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Corcept Therapeutics Announces First Quarter 2019 Financial Results and Provides Corporate Update

On May 9, 2019 Corcept Therapeutics Incorporated (NASDAQ: CORT), a commercial-stage company engaged in the discovery and development of drugs to treat severe metabolic, oncologic and psychiatric disorders by modulating the effects of the stress hormone cortisol, reported its financial results for the quarter ended March 31, 2019 (Press release, Corcept Therapeutics, MAY 9, 2019, https://ir.corcept.com/news-releases/news-release-details/corcept-therapeutics-announces-first-quarter-2019-financial [SID1234536056]).

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Financial Highlights

Revenue of $64.8 million, a 12 percent increase from first quarter 2018
Fully-diluted GAAP net income of $0.15 per share, compared to $0.14 per share in first quarter 2018
Fully-diluted non-GAAP net income of $0.20 per share, compared to $0.19 per share in first quarter 2018
Cash and investments of $215.7 million, a $9.0 million increase from year-end 2018
Reaffirmed 2019 revenue guidance of $285 – $315 million
Corcept reported quarterly revenue of $64.8 million, compared to $57.7 million in the first quarter of 2018. First quarter GAAP net income was $18.3 million, compared to $17.5 million in the same period last year. Excluding non-cash expenses related to stock-based compensation, utilization of deferred tax assets and related income tax effects, non-GAAP net income in the first quarter was $24.3 million, compared to $24.5 million in the first quarter of 2018. A reconciliation of GAAP to non-GAAP net income is included below.

First quarter operating expenses were $45.9 million, compared to $36.7 million in the first quarter of 2018, primarily due to an increase in research and development personnel and increased spending to advance new compounds towards the clinic and to formulate and manufacture relacorilant, CORT118335 and CORT125281.

Cash and investments were $215.7 million at March 31, 2019, an increase of $9.0 million from year-end. This increase was after the expenditure of $13.6 million in the first quarter to repurchase 1.2 million shares of common stock. At March 31, 2019, $62.8 million remained available under Corcept’s stock repurchase program.

The company reaffirmed 2019 revenue guidance of $285 – $315 million.

"As in prior years, our first quarter revenue was reduced as payors forced patients to secure reauthorization of their insurance," said Joseph K. Belanoff, MD, Corcept’s Chief Executive Officer. "Our first quarter revenue was also reduced by the requirement that we cover a portion of the ‘donut hole’ in Medicare Part D insurance plans – a portion that, by statute, increased significantly this year. No patient’s care was interrupted, because we provide Korlym at no cost until coverage is restored. The number of patients receiving Korlym continues to grow.

"Awareness of Cushing’s syndrome and the importance of screening more widely for the disorder is increasing," Dr. Belanoff added. "Our goal is to educate physicians about the benefits of cortisol modulation with Korlym and, should it continue to generate positive clinical data and we secure FDA approval, relacorilant, Korlym’s planned successor. We believe relacorilant has the potential to offer significant benefits – even beyond what we see with Korlym."

Clinical Highlights

Dosing continues in Phase 3 trial of relacorilant in patients with Cushing’s syndrome ("GRACE")
European Medicines Agency ("EMA") recommends orphan designation for relacorilant to treat patients with Cushing’s syndrome
Dosing initiated in double-blind, placebo-controlled, Phase 1b trial of CORT118335 for prevention of antipsychotic-induced weight gain; Phase 2 trials in reversal of antipsychotic-induced weight gain planned in second half of 2019
Placebo-controlled, Phase 2 trial of CORT118335 to treat non-alcoholic steatohepatitis ("NASH") planned in second half of 2019
Data from Phase 1/2 trial of relacorilant plus Abraxane in solid tumors to be presented at 2019 ASCO (Free ASCO Whitepaper) Meeting, May 31 – June 4
Dosing continues in controlled, Phase 2 trial of relacorilant plus Abraxane in metastatic ovarian cancer
Dosing continues in Phase 1/2 trial of CORT125281 plus Xtandi in castration-resistant prostate cancer
"It is an exciting time to join Corcept," said Andreas Grauer, MD, who became Corcept’s Chief Medical Officer in March 2019. "Three of our proprietary, selective cortisol modulators have entered the clinic and we are conducting five clinical trials – in Cushing’s syndrome, solid tumors and antipsychotic-induced weight gain. Additional trials – in antipsychotic-induced weight gain and NASH – are planned for later in the year."

"Relacorilant’s GRACE trial continues to dose patients with Cushing’s syndrome and has begun opening sites in Europe, where many of our Phase 2 patients were enrolled. The EMA’s recommendation that relacorilant receive orphan drug designation is especially gratifying. Unlike in the United States, orphan designation in Europe requires the authorities to find plausible evidence of a drug’s efficacy and potential to confer significant clinical benefit compared to already-approved treatments – findings we hope GRACE will confirm for relacorilant." (For more about GRACE, go to cushingresearch.com.)

Corcept presented data from relacorilant’s Phase 2 trial at the 2019 annual meeting of the American Association of Clinical Endocrinologists ("AACE") in April. Subjects in the trial exhibited clinically meaningful improvements in the trial’s key endpoints – hypertension and glucose control – and in a variety of secondary endpoints, including weight loss, liver function, coagulopathy, insulin resistance, cognitive function, mood and quality of life. Relacorilant was well-tolerated, with the most common adverse events being those associated with a reduction in excess cortisol activity. These side effects usually resolve with continued treatment. There were no instances of abnormal vaginal bleeding, even in women who had previously experienced abnormal vaginal bleeding with Korlym. Importantly, there were no instances of hypokalemia, an adverse event experienced by 44 percent of patients in Korlym’s pivotal trial and a leading cause of Korlym discontinuation. (Corcept’s AACE presentation is available at ir.corcept.com/events.)

"Our oncology program is also progressing," said Dr. Grauer. "Enrollment has begun in our 180-patient, controlled, Phase 2 trial of relacorilant plus Abraxane in patients with metastatic ovarian cancer. At the ASCO (Free ASCO Whitepaper) congress this June, we will present data from our Phase 1/2 trial of relacorilant plus Abraxane in a variety of solid tumors and discuss our plans in metastatic pancreatic cancer."

"Finally, our most promising compound for metabolic disorders, CORT118335, has entered the clinic. We are dosing healthy subjects in a placebo-controlled Phase 1b trial in the prevention of antipsychotic-induced weight gain and plan to start two placebo-controlled, Phase 2 trials in patients later this year, as well as a placebo-controlled, Phase 2 trial in patients with NASH – a precursor of cirrhosis. These disorders afflict millions of patients and there are no good treatment options."

Conference Call
We will hold a conference call on May 9, 2019, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). To participate, dial 1-800-347-6311 from the United States or 1-323-994-2132 internationally approximately ten minutes before the start of the call. The passcode will be 4773625. A replay will be available through May 23, 2019 at 888-203-1112 in the United States and 719-457-0820 internationally. The passcode will be 4773625.

Hypercortisolism
Hypercortisolism, often referred to as Cushing’s syndrome, is caused by excessive activity of the hormone cortisol. Endogenous Cushing’s syndrome is an orphan disease that most often affects adults aged 20-50. In the United States, an estimated 20,000 patients have Cushing’s syndrome, with about 3,000 new patients being diagnosed each year. Symptoms vary, but most people experience one or more of the following manifestations: high blood sugar, diabetes, high blood pressure, upper-body obesity, rounded face, increased fat around the neck, thinning arms and legs, severe fatigue and weak muscles. Irritability, anxiety, cognitive disturbances and depression are also common. Hypercortisolism can affect every organ system in the body and can be lethal if not treated effectively.

NantHealth Reports 2019 First-Quarter Financial Results

On May 9, 2019 NantHealth, Inc. (NASDAQ-GS: NH), a next-generation, evidence-based, personalized healthcare company, reported financial results for its first quarter ended March 31, 2019 (Press release, NantHealth, MAY 9, 2019, View Source;p=RssLanding&cat=news&id=2398133 [SID1234536055]).

"We had an excellent start to fiscal 2019," said Bob Petrou, Chief Financial Officer of NantHealth. "Our solid 2019 first quarter results were driven by higher total revenue combined with an improved gross margin. Our SaaS business, which comprises the largest portion of our operations, continued its sequential quarterly topline growth, and with the recent signing of a multi-year contract for our Eviti clinical decision support solution, we expect to continue to see further revenue growth."

Software and Services Highlights:

Clinical Decision Support (Eviti):
In Q2, signed a three-year partnership with a leading nonprofit multi-state health plan, expanding Eviti Connect’s total covered lives to over 25 million
In Q1, released versions 7.6 and 7.7, with the following enhancements:
Added features that alert payers when a patient begins treatment before eligibility is determined
Clinical content teams can now publish regimens more efficiently and effectively to meet client needs
Payer medical management groups can now customize warnings and deviations for their clinically equivalent programs
Payers are now provided with superior insights into member eligibility and treatment timeframes
Payer Engagement (NaviNet):
In Q1, implemented refreshed pricing for NaviNet AllPayer services, which is expected to drive enhanced SaaS financial performance in 2019
In Q1, enhanced new workflow capabilities within the Authorizations applications to support functionality in submission workflow, and updated the Authorization Appeals application to better support users
In Q1, upgraded the Claim Status Inquiry tool to allow for better visibility of actions taken within NaviNet for non-NaviNet Claims, increasing utility of the NaviNet solution beyond current payer partners
In Q1, provided health plans/payers greater efficiency by allowing enhanced customization to Open Claim attachment metadata, improving automated file retrieval and processing on their backend
Connected Care (DeviceConX):
In Q1, participated in Healthcare Information and Management Systems Society (HIMSS) Conference in Orlando, FL, showcasing the DeviceConX solution’s ability to successfully deliver GE Healthcare device data and the company’s collaborations with Dell Boomi, Baxter and other kidney dialysis treatment solutions
In Q1, significantly increased connectivity license sales, driving improved recurring maintenance revenue on a go forward basis, as previously announced
In Q1, as previously announced, deployed DeviceConX Version 5.15 upgrade, with the ability to push OS security patches directly to HBox Connected Care hardware devices
In April, the company presented its VitalsConX technology at the American Nursing Informatics Association (ANIA) Annual Conference, demonstrating the ease of collecting, inputting and integrating patient data into electronic health records (EHRs)
Sequencing and Molecular Analysis – Highlights
In Q1, total GPS orders were 820, comprised of GPS Cancer of 428 and Liquid GPS of 392
In Q1, scientific teams from NantHealth and NantOmics presented five posters at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper)’s (ASCO) (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium and two posters at the ASCO (Free ASCO Whitepaper)’s Genitourinary Cancers Symposium. The research presented focused on the significance of RNA expression, in tissue and blood, and individual biomarkers in determining why some patients do not respond to targeted cancer therapies based on DNA genomic profiling alone
Business and Financial Highlights

For the 2019 first quarter, total net revenue was $23.7 million, compared with $22.3 million in 2018 first quarter. Gross profit was $12.4 million, or 52% of total net revenue, compared with $11.2 million, or 50% of total net revenue, for the prior year period. Selling, general and administrative expenses declined to $16.8 million, from $20.7 million in 2018 first quarter. Research and development expenses decreased to $5.1 million from $5.2 million.

Financial results for the first quarter of 2019 included non-cash charges for loss from related party equity method investment and Allscripts liability of $4.7 million. Net loss from continuing operations, net of tax, was $19.8 million, or $0.18 per share, compared with $22.0 million, or $0.20 per share, for the 2018 first quarter. Net loss was $19.9 million, or $0.18 per share, compared with $22.2 million, or $0.20 per share, for 2018 first quarter.

For the 2019 first quarter, on a non-GAAP basis, adjusted net loss from continuing operations was $10.7 million, or $0.10 per share, compared with $13.5 million, or $0.12 per share, for the 2018 first quarter.

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 first quarter ended March 31, 2019. 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 6159197. 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.

Use of Non-GAAP Financial Measures

This news release contains references to Non-GAAP financial measures, including adjusted net loss and adjusted net loss per share, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). The Company’s management believes that the presentation of Non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor’s overall understanding of the financial results for the Company’s core business. Additionally, it provides a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. Other companies may define these measures in different ways. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. Non-GAAP per share numbers are calculated based on one class of common stock and do not incorporate the effects, if any, of using the two-class method.

Veracyte to Present at the UBS Global Healthcare Conference

On May 9, 2019 Veracyte, Inc. (Nasdaq: VCYT), a leading genomic diagnostics company, reported that Bonnie H. Anderson, chairman and chief executive officer, is scheduled to present at the UBS Global Healthcare Conference in New York City on Monday, May 20, 2019 at 9:30 a.m. EDT (Press release, Veracyte, MAY 9, 2019, View Source [SID1234536054]).

The link to the live audio webcast of the company’s presentation will be available by visiting Veracyte’s website at View Source A replay of the webcast will be available for 90 days following the conclusion of the live presentation broadcast.

Deciphera Pharmaceuticals, Inc. Announces First Quarter 2019 Financial Results

On May 9, 2019 Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), a clinical-stage biopharmaceutical company focused on addressing key mechanisms of tumor drug resistance, reported financial results for the first quarter ended March 31, 2019 and provided an update on clinical and corporate developments (Press release, Deciphera Pharmaceuticals, MAY 9, 2019, View Source [SID1234536053]).

"Our team made significant progress during the first quarter of 2019 advancing our portfolio of novel drug candidates from our proprietary kinase switch control inhibitor platform," said Steve Hoerter, President and Chief Executive Officer of Deciphera. "We expect top-line data from our INVICTUS pivotal Phase 3 study of ripretinib for the treatment of fourth-line and fourth-line plus GIST patients in mid-2019 and pending favorable results from this study, we look forward to our first NDA submission and laying the groundwork for our first potential launch in the United States. In addition, we continue to advance key clinical trials of DCC-3014 and rebastinib and we expect to announce the initiation of IND-enabling preclinical studies for a new clinical candidate later this year."

Recent Clinical Updates

Ripretinib (DCC-2618)
Deciphera expects to report top-line data from the INVICTUS pivotal Phase 3 clinical study evaluating the safety and efficacy of ripretinib, the Company’s investigational broad-spectrum KIT and PDGFRα inhibitor, in fourth-line and fourth-line plus gastrointestinal stromal tumor (GIST) patients in mid-2019. The Company is building its commercial and medical affairs capabilities to support the planned launch of ripretinib in the United States, if approved.
Deciphera is actively enrolling patients in the INTRIGUE Phase 3 clinical study comparing ripretinib to sunitinib for the treatment of second-line GIST patients who have previously received imatinib.
Rebastinib
Deciphera announced the initiation of an open-label, multicenter, Phase 1b/2 combination study of rebastinib, the Company’s investigational small molecule switch control inhibitor of TIE2 kinase, with carboplatin in patients with advanced or metastatic solid tumors.
Deciphera completed enrollment of 40 patients in Part 1 of the Phase 1b/2 combination study of rebastinib with paclitaxel. In April 2019, Deciphera selected a 100 mg BID dose of rebastinib in combination with a weekly dose of 80 mg/m2 of paclitaxel as the recommended Phase 2 dose for Part 2 of the study, which is expected to begin enrollment later this quarter. The Company expects to report initial data from Part 1 of this study in the second half of 2019.
DCC-3014
Deciphera announced positive, preliminary top-line data from the ongoing dose escalation portion of the Phase 1 clinical study of DCC-3014, the Company’s investigational small molecule switch control inhibitor of CSF1R, in patients with advanced malignancies. The Company plans to present a review of further data from this Phase 1 study in the second half of 2019.
The Company is currently enrolling patients diagnosed with tenosynovial giant cell tumors (TGCT) in its expanded Phase 1 study evaluating DCC-3014.
Corporate Update

Deciphera announced the appointment of Steve Hoerter as President & Chief Executive Officer, effective March 18, 2019. Mr. Hoerter has served as a member of the Deciphera Board of Directors since May 2018. He joined the Company from Agios, where he was Chief Commercial Officer. He succeeded Michael D. Taylor, Ph.D., who retired as President & Chief Executive Officer of the Company. Dr. Taylor remains as senior advisor to the Company and a member of the Company’s Board of Directors.
First Quarter 2019 Financial Results

Cash Position: As of March 31, 2019, cash, cash equivalents and marketable securities were $262.3 million, compared to cash and cash equivalents of $293.8 million as of December 31, 2018. Deciphera expects its current cash, cash equivalents and marketable securities will enable the Company to fund its operating, capital expenditures and debt service payments into the second half of 2020.
R&D Expenses: Research and development expenses for the first quarter of 2019 were $35.8 million, compared to $16.9 million for the same period in 2018. The increase was primarily due to an increase in spending on the ripretinib program of $10.7 million as a result of clinical trial costs related to the Phase 3 INTRIGUE study in second-line GIST, which the Company initiated in December 2018, and includes $5.3 million for comparator drug to be used in this trial. Expenses related to the rebastinib program increased $3.2 million, primarily due to the Phase 1b/2 study of rebastinib in combination with paclitaxel, which the Company initiated in October 2018, and the second Phase 1b/2 clinical trial of rebastinib in combination with carboplatin, which the Company initiated in January 2019. Personnel-related costs increased $3.7 million due primarily to increased headcount and stock-based compensation expense in research and development functions. Personnel-related costs for the first quarters of 2019 and 2018 included non-cash stock-based compensation expense of $1.7 million and $1.0 million, respectively. Facility-related and other costs included in unallocated expenses increased $1.7 million primarily due to increased costs incurred in connection with early-stage drug discovery programs and increased consulting fees.
G&A Expenses: General and administrative expenses for the first quarter of 2019 were $13.2 million, compared to $5.0 million for the same period in 2018. The increase was primarily a result of increases in stock-based compensation expense and headcount in general and administrative functions. Non-cash stock-based compensation was $4.5 million and $1.1 million for the first quarters of 2019 and 2018, respectively. The increase in stock-based compensation expense was primarily related to the modification of stock options pursuant to the transition agreement with the Company’s former President and Chief Executive Officer and additional employee stock options. In addition, professional and consultant fees increased due to various advisory fees, including those related to commercialization preparedness.
Net Loss: For the first quarter of 2019, Deciphera reported a net loss of $47.4 million, or $1.25 per share, compared with a net loss of $21.4 million, or $0.66 per share, for the same period in 2018.

BeiGene Reports First Quarter 2019 Financial Results

On May 9, 2019 BeiGene, Ltd. (NASDAQ: BGNE; HKEX: 06160), a commercial-stage biopharmaceutical company focused on developing and commercializing innovative molecularly-targeted and immuno-oncology drugs for the treatment of cancer, reported recent business highlights, anticipated upcoming milestones and financial results for the first quarter of 2019 (Press release, BeiGene, MAY 9, 2019, View Source [SID1234536052]).

"We made good progress in each of our business areas, including strong commercial performance in the first quarter of 2019, as we prepare for our planned launches in China and first new drug application in the United States. Our team is continuing to expand across the globe, with new trials, new indications, and importantly, new hope for patients with cancer who may not have had access or options for treating their disease," said John V. Oyler, Co-Founder, Chief Executive Officer, and Chairman of BeiGene.
Recent Business Highlights and Upcoming Milestones
Clinical Programs
Zanubrutinib (BGB-3111), an investigational small molecule inhibitor of Bruton’s tyrosine kinase (BTK) designed to maximize BTK occupancy and minimize off-target effects
Expected Milestones in 2019

Receive approvals in China for the treatment of patients with relapsed or refractory (R/R) mantle cell lymphoma (MCL) and R/R chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL);

Submit an initial New Drug Application (NDA) for zanubrutinib in the U.S. in 2019 or early 2020;

Announce top-line results from the pivotal Phase 2 trial in Chinese patients with Waldenström macroglobulinemia (WM) and submit an NDA in China for WM;

Achieve first patient dosing in a Phase 1b trial conducted by MEI Pharma of zanubrutinib in combination with ME-401, an investigational selective oral phosphatidylinositol 3-kinase (PI3K) delta inhibitor;

Complete enrollment of the Phase 3 trial of zanubrutinib compared to bendamustine plus rituximab in patients with previously untreated CLL or SLL;

Present data from the non-randomized MYD88WT cohort of the Phase 3 trial in WM;

Announce top-line results from the randomized cohort of the Phase 3 trial comparing zanubrutinib to ibrutinib in patients with WM; and

Present updated data from the global Phase 1 trial in WM and MCL; pivotal data from the China Phase 2 trials in R/R MCL and R/R CLL/SLL; data from Phase 1 obinutuzumab combination data in CLL/SLL; updated data from the Phase 1 obinutuzumab combination trial in non-Hodgkin’s lymphoma (NHL); and updated data from the global Phase 1 trial in CLL/SLL.
Tislelizumab (BGB-A317), an investigational humanized IgG4 anti-PD-1 monoclonal antibody specifically designed to minimize binding to FcγR on macrophages

Announced Phase 1 long-term exposure data and results from the structural and mechanistic analyses at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April 2019; and

Initiated a Phase 3 front-line trial in China of tislelizumab combined with chemotherapy compared to placebo with chemotherapy in patients with recurrent or metastatic nasopharyngeal cancer.
Expected Milestones in 2019

Receive NDA approval in China for treatment of patients with R/R classical Hodgkin’s lymphoma (cHL);

Present preliminary results of tislelizumab in Chinese patients with nasopharyngeal cancer at the 2019 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, being held in Chicago May 31 – June 4;

Announce top-line results from the pivotal Phase 2 trial in Asian patients with urothelial carcinoma (UC) and file an NDA for UC in China;

Announce top-line results from the global Phase 2 trial in second- or third-line patients with hepatocellular carcinoma (HCC) and have regulatory discussions;

Present updated China pivotal Phase 2 data in R/R cHL; updated Phase 2 chemotherapy combination data; and Phase 1 data from China trials; and

Complete or nearly complete enrollment in all four ongoing Phase 3 trials in lung and liver cancers.
Pamiparib (BGB-290), an investigational small molecule PARP inhibitor
Expected Milestones in 2019

Announce top-line results from the pivotal Phase 2 trial in Chinese patients with previously treated ovarian cancer in late 2019 or early 2020; and

Present data from the global Phase 1 trial in patients with ovarian cancer and Phase 1 combination data in patients with solid tumors or glioblastoma multiforme.
Lifirafenib (BGB-283), an investigational RAF dimer inhibitor

In collaboration with SpringWorks Therapeutics, Inc., initiated a Phase 1b combination trial of lifirafenib in combination with PD-0325901, an investigational MEK inhibitor in patients with advanced or refractory solid tumors that harbor RAS mutations, RAF mutations, and other MAPK pathway aberrations.
Manufacturing Facilities

Substantially completed equipment installation and validation of GE Healthcare’s KUBioTM technology-based biologics manufacturing facility in Guangzhou, China.
Commercial Operations

Generated $57.42 million in product revenue in the three months ended March 31, 2019, from sales in China of ABRAXANE, REVLIMID and VIDAZA, which represents a 147% increase compared to the same period in 2018 and a 52% sequential growth compared to the previous quarter; and

Received supplementary medical insurance coverage for REVLIMID from Zhuhai, Guangdong province, China.
Corporate Developments

Announced a global collaboration agreement with BioAtla, LLC, for the development, manufacturing, and commercialization of BioAtla’s investigational Conditionally Active Biologic (CAB) CTLA-4 antibody (BA3071). BA3071 is a novel, CTLA-4 inhibitor that is designed to be conditionally activated in the tumor microenvironment in order to reduce systemic toxicity and potentially enable safer combinations with checkpoint inhibitors. Subject to regulatory clearance of the Investigational New Drug (IND) application, a Phase 1/2 multi-center, open-label study designed to evaluate the safety, tolerability, pharmacokinetics, immunogenicity, and antitumor activity of BA3071 alone and in combination with tislelizumab is anticipated to start in the second half of 2019; and

Announced a global research and development collaboration with Ambrx, Inc. to develop next-generation biologics utilizing Ambrx’s proprietary Expanded Genetic Code technology platforms designed to allow the efficient incorporation of non-natural amino acids into proteins in both E. Coli (ReCODETM) and CHO cells (EuCODETM) for precision protein engineering.
First Quarter 2019 Financial Results
Cash, Cash Equivalents, Restricted Cash, and Short-Term Investments were $1.64 billion as of March 31, 2019, compared to $1.81 billion as of December 31, 2018.

The decrease of $171.67 million in the first quarter of 2019 was primarily due to $171.98 million of cash used in operating activities, $29.00 million of upfront payments made under collaboration agreements, and $21.83 million for investments in property, plant and equipment primarily attributable to the build-out of the Guangzhou biologic

manufacturing facility. The decrease was partially offset by $36.70 million in proceeds from an additional drawdown under our Guangzhou factory loan.
Revenue for the first quarter ended March 31, 2019 was $77.83 million, compared to $32.54 million in the same period in 2018. The increase is attributable to increased product revenue in China and collaboration revenue under our license and collaboration agreements with Celgene.

Product revenue from sales of ABRAXANE, REVLIMID and VIDAZA in China totaled $57.42 million for the first quarter ended March 31, 2019, compared to $23.25 million for the same period in 2018.

Collaboration revenue totaled $20.41 million for the first quarter ended March 31, 2019, compared to $9.29 million for the same period in 2018.
Expenses for the first quarter ended March 31, 2019 were $251.59 million, compared to $143.35 million in the same period in 2018.

Cost of Sales for the first quarter ended March 31, 2019 were $15.26 million, compared to $4.55 million in the same period in 2018. Cost of sales related to the cost of acquiring ABRAXANE, REVLIMID and VIDAZA for distribution in China.

R&D Expenses for the first quarter ended March 31, 2019 were $178.35 million, compared to $109.70 million in the same period in 2018. The increase in R&D expenses was primarily attributable to increased spending on our ongoing and newly initiated late-stage pivotal clinical trials, preparation for regulatory submissions and commercial launch of our late-stage drug candidates, and manufacturing costs related to pre-commercial activities and supply. Employee share-based compensation expense also contributed to the overall increase in R&D expenses, and was $15.77 million for the first quarter ended March 31, 2019, compared to $12.05 million for the same period in 2018, due to increased headcount.

SG&A Expenses for the first quarter ended March 31, 2019 were $57.65 million, compared to $28.92 million in the same period in 2018. The increase in SG&A expenses was primarily attributable to increased headcount, including the expansion of our commercial team to support the distribution of our commercial products in China and the potential launches of our late-stage drug candidates, as well as higher professional service fees and costs to support our growing operations. The overall increase in SG&A expenses was also attributable to higher SG&A-related share-based compensation expense, which was $10.62 million for the first quarter ended March 31, 2019, compared to $5.34 million for the same period in 2018, due to increased headcount.

Net Loss for the first quarter ended March 31, 2019 was $167.64 million, or $0.22 per share, or $2.81 per American Depositary Share (ADS), compared to $104.60 million, or $0.16 per share, or $2.03 per ADS in the same period in 2018.