On November 5, 2020 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported financial results for the third quarter of 2020 and provided a business update (Press release, Regeneron, NOV 5, 2020, View Source [SID1234570154]).

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"Last week, Regeneron achieved an important milestone in the fight against COVID-19 with prospective Phase 2/3 results showing REGN-COV2 significantly reduced virus levels and the need for further medical attention in non-hospitalized patients; we have shared these important data with regulatory authorities," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "Even with our intense commitment to fighting COVID-19, Regeneron continues to deliver across all aspects of our business. This quarter we had robust top- and bottom-line growth driven by EYLEA in retinal diseases and Dupixent in atopic dermatitis and asthma. In 2021, we look forward to important potential launches including for our PD-1 inhibitor Libtayo in non-small cell lung cancer and advanced basal cell carcinoma. Lastly, we are proud that our novel antibody cocktail REGN-EB3 recently became the first FDA-approved treatment for Ebola, underscoring the potential of antibody therapies to address deadly infectious diseases."

"We continue to invest in our promising pipeline while delivering meaningful revenue and earnings growth. Our revenue base is becoming more diversified with increasing contribution from Dupixent and Libtayo," said Robert E. Landry, Executive Vice President, Finance and Chief Financial Officer of Regeneron. "This is evidenced by Dupixent achieving in excess of $1 billion in global net sales this quarter."
Key Pipeline Progress
Regeneron has more than 20 product candidates in clinical development, including five marketed products for which it is investigating additional indications. Updates from the clinical pipeline include:
Dupixent (dupilumab)
•In October 2020, the Company and Sanofi announced that a Phase 3 trial met its primary and all key secondary endpoints in children aged 6 to 11 years with uncontrolled moderate-to-severe asthma. Regulatory submissions in the United States and European Union (EU) are planned by the first quarter of 2021.
•The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Dupixent, recommending to extend the approval in the EU to include children aged 6 to 11 years with severe atopic dermatitis who are candidates for systemic therapy.
•The U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy designation for the treatment of patients 12 years and older with eosinophilic esophagitis (EoE).

REGN-COV2, a dual antibody therapy to SARS-CoV-2 virus
•In October 2020, the Company submitted a request to the FDA for an Emergency Use Authorization (EUA) for REGN-COV2 in patients with mild-to-moderate COVID-19 who are at risk for poor outcomes.
•In October 2020, the Company announced positive results from an ongoing Phase 2/3 seamless trial in the COVID-19 outpatient setting showing REGN-COV2 met the primary and key secondary endpoints. REGN-COV2 significantly reduced viral load and patient medical visits (hospitalizations, emergency room, urgent care visits, and/or physician office/telemedicine visits). In September 2020, the Company also reported the first data from a descriptive analysis in this trial.
•In October 2020, the Independent Data Monitoring Committee (IDMC) for the REGN-COV2 treatment trials for COVID-19 recommended that the current hospitalized patient trial be modified. Specifically, based on a potential safety signal and an unfavorable risk/benefit profile at this time, the IDMC recommended that further enrollment of patients requiring high-flow oxygen or mechanical ventilation be placed on hold pending collection and analysis of further data on patients already enrolled. The IDMC also recommended continuing enrollment of hospitalized patients requiring either no or low-flow oxygen as the risk/benefit remains acceptable in these cohorts. Finally, the IDMC recommended continuation of the outpatient trial (described further above) without modification.
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•In September 2020, the Company and the University of Oxford announced that the RECOVERY Phase 3 open-label trial in the United Kingdom will evaluate REGN-COV2. This trial, which is being coordinated by researchers at the University of Oxford, is in patients hospitalized with COVID-19 and will compare the effects of adding REGN-COV2 to the usual standard-of-care versus standard-of-care on its own. The RECOVERY IDMC is aware of the IDMC recommendations made in connection with the REGN-COV2 treatment trials (described above), and will be discussing the impact, if any, on the RECOVERY trial.

Oncology Program
•The FDA accepted for priority review, with a target action date of February 28, 2021, the supplemental Biologics License Application (sBLA) for Libtayo (cemiplimab) as monotherapy to treat patients with first-line locally advanced or metastatic non-small cell lung cancer (NSCLC) with ≥50% PD-L1 expression. A regulatory application for Libtayo as monotherapy in first-line NSCLC was also submitted in the EU.
•The FDA accepted for priority review, with a target action date of March 3, 2021, the sBLA for Libtayo for the treatment of patients with locally advanced or metastatic basal cell carcinoma (BCC). A regulatory application for Libtayo in advanced BCC was also submitted in the EU.
•Patient enrollment in the Libtayo Phase 3 first-line NSCLC chemotherapy combination study was completed.
•The Company and Sanofi presented positive data from pivotal trials for Libtayo monotherapy in first-line NSCLC and Libtayo monotherapy in BCC at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Virtual Congress 2020.
•A Phase 2 study of REGN5458, a bispecific antibody targeting BCMA and CD3, was initiated in multiple myeloma.

InmazebTM (atoltivimab, maftivimab, and odesivimab-ebgn)
•In October 2020, the FDA approved Inmazeb (REGN-EB3) for the treatment of infection caused by Zaire ebolavirus in adult and pediatric patients, including newborns of mothers who have tested positive for the infection.

Praluent (alirocumab)
•The FDA accepted for review the sBLA for homozygous familial hypercholesterolemia (HoFH) in adults, with a target action date of April 4, 2021.

Evinacumab, an antibody to ANGPTL3
•The FDA accepted for priority review the BLA for HoFH, with a target action date of February 11, 2021. An MAA for HoFH has also been submitted in the EU.
•The New England Journal of Medicine (NEJM) published positive results from the Phase 3 trial in HoFH, showing that adding evinacumab to other lipid-lowering therapies cut bad cholesterol levels in half in patients with HoFH, including the most difficult to treat patients who had nearly non-existent LDL-receptor activity.

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Corporate and Business Development Update
•In July 2020, the Company announced an agreement whereby the Company was awarded a $450 million contract to manufacture and supply REGN-COV2 to the U.S. government. The Company commenced delivery of REGN-COV2 drug product under the agreement during the third quarter of 2020. The Company continues to ramp up production for REGN-COV2 and now expects to have approximately 80,000 doses available by the end of November, approximately 200,000 total doses ready by the first week of January 2021, and approximately 300,000 total doses ready by the end of January 2021.
•In August 2020, the Company entered into a collaboration agreement with Roche to develop, manufacture, and distribute REGN-COV2. Each company has committed to dedicate a certain amount of manufacturing capacity to REGN-COV2 each year, and the collaboration is expected to substantially increase supply of REGN-COV2. Under the terms of the agreement, Regeneron will distribute and record sales for REGN-COV2 in the United States and Roche will be responsible for distribution outside the United States.
•In July 2020, the U.S. Department of Health and Human Services (HHS) exercised its option under the existing agreement for the treatment of Ebola virus infection to provide additional funding for the manufacture and supply of Inmazeb, pursuant to which Regeneron expects to deliver a pre-specified number of treatment doses over the course of approximately six years.
•In August 2020, the Company issued and sold $2.0 billion aggregate principal amount of senior unsecured notes. See further details in the "Other Financial Information" section below.

Third Quarter 2020 Financial Results

Effective January 1, 2020, Regeneron implemented changes in the presentation of its financial statements related to certain reimbursements and other payments for products developed and commercialized with collaborators. The Company made these changes in presentation to better reflect the nature of the Company’s costs incurred and revenues earned pursuant to arrangements with collaborators and to enhance the comparability of Regeneron’s financial statements with industry peers. The change in presentation has been applied retrospectively. See note (4) below for further information.
Revenues
Total revenues increased by 32% to $2.294 billion in the third quarter of 2020, compared to $1.744 billion in the third quarter of 2019.
EYLEA net product sales in the United States increased to $1.318 billion in the third quarter of 2020, compared to $1.188 billion in the third quarter of 2019. Overall distributor inventory levels for EYLEA in the United States remained within the Company’s one-to-two-week targeted range.
Total revenues also include Sanofi and Bayer collaboration revenues(2) of $653 million in the third quarter of 2020, compared to $469 million in the third quarter of 2019. Sanofi collaboration revenue increased primarily due to the Company’s share of profits from commercialization of antibodies, which increased to $213 million in the third quarter of 2020 from $94 million in the third quarter of 2019. The change in the Company’s share of profits from commercialization of antibodies was primarily driven by higher Dupixent profits. In addition, in the third quarter of 2020, the Company earned the first $50 million sales-based milestone from Sanofi, upon annual sales of antibodies outside the United States exceeding $1.0 billion on a rolling twelve-month basis.
4
Refer to Table 4 for a summary of collaboration revenue.
Other revenues in the third quarter of 2020 include recognition of revenue in connection with the Company’s agreements with BARDA related to funding of certain REGN-COV2 and Inmazeb development activities.
•The higher GAAP and non-GAAP R&D expenses in the third quarter of 2020 were primarily due to additional costs incurred in connection with COVID-19 related development activities, higher headcount and headcount-related costs, and an increase in clinical manufacturing activities.
•The higher GAAP and non-GAAP SG&A expenses in the third quarter of 2020 were primarily due to commercialization-related costs for EYLEA and Praluent, and higher headcount-related costs.
•The increase in cost of collaboration and contract manufacturing in the third quarter of 2020 was primarily due to the recognition of manufacturing costs associated with higher sales of Dupixent and recognition of costs in connection with manufacturing ex-U.S. commercial supplies of Praluent for Sanofi.
•Other operating (income) expense, net, includes recognition of a portion of amounts previously deferred in connection with up-front and development milestone payments, as applicable, received in connection with the Company’s collaborative arrangements.
Other Financial Information
GAAP other income (expense), net, includes the recognition of net losses on equity securities of $37 million in the third quarter of 2020, compared to net gains of $3 million in the third quarter of 2019.
In the third quarter of 2020, the Company’s GAAP effective tax rate was 15.6%, compared to 12.9% in the third quarter of 2019. The GAAP effective tax rate for the third quarter of 2020 was positively impacted, compared to the U.S. federal statutory rate, primarily by stock-based compensation, and, to a lesser extent, income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate and federal tax credits for research activities. In the third quarter of 2020, the non-GAAP effective tax rate was 16.3%, compared to 13.6% in the third quarter of 2019.
GAAP net income per diluted share was $7.39 in the third quarter of 2020, compared to GAAP net income per diluted share of $5.86 in the third quarter of 2019. Non-GAAP net income per
diluted share was $8.36 in the third quarter of 2020, compared to non-GAAP net income per diluted share of $6.67 in the third quarter of 2019. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.
In August 2020, the Company issued and sold $1.250 billion aggregate principal amount of 1.750% senior unsecured notes due 2030 and $750 million aggregate principal amount of 2.800% senior unsecured notes due 2050. Net proceeds to the Company from the issuance and sale of the notes were used in part to repay the $1.5 billion bridge loan facility, which was previously entered into in May 2020 in connection with the Company’s purchase of shares of its common stock held by Sanofi.
Net cash used in operating activities in the third quarter of 2020 was $254 million, compared to $557 million in net cash provided by operating activities in the third quarter of 2019, which led to $(408) million in free cash flow for the third quarter of 2020, compared to $436 million for the third quarter of 2019. The decrease in cash from operating activities primarily resulted from an increase in trade accounts receivable in connection with extending payment terms to certain of the Company’s EYLEA customers due to the COVID-19 pandemic.
This press release uses non-GAAP R&D, non-GAAP SG&A, non-GAAP COGS, non-GAAP other income (expense) net, non-GAAP effective tax rate, non-GAAP net income, non-GAAP net income per share, and free cash flow, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are computed by excluding certain non-cash and/or other items from the related GAAP financial measure. The Company also includes a non-GAAP adjustment for the estimated income tax effect of reconciling items.

The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate from period to period based on factors that are not within the Company’s control (such as the Company’s stock price on the dates share-based grants are issued or changes in the fair value of the Company’s investments in equity securities) or items that are not associated with normal, recurring operations (such as restructuring-related expenses, including employee separation costs). Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. With respect to free cash flows, the Company believes that this non-GAAP measure provides a further measure of the Company’s operations’ ability to generate cash flows. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company’s core business operations. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company’s non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company’s historical GAAP to non-GAAP results is included in Table 3 of this press release.
(2) The Company’s collaborators provide it with estimates of the collaborators’ respective sales and the Company’s share of the profits or losses from commercialization of products for the most recent fiscal quarter. The Company’s estimates for such quarter are reconciled to actual results in the subsequent fiscal quarter, and the Company’s share of the profit or loss is adjusted on a prospective basis accordingly, if necessary. (3) The Company’s 2020 financial guidance does not assume the completion of any significant business development transactions not completed as of the date of this press release. (4) Applicable amounts previously reported for the three and nine months ended September 30, 2019 and as of December 31, 2019 have been revised to reflect a change in presentation of cost reimbursements from collaborators who are not deemed to be the Company’s customers from collaboration revenue to a reduction of the corresponding operating expense. The Company also changed the presentation of amounts recognized in connection with up-front and development milestone payments received from collaboration revenue to other operating income, as well as the presentation of the corresponding balance sheet accounts. The revisions were reclassifications only and had no impact on the Company’s previously reported GAAP and non-GAAP net income and net income per share. Refer to the Company’s Form 10-Q for the quarterly period ended September 30, 2020 (Note 1 of the Notes to Condensed Consolidated Financial Statements) for further details. (5) Corresponding reimbursements from collaborators and others for manufacturing of commercial supplies is recorded within revenues.Conference Call Information

Regeneron will host a conference call and simultaneous webcast to discuss its third quarter 2020 financial and operating results on Thursday, November 5, 2020, at 8:30 AM. To access this call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International), conference ID 1535889. A link to the webcast may be accessed from the "Investors and Media" page of Regeneron’s website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company’s website and will be available for at least 30 days.

On November 5, 2020 Arvinas, Inc. (Nasdaq: ARVN), a clinical-stage biopharmaceutical company creating a new class of drugs based on targeted protein degradation, reported financial results for the third quarter ended September 30, 2020 and provided a corporate update (Press release, Arvinas, NOV 5, 2020, View Source [SID1234570153]).

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"Beginning the Phase 2 portion of the ARV-110 clinical trial marks another significant milestone for Arvinas," said John Houston, Ph.D., President and Chief Executive Officer at Arvinas. "Together with the expected initiation of a cohort expansion of ARV-471 in combination with a CDK4/6 inhibitor before the end of the year, we’re gratified by the strong momentum of our lead programs heading into 2021."

"When combined with our recent disclosure of five additional programs in our preclinical pipeline, these clinical milestones further validate our PROTAC Discovery Engine and the opportunity to create PROTAC degraders that meaningfully improve patient care," added Dr. Houston.

Business Highlights and Recent Developments

Dose escalation in each of the Phase 1/2 clinical trials of ARV-110 and ARV-471 continues.
Arvinas has initiated dosing at a first dose level in a Phase 2 cohort expansion for ARV-110.
The company announced platform updates and disclosed five additional programs from its preclinical pipeline. Arvinas’ portfolio encompasses a range of validated and undruggable targets in oncology, immuno-oncology, and neuroscience. The newly disclosed programs were B-cell lymphoma 6 protein (BCL6), Kirsten rat sarcoma (KRAS) protein, c-Myc, hematopoietic progenitor kinase 1 (HPK1), and mutant huntingtin (mHTT).
Arvinas entered into a collaboration and supply agreement with Pfizer in connection with a planned Phase 1b cohort expansion evaluating ARV-471 in combination with Pfizer’s Ibrance (palbociclib), an oral CDK4/6 inhibitor.
Anticipated Milestones and Expectations

2020 Milestones and Expectations

Arvinas expects to provide a program update for ARV-110, including a Phase 1 dose escalation update and an overview of the recently initiated Phase 2 dose expansion, in December 2020.
For the ARV-471 program, Arvinas expects to provide an update from its Phase 1 dose escalation in December 2020.
Arvinas expects to initiate a Phase 1b cohort expansion of ARV-471 in combination with Ibrance (palbociclib) in the fourth quarter of 2020. The study will evaluate the safety and tolerability of ARV-471 in combination with palbociclib and identify the recommended combination dose of ARV-471 for use with palbociclib.
2021 Milestones and Expectations

Arvinas expects to initiate the first of potentially two Phase 1b investigations of ARV-110 in combination with standard of care agents for mCRPC (e.g., abiraterone) in 2021.
Arvinas expects to share interim data from the Phase 2 dose expansion trial of ARV-110 in 2021.
Arvinas expects to initiate a Phase 2 dose expansion of ARV-471 in 2021.
Arvinas expects to share data from the Phase 1b cohort expansion of ARV-471 in combination with Ibrance (palbociclib) in the second half of 2021.
Arvinas expects to file an investigational new drug (IND) application for ARV-766, an androgen receptor degrader, in the first half of 2021.
Financial Guidance

Based on its current operating plan, Arvinas expects its cash, cash equivalents, and marketable securities will be sufficient to fund its planned operating expenses and capital expenditures into 2022.

Financial Highlights

Cash, Cash Equivalents, and Marketable Securities Position: As of September 30, 2020, cash, cash equivalents, and marketable securities were $248.6 million as compared with $280.9 million as of December 31, 2019. The decrease in cash, cash equivalents and marketable securities of $32.3 million for the first nine months of 2020 was primarily related to cash used for operations of $64.8 million and the purchase of lab equipment and leasehold improvements of $4.6 million, partially offset by net proceeds from the issuance of common stock and exercises of stock options of $33.1 million and $4.0 million received from two collaborators.

Research and Development Expenses: Research and development expenses were $30.0 million for the quarter ended September 30, 2020, as compared with $16.6 million for the quarter ended September 30, 2019. The increase in research and development expenses of $13.4 million for the quarter was primarily related to increases in clinical trials and chemistry, manufacturing and controls expenses associated with our AR program of $4.2 million and our ER program of $5.1 million, in addition to increases in expenses of $4.1 million associated with exploratory programs and investments in platform research.

General and Administrative Expenses: General and administrative expenses were $9.3 million for the quarter ended September 30, 2020, as compared with $8.0 million for the quarter ended September 30, 2019. The increase of $1.3 million was primarily related to an increase in personnel and facility related costs of $2.4 million, offset by a reduction in legal costs of $1.1 million.

Revenues: Revenue related to the license and rights to technology fees and research and development activities related to the collaboration and license agreement with Bayer (Bayer Collaboration Agreement) that was initiated in July 2019, the collaboration and license agreement with Pfizer (Pfizer Collaboration Agreement) that was initiated in January 2018, and the amended and restated option, license and collaboration agreement with Genentech that was initiated in November 2017 (collectively Collaboration Revenue) was $7.6 million for the quarter ended September 30, 2020, as compared with $5.4 million for the quarter ended September 30, 2019. The increase in Collaboration Revenue of $2.2 million primarily related to the revenues from the Bayer Collaboration Agreement and the Pfizer Collaboration Agreement. Total revenue of $30.1 for the three months ended September 30, 2019 included $24.7 million for the contribution of a license to Oerth Bio LLC (the Joint Venture).

Loss from Equity Method Investment: Loss from equity method investment for the quarter ended September 30, 2019 was $24.7 million. This loss was generated from the Joint Venture’s expensing the values associated with the contributed intellectual property from the Joint Venture partners.

Net Loss: Net loss was $30.8 million for the quarter ended September 30, 2020, as compared with $17.7 million for the quarter ended September 30, 2019. The increase in net loss for the quarter was primarily due to increased research and development expenses and increased general and administrative expenses.

About ARV-110
ARV-110 is an orally bioavailable PROTAC protein degrader designed to selectively target and degrade the androgen receptor (AR). ARV-110 is being developed as a potential treatment for men with metastatic castration-resistant prostate cancer.

ARV-110 has demonstrated activity in preclinical models of AR mutation or overexpression, both common mechanisms of resistance to currently available AR-targeted therapies.

About ARV-471
ARV-471 is an orally bioavailable PROTAC protein degrader designed to specifically target and degrade the estrogen receptor (ER) for the treatment of patients with locally advanced or metastatic ER+/HER2- breast cancer.

In preclinical studies, ARV-471 demonstrated near-complete ER degradation in tumor cells, induced robust tumor shrinkage when dosed as a single agent in multiple ER-driven xenograft models, and showed superior anti-tumor activity when compared to a standard of care agent, fulvestrant, both as a single agent and in combination with a CDK4/6 inhibitor.

On November 5, 2020 Athenex, Inc. (NASDAQ: ATNX), a global biopharmaceutical company dedicated to the discovery, development, and commercialization of novel therapies for the treatment of cancer and related conditions, reported its financial results and business highlights for the third quarter ended September 30, 2020 (Press release, Athenex, NOV 5, 2020, View Source [SID1234570152]).

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"Our New Drug Application (NDA) filing for Oral Paclitaxel was accepted with priority review and a target action date of February 28, 2021," stated Dr. Johnson Lau, Chairman and Chief Executive Officer of Athenex. "Oral Paclitaxel has a compelling efficacy, and tolerability profile that we believe positions it to potentially become the chemotherapy of choice in metastatic breast cancer. Our supply chain is in place and we are finalizing our commercial plans, with the goal of launching in the U.S. upon approval in the first quarter of 2021."

"During the quarter, we strengthened our balance sheet with a successful equity financing, raising net proceeds of $118.7 million," continued Dr. Lau. "This provides us with additional resources and financial flexibility to invest in and expand our commercial infrastructure, as well as to pursue label expansion initiatives for Oral Paclitaxel and continued development of our pipeline. The planned commercial launch of Oral Paclitaxel will also be funded by the other financings we recently announced with Oaktree and Sagard Healthcare Royalty Partners, which provide a total of $225 million and $50 million, respectively, based on associated milestones."

Third Quarter 2020 and Recent Business Highlights:

Clinical Programs:

Oral Paclitaxel for Breast Cancer

The U.S. Food and Drug Administration (FDA) accepted an NDA for Oral Paclitaxel for the treatment of metastatic breast cancer and has granted the application Priority Review. Under the Prescription Drug User Fee Act (PDUFA), the FDA has set a target action date of February 28, 2021.
Launched two new study arms of the I-SPY 2 TRIAL, sponsored by Quantum Leap Healthcare Collaborative, to evaluate Oral Paclitaxel in combination with GSK’s dostarlimab in Stage 2/3 HER2+ and HER2- breast cancer patients.
Tirbanibulin Ointment for Actinic Keratosis

Under the PDUFA, the FDA has set a target action date for tirbanibulin ointment as December 30, 2020.
TCRT-ESO-A2, a TCR-T cell therapy, for NY-ESO-1 positive solid tumors

FDA has allowed the investigational new drug (IND) application for TCRT-ESO-A2, an autologous T-cell receptor (TCR)-T cell therapy. TCRT-ESO-A2 is being developed by Axis Therapeutics Limited, a joint venture between Athenex and Xiangxue Life Sciences Limited.
Commercial Business:

Product sales growth in the third quarter was primarily driven by sales of specialty pharmaceutical products used to treat patients hospitalized with COVID-19.
Athenex Pharmaceutical Division (APD) currently markets a total of 30 products with 54 SKUs.
Athenex Pharma Solutions (APS) currently markets 6 products with 18 SKUs.
Corporate Financing Highlights:

Completed an underwritten follow-on public offering of a total of 11.5 million shares generating net proceeds of $118.7 million.
Entered into a $50 million revenue interest financing agreement with Sagard Healthcare Royalty Partners, LP. ("Sagard").
Financial Results for the Third Quarter Ended September 30, 2020

Revenue from product sales increased to $24.8 million for the three months ended September 30, 2020, up from $19.2 million for the three months ended September 30, 2019, which represents an increase of $5.6 million or 29%. The increase was primarily attributable to a significant increase in specialty product sales of $9.7 million, driven by the impact of the global health pandemic which led to the increased demand for COVID-19 related drugs. The revenue increase was partially offset by a decrease in API and 503B products sales, totaling $3.3 million and $0.8 million, respectively. The decrease in API and 503B sales was attributable to the suspension of production of commercial batches at our API facility and the discontinued vasopressin sales, respectively.

Pursuant to the 2019 Xiangxue License Agreement and an out-licensing agreement with PharmaEssentia, we recognized $9.4 million in license revenue, net of $0.6 million VAT, and $1.0 million in license revenue, respectively, for the three months ended September 30, 2020.

Cost of sales totaled $24.5 million for the three months ended September 30, 2020, an increase of $7.4 million, or 44%, as compared to $17.1 million for the three months ended September 30, 2019. The increase in cost of specialty product sales was in-line with the increase in revenue, and we continued to incur fixed costs despite decreased production at our API and APS facilities. Out of the $24.5 million costs of sales, approximately $2.4 million was attributable to the sublicense fees payable to Hanmi, in relation to the license revenue recognized in the quarter pursuant to the 2019 Xiangxue License Agreement.

R&D expenses totaled $18.4 million for the three months ended September 30, 2020, a decrease of $1.2 million, or 6%, as compared to $19.6 million for the three months ended September 30, 2019. The decline was attributable to a decrease in clinical operations, drug licensing costs, regulatory costs, and preclinical operations. The decrease in R&D expenses were partially offset by a $1.8 million increase in medical affairs and API development costs, and a $1.2 million increase in compensation expenses.

SG&A expenses totaled $22.2 million for the three months ended September 30, 2020, an increase of $5.9 million, or 36%, as compared to $16.3 million for the three months ended September 30, 2019. The increase was attributable to increasing commercial preparations costs associated with the possible approval of our proprietary drugs, and an increase in general and administrative costs related to professional fees, IT costs, and other operational costs.

Interest income consisted of interest earned on our short-term investments, which totaled $0.1 million and $0.7 million for the three months ended September 30, 2020 and 2019, respectively. Interest expense totaled $3.6 million and $1.7 million for the three months ended September 30, 2020 and 2019, respectively. The majority of the interest expense in the current period was incurred from the Senior Credit Agreement with Oaktree, while the majority of the interest expense in the prior period was incurred from the variable-rate, long-term debt with Perceptive.

In the three months ended September 30, 2020, we recognized a $3.0 million loss on the partial extinguishment of debt related to the assignment of a portion of the senior secured loan from Oaktree’s co-investors to Sagard. We did not incur expenses of similar nature for the three months ended September 30, 2019.

For the three months ended September 30, 2020, we incurred income tax expense of $1.1 million, compared to $0.1 million for the three months ended September 30, 2019. The increase was primarily attributable to foreign income tax withholdings on our revenue earned under our out-license arrangements.

Net loss attributable to Athenex for the three months ended September 30, 2020 was $36.8 million, or ($0.44) per diluted share, compared to a net loss of $34.8 million, or ($0.45) per diluted share, for the three months ended September 30, 2019. Excluding the one-time debt extinguishment expenses of $3.0 million, the net loss attributable to Athenex for the three months ended September 30, 2020 was $33.8 million, or ($0.40) per diluted share.

As of September 30, 2020, the Company had cash and cash equivalents of $143.6 million, restricted cash of $13.8 million and short-term investments of $84.8 million.

On August 4, 2020, Athenex entered into a Revenue Interest Financing (RIF) agreement with Sagard Healthcare Royalty Partners, LP. The agreement provides Athenex with $50 million of capital upon FDA approval of Oral Paclitaxel for the treatment of metastatic breast cancer. In exchange for funding this capital, Sagard will receive quarterly payments equal to a mid-single digit royalty of worldwide net sales of Oral Paclitaxel. The Company expects that the proceeds from the financing will be used to fund the development and commercialization of Oral Paclitaxel and other general corporate purposes. Also, in connection with this agreement, Sagard and certain of its co-investors have purchased by assignment $50 million of outstanding loans and undrawn commitments from funds managed by Oaktree, becoming lenders under Athenex’s $225 million term loan facility entered into between Oaktree and Athenex in June 2020.

In September 2020, Athenex completed an underwritten follow-on public offering in which it sold 11.5 million shares of its common stock, including 1.5 million shares of common stock pursuant to underwriters’ option to purchase additional shares, at a public offering price of $11.00 per share and received net proceeds of $118.7 million, after deducting underwriting discounts and commissions and offering expenses.

Outlook and Upcoming Milestones:

Four abstracts featuring Oral Paclitaxel have been accepted for presentation at the San Antonio Breast Cancer Virtual Symposium, to take place December 8-11, 2020.
FDA has set a PDUFA target action date of December 30, 2020 for tirbanibulin ointment for the treatment of actinic keratosis.
FDA has set a PDUFA target action date of February 28, 2021 for Oral Paclitaxel for the treatment of metastatic breast cancer.
Upcoming Investor Events (each to be conducted virtually):

SVB Leerink’s Oncology 1×1 Day, November 19, 2020
Evercore ISI 3rd Annual HealthCONx, December 1-3, 2020
Financial Guidance:

Athenex provides revenue guidance for product sales only. The Company is raising its product sales guidance for the full year 2020 from mid-teens growth as previously communicated to at least low twenties percentage growth year-over-year, from $80.5 million of product sales revenue reported in 2019. This takes into account the Company’s sales performance year to date as well as the outlook for the remainder of the year. The Company’s product mix may continue to include products that are used to treat patients hospitalized with COVID-19, although the Company does not view these revenues as recurring in nature.

The Company believes that the existing cash, cash equivalents, restricted cash, and short-term investments will be sufficient to fund current operating plans into the second quarter of 2022. The Company plans to access additional milestone-based, non-dilutive capital available under the Senior Credit Agreement with Oaktree and Revenue Interest Financing Agreement with Sagard upon achievement of such funding milestones, and if such funding milestones are achieved, the additional capital provided by such is expected to further extend the Company’s cash runway into 2023.

Conference Call and Webcast Information:

The Company will host a conference call and live audio webcast today, Thursday, November 5, 2020, before the market opens, at 8:00 am Eastern Time to discuss financial results and provide a business update.

To participate in the call, dial 877-407-0784 (domestic) or 201-689-8560 (international) fifteen minutes before the conference call begins and reference the conference passcode 13711719. The live conference call and replay can also be accessed via audio webcast here and also on the Investor Relations section of the Company’s website, located at View Source

On November 5, 2020 Aldeyra Therapeutics, Inc. (Nasdaq: ALDX) (Aldeyra), a clinical-stage biotechnology company focused on the development of novel therapies with the potential to improve the lives of patients with immune-mediated diseases, reported financial results for the third quarter of 2020 and provided a corporate update (Press release, Aldeyra Therapeutics, NOV 5, 2020, View Source [SID1234570151]).

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"Our novel RASP inhibitor reproxalap continues to progress toward New Drug Application (NDA) submissions for dry eye disease and allergic conjunctivitis, two of the largest markets in ophthalmology," stated Todd C. Brady, M.D., Ph.D., President and CEO of Aldeyra. "Among a number of key clinical milestones planned for the fourth quarter of 2020, we expect to initiate a pivotal Phase 3 objective sign clinical trial of reproxalap for the treatment of dry eye disease, and Phase 2 clinical trials of ADX-629 in COVID-19, atopic asthma, and psoriasis."

"We concluded the third quarter in a strong financial position, with cash, cash equivalents, and marketable securities of $86.2 million as of September 30," Dr. Brady continued. "Based on our current operating plans, we expect to have sufficient capital to fund operations through 2022, including NDA submissions for reproxalap in dry eye disease and allergic conjunctivitis, assuming positive clinical trial results and regulatory review."

Recent Highlights

American Academy of Ophthalmology 2020: Aldeyra announced the presentation of new clinical utility data from the Phase 2 allergen chamber clinical trial of reproxalap in allergic conjunctivitis. The data will be presented in a poster at the American Academy of Ophthalmology 2020 Virtual Annual Meeting from November 11 through November 15, 2020.

Phase 2 Clinical Trial Data Published in Journal of Ocular Pharmacology and Therapeutics: The peer-reviewed Journal of Ocular Pharmacology and Therapeutics published the positive results of a randomized, corticosteroid-controlled Phase 2 clinical trial of reproxalap in patients with noninfectious anterior uveitis, a sight-threatening ocular inflammatory condition typically treated with topical corticosteroids.

Regulatory Clearance for Phase 2 Clinical Trial in COVID-19: In September 2020, Aldeyra announced receipt of a Study May Proceed letter from the U.S. Food and Drug Administration to begin a Phase 2 clinical trial evaluating ADX-629, a novel orally available RASP inhibitor, for the treatment of adult patients hospitalized for COVID-19.
Clinical-Stage Pipeline Updates

Reproxalap – A Novel Topical Ocular RASP Inhibitor for the Treatment of Dry Eye Disease and Allergic Conjunctivitis: Aldeyra plans to initiate a Phase 3 clinical trial in the fourth quarter of 2020 to assess the activity of reproxalap in objective signs of dry eye disease, including tear RASP levels, after single and multiple doses of drug. The trial initiation timing is subject to the finalization of trial design, assay development, and potential disruptions due to the COVID-19 pandemic. Enrollment is ongoing in the Phase 3 INVIGORATE Trial of reproxalap for the treatment of patients with allergic conjunctivitis. INVIGORATE is a randomized, double-masked, crossover, vehicle-controlled clinical trial to assess the efficacy and safety of reproxalap compared to vehicle using an allergen chamber. Consistent with prior allergic conjunctivitis trials, the primary endpoint will be subject-reported ocular itching score, as agreed with FDA. Aldeyra expects top-line results in the first half of 2021. NDA submission in dry eye disease and allergic conjunctivitis is expected by the end of 2021, assuming positive clinical trial results and regulatory review.
ADX-629 – A Novel Orally Available RASP Inhibitor for the Treatment of Systemic Inflammatory Diseases: Phase 2 clinical testing of ADX-629 for the treatment of COVID-19, atopic asthma, and psoriasis is expected to begin by the end of this year.

ADX-2191 – 0.8% Methotrexate Intravitreal Injection for Rare Proliferative Ocular Diseases: Completion of enrollment in Part 1 of the Phase 3 GUARD Trial of ADX-2191 for the prevention of proliferative vitreoretinopathy (PVR), a rare but serious sight-threatening retinal disease with no approved treatment, is expected in 2021.
Financial Results for the Quarter Ended September 30, 2020

For the quarter ended September 30, 2020, Aldeyra reported a net loss of $8.9 million, compared with a net loss of $18.7 million for the quarter ended September 30, 2019. Net loss per share was $0.23 for the quarter ended September 30, 2020, compared with $0.69 for the same period in 2019. Losses have resulted from the costs of Aldeyra’s clinical trials and research and development programs, as well as from general and administrative expenses.

Research and development expenses were $6.1 million for the quarter ended September 30, 2020, compared with $16.2 million for the same period in 2019. The decrease of $10.1 million is primarily related to decreases in clinical research and development expenditures and lower personnel related costs, partially offset by increases in manufacturing and preclinical development costs.

General and administrative expenses were $2.3 million for the quarter ended September 30, 2020, compared with $2.8 million for the same period in 2019. The decrease of $0.5 million is due to decreases in personnel related costs and other miscellaneous administrative costs.

For the quarter ended September 30, 2020, total operating expenses were $8.4 million, compared with total operating expenses of $19.0 million for the same period in 2019.

As of September 30, 2020, cash, cash equivalents, and marketable securities were $86.2 million. Based on current operating plans, Aldeyra’s cash, cash equivalents, and marketable securities as of September 30, 2020 are expected to be sufficient to fund operations through the end of 2022, including potential NDA submissions for reproxalap in dry eye disease and allergic conjunctivitis, assuming positive clinical trial results and regulatory review. Use of Aldeyra’s cash, cash equivalents, and marketable securities is also expected to include the continuation of Part 1 of the Phase 3 GUARD Trial in PVR and Phase 2 clinical testing of ADX-629.

Conference Call & Webcast Information

Aldeyra will host a conference call today at 8:00 a.m. ET to discuss its third-quarter 2020 financial results. The dial-in numbers are (866) 211-4098 for domestic callers and (647) 689-6613 for international callers. The Conference ID number is 5472726. Due to the expected high demand on our conference provider, please plan to dial in to the call at least 15 minutes prior to the start time.

A live webcast of the conference call will also be available on the investor relations page of the company’s corporate website at View Source After the live webcast, the event will remain archived on the Aldeyra Therapeutics website for 90 days.

On November 5, 2020 BioCryst Pharmaceuticals, Inc. (Nasdaq:BCRX) reported financial results for the third quarter ended September 30, 2020, and provided a corporate updat (Press release, BioCryst Pharmaceuticals, NOV 5, 2020, View Source [SID1234570150])e.

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"We are 28 days from our PDUFA date and we are ready to launch ORLADEYO to bring HAE patients the oral, once-daily medicine they have been waiting for to prevent attacks, reduce their burden of therapy and live a normal life," said Jon Stonehouse, president and chief executive officer of BioCryst.

"In addition to this commercial transformation of the company, and the revenue it brings, our pipeline of BioCryst-discovered molecules continues to advance, with several upcoming near-term data readouts," Stonehouse added.

Program Updates and Key Milestones

Hereditary Angioedema (HAE) Program – ORLADEYO: Oral, once-daily treatment for prevention of HAE attacks

BioCryst expects three regulatory approvals for ORLADEYO in Q4 2020 and early 2021.

The U.S. Food and Drug Administration (FDA) is reviewing a new drug application for ORLADEYO and has set an action date of December 3, 2020, under the Prescription Drug User Fee Act (PDUFA).

In Japan, ORLADEYO is being reviewed under Sakigake designation. The Pharmaceutical and Medical Devices Agency (PMDA) has confirmed their regulatory review schedule and the company expects a decision on approval in December 2020.

On March 30, 2020, the company announced that the European Medicines Agency (EMA) had validated its marketing authorization application (MAA) submission for ORLADEYO and begun its formal review of the MAA under the centralized procedure. The company expects an opinion from the Committee for Medicinal Products for Human Use (CHMP) within approximately 12 months from MAA validation.
BioCryst has completed the build-out of the commercial infrastructure to support the successful launch of ORLADEYO in the U.S.

The company has hired and trained accomplished U.S. rare disease sales and market access teams and has deployed a robust patient services support hub.

The company is well-positioned in terms of product supply and inventory on-hand to support the launch and anticipated demand for ORLADEYO.

On October 30, 2020, the company announced that the United Kingdom’s Medicines and Healthcare Products Regulatory Agency (MHRA) has granted oral, once-daily berotralstat a positive scientific opinion through the Early Access to Medicines Scheme (EAMS). Under the EAMS, HAE patients in the UK aged 12 years and older can gain access to berotralstat for the routine prevention of recurrent attacks of HAE before the drug is granted marketing authorization by the European Commission. Medicines included in the EAMS are those that have a high unmet need, are intended to treat, diagnose or prevent seriously debilitating or life-threatening conditions where there are no adequate treatment options, and are likely to offer significant advantage over methods currently used in the UK.

On October 28, 2020, the company announced it will present five abstracts and one Distinguished Industry Oral Abstract, including 48-week results from the APeX-2 trial and new data on quality of life and the treatment burden of injectable medication administration, at the upcoming (virtual) Annual Scientific Meeting of the American College of Allergy, Asthma & Immunology on November 13-15.

On October 22, 2020, the company announced that data from the first 24 weeks of the APeX-2 trial of oral, once-daily berotralstat in patients with HAE have been published online by the Journal of Allergy and Clinical Immunology.
Complement Oral Factor D Inhibitor Program – BCX9930

The company is completing an ongoing dose ranging trial in treatment-naïve paroxysmal nocturnal hemoglobinuria (PNH) patients, and PNH patients with an inadequate response to C5 inhibitors.

Seven treatment-naïve PNH patients are currently receiving BCX9930, with four beyond 12 weeks of therapy, including two with more than 32 weeks on therapy. All seven treatment-naïve patients are continuing to benefit from BCX9930 treatment.

Based on the excellent results observed to-date at 400 mg bid and 500 mg bid, the company plans to add patients at these dose levels.

Because the acceleration of COVID-19 in the EU has slowed start-up of the inadequate responder cohorts, the company expects to report data from treatment-naïve and inadequate C5 responders dosed up to 500 mg bid in the first quarter of 2021.

On September 30, 2020, the company announced new data from treatment-naïve (no prior treatment with C5 inhibitors) PNH patients receiving doses of oral BCX9930 through 400 mg bid. Oral BCX9930 is driving rapid and dose-dependent reductions in key biomarkers, including LDH, and increasing hemoglobin levels in all PNH patients in the trial. Increases in hemoglobin levels were maintained without transfusions. BCX9930 has been safe and well tolerated at all doses in the trial. No drug-related serious adverse events have been reported.

On August 31, 2020, the company announced that the FDA has granted Orphan Drug designation for BCX9930, for the treatment of PNH. Orphan Drug designation qualifies BCX9930 for various development incentives, including tax credits for certain clinical costs, a waiver of the new drug application fee and a designated period of market exclusivity following approval.
Coronavirus Antiviral Program – Galidesivir (BCX4430)

Part 1 of a clinical trial of galidesivir in COVID-19 patients in Brazil has completed enrollment and the company expects to report results in the fourth quarter.

The primary endpoint of part 1 is safety. Data is also being collected on secondary endpoints, including clinical outcomes and virology. Based on recent conversations with the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health, the major funding partner for the program, the company understands that data from part 1 is a gating item for the program and some evidence of clinical and/or antiviral activity is important for the program to advance.
Additional Updates

The company remains on track to report data in Q4 2020 from its ongoing Phase 1 clinical trial of BCX9250, an oral ALK-2 kinase inhibitor for treatment of fibrodysplasia ossificans progressiva (FOP), in healthy subjects.

On September 3, 2020, the company announced that the U.S. Department of Health and Human Services (HHS) has exercised its option to purchase an additional 10,000 doses of BioCryst’s approved antiviral influenza therapy, RAPIVAB (peramivir injection), for approximately $7 million. The order is part of a $34.7 million contract (Contract No. 75D301-18-C-02984) the Centers for Disease Control and Prevention awarded in 2018 for the procurement of up to 50,000 doses of RAPIVAB (peramivir injection) over a five-year period for the strategic national stockpile.

Third Quarter 2020 Financial Results

For the three months ended September 30, 2020, total revenues were $6.1 million, compared to $1.8 million in the third quarter of 2019. The increase was primarily due to an increase in collaboration revenue under U.S. government development contracts and higher peramivir product sales to our commercial partners.

Research and development (R&D) expenses for the third quarter of 2020 increased to $30.2 million from $25.1 million in the third quarter of 2019, primarily due to increased spending on our complement-mediated diseases and galidesivir programs.

Selling, general and administrative (SG&A) expenses for the third quarter of 2020 increased to $17.2 million, compared to $11.7 million in the third quarter of 2019. The increase was primarily due to increased spending on commercial and medical affairs activities to support the U.S. commercial launch of ORLADEYO.

Interest expense was $2.9 million in the third quarter of 2020, compared to $3.0 million in the third quarter of 2019.

Net loss for the third quarter of 2020 was $46.1 million, or $0.26 per share, compared to a net loss of $37.6 million, or $0.34 per share, for the third quarter of 2019.

Cash, cash equivalents, restricted cash and investments totaled $148.5 million at September 30, 2020, and reflect an increase from $137.8 million at December 31, 2019. Operating cash use for the third quarter of 2020 was $43.1 million. Net operating cash use for the first nine months of 2020 was $98.0 million, as compared to $77.9 million for the first nine months of 2019.

Financial Outlook for 2020

BioCryst continues to expect full year 2020 net operating cash use to be in the range of $150 to $165 million, and its operating expenses to be in the range of $180 to $195 million. The company’s operating expense range excludes equity-based compensation expense due to the difficulty in reliably projecting this expense, as it is impacted by the volatility and price of the company’s stock, as well as by the vesting of the company’s outstanding performance-based stock options.

Conference Call and Webcast

BioCryst management will host a conference call and webcast at 8:30 a.m. ET today to discuss the financial results and provide a corporate update. The live call may be accessed by dialing 877-303-8027 for domestic callers and 760-536-5165 for international callers and using conference ID # 3766784. A live webcast of the call and any slides will be available online at the investors section of the company website at www.biocryst.com. A telephone replay of the call will be available by dialing 855-859-2056 for domestic callers or 404-537-3406 for international callers and entering the conference ID # 3766784.