On August 3, 2022 Pacira BioSciences, Inc. (Nasdaq: PCRX), the industry leader in its commitment to non-opioid pain management and regenerative health solutions, reported financial results for the second quarter of 2022 (Press release, Pacira Pharmaceuticals, AUG 3, 2022, View Source;991.htm [SID1234617386]).

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Second Quarter 2022 Financial Highlights

Total revenues of $169.4 million
Net product sales of $137.0 million for EXPAREL, $27.4 million for ZILRETTA, and $3.2 million for iovera°
Net income of $19.9 million, or $0.44 per share (basic) and $0.40 per share (diluted)
Adjusted EBITDA of $44.9 million
"We achieved record revenue for the second quarter, which was marked by strength across the entire portfolio amid ongoing market headwinds. We continue to invest in our training facilities and marketing programs to help facilitate growth throughout the balance of the year and beyond," said Dave Stack, chairman and chief executive officer of Pacira BioSciences. "The second quarter also marked our 21st consecutive quarter of positive adjusted EBITDA, which underscores our consistency and reliability as stewards for our stakeholders. We continue to execute our strategy, confident that the ongoing transition of surgeries to the outpatient setting and other market dynamics will support our growth as we work to create lasting value."

Recent Business Highlights

Completion of Patient Enrollment in Two Phase 3 Registration Studies of EXPAREL as a Lower Extremity Nerve Block. Today the company is announcing the completion of patient enrollment in its two Phase 3 studies of EXPAREL as a nerve block in lower extremity surgeries. The first study is evaluating EXPAREL as an adductor canal block for total knee arthroplasty and the second is evaluating EXPAREL as a popliteal sciatic nerve block for bunionectomy. The company believes positive results from these studies will form the basis for a Supplemental New Drug Application submission seeking label expansion to include lower extremity nerve blocks.
New EXPAREL Patent and Notice of Allowance. In June 2022, the U.S. Patent and Trademark Office (USPTO) issued Patent Number 11,357,727. This patent is a product by process patent, with an expiration date of January 22, 2041. This patent is now listed in the U.S. Food and Drug Administration’s Approved Drug Products with Therapeutic Equivalents Evaluations (Orange Book). In July, the company received a Notice of Allowance from the USPTO for a U.S. Patent Application claiming chemical composition of EXPAREL. After issuance, Pacira will submit this patent for listing in the Orange Book.
Second Quarter 2022 Financial Results

Total revenues were $169.4 million in the second quarter of 2022, versus the $135.6 million reported for the second quarter of 2021.
EXPAREL net product sales were $137.0 million in the second quarter of 2022, versus the $130.1 million reported for the second quarter of 2021.
ZILRETTA net product sales were $27.4 million in the second quarter of 2022. The company began recognizing ZILRETTA sales upon completing its acquisition of Flexion Therapeutics, Inc. in November 2021.
Second quarter 2022 iovera° net product sales were $3.2 million, versus the $3.8 million reported for the second quarter of 2021.
Sales of bupivacaine liposome injectable suspension to a third-party licensee for use in veterinary practice were $1.0 million in the second quarter of 2022, versus the $1.0 million reported for the second quarter of 2021.
Second quarter 2022 royalty and collaborative licensing and milestone revenues were $0.8 million, versus the $0.7 million reported for the second quarter of 2021.
Total operating expenses were $138.2 million in the second quarter of 2022, versus the $100.7 million reported for the second quarter of 2021.
Research and development (R&D) expenses were $26.3 million in the second quarter of 2022, compared to $12.6 million in the second quarter of 2021. R&D expenses included $5.1 million and $4.6 million of product development and manufacturing capacity expansion costs in the second quarters of 2022 and 2021, respectively.
Selling, general and administrative (SG&A) expenses were $65.0 million in the second quarter of 2022, compared to $50.8 million in the second quarter of 2021.
GAAP net income was $19.9 million, or $0.44 per share (basic) and $0.40 per share (diluted), in the second quarter of 2022, compared to $19.1 million, or $0.43 per share (basic) and $0.42 per share (diluted), in the second quarter of 2021.
Non-GAAP net income was $24.0 million, or $0.53 per share (basic) and $0.51 per share (diluted), in the second quarter of 2022, compared to $35.3 million, or $0.80 per share (basic) and $0.77 per share (diluted), in the second quarter of 2021.
Adjusted EBITDA was $44.9 million in the second quarter of 2022, compared to $50.3 million in the second quarter of 2021.
Pacira ended the second quarter of 2022 with cash, cash equivalents and short-term available-for-sale investments ("cash") of $316.4 million. Cash provided by operations was $29.8 million in the second quarter of 2022, compared to $30.1 million in the second quarter of 2021.
Pacira had 45.5 million basic and 52.5 million diluted weighted average shares of common stock outstanding in the second quarter of 2022.
See "Non-GAAP Financial Information" below.

Financial Guidance

Since early 2020, the company’s revenues have been impacted by COVID-19 and pandemic-related challenges that included the significant postponement or suspension in the scheduling of elective surgical procedures due to public health guidance and government directives. While the degree of impact has diminished during the course of the pandemic due to the introduction of vaccines and the lessening of elective surgery restrictions, certain pandemic-related operational challenges persist. It remains unclear how long it will take the elective surgery market to normalize or if restrictions on elective procedures will recur due to future COVID-19 variants or otherwise. Given the continued uncertainty around labor shortages, COVID-19 and the pace of recovery for the elective surgery market, the company is currently not providing revenue or gross margin guidance. To provide greater transparency, Pacira is reporting monthly intra-quarter unaudited net product sales for EXPAREL, ZILRETTA, and iovera° until it has gained enough visibility around the impacts of COVID-19. Pacira is also providing weekly EXPAREL utilization and elective surgery data within its investor presentation, which is accessible at investor.pacira.com

Today the company is reiterating its full-year 2022 operating expense guidance as follows:

Non-GAAP R&D expense of $75 million to $85 million; and
Non-GAAP SG&A expense of $220 million to $230 million.
The company is adjusting its full-year 2022 guidance for stock-based compensation to $47 million to $50 million.

See "Non-GAAP Financial Information" below.

Today’s Conference Call and Webcast Reminder

The Pacira management team will host a conference call to discuss the company’s financial results and recent developments today, Wednesday, August 3, 2022, at 8:30 a.m. ET. To participate in the conference call, dial 1-800-715-9871 and provide the passcode 9287305. International callers may dial 1-646-307-1963 and use the same passcode. In addition, a live audio of the conference call will be available as a webcast. Interested parties can access the event through the "Events" page on the Pacira website at investor.pacira.com.

For those unable to participate in the live call, a replay will be available at 1-800-770-2030 (domestic) or 1-609-800-9909 (international) using the passcode 9287305. The replay of the call will be available for one week from the date of the live call. The webcast will be available on the Pacira website for approximately two weeks following the call.

Non-GAAP Financial Information

This press release contains financial measures that do not comply with U.S. generally accepted accounting principles (GAAP), such as non-GAAP net income, non-GAAP net income per common share, non-GAAP weighted average common shares outstanding-diluted, non-GAAP cost of goods sold, non-GAAP research and development (R&D) expense, non-GAAP selling, general and administrative (SG&A) expense, and adjusted EBITDA (as defined below), because these non-GAAP financial measures exclude the impact of items that management believes affect comparability or underlying business trends.

These measures supplement the company’s financial results prepared in accordance with GAAP. Pacira management uses these measures to better analyze its financial results, estimate its future cost of goods sold, R&D expense and SG&A expense outlook for 2022 and to help make managerial decisions. In management’s opinion, these non-GAAP measures are useful to investors and other users of the Company’s financial statements by providing greater transparency into the operating performance of Pacira and its future outlook. Such measures should not be deemed to be an alternative to GAAP requirements or a measure of liquidity for Pacira. Non-GAAP measures are also unlikely to be comparable with non-GAAP disclosures released by other companies. See the tables below for a reconciliation of GAAP to non-GAAP measures.

On August 3, 2022 Kiniksa Pharmaceuticals, Ltd. (Nasdaq: KNSA) (Kiniksa), a biopharmaceutical company with a portfolio of assets designed to modulate immunological pathways across a spectrum of diseases, reported a global license agreement with Roche and Genentech, a member of the Roche Group (Genentech), for the rights to develop and commercialize vixarelimab, a fully human monoclonal antibody targeting oncostatin M receptor beta (OSMRβ) (Press release, Kiniksa Pharmaceuticals, AUG 3, 2022, View Source [SID1234617403]).

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"We are proud to have advanced vixarelimab from a preclinical-stage asset through Phase 2 clinical studies. Our work underscores the differentiated potential of the OSMRβ mechanism as well as its potential to help patients with serious unmet need," said Sanj K. Patel, Chairman and Chief Executive Officer of Kiniksa. "The agreement provides an optimal infrastructure for the further development of vixarelimab. We plan to allocate the non-dilutive capital received from this transaction towards synergistic opportunities across our portfolio, including the expansion of our ARCALYST cardiovascular franchise."

Under the terms of the global license agreement, Kiniksa will receive $100 million in upfront and near-term payments, and is eligible to receive up to approximately $600 million in certain clinical, regulatory, and sales-based milestones, before fulfilling upstream financial obligations. Kiniksa is also eligible to receive royalties on annual net sales. Genentech will obtain rights for the development and commercialization of vixarelimab. The transaction is subject to certain closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and other customary closing conditions.

Genentech will focus development of vixarelimab in fibrosis, where oncostatin M (OSM)-mediated pathogenesis is thought to be an important pathway for intervention in multiple fibrotic indications.

"Pursuing novel therapies in fibrosis is central to Genentech’s focus on developing medicines for patients with respiratory diseases," said James Sabry, Global Head of Roche Pharma Partnering. "Developing vixarelimab, a first-in-class fully human monoclonal antibody, in fibrosis is another example of how we are taking an innovative approach to meet patients’ unmet needs."

Kiniksa has completed screening patients for the Phase 2b clinical trial of vixarelimab in prurigo nodularis. The company plans to complete the trial but will no longer disclose data in the second half of 2022.

On August 3, 2022 Syros Pharmaceuticals (NASDAQ:SYRS), a leader in the development of medicines that control the expression of genes, reported that the European Medicines Agency (EMA) issued a positive opinion on the Company’s application for orphan drug designation for tamibarotene for the treatment of myelodysplastic syndrome (MDS) (Press release, Syros Pharmaceuticals, AUG 3, 2022, View Source [SID1234617423]). Tamibarotene, an oral first-in-class selective retinoic acid receptor alpha (RARα) agonist, is currently being evaluated in combination with azacitidine in the SELECT-MDS-1 Phase 3 trial for RARA-positive patients with newly diagnosed higher-risk MDS (HR-MDS).

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Previously, the U.S. Food and Drug Administration (FDA) granted orphan drug designation to tamibarotene in MDS in February 2022.

"We are pleased that the EMA has issued a positive opinion for orphan drug designation for tamibarotene as it represents an important milestone for MDS patients, who have an urgent need for effective, tolerable, and convenient treatment options," said David A. Roth, M.D., Syros’ Chief Medical Officer. "We believe tamibarotene has the potential to change the current standard of care and become the first therapy for a targeted population in HR-MDS. We continue to advance our SELECT-MDS-1 trial and are looking forward to announcing pivotal data in late 2023 or early 2024."

Orphan drug designation in the European Union (EU) is granted by the European Commission based on a positive opinion issued by the EMA Committee for Orphan Medicinal Products. The EMA’s orphan designation is available to companies developing treatments for life-threatening or chronically debilitating conditions that affect fewer than five in 10,000 persons in the EU. Medicines that meet the EMA’s orphan designation criteria qualify for financial and regulatory incentives that include a 10-year period of marketing exclusivity in the EU after product approval, protocol assistance from the EMA at reduced fees during the product development phase and access to centralized marketing authorization.

The ongoing SELECT-MDS-1 Phase 3 clinical trial is evaluating the safety and efficacy of tamibarotene in combination with azacitidine for RARA-positive patients with newly diagnosed HR-MDS. Data from the pivotal trial are expected in the fourth quarter of 2023 or the first quarter of 2024, with a potential new drug application filing expected in 2024.

Syros is also evaluating tamibarotene in combination with azacitidine and venetoclax for RARA-positive patients with newly diagnosed unfit acute myeloid leukemia (AML), for which tamibarotene had previously received orphan drug designation from both the FDA and EMA. Data from the safety lead-in portion of the SELECT-AML-1 Phase 2 trial is expected in the second half of this year.

On August 3, 2022 Aclaris Therapeutics, Inc. (NASDAQ: ACRS), a clinical-stage biopharmaceutical company focused on developing novel drug candidates for immuno-inflammatory diseases, reported its financial results for the second quarter of 2022 and provided a corporate update (Press release, Aclaris Therapeutics, AUG 3, 2022, View Source [SID1234617322]).

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"It has been a busy first half of the year as we continue in our pursuit of becoming a leading development-stage immunology company," said Dr. Neal Walker, Chief Executive Officer of Aclaris. "We have strengthened our senior leadership team this year with the addition of a number of accomplished leaders, including James Loerop, Chief Business Officer, Gail Cawkwell, MD, PhD, Chief Medical Officer, and most recently, Doug Manion, MD, President and Chief Operating Officer. During the second quarter we also were able to raise additional capital, which extended our expected cash runway to the end of 2025. We look forward to continuing to advance our clinical and pre-clinical programs as we move through the second half of the year."

Research and Development Highlights:

Clinical Programs

Zunsemetinib, an investigational oral small molecule MK2 inhibitor:
Currently being developed as a potential treatment for immuno-inflammatory diseases
Rheumatoid Arthritis (ATI-450-RA-202): This Phase 2b dose ranging trial to investigate the efficacy, safety, tolerability, pharmacokinetics and pharmacodynamics of multiple doses (20 mg and 50 mg twice daily) of zunsemetinib in combination with methotrexate in subjects with moderate to severe rheumatoid arthritis (RA) is ongoing. Aclaris continues to expect topline data in 2023.
Hidradenitis Suppurativa (ATI-450-HS-201): This Phase 2a trial to investigate the efficacy, safety, tolerability, pharmacokinetics and pharmacodynamics of zunsemetinib (50 mg twice daily) in subjects with moderate to severe hidradenitis suppurativa (HS) is ongoing. Aclaris continues to expect topline data in the first half of 2023.
Psoriatic Arthritis (ATI-450-PsA-201): Aclaris initiated study activities in the second quarter in this Phase 2a trial to investigate the efficacy, safety, tolerability, pharmacokinetics and pharmacodynamics of zunsemetinib (50 mg twice daily) in subjects with moderate to severe psoriatic arthritis (PsA). Aclaris continues to expect topline data in the first half of 2023.
ATI-1777, an investigational topical "soft" Janus kinase (JAK) 1/3 inhibitor:
Currently being developing as a potential treatment for moderate to severe atopic dermatitis (AD)
Atopic Dermatitis (ATI-1777-AD-202): This Phase 2b trial to determine the efficacy, safety, tolerability and pharmacokinetics of ATI-1777 in subjects with moderate to severe AD is ongoing. In this trial, Aclaris will explore multiple concentrations of twice daily treatment with ATI-1777 and a single concentration of once daily treatment with ATI-1777, in patients 12 years and older. Aclaris continues to expect topline data in the first half of 2023.
ATI-2138, an investigational oral ITK/TXK/JAK3 (ITJ) inhibitor:
Currently being developed as a potential treatment for T cell-mediated autoimmune diseases
ATI-2138-PKPD-101: This Phase 1 single ascending dose (SAD) trial to investigate the safety, tolerability, pharmacokinetics and pharmacodynamics of ATI-2138 in healthy subjects is ongoing. Aclaris continues to expect topline data in 2022.
If the Phase 1 SAD trial is successful, Aclaris currently plans to initiate a Phase 1 multiple ascending dose (MAD) trial of ATI-2138 in subjects with psoriasis in 2022. Aclaris is also currently exploring alternative indications that are relevant to the mechanism of action.
Preclinical Programs

ATI-2231, an investigational oral MK2 inhibitor compound:
Currently being explored as a potential treatment for pancreatic cancer and metastatic breast cancer as well as in preventing bone loss in patients with metastatic breast cancer
Second MK2 inhibitor generated from Aclaris’ proprietary KINect drug discovery platform and designed to have a long half-life.
IND-enabling studies are underway, and Aclaris expects to submit an IND by the end of 2022.
Financial Highlights:

Liquidity and Capital Resources

As of June 30, 2022, Aclaris had aggregate cash, cash equivalents and marketable securities of $256 million compared to $226 million as of December 31, 2021. Aggregate cash, cash equivalents and marketable securities as of June 30, 2022 included $73 million of net proceeds from the sale of 4.8 million shares under its ATM facility in April 2022.

Aclaris continues to anticipate that its cash, cash equivalents and marketable securities as of June 30, 2022 will be sufficient to fund its operations through the end of 2025, without giving effect to any potential business development transactions or additional financing activities.

Financial Results

Second Quarter 2022

Net loss was $20.5 million for the second quarter of 2022 compared to $18.2 million for the second quarter of 2021.
Total revenue was $1.5 million for the second quarter of 2022 compared to $1.8 million for the second quarter of 2021.
Research and development (R&D) expenses were $18.8 million for the quarter ended June 30, 2022 compared to $7.9 million for the prior year period.
The $10.9 million increase was primarily the result of higher:
Zunsemetinib development expenses, including costs associated with clinical activities for a Phase 2b trial for RA, a Phase 2a trial for HS and a Phase 2a trial for PsA.
ATI-1777 development expenses related to drug candidate manufacturing and other preclinical activities and start-up costs associated with a Phase 2b clinical trial.
Preclinical development activities related to ATI-2231.
Compensation-related expenses due to an increase in headcount.
General and administrative (G&A) expenses were $6.1 million for the quarter ended June 30, 2022 compared to $5.9 million for the prior year period.
Revaluation of contingent consideration resulted in a $3.4 million reduction of expense for the quarter ended June 30, 2022 mainly due to higher discount rates, compared to a revaluation of contingent consideration expense of $4.8 million for the prior year period.
Year-to-date 2022

Net loss was $39.3 million for the six months ended June 30, 2022 compared to $46.9 million for the six months ended June 30, 2021.
Total revenue was $3.0 million for the six months ended June 30, 2022 compared to $3.6 million for the six months ended June 30, 2021.
R&D expenses were $33.1 million for the six months ended June 30, 2022 compared to $15.7 million for the prior year period.
The $17.4 million increase was primarily the result of higher:
Zunsemetinib development expenses, including costs associated with clinical activities for a Phase 2b trial for RA, a Phase 2a trial for HS and a Phase 2a trial for PsA.
ATI-1777 development expenses related to drug candidate manufacturing and other preclinical activities and start-up costs associated with a Phase 2b clinical trial.
Preclinical development activities related to ATI-2231.
Compensation-related expenses due to an increase in headcount.
G&A expenses were $12.2 million for the six months ended June 30, 2022 compared to $10.7 million for the prior year period.
The $1.5 million increase was primarily the result of higher compensation-related costs, including stock-based compensation, due to increased headcount and the impact of new equity awards granted during the six months ended June 30, 2022.
Revaluation of contingent consideration resulted in a $4.6 million reduction of expense for the six months ended June 30, 2022 mainly due to higher discount rates, compared to a revaluation of contingent consideration expense of $21.2 million for the prior year period.

On August 3, 2022 Sutro Biopharma, Inc. (Sutro or the Company) (NASDAQ: STRO), a clinical-stage oncology company pioneering site-specific and novel-format antibody drug conjugates (ADCs), reported that Bill Newell, Chief Executive Officer, will present at the 2022 Wedbush PacGrow Healthcare Conference’s panel discussion, "ADCs – Take Me to Your Tumor" on Wednesday, August 10, 2022, at 2:20 p.m. ET / 11:20 a.m. PT (Press release, Sutro Biopharma, AUG 3, 2022, View Source [SID1234617341]).

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The presentation will be accessible through the News & Events page of the Investor Relations section of the company’s website at www.sutrobio.com. An archived replay will be available for at least 30 days after the event.