On November 7, 2016 ArQule, Inc. (Nasdaq: ARQL) reported its financial results for the third quarter of 2016 (Press release, ArQule, NOV 7, 2016, View Source [SID1234516358]).

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For the quarter ended September 30, 2016, the Company reported a net loss of $5,817,000 or $0.08 per share, compared to a net loss of $2,354,000 or $0.04 per share, for the third quarter of 2015. For the nine-month period ended September 30, 2016, the Company reported a net loss of $15,898,000 or $0.23 per share, compared to a net loss of $10,922,000 or $0.17 per share for the nine-month period ended September 30, 2015.

At September 30, 2016, the Company had a total of $37,659,000 in cash, equivalents and marketable securities.

Key Highlights

ARQ 087, our proprietary FGFR inhibitor, is approaching completion of enrollment in the phase 2 portion of the phase 1/2 trial in intrahepatic cholangiocarcinoma (iCCA). Discussions with regulatory agencies in the U.S. and Europe are nearing completion for the design of a potential pivotal trial in iCCA. We plan to finalize the trial design by year end pending final trial results.
ARQ 531, our proprietary reversible BTK inhibitor, continues to demonstrate best-in-class potential with preclinical data to be presented at the 2016 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting. The data, to be presented by The Ohio State University, demonstrate that ARQ 531 effectively inhibits C481S mutant BTK in patient derived cells and in a TCL1 mouse model shows efficacy superior to that of ibrutinib in Chronic Lymphocytic Leukemia (CLL). The company plans to complete preclinical studies and file an Investigational New Drug (IND) application in early 2017 to begin clinical trials with an initial focus on the fast-to-market, ibrutinib resistant C481S mutant BTK CLL population.
ARQ 092, our lead proprietary AKT inhibitor, continues to demonstrate the potential utility of targeting AKT in rare non-oncological indications and will be the focus of an oral presentation at the ASH (Free ASH Whitepaper) Annual Meeting. The data, to be presented by The University of Illinois College of Medicine, demonstrate that in neutrophils and platelets from Sickle Cell Disease (SCD) patients in vitro and cell-cell interactions in a mouse model of SCD, ARQ 092 attenuates neutrophil-platelet interactions. The study provides evidence that ARQ 092 could be a novel therapy in treating and preventing acute vaso-occlusive complications in SCD. The data warrants further studies of ARQ 092 in SCD.
ARQ 092 phase 1 trial for Proteus syndrome continues to enroll and our collaborator, the National Institutes of Health (NIH), is in the final stages of implementing an updated enrollment protocol that will facilitate logistics for patients and their families. To date, the drug has been well tolerated, and we are looking forward to assessing full data from the initial two cohorts in the early part of next year.
ARQ 092 clinical research to be expanded into PROS (PIK3CA-Related Overgrowth Spectrum) family of rare diseases. The company received approval of its IND application from the Food and Drug Administration (FDA) in the PROS family of rare diseases, including Proteus syndrome, for a potential clinical trial.
Tivantinib METIV-HCC phase 3 trial for hepatocellular carcinoma (HCC) is scheduled to conclude in early 2017. Top-line data is expected in the first quarter of 2017.
"It is exciting to see our proprietary pipeline being pursued independently and through collaborations with the top researchers in the fields of oncology, hematology and selected rare diseases," said Paolo Pucci, Chief Executive Officer of ArQule. "We are encouraged that several projects have attracted the interest of leading scientific institutions including ARQ 531, our BTK inhibitor, which is in preclinical testing with our collaborators at The Ohio State University. ARQ 092 continues to progress in Proteus syndrome through a program that includes a phase 1 trial conducted by the NIH. In addition, we now have preclinical data for ARQ 092 in Sickle Cell Disease through the work of The University of Illinois College of Medicine. Lastly, we are pleased to have moved closer to a potential pivotal trial in an attractive fast to market opportunity for ARQ 087 in iCCA."

"Our lead proprietary drug candidate, ARQ 087, is nearing completion of the phase 2 iCCA trial," said Dr. Brian Schwartz, M.D., Head of Research and Development and Chief Medical Officer at ArQule. "Encouraging discussions and positive feedback from the regulatory agencies, combined with the totality of the efficacy data we have observed in the clinical trials, has moved us closer to defining a pivotal trial design for ARQ 087 in this indication."

Revenues and Expenses

Revenues for the quarter ended September 30, 2016, were $1,223,000 compared with revenues of $2,653,000 for the quarter ended September 30, 2015. Revenues in the nine-months ended September 30, 2016 were $3,522,000 compared with revenues of $8,442,000 in the nine-months ended September 30, 2015. Revenue in the three and nine-month periods of 2016 and 2015 is comprised of revenue from the Daiichi Sankyo tivantinib development agreement and the Kyowa Hakko Kirin exclusive license agreement.

The revenue decreases in the quarter ended September 30, 2016 of $0.5 million from our Daiichi Sankyo METIV-HCC trial and $1.0 million from our Kyowa Hakko Kirin JET-HCC trial were principally due to the March 2016 extension of the development period through December 31, 2016 for both programs. The revenue decreases in the nine months ended September 30, 2016 of $2.0 million from our Daiichi Sankyo METIV-HCC trial and $2.9 million from our Kyowa Hakko Kirin JET-HCC trial were also principally due to the extension of the development period through December 31, 2016.

Research and development expense in the third quarter of 2016 was $5,265,000 compared with $3,180,000 for the third quarter of 2015. The $2.1 million increase in research and development expense in the third quarter of 2016 was principally due to increased outsourced clinical and product development costs of $1.9 million and professional fees of $0.2 million.

Research and development expense in the nine-months ended September 30, 2016 was $13,800,000 compared with $11,920,000 in the nine-months ended September 30, 2015. The $1.9 million increase in research and development expense in the nine-months ended September 30, 2016 was primarily due to increased outsourced clinical and product development costs of $2.6 million and professional fees of $0.2 million, partially offset by decreased labor and related costs of $0.4 million and facility costs of $0.5 million.

General and administrative expense was $1,824,000 in the third quarter of 2016 compared with $1,839,000 in the third quarter 2015.

General and administrative expense was $5,755,000 in the nine-months ended September 30, 2016 compared with $7,802,000 in the nine-months ended September 30, 2015. General and administrative expense decreased by $2.0 million in the nine-months ended September 30, 2016 primarily due to lower facility costs of $1.6 million, labor related costs of $0.2 million and professional fees of $0.2 million.

Sarepta Therapeutics has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Sarepta Therapeutics, NOV 7, 2016, View Source [SID1234516356]).

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Scynexis has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Scynexis, 2017, NOV 7, 2016, View Source [SID1234521706]).

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On November 7, 2016 Cascadian Therapeutics (NASDAQ:CASC), a clinical-stage biopharmaceutical company, reported third quarter highlights and reported financial results for the quarter ended September 30, 2016 (Press release, Cascadian Therapeutics, NOV 7, 2016, View Source [SID1234516359]).

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"We continue to make strides on the clinical development front as we advance tucatinib in combination for patients with metastatic HER2+ breast cancer, including those with and without brain metastases," said Scott Myers, CEO of Cascadian Therapeutics. "There is significant need for improved therapies in this disease, and we continue to be impressed by the favorable safety profile observed in the tucatinib combination studies to date when compared with other HER2 therapies, as well as its potential to treat systemic disease and positively impact brain metastases."

Mr. Myers added, "We are looking forward to the presentation of updated clinical data from our ongoing Phase 1b ‘Triplet’ study of tucatinib plus capecitabine and trastuzumab at the San Antonio Breast Cancer Symposium in December, as well as updating everyone on our clinical and regulatory plans later this quarter."

THIRD QUARTER AND RECENT HIGHLIGHTS

Clinical Development

HER2CLIMB, continues to be on track with enrollment of Phase 2 tucatinib (ONT-380) combination trial. This randomized, double-blind, placebo-controlled study is evaluating the safety and efficacy of tucatinib versus placebo in combination with capecitabine and trastuzumab in late stage HER2+ breast cancer patients, with and without brain metastases, who have previously been treated with a taxane, trastuzumab, pertuzumab and T-DM1. Tucatinib, which has Fast Track designation from the FDA in this setting, is expected to enroll approximately 180 patients at sites in the U.S., Canada and select countries in Western Europe. Previously reported results from the ongoing Phase 1b study of the tucatinib "Triplet" combination demonstrated promising systemic activity, a favorable safety profile and activity against brain metastases, which represents a significant unmet medical need.

Data presented at ESMO (Free ESMO Whitepaper) 2016 show early evidence of activity of tucatinib combination therapy in patients with cutaneous HER2+ metastases. In a poster presentation, Dr. Alison Conlin, study author and Medical Oncologist, Providence Cancer Center, Portland, OR, presented data on eight patients with HER2+ metastases to the skin who received the maximum tolerated tucatinib dose in combination with capecitabine and/or trastuzumab from the Company’s Phase 1b combination study. Patients had previously received a median of six lines of drug therapy. Responses observed in skin lesions in these patients included one complete response, four partial responses and three patients with stable disease, including one partial response of a patient receiving tucatinib and trastuzumab only.

Continue to advance novel Chk1 cell cycle inhibitor with goal of conducting IND-enabling studies. Preclinical research has shown that select Cascadian Chk1 inhibitors display cellular potency in in vitro models against Chk1, are active against a diverse range of cancer cell lines, and demonstrate synergistic activity in combination with certain chemotherapeutic drugs.
Corporate Update

Cascadian’s board of directors has called a Special Stockholder Meeting to vote on a reverse split of the Company’s common stock and a reduction of the authorized common stock. The objective is to make the stock accessible to a wider range of institutional investors, benefiting all stockholders, and ensure that the necessary financial structure is in place to execute product development and other necessary corporate initiatives. The stockholder vote on the proposal will be held on November 18, 2016. For details, see the proxy statement at www.sec.gov/edgar.
THIRD QUARTER 2016 FINANCIAL HIGHLIGHTS

Cash, cash equivalents and investments totaled $71.6 million as of September 30, 2016, compared to $56.4 million at December 31, 2015, an increase of $15.2 million, or 27.0%. The increase was primarily the result of net proceeds of $43.3 million from the Company’s June 2016 financing offset by cash used to fund operations of $28.1 million.

Net loss attributable to common stockholders for the three months ended September 30, 2016 was $11.8 million, or $0.09 per basic and diluted share, compared with a net loss attributable to common stockholders of $4.6 million, or $0.05 per basic and diluted share, for the comparable period in 2015. The increase in net loss attributable to common stockholders for the quarter was primarily due to increases in research and development expenses of $2.2 million primarily due to greater activity related to the development of the Company’s product candidates and increases in general and administrative expenses of $1.4 million primarily due to expenses related to the Company’s Retention Payment Plan and higher professional fees associated with legal and regulatory compliance. The Company also recognized a non-cash $1.0 million deemed dividend due to the beneficial conversion feature on the Series D convertible preferred stock. In addition, the increase in net loss attributable to common stockholders was due to lower non-cash income from the change in the fair value of the Company’s warrant liability, which was zero for the three months ended September 30, 2016 compared to $2.6 million for the three months ended September 30, 2015. The change in the fair value of warrant liability was due to the expiration of September 2010 warrants, which expired in October 2015.

Net loss attributable to common stockholders for the nine months ended September 30, 2016 was $49.8 million, or $0.46 per basic and diluted share, compared with a net loss attributable to common stockholders of $23.5 million, or $0.24 per basic and diluted share, for the comparable period in 2015. The increase in net loss attributable to common stockholders for the nine months ended September 30, 2016 was primarily due to the intangible asset impairment charge of $19.7 million during the nine months ended September 30, 2016, which was the result of the mutual termination of the STC.UNM agreement. In addition, the increase in net loss attributable to common stockholders was due to increases in research and development expenses of $3.4 million primarily due to greater activity related to the development of the Company’s product candidates, and increases in general and administrative expenses of $7.5 million primarily related to the retirement and separation agreement that Cascadian entered into with its former chief executive officer in January 2016, expenses related to the Company’s Retention Payment Plan and higher professional fees associated with legal and regulatory compliance. The Company also recognized a non-cash $2.6 million deemed dividend due to the beneficial conversion feature on the Series D convertible preferred stock. The increase in the net loss attributable to common stockholders was partially offset by a $6.9 million tax benefit during the nine months ended September 30, 2016.
Financial Guidance
Cascadian Therapeutics believes the following financial guidance to be correct as of the date provided. Cascadian Therapeutics is providing this guidance as a convenience to investors and assumes no obligation to update it.

Cascadian Therapeutics currently expects cash used in operations in 2016 to be approximately $38.0 million to $40.0 million. With cash, cash equivalents and investments of $71.6 million as of September 30, 2016, Cascadian Therapeutics estimates that its cash, cash-equivalents and investments will be sufficient to fund operations for at least the next 12 months.

About Cascadian Therapeutics
Cascadian Therapeutics is a clinical-stage biopharmaceutical company dedicated to developing innovative product candidates for the treatment of cancer. Our lead product candidate, tucatinib, is an orally active and selective small molecule HER2 inhibitor, which has been studied in approximately 200 patients to date. Preliminary results from two ongoing Phase 1b studies of tucatinib in combination showed promising systemic activity, a favorable safety profile and encouraging activity against brain metastases. Cascadian Therapeutics is also conducting a randomized, double-blind, placebo-controlled Phase 2 study called HER2CLIMB. The study is evaluating tucatinib versus placebo in combination with capecitabine and trastuzumab in late stage HER2+ breast cancer patients, with and without brain metastases, who have previously been treated with a taxane, trastuzumab, pertuzumab and T-DM1. This study is expected to enroll 180 patients with and without brain metastases across approximately 100 clinical sites in the U.S., Canada, and Western Europe. The Company is also developing a cell cycle inhibitor, Chk1, and plans to move the program forward through IND-enabling studies in 2017. For more information, visit www.cascadianrx.com.

Gilead Sciences has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Gilead Sciences, NOV 7, 2016, View Source [SID1234516365]).

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