On May 1, 2018 Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD), a commercial biotechnology company, reported on its first quarter 2018 results and recent business activities (Press release, Ironwood Pharmaceuticals, MAY 1, 2018, View Source;p=irol-newsArticle&ID=2345875 [SID1234525897]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

"Ironwood’s first quarter results reflect year-over-year topline growth of 33%, significant commercial and pipeline progress, and continued financial discipline," said Peter Hecht, chief executive officer of Ironwood. "LINZESS continued to demonstrate strong demand, with 15% year-over-year prescription volume growth. We believe we have alignment on Phase III design for IW-3718 following a productive end of Phase II meeting with the FDA and expect to initiate the IW-3718 trials in the third quarter of 2018. In addition, we continue to make good progress advancing our four Phase II trials with praliciguat and olinciguat, our lead clinical sGC stimulators."

First Quarter 2018 and Recent Highlights

Irritable Bowel Syndrome with Constipation (IBS-C) / Chronic Idiopathic Constipation (CIC)

U.S. LINZESS. U.S. net sales, as reported by Ironwood’s U.S. collaboration partner Allergan plc, were $159.3 million in the first quarter of 2018, an 8% increase compared to the first quarter of 2017. Ironwood and Allergan share equally in brand collaboration profits.
LINZESS commercial margin was 63% in the first quarter of 2018 compared to 52% in the first quarter of 2017.
Net profit for the LINZESS U.S. brand collaboration, net of commercial and research and development (R&D) expenses, was $88.8 million in the first quarter of 2018, a 43% increase compared to the first quarter of 2017.
Total LINZESS prescription volume in the first quarter of 2018 included approximately 30 million LINZESS capsules, an 15% increase in capsules compared to the first quarter of 2017, per IQVIA.
More than 764,000 total LINZESS prescriptions were filled in the first quarter of 2018, an approximately 9% increase compared to the first quarter of 2017, per IQVIA.
Since the launch of LINZESS in December 2012, greater than 2 million unique patients have filled approximately 10.6 million prescriptions, per IQVIA.
In January 2018, Ironwood and Allergan reached an agreement with wholly-owned subsidiaries of Sun Pharmaceutical Industries Ltd. (Sun Pharma, including its subsidiaries and/or associated companies), resolving patent litigation brought in response to Sun Pharma’s abbreviated new drug application (ANDA) seeking approval to market a generic version of LINZESS prior to the expiration of the companies’ patents. Pursuant to the terms of the settlement, Ironwood and Allergan will grant the wholly-owned subsidiaries of Sun Pharma a license to market a generic version of LINZESS in the U.S. beginning on February 1, 2031 (subject to U.S. FDA approval), unless certain limited circumstances, customary for settlement agreements of this nature, occur. As a result of the settlement, all Hatch-Waxman litigation between the companies and Sun Pharma regarding LINZESS patents has been dismissed.
Additional Abdominal Symptom Claims. Ironwood and Allergan expect to initiate a single Phase III trial with LINZESS in mid-2018 to evaluate its efficacy for relief of additional abdominal symptoms, including bloating and discomfort, two highly bothersome symptoms associated with IBS-C.
Linaclotide Delayed Release. An estimated 20 to 25 million patients suffer from IBS-mixed and IBS with diarrhea in the U.S. Ironwood and Allergan plan to advance into a Phase IIb clinical trial a linaclotide delayed release formulation as a potential visceral, non-opioid, pain-relieving agent for patients suffering from all subtypes of IBS. The companies are in active discussions with the U.S. FDA about this program.
LINZESS-Japan. Ironwood reported $5.4 million in sales of linaclotide active pharmaceutical ingredient (API) to its Japanese partner, Astellas Pharma Inc. in the first quarter of 2018.
Uncontrolled Gout

DUZALLO (lesinurad and allopurinol) and ZURAMPIC (lesinurad). Ironwood is systematically exploring a more comprehensive marketing mix for its lesinurad franchise, including DUZALLO and ZURAMPIC, in select test markets (with paired controls), while continuing to expand affordable access across the country. The data received from these test markets in 2018 are expected to inform our lesinurad franchise investment decisions. Combined U.S. net sales were $0.6 million in the first quarter of 2018.
Persistent Gastroesophageal Reflux Disease (GERD)

IW-3718. Ironwood is actively working to advance IW-3718, its gastric retentive formulation of a bile acid sequestrant for the potential treatment of persistent GERD, into Phase III trials. There are an estimated 10 million Americans who suffer regularly from symptoms of persistent GERD, such as heartburn and regurgitation, despite receiving treatment with the current standard of care, proton pump inhibitors.
Following a series of productive meetings with the U.S. FDA, Ironwood expects to initiate two randomized, placebo-controlled Phase III trials for IW-3718 in the third quarter of 2018. These trials are expected to evaluate the safety and efficacy of IW-3718 1500mg in patients with persistent GERD. The two trials are expected to enroll less than 800 patients each, with heartburn severity response as the primary endpoint. Further details on study design and endpoints will be provided upon the initiation of the trials.
Diabetic Nephropathy and Heart Failure with Preserved Ejection Fraction (HFpEF)

Praliciguat (IW-1973). Ironwood is enrolling patients in Phase II tirals to evaluate praliciguat, its lead soluble guanylate cyclase (sGC) stimulator, for the potential treatment of serious diseases, including diabetic nephropathy and HFpEF. Both diseases affect millions of patients around the world, including an estimated eight million Americans suffering from diabetic nephropathy and an estimated three million Americans suffering from HFpEF. Diabetic nephropathy is the leading cause of end-stage renal disease. There are few treatment options available to delay the steady decline of renal function leading to dialysis or kidney transplant. HFpEF is a highly symptomatic condition with high rates of morbidity and mortality, with no approved treatments available.
Diabetic nephropathy. Ironwood expects to enroll approximately 150 patients into a randomized, double-blind, placebo-controlled, dose-ranging Phase II trial designed to evaluate the safety and efficacy of praliciguat in patients with diabetic nephropathy.
HFpEF. Ironwood expects to enroll approximately 325 patients into a randomized, double-blind, placebo-controlled, dose-ranging Phase II trial designed to evaluate the safety and efficacy of praliciguat in patients with HFpEF.
Sickle Cell Disease and Achalasia

Olinciguat (IW-1701). Ironwood is enrolling patients in Phase II trials to evaluate olinciguat, its second clinical sGC stimulator, for the potential treatment of sickle cell disease and of achalasia. Sickle cell disease is a rare, debilitating genetic disorder that affects approximately 100,000 Americans and causes red blood cells to become sickle-shaped, reducing normal red blood cell number. Achalasia is a rare disease with a prevalence rate of 10/100,000 Americans in which the lower esophagus does not relax normally, causing dysphagia (swallowing problems), regurgitation, and chest pain.
Sickle Cell Disease. Ironwood expects to enroll approximately 80 patients into a multicenter, randomized, double-blind, placebo-controlled, dose-ranging Phase II trial of olinciguat in patients with sickle cell disease. The Phase II trial is designed to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of olinciguat in these patients.
Achalasia. Ironwood continues to enroll patients into a randomized, double-blind, placebo-controlled, single-dose Phase IIa study of olinciguat in patients with achalasia. This study is designed to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of olinciguat in these patients. Data from this study are expected in 2018.
Corporate and Financials

Total Revenues
Total revenues were $69.2 million in the first quarter of 2018 compared to $52.2 million in the first quarter of 2017. Included in total revenues was $61.2 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., $5.4 million in sales of linaclotide API to Astellas, $0.6 million in ZURAMPIC and DUZALLO product revenue, and $2.0 million in linaclotide royalties, co-promotion and other revenue.
Operating Expenses
Operating expenses were $105.0 million in the first quarter of 2018, compared to $91.8 million in the first quarter of 2017. Operating expenses in the first quarter of 2018 included $2.6 million in cost of revenues, $36.5 million in R&D expenses, $61.9 million in selling, general and administrative (SG&A) expenses, of which $2.4 million related to Ironwood’s field-based workforce reduction in January 2018, $3.5 million in acquired intangible assets amortization expenses, and a $0.5 million loss on fair value remeasurement of contingent consideration.
Contingent consideration and amortization of acquired intangible assets relate to Ironwood’s license agreement with AstraZeneca for the exclusive U.S. rights to all products containing lesinurad.
Other Expense
Interest Expense. Net interest expense was $8.6 million in the first quarter of 2018, primarily in connection with the $150 million 8.375% Notes funded in January 2017 and the approximately $336 million convertible debt financing funded in June 2015. Interest expense recorded in the first quarter of 2018 includes $5.0 million in cash expense and $4.2 million in non-cash expense.
Gain on Derivatives. Ironwood recorded a gain on derivatives related to the change in fair value of the convertible note hedges and note hedge warrants issued in connection with the convertible debt financing funded in June 2015. A gain on derivatives of $1.3 million was recorded in the first quarter of 2018.
Net Loss
GAAP net loss was $43.1 million, or $0.29 per share, in the first quarter of 2018, compared to a net loss of $52.5 million, or $0.36 per share, in the first quarter of 2017.
Non-GAAP net loss was $40.5 million, or $0.27 per share, in the first quarter of 2018, compared to $48.3 million, or $0.33 per share, in the first quarter of 2017. Non-GAAP net loss excludes the impact of mark-to-market adjustments on the derivatives related to Ironwood’s convertible debt, as well as the amortization of acquired intangible assets and the fair value remeasurement of contingent consideration related to Ironwood’s U.S. lesinurad license. See Non-GAAP Financial Measures below.
Cash Position
Ironwood ended the first quarter of 2018 with approximately $194.4 million of cash, cash equivalents and available-for-sale securities. Ironwood used approximately $30.9 million of cash for operations during the first quarter of 2018.
Non-GAAP Financial Measures
The company presents non-GAAP net loss and non-GAAP net loss per share to exclude the impact of net gains and losses on the derivatives related to our convertible notes that are required to be marked-to-market, as well as the amortization of acquired intangible assets and the fair value remeasurement of contingent consideration associated with Ironwood’s U.S. license agreement with AstraZeneca for the exclusive rights to all products containing lesinurad. The derivative gains and losses may be highly variable, difficult to predict and of a size that could have a substantial impact on the company’s reported results of operations in any given period. The acquired intangible assets are valued as of the date of acquisition and are amortized over their estimated economic useful life, and management believes excluding the amortization of acquired intangible assets provides more consistency with the treatment of internally developed intangible assets for which research and development costs were previously expensed. The contingent consideration balance is remeasured each reporting period, and the resulting change in fair value impacts the company’s reported results of operations. The changes in the fair value remeasurement of contingent consideration do not correlate to the company’s actual cash payment obligations in the relevant period. Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures, please refer to the table at the end of this press release.

Conference Call Information
Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time on Tuesday, May 1, 2018 to discuss its first quarter 2018 results and recent business activities. Individuals interested in participating in the call should dial (877) 643-7155 (U.S. and Canada) or (914) 495-8552 (international) using conference ID number 9859406. To access the webcast, please visit the Investors section of Ironwood’s website at www.ironwoodpharma.com at least 15 minutes prior to the start of the call to ensure adequate time for any software downloads that may be required. The call will be available for replay via telephone starting at approximately 11:30 a.m. Eastern Time, on May 1, 2018 running through 11:59 p.m. Eastern Time on May 8, 2018. To listen to the replay, dial (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (international) using conference ID number 9859406. The archived webcast will be available on Ironwood’s website for 14 days beginning approximately one hour after the call has completed.

On May 1, 2018 Kura Oncology, Inc. (Nasdaq:KURA), a clinical-stage biopharmaceutical company focused on the development of precision medicines for oncology, reported that it will report first quarter 2018 financial results after the close of U.S. financial markets on Tuesday, May 8, 2018 (Press release, Kura Oncology, MAY 1, 2018, View Source [SID1234525915]). Kura’s management will host a webcast and conference call at 4:30 p.m. ET / 1:30 p.m. PT that day to discuss the financial results and provide a corporate update.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

The live call may be accessed by dialing 877-516-3514 for domestic callers and 281-973-6129 for international callers and entering the conference code: 7199738. A live webcast and archive of the call will be available online from the investor relations section of the company website at www.kuraoncology.com.

On May 1, 2018 Juniper Pharmaceuticals (Nasdaq:JNP) ("Juniper" or the "Company"), reported that it will hold a conference call on May 10, 2018, to discuss the financial results for the first quarter ended March 31, 2018, as follows (Press release, Juniper Pharmaceuticals, MAY 1, 2018, View Source [SID1234525933]):

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

Date: May 10, 2018

Time: 8:30 a.m. EST

Dial-in numbers: Toll free: (1-866-374-4635) (U.S.), (1-855-669-9657) (Canada), or

International: (1-412-902-4218)

Audio webcast (live & archive): www.juniperpharma.com, under ‘Investors’ or click here.

The teleconference replay will be available approximately one hour after completion through Thursday, March 15, 2018, at 1-877-344-7529 (U.S.), 1-855-669-9658 (Canada) or 1-412-317-0088 (International). The replay access code is 10119657.

The archived webcast will be available for one year via the aforementioned URLs.

On May 1, 2018 Incyte Corporation (Nasdaq:INCY) reported 2018 first-quarter financial results, highlighting strong growth in total product-related revenue and providing a status update on the Company’s development portfolio (Press release, Incyte, MAY 1, 2018, View Source;p=RssLanding&cat=news&id=2345828 [SID1234525889]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

"Jakafi continues to grow with significant momentum as we bring the benefits of this first-in-class treatment to an increasing number of patients," stated Hervé Hoppenot, Incyte’s Chief Executive Officer. "We expect to be able to provide important updates from our development portfolio over the coming months—including the results of the first pivotal trial of Jakafi in graft-versus-host disease and initial data from our FGFR program in cholangiocarcinoma—as we continue to work on developing innovative therapies for patients in need."

Portfolio Update

Oncology – key highlights

Results from the REACH1 trial evaluating ruxolitinib in patients with steroid-refractory acute graft-versus-host disease (GVHD) are expected in the first half of 2018. Data emerging from this open-label, pivotal trial continue to support Incyte’s intention to submit an sNDA in the second half of 2018, seeking approval of ruxolitinib in this indication.

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

As previously announced, the external Data Monitoring Committee (eDMC) review of the pivotal Phase 3 ECHO-301 study evaluating epacadostat in combination pembrolizumab in patients with unresectable or metastatic melanoma determined that the study did not meet the primary endpoint of improving progression-free survival in the overall population compared to pembrolizumab monotherapy. The study’s second primary endpoint of overall survival also was not expected to reach statistical significance. Based on these results, and at the recommendation of the eDMC, the study has been stopped to enable patients and their physicians to consider alternative therapeutic options, and Incyte is also significantly downsizing the epacadostat development program.

In consultation with Incyte’s collaboration partners, and after the results of ECHO-301, the two pivotal trials of epacadostat in combination with pembrolizumab in lung cancer (ECHO-305 and ECHO-306) will be converted into randomized phase 2 trials. Enrollment will be discontinued in the four additional pivotal trials of epacadostat in combination with pembrolizumab, and in the two pivotal trials of epacadostat in combination with nivolumab; each of these studies will be amended to enable patients and their physicians to consider alternative therapeutic options. The pivotal trial in combination with durvalumab in Stage 3 lung cancer will not be initiated.

Incyte intends to continue to investigate epacadostat’s potential as a component of combination immunotherapy in proof-of-concept trials, which will include hypotheses distinct from combinations with PD-1 and PD-L1 antagonists.

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

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)

Lung cancer Phase 2 (ECHO-305; ECHO-306) in combination with pembrolizumab (PD-1)
INCMGA0012
(PD-1)1

Solid tumors Phase 1 dose-escalation completed, monotherapy expansion cohorts ongoing
INCB50465
(PI3Kδ)

DLBCL Phase 2 (CITADEL-202)
INCB50465
(PI3Kδ)

Follicular lymphoma Phase 2 (CITADEL-203)
INCB50465
(PI3Kδ)

Marginal zone lymphoma Phase 2 (CITADEL-204)
INCB50465
(PI3Kδ)

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) INCMGA0012 licensed from MacroGenics

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)

Development in AML to be discontinued due to lack of efficacy
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
INCAGN1876
(GITR)2

Dose escalation completed; development expected to focus on combination therapy
INCAGN1949
(OX40)2

Dose escalation completed; development expected to focus on combination therapy
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

Data from the randomized Phase 2 trial of topical ruxolitinib versus vehicle and triamcinolone creams in adult patients with atopic dermatitis are expected in the second half of 2018.

Indication

Status Update

Topical ruxolitinib
(JAK1/JAK2)

Atopic dermatitis Phase 2
Topical ruxolitinib
(JAK1/JAK2)

Vitiligo Phase 2

Partnered – key highlights

In April 2018, the US. Food and Drug Administration (FDA) convened its Arthritis Advisory Committee to discuss the resubmission of the baricitinib NDA, which recommended approval of the 2mg dose of baricitinib as a once-daily oral medication for the treatment of moderately-to-severely active rheumatoid arthritis for adult patients who have had an inadequate response or intolerance to methotrexate. While the Advisory Committee unanimously supported the efficacy of the 4mg dose of baricitinib, it did not recommend approval of the 4mg dose of baricitinib for the proposed indication based on the adequacy of the safety and benefit-risk profiles. The FDA action date for baricitinib is in June 2018.

Indication

Status Update

Baricitinib (JAK1/JAK2)1

Rheumatoid arthritis Approved in Europe and Japan at 2mg and 4mg doses; 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

Corporate Update

In April 2018, Maria E. Pasquale joined the Incyte Executive Management team as Executive Vice President and General Counsel. Maria joined Incyte from Celgene Corporation, where for 17 years she held positions of increasing responsibility including Chief Counsel and Senior Vice President, Legal & Deputy General Counsel, where she led the legal department through Celgene’s global expansion. Most recently, Maria served as Celgene’s Executive Vice President and Global Chief Compliance Officer, responsible for GxP and healthcare compliance globally.

2018 First-Quarter Financial Results

The financial measures presented in this press release for the three months ended March 31, 2018 and 2017 have been prepared by the Company in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), unless otherwise identified as a Non-GAAP financial measure. Management believes that Non-GAAP information is useful for investors, when considered in conjunction with Incyte’s GAAP disclosures. 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. Reconciliations of GAAP net loss to Non-GAAP net income (loss) for the three months ended March 31, 2018 and 2017 have 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.

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.

Revenues For the quarter ended March 31, 2018, GAAP net product revenues of Jakafi were $314 million as compared to $251 million for the same period in 2017, representing 25 percent growth. For the three months ended March 31, 2018, GAAP net product revenues of Iclusig were $21 million as compared to $14 million for the same period in 2017.

For the quarter ended March 31, 2018, GAAP product royalties from sales of Jakavi, which has been out-licensed to Novartis outside of the United States, was $41 million, as compared to $29 million for the same period in 2017. For the quarter ended March 31, 2018, GAAP product royalties from sales of Olumiant outside of the United States from Lilly were $6 million, as compared to less than $1 million for the same period in 2017.

For the quarter ended March 31, 2018, GAAP milestone revenues were $0 million, as compared to $90 million for the same period in 2017. GAAP milestone revenues in 2017 related to milestones earned from our collaborative partners.

For the quarter ended March 31, 2018, total GAAP revenues were $382 million as compared to $384 million for the same period in 2017. Total Non-GAAP revenues for the quarter ended March 31, 2018 were $382 million as compared to $294 million for the same period in 2017.

Year Over Year Revenue Growth
(in thousands, unaudited)

Three Months Ended
March 31, %
2018 2017 Change
Revenues:
Jakafi net product revenue $ 313,720 $ 251,077 25%
Iclusig net product revenue 20,785 13,730 51%
Product royalty revenues 47,716 29,221 63%
Product-related revenues 382,221 294,028 30%
Milestone revenues - 90,000
Other revenues 61 54
Total GAAP revenues $ 382,282 $ 384,082
Milestone revenues - (90,000)
Total Non-GAAP revenues $ 382,282 $ 294,082

Cost of product revenues GAAP cost of product revenues for the quarter ended March 31, 2018 was $18 million, as compared to $15 million for the same period in 2017. Non-GAAP cost of product revenues for the quarter ended March 31, 2018 were $13 million, as compared to $9 million for the same period in 2017. Non-GAAP cost of product revenues exclude the amortization of licensed intellectual property for Iclusig relating to the acquisition of the European business of ARIAD Pharmaceuticals, Inc.

Research and development expenses GAAP research and development expenses for the quarter ended March 31, 2018 were $303 million as compared to $408 million for the same period in 2017. Decreased GAAP research and development expenses were driven primarily by upfront and milestone expenses of $209 million related to our collaborative agreements recorded in the quarter ended March 31, 2017 partially offset by an overall increase in development costs to advance our clinical pipeline. For the quarter ended March 31, 2018, GAAP research and development expenses included $12 million related to our collaboration agreement with Syros Pharmaceuticals, Inc. and $291 million of ongoing expenses.

Non-GAAP research and development expenses for the quarter ended March 31, 2018 were $266 million, as compared to $177 million for the same period in 2017. Non-GAAP research and development expenses exclude the cost of stock-based compensation of $24 million and $21 million for the quarters ended March 31, 2018 and 2017, respectively, and upfront consideration and milestones paid to our collaborative partners of $12 million and $209 million for the quarters ended March 31, 2018 and 2017, respectively.

Selling, general and administrative expenses GAAP selling, general and administrative expenses for the quarter ended March 31, 2018 was $121 million, as compared to $87 million for the same period in 2017. Increased GAAP selling, general and administrative expenses were driven by additional costs related to the commercialization of Jakafi.

Non-GAAP selling, general and administrative expenses for the quarter ended March 31, 2018 was $109 million, as compared to $78 million for the same period in 2017. Non-GAAP selling, general and administrative expenses exclude the cost of stock-based compensation.

Change in fair value of acquisition-related contingent consideration GAAP change in fair value of acquisition-related contingent consideration for the quarters ended March 31, 2018 and 2017 was $7 million.

Unrealized gain (loss) on long term investments GAAP unrealized gain on long term investments for the quarter ended March 31, 2018 was $23 million as compared to an unrealized loss of $6 million for the same period in 2017. The unrealized gain on long term investments for the quarter ended March 31, 2018 represents the fair market value adjustments of the Company’s investments in Agenus, Calithera, Merus, and Syros.

Expense related to senior note conversions GAAP expense related to senior note conversions for the quarter ended March 31, 2017 was $54 million related to the conversions of certain of our 2018 and 2020 convertible senior notes.

Net income (loss) GAAP net loss for the quarter ended March 31, 2018 was $41 million, or $0.19 per basic and diluted share, as compared to a net loss of $187 million, or $0.96 per basic and diluted share for the same period in 2017. Non-GAAP net loss for the quarter ended March 31, 2018 was $3 million, as compared to net income of $29 million for the same period in 2017. Non-GAAP net loss per share for the quarter ended March 31, 2018 was $0.01 per basic and diluted share, as compared to Non-GAAP net income per share of $0.15 per basic and $0.14 per diluted share for the same period in 2017.

Cash, cash equivalents and marketable securities position As of March 31, 2018 and December 31, 2017, cash, cash equivalents and marketable securities totaled $1.2 billion.

2018 Financial Guidance

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

Current Previous
GAAP and Non-GAAP Jakafi net product revenues $1,350 – $1,400 million Unchanged
GAAP and Non-GAAP Iclusig net product revenues $80 – $85 million Unchanged

GAAP Cost of product revenues $85 – $95 million Unchanged
Non-GAAP Cost of product revenues(1) $64 – $74 million Unchanged

GAAP Research and development expenses $1,150 – $1,250 million $1,200 – $1,300 million
Non-GAAP Research and development expenses(2) $1,013 – $1,108 million $1,077 – $1,172 million

GAAP Selling, general and administrative expenses $390 – $410 million $515 – $535 million
Non-GAAP Selling, general and administrative expenses(3) $340 – $355 million $465 – $480 million

GAAP Change in fair value of acquisition-related contingent consideration $30 million Unchanged
Non-GAAP Change in fair value of acquisition-related contingent consideration(4) $0 million Unchanged

(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, upfront consideration of approximately $12 million relating to the Syros collaboration and upfront consideration of $15 million related to a license agreement.
(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.

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.

On May 1, 2018 Obsidian Therapeutics, Inc., a biotechnology company dedicated to the development of next-generation cell and gene therapies with pharmacologic operating systems, reported that two abstracts highlighting preclinical data on the use of its technology for regulation of immunocytokines have been selected for presentation at the 21st Annual Meeting of the American Society of Gene and Cell Therapy (ASGCT) (Free ASGCT Whitepaper), taking place May 16-19, 2018, in Chicago, IL (Press release, Obsidian Therapeutics, MAY 1, 2018, View Source [SID1234525898]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

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

                  Schedule Your 30 min Free Demo!

Details of the poster presentations, both taking place on Wednesday, May 16, 2018, are as follows:

Poster Title: Exogenous In Vitro and In Vivo Regulation of Interleukin-12 Secretion from T Cells Using Destabilizing Domain Technology
Presenter: Dexue Sun
Session Date/Time: Wednesday May 16, 2018, at 5:30 – 7:30 p.m. CT
Session title: Cancer – Immunotherapy, Cancer Vaccines I
Room: Stevens Salon C, D
Abstract number: 113

Poster Title: Dose dependent exogenous regulation of membrane bound Interleukin-15-Interleukin-15 receptor alpha fusion protein for adoptive T-cell therapy
Presenter: Christopher Reardon
Session Date/Time: Wednesday May 16, 2018, at 5:30 – 7:30 p.m. CT
Session title: Cancer – Targeted Gene & Cell Therapy I
Room: Stevens Salon C, D
Abstract number: 133

About Destabilizing Domains

Obsidian uses Destabilizing Domains (DDs) to enable pharmacologic regulation of protein activity for next-generation cell and gene therapies. Obsidian’s DDs are small, fully-human protein domains that confer conditional stability to a fused payload protein. In the absence of a specific small molecule ligand the fusion protein is rapidly degraded, whereas in the presence of the ligand, the fusion protein becomes stable and functional. Obsidian uses this approach to equip engineered cells with controllable functions that can be precisely tuned by the administration of non-immunosuppressive, small molecule medicines that are readily available and dispensed by the treating physician.