On August 3, 2016 ArQule, Inc. (Nasdaq: ARQL) reported its financial results for the second quarter of 2016 (Press release, ArQule, AUG 3, 2016, View Source [SID:1234514200]).

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For the quarter ended June 30, 2016, the Company reported a net loss of $5,100,000 or $0.07 per share, compared with a net loss of $4,017,000 or $0.06 per share, for the second quarter of 2015. For the six-month period ended June 30, 2016, the Company reported a net loss of $10,081,000 or $0.15 per share, compared with a net loss of $8,568,000 or $0.14 per share, for the six-month period ended June 30, 2015.

At June 30, 2016, the Company had a total of approximately $43,115,000 in cash, equivalents and marketable securities.

Key Highlights

ARQ 087, our proprietary FGFR inhibitor, demonstrated strong anticancer activity in an ongoing phase 1/2 trial in intrahepatic cholangiocarcinoma (iCCA), a rare form of liver cancer. A 75% disease control rate, including a 25% objective response rate, was observed from the preliminary data presented at the 2016 ESMO (Free ESMO Whitepaper) GI Congress. Since the Congress presentation, a fourth partial response has been observed.
ARQ 531, our proprietary and novel BTK inhibitor, demonstrated in preclinical studies that it is a potent and reversible inhibitor of both wild type and ibrutinib resistant C481S-mutant BTK. In preclinical testing, ARQ 531 demonstrated biochemical inhibition of both wild type and C481S-mutant BTK at sub-nanomolar levels and potent cellular inhibition in C481S-mutant BTK cells that are resistant to ibrutinib. These data were presented at the 2016 Pan Pacific Lymphoma Conference in July marking the first public showing of data on this potential best-in-class molecule.
ARQ 092, our lead AKT inhibitor, continues in the phase 1 trial for Proteus syndrome. The three patients enrolled in the first cohort are approaching nine months of therapy.
Tivantinib – METIV-HCC phase 3 trial in hepatocellular carcinoma is scheduled to conclude by year-end 2016 or early 2017. Top-line data is expected according to that timeline.
"We are starting to realize the benefits of our precision medicine strategy through the advancement of our proprietary pipeline as evidenced by the strong clinical data recently presented at ESMO (Free ESMO Whitepaper) GI for ARQ 087 in iCCA, the initiation of a biomarker driven phase 1 trial for our next generation AKT inhibitor, ARQ 751, and the emerging preclinical profile of our novel BTK inhibitor, ARQ 531, recently presented at the Pan Pacific Lymphoma Conference," said Paolo Pucci, Chief Executive Officer of ArQule. "While AKT and FGFR are emerging targets, with ARQ 531 we have the opportunity to work in a well-established target such as BTK and to address a growing therapeutic need of patients who develop resistance to ibrutinib. We look forward to sharing additional data on ARQ 087, ARQ 092 and ARQ 531 later this year."

"With the four partial responses recorded thus far in the iCCA trial, we are nearing a decision for the next stage of clinical development for ARQ 087 and expect to meet with regulatory authorities in the near future," said Dr. Brian Schwartz, M.D., Head of Research and Development and Chief Medical Officer at ArQule. "The initiation of a pivotal biomarker driven trial in iCCA with FGFR2 genetic alterations would create an opportunity for a fast-to-market strategy in this orphan disease. With clear signs of clinical utility and a manageable safety profile, ARQ 087 has the potential to become a best-in-class compound."

Revenues and Expenses

Revenues for the quarter ended June 30, 2016, were $1,072,000 compared with revenues of $3,004,000 for the quarter ended June 30, 2015. Revenues in the six-months ended June 30, 2016 were $2,299,000 compared with revenues of $5,789,000 in the six-months ended June 30, 2015. Revenue in the three and six-month periods of 2016 and 2015 is comprised of revenue from the Daiichi Sankyo tivantinib development agreement and the Kyowa Hakko Kirin exclusive license agreement.

The revenue decreases in the quarter ended June 30, 2016 of $1.0 million from our Daiichi Sankyo METIV-HCC trial and $0.9 million from our Kyowa Hakko Kirin JET-HCC trial were principally due to the March 2016 extension of the development period through December 31, 2016 for both programs. The revenue decreases in the six months ended June 30, 2016 of $1.6 million from our Daiichi Sankyo METIV-HCC trial and $1.9 million from our Kyowa Hakko Kirin JET-HCC trial were also principally due to the extension of the development period through December 31, 2016.

Research and development expense in the second quarter of 2016 was $4,337,000, compared with $4,327,000 for the second quarter of 2015. The increase in outsourced clinical and product development costs of $0.4 million in the second quarter of 2016 was offset by lower labor and related costs of $0.3 million and facility costs reductions of $0.1 million.

Research and development expense in the six-months ended June 30, 2016 was $8,535,000 compared with $8,740,000 in the six-months ended June 30, 2015. The $0.2 million decrease in research and development expense in the six-months ended June 30, 2016 was primarily due to lower labor and related costs of $0.5 million, facility costs of $0.5 million, partially offset by increased outsourced clinical and product development costs of $0.8 million.

General and administrative expense was $1,887,000 in the second quarter of 2016 compared with $2,776,000 in the second quarter 2015. General and administrative expense decreased by $0.9 million in the second quarter of 2016 primarily due to lower facility costs of $0.7 million and professional fees of $0.2 million.

General and administrative expense was $3,931,000 in the six-months ended June 30, 2016 compared with $5,963,000 in the six-months ended June 30, 2015. General and administrative expense decreased by $2.0 million in the six-months ended June 30, 2016 primarily due to lower facility costs of $1.6 million, labor related costs of $0.2 million and professional fees of $0.2 million.

On August 03, 2016 Insys Therapeutics, Inc. (NASDAQ:INSY) ("Insys" or "the Company") reported financial results for the three-month period ended June 30, 2016 (Press release, Insys Therapeutics, AUG 3, 2016, View Source;p=RssLanding&cat=news&id=2192279 [SID:1234514202]).

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Highlights of and subsequent to the second quarter of 2016 include:

Total net revenue was $67.1 million, compared to $77.6 million for the second quarter of 2015;

Net income totaled $4.4 million, or $0.06 per basic and $0.06 per diluted share, compared to net income of $7.3 million, or $0.10 per basic and $0.10 per diluted share, for the second quarter of 2015;

Cash, cash equivalents and investments were $193.7 million as of June 30, 2016; and

Insys received FDA approval for the marketing of SyndrosTM (dronabinol oral solution), a proprietary, orally administered liquid formulation of dronabinol.
"We are pleased that despite the recent drop-off in volume, Subsys has maintained an approximately 44% market share. We believe that Subsys will continue to provide a very solid financial foundation for the Company, and we remain focused on restoring Subsys scripts to a growth path," said Dr. John N. Kapoor, Chairman, President and Chief Executive Officer of Insys Therapeutics. "The recent FDA approval to market Syndros is excellent news. We are eager to expand our commercial portfolio with a product that we believe has distinct advantages over the current formulation of dronabinol in soft gel capsule and one that will provide significant long-term growth opportunities for Insys. We are proud of our pipeline and believe that product candidates in both sprays and cannabinoids hold great promise. As always, we remain committed to serving the patients who rely on our compounds, while striving to deliver value to Insys stockholders," he concluded.

Second Quarter 2016 Financial Results

Net revenue for the second quarter of 2016 was $67.1 million compared to $77.6 million for the second quarter of 2015, a decrease of 13.5%. The results reflect a decline in Subsys prescription volumes due to softness in overall demand in the TIRF category, including Subsys, and continued pressure from third-party payers.

Gross margin was 91% for the second quarter of 2016 compared with 89% for the comparable quarter of 2015.

Sales and marketing expense was $19.7 million during the second quarter of 2016, or 29% of net revenue, compared to $22.0 million, or 28% of net revenue, for the second quarter of 2015.

Research and development expense increased to $22.9 million for the second quarter of 2016, compared to $17.8 million for the second quarter of 2015, as we continue to advance the multistage products in our pipeline.

General and administrative expense decreased to $13.9 million for the second quarter of 2016, down from $15.3 million for the second quarter of 2015.

Income tax expense was $240,000 for the second quarter of 2016, compared to $4.8 million during the second quarter of 2015.

Net income for the second quarter of 2016 was $4.4 million, or $0.06 per basic and $0.06 per diluted share, compared to net income of $7.3 million, or $0.10 per basic and $0.10 per diluted share, for the second quarter of 2015. Non-GAAP adjusted net income for the second quarter of 2016 was $9.5 million, or $0.13 per diluted share, compared to non-GAAP adjusted net income of $15.6 million, or $0.21 per diluted share, in the prior-year quarter. The reconciliation of net income to non-GAAP adjusted net income is included at the end of this press release.

Liquidity

The Company had $193.7 million in cash, cash equivalents, and short-term and long-term investments, no debt, and $259 million in stockholders’ equity as of June 30, 2016.

On August 03, 2016 Mateon Therapeutics, Inc. (Nasdaq:MATN), a biopharmaceutical company developing vascular disrupting agents (VDAs) for the treatment of orphan oncology indications, reported a corporate update and reported financial results for the second quarter of 2016 (Press release, Mateon Therapeutics, AUG 3, 2016, View Source [SID:1234514204]).

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Recent Corporate Highlights

Presented new data reflecting improved survival outcomes for CA4P-treated patients from Study GOG-0186I at an investor event in New York. These data showed an improvement of 5.6 months in overall survival and 3.7 months in progression-free survival in patients with measurable disease.
Published positive results from Study GOG-0186I, an open-label randomized Phase 2 study evaluating CA4P in recurrent ovarian cancer, in the Journal of Clinical Oncology, the official journal of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper).
Announced name change to Mateon Therapeutics, Inc. to reflect the Company’s new focus on combination vascular targeted therapy in orphan oncology indications.
Initiated the FOCUS Study, a Phase 2/3 clinical trial of CA4P in combination with bevacizumab (Avastin) and chemotherapy, for the treatment of patients with platinum-resistant ovarian cancer.
Enrolled the first patient into the Phase 2 portion of the PAZOFOS Study, a Phase 1b/2 clinical trial of CA4P in combination with pazopanib (Votrient), in patients with recurrent ovarian cancer.
Received orphan drug designation for CA4P for the treatment of glioma from the U.S. Food and Drug Administration (FDA).
Completed enrollment of the first cohort and initiated the second cohort of OX1222, an open-label dose ranging study of OXi4503 in combination with cytarabine, in patients with relapsed/refractory acute myeloid leukemia (AML).
"We have accomplished a great deal over the last several months and believe we are well-positioned for long-term success," said William D. Schwieterman, M.D., Mateon’s President and Chief Executive Officer. "Most importantly, we announced significant new overall survival and progression-free survival findings from the Phase 2 GOG-0186I Study. I am confident in our strategic direction, pleased with the continued development of our clinical pipeline and look forward to creating long-term shareholder value."

Financial Results for the Second Quarter of 2016

For the second quarter of 2016, Mateon reported a net loss of $3.6 million compared to a net loss of $3.3 million for the second quarter of 2015. R&D expenses increased to $2.4 million in the second quarter of 2016, compared to $2.0 million in the second quarter of 2015, while general and administrative expenses were $1.3 million for both the second quarter of 2016 and the second quarter of 2015.

At June 30, 2016, Mateon had cash, cash equivalents and short-term investments of $19.3 million, which the Company currently believes is sufficient to fund operations through the availability of key clinical data from the FOCUS Study, expected in the second half of 2017.

On August 3, 2016 Nektar Therapeutics (Nasdaq: NKTR) reported its financial results for the second quarter ended June 30, 2016 (Press release, Nektar Therapeutics, AUG 3, 2016, View Source [SID:1234514207]).

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Cash and investments in marketable securities at June 30, 2016 were $274.9 million as compared to $308.9 million at December 31, 2015. This balance includes the $28.0 million payment received from AstraZeneca in April of 2016 for the sublicense of MOVENTIG (naloxegol) to ProStraken in Europe. The balance does not include the $20 million upfront payment for the licensing of European rights for ONZEALD to Daiichi Sankyo Europe, which occurred in Q2 2016.

"We continue to execute on the development and business objectives for Nektar," said Howard W. Robin, President and CEO of Nektar. "Following our licensing agreement with Daiichi Sankyo Europe, the MAA for ONZEALD was accepted by the EMA in July, and with an accelerated assessment review granted by the CHMP, we expect a decision on the recommendation for conditional approval in Q1 2017. Our Phase 3 study of NKTR-181 in patients with chronic low back pain has now completed enrollment and is on track to have topline data in the first quarter of 2017. Finally, NKTR-214 continues to advance in its Phase 1/2 study in cancer patients at MD Anderson and Yale Cancer Centers, with initial topline data expected before the end of this year. As the first medicine designed to selectively stimulate the in vivo growth of endogenous tumor-killing T cells and natural killer cells within the tumor micro-environment, we are extremely excited about the potential of NKTR-214 to transform the immuno-oncology landscape."

Year-to-date revenue for 2016 was $91.6 million as compared to $131.5 million in the first half of 2015. Revenue in 2016 included recognition of the $28.0 million cash payment received from AstraZeneca for the sublicense of MOVENTIG (naloxegol) to ProStrakan (Kyowa Kirin) in Europe. In addition, product sales, royalty revenue, and non-cash royalty revenue increased in the first half of 2016 compared to the first half of 2015. Revenue in the first half of 2015 included recognition of $90.0 million of the $100.0 million milestone payment from AstraZeneca following the first commercial sale of MOVANTIK in the U.S. in Q1 2015. Revenue in the second quarter of 2016 was $32.8 million as compared to $22.7 million in the second quarter of 2015.

Revenue included non-cash royalty revenue, related to our 2012 royalty monetization, of $8.1 million and $14.7 million in the second quarter and first half of 2016, respectively, and $4.7 million and $8.7 million in the second quarter and first half of 2015, respectively. This non-cash royalty revenue is offset by non-cash interest expense incurred in connection with the 2012 royalty monetization of $5.0 million and $10.0 million in the second quarter and first half of 2016, respectively and $5.2 million and $10.2 million in the second quarter and first half of 2015, respectively.

Total operating costs and expenses in the first half of 2016 were $139.5 million as compared to $131.9 million in the first half of 2015. Total operating costs and expenses in the second quarter of 2016 were $71.1 million as compared to $66.1 million in the second quarter of 2015. Total operating costs and expenses increased primarily as a result of increased research and development (R&D) expense.

Research and development expense in the second quarter of 2016 was $52.4 million as compared to $45.4 million in the second quarter of 2015. For the first half of 2016, R&D expense was $101.6 million as compared to $92.4 million in the first half of 2015. R&D expense was higher in the second quarter and first half of 2016 as compared to the same periods in 2015 primarily due to expenses for the NKTR-181 Phase 3 studies and the initiation of the Phase 1/2 study of NKTR-214.

General and administrative expense was $11.0 million in the second quarter of 2016 as compared to $10.2 million in the second quarter of 2015. G&A expense in the first half of 2016 was $21.3 million as compared to $20.5 million in the first half of 2015.

Net loss in the second quarter of 2016 was $48.6 million or $0.36 loss per share as compared to $52.7 million or $0.40 loss per share in the second quarter of 2015. Net loss in the first half of 2016 was $68.1 million or $0.50 loss per share as compared to $18.8 million or $0.14 loss per share in the first half of 2015.

The company also announced the following upcoming presentations and events:

Fourth Annual Immuno-Oncology Summit, Boston, MA:

Oral Abstract: "Of Mice and Men: Translating the Immune Oncology Mechanism of Action of NKTR-214." Presented by: Jonathan Zavelsky, Ph.D.
Date: August 31, 2016, 5:15 p.m. Eastern Time
Second CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference (CIMT) (Free CIMT Whitepaper), New York, NY:

Abstract/Poster #311: "The CD122-biased immunostimulatory cytokine NKTR-214 combined with checkpoint blockade leads to mobilization of antitumor immunity and synergistic activity", Langowski, J., et al.
Date: September 26, 2016, 5:15 – 7:45 p.m. Eastern Time
ESMO 2016 Congress, Copenhagen, Denmark:

Abstract #3048: "Combining Complementary Mechanisms of Immune Activation: NKTR-214, a Biased IL-2 Pathway Agonist, and Immune Checkpoint Antagonists", Charych, D., et al.
Date: October 9, 2016, 1:00 – 2:00 p.m. Central European Time
10th Annual Pain and Migraine Therapeutics Conference, Chicago, IL:

Oral Abstract: "Clinical Development of a Novel Opioid Molecule with Inherent Anti-abuse Properties", Presented by Carlo DiFonzo, Ph.D.
Date: October 19, 2016, 1:00 – 1:30 p.m. Central Time

On August 03, 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 six months ended June 30, 2016, and provided a business update (Press release, CombiMatrix, AUG 3, 2016, View Source [SID:1234514235]).

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"During the second quarter we made excellent progress toward our goal of achieving profitability with revenue growth, expanded gross margin, improved cash collections and a narrowed operating loss," said Mark McDonough, CombiMatrix President and CEO. "Diagnostic services revenues grew 21%, driven by a 32% increase in reproductive health revenues reflecting increased average revenue per test for miscarriage analysis and prenatal testing.

"We are prudently managing expenses while focusing on our commercial organization to support continued growth," Mr. McDonough added. "Our operating expenses increased by 5% on 22% total revenue growth and we achieved record cash reimbursement of $3 million, representing 95% of total revenues. We also are reporting an 840 basis point improvement in gross margin to 53%, our second consecutive quarter of gross margin above 50%.

"We expect improved financial and operational performance throughout 2016 and 2017 with continued growth in revenue and test volume, along with consistent cash reimbursement and prudent expense management," added Mr. McDonough. "Given our current outlook, we expect to reach positive cash flow from operations by the fourth quarter of 2017."

Second Quarter Financial and Operating Highlights (all comparisons are with the second quarter of 2015)

Total revenues of $3.1 million, up 22%
Reproductive health revenues of $2.2 million, up 32%
Total test volume of 2,780, up 7%
Reproductive health test volume of 1,403, up 9%
Gross margin of 53.0%, up 840 basis points
Number of billable customers of 261, up 16.5%
Number of customers sending 50 or more tests reaching 10, up 100%
Cash collections of 95% of total revenue to $3.0 million, up 21%

Volumes Revenues (in 000’s) Average Revenue / Test
Q2 ’16 Q2 ’15 # Δ % Δ Q2 ’16 Q2 ’15 $ Δ % Δ Q2 ’16 Q2 ’15 $ Δ % Δ
Prenatal 302 340 (38 ) (11 %) $ 472 $ 424 $ 48 11 % $ 1,566.41 $ 1,247.76 $ 319 26 %
Miscarriage analysis 901 916 (15 ) (2 %) 1,457 1,190 267 22 % $ 1,616.72 $ 1,299.32 $ 317 24 %
PGS 200 30 170 567 % 252 42 210 500 % $ 1,258.55 $ 1,389.17 $ (131 ) (9 %)
Subtotal – reproductive health 1,403 1,286 117 9 % 2,181 1,656 525 32 % $ 1,554.84 $ 1,287.78 $ 267 21 %
Pediatric 497 581 (84 ) (14 %) 558 630 (72 ) (11 %) $ 1,121.83 $ 1,083.59 $ 38 4 %
Subtotal – all arrays 1,900 1,867 33 2 % 2,739 2,286 453 20 % $ 1,441.57 $ 1,224.24 $ 217 18 %
Non-array tests 880 732 148 20 % 310 238 72 30 % $ 352.27 $ 325.14 $ 27 8 %
Total – all tests 2,780 2,599 181 7 % 3,049 2,524 525 21 % $ 1,096.90 $ 971.23 $ 126 13 %
Royalties 58 25 33 132 %
Total revenues $ 3,107 $ 2,549 $ 558 22 %

Percentage of arrays 68.3 % 71.8 % 89.8 % 90.6 %


Volumes Revenues (in 000’s) Average Revenue / Test
6 Mo’s. ’16 6 Mo’s. ’15 # Δ % Δ 6 Mo’s. ’16 6 Mo’s. ’15 $ Δ % Δ 6 Mo’s. ’16 6 Mo’s. ’15 $ Δ % Δ
Prenatal 566 664 (98 ) (15 %) $ 794 $ 847 $ (53 ) (6 %) $ 1,403.13 $ 1,274.86 $ 128 10 %
Miscarriage analysis 1,896 1,798 98 5 % 3,079 2,322 757 33 % $ 1,623.76 $ 1,291.57 $ 332 26 %
PGS 367 30 337 1123 % 473 40 433 1083 % $ 1,290.67 $ 1,324.00 $ (33 ) (3 %)
Subtotal – reproductive health 2,829 2,492 337 14 % 4,346 3,209 1,137 35 % $ 1,536.41 $ 1,287.50 $ 249 19 %
Pediatric 949 1,048 (99 ) (9 %) 1,058 1,128 (70 ) (6 %) $ 1,114.41 $ 1,076.74 $ 38 3 %
Subtotal – all arrays 3,778 3,540 238 7 % 5,404 4,337 1,067 25 % $ 1,430.41 $ 1,225.11 $ 205 17 %
Non-array tests 1,650 1,404 246 18 % 575 474 101 21 % $ 348.48 $ 337.61 $ 11 3 %
Total – all tests 5,428 4,944 484 10 % 5,979 4,811 1,168 24 % $ 1,101.52 $ 973.19 $ 128 13 %
Royalties 100 67 33 49 %
Total revenues $ 6,079 $ 4,878 $ 1,201 25 %
Percentage of arrays 69.6 % 71.6 % 90.4 % 90.1 %

Financial Results

Three Months Ended June 30, 2016 and 2015

Total revenues for the second quarter of 2016 increased 22% to $3.1 million from $2.5 million for the second quarter of 2015. Revenues for the second quarter of 2016 were comprised of $3.05 million of diagnostic services revenue and $58,000 in royalties. Reproductive health diagnostic test revenue, which includes prenatal microarrays, miscarriage analysis and PGS, increased 32% to $2.2 million and related testing volumes increased 9% to 1,403. The second quarter 2016 revenue increase was driven primarily by higher average revenue per test particularly for miscarriage analysis and prenatal microarray tests, as well as by an increase in the number of billable customers.

Total operating expenses were $4.3 million for the second quarter of 2016 compared with $4.1 for the prior year period. The increase was due primarily to higher general & administrative expenses from increased severance and bonus accruals, an increase in research & development expenses due to development and launch of new diagnostic testing platforms, and higher cost of services as a result of higher test volume. Gross margin for the second quarter of 2016 improved to 53.0% from 44.6% for the second quarter of 2015.

The net loss attributable to common stockholders for the second quarter of 2016 was $1.2 million, or $0.89 per share, improved by $377,000 from a net loss attributable to common stockholders for the second quarter of 2015 of $1.6 million, or $1.91 per share.

Six Months Ended June 30, 2016 and 2015

Total revenues for the first six months of 2016 increased 25% to $6.1 million from $4.9 million for the first six months of 2015. Revenues for the first six months of 2016 included $6.0 million in diagnostic services revenue and $100,000 in royalty revenues.

Operating expenses for the first six months of 2016 were $8.8 million compared with $8.2 million from the prior-year period, with the increase mainly due to higher cost of services resulting from increased testing volumes. Gross margin improved to 52.3% for the first six months of 2016 from 45.4% for the first six months of 2015.

The net loss attributable to common stockholders for the first six months of 2016 was $4.4 million, or $3.89 per share, compared to $4.3 million, or $5.23 per share in 2015. The higher 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 public offering, partially reduced by the $656,000 deemed dividend paid to the Series E investors in February of 2016.

The Company reported $5.2 million in cash, cash equivalents and short-term investments as of June 30, 2016, compared with $3.9 million as of December 31, 2015. The Company used $0.9 million and $2.5 million in cash to fund operating activities during the quarter and six months ended June 30, 2016, respectively, compared with $1.5 million and $2.6 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 $3.0 million and $5.4 million for the three and six months ended June 30, 2016, respectively, compared with $2.5 million and $4.6 million for the three and six months ended June 30, 2015, respectively.