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Johnson & Johnson Reports 2018 Second-Quarter Results

On July 17, 2018 Johnson & Johnson (NYSE: JNJ) reported sales of $20.8 billion for the second quarter of 2018, an increase of 10.6% as compared to the second quarter of 2017 (Press release, Johnson & Johnson, JUL 17, 2018, View Source [SID1234527728]).

Operational sales results increased 8.7% and the positive impact of currency was 1.9%. Domestic sales increased 9.4%. International sales increased 11.8%, reflecting operational growth of 7.9% and a positive currency impact of 3.9%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 6.3%, domestic sales increased 5.7% and international sales increased 6.8%.*

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Net earnings and diluted earnings per share for the second quarter of 2018 were $4.0 billion and $1.45, respectively. Second-quarter 2018 net earnings included after-tax intangible amortization expense of approximately $1.0 billion and a charge for after-tax special items of approximately $0.8 billion. Second-quarter 2017 net earnings included after-tax intangible amortization expense of approximately $0.4 billion and a charge for after-tax special items of approximately $0.8 billion. Excluding after-tax intangible amortization expense and special items, adjusted net earnings for the current quarter were $5.7 billion and adjusted diluted earnings per share were $2.10, representing increases of 14.0% and 14.8%, respectively, as compared to the same period in 2017.* On an operational basis, adjusted diluted earnings per share also increased 11.5%.* A reconciliation of non-GAAP financial measures is included as an accompanying schedule.

"Our strong second-quarter results reflect double-digit growth in our Pharmaceutical business and the accelerating sales momentum in our Medical Devices business, driven by the continued growth of our market leading products and strategic new launches. We remain focused on investing in innovation and meeting the needs of our customers by delivering innovative products and solutions that position the company to deliver long-term, sustainable growth," said Alex Gorsky, Chairman and Chief Executive Officer. "Our talented J&J colleagues are united in our efforts to address some of the most critical health and consumer needs of people around the world.
The Company updated its sales guidance for the full-year 2018 to a range of $80.5 to $81.3 billion. This reflects an increase in expected operational growth to a range of 4.5% to 5.5%, partially offset by the estimated lower favorable impact of currency. Additionally, the Company updated its adjusted earnings guidance for full-year 2018 to a range of $8.07 to $8.17 per share. This reflects an increase in expected operational growth to a range of 8.5% to 9.9%, partially offset by the estimated lower favorable impact of currency.

Segment Sales Performance
Worldwide Consumer sales of $3.5 billion for the second quarter 2018 represented an increase of 0.7% versus the prior year, consisting of an operational decrease of 0.4% and a positive impact from currency of 1.1%. Domestic sales decreased 0.7%, international sales increased 1.9%, which reflected no change in operational sales and a positive currency impact of 1.9%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 0.9%, domestic sales decreased 0.7% and international sales increased 2.1%*.
Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by over-the-counter products including TYLENOL analgesics and digestive health products, international beauty products primarily NEUTROGENA, OGX and Dr. Ci Labo, partially offset by lower sales of baby care products. During the quarter, the divestiture of the anti‐dandruff shampoo brand NIZORAL and certain other ketoconazole‐based shampoo brands was completed.

Worldwide Pharmaceutical sales of $10.4 billion for the second quarter 2018 represented an increase of 19.9% versus the prior year with an operational increase of 17.6% and a positive impact from currency of 2.3%. Domestic sales increased 17.7%; international sales increased 22.9%, which reflected an operational increase of 17.5% and a positive currency impact of 5.4%. Sales included the impact of Actelion Ltd which contributed 6.6%, to worldwide operational sales growth. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 11.0%, domestic sales increased 10.2% and international sales increased 11.9%.*
Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by STELARA (ustekinumab), a biologic for the treatment of a number of immune-mediated inflammatory diseases, ZYTIGA (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration-resistant prostate cancer, DARZALEX (daratumumab), for the treatment of patients with multiple myeloma, IMBRUVICA (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, a type of blood or lymph node cancer, TREMFYA (guselkumab), for the treatment of adults living with moderate to severe plaque psoriasis. SIMPONI/SIMPONI ARIA (golimumab), a biologic for the treatment of a number of immune-mediated inflammatory diseases, INVEGA SUSTENNA/XEPLION/TRINZA/TREVICTA (paliperidone palmitate), long-acting, injectable atypical antipsychotics for the treatment of schizophrenia in adults, and XARELTO (rivaroxaban), an oral anticoagulant.

During the quarter, the U.S. Food and Drug Administration (FDA) approved an additional indication for DARZALEX (daratumumab) in combination with VELCADE (bortezomib), a proteasome inhibitor; melphalan, an alkylating agent; and prednisone for the treatment of patients with newly diagnosed multiple myeloma who are ineligible for autologous stem cell transplant. The European Commission granted marketing authorization for JULUCA (dolutegravir/rilpivirine), a two-drug regimen, once-daily, single-pill for the treatment of HIV-1. A supplemental New Drug Application was submitted to the FDA seeking to expand the indication of OPSUMIT (macitentan) to include the treatment of adults with inoperable chronic thromboembolic pulmonary hypertension (CTEPH, WHO Group 4) to improve exercise capacity and pulmonary vascular resistance.
Also in the quarter, the acquisition of BeneVir Biopharm, Inc., a privately-held, biopharmaceutical company specializing in the development of oncolytic immunotherapies, was completed. In addition, a worldwide collaboration

was entered into with Bristol-Myers Squibb Company to develop and commercialize Factor XIa inhibitors, including BMS-986177, for the prevention and treatment of major thrombotic conditions.
Worldwide Medical Devices sales of $7.0 billion for the second quarter 2018 represented an increase of 3.7% versus the prior year consisting of an operational increase of 1.9% and a positive currency impact of 1.8%. Domestic sales increased 1.1%; international sales increased 6.0%, which reflected an operational increase of 2.5% and a positive currency impact of 3.5%. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 2.9%, domestic sales increased 1.7% and international sales increased 4.1%.*
Worldwide operational results, excluding the net impact of acquisitions and divestitures, were driven by ACUVUE contact lenses and surgical products in the Vision business; electrophysiology products in the Interventional Solutions business; biosurgicals and international endocutters in the Advanced Surgery business; wound closure products in the General Surgery business and trauma products in the Orthopaedics business, partially offset by declines in the Diabetes Care business and spine products in the Orthopaedics business.
During the quarter, the Company announced acceptance of the binding offer from Platinum Equity to acquire its LifeScan business for approximately $2.1 billion, subject to customary adjustments. The Company also announced receipt of a binding offer from Fortive Corporation to acquire its Advanced Sterilization Products business for an aggregate value of approximately $2.8 billion, subject to customary adjustments. In addition, the FDA approved iDESIGN Refractive Studio, part of a next generation LASIK platform that measures the eye inside and out to enable highly precise personalized vision correction.
In July, the acquisition of assets from Medical Enterprises Distribution, LLC, a privately held developer of surgical impactor technology, including the automated ME1000 Surgical Impactor for use in hip replacement, was completed.

MaxCyte Receives US FDA Investigational New Drug Clearance for First Clinical Program

On July 16, 2019 MaxCyte reported that it has received Investigational New Drug (IND) clearance from the US Food and Drug Administration (FDA) to begin a clinical study in the United States with its first wholly-owned chimeric antigen receptor (CAR) therapeutic candidate, MCY-M11 (Press release, MaxCyte, JUL 16, 2018, View Source [SID1234537625]).

"The IND clearance marks an important milestone for MaxCyte. We are excited to advance MCY-M11, our first therapeutic candidate in solid tumors into the clinic and we hope that the upcoming study will serve as validation of our proprietary CARMA (CAR therapeutic) drug platform as a whole," said MaxCyte CEO Doug Doerfler. "This initial study will help determine the safety and potential effectiveness of the CARMA platform, and if successful, will mark its place as a new autologous cell-therapy platform for developing improved targeted cell-based immune therapies."

The IND allows for a Phase I clinical study to evaluate the safety of MCY-M11 in individuals with relapsed/refractory ovarian cancer and peritoneal mesothelioma. The clearance is for the Company’s first clinical study with MCY-M11, which is a drug candidate for next-generation CAR-engineered cell therapy. MCY-M11 is differentiated from traditional CAR therapies by its use of messenger RNA (mRNA) to engineer fresh peripheral blood mononuclear cells, allowing rapid manufacture and delivery back to the patient, without the need for a viral component or cell expansion. This cell therapy provides for transient expression, engineered with the potential to minimize the adverse side-effects seen in viral-based CAR therapies. MaxCyte anticipates commencing dosing of patients in H2 2018.

About the CARMA (CAR Therapy) Platform
CARMA is MaxCyte’s unique and proprietary CAR therapy platform in immuno-oncology. The platform is used to develop CAR therapies for a broad range of cancer indications. It offers the potential to deliver autologous cell therapies across a wide range of targets with a much quicker turnaround to the patient than traditional autologous cell therapies. More information on MaxCyte’s CARMA program is available at www.maxcyte.com/car/.

Entry Into a Material Definitive Agreement

On July 16, 2018 Forty Seven, Inc. reported that it entered into a settlement and license agreement with Synthon Biopharmaceuticals B.V., or Synthon (Filing, 8-K, Synthon, 16 16, 2018, View Source [SID1234528326]). Under the agreement, we agreed to discontinue our ongoing oppositions and challenges at the European Patent Office, or EPO, and the U.S. Patent and Trademark Office, or USPTO, directed towards certain patents licensed by Synthon from Stichting Sanquin Bloedvoorziening, or SSB, that relate to the use of anti-CD47 products in combination with other antibodies to treat cancer. We also agreed to request the withdrawal of such proceedings with the USPTO and EPO. In return Synthon agreed to grant us a non-exclusive, worldwide sublicense to certain patents they have licensed from SSB, including the SSB patents we are opposing at the USPTO and EPO to commercialize a single anti-CD47 product(such as 5F9 or an alternate anti-CD47 product) to treat cancer in combination with other antibodies.

In December 2016 and April 2017, we filed third party observations in an opposition proceeding in the EPO with respect to European Patent No. EP 2 282 772 and in January 2018, petitioned for inter partes review of U.S. Patent No. 9,352,037 in the USPTO, each of which is related to the treatment of cancer with an anti-CD47 antibody or an anti-SIRPα antibody in combination with certain other antibodies. The opposition proceeding was rejected by the EPO and the original opponent appealed the decision. On June 4, 2018, we acquired the opposition against this European patent from the original opponent. Pursuant to the agreement, we and Synthon have each agreed to release the other party (and we have agreed to release SSB) from all claims and liabilities relating to the USPTO and EPO proceedings.

The sublicense grant is subject to the satisfaction of specified conditions, including our withdrawal of the proceedings opposing the above-mentioned SSB U. S. and European patents and the termination of these proceedings by the USPTO and the EPO. Our obligation to withdraw such proceedings and the effectiveness of the release of claims by Synthon and us are subject to (i) SSB agreeing to release us from all claims and liabilities under the USPTO and EPO proceedings and (ii) SSB agreeing to grant us a direct license to the sublicensed patents in the event the license between SSB and Synthon is terminated.

Our sublicense will include the right to further sublicense the applicable patent rights to our collaborators, corporate partners and service providers and will cover one named product, which will be 5F9. We will have the right to replace 5F9 with a different anti-CD47 product in the event of a development failure of 5F9. We will also have an option to expand our rights to cover a follow-on anti-CD47 product in exchange for a specified option exercise fee. Synthon will retain the right to use the licensed patents and to grant other third parties the right to do so.

In exchange for these sublicenses and option rights, we agreed to pay Synthon an aggregate of up to approximately $47 million comprising an upfront payment upon grant of the sublicense and the achievement of future regulatory and commercial milestones which comprise the significant majority of the aggregate payments. If we exercise our option right, we will pay Synthon additional amounts upon the achievement of certain regulatory and commercial milestones related to such follow-on anti-CD47 product. In addition, we will be required to pay Synthon an annual license fee and a royalty of a tiered, low single digit percentage on net sales of any approved licensed products. We have the right to buy out our royalty obligations for each licensed product in full by paying Synthon specified lump sum amounts prior to the occurrence of certain defined events. All payments under the settlement and license agreement are specified in Euros and have been converted into U.S. Dollars based on the exchange rate as of July 16, 2018.

This summary is qualified in its entirety by reference to the text of the settlement and license agreement, which we intend to file as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, and is incorporated herein by reference. We also intend to seek appropriate confidential treatment of certain terms and provisions of the settlement and license agreement in connection with the filing of this agreement, in accordance with the procedures of the Securities and Exchange Commission.

Idera Pharmaceuticals Provides Update on Corporate Strategy and Outlook

On July 16, 2018 Idera Pharmaceuticals, Inc. (NASDAQ:IDRA), a pharmaceutical company focused on the development and commercialization of its proprietary immune modulator, tilsotolimod, for the treatment of cancer, is reported the company’s corporate strategy and outlook following the recent termination of its proposed merger with BioCryst Pharmaceuticals (Press release, Idera Pharmaceuticals, JUL 16, 2018, View Source [SID1234527721]).

Vincent Milano, Idera’s Chief Executive Officer stated, "Today, we advance the next chapter of our company’s future with a clear picture of our mission, which is to ultimately deliver tilsotolimod to as many patients suffering from cancer as we possibly can. We have generated a significant body of evidence for tilsotolimod, including pre-clinical studies, translational research and meaningful clinical data in our ongoing ILLUMINATE-204 trial in anti-PD-1 refractory melanoma, as well as Fast Track Designation from the Food and Drug Administration. This gives us a great deal of confidence in tilsotolimod’s ability to prime the immune system to play a more powerful role in the fight against cancer, representing an exciting value proposition for both shareholders and patients."

Milano continued, "We are executing on the pivotal Phase 3 trial, ILLUMINATE-301, in anti-PD-1 refractory melanoma and are partnering with three separate planned investigators/institutions in support of their respective investigator sponsored trials (ISTs), each of which is exploring tilsotolimod in different patient populations. Through the body of data we’ve generated to date, as well as from our discussions with our key opinion leader advisors, it has become abundantly clear to us that tilsotolimod has the opportunity to play a more expanded role in the immuno-oncology landscape, particularly in tumor types with limited immunogenicity that have not previously responded well to check-point inhibition approaches."

Financial Outlook and Other Corporate Updates

Idera ended the 1st Quarter of 2018, with cash and cash equivalents totaling $107.5 million, which as of the reporting of the first quarter of 2018 is anticipated to fund current operations into the third quarter of 2019. Subsequently, Idera announced an agreement with Bristol-Myers Squibb related to the funding of ipilimumab for the ILLUMINATE-301 trial, the cost of which we had previously budgeted for in our cash forecast, and as a result of the terminated merger with BioCryst Pharmaceuticals we also received $6 million in related fees. These two items have not yet been reflected in the Company’s financial runway and will be updated as the results of the 2nd quarter of 2018 are reported.

In addition, as previously disclosed on June 20, 2018, shareholders voted to approve giving the Board of Directors discretion to implement a reverse stock split of not less than 1-for-4 and not more than 1-for-8.

Idera has Significant Near-term Milestones Representing Substantial Value Creation Opportunities:

• Continued updates on ILLUMINATE-204 Phase 2 trial of tilsotolimod in combination with ipilimumab in patients with PD-1 refractory melanoma at upcoming medical conferences;

Recently increased trial sites open to enrollment to 7, (3 additional planned);
Expected completion of enrollment (N=60 patients) by year end 2018;
• Data update following completion of ILLUMINATE-204 Pembrolizumab combination Phase 1 component of the trial;

• Data from ILLUMINATE-101 tilsotolimod monotherapy trial;

• Complete enrollment in ILLUMINATE-204 with topline data in mid-2019;

• Initiation of Investigator Sponsored Trials (IST):

A Phase 1/2 open label study of intratumoral tilsotolimod in combination with intratumoral ipilimumab and IV nivolumab in a protocol open to multiple tumor types including non-small cell lung cancer (NSCLC), melanoma, squamous cell carcinoma of the head and neck and urothelial carcinoma. The principal investigator initiating this trial is Aurélien Marabelle, MD, PhD, Clinical Director of the Cancer Immunotherapy Program at Institut Gustave Roussy, Villejuif, France.
A Phase 2 study of intratumoral tilsotolimod in combination with IV pembrolizumab in patients with NSCLC. The principal investigator initiating this trial is Arafat Tfayli, MD, Professor of Clinical Medicine, Director of Hematology/Oncology Fellowship Program at the American University of Beirut Medical Center (AUBMC), Lebanon.
A Phase 2 placebo controlled study of intradermal administration of tilsotolimod in patients with T3/T4 primary melanoma scheduled to undergo a combined re-excision and sentinel node biopsy (SNB) procedure. The principal investigators initiating this are Bas Koster, MD and Tanja de Gruijl, PhD at The VU University Medical Center, Amsterdam, the Netherlands, and
• Potential collaborations and or partnerships with immuno-oncology companies to further demonstrate the utility of tilsotolimod in treating solid tumors.

About Tilsotolimod (IMO-2125)
Tilsotolimod is a TLR 9 agonist that received Fast Track Designation from the US Food and Drug Administration (FDA) in 2017 for the treatment of anti-PD-1 refractory melanoma, in combination with ipilimumab as well as orphan drug designation from the FDA for the treatment of melanoma Stages IIb to IV. It signals the immune system to create and activate cancer-fighting cells (T-cells) to target solid tumors. Currently approved immuno-oncology treatments, specifically check-point inhibitors, work for some but not all, as many patients’ immune response is missing or weak and thus they do not benefit from the checkpoint therapy. Intratumoral injections with tilsotolimod are designed to selectively enable the T-cells to recognize and attack cancers that remained elusive and unrecognized by the immune system exposed to checkpoint inhibitors alone, while limiting toxicity or impact on healthy cells in the body.

Out of the 30 patients treated and evaluated across all four dosing cohorts from the beginning of the Phase 1 portion of the study through our presentation at ASCO (Free ASCO Whitepaper) 2018, in the ILLUMINATE-204 Phase 1/2 Ipilimumab combination arm, 9 patients have RECIST v1.1 responses (PR or CR) representing a 30% Overall Response Rate (ORR). Based on the combination of clinical responses and supportive translational evidence, the 8mg dose of tilsotolimod was selected for clinical development advancement in the anti-PD-1 refractory melanoma indication.

Key findings from the most recent data presented at ASCO (Free ASCO Whitepaper) in June 2018 related to the ILLUMINATE-204 Phase 2 trial assessing the combination of the 8mg dose of tilsotolimod in combination with ipilimumab in anti-PD-1 refractory metastatic melanoma included:

21 patients treated with the 8mg dose of tilsotolimod in combination with ipilimumab have had disease evaluations (as of May 9, 2018 data cut);
RECIST v1.1 responses (including 2 Complete Response [CR]) were observed in 8 of these 21 patients (38.1%);
Six of 8 responses are ongoing (1 CR ongoing for nearly 2 years); median duration of response has not yet been reached;
Overall 15 out of these 21 patients (71.4%) experienced disease control (CR, PR, or SD);
The combination regimen is generally well tolerated. 6 of 26 patients (23%) had immune-related toxicities indicating that tilsotolimod + ipilimumab does not appear to add toxicity versus treatment with ipilimumab alone.
Injection-related toxicities were grade 1-2 transient fever and flu-like symptoms lasting <48 hours; and,
15 of 26 patients (57.7%) with lesions accessible only by image-guided injection (5 deep visceral lesions and 10 lymph nodes) were included.

Avid Bioservices Reports Financial Results for Quarter and Fiscal Year Ended April 30, 2018 and Recent Developments

On July 16, 2018 Avid Bioservices, Inc. (NASDAQ:CDMO) (NASDAQ:CDMOP), a dedicated biologics contract development and manufacturing organization (CDMO) working to improve patient lives by providing high quality development and manufacturing services to biotechnology and pharmaceutical companies, reported financial results for the fourth quarter and fiscal year (FY) 2018 ended April 30, 2018, and provided an update on its contract manufacturing operations, and other corporate highlights (Press release, Avid Bioservices, JUL 16, 2018, View Source [SID1234527719]).

Highlights Since January 31, 2018

"During fiscal 2018, Avid Bioservices initiated a transition to a pure play biologics contract development and manufacturing organization. Today, Avid is a recognized, established and well-respected service provider to the biotechnology and pharmaceutical industry," said Roger Lias, Ph.D., president and chief executive officer of Avid Bioservices. "In recent months we have significantly diversified and expanded our portfolio of customers. This effort has also fostered a steady increase in our backlog, which creates a strong foundation as we diligently pursue our goal to achieve breakeven and positive EBITDA. We have brought in an impressive new board and established a cohesive new leadership team with expertise spanning every vital facet of our business from business development to process development and finance. We are responding to, and winning, more requests for proposal than at any time in Avid’s history and we are filling our available capacity with a product mix consisting of both earlier phase process development and clinical programs, as well as late phase clinical and commercial programs. While fiscal 2018 was an impressive turnaround year for Avid, fiscal 2019 will be our first full year as a focused CDMO business and we are excited about the market opportunity and the very significant prospects for growth and market leadership that lie ahead.

"I would like to recognize the tremendous efforts of the staff at Avid Bioservices. The type of transition that we have effected is not easy and I remain incredibly impressed by the dedication and talent of the Avid team and their commitment to exemplary customer service and continued industry leading compliance. I would like to very specifically thank them for their continued support. Our people remain the backbone of our service offering and our business."

Recent CDMO Developments

Appointed multiple experienced executives to strengthen the leadership team including:

oMagnus Schroeder, Ph.D., vice president of process sciences. Dr. Schroeder is an accomplished scientist with more than 16 years of experience spanning bioprocess development, cGMP manufacturing, CMC strategy and global project leadership. Dr. Schroeder most recently served as a director at AGC Biologics, formerly CMC Biologics, where he participated in the successful commercial launch of multiple products.

oSandra Carbonneau, director, business development, (eastern region

Ms. Carbonneau brings to Avid more than 26 years of relevant industry experience. Previously with Lonza Biologics, Ms. Carbonneau oversaw the global mammalian commercial development business unit, including manufacturing, quality assurance, compliance and contract management.

Michael Faughnan, senior director, business development (western region)
Mr. Faughnan joins Avid with more than 20 years of customer focused sales and management experience. In particular, Mr. Faughnan has 18 years of successful biotech and CDMO sales experience with industry leading companies including Lonza and WuXi Biologics, where he contributed to significant growth.

Initiated expansion and optimization of the company’s process development capabilities and laboratory space, including:

Expanding the total available process development laboratory space to more than 6,000 square feet;
Upgrading the infrastructure and equipment within the existing process development laboratories;
Implementing new state-of-the-art technologies and equipment designed to facilitate efficient, high-throughput development of upstream and downstream manufacturing processes.
The first new laboratories are expected to be operational during the third quarter of calendar 2018.
Signed five new master service agreements (MSAs) in the first six months of calendar 2018. This is more than Avid signed during all of calendar 2017. New projects under the MSAs range from process development to clinical stage biomanufacturing. All projects will contribute to revenue during fiscal 2019.

Recent Corporate Developments

Entered into an Asset Assignment and Purchase Agreement with Oncologie, Inc. in February 2018 for Avid’s phosphatidylserine (PS)-targeting program including bavituximab

Avid is entitled to receive an aggregate of $8.0 million in upfront payments over a period of six months, of which $6.0 million has been received according to the contractually agreed schedule. Avid will also be eligible to receive up to $95.0 million with Oncologie, Inc.’s successful achievement of development, regulatory and commercialization milestones.

Oncologie, Inc. is responsible for all future research, development and commercialization of bavituximab, and related intellectual property costs.

Avid is eligible to receive royalties on net sales that are upward tiering into the mid-teens.

Oncologie has entered into an agreement with Avid for future contract development and manufacturing activities in support of bavituximab and other potential products.

Completed a public offering of 10,294,445 shares of common stock in February 2018 raising gross proceeds of approximately $23.2 million.

Avid intends to use the net proceeds from the offering to support the growth of its contract manufacturing business and general corporate purposes.

Financial Highlights and Guidance

The current revenue backlog increased by 48.2% to $57.8 million from $39.0 million at the end of the third quarter of FY 2018 (ASC 605).

The company is providing revenue guidance for the full FY 2019 of $51.0 million – $55.0 million (ASC 606).

Contract manufacturing revenue from Avid’s clinical and commercial biomanufacturing services was $6.9 million for the fourth quarter of FY 2018 compared to $17.9 million for the fourth quarter of FY 2017. Revenue for the full FY 2018 met guidance at $53.6 million compared to $57.6 million for full FY 2017. The decline in both the fourth quarter and FY 2018 was primarily due to previously announced lower demand from one of our largest customers.

Gross margin for the fourth quarter of FY 2018 was negative 28%, and gross margin for full FY 2018 was negative 5%. These margins are compared to positive 34% for the fourth quarter of FY 2017 and positive 34% for the full FY 2017.

·Selling, general and administrative (S,G&A) expenses for the fourth quarter of FY 2018 were $4.2 million, compared to $4.5 million for the fourth quarter of FY 2017. For the full FY 2018, total S,G&A expenses were $16.5 million, compared to $18.1 million for FY 2017. S,G&A expense for the fourth quarter of FY 2018 included one-time charges totaling $1.2 million for the write-off of equipment, severance and other one-time charges. The decreases in both the fourth quarter and FY 2018 were driven primarily by lower headcount and expense reductions.

Income from discontinued operations for the fourth quarter of FY 2018 was $9.2 million, which was primarily due to the gain on sale of certain assets to Oncologie, Inc.

For the fourth quarter of FY 2018, the company recorded consolidated net income attributable to common stockholders of $1.6 million or $0.03 per share, compared to a consolidated net loss attributable to common stockholders of $6.7 million, or $0.16 per share, for the fourth quarter of FY 2017. For full FY 2018, the company recorded a consolidated net loss attributable to common stockholders of $26.5 million or $0.56 per share, compared to a consolidated net loss attributable to common stockholders of $32.8 million, or $0.88 per share, for full FY 2017.

·Avid reported $42.3 million in cash and cash equivalents as of April 30, 2018, compared to $46.8 million on April 30, 2017.

More detailed financial information and analysis may be found in Avid’s Annual Report on Form 10-K, which will be filed with the Securities and Exchange Commission today.

Conference Call

Avid will host a conference call and webcast this afternoon, July 16, 2018, at 4:30 PM EDT (1:30 PM PDT).

To listen to the conference call, please dial (877) 312-5443 or (253) 237-1126 and request the Avid Bioservices conference call. To listen to the live webcast, or access the archived webcast, please visit: View Source