On August 4, 2016 Acceleron Pharma Inc. (NASDAQ: XLRN), a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of highly innovative therapeutics to treat serious and rare diseases, reported a corporate update and reported financial results for the second quarter ended June 30, 2016 (Press release, Acceleron Pharma, AUG 4, 2016, View Source [SID:1234514228]).

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"In the second quarter, we presented updated luspatercept data that builds upon the encouraging Phase 2 results and we have also reinforced the initial results with ACE-083 by showing impressive increases in muscle volume in the second muscle studied in the Phase 1 clinical trial," said John Knopf, Ph.D., Chief Executive Officer of Acceleron. "With luspatercept now in two Phase 3 clinical trials, ACE-083 heading toward its first Phase 2 clinical trial in the second half of 2016, a rapidly expanding and advancing pipeline of preclinical programs and capital to finance the Company into the second half of 2019, Acceleron is well-positioned for both near- and long-term growth."

SECOND QUARTER 2016 HIGHLIGHTS

Development Programs

Hematology

• Updated results from ongoing luspatercept Phase 2 clinical trial in myelodysplastic syndromes (MDS) presented at the 21st Congress of the European Hematology Association (EHA) (Free EHA Whitepaper) confirm activity and durability of response. Results highlighted in an oral presentation showed that 51% (25/49) of patients with lower-risk MDS treated with luspatercept achieved increased hemoglobin levels, and 35% (14/40) of patients achieved transfusion independence in the 3-month base study. In the ongoing extension study, 81% (26/32) of patients had increased hemoglobin levels and 50% (11/22) achieved transfusion independence with luspatercept treatment. Data was presented showing hemoglobin increases being sustained for 15 months.

• Updated results from ongoing luspatercept Phase 2 clinical trial in beta-thalassemia also presented at EHA (Free EHA Whitepaper). Results presented showed that 67% (20/30) of patients achieved at least a 33% reduction in transfusion burden, and 36% (8/22) of patients achieved a hemoglobin increase of at least 1.5 g/dL in the luspatercept 3-month base study. In the ongoing long-term extension study, 83% (20/24) of patients achieved at least a 33% reduction in transfusion burden and 56% (15/27) of patients achieved a hemoglobin increase of at least 1.5 g/dL. Data was presented showing hemoglobin increases being sustained for 12 months.

• Enrollment is ongoing to explore luspatercept activity in low- or intermediate-risk MDS patients who are erythropoiesis-stimulating agent (ESA) naïve or ring sideroblast negative (RS-). Patients who are eligible to be treated with an ESA but have not yet received such treatment or who are RS-, are being enrolled in a Phase 2 clinical trial. Acceleron plans to present the initial data from these patients by the end of the year.

Musculoskeletal Diseases

• Results from Phase 1 study of ACE-083 in healthy volunteers were presented at the International Congress on Neuromuscular Diseases. Results demonstrated that ACE-083 produced statistically significant, dose-dependent increases in muscle volume, assessed by magnetic resonance imaging (MRI), of the tibialis anterior muscle. At the highest dose level, ACE-083 generated a mean increase in muscle volume of 8.9% (p<0.001 vs placebo).

• Progress continues toward the initiation of a Phase 2 trial with ACE-083 in facioscapulohumeral muscular dystrophy (FSHD), a neuromuscular disorder, in the second half of 2016.

Nephrology

• Acceleron and Celgene expect to provide a development plan update for sotatercept in the second half of 2016. The companies met with health authorities in the first half of the year as part of assessing the potential future investigation of sotatercept in patients with pre-dialysis chronic kidney disease (CKD) due to diabetic nephropathy.

Oncology

• Enrollment continues in Part 2 of the Phase 2 DART study, a randomized, double-blind study of dalantercept plus axitinib, compared to placebo plus axitinib in patients with advanced renal cell carcinoma (RCC). The primary endpoint of this trial, progression-free survival (PFS), is an event-driven assessment with data potentially available by the end of the year.

Preclinical Research

• Acceleron continues its research on several molecules targeting musculoskeletal diseases, fibrotic disorders and other serious diseases. The most advanced molecule from the IntelliTrap platform, ACE-2494, continues to advance through IND-enabling activities. The Company plans to initiate a Phase 1 clinical trial with ACE-2494 in the first half of 2017.

Other Corporate Updates

• Thomas McCourt appointed to Acceleron’s board of directors. Mr. McCourt brings 30 years of experience building commercial strategies and capabilities across multiple companies for new therapies. He serves as chief commercial officer and senior vice president of marketing and sales of Ironwood Pharmaceuticals. Prior to joining Ironwood in 2009, Mr. McCourt held commercial roles at Amgen, Novartis AG and Astra Merck Inc.
Financial Results

• Cash position – Cash, cash equivalents and investments as of June 30, 2016 were $262.7 million. As of December 31, 2015 the Company had cash, cash equivalents and investments of $136.0 million. The Company believes that existing cash, cash equivalents and investments will be sufficient to fund its projected operating requirements into the second half of 2019.

• Revenue – Collaboration revenue for the second quarter was $3.2 million. License and milestone revenue was $0.1 million. Cost sharing reimbursement revenue from the Company’s Celgene partnership was $3.1 million and is related to expenses incurred by the Company in support of its partnered programs.

• Costs and expenses – Total costs and expenses for the second quarter were $22.8 million. This includes R&D expenses of $16.1 million and G&A expenses of $6.7 million.

• Other expense, net – Other expense for the second quarter was $2.4 million and includes a $2.9 million, non-cash, loss on marking the Company’s common stock warrant liability to market.

• Net loss – The Company posted a net loss for the second quarter ended June 30, 2016 of $22.0 million.

On August 4, 2016 Momenta Pharmaceuticals, Inc. (Nasdaq:MNTA) reported its financial results for the second quarter ended June 30, 2016 (Press release, Momenta Pharmaceuticals, AUG 4, 2016, View Source [SID:1234514248]).

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For the second quarter of 2016, the Company reported total revenues of $26.4 million, including $20.7 million in product revenues from Sandoz’s sale of Glatopa (glatiramer acetate injection). Momenta reported a net loss of $(21.0) million, or $(0.31) per share for the second quarter compared to a net loss of $(2.2) million, or $(0.04) per share for the same period in 2015. At June 30, 2016, the Company had cash, cash equivalents, and marketable securities of $336.9 million compared to $362.8 million at March 31, 2016.

"We are pleased with the growth in product revenues from Glatopa this quarter and look forward to the potential launch of our Glatopa 40 mg product next year," said Craig A. Wheeler, President and Chief Executive Officer of Momenta Pharmaceuticals. "During the remainder of 2016 we plan to announce several key milestones including announcing top-line data from a pivotal trial for M923, a biosimilar candidate of HUMIRA developed in collaboration with Baxalta, the initiation of a clinical trial for M834, a biosimilar candidate of ORENCIA being developed in collaboration with Mylan, and completing enrollment of the single ascending dose portion of our Phase 1 trial for M281, a novel anti-FcRn antibody candidate."

Second Quarter Highlights and Recent Events

Complex Generics:

In the second quarter of 2016, Momenta recorded $20.7 million in product revenues from Sandoz’s Glatopa sales.
The ANDA submitted by Sandoz for a three-times-a-week generic COPAXONE 40 mg (glatiramer acetate injection) is under FDA review. The Company expects to receive tentative regulatory approval in 2016.
A district court trial challenging four of Teva’s five Orange Book-listed patents for COPAXONE 40 mg (glatiramer acetate injection) is scheduled for September 26, 2016.
Biosimilars:

In April 2016, Momenta and its collaboration partner Baxalta, now a part of Shire, completed enrollment in the pivotal clinical trial for M923, a biosimilar candidate of HUMIRA (adalimumab) and the companies expect to release results in late 2016. The companies are targeting first regulatory submission for marketing approval in 2017 and a first commercial launch as early as 2018.
Momenta’s global collaboration with Mylan to develop, manufacture and commercialize six of the Company’s biosimilar candidates is progressing. The companies have prioritized three lead programs including M834, a biosimilar candidate of ORENCIA (abatacept).
Novel Drugs:

Necuparanib (novel oncology candidate)

On August 3, 2016, the Data Safety Management Board recommended that the Company discontinue further accrual in the Phase 2 trial of necuparanib in pancreatic cancer following the outcome of a planned interim futility analysis. The Company plans to confirm the futility analysis and then determine next steps for the necuparanib program.
Autoimmune Drugs
Momenta’s novel autoimmune portfolio includes two recombinant molecules: M230, a Selective Immunomodulator of Fc receptors (SIF3) and M281, an anti-FcRn monoclonal antibody. In June 2016, the Company initiated a Phase 1 study to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of M281 in healthy subjects. M230 is in pre-clinical development, and the Company expects to initiate a clinical trial for M230 in 2017. Momenta is also developing hyper-sialylated IVIg (hsIVIg), a high potency alternative to IVIg. The Company continues its efforts to identify potential collaboration opportunities for the further development and commercialization of its hsIVIg program.

Second Quarter 2016 Financial Results

Total revenues for the second quarter of 2016 were $26.4 million compared to $44.9 million for the same period in 2015. Total revenues for the second quarter of 2016 include $20.7 million in product revenue earned from net sales of Glatopa by Sandoz, compared to $19.2 million in product revenue earned from net sales of Glatopa by Sandoz for the same period in 2015. Glatopa was launched in the second quarter of 2015, and Glatopa profit share for that quarter was reduced by $9.0 million to reimburse Sandoz for the Company’s share of pre-launch Glatopa-related legal expenses.

Collaborative research and development revenue for the second quarter of 2016 was $5.7 million compared to the $25.6 million recorded in the same quarter last year. In the second quarter of 2015, the Company earned $20.0 million in milestone payments under the Sandoz collaboration upon receiving sole FDA approval and upon the first commercial sale of Glatopa.

Research and development expenses for the second quarter of 2016 were $33.2 million, compared to $34.0 million for the same period in 2015. The decrease of $0.8 million, or 2%, from the 2015 period to the 2016 period was due to decreases of $0.8 million in stock-based compensation expense and $8.4 million for Mylan’s 50% share of biosimilar collaboration costs, which was offset by increases of $4.4 million in process and clinical development costs for M281 and biosimilars under the Company’s collaboration with Mylan, $2.2 million in non-clinical expenses to advance the Company’s novel autoimmune programs, $1.0 million in personnel-related expenses and $0.7 million in necuparanib Phase 2 clinical trial costs.

General and administrative expenses for the quarter ended June 30, 2016 were $14.9 million, compared with $13.3 million for the same period in 2015. The increase of $1.6 million, or 12%, was primarily due to an increase of $2.1 million in legal and professional fees. This increase was offset by a decrease of $0.5 million for Mylan’s 50% share of biosimilar collaboration costs.

At June 30, 2016, Momenta had $336.9 million in cash, cash equivalents and marketable securities.

Financial Guidance

Momenta provides non-GAAP operating expense guidance, which it believes can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the section of this press release below entitled "Non-GAAP Financial Information and Other Disclosures" for further discussion of this subject.

Today, Momenta reiterated its non-GAAP operating expense guidance of approximately $40 – $45 million per quarter for the second half of 2016. Non-GAAP operating expense is total operating expenses (which is net of Mylan’s share of collaboration expenses), excluding stock-based compensation expense and net of collaborative reimbursement revenues from Sandoz and Baxalta. The quarterly recognition of collaborative revenues under the Company’s collaborations with Baxalta and Mylan is expected to be $2.4 million and $1.8 million per quarter, respectively.

On August 4, 2016 Progenics Pharmaceuticals, Inc. (Nasdaq:PGNX) reported financial and business results for the second quarter 2016 (Press release, Progenics Pharmaceuticals, AUG 4, 2016, View Source [SID:1234514291]).

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"The clear highlight in recent weeks was the approval of RELISTOR tablets, which triggered a $50 million milestone payment from our partner Valeant, strengthening our balance sheet as we prepare for a potential AZEDRA launch and continue to advance development of our prostate cancer pipeline," said Mark Baker, Chief Executive Officer of Progenics. "Our cash, together with the potential to earn significant additional royalties and sales milestones from the RELISTOR franchise, puts us in a strong position to achieve multiple value-creating milestones. In particular, our ultra-orphan radiotherapeutic candidate AZEDRA represents a meaningful near-term commercialization opportunity for Progenics, and we are on track to announce registrational topline data later this year or in early 2017. We are also advancing development of our portfolio of prostate cancer imaging agents and therapeutics, which has the potential to significantly improve how we find, fight, and follow all stages of prostate cancer."

Key Business Highlights

RELISTOR, treatment for opioid-induced constipation (partnered with Valeant Pharmaceuticals International, Inc.)

On July 19, the Company Announced that the FDA has approved RELISTOR tablets for the treatment of opioid induced constipation in adults with chronic non-cancer pain. The approval triggered a $50 million milestone payment on July 25 from Progenics’ partner, Valeant, as well as subsequent royalties and up to $200 million in sales milestones.

RELISTOR SC Net Sales for the Second Quarter 2016 Total $15.9 Million. The second quarter 2016 sales, as reported to the Company by Valeant, translated to $2.4 million in royalty revenue for the second quarter of 2016.
AZEDRA, Ultra-orphan radiotherapeutic candidate

AZEDRA Topline Results Expected Between December 2016 and March 2017. In late 2016 or early 2017, Progenics expects to report topline results from its ongoing registrational trial of AZEDRA. If the AZEDRA trial meets the endpoints of the SPA, the Company expects to submit an NDA to the FDA during the first half of 2017.
PSMA-Targeted Prostate Cancer Pipeline

Granted an Exclusive License to Bayer for the Development and Commercialization of Therapeutic Antibodies Combining Progenics’ PSMA Antibody Technology with Bayer’s Targeted Thorium Conjugate Technology. Progenics recognized revenue of $5 million in the second quarter of 2016, constituting the $4 million upfront payment and the first pre-clinical development milestone of $1 million. Under terms of the agreement, the Company is entitled to up to an additional $48 million in potential clinical and regulatory development milestones, single digit royalties on net sales, and potential sales milestone payments up to an aggregate of $130 million.

Enrollment in Pivotal Phase 3 Study of 1404 is Ongoing. The study will enroll up to 450 patients with newly-diagnosed or low-grade prostate cancer who are candidates for active surveillance. The Company’s plans for an interim analysis during the fourth quarter of 2016 to assess futility and evaluate the need for a sample size re-estimation remain unchanged.

Presented Data from its PSMA-Targeted Prostate Cancer Imaging Programs at the Society of Nuclear Medicine and Molecular Imaging 2016 Annual Meeting in San Diego. The data highlighted the potential of the Company’s SPEC/CT imaging agent 1404 and PET/CT imaging agent PyL to detect prostate cancer.

On-Track to Initiate Phase 2/3 Trial of PyL by Year-End. The study is designed to assess the diagnostic accuracy of PyL PET/CT imaging in patients with high risk and/or metastatic prostate cancer.

Company Remains On-Track to Initiate a Phase 1 Trial of 1095 in the Fourth Quarter of 2016. The Phase 1 Study of 1095, a PSMA-Targeted Therapeutic for Metastatic Prostate Cancer, will be conducted at Memorial Sloan Kettering Cancer Center.
Second Quarter 2016 Financial Results

Net loss attributable to Progenics for the quarter was $5.6 million or $0.08 per diluted share, compared to a net loss of $11.7 million or $0.17 per diluted share in the 2015 period. Progenics ended the quarter with cash and cash equivalents of $60.1 million, a decrease of $5.5 million in the quarter.

Second quarter revenue totaled $8.5 million, up from $1.9 million in 2015, reflecting RELISTOR royalty income of $2.4 million compared to $1.8 million in the 2015 period, based on net sales reported to Progenics by Valeant. The increase was primarily attributable to upfront and milestone revenue of $5 million under the Bayer license agreement.

Second quarter and year-to-date research and development expenses increased by $1.3 million and $3.9 million, respectively, compared to the prior year periods, resulting from higher clinical trial and contract manufacturing expenses for AZEDRA, 1404 and PyL, partially offset by lower expenses for PSMA ADC. Second quarter general and administrative expenses decreased by $0.5 million from the prior year period, primarily attributable to lower legal fees as the prior year included costs related to litigation with a former employee. Year-to-date general and administrative expenses increased by $1.6 million compared to prior year period, primarily resulting from higher depreciation expense as a result of a reduction in the remaining useful lives of our leasehold improvements at our Tarrytown, NY location, and higher compensation and consulting expenses. The Company also recorded a non-cash charge of $0.6 million in the second quarter related to an increase in the fair value estimate of the contingent consideration liability.

On August 4, 2016 Agios Pharmaceuticals, Inc. (NASDAQ:AGIO), a leader in the fields of cancer metabolism and rare genetic metabolic disorders, reported business highlights and financial results for the second quarter ended June 30, 2016 (Press release, Agios Pharmaceuticals, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2192919 [SID:1234514229]).

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"Second quarter achievements marked tremendous progress towards our 2016 goals across our research and development programs," said David Schenkein, M.D., chief executive officer at Agios. "At EHA (Free EHA Whitepaper), we established clear proof-of-concept for AG-348 in pyruvate kinase deficiency, validating our novel approach to treat rare genetic metabolic disorders by correcting the underlying enzymatic defect and potentially establishing the first treatment for patients with this serious disease. This milestone sets the stage for pivotal development of our PKR activator program. In addition, our new strategic collaboration with Celgene enables Agios to expand into the emerging field of metabolic immuno-oncology, an important new field of cancer research. With full worldwide rights for AG-120, we now have another wholly owned investigational medicine we discovered with the potential to benefit patients waiting for better therapies. As we move into the second half of the year, our focus is on the execution of our late-stage programs and several clinical updates across both IDH and PKR portfolios."

SECOND QUARTER 2016 HIGHLIGHTS & UPDATES

PKR Activator Program for the Treatment of Pyruvate Kinase Deficiency:

Data presented at the 21st Congress of the European Hematology Association (EHA) (Free EHA Whitepaper) in June validated Agios’ novel approach to the treatment of rare genetic metabolic disorders by correcting the underlying enzymatic defect with a small molecule.

AG-348 achieved proof-of-concept with rapid and sustained hemoglobin increases in the ongoing Phase 2 DRIVE-PK study of patients with pyruvate kinase (PK) deficiency. Read the AG-348 data from EHA (Free EHA Whitepaper) here.
Initial data from the AG-519 Phase 1 integrated single ascending dose (SAD) and multiple ascending dose (MAD) clinical trial in healthy volunteers provided proof-of-mechanism. As reported at EHA (Free EHA Whitepaper), one subject from the MAD portion of the study experienced a reversible Grade 2 platelet reduction consistent with drug-induced immune thrombocytopenia. Since the EHA (Free EHA Whitepaper) presentation data cut-off, 18 additional healthy volunteers have been dosed with AG-519 for 14 days and there have been no additional cases of thrombocytopenia. Read the AG-519 data from EHA (Free EHA Whitepaper) here.
Corporate:

In May, Agios and Celgene announced a new global strategic collaboration focused on metabolic immuno-oncology, an emerging field of cancer research focused on altering the metabolic state of immune cells to enhance the body’s immune response to cancer.

Agios received an upfront cash payment of $200 million and as a result updated expected 2016 ending cash, cash equivalents and marketable securities to more than $390 million. This revised cash balance is expected to be sufficient to fund Agios’ operating expenses and capital expenditure requirements through mid-2018.
The companies also amended certain rights from their 2010 collaboration agreement, including the transfer of ex-U.S. development and commercialization rights of AG-120 to Agios. For more information on the May 2016 agreement, read here.
2016 EXPECTED MILESTONES IN CANCER METABOLISM

IDH Mutant Inhibitors in Hematologic Malignancies:

Complete enrollment of the 125-patient expansion cohort for the Phase 1 study of AG-120 in patients with relapsed/refractory acute myeloid leukemia (R/R AML) in the second half of the year
Plan to present updated data from the completed dose escalation portion of the AG-120 Phase 1 study in R/R AML in the second half of the year
Initiate an expansion arm in high-risk myelodysplastic syndrome patients for AG-221 in the second half of the year
Continue to enroll patients in the following ongoing clinical trials:
Phase 3 IDHENTIFY study of AG-221 vs. standard of care chemotherapy in R/R AML
Phase 1b frontline combination study of AG-221 or AG-120 with standard-of-care intensive chemotherapy in AML
Phase 1/2 frontline combination study of AG-221 or AG-120 with VIDAZA in AML
Phase 1 dose-escalation and expansion study of AG-881 in IDH mutant positive hematologic malignancies
IDH Mutant Inhibitors in Solid Tumors:

Plan to present data from the expansion phase of the ongoing Phase 1 study of AG-120 in advanced IDH1 mutant positive low-grade glioma in the second half of the year
Initiate a randomized Phase 2 study of AG-120 in IDH1 mutant positive cholangiocarcinoma in the second half of the year
Continue to enroll patients in the following ongoing clinical trials:
Expansion phase of the ongoing Phase 1 study of AG-120 in advanced IDH1 mutant positive solid tumors
Phase 1 dose-escalation and expansion study of AG-881 in IDH mutant positive solid tumors
Cancer Metabolism Research:

Initiate preclinical development activities for the first molecule in a program focused on MTAP (methylthioadenosine phosphorylase) deleted cancers
2016 EXPECTED MILESTONES IN RARE GENETIC METABOLIC DISORDERS

Plan to present updated data from the AG-348 Phase 2 DRIVE-PK study, the AG-519 Phase 1 healthy volunteer study, and the Natural History Study of PK deficiency in the second half of the year
Provide a development strategy update for our PKR activator program, including molecule selection, in the second half of the year
Outline the clinical development plans for our PKR activators in beta-thalassemia in the second half of the year
SECOND QUARTER 2016 FINANCIAL RESULTS

Cash, cash equivalents and marketable securities as of June 30, 2016 were $512.3 million, compared to $375.9 million as of December 31, 2015. The increase in cash was driven by cash received from Celgene totaling $243.5 million, which included a $200 million upfront payment from the May 2016 collaboration agreement, $25 million related to a substantive clinical development milestone for the AG-221 program and $18.5 million of program funding related to our collaboration agreements. The cash received from Celgene was offset by a decrease in cash related to expenditures to fund operating activities of $104.7 million during the six months ended June 30, 2016.

Collaboration revenue was $7.0 million for the quarter ended June 30, 2016, compared to $13.2 million for the comparable period in 2015. For the second quarter of 2015, collaboration revenue included $8.8 million related to the delivery of the U.S and ex-U.S. licenses for AG-881.

Research and development (R&D) expense was $50.8 million, including $6.6 million of stock-based compensation expense, for the quarter ended June 30, 2016, compared to $36.4 million, including $4.6 million in stock-based compensation expense, for the quarter ended June 30, 2015. The increase in R&D expense was primarily due to increased costs to support advancement of the company’s lead investigational medicines toward later-stage development. Celgene is responsible for all development costs for AG-221 and certain development costs for AG-881 and reimburses the company for development costs incurred for these investigational medicines.

General and administrative (G&A) expense was $12.6 million, including $4.4 million of stock-based compensation expense, for the quarter ended June 30, 2016, compared to $8.9 million, including $3.6 million of stock-based compensation expense, for the quarter ended June 30, 2015. The increase in G&A expense was largely due to increased headcount and other professional expenses to support growing operations.

Net loss for the quarter ended June 30, 2016 was $56.0 million, compared to a net loss of $31.9 million for the comparable period in 2015.

On August 4, 2016 Apricus Biosciences, Inc. (Nasdaq:APRI), a biopharmaceutical company advancing innovative medicines in urology and rheumatology, reported financial results for the second quarter of 2016 and provided a corporate update on its priorities for 2016 (Press release, Apricus Biosciences, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2193174 [SID:1234514249]).

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"In the second quarter, we sharpened our strategic focus in an effort to maximize the regulatory and commercial success of Vitaros with the goal of building a thriving and profitable global Vitaros brand," stated Richard W. Pascoe, Chief Executive Officer. "Our primary corporate goal continues to be the potential regulatory approval of Vitaros in the United States. In an effort to advance our Vitaros NDA resubmission, we requested, and we were recently granted, a Type B meeting with the FDA, scheduled for November 17, 2016. The purpose of this meeting is to confirm our strategy for addressing the deficiencies contained in the original 2008 Complete Response letter. We will incorporate any FDA feedback into the final submission, which we expect to occur as soon as possible after the meeting. We view the granting of this meeting as a favorable development and a reflection of our commitment to maintaining a constructive relationship with all regulatory authorities. Additionally, we have consolidated Vitaros territories in Europe and Asia with our newest partner Ferring in an effort to expand the global availability of Vitaros and increase revenue in important markets such as Germany. Moreover, we have substantially reduced our operating expenses and improved our balance sheet as part of our strategy to achieve profitability in 2017."

Second Quarter Highlights and Recent Developments

Apricus updated its corporate goals early in the second quarter to focus on increasing Vitaros’ value through the fostering and expansion of its commercial partnerships, in the U.S. and globally, and strengthening the Company’s financial position. Second quarter and recent highlights include:

Expanded the Company’s exclusive Vitaros distribution agreement with Ferring International S.A. in Latin America to now include Germany, Austria, Belgium, Denmark, Finland, Iceland, Luxembourg, Norway, the Netherlands, Sweden, Switzerland and certain countries in Asia (previously Sandoz’s territories), the United Kingdom (previously Takeda’s territory) and Korea for up to an additional $3.85 million in upfront and pre-commercialization milestone payments and up to an additional $1.5 million in launch milestone payments, plus royalties on future net sales;
Closed on a common stock purchase agreement with Aspire Capital. Aspire Capital completed an initial purchase of 2,531,645 shares of common stock for proceeds of $1.0 million and has committed to purchase up to $6.0 million in additional shares of common stock over the next 24 months. No warrants were associated with this agreement;
Announced receipt of regulatory approval of Vitaros in Lebanon by our partner in the Middle East, Elis Pharmaceuticals, marking an important entry into a highly attractive Middle Eastern erectile dysfunction market; and
Obtained regulatory approval in Europe for an improved delivery device material of construction for the refrigerated version of Vitaros.
Strategic Priorities

Apricus continues to focus on achieving the following key strategic objectives:

Vitaros* (alprostadil)

Continue implementation of the U.S. regulatory approval strategy to address the safety and manufacturing issues raised by the FDA in the original Vitaros NDA submission, with an NDA resubmission targeted for the fourth quarter of 2016 and an approval decision expected after a six month review period;
Continue to support the Company’s ex-U.S. partners’ efforts to build a global brand and increase revenue by supporting new commercial launches by the Company’s partners and assisting the Company’s partners in obtaining additional regulatory approvals in their respective territories; and
Continue to generate the required data in 2016 to support delivery device improvements and related regulatory submission(s) with a priority to support the U.S. NDA resubmission of the refrigerated version of Vitaros.
RayVa(alprostadil)

Explore Orphan Drug Designation in the U.S. and EU; and
Explore global or regional partnerships prior to initiating the Phase 2b study.
Corporate/Financial

Reduce operating expenses by approximately 30% in 2016 and 60% in 2017 as compared to 2015 operating expenses; and
Grow Vitaros revenue, seek non-dilutive capital, and utilize lower cost of capital financial instruments to fund operations with the goal of achieving profitability in 2017.
Second Quarter Financial Results

Revenue for each of the quarters ended June 30, 2016 and 2015 was $0.5 million. Revenue during the quarter ended June 30, 2016 was comprised of $0.3 million in royalty revenues, an increase of $0.2 million or 305.3% over the quarter ended June 30, 2015. Revenue during the quarter ended June 30, 2015 included $0.4 million in product sales, the decline of which in 2016 was a result of our commercialization partners working directly with our manufacturers. Net loss for the quarter ended June 30, 2016 was $3.3 million, or loss per share of $0.05, compared to a net loss of $5.2 million, or $0.10 per share for the second quarter of 2015. Reducing the net loss for the quarter ended June 30, 2016 was a non-cash change in the fair value of the Company’s warrant liability in the amount of $1.6 million.

As of June 30, 2016, cash and cash equivalents totaled $2.7 million, compared to $3.9 million as of December 31, 2015. Cash and cash equivalents at June 30, 2016 do not reflect the receipt of $2.0 million in upfront payments received in July related to the Ferring Northern Europe and Asia territory expansion, nor any proceeds from sales of common stock to Aspire Capital.

2016 Financial Outlook

Early in the second quarter of 2016, Apricus reduced its staff, including the executive team, by approximately 30%, decreased the size of the Board by one member and reduced the Board’s cash compensation. Apricus plans to continue to reduce operating expenses (excluding non-cash stock-based compensation expense and depreciation expense), with a goal of achieving reductions of approximately 30% in 2016 and 60% in 2017 as compared to 2015 operating expenses (excluding non-cash stock-based compensation expense and depreciation expense).

In 2016, Apricus expects to continue to generate cash from milestone or licensing payments and royalty revenues from its partners’ sales of Vitaros. Apricus will also continue to pursue out-licensing opportunities for Vitaros in Japan and China. Apricus’ expenditures will include minimal costs for the preparatory Phase 2b clinical development of RayVa, as well as costs for activities associated with supporting the regulatory approval of Vitaros in the U.S. and the commercialization of Vitaros in Europe.