On August 2, 2018 argenx (Euronext & Nasdaq: ARGX), a clinical-stage biotechnology company developing a deep pipeline of differentiated antibody-based therapies for the treatment of severe autoimmune diseases and cancer, reported its second quarter business update and half-year financial results for 2018 (Press release, argenx, AUG 2, 2018, View Source [SID1234528750]).

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These half-year results and this business update will be discussed during a conference call and webcast presentation today at 3 p.m. CEST/ 9 a.m. EDT. To participate in the conference call, please select your phone number below, and use the confirmation code 7669735. The webcast may be accessed on the homepage of the argenx website at www.argenx.com or by clicking here.

"We made significant progress recently in building a pipeline-in-a-product opportunity around our lead candidate efgartigimod (ARGX-113) as we study its potential to treat a range of severe autoimmune diseases, including validation of its mechanism of action across two indications based on the proof-of-concept data from the Phase 2 clinical trial in generalized myasthenia gravis (gMG) and the early evidence of disease control from the first cohort of patients in our Phase 2 pemphigus vulgaris (PV) clinical trial. These results strengthen our conviction that reducing pathogenic autoantibodies may offer an innovative approach to treating gMG and PV and could give rise to potential therapeutic benefits in other conditions that are similarly mediated. We look forward to a productive second half of 2018 around efgartigimod with topline data from the Phase 2 immune thrombocytopenia clinical trial expected before the end of the third quarter and the launch of a Phase 3 clinical trial in gMG before the end of the year," commented Tim Van Hauwermeiren, CEO of argenx.

"We are also advancing a deep pipeline of differentiated antibodies beyond efgartigimod. We continue to enroll the Phase 2 clinical trial of ARGX-110 in acute myeloid leukemia (AML) and expect to report full data from the Phase 1 dose-escalation clinical trial in December around the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting. We achieved key milestones in our collaborations with AbbVie and Leo Pharma this quarter and have continued to showcase our ability to grow our pipeline through our productive Innovative Access Program."

SECOND QUARTER 2018 AND RECENT BUSINESS HIGHLIGHTS

Efgartigimod Program

Full Phase 2 Myasthenia Gravis Data: Presented complete data from Phase 2 clinical trial of efgartigimod in gMG at the American Academy of Neurology (AAN) Annual Meeting.

Data showed clinical improvement of efgartigimod over placebo through entire 10-week duration of the trial.

Clinical benefit in the treatment group maximized as of one week after administration of last dose, achieving statistical significance over the placebo group on the Myasthenia Gravis Activity-of-Daily-Living (MG-ADL) score.

All patients in the treatment arm showed reduction of total IgG levels, and clinically meaningful disease improvement was found to correlate with a reduction in pathogenic IgG levels.

Efgartigimod was well-tolerated in all patients, with most adverse events (AEs) characterized as mild and deemed unrelated to the study drug. No serious or severe AEs were reported.

End-of-Phase 2 Meeting with FDA: Received feedback from the U.S. Food and Drug Administration (FDA) during the end-of-Phase 2 meeting on the framework of our Phase 3 program for efgartigimod in gMG.

Global Phase 3 clinical trial expected to evaluate the efficacy of a 10 mg/kg intravenous (IV) dose of efgartigimod in approximately 150 gMG patients over a 26-week period.

argenx expects to enroll in the trial both AChR autoantibody positive patients and AChR autoantibody negative patients whose disease is driven by MuSK and LRP4 autoantibodies, among others.

Patients in the Phase 3 clinical trial would be able to roll over into an open-label extension study for a period of one year.

Interim Data from First Cohort in Phase 2 PV Trial: Reported interim data from the first cohort of our Phase 2 proof-of-concept clinical trial of efgartigimod for the treatment of PV.

Rapid disease control observed in four of the six mild-to-moderate PV patients treated, and efgartigimod was well-tolerated in all treated PV patients.

Strong pharmacodynamic effect correlated with an improvement in Pemphigus Disease Area Index (PDAI) score, characterized by the start of healing of existing lesions and absence of formation of new lesions.

Independent Data Monitoring Committee recommended advancing to cohort 2 with an increased dosing frequency and dosing duration during the maintenance phase.

Phase 1 Data using Subcutaneous Formulation: Announced data from the Phase 1 study of the subcutaneous (SC) formulation of efgartigimod, demonstrating comparable characteristics to the IV formulation, including half-life, pharmacodynamics and tolerability.

Data showed that repeat exposure to SC efgartigimod can maintain IgG suppression at a steady state, with the possibility to dose up or down based on patient needs.

argenx intends to explore various dosing schedules with the SC formulation to best address patient needs, including an IV loading dose followed by SC maintenance as one possible schedule.

ARGX-110 Program

Ongoing Enrollment in Phase 2 Trial of ARGX-110 in AML: argenx expects to enroll an initial 21 patients in the ongoing Phase 2 part of the Phase 1/2 proof-of-concept trial of ARGX-110 in combination with standard of care azacytidine in newly diagnosed, elderly AML and high-risk myelodysplastic syndromes patients who are unfit for chemotherapy. The Company expects to use the selected ARGX-110 dose of 10 mg/kg as determined from the dose-escalation part of the trial.

Corporate Updates

Received second preclinical milestone payment under the development agreement with AbbVie for ARGX-115 targeting novel immune checkpoints in oncology.

Received third preclinical milestone payment from collaboration with LEO Pharma following approval of our clinical trial application (CTA) filing for ARGX-112 to treat inflammatory skin disorders.

Received a milestone payment from the strategic collaboration with Shire triggered by Shire exercising its exclusive option to in-license an antibody discovered and developed using the Company’s proprietary SIMPLE Antibody platform and Fc engineering technologies.

Appointed R. Keith Woods as Chief Operating Officer.

Selected for BEL 20 Index representing the 20 largest companies traded on Euronext Brussels, subject to meeting Euronext Index Family criteria and review.

UPCOMING MILESTONES

Advance efgartigimod into Phase 3 clinical development in gMG before the end of 2018.

Report topline data from the Phase 2 proof-of-concept trial for efgartigimod in immune thrombocytopenia (ITP) before the end of the third quarter of 2018 and present the full dataset at a workshop around the ASH (Free ASH Whitepaper) Annual Meeting.

Report full data from the Phase 2 trial of efgartigimod in PV in the first half of 2019.

Report full data of the dose-escalation phase of the AML Phase 1/2 clinical trial and the cutaneous T-cell lymphoma Phase 2 clinical trial of ARGX-110 around the ASH (Free ASH Whitepaper) Annual Meeting.

DETAILS OF THE FINANCIAL RESULTS

•Total operating income was €20.5 million for the six months ended June 30, 2018, compared to €23.9 million for the six months ended June 30, 2017. The decrease in operating income in 2018 was primarily due to a decrease of €4.5 million in revenue primarily from the completion of the preclinical activities under our ongoing collaboration with LEO Pharma. The decrease was offset by an increase in other operating income of €1.2 million, mainly driven by an increase in payroll tax rebates for employing certain research and development personnel.

•Research and development expenses were €34.4 million for the six months ended June 30, 2018, compared to €25.6 million for the six months ended June 30, 2017. The increase in research and development expenses in 2018 was principally due to (i) an increase of €4.4 million in share-based compensation expense linked to the grant of stock options to our research and development employees (including an increase of €1.3 million in social security costs on stock options granted to certain Belgian and non-Belgian resident employees), (ii) an increase of €4.0 million in costs related to the advancement of the clinical development and manufacturing activities of ARGX-113 and ARGX-110 and (iii) costs associated with a planned increase in research and development headcount.

• Selling, general and administrative expenses were €11.5 million for the six months ended June 30, 2018, compared to €5.0 million for the six months ended June 30, 2017. The increase of €6.5 million in selling, general and administrative expenses in 2018 is mainly explained by an increase of €6.1 million of personnel expenses resulting from (i) an increase of €4.9 million in share-based compensation expense linked to the grant of stock options to our selling, general and administrative employees (including an increase of €1.1 million in social security costs on stock options granted to certain Belgian and non-Belgian resident employees) and (ii) the recruitment of additional employees (notably in our US office) to further strengthen our selling, general and administrative activities.

• Financial income and exchange gains amounted to €5.3 million for the six months ended June 30, 2018 compared to financial income and exchange losses of €0.8 million for the six months ended June 30, 2017, which was primarily attributable to unrealized exchange rate gains on our cash, cash equivalents and current financial assets position in USD linked to the favorable fluctuation of the USD exchange rate in the six months ended June 30, 2018.

• The Group generated a loss for the period and total comprehensive loss of €20.1 million for the six months ended June 30, 2018, compared to a loss for the period and total comprehensive loss of €8.2 million for the six months ended June 30, 2017.

• As at June 30, 2018, the Group’s cash, cash equivalents and current financial assets amounted to €338.9 million, compared to €359.8 million as at December 31, 2017.

EXPECTED 2018 FINANCIAL CALENDAR:

October 25, 2018: Third quarter 2018 business update and financial results.

On August 2, 2018 AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) reported unaudited consolidated financial results for the quarter ended June 30, 2018 (Press release, AMAG Pharmaceuticals, AUG 2, 2018, View Source [SID1234528748]). The company announced the sale of Cord Blood Registry (CBR) in June 2018, which is currently expected to close in mid-August 2018. As a result of the pending sale, CBR is being classified as discontinued operations for accounting purposes and is presented separately on AMAG’s GAAP consolidated statements of operations and consolidated balance sheets for all periods presented. The company has revised its full year 2018 financial guidance to reflect continued strong performance of its pharmaceutical products and the impact of the pending sale of CBR.

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Total GAAP revenue from continuing operations (excluding CBR) increased in the second quarter of 2018 to $146.3 million, 12% higher than the same period last year. The year-over-year increase was driven by increased sales of Feraheme (ferumoxytol injection) and Makena (hydroxyprogesterone caproate injection), as well as the commercial launch of Intrarosa (prasterone) in the third quarter of 2017. The company reported operating income from continuing operations of $41.9 million in the second quarter of 2018, compared with operating income of $3.3 million in the same period last year. Non-GAAP adjusted EBITDA (excluding CBR) totaled $60.6 million in the second quarter of 2018, compared with $41.4 million in the second quarter of 2017.1

"We have had an extraordinary first half of 2018, with the achievement of a number of important regulatory milestones and strong commercial success across the portfolio," said Bill Heiden, AMAG’s president and chief executive officer. "In the second quarter, our commercial teams generated record setting sales performance for each of our products and these strong results, combined with confidence in our prospects for the second half of 2018, allow us to again raise both annual revenue and adjusted EBITDA guidance for our pharmaceutical business. The divestiture of CBR is another important step in our plan to align the company’s balance sheet with our strategic growth plan, which focuses on the development and commercialization of innovative pharmaceuticals."

Second Quarter 2018 and Recent Business Highlights:

Achieved record quarterly sales

Makena revenues exceeded $105 million in the quarter, reaching an all-time high market share of 51%

Feraheme sales grew 37% over the prior year, generating revenues of $37.7 million in the quarter

1 See summaries of GAAP to non-GAAP adjustments at the conclusion of this press release.

Grew Intrarosa ex-factory shipments by 40% over the first quarter of 2018 and generated $3.2 million of net revenue in the second quarter of 2018, which continued to be impacted by high gross to net adjustments

Announced sale of CBR for $530 million in cash, the net proceeds of which the company expects to use to pay off $475 million of its high yield debt

Received FDA acceptance of the company’s new drug application for bremelanotide, with a PDUFA date of March 23, 2019

Continued strong conversion of Makena intramuscular product to the subcutaneous (SC) auto-injector

Approximately 60% of new enrollments through the Makena Care Connection through the end of the second quarter were for the SC auto-injector

Authorized AMAG’s partner, Prasco, to launch an authorized generic of the Makena single- and multi-dose intramuscular formulations

Increased Intrarosa market share to 3.8%, with approximately 93,000 total prescriptions written by more than 9,100 healthcare providers since the July 2017 launch

CMS clarified its position on reimbursement, which now allows for reimbursement coverage for Intrarosa; AMAG has initiated discussions with payers for Medicare Part D coverage

Began the first phase of the unbranded and branded Intrarosa digital consumer campaigns

Continued the launch of Feraheme with the broad iron deficiency anemia label, which is already capturing additional market share
–
Achieved market share of 16.3% for the second quarter of 2018, compared with 11.2% for the first quarter of 2018

Ended the quarter with more than $410 million2 of cash and investments, an increase of more than $40 million from the first quarter of 2018

Second Quarter Ended June 30, 2018 (unaudited)
Financial Results from Continuing Operations (GAAP Basis)
As a result of the pending sale of CBR, which is expected to close in mid-August, AMAG’s CBR business has been excluded from its continuing operations for all periods presented and is shown separately as discontinued operations.

Total revenues from continuing operations for the second quarter of 2018 increased 12% to $146.3 million, compared with $130.4 million in the second quarter of 2017. Sales of Feraheme and MuGard increased 37% to $37.8 million in the second quarter of 2018, compared with $27.7 million in the second quarter of 2017.

Net product sales of Makena increased 2% to $105.2 million in the second quarter of 2018, compared with $102.7 million in the same period last year. Intrarosa, which was commercially launched in July 2017, contributed $3.2 million in net sales during the second quarter of 2018.

Costs and expenses from continuing operations, including cost of product sales, totaled $104.4 million in the second quarter of 2018, compared with $127.1 million for the same period in 2017. Included in selling, general and administrative (SG&A) expenses was an expense reversal of $49.8 million, which was recorded to remove the Makena contingent consideration liability because the company no longer believes that it is probable that the sales milestone will be achieved. Excluding this accounting adjustment, total costs and expenses from continuing operations increased by $27.1 million to $154.2 million. Cost of product sales increased by $44.7 million, of which $36.4 million was an increase in amortization expense primarily related to the Makena intramuscular intangible asset. Research and development costs decreased by $18.6 million during the period. Acquired IPR&D expense in 2017 consisted of $5.8 million in connection with consideration paid under the company’s agreement with Endoceutics for the rights to Intrarosa.

2 Includes $60 million of cash and investments held in a CBR account, which is currently recorded as an asset held for sale. These cash and investments will be returned to AMAG upon closing of the transaction.

Operating income from continuing operations in the second quarter of 2018 was $41.9 million, compared with of $3.3 million for the same period last year. The company reported a net loss from continuing operations of $25.8 million, or $0.75 loss per basic and diluted share, for the second quarter of 2018, compared with a net loss of $14.3 million, or $0.41 loss per basic and diluted share, for the same period in 2017. The primary driver of the second quarter 2018 net loss from continuing operations was the $52 million expense incurred to increase the company’s valuation allowance on its deferred tax assets.

Financial Results from Continuing Operations (Non-GAAP Basis)1
Total costs and expenses from continuing operations on a non-GAAP basis totaled $85.7 million in the second quarter of 2018, compared with $89.0 million in the second quarter of 2017. This decrease was primarily due to lower research and development costs in 2018, partially offset by higher cost of product sales and higher SG&A expenses related to investments to support the launches of the broad Feraheme label, Makena SC auto-injector and Intrarosa.

Non-GAAP adjusted EBITDA (excluding CBR) for the second quarter of 2018 was $60.6 million, compared with $41.4 million in the second quarter of 2017.

Net Income from Discontinued Operations
As a result of the pending sale, CBR is being classified as discontinued operations for accounting purposes. Net income from discontinued operations in the second quarter of 2018 was $5.7 million compared with $0.2 million for the same period in 2017.

Balance Sheet Highlights
As of June 30, 2018, the company’s cash and investments totaled $410 million2 and total debt (principal amount outstanding) was $816.4 million.

"Continued execution across the business gives us confidence to increase our financial guidance for 2018," said Ted Myles, AMAG’s chief financial officer. "The sale of CBR will allow us to eliminate the senior notes from our capital structure and strengthen our balance sheet as we continue to generate adjusted EBITDA. Our long-term strategy focuses on continuing to grow and further diversify our pharmaceutical portfolio. Our liquidity profile gives us considerable flexibility to invest in and grow our current products and to pursue new business development opportunities."

Conference Call and Webcast Access
AMAG Pharmaceuticals, Inc. will host a conference call and webcast today at 8:00 a.m. ET to discuss the company’s second quarter 2018 financial results, recent business highlights and 2018 outlook.

Dial-in Number
U.S./Canada dial-in number: (877) 412-6083

International dial-in number: (702) 495-1202
Conference ID: 2757556

Replay dial-in number: (855) 859-2056
Replay International dial-in number: (404) 537-3406
Conference ID: 2757556

A telephone replay will be available from approximately 11:00 a.m. ET on August 2, 2018 through midnight on August 9, 2018.

The webcast with slides will be accessible through the Investors section of AMAG’s website at www.amagpharma.com. A replay of the webcast will be archived on the website for 30 days.

Use of Non-GAAP Financial Measures
AMAG has presented certain non-GAAP financial measures, including non-GAAP costs and expenses and non-GAAP adjusted EBITDA (earnings before income taxes, depreciation and amortization). These non-GAAP financial measures exclude certain amounts, expenses or income, from the corresponding financial measures determined in accordance with accounting principles generally accepted in the U.S. (GAAP). Management believes this non-GAAP information is useful for investors, taken in conjunction with AMAG’s GAAP financial statements, because it provides greater transparency regarding AMAG’s operating performance. Management uses these measures, among other factors, to assess and analyze operational results and trends and to make financial and operational decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of AMAG’s operating results as reported under GAAP, not as a substitute for GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. Reconciliations between these non-GAAP financial measures and the most comparable GAAP financial measures are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.

On August 2, 2018, the Company entered into a Third Amendment to Lease Agreement (the "Amendment") with ARE-SD Region No. 20 (the "Landlord") to amend the Lease Agreement, dated June 24, 2014, the First Amendment to Lease dated March 23, 2017, and the Second Amendment to Lease dated April 5, 2018 (the "Amended Lease") between the Company and Landlord (Filing, 8-K, Mirati, AUG 2, 2018, View Source [SID1234528662]). The Amendment expands the size of the existing premises by adding approximately 6,100 square feet of space for an additional base rent of $4,000 per month through January 31, 2020. In addition, our share of operating expenses of the building in which the premises are located, has increased from approximately 43% to 58%. All other material terms and covenants from the Amended Lease remain unchanged.

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On August 2, 2018 ENTEROME SA, a clinical-stage biotechnology company pioneering innovative therapies to treat microbiome-associated diseases with a focus on inflammatory bowel diseases (IBD) and immuno-oncology (IO) indications, reported that CEO Pierre Belichard will be presenting at two upcoming investor conferences in the United States (Press release, Enterome, AUG 2, 2018, View Source [SID1234528653]):

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August 12-13 – Oppenheimer & Co. Newport Summit for Revolutionary Biotechnology (Newport, RI)
August 14-15 – Wedbush PacGrow Healthcare Conference (New York, NY)
Mr Belichard will provide an overview of the company´s approach and strategy as well as an update on its development programs, including progress on its two lead investigational drug candidates:

EB8018, an orally administered small molecule FimH-blocker designed to selectively disarm virulent bacteria in the gut that cause inflammation without disrupting the gut microbiome, which is currently evaluated in a Phase Ib clinical proof of concept trial in patients with Crohn’s disease; and
EO2401, a novel microbiome-derived therapeutic cancer vaccine comprising immunogenic peptide/epitope mimics ("onco-mimics") of glioblastoma tumour-associated antigens, which is being prepared to enter a Phase Ib study in glioblastoma patients in 2018.

On August 2, 2018 Corvus Pharmaceuticals, Inc. (NASDAQ: CRVS), a clinical-stage biopharmaceutical company focused on the development and commercialization of precisely targeted oncology therapies, reported financial results for the second quarter ended June 30, 2018, and provided a business update (Press release, Corvus Pharmaceuticals, AUG 2, 2018, View Source;p=RssLanding&cat=news&id=2361869 [SID1234528637]).

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"We continue to be a leader in programs addressing the adenosine pathway, with three clinical trials currently enrolling and more than 235 patients treated to-date with our lead product candidate, an A2A receptor antagonist, CPI-444," said Richard A. Miller, M.D., co-founder, president and chief executive officer of Corvus. "We are enrolling up to 50 patients in a Phase 1/1b study of CPI-444 in combination therapy under an amended protocol focused on patients with earlier stage renal cell cancer. CPI-444 is also being studied in patients with lung cancer. We are also enrolling patients in a Phase 1/1b study of CPI-006, an anti-CD73 antibody, to treat advanced cancers, both as a monotherapy and in combination with CPI-444 and an anti-PD-1 therapy. In the fourth quarter, we expect to report updated data from several of our programs at medical meetings, which will be another important milestone in our development plans."

RECENT ACHIEVEMENTS
CPI-444: A2A Receptor Antagonist of Adenosine

Enrolling patients in a Phase 1/1b clinical trial evaluating CPI-444, the Company’s lead product candidate, administered alone and in combination with Genentech’s Tecentriq (atezolizumab), an anti-PD-L1 antibody, under an amended protocol to enroll up to 50 patients with renal cell cancer (RCC) who have failed no more than two prior treatment regimens, which must have included an anti-PD-(L)1 and a tyrosine kinase inhibitor.
○ Biomarker studies conducted by the company have shown that prior therapy with anti-PD-(L)1 may increase expression of the adenosine pathway.
○ Previous studies evaluated patients who have failed up to five (median three) prior treatment regimens.
Continued enrolling patients in the Phase 1b/2 trial, being conducted by Genentech as part of their MORPHEUS platform, which is evaluating CPI-444 and Tecentriq in up to 60 patients with non-small cell lung cancer (NSCLC) who have failed no more than two prior regimens.
CPI-006: Anti-CD73 Antibody

Began enrolling patients with advanced cancer in a Phase 1/1b clinical trial evaluating CPI-006, the Company’s anti-CD73 antibody, as a single agent and in combination with CPI-444, and in combination with an anti-PD-1. The trial is anticipated to enroll up to 350 patients and is designed to select the dose and evaluate the safety, pharmacokinetics, immune biomarkers and efficacy in patients with NSCLC, RCC, and other cancers who have failed standard therapies.
CPI-818: A small molecule ITK inhibitor

Continued pre-clinical development of the Company’s interleukin-2-inducible kinase (ITK) inhibitor and plan to submit an Investigational New Drug (IND) filing in early 2019. Tumor responses have been observed in a preclinical study in spontaneous canine T-cell lymphoma conducted at Colorado State University, College of Veterinary Medicine Flint Animal Cancer Center.
FINANCIAL RESULTS
At June 30, 2018, Corvus had cash, cash equivalents and marketable securities totaling $133.2 million. This compared to cash, cash equivalents and marketable securities of $90.1 million at December 31, 2017.

Research and development expenses for the three months ended June 30, 2018 totaled $9.7 million compared to $12.4 million for the same period in 2017. The decrease of $2.7 million was primarily due to a $2.2 million decrease in CPI-444 and CPI-006 drug manufacturing costs, a decrease of $2.2 million in CPI-444 clinical trial expense, and a decrease of $0.4 million in contracted research costs. These decreases were partially offset by an increase of $0.9 million in CPI-818 drug manufacturing costs, and increase of $0.6 million in CPI-006 clinical trial expense, and an increase of $0.6 million in personnel related costs.

General and administrative expenses for the three months ended June 30, 2018 totaled $2.5 million compared to $2.8 million for the same period in 2017. The decrease of $0.3 million was primarily due to a decrease of $0.4 million in patent and public company expenses, offset by an increase of $0.1 million in personnel costs.

The net loss for the three months ended June 30, 2018 was $11.6 million compared to $15.0 million for the same period in 2017. Total stock compensation expense for the three months ended June 30, 2018 was $1.7 million compared to $1.5 million for the same period in 2017.