On May 04, 2016 CombiMatrix Corporation (NASDAQ:CBMX), a molecular diagnostics company specializing in DNA-based testing services for pre-implantation genetic diagnostics and screening, miscarriage analysis, prenatal and pediatric diagnostics, reported financial results for the three months ended March 31, 2016 (Press release, CombiMatrix, MAY 4, 2016, View Source [SID:1234511927]).

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"We are reporting another exceptional quarter of financial progress, with 28% revenue growth, expanded gross margin, increased cash collections and well managed operating expenses," said Mark McDonough, CombiMatrix President and CEO. "Our growth was driven by a 39% increase in reproductive health revenue on an 18% increase in test volume, reflecting higher average revenue per test. We are particularly pleased with our performance in miscarriage analysis testing, with revenues up 43% on 13% test volume growth. We also benefited from better productivity from our newer sales representatives, which contributed to an 18% increase in our customer base.

"We anticipate that various industry dynamics will favorably impact our business," he added. "In March, the two leading associations in women’s healthcare, the American College of Obstetricians and Gynecologists (ACOG) and the Society for Maternal-Fetal Medicine (SMFM), issued revised practice bulletins recommending that all women regardless of age or other risk factors are offered prenatal genetic testing. These bulletins reiterated the need to perform confirmatory testing when screening tests reveal positive results for fetal abnormalities. Additionally, a number of health plans, including Cigna and several in the Blue Cross Blue Shield network, have recently revised their medical policies to cover chromosomal microarray testing for recurrent pregnancy loss. We believe that more health plans will follow suit based on the growing clinical support for this valuable patient information.

"We are firmly focused on growth and a path toward profitability, supported by tight execution of our business strategy," said Mr. McDonough. "This year we plan to expand our IVF testing portfolio and expect to increase physician adoption through more clinical validation, improved marketing developed from the insights from our newly appointed Scientific Advisory Board, and greater productivity from our sales organization. We also are seeking opportunities to build upon our leadership position in the growing reproductive health diagnostics market and enhance shareholder value through partnerships and other business development alternatives. With the completion of an $8 million financing in late March, we are well positioned to execute on our plans."

First Quarter Financial and Operational Highlights (all comparisons are with the first quarter of 2015)

Total revenues of $3.0 million, up 28%
Reproductive health revenues of $2.2 million, up 39%
Reproductive health test volume of 1,426, up 18%
Number of billable customers reaches 264, up 18%
Cash collections of $2.5 million, up 15%
Closed $8.0 million underwritten public offering in March of 2016
Launched CombiPGD – Preimplantation Genetic Diagnosis for Single Gene Disorders and Chromosomal Translocations
Formed Scientific Advisory Board

Volumes
Revenues (in 000’s)
Q1 ’16 Q1 ’15 # Δ % Δ Q1 ’16 Q1 ’15 $ Δ % Δ
Prenatal 264 324 (60 ) (19 %) $ 321 $ 422 $ (101 ) (24 %)
Miscarriage analysis 995 882 113 13 % 1,622 1,132 490 43 %
PGS 167 - 167 - 222 - 222 -
Subtotal – reproductive health 1,426 1,206 220 18 % 2,165 1,554 611 39 %
Pediatric 452 467 (15 ) (3 %) 500 497 3 1 %
Subtotal – all arrays 1,878 1,673 205 12 % 2,665 2,051 614 30 %
Non-array tests 770 672 98 15 % 265 236 29 12 %
Total – all tests 2,648 2,345 303 13 % 2,930 2,287 643 28 %
Royalties 42 42 - 0 %
Total revenues $ 2,972 $ 2,329 $ 643 28 %

Financial Results

Total revenues for the first quarter of 2016 increased 28% to $3.0 million from $2.3 million for the first quarter of 2015. Revenues for the first quarter of 2016 were comprised of $2.9 million of diagnostic services revenue and $42,000 in royalties. Reproductive health diagnostic test revenue, which includes prenatal microarrays, miscarriage analysis and PGS, increased 39% to $2.2 million and related testing volumes increased 18% to 1,426. The first quarter 2016 revenue increase was driven partially by higher test volumes, particularly from miscarriage analysis and PGS testing, but primarily by higher average revenue per test in miscarriage analysis testing.

Total operating expenses were $4.4 million for the first quarter of 2016, compared with $4.1 million for the first quarter of 2015. The increase was due primarily to an increase in cost of services related to higher test volumes and from an increase in sales and marketing expenses related to sales force expansion. Gross margins for the first quarter of 2016 improved to 51.6% from 46.2% for the first quarter of 2015 due primarily to improved average reimbursement on miscarriage analysis testing.

The net loss for the first quarter of 2016 was $1.5 million, or $1.73 per share, compared with a net loss for the first quarter of 2015 of $1.8 million, or $2.24 per share. Net loss attributable to common stockholders for the first quarter of 2016 was $3.1 million, or $3.63 per share, compared with a net loss attributable to common stockholders for the first quarter of 2015 of $2.7 million, or $3.37 per share. The higher net loss attributable to common stockholders in 2016 reflected one-time, non-cash charges of $1.9 million related to deemed dividends from the issuance of Series F convertible preferred stock and warrants in the $8.0 million public offering that closed on March 24, 2016. This increase was partially offset by the reversal of the $890,000 Series E deemed dividend recognized in 2015 from the repurchase of those securities upon closing of our public offering, partially reduced by the $656,000 deemed dividend paid to the Series E investors in February of 2016.

The Company reported $6.6 million in cash, cash equivalents and short-term investments as of March 31, 2016, compared with $3.9 million as of December 31, 2015. The Company used $1.7 million in cash to fund operating activities during the first quarter of 2016, compared with $1.2 million to fund operating activities during the comparable period in 2015. The increase in net cash used to fund operating activities in 2016 resulted primarily from the timing of the purchase of inventory supplies, coupled with higher overall headcount in early 2016 compared with 2015.

On May 4, 2016 Infinity Pharmaceuticals, Inc. (NASDAQ: INFI) reported its first quarter 2016 financial results and ongoing progress with its pipeline, including duvelisib, an investigational, oral, dual inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma, and IPI-549, an immuno-oncology development candidate that selectively inhibits PI3K-gamma (Press release, Infinity Pharmaceuticals, MAY 4, 2016, View Source;p=RssLanding&cat=news&id=2165087 [SID:1234511932]).

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Infinity expects to report topline data from DYNAMO, a registration-focused Phase 2 monotherapy study of duvelisib in patients with refractory indolent non-Hodgkin lymphoma (iNHL), early in the third quarter of 2016. Infinity also anticipates completing an interim analysis of DUO, a registration-focused Phase 3 monotherapy study of duvelisib in patients with relapsed/refractory chronic lymphocytic leukemia (CLL), early in the second half of 2016. The company expects marketing applications, if supported by these data, to be submitted to the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA) in the fourth quarter of 2016.

"We believe the next few months will be fundamental to advancing Infinity’s goal of bringing important new medicines to patients. If the duvelisib data that we anticipate in the coming months are favorable, these data could enable regulatory filings to be submitted in the U.S. and Europe in the fourth quarter of 2016. Achieving these milestones positions us to potentially bring duvelisib to patients next year," stated Adelene Perkins, president and chief executive officer. "Infinity is also advancing several clinical studies designed to evaluate the safety and activity of duvelisib in broader patient populations. Additionally, our collaborator, AbbVie, has initiated a Phase 1b/2 clinical study of duvelisib in combination with Venclexta," Ms. Perkins continued.

Recent developments:

Preliminary data from CONTEMPO to be presented in June: Infinity reported that preliminary data from CONTEMPO, a Phase 1b/2 study evaluating duvelisib in combination with rituximab or obinutuzmab in treatment-naïve follicular lymphoma patients, has been accepted for presentation in a poster session at the 21st Congress of European Hematology Association (EHA) (Free EHA Whitepaper), which will take place June 9 – 12, 2016, in Copenhagen.

Phase 1b/2 study of duvelisib in combination with Venclexta initiated: AbbVie has initiated a Phase 1b/2 clinical study of duvelisib in combination with Venclexta, AbbVie’s B-cell lymphoma-2 (BCL-2) selective inhibitor. This study is designed to evaluate the safety and efficacy of duvelisib in combination with venetoclax in approximately 174 patients with relapsed or refractory iNHL, aggressive NHL, small lymphocytic lymphoma or CLL.

Preclinical data for IPI-549 presented at the 2016 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting: In April, Infinity researchers in collaboration with researchers at Memorial Sloan Kettering Cancer Center presented preclinical data for IPI-549 at the 2016 AACR (Free AACR Whitepaper) Annual Meeting. Preclinical data in multiple solid tumor models demonstrated that IPI-549 targets immune cells and alters the immune-suppressive microenvironment, promoting an anti-tumor immune response that leads to tumor growth inhibition. Data also demonstrated that IPI-549 enhances the effects of checkpoint inhibitors, resulting in improved survival in murine models.
A Phase 1 study of IPI-549 is ongoing to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of IPI-549 as a monotherapy and in combination with an anti-PD-1 antibody, a checkpoint inhibitor, in approximately 150 patients with advanced solid tumors, including non-small cell lung cancer and melanoma. IPI-549 is the only investigational PI3K-gamma inhibitor in clinical development.

Inducement Grant Under NASDAQ Listing Rule 5635(c)(4): In connection with the appointment of Mr. Christopher Lindblom as vice president, finance and treasurer at Infinity, the Compensation Committee of Infinity’s Board of Directors approved the grant of an option to Mr. Lindblom to purchase 40,000 shares of Infinity’s common stock. The option was granted outside of the company’s equity incentive plans and was made as an inducement material to Mr. Lindblom’s acceptance of employment. The option has an exercise price of $5.87 per share, which is equal to the closing price of Infinity’s common stock on May 2, 2016. One-fourth of the shares underlying Mr. Lindblom’s option will vest on the one year anniversary of his date of hire and thereafter 1/48th of the shares underlying Mr. Lindblom’s option will vest monthly, such that the shares underlying the option will be fully vested on the fourth anniversary of his date of hire, subject to his continued employment with Infinity on each such vesting date.
First Quarter 2016 Financial Results

At March 31, 2016, Infinity had total cash, cash equivalents and available-for-sale securities of $193.0 million, compared to $245.2 million at December 31, 2015.

Revenue during the first quarter of 2016 was $9.3 million for research and development (R&D) services associated with the strategic collaboration with AbbVie for duvelisib in oncology, compared to $4.4 million for R&D services for the first quarter of 2015.

R&D expense for the first quarter of 2016 was $39.2 million, compared to $88.4 million for the first quarter of 2015. R&D expense for the first quarter of 2015 included a $52.5 million payment related to the exercise of an option to buy out the company’s royalty obligations to Takeda Pharmaceutical Company Limited for duvelisib worldwide oncology sales. Excluding the $52.5 million payment in 2015, the increase in R&D expense was primarily due to higher clinical development expenses for duvelisib as well as an increase in staffing.

General and administrative (G&A) expense was $10.8 million for the first quarter of 2016, compared to $8.6 million for the same period in 2015. The increase in G&A expense was primarily related to an increase in staffing as well as external commercial expenses in preparation for the potential launch of duvelisib in 2017.

Net loss for the first quarter of 2016 was $40.7 million, or a basic and diluted loss per common share of $0.82, compared to $93.3 million, or a basic and diluted loss per common share of $1.91, for the same period in 2015.
Conference Call Information
Infinity will host a conference call today, May 4, 2016, at 4:30 p.m. ET to discuss these financial results and company updates. A live webcast of the conference call can be accessed in the "Investors/Media" section of Infinity’s website at www.infi.com. To participate in the conference call, please dial 1-877-316-5293 (domestic) or 1-631-291-4526 (international) five minutes prior to start time. The conference ID number is 89736154. An archived version of the webcast will be available on Infinity’s website for 30 days.

About Duvelisib
Duvelisib is an investigational, oral, dual inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma, two proteins with predominantly non-overlapping roles known to support the growth and survival of malignant B-cells.[i] Preclinical data suggest that PI3K-delta signaling can lead to the proliferation of malignant B-cells, and both PI3K-gamma and PI3K-delta play a role in the formation and maintenance of the supportive tumor microenvironment.[ii] Duvelisib is the only investigational PI3K-delta,gamma inhibitor in Phase 3 clinical development and has the potential to be a first-in-class treatment for certain types of hematologic malignancies, or blood cancers. AbbVie and Infinity Pharmaceuticals, Inc. are jointly developing duvelisib in oncology.

Infinity and AbbVie are conducting a broad clinical development program evaluating duvelisib in patients with hematologic malignancies. In addition to DYNAMO and DUO, ongoing studies include BRAVURA, a Phase 3, double-blind, placebo-controlled study in patients with relapsed iNHL; FRESCO, a Phase 2 study in patients with relapsed/refractory follicular lymphoma; CONTEMPO, a Phase 1b/2 study in treatment-naïve patients with follicular lymphoma, and SYNCHRONY, a Phase 1b study in CLL patients previously treated with a Bruton’s tyrosine kinase (BTK) inhibitor. AbbVie has also initiated a clinical study in duvelisib in combination with Venclexta (venetoclax) in patients with relapsed or refractory CLL, small lymphocytic lymphoma, iNHL or aggressive NHL, as well as a Phase 1 study of duvelisib in Japanese subjects with relapsed or refractory lymphoma. Information about duvelisib clinical trials can be found on www.clinicaltrials.gov.

About IPI-549
IPI-549 is an investigational, orally administered immuno-oncology development candidate that selectively inhibits PI3K-gamma. In preclinical studies, IPI-549 inhibits immune suppressive macrophages within the tumor microenvironment, whereas other immunotherapies such as checkpoint modulators more directly target immune effector cell function. As such, IPI-549 may have the potential to treat a broad range of solid tumors and represents a potentially complementary approach to restoring anti-tumor immunity in combination with other immunotherapies such as checkpoint inhibitors.

Duvelisib and IPI-549 are investigational compounds and their safety and efficacy have not been evaluated by the U.S. Food and Drug Administration or any other health authority.

On May 4, 2016 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported financial results for the three months ended March 31, 2016, and provided an operating forecast and program updates (Press release, Ligand, MAY 4, 2016, View Source [SID:1234511889]).

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Financial highlights for the first quarter of 2016 include:

First quarter total revenues were $29.6 million, including royalty revenues of $14.4 million.
First quarter adjusted EPS was $0.97 and GAAP EPS was $0.30.
A description of adjusted calculations and reconciliation to comparable GAAP financial measures is provided in the accompanying table titled "Adjusted Financial Measures."

"The year is off to a strong start with product approvals and launches from our partners, positive data from multiple programs and robust quarterly growth in revenues. We closed two acquisitions recently, including a major acquisition in the first quarter that will contribute significantly to our portfolio of fully funded programs and financial performance. In addition, we completed multiple new licensing agreements, including those with our recently acquired OmniAb technology," said John Higgins, Chief Executive Officer of Ligand. "We look forward to total revenues growing by approximately 60% in 2016, and to the approval and launch of up to five of our partnered products during the year."

First Quarter 2016 Financial Results

Total revenues for the first quarter of 2016 were $29.6 million, compared with $14.6 million for the same period in 2015. Royalty revenues were $14.4 million, compared with $10.3 million for the same period in 2015 primarily due to higher royalties from Promacta and Kyprolis. Material sales were $5.3 million, compared with $3.7 million for the same period in 2015 due to timing of Captisol purchases for use in clinical trials and commercial products. License and milestone revenues were $9.9 million, compared with $0.6 million for the same period in 2015 due primarily to the timing of milestones and upfront license fees earned, and the acquisition of Open Monoclonal Technology, Inc. ("OMT").

Cost of goods sold was $1.0 million for the first quarter of 2016, compared with $1.1 million for the same period in 2015 due to the timing and mix of Captisol sales. Amortization of intangibles was $2.5 million for the first quarter of 2016, compared with $0.6 million for the same period in 2015 due to additional amortization of intangibles related to the acquisition of OMT. Research and development expense was $4.0 million, compared with $3.4 million for the same period of 2015 as a result of timing of spending on internal development programs. General and administrative expense for the first quarter of 2016 was $6.8 million, compared with $6.0 million for the same period in 2015 due to costs associated with the OMT acquisition and non-cash stock-based compensation expense.

Net income for the first quarter of 2016 was $6.6 million, or $0.30 per diluted share, compared with net income for the first quarter of 2015 of $0.8 million, or $0.04 per diluted share. Adjusted net income for the first quarter of 2016 was $21.0 million, or $0.97 per diluted share, compared with adjusted net income for the first quarter of 2015 of $6.9 million, or $0.33 per diluted share.

As of March 31, 2016, Ligand had cash, cash equivalents and short-term investments of $113.2 million.

2016 Financial Forecast

Including the effects of the synthetic royalty acquisition from CorMatrix, Ligand now expects 2016 total revenues to be between $115 million and $119 million. This guidance assumes approximately $1 million of revenue from the CorMatrix assets in 2016. Ligand’s cash operating expenses are not expected to change due to this transaction. In 2016, adjusted EPS is projected to be in the range of $3.41 to $3.46, which includes approximately $0.04 of incremental EPS contribution from the acquisition.

For 2017, Ligand expects total revenues to exceed $160 million with adjusted EPS of more than $5.03. This guidance assumes approximately $2 million of revenue from the CorMatrix assets in 2017, and approximately $0.08 of incremental EPS contribution from the acquisition.

The adjusted earnings per diluted share guidance does not include changes in contingent liabilities, mark-to-market adjustment for amounts owed to licensors, non-cash stock-based compensation expense, non-cash debt-related costs, pro-rata non-cash net losses of Viking Therapeutics, non-cash amortization of acquired intangibles, non-cash tax expense and unissued shares relating to the Senior Convertible Note.

First Quarter 2016 and Recent Business Highlights

Recent Acquisitions

Today Ligand announced the acquisition of economic rights to multiple programs owned by CorMatrix. Ligand will pay $17.5 million and in return will receive a portion of revenue (synthetic royalty) from CorMatrix’s existing marketed products and will have the right to receive future synthetic royalties from potential future products. CorMatrix’s products are medical devices that are designed to permit the development and regrowth of human tissue. This transaction will be immediately accretive to Ligand and represents Ligand’s entry into the field of medical devices.
In January 2016, Ligand acquired OMT, Inc. and its OmniAb platform for consideration valued at the time of the acquisition at approximately $178 million. OmniAb license agreements existing at the time of acquisition initially added 16 shots on goal, with the potential for additional compounds to be generated from these partnerships. Partners at the time of acquisition included Amgen, Celgene, Genmab, Janssen, Merck KGaA, Pfizer, Seattle Genetics, Five Prime, Symphogen and various other biotechnology and pharmaceutical companies.
Portfolio Program Progress

Promacta/ Revolade

The European Commission approved Revolade (eltrombopag), a Novartis product, for the treatment of pediatric (age 1 and above) chronic immune (idiopathic) thrombocytopenic purpura (ITP) patients who are refractory to other treatments (e.g., corticosteroids, immunoglobulins). The approval includes the use of tablets as well as a new oral suspension formulation of Revolade, which is designed for younger children who may not be able to swallow tablets.
Kyprolis (carfilzomib), an Amgen Product Utilizing Captisol

On January 21, 2016, Amgen announced that FDA approved Kyprolis (carfilzomib) in combination with dexamethasone for the treatment of patients with relapsed or refractory multiple myeloma who have received one to three lines of therapy. The FDA also approved Kyprolis as a single agent for the treatment of patients with relapsed or refractory multiple myeloma who have received one or more lines of therapy, converting to full approval the initial accelerated approval Kyprolis received in July 2012 as a single agent.
On January 28, 2016, Amgen announced Health Canada approval of Kyprolis (carfilzomib) in combination with lenalidomide and dexamethasone for the treatment of patients with relapsed multiple myeloma who have received one to three lines of therapy.
Additional Pipeline and Partner Developments

Spectrum Pharmaceuticals received FDA approval of EVOMELA (melphalan) for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma, and for the palliative treatment of patients with multiple myeloma for whom oral therapy is not appropriate.
Spectrum Pharmaceuticals announced that the FDA granted seven years of Orphan Drug Exclusivity for EVOMELA for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma.
Duavive received EU pricing and was launched in Italy by Merck Sharp & Dohme, under license from Pfizer.
Alvogen Inc. received approval from the FDA for Captisol-enabled IV voriconazole.
Zydus Cadila announced the launch of Vivitra, a biosimilar of trastuzumab, in India. Ligand gained rights to royalties on sales of Vivitra in the March 2013 Selexis royalty acquisition.
Lundbeck announced the FDA accepted the resubmission of the NDA for IV carbamazepine. An action letter is anticipated before the end of 2016.
Retrophin announced completion of enrollment in the Phase 2 DUET study of Sparsentan for the treatment of focal segmental glomerulosclerosis (FSGS). The DUET study exceeded its enrollment target of 100 patients, and top-line results are expected in the third quarter of 2016.
Sage Therapeutics presented data that expanded scientific, clinical and burden-of-illness data for SAGE-547 at the 68th American Academy of Neurology Annual Meeting.
Coherus BioSciences and Baxalta announced that CHS-0214, a proposed biosimilar of Enbrel (etanercept) to which Ligand gained royalty rights in the March 2013 Selexis royalty acquisition, met its primary endpoint in a confirmatory, double-blind, randomized, controlled, two-part clinical study. This ongoing study is evaluating the efficacy and safety of CHS-0214 compared with Enbrel in patients with moderate-to-severe rheumatoid arthritis that is inadequately controlled with methotrexate.
Viking Therapeutics highlighted positive data from a Phase 1b trial of VK2809 (TR Beta) in subjects with mild hypercholesterolemia at the 65th Annual Scientific Session and Expo of the American College of Cardiology.
Merrimack Pharmaceuticals presented data on MM-302, MM-141 and MM-151 at the 2016 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting.
Opthea Limited announced that the primary objective of safety in the dose-escalation phase of its ongoing first-in-human clinical trial of OPT-302, a novel VEGF-C/D ‘Trap’ therapy for wet age-related macular degeneration, had been met.
Marinus Pharmaceuticals announced that the FDA granted Orphan Drug designation for ganaxolone IV for the treatment of status epilepticus. A Phase 1 clinical trial evaluating the safety, tolerability and pharmacokinetics of ganaxolone IV is expected to initiate in the first half of 2016.
Marinus Pharmaceuticals presented preclinical data of ganaxolone IV, which showed robust activity in the model. The data were presented during an oral and poster presentations at the 68th American Academy of Neurology Annual Meeting.
AVEO Oncology announced granting CANbridge Life Sciences worldwide rights, excluding the United States, Canada and Mexico, to AV-203, AVEO’s clinical-stage ErbB3 (HER3) inhibitory antibody candidate.
The journal Nature published an article highlighting the efficacy of Gilead’s GS-5734 against the Ebola virus in rhesus monkeys.
New Licensing Deals

Ligand announced a worldwide license agreement with Emergent BioSolutions that allows Emergent to use the OmniAb platform to discover fully human mono- and bispecific antibodies. Ligand is eligible to receive annual access payments, fees on patent filings, milestone payments and royalties on future net sales of any antibodies discovered under the license.
Ligand announced a worldwide license agreement with Tizona Therapeutics that allows Tizona to use the OmniAb platform to discover fully human mono- and bispecific antibodies. Ligand is eligible to receive annual access payments, fees on patent filings, milestone payments and royalties on future net sales of any antibodies discovered under the license.
Ligand announced a worldwide license agreement with ABBA Therapeutics that allows ABBA to use the OmniAb platform to discover fully human mono- and bispecific antibodies. Ligand is eligible to receive milestone payments and royalties on future net sales of any antibodies discovered under the license.
Ligand entered into a Clinical Use Agreement with XTL Biopharmaceuticals to supply Captisol for use in the formulation of its lead drug, hCDR1, for the treatment of systemic lupus erythematosus. Under the terms of the agreement, Ligand is eligible to receive milestones and revenue from clinical Captisol sales.
Internal Glucagon Receptor Antagonist (GRA) Program

Ligand scientists gave an oral presentation on GRA at ENDO 2016 and presented a poster at the Levine-Riggs Diabetes Research Symposium, which highlighted data from the Phase 1b trial demonstrating that GRA significantly reduced fasting and post-prandial glucose in subjects with type 2 diabetes.
Adjusted Financial Measures

The adjusted financial measures discussed above and in the tables below for the three months ended March 31, 2016 and 2015 exclude stock-based compensation expense, non-cash debt-related costs, non-cash tax expense, changes in contingent liabilities, non-cash amortization of acquired intangibles, non-cash pro-rata net losses of Viking Therapeutics, fair value adjustments to Viking Therapeutics convertible note receivable, mark-to-market adjustment for amounts owed to licensors and unissued shares relating to the Senior Convertible Note.

Management has presented net income, net income per share, income from continuing operations and income from continuing operations per share in accordance with GAAP and on an adjusted basis. Ligand believes the presentation of adjusted financial measures provides useful supplementary information to investors and reflects amounts that are more closely aligned with the cash profits for the period as the items that are excluded from adjusted net income are all non-cash items. Ligand uses these adjusted financial measures in connection with its own budgeting and financial planning. These adjusted financial measures are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP.

On May 04, 2016 MacroGenics, Inc. (NASDAQ:MGNX), a clinical-stage biopharmaceutical company focused on discovering and developing innovative monoclonal antibody-based therapeutics for the treatment of cancer, as well as autoimmune disorders and infectious diseases, reported a corporate progress update and reported financial results for the quarter ended March 31, 2016 (Press release, MacroGenics, MAY 4, 2016, View Source [SID:1234511934]).

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"MacroGenics made steady progress across its pipeline of clinical and research-stage compounds during the first quarter of 2016," said Scott Koenig, M.D., Ph.D., President and CEO of MacroGenics. "The SOPHIA study, a Phase 3 trial of margetuximab, our Fc-optimized anti-HER2 monoclonal antibody, continues to enroll patients with metastatic breast cancer. Our immuno-oncology efforts, highlighted by the B7-H3 franchise, also progressed nicely. We anticipate sharing additional enoblituzumab monotherapy study data later this year. Further, our portfolio of innovative molecules was the subject of five poster presentations at the recent American Association of Cancer Research annual meeting."

"As we look forward in 2016 and beyond, we expect to continue our pace of generating promising clinical development candidates based on MacroGenics’ technology platforms," commented Dr. Koenig. "In particular, we expect to submit one IND later this year and two additional INDs in 2017."

Pipeline Update

Margetuximab. Recent highlights related to our Fc-optimized monoclonal antibody that targets the human epidermal growth factor receptor 2, or HER2, include:

SOPHIA Study: MacroGenics’ Phase 3 pivotal study in patients with HER2-positive metastatic breast cancer is ongoing, as the Company continues to initiate sites and enroll patients. This study is evaluating the efficacy of margetuximab plus chemotherapy compared to trastuzumab plus chemotherapy in approximately 530 patients following progression after at least two lines of previous therapy. The Company is targeting completion of this study in 2018.
Phase 1b/2 Gastric Cancer Study: During the first quarter of 2016, MacroGenics dosed the first patient in a Phase 1b/2 clinical trial of margetuximab in combination with pembrolizumab, an anti-PD-1 therapy, in patients with advanced HER2-positive gastric cancer. Treatment options for these patients are limited and this proposed combination regimen being studied would avoid chemotherapy while exploiting the expected enhanced immune-mediated killing properties of both margetuximab and pembrolizumab. This trial is being conducted in collaboration with Merck and is currently recruiting patients in the United States, with plans to expand into Asian sites later this year.
B7-H3 Franchise. MacroGenics is developing a portfolio of therapeutics that target B7-H3, a member of the B7 family of molecules involved in immune regulation. The Company is advancing multiple programs that target B7-H3 through complementary mechanisms of action and take advantage of this antigen’s broad expression across multiple solid tumor types. Current ongoing development programs include:

Enoblituzumab (MGA271): The Company continues to recruit patients in three ongoing studies of enoblituzumab, an Fc-optimized monoclonal antibody that targets B7-H3. These studies include one monotherapy study and two combination studies with each of ipilimumab and pembrolizumab.
MGD009: This DART molecule targeting B7-H3 and CD3 is being evaluated in a Phase 1 study across multiple solid tumor types. The results of preclinical studies of MGD009 were presented in an oral presentation at Keystone Symposia’s Antibodies as Drugs (X2) conference in March. These studies demonstrated that MGD009 redirected T cells to kill B7-H3-expressing human cancer cell lines from a range of tumor types in multiple in vitro and in vivo models.
B7-H3 Antibody-drug Conjugate: At the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April, MacroGenics presented a poster that evaluated the therapeutic potential of anti-B7-H3 ADCs in multiple in vitro and in vivo models representing human cancer types that overexpress B7-H3.
DART Product Candidates. There are currently six DART molecules in Phase 1 clinical development, including MGD006 (CD123 x CD3, also known as S80880), MGD007 (gpA33 x CD3), MGD011 (CD19 x CD3, also known as JNJ-64052781), MGD010 (CD32B x CD79B), MGD009 (B7-H3 x CD3) and PF-06671008 (P-cadherin x CD3). The Company expects to submit IND applications for two additional DART molecules in 2017. These two product candidates are:

MGD013: MacroGenics is developing MGD013 to simultaneously block two immune checkpoint molecules, PD-1 and LAG-3. At the recent AACR (Free AACR Whitepaper) meeting, MacroGenics demonstrated that MGD013 has the potential to enhance T-cell immunomodulatory activity as compared to its individual components.
MGD014: MGD014 is a DART molecule that is being developed to eliminate latent HIV infection. MGD014 is being developed under a contract awarded to MacroGenics by the National Institute of Allergy and Infectious Diseases for up to $24.5 million. This is the first infectious disease DART program planned for clinical testing.
Beyond MGD013 and MGD014, MacroGenics continues to generate and evaluate multiple other candidates that target a range of immune regulatory and other molecules using its proprietary platforms. In addition to the B7-H3 ADC and MGD013 posters presented at the recent AACR (Free AACR Whitepaper) meeting, the Company also presented posters on the following three preclinical DART molecules at the meeting: EphA2 x CD3, IL13Rα2 x CD3 and ROR1 x CD3.

First Quarter 2016 Financial Results

Cash Position: Cash, cash equivalents and investments as of March 31, 2016 were $304.4 million, compared to $339.0 million as of December 31, 2015.
Revenue: Total revenue, consisting primarily of revenue from collaborative agreements, was $2.8 million for the quarter ended March 31, 2016, compared to $71.3 million for the quarter ended March 31, 2015. This decrease is primarily due to the $62.3 million in revenue recognized under the Janssen agreement in the first quarter of 2015.
R&D Expenses: Research and development expenses were $27.3 million for the quarter ended March 31, 2016, compared to $21.5 million for the quarter ended March 31, 2015. This increase was due primarily to increased activity in MacroGenics’ preclinical immune checkpoint programs, including MGD013, and the initiation of two Phase 1 clinical trials combining enoblituzumab with other compounds. This increase was partially offset by a decrease in margetuximab expense as a result of start-up costs in 2015 for the SOPHIA trial.
G&A Expenses: General and administrative expenses were $6.1 million for the quarter ended March 31, 2016, compared to $4.7 million for the quarter ended March 31, 2015. This increase was primarily due to higher labor-related costs, including stock-based compensation expense.
Net Loss: Net loss was $30.3 million for the quarter ended March 31, 2016, compared to net income of $45.1 million for the quarter ended March 31, 2015.
Shares Outstanding: Shares outstanding as of March 31, 2016 were 34,536,621.

On May 04, 2016 Arbutus Biopharma Corporation (Nasdaq:ABUS), an industry-leading Hepatitis B Virus (HBV) therapeutic solutions company, reported its first quarter 2016 unaudited financial results and provided a corporate update (Press release, Arbutus Biopharma, MAY 4, 2016, View Source [SID:1234511926]).

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"We are focused on advancing the development of our candidates to support clinical combination studies in 2017. In addition, we continue to grow our HBV pipeline through new product innovation and partnerships," said Dr. Mark J. Murray, Arbutus’ President and CEO. "HBV remains a significant global unmet medical need and market opportunity, and we believe our combination approach is the key to a cure. We are funded into late 2018, allowing us to execute our development plans with the aim of generating meaningful data."

Recent Highlights

Ongoing Phase II study of ARB-1467 evaluating at least two doses of ARB-1467 (0.2 mg/kg and 0.4 mg/kg) in HBV infected patients.
Progress in developing a proprietary GalNAc conjugate technology to enable subcutaneous delivery of an RNAi therapeutic targeting hepatitis B surface antigen and/or other HBV targets.
Licensing and research collaboration agreement with the Saint Louis University Liver Center to develop Ribonuclease H (RNaseH) inhibitors and further expand Arbutus’ HBV pipeline.
Preclinical combination data presented at EASL 2016 showing additive to synergistic activity when combining AB-423 (core protein/capsid assembly inhibitor) with entecavir.
Preclinical combination data presented at other scientific conferences in April 2016 showing:

ARB-1467 (RNAi), AB-423 (core protein/capsid assembly inhibitor), and ARB-199 (cccDNA formation inhibitor) are potent and selective inhibitors of their respective targets;
Additive or synergistic activity (and no antagonism) when combining these candidates with "nuc" standard of care; and
Additive activity when combining ARB-1467 with AB-423.
Upcoming Milestones

2016: Preclinical data release on multiple pipeline programs, including results from preclinical combination studies of proprietary pipeline candidates
3Q16: Single dose HBsAg reduction data from the ARB-1467 (RNAi) Phase II trial in HBV-infected patients
4Q16: HBsAg reduction data from the multiple dose portion of the Phase II trial testing ARB-1467 in HBV-infected patients
2H16: Initiate clinical immune biomarker study for TLR9 agonist ARB-1598 in chronically infected HBV patients
2H16: File IND (or equivalent) for cccDNA formation inhibitor
2H16: File IND (or equivalent) for core protein/capsid assembly inhibitor
2H16: File IND (or equivalent) for ARB-1740 (RNAi)
2H16: Phase II results for TKM-PLK1 in HCC
2017: Initiate clinical combination studies with two or more proprietary product candidates
Financial Results

On January 1, 2016, Arbutus’ functional currency changed from the Canadian dollar to the U.S. dollar based on the analysis of changes in the primary economic environment in which the Company operates. The change in functional currency is accounted for prospectively from January 1, 2016 and financial statements prior to and including the year-ended December 31, 2015 will not be restated for the change in functional currency.

Cash, Cash Equivalents and Investments

As at March 31, 2016, Arbutus had cash and cash equivalents of $144.8 million and short-term and long-term investments of $37.9 million for an aggregate of $182.7 million, as compared to cash, cash equivalents and short-term investments of $191.4 million at December 31, 2015.

Non-GAAP Net Loss

The non-GAAP net loss for Q1 2016 was $9.9 million ($0.19 loss per common share). The non-GAAP net loss for the three-months ended March 31, 2016 excludes the aggregate of $6.0 million non-cash compensation expense included in research, development, collaborations and contracts expenses, and general and administrative expenses in connection to certain share repurchase provisions and arising from the merger with Arbutus Inc. (see below).

Net loss

For Q1 2016, net loss was $15.9 million ($0.31 basic and diluted loss per common share) as compared to a net loss of $12.0 million ($0.40 basic and diluted loss per common share) for Q1 2015.

Revenue

Revenue was $0.6 million for Q1 2016 as compared to $4.7 million for Q1 2015.

Under the Monsanto contract, Arbutus earned revenue from research and collaboration activities, as well as license fees related to Monsanto’s use of the Company’s delivery technology and related intellectual property in agriculture. Research activities under the arrangement ended in Q4 2015, and in March 2016, Monsanto exercised its option to acquire 100% of the outstanding shares of the Company’s wholly-owned subsidiary, Protiva Agricultural Development Company ("PADCo"). The Company received an exercise fee of $1.0 million, which has been recorded as other income in Q1 2016.

Under the DoD contract to develop TKM-Ebola, Arbutus was being reimbursed for costs incurred, including an allocation of overheads, and was being paid an incentive fee. In Q4 2015, Arbutus received formal notification from the DoD terminating the contract, subject to the completion of certain post-termination obligations. Arbutus has not recorded any revenue from the DoD in Q1 2016.

In November 2014, Arbutus entered into a collaboration with Dicerna for the use of its technology to develop, manufacture, and commercialize products related to the treatment of PH1. Arbutus recorded $0.2 million in licensing revenue in Q1 2016, which relates to the earned portion of the upfront payment of $2.5 million for the use of its technology. Arbutus also recorded $0.1 million in collaboration revenue in Q1 2016, which relates services provided to, Dicerna.

Under a licensing and collaboration arrangements with Alnylam and Acuitas, the Company earns licensing fee revenue from Acuitas as well as further potential development and commercial milestones from Alnylam for the use of its LNP technology. Arbutus recorded $0.3 million in licensing revenue in Q1 2016.

Research, Development, Collaborations and Contracts Expenses

Research, development, collaborations and contracts expenses were $13.1 million in Q1 2016 as compared to $10.6 million in Q1 2015.

R&D expenses increased during Q1 2016 as compared to Q1 2015 as Arbutus increased spending on ARB-1467, for which Phase I clinical trials were initiated in 2015. Arbutus also incurred incremental costs related to an increase in activities for preclinical HBV programs acquired from the merger with Arbutus Inc.

R&D compensation expense increased in Q1 2016 as compared to Q1 2015 due to an increase in the number of employees in support of the Company’s expanded portfolio of product candidates and from the merger with Arbutus Inc. As a result of the expiry of share repurchase rights included in the consideration paid for Arbutus Inc., as compared to Q1 2015, the Company recorded $4.8 million of incremental non-cash compensation expense, of which $1.2 million has been included as part of research, development, collaborations and contracts expense, and $3.6 million included as part of general and administrative expense.

General and Administrative

General and administrative expenses were $7.2 million in Q1 2016 as compared to $2.7 million in Q1 2015.

The increase in general and administrative expenses was largely due to an increase in compensation expense linked to an increase in employee base and incremental corporate expenses to support the growth of the Company following the completion of the merger with Arbutus Inc. This includes incremental non-cash compensation expense of $3.6 million related to the expiry of repurchase rights on shares issued as part of consideration paid for the merger with Arbutus Inc. (see above).

Acquisition Costs

In Q1 2015, the Company incurred $9.3 million in costs related to the merger with Arbutus Inc., which was completed on March 4, 2015.

Other Income (Losses)

On January 1, 2016, the Company’s functional currency changed from the Canadian dollar to the U.S. dollar based on an analysis of changes in the primary economic environment in which Arbutus operates. The Company expects to incur substantial expenses and hold cash and investment balances in Canadian dollars, and as such, will remain subject to risks associated with foreign currency fluctuations. During Q1 2016, Arbutus recorded a foreign exchange gain of $2.9 million which is primarily an unrealized gain related to an appreciation in the value of Canadian dollar funds from the previous period, when converted to the Company’s functional currency of U.S. dollars.

On March 4, 2016, Monsanto exercised its option to acquire 100% of the outstanding shares of Arbutus’s wholly-owned subsidiary, PADCo, as described above and paid an exercise fee of $1.0 million.

The aggregate decrease in fair value of the Company’s common share purchase warrants was $0.2 million in Q1 2016 as compared to an increase in the fair value of common share purchase warrants outstanding of $1.2 million in Q1 2015. The decrease is a result of a decrease in the Company’s share price from the previous reporting date, and vice versa.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)

March 31, December 31,
2016 2015

Cash and cash equivalents $ 144.8 $ 166.8
Short-term investments 27.8 14.5
Accounts receivable 0.4 1
Other current assets 1.9 1.6
Long-term investments 10.1 10.1
Property and equipment, net 3.2 3.2
Intangible assets 352.6 352.6
Goodwill 162.5 162.5
Total assets $ 703.3 $ 712.3
Accounts payable and accrued liabilities 7.7 8.8
Total deferred revenue 1 1.1
Warrant liability 0.7 0.9
Liability-classified options 1.8 -
Contingent consideration 7.7 7.5
Deferred tax liability 146.3 146.3
Total stockholders’ equity 538.1 547.7
Total liabilities and stockholders’ equity $ 703.3 $ 712.3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in millions)

Three-months ended March 31,
2016 2015

Total revenue $ 0.6 $ 4.7
Operating expenses
Research, development, collaborations and contracts 13.2 10.6
General and administrative 7.2 2.7
Depreciation of property and equipment 0.2 0.1
Acquisition costs - 9.3
Loss from operations (20.0 ) (18.0 )
Other income 4.1 6.0
Net loss (15.9 ) (12.0 )
Cumulative translation adjustment - (9.2 )
Comprehensive loss $ (15.9 ) $ (21.2 )

UNAUDITED GAAP TO NON-GAAP RECONCILIATION:
NET LOSS AND NET LOSS PER SHARE
(in millions, except per share amounts)
Three-months ended March 31,
2016 2015

GAAP net loss $ (15.9 ) $ (12.0 )
Adjustment:
Compensation expense of expired repurchase provision rights 6.0 1.2
Non-GAAP net loss (9.9 ) (10.8 )

GAAP net loss per common share (0.31 ) (0.40 )
Non-GAAP net loss per common share (0.19 ) (0.36 )

Use of Non-GAAP Financial Measures

The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) on a basis consistent for all periods presented. In addition to the results reported in accordance with U.S. GAAP, the Company provides additional measures that are considered "non-GAAP" financial measures under applicable SEC rules. These non-GAAP financial measures should not be viewed in isolation or as a substitute for GAAP net loss and basic and diluted net loss per common share.

The company evaluates items on an individual basis, and considers both the quantitative and qualitative aspects of the item, including (i) its size and nature, (ii) whether or not it relates to the Company’s ongoing business operations, and (iii) whether or not the company expects it to occur as part of its normal business on a regular basis. In the three months ended March 31, 2016, the Company’s non-GAAP net loss and non-GAAP net loss per common share excludes the compensation expense related to the expiration of repurchase provision rights connected with certain common shares issued as part of total consideration for the acquisition of Arbutus Inc. The Company believes that the exclusion of these items provides management and investors with supplemental measures of performance that better reflect the underlying economics of the Company’s business. In addition, the Company believes the exclusion of these items is important in comparing current results with prior period results and understanding projected operating performance.