On December 21, 2016 Astellas Pharma Inc. (TSE: 4503, President and CEO: Yoshihiko Hatanaka, "Astellas" ) reported that it has completed the acquisition of Ganymed Pharmaceuticals AG ("Ganymed"), a biopharmaceutical company located in Mainz, Germany, and Ganymed has become a wholly owned subsidiary of Astellas as of CET December 20, 2016 (Press release, Astellas, DEC 21, 2016, View Source [SID1234517149]).

Under the agreement executed between Astellas and Ganymed’s shareholders, Astellas paid EUR 422 million to acquire 100% of the equity in Ganymed. In addition, Ganymed’s shareholders will become eligible to receive up to EUR 860 million in further contingent payments based on progress in the development of IMAB362, Ganymed’s most advanced clinical program.

Through the acquisition, Astellas will expand its oncology pipeline with antibody program in the late-stage to build upon its leading oncology franchise as a platform for sustainable growth.

Astellas is still reviewing the impact of the completion of the acquisition on its financial results for the fiscal year ending March 31, 2017.

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On December 12, 2016 Triphase Accelerator Corporation, a private drug development company dedicated to advancing novel compounds through Phase 2 proof-of-concept, reported a new strategic collaboration with Celgene Corporation (Press release, Triphase Accelerator, DEC 21, 2016, View Source [SID1234529641]). Under the Agreement, Celgene has an option to acquire all Triphase Accelerator’s assets relating to TRPH-222 (CD22-4AP), an antibody-drug conjugate in development for lymphoma.

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Pursuant to the Agreement, Triphase Accelerator received an upfront payment from Celgene. Triphase Accelerator will control development and will retain all commercial rights to TRPH-222 (CD22-4AP). If Celgene exercises its option to acquire TRPH-222 (CD22-4AP), Celgene will become responsible for development and commercialization, and Triphase Accelerator will be eligible to receive development, regulatory and sales milestone payments. This is the third product option deal between Triphase Accelerator and Celgene.

"This collaboration is important to Triphase Accelerator in multiple ways. First, it continues to solidify the relationship we have developed over time with Celgene. They have been a valued collaborator to us and we are grateful. Just as importantly, it continues to validate our business model of acquiring early-stage assets and applying our methodology to accelerate programs through the proof-of-concept phase and into the clinic," said Mohit Trikha, Ph.D., chief scientific officer, Head of Triphase Accelerator. "As we continue to acquire and develop new assets, we look forward to finding new ways to demonstrate how our approach is uniquely science based, efficient, and cost-effective, with the ultimate goal to help patients."

TRPH-222 is a novel, site-specific antibody-drug conjugate (ADC) targeting CD22, a B-cell-restricted sialogycoprotein that is an important modulator of B-cell signaling and survival, which is expressed on nearly all B-cell malignancies. CD22 is a validated ADC target for Non-Hodgkin’s lymphoma and acute lymphoid leukemia. The compound itself combines a site-specific modified humanized antibody conjugated to a toxin payload and a 4AP linker.

"We have enjoyed a long-standing relationship with Triphase Accelerator and believe in their approach to drug development," said Celgene’s President of Hematology Oncology, Michael Pehl. "This latest agreement, which closely follows our acquisition of their marizomib asset, represents our confidence in their approach to drug development, and we look forward to a continued collaboration with the company."

On December 21, 2016 Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK) reported that, following a recent independent Data and Safety Monitoring Board (DSMB) recommendation and subsequent futility analysis, it has decided to stop the Phase 2 HERMIONE study of MM-302 (HER2 antibody-targeted liposomal doxorubicin) in HER2-positive metastatic breast cancer patients who had previously been treated with trastuzumab (Herceptin), pertuzumab (Perjeta) and ado-trastuzumab emtansine (T-DM1, Kadcyla) (Press release, Merrimack, DEC 21, 2016, View Source [SID1234517147]).

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The decision to stop the trial was made following the DSMB’s opinion that continuing would be unlikely to demonstrate benefit over the comparator treatments. Subsequent to this recommendation, a futility assessment was performed that confirmed the DSMB’s opinion. Both the treatment and control arms were found to have shorter than expected median progression free survival.

Importantly, there were no new or unexpected safety concerns. Patients currently enrolled in the trial may choose to continue on their assigned treatment based upon discussion with their study physician.

"Late line HER2-positive breast cancer is very difficult to treat, especially in this new and previously unstudied group of patients who appear to experience rapid cancer progression following treatment with trastuzumab, pertuzumab and ado-trastuzumab emtansine," said Istvan Molnar, MD, Vice President of Clinical Development at Merrimack Pharmaceuticals. "While we are disappointed with this outcome, we would like to thank the study Steering Committee, the investigators and, most importantly, the patients who participated in the HERMIONE trial. We will report our learnings from this study at a later date."

In light of this development, Merrimack now expects to provide further details about MM-302, as well as the results of its full pipeline review, in January.

On December 21, 2016 Exosome Diagnostics, Inc. reported data that sets a new standard for EGFR-T790M resistance mutation detection in lung cancer, with the highest sensitivity reported to date (Press release, Exosome Diagnostics, DEC 21, 2016, View Source [SID1234517160]). This test is being developed to improve care and outcomes for the large population of patients who can benefit from second line EGFR Tyrosine Kinase Inhibitor (TKI) therapy but are missed with currently available tissue and liquid biopsy tests. Clinical validation data from a cohort of 160 patients, the largest of its kind in this patient population, was presented in plenary session during the recent AACR (Free AACR Whitepaper)-EORTC-NCI meeting in Munich, Germany. ExoDx Lung(T790M) has been optimally designed for ExosomeDx’s high throughput biomarker testing platform that is being deployed in 2017.

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Twenty percent of non-small cell lung cancer (NSCLC) patients test positive for an EGFR driver mutation (approximately 45,000 patients in the U.S. alone) and receive EGFR TKI therapy. Unfortunately, most will develop a resistance to EGFR TKI therapy. Tissue biopsies are the current standard for identifying T790M resistance. If a patient tests positive, they are eligible for treatment with a second line EGFR TKI therapy. Unfortunately, a tissue biopsy is not always a viable option for a large percentage of these patients.

Non-invasive liquid biopsies have emerged as a viable alternative for patients unable to have tissue biopsy procedure. Clinical studies have demonstrated that the FDA approved cobas test for liquid biopsy, only identifies 59% of patients who will respond to a second line EGFR TKI therapy. This is a direct result of lack of sensitivity and inability to test challenging intrathoracic disease. By analyzing exosomal RNA (exoRNA) and cell free tumor DNA (ctDNA) from the same sample Exosome Dx addresses current limitations by identifying 96% of the T790M positive population, with no loss of sensitivity in patients with intrathoracic disease.

"EGFR T790M mutations have previously been challenging for liquid biopsy assays. In this clinical study, we show that ExoDx Lung(T790M) has a higher clinical sensitivity and specificity than what has been reported to date for the FDA cleared test distributed by Roche. This study further demonstrates the power of our ExoLution Plus platform that combines exoRNA plus ctDNA. This result was not surprising since we have shown superior performance to ctDNA across several disease states in blinded head to head studies. Clinical samples are precious so we are thrilled to be able to offer a more sensitive test that take both exoRNA and ctDNA into consideration,"stated Dr. Johan Skog, Chief Scientific Officer at Exosome Diagnostics.
The test is the latest in a series of biofluids based diagnostic and companion diagnostic biomarker tests being developed by Exosome Diagnostics to potentially aid in therapy selection and patient monitoring in oncology and other diseases.

To assure future access to the company’s novel biomarker tests worldwide, Exosome Diagnostics also announced that it has developed a high throughput version of its proprietary ExoLution Plus system to prepare samples that can be analyzed with exoRNA and cfDNA analysis test kits. This system utilizes Exosome Diagnostics’ patented technology and has been developed with high throughput capability to be integrated with leading clinical laboratory analytical systems including those marketed by Roche and Thermo Fisher

"This data illustrates one of the many indications for which Exosome Diagnostics can leverage its extremely sensitive liquid biopsy technology to improve patients’ lives by guiding therapy, where other technologies could not in a reliable fashion" stated John Boyce, President and CEO of Exosome Diagnostics. "Exosome Diagnostics has proven that its technology is extremely robust and can scale on a variety of existing commercial platforms in diagnostic laboratories," Boyce continued.

On December 20, 2016 Rosetta Genomics Ltd. (NASDAQ: ROSG), a genomic diagnostics company that improves treatment decisions by providing timely and accurate diagnostic information to physicians, reported financial results for the three and nine months ended September 30, 2016(Filing, Q3, Rosetta Genomics, 2016, DEC 20, 2016, View Source [SID1234517142]).

Highlights for the third quarter of 2016 and recent weeks include:

· Announced the publication of a clinical validation study in support of RosettaGX RevealÔ (Reveal), Rosetta’s first-of-its-kind microRNA classifier for indeterminate thyroid nodules, in the peer-reviewed Journal of Clinical Pathology;
· Reveal was featured on the cover of the October issue of the peer-reviewed journal Cancer Cytopathology;
· Announced that Reveal is now available to be used on ThinPrep samples and reported results from a study confirming that Reveal produces the same high level performance on ThinPrep prepared slides as it does on a direct smear from a thyroid Fine Needle Aspirate ("FNA") biopsy;
· Entered into an exclusive distribution agreement with Rhenium Ltd. for the sales and marketing of Reveal in Israel, where Clalit, (General Sick Fund), the largest organization and the first health insurance institution in Israel, has indicated it will include the Reveal assay in its Sick Fund;
· Closed concurrent registered direct and private placement offerings with one prominent institutional healthcare investor with expected net proceeds of approximately $4.6 million;
· Entered into a research agreement with Sheba Medical Center at Tel HaShomer, Israel, to develop a microRNA-based signature to predict response to nivolumab, an immunotherapy drug marketed as Opdivo, which is approved for the treatment of lung cancer; and
· Fortified its intellectual property portfolio with two new patent allowances for the company’s novel microRNA platform technology as a prognostic for predicting progression of platinum-resistant stage III ovarian cancer and for diagnosing pleural mesothelioma or distinguishing between pleural mesothelioma and other cancers.

Management Commentary

"Throughout 2016 we have been focused on the successful commercial launch of our Reveal assay for the classification of indeterminate thyroid nodules and we have made significant progress advancing this important product offering. We were pleased that two peer-reviewed journal articles supporting the clinical and analytical validation of Reveal were published in prestigious journals, which considerably enhances our sales and marketing efforts. In addition, we presented data from a study confirming that Reveal produces the same high-level performance on ThinPrep prepared slides as it does on a direct smear from a thyroid Fine Needle Aspirate (FNA) biopsy. This opens our market to pathologists who prefer to use ThinPrep slides and we have since seen an uptick in demand," stated Kenneth A. Berlin, President and Chief Executive Officer of Rosetta Genomics.

"We remain committed to advancing our strategy to use Reveal to access new accounts to promote our exceptional thyroid offering as well as our urologic cancer and solid tumor product lines. We believe that opening new relationships with Reveal will allow us to bring our solid tumor and urologic oncology offerings to many of these new accounts, thus further accelerating revenue growth.

"In addition to focusing on our suite of marketed diagnostic assays, we made significant progress on a number of important corporate initiatives that further strengthen Rosetta Genomics. We entered into a research collaboration to identify a microRNA-based biomarker to predict treatment response to Opdivo, fortified our microRNA intellectual property portfolio with two new patent allowances and strengthened our balance sheet by closing financing transactions with expected net proceeds of $4.6 million.

"As we enter 2017, Rosetta Genomics is well-positioned for success and we look forward to achieving a series of value-creating milestones," concluded Mr. Berlin.

Third Quarter Financial Results

· Revenues for the third quarter of 2016 decreased 10% to $2.2 million compared with $2.4 million for the third quarter of 2015, primarily due to lower sales of urologic and solid tumor testing services as the Company refocused its sales force on the Reveal introduction.
· Revenues from urologic cancer testing services for the third quarter of 2016 was $970,000, compared with $1.3 million for the third quarter of 2015, and represented approximately 44% of clinical testing revenues for the third quarter of 2016.
· Revenues from solid tumor testing services for the third quarter of 2016 of $841,000 decreased 26% compared with $1.1 million in the third quarter of 2015, and represented 38% of total clinical testing revenues during the third quarter of 2016.
· Reveal revenues for the third quarter of 2016 were $282,000, a 70% increase compared with $166,000 for the second quarter of 2016. There were no Reveal revenues in 2015 as the assay was launched commercially in the first quarter of 2016. Reveal revenues represented 13% of total clinical testing revenues in the third quarter of 2016.

· The Company also had $107,000 of revenues from Hematological FISH testing (HEME FISH), a new line of business this quarter, which represented 5% of total clinical testing revenues in the third quarter of 2016.
· On a non-GAAP basis, gross billings for Reveal during the third quarter of 2016 were $930,000 compared with $511,000 for the second quarter of 2016, representing growth of 82%. Gross billings are the aggregate amounts invoiced to customers.
· Cost of revenues for the third quarter of 2016 decreased to $1.8 million from $2.2 million for the third quarter of 2015.
· Research and development expenses for the third quarter of 2016 increased to $879,000 from $586,000 for the third quarter of 2015, primarily due to timing of acquisition of clinical samples.
· Sales, marketing and business development expenses were $1.7 million for the third quarters of 2016 and 2015.
· General and administrative expenses for the third quarter of 2016 decreased to $1.8 million compared with $1.9 million for the same period in 2015 primarily due to financing-related expenses in 2015.
· The operating loss for the third quarter of 2016 was $3.9 million, which included $238,000 of non-cash stock-based compensation expense, compared with an operating loss of $3.9 million for the third quarter of 2015, which included $211,000 of non-cash stock-based compensation expense.
· The net loss for the third quarter of 2016 was $4.0 million, or $0.19 per ordinary share on 20.9 million weighted average shares outstanding, compared with a net loss for the third quarter of 2015 of $3.9 million, or $0.27 per ordinary share on 14.8 million weighted average shares outstanding.
· On a non-GAAP basis, excluding the 238,000 of non-cash stock-based compensation expense, the net loss for the third quarter of 2016 would have been $3.7 million, or $0.18 per ordinary share.
· For 2015, on a non-GAAP basis, excluding the 211,000 of non-cash stock-based compensation expense, the net loss for the third quarter of 2015 would have been $3.7 million, or $0.25 per ordinary share.

Nine Month Financial Results

· Revenues for the first nine months of 2016 increased 53% to $7.2 million compared with $4.7 million for the first nine months of 2015. On a pro forma basis (as if the PersonalizeDx acquisition occurred on January 1, 2015 instead of the actual acquisition date of April 13, 2015), revenues for the first nine months of 2016 increased 9% compared with pro forma revenues of $6.6 million for the first nine months of 2015.
· Cost of revenues for the nine-month period ended September 30, 2016 was $5.4 million compared with $4.4 million for the same period of 2015.
· Total operating expenses for the first nine months of 2016 of $13.1 million compared with $10.9 million for the first nine months of 2015, which included a gain of $2.4 million on bargain purchase related to the acquisition of PersonalizeDx.
· The operating loss for the first nine months of 2016 was $11.3 million, which included $697,000 of non-cash stock-based compensation expense, compared with an operating loss for the first nine months of 2015 of $10.6 million, which included $755,000 of non-cash stock-based compensation expense as well as a gain of $2.4 million on bargain purchase related to the acquisition of PersonalizeDx.

· The net loss for the first nine months of 2016 was $11.4 million, or $0.55 per ordinary share on 20.8 million weighted average shares outstanding, compared with a net loss for the first nine months of 2015 of $10.6 million, or $0.76 per ordinary share.

Balance Sheet Highlights

As of September 30, 2016, Rosetta Genomics had cash, cash equivalents, restricted cash and short-term bank deposits of $6.1 million, compared with $13.6 million as of December 31, 2015. The Company used approximately $9.1 million in cash to fund operations during the first nine months of 2016, and collected approximately $6.9 million in cash from its clinical testing services as well as $1.6 million from a licensing deal signed in December 2015. Following the close of the quarter, Rosetta Genomics closed concurrent registered direct and private placement offerings with one institutional healthcare investor for expected net proceeds of approximately $4.6 million. Rosetta Genomics believes that its current cash, together with its existing operating plan, which includes cost-reduction plan should it be unable to raise additional capital, should provide sufficient liquidity resources for the Company and its subsidiaries through the third quarter of 2017.

2017 Revenue and Unit Guidance for RosettaGX Reveal

Rosetta Genomics also today introduces 2017 revenue and unit guidance for RosettaGX Reveal. For 2017, Rosetta Genomics expects Reveal revenue to be between $4.0 million and $5.0 million, and expects to process between 2,500 and 3,500 Reveal units throughout the year.

ThinPrep is a registered trademark of Hologic, Inc. and Opdivo is a registered trademark of Bristol-Myers Squibb.

Use of Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures. A "non-GAAP financial measure" refers to a numerical measure of historical or future financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the financial statements. In this release, Rosetta provides non-GAAP gross billings, non-GAAP net loss and non-GAAP net loss per share data as additional information relating to its operating results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for revenues, net loss or net loss per share prepared in accordance with GAAP.

Pursuant to the requirements of Regulation G promulgated by the SEC, the Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release and related conference call or webcast to the most directly comparable financial measure prepared in accordance with GAAP. This reconciliation is presented in the tables below under the heading "Reconciliation of GAAP to Non-GAAP Consolidated Statement of Operation." Investors are encouraged to review these reconciliations to ensure they have a thorough understanding of the reported non-GAAP financial measures and their most directly comparable GAAP financial measures.

Management uses these non-GAAP measures for internal reporting and forecasting purposes. The Company has provided these non-GAAP financial measures in addition to GAAP financial results because it believes that these non-GAAP financial measures provide useful information to certain investors and financial analysts for comparison across accounting periods not influenced by certain non-cash items that are not used by management when evaluating the Company’s historical and prospective financial performance.

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