On November 8, 2018 Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH / TSX:AUP) ("Aurinia" or the "Company") reported that it has released its financial results for the third quarter ended September 30, 2018. Amounts, unless specified otherwise, are expressed in U.S. dollars (Press release, Aurinia Pharmaceuticals, NOV 8, 2018, View Source [SID1234531051]).

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"We achieved a significant milestone in September with the completion of enrollment for the AURORA Phase III trial ahead of schedule. Our target enrollment of 324 patients was surpassed due to high patient demand with 358 LN patients randomized in sites across 27 countries." said Richard M. Glickman, Aurinia’s CEO and Chairman of the Board. "I continue to be impressed by our clinical team which has delivered on our important milestones, and to that end, I am pleased to announce enrollment for the phase II dry eye trial will be completed in the next couple of days, and we expect top-line data in January 2019."

Clinical Highlights

Our Phase III clinical trial ("AURORA") to evaluate voclosporin for the treatment of lupus nephritis ("LN"), which we initiated in May of 2017, completed enrollment in September 2018. We expect top-line data to be available in late 2019.
A significant percentage of patients who have completed the AURORA trial are rolling over into the AURORA 2 blinded extension study ("AURORA 2") from the AURORA Phase III clinical trial. The purpose of AURORA 2 is to assess the long-term benefit/risk of voclosporin in patients with LN; however, this study is not a requirement for potential regulatory approval for voclosporin.
We initiated a Phase II head-to-head tolerability study of voclosporin ophthalmic solution ("VOS") versus Restasis (cyclosporine ophthalmic emulsion) 0.05% for the treatment of Dry Eye Syndrome ("DES") in July 2018, and full enrollment is anticipated imminently. This four-week study of approximately 90 patients is expected to complete by the end of 2018 with data available in January 2019. We believe calcineurin inhibitors ("CNIs") are a mainstay of treatment for DES, and the goal of this program is to develop a best-in-class treatment option.
We also initiated a Phase II proof-of-concept study in focal segmental glomerulosclerosis ("FSGS") in June 2018 and are currently in the process of enrolling patients. This is an open-label study of 20 treatment naïve patients diagnosed with primary FSGS.
Corporate Development

Aurinia also announced today that Richard M. Glickman, the Company’s Chairman and Chief Executive Officer, intends to retire from his position once a suitable replacement is identified and appointed. The Board of Directors will retain a search firm and initiate a search for his successor.

"Richard is a gifted entrepreneur who has established Aurinia as a leading biotech company and shepherded it to its next phase of growth. On behalf of the Board of Directors, I want to thank him for his inspired leadership and significant contribution to both the Company and patient community since Aurinia’s inception in 2012," said George M. Milne Jr, Ph.D., Independent Director and Chairman of the Governance Committee. "Under his direction, the Company has delivered on all its key milestones and evolved into a patient-centric, late-stage clinical company with investigational drugs addressing multiple indications across the global immunology market."

"Two years ago – a critical time in the company’s growth – my decision to come out of retirement to join Aurinia as CEO was fueled by my absolute belief in the potential for voclosporin to transform the lupus nephritis treatment landscape," said Dr. Glickman. "I’m incredibly proud of Aurinia’s progress over the last 21 months, and I know this is the optimal time to bring in a new CEO who will build on our clinical success as we approach commercialization. My commitment to the Company and the patients it serves is steadfast, and I plan to remain a resource to the Board and management team as it enters its next chapter."

Financial Liquidity at September 30, 2018

At September 30, 2018, we had cash, cash equivalents and short term investments of $138.9 million compared to $150.2 million at June 30, 2018 and $173.5 million at December 31, 2017. Net cash used in operating activities was $11.3 million for the third quarter ended September 30, 2018 compared to $8.5 million for the third quarter ended September 30, 2017.

We believe that our cash position is sufficient to fund our existing LN program including the AURORA clinical trial, conduct our current studies in FSGS and DES, complete the work required for the NDA submission to the FDA, and fund operations into 2020.

Financial Results for the Three and Nine Months Ended September 30, 2018

We reported a consolidated net loss of $18.3 million or $0.21 per common share for the three months ended September 30, 2018, as compared to a consolidated net loss of $13.1 million or $0.16 per common share for the three months ended September 30, 2017.

The increase in the loss for the three months ended September 30, 2018 compared to the same period in 2017 was primarily due to the non-cash change of $5.2 million in the estimated fair value of derivative warrant liabilities. The three months ended September 30, 2018 reflected a $4.8 million increase in the estimated fair value of derivative warrant liabilities compared to a reduction of $355,000 in the estimated fair value of derivative warrant liabilities for the three months ended September 30, 2017. The change in the revaluation of the derivative warrant liabilities is primarily driven by the change in our share price at each period end. An increase in our share price results in an increase in the estimated fair value of derivative warrant liabilities and vice versa. The derivative warrant liabilities will ultimately be eliminated on the exercise or forfeiture of the warrants and will not result in any cash outlay by the Company.

The net loss before the non-cash change in estimated fair value of derivative warrant liabilities was $13.5 million for the three months ended September 30, 2018 compared to $13.5 million for the same period in 2017.

For the nine months ended September 30, 2018, the consolidated net loss was $49.5 million or $0.59 per common share compared to a consolidated net loss of $67.5 million or $0.91 per common share for the comparable period in 2017. For the nine months ended September 30, 2018 we recorded an increase of $9.4 million in the estimated fair value of derivative warrant liabilities compared to $32.9 million for the comparable period in 2017.

The net loss before the non-cash change in estimated fair value of derivative warrant liabilities was $40.1 million for the nine months ended September 30, 2018 compared to $34.5 million for the same period in 2017. The increased loss was primarily due to higher research and development expenses.

Research and development expenses increased to $11.2 million for the three months ended September 30, 2018, compared to $10.8 million for the three months ended September 30, 2017. We incurred research and development expenses of $30.5 million for the nine months ended September 30, 2018, as compared to $25.2 million for the same period in 2017. The increased research and development expenses reflected costs associated with the commencements of AURORA 2 and the FSGS and DES studies.

Corporate, administration and business development expenses increased to $2.9 million for the three months ended September 30, 2018, compared to $2.7 million for the same period in 2017. We incurred corporate, administration and business development expenses of $10.2 million for the nine months ended September 30, 2018 compared to $9.0 million for the comparable period in 2017. The increase was due primarily to higher non-cash stock compensation expense in 2018 compared to the same periods in 2017.

This press release should be read in conjunction with our unaudited interim condensed consolidated financial statements and the MD&A for the third quarter ended September 30, 2018 which are accessible on Aurinia’s website at www.auriniapharma.com, on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.

Aurinia will host a conference call and webcast to discuss third quarter 2018 financial results today, Thursday, November 8, 2018 at 4:30 p.m. ET. This event can be accessed on the investor section of the Aurinia website at www.aurinia.com.

On November 8, 2018 Sorrento Therapeutics, Inc. (NASDAQ: SRNE), a clinical-stage immunotherapy biotech company, reported the closing of a debt financing for up to $150 million (Press release, Sorrento Therapeutics, NOV 8, 2018, View Source [SID1234531151]). The financing is being provided by funds and accounts managed by Oaktree Capital Management, L.P. ("Oaktree"), a leading global investment firm. An affiliate of Oaktree is the sole administrative agent and collateral agent for the financing and Morgan Stanley & Co. LLC served as the sole placement agent for the transaction.

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"With this financing, we believe we now have adequate funding for up to the next two years, enabling us to bring several of our key clinical programs in the CAR-T and non-opioid pain management space to FDA approvals and potential commercialization", said Henry Ji, Ph.D., Chairman, President and Chief Executive Officer. "Additionally, with encouraging data readout from our ongoing Anti-CEA trial for liver metastases among pancreatic cancer patients and our recently initiated Anti-CD38 CAR-T trial for multiple myeloma cancer patients, we are optimistic about potential collaborations with strategic partners."

Building off its industry-leading fully human antibody G-MAB library, a wide array of innovative technologies such as the Sofusa lymphatics delivery system, and multi-site multi-modality cGMP facilities, Sorrento continues to expand and advance its robust clinical product pipeline.

The financing is a senior secured five-year term loan, with the first tranche of $100 million already funded and an additional tranche of $50 million available subject to Sorrento’s achievement of certain business milestones in the next nine to twelve months.

On November 8, 2018 MEI Pharma, Inc. (NASDAQ: MEIP), a late-stage pharmaceutical company focused on advancing new therapies for cancer, reported results for its first quarter ended September 30, 2018 (Press release, MEI Pharma, NOV 8, 2018, View Source [SID1234531199]).

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"Fiscal 2019 is off to a strong start both financially and strategically, with more than $90 million in cash and investments on our balance sheet at the start of the quarter, $10 million additional cash due under the recently executed Japan licensing agreement with Kyowa Hakko Kirin, a new clinical collaboration with BeiGene, and progress in preparations to start the ME-401 Phase 2 study around year-end," said Daniel P. Gold, Ph.D., president and chief executive officer of MEI Pharma. "With the planned start of the ME-401 Phase 2 study, we will have two ongoing clinical trials with the potential to support FDA marketing approval."

Dr. Gold continued: "We are also excited by our continued progress in the other programs across our pipeline, including interim data from the Phase 2 study of pracinostat in MDS, the evaluation of our CDK9 inhibitor, voruciclib, in B-cell malignancies and data from the investigator-initiated study of ME-344 in breast cancer."

Recent Program Highlights and Upcoming Milestones

Upcoming Milestones

MEI will present data from three clinical stage drug development programs at the 2018 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting to be held December 1-4, 2018 in San Diego:
Updated results from the Phase 1b study evaluating ME-401 in relapsed/refractory follicular lymphoma (FL) and other indolent B-cell malignancies.
Data from an interim analysis of pracinostat in an ongoing Phase 2 study evaluating patients with high/very high-risk myelodysplastic syndrome (MDS).
Results from a preclinical study demonstrating that voruciclib and venetoclax synergistically induce apoptosis in acute myeloid leukemia (AML) cells in vitro.
MEI plans to initiate the Phase 2 study to support accelerated approval of ME-401 in relapsed or refractory FL around year-end of calendar 2018.
MEI expects to report updates regarding the ongoing voruciclib Phase 1 study at medical meetings in 2019.
MEI expects to report additional data from the investigator-sponsored Phase 1 study evaluating ME-344 at medical meetings in 2019.
Clinical Development Highlights

In October 2018, MEI announced a clinical collaboration to evaluate the safety and efficacy of MEI’s ME-401, an investigational phosphatidylinositol 3-kinase (PI3K) delta inhibitor, in combination with BeiGene’s zanubrutinib, an investigational Bruton’s tyrosine kinase (BTK) inhibitor, for the treatment of patients with B-cell malignancies.
In July 2018, the Company discussed with FDA a ME-401 monotherapy accelerated approval strategy in patients with relapsed or refractory FL. Informed by the discussions with the FDA, the Company is advancing ME-401 into a Phase 2, single-agent study for the treatment of adults with relapsed or refractory FL. The Phase 2 study is intended to support accelerated approval and is planned to begin around the end of 2018. Accelerated approval of ME-401 will be subject to FDA review of the improvement provided by ME-401 over other therapies available at the time of the regulatory action.
Corporate Highlights

In November 2018, MEI announced the execution of a license development and commercialization agreement granting Kyowa Hakko Kirin exclusive rights to develop and commercialize ME-401 in Japan. Under the terms of the agreement, MEI will receive a $10.0 million upfront payment and is eligible to receive up to $87.5M in additional development and commercialization milestones, and royalties on sales.
In July 2018, the Company announced that David M. Urso, J.D., senior vice president of corporate development and general counsel, was promoted to chief operating officer. Mr. Urso is also continuing as the Company’s general counsel and head of corporate development.
Financial Highlights

As of September 30, 2018, MEI had $90.8 million in cash, cash equivalents and short-term investments, with no outstanding debt. Additionally, a $10 million upfront payment is due under the Japan license agreement executed with Kyowa Hakko Kirin.
Research and development expenses were $6.1 million for the quarter ended September 30, 2018, compared to $6.1 million for the same period in 2017. Research and development expenses reflect increased costs for the development of ME-401, offset by a reduction in expenses related to voruciclib, as the prior year amounts included acquisition costs for voruciclib.
General and administrative expenses were $3.4 million for the quarter ended September 30, 2018, compared to $2.5 million for the same period in 2017. The increase primarily relates to professional services expenses, share-based compensation, and general corporate expenses.
The Company recognized revenues of $0.5 million for the quarter ended September 30, 2018, compared to $0.3 million for the same period in 2017. The increase is related to higher levels of research and development activities performed pursuant to the Helsinn license agreement.
Net loss for the quarter ended September 30, 2018, was $14.5 million, or $0.21 per share compared $8.8 million, or $0.24 per share for the same period in 2017. The Company had 71,115,444 shares of common stock outstanding as of September 30, 2018, compared with 36,950,177 shares as of September 30, 2017.
The adjusted net loss, excluding non-cash expenses related to changes in the fair value of the warrants issued in connection with the May 2018 financing (a non-GAAP measure) for the quarter ended September 30, 2018, was $9.6 million, or $0.14 per share.
Cash expenditures for operating activities were $12.8 million for the quarter ended September 30, 2018, compared to $6.6 million for 2017. The increase in cash used for the three months ended September 30, 2018 primarily relates to changes in working capital associated with our clinical development programs, including start-up costs related to the ME-401 Phase 2 accelerated approval study.

On November 8, 2018 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported financial results for the three and nine months ended September 30, 2018, and provided an operating forecast and program updates (Press release, Ligand, NOV 8, 2018, View Source [SID1234530958]). Ligand management will host a conference call today beginning at 9:00 a.m. Eastern time to discuss this announcement and answer questions.

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"This quarter was marked by several events that demonstrate the strength of Ligand’s business model. First, our partners continued to deliver solid commercial and clinical development results. Specifically, sales of Promacta hit an all-time quarterly high and our partner Viking Therapeutics announced positive topline results for its Phase 2 trial of VK2809, with the potential for efficacy in patients with liver diseases such as non-alcoholic fatty liver disease and NASH. Additionally, we closed the acquisition of Vernalis in October, which provides several high-value shots on goal, as well as a top-notch R&D team, all for a modest cash outlay," said John Higgins, Chief Executive Officer of Ligand. "Despite the recent turbulence in the financial markets, Ligand continues to execute on its business model, and we will remain focused and will work to capitalize on opportunities the economic cycle brings us."

Third Quarter 2018 Financial Results

Total revenues for the third quarter of 2018 were $45.7 million, compared with $33.4 million for the same period in 2017. Royalties were $36.1 million, compared with $21.9 million for the third quarter of 2017 and $28.3 million for the fourth quarter of 2017. Under the new accounting standard ASC 606, adopted as of the start of 2018, third quarter 2018 royalties should be compared with fourth quarter 2017 royalties due to the timing of revenue recognition. Third quarter 2018 royalties primarily consisted of royalties from Promacta, Kyprolis and EVOMELA. Material sales were $7.0 million, compared with $7.7 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 $2.5 million, compared with $3.8 million for the same period in 2017.

Cost of goods sold was $1.5 million for the third quarter of 2018, compared with $2.4 million for the same period in 2017. Amortization of intangibles was $5.7 million, compared with $2.7 million for the same period in 2017, due to recent acquisitions and amortization of R&D assets that were out-licensed or impaired. Research and development expense was $5.5 million, compared with $4.8 million for the same period of 2017. General and administrative expense was $9.6 million, compared with $7.0 million for the same period in 2017.

GAAP net income for the third quarter of 2018 was $67.4 million, or $2.80 per diluted share, compared with $8.4 million, or $0.36 per diluted share, for the same period in 2017. Net income for the third quarter of 2018 was impacted by a non-cash gain due to the marking of Ligand’s investment in Viking Therapeutics to market. Adjusted net income for the third quarter of 2018 was $31.7 million, or $1.32 per diluted share, compared with $15.3 million, or $0.69 per diluted share, for the same period in 2017.

As of September 30, 2018, Ligand had cash, cash equivalents, restricted cash and short-term investments of approximately $1 billion. Cash generated from operations during the third quarter of 2018 was $27.1 million.

Year-to-Date Financial Results

Total revenues for the nine months ended September 30, 2018 were $191.9 million, compared with $90.6 million for the same period in 2017. Royalties were $88.3 million, compared with $60.4 million for the nine months ended September 30, 2017 and $64.5 million for the nine months ended December 31, 2017. Under ASC 606, royalties for the nine months ended September 30, 2018 should be compared with royalties for the nine months ended December 31, 2017 due to the timing of revenue recognition. Royalties for the nine months ended September 30, 2018 primarily consisted of royalties from Promacta, Kyprolis and EVOMELA. Material sales were $19.0 million, compared with $14.3 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 $84.5 million, compared with $15.9 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 a $20 million upfront payment upon the licensing of Ligand’s GRA program.

Cost of goods sold was $3.4 million for the nine months ended September 30, 2018, compared with $3.6 million for the same period in 2017 due to the timing and mix of Captisol sales. Amortization of intangibles was $12.3 million, compared with $8.1 million for the same period in 2017, due to recent acquisitions and amortization of R&D assets that were out-licensed or impaired. Research and development expense was $19.0, compared with $18.3 million for the same period in 2017. General and administrative expense was $26.6 million, compared with $20.9 million for the same period in 2017.

GAAP net income for the nine months ended September 30, 2018 was $185.8 million, or $7.61 per diluted share, compared with $19.6 million, or $0.84 per diluted share, for the same period in 2017. Net income for the nine months ended September 30, 2018 was impacted by a non-cash gain due to the marking of Ligand’s investment in Viking Therapeutics to market. Adjusted net income for the nine months ended September 30, 2018 was $127.9 million, or $5.44 per diluted share, compared with $42.9 million, or $1.94 per diluted share, for the same period in 2017.

2018 Financial Guidance

Ligand is raising its previous guidance for 2018 and now expects revenue to be approximately $240 million, including royalties of approximately $122 million, material sales of approximately $25 million and license fees and milestones of approximately $93 million, with the potential for up to an additional $5 million in license fees and milestones. Ligand notes that with revenue of $240 million, adjusted earnings per diluted share would be approximately $6.52.

This compares with 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, and adjusted earnings per diluted share of approximately $6.30.

Third Quarter 2018 and Recent Business Highlights

Promacta/Revolade

Novartis reported third quarter 2018 net sales of Promacta/Revolade (eltrombopag) of $295 million, a $68 million or 30% increase over the same period in 2017.
Novartis presented data from a Phase 4 open-label study of Promacta in the treatment of Chronic Immune Thrombocytopenia at the European Congress on Thrombosis and Haemostasis 2018.
Novartis announced that Promacta would be highlighted at the 60th American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting in December 2018.
Kyprolis (carfilzomib), an Amgen Product Utilizing Captisol

On October 30, 2018, Amgen reported third quarter net sales of Kyprolis of $232 million, a $25 million or 12% increase over the same period in 2017. On October 31, 2018, Ono Pharmaceutical reported Kyprolis sales in Japan of approximately $11 million for the most recent quarter.
On October 1, 2018, Amgen announced that the FDA approved the supplemental New Drug Application (sNDA) to expand the prescribing information for Kyprolis to include a once-weekly dosing option in combination with dexamethasone for patients with relapsed or refractory multiple myeloma.
On November 1, 2018, Amgen announced that new clinical data will be presented at the 60th ASH (Free ASH Whitepaper) annual meeting in December 2018 for Kyprolis and AMG-330.
Recent Acquisitions

Ligand announced the acquisition of Vernalis plc, a structure-based drug discovery biotechnology company with a broad pipeline of partnered programs and ongoing collaborations, for $43 million in cash, which was mostly offset by approximately $32 million of cash on hand at Vernalis after deal fees. The acquisition of Vernalis provides Ligand with more than eight fully-funded shots on goal, a 70-person R&D team based in Cambridge, England with a portfolio of ongoing collaboration agreements that have the potential to create additional shots on goal, a compound library of unpartnered programs for potential business development out-licensing and England-based operations that provide a platform to help efficiently pursue investment and acquisition activities in Europe and the United Kingdom.
Additional Pipeline and Partner Developments

Viking Therapeutics announced positive topline results from a 12-week Phase 2 study of VK2809 in patients with non-alcoholic fatty liver disease, which demonstrated statistically significant reductions in low-density lipoprotein cholesterol and statistically significant reductions in liver fat content, and that the study results would be presented in an oral late-breaker presentation at The Liver Meeting 2018.
Viking Therapeutics announced that results from its Phase 2 study of VK5211 in patients recovering from hip fracture were presented at the American Society for Bone and Mineral Research 2018 annual meeting.
Sage Therapeutics announced that the FDA Psychopharmacologic Drugs Advisory Committee and Drug Safety and Risk Management Advisory Committee jointly voted that data support the favorable benefit-risk profile of Zulresso injection for the treatment of postpartum depression (PPD).
Sage Therapeutics announced The Lancet published an integrated analysis across three double-blind, randomized, placebo-controlled studies of Zulresso injection in women with PPD, demonstrating significant and clinically meaningful reductions in HAM-D total score.
Melinta Therapeutics announced positive topline results from its Phase 3 trial of Baxdela for the treatment of adult patients with community-acquired bacterial pneumonia.
Retrophin announced presentation of new data examining the long-term effects of sparsentan in focal segmental glomerulosclerosis (FSGS) at the American Society of Nephrology Kidney Week 2018, and that the Journal of the American Society of Nephrology published online the positive results from Retrophin’s Phase 2 DUET study of sparsentan for the treatment of FSGS.
Retrophin announced two presentations related to sparsentan in the treatment of IgA Nephropathy during the 15th International Symposium on IgA Nephropathy.
Verona Pharma announced that it had enrolled the last patient in its Phase 2 clinical trial evaluating the effect of nebulized RPL554 as an add-on to dual therapy using long-acting anti-muscarinic / long-acting beta2-agonists and triple therapy in the maintenance treatment of patients with moderate to severe chronic obstructive pulmonary disease.
Aldeyra Therapeutics announced positive results from its Phase 2b clinical trial of topical ocular reproxalap in patients with dry eye disease demonstrating statistically significant reductions in the Four-Symptom Ocular Dryness Score and the Overall Ocular Discomfort Symptom Score.
Sermonix Pharmaceuticals announced the initiation of a 100-patient Phase 2 trial of oral lasofoxifene for the treatment of metastatic breast cancer.
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 presented Phase 1/2a data of OPT-302 in wet age-related macular degeneration (AMD) at the Retina Society 2018 annual meeting.
Corvus Pharmaceuticals announced the publication of results of preclinical studies of CPI-444 demonstrating that it induces dose-dependent antitumor responses as a monotherapy and in combination with anti-PD-1, anti-PD-L1 and anti-CTLA-4 therapies.
Corvus Pharmaceuticals announced new data on a biomarker associated with patient response to therapy with CPI-444, an adenosine receptor antagonist at the European Society for Medical Oncology 2018 Congress.
OmniAb partner Arcus Biosciences announced that abstracts relating to its portfolio have been accepted for poster presentation at the Society for Immunotherapy of Cancer (SITC) (Free SITC 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.
Roivant announced that OmniAb-derived RVT-1401 (previously HL161) will form the foundation of a new company called Immunovant.
Business Development

Ligand announced an OmniAb platform license agreement with the Fred Hutchinson Cancer Research Center (Fred Hutch) to use the OmniAb rodent platform technologies to discover fully human antibodies. Ligand is eligible to receive a defined share of revenue received by Fred Hutch from companies that commercialize products incorporating any such OmniAb-derived antibody.
Ligand entered into a Captisol use agreement with Sunshine Lake Pharma.
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 share-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, share-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 9:00 a.m. Eastern time (6:00 a.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 5777841. To participate via live or replay webcast, a link is available at www.ligand.com.

On November 8, 2018 Scholar Rock Holding Corporation (NASDAQ: SRRK), a clinical-stage biopharmaceutical company focused on the treatment of serious diseases in which protein growth factors play a fundamental role, reported financial results for the third quarter ended September 30, 2018 and highlighted recent progress and upcoming milestones for its pipeline programs (Filing, 8-K, Scholar Rock, NOV 8, 2018, View Source [SID1234530987]).

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"We continue to make important progress with our pipeline having now completed enrollment in the multiple ascending dose portion of the ongoing Phase 1 clinical trial for SRK-015 with interim results and the initiation of a Phase 2 proof-of-concept study in patients with Spinal Muscular Atrophy (SMA) expected in the first quarter of 2019," said Nagesh Mahanthappa, Ph.D, President and CEO of Scholar Rock. "We also look forward to our upcoming presentation of preclinical data at the SITC (Free SITC Whitepaper) annual meeting that will demonstrate the ability of a highly specific inhibitor of TGFβ1 to render resistant solid tumors vulnerable to anti-PD1 while minimizing the toxicities traditionally associated with pan-TGFβ inhibitors."

Key R&D Highlights and Upcoming Milestones

SRK-015 Program:

Completed Enrollment in Multiple Ascending Dose Portion of Phase 1 Clinical Trial for SRK-015 with Interim Results Expected the First Quarter of 2019. A placebo-controlled, double-blind Phase 1 clinical trial was initiated in May 2018 to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of single and multiple ascending doses of intravenous SRK-015, a selective inhibitor of the activation of myostatin, in healthy adult volunteers. Enrollment in the single ascending dose and multiple ascending dose portions of the trial have been completed. Interim results from this ongoing Phase 1 trial are expected in the first quarter of 2019.
Plan to Initiate Phase 2 Proof-of-Concept Study for SRK-015 in SMA in the First Quarter of 2019. Pending supportive safety data from the Phase 1 clinical trial, Scholar Rock plans to initiate a Phase 2 proof-of-concept study in the first quarter of 2019 to evaluate the safety and efficacy of SRK-015 in patients with SMA as a monotherapy or in conjunction with an approved survival motor neuron (SMN) upregulator therapy as background standard of care.
Plan to Identify Second Indication for SRK-015 in the First Half of 2019. Scholar Rock is actively assessing numerous potential clinical settings in which the selective inhibition of the activation of myostatin may offer therapeutic benefit and intends to identify a second indication for SRK-015 in the first half of 2019.
TGFβ1 Program:

Presenting Preclinical Data at Upcoming SITC (Free SITC Whitepaper) Annual Meeting Highlighting the Role of TGFβ1 Inhibition in Overcoming Primary Resistance to Anti-PD1. At the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper)’s (SITC) (Free SITC Whitepaper) 33rd Annual Meeting being held November 9-11, 2018, Scholar Rock will be presenting preclinical results demonstrating the ability of a highly specific inhibitor of TGFβ1, SRTβ1-Ab3, to render tumors vulnerable to checkpoint blockade therapy in syngeneic tumor models of primary resistance (Poster #550). Combination treatment with SRTβ1-Ab3 and anti-PD1 resulted in tumor regression or tumor control, and a significant survival benefit, while minimizing toxicities traditionally associated with pan-TGFβ inhibitors.
Plan to Nominate Product Candidate for TGFβ1 Program by the End of the First Half of 2019. Scholar Rock’s second antibody program is focused on the development of highly specific inhibitors of the activation of TGFβ1, and the company intends to nominate a product candidate and first indication in oncology, immuno-oncology or fibrosis by the end of the first half of 2019.
Third Quarter 2018 Financial Results

Net loss for the quarter ended September 30, 2018 was $10.8 million or $0.44 per share compared to a net loss of $5.9 million or $3.70 per unit for the same quarter last year.

Research and development expense was $8.1 million for the quarter ended September 30, 2018, compared to $4.8 million in the same quarter in 2017. The $3.3 million increase year-over-year reflects development and manufacturing costs associated with lead product candidate, SRK-015, research costs associated with preclinical studies, as well as increased personnel-related costs to support continued progress with the pipeline.
General and administrative expense was $3.2 million for the quarter ended September 30, 2018, compared to $1.2 million in the same quarter in 2017. The $2.0 million increase year-over-year was primarily attributable to increased headcount and higher professional and consulting fees associated with ongoing business activities and operating as a public company.
As of September 30, 2018, Scholar Rock had cash, cash equivalents, and marketable securities of $104.0 million, compared to $58.0 million at the end of 2017. Scholar Rock believes its cash and cash equivalents balance will be sufficient to fund operating expenses and capital expenditure requirements into the second half of 2020.