On November 8, 2018 Cardinal Health (NYSE: CAH) reported first quarter fiscal year 2019 revenues of $35.2 billion, an increase of 8 percent (Press release, Cardinal Health, NOV 8, 2018, View Source [SID1234530990]). The company also reported growth in GAAP operating earnings of 211 percent to $816 million and a decrease in non-GAAP operating earnings of 11 percent to $542 million. GAAP operating earnings included a gain of $508 million ($378 million after-tax) related to the naviHealth divestiture. GAAP diluted earnings per share (EPS) from continuing operations increased 439 percent to $1.94, while non-GAAP diluted EPS increased 18 percent to $1.29.

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"We are pleased that the first quarter provided a solid start to fiscal year 2019," said Mike Kaufmann, CEO of Cardinal Health. "Operating performance came in as expected, and we are on track in executing on our strategic initiatives to deliver increased value to our shareholders, our customers and their patients. We look forward to making further strides over the balance of the year and building on Cardinal Health’s essential role in healthcare."

Tax rate

During the three months ended September 30, 2018 and 2017, GAAP effective tax rates were 19.4 percent and 34.2 percent, respectively, and non-GAAP effective tax rates were 14.0 percent and 34.1 percent, respectively.

This quarter’s lower effective tax rates are attributable to the lower U.S. federal income tax rate due to the U.S. Tax Cuts and Jobs Act, and the approximately $0.18 per share positive impact of discrete tax benefits primarily related to international legal entity changes.

Segment results
Pharmaceutical segment
First quarter revenue for the Pharmaceutical segment increased 9 percent to $31.4 billion due to sales growth from Pharmaceutical Distribution and Specialty Solutions customers, partially offset by the divestiture of the company’s China distribution business.

Fiscal year 2019 outlook
The company does not provide GAAP EPS outlook because it is unable to reliably forecast most of the items that are excluded from GAAP EPS to calculate non-GAAP EPS. These items could cause EPS to differ materially from non-GAAP EPS. See "Use of Non-GAAP Measures" following the attached schedules for additional explanation.

The company reaffirmed its fiscal year 2019 guidance range for non-GAAP diluted EPS of $4.90 to $5.15.

Additional first-quarter and recent highlights

Announced Victor Crawford will join the company as chief executive officer of the Pharmaceutical segment on November 12

Exited transition services agreement (TSA) with Medtronic for the Europe, Middle East and Africa region during the last week of October and on track for TSA exits in the remaining regions in early 2019

The Cardinal Health board of directors approved a quarterly dividend of $0.4763 per share. The dividend will be payable on January 15, 2019 to shareholders of record at the close of business on January 2, 2019

Recently completed a $600 million share repurchase program, and this week, the board of directors approved a three-year authorization to repurchase up to an additional $1 billion of Cardinal Health common shares, which will expire on December 31, 2021. The company is now authorized to repurchase up to $1.3 billion of its common shares

Sponsored inaugural Women Pharmacist Day on October 12, in conjunction with National Pharmacist Month, to recognize the important contributions women pharmacists make to delivering quality care to patients

Webcast

Cardinal Health will host a webcast today at 8:30 a.m. Eastern to discuss first quarter results. To access the webcast and corresponding slide presentation, go to the Investor Relations page at ir.cardinalhealth.com. No access code is required.

Presentation slides and a webcast replay will be available on the Cardinal Health website at ir.cardinalhealth.com until November 7, 2019.

Upcoming webcasted investor events

Credit Suisse 27th Annual Healthcare Conference on November 14 at 8:35 a.m. Mountain in Scottsdale, Ariz.

37th Annual J.P. Morgan Healthcare Conference on January 7-10, 2019 in San Francisco, Calif.

On November 8, 2018 Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE), a clinical-stage biotechnology company that designs and develops innovative human enzyme therapeutics for patients with rare genetic diseases and cancer, reported financial results for the third quarter ended September 30, 2018 (Press release, Aeglea BioTherapeutics, NOV 8, 2018, View Source [SID1234531038]).

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"2018 continues to be a highly productive year for Aeglea as we advance our clinical experience in pegzilarginase and demonstrate our drug hunting capabilities in rare genetic diseases," said Anthony G. Quinn, M.B Ch.B, Ph.D., president and chief executive officer of Aeglea. "Our data in Arginase 1 Deficiency (ARG1-D) continues to demonstrate rapid, well-tolerated and sustainable control of arginine that corresponds with significant improvements in patients. This progress with pegzilarginase puts us in a strong position as we look to initiate our pivotal trial in ARG1-D in the first half of 2019."

Recent Highlights

Pegzilarginase in Arginase 1 Deficiency: Significant Progress Towards Commercialization of the Company’s Lead Program

In October, the Company presented new positive interim clinical data at the 2018 American Society of Human Genetics (ASHG) Conference from its ongoing Phase 1/2 trial of pegzilarginase in patients with ARG1-D. The Company completed and exceeded its enrollment target with 16 patients and observed significant clinical improvements. 100% of patients (6 out of 6) who completed Part 2 (repeat dosing) of the study achieved consistent levels of reduced arginine. 67% of patients (4 out of 6) had meaningful clinical improvements in mobility and/or adaptive behavior after only eight weeks of repeat dosing with pegzilarginase. Pegzilarginase continues to be generally well tolerated with over 180 infusions administered to date.

In October, the Company announced that the U.S. Food and Drug Administration (FDA) has granted rare pediatric disease designation for pegzilarginase in ARG1-D.
Rare Genetic Disease Pipeline: Expansion and Acceleration

In October, the Company presented positive preclinical efficacy data on two rare genetic disease programs in the Company’s pipeline at two major medical conferences. At the 2018 ASH (Free ASH Whitepaper)G Conference, the Company presented data for AEB4104 demonstrating decreases in plasma homocysteine levels that improved important disease-related abnormalities and survival in a preclinical model of homocystinuria. At the 2018 American Society of Nephrology (ASN) Conference, the Company presented data for AEB5100 demonstrating reductions in plasma and urine cystine levels, accompanied by reduced kidney stone formation in a preclinical model of cystinuria. Both programs are advancing into IND-enabling studies.
Cancer: Promising Data at ESMO (Free ESMO Whitepaper)

At the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2018 Congress in October, the Company presented interim clinical data demonstrating monotherapy anti-tumor activity with pegzilarginase in heavily pre-treated patients with advanced melanoma. The investigator-assessed responses in 26 patients with cutaneous or uveal melanoma showed that one patient achieved a confirmed partial response (PR) at week 20 and eight patients had stable disease (SD) at week 8 or later. Six patients remained on treatment at the time of the data cutoff. Anti-tumor activity appeared greater in tumors lacking argininosuccinate synthetase 1 (ASS1) expression, which is consistent with preclinical studies that suggest tumors lacking ASS1 expression are dependent on extracellular arginine for survival.
Corporate Update

Raised $17.0 million in a single transaction in October from new and existing shareholders. The capital will be used to fund the planned pivotal trial in ARG1-D, initiate IND-enabling studies for the Company’s pipeline programs, and accelerate commercialization activities for pegzilarginase in ARG1-D.
Upcoming Events

Dr. Quinn will present a corporate update at the Evercore ISI Healthcare Conference being held November 27-29 in Boston, MA. Details regarding the date and time of the presentation and webcast will be announced prior to the conference.

Dr. Quinn will present a corporate update at the BMO Capital Markets 2018 Prescription for Success Healthcare Conference being held December 12 in New York, NY. Details regarding the time of the presentation and webcast will be announced prior to the conference.
Third Quarter 2018 Financial Results

As of September 30, 2018, Aeglea had available cash, cash equivalents and marketable securities of $64.7 million, which excludes approximately $17.0 million in gross proceeds from shares of common stock sold in a single transaction to new and existing shareholders in October 2018. Based on Aeglea’s current operating plan, and taking into account the $17.0 million raised in October 2018, management believes it has sufficient capital resources to fund anticipated operations to the middle of 2020.

Grant revenues were the result of a $19.8 million research grant received from the Cancer Prevention and Research Institute of Texas (CPRIT). The grant contract concluded in May 2018 with the full $19.8 million grant recognized as revenue over the life of the award. Aeglea did not recognize any grant revenues in the third quarter of 2018, compared with $1.3 million in the third quarter of 2017. As of September 30, 2018, Aeglea had a remaining grant receivable totaling $2.4 million.

Research and development expenses totaled $8.9 million for the third quarter of 2018, compared with $6.2 million for the third quarter of 2017. The increase was primarily due to expanded clinical development activity for Aeglea’s lead product candidate, pegzilarginase. Aeglea completed enrollment in the ARG1-D Phase 1/2 clinical trial, continued single-agent cohort expansions in a Phase 1 clinical trial for advanced solid tumor patients and progressed the Phase 1/2 combination trial in patients with small cell lung cancer.

General and administrative expenses totaled $3.3 million for the third quarter of 2018, compared with $3.0 million in the third quarter of 2017. This increase was primarily due to additional employee compensation costs related to the building out of Aeglea’s management team to support company growth. Net loss totaled $11.9 million and $7.9 million for the third quarter of 2018 and 2017, respectively, with non-cash stock compensation expense of $1.1 million and $0.7 million for the third quarter of 2018 and 2017, respectively.

About Pegzilarginase in Arginase 1 Deficiency

Pegzilarginase is an enhanced human arginase that enzymatically depletes the amino acid arginine. Aeglea is developing pegzilarginase for the treatment of patients with Arginase 1 Deficiency, a rare debilitating disease presenting in childhood with persistent hyperargininemia, severe progressive neurological abnormalities and early mortality. Pegzilarginase is intended for use as an enzyme replacement therapy in patients to reduce elevated blood arginine levels. Aeglea’s interim Phase 1/2 data demonstrated clinical improvements and rapid and sustained lowering of plasma arginine in Arginase 1 Deficiency patients.

About AEB4104 (Homocysteinase) in Homocystinuria

AEB4104 is a novel recombinant human enzyme that degrades the amino acid homocysteine and its oxidized form homocystine. Aeglea is developing AEB4104 for the treatment of patients with cystathionine beta synthase (CBS) deficiency, also known as Classical Homocystinuria. Homocysteine accumulation plays a key role in multiple progressive and serious disease-related complications, including skeletal abnormalities, cognitive impairment, psychiatric disease, and thromboembolism. AEB4104 is intended to lower the abnormally high blood levels of homocysteine to the normal range in patients with homocystinuria. Preclinical data demonstrated that AEB4104 improved important disease-related abnormalities and survival in a mouse model of homocystinuria.

About AEB5100 (Cystinase) in Cystinuria

AEB5100 is a novel recombinant human enzyme that degrades cystine and the parent amino acid cysteine. Aeglea is developing AEB5100 for the treatment of patients with cystinuria, a rare genetic disease characterized by frequent and recurrent kidney stone formation requiring multiple procedural interventions, and by an increased risk of chronic kidney disease. Cystinuria occurs due to genetic mutations in amino acid transporters that lead to increased amounts of cystine in the urine. This results in high cystine concentrations in the urine and formation of kidney stones. Preclinical data demonstrated that AEB5100 lowered blood levels of cystine and cysteine, decreased the amount of cystine in the urine and reduced kidney stone formation in a mouse model of cystinuria.

About Pegzilarginase in Cancer

Pegzilarginase is an enhanced human arginase that enzymatically degrades the amino acid arginine. In some cancers, tumor cells are unable to produce specific amino acids and must acquire them from the blood, making the tumor cells susceptible to starvation through depletion of those amino acids. Aeglea is developing pegzilarginase to exploit vulnerabilities in some cancers that lead to an increased dependency on extracellular arginine. Pegzilarginase targets these arginine dependent cancers by depleting blood arginine levels to below the normal range. Preclinical data demonstrated that the resulting arginine starvation inhibits proliferation, induces cell death, increases turnover of cell components and promotes anti-tumor immune responses. The Company’s Phase 1 data in advanced solid tumors demonstrated that pegzilarginase was well tolerated at doses that produced marked and sustained reductions in blood arginine levels below the normal range.

On November 8, 2018 Keryx Biopharmaceuticals, Inc. (Nasdaq: KERX), a biopharmaceutical company focused on bringing innovative medicines to people with kidney disease, reported its financial results for the third quarter ended September 30, 2018 (Press release, Keryx Biopharmaceuticals, NOV 8, 2018, View Source [SID1234531085]). The company also reviewed its commercial progress with Auryxia and provided a general business update.

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"We continued to see significant growth year-over-year in the number of prescriptions written and the revenue generated by Auryxia," said Jodie Morrison, interim chief executive officer of Keryx Biopharmaceuticals. "We are continuing to make progress on consummating our merger with Akebia and have scheduled a stockholder meeting to approve the transaction for December 11, 2018. We are excited about the potential strategic, financial and operational benefits of this transaction and are aiming, subject to stockholder approval and satisfaction of other customary conditions, to close the transaction by the end of the year."

Business Highlights

Net U.S. Auryxia product sales were $26.6 million in the third quarter of 2018, as compared to $13.6 million in the same quarter in 2017, representing growth of 96 percent.
Approximately 47,500 Auryxia prescriptions were reported in the third quarter of 2018, representing 9.4 million Auryxia tablets. This compares to approximately 25,200 prescriptions and 5.4 million Auryxia tablets in the third quarter of 2017.
Auryxia market share for the third quarter of 2018 was 6.4 percent, compared to 3.5 percent in the third quarter of 2017.
The breadth of physicians prescribing Auryxia continued to expand in the third quarter of 2018 compared to the same period in 2017, with approximately 6,500 prescribers in the 2018 quarter, nearly 2,000 more than the third quarter of 2017.
The depth of Auryxia prescribing also increased significantly in the third quarter of 2018, with a 28 percent increase in the average number of prescriptions per prescriber as compared to the third quarter of 2017.
As expected, there was a shift in channel mix for Auryxia during the third quarter of 2018, with 61 percent of prescriptions coming through IMS reporting channels and 39 percent coming through specialty pharmacies (including Fresenius Rx and Davita Rx); the shift in mix is due the closing of Davita’s specialty pharmacy business, which occurred in September 2018.
The gross-to-net adjustment for Auryxia for the third quarter of 2018 was 50 percent. This is consistent with year-to-date 2018 gross-to-net adjustment of 50 percent.
Akebia Merger Update

On June 28, 2018, Keryx announced that it had entered a definitive merger agreement with Akebia Therapeutics, Inc. that is expected to close by the end of 2018, subject to stockholder approvals and satisfaction of customary closing conditions.
If the merger is consummated, Keryx stockholders would continue to participate in the growth of Auryxia and gain access to an innovative Phase 3 product candidate with the potential to compete in a complementary multi-billion-dollar market, upon successful completion of its development program. The combined company would have substantial financial resources, an integrated platform for the development and launch of renal drugs and be led by a seasoned executive with decades of experience in the renal field.
The definitive proxy materials were filed with the Securities and Exchange Commission (SEC) on October 30, 2018 and the companies’ respective stockholder meetings are scheduled for December 11, 2018 for stockholders of record as of October 22, 2018.
The Keryx Board continues to unanimously support the merger and recommends that stockholders vote FOR the merger proposals at the upcoming stockholders’ meeting.
Given the pending merger with Akebia, Keryx will not be holding a conference call to discuss third quarter 2018 results.

Third Quarter Ended September 30, 2018 Financial Results

"I’m pleased to be reporting another solid quarter of Auryxia performance, having nearly doubled revenue over the same period a year ago, driven primarily by increases in volume," said Scott Holmes, senior vice president and chief financial officer of Keryx Biopharmaceuticals. "We believe the proposed merger with Akebia will put us in a strong position financially, with Akebia’s significant cash position today and Auryxia’s growing revenues contributing to the financial strength of the combined company in the future."

Total revenues for the quarter ended September 30, 2018 were $28.0 million, compared with $15.0 million during the same period in 2017. Total revenues for the third quarter of 2018 include $26.6 million in net U.S. Auryxia product sales, as compared to $13.6 million in the third quarter of 2017. Total revenues for the third quarter of 2018 also include $1.4 million in license revenue, as compared to $1.4 million during the same period in 2017.

Cost of goods sold for the quarter ended September 30, 2018 were $7.5 million, compared with $5.9 million during the same period in 2017.

Selling, general and administrative expenses for the quarter ended September 30, 2018 were $26.5 million, as compared to $22.7 million during the same period in 2017. Selling, general and administrative expenses for the quarter ended September 30, 2018 included $3.4 million in non-cash stock compensation expense, as compared to $2.9 million during the third quarter of 2017.

Research and development expenses for the quarter ended September 30, 2018 were $7.9 million, as compared to $9.3 million during the same period in 2017. Research and development expenses for the quarter ended September 30, 2018 included $0.4 million in non-cash stock compensation expense, as compared to $0.5 million during the same period in 2017.

Net loss for the quarter ended September 30, 2018 was $17.0 million, or $0.14 per share, as compared to a net loss of $23.5 million, or $0.20 per share, for the same period in 2017. Net loss for the quarter ended September 30, 2018 included $2.2 million in non-cash interest expense related to the amortization of a discount recognized in connection with the modification of the convertible senior notes.

Cash and cash equivalents as of September 30, 2018 totaled $41.1 million.

About Auryxia (ferric citrate) tablets
Auryxia (ferric citrate) was approved by the U.S. Food and Drug Administration (FDA) on September 5, 2014 for the control of serum phosphorus levels in patients with chronic kidney disease on dialysis and approved by the FDA on November 6, 2017 for the treatment of iron deficiency anemia in patients with chronic kidney disease not on dialysis. Auryxia tablets were designed to contain 210 mg of ferric iron, equivalent to 1 gram of ferric citrate, and offers convenient mealtime dosing. The starting dose of Auryxia for the treatment of hyperphosphatemia for patients on dialysis is six tablets per day (two per meal) and for the treatment of iron deficiency anemia in patients not on dialysis is three tablets per day (one per meal). For more information about Auryxia and the U.S. full prescribing information, please visit www.Auryxia.com.

IMPORTANT U.S. SAFETY INFORMATION FOR AURYXIA (ferric citrate)

CONTRAINDICATION

AURYXIA (ferric citrate) is contraindicated in patients with iron overload syndromes, e.g., hemochromatosis.

WARNINGS AND PRECAUTIONS

Iron Overload: Increases in serum ferritin and transferrin saturation (TSAT) were observed in clinical trials with AURYXIA in patients with chronic kidney disease (CKD) on dialysis treated for hyperphosphatemia, which may lead to excessive elevations in iron stores. Assess iron parameters prior to initiating AURYXIA and monitor while on therapy. Patients receiving concomitant intravenous (IV) iron may require a reduction in dose or discontinuation of IV iron therapy.
Risk of Overdosage in Children Due to Accidental Ingestion: Accidental ingestion and resulting overdose of iron-containing products is a leading cause of fatal poisoning in children under 6 years of age. Advise patients of the risks to children and to keep AURYXIA out of the reach of children.
ADVERSE REACTIONS

Most common adverse reactions with AURYXIA were:

Hyperphosphatemia in CKD on Dialysis: Diarrhea (21%), discolored feces (19%), nausea (11%), constipation (8%), vomiting (7%) and cough (6%)
Iron Deficiency Anemia in CKD Not on Dialysis: Discolored feces (22%), diarrhea (21%), constipation (18%), nausea (10%), abdominal pain (5%) and hyperkalemia (5%)
SPECIFIC POPULATIONS

Pregnancy and Lactation: There are no available data on AURYXIA use in pregnant women to inform a drug-associated risk of major birth defects and miscarriage. However, an overdose of iron in pregnant women may carry a risk for spontaneous abortion, gestational diabetes and fetal malformation. Data from rat studies have shown the transfer of iron into milk, hence, there is a possibility of infant exposure when AURYXIA is administered to a nursing woman.

On November 8, 2018 Alpine Immune Sciences, Inc. (NASDAQ:ALPN), a leading immunotherapy company focused on developing innovative treatments for autoimmune/inflammatory diseases and cancer, reported financial results for the third quarter ended September 30, 2018 (Press release, Alpine Immune Sciences, NOV 8, 2018, View Source [SID1234531101]).

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"We have had a highly productive quarter as we continue to rapidly advance our two lead programs, ALPN-101 for the treatment of autoimmune/inflammatory disease and ALPN-202 for oncology, toward our first human clinical trials," said Mitchell H. Gold, M.D., Executive Chairman and Chief Executive Officer of Alpine. "We are excited by the strong cadence of preclinical data to be presented at upcoming scientific meetings in the fourth quarter, highlighting the potential of our molecules as novel, next generation immunotherapies."

Corporate Development Highlights

ALPN-101 preclinical data presented at ACR/ARHP and ANA annual meetings: In October, we presented positive results from our lead autoimmune/inflammatory program, ALPN-101, a dual ICOS/CD28 antagonist, in experimental models of inflammatory arthritis and multiple sclerosis. The data were presented in poster sessions at the American College of Rheumatology (ACR)/Association of Rheumatology Health Professionals (ARHP) Annual Meeting in Chicago as well as the 143rd Annual Meeting of the American Neurological Association (ANA) in Atlanta.
Advancing both lead programs towards the clinic: ALPN-101 remains on track to advance to clinical trials and we anticipate completing all tasks necessary to commence clinical trials in the first quarter of 2019. ALPN-202 pre-clinical development activities continue as planned with the goal of human clinical trials starting in 2019.
Two upcoming poster presentations at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 33rd Annual Meeting: We will have two poster presentations at the upcoming SITC (Free SITC Whitepaper) annual meeting on Friday, November 9, 2018 and Saturday, November 10, 2018 in Washington, D.C.

Abstract Title: ALPN-202, a combined PD-L1/CLTA-4 antagonist and PD-L1-dependent CD28 T cell costimulator, elicits potent intratumoral T cell immunity superior to and differentiated from PD-L1 inhibitor monotherapy

Abstract Number: 10654

Abstract Title: Tumor-Localizing NKp30/ICOSL vIgD Fusion Proteins Direct Effective Dual CD28/ICOS T cell Costimulation to B7-H6+ Tumor Cells In Vitro and Tumors In Vivo

Abstract Number: 10813

Two upcoming poster presentations at 60th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition: We will have two poster presentations at the upcoming ASH (Free ASH Whitepaper) Annual Meeting and Exposition on Saturday, December 1, 2018 in San Diego, CA.

Abstract Title: Therapeutic Candidate ALPN-101, a Dual ICOS/CD28 Antagonist, Potently Suppresses Human/NSG Mouse Xenograft Graft Vs. Host Disease (GvHD) in a Dose Ranging Study and Reduces Disease Activity in a Mouse Model of Hemophagocytic Lymphohistiocytosis (HLH)

Session Name: 701. Experimental Transplantation: Basic Biology, Pre-Clinical Models: Poster 1

Publication Number: 2037

Abstract Title: "Switch" Transmembrane Immunomodulatory Proteins (TIPs) Consisting of High-Affinity PD-1 Extracellular Domains (PD-1 vIgDs) and Costimulatory Intracellular Domains Potently Enhance the Activity of TCR-Engineered T Cells

Session Name: 703. Adoptive Immunotherapy: Poster 1

Publication Number: 2052

Third Quarter 2018 Financial Results

We ended the third quarter of 2018 with $62.0 million in cash, cash equivalents and short-term investments, compared to $81.2 million as of December 31, 2017.
Net loss for the third quarter of 2018 was $12.1 million, compared to a net income of $2.1 million for the same period in 2017. The increase in net loss is primarily attributable to our preparations to initiate human clinical trials for ALPN-101 and ALPN-202 in 2019.
Research and development expenses for the third quarter of 2018 were $10.5 million, compared to $2.8 million for the same period in 2017. The increase was primarily attributable to increases in contract manufacturing and process development for ALPN-101 and ALPN-202 and direct research activities, in addition to personnel-related expenses, overhead and facilities.
General and administrative expenses for the third quarter of 2018 were $1.9 million, relatively flat, compared to $1.9 million for the same period of 2017. There was an insignificant net decrease, primarily attributable to a decrease in professional and legal service fees related to merger costs incurred during the 2017 period, partially offset by increases in personnel-related expenses and costs incurred to support the growth and expansion of the business, overhead and facilities.
Cash Guidance

We expect to have sufficient cash to fund operations into 2020, including the clinical advancement of ALPN-101 for the treatment of autoimmune/inflammatory diseases and ALPN-202 for the treatment of cancer.

On November 8, 2018 ChemoCentryx, Inc., (Nasdaq:CCXI), reported financial results for the third quarter ended September 30, 2018 and provided an overview of the Company’s recent corporate highlights (Press release, ChemoCentryx, NOV 8, 2018, View Source [SID1234531155]).

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"We embark now upon exciting times. Looking forward to the coming year, we have set the stage for a sequence of key top-line data readouts from multiple clinical programs; readouts which could change the treatment landscape in woefully underserved orphan diseases," said Thomas J. Schall, Ph. D., President and Chief Executive Officer of ChemoCentryx. "We completed enrollment of our landmark ADVOCATE Phase III pivotal trial in ANCA-associated vasculitis in the third quarter, and plan to report top-line data in the fourth quarter of this coming year. We have clinical trials of avacopan in C3G and another unique asset, CCX140 in FSGS underway, and we stand on the brink of launching our definitive clinical trial of avacopan in Hidradenitis Suppurativa, our first foray into orphan dermatological disease. Our momentum grows ever stronger, enabled by a robust balance sheet that allows us to conduct multiple registration-supporting trials simultaneously."

Recent Highlights

Completed enrollment of the Company’s pivotal Phase III ADVOCATE trial of avacopan for the treatment of ANCA-associated vasculitis; top line data expected in the fourth quarter of 2019.

Submitted an Investigational New Drug (IND) application to the U.S. Food and Drug Administration (FDA) for the Phase IIb clinical development of avacopan in HS, a chronic and inflammatory skin disease. The Company expects to launch a comprehensive, randomized, double-blind, placebo-controlled clinical trial with avacopan in HS by the end of 2018. The study is expected to enroll approximately 390 patients with moderate to severe HS in the United States. The primary endpoint will be proportion of patients with a clinical response as assessed by the Hidradenitis Suppurativa Clinical Response (HiSCR) score compared to placebo after 12 weeks of treatment.

Advanced the Company’s clinical trial of avacopan in patients with C3 Glomerulopathy (C3G); enrollment now at 61% of the initial cohort of 44 patients; 35% of the expanded study targeting a combined 88 patients. C3G is a rare disorder that often affects the young, requiring dialysis and often kidney transplant with relapsing disease common. There is no approved effective treatment.

Received orphan drug designation from the FDA for CCR2 inhibitor CCX140 for the treatment of FSGS, a rare kidney disease. Clinical trials are underway in two FSGS sub-populations: nephrotic syndrome primary FSGS and sub-nephrotic primary FSGS.

Began active enrollment of patients with FSGS at multiple sites in the U.S. and Europe.

Presented at the American Society of Nephrology and American College of Rheumatology annual meetings on the avacopan ADVOCATE Phase III trial design and the potential new role of CCR2 in the treatment of FSGS with the first demonstration of CCR2 presence on renal progenitor cells destined to be podocytes.

Maintained a very strong balance sheet with reported cash and investments of approximately $186.0 million at September 30, 2018.

Third Quarter 2018 Financial Results

Cash and investments totaled approximately $186.0 million at September 30, 2018. ChemoCentryx was cash flow positive for the nine months ended September 30, 2018 (driven by cash receipts from milestone and upfront payments and credit facility advances), and reported a net increase of $50.8 million in cash and investments for period then ended. Excluding cash receipts from milestone and upfront payments and credit facility advances, the Company utilized cash and investments of approximately $40.7 million for the first nine months of the year and expects to end 2018 with approximately $170 million.

Revenue was $9.0 million for the third quarter of 2018, consistent with the same period in 2017. Revenue recognized represents amortization of the upfront license fee commitments, milestone payments and collaboration funding from Vifor pursuant to the Avacopan Agreement, Avacopan Amendment and CCX140 Agreement.

Research and development expenses were $15.1 million for the third quarter of 2018, compared to $12.3 million for the same period in 2017. The increase from 2017 to 2018 was primarily due to the advancement of the avacopan ADVOCATE Phase III pivotal trial which completed enrollment in July 2018.

General and administrative expenses were $5.4 million for the third quarter of 2018, compared to $3.6 million for the same period in 2017. The increase from 2017 to 2018 was primarily due to higher employee-related expenses, including those associated with our commercialization planning efforts, and increased professional fees.

Net loss for the third quarter of 2018 was $10.9 million, compared to $6.6 million for the same period in 2017.

Total shares outstanding at September 30, 2018 were approximately 50.4 million shares.

Conference Call and Webcast

The Company will host a conference call and webcast today, November 8, 2018 at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time. To participate by telephone, please dial 877-303-8028 (Domestic) or 760-536-5167 (International). The conference ID number is 4672117. A live and archived audio webcast can be accessed through the Investors section of the Company’s website at www.ChemoCentryx.com. The archived webcast will remain available on the Company’s website for fourteen (14) days following the conference call.