Fate Therapeutics Reports First Quarter 2022 Financial Results and Highlights Operational Progress

On May 4, 2022 Fate Therapeutics, Inc. (NASDAQ: FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for patients with cancer, reported business highlights and financial results for the first quarter ended March 31, 2022 (Press release, Fate Therapeutics, MAY 4, 2022, View Source [SID1234613590]).

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"We have made significant progress across our disease areas, operations, and collaborations in early 2022, including preparing for submission to the FDA of our multi-disciplinary RMAT briefing package to inform pivotal study readiness in relapsed / refractory aggressive lymphoma, as well as our FT596 plus R-CHOP clinical protocol to initiate investigation in first-line patients," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "We are also poised to treat the first solid tumor patient with FT536, our multi-antigen targeted CAR MICA/B NK cell product candidate, and have initiated IND-enabling activities for two CAR NK cell product candidates under our collaboration with Janssen. We look forward to providing clinical updates for our multiplexed-engineered, iPSC-derived NK and T-cell product candidates across our disease franchises in the second half of 2022."

B-cell Malignancy Disease Franchise

FT596+R Enrollment Ongoing in Single- and Multi-dose, Multi-cycle Cohorts for R/R BCL. The Company’s multi-center Phase 1 study of FT596 in combination with rituximab (FT596+R) for relapsed / refractory (r/r) B-cell lymphoma (BCL) is currently enrolling patients in the following cohorts to further assess dose and treatment schedule: multi-dose at 900 million cells per dose with FT596 being administered on Day 1 and Day 15; single-dose at 1.8 billion cells; and single-dose at 900 million cells. The Company plans to open a multi-dose cohort at 1.8 billion cells per dose, with FT596 being administered on Day 1 and Day 15, upon clearance of dose-limiting toxicities (DLTs). Each cohort permits eligible patients to receive multiple treatment cycles.
FT596+R-CHOP Clinical Protocol to be Submitted to FDA in 2Q22. In the second quarter of 2022, the Company plans to submit a new clinical protocol to the FT596 Investigational New Drug (IND) application to assess the safety and activity of adding FT596 to R-CHOP, the standard first-line immunochemotherapy for patients with aggressive lymphomas. The proposed treatment schema includes administering up to six doses of FT596, without conditioning chemotherapy, with one dose being administered with each of six standard cycles of R-CHOP. The objective of the Phase 1 study is to inform the feasibility of development of FT596 in first-line aggressive lymphoma patients treated outpatient in the community setting.
FT516 Multi-disciplinary RMAT Meeting Planned for mid-2022. In December, the Company announced that the U.S. Food and Drug Administration (FDA) granted Regenerative Medicine Advanced Therapy (RMAT) designation to FT516 for the treatment of r/r diffuse large B-cell lymphoma (DLBCL). The Company plans to hold a multi-disciplinary meeting with the FDA in mid-2022 to discuss key CMC topics and pivotal study design in patients who have progressed or relapsed following prior treatment with FDA‑approved CD19‑directed chimeric antigen receptor (CAR) T-cell therapy. No standard therapies are available for these patients, and recent retrospective analyses of real-world data presented at the 2021 Annual Meeting of the American Society of Hematology (ASH) (Free ASH Whitepaper) demonstrate extremely poor treatment outcomes with complete response rates of administered therapies ranging from 5% to 25% and overall survival ranging from 5.2 months to 7.5 months.
FT516+R Enrollment Ongoing in Multiple, Multi-dose, Multi-cycle, Disease-specific Expansion Cohorts for R/R BCL. The Company’s multi-center Phase 1 study of FT516 in combination with rituximab (FT516+R) for r/r BCL is currently enrolling patients in multiple disease-specific multi-dose, multi-cycle expansion cohorts at 900 million cells per dose, including patients with r/r aggressive lymphomas who have previously been treated with CD19-targeted CAR T-cell therapy.
FT819 Enrollment Ongoing in Second Single-dose and First Multi-dose Escalation Cohorts. The Company is conducting a landmark Phase 1 study of FT819, the first-ever T-cell therapy manufactured from a clonal master induced pluripotent stem cell (iPSC) line to undergo clinical investigation. The product candidate’s clonal master iPSC line is created from a single iPSC that has a novel CD19-targeted 1XX CAR construct (1XX-CAR19) integrated into the T-cell receptor alpha constant (TRAC) locus, ensuring complete bi-allelic disruption of T-cell receptor expression and promoting uniform CAR expression. Dose escalation is ongoing in the second single-dose cohort of 180 million cells and in the first multi-dose cohort of 30 million cells per dose for r/r BCL. In the first FT819 single-dose escalation cohort (90 million cells) for r/r BCL, there were no DLTs and no FT819-related Grade ≥3 adverse events.
Proof-of-concept Data of ADR-armed CAR NK Cells for Conditioning-free Therapy Presented at AACR (Free AACR Whitepaper). At the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2022 held in April, the Company highlighted its novel synthetic alloimmune defense receptor (ADR), which targets 4-1BB expressed on allo-reactive host T and NK cells. In a mixed lymphocyte reaction assay, ADR-armed iPSC-derived CAR NK cells inhibited the expansion of allo-reactive T and NK cells and exhibited enhanced functional persistence in whole peripheral blood mononuclear cell milieu. Furthermore, in a preclinical model designed to induce rejection, ADR-armed iPSC-derived CAR NK cells exhibited robust tumor control in vivo in the presence of host allo-reactive T-cell system. These preclinical data provide proof-of-concept that ADR-armed iPSC-derived CAR NK cell therapies have the potential to maintain potent anti-tumor activity without requiring chemotherapy conditioning.
AML Disease Franchise

FT538 Enrollment Ongoing in Multi-dose Escalation Cohort of 1 Billion Cells per Dose. The Company’s Phase 1 study is designed to assess three once-weekly doses of FT538 as monotherapy, and is currently enrolling patients in the third multi-dose escalation cohort (1 billion cells per dose) for r/r acute myeloid leukemia (AML). In addition, an investigator-initiated study of FT538 in combination with the CD38-targeted monoclonal antibody daratumumab, which is designed to assess the therapeutic potential of targeting CD38+ leukemic blasts, is enrolling patients in the third multi-dose escalation cohort at 1 billion cells per dose.
Multiple Myeloma Franchise

First Patients Treated with FT576+D in Phase 1 Study. The multi-center Phase 1 clinical trial is designed to assess single-dose and multi-dose treatment schedules of FT576 as monotherapy and in combination with daratumumab (FT576+D) for the treatment of r/r multiple myeloma (MM). There were no DLTs observed in the first single-dose escalation cohort (100 million cells) as monotherapy. In addition, the first patient has been treated in the first single-dose escalation cohort (100 million cells) of FT576+D. The Company plans to enroll the multi-dose treatment schedule, with FT576 administered at 100 million cells per dose on Days 1 and 15, upon clearance of the first single-dose escalation cohort of FT576+D.
Initial Preclinical Data of Dual CAR NK Cells Presented at AACR (Free AACR Whitepaper). The Company unveiled a dual CAR approach targeting two tumor-associated antigens to overcome mechanisms of resistance for r/r MM. Using the multiplexed-engineered master iPSC line of FT576 as starting material, the Company engineered into the master iPSC line a second CAR targeting the major histocompatibility complex (MHC) class I chain-related proteins A (MICA) and B (MICB), which proteins are highly expressed on malignant plasma cells and precursors in the bone marrow of MM. The Company showed that, in an aggressive xenograft model of heterogeneously-mixed cancer cells, iPSC-derived dual CAR NK cells targeting BCMA and MICA/B demonstrate superior tumor control in vivo compared to iPSC-derived single CAR NK cells.
Solid Tumor Franchise

On-track for First Patient Treatment with FT536 CAR MICA/B-targeted NK Cell Product Candidate. The Company is preparing to initiate a multi-center Phase 1 clinical trial to assess a multi-dose, multi-cycle treatment schedule of FT536 as monotherapy and in combination with monoclonal antibody therapy for advanced solid tumors. The off-the-shelf, multiplexed-engineered, iPSC-derived NK cell product candidate incorporates both a novel CAR targeting MICA/B, high expression of which has been reported on many solid tumors, as well as the Company’s proprietary high-affinity, non-cleavable CD16 (hnCD16) Fc receptor to promote dual-antigen targeting of solid tumors. The Company has successfully completed manufacture and is conducting final release testing, and is working with the study’s first clinical site to initiate enrollment in the second quarter of 2022.
Novel CAR Targeting pan-Cancer Antigen B7-H3 Featured at AACR (Free AACR Whitepaper). The Company presented preclinical data in collaboration with investigators from the University of Minnesota demonstrating the specificity and function of a novel camelid nanobody CAR targeting B7-H3 (camB7-H3), a member of the B7 family of immunoregulatory proteins that is overexpressed in cancer and promotes tumor growth, metastasis, and drug resistance. The Company showed that camB7-H3 CAR T cells exhibit target-specific binding and activity in vitro against several solid tumor cell lines and promote durable disease control in vivo in an aggressive disseminated xenograft model of B7-H3-expressing tumor cells. The Company is currently assessing several multiplexed-engineered, iPSC-derived camB7-H3 CAR NK cell and CAR T-cell product candidates for IND candidate selection.
Other Corporate Highlights

Preclinical Milestone Reached for Third Product Candidate under Janssen Collaboration. In April 2022, Janssen nominated a third iPSC-derived, CAR-targeted cell product candidate incorporating a Janssen proprietary antigen binding domain, triggering the payment of a milestone fee to the Company under the collaboration.
Second GMP Manufacturing Facility Poised for Launch in 2H22. The Company’s state-of-the-art, multi-drug product manufacturing facility located in Poway, California is undergoing qualification, and is expected to be fully operational and producing GMP material in the second half of 2022. The facility is designed to supply drug product for the conduct of pivotal studies and initial commercial launch, and is located on the campus of the Company’s corporate headquarters allowing for full operational integration among the technical operations, regulatory and quality, research and development, and corporate teams.
First Quarter 2022 Financial Results

Cash & Investment Position: Cash, cash equivalents and investments as of March 31, 2022 were $641.7 million.
Total Revenue: Revenue was $18.4 million for the first quarter of 2022, which was derived from the Company’s collaborations with Janssen and Ono Pharmaceutical.
R&D Expenses: Research and development expenses were $72.1 million for the first quarter of 2022, which includes $12.7 million of non-cash stock-based compensation expense.
G&A Expenses: General and administrative expenses were $20.7 million for the first quarter of 2022, which includes $6.6 million of non-cash stock-based compensation expense.
Shares Outstanding: Common shares outstanding were 96.5 million, and preferred shares outstanding were 2.8 million, as of March 31, 2022. Each preferred share is convertible into five common shares.
Today’s Conference Call and Webcast
The Company will conduct a conference call today, Wednesday, May 4, 2022 at 5:00 p.m. ET to review financial and operating results for the quarter ended March 31, 2022. In order to participate in the conference call, please dial (877) 303-6235 (domestic) or (631) 291-4837 (international) and refer to conference ID 9978043. The live webcast can be accessed under "Events & Presentations" in the Investors section of the Company’s website at www.fatetherapeutics.com. The archived webcast will be available on the Company’s website beginning approximately two hours after the event.

About Fate Therapeutics’ iPSC Product Platform
The Company’s proprietary induced pluripotent stem cell (iPSC) product platform enables mass production of off-the-shelf, engineered, homogeneous cell products that are designed to be administered with multiple doses to deliver more effective pharmacologic activity, including in combination with other cancer treatments. Human iPSCs possess the unique dual properties of unlimited self-renewal and differentiation potential into all cell types of the body. The Company’s first-of-kind approach involves engineering human iPSCs in a one-time genetic modification event and selecting a single engineered iPSC for maintenance as a clonal master iPSC line. Analogous to master cell lines used to manufacture biopharmaceutical drug products such as monoclonal antibodies, clonal master iPSC lines are a renewable source for manufacturing cell therapy products which are well-defined and uniform in composition, can be mass produced at significant scale in a cost-effective manner, and can be delivered off-the-shelf for patient treatment. As a result, the Company’s platform is uniquely designed to overcome numerous limitations associated with the production of cell therapies using patient- or donor-sourced cells, which is logistically complex and expensive and is subject to batch-to-batch and cell-to-cell variability that can affect clinical safety and efficacy. Fate Therapeutics’ iPSC product platform is supported by an intellectual property portfolio of over 350 issued patents and 150 pending patent applications.

About FT516
FT516 is an investigational, universal, off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line engineered to express a novel high-affinity 158V, non-cleavable CD16 (hnCD16) Fc receptor, which has been modified to prevent its down-regulation and to enhance its binding to tumor-targeting antibodies. CD16 mediates antibody-dependent cellular cytotoxicity (ADCC), a potent anti-tumor mechanism by which NK cells recognize, bind and kill antibody-coated cancer cells. ADCC is dependent on NK cells maintaining stable and effective expression of CD16, which has been shown to undergo considerable down-regulation in cancer patients. In addition, CD16 occurs in two variants, 158V or 158F, that elicit high or low binding affinity, respectively, to the Fc domain of therapeutic antibodies. Numerous clinical studies with FDA-approved tumor-targeting antibodies, including rituximab, trastuzumab and cetuximab, have demonstrated that patients homozygous for the 158V variant, which is present in only about 15% of patients, have improved clinical outcomes. FT516 is being investigated in a multi-dose Phase 1 clinical trial as a monotherapy for the treatment of relapsed / refractory acute myeloid leukemia and in combination with CD20-targeted monoclonal antibodies for the treatment of relapsed / refractory B-cell lymphoma (NCT04023071).

About FT596
FT596 is an investigational, universal, off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line engineered with three anti-tumor functional modalities: a proprietary chimeric antigen receptor (CAR) optimized for NK cell biology that targets B-cell antigen CD19; a novel high-affinity 158V, non-cleavable CD16 (hnCD16) Fc receptor, which has been modified to prevent its down-regulation and to enhance its binding to tumor-targeting antibodies; and an IL-15 receptor fusion (IL-15RF) that augments NK cell activity. In preclinical studies of FT596, the Company has demonstrated that dual activation of the CAR19 and hnCD16 targeting receptors enhances cytotoxic activity and prevents antigen escape, indicating that multi-antigen engagement may elicit a deeper and more durable response. Additionally, in a humanized mouse model of lymphoma, FT596 in combination with the anti-CD20 monoclonal antibody rituximab showed enhanced killing of tumor cells in vivo as compared to rituximab alone. FT596 is being investigated in a multi-center Phase 1 clinical trial for the treatment of relapsed / refractory B-cell lymphoma as a monotherapy and in combination with rituximab, and for the treatment of relapsed / refractory chronic lymphocytic leukemia (CLL) as a monotherapy and in combination with obinutuzumab (NCT04245722).

About FT819
FT819 is an investigational, universal, off-the-shelf, T-cell receptor (TCR)-less CD19 chimeric antigen receptor (CAR) T-cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line, which is engineered with the following features designed to improve the safety and efficacy of CAR19 T-cell therapy: a novel 1XX CAR signaling domain, which has been shown to extend T‑cell effector function without eliciting exhaustion; integration of the CAR19 transgene directly into the T‑cell receptor alpha constant (TRAC) locus, which has been shown to promote uniform CAR19 expression and enhanced T‑cell potency; and complete bi-allelic disruption of TCR expression for the prevention of graft-versus-host disease. FT819 demonstrated antigen-specific cytolytic activity in vitro against CD19-expressing leukemia and lymphoma cell lines comparable to that of primary CAR T cells, and persisted and maintained tumor clearance in the bone marrow in an in vivo disseminated xenograft model of lymphoblastic leukemia. FT819 is being investigated in a multi-center Phase 1 clinical trial for the treatment of relapsed / refractory B-cell malignancies, including B-cell lymphoma, chronic lymphocytic leukemia, and acute lymphoblastic leukemia (NCT04629729).

About FT538
FT538 is an investigational, universal, off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line engineered with three functional components: a novel high-affinity 158V, non-cleavable CD16 (hnCD16) Fc receptor, which has been modified to prevent its down-regulation and to enhance its binding to tumor-targeting antibodies; an IL-15 receptor fusion (IL-15RF) that augments NK cell activity; and the deletion of the CD38 gene (CD38KO), which promotes persistence and function in high oxidative stress environments. FT538 is designed to enhance innate immunity in cancer patients, where endogenous NK cells are typically diminished in both number and function due to prior treatment regimens and tumor suppressive mechanisms. In preclinical studies, FT538 has shown superior NK cell effector function, as compared to peripheral blood NK cells, with the potential to confer significant anti-tumor activity to patients through multiple mechanisms of action. FT538 is being investigated in a multi-dose Phase 1 clinical trial for the treatment of acute myeloid leukemia (AML) and in combination with daratumumab, a CD38-targeted monoclonal antibody therapy, for the treatment of multiple myeloma (NCT04614636). FT538 is also being investigated in a multi-dose Phase 1 clinical trial in combination with one of an array of tumor-targeting monoclonal antibodies for the treatment of advanced solid tumors (NCT05069935).

About FT576
FT576 is an investigational, universal, off-the-shelf natural killer (NK) cell cancer immunotherapy derived from a clonal master induced pluripotent stem cell (iPSC) line engineered with four functional components: a proprietary chimeric antigen receptor (CAR) optimized for NK cell biology that targets B-cell maturation antigen (BCMA); a novel high-affinity 158V, non-cleavable CD16 (hnCD16) Fc receptor, which has been modified to prevent its down-regulation and to enhance its binding to tumor-targeting antibodies; an IL-15 receptor fusion (IL-15RF) that augments NK cell activity; and the deletion of the CD38 gene (CD38KO), which promotes persistence and function in high oxidative stress environments. In preclinical studies, FT576 has demonstrated that the high-avidity binding of the BCMA-targeted CAR construct enables sustained tumor control in against various multiple myeloma cell lines, including in long-term in vivo xenograft mouse models. Additionally, in combination with daratumumab, FT576 has shown complete tumor clearance and improved survival compared to primary BCMA-targeted CAR T cells in a disseminated xenograft model of multiple myeloma. FT576 is being investigated in a multi-center Phase 1 clinical trial for the treatment of relapsed / refractory multiple myeloma as a monotherapy and in combination with daratumumab (NCT05182073).

Interim Report Q1 2022

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Amphista Therapeutics Enters Strategic Collaboration with Merck for Discovery and Development of Targeted Protein Degradation Therapeutics

On May 4, 2022 Amphista Therapeutics, a global leader in the discovery and development of next generation targeted protein degradation (TPD) therapeutics, reported a strategic collaboration with Merck Healthcare, a division of Merck (Press release, Amphista Therapeutics, MAY 4, 2022, View Source [SID1234613480]). Under the terms of the agreement, Merck and Amphista will work collaboratively to discover and develop small molecule protein degraders for an initial three targets in oncology and immunology indications. Amphista will receive an upfront payment, R&D funding and success-based milestone payments of up to €893.5 million ($1.0 billion*) as well as royalties in the mid-single digit range. Completion of the transaction is subject to the parties obtaining any necessary regulatory clearances or approvals.

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Nicola Thompson, CEO of Amphista, said, "We are extremely pleased to enter into this collaboration with Merck. This is a significant validation of the progress we have made in TPD research and the potential of our Eclipsys next-generation TPD platform. We look forward to working with the Merck team, using our combined expertise to develop new TPD therapies to treat cancers and immuno-inflammatory diseases."

TPD therapies are designed to use physiological mechanisms to remove pathogenic protein from the body, offering the potential to access many disease targets previously considered "undruggable." Amphista’s technology is specifically designed to develop next generation TPD therapeutics based on mechanistic insights and novel chemistry approaches that enable the company to develop novel protein degrading therapeutics with superior levels of efficacy and broad therapeutic applicability.

Kronos Bio Reports Recent Business Progress and First-Quarter 2022 Financial Results

On May 4, 2022 Kronos Bio, Inc. (Nasdaq: KRON), a company dedicated to transforming the lives of those affected by cancer and other serious diseases, reported recent business progress and first quarter 2022 financial results (Press release, Kronos Bio, MAY 4, 2022, View Source [SID1234613512]).

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"We continued to advance our three clinical programs this quarter and, in addition, presented preclinical data that support the development strategy for our internally discovered CDK9 inhibitor, KB-0742, at the AACR (Free AACR Whitepaper) Annual Meeting," said Norbert Bischofberger, Ph.D., president and chief executive officer of Kronos Bio. "Overall, we are pleased with our progress in executing against our goals and look forward to announcing the recommended Phase 2 dose and presenting additional clinical data for KB-0742 in the fourth quarter of this year."

First Quarter and Recent Company Updates
•SYK Inhibitor Programs
◦During the first quarter, Kronos Bio opened additional sites for its Phase 1b/2 clinical trial of lanraplenib, the company’s next generation spleen tyrosine kinase (SYK) inhibitor, in combination with gilteritinib in patients with FLT3-mutated acute myeloid leukemia (AML). The company anticipates dosing the first patient during the second quarter.
◦Kronos Bio is continuing to enroll patients in the registrational Phase 3 AGILITY clinical trial of entospletinib, a selective inhibitor targeting SYK, in combination with standard of care anthracycline and cytarabine (7+3) chemotherapy in patients with NPM1-mutated AML. Data are anticipated in the second half of 2023 with a primary endpoint of measurable residual disease (MRD) negative complete response.
•KB-0742
◦At the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2022 in April, Kronos Bio presented preclinical data that add to growing evidence in support of the company’s approach to the clinical development of KB-0742, its internally discovered, highly selective, oral cyclin dependent kinase 9 (CDK9) inhibitor. Data were presented from multiple preclinical translational model systems that support the development of the compound in triple-negative breast, ovarian and lung cancers, as well as lymphoma, chordoma and sarcoma.
◦The company is continuing with dose escalation in the Phase 1/2 study of KB-0742 and is on track to announce additional Phase 1 data, along with the recommended Phase 2 dose, in the fourth quarter of 2022. Kronos Bio presented initial data in the fourth quarter of 2021. A pharmacokinetic analysis showed oral bioavailability and dose-proportional exposure across the first three dose levels, with low to moderate variability between patients. KB-0742 had a terminal half-life of 24 hours, with approximately 2 to 2.5-fold accumulation between Day 1 and Day 10 among the 12 patients treated in the trial.

•Corporate Updates
◦Kronos Bio has implemented fiscal prudence measures, which provide expected cash runway into the second half of 2024, as announced earlier this year. These measures include deprioritizing a second Phase 1b/2 clinical trial of lanraplenib in combination with venetoclax/azacitidine to better focus the company’s resources on areas of greatest unmet medical need.
◦Kronos Bio announced the appointment of Dr. Elizabeth Olek, DO, MPH, as senior vice president, Clinical Development. Dr. Olek joined Kronos Bio from Loxo Oncology at Lilly.

First Quarter 2022 Financial Highlights

•Cash, Cash Equivalents and Investments: With its ongoing and currently planned clinical programs and $315.4 million in cash, cash equivalents and investments as of March 31, 2022, the company anticipates sufficient resources to fund its planned operations into the second half of 2024.

•R&D Expenses: Research and development expenses were $24.4 million for the first quarter of 2022, which includes non-cash stock-based compensation expense of $3.8 million.

•G&A Expenses: General and administrative expenses were $11.9 million for the first quarter of 2022, which includes non-cash stock-based compensation expense of $4.0 million.

•Net Loss: Net loss for the first quarter of 2022 was $36.3 million, or $0.65 per share, including non-cash stock-based compensation expense of $7.8 million.

United Therapeutics Corporation Reports First Quarter 2022 Financial Results

On May 4, 2022 United Therapeutics Corporation (Nasdaq: UTHR), a public benefit corporation, reported its financial results for the quarter ended March 31, 2022 (Press release, United Therapeutics, MAY 4, 2022, View Source [SID1234613529]). Total revenue in the first quarter of 2022 grew 22% year-over-year to $461.9 million, compared to $379.1 million in the first quarter of 2021.

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"The hard work and dedication of our Unitherians has resulted in double-digit percentage revenue growth year-over-year for Tyvaso, Orenitram, Unituxin, and our total treprostinil portfolio, along with our second-highest revenue quarter ever," said Martine Rothblatt, Ph.D., Chairperson and Chief Executive Officer of United Therapeutics. "Likewise, our team is hard at work progressing our seven phase 3 studies that are now underway."

"We see continued traction for Tyvaso in pulmonary hypertension associated with interstitial lung disease, and we eagerly await the FDA’s decision on Tyvaso DPI later this month," said Michael Benkowitz, President and Chief Operating Officer of United Therapeutics. "With this positive momentum, we continue to work toward reaching 6,000 patients on Tyvaso therapy by the end of 2022 and 25,000 patients on our therapies by the end of 2025."

FIRST QUARTER 2022 FINANCIAL RESULTS

Key financial highlights include (dollars in millions, except per share data):

Calculation is not meaningful.

Net product sales from our treprostinil-based products (Tyvaso, Remodulin, and Orenitram) grew by $60.9 million for the first quarter of 2022, as compared to the same period in 2021. The growth in Tyvaso revenues resulted primarily from an increase in quantities sold, reflecting an increased number of patients following the label expansion to treat pulmonary hypertension associated with interstitial lung disease (PH-ILD). The growth in Remodulin revenues was primarily due to a $9.5 million increase in international Remodulin revenues, partially offset by an $8.0 million decrease in U.S. Remodulin revenues. The increase in international Remodulin revenues was primarily due to the timing of orders by our international distributors and does not precisely reflect trends in underlying patient demand. The decrease in U.S. Remodulin revenues was primarily due to a decrease in quantities sold. The growth in Orenitram revenues resulted primarily from an increase in quantities sold and, to a lesser extent, a price increase. The growth in Unituxin revenues resulted primarily from the launch of Unituxin in Japan in September 2021 and, to a lesser extent, a price increase. The increase in other revenues resulted from an upfront payment of $10.0 million from an international distributor.

Expenses

Cost of product sales. The table below summarizes cost of product sales by major category (dollars in millions):

Refer to Share-based compensation below.

Research and development expense, excluding share-based compensation. Research and development expense for the three months ended March 31, 2022 decreased as compared to the same period in 2021, due to: (1) a $107.3 million in-process research and development impairment charge related to our March 2021 decision to discontinue the U.S. development of Trevyent; (2) a $105.0 million purchase of a pediatric disease priority review voucher in January 2021, which we redeemed upon submission of our new drug application (NDA) for Tyvaso DPI; and (3) an $11.6 million impairment charge related to repurposing one of our facilities during the first quarter of 2021.

Selling, general, and administrative expense. The table below summarizes selling, general, and administrative expense by major category (dollars in millions):

Refer to Share-based compensation below.

General and administrative, excluding share-based compensation. The increase in general and administrative expense for the three months ended March 31, 2022, as compared to the same period in 2021, was primarily due to: (1) an increase in legal expenses related to litigation matters; and (2) an increase in branded prescription drug fee expense associated with sales of Tyvaso.

Share-based compensation. The table below summarizes share-based compensation (benefit) expense by major category (dollars in millions):

The increase in share-based compensation benefit for the three months ended March 31, 2022, as compared to the same period in 2021, was primarily due to: (1) an increase in STAP benefit driven by a 17 percent decrease in our stock price for the three months ended March 31, 2022, as compared to a 10 percent increase in our stock price for the same period in 2021; and (2) a decrease in stock option expense due to fewer awards granted and outstanding in 2022.

Other income, net. The change in other income, net for the three months ended March 31, 2022, as compared to the same period in 2021, was primarily due to net unrealized and realized gains and losses on equity securities. During the first quarter of 2021, we sold an investment that we held in a publicly-traded company. We received $108.9 million in cash from the sale of the investment and realized a gain of $91.9 million.

Income tax expense. Income tax expense for the three months ended March 31, 2022 and 2021, was $68.8 million and $4.2 million, respectively. The effective income tax rate (ETR) for the three months ended March 31, 2022 and 2021, was 22 percent and 13 percent, respectively. The ETR for the three months ended March 31, 2022 increased compared to the ETR for the three months ended March 31, 2021 primarily due to the impact of lower discrete excess tax benefits from share-based compensation relative to the amount of pretax income, and an increase in the valuation allowance compared to a decrease in the prior period.

PRODUCT COMMERCIALIZATION UPDATE

Remunity Pump for Remodulin. In February 2021, we launched sales of the Remunity Pump for Remodulin. The Remunity Pump is a pre-filled, semi-disposable system for subcutaneous delivery of treprostinil. The system consists of a small, lightweight, durable pump and separate controller. The pump uses disposable cartridges filled with Remodulin, which can be connected to the pump with less patient manipulation than is typically involved in filling other currently-available subcutaneous pumps.

Tyvaso Inhalation Solution in PH-ILD. The FDA approved Tyvaso for the PH-ILD indication on March 31, 2021, and we launched commercial efforts for the new indication shortly thereafter.

Tyvaso DPI. In April 2021, we submitted an NDA for Tyvaso DPI for pulmonary arterial hypertension (PAH) and PH-ILD indications. In October 2021, we received a complete response letter (CRL) from the FDA noting a single deficiency preventing approval of Tyvaso DPI, related to an open inspection issue at a third-party facility that performs analytical testing of treprostinil drug substance. The CRL noted, but did not cite as a deficiency, that the FDA had not yet completed its review of a Citizen Petition submitted to the FDA in July 2021 concerning the safety of an excipient in Tyvaso DPI.

We resubmitted our NDA in December 2021 and the FDA issued an action date for February 2022. In February 2022, the FDA requested additional information concerning the pulmonary safety of Tyvaso DPI related to the Citizen’s Petition noted above. We responded to the FDA’s request, and the FDA indicated that our response constituted a major amendment to the Tyvaso DPI NDA, which extended the FDA’s anticipated deadline to review the pending NDA to May 2022.

Our Tyvaso DPI NDA includes the results of two clinical studies we conducted of Tyvaso DPI. One was a study in healthy volunteers, comparing the pharmacokinetics of Tyvaso DPI to Tyvaso Inhalation Solution. The study was completed in October 2020, and demonstrated comparable systemic treprostinil exposure between Tyvaso DPI and Tyvaso Inhalation Solution. In December 2020, we completed a clinical study (called BREEZE), which evaluated the safety and pharmacokinetics of switching PAH patients from Tyvaso Inhalation Solution to Tyvaso DPI. The BREEZE study demonstrated the safety and tolerability of Tyvaso DPI in subjects with PAH transitioning from Tyvaso Inhalation Solution, and comparable systemic treprostinil exposure between Tyvaso DPI and Tyvaso Inhalation Solution.

RESEARCH AND DEVELOPMENT UPDATE

Updates on select later-stage programs are below.

Tyvaso in chronic fibrosing interstitial lung diseases — TETON 1 and TETON 2. We are enrolling a phase 3 study called TETON 1, which is a U.S. study of Tyvaso for the treatment of idiopathic pulmonary fibrosis (IPF). The primary endpoint of this study is the change in absolute forced vital capacity (FVC) from baseline to week 52. We are in the process of commencing an additional phase 3 study of Tyvaso in IPF patients that will be similar to TETON 1, called TETON 2, but will be conducted outside of the United States.

The TETON program was prompted by data from the INCREASE study which demonstrated improvements in certain key parameters of lung function in pulmonary hypertension patients with fibrotic lung disease. Specifically, in the INCREASE study, treatment with Tyvaso resulted in significant improvements in percent predicted FVC at weeks 8 and 16, with subjects having underlying etiologies of idiopathic interstitial pneumonias showing greater improvement. Consistent positive effects were also observed in patients with chronic hypersensitivity pneumonitis and environmental/occupational lung disease. These data points, combined with substantial preclinical evidence of antifibrotic activity of treprostinil, suggest that Tyvaso may offer a treatment option for patients with fibrotic lung disease.

Tyvaso in PH-COPD — PERFECT. Enrollment is ongoing for the phase 3 PERFECT study evaluating Tyvaso for the treatment of WHO Group 3 pulmonary hypertension associated with chronic obstructive pulmonary disease (PH-COPD). In a 30-week crossover study, 136 subjects will be randomized between inhaled treprostinil and placebo for a 26-week treatment period. The primary endpoint of the study is the change in six-minute walk distance from baseline to week 12.

Ralinepag phase 3 clinical studies — ADVANCE CAPACITY and ADVANCE OUTCOMES. We are enrolling two phase 3 clinical studies to support the potential approval of oral ralinepag for PAH.

INDUCEMENT RESTRICTED STOCK UNITS

On April 29, 2022, we granted a total of 1,507 restricted stock units under our 2019 Inducement Stock Incentive Plan to six newly hired employees. These restricted stock units vest in three equal installments on April 30, 2023, 2024, and 2025, assuming continued employment on such dates, and are subject to the standard terms and conditions we filed with the SEC as Exhibit 10.2 to our Current Report on Form 8-K on March 1, 2019. We are providing this information in accordance with Nasdaq Listing Rule 5635(c)(4).

WEBCAST

We will host a webcast to discuss our first quarter 2022 financial results on Wednesday, May 4, 2022, at 9:00 a.m. Eastern Time. The webcast can be accessed live via our website at View Source A replay of the webcast will also be available at the same location on our website.