On February 15, 2018 -AstraZeneca and Merck (NYSE:MRK), known as MSD outside the U.S. and Canada, reported that the U.S. Food and Drug Administration (FDA) has granted Orphan Drug Designation (ODD) for selumetinib, a MEK 1/2 inhibitor, for the treatment of neurofibromatosis type 1 (NF1) (Press release, Merck & Co, FEB 15, 2018, View Source [SID1234524008]).

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NF1 is an incurable genetic condition that affects one in 3,000 births with highly-variable symptoms including cutaneous (skin), neurological (nervous system) and orthopedic (skeletal) manifestations. NF1 can cause secondary complications including learning difficulties, visual impairment, pain, disfigurement, twisting and curvature of the spine, high blood pressure and epilepsy. Plexiform neurofibromas (PNs) are tumors that arise from nerve fascicles and tend to grow along the length of the nerve. PNs, a neurological manifestation of NF1,occur in approximately 20-50 percent of NF1 patients causing pain, motor dysfunction and disfigurement.

Sean Bohen, executive vice president, global medicines development and chief medical officer, AstraZeneca, said, "Neurofibromatosis type 1 is a devastating condition that can lead to life-threatening complications. There is no known cure for neurofibromatosis and there are limited treatment options to manage symptoms."

Dr. Roy Baynes, senior vice president and head of global clinical development, chief medical officer, Merck Research Laboratories, said, "This is an important collaborative effort with our colleagues at AstraZeneca addressing an area of significant unmet medical need to potentially benefit patients with neurofibromatosis type 1."

The potential benefit of selumetinib in NF1 is being explored in the U.S. National Cancer Institute-sponsored phase 1/2 SPRINT trial in pediatric patients with symptomatic NF1-related PNs. Phase II trial results are expected later in 2018.

The FDA’s ODD program provides orphan status to medicines that are defined as those intended for the safe and effective treatment, diagnosis or prevention of rare diseases or disorders that affect fewer than 200,000 people in the U.S.

In addition to NF1, selumetinib is being investigated in the phase 3 ASTRA trial of patients who are diagnosed with differentiated thyroid cancer (DTC) following surgery and treatment with radioactive iodine. Selumetinib was granted ODD by the US FDA for the adjuvant treatment of stage 3/4 DTC in 2016. It is also being explored as a monotherapy and in combination with other treatments in phase 1 trials.

NOTES TO EDITORS

About neurofibromatosis type 1 (NF1)

The NF1 gene provides instructions for making a protein called Neurofibromin. The disease is associated with many symptoms, including soft lumps on and under the skin (subcutaneous neurofibromas), skin pigmentation (cafe au lait spots) and, in 20-50 percent of patients, tumors on the nerve sheaths (plexiform neurofibromas). These plexiform neurofibromas can cause morbidities such as pain, motor dysfunction and disfigurement. Patients with NF1 may experience a number of other complications such as learning difficulties, visual impairment, twisting and curvature of the spine, high blood pressure, and epilepsy. People with NF1 also have an increased risk of developing other cancers, including malignant brain and peripheral nerve sheath tumors, and leukaemia. Symptoms begin during early childhood, with varying degrees of severity, and can reduce life expectancy by up to 15 years.

About selumetinib

Selumetinib, is an investigational MEK 1/2 inhibitor licensed by AstraZeneca from Array BioPharma Inc. in 2003.

The NF1 gene codes for a protein called Neurofibromin. This protein negatively regulates the RAS/MAPK pathway, which helps to control cell growth, differentiation and survival. Mutations in the NF1 gene may result in dysregulation in RAS/RAF/MEK/ERK signaling, which can cause cells to grow, divide and copy themselves in an uncontrolled manner, and may result in tumor growth. Selumetinib inhibits the MEK enzyme in this pathway, potentially leading to inhibition of tumor growth.

On February 15, 2018 Incyte Corporation (Nasdaq: INCY) today reports 2017 fourth-quarter and year-end financial results, highlighting both strong growth in total revenue and the significant progress being made across the product portfolio (Press release, Incyte, FEB 15, 2018, View Source [SID1234523989]).

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"2017 was another successful year for Incyte with a fast-growing revenue line and an expanded portfolio of later-stage development candidates that we expect to drive our future growth," stated Hervé Hoppenot, Incyte’s Chief Executive Officer. "As we begin 2018, we look forward to key newsflow events in the first half of the year, including the initial results of the ECHO-301 trial of epacadostat in melanoma and the REACH1 trial of ruxolitinib in steroid-refractory acute GVHD, as well as FDA action on the resubmission of the baricitinib NDA for rheumatoid arthritis."

Portfolio Update

Oncology — key highlights

The pivotal REACH1 trial evaluating ruxolitinib in patients with steroid-refractory acute graft-versus-host disease (GVHD) has completed enrollment and results are expected in the first half of 2018. If successful, Incyte expects to submit an sNDA seeking approval of ruxolitinib in this indication.

Initial results, based on progression-free survival, from the pivotal ECHO-301 trial of epacadostat plus pembrolizumab in patients with unresectable or metastatic melanoma are expected in the first half of 2018. In collaboration with both Merck and Bristol-Myers Squibb, we have recently opened eight new pivotal trials of epacadostat plus PD-1 antagonists.

Initial data from the trial evaluating INCB54828 in patients with cholangiocarcinoma are expected in 2018.

Status updates for Incyte’s most advanced clinical programs are provided below.

1

Indication

Status Update

Ruxolitinib
(JAK1/JAK2)

Steroid-refractory acute GVHD

Pivotal Phase 2 (REACH1); Phase 3 (REACH2)

Ruxolitinib
(JAK1/JAK2)

Steroid-refractory chronic GVHD

Phase 3 (REACH3)

Ruxolitinib
(JAK1/JAK2)

Essential thrombocythemia

Phase 2 (RESET)

Itacitinib
(JAK1)

Treatment-naïve acute GVHD

Phase 3 (GRAVITAS-301)

Itacitinib
(JAK1)

NSCLC

Phase 1/2 in combination with osimertinib (EGFR)

Epacadostat
(IDO1)

Melanoma

Phase 3 (ECHO-301) in combination with pembrolizumab (PD-1)

Epacadostat
(IDO1)

Renal cancer

Phase 3 (ECHO-302) in combination with pembrolizumab (PD-1)

Epacadostat
(IDO1)

Bladder cancer

Phase 3 (ECHO-303 & ECHO-307) in combination with pembrolizumab (PD-1)

Epacadostat
(IDO1)

Head & neck cancer

Phase 3 (ECHO-304) in combination with pembrolizumab (PD-1)

Epacadostat
(IDO1)

NSCLC

Phase 3 (ECHO-305 & ECHO-306) in combination with pembrolizumab (PD-1)

Epacadostat
(IDO1)

NSCLC

Phase 3 (ECHO-309) in combination with nivolumab (PD-1)

Epacadostat
(IDO1)

Head & neck cancer

Phase 3 (ECHO-310) in combination with nivolumab (PD-1)

Epacadostat
(IDO1)

NSCLC

Phase 3 in combination with durvalumab (PD-L1) expected to begin in H1 2018

MGA012
(PD-1)(1)

Solid tumors

Phase 1 dose-escalation completed, monotherapy expansion cohorts ongoing

INCB50465
(PI3Kō)

DLBCL

Phase 2 (CITADEL-202)

INCB50465
(PI3Kō)

Follicular lymphoma

Phase 2 (CITADEL-203)

INCB50465
(PI3Kō)

Marginal zone lymphoma

Phase 2 (CITADEL-204)

INCB50465
(PI3Kō)

Mantle cell lymphoma

Phase 2 (CITADEL-205)

INCB54828
(FGFR1/2/3)

Bladder cancer

Phase 2 (FIGHT-201)

INCB54828
(FGFR1/2/3)

Cholangiocarcinoma

Phase 2 (FIGHT-202)

Notes:

(1) MGA012 licensed from MacroGenics

2

A brief status update for Incyte’s earlier-stage clinical candidates is provided below.

Status Update

INCB57643
(BRD)

First-in-man data presented at ASH (Free ASH Whitepaper) 2017, showing optimized PK profile for combination therapy

INCB53914
(PIM)

First-in-man data at ASH (Free ASH Whitepaper) 2017; development expected to focus on combination therapy, including with JAK and PI3Kδ inhibition in hematological malignancies

INCB52793
(JAK1)

150x greater selectivity for JAK1 over JAK2 in preclinical studies; evaluating combination cohorts with azacitadine in AML

INCB59872
(LSD1)

Epigenetic mechanism targeting cell differentiation; evaluating both oncology indications and sickle-cell disease

INCB62079
(FGFR4)

250x greater selectivity for FGFR4 over FGFR1/2/3; initial development expected to focus on hepatocellular carcinoma

INCB81776
(AXL/MER)

Expected to enter clinical trials in 2018

INCB01158
(ARG)(1)

Novel mechanism targeting myeloid cells; development expected to focus on combination therapy, including IDO1, PD-1 and chemotherapy combinations

INCAGN1876
(GITR)(2)

Dose escalation completed; development expected to focus on combination therapy, including IDO1, PD-1 and CTLA-4 combinations

INCAGN1949
(OX40)(2)

Dose escalation completed; development expected to focus on combination therapy, including PD-1 and CTLA-4 combinations

INCAGN2390
(TIM-3)(2)

Expected to enter clinical trials in 2018

INCAGN2385
(LAG-3)(2)

Expected to enter clinical trials in 2018

Notes:

(1) INCB01158 co-developed with Calithera

(2) INCAGN1876, INCAGN1949, INCAGN2390 and INCAGN2385 from discovery alliance with Agenus

Non-oncology

Indication

Status Update

Topical ruxolitinib
(JAK1/JAK2)

Atopic dermatitis, vitiligo

Phase 2

Partnered — key highlights

In December, Lilly announced that it had resubmitted the New Drug Application (NDA) for baricitinib to the U.S. Food & Drug Administration (FDA). This was classified as a Class II resubmission, which began a new six-month review cycle. Lilly also announced that it has initiated a pivotal trial of baricitinib in patients with moderate-to-severe atopic dermatitis.

Novartis has stated that it now anticipates submitting an NDA for capmatinib, a potent and selective MET inhibitor licensed from Incyte, in 2019.

3

Indication

Status Update

Baricitinib (JAK1/JAK2)(1)

Rheumatoid arthritis

Approved in Europe and Japan; NDA resubmitted to FDA

Baricitinib (JAK1/JAK2)(1)

Atopic dermatitis

Phase 3

Baricitinib (JAK1/JAK2)(1)

Psoriatic arthritis

Lilly expects the Phase 3 program to begin in 2018

Baricitinib (JAK1/JAK2)(1)

Systemic lupus erythematosus

Phase 2

Capmatinib (MET)(2)

Non-small cell lung cancer, liver cancer

Phase 2 in EGFR wild-type, ALK negative NSCLC patients with MET amplification and mutation

Notes:

(1) Baricitinib licensed to Lilly

(2) Capmatinib licensed to Novartis

2017 Fourth-Quarter and Year-End Financial Results (GAAP)

Revenues For the quarter ended December 31, 2017, net product revenues of Jakafi were $302 million as compared to $238 million for the same period in 2016, representing 27 percent growth. For the twelve months ended December 31, 2017, net product revenues of Jakafi were $1.1 billion as compared to $853 million for the same period in 2016, representing 33 percent growth. For the quarter ended December 31, 2017, net product revenues of Iclusig were $19 million as compared to $13 million for the same period in 2016. For the twelve months ended December 31, 2017, net product revenues of Iclusig were $67 million as compared to $30 million for the same period in 2016(1).

For the quarter and twelve months ended December 31, 2017, product royalties from sales of Jakavi, which has been out-licensed to Novartis outside of the United States, were $48 million and $152 million, respectively, as compared to $33 million and $111 million for the same periods in 2016. For the quarter and twelve months ended December 31, 2017, product royalties from sales of Olumiant outside of the United States from Lilly were $5 million and $9 million, respectively.

For the quarter and twelve months ended December 31, 2017, milestone and contract revenues were $70 million and $175 million, respectively, as compared to $43 million and $113 million for the same periods in 2016. The milestone and contract revenues in 2017 relate to milestones earned from our collaborative partners.

For the quarter ended December 31, 2017, total revenues were $444 million as compared to $326 million for the same period in 2016. For the twelve months ended December 31, 2017, total revenues were $1.5 billion as compared to $1.1 billion for the same period in 2016.

(1) In June 2016, Incyte obtained an exclusive license from ARIAD to develop and commercialize Iclusig in Europe and other select ex-U.S. countries.

4

Year Over Year Revenue Growth

(in thousands, unaudited)

Three Months Ended

Twelve Months Ended

December 31,

%

December 31,

%

2017

2016

Change

2017

2016

Change

Revenues:

Jakafi net product revenues

$

302,348

$

237,531

27

%

$

1,133,392

$

852,816

33

%

Iclusig net product revenues

19,461

12,867

—

66,920

29,588

—

Product royalty revenues

52,314

33,225

57

%

160,791

110,711

45

%

Product-related revenues

374,123

283,623

32

%

1,361,103

993,115

37

%

Milestone and contract revenues

70,000

42,869

—

175,000

112,512

—

Other revenues

33

6

—

113

92

—

Total revenues

$

444,156

$

326,498

36

%

$

1,536,216

$

1,105,719

39

%

Research and development expenses Research and development expenses for the quarter ended December 31, 2017 were $447 million as compared to $162 million for the same period in 2016. For the quarter ended December 31, 2017, research and development expenses were comprised of $150 million related to our collaboration and license agreement with MacroGenics and $297 million of ongoing expenses.

Research and development expenses for the twelve months ended December 31, 2017 were $1.3 billion as compared to $582 million for the same period in 2016. For the twelve months ended December 31, 2017, research and development expenses were comprised of $359 million of upfront consideration and milestone expense related to our collaboration and license agreements with Agenus, Calithera, MacroGenics and Merus, $12 million related to in-process research and development asset impairment and $955 million of ongoing expenses.

Included in ongoing research and development expenses for the quarter and twelve months ended December 31, 2017 were non-cash expenses related to equity awards to our employees of $23 million and $90 million, respectively.

Selling, general and administrative expenses Selling, general and administrative expenses for the quarter and twelve months ended December 31, 2017 were $98 million and $366 million, respectively, as compared to $96 million and $303 million for the same periods in 2016. Increased selling, general and administrative expenses were driven primarily by additional costs related to the commercialization of Jakafi and the geographic expansion in Europe. Included in selling, general and administrative expenses for the quarter and twelve months ended December 31, 2017 were non-cash expenses related to equity awards to our employees of $11 million and $43 million, respectively.

Change in fair value of acquisition-related contingent consideration The change in fair value of acquisition-related contingent consideration for the quarter and twelve months ended December 31, 2017 was $10 million and $8 million, respectively, as compared to $7 million and $17 million for the same periods in 2016. The change in fair value of acquisition-related contingent consideration represents the fair market value adjustments of the Company’s contingent liability related to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.

5

Unrealized loss on long term investments Unrealized loss on long term investments for the quarter ended December 31, 2017 was $22 million as compared to $24 million for the same period in 2016. The unrealized loss on long term investments for the twelve months ended December 31, 2017 was $24 million as compared to $3 million for the same period in 2016. The unrealized loss on long term investments for the quarter and twelve months ended December 31, 2017 represents the fair market value adjustments of the Company’s investments in Agenus and Merus.

Expense related to senior note conversions Expense related to senior note conversions for the twelve months ended December 31, 2017 was $55 million related to the conversions of certain of our 2018 and 2020 convertible senior notes.

Net income (loss) Net loss for the quarter ended December 31, 2017 was $150 million, or $0.71 per basic and diluted share, as compared to net income of $9 million, or $0.05 per basic and diluted share for the same period in 2016. Net loss for the twelve months ended December 31, 2017 was $313 million, or $1.53 per basic and diluted share, as compared to net income of $104 million, or $0.55 per basic and $0.54 per diluted share for the same period in 2016.

As described below, in 2018 Incyte will begin reporting certain Non-GAAP financial measures, which should be considered in conjunction with Incyte’s GAAP reporting. Under Incyte’s definition of Non-GAAP measures, Non-GAAP net income for the quarter and twelve months ended December 31, 2017 was $4 million and $131 million, respectively.

Cash, cash equivalents and marketable securities position As of December 31, 2017, cash, cash equivalents and marketable securities totaled $1.2 billion as compared to $809 million as of December 31, 2016. The increase in cash, cash equivalents and marketable securities from December 31, 2016 to December 31, 2017 is primarily due to the public offering of 4,945,000 shares of our common stock resulting in net proceeds of $649 million.

Non-GAAP Information

The financial measures other than Non-GAAP net income presented in this press release for the three and twelve months ended December 31, 2017 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Management has chosen to present Non-GAAP net income for the three and twelve months ended December 31, 2017 and to release both GAAP and Non-GAAP financial guidance for the year ending December 31, 2018 in belief that this Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP financial guidance. Management uses such information internally and externally for establishing budgets, operating goals and financial planning purposes. These metrics are also used to manage the Company’s business and monitor performance. The Company adjusts, where appropriate, for both revenues and expenses in order to reflect the Company’s core operations. The Company believes these adjustments are useful to investors by providing an enhanced understanding of the financial performance of the Company’s core operations. The metrics have been adopted to align the Company with disclosures provided by industry peers. A reconciliation of GAAP net loss to Non-GAAP net income for the three and twelve months ended December 31, 2017 has been included at the end of this press release.

Guidance related to research and development and selling, general and administrative expenses does not include estimates associated with any potential future strategic transactions.

6

Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used in conjunction with and to supplement Incyte’s operating results as reported under GAAP. Non-GAAP measures may be defined and calculated differently by other companies in our industry.

2018 Financial Guidance

The Company has provided full year 2018 financial guidance, as detailed below.

GAAP and Non-GAAP Jakafi net product revenues

$1,350 – $1,400 million

GAAP and Non-GAAP Iclusig net product revenues

$80 – $85 million

GAAP Cost of product revenues

$85 – $95 million

Non-GAAP Cost of product revenues(1)

$64 – $74 million

GAAP Research and development expenses

$1,200 – $1,300 million

Non-GAAP Research and development expenses(2)

$1,077 – $1,172 million

GAAP Selling, general and administrative expenses

$515 – $535 million

Non-GAAP Selling, general and administrative expenses(3)

$465 – $480 million

GAAP Change in fair value of acquisition-related contingent consideration

$30 million

Non-GAAP Change in fair value of acquisition-related contingent consideration(4)

$0 million

(1) Adjusted to exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.

(2) Adjusted to exclude the estimated cost of stock-based compensation and upfront consideration of approximately $13 million relating to the Syros Pharmaceuticals, Inc. collaboration.

(3) Adjusted to exclude the estimated cost of stock-based compensation.

(4) Adjusted to exclude the change in fair value of estimated future royalties relating to sales of Iclusig in the licensed territory relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.

The selling, general and administrative expense guidance includes approximately $125 million in epacadostat GAAP and Non-GAAP pre-launch expenses which we expect to incur in the second half of the year.

Future Non-GAAP financial measures may also exclude upfront and ongoing milestones relating to third-party collaboration partners, impairment of goodwill or other assets, changes in the fair value of equity investments in our collaboration partners, non-cash interest expense related to the amortization of the initial discount on our 2018 and 2020 Senior Notes and the impact on our tax provision of discrete changes in our valuation allowance position on deferred tax assets.

Conference Call and Webcast Information

Incyte will hold its 2017 fourth-quarter and year-end financial results conference call and webcast this morning at 8:00 a.m. ET. To access the conference call, please dial 877-407-3042 for domestic callers or 201-389-0864 for international callers. When prompted, provide the conference identification number, 13675376.

7

If you are unable to participate, a replay of the conference call will be available for 30 days. The replay dial-in number for the United States is 877-660-6853 and the dial-in number for international callers is 201-612-7415. To access the replay you will need the conference identification number, 13675376.

The conference call will also be webcast live and can be accessed at www.incyte.com in the Investors section under "Events and Presentations".

On February 15, 2018 Cancer Research UK reported that £45 million will be invested into its network of clinical trials units across the UK, one of the charity’s largest investments in clinical research to date (Press release, Cancer Research UK, FEB 15, 2018, View Source [SID1234523966]).

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"Our clinical research enables us to translate discoveries from the lab in order to improve cancer diagnostics and treatments, giving more patients the best chance of beating their disease." – Professor Charles Swanton, Cancer Research UK

Cancer Research UK’s clinical trials units (CTUs) bring together world leading researchers and clinicians to find life-saving new treatments and tests for cancer patients.

Clinical trials are the only way to find out if a new treatment is safe to use, and if it’s better than existing treatments. Each year, around 25,000 people take part in a clinical trial that’s supported by Cancer Research UK.

The huge sum will be divided over 5 years across 8 CTUs in Cardiff, Birmingham, Glasgow, Southampton, Leeds and London (at The Institute of Cancer Research, London, UCL, and Queen Mary University of London)*.

Professor Charles Swanton, Cancer Research UK’s chief clinician, said: "Our clinical research enables us to translate discoveries from the lab in order to improve cancer diagnostics and treatments, giving more patients the best chance of beating their disease.

"This is particularly important for patients with hard to treat cancers, including pancreatic, oesophageal, lung and brain tumours, where options for treatment are limited and survival rates remain poor."

Cancer Research UK’s CTUs specialise in the design, delivery and analysis of trials that bring the latest scientific developments to patients all over the UK. They’re a vital part of the charity’s research network, helping shape the clinical research landscape in the UK and internationally.

Each of the charity’s CTUs has a different specialist focus including children’s cancer trials, cancer screening, and population research.

In Birmingham, there will be dedicated funding for finding new treatments for children with cancer.

Professor Pamela Kearns, director of Birmingham’s Cancer Research UK Clinical Trials unit and Cancer Research UK’s children’s cancer expert, said: "Clinical trials are vital to test new treatments and improve the care of children with cancer. For example, within my team, with support from Cancer Research UK, we run the International BEACON** trial, testing new combinations of therapies for children and young people with a type of childhood cancer called neuroblastoma, at a stage where they have failed to respond to standard treatments.

"One question this trial is trying to answer is if a drug called bevacizumab can help treat their neuroblastoma. Bevacizumab is a type of biological therapy called a monoclonal antibody that targets the tumour’s blood supply. Doctors already treat adult cancers with this drug and we want to see if it works for children with neuroblastoma."

Trials are also helping us to find kinder treatments with fewer side effects.

Oliver Waugh, aged 54 from London, was diagnosed with tonsil cancer in 2009. As part of his treatment, he took part in a Cancer Research UK funded clinical trial which investigated a new type of radiotherapy called Intensity Modulated Radiotherapy (IMRT). Researchers wanted to find out if IMRT caused fewer side effects and if it worked as well as standard radiotherapy for head and neck cancers.***

He said: "I was really pleased to have joined because I know the side effects from regular radiotherapy could have been far more severe. My mouth started to produce saliva again not long after treatment, and I slowly started to put weight back on.

"Now I eat what I want, including curries and other spicy food and feel lucky that the high quality of my treatment has helped me lead a regular life again and I can honestly say I’m fitter than I’ve ever been.

"I feel fortunate to have been offered the chance to help medical research and I hope that many more patients like me will get to lead full and healthy lives because of these improvements in treatment."

On February 15, 2018 Celularity reported that it has been created through the contribution and acquisition of extensive intellectual property, clinical-stage assets, basic and clinical research, and product development expertise including (Press release, Celularity, FEB 15, 2018, View Source [SID1234530906]):

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First proprietary allogeneic "off-the-shelf" immunotherapeutic platform
Proprietary clinical stage Placental Natural Killer (PNK) Cell Program
IND-ready CD38 CAR-T program
Innovative allogeneic CD38 CAR NK program
Phase 3-ready placental adherent cell products for serious Crohn’s Disease
Sorrento Therapeutics G-MAB Library of 50+ fully-human antibody-CAR constructs
Unparalleled IP position: 800+ issued patents in cell therapy and regenerative medicine; dominating position worldwide for placental stem cells
World-class cell and biomaterials manufacturing capabilities
Commercial-stage functional regeneration products Biovance and Interfyl, and late-stage pipeline assets across broad disease indications
LifeBankUSA, pioneering stem cell biobanking business with two decades’ operating expertise
Celularity, a biotechnology company founded by stem cell pioneer Robert Hariri, MD, PhD, is announcing the formation of the company with $250M in funding with contributions from Celgene (NSDQ: CELG), United Therapeutics (NSDQ: UTHR), Sorrento Therapeutics (NSDQ: SRNE), Human Longevity, Inc., Genting Group, the Dreyfus Family Office, Section 32, and Heritage Group. Celularity is co-founded with Vice Chairman, Peter H. Diamandis, MD, alongside Dr. Hariri, and has a board of industry luminaries including Vice Chairman, John Sculley, formerly of Apple and Pepsi-Cola, Bill Maris of Section 32 (previously founder and CEO of Google Ventures), and Andrew von Eschenbach, former commissioner of the US Food and Drug Administration.

Celularity sources, develops, and deploys transformative therapies derived from the placenta for treatment of complex medical conditions including hematological and solid tumors, autoimmune disease, diabetes, as well as degenerative effects of aging. By combining synergistic assets from Celgene, United Therapeutics, Sorrento Therapeutics, and Human Longevity Inc., Celularity is accelerating the development of cell and tissue regenerative products to address unmet medical needs. These treatments have the potential to reverse life-threatening diseases and extend the healthy human lifespan.

"My goal is to make it so the next generation grows up in a world where cancer is managed just like the common cold, and the body’s natural regenerative engine remains empowered throughout our lives," said Dr. Hariri, Founder, Chairman and Chief Executive Officer of Celularity. "Celularity is a new biotechnology company model founded to harness the placenta as a platform for discovery and therapeutics, ultimately with a goal of amplifying the body’s ability to fight disease, restore function and extend the healthy lifespan. It is my vision that the cellular medicines we derive from the placenta will lead to abundant and affordable treatments."

Celularity has assembled an industry-leading intellectual property portfolio of more than 800 issued patents, which attain a dominating position around placental-derived stem and progenitor cells. Celularity is also the first to own and deploy the full value chain ranging from sourcing placental stem cells to delivering patient treatment. The company is built on three key pillars: Cell Therapy, Functional Regeneration, and Biosourcing:

Cell Therapy: Celularity has developed five clinical stage cell therapy candidates currently being evaluated for cancer, and immunological and degenerative diseases
Functional Regeneration: Celularity is addressing serious wounds, burns, orthopedic, and other surgical indications including reconstructive and aesthetic applications with a broad range of placental biomaterials. Derived from placental tissue, Celularity’s BIOVANCE and Interfyl were the first biomaterial products introduced to the market to enhance the body’s regenerative processes
Biosourcing: Celularity owns and operates LifeBankUSA, the world’s only repository that allows families to bank their newborn’s placental cells and biomaterials for future therapeutic and regenerative use
Celularity is the only company with an allogeneic placental cell platform. Placental stem cells are uniquely immunoprivileged, therefore treatments do not require cells to be engineered or matched for each individual patient. Celularity is focused on this highly-scalable platform of technology to optimize economics and access to these cutting-edge therapies, including immuno-oncology. These placental stem cells allow for unprecedented scalability for Celularity’s CAR-T and CAR-NK platforms.

"Celularity’s technology has the potential to augment human immunity and longevity," said Dr. Peter H. Diamandis, Co-Founder and Vice-Chairman of Celularity. "The company’s ultimate vision is to make 100 years old the new 60, providing people with maximal cognition, mobility and aesthetics as they age. The 20 years of science, research, and intellectual property pioneered by Dr. Bob Hariri has the highest potential to become the cornerstone for this vision."

Andrew von Eschenbach, MD, among the founding members of the Celularity Board of Directors, and the former United States Food and Drug Administration (FDA) Commissioner and Director of the National Cancer Institute, said, "The pioneering work of Celularity founder Bob Hariri has unleashed the unique properties of placental derived stem cells, which have renewed hope for creating safe and effective therapies for the most challenging degenerative diseases." Dr. von Eschenbach added, "Celularity, with its focus on accelerating innovation in regenerative medicine, can become the leading catalyst for cell therapy to address many of the world’s unmet medical needs."

"Our investment in Celularity brings together its proprietary allogeneic placental platform and Sorrento’s best in class CAR-T products and cGMP manufacturing capabilities," said Henry Ji, another founding member of Celularity’s Board of Directors and Chairman, President and CEO of Sorrento Therapeutics. "Together, we can deliver these health solutions at scale to treat exponentially more people than we ever thought possible."

On February 15, 2018 Acorda Therapeutics, Inc. (Nasdaq: ACOR) reported its financial and pipeline update for the fourth quarter and full year ended December 31, 2017 (Press release, Acorda Therapeutics, FEB 15, 2018, View Source [SID1234523995]).

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"We continue to prepare for the potential approval and launch of INBRIJA, our investigational inhaled levodopa treatment for symptoms of OFF periods in people with Parkinson’s disease. We look forward to working with the FDA during the NDA review process, and to bringing this new treatment option to the Parkinson’s community to help address an important unmet need," said Ron Cohen, M.D., Acorda’s President and CEO. "Based on our continued market research, as well as the strength of our Phase 3 data, we believe INBRIJA’s US market opportunity to be greater than $800 million."

Fourth Quarter 2017 Financial Results

AMPYRA (dalfampridine) Extended Release Tablets, 10 mg – For the quarter ended December 31, 2017, the Company reported AMPYRA net revenue of $167.2 million compared to $132.3 million for the same quarter in 2016.

Royalty Revenue – For the quarter ended December 31, 2017, the Company reported royalty revenue of $16.1 million as compared to $4.4 million for the same quarter in 2016. The Company reported FAMPYRA royalties from sales outside of the U.S. of $3.1 million compared to $2.7 million for the same quarter in 2016. Additionally, the Company completed a transaction that provides a fully paid-up, royalty-free license for Selincro in exchange for $13.0 million which was recorded as royalty revenue in the quarter ended December 31, 2017. During the quarter ended December 31, 2017, the Company completed a royalty purchase transaction for its Fampyra royalty revenue in exchange for an upfront payment of $40 million. The transaction was recorded as a liability in accordance with US GAAP which will be reduced over time as royalty revenue is recognized.

Research and development (R&D) expenses for the quarter ended December 31, 2017 were $35.1 million, including $2.2 million of share-based compensation compared to $53.8 million, including $3.0 million of share-based compensation for the same quarter in 2016.

Sales, general and administrative (SG&A) expenses for the quarter ended December 31, 2017 were $39.5 million, including $5.4 million of share-based compensation compared to $59.0 million, including $6.0 million of share-based compensation for the same quarter in 2016.

The Company recorded non-cash asset impairment charges of $233.5 million for tozadenant as a result of the termination of this program, and $23.8 million for SYN120 as a result of the trial not meeting key primary and secondary endpoints. The Company assessed the valuation assumptions for both programs and determined the assets were fully impaired. Both of these charges were recorded in the quarter ended December 31, 2017.

Benefit from income taxes for the quarter ended December 31, 2017 was $51.9 million, including $2.7 million of cash taxes, compared to a provision for income taxes of $1.0 million, including $0.7 million of cash taxes for the same quarter in 2016.

The Company reported a GAAP net loss attributable to Acorda of $(171.1) million for the quarter ended December

31, 2017, or $(3.70) per diluted share. GAAP net loss in the same quarter of 2016 was $(3.1) million, or $(0.07) per diluted share.

Non-GAAP net income for the quarter ended December 31, 2017 was $28.5 million, or $0.61 per diluted share. Non-GAAP net income in the same quarter of 2016 was $2.5 million, or $0.05 per diluted share. This quarterly non-GAAP net income measure, more fully described below under "Non-GAAP Financial Measures," excludes share-based compensation charges, non-cash interest charges on our debt, restructuring expenses, changes in the fair value of acquired contingent consideration, asset impairment charges, gain on sale of assets and acquisition-related expenses. A reconciliation of the GAAP financial results to non-GAAP financial results is included with the attached financial statements.

Financial Results – Full Year Ended December 31, 2017

AMPYRA (dalfampridine) Extended Release Tablets, 10 mg – For the full year ended December 31, 2017 net revenue was $543.3 million compared to $492.8 million for full year 2016. Full year 2017 net revenue increased 10.2% over 2016.

Royalty Revenue – For the full year ended December 31, 2017, the Company reported royalty revenue of $29.5 million compared to $17.2 million for the full year 2016. The Company reported FAMPYRA royalties from sales outside of the U.S. of $11.6 million compared to $10.6 million for the full year 2016. Royalty revenue related to the authorized generic version of Zanaflex was $2.6 million compared to $3.9 million for the full year 2016. Additionally, the Company reported $15.3 million in royalties for Selincro for the full year 2017, which includes $13.0 million of royalty revenue related to the Selincro royalty transaction.

Research and development (R&D) expenses for the full year ended December 31, 2017 were $166.1 million, including $9.7 million of share-based compensation, compared to $203.4 million, including $10.6 million of share-based compensation for the full year 2016

Sales, general and administrative (SG&A) expenses for the full year ended December 31, 2017 were $181.6 million, including $23.1 million of share-based compensation, compared to $235.4 million, including $25.8 million of share-based compensation for the full year 2016.

Asset impairment charges for the full year ended December 31, 2017 include $233.5 million for tozadenant, $23.8 million for SYN120, and $39.4 million for Selincro.

Benefit from income taxes for the full year ended December 31, 2017 was $28.5 million, including $14.1 million of cash taxes compared to a benefit from income taxes of $6.7 million, including $4.3 million of cash taxes for the full year 2016.

For the full year ended December 31, 2017, the Company reported a GAAP net loss of $(223.4) million, or $(4.86) per diluted share. GAAP net loss for the full year 2016 was $(34.6) million, or $(0.76) per diluted share.

Non-GAAP net income for the full year ended December 31, 2017 was $80.7 million, or $1.75 per diluted share. Non-GAAP net income for the full year ended December 31, 2016 was $11.5 million, or $0.25 per diluted share. This full year non-GAAP net income measure, more fully described below under "Non-GAAP Financial Measures," excludes share-based compensation charges, non-cash interest charges on our debt, restructuring expenses, changes in the fair value of acquired contingent consideration, asset impairment charges, gain on sale of assets, realized foreign currency loss (gain) and acquisition related expenses. A reconciliation of the GAAP financial results to non-GAAP financial results is included with the attached financial statements.

At December 31, 2017, the Company had cash and cash equivalents of $307.1 million.

2018 Financial Guidance

AMPYRA net revenue is expected to be $330-$350 million. The Company expects to maintain exclusivity of AMPYRA at least through July 30, 2018; this guidance is subject to change based on the appellate court’s decision.

R&D expenses for the full year 2018 are expected to be $100-$110 million and include manufacturing expenses associated with INBRIJA. This guidance is a non-GAAP projection that excludes share-based compensation as more fully described below under "Non-GAAP Financial Measures."

SG&A expenses for the full year 2018 are expected to be $170-$180 million. This guidance is a non-GAAP projection that excludes share-based compensation as more fully described below under "Non-GAAP Financial Measures."

Year-end cash balance for 2018 is projected to be over $300 million

Fourth Quarter 2017 Pipeline and Corporate Updates

INBRIJA (levodopa inhalation powder) Next Steps

The Company resubmitted the NDA for INBRIJA in December 2017. The FDA is expected to inform the Company if the submission has been deemed complete and permits a full review in February 2018.

The Company expects to file a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA) in Q1 2018.

AMPYRA (dalfampridine) Patent Appeal

In November, 2017, the Company and the defendants filed reply briefs for the appeal to the U.S. Court of Appeals for the Federal Circuit of the District Court’s decision in the AMPYRA patent litigation. The date for oral argument is expected in the first half of 2018.

Both BIO and PhRMA filed amicus briefs in support of the Company’s appeal, raising important issues in conjunction with biopharmaceutical innovation.

Royalty Monetization Transactions/ZANAFLEX (tizanidine hydrochloride) Franchise Sale

In November, 2017, the Company announced royalty monetization transactions of $53 million for FAMPYRA and SELINCRO.

The Company also announced the sale of ZANAFLEX and ZANAFLEX CAPSULES for $4 million.

SYN120 Phase 2 Data in Parkinson’s disease

Data from the Phase 2 proof-of-concept study for SYN120 showed that several of the outcome measures trended in favor of drug versus placebo; neither the primary nor key secondary endpoints achieved statistical significance.

The Company continues to review the data, which will be presented at an upcoming medical meeting.

Tozadenant Program Discontinued

In November, 2017, the Company discontinued its clinical development program for tozadenant, an investigational treatment for Parkinson’s disease. The Company made this decision based on the emergence of serious adverse events in its Phase 3 program.

Webcast and Conference Call

The Company will host a conference call today at 8:30 a.m. ET. To participate, dial

(866) 393-4306 (domestic) or (734) 385-2616 (international); access code 8789908. The presentation will be available on the Investors section of www.acorda.com.

A replay of the call will be available from 11:30 a.m. ET on February 15, 2018 until 11:59 p.m. ET on March 15, 2018. To access the replay, dial (855) 859-2056 (domestic) or (404) 537-3406 (international); reference code 8789908. The archived webcast will be available in the Investor Relations section of the Acorda website.

Non-GAAP Financial Measures

This press release includes financial results prepared in accordance with accounting principles generally accepted in the United States (GAAP), and also certain historical and forward-looking non-GAAP financial measures. In particular, Acorda has provided non-GAAP net income, adjusted to exclude the items below, and has provided 2018 guidance for R&D and SG&A expenses on a non-GAAP basis. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP. However, the Company believes the presentation of non-GAAP net income, when viewed in conjunction with our GAAP results, provides investors with a more meaningful understanding of our ongoing and projected operating performance because this measure excludes (i) non-cash compensation charges and benefits that are substantially dependent on changes in the market price of our common stock, (ii) non-cash interest charges related to the accounting for our outstanding convertible debt which are in excess of the actual interest expense owing on such convertible debt as well as non-cash interest related to the Fampyra monetization, non-cash interest charges related to our asset based loan which was terminated in 2017 and acquired Biotie debt, (iii) changes in the fair value of acquired contingent consideration which do not correlate to our actual cash payment obligations in the relevant periods, (iv) acquisition related expenses and related foreign currency losses and gains that pertain to a non-recurring event, (v) corporate restructuring expenses that pertain to a non-recurring event, (vi) asset impairments which are non-cash charges that relate to program terminations that are not routine to the operation of the business, and (vii) gain on sale of assets that pertains to a non-recurring event. The Company believes its non-GAAP net income measure helps indicate underlying trends in the Company’s business and is important in comparing current results with prior period results and understanding projected operating performance. Also, management uses this non-GAAP financial measure to establish budgets and operational goals, and to manage the Company’s business and to evaluate its performance.

In addition to non-GAAP net income, we have provided 2018 guidance for R&D and SG&A expenses on a non-GAAP basis. Due to the forward looking nature of this information, the amount of compensation charges and benefits needed to reconcile these measures to the most directly comparable GAAP financial measures is dependent on future changes in the market price of our common stock and is not available at this time. The Company believes that these non-GAAP measures, when viewed in conjunction with our GAAP results, provide investors with a more meaningful understanding of our ongoing and projected R&D and SG&A expenses. Also, management uses these non-GAAP financial measures to establish budgets and operational goals, and to manage the Company’s business and to evaluate its performance.