On March 11, 2016 Progenics Pharmaceuticals, Inc. (Nasdaq:PGNX) reported financial and business results for the fourth quarter and full-year 2015 (Filing, Q4/Annual, Progenics Pharmaceuticals, 2015, MAR 11, 2016, View Source [SID:1234509494]).

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Key Business Highlights

RELISTOR, treatment for opioid-induced constipation (partnered with Valeant Pharmaceuticals, Inc., ("Valeant"))

· RELISTOR Net Sales for the Fourth Quarter 2015 Total $23.0 Million. Full year 2015 net sales totaled $43.8 million (as reported to us by our partner, Valeant).

· Oral RELISTOR Remains On-track for April 19, 2016 PDUFA. Progenics anticipates an FDA decision April 19, 2016 on the NDA submission for oral RELISTOR. If approved, Progenics would be entitled to a $50 million milestone payment and subsequent sales royalties and commercial milestones from Valeant.

· Subcutaneous RELISTOR Approved in Europe for All Opioid-Induced Constipation. In June 2015 the European Commission approved RELISTOR (methylnaltrexone bromide) Subcutaneous Injection for the treatment of opioid-induced constipation (OIC) when response to laxative therapy has not been sufficient in adult patients, aged 18 years and older.

Progenics Announces Fourth Quarter and Full-Year 2015 Financial Results

AZEDRA, Ultra-orphan radiotherapeutic candidate

· AZEDRA Ultra-Orphan Cancer Therapeutic Receives FDA Breakthrough Designation. In July 2015 the U.S. Food and Drug Administration (FDA) designated AZEDRA as a Breakthrough Therapy for the treatment of patients with iobenguane-avid metastatic or recurrent pheochromocytoma and paraganglioma.

· AZEDRA Completes Enrollment of 68 Patients in Pivotal Trial. In December 2015, Progenics achieved target enrollment in its pivotal Phase 2b trial of AZEDRA. A total of 68 patients have been enrolled.

· AZEDRA Topline Results Expected Between December 2016 and March 2017. In late 2016 or early 2017, Progenics expects to report top-line results from its ongoing pivotal Phase 2b study of AZEDRA. If positive, the Company expects to submit an NDA to the FDA in 1H 2017.

PSMA-Targeted Prostate Cancer Pipeline

· Exclusive Worldwide License Signed With Johns Hopkins University for PyL, PSMA-Targeted PET/CT Imaging Agent. In August 2015, the Company announced an exclusive worldwide licensing agreement with the Johns Hopkins University for imaging agent PyL.

· Pivotal Phase 3 Study Underway of 1404, PSMA-Targeted SPECT/CT Imaging Agent. Progenics has commenced a pivotal Phase 3 study of PSMA-targeted imaging agent 1404 for prostate cancer. The Phase 3 clinical trial is expected to enroll approximately 450 patients with newly diagnosed low-grade prostate cancer patients who are candidates for active surveillance, but nonetheless are planning to undergo radical prostatectomy. During the second half of 2016, Progenics expects to perform an interim analysis of the Phase 3 clinical trial of its PSMA-targeted imaging agent, 1404, to assess futility and evaluate the need for a sample size re-estimation.

· Acquired EXINI Diagnostics AB, a Swedish Developer of Artificial Intelligence-Based Image Analysis Tools. In November 2015, Progenics acquired EXINI Diagnostics AB, a Swedish developer of artificial intelligence-based analytical tools to improve the management of prostate cancer. The acquisition enhances the Company’s proprietary prostate cancer imaging programs, 1404 and PyL.

· Announced Data Highlighting EXINI’s Lead Artificial Intelligence-Based Analytical Tool, the Bone Scan Index (BSI), was Published in the January 2016 Issue of the Journal of Nuclear Medicine. In the paper, researchers from Memorial Sloan Kettering Cancer Center in New York and Lund University in Sweden reported that BSI overcomes a number of key limitations of manual image assessment by human readers and can provide an accurate, precise and reproducible platform for quantifying changes in bone scans of prostate cancer patients.

· Phase 1 Study of 1095, PSMA-Targeted Therapeutic for Metastatic Prostate Cancer, Planned at Memorial Sloan Kettering. Initiation of a Phase 1 study of 1095 planned for 2H 2016 at Memorial Sloan Kettering Cancer Center.

"Over the past year, we have achieved significant progress across all three areas of our business – our partnered OIC therapy, RELISTOR, our ultra-orphan radiotherapeutic candidate, AZEDRA, and our prostate cancer pipeline," said Mark Baker, CEO of Progenics. "I expect 2016 to be a transformational year for our Company with a number of important milestones. We begin the year in a strong financial position, and Oral RELISTOR, if approved, will trigger a milestone payment and sales royalties that we can use to further advance AZEDRA toward commercialization while also developing our pipeline of therapeutic and imaging agents that we believe have the potential to change how prostate cancer is diagnosed and treated."
Page 3
Progenics Announces Fourth Quarter and Full-Year 2015 Financial Results
Fourth Quarter and Full-Year 2015 Financial Results
Net loss attributable to Progenics for the quarter was $7.1 million, or $0.10 per basic and diluted share, compared to a net loss of $12.2 million, or $0.18 per basic and diluted share in the 2014 period. Net loss attributable to Progenics for the full-year 2015 was $39.1 million, or $0.56 per basic and diluted share, compared to net income of $4.4 million, or $0.06 per basic and diluted share for the full-year 2014.

Progenics ended the year with cash and cash equivalents of $74.1 million, reflecting decreases of $16.3 million in the quarter and $45.2 million from 2014 year-end, primarily resulting from $40.1 million used in operating activities and $6.5 million used to acquire a majority interest in EXINI Diagnostics AB.

Total revenue for the fourth quarter increased $5.7 million over the fourth quarter of 2014, due primarily to $4.1 million higher RELISTOR royalty income and recognition of $1.5 million milestone payment from CytoDyn for dosing of the first patient in Phase 3 clinical trial for PRO 140. Current full-year revenues were $8.7 million, down from $44.4 million in the prior year, reflecting a decrease in collaboration revenue of $39.2 million. This resulted primarily from the recognition of a $40.0 million development milestone in the third quarter of 2014, for the U.S. marketing approval for subcutaneous RELISTOR in non-cancer pain patients, partially offset by an increase in RELISTOR royalty revenue to $6.6 million in 2015 from $3.1 million in 2014.

Fourth quarter research and development expenses increased by $1.7 million compared to the corresponding period in 2014, primarily due to higher AZEDRA and 1404 clinical trial expenses, partially offset by lower PSMA ADC-related expenses. Full-year research and development expenses decreased by $0.4 million compared to the corresponding period in 2014, primarily due to lower clinical trial expenses for PSMA ADC and lower share-based compensation expense, partially offset by higher AZEDRA-related expenses.

The fourth quarter 2015 general and administrative expenses decreased by $0.2 million compared to the corresponding period in 2014, primarily due to lower legal expenses. Full-year 2015 general and administrative expenses increased by $2.7 million compared to the prior year, primarily due to a legal reserve and expenses related to an action brought by a former employee and higher compensation expenses. Non-cash items for the quarter and year resulted from increased estimates for fair value of contingent consideration liability related to the 2013 acquisition of Molecular Insight.

On March 11, 2016 GenSpera, Inc. (OTC/QB: GNSZ), a biotech company developing a novel prodrug therapeutic for the treatment of cancer, reported that the Company’s board of directors has engaged FLG Partners, LLC and its partner Chris Lowe to provide strategic advice to further complement the Company’s efforts to strengthen its corporate and clinical development (Press release, GenSpera, MAR 11, 2016, View Source [SID:1234509501]). This includes aligning the Company’s long term-goals to optimize the clinical and regulatory development of mipsagargin, implement cost-efficient processes and advise on business development and funding initiatives.

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"We are delighted to engage the services of this highly regarded consultancy, which has a reputation for providing sound strategic and operational counsel to companies such as GenSpera. In particular, we will be calling upon Chris Lowe’s substantial expertise and proven abilities in assisting clinical-stage companies to develop well-conceived corporate and financial strategies. The full strategic review is designed with a view of enhancing shareholder value," commented the Board of Directors of GenSpera.

FLG Partners is a leading CFO consulting and services firm based in Silicon Valley and its partners have more than 500 years of collective CEO and CFO experience. Mr. Lowe is a partner at the firm and has more than 15 years of senior management experience that includes executive positions in publicly traded life sciences companies.

"It is an exciting time at GenSpera as we evaluate mipsagargin in our ongoing Phase 2 trial in patients with glioblastoma and finalize preparations to commence a Phase 2 trial in patients with prostate cancer," said Craig Dionne, Ph.D., GenSpera’s CEO. "The complementary operational and financial expertise of FLG partners and Chris Lowe will help guide us through this critical stage in our corporate development and support us in reaching our goal of commercializing an important new therapeutic for patients with cancer."

"GenSpera is ripe with opportunity and I look forward to using my experience as well as the shared expertise of my colleagues at FLG to develop a comprehensive plan that advances GenSpera’s clinical programs and puts forth financial options to provide a highly productive path forward for the Company and its shareholders," said Mr. Lowe.

On March 11, 2016 Oncolytics Biotech Inc. (TSX: ONC) (OTCQX: ONCYF) (FRA: ONY) ("Oncolytics" or the "Company") reported its financial results and operational highlights for the year ended December 31, 2015 (Filing, Annual, Oncolytics Biotech, 2015, MAR 11, 2016, View Source [SID:1234509758]).

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"In 2015 we continued to advance our clinical program, reporting survival data from single arm Phase 2 studies in non-small cell lung and pancreatic cancers, as well as early data from a pilot study in multiple myeloma," said Dr. Brad Thompson, President and CEO of Oncolytics. "During the year we began combination therapy studies with REOLYSIN and agents that modulate the immune system. Enrollment in a GM-CSF and REOLYSIN combination therapy study in pediatric patients with gliomas began, and we recently announced our first study looking at REOLYSIN in combination with an immunotherapeutic checkpoint inhibitor in pancreatic cancer."

Selected Highlights

Since January 1, 2015, selected highlights announced by the Company include:

Clinical Program

· Treatment of the first patients in a Phase Ib study of pembrolizumab (KEYTRUDA) in combination with REOLYSIN and chemotherapy in patients with advanced pancreatic adenocarcinoma, the Company’s first trial examining REOLYSIN in combination with a checkpoint inhibitor;

· Start of enrollment in a Phase Ib study of REOLYSIN combined with standard doses of bortezomib and dexamethasone in patients with relapsed or refractory multiple myeloma (REO 019);

· A poster presentation at the 57th American Society of Hematology (ASH) (Free ASH Whitepaper) titled "REOLYSIN Combined with Carfilzomib for Treatment of Relapsed Multiple Myeloma Patients," which disclosed updated findings (originally presented at the 15th International Myeloma Workshop) from a pilot study (NCI-9603) in patients with relapsed or refractory multiple myeloma treated using the combination of carfilzomib and REOLYSIN. These findings included that all seven patients treated at the full clinical dose had a clinical response, as well as significant increases in the production of caspase-3 (p=0.005) and upregulation of PD-L1 (p=0.005);

· An oral presentation at the International Association for the Study of Lung Cancer (IASLC) 16th World Conference on Lung Cancer titled "Oncolytic Reovirus in Combination with Paclitaxel/Carboplatin in NSCLC Patients with Ras Activated Malignancies, Long Term Results," covering updated results, including one- and two-year survival data (57% and 30%, respectively), from the Company’s REO 016 Phase 2 study in Non-Small Cell Lung Cancer (NSCLC);

· Presentation of final data from a single arm clinical study examining the use of REOLYSIN in combination with gemcitabine in patients with advanced pancreatic cancer (REO 017), which showed an increase in median overall survival, as well as an approximate two-fold increase in one-year survival rates, and a five-fold increase in two-year survival rates when compared to gemcitabine therapy alone as seen in historical data;

· Completion of enrollment in three randomized Phase 2 studies sponsored and conducted by the NCIC Clinical Trials Group; IND 211 is a study of REOLYSIN in combination with chemotherapy in patients with previously treated advanced or metastatic non-small cell lung cancer; IND 210 is a study of REOLYSIN in patients with advanced or metastatic colorectal cancer; and IND 209 is a study of REOLYSIN in combination with chemotherapy in patients with recurrent or metastatic castration resistant prostate cancer;

· An update on the planned registration program for REOLYSIN including an initial focus on two indications: the neoadjuvant treatment of muscle-invasive bladder cancer and the treatment of glioblastoma;

· Activation of an Investigational New Drug Application containing the protocol titled "MC1472: Phase 1 Study of Replication Competent Reovirus (REOLYSIN) in Combination with GM-CSF in Pediatric Patients with Relapsed or Refractory Brain Tumors";

· Presentation of data showing up-regulation of PD-1 and PD-L1 from a single arm clinical study examining the use of REOLYSIN in patients with primary glioblastomas or brain metastases (REO 013b) at the Royal Society of Medicine’s Immuno-oncology: Using the Body’s Own Weapons Conference, held in London, UK;
Regulatory

· Granting of Orphan Drug Designation from the U.S. Food and Drug Administration (FDA) for REOLYSIN in the treatment of pancreatic, gastric, ovarian, primary peritoneal, and fallopian tube cancers, as well as malignant gliomas;

· Granting of Orphan Drug Designation by the European Medicines Agency for REOLYSIN in the treatment of ovarian and pancreatic cancers;
Basic Research

· Presentation of preclinical data at the 9th International Conference on Oncolytic Virus Therapeutics in Boston, MA, including findings around REOLYSIN’s mechanism of action and its potential in new indications including chronic lymphocytic leukemia;

· Presentation of clinical and preclinical data at the 2015 Immune Checkpoint Inhibitors Meeting in Boston, MA, including content showing the combination of REOLYSIN, GM-CSF, anti-PD-1 and anti-CTLA-4 improved survival in immune competent mice versus REOLYSIN and GM-CSF alone, and REOLYSIN and GM-CSF plus either one of the checkpoint inhibitors alone;

· A series of presentations made by the Company’s research collaborators at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting held in Philadelphia, PA covering preclinical research in a range of indications, with a variety of treatment combinations including REOLYSIN;
Financial

· At December 31, 2015 the Company reported $26.1 million in cash, cash equivalents and short-term investments. At March 10, 2016, the Company had approximately $23.6 million in cash, cash equivalents and short-term investments, which is expected to provide sufficient funds to support several small early-stage immunotherapy combination studies as well as both a run-in and a registration study in muscle-invasive bladder cancer; and

· Subsequent to year-end, entry into an "at-the-market" equity distribution agreement with Canaccord Genuity Corp. permitting Oncolytics at its sole discretion, from time to time and until March 16, 2018, to sell common shares having an aggregate offering value of up to $4.6 million.

ONCOLYTICS BIOTECH INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at December 31, 2015
$ 2014
$
Assets
Current assets
Cash and cash equivalents 24,016,275 14,152,825
Short-term investments 2,060,977 2,031,685
Accounts receivable 340,059 191,751
Prepaid expenses 506,669 291,553
Total current assets 26,923,980 16,667,814

Non-current assets
Property and equipment 459,818 525,376
Total non-current assets 459,818 525,376

Total assets 27,383,798 17,193,190

Liabilities And Shareholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities 2,709,492 3,373,997
Total current liabilities 2,709,492 3,373,997

Shareholders’ equity
Share capital
Authorized: unlimited
Issued:
December 31, 2015 – 118,151,622
December 31, 2014 – 93,512,494 261,324,692 237,657,056
Contributed surplus 26,277,966 25,848,429
Accumulated other comprehensive income 760,978 280,043
Accumulated deficit (263,689,330) (249,966,335)
Total shareholders’ equity 24,674,306 13,819,193
Total liabilities and equity 27,383,798 17,193,190

ONCOLYTICS BIOTECH INC.
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

For the years ending December 31, 2015
$ 2014
$ 2013
$

Expenses
Research and development 8,601,864 13,824,252 18,506,064
Operating 5,315,837 4,998,694 5,392,660
Loss before the following (13,917,701) (18,822,946) (23,898,724)
Interest 197,859 210,390 371,485
Loss before income taxes (13,719,842) (18,612,556) (23,527,239)
Income tax (expense) recovery (3,153) (6,779) (5,408)
Net loss (13,722,995) (18,619,335) (23,532,647)
Other comprehensive income items that may be
reclassified to net loss
Translation adjustment 480,935 200,345 136,813

Net comprehensive loss (13,242,060) (18,418,990) (23,395,834)
Basic and diluted loss per common share (0.12) (0.21) (0.28)

Weighted average number of shares (basic and diluted) 112,613,845 87,869,149 83,530,981

ONCOLYTICS BIOTECH INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Share Capital
$ Warrants
$ Contributed
Surplus
$ Accumulated
Other
Comprehensive
Income
$ Accumulated
Deficit
$ Total
$
As at December 31, 2012 198,155,091 376,892 24,126,265 (57,115) (207,814,353) 14,786,780

Net loss and other comprehensive income — — — 136,813 (23,532,647) (23,395,834)
Issued, pursuant to a bought deal financing 30,218,796 — — — — 30,218,796
Exercise of stock options 238,677 — (59,437) — — 179,240
Share based compensation — — 424,384 — — 424,384
As at December 31, 2013 228,612,564 376,892 24,491,212 79,698 (231,347,000) 22,213,366

Net loss and other comprehensive income — — — 200,345 (18,619,335) (18,418,990)
Issued, pursuant to Share Purchase Agreement 7,830,409 — — — — 7,830,409
Issued, pursuant to "At the Market" Agreement 1,214,083 — — — — 1,214,083
Expired warrants — (376,892) 376,892 — — —
Share based compensation — — 980,325 — — 980,325
As at December 31, 2014 237,657,056 — 25,848,429 280,043 (249,966,335) 13,819,193

Net loss and other comprehensive income — — — 480,935 (13,722,995) (13,242,060)
Issued, pursuant to Share Purchase Agreement 4,305,396 — — — — 4,305,396
Issued, pursuant to "At the Market" Agreement 19,362,240 — — — — 19,362,240
Share based compensation — — 429,537 — — 429,537
As at December 31, 2015 261,324,692 — 26,277,966 760,978 (263,689,330) 24,674,306

ONCOLYTICS BIOTECH INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ending December 31, 2015
$ 2014
$ 2013
$

Operating Activities
Net loss for the year (13,722,995) (18,619,335) (23,532,647)
Amortization – property and equipment 180,411 163,501 131,623
Share based compensation 429,537 980,325 424,384
Unrealized foreign exchange (gain) loss (816,319) 242,542 (89,721)
Net change in non-cash working capital (1,105,464) (2,443,988) (1,374,172)
Cash used in operating activities (15,034,830) (19,676,955) (24,440,533)
Investing Activities
Acquisition of property and equipment (108,268) (152,750) (254,834)
Redemption (purchase) of short-term investments (29,292) (30,041) (32,416)
Cash used in investing activities (137,560) (182,791) (287,250)

Financing Activities
Proceeds from exercise of stock options and warrants — — 179,240
Proceeds from Share Purchase Agreement 4,305,396 7,830,409 —
Proceeds from "At the Market" equity distribution agreement 19,362,240 1,214,083 —
Proceeds from public offering — — 30,218,796
Cash provided by financing activities 23,667,636 9,044,492 30,398,036
(Decrease) increase in cash 8,495,246 (10,815,254) 5,670,253
Cash and cash equivalents, beginning of year 14,152,825 25,220,328 19,323,541
Impact of foreign exchange on cash and cash equivalents 1,368,204 (252,249) 226,534
Cash and cash equivalents, end of year 24,016,275 14,152,825 25,220,328


To view the Company’s Fiscal 2015 Consolidated Financial Statements, related Notes to the Consolidated Financial Statements, and Management’s Discussion and Analysis, please see the Company’s annual filings, which will be available under the Company’s profile at www.sedar.com and on Oncolytics’ website at View Source

On March 10, 2016 Verastem, Inc. (NASDAQ:VSTM), focused on discovering and developing drugs to treat cancer, reported the presentation of preclinical data and participation in an expert panel at the Keystone Symposium on Stem Cells and Cancer being held March 6 – 10, 2016 in Breckenridge, CO (Press release, Verastem, MAR 10, 2016, View Source;p=RssLanding&cat=news&id=2147460 [SID:1234509470]).

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"The scientific consensus on the importance of targeting cancer stem cells to enable a durable clinical response continues to build," said Dr. Jonathan Pachter, Verastem Head of Research. "Our presentation at the Keystone Symposium describes our current understanding of the role of PI3K/mTOR and FAK in the survival and tumor-initiating capability of cancer stem cells."

"Of particular interest, we have also found that FAK inhibition increases influx of cytotoxic T cells into tumors while reducing immuno-suppressive and stromal density barriers to anti-tumor immune attack," continued Dr. Pachter. "New data from preclinical models presented today demonstrate that FAK inhibition enhances the anti-tumor effect of adoptive T cell transfer. These data suggest that the benefit of FAK inhibitor combination is likely to extend to various approaches that enhance cytotoxic T cell function, including combination with antibodies against PD-1 and PD-L1. We are now clinically testing this with the combination of VS-6063 and pembrolizumab at Washington University in Saint Louis in patients with advanced pancreatic cancer. We also recently announced a clinical collaboration with Pfizer and Merck KGaA to combine VS-6063 and avelumab for the treatment of patients with ovarian cancer."

Details for the presentation at the Keystone Symposium on Stem Cells and Cancer are as follows:
Oral Presentation and Panel
Title: Targeting Cancer Stem Cells with Selective Inhibitors of FAK and PI3K/mTOR
Session: Targeting Cancer Stem Cells: Trials and Translation
Date and time: Thursday, March 10, 2016, 8:00 – 11:00 am PT
A copy of the oral presentation will be available following the presentation at http://bit.ly/R3M6wc.
About Focal Adhesion Kinase
Focal Adhesion Kinase (FAK) is a non-receptor tyrosine kinase encoded by the PTK-2 gene that is involved in cellular adhesion and, in cancer, metastatic capability. VS-6063 (defactinib) and VS-4718 are orally available compounds that are potent inhibitors of FAK. VS-6063 and VS-4718 utilize a multi-faceted approach to treat cancer by reducing cancer stem cells, enhancing anti-tumor immunity, and modulating the local tumor microenvironment. VS-6063 and VS-4718 are currently being studied in multiple clinical trials for patients with cancer.
About VS-5584
VS-5584 is an orally available compound that has demonstrated potent and highly selective activity against class 1 PI3K enzymes and dual inhibitory actions against mTORC1 and mTORC2. In preclinical studies, VS-5584 has been shown to reduce the percentage of cancer stem cells and induce tumor regression in chemotherapy-resistant models. Verastem is currently conducting a dose escalation trial of VS-5584 in patients with advanced solid tumors.

On March 10, 2016 Five Prime Therapeutics, Inc. (Nasdaq:FPRX), a clinical-stage biotechnology company focused on discovering and developing innovative immuno-oncology protein therapeutics, reported a corporate update and reported financial results for the fourth quarter and full year ending December 31, 2015 (Press release, Five Prime Therapeutics, MAR 10, 2016, View Source [SID:1234509475]).

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"2015 was a transformational year for Five Prime," said Lewis T. "Rusty" Williams, M.D., Ph.D., president and chief executive officer of Five Prime. "Of note, our license and collaboration agreement with Bristol-Myers Squibb (BMS) maximizes the clinical and commercial potential of FPA008 and the exceptional terms have strengthened our financial position. In addition, we are encouraged by the early safety and efficacy data from FPA144 in patients with gastric cancer, and we look forward to assessing its potential in other indications. Beyond our clinical programs, we also made progress in our internal immuno-oncology research programs, and continue to be on track to file an IND application in 2017."

2015 Business Highlights and Recent Developments

Clinical Development:

FPA008: an investigational antibody that inhibits CSF1R and has been shown in preclinical models to block the activation and survival of monocytes and macrophages.

Established Exclusive Worldwide License and Collaboration Agreement with BMS for FPA008. In October 2015, Five Prime and BMS entered into an exclusive worldwide license and collaboration agreement for the development and commercialization of FPA008. Five Prime received a $350 million upfront payment during the fourth quarter and is eligible to receive up to $1.4 billion in development and regulatory milestone payments as well as royalty percentages ranging from the high teens to the low twenties on future worldwide net sales of FPA008. Five Prime also has an option to co-promote FPA008 in the United States.

Initiated Phase 1a/1b FPA008/OPDIVO Combination Trial. In September 2015, Five Prime initiated patient dosing in the Phase 1a/1b clinical trial evaluating the safety, tolerability and preliminary efficacy of the immunotherapy combination of FPA008 with OPDIVO (nivolumab), BMS’s PD-1 immune checkpoint inhibitor. Five Prime expects to expand into Phase 1b in multiple tumor settings in the second half of 2016.

Initiated Phase 1/2 Clinical Trial of FPA008 in Pigmented Villonodular Synovitis (PVNS). In the third quarter of 2015, Five Prime initiated patient dosing in its Phase 1/2 clinical trial in PVNS, a CSF1R-driven tumor and an orphan indication. The company expects to begin Phase 2 expansion, which will evaluate tumor response rate and duration as well as measures of pain and joint function, in mid-2016. The company submitted an epidemiology study focusing on the incidence and prevalence of this rare disease for presentation at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.

FPA144: an anti-FGF receptor 2b (FGFR2b) Monoclonal Antibody Engineered to Recruit NK Cells into the Tumor Microenvironment. During the fourth quarter of 2015, Five Prime completed dose escalation in the ongoing Phase 1 trial of single-agent FPA144 and began dose expansion at a selected dose in new cohorts of gastric cancer patients whose tumors overexpress FGFR2b. In January 2016, Five Prime presented preliminary data from the dose escalation portion of the trial at the ASCO (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium, which showed:

Two partial responses in six gastric cancer patients with IHC 3+ FGFR2b-positive gastric cancer;

A partial response in a patient whose bladder cancer overexpressed FGFR2b; and

FPA144 was well tolerated and differentiated from small molecule kinase inhibitors targeting the pathway, which often cause hyperphosphatemia and other dose-limiting toxicities.

Based on results to date, Five Prime continues to evaluate FPA144 as a monotherapy in refractory gastric cancer, as a combination therapy for gastric cancer, and as a potential treatment for other types of cancer. The company submitted an abstract for presentation at the ASCO (Free ASCO Whitepaper) 2016 Annual Meeting in June and will present preclinical data regarding FPA144’s ability to reprogram immune cells in the tumor microenvironment at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April 2016.

FP-1039/GSK3052230, an FGF Ligand Trap. GlaxoSmithKline (GSK) presented data from the ongoing open-label Phase 1b trial in patients with squamous non-small cell lung cancer (sqNSCLC) and mesothelioma at the World Conference on Lung Cancer in September 2015. In January 2016, GSK and Five Prime agreed to stop enrollment in the sqNSCLC patient cohorts given the change in treatment paradigms following approvals of immuno-oncology agents and the increasingly competitive landscape in sqNSCLC. In addition, the companies agreed that GSK would continue to enroll mesothelioma patients based on encouraging preliminary data from the mesothelioma arm of the trial.

On March 9, 2016, GSK notified Five Prime that it was providing 180-day notice of termination of the FP-1039 license and collaboration agreement for convenience. Five Prime plans to work with GSK to ensure completion of enrollment in the ongoing mesothelioma arm of the Phase 1b study and to transfer the asset and program back to Five Prime. Five Prime continues to be encouraged by the progress of this Phase 1b trial. Mesothelioma could represent a potentially attractive market opportunity for a company like Five Prime. Five Prime will base decisions on future development of FP-1039 on whether the quality and durability of responses in this population is maintained in this trial. GSK has submitted mesothelioma data for presentation at the ASCO (Free ASCO Whitepaper) 2016 Annual Meeting.

Preclinical Research and Development:

Progressed Internal Immuno-Oncology Research Programs. During 2015, Five Prime continued to expand its immuno-oncology research efforts and advanced multiple candidates into preclinical development. The company continues to be on track to file an IND application in 2017.

Established New GITR Agonist Program. Five Prime in-licensed novel, potentially best-in-class, multivalent glucocorticoid-induced tumor necrosis factor receptor (GITR) antibodies from Inhibrx during the third quarter of 2015. Their unique multivalent format facilitates clustering of GITR on T cells, which should result in superior T cell activation compared to conventional antibodies.

Enhanced the Company’s Ability to Generate Therapeutic Antibodies and Move Them More Rapidly Toward IND Applications. In October 2015, Five Prime secured a license from Open Monoclonal Technology (OMT) to access mono- and bi-specific antibody platforms and antibody repertoire sequencing technology for the generation of novel therapeutic candidates. In December 2015, Five Prime obtained a license from Xoma Ltd. to one of Xoma’s proprietary phage display libraries for antibody discovery.

Other Licenses and Collaborations:

Entered into License Agreement with bluebird bio for Antibodies to Develop CAR T Cell Therapy. In May 2015, Five Prime granted an exclusive license to bluebird bio to research, develop and commercialize chimeric antigen receptor (CAR) T cell therapies using Five Prime’s proprietary human antibodies to an undisclosed target for hematologic malignancies and solid tumors. The agreement included a $1.5 million upfront payment and subsequent milestone payments to Five Prime, which together could total over $130 million per licensed product if certain development, regulatory, and commercial milestones are achieved. Five Prime is also eligible to receive tiered royalties on product sales.

GSK Exercised Options to Reserve Multiple Protein Targets Discovered by Five Prime for Respiratory Disease. GSK paid Five Prime $600,000 in target reservation fees.

Finance:

Completed Public Offering of Common Stock. In January 2015, Five Prime completed an underwritten public offering of common stock, raising net proceeds of $78.7 million.

Summary of Financial Results and Guidance:

Cash Position. Cash, cash equivalents and marketable securities totaled $517.5 million on December 31, 2015 compared to $149.1 million on December 31, 2014. The increase in year-end 2015 cash was primarily attributable to the $350 million upfront payment received in December 2015 from BMS for the FPA008 license and collaboration agreement.

Revenue. Collaboration revenue for the fourth quarter of 2015 increased by $358.7 million to $363.3 million from $4.6 million in the fourth quarter of 2014, primarily due to revenue recognized under the FPA008 license and collaboration agreement with BMS. Collaboration revenue for the full year 2015 increased by $360.6 million to $379.8 million in 2015 from $19.2 million in 2014 primarily due to revenue recognized under the collaborations with BMS, UCB and GSK.

R&D Expenses. Research and development expenses for the fourth quarter of 2015 increased by $8.4 million, or 67%, to $21.0 million from $12.6 million in the fourth quarter of 2014. Full year 2015 research and development expenses increased by $27.0 million, or 63%, to $70.2 million in 2015 from $43.2 million in 2014. This increase was primarily related to advancing the FPA008 program in immuno-oncology and PVNS, and advancing internal immuno-oncology research and preclinical activities, including expenses related to in-licensing GITR antibodies.

G&A Expenses. General and administrative expenses for the fourth quarter of 2015 increased by $4.6 million, or 115%, to $8.6 million from $4.0 million in the fourth quarter of 2014. Full year 2015 general and administrative expenses were $22.6 million, an increase of $9.0 million, or 66%, from $13.6 million in 2014. This increase was primarily due to increases in personnel related expenses, including stock-based compensation, facility costs and recruiting related to expansion of operations.

Net Income (Loss). Net income for the fourth quarter of 2015 was $296.1 million, or $11.37 per basic share and $10.63 per diluted share, compared to a net loss of $11.8 million, or $0.55 per basic and diluted share, for the fourth quarter of 2014. Full year 2015 net income was $249.6 million, or $9.73 per basic share and $9.23 per diluted share, compared to a net loss of $37.4 million, or $1.79 per basic and diluted share in 2014. These increases in net income were primarily related to the revenue recognized under the FPA008 license and collaboration agreement with BMS.

Cash Guidance. Five Prime expects full-year 2016 net cash used in operating activities to be less than $120 million, comprising less than $90 million used in operations and less than $30 million used for tax payments. The company estimates ending 2016 with approximately $400 million in cash, cash equivalents and marketable securities.