facilitating and accelerating the development and transfer of high-impact solutions to advance healthcare and evidence-based medicine. (PRNewsfoto/Quantum Leap Healthcare Collabo)
I-SPY TRIALs are sponsored by Quantum Leap Healthcare Collaborative (QLHC), a 501c(3) charitable organization dedicated to facilitating and accelerating the development and transfer of high-impact solutions to advance healthcare and evidence-based medicine. (PRNewsfoto/Quantum Leap Healthcare Collabo)
As stated by Dr. Roger M. Perlmutter, president, Merck Research Laboratories, "When I have been asked over the last two years why I was prepared to see Merck initiate a Phase 3 trial in triple negative breast cancer, my response has always rested heavily on data from I-SPY 2. The KEYNOTE-522 pCR results offer promise for triple negative breast cancer patients who need better treatment options."

The I-SPY 2 trial is considered the archetype of a new approach to clinical trials. Rather than the traditional ‘one drug, one disease’ model for drug development, it is a ‘platform’ trial. I-SPY 2 evaluates up to 5 drugs (or combination of drugs) in parallel with the goal of determining which drugs work best in various types of breast cancer. I-SPY 2 is also designed for efficiency and speed, by employing an ‘adaptive’ statistical model. In this approach, the results of each patient are used to refine how the investigational drugs are assigned to new patients. In this way, I-SPY 2 can achieve similar results in a fraction of the time with fewer patients than traditional trials. The goal is to get the right drug to the right patient at the right time.

In results presented at the 2017 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, I-SPY 2 investigators reported that pembrolizumab, when added to standard neoadjuvant therapy for early breast cancer, nearly tripled the response (the chance of the tumor going away before surgery) in HER2 negative breast cancer subtypes. It was observed to be particularly effective in the difficult-to-treat ‘triple negative’ subset of breast cancers, which do not express genes for estrogen or progesterone receptors, nor the HER2 oncogene. I-SPY 2’s adaptive model predicted that there was a greater than 99% chance that the treatment regimen including pembrolizumab would be successful in a Phase 3 trial in TNBC.

I-SPY 2 principal investigator, Dr. Laura Esserman of the University of California San Francisco, said the KEYNOTE-522 results validate both I-SPY 2’s pioneering approach and the vision of Merck leadership for being one of the trial’s early partners.

"The whole I-SPY team is thrilled to see that the KEYNOTE-522 results came out just as we predicted. It is an important advance for TNBC patients and a clear demonstration that the I-SPY model can not only accelerate the development of new cancer treatments, it can target treatment to the patients who will benefit most."

Importantly, the 2017 I-SPY 2 results were obtained after only 11 months and enrolling only 69 patients to the pembrolizumab arm of the study; Traditional Phase 2 trials typically require 100-200 patients and last two years or more.

About I-SPY and the I-SPY 2 TRIAL

The I-SPY (Investigation of Serial Studies to Predict Your Therapeutic Response with Imaging And moLecular Analysis) TRIAL is conducted by a consortium that brings together the U.S. Food and Drug Administration (FDA), leading academic medical centers, and patient advocates, as well as Merck and other pharmaceutical and biotech companies.

The I-SPY 2 TRIAL is a collaborative effort among academic investigators from 20 major cancer research centers across the U.S. and Quantum Leap Healthcare Collaborative, the FDA, and the Foundation for the National Institutes of Health (FNIH) Cancer Biomarkers Consortium. Major supporters include The Safeway Foundation, and the Bill Bowes Foundation.

The I-SPY 2 TRIAL’s adaptive statistical design was developed by the pioneering principal investigators for the I-SPY trial, Laura J. Esserman, M.D., MBA, and Donald A. Berry, Ph.D., professor of biostatistics at The University of Texas MD Anderson Cancer Center and founder of Berry Consultants in collaboration with the FDA, industry, and many leading academic collaborators including the Agents working group chair (Doug Yee, M.D., University of Minnesota) and the Trial Operations working group chair (Angie DeMichele, M.D., University of Pennsylvania). The trial is a unique collaborative effort where over 50 clinicians are actively engaged in the conduct of the trial.

The I-SPY 2 TRIAL adaptive-trial design is based on Bayesian predictive probability that a biological regimen will be shown to be statistically superior to standard therapy in an equally randomized 300-patient confirmatory trial. Regimens that have a high Bayesian predictive probability of showing superiority in at least one of 10 predefined signatures graduate from the trial. Regimens are dropped for futility if they show a low predictive probability of showing superiority over standard therapy in all 10 signatures. A maximum total of 120 patients can be assigned to each experimental regimen. A regimen can graduate early and at any time after having 60 patients assigned to it.

Based on the confirmatory results of the Merck phase 3 trial, the I SPY 2 team is working on an improved design in an effort to get over 90% of high-risk patients to experience a complete response (disappearance of tumor) with targeted and less toxic combinations before surgery. This will accelerate the ability to personalize care for women with breast cancer.

On August 7, 2019 AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) reported unaudited consolidated financial results for the second quarter ended June 30, 2019 and provided a business update (Press release, AMAG Pharmaceuticals, AUG 7, 2019, View Source [SID1234538370]).

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"We are pleased to report both year-over-year and sequential revenue and market share growth in the quarter for each of our key commercial products – Makena subcutaneous (SC) auto-injector, Feraheme and Intrarosa. This strong, consistent execution by our commercial team positions us well for next month’s launch of Vyleesi, our fourth commercial product," said William Heiden, AMAG’s president and chief executive officer. "Despite the strong commercial success of our promoted products, we have lowered our 2019 financial guidance to reflect the impact of Makena intramuscular (IM) supply issues and our changed expectations of milestone payments due to us from a development partner related to ciraparantag."
KEY UPDATES

Makena supply: due to sustained supply disruptions, resulting in loss of market share, and increased generic competition, the company made the decision to exit the IM market and, through mutual agreement, has terminated the arrangement with Prasco, LLC, its authorized generic partner.

Makena PROLONG study: in a recent meeting with the U.S. Food and Drug Administration (FDA) regarding PROLONG, the Agency informed the company that it plans to hold an Advisory Committee meeting. This meeting is expected to occur in the fourth quarter of 2019 to facilitate transparent discussions of the PROLONG trial and allow FDA to obtain the necessary input from Advisory Committee members and important stakeholders to inform regulatory decision-making for Makena. In addition to presentations by the company and the FDA, clinical experts, medical society representatives and patients will have the opportunity to provide their perspectives on the clinical importance and medical need for Makena.

Quarterly growth across all promoted products: strong revenue and market share performance in the second quarter

Makena (hydroxyprogesterone caproate (HPC) injection) SC auto-injector achieved 63% market share of all FDA-approved HPC prescription volume in the quarter.

Feraheme (ferumoxytol injection) achieved record market share of 17.2% in the quarter.

Intrarosa (prasterone) exited the quarter at a TRx share of 4.8%, the highest share achievement since launch.

VyleesiTM (bremelanotide injection) on track for national launch in September: June 21 approval generated coverage from more than 300 news outlets across the country, which has helped drive early awareness of Vyleesi alongside the initial marketing campaign.

Development pipeline is progressing: the company expects to initiate a phase 3a study of ciraparantag in the fourth quarter of 2019. AMAG-423 Phase 2b/3a study continues to open new sites and enroll patients.

1 See summaries of GAAP to non-GAAP adjustments at the conclusion of this press release.

COMMERCIAL PRODUCTS AND DEVELOPMENT PROGRAM UPDATES
Makena
The Makena SC auto-injector was launched in March 2018 and has continued to grow and increase its market share every quarter since launch. Second quarter 2019 revenues increased to $41.0 million, or 8.5%, over the first quarter of 2019. Market share grew 9 percentage points to 63%, compared with 54% in the first quarter of 2019. With no intramuscular product shipped, the $10.0 million of negative revenue for the Makena IM product, for the three months ended June 30, 2019, was the result of changes in estimated Medicaid and commercial liability obligations from prior periods.

As previously disclosed, AMAG’s primary third-party manufacturer failed to timely deliver Makena IM drug product to AMAG, which led to supply disruptions and ultimately an out-of-stock situation. These supply issues hindered AMAG’s ability to provide Makena IM product, which caused Prasco to lose significant market share. Although AMAG received notice of approval from the FDA of an additional manufacturing site for the Makena IM product late in the second quarter, AMAG and Prasco concluded that it was no longer commercially viable to recapture sufficient market share following the out-of stock situation. As such, AMAG made the decision to exit the generic IM market and reached a mutual agreement with Prasco to terminate their distribution and supply agreement on August 6, 2019.

Accordingly, the company recorded a $77.4 million non-cash charge to fully write-off the intangible asset associated with the IM form of Makena and an inventory write-down of $4.8 million. In addition, the company revised its full-year 2019 financial guidance.

Vyleesi
As previously reported, on June 21, 2019 the FDA approved Vyleesi, a melanocortin receptor agonist, to treat acquired, generalized hypoactive sexual desire disorder (HSDD) in premenopausal women. The Vyleesi autoinjector is the first treatment for this patient population that can be self-administered as needed in anticipation of sexual activity. HSDD is characterized by low sexual desire that causes distress or interpersonal difficulty and is not due to a co-existing medical or psychiatric condition, problems within the relationship, or the effects of a medication or other drug substance. AMAG is committed to working with payers and healthcare professionals to help ensure that women with HSDD have access to Vyleesi, as well as minimizing the cost burden to patients through a comprehensive copay assistance program. AMAG plans to launch Vyleesi nationally in September with approximately 125 sales representatives on the company’s women’s and maternal health salesforce who will be calling on an estimated 15,000 healthcare professionals.

Ciraparantag, which has been granted fast track designation by the FDA, is in development as a single-dose, ready-to-use solution for use in patients treated with novel oral anticoagulants (NOACs) or low molecular weight heparin (LMWH) when reversal of the anticoagulant effect is needed for emergency surgery or serious uncontrolled bleeding. AMAG and Perosphere Technologies (an independent company) recently met with the FDA and Perosphere Technologies is preparing to submit an investigational device exemption (IDE) to enable the use of the automated coagulometer in a Phase 3a clinical study, which AMAG expects to begin in the fourth quarter of 2019. Separately, AMAG was recently informed by a development partner for ciraparantag of its intention to terminate the existing collaboration agreement. Although AMAG does not believe that this partner has grounds for termination, it has removed expected milestone payments from its 2019 financial guidance.

UPDATED 2019 FINANCIAL GUIDANCE
"Although our commercial teams delivered strong results for our promoted products, we are lowering our 2019 financial guidance because we exited the Makena IM market and revised our expectation of ciraparantag development milestone revenue. The changes to our 2019 guidance do not alter our previously-stated preliminary view that we will achieve neutral adjusted EBITDA in 2020," said Ted Myles, AMAG’s chief financial officer. "With strong cash flows from our commercial products and our flexible cost structure, we believe we are well positioned to bring innovative therapies to patients in need and to build a new chapter of durable growth for shareholders. Our updated guidance and our preliminary view of an adjusted EBITDA-neutral 2020 reflects continued strong commercial performance from Makena SC auto-injector, Feraheme and Intrarosa, and includes a fully-funded launch of Vyleesi and our clinical development plans for AMAG-423 and ciraparantag."

2019 Financial Guidance

2 See reconciliations of 2019 GAAP to non-GAAP financial guidance at conclusion of this press release.

SECOND QUARTER ENDED JUNE 30
Revenue
Growth of the company’s key marketed products continued in the second quarter, with strong revenue and market share performance.

Makena SC auto-injector revenue grew to $41.0 million, compared with $13.5 million in the same period last year (launched March 2018).

The company did not ship any Makena IM product during the quarter, therefore the full impact of the $10.0 million change in estimated Medicaid and commercial rebate liabilities from prior period sales appears as negative revenue during the quarter.

Feraheme revenue increased to $42.1 million, an increase of 12% over the same period last year. Feraheme’s average quarterly market share increased to 17.2%, compared with 16.3% in the same period last year and 16.1% in the first quarter of 2019.

Intrarosa revenue totaled $4.9 million, compared with $3.2 million in the same period last year. TRx share increased to 4.5%, compared with 3.2% in the same period last year and 3.9% in the first quarter of 2019.

Operating Expenses

Cost of products sales (CoPS) in the second quarter of 2019 included a $4.8 million write-down of Makena IM inventory; CoPS in the second quarter of 2018 included $61.4 million in amortization expense primarily related to the Makena IM intangible asset.

Selling, general and administrative (SG&A) expenses in the second quarter of 2018 included an expense reversal of $49.8 million related to the Makena contingent consideration liability because the company no longer believed that it was probable that a sales milestone would be achieved. Excluding this expense reversal, SG&A expenses increased by $11.6 million, or 18%, in the second quarter of 2019, compared with the same period last year, primarily due to increased marketing expenses related to the upcoming launch of Vyleesi.

The intangible asset impairment charge relates to the full impairment of the Makena IM intangible asset (described above).

As of June 30, 2019, the company’s cash and investments totaled $261.0 million.

The FDA approval of Vyleesi triggered a $60.0 million payment obligation to Palatin Technologies, which was paid in July 2019.

Long-term debt totaled $320.0 million (representing the principal amounts outstanding of the 2022 convertible notes).

Operating Loss and Adjusted EBITDA

The impact of the $77.4 million non-cash impairment charge and the related $4.8 million inventory write-down in the second quarter of 2019 contributed to an operating loss of $115.8 million. The company reported negative adjusted EBITDA of $24.4 million in the second quarter of 2019.

CONFERENCE CALL AND WEBCAST ACCESS
AMAG Pharmaceuticals, Inc. will host a conference call and webcast today at 8:00 a.m. ET to discuss the company’s second quarter 2019 financial results, recent business highlights and 2019 outlook.

DIAL-IN NUMBER
U.S./Canada Dial-in Number: (877) 412-6083
International Dial-in Number: (702) 495-1202
Conference ID: 8573359

Replay Dial-in Number: (855) 859-2056
Replay International Dial-in Number: (404) 537-3406
Conference ID: 8573359

A telephone replay will be available from approximately 11:00 a.m. ET on August 7, 2019 through midnight on August 14, 2019.

The webcast with slides will be accessible through the Investors section of the company’s website at www.amagpharma.com. A replay of the webcast will be archived on the website for 30 days.