On February 25, 2016 Radius Health, Inc. ("Radius" or the "Company") (Nasdaq:RDUS), a science-driven biopharmaceutical company that is committed to developing innovative therapeutics in the areas of osteoporosis, oncology and endocrine diseases, reported its financial results for the fourth quarter and full year ended December 31, 2015, and provided recent corporate highlights (Filing, 8-K, Radius, FEB 25, 2016, View Source [SID:1234509187]). As of December 31, 2015, Radius had $473.3 million in cash, cash equivalents and marketable securities.

"Radius continues to make significant progress in advancing its pipeline, including the submission of our MAA in Europe for our investigational drug abaloparatide-SC for the treatment of women with postmenopausal osteoporosis who are at risk for a fracture, which is under regulatory review. We are on track to submit an NDA in the U.S. at the end of the first quarter of 2016," said Robert Ward, President and Chief Executive Officer of Radius. "We are continuing our productive partnering discussions and anticipate entering into an abaloparatide collaboration prior to a potential first commercial launch. We have continued to make progress across the portfolio with the abaloparatide transdermal patch program and RAD1901 trials in breast cancer and vasomotor symptoms."

Pipeline Updates

Abaloparatide-SC

In November 2015, Radius submitted a marketing authorization application ("MAA") to the European Medicines Agency ("EMA"), which subsequently was validated and is currently undergoing regulatory review. Radius plans to submit a new drug application ("NDA") in the United States at the end of the first quarter of 2016. Subject to regulatory review and a favorable regulatory outcome, Radius anticipates the first commercial sales of abaloparatide-SC will take place in 2016.

Abaloparatide-TD

Radius also is developing abaloparatide-transdermal, which it refers to as abaloparatide-TD, based on 3M’s patented Microstructured Transdermal System technology for potential use as a short wear-time transdermal patch. During 2014, Radius reported progress towards the development of an optimized transdermal patch that may be capable of demonstrating comparability to abaloparatide-SC. In preliminary, nonhuman primate pharmacokinetic studies, Radius achieved a desirable pharmacokinetic profile, with comparable AUC, Cmax, Tmax and T1/2 relative to abaloparatide-SC. Radius believes that these results support continued clinical development of abaloparatide-TD toward future global regulatory submissions as a potential post-approval line extension of the investigational drug abaloparatide-SC. Radius commenced a human replicative clinical evaluation of the optimized abaloparatide-TD patch in December 2015 with the goal of achieving comparability to abaloparatide-SC.

RAD1901

Radius continues to enroll and dose patients in the United States in its Phase 1 multicenter, open-label, two-part, dose-escalation study of RAD1901 in postmenopausal women with advanced estrogen receptor positive and HER2-negative breast cancer. The study is designed to determine the recommended dose for a Phase 2 clinical trial and includes a preliminary evaluation of the potential anti-tumor effect of RAD1901. In December 2015, Radius reported on the progress of this study at the San Antonio Breast Cancer Symposium in San Antonio, TX. In addition, in December 2015, Radius commenced a Phase 1 FES-PET study in patients with metastatic breast cancer in the European Union, which includes the use of FES-PET imaging to assess estrogen receptor occupancy in tumor lesions following RAD1901 treatment.

In January 2016, Radius entered into a worldwide clinical collaboration with Novartis Pharmaceuticals to evaluate the safety and efficacy of combining RAD1901 with Novartis’ investigational agent LEE011 (ribociclib), a cyclin-dependent kinase 4/6 inhibitor, and BYL719 (alpelisib), an investigational phosphoinositide 3-kinase inhibitor.

RAD1901 also is being evaluated at low doses as an estrogen receptor ligand for the potential relief of the frequency and severity of moderate to severe hot flashes in postmenopausal women with vasomotor symptoms. Radius commenced a Phase 2b clinical study of RAD1901 for the potential treatment of postmenopausal vasomotor symptoms in December 2015.

Radius Expects the Following Upcoming Milestones

· Abaloparatide-SC
· Submit an NDA in the United States for abaloparatide-SC at the end of the first quarter of 2016.
· Receive opinion from the Committee for Medicinal Products for Human Use regarding the EMA’s review of the abaloparatide-SC MAA.
· Enter into a collaboration for the potential commercialization of abaloparatide-SC prior to a commercial launch.
· Abaloparatide-TD
· Complete the clinical evaluation of the optimized abaloparatide-TD patch during 2016.
· RAD1901
· Complete the dose-escalation study for RAD1901 in metastatic breast cancer patients by the middle of 2016.
· Initiate the expansion cohorts in breast cancer during 2016.

Radius Expects To Make Presentations at the Following Upcoming Conferences

· Abstract Presentations at the Endocrine Society Annual Meeting, April 1-4, 2016, in Boston, MA. The titles of the presentations are as follows:

"Abaloparatide Significantly Reduces Vertebral and Non-vertebral Fractures and Increases BMD Regardless of Baseline Risk"

"RAD1901 a Novel Estrogen Receptor Ligand with a Unique Pharmacologic Profile for Potential Use in the Treatment of Postmenopausal Vasomotor Symptoms"

· Abstract Presentations at the World Congress of Osteoporosis, Osteoarthritis and Musculoskeletal Diseases, April 14-17, 2016, in Spain. The titles of the presentations are as follows:

"Effects of Abaloparatide on Vertebral, Non-vertebral, Major Osteoporotic and Clinical Fracture Incidence in Postmenopausal Women with Osteoporosis: Results of the Phase 3 Active Trial"

"Eighteen Months of Treatment with Abaloparatide Followed by Six Months of Treatment with Alendronate in Postmenopausal Women with Osteoporosis- Results of the ACTIVExtend Trial"

"Effect of Investigational Treatment Abaloparatide for Prevention of Major Osteoporotic Fracture or any Fracture is Not Altered by Baseline Fracture Probability"

· Abstract presentation at the American Association of Cancer Research Annual Meeting 2016, April 16-20, 2016, in New Orleans, LA.

"RAD1901, an orally available SERD, as an effective combination partner in ER+ breast cancer"

· IMPAKT 2016 Conference, May 12-14, 2016, in Brussels, Belgium.

"RAD1901, a novel oral, selective estrogen receptor degrader (SERD), for the treatment of advanced estrogen receptor (ER)+ breast cancer (BC)"

· Cowen and Company 36th Annual Healthcare Conference, March 7-9, 2016, in Boston, MA.
· Deutsche Bank 41st Annual Healthcare Conference, May 4-5, 2016, in Boston, MA.
· Bank of America Merrill Lynch 2016 Healthcare Conference, May 10-12, 2016, in Las Vegas, NV.

Recent Corporate Highlight

· On December 7, 2015, Radius announced the appointment of Jean-Pierre (JP) Garnier to its Board of Directors, and as Chair of the Compensation Committee. Mr. Garnier is currently Chairman of the Board of Actelion Ltd., and was previously Chief Executive Officer of GlaxoSmithKline plc.

Fourth Quarter 2015 Financial Results

For the three months ended December 31, 2015, Radius reported a net loss of $33.2 million, or $0.77 per share, as compared to a net loss of $18.0 million, or $0.55 per share for the three months ended December 31, 2014. The increase in net loss for the three months ended December 31, 2015 as compared to the three months ended December 31, 2014 was primarily due to an increase in research and development and general and administrative expenses, partially offset by a decrease in interest expense.

Research and development expenses for the three months ended December 31, 2015 were $22.2 million, compared to $11.6 million for the same period in 2014. The increase for the 2015 period as compared to the 2014 period was primarily attributable to an increase in contract service costs associated with the development of RAD1901, consulting costs incurred to support Radius’ MAA and planned NDA submissions for abaloparatide-SC and an increase in compensation expense, including an increase of $0.6 million of non-cash stock-based compensation expense, due to an increase in research and development headcount from December 31, 2014 to December 31, 2015.

General and administrative expenses for the three months ended December 31, 2015 were $11.6 million, compared to $5.6 million for the same period in 2014. The increase for the 2015 period as compared to the 2014 period was primarily attributable to an
increase in legal fees and professional support costs, including the costs associated with growing Radius’ headcount and preparing for the potential commercialization of abaloparatide-SC.

There was no interest expense for the three months ended December 31, 2015, compared to $0.8 million for the same period in 2014. The decrease was a result of the prepayment of all amounts owed under Radius’ loan and security agreement on August 4, 2015.

Full Year 2015 Financial Results

For the twelve months ended December 31, 2015, Radius reported a net loss of $101.5 million, or $2.56 per share, as compared to a net loss of $62.5 million, or $4.04 per share, for the twelve months ended December 31, 2014. The increase in net loss for 2015 was primarily due to an increase in research and development expenses, general and administrative expenses, and loss on retirement of note payable.

Research and development expenses for the twelve months ended December 31, 2015 were $68.3 million, compared to $45.7 million for 2014. The increase for 2015 was primarily attributable to an increase in compensation expense, including an increase of $5.9 million of non-cash stock-based compensation expense, due to an increase in research and development headcount from December 31, 2014 to December 31, 2015, an increase in consulting costs incurred to support Radius’ MAA and planned NDA submissions for abaloparatide-SC and an increase in contract service costs associated with the development of RAD1901. These increases were partially offset by a decrease in the costs associated with the abaloparatide-SC Phase 3 ACTIVE and ACTIVExtend clinical trials.

General and administrative expenses for the twelve months ended December 31, 2015 were $30.8 million, compared to $13.7 million for 2014. The increase for 2015 as compared to 2014 was primarily attributable to an increase in legal fees and professional support costs, including the costs associated with growing Radius’ headcount and preparing for the potential commercialization of abaloparatide-SC, subject to favorable regulatory review. This increase also was driven by an increase in compensation expense, including an increase of $1.8 million of non-cash stock-based compensation expense, due to an increase in general and administrative headcount from December 31, 2014 to December 31, 2015.

For the twelve months ended December 31, 2015, loss on retirement of note payable was $1.6 million, compared to $0.2 million for 2014. The loss on retirement of note payable for 2015 was a result of the prepayment of all amounts owed under Radius’ loan and security agreement on August 4, 2015.

As of December 31, 2015, Radius had $473.3 million in cash, cash equivalents and marketable securities. Based upon Radius’ cash, cash equivalents and marketable securities balance, it believes that, prior to the consideration of revenue from the

potential future sales, subject to favorable regulatory review, of any of its investigational products, it has sufficient capital to fund its development plans, U.S. commercial scale-up and other operational activities into 2018.

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About Abaloparatide

Abaloparatide is an investigational therapy for the potential treatment of women with postmenopausal osteoporosis who are at an increased risk for a fracture. Abaloparatide is a novel synthetic peptide that engages the parathyroid hormone receptor (PTH1 receptor) and was selected for clinical development based on its favorable bone building activity.

Abaloparatide has completed Phase 3 development for potential use as a daily self-administered injection (abaloparatide-SC). In the fourth quarter of 2015, Radius’ Marketing Authorisation Application (MAA) for abaloparatide-SC for the treatment of patients with postmenopausal osteoporosis was validated and is currently undergoing regulatory review by the European Medicines Agency (EMA). Radius plans to submit a New Drug Application (NDA) for abaloparatide-SC to the US Food and Drug Administration (FDA) at the end of the first quarter of 2016.

Radius also is developing abaloparatide-transdermal (abaloparatide-TD) based on 3M’s patented Microstructured Transdermal System technology for potential use as a short wear-time transdermal patch.

About RAD1901

RAD1901 is a selective estrogen receptor down-regulator/degrader (SERD), which at high doses is being evaluated for potential use as an oral non-steroidal treatment for hormone-driven, or hormone-resistant, breast cancer. RAD1901 is currently being investigated for potential use in postmenopausal women with advanced estrogen receptor positive (ER+), HER2-negative breast cancer, the most common form of the disease. Studies completed to date indicate that the compound has the potential for use as a single agent or in combination with other therapies to overcome endocrine resistance in breast cancer.

RAD1901 also is being evaluated in a Phase 2b study at low doses for potential relief of the frequency and severity of moderate to severe hot flashes in postmenopausal women with vasomotor symptoms. Additional information on the clinical trial program of RAD1901 is available on www.clinicaltrials.gov.

RAD140

RAD140 is a non-steroidal selective androgen receptor modulator (SARM) that is currently in preclinical development for potential use in multiple indications including cancer. RAD140 resulted from an internal drug discovery program focused on the androgen receptor pathway, which is highly expressed in many breast cancers. Due to its receptor and tissue selectivity, potent oral activity and long half-life, RAD140 could have clinical potential in the treatment of conditions where androgen modulation may play a role.

On February 25, 2016 TESARO, Inc. (NASDAQ:TSRO), an oncology-focused biopharmaceutical company, reported operating results for fourth-quarter 2015 and provided an update on the Company’s development programs (Press release, TESARO, FEB 25, 2016, View Source [SID:1234509222]).

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"2016 is poised to be another exciting year for TESARO as we continue to drive awareness of CINV and work to make VARUBI available to all eligible patients," said Lonnie Moulder, CEO of TESARO. "We have implemented a comprehensive, global development program for niraparib in ovarian cancer that spans the treatment and maintenance settings, several patient subgroups and multiple lines of therapy, and we are also exploring combination and monotherapy approaches for additional tumor types. We continue to anticipate that data from our NOVA and QUADRA registration trials of niraparib will become available during the second quarter. Our NOVA study results will be the first data from a prospectively designed, randomized Phase 3 trial for a PARP inhibitor, and the full data from this global trial are intended to support regulatory applications and submissions to payors and pricing authorities as part of our commercialization strategy for the U.S. and European markets. We are enthusiastic about the potential for our pipeline candidates to create significant value for shareholders, particularly by expanding our niraparib development program into additional tumor types and advancing our portfolio of immuno-oncology candidates into the clinic."

Recent Business Highlights

TESARO launched VARUBI (oral rolapitant) in November of 2015, following U.S. Food and Drug Administration (FDA) approval for use in combination with other antiemetic agents in adults, for the prevention of delayed nausea and vomiting associated with initial and repeat courses of emetogenic cancer chemotherapy, including, but not limited to, highly emetogenic chemotherapy.

The intravenous (IV) rolapitant development program is complete, and a New Drug Application (NDA) will be submitted to the FDA in the first quarter of 2016.

Patient treatment continues in the Phase 3 NOVA trial of niraparib in patients with ovarian cancer, and based upon the observed event rate, TESARO continues to expect data in the second quarter of 2016.

Enrollment continues in the QUADRA trial of niraparib for the treatment of patients with ovarian cancer who have received three or more prior lines of chemotherapy, and data from this trial is anticipated to become available in the second quarter.

Antibody drug candidates targeting PD-1, TIM-3, and LAG-3 continue to advance, and the Investigational New Drug (IND) application for TSR-042, our anti-PD-1 antibody candidate, has been cleared by the FDA.

Fourth Quarter 2015 Financial Results

TESARO reported a net loss of $75.8 million, or ($1.89) per share, for the fourth quarter of 2015, compared to a net loss of $47.9 million, or ($1.33) per share, for the fourth quarter of 2014.

Research and development expenses increased to $42.9 million for the fourth quarter of 2015, compared to $29.8 million for the fourth quarter of 2014, driven primarily by higher costs related to the ongoing registration trials of niraparib, development activities related to the rolapitant IV NDA submission, and advancement of our immuno-oncology portfolio, in addition to increased headcount.

Selling, general and administrative expenses increased to $27.9 million for the fourth quarter of 2015, compared to $7.4 million for the fourth quarter of 2014, primarily due to commercial activities in support of the launch of VARUBI, increased commercial headcount, and higher professional service fees.

Acquired in-process research and development expenses totaled $1.0 million for the fourth quarter of 2015 and included a milestone payment related to our immuno-oncology portfolio, compared to $7.0 million for the fourth quarter of 2014, which included development milestones for rolapitant and the immuno-oncology portfolio.

Operating expenses, as described above, include total non-cash, stock-based compensation expense of $8.4 million for the fourth quarter of 2015, compared to $3.1 million for the fourth quarter of 2014.

As of December 31, 2015, TESARO had approximately $230.1 million in cash and cash equivalents and approximately 40.3 million outstanding shares of common stock.

Today TESARO announced a definitive agreement for a private placement that would result in proceeds of $155 million. TESARO expects its cash utilization to be approximately $70 million on average, per quarter, during the first half of 2016.

Full-Year 2015 Financial Results

TESARO reported a net loss of $251.4 million, or ($6.38) per share, for 2015, compared to a net loss of $171.0 million, or ($4.79) per share, for 2014.

Research and development expenses increased to $155.4 million for 2015, compared to $118.4 million for 2014, driven primarily by three ongoing registration trials of niraparib, development activities related to the rolapitant IV NDA submission, and advancement of our immuno-oncology portfolio, in addition to increased headcount.

Acquired in-process research and development expenses totaled $2.0 million for 2015 and included milestone payments related our immuno-oncology portfolio, compared to $24.9 million for 2014, which was primarily due to up-front immuno-oncology license payments.

Selling, general and administrative expenses increased to $78.7 million for 2015, compared to $23.9 million for 2014, primarily due to commercial activities in support of the launch of VARUBI, increased commercial headcount, and higher professional service fees.

Operating expenses, as described above, include total non-cash, stock-based compensation expense of $25.9 million for 2015, compared to $11.7 million for 2014.

2016 Corporate Objectives

TESARO anticipates achieving the following key objectives:

Continue to execute on the VARUBI commercial launch in the United States;

Submit the NDA for IV rolapitant in Q1 2016;

Submit the oral rolapitant Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) in Q2 2016;

Initiate patient enrollment in the Phase 3 clinical trial of niraparib in first-line ovarian cancer (PRIMA) in Q1 2016;

Initiate enrollment in the niraparib/KEYTRUDA (pembrolizumab) combination trial in Q1 2016;

Report data from the Phase 3 NOVA trial and from the QUADRA trial of niraparib in Q2 2016;

Submit the niraparib NDA and MAA in 2H 2016;

Continue to enroll the Phase 3 BRAVO trial of niraparib in breast cancer patients with germline BRCA mutations through 2016;

Initiate a Phase 1 clinical trial of TSR-042 (anti-PD-1 antibody) in Q1 2016;

Submit the IND for TSR-022 (anti-TIM-3 antibody) in Q2 2016;

Select a clinical antibody candidate targeting LAG-3 in 1H 2016;

Identify a dose and schedule for TSR-042 by the end of 2016; and

Select bispecific clinical candidates targeting PD-1/TIM-3 and PD-1/LAG-3 in 2016.

On February 25, 2016 Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK) reported its fourth quarter and full year 2015 financial results (Press release, Merrimack, FEB 25, 2016, View Source [SID:1234509224]). Merrimack will host a live conference call and webcast today, Thursday, February 25 at 4:30 p.m., Eastern time, to provide an update on Merrimack’s progress as well as a summary of these results.

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Investors and the general public are invited to listen to the call by dialing (877) 564-1301 (domestic) or (224) 357-2394 (international) five minutes prior to the start of the call and providing the passcode 43765613. A listen-only webcast of the call can be accessed in the Investors section of Merrimack’s website, investors.merrimack.com, and a replay of the call will be archived there for six weeks following the call.

Key Recent Events

Merrimack’s key recent events include:

Presentation of an updated overall survival analysis of the Phase 3 NAPOLI-1 study of ONIVYDE (irinotecan liposome injection) in combination with fluorouracil (5-FU) and leucovorin that achieved a 63% improvement in 12-month overall survival in patients with post-gemcitabine metastatic pancreatic adenocarcinoma when compared to 5-FU and leucovorin alone at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium in San Francisco;

Publication of the NAPOLI-1 results in The Lancet;

Amendment of the ongoing Phase 2 clinical study of MM-121 (seribantumab) in patients with heregulin-positive non-small cell lung cancer, including a change in the primary endpoint to overall survival to enable a potential registration opportunity for MM-121; and

Closing of a private placement of $175.0 million of senior secured notes, of which $41.2 million was used to repay all amounts outstanding under Merrimack’s private loan agreement.

Commercial Update

Merrimack received approval for ONIVYDE from the U.S. Food and Drug Administration on October 22, 2015 and launched ONIVYDE in the United States on October 26, 2015. Net product revenues from U.S. commercial sales of ONIVYDE for the fourth quarter of 2015 were $4.3 million.

Upcoming Milestones

Merrimack anticipates the following upcoming clinical milestones:

Results in the first half of 2017 from the Phase 2 clinical study of ONIVYDE in previously untreated front-line metastatic pancreatic cancer;

Results in 2017 from HERMIONE, the Phase 2 clinical study of MM-302 in patients with HER2-positive metastatic breast cancer that is designed to support a potential Accelerated Approval application to the FDA;

Results in 2017 from the Phase 2 clinical study of MM-141 in patients with front-line metastatic pancreatic cancer who have high serum levels of free IGF-1; and

Results in 2018 from the Phase 2 clinical study of MM-121 in patients with heregulin-positive, locally advanced or metastatic non-small cell lung cancer.

Fourth Quarter and Full Year 2015 Financial Results

The following summarizes Merrimack’s financial results from the quarter and year ended December 31, 2015:

Received $66.5 million of net milestone payments from collaborations in 2015, consistent with Merrimack’s previous financial guidance;

Cash, cash equivalents and marketable securities as of December 31, 2015 were $185.6 million, compared to $124.0 million as of December 31, 2014. The increase was driven by $168.5 million of net proceeds from the issuance of senior secured notes and $38.6 million of net proceeds from an "at the market offering" program, which were offset by $105.4 million of cash used to fund operating activities and the payoff of $41.2 million of previously-existing debt;

Product revenue from the commercial sale of ONIVYDE, net of discounts, allowances and reserves, was $4.3 million for the fourth quarter of 2015 and the year ended December 31, 2015;

License and collaboration revenue was $17.1 million for the fourth quarter of 2015 and $84.9 million for the year ended December 31, 2015, compared to $33.9 million and $102.8 million, respectively, in the comparable periods in 2014. 2015 license and collaboration revenue is comprised of $64.9 million of revenue under the Baxalta proportional performance model and $20.0 million of substantive milestone revenue under Merrimack’s agreement with Baxalta. 2014 license and collaboration revenue is comprised of $10.5 million of revenue recognized under the Baxalta proportional performance revenue recognition model and $92.3 million of revenue recognized under Merrimack’s now-terminated agreement with Sanofi;

Research and development expenses were $44.7 million in the fourth quarter of 2015 and $161.0 million for the year ended December 31, 2015, compared to $30.7 million and $138.5 million, respectively, in the comparable periods in 2014. The increase in 2015 research and development expenses was driven by increased costs as Merrimack prepared for or initiated Phase 2 studies for four of its most advanced product candidates as well as increased preclinical and general spending as Merrimack advanced and grew its preclinical pipeline;

Selling, general and administrative expenses were $19.3 million in the fourth quarter of 2015 and $57.8 million for the year ended December 31, 2015, compared to $8.3 million and $30.5 million, respectively, in the comparable periods in 2014. The increase in 2015 selling, general and administrative expenses was primarily due to incremental expenses incurred to prepare for and support the launch of ONIVYDE; and

Net loss attributable to Merrimack for the fourth quarter of 2015 was $47.8 million, or $0.41 per share, compared to a net loss attributable to Merrimack of $9.7 million, or $0.09 per share, for the fourth quarter of 2014. For the year ended December 31, 2015, net loss attributable to Merrimack was $148.0 million, or $1.33 per share, compared to a net loss attributable to Merrimack of $83.3 million, or $0.80 per share, for the year ended December 31, 2014.

2016 Financial Outlook

Merrimack anticipates the following for 2016:

Receipt of $46.5 million of net milestone payments related to ONIVYDE. This amount is made up of $36.5 million of net substantive milestones expected to increase net income in 2016 and $10.0 million of net non-substantive milestones expected to increase deferred revenues on Merrimack’s balance sheet, as they are included in the Baxalta proportional performance revenue recognition model; and

Aggregate research and development and selling, general and administrative expenses to be in the range of $225 million to $245 million, not including any one time payments to PharmaEngine.
Merrimack 2016 Analyst Day

Merrimack will host an Analyst Day on May 19, 2016 in New York for analysts and institutional investors. A live webcast of the event will be available in the Investors section of Merrimack’s website, investors.merrimack.com, and a replay of the webcast will be archived there for six weeks.

Upcoming Investor Conferences

Merrimack will attend the following investor conferences this spring:

Credit Suisse 2016 London Healthcare Conference on March 1 in London;

Cowen and Company 36th Annual Health Care Conference on March 9 in Boston;

Barclays Global Healthcare Conference on March 15 in Miami; and

Deutsche Bank Securities 41st Annual Healthcare Conference on May 4-5 in Boston.

Live webcasts of the presentations at the Cowen and Company 36th Annual Health Care Conference, the Barclays Global Healthcare Conference and the Deutsche Bank Securities 41st Annual Healthcare Conference can be accessed by visiting the Investors section of Merrimack’s website at investors.merrimack.com. A replay of the webcasts will be archived there for two weeks following each presentation.

On February 25, 2016 Acceleron Pharma Inc. (NASDAQ:XLRN), a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapeutic candidates that regulate cellular growth and repair, reported a corporate update and reported financial results for the fourth quarter and year ended December 31, 2015 (Press release, Acceleron Pharma, FEB 25, 2016, View Source [SID:1234509189]).

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"We made significant progress over the past year in advancing our pipeline, as marked by successful clinical results across our programs and the recent launch of Phase 3 programs in MDS and beta-thalassemia with our partner Celgene," said John Knopf, Ph.D., Chief Executive Officer of Acceleron. "At the start of 2016, we raised $150 million in gross proceeds from an equity financing which will be used to fund our wholly owned programs, including our compounds for muscle diseases. Our locally acting muscle agent, ACE-083, showed unprecedented results in increasing muscle volume, and we plan to present new Phase 1 data later this year and initiate a Phase 2 trial in FSHD, a form of muscular dystrophy."

Added Dr. Knopf, "In late 2015, we introduced ACE-2494, a systemic muscle therapeutic created from our new IntelliTrap discovery platform. IntelliTrap is a powerful discovery engine, and we expect it to enable us to introduce a novel therapeutic into the clinic every 12 to 18 months."

2015 HIGHLIGHTS AND CURRENT UPDATES

DEVELOPMENT PROGRAMS

Hematology

Luspatercept in myelodysplastic syndromes (MDS)

Luspatercept is a protein therapeutic that increases hemoglobin levels and is being developed to help patients reduce or eliminate their need for red blood cell (RBC) transfusions

Initiated Phase 3 MEDALIST study in MDS with partner Celgene. MEDALIST is a 210-patient, global, double-blind, randomized, placebo-controlled, multicenter study to determine the efficacy and safety of luspatercept versus placebo in subjects with anemia due to very low, low, or intermediate-risk MDS with ring sideroblasts (≥ 15%) who require red blood cell transfusions.

Presented data at ASH (Free ASH Whitepaper) 2015 annual meeting from ongoing Phase 2 extension study showing that 50% of MDS patients achieved transfusion independence and 69% of patients achieved sustained increases in hemoglobin levels.

Expanded the Phase 2 MDS study with additional cohorts in lower risk MDS patients that are either erythropoietin-stimulating agent (ESA) treatment naïve or ring sideroblast negative.

Received FDA Fast Track Designation.

Luspatercept in beta-thalassemia

Initiated Phase 3 BELIEVE study in beta-thalassemia with partner Celgene. BELIEVE is a 300-patient, global, double-blind, randomized, placebo-controlled, multicenter study to determine the efficacy and safety of luspatercept versus placebo in adults who require regular red blood cell transfusions due to beta-thalassemia.

Presented data at ASH (Free ASH Whitepaper) 2015 annual meeting from ongoing Phase 2 studies showing luspatercept reduced transfusion burden, improved health-related quality of life measures, had beneficial effects on liver iron concentration and demonstrated a favorable safety profile.

Received FDA Fast Track Designation.

Muscle Diseases

ACE-083

Protein therapeutic designed to increase muscle mass and strength in the muscles in which it is administered

First-in-human Phase 1 study results showed an unprecedented 14.5% mean increase in muscle volume in the injected rectus femoris muscle of the quadriceps. The data were presented in the Late Breaking Clinical Trials Session of the 8th International Conference on Cachexia, Sarcopenia, and Muscle Wasting in December 2015.

Preclinical data in mice showed that ACE-083 produced significant increases in muscle mass in the injected muscle with no observed effect on either the uninjected contralateral muscle or on whole body mass. Increases in muscle mass were associated with a significant increase in muscle force and power. The data were presented at the 20th International Annual Congress of the World Muscle Society in October 2015.

ACE-2494

Systemic muscle therapeutic designed to increase muscle mass and strength in a range of muscle diseases

Introduced ACE-2494, Acceleron’s first IntelliTrap molecule. Preclinical data in mice presented at the 2015 World Muscle Society Congress showed that after 4 weeks of treatment, ACE-2494 generated substantial dose-dependent mean increases in muscle mass: 41% in rectus femoris, 53% in gastrocnemius, and 87% in pectoralis.
Oncology

Dalantercept in renal cell carcinoma (RCC)

Protein therapeutic that inhibits angiogenesis and is being developed in combination with approved VEGF-based anti-angiogenesis compounds to improve patient outcomes.

Enrollment is ongoing in Part 2 of the Phase 2 DART study, a randomized, double-blind study of dalantercept plus axitinib compared to placebo plus axitinib in patients with advanced renal cell carcinoma.

Results from Part 1 of the DART study with dalantercept plus axitinib demonstrated a median progression free survival of 8.3 months across all dose levels tested versus the historic control of 4.8 months for axitinib alone. The data were presented at the 2015 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting and ASCO (Free ASCO Whitepaper) 2015 Genitourinary Cancers Symposium.

Received FDA Fast Track Designation for dalantercept in combination with axitinib for the treatment of patients with advanced RCC following treatment with one anti-angiogenic agent.

Nephrology

Sotatercept in chronic kidney disease

Protein therapeutic that has effects on fibrosis, vascular calcification, bone mineral density and red blood cell (RBC) levels

Presented preliminary data from ongoing Phase 2a clinical studies of sotatercept in End-Stage Kidney Disease patients, including effects on hemoglobin, vascular calcification, bone mineral density and safety and tolerability at the American Society of Nephrology Kidney Week in October 2015.

Acceleron and Celgene assessing the opportunity for the development of sotatercept in the pre-dialysis chronic kidney disease (CKD) setting.

RESEARCH AND DEVELOPMENT

Introduced the Company’s IntelliTrap platform for discovery of selective and novel compounds targeting the transforming growth factor-beta superfamily of proteins.

Identified ACE-2494 as the first compound to be developed from the platform and is expected to be Acceleron’s fifth internally discovered therapeutic to enter the clinic.

Acceleron plans to have a new internally discovered compound enter the clinic every 12 to 18 months.

CORPORATE UPDATES

Raised $150 million in gross proceeds in an underwritten public offering of common stock in January 2016.

Hosted first Research & Development Day in October 2015. Company executives and a panel of outside experts briefed the investment community on Acceleron’s clinical programs in MDS, beta-thalassemia, cancer and muscular dystrophies.

UPCOMING 2016 PROGRAM MILESTONES AND EVENTS

We anticipate the following milestones and events in 2016:

Hematology

Luspatercept in MDS

Will update long-term treatment results at major medical conferences.

Initial data on ring sideroblast negative and ESA treatment naïve (front-line) patients (YE 2016).
Luspatercept in beta-thalassemia

Update long-term treatment results at major medical conferences.

Muscle Diseases

ACE-083

Present Phase 1 data from two new cohorts (Mid 2016).

Initiate Phase 2 trial in facioscapulohumeral muscular dystrophy (FSHD) patients (H2 2016).
ACE-2494

Submit IND for first-in-human study for ACE-2494 (YE 2016).
Oncology

Dalantercept in RCC

Present preliminary Part 2 DART study results (dalantercept in combination with axitinib) (YE 2016).
Nephrology

Sotatercept in CKD

Provide an update on development strategy (H2 2016).
Financial Results

Cash Position – Cash, cash equivalents and investments were $136.0 million as of December 31, 2015. Net cash used in operating activities in 2015 was $44.2 million. We believe that our existing cash, cash equivalents and investments, including the net proceeds of $140.4 million from our January 2016 offering, will be sufficient to fund our projected operating requirements into the second half of 2019.

Revenue – Collaboration revenue for the year was $18.1 million. This includes license and milestone amortization of $1.2 million and cost sharing reimbursement revenue from our Celgene partnership of $16.9 million related to expenses incurred by the Company in support of our partnered programs.

Costs and expenses – Total costs and expenses for the year were $79.0 million. This includes R&D expenses of $58.4 million and G&A expenses of $20.6 million.

Net Loss – The Company’s net loss for the year ended December 31, 2015 was $63.9 million.

On February 25, 2016 Emergent BioSolutions Inc. (NYSE:EBS) reported financial results for the quarter and twelve months ended December 31, 2015 (Press release, Emergent BioSolutions, FEB 25, 2016, View Source;p=RssLanding&cat=news&id=2143557 [SID:1234509229]).

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2015 FINANCIAL HIGHLIGHTS

Total revenues: Q4 2015 of $168.1 million, +14% Y/Y; twelve months 2015 of $522.8 million, +16% Y/Y;
GAAP net income: Q4 2015 of $33.3 million, or $0.71 per diluted share, +11% Y/Y; twelve months 2015 of $62.9 million, or $1.41 per diluted share, +71% Y/Y;

Adjusted net income: Q4 2015 of $37.5 million, or $0.78 per diluted share, +8% Y/Y; twelve months 2015 of $75.6 million, or $1.60 per diluted share, +40% Y/Y;

EBITDA: Q4 2015 of $58.5 million, or $1.22 per diluted share, +10% Y/Y; twelve months 2015 of $130.1 million, or $2.75 per diluted share, +41% Y/Y; and

Adjusted EBITDA: Q4 2015 of $61.7 million, or $1.28 per diluted share, +7% Y/Y; twelve months 2015 of $137.4 million, or $2.91 per diluted share, +30% Y/Y.

2016 FORECAST:

Full Year: revenue of $600 to $630 million; GAAP net income of $75 to $85 million, non-GAAP adjusted net income of $90 to $100 million, and EBITDA of $150 to $160 million

1Q 2016: revenue of $105 to $120 million

"Our strong fourth quarter in 2015 continued our history of growth over the last three years both financially and operationally. Since 2012, we nearly doubled our revenues to over $520 million, achieved a net income CAGR of 38% and expanded our portfolio to nine products," said Daniel J. Abdun-Nabi, president and chief executive officer of Emergent BioSolutions. "2016 will bring a renewed focus on addressing public health threats as we spin off Aptevo Therapeutics, our biosciences business, and enter our next phase of growth. We will continue to establish ourselves as a market leader with a global impact and work to achieve our vision of protecting and enhancing 50 million lives by 2025."

2015 BUSINESS ACCOMPLISHMENTS

Announced plan to implement tax-free spin-off of Aptevo Therapeutics (the Company’s Biosciences business) into a separate, publicly traded company, targeted for mid-2016;

Launched a new platform technology, Emergard, the Company’s military-grade auto-injector device for chemical threats being sold in international markets;

Received three approvals from the U.S. Food and Drug Administration (FDA):

Expansion of the BioThrax (Anthrax Vaccine Adsorbed) label to include post-exposure prophylaxis (PEP) against anthrax disease; the first vaccine to be licensed using the FDA Animal Rule,

IXINITY, a recombinant factor IX treatment for Hemophilia B, and

Anthrasil, an immune globulin for the treatment for inhalational anthrax.

Secured over $95 million in new multi-year contract and grant funding, including the following:

$20 million in multiple contracts with BARDA to manufacture Ebola monoclonal antibodies, including the Company’s first awarded task order under the Center for Innovation in Advanced Development and Manufacturing program,

A $44 million CDC contract to further supply the strategic national stockpile with the Company’s Vaccinia Immune Globulin product, and

A $31 million BARDA contract for the advanced development of NuThrax (anthrax vaccine adsorbed with CPG 7909 adjuvant), the Company’s next generation anthrax vaccine candidate.

Initiated a Phase 1 clinical trial for MOR209/ES414, an immunotherapeutic protein built on our ADAPTIR platform technology and targeting prostate cancer, which is being developed in collaboration with MorphoSys AG; and

Continued progress towards achieving licensure of Building 55.

2015 FINANCIAL PERFORMANCE

(I) Quarter Ended December 31, 2015 (unaudited)

Revenues

Product Sales

For Q4 2015, product sales were $132.6 million, an increase of 17% as compared to 2014. The increase primarily reflects increased sales of BioThrax during the quarter.

(in millions) Three Months Ended
December 31,
2015 2014 % Change
Product Sales
BioThrax $ 111.9 $ 87.9 27 %
Other biodefense 12.5 14.5 (13 )%
Total Biodefense $ 124.4 $ 102.3 22 %

Total Biosciences $ 8.2 11.0 (25 )%
Total Product Sales $ 132.6 $ 113.4 17 %

Contract Manufacturing

For Q4 2015, revenue from the Company’s contract manufacturing operations was $10.5 million, an increase of 10% as compared to 2014. The increase was primarily due to the timing of fill/finish services to third parties.

Contracts, Grants and Collaborations
For Q4 2015, contracts, grants and collaborations revenue was $24.9 million, unchanged as compared to 2014.

Operating Expenses

Cost of Product Sales and Contract Manufacturing

For Q4 2015, cost of product sales and contract manufacturing was $39.8 million, an increase of 22% as compared to 2014. The increase was primarily attributable to increased sales of BioThrax to the CDC.

Research and Development

For Q4 2015, gross research and development (R&D) expenses were $32.5 million, a decrease of 17% as compared to 2014. The decrease primarily reflects lower contract service costs associated with product candidates and technology platform development activities associated with the Biosciences division.

For Q4 2015, net R&D expenses were $7.6 million, a decrease of 46% as compared to 2014, reflecting a decrease in unfunded development spending in our Biosciences division, including spending on IXINITY, a product that we launched in Q2 2015. Net R&D expenses, which are more representative of the Company’s actual out-of-pocket investment in product development, are calculated as gross research and development expenses less contracts, grants and collaboration revenues.

(in millions) Three Months Ended
December 31,
2015 2014 % Change
Research and Development Expenses (Gross) $ 32.5 $ 39.0 (17 )%
Adjustments:
Contracts, grants and collaborations revenues 24.9 25.0 N/A
Net Research and Development Expenses $ 7.6 $ 14.0 (46 )%

Selling, General and Administrative

For Q4 2015, selling, general and administrative expenses were $46.0 million, an increase of 44% as compared to 2014. The increase was primarily attributable to a one-time $3.5 million reserve for potential write-off of accounts receivable within the Biosciences segment, a charge to write-off certain obsolete fixed assets, and increased information technology costs associated with the implementation of a new ERP system, as well as costs associated with the spin-off of Aptevo Therapeutics and professional services to support the Company’s strategic growth initiatives.

Net Income

For Q4 2015, GAAP net income was $33.3 million, an increase of 11% as compared to 2014. For Q4 2015 and 2014, GAAP net income per diluted share is computed using the if-converted method. This method requires GAAP net income to be adjusted to reflect the impact of interest expense and amortization of debt issuance cost, both net of tax, associated with the Company’s 2.875% Convertible Senior Notes due 2021. As a result, GAAP net income per diluted share for Q4 2015 is adjusted in the amount of $0.9 million, from $33.3 million to $34.2 million, and diluted shares outstanding were 48.1 million. GAAP net income per diluted share for Q4 2014 is adjusted in the amount of $0.6 million, from $30.1 million to $30.7 million, and diluted shares outstanding were 46.4 million.

(II) Twelve Months Ended December 31, 2015 (unaudited)

Revenues

Product Sales

For the twelve months of 2015, product sales were $356.9 million, an increase of 14% as compared to 2014. The increase primarily reflects increased sales of BioThrax in 2015.

(in millions) Twelve Months Ended
December 31,
2015 2014 % Change
Product Sales
BioThrax $ 293.9 $ 245.9 20 %
Other biodefense 35.0 35.9 (3 )%
Total Biodefense $ 328.9 $ 281.8 17 %

Total Biosciences $ 28.0 $ 30.1 (7 )%
Total Product Sales $ 356.9 $ 311.9 14 %

Contract Manufacturing
For the twelve months of 2015, revenue from the Company’s contract manufacturing operations was $43.0 million, an increase of 39% as compared to 2014. The increase was primarily due to a full year of revenues from the Company’s fill/finish facility in Baltimore, plasma based manufacturing from the Company’s Winnipeg facility and contract manufacturing services related to the production of an MVA Ebola vaccine candidate.

Contracts, Grants and Collaborations

For the twelve months of 2015, contracts, grants and collaborations revenue was $122.9 million, an increase of 15% as compared to 2014. The increase was primarily due to development funding for Anthrasil and for our CIADM program.

Operating Expenses

Cost of Product Sales and Contract Manufacturing

For the twelve months of 2015, cost of product sales and contract manufacturing was $124.3 million, an increase of 5% as compared 2014. The increase was primarily attributable to the increase in the number of BioThrax doses delivered to the CDC.

Research and Development

For the twelve months of 2015, gross R&D expenses were $154.0 million, an increase of 2% as compared to 2014. The increase was primarily attributable to higher contract service costs for product candidates and manufacturing development in the Biodefense segment.

Net R&D expenses for the twelve months of 2015 were $31.1 million, a decrease of 29% as compared to 2014, reflecting a decrease in unfunded development spending in our Biosciences division, including spending on IXINITY.

(in millions) Twelve Months Ended
December 31,
2015 2014 % Change
Research and Development Expenses (Gross) $ 154.0 $ 150.8 2 %
Adjustments:
Contracts, grants and collaboration revenues 122.9 107.3 15 %
Net Research and Development Expenses $ 31.1 $ 43.5 (29 )%

Selling, General and Administrative

For the twelve months of 2015, selling, general and administrative expenses were $148.5 million, an increase of 21% as compared to 2014. The increase was primarily attributable to additional post-acquisition selling, general and administrative costs largely associated with the operations acquired in Q1 2014, including IXINITY launch costs, as well as costs associated with the spin-off of Aptevo Therapeutics and costs associated with professional services to support the Company’s strategic growth initiatives.

Net Income

For the twelve months of 2015, GAAP net income was $62.9 million, an increase of 71% as compared to 2014. For the twelve months of 2015 and 2014, GAAP net income per diluted share is computed using the if-converted method. This method requires GAAP net income to be adjusted to reflect the impact of interest expense and amortization of debt issuance cost, both net of tax, associated with the Company’s 2.875% Convertible Senior Notes due 2021. As a result, GAAP net income per diluted share for the twelve months of 2015 is adjusted in the amount of $3.9 million, from $62.9 million to $66.8 million, and diluted shares outstanding were 47.3 million. GAAP net income per diluted share for the twelve months of 2014 is adjusted in the amount of $3.6 million, from $36.7 million to $40.3 million, and diluted shares outstanding were 45.8 million.

2016 FINANCIAL OUTLOOK

(I) Full Year 2016

For the full year of 2016, the Company reaffirms its forecast for total revenues of $600 to $630 million, driven by growth in BioThrax sales of $305 to $320 million, continued domestic and international sales of the other Biodefense division products, and continued robust development funding through contracts and grants revenues. The Company also forecasts full year 2016 GAAP net income of $75 to $85 million, non-GAAP adjusted net income of $90 to $100 million, and EBITDA of $150 to $160 million (see "Reconciliation of GAAP Net Income to Adjusted Net Income and EBITDA" for a definition of terms and a reconciliation table). The Company’s outlook for 2016 includes the impact of a successful spin-off of Aptevo Therapeutics in mid-2016 and continuous delivery of BioThrax to the CDC under an anticipated follow-on, multiyear procurement contract, but does not include any estimates for BioThrax deliveries from Building 55, the Company’s large scale BioThrax manufacturing facility, or any estimates for potential new corporate development or other M&A transactions.

(II) Q1 2016

For the first quarter of 2016, the Company reaffirms its forecast for total revenues of $105 to $120 million.

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED NET INCOME, EBITDA AND ADJUSTED EBITDA

This press release contains three financial measures (Adjusted Net Income, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), and adjusted EBITDA) that are considered "non-GAAP" financial measures under applicable Securities & Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles. The Company’s definition of these non-GAAP measures may differ from similarly titled measures used by others. Adjusted Net Income adjusts for specified items that can be highly variable or difficult to predict, or reflect the non-cash impact of charges resulting from purchase accounting. EBITDA reflects net income excluding the impact of depreciation, amortization, interest expense and provision for income taxes. Adjusted EBITDA also excludes specified items that can be highly variable and the non-cash impact of certain purchase accounting adjustments. The Company views these non-GAAP financial measures as a means to facilitate management’s financial and operational decision-making, including evaluation of the Company’s historical operating results and comparison to competitors’ operating results. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to the corresponding GAAP financial measure, may provide a more complete understanding of factors and trends affecting the Company’s business.

The determination of the amounts that are excluded from these non-GAAP financial measures are a matter of management judgment and depend upon, among other factors, the nature of the underlying expense or income amounts. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.
Reconciliation of GAAP Net Income to Adjusted Net Income

(in millions, except per share value) Three Months Ended
December 31,
2015 2014 Source
GAAP Net Income $ 33.3 $ 30.1 NA
Adjustments:
Spin-off and acquisition-related costs
(transaction & integration) 2.0 0.6 SG&A
Non-cash amortization charges 2.7 2.3 COGS, SG&A,
Other Income
Impact of purchase accounting on inventory step-up – 1.0 COGS
Restructuring activities 1.2 2.6 SG&A
Tax effect (1.8 ) (2.0 ) NA
Total Adjustments 4.2 4.5 NA
Adjusted Net Income
$
37.5
$
34.6
NA
Adjusted Net Income per Diluted Share $ 0.78 $ 0.75

(in millions, except per share value) Twelve Months Ended
December 31,
2015 2014 Source
GAAP Net Income $ 62.9 $ 36.7 NA
Adjustments:
Spin-off and acquisition-related costs
(transaction & integration) 5.5 8.1 SG&A
Non-cash amortization charges 10.8 9.5 COGS, SG&A,
Other Income
Write-off of syndicated loans – 1.8 Other Income
Impact of purchase accounting on inventory step-up 0.6 3.0 COGS
Restructuring activities 1.2 2.6 SG&A
Tax effect (5.4 ) (7.5 ) NA
Total Adjustments 12.7 17.5 NA
Adjusted Net Income
$
75.6
$
54.2
NA
Adjusted Net Income per Diluted Share $ 1.60 $ 1.18

Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA

(in millions, except per share value) Three Months Ended
December 31,
2015 2014
GAAP Net Income $ 33.3 $ 30.1
Adjustments:
+ Depreciation & Amortization 9.1 7.8
+ Provision For Income Taxes 14.5 14.2
+ Total Interest Expense 1.6 1.2
Total Adjustments 25.2 23.2
EBITDA
$
58.5
$
53.3

EBITDA per Diluted Share $ 1.22 $ 1.15
Additional Adjustments:
+ Spin-off and acquisition-related costs
(transaction & integration) 2.0 0.6
+ Impact of purchase accounting on inventory step-up – 1.0
+ Restructuring activities 1.2 2.6
Total Additional Adjustments 3.2 4.2
Adjusted EBITDA
$
61.7
$
57.5

Adjusted EBITDA per Diluted Share $ 1.28 $ 1.24

(in millions, except per share value) Twelve Months Ended
December 31,
2015 2014
GAAP Net Income $ 62.9 $ 36.7
Adjustments:
+ Depreciation & Amortization 33.8 31.0
+ Provision Income Taxes 26.9 16.3
+ Total Interest Expense 6.5 8.2
Total Adjustments 67.2 55.5
EBITDA
$
130.1
$
92.2

EBITDA per Diluted Share $ 2.75 $ 2.01
Additional Adjustments:
+ Spin-off and acquisition-related costs
(transaction & integration) 5.5 8.1
+ Impact of purchase accounting on inventory step-up 0.6 3.0
+ Restructuring activities 1.2 2.6
Total Additional Adjustments 7.3 13.7
Adjusted EBITDA
$
137.4
$
105.9

Adjusted EBITDA per Diluted Share $ 2.91 $ 2.31