On May 9, 2018 Idera Pharmaceuticals, Inc. ("Idera") (NASDAQ:IDRA), a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel nucleic acid-based therapeutics for oncology and rare diseases, reported its financial and operational results for the first quarter ended March 31, 2018 (Press release, Idera Pharmaceuticals, MAY 9, 2018, View Source [SID1234526315]).

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"Our company continues to make significant progress advancing our two lead TLR modulating clinical development candidates, tilsotolimod and IMO-8400," stated Vincent Milano, Idera’s chief executive officer. Milano continued, "As we now advance through the second quarter, we are continuing to enroll patients in the ILLUMINATE oncology trials, with the next planned data from ILLUMINATE-204 in PD-1 refractory metastatic melanoma to be presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) ("ASCO") Annual Meeting and completion of enrollment expected by year end. For IMO-8400, we plan to report top-line data from our Phase 2 trial in dermatomyositis in June. As it pertains to our nucleic acid chemistry research group, we completed our data analysis for IDRA-008 which has led us to a decision to not advance that program into the clinic."

"In January of this year, we announced our proposed merger with BioCryst Pharmaceuticals, Inc. that we believe will build greater and more sustainable value for the benefit of stockholders as well as patients with rare diseases beyond what we could achieve alone. The Idera Board determined this combination was compelling from both a strategic and financial perspective following a careful evaluation of a range of strategies to enhance long-term stockholder value. The transaction will create a leading rare disease company with a robust pipeline including two promising Phase 3 rare disease programs and combines synergistic discovery engines that will not only expand the number of rare diseases we can target but create meaningful opportunities for differentiation in the market through joint small molecule and oligo treatments. Importantly, joining with BioCryst will also enable us to achieve cost synergies and increase our financial strength and flexibility. Subject to shareholder approval, we expect to close the transaction in the third quarter," Milano expressed.

Clinical Development Program Updates:
TLR Modulation Technology Development Candidates

ILLUMINATE (tilsotolimod) Clinical Development

ILLUMINATE 301 – Randomized phase 3 trial of tilsotolimod in combination with ipilimumab versus ipilimumab alone in patients with PD-1 refractory metastatic melanoma:

Trial initiated in Q1 2018;
Approximately 80 sites planned for trial participation across 12 countries;
Planned enrollment of approximately 300 patients with Overall Response Rate ("ORR") and Overall Survival as primary endpoints; and
U.S. Food and Drug Administration granted Fast Track Designation for tilsotolimod in combination with ipilimumab for treatment of PD-1 refractory metastatic melanoma in fourth quarter of 2017.
ILLUMINATE 204 – Phase 1/2 trial of intratumoral tilsotolimod in combination with ipilimumab or pembrolizumab in patients with PD-1 refractory metastatic melanoma:

Ipilimumab Combination Arm – Phase 2 Expansion Ongoing at RP2D of 8mg

Enrollment (60 patients) completion expected by year end 2018;
5 of the first 10 evaluable patients at the 8 mg dose of tilsotolimod were responders (50% ORR);
Additional data from the Phase 2 expansion of ILLUMINATE-204 selected for presentation at upcoming ASCO (Free ASCO Whitepaper) meeting in Chicago, IL.
Melanoma/Skin Cancers poster discussion session on June 4, 2018 at 4:45 PM CT; and
Investor/Analyst Event featuring lead ILLUMINATE-204 investigator, Adi Diab, MD from the University of Texas, MD Anderson Cancer Center to be held at 6:30 PM CT, also on June 4, 2018. As a convenience to those unable to attend, this event will be webcast.
Pembrolizumab Combination Arm – Phase 1 Dose Escalation Ongoing

Enrollment into the last dosing cohort (32 mg) ongoing;
The previously reported partial response (PR) in 1 of the first 6 patients in the 16 mg cohort of intratumoral tilsotolimod in combination with pembrolizumab has evolved into a confirmed complete response (CR).
ILLUMINATE 101 – Phase 1b trial of intratumoral tilsotolimod monotherapy in patients with refractory solid tumors:

Completed enrollment in first two cohorts (11 patients treated with 8 mg dose of tilsotolimod, 8 patients treated with 16 mg dose of tilsotolimod);
Two patients in cohort 1 (8 mg) continue in follow-up; 2 patients in cohort 2 (16 mg) continue tilsotolimod monotherapy and two patients continue in follow-up; and
6 of 8 planned patients for cohort 3 (23 mg) enrolled.
(IMO-8400) Development Activities

PIONEER-211 – Randomized placebo controlled Phase 2 trial of IMO-8400 in adult patients with dermatomyositis:

Enrollment concluded during Q3 2017 (30 patients); and
Topline phase 2 trial data expected in June 2018.
Nucleic Acid Chemistry Research Group

We are developing our nucleic acid chemistry technology to "turn off" the mRNA associated with disease causing genes. Our focus is on creating candidates targeted to specific genes to treat cancer and rare diseases.
We had selected IDRA-008 as our first nucleic acid chemistry research program candidate. IDRA-008 targets the Apolipoprotein C-III (APOC-III) gene and was being developed for the treatment of Familial Chylomicronemia Syndrome (FCS) and Familial Partial Lipodystrophy (FPL) which had available pre-clinical animal models and well-known clinical endpoints.
During the first quarter of 2018, we completed our pre-clinical analysis for IDRA-008 and based upon the outcome of pre-clinical pharmacology studies, including a comparative pharmacology study with the competitive development asset volanesorsen, and IND-enabling safety evaluation, we made a data-driven decision to not advance IDRA-008 into clinical development.
We are currently conducting analysis throughout our research portfolio to identify other candidates for future clinical development based on our nucleic acid technology expertise and potential strategic commercial opportunity.
Financial Results
First Quarter Results
Net loss applicable to common stockholders for the three months ended March 31, 2018 was $20.1 million, or $0.10 per basic and diluted share, compared to net loss applicable to common stockholders of $15.1 million, or $0.10 per basic and diluted share, for the same period in 2017. Revenue in each of the three months ended March 31, 2018 and 2017 was nominal. Research and development expenses for the three months ended March 31, 2018 totaled $13.6 million compared to $11.5 million for the same period in 2017. General and administrative expense for the three months ended March 31, 2018 totaled $7.0 million compared to $4.1 million for the same period in 2017.

During the three months ended March 31, 2018, holders of warrants, including Baker Brothers, exercised warrants to purchase shares of the Idera’s common stock which generated $9.6 million in cash proceeds. As of March 31, 2018, our cash and cash equivalents totaled $107.5 million compared to $112.6 million as of December 31, 2017. We currently anticipate that, based on our current operating plan and without taking into account the transaction with BioCryst Pharmaceuticals, Inc. ("BioCryst"), our existing cash, cash equivalents and investments will fund our operations into the third quarter of 2019.

Corporate Updates:

On January 22, 2018, BioCryst and Idera jointly announced the signing of a definitive merger agreement to create a company focused on the development and commercialization of medicines to serve patients suffering from rare diseases. The combined company will be renamed upon closing, and will be led by Vincent Milano, the current chief executive officer of Idera. Jon Stonehouse, the current chief executive officer of BioCryst, will serve as a member of the Board of Directors. The transaction is subject to approval by the stockholders of both companies, as well as the satisfaction of customary closing conditions. The transaction is expected to be completed by the end of the third quarter of 2018.

On May 9, 2018 Endocyte, Inc. (Nasdaq:ECYT), a biopharmaceutical company developing targeted therapeutics for personalized cancer treatment, reported financial results for the first quarter ending Mar. 31, 2018 and provided an operational update (Press release, Endocyte, MAY 9, 2018, View Source [SID1234526314]).

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"We made important progress during the first quarter in establishing the design of our phase 3 VISION trial of 177Lu-PSMA-617, securing clinical supply of no-carrier-added Lutetium, and raising sufficient capital to fund the company through expected completion of the trial," said Mike Sherman, president and CEO of Endocyte. "We continue to expect the first patient visit in the VISION trial in the second quarter and are working to advance EC17/CAR T-cell therapy, our folate-targeted CAM-based therapy, for which we expect to have an IND submitted in the fourth quarter of 2018."

Mr. Sherman continued, "In addition, we are encouraged by the updated 30 patient data from the ongoing phase 2 trial at Peter MacCallum Cancer Centre in Melbourne, Australia, published today in The Lancet Oncology. We anticipate an update at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting in June with early data on the additional 20 patients dosed in the expansion phase of that trial. Enrollment also continues in the phase 2 TheraP trial in Australia comparing 177Lu-PSMA-617 to cabazitaxel in 200 patients."

First Quarter and Recent Highlights

Finalized the design for the phase 3 VISION trial evaluating 177Lu-PSMA-617 in patients with metastatic castration-resistant prostate cancer (mCRPC) following a successful End-of-Phase 2 meeting with the U.S. Food and Drug Administration.

Announced an agreement with ITM Isotopen Technologien München AG to supply no-carrier-added Lutetium (177Lu) to support the phase 3 VISION trial.

Presented data on the chimeric antigen receptor T-cell (CAR T) adaptor molecule (CAM) platform at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting 2018 confirming the anti-tumor activity of Endocyte’s folate-targeted EC17/CAR T-cell therapy.

·

Completed an underwritten registered public offering of 20,535,714 shares of its common stock, including full exercise of the underwriters’ option to purchase additional shares of common stock, at a public offering price of $4.20 per share. Endocyte received aggregate net proceeds from the offering of approximately $80.9 million.

·

Hired additional experienced clinical trial professionals to ensure strong execution and support the success of its clinical programs.

·

Elected Patrick Machado, J.D., co-founder and former chief business and financial officer of Medivation, and Dawn Svoronos, former president of Merck’s Europe/Canada region, to serve on the Board of Directors, bringing significant commercial leadership and understanding of the prostate cancer market to the Board.

Expected 2018 Milestones

·

First patient visit for phase 3 VISION trial of 177Lu-PSMA-617 in mCRPC (2Q 2018).

·

50-patient response rate data readout of investigator-initiated trial of 177Lu-PSMA-617 in mCRPC patients at Peter MacCallum Cancer Centre in Melbourne, Australia, to be presented at the Annual Meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) (June 2018).

·

Publications on additional ongoing investigator-initiated clinical trials of 177Lu-PSMA-617 in prostate cancer patients (2018).

·

IND for phase 1 trial of EC17/CAR T-cell therapy in patients with osteosarcoma (4Q 2018).

First Quarter 2018 Financial Results

Endocyte reported a net loss of $8.6 million, or $0.16 per basic and diluted share, for the first quarter of 2018, compared to a net loss of $11.5 million, or $0.27 per basic and diluted share for the same period in 2017.

Research and development expenses were $5.3 million for the first quarter of 2018, compared to $8.0 million for the same period in 2017. The decrease was primarily attributable to a strategic portfolio review announced in June 2017 which led to a reduction in workforce and the discontinuation of certain research and development activities, including: a decrease of $1.4 million in expenses related to pre-clinical work and general research, including the development of EC2629; a decrease of $0.8 million in EC1169 trial expenses; a decrease of $0.6 million in EC1456 trial expenses; a decrease of $0.5 million in compensation expense as a result of employee terminations since March 31, 2017, and a decrease of $0.4 million in manufacturing expense for EC1169 and EC1456. These decreases were partially offset by: an increase of $0.8 million in expenses related to development of PSMA-617; and an increase of $0.2 million related to our CAR T-cell therapy program.

General and administrative expenses were $3.8 million for the first quarter of 2018, which were consistent with the $3.7 million of expenses for the same period in 2017.

Cash, cash equivalents and investments were $173.1 million at Mar. 31, 2018, compared to $127.6 million at Mar. 31, 2017, and $97.5 million at Dec. 31, 2017. Cash, cash equivalents and investments of $173.1 million at Mar. 31, 2018 included $80.9 million of net proceeds from our public offering of 20,535,714 shares of our common stock that closed in March 2018.

Financial Expectations

The company anticipates its cash, cash equivalents and investments balance at the end of 2018 to exceed $130 million. Based on current operational assumptions, Endocyte has sufficient cash to fund its activities through the expected end of the VISION trial and potential proof of concept of its EC17/CAR T-cell therapy.

Conference Call

Endocyte management will host a conference call today at 8:30 a.m. EDT.

U.S. and Canadian participants:(877) 845-0711

International:(760) 298-5081

A live, listen-only webcast of the conference call may be accessed by visiting the Investors & News section of the Endocyte website, www.endocyte.com.

The webcast will be recorded and available on the company’s website for 90 days following the call.

Website Information

Endocyte routinely posts important information for investors on its website, www.endocyte.com, in the "Investors & News" section. Endocyte uses this website as a means of disclosing material information in compliance with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the "Investors & News" section of

Endocyte’s website, in addition to following its press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, Endocyte’s website is not incorporated by reference into, and is not a part of, this document.

On May 9, 2018 Array BioPharma Inc., (Nasdaq: ARRY) reported results for its third quarter of fiscal 2018 and provided an update on the progress of its key clinical development programs (Press release, Array BioPharma, MAY 9, 2018, View Source [SID1234526313]).

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"Preparations for the anticipated U.S. launch of encorafenib and binimetinib in BRAF-mutant melanoma are well underway," said Ron Squarer, Chief Executive Officer. "We are pleased to have our entire commercial leadership and infrastructure in place and are poised for an exciting 2018, as we look ahead to commercialization and additional data updates from our encorafenib and binimetinib clinical trials."

COLUMBUS PHASE 3 TRIAL
Regulatory
Array’s New Drug Applications (NDAs) to support use of the encorafenib and binimetinib combination for the treatment of patients with BRAF-mutant advanced, unresectable or metastatic melanoma remain under review by the FDA with a target action date under Prescription Drug User Fee Act (PDUFA) of June 30, 2018.

The European Medicines Agency (EMA), as well as the Swiss Medicines Agency (Swissmedic) and the Australian Therapeutic Goods Administration (TGA), are reviewing the Marketing Authorization Applications (MAAs) submitted by Pierre Fabre and Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) has accepted the Manufacturing and Marketing Approval (MMA) applications submitted by Ono Pharmaceutical Co, Ltd.

The regulatory submissions were based on findings from the pivotal Phase 3 COLUMBUS trial.

COLUMBUS Median Overall Survival Results
Array will announce additional results from the Phase 3 COLUMBUS trial in an oral presentation (Abstract #223875) at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2018 Annual Meeting on June 4.

Array previously announced that treatment with the combination of encorafenib 450 mg daily and binimetinib 45 mg twice daily (COMBO450) reduced the risk of death compared to treatment with vemurafenib 960 mg daily [hazard ratio (HR) of 0.61, (95% CI 0.47, 0.79, p<0.001)] in patients with BRAF-mutant melanoma in the Phase 3 COLUMBUS trial.

•
The Phase 3 trial showed mOS of 33.6 months for patients treated with COMBO450, compared to 16.9 months for patients treated with vemurafenib as a monotherapy.

Exhibit 99.1

•
As previously reported, the combination of encorafenib and binimetinib was generally well-tolerated. Grade 3/4 adverse events (AEs) that occurred in more than 5% of patients receiving the combination were increased gamma-glutamyltransferase (GGT) (9%), increased blood creatine phosphokinase (CK) (7%) and hypertension (6%). The incidence of selected any grade AEs of special interest, defined based on toxicities commonly associated with commercially available BRAF+MEK-inhibitor treatments for patients receiving the combination of encorafenib and binimetinib included: rash (22%), pyrexia (18%), serous retinopathy including retinal pigment epithelial detachment (20%) and photosensitivity (5%). Full safety results of COLUMBUS Part 1 were published in The Lancet Oncology.

The Lancet Oncology Publication
Detailed results of the pivotal Phase 3 COLUMBUS trial for the treatment of patients with BRAF-mutant advanced, unresectable or metastatic melanoma were published online on March 21, 2018 and in the May 2018 print edition of The Lancet Oncology.

BEACON CRC PHASE 3 TRIAL
Array will present updated results from the 30 patient safety lead-in of the Phase 3 BEACON CRC trial at the ESMO (Free ESMO Whitepaper) 20th World Congress on Gastrointestinal Cancer June 20-23, 2018.

Array will present updated results from the 30 patient safety lead-in of the Phase 3 BEACON CRC trial evaluating the triplet combination of encorafenib, binimetinib and cetuximab, an EGFR antagonist, in patients with BRAF-mutant CRC whose disease has progressed after one or two prior regimens at the ASCO (Free ASCO Whitepaper) 2018 Gastrointestinal Cancers Symposium.

•
The estimated mPFS at the time of analysis was 8 months in 29 patients with BRAFV600E-mutant CRC.
•
The confirmed overall response rate (ORR) was 48% with 3 complete responses in patients with BRAFV600E-mutant CRC. Further, the ORR was 62% in the 16 patients who received only one prior line of therapy.
•
These data represent improvements compared to several approved standard of care benchmarks for this population which range between 4% to 8% ORR and 1.8 and 2.5 months mPFS. [1-4]
•
The triplet combination was generally well-tolerated. Two patients discontinued treatment due to AEs with only one of these considered related to treatment. The most common grade 3 or 4 AEs seen in at least 10% of patients were fatigue, urinary tract infection, increased aspartate aminotransferase (AST) and increased blood CK.
•
Enrollment in the randomized portion of BEACON CRC is ongoing. BRAF mutations are estimated to occur in 10% to 15% of patients with CRC and represent a poor prognosis for these patients.

Encorafenib and binimetinib are investigational medicines and are not currently approved in any country.

IMMUNO-ONCOLOGY COLLABORATIONS: TRIALS ADVANCING WITH BRISTOL-MYERS SQUIBB AND MERCK; TRIAL WITH PFIZER EXPECTED TO START THIRD QUARTER OF 2018
Array is developing binimetinib in combination with PD-1/ PD-L1 checkpoint inhibitors and has announced separate, strategic collaborations with Bristol-Myers Squibb, Merck and Pfizer, but in each case, are pursuing a unique trial design to explore different clinical approaches.

Bristol-Myers Squibb
•
The clinical trial continues to advance and is designed to investigate the safety, tolerability and efficacy of binimetinib in combination with nivolumab (anti-PD-1 therapy), with and without ipilimumab (CTLA-4 antibody), in patients with advanced metastatic microsatellite stable (MSS) CRC and the presence of a RAS mutation who have received one or two prior regimens.

The trial is jointly supported by Array and Bristol-Myers Squibb and sponsored by Array.

Merck

The clinical trial continues to advance and is designed to investigate the safety, tolerability and efficacy of binimetinib in combination with pembrolizumab (anti-PD-1 therapy), with and without FOLFOX or FOLFIRI (chemotherapy) in patients with CRC whose tumors are not microsatellite instability-high (MSI-H).

The trial is sponsored and funded by Merck, with Array providing binimetinib supply.

Pfizer

The clinical trial is designed to investigate the safety, tolerability and efficacy of several novel anti-cancer combinations, including binimetinib, avelumab (anti-PD-L1 therapy) and talazoparib (PARP inhibitor) across various tumor types and is expected to begin during the third quarter of 2018.

Exhibit 99.1

Initially, the focus will be in non-small cell lung cancer (NSCLC) and pancreatic cancer, with additional indications being explored at a later stage.

The trial will be sponsored and funded by Pfizer, with Array providing binimetinib supply.

FINANCIAL HIGHLIGHTS
Novartis Financial Commitment
Novartis continues to substantially fund all ongoing trials with encorafenib and binimetinib that were active or planned as of the close of the Novartis Agreements in 2015, including the COLUMBUS Phase 3 trial. Reimbursement revenue from Novartis was approximately $87 million for the 12 months ended March 31, 2018, of which $24.8 million was recorded in the quarter ended March 31, 2018. Total revenue and upfront payment collected from Novartis since the start of the 2015 agreement is $373.5 million.

Third Quarter of Fiscal 2018 Compared to Second Quarter of Fiscal 2018 (Sequential Quarters Comparison)
· Revenue for the third quarter of fiscal 2018 was $66.4 million, compared to $42.2 million for the prior quarter. The increase was primarily due to an upfront license fee from ASLAN Pharmaceuticals as well as higher Novartis reimbursement revenue.
· Cost of partnered programs for the third quarter of fiscal 2018 was $17.7 million, compared to $13.7 million for the prior quarter. The increase was primarily due to higher costs incurred for the BEACON CRC trial as it continues to advance, as well as additional resources engaged on collaborations.
· Research and development expense for proprietary programs was $53.6 million, compared to $42.6 million in the prior quarter. The increase was driven by higher activity on the Novartis transitioned studies and pre-commercial manufacturing costs for encorafenib and binimetinib.
· Loss from Operations for the quarter was $21.8 million, compared to a loss from operations of $25.7 million in the previous quarter. The decrease in net loss was primarily due to increased revenue, which was partially offset by increased research and development expense.
· Net loss for the second quarter was $22.9 million, or ($0.11) per share, compared to $34.1 million, or ($0.17) per share, in the prior quarter.
· Cash, Cash Equivalents and Marketable Securities as of March 31, 2018 were $440 million.

Third Quarter of Fiscal 2018 Compared to Third Quarter of Fiscal 2017 (Prior Year Comparison)
· Revenue for the third quarter of fiscal 2018 increased by $33.1 million compared to the same quarter of fiscal 2017. The increase was primarily due to the ASLAN Pharmaceuticals upfront license fee.
· Cost of partnered programs increased $10.3 million compared to the third quarter of fiscal 2017. The increase was primarily due to higher costs incurred for the BEACON CRC trial, as well as more resources engaged on collaborations.
· Research and development expense for proprietary programs increased $7.6 million, compared to the third quarter of fiscal 2017. The increase was driven by higher activity on the Novartis transitioned studies and pre-commercial manufacturing costs for encorafenib and binimetinib.
•
Net loss for the third quarter of fiscal 2018 was $22.9 million, or ($0.11) per share, compared to $35.3 million, or ($0.21) per share, for the same quarter in fiscal 2017. The decrease in net loss was primarily due to increased revenue, which was partially offset by increased research and development expense.

CONFERENCE CALL INFORMATION
Array will hold a conference call on Wednesday, May 9, 2018 at 9:00 a.m. Eastern Time to discuss these results and provide an update on the progress of its key clinical development programs. Ron Squarer, Chief Executive Officer, will lead the call.

Date: Wednesday, May 9, 2018
Time: 9:00 a.m. Eastern Time
Toll-Free: (844) 464-3927
Toll: (765) 507-2598
Pass Code: 6465079

Webcast, including Replay and Conference Call Slides:
View Source

On May 9, 2018 Horizon Pharma plc (NASDAQ:HZNP) reported its first-quarter 2018 financial results and increased its full-year 2018 net sales and adjusted EBITDA guidance (Press release, Horizon Pharma, MAY 9, 2018, View Source [SID1234526308]). The Company also announced that, effective in the second-quarter 2018, the Company is realigning its operating structure and will report financial results as two separate operating segments: its strategic growth business, orphan and rheumatology; and primary care. The new operating structure reflects the evolution of the Company’s strategy and vision of transitioning Horizon Pharma to a biopharmaceutical company focused on rare disease medicines.

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"Our orphan and rheumatology medicines represented approximately 77 percent of the Company’s first-quarter net sales and generated double-digit growth driven by 48 percent growth of KRYSTEXXA," said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. "Our decision to operate orphan and rheumatology separately from primary care marks a pivotal next step in our ongoing strategic transformation to a company focused on rare disease medicines. We made significant advancements during the first quarter toward our goal, including progress ahead of our expectations in the Phase 3 clinical trial for our key rare disease medicine in development, teprotumumab, which is now 50 percent enrolled."

First-Quarter and Recent Company Highlights

New Head of R&D and Chief Scientific Officer: Shao-Lee Lin, M.D., Ph.D., joined the Company in January 2018 as executive vice president, head of research and development (R&D) and chief scientific officer. Dr. Lin is an accomplished pharmaceutical executive, physician and scientist with more than 20 years of academic and clinical research experience and will accelerate the development of a robust pipeline to drive the Company’s next phase of growth.

"We are committed to establishing Horizon Pharma as a leader in the rare disease space, and one of our goals to support that objective is to enhance the capabilities of our R&D organization," said Lin. "We are well on our way, having made several important additions to the organization that expand our development capabilities, support our business development team in evaluating and identifying development-stage opportunities and lead our therapeutic areas from a clinical development strategy and portfolio management perspective. Enhancing our R&D organization will enable us to maximize our on-market medicines and develop new medicines for patients with unmet needs – and in the case of rare diseases, some of the most significantly underserved patients."
Intellectual Property Update: The Company recently received two Notices of Allowance from the U.S. Patent and Trademark Office for U.S. patent application numbers 15/457,643 and 15/687,132, both entitled "Methods of Therapeutic Monitoring of Nitrogen Scavenging Drugs" that cover RAVICTI. The U.S. patents scheduled to issue from these applications will expire on Sept. 22, 2030. After issuance, the Company plans to list the U.S. patents in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book.
Research and Development
Orphan Candidates and Programs:

Teprotumumab: The Phase 3 clinical trial for teprotumumab, the Company’s fully human monoclonal antibody IGF-1R-inhibitor in development for the treatment of thyroid eye disease (TED), a rare eye disease, is 50 percent enrolled and is on track for enrollment completion by year end, or earlier. The pivotal confirmatory study is evaluating teprotumumab for the treatment of moderate-to-severe active TED, which has no FDA-approved treatments. The Company estimates peak annual U.S. net sales of more than $750 million for teprotumumab, assuming U.S. FDA approval.
Rheumatology Pipeline Candidates and Programs:

Immunomodulation Studies: The evaluation of the use of immunomodulation therapies to enhance the response rate to KRYSTEXXA is being studied in two investigator-initiated trials, using two different immunomodulators, both of which are commonly used by rheumatologists. REduCing Immunogenicity to PegloticasE (RECIPE) is a double-blind, placebo controlled trial to evaluate the impact of a 12-week course of immunomodulating therapy with daily doses of mycophenolate mofetil (MMF). Tolerization Reduces Intolerance to Pegloticase and Prolongs the Urate Lowering Effect (TRIPLE) is an exploratory, open-label adaptive trial with multiple patient cohorts, including a cohort to evaluate the impact of adding daily doses of the immunomodulator azathioprine for a two-week run-in period, followed by KRYSTEXXA every two weeks for a total of 13 doses along with daily doses of azathioprine.

New Rheumatology Programs: In January 2018, the Company announced two development programs for next-generation biologics for uncontrolled gout (chronic gout that is refractory to conventional therapies) to support and sustain the Company’s market leadership in uncontrolled gout: HZN-003 and PASylated uricase technology. HZN-003 is a pre-clinical, genetically engineered uricase derivative with optimized uricase and optimized PEGylation technology. PASylated uricase technology may improve the half-life of uricase, and the Company is collaborating with a third party to identify a lead candidate that could use the technology to construct a next-generation gout biologic. The Company also announced the addition of HZN-002, a pre-clinical, novel dexamethasone conjugate with the potential to address inflammatory diseases through its targeted delivery technology.
New Operating Structure Aligned with Long-term Strategy

Given the Company’s focus on rare disease medicines, effective in the second quarter of 2018, the Company is realigning its structure to operate its strategic growth business, orphan and rheumatology, separate from its primary care business. The new structure allows the Company to more efficiently allocate its resources to address unmet treatment needs for patients with rare diseases.

As part of the new operating structure, the Company has realigned its commercial operations under a new leadership position, executive vice president and chief commercial officer, and recently promoted Vikram Karnani to that role. Karnani was most recently senior vice president, rheumatology business unit, leading the successful growth to date of KRYSTEXXA. In addition, aligned with the new operating structure, the Company is adding critical R&D leadership roles to support the orphan and rheumatology segment, including recently hired clinical development heads for both of these therapeutic areas.

As a result of these changes, in the second quarter of 2018, the Company will begin reporting its financial results as two separate operating segments: the orphan and rheumatology segment, the Company’s strategic rare disease-focused business and the primary care segment, reporting net sales and operating income for each segment.

First-Quarter 2018 Total Company Financial Results

Note: For additional detail and reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, please refer to the tables at the end of this release.

Total Net Sales: First-quarter net sales were $223.9 million, an increase of 1.4 percent, driven by continued strong growth of the Company’s orphan and rheumatology medicines. Net sales of $220.9 million in the first quarter of 2017 included PROCYSBI and QUINSAIR net sales of $4.9 million in Europe, the Middle East and Africa (EMEA) regions. The EMEA marketing rights to PROCYSBI and QUINSAIR were divested in June 2017. Excluding the 2017 EMEA net sales of PROCYSBI and QUINSAIR, year-over-year growth would have been 3.7 percent.

Gross Profit: Under U.S. GAAP in the first quarter of 2018, the gross profit ratio was 48.1 percent compared to 37.0 percent in the first quarter of 2017. The non-GAAP gross profit ratio in the first quarter of 2018 was 87.0 percent compared to 88.5 percent in the first quarter of 2017.

Operating Expenses: R&D expenses were 7.9 percent of net sales; and selling, general and administrative (SG&A) expenses were 80.2 percent of net sales. Non-GAAP R&D expenses were 6.8 percent of net sales, and non-GAAP SG&A expenses were 65.2 percent of net sales.
Income Tax Rate: The income tax rate in the first quarter of 2018 on a GAAP basis was 0.2 percent and on a non-GAAP basis was 44.5 percent.

Net (Loss) Income: On a GAAP basis in the first quarter of 2018, net loss was $157.3 million. First-quarter 2018 non-GAAP net income was $4.8 million.

Adjusted EBITDA: In the first quarter of 2018, adjusted EBITDA was $33.6 million.

Earnings (Loss) per Share: On a GAAP basis in the first quarter of 2018, diluted loss per share was $0.96; in the first quarter of 2017, diluted loss per share was $0.56. Non-GAAP diluted earnings per share in the first quarter of 2018 and 2017 were $0.03 and $0.21, respectively. Weighted average shares outstanding used for calculating GAAP diluted loss per share and non-GAAP diluted earnings per share in the first quarter of 2018 were 164.5 million and 167.8 million, respectively.

(1) On June 23, 2017, Horizon Pharma completed the divestiture of a European subsidiary that owned the marketing rights to PROCYSBI and QUINSAIR in Europe, the Middle East and Africa to Chiesi Farmaceutici S.p.A. Horizon Pharma retains marketing rights for the two medicines in the United States, Canada, Latin America and Asia.
Combined first-quarter 2018 net sales of orphan and rheumatology medicines of $172.2 million increased 11 percent, driven by continued strong KRYSTEXXA vial growth, as well as growth of RAVICTI and PROCYSBI. Combined first-quarter 2017 net sales of orphan and rheumatology medicines of $155.3 million included EMEA net sales of PROCYSBI and QUINSAIR, which were divested in June 2017, of $4.9 million. Excluding the 2017 EMEA net sales of PROCYSBI and QUINSAIR from combined orphan and rheumatology net sales, year-over-year growth would have been 15 percent.

First-quarter 2018 net sales of primary care medicines were $51.7 million, negatively impacted by seasonality, to a somewhat greater degree than originally anticipated. First-quarter net sales also included a negative $14 million impact from an additional accrual for medicines in the wholesale and retail channel following the Company’s price action. Excluding the additional accrual, which did not occur in first-quarter 2017, first-quarter 2018 primary care net sales on a pro-forma basis were similar to first-quarter 2017, reflecting the stability of this business.
Cash Flow Statement and Balance Sheet Highlights

On a GAAP basis in the first quarter of 2018, operating cash flow was negative $60.8 million. Non-GAAP operating cash flow was negative $52.7 million in the first quarter of 2018, as expected. GAAP and non-GAAP operating cash flow in the first quarter of 2017 included a significant one-time working capital benefit associated with the implementation of managed care contracts for certain primary care medicines.
The Company had cash and cash equivalents of $674.3 million as of March 31, 2018.

As of March 31, 2018, the total principal amount of debt outstanding was $2.019 billion, which comprised $844 million in senior secured term loans due 2024; $300 million senior notes due 2024; $475 million senior notes due 2023; and $400 million exchangeable senior notes due 2022. As of March 31, 2018, net debt was $1.344 billion.
Full-Year 2018 Guidance

The Company now expects full-year 2018 net sales guidance of $1.170 billion to $1.200 billion, an increase from the previous range of $1.150 billion to $1.180 billion. Full-year 2018 adjusted EBITDA is now expected to be $390 million to $415 million, an increase from the previous range of $370 million to $395 million. Company guidance now assumes a delay in the implementation of a U.S. government rule related to 340B entity drug pricing to July 1, 2019, following the U.S. Department of Health and Human Services’ proposal to delay the effective date to that date. As a result, the Company now expects full-year 2018 net sales growth for KRYSTEXXA of more than 65 percent.

Webcast

At 8 a.m. EST / 1 p.m. IST today, the Company will host a live webcast to review its financial and operating results and provide a general business update. The live webcast and a replay may be accessed at View Source Please connect to the Company’s website at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. A replay of the webcast will be available approximately two hours after the live webcast.

On May 9, 2018 Compugen Ltd. (Nasdaq: CGEN), a clinical-stage cancer immunotherapy company and a leader in predictive target discovery, reported financial results for the first quarter ended March 31, 2018 (Press release, Compugen, MAY 9, 2018, View Source [SID1234526305]).

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"Key developments in the first quarter of 2018 support Compugen’s position as a leader in predictive discovery of new drug targets, and as an emerging clinical-stage immuno-oncology therapeutics company," said Anat Cohen-Dayag, Ph.D., President and CEO of Compugen. "In late March, we filed an IND application for COM701, our leading first-in-class immuno-oncology therapeutic program targeting PVRIG. The FDA informed us that the IND application review can be completed once we provide additional information regarding COM701’s assay method at a lower recommended starting dose. We have already initiated activities to provide the information to the Agency, and do not anticipate that this will impact our timelines and overall clinical plans."

"Preclinical data suggest that our PVRIG inhibitor may trigger an anti-tumor immune response alone and in combination with TIGIT and/or PD-1 inhibitors in many cancers. As COM701 is the first clinical antibody candidate targeting PVRIG to be available for testing dual and triple combinations with TIGIT and PD-1 inhibitors, we believe it places Compugen in a unique position and gives us a competitive edge in the immuno-oncology space."

"In the first quarter of the year, we also entered into a license agreement with MedImmune, the global biologics research and development arm of AstraZeneca. With this agreement we monetized one of our pipeline assets, in applications where we do not have existing development plans, to provide capital to support our ongoing development programs."

"In light of Bayer’s announcement that they plan to begin first-in-human trials for their ILDR2 antibody, we expect that two first-in-class immuno-oncology programs based on our discoveries will be in the clinic in 2018. Advancing a program from computer prediction to IND filing is a tremendous achievement, and we are excited about the potential for these programs to provide meaningful benefit to cancer patients in need," concluded Dr. Cohen-Dayag.

Recent highlights:
·
Submitted IND application for COM701, a novel first-in-class therapeutic antibody targeting PVRIG.
·
Bayer presented preclinical data on BAY 1905254, its therapeutic antibody targeting ILDR2, at the annual meeting of the American Association of Cancer Research held in April 2018 and announced its plans to advance the program to clinical trial in 2018.
·
Entered into a license agreement with MedImmune, the global biologics research and development arm of AstraZeneca, to enable the development of bi-specific and multi-specific immuno-oncology antibody products based on one of Compugen’s pipeline programs.

Financial Results

Revenues for the first quarter of 2018 were $10 million, compared with $0 in the comparable period of 2017. The revenues for the quarter reflect the upfront payment of $10 million from the license agreement with MedImmune.

R&D expenses for the first quarter ended March 31, 2018, were $7.1 million, compared with $6.7 million for the comparable period in 2017. The increase in R&D expenses continues to reflect preclinical development activities, including those supporting the IND filing for COM701, as well as expenses associated with clinical-related activities in preparation for the Phase 1 trial expected to begin later in 2018.

Net income for the first quarter of 2018 was $0.1 million, or $0 per diluted share, compared with a net loss of $8.7 million, or $0.17 per diluted share, in the comparable period of 2017.

As of March 31, 2018, cash, cash related accounts, short-term and long-term bank deposits totaled $20.5 million, not including the $10 million payment from MedImmune received after the quarter end, compared with $30.4 million at December 31, 2017. The Company has no debt.

Conference Call and Webcast Information

Compugen will hold a conference call to discuss its first quarter 2018 results today, May 9, 2018, at 10:00 a.m. ET. To access the live conference call by telephone, please dial 1-888-407-2553 from the U.S., or +972-3-918-0610 internationally. The conference call will also be available via live webcast through Compugen’s website, located at the following link. Following the live audio webcast, a replay will be available on the Company’s website (www.cgen.com).