On November 5, 2015 Synta Pharmaceuticals Corp. (NASDAQ: SNTA) reported financial results for the third quarter ended September 30, 2015 and provided an update on its business strategy (Press release, Synta Pharmaceuticals, NOV 5, 2015, View Source;p=RssLanding&cat=news&id=2107774 [SID:1234508061]).

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To align its resources with the Company’s operational needs going forward, Synta announced today that it is reducing its workforce by approximately 60% to 33 full time employees. The Company estimates annual savings of at least $8 million in compensation-related costs as a result of the restructuring. Cash payments in connection with the workforce reduction, comprised principally of severance, unused vacation payments, benefits continuation costs and outplacement services, will range from $2.5 million to $2.6 million. The Company expects the restructuring to be substantially completed, and the majority of the related cash payments to be paid, during the fourth quarter of 2015.

The Company also announced today the appointment of Scott Morenstein to its Board of Directors. Mr. Morenstein is a Managing Director at CAM Capital, a private investment company established by Bruce Kovner, a Director of Synta Pharmaceuticals, focused on investment, trading and business activities. Prior to joining CAM Capital, Mr. Morenstein was a Managing Director of Valence Life Sciences and Caxton Advantage Venture Partners, venture capital firms focused on late-stage investing in private and small cap public drug development companies. He was previously a healthcare investment banker and research analyst at Lehman Brothers and Seaview Securities. Mr. Morenstein received a B.A. from the University of Pennsylvania and an M.B.A. from Harvard Business School.

"We continue to evaluate our strategic options following the outcome of our Phase 3 GALAXY-2 trial of ganetespib in lung cancer," said Chen Schor, President and Chief Executive Officer of Synta. "The difficult, but necessary decision to reduce our workforce is an important part of extending our cash runway as we evaluate these options, and we thank the many talented employees that will be leaving the Company for their service. We plan to continue to support key ongoing investigator-sponsored studies while we determine the appropriate path forward for ganetespib. We also look forward to continuing to develop our HDC pipeline."

Third Quarter 2015 Financial Results

There were no revenues recognized in the third quarters of 2015 and 2014.

Research and development expenses were $14.4 million for the third quarter in 2015, compared to $16.2 million for the same period in 2014. General and administrative expenses were $3.0 million for the third quarter in 2015, compared to $3.2 million for the same period in 2014. The Company anticipates that costs under its ganetespib program will decrease significantly in 2016 following the termination of the GALAXY-2 trial and the subsequent restructuring in the fourth quarter of 2015.

The Company reported a net loss of $17.6 million, or $0.13 per basic and diluted share, in the third quarter of 2015, compared to a net loss of $20.0 million, or $0.19 per basic and diluted share, for the same period in 2014.

As of September 30, 2015, the Company had $88.3 million in cash, cash equivalents and marketable securities, compared to $97.7 million in cash, cash equivalents and marketable securities as of December 31, 2014.

More detailed financial information and analysis may be found in the Company’s Quarterly Report on Form 10-Q, which was filed with the Securities and Exchange Commission (SEC) on November 5, 2015.

Guidance

The Company expects its cash resources of approximately $88.3 million as of September 30, 2015, along with lower operating expenses following the termination of the GALAXY-2 trial and the subsequent restructuring in the fourth quarter of 2015, will be sufficient to fund operations at least through the first half of 2017. This estimate assumes no additional funding from new partnership agreements, equity financings or further sales under the Company’s ATM facility. The timing and nature of certain activities contemplated for the remainder of 2015 and 2016 will be conducted subject to the availability of sufficient financial resources.

On November 4, 2015 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN)reported financial results for the third quarter of 2015 and provided an update on development programs (Filing, 8-K, Regeneron, NOV 4, 2015, View Source [SID:1234507951]).

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Financial Highlights

"Our commercial business continues to advance with increased demand for EYLEA, our marketed medicine for serious retinal diseases, and continued launch progress with Praluent, our new therapy for hypercholesterolemia," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "Regeneron also continues to progress the next wave of candidates from our strong pipeline, including sarilumab for rheumatoid arthritis, the BLA for which was recently submitted to the U.S. FDA, and dupilumab, which is in Phase 3 trials for atopic dermatitis and asthma."

Business Highlights

EYLEA (aflibercept) Injection for Intravitreal Injection

• In the third quarter of 2015, net sales of EYLEA in the United States increased 65% to $734 million from $445 million in the third quarter of 2014. Overall distributor inventory levels remained within the Company’s one- to two-week targeted range.

• Bayer HealthCare commercializes EYLEA outside the United States. In the third quarter of 2015, net sales of EYLEA outside of the United States(1) were $371 million, compared to $277 million in the third quarter of 2014. In the third quarter of 2015, Regeneron recognized $131 million from its share of net profit from EYLEA sales outside the United States, compared to $85 million in the third quarter of 2014.

• In October 2015, the European Commission granted marketing authorization of EYLEA for the treatment of visual impairment due to myopic choroidal neovascularization.

Praluent (alirocumab) Injection for the Treatment of High Low-Density Lipoprotein (LDL) Cholesterol

• In July 2015, following the U.S. Food and Drug Administration (FDA) approval of Praluent for the treatment of adults with heterozygous familial hypercholesterolemia (HeFH) or clinical atherosclerotic cardiovascular disease (ASCVD), who require additional lowering of LDL cholesterol, the Company and Sanofi commenced their launch of Praluent. The effect of Praluent on cardiovascular morbidity and mortality has not been determined.

• In the third quarter of 2015, net sales of Praluent in the United States were $4 million. Product sales for Praluent are recorded by Sanofi, and the Company shares in any profits or losses from the commercialization of Praluent.

• In October 2015, Praluent was included in the Express Scripts National Preferred Formulary, the nation’s largest formulary covering approximately 25 million Americans.

• In September 2015, the European Commission granted marketing authorization of Praluent for the treatment of adult patients with primary hypercholesterolemia (HeFH and non-familial) or mixed dyslipidemia as an adjunct to diet (a) in combination with a statin, or statin with other lipid-lowering therapies in patients unable to reach their LDL-cholesterol goals with the maximally-tolerated statin, or (b) alone or in combination with other lipid-lowering therapies for patients who are statin intolerant, or for whom a statin is contraindicated.

• In July 2015, the Company and Sanofi reported that the Phase 3 ODYSSEY JAPAN trial met its primary endpoint.

• The Phase 3 ODYSSEY program remains ongoing.

Pipeline Progress
Regeneron has thirteen fully human monoclonal antibodies generated using the Company’s VelocImmune technology in clinical development, including five in collaboration with Sanofi(5). In addition to Praluent, highlights from the antibody pipeline include:
Sarilumab, the Company’s antibody targeting IL-6R for rheumatoid arthritis, is currently being studied in the global Phase 3 SARIL-RA program. A Biologics License Application (BLA) in the United States was recently submitted to the FDA.

Dupilumab, the Company’s antibody that blocks signaling of IL-4 and IL-13, is currently being studied in atopic dermatitis, asthma, nasal polyps, and eosinophilic esophagitis.

• Multiple Phase 3 studies of dupilumab in atopic dermatitis are currently underway. Phase 3 pivotal trials in atopic dermatitis are fully enrolled.

• The Phase 2 study in atopic dermatitis in adolescents and children completed enrollment.

• The second pivotal study of dupilumab in patients with uncontrolled persistent asthma continues to enroll patients.

Fasinumab, an antibody targeting Nerve Growth Factor (NGF), entered Phase 2b/3 clinical development (sixteen-week study) for pain due to osteoarthritis in the second quarter of 2015. In September 2015, the Company and Mitsubishi Tanabe Pharma Corporation (MTPC) entered into a strategic collaboration providing MTPC with exclusive development and commercial rights to fasinumab in Japan and certain other countries in Asia.

REGN2222, an antibody targeting the respiratory syncytial virus (RSV), entered Phase 3 clinical development in the third quarter of 2015.

Third Quarter 2015 Financial Results

Product Revenues: Net product sales were $738 million in the third quarter of 2015, compared to $449 million in the third quarter of 2014. EYLEA net product sales in the United States were $734 million in the third quarter of 2015, compared to $445 million in the third quarter of 2014.

Total Revenues: Total revenues, which include product revenues described above, increased by 57% to $1,137 million in the third quarter of 2015, compared to $726 million in the third quarter of 2014. Total revenues also include collaboration revenues of $382 million in the third quarter of 2015, compared to $269 million in the third quarter of 2014. Collaboration revenues in the third quarter of 2015 increased primarily due to higher reimbursement of the Company’s research and development expenses under its antibody collaboration with Sanofi and an increase in the Company’s net profit from commercialization of EYLEA outside the United States. Refer to Table 4 for a summary of collaboration revenue.

Research and Development (R&D) Expenses: GAAP R&D expenses were $426 million in the third quarter of 2015, compared to $338 million in the third quarter of 2014. The higher R&D expenses in the third quarter of 2015 were principally due to higher development costs related to dupilumab and higher headcount to support the Company’s increased R&D activities. In addition, in the third quarter of 2015, R&D-related non-cash share-based compensation expense was $64 million, compared to $46 million in the third quarter of 2014.

Selling, General, and Administrative (SG&A) Expenses: GAAP SG&A expenses were $210 million in the third quarter of 2015, compared to $144 million in the third quarter of 2014. The increase in SG&A expenses was primarily due to higher headcount and headcount-related costs and higher commercialization expenses related to Praluent. These increases were partly offset by a third quarter 2014 incremental charge related to the Branded Prescription Drug Fee, based on final regulations issued by the Internal Revenue Service (IRS) in July 2014. In addition, in the third quarter of 2015, SG&A-related non-cash share-based compensation expense was $36 million, compared to $21 million in the third quarter of 2014.

Cost of Goods Sold (COGS): GAAP COGS was $67 million in the third quarter of 2015, compared to $34 million in the third quarter of 2014. COGS primarily consists of royalties as well as costs in connection with producing U.S. EYLEA commercial supplies, and various start-up costs in connection with the Company’s Limerick, Ireland commercial manufacturing facility. COGS increased principally due to the increase in U.S. EYLEA net product sales.

Income Tax Expense: GAAP income tax expense was $183 million in the third quarter of 2015, compared to $98 million in the third quarter of 2014. The effective tax rate was 46.5% for the third quarter of 2015, compared to 54.1% for the third quarter of 2014.

Non-GAAP and GAAP Net Income: The Company reported non-GAAP net income of $403 million, or $3.90 per basic share and $3.47 per diluted share, in the third quarter of 2015, compared to non-GAAP net income of $295 million, or $2.93 per basic share and $2.52 per diluted share, in the third quarter of 2014.

The Company reported GAAP net income of $210 million, or $2.04 per basic share and $1.82 per diluted share, in the third quarter of 2015, compared to GAAP net income of $83 million, or $0.83 per basic share and $0.73 per diluted share, in the third quarter of 2014.

A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

On November 4, 2015 Eagle Pharmaceuticals, Inc. (NASDAQ:EGRX) ("Eagle" or the "Company") and Spectrum Pharmaceuticals (NASDAQ:SPPI) ("Spectrum") reported that they have entered into a co-promotion agreement ("the agreement") under which the Spectrum 32-person Corporate Accounts Sales Team will dedicate 80 percent of its time to selling and marketing up to six Eagle products over a period of at least 18 months (Press release, Spectrum Pharmaceuticals, NOV 4, 2015, View Source [SID:1234507976]). Spectrum will continue to maintain a separate sales force to market existing and potential hematology products.

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The agreement leverages the experience and network of the Spectrum Corporate Accounts Sales Team in order to maximize the respective product sales of both companies by targeting infusion centers, hospitals, and oncology purchasing groups.

The Spectrum Corporate Accounts Sales Team is a group of 32 proven and seasoned professionals focused in the hematology and oncology space, calling on infusion centers and hospitals. Each team member has extensive pharmaceutical industry experience, including years of oncology-specific experience. This cohesive team has demonstrated strong performance and they are poised to commercialize Eagle’s promising assets.

Under the terms of the agreement, the Spectrum Corporate Accounts Sales Team will promote up to six products. This will potentially include Eagle’s current pipeline plus products that may be in-licensed over time. Eagle’s approximately 20 direct sales representatives will focus on promoting Eagle products with an initial emphasis on the launch of RTU Bivalirudin and RYANODEX (dantrolene sodium).

As outlined in the agreement, Eagle will pay Spectrum a base fee of $12.8 million over 18 months. Spectrum will also have the opportunity to earn an additional $9 million in specific identified sales milestone payments if its Corporate Accounts Sales Team surpasses sales projections, for a potential total payment of up to $22 million in base fee and specified milestones over 18 months. The agreement grants both companies the opportunity for six-month renewal periods upon mutual agreement.

"Our agreement with Spectrum is a very positive step at this exciting and critical time for Eagle as we transition from a development-stage pharmaceutical company to a commercial organization with a portfolio of differentiated, in-market products and a continued promising pipeline," said Scott Tarriff, President and Chief Executive Officer of Eagle Pharmaceuticals. "Driven by our commitment to building sustainable, long-term shareholder value, this agreement allows Eagle to make this transition with little commercial risk and minimal financial obligation while we deliberately build our own commercial sales team."

"By partnering with Spectrum, we are capitalizing on a unique opportunity to strategically secure a highly-successful sales team that will spend 80 percent of its time calling exclusively on Eagle’s customers, infusion centers, hospitals, and oncology purchasing groups. We are confident that Spectrum’s proven sales team will help Eagle maximize the success of new product launches and achieve our increased revenue goals while reducing the expense burden prior to and during the launch process," concluded Tarriff.

"Partnering with Eagle is a value-enhancing opportunity as we continue our efforts to bring innovative products for patients and enhance value for Spectrum shareholders," said Rajesh C. Shrotriya, MD, Chairman and Chief Executive Officer of Spectrum Pharmaceuticals. "The timing of the agreement allows us to quickly leverage our existing infrastructure to launch and market Eagle’s drugs. Moreover, maintaining a cohesive and engaged sales team has long-term strategic value for Spectrum. By working with Eagle to promote its expanding portfolio of marketed products, we are providing the members of the Spectrum Corporate Accounts Sales Team an opportunity to strengthen their partnerships with key stakeholders in the oncology marketplace and participate in the engaging work of launching important therapeutics. We look forward to working closely with Eagle to bring improved specialty products to health care professionals and patients."

Eagle to Hire Approximately 20 Direct Sales Representatives as Part of Long-Term Commercialization Strategy; Sales Team to Form Company’s Internal Commercial Organization

As part of the co-promotion agreement and long-term strategy to build an internal commercial team, Eagle will also hire approximately 20 direct sales representatives who will be a part of Eagle’s independent commercial organization. These representatives will be managed under the Spectrum sales team infrastructure for the duration of the co-promotion agreement. This arrangement serves to ensure a well-trained sales team and facilitates a seamless, low-cost transition with minimal risk.

Eagle expects its in-market portfolio will significantly expand in 2016, assuming FDA approvals for Docetaxel Injection, RTU bivalirudin, and the tentatively approved 500 mL RTD bendamustine. Anticipated approval dates for these products are in December 2015, March 2016, and May 2016, respectively. Combined with anticipated royalties from Teva for rapidly administered bendamustine 50 mL, revenues from RYANODEX, and royalties from commercial partner net product sales for argatroban, the Company expects an increasing revenue stream and expedited ability to deliver long-term, sustainable growth.

On November 4, 2015 Verastem, Inc. (NASDAQ:VSTM), focused on discovering and developing drugs to treat cancer by the targeted killing of cancer stem cells, reported two poster presentations at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 30th Anniversary Annual Meeting & Associated Programs being held November 4-8, in National Harbor, Maryland (Press release, Verastem, NOV 4, 2015, View Source;p=RssLanding&cat=news&id=2106370 [SID:1234507953]).

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The details of the presentations at SITC (Free SITC Whitepaper) are as follows:

Title: Targeting Focal Adhesion Kinase Reprograms the Pancreatic Tumor Microenvironment and Renders Pancreas Cancer Responsive to Checkpoint Immunotherapy
Date and time: Friday Nov. 6 from 12:30 – 2:00 PM ET
Track: Tumor Microenvironment
Poster #: 419

Title: FAK/PYK2 Inhibitors Defactinib and VS-4718 Enhance Immune Checkpoint Inhibitor Efficacy
Date and time: Friday Nov. 6 from 12:30 – 2:00 PM ET
Track: Optimizing Combination Immunotherapy
Poster #: 371

The posters will be on display starting at 3:00pm ET on Thursday, November 5th and will remain accessible through 2:00pm ET on Saturday, November 7th. The posters will also be available on Verastem’s website at http://bit.ly/R3M6wc starting at 6:00pm ET on Thursday, November 5th.

About VS-6063
VS-6063 (defactinib) is an orally available compound designed to target cancer stem cells through the potent inhibition of focal adhesion kinase (FAK). Cancer stem cells are an underlying cause of tumor resistance to chemotherapy, recurrence and ultimate disease progression. Research has demonstrated that FAK activity is critical for the growth and survival of cancer stem cells. VS-6063 is currently being studied in the "Window of Opportunity" study in patients with mesothelioma prior to surgery, a Phase 1/1b study in combination with paclitaxel in patients with ovarian cancer, a trial in patients with KRAS-mutated non-small cell lung cancer and a trial evaluating the combination of VS-6063 and VS-5584 in patients with relapsed mesothelioma.

About VS-4718
VS-4718 is an orally available compound designed to target cancer stem cells through the potent inhibition of focal adhesion kinase (FAK). VS-4718 is currently being studied in a Phase 1 dose escalation study in patients with advanced cancers.

On November 4, 2015 Spectrum Pharmaceuticals, Inc. (NasdaqGS: SPPI), a biotechnology company with fully integrated commercial and drug development operations with a primary focus in hematology and oncology, reported financial results for the three-month period ended September 30, 2015 (Press release, Spectrum Pharmaceuticals, NOV 4, 2015, View Source [SID:1234507977]).

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"The highest priority of the Company remains SPI-2012, which is a late-stage drug that could compete in the multi-billion dollar neutropenia market," said Rajesh C. Shrotriya, MD, Chairman and Chief Executive Officer of Spectrum Pharmaceuticals. "We had a productive meeting last week with the FDA and expect to finalize our SPA on SPI-2012 quickly. We have a meeting with the FDA this Friday to discuss EVOMELA’s Complete Response Letter and we feel confident in bringing EVOMELA to the market for patients. Before the end of this year, we look forward to filing the NDA for our bladder cancer drug apaziquone and initiating a Phase 2 breast cancer trial for poziotinib in the U.S. shortly. We believe the infrastructure that we have built over the years serves as a strong foundation for continued future growth."

Pipeline Update- Two Potential Blockbusters and One Near-term NDA Submission:

SPI-2012, a novel long-acting GCSF: In a Phase 2 dose ranging study, SPI-2012 was shown to be superior at the higher dose tested and non-inferior at the middle dose in decreasing the duration of severe neutropenia compared to the blockbuster drug pegfilgrastim. SPI-2012 was also shown to have an acceptable safety profile with no significant dose-related or unexpected toxicities. The Phase 2 data will be presented at the San Antonio Breast Cancer Symposium. Spectrum has continued to have productive discussions with the FDA, expects to finalize the pivotal study design this year, and start the study shortly after reaching SPA agreement with the Agency. Over 80 study sites have already been qualified.

Apaziquone, a potent tumor-activated pro-drug for non-muscle invasive bladder cancer: By year end, Spectrum expects to file the NDA based on the previous Phase 3 studies. The Company has also initiated enrollment in an additional randomized, placebo-controlled Phase 3 trial under the SPA agreement, and treated the first patient in late October. This Phase 3 study has been specifically designed to address important lessons learned from the previous apaziquone Phase 3 studies, as well as recommendations made by the FDA.

EVOMELA, a propylene-glycol free melphalan formulation with improved stability: Spectrum is actively addressing the non-clinical issues raised in the Complete Response Letter regarding the EVOMELA NDA. FDA has granted a Type A meeting for November 6, 2015 and the company believes these issues can be swiftly resolved. Spectrum plans to launch this drug with our existing sales force.

Poziotinib, a potential best-in-class, novel, pan-HER inhibitor: The Company plans to initiate a breast cancer program in the U.S., based on compelling Phase 1 efficacy data in breast cancer patients who had failed multiple other HER-2 directed therapies. In addition, multiple Phase 2 studies funded by our partner, Hanmi Pharmaceuticals, are currently ongoing in South Korea.
Three-Month Period Ended September 30, 2015 (All numbers are approximate)

GAAP Results

Total product sales were $28.5 million in the third quarter of 2015. Total product sales decreased 41% from $47.9 million in the third quarter of 2014.

Product sales in the third quarter included: FUSILEV (levoleucovorin) net sales of $11.1 million, FOLOTYN (pralatrexate injection) net sales of $8.7 million, ZEVALIN (ibritumomab tiuxetan) net sales of $4.8 million, MARQIBO (vinCRIStine sulfate LIPOSOME injection) net sales of $1.3 million and BELEODAQ (belinostat for injection) net sales of $2.6 million.

Spectrum recorded net loss of $18.7 million, or $(0.28) per basic and diluted share in the three-month period ended September 30, 2015, compared to net loss of $11.5 million, or $(0.18) per basic and diluted share in the comparable period in 2014. Total research and development expenses were $9.9 million in the quarter, as compared to $14.4 million in the same period in 2014. Selling, general and administrative expenses were $19.4 million in the quarter, compared to $24.1 million in the same period in 2014.

Non-GAAP Results

Spectrum recorded non-GAAP net loss of $7.9 million, or $(0.12) per basic share and diluted share in the three-month period ended September 30, 2015, compared to non-GAAP net income of $5.3 million, or $0.08 per basic and $0.07 per diluted share in the comparable period in 2014. Non-GAAP research and development expenses were $9.4 million, as compared to $14.0 million in the same period of 2014. Non-GAAP selling, general and administrative expenses were $17.2 million, as compared to $21.3 million in the same period in 2014.

2015 Financial Guidance

Spectrum raises guidance on year-end cash to over $125 million, up from the Company’s previous guidance of $110 million excluding any new business development transactions.