On November 2, 2016 CombiMatrix Corporation (NASDAQ:CBMX), a family health molecular diagnostics company specializing in DNA-based reproductive health and pediatric testing services, reported financial results for the three and nine months ended September 30, 2016, and provided a business update (Press release, CombiMatrix, NOV 2, 2016, View Source [SID1234516186]).

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"Excellent execution on our business initiatives keeps us squarely on the path to profitability," said Mark McDonough, CombiMatrix President and CEO. "Among quarterly financial highlights, we are reporting revenue growth of 29%, our third consecutive quarter of gross margin above 50% and record cash reimbursement of $3.1 million, or 95% of total revenues. Combined with our ability to manage expenses, we reduced both our operating loss and our cash burn by nearly half from one year ago.

"We are pleased with our recent performance and expect continued growth in revenue and test volume, along with consistent cash reimbursement and prudent expense management in the coming year with a focus on creating value for our shareholders," Mr. McDonough added. "Given our outlook, we are increasingly confident we will reach our goal of positive cash flow from operations by the fourth quarter of 2017."

Third Quarter Financial and Operating Highlights (all comparisons are with the third quarter of 2015)

Total revenues of $3.2 million, up 29%
Total test volume of 2,835, up 14%
Reproductive health revenues of $2.3 million, up 39%
Reproductive health test volume of 1,483, up 17%
Gross margin of 54.0%, up from 43.6%
Number of billable customers of 257, up 10%
Cash collections at new record of $3.1 million, or 95% of total revenue, up 29%

Volumes Revenues (in 000’s)
Q3 ’16 Q3 ’15 # Δ % Δ Q3 ’16 Q3 ’15 $ Δ % Δ
Prenatal 294 272 22 8 % $ 408 $ 368 $ 40 11 %
Miscarriage analysis 990 866 124 14 % 1,622 1,145 477 42 %
PGS 199 127 72 57 % 286 149 137 92 %
Subtotal – reproductive health 1,483 1,265 218 17 % 2,316 1,662 654 39 %
Pediatric 505 509 (4 ) (1 %) 589 558 31 6 %
Subtotal 1,988 1,774 214 12 % 2,905 2,220 685 31 %
FISH and karyotyping 847 721 126 17 % 306 261 45 17 %
Total – all tests 2,835 2,495 340 14 % 3,211 2,481 730 29 %
Royalties 37 45 (8 ) (18 %)
Total revenues $ 3,248 $ 2,526 $ 722 29 %


Volumes Revenues (in 000’s)
9 Mo’s. ’16 9 Mo’s. ’15 # Δ % Δ 9 Mo’s. ’16 9 Mo’s. ’15 $ Δ % Δ
Prenatal 860 936 (76 ) (8 %) $ 1,203 $ 1,214 $ (11 ) (1 %)
Miscarriage analysis 2,886 2,664 222 8 % 4,701 3,467 1,234 36 %
PGS 566 157 409 261 % 759 189 570 302 %
Subtotal – reproductive health 4,312 3,757 555 15 % 6,663 4,870 1,793 37 %
Pediatric 1,454 1,557 (103 ) (7 %) 1,646 1,687 (41 ) (2 %)
Subtotal 5,766 5,314 452 9 % 8,309 6,557 1,752 27 %
FISH and karyotyping 2,497 2,125 372 18 % 881 735 146 20 %
Total – all tests 8,263 7,439 824 11 % 9,190 7,292 1,898 26 %
Royalties 137 112 25 22 %
Total revenues $ 9,327 $ 7,404 $ 1,923 26 %

Financial Results

Three Months Ended September 30, 2016 and 2015

Total revenues for the third quarter of 2016 increased 29% to $3.2 million from $2.5 million for the third quarter of 2015. Reproductive health diagnostic test revenue, which includes prenatal microarrays, miscarriage analysis and preimplantation genetic screening (PGS), increased 39% to $2.3 million and testing volume increased 17% to 1,483. The third quarter 2016 revenue increase was driven primarily by higher test volume for reproductive health diagnostics, higher average revenue per test particularly for miscarriage analysis and PGS tests, and from an increase in the number of billable customers, which reached 257 during the third quarter of 2016 compared to 234 in the prior-year period.

Total operating expenses were $4.1 million for the third quarter of 2016 compared with $4.2 for the prior-year period. The decrease was due primarily to lower sales and marketing and research and development expenses, partially offset by higher general and administrative expenses due to higher personnel, investor relations and consulting costs and higher cost of services as a result of higher test volume. Gross margin for the third quarter of 2016 improved to 54.0% from 43.6% for third quarter of 2015.

The net loss attributable to common stockholders for the third quarter of 2016 was $856,000, or $0.38 per share, compared with a net loss attributable to common stockholders for the third quarter of 2015 of $1.7 million, or $2.00 per share, an improvement of $831,000.

Nine Months Ended September 30, 2016 and 2015

Total revenues for the first nine months of 2016 increased 26% to $9.3 million from $7.4 million for the first nine months of 2015. Revenues for the first nine months of 2016 included $9.2 million in diagnostic services revenue and $137,000 in royalty revenues.

Operating expenses for the first nine months of 2016 were $12.9 million compared with $12.4 million for the prior-year period, with the increase mainly due to higher general and administrative expenses and higher cost of services resulting from increased testing volumes, partially offset by lower sales and marketing expenses. Gross margin improved to 52.9% for the first nine months of 2016 from 44.8% for the first nine months of 2015.

The net loss attributable to common stockholders for the first nine months of 2016 was $5.2 million, or $3.48 per share, compared to $6.0 million, or $7.21 per share in 2015. The net loss attributable to common stockholders in 2016 reflected one-time, non-cash charges of $1.9 million related to deemed dividends from the issuance of Series F convertible preferred stock and warrants in the $8.0 million public offering that closed on March 24, 2016. This increase was partially offset by the reversal of the $890,000 Series E deemed dividend recognized in 2015 from the repurchase of those securities upon closing of our Series F public offering, partially reduced by the $656,000 deemed dividend paid to the Series E investors in February of 2016.

The Company reported $4.3 million in cash, cash equivalents and short-term investments as of September 30, 2016, compared with $3.9 million as of December 31, 2015. The Company used $813,000 and $3.4 million in cash to fund operating activities during the quarter and nine months ended September 30, 2016, respectively, compared with $1.5 million and $4.2 million used to fund operating activities during the comparable 2015 periods, respectively. The significant decreases in net cash used to fund operating activities for the 2016 periods resulted primarily from improved cash reimbursement of $3.1 million and $8.5 million for the three and nine months ended September 30, 2016, respectively, compared with $2.4 million and $7.0 million for the three and nine months ended September 30, 2015, respectively.

On November 2, 2016 Ocera Therapeutics, Inc. (NASDAQ:OCRX), a clinical stage biopharmaceutical company focused on acute and chronic orphan liver diseases, reported financial results for the quarter ended September 30, 2016, and provided updates on its clinical development programs of OCR-002 for the treatment of hepatic encephalopathy (HE), a debilitating liver disorder and significant burden on the healthcare system (Press release, Ocera Therapeutics, NOV 2, 2016, View Source [SID1234516192]).

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"We are pleased to report significant progress in our clinical programs. Enrollment in our STOP-HE Phase 2b study for acute hepatic encephalopathy has now surpassed 220 patients and, consistent with previous guidance, we expect to complete full enrollment of approximately 230 patients by year-end and publish top-line results of the study in the first quarter of 2017," said Linda Grais, M.D., Chief Executive Officer of Ocera. "In addition, dosing has commenced with our oral formulation of OCR-002 in a Phase 1 study in patients with cirrhosis as a chronic use option to maintain remission of HE. We remain on track to report results of part one of this study by year-end and initiate part two in the first half of 2017."

Select Third Quarter Financial Results

As of September 30, 2016, Ocera had cash, cash equivalents and investments of $32.5 million.
Net loss for the three and nine months ended September 30, 2016 was $7.1 million and $21.7 million, respectively. Net loss for the three and nine months ended September 30, 2015 was $6.6 million and $19.4 million, respectively. Basic and diluted net loss per share for the three and nine months ended September 30, 2016 was $0.32 and $1.01, respectively. Basic and diluted net loss per share for the three and nine months ended September 30, 2015 was $0.33 and $0.98, respectively.
Research and development (R&D) expense for the three months ended September 30, 2016 was $4.3 million, compared to $4.2 million for the same period in 2015. R&D expense for the nine months ended September 30, 2016 was $12.9 million, compared to $12.0 million for the same period in 2015. The increase in R&D expense for both the three and nine month periods was due primarily to an increase in headcount and related costs.
General and administrative (G&A) expense for the three months ended September 30, 2016 was $2.6 million, compared to $2.4 million for the same period in 2015. G&A expense for the nine months ended September 30, 2016 was $8.1 million, compared to $7.5 million for the same period in 2015. The increase in G&A expense for the three and nine month periods was due primarily to an increase in personnel-related costs, including stock-based compensation expense, as well as costs associated with professional service fees.
Net interest expense of $262,000 and $758,000 for the three and nine months ended September 30, 2016, respectively, was primarily attributable to interest and amortization associated with the debt facility which closed in July 2015.
Net cash proceeds generated from the Company’s "at the market" equity facility totaled approximately $6.0 million for the nine month period ended September 30, 2016.
Financial Guidance

Ocera reiterates its previous guidance and expects net use of cash for 2016 to be in the range of $22 million to $26 million, and updates its expectation that it will have sufficient cash to fund operations into the first quarter of 2018 based on its current operating plan. The Company previously estimated its cash runway into the fourth quarter of 2017. This improvement in projected cash runway is due primarily to the deferral of certain external development costs for OCR-002, lower than expected internal operating expenses, and cash proceeds generated from the "at the market" equity facility.

On November 2, 2016 Foundation Medicine, Inc. (NASDAQ:FMI) reported financial and operating results for its third quarter ended September 30, 2016 (Press release, Foundation Medicine, NOV 2, 2016, View Source [SID1234516193]). Highlights for the quarter included:

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Achieved third quarter revenue of $29.4 million, 16% year-over-year growth;
Reported 11,627 clinical tests in the third quarter, 45% year-over-year growth;
Grew FoundationCORE, the company’s molecular information knowledgebase, to nearly 100,000 patient cases;
Announced acceptance of FoundationOne for Parallel Review by FDA and CMS. If approved, FoundationOne could be the first FDA-approved comprehensive genomic profiling (CGP) assay to incorporate multiple companion diagnostics to support precision medicine in oncology and would be offered as a covered benefit to Medicare beneficiaries nationwide;
Added new immunotherapy clinical markers, Tumor Mutational Burden (TMB) and Microsatellite Instability (MSI), to FoundationOne and FoundationOne Heme to help guide personalized immunotherapy-based treatment plans;
Published an additional 17 manuscripts in high-quality, peer-reviewed journals and delivered six podium and poster presentations at various medical and scientific meetings providing further evidence for the clinical impact of integrating CGP into routine cancer care;
Expanded patient access to CGP through Palmetto, the Medicare Administrative Contractor in North Carolina, who broadened a Local Coverage Determination, covering CGP for all stage IIIB and IV non-small cell lung cancer (NSCLC) patients at diagnosis by removing a patient’s smoking status as a coverage factor.
Foundation Medicine reported total revenue of $29.4 million in the third quarter of 2016, compared to $25.4 million in the third quarter of 2015. Revenue from biopharmaceutical partners grew 77% to $20.7 million in the third quarter of 2016, compared to $11.7 million in the third quarter of 2015. The increase in revenue demonstrates the company’s leading role in molecular information and the value of this information in informing and accelerating drug development for its oncology focused biopharmaceutical customers.

Revenue from clinical testing in the third quarter of 2016 was $8.7 million, compared to $13.7 million in the third quarter of 2015. The decrease was driven by various factors, the most significant of which was the transition in-network with a large national payer for stage IV NSCLC testing, which resulted in the termination of payments for testing in other indications.

The company reported 11,627 clinical tests in the third quarter of 2016, a 45% increase from the same quarter last year. This reported volume number includes 9,398 FoundationOne tests, 1,325 FoundationOne Heme tests and 904 FoundationACT tests.

"Foundation Medicine delivered another solid quarter highlighted by strong biopharma revenue and record clinical testing volume," said Michael Pellini, M.D., chief executive officer of Foundation Medicine. "We believe our progress on building distinct, yet synergistic clinical and biopharma businesses, developing applications that enable patient access to therapies and clinical trials, aggressively working towards reimbursement coverage and payment for our comprehensive genomic profiling assays and pursuing parallel review with FDA and CMS for FoundationOne will drive continued growth and value creation."

The company’s molecular information knowledgebase, FoundationCORE, grew to nearly 100,000 patient cases at the end of the third quarter. FoundationCORE is a unique asset and critical component of the value that Foundation Medicine delivers to its biopharmaceutical and physician customers. The increasing scale and breadth of this high quality, clinically relevant oncology data set derived from the company’s testing platform continues to enhance clinical practice and help enable improved outcomes for patients.

Total operating expenses for the third quarter of 2016 were approximately $44.9 million compared with $35.6 million for the third quarter of 2015. Net loss was approximately $31.3 million in the third quarter of 2016, or a $0.90 loss per share. At September 30, 2016, the company held approximately $167.9 million in cash, cash equivalents and marketable securities.

Recent Enterprise Highlights

Announced a collaboration with Sarah Cannon Research Institute (SCRI) in which SCRI will utilize Foundation Medicine’s full suite of assays to accelerate patient enrollment into clinical trials and facilitate data sharing across its network in the U.S.
Selected as the molecular information provider of choice by The Leukemia & Lymphoma Society for its landmark Beat AML Master Trial, a prospective study aimed at delivering a precision medicine approach to treat newly diagnosed Acute Myeloid Leukemia patients.
Announced the election of life sciences leader, Michael R. Dougherty, to its Board of Directors and the Board’s Audit Committee. Mr. Dougherty joins as an independent director and fills an existing vacancy on the Board.
2016 Outlook

Foundation Medicine’s business and financial outlook for 2016 is the following:

The company continues to expect 2016 revenue will be in the range of $110 to $120 million.
The company is increasing the bottom-end of its clinical volume guidance range and now expects to deliver between 40,000 and 41,000 FoundationOne and FoundationOne Heme clinical tests in 2016.
The company continues to expect operating expenses will be in the range of $175 and $185 million.

On November 2, 2016 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported financial results for the third quarter ended September 30, 2016 (Press release, NanoString Technologies, NOV 2, 2016, View Source [SID1234516304]).

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Third Quarter Financial Highlights

Total revenue of $23.9 million, 53% year-over-year growth
Total product and service revenue of $19.2 million, 38% year-over-year growth
Consumables revenue of $11.5 million, including $1.1 million of Prosigna IVD kits, 27% year-over-year growth
Instrument revenue of $6.9 million, 62% year-over-year growth
Collaboration revenue of $4.8 million
"We continued to execute well during the third quarter, generating strong growth across our business while advancing our product pipeline and partnerships," said president and chief executive officer Brad Gray. "A highlight of the quarter was the robust demand for our nCounter SPRINT Profiler, which helped drive 62% year-on-year growth in instrument revenue and validated that SPRINT’s ability to reach new customers is accelerating instrument placement."

Recent Business Highlights

Grew installed base to approximately 450 nCounter Analysis Systems at September 30, 2016
Launched new nCounter Vantage 3D Solid Tumor Panels for proteins and single nucleotide variations to enable simultaneous analysis of DNA mutations, messenger RNA, fusion genes, and proteins on a single platform
Presented data demonstrating the potential workflow advantages of Hyb & Seq sequencing chemistry, requiring less than 60 minutes of sample processing to enable initiation of a sequencing run
Appointed Kirk Malloy, Ph.D., seasoned life sciences executive, to the company’s board of directors
Third Quarter Financial Results

Revenue for the three months ended September 30, 2016 increased by 53% to $23.9 million, as compared to $15.7 million for the third quarter of 2015. Instrument revenue was $6.9 million, up 62% versus the prior year period, with nCounter SPRINT systems representing approximately half of systems sold. Consumables revenue, excluding Prosigna, was $10.3 million for the third quarter of 2016, 23% higher than in the comparable 2015 quarter. Prosigna IVD kit revenue was $1.1 million for the quarter, an increase of 73% over the third quarter of 2015. Collaboration revenue totaled $4.8 million, compared to $1.8 million for the third quarter of 2015. Gross margin on product and service revenue was 58% for the third quarter of 2016, up from 55% for the prior year period.

Research and development expense increased by 50% to $8.7 million for the third quarter of 2016 versus $5.8 million for the third quarter of 2015, reflecting increased costs associated with biopharma collaborations announced earlier this year and new products and technologies under development for the life science research market. Selling, general and administrative expense increased by 30% to $15.6 million for the third quarter of 2016 compared to $12.0 million for the prior year period.

Net loss for the three months ended September 30, 2016 increased to $10.1 million, or a loss of $0.51 per share, compared with $9.5 million, or a loss of $0.49 per share, for the third quarter of 2015.

Outlook for 2016

The company’s financial outlook for 2016 is unchanged, and includes:

Total revenue in the range of $89 million to $93 million
Gross margin on product and service revenues in the range of 54% to 55%
Operating expenses in the range of $94 million to $99 million
Operating loss in the range of $37 million to $40 million
Net loss per share in the range of $2.15 to $2.30
Cash from collaborations in 2016 in the range of $40 million to $45 million

On November 1, 2016 Rigel Pharmaceuticals, Inc. (Nasdaq:RIGL) reported financial results for the third quarter and nine months ended September 30, 2016 (Filing, Q3, Rigel, 2016, NOV 1, 2016, View Source [SID1234516160]).

During the third quarter of 2016, Rigel accomplished a number of noteworthy milestones, most importantly, the announcement of topline results for its FIT Phase 3 clinical studies of fostamatinib in ITP. Additionally, the company undertook a restructuring to focus resources on building a commercial enterprise, and appointed executive-level members to the management team that will move Rigel forward toward its goals.

"We believe that the collective data from the FIT Phase 3 clinical program of fostamatinib support a clear treatment effect, a sustained clinical benefit and a positive benefit-risk profile," said Raul Rodriguez, president and chief executive officer of Rigel. "We look forward to discussing the top-line FIT program results with the FDA in the very near future, and obtaining their feed-back on our plan to submit an NDA. Assuming a successful discussion, we expect to submit the NDA in the first quarter of 2017."

For the third quarter of 2016, Rigel reported a net loss of $22.6 million, or $0.24 per basic and diluted share, compared to a net loss of $6.7 million, or $0.08 per basic and diluted share, in the same period of 2015.

Contract revenues from collaborations of $3.8 million in the third quarter of 2016 represent the remaining amortization of the $30.0 million upfront payment pursuant to Rigel’s collaboration and license agreement with Bristol-Myers Squibb (BMS). Contract revenues from collaborations of $13.0 million in the third quarter of 2015 were primarily comprised of an $8.0 million upfront payment from Aclaris Therapeutics International Limited pursuant to the license agreement executed in August 2015 for the development and commercialization of certain Rigel JAK inhibitors, as well as $4.8 million from the amortization of the upfront payment with BMS.

In September 2016, Rigel announced that it had reduced its workforce by 46 positions, mostly in the research area. Rigel recorded restructuring charges during the third quarter of 2016 of approximately $5.8 million, which included $5.0 million of severance costs paid or to be paid in cash, $319,000 impairment of certain property and equipment, and $499,000 of non-cash stock-based compensation expense as a result of the modification of Rigel’s former executive’s stock options.

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Rigel reported total costs and expenses of $26.5 million in the third quarter of 2016, compared to $19.8 million for the same period in 2015. The increase in costs and expenses was primarily due to restructuring charges incurred in the third quarter of 2016.

For the nine months ended September 30, 2016, Rigel reported a net loss of $53.6 million, or $0.58 per basic and diluted share, compared to a net loss of $38.8 million, or $0.44 per basic and diluted share, for the same period of 2015.

As of September 30, 2016, Rigel had cash, cash equivalents and short-term investments of $85.3 million, compared to $126.3 million as of December 31, 2015. Rigel expects this amount to be sufficient to fund its operations through the end of 2017. In this forecast, Rigel has allocated substantial funds to continue efforts in preparation of the potential commercial launch of fostamatinib in ITP in the U.S. Rigel also continues to evaluate ex-U.S. partnerships for fostamatinib and other partnering opportunities across its pipeline.

Company and Portfolio Update

Fostamatinib FIT Phase 3 Program

In August and October 2016, respectively, Rigel announced results of two identical Phase 3 clinical studies, FIT 1 (Study 047) and FIT 2 (Study 048), of fostamatinib in adult chronic/persistent immune thrombocytopenia (ITP). Study 047 met the primary endpoint in a statistically significant manner, with 18% of the patients in the fostamatinib arm achieving stable platelet response of greater than 50,000 platelets per μL of blood on at least four of the last scheduled visits between weeks 14 and 24 of treatment and no patients on placebo meeting the stable platelet response criteria (p=0.0261). Study 048, which also had an 18% responder rate for the fostamatinib subjects, did not achieve a statistically significant distinction between the treatment and placebo cohorts (p=0.15) because a single placebo patient met the stable platelet response criteria. When the data from the two studies are combined (n=150), the difference between the fostamatinib and placebo groups would be statistically significant (p=0.007).

Rigel also announced in October 2016 that as of June 2016, the open-label long-term extension study (Study 049), was tracking the experience of 118 patients who opted to receive treatment with fostamatinib after completing either Study 047 or Study 048. Patients who responded to fostamatinib in the parent studies had achieved a median platelet count of 96,000/μL in Study 049. In addition, there were 36 patients out of 43 who were placebo non-responders in the parent studies who had a minimum of 12 weeks of follow-up in the extension study. Of those, 6 patients (17%) have achieved a prospectively defined stable platelet response, which is statistically significant and similar to the response rate fostamatinib achieved in the parent studies.

Rigel believes that the data from the FIT Phase 3 clinical program (comprised of Study 047, 048 and 049) demonstrate that fostamatinib works effectively for some ITP patients, providing a substantial and enduring clinical benefit in a disease that has proven difficult to manage for many physicians and patients. This benefit was consistent across all sub-groups analyzed including TPO (blood platelet production booster) experienced patients who have limited treatment options remaining.

Rigel is continuing its work on compiling the NDA, which it plans to file in the first quarter of 2017, pending positive feedback from discussions of the data with the FDA.

Restructuring to Focus on Commercialization

Following the release of the results for Study 047, Rigel announced a restructuring and plans to build a commercial organization to support the potential launch of fostamatinib. The restructuring reduced the size of the research department while maintaining Rigel’s most advanced and promising projects. The savings from the restructuring will be devoted to support the commercialization of the company’s first potential drug product as well as extending the company’s financial runway.

As part of the restructuring announcement in September, the first of Rigel’s new management team members was introduced; Eldon Mayer joined the company as its first chief commercial officer. Mr. Mayer will be responsible for establishing and managing a commercial organization that will lead the launch of fostamatinib. He brings pharmaceutical marketing and sales management experience to Rigel, having most recently led Questcor Pharmaceuticals’ commercial strategy and operations.

This quarter Rigel made additional key senior management appointments to drive the organization forward. Esteban Masuda, Ph.D. was appointed senior vice president research and will lead Rigel’s refocused research efforts. Joe Lasaga was appointed vice president business development and alliance management and will lead Rigel’s effort to partner certain assets including ex-U.S. partnerships for fostamatinib.

Clinical Portfolio Update

Fostamatinib Phase 2 Study in IgA Nephropathy (IgAN)

Rigel is conducting a global Phase 2, double blind, placebo-controlled study of fostamatinib in IgAN consisting of two sequential dose cohorts (100mg BID, followed by 150 mg BID). Enrollment for the first cohort has been completed and the company expects to report those results by the end of 2016. The second cohort is currently enrolling patients.

Fostamatinib Phase 2 Study in Autoimmune Hemolytic Anemia (AIHA)

Rigel is conducting a Phase 2, open-label, multi-center, two-stage study that will evaluate the safety and efficacy of fostamatinib in patients with warm antibody AIHA who have previously received treatment for the disorder, but have relapsed. Results of the Stage 1 segment of the trial are expected in 2017.