On February 24, 2016 ZIOPHARM Oncology, Inc. (Nasdaq:ZIOP) reported financial results for the fourth quarter ended December 31, 2015, and provided an update on the Company’s recent activities (Press release, Ziopharm, FEB 24, 2016, View Source [SID:1234509180]).

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"We look forward to a number of important milestones throughout 2016 across our gene and cell therapy platforms," said Laurence Cooper, M.D., Ph.D., Chief Executive Officer of ZIOPHARM. "For our lead gene therapy, Ad-RTS-IL-12 + veledimex, this includes data presentations in the first half of the year from our Phase 1 brain cancer trial, our Phase 1/2 breast cancer trial and from a translational, preclinical study demonstrating powerful antitumor effects when combining with checkpoint inhibitors. Through the balance of 2016, we expect to initiate or continue prosecuting up to six proof-of-concept generating studies across multiple platforms, including viral and non-viral delivery of DNA, CAR-T and NK-cell therapies based upon autologous and allogeneic, or off-the-shelf, strategies. These studies will help inform potential registration pathways and validate technologies that will enable us to achieve our game-changing goals, including delivering therapies for urgent unmet needs, such as progressive brain cancer, and developing personalized TCR-based cell therapies for solid tumors."

"To accelerate the success of our exciting clinical programs, we are building out our clinical and regulatory infrastructure by hiring additional personnel in these important areas of our company," said Caesar J. Belbel, Executive Vice President, Chief Operating Officer and Chief Legal Officer of ZIOPHARM. "Through the highly efficient management of our cash, the addition of these resources in support of our aggressive clinical strategy has had a minimal impact on the projection of our financial resources, which we anticipate will be sufficient to fund our currently planned operations into the fourth quarter of 2017."

Program Updates

Ad-RTS-IL-12 + veledimex

Ad-RTS-hIL-12 + veledimex is a gene therapy candidate for the controlled expression of interleukin 12 (IL-12), a critical protein for stimulating an anti-cancer T-cell immune response, using the RheoSwitch Therapeutic System (RTS) gene switch. ZIOPHARM is currently enrolling patients in two studies of Ad-RTS-hIL-12 + veledimex: a Phase 1b/2 study for the treatment of patients with locally advanced or metastatic breast cancer following standard chemotherapy and a multi-center Phase 1 study in patients with recurrent or progressive glioblastoma multiforme (GBM), an aggressive form of brain cancer.

Encouraging data from Phase 1 brain tumor study reported at SNO; first patient treated in second dose cohort. In November 2015, the Company reported biologic data from the multicenter, Phase 1 gene therapy study of GBM at the Society for Neuro-Oncology (SNO) 20th Annual Scientific Meeting. Following reporting of encouraging data from the first cohort of the study at the initial dosing of Ad-RTS-IL-12 + veledimex, the Company announced this week that the first patient has been enrolled in the study’s second dose cohort. The Company plans to report updated results from the study at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June 2016.

Encouraging data from Phase 1b/2 breast cancer study reported. In December 2015, the Company reported encouraging data, including achievement of the 12 week progression free survival endpoint by the first patient, from a Phase 1b/2 study of Ad-RTS-hIL-12 + veledimex following standard chemotherapy for the treatment of patients with locally advanced or metastatic breast cancer. The study is being conducted at the Memorial Sloan Kettering Cancer Center in New York. A trial in progress poster describing the study was presented at the San Antonio Breast Cancer Symposium in December 2015. The Company expects to present updated data from the study in 2016.

Preclinical studies combining Ad-RTS-IL-12 + veledimex and checkpoint inhibitors in brain tumor models. ZIOPHARM anticipates presenting data from preclinical studies of Ad-RTS-IL-12 + veledimex combined with checkpoint inhibitors in glioblastoma mouse models at the 2016 Meeting of the American Society of Gene and Cell Therapy (ASGCT) (Free ASGCT Whitepaper) in Washington D.C., May 4-7, 2016.

Adoptive Cell Therapies

ZIOPHARM is developing various immuno-oncology programs, including chimeric antigen receptor T-cell (CAR-T), T-cell receptor (TCR) and natural killer (NK) adoptive cell-based therapies. These programs are being advanced in collaboration with Intrexon and the MD Anderson Cancer Center and the biopharmaceutical business of Merck KGaA, Darmstadt, Germany (CAR-T only).

Favorable overall survival (OS) and progression free survival (PFS) data from non-viral CAR-modified T cells targeting CD19 presented at ASH (Free ASH Whitepaper). In December 2015, ZIOPHARM announced results from its non-viral CD19-specific CAR T-cell therapy programs were presented at the 57th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting. Two investigational therapies infused T cells genetically modified to express a CD19-specific CAR into patients with advanced CD19+ malignancies after hematopoietic stem-cell transplantation (HSCT). This was based on non-viral gene transfer using the Sleeping Beauty platform to express the CAR. Long-term follow up data were used to distinguish the benefit of the CAR-T therapies over HSCT. The results demonstrated favorable PFS and OS trends compared to historical controls, with a near doubling of 3-year PFS rates for patients with Diffuse Large B-cell Lymphoma enrolled in the autologous cohort, and a doubling to tripling of 1-year OS rates results for patients with Acute Lymphoblastic Leukemia enrolled in the allogeneic cohort. The non-viral Sleeping Beauty-modified T cells also demonstrated in vivo survival that compared favorably to published results of virally-modified cells.

First patient enrolled in Phase 1 study of second generation non-viral CD19-specific CAR T-cell therapy for advanced lymphoid malignancies. In February 2016, ZIOPHARM announced that the first patient was enrolled in a new Phase 1 clinical study of its second generation non-viral CD19-specific CAR modified T-cell therapy in patients with advance lymphoid malignancies. The CD19-specific T cells were modified using the Sleeping Beauty system to stably express the CAR in T cells. This second-generation study employs a revised CAR construct designed to improve persistence and anti-tumor response over the first generation therapy. Additionally, this investigational treatment is independent of HSCT. The trial, which is being conducted at MD Anderson, will provide further proof-of-concept for the Sleeping Beauty system in a disease setting well studied using virally modified CD19-specific T cells, allowing the system to be applied to areas where viral therapy is more challenging to implement, such as the targeting of neoantigens in solid tumors.

Sleeping Beauty non-viral gene transfer technology featured in Nature Medicine. In January 2016, the Sleeping Beauty non-viral gene transfer technology was featured in a perspectives article in the journal Nature Medicine (Volume 22, Number 1, 26-36), titled "Prospects for gene-engineered T cell immunotherapy for solid cancers." The article describes how adoptive transfer of TCR-engineered T cells for solid tumors may come from the "arduous task of targeting the unique set of mutations that cause each patient’s cancer." Because of the challenges of achieving this goal, the authors note that non-viral integration systems will likely be considerably cheaper to manufacture and easier to implement for single-use applications compared with viral vectors and that, among non-viral platforms, Sleeping Beauty has advanced furthest in clinical development.

The Sleeping Beauty transposon-transposase is a unique non-viral system for introducing genes encoding CARs and TCRs into lymphocytes and is exclusively licensed by Intrexon through MD Anderson and accessed as part of ZIOPHARM’s collaboration with Intrexon. This non-viral approach has several potential advantages over viral delivery systems, including a lower cost of generating genetically modified T cells as well as the ability to generate T cells with minimal ex vivo processing and can serve as a conduit to targeting solid tumor neoantigens using TCRs.

Upcoming Studies

As previously announced, ZIOPHARM anticipates launching clinical studies in three new programs in 2016:

A Phase 1 clinical trial in patients with glioblastoma using the combination of Ad-RTS-IL-12 + veledimex and a selected checkpoint inhibitor.

A Phase 1 study of a viral-based CAR T-cell therapy for myeloid malignancies. Details of the study and antigen target will be provided as the Company initiates the study.

A Phase 1 clinical trial using off-the-shelf primary NK cells for investigational therapy of acute myeloid leukemia, building on promising proof-of-principle trials such as ongoing at MDACC infusing autologous and allogeneic NK cells.

Fourth-Quarter 2015 Financial Results

Net loss for the fourth quarter of 2015 was $9.5 million, or $(0.07) per share, compared to a net loss of $10.4 million, or $(0.09) per share, for the fourth quarter of 2014.

Research and development expenses were $8.1 million for the fourth quarter of 2015 which is consistent with $8.1 million for the fourth quarter of 2014. In 2015, research and development costs include $4.5 million related to CAR-T programs, $1.6 million related to gene therapy programs, $1.3 million in employee related expenses and $0.7 million in other R&D activities.

General and administrative expenses were $3.3 million for the fourth quarter of 2015 compared to $2.9 million for the fourth quarter of 2014. The increase of $0.4 million in general and administrative expenses is primarily attributable to non-cash equity compensation and other employee related expenses.

The Company ended the quarter with cash and cash equivalents of approximately $140.7 million. Given current development plans, the Company anticipates that current cash resources will be sufficient to fund our planned operations into the fourth quarter of 2017.

On February 24, 2015 Fresenius Medical Care reported fourth quarter and full year 2015 results (Press release, Fresenius, FEB 24, 2016, View Source [SID:1234509182]).
 
Fourth quarter 2015 key figures:

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Net revenue: $4,348 million, +1% / +5%cc
Operating income (EBIT): $662 million, 0%
Operating income (EBIT) excluding special items2: $704 million, +5%
Net income1: $317 million, -6%
Net income excluding special items1,2: $347 million, +2%
Basic earnings per share: $1.04, -6%

Full year 2015 key figures:

Net revenue: $16,738 million, +6% / +11%cc
Operating income (EBIT): $2,327 million, +3%
Operating income (EBIT) excluding special items2: $2,388 million, +5%
Net income1: $1,029 million, -2%
Net income excluding special items1,2: $1,082 million, +2%
Basic earnings per share: $3.38, -2%

Dividend proposal:

Per share €0.80 +3%
cc = at constant currency rates
1 excluding special items: divestiture of dialysis business in Venezuela, sale of the European marketing rights to Vifor and settlement costs for an agreement in principle for the GranuFlo case in 2015 as well as closing of manufacturing plants in 2014
2 attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

Rice Powell, Chief Executive Officer of Fresenius Medical Care stated: "Our commitment to our patients continues to produce substantial results. After investing heavily in new business activities, 2015 was a year that focused on operational excellence. Strong market dynamics in our core dialysis markets had been supported by new operating profitability levels. In 2016 we even want to accelerate the value creation for all our shareholders. We delivered on revenue, net income guidance for 2015 and confirm our targets for 2016: strong revenue growth combined with even higher net income growth."

Fourth quarter 2015

Revenue

Net revenue for the fourth quarter of 2015 increased slightly by 1% to $4,348 million (+5% at constant currency) as compared to the fourth quarter of 2014. Organic revenue growth was 5%. Net Health Care revenue grew by 4% to $3,462 million (+7% at constant currency). The organic growth rate was 6%. After a very strong first half in the product business, the dialysis product revenue was down by 11% to $886 million. The company generated more than 70% of the product business in the three International segments which implied a strong currency headwind. On a constant currency basis, dialysis product revenue decreased by 2%.

North America revenue for the fourth quarter of 2015 increased by 7% to $3,084 million. Organic revenue growth was 5%. Net Health Care revenue contributed $2,845 million (+8% on a year on year basis), the product business $239 million (+1% on a year on year basis). The Care Coordination business recorded revenue of $501 million – corresponding to a significant growth of 27% over the previous years fourth quarter. Organic revenue growth was 23%.

International revenue decreased by 12% to $1,257 million (an increase of 2% on a constant currency basis), clearly negatively impacted by currency translation. Organic revenue growth was 3%. Net Health Care revenue was $617 million (-10%, +5% at constant currency). Dialysis product revenue decreased by 13% to $640 million (-1% at constant currency).

International segments:
Europe, Middle East and Africa (EMEA) revenue decreased by 12% to $673 million. Constant currency and organic revenue growth was 1%. Net Health Care revenue decreased by 11% to $306 million (+4% at constant currency). Dialysis product revenue decreased by 13% to $367 million (-1% at constant currency and stable on an organic perspective).

Asia-Pacific revenue decreased by 6% to $394 million (+1% at constant currency). Net Health Care revenue amounted to $171 million (+3% at constant currency), dialysis product revenue decreased to $223 million (stable level at constant currency rates).

Latin America revenue decreased by 20% to $ 190 million. At constant currency revenue grew by 3%. Organic revenue growth was 15%. Net Health Care revenue decreased by 14% to $140 million (+9% at constant currency). With a plus of 27% organic growth was very strong. Dialysis product revenue decreased by 33% to $50 million (a decrease of 9% at constant currency).

Earnings
Operating income (EBIT) was $662 million, stable compared to last year. The sale of remaining European marketing rights to a Joint Venture was recognized in the fourth quarter resulting in an additional gain of $18 million. The company also reached an agreement in principle to resolve a product liability litigation in the United States involving GranuFlo/NaturaLyte. This caused a pre-tax charge of $60 million. Excluding both special items operating income increased 5% from $669 million to $704 million.

Operating income for North America for the fourth quarter of 2015 was $514 million, an increase of 4% as compared to the corresponding quarter in 2014. Excluding the $60 million settlement costs for the GranuFlo/NaturaLyte case the operating income was $574 million, a strong increase of 16%.

International segments:
Operating income for EMEA for the fourth quarter of 2015 increased by 20% to $172 million as compared to the same quarter 2014. Operating income, excluding the $ 18 million gain resulting from the sale of the European marketing rights, was $154 million, reflecting an increase of 8%. Operating income for Asia-Pacific was $79 million, a sequential improvement of $11 million and a decrease of 21% on a year on year basis. Operating income for Latin America for the fourth quarter of 2015 was $23 million (Q4 2014: $35 million).

The corporate costs were up at $ 126 million compared to $108 million in Q4 2014.

Net interest expense for the reported quarter was with $88 million clearly below Q4 of last year (-25%) due to higher interest income resulting from the early repayment of interest-bearing notes receivables and due to a decreased average debt level.

Income tax expense was $180 million for Q4 2015, which translates into an effective tax rate of 31.4%. This compares to income tax expense of $143 million and a tax rate of 26.2%, which was influenced favorably by the resolution of challenged deductions for the civil payments taken in prior years.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the fourth quarter of 2015 was $317 million compared to $335 million in the fourth quarter of 2014. Excluding special items net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $347 million – this means an increase by 2%. Net income attributable to noncontrolling interest increased to $77 million ($68 million in Q4 2014).

Basic earnings per share (EPS) for the fourth quarter of 2015 was $1.04, compared to $1.11 for the corresponding period in 2014. The weighted average number of shares outstanding for Q4 2015 was approximately 305.1 million shares, compared to approximately 303.3 million shares.

Cash flow

In the fourth quarter of 2015, the company generated $548 million, representing approximately 13% of revenue, in net cash provided by operating activities, compared to the corresponding figure of last year of $588 million.

A total of $299 million was spent for capital expenditures, net of disposals. Free cash flow was $249 million compared to $306 million in the comparable quarter of 2014.

A total of $151 million in cash was spent for acquisitions and investments. Divestitures driven by the early repayment of interest bearing notes receivables were $209 million. Free cash flow after investing activities was $307 million as compared to -$419 million in Q4 2014

Full year 2015

Revenue and earnings

Net revenue for full year 2015 increased by 6% to $16,738 million (+11% at constant currency) as compared to fiscal 2014. Organic revenue growth worldwide was 6%.

Operating income (EBIT) for the full year 2015 decreased by 2% to $2,327 million. Excluding special items operating income grew by 5% and reached $2,388 million as compared to $2,271 million for fiscal 2014.

Net interest expense for fiscal 2015 was $391 million as compared to $411 million for the corresponding period in 2014.

Income tax expense for full year 2015 was $623 million, which translates into an effective tax rate of 32.1%. This compares to income tax expense of $584 million and a tax rate of 31.7% for 2014.

For full year 2015, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $1,029 million compared to $ 1,045 million in 2014. Excluding special items net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA increased to $1,082 million, plus 2% compared with the comparable number of $1,058 million for fiscal 2014.

For fiscal year 2015, basic earnings per share (EPS) was down at $3.38 as compared to the corresponding number for full year 2014 ($3.46). The weighted average number of shares outstanding for 12 months of 2015 was approximately 304.4 million shares (full year 2014: 302.3 million).

Cash flow

In the reported period 2015, the company generated $1,960 million in net cash provided by operating activities, representing 11.7% of revenue, as compared to $1,861 million for the same period in 2014.

A total of $935 million was spent for capital expenditures, net of disposals. Free cash flow was $1,025 million as compared to $941 million in 2014, a strong increase of roughly 9% on a year on year basis.

A total of $66 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after investing activities was $959 million as compared to ($829) million for the twelve months of 2014.

Employees
As of December 31, 2015, Fresenius Medical Care had 104,033 employees (full-time equivalents) worldwide, compared to 99,895 employees at the end of 2014. This increase of 4% was mainly attributable to our continued organic growth and acquisitions.

Balance sheet structure
The company´s total assets were slightly above last years level and amounted to $25,533 million (Dec. 31, 2014: $25,381 million). Current assets increased by 4% to $6,984 million (Dec. 31, 2014: $6,718 million). Goodwill and intangible assets as well as non-current assets remained stable with $13,863 million (Dec. 31, 2014: 13,951 million) and $4,686 million (Dec. 31, 2014: 4,712 million) respectively. Total equity increased by 5% to $10,496 million (Dec. 31, 2014: $10,028 million). The equity ratio was 41% as compared to 40% at the end of 2014. Total debt was $8,646 million (Dec. 31, 2014: $9,466 million).

Please refer to the attachments for a complete overview of the results for the fourth quarter and full year 2015.

Dividend
At the Annual General Meeting to be held on May 12, 2016, shareholders will be asked to approve a dividend of €0.80 per share, an increase of 3% compared to 2014 (€0.78). This would mean the 19th consecutive dividend increase, shareholders can expect.

Outlook 2016
Based on the projection Fresenius Medical Care provided for 2016, the company is guiding for revenue to grow 7-10% at constant currency excluding acquisitions in 2015 and 2016. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to increase by 15-20% in 2016 excluding acquisitions in 2015 and 2016, based on net income for 2015 of US$ 1,057 million (net income excluding settlement costs for an agreement in principle for the GranuFlo/NaturaLyte case of -$37 million and +$9 million acquisitions).

The company expects to spend capital expenditures of $1.0 – $1.1 billion and around $750 million on acquisitions. The debt/EBITDA ratio is expected to be below 3.0 by the end of 2016.

On February 24, 2016 Forty Seven Inc., a clinical-stage immuno-oncology company, reported that it has completed the first half of a committed $75 million Series A financing round and has licensed the rights to multiple immuno-oncology programs from Stanford University (Press release, Forty Seven, FEB 24, 2016, View Source [SID:1234509244]).

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The Series A financing was led by Lightspeed Venture Partners and Sutter Hill Ventures with participation from Clarus Ventures and GV (formerly Google Ventures). The license includes rights to over 100 issued or pending U.S. or foreign patents that cover the antibody Hu5F9-G4 and several other novel immune checkpoint inhibitors and cancer-specific antibodies.
Forty Seven is committed to the advancement of immuno-oncology through the engagement of new and complementary phagocytic pathways that enhance anti-tumor efficacy and selectivity. The financing will allow Forty Seven to continue the clinical development of its lead molecule, Hu5F9-G4, a humanized monoclonal antibody against human CD47 that potentially has broad applications spanning multiple tumor types and treatment modalities.

CD47 is a molecule that is overexpressed on the surface of the majority of tumors and transmits a "don’t eat me" signal, enabling cancer cells to evade phagocytosis by macrophages. The molecule was originally identified as a cancer target by researchers at Stanford. In preclinical models, Hu5F9-G4 facilitated phagocytosis and elimination of cancer cells from multiple human tumor types as a monotherapy. Additionally, when used in combination therapy, it engaged macrophages as effector cells to enhance the efficacy of cancer-specific antibodies via Antibody-Dependent Cellular Phagocytosis (ADCP). Importantly, Hu5F9-G4 also could prime an effective antitumor T-cell response through cross-presentation of cancer cell antigens by macrophages, preventing engraftment of tumors expressing a cross-presented antigen into animals.

Company founder Irv Weissman said, "Targeting CD47 integrates the adaptive and innate immune systems creating synergy with existing cancer-specific antibodies like rituximab, cetuximab and trastuzumab through ADCP, and potentially with T-cell checkpoint inhibitors through cross-presentation. We are grateful to the California Institute for Regenerative Medicine (CIRM) for funding the preclinical studies and the current solid tumor clinical trial at Stanford, and to Ludwig Cancer Research for funding much of the research."

"The founders, Irv Weissman, Ravi Majeti, Mark Chao and Jens Volkmer, have studied the CD47 pathway extensively since they initially identified it as a cancer target in two papers published in 2009," commented Chris Schaepe, Partner at Lightspeed Venture Partners. "The company’s scientific founders have done an outstanding job of advancing Hu5F9-G4 into two Phase 1 clinical trials in patients with relapsed or refractory solid tumors or acute myeloid leukemia (AML)."

"Forty Seven’s accomplishments pre-Series A funding are unusual as is the breadth of its patent portfolio which also has broad potential applications outside of cancer," remarked Jeff Bird, Partner at Sutter Hill Ventures.

Forty Seven will use the proceeds of the Series A financing to complete the two ongoing clinical studies, fund additional clinical trials in 2016 to assess Hu5F9-G4 in combination therapy and advance some preclinical programs towards IND.

"Forty Seven has hired a strong management team with deep industry experience. I feel confident that this combined team along with the support we have from our Series A investors and our scientific founders will enable us to fully explore the clinical utility of our lead molecule and the licensed technology," said Jonathan MacQuitty, CEO of Forty Seven Inc.

Forty Seven Senior Management
Chief Executive Officer, Jonathan MacQuitty, Ph.D., M.B.A. former Partner at Abingworth and former CEO of GenPharm.
Chief Business Officer, Craig Gibbs, Ph.D., M.B.A. former VP and Head of Commercial Strategy, Corporate Development and Biology Research at Gilead.
Chief Medical Officer, Chris Takimoto M.D. Ph.D. former VP Experimental Medicine Early
Development Oncology at Janssen/J&J.
Chief Patent Officer, Norm Kruse Ph.D., J.D. former Head of Intellectual Property at Verinata Health and Maxygen.
VP Clinical Operations, Hassan Movahhed, M.S. former SVP and Head of Clinical Operations at United Therapeutics.

Forty Seven Board of Directors
Jeff Bird, Sutter Hill Ventures.
Dennis Henner, Clarus Ventures.
Jonathan MacQuitty, Forty Seven Inc.
Ravi Majeti, Stanford University School of Medicine.
Chris Schaepe, Lightspeed Venture Partners.
Irv Weissman, Stanford University School of Medicine.

About Forty Seven Inc.
Forty Seven Inc. is a clinical-stage immuno-oncology company that is developing therapies licensed from Stanford University targeting cancer immune evasion pathways. The lead program Hu5F9-G4 is a monoclonal antibody against the CD47 receptor, a "don’t eat me" signal that cancer cells commandeer to avoid being ingested by the immune system. This antibody is currently being evaluated in two Phase 1 clinical studies in patients with solid tumors and in patients with acute myeloid leukemia. Forty Seven is located at 1661 Page Mill Road, Suite C, Palo Alto, CA 94304, U.S.A. For more information please visit www.fortyseveninc.com or contact Chief Business Officer Craig Gibbs at (650)-352-4136.

On February 24, 2016 Nanomerics’ scientists reported they have demonstrated that encapsulating chemotherapy drugs within Nanomerics’ MET nanoparticles diverts the drug from the bone marrow, while enabling higher levels of drug to access the brain (Press release, Nanomerics, FEB 24, 2016, View Source [SID:1234509184]). Animals intravenously dosed with Nanomerics’ MET – lomustine formulations showed significantly improved survival rates when compared to the drug in solution and the effect of the drug on the bone marrow was comparable to the drug in solution. The work is described in a new paper published in Pharmaceutical Research View Source This data demonstrates the further utility of Nanomerics’ MET via the intravenous route. The MET formulation worked by enabling a higher dose of the hydrophobic drug lomustine to be administered and this higher dose did not result in higher levels of drug in the bone and liver, whereas levels of the drug in the brain were increased. The bone marrow is a major site of toxicity for alkylating agents such as lomustine and dose limiting myelosuppression compromises brain tumour therapy significantly.

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Nanomerics’ Chief Scientific Officer states, "this study provides evidence that Nanomerics’ MET nanoparticles are able to avoid the bone marrow and indeed the liver on intravenous administration and provide a method of administering a hydrophobic alkylating agent for the treatment of brain tumours."

On February 23, 2016 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported financial results for the full year and the fourth quarter of 2015 and provided financial guidance for 2016 (Filing, 8-K, Jazz Pharmaceuticals, FEB 23, 2016, View Source [SID:1234509162]).

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"In 2015, we delivered solid growth on the top- and bottom-line while increasing investment in new growth opportunities for our current products and our promising R&D pipeline," said Bruce C. Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals plc. "We look forward to 2016 as we focus on delivering growth of our key commercial products, preparing for our planned launch of defibrotide in the U.S., reaching important clinical milestones, including completing enrollment and determining preliminary results of our JZP-110 Phase 3 safety and efficacy studies, and potentially expanding our commercial and development portfolio through corporate development activities."

Adjusted net income attributable to Jazz Pharmaceuticals plc for 2015 was $600.1 million, or $9.52 per diluted share, compared to $520.5 million, or $8.31 per diluted share, for 2014. Adjusted net income attributable to Jazz Pharmaceuticals plc for the fourth quarter of 2015 was $163.5 million, or $2.60 per diluted share, compared to $151.1 million, or $2.40 per diluted share, for the fourth quarter of 2014.

GAAP net income attributable to Jazz Pharmaceuticals plc for 2015 was $329.5 million, or $5.23 per diluted share, compared to $58.4 million, or $0.93 per diluted share, for 2014. GAAP net income attributable to Jazz Pharmaceuticals plc for the fourth quarter of 2015 was $82.8 million, or $1.32 per diluted share, compared to $81.6 million, or $1.30 per diluted share, for the fourth quarter of 2014. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included in this press release.

2015 Revenues and Product Sales
Total revenues for the year ended December 31, 2015 were $1,324.8 million, an increase of 13% over total revenues of $1,172.9 million for the year ended December 31, 2014. Total revenues for the fourth quarter of 2015 were $340.9 million, an increase of 4% over total revenues of $328.1 million for the fourth quarter of 2014. The increase in total revenues was driven by higher net product sales of Xyrem (sodium oxybate) oral solution. Total revenues include net product sales, royalties and contract revenues.

Net product sales for 2015 and the fourth quarter of 2015 were as follows:
•
Xyrem: 2015 Xyrem net sales increased by 23% to $955.2 million compared to $778.6 million during the prior year. Xyrem net sales increased by 13% to $251.8 million in the fourth quarter of 2015 compared to $222.5 million in the fourth quarter of 2014.

• Erwinaze/Erwinase (asparaginase Erwinia chrysanthemi): 2015 Erwinaze/Erwinase net sales were $203.3 million compared to $199.7 million during the prior year. Erwinaze/Erwinase net sales were $50.4 million in the fourth quarter of 2015 compared to $52.8 million in the fourth quarter of 2014. Product sales volume for the full year and fourth quarter of 2015 increased

compared to the same periods in 2014; however, net sales were negatively impacted by higher chargebacks and rebates and unfavorable foreign currency exchange rates. In the fourth quarter of 2015, the company experienced supply challenges that disrupted the ability to fully supply certain markets.

• Defitelio (defibrotide): 2015 Defitelio/defibrotide net sales were $70.7 million compared to 2014 full year pro forma Defitelio/defibrotide net sales of $73.4 million. Defitelio/defibrotide net sales from the period beginning from the closing of its acquisition of Gentium S.r.l. on January 23, 2014 to December 31, 2014 were $70.5 million. Defitelio/defibrotide net sales were $18.5 million in the fourth quarter of 2015 compared to $19.2 million in the fourth quarter of 2014. Product sales volume for the full year and fourth quarter of 2015 was consistent with the company’s expectations and higher than the same periods in 2014, but net sales were impacted by unfavorable foreign currency exchange rates.

• Prialt (ziconotide) intrathecal infusion: Prialt net sales were $26.4 million in both 2015 and 2014. Prialt net sales were $6.5 million in the fourth quarter of 2015 compared to $10.0 million in the fourth quarter of 2014. Net sales in the fourth quarter of 2014 included shipments to Eisai Co., the European distributor of Prialt.

• Psychiatry products: 2015 net sales of the company’s psychiatry products were $37.1 million compared to $40.9 million in the prior year. Net sales of the company’s psychiatry products were $8.8 million in the fourth quarter of 2015 compared to $8.4 million in the fourth quarter of 2014.

• Other: 2015 net sales of other products were $24.1 million compared to 2014 full year pro forma net sales of other products of $47.0 million. Net sales of other products in the fourth quarter of 2015 were $3.0 million compared to $11.3 million in the fourth quarter of 2014. In March 2015, the company completed the sale of certain products and the related business that the company acquired as part of the acquisition of EUSA Pharma Inc. in 2012.

Tables showing actual net product sales for the three months and year ended December 31, 2015 and 2014 and pro forma net product sales for the year ended December 31, 2014 are included in this press release.

Operating Expenses and Other
Operating expenses for 2015 were $816.6 million compared to $977.3 million for 2014. Operating expenses for 2014 included acquired in-process research and development expenses of $202.6 million. Operating expenses for the fourth quarter of 2015 were $234.3 million compared to $198.2 million for the fourth quarter of 2014. Operating expenses changed over the prior year periods primarily due to the following:

• Cost of product sales for 2015 was $102.5 million compared to $117.4 million for 2014. Cost of product sales for the fourth quarter of 2015 was $24.0 million compared to $28.8 million for the same period in 2014. Gross margin for 2015 was 92.2% compared to 89.9% for 2014. Gross margin for the fourth quarter of 2015 was 92.9% compared to 91.1% for the same period in 2014.

• Selling, general and administrative (SG&A) expenses for 2015 on a GAAP basis were $449.1 million compared to $406.1 million for 2014. SG&A expenses for the fourth quarter of 2015 on a GAAP basis were $125.6 million compared to $105.7 million for the same period in 2014. Adjusted SG&A expenses for 2015 were $355.4 million, or 27% of total revenues, compared to $321.5 million, or 27% of total revenues, for 2014. Adjusted SG&A expenses for the fourth quarter of 2015 were $87.4 million, or 26% of total revenues, compared to $83.5 million, or 25% of total revenues, for the same period in 2014. The increases were primarily due to higher headcount and other expenses resulting from the expansion of the company’s business, except that the increase in GAAP SG&A expenses for the fourth quarter of 2015 compared to the same period in 2014 was primarily due to a one-time charge for settlement of a contract claim originally

asserted against Azur Pharma Public Limited Company (Azur Pharma) prior to the 2012 merger between Azur Pharma and Jazz Pharmaceuticals, Inc.

• Research and development (R&D) expenses for 2015 on a GAAP basis were $135.3 million compared to $85.2 million for 2014. R&D expenses for the fourth quarter of 2015 on a GAAP basis were $29.5 million compared to $24.6 million for the same period in 2014. Adjusted R&D expenses for 2015 were $96.7 million, or 7% of total revenues, compared to $71.8 million, or 6% of total revenues, for 2014. Adjusted R&D expenses for the fourth quarter of 2015 were $26.0 million, or 8% of total revenues, compared to $21.2 million, or 6% of total revenues, for the same period in 2014. The increases were primarily due to higher costs for clinical studies and outside services for the development of JZP-110 and line extensions for the company’s existing products, except that the increase in GAAP R&D expenses for full year 2015 compared to the same period in 2014 was primarily due to a $25.0 million milestone payment that was triggered by the acceptance for filing by the U.S. Food and Drug Administration (FDA) of the first new drug application (NDA) for defibrotide.

• Acquired in-process research and development expenses of $202.6 million in 2014 primarily related to upfront and milestone payments of $127.0 million made in connection with the acquisition of rights to JZP-110 and an upfront payment of $75.0 million made in connection with the acquisition of rights to defibrotide in the Americas.

• Impairment charges of $31.5 million in 2015 resulted from the termination of the suspended JZP-416 study. Impairment charges of $39.4 million in 2014 related to certain products we sold in March 2015 that we acquired as part of the EUSA acquisition.
Net interest expense in 2015 was $56.9 million compared to $52.7 million for 2014. Net interest expense for the fourth quarter of 2015 was $12.2 million compared to $16.7 million for the fourth quarter of 2014. In June 2015, the company refinanced its existing term loans and revolving credit facility and obtained more favorable interest rates, which reduced interest expense in the second half of 2015.

As of December 31, 2015, cash and cash equivalents were $988.8 million, and the outstanding principal balance of the company’s long-term debt was $1.3 billion. Cash and cash equivalents increased during 2015 primarily due to cash generated by the business.
During 2015, the company repurchased 0.4 million ordinary shares for $61.6 million at an average cost of $150.24 per ordinary share.