On November 9, 2017 ArQule, Inc. (Nasdaq: ARQL) reported its financial results for the third quarter of 2017 (Press release, ArQule, NOV 9, 2017, View Source [SID1234521832]).

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For the quarter ended September 30, 2017, the Company reported a net loss of $6,666,000 or $0.09 per share, compared with a net loss of $5,817,000 or $0.08 per share, for the third quarter of 2016. For the nine-month period ended September 30, 2017, the Company reported a net loss of $21,443,000 or $0.30 per share, compared with a net loss of $15,898,000 or $0.23 per share, for the nine-month period ended September 30, 2016.

At September 30, 2017, the Company had a total of approximately $27,603,000 in cash, equivalents and marketable securities. In October and November 2017, the Company raised approximately $25 million in net proceeds from two equity offerings.

Key Highlights

Miransertib (ARQ 092), lead AKT inhibitor, has met its primary endpoint of determining a biologically active dose in a phase 1 trial for Proteus syndrome lead by the National Human Genome Research Institute (NHGRI) of the National Institutes of Health (NIH). The NIH presented preliminary data from the ongoing phase 1 clinical trial for Proteus syndrome at the Proteus Syndrome Foundation Family Conference in September 2017. In five of the six patients, a reduction of a least 50% of phospho-AKT levels was reported. This met the primary objective of the study. Most significantly the NIH observed disease modification in the cerebriform connective tissue nevus (CCTN) lesions which are considered one of the hallmarks of the disease.
Miransertib was granted by the U.S. Food and Drug Administration (FDA) Rare Pediatric Disease Designation. Under the FDA’s rare pediatric disease priority review voucher program, the sponsor may be eligible for a voucher that can be used to obtain a priority review for a subsequent human drug application.
Miransertib continues to dose in the phase 1/2 trial for Overgrowth Diseases driven by PI3K and AKT mutations and opened its first U.S. clinical trial site. This trial is part of the company’s continued progress towards expanding its rare disease strategy in Overgrowth Diseases.
ARQ 531, an orally bioavailable, potent and reversible BTK inhibitor, continues dosing as planned in a phase 1a/b trial. The trial is enrolling patients with B-cell malignancies, including B-cell lymphomas, chronic lymphocytic leukemia, and Waldenstrom’s macroglobulinemia, who are refractory to other therapeutic options, including ibrutinib. Up to 120 patients can be enrolled in the trial.
Derazantinib (ARQ 087), a pan-FGFR inhibitor, in a registrational trial in FGFR2 fusion positive second-line intrahepatic cholangiocarcinoma (iCCA) is recruiting with six active sites in the U.S. The trial is planned to enroll up to 100 iCCA patients and provides an opportunity for a conditional approval as part of a fast-to-market strategy and includes an interim analysis that will be performed after the first 40 patients have been enrolled and evaluated for response.
Company raised approximately $29 million in capital through a private placement of $15.7 million of common stock, a private placement of $9.5 million of convertible preferred stock and an additional $4 million through unrelated business development activities and other sources. Net proceeds will be used to advance ArQule’s proprietary pipeline and for general business purposes, including working capital.
"The ArQule clinical pipeline is the strongest it has ever been, and the most recent positive developments are the compelling clinical data in Proteus syndrome and the granting of Rare Pediatric Disease Designation for miransertib in this indication," said Paolo Pucci, Chief Executive Officer of ArQule. "We are now well capitalized to see our pipeline assets through major inflection points."

"Based on the preliminary results from the phase 1 NIH-sponsored Proteus syndrome trial, miransertib is the first drug to demonstrate activity and achieve clinical proof of concept in this indication," said Dr. Brian Schwartz, M.D., Head of Research and Development and Chief Medical Officer at ArQule. "We are thankful to the NIH for their work in identifying the mutation driving the disease, conducting the first clinical trial and ultimately identifying potential clinical endpoints. We plan to engage regulatory authorities to define a clinical path to registration in this indication. In parallel and consistent with the regulatory interactions we will continue to enroll in our ongoing phase 1/2 trial in Overgrowth Diseases driven by mutations in the PI3K or AKT pathway, including Proteus syndrome, and provide the drug under compassionate policy."

Revenues and Expenses

Revenues for the quarter ended September 30, 2017, were zero compared with revenues of $1,223,000 for the quarter ended September 30, 2016. Revenues in the nine-months ended September 30, 2017 were zero compared with revenues of $3,522,000 in the nine-months ended September 30, 2016. Revenue in the three and nine-month periods of 2016 is comprised of revenue from the Daiichi Sankyo tivantinib development agreement and the Kyowa Hakko Kirin exclusive license agreement. No further revenue is anticipated from these agreements.

Research and development expense in the third quarter of 2017 was $4,570,000, compared with $5,265,000 for the third quarter of 2016. Research and development expense decreased $0.7 million in the third quarter of 2017 primarily due to lower outsourced preclinical, clinical and product development costs.

Research and development expense in the nine-months ended September 30, 2017 was $14,747,000 compared with $13,800,000 in the nine-months ended September 30, 2016. The $0.9 million increase in research and development expense in the nine-months ended September 30, 2017 was primarily due to higher outsourced clinical and product development costs.

General and administrative expense was $1,762,000 in the third quarter of 2017 compared with $1,824,000 in the third quarter 2016.

General and administrative expense was $5,702,000 in the nine-months ended September 30, 2017 compared with $5,755,000 in the nine-months ended September 30, 2016.

2017 Financial Guidance

As a result of ArQule’s recent stock offerings and business development activities the company is updating 2017 guidance. For 2017, ArQule expects net use of cash to range between $25 and $27 million. Net loss is expected to range between $28 and $30 million, net loss per share is expected to range between $(0.38) and $(0.40) for the year. ArQule expects to end 2017 with between $47 and $49 million in cash and marketable securities.

Conference Call and Webcast

ArQule will hold its third quarter 2017 financial results call today, November 9, 2017 at 9:00 a.m. ET. The live webcast can be accessed in the "Investors & Media" section of our website, www.arqule.com, under "Events & Presentations." You may also listen to the call by dialing (877) 868-1831 within the U.S. or (914) 495-8595 outside the U.S. A replay will be available two hours after the completion of the call and can be accessed in the "Investor and Media" section of our website, www.arqule.com, under "Events & Presentations."

On November 9, 2017 Immunomedics, Inc. (NASDAQ:IMMU) ("Immunomedics" or the "Company") reported financial results for the first quarter ended September 30, 2017 (Press release, Immunomedics, NOV 9, 2017, View Source [SID1234521872]). The Company also highlighted recent key progress and planned activities for its IMMU-132 development program. Please refer to the Company’s Quarterly Report on Form 10-Q filed today with the SEC for more detail on the Company’s financial results.

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Dr. Behzad Aghazadeh, Chairman of the Board of Directors, stated, "During the quarter and over the course of the year, we have made significant progress toward preparing a BLA for accelerated approval of IMMU-132, our breakthrough therapy candidate for the treatment of late-stage metastatic triple-negative breast cancer (mTNBC). IMMU-132 has shown a remarkable response rate in patients and we remain sharply focused on bringing this promising treatment to market as soon as possible. Notably, in the quarter, we completed a number of successful meetings with the FDA including a CMC and a pre-BLA meeting, where we received positive feedback on our proposed submission plans. As such, we remain on track to meet our stated goal of submitting our BLA filing in the first quarter."

In a separate release today, Immunomedics also announced that its Board of Directors has voted to appoint Michael Pehl as President and Chief Executive Officer ("CEO"), effective December 7, 2017. Mr. Pehl has also been appointed to the Board of Directors, effective as of the commencement date of Mr. Pehl’s employment. Immunomedics additionally announced that Brendan Delaney has been appointed Chief Commercial Officer ("CCO"), effective November 10, 2017. Michael Garone, current Chief Financial Officer ("CFO") and Interim CEO, will resume his role as CFO upon the commencement of Mr. Pehl’s tenure.

Dr. Aghazadeh added, "We are thrilled to have found in Mr. Pehl the right leader to guide the next phase of transformation for Immunomedics. His track record of successfully navigating the approval and commercialization of breakthrough oncology drugs is exemplary. Further, we are confident that we are adding someone with the strategic vision, operational expertise, execution ability, and capacity for communication across various stakeholders to help us maximize the value of IMMU-132 and the broader pipeline for both patients and investors.

"The addition of Mr. Delaney in the role of CCO is also a major step forward, as he is one of the top commercial leaders in the marketplace. His experience managing cross-functional teams and successfully launching high-value oncology drugs will be key as we continue the evolution of Immunomedics into a commercial-stage biotechnology company."

Mr. Pehl most recently served as President, Hematology & Oncology, at Celgene Corporation ("Celgene"), and prior to that was Head of Global Marketing for the Company in both the United States and in Europe. Mr. Delaney was most recently at Celgene where he served as Vice President, U.S. Commercial Hematology Oncology. For additional information on their backgrounds, the full release on their appointments can be found here: View Source

Recent Program Highlights for IMMU-132

In September, Immunomedics presented results of IMMU-132 in metastatic urothelial cancer who have relapsed or are refractory to chemotherapies and immune checkpoint inhibitors (IOs), at the European Society for Medical Oncology 2017 Congress (ESMO) (Free ESMO Whitepaper). The confirmed objective response rate (ORR) among 41 intention-to-treat patients was 34%, including two confirmed complete responses and 12 confirmed partial responses. For the 14 patients who progressed after prior IO therapy, the confirmed ORR was 29%.

In October, Immunomedics opened the ASCENT trial; the Phase 3 confirmatory trial of IMMU-132 in patients with mTNBC, and first patient has been dosed.

In November, the abstract on updated results from the Phase 2 study of IMMU-132 in patients with mTNBC was accepted for an oral presentation at the 2017 San Antonio Breast Cancer symposium (SABCS).

In November, a second abstract on the Phase 3 ASCENT trial design has also been accepted for poster presentation at the same SABCS conference.
Balance Sheet Improvement

On September 21, 2017, Immunomedics completed the exchange of $80 million in aggregate principal amount of our 4.75% Convertible Senior Notes due 2020 (Convertible Senior Notes) for newly issued shares of our common stock, pursuant to privately negotiated exchange agreements entered into between the Company and a limited number of holders of the Convertible Notes.
Litigation Update

On November 2, 2017, Immunomedics, venBio Select Advisor LLC, a Delaware limited liability company, Dr. David M. Goldenberg, a director of the Company and the Company’s Chief Scientific Officer and Chief Patent Officer, Ms. Cynthia L. Sullivan, a director of the Company and the Company’s former President and Chief Executive Officer, Mr. Brian A. Markison, a director of the Company, and Greenhill & Co., Inc. and Greenhill & Co., LLC, entered into a stipulation and agreement of settlement, compromise, and release (the "Settlement Agreement"). The terms and conditions of the Settlement Agreement reflect the terms and conditions of the binding settlement term sheet entered into on May 3, 2017, by and among the Company, venBio, Goldenberg, Sullivan and Markison, in order to resolve certain legal actions. Please refer to the Company’s Current Report on Form 8-K filed on November 8, 2017 with the SEC for more detail on the Settlement Agreement.

As part of the agreement, Dr. Goldenberg will remain a director of the Company while stepping down from his role as Chief Scientific Officer and Chief Patent Officer.
Dr. Aghazadeh added, "We would like to thank Dr. Goldenberg and Ms. Sullivan for all of their contributions and look forward to continuing to work with Dr. Goldenberg in his capacity as a director. With this litigation behind us, we can now fully turn our attention to bringing IMMU-132 to market, and positioning the business for the next phase of growth and building out the leadership of the organization."

First Quarter Fiscal 2018 Results

Total revenue was $0.7 million for both quarters ended September 30, 2017 and September 30, 2016.

Total costs and expenses for the first quarter ended September 30, 2017 were $22.3 million, compared to $15.7 million for the same quarter in fiscal 2017, an increase of approximately 42%. The increase was due primarily to a $4.0 million increase in general and administrative expenses related to professional and legal fees, due primarily to the Company’s proxy contest in fiscal 2017, strategic planning activities, and increased associated legal expenses; and a $2.8 million increase in research and development expenses related to increased number of staffing for the preparation of regulatory submission and launch of IMMU-132 in the United States, including preparing and filing the BLA with the FDA, initiating the Phase 3 ASCENT clinical trial for mTNBC, and continuing large scale manufacturing and process validation.

The Company recognized $86.4 million in non-cash expense during the first quarter ended September 30, 2017, due to the increase in the fair value of warrant liabilities resulting from the increase in the share price of the Company’s stock during the quarter. The Company also recognized a $13.0 million non-cash loss on induced exchanges of debt related to the Convertible Senior Notes. There was no warrant-related expense in fiscal 2017.

Interest expense related to the Convertible Notes was $2.6 million for the first quarter ended September 30, 2017, compared to $1.4 million for the same quarter in fiscal 2017, an increase of approximately 86%. The increase was due primarily to a $1.4 million increase in the amortization of debt issuance costs related to the Convertible Notes exchange.

Net loss attributable to stockholders was $118.7 million, or approximately $0.97 per share, for the first quarter ended September 30, 2017, compared to $16.2 million, or approximately $0.17 per share, for the same quarter in fiscal 2017, an increase of approximately 633%. The increase was due primarily to the warrant- and Convertible Senior Notes-related non-cash expense/loss of approximately $99.6 million; an increase in general and administrative expenses as well as research and development expenses; and the increase in the amortization of the debt issuance costs, offset partially by the receipt of $4.4 million in non-recurring insurance reimbursement related to legal costs incurred from the fiscal 2017 proxy contest.

Cash, cash equivalents, and marketable securities totaled $139.6 million as of September 30, 2017.

Michael R. Garone, CFO and Interim CEO, stated, "Our prudent financial management has enabled us to solidify a cash runway for at least the next twelve months – supporting our plan to prepare for the regulatory submission and launch of IMMU-132 for patients with mTNBC in the United States. This includes preparing and filing the BLA with the FDA as planned in the first quarter, conducting the Phase 3 ASCENT clinical trial for mTNBC, and continuing large scale manufacturing and process validation. We look forward to sharing the results from our single-arm Phase 2 study with IMMU-132 in mTNBC at SABCS."

Conference Call
The Company will host a conference call and live audio webcast today at 5:00 p.m. Eastern Time to discuss financial results for the first quarter of fiscal year 2018, and review key clinical developments and planned activities. To access the conference call, please dial (877) 303-2523 or (253) 237-1755 using the Conference ID 7899497. The conference call will be webcast via the Investors page on the Company’s website at www.immunomedics.com/investors.shtml. Approximately two hours following the live event, a webcast replay of the conference call will be available on the Company’s website for 30 days through December 8, 2017.

On November 9, 2017 Histogenics Corporation (Histogenics) (Nasdaq:HSGX), a leader in the development of restorative cell therapies that may offer rapid-onset pain relief and restored function, reported financial and operational results for the quarter ended September 30, 2017 (Press release, Histogenics, NOV 9, 2017, View Source;p=RssLanding&cat=news&id=2315740 [SID1234521909]).

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"With enrollment in the NeoCart Phase 3 clinical trial complete, we are focused on preparing for the top- line, superiority data and potential BLA filing for NeoCart in the third quarter of 2018. In the third quarter of 2017, we enhanced Histogenics’ operational capabilities and expanded our portfolio of data supporting the unique mechanism of action of NeoCart," stated Adam Gridley, President and Chief Executive Officer of Histogenics. "We believe that the data published in the Journal of Biomechanics in October 2017 provide additional evidence that Histogenics’ proprietary cell therapy platform produces cartilage that may accelerate recovery time and reduce pain. These data support the potential of NeoCart to replace microfracture as the standard of care for the treatment of knee cartilage defects, as well as the future development of additional product candidates from the NeoCart product platform. Histogenics’ priorities are now focused on preparing for our upcoming Biologics License Application (BLA) submission, further defining our commercial strategies for our launch of NeoCart, and our ongoing partnering activities for NeoCart in Japan and Asia."

Recent Highlights

Peer Reviewed Publication Further Strengthens NeoCart Data Portfolio. In October 2017, Histogenics announced the publication of a study, "In Vitro Culture Increases Mechanical Stability of Human Tissue Engineered Cartilage Constructs by Prevention of Microscale Scaffold Buckling" in the online version of the peer-reviewed Journal of Biomechanics. The study analyzes the compressive properties of engineered cartilage tissue grown with chondrocytes seeded in a porous scaffold. Histogenics intends to include the results of this study to provide additional data to the U.S. Food and Drug Administration (FDA) as part of a potential BLA for NeoCart, subject to a successful outcome in the ongoing NeoCart Phase 3 clinical trial.

Enhancement of Executive Team in Advance of Potential Approval and Commercialization of NeoCart. In October 2017, Histogenics promoted Stephen Kennedy from Chief Technology Officer to Executive Vice President & Chief Operating Officer. The promotion is consistent with Mr. Kennedy’s focus on the manufacturing scale-up of NeoCart to supply the U.S. market, if approved. Mr. Kennedy has more than 30 years of executive product development, manufacturing, technology assessment and commercialization experience at leading biotechnology companies, which includes extensive experience overseeing product technologies from development through commercial launch.

Financial Results for the Third Quarter of 2017

Loss from operations was $(5.7) million in the third quarter of 2017, compared to $(6.6) million in the third quarter of 2016. The decrease in operating expenses was primarily driven by a reduction in research and development expenses that was offset by an increase in general and administrative expenses.

Research and development expenses were $3.5 million in the third quarter of 2017, compared to $4.9 million in the third quarter of 2016. The decrease was primarily due to reductions in collaboration, consulting and temporary labor expenses and clinical trial-related costs. General and administrative expenses were $2.2 million in the third quarter of 2017, compared to $1.8 million in the third quarter of 2016. The increase was primarily due to activities related to a potential BLA submission and commercialization of NeoCart, if approved.

Net loss attributable to common stockholders was $(5.1) million in the third quarter of 2017, or $(0.23) per share, compared to $(9.2) million, or $(0.70) per share, in the third quarter of 2016. The decrease in net loss attributable to common stockholders is primarily due to lower operating expenses in the third quarter of 2017, $3.1 million in expenses related to the private placement completed in the third quarter of 2016 and an increase in weighted average shares outstanding, also resulting from the 2016 private placement.

As of September 30, 2017, Histogenics had cash, cash equivalents and marketable securities of $12.6 million, compared to $31.9 million at December 31, 2016. Histogenics believes its current cash position will be sufficient to fund its operations into the middle of 2018.

Conference Call and Webcast Information

Histogenics’ management will host a conference call on Thursday, November 9, 2017 at 8:30 a.m. ET. A question-and-answer session will follow Histogenics’ remarks. To participate on the live call, please dial 877-930-8064 (domestic) or 253-336-8040 (international) and provide the conference ID: 89009539 five to ten minutes before the start of the call.

A live audio webcast of the presentation will be available via the "Investor Relations" page of the Histogenics website, www.histogenics.com, or by clicking here. A replay of the webcast will be archived on Histogenics’ website for approximately 45 days following the presentation.

Lixte Biotechnology has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Lixte Biotechnology, 2017, NOV 9, 2017, View Source [SID1234521830]).

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Fortress Biotech has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Fortress Biotech, 2017, NOV 9, 2017, View Source [SID1234521848]).

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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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