On November 2, 2017 INSYS Therapeutics, Inc. (NASDAQ:INSY) (“INSYS” or “the company”) reported financial results for its third quarter ended Sept. 30, 2017 (Press release, Insys Therapeutics, NOV 2, 2017, View Source [SID1234521480]).

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OVERALL HIGHLIGHTS

Gross revenue was $48.9 million, resulting in net revenue of $30.7 million
Net revenue was unfavorably impacted by approximately $5 million due to product returns
Total R&D investment was $19.6 million
Accrued minimum liability of $150.0 million paid over five years in connection with ongoing Department of Justice (DOJ) investigation
Net loss totaled $166.3 million, which included DOJ accrual, or ($2.30) per basic and diluted share
Launched SYNDROS (dronabinol) oral solution, first and only FDA-approved liquid dronabinol, generating $0.7M of revenue in first two months
Filed New Drug Application (NDA) for novel formulation of buprenorphine as sublingual spray for management of moderate-to-severe acute pain
Completed pharmacokinetics (PK) study of proprietary intranasal naloxone spray formulation for treatment of opioid overdose
“Earlier this year, we took meaningful, strategic steps to restore trust with our key stakeholders, including patients, clinicians, regulators, and investors,” said Saeed Motahari, president and chief executive officer of INSYS Therapeutics. “The past few months have only strengthened our commitment to move forward and continue our efforts to address unmet medical needs. In the third quarter, our team soundly executed against the organization’s strategic initiatives and we made strong progress to transform and diversify our business over the long term. This included further work to stabilize our SUBSYS product through the signing of additional managed care contracts. These wins should help solidify the product’s base revenue beginning in 2018. We also continued to realize the benefits of our strong pipeline as we brought our second commercial product to market and delivered on several of our R&D commitments, including the early filing of our NDA for buprenorphine as a sublingual spray. I am pleased with our progress to date across the business and recognize there is still more to be done.”

Mr. Motahari concluded, “As part of our effort to broaden the company’s capabilities, we’ve expanded and upgraded our fully-integrated manufacturing facility in Round Rock, Texas over the last year. The expansion component of the project is complete, and the related upgrade will be finished by the end of the year. This facility will be a distinct competitive advantage for us when it is complete, as we will be one of the only companies in the United States that can manufacture synthetic cannabinoids ranging from clinical to commercial scale. Further, it will allow us to continue to pursue partnership opportunities with supportive institutions, including those in academia and the scientific community, all of whom are currently looking to further the science of cannabinoids.”

Financial & Operating Highlights

Net revenue for the third quarter of 2017 was $30.7 million, compared to $57.8 million for the third quarter of 2016. The results reflect a decline in SUBSYS prescription volumes due to ongoing softness in overall demand in the TIRF category, and was partially offset by $0.7 million in revenues from the recently launched SYNDROS product.
Gross margin was 75.6% for the third quarter of 2017, compared to 91.9% in the same period of 2016. Gross margin was negatively impacted by product returns and inventory expiration.
Sales and marketing investment was $12.8 million during the third quarter of 2017, compared to $16.7 million for the third quarter of 2016. The reduction was driven by cost management in light of lower revenue.
Research and development investment increased to $19.6 million for the third quarter of 2017, compared to $16.5 million for the same period in 2016, reflecting the company’s commitment to its robust new product pipeline including filing fees associated with our NDA for buprenorphine.
General and administrative expense decreased to $15.7 million for the third quarter of 2017 from $17.7 million for the third quarter of 2016, driven by a stock compensation charge taken in the third quarter of 2016, and a reduction in outside legal expenses.
Income tax benefit was $9.0 million for the third quarter of 2017, compared to a benefit of $0.4 million during the third quarter of 2016.
The company accrued an aggregate reserve of $150.0 million in connection with the DOJ investigation.
Net loss for the third quarter of 2017 was $166.3 million, or ($2.30) per basic and diluted share, compared to net income of $2.9 million, or $0.04 per basic and diluted share, for the third quarter of 2016.
Adjusted EBITDA loss for the third quarter of 2017 was $18.4 million, compared to Adjusted EBITDA of $12.2 million in the prior-year quarter. The reconciliation of net income to Adjusted EBITDA is included at the end of this news release.
The company had $177.2 million in cash, cash equivalents, and short-term and long-term investments; no debt; and $106.0 million in stockholders’ equity as of Sept. 30, 2017.
Webcast Information
A conference call is scheduled for 8:30 a.m. Eastern Standard Time on Nov. 2, 2017, to discuss the financial and operational results for the third quarter of fiscal year 2017. Investors, analysts and members of the media interested in listening to the live presentation are encouraged to join a webcast of the call available through the INVESTORS section of the company’s website at View Source Interested parties may also participate in the call by dialing 844-263-8304 (from inside the U.S.) or 213-358-0958 (from outside the U.S.). A replay of the conference call will be available a few hours after the event through the website’s INVESTORS section, under the NEWS & EVENTS tab for “Presentations.”

On November 2, 2017 Cerus Corporation (NASDAQ:CERS) reported financial results for the third quarter ended September 30, 2017 (Press release, Cerus, NOV 2, 2017, View Source [SID1234521512]).

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Recent developments include:

Announced national German reimbursement for pathogen-inactivated platelets starting January 1, 2018. Germany is the largest platelet market in Europe with approximately 575,000 units manufactured each year.
Entered into a new supply agreement for the INTERCEPT Blood System for platelets with Centro de Transfusión de la Comunidad (CTCM), one of the largest blood banks in Spain.
Entered into new Italian distribution agreement for INTERCEPT with Kedrion, a global manufacturer and distributor of plasma derivatives, headquartered in Italy.
Announced first Biologics License Application (BLA) approval for U.S. blood center customer.
“I am encouraged by the commercial progress we are making as an organization. The highlight of the third quarter was clearly the rapid deployment of illuminators by the Établissement Français du Sang (EFS), the French National Blood Service,” said William ‘Obi’ Greenman, Cerus’ president and chief executive officer. “With Illuminators now deployed at all French regional blood centers, it gives us greater conviction on our ability to potentially drive revenue growth in the coming quarters. Coupled with the recent national German reimbursement for pathogen-inactivated platelets, we believe we are gaining significant momentum in Europe’s two largest markets for platelets. In addition, with the continued market adoption of INTERCEPT in the U.S., we believe that we are well positioned to grow the business globally. We are also tightening our 2017 product revenue guidance to $41 million to $43 million compared to our previous guidance range of $40 million to $46 million.”

Product Revenue

Product revenue for the third quarter of 2017 was $10.8 million, up 6% compared to $10.2 million recognized during the same period in 2016. The increase in reported product revenue for the quarter was driven primarily by a 12% increase in worldwide demand for platelet kits and an increase in illuminator sales, which were partially offset by a decline in plasma kit sales.

Product revenue for the first nine months of 2017 was $27.3 million, up 1% compared to the first nine months of 2016 of $27.1 million. In addition to an increase in illuminator sales, year-to-date demand for platelet kits was up 15%. These increases were offset by declines in plasma kit sales.

Gross Margins

Gross margins on product revenue for the third quarter of 2017 were 50%, compared to 46% for the third quarter of 2016. Gross margins for the first nine months of 2017 were 51%, compared to 46% for the first nine months of 2016. Gross margins in the quarter benefitted from the increased demand for INTERCEPT platelet products which generate higher gross margins than plasma products, and favorable Euro foreign exchange rates quarter-over-quarter and year-over-year.

Operating Expenses

Total operating expenses for the third quarter of 2017 were $20.1 million, compared to $19.2 million for the third quarter of 2016. Total operating expenses for the first nine months of 2017 were $66.0 million, compared to $59.0 million for the first nine months of 2016. Selling, general and administrative expenses were flat in the third quarter compared to the comparable period in the prior year. Selling, general, and administrative expenses increased for nine months ended September 30, 2017, over the comparable period in 2016, primarily driven by increased commercial activity in the U.S. Research and development expenses increased in both periods primarily due to clinical development activities of our INTERCEPT red blood cell system, and in particular, activities related to our BARDA contract.

Operating and Net Loss

Operating losses during the third quarter of 2017 were $12.4 million, compared to $14.3 million for the third quarter of 2016, and $46.7 million compared to $46.3 million for the nine months ended September 30, 2017 and September 30, 2016, respectively.

Net loss for the third quarter of 2017 was $13.4 million, or $0.12 per diluted share, compared to a net loss of $14.4 million, or $0.14 per diluted share, for the third quarter of 2016. Net loss for the first nine months of 2017 was $49.1 million, or $0.46 per diluted share, compared to a net loss of $49.4 million, or $0.49 per diluted share, for the same period of 2016.

Net loss for the nine months ended September 30, 2017 was positively impacted by the gain of approximately $3.5 million, due to the sale of the Company’s marketable equity investment in Aduro Biotech, Inc (“Aduro”). This gain was offset by non-cash income tax expense of $3.9 million recorded in the nine months ended September 30, 2017, due to the sale of the Company’s shares of Aduro.

Cash, Cash Equivalents and Investments

At September 30, 2017, the Company had cash, cash equivalents and short-term investments of $59.6 million compared to $71.6 million at December 31, 2016.

QUARTERLY CONFERENCE CALL

The Company will host a conference call and webcast at 4:15 p.m. Eastern time today to discuss its financial results and provide a general business overview and outlook. To access the live webcast, please visit the Investor Relations page of the Cerus website at View Source Alternatively, you may access the live conference call by dialing 866-235-9006 (U.S.) or 631-291-4549 (international).

A replay will be available on the company’s website, or by dialing 855-859-2056 (U.S.) or 404-537-3406 (international) and entering conference ID number 82994688. The replay will be available approximately three hours after the call through November 16, 2017.

Sunesis has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission (Filing, 10-Q, Sunesis, 2017, NOV 2, 2017, View Source [SID1234521501]).

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Iovance Biotherapeutics has filed a 10-Q – Quarterly report [Sections 13 or 15(d)] with the U.S. Securities and Exchange Commission .

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On November 2, 2017 Genocea Biosciences, Inc. (NASDAQ:GNCA), a biopharmaceutical company developing neoantigen cancer vaccines, reported financial results for the third quarter of 2017 and announced upcoming data presentations at a leading immuno-oncology conference (Press release, Genocea Biosciences, NOV 2, 2017, View Source [SID1234521478]).

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“We believe our proprietary ATLASTM technology sets us apart among developers of neoantigen cancer vaccines, as it offers a potential solution to one of the most significant challenges in the field – namely, identifying true neoantigens for those vaccines from up to thousands of potential candidates,” said Chip Clark, president and chief executive officer of Genocea. “ATLAS uses a patient’s own T cells to identify, rather than predict, which of the many personal mutations found in cancerous tumors are true neoantigens, which we believe will enable us to develop more immunogenic and efficacious cancer vaccines. Our upcoming data presentations at the SITC (Free SITC Whitepaper) Annual Meeting continue to support the potential of ATLAS in neoantigen identification for personalized vaccines, including our lead program, GEN-009, for which we expect to file an IND application early next year.”

GEN-009 Progress
GEN-009 is a personalized vaccine consisting of adjuvanted synthetic long peptides of true neoantigens identified by ATLAS.

The company expects to file an Investigational New Drug (IND) application in early 2018.
Genocea plans to initiate a Phase 1 clinical trial in patients with a range of tumor types in the first half of 2018, and expects to report initial immunogenicity data in the first half of 2019.
Upcoming Scientific Presentations
Genocea announced today that it will present three posters at the upcoming Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 32nd Annual Meeting taking place November 8 to 12, 2017 at the Gaylord National Hotel & Convention Center in National Harbor, Maryland.

Poster #430 entitled “Neoantigen identification using ATLAS across multiple tumor types highlights limitations of prediction algorithms,” will be presented during the session on Personalized Vaccines and Technologies/Personalized Medicine on Saturday, November 11, 2017,
Poster #8 entitled “T cell response profiling in colorectal carcinoma patients reveals an enrichment in responses to specific tumor-associated antigens,” and
Poster #28 entitled “Profiling of T cell responses to tumor-associated antigens in lung cancer patients treated with checkpoint inhibitors,” will both be presented during the session on Biomarkers and Immune Monitoring on Saturday, November 11, 2017.
Corporate Update
Following its announced restructuring at the end of the third quarter, Genocea continues to explore, alongside its advisors, strategic alternatives for GEN-003, the company’s Phase 3-ready investigational immunotherapy to treat the large patient population infected with genital herpes, many of whom are dissatisfied with their current treatment options.

Financial Guidance
Genocea expects that its existing cash and cash equivalents are sufficient to support its operating expenses and capital expenditure requirements into the middle of 2018.

Third-Quarter 2017 Financial Results

Cash Position: Cash and cash equivalents as of September 30, 2017 were $22.0 million compared to $35.2 million as of June 30, 2017.
Restructuring: A corporate restructuring was implemented following the Company’s strategic shift to immuno-oncology, resulting in a charge of approximately $1.1 million for employee severance, benefits, and related costs. These amounts will be paid in the fourth quarter of 2017. In addition, Genocea incurred approximately $0.5 million of expense due to contract termination clauses that the Company anticipates will result in future cash payments and approximately $1.0 million in non-cash asset impairment charges.
Research and Development (R&D) Expenses: R&D expenses for the quarter ended September 30, 2017 increased $1.3 million, to $10.2 million from the same period in 2016. The increase was primarily driven by higher external manufacturing-related expenses and increases in compensation to support both the clinical drug supply and clinical trial planning activities in support of the previously planned GEN-003 Phase 3 program, partially offset by reduced clinical costs, due to timing of activities in support of clinical trials. Spending increases on Genocea’s immuno-oncology and cancer vaccine programs were driven primarily by increased manufacturing and compensation, consulting and professional services in anticipation of Genocea’s expected filing of an IND application for GEN-009 in the first quarter of 2018. Increased spending on these programs was offset by lower costs on infectious disease programs previously discontinued in 2016.
General and Administrative (G&A) Expenses: G&A expenses for the third quarter of 2017 were $3.8 million, compared to $3.6 million for the same period in 2016, reflecting marginal increases in consulting and professional services offset by reductions in depreciation expense, with all other expenditures across various activities remaining consistent with the same quarter in the prior year.
Net Loss: Net loss was $16.9 million for the quarter ended September 30, 2017, compared to a net loss of $12.8 million for the same period in 2016.
Conference Call
Genocea will host a conference call and webcast today at 9:00 a.m. ET. The conference call may be accessed by dialing (844) 826-0619 for domestic participants and (315) 625-6883 for international callers and referencing the conference ID number 95267931. A live webcast of the conference call will be available online from the investor relations section of the Company’s website at View Source A webcast replay of the conference call will be available on the Genocea website beginning approximately two hours after the event, and will be archived for 30 days.