On August 8, 2016 Clovis Oncology, Inc. (NASDAQ:CLVS) reported financial results for the quarter ended June 30, 2016, and provided an update on the Company’s clinical development programs and regulatory outlook for the remainder of 2016 (Press release, Clovis Oncology, AUG 8, 2016, View Source;p=RssLanding&cat=news&id=2193846 [SID:1234514361]).

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"We are pleased to have completed the submission of our NDA for rucaparib in the treatment of advanced ovarian cancer in late June," said Patrick J. Mahaffy, President and CEO of Clovis Oncology. "We continue to focus on our broader clinical development program for rucaparib, and are actively preparing for a potential U.S. launch of rucaparib."

Second Quarter 2016 Financial Results

Clovis had $378.5 million in cash, cash equivalents and available-for-sale securities as of June 30, 2016. Cash used in operating activities was $68.0 million for the second quarter of 2016 and $151.7 million for the first half of 2016, compared with $57.2 million and $105.6 million for the comparable periods of 2015. Cash used in operating activities in the second quarter of 2016 was down $15.7 million, or 18.8 percent compared to the first quarter of 2016. Clovis had approximately 38.5 million outstanding shares of common stock as of June 30, 2016.

Clovis reported a net loss of $129.3 million, or ($3.37) per share, for the second quarter of 2016 and $212.7 million or ($5.54) per share for the first half of 2016. Net loss for the second quarter of 2016 included share-based compensation expense of $9.5 million and $20.5 million for the first half of 2016, compared to $8.4 million and $17.1 million for the comparable periods of 2015.

Notably, the net loss for the second quarter and first half of 2016 includes a net expense non-cash impact of $49.9 million relating to the lucitanib product rights recorded in 2013 in connection with the Company’s acquisition of Ethical Oncology Science S.p.A. (EOS), comprised of a $104.5 million non-cash expense for the impairment of the intangible asset, a $25.5 million non-cash expense credit for the reduction in the fair value of the contingent purchase consideration liability and a $29.2 million related non-cash income tax benefit. The adjusted net loss excluding these items was $79.4 million or ($2.07) per share in the second quarter of 2016 and $162.8 million or ($4.24) per share for the first half of 2016. The net loss for the second quarter of 2015 was $71.5 million or ($2.10) per share, and $134.7 million or ($3.96) per share for the first half of 2015.

Research and development expenses totaled $67.7 million for the second quarter of 2016, and $142.3 million for the first half of 2016, compared to $60.4 million and $117.1 million for the comparable periods in 2015. The year-over-year increase in expenses is primarily due to increased development activities for the rucaparib program and increased personnel-related expenses, partially offset by lower expenses related to clinical development activities for rociletinib. In addition, research and development expenses in the second quarter of 2016 were down $6.9 million, or 10.2 percent compared to the first quarter of 2016.

General and administrative expenses totaled $9.6 million for the second quarter of 2016, and $19.4 million for the first half of 2016, compared to $7.2 million and $14.0 million for the comparable periods in 2015. The increase year over year is primarily due to higher legal expense, personnel costs for employees engaged in general and administrative activities and consulting fees.

Clovis expects cash used in operating activities for 2016 will total approximately $294 – $309 million, and to end the year with approximately $220 – $235 million in cash, cash equivalents and available-for-sale securities. The Company anticipates being able to continue to fund operations into 2018 from currently available cash, cash equivalents and available-for-sale securities.

As noted above, in the second quarter of 2016 Clovis recorded a non-cash impairment charge of $104.5 million to reflect a reduction in the estimated fair value of the intangible asset related to lucitanib. This reduction in fair value was the result of Clovis and its development partner’s decision to discontinue enrollment in the ongoing trials and any future development of lucitanib for breast cancer. During the fourth quarter of 2015, Clovis and its development partner discontinued the development of lucitanib for lung cancer. The Company expects to make a decision regarding the future development, if any, of lucitanib during the next several quarters.

In connection with its acquisition of EOS, Clovis is obligated to pay additional consideration to the former EOS shareholders if certain future regulatory and sales milestones for lucitanib are achieved. The estimated fair value of these contingent payments is recorded as a liability on the Company’s balance sheet. During the second quarter of 2016, Clovis recorded a $25.5 million reduction to zero in the fair value of the contingent consideration liability due to the uncertainty of achieving any of the milestones. This reduction is included as a non-cash credit to operating expenses in Clovis’ 2016 results of operations. There are no remaining lucitanib-related liabilities on the Company’s balance sheet.

2016 Key Milestones and Objectives for Rucaparib

During the second quarter of 2016, Clovis completed the submission of its New Drug Application (NDA) regulatory filing to the U.S. Food and Drug Administration (FDA) for rucaparib for the monotherapy treatment of patients with advanced ovarian cancer with deleterious BRCA-mutated tumors (inclusive of both germline and somatic BRCA mutations) previously treated with multiple prior therapies. Rucaparib was granted Breakthrough Therapy designation by the FDA in April 2015. The Company expects the FDA to provide notification in late August whether they have accepted the rucaparib NDA filing for review, and provide a PDUFA date in the event the filing is accepted.

Foundation Medicine, Clovis’ companion diagnostic partner, has submitted a Premarket Approval (PMA) application for its diagnostic assay designed to identify both germline and somatic BRCA mutations with the FDA. The timing of the submission is expected to allow for regulatory approval of the companion diagnostic at substantially the same time that rucaparib could be approved.

In addition, the Company intends to submit its Marketing Authorization Application (MAA) for rucaparib to the European Medicines Agency for a comparable ovarian cancer treatment indication in Q4 2016.

Clovis has completed enrollment in the ARIEL3 Phase 3 randomized maintenance study, with data expected to be available in Q4 2017. Pending positive data, the Company intends to follow up with a supplemental NDA for second-line maintenance therapy in women with ovarian cancer who have responded to platinum based therapy.

During the second quarter Clovis entered into a clinical trial collaboration with Genentech, a member of the Roche Group, to evaluate a novel combination therapy of Genentech’s cancer immunotherapy atezolizumab (MPDL3280A; anti-PDL1) and rucaparib for the treatment of gynecological cancers, with a focus on ovarian cancer. The Phase 1b trial is expected to begin screening patients in Q1 2017.

Also during the fourth quarter of 2016, Clovis intends to initiate the ARIEL4 confirmatory study in advanced BRCA mutant (inclusive of germline and somatic) ovarian cancer and an investigator-sponsored study evaluating rucaparib and bevacizumab in combination as a first-line maintenance therapy for advanced ovarian cancer.

Prostate Cancer Development Plan

Clovis intends to initiate two registration studies of rucaparib in the metastatic castrate-resistant prostate cancer (mCRPC) setting.

The Phase 2 single-arm study is expected to include patients with BRCA mutations and ATM mutations (both inclusive of germline and somatic) or other deleterious mutations in other homologous recombination (HR) repair genes and all patients will have progressed after receiving one line of taxane-based chemotherapy and one or two lines of androgen-receptor (AR) targeted therapy, in the castration-resistant setting. The planned primary end points are radiologic overall response rate in patients with measurable disease and PSA response rate in patients who do not have measurable disease. Clovis intends to initiate this trial during the fourth quarter of 2016.

The Phase 3 comparative study is planned to include BRCA mutant and ATM mutant (both inclusive of germline and somatic) patients who have progressed on AR-targeted therapy and who have not yet received chemotherapy in the castrate-resistant setting. The Phase 3 study will compare rucaparib to physician’s choice of AR-targeted therapy or chemotherapy in these patients. The intended primary end point is radiologic progression-free survival. Clovis intends to initiate this trial during the first quarter of 2017.

An abstract based on the ovarian NDA dataset has been accepted for an oral presentation at the ESMO (Free ESMO Whitepaper) 2016 Congress in October 2016.

About Rucaparib

Rucaparib is an oral, small molecule inhibitor of PARP1, PARP2 and PARP3 being developed for advanced ovarian cancer. Rucaparib was granted Breakthrough Therapy designation by the FDA in April 2015; and in late June 2016, Clovis completed the submission of its NDA to the FDA. Additionally, rucaparib is being developed as maintenance therapy in the ARIEL3 trial for patients with tumors with BRCA mutations and other DNA repair deficiencies beyond BRCA, including those with high genomic loss of heterozygosity (LOH) commonly referred to as "BRCA-like." Data from ARIEL3 are expected in Q4 2017, which is expected to be followed by the submission of a sNDA for a second line or later maintenance indication. Clovis is also exploring rucaparib in other solid tumor types with significant BRCA and BRCA-like populations, including prostate, breast and gastroesophageal cancers. Clovis holds worldwide rights for rucaparib.

About Lucitanib

Lucitanib is an oral, potent inhibitor of the tyrosine kinase activity of vascular endothelial growth factor receptors 1 through 3 (VEGFR1-3), platelet-derived growth factor receptors alpha and beta (PDGFRα-β) and fibroblast growth factor receptors 1 through 3 (FGFR1-3). Clovis, which holds exclusive U.S. and Japanese rights, is collaborating with its development partner Les Laboratoires Servier (Servier) on the global clinical development of lucitanib outside of China.

On August 8, 2016 Flamel Technologies (NASDAQ: FLML) reported its financial results for the second quarter 2016 (Filing, Q2, Flamel Technologies, 2016, AUG 8, 2016, View Source [SID:1234514499]).
Second Quarter Highlights Include:

· Total revenue for second quarter 2016 was $38.9 million, compared to $48.6 million during the same period last year.

· GAAP net loss for the second quarter was ($20.0) million, or ($0.48) per diluted share, compared to GAAP net loss of ($16.9) million, or ($0.42) per diluted share, during the same period last year.

· Adjusted EBITDA was $10.1 million, compared to $23.8 million in the prior year.*

· Adjusted net loss for the second quarter was ($985,000), or ($0.02) per diluted share, compared to an adjusted net income of $11.5 million, or $0.29 per diluted share, during the same period last year. *

· Cash and marketable securities at June 30, 2016 were $154.9 million, compared to $160.0 million at March 31, 2016 and $144.8 million at December 31, 2015.

· Akovaz received FDA approval on April 29, 2016 and is scheduled to launch in August 2016.

* Non-GAAP financial measure. Descriptions of Flamel’s non-GAAP financial measures are included under the caption "Non-GAAP Disclosures and Adjustments" included within this document and reconciliations of such non-GAAP financial measures to their most closely applicable GAAP financial measures are found in the "Supplemental Information" section within this document.

Michael Anderson, Flamel’s Chief Executive Officer, commented, "We are particularly pleased with our second quarter results. Bloxiverz averaged over 40% share of the neostigmine market during the quarter, and Vazculep continued to build share to 32% of the 1mL market volume, while holding all of the 5mL and 10mL markets. We generated revenue of $38.9 million for the quarter and we look forward to launching our third sterile injectable product, Akovaz, this month. We believe the market potential for Akovaz is the largest yet from our portfolio of previously unapproved marketed drugs, or UMDs."

Mr. Anderson continued, "In addition to our strong UMD business, we continue to advance our pipeline of proprietary products forward. We received positive data from our Phase 1b trial with Medusa exenatide and, following guidance from FDA, we will be conducting an alcohol interaction study in the second half of 2016 with our Trigger Lock hydromorphone product to further test its abuse-deterrent capabilities."

"In regards to our most important project, Micropump sodium oxybate, we have been in dialogue with FDA and look forward to finalizing the Special Protocol Assessment for our Phase III trial in the very near term. We continue to make all the necessary preparations associated with running the trial, including registering clinical sites and preparing clinical supplies, in order to hit the ground running once we begin patient enrollment. Our once nightly version of sodium oxybate is a very exciting opportunity for us, and we are on track to complete our study in approximately one year, with the goal of filing a New Drug Application by the end of 2017 or early 2018," concluded Mr. Anderson.

Second Quarter 2016 Results

The Company achieved revenues during the second quarter 2016 of $38.9 million, compared to $48.6 million during the same period last year. In the second quarter 2016, the Company determined that it is now able to estimate the ultimate net selling price of its products at the time of shipment from its warehouse. Previously, the Company was unable to completely estimate certain gross to net deductions that occur throughout the selling channel due to a lack of historical data. . This sales through accounting method resulted in an approximate one month lag between the time product was shipped from the Company’s warehouse until it reached the final customer. As a result of this change, the Company recorded approximately $5.9 million of additional revenue in the second quarter 2016.

On a GAAP basis, the Company recorded a net loss of ($20.0) million during the second quarter 2016, or ($0.48) per diluted share, compared to a net loss of ($16.9) million, or ($0.42) per diluted share, for the same period last year. Included in the net loss for the second quarter 2016 was $23.9 million of charges related to the change in the fair value of related party contingent consideration. Adjusted net loss for the second quarter was ($985,000), or ($0.02) per diluted share, compared to an adjusted net income of $11.5 million, or $0.29 per diluted share, during the same period last year. The decline in adjusted net income and adjusted diluted EPS from the previous year was due to lower product sales resulting from increased competition and higher SG&A from investments in infrastructure, people, and expenses related to the Company’s planned cross-border merger to Ireland from France. The Company recognized a foreign currency exchange gain of $1.7 million in the second quarter 2016, compared to a foreign currency exchange loss of ($3.6) million in the prior year quarter. Please see the Supplemental Information section within this document for a reconciliation of adjusted EBITDA, adjusted net income and adjusted diluted EPS to the respective GAAP amounts.

Sales for the FSC product line were below the Company’s expectations for the second quarter 2016 as the Company continues to work on improving product distribution, increasing third party payer access, and refining territories to maximize representative effectiveness. The Company expects to continue making progress throughout the remainder of the year in this business segment. It recently closed the Charlotte office facility and has strengthened the sales management team.

For the six months ended June 30, 2016 cash flow from operations was $15.9 million, compared to $40.3 million in the same period last year. Cash and marketable securities at June 30, 2016 were $154.9 million, compared to $160.0 million at March 31, 2016.

2016 Revenue and R&D Spending Guidance

As a result of the stronger than expected market share for Bloxiverz, slightly better expected market conditions for Akovaz and the change in the Company’s ability to better estimate net selling price upon shipment of product from its warehouse, the Company is increasing its full year 2016 revenue guidance to the range of $125 to $140 million from its previous guidance range of $110 to $130 million. The Company expects to allocate a substantial amount of its R&D expenses on its sodium oxybate trial; however, timing of the spend will be slightly shifted to 2017 and, as a result, has lowered its 2016 R&D spending guidance to the range or $30 to $40 million from the range of $35 to $50 million.

Clinical Pipeline Updates

Flamel received positive results from a Phase 1b clinical trial of FT228, a once-weekly subcutaneous injection formulation of exenatide using its proprietary Medusa technology. The study achieved all pharmacokinetic (PK) and pharmacodynamic (PD) objectives throughout four weekly administrations of Medusa exenatide (FT228), and assessed the safety, steady-state PK profile and the product’s potential effect on biomarkers and surrogate endpoints upon repeated administrations. Exenatide is a GLP1 analog used to treat patients suffering from Type 2 Diabetes Mellitus. Medusa is a hydrogel depot technology that enables the modified/controlled delivery of drugs, and is ideally suited to the development of subcutaneously administered formulations.

One dose per week of FT228 at 140mcg was administered to twelve Type 2 Diabetes Mellitus patients over a four week period. Following each administration, a continuous release of exenatide was observed over a period of up to 14 days and a relative bioavailability exceeding 94% was demonstrated. The PD performance of FT228 was comparable to current marketed products, Victoza (liraglutide IR) and Bydureon (exenatide SR).

In addition, Flamel received feedback from the U.S. Food and Drug Administration (FDA) regarding the clinical development pathway for FT227, an abuse-deterrent, extended-release, oral hydromorphone product using the Company’s proprietary Trigger Lock drug delivery platform.

To date, the Company has completed two pharmacokinetic (PK) studies of FT227 in 30 healthy volunteers, in addition to an independent in vitro study confirming FT227’s superior resistance to extraction/recovery in various media under several different conditions compared to both Exalgo and Oxycontin. Following guidance from the FDA, Flamel will be conducting during the third quarter of 2016 an in vivo alcohol interaction study, which the Company believes will provide further confirmation of the robust abuse-deterrent capabilities of Trigger Lock.

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On August 8, 2016 Fate Therapeutics, Inc. (NASDAQ: FATE), a biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the second quarter ended June 30, 2016 (Filing, Q2, Fate Therapeutics, 2016, AUG 8, 2016, View Source [SID:1234514362]).

"With the opening of enrollment in our Phase 1/2 clinical trial, we believe we are well-positioned in 2016 to complete the initial safety assessment and begin evaluating the potential of ProTmune for the prevention of life-threatening immunological conditions, including acute GvHD, in cancer patients undergoing allogeneic transplant for which there is a clear unmet and urgent medical need," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "Additionally, we plan to collaborate with the University of Minnesota in filing an IND later this year for our Adaptive NK Cell cancer immunotherapy, which has shown persistent and potent tumor killing independent of antigen recognition in preclinical studies. We believe our allogeneic memory-like NK cell approach is a novel and promising intervention strategy for combating both liquid and solid tumors."

Recent Highlights & Program Updates

· Opened Patient Enrollment in ProTmune Phase 1/2 Clinical Trial. Fate Therapeutics opened patient enrollment across multiple clinical sites in support of its Phase 1/2 clinical trial of ProTmune for the prevention of acute graft-versus-host disease (GvHD) and cytomegalovirus (CMV) infection. The Company expects to enroll 10 subjects in the initial Phase 1 stage of the trial, all of whom will receive ProTmune. Following an independent data monitoring committee safety review of these 10 subjects, a randomized, controlled Phase 2 stage is expected to enroll 60 subjects in a 1:1 ratio. The open-label Phase 1/2 study is designed to evaluate the safety and efficacy profile of ProTmune in adult subjects with hematologic malignancies undergoing allogeneic mobilized peripheral blood (mPB) hematopoietic cell transplantation (HCT).

· Granted Fast Track Designation by the FDA for ProTmune. In June 2016, the U.S. Food and Drug Administration (FDA) granted Fast Track designation for ProTmune for the reduction of incidence and severity of acute GvHD in patients undergoing allogeneic HCT. GvHD is a leading cause of morbidity and mortality in patients undergoing HCT, and there are currently no approved therapies for its prevention.

· Presented Preclinical Data Supporting Clinical Development of Allogeneic Memory-Like NK Cell Product Candidate. At the Innate Killer Summit in May 2016, Dr. Jeffrey Miller, M.D., Professor of Medicine and Deputy Director, University of Minnesota Cancer Center, highlighted in vitro and in vivo preclinical data demonstrating that the Company’s Adaptive NK Cell cancer immunotherapy has enhanced anti-tumor activity, including improved persistence, enhanced cytokine production and increased resistance to immunosuppressive factors in the tumor microenvironment. Additionally, the Company’s Adaptive NK Cell product candidate was shown to synergize with several different therapeutic antibodies in vivo in preclinical studies, significantly augmenting antibody-directed cellular cytotoxicity (ADCC) against solid tumors.

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· Showcased Off-the-Shelf Cancer Immunotherapy Approach Using Renewable Pluripotent Cell Lines. The Company highlighted its patent-protected platform for producing off-the-shelf NK- and T-cell immunotherapies from engineered pluripotent cell lines at the Annual Meeting of the International Society for Stem Cell Research in June 2016. Fate Therapeutics is generating precisely-engineered, highly-stable pluripotent cell lines, from which it derives monoclonal populations of effector cells with enhanced properties, such as persistence, tumor targeting, and resistance to tumor suppression. Similar to master cell lines used for the manufacture of monoclonal antibodies, engineered pluripotent cell lines have the potential to serve as a renewable cell source for the consistent manufacture of homogeneous populations of effector cells for the treatment of many thousands of patients.

· Entered into $10.3M Common Stock Purchase Agreement with Certain Institutional Investors. On August 6, 2016, Fate Therapeutics entered into a securities purchase agreement for a private placement of the Company’s common stock, under which funds managed by Franklin Advisers, Inc., together with certain other institutional investors, agreed to purchase 5.25 million shares of common stock at $1.96 per share for gross proceeds of $10.3 million. The private placement transaction is expected to close on or about August 10, 2016, subject to customary closing conditions. Proceeds from the transaction will be used primarily to advance the Company’s pipeline of programmed cellular immunotherapies and for general corporate purposes. The Company did not use a placement agent in connection with the transaction.

· Appointed Chris M. Storgard, M.D. as Chief Medical Officer. In May 2016, Dr. Chris Storgard joined the Company as Chief Medical Officer. Dr. Storgard is an experienced drug development clinician with a proven history of advancing early stage programs through clinical development and product commercialization. He is primarily responsible for leading the design and execution of the Company’s clinical trials for its product candidates.

Second Quarter 2016 Financial Results

· Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of June 30, 2016 were $45.9 million compared to $64.8 million as of December 31, 2015. The decrease is primarily driven by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank. This balance as of June 30, 2016 did not include $10.3 million in proceeds which the Company expects to receive upon the closing of the private placement transaction.

· Total Revenue: Revenue was $1.0 million for the second quarter of 2016 compared to $0.3 million for the comparable period in 2015. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.

· Total Operating Expenses: Total operating expenses were $9.0 million for the second quarter of 2016 compared to $7.5 million for the comparable period in 2015. Operating expenses for the second quarter of 2016 included $0.8 million of stock compensation expense, compared to $0.7 million for the second quarter of 2015.

· R&D Expenses: Research and development expenses were $6.8 million for the second quarter of 2016 compared to $4.9 million for the comparable period in 2015. The increase in R&D expenses is primarily related to an increase in third-party service provider fees to support the Company’s clinical development of ProTmune and preclinical development of its Adaptive NK Cell product candidate in collaboration with the University of Minnesota, and an increase in personnel expenses resulting from the hiring of additional employees to support the conduct of its research activities, including activities under its collaboration with Juno.

· G&A Expenses: General and administrative expenses were $2.2 million for the second quarter of 2016 compared to $2.7 million for the comparable period in 2015. The decrease in G&A expenses is primarily related to a decrease in intellectual property-related expenses.

· Common Shares Outstanding: Common shares outstanding as of June 30, 2016 were 28.9 million compared to 28.7 million as of December 31, 2015. Common shares outstanding increased primarily as a result of the issuance of shares under the Company’s equity incentive plan. Common shares outstanding as of June 30, 2016 did not include 5.25 million shares which the Company expects to issue upon the closing of the private placement transaction.

On August 8, 2016 Kite Pharma, Inc. (Nasdaq: KITE), a clinical-stage biopharmaceutical company focused on developing engineered autologous cell therapy (eACT) products for the treatment of cancer, reported financial results for the second quarter 2016 and recent business highlights (Press release, Kite Pharma, AUG 8, 2016, View Source [SID:1234514363]).

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"During the second quarter we continued to expand our pipeline, broaden our engineered cell therapy capabilities through access to key enabling technologies, and advance the development of KTE-C19 as a potential first-to-market breakthrough immunotherapy for patients with advanced non-Hodgkin lymphoma (NHL)," noted Arie Belldegrun, M.D., FACS, Chairman, President, and Chief Executive Officer. "We have enrolled all 72 chemorefractory diffuse large B-cell lymphoma (DLBCL) patients in the pivotal portion of our ZUMA-1 study, and Kite remains on track to announce interim data from approximately 50 of these patients at 3-month follow-up later this quarter. Subject to these interim results and discussions with the U.S. Food and Drug Administration (FDA), we expect to submit a Biologics License Application (BLA) for KTE-C19 by the end of 2016. We look forward to sharing details about KTE-C19 commercial preparations, manufacturing readiness and new development programs at our Investor Day and webcast on October 18."

Second Quarter 2016 and Recent Highlights

Completed enrollment of all targeted chemorefractory DLBCL patients (n=72) in the Phase 2 portion of ZUMA-1, the first multi-center pivotal study of engineered T-cell therapy in chemorefractory DLBCL patients.
Obtained access for KTE-C19 to the recently initiated Priority Medicines (PRIME) regulatory initiative from the European Medicines Agency (EMA). PRIME provides early and enhanced regulatory support to optimize regulatory applications and speed up the review of medicines that address a high unmet need.
Reported at the June 2016 annual meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper):
Results from a study conducted at the National Cancer Institute (NCI) of low-dose chemotherapy conditioning followed by anti-CD19 chimeric antigen receptor (CAR) T-cell therapy showing that CAR T-cell therapy was effective in inducing a high response rate in patients with advanced non-Hodgkin lymphoma (NHL). Kite is using a similar conditioning regimen in its ZUMA-1 Study of KTE-C19.
Ongoing complete responses in 3 of 7 patients at 9-month study follow-up in the Phase 1 portion of the ZUMA-1 study of KTE-C19 in chemorefractory DLBCL. Grade 3 or higher cytokine release syndrome was observed in 14% and neurotoxicity in 57% of the Phase 1 patients; all were reversible except in one patient with dose-limiting toxicity.
Findings from a multi-institutional, retrospective meta-analysis of outcomes from 635 patients with chemorefractory DLBCL (SCHOLAR-1). The results document the consistently poor outcomes in this patient population, with an overall response rate of 26%, complete response rate of 8% and median overall survival of 6.6 months.
Opened Kite’s new state-of-the-art commercial manufacturing facility in El Segundo, California, which is expected to be operational for commercial launch in 2017.
Expanded the Company’s development of T-cell receptor (TCR) therapies targeting HPV-associated cancers by entering into a new Cooperative Research and Development Agreement (CRADA) with the Experimental Transplantation and Immunology Branch of the NCI and lead investigator Christian S. Hinrichs, M.D.
Entered a research collaboration with Cell Design Labs, Inc. to develop a molecular "switch" technology that provides dynamic control and precise regulation of engineered CAR-T cells after therapeutic administration.
Accessed technology for the development of allogeneic cell therapies through a license agreement and research collaboration with the Regents of the University of California. The technology platform supports the differentiation of engineered T-cells from pluripotent stem cells.
Appointed Paul Jenkinson, a corporate finance executive with extensive global operations experience, as Chief Financial Officer.
Second Quarter 2016 Financial Results

Revenue was $4.8 million for the second quarter of 2016.
Research and development expenses were $47.4 million for the second quarter of 2016, and include $8.5 million of non-cash stock-based compensation expense.
General and administrative expenses were $23.5 million for the second quarter of 2016, and include $11.3 million of non-cash stock-based compensation.
Net loss was $64.3 million, or $1.31 per share, for the second quarter of 2016.
Non-GAAP net loss for the second quarter of 2016 was $44.5 million, or $0.91 per share, which excludes non-cash stock-based compensation of $19.8 million.
As of June 30, 2016, Kite had $531.1 million in cash, cash equivalents, and marketable securities. Kite continues to expect the full year 2016 net cash burn to be $235 million to $250 million, which includes approximately $20 million in capital expenditures, but excludes any inflows or outflows from future business development activities, if any. The estimated full year 2016 net cash burn is primarily driven by an estimated net loss of $295 million to $310 million, which includes an estimated $80 million of non-cash stock-based compensation expense.

On August 8, 2016 Vericel Corporation (NASDAQ:VCEL), a leading developer of expanded autologous cell therapies for the treatment of severe diseases and conditions, reported financial results for the second quarter ended June 30, 2016 (Press release, Vericel, AUG 8, 2016, View Source [SID:1234514365]).

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Total net revenues for the quarter ended June 30, 2016 were approximately $12.8 million and included approximately $9.0 million of Carticel net revenues and approximately $3.8 million of Epicel net revenues. Previously announced downtime for the Carticel and Epicel cleanrooms to replace a rooftop air handler unit resulted in a two-week, or approximately 16%, reduction in product shipment dates for both products during the second quarter. As a result, total Carticel and Epicel net revenues decreased 3.9% compared to the second quarter of 2015, with Carticel net revenues decreasing less than $0.1 million and Epicel net revenues decreasing approximately $0.4 million, respectively, compared to the second quarter of 2015. For the first half of 2016, total net revenues were $26.9 million and included $17.8 million of Carticel net revenues and $9.1 million of Epicel net revenues. Total Carticel and Epicel net revenues for the first half of 2016 increased 12% compared to the first half of 2015, with Carticel revenues increasing 10% and Epicel revenues increasing 15%, respectively, compared to the same period in 2015.

Gross profit for the quarter ended June 30, 2016 was $5.5 million, or 43% of net product revenues, compared to $6.7 million, or 49% of net product revenues, for the second quarter of 2015. The reduction in gross profit was primarily due to the reduced volume resulting from the cleanroom downtime. Gross profit for the first half of 2016 was $13.1 million, or 49% of net product revenues, compared to $12.0 million, or 49% of net product revenues, for the first half of 2015.

Research and development expenses for the quarter ended June 30, 2016 were $4.1 million compared to $3.4 million in the second quarter of 2015. The increase in second-quarter research and development expenses is primarily due to an increase in expenses associated with the completion of the ixCELL-DCM clinical trial and preparing to treat patients in the open-label crossover extension portion of the study, as well as for research, development, and regulatory consulting expenses for MACI (Autologous Cultured Chondrocytes on Porcine Collagen Membrane). MACI is Vericel’s investigational third-generation autologous cultured chondrocyte implant intended for the treatment of symptomatic full-thickness cartilage defects of the knee.

Selling, general and administrative expenses for the quarter ended June 30, 2016 were $6.4 million compared to $5.6 million for the same period in 2015. The increase in selling, general and administrative expenses is primarily due to costs associated with the start-up of the Dohmen collaboration for patient support and reimbursement services for Carticel and MACI, if approved, professional services related to preparing for the potential launch of MACI, as well as legal fees, shared facility fees and an increase in personnel costs.

Loss from operations for the quarter ended June 30, 2016 was $5.0 million, compared to $2.3 million for the second quarter of 2015. Material non-cash items impacting the operating loss for the quarter included $0.8 million of stock-based compensation expense and $0.5 million in depreciation and amortization expense.

Other income for the quarter ended June 30, 2016 was $1.9 million compared to $0.1 million for the same period in 2015. The change in other income for the quarter is primarily due to the change in the fair value of warrants in the second quarter of 2016 compared to the same period in 2015.

Vericel’s reported GAAP net loss for the quarter ended June 30, 2016 was $3.0 million, or $0.22 per share, compared to a net loss of $2.2 million, or $0.16 per share, for the same period in 2015. Vericel reported an adjusted net loss for the quarter ended June 30, 2016 of $5.0 million dollars, or $0.21 per share, compared to an adjusted net loss of $2.3 million, or $0.10 per share, for the same period in 2015. The adjusted net loss excludes the non-cash change in the fair value of warrants and the non-cash accumulated dividend on the Series B convertible preferred stock. The adjusted net loss per share includes common shares reserved as treasury shares received in exchange for the Series A non-voting convertible preferred stock.

As of June 30, 2016, the company had $9.8 million in cash compared to $14.6 million in cash at December 31, 2015.

Recent Business Highlights

During and since the second quarter of 2016, the company:

Limited the impact of the manufacturing downtime for the Carticel and Epicel cleanrooms; total Carticel and Epicel net revenues increased 12% for the first half of 2016 compared to the same period in 2015;
Initiated the collaboration with Dohmen Life Science Services, LLC for patient support services, as well as payer contracting and product reimbursement services for Carticel and MACI, if approved, which is expected to increase operating profit margin for these products by retaining margin previously captured by a distributor;
Increased MACI launch preparation and operational activities in anticipation of the January 3, 2017, MACI PDUFA goal date;
Announced results from the Phase 2b ixCELL-DCM clinical trial of ixmyelocel-T in patients with advanced heart failure due to ischemic dilated cardiomyopathy, which were presented at the American College of Cardiology’s 65th Annual Scientific Session and published in The Lancet; and
Initiated activities to explore potential expedited development and review pathways and partnering discussions for ixymyelocel-T in the U.S., Japan and Europe in light of meeting the primary endpoint in the ixCELL-DCM clinical trial.
"We are pleased with the commercial performance of the business in light of the manufacturing downtime as we have generated strong growth in our core commercial business during the first half of the year," said Nick Colangelo, president and CEO of Vericel. "We believe that we are building a strong foundation for our cartilage repair franchise, and we look forward to continuing to work productively with the FDA during the ongoing MACI BLA review process as we prepare for the potential launch of MACI, if approved, in the first quarter of 2017."