On August 2, 2016 Xencor, Inc. (NASDAQ: XNCR), a clinical-stage biopharmaceutical company developing engineered monoclonal antibodies for the treatment of autoimmune diseases, asthma and allergic diseases and cancer, reported financial results for the second quarter ended June 30, 2016 and provided a review of pipeline and corporate highlights (Filing, 8-K, Xencor, AUG 2, 2016, View Source [SID:1234514196]).

"In the second quarter, we strengthened our internal development pipeline with the addition of two new bispecific oncology candidates, XmAb18087 for the treatment of neuroendocrine tumors and XmAb20717, for the treatment of multiple cancers. We also entered into a strategic collaboration with Novartis, in which we jointly develop XmAb14045 and XmAb13676 for the treatment of acute myeloid leukemia and B-cell malignancies, respectively, while retaining U.S. commercialization rights to both compounds," said Bassil Dahiyat, Ph.D., president and chief executive officer of Xencor. "Taken together, we now expect to have 13 wholly-owned or partnered XmAb antibodies in the clinic by 2018, including four XmAb bispecific antibodies. With $168.8 million in cash, cash equivalents and marketable securities at the end of the second quarter, coupled with the $150 million upfront payment received from Novartis in the third quarter, we remain well-financed to advance the development of our clinical programs and platform."

Pipeline Highlights:

XmAb5871: XmAb5871 is a first-in-class monoclonal antibody that targets CD19 with its variable domain and that uses Xencor’s XmAb immune inhibitor Fc domain to target FcγRIIb, a receptor that inhibits B-cell function. XmAb5871 is currently in Phase 2 clinical studies for the treatment of IgG4-Related Disease (IgG4-RD) and system lupus erythematosus (SLE).

· Phase 1 trial with subcutaneous formulation started in Q3 2016; initial data expected in 2017
· Initial data from IgG4-RD Phase 2 trial expected in 1H17
· Initial data from SLE Phase 2 trial expected in 2018

XmAb7195: XmAb7195 is a first-in-class monoclonal antibody that targets IgE with its variable domain and uses Xencor’s XmAb Immune Inhibitor Fc domain to target FcγRIIb, resulting in three distinct mechanisms of action for reducing IgE levels.

· Initiation of Phase 1 trial with subcutaneous formulation expected in 2016; initial data expected in 1H17

In May 2016, Xencor announced complete data results from its Phase 1a trial of XmAb7195, which showed a swift and extensive depletion of serum IgE at all doses tested, including in high IgE subjects. XmAb7195 was generally well tolerated, with transient, asymptomatic thrombocytopenia reported at doses > 2.0 mg/kg. Moderate urticaria was reported in some treated patients with an apparent correlation of dose frequency with occurrence. Results of this study support further development in a multiple ascending dose study with subcutaneous administration, which will evaluate safety, tolerability and immunogenicity, and will measure IgE levels. These data were presented at the American Thoracic Society 2016 International Conference (A6476: Poster Board Number 407).

Bispecific Oncology Pipeline: Xencor’s initial bispecific programs are tumor-targeted antibodies that contain both a tumor antigen binding domain and a cytotoxic T-cell binding domain. These bispecific antibodies activate T cells for highly potent and targeted killing of malignant cells. Their XmAb Fc domains confer long circulating half-lives, stability and ease of manufacture.

· Initiation of clinical trial for XmAb14045 in acute myeloid leukemia (AML) expected in 2016; initial data expected in 2017
· Initiation of clinical trial for XmAb13676 in B-cell malignancies expected in 2016; initial data expected in 2018
· Initiation of pre-clinical development of XmAb18087, a SSTR2 x CD3 bispecific antibody for the treatment of neuroendocrine tumors, announced in June 2016; Phase 1 clinical trial is expected to begin in 2017
·

Xencor has initiated development of its first bispecific antibody that simultaneously engages two T-cell checkpoint targets to activate T cells against multiple tumor types. These dual checkpoint bispecific antibodies have the potential to improve on combination checkpoint therapies by improving selectivity and eliminating the need for multiple checkpoint antibodies.

· Initiation of pre-clinical development of XmAb20717, a PD-1 x CTLA-4 bispecific antibody for potential use in multiple oncology indications, announced in June 2016; Phase 1 clinical trial is expected to begin in 2017

In June 2016, Xencor entered into a collaboration with Novartis to develop and commercialize lead bispecific oncology candidates XmAb14045 and XmAb13676. Under the terms of the agreement, Xencor and Novartis will share worldwide development costs for the two compounds, with Xencor maintaining U.S. commercial rights and Novartis having commercial rights in the rest of the world. Novartis will also receive worldwide rights to Xencor’s bispecific technology to develop and commercialize four additional targets selected by Novartis, one of which Xencor may elect to co-detail in the U.S. The bispecific collaboration will include molecular engineering by Xencor. Additionally, Novartis will receive a worldwide non-exclusive license to use Xencor’s other XmAb Fc technologies in up to ten molecules. Xencor received a $150 million upfront payment and is eligible to receive up to $2.41 billion in future clinical, regulatory and sales milestone payments and royalties on sales.

Partnered XmAb Programs: Nine pharmaceutical companies and the National Institutes of Health (NIH) are advancing novel drug candidates either discovered at Xencor or that rely on Xencor’s proprietary XmAb technology. Seven such programs are currently undergoing clinical testing.

As part of the June 2016 collaboration with Novartis, Xencor announced that its XmAb bispecific Fc domains will also be applied to four Novartis programs, one of which Xencor may elect to share in costs and U.S. profits in lieu of royalties and to co-detail in the U.S. Novartis will also receive a non-exclusive license to use Xencor’s other XmAb Fc technologies in up to ten molecules.

Second Quarter Ended June 30, 2016 Financial Results

Cash, cash equivalents and marketable securities totaled $168.8 million as of June 30, 2016, compared to $193.3 million on December 31, 2015. The decrease reflects the net spending for the six months ended June 30, 2016. In July 2016, we received a $150 million upfront payment in connection with our Novartis collaboration.

Revenues for the second quarter ended June 30, 2016 were $66.0 million compared to $1.0 million for the same period of 2015. Revenues for the six months ended June 30, 2016 were $73.3 million, compared to $2.5 million for the same period in 2015. Revenues in the three and six month period ended June 30, 2016 included revenue from our Novartis and Amgen collaborations, compared to revenues for the same period in 2015, which were earned primarily from our Novo Nordisk and Alexion collaborations.

Research and development expenditures for the second quarter ended June 30, 2016 were $14.4 million, compared to $7.5 million for the same period in 2015. Total research and development expenses for the six month period ended June 30, 2015 were $24.4 million, compared to $12.7 million for the same period in 2015. The increased spending for research and development for the three and six months ended June 30, 2016 is primarily due to increased spending in our clinical programs including our XmAb5871 program and our initial bispecific clinical programs XmAb14045 and XmAb13676.

General and administrative expenses in the second quarter ended June 30, 2016 were $3.0 million compared to $2.5 million for the same period in 2015. Total general and administrative expenses for the first six months of 2016 were $7.0 million, compared to $5.3 million in the first six months of 2015. Increased spending on general and administration area reflects additional stock-based compensation expenses.

Non-cash, share based compensation expense for the first six months of 2016 was $4.0 million compared to $2.3 million for the first six months of 2015.

Net income for the second quarter ended June 30, 2016 was $47.2 million, or $1.13 on a fully diluted per share basis, compared to a net loss of $8.9 million, or $(0.22) on a fully diluted per share basis, for the same period in 2015. For the six months ended June 30, 2016, net income was $40.8 million or $0.98 on a fully diluted per share basis, compared to net loss of $15.3 million, or $(0.41) on a fully diluted per share basis, for the same period in 2015. The income for the three and six months ended June 30, 2016 over the loss reported for the same periods in 2015 is primarily due to the income recognized under our Novartis and Amgen collaborations.

The total shares outstanding was 40, 944,080 as of June 30, 2016, compared to 40,460,091 shares outstanding as of June 30, 2015.

Financial Guidance

Based on current operating plans, Xencor expects to have cash to fund research and development programs and operations through at least the end of 2019.

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

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

On August 2, 2016 Cardinal Health reported fourth-quarter fiscal year 2016 revenues of $31.4 billion, an increase of 14 percent from the fourth quarter last year, and fiscal 2016 revenues of $121.5 billion, an increase of 19 percent from the same period last year (Filing, Q4/Annual, Cardinal Health, 2016, AUG 2, 2016, View Source [SID:1234514197]).

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

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

For the quarter, the company reported growth in GAAP operating earnings of 11 percent to $620 million and in non-GAAP operating earnings of 5 percent to $643 million. GAAP operating earnings for fiscal year 2016 were $2.5 billion, an increase of 14 percent, and non-GAAP operating earnings for the fiscal year were $2.9 billion, an increase of 17 percent from the prior fiscal year.
For the quarter, GAAP diluted earnings per share from continuing operations2 (EPS) increased 16 percent to $1.02, while non-GAAP diluted EPS increased 14 percent to $1.14. GAAP diluted EPS for fiscal year 2016 increased 20 percent to $4.32, and non-GAAP diluted EPS increased 20 percent to $5.24.
"We finished fiscal 2016 having generated the highest revenues, the largest GAAP and non-GAAP operating earnings, and the greatest operating cash flow in our company’s history. Our teams worked incredibly hard this past year while never losing sight of the ultimate goal – serving patients and their families," said George Barrett, chairman and CEO of Cardinal Health, Inc. "The Cardinal Health team is well-positioned to adapt, innovate and lead during a time of great change in the healthcare industry."

Q4 and Fiscal Year Summary

Q4 FY16

Q4 FY15

Y/Y

FY16

FY15

Y/Y
Revenue
$
31.4
billion

$
27.5
billion

14%

$
121.5
billion

$
102.5
billion

19%
GAAP Operating Earnings
$
620
million

$
558
million

11%

$
2,459
million

$
2,161
million

14%
Non-GAAP Operating Earnings
$
643
million

$
611
million

5%

$
2,895
million

$
2,472
million

17%
GAAP Earnings from Continuing Operations2
$
333
million

$
293
million

14%

$
1,427
million

$
1,212
million

18%
Non-GAAP Earnings from Continuing Operations2
$
372
million

$
333
million

12%

$
1,732
million

$
1,469
million

18%
GAAP Diluted EPS from Continuing Operations2
$
1.02

$
0.88

16%

$
4.32

$
3.61

20%
Non-GAAP Diluted EPS from Continuing Operations2
$
1.14

$
1.00

14%

$
5.24

$
4.38

20%
SEGMENT RESULTS
Pharmaceutical Segment
Fourth-quarter revenue for the Pharmaceutical segment increased 14 percent to $28.2 billion due to growth from existing and net new Pharmaceutical Distribution customers and, to a lesser extent, performance from the Specialty business. Segment profit for the quarter increased 1 percent to $542 million due to contributions from acquisitions, largely offset by the loss of a large customer contract, which expired on March 31, 2016.
For the full year, revenue for the Pharmaceutical segment increased 20 percent to $109.1 billion, and segment profit increased 19 percent to $2.5 billion.

Q4 FY16

Q4 FY15

Y/Y

FY16

FY15

Y/Y
Revenue
$
28.2
billion

$
24.7
billion

14%

$
109.1
billion

$
91.1
billion

20%
Segment Profit
$
542
million

$
535
million

1%

$
2.5
billion

$
2.1
billion

19%

Cardinal Health
Page 2

Medical Segment
Fourth-quarter revenue for the Medical segment increased 12 percent to $3.2 billion primarily due to contributions from acquisitions, and, to a lesser extent, growth from Cardinal Health Brand products. Segment profit increased 19 percent to $122 million due to contributions from acquisitions and Cardinal Health Brand products.
Full-year revenue for the Medical segment increased 9 percent to $12.4 billion, and segment profit increased 6 percent to $457 million.

Q4 FY16

Q4 FY15

Y/Y

FY16

FY15

Y/Y
Revenue
$
3.2
billion

$
2.9
billion

12%

$
12.4
billion

$
11.4
billion

9%
Segment Profit
$
122
million

$
103
million

19%

$
457
million

$
433
million

6%

OUTLOOK

The company does not provide GAAP EPS outlook, because it is unable to reliably forecast most of the items that are excluded from GAAP EPS to calculate non-GAAP EPS. These items could cause EPS to differ materially from non-GAAP EPS. See "Use of Non-GAAP Measures" following the attached schedules for additional explanation.

The company’s fiscal year 2017 guidance range for non-GAAP diluted EPS from continuing operations is $5.48 to $5.73, representing growth of approximately 5 to 9 percent from the prior year.

Cardinal Health typically does not provide quarterly earnings guidance. However, the company expects a year-over-year decline in its non-GAAP earnings per share for the first-quarter of fiscal year 2017 in the high-single- to low-double-digit-percent range. This expectation is largely due to an anticipated first-quarter decline in Pharmaceutical segment profit in a percentage range from the high teens to low twenties with full-year Pharmaceutical segment profit expected to be essentially flat to fiscal year 2016.

The expected first-quarter fiscal 2017 Pharmaceutical segment decline is largely based upon two factors: 1) less year-over-year incremental contribution from its generics program; and 2) a previously mentioned Pharmaceutical Distribution large customer loss, the impacts of which will continue through the third-quarter of fiscal year 2017.

More details can be found on the accompanying earnings presentation slides as well as on the company’s conference call.

SELECTED YEAR-END AND RECENT HIGHLIGHTS
•
Increased quarterly dividend by 16 percent to $0.4489 per share, or $1.80 on an annualized basis, and authorized new share repurchase program
•
Appointed Pamela O. Kimmet Chief Human Resources Officer following the retirement of Carole Watkins
•
Committed nearly $2 million in multi-year patient safety grants to help improve the effectiveness, efficiency and excellence of patient care
•
Announced distribution agreement with Biosensors enabling Cordis to sell Biosensors’ coronary stent portfolio in select countries in Europe, the Middle East, Africa, Australia and New Zealand
•
Convened 26th annual Retail Business Conference, presenting a record-setting 9,300 attendees with the industry’s largest lineup of continuing education opportunities, buying opportunities, and access to a broad array of Cardinal Health solutions to help diversify and improve their businesses
•
Demonstrated Cardinal Health’s commitment to the community by:
◦
Recognizing the essential contributions of medical laboratory professionals to patient care with the Cardinal Health urEssential Award
◦
Donating 11 million yen to Save the Children Japan to assist with restoration efforts for those families affected by the earthquakes earlier this year
◦
Contributing more than $85,000 in cash and health care products to aid those affected by the wildfires in Fort McMurray, Alberta, Canada

AWARDS AND RECOGNITIONS

Over the past year, Cardinal Health was recognized for the company’s culture and its commitment to diversity and sustainability. These accolades include:

•
Named on the 2016 "World’s Most Admired Companies" list by Fortune
•
Designated a 2016 Top Green Company in the U.S. by Newsweek
•
Named to the Human Rights Campaign (HRC) "Best Places to Work for LGBT Equality" for fourth consecutive year based on ratings in HRC’s 2016 Corporate Equality Index
•
Included in Becker’s Healthcare 150 Great Places to Work in Healthcare 2016 listing

Cardinal Health
Page 3

•
Named among the 2016 Best Companies for Leaders by Chief Executive
•
Included in the Dow Jones Sustainability North American Company Index for the 10th year in a row

Idera Pharmaceuticals has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Idera Pharmaceuticals, AUG 2, 2016, View Source [SID1234514177]).

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

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

On August 1, 2016 Varian reported that Cancer patients in Ethiopia will gain access to modern radiotherapy treatments for the first time with the announcement that Varian Medical Systems (NYSE: VAR) has been selected to supply advanced medical linear accelerators to six hospitals in the country (Press release, InfiMed, AUG 1, 2016, View Source [SID:1234514162]). The Clinac iX treatment systems will be the first such devices offering treatments to cancer patients in a country of more than 90 million people.

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

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

The first phase of a cancer plan being rolled out by the Ethiopian government will see Varian supplying the treatment systems to Ethiopian university hospitals in the cities of Harar, Mek’ele, Jima, Hawasa, Gondar, and the capital Addis Ababa. The first of these projects is intended to start offering clinical treatments by the end of this year. The order for the six treatment machines was received by Varian in June.

"This is a well-considered plan by the Ethiopian government and Varian is delighted to be able to contribute by extending advanced care to an area of the world that is severely under-equipped," says Tom Duffy, Varian’s senior manager of Channel Management & Nile Delta Sales.

The Clinac iX systems will be capable of delivering fast and precise RapidArc treatments with image-guidance tools on each system. Each site will have an Eclipse system for treatment planning and 3 ARIA oncology information management workstations, and each hospital will have two radiotherapy bunkers to enable future expansion. Varian and Elsmed, one of its local representatives, are also working with the Ethiopian government to establish clinical education and training resources in the country.

"More than 70% of cancer patients require radiotherapy as part of their treatment and precise radiotherapy delivery requires image-guided treatments on modern machines, which is why a modern linear accelerator will be so important for our center," added Dr. Mathewos Assefa Woldegeorgis, of Black Lion University Hospital in Addis Ababa. "This machine will also help in the training of health professionals such as radiation oncologists, radiotherapists and medical physicists."

Udi Baruch, managing director of Israel-based Elsmed, said, "We will support this ambitious project through maintenance of the systems, intensive training programs for operators and also an ongoing knowledge sharing program between leading oncology institutes in Israel and the centers in Ethiopia in order to ensure the highest level of treatment in the most efficient and latest techniques."

On August 1, 2016 DURECT Corporation (Nasdaq: DRRX) reported financial results for the second quarter of 2016 (Filing, Q2, DURECT, 2016, AUG 1, 2016, View Source [SID:1234514170]). Total revenues were $3.2 million and net loss was $9.0 million for the three months ended June 30, 2016 as compared to total revenues of $4.4 million and net loss of $5.5 million for the three months ended June 30, 2015.

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

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

At June 30, 2016, we had cash and investments of $33.9 million, compared to cash and investments of $29.3 million at December 31, 2015. At June 30, 2016, we had $19.8 million in short and long term debt.

"The REMOXY ER PDUFA date of September 25, 2016 is now less than two months away and, if approved, this would be the first pharmaceutical product in our pipeline authorized for commercialization," stated James E. Brown, D.V.M., President and CEO of DURECT. "Our first two DUR-928 patient studies are progressing in Australia and we are moving forward with preparing two INDs which are required to enable future clinical trials in the U.S. For POSIMIR, we are in the process of amending the PERSIST Phase 3 trial in response to FDA advice while we continue enrollment in the trial."

Update of Selected Programs:

Epigenomic Regulator Program. DUR-928, our Epigenomic Regulator Program’s lead product candidate, is an endogenous, small molecule, new chemical entity (NCE), which may have broad applicability in several metabolic diseases such as nonalcoholic fatty liver disease (NAFLD) and nonalcoholic steatohepatitis (NASH), and in acute organ injuries such as acute kidney injury.

Our first patient trial utilizing DUR-928 is an open-label single-ascending-dose safety and pharmacokinetic (PK) Phase 1b trial of DUR-928 in NASH patients and matched control subjects. This study is being conducted in successive cohorts evaluating single-dose levels of oral DUR-928. After a PK/safety review at each dose, the study can proceed to a higher dose. The study is being conducted in Australia, and we anticipate that we will start obtaining results from this trial in the third quarter of 2016. This study is designed to enable and inform a subsequent multi-dose study in NASH and/or other patients with other liver function impairment. We are also preparing to request in the near future a pre-IND meeting with the FDA as precursor to submitting an IND later this year which is required to enable future clinical trials in liver diseases in the U.S.

Our second patient study with DUR-928, also being conducted in Australia, is currently screening patients with dosing expected shortly. This Phase 1b trial of DUR-928 is an open-label single-ascending-dose safety and pharmacokinetic study in patients with impaired kidney function and matched control subjects. This study will be conducted in successive cohorts evaluating single-dose levels of DUR-928 administered by injection. After a PK/safety review at each dose, the study can proceed to a higher dose. We anticipate that this study will be completed in 2016, and that this study will enable and inform subsequent trials for patients with either acute kidney injury or other kidney function impairment. Our request for a pre-IND meeting has been granted by the FDA; we anticipate that feedback from that meeting will enable the filing of an IND later in the year which is required to enable future clinical trials in kidney diseases in the U.S.

REMOXY ER (oxycodone) Extended-Release Capsules CII. Based on our ORADUR technology, REMOXY is a unique long-acting formulation of oxycodone designed to discourage common methods of tampering associated with opioid misuse and abuse. The extended release oxycodone market is greater than $2 billion in the U.S. alone, and we are eligible for a potential royalty on REMOXY between 6.0% to 11.5% of net sales depending on sales volumes.

Pain Therapeutics (our licensee) resubmitted the NDA for REMOXY in March 2016. In April 2016, Pain Therapeutics announced that the FDA had determined that the NDA was sufficiently complete to permit a substantive review and that September 25, 2016 is the target action date under the Prescription Drug User Fee Act (PDUFA). In May 2016, positive data from a REMOXY human abuse potential study was presented at the 35th Annual Scientific Meeting of the American Pain Society. Also in May 2016, the FDA informed Pain Therapeutics that there was a tentative date of August 5, 2016 for an Advisory Committee meeting to review the REMOXY NDA. In July 2016, Pain Therapeutics announced that the FDA had determined that the Advisory Committee meeting is unnecessary and would not be held on August 5. Pain Therapeutics also stated that the FDA advised them that the regulatory review remains active and is on-going, and the PDUFA date of September 25, 2016 remains unchanged.

POSIMIR (SABER-Bupivacaine) Post-Operative Pain Relief Depot. POSIMIR is our investigational post-operative pain relief depot that utilizes our patented SABER technology and is intended to deliver bupivacaine to provide up to 3 days of pain relief after surgery. We are in discussions with potential partners regarding licensing development and commercialization rights to POSIMIR, for which we hold worldwide rights. We are also continuing to evaluate the requirements for commercializing POSIMIR on our own in the U.S., in the event that we determine that to be the preferred route of commercialization.

In November 2015, we began enrolling patients for PERSIST, a new POSIMIR Phase 3 clinical trial consisting of patients undergoing laparoscopic cholecystectomy (gallbladder removal) surgery. We began recruiting patients for this trial comparing POSIMIR to placebo. Based on recommendations from the FDA received subsequent to the start of the trial, in April 2016 we decided to amend the PERSIST trial. Starting in August 2016, we are implementing Part 2 of the PERSIST trial to evaluate POSIMIR against standard bupivacaine HCl rather than placebo as we have been doing in Part 1. Additionally, we are switching in Part 2 the primary efficacy endpoint (pain reduction on movement) from 0-72 hours after surgery to 0-48 hours after surgery. Assessing pain reduction on movement from 0-72 hours is now the key secondary efficacy endpoint and other efficacy endpoints, including 72-hour opioid use, remain the same. We expect to enroll approximately 264 patients in Part 2 of PERSIST, and we expect this part of the trial to take approximately one year to enroll. We believe that a positive outcome from this new trial design would result in a stronger NDA resubmission and potential commercial advantages. In a previous clinical trial of 50 patients in the same surgical model (laparoscopic cholecystectomy), POSIMIR was compared with the active control bupivacaine HCl, against which POSIMIR demonstrated in a post hoc analysis an approximately 25% reduction in pain intensity on movement for the first 3 days after surgery (p=0.024) and for the first 2 days after surgery (p=0.0198), using the same statistical methodology specified for the current trial.

ORADUR-ADHD Program. In 2013, we selected a formulation for the lead program in our ORADUR-ADHD (Attention Deficit Hyperactivity Disorder) program, ORADUR-Methylphenidate. This formulation was chosen based on its potential for rapid onset of action, long duration with once-a-day dosing and target pharmacokinetic profile as demonstrated in a Phase 1 trial. In addition, this product candidate utilizes a small capsule size relative to the leading existing long acting products on the market and incorporates our ORADUR anti-tampering technology. Orient Pharma, our licensee in defined Asian and South Pacific countries, has initiated a Phase 3 study in Taiwan and anticipates completing it in 2016. We retain rights to all other markets in the world, notably including the U.S., Europe and Japan, and are engaged in licensing discussions with other companies.

Business Development Activities. We have multiple programs that may potentially be licensed over the next 12-18 months. These include POSIMIR, DUR-928, ORADUR-ADHD (territories outside certain Asian and South Pacific markets), as well as various other programs which we have not described publicly in detail.

Debt Refinancing. In July 2016, we refinanced our existing $20 million term loan with Oxford Finance into a new term loan that results in an extended maturity (to four years) and an extended interest only period (to 18 months).