On August 9, 2016 Myriad Genetics, Inc. (NASDAQ:MYGN) reported financial results for its fiscal fourth-quarter 2016, provided an update on recent business highlights and provided fiscal first-quarter 2017 and fiscal year 2017 financial guidance (Press release, Myriad Genetics, AUG 9, 2016, View Source [SID:1234514554]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Fourth-quarter performance met our expectations, and we continue to make substantial progress on advancing our product portfolio and growing Myriad into a larger, more diversified personalized medicine company," said Mark C. Capone, president and CEO of Myriad. "Myriad is on track to deliver on its five year strategic goals. We continue to be the worldwide leader in hereditary cancer testing, and our portfolio diversification efforts are accelerating with substantive volume growth and reimbursement for new commercial products, pivotal validations for our pipeline products, the acquisitions of Assurex Health and Sividon, and significant international expansion. Given the multibillion dollar market opportunity for our portfolio, we remain confident that we can deliver better health outcomes for patients and significant long-term value for shareholders."

Financial Highlights

Below are tables summarizing the financial results and revenue by product class for our fiscal fourth-quarter 2016 and full fiscal-year 2016:

Revenue
Fiscal Fourth-Quarter Fiscal Year
($ in millions) 2016 2015 % Change 2016 2015 % Change
Molecular diagnostic testing revenue

Hereditary cancer testing revenue $ 152.8 $ 163.8 (7 %) $ 632.3 $ 638.3 (1 %)

Vectra DA testing revenue 12.7 11.8 8 % 47.8 43.7 9 %

Prolaris testing revenue 3.5 0.7 400 % 11.3 2.1 438 %

Other testing revenue 4.8 2.5 92 % 14.3 11.4 25 %

Total molecular diagnostic testing revenue 173.8 178.8 (3 %) 705.7 695.5 2 %

Pharmaceutical and clinical service revenue 12.7 11.1 14 % 48.1 27.6 74 %

Total Revenue $ 186.5 $ 189.9 (2 %) $ 753.8 $ 723.1 4 %

Income Statement
Fiscal Fourth-Quarter Fiscal Year
($ in millions) 2016 2015 % Change 2016 2015 % Change
Total Revenue $ 186.5 $ 189.9 (2 %) $ 753.8 $ 723.1 4 %

Gross Profit 146.5 152.4 (4 %) 596.5 575.7 4 %
Gross Margin 78.6 % 80.3 % 79.1 % 79.6 %

Operating Expenses 110.8 116.2 (5 %) 429.7 441.5 (3 %)

Operating Income 35.7 36.2 (1 %) 166.8 134.2 24 %
Operating Margin 19.1 % 19.1 % 22.1 % 18.6 %

Adjusted Operating Income 39.0 48.2 (19 %) 179.5 167.3 7 %
Adjusted Operating Margin 20.9 % 25.4 % 23.8 % 23.1 %

Net Income 23.4 18.7 25 % 125.3 80.2 56 %

Diluted EPS 0.32 0.26 23 % 1.71 1.08 58 %

Adjusted EPS $ 0.36 $ 0.41 (12 %) $ 1.63 $ 1.45 12 %

Business Highlights

myRisk Hereditary Cancer
Myriad signed a new agreement with Blue Shield of California, retaining Myriad’s previous network status. Myriad ended the quarter with 65 percent of revenue under long-term contracts for its hereditary cancer business.
A new study in the New England Journal of Medicine demonstrated that in patients with advanced prostate cancer, the rate of deleterious mutations in myRisk genes was approximately 12 percent. This is consistent with other cancers that have genetic testing guidelines. Every year in the United States approximately 25,000 patients are diagnosed with advanced prostate cancer.
Myriad made the first content additions to myRisk adding three additional genes including GREMM1, POLE and POLD-1. These genes were recently added to the NCCN guidelines on genetic testing based upon their role in hereditary colon cancer.
Myriad announced the ability to customize the myRisk panel for genetics experts who are interested in ordering a subset of the myRisk genes on the full panel.

Vectra DA
Vectra DA volumes were up five percent year-over-year in the fiscal fourth-quarter with approximately 41,300 tests performed.
Myriad signed three additional private payer contracts for Vectra DA that collectively cover approximately one million lives in the United States.
At the European League Against Rheumatism (EULAR) annual meeting, Myriad presented new data showing the ability of Vectra DA to predict sustained clinical remission after discontinuation of Humira. In patients with a low Vectra DA score, 57 percent had sustained clinical remission following discontinuation of Humira. In patients with a high Vectra DA score, 60 percent experienced flare within one year of discontinuation of Humira.
In a second study presented at EULAR of 180 treatment naïve patients, the Vectra DA score was a statistically significant predictor of clinical remission with 12-month remission rates meaningfully higher in patients with a greater reduction in Vectra DA score versus those with a smaller reduction.

Prolaris
Prolaris volume increased 91 percent year-over-year and 11 percent sequentially with approximately 4,750 tests ordered.
At the American Urological Association annual meeting, Myriad presented the first study validating Prolaris exclusively in a low-risk only patient population. In 440 patients with a Gleason score of six or less, patients with a high Prolaris score had three times the rate of prostate specific mortality and eight times the rate of biochemical recurrence relative to patients with a low Prolaris score.
Myriad signed three additional private payer contracts for Prolaris that collectively cover approximately one million lives in the United States.

Companion Diagnostics
Myriad presented data from the first prospective validation of myChoice HRD in concert with TESARO’s NOVA study. In the study, which evaluated platinum-sensitive ovarian cancer patients, myChoice HRD positive patients receiving niraparib demonstrated a 9.1 month increase in progression free survival relative to patients receiving placebo.

Sividon Diagnostics Acquisition
Myriad completed the acquisition of Sividon Diagnostics during the fiscal fourth quarter and gained United States and Chinese distribution rights to EndoPredict, a best-in-class breast cancer prognostic test. Myriad announced plans to launch EndoPredict in the United States in the second half of fiscal year 2017.
A large head-to-head study comparing EndoPredict with Oncotype Dx was recently published in the Journal of the National Cancer Institute. The study, which evaluated 928 women from the TransATAC study, showed that EndoPredict "markedly outperformed" Oncotype Dx with a prognostic power that was more than four times greater. Also, EndoPredict low-risk patients had a 10-year rate of distant metastases of 5.8 percent versus low risk Oncotype Dx patients at 10.1 percent.

Assurex Health Acquisition
In August, Myriad signed a definitive agreement to acquire Assurex Health, a personalized medicine company providing treatment decision support to healthcare providers for their patients with mental health disorders. Assurex’s lead product, GeneSight Psychotropic, evaluates 12 genes known to play a significant role in psychotropic drug response and is used in patient treatment selection. Assurex performed over 150,000 GeneSight tests in Myriad’s fiscal year 2016 and generated more than $60 million in total revenue. The acquisition is subject to the satisfaction of customary closing conditions.

International
International revenues were up 93 percent year-over-year in the fourth quarter and accounted for approximately six percent of total product revenue in the quarter.
Myriad recently signed an agreement with BMI Healthcare in the United Kingdom covering Myriad’s complete testing portfolio including EndoPredict, Prolaris, Tumor BRACAnalysis CDx and hereditary cancer testing. BMI Healthcare is the largest private hospital group comprised of 59 hospitals and clinics across the UK, servicing 1,500,000 outpatient visits per year.

Share Repurchase
During the quarter, the Company repurchased approximately 1.6 million shares, or $55 million, of common stock under our share repurchase program and ended the quarter with approximately $195 million remaining on our current share repurchase authorization.
Fiscal Year 2017 and Fiscal First-Quarter 2017 Financial Guidance
Below is a table summarizing Myriad’s fiscal year 2017 and fiscal first-quarter 2017 financial guidance:

Revenue Adjusted
Earnings Per
Share GAAP Diluted
Earnings Per
Share
Fiscal Year 2017 $740-$760 million $1.00-$1.10 $0.47 – $0.57

Fiscal First-Quarter 2017 $168-$170 million $0.25-$0.27 $0.14 – $0.16

Myriad’s fiscal year 2017 financial guidance includes the impact of the Assurex Health acquisition which Myriad expects to close at the end of the fiscal first-quarter 2017.

These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release. The Company will provide further details on its business outlook during its conference call today to discuss the fiscal fourth-quarter financial results and fiscal year 2017 and fiscal first-quarter 2017 financial guidance.

On August 9, 2016 Moleculin Biotech, Inc., (NASDAQ: MBRX) ("Moleculin" or the "Company"), a preclinical and clinical-stage pharmaceutical company focused on the development of anti-cancer drug candidates, some of which are based on license agreements with The University of Texas System on behalf of the M.D. Anderson Cancer Center, reported it has agreed to extend through August of 2017 and expand its sponsored research agreement with MD Anderson Cancer Center (MD Anderson), the world’s largest cancer research facility (Press release, Moleculin, AUG 9, 2016, View Source [SID1234519562]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Moleculin’s Chairman and CEO, Walter Klemp, commented, "The research we have sponsored to date at MD Anderson has generated some very promising new technologies, including WP1066, a novel small molecule that is an effective stimulator of patients’ natural immune response and inducer of tumor cell death in the in vivo models of even the most difficult to treat cancers." He added, "We are now extending and expanding this agreement in light of new indications that we may be able to improve upon the WP1066 technology significantly."

Dr. Waldemar Priebe, Professor of Medicinal Chemistry at MD Anderson and Scientific Advisor to Moleculin, a shareholder and inventor of licensed technology, explained, "We are very excited about the potential for orally administered WP1066 in clinic, and we are now actively investigating expansion of clinical uses of Moleculin’s licensed therapeutics and researching their methods of administration while preserving drugability of this and similar compounds. For example, the injectable/iv administered versions of WP1066 would greatly expand its clinical applications and commercial potential. The continued research sponsored by Moleculin could make this possible."

Mr. Klemp concluded, "Moleculin’s continuing research sponsorship also facilitates access to grant funding from both public and private sources, and we are pleased that the expansion of this critical research collaboration will provide access to cutting edge research capability and potentially create more patentable discoveries."

On August 9, 2016 Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) report financial results for its fiscal 2016 third quarter ended June 30, 2016 (Press release, Arrowhead Research Corporation, AUG 9, 2016, View Source [SID:1234514413]). The company is hosting a conference call at 4:30 p.m. EDT to discuss results.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Conference Call and Webcast Details

Investors may access a live audio webcast on the Company’s website at View Source For analysts that wish to participate in the conference call, please dial 855-215-6159 or 315-625-6887 and enter Conference ID 57990579.

A replay of the webcast will be available on the company’s website approximately two hours after the conclusion of the call and will remain available for 90 days. An audio replay will also be available approximately two hours after the conclusion of the call and will be available for 3 days. To access the audio replay, dial 404-537-3406 and enter Conference ID 57990579.

Fiscal 2016 Third Quarter and Recent Company Highlights

Corporate Events

Today priced an at-the-market private offering of $45 million of common stock
ARC-520

Presented promising ARC-520 hepatitis B data at The International Liver Congress 2016
Expanded the MONARCH study to include additional sites, investigators, and cohorts, including patients with HBV and hepatitis Delta virus co-infection
ARC-521

Initiated a Phase 1/2 study of ARC-521 designed to evaluate the safety, tolerability, and pharmacokinetics of single doses of ARC-521 in healthy volunteers and the safety, tolerability, and antiviral activity of single and multiple doses of ARC-521 in patients with chronic HBV. Two of a planned six normal volunteer cohorts have dosed, with the third cohort expected to dose this week
ARC-AAT

Completed enrollment in Part A of a Phase 1 study in healthy volunteers
Received approval from regulatory authorities in Canada, Ireland, and Sweden to begin a Phase 2 study designed to determine the effect of multiple doses of ARC-AAT on intrahepatic alpha-1 antitrypsin levels as evidenced by changes in liver biopsy in patients with alpha-1 antitrypsin deficiency
Platform and Early Pipeline

Presented promising new preclinical data on ARC-LPA for cardiovascular diseases and ARC-HIF2 for renal cell carcinoma showing that important advancements are being made to Arrowhead’s delivery platforms to include subcutaneous administration and extra-hepatic targeting capabilities
Selected Fiscal 2016 Third Quarter Financial Results

ARROWHEAD PHARMACEUTICALS, INC.
CONSOLIDATED CONDENSED FINANCIAL INFORMATION (unaudited)

Three Months Ended
June 30,
Nine Months Ended
June 30,
OPERATING SUMMARY
2016 2015 2016 2015

REVENUE $ 39,583 $ 123,750 $ 127,083 $ 338,250
OPERATING EXPENSES
Research and development 9,423,195 7,490,400 29,782,854 36,877,925
Acquired in-process research and development - - - 10,142,786
Salaries and payroll-related costs 4,113,262 3,570,531 12,281,841 10,262,799
General and administrative expenses 2,275,628 1,829,393 8,045,571 5,612,219
Stock-based compensation 2,750,785 2,486,074 7,547,967 6,706,009
Depreciation and amortization 818,200 741,058 2,416,461 1,480,656
TOTAL OPERATING EXPENSES 19,381,070 16,117,456 60,074,694 71,082,394
OPERATING LOSS (19,341,487 ) (15,993,706 ) (59,947,611 ) (70,744,144 )
OTHER INCOME/(EXPENSE), PROVISION FOR INCOME TAXES (79,256 ) 57,653 446,595 3,546,398
NET LOSS $ (19,420,743 ) $ (15,936,053 ) $ (59,501,016 ) $ (67,197,746 )

EARNINGS PER SHARE (BASIC AND DILUTED): $ (0.32 ) $ (0.27 ) $ (1.00 ) $ (1.19 )
WEIGHTED AVERAGE SHARES OUTSTANDING 59,966,955 59,492,867 59,764,129 56,631,297

FINANCIAL POSITION SUMMARY
June 30, September 30,
2016 2015
CASH AND CASH EQUIVALENTS 43,616,543 81,214,354
SHORT-TERM INVESTMENTS 1,030,556 17,539,902
TOTAL CASH RESOURCES (CASH, CASH EQUIVALENTS AND INVESTMENTS) 44,647,099 98,754,256
OTHER ASSETS 40,886,397 33,513,658
TOTAL ASSETS 85,533,496 132,267,914
TOTAL LIABILITIES 26,108,330 22,646,280
TOTAL STOCKHOLDERS’ EQUITY 59,425,166 109,621,634
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 85,533,496 132,267,914

SHARES OUTSTANDING 60,429,405 59,544,677
PROFORMA SHARES OUTSTANDING (INCLUDING CONVERSION OF PREFERRED SHARES) 63,100,395 62,215,667

On August 9, 2016 Ohr Pharmaceutical, Inc. (Nasdaq:OHRP), an ophthalmology research and development company, reported results for its third quarter ended June 30, 2016 (Press release, Ohr Pharmaceutical, AUG 9, 2016, View Source [SID:1234514559]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The start of the Phase 3 registration program for Squalamine during the quarter marked a significant milestone in our overall development program for our lead drug candidate," said Jason Slakter, MD, Chief Executive Officer of Ohr. "There remains a significant need for new treatment options that can enhance visual acuity gains in wet AMD and provide a non-invasive treatment option. We believe that Squalamine, when administered as part of a combination therapy, meets these needs and has the potential to set a new standard of care. We look forward to an exciting second half of calendar 2016."

Third Quarter Highlights

Commenced enrollment in the Phase 3 clinical development program to investigate Squalamine lactate ophthalmic solution, 0.2% ("Squalamine", also known as OHR-102) as a treatment to improve visual acuity for patients with wet AMD.
The Phase 3 program includes two clinical trials designed as double-masked, placebo-controlled, multicenter, international studies of Squalamine administered topically twice a day in patients with newly diagnosed wet AMD, in combination with Lucentis injections.
The primary endpoint in both studies is a measurement of visual acuity gain at nine months, which is the most clinically meaningful endpoint for wet AMD patients. Subjects will be followed to two years for safety.
Appointed David M. Brown, MD to serve as the chair of the Steering Committee for the Phase 3 clinical program of Squalamine in wet-AMD.
Dr. Brown is Clinical Professor of Ophthalmology at Baylor College of Medicine, vice-chair for research at the Blanton Eye Institute, Houston Methodist Hospital, and partner at Retina Consultants of Houston.
Completed an in vivo study demonstrating sustained pharmacological anti-angiogenic activity of OHR3031, an angiogenesis inhibitor
Single intravitreal injection of microparticles containing OHR3031 produced clinically meaningful and statistically significant efficacy six weeks after dose administration in a rabbit model of laser-induced CNV.
Dose response was observed in the reduction of average CNV lesion areas with OHR3031 compared to vehicle treatment, with the highest dose exhibiting a statistically significant effect at Week 6.
Magnitude of difference in average CNV lesion size for the high dose of OHR-3031 compared to vehicle treatment at 6 weeks was comparable to that seen at 2 weeks with a currently approved anti-VEGF agent conducted in a previous study.
OHR3031 was developed using SKS sustained release technology
Presented two posters on the Squalamine Phase 2 IMPACT study and OHR3031 in vivo studies at the Association for Research in Vision and Ophthalmology (ARVO) Conference in May.
Financial Results for Third Quarter ended June 30, 2016

For the third quarter ended June 30, 2016, the Company reported a net loss of approximately $7.7 million, or ($0.24) per share, compared to a net loss of approximately $3.3 million, or ($0.11) per share in the same period of 2015.
For the third quarter ended June 30, 2016, total operating expenses were approximately $7.6 million, consisting of approximately $1.7 million in general and administrative expenses, $5.6 million in research and development expenses, and $0.3 million in depreciation and amortization. This compares to total operating expenses in the same period of 2015 of approximately $3.3 million, consisting of $1.6 million in general and administrative expenses, $1.5 million in research and development expenses, and $0.3 million in depreciation and amortization.
At June 30, 2016, the Company had cash and cash equivalents of approximately $17.6 million. This compares to cash and equivalents of approximately $28.7 million at September 30, 2015.
Financial Results for the Nine-Months ended March 31, 2016

For the nine months ended June 30, 2016, the Company reported a net loss of approximately $19.1 million, or ($0.61) per share, compared to a net loss of approximately $11.3 million, or ($0.41) per share in the same period of 2015.
For the nine months ended June 30, 2016, total operating expenses were approximately $17.8 million, consisting of $5.8 million in general and administrative expenses, $11.8 million of research and development expenses, and $0.9 million in depreciation and amortization. This compares to total operating expenses of $14.3 million in the same period of 2015, comprised of approximately $5.7 million in general and administrative expenses, $7.4 million in research and development expenses, and $0.9 million in depreciation and amortization.

On August 9, 2016 Aptose Biosciences Inc. (NASDAQ:APTO) (TSX:APS), a clinical-stage company developing new therapeutics and molecular diagnostics that target the underlying mechanisms of cancer, reported unaudited financial results for the three months ended June 30, 2016 and reported on corporate developments. Unless specified otherwise, all amounts are in Canadian dollars (Press release, Aptose Biosciences, AUG 9, 2016, View Source;p=RssLanding&cat=news&id=2194360 [SID:1234514415]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Net loss for the three months ended June 30, 2016 was $5.6 million ($0.46 per share) compared with $3.4 million ($0.28 per share) during the three months ended June 30, 2015. Total cash and cash equivalents at June 30, 2016 were $12.6 million.
"During the second quarter, we continued our disciplined approach to developing a stable formulation of APTO-253 and evaluating multiple formulations in order to select the best method for delivery of the product to patients," said William G. Rice, Ph.D., Chairman, President and Chief Executive Officer. "We have selected a methodology to create a stable formulation of APTO-253 and are performing numerous mock infusion studies and extensive analyses on that formulation. In parallel we continue to research alternate formulations to ensure we leave no stone unturned. We look forward to reporting back to you regarding the mock infusion studies, discussions with the FDA, and potential re-initiation of our Phase 1B clinical trial of APTO-253."

Corporate Highlights
During the quarter, Aptose worked with a formulation contract manufacturing organization (CMO) to select a new methodology to manufacture APTO-253 drug product with greatly improved solubility and stability characteristics, including an ability to remain stable and soluble at room temperature. Aptose performed mock infusion studies at multiple dose levels, and no filter clogging events were observed. Multiple contract research organizations are now performing the mock infusion studies and conducting extensive analyses on the optimized formulation of APTO-253.

Aptose’s clinical team has prepared additional clinical sites for the potential re-initiation of the Phase 1b trial of APTO-253, expanding the number of sites, at major cancer research and treatment centers in the U.S., to as many as 15.

Aptose has modified the clinical trial design for the Phase 1b study, pending approval from the FDA. Under the proposed modification, Arm B of the dose-escalation phase of the study, initially designed to enroll approximately fifteen (15) patients with multiple myeloma and lymphoma, will be discontinued. Arm A of the study, focused on patients with acute leukemias and myelodysplastic syndromes (MDS) remains unchanged. The rationale underlying this modification is to focus all resources on the patient population most likely to benefit from APTO-253.

In June, Aptose and CrystalGenomics, Inc. announced an exclusive global option and license agreement focused on the development of CG‘806, a highly potent, non-covalent small molecule anti-cancer agent. This multi-kinase inhibitor exhibits a picomolar IC50 toward the FMS-like tyrosine kinase 3 with the Internal Tandem Duplication (FLT3-ITD) and potency against a host of mutant forms of FLT3, as well as single-digit nanomolar IC50’s against Bruton’s tyrosine kinase and its C481S mutant.

Aptose and its collaborators have submitted three abstracts for presentation at the American Society of Hematology (ASH) (Free ASH Whitepaper) Meeting, planned for December 3-6, 2016 in San Diego, CA.
Financial Results
Net loss for the three months ended June 30, 2016 was $5.6 million ($0.46 per share) compared with $3.4 million ($0.28 per share) in the same period in the prior year. Net loss for the six months ended June 30, 2016 was $10.7 million ($0.88 per share) compared with $6.9 million ($0.59 per share) during the six months ended June 30, 2015.
Aptose utilized cash of $4.6 million in operating activities in the three-month period ended June 30, 2016 compared with $4.3 million during the three months ended June 30, 2015. For the six months ended June 30, 2016, Aptose utilized cash of $9.2 million compared with $6.5 million in the six months ended June 30, 2015. The cash utilized in the three month period ended June 30, 2016 is only slightly higher than the three months ended June 30, 2015 despite a higher net loss due to cash used to reduce accounts payable and accrual balances in the prior year period. The cash utilized in the six months ended June 30, 2016 increased compared to the prior year comparable period due to an increased net loss offset by cash used to reduce accounts payable and accrual balances in the prior year period.
Research and Development
Research and development expenses totaled $3.3 million in the three months ended June 30, 2016 compared to $1.3 million during the three months ended June 30, 2015 and totaled $5.6 million for the six month period ended June 30, 2016 compared with $2.2 million in the same period in the prior year. Research and development costs consist of the following:
Components of research and development expenses:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
(in thousands) 2016 2015 2016 2015

Program costs $ 1,879 $ 1,257 $ 4,126 $ 2,117
CrystalGenomics Option Fee 1,294 − 1,294 −
Stock-based compensation 109 46 165 65
Depreciation of equipment 11 5 23 10
$ 3,293 $ 1,308 $ 5,608 $ 2,192

The increase in research and development costs in the three and six months ended June 30, 2016 compared with the three and six months ended June 30, 2015 is due to the following reasons:
Costs associated with the LALS/Moffitt collaboration developing epigenetic single molecule inhibitors of multiple targets, including the BET proteins, and other kinases for which no comparable expenses existed in the prior year;
Increased research and clinical operations headcount;
Formulation and manufacturing costs associated with APTO-253 and the root cause analysis of the filter clogging identified in November 2015; and
Increased Contract Research Organization costs related to consultants and advisors as we work towards returning APTO-253 to the clinic.
During the three months ended June 30, 2016 Aptose paid US$1.0 million ($1.3 million) to CG for an option fee related to the CG’806 technology. Should the results of the planned pre-clinical studies be positive, we would choose to pay an additional US$2.0 million in cash or common shares to exercise the option and receive the commercial license prior to initiating any clinical studies. No comparable expense existed in the same period in the prior year.
Stock-based compensation costs allocated to research and development increased in the three and six months ended June 30, 2016 to reflect option grants to new employees.
General and Administrative
General and administrative expenses totaled $2.3 million in the three-month period ended June 30, 2016 compared to $2.5 million in the three months ended June 30, 2015. For the six month period ended June 30, 2016, general and administrative expenses totaled $5.0 million compared with $5.2 million in the same period in the prior year. General and administrative expenses consist of the following:
Components of general and administrative expenses:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
(in thousands) 2016 2015 2016 2015

General and administrative excluding salaries $ 822 $ 1,149 $ 1,955 $ 2,178
Salaries 823 757 1,798 1,510
Stock-based compensation 677 579 1,156 1,519
Depreciation of equipment 21 19 42 26
$ 2,343 $ 2,504 $ 4,951 $ 5,233

General and administrative expenses excluding salaries, decreased in the three months ended June 30, 2016 compared with the three months ended June 30, 2015. The decrease is primarily attributable to lower legal and patent costs as well as lower regulatory and filing fees related to transactions completed in the same period in the prior year.
General and administrative expenses excluding salaries, decreased in the six months ended June 30, 2016 compared with the six months ended June 30, 2015. The decrease is the result of lower legal costs related to transactions completed in the prior year as well as costs due to the clean-up and move associated with the Toronto office and lab relocation completed in the six months ended June 30, 2015 for which comparable expenses do not exist in the current year.
Salary charges in the three and six months ended June 30, 2016 increased in comparison with the three and six months ended June 30, 2015 due to additional headcount as well as a higher average CA/US exchange rate which increased the cost of our US denominated salaries.
Stock-based compensation costs increased in the three months ended June 30, 2016 compared with the three months ended June 30, 2015 due to annual option grants at the end of March 2016 compared with June 2015 which resulted in higher amortization earlier in the year.
Stock-based compensation decreased in the six months ended June 30, 2016 compared with the six months ended June 30, 2015 due to large option grants in April, June and July 2014 which vested 50% during the first year and therefore contribute to higher stock-based compensation expense during the first twelve month period captured in the prior year period.
Finance Expense
Finance expense for the three months ended June 30, 2016 totaled $9 thousand compared with $15 thousand for the three months ended June 30, 2015. For the six months ended June 30, 2016, finance expense totaled $205 thousand compared with $35 thousand for the same period in the prior year. Finance expense includes the following items:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
(in thousands) 2016 2015 2016 2015
Interest expense $ − $ 15 $ − $ 35
Foreign exchange loss 9 − 205 −
$ 9 $ 15 $ 205 $ 35

Interest expense for the three and six months ended June 30, 2015 relates to interest accrued at a rate of 10% on the remaining balance of convertible promissory notes issued in September 2013 as well as accretion expense related to the conversion feature of the notes. As the promissory notes were converted before September 2015, no interest expense was incurred in 2016.
Foreign exchange loss is the result of the fluctuation of exchange rates between US and Canadian dollars and the impact on our US dollar denominated cash balances.
Finance Income
Finance income totaled $33 thousand in the three months ended June 30, 2016 compared to $462 thousand in the three months ended June 30, 2015. For the six months ended June 30, 2016, finance income totaled $80 thousand compared with $526 thousand in the same period in the prior year. Finance income includes the following items:
Three months ended Six months ended
June 30, June 30, June 30, June 30,
(in thousands) 2016 2015 2016 2015
Interest income $ 33 $ 72 $ 80 $ 176
Foreign exchange gain − 390 − 350
$ 33 $ 462 $ 80 $ 526
Interest income represents interest earned on our cash and cash equivalent and investment balances. The foreign exchange gain incurred in the three and six months ended June 30, 2015 was the result of an increase in the value of US dollar denominated cash and cash equivalents balances during such periods due to a depreciation of the Canadian dollar compared to the US dollar.
Aptose Biosciences Inc.
Condensed Consolidated Interim Statements of Loss and
Comprehensive Loss

(unaudited)

(amounts in 000’s of Canadian Dollars except for per common share data)

Three months
ended
June 30, 2016 Three months
ended
June 30, 2015 Six months
ended
June 30, 2016 Six months
ended
June 30, 2015
REVENUE $ - $ - $ - $ -
EXPENSES
Research and development 3,293 1,308 5,608 2,192
General and administrative 2,343 2,504 4,951 5,233
Operating expenses 5,636 3,812 10,559 7,425
Finance expense 9 15 205 35
Finance income (33 ) (462 ) (80 ) (526 )
Net financing (income) expense (24 ) (447 ) 125 (491 )
Net loss and comprehensive loss for the period 5,612 3,365 10,684 6,934
Basic and diluted loss per common share $ 0.46 $ 0.28 $ 0.88 $ 0.59
Weighted average number of common shares
outstanding used in the calculation of
basic and diluted loss per common share (000’s) 12,231 11,909 12,140 11,852