On October Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) reported consolidated financial results for the quarter ended September 30, 2016 and reviewed recent progress with its approved and investigational cystic fibrosis (CF) medicines (Press release, Vertex Pharmaceuticals, OCT 25, 2016, View Source [SID1234516000]). Vertex also reiterated its financial guidance for total 2016 ORKAMBI and KALYDECO revenues and expenses. Key financial results include:

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Three Months Ended September 30,
2016 2015 % Change
(in millions, except per share and percentage data)
ORKAMBI product revenues, net $ 234 $ 131 79 %
KALYDECO product revenues, net $
176
$
166
6 %
TOTAL CF product revenues, net $
410
$
297
38 %

GAAP net loss $ (42 ) $ (95 ) (56 )%
GAAP net loss per share $ (0.17 ) $ (0.39 ) (56 )%

Non-GAAP net income (loss) $ 40 $ (32 ) N/A
Non-GAAP net income (loss) per share $ 0.16 $ (0.13 ) N/A
"Vertex continues to make significant progress with the key growth drivers for our business – increasing the number of people being treated with ORKAMBI and KALYDECO, expanding the number of people eligible for these medicines through label-expansions and developing new medicines to treat potentially all people with CF in the future," said Jeffrey Leiden, M.D., Ph.D., Chairman, President and Chief Executive Officer of Vertex. "Our progress toward treating more people with CF was marked by several important milestones in recent weeks, including the approval of ORKAMBI for children ages six to eleven in the U.S. and today’s announcement regarding the advancement of our pipeline of next-generation correctors. Importantly, we’re also continuing to generate important additional data about the long-term benefits of treating the underlying cause of CF with both ORKAMBI and KALYDECO."

Vertex today reviewed recent progress from across its CF program:

ORKAMBI

FDA approval of ORKAMBI for the treatment of children ages 6 to 11: On September 28, 2016 the U.S. Food and Drug Administration (FDA) approved ORKAMBI for the treatment of children ages 6 through 11 who have two copies of the F508del mutation. There are approximately 2,400 children ages 6 through 11 who have two copies of the F508del mutation in the U.S.

Data from Phase 3 efficacy study to support approval in children ages 6 to 11 in Europe expected by year-end: Vertex completed enrollment in a six-month Phase 3 efficacy study evaluating ORKAMBI in children ages 6 through 11 who have two copies of the F508del mutation and expects data from this study by the end of 2016. The primary endpoint of the study is the absolute change in lung clearance index. Pending data from the study, Vertex plans to submit a Marketing Authorization Application variation in the European Union in the first half of 2017. In Europe, there are approximately 3,400 children ages 6 through 11 who have two copies of the F508del mutation.

Tezacaftor (VX-661) in Combination with Ivacaftor

Enrollment complete in two Phase 3 studies of tezacaftor (VX-661); data expected in first half of 2017: Vertex has now completed enrollment in two of three ongoing Phase 3 studies of the investigational combination of tezacaftor and ivacaftor. Enrollment is complete in the Phase 3 study in people ages 12 and older who have two copies of the F508del mutation and also in the Phase 3 study in people ages 12 and older who have one F508del mutation and one residual function mutation. Data from both studies are expected in the first half of 2017. The Phase 3 study of tezacaftor in combination with ivacaftor in people with one F508del mutation and one gating mutation is expected to complete enrollment in early 2017. Vertex plans to submit a New Drug Application (NDA) to the FDA for tezacaftor in combination with ivacaftor in the second half of 2017, pending data from the Phase 3 program.

Next-Generation Correctors

Planned initiation of Phase 2 studies in CF patients: In a separate press release issued today, Vertex announced that it plans to initiate two Phase 2 studies to evaluate the next-generation correctors VX-440 and VX-152 in triple combination regimens with tezacaftor (VX-661) and ivacaftor in people with cystic fibrosis (CF). Both studies are expected to start by the end of 2016. Additional details on the design of these studies were provided today in a separate press release.

Additional next-generation correctors moving into clinical development: Vertex also reported that it plans to begin a Phase 1 study of VX-659, the company’s third next-generation corrector, by the end of 2016 and to advance a fourth next-generation corrector into clinical development in 2017. Additional details were provided today in a separate press release.

Third Quarter 2016 Financial Highlights

Revenues:

Net product revenues from ORKAMBI were $234.0 million compared to $130.8 million for the third quarter of 2015. ORKAMBI was launched in the U.S. in July 2015.
Net product revenues from KALYDECO were $175.6 million, compared to $165.9 million for the third quarter of 2015.
Expenses:

GAAP operating expenses were $435.5 million compared to $379.8 million for the third quarter of 2015. Non-GAAP operating expenses (combined non-GAAP R&D and SG&A) were $298.0 million compared to $277.7 million for the third quarter of 2015. The increases were primarily driven by increased costs related to the progression of our CF pipeline and to increased investment in global commercial support for the launch of ORKAMBI.
GAAP R&D expenses were $275.4 million compared to $246.3 million for the third quarter of 2015. Non-GAAP R&D expenses were $214.0 million compared to $201.6 million for the third quarter of 2015. The increases were primarily driven by increased investment to progress our portfolio of CF medicines.
GAAP SG&A expenses were $106.1 million compared to $99.8 million for the third quarter of 2015. Non-GAAP SG&A expenses were $84.0 million compared to $76.1 million for the third quarter of 2015. The increases were primarily driven by increased investment to support the global launch of ORKAMBI.
Net Income (Loss) Attributable to Vertex:

GAAP net loss was $(41.8) million, or $(0.17) per diluted share, compared to GAAP net loss of $(95.1) million, or $(0.39) per diluted share, for the third quarter of 2015. Non-GAAP net income was $40.1 million, or $0.16 per diluted share, compared to a non-GAAP net loss of $(31.9) million, or $(0.13) per diluted share, for the third quarter of 2015.
Cash Position:

As of September 30, 2016, Vertex had $1.13 billion in cash, cash equivalents and marketable securities compared to $1.04 billion in cash, cash equivalents and marketable securities as of December 31, 2015.
As of September 30, 2016, Vertex had $300 million outstanding from a credit agreement, which was refinanced on October 13, 2016 to lower the company’s interest expense. The $300 million outstanding under the new credit agreement matures in the fourth quarter of 2021.
2016 Financial Guidance:

Vertex today reiterated its 2016 revenue guidance for ORKAMBI and KALYDECO. The company also reiterated guidance for its 2016 combined non-GAAP R&D and SG&A expenses. The guidance is summarized below:

ORKAMBI: The company continues to expect total 2016 product revenues for ORKAMBI of $950 to $990 million.
KALYDECO: The company continues to expect total 2016 product revenues for KALYDECO of $685 to $705 million. 2016 guidance for KALYDECO currently excludes any revenues related to the potential approval of KALYDECO for people in the U.S. who have residual function mutations.
Operating Expenses (Combined Non-GAAP R&D and SG&A Expenses): Vertex continues to expect that its combined non-GAAP R&D and SG&A expenses in 2016 will be in the range of $1.18 to $1.23 billion. Vertex’s expected non-GAAP R&D and SG&A expenses exclude stock-based compensation expense and certain other expenses.
Non-GAAP Financial Measures

In this press release, Vertex’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. In particular, non-GAAP financial results and guidance exclude stock-based compensation expense, revenues and expenses related to consolidated variable interest entities, costs and credits related to the relocation of the company’s corporate headquarters and hepatitis C-related revenues and costs and other adjustments. These results are provided as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help indicate underlying trends in the company’s business, are important in comparing current results with prior period results and provide additional information regarding the company’s financial position. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally and to manage the company’s business and to evaluate its performance. The company adjusts, where appropriate, for both revenues and expenses in order to reflect the company’s operations. The company provides guidance regarding product revenues in accordance with GAAP and provides guidance regarding combined non-GAAP research and development and sales, general, and administrative expenses. The company does not provide guidance regarding GAAP research and development and sales, general, and administrative expenses because of the difficulty of estimating stock-based compensation expenses, and predicting whether or not there will be additional expense items for which adjustments are appropriate. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.

Vertex Pharmaceuticals Incorporated
Third Quarter Results
Consolidated Statements of Operations Data
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 2016 2015
Revenues:
Product revenues, net $ 409,689 $ 302,511 $ 1,229,750 $ 593,774
Royalty revenues 3,835 5,759 12,713 17,628
Collaborative revenues 259 1,546 1,008 2,999
Total revenues 413,783 309,816 1,243,471 614,401
Costs and expenses:
Cost of product revenues (Note 1) 53,222 30,269 147,165 55,059
Royalty expenses 855 1,691 2,813 6,068
Research and development expenses 275,370 246,284 802,238 685,741
Sales, general and administrative expenses 106,055 99,772 322,921 280,026
Restructuring expenses 8 1,826 1,038 682
Total costs and expenses 435,510 379,842 1,276,175 1,027,576
Loss from operations (21,727 ) (70,026 ) (32,704 ) (413,175 )
Interest expense, net (20,140 ) (21,134 ) (60,993 ) (63,552 )
Other income (expenses), net (167 ) (1,326 ) 3,025 (5,025 )
Loss from operations before provision for income taxes (42,034 ) (92,486 ) (90,672 ) (481,752 )
Provision for income taxes 503 1,330 24,118 31,760
Net loss (42,537 ) (93,816 ) (114,790 ) (513,512 )
Loss (income) attributable to noncontrolling interest 696 (1,333 ) (33,207 ) 30,909
Net loss attributable to Vertex $ (41,841 ) $ (95,149 ) $ (147,997 ) $ (482,603 )

Amounts per share attributable to Vertex common shareholders:
Net loss:
Basic and diluted $ (0.17 ) $ (0.39 ) $ (0.61 ) $ (2.00 )
Shares used in per share calculations:
Basic and diluted 244,920 241,969 244,529 240,749

Reconciliation of GAAP to Non-GAAP Net Income (Loss)
Third Quarter Results
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 2016 2015
GAAP loss attributable to Vertex $ (41,841 ) $ (95,149 ) $ (147,997 ) $ (482,603 )
Stock-based compensation expense 61,209 65,734 178,623 186,379
Real estate restructuring costs and income (Note 2) 121 214 696 (2,186 )
HCV related revenues and costs (Note 3) (2,448 ) (7,734 ) (3,257 ) (18,207 )
Other adjustments (Notes 4 and 5) 23,090 5,007 92,460 5,631
Non-GAAP net income (loss) attributable to Vertex $ 40,131 $ (31,928 ) $ 120,525 $ (310,986 )

Amounts per diluted share attributable to Vertex common shareholders:
GAAP $ (0.17 ) $ (0.39 ) $ (0.61 ) $ (2.00 )
Non-GAAP $ 0.16 $ (0.13 ) $ 0.49 $ (1.29 )
Shares used in diluted per share calculations:
GAAP 244,920 241,969 244,529 240,749
Non-GAAP 248,009 241,969 247,433 240,749

Reconciliation of GAAP to Non-GAAP Revenues and Expenses
Third Quarter Results
(in thousands)
(unaudited)

Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 2016 2015
GAAP total revenues $ 413,783 $ 309,816 $ 1,243,471 $ 614,401
HCV related revenues (Note 3) (43 ) (6,415 ) (405 ) (15,378 )
Other adjustments (Note 4) (203 ) (1,105 ) (850 ) (1,379 )
Non-GAAP total revenues $ 413,537 $ 302,296 $ 1,242,216 $ 597,644

Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 2016 2015
GAAP cost of product revenues and royalty expenses $ 54,077 $ 31,960 $ 149,978 $ 61,127
HCV related costs (Note 3) 16 1,546 (117 ) (422 )
Non-GAAP cost of product revenues and royalty expenses $ 54,093 $ 33,506 $ 149,861 $ 60,705

GAAP research and development expenses $ 275,370 $ 246,284 $ 802,238 $ 685,741
Stock-based compensation expense (39,980 ) (44,700 ) (115,068 ) (124,550 )
HCV related costs (Note 3) 2,465 (294 ) 3,342 707
Other adjustments (Note 4) (23,889 ) 298 (36,828 ) (1,222 )
Non-GAAP research and development expenses $ 213,966 $ 201,588 $ 653,684 $ 560,676

GAAP sales, general and administrative expenses $ 106,055 $ 99,772 $ 322,921 $ 280,026
Stock-based compensation expense (21,229 ) (21,034 ) (63,555 ) (61,829 )
HCV related costs (Note 3) (76 ) (43 ) (106 ) 2,807
Other adjustments (Note 4) (758 ) (2,578 ) (2,999 ) (3,725 )
Non-GAAP sales, general and administrative expenses $ 83,992 $ 76,117 $ 256,261 $ 217,279

Combined non-GAAP R&D and SG&A expenses $ 297,958 $ 277,705 $ 909,945 $ 777,955

Three Months Ended
September 30,
Nine Months Ended
September 30,
2016 2015 2016 2015
GAAP interest expense, net and other expense, net $ (20,307 ) $ (22,460 ) $ (57,968 ) $ (68,577 )
Other adjustments (Note 4) (36 ) — 138 —
Non-GAAP interest expense, net and other expense, net $ (20,343 ) $ (22,460 ) $ (57,830 ) $ (68,577 )

GAAP provision for income taxes $ 503 $ 1,330 $ 24,118 $ 31,760
Other adjustments (Note 4) 509 (777 ) (20,063 ) (30,367 )
Non-GAAP provision for income taxes $ 1,012 $ 553 $ 4,055 $ 1,393

Condensed Consolidated Balance Sheets Data
(in thousands)
(unaudited)

September 30, 2016 December 31, 2015
Assets
Cash, cash equivalents and marketable securities $ 1,128,441 $ 1,042,462
Restricted cash and cash equivalents (VIE) (Note 5) 58,420 78,910
Accounts receivable, net 182,229 173,838
Inventories 71,799 57,207
Property and equipment, net 687,613 697,715
Intangible assets and goodwill 334,724 334,724
Other assets 141,612 113,731
Total assets $ 2,604,838 $ 2,498,587

Liabilities and Shareholders’ Equity
Other liabilities $ 434,142 $ 426,482
Deferred tax liability 133,270 110,439
Accrued restructuring expense 7,237 15,358
Deferred revenues 15,806 26,010
Capital leases 49,491 58,468
Construction financing lease obligation 468,500 473,043
Senior secured term loan 297,751 295,159
Shareholders’ equity 1,198,641 1,093,628
Total liabilities and shareholders’ equity $ 2,604,838 $ 2,498,587

Common shares outstanding 248,029 246,307
Note 1 : Cost of product revenues in the nine months ended September 30, 2016 includes the second and final $13.9 million commercial milestone that was earned by CFFT in the first quarter of 2016 related to sales of ORKAMBI.

Note 2: The company excludes restructuring expense (income) from its non-GAAP income (loss) attributable to Vertex. In the three and nine months ended September 30, 2016 and 2015, "Real estate restructuring costs and income" consisted of restructuring charges related primarily to the company’s relocation from Cambridge to Boston, Massachusetts.

Note 3: In the three and nine months ended September 30, 2016 and 2015, "HCV related revenues and costs" included net product revenues from Incivek, royalty revenues from Incivo, HCV collaborative revenues and operating costs and expenses related to HCV. The Company withdrew Incivek from the market in the United States in 2014.

Note 4: In the three months ended September 30, 2016, "Other adjustments" was primarily attributable to payments for collaborations. In the nine months ended September 30, 2016, "Other adjustments" was primarily attributable to a $58.5 million increase in the fair value of contingent milestone payments and royalties payable by Vertex to Parion due to the Phase 2 study meeting its primary safety endpoint and payments for collaborations and the acquisition of certain early stage assets.

Note 5: The company consolidates the financial statements of two of its collaborators as variable interest entities ("VIEs") as of September 30, 2016 and December 31, 2015. These VIEs are consolidated because Vertex has licensed the rights to develop the company’s collaborators’ most significant intellectual property assets. The company’s interest and obligations with respect to these VIEs’ assets and liabilities are limited to those accorded to the company in its collaboration agreements with these collaborators. Restricted cash and cash equivalents (VIE) reflects the VIEs’ cash and cash equivalents, which Vertex does not have any interest in and which will not be used to fund the collaboration. Each reporting period Vertex estimates the fair value of the contingent milestone payments and royalties payable by Vertex to these collaborators. Any increase in the fair value of these contingent milestone and royalty payments results in a decrease in net income attributable to Vertex (or an increase in net loss attributable to Vertex) on a dollar-for-dollar basis. The fair value of contingent milestone and royalty payments is evaluated each quarter and any change in the fair value is reflected in the company’s statement of operations.

INDICATION AND IMPORTANT SAFETY INFORMATION FOR KALYDECO (ivacaftor)

KALYDECO (ivacaftor) is a prescription medicine used for the treatment of cystic fibrosis (CF) in patients age 2 years and older who have one of the following mutations in their CF gene: G551D, G1244E, G1349D, G178R, G551S, S1251N, S1255P, S549N, S549R, or R117H. KALYDECO is not for use in people with CF due to other mutations in the CF gene. KALYDECO is not effective in patients with CF with two copies of the F508del mutation (F508del/F508del) in the CF gene. It is not known if KALYDECO is safe and effective in children under 2 years of age.

Patients should not take KALYDECO if they are taking certain medicines or herbal supplements such as: the antibiotics rifampin or rifabutin; seizure medications such as phenobarbital, carbamazepine, or phenytoin; or St. John’s wort.

Before taking KALYDECO, patients should tell their doctor if they: have liver or kidney problems; drink grapefruit juice, or eat grapefruit or Seville oranges; are pregnant or plan to become pregnant because it is not known if KALYDECO will harm an unborn baby; and are breastfeeding or planning to breastfeed because is not known if KALYDECO passes into breast milk.

KALYDECO may affect the way other medicines work, and other medicines may affect how KALYDECO works. Therefore the dose of KALYDECO may need to be adjusted when taken with certain medications. Patients should especially tell their doctor if they take antifungal medications such as ketoconazole, itraconazole, posaconazole, voriconazole, or fluconazole; or antibiotics such as telithromycin, clarithromycin, or erythromycin.

KALYDECO can cause dizziness in some people who take it. Patients should not drive a car, use machinery, or do anything that needs them to be alert until they know how KALYDECO affects them. Patients should avoid food containing grapefruit or Seville oranges while taking KALYDECO.

KALYDECO can cause serious side effects including:

High liver enzymes in the blood have been reported in patients receiving KALYDECO. The patient’s doctor will do blood tests to check their liver before starting KALYDECO, every 3 months during the first year of taking KALYDECO, and every year while taking KALYDECO. For patients who have had high liver enzymes in the past, the doctor may do blood tests to check the liver more often. Patients should call their doctor right away if they have any of the following symptoms of liver problems: pain or discomfort in the upper right stomach (abdominal) area; yellowing of their skin or the white part of their eyes; loss of appetite; nausea or vomiting; or dark, amber-colored urine.

Abnormality of the eye lens (cataract) has been noted in some children and adolescents receiving KALYDECO. The patient’s doctor should perform eye examinations prior to and during treatment with KALYDECO to look for cataracts. The most common side effects include headache; upper respiratory tract infection (common cold), which includes sore throat, nasal or sinus congestion, and runny nose; stomach (abdominal) pain; diarrhea; rash; nausea; and dizziness.

These are not all the possible side effects of KALYDECO.

Please click here to see the full Prescribing Information for KALYDECO (ivacaftor).

INDICATION AND IMPORTANT SAFETY INFORMATION FOR ORKAMBI (lumacaftor/ivacaftor) TABLETS

ORKAMBI is a prescription medicine used for the treatment of cystic fibrosis (CF) in patients age 6 years and older who have two copies of the F508del mutation (F508del/F508del) in their CFTR gene. ORKAMBI should only be used in these patients. It is not known if ORKAMBI is safe and effective in children under 6 years of age.

Patients should not take ORKAMBI if they are taking certain medicines or herbal supplements, such as: the antibiotics rifampin or rifabutin; the seizure medicines phenobarbital, carbamazepine, or phenytoin; the sedatives/anti-anxiety medicines triazolam or midazolam; the immunosuppressant medicines everolimus, sirolimus, or tacrolimus; or St. John’s wort.

Before taking ORKAMBI, patients should tell their doctor if they: have or have had liver problems; have kidney problems; have had an organ transplant; are using birth control (hormonal contraceptives, including oral, injectable, transdermal or implantable forms). Hormonal contraceptives should not be used as a method of birth control when taking ORKAMBI. Patients should tell their doctor if they are pregnant or plan to become pregnant (it is unknown if ORKAMBI will harm the unborn baby) or if they are breastfeeding or planning to breastfeed (it is unknown if ORKAMBI passes into breast milk).

ORKAMBI may affect the way other medicines work and other medicines may affect how ORKAMBI works. Therefore, the dose of ORKAMBI or other medicines may need to be adjusted when taken together. Patients should especially tell their doctor if they take: antifungal medicines such as ketoconazole, itraconazole, posaconazole, or voriconazole; or antibiotics such as telithromycin, clarithromycin, or erythromycin.

When taking ORKAMBI, patients should tell their doctor if they stop ORKAMBI for more than 1 week as the doctor may need to change the dose of ORKAMBI or other medicines the patient is taking. It is unknown if ORKAMBI causes dizziness. Patients should not drive a car, use machinery, or do anything requiring alertness until the patient knows how ORKAMBI affects them.

ORKAMBI can cause serious side effects including:

High liver enzymes in the blood, which can be a sign of liver injury, have been reported in patients receiving ORKAMBI. The patient’s doctor will do blood tests to check their liver before they start ORKAMBI, every three months during the first year of taking ORKAMBI, and annually thereafter. The patient should call the doctor right away if they have any of the following symptoms of liver problems: pain or discomfort in the upper right stomach (abdominal) area; yellowing of the skin or the white part of the eyes; loss of appetite; nausea or vomiting; dark, amber-colored urine; or confusion.

Respiratory events such as shortness of breath or chest tightness were observed in patients when starting ORKAMBI. If a patient has poor lung function, their doctor may monitor them more closely when starting ORKAMBI.

An increase in blood pressure has been seen in some patients treated with ORKAMBI. The patient’s doctor should monitor their blood pressure during treatment with ORKAMBI.

Abnormality of the eye lens (cataract) has been noted in some children and adolescents receiving ORKAMBI and ivacaftor, a component of ORKAMBI. For children and adolescents, the patient’s doctor should perform eye examinations prior to and during treatment with ORKAMBI to look for cataracts.

The most common side effects of ORKAMBI include: shortness of breath and/or chest tightness; upper respiratory tract infection (common cold), including sore throat, stuffy or runny nose; gastrointestinal symptoms including nausea, diarrhea, or gas; rash; fatigue; flu or flu-like symptoms; increase in muscle enzyme levels; and irregular, missed, or abnormal menstrual periods and heavier bleeding.

Please click here to see the full Prescribing Information for ORKAMBI.

On October 24, 2016 Cellectar Biosciences, Inc. (Nasdaq:CLRB) (the "company"), an oncology-focused, clinical stage biotechnology company, reported that it will be presenting data from its Phase 1 clinical trial of CLR 131 in relapsed or refractory multiple myeloma at a poster session of the American Society of Hematology (ASH) (Free ASH Whitepaper) Meeting and Exposition in San Diego (Press release, Cellectar Biosciences, OCT 24, 2016, View Source [SID1234515977]).

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Poster: #4485, "Phase 1, Open-Label, Dose Escalation Study of I-131-CLR1404 in Patients with Relapsed or Refractory Multiple Myeloma (RRMM)"
Presenter: Sikander Ailawadhi, MD, vice chair, clinical practice, Division of Hematology/Oncology, Department of Medicine at the Mayo Clinic, Florida,
Session/Date/Time: #653 — "Myeloma: Therapy, Excluding Transplantation,"
December 5, 2016, 6:00pm — 8:00pm PT
Location: San Diego Convention Center in Hall GH

"The ASH (Free ASH Whitepaper) conference is an important and prestigious event that provides a unique opportunity to share some of the encouraging data from our ongoing Phase 1 study of CLR 131 for the treatment of relapsing or refractory multiple myeloma," said Jim Caruso, president and CEO of Cellectar Biosciences. "Relapse/refractory multiple myeloma is a difficult to manage hematologic cancer that continues to require new therapeutic approaches and CLR 131 potentially offers patients a novel treatment alternative."

Abstracts are expected to be available at www.hematology.org on November 3, 2016 at 9:00 AM ET. In addition, the abstracts will be published online in the December 3, 2016 supplemental volume of Blood.

About CLR 131
CLR 131 is an investigational compound under development for a range of hematologic malignancies. It is currently being evaluated in a Phase I clinical trial in patients with relapsed or refractory multiple myeloma. The company plans to initiate a Phase II clinical study to assess efficacy in a range of B-cell malignancies in the first half of 2017. Based upon pre-clinical and interim Phase I study data, treatment with CLR 131 provides patients with a novel approach to treating hematological diseases and may provide patients with an improvement in progression-free survival and overall quality of life. CLR 131 utilizes the company’s patented PDC tumor targeting delivery platform to deliver a cytotoxic radioisotope, iodine-131 directly to tumor cells. The FDA has granted Cellectar an orphan drug designation for CLR 131.

About Phospholipid Drug Conjugates (PDCs)
Cellectar’s product candidates are built upon its patented cancer cell-targeting delivery and retention platform of optimized phospholipid ether-drug conjugates (PDCs). Its phospholipid ether (PLE) carrier platform was deliberately designed to be coupled with a variety of payloads to facilitate both therapeutic and diagnostic applications. The basis for selective tumor targeting of our PDC compounds lies in the differences between the plasma membranes of cancer cells compared to those of normal cells. Cancer cell membranes are highly enriched in lipid rafts, which are glycolipoprotein microdomains of the plasma membrane of cells that contain high concentrations of cholesterol and sphingolipids, and serve to organize cell surface and intracellular signaling molecules. PDCs have been tested in over 70 different xenograft models of cancer.

About Relapsed or Refractory Multiple Myeloma
Multiple myeloma is the second most common blood or hematologic cancer with approximately 30,000 new cases in the United States every year. It affects a specific type of blood cells known as plasma cells. Plasma cells are white blood cells that produce antibodies to help fight infections. While treatable for a time, multiple myeloma is incurable and almost all patients will relapse or the cancer will become resistant/refractory to current therapies.

As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on November 15, 2013, CTI BioPharma Corp. (the "Company") entered into a Development, Commercialization and License Agreement (as amended, the "License Agreement") with Baxter International Inc., Baxter Healthcare Corporation and Baxter Healthcare SA (collectively, "Baxter") on November 14, 2013 (Filing, 8-K, CTI BioPharma, OCT 24, 2016, View Source [SID1234516747]). Baxalta Incorporated and its affiliates (collectively, "Baxalta") were assigned Baxter’s rights and obligations under the License Agreement. Pursuant to the License Agreement, among other things, the Company granted to Baxalta, as successor to Baxter, a license with respect to pacritinib, Baxalta and the Company agreed to collaborate as to the development and commercialization of pacritinib, and the Company obtained the contingent right to receive certain milestone and royalty payments. As previously disclosed in a Current Report on Form 8-K filed with the SEC on June 9, 2015, the License Agreement was amended on June 5, 2015. Baxalta was subsequently acquired by Shire plc ("Shire"). As of June 3, 2016, Shire beneficially owned approximately 5.5% of the Company’s common stock.
As previously disclosed in a Current Report on Form 8-K filed with the SEC on September 19, 2016, on September 19, 2016, the Company entered into a letter agreement (the "First Letter Agreement") amending the License Agreement. The First Letter Agreement provided that if the Company and Baxalta were unable to negotiate and execute within 30 days (the "Letter Agreement Deadline") a definitive agreement reflecting the terms contained within the non-binding term sheet agreed to between the parties on September 19, 2016 (the "Term Sheet") regarding the termination of the License Agreement and the return of the asset, then for purposes of computing any applicable termination periods and deadlines under Section 15.2 of the License Agreement, September 13, 2016 would have been deemed the effective date of the notice of termination of the License Agreement received by the Company from Baxalta on September 13, 2016. On October 19, 2016, the Company and Baxalta entered into a letter agreement (the "Second Letter Agreement") extending the Letter Agreement Deadline to 5:00pm Eastern Time on October 21, 2016.
Prior to the Letter Agreement Deadline, on October 21, 2016, the Company and Baxalta entered into an Asset Return and Termination Agreement (the "Termination Agreement"). Pursuant to the Termination Agreement, the Company has reacquired worldwide rights for the development and commercialization of pacritinib, and the License Agreement has been terminated in its entirety, provided that certain customary provisions in the License Agreement, including those pertaining to confidentiality and indemnification, survive termination. In addition, Baxalta will pay to the Company a one-time cash payment in the amount of approximately $10.3 million as reimbursement for certain expenses incurred or to be incurred.
The Company in exchange has agreed to provide a one-time payment to Baxalta, upon the first regulatory approval or any pricing and reimbursement approvals of a product containing pacritinib, in the amount of approximately $10.3 million which represents certain amounts paid by Baxalta for the benefit of the pacritinib program manufacturing efforts. The Company has also agreed not to transfer, license, sublicense or otherwise grant rights with respect to intellectual property of pacritinib unless the transferee/licensee/sublicensee agrees to be bound by the terms of the Termination Agreement. The Company has not acquired a trademark owned by Shire.
The foregoing descriptions of the Second Letter Agreement and Termination Agreement do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Second Letter Agreement and Termination Agreement, copies of which are attached hereto as Exhibit 10.1 and 10.2 and incorporated herein by reference.

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On October 24, 2016 Bristol-Myers Squibb’s (NYSE:BMY) reported that Coast 2 Coast 4 Cancer has raised more than $1,050,000 to support Stand Up To Cancer’s collaborative cancer research programs (Press release, Bristol-Myers Squibb, OCT 24, 2016, View Source [SID1234515983]). In this third year of the relay, six teams of BMS employees — with 80 employees in total — set out on September 7 to bike 2,800 miles in 21 days from the Oregon Coast to the New Jersey shore to support Stand Up To Cancer, whose collaborative "Dream Teams" of scientific researchers are working together to accelerate cancer research and to provide innovative treatments to patients faster. Bristol-Myers Squibb matched all money raised by the cyclists, dollar-for-dollar, up to $500,000.

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"Our teams of cyclists demonstrated what drives all of us at Bristol-Myers Squibb every day: to challenge ourselves individually and together to fight cancer. They woke before dawn in towns far from home to bike along roads stretching across the continent with one thing in mind: to raise money and awareness to accelerate cancer research," said Chris Boerner, PhD, president and head of U.S. commercial operations, Bristol-Myers Squibb, who rode several legs of this year’s relay himself. "I’m deeply proud of these riders, many of whom have never seriously biked before. Coast 2 Coast 4 Cancer is an enormously meaningful event for us all because we are devoted to fighting for patients."

One of this year’s riders, Whitney Melton, reflected, "There were moments on the road that were very hard to push through, to be honest. We all got tired and we all had to rely on our teammates to get us over that next hill in 90 degree weather. But every time, we prevailed and it was because of the inspiring examples of people facing cancer. We rode for them."

"The Coast 2 Coast 4 Cancer Ride is so moving because of the deeply personal commitment these 80 individuals make, one of whom is a cancer patient," said Katie Couric, Yahoo Global News anchor and Stand Up To Cancer co-founder. "Stand Up To Cancer is about taking collaboration to new levels. Working as teams, they rode in honor of friends and family who’ve contended with this terrible disease. The monies pledged in connection with the ride — and generously matched by Bristol-Myers Squibb — will fund innovative research, enabling more cancer patients to become long-term survivors. On behalf of all of us at Stand Up, I want to thank these Bristol-Myers Squibb employees and everyone at the company for this extraordinary grassroots support of our efforts."

On October 24, 2016 PharmaCyte Biotech, Inc. (OTCQB:PMCB), a clinical stage biotechnology company focused on developing targeted treatments for cancer and diabetes using its signature live-cell encapsulation technology, Cell-in-a-Box,reported that Manuel Hidalgo, MD, PhD has agreed to serve as the Principal Investigator (PI) for PharmaCyte’s clinical trial in patients with locally advanced, inoperable pancreatic cancer (LAPC) (Press release, PharmaCyte Biotech, OCT 24, 2016, View Source [SID1234515987]). Dr. Hidalgo is an internationally respected oncologist and a recognized authority in the treatment of pancreatic cancer. Currently, he serves as Clinical Director of the Leon V. & Marilyn L. Rosenberg Clinical Cancer Center and Chief of the Division of Hematology-Oncology at the prestigious Beth Israel Deaconess Medical Center in Boston and is a member of PharmaCyte’s Medical and Scientific Advisory Board.

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Commenting on his selection, Dr. Hidalgo said, "I am pleased to have been selected to be the PI of this important clinical trial, having been a part of its overall design. I have been involved in numerous successful clinical trials and will be drawing on that experience in this one. I believe that the Cell-in-Box plus low dose ifosfamide combination chemotherapy may well prove to be of great value for the development of new therapies for pancreas and other solid tumor cancers. This novel technology has exceedingly broad application. I am looking forward to working with other clinical oncologists in the U.S. and in Europe to insure that PharmaCyte’s therapy meets the critical unmet medical need the study is designed to address."

PharmaCyte’s Chief Executive Officer, Kenneth L. Waggoner, also commented, "As we close in on an engagement date with the FDA, we are extremely pleased and fortunate that Dr. Hidalgo has agreed to assume the important position of PI for our clinical trial in patients with LAPC. The available treatments of this disease are only marginally effective. Dr. Hidalgo is well known around the world as an expert in successfully developing therapies for pancreatic cancer, the third deadliest of all forms of cancer. Dr. Hidalgo’s acceptance of the role of PI for our clinical trial lends credence to our belief that PharmaCyte’s therapy will be successful in treating patients with LAPC."

In his role as PI, or "general supervisor" for how the trial is conducted, Dr. Hidalgo will be responsible for ensuring that all of the clinical trial study sites conduct their studies in accordance with the clinical trial protocol and that all associated procedures and regulations are followed by those study sites. As PI, Dr. Hidalgo will also play a major role in developing the final clinical trial report that will be presented to the FDA, which summarizes and analyzes the trial results from all of the study sites.

PharmaCyte’s clinical trial in patients with LAPC is designed to meet a clear unmet medical need for those whose cancer no longer responds after 4-6 months of treatment with the combination of Abraxane plus gemcitabine. The study will be open-label and multi-site in nature, with sites in the U.S. and Europe. Patients with LAPC will be randomized equally into two groups. One group will receive gemcitabine chemotherapy alone, and the other group will receive PharmaCyte’s pancreatic cancer therapy (encapsulated genetically modified live human cells that can activate the cancer prodrug ifosfamide plus low doses of the prodrug to eliminate side effects from the chemotherapy). In addition to comparing the anticancer activity and safety of the two therapies, a major aspect of the trial will be to determine if, and how well, PharmaCyte’s therapy can shrink inoperable tumors so that they become operable.