On January 10, 2016 Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) reported key 2016 business priorities to support the company’s efforts to discover and develop medicines for people with cystic fibrosis (CF) and other serious diseases (Press release, Vertex Pharmaceuticals, JAN 10, 2016, View Source [SID:1234508735]). Approximately 25,000 people worldwide are currently eligible for one of Vertex’s two approved medicines for CF, and Vertex today provided an update on its plans to develop new medicines that have the potential to treat all people with CF. These updates were made in advance of the 34th Annual J.P. Morgan Healthcare Conference that begins tomorrow in San Francisco. Vertex’s Chairman, President and Chief Executive Officer, Jeffrey Leiden, M.D., Ph.D., will discuss the company’s 2016 priorities as part of a live presentation on Monday, January 11 at 9:30 a.m. PT (12:30 p.m. ET). The presentation will be webcast on Vertex’s website, www.vrtx.com.

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Vertex also today provided preliminary financial results for 2015 and a financial outlook for 2016. Vertex expects to report total 2015 net product revenues of approximately $980 million, including fourth quarter 2015 net product revenues of approximately $180 million for KALYDECO (ivacaftor) and approximately $220 million for ORKAMBI (lumacaftor/ivacaftor). As of December 31, 2015 more than 4,500 people had begun treatment with ORKAMBI in the U.S. Vertex also today provided 2016 net product revenue guidance of $670 to $690 million for KALYDECO and guidance of $1.18 to $1.23 billion for non-GAAP operating expenses, excluding costs of revenues. The company expects to provide net product revenue guidance for ORKAMBI during 2016 after gaining additional information on the launch of ORKAMBI in the U.S.

"As we enter 2016, Vertex is a company with the scientific expertise and the financial strength to consistently discover and develop transformational medicines for people with cystic fibrosis and other serious diseases," said Dr. Leiden. "With the approvals of ORKAMBI in 2015, the continued expansion in the number of people eligible for KALYDECO and the advancement of our CF pipeline, we’ve made tremendous progress toward our goal of developing new medicines for all people with cystic fibrosis."

Approved Medicines for Cystic Fibrosis

With the approval of ORKAMBI in the U.S. and Europe, and continued expansion in the number of people eligible for treatment with KALYDECO, approximately 25,000 people are now eligible for KALYDECO or ORKAMBI to treat the cause of their CF. +or KALYDECO or ORKAMBI.

Vertex today provided the following updates for KALYDECO, ORKAMBI and the company’s efforts to develop new medicines with the goal of treating all people with CF:

ORKAMBI – Approximately 20,500 people in the U.S. and Europe Eligible for Treatment

In 2015, Vertex received regulatory approval for ORKAMBI for the treatment of people with CF aged 12 and older with two copies of the F508del mutation in the U.S. and European Union, where together there are approximately 20,500 people who are eligible for treatment with ORKAMBI. Following the approval in the European Union in November 2015, Vertex has now begun the country-by-country reimbursement approval process.

Ongoing Phase 3 Studies in Children Ages 6 to 11: Vertex is currently conducting two Phase 3 clinical studies of lumacaftor/ivacaftor in children 6 to 11 years of age to support potential approval in children as young as six years of age. The first study is evaluating lumacaftor/ivacaftor in approximately 50 children to support the potential FDA approval in children ages 6 to 11. The primary endpoint of this six-month study is safety. Vertex plans to submit an sNDA to the FDA in the first half of 2016, pending data from this study. There are approximately 2,400 children ages 6-11 who have two copies of the F508del mutation in the U.S. To support approval in the European Union, a six-month Phase 3 efficacy study is ongoing to evaluate lumacaftor/ivacaftor in approximately 200 children. The primary endpoint of the second study is the absolute change in lung clearance index. There are approximately 3,400 children ages 6-11 who have two copies of the F508del mutation in the European Union.

KALYDECO – Continued label-expansion efforts to increase the number of people eligible for treatment

Supplemental New Drug Application in Residual Function Mutations: On October 7, Vertex announced that a supplemental New Drug Application for the use of KALYDECO in people ages two and older with one of 23 residual function mutations was accepted for review by the FDA. The FDA granted Vertex’s request for Priority Review of this sNDA, and a target review date of February 7, 2016 was set under the Prescription Drug User Fee Act (PDUFA) for the FDA’s decision on the sNDA. More than 1,500 people with CF in the U.S. have the mutations represented in the sNDA.

Study in Children Less Than Two Years of Age: As CF-related complications can emerge early in life, Vertex is preparing to initiate a clinical study of KALYDECO in children less than two years of age to evaluate the effect of KALYDECO on markers of CF disease in young children. The study will utilize a weight-based dose of KALYDECO granules that can be mixed in soft foods or liquids. The study is expected to begin in the first quarter of 2016 and will enroll infants with one of the 10 mutations for which KALYDECO is currently approved.

Pipeline of Investigational Medicines for CF

VX-661 – Broad Phase 3 program ongoing in multiple groups of people with CF

Four Phase 3 studies of the investigational combination of VX-661 and ivacaftor are ongoing in multiple different groups of people with CF who have at least one copy of the F508del mutation. These studies are enrolling people with CF with the following mutations:

Two Copies of the F508del Mutation
One Copy of the F508del Mutation and a Second Mutation that Results in a Gating Defect in the Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) Protein
One Copy of the F508del Mutation and a Second Mutation that Results in Residual CFTR Function
One Copy of the F508del Mutation and A Second Mutation that Results in Minimal CFTR Function
The study in people with two copies of the F508del mutation is expected to complete enrollment in mid-2016, and data from this six-month study are expected by early 2017. Part A of the study in people with a mutation that results in minimal CFTR function is expected to complete enrollment in mid-2016, and an interim futility analysis of efficacy data from Part A of the study is expected to be completed by the end of 2016. The two studies in people with gating or residual function mutations are expected to complete enrollment by the end of 2016, and data from these studies are expected in the first half of 2017.

In addition to evaluating the efficacy of the combination regimen, these four Phase 3 studies will also provide safety data on the combination of VX-661 and ivacaftor to support the planned development of a triple combination regimen that includes a next-generation corrector in combination with VX-661 and ivacaftor.

VX-371 – Potential for ENaC inhibitor to amplify effect of CFTR modulation and provide benefit to other groups of people with CF

Vertex is collaborating with Parion Sciences to develop the investigational epithelial sodium channel (ENaC) inhibitor VX-371 as a potential treatment for all people with CF, regardless of CFTR mutation. Parion is currently conducting an exploratory Phase 2a study (known as the CLEAN-CF study) of inhaled VX-371 (P-1037) in approximately 120 people with CF. The study is enrolling people with a confirmed diagnosis of CF and any CFTR mutation. The primary endpoint of the study is safety, and results are expected in mid-2016. Additionally, Vertex plans to conduct a placebo-controlled Phase 2a study to evaluate VX-371 in patients taking lumacaftor/ivacaftor, both with and without the addition of hypertonic saline, who have two copies of the F508del mutation. This Phase 2a study is expected to begin in the first quarter of 2016.

Preclinical evaluation in human bronchial epithelial (HBE) cells from people with CF who have two copies of the F508del mutation showed that the addition of investigational VX-371 to lumacaftor/ivacaftor resulted in an additional increase in both airway surface liquid and cilia beat frequency compared to baseline and to the use of VX-371 or lumacaftor/ivacaftor alone. Improvements in airway surface liquid height and cilia beat frequency are measures of increased hydration of the cell surface.

Next-Generation Correctors -Triple combination studies planned for second half of 2016

Vertex recently began clinical development of two next-generation correctors known as VX-152 and VX-440. Both VX-152 and VX-440 are being evaluated alone and as part of a triple combination with VX-661 and ivacaftor in ongoing Phase 1 studies in healthy volunteers. These studies are evaluating escalating doses of VX-152 and VX-440 for up to 14 days in duration. Pending results of these studies, Vertex plans to initiate Phase 2 studies in people with CF to evaluate VX-440 or VX-152 in combination with VX-661/ivacaftor in the second half of 2016. The Phase 2 studies of a triple combination (VX-152/VX-661/ivacaftor and VX-440/VX-661/ivacaftor) are expected to enroll three groups of people with CF with the following mutations:

Two Copies of the F508del Mutation
One Copy of the F508del Mutation and a Second Mutation that Results in Minimal CFTR Function
One Copy of the F508del Mutation and a Second Mutation that is Known to be Responsive to ivacaftor
The Phase 2 studies are expected to be 28 days in duration.

CRISPR Collaboration – Gene editing collaboration focused on discovering treatments to address the mutations and genes known to cause and contribute to CF

In October 2015, Vertex announced that it had entered into a strategic research collaboration with CRISPR Therapeutics focused on the use of CRISPR’s gene editing technology, known as CRISPR-Cas9, to discover and develop potential new treatments aimed at the underlying genetic causes of human disease. The collaboration will evaluate the use of CRISPR-Cas9 across multiple diseases where targets have been validated through human genetics. As part of the collaboration, Vertex and CRISPR will evaluate the use of CRISPR-Cas9 to potentially correct the mutations in the CFTR gene known to result in the defective protein that causes CF and to edit other genes that contribute to the disease.

Research and Development Programs

Beyond CF, Vertex is advancing multiple research and development programs focused on the treatment of key mechanisms in multiple serious diseases. The company today provided the following updates to its pipeline programs:

Oncology – Three investigational medicines designed to inhibit DNA repair pathways

Vertex has three investigational medicines in early development that are designed to inhibit DNA repair pathways that are fundamental to the survival and proliferation of certain cancers. These investigational medicines, which were discovered by Vertex scientists, may be applicable to the treatment of multiple tumor types.

VX-970: Multiple Ongoing and Planned Studies in People with Solid Tumors: VX-970 is Vertex’s most advanced drug candidate in oncology. By inhibiting a protein kinase known as ATR, VX-970 targets a critical regulator of the DNA damage repair system. Cancer cells often have defects in the DNA damage repair system that contribute to disease progression and drive reliance on ATR for survival from DNA damage. Inhibition of ATR may therefore selectively kill cancer cells under DNA damaging conditions.
Vertex’s strategy is to evaluate VX-970 in early-stage trials in selected tumor types and patient subtypes that are expected to be responsive to ATR inhibition based on biomarker data. These studies will be used to generate data that will inform potential late-stage clinical development. Vertex expects VX-970 to be evaluated as monotherapy and in combination with other cancer therapies, including PARP inhibitors and other targeted agents, chemotherapy, radiotherapy and immuno-oncology therapies. Vertex is currently conducting two Phase 1/2 studies that are enrolling specific cohorts of triple-negative breast cancer patients and non-small cell lung cancer patients. In these studies, VX-970 is being dosed in combination with commonly used DNA-damaging therapies. Vertex anticipates that preliminary clinical data from these studies will be available for presentation at medical meetings in 2016.

In addition to its two ongoing clinical studies of VX-970, Vertex has entered into two cooperative research and development agreements (CRADAs) with the National Cancer Institute to support evaluation of VX-970 across other types of cancers. The CRADA enables NCI to conduct multiple clinical studies that will evaluate treatment with VX-970 in people with non-small cell lung, head and neck, bladder, ovarian and other cancers. The first study conducted under the CRADA with the NCI Center for Cancer Research is ongoing, and the first of up to 7 planned studies under the NCI Division of Cancer Treatment and Diagnosis sponsorship is expected to begin in the first half of 2016.

Vertex is also developing a second ATR inhibitor known as VX-803, which is dosed orally. An ongoing Phase 1 study is evaluating escalating doses of VX-803 alone and in combination with chemotherapy.

VX-984: Phase 1 Study Ongoing: Vertex is developing VX-984, an inhibitor of DNA-dependent protein kinase that also targets the DNA damage repair system. VX-984 may be evaluated in a variety of tumor types in combination with commonly used chemotherapy and/or radiation therapy. Vertex recently initiated the first clinical study of VX-984. The study is evaluating escalating doses of VX-984 alone and in combination with pegylated liposomal doxorubicin.
Pain – Two investigational medicines designed to inhibit sodium channels involved in pain sensation

VX-150: Phase 2 Proof-of-Concept Study in Osteoarthritis: Vertex is developing VX-150 as a potential medicine for the treatment of pain. VX-150 is designed to block pain signaling through inhibition of a sodium channel known as NaV 1.8. Vertex recently completed a Phase 1 study in healthy volunteers to evaluate the safety and pharmacokinetics of VX-150. Based on data from this study, Vertex recently initiated a 14-day Phase 2 proof-of-concept study of VX-150 in approximately 100 people with symptomatic osteoarthritis of the knee. Additionally, Vertex is advancing a second investigational sodium channel inhibitor known as VX-241, which is an inhibitor of a sodium channel known as NaV 1.7. Vertex plans to begin clinical development of VX-241 in the first half of 2016. There is a strong rationale for exploring the treatment of pain through inhibition of these two sodium channels based on human genetics and well-documented roles in pain sensation.
Epithelial Sodium Channel (ENaC) Inhibition -Phase 2 study of VX-371 in primary ciliary dyskinesia (PCD)

In addition to ongoing and planned Phase 2 studies of VX-371 in cystic fibrosis, Vertex and Parion plan to begin the first study of VX-371 in people with primary ciliary dyskinesia (PCD) in the second half of 2016. PCD is a rare genetic disease that results in a loss of function in key ciliary proteins. The defective proteins lead to dysfunctional beating of cilia on the surface of cells, especially in the lungs where the accumulation of mucus can lead to chronic lung infections, bronchiectasis and progressive lung function decline.

Acute Spinal Cord Injury – Phase 2 study of VX-210 planned for first half of 2016

Vertex is developing VX-210 as a potential medicine for acute spinal cord injury. VX-210 is designed to inhibit a protein known as Rho that blocks neural regeneration after injury. A randomized, double-blind, placebo controlled Phase 2b/3 study is expected to begin in the first half of 2016 to evaluate the efficacy and safety of VX-210 in patients with certain acute cervical spinal cord injuries.

Influenza – Janssen advancing novel treatment for influenza discovered by Vertex

JNJ-872 (VX-787) is an investigational medicine for the treatment of influenza discovered by Vertex scientists and being developed by Janssen. As part of the agreement with Janssen, Vertex may receive development and commercial milestone payments as well as royalties on future product sales.

CRISPR Collaboration – Gene editing collaboration focused on genetic diseases, including sickle cell disease

In addition to the focus on the discovery of treatments to address the mutations and genes known to cause and contribute to cystic fibrosis, Vertex and CRISPR Therapeutics are seeking to discover and develop multiple other gene-based treatments for other genetic diseases. The companies will initially seek to discover and develop gene-based treatments for hemoglobinopathies, including sickle cell disease. Additional discovery efforts focused on a specified number of other genetic targets will also be conducted under the collaboration. Vertex has the option to an exclusive license for up to six gene-based treatments that emerge from the four-year research collaboration.

2015 Financial Highlights and 2016 Financial Outlook

"Entering 2016, we have significantly increased the number of people being treated with our CF medicines, which results in increased revenues and positions us to deliver growing earnings while continuing to invest in the discovery of future medicines," said Ian Smith, Executive Vice President and Chief Financial Officer for Vertex. "We have now begun an important transition toward being a company that delivers earnings growth and sustained profitability as we advance multiple potential new medicines for CF and other diseases in the years ahead."

The company will announce its complete year-end and fourth quarter financial results on January 27, 2016 and today provided selected financial results for 2015, as summarized below:

Vertex expects to report 2015 operating expenses, excluding cost of revenues, (combined non-GAAP R&D and SG&A expenses) of approximately $1.06 billion. The company entered 2016 with approximately $1.04 billion in cash, cash equivalents and marketable securities. As of December 31, 2015, Vertex had $300 million outstanding from a credit agreement that provides for a secured loan of up to $500 million.

Vertex also today provided 2016 net product revenue guidance for KALYDECO, guidance for non-GAAP operating expenses, excluding cost of revenues, (combined non-GAAP R&D and SG&A expenses) and an update on the company’s expectation for providing ORKAMBI net revenue guidance in 2016, as summarized below:

2016 Financial Guidance

KALYDECO: Vertex anticipates total 2016 KALYDECO net product revenues of $670 to $690 million, which excludes any revenues related to the potential approval of KALYDECO for people in the U.S. who have residual function mutations. Anticipated 2016 KALYDECO net revenues reflect the expectation for approximately 200 patients with a gating mutation to enroll in a Phase 3 clinical study of VX-661 in combination with ivacaftor who would otherwise receive KALYDECO, which will thus reduce 2016 KALYDECO revenues.

ORKAMBI: The company expects to provide net product revenue guidance for ORKAMBI during 2016 after gaining additional information on the launch of ORKAMBI in the U.S., including:
The total proportion of the 8,500 eligible patients who begin treatment with ORKAMBI in 2016.
The rate at which patients initiate treatment in 2016.
The proportion of initiated patients who remain on treatment.
The compliance rate for patients who remain on treatment.

As of December 31, more than 4,500 people had begun treatment with ORKAMBI in the U.S. since the approval of the medicine in July 2015. Vertex expects the vast majority of eligible patients in the U.S. will begin treatment by the end of 2016.

Vertex expects to recognize revenues from sales of ORKAMBI in the U.S. and Germany in 2016. The company does not anticipate any other significant revenues from European or other countries in 2016.

— Operating Expenses, Excluding Cost of Revenues (Combined Non-GAAP R&D and SG&A Expenses): Vertex expects that its combined non-GAAP R&D and SG&A expenses in 2016 will be in the range of $1.18 to $1.23 billion. The increase as compared to 2015 is primarily a result of expanded development efforts related to the pivotal Phase 3 development program for VX-661 in combination with ivacaftor and for multiple Phase 1 and 2 studies of Vertex’s early-stage and mid-stage pipeline of potential CF medicines and anticipated costs to support the launch of ORKAMBI in new global markets. Vertex’s expected non-GAAP R&D and SG&A expenses exclude stock-based compensation expense and certain other expenses the company anticipates recording in 2016.

U.S. INDICATION AND IMPORTANT SAFETY INFORMATION FOR ORKAMBI (lumacaftor/ivacaftor) TABLETS

ORKAMBI is a combination of lumacaftor and ivacaftor indicated for the treatment of cystic fibrosis (CF) in patients age 12 years and older who are homozygous for the F508del mutation in the CFTR gene. The efficacy and safety of ORKAMBI have not been established in patients with CF other than those homozygous for the F508del mutation.

Worsening of liver function, including hepatic encephalopathy, in patients with advanced liver disease has been reported in some patients with CF while receiving ORKAMBI.

Serious adverse reactions related to elevated transaminases have been reported in patients with CF receiving ORKAMBI and, in some instances, associated with concomitant elevations in total serum bilirubin.

Respiratory events (e.g., chest discomfort, shortness of breath, and chest tightness) were observed more commonly in patients during initiation of ORKAMBI compared to those who received placebo. Clinical experience in patients with percent predicted FEV1 < 40 is limited, and additional monitoring of these patients is recommended during initiation of therapy.

Co-administration of ORKAMBI with sensitive CYP3A substrates or CYP3A substrates with a narrow therapeutic index is not recommended as ORKAMBI may reduce their effectiveness. ORKAMBI may substantially decrease hormonal contraceptive exposure, reducing their effectiveness and increasing the incidence of menstruation-associated adverse reactions. Co-administration with strong CYP3A inducers is not recommended as they may reduce the therapeutic effectiveness of ORKAMBI.

Abnormalities of the eye lens (cataracts) have been reported in pediatric patients treated with ivacaftor, a component of ORKAMBI.

The most common adverse reactions associated with ORKAMBI include shortness of breath, sore throat, nausea, diarrhea, upper respiratory tract infection, fatigue, chest tightness, increased blood creatinine phosphokinase, rash, flatulence, runny nose, and influenza.

Please see the full prescribing information for ORKAMBI.

U.S. INDICATION AND IMPORTANT SAFETY INFORMATION FOR KALYDECO (ivacaftor)

KALYDECO is a cystic fibrosis transmembrane conductance regulatory (CFTR) potentiator indicated for the treatment of cystic fibrosis (CF) in patients age 2 years and older who have one of the following mutations in the CFTR gene: G551D, G1244E, G1349D, G178R, G551S, S1251N, S1255P, S549N, S549R or R117H.

KALYDECO is not effective in patients with CF with 2 copies of the F508del mutation (F508del/F508del) in the CFTR gene. The safety and efficacy of KALYDECO in children with CF younger than 2 years of age have not been studied. The use of KALYDECO in children under the age of 2 years is not recommended.

High liver enzymes (transaminases; ALT and AST) have been reported in patients with CF receiving KALYDECO.

Use of KALYDECO with medicines that are strong CYP3A inducers substantially decreases exposure of KALYDECO and may diminish effectiveness. Therefore, co-administration is not recommended. The dose of KALYDECO must be adjusted when used concomitantly with strong and moderate CYP3A inhibitors or when used in patients with moderate or severe hepatic disease.

Cases of non-congenital lens opacities/cataracts have been reported in pediatric patients treated with KALYDECO.

The most common side effects associated with KALYDECO include headache; upper respiratory tract infection (common cold), including sore throat, nasal or sinus congestion, and runny nose; stomach (abdominal) pain; diarrhea; rash; nausea; and dizziness.

Please see the full prescribing information for KALYDECO.

On January 8, 2016 Kolltan Pharmaceuticals, Inc., a privately held clinical-stage company focused on the discovery and development of novel antibody-based drugs targeting receptor tyrosine kinases (RTKs) for use in oncology and immunology, reported corporate developments, progress of the Company’s lead development programs and research pipeline and upcoming milestones (Press release, Kolltan Pharmaceuticals, JAN 8, 2016, View Source [SID:1234508707]). Based on significant progress achieved in 2015, the Company now has two clinical stage development programs in oncology, KTN3379 and KTN0158, and is advancing a research pipeline focused on the TAM family of RTKs (Tyro3, Axl and MerTK) for potential use in oncology, inflammation and autoimmunity. KTN3379, targeting ErbB3, is currently being evaluated in three Phase 1b clinical trials for the treatment of solid tumors with data showing early signs of efficacy, and the Company plans to initiate a Phase 2 clinical trial in 2016. KTN0158, targeting KIT, is currently in a Phase 1 clinical trial for the treatment of gastro-intestinal stromal tumors (GIST) and other KIT expressing tumors. The Company’s important corporate developments in 2015 include the expansion of its executive management team, the issuance of a key patent and multiple notices of allowances related to its antibody portfolio, modification of an agreement with MedImmune to ensure control of future development and commercial activities for KTN3379 as well as to arrange for additional KTN3379 drug supply for Phase 2 clinical trials, and ongoing partnering discussions related to the TAM program.

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The Company reported today that KTN0158 has been administered to the first cancer patient in a Phase 1 clinical trial following the acceptance by the U.S. Food and Drug Administration (FDA) of an IND application for KTN0158. KTN0158 is a potential first-in-class, humanized anti-KIT monoclonal antibody drug candidate discovered at Kolltan using structural insights obtained from the laboratory of Dr. Joseph Schlessinger at Yale University. In preclinical studies, KTN0158 has exhibited highly potent and selective inhibition of KIT expressed on cancer cells and mast cells, supporting its potential use in the treatment of cancers and other mast cell-related disorders. KTN0158 is the second clinical-stage program for Kolltan and is currently in an open-label, dose-escalating Phase 1 clinical trial focused on cancer patients with gastrointestinal stromal tumors (GIST) and other tumors expressing KIT. In 2015, the Company presented preclinical data supporting the potential use of KTN0158 in cancer through its direct impact on KIT as an oncogenic driver and through its immunomodulatory effects on mast cells and myeloid-derived suppressor cells (MDSCs), thereby potentially augmenting the effectiveness of T-cell checkpoint inhibitors. The Company expects that favorable safety, pharmacokinetic, pharmacodynamic and early tumor response data later this year would support expanded clinical trials of KTN0158 in cancer patients as a monotherapy and in combination with TKIs (tyrosine kinase inhibitors) and T-cell checkpoint inhibitor drugs.

In addition, the Company announced that KTN3379, a potential best-in-class antibody targeting ErbB3 (HER3), continues to enroll patients in three active Phase 1b clinical trials that are evaluating the safety and efficacy of KTN3379 in combination with several targeted therapies in cancer patients with lung, breast, gastric, colorectal, thyroid, and head and neck cancer. Data from these ongoing studies are expected to be presented at medical conferences during 2016. Kolltan also announced that the U.S. Patent Office has granted U.S. Patent No. 9,220,775, which contains claims for composition of matter and uses relating to KTN3379. This patent will expire in November 2032, not including any patent term extensions.

Lastly, Kolltan announced that active discovery efforts are underway for the TAM research program to identify antibodies that can modulate the TAM family of RTKs (Tyro3, Axl and MerTK). The TAM receptors are expressed on macrophages and dendritic cells and have been implicated as drug targets for oncology, inflammation, and autoimmunity. The Company is evaluating potential partnerships for the TAM program.

"The past year has been a period of exceptional accomplishment at Kolltan, and our company is excited and energized as we continue to progress our oncology and immunology portfolio, including our most advanced product candidates in the clinic, KTN3379 and KTN0158," said Gerald McMahon, Ph.D., President and Chief Executive Officer of Kolltan. "Last year, Dr. Ronald A. Peck joined Kolltan as Chief Medical Officer and Senior Vice President, Clinical Development, and his expertise in immuno-oncology is particularly useful as we evaluate KTN0158 as both an anti-tumor drug candidate as well as an immuno-oncology drug candidate to potentiate T-cell checkpoint inhibitor drugs. Our lead program, KTN3379, continues to enroll patients and generate data supporting our plan to initiate a Phase 2 clinical trial in 2016. This antibody has a novel mechanism of action which has been recently published and is protected by an issued composition of matter patent from the U.S. patent office. In addition, our immunology portfolio continues to expand as we now have identified our first prototype antibodies targeting the TAM receptors."

Recent Highlights and Upcoming Milestones

In 2015, Kolltan reported substantial progress in its R&D pipeline, including the Company’s clinical-stage programs, KTN3379 and KTN0158.

KTN3379

• In October 2015, Kolltan announced interim Phase 1b safety and efficacy data for KTN3379 showing evidence of sustained tumor shrinkage in several late-stage cancer patients.

o Confirmed responses include an ongoing complete response in a patient with head and neck cancer treated with KTN3379 plus cetuximab who had progressed on prior cetuximab therapy, partial responses in two patients with BRAF-mutant non small cell lung cancer (NSCLC) treated with KTN3379 plus vemurafenib, one of which had previously progressed during treatment with another BRAF inhibitor, and a patient with BRAF-mutant colorectal cancer treated with KTN3379 plus vemurafenib who had durable stable disease.

o Based on these initial efficacy signals, Kolltan expanded its KTN3379 program with two new clinical trials: (1) a Phase 1b study in thyroid cancer evaluating the treatment of patients with radioactive iodine refractory BRAF-mutated cancers with a combination of KTN3379 and vemurafenib, and (2) a clinical study evaluating tumor biomarker responses to KTN3379 in newly diagnosed patients with head and neck cancers who are treated with KTN3379 prior to their surgical resection.

• At the recent AACR (Free AACR Whitepaper)-NCI-EORTC International Conference held in November 2015, the Company presented preclinical findings showing that KTN3379 reverses ErbB3-mediated resistance of BRAF and MEK inhibitors in BRAF-mutated thyroid cancer and melanoma. These preclinical findings support Kolltan’s ongoing Phase 1b clinical trials in BRAF-mutant tumors and the recently initiated clinical trial in thyroid cancer.

• At the AACR (Free AACR Whitepaper) Conference held in April 2015, the Company presented preclinical findings showing that KTN3379 and cetuximab as a dual ErbB blockade yields enhanced anti-tumor activity in head and neck cancer by inhibiting parallel signaling pathways, AKT and ERK. The Company also presented data showing that there is a high prevalence of neuregulin overexpression in head and neck cancer.

• Based on the encouraging clinical findings to date and the supportive preclinical data, the Company is planning to initiate Phase 2 clinical trials of KTN3379 in 2016 with an initial focus in head and neck cancer. In addition, Kolltan is exploring partnerships to combine KTN3379 with other targeted therapies for several tumor types where ErbB3 may play a role to drive tumor growth.

• In October 2015, the Proceedings of the National Academy of Sciences published a seminal article* by Dr. Joseph Schlessinger, his laboratory, and Kolltan scientists that describes how KTN3379 binds to ErbB3, leading to a mechanism of action (MOA) that is materially different from other approaches for antibody targeting. The data reveal that KTN3379 effectively locks ErbB3 in an inactive conformation by binding to a unique epitope, which may contribute to the antibody’s high potency and dual MOA, a differentiating feature of KTN3379 compared to other known anti-ErbB3 antibodies. This published research exemplifies the quality and productiveness of Kolltan’s broad collaboration with Yale, including the world-class crystallography efforts in Dr. Schlessinger’s lab that have contributed, and continue to contribute, to antibody discovery and differentiation at Kolltan.
* (Proc Natl Acad Sci U S A. 2015 Oct 27;112(43):13225-30. doi: 10.1073/pnas.1518361112. Epub 2015 Oct 12.)

• In 2015, we modified our agreement with MedImmune to ensure Kolltan’s control of KTN3379 and its future development, which means that Kolltan can progress this product candidate forward independently or with potential corporate partners. As part of this agreement, MedImmune agreed to manufacture certain additional amounts of KTN3379, which will contribute to further advancement of Kolltan’s program and the transition into planned Phase 2 clinical trials.

KTN0158

• Kolltan announced key preclinical data related to KTN0158, a potential first-in-class antibody targeting KIT, at three major conferences – the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Cancer Conference (September 2015), the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Conference (November 2015), and the AACR (Free AACR Whitepaper)-NCI-EORTC International Conference (November 2015).

• As presented at ESMO (Free ESMO Whitepaper), KTN0158 showed substantial tumor shrinkage in a preclinical study in dogs with spontaneous mast cell tumors. Tumor shrinkage was observed at every dose level in all 12 dogs after one or two doses and in tumors with and without activating KIT receptor mutations. The Company expects that KTN0158 will be developed as a monotherapy for 95% of human GIST where KIT is thought to play an important role. The Company also believes KTN0158 may be used in combination with small-molecule approaches to the KIT target in tumors that are limited by mutations and resistance.

• At the SITC (Free SITC Whitepaper) conference, Kolltan reported research demonstrating the potential of anti-KIT antibody therapy to modulate immuno-oncology. Preclinical findings showed that inhibition of KIT with anti-KIT antibodies resulted in a marked decrease in myeloid-derived suppressor cells (MDSCs) in the tumor microenvironment. Additional preclinical data demonstrated that targeting KIT with an antibody enhanced the anti-tumor activity of T-cell checkpoint antibody-based inhibitors. This second feature provides support for clinical trials in several tumor types where blockade by T-cell targeting checkpoint inhibitor antibodies has shown clinical benefit. These combination trials are expected to follow the ongoing Phase 1 clinical trial that was recently initiated and is enrolling patients.

• Based on the preclinical data announced recently and generated since the beginning of 2015, Kolltan plans to aggressively pursue multiple potential pathways to the market, including (1) KTN0158 as a single agent in oncology (e.g., GIST) and in combination with targeted agents; (2) KTN0158 in combination with T-cell checkpoint inhibitors (e.g., anti-CTLA4 and/or anti-PD1/PD-L1 drugs), and (3) KTN1058 in mast cell-related diseases, such as neurofibromatosis 1 (NF1) and other diseases with significant medical needs.

TAM RTK Research

• In 2015, the Company initiated an antibody discovery effort for the TAM family of RTKs that act as rheostats of the immune system. This differentiated family of targets has attractive therapeutic potential across many diseases, including autoimmune and inflammatory disease areas (by stimulating the receptors) and immuno-oncology and anti-viral areas (by inhibiting the receptors). Kolltan has exclusive relationships with the pioneers and thought leaders in the TAM field, including Dr. Greg Lemke of the Salk Institute for Biological Studies and Drs. Schlessinger, Rothlin, and Rimm at Yale University. The Company is currently engaged in discussions to partner the TAM program to discover and develop novel therapeutics for oncology, chronic inflammatory diseases, and autoimmunity.

Corporate Update

• The U.S. and European Patent Offices have issued notices of allowance in companion patent applications related to Dr. Schlessinger’s discovery regarding inhibition of the KIT receptor. Kolltan has an exclusive license to these applications from Yale, which forms the founding IP of Kolltan. Kolltan applied Dr. Schlessinger’s novel insights about the x-ray crystallographic structure of the KIT receptor employing structure based design and identified an antibody (KTN0158) that has a unique way of inhibiting the function of KIT through binding to the domain that is near the cell membrane and blocking dimerization.

• In August 2015, the Company hired Dr. Ronald A. Peck as Chief Medical Officer and Senior Vice President, Clinical Development. Dr. Peck’s exceptional track record and experience in oncology clinical development and his accomplishments in immuno-oncology will contribute to the evaluation of Kolltan’s antibody therapeutics in oncology and other immune-related disorders. Dr. Peck has over 15 years of extensive drug development expertise in oncology and other areas. Prior to joining Kolltan, Dr. Peck held roles of increasing responsibility at Bristol-Myers Squibb Company since 2000, where he contributed to the successful development of multiple therapeutic drug products. Notably, Dr. Peck led the clinical development program for IXEMPRA (ixabepilone), and he served most recently as Vice President, Global Development Lead for YERVOY (ipilimumab), playing a key role in the approval and commercialization of this drug in all indications.

About KTN3379

KTN3379 is a human monoclonal antibody designed to block the activity of ErbB3 (HER3), a receptor tyrosine kinase (RTK) that belongs to the epidermal growth factor receptor, or EGFR, family. ErbB3 is believed to be an important receptor regulating cancer cell growth and survival. ErbB3 is expressed in many cancers, including head and neck, breast, lung, gastric, and melanoma. While there are several successful currently marketed products targeting two members of the EGFR family, there are none that directly target ErbB3. In cancer, ErbB3 activation can be driven by its ligand, neuregulin, or in its absence, through overexpression of its co-receptor ErbB2 (HER2). KTN3379 binds in a unique way to ErbB3 that results in the locking of ErbB3 in an inactive conformation that blocks kinase activation and ligand binding. In addition, KTN3379 has an engineered Fc domain to prevent antibody-mediated clearance leading to serum half-life extension.

Kolltan is conducting multiple clinical trials evaluating KTN3379 in the treatment of solid tumors. These trials include an ongoing Phase 1b multi-center, open-label, dose escalation clinical trial of KTN3379 in patients with solid tumors, with expansion cohorts testing KTN3379 in combination with cetuximab, erlotinib, vemurafenib, or trastuzumab. In addition, the Company is conducting a Phase 1b clinical trial in thyroid cancer, evaluating the treatment of patients with radioactive iodine refractory BRAF-mutated cancers with a combination of KTN3379 and vemurafenib. A third clinical trial is evaluating tissue responses to KTN3379 in newly diagnosed patients with head and neck cancers who are treated with KTN3379 prior to their surgical resection.

About KTN0158

KTN0158 is a proprietary, humanized monoclonal antibody designed using structure-based approaches to block the activation of KIT, an RTK that is expressed on many cancers and mast cells. Kolltan applied novel insights about the x-ray crystallographic structure of the KIT receptor to identify a unique way to inhibit the function of KIT through binding to the domain that is near the cell membrane and blocking dimerization. This targeting of KIT proximal to the membrane is a novel approach compared to targeting ligand binding and led to Kolltan’s discovery of KTN0158.

There are currently no KIT-targeting antibodies on the market for any disease indication. In oncology, KIT is expressed in tumors such as GIST, melanoma, AML, SCLC, and others. Additionally, KIT is expressed in immune suppressive cells in the tumor microenvironment and thus, may provide a novel combination treatment for immuno-oncology. There are several KIT-targeting small molecule drugs approved for use in GIST where mutant KIT is present. However, no KIT-targeting drugs are approved for non-GIST tumor types, and treatment of GIST tumors does not always lead to long-term clinical benefit due to resistance, including secondary mutations that overcome small-molecule drug approaches.

The Company believes KTN0158 as a monoclonal antibody is particularly suited to block KIT dimerization and inhibit activation and signaling of the receptor and therefore result in potent and selective inhibition of both wild-type and some mutant KIT forms. Kolltan filed an IND with the FDA for KTN0158 in late 2015 and has recently initiated a Phase 1 study for the treatment of GIST and other KIT-expressing tumors. A second IND filing for KTN0158 is anticipated in 2017 for neurofibromatosis 1 (NF1). KIT and mast cells have been associated with the etiology of NF1, an orphan disease afflicting approximately 100,000 individuals in the U.S.

On January 8, 2016 Diffusion Pharmaceuticals LLC, a clinical-stage biotechnology company focused on the development of novel small molecule therapeutics for cancer reported the successful completion of its merger with RestorGenex Corporation (OTCQX:RESX) (Press release, Diffusion Pharmaceuticals, JAN 8, 2016, View Source [SID:1234508714]). The combined company is changing its name to Diffusion Pharmaceuticals Inc.

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"Becoming a public company is a key element of our strategy, and the completion of this merger is a significant accomplishment for the Diffusion team," said David Kalergis, chairman and chief executive officer of Diffusion Pharmaceuticals. "We believe that our novel oncology therapeutics for treatment-resistant solid cancers have tremendous potential, and that becoming a publicly traded company affords us the greatest opportunity to capitalize on this large and growing market opportunity." Mr. Kalergis added, "We would like to thank the board and management team of RestorGenex for their confidence in merging our two companies for the benefit of our respective stockholders."

Diffusion Pharmaceuticals Inc. will continue to develop its lead drug candidate, trans sodium crocetinate (TSC), which has demonstrated positive results in a Phase 2 clinical trial in patients newly diagnosed with glioblastoma multiforme (GBM). TSC has received Orphan Drug Designation from the U.S. Food and Drug Administration for the treatment of GBM and expects to enter a Phase III study in newly diagnosed GBM patients in 2016. Future development of TSC includes other orphan indications. The company is planning to commence a Phase II/III trial in pancreatic cancer in 2016 with a Phase II/III study in brain metastases to follow. TSC’s novel mechanism of action enhances the diffusion of oxygen to cancerous tumors, improving the effects of cancer treatments like radiation therapy and chemotherapy. Diffusion will review and prioritize products formerly in the RestorGenex pipeline.

MTS Securities, LLC. acted as exclusive financial advisor to Diffusion and Dechert LLP acted as legal counsel to Diffusion. Raymond James & Associates, Inc. acted as exclusive financial advisor to RestorGenex and Fox Rothschild LLP acted as legal counsel for RestorGenex.

On January 8, 2016 Mylan N.V. (NASDAQ, TASE: MYL) reported that it has entered into an exclusive global collaboration agreement with Momenta Pharmaceuticals, Inc. (Nasdaq: MNTA) to develop, manufacture and commercialize six of Momenta’s current biosimilar candidates, including Momenta’s biosimilar candidate, ORENCIA (abatacept) (Press release, Mylan, JAN 8, 2016, View Source [SID1234523057]).

Mylan CEO Heather Bresch commented, "Mylan’s long-stated strategy has been to strategically invest in the long-term drivers of our future growth, both through our strong internal focus on R&D and through external collaboration with industry-leading partners. Biosimilars have long been one of these areas of important future growth, both for our company and our industry, given the rapidly growing market for biologic products, the undeniable patient need for more affordable versions of these life-saving medicines, and the attractive competitive landscape for the companies that are able to successfully bring these complex products at scale to the global market. This collaboration with Momenta, which is highly complementary to our partnership with Biocon, will position us as a definitive world leader in biosimilars, with a broad portfolio of 15 biosimilar/insulin analog generic products in development and the scale required to maximize investment in this area. Looking forward, Mylan will continue to expand and diversify its portfolio into such complex products, further differentiating us from other leading generics companies and establishing us at the forefront of the biologics space, while also ensuring we maintain one of the broadest, highest quality portfolios in our industry."

"This exciting collaboration with Momenta is focused on the next wave of biosimilar products and represents an important next step for Mylan, leveraging Momenta’s unique technology capabilities and Mylan’s strong science, biosimilar-development experience, operational excellence and expansive global commercial footprint. Importantly, this collaboration builds upon Mylan’s existing successful biologics and insulins collaboration with Biocon, which is focused on more near-term biosimilar opportunities. Through these partnerships, as well as the strong internal capabilities we have cultivated, Mylan is further expanding what is already one of the industry’s most robust and diverse biosimilar portfolios and helping to ensure we can deliver enhanced access to these critical products to patients around the world," continued Ms. Bresch.

Craig A. Wheeler, president and chief executive officer of Momenta Pharmaceuticals, said, "We are thrilled to welcome Mylan as our new collaboration partner for biosimilars. Our two companies have a common focus on building an industry-leading biosimilar portfolio that offers safe, effective and affordable products to the patients that need them. By combining Momenta’s proven capabilities in complex-product development and Mylan’s world-class global R&D, supply chain and commercial infrastructure, we are well positioned to become a strong competitor in this developing field. Our joint vision is to bring high quality, cost-effective biosimilar products to markets worldwide, and we believe our success will deliver a strong return to our companies’ stakeholders."

Under the agreement with Momenta, Mylan will make an up-front cash payment of $45 million and up to $200 million in contingent milestone-related payments to Momenta, with each company sharing equally in the costs and profits with respect to the products. The companies will be jointly responsible for product development, and Mylan will lead worldwide commercialization efforts. All other financial terms and product details remain confidential.

Mylan’s collaboration with Momenta builds upon Mylan’s existing biologics and insulin analog partnership with Biocon. The Biocon partnership includes six biosimilar programs (trastuzumab, pegfilgrastim, adalimumab, bevacizumab, etanercept and filgrastim) and three insulin analogs (glargine, lispro and aspart). Five of these biosimilar programs have successfully completed Phase I clinical trials, and four of the programs are in active Phase III testing. Mylan and Biocon plan on submitting three biosimilar applications and one insulin application in the U.S. and Europe in 2016. Mylan already has successfully launched its trastuzumab biosimilar product in India and other emerging markets.

Mylan President Rajiv Malik commented, "Mylan has been fully engaged in the development of biosimilars with our partner Biocon for the last six years. During that time, Mylan has cultivated strong experience and expertise in the development of biosimilar products, and is executing on our programs with the scientific and analytical rigor required to fulfill health-authority expectations. Based upon our proactive and informative interactions with global health authorities on our nine active programs, we are extremely optimistic about the strength of our current development programs with Biocon, and we look forward to deploying our expertise in our collaboration with Momenta."

On January 8, 2016 Pfizer Inc. (NYSE:PFE) reported an expansion of its Research & Development (R&D) investment strategy to include early-stage companies on the leading edge of scientific innovation, providing them with both equity and access to resources for research in promising areas aligned with Pfizer’s core interests (Press release, Pfizer, JAN 8, 2016, View Source [SID:1234508725]). The first four investments of the newly focused initiative include $46 million in financing to companies at early stages of the discovery process that are actively exploring Conditionally Active Biologics (CABs), immuno-oncology, neurodegenerative technologies and gene therapy. Additional opportunities will continue to be identified by Pfizer’s scientific leadership through their active involvement, and Pfizer will help recipient companies fully explore their platforms in the hopes of advancing new therapeutic pathways.

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"There is exciting scientific discovery happening both within Pfizer and beyond our walls, and we look forward to continuing to explore opportunities to bring our resources to emerging companies investigating in areas where we feel we could make a difference for patients," said Mikael Dolsten, M.D., Ph.D., President of Pfizer Worldwide Research and Development. "The key for Pfizer is to be flexible in how we partner with different companies; we use a range of investment vehicles and collaboration models in R&D to help ensure we tap into the vast, rapidly-evolving ecosystem of healthcare innovation, looking to complement each other’s capabilities so that together we can make a bigger impact."

Today, Pfizer is announcing its investments in the following companies:

BioAtla employs expertise in protein engineering to develop monoclonal antibodies with CAB profiles, a new class of biologic therapeutics that are activated in selected microenvironments within the body, such as those associated with cancerous tumors. As part of the agreement, BioAtla and Pfizer will each have a license to the other’s respective technology to pursue the development and commercialization of several drug-conjugated conditionally-active antibodies. Pfizer also gains an exclusive option to develop and commercialize BioAtla CAB antibodies that target CTLA4, an immuno-oncology target in humans.

NextCure Inc., a new biopharmaceutical company Pfizer helped to form, is focused on the discovery and development of novel immuno-oncology therapeutic products. NextCure was founded by Michael Richman, former CEO of Amplimmune, Inc., who will serve as president and CEO, and Lieping Chen, M.D., Ph.D., United Technologies Endowed Professor of Cancer Research, Professor of Immunobiology, Dermatology, and Medicine at the Yale School of Medicine. The company will develop product candidates licensed from Dr. Chen’s laboratory utilizing a proprietary platform to discover and develop potential novel immuno-oncology targets.

Cortexyme, Inc. is developing novel treatments that aim to alter the course of neurodegenerative diseases. The company is seeking to develop therapeutics based on data supporting a new theory about the underlying cause of Alzheimer’s disease and other degenerative disorders, targeting a specific, undisclosed pathogen linked to neurodegeneration. The target has been validated in a number of animal models and Cortexyme is currently testing several potential lead therapeutics in preclinical studies.
4D Molecular Therapeutics, Inc., an emerging biopharmaceutical company, is working to design, develop and commercialize potentially transformative gene therapy products for serious unmet medical conditions. The company’s Therapeutic Vector Evolution discovery platform allows for the generation of gene vectors that are optimized for efficient gene delivery and uptake, tissue specificity, and evasion of pre-existing antibodies present in most patients. With this investment, Pfizer has been granted an option to exclusively license one or more adeno-associated virus (AAV) vectors for selected cardiac disease-related targets.

Through flexible equity investment and partnership models, Pfizer provides access to world-class scientists, expertise and drug-discovery capabilities, including enabling proprietary technologies, and actively participates in the development of early-stage innovations. The ultimate goal of these investments is to accelerate the pace at which good scientific ideas can become promising therapies. This expanded R&D investment strategy is focused on high-priority therapeutic areas of research where Pfizer is best positioned to bring unique, high-impact therapies to patients not well-served by current treatments. Particular areas meeting these criteria include chronic inflammatory and autoimmune diseases, vaccines, oncology, neuroscience and pain, cardiovascular and metabolic disease, and rare diseases.