On November 5, 2018 INSYS Therapeutics, Inc. (NASDAQ: INSY), a leader in the development, manufacture and commercialization of pharmaceutical cannabinoids and spray technology, reported financial results for its third quarter ended Sept. 30, 2018 (Press release, Insys Therapeutics, NOV 5, 2018, View Source [SID1234530857]).

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OVERALL HIGHLIGHTS

Commenced a strategic alternatives review process for the company’s opioid-related assets

Expanded collaborative partnership with University of California San Diego’s Center for Medicinal Cannabis Research (CMCR) to study the company’s cannabidiol (CBD) oral solution in two additional disease states (early psychosis and anxiety in anorexia nervosa)

Achieved net revenue of $18.3 million in the third quarter of 2018

Advanced R&D programs with a $14.5 million investment in the third quarter of 2018:

Received "Fast Track" designation from the FDA for epinephrine nasal spray as an investigational treatment for anaphylaxis

Continued enrollment of three company-sponsored CBD clinical studies:

childhood absence epilepsy (Phase 2)

Prader-Willi syndrome (Phase 2)

infantile spasms (Phase 3)

Completed pharmacokinetic study of dronabinol inhalation

Signed definitive licensing agreement with Lunatus to commercialize SUBSYS in the Middle East

Received FDA approval of supplemental NDA for SYNDROS to expand label, enabling use of the product with feeding tubes for patients with cancer and AIDS

Appointed Elizabeth Bohlen to the Board of Directors and added Mark Nance to the management team as chief legal officer and general counsel

Announced settlement agreement in principle with Department of Justice consistent with previous public statement and disclosures

Optimized commercial organization and related support functions to control operating costs in line with lower revenue

Received confirmation from the SEC that it concluded its investigation of the company, and does not intend to recommend an enforcement action

"Our commitment to further establish our position as a leader in pharmaceutical cannabinoids and spray technology was exemplified by the achievement of several milestones in the third quarter," said Saeed Motahari, president and chief executive officer of INSYS Therapeutics. "We continued to make progress on our pipeline and expanded our collaborative partnerships with leading research institutions, increasing the number of CBD clinical studies in which we’re the sole sponsor or a key collaborator to seven. Furthermore, our 99.5 percent pure pharmaceutical-grade CBD oral solution allows INSYS to meet the needs of clinical study patients and become a strategic partner across our industry and in the medical community."

Motahari concluded, "The decline in the overall TIRF market continues to impact sales of our primary commercial product, SUBSYS. Our proactive efforts to expand managed care access and educate appropriate HCPs have enabled us to maintain our leading share of the branded TIRF market. However, this decline in revenue has required us to contain costs and as a result, we have taken actions to adjust our commercial organization to align with the realities of the market. We will continue to be disciplined with our cost structure, while appropriately investing in our pipeline, which is the key to transforming INSYS into a leader in pharmaceutical cannabinoids and spray technology."

Financial & Operating Highlights

During the preparation of the consolidated financial statements as of and for the quarter ended Sept. 30, 2018, the company identified errors that impacted the 2017 financial information, which have been revised for the correction of this error.

The company had $113.0 million in cash, cash equivalents and short-term and long-term investments with no debt outstanding as of Sept. 30, 2018

Net revenue for the third quarter of 2018 was $18.3 million, compared to $30.7 million for the third quarter of 2017, driven primarily by declines in the TIRF market

Gross margin was 87.0 percent for the third quarter of 2018, compared to 75.6 percent in the same period of 2017

Sales and marketing investment was $7.4 million for the third quarter of 2018, compared to $12.8 million for the third quarter of 2017, as the company took action to better align its commercial organization to the lower revenue base

Research and development investment decreased to $14.5 million for the third quarter of 2018, compared to $19.6 million for the third quarter of 2017, primarily as a result of the timing of clinical trials

General and administrative expense of $8.9 million for the third quarter of 2018 declined compared to $11.3 million in the third quarter of 2017, as the company continued to look for opportunities to level-set its cost base

Legal expense increased to $16.0 million for the third quarter of 2018, compared to $4.4 million in the third quarter of 2017, as a result of the company’s legal proceedings, including

expenses associated with indemnification of former executives in connection with their pending trial, which constitutes approximately 60 percent of the total Q3 2018 expense. Management is disputing the reasonableness of certain of these indemnification-related expenses

Income tax expense was $240 thousand for the third quarter of 2018 compared to a benefit of ($9.0 million) during the revised third quarter of 2017

Net loss for the third quarter of 2018 was ($30.6 million), or ($0.41) per basic and diluted share, compared to a net loss of ($166.3 million), or ($2.28) per basic and diluted share, for the revised third quarter of 2017. Adjusted net loss for the third quarter of 2018 was ($0.37) per basic and diluted share

Adjusted EBITDA loss for the third quarter of 2018 was ($26.0 million), compared to Adjusted EBITDA loss of ($18.4 million) in the prior-year quarter. The reconciliation of net income to Adjusted EBITDA is included at the end of this news release

During the preparation of the consolidated financial statements as of and for the quarter ended Sept. 30, 2018, the company identified errors within the company’s consolidated financial statements for the year ended Dec. 31, 2017, resulting from the company’s adoption of ASU 2016-09 "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" on Jan. 1, 2017, which impacted the previously filed financial statements for the quarters ended March 31, June 30, and Sept. 30 of 2017 as well as the audited financial statements for the year ended Dec. 31, 2017. In addition, we identified an error in the calculation of our weighted average shares outstanding, which impacted the previously filed financial statements for the three and nine months ended Sept. 30, 2017, and the year ended Dec. 31, 2017. The company evaluated the errors and concluded that they were not material to the financial statements previously issued. Accordingly, the Dec. 31, 2017 financial information has been revised to include a cumulative adjustment of $2.9 million to correctly present uncertain tax position liabilities and accumulated deficit, resulting in a reduction to total liabilities and an increase in stockholders’ equity. These revisions will be reflected and disclosed in the company’s Form 10-Q for the period ended Sept. 30, 2018 to be filed with the SEC on or before Nov. 9, 2018. Additionally, in order to correctly present income tax benefit and net loss in the appropriate periods for comparative purposes, the financial results for the three and nine months ended Sept. 30, 2017, have been revised to include adjustments of $40,000 and $120,000, respectively. These revisions resulted in net loss per share for the three and nine months ended Sept. 30, 2017, and the year ended Dec. 31, 2017, changing from $2.30 to $2.28, $2.51 to $2.50 and $3.16 to $3.12, respectively.

Webcast Information

A conference call is scheduled for 5:00 p.m. Eastern Standard Time on Nov. 5, 2018, to discuss the financial and operational results for the third quarter 2018. Interested parties can listen to the call live as it occurs via the company’s website, View Source, on the Investors section’s Presentations & Events page; or by dialing 844-263-8304 (from inside the U.S.) or 213-358-0958 (from outside the U.S.), and using the Conference ID 6149699. A webcasted replay of the call will be available on the site a few hours after the event.

On November 5, 2018 Daiichi Sankyo Company, Limited (hereafter, Daiichi Sankyo) reported that the European Medicines Agency (EMA) validated for review and granted accelerated assessment to the Marketing Authorization Application (MAA) for quizartinib for the treatment of adults with relapsed or refractory acute myeloid leukemia (AML) which is FLT3-ITD positive (Press release, Daiichi Sankyo, NOV 5, 2018, View Source [SID1234530874]).

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Validation confirms that the application is complete and commences the scientific review process by the EMA’s Committee for Medicinal Products for Human Use (CHMP). Accelerated assessment is given to products expected to be of major interest for public health and therapeutic innovation and can significantly reduce the review timelines.

The EU MAA is based on results of the pivotal phase 3 QuANTUM-R study of quizartinib, which was the first randomized phase 3 study to show that a FLT3 inhibitor prolonged overall survival as an oral, single agent compared to chemotherapy in patients with relapsed/refractory FLT3-ITD AML. Topline results of the phase 3 QuANTUM-R study were presented during the plenary program at the 23rd Congress of the European Hematology Association (EHA) (Free EHA Whitepaper) in June 2018.

"The accelerated assessment of the quizartinib MAA underscores the significant unmet need for patients with relapsed/refractory FLT3-ITD AML, a very aggressive form of the disease with no approved targeted treatment options in Europe," said Arnaud Lesegretain, Vice President, Oncology Research and Development and Head, AML Franchise, Daiichi Sankyo. "Achieving both these milestones are significant next steps and we look forward to working with the EMA to bring this important potential new targeted treatment option to patients in the EU."

Quizartinib is currently under accelerated regulatory review with the Japan Ministry of Health, Labour and Welfare (MHLW) for the treatment of adult patients with relapsed/refractory FLT3-ITD AML. Submission in the U.S. remains on track for the second half of fiscal year 2018.

In the QuANTUM-R study, the median treatment duration with quizartinib was 4 cycles of 28 days each versus 1 cycle in the salvage chemotherapy arm. Incidence of treatment-emergent adverse events was comparable between patients who received single agent quizartinib and those who received salvage chemotherapy. The most common adverse drug reactions (>30 percent, any Grade) in patients treated with quizartinib included infections, bleeding, nausea, asthenic conditions, pyrexia, febrile neutropenia and vomiting, and the most common Grade ≥ 3 adverse drug reactions (>20 percent) were infection and febrile neutropenia. The most common laboratory adverse reactions (incidence >50 percent) were decreased white blood cell count, decreased lymphocyte count, decreased hemoglobin, decreased neutrophil count and decreased platelet count. The safety profile observed in QuANTUM-R appears consistent with that observed at similar doses in the quizartinib clinical development program.

About FLT3-ITD Acute Myeloid Leukemia
AML is an aggressive blood and bone marrow cancer that causes uncontrolled growth and accumulation of malignant white blood cells that fail to function normally and interfere with the production of normal blood cells.1FLT3 gene mutations are one of the most common genetic abnormalities in AML.2 FLT3-ITD is the most common FLT3 mutation, affecting approximately one in four patients with AML.3,4,5,6 FLT3-ITD is a driver mutation that presents with high leukemic burden and has poor prognosis and a significant impact on disease management for patients with AML.4,7

Patients with FLT3-ITD AML have a worse overall prognosis, including an increased incidence of relapse, an increased risk of death following relapse and a higher likelihood of relapse following hematopoietic stem cell transplantation as compared to those without this mutation.8,9

About Quizartinib

Quizartinib, the lead investigational agent in the AML Franchise of the Daiichi Sankyo Cancer Enterprise, is an oral selective FLT3 inhibitor currently in phase 3 development for relapsed/refractory FLT3-ITD AML (QuANTUM-R) in the U.S. and EU; phase 3 development for newly-diagnosed FLT3-ITD AML (QuANTUM-First) in the U.S., EU and Japan; and, phase 2 development for relapsed/refractory FLT3-ITD AML in Japan.

Quizartinib has been granted Breakthrough Therapy designation for the treatment of adult patients with relapsed/refractory FLT3-ITD AML, and Fast Track designation for the treatment of relapsed/refractory AML by the U.S. Food and Drug Administration (FDA). Quizartinib also has been granted Orphan Drug designation by both the FDA and the European Commission (EC) for the treatment of AML and by the Japan Ministry of Health, Labour and Welfare (MHLW) for the treatment of FLT3-mutated AML.

Quizartinib is an investigational agent that has not been approved for any indication in any country. Safety and efficacy have not been established.

On November 2, 2018 Checkpoint Therapeutics, Inc. ("Checkpoint") (NASDAQ: CKPT), a clinical-stage immuno-oncology biopharmaceutical company focused on the acquisition, development and commercialization of novel treatments for patients with solid tumor cancers, reported financial results and recent corporate highlights for the third quarter ended September 30, 2018 (Press release, Checkpoint Therapeutics, NOV 2, 2018, View Source [SID1234530627]).

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"In the third quarter of 2018, we announced positive interim safety and efficacy data from our ongoing Phase 1/2 clinical trial of CK-101, a third-generation EGFR inhibitor being evaluated in advanced non-small cell lung cancer (NSCLC), which was a significant milestone for the company," said James F. Oliviero, President and Chief Executive Officer of Checkpoint. "Our plans remain on-track for the rest of the year as we continue enrollment to establish the optimal dose of CK-101, after which we plan to initiate a Phase 3 trial in 2019 in treatment-naïve EGFR mutation-positive NSCLC patients. We also look forward to reporting early next year interim data from the expansion cohort phase of our Phase 1 clinical trial of CK-301, a fully human anti-PD-L1 antibody, in selected recurrent or metastatic cancers."

Recent Corporate Highlights:

In September 2018, Checkpoint announced positive interim safety and efficacy data from its Phase 1/2 clinical trial of CK-101, a third-generation epidermal growth factor receptor (EGFR) tyrosine kinase inhibitor (TKI) being evaluated in advanced NSCLC. The data were presented in an oral presentation at the International Association for the Study of Lung Cancer (IASLC) 19th World Conference on Lung Cancer in Toronto. CK-101 was well tolerated across multiple dose groups and safe. Durable anti-tumor activity was observed, particularly in treatment-naïve EGFR mutation-positive NSCLC patients.
In October 2018, Checkpoint appointed Christian Béchon to its Board of Directors.
Financial Results:

Cash Position: As of September 30, 2018, Checkpoint’s cash and cash equivalents totaled $29.6 million, compared to $19.2 million at December 31, 2017, an increase of $10.4 million year-to-date.
R&D Expenses: Research and development expenses for the third quarter of 2018 were $7.8 million, compared to $5.0 million for the third quarter of 2017, an increase of $2.8 million.
G&A Expenses: General and administrative expenses for the third quarter of 2018 were $1.5 million, compared to $1.3 million for the third quarter of 2017, an increase of $0.2 million.
Net Loss: Net loss attributable to common stockholders for the third quarter of 2018 was $9.3 million, or $0.32 per share, compared to a net loss of $5.9 million, or $0.26 per share, for the third quarter of 2017.

On November 2, 2018 Takeda Pharmaceutical Company Limited (TOKYO: 4502) (Press release, Takeda, NOV 2, 2018, View Source [SID1234530660]):

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+4.2% growth in underlying revenue driven by growth drivers, with growth in each region

Underlying sales increased by + 4.2%, with Takeda’s growth drivers (gastroenterology, oncology, neuroscience and emerging markets) continuing to grow +9.8 %.
The key products Entyvio (+ 33.1%) and Ninlaro (+ 38.0%) contributed significantly to the growth in sales, as well as the products acquired from Ariad in 2017. Each region achieved positive growth compared to last year (USA + 9.2%, Japan + 4.1%, Europe & Canada + 4.3%, Emerging Markets + 2.4%).
Reported revenues decreased by -0.1%. Although our growth drivers maintained their strong growth, foreign currency exchange rates (-1.0 pp) and disposals (-3.2 pp) had a negative impact. The impact of the divestments included the sale of additional products to the Teva JV during the 2017 fiscal year, as well as Multilab and Techpool during the fiscal year 2018.
Underlying core earnings of + 31.8% with a margin of + 5.1 pp resulting from strict OPEX discipline

Earnings from underlying core businesses increased +31.8%, reflecting revenue growth and a 5.1pp margin increase, of which two-thirds (3.3ppm) ) were stimulated by OPEX improvements. This was the result of the global OPEX initiative fully integrated into working methods at Takeda.
Reported operating profit fell 26.6%. It was impacted by two strong non-recurring gains recorded in fiscal 2017: the sale of Wako shares for 106.3 billion yen and the sale of additional products to the Teva JV. In addition, Takeda recorded non-recurring expenses for fiscal year 2018 related to the proposed acquisition of Shire. Excluding these non-recurring items, operating income increased by +64.5%.
Core EPS was up + 32.7% and reported EPS decreased 26.9% to 162 yen per share, impacted by disposals and Shire-related costs.
The product pipeline has reached several milestones in the first half of fiscal year 2018

Maintenance of multiple myeloma after a Ninlaro stem cell transplant (TOURMALINE-MM3 study), Alukbris ALK + first line metastatic non-small cell lung cancer (ALTA-1L study), Adcetris first-line CD30 + T cell peripheral lymphoma (ECHELON-2 study) and the subcutaneous formulation in Entyvio ulcerative colitis (VISIBLE 1 study) all met their primary endpoints.
Seven new molecular entities have been integrated into the Phase 1 pipeline since April 2018.
Non-core asset disposal plan is on track

Free cash flow from operations since the beginning of the year decreased by -29.7% primarily as a result of the impact of the sale of additional products to the Teva JV during the 2017 fiscal year.
The sale of securities and real estate generated 44.2 billion yen in cash and the sale of non-core activities Techpool and Multilab generated an additional 27.2 billion yen.
The net debt / EBITDA ratio is 1.7x, an improvement of 1.8x for the fourth quarter of fiscal year 2017 and 2.7x for the fourth quarter of fiscal year 2016.
Christophe Weber, President and Chief Executive Officer, commented:

"Strategic priorities and a high quality of execution led to a solid performance in the first half of fiscal year 2018, as we are committed to meeting our key priorities to increase the portfolio, strengthen the pipeline, boost profitability. Our growth drivers contribute significantly to both earnings and earnings, and I am pleased to report that two-thirds of the 510 basis points of underlying core earnings margin improvement can be explained by the discipline in terms of costs following the global OPEX initiative.
In the first half of the year, we also achieved several important financial and regulatory milestones towards the proposed acquisition of Shire plc. I would like to emphasize that Takeda’s current strategy is working and that Takeda’s board of directors, Takeda’s management team and I are confident that the acquisition of Shire will allow Takeda to significantly accelerate the transformation. of the company to become a global leader in biopharmaceutical, R & D-based, values-based, headquartered in Japan. "

Basic earnings represent adjusted net income to exclude the tax expense, our share of capital gains or losses accounted for by the equity method, financial income and expenses, other costs and income. operating, amortization and impairment of intangible assets associated with revenue and other items that management perceives as unrelated to our core business, such as the impact of purchase accounting and transaction costs.

Underlying growth compares two periods (quarters or years) of financial results on a common basis and is used by management to evaluate the business. These financial results are calculated in constant currencies and exclude the impacts of divestitures and other amounts that are exceptional items, unusual or unrelated to our ongoing operations.

Attributable to the owners of the company.

Takeda Upgrades Velcade’s Full-Year Forecast, Dynamics of Growth Factors and OPEX Discipline

Upward revisions to underlying guidelines and reported forecasts.

Underlying guidance for fiscal year 2018: Underlying earnings guidance increased

Previous projections (% growth)
(May 14, 2018) Revised Projections (% Growth)
(October 31, 2018)
Underlying turnover Low single digit growth rate Low single digit growth rate
Earnings from underlying core businesses High single digit growth Average growth%
Underlying basic EPS Low double-digit growth rate High growth (around mid-20s)
Annual dividend per share 180 yen 180 yen
Projections maintain an additional competitor with no therapeutic equivalence in Velcade with the launch of subcutaneous and intravenous administration in the United States in March 2019, an increase of 35.5 billion yen compared to previous projections (Figure 1). global business for fiscal 2017: 129.6 billion yen, fiscal 2018: 111.0 billion yen) *
Increased underlying core earnings margin in the upper range of + 100-200bps.
These underlying projections exclude the estimated financial impact of fiscal year 2018 related to Takeda’s proposed acquisition of Shire plc.
* (application of the constant exchange rate based on the rate of the fiscal year 2018)

The revised projections in the table above include the costs incurred in the first half of fiscal year 2018 related to Takeda’s proposed acquisition of Shire plc (pre-tax earnings impact: 19.8 billion yen, net profit for the impact on the year: 16.5 billion yen); however, these do not include anticipated Shire costs for the second half of the fiscal year. In addition, the projections do not include any expected Shire earnings in the event that the closing of the acquisition is finalized during fiscal year 2018.
Takeda expects the share of Shire-related costs anticipated for fiscal year 2018 to be between 40 billion yen and 60 billion yen. This does not include integration costs, interest expense and other financial charges, since the magnitude of the impact of fiscal year 2018 will be related to the closing period of the transaction.
(Reference)

A revised financial projection that excludes costs incurred in the first half of fiscal year 2018 related to Takeda’s proposed acquisition of Shire plc is presented below. Previous projections for May 14, 2018 do not include expenses related to Shire.

Forecasts excluding the estimated financial impact of the proposed acquisition of Shire will be announced by Takeda as soon as a reasonable assumption has been confirmed.
For more information on the results of the first half of Takeda’s fiscal year 2018, as well as other financial information, please visit View Source

On November 2, 2018 Bio-Path Holdings, Inc., (NASDAQ: BPTH), a biotechnology company leveraging its proprietary DNAbilize antisense RNAi nanoparticle technology to develop a portfolio of targeted nucleic acid cancer drugs, reported an upcoming poster presentation at the 2018 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition, taking place from December 1-4, 2018 in San Diego, CA (Press release, Bio-Path Holdings, NOV 2, 2018, View Source [SID1234530611]). In addition, ASH (Free ASH Whitepaper) abstracts will appear in the November supplemental issue of Blood.

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Dr. Maro Ohanian, Assistant Professor of the Department of Leukemia at The University of Texas M.D. Anderson Cancer Center, will present interim data from the ongoing Phase 2 trial of prexigebersen (BP1001), the Company’s lead drug candidate, for the treatment of acute myeloid leukemia. Co-author Dr. Ana Tari Ashizawa, Vice President of Research and Development at Bio-Path, will also be available at the poster presentation

Details for the presentation are as follows:

Date: Saturday, December 1, 2018

Presentation Time: 6:15 PM – 8:15 PM Pacific Time

Location: San Diego Convention Center, Hall GH

Session Name: 613. Acute Myeloid Leukemia: Clinical Studies: Poster I

Title: Interim Safety and Efficacy of Lower Intensity Induction Therapy with Intravenous Prexigebersen (BP1001) in Patients with Untreated Acute Myeloid Leukemia (AML)