On November 5, 2020 Alpine Immune Sciences, Inc. (NASDAQ:ALPN), a leading clinical-stage immunotherapy company focused on developing innovative treatments for cancer and autoimmune/inflammatory diseases, reported the company will release third quarter 2020 financial results on Thursday, November 12, 2020 after the close of market (Press release, Alpine Immune Sciences, NOV 5, 2020, View Source [SID1234570058]). Alpine will host a corresponding conference call and live webcast at 4:30 p.m. ET/1:30 p.m. PT on the same day to discuss the results and provide a corporate update.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Conference Call and Webcast Details

To access the live call by phone, dial (800) 816-3005 (domestic) or (857) 770-0069 (international) and referencing the conference ID: 4382628. A live webcast of the presentation will be available online in the investor relations section of the company’s website at View Source A replay of the presentation will be available on the company website for 90 days following the webcast.

On November 5, 2020 Geron Corporation (Nasdaq: GERN), a late-stage clinical biopharmaceutical company, reported financial results for the third quarter ended September 30, 2020 (Press release, Geron, NOV 5, 2020, View Source [SID1234570057]). The Company will host a conference call today at 4:30 p.m. ET to discuss third quarter financial results and current events. As of September 30, 2020, Geron had approximately $274 million in cash and investments. Based on current planning assumptions, the Company estimates its current financial resources to be sufficient for its operations until the end of 2022.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"In the third quarter, we executed on our clinical, regulatory and publication plans for the imetelstat program," said John A. Scarlett, M.D., Chairman and Chief Executive Officer. "We continued to advance both the enrollment of the ongoing IMerge Phase 3 clinical trial and start-up activities for the upcoming Phase 3 clinical trial in refractory myelofibrosis, which we have named IMpactMF. We also secured European orphan drug designation in lower risk MDS; received acceptance for presentation of all ten abstracts submitted to the ASH (Free ASH Whitepaper) Annual Meeting; and had the IMerge Phase 2 data published in the well-respected Journal of Clinical Oncology. In addition, we strengthened our balance sheet with a loan facility that provides additional financial flexibility to support our plans for imetelstat development going forward."

Dr. Scarlett added, "We continue to work toward completing enrollment in IMerge in the first quarter of 2021. However, the recent resurgence of the COVID-19 pandemic is causing an uncertain and unpredictable impact on clinical trial activities. Due to these challenges, we now believe the trial will most likely be fully enrolled in the second quarter of 2021. As long as enrollment is complete by the end of the first half of 2021, we continue to expect top-line results from IMerge to be available in the second half of 2022, as previously guided. Based on current feedback from clinical sites planned to participate in IMpactMF, we continue to expect that trial to be open for screening and enrollment in the first quarter of 2021."

Current Events – Clinical Development

Ongoing IMerge Phase 3 Clinical Trial in Myelodysplastic Syndromes (MDS)

Enrollment for the IMerge Phase 3 clinical trial continued to progress in the third quarter. In August 2020, all 92 of the originally planned clinical sites were open for enrollment.

To address enrollment delays related to the COVID-19 pandemic experienced earlier this year, Geron implemented certain enrollment boosting activities, including engaging clinical science liaisons to interface directly with clinical sites and expanding the number of clinical sites to diversify the participating countries. The Company currently expects to add approximately 30 new clinical sites in several countries, including new sites in four additional countries that had not previously participated in IMerge. The Company expects almost all of the new sites to be open for screening and enrollment by the end of 2020.

Under current planning assumptions, the Company expects enrollment in the IMerge Phase 3 trial to be complete in the second quarter of 2021 and continues to expect top-line results to be available in the second half of 2022. This anticipated timing is subject to potential delays or interruptions associated with the evolving effects of the ongoing COVID-19 pandemic, which causes unpredictability when projecting future enrollment trends.

Upcoming IMpactMF Phase 3 Clinical Trial in Myelofibrosis (MF)

The Phase 3 clinical trial in refractory MF with overall survival (OS) as its primary endpoint, named IMpactMF, is expected to be open for screening and enrollment in the first quarter of 2021. Geron expects to engage over 150 sites across North America, South America, Europe and Asia. The clinical trial protocol has been finalized and is available on clinicaltrials.gov. Trial start-up activities are ongoing and include site selection, engagement of vendors, and building of the clinical trial database.

The final analysis for OS is event-driven and is planned to be conducted after more than 50% of the patients enrolled in the trial have died. An interim analysis of OS is planned to be conducted after approximately 70% of the total projected number of events for the final analysis have occurred. If the pre-specified, statistically significant difference in OS between the two treatment arms is met at the interim analysis, it is possible that data from the interim analysis could support a registration filing. Both the planned interim and final analyses are event-driven and could occur on different timelines than currently expected.

Under current planning assumptions, Geron plans to complete patient enrollment in the second half of 2022, to conduct an interim analysis in the first half of 2023 and to conduct a final analysis in the first half of 2024.

Financial Resources to Reach Clinical Milestones

The Company’s current cash position reflects net proceeds of approximately $140 million from a public offering in May 2020 and approximately $24 million in initial net proceeds from a $75 million loan facility that closed at the end of the third quarter. The loan facility is available through year-end 2022 in three tranches subject to the achievement of certain clinical, financial and regulatory milestones. The loan facility provides access to non-dilutive financial resources to support the imetelstat development program, as well as working capital and general corporate purposes.

Third Quarter and Year – to – Date 2020 Results

For the third quarter of 2020, the Company reported a net loss of $19.7 million, or $0.06 per share, compared to $15.2 million, or $0.08 per share, for the comparable 2019 period. Net loss for the first nine months of 2020 was $51.8 million, or $0.20 per share, compared to $39.5 million, or $0.21 per share, for the comparable 2019 period.

Revenues for the three and nine months ended September 30, 2020 were $108,000 and $203,000, respectively, compared to $131,000 and $289,000 for the comparable 2019 periods. Revenues in 2020 and 2019 primarily reflect estimated royalties from sales of cell-based research products from the Company’s divested stem cell assets. In connection with the divestiture of Geron’s human embryonic stem cell assets, including intellectual property and proprietary technology, to Lineage Cell Therapeutics, Inc. (formerly BioTime, Inc., which acquired Asterias Biotherapeutics, Inc.) in 2013, Geron is entitled to receive royalties on future product sales.

Total operating expenses for the three and nine months ended September 30, 2020 were $20.1 million and $53.9 million, respectively, compared to $16.1 million and $42.8 million for the comparable 2019 periods.

Research and development expenses for the three and nine months ended September 30, 2020 were $13.6 million and $35.3 million, respectively, compared to $11.1 million and $27.1 million for the comparable 2019 periods. The increase in research and development expenses for the three and nine months ended September 30, 2020, compared to the same periods in 2019, primarily reflects increased costs to support the ongoing IMerge Phase 3 and start-up activities for the upcoming IMpactMF Phase 3 clinical trial. The increase also includes higher costs in connection with validating the imetelstat manufacturing process at contract manufacturers and additional personnel-related costs for expansion of the development team in 2019.

General and administrative expenses for the three and nine months ended September 30, 2020 were $6.5 million and $18.6 million, respectively, compared to $5.0 million and $15.6 million for the comparable 2019 periods. The increase in general and administrative expenses for the three and nine months ended September 30, 2020, compared to same periods in 2019, primarily reflects higher personnel-related expenses for additional general and administrative headcount to support growing operational activities and increased legal costs.

Interest and other income for the three and nine months ended September 30, 2020 was $504,000 and $1.7 million, respectively, compared to $1.0 million and $3.3 million for the comparable 2019 periods. The decrease in interest and other income for the three and nine months ended September 30, 2020, compared to same periods in 2019, primarily reflects lower yields on the Company’s marketable securities portfolio due to declining interest rates.

2020 Financial Guidance Reaffirmed

The Company continues to expect its 2020 operating expense burn to range from $70 to $75 million. This guidance includes new costs for start-up activities associated with the IMpactMF Phase 3 clinical trial and additional costs for the expansion of clinical sites for the IMerge Phase 3 clinical trial.

Conference Call

Geron will host a conference call at 4:30 p.m. ET on Thursday, November 5, 2020 to discuss third quarter financial results and recent events.

A live, listen-only webcast will be available on the Company’s website at www.geron.com/investors/events. If you are unable to listen to the live call, an archived webcast will be available on the Company’s website for 30 days.

Participants may access the conference call live via telephone by pre-registering online using the following link, View Source Upon registration, a phone number, Direct Event Passcode and unique Registrant ID will be sent via email. This information will be needed in order to enter the conference call. Participants are advised to pre-register at least 10 minutes prior to joining the call.

About Imetelstat

Imetelstat is a novel, first-in-class telomerase inhibitor exclusively owned by Geron and being developed in hematologic myeloid malignancies. Early clinical data suggest imetelstat may have disease-modifying activity through the apoptosis of malignant stem and progenitor cells, which allows potential recovery of normal hematopoiesis. Geron’s imetelstat development program includes two registration-enabling studies, IMerge, an ongoing Phase 2/3 clinical trial in lower risk myelodysplastic syndromes (MDS), and IMpactMF, an upcoming Phase 3 clinical trial in refractory myelofibrosis (MF), expected to be open for patient screening and enrollment in the first quarter of 2021. Imetelstat has been granted Fast Track designation by the United States Food and Drug Administration for both the treatment of patients with non-del(5q) lower risk MDS who are refractory or resistant to an erythropoiesis-stimulating agent and for patients with Intermediate-2 or High-risk MF whose disease has relapsed after or is refractory to janus kinase (JAK) inhibitor treatment.

On November 5, 2020 Invitae Corporation (NYSE: NVTA), a leading medical genetics company, reported financial and operating results for the third quarter ended September 30, 2020 (Press release, Invitae, NOV 5, 2020, View Source [SID1234570056]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Invitae’s (NVTA) mission is to bring comprehensive genetic information into mainstream medical practice to improve the quality of healthcare for billions of people. www.invitae.com (PRNewsFoto/Invitae Corporation)

"Strategic, commercial and operating results in the third quarter continued to demonstrate the value and leverage available from our global, diversified business. These strong results are a testament to our unique combination of comprehensive menu, durable customer relationships and ability to execute," said Sean George, Ph.D., co-founder and chief executive officer of Invitae. "We further advanced clinical understanding of the importance of genetic information with the publication of several studies, including a collaboration supporting universal testing for cancer patients. Looking ahead, we believe recent acquisitions and integrations, coupled with our internal development efforts, will provide access to new and developing markets and improve ease-of-use for customers, enhancing our ability to meet the needs of patients and clinicians as the use of genetics in healthcare continues to accelerate."

Third Quarter 2020 Financial Results

Accessioned approximately 170,000 samples in the third quarter of 2020 compared to 129,000 samples in the third quarter of 2019. Billable volume was approximately 157,000 in the third quarter of 2020
Generated revenue of $68.7 million in the third quarter of 2020 compared to $56.5 million in revenue in the third quarter of 2019
Reported average cost per sample of $274 in the third quarter of 2020 compared to $249 average cost per sample in the third quarter of 2019. Non-GAAP average cost per sample was $247 in the third quarter of 2020
Achieved gross profit of $22.1 million in the third quarter of 2020 compared to $24.4 million of gross profit in the third quarter of 2019. Non-GAAP gross profit was $26.8 million in the third quarter of 2020
Total operating expense, excluding cost of revenue, for the third quarter of 2020 was $102.9 million. Non-GAAP operating expense was $102.6 million in the third quarter of 2020.

Net loss for the third quarter of 2020 was $102.9 million, or $0.78 net loss per share, compared to a net loss of $78.7 million in the third quarter of 2019, or $0.82 net loss per share. Non-GAAP net loss was $81.7 million, or $0.62 non-GAAP net loss per share, in the third quarter of 2020.

At September 30, 2020, cash, cash equivalents, restricted cash and marketable securities totaled $368.0 million. Net decrease in cash, cash equivalents and restricted cash for the quarter was $61.4 million. Cash burn was $64.9 million for the quarter.

Corporate and Scientific Highlights

Completed the transaction to bring ArcherDX, a leading genomics analysis company, into Invitae to create a global leader in comprehensive cancer genetics and precision oncology, bringing germline and somatic testing, liquid biopsy and tissue genomic profiling onto a single platform. With both centralized and distributed capabilities, Invitae is now uniquely positioned to provide flexibility in meeting customers’ needs.
Published significant studies underscoring the use of both germline and somatic sequencing in oncology:
A multi-year collaboration with researchers at Mayo Clinic published in JAMA Oncology evaluated universal germline genetic testing for solid tumor cancer patients. The study found one in eight patients with cancer had an inherited, cancer-related gene mutation, half of whom would not have been detected using a standard guidelines based approach and one-third of whom had their therapy changed as a result of their genetics. The data support changing the standard of care to include germline genetic testing for all solid tumor cancer patients.
A study published in JAMA Network Open showing tumor-only genetic sequencing misses medically actionable genetic variants in cancer patients that germline genetic tests identify, suggesting the use of both tumor and germline testing to provide the most complete and actionable genetic profiling to inform cancer treatment.
Data presented at the American Society of Human Genetics annual meeting, showed one in ten men with prostate cancer harbored genetic changes linked to hereditary cancer syndromes and three-quarters of those patients met criteria for changes in their cancer management or treatment based on their genetic findings. Study findings suggest common criteria used to restrict testing would miss clinically important changes for many patients and their families.
Began enrollment in a nationwide study to better understand the role of current genetic testing guidelines in ensuring prostate cancer patients receive testing to identify clinically relevant genetic variants that can inform prognosis and support access to targeted therapies.
Signed 32 biopharma partnership deals in the quarter.
Partnered with Pfizer to offer the BRCA Care genetic testing program, which provides sponsored, no-charge germline BRCA testing for patients diagnosed with HER2-negative locally advanced or metastatic breast cancer in different countries, beginning in Hong Kong, Oman, Qatar, Saudi Arabia, Taiwan and United Arab Emirates.
Signed two new partners to the Behind the Seizure program, bringing the total number of biopharma partners in this program to 10.
Added two additional partners to Invitae’s Detect programs providing no-charge genetic testing for conditions in which testing is underutilized and can improve diagnosis and treatment.
Announced the appointment of tech entrepreneur Kimber Lockhart to the company’s Board of Directors, noting her expertise and leadership in scaling engineering and digital tools.
Webcast and Conference Call Details
Management will host a conference call and webcast today at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss financial results and recent developments. To register for the conference call and webcast, please use one of the methods below. Upon registering, each participant will be provided with call details and a registrant ID.

Online registration: View Source

Phone registration: (888) 869-1189 or (706) 643-5902

The live webcast of the call and slide deck may be accessed here or by visiting the investors section of the company’s website at ir.invitae.com. A replay of the webcast and conference call will be available shortly after the conclusion of the call and will be archived on the company’s website.

On November 5, 2020 NantHealth, Inc. (NASDAQ-GS: NH), a provider of enterprise solutions that help businesses transform complex data into actionable insights, reported financial results for its third quarter ended September 30, 2020 (Press release, NantHealth, NOV 5, 2020, View Source [SID1234570055]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Our 2020 third quarter total software-related revenue increased to $18.7 million from $18.3 million for the same quarter last year and climbed 7% on a sequential quarterly basis," said Ron Louks, Chief Operating Officer, NantHealth. "The current year third quarter included a revenue contribution from our recently completed acquisition of OpenNMS. We are pleased to report that our gross margin remained strong at 60% of total revenue, selling, general and administrative expenses were lower, and our bottom line improved considerably. We view our overall financial performance as a solid achievement, given the challenges associated with operating during the ongoing pandemic.

"At the same time, we ramped up our investment in R&D. We continued our development of data solutions capabilities, by expanding our software portfolio and service offerings, and investing in cloud, SaaS and AI technologies.

"We are making excellent progress on integrating the highly complementary OpenNMS business into our operations. OpenNMS provides a number of cross marketing opportunities, by leveraging NantHealth’s data science and AI competencies and OpenNMS’ network monitoring solutions for critical data flows. In addition, we believe the acquisition will drive opportunities to expand into industries beyond healthcare and bring new sets of services to customers of both entities."

Software and Services Highlights:

Clinical Decision Support (Eviti):
Expanded client-base and net new clients through NantHealth’s Eviti channel partner, a leading clinical solutions provider
Expanded Eviti Connect across the Medicaid population of a leading U.S. health insurance company. Of the 13 states originally announced, six states have gone live through the third quarter of 2020
Payer Engagement (NaviNet):
We expanded API capabilities with a new service offering for provider and revenue cycle organizations to connect with payers via the NaviNet Open platform to conduct Eligibility & Benefits, Claim Status Inquiry, Authorizations, and Referral transactions
Launched several user-centric enhancements that will provide a richer user experience on NaviNet Open, including self-service capability that allows NaviNet AllPayer subscribers to quickly and easily configure provider information for registration and access
Network Monitoring (OpenNMS):
Released Meridian 2020
A Fortune 500 Healthcare IT company went into production with the OpenNMS Architecture for Learning Enabled Correlation (ALEC) AI engine
Business and Financial Highlights

For the 2020 third quarter:

Total net revenue was $18.8 million compared with $18.6 million in Q3 of 2019 and up from $17.6 million in Q2, 2020. Within total revenue, there was $18.7 million of total software-related revenue, compared with $18.3 in previous year
Gross profit was $11.2 million, or 60% of total net revenue, consistent with the prior year period
Selling, general and administrative (SG&A) expenses declined to $12.4 million from $13.7 million in 2019 third quarter
Research and development (R&D) expenses increased to $4.7 million from $3.3 million, primarily due to expanding our software portfolio and service offerings, and investing in cloud, SaaS and AI technologies
Net loss from continuing operations attributable to NantHealth, net of tax, narrowed to $11.0 million, or $0.10 per share from $16.4 million, or $0.15 per share
Non-GAAP net loss from continuing operations attributable to NantHealth was $7.2 million, or $0.07 per share, compared with $7.5 million, or $0.07 per share, for the third quarter of last year
At September 30, 2020, cash and cash equivalents totaled $26 million
Conference Call Information and Forward-Looking Statements

Later today, the company will host a conference call at 1:30 p.m. PT (4:30 p.m. ET) to review its results of operations for the third quarter ended September 30, 2020. The conference call will be available to interested parties by dialing 844-309-3709 from the U.S. or Canada, or 281-962-4864 from international locations, passcode 9966656. The call will be broadcast via the Internet at www.nanthealth.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.

Discussion during the conference call may include forward-looking statements regarding topics such as the company’s financial status and performance, regulatory and operational developments, and other comments the company may make about its future plans or prospects in response to questions from participants on the conference call. (Press release, NantHealth, NOV 5, 2020, View Source [SID1234570055])

On November 5, 2020 Emergent BioSolutions Inc. (NYSE: EBS) reported financial results for the three and nine months ended September 30, 2020 and updated its full year 2020 guidance (Press release, Emergent BioSolutions, NOV 5, 2020, View Source [SID1234570054]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Over the last 22 years, Emergent has built a solid business founded on demonstrable strengths in partnering, manufacturing, and integrating value-added M&A," said Robert G. Kramer, president and chief executive officer of Emergent BioSolutions. "The strength of our core business and the accelerated growth of our contract development and manufacturing unit validate our strategy to pursue leadership positions across the public health threat market. Our diverse product and service portfolio gives us continued confidence in executing our strategy, delivering on our commitments to our partners and customers, and creating value for our shareholders."

SELECT Q3 2020 BUSINESS ACCOMPLISHMENTS

Completed an offering of $450 million in aggregate principal amount 3.875% Senior Unsecured Notes due in 2028. The Company utilized the proceeds from the offering to repay $353 million outstanding under its revolving credit facility with the remainder to be utilized for general corporate purposes.

Announced the initiation of a Phase 3 clinical trial sponsored by the National Institutes of Health to evaluate the safety, tolerability, and efficacy of hyperimmune globulin products, including the Company’s COVID-19 Human Immune Globulin (COVID-HIG), as a potential treatment in adult patients hospitalized with COVID-19.

Announced U.S. Food and Drug Administration (FDA) approval of the shelf life extension of NARCAN (naloxone HCl) Nasal Spray from 24 months to 36 months.

Secured approximately $60 million in new business and existing project extensions across development services, drug substance manufacturing, and drug product manufacturing towards the Company’s contract development and manufacturing (CDMO) portfolio.
2020 FINANCIAL PERFORMANCE (unaudited)

(I) Quarter Ended September 30, 2020 (Q3)

Revenues

Total Revenues

For Q3 2020, total revenues were $385.2 million, an increase of $73.4 million as compared to 2019. Total revenues reflect an increase in contract development and manufacturing services revenues partially offset by a decrease in product sales and contracts and grants revenues.

Product Sales

For Q3 2020, product sales were $202.2 million, a decrease of $54.0 million or 21% as compared to 2019. Other product sales increased due to increased sales of BAT[Botulism Antitoxin Heptavalent (A, B, C, D, E, F, G) – (Equine)] and VIGIV [Vaccinia Immune Globulin Intravenous (Human)] offset by a decline in sales of travel health vaccines.

Contract Development and Manufacturing (CDMO) Services

For Q3 2020, revenue from the Company’s contract development and manufacturing operations was $157.1 million, an increase of $137.1 million as compared to 2019. The increase is largely due to the contribution of arrangements across development, drug substance manufacturing, and drug product manufacturing services with industry and government customers.

Contracts and Grants

For Q3 2020, revenue from the Company’s development-based contracts and grants was $25.9 million, a decrease of $9.7 million as compared to 2019. The decrease primarily reflects the completion of development activities associated with the AV7909 product candidate in 2019, partially offset by recent new development awards related to the Company’s COVID-19 product candidates.

Operating Expenses

Cost of Product Sales and Contract Development and Manufacturing (CDMO) Services

For Q3 2020, cost of product sales and contract development and manufacturing services was $149.0 million, an increase of $41.0 million or 38% as compared to 2019. The increase is primarily due to a charge of $29.9 million associated with contingent consideration liabilities due to the increased expectation that the Company will meet its final sales milestone for NARCAN Nasal Spray, a charge of $13.8 million related to a write-down of inventory balances due to the expected expiration of a portion of the Company’s travel health vaccines, and an increase in volume in CDMO services offset by a decline in volume of product sales.

Research and Development (Gross and Net)

For Q3 2020, gross R&D expenses were $84.4 million, an increase of $31.0 million or 58% as compared to 2019. The increase primarily reflects the impairment of the Company’s in-process research and development (IPR&D) intangible asset of $29.0 million. Excluding this item, research and development expenses were consistent reflecting an increase in costs associated with the Company’s COVID-19 therapeutic product candidates offset by a decrease in costs due to the completion of development activities associated with the Company’s AV7909 product candidate.

For Q3 2020, net R&D expense, which reflects investments made in development programs that are not currently funded in whole or in part by third-party partners and is calculated as gross research and development expenses minus contracts and grants revenue and the impact of the IPR&D intangible asset impairment, was $29.5 million, an increase of $11.7 million or 66% as compared to 2019. The increase is attributable to an increase in costs associated with the Company’s COVID-19 product candidates. The Q3 2020 and Q3 2019 net R&D expense was 8% and 6%, respectively, of adjusted revenue (total revenue less contracts & grants).

Selling, General and Administrative

For Q3 2020, selling, general and administrative expenses were $75.5 million, an increase of $10.5 million or 16% as compared to Q3 2019. The increase primarily reflects an increase in staffing costs to support the Company’s growth.

Amortization of Intangible Assets

For Q3 2020, amortization of intangible assets was $15.0 million, which was consistent with amortization of intangible assets of $14.7 million in Q3 2019.

Income Taxes

For Q3 2020, the income tax provision was $15.5 million as compared to $15.7 million in Q3 2019. The decrease is due to a decrease in income before the provision for income taxes of $3.9 million, an increase in discrete tax benefits of $3.5 million, offset by the impact of non-deductible contingent consideration expense. The Company’s effective quarterly tax rate, excluding discrete adjustments, was 34% and 26%, for Q3 2020 and Q3 2019, respectively. The effective quarterly tax rate, excluding the impact of non-deductible contingent consideration expense was 22% and 26%, for Q3 2020 and Q3 2019, respectively.

Net Income & Adjusted Net Income

For Q3 2020, the Company recorded net income of $39.5 million, or $0.73 per diluted share, versus net income of $43.2 million, or $0.83 per diluted share, in 2019.

For Q3 2020, the Company recorded adjusted net income of $119.0 million, or $2.19 per diluted share, versus adjusted net income of $64.8 million, or $1.24 per diluted share, in 2019. (1)

Adjusted EBITDA

For Q3 2020, the Company recorded adjusted EBITDA of $168.1 million versus $106.4 million in 2019. (1)

(II) Nine months ended September 30, 2020 (unaudited)

Revenues

Total Revenues

For the nine months ended September 30, 2020, total revenues were $972.4 million, an increase of 30% over 2019. Total revenues reflect an increase in product sales and contract development and manufacturing services offset by a decrease in contracts and grants revenues.

Product Sales

For the nine months ended September 30, 2020, product sales were $648.9 million, an increase of $56.2 million or 9% as compared to 2019. Other product sales decreased due to a decline in sales of raxibacumab and travel health vaccines slightly offset by an increase in sales of BAT and VIGIV.

Contract Development and Manufacturing (CDMO) Services

For the nine months ended September 30, 2020, revenue from the Company’s contract development and manufacturing services operations was $251.4 million, an increase of $196.8 million as compared to 2019. The increase is largely due to the contribution of arrangements across development, drug substance manufacturing, and drug product manufacturing services with industry and government customers.

Contracts and Grants

For the nine months ended September 30, 2020, revenue from the Company’s development-based contracts and grants was $72.1 million, a decrease of $26.3 million or 27% as compared to 2019. The decrease primarily reflects the completion of development activities associated with the AV7909 product candidate in 2019, offset by recent new development awards related to the Company’s COVID-19 product candidates.

Operating Expenses

Cost of Product Sales and Contract Development and Manufacturing Services

For the nine months ended September 30, 2020, cost of product sales and contract development and manufacturing services was $355.7 million, an increase of $55.0 million or 18% as compared to 2019. The increase is due primarily to an increase in volume of product sales and CDMO services, charges of $31.3 million related to the Company’s contingent consideration liabilities, a charge of $13.8 million related to a write-down of inventory balances due to the expected expiration of a portion of the Company’s travel health vaccines, and an increase in share-based compensation expense due to a one-time special broad-based, immediately vested equity award to employees.

Research and Development (Gross and Net)

For the nine months ended September 30, 2020, gross R&D expenses were $175.0 million, an increase of $11.6 million compared to 2019. The increase primarily reflects the impact of impairment of the Company’s IPR&D intangible asset of $29.0 million. Excluding this item, gross R&D expense decreased $17.4 million compared to 2019. The decrease primarily reflects a decrease in costs in 2020 due to the completion of development activities associated with the Company’s AV7909 product candidate in 2019. The decrease has been partially offset by an increase in costs associated with the Company’s chikungunya and COVID-19 product candidates.

For the nine months ended September 30, 2020, net R&D expense, which reflects investments made in development programs that are not currently funded in whole or in part by third-party partners and is calculated as gross research and development expenses minus contracts and grants revenue and the impact of the IPR&D intangible asset impairment, was $73.9 million, an increase of $8.9 million or 14% as compared to 2019. The increase primarily reflects an increase in costs associated with the Company’s chikungunya and COVID-19 product candidates offset by a decline in costs associated with the FLU-IGIV product candidate. The 2020 and 2019 net R&D expense was 8% and 10%, respectively, of adjusted revenue (total revenue less contracts & grants).

Selling, General and Administrative

For the nine months ended September 30, 2020, selling, general and administrative expenses were $221.2 million, an increase of $19.9 million or 10% as compared to 2019. The increase primarily reflects an increase in staffing costs to support the Company’s growth and share-based compensation due to a special broad-based, immediately vested equity award to employees during the second quarter of 2020.

Amortization of Intangible Assets

For the nine months ended September 30, 2020, amortization of intangible assets of $44.8 million was consistent with $43.9 million in 2019.

Income Taxes

For the nine months ended September 30, 2020, the income tax provision of $34.7 million increased $36.4 million when compared to 2019. The increase is due to an increase in income before the provision for income taxes of $148.5 million, offset by an increase in discrete tax benefits of $7.0 million in 2020. The Company’s effective tax rate, excluding discrete adjustments, was 29% and 27%, for the nine months ended September 30, 2020 and 2019, respectively. The effective tax rate, excluding the impact of non-deductible contingent consideration expense was 25% and 24%, for the nine months ended September 30, 2020 and 2019, respectively.

Net Income & Adjusted Net Income

For the nine months ended September 30, 2020, the Company recorded net income of $119.7 million, or $2.23 per diluted share, versus net income of $7.6 million, or $0.15 per diluted share, in 2019.

For the nine months ended September 30, 2020, the Company recorded adjusted net income of $225.1 million, or $4.20 per diluted share, versus adjusted net income of $69.6 million, or $1.33 per diluted share, in 2019. (1)

Adjusted EBITDA

For the nine months ended September 30, 2020, the Company recorded adjusted EBITDA of $339.5 million versus $145.4 million in 2019. (1)

2020 FINANCIAL FORECAST

Based upon the Company’s financial performance year to date as well as expectations for the remainder of the year, the Company has updated its full year 2020 financial forecast reflected by the following financial metrics and accompanying operational considerations:

The following operational considerations are incorporated in the Company’s forecast and remain consistent with the previous forecast:

Year over year improvement in gross margin of 400 – 600 basis points driven by improved product mix and increased contribution from the Company’s CDMO business;
The previously announced delay into 2021 of the launch of the Phase 3 clinical study for CHIKV-VLP, the Company’s chikungunya virus virus-like particle vaccine, due to the timing of certain operational factors;
The continued deferral into 2021 of a follow-on procurement contract with the U.S. government for raxibacumab, the Company’s FDA-approved anthrax monoclonal antibody therapeutic, due to the impact of the prioritization of Operation Warp Speed on the Company’s technology transfer activities for the product;
Continued challenges through the end of 2020 in the Company’s travel health business and revenues associated with Vaxchora (Cholera Vaccine, Live, Oral) and Vivotif (Typhoid Vaccine Live Oral Ty21a);
No generic competition in 2020 for NARCAN Nasal Spray.
The Company has assessed the risks to its business associated with the COVID-19 pandemic and has adopted measures to mitigate those risks as they are understood today and accordingly is providing this outlook for 2020. Despite the lack of expected material disruption to the business, the Company’s executive management continues to assess the business and operational implications associated with the pandemic and market conditions on its employees, patients, and customers.

The outlook for 2020 does not include estimates for potential new corporate development or other M&A transactions.

FOOTNOTES

(1) See "Reconciliation of Net Income to Adjusted Net Income and Adjusted EBITDA and Gross Margin and Adjusted Gross Margin" for a definition of terms and the reconciliation tables.

CONFERENCE CALL, PRESENTATION SUPPLEMENT, AND WEBCAST INFORMATION

Company management will host a conference call at 5:00 pm (Eastern Time) today, November 5, 2020, to discuss these financial results. The conference call and presentation supplement can be accessed from the Company’s website or through the followin