On August 6, 2018 Xencor, Inc. (NASDAQ:XNCR), a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of autoimmune disease, asthma and allergic diseases, and cancer, reported financial results for the second quarter ended June 30, 2018 and provided a review of recent business and clinical highlights (Press release, Xencor, AUG 6, 2018, View Source [SID1234528631]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Our recent activities and upcoming milestones reflect our commitment to building a broad pipeline of antibodies for the treatment of autoimmune disorders and cancer," said Bassil Dahiyat, Ph.D., president and chief executive officer at Xencor. "In 2018, we are focused on advancing multiple oncology programs, all built from our XmAb bispecific technology, to potentially produce a new generation of targeted immunotherapies. In addition to initiating DUET-2, the first-in-human trial of our lead TME activator, we remain on track to announce Phase 1 data from our lead bispecific oncology candidate, XmAb14045, and to file IND applications for our next two TME activators by year-end. In parallel, we continue to advance our autoimmune disease candidate, XmAb5871, toward Phase 3 development."

Recent Business Highlights and Upcoming Clinical Plans

XmAb5871: XmAb5871 is a first-in-class monoclonal antibody that targets CD19 with its variable domain and uses Xencor’s XmAb immune inhibitor Fc domain to target FcyRIIb, a receptor that inhibits B-cell function.

·Initiation of Phase 3 trial in IgG4-RD expected in 2H18.

·Topline data from Phase 2 trial in SLE expected in 4Q18.

Bispecific Oncology Pipeline: Xencor’s initial bispecific antibody programs are tumor-targeted antibodies that contain both a tumor antigen binding domain and a cytotoxic T-cell binding domain (CD3). These bispecific antibodies activate T cells for highly potent and targeted killing of malignant cells. Their XmAb Fc domains confer long circulating half-lives, stability and ease of manufacture.

· Initial data from Phase 1 study of XmAb14045 for the treatment of AML and other CD123-expressing hematologic malignancies expected in 2018, pending alignment on timing with Novartis.

·Initial data from Phase 1 study of XmAb13676 for the treatment of B-cell malignancies expected in 2019, pending alignment on timing with Novartis.

·Initial data from Phase 1 study of XmAb18087 for the treatment of neuroendocrine tumors and gastrointestinal stromal tumors expected in 2019.

Xencor’s bispecific pipeline also includes a suite of TME activators that engage multiple targets, such as T-cell checkpoints or agonists.

In July 2018, Xencor dosed the first patient in DUET-2, a Phase 1 study of XmAb20717, a PD-1 x CTLA-4 dual checkpoint inhibitor. The trial is a multiple ascending dose study to determine the safety and tolerability, pharmacokinetics, pharmacodynamics, immunogenicity and preliminary anti-tumor activity of intravenous administration of XmAb20717 in patients with advanced solid tumors.

· IND filing for XmAb23104, a PD-1 x ICOS bispecific antibody for the treatment of multiple oncology indications, expected in 2018 and initiation of Phase 1 trial expected in 2019.

· IND filing for XmAb22841, a CTLA-4 x LAG-3 dual checkpoint inhibitor for the treatment of multiple oncology indications, expected in 2018 and initiation of Phase 1 trial expected in 2019.

·IND filing for XmAb24306, an IL15/IL15Rα-Fc bispecific antibody for the treatment of multiple oncology indications, expected in 2019.

XmAb7195: XmAb7195 is a first-in-class monoclonal antibody that targets IgE with its variable domain and uses Xencor’s XmAb immune inhibitor Fc domain to target FcyRIIb, resulting in three distinct mechanisms of action for reducing IgE. In a Phase 1b study, subcutaneously-administered XmAb7195 induced potent IgE reduction with improved tolerability. Xencor is currently seeking a development partner for XmAb7195.

Partnered XmAb Programs: Eight pharmaceutical companies and the National Institutes of Health are advancing novel drug candidates either discovered at Xencor or that rely on Xencor’s proprietary XmAb technology. Four such programs are currently undergoing clinical testing, including MOR208, which is in Phase 3 development as a combination agent for the treatment of relapsed or refractory diffuse large B-cell lymphoma. In addition, regulatory submissions have been filed in the U.S. and EU for Alexion’s ravulizumab (formerly ALXN1210) for the treatment of patients with paroxysmal nocturnal hemoglobinuria.

Corporate: In July 2018, Xencor announced the resignation of Edgardo Baracchini, Ph.D., Chief Business Officer, effective August 15, 2018. Xencor has initiated a search to appoint a new Chief Business Officer.

Second Quarter Ended June 30, 2018 Financial Results:

Effective January 1, 2018, Xencor adopted the new revenue recognition standard, Accounting Standard Codification 606 (ASC606). In addition to adopting the standard for 2018, revenue reported for the prior period ending June 30, 2017 has been revised to reflect the new standard.

Cash, cash equivalents and marketable securities totaled $555.4 million as of June 30, 2018, compared to $363.3 million at December 31, 2017. The increase reflects net proceeds of $245.5 million from Xencor’s sale of additional stock in March 2018, offset by cash used to fund operating activities in the six months ended June 30, 2018.

No revenues were reported for the three and six-month periods ended June 30, 2018, compared to $12.5 million and $16.0 million of income reported for the same periods in 2017. Revenues in the three and six-month periods ended June 30, 2017 were primary milestones received from the Company’s MorphoSys and CSL collaborations. Revenue reported for both periods was affected by the adoption of the new revenue recognition standard on January 1, 2018. Under historic revenue recognition methods, the Company would have recognized $0.6 million and $13.3 million of revenue for the three-month periods, and $7.5 million and $17.7 million of revenue for the six-month periods, ended June 30, 2018 and June 30, 2017, respectively.

Research and development expenditures for the second quarter ended June 30, 2018 were $23.3 million, compared to $16.9 million for the same period in 2017. Total research and development expenditures for the six-month period ended June 30, 2018 were $49.4 million, compared to $32.0 million for the same period in 2017. The increased research and development spending for the three and six months ended June 30, 2018 reflects additional spending on Xencor’s pipeline of bispecific oncology candidates.

General and administrative expenses for the second quarter ended June 30, 2018 were $5.0 million, compared to $4.1 million in the same period in 2017. Total general and administrative expenditures for the six-month period ended June 30, 2018 were $9.5 million, compared to $8.9 million for the same period in 2017. The increased spending on general and administration for the three and six months ended June 30, 2018 reflects additional facility costs resulting from the expansion of space under lease at Xencor’s Monrovia and San Diego locations and increased stock- based compensation charges.

Non-cash, share based compensation expense for the second quarter ended June 30, 2018 was $9.4 million, compared to $6.6 million for same period in 2017.

Net loss for the second quarter ended June 30, 2018 was $25.9 million, or $(0.46) on a fully diluted per share basis, compared to a net loss of $7.7 million, or $(0.17) on a fully diluted per share basis, for the same period in 2017. For the six months ended June 30, 2018, net loss was $55.4 million, or $(1.07) on a fully diluted per share basis, compared to a net loss of $23.2 million, or $(0.50) on a fully diluted per share basis, for the same period in 2017. The increased loss for the three and six months ended June 30, 2018 over the same periods in 2017 is primarily due to lower revenue and increased research and development spending in the 2018 periods.

The total shares outstanding were 55,821,310 as of June 30, 2018, compared to 46,854,762 as of June 30, 2017. The additional shares outstanding at June 30, 2018 reflect the 8,395,000 shares sold in Xencor’s March financing.

Financial Guidance:

Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations into 2023. Xencor expects to end 2018 with approximately $500 million in cash, cash equivalents and marketable securities.

Conference Call and Webcast:

Xencor will host a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to discuss these second quarter 2018 financial results and provide a corporate update.

The live call may be accessed by dialing (877) 359-9508 for domestic callers or (224) 357-2393 for international callers and referencing conference ID number 6399929. A live webcast of the conference call will be available online from the Investors section of the Company’s website at www.xencor.com. The webcast will be archived on the company’s website for 90 days.

On August 6, 2018 Neuralstem, Inc. (Nasdaq:CUR), a biopharmaceutical company focused on the development of nervous system therapies based on its neural stem cell and small molecule compound technologies, reported that the Board of Directors has appointed Jim Scully as interim chief executive officer (Press release, Neuralstem, AUG 6, 2018, View Source [SID1234528446]). Mr. Scully will assume the role effective immediately and succeeds Mr. Rich Daly who served as president and chief executive officer of the Company since February 2016.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Jim’s contribution in 2018 heading up business development and as strategic advisor for Neuralstem has been extremely valuable, and we are confident that his appointment will ensure continued momentum over the near-term as our dedicated search efforts continue," said Cristina Csimma, Chair of the Nominating Committee of Neuralstem. "Jim is an experienced pharmaceutical executive with a deep understanding of commercial, clinical development and manufacturing operations and has worked with our team to advance our Company’s efforts in China and rest-of-world."

"I am very pleased to increase my responsibilities with Neuralstem at this important time for the company, and I look forward to working closely with the management team and the Board to unlock the full potential of the Company’s promising pipeline candidates, NSI-566 and NSI-189," said Mr. Scully. "We continue to believe that these candidates represent innovative approaches to several unmet medical needs, and we look forward to providing further updates on our progress in executing our strategic plan."

Mr. Scully’s experience spans multiple key strategic roles in the healthcare industry. During his decade with Takeda Pharmaceuticals, a leading global pharmaceutical company, Mr. Scully assumed roles of increasing responsibility across multiple functional areas, leading efforts in financial planning, global business development, business analytics and corporate project management. Mr. Scully has also held key roles at Astellas Pharmaceuticals, Abbott Labs, GE Healthcare and Walgreens. These roles included leadership of clinical development planning, performance analytics and partnering initiatives.

The Board of Directors also appointed William Oldaker, as Chairman. Mr. Oldaker has served as a director of Neuralstem since April 2007. He is a founder and partner in the Washington, D.C. law firm, Oldaker & Willison PLLP, and is a member of the Colorado, D.C. and Iowa Bar Associations, the Bar Association for the Court of Appeals, D.C., and the Bar of the United States Supreme Court.

"I am excited to expand my role and continue to work with the Board and the management team to execute on its exciting strategy to become a leader in CNS and neural stem cell technology," said William Oldaker.

On August 6, 2018 Exicure, Inc. (OTCQB:XCUR), the pioneer in gene regulatory and immunotherapeutic drugs utilizing three-dimensional, spherical nucleic acid (SNA) constructs, reported financial results for the second quarter ended June 30, 2018, and provided an update on corporate progress (Press release, Exicure, AUG 6, 2018, View Source [SID1234528463]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"With the addition of a new COO and the topical dosing of XCUR17 in patients with mild to moderate psoriasis, Exicure continues to make progress on our mission," said Dr. David Giljohann, Chief Executive Officer of Exicure. "In June of 2018, we released data at the Cure SMA Annual Conference demonstrating the use of Exicure’s SNA technology in Spinal Muscular Atrophy mouse models. Based on the results of this preclinical study, we intend to further pursue our early stage research activities in neurological applications," added Dr. Giljohann.

Corporate Progress

Began trading on OTCQB market under the ticker symbol XCUR.
Announced the addition of Matthias Schroff as Chief Operating Officer. Dr. Schroff previously served as CEO of Vaximm and Mologen.
Commenced topical dosing in our Phase 1 clinical trial for XCUR17 in patients with mild to moderate psoriasis.
Presented pre-clinical data demonstrating the performance of Exicure’s SNA compound designed for use in spinal muscular atrophy at the Cure SMA Annual Conference with collaborators at The Ohio State University Wexner Medical Center.
Completed third cohort of volunteers in our AST-008 trial and announced the planned enrollment of a Phase 1b/2 trial expected to commence in late 2018 in combination with checkpoint inhibitors.
Pre-Clinical Updates

In June, Exicure and The Ohio State University Wexner Medical Center presented a poster at the Cure SMA Annual Conference titled: "Nusinersen in spherical nucleic acid (SNA) format improves efficacy both in vitro in SMA patient fibroblasts and in Δ7 SMA mice and reduces toxicity in mice." It was observed in the preclinical study that nusinersen in SNA format prolonged survival by four-fold (maximal survival of 115 days compared to 28 days for nusinersen-treated mice) as well as doubled the levels of healthy full-length SMN2 mRNA and protein in SMA patient fibroblasts when compared to nusinersen.

Pipeline Updates

AST-008: AST-008 is an SNA consisting of toll-like receptor 9 (TLR9) agonists designed for immuno-oncology applications. The Phase 1 clinical trial of AST-008 evaluates the safety, tolerability, pharmacokinetics, and pharmacodynamics of AST-008 by subcutaneous administration in healthy volunteers. This trial is expected to be completed in the third quarter of 2018. We currently anticipate preparing and commencing a Phase 1b/2 clinical trial for AST-008 in combination with checkpoint inhibitors in late 2018.

XCUR17: XCUR17 is an antisense SNA that targets the mRNA encoding IL-17RA, a protein that is considered essential in the initiation and maintenance of psoriasis. Our Phase 1 trial of XCUR17 is a microplaque study in patients with mild to moderate psoriasis. We have dosed 19 of the prospective 25 patients. Full enrollment and trial completion is expected during the fourth quarter.

AST-005: AST-005 is an SNA containing TNF antisense oligonucleotides and is intended to be applied in a gel to psoriatic lesions. AST-005 is the subject of our collaboration with Purdue Pharma L.P. Purdue Pharma notified Exicure that it has declined to exercise its option to develop AST-005 at this time, but that it also intends to retain rights relating to the TNF target. Purdue reserves its right to continue joint development, with Exicure, of new anti-TNF drug candidates and to retain its exclusivity and other rights to AST-005.

Second Quarter 2018 Financial Results and Financial Guidance

Cash Position: As of June 30, 2018, Exicure had cash and cash equivalents of $16.4 million compared to $25.8 million as of December 31, 2017.

Research and Development (R&D) Expenses: Research and development expenses were $3.8 million for the three months ended June 30, 2018, compared to $3.3 million for the three months ended June 30, 2017. The increase in research and development expense of $0.5 million was primarily due to higher employee related expenses resulting from the hire of our Chief Operating Officer and higher platform discovery expenses attributable to costs necessary to maintain our intellectual property portfolio. Clinical development expenses were nearly flat quarter over quarter.

General and Administrative (G&A) Expenses: General and administrative expenses were $2.0 million for the quarter ended June 30, 2018, compared to $2.1 million for the quarter ended June 30, 2018. The decrease in general and administrative expenses of $0.1 million reflects the net change attributable to a decrease in legal and accounting expenses due to the absence of certain financing expenses incurred during 2017 offset by an increase in costs attributable to being a public company.

Net Loss: Net loss was $6.8 million for the quarter ended June 30, 2018, compared to net loss of $3.0 million for the quarter ended June 30, 2017. The $3.8 million increase in net loss is due principally to a decrease in revenue of $2.7 million that mostly reflects the absence of revenue recognized in the prior period related to the amortization of the upfront payment, and certain reimbursable research and development activities, under the Purdue Collaboration. In addition, we had an increase in Other Loss of $0.8 million principally due to the fair value adjustment of our common stock warrant liability.

Cash Runway Guidance: Exicure believes that, based on its current operating plans and estimates of expenses, as of the date of this press release, its existing cash and cash equivalents as of June 30, 2018, will be sufficient to meet its anticipated cash requirements through March 31, 2019.

On August 6, 2018 Applied DNA Sciences, Inc. (NASDAQ: APDN), reported it plans to release financial results for its fiscal 2018 third quarter ended June 30, 2018 after market close on Monday, August 13, 2018 (Press release, Applied DNA Sciences, AUG 6, 2018, View Source [SID1234529278]). In conjunction with the release, the Company has scheduled a conference call at 4:30 p.m. Eastern Time that will also be broadcast live over the Internet.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

What: Applied DNA’s Fiscal 2018 Third Quarter Financial Results Conference Call

When: Monday, August 13, 2018, at 4:30 p.m. Eastern Time

Where: Via phone by dialing +1 844-887-9402 or +1 412-317-6798 and ask for the Applied DNA call; via webcast.

A telephonic replay of the conference call will be available for one day and may be accessed by calling +1 877-344-7529 or +1 412-317-0088 with the passcode 10122259. The webcast will be archived in the Investors section of the company’s website.

These projects are following the typical preclinical biotherapeutic path of proving efficacy at small scale prior to securing larger production appropriate for clinical trials and deployment.

Most DNA-based therapeutic products, both approved and in development, rely on legacy science of plasmid and viral vector production methods that are time-consuming, carry the risks of bacterial toxins and triggering complications or unintended consequences. Several recent clinical trials have been halted by FDA due to unintended consequences of plasmid-derived DNA. As an alternative, Polymerase Chain Reaction (PCR), is a well-proven technique of DNA amplification first introduced in the 1980’s as an investigative tool in research and diagnostic laboratories. Applied DNA’s patented large-scale PCR production capability is a breakthrough for therapeutic applications as it has already demonstrated that PCR product can be made available very cleanly and at the scale required for population-scale diagnostics.

The most significant Applied DNA milestones recently achieved in this field come from work with multiple companies worldwide to qualify PCR-based linear DNA expression constructs for therapeutic applications. From these collaborative efforts, we have shown that linear DNA is effective in expression of genes in vivo.

These forms are in direct contradistinction to Applied DNA’s DNA tags for supply chains, which are too small to express proteins, have no means of entering cells or tissues, and contain none of the control elements necessary to do so.

This accomplishment is among the first times a linear DNA expression amplicon produced by PCR has demonstrated expression in vivo.

In all cases, companies in our pipeline have been driven to Applied DNA’s market position as an alternative to the current science of plasmid-produced DNA to gain PCR-based linear DNA vectors inherently superior to plasmid and viral vectors in several important aspects:

Bacteria-free: Absence of bacterial plasmid contaminants or sequences of prokaryotic origin such as genes for antibiotic resistance,
Speed: Shorter lead times (days) from vector design to large scale production,
Custom design turnaround time: custom modifications in sequence during the PCR process to enable experimentation comparisons on therapeutic performance, and,
On-site Production: patented platform for large scale production supports the feasibility of DNA production closer and tailored to the point of care to support the concept of personalized medicine.
"The milestones achieved to-date are a result of a multi-year business plan beginning with the acquisition of Vandalia Research assets three years ago. Now attracting new business at an accelerating rate and showing results that go toe-to-toe with legacy plasmid production is a major milestone for the viability of PCR-produced DNA for use in therapeutics," said Dr. James Hayward, president and CEO of Applied DNA. "We will continue to work with companies developing therapeutics to expand the processes necessary to grow this business alongside our mainstay tagging business."

On August 6, 2018 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported financial results for the three and six months ended June 30, 2018, and provided an operating forecast and program updates (Press release, Ligand, AUG 6, 2018, View Source [SID1234528447]). Ligand management will host a conference call today beginning at 4:30 p.m. Eastern time to discuss this announcement and answer questions.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The second quarter was punctuated by major positive corporate events that are driving our financial success and highlighting the potential of our business model. Our OmniAb business is flourishing. We continue to enter new OmniAb drug research contracts, there are now a record number of OmniAb programs in clinical trials and we entered a $47 million amendment with WuXi to grant it additional flexibility to pursue more antibody-based deals while preserving our royalty economics. Our two lead partnered financial assets, Promacta and Kyprolis, hit all-time revenue highs in the second quarter, putting both drugs squarely on course to exceed $1 billion in revenue in 2018. As well, we saw a flurry of other positive news from partners and an expanding calendar of expected clinical, regulatory or business events including from partners such as Sage, Viking, Seelos, Immunovant and others," said John Higgins, Chief Executive Officer of Ligand. "The Ligand business model is delivering significant and positive results that match our expectations for the company. We are very pleased with Ligand’s performance."

Second Quarter 2018 Financial Results

Total revenues for the second quarter of 2018 were $90.0 million, compared with $28.0 million for the same period in 2017. Royalties were $31.4 million, compared with $14.2 million for the second quarter of 2017 and $21.9 million for the third quarter of 2017. Under the new accounting standard ASC 606, adopted as of the start of 2018, second quarter 2018 royalties should be compared with third quarter 2017 royalties due to the timing of revenue recognition. Second quarter 2018 royalties primarily consisted of royalties from Promacta, Kyprolis and EVOMELA. Material sales were $7.6 million, compared with $5.6 million for the same period in 2017 due to the timing of Captisol purchases for use in clinical trials and commercial products. License fees, milestones and other revenues were $51.0 million, compared with $8.2 million for the same period in 2017, primarily due to the receipt of a $47 million payment from WuXi Biologics to amend its OmniAb platform license agreement.

Cost of goods sold was $1.1 million for the second quarter of 2018, compared with $0.9 million for the same period in 2017. Amortization of intangibles was $3.3 million, compared with $2.7 million for the same period in 2017. Research and development expense was $6.1 million, compared with $4.8 million for the same period of 2017. General and administrative expense was $9.3 million, compared with $6.5 million for the same period in 2017.

GAAP net income for the second quarter of 2018 was $73.2 million, or $2.99 per diluted share, compared with $6.1 million, or $0.26 per diluted share, for the same period in 2017. Adjusted net income for the second quarter of 2018 was $60.6 million, or $2.59 per diluted share, compared with $14.9 million, or $0.67 per diluted share, for the same period in 2017.

As of June 30, 2018, Ligand had cash, cash equivalents and short-term investments of $956.9 million. Cash generated from operations during the 2018 second quarter was $73.6 million.

Year-to-Date Financial Results

Total revenues for the six months ended June 30, 2018 were $146.2 million, compared with $57.3 million for the same period in 2017. Royalties were $52.2 million, compared with $38.4 million for the six months ended June 30, 2017 and $36.1 million for the six months ended September 30, 2017. Under ASC 606, royalties for the six months ended June 30, 2018 should be compared with royalties for the six months ended September 30, 2017 due to the timing of revenue recognition. Royalties for the six months ended June 30, 2018 primarily consisted of royalties from Promacta, Kyprolis and EVOMELA. Material sales were $12.0 million, compared with $6.7 million for the same period in 2017 due to the timing of Captisol purchases for use in clinical trials and commercial products. License fees, milestones and other revenues were $82.0 million, compared with $12.2 million for the same period in 2017, primarily due to the receipt of a $47 million payment from WuXi Biologics to amend its OmniAb platform license agreement and due to the receipt of a $20 million upfront payment upon the licensing of Ligand’s GRA program.

Cost of goods sold was $1.9 million for the six months ended June 30, 2018, compared with $1.2 million for the same period in 2017 due to the timing and mix of Captisol sales. Amortization of intangibles was $6.6 million, compared with $5.4 million for the same period in 2017. Research and development expense was $13.5 million in both periods. General and administrative expense was $16.9 million, compared with $13.9 million for the same period in 2017.

GAAP net income for the six months ended June 30, 2018 was $118.4 million, or $4.81 per diluted share, compared with $11.1 million, or $0.48 per diluted share, for the same period in 2017. The six months ended June 30, 2018 income was impacted by a one-time, non-cash gain due to a change in the accounting for Ligand’s investment in Viking Therapeutics, which resulted in marking the investment to market. Adjusted net income for the six months ended June 30, 2018 was $96.2 million, or $4.14 per diluted share, compared with $27.6 million, or $1.25 per diluted share, for the same period in 2017.

2018 Financial Guidance

Ligand is updating its previous guidance for 2018 revenue to be approximately $232 million, including royalties of approximately $120 million, material sales of approximately $23 million and license fees and milestones of approximately $89 million, with the potential for up to an additional $8 million in license fees and milestones. Ligand notes that with revenue of $232 million, adjusted earnings per diluted share would be approximately $6.30.

This compares with previous guidance for 2018 revenue to be approximately $226 million, including royalties of approximately $116 million, material sales of approximately $23 million and license fees and milestones of approximately $87 million, with the potential for up to an additional $10 million in license fees and milestones and adjusted earnings per diluted share of approximately $6.15.

Second Quarter 2018 and Recent Business Highlights

Promacta/Revolade

Novartis reported second quarter 2018 net sales of Promacta/Revolade (eltrombopag) of $292 million, an $82 million or 39% increase over the same period in 2017.
Novartis announced that the FDA has accepted the company’s supplemental New Drug Application (sNDA) and granted Priority Review designation to Promacta in combination with standard immunosuppressive therapy for first-line treatment of severe aplastic anemia.
Novartis published the results of a survey uncovering the real-world impact of immune thrombocytopenia on patient quality of life.
Kyprolis (carfilzomib), an Amgen Product Utilizing Captisol

On July 26, 2018, Amgen reported second quarter net sales of Kyprolis of $263 million, a $52 million or 25% increase over the same period in 2017. On August 1, 2018, Ono Pharmaceutical Company reported Kyprolis sales in Japan of approximately $11.6 million for the most recent quarter.
On June 11, 2018, Amgen announced that the FDA approved the sNDA to add the positive overall survival (OS) data from the Phase 3 ASPIRE trial to the U.S. Prescribing Information for Kyprolis.
On April 30, 2018, Amgen announced that the CHMP adopted a positive opinion recommending a label variation for Kyprolis in the European Union to include the final OS data from the Phase 3 ASPIRE trial.
On June 1, 2018, Amgen announced results from the Phase 3 A.R.R.O.W. trial of a once-weekly Kyprolis dosing regimen in patients with relapsed and refractory multiple myeloma. Patients in the trial treated with once-weekly Kyprolis achieved a statistically significant 3.6 month improvement in progression-free survival (PFS) compared with the twice-weekly regimen (median PFS 11.2 months for once-weekly Kyprolis versus 7.6 months for twice-weekly Kyprolis; HR=0.69; 95% CI: 0.54-0.88; one-sided p=0.0014). The overall response rate in patients treated with once-weekly Kyprolis was 62.9% versus 40.8% for those treated with the twice-weekly regimen (p<0.0001).
Additional Pipeline and Partner Developments

Sage Therapeutics announced that the FDA accepted the filing of a New Drug Application (NDA) for IV-brexanolone for the treatment of postpartum depression, and that the NDA was granted Priority Review status and a Prescription Drug User Fee Act (PDUFA) target date of December 19, 2018.
Retrophin announced first patient enrollment in the Phase 3 DUPLEX Study evaluating the long-term nephroprotective potential of sparsentan for the treatment of focal segmental glomerulosclerosis. Topline data from the 36-week interim efficacy endpoint are expected in the second half of 2020.
Retrophin announced that the United States Patent and Trademark Office issued a new patent providing coverage for the use of sparsentan in the treatment of IgAN and broadening the existing coverage to include all doses of sparsentan between 200 and 800 mg/day. The patent has a stated expiration date of March 30, 2030.
CASI Pharmaceuticals announced that preparations for the EVOMELA commercial launch in China were underway, and that CASI expects formal regulatory application feedback from China’s State Drug Administration.
Viking Therapeutics announced that enrollment had been completed in the company’s Phase 2 trial of VK2809 in patients with primary hypercholesterolemia and non-alcoholic fatty liver disease, and that trial results are expected in the second half of 2018.
Viking Therapeutics also announced that the results from the company’s Phase 2 study of VK5211 in patients recovering from hip fracture have been selected for presentation at the American Society for Bone and Mineral Research 2018 annual meeting.
Melinta Therapeutics announced oral presentations and posters for Baxdela at the American Society for Microbiology’s annual ASM Microbe 2018 meeting.
Opthea Limited announced that its Phase 1b trial of OPT-302 in Diabetic Macular Edema (DME) met its primary objective and that the company had dosed the first patient in a Phase 2a randomized, controlled clinical trial evaluating OPT-302 in patients with persistent center-involved DME.
Opthea Limited announced it reached the mid-way point of patient recruitment for its Phase 2b clinical trial of OPT-302 in wet age-related macular degeneration and plans to report primary data from the study in early 2020.
Merrimack Pharmaceuticals announced a poster presentation related to seribantumab at the 2018 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.
Seelos Therapeutics announced a merger agreement with Apricus Biosciences, to form a combined publicly-traded company focused on developing a portfolio that includes Ligand-partnered CNS programs.
Aldeyra Therapeutics announced enrollment of the first patient in a Phase 3 clinical trial of topical ocular reproxalap for the treatment of allergic conjunctivitis.
Aldeyra Therapeutics also announced that the last patient has been dosed in a Phase 2b clinical trial of topical ocular reproxalap in dry eye disease.
Syros Pharmaceuticals announced new preclinical data showing that Captisol-enabled SY-1365, a first-in-class selective cyclin-dependent kinase 7 inhibitor currently in a Phase 1 trial in patients with advanced solid tumors, demonstrated potent anti-tumor activity in multiple models of heavily pretreated ovarian cancer.
Aptevo Therapeutics announced that it had submitted an Investigational New Drug (IND) application to the FDA to evaluate APVO436 in a Phase 1 clinical study for the treatment of patients with relapsed or refractory acute myeloid leukemia or myelodysplastic syndrome.
Aptevo Therapeutics presented new data for APVO436 at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) 2018 Annual Meeting.
Arcus Biosciences announced that the FDA cleared the IND application for OmniAb-derived AB122 and the company presented a poster on AB122 at the AACR (Free AACR Whitepaper) 2018 Annual Meeting.
Arcus Biosciences also announced a collaboration agreement with Infinity Pharmaceuticals to evaluate AB122 with IPI-549, an immuno-oncology candidate that selectively inhibits PI3K-gamma.
CStone Pharmaceuticals announced two pivotal Phase 2 studies exploring the efficacy and safety of OmniAb-derived CS1001 in patients with natural killer cell/T-cell lymphoma and classical Hodgkin’s lymphoma have been initiated and have each enrolled and dosed the first patient.
CStone Pharmaceuticals announced a collaboration agreement with Blueprint Medicines to initiate a proof-of-concept clinical trial in China evaluating BLU-554 in combination with OmniAb-derived CS1001.
CStone Pharmaceuticals also announced the completion of a $260 million series B financing that will primarily fund clinical development of OmniAb-derived CS1001.
MEI Pharma announced a poster presentation related to ME-344 at the 2018 ASCO (Free ASCO Whitepaper) Annual Meeting.
Roivant announced that OmniAb-derived RVT-1401 (previously HL161) will form the foundation of a new company called Immunovant.
Nucorion Pharmaceuticals presented preclinical data for its novel liver-targeting prodrug technology program, NCO-1010, for the treatment of hepatitis B at the European Association for the Study of the Liver’s International Liver Congress.
Business Development

Ligand announced receipt of a $47 million payment as a result of signing an amendment related to its OmniAb platform license agreement with WuXi Biologics. Under the amended agreement, Ligand will continue to be eligible to earn royalties at the same rate and terms as the previous agreement and the predefined contract payments have been eliminated. With this new business relationship, WuXi Biologics believes it will be able to increase the number of OmniAb antibodies it discovers for its clients in China and around the world.
Ligand entered into a research and development agreement with Janssen Pharmaceuticals for the development by Ligand of a heavy-chain-only (HCO) version of OmniChicken, for which Ligand is eligible to earn defined milestone payments. Upon completion of the project, Ligand will be able to make the HCO OmniChicken available to other commercial partners.
Ligand entered into OmniChicken license expansions with FivePrime and Amgen, allowing the companies to use the OmniChicken technology.
Ligand entered into a Captisol use agreement with Sunshine Lake Pharmaceuticals.
Internal Research and Development

Ligand presented a poster at the National Lipid Association’s 2018 Scientific Sessions showing that Ligand’s LTP Technology significantly improves liver targeting of the statin rosuvastatin (Crestor), and may potentially be an effective strategy to increase the therapeutic index of statins and reduce statin intolerance.
A paper by Ligand scientists entitled "V(D)J Rearrangement is Dispensable for Producing CDR-H3 Sequence Diversity in a Gene Converting Species" was published in the journal Frontiers in Immunology, highlighting the use of OmniChicken in antibody drug discovery.
Recent Financing

Ligand announced the pricing of $750 million aggregate principal amount (including overallotments) of 0.75% convertible senior notes due 2023 with an initial conversion price of $248.48 per share. Ligand also repurchased 260,000 shares in the transaction and entered into convertible note hedge transactions with the net effect of increasing the effective conversion price of the notes to $315.38 per share. Ligand indicated the net proceeds of the offering will be used for acquisitions, working capital and other general corporate purposes.
Adjusted Financial Measures

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

Conference Call

Ligand management will host a conference call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss this announcement and answer questions. To participate via telephone, please dial (833) 591-4752 from the U.S. or (720) 405-1612 from outside the U.S., using the conference ID 9585138. To participate via live or replay webcast, a link is available at www.ligand.com.