On August 6, 2021 Replimune Group, Inc. (NASDAQ: REPL), a biotechnology company developing oncolytic immuno-gene therapies derived from its Immulytic platform, reported financial results for the fiscal first quarter ended June 30, 2021 and provided a business update (Press release, Replimune, AUG 6, 2021, View Source [SID1234586024]).

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"The data we presented in June continues to demonstrate the depth and durability of responses observed with RP1 and RP2, which we believe indicates the potential to provide new treatment options for a range of difficult-to-treat cancers with clear unmet need, including for patients with anti-PD-1 failed disease," said Philip Astley-Sparke, CEO of Replimune. "Beyond our evolving skin cancer franchise where we expect to complete accrual in our registration directed CERPASS study in CSCC and in our registration directed cohort of patients with anti-PD-1 failed melanoma mid next year, we are designing a comprehensive development plan with the goal of establishing our product candidates as a cornerstone of cancer treatment regimens, including in patients with liver metastases. The detail behind these plans will be made available early next year."

Recent Events and Corporate Updates

Presented data at June Virtual Investor Event that continues to indicate the durable efficacy of RP1 and RP2. During the event, Replimune provided a data update from the Phase 2 cohorts of RP1 in combination with Opdivo in patients with melanoma and CSCC and other non-melanoma skin cancers and from the RP2 Phase 1 monotherapy cohort in patients with difficult-to-treat cancers. In addition to these updates, Replimune presented initial data with RP2 in combination with Opdivo. The RP1 data presented showed compelling depth and durability of response with RP1 that strongly supports the ongoing studies with registrational intent in CSCC and anti-PD-1 failed melanoma. The RP2 monotherapy and combination data presented also showed compelling activity in patients with immune insensitive tumors and with anti-PD-1 failed disease.
Announced intention to initiate a development program in patients with liver metastases from various cancer types. In June, the Company announced its intention to initiate a development program for patients with liver metastases from various cancer types based on preliminary data in which durable clinical responses have been observed following treatment with RP1 in combination with Opdivo and RP2 alone and in combination with Opdivo. The Company also intends to further evaluate whether RP2 and/or RP3 will be used in this program and present the detailed development plan in the first quarter of 2022.
First RP1 batches produced and filled at state-of-the-art manufacturing facility. Work to compare these batches to the contract manufactured material used in the Company’s clinical studies is ongoing. RP1 batches produced and filled at the Company’s 63,000-square-foot manufacturing facility in Framingham, MA, will be released once comparability work has been completed. Technology transfer and process development work for RP2 and RP3 are underway in readiness for bringing the facility on-line to support all of the Company’s clinical development activities.
Program Highlights*

CERPASS – Registration directed Phase 2 clinical trial in CSCC

RP1 in combination with Libtayo (cemiplimab) in CSCC: The Company continues to actively enroll patients in CERPASS, its registration directed, global, randomized Phase 2 study of RP1 in combination with Libtayo vs. Libtayo alone in patients with advanced CSCC. The Company recently submitted an amended protocol to the U.S. Food and Drug Administration (FDA) adding complete response (CR) rate as an independent primary endpoint, in addition to overall response rate (ORR), and with a reduction in sample size from 240 patients to 180 patients. The Company expects to complete enrollment in time for the primary data read-out to be triggered in late 2022.
IGNYTE – multi cohort Phase 2 clinical trial of RP1 combined with Opdivo

Anti-PD-1 failed melanoma cohort: The Company’s 125-patient cohort in the IGNYTE Phase 2 clinical trial of RP1 in combination with Opdivo continues to actively enroll patients. While the Company still expects to release data from this cohort in late 2022, in order to document sufficient durability of response, an important secondary endpoint of the study, the timing of the primary analysis upon which a filing is intended to be made is expected to be extended by approximately 6 months from year end 2022.
Non-melanoma skin cancer (NMSC) cohort: The Company has enrolled 29 of the 30-patient PD-1 naïve cohort of RP1 in combination with Opdivo in non-melanoma skin cancers and continues to enroll patients with anti-PD-1 failed NMSC. The Company expects to provide initial data from the anti-PD-1 failed patients in the first quarter of 2022.
Anti-PD(L)-1 failed non-small cell lung cancer (NSCLC) cohort: Dosing is underway in a 30-patient cohort of RP1 in combination with Opdivo in anti-PD(L)-1 failed NSCLC. A planned amendment to the IGNYTE protocol also includes modifications to the patient eligibility criteria which are expected to enhance enrollment into the trial. The Company now plans to provide initial data from this cohort in the first quarter of 2022.
MSI-H/dMMR tumor cohort: Due to development challenges in the anti-PD-1 naïve setting, the Company has decided to not pursue RP1 with Opdivo for the treatment of anti-PD-1 naïve patients with MSI-H/dMMR tumors, but instead amend the clinical trial protocol to enroll patients with anti-PD-1 failed disease. This complements other cohorts in the clinical trial where patients with anti-PD-1 failed disease of other tumor types are being enrolled.
ARTACUS – Phase 1b/2 clinical trial of RP1 as monotherapy in solid organ transplant recipients with skin cancers

The Company is currently enrolling its clinical trial assessing the safety and efficacy of RP1 in liver and kidney transplant recipients with CSCC. The protocol has recently been amended to now enroll up to 65 patients with potentially registrational intent. The Company now expects to present initial data from this clinical trial in the first quarter of 2022.
RP2 and RP3

RP2 alone and in combination with Opdivo in difficult-to-treat cancers: The Company has fully enrolled the initial 30-patient cohort evaluating RP2 combined with Opdivo in difficult-to-treat cancers. The Company remains on track to provide updated data from this program in the second half of 2021. The Company intends to expand this clinical trial to provide further signal confirmation for the treatment of patients with liver metastases from various tumor types. A protocol amendment to facilitate the expansion is expected to be made in the third quarter of 2021.
RP3 alone and in combination with anti-PD-1 therapy: The Phase 1 clinical trial evaluating RP3 alone in solid tumor patients is actively recruiting patients. Initial data from this cohort of the Phase 1 trial is now expected to be presented in the first quarter of 2022. In addition to this cohort, the Company expects to begin enrolling a cohort evaluating RP3 in combination with anti-PD-1 therapy in solid tumor patients by the end of 2021, with focus on patients with lung, breast and gastrointestinal cancers including colorectal cancer.
RP2 and/or RP3 in patients with liver metastases from a range of tumor types: Based on the observation of the clinical responses in patients with liver metastases from a range of difficult-to-treat tumor types following treatment with RP1 in combination with Opdivo and RP2 alone and in combination with Opdivo, the Company plans to initiate a clinical development program with RP2 and/or RP3 with particular focus on patients with liver metastases from a range of prevalent cancer types. The Company expects to initiate a multi-tumor type Phase 2 clinical program with RP2 and/or RP3 in these patients around mid-year 2022. The details of this development program, including tumor types and setting, are intended to be disclosed in first quarter of 2022.
*Program Highlight dates are on a calendar-year basis.

Financial Highlights

Cash Position: As of June 30, 2021, cash, cash equivalents and short-term investments were $458.3 million, as compared to $476.3 million as of March 31, 2021. This decrease was primarily related to cash utilized in operating activities in advancing our expanded clinical development plan.

Based on the current operating plan, Replimune believes that existing cash and cash equivalents and short-term investments will fund operating expenses and capital expenditure requirements into the second half of 2024, excluding any confirmatory trial required by the FDA or other regulatory body.
R&D Expenses: Research and development expenses were $18.6 million for the first quarter ended June 30, 2021, as compared to $12.2 million for the first quarter ended June 30, 2020. This increase was primarily due to increased clinical and manufacturing expenses driven by the Company’s lead programs and increased personnel expenses. Research and development expenses included $2.5 million in stock-based compensation expenses for the first quarter ended June 30, 2021.
G&A Expenses: General and administrative expenses were $8.8 million for the first quarter ended June 30, 2021, as compared to $5.7 million for the first quarter ended June 30, 2020. The increase was primarily driven by personnel-related costs, professional fees, and facility expansion. General and administrative expenses included $3.8 million in stock-based compensation expenses for the first quarter ended June 30, 2021.
Net Loss: Net loss was $27.3 million for the first quarter ended June 30, 2021, as compared to a net loss of $17.5 million for the first quarter ended June 30, 2020.
About CERPASS
CERPASS is Replimune’s registration-directed randomized, global Phase 2 clinical study to compare the effects of Libtayo alone versus a combination of Libtayo and Replimune’s investigational oncolytic immunotherapy RP1. The clinical trial will enroll 180 patients with locally advanced or metastatic cutaneous squamous cell carcinoma (CSCC) who are naïve to anti-PD-1 therapy. The trial will evaluate complete response (CR) rate and overall response rate (ORR) as its two primary efficacy endpoints as assessed by independent review, as well as duration of response, progression-free survival (PFS), and overall survival (OS) as its secondary endpoints. The study is being conducted under a clinical trial collaboration agreement with Regeneron in which the costs of the trial are shared and full commercial rights retained by Replimune. Libtayo is being jointly developed by Regeneron and Sanofi.
Libtayo is a registered trademark of Regeneron.

About IGNYTE
IGNYTE is Replimune’s multi-cohort Phase 1/2 trial of RP1 plus Opdivo. There are 4 tumor specific cohorts currently enrolling in this trial including a 125-patient extension cohort of RP1 combined with Opdivo in anti-PD-1 failed cutaneous melanoma. This cohort was initiated after completing enrollment in a prior Phase 2 cohort in the same trial of approximately 30 patients with melanoma. The additional cohorts are studying RP1 in combination with Opdivo in non-melanoma skin cancers which includes both naïve and anti-PD-1 failed CSCC, in microsatellite instability high, or MSI-H/dMMR tumors and anti-PD(L)-1 failed non-small cell lung cancer, or NSCLC. This trial is being conducted under a collaboration and supply agreement with Bristol-Myers Squibb Company.
Opdivo is a registered trademark of Bristol-Myers Squibb Company.

About RP1
RP1 is Replimune’s lead Immulytic product candidate and is based on a proprietary new strain of herpes simplex virus engineered to maximize tumor killing potency, the immunogenicity of tumor cell death and the activation of a systemic anti-tumor immune response.

About RP2 & RP3
RP2 and RP3 are derivatives of RP1 that express additional proteins. RP2 expresses an anti-CTLA-4 antibody-like molecule and RP3 additionally expresses the immune co-stimulatory pathway activating proteins CD40L and 4-1BBL. RP2 and RP3 are intended to provide targeted and potent delivery to the sites of immune response initiation in the tumor and draining lymph nodes, with the goal of focusing systemic immune-based efficacy on tumors and limiting off-target toxicity.

On August 6, 2021 Scientists at Case Western Reserve University reported that they have used Artificial Intelligence (AI) to identify new biomarkers for breast cancer that can predict whether the cancer will return after treatment—and which can be identified from routinely acquired tissue biopsy samples of early-stage breast cancer (Press release, Case Western Reserve University, AUG 6, 2021, View Source [SID1234586000]).

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The key to that initial determination is collagen, a common protein found throughout the body, including in breast tissue. Previous research had suggested that the collagen network, or arrangement of the fibers, relates strongly to breast cancer aggressiveness. But this work by Case Western Reserve researchers definitively demonstrated collagen’s critical role—using only standard tissue biopsy slides and AI.

The researchers, using machine-learning technology to analyze a dataset of digitized tissue samples from breast cancer patients, were able to prove that a well-ordered arrangement of collagen is a key prognostic biomarker for an aggressive tumor and a likely recurrence.

Conversely, they showed that a disordered or broken-down collagen infrastructure not only indicates a better outcome, but actually promotes one. They also found that the disordered collagen network prevents an otherwise aggressive tumor from migrating out of the breast tissue and helps prevent its return after various cancer treatments like chemotherapy.

Haojia Li
"It sounds counter-intuitive, but the collagen fibers play a role in tumor migration," said Anant Madabhushi, the Donnell Institute Professor of Biomedical Engineering at Case Western Reserve and head of the Center for Computational Imaging and Personalized Diagnostics (CCIPD). "One way to understand it is to say that if the collagen ‘highway’ is in terrible shape, it’s more difficult for the tumor to migrate, but if it’s smooth and organized, it makes it easier for the tumor to hitch a ride."

Doctoral student Haojia Li led the research, which was published in the journal npj Breast Cancer. Other authors included Pingfu Fu, professor of Population and Quantitative Health Sciences at the Case Western Reserve School of Medicine, and others from several institutions.

Simple tissue slides, complex computing

Li said the project was important because:

It validates findings from other published research that suggested highly organized collagen indicates a worse prognosis.
It was accomplished with digitized images of those simple tissue slides, suggesting this method could become part of a pathologist’s routine. Current methods for examining and investigating the collagen architecture require an expensive and less common electron microscope.
"Our method would make predicting outcomes much more available to more doctors and in hospitals which don’t have the resources to have an advanced imaging microscope," Li said. "That’s why this is so exciting—because it can give the physician the information he or she needs to guide how aggressively to treat the cancer."

The computational work was done in 2020, based on a dataset of routine tissue samples, known as H&E (hematoxylin and eosin) stain slides, taken from patients diagnosed with early stage Estrogen Receptor Positive (ER+) breast cancer.

Breast cancer is the second leading cause of cancer death among women in the United States, with approximately 80% of these cancers being ER+ and 64% being early stage, Li said.

Anant Madabhushi
Anant Madabhushi
Madabhushi said that because the models built by his team were validated on a completed clinical trial data set, it would "provide a higher level of evidence with regard to the validity of the Collagen signature" and that it would also function as a "natural segue into prospective clinical trial validation."

Madabhushi established the CCIPD at Case Western Reserve in 2012. The lab now includes over 70 researchers and is a global leader in the detection, diagnosis and characterization of various cancers and other diseases, including breast cancer, by meshing medical imaging, machine learning and AI.

Some of the lab’s most recent work, in collaboration with New York University and Yale University, has used AI to predict which lung cancer patients would benefit from adjuvant chemotherapy based on tissue-slide images. That advancement was named by Prevention Magazine as one of the top 10 medical breakthroughs of 2018.

On August 6, 2021 Castle Biosciences, Inc. (Nasdaq: CSTL), a dermatologic diagnostics company providing personalized genomic information to inform treatment decisions, reported that data on two of its skin cancer gene expression profile (GEP) tests will be featured in oral presentations during the 2021 American Academy of Dermatology (AAD) Summer Meeting, being held Aug. 5-8, 2021 (Press release, Castle Biosciences, AUG 6, 2021, View Source [SID1234586041]).

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Presentation title, date and times are as follows:

Title: Integrating 31-gene expression profiling with clinicopathologic features improves prognostication of recurrence and metastasis in patients with stage I-III cutaneous melanoma
Session: S011 – Frontiers in Research, Science and Technology (FiRST)
Presenter: Nicholas Taylor, M.D., Ph.D., Zitelli and Brodland Skin Cancer Center, Pittsburgh and Central Dermatology Center, Chapel Hill, N.C.
Date: Saturday, Aug. 7, 2021
Time: 1:50 p.m.-2:02 p.m. Eastern time, Ballroom B

Title: Risk assessment by the 40-gene expression profile (40-GEP) test further stratifies risk of metastasis in a subset of high-risk cutaneous squamous cell carcinoma (cSCC) patients meeting T1 staging criteria​
Session: S011 – Frontiers in Research, Science and Technology (FiRST)
Presenter: Aaron Farberg, M.D., Baylor University Medical Center, Dallas
Date: Saturday, Aug. 7, 2021
Time: 2:32 p.m.-2:44 p.m. Eastern time, Ballroom B

Specific details will be released following the oral presentations.

About DecisionDx-Melanoma

DecisionDx-Melanoma is a gene expression profile test that uses an individual patient’s tumor biology to predict individual risk of cutaneous melanoma metastasis or recurrence, as well as sentinel lymph node positivity, independent of traditional staging factors, and has been studied in more than 5,700 patient samples. Using tissue from the primary melanoma, the test measures the expression of 31 genes. The test has been validated in four archival risk of recurrence studies of 901 patients and six prospective risk of recurrence studies including more than 1,600 patients. To predict likelihood of sentinel lymph node positivity, the Company utilizes its proprietary algorithm, i31-GEP, to produce an integrated test result. i31-GEP is an artificial intelligence-based neural network algorithm (independently validated in a cohort of 1,674 prospective, consecutively tested patients with T1-T4 cutaneous melanoma) that integrates the DecisionDx-Melanoma test result with the patient’s traditional clinicopathologic features. Impact on patient management plans for one of every two patients tested has been demonstrated in four multicenter and single-center studies including more than 560 patients. The consistent performance and accuracy demonstrated in these studies provides confidence in disease management plans that incorporate DecisionDx-Melanoma test results. Through March 31, 2021, DecisionDx-Melanoma has been ordered more than 73,396 times for use in patients with cutaneous melanoma.

More information about the test and disease can be found at www.CastleTestInfo.com.

About DecisionDx-SCC

DecisionDx-SCC is a 40-gene expression profile test that uses an individual patient’s tumor biology to predict individual risk of cutaneous squamous cell carcinoma metastasis for patients with one or more risk factors. The test result, in which patients are stratified into a Class 1 (low), 2A (moderate) or 2B (high) risk category, predicts individual metastatic risk to inform risk-appropriate management.

Peer-reviewed publications have demonstrated that DecisionDx-SCC is an independent predictor of metastatic risk and that integrating DecisionDx-SCC with current prognostic methods can add positive predictive value to clinician decisions regarding staging and management.

More information about the test and disease can be found at www.CastleTestInfo.com.

On August 6, 2021 Syntrix reported that A new study led by researchers at NYU Grossman School of Medicine and its Laura and Isaac Perlmutter Cancer Center revealed for the first time that activation of CXCR2 may be a general resistance-response to non-small cell lung cancer (NSCLC) treatments that inhibit the RAS/RAF/MEK/ERK signaling pathway, and may explain why many patients with lung cancer do not respond to such treatments (Press release, Syntrix, AUG 6, 2021, View Source [SID1234586025]).

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Published in Cancer Discovery, findings from the study show that inhibition of CXCR2 signaling with SX-682 increased sensitivity of lung cancer to both investigational and FDA-approved therapies targeting the RAS/RAF/MEK/ERK signaling pathway.

Lung cancer is the most common cause of cancer-related death worldwide, with over 1.8 million lung cancer deaths annually and approximately 236,000 new cases in the U.S. NSCLC accounts for approximately 84% of new lung cancer diagnoses each year.

"These findings have major clinical implications with many existing and new NSCLC treatments inhibiting the RAS/RAF/MEK/ERK signaling pathway, including targeted therapies such as osimertinib to mutant EGFR, and sotorasib and adagrasib (MRTX849) to mutant RAS," said John A. Zebala, MD, PhD, co-author of the study and President at Syntrix Pharmaceuticals.

Using cell culture and mouse models, the NYU team demonstrated how inhibition of SHP2 (SHP2 is required for KRAS activation), KRAS, EGFR or MEK caused activation of CXCR2 signaling that drew granulocytic myeloid-derived suppressor cells (gMDSCs) into tumors. The infiltrating gMDSCs impaired the anti-tumor actions of T cells. The researchers found the same effects on CXCR2 signaling and gMDSC influx in tumors from patients treated with the KRAS G12C-specific inhibitor, adagrasib.

The researchers found that combining SX-682 with SHP2 inhibition in an extremely aggressive mouse tumor model significantly depleted gMDSC infiltration and generated CD8+ effector T cells with strong anti-tumor activity. Compared with SHP2 inhibition alone, the combination completely suppressed tumor growth after two weeks of treatment, the time point at which untreated tumor-bearing mice started to die. The combination also prolonged survival (median: 38 days) compared to SHP2 inhibition alone (median: 27 days) or SX682 alone (median: 21.5 days), more than doubling overall survival compared with untreated (median: 18 days) mice. The team found no toxicity after five weeks of combination treatment. The study concludes that the results support testing of RAS/ERK pathway inhibitors with SX-682 in NSCLC patients.

ABOUT SX-682: SX-682 is an oral allosteric small-molecule inhibitor of CXCR1 and CXCR2 (CXCR1/2) being investigated in several Phase 1/2 clinical trials. CXCR1/2 are a combined "master switch" of the tumor microenvironment. Clinical studies have shown an inverse correlation between blood CXCR1/2 ligands and immune-checkpoint blockade (ICB) response and survival. SX-682 has been validated in major solid tumor models, where it exhibits mono-agent activity, blocks metastasis, depletes MDSCs, activates infiltration and killing by immune effector cells, reverses chemo-resistance, and enhances ICB.

On August 6, 2021 ANI Pharmaceuticals, Inc. ("ANI" or the "Company") (NASDAQ: ANIP) reported business highlights and financial results for the three and six months ended June 30, 2021 (Press release, ANI Pharmaceuticals, AUG 6, 2021, View Source [SID1234586042]).

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Second Quarter and Recent Business Highlights:

The Company refiled its supplemental new drug application ("sNDA") for Cortrophin Gel with the U.S. Food and Drug Administration ("FDA" or the "Agency") on June 29, 2021; goal date is October 29, 2021;
Acquisition of Novitium Pharma LLC ("Novitium"), a privately held, New Jersey-based high-growth pharmaceutical company, is on track to close in the second half of 2021, pending Federal Trade Commission ("FTC") clearance and customary closing conditions; and
Acquired new drug applications ("NDAs") from Sandoz Inc. for a portfolio of dermatology products.
Second Quarter 2021 Financial Highlights:

Net revenues were $48.6 million compared to $48.5 million in Q2 2020.
GAAP net loss was $14.1 million, and diluted GAAP loss per share was ($1.17).
Adjusted non-GAAP EBITDA was $13.1 million.
Adjusted non-GAAP diluted earnings per share was $0.67.
Cash and cash equivalents were $24.3 million, net accounts receivable was $92.6 million, and face value of debt was $205.7 million as of June 30, 2021.
"In the second quarter, we made meaningful progress executing on the four pillars of our growth strategy. Most notably, on June 29, we refiled our sNDA with the FDA for Cortrophin Gel. Since that time, we have engaged in productive communication with the Agency. In support of this important asset, we are continuing to strengthen our leadership team to drive our commercial strategy forward. This refiling is a significant milestone for the organization, and I am proud of what we have accomplished to date. If approved, Cortrophin has the potential to improve access for patients in need and transform ANI," said Nikhil Lalwani, President and CEO of ANI.

"We appreciate our stockholders’ overwhelming support for the Novitium acquisition at our Annual Meeting of Stockholders. The transaction is on track to close later this year, and planning for maximizing the value of the combined assets for all stakeholders is well under way. We have also integrated the four dermatology products acquired from Sandoz, thus expanding our branded portfolio. It is an important and exciting time for ANI, and we look forward to providing updates as we move forward on our growth journey," concluded Lalwani.

Second Quarter 2021 Financial Results

Net Revenues
(in thousands)

Three Months Ended
June 30,

2021

2020

Generic pharmaceutical products

$

34,199

$

33,400

Branded pharmaceutical products

11,038

10,633

Contract manufacturing

2,322

2,900

Royalty and other income

1,066

1,537

Total net revenues

$

48,625

$

48,470

Net revenues for generic pharmaceutical products were $34.2 million during the three months ended June 30, 2021, an increase of 2.4% compared to $33.4 million for the same period in 2020. From a product perspective, the net increase was due to increased sales of Fenofibrate, Potassium Citrate Extended Release, Vancomycin Oral Solution, and the second quarter 2021 launch of Nicardipine. These increases were somewhat tempered by declines in sales of Methazolamide, Miglustat, Penicillamine, and Mixed Amphetamine Salts.

Net revenues for branded pharmaceutical products were $11.0 million during the three months ended June 30, 2021, an increase of 3.8% compared to $10.6 million for the same period in 2020. The increase primarily reflects the launch of the products acquired in the Sandoz, Inc. acquisition in the second quarter of 2021 and increased sales of InnoPran XL. These increases were tempered by decreased revenues of Atacand and Arimidex.

Contract manufacturing revenues were $2.3 million during the three months ended June 30, 2021, a decrease of 19.9% compared to $2.9 million for the same period in 2020, due to a decreased volume of orders from contract manufacturing customers in the period.

Royalty and other revenues were $1.1 million during the three months ended June 30, 2021, a decrease of $0.4 million from $1.5 million for the same period in 2020, primarily due to decreases in product development revenues earned by ANI Canada and a the non-recurrence of royalty revenue related to Yescarta. These decreases were tempered by licensing revenues earned during the three months ended June 30, 2021.

Operating expenses increased by 7.4% to $64.2 million for the three months ended June 30, 2021, from $59.8 million in the prior year period.

Cost of sales, excluding depreciation and amortization, increased by $1.6 million to $22.3 million in the second quarter of 2021 from prior year period, primarily as a result of increased volumes in the current year period. The increase was tempered by a $1.2 million decrease related to a decrease in sales of products subject to profit sharing arrangements.

Research and development expenses decreased to $2.8 million in the second quarter of 2021 from $3.0 million in the second quarter of 2020, primarily due to the non-recurrence of $0.4 million of 2020 severance related expense associated with the restructuring of our internal Cortrophin development team.

Selling, general and administrative expenses decreased by $2.4 million in the second quarter of 2021 to $18.8 million compared to $21.2 million in the comparable quarter in 2020. The decrease primarily reflects the non-recurrence of $6.5 million of termination benefit expenses related to the 2020 departure of the Company’s former President and CEO. The Company also incurred recruitment and related legal charges associated with the CEO search in the second quarter 2020. These decreases were offset by $1.7 million of transaction expenses related to the pending Novitium acquisition and $2.5 million in sales and marketing expenses related to Cortrophin pre-launch activities incurred during the three months ended June 30, 2021.

On August 3, 2021, the Company entered into a Settlement Agreement with Arbor Pharmaceuticals, LLC to resolve all claims related to a civil proceeding which was pending trial later this month. Under the terms of the agreement, ANI will pay Arbor $8.4 million and Arbor will dismiss all claims against ANI. Neither party admitted wrongdoing in reaching this settlement. The Company recorded an $8.4 million charge to the second quarter Statement of Operations and will pay the settlement from cash on the balance sheet.

Depreciation and amortization increased by 1.1% in the second quarter of 2021 to $11.3 million from $11.2 million in the comparable quarter in 2020, primarily due to the amortization of the NDAs acquired in April 2021 from Sandoz Inc., partially offset by assets that became fully amortized in 2020.

Net loss for the second quarter of 2021 was $14.1 million as compared to net loss of $12.3 million in the prior year period. Diluted loss per share for the three months ended June 30, 2021 was ($1.17), compared to diluted loss per share of ($1.03) in the prior year period.

Adjusted non-GAAP diluted earnings per share was $0.67 in the second quarter of 2021 compared to $0.69 in the second quarter of 2020.

For reconciliations of adjusted non-GAAP EBITDA and adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure, please see Table 3 and Table 4, respectively.

Liquidity

As of June 30, 2021, the Company had $24.2 million in unrestricted cash and cash equivalents plus $92.6 million in net accounts receivable. The Company had $205.7 million (face value) in outstanding debt as of June 30, 2021.

Conference Call

As previously announced, ANI Pharmaceuticals management will host its second quarter 2021 conference call as follows:

Date Friday, August 6, 2021
Time 8:30 a.m. ET
Toll free (U.S.) (866) 342-8591

Webcast (live and replay) www.anipharmaceuticals.com, under the "Investors" section
A replay of the conference call will be available within two hours of the call’s completion and will remain accessible for one week by dialing 800-695-0974 and entering access code 5412658.

Non-GAAP Financial Measures

Adjusted non-GAAP EBITDA

ANI’s management considers adjusted non-GAAP EBITDA to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by non-cash stock-based compensation and differences in capital structures, tax structures, capital investment cycles, ages of related assets, and compensation structures among otherwise comparable companies. Management uses adjusted non-GAAP EBITDA when analyzing Company performance.

Adjusted non-GAAP EBITDA is defined as net income, excluding tax expense or benefit, interest expense, (net), other expense, (net), depreciation, amortization, the excess of fair value over cost of acquired inventory, non-cash stock-based compensation expense, expense from acquired in-process research and development, Novitium transaction expenses, Cortrophin pre-launch charges, asset impairments, legal settlement expense, and certain other items that vary in frequency and impact on ANI’s results of operations. Adjusted non-GAAP EBITDA should be considered in addition to, but not in lieu of, net income or loss reported under GAAP. A reconciliation of adjusted non-GAAP EBITDA to the most directly comparable GAAP financial measure is provided below.

Adjusted non-GAAP Net Income

ANI’s management considers adjusted non-GAAP net income to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, Cortrophin pre-launch charges, acquired in-process research and development ("IPR&D") expense, Novitium transaction expenses, asset impairments, legal settlement expense, and certain other items that vary in frequency and impact on ANI’s results of operations. Management uses adjusted non-GAAP net income when analyzing Company performance.

Adjusted non-GAAP net income is defined as net income, plus the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation expense, Novitium transaction expenses, non-cash interest expense, depreciation and amortization expense, expense from acquired in-process research and development, Cortrophin pre-launch charges, asset impairments, legal settlement expense, and certain other items that vary in frequency and impact on ANI’s results of operations, less the tax impact of these adjustments calculated using an estimated statutory tax rate. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP net income should be considered in addition to, but not in lieu of, net income reported under GAAP. A reconciliation of adjusted non-GAAP net income to the most directly comparable GAAP financial measure is provided below.

Adjusted non-GAAP Diluted Earnings per Share

ANI’s management considers adjusted non-GAAP diluted earnings per share to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, Cortrophin pre-launch charges, acquired IPR&D expense, Novitium transaction expenses, asset impairments, legal settlement expense, and certain other items that vary in frequency and impact on ANI’s results of operations. Management uses adjusted non-GAAP diluted earnings per share when analyzing Company performance.

Adjusted non-GAAP diluted earnings per share is defined as adjusted non-GAAP net income, as defined above, divided by the diluted weighted average shares outstanding during the period. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP diluted earnings per share should be considered in addition to, but not in lieu of, diluted earnings or loss per share reported under GAAP. A reconciliation of adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure is provided below.