On August 1, 2019 Intellia Therapeutics, Inc. (NASDAQ:NTLA), reported operational highlights and financial results for the second quarter ended June 30, 2019 (Press release, Intellia Therapeutics, AUG 1, 2019, View Source [SID1234538013]).

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"We continue to build our in vivo and engineered cell therapy pipeline in support of our mission to develop curative genome editing therapies for patients," said Intellia President and Chief Executive Officer John Leonard, M.D. "With IND-enabling toxicology studies underway for NTLA-2001, we are well-positioned to submit an IND in mid-2020 for the first systemically delivered CRISPR/Cas9-based therapy for transthyretin amyloidosis. Additionally, by the end of this year, we plan to select our first engineered cell therapy development candidate to treat acute myeloid leukemia."

Second Quarter 2019 and More Recent Operational Highlights

ATTR Program: Intellia’s first in vivo development candidate, NTLA-2001, is for the treatment of transthyretin amyloidosis (ATTR). As part of an ongoing durability study of the Company’s lead lipid nanoparticle (LNP) formulation in support of NTLA-2001, we have demonstrated six months of durable liver editing with sustained reduction of circulating transthyretin (TTR) protein (average reduction >95%) following a single dose in non-human primates (NHPs). The Company announced today it has conducted its pre-investigational new drug (IND) meeting with the U.S. Food and Drug Administration (FDA), has initiated IND-enabling toxicology studies and expects to submit an IND application for NTLA-2001 in mid-2020. Additionally, the Company’s supply chain operations are in place to support manufacturing of Phase 1 materials. NTLA-2001 is being co-developed with Regeneron Pharmaceuticals, Inc. (Regeneron), with Intellia as the lead development and commercialization party.
AML Program: Intellia’s lead T cell receptor (TCR)-based therapy uses engineered T cells to target Wilms’ Tumor 1 (WT1) for the treatment of acute myeloid leukemia (AML). During the second quarter of 2019, the Company and its research collaborators at IRCCS Ospedale San Raffaele initiated functional testing of multiple lead TCRs in patient-derived xenograft models and remain on track to nominate a development candidate by the end of 2019. In parallel, Intellia has begun establishing manufacturing capabilities to support clinical evaluation.

In Vivo Insertion in NHPs: As previously disclosed, Intellia demonstrated the first CRISPR/Cas9-mediated, targeted transgene insertion in the liver of NHPs, using Factor 9 (F9) as a model gene. F9 is a gene that encodes for the Factor IX (FIX) protein, a blood-clotting protein that is missing or defective in hemophilia B patients. The study is a collaborative effort between Intellia and Regeneron, using Intellia’s LNP delivery system of CRISPR/Cas9 with an adeno-associated virus (AAV) containing a proprietary bi-directional insertion template. Following a single dose of the hybrid LNP-AAV delivery system containing an F9 DNA template, the Company demonstrated that the circulating human FIX protein levels achieved at day 14 were durable through the two months of completed observation and were within the normal human range (source: Amiral et al, Clin. Chem., 1984). Additionally, the NHP data expands on the durability of clinically relevant human FIX protein levels achieved in mice for over 12 months. Intellia is currently working closely with Regeneron on moving the program forward and is also independently evaluating the hybrid LNP-AAV delivery system for targeted insertion across several other transgenes of interest in an in vivo setting.

Expanded Management Team: In May, Intellia announced the appointment of Laura Sepp-Lorenzino, Ph.D., as executive vice president and chief scientific officer. Dr. Sepp-Lorenzino brings decades of leadership and research and development experience and leads Intellia’s drug research organization.

Upcoming Milestones

The Company has set forth the following for pipeline progression:

ATTR:
° Commence manufacturing of NTLA-2001 Phase 1 materials by the end of 2019
° Submit IND application for NTLA-2001 in mid-2020
AML:
° Nominate first engineered cell therapy development candidate by the end of 2019
Platform:
° Present additional in vivo and engineered cell therapy data at upcoming scientific conferences by the end of 2019

Second Quarter 2019 Financial Results

Cash Position: Cash, cash equivalents and marketable securities were $275.8 million as of June 30, 2019, compared to $314.1 million as of December 31, 2018. The decrease was driven by cash used to fund operations of $59.8 million, which was offset in part by $7.9 million of net equity proceeds raised from the Company’s At The Market ("ATM") offerings, $7.0 million of funding received under the Novartis collaboration, $4.1 million of ATTR cost reimbursements made by Regeneron, and $2.6 million in proceeds from employee-based stock plans.
ATM Proceeds Due: The Company has $27.1 million in current assets on the balance sheet as of June 30, 2019 related to proceeds due from the ATM offerings that were received in the first week of July 2019.
Collaboration Revenue: Collaboration revenue increased by $3.4 million to $11.1 million during the second quarter of 2019, compared to $7.7 million during the second quarter of 2018. The increase in collaboration revenue in 2019 was primarily driven by amounts recognized from the expansion of the existing collaboration with Novartis, as well as by amounts recognized under the Company’s ATTR Co/Co agreement with Regeneron. As previously disclosed, Regeneron is obligated to fund approximately 50% of the development costs for the ATTR program.
R&D Expenses: Research and development expenses increased by $2.0 million to $25.5 million during the second quarter of 2019, compared to $23.5 million during the second quarter of 2018. This increase was primarily driven by the advancement of Intellia’s pipeline and the expansion of the research and development organization.
G&A Expenses: General and administrative expenses increased by $5.3 million to $13.1 million during the second quarter of 2019, compared to $7.8 million during the second quarter of 2018. This increase was primarily driven by personnel-related costs to support Intellia’s larger research and development organization, and an increase in legal and intellectual property (IP) costs.
Net Loss: The Company’s net loss was $25.7 million for the second quarter of 2019, compared to $22.2 million during the second quarter of 2018.
Financial Guidance

Intellia expects that its cash, cash equivalents, marketable securities and proceeds due from the ATM offerings as of June 30, 2019, as well as technology access and funding from Novartis and Regeneron, will enable Intellia to fund its anticipated operating expenses and capital expenditure requirements into the second half of 2021. This expectation excludes any potential milestone payments or extension fees that could be earned and distributed under the collaboration agreements with Novartis and Regeneron or any strategic use of capital not currently in the Company’s base-case planning assumptions.

Conference Call to Discuss Second Quarter 2019 Earnings

The Company will discuss these results on a conference call today, August 1, 2019, at 8 a.m. ET.

To join the call:

U.S. callers should dial 866-575-6539 and use conference ID# 6223506, approximately five minutes before the call.
International callers should dial +1 856-344-9299 and use conference ID# 6223506, approximately five minutes before the call.
A replay of the call will be available through the Events and Presentations page of the Investor Relations section of the Company’s website at www.intelliatx.com, beginning on August 1, 2019 at 12 p.m. ET.

On August 1, 2019 Reata Pharmaceuticals, Inc. (Nasdaq: RETA), a clinical-stage biopharmaceutical company, reported that it will report financial results and provide an update on recent progress on its development programs on Thursday, August 8, 2019, at 8:00 a.m. ET before the market opens (Press release, Reata Pharmaceuticals, AUG 1, 2019, View Source [SID1234538029]).

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The conference call will be accessible by dialing (844) 348-3946 (toll-free domestic) or (213) 358-0892 (international) using the access code: 7587139. The webcast link is View Source

Second quarter financial results to be discussed during the call will be included in an earnings press release that will be available on the company’s website shortly before the call at View Source and will be available for 12 months after the call. The audio recording and webcast will be accessible for at least 90 days after the event at View Source.

On August 1, 2019 Verastem, Inc. (Nasdaq: VSTM), operating as Verastem Oncology (or "the Company"), focused on developing and commercializing medicines seeking to improve the survival and quality of life of cancer patients, reported financial results for the three months ended June 30, 2019, and provided an overview of recent accomplishments and clinical development progress for duvelisib (COPIKTRA) (Press release, Verastem, AUG 1, 2019, View Source [SID1234538045]).

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"With the third full quarter of the COPIKTRA launch now complete, including the first full quarter of the follicular lymphoma (FL) marketing campaign, net sales are up 81% quarter-over-quarter," said Dan Paterson, President and Chief Operating Officer of Verastem Oncology. "We have begun to see early signs that our physician education efforts are having an impact and overcoming the historical misperceptions that surround PI3K inhibitors, namely through strong key opinion leader engagement, increased podium presentations and numerous new requests for investigator-sponsored research. Overall, we are encouraged by the breadth of reach the commercial team is achieving with hematologic oncologists and we look forward to building on this strong momentum for the remainder of 2019."

Key Second Quarter 2019 and Recent Accomplishments:

Corporate and Financial

Brian Stuglik Appointed Chief Executive Officer and Other Leadership Changes – In July, Verastem Oncology announced the appointment of Brian Stuglik as Chief Executive Officer. Mr. Stuglik, who has served as a member of the Company’s Board of Directors since September 2017, succeeds Robert Forrester who stepped down in June 2019. Other leadership changes include Dan Paterson, the Company’s Chief Operating Officer, assuming the role of President and Chief Operating Officer and Rob Gagnon, the Company’s Chief Financial Officer, appointed to Chief Business and Financial Officer.
Signed Exclusive License Agreement with Sanofi for the Development and Commercialization of Duvelisib in Select Eurasian Territories – In July 2019, the Company announced its entry into an exclusive license agreement with Sanofi, under which Verastem Oncology granted exclusive rights to Sanofi to develop and commercialize products containing COPIKTRA in Russia and CIS, Turkey, the Middle East and Africa. Under the terms of the agreement, Verastem Oncology will receive an upfront payment of $5 million (USD) and is eligible to receive aggregate payments of up to $42 million if certain development and sales milestones are successfully achieved, plus double-digit percentage royalties based on future net sales of COPIKTRA in the licensed territories. In exchange, Sanofi received exclusive rights to develop and commercialize COPIKTRA and hold the marketing authorization and product license for COPIKTRA in the licensed territories. Additionally, Sanofi will have the right to collaborate with Verastem Oncology on certain global development and clinical trial activities.
COPIKTRA (duvelisib)

Ongoing Commercialization of COPIKTRA in the United States (U.S.) – Verastem Oncology continued the ongoing launch of COPIKTRA, an oral inhibitor of phosphoinositide 3-kinase (PI3K), and the first approved dual inhibitor of PI3K-delta and PI3K-gamma, in the U.S. for the treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) after at least two prior therapies or relapsed or refractory FL after at least two prior systemic therapies. Accelerated approval in FL was based on overall response rate and continued approval may be contingent upon confirmatory trials, the first of which is expected to start in 2019. During the second quarter of 2019, the number of prescribing physicians increased by over 50% and the Company has now achieved reimbursement coverage for COPIKTRA with virtually all the targeted insurance plans. COPIKTRA contains a BOXED WARNING and Verastem Oncology has implemented a Risk Evaluation and Mitigation Strategy to provide appropriate dosing and safety information to better support physicians in managing their patients on COPIKTRA.
Presented COPIKTRA Data at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2019 Annual Meeting – In early June, an abstract was presented at ASCO (Free ASCO Whitepaper) 2019 that highlighted dose modification data from the Phase 3 DUO study evaluating COPIKTRA in patients with relapsed or refractory CLL after at least two prior therapies. This is the same indication for which COPIKTRA received approval from the FDA in September 2018. These new data demonstrated that dose modifications of COPIKTRA may be used to effectively manage treatment-emergent adverse events, while allowing patients to remain on therapy. Specifically, the data suggest that dosing interruptions of a median of 15 days resulted in similar response rates and progression-free survival to the 16.4 months shown in the COPIKTRA label. The data also showed that when adverse events of special interest (AESIs) occur, they tend to appear in the first few months of treatment, followed by a proportionate decrease in the number of patients experiencing AESIs.
Presented COPIKTRA Data at the European Hematology Association (EHA) (Free EHA Whitepaper) 2019 Annual Meeting – In June, two posters were presented at EHA (Free EHA Whitepaper) 2019. The first poster described results from a post-hoc analysis evaluating the effect of COPIKTRA on lymphocytosis in patients with relapsed or refractory CLL/SLL from the Phase 3 DUO study. In this analysis, treatment with COPIKTRA rapidly increased lymphocytes and resulted in shrinkage of lymph nodes, with 86% of patients achieving a lymph node response. The data were similar in high-risk patients. COPIKTRA also resulted in resolution of lymphocytosis at up to 21 weeks. The other poster was an encore presentation of the COPIKTRA dose modification data from ASCO (Free ASCO Whitepaper) 2019.
Presented Supportive Duvelisib Data in Relapsed or Refractory PTCL at the 15th International Congress on Malignant Lymphoma (ICML) – In June, Dr. Steven Horwitz, MD, Memorial Sloan Kettering Cancer Center, and lead investigator of the Company’s ongoing Phase 2 PRIMO study, gave an oral presentation highlighting supportive data from two Phase 1 clinical studies evaluating duvelisib in patients with relapsed or refractory PTCL. Across both studies, patients treated with duvelisib demonstrated preliminary, but compelling clinical activity, including a positive trend in response rates. The preliminary safety profile of duvelisib in patients with relapsed or refractory PTCL was considered reasonable and consistent with prior studies. The goal of the ongoing Phase 2 PRIMO study is to provide guidance on a duvelisib monotherapy dosing regimen in patients with relapsed or refractory PTCL and to further characterize its efficacy and tolerability in this population.

Other abstracts presented at ICML included an analysis of efficacy and safety of duvelisib compared to ofatumumab from the Phase 3 DUO study in patients with relapsed or refractory CLL/SLL after ≥2 prior therapies, characterization of duvelisib in patients with refractory marginal zone lymphoma from the Phase 2 DYNAMO study, and an overview of preclinical data showing the potential of duvelisib in mantle cell lymphoma.
Second Quarter 2019 Financial Results

Net product revenue for the three months ended June 30, 2019 (2019 Quarter) was $3.0 million, which reflects the third full quarter of recorded sales for COPIKTRA. The Company did not have any product revenue for the three months ended June 30, 2018 (2018 Quarter) as the FDA approved COPIKTRA on September 24, 2018. License and collaboration revenue for the 2019 Quarter was $0.1 million, compared to $10.0 million for the 2018 Quarter. The 2018 Quarter included license revenue of $10.0 million, related to the upfront payment received in connection with the license and collaboration agreement with Yakult in June 2018.

Research and development (R&D) expense for the 2019 Quarter was $11.3 million, compared to $12.4 million for the 2018 Quarter. The decrease of $1.1 million, or 8%, was primarily related to a decrease in consulting fees as a result of activities to file a New Drug Application for COPIKTRA in the 2018 Quarter and lower R&D costs associated with the development of COPIKTRA as a result of site closures in the Company’s Phase 3 DUO and Phase 2 DYNAMO studies throughout 2018 and 2019 as patients continued to complete treatment. All of these lower costs were partially offset by an increase in costs related to the Company’s Phase 2 PRIMO study for the treatment of patients with relapsed or refractory PTCL.

Selling, general and administrative expense for the 2019 Quarter was $29.3 million, compared to $15.8 million for the 2018 Quarter. The increase of $13.5 million, or 85%, was primarily due to higher personnel and related costs, as well as promotional and consulting costs in support of the launch of COPIKTRA which includes executive and non-executive separation costs, debt advisory and other costs of $2.7 million.

Net loss for the 2019 Quarter was $42.2 million, or $0.57 per share (basic and diluted), compared to $18.4 million, or $0.30 per share (basic and diluted), for the 2018 Quarter.

For the 2019 Quarter, non-GAAP adjusted net loss was $35.7 million, or $0.48 per share, compared to non-GAAP adjusted net loss of $16.7 million, or $0.27 per share, for the 2018 Quarter. Please refer to the GAAP to Non-GAAP Reconciliation attached to this press release.

As of June 30, 2019, Verastem Oncology had cash, cash equivalents and short-term investments of $187.3 million.

Financial Guidance for Fiscal 2019

Verastem Oncology is raising its full-year guidance for net product revenue of COPIKTRA. The Company now expects net product revenue of COPIKTRA to be in the range of $12-14 million, higher than the previous estimate of $10-12 million. This guidance is based on product revenue to date, current run rates and near-term expectations.

Conference Call and Webcast Information

The Verastem Oncology management team will host a conference call and webcast today, Thursday, August 1, 2019, at 4:30 PM (ET). The call can be accessed by dialing (877) 341-5660 (U.S. and Canada) or (315) 625-3226 (international), five minutes prior to the start of the call and providing the passcode 6256817.

The live, listen-only webcast of the conference call can be accessed by visiting the investors section of the Company’s website at www.verastem.com. A replay of the webcast will be archived on the Company’s website for 90 days following the call.

About Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma

Chronic lymphocytic leukemia (CLL) and small lymphocytic lymphoma (SLL) are cancers that affect lymphocytes and are essentially the same disease, with the only difference being the location where the cancer primarily occurs. When most of the cancer cells are located in the bloodstream and the bone marrow, the disease is referred to as CLL, although the lymph nodes and spleen are often involved. When the cancer cells are located mostly in the lymph nodes, the disease is called SLL. The symptoms of CLL/SLL include a tender, swollen abdomen and feeling full even after eating only a small amount. Other symptoms can include fatigue, shortness of breath, anemia, bruising easily, night sweats, weight loss, and frequent infections. However, many patients with CLL/SLL will live for years without symptoms. In 2018, there were approximately 200,000 patients in the United States affected by CLL/SLL with nearly 20,000 new diagnoses. While there are therapies currently available, real-world data reveals that a significant number of patients either relapse following treatment, become refractory to current agents, or are unable to tolerate treatment, representing a significant medical need. The potential of additional oral agents, particularly as a monotherapy that can be used in the general community physician’s armamentarium, may hold significant value in the treatment of patients with CLL/SLL.

About Follicular Lymphoma

Follicular lymphoma (FL) is typically a slow-growing or indolent form of non-Hodgkin lymphoma (NHL) that arises from B-lymphocytes, making it a B-cell lymphoma. In 2018, this lymphoma subtype accounted for 20 to 30 percent of all NHL cases, with more than 140,000 people in the United States with FL and more than 13,000 newly diagnosed patients. Common symptoms of FL include enlargement of the lymph nodes in the neck, underarms, abdomen, or groin, as well as fatigue, shortness of breath, night sweats, and weight loss. Often, patients with FL have no obvious symptoms of the disease at diagnosis. Follicular lymphoma is usually not considered to be curable, but more of a chronic disease, with patients living for many years with this form of lymphoma. The potential of additional oral agents, particularly as a monotherapy that can be used in the general community physician’s armamentarium, may hold significant value in the treatment of patients with FL.

About Peripheral T-Cell Lymphoma

Peripheral T-cell lymphoma (PTCL) is a rare, aggressive type of non-Hodgkin lymphoma (NHL) that develops in mature white blood cells called "T cells" and "natural killer (NK) cells"1 which circulate with the lymphatic system.2 PTCL accounts for between 10-15% of all non-Hodgkin lymphomas (NHLs) and generally affects people aged 60 years and older.1 Although there are many different subtypes of peripheral T-cell lymphoma, they often present in a similar way, with widespread, enlarged, painless lymph nodes in the neck, armpit or groin.2 There is currently no established standard of care for patients with relapsed or refractory disease.1

About COPIKTRA (duvelisib)

COPIKTRA is an oral inhibitor of phosphoinositide 3-kinase (PI3K), and the first approved dual inhibitor of PI3K-delta and PI3K-gamma, two enzymes known to help support the growth and survival of malignant B-cells. PI3K signaling may lead to the proliferation of malignant B-cells and is thought to play a role in the formation and maintenance of the supportive tumor microenvironment.3,4,5 COPIKTRA is indicated for the treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) after at least two prior therapies and relapsed or refractory follicular lymphoma (FL) after at least two prior systemic therapies. COPIKTRA is also being developed by Verastem Oncology for the treatment of peripheral T-cell lymphoma (PTCL), for which it has received Fast Track status, and is being investigated in combination with other agents through investigator-sponsored studies.6 For more information on COPIKTRA, please visit www.COPIKTRA.com. Information about duvelisib clinical trials can be found on www.clinicaltrials.gov.

On August 1, 2019 Emergent BioSolutions Inc. (NYSE: EBS) reported financial results for the second quarter and six months ended June 30, 2019 (Press release, Emergent BioSolutions, AUG 1, 2019, View Source [SID1234538070]).

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Q2 2019 AND RECENT BUSINESS ACCOMPLISHMENTS

Procurement

Announced the exercise by the Biomedical Advanced Research and Development Authority (BARDA) of the first contract option, valued at $261 million, to procure doses of the next generation anthrax vaccine candidate AV7909 (anthrax vaccine adsorbed with adjuvant) for delivery into the U.S. Strategic National Stockpile (SNS) over 12 months.

Awarded a 10-year procurement contract from the U.S. Department of Health and Human Services (HHS), valued at approximately $535 million, to deliver VIGIV (vaccinia immune globulin intravenous) into the SNS in support of smallpox preparedness.

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Product Development

Initiated a Phase III trial to evaluate the lot consistency, immunogenicity and safety of the next generation anthrax vaccine candidate AV7909, with funding from BARDA, pursuant to a development and procurement contract signed in September 2016; the Company also continued manufacturing of AV7909, first begun in Q1 2019, and is preparing to initiate in the third quarter the first delivery of doses of AV7909 into the SNS pursuant to the same September 2016 contract. More recently, enrollment for this Phase III trial has now been completed, ahead of schedule.

Provided interim analysis of the Phase II clinical study evaluating the safety and immunogenicity of the Company’s chikungunya virus virus-like-particle (VLP) vaccine candidate, CHIKV-VLP, showing with a single dose administered up to 98% of study participants produced neutralizing antibodies against the chikungunya virus by day 7, with persistent effect out to the six-month visit, including in the single-dose regimen.

Granted marketing authorization in five EU countries for the Company’s oral typhoid vaccine, expanding the availability of this vaccine across Europe.

Granted approval by the U.S. Food and Drug Administration (FDA) of a change in the storage conditions of the Company’s oral cholera vaccine, Vaxchora (Cholera Vaccine, Live, Oral) from frozen to 2-8 degrees Celsius as well as the transfer of bulk drug substance manufacturing from the Company’s facilities in San Diego to its manufacturing site in Bern, Switzerland.

2019 FINANCIAL PERFORMANCE (unaudited)

(I) Quarter Ended June 30, 2019 (Q2)

Revenues

Total Revenues
For Q2 2019, total revenues were $243.2 million, an increase of 10% over 2018. Total revenues reflect the contribution of recently acquired products as well as increased contracts and grants revenue.

Product Sales
For Q2 2019, product sales were $183.5 million, an increase of $3.4 million or 2% as compared to 2018. The increase primarily reflects sales of both NARCAN (naloxone HCl) Nasal Spray, which was acquired in October 2018, and other products, offset by decreased sales of ACAM2000 (Smallpox (Vaccinia) Vaccine, Live) and BioThrax (Anthrax Vaccine Adsorbed).

Contract Manufacturing
For Q2 2019, revenue from the Company’s contract manufacturing operations was $18.7 million, a decrease of $4.9 million or 21% as compared to 2018. The decrease primarily reflects contracted service work for a single customer in Q2 2018 that did not recur in Q2 2019.

Contracts and Grants
For Q2 2019, revenue from the Company’s development-based contracts and grants was $41.0 million, an increase of $24.5 million as compared to 2018. The increase primarily reflects increased R&D activities related to certain ongoing funded development programs, most notably AV7909.

Operating Expenses

Cost of Product Sales and Contract Manufacturing
For Q2 2019, cost of product sales and contract manufacturing was $100.8 million, an increase of $15.5 million or 18% as compared to 2018. The increase primarily reflects the impact of an increase in product sales due to the contribution of recently acquired products NARCAN Nasal Spray, Vivotif (Typhoid Vaccine Live Oral Ty21a), and Vaxchora, as well as an increase in facilities expenses.

Research and Development (Gross and Net)

For Q2 2019, gross R&D expenses were $63.9 million, an increase of $39.2 million or 159% as compared to 2018. The increase primarily reflects costs associated with incremental development programs from the recent acquisitions of PaxVax and Adapt Pharma in October 2018, as well as timing of manufacturing development activities related to the AV7909 program.

For Q2 2019, net R&D expense, which reflects investments made in development programs that are not currently funded in whole or in part by third-party partners and is calculated as gross research and development expenses minus contracts and grants revenue, was $22.9 million, an increase of $14.7 million or 179% as compared to 2018. The increase primarily reflects investments in the development of the CHIKV-VLP vaccine, FLU-IGIV hyperimmune and various programs related to opioid overdose response. The Q2 2019 net R&D expense was 11% of adjusted revenue (total revenue less contracts & grants) compared to 4% of adjusted revenue in Q2 2018.

Selling, General and Administrative

For Q2 2019, selling, general and administrative expenses were $70.8 million, an increase of $31.3 million or 79% as compared to 2018. The increase primarily reflects the addition of the operations and integration costs associated with the PaxVax and Adapt Pharma acquisitions.

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Amortization of Intangible Assets

For Q2 2019, amortization of intangible assets was $14.7 million versus $3.9 million as compared to 2018. The increase entirely reflects higher non-cash intangible asset amortization costs associated with the PaxVax and Adapt Pharma acquisitions.

Income Taxes

For Q2 2019, the benefit from income taxes in the amount of $5.6 million includes the impact of non-deductible acquisition transaction costs and other permanent items. The effective tax rate for Q2 2019 is not meaningful given the lack of any pre-tax income for the quarter.

Net (Loss) Income & Adjusted Net (Loss) Income

For Q2 2019, the Company recorded a net loss of $9.5 million, or $0.18 per diluted share, versus a net income of $50.1 million, or $0.98 per diluted share, in 2018.

For Q2 2019, the Company recorded an adjusted net loss of $6.3 million, or $0.12 per diluted share, versus an adjusted net income of $54.7 million, or $1.07 per diluted share, in 2018. (1)

EBITDA & Adjusted EBITDA

For Q2 2019, the Company recorded EBITDA of $21.6 million versus $79.0 million in 2018. (1)

For Q2 2019, the Company recorded adjusted EBITDA of $26.2 million versus $80.4 million in 2018. (1)

(II) Six months ended June 30, 2019 (unaudited)

Revenues

Total Revenues
For the six months ended June 30, 2019, total revenues were $433.9 million, an increase of 28% over 2018. Total revenues reflect a significant increase in product sales due to the contribution of recently acquired products.

Product Sales
For the six months ended June 30, 2019, product sales were $336.5 million, an increase of $80.7 million or 32% as compared to 2018. The increase primarily reflects sales of NARCAN Nasal Spray, which was acquired in October 2018, and other products, offset by decreased sales of ACAM2000 and BioThrax.

Contract Manufacturing
For the six months ended June 30, 2019, revenue from the Company’s contract manufacturing operations was $34.6 million, a decrease of $15.2 million or 31% as compared to 2018. The decrease primarily reflects contracted service work in the six months of 2018 that did not recur in the six months of 2019.

Contracts and Grants
For the six months ended June 30, 2019, revenue from the Company’s development-based contracts and grants was $62.8 million, an increase of $30.4 million or 94% as compared to 2018. The increase primarily reflects increased R&D activities related to certain ongoing funded development programs, most notably AV7909.

Operating Expenses

Cost of Product Sales and Contract Manufacturing
For the six months ended June 30, 2019, cost of product sales and contract manufacturing was $192.7 million, an increase of $53.3 million or 38% as compared to 2018. The increase primarily reflects the impact of an increase in product sales due to the contribution of recently acquired products NARCAN Nasal Spray, Vivotif, and Vaxchora, which were all acquired in October 2018, as well as an increase in facilities related expenses.

Research and Development (Gross and Net)
For the six months ended June 30, 2019, gross R&D expenses were $110.0 million, an increase of $56.2 million compared to 2018. The increase primarily reflects costs associated with incremental development programs from the recent acquisitions of PaxVax and Adapt Pharma in October 2018, as well as timing of manufacturing development activities related to the AV7909 program.

For the six months ended June 30, 2019, net R&D expense, which reflects investments made in development programs that are not currently funded in whole or in part by third-party partners and is calculated as gross research and development expenses minus contracts and grants revenue, was $47.2 million, an increase of $25.8 million or 121% as compared to 2018. The increase primarily reflects investments in the development of the CHIKV-VLP vaccine, FLU-IGIV hyperimmune and various programs related to opioid overdose response. The six months of 2019 net R&D expense was 13% of adjusted revenue (total revenue less contracts & grants) compared to 7% of adjusted revenue in the six months of 2018.

Selling, General and Administrative
For the six months ended June 30, 2019, selling, general and administrative expenses were $136.4 million, an increase of $56.7 million or 71% as compared to 2018. The increase primarily reflects the addition of the operations and integration costs associated with the PaxVax and Adapt Pharma acquisitions.

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Amortization of Intangible Assets
For the six months ended June 30, 2019, amortization of intangible assets was $29.2 million versus $7.8 million as compared to 2018. The increase entirely reflects higher non-cash intangible asset amortization costs associated with the PaxVax and Adapt Pharma acquisitions.

Income Taxes
For the six months ended June 30, 2019, the benefit from income taxes in the amount of $17.4 million includes the impact of non-deductible acquisition transaction costs and other permanent items. The effective tax rate for the six months of 2019 is not meaningful given the lack of any pre-tax income for the six month period.

Net (Loss) Income & Adjusted Net (Loss) Income
For the six months ended June 30, 2019, the Company recorded a net loss of $35.6 million, or $0.69 per diluted share, versus a net income of $45.2 million, or $0.89 per diluted share, in 2018.

For the six months ended June 30, 2019, the Company recorded an adjusted net loss of $0.7 million, or $0.01 per diluted share, versus an adjusted net income of $53.1 million, or $1.04 per diluted share, in 2018. (1)

EBITDA & Adjusted EBITDA
For the six months ended June 30, 2019, the Company recorded EBITDA of $19.8 million versus $82.1 million in 2018. (1)

For the six months ended June 30, 2019, the Company recorded adjusted EBITDA of $33.3 million versus $83.7 million in 2018. (1)

2019 FINANCIAL FORECAST (Reaffirmed)

For full year 2019, the company reaffirms its expectation of the following forecasted financial metrics:

The Company’s financial forecast for 2019 includes the anticipated impact of full year product sales, continued contract manufacturing and contracts & grants revenue as well as continued investment in internally funded development projects. The outlook for 2019 does not include estimates for potential new corporate development or other M&A transactions.

Q3 2019 REVENUE FORECAST

For Q3 2019, the Company forecast for total revenues is $245 million to $275 million.

FOOTNOTES

(1) See "Reconciliation of Net (Loss) Income to Adjusted Net (Loss) Income, EBITDA and Adjusted EBITDA" for a definition of terms and a reconciliation table.

CONFERENCE CALL AND WEBCAST INFORMATION
Company management will host a conference call at 5:00 pm (Eastern Time) today, August 1, 2019, to discuss these financial results. This conference call can be accessed live by telephone or through Emergent’s website:

Live Teleconference Information:
Dial in: [US] (855) 766-6521; [International] (262) 912-6157
Conference ID: 8166567

Live Webcast Information:
Visit View Source for the live webcast feed.

A replay of the call can be accessed at www.emergentbiosolutions.com under "Investors."

On August 1, 2019 Oncternal Therapeutics, Inc. (Nasdaq: ONCT), a clinical-stage biotechnology company developing potential first-in-class product candidates for cancers with critical unmet medical need, reported that it will report second quarter 2019 financial results after the market closes on Thursday, August 8, 2019 (Press release, Oncternal Therapeutics, AUG 1, 2019, View Source [SID1234538094]). Oncternal’s management will host a webcast and conference call at 2:00 p.m. PDT (5:00 p.m. EDT) to discuss the Company’s financial results and provide a comprehensive business update.

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A live webcast of the call will be available online via a link from the investor relations page of the Company’s website at www.oncternal.com, and the call will be archived there for at least 30 days.