On February 26, 2019 Vericel Corporation (NASDAQ:VCEL), a leader in advanced cell therapies for the sports medicine and severe burn care markets, reported financial results and business highlights for the fourth quarter and year ended December 31, 2018 and provided full-year 2019 financial guidance (Press release, Vericel, FEB 26, 2019, View Source [SID1234533670]).
Fourth Quarter 2018 Financial Highlights

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Total net product revenues increased 41% to $31.3 million compared to $22.2 million in the fourth quarter of 2017;

Gross margins of 72% compared to gross margins of 64% in the fourth quarter of 2017;

Net income of $5.2 million, or $0.11 per share, compared to $0.3 million, or $0.01 per share, in the fourth quarter of 2017;

Non-GAAP adjusted EBITDA of $7.7 million compared to $2.2 million in the fourth quarter of 2017; and

As of December 31, 2018, after retiring all outstanding debt, the company had $82.9 million in cash and short-term investments compared to $26.9 million in cash at December 31, 2017.

Full-Year 2018 Financial Highlights

Total net product revenues increased 45% to $90.9 million compared to $62.8 million in 2017;

Gross margins of 65% compared to gross margins of 53% in 2017;
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Net loss of $8.1 million, or $0.20 per share, compared to a net loss of $17.3 million, or $0.52 per share, in 2017; and

Non-GAAP adjusted EBITDA of $4.7 million compared to a loss of $9.4 million in 2017.

Recent Business Highlights
During and since the fourth quarter of 2018, the company:

Reported record fourth quarter revenues, marking the seventh consecutive quarter with record revenues for the reported quarter;

Reported full-year positive adjusted EBITDA;

Expanded the MACI sales force from 40 to 48 territories; and

Reported publication of outcomes data from 954 burn patients treated with Epicel in the Journal of Burn Care and Research.

"We delivered record fourth quarter and full-year revenues and gross margins, and reported full-year positive adjusted EBITDA for the first time in the company’s history," said Nick Colangelo, president and CEO of Vericel. "Based on MACI’s performance in 2018 and the feedback that we are receiving from surgeons and patients, it is clear that MACI is filling what has been a large unmet need in the cartilage repair market, and we expect continued strong revenue and profit growth in 2019."

2019 Financial Guidance
The company expects total net product revenues for 2019 to be in the range of $108 million to $112 million. The company also expects margins to continue to increase, with approximately 80% of marginal revenue over 2018 to contribute to gross profit and approximately 50% of marginal revenue over 2018 to contribute to adjusted EBITDA. Quarterly seasonality, which impacts both revenues and margins, is expected to follow the same pattern as 2018.

Fourth Quarter 2018 Results
Total net product revenues for the quarter ended December 31, 2018 increased 41% to $31.3 million compared to $22.2 million in the fourth quarter of 2017. Total net product revenues for the quarter included $25.1 million of MACI (autologous cultured chondrocytes on porcine collage membrane) net revenue and $6.2 million of Epicel (cultured epidermal autografts) net revenue, compared to $16.1 million of MACI net revenue and $6.1 million of Epicel net revenue, respectively, in the fourth quarter of 2017. Total revenues for the fourth quarter of 2017 also included $1.2 million in license revenue related to the company’s license agreement with Innovative Cellular Therapeutics (ICT).
Gross profit for the quarter ended December 31, 2018 was $22.7 million, or 72% of net revenues, compared to $15.0 million, or 64% of net revenues, for the fourth quarter of 2017.
Total operating expenses for the quarter ended December 31, 2018 were $16.7 million compared to $13.8 million for the same period in 2017. The increase in operating expenses was primarily due to $1.4 million in service fees paid to MACI pharmacy distributors, an incremental $1.2 million in employee-related expenses associated with the expanded MACI sales force, and an incremental $0.5 million in stock-based compensation expense.
Vericel’s net income for the quarter ended December 31, 2018 was $5.2 million, or $0.11 per share, compared to a $0.3 million, or $0.01 per share, for the fourth quarter of 2017.
Non-GAAP adjusted EBITDA was $7.7 million for the quarter ended December 31, 2018 compared to $2.2 million in the fourth quarter of 2017. See table reconciling non-GAAP measures for more details.

As of December 31, 2018, the company had $82.9 million in cash and short-term investments compared to $26.9 million in cash at December 31, 2017.
Full-Year 2018 Results
Total net product revenues for the year ended December 31, 2018 increased 45% to $90.9 million compared to $62.8 million in 2017. Total net product revenues for the year included $67.7 million of MACI net revenue and $23.1 million of Epicel net revenue, compared to $43.9 million of MACI and Carticel (autologous cultured chondrocytes) net revenue and $18.9 million of Epicel net revenue, respectively, in 2017. Total revenues in 2017 also included $1.2 million in license revenue related to the company’s license agreement with ICT.
Gross profit for the year ended December 31, 2018 was $58.7 million, or 65% of net revenues, compared to $33.6 million, or 53% of net revenues, for 2017.
Total operating expenses for the year ended December 31, 2018 were $62.6 million compared to $48.6 million in 2017. The increase in operating expenses was primarily due to an incremental $4.5 million in employee-related expenses associated with the expanded MACI sales force, an incremental $2.7 million in stock-based compensation expense and an increase of $2.6 million in service fees paid to MACI pharmacy distributors.
Vericel’s net loss for the year ended December 31, 2018 was $8.1 million, or $0.20 per share, compared to a loss of $17.3 million, or $0.52 per share, in 2017.
Non-GAAP adjusted EBITDA was $4.7 million for the year ended December 31, 2018 compared to a loss of $9.4 million in 2017. See table reconciling non-GAAP measures for more details.
Conference Call Information
Today’s conference call will be available live at 8:30am Eastern time in the Investor Relations section of the Vericel website at View Source." target="_blank" title="View Source." rel="nofollow">View Source Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software if necessary. To participate in the live call by telephone, please call (877) 312-5881 and reference Vericel Corporation’s fourth-quarter 2018 investor conference call. If calling from outside the U.S., please use the international phone number (253) 237-1173.
If you are unable to participate in the live call, the webcast will be available at View Source until February 26, 2020. A replay of the call will also be available until 11:15am (EDT) on March 3, 2019 by calling (855) 859-2056, or from outside the U.S. (404) 537-3406. The conference ID is 3485006.

On February 25, 2019 Hummingbird Bioscience reported it has been awarded a product development grant totalling $13.1 million from the Cancer Prevention and Research Institute of Texas (CPRIT) (Press release, Hummingbird Bioscience, FEB 25, 2019, View Source [SID1234554020]).

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The grant will support the Phase IA/B clinical trials of the company’s first-in-class anti-VISTA therapeutic antibody for the treatment of VISTA mediated suppression of anti-tumor immunity in solid tumors and lymphomas that are unresponsive to existing therapies. Hummingbird Bioscience is a systems-biology enabled biotech company focused on the discovery and development of novel cancer therapeutics.

The CPRIT review for this grant included an in-depth evaluation of HMBD-002, an antibody that uniquely neutralizes VISTA function, by a panel of scientific, medical, and industry experts. The evaluation included rigorous review of the pre-clinical data, as well as regulatory, research and development, and intellectual property due diligence.

The grant will support the Phase IA/B clinical study and preparatory steps including GMP manufacturing and Investigational New Drug (IND) submission for the HMBD-002 program. The grant will also support the relocation of the company’s U.S. headquarters to Texas. Clinical trials for HMBD-002 are anticipated to begin in 2020. Hummingbird Bioscience was the only successful application of its type for this grant cycle.

The award follows the recent announcement of Nobel Laureate James P. Allison, Ph.D. and Padmanee Sharma, M.D., Ph.D. joining Hummingbird’s Scientific Advisory Board.

"We are delighted to be awarded this highly-selective grant from CPRIT and to start building our operations in Texas," said Piers Ingram, Ph.D., CEO of Hummingbird Bioscience. "Our company applies systems biology approaches to generate uniquely differentiated therapeutic antibodies. We are thrilled CPRIT’s panel of experts agrees that developing this anti-VISTA immuno-oncology program has the potential to significantly benefit patients."

On February 25, 2019 Cellaria, LLC, a scientific innovator that develops revolutionary new models for cancer and other diseases, reported a new distribution partnership with Rockland Immunochemicals, Inc. (Rockland), a life science supplier and manufacturer that specializes in antibodies and antibody-based tools for research applications and assay development (Press release, Rockland, FEB 25, 2019, View Source [SID1234553932]). The agreement gives Rockland the rights to market and sell Cellaria’s high-quality next generation in-vitro disease models and cell culture media worldwide.

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With Rockland, Cellaria adds to its growing list of strategic distribution partners, expanding its global market presence and reach. Cellaria’s novel cell culture media and cancer cell models add to Rockland’s arsenal of products targeting cancer research and drug screening.

Cellaria’s cell models express different biomarkers that are directly correlated to the patient specimens used to create the models. The diversity of biomarker expression within similar categories of patients enables researchers to generate drug response and disease progression data that is highly relevant to those individual patients.

"We allow drug and cancer researchers to make much more informed decisions about which populations of patients are more likely to respond effectively to drugs that are under investigation," said David Deems, CEO of Cellaria. "Rockland’s scientific knowledge and their ability to sell cutting-edge and custom products make them a great fit to represent the innovation that we bring to market."

James Fendrick, CEO of Rockland stated, "Cellaria’s offerings will nicely complement Rockland’s existing line of cell culture products including human melanoma cell lines, fetal bovine serum, lysates and collagens. We are honored that Cellaria chose Rockland to serve as their distribution partner."

On February 25, 2019 ArQule reported the publication of clinical pharmacodynamic, safety and efficacy data in patients with Proteus syndrome (Press release, ArQule, FEB 25, 2019, View Source [SID1234533719]). These data, together with data already presented at ASH (Free ASH Whitepaper)G last year, support miransertib’s further development as a potential first systemic treatment for patients suffering from overgrowth diseases, such as Proteus syndrome. The study, published in the American Journal of Human Genetics, and led by the National Institutes of Health (NIH), demonstrated good target engagement, tolerability and reductions in lesion size and pain, especially in children.

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Highlights from the study include:

Generally well-tolerated safety profile
Reductions in pAKT (activated AKT) in most patients
Reductions in Cerebriform Connective Tissue Nevus (CCTN) lesions in size (measured with standardized photography) but also in firmness, depth of sulci and discomfort (by patient report)
Reduction in pain intensity in all (3 of 3) children in the study

"These data are highly encouraging and support further investigation into the potential use of miransertib for this devastating condition," said Dr. Brian Schwartz, Chief Medical Officer at ArQule. "The reduction in CCTN lesions were particularly striking since these lesions are, in general, relentlessly progressive, and cause severe morbidity, ulcerations and intractable pain. We’d like to thank our academic collaborators and the patients and their families for their support and tremendous dedication to this cause."

The study is available online at: View Source

On February 25, 2019 Cellectis (Euronext Growth: ALCLS; Nasdaq: CLLS), a biopharmaceutical company focused on developing immunotherapies based on allogeneic gene edited CAR T-cells (UCART), reported the publication of a study in The Journal of Biological Chemistry, identifying Granulocyte Macrophage Colony Stimulating Factor (GMCSF) secreted by Chimeric Antigen Receptor (CAR) T-cells as a key factor promoting cytokine release syndrome (CRS) (Press release, Cellectis, FEB 25, 2019, View Source [SID1234533710]). The accelerated report leverages these findings to elaborate an innovative engineering strategy that paves the way for developing safer UCART products.

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Utilizing these results, Cellectis developed engineered GMCSF Knock-Out CAR T-cells through TALEN-mediated gene inactivation. The inactivation of GMCSF in CAR T-cells was found to prevent secretion of pro-inflammatory cytokines by monocytes, without compromising CAR T-cell anti-tumor activity.

"CAR T-cells have achieved high rates of complete remission in hematological malignancies, however, this ‘living drug’ can show life-threatening inflammatory side effects including CRS and neurotoxicity that need to be addressed," said Mohit Sachdeva, Ph.D., Innovation Project Leader at Cellectis. "Our engineering strategy circumvents such toxic side effects and propose safer, equally potent UCART-cells, to improve patients’ quality of life during treatment."

"Today, tocilizumab or glucocorticoid treatments are considered the standard of care for CRS management," added Julien Valton, Ph.D., Innovation Team Leader at Cellectis. "However, these treatments increase patient medication burden, add substantial costs and lengthen treatment time in intense care settings. To overcome these clinical challenges, we investigated the biogenesis of CRS and based on our findings, developed a CAR T-cell product candidate that could potentially prevent rather than treat CRS symptoms. We hope this approach can bypass CRS symptomatic treatments and improve the overall safety of CAR T-cell therapies for cancer patients."

Julien Valton, Ph.D., Innovation Team Leader, Cellular Engineering & Adoptive CAR T-Cell Immunotherapy

Dr. Julien Valton obtained his Ph.D. at the University Joseph Fourier in Grenoble, France, where he was trained as an enzymologist. He then joined the Yale School of Medicine to apply his knowledge to therapeutic research by investigating the mechanism of inhibition of receptor tyrosine kinases that are involved in the development of gastrointestinal cancer. In 2009, he moved a step further into the field of applied science by joining the Innovation Department of Cellectis, where he actively participated in using and improving TALEN gene editing technology for targeted gene therapy and genome engineering. He is now using TALEN along with protein engineering techniques to develop the next-generation CAR T-cells to treat different malignancies.

Mohit Sachdeva, Ph.D., Innovation Team Senior Scientist

Dr. Sachdeva is an experienced cancer biologist with expertise in immuno-oncology, having authored/co-authored approximately 20 manuscripts in peer-reviewed journals throughout his career. During his time at Cellectis, he has been studying pathways that could be exploited to engineer potent, yet safer, CAR T-cells using gene editing and targeted integration technologies. After receiving his Ph.D. at Southern Illinois University, he completed a successful post-doc at Duke University.

Granulocyte-macrophage colony-stimulating factor inactivation in CAR T-Cells prevents monocyte-dependent release of key cytokine release syndrome mediators

Mohit Sachdeva1*, Philippe Duchateau2, Stéphane Depil2, Laurent Poirot2 and Julien Valton1*

1Cellectis, Inc., 430 East 29th Street, New York, NY 10016, USA

2Cellectis, 8 rue de la Croix Jarry, 75013 Paris, France