On July 28, 2016 Integra LifeSciences Holdings Corporation (NASDAQ:IART) reported its financial results for the second quarter ending June 30, 2016 (Press release, Integra LifeSciences, JUL 28, 2016, View Source [SID:1234514090]).

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Highlights:

Second quarter revenue increased 17.2% over the prior-year quarter to $249.3 million and organic revenue increased 10.7%;
GAAP gross margin was 64.1% and adjusted gross margin was 69.2%;
GAAP net income increased 6.1% to $12.8 million and adjusted net income increased 21.3% to $30.3 million;
Commercial release of Integra(R) Omnigraft(TM) Dermal Regeneration Matrix began;
Integra Fin-Lock(TM) Glenoid for the Titan(TM) Modular Shoulder System launched; and
Raising 2016 full-year sales guidance range to $992 million to $1.002 billion; Raising organic sales guidance to 9%.
Total revenues for the second quarter were $249.3 million, reflecting an increase of $36.6 million, or 17.2%, over the second quarter of 2015. This reflects strong performance in both business segments; Orthopedics and Tissue Technologies revenue increased 38.2% and Specialty Surgical Solutions revenue increased 7.8%.

Excluding the contribution of revenues from acquisitions, discontinued products and the effect of currency exchange rates, revenues increased 10.7% over the second quarter of 2015.

"Solid performance from our two segments, as well as strength in both U.S. and international sales, contributed to the results for the second quarter," said Peter Arduini, Integra’s President and Chief Executive Officer. "We are accelerating growth as we continue to execute on our clinical and commercial strategy with the launch of several new products, including Omnigraft for the treatment of diabetic foot ulcers."

The Company reported GAAP net income of $12.8 million, or $0.32 per diluted share, for the second quarter of 2016 compared to GAAP net income of $12.0 million, or $0.35 per diluted share, for the second quarter of 2015. Results for the second quarter of 2016 include the addition of 3.8 million shares issued in an equity offering in August 2015 and approximately 1.6 million diluted shares associated with the December 2016 convertible notes and warrants.

Adjusted measures discussed below are computed with the adjustments to GAAP reporting set forth in the attached reconciliation.

Adjusted net income for the second quarter of 2016 was $30.3 million, or $0.79 per share, compared to adjusted net income of $24.9 million, or $0.75 per share, in the second quarter of 2015.

Adjusted EBITDA for the second quarter of 2016 was $54.6 million, or 21.9% of revenue, compared to $47.7 million, or 22.4% of revenue, in the prior year’s second quarter.

Operating cash flow for the second quarter was $38.1 million. Adjusted free cash flow conversion for the trailing twelve months ended June 30, 2016 was 59.8% versus 80.6% in the prior-year trailing twelve-month period.

The Company elected to adopt accounting standard FASB Update No. 2016-09 in the second quarter of 2016. Excluding the benefit of this adoption, the Company’s second quarter GAAP earnings per share would have been $0.30, and adjusted earnings per share would have been $0.78. The adoption of this standard allows the Company to recognize increased tax benefits, which were previously recorded in shareholders’ equity, through the income statement when employees exercise options or when shares vest. The adoption of this standard is reflected in our results as if it had occurred at the beginning of the year. The early adoption of this accounting standard decreased our tax expense in the second quarter of 2016 and had a GAAP net impact of $0.07 per share on a year-to-date basis. This impact was a $0.03 benefit to adjusted earnings per share on a six-month basis, since we treat the discrete benefit as a rate item in our adjusted tax rate. We expect that the full-year benefit to both our GAAP and adjusted results will be about $0.07 per share, although the GAAP benefit has been recognized during the first six months of the year, and the adjusted benefit will be recognized as a $0.03 benefit in the first half and approximately $0.04 in the second half of 2016. The Company is providing a supplemental schedule on the website to show first quarter results as if the new standard had been adopted. Access to that supplemental information is available at investor.integralife.com.

Outlook for 2016

Based on the second quarter’s results, the Company is raising its full-year 2016 revenue guidance to a new range of $992 million to $1.002 billion, up from prior guidance of $985 million to $1.0 billion. The Company is raising its full-year 2016 organic revenue growth to 9% from its previous guidance of approximately 8%. The Company is also raising its full-year GAAP and adjusted earnings per share guidance by $0.04 per diluted share and narrowing our guidance range to a new range of $1.78 – $1.88 and $3.43 – $3.53, respectively. This change reflects the impact from the adoption of the new accounting change, the expected additional share dilution on the 2016 convertible notes and warrants, and a slight outperformance in the second quarter results.

"In the second quarter, we continued to see positive momentum across our product portfolio, which allowed us to continue to make investments in our clinical pipeline and commercial infrastructure," said Glenn Coleman, Integra’s Chief Financial Officer. "We continue to expect margin expansion as we move through the back half of the year and are well-positioned to meet our full-year financial and strategic objectives."

In the future, the Company may record, or expects to record, certain additional revenues, gains, expenses or charges as described in the Discussion of Adjusted Financial Measures below that it will exclude in the calculation of adjusted EBITDA and adjusted earnings per share for historical periods and in providing adjusted earnings per share guidance.

On July 28, 2016 Agenus Inc. (NASDAQ: AGEN), an immuno-oncology (I-O) company developing antibodies, including checkpoint inhibitors and other checkpoint modulators, and cancer vaccines, reported a corporate update and reported financial results for the second quarter ended June 30, 2016 (Press release, Agenus, JUL 28, 2016, View Source [SID:1234514097]).

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"In the second quarter, we made important advances in the clinic, saw external validation of our immuno-oncology agents and strategy and further integrated our capabilities to improve speed, cost and quality of product development efforts," said Garo H. Armen, Ph.D., Chairman and CEO of Agenus. "We also strengthened our management team with the addition of a new Board member, Ulf Wiinberg, and Global Head of Clinical Development, Dr. Jean-Marie Cuillerot."

Second Quarter 2016 and Recent Corporate Highlights

July: Completed enrollment of the first cohort of patients in the Phase 1 study of AGEN1884, an anti-CTLA-4 antibody, which was launched earlier in 2016. Agenus plans to initiate clinical studies for a second anti-CTLA-4 antibody, AGEN2041, in 2017 and start combination trials with AGEN1884 in the first half of 2017.

July: Appointed Jean-Marie Cuillerot, M.D. as Vice President and Global Head of Clinical Development, bringing extensive immuno-oncology clinical development expertise to the Company’s I-O portfolio. In Dr. Cuillerot’s previous role at a Merck Serono affiliate, he advanced the PD-L1 antibody avelumab from pre-IND to regulatory filing and delivered the dataset leading to the $880 million co-development deal with Pfizer. At Bristol-Myers Squibb, he developed clinical strategies for the anti-CTLA-4 antibody ipilimumab as a treatment for lung cancer, castrate resistant prostate cancer, ovarian cancer, gastric cancer and glioblastoma, and supported the filing activities of ipilimumab for first-line treatment of melanoma.

June: Initiated Phase 1/2 clinical trial of anti-GITR checkpoint antibody INCAGN1876 in solid tumors in collaboration with Incyte. INCAGN1876 is the second product candidate from the Company’s antibody program to advance into clinical trials this year.
June: Merck selected a lead product candidate to advance into preclinical studies under our research collaboration, leading to receipt of a $2 million milestone payment. The achievement further validates Agenus’ discovery platform, which is capable of identifying unique antibodies for a broad range of therapeutic targets. Under the terms of the agreement, Merck will be responsible for all future product development expenses for the selected antibody candidate targeting an undisclosed Merck checkpoint target. Agenus is eligible to receive up to $100 million in milestone payments, in addition to royalties on worldwide product sales.

May: Appointed Ulf Wiinberg to the Company’s Board of Directors. Ulf brings over 30 years of experience in the pharmaceutical industry with senior leadership roles at multiple global drug development companies. Most recently, he served as Chief Executive Officer of H. Lundbeck A/S, and previously held multiple executive roles at Wyeth, one of the world’s largest research-driven pharmaceutical companies. Currently, he serves on the boards of multiple drug companies including Avillion, Hansa Medical, Nestle Health Sciences and UCB SA.

Second Quarter 2016 Financial Results

For the second quarter ended June 30, 2016, Agenus reported a net loss attributable to common stockholders of $28.4 million which includes $7.6 million of non-cash expenses. This compares to a net loss attributable to common stockholders for the second quarter of 2015 of $40.5 million which included $17.3 million of non-cash expenses. Net loss was $0.33 per share, and $0.53 per share, basic and diluted, for the three months ended June 30, 2016 and 2015, respectively. The decrease in net loss attributable to common stockholders for the three months ended June 30, 2016, compared to the net loss attributable to common stockholders for the same period in 2015, was primarily due to the $13.2 million charge for the purchase of the SECANT yeast display platform in 2015 and the non-cash expense from fair value adjustments of the contingent obligations partially offset by the advancement of the checkpoint antibody programs.

For the six months ended June 30, 2016, the company reported a net loss attributable to common stockholders of $60.2 million, which includes $17.2 million in non-cash expenses, compared with a net loss attributable to common stockholders of $59.3 million, which included $26.5 million in non-cash expenses, for the six months ended June 30, 2015. Net loss was $0.69 per share and $0.83 per share, basic and diluted for the six months ended June 30, 2016 and 2015, respectively.

Cash, cash equivalents and short-term investments were $123.3 million as of June 30, 2016.

On July 28, 2016 Alkermes plc (NASDAQ: ALKS) reported financial results for the second quarter of 2016 (Press release, Alkermes, JUL 28, 2016, View Source;p=RssLanding&cat=news&id=2189393 [SID:1234514098]).

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"Our second quarter results demonstrate the power of our business model to efficiently capture operating leverage as our topline grows. These results reflect the growth of VIVITROL and launch of ARISTADA as well as the continued strength of our royalty and manufacturing business. VIVITROL’s robust growth continued as we expand access and utilization in the large Medicaid patient population. We are also encouraged by our progress with the launch of ARISTADA, for which our second quarter results were slightly ahead of expectations," commented James Frates, Chief Financial Officer of Alkermes. "Today we are improving our financial expectations for 2016 to reflect the accelerating growth in VIVITROL net sales. With our highly diversified portfolio and strong financial position, we have the resources to advance our innovative pipeline and invest in the ongoing launch of ARISTADA and growth of VIVITROL."

"Our proprietary commercial products, VIVITROL and ARISTADA, represent important growth opportunities at a time when substance abuse and mental illness are significant public health priorities," said Richard Pops, Chief Executive Officer of Alkermes. "Against this backdrop, we continue to make important advances for VIVITROL and are just beginning to see what its ultimate potential may be. The launch of ARISTADA in the rapidly growing, long-acting antipsychotic market continues to progress well, with reimbursement and access initiatives advancing across the country. We are also making headway on our late-stage pipeline of product candidates: the phase 3 studies for ALKS 3831 for schizophrenia and ALKS 8700 for multiple sclerosis will enroll throughout the remainder of 2016, and we expect to report topline data from the FORWARD-5 study of ALKS 5461 for major depressive disorder by year-end."

Quarter Ended June 30, 2016 Highlights

Total revenues for the quarter were $195.2 million. This compared to $151.4 million for the same period in the prior year.
Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $47.2 million, or a basic and diluted GAAP loss per share of $0.31, for the quarter, which reflected increased investment in the company’s advancing late-stage pipeline and commercial infrastructure. This compared to GAAP net loss of $46.1 million, or a basic and diluted GAAP loss per share of $0.31, for the same period in the prior year.
Non-GAAP net loss was $1.6 million, or a non-GAAP basic and diluted loss per share of $0.01, for the quarter. This compared to non-GAAP net loss of $18.7 million, or a non-GAAP basic and diluted loss per share of $0.13, for the same period in the prior year.
Quarter Ended June 30, 2016 Financial Results

Revenues

Net sales of VIVITROL were $47.2 million, compared to $37.2 million for the same period in the prior year.
Net sales of ARISTADA were $10.3 million, up from $5.5 million in the first quarter of 2016.
Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $69.6 million, compared to $60.8 million for the same period in the prior year.
Manufacturing and royalty revenues from AMPYRA/FAMPYRA1 were $40.8 million, compared to $26.9 million for the same period in the prior year, reflecting the timing of shipments.
Royalty revenue from BYDUREON was $12.3 million, compared to $11.1 million for the same period in the prior year.
Costs and Expenses

Operating expenses were $242.3 million, reflecting increased investment in the company’s development pipeline and the continued launch of ARISTADA. Operating expenses for the quarter ended June 30, 2015 were $203.9 million.
Balance Sheet

At June 30, 2016, Alkermes had cash and total investments of $677.7 million, compared to $798.8 million at Dec. 31, 2015. At June 30, 2016, the company’s total debt outstanding was $347.0 million. Alkermes expects to pay down $60.0 million of term loan upon maturity in September 2016. The remainder of the debt is due in September 2019.

Financial Expectations

Alkermes is updating its financial expectations for 2016 as a result of accelerating growth trends for VIVITROL, which are driving a $10 million increase in expected revenues and a corresponding $10 million improvement in GAAP net loss. This, in addition to certain changes to the calculation of non-GAAP measures, pursuant to guidelines issued by the Securities and Exchange Commission ("SEC"), results in a $20 million improvement to non-GAAP net loss. The following outlines Alkermes’ updated financial expectations for 2016.

Revenues: The company now expects total revenues to range from $710 million to $760 million, up from the previous range of $700 million to $750 million.

The company now expects VIVITROL net sales to range from $190 million to $210 million, up from a previous range of $180 million to $200 million.

Cost of Goods Manufactured and Sold: The company continues to expect cost of goods manufactured and sold to range from $125 million to $135 million.

Research and Development (R&D) Expenses: The company continues to expect R&D expenses to range from $370 million to $400 million.

Selling, General and Administrative (SG&A) Expenses: The company continues to expect SG&A expenses to range from $360 million to $390 million.

Amortization of Intangible Assets: The company continues to expect amortization of intangible assets of approximately $60 million.
Net Interest Expense: The company continues to expect net interest expense of approximately $10 million.

Net Income Tax Expense: The company continues to expect net income tax expense to range from $0 million to $10 million.
GAAP Net Loss: The company now expects GAAP net loss to range from $215 million to $245 million, or a basic and diluted loss per share of $1.41 to $1.61, based on weighted average basic and diluted share counts of approximately 152 million shares outstanding. This compares to previous expectations of GAAP net loss in the range of $225 million to $255 million, or a basic and diluted loss per share of approximately $1.48 to $1.68, based on weighted average basic and diluted share counts of approximately 152 million shares outstanding.

Non-GAAP Net Loss: The company now expects non-GAAP net loss to range from $5 million to $35 million, or a basic and diluted loss per share of $0.03 to $0.23, based on weighted average basic and diluted share counts of approximately 152 million shares outstanding. This compares to previous expectations of non-GAAP net loss in the range of $25 million to $55 million, or a non-GAAP diluted loss per share of $0.16 to $0.36, based on weighted average diluted share counts of approximately 152 million shares outstanding.

Capital Expenditures: The company continues to expect capital expenditures to be approximately $45 million.

On July 28, 2016 Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, reported its financial results for the second quarter of 2016, ended July 2, 2016 (Press release, Thermo Fisher Scientific, JUL 28, 2016, View Source [SID:1234514102]).

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Second Quarter 2016 Highlights

Revenue increased 6% to $4.54 billion.
GAAP diluted earnings per share (EPS) increased 2% to $1.30.
Adjusted EPS grew 10% to $2.03.
Strengthened leadership in analytical instruments by launching a suite of software and Cloud-based solutions for research and applied markets, and introducing new products to accelerate drug discovery, including our flagship Q Exactive BioPharma mass spectrometer.
Delivered strong performance in emerging markets, led by China, South Korea and India.
Announced agreement to acquire FEI Company for $4.2 billion, adding leading electron microscopy technologies to significantly increase capabilities for structural biology applications and create new growth opportunities in attractive materials science markets.
Adjusted EPS, adjusted operating income, adjusted operating margin and free cash flow are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of Non-GAAP Financial Measures."

"We’re pleased to announce another quarter of strong financial results," said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. "Our team executed well in the second quarter, contributing to an outstanding first half.

"We continued to build on our leadership position by executing our proven growth strategy. During the quarter, we launched new products that raise the bar on performance and productivity, delivered strong growth in emerging markets and enhanced our unique customer value proposition. We’re continuing to effectively deploy capital to strengthen our competitive position and drive growth. We’re excited about our pending acquisition of FEI, which will add leading capabilities in electron microscopy that complement our analytical instruments portfolio. We plan to leverage our industry leadership to expand the use of these technologies in life sciences and applied markets, creating significant value for our customers and our shareholders.

"In summary, we’re in a great position at the halfway point of the year and on track to deliver an excellent 2016."

Second Quarter 2016

For the second quarter of 2016, revenue grew 6% to $4.54 billion, versus $4.27 billion in the second quarter of 2015. Organic revenue growth was 4%; acquisitions increased revenue by 3% and currency translation decreased revenue slightly.

GAAP Earnings Results

GAAP diluted EPS increased to $1.30, versus $1.27 in the same quarter last year. GAAP operating income for the second quarter of 2016 increased 7% to $638 million, compared with $596 million in the second quarter of 2015. GAAP operating margin was 14.1%, compared with 14.0% in the second quarter of 2015.

Non-GAAP Earnings Results

Adjusted EPS in the second quarter of 2016 grew 10% to $2.03, versus $1.84 in the second quarter of 2015. Adjusted operating income for the second quarter of 2016 increased 9% compared with the year-ago quarter. Adjusted operating margin was 22.8%, compared with 22.3% in the second quarter of 2015.

2016 Guidance Update

Thermo Fisher is updating its revenue and adjusted EPS guidance for 2016 to reflect strong operating performance in the first half of the year, as well as a more unfavorable foreign exchange environment. The company now expects revenue to be in the range of $17.84 to $18.00 billion versus its guidance of $17.86 to $18.04 billion announced on April 28, 2016. This would continue to result in 5 to 6% revenue growth over the previous year. The company is raising its adjusted EPS guidance to a new range of $8.07 to $8.20 versus $8.05 to $8.19, for 9 to 11% growth year over year as previously announced.

Segment Results

Management uses adjusted operating results to monitor and evaluate performance of the company’s four business segments, as highlighted below. Since these results are used for this purpose, they are also considered to be prepared in accordance with GAAP.

Life Sciences Solutions Segment

In the second quarter of 2016, Life Sciences Solutions Segment revenue grew 13% to $1.28 billion, compared with revenue of $1.13 billion in the second quarter of 2015. Segment operating margin was 28.9% versus 28.6% in 2015.

Analytical Instruments Segment

Analytical Instruments Segment revenue increased 2% to $794 million in the second quarter of 2016, compared with revenue of $777 million in the second quarter of 2015. Segment operating margin was 18.3% versus 18.0% in the 2015 quarter.

Specialty Diagnostics Segment

Specialty Diagnostics Segment revenue in the second quarter increased 4% to $851 million in 2016, compared with revenue of $817 million in the second quarter of 2015. Segment operating margin was 27.9% versus 27.8% in the 2015 quarter.

Laboratory Products and Services Segment

In the second quarter of 2016, Laboratory Products and Services Segment revenue grew 6% to $1.80 billion, compared with revenue of $1.69 billion in the second quarter of 2015. Segment operating margin was 15.5% versus 15.4% in the 2015 quarter.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including adjusted EPS, adjusted operating income and adjusted operating margin, which exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs; restructuring and other costs/income; and amortization of acquisition-related intangible assets. Adjusted EPS also excludes certain other gains and losses that are either isolated or cannot be expected to occur again with any regularity or predictability, tax provisions/benefits related to the previous items, benefits from tax credit carryforwards, the impact of significant tax audits or events and the results of discontinued operations. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods. We also use a non-GAAP measure, free cash flow, which is operating cash flow, net of capital expenditures, and also excludes operating cash flows from discontinued operations to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities. We believe that the use of non-GAAP measures helps investors to gain a better understanding of our core operating results and future prospects, consistent with how management measures and forecasts the company’s performance, especially when comparing such results to previous periods or forecasts.

For example:

We exclude costs and tax effects associated with restructuring activities, such as reducing overhead and consolidating facilities. We believe that the costs related to these restructuring activities are not indicative of our normal operating costs.

We exclude certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition and significant transaction costs. We exclude these costs because we do not believe they are indicative of our normal operating costs.

We exclude the expense and tax effects associated with the amortization of acquisition-related intangible assets because a significant portion of the purchase price for acquisitions may be allocated to intangible assets that have lives of 5 to 20 years. In 2016, based on acquisitions closed through the end of the second quarter, our adjusted EPS will exclude approximately $2.29 of expense for the amortization of acquisition-related intangible assets. Exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both our newly acquired and long-held businesses and with both acquisitive and non-acquisitive peer companies.

We also exclude certain gains/losses and related tax effects, benefits from tax credit carryforwards and the impact of significant tax audits or events (such as the effect on deferred tax balances of enacted changes in tax rates), which are either isolated or cannot be expected to occur again with any predictability and that we believe are not indicative of our normal operating gains and losses. For example, we exclude gains/losses from items such as the sale of a business or real estate, gains or losses on significant litigation-related matters, gains on curtailments of pension plans, the early retirement of debt and discontinued operations.

We also report free cash flow, which is operating cash flow, net of capital expenditures, and also excludes operating cash flows from discontinued operations to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities.

Thermo Fisher’s management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the company’s core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making and for compensation purposes.

The non-GAAP financial measures of Thermo Fisher’s results of operations and cash flows included in this press release are not meant to be considered superior to or a substitute for Thermo Fisher’s results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables. Thermo Fisher’s earnings guidance, however, is only provided on an adjusted basis. It is not feasible to provide GAAP EPS guidance because the items excluded, other than the amortization expense, are difficult to predict and estimate and are primarily dependent on future events, such as acquisitions and decisions concerning the location and timing of facility consolidations.

On July 28, 2016 Cytokinetics, Inc. (Nasdaq:CYTK) reported total revenues for the second quarter of 2016 were $5.8 million, compared to $6.5 million, during the same period in 2015 (Press release, Cytokinetics, JUL 28, 2016, View Source;p=RssLanding&cat=news&id=2189723 [SID:1234514112]). The net loss for the second quarter was $11.6 million, or $0.29 per basic and diluted share. This is compared to the net loss for the same period in 2015 of $10.6 million, or $0.27 per basic and diluted share. As of June 30, 2016, cash, cash equivalents and investments totaled $98.0 million.

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"We had a productive quarter advancing key clinical, regulatory and commercial planning initiatives across our portfolio of muscle-biology directed drug candidates," said Robert I. Blum, Cytokinetics’ President and Chief Executive Officer. "Our recently expanded collaboration with Astellas aligns our interests with regard to tirasemtiv and ALS and provides a path forward for our two skeletal muscle activators as potential treatments for ALS. Toward that objective, we expect that VITALITY-ALS will soon conclude patient enrollment, a major milestone for our Phase 3 clinical trial of tirasemtiv in patients with ALS. We also continue to prepare for the start of a potential Phase 3 development program for omecamtiv mecarbil in collaboration with Amgen. These are especially promising and hopeful times at Cytokinetics as our programs advance towards late-stage milestones."

Recent Highlights and Upcoming Milestones

Cardiac Muscle Program

omecamtiv mecarbil

Announced the start of a double-blind, randomized, placebo-controlled, multi-center Phase 2 clinical trial to evaluate the safety, pharmacokinetics and efficacy of omecamtiv mecarbil in Japanese subjects with heart failure and reduced ejection fraction.
Presented a poster titled "COSMIC-HF: Improved Contractility and Evolution of Ventricular Remodeling through Time" at Heart Failure 2016, the annual congress of the Heart Failure Association of the European Society of Cardiology. The results indicated that omecamtiv mecarbil improved left ventricular (LV) systolic function, LV end-diastolic volume and NT-proBNP over time, suggesting potentially favorable ventricular remodeling and progressive reduction in myocardial wall stress.
Participated with Amgen in additional regulatory interactions with the FDA, EMA and Health Canada to inform the design and conduct of a potential Phase 3 development program for omecamtiv mecarbil.
Conducted clinical, regulatory, non-clinical and commercial planning activities in collaboration with Amgen to support the potential advancement of omecamtiv mecarbil to a Phase 3 development program.
Expect to make a decision regarding the advancement of omecamtiv mecarbil to Phase 3 in the third quarter of 2016.
Skeletal Muscle Program

tirasemtiv

Recently announced that we have granted Astellas an option right for the development and commercialization of tirasemtiv outside of North America, Europe and other select countries.*
Completing screening of patients in VITALITY-ALS (Ventilatory Investigation of Tirasemtiv and Assessment of Longitudinal Indices after Treatment for a Year in ALS), an ongoing, international Phase 3 clinical trial designed to assess the effects of tirasemtiv versus placebo on slow vital capacity (SVC) and other measures of skeletal muscle strength in patients with ALS.
Expect to complete enrollment of VITALITY-ALS in August 2016. Expect data from VITALITY–ALS in the second half of 2017.
Conducted regulatory interactions with each of FDA and EMA to inform the design and conduct of an open-label extension clinical trial for patients who complete VITALITY-ALS.

Expect to begin an open-label extension trial for patients who complete VITALITY-ALS in the fourth quarter of 2016.
CK-2127107

Recently announced that we have amended our collaboration agreement with Astellas to enable the development of CK-2127107 for the potential treatment of ALS.*

Continued enrollment of the ongoing Phase 2 clinical trial of CK-2127107 in patients with spinal muscular atrophy (SMA) in collaboration with Astellas.

Expect to complete enrollment of Cohort 1 in the Phase 2 clinical trial of CK-2127107 in patients with SMA in the second half of 2016. Expect data from this clinical trial in first half of 2017.
Announced the start of a Phase 2 clinical trial of CK-2127017 in patients with COPD. Expect to complete enrollment and to analyze data from this clinical trial in 2017.
Pre-Clinical Research

Continued research activities under our joint research program with Amgen directed to the discovery of next-generation cardiac muscle activators and under our joint research program with Astellas directed to the discovery of next-generation skeletal muscle activators. In addition, company scientists continued independent research activities directed to our other muscle biology programs.

Recently announced that we have extended our joint research program with Astellas focused on the discovery of next-generation skeletal muscle activators through 2017.*

Anticipate potential advancement of one next-generation compound from a joint research program into pre-clinical development during 2016.
Corporate

Expect to receive $65 million in committed capital from Astellas which includes upfront payments for Astellas’ option right exercisable for tirasemtiv and amended terms of the companies’ collaboration agreement to include ALS for CK-2127107. In addition, Cytokinetics expects to receive approximately $30 million in additional sponsored research and development funding through 2017 from Astellas.*
Received 2016 Essey Commitment to a Cure Award from the ALS Association Golden West Chapter.
Announced appointment of Edward M. Kaye, M.D. to Cytokinetics Board of Directors.

Appointed Caryn McDowell, Cytokinetics’ General Counsel as Chief Compliance Officer.

Rang the closing bell at NASDAQ accompanied by leaders of the ALS Association in recognition of ALS Awareness month and the company’s commitment to education, awareness, research and development activities focused to amyotrophic lateral sclerosis (ALS).
* The effectiveness of the amended agreement with Astellas is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Financials

Revenues for the second quarter of 2016 were $5.8 million, compared to $6.5 million during the same period in 2015. Revenues for the second quarter of 2016 included $2.9 million of research and development revenues and $1.9 million of license revenues from our collaboration with Astellas, $0.6 million in research and development revenues from our collaboration with Amgen and $0.3 million in research and development revenues from our collaboration with ALSA. Revenues for the same period in 2015 were comprised of $3.0 million of license revenues and $2.9 million of research and development revenues from our collaboration with Astellas, and $0.6 million of research and development revenues from our collaboration with Amgen. The decrease in revenues for the second quarter of 2016, compared with the same period in 2015, was mainly due to timing of license revenue recorded under the Astellas collaboration agreement, due to the extension of the timeframe of development services.

Total research and development (R&D) expenses for the second quarter of 2016 were $9.7 million, compared to $12.6 million for the same period in 2015. The $2.9 million decrease in R&D expenses for the second quarter of 2016, compared with the same period in 2015, was primarily due to a decrease of $2.3 million in outsourced preclinical costs associated with clinical manufacturing activities, and a decrease of $1.7 million in outsourced clinical costs, partially offset by an increase of $1.3 million in personnel related expenses due to increased headcount costs. The decrease in outsourced clinical costs was comprised of an increase of $2.8 million in outsourced clinical costs mainly associated with the ongoing VITALITY-ALS trial, offset by a $4.5 million litigation settlement in June 2016 from a contract research organization for our Phase 2 BENEFIT-ALS clinical trial which was concluded in 2014.

Total general and administrative (G&A) expenses for the second quarter of 2016 were $7.1 million compared to $4.5 million for the same period in 2015. The $2.6 million increase in G&A expenses for the second quarter of 2016, compared to the same period in 2015, was primarily due to an increase of $1.1 million in personnel related expenses due to increased non-cash stock compensation expense and increased headcount, an increase of $0.7 million in outsourced costs related to accounting and finance and commercial development, and an increase of $0.8 million in corporate and patent legal fees.

Revenues for the six months ended June 30, 2016 were $14.2 million, compared to $11.0 million for the same period in 2015. Revenues for the first six months of 2016 included $6.6 million of research and development revenues and $5.9 million of license revenues from our collaboration with Astellas, $1.2 million of research and development revenues from our collaboration with Amgen, and $0.5 million in research and development revenues from our collaboration with ALSA. Revenues for the same period in 2015 included $5.0 million of research and development revenues and $4.7 million of license revenues from our collaboration with Astellas, and $1.3 million of research and development revenues from our collaboration with Amgen.

Total R&D expenses for the six months ended June 30, 2016 were $23.3 million, compared to $21.6 million for the same period in 2015. The $1.7 million increase in R&D expenses in the first six months of 2016, over the same period in 2015, was primarily due to an increase of $2.4 million in outsourced clinical costs and an increase of $2.3 million in personnel related expenses due to increased headcount, partially offset by a decrease of $2.9 million in outsourced preclinical costs associated with clinical manufacturing activities. The increase in outsourced clinical costs was comprised of an increase of $6.9 million in outsourced clinical costs mainly associated with the ongoing VITALITY-ALS trial, offset by a $4.5 million settlement in June 2016 with a contract research organization for our Phase 2 BENEFIT-ALS clinical trial which was concluded in 2014.

Total G&A expenses for the six months ended June 30, 2016 were $13.9 million, compared to $8.9 million for the same period in 2015. The $5.0 million increase in G&A spending in the first six months of 2016 compared to the same period in 2015, was primarily due to an increase of $2.1 million in personnel related expenses due to increased non-cash stock compensation expense and increased headcount, an increase of $1.3 million in outsourced costs related to accounting and finance and commercial development, and an increase of $1.4 million in corporate and patent legal fees.

The net loss for the six months ended June 30, 2016, was $24.1 million, or $0.61 per basic and diluted share, compared to a net loss of $19.4 million, or $0.50 per basic and diluted share, for the same period in 2015.

Financial Guidance

We will not update our financial guidance until our Q3 Earnings due to the recent expansion of our collaboration with Astellas; at that time we expect to provide updated 2016 financial guidance on both a cash and GAAP basis.