On August 4, 2016 Apricus Biosciences, Inc. (Nasdaq:APRI), a biopharmaceutical company advancing innovative medicines in urology and rheumatology, reported financial results for the second quarter of 2016 and provided a corporate update on its priorities for 2016 (Press release, Apricus Biosciences, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2193174 [SID:1234514249]).

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"In the second quarter, we sharpened our strategic focus in an effort to maximize the regulatory and commercial success of Vitaros with the goal of building a thriving and profitable global Vitaros brand," stated Richard W. Pascoe, Chief Executive Officer. "Our primary corporate goal continues to be the potential regulatory approval of Vitaros in the United States. In an effort to advance our Vitaros NDA resubmission, we requested, and we were recently granted, a Type B meeting with the FDA, scheduled for November 17, 2016. The purpose of this meeting is to confirm our strategy for addressing the deficiencies contained in the original 2008 Complete Response letter. We will incorporate any FDA feedback into the final submission, which we expect to occur as soon as possible after the meeting. We view the granting of this meeting as a favorable development and a reflection of our commitment to maintaining a constructive relationship with all regulatory authorities. Additionally, we have consolidated Vitaros territories in Europe and Asia with our newest partner Ferring in an effort to expand the global availability of Vitaros and increase revenue in important markets such as Germany. Moreover, we have substantially reduced our operating expenses and improved our balance sheet as part of our strategy to achieve profitability in 2017."

Second Quarter Highlights and Recent Developments

Apricus updated its corporate goals early in the second quarter to focus on increasing Vitaros’ value through the fostering and expansion of its commercial partnerships, in the U.S. and globally, and strengthening the Company’s financial position. Second quarter and recent highlights include:

Expanded the Company’s exclusive Vitaros distribution agreement with Ferring International S.A. in Latin America to now include Germany, Austria, Belgium, Denmark, Finland, Iceland, Luxembourg, Norway, the Netherlands, Sweden, Switzerland and certain countries in Asia (previously Sandoz’s territories), the United Kingdom (previously Takeda’s territory) and Korea for up to an additional $3.85 million in upfront and pre-commercialization milestone payments and up to an additional $1.5 million in launch milestone payments, plus royalties on future net sales;
Closed on a common stock purchase agreement with Aspire Capital. Aspire Capital completed an initial purchase of 2,531,645 shares of common stock for proceeds of $1.0 million and has committed to purchase up to $6.0 million in additional shares of common stock over the next 24 months. No warrants were associated with this agreement;
Announced receipt of regulatory approval of Vitaros in Lebanon by our partner in the Middle East, Elis Pharmaceuticals, marking an important entry into a highly attractive Middle Eastern erectile dysfunction market; and
Obtained regulatory approval in Europe for an improved delivery device material of construction for the refrigerated version of Vitaros.
Strategic Priorities

Apricus continues to focus on achieving the following key strategic objectives:

Vitaros* (alprostadil)

Continue implementation of the U.S. regulatory approval strategy to address the safety and manufacturing issues raised by the FDA in the original Vitaros NDA submission, with an NDA resubmission targeted for the fourth quarter of 2016 and an approval decision expected after a six month review period;
Continue to support the Company’s ex-U.S. partners’ efforts to build a global brand and increase revenue by supporting new commercial launches by the Company’s partners and assisting the Company’s partners in obtaining additional regulatory approvals in their respective territories; and
Continue to generate the required data in 2016 to support delivery device improvements and related regulatory submission(s) with a priority to support the U.S. NDA resubmission of the refrigerated version of Vitaros.
RayVa(alprostadil)

Explore Orphan Drug Designation in the U.S. and EU; and
Explore global or regional partnerships prior to initiating the Phase 2b study.
Corporate/Financial

Reduce operating expenses by approximately 30% in 2016 and 60% in 2017 as compared to 2015 operating expenses; and
Grow Vitaros revenue, seek non-dilutive capital, and utilize lower cost of capital financial instruments to fund operations with the goal of achieving profitability in 2017.
Second Quarter Financial Results

Revenue for each of the quarters ended June 30, 2016 and 2015 was $0.5 million. Revenue during the quarter ended June 30, 2016 was comprised of $0.3 million in royalty revenues, an increase of $0.2 million or 305.3% over the quarter ended June 30, 2015. Revenue during the quarter ended June 30, 2015 included $0.4 million in product sales, the decline of which in 2016 was a result of our commercialization partners working directly with our manufacturers. Net loss for the quarter ended June 30, 2016 was $3.3 million, or loss per share of $0.05, compared to a net loss of $5.2 million, or $0.10 per share for the second quarter of 2015. Reducing the net loss for the quarter ended June 30, 2016 was a non-cash change in the fair value of the Company’s warrant liability in the amount of $1.6 million.

As of June 30, 2016, cash and cash equivalents totaled $2.7 million, compared to $3.9 million as of December 31, 2015. Cash and cash equivalents at June 30, 2016 do not reflect the receipt of $2.0 million in upfront payments received in July related to the Ferring Northern Europe and Asia territory expansion, nor any proceeds from sales of common stock to Aspire Capital.

2016 Financial Outlook

Early in the second quarter of 2016, Apricus reduced its staff, including the executive team, by approximately 30%, decreased the size of the Board by one member and reduced the Board’s cash compensation. Apricus plans to continue to reduce operating expenses (excluding non-cash stock-based compensation expense and depreciation expense), with a goal of achieving reductions of approximately 30% in 2016 and 60% in 2017 as compared to 2015 operating expenses (excluding non-cash stock-based compensation expense and depreciation expense).

In 2016, Apricus expects to continue to generate cash from milestone or licensing payments and royalty revenues from its partners’ sales of Vitaros. Apricus will also continue to pursue out-licensing opportunities for Vitaros in Japan and China. Apricus’ expenditures will include minimal costs for the preparatory Phase 2b clinical development of RayVa, as well as costs for activities associated with supporting the regulatory approval of Vitaros in the U.S. and the commercialization of Vitaros in Europe.

On August 4, 2016 PTC Therapeutics, Inc. (NASDAQ: PTCT) reported a corporate update and reported financial results for the second quarter ending June 30, 2016 (Press release, PTC Therapeutics, AUG 4, 2016, View Source [SID:1234514293]).

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"Making Translarna available to all Duchenne muscular dystrophy patients globally who may benefit continues to be our top priority," said Stuart W. Peltz, Ph.D., Chief Executive Officer, PTC Therapeutics, Inc. "Global sales are on a strong growth trajectory as we continue to expand access outside of the U.S. We are excited patients in England can now access reimbursed Translarna and have received our first commercial order in England following NICE’s final guidance recommending Translarna. On the regulatory front, we are optimistic that our interactions with the EMA will support the renewal of Translarna’s marketing authorization coupled with an obligation to conduct an agreed upon clinical trial, and we look forward to our next steps in the appeal process of the FDA’s Refuse to File letter."

Key Second Quarter and Other Corporate Highlights:

Translarna revenue of $15.4M in second quarter represents 150% year-over-year growth. PTC continues to grow its global commercial footprint and expand access to Translarna. In addition to Europe, PTC is now providing Translarna to patients on a commercial basis in the Middle East and Latin America.
NICE issues final guidance recommending Translarna for patients in England. The National Institute for Health and Care Excellence (NICE) issued final guidance recommending Translarna for the treatment of ambulatory patients aged five years and older with nmDMD in England in connection with a Managed Access Agreement (MAA) with National Health Services (NHS) England. As part of the MAA, NHS England is waiving the typical three-month implementation period under local regulation, making Translarna immediately available to patients in England.
EMA review of European marketing authorization for Translarna continues. Over the last several months, PTC has been engaged in constructive discussions with the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) regarding the renewal of Translarna’s marketing authorization. The company has been informed that the renewal assessment procedure cannot be completed by mid-year 2016. The CHMP has agreed to the proposal by PTC to submit a draft clinical trial protocol for further discussion, which includes seeking scientific advice from the EMA. The company is optimistic that these interactions will support the renewal of the marketing authorization of Translarna coupled with an obligation to conduct an agreed upon clinical trial.
PTC has submitted an appeal to the FDA via the formal dispute resolution process. PTC has appealed the Refuse to File (RTF) letter issued on February 22, 2016 with respect to the company’s New Drug Application (NDA) for Translarna for the treatment of nmDMD. This process elevates the discussion to the next level of FDA management and exists to encourage open, prompt discussion of scientific and procedural disputes that arise during the drug development process between FDA and companies.
ACT CF Phase 3 clinical trial remains on track while EMA review of cystic fibrosis filing for Translarna is ongoing. PTC’s confirmatory Phase 3 ACT CF trial is currently ongoing with the results from this trial expected in early 2017. The EMA is currently reviewing the company’s variation submission to Translarna’s marketing authorization, which requests EMA approval for the treatment of nonsense mutation cystic fibrosis (nmCF). Based on recent interactions with the CHMP, PTC no longer anticipates that the CHMP will issue its opinion regarding this submission in 2016 and believes that ACT CF results may be required prior to any approval in this indication.
Phase 2 Clinical Trial of Translarna for nmDMD in pediatric patients initiated. PTC has initiated a Phase 2 clinical trial of Translarna for the treatment of nmDMD in patients between the ages of two and five years of age. This open-label, multiple-dose study will evaluate the safety and pharmacokinetics of Translarna in pediatric patients and will support the potential expansion of Translarna’s label to younger patients.
Second Quarter Financial Highlights:

Translarna net product sales were $15.4 million for the second quarter of 2016, representing a 150% increase versus $6.2 million in the second quarter of 2015. The increase in sales is a result from the continued global commercial expansion and access to Translarna. Translarna net product sales decreased sequentially from $18.9 million reported in the first quarter of 2016. In the first quarter, Translarna net product sales were positively impacted by a significant order from Brazil, where purchasing is often fulfilled in national bulk orders. The effect of larger but less frequent orders from Brazil may result in fluctuations in quarterly sales reporting during the course of the year.
Total revenues for the second quarter of 2016 were $15.6 million compared to $6.8 million in the same period of 2015. The change in total revenue was a result of the expanded commercial launch of Translarna, partially offset by lower grant revenue.
GAAP R&D expenses were relatively flat at $28.8 million for the second quarter of 2016 compared to $28.2 million for the same period in 2015. Non-GAAP R&D expenses were $24.7 million for the second quarter of 2016, excluding $4.1 million in non-cash, stock-based compensation expense, compared to $24.2 million for the same period in 2015, excluding $4.0 million in non-cash, stock-based compensation expense.
GAAP SG&A expenses were $23.4 million for the second quarter of 2016 compared to $17.2 million for the same period in 2015. Non-GAAP SG&A expenses were $18.7 million for the second quarter of 2016, excluding $4.6 million in non-cash, stock-based compensation expense, compared to $12.8 million for the same period in 2015, excluding $4.4 million in non-cash, stock-based compensation expense. The increase in SG&A expense for the second quarter 2016 as compared to the prior year period primarily resulted from additional costs associated with commercial activities in support of Translarna across Europe and other regions.
Net interest expense for the second quarter of 2016 was $2.1 million compared to net interest income of $0.5 million in the same period in 2015. The increase in interest expense is primarily a result of the $150 million convertible debt offering completed during the third quarter 2015. The debt was recorded on PTC’s balance sheet at a discount, which will be amortized over the life of the bond.
Net loss for the second quarter of 2016 was $38.9 million compared to a net loss of $38.4 million for the same period in 2015.
During the first quarter of 2016, PTC announced a workforce reduction of approximately 18% of its employees and contractors, which resulted in a one-time charge of approximately $2.5 million. PTC incurred $0.6 million of this charge in the second quarter.
Cash, cash equivalents, and marketable securities totaled approximately $273 million at June 30, 2016 compared to approximately $339 million at December 31, 2015.
Shares issued and outstanding as of June 30, 2016 were 34.3 million, which includes 0.2 million shares of unvested restricted stock.
2016 Guidance:

Total ex-U.S. Translarna nmDMD revenues for 2016 are anticipated to be between $65 and $85 million. This guidance assumes current exchange rates and the continued commercial expansion for Translarna in nmDMD outside of the U.S.
Operating expenses for the full year 2016 are anticipated to be between $185 million and $195 million, excluding expected non-cash stock-based compensation expense of approximately $40 million, for total operating expenses of approximately $225 million to $235 million. These expenses will be primarily in support of our ongoing clinical trials for Translarna in nmDMD and nmCF, commercial launch activities for Translarna outside of the US, and the continued research and clinical development of other product pipeline candidates.
PTC expects to end 2016 with cash and cash equivalents over $200 million.
Non-GAAP Financial Measures

In this press release, PTC’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. In particular, non-GAAP financial results exclude stock-based compensation expense. These results are provided as a complement to results reported in GAAP, because management uses these non-GAAP financial measures when assessing and identifying operational trends. In management’s opinion, these non-GAAP measures are useful to investors and other users of our financial statements by providing greater transparency into the operating performance at PTC and the company’s future outlook.

PTC Therapeutics, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

Three Months Ended

Six Months Ended

June 30,

June 30,

2016

2015

2016

2015

Revenues:

Net product revenue
$15,437

$6,161

$34,314

$11,230

Collaboration and grant revenue
196

613

214

3,026

Total revenues
15,633

6,774

34,528

14,256

Operating expenses:

Research and development (1)
28,827

28,190

60,226

56,128

Selling, general and administrative (2)
23,366

17,210

49,304

34,825

Total operating expenses
52,193

45,400

109,530

90,953

Loss from operations
(36,560)

(38,626)

(75,002)

(76,697)

Interest (expense) income, net
(2,060)

498

(4,016)

1,022

Other (expense) income, net
(387)

(88)

(1,107)

(456)

Loss before income tax expense
(39,007)

(38,216)

(80,125)

(76,131)

Income tax benefit (expense)
93

(145)

(22)

(145)

Net loss
($38,914)

($38,361)

($80,147)

($76,276)

Weighted-average shares outstanding (in shares):

Basic and diluted
34,000,333

33,600,653

33,959,751

33,335,674

Net loss per share – basic and diluted (in dollars per share)
($1.14)

($1.14)

($2.36)

($2.29)

(1) Research and development reconciliation

GAAP research and development
$28,827

$28,190

$60,226

$56,128

Less stock-based compensation expense
4,087

3,957

8,415

8,624

Non-GAAP research and development
$24,740

$24,233

$51,811

$47,504

(2) Selling, general and administrative reconciliation

GAAP selling, general and administrative
$23,366

$17,210

$49,304

$34,825

Less stock-based compensation expense
4,649

4,371

9,236

9,452

Non-GAAP selling, general and administrative
$18,717

$12,839

$40,068

$25,373

PTC Therapeutics, Inc.
Summary Consolidated Balance Sheet
(In thousands, except share amounts)

June 30,

December 31,

2016

2015
Cash, cash equivalents and marketable securities
$272,893

$338,925
Total assets
$305,563

$365,281

Total debt
$94,936

$91,848
Total deferred revenue
726

139
Total liabilities
$139,939

$139,280

Total stockholders’ equity (34,083,319 and 33,916,559 common shares

issued and outstanding at June 30, 2016 and December 31, 2015, respectively)
165,624

226,001
Total liabilities and stockholders’ equity
$305,563

$365,281
Upcoming Events:

PTC will participate in the following upcoming conference:

2016 Wedbush PacGrow Healthcare Conference, August 17th at 1:20 p.m. in New York, NY
The presentation will be webcast live on the Events and Presentations page under the investor relations section of PTC’s website at www.ptcbio.com and will be archived for two weeks following the presentation. PTC’s current investor presentation is available at the same website location.

On August 4, 2016 AMRI (NASDAQ: AMRI) reported financial and operating results for the second quarter ended June 30, 2016 and provided an update to its outlook for 2016 (Press release, Albany Molecular Research, AUG 4, 2016, View Source [SID:1234514230]).

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Highlights:

Contract revenue of $116.5 million, up 37% from the second quarter 2015
Recurring royalty revenue of $4.4 million
Reported contract margins of 29%; non-GAAP contract margins of 33%
Reported net loss of ($21.3) million; non-GAAP net income of $12.7 million
Reported diluted EPS $(0.61); non-GAAP diluted EPS of $0.36
Adjusted EBITDA of $26.8 million, up 62% from the second quarter 2015
Updates 2016 outlook to reflect addition of Euticals
Non-GAAP contract margins, non-GAAP net income, non-GAAP diluted EPS and adjusted EBITDA are non-GAAP financial measures. For a discussion of these measures and reconciliations to U.S. GAAP measures, see "Non-GAAP Financial Measures" and Tables 1, 2 and 3.
"Solid execution of our strategy resulted in a successful quarter with strong revenue driven largely by the contributions of our acquisitions and strong performances in our commercial operations," said William S. Marth, AMRI’s president and chief executive officer. Higher margin businesses such as Whitehouse Labs and Gadea, as well as strong results in our DDS and Drug Product businesses significantly enhanced our performance this quarter.

We are confident that our plan will enable us to meet our outlook for the full year 2016, especially with the addition of Euticals, which brings us compelling strategic benefits and adds to our ability to generate meaningful value for our customers and shareholders longer term."

Second Quarter 2016 Results

Total revenue for the second quarter of 2016 was $120.8 million, an increase of 35%, compared to total revenue of $89.5 million reported in the second quarter of 2015.

Total contract revenue for the second quarter of 2016 was $116.5 million, an increase of 37%, compared to $85.2 million reported in the second quarter of 2015. Contract margins were 29% in the second quarter of 2016, compared with 24% for the second quarter of 2015. Non-GAAP contract margins were 33% for the second quarter of 2016, compared with 26% for the second quarter of 2015. The improvement in contract margins was driven largely by the addition of Gadea Pharmaceuticals.

Recurring royalty revenue in the second quarter of 2016 was $4.4 million, consistent with the second quarter of 2015, and reflects an increase in net sales of amphetamine salts as reported by Allergan, offset by the elimination of royalties on Allegra (fexofenadine) products which ended in the second quarter 2015. Recurring royalty revenue for the second quarter of 2016 includes $3.8 million from the net sales of certain amphetamine salts sold by Allergan and royalties from an API sourced from our business in Spain.

Research and development expense in the second quarter of 2016 was $3.5 million, up from $0.4 million in the second quarter 2015, reflecting increased investment in collaboration agreements and our API portfolio, and the addition of Gadea Pharmaceuticals.

Net loss under U.S. GAAP was $(21.3) million, or $(0.61) per basic and diluted share, in the second quarter of 2016, compared to U.S. GAAP net income of $2.3 million, or $0.07 per basic and diluted share in the second quarter of 2015. Non-GAAP net income in the second quarter of 2016 was $12.7 million or non-GAAP earnings per diluted share of $0.36, compared to non-GAAP net income of $7.4 million or non-GAAP earnings per diluted share of $0.22 for the second quarter of 2015.

Adjusted EBITDA in the second quarter of 2016 was $26.8 million, an increase of $10.3 million or 62% compared to the second quarter 2015.

For a reconciliation of non-GAAP financial measures to U.S. GAAP financial measures for the 2016 and 2015 reporting periods, please see Tables 1, 2 and 3 at the end of this press release.

Year-to-Date Results

Total revenue for the six-month period ended June 30, 2016 was $226.4 million, an increase of 32% compared to total revenue of $171.4 million reported for the six-month period ended 2015.

Contract revenue for the six-month period ended June 30, 2016 was $219.3 million, an increase of 37% compared to $160.4 million reported for the six-month period ended June 30, 2015. Contract margins reported under GAAP were 26% for the six-month period ended June 30, 2016, compared with 23% for the six-month period ended June 30, 2015. Non-GAAP contract margins were 30% for the six-month period ended June 30, 2016, compared with 25% for the six-month period ended June 30, 2015.

Recurring royalty revenue for the six-month period ended June 30, 2016 was $7.1 million, a decrease of 36% from $11.0 million for the six-month period ended June 30, 2015 due to the expiration of Allegra (fexofenadine) royalties in the second quarter of 2015. Recurring royalty revenue for the six-month period ended June 30, 2016 includes $6.0 million from the net sales of certain amphetamine salts sold by Allergan and royalties from an API sourced from our business in Spain.

Research and development expense for the six month period ended June 30, 2016 was $6.6 million, up from $0.9 million for the six-month period ended June 30, 2015, due to increased investment in collaboration agreements and our API portfolio, and the addition of Gadea.

Net loss under U.S. GAAP was $(31.3) million, or $(0.90) per basic and diluted share for the six-month period ended June 30, 2016, compared to U.S. GAAP net income of $0.1 million, or $0.00 per basic and diluted share for the six-month period ended June 30, 2015. Non-GAAP net income for the six-month period ended June 30, 2016 was $15.0 million or non-GAAP earnings per diluted share of $0.42, compared to non-GAAP net income of $13.8 million or non-GAAP earnings per diluted share of $0.42 for the six-month period ended June 30, 2015.

Adjusted EBITDA for the six-month period ended June 30, 2016 was $39.8 million, an increase of $7.8 million or 24% compared to the six-month period ended June 30, 2015.

Segment Results

Active Pharmaceutical Ingredients (API)

Three Months Ended

Six Months Ended

June 30,

June 30,
(Unaudited; $ in thousands)

2016

2015

2016

2015

API Contract Revenue

65,447

39,997

120,149

77,845
API Royalty Revenue

4,353

2,535

7,094

5,403
API Total Revenue

$ 69,800

$ 42,532

$ 127,243

$ 83,248

Cost of Contract Revenue

46,279

28,434

87,200

57,017

Gross Profit, excluding royalties

19,168

11,563

32,949

20,828
Gross Profit, including royalties

23,521

14,098

40,043

26,231

Gross Margin, excluding royalties

29.3%

28.9%

27.4%

26.8%
Gross Margin, including royalties

33.7%

33.1%

31.5%

31.5%

Non-GAAP Gross Profit, excluding royalties (1)

22,719

11,776

39,963

21,218
Non-GAAP Gross Margin, excluding royalties (1)

34.7%

29.4%

33.3%

27.3%

Non-GAAP Gross Profit, including royalties (1)

27,072

14,311

47,057

26,621
Non-GAAP Gross Margin, including royalties (1)

38.8%

33.6%

37.0%

32.0%

(1) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross profit and contract gross margin to non-GAAP contract gross profit and non-GAAP contract gross margin as a percentage of contract revenue.

API contract revenue for the second quarter of 2016 increased 64% compared to the second quarter of 2015, primarily due to $28.1 million of incremental revenue from the acquisition of Gadea Pharmaceuticals, partially offset by lower revenue associated with the Holywell, UK site closure. API contract margin excluding royalties, determined under GAAP for the second quarter of 2016 was consistent with the second quarter of 2015. API non-GAAP contract margin excluding royalties for the second quarter of 2016 increased 5 percentage points from 2015, driven by the margins realized on Gadea Pharmaceutical’s revenues.

API royalty revenue in the second quarter of 2016 increased $1.8 million over the second quarter of 2015 and includes $3.8 million from the net sales of certain amphetamine salts sold by Allergan. The increase reflects an increase in net sales of amphetamine salts as reported by Allergan and royalties from an API sourced from our business in Spain.

For the six-month period ended June 30, 2016, API contract revenue increased $42.3 million or 54%, due primarily to $48.1 million of incremental revenue from the acquisition of Gadea Pharmaceuticals, partially offset by lower revenue associated with the Holywell, UK site closure.

API contract margin excluding royalties determined under GAAP for the six-month period ended June 30, 2016 was consistent with the six-month period ended June 30, 2015. API non-GAAP contract margin excluding royalties for the six-month period ended June 30, 2016 increased 6 percentage points compared to the six-month period ended June 30, 2015, driven by the margins realized on Gadea Pharmaceuticals’ revenues.

Drug Discovery Services (DDS)

Three Months Ended

Six Months Ended

June 30,

June 30,
(Unaudited; $ in thousands)

2016

2015

2016

2015

DDS Contract Revenue (1)

$ 25,820

$ 21,399

$ 49,023

$ 39,273
Cost of Contract Revenue (1)

18,363

16,003

35,533

29,708
Contract Gross Profit

7,457

5,396

13,490

9,565
Contract Gross Margin

28.9%

25.2%

27.5%

24.4%

Non-GAAP Contract Gross Profit (2)

8,042

5,964

14,590

10,289
Non-GAAP Contract Gross Margin (2)

31.1%

27.9%

29.8%

26.2%

(1) A portion of the 2015 amounts were reclassified from DDS to DPM to better align business activities within our reporting segments.

(2) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross profit and contract gross margin to non-GAAP contract gross profit and non-GAAP contract gross margin as a percentage of contract revenue.

Discovery and Development Services ("DDS") contract revenue for the second quarter of 2016 increased 21% compared to the second quarter of 2015, primarily due to $3.1 million of incremental revenue from the acquisition of Whitehouse Laboratories and organic growth, partially offset by lower revenue associated with our Singapore operations.

DDS contract margin determined under GAAP increased 4 percentage points in the second quarter of 2016 as compared to the second quarter of 2015. DDS non-GAAP contract margin increased 3 percentage points for the second quarter of 2016 as compared to the second quarter of 2015, driven by the margins realized on Whitehouse Laboratories’ revenue.

For the first half of 2016, DDS contract revenue increased $9.8 million or 25%, due primarily to $5.8 million of incremental revenue from the acquisition of Whitehouse Laboratories and strong organic growth, partially offset by lower revenue associated with our Singapore operations.

DDS contract margin determined under GAAP for the six-month period ended June 30, 2016 increased 3 percentage points compared with the six-month period ended June 30, 2015. DDS non-GAAP contract margin for the six-month period ended June 30, 2016 increased 4 percentage points from the six-month period ended June 30, 2015, driven by the margins realized on Whitehouse Laboratories’ revenues.

Drug Product Manufacturing (DPM)

Three Months Ended

Six Months Ended

June 30,

June 30,
(Unaudited; $ in thousands)

2016

2015

2016

2015

DPM Contract Revenue (1)

$ 25,190

$ 23,830

$ 50,123

$ 43,240
Cost of Contract Revenue (1)

17,572

20,231

38,844

36,082
Contract Gross Profit

7,618

3,599

11,279

7,158
Contract Gross Margin

30.2%

15.1%

22.5%

16.6%

Non-GAAP Contract Gross Profit (2)

7,864

4,253

11,836

7,983
Non-GAAP Contract Gross Margin (2)

31.2%

17.8%

23.6%

18.5%

(1) A portion of the 2015 amounts were reclassified from DDS to DPM to better align business activities within our reporting segments.

(2) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross profit and contract gross margin to non-GAAP contract gross profit and non-GAAP contract gross margin as a percentage of contract revenue.

DPM contract revenue determined under GAAP for the second quarter of 2016 increased 6% compared to the second quarter 2015, due to strong demand at our development and commercial manufacturing facilities, and $2.5 million of contract termination revenue related to the early termination of one of our collaboration arrangements.

DPM contract margin for the second quarter 2016 increased 15 percentage points compared to the second quarter of 2015. DPM non-GAAP contract margin for the second quarter of 2016 increased 13 percentage points compared to the second quarter of 2015, due to $2.5 million of contract termination revenue and enhanced operational efficiencies at our Albuquerque manufacturing facility.

DPM contract revenue for the six-month period ended June 30, 2016 increased 16% compared to the six-month period ended June 30, 2015, due primarily to $2.5 million of contract termination revenue.

DPM contract margin determined under GAAP for the six-month period ended June 30, 2016 increased 6 percentage points compared to the six-month period ended June 30, 2015. Drug Product Manufacturing non-GAAP contract margin for the six-month period ended June 30, 2016 increased 5 percentage points compared to the six-month period ended June 30, 2015, driven by contract termination revenue.

Liquidity and Capital Resources

At June 30, 2016, AMRI had cash, cash equivalents and restricted cash of $31.4 million, compared to $47.2 million at March 31, 2016. The decrease in cash and cash equivalents for the quarter ended June 30, 2016 was primarily due to the use of $13.3 million for capital expenditures and $5 million of debt paydown, partially offset by cash generated by operating activities of $3.5 million. At December 31, 2015, AMRI had cash, cash equivalents and restricted cash of $52.3 million. The decrease in cash and cash equivalents for the six months ended June 30, 2016 was primarily due to the use of $25 million for capital expenditures and $10.8 million of debt paydown, partially offset by cash generated by operating activities of $15.2 million.

Financial Outlook

AMRI’s guidance takes into account a number of factors, including expected financial results for 2016, anticipated tax rates and shares outstanding. The guidance includes the impact from the acquisition of Prime European Therapeuticals S.p.A., ("Euticals"), which closed on July 11, 2016.

AMRI’s estimates for full year 2016, including the addition of Euticals, are as follows:

Full Year 2016 revenue of $590 to $615 million, reflecting approximately $123 million of incremental revenue from Euticals, an increase of 50% at the midpoint, including:
DDS revenue growth of 27% to approximately $106 million
API revenue growth of 76% to approximately $362 million
DPM revenue growth of 10% to approximately $107 million
Fine Chemicals revenue of $16 million
Royalty revenue of $10 to $11 million
Non-GAAP contract margin of approximately 29%
Non-GAAP selling, general and administrative expenses of approximately 14% of revenue
R&D expense of between $12 and $13 million
Adjusted EBITDA between $108 and $114 million, an increase of 47% at the midpoint
Non-GAAP diluted EPS between $1.03 and $1.11, based on an average fully diluted share count of approximately 39 million shares
Non-GAAP effective tax rate of approximately 30-31%
Capital expenditures of approximately $48 million
Reflecting the recurring seasonality in AMRI’s business and greater contribution from Euticals in the fourth quarter, the Company currently expects the percentage of non-GAAP diluted EPS in the second half of 2016 to be approximately 20% in the third quarter and 80% in the fourth quarter.

On August 4, 2016 Emergent BioSolutions Inc. (NYSE:EBS) reported financial results for the quarter and six months ended June 30, 2016 (Press release, Emergent BioSolutions, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2193280 [SID:1234514252]).

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FINANCIAL HIGHLIGHTS
Total revenues: Q2 2016 of $101.5 million; six months 2016 of $212.5 million
GAAP net loss: Q2 2016 of $(10.9) million, or $(0.27) per diluted share; six months 2016 of $(7.0) million, or $(0.17) per diluted share
Adjusted net income/loss: Q2 2016 net loss of $(7.1) million, or $(0.18) per diluted share; six months 2016 net income of $0.3 million, or $0.01 per diluted share
EBITDA: Q2 2016 of $(4.8) million, or $(0.12) per diluted share; six months of $12.4 million, or $0.31 per diluted share
Adjusted EBITDA: Q2 2016 of $(2.2) million, or $(0.05) per diluted share; six months 2016 of $17.3 million, or $0.43 per diluted share

Q2 2016 & RECENT BUSINESS ACCOMPLISHMENTS
Spin-off of Aptevo Therapeutics completed
Repurchase program for up to $50 million of the Company’s common stock authorized
Building 55 milestones achieved towards Food and Drug Administration (FDA) licensure
Supplemental Biologics License Application accepted
Pre-approval inspection completed
PDUFA date of August 15, 2016 established
BioThrax (Anthrax Vaccine Adsorbed) granted Orphan Drug status by the FDA for post-exposure prophylaxis (PEP) of anthrax disease
Centers for Disease Control and Prevention (CDC) confirmed intent to award a follow-on procurement contract for BioThrax (Anthrax Vaccine Adsorbed) by September 23, 2016
U.S. Department of Health and Human Services (HHS) issued a request for proposal seeking a next generation anthrax vaccine; today the company submitted a response proposing its product candidate NuThrax (Anthrax Vaccine Adsorbed with CPG 7909 Adjuvant)
Task order for up to $21.9 million to develop and manufacture three cGMP lots of a Zika vaccine received from the Biomedical Advanced Research and Development Authority
2016 OUTLOOK
The Company will continue to temporarily postpone its financial guidance for 2016 until further clarity is reached on the following U.S. government contracts and solicitations:
Current BioThrax procurement contract: By letter dated April 26, 2016 the CDC indicated that it anticipated procuring less than the total remaining doses of BioThrax under the existing procurement contract and did not quantify the number of doses anticipated to be procured.
Follow-on BioThrax procurement contract: On June 21, 2016, HHS issued a Sole Source Notification indicating its intention by September 23, 2016 to award to the Company a follow-on contract to procure 29.4 million doses of BioThrax with a period of performance of five years. The terms of the contract, including the price per dose and the timing of deliveries, remain subject to contract negotiation.
Notice of Solicitation for Next Generation Anthrax Vaccine: On June 21, 2016, HHS issued a request for proposal seeking a next generation anthrax vaccine for post-exposure prophylaxis of anthrax disease with the ability to confer protection in one or two doses and meeting additional specific criteria relating to safety, efficacy and manufacturing.
2016 FINANCIAL PERFORMANCE
(I) Quarter Ended June 30, 2016 (unaudited)
Revenues
Product Sales
For Q2 2016, product sales were $58.5 million, a decrease of 29% as compared to 2015. The decrease in BioThrax sales was primarily due to a reduction in shipments to the CDC consistent with the April 26, 2016 letter from CDC that indicated that it anticipated procuring less than the total remaining doses of BioThrax under the existing procurement contract. The increase in Other Biodefense sales was primarily due to VIGIV sales to the Strategic National Stockpile (SNS). The increase in Aptevo sales was mainly due to increased sales of IXINITY (received FDA licensure and launched in Q2 2015).

(in millions) Three Months Ended
June 30,
2016 2015 % Change
Product Sales
BioThrax $ 40.0 $ 72.2 (45 )%
Other Biodefense $ 8.3 $ 2.8 192 %
Total Biodefense $ 48.3 $ 75.1 (36 )%
Total Aptevo Products $ 10.2 $ 6.9 47 %
Total Product Sales $ 58.5 $ 82.0 (29 )%

Contract Manufacturing
For Q2 2016, revenue from the Company’s contract manufacturing operations was $10.2 million, an increase of 15% as compared to 2015. The increase is due primarily to services related to plasma collection and related testing activities.
Contracts, Grants and Collaborations
For Q2 2016, contracts, grants and collaborations revenue was $32.8 million, a decrease of 7% as compared to 2015.
Operating Expenses
Cost of Product Sales and Contract Manufacturing
For Q2 2016, cost of product sales and contract manufacturing was $35.6 million, an increase of 31% as compared to 2015, attributable to an increase in rejected BioThrax work-in-process material, as well as increased Other Biodefense and Aptevo product sales.
Research and Development
For Q2 2016, gross research and development (R&D) expenses were $35.3 million, a decrease of 14% as compared to 2015. The decrease primarily reflects lower contract service costs.
For Q2 2016, net R&D expenses were $2.5 million, a decrease of 55% as compared to 2015. Net R&D expenses, which are more representative of the Company’s actual out-of-pocket investment in product development, are calculated as gross research and development expenses less contracts, grants and collaboration revenues.
(in millions) Three Months Ended
June 30,
2016 2015 % Change
Research and Development Expenses (Gross) $ 35.3 $ 40.9 (14 )%
Adjustments:
– Contracts, grants and collaborations revenues $ 32.8 $ 35.2 (7 )%
Net Research and Development Expenses $ 2.5 $ 5.7 (55 )%

Selling, General and Administrative
For Q2 2016, selling, general and administrative expenses were $44.1 million, an increase of 21% as compared to 2015. This increase includes costs associated with the Aptevo spin-off along with increased professional services to support our strategic growth initiatives, higher IXINITY selling costs, and information technology investments.
Net Income/(Loss)
For Q2 2016, GAAP net loss was $(10.9) million, or $(0.27) per diluted share, versus GAAP net income of $14.1 million, or $0.32 per diluted share, in 2015.
(II) Six Months Ended June 30, 2016 (unaudited)
Revenues
Product Sales
For the six months of 2016, product sales were $130.3 million, an increase of 30% as compared to 2015. The increase in BioThrax sales was primarily due to the suspension of shipments to the CDC in Q1 2015 following the discovery of foreign particles in a limited number of vials in two manufactured lots of BioThrax, resulting in reduced sales volume in the first half of 2015. The decrease in Other Biodefense sales was primarily due to lower RSDL shipments. The increase in Aptevo sales was mainly due to increased sales of IXINITY.

(in millions) Six Months Ended
June 30,
2016 2015 % Change
Product Sales
BioThrax $ 99.1 $ 72.2 37 %
Other Biodefense $ 13.0 $ 14.8 (12 )%
Total Biodefense $ 112.1 $ 87.1 29 %
Total Aptevo Products $ 18.1 $ 13.3 37 %
Total Product Sales $ 130.3 $ 100.3 30 %

Contract Manufacturing
For the six months of 2016, revenue from the Company’s contract manufacturing operations was $17.7 million, a decrease of 16% as compared to 2015. The change is primarily due to a decrease of $3.8 million from services related to the production of an MVA Ebola vaccine in 2015.
Contracts, Grants and Collaborations
For the six months of 2016, contracts, grants and collaborations revenue was $64.5 million, a decrease of 6% as compared to 2015.
Operating Expenses
Cost of Product Sales and Contract Manufacturing
For the six months of 2016, cost of product sales and contract manufacturing was $64.1 million, an increase of 39% as compared to 2015, primarily attributable to the 37% increase in BioThrax product sales.
Research and Development
For the six months of 2016, gross research and development (R&D) expenses were $69.5 million, a decrease of 13% as compared to 2015. The decrease primarily reflects lower contract service costs.
For the six months of 2016, net R&D expenses were $5.0 million, a decrease of 56% as compared to 2015.
(in millions) Six Months Ended
June 30,
2016 2015 % Change
Research and Development Expenses (Gross) $ 69.5 $ 79.6 (13 )%
Adjustments:
– Contracts, grants and collaborations revenues $ 64.5 $ 68.3 (6 )%
Net Research and Development Expenses $ 5.0 $ 11.3 (56 )%

Selling, General and Administrative
For the six months of 2016, selling, general and administrative expenses were $83.9 million, an increase of 18% as compared to 2015. This increase includes costs associated with the Aptevo spin-off along with increased professional services to support our strategic growth initiatives, additional selling effort for IXINITY, and information technology investments.
Net Loss
For the six months of 2016, GAAP net loss was $(7.0) million, or $(0.17) per diluted share, versus GAAP net loss of $(7.4) million, or $(0.19) per diluted share, in 2015.
(III) RECONCILIATION OF GAAP NET INCOME/(LOSS) TO ADJUSTED NET INCOME/(LOSS), EBITDA AND ADJUSTED EBITDA
This press release contains three financial measures (Adjusted Net Income/(Loss), EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), and adjusted EBITDA) that are considered "non-GAAP" financial measures under applicable Securities and Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles. The Company’s definition of these non-GAAP measures may differ from similarly titled measures used by others. Adjusted Net Income/(Loss) adjusts for specified items that can be highly variable or difficult to predict, or reflect the non-cash impact of charges resulting from purchase accounting. EBITDA reflects net income excluding the impact of depreciation, amortization, interest expense and provision for income taxes. Adjusted EBITDA also excludes specified items that can be highly variable and the non-cash impact of certain purchase accounting adjustments. The Company views these non-GAAP financial measures as a means to facilitate management’s financial and operational decision-making, including evaluation of the Company’s historical operating results and comparison to competitors’ operating results. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to the corresponding GAAP financial measure, may provide a more complete understanding of factors and trends affecting the Company’s business.
The determination of the amounts that are excluded from these non-GAAP financial measures are a matter of management judgment and depend upon, among other factors, the nature of the underlying expense or income amounts. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.
Reconciliation of GAAP Net Income/(Loss) to Adjusted Net Income/(Loss)
The following table provides a reconciliation of GAAP Net Income/(Loss) to Adjusted Net Income/(Loss) for the three month periods as indicated.

(in millions, except per share value) Three Months Ended June 30,
2016 2015 Source
GAAP Net Income/(Loss) $ (10.9 ) $ 14.1 NA
Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 2.6 1.4 SG&A
+ Non-cash amortization charges 2.8 2.8 COGS, SG&A,
Other Income
Tax effect (1.6 ) (1.3 ) NA
Total Adjustments 3.8 2.9 NA
Adjusted Net Income/(Loss)
Adjusted Net Income/(Loss) per Diluted Share
$
$ (7.1
(0.18 )
) $
$
17.0
0.36
NA
The following table provides a reconciliation of GAAP Net Loss to Adjusted Net Income/(Loss) for the six month periods as indicated.
(in millions, except per share value) Six Months Ended June 30,
2016 2015 Source
GAAP Net Loss $ (7.0 ) $ (7.4 ) NA
Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 4.9 2.5 SG&A
+ Non-cash amortization charges 5.5 5.3 COGS, SG&A,
Other Income
+ Impact of purchase accounting on inventory step-up – 0.1 SG&A
Tax effect (3.1 ) (2.4 ) NA
Total Adjustments 7.3 5.6 NA
Adjusted Net Income/(Loss)
Adjusted Net Income/(Loss) per Diluted Share $
$ 0.3
0.01
$
$ (1.8
(0.05 )
) NA
Reconciliation of GAAP Net Income/(Loss) to EBITDA and Adjusted EBITDA
The following table provides a reconciliation of GAAP Net Income/(Loss) to EBITDA and Adjusted EBITDA for the three month periods as indicated.

(in millions, except per share value) Three Months Ended June 30,
2016 2015
GAAP Net Income/(Loss) $ (10.9 ) $ 14.1
Adjustments:
+ Depreciation & Amortization 8.5 8.4
+ Provision For/(Benefit From) Income Taxes (3.9 ) 5.5
+ Total Interest Expense 1.5 1.6
Total Adjustments 6.1 15.5
EBITDA
EBITDA per Diluted Share $
$ (4.8
(0.12
)
) $
$ 29.6
0.62

Additional Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 2.6 1.4
Total Additional Adjustments 2.6 1.4
Adjusted EBITDA
Adjusted EBITDA per Diluted Share $
$ (2.2
(0.05
)
) $
$ 31.0
0.65

The following table provides a reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA for the six month periods as indicated.
(in millions, except per share value) Six Months Ended June 30,
2016 2015
GAAP Net Loss $ (7.0 ) $ (7.4 )
Adjustments:
+ Depreciation & Amortization 17.0 16.5
+ Provision For/(Benefit From) Income Taxes (0.6 ) (2.8 )
+ Total Interest Expense 3.0 3.3
Total Adjustments 19.4 17.0
EBITDA
EBITDA per Diluted Share $
$ 12.4
0.31
$
$ 9.6
0.25
Additional Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 4.9 2.5
+ Impact of purchase accounting on inventory step-up - 0.1
Total Additional Adjustments 4.9 2.6
Adjusted EBITDA
Adjusted EBITDA per Diluted Share $
$ 17.3
0.43 $
$ 12.2
0.32

On August 4, 2016 Radius Health, Inc. ("Radius" or the "Company") (Nasdaq:RDUS), a science-driven biopharmaceutical company that is committed to developing innovative therapeutics in the areas of osteoporosis, oncology and endocrine diseases, reported its financial results for the second quarter ended June 30, 2016, and provided a business update (Press release, Radius, AUG 4, 2016, View Source [SID:1234514295]). As of June 30, 2016, Radius had $400.9 million in cash, cash equivalents and marketable securities.

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"We are pleased to be working with the U.S. Food and Drug Administration and European Medicines Agency as they review our regulatory submissions for abaloparatide-SC for the treatment of postmenopausal osteoporosis. In anticipation of our first potential launch, we are building our commercial organization in the U.S. and continuing our productive partnering discussions," said Robert Ward, President and Chief Executive Officer of Radius. "At the same time, we continue to make steady progress in the development of an optimized transdermal patch line extension for abaloparatide as well as the advancement of our two oncology programs, both of which we believe can add substantial value to Radius."

Pipeline Updates

Abaloparatide-SC

In May 2016, Radius’ new drug application ("NDA") in the United States for abaloparatide-SC for the treatment of postmenopausal women with osteoporosis was accepted for filing by the FDA and was granted a Prescription Drug User Fee Act (PDUFA) date of March 30, 2017. Radius’ marketing authorisation application ("MAA") to the European Medicines Agency ("EMA"), was validated in December 2015 and is currently undergoing regulatory review. We anticipate a CHMP scientific opinion in late 2016 or 2017.

Abaloparatide-TD

Radius is developing abaloparatide-transdermal, or abaloparatide-TD, based on 3M’s patented Microstructured Transdermal System technology for potential use as a short wear-time transdermal patch. Radius commenced a human replicative clinical evaluation of the optimized abaloparatide-TD patch in December 2015 with the goal of achieving comparability to abaloparatide-SC. An abstract submitted to the American Society for Bone Mineral Research 2016 Annual Meeting (ASBMR) was accepted as an oral late-breaking presentation to be made on September 19, 2016 in Atlanta, Georgia.

RAD1901

In December 2014, Radius commenced a Phase 1 multicenter, open-label, two-part, dose-escalation study of RAD1901 in postmenopausal women with estrogen receptor positive (ER+) and HER2-negative advanced breast cancer in the United States. The Phase 1 study is designed to evaluate escalating doses of RAD1901 in Part A. The Part B expansion cohorts allow for an evaluation of additional safety, tolerability and preliminary efficacy. In addition, in December 2015, Radius commenced a Phase 1 FES-PET study in patients with ER+, HER2-negative advanced breast cancer in the European Union, which includes the use of FES-PET imaging to assess estrogen receptor occupancy in tumor lesions following RAD1901 treatment.

As of the end of July, the Phase I Part B expansion cohort for RAD1901 that initiated in March 2016 at 400 mg daily in ER+, HER2-negative advanced breast cancer has enrolled 19 out of 20 patients. We continue to enroll patients in the European Phase I FES-PET trial — the first three-patient dosing cohort is enrolled. We are pleased with the progress across these trials and expect to provide an update on the RAD1901 program at an upcoming scientific meeting.

RAD140

We have reported that RAD140 in preclinical xenograft models of breast cancer has demonstrated potent tumor growth inhibition when administered alone or in combinations with CDK4/6 inhibitors. It is estimated that 77% of breast cancers show expression of the androgen receptor. Our preclinical data suggest that RAD140 activity at the androgen receptor stimulates up-regulation of a tumor suppression pathway. We expect to provide an update on the RAD140 program at an upcoming scientific meeting.

Radius Expects the Following Upcoming Milestones

Abaloparatide-SC
Receive opinion from the Committee for Medicinal Products for Human Use regarding the EMA’s review of the abaloparatide-SC MAA in late 2016 or 2017
FDA PDUFA date of March 30, 2017
Enter into a collaboration for the potential commercialization of abaloparatide-SC outside the U.S. prior to commercial launch
Three abstracts accepted for poster presentations at ASBMR from the Phase 3 ACTIVE clinical trial
Abaloparatide-TD
Oral late-breaker presentation of the results of the human replicative PK pilot study of an optimized abaloparatide transdermal patch at ASBMR, on September 19, 2016 in Atlanta, Georgia
RAD1901
Expect to provide an update on the RAD1901 program at an upcoming scientific meeting.
RAD140
Expect to provide an update on the RAD140 program at an upcoming scientific meeting.
Radius Expects To Make Presentations at the Following Upcoming Conferences

Radius President and CEO, Robert E. Ward will make a presentation and company management will host one-on-ones at the Canaccord Genuity Growth Conference, August 10, 2016 at the InterContinental Hotel in Boston, MA.
Radius President and CEO, Robert E. Ward, will make a presentation and company management will host one-on-ones at the Rodman & Renshaw 18th Annual Global Investment Conference at the Lotte New York Palace Hotel in New York on September 12.
Four abstracts for abaloparatide were accepted for presentation at ASBMR September 16-19, 2016 in Atlanta, Georgia. Three data presentations are from the Phase 3 ACTIVE trial for abaloparatide-SC, and the fourth is an oral presentation in the Late-Breaking Abstracts session from the pilot PK human replicative study of an optimized transdermal patch titled: "Clinical Development of an Optimized Abaloparatide Transdermal Patch" on September 19, 2016 at 11:36 AM — 11:48 AM.
Recent Corporate Highlights

In July 2016, Radius entered into a pre-clinical collaboration with Takeda Pharmaceutical Company Limited to evaluate the combination of investigational drug RAD1901 with investigational drug TAK-228, an oral mTORC 1/2 inhibitor in Phase 2b development for the treatment of breast, endometrial and renal cancer, with the goal of potentially exploring such combination in a clinical study.

In June, Radius announced the opening of its Wayne, Pennsylvania office, which will serve as the Company’s Commercial and Medical hub and house marketing, sales, human resources, IT, pharmacovigilance, health economics, outcomes research, medical education, clinical affairs and medical affairs staff.

In May, Radius announced that its New Drug Application (NDA) for abaloparatide—SC had been accepted for filing by the U.S. Food and Drug Administration (FDA). The acceptance of the NDA reflects the FDA’s determination that the application is sufficiently complete to permit a substantive review. A PDUFA date of March 30, 2017 has been assigned.
Abaloparatide-SC as a treatment for postmenopausal women with osteoporosis is an investigational product and its safety and efficacy have not been established.

Second Quarter 2016 Financial Results

For the three months ended June 30, 2016, Radius reported a net loss of $43.4 million, or $1.01 per share, as compared to a net loss of $23.0 million, or $0.61 per share for the three months ended June 30, 2015. The increase in net loss for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015 was primarily due to an increase in research and development and general and administrative expenses, partially offset by a decrease in interest expense and an increase in interest income.

Research and development expenses for the three months ended June 30, 2016 were $26.9 million, compared to $16.3 million for the same period in 2015. This increase was primarily driven by higher professional contract services costs associated with the development of RAD1901 to support a Phase 1 study in metastatic breast cancer that commenced in late 2014 and a Phase 2b study in postmenopausal vasomotor symptoms that commenced in December 2015. This increase was also a result of an increase in compensation expense, including stock-based compensation, due to an increase in headcount from June 30, 2015 to June 30, 2016.

General and administrative expenses for the three months ended June 30, 2016 were $17.2 million, compared to $6.0 million for the same period in 2015. This increase was primarily attributable to an increase in professional support costs and legal fees, including the costs associated with increasing headcount and preparing for the potential commercialization of abaloparatide-SC, subject to a favorable regulatory review.
This increase was also driven by an increase in compensation expense due to an increase in headcount from June 30, 2015 to June 30, 2016.

As of June 30, 2016, Radius had $400.9 million in cash, cash equivalents and marketable securities. Based upon Radius’ cash, cash equivalents and marketable securities balance, Radius believes that, prior to the consideration of revenue from the potential future sales of any of its investigational products that may receive regulatory approval or proceeds from collaboration activities, it has sufficient capital to fund its development plans, U.S. commercial scale-up and other operational activities into 2018.