On August 4, 2016 Endocyte, Inc. (NASDAQ:ECYT), a leader in developing targeted small molecule drug conjugates (SMDCs) and companion imaging agents for personalized therapy, reported financial results for the second quarter ending June 30, 2016, and provided a clinical update (Press release, Endocyte, AUG 4, 2016, View Source [SID:1234514253]).

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"Excitement is building around our lead assets, EC1456 and EC1169, as data to date has demonstrated attractive safety profiles and signs of anti-tumor activity for both agents. Later this month, we will advance EC1456 into targeted patients with non-small cell lung cancer (NSCLC) expressing the folate receptor, who are most likely to respond," said Mike Sherman, Endocyte’s president and chief executive officer. "We look forward to our first visibility into efficacy data for both compounds during the second half of the year."

EC1456 (Folate-tubulysin)

The EC1456 phase 1 dose escalation data presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting in June highlighted a 45 percent rate of stable disease as best study response across a patient population that included more than a dozen cancer types. Patients are enrolled regardless of their folate receptor (FR) status during this first part of the study.

Endocyte announced today that the maximum tolerated dose (MTD) has been determined in the twice weekly (BIW) dosing schedule for EC1456 at 6.0 mg/m2. Enrollment of FR-positive NSCLC patients in the BIW expansion cohort will begin in August. In this expansion cohort the company plans to evaluate efficacy endpoints, including tumor response, in addition to ongoing assessment of safety. Endocyte’s companion imaging agent, EC20 (etarfolatide), will be utilized to select these patients. The company is continuing to evaluate the MTD in the once weekly dosing regimen.

EC1169 (PSMA-tubulysin)

The EC1169 phase 1 dose escalation study, as presented at ASCO (Free ASCO Whitepaper), highlighted that all patients in the study have some level of prostate specific membrane antigen (PSMA) positivity, and the drug has been well tolerated.

"EC1169 has the potential to be a truly differentiated therapy, and it has shown signs of anti-tumor activity, even at low doses, including reductions of prostate-specific antigen levels greater than 50 percent in some patients," commented Alison Armour, M.D., Endocyte’s chief medical officer. "We have worked with key opinion leaders in prostate cancer to define the expansion phase of this trial, and once we determine the MTD, we plan to begin enrolling second-line chemotherapy metastatic castrate resistant prostate cancer (mCRPC) patients, with a primary study endpoint of radiological progression free survival. We also plan to include an exploratory assessment of taxane-naïve patients, which could allow the possibility of an earlier line therapy."

Upcoming Expected Milestones

Phase 1 updates on EC1456 and EC1169 at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) conference in October 2016
Complete enrollment of first 15 patient cohort in EC1456 expansion trial; single agent efficacy data (tumor response) in NSCLC at a medical meeting in late 2016 or early 2017
EC1169 single agent efficacy data in prostate cancer in late 2016 or early 2017
Updates on plans for earlier stage programs
Second Quarter 2016 Financial Results

Endocyte reported a net loss of $14.0 million, or $0.33 per basic and diluted share, for the second quarter of 2016, compared to a net loss of $10.6 million, or $0.25 per basic and diluted share, for the same period in 2015.

Research and development expenses were $6.8 million for the second quarter of 2016, compared to $6.7 million for the same period in 2015. The slight increase was primarily attributable to an increase in expenses related to the EC1456 and EC1169 dose escalation trials, which was partially offset by a decrease in expenses related to the TARGET trial, which is now complete, and a decrease in compensation expenses, primarily related to noncash stock compensation.

General and administrative expenses were $7.4 million for the second quarter of 2016, compared to $4.1 million for the same period in 2015. The increase in expenses was primarily attributable to an increase in compensation expense related to the resignation of the company’s former Chief Executive Officer, P. Ron Ellis. The company executed a separation agreement with Mr. Ellis during the three months ended June 30, 2016, and under this agreement, the company incurred additional compensation expense of $2.8 million for noncash stock compensation and $0.8 million of expense for a cash payment. The increase in general and administrative expenses was partially offset by a decrease in legal fees.

Cash, cash equivalents and investments were $154.6 million at June 30, 2016, compared to $188.6 million at June 30, 2015, and $173.6 million at December 31, 2015.

Financial Expectations

The company revised guidance for its expected cash balance at the end of 2016 to be above $130 million. Previous guidance was between $125 and $130 million cash balance at the end of 2016.

About the EC1456 Phase 1 Trial

This open-label, multicenter, non-randomized, dose-escalation study is divided into two parts. The first part of the study was designed to evaluate safety and tolerability and identify the MTD of EC1456 in patients with metastatic or locally advanced solid tumors.

The second part of the study will determine the efficacy of EC1456 in patients with FR-positive NSCLC treated with the MTD. The BIW dosing schedule at 6.0 mg/m2 will be evaluated first. Upon the completion of this dosing schedule, additional patients will be enrolled in a once per week dosing schedule cohort. Single agent tumor response will be evaluated, which will inform and may trigger additional work in combination therapies and indications such as triple-negative breast cancer, ovarian cancer and endometrial cancer. Patient FR-status will be determined using the investigational companion imaging agent, EC20 (etarfolatide). EC1456 is currently being evaluated in a phase 1 study in patients with advanced solid tumors (ClinicalTrials.gov Identifier: NCT01999738).

About the EC1169 Phase 1 Trial

This open-label, multicenter, non-randomized, dose-escalation study is divided into two parts. The first part of the study was designed to evaluate safety and tolerability and identify the MTD of EC1169 in patients with prostate cancer.

The second part of the study will determine the efficacy of the MTD of EC1169 in mCRPC patients who have been previously treated with a taxane-based chemotherapy. The primary study endpoint will be radiological progression free survival in patients selected as PSMA-positive. A second cohort will include an exploratory assessment of taxane-naïve patients. Patient PSMA status will be determined using the investigational companion imaging agent, EC0652. EC1169 is currently being evaluated in a phase 1 study in mCRPC patients (ClinicalTrials.gov Identifier: NCT02202447).

On Auguest 4, 2016 Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD), a commercial biotechnology company, reported an update on its second quarter 2016 results and recent business activities (Press release, Ironwood Pharmaceuticals, AUG 4, 2016, View Source [SID:1234514298]).

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"During the second quarter of 2016, Ironwood continued to deliver strong operational performance, resulting in a near-doubling of Ironwood revenue, year-over-year. We are well-positioned to advance our four priority franchises, including the launch of two new products in the next nine months, and we remain on track to become cash flow positive in 2018," said Peter Hecht, chief executive officer of Ironwood. "Our flagship product LINZESS demonstrated solid growth as the branded prescription market leader in adult patients with IBS-C or CIC and is on track to exceed $1 billion in net sales by 2020, with increased commercial margins driven by strong demand."

Second Quarter 2016 and Recent Highlights

Irritable Bowel Syndrome with Constipation (IBS-C) / Chronic Idiopathic Constipation (CIC) Franchise

LINZESS. U.S. net sales, as provided by Ironwood’s U.S. collaboration partner Allergan, were $150.5 million in the second quarter of 2016, a 34% increase compared to the second quarter of 2015. Ironwood and Allergan share equally in brand collaboration profits or losses.
More than 650,000 total LINZESS prescriptions were filled in the second quarter of 2016, a 29% increase compared to the second quarter of 2015, according to IMS Health. Since launch, more than 5 million prescriptions for LINZESS have been filled by more than 1 million unique patients, making LINZESS the branded prescription market leader in IBS-C and CIC.
Net profit for the LINZESS U.S. brand collaboration, including commercial and research and development (R&D) expenses, was $58.3 million in the second quarter of 2016, a 289% increase compared to the second quarter of 2015. LINZESS commercial margin was 52% in the second quarter of 2016, compared to 31% in the second quarter of 2015.
Ironwood and Allergan expect to launch a 72 mcg dose of linaclotide in early 2017 that, if approved, can increase physician prescribing of LINZESS within the large, heterogeneous adult CIC patient population. The companies announced during the second quarter of 2016 that the U.S. Food & Drug Administration (FDA) accepted the supplemental new drug application filing for this dose.
Linaclotide Colonic Release. Ironwood and Allergan completed enrollment in a Phase IIb clinical trial and expect data later this year; if positive, the companies anticipate initiating a Phase III trial in 2017. This second-generation guanylate cyclase-C (GC-C) agonist product candidate has the potential, if approved, to provide greater and faster abdominal pain relief in adult IBS-C patients, expand the IBS-C and CIC markets, and extend patent protection to the mid-2030s.
Uncontrolled Gout Franchise

ZURAMPIC. Ironwood expects to launch FDA-approved ZURAMPIC in October 2016 for use in combination with a xanthine oxidase inhibitor (XOI) for the treatment of hyperuricemia associated with uncontrolled gout. Gout is a form of inflammatory arthritis, and an estimated two million patients in the U.S. suffer from uncontrolled gout in which traditional first-line XOI treatment alone is not sufficient to achieve target serum uric acid (sUA) levels. Many of these patients experience painful flares due to hyperuricemia despite treatment with an XOI. In two Phase III clinical trials, the combination of the XOI allopurinol, which decreases production of uric acid, and ZURAMPIC, which increases excretion of uric acid, demonstrated nearly a two-fold increase in the percentage of patients reaching target serum uric acid levels under 6 mg/dL over allopurinol alone at month six. ZURAMPIC is not recommended for the treatment of asymptomatic hyperuricemia and should not be used as monotherapy. Ironwood closed the transaction with AstraZeneca for the exclusive U.S. rights to all products containing lesinurad during the second quarter of 2016.
Lesinurad-allopurinol fixed-dose combination product. The fixed-dose combination of lesinurad and allopurinol is expected to be submitted for FDA review during the second half of 2016.
Refractory Gastroesophageal Reflux Disease (rGERD) Franchise

IW-3718. Ironwood continues to enroll patients in a dose-ranging Phase IIb clinical trial of IW-3718, a wholly-owned asset for the potential treatment of rGERD. Data are expected in 2017. IW-3718 is a novel, investigational gastric retentive formulation of a bile acid sequestrant designed to work with a proton pump inhibitor (PPI) to reduce the detrimental effects of bile and acid on the esophagus. An estimated 10 million people in the U.S. suffer from rGERD and continue to experience heartburn symptoms despite treatment with PPIs.
Vascular and Fibrotic Franchise

IW-1973. Ironwood generated positive topline data from its Phase Ib multiple ascending dose study of IW-1973. The data were consistent with previous preclinical and Phase Ia findings and support advancement of IW-1973 into Phase II clinical trials, expected to begin later this year. Specifically, in the Phase Ib study, IW-1973 demonstrated characteristics that Ironwood believes could be important pharmacokinetic differentiators in the field of soluble guanylate cyclase (sGC) stimulators, including a narrow peak-to-trough ratio indicative of the potential to maintain a durable and consistent therapeutic effect; a profile that indicates suitability for once-daily dosing; and a volume of distribution consistent with penetration beyond the vasculature and into the tissues.
IW-1701. Ironwood completed enrollment in a Phase Ib multiple ascending dose study, with data expected later this year and a Phase II trial expected to begin before year-end.
Global Collaborations and Partnerships

Linaclotide is currently under review by the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan for potential approval for the treatment of adult patients with IBS-C. Additionally, Ironwood’s partner Astellas Pharma Inc. initiated a Phase III clinical trial of linaclotide in Japan for adults with chronic constipation.
Ironwood continued co-promoting Allergan’s VIBERZI (eluxadoline) for adults suffering from IBS with diarrhea (IBS-D) and Exact Sciences’ Cologuard noninvasive stool DNA screening test for colorectal cancer, in the U.S.
Corporate and Financials

Collaborative Arrangements Revenue
Collaborative arrangements revenue was $54.4 million in the second quarter of 2016, compared to $27.7 million in the second quarter of 2015. Revenue primarily consisted of $48.3 million in revenue associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., compared to $24.3 million in the second quarter of 2015.
Operating Expenses
Operating expenses were $69.7 million in the second quarter of 2016, compared to $61.6 million in the second quarter of 2015. Operating expenses in the second quarter of 2016 consisted of $31.7 million in R&D expenses; $36.9 million in selling, general and administrative (SG&A) expenses; and $1.1 million in acquired intangible asset amortization expenses resulting from Ironwood’s U.S. licensing agreement with AstraZeneca for the exclusive rights to all products containing lesinurad.
Other Expense
Interest Expense. Net interest expense was $9.5 million in the second quarter of 2016, in connection with the $175 million debt financing executed in January 2013 and the approximately $336 million convertible debt financing executed in June 2015. Interest expense recorded in the second quarter of 2016 includes $6.2 million in cash expense and $3.6 million in non-cash expense. Both the cash and non-cash components of the 2022 convertible notes are recorded quarterly.
Gain/Loss on Derivatives. Ironwood records a gain/loss on derivatives related to the change in fair value of the convertible note hedges and note hedge warrants issued in connection with the convertible debt financing in June 2015. A gain on derivatives of $3.1 million was recorded in the second quarter of 2016.
Net Loss
GAAP net loss was $21.7 million, or $0.15 per share, in the second quarter of 2016, compared to $48.0 million, or $0.34 per share, in the second quarter of 2015.
Non-GAAP net loss was $23.8 million, or $0.16 per share, in the second quarter of 2016, compared to $47.8 million, or $0.34 per share, in the second quarter of 2015. Non-GAAP net loss excludes the impact of mark-to-market adjustments on the derivatives related to Ironwood’s convertible debt and the amortization of acquired intangible assets related to Ironwood’s U.S. lesinurad license. See Non-GAAP Financial Measures below.
Cash Position
Ironwood ended the second quarter of 2016 with $325 million of cash, cash equivalents and available-for-sale securities, a decrease of $109 million from the end of the first quarter of 2016. This figure includes the $100 million upfront payment to AstraZeneca from cash on hand under the lesinurad licensing agreement. Cash used in operations was $6 million, a 77% decline from the $26 million used during the same period a year ago.
2016 Financial Guidance
With the completion of its U.S. licensing transaction for all products containing lesinurad and support of the anticipated launch of FDA-approved ZURAMPIC in October 2016, Ironwood is updating its guidance for 2016. Ironwood expects:

R&D expenses to fall within a range of $140 million to $150 million, (previously $130 million to $145 million),
SG&A expenses to fall within a range of $170 million to $180 million, (previously $125 million to $140 million), and
Amortization of intangible assets to be $8 million (not applicable prior to the U.S. lesinurad license).
Consistent with its guidance following the announcement of the U.S. lesinurad license, Ironwood continues to expect to use less than $70 million in cash for operations in 2016.

Allergan and Ironwood continue to expect total 2016 marketing and sales expenses for LINZESS to be in the range of $230 million to $260 million, and the companies now expect these expenses to be in the mid to higher end of this range.

Non-GAAP Financial Measures

The company presents non-GAAP net loss and non-GAAP net loss per share to exclude the impact of net gains and losses on the derivatives related to our convertible notes that are required to be marked-to-market, and the amortization of acquired intangible assets. The derivative gains and losses may be highly variable, difficult to predict and of a size that could have a substantial impact on the company’s reported results of operations in any given period. The acquired intangible assets are valued at the time of acquisition and are amortized over their estimated economic useful life, and management believes excluding the amortization of acquired intangible assets provides more consistency with internally developed intangible assets for which research and development costs were previously expensed. The company has presented non-GAAP net loss and non-GAAP net loss per share in prior calendar quarters, and this is the first calendar quarter in which the company has amortization of acquired intangible assets that can be excluded from such non-GAAP financial measures. Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures, please refer to the table at the end of this press release.

On August 4, 2016 AVEO Oncology (NASDAQ:AVEO) reported financial results for the second quarter ended June 30, 2016 (Press release, AVEO, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2192884 [SID:1234514233]).

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"The second quarter of 2016 marked a defining moment for AVEO, with the initiation of TIVO-3, our Phase 3 pivotal study of tivozanib in refractory advanced renal cell cancer, and the closing of debt and equity financings to support our North American first- and third-line registration strategy for tivozanib as well as our planned PD-1 combination study," said Michael Bailey, president and chief executive officer. "We are very pleased with investigator support for TIVO-3 to date, and remain on track to complete enrollment in 2017 and see top-line data in the first quarter of 2018. We expect to achieve several milestones over the next 12 months, including the initiation of a tivozanib PD-1 combination study, a decision on approval for tivozanib in front-line RCC in Europe, meaningful progress in our partnered pipeline programs as well as a potential partnership for AV-353. Along with anticipated milestone payments from our partnered pipeline programs, we believe that our resources will allow us to fully fund our U.S. tivozanib development strategy through at least pivotal top-line data for TIVO-3 in the first quarter of 2018."

Recent Highlights

Dosing of First Patient in Pivotal Phase 3 TIVO-3 Study of Tivozanib in Renal Cell Carcinoma. In May 2016, AVEO announced that the first patient was dosed in the Company’s pivotal TIVO-3 trial, a randomized, controlled, multi-center, open-label study to compare tivozanib to sorafenib in subjects with refractory advanced renal cell carcinoma (RCC). Tivozanib is an oral, once-daily, vascular endothelial growth factor (VEGF) tyrosine kinase inhibitor (TKI). The Phase 3 trial is expected to enroll approximately 322 patients with recurrent or metastatic RCC who have failed at least two prior regimens, including VEGFR-TKI therapy (other than sorafenib). Eligible patients may also have received checkpoint inhibitor therapy in earlier lines of treatment. Patients will be randomized 1:1 to receive either tivozanib or sorafenib, with no crossover between arms.

The primary endpoint of the study is progression free survival. Secondary endpoints include overall survival, overall response rate, and safety and tolerability. Top line readout of the study is currently projected for the first quarter of 2018. The TIVO-3 trial, together with the previously completed TIVO-1 trial of tivozanib in the first line treatment of RCC, is designed to support a first and third line indication for tivozanib in the U.S. A marketing authorization application seeking approval of tivozanib as a treatment for first line renal cell cancer is currently pending in Europe based on an application submitted by AVEO’s partner EUSA Pharma.
Closing of Private Placement and Amended Term Loan. In May 2016, AVEO announced the closing of a private placement of 17,642,482 units, each consisting of one share of common stock and a warrant to purchase one share of common stock, at a price of $0.965 per unit, for gross proceeds of approximately $17 million. The transaction was led by New Enterprise Associates and included New Leaf Venture Partners and Perceptive Advisors, among other institutional investors. Certain members of the Company’s management team and Board of Directors also participated in the financing. Piper Jaffray & Co. served as the exclusive placement agent for the financing.

The Company also announced that it entered into an amendment to its 2010 loan and security agreement with Hercules Capital, Inc. Pursuant to the loan amendment, the Company borrowed an additional $5.0 million from Hercules. If specified conditions are met, AVEO may borrow an additional tranche of $5.0 million from Hercules in the first half of 2017, and repayment of principal on AVEO’s loans may be deferred to begin in 2018.
Filing of Provisional Patent Applications for AV-353, a Notch 3-Specific Inhibitor Antibody for PAH. In May 2016, AVEO announced that it had filed provisional patent applications with the United States Patent and Trademark Office covering composition of matter claims for AV-353, the Company’s potent inhibitory antibody specific to Notch 3 for development in Pulmonary Arterial Hypertension (PAH). These patent applications are the second set of applications related to AV-353 and the Company’s Notch 3 antibody program. Current treatments in PAH focus only on controlling symptoms by avoiding vasoconstriction and increasing vasodilation of vessels and do not reverse the underlying cause of the disease. In contrast, with the results of a recently concluded research study supported by AVEO, AV-353 has generated a growing body of preclinical data that supports AV-353’s ability to potentially reverse the disease phenotype, which would represent a potential disease-modifying approach to treatment. Consistent with the Company’s focus on developing oncology therapeutics, AVEO is currently seeking an appropriate partner to develop and commercialize AV-353 worldwide in PAH.
Second Quarter 2016 Financial Highlights

AVEO ended Q2 2016 with $39.5 million in cash, cash equivalents and marketable securities as compared with $34.1 million at December 31, 2015. The increase was attributable to the net proceeds of our private placement of securities and additional borrowings under our existing loan and security agreement in the second quarter of 2016, net of the use of cash to fund operations during 2016.
Total collaboration revenue in Q2 2016 was approximately $0.2 million compared with $0.1 million Q2 2015. The increase was primarily due to $0.1 million in revenue recognized in the second quarter of 2016 in connection with the out-licensing agreement with EUSA, which was executed in December 2015.
Research and development expense was $5.6 million in Q2 2016 compared with $1.8 million for Q2 2015. The increase was primarily attributable to an increase in tivozanib clinical trial costs in connection with the preparation for, and conduct of, the TIVO-3 phase 3 trial in renal cell carcinoma that commenced enrollment and patient treatment in May 2016.
General and administrative expense was $1.7 million in Q2 2016 compared with $2.9 million for Q2 2015. The decrease was primarily the result of continued reduction of facilities and other operating expenses after completing our restructuring in the first quarter of 2015.
Net loss for Q2 2016 was $8.6 million, or a loss of $0.13 per basic and diluted share, compared with net loss of $5.5 million, or a loss of $0.10 per basic and diluted share for Q2 2015.
Financial Guidance

We believe that our $39.5 million in cash resources could allow us to fund our planned operations at least into the fourth quarter of 2017.

AVEO expects that its cash resources, its borrowing capacity under its amended loan agreement, together with certain anticipated operational milestone payments from its collaboration partners, could allow the Company to fund its U.S. tivozanib development strategy through at least pivotal Phase 3 TIVO-3 top-line data as well as a tivozanib-PD-1 inhibitor combination trial.

On August 4, 2016 Intellia Therapeutics, Inc. (NASDAQ:NTLA), a leading genome editing company focused on the development of potentially curative therapeutics using CRISPR/Cas9 technology, reported financial results and recent company highlights for the quarter ended June 30, 2016 (Press release, Intellia Therapeutics, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2193255 [SID:1234514254]).

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"Intellia has made substantial progress with our science, financing and operations in the first half of 2016," said Nessan Bermingham, Ph.D., Chief Executive Officer and Founder, Intellia Therapeutics. "Our product focus, therapeutic discovery and development strength, delivery expertise and intellectual property portfolio make Intellia well positioned to advance CRISPR/Cas9 into clinically meaningful genome editing therapeutics for patients with severe and life-threatening diseases."

Recent Highlights

On April 11, 2016, Intellia signed a multi-year research and development collaboration and licensing agreement with Regeneron Pharmaceuticals to advance CRISPR/Cas9 genome editing technology for in vivo therapeutic development. Regeneron has the exclusive rights to discover and develop CRISPR-based products against up to 10 targets, focused primarily on therapies for a broad range of diseases that may be treated by editing genes in the liver. Transthyretin amyloidosis (TTR) is the first target to be jointly developed and potentially commercialized by the companies.
The Company also strengthened its leadership team with the addition of Perry Karsen as the Chairman of Intellia’s Board of Directors. Mr. Karsen brings decades of biopharmaceutical leadership experience to his role as Chairman. He most recently held senior leadership positions at Celgene Corporation, including Chief Operations Officer and Executive Vice President as well as Chief Executive Officer of Celgene’s cellular therapeutics division.
The Company, since its inception, has raised an aggregate of $350.5 million, of which $170.5 million is from the initial public offering and concurrent private placements in May 2016, $95 million is through collaboration agreements, and $85 million is from the sale of convertible preferred stock.
Second Quarter 2016 Financial Results

As of June 30, 2016, Intellia had $300.7 million in cash and cash equivalents, which includes net proceeds from its initial public offering. Net loss for the second quarter 2016 was $6.9 million, compared to $3.0 million in the same period in 2015.

Collaboration revenue was $4.2 million in the second quarter 2016, compared to $1.4 million in the same period of 2015. The increase in collaboration revenue is primarily attributable to the inclusion of amounts recognized under the Regeneron collaboration in 2016.

Research and development expenses in the second quarter 2016 were $7.4 million, compared to $2.0 million in the same period in 2015. This increase in expenses is primarily attributable to the growth of the Company’s research and development organization to accelerate the development of the CRISPR/Cas9 platform and Intellia’s proprietary and partnered pipeline candidates.

General and administrative expenses were $3.7 million in the second quarter of 2016, compared to $2.8 million for the same period in 2015. The increase in general and administrative expenses is primarily driven by incremental expenses to support the Company’s operations as a new public company, as well as increased headcount-based expenses to support the Company’s overall growth.

Research & Development Highlights

Intellia is advancing its pipeline through a risk-mitigated approach focused on sentinel indication development, platform delivery expansion, and preclinical and clinical scale up. The Company is focused on developing the following programs:

Programs Partnerships Type of
Edit Delivery Upcoming Milestones
In Vivo
Transthyretin Amyloidosis (ATTR) Co-developing with
Regeneron Knockout LNP to Liver Select 1 to 2 development candidates and advance to IND enabling
studies in 2H2017/1H2018
Alpha-1 Antitrypsin
Deficiency (AATD) Proprietary Knockout LNP to Liver
Repair
Hepatitis B Virus (HBV) Proprietary Knockout LNP to Liver
Inborn Errors of
Metabolism (IEMs) Proprietary Knockout LNP to Liver
Repair
Insertion
Ex Vivo
Hematopoietic
Stem Cells (HSCs) Selectively partnered
with Novartis;
proprietary Knockout Electroporation First Novartis IND expected to be submitted in 2018
Repair
Insertion
CAR T Cells Partnered with
Novartis Knockout Electroporation Advance preclinical development
Insertion

Upcoming Events

Intellia will present delivery data utilizing CRISPR/Cas9 at the Cold Spring Harbor Laboratory Meeting, taking place from August 17-20, 2016. The oral presentation, Robust In Vivo Gene Editing in Mouse Hepatocytes with Systemic Lipid Nanoparticle Delivery of CRISPR/Cas9 Components, will be presented by Intellia’s Chief Technology Officer, David Morrissey, Ph.D.
Intellia’s CEO & Founder Nessan Bermingham, Ph.D., will be presenting at the Wedbush PacGrow Healthcare Conference in New York on August 17, 2016, the Wells Fargo Healthcare Conference in Boston, September 7-8, 2016, the Morgan Stanley Global Healthcare Conference in New York on September 12, 2016, and the Leerink Partners Rare Disease Roundtable Series in New York on September 28-29, 2016.

On August 4, 2016 Raptor Pharmaceutical Corp. (NASDAQ:RPTP), a biopharmaceutical company developing and commercializing transformative treatments for rare diseases, reported its financial results for the second quarter of 2016 and provided an update on recent corporate developments (Press release, Raptor Pharmaceutical, AUG 4, 2016, View Source [SID:1234514301]).

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Summary

Global net product revenue was $32.0 million for the second quarter ended June 30, 2016, a 37.3% increase compared to $23.3 million for the same period in 2015.

Net loss on a GAAP basis was $14.0 million, or $0.16 per share, for the second quarter of 2016 compared to a GAAP net loss of $13.9 million, or $0.17 per share, for the same period in 2015.

Non-GAAP net loss, which excludes non-cash expenditures such as stock compensation, amortization and impairment of IPR&D, and change in the fair value of the contingent consideration liability related to acquisitions, was $11.3 million, or $0.13 per share, for the second quarter of 2016 compared to a non-GAAP net loss of $9.6 million, or $0.12 per share, for the same period in 2015.

Cash and cash equivalents were $124.2 million as of June 30, 2016.

Raptor is raising its 2016 global net revenue guidance to $125 to 135 million from $115 to $125 million and affirming its guidance for non-GAAP operating expenses, excluding non-cash expenditures such as stock compensation, amortization and impairment of IPR&D, and change in the fair value of the contingent consideration liability related to acquisitions, of between $125 and $135 million.

"I’m delighted that we delivered another record quarter for sales, driven primarily by growing patient demand for PROCYSBI ," said Julie Anne Smith, President and CEO of Raptor. "For the first time, PROCYSBI revenue was augmented by sales of QUINSAIR, which is off to a terrific launch in Europe. Based on our outstanding commercial performance, we are pleased to raise our 2016 revenue guidance. We look forward to continued growth from both products and supporting patients living with rare diseases and with limited options."

Second Quarter 2016 Business Highlights

In April, Raptor commenced the first commercial sales of QUINSAIR (levofloxacin inhalation solution) in Germany and Denmark for the management of chronic pulmonary infections due to Pseudomonas aeruginosa in adult patients with cystic fibrosis. To date, approval for reimbursement for QUINSAIR has been achieved in numerous European countries.

In June, Raptor participated in the 39th European Cystic Fibrosis Conference and presented new analyses of data from its Phase 3 clinical study (MPEX-209) comparing QUINSAIR to inhaled tobramycin solution in patients with cystic fibrosis and chronic Pseudomonas aeruginosa infections. The data suggest that subjects with three or more pulmonary exacerbations in the prior year who were randomized to receive QUINSAIR had a significantly lower incidence of pulmonary exacerbations when compared with their peers who were randomized to receive the active comparator, tobramycin inhalation solution (p=0.026).

Second Quarter 2016 Financial Results

Raptor provides non-GAAP financial measures, which it believes can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the section of this press release below entitled "Non-GAAP Financial Information and Other Disclosures" for further discussion on this subject.

Net Product Revenue

Global net revenue for the second quarter of 2016 was $32.0 million, compared to $23.3 million for the second quarter of 2015. The 37.3% revenue growth was driven by further market penetration in the U.S. and in Europe and an increase in named patient sales in other international territories for PROCYSBI, and by the introduction of QUINSAIR during the quarter.

Cost of Sales

Cost of sales was $4.9 million for the second quarter of 2016, compared to $2.6 million for the second quarter of 2015. The increase was due to higher quarterly sales year-over-year, leading to higher direct costs and royalty expenses in 2016.

Research & Development (R&D)

R&D expenses for the second quarter of 2016 were $15.7 million, compared to $11.9 million for the second quarter of 2015. The increased expense for the three month period ended June 30, 2016 was primarily due to increased activities associated with our product portfolio, support for the European QUINSAIR launch and related to preparation for a potential NDA filing for QUINSAIR in a cystic fibrosis indication in the US.

Selling, General and Administrative (SG&A)

SG&A expenses were $20.9 million for the second quarter of 2016 compared to $17.8 million for the second quarter of 2015. The increase in SG&A expenses was primarily a result of increased personnel costs and promotional support for the worldwide commercial operations of PROCYSBI and QUINSAIR in Europe.

Interest Expense

Interest expense for the second quarter of 2016 was $4.3 million, compared to $4.8 million for the second quarter of 2015. The decrease in interest expense was primarily due to a decrease in principal from which Raptor’s interest expense is calculated.

Net Loss

GAAP net loss in the second quarter of 2016 was $14.0 million, or $0.16 per share, compared to a net loss of $13.9 million, or $0.17 per share for the second quarter of 2015.

Non-GAAP net loss, which excludes non-cash expenditures such as stock compensation, amortization and impairment of IPR&D, and change in the fair value of the contingent consideration liability related to acquisitions, for the second quarter of 2016 was $11.3 million, or $0.13 per share, compared to a non-GAAP net loss of $9.6 million, or $0.12 per share, in the second quarter of 2015.

Cash and Cash Equivalents

As of June 30, 2016, Raptor had $124.2 million in cash and cash equivalents compared to $132.0 million in cash and cash equivalents at March 31, 2016.

2016 Full-Year Financial Guidance

Raising 2016 global net revenue guidance to $125 to $135 million from $115 to $125 million.
Refining PROCYSBI revenue growth to at least 30% over 2015 revenues.
Reiterating non-GAAP operating expense guidance, which excludes non-cash expenditures such as stock compensation, amortization and impairment of IPR&D, and change in the fair value of the contingent consideration liability related to acquisitions, of $125 to $135 million. Raptor is unable to reconcile non-GAAP operating expense guidance to GAAP operating expense guidance without unreasonable efforts and believes any such reconciliation would imply a degree of precision that could be confusing to investors. Raptor is unable to predict the probable significance of any of the above-listed adjustments.
Product and Pipeline Updates

PROCYSBI for Nephropathic Cystinosis

In the second quarter, Raptor recorded the first PROCYSBI sales in several additional European countries.
A New Drug Submission (NDS) for PROCYSBI for the treatment of nephropathic cystinosis is currently under review by Health Canada. Recently, Raptor received notice from Health Canada that it is seeking additional information to complete its review. Raptor intends to submit a response to Health Canada in a timely fashion to preserve Priority Review status and expects that Health Canada’s timeline for review of the NDS will re-commence when it accepts Raptor’s response. As a result, Raptor anticipates a delay in Health Canada’s decision on the potential marketing approval of PROCYSBI.
QUINSAIR for Cystic Fibrosis

In April, Raptor launched QUINSAIR in Germany and Denmark for the management of chronic pulmonary infections due to Pseudomonas aeruginosa in adults with cystic fibrosis, and to date, QUINSAIR has become available for reimbursement in several territories in the EU and Raptor is actively expanding into new countries.
Raptor anticipates launching QUINSAIR in Canada for the same indication, for which it has received marketing approval, in the second half of 2016.
In August, the European Patent Office issued EP Pat. No. 1 901 749 with claims covering Raptor’s QUINSAIR formulation. This patent will expire in May 2026, supplementing Raptor’s 10 years of data exclusivity.
MP-376 (Investigational Form of QUINSAIR)

Raptor had a meeting with the FDA in the second quarter concerning MP-376 for the management of chronic pulmonary infections due to Pseudomonas aeruginosa in adult patients with cystic fibrosis in the U.S. The FDA requested additional information pertinent to Raptor’s existing trials prior to the company’s potential submission of an NDA. Raptor submitted a response to the FDA’s request and expects to have additional discussions with the FDA.
The company intends to initiate a clinical study for MP-376 in bronchiectasis (BE) in 2016. Raptor plans to provide additional clarity on the timing of key activities once the study design has been finalized.
RP103 for Huntington’s Disease

With current efforts focused on prioritizing clinical programs that represent Raptor’s best use of current capital, the company continues to explore non-dilutive funding and partnering options for RP103 in Huntington’s disease.
RP103 for Mitochondrial Diseases

The second interim analysis, which occurred after 12 patients completed 24 weeks of treatment, indicated the ongoing trial should continue as planned, which is currently ongoing.
Anticipated Upcoming Milestones

2H 2016 — Potential QUINSAIR launch in Canada
2016 — Advancement towards an NDA submission for MP-376 in cystic fibrosis in the U.S.
2016 — Initiation of a clinical study for MP-376 in BE
1H 2017 — Phase 2 RP103 data in mitochondrial diseases