On March 1, 2018 Loxo Oncology, Inc. (Nasdaq:LOXO), a biopharmaceutical company innovating the development of highly selective medicines for patients with genetically defined cancers, reported that fourth quarter and year-end 2017 financial results(Press release, Loxo Oncology, MAR 1, 2018, View Source [SID1234524306]).

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"2017 was a remarkable year for the company," said Josh Bilenker, M.D., chief executive officer of Loxo Oncology. "Our TRK franchise partnership with Bayer brings capital and commercial expertise to an NDA-stage opportunity in larotrectinib and an acquired resistance solution in LOXO-195. Continued progress in the Phase 1 trial for LOXO-292, our highly selective RET inhibitor, has positioned the program for a clinical update in the first half of 2018. Finally, our acquisition of LOXO-305, a selective and reversible BTK inhibitor intended for patients with acquired resistance or intolerance to covalent BTK inhibitors, brings a fourth program to our pipeline, with a clinical start planned for the second half of 2018."

Recent Highlights

TRK Inhibitor Franchise

Global Development and Commercialization Partnership with Bayer: On November 14, 2017, Loxo Oncology announced a global collaboration with Bayer to develop and commercialize larotrectinib and LOXO-195. The company received a $400.0 million upfront payment and is eligible for an additional $1.15 billion in milestones, of which Loxo Oncology believes $425.0 million are achievable in 2018 and 2019. In the U.S., where Loxo Oncology and Bayer will co-promote the products, the parties will share commercial costs and profits on a 50/50 basis. More information on the collaboration can be found here.
Larotrectinib

New England Journal of Medicine (NEJM) Publication: On February 22, 2018, the NEJM published results for larotrectinib in the treatment of pediatric and adult patients with TRK fusion cancers. The publication included central radiology results and additional patient follow-up from the 2017 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting presentation, employing a July 17, 2017 data cutoff. As previously reported, the overall response rate (ORR) was 75% by central assessment and 80% by investigator assessment. As of the July 17, 2017 data cutoff, 86% of responding patients remained on treatment or had undergone surgery with curative intent. The publication can be found here.
New Drug Application (NDA) Rolling Submission: On December 20, 2017, Loxo Oncology announced that the company initiated a rolling NDA submission to the U.S. Food and Drug Administration (FDA) for larotrectinib for the treatment of unresectable or metastatic solid tumors with NTRK-fusion proteins in adult and pediatric patients who require systemic therapy and who have either progressed following prior treatment or who have no acceptable alternative treatments. The company expects to complete the submission by the end of March. More information can be found here.
Clinical Data in Thyroid (TC) and Salivary Gland Cancers (SGC): On February 15, 2018, a poster presentation at the 2018 Multidisciplinary Head and Neck Cancers Symposium outlined data in 19 patients (age 15-75 years) with TRK fusion TC or SGC who were treated in the ongoing larotrectinib clinical trials. In 17 patients with measurable disease (5 TC and 12 SGC), treatment with larotrectinib led to an ORR of 88%, by both central and investigator assessment. Adverse events were consistent with data previously reported from these trials. The presented poster can be found here.
Clinical Data from the Phase 1 SCOUT Clinical Trial: On December 4, 2017, an oral presentation at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Special Conference on Pediatric Cancer Research outlined data in 17 pediatric patients with TRK fusion cancers who were treated in the larotrectinib pediatric Phase 1 SCOUT clinical trial. Treatment with larotrectinib led to an ORR of 93%, by both central and investigator assessment. An overview of the data can be found here.
Upcoming Milestones

Larotrectinib (TRK)
Completion of the rolling NDA submission is expected in March
Marketing Authorisation Application submission by Bayer in the European Union is expected in 2018
Presentation of updated TRK fusion clinical data is expected in the second half of 2018
LOXO-195 (next-generation TRK)
Presentation of updated clinical data is expected in the second half of 2018
LOXO-292 (RET)
Presentation of updated clinical data is expected in the first half of 2018
LOXO-305 (BTK)
Initiation of a Phase 1 clinical trial is expected in the second half of 2018
Fourth Quarter and Full Year 2017 Financial Results

As of December 31, 2017, Loxo Oncology had aggregate cash, cash equivalents and investments of $626.2 million, compared to $141.8 million as of December 31, 2016. Loxo Oncology received $250 million of the $400 million upfront payment related to the Bayer collaboration in the fourth quarter of 2017 and the remaining $150 million is payable in first quarter of 2018.

Revenue from the collaboration agreement was $21.3 million for the fourth quarter and full year of 2017, compared to none for the fourth quarter and full year of 2016. This represents the partial revenue recognition of the $400 million upfront payment from the Bayer collaboration. Loxo Oncology is recognizing revenue on a proportional performance basis utilizing a calculation based on quarterly research and development spending associated with larotrectinib and LOXO-195, relative to cumulative and forecasted research and development spending on larotrectinib and LOXO-195 over the course of the collaboration agreement. As a result, the quarterly revenue recognized for the upfront payment will vary from quarter to quarter.

Research and development expenses were $30.7 million for the fourth quarter of 2017 compared to $23.4 million for the fourth quarter of 2016. This increase was primarily due to expanded larotrectinib development activities including clinical costs, as well as additional development expenses related to our other programs. Loxo Oncology also recognized research and development-related stock-based compensation expense of $1.5 million during the fourth quarter of 2017 compared to $1.4 million for the fourth quarter of 2016.

Research and development expenses were $140.0 million for the year ended December 31, 2017, compared to $58.3 million for the year ended December 31, 2016. This increase was primarily due to a non-recurring charge related to the $40.0 million asset acquisition of the BTK inhibitor program from Redx, expanded larotrectinib development activities, as well as additional development expenses related to our other programs. We also had higher employment costs primarily due to increased headcount. Loxo Oncology also recognized research and development-related stock-based compensation expense of $9.5 million during the year ended December 31, 2017, compared to $3.5 million for the year ended December 31, 2016.

General and administrative expenses were $12.7 million for the fourth quarter of 2017 compared to $4.0 million for the fourth quarter of 2016. The increase was primarily due to preparation activities for the potential commercialization of larotrectinib, additional headcount and associated employment costs and general and administrative professional fees. Loxo Oncology also recognized general and administrative-related stock-based compensation expense of $3.3 million during the fourth quarter 2017 compared to $1.2 million for the fourth quarter of 2016.

General and administrative expenses were $33.7 million for the year ended December 31, 2017, compared to $14.9 million for the year ended December 31, 2016. The increase was primarily due to preparation activities for the potential commercialization of larotrectinib, additional headcount and associated employment costs and general and administrative professional fees. Loxo Oncology also recognized general and administrative-related stock-based compensation expense of $9.9 million during the year ended December 31, 2017, compared to $4.5 million for the year ended December 31, 2016.

Net loss was $20.6 million for the fourth quarter of 2017, compared to $27.2 million for the fourth quarter of 2016. Net loss was $148.9 million for the year ended December 31, 2017, compared to $72.4 million for the year ended December 31, 2016. This increase in net loss is primarily driven by the increases in operating expenses.

Non-GAAP net loss was $37.2 million for the fourth quarter of 2017, compared to $24.6 million for the fourth quarter of 2016. Non-GAAP net loss was $110.8 million for the year ended 2017, compared to $64.4 million for the year ended 2016. This non-GAAP net loss measure, more fully described below under "Non-GAAP Financial Measures," excludes the recognition of collaboration revenue related to an upfront payment, acquisition of an in-process R&D asset and share-based compensation expenses. A reconciliation of the GAAP financial results to non-GAAP financial results is included with the attached financial statements.

Conference Call Information
Loxo Oncology will host a conference call today at 8:00 a.m. ET to discuss the fourth quarter and full-year 2017 financial results and program updates. To participate in the conference call, please dial (877) 930-8065 (domestic) or (253) 336-8041 (international) and refer to conference ID 7395447. A replay will be available shortly after the conclusion of the call and archived on the company’s website for 30 days following the call.

On March 1, 2018 Radius Health, Inc. ("Radius" or the "Company") (Nasdaq:RDUS), today reported its financial results for the fourth quarter and full year ended December 31, 2017, and provided a business update (Press release, Radius, MAR 1, 2018, View Source [SID1234524327]).

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"Our fourth-quarter and full year results highlight the great performance of TYMLOS which we expect to become the leader in the anabolic market," said Jesper Høiland, President and Chief Executive Officer of Radius.

"I’m also very pleased to announce that in January we aligned with the FDA on a regulatory path for our investigational abaloparatide patch, a novel technology with potential to provide a convenient, alternative treatment option for osteoporosis patients. This innovation is aimed at expanding both the abaloparatide and total anabolic addressable markets. We are also excited to announce that we have entered into a commercial supply agreement with 3M Company under which 3M has agreed to exclusively manufacture commercial supplies of abaloparatide patches," Mr. Høiland continued.

"Following the strong single-agent activity seen in our elacestrant Phase 1 study, we have finalized our global development strategy based on recent feedback from the EMA and the FDA. We expect to initiate a global, randomized, comparator-controlled Phase 2 study of elacestrant as a third-line monotherapy for ER-positive/HER2-negative advanced or metastatic breast cancer in the second half of 2018. Depending on the study results, this single trial could support applications for global marketing approvals."

"I believe our clinical progress and operational performance during 2017 have built solid momentum for a strong 2018 for Radius," Mr. Høiland concluded.

TYMLOS (abaloparatide injection)

Fourth-quarter sales of TYMLOS in the U.S. (the second full quarter since its launch) were $7.7 million. Radius received FDA approval for TYMLOS on April 28, 2017 for the treatment of postmenopausal women with osteoporosis at high risk of fracture and began shipments to wholesalers at the end of May 2017.
Nine months after launch, TYMLOS has surpassed the level of commercial market access for the competing anabolic product, with approximately 259 million covered lives and 93% coverage in commercial plans. TYMLOS coverage in Medicare Part D plans has also increased to 41%.

TYMLOS market share continued to increase in the fourth quarter to approximately 32% of new patients starting anabolic therapy (NBRx) and 13% of total prescriptions in the anabolic market. The anabolic market also showed growth in 2017, for the first time since 2012.

A 5.9% price increase for TYMLOS took effect on February 22, 2018.

In the fourth quarter, a labeling supplement for TYMLOS was submitted to the FDA with the positive 43-month data from the ACTIVExtend study, which showed continued significant risk reduction in fractures in patients who were transitioned to receive an additional 24 months of bisphosphonate therapy.
Pipeline Updates

Abaloparatide-Transdermal Patch (TD)

In January 2018, Radius met with the FDA to align on a regulatory development path for the abaloparatide patch. The FDA agreed that, depending on the study results, a single, randomized, open label, active-controlled, non-inferiority (to abaloparatide-SC) study of up to 500 patients with postmenopausal osteoporosis at high risk of fracture would be sufficient to gain approval for the abaloparatide patch. The primary endpoint in the study will be change in lumbar spine bone mineral density (BMD) at 12 months. The Company expects to initiate this pivotal trial in mid-2019.

In addition, on February 27, 2018, Radius entered into a scale-up and commercial supply agreement with 3M in which 3M agreed to exclusively manufacture commercial supplies of abaloparatide patches. As part of the agreement, in addition to per unit transfer prices, Radius will pay 3M a mid-to-low single digit royalty on worldwide net sales of abaloparatide patches and reimburse 3M for certain capital expenditures incurred to establish commercial supply of abaloparatide patches.
Abaloparatide — Subcutaneous (SC)

European MAA

Radius’ European Marketing Authorization Application (MAA) for abaloparatide-SC for the treatment of postmenopausal women with osteoporosis is under review by the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA). On December 15, 2017, the CHMP issued a third Day-180 List of Outstanding Issues. As part of its ongoing risk-benefit assessment, the CHMP informed the Company that it intends to refer the MAA to a scientific advisory group for additional advice. The Company expects an opinion from the CHMP regarding the MAA in the first half of 2018.
Male Osteoporosis Trial

In the fourth quarter, the Company gained agreement with the FDA on the design of a clinical trial in men with osteoporosis, which, if successful, will form the basis of an sNDA seeking to expand the use of TYMLOS to treat men with osteoporosis at high risk for fracture. The study will be a randomized, double-blind, placebo-controlled trial that will enroll approximately 225 men with osteoporosis. The primary endpoint is change in spine BMD at 12 months compared with placebo. The study is expected to be initiated in the first quarter of 2018.
Elacestrant (RAD1901)

An update on data as of October 30, 2017 from the Phase 1 clinical study was presented at the San Antonio Breast Cancer Symposium in December 2017, with the elacestrant 400mg single agent showing an objective response rate of 27.3%, a clinical benefit rate at 24 weeks of 47.4% and median progression free survival of 5.4 months in heavily treated, ER-positive/HER-2 negative advanced breast cancer patients. The results showed that elacestrant was well tolerated with low grade nausea and dyspepsia being the most commonly reported adverse events.

In October 2017, elacestrant received an FDA Fast Track designation. In February 2018, we received scientific advice from the EMA regarding a potential single-arm monotherapy Phase 2 trial of elacestrant in patients with ER-positive/HER2-negative advanced or metastatic breast cancer, and we had a meeting with the FDA regarding the registrational pathway for elacestrant at which we confirmed FDA’s guidance for a single-arm study and gained alignment on an alternative potential comparator study design. Based on feedback from the EMA and the FDA, we now intend to conduct a single, randomized, controlled Phase 2 trial of elacestrant as a third-line monotherapy in approximately 300 patients with ER positive/HER2 negative advanced/metastatic breast cancer. Patients in the study would be randomized to receive either elacestrant or the investigator’s choice of an approved hormonal agent and the primary endpoint of the study will be progression-free survival (PFS). The study would also include a planned interim PFS analysis. We believe that, depending on results, this single trial would support applications for global marketing approvals for elacestrant as a third-line monotherapy, including potentially accelerated approval for elacestrant in the United States. We will provide further study details when the Phase 2 study is started, which we expect will be in the second half of 2018.

Following a strategic review in December 2017, the elacestrant development program for vasomotor symptoms was discontinued.
RAD140

In September 2017, a Phase 1 study of RAD140, a nonsteroidal selective androgen receptor modulator (SARM), was initiated in patients with hormone receptor-positive, locally advanced or metastatic breast cancer. The clinical trial is designed to evaluate the safety and maximum tolerated dose of RAD140 in approximately 40 patients. We expect to provide an update on our RAD140 development program by the end of 2018.
Corporate Update

In November 2017, we announced the appointment of Joseph Kelly as Senior Vice President of Sales and Marketing, and the promotion of Amanda Mott to Senior Vice President of Market Access.

Upcoming Milestones

Abaloparatide-SC
– Initiate a male osteoporosis study in the first quarter of 2018
– Receive Committee for Medicinal Products for Human Use (CHMP) opinion regarding the EMA’s review of the abaloparatide-SC MAA in the first half of 2018
– Publication of ACTIVExtend Phase 3 data
– Enter into a partnership for the potential commercialization of abaloparatide-SC outside the US and Japan
Elacestrant
– Initiate a potentially pivotal Phase 2 clinical trial as third-line monotherapy in advanced/metastatic ER-positive/HER2-negative breast cancer patients in the second half of 2018
– Collaboration agreement for elacestrant combination

RAD140
– Continue enrollment in the Phase 1 study and provide a program update by the end of 2018.
Expected Radius Presentations at Investor Conferences in 1H 2018:

On March 12-14, the Company will present and host one-on-one meetings at the 38th Cowen Annual Healthcare Conference in Boston, Mass.
On May 8-9, the Company will present and host one-on-one meetings at the Deutsche Bank Annual Healthcare Conference in Boston, Mass.
On May 15-17, the Company will present and host one-on-one meetings at the Bank of America Merrill Lynch Healthcare Conference in Las Vegas, NV.
On June 12-14, the Company will present and host one-on-one meetings at the Goldman Sachs Global Healthcare Conference in Palos Verdes, CA.
Fourth Quarter 2017 Finance Review

For the three months ended December 31, 2017, Radius reported a net loss of $71.0 million, or $1.59 per share, compared to a net loss of $52.7 million, or $1.22 per share, for the three months ended December 31, 2016.

For the three months ended December 31, 2017, Radius reported TYMLOS net product revenues of $7.7 million, which reflects the second full quarter of recorded sales. Radius had no revenue in the three months ended December 31, 2016 as the FDA approved TYMLOS on April 28, 2017.

Research and development expense for the three months ended December 31, 2017, was $22.9 million compared to $25.6 million for the three months ended December 31, 2016, a decrease of $2.7 million or 10.5 percent, primarily attributable to a decrease in R&D costs associated with the development of TYMLOS and elacestrant.

Selling, general, and administrative expense for the three months ended December 31, 2017, was $50.7 million compared to $27.5 million for the three months ended December 31, 2016, an increase of $23.2 million or 84.4 percent primarily due to personnel, promotional, and consulting expenses related to the launch of TYMLOS.

Full Year 2017 Finance Review

For the twelve months ended December 31, 2017, Radius reported a net loss of $254.2 million, or $5.80 per share, compared to a net loss of $182.8 million, or $ 4.24 per share, for the twelve months ended December 31, 2016.

For the twelve months ended December 31, 2017 Radius reported TYMLOS net product revenues of $12.1 million. Radius had no revenue in the twelve months ended December 31, 2016 as the FDA approved TYMLOS on April 28, 2017.

Research and development expense for the twelve months ended December 31, 2017, was $83.1 million compared to $107.4 million for the twelve months ended December 31, 2016, a decrease of $24.3 million or 22.6 percent primarily due to the reduction in R&D expenses associated with the elacestrant projects and the development of TYMLOS.

Selling, general, and administrative expense for the twelve months ended December 31, 2017, was $186.7 million compared to $77.5 million for the twelve months ended December 31, 2016, an increase of $109.2 million, or 140.9%, primarily attributable to personnel and other support costs resulting from the commercial launch of TYMLOS.

As of December 31, 2017, Radius had $430.3 million in cash, cash equivalents and marketable securities. Based upon our cash, cash equivalents and marketable securities balance, we believe that, prior to the consideration of proceeds from partnering and/or collaboration activities, we have sufficient capital to fund our development plans, U.S. commercial and other operational activities for not less than twelve months from the date of this press release.

Webcast and Conference Call

In connection with today’s reporting of Fourth Quarter and Full Year Financial Results, Radius will host a conference call and live audio webcast at 4:30 p.m. ET on Thursday, March 1, 2018 to discuss the commercial outlook for TYMLOS, review the financial results and provide a Company update.

Webcast Information:

Date: Thursday, March 1, 2018

Time: 4:30 p.m. ET

Live webcast: View Source

A replay of the webcast will be available on the Company’s website, www.radiuspharm.com in the Investor section under Events and Presentations for 7 days following the live webcast.

Conference Call Information:

Domestic Dial-in Number: (866) 323-7965

International Dial-in Number: (346) 406-0961

Conference ID: 3484256

For those unable to participate in the conference call or webcast, a replay will be available beginning March 1, 2018, at 7:30 p.m. ET until March 8, 2018 at 7:30 p.m. ET. To access the replay, dial (855) 859-2056 for U.S. or (404) 537-3406 for International. The replay pin number is 3484256.

A live audio webcast of the call can be accessed from the Investors section of the Company’s website, www.radiuspharm.com, where a webcast replay will be also available for 14 days. The full text of the announcement and financial results will also be available on the Company’s website.

Juno has filed a 10-K – Annual report [Section 13 and 15(d), not S-K Item 405] with the U.S. Securities and Exchange Commission (Filing, 10-K, Juno, 2018, MAR 1, 2018, View Source [SID1234524277]).

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Supernus has filed a 10-K – Annual report [Section 13 and 15(d), not S-K Item 405] with the U.S. Securities and Exchange Commission (Filing, 10-K, Supernus, 2018, MAR 1, 2018, View Source [SID1234524319]).

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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

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On March 1, 2018 Apollo Endosurgery, Inc. ("Apollo") (Nasdaq: APEN), a leader in less invasive medical devices for bariatric and gastrointestinal procedures, reported financial results for the fourth quarter and year ended December 31, 2017 (Press release, Lpath, MAR 1, 2018, View Source [SID1234524307]).

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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

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Fourth Quarter 2017 Highlights
•
GAAP total revenues increased 5% over the fourth quarter of 2016
•
Non-GAAP adjusted total revenues, which excludes U.S. Orbera starter kit sales, increased 9% over the fourth quarter of 2016
•
Total Endo-bariatric sales of $9.8 million, up 29% over the fourth quarter of 2016
Full Year 2017 Highlights
•
GAAP total revenues of $64.3 million in 2017 compared to $64.7 million in 2016
•
Non-GAAP adjusted total revenues, which excludes U.S. Orbera starter kit sales, increased 5% over 2016
•
Endo-bariatric sales of $35.9 million, up 13% over 2016
Todd Newton, CEO of Apollo, said, "The fourth quarter marks our second consecutive quarter of consolidated total revenue growth on the sales of our Endo-bariatric products especially in our international markets. Demand for OverStitch was especially strong during the fourth quarter in all markets as the treatments possible with this new technology gained physician adoption. Our Endo-bariatric product sales are now 60% of our total sales and we look to build on this momentum in 2018."
Fourth Quarter 2017 Results
Total revenues in the fourth quarter of 2017 were $16.1 million, compared to $15.3 million in the fourth quarter 2016, an increase of 5%.
Total Endo-bariatric sales increased 29% to $9.8 million in the fourth quarter of 2017 compared to $7.6 million in the fourth quarter of 2016, due to a 64%, or $2.5 million, increase in Endo-bariatric product sales outside the U.S. ("OUS") as a result of higher OverStitch sales in our direct markets and the introduction of Orbera365 in Europe. OUS direct market sales were 64% of total OUS Endo-bariatric product sales in the fourth quarter of 2017, compared to 59% in the fourth quarter of 2016. In the U.S., total Endo-bariatric product sales declined 7%, or $0.3 million in the fourth quarter of 2017 compared to the same quarter of 2016. Excluding U.S. Orbera starter kit sales, U.S. Endo-bariatric product sales increased 8%, or $0.2 million for the fourth quarter of 2017 due to higher physician adoption and utilization of OverStitch products.
Total Surgical product sales in the fourth quarter 2017 were $6.2 million, a decrease of just under 20%, compared to $7.6 million in the fourth quarter of 2016. Total OUS Surgical sales decreased 12% to $2.1 million for the fourth quarter of 2017 compared to $2.3 million for the fourth quarter of 2016. In the U.S., Surgical sales decreased 23% to $4.1 million for the fourth quarter of 2017 compared to $5.3 million for the fourth quarter of 2016.
Gross margin for the fourth quarter of 2017 was 58%, compared to 62% for the fourth quarter of 2016 as a result of a greater proportion of our overall product sales coming from our Endo-bariatric products, which realize a lower gross margin than our Surgical products. Additionally, the mix of Apollo manufactured products sold increased in the fourth quarter of 2017 resulting in more overhead charged as cost of goods sold compared to the fourth quarter of 2016 when we were depleting the inventory we purchased as part of the planned transition from Allergan to Apollo. We expect gross margin to improve as we complete certain identified Endo-bariatric product gross margin improvement projects and improve capacity utilization of our manufacturing facility over the next two years.
Total operating expenses were $15.2 million in the fourth quarter of 2017, compared to $17.2 million in the fourth quarter of 2016 primarily due to decreased general and administrative expenses related to transaction costs incurred in the fourth quarter of 2016 associated with the Lpath merger.

Interest expense for the fourth quarter of 2017 decreased $10.3 million when compared to the fourth quarter of 2016. This decline was largely due to non-cash charges associated with convertible notes that were exchanged for common stock in connection with the Lpath merger in the fourth quarter of 2016.
Net loss for the fourth quarter 2017 was $7.3 million compared to $19.7 million for the fourth quarter 2016.
Full Year 2017 Financial Results
Total revenues for 2017 were $64.3 million, compared to $64.7 million in 2016.
Total Endo-bariatric sales increased 13% to $35.9 million in 2017, compared to $31.9 million in 2016, comprising 56% of total revenue in 2017 compared to 49% in 2016. Excluding U.S. Orbera starter kit sales, total Endo-bariatric sales increased 27% for the year. Total OUS Endo-bariatric product sales increased 32%, or $5.2 million in 2017 compared to 2016, primarily due to higher OverStitch sales in our direct markets. OUS direct market sales were 69% of total OUS Endo-bariatric product sales in 2017 compared to 65% for 2016. U.S. Endo-bariatric product sales for 2017 decreased 8%, or $1.2 million when compared to 2016. Excluding U.S. Orbera starter kit sales, U.S. Endo-bariatric product sales increased 20%, or $2.3 million in 2017 primarily due to higher OverStitch product sales and higher Orbera product sales from the first half of 2017.
Total Surgical product sales in 2017 were $27.6 million, a decrease of 15%, compared to $32.3 million in 2016. Total OUS Surgical product sales decreased 5% to $10.2 million in 2017 compared to $10.7 million in 2016. In the U.S. Surgical sales decreased 20% to $17.4 million in 2017 compared to $21.6 million in 2016.
Gross margin increased to 62% for 2017 from 61% in 2016. Cost of sales included inventory impairment charges of $0.7 million and $3.8 million for 2017 and 2016, respectively. In 2016, we recorded an inventory impairment charge related to expiring finished good inventory and excess raw materials transferred from Allergan as required under the transition services agreement. Excluding inventory impairment charges, gross margin was 63% for 2017 and 67% for 2016. This lower gross margin, excluding the impact of inventory impairment charges, is due to the ongoing shift in our product sales mix from higher margin Surgical products to Endo-bariatric products that realize lower relative gross margins and the shift in the mix of Apollo manufactured products sold as discussed above in fourth quarter results.
Total operating expenses were $62.2 million in 2017, compared to $60.2 million in 2016 primarily due to higher sales and marketing expenses associated with our Endo-bariatric product sales growth.
Interest expense decreased $13.7 million in 2017, compared to 2016 mainly due to the elimination of non-cash charges associated with the convertible notes that were exchanged for common stock.
Net loss for 2017 was $27.3 million compared to $41.2 million for 2016.
Cash, cash equivalents and restricted cash were $31.4 million as of December 31, 2017.
Capitalization Update
On December 4, 2017, we filed a registration statement on Form S-3 to offer and sell up to a maximum amount of $50.0 million of common stock and entered a sales agreement to sell up to $16.0 million of shares of those shares in an "at-the-market" program.
Conference Call
Apollo will host a conference call on Thursday, March 1, 2018 at 3:30 p.m. Central Time / 4:30 p.m. Eastern Time to discuss Apollo’s operating results for the fourth quarter and year ended December 31, 2017.
To participate in the conference call dial (888) 394-8218 for domestic callers and (323) 701-0225 for international callers. The conference ID number is 8902763. A live webcast of the conference call will be made available on the "Events and Presentations" section of our Investor Relations website: www.ir.apolloendo.com.
A replay of the webcast will remain available on Apollo’s website, www.apolloendo.com, until Apollo releases its first quarter 2018 financial results. In addition, a telephonic replay of the call will be available until March 8, 2018. The replay dial-in numbers are (844) 512-2921 for domestic callers and (412) 317-6671 for international callers. The replay conference ID number is 8902763. A transcript of the earnings call will be made available on the "Events and Presentations" section of our Investor Relations website: www.ir.apolloendo.com.

Non-GAAP Financial Measures
To supplement to our financial results we are providing a non-GAAP financial measure, adjusted total revenues which exclude U.S. Orbera starter kit sales. This supplemental measure of our performance is not required by, and is not determined in accordance with, GAAP.
Non-GAAP financial information is not a substitute for any financial measure determined in accordance with GAAP and should be read only in conjunction with Apollo’s condensed consolidated financial statements prepared in accordance with GAAP. Apollo’s management uses certain supplemental non-GAAP financial measures internally to understand, manage and evaluate Apollo’s business, and make operating decisions. Reconciliations for each non-GAAP financial measure to its most directly comparable GAAP financial measure is provided in the tables below. Management believes that making non-GAAP financial information available to investors, in addition to GAAP financial information, may facilitate more consistent comparisons between the company’s performance over time with the performance of other companies in the medical device industry, which may use similar financial measures to supplement their GAAP financial information.