On November 7, 2016 Threshold Pharmaceuticals, Inc. (Nasdaq:THLD), a clinical-stage biopharmaceutical company developing novel therapies for cancer, reported financial results for the third quarter ended September 30, 2016 and provided an update on the Company’s corporate and clinical development activities (Filing, Q3, Threshold Pharmaceuticals, 2016, NOV 7, 2016, View Source [SID1234516782]).

"We plan to initiate a clinical trial evaluating evofosfamide in combination with checkpoint inhibitors with our collaborators at MD Anderson Cancer Center while at the same time continue to pursue registration of evofosfamide in Japan for the treatment of pancreatic cancer. In addition, we continue to pursue potential collaborations to expand our development pipeline while we complete IND-enabling toxicology studies with TH-3424 with the goal of reaching the clinic with a new compound in 2017", said Barry Selick, Ph.D., Chief Executive Officer of Threshold.

Recent Highlights

Evofosfamide – The Company’s lead product candidate is an investigational hypoxia-activated prodrug that is designed to be activated under tumor hypoxic conditions, a hallmark of many cancers.

· First meeting scheduled with the Japanese PMDA (Pharmaceutical and Medical Devices Agency) to present the improvement in overall survival that was observed in the Japanese sub-population of the MAESTRO Phase 3 trial;

· The Company announced a partnership with Caris Life Sciences to develop a customized assay for pancreatic cancer patients to predict likelihood of response to evofosfamide;

· Clinical development collaborations investigating evofosfamide in patients with pancreatic neuroendocrine tumors (pNET), recurrent glioblastoma (GBM) and hepatocellular carcinoma (HCC) remain ongoing;

· A recent presentation by one of the Company’s collaborators from the MD Anderson Cancer Center highlighted the promise of evofosfamide in combination with a class of checkpoint inhibitor antibodies to improve the efficacy of this class of potent anti-cancer therapies; and

· The Company plans to initiate a clinical trial in various solid tumors evaluating evofosfamide in combination with one or more checkpoint inhibitor antibodies in development.

Tarloxotinib – The Company had been prosecuting Phase 2 proof of concept studies with tarloxotinib, a hypoxia-activated epidermal growth factor receptor (EGFR) tyrosine kinase inhibitor (TKI), which was designed to selectively release an irreversible EGFR-TKI in hypoxic tumors.

· During the quarter, the Company announced interim results from two proof-of-concept, Phase 2 clinical trials in patients with advanced non-small cell lung cancer (NSCLC) and patients with metastatic squamous cell carcinoma of the head and neck and skin. While results in patients with squamous cell carcinoma of the skin were minimally sufficient for continuation, the response rate in the NSCLC trial and the head and neck arms of the squamous cell cancer trial did not meet the minimum response rate hurdles for study continuation. Accordingly, enrollment in both Phase 2 clinical trials and further development of tarloxotinib has been discontinued.

TH-3424 – TH-3424 is the Company’s small-molecule drug candidate being evaluated for the treatment of hepatocellular (liver) cancer (HCC), castrate resistant prostate cancer (CRPC), T-cell acute lymphoblastic leukemias (T-ALL), and other cancers expressing high levels of aldo-keto reductase family 1 member C3 (AKR1C3). Tumors overexpressing AKR1C3 can be resistant to radiation therapy, chemotherapy and anti-androgen therapy. TH-3424 is a prodrug that selectively releases a potent DNA cross-linking agent in the presence of AKR1C3.

· TH-3424 has been selected as a lead candidate and Investigational New Drug (IND)-enabling studies have been initiated in collaboration with Ascenta Pharmaceuticals, Ltd.

Third Quarter 2016 Financial Results

· Cash, cash equivalents and marketable securities totaled $28.1 million at September 30, 2016 compared to $33.6 million at June 30, 2016; the net decrease of $5.5 million was a result of operating cash requirements for the quarter ended September 30, 2016. With the previously announced decision to cease joint development of evofosfamide under the Company’s former collaboration with Merck KGaA, the decision in September to discontinue further development of tarloxotinib, and the workforce reduction, the Company continues to expect its operating cash requirements to be lower for the fourth quarter of fiscal year 2016 and fiscal year 2017.

· No revenue was recognized in the third quarter ended September 30, 2016 compared to $3.7 million for the same period of 2015. Revenue for the quarter ended September 30, 2015 related to the amortization of the aggregate of $110 million in upfront and milestone payments received from the Company’s former collaboration with Merck KGaA, Darmstadt, Germany. The revenue from the upfront payment and milestone payments received under the agreement were previously being amortized over the relevant performance period, rather than being immediately recognized when the upfront payment and milestones were earned or received. As a result of Merck KGaA, Darmstadt, Germany’s and the Company’s decision to cease further joint development of evofosfamide in December 2015, the Company immediately recognized all of the remaining deferred revenue into revenue during the quarter ending December 31, 2015. Also as a result of the termination of the agreement, the Company is no longer eligible to receive any further milestone payments from Merck KGaA, Darmstadt, Germany.

· Research and development expenses were $3.5 million for the third quarter ended September 30, 2016, compared to $8.1 million for the same period in 2015. The decrease in research and development expenses, net of reimbursement for Merck KGaA, Darmstadt, Germany’s 70 percent share of total eligible collaboration expenses for evofosfamide, was due primarily to a $2.8 million decrease in employee related expenses, including a $0.4 million decrease in non-cash stock-based compensation expense and a $1.8 million decrease in clinical development expenses and consulting expenses. The Company expects research and development expenses to continue to decline in 2016 as a result of the decision to cease further joint development of evofosfamide under the Company’s former collaboration with Merck KGaA and the workforce reduction.

· General and administrative expenses were $1.7 million for the third quarter ended September 30, 2016 compared to $2.4 million for the same period in 2015. The decrease in general and administrative expenses was due primarily to a $0.5 million decrease in employee related expenses and a $0.2 million decrease in consulting expenses.

· Non-cash stock-based compensation expense included in total operating expenses was $0.8 million for the third quarter of 2016 compared to $1.5 million for the same period in 2015. The decrease in stock-based compensation expense was due to the amortization of a smaller number of options with lower fair values.

· Net loss for the third quarter of 2016 was $5.7 million compared to $6.4 million for the same period in 2015. Included in the net loss for the third quarter of 2016 was an operating loss of $5.2 million and non-cash expense of $0.5 million compared to an operating loss of $6.8 million and non-cash income of $0.3 million for the third quarter of 2015. The non-cash income or expense is related to changes in the fair value of the Company’s outstanding and exercised warrants that was classified as other income (expense).

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About Evofosfamide
Evofosfamide (previously known as TH-302) is an investigational hypoxia-activated prodrug of a bis-alkylating agent that is preferentially activated under severe hypoxic tumor conditions, a feature of many solid tumors. Areas of low oxygen levels (hypoxia) in solid tumors are due to insufficient blood vessel supply. Similarly, the bone marrow of patients with hematological malignancies has also been shown, in some cases, to be severely hypoxic.

About Tarloxotinib Bromide
Tarloxotinib bromide (previously known as TH-4000), or "tarloxotinib", is a prodrug designed to selectively release a covalent (irreversible) EGFR tyrosine kinase inhibitor under severe hypoxia, a feature of many solid tumors. In September 2016, the Company announced the discontinuation of any further development of tarloxotinib.

About TH-3424
TH-3424 is small-molecule drug candidate being evaluated for the potential treatment of hepatocellular (liver) cancer (HCC), castrate resistant prostate cancer (CRPC), T-cell acute lymphoblastic leukemias (T-ALL), and other cancers expressing high levels of aldo-keto reductase family 1 member C3 (AKR1C3). Tumors overexpressing AKR1C3 can be resistant to radiation therapy and chemotherapy. TH-3424 is a prodrug that selectively releases a potent DNA cross-linking agent in the presence of AKR1C3. Preliminary nonclinical toxicology studies suggested an adequate therapeutic index that the Company believes warrants conducting Investigational New Drug (IND)-enabling toxicology studies, which are being done in collaboration with Ascenta Pharmaceuticals, Ltd.

On November 7, 2016 Xenetic Biosciences, Inc. (NASDAQ:XBIO) ("Xenetic" or the "Company"), a clinical-stage biopharmaceutical company focused on discovery, research and development of next-generation biologic drugs and novel orphan oncology therapeutics, reported the closing of its public offering of an aggregate of 2,424,242 units, consisting of (i) 484,849 units, consisting of one share of Convertible Series B Preferred Stock and a Class A Warrant to purchase one share of common stock and (ii) 1,939,393 units consisting of one share of Convertible Series B Preferred Stock and a Class B Warrant to purchase one share of common stock, at a public offering price of $4.125 per unit (Press release, Xenetic Biosciences, NOV 7, 2016, View Source [SID1234537810]). OPKO Health, Inc. (Nasdaq:OPK) along with other healthcare institutional investors participated in the offering.

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As previously announced, in connection with the closing of its public offering, the Company commenced trading of its common stock today on The Nasdaq Capital Market under the symbol "XBIO."

Ladenburg Thalmann & Co. Inc. acted as the sole book running manager for the offering.

The total gross proceeds of the public offering are approximately $10 million before the underwriter’s discount and expenses. The net proceeds from this offering will be used to fund the research and development of Xenetic’s product candidates, including Virexxa, as well as future development programs, potential in licensing of products or technology, potential in licensing of products or technology, capital expenditures, working capital, repayment of existing indebtedness, and other general corporate purposes.

The shares and warrants described above were offered by Xenetic pursuant to a registration statement on Form S-1 previously filed with, and subsequently declared effective by the Securities and Exchange Commission ("SEC"). A final prospectus supplement relating to the offering was filed with the SEC and is available, along with the accompanying base prospectus, on the SEC’s website at View Source or from Ladenburg Thalmann & Co. Inc., Prospectus Department, 570 Lexington Avenue, 11th Floor, New York, New York 10022, by calling (212) 409-2000.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale is not permitted.

On November 7, 2016 Novocure (NASDAQ:NVCR) reported that 38 abstracts focusing on Tumor Treating Fields (TTFields) will be presented at the 21st Annual Scientific Meeting of the Society for Neuro-Oncology (SNO) on Nov. 17-20, in Scottsdale, Arizona (Press release, NovoCure, NOV 7, 2016, View Source [SID1234516379]). Of the 38 abstracts, 28 were prepared by external researchers, representing a growing interest in Novocure’s proprietary TTFields therapy.

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"Every year at the SNO annual meeting, we observe an increased interest in TTFields, as is evident from a growing number of abstracts accepted along with an increasing number of institutions that are studying TTFields," said Dr. Eilon Kirson, Novocure’s Chief Science Officer and Head of Research and Development. "Research conducted by external scientists strengthens our understanding of TTFields, often validating TTFields as a potential treatment for a number of solid tumors."

Abstracts span a variety of topics from preclinical and clinical data to treatment delivery and patient education. Notable topics to be presented include, amongst others, TTFields in combination with immunotherapy, radiation, triple chemotherapy and cytostatic agents, a case report on the use of TTFields in brain metastasis from ovarian cancer and a pilot study of Optune for recurrent atypical and anaplastic meningioma.

The long-term survival analysis of the full dataset from its phase 3 pivotal EF-14 trial of Optune in combination with temozolomide for the treatment of newly diagnosed glioblastoma (GBM) will be presented on Friday, Nov. 18, by Roger Stupp, M.D., Professor at the University of Zurich and Director of Department of Oncology at the Zurich University Hospital, Zurich, Switzerland, and EF-14 Principal Investigator. The long-term analysis confirms the interim analysis results published in the Journal of the American Medical Association (JAMA)1 in December 2015, showing significant extension of both progression free and overall survival in newly diagnosed GBM patients receiving Optune with temozolomide compared to temozolomide alone. The long-term analysis shows survival rates were significantly higher four years from randomization in patients receiving Optune with temozolomide compared to patients receiving temozolomide alone. The safety profile in the long-term analysis was consistent with the interim analysis of the EF-14 trial.

The following abstracts will be presented:

Preclinical

Human glioma cell migration and invasion properties are inhibited by exposure to tumor treating fields (TTFields) in vitro; RS Schneiderman et al; Saturday, Nov. 19; abstract: #EXTH-03

Tumor treating fields (TTFields) induce autophagy in glioma cells; Y Porat et al; Saturday, Nov. 19; abstract: #EXTH-30

Effects of tumor treating fields (TTFields) and temozolomide in MGMT expressing and non-expressing patient-derived glioblastoma cells; PA Clark et al; Saturday, Nov. 19; abstract: #EXTH-25

Tumor Treating Field (TTFields) effects on glioblastoma cells are augmented by mitotic checkpoint inhibition; AF Kessler et al; Saturday, Nov. 19; abstract: #EXTH-07

Cytostatic agents combined with tumor treating fields (TTFields) in glioma cell lines; M Groves et al; Saturday, Nov. 19; abstract: #NIMG-39 Tumor cells induce immune activation phenotype in immune cells following TTFields activation; T Holtzman et al; Friday, Nov. 18; abstract: #IMST-26 Evaluating the in-vitro effects of tumor treating fields on T cell responses; G Diamant et al; Friday, Nov. 18; abstract: #IMST-30 Clinical METIS: A phase III study of radiosurgery with TTFields for 1-10 brain metastases; M Mehta et al; Saturday, Nov. 19; abstract: #BMET-03 One year with Optune in routine use: first report on clinical experiences in Germany; M Misch et al; Friday, Nov. 18; abstract: #RARE-44 Analysis of glioblastoma physical characteristics in patients benefiting from tumor treating electric fields therapy; PP San et al; Friday, Nov. 18; abstract: #RTHP-19 Compliance and duration of treatment with tumor treating fields (TTFields) in adjuvant treatment for newly diagnosed glioblastomas (GBMs) improves progression-free survival (PFS) and overall survival (OS); SA Jeyapalan et al; Friday, Nov. 18; abstract: #RTHP-29 Pilot study of Optune (Novo-TTF-100A) for recurrent atypical and anaplastic meningioma; G Wu et al; Friday, Nov. 18; abstract: #ACTR-43 Classification of dermatologic adverse events and management strategies in patients receiving therapy with Optune for high grade gliomas; D Jennings et al; Friday, Nov. 18; abstract: #QLIF-11 The use of a programmable shunt in a patient, treated with Optune: feasibility report; L Schreiber et al; Friday, Nov. 18; abstract: #RARE-24 Survival benefit with triple chemotherapy and TTFields for glioblastoma; G Lu et al; Friday, Nov. 18; abstract: #PDCT-16 Patterns of glioblastoma recurrence in low field intensity regions during TTFields treatment; J Battiste et al; Saturday, Nov. 19; abstract: #NIMG-61 Patterns of compliance in the use of tumor treating fields (Optune) for brain tumors; M Pandey et al; Friday, Nov. 18; abstract: #ACTR-31 Use of tumor treating fields in brain metastases from ovarian cancer, a case report; M Pandey et al; Saturday, Nov. 19; abstract: #BMET-21 Imaging the early metabolic response during tumor treating fields (TTFields) therapy in recurrent glioblastoma; C Juhasz et al; Saturday, Nov. 19; abstract: #NIMG-37 Rates and impact of compliance with tumor treating fields therapy in a glioma cohort; Y Odia et al; Friday, Nov. 18; abstract: #RTHP-37 Rates and outcomes of combination tumor treating fields and immunotherapy in a glioma cohort; Y Odia et al; Friday, Nov. 18; abstract: #ATIM-34 A phase II, single arm study of Optune in bevacizumab-naive subjects with recurrent WHO grade III malignant glioma; D O’Connell et al; Friday, Nov. 18; abstract: #ACTR-41 Use of tumor treating fields in the first line treatment of glioblastoma; M Pandey et al; Friday, Nov. 18; abstract: #ACTR-28 Clinical experiences of tumor treating fields (TTFields) in pediatric GBM patients; J Crawford et al; Saturday, Nov. 19; abstract: #NIMG-66 Beneficial effect of tumor treating field therapy in Gliomatosis Cerebri; N Blondin; Friday, Nov. 18; abstract: #ACTR-08 Enhanced therapeutic benefits of tumor treating fields (TTFields) on superficially located glioblastoma multiforme (GBM); V Kumar et al; Friday, Nov. 18; abstract: #RTHP-30 Stability of shunt programmable valve settings with simultaneous use of the Optune transducer array; A Chan et al; Friday, Nov. 18; abstracts: #SURG-25 Treatment Delivery/Patient Education First report of user experience, compliance outcomes, and alarm states with the second generation Optune system; A Kinzel et al; Saturday, Nov. 18; abstract: #NIMG-50 Does personalizing tumor treating fields (TTFields) with NovoTAL in glioblastoma treatment planning make a difference? Insights from electric field simulation studies; D Garcia Carracedo et al; Saturday, Nov. 19; abstract: #NIMG-06 Compliance of tumor treating electric fields therapy and overall survival in glioblastoma; ET Wong et al; Friday, Nov. 18; abstract: #RTHP-17 Development of practice algorithms to guide treatment planning with TTFields for the management of glioblastoma; J Trusheim et al; Saturday, Nov. 19; abstract: #NIMG-23 Shared Care Model for glioblastoma patient management; J Battiste et al; Saturday, Nov. 19; abstract: #NIMG-52 Periodic transducer array shifting preserves both TTFields intensity in the gross tumor volume (GTV) and promotes scalp health during the course of glioblastoma therapy; A Naveh et al; Saturday, Nov. 19; abstract: #NIMG-26 Influence of 2 contrasting treatment planning approaches on tumor treating fields (TTFields) intensity in the gross tumor volume (GTV) and peritumoral brain zone (PBZ) in glioblastoma; D Garcia Carracedo et al; Saturday, Nov. 19; abstract: #NIMG-07 Placement of scalp electrodes (Novo TTF) does not significantly change radiation dosimetry when delivering cranial intensity modulated radiation therapy (IMRT); G Shukla et al; Friday, Nov. 18; abstract: #RTHP-34 Optimal Patient and Family Education Is Key to Improving the Efficacy of Tumor Treating Fields Plus Chemotherapy in Treatment of GBM; MG Saria et al; Saturday, Nov. 19; abstract: #NIMG-63 Tumor recurrence in areas of lower TTFields Intensity: A reverse simulation case study; J Battiste et al; Saturday, Nov. 19; abstract: #NIMG-29 Late-Breaking Oral Presentation Prospective multi-center phase III trial of Tumor Treating Fields together with temozolomide compared to temozolomide alone in patients with newly diagnosed glioblastoma; R Stupp et al; Friday, Nov. 18

On November 7, 2016 Portola Pharmaceuticals, Inc. (NASDAQ:PTLA) reported a corporate update and reported its financial results for the third quarter ended September 30, 2016 (Press release, Portola Pharmaceuticals, NOV 7, 2016, View Source;p=RssLanding&cat=news&id=2220288 [SID1234516691]).

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"We continue to focus on obtaining regulatory approval for our two lead programs in the United States and EU. Both programs have the potential to become the standard of care in two growth areas of thrombosis that have a high unmet medical need and limited treatment options. If approved, betrixaban, our oral Factor Xa inhibitor, would be the first anticoagulant indicated for extended VTE prophylaxis in the over 24 million medically ill patients admitted to the hospital annually in the G7. AndexXa, our much anticipated Factor Xa inhibitor antidote, would be the first agent approved to treat the growing number of patients admitted to the hospital with life-threatening anticoagulant-related bleeding. We have made important progress toward bringing both betrixaban and AndexXa to market. We submitted an NDA for betrixaban in the United States and plan to submit an MAA in the EU," said Bill Lis, chief executive officer of Portola. "Also, we continue to engage in positive, productive dialogue with the FDA to resolve outstanding questions regarding the Complete Response Letter for AndexXa, most of which are focused on manufacturing."

Recent Achievements, Upcoming Events and Milestones

Betrixaban – an oral Factor Xa inhibitor anticoagulant in development for the prevention of venous thromboembolism (VTE) in acute medically ill patients; designated Fast Track status by the U.S. Food and Drug Administration (FDA)

Submitted a New Drug Application (NDA) to the FDA seeking approval to market betrixaban for extended-duration prophylaxis of VTE in acutely ill medical patients with risk factors for VTE
Plan to submit a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA) by year-end
Three abstracts on results of sub-analyses of the Phase 3 APEX Study conducted by the PERFUSE Study Group were accepted for oral and poster presentations at the upcoming American Heart Association Scientific Sessions 2016
AndexXa (andexanet alfa) – a Factor Xa inhibitor antidote in development for patients treated with a Factor Xa inhibitor when reversal of anticoagulation is needed due to life-threatening bleeding or when urgent surgery is required; designated a Breakthrough Therapy and an Orphan Drug by the FDA

Submitted an MAA, which completed the validation period and was accepted for review by the EMA
Continued productive dialogue with the FDA regarding the Complete Response Letter; Portola currently plans to resubmit the BLA in the second quarter of 2017
Presented a preliminary analysis of interim data from the ongoing Phase 3b/4 ANNEXA-4 Study in patients with acute major bleeding in a Late-Breaking Science Hot Line session at the European Society of Cardiology 2016 Congress with simultaneous publication online by The New England Journal of Medicine
Plan to present data from the ongoing Phase 2 study of andexanet alfa reversal of betrixaban in an oral presentation at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting 2016
Cerdulatinib – an oral, dual Syk/JAK inhibitor in development to treat resistant or relapsed hematologic cancer patients

Continued to enroll patients in a Phase 2a study evaluating the safety and efficacy of cerdulatinib in patients with relapsed/refractory B-cell malignancies who have failed multiple therapies
Two abstracts were accepted for presentation at the upcoming ASH (Free ASH Whitepaper) Annual Meeting 2016
Third Quarter 2016 Financial Results
Collaboration revenue earned under Portola’s collaborations with Bristol-Myers Squibb Company and Pfizer, Bayer Pharma and Janssen Pharmaceuticals, and Daiichi Sankyo was $9.3 million for the third quarter of 2016 compared with $2.9 million for the third quarter of 2015. The increase in revenue was primarily due to $2.5 million received upon achievement of a milestone from the Bayer and Janssen Phase 3 agreement, $2.5 million received upon achievement of a milestone from the Daiichi Sankyo Phase 3 agreement, and incremental revenue of $2.0 million from three collaboration and license agreements executed in the first quarter of 2016 to develop and commercialize andexanet alfa in Japan.

Total operating expenses for the third quarter of 2016 were $100.8 million compared with $58.5 million for the same period in 2015. Total operating expenses for the third quarter of 2016 included $7.8 million in stock-based compensation expense compared with $6.1 million for the same period in 2015.

Research and development expenses were $87.2 million for the third quarter of 2016 compared with $48.4 million for the third quarter of 2015. The increase in R&D expenses was primarily due to a $27.3 million impairment charge for AndexXa manufacturing expenses that Portola prepaid to CMC Biologics. These expenses were intended to be credited against future batch manufacturing costs for the Line C, or 6×2,000 liter, manufacturing process. This impairment charge was triggered by the Company’s decision to focus on Line A/B manufacturing at CMC Biologics and Gen 2 manufacturing at Lonza, and suspend Line C manufacturing at CMC Biologics.

Selling, general and administrative expenses for the third quarter of 2016 were $13.6 million compared with $10.1 million for the same period in 2015 as the Company increased headcount to support its growth and increased commercial launch preparation activities for AndexXa in advance of the PDUFA date in August 2016.

For the third quarter of 2016, we reported a net loss of $92.9 million dollars, or a net loss per share of $1.64, compared with a net loss of $55.2 million dollars, or a net loss per share of $1.05, for the same period in 2015. Net loss for the third quarter of 2016 included the $27.3 million impairment charge. Shares used to compute net loss per share attributable to common stockholders were approximately 56.5 million for the third quarter of 2016 compared with approximately 52.6 million for the same period in 2015.

As of September 30, 2016, cash, cash equivalents and investments totaled $274.6 million compared with cash, cash equivalents and investments of $460.2 million as of December 31, 2015.

On November 7, 2016 Verastem, Inc. (NASDAQ:VSTM), focused on discovering and developing drugs to treat cancer, reported financial results for the third quarter ended September 30, 2016, and also provided an overview of certain corporate developments (Press release, Verastem, NOV 7, 2016, View Source;p=RssLanding&cat=news&id=2220267 [SID1234516784]).

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"Last week, we announced the inlicensing of the late-stage oncology product candidate duvelisib from Infinity Pharmaceuticals. This transaction brings a complementary development program on attractive financial terms," said Robert Forrester, President and Chief Executive Officer of Verastem. "Duvelisib has a proven mechanism of action and has clinically demonstrated anti-cancer activity, along with a manageable safety profile, in several lymphoid malignancies. We believe duvelisib has the potential to help patients with lymphoma."

Mr. Forrester continued, "Since the beginning of 2016, we have made significant progress with our immuno-oncology focused clinical development program aimed at advancing our FAK inhibitors in combination with immunotherapies and other current and emerging standard of care treatments. We recently announced a new clinical collaboration with Cancer Research UK and MSD to evaluate defactinib in combination with MSD’s anti-PD-1 immunotherapy pembrolizumab (Keytruda) MSD’s PD-1 immunotherapy in patients with mesothelioma, non-small cell lung and pancreatic cancer. This is our third clinical collaboration to be announced this year and we are delighted to be working with such prestigious organizations to clinically elucidate the potential of defactinib in combination with immunotherapeutics across several different cancer types."

Third Quarter 2016 and Recent Highlights:
Duvelisib
Inlicensed Late-stage, Complementary Oncology Product Candidate Duvelisib – Last week, Verastem and Infinity Pharmaceuticals, Inc. (Infinity) announced the signing of an agreement under which Verastem licensed exclusive worldwide rights to develop and commercialize Infinity’s duvelisib, an investigational product candidate currently in development for hematologic malignancies. In consideration for duvelisib, Verastem will pay to Infinity no upfront payment, and up to $28 million in milestones. Positive data from DUO, a Phase 3, randomized monotherapy study of duvelisib in patients with relapsed or refractory CLL, triggers the first milestone payment. Verastem will also pay royalties on worldwide net sales. Duvelisib is well aligned with Verastem’s strategic focus of developing novel anti-cancer therapeutics that modulate the tumor microenvironment.

Phase 2 DYNAMO Data to be Reported at ASH (Free ASH Whitepaper) 2016 – Phase 2 clinical data for duvelisib will be presented at the 58th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting, which is being held December 3-6, 2016 in San Diego. In an oral presentation, titled "A phase 2 study demonstrating the clinical activity of duvelisib in patients with relapsed refractory indolent non-Hodgkin lymphoma," (Publication ID: 1218) Ian Flinn, MD, PhD, Director, Hematologic Malignancies Program, Sarah Cannon Research Institute, will describe the results from DYNAMO, a Phase 2 study evaluating the efficacy and safety of duvelisib in relapsed/refractory iNHL. The oral presentation will take place on Monday, December 5, 2016, at 7:30 PM PT at the San Diego Convention Center, Ballroom 20BC.

Defactinib (VS-6063)
New Clinical Collaboration with Cancer Research UK and MSD to Evaluate Defactinib in Combination with Immunotherapy in Mesothelioma, Non-small Cell Lung and Pancreatic Cancer – In September 2016, the companies announced a new clinical trial collaboration agreement to evaluate the combination of Verastem’s defactinib and MSD’s PD-1 immunotherapy pembrolizumab (Keytruda). This clinical collaboration is based on discoveries by scientists at the Edinburgh Cancer Research UK Centre at the University of Edinburgh who showed that inhibiting FAK increases the effectiveness of anti-PD-1 agents. The trial is expected to enroll up to 60 patients and will commence in early 2017.

Published Preclinical Research in Nature Medicine – In July 2016, Verastem announced the publication of preclinical research conducted by its scientific collaborator, David G. DeNardo, PhD, Assistant Professor of Medicine, Division of Oncology, Department of Immunology, Washington University School of Medicine in St. Louis. In the published study, Dr. DeNardo demonstrates that FAK inhibition decreases fibrosis and immunosuppressive cell populations in pancreatic ductal adenocarcinoma, rendering previously unresponsive tumors sensitive to chemo- and immunotherapy. These findings provide important support and rationale for the ongoing Phase 1 dose-escalation clinical studies evaluating Verastem’s FAK inhibitors in combination with pembrolizumab and gemcitabine, and, gemcitabine and Abraxane in patients with pancreatic cancer.

Third Quarter 2016 Financial Results
Net loss for the third quarter ended September 30, 2016 (2016 Quarter) was $7.9 million, or $0.21 per share, as compared to a net loss of $15.4 million, or $0.42 per share, for the third quarter ended September 30, 2015 (2015 Quarter). Net loss includes non-cash stock-based compensation expense of $1.3 million and $2.1 million for the 2016 Quarter and 2015 Quarter, respectively.
Research and development expense for the 2016 Quarter was $4.2 million compared to $11.3 million for the 2015 Quarter. The $7.1 million decrease from the 2015 Quarter to the 2016 Quarter was primarily related to a decrease of $5.3 million in contract research organization expense for outsourced biology, chemistry, development and clinical services, which includes our clinical trial costs, a decrease in personnel related costs of approximately $653,000 due to lower headcount as a result of our reduction in force in Q4 2015, a decrease of approximately $491,000 in consulting fees, a decrease in lab supplies of approximately $228,000, and a decrease in stock-based compensation and other expenses of approximately $376,000.

General and administrative expense for the 2016 Quarter was $3.8 million compared to $4.2 million for the 2015 Quarter. The decrease of approximately $387,000 from the 2015 Quarter to the 2016 Quarter primarily resulted from decreases in stock-based compensation expense of approximately $665,000 and personnel costs of approximately $108,000. These decreases were partially offset by increases in professional fees of approximately $235,000 and consulting and other costs of approximately $151,000.
As of September 30, 2016, Verastem had cash, cash equivalents and investments of $86.9 million compared to $110.3 million as of December 31, 2015. Verastem used $6.0 million for operating activities during 2016 Quarter.

The number of outstanding common shares as of September 30, 2016, was 36,992,418.

Financial Guidance
Based on current operating plans, we expect to have sufficient cash, cash equivalents and short-term investments to fund our research and development programs and operations into 2018.

About the Tumor Microenvironment
The tumor microenvironment encompasses various cellular populations and extracellular matrices within the tumor or cancer niche that support cancer cell survival. This includes immunosuppressive cell populations such as regulatory T cells, myeloid-derived suppressor cells, M2 tumor-associated macrophages, as well as tumor-associated fibroblasts and extracellular matrix proteins which can hamper the entry and therapeutic benefit of cytotoxic immune cells and anti-cancer drugs. In addition to targeting the proliferative and survival signaling of cancer cells, Verastem’s compounds duvelisib, defactinib, VS-4718 and VS-5584 also target the tumor microenvironment as a mechanism of action to potentially improve a patients response to therapy.

About Duvelisib
Duvelisib is an investigational, dual inhibitor of phosphoinositide 3-kinase (PI3K)-delta and PI3K-gamma, two enzymes that are known to help support the growth and survival of malignant B cells and T cells. PI3K signaling may lead to the proliferation of malignant B-cells and is thought to play a role in the formation and maintenance of the supportive tumor microenvironment.1,2,3 Duvelisib is currently being evaluated in late- and mid-stage clinical trials, including DUO, a randomized, Phase 3 monotherapy study in patients with relapsed/refractory chronic lymphocytic leukemia (CLL)4, and DYNAMO, a single-arm, Phase 2 monotherapy study in patients with refractory indolent non-Hodgkin lymphoma (iNHL) that achieved its primary endpoint of overall response rate upon topline analysis of efficacy data5. Duvelisib is also being evaluated for the treatment of hematologic malignancies through investigator-sponsored studies, including T cell lymphoma. Information about duvelisib clinical trials can be found on www.clinicaltrials.gov.6

About Defactinib
Defactinib (VS-6063) is an investigational inhibitor of Focal Adhesion Kinase (FAK), a non-receptor tyrosine kinase encoded by the PTK-2 gene that mediates oncogenic signaling in response to cellular adhesion and growth factors.7 Based on the multi-faceted roles of FAK, defactinib is used to treat cancer through modulation of the tumor microenvironment, enhancement of anti-tumor immunity, and reduction of cancer stem cells.8,9 Defactinib is currently being evaluated in three separate clinical collaborations in combination with immunotherapeutic agents for the treatment of several different cancer types including pancreatic, ovarian, non-small cell lung cancer, and mesothelioma. These studies are combination clinical trials with pembrolizumab and avelumab from Merck & Co. and Pfizer/Merck KGaA, respectively.10,11,12 Information about these and additional clinical trials evaluating the safety and efficacy of defactinib can be found on www.clinicaltrials.gov.