On November 8, 2016 Jazz Pharmaceuticals plc (Nasdaq: JAZZ) reported financial results for the third quarter of 2016 and updated financial guidance for 2016 (Press release, Jazz Pharmaceuticals, NOV 8, 2016, View Source;p=RssLanding&cat=news&id=2220711 [SID1234516566]).

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"We have made substantial progress towards achieving our corporate objectives for 2016, delivering solid top-line growth in our commercial business, investing in broadening our hematology/oncology portfolio with the completion of the Celator acquisition and increasing our investments in R&D," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "In the third quarter, we began a rolling NDA submission for Vyxeos for the treatment of acute myeloid leukemia, and we are pleased with the achievement of important clinical milestones, advancement of key R&D programs and expansion of our clinical development portfolio, all of which support our goal of developing and commercializing meaningful therapies for patients while building shareholder value."

GAAP net income attributable to Jazz Pharmaceuticals plc for the third quarter of 2016 was $87.1 million, or $1.41 per diluted share, compared to $88.0 million, or $1.39 per diluted share, for the third quarter of 2015.

Adjusted net income attributable to Jazz Pharmaceuticals plc for the third quarter of 2016 was $158.5 million, or $2.57 per diluted share, compared to $159.3 million, or $2.52 per diluted share, for the third quarter of 2015. Reconciliations of applicable GAAP reported to non-GAAP adjusted information are included in this press release.

Financial Highlights

Three Months Ended
September 30,

Nine Months Ended
September 30,

(In thousands, except per share amounts and percentages)
2016

2015

Change

2016

2015

Change
Total revenues
$
374,181

$
340,872

9.8
%

$
1,091,352

$
983,922

10.9
%
GAAP net income attributable to Jazz Pharmaceuticals plc
$
87,145

$
87,960

(0.9)
%

$
272,548

$
246,774

10.4
%
Adjusted net income attributable to Jazz Pharmaceuticals plc1
$
158,470

$
159,302

(0.5)
%

$
453,931

$
418,968

8.3
%
GAAP EPS attributable to Jazz Pharmaceuticals plc
$
1.41

$
1.39

1.4
%

$
4.40

$
3.91

12.5
%
Adjusted EPS attributable to Jazz Pharmaceuticals plc1
$
2.57

$
2.52

2.0
%

$
7.32

$
6.64

10.2
%

1.
Commencing with the second quarter of 2016, the company modified the calculation of its non-GAAP income tax provision in connection with the Securities and Exchange Commission’s May 2016 guidance pertaining to non-GAAP financial measures. This modification is reflected in the company’s 2015 and 2016 non-GAAP interim period results and full-year 2016 financial guidance. See "Non-GAAP Financial Measures" below. The modification did not have a material effect on the adjusted net income attributable to Jazz Pharmaceuticals plc or adjusted EPS for the three months ended September 30, 2015. The modification resulted in the reduction of adjusted net income attributable to Jazz Pharmaceuticals plc by $17.6 million, or $0.28 per diluted share, compared to the amount previously reported for the nine months ended September 30, 2015.

Total Revenues

Three Months Ended
September 30,

Nine Months Ended
September 30,
(In thousands)
2016

2015

2016

2015
Xyrem (sodium oxybate) oral solution
$
285,907

$
242,899

$
816,412

$
703,435

Erwinaze / Erwinase (asparaginase Erwinia chrysanthemi)
42,986

56,317

143,907

152,821

Defitelio (defibrotide sodium) / defibrotide
28,137

19,639

79,280

52,259

Prialt (ziconotide) intrathecal infusion
8,783

6,042

23,065

19,944

Psychiatry
3,875

9,910

14,744

28,375

Other
1,933

3,947

7,239

21,061

Product sales, net
371,621

338,754

1,084,647

977,895

Royalties and contract revenues
2,560

2,118

6,705

6,027

Total revenues
$
374,181

$
340,872

$
1,091,352

$
983,922

Net product sales increased 10% in the third quarter of 2016 compared to the same period in 2015 due to higher net product sales of Xyrem and Defitelio.

Xyrem net product sales increased 18% in the third quarter of 2016 compared to the same period in 2015.

Erwinaze/Erwinase net product sales decreased 24% in the third quarter of 2016 compared to the same period in 2015 due to an Erwinaze supply interruption in the U.S. late in the third quarter of 2016. The company expects that it will continue to experience Erwinaze inventory and supply challenges, which have resulted, and are expected to continue to result, in temporary disruptions in the company’s ability to supply certain markets, including the U.S.

Defitelio/defibrotide net product sales increased $8.5 million in the third quarter of 2016 compared to the same period in 2015 primarily due to net sales of $7.1 million in the U.S.

Operating Expenses

Three Months Ended
September 30,

Nine Months Ended
September 30,
(In thousands, except percentages)
2016

2015

2016

2015
GAAP:

Cost of product sales
$
24,311

$
28,385

$
71,730

$
78,496

Gross margin
93.5
%

91.6
%

93.4
%

92.0
%
Selling, general and administrative
$
124,368

$
104,044

$
375,751

$
323,564

% of total revenues
33.2
%

30.5
%

34.4
%

32.9
%
Research and development
$
47,796

$
50,784

$
118,139

$
105,798

% of total revenues
12.8
%

14.9
%

10.8
%

10.8
%
Acquired in-process research and development
$
15,000

$
—

$
23,750

$
—

Three Months Ended
September 30,

Nine Months Ended
September 30,
(In thousands, except percentages)
2016

2015

2016

2015
Non-GAAP adjusted:

Cost of product sales
$
22,963

$
27,599

$
68,620

$
76,243

Gross margin
93.8
%

91.9
%

93.7
%

92.2
%
Selling, general and administrative
$
94,534

$
84,502

$
296,633

$
268,013

% of total revenues
25.3
%

24.8
%

27.2
%

27.2
%
Research and development
$
43,323

$
22,998

$
106,847

$
70,661

% of total revenues
11.6
%

6.7
%

9.8
%

7.2
%
Operating expenses changed over the prior year period primarily due to the following:

Selling, general and administrative (SG&A) expenses increased in the third quarter of 2016 compared to the same period in 2015 on a GAAP and on a non-GAAP adjusted basis, primarily due to higher headcount and other expenses resulting from the expansion of the company’s business. The increase on a GAAP basis was also driven by transaction and integration costs related to the Celator acquisition.
Research and development (R&D) expenses on a GAAP basis decreased by $3.0 million in the third quarter of 2016 compared to the same period in 2015. R&D expenses on a non-GAAP adjusted basis increased by $20.3 million primarily due to increased expenses for the development of JZP-110; increasing investments in line extensions for the company’s existing products, including oxybate-related R&D programs and the initiation of a clinical study of defibrotide for the prevention of veno-occlusive disease (VOD); and costs related to the rolling new drug application (NDA) submission for VyxeosTM(cytarabine and daunorubicin liposome injection). The decrease in R&D expenses on a GAAP basis was primarily due to a $25.0 million milestone expense in the third quarter of 2015 in connection with the acceptance for filing by the U.S. Food and Drug Administration (FDA) of the NDA for defibrotide, which was partially offset by the project related costs described above.
Acquired in-process research and development expense in the third quarter of 2016 related to upfront and option payments to Pfenex Inc. under an agreement in which the company was granted worldwide rights to develop and commercialize multiple early-stage hematology product candidates.
Cash Flow and Balance Sheet

As of September 30, 2016, cash, cash equivalents and investments were $426.0 million, and the outstanding principal balance of the company’s long-term debt was $2.3 billion. Cash, cash equivalents and investments decreased from December 31, 2015 primarily due to the acquisition of Celator for approximately $1.5 billion, repurchases under the company’s share repurchase program and a $150.0 million milestone payment triggered by FDA approval of Defitelio on March 30, 2016, partially offset by borrowings of $1.0 billion under the company’s revolving credit facility and cash flows from operations of $409.8 million.

During the nine months ended September 30, 2016, the company repurchased 2.1 million ordinary shares for $259.8 million, at an average cost of $125.65 per ordinary share, under a share repurchase program approved in November 2015. This share repurchase program was completed in September 2016. The company’s board of directors has authorized a new share repurchase program under which the company is authorized to repurchase a number of ordinary shares having an aggregate purchase price of up to $300 million. Under the new program, which has no expiration date, the company may repurchase ordinary shares from time to time on the open market. The timing and amount of repurchases will depend on a variety of factors, including the price of the company’s ordinary shares, alternative investment opportunities, restrictions under the company’s credit agreement, corporate and regulatory requirements and market conditions. The new share repurchase program may be modified, suspended or discontinued at any time without prior notice.

Recent Developments

In September 2016, the company completed patient enrollment for its two Phase 3 studies evaluating JZP-110 in excessive sleepiness associated with obstructive sleep apnea.

In September 2016, the company initiated the rolling NDA submission to the FDA for Vyxeos for the treatment of acute myeloid leukemia. Vyxeos has received FDA orphan drug designation for the treatment of AML and was granted breakthrough therapy designation for treatment of adults with therapy-related AML or AML with myelodysplasia-related changes.

During the third quarter of 2016, the company activated clinical sites in the Phase 3 study of defibrotide for the prevention of VOD in high-risk patients following hematopoietic stem cell transplantation.

In November 2016, the company completed enrollment in the Phase 3 study of Xyrem in pediatric narcolepsy patients with cataplexy.

2016 Financial Guidance

Jazz Pharmaceuticals is updating its full year 2016 financial guidance as follows (in millions, except per share amounts and percentages):

Revenues
$1,485-$1,530
Total net product sales
$1,477-$1,522
-Xyrem net sales*
$1,100-$1,125
-Erwinaze/Erwinase net sales
$190-$215
-Defitelio/defibrotide net sales*
$105-$120
GAAP gross margin %
93%
Non-GAAP adjusted gross margin %1,4
93%
GAAP SG&A expenses*
$492-$517
Non-GAAP adjusted SG&A expenses*,2,4
$395-$405
GAAP R&D expenses*
$159-$171
Non-GAAP adjusted R&D expenses*,3,4
$145-$155
GAAP net income per diluted share
$5.66-$6.56
Non-GAAP adjusted net income per diluted share4
$9.90-$10.30

* Updated November 8, 2016.

1.
Excludes $5 million of share-based compensation expense from estimated GAAP gross margin.
2.
Excludes $78-$86 million of share-based compensation expense, $13-$20 million of transaction and integration related costs and $6 million of expenses related to certain legal proceedings and restructuring from estimated GAAP SG&A expenses.
3.
Excludes $14-$16 million of share-based compensation expense from estimated GAAP R&D expenses.
4.
See "Non-GAAP Financial Measures" below. Reconciliations of non-GAAP adjusted guidance measures are included above and in the table titled "Reconciliation of GAAP to Non-GAAP Adjusted 2016 Net Income Guidance" provided on the last page of this press release.

On November 8, 2016 Cellular Biomedicine Group Inc. (NASDAQ: CBMG) ("CBMG" or the "Company"), a clinical-stage biomedicine firm engaged in the development of immunotherapies for cancer and effective stem cell therapies for degenerative diseases, reported financial results and business highlights for the third quarter ended September 30, 2016 (Press release, Cellular Biomedicine Group, NOV 8, 2016, View Source [SID1234516650]).

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"In recent months, we have been diligently preparing for the launch of our upcoming CD19 and CD20 clinical studies and strengthening our CAR-T intellectual property portfolio," commented Tony (Bizuo) Liu, CBMG’s Chief Executive Officer. "We believe that since August 2015, the China Food and Drug Administration has been working towards formalizing a national cell therapy policy that will lay the groundwork for the safe use of immune cell and stem cell therapy treatments in China. Although the PRC government is still in the process of codifying industry regulations for such cell therapies, in anticipation of potential future market opportunities, we have accelerated the launch of multiple Phase I/IIb clinical studies with CAR-T CD19 and CD20 assets to advance our immuno-oncology pipeline. We have a strong balance sheet to finance our current clinical studies and to further expand our translational medicine research and development."

Third Quarter 2016 Financial Performance

1. Cash Position:$44.1 million cash and cash equivalents as compared to $14.9 million as of December 31, 2015.
2. Cash Used in Operating Activities:We used $3.3 million and $12.1 million for the three months and nine months ended September 30, 2016 in operating activities as compared to $2.9 million and $8.6 million for the same periods in 2015.
3. G&A Expenses: General and administrative expenses for the three months and nine months ended September 30, 2016 were $2.8 million and $8.6 million respectively, compared to $3.5 million and $9.9 million for the same periods in 2015.
4. R&D Expenses: Research and development expenses for the three months and nine months ended September 30, 2016 were $2.9 million and $8.3 million respectively, compared to $2.2 million and $5.0 million for the same periods in 2015.
5. Net Loss:Net loss allocable to common stock holders for the three months ended September 30, 2016 was $10.7 million, compared to $5.1 million for the same period in 2015. A $4.6 million impairment charge was incurred in the third quarter due to legacy, non-core business investments.

Business and Operational Highlights for the Third Quarter 2016 to date

The Company signed a tenancy deposit agreement to lease a 10,500 square meters facility located in Shanghai;
Appointment of Dr. Zhou Hansheng as a Director of the Company; and
Completed treatment of eighteen patients in Phase I clinical study of AlloJoinTMhaMPC therapy for Knee Osteoarthritis (KOA).

On November 7, 2016 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported that new data investigating the use of KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy, in patients with previously treated advanced urothelial cancer will be presented at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper)’s (SITC) (Free SITC Whitepaper) 31st Annual Meeting, Nov. 9-13 (Press release, Merck & Co, NOV 7, 2016, View Source [SID1234516353]). Data on overall survival (OS) and progression-free survival (PFS) from the phase 3 KEYNOTE-045 study – investigating KEYTRUDA compared to investigator’s choice chemotherapy in patients with metastatic or locally advanced or unresectable urothelial cancer that has recurred or progressed following platinum-based chemotherapy – will be presented for the first time; these data were accepted as a late-breaking abstract. In addition, results from three different studies exploring the utility of various biomarkers for KEYTRUDA will be presented at the meeting.

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KEYTRUDA Data at SITC (Free SITC Whitepaper) 2016

Below is a select listing of the KEYTRUDA abstracts accepted at SITC (Free SITC Whitepaper) 2016; abstracts are available on the meeting website .

Late-Breaking Oral Presentation, Location: Maryland Ballroom

(Abstract #470) KEYNOTE-045: open-label, phase 3 study of pembrolizumab versus investigator’s choice of paclitaxel, docetaxel, or vinflunine for previously treated advanced urothelial cancer.
Session Time: Saturday, Nov. 12, 11:15 a.m. – 12:00 p.m. ET
Presentation Time: 11:45 a.m. – 12:00 p.m. ET
Poster Presentations, Location: Prince George’s Exhibition Hall AB

(Abstract #61) Association between microsatellite instability and clinical response across tumor types in the phase 1b KEYNOTE-012 and KEYNOTE-028 studies of pembrolizumab in PD-L1-expressing advanced solid tumors.
Session Time: Friday, Nov. 11, 12:15 p.m. – 1:30 p.m. ET
(Abstract #72) An immune-related gene expression profile delineates features of the tumor microenvironment required for clinical response to PD-1 blockade.
Session Time: Saturday, Nov. 12, 11:45 a.m. – 1:00 p.m. ET
(Abstract #73) Tumor mutational load and T cell inflamed microenvironment are independent determinants of response to pembrolizumab.
Session Time: Friday, Nov. 11, 12:15 p.m. – 1:30 p.m. ET
The KEYTRUDA (pembrolizumab) clinical development program includes more than 30 tumor types in more than 360 clinical trials, including nearly 200 trials that combine KEYTRUDA with other cancer treatments. For genitourinary cancers, Merck has the largest immuno-oncology clinical development program in bladder cancer, with 27 trials underway involving KEYTRUDA as monotherapy and in combination, including four registration-enabling studies.

About KEYTRUDA (pembrolizumab)

KEYTRUDA is a humanized monoclonal antibody that works by increasing the ability of the body’s immune system to help detect and fight tumor cells. KEYTRUDA blocks the interaction between PD-1 and its ligands, PD-L1 and PD-L2, thereby activating T lymphocytes which may affect both tumor cells and healthy cells.

KEYTRUDA is administered as an intravenous infusion over 30 minutes every three weeks for the approved indications. KEYTRUDA for injection is supplied in a 100 mg single use vial.

KEYTRUDA Indications and Dosing

Melanoma

KEYTRUDA (pembrolizumab) is indicated for the treatment of patients with unresectable or metastatic melanoma at a dose of 2 mg/kg every three weeks until disease progression or unacceptable toxicity.

Lung Cancer

KEYTRUDA is indicated for the first-line treatment of patients with metastatic non-small cell lung cancer (NSCLC) whose tumors have high PD-L1 expression [tumor proportion score (TPS) ≥50%] as determined by an FDA-approved test, with no EGFR or ALK genomic tumor aberrations.

KEYTRUDA is also indicated for the treatment of patients with metastatic NSCLC whose tumors express PD-L1 (TPS ≥1%) as determined by an FDA-approved test, with disease progression on or after platinum-containing chemotherapy. Patients with EGFR or ALK genomic tumor aberrations should have disease progression on FDA-approved therapy for these aberrations prior to receiving KEYTRUDA.

In metastatic NSCLC, KEYTRUDA is administered at a fixed dose of 200 mg every three weeks until disease progression, unacceptable toxicity, or up to 24 months in patients without disease progression.

Head and Neck Cancer

KEYTRUDA is indicated for the treatment of patients with recurrent or metastatic head and neck squamous cell carcinoma (HNSCC) with disease progression on or after platinum-containing chemotherapy. This indication is approved under accelerated approval based on tumor response rate and durability of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials. In HNSCC, KEYTRUDA is administered at a fixed dose of 200 mg every three weeks until disease progression, unacceptable toxicity, or up to 24 months in patients without disease progression.

Selected Important Safety Information for KEYTRUDA (pembrolizumab)

KEYTRUDA can cause immune-mediated pneumonitis, including fatal cases. Pneumonitis occurred in 94 (3.4%) of 2799 patients receiving KEYTRUDA, including Grade 1 (0.8%), 2 (1.3%), 3 (0.9%), 4 (0.3%), and 5 (0.1%) pneumonitis, and occurred more frequently in patients with a history of prior thoracic radiation (6.9%) compared to those without (2.9%). Monitor patients for signs and symptoms of pneumonitis. Evaluate suspected pneumonitis with radiographic imaging. Administer corticosteroids for Grade 2 or greater pneumonitis. Withhold KEYTRUDA (pembrolizumab) for Grade 2; permanently discontinue KEYTRUDA for Grade 3 or 4 or recurrent Grade 2 pneumonitis.

KEYTRUDA can cause immune-mediated colitis. Colitis occurred in 48 (1.7%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.4%), 3 (1.1%), and 4 (<0.1%) colitis. Monitor patients for signs and symptoms of colitis. Administer corticosteroids for Grade 2 or greater colitis. Withhold KEYTRUDA for Grade 2 or 3; permanently discontinue KEYTRUDA for Grade 4 colitis.

KEYTRUDA can cause immune-mediated hepatitis. Hepatitis occurred in 19 (0.7%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.1%), 3 (0.4%), and 4 (<0.1%) hepatitis. Monitor patients for changes in liver function. Administer corticosteroids for Grade 2 or greater hepatitis and, based on severity of liver enzyme elevations, withhold or discontinue KEYTRUDA.

KEYTRUDA can cause hypophysitis. Hypophysitis occurred in 17 (0.6%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.2%), 3 (0.3%), and 4 (<0.1%) hypophysitis. Monitor patients for signs and symptoms of hypophysitis (including hypopituitarism and adrenal insufficiency). Administer corticosteroids and hormone replacement as clinically indicated. Withhold KEYTRUDA for Grade 2; withhold or discontinue for Grade 3 or 4 hypophysitis.

KEYTRUDA can cause thyroid disorders, including hyperthyroidism, hypothyroidism, and thyroiditis. Hyperthyroidism occurred in 96 (3.4%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.8%) and 3 (0.1%) hyperthyroidism. Hypothyroidism occurred in 237 (8.5%) of 2799 patients receiving KEYTRUDA, including Grade 2 (6.2%) and 3 (0.1%) hypothyroidism. The incidence of new or worsening hypothyroidism was higher in patients with HNSCC occurring in 28 (15%) of 192 patients with HNSCC, including Grade 3 (0.5%) hypothyroidism. Thyroiditis occurred in 16 (0.6%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.3%) thyroiditis. Monitor patients for changes in thyroid function (at the start of treatment, periodically during treatment, and as indicated based on clinical evaluation) and for clinical signs and symptoms of thyroid disorders. Administer replacement hormones for hypothyroidism and manage hyperthyroidism with thionamides and beta-blockers as appropriate. Withhold or discontinue KEYTRUDA for Grade 3 or 4 hyperthyroidism.

KEYTRUDA can cause type 1 diabetes mellitus, including diabetic ketoacidosis, which have been reported in 6 (0.2%) of 2799 patients. Monitor patients for hyperglycemia or other signs and symptoms of diabetes. Administer insulin for type 1 diabetes, and withhold KEYTRUDA and administer antihyperglycemics in patients with severe hyperglycemia.

KEYTRUDA (pembrolizumab) can cause immune-mediated nephritis. Nephritis occurred in 9 (0.3%) of 2799 patients receiving KEYTRUDA, including Grade 2 (0.1%), 3 (0.1%), and 4 (<0.1%) nephritis. Monitor patients for changes in renal function. Administer corticosteroids for Grade 2 or greater nephritis. Withhold KEYTRUDA for Grade 2; permanently discontinue KEYTRUDA for Grade 3 or 4 nephritis.

KEYTRUDA can cause other clinically important immune-mediated adverse reactions. For suspected immune-mediated adverse reactions, ensure adequate evaluation to confirm etiology or exclude other causes. Based on the severity of the adverse reaction, withhold KEYTRUDA and administer corticosteroids. Upon improvement to Grade 1 or less, initiate corticosteroid taper and continue to taper over at least 1 month. Based on limited data from clinical studies in patients whose immune-related adverse reactions could not be controlled with corticosteroid use, administration of other systemic immunosuppressants can be considered. Resume KEYTRUDA when the adverse reaction remains at Grade 1 or less following corticosteroid taper. Permanently discontinue KEYTRUDA for any Grade 3 immune-mediated adverse reaction that recurs and for any life-threatening immune-mediated adverse reaction.

The following clinically significant immune-mediated adverse reactions occurred in less than 1% (unless otherwise indicated) of 2799 patients: arthritis (1.5%), exfoliative dermatitis, bullous pemphigoid, rash (1.4%), uveitis, myositis, Guillain-Barré syndrome, myasthenia gravis, vasculitis, pancreatitis, hemolytic anemia, and partial seizures arising in a patient with inflammatory foci in brain parenchyma.

KEYTRUDA can cause severe or life-threatening infusion-related reactions, which have been reported in 6 (0.2%) of 2799 patients. Monitor patients for signs and symptoms of infusion-related reactions, including rigors, chills, wheezing, pruritus, flushing, rash, hypotension, hypoxemia, and fever. For Grade 3 or 4 reactions, stop infusion and permanently discontinue KEYTRUDA.

Based on its mechanism of action, KEYTRUDA can cause fetal harm when administered to a pregnant woman. If used during pregnancy, or if the patient becomes pregnant during treatment, apprise the patient of the potential hazard to a fetus. Advise females of reproductive potential to use highly effective contraception during treatment and for 4 months after the last dose of KEYTRUDA.

In KEYNOTE-006, KEYTRUDA was discontinued due to adverse reactions in 9% of 555 patients with advanced melanoma; adverse reactions leading to discontinuation in more than one patient were colitis (1.4%), autoimmune hepatitis (0.7%), allergic reaction (0.4%), polyneuropathy (0.4%), and cardiac failure (0.4%). Adverse reactions leading to interruption of KEYTRUDA (pembrolizumab) occurred in 21% of patients; the most common (≥1%) was diarrhea (2.5%). The most common adverse reactions with KEYTRUDA vs ipilimumab were fatigue (28% vs 28%), diarrhea (26% with KEYTRUDA), rash (24% vs 23%), and nausea (21% with KEYTRUDA). Corresponding incidence rates are listed for ipilimumab only for those adverse reactions that occurred at the same or lower rate than with KEYTRUDA.

In KEYNOTE-002, KEYTRUDA was discontinued due to adverse reactions in 12% of 357 patients with advanced melanoma; the most common (≥1%) were general physical health deterioration (1%), asthenia (1%), dyspnea (1%), pneumonitis (1%), and generalized edema (1%). Adverse reactions leading to interruption of KEYTRUDA occurred in 14% of patients; the most common (≥1%) were dyspnea (1%), diarrhea (1%), and maculopapular rash (1%). The most common adverse reactions with KEYTRUDA vs chemotherapy were fatigue (43% with KEYTRUDA), pruritus (28% vs 8%), rash (24% vs 8%), constipation (22% vs 20%), nausea (22% with KEYTRUDA), diarrhea (20% vs 20%), and decreased appetite (20% with KEYTRUDA). Corresponding incidence rates are listed for chemotherapy only for those adverse reactions that occurred at the same or lower rate than with KEYTRUDA.

KEYTRUDA was discontinued due to adverse reactions in 8% of 682 patients with metastatic NSCLC. The most common adverse event resulting in permanent discontinuation of KEYTRUDA was pneumonitis (1.8%). Adverse reactions leading to interruption of KEYTRUDA occurred in 23% of patients; the most common (≥1%) were diarrhea (1%), fatigue (1.3%), pneumonia (1%), liver enzyme elevation (1.2%), decreased appetite (1.3%), and pneumonitis (1%). The most common adverse reactions (occurring in at least 20% of patients and at a higher incidence than with docetaxel) were decreased appetite (25% vs 23%), dyspnea (23% vs 20%), and nausea (20% vs 18%).

KEYTRUDA was discontinued due to adverse reactions in 17% of 192 patients with HNSCC. Serious adverse reactions occurred in 45% of patients. The most frequent serious adverse reactions reported in at least 2% of patients were pneumonia, dyspnea, confusional state, vomiting, pleural effusion, and respiratory failure. The most common adverse reactions (reported in at least 20% of patients) were fatigue, decreased appetite, and dyspnea. Adverse reactions occurring in patients with HNSCC were generally similar to those occurring in patients with melanoma or NSCLC, with the exception of increased incidences of facial edema (10% all Grades; 2.1% Grades 3 or 4) and new or worsening hypothyroidism.

It is not known whether KEYTRUDA (pembrolizumab) is excreted in human milk. Because many drugs are excreted in human milk, instruct women to discontinue nursing during treatment with KEYTRUDA and for 4 months after the final dose.

Safety and effectiveness of KEYTRUDA have not been established in pediatric patients.

Our Focus on Cancer

Our goal is to translate breakthrough science into innovative oncology medicines to help people with cancer worldwide. At Merck, helping people fight cancer is our passion and supporting accessibility to our cancer medicines is our commitment. Our focus is on pursuing research in immuno-oncology and we are accelerating every step in the journey – from lab to clinic – to potentially bring new hope to people with cancer.

As part of our focus on cancer, Merck is committed to exploring the potential of immuno-oncology with one of the fastest-growing development programs in the industry. We are currently executing an expansive research program that includes more than 360 clinical trials evaluating our anti-PD-1 therapy across more than 30 tumor types. We also continue to strengthen our immuno-oncology portfolio through strategic acquisitions and are prioritizing the development of several promising immunotherapeutic candidates with the potential to improve the treatment of advanced cancers.

For more information about our oncology clinical trials, visit www.merck.com/clinicaltrials.

On November 7, 2016 Fate Therapeutics, Inc. (NASDAQ: FATE), a biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the third quarter ended September 30, 2016 (Filing, Q3, Fate Therapeutics, 2016, NOV 7, 2016, View Source [SID1234516386]).

"During the quarter, we made substantial progress and intensified our commitment towards accelerating the clinical development of ProTmune and bringing innovative natural killer- and T-cell cancer immunotherapies into the clinic," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "We significantly bolstered our ability to pursue accelerated registration for ProTmune by instituting investigator and patient blinding in our randomized, controlled PROTECT study. We advanced FATE-NK100, a first-in-class adaptive NK cell product candidate with multi-faceted anti-tumor activity, to IND filing and we are now preparing for the initiation of clinical investigation in early 2017. Additionally, we joined forces with Memorial Sloan Kettering Cancer Center to pioneer the development of off-the-shelf T-cell immunotherapies using engineered induced pluripotent cell lines, a breakthrough approach that enables the continuous production of clonal T-cell products at the scale necessary to serve significant numbers of patients."

Recent Highlights & Program Updates

• IND Filed for Adaptive NK Cell Cancer Immunotherapy. Fate Therapeutics, in collaboration with the Masonic Cancer Center, University of Minnesota, plans to initiate clinical testing in 2017 of FATE-NK100, a first-in-class adaptive natural killer (NK) cell product candidate, for the treatment of refractory or relapsed acute myeloid leukemia (AML). FATE-NK100 has demonstrated in preclinical studies enhanced anti-tumor activity, improved persistence and increased immune checkpoint resistance as compared to NK cell therapies that are being clinically-administered today. New preclinical data from the program are scheduled to be presented at an oral session at the 58th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition in December.

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Bolstered Path for Accelerated Registration of ProTmune PROTECT Study. The Company amended its protocol for its randomized, controlled Phase 1/2 PROTECT clinical trial of ProTmune. The amendment blinds both investigators and subjects in the study, substantially enhancing its potential to support accelerated registration. In addition, the study eligibility criteria were expanded to include subjects with additional hematologic malignancies, including myelodysplastic syndromes, and to include cytomegalovirus (CMV)-seronegative subjects. ProTmune is currently being evaluated for the prevention of life-threatening complications, including acute graft-versus-host disease (GvHD), in adult subjects with hematologic malignancies undergoing allogeneic mobilized peripheral blood hematopoietic cell transplantation (HCT).

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Granted Broad Orphan Drug Designations by FDA and EMA for ProTmune. In September, the U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation and, in October, the European Medicines Agency (EMA) granted Orphan Medicinal Product Designation, for ProTmune. The designation granted by each agency broadly covers subjects undergoing allogeneic HCT across diseases for which the procedure is performed, including blood cancers and genetic disorders. In June 2016, the FDA granted Fast Track designation for ProTmune for the reduction of incidence and severity of acute GvHD in patients undergoing allogeneic HCT.

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Launched Off-the-Shelf T-Cell Immunotherapy Partnership with Memorial Sloan Kettering. The multi-year collaboration led by Michel Sadelain, M.D., Ph.D., Director of the Center for Cell Engineering and the Stephen and Barbara Friedman Chair at Memorial Sloan Kettering Cancer Center (MSK), is advancing T-cell product candidates derived from engineered induced pluripotent cells. Like master cell lines used for the manufacture of monoclonal antibodies, pluripotent cell lines can serve as a renewable cell source for the consistent manufacture of clonal populations of effector cells for off-the-shelf treatment of patients. In connection with the partnership, Fate Therapeutics also exclusively licensed from MSK foundational intellectual property covering T cells and NK cells derived from induced pluripotent cells engineered with chimeric antigen receptors.

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Completed $10.3M Common Stock Private Placement. In August, Fate Therapeutics issued 5.25 million shares of common stock at $1.96 per share pursuant to a securities purchase agreement with certain institutional investors including Franklin Advisers, Inc.

Third Quarter 2016 Financial Results

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Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of September 30, 2016 were $46.6 million compared to $64.8 million as of December 31, 2015. The decrease was primarily driven by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank. This use was partially offset by $10.2 million in net proceeds received by the Company in August 2016 in connection with its private placement of common stock to certain institutional investors.

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Total Revenue: Revenue was $1.0 million for the third quarter of 2016 as well as for the comparable period in 2015. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.

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Total Operating Expenses: Total operating expenses were $9.4 million for the third quarter of 2016 compared to $7.4 million for the comparable period in 2015. Operating expenses for the third quarter of 2016 included $0.8 million of stock compensation expense, compared to $0.6 million for the comparable period in 2015.

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R&D Expenses: Research and development expenses were $6.8 million for the third quarter of 2016 compared to $5.0 million for the comparable period in 2015. The increase in R&D expenses was primarily related to an increase in third-party service provider fees to support the Company’s clinical development of ProTmune and preclinical development of FATE-NK100 in collaboration with the University of Minnesota, and an increase in personnel expenses resulting from the hiring of additional employees to support the conduct of its research activities, including activities under its collaboration with Juno.

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G&A Expenses: General and administrative expenses were $2.6 million for the third quarter of 2016 compared to $2.4 million for the comparable period in 2015. The increase in G&A expenses was primarily related to an increase in intellectual property-related expenses.

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Common Shares Outstanding: Common shares outstanding as of September 30, 2016 were 34.1 million compared to 28.7 million as of December 31, 2015. Common shares outstanding increased primarily as a result of the Company’s issuance of 5.25 million shares of common stock in August 2016 in connection with its private placement of common stock to certain institutional investors.

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On November 7, 2016 Kura Oncology, Inc., (Nasdaq:KURA) a clinical stage biopharmaceutical company committed to realizing the promise of precision medicines for the treatment of cancer, reported third quarter 2016 financial results and recent business highlights (Press release, Kura Oncology, NOV 7, 2016, View Source;p=RssLanding&cat=news&id=2220292 [SID1234516570]).

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Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

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"During the third quarter, we have continued to advance our tipifarnib development program," said Troy Wilson, Ph.D., J.D., President and CEO of Kura Oncology. "Our Phase 2 HRAS solid tumor trial is progressing and the two patients from stage 1 with partial responses have now been on study for 15 months and 8 months, which is encouraging given the relatively limited clinical benefit these patients observed on prior therapy. We have focused the second stage of the trial on patients with HRAS mutant squamous cell head and neck cancer, and we look forward to additional results in this patient population."

"In addition, our trials in PTCL and lower-risk MDS are ongoing, and we recently initiated our planned Phase 2 trial for tipifarnib in patients with CMML," stated Dr. Wilson. "We believe each of these Phase 2 studies has a strong scientific and clinical rationale, and they provide multiple potential opportunities for registration-enabling studies."

Dr. Wilson continued, "We are preparing to advance our ERK inhibitor, KO-947, into clinical testing and are encouraged by the consistent and compelling activity we have observed in preclinical models of cancers with mutations or dysregulation of the MAPK pathway as well as by our identification of potential biomarkers to guide development. I am very pleased we are on track to submit an IND before year-end."

Upcoming Clinical and Preclinical Activities for Kura Oncology Programs

Submission of the investigational new drug (IND) for KO-947 is anticipated in the fourth quarter of 2016.

Nomination of a development candidate for the menin-MLL program is anticipated in the fourth quarter of 2016.

Presentation of preclinical data for KO-947 and menin-MLL program at EORTC in Munich in November 2016.

Initiation of a Phase 1 study for KO-947 is anticipated in the first half of 2017.

Topline data from the Phase 2 study of tipifarnib in PTCL is anticipated in the first half of 2017.

Additional data from the Phase 2 study of tipifarnib in HRAS mutant tumors is anticipated in the first half of 2017.
Financial Results for the Third Quarter 2016

Cash, cash equivalents and short-term investments totaled $74.6 million as of September 30, 2016, compared with $85.7 million as of December 31, 2015. Management expects that current cash, cash equivalents and short-term investments will be sufficient to fund current operations into 2018.

Research and development expenses for the third quarter of 2016 were $5.3 million, compared to $4.6 million for the third quarter of 2015.

General and administrative expenses for the third quarter of 2016 were $1.7 million, compared to $1.8 million for the third quarter of 2015.

Net loss for the third quarter of 2016 was $6.9 million, or $0.37 per share, compared to a net loss of $6.1 million, or $0.57 per share, for the third quarter of 2015.