On May 9, 2016 Eagle Pharmaceuticals, Inc. ("Eagle" or "the Company") (Nasdaq: EGRX) reported its financial results for the first quarter ended March 31, 2016 (Press release, Eagle Pharmaceuticals, MAY 9, 2016, View Source [SID:1234512110]). Highlights of and subsequent to the first quarter of 2016 include:

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Business Highlights:

Bendeka was launched January 28, 2016 by Eagle’s marketing partner, Teva Pharmaceutical Industries (Teva); total market share, as of May 6, 2016, was 71% and 77% in core hospital outpatient and clinic segments combined (representing 70% of the total market);
Eagle entered into an agreement with the National Institutes of Health (NIH)/National Institute on Drug Abuse (NIDA) to explore the use of Ryanodex in the treatment of hyperthermia related to MDMA (Ecstasy) and Methamphetamine intoxication;
Eagle entered into an agreement to divest diclofenac-misoprostsol to a third party in exchange for $1.75 million and a 25% royalty on net profits for five years; and,
Eagle completed its first quarter with an internal salesforce fully focused on commercialization of Eagle’s in-market products.
Financial Highlights:

Total revenue was $29.6 million during the first quarter of 2016 compared to $36.3 million for the three months ended March 31, 2015;
Product sales increased to $14.1 million during the first quarter of 2016 compared to $3.1 million for the three months ended March 31, 2015;
Sales of Ryanodex grew 5% quarter over quarter to $1.9 million during the first quarter of 2016;
Net loss was $896,000, or $0.06 per basic and diluted share, compared to net income of $19.7 million, or $1.38 per basic and $1.31 per diluted share, for the three months ended March 31, 2016 and 2015, respectively; and,
Cash and cash equivalents were $78.3 million as of March 31, 2016.
"Our business outlook for the Company remains bright. Our bendamustine product family offers significant opportunity for growth and is being accepted well by physicians and patients. Assuming bendamustine generics do not come to market, and with Bendeka gaining momentum, based on its product profile which customers seem to prefer, we believe Bendeka is on track to reach Teva’s and our shared goal of 90% market share or greater and will be an important earnings driver for Eagle for years to come," said Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals.

"In addition to our other product candidates, we believe Ryanodex has the potential for multiple additional clinical indications. These opportunities in treating exertional heat stroke and ecstasy and methamphetamine intoxication, if approved, would open up significant new markets for the product. We are encouraged by the potential of our products to deliver solutions that address life-threatening conditions and improve treatment outcomes and look forward to upcoming milestones that we expect will drive meaningful earnings growth," concluded Tarriff.

First Quarter 2016 Financial Results

Total revenue for the three months ended March 31, 2016 was $29.6 million, as compared to $36.3 million for the three months ended March 31, 2015. A summary of total revenue is outlined below:

Three Months Ended
March 31, Increase/(Decrease)
2016 2015
(in thousands)
Product sales $ 14,122 $ 3,056 $ 11,066
Royalty income 9,469 3,253 6,216
License and other income 6,000 30,000 (24,000 )
Total revenue $ 29,591 $ 36,309 $ (6,718 )

Product sales increased $11.1 million to $14.1 million in the first quarter of 2016 driven by $10.3 million in net product sales of Bendeka, 5% growth in Ryanodex net product sales to $1.9 million, $0.9 million in net sales of Docetaxel and increases in net sales of Diclofenac-misoprostol, offset by a decrease in Argatroban product sales to our commercial partners.

The $6.2 million increase in royalty income to $9.5 million was driven by the launch of Bendeka during the first quarter of 2016.

License and other income in the three months ended March 31, 2016 was $6 million compared with $30 million in the prior year quarter. This $6 million reflects revenue previously deferred from the 2010 sale of a non-core asset subject to a claw back provision, which has now expired.

Cost of revenue increased by $8.6 million to $14.5 million in the three months ended March 31, 2016 from $5.9 million in the three months ended March 31, 2015. This $8.6 million net increase resulted primarily from the cost of Bendeka product sales, Docetaxel and Diclofenac-misoprostol, offset by a decrease in cost of revenue for Ryanodex due to spoiled inventory, and lower Argatroban product sales.

Research and development expenses increased by $0.4 million to $6.7 million in the three months ended March 31, 2016, compared to $6.3 million in the prior year quarter. The increase is due primarily to the successful completion of the clinical treatment portion of the safety and efficacy study of Ryanodex for exertional heatstroke, investment in Kangio and other pipeline products, and higher R&D personnel costs offset by a decrease in spending related to bendamustine.

SG&A expenses were $11 million in the first quarter of 2016 compared to $4 million in the three months ended March 31, 2015. Personnel-related expenses accounted for the bulk of the $7 million increase and were due to overall expansion of the business.

Net loss for the first quarter was $896,000, or $0.06 per basic share and diluted share, compared to a net income of $19.7 million, or $1.38 per basic and $1.31 per diluted share in the three months ended March 31, 2015, as a result of the factors discussed above.

Liquidity

As of March 31, 2016, the Company had $78.3 million in cash and cash equivalents; $15 million in receivables due from Teva; $200.3 million in additional paid in ca

On May 9, 2016 Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD), a commercial biotechnology company, reported an update on its first quarter 2016 results and recent business activities (Press release, Ironwood Pharmaceuticals, MAY 9, 2016, View Source [SID:1234512137]).

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"In the first few months of 2016, Ironwood made significant progress building a top-performing commercial biotech company. We delivered strong operational performance, advanced a second program into Phase IIb trials, and executed a license agreement that leverages our strong commercial capabilities and puts us on track for at least five U.S. commercial product launches by 2020," said Peter Hecht, chief executive officer of Ironwood. "The quarter’s results also demonstrate continued strong LINZESS growth: more than 4.5 million prescriptions have now been filled by more than 1 million patients since launch, and market research has shown high physician and patient satisfaction with LINZESS as an effective and safe treatment option for adults suffering from IBS-C or CIC."

First Quarter 2016 and Recent Highlights

Irritable Bowel Syndrome with Constipation (IBS-C) / Chronic Idiopathic Constipation (CIC) Franchise

Ironwood estimates its IBS-C/CIC franchise, including LINZESS and linaclotide colonic release (if approved), which are jointly owned in the U.S. by Ironwood and Allergan with both companies sharing equally in any profits or losses, may represent a peak U.S. sales opportunity exceeding $2 billion, with additional global potential.

LINZESS. U.S. net sales, as provided by Allergan, were $137.1 million in the first quarter of 2016, a 44% increase compared to the first quarter of 2015.
Nearly 600,000 total LINZESS prescriptions were filled in the first quarter of 2016, a 30% increase compared to the first quarter of 2015, according to IMS Health.
Net profit for the LINZESS U.S. brand collaboration, including commercial and research and development (R&D) expenses, was $58.4 million in the first quarter of 2016.
LINZESS commercial margin was 55% in the first quarter of 2016, compared to 39% in the first quarter of 2015.
Ironwood and Allergan launched a new direct to consumer marketing campaign, and the companies increased LINZESS managed care coverage and expanded the entry into new market segments including long term care.
Ironwood and Allergan continue to expect to launch a 72 mcg dose of linaclotide in early 2017, if approved. The companies anticipate that the 72 mcg dose will accelerate physician prescribing of LINZESS within the large, heterogeneous adult CIC patient population.
Linaclotide Colonic Release. A Phase IIb clinical trial is enrolling patients, with data expected in the second half of 2016. This second-generation guanylate cyclase-C (GC-C) agonist product candidate has the potential to provide greater and faster abdominal pain relief in adult IBS-C patients and to expand the IBS-C and CIC market, if approved.
Refractory Gastroesophageal Reflux Disease (GERD) Franchise

IW-3718. Ironwood initiated a dose-ranging Phase IIb clinical trial with IW-3718, a wholly-owned asset, for the potential treatment of refractory GERD. Data from the Phase IIb trial are expected in 2017. If approved, Ironwood estimates peak sales for IW-3718 may exceed $2 billion.
Uncontrolled Gout Franchise

On April 26, Ironwood announced that it signed a licensing agreement with AstraZeneca for the exclusive U.S. rights to all products containing lesinurad. This includes FDA-approved ZURAMPIC (lesinurad 200mg tablets) as well as a fixed-dose combination of lesinurad and allopurinol, which AstraZeneca plans to submit for FDA regulatory review in the second half of 2016.

For as many as two million gout patients in the U.S., treatment with a xanthine oxidase inhibitor (XOI) such as allopurinol to decrease production of uric acid is not sufficient to achieve treatment goals. ZURAMPIC complements XOI therapy by increasing excretion of uric acid and is indicated for use in combination with an XOI for the treatment of hyperuricemia associated with uncontrolled gout. ZURAMPIC is not recommended for the treatment of asymptomatic hyperuricemia and should not be used as monotherapy.

The transaction is expected to close in the second quarter of 2016, and Ironwood expects to launch ZURAMPIC in the middle of the second half of 2016.

Vascular and Fibrotic Franchise

Ironwood is leveraging its pharmacologic expertise in guanylate cyclases to advance soluble guanylate cyclase (sGC) stimulators for the potential treatment of vascular and fibrotic diseases. Ironwood believes this opportunity has the potential to deliver multiple products, a number of which could generate peak sales exceeding $1 billion if approved. All vascular and fibrotic assets are wholly-owned by Ironwood. Highlights during the first quarter and recent period include:

IW-1701. Ironwood announced positive top-line results from a Phase Ia study of IW-1701 and is in the process of initiating a Phase Ib multiple ascending dose study, with topline data expected in the second half of 2016.
IW-1973. Ironwood is currently enrolling healthy volunteers in a Phase Ib clinical study with IW-1973 designed to assess its safety, tolerability, pharmacokinetic profile and pharmacodynamic effects. Data from this study are expected in the second half of 2016.
Data from pre-clinical and early clinical studies of these compounds are being presented at several scientific conferences this spring.
Ironwood expects to initiate multiple Phase II studies with its sGC stimulators this year.

Additional Programs

Diabetic Gastroparesis

IW-9179. Ironwood previously announced that top-line data from an exploratory Phase IIa clinical study indicated IW-9179 did not meaningfully reduce the severity of symptoms in patients with diabetic gastroparesis and it will discontinue development of IW-9179 for gastroparesis.

Global Collaborations and Partnerships

Ironwood’s strong U.S. commercial organization successfully introduced LINZESS to the market with its partner Allergan and expects to commercialize multiple important products in the U.S. over time. Ironwood expects to out-license ex-U.S. commercialization rights to its pipeline product candidates. Highlights during the first quarter and recent period include:

Astellas Pharma Inc. filed for approval with the Ministry of Health, Labor and Welfare to market linaclotide in Japan for IBS-C in adult patients, which resulted in Ironwood earning a $15 million development milestone payment, which was received in the first quarter.
Ironwood and AstraZeneca AB filed for approval with the China Food and Drug Administration to market linaclotide in China for the treatment of adult patients with IBS-C.
Ironwood continued co-promoting Allergan’s VIBERZI (eluxadoline) for adults suffering from IBS with diarrhea (IBS-D) and Exact Sciences’ Cologuard noninvasive stool DNA screening test for colorectal cancer, in the U.S. Both partnerships represent productive and efficient utilization of Ironwood’s commercial capabilities and continue to generate incremental revenues.
Corporate and Financials

Collaborative Arrangements Revenue
Collaborative arrangements revenue was $66.0 million in the first quarter of 2016 compared to $28.9 million in the first quarter of 2015. Revenue primarily consisted of $46.6 million in revenue associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., compared to $25.1 million in the first quarter of 2015.
Ironwood recognized $12.9 million in revenue of the $15.0 million milestone payment from Astellas during the first quarter of 2016.
Operating Expenses
Operating expenses were $68.0 million in the first quarter of 2016 as compared to $57.0 million in the first quarter of 2015. Operating expenses in the first quarter of 2016 consisted of $31.8 million in R&D expenses, and $36.2 million in selling, general and administrative (SG&A) expenses. Non-cash share-based compensation expenses recorded in R&D and SG&A expenses in the first quarter of 2016 were $2.5 million and $4.3 million, respectively.
Other Expense
Interest Expense. Net interest expense was $9.7 million in the first quarter of 2016, in connection with the company’s $175 million debt financing executed in January 2013 and the approximately $336 million convertible debt financing executed in June 2015. Interest expense recorded in the first quarter of 2016 includes $6.3 million in cash expense and $3.6 million in non-cash expense.
Gain/Loss on Derivatives. Ironwood records a gain/loss on derivatives related to the change in fair value of the convertible note hedges and note hedge warrants issued in connection with the convertible debt financing in June 2015. A loss on derivatives of $1.6 million was recorded in the first quarter of 2016.
Net Loss
GAAP net loss was $13.3 million, or $0.09 per share, in the first quarter of 2016, as compared to $33.2 million, or $0.24 per share, in the first quarter of 2015. Non-GAAP net loss excludes the impact of mark-to-market adjustments on the derivatives related to Ironwood’s convertible debt. Non-GAAP net loss was $11.7 million, or $0.08 per share, in the first quarter of 2016, as compared to $33.2 million, or $0.24 per share, in the first quarter of 2015. See Non-GAAP Financial Measures below.
Cash Position
Ironwood ended the first quarter of 2016 with $434 million of cash, cash equivalents and available-for-sale securities, a decrease of $5 million from the end of the fourth quarter of 2015. Ironwood generated $0.2 million in cash from operating activities during the first quarter of 2016. In contrast, in the first quarter of 2015, Ironwood used $36 million of cash for operations.
2016 Financial Guidance
In 2016, Ironwood expects:

Use of less than $70 million in cash for operations in 2016, revised as of April 26, 2016, at the time of the lesinurad deal announcement, from less than $60 million as previously guided.
Combined Allergan and Ironwood total 2016 marketing and sales expenses for LINZESS to be in the range of $230 million to $260 million.
On its second quarter 2016 investor update, following the closing of the lesinurad transaction, Ironwood expects to update its guidance for total annual operating expenses for 2016, including both R&D and SG&A expenses.

Non-GAAP Financial Measures

The company presents non-GAAP net loss and non-GAAP net loss per share to exclude the impact of net gains and losses on the derivatives related to our convertible notes that are required to be marked-to-market. These gains and losses may be highly variable, difficult to predict and of a size that could have a substantial impact on the company’s reported results of operations in any given period. Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures, please refer to the table at the end of this press release.

On May 9, 2016 FibroGen, Inc. (NASDAQ: FGEN) ("FibroGen"), a research-based biopharmaceutical company, reported financial results for the quarter ended March 31, 2016 (Filing, Q1, FibroGen, 2016, MAY 9, 2016, View Source [SID:1234512416]).

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"We are pleased with the progress of our major development programs across the board," said Thomas B. Neff, chief executive officer of FibroGen. "FibroGen and our collaboration partners continue to advance the roxadustat global Phase 3 program in anemia of chronic kidney disease with the hope of providing a safer and more accessible option for patients. We remain on track to initiate new drug application submissions in 2016 for China and in 2018 for the United States. Data from our ongoing Phase 2 programs relating to FG-3019 continues to support the development of this antibody as a potential therapy for devastating and difficult-to-treat diseases."
Program Updates
Anemia in Chronic Kidney Disease (CKD): roxadustat (FG-4592)

· Timelines for roxadustat remain on track. The company expects to initiate new drug application submissions for roxadustat in 2016 for China and in 2018 for the U.S.

· FibroGen and partners AstraZeneca and Astellas are conducting a total of seven Phase 3 trials for registration in the U.S., Europe, and other territories. FibroGen has completed target enrollment for two out of the three FibroGen-sponsored studies, and we have achieved over 80% of target enrollment in the third study.

· The independent data safety monitoring board overseeing roxadustat U.S. and Europe Phase 3 studies met in April 2016 to review the roxadustat safety data, and confirmed that the trials should proceed with current Phase 3 protocols without modification.

· In China, we are conducting two pivotal Phase 3 trials with roxadustat. We are over 80% enrolled in our 300 patient dialysis study, for which the primary efficacy endpoint is 26 weeks, and expect to complete enrollment this month. We are approximately one-third enrolled in our 150 patient non-dialysis study, for which the primary efficacy endpoint is eight weeks, and expect to complete enrollment in the third quarter of 2016. We expect to be able to report data in both studies by year-end.
Fibrosis and Other Fibroproliferative Disease: FG-3019

· In idiopathic pulmonary fibrosis (IPF), promising data from our open-label, single-arm dose-finding trial in subjects with moderate to severe IPF were presented in a manuscript published in the European Respiratory Journal (on-line publication in March, and in-print publication in May of this year). Results of the study showed that after 48 weeks of treatment 35% of the subjects receiving FG-3019 had stable or improved lung fibrosis, 24% had improved fibrosis, both as measured by quantitative high resolution computed tomography. For subjects in the high dose group with baseline forced vital capacity (FVC)≥55% predicted, 37% showed improvement in pulmonary function (as measured by FVC) at the end of the initial 48 week treatment portion of the study. An accompanying editorial noted that, to the best of current knowledge, neither of the two currently approved IPF treatments are targeting connective tissue growth factor (CTGF), posing a promising basis for a future placebo-controlled trial combining our anti-CTGF antibody FG-3019 with pirfenidone or nintedanib.

· We continue to see promising preliminary data from our ongoing open-label Phase 2 study in patients with inoperable Stage 3 pancreatic cancer. Subjects entering the trial must have failed resection scoring, i.e., been found to have unresectable tumors, and thus not eligible for surgery. At present, of nine patients randomized to receive FG-3019 plus chemotherapy (standard-of-care) three patients continue on treatment, one discontinued treatment early due to a chemotherapy-related serious adverse event and five patients completed six months of treatment. All five who completed treatment were reassessed as eligible for resection based on standard scoring criteria set forth in the protocol. Seven patients have been randomized to the comparator arm with only standard of care chemotherapy. Of the seven patients, three experienced disease progression prior to completing treatment and four completed the treatment regimen, of which only one was reassessed as eligible for tumor removal.

· We continue to enroll subjects and add sites in our open-label Phase 2 study of FG-3019 in non-ambulatory Duchenne muscular dystrophy (DMD) patients.
Financial Highlights

· Net loss per basic and diluted share, for the quarter ended March 31, 2016, was $0.45 per share, an improvement of $0.33 per share as compared to the same period last year.

· At March 31, 2016, FibroGen had $309.9 million of cash, cash equivalents, investments, receivables and restricted cash.

· For the quarter ended March 31, 2016, revenue increased 74% and research and development expenses decreased 14% as compared to the same period last year, largely due to the fact that we had reached the 50/50 spending cap with AstraZeneca during the fourth quarter of 2015 on our initial funding obligations for roxadustat. Under an agreement between FibroGen and AstraZeneca, FibroGen’s total funding obligations for roxadustat development in CKD outside China are limited to $116.5 million. As of the end of the fourth quarter of 2015, the $116.5 million cap on our share of development costs for roxadustat has been reached. Therefore starting in the first quarter of 2016, we no longer share 50% of the development costs compared to the prior periods, as, Astellas and AstraZeneca are now responsible for funding future development and commercialization costs for roxadustat in CKD through launch for all territories, excluding China, where AstraZeneca pays 50% of development costs.

On May 9, 2016 Epizyme, Inc. (NASDAQ:EPZM), a clinical stage biopharmaceutical company creating novel epigenetic therapies for people with cancer, reported recent business and program highlights as part of its multi-year vision and financial results for the first quarter of 2016 (Press release, Epizyme, MAY 9, 2016, View Source [SID:1234512112]).

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"We have made significant progress in our clinical development program for tazemetostat and all four areas of our multi-year vision," said Robert Bazemore, President and Chief Executive Officer of Epizyme. "We are well underway with plans to expand the tazemetostat clinical program into combination studies and its third cancer indication, continuing to advance our discovery pipeline and collaborative research efforts and have strengthened our team and business operations. With a number of milestones on the horizon, we are positioned to continue this momentum."

Accelerate Tazemetostat Program in Non-Hodgkin Lymphoma and Solid Tumors

Epizyme has submitted an abstract to present a study update from its phase 2 program in patients with relapsed or refractory non-Hodgkin lymphoma (NHL) at the 2016 American Society of Hematology (ASH) (Free ASH Whitepaper) Meeting on Lymphoma Biology in June. This presentation will include a progress update on the study enrollment, safety experience for all patients enrolled and an early look at clinical activity in the patient populations that have surpassed their futility hurdle as confirmed by the Independent Data Monitoring Committee (IDMC). The three arms confirmed to have surpassed the futility hurdle are: germinal center diffuse large B-cell lymphoma (DLBCL) with an EZH2 mutation; germinal center DLBCL with wild-type EZH2; and non-germinal center DLBCL. Futility in each of the DLBCL arms is based on observing at least one objective response in the first ten patients enrolled. Responses have been observed in the two arms enrolling patients with follicular lymphoma; however, neither arm has yet reached its futility hurdle, which is at least two objective responses out of the first ten patients enrolled.

The IDMC recently approved Epizyme’s planned expansion of enrollment in all five arms of the phase 2 study in patients with NHL. The total population will increase to 270 patients from 150. The three arms enrolling patients with DLBCL will now enroll 60 patients each, and the two arms enrolling patients with follicular lymphoma will now enroll 45 patients each. This expansion will enable more precision around the level of activity in each patient population, which will provide guidance for determining next steps in each population and the statistical design of potential subsequent studies. Pending abstract submission and acceptance, the Company plans to present a second study update at the ASH (Free ASH Whitepaper) Annual Meeting in late 2016.

Epizyme recently expanded the number of arms in the phase 2 study in adult patients with certain genetically defined solid tumor (INI1-negative tumors, SMARCA4-negative tumors or synovial sarcomas) to five arms from three due to a higher accrual of patients with certain types of INI1-negative tumors than it anticipated. The two arms enrolling patients with rhabdoid tumors and synovial sarcomas remain unchanged. A third arm will continue to enroll patients with other INI1-negative tumors, and the Company has now separated out two specific INI1-negative cohorts from the third arm. One arm will enroll patients with renal medullary carcinoma and another will enroll patients with epithelioid sarcoma. Pending abstract submission and acceptance, the Company plans to present preliminary data from the phase 2 adult solid tumor study at the EORTC-NCI-AACR (Free EORTC-NCI-AACR Whitepaper) Molecular Targets and Cancer Therapeutics Symposium in late 2016.

The phase 1 dose-escalation and expansion study of tazemetostat in pediatric patients with certain INI1-negative tumors, including rhabdoid tumors and synovial sarcomas, is enrolling well, and the study has escalated to the second dose level.
Expand Tazemetostat Program

In May, the U.S. Food and Drug Administration (FDA) accepted the Company’s Investigational New Drug (IND) application for tazemetostat for the treatment of adult patients with mesothelioma characterized by BAP1 loss-of-function. The Company plans to initiate a phase 2 trial in patients with mesothelioma in the third quarter of 2016.

Earlier today, Epizyme announced that it has entered into a collaboration agreement with the Lymphoma Academic Research Organisation (LYSARC) for the first planned combination trial of tazemetostat. LYSARC is the operational arm of the Lymphoma Study Association, a premier cooperative French lymphoma group. This phase 1b/2 study will evaluate tazemetostat administered together with R-CHOP as a front-line therapy for elderly, high-risk patients with DLBCL, and is expected to begin in mid-2016.

Data presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) conference in April further characterized the dosing and administration of tazemetostat. The findings show that tazemetostat is only a weak inducer of CYP3A-mediated metabolism, suggesting a low potential interaction with other treatments metabolized through this pathway. Pharmacokinetic data presented at that meeting also show that tazemetostat can be dosed with or without food. These findings further guide tazemetostat development as a monotherapy and in combination regimens.
Growth Discovery Pipeline

Epizyme scientists continue to advance the development of small molecule inhibitors against five targets that have been selected and prioritized for research.
Maintain Established Leadership Position

Epizyme added strength to its leadership team with new hires: Matthew Ros as Chief Operating Officer, Susan Graf as Chief Business Officer, Jeannie Chu as Vice President of Program and Portfolio Management and Michael Boretti, Ph.D. as Vice President of Business Development.
Q1 2016 Financials Results and Guidance

Collaboration revenue was $0.5 million for the quarter ended March 31, 2016, compared to $0.9 million for the same period last year. The period-over-period decrease reflects increased recognition of deferred revenue from upfront payments from the Celgene collaboration in the first quarter of 2016 offset by decreased recognition of deferred revenue from upfront payments and research and development revenue related to the GlaxoSmithKline collaboration compared to the first quarter of 2015 as no revenue was recognized with respect to the GSK collaboration in the first quarter of 2016.

Research and development (R&D) expenses were $17.7 million for the quarter ended March 31, 2016, compared to $57.1 million for the first quarter of 2015. The period-over-period decrease was driven by the first quarter 2015 payment to Eisai of $40.0 million related to the reacquisition of the worldwide rights, excluding Japan, to tazemetostat, and was partially offset by increased spending on the tazemetostat clinical development program.

Epizyme expects that R&D expenses will increase in 2016, when compared to 2015. The planned increase is primarily related to the development costs of tazemetostat, including Epizyme’s trials in patients with non-Hodgkin lymphoma and adult and pediatric patients with certain genetically defined solid tumors, as well as planned combination studies in patients with DLBCL and the planned study in patients with mesothelioma. In addition, discovery and preclinical research costs are expected to increase as the Company advances its wholly owned small molecule programs against five novel targets and continues the research efforts under its Celgene collaboration.

General and administrative (G&A) expenses were $5.8 million for the quarter ended March 31, 2016, compared to $5.2 million for the same period last year. The increase in G&A expense was largely due to higher professional services costs and personnel-related expenses associated with the expansion of Epizyme’s operations. Epizyme expects that G&A spend will increase in 2016 as compared to 2015 due to increases in staffing and infrastructure to support expanded clinical trial activities, increased research investment and other expanded operational activities, including increased intellectual property costs.

Net loss was $22.9 million for the quarter ended March 31, 2016, compared to a net loss of $61.3 million for the quarter ended March 31, 2015.

Cash and cash equivalents were $312.7 million as of March 31, 2016, compared with $208.3 million as of December 31, 2015. This increase in cash was driven by the Company’s January 2016 financing.
Financial guidance from Epizyme states that the Company believes its cash and cash equivalents as of March 31, 2016 will be sufficient to fund the Company’s planned operations through at least the end of 2017.

On May 9, 2016 Juno Therapeutics, Inc. (NASDAQ:JUNO), a biopharmaceutical company focused on re-engaging the body’s immune system to revolutionize the treatment of cancer, reported financial results and business highlights for the first quarter 2016 (Press release, Juno, MAY 9, 2016, View Source;p=RssLanding&cat=news&id=2166580 [SID:1234512138]).

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"In the first quarter, we continued to advance our CD19-directed portfolio – enrolling multiple trials, commencing manufacturing of clinical trial material from our Juno-operated facility, and securing Celgene’s opt-in to product candidates in our CD19 program, which will accelerate our pace outside of North America. Also, we recently reported encouraging early data for product candidates against two other targets, CD22 and WT-1, as our pipeline and research continue to progress beyond CD19," said Hans Bishop, Juno’s President and Chief Executive Officer. "Juno’s capabilities are growing, and we look forward to sharing more data with you later this quarter at ASCO (Free ASCO Whitepaper) and throughout 2016."

First Quarter 2016 and Recent Corporate Highlights
Clinical Progress:
CD19 Portfolio – An investigational new drug (IND) amendment cleared the FDA, allowing Juno to begin clinical manufacturing of JCAR015 for the Phase II ROCKET trial out of a Juno-operated manufacturing facility in Bothell, Washington. Juno plans to use this facility to manufacture product for Juno’s first commercial launches. Juno also announced the initiation of enrollment for its trial combining JCAR014 and MedImmune’s anti-PDL-1 immune checkpoint inhibitor, durvalumab.

JCAR018 – This CD22-directed, fully-human chimeric antigen receptor (CAR) T cell product candidate has the potential to treat or prevent CD19-negative relapses. JCAR018 reached two clinical milestones in a Phase I trial conducted at the National Cancer Institute (NCI) in pediatric and young adult relapsed or refractory (r/r) acute lymphoblastic leukemia (ALL) patients, which triggered payments to Opus Bio in the first quarter of 2016 totaling 603,364 shares of Juno common stock. Investigators presented data from the ongoing Phase I study in pediatric and young adult r/r ALL patients at the American Association for Clinical Research (AACR) (Free AACR Whitepaper) 2016, showing all three patients at dose level 2 (1 x 106 cells/kg) achieved a complete remission and complete molecular remission as measured by flow cytometry. These patients remain in complete remission with follow-up ranging from 3 to 6 months. Limited cytokine release syndrome (CRS) and no severe neurotoxicity was seen at dose level 2. Dose limiting toxicity was observed at higher doses, so dosing will continue at dose level 2 (1 x 106 cells/kg). CD22-directed CAR T treatment has the potential, when combined with CD19-directed CARs, to meaningfully increase the percentage of ALL patients that experience long-term remissions.
JTCR016 – This WT-1-directed, T cell receptor (TCR) cell product candidate is currently being studied in acute myeloid leukemia (AML), refractory mesothelioma, and non-small cell lung cancer. In the first three solid organ tumor patients treated to date, all with mesothelioma, preliminary data presented at AACR (Free AACR Whitepaper) 2016 showed one patient with an ongoing partial response to the WT-1 TCR and one with stable disease. The clinical activity appeared to correlate with the pharmacokinetics of the engineered T cells, as the patient with the partial response had the best T cell expansion and persistence. JTCR016 was generally well-tolerated in these three refractory mesothelioma patients, with no evidence of severe CRS or severe neurotoxicity.

Corporate News:
Juno announced that Celgene exercised its option to develop and commercialize product candidates from Juno’s CD19 program outside North America and China. With the exercise of this option, Celgene paid Juno a fee of $50.0 million and the companies will now share global development expenses for product candidates in the CD19 program. Celgene has commercial rights outside of North America and China, and will pay Juno a royalty at a percentage in the mid-teens on any future net sales in Celgene’s territories of therapeutic products developed through the CD19 program. Juno retains commercialization rights in North America and China.
Juno acquired AbVitro, a leading next-generation single cell sequencing platform company that will augment Juno’s capabilities to create best-in-class engineered T cells against a broad array of cancer targets, including significantly improving the speed of generating TCR binders, while also enabling comprehensive profiling of functional immune repertoires with cancer tissues. Juno and Celgene have agreed in principle to enter an agreement to license Celgene a subset of the acquired technology and grant Celgene options to certain related potential product rights emanating from the acquired technology.
Juno announced, along with WuXi AppTec, the formation of a new company, JW Biotechnology (Shanghai) Co., Ltd., with a mission to develop novel cell-based immunotherapies for patients with hematologic and solid organ cancers in China. The new company will leverage Juno’s world-class CAR and TCR technologies and WuXi AppTec’s research and development and manufacturing platform and local expertise.
Juno announced the creation of a new, best-in-class clinical trials unit dedicated to immuno-oncology, in collaboration with the University of Washington, the Seattle Cancer Care Alliance, and the Fred Hutchinson Cancer Research Center (FHCRC). The clinical trials unit has been established to accelerate the clinical care of patients and the generation of translational medicine insights with cutting-edge immuno-oncology therapeutic candidates.
Juno reported that Celgene exercised its annual "top-up" right, purchasing 1,137,593 shares of Juno common stock at a price of $41.32 per share for an aggregate cash purchase price of $47.0 million.
First Quarter 2016 Financial Results
Cash Position: Cash, cash equivalents, and marketable securities as of March 31, 2016 were $1.13 billion compared to $1.22 billion as of December 31, 2015. The decrease of $91.0 million is due to cash used in connection with the acquisition of AbVitro and cash used to fund operations, offset by cash proceeds of $47.0 million from Celgene for the purchase of 1,137,593 shares of Juno’s common stock. Celgene’s CD19 opt-in payment of $50.0 million occurred after the end of the first quarter.
Cash Burn: Excluding cash inflows and outflows from business development activities, cash burn in the first quarter of 2016 was $61.0 million including $4.0 million of capital expenditures, compared to $26.4 million in the first quarter of 2015. The increase of $34.6 million was primarily driven by cash outflows in connection with the overall growth of the business.
Revenue: Revenue for the three months ended March 31, 2016 was $9.8 million and included milestone revenue of $5.8 million received from Novartis and revenue recognized in connection with the Celgene collaboration agreement of $3.8 million.
R&D Expenses: Research and development expenses in the first quarter of 2016, inclusive of non-cash expenses and computed in accordance with GAAP, were $73.7 million compared to $57.8 million in the first quarter of 2015. The increase of $15.9 million was due to a $23.2 million non-cash expense associated with milestones achieved under its license agreement with Opus Bio related to Juno’s JCAR018 product candidate, which were paid through the issuance of 603,364 shares of Juno’s common stock, a $5.0 million payment to St. Jude in connection with the milestone achieved by Juno’s sublicensee Novartis, as well as increased costs incurred to execute Juno’s clinical development strategy, manufacture its product candidates, and expand its overall research and development capabilities.

For the three months ended March 31, 2016, Juno recorded a gain of $6.6 million related to the success payment liability and an expense of $38.9 million for the same period in 2015. The gain recorded in the first quarter of 2016 was primarily due to a decline in Juno’s stock price at March 31, 2016 compared to December 31, 2015.
Non-GAAP R&D Expenses: Non-GAAP research and development expenses for the three months ended March 31, 2016 and 2015 were $80.1 million and $17.0 million, respectively. Non-GAAP research and development expenses for the first quarter of 2016 include $9.1 million of stock-based compensation expense, $2.2 million of which was paid in connection with the acquisition of AbVitro, as well as the milestone payments described above. Non-GAAP research and development expenses for the first quarter of 2015 include $1.7 million of non-cash stock-based compensation expense. Non-GAAP research and development expenses for the first quarter of 2016 exclude the following:
A gain of $6.6 million associated with the change in the estimated value and elapsed service period for Juno’s potential success payment liabilities to FHCRC and Memorial Sloan Kettering Cancer Center (MSK).
Non-cash stock-based compensation expense of $1.2 million related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.
A gain of $1.0 million associated with the change in estimated fair value of the contingent consideration recorded in connection with the Stage and X-Body acquisitions.
Non-GAAP research and development expenses for the first quarter of 2015 exclude the following:
An expense of $38.9 million associated with the change in the estimated value and elapsed service period for Juno’s potential success payment liabilities to FHCRC and MSK.
Non-cash stock-based compensation expense of $1.9 million related to a 2013 restricted stock award to a co-founding director that became a consultant upon his departure from Juno’s board of directors in 2014.
G&A Expenses: General and administrative expenses on a GAAP basis for the first quarter of 2016 were $16.0 million compared to $7.4 million for the first quarter of 2015. The increase of $8.6 million was primarily due to increased personnel expenses, including non-cash stock-based compensation expense, an increase in consulting fees including costs related to commercial readiness, and other expenses related to the growth of the business. General and administrative expenses include $4.9 million and $1.8 million of non-cash stock-based compensation expense for the three months ended March 31, 2016 and 2015, respectively.
GAAP Net Loss: Net loss for the three months ended March 31, 2016 was $71.1 million, or $0.72 per share, compared to $65.0 million, or $0.79 per share, for the same period in 2015.
Non-GAAP Net Loss: Non-GAAP net loss, which incorporates the non-GAAP R&D expense, for the three months ended March 31, 2016 was $77.5 million, or $0.78 per share, compared to $24.2 million, or $0.30 per share, for the same period in 2015.
A reconciliation of GAAP net loss to non-GAAP net loss is presented below under "Non-GAAP Financial Measures."
2016 Financial Guidance
Juno expects 2016 cash burn, excluding cash inflows or outflows from business development activities, to be between $220 million and $250 million.
Operating burn estimated to be between $170 million and $195 million.
Capital expenditures estimated to be between $40 million and $55 million, the vast majority of which are related to one-time infrastructure build-outs.