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TRACON PHARMACEUTICALS ANNOUNCES TOP-LINE RESULTS FROM NCI-SPONSORED PHASE 2 TRIAL OF TRC105 IN RECURRENT GLIOBLASTOMA

On February 9, 2017 TRACON Pharmaceuticals (NASDAQ:TCON), a clinical stage biopharmaceutical company focused on the development and commercialization of novel targeted therapeutics for cancer, wet age-related macular degeneration and fibrotic diseases, reported top-line results from a randomized Phase 2 clinical trial of TRC105 in recurrent glioblastoma (GBM) funded and conducted by the Clinical Therapy Evaluation Program (CTEP) of the National Cancer Institute (NCI) (Press release, Tracon Pharmaceuticals, FEB 9, 2017, View Source [SID1234517685]).

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In the trial, TRC105 combined with Avastin (bevacizumab) was compared to single agent Avastin in a total of 101 patients with recurrent GBM following chemoradiation. The trial was designed to detect a three-month improvement in progression free survival (PFS), the primary endpoint, from the expected value of 3.45 months with single agent Avastin. Top-line data indicate that the combination of TRC105 and Avastin did not improve median PFS versus single agent Avastin in recurrent GBM patients, although the combination was associated with a non-significant increase in overall survival. Detailed data and the associated correlative analyses are expected to be presented at an oncology conference later this year.

"Glioblastoma is a very challenging indication for drug development," said Charles Theuer, M.D., Ph.D., President and CEO of TRACON. "We are grateful to the National Cancer Institute for sponsoring the trial and to the patients and providers who participated, and look forward to the detailed survival analysis from this trial, as well as data from multiple company-sponsored trials of TRC105 in other indications later this year."

About TRC105 and other Endoglin Antibodies

TRC105 is a novel, clinical stage antibody to endoglin, a protein overexpressed on proliferating endothelial cells that is essential for angiogenesis, the process of new blood vessel formation. TRC105 is currently being studied in one Phase 3 and multiple Phase 2 clinical trials sponsored by TRACON or the National Cancer Institute for the treatment of solid tumor types in combination with VEGF inhibitors. The ophthalmic formulation of TRC105, DE-122, is currently in a Phase 1/2 trial for patients with wet AMD. TRC205, a second generation antibody to endoglin, is undergoing preclinical testing in models of fibrosis. For more information about the clinical trials, please visit TRACON’s website at View Source

AVEO Announces Clinical and Regulatory Updates for Tivozanib

On February 9, 2017 AVEO Oncology (NASDAQ:AVEO) reported clinical and regulatory updates for its lead drug candidate, tivozanib, an oral, once-daily, vascular endothelial growth factor (VEGF) tyrosine kinase inhibitor (TKI) (Press release, AVEO, FEB 9, 2017, View Source [SID1234517674]).

The Company announced today that its pivotal, Phase 3 TIVO-3 trial, a randomized, controlled, multi-center, open-label study to compare tivozanib to sorafenib in subjects with refractory advanced renal cell carcinoma (RCC), is enrolling substantially ahead of schedule. The Company now expects TIVO-3 to complete enrollment in June 2017, ahead of its prior guidance of August 2017. Because the study is event driven the Company is not revising the anticipated time to topline data at this time, which is currently expected in the first quarter of 2018. TIVO-3 is expected to undergo a pre-planned futility analysis around midyear. The TIVO-3 trial, together with the previously completed TIVO-1 trial of tivozanib in the first line treatment of RCC, is designed to support first and third line indications for tivozanib in the U.S.

The Company also announced today that the Phase 1/2 AVEO-sponsored TiNivo trial evaluating tivozanib in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, Opdivo (nivolumab), in advanced RCC, is scheduled to open sites for enrollment in early March, with dosing of the first patient expected in the same timeframe. The company received approval by the French National Agency for Medicines and Health Products Safety (ANSM) to initiate the study and is currently labelling the nivolumab supply provided by Bristol-Myers Squibb for use in the trial. The study, which will be led by the Institut Gustave Roussy in Paris, is under the direction of Professor Bernard Escudier, MD, Chairman of the Genitourinary Oncology Committee. The Phase 1 trial will evaluate the safety of tivozanib in combination with nivolumab at escalating doses of tivozanib and, assuming favorable results, is expected to be followed by an expansion Phase 2 cohort at the established combination dose.

AVEO also announced today that its European licensee for tivozanib, EUSA Pharma, a specialty pharmaceutical company with a focus on oncology and oncology supportive care, has received the Day 180 List of Outstanding Issues (LOI) from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA). The Day 180 LOI signifies that the Marketing Authorization Application is not approvable at the present time, and outlines outstanding deficiencies, which are then required to be satisfactorily addressed in an oral explanation and/or in writing prior to a final application decision. EUSA has informed AVEO that it expects to submit written responses to the Day 180 LOI in April 2017, and the EMA has tentatively scheduled EUSA to provide an oral explanation to the CHMP at its May 2017 meeting.

"We continue to execute on the TIVO-3 and TiNivo studies in our effort to complete our U.S. pivotal clinical strategy, as well as support EUSA Pharma in its response to European regulators," said Michael Bailey, president and chief executive officer of AVEO. "The rapid pace of enrollment in our TIVO-3 study is a testament to the broad level of support and enthusiasm for tivozanib among investigators. Fundamental to this drug candidate’s unique profile would be its potential to be safely combined with PD-1 immunotherapies, and we look forward to initial results from the Opdivo combination TiNivo study in RCC in the first half of 2017."

About Tivozanib

Tivozanib is an oral, once-daily, vascular endothelial growth factor (VEGF) tyrosine kinase inhibitor (TKI). It is a potent, selective and long half-life inhibitor of all three VEGF receptors and is designed to optimize VEGF blockade while minimizing off-target toxicities, potentially resulting in improved efficacy and minimal dose modifications. Tivozanib has been investigated in several tumors types, including renal cell, colorectal and breast cancers.

About the TIVO-3 Trial

The Phase 3 TIVO-3 trial is a pivotal, randomized, controlled, multi-center, open-label study to compare tivozanib to sorafenib in subjects with refractory advanced renal cell carcinoma (RCC). The trial is expected to enroll approximately 322 patients with recurrent RCC who have failed at least two prior regimens, including VEGFR-TKI therapy (other than sorafenib). Eligible patients may also have received checkpoint inhibitor therapy in earlier lines of treatment. Patients will be randomized 1:1 to receive either tivozanib or sorafenib, with no crossover between arms. The primary endpoint of the study is progression free survival. Secondary endpoints include overall survival, overall response rate, and safety and tolerability. The TIVO-3 trial, together with the previously completed TIVO-1 trial of tivozanib in the first line treatment of RCC, is designed to support a first and third line indication for tivozanib in the U.S.

Merck Foundation Announces Six Program Grant Recipients for Alliance to Advance Patient-Centered Cancer Care

On Thursday 9, 2017 The Merck Foundation (Foundation), reported the selection of the six program sites and National Program Office forming the Alliance to Advance Patient-Centered Cancer Care (the Alliance) (Press release, Merck & Co, FEB 9, 2017, View Source [SID1234517673]). With $15 million in funding from the Foundation over five years, the Alliance aims to increase timely access to patient-centered cancer care for vulnerable and underserved populations in the United States.

The following organizations have been selected based on a variety of criteria, including the technical merit of their proposed programs, their organizational capabilities and experience, relationships with community partners, and ability to promote sustainable improvements in the delivery of cancer care.

Grady Health System in Atlanta, Ga.;
The Johns Hopkins University in Baltimore, Md.;
Massachusetts General Hospital in Boston, Mass.;
Northwestern University in Chicago, Ill.;
Ohio State University in Columbus, Ohio; and
The University of Arizona in Tucson, Ariz.

The University of Michigan School of Nursing, in Ann Arbor, Mich., will serve as the Alliance’s National Program Office.

"With 1.7 million Americans newly diagnosed with cancer each year, there is a great need to improve the quality and delivery of patient-centered care to help address the significant challenges of those facing this diagnosis," said Julie L. Gerberding, chief patient officer, Merck and chief executive officer, Merck Foundation. "These superb program sites and the National Program Office should accelerate identification and uptake of innovations that benefit patients, improve health communications, and enhance the overall coordination of care."

Through an independent cross-site evaluation, the Foundation will evaluate the impact of the Alliance and its programs. The evaluation findings and lessons learned will be disseminated to promote best practices in patient-centered cancer care.

About The Merck Foundation

The Merck Foundation is a U.S.-based, private charitable foundation. Established in 1957 by Merck, a global health care leader, the Foundation is funded entirely by the company and is Merck’s chief source of funding support to qualified non-profit charitable organizations. Since its inception, the Merck Foundation has contributed more than $870 million to support important initiatives that address societal needs and are consistent with Merck’s overall mission to help the world be well. For more information, visit www.merckgiving.com.

Array BioPharma Reports Financial Results For The Second Quarter Of Fiscal 2017

On February 9, 2017 Array BioPharma Inc. (Nasdaq: ARRY), a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule cancer therapies, reported results for its second quarter of fiscal 2017 and provided an update on the progress of its key clinical development programs (Press release, Array BioPharma, FEB 9, 2017, View Source [SID1234517672]).

"We were pleased to report that COLUMBUS met its primary endpoint and demonstrated a robust PFS benefit associated with the combination of binimetinib plus encorafenib versus vemurafenib in patients with BRAF-mutant melanoma," said Ron Squarer, Chief Executive Officer of Array BioPharma. "Following a pre-NDA meeting with the FDA, we expect to file an NDA for COLUMBUS in June or July."

KEY COMPANY AND PIPELINE UPDATES
Binimetinib (MEK162) and encorafenib (LGX818)
Novartis continues to substantially fund all ongoing trials with binimetinib and encorafenib that were active or planned as of the close of the Novartis Agreements in 2015, including the NEMO and COLUMBUS Phase 3 trials. Reimbursement revenue from Novartis was approximately $130 million for the previous 12 months, of which $27.9 million was recorded over the quarter ending December 31, 2016.

COLUMBUS: Global Phase 3 trial of binimetinib plus encorafenib versus vemurafenib in BRAF-mutant melanoma patients
In November 2016, results from the pivotal Phase 3 COLUMBUS trial of binimetinib plus encorafenib (bini/enco) treatment in BRAF-mutant melanoma patients were presented at the Society for Melanoma Research Annual Congress. The study met its primary endpoint, with the combination of bini/enco significantly improving progression free survival (PFS) compared with vemurafenib, a BRAF inhibitor, alone. In the analysis of the primary endpoint, the median PFS (mPFS) for patients treated with the combination of bini/enco was 14.9 months versus 7.3 months for patients treated with vemurafenib; hazard ratio (HR) 0.54, (95% CI 0.41-0.71, P<0.001). As part of the trial design, the primary analysis was based on a Blinded Independent Central Review (BICR) of patient scans, while results by local review at the investigative site were also analyzed. The chart below outlines the mPFS results, as determined by both assessments, for the combination of bini/enco versus vemurafenib, bini/enco versus encorafenib, and encorafenib versus vemurafenib:

mPFS BICR

mPFS Local Review
Bini/Enco vs. Vemurafenib

Bini/Enco
Vemurafenib

Bini/Enco
Vemurafenib

14.9 months
7.3 months

14.8 months
7.3 months

HR (95% CI): 0.54 (0.41-0.71); P<0.001

HR (95% CI): 0.49 (0.37-0.64); P<0.001

Bini/Enco vs. Encorafenib

Bini/Enco
Encorafenib

Bini/Enco
Encorafenib

14.9 months
9.6 months

14.8 months
9.2 months

HR (95% CI): 0.75 (0.56-1.00); P=0.051

HR (95% CI): 0.68 (0.52-0.90); P=0.006

Encorafenib vs. Vemurafenib

Encorafenib
Vemurafenib

Encorafenib
Vemurafenib

9.6 months
7.3 months

9.2 months
7.3 months

HR (95% CI): 0.68 (0.52-0.90); P=0.007

HR (95% CI): 0.70 (0.54-0.91); P=0.008
The combination of bini/enco also demonstrated an improvement in confirmed overall response rate (ORR; complete response plus partial response), the ability to deliver a high dose intensity to the majority of patients as well as an advantage in terms of maintaining quality of life for patients.

Confirmed ORR BICR
Confirmed ORR Local Review
Bini/Enco
63% (95% CI: 56-70%)
75% (95% CI: 68-81%)
Vemurafenib
40% (95% CI: 33-48%)
49% (95% CI: 42-57%)
Encorafenib
51% (95% CI: 43-58%)
58% (95% CI: 50-65%)
Median duration of exposure was approximately 51 weeks for patients receiving bini/enco, versus 31 weeks and 27 weeks for the encorafenib and vemurafenib monotherapy arms, respectively.
Median dose intensity for patients treated with bini/enco was 100 percent (encorafenib) and 99.6 percent (binimetinib).
5 percent of bini/enco patients had received prior treatment with check-point inhibitors, including ipilimumab, anti-PD-1 and/or anti-PD-L1 therapies, and the observed clinical activity for these patients was generally consistent with that of bini/enco patients who had not received prior immunotherapy.
The Quality of Life (QoL) measures were consistent between two scales and showed an advantage in terms of maintaining quality of life for patients receiving bini/enco compared to patients treated with either encorafenib or vemurafenib single agent therapy. The QoL scales used were the EORTC Quality of Life Questionnaire Core 30 and FACT-Melanoma Scale Score (Functional Assessment of Cancer Therapy).
The combination of bini/enco was generally well-tolerated and reported adverse events (AEs) were overall consistent with previous bini/enco combination clinical trial results in BRAF-mutant melanoma patients.

Grade 3/4 AEs which occurred in more than 5 percent of patients receiving bini/enco included increased gamma-glutamyltransferase (GGT), increased blood creatine phosphokinase (CK), and hypertension.
The incidence of AEs of special interest (toxicities commonly associated with commercially available MEK+BRAF-inhibitor treatments), for patients receiving bini/enco included: rash (23 percent), pyrexia (18 percent), retinal pigment epithelial detachment (13 percent) and photosensitivity (5 percent).
In addition, following discussions with the Independent Data Monitoring Committee (DMC), COLUMBUS clinical investigators were instructed in January 2017 to notify all study participants of the results of the trial and to offer only vemurafenib patients alternative treatments with approved MEK/BRAF inhibitors. Array expects to file an NDA for COLUMBUS in June or July, with data from both Part 1 and Part 2 of the study. We believe Pierre Fabre remains on track to file the MAA during 2017. Binimetinib and encorafenib are investigational medicines and are not currently approved in any country.

Melanoma is the fifth most common cancer among men and the sixth most common cancer among women in the United States, with more than 87,000 new cases and over 9,700 deaths from the disease expected in 2017. Novel therapies that target the RAS-RAF-MEK-ERK pathway have a strong scientific rationale for activity in this disease, as up to 50 percent of patients with metastatic melanoma have activating BRAF mutations, the most common gene mutation in this patient population. Current marketed MEK/BRAF combination agents have a run rate approaching $1 billion in annual worldwide sales.

NEMO: Global Phase 3 trial of binimetinib versus dacarbazine in NRAS-mutant melanoma patients
In September 2016, Array announced that the FDA accepted its NDA for binimetinib in NRAS-mutant melanoma, with a target action date under the Prescription Drug User Fee Act (PDUFA) of June 30, 2017. Also, the binimetinib Marketing Authorization Application (MAA) submitted by Pierre Fabre was validated and is currently under evaluation by the Committee for Medicinal Products for Human Use (CHMP). The FDA indicated that it plans to hold an advisory committee meeting (ODAC) in the first half of 2017 as part of the review process.

Activating NRAS mutations are present in approximately 20 percent of patients with metastatic melanoma, and are a poor prognostic indicator for these patients. Treatment options for this population remain limited beyond immunotherapy, and these patients face poor clinical outcomes and high mortality.

BEACON CRC: Global Phase 3 trial of binimetinib, encorafenib and Erbitux (cetuximab) versus Erbitux in BRAF-mutant colorectal cancer (CRC) patients
Array is advancing BEACON CRC, a global Phase 3 trial of encorafenib and Erbitux (cetuximab), with or without binimetinib, versus standard of care in patients with BRAF-mutant CRC who have previously received first-or second-line systemic therapy. The study includes a safety lead-in with approximately 30 patients. Enrollment in the safety lead-in continues following a planned DMC review of the initial cohort. Array expects to complete patient enrollment with the safety lead-in in March and initiate randomization of patients in April. Array continues to expect early data from the triplet lead-in later this year.

BEACON CRC was initiated based on results from a Phase 2 study of the combination of encorafenib and cetuximab, with or without alpelisib, a selective PI3K alpha inhibitor, in patients with advanced BRAF-mutant CRC, which were presented at the 2016 ASCO (Free ASCO Whitepaper) meeting. In this study mOS for these patients exceeded one year, which is more than double several historical published benchmarks for this population.

Colorectal cancer is the second most common cancer among men and third most common cancer among women in the United States, with more than 135,000 new cases and more than 50,000 deaths from the disease projected in 2017. In the United States, BRAF mutations occur in 8 to 15 percent of patients with colorectal cancer and represent a poor prognosis for these patients.

New NF1 Study: Phase 2 trial of binimetinib in patients with Neurofibromatosis Type 1 (NF1)
In collaboration with Neurofibromatosis Consortium, Array is participating in a Phase 2 study of binimetinib in children and adults with NF1 associated Plexiform Neurofibromas. The study will enroll approximately 40 NF1 patients to determine the objective response to binimetinib defined as a 20 percent or greater tumor volume reduction by MRI. In addition, duration of response, assessment of quality of life, pain, functional outcomes, and safety and tolerability will be assessed.

Results from a prior Phase 1 NF1 trial of selumetinib, a MEK inhibitor also invented at Array, were recently published in the New England Journal of Medicine, supporting further study of a MEK inhibitor in this patient population.

Non-clinical studies with MEK/PD-1
Binimetinib Enhances a Programmed Cell Death Receptor 1 (PD-1) Inhibitor Anti-Tumor Activity in Immunocompetent Preclinical Models
Array is evaluating MEK’s contribution to immunotherapy in non-clinical cancer models, including models for CRC and pancreatic cancer.

In a CRC model, the combination of binimetinib with immunotherapy demonstrates enhanced tumor growth inhibition, providing support for the potential mechanistic synergies between immunotherapy and MEK inhibition.

In a pancreatic cancer model, the combination treatment group shows enhanced survival (i.e., PFS) with the addition of binimetinib to anti-PD-1 antibody treatment, compared to single agent anti-PD-1 treatment. Definitive tumor growth inhibition and survival studies in this model are ongoing.

Given the potential to improve clinical outcomes, as supported by these non-clinical studies, Array believes that MEK / anti-PD1 combinations are appropriate regimens to study in a number of cancer indications.

ARRY-382
Phase 1/2 dose escalation study advancing with ARRY-382, a colony-stimulating factor-1 receptor (CSF-1R) inhibitor, in combination with pembrolizumab, a PD-1 antibody, for the treatment of patients with advanced solid tumors
Array is advancing a Phase 1/2 dose escalation immuno-oncology trial of ARRY-382 in combination with pembrolizumab (Keytruda), a PD-1 antibody, in patients with advanced solid tumors. ARRY-382 is a wholly-owned, highly selective and potent, small molecule inhibitor of CSF-1R kinase activity.

Enrollment in the Phase 1 portion of the trial continues following a planned DMC review of the initial dose level. Array expects to complete the Phase 1 portion of the trial in March and to initiate Phase 2 expansions in melanoma and non-small lung cancer during April.

ARRY-797 (ARRY-371797)
Phase 2 trial in patients with LMNA A/C-related dilated cardiomyopathy (LMNA-related DCM)
Based on data to date from a Phase 2 study of ARRY-797, an oral, selective p38 mitogen-activated protein kinase inhibitor, in patients with LMNA-related DCM a rare, degenerative cardiovascular disease caused by mutations in the LMNA gene and characterized by poor prognosis. Array plans to initiate a Phase 3 trial of ARRY-797 this summer as we evaluate options regarding the asset, including advancing it internally, partnering the program for further development and commercialization or creating a separate company.

SELUMETINIB
Phase 1 trial results in pediatric patients with neurofibromatosis type 1 (NF1) and plexiform neurofibromas published in the New England Journal of Medicine
In a Phase 1 clinical trial of selumetinib, a MEK inhibitor, children with the common genetic disorder neurofibromatosis type 1 (NF1) and plexiform neurofibromas, tolerated selumetinib and, in most cases, responded to it with tumor shrinkage. NF1 affects 1 in 3,000 people. The study results were published on December 29, 2016, in The New England Journal of Medicine. Selumetinib is being explored as a treatment option in registration-enabling studies in patients with NF1 and patients with differentiated thyroid cancer. Array licensed exclusive worldwide rights to selumetinib to AstraZeneca and is entitled to future potential milestones and royalties on product sales.

The trial, which included 24 patients recruited between September 2011 and February 2014, was led by the National Cancer Institute’s Pediatric Oncology Branch. Plexiform neurofibromas develop in up to 50 percent of people with NF1. The majority of these tumors, which can cause significant pain, disability, and disfigurement, are diagnosed in early childhood and grow most rapidly prior to adolescence. Complete surgical removal of the tumors is rarely feasible, and incompletely resected tumors tend to grow back.

The primary aim of this clinical trial was to evaluate the toxicity and safety of selumetinib in patients with NF1 and inoperable plexiform neurofibromas, and, encouragingly, most of the selumetinib-related toxic effects were mild. At present, no therapies are considered effective for NF1-related large plexiform neurofibromas, but, in this trial, partial responses, meaning 20 percent or more reduction in tumor volume, were observed in over 70 percent of the patients.

Responses were observed in tumors that were previously growing at a rate of greater than 20 percent per year, as well as in non-progressing lesions. Tumor shrinkage was maintained long term, for approximately two years, and as of early 2016, no disease progression had been observed in any trial participant. Patients remained on study for as long as four years. Additionally, anecdotal evidence of clinical improvement, including a decrease in tumor-related pain, improvement in motor function, and decreased disfigurement, was reported.

FINANCIAL HIGHLIGHTS
Second Quarter of Fiscal 2017 Compared to First Quarter of Fiscal 2017 (Sequential Quarters Comparison)

Revenue for the second quarter of fiscal 2017 was $44.5 million, compared to $39.3 million for the prior sequential quarter, mainly driven by earning a $6.0 million milestone from Loxo Oncology for the advancement of larotrectinib (LOXO-101), the pan-Trk inhibitor for cancer and a $2.5 million milestone from Roche for the advancement of danoprevir, the NS3/4A protease inhibitor for Hepatitis C.
Cost of partnered programs for the second quarter of fiscal 2017 was $9.0 million, compared to $8.8 million for the prior quarter.
Research and development expense was $46.5 million, compared to $46.6 million in the prior quarter.
Net loss for the second quarter was $23.3 million, or ($0.14) per share, and was $28.6 million, or ($0.20) per share in the prior quarter. The decrease in net loss was primarily due to increased milestone revenue.
Cash, Cash Equivalents and Marketable Securities as of December 31, 2016 were $214.8 million; this includes net proceeds of $124.2 million from the public offering of 21,160,000 shares of Array common stock in October 2016.
Second Quarter of Fiscal 2017 Compared to Second Quarter of Fiscal 2016 (Prior Year Comparison)

Revenue for the second quarter of fiscal 2017 increased $9.1 million compared to the same quarter of fiscal 2016. The increase was primarily due to earning a milestone from Loxo Oncology for the advancement of larotrectinib (LOXO-101), the TRK inhibitor for cancer and a milestone from Roche for the advancement of danoprevir, the NS3 protease inhibitor for Hepatitis C.
Cost of partnered programs increased $3.4 million compared to the second quarter of fiscal 2016. The increase was primarily due to costs incurred on the BEACON CRC trial.
Research and development expense increased $5.1 million, compared to the second quarter of fiscal 2016. The increase was due to binimetinib and encorafenib expenses as we transitioned activity from the "Novartis Agreements."
Net loss for the second quarter of fiscal 2017 was $23.3 million, or ($0.14) per share, and was $24.2 million, or ($0.17) per share, for the same quarter in fiscal 2016.
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Regeneron Reports Fourth Quarter and Full Year 2016 Financial and Operating Results

On February 9, 2017 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported financial results for the fourth quarter and full year 2016 and provided a business update (Press release, Regeneron, FEB 9, 2017, View Source [SID1234517671]).

Financial Highlights
($ in millions, except per share data)

Three Months Ended
December 31,

Year Ended
December 31,

2016

2015*

% Change

2016

2015*

% Change
EYLEA U.S. net product sales

$
858

$
746

15
%

$
3,323

$
2,676

24
%
Total revenues

$
1,227

$
1,098

12
%

$
4,860

$
4,104

18
%
GAAP net income

$
253

$
155

63
%

$
896

$
636

41
%
GAAP net income per share – diluted

$
2.19

$
1.34

63
%

$
7.70

$
5.52

39
%
Non-GAAP net income(2)

$
353

$
258

37
%

$
1,319

$
944

40
%
Non-GAAP net income per share –
diluted(2)

$
3.04

$
2.23

36
%

$
11.32

$
8.12

39
%

* See Table 3 of this press release for an explanation of revisions made to 2015 non-GAAP amounts previously reported.

"The hard work of our scientists over the last decades has brought Regeneron to the next phase of our evolution – this year we anticipate launching two additional important therapies, significantly expanding our impact for patients with serious diseases and our company’s growth potential," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "In March, we look forward to the potential U.S. approval of Dupixent, our innovative and breakthrough IL4/13 blocking antibody, in adults with atopic dermatitis. We believe Dupixent may have the potential to help additional patients with serious allergic diseases, with pivotal Phase 3 data in adult asthma patients expected later this year. We are also studying Dupixent in patients with nasal polyps and pediatric patients with asthma or atopic dermatitis."

Business Highlights

Marketed Product Update
EYLEA (aflibercept) Injection for Intravitreal Injection

In the fourth quarter of 2016, net sales of EYLEA in the United States increased 15% to $858 million from $746 million in the fourth quarter of 2015. For the full year of 2016, net sales of EYLEA in the United States increased 24% to $3.323 billion from $2.676 billion for the full year 2015. Overall distributor inventory levels remained within the Company’s one- to two-week targeted range.
Bayer commercializes EYLEA outside the United States. In the fourth quarter of 2016, net sales of EYLEA outside of the United States(1) were $496 million, compared to $413 million in the fourth quarter of 2015. In the fourth quarter of 2016, Regeneron recognized $165 million from its share of net profit from EYLEA sales outside the United States, compared to $140 million in the fourth quarter of 2015. For the full year of 2016, net sales of EYLEA outside of the United States(1) were $1.872 billion, compared to $1.413 billion for the full year 2015. For the full year of 2016, Regeneron recognized $649 million from its share of net profit from EYLEA sales outside the United States, compared to $467 million for the full year 2015.
Praluent (alirocumab) Injection for the Treatment of Elevated Low-Density Lipoprotein (LDL) Cholesterol

In the fourth quarter of 2016, global net sales of Praluent were $41 million, compared to $7 million in the fourth quarter of 2015. For the full year of 2016, global net sales of Praluent were $116 million, compared to $11 million for the full year 2015. Product sales for Praluent are recorded by Sanofi, and the Company shares in any profits or losses from the commercialization of Praluent. Praluent was launched in the United States in the third quarter of 2015 and in certain countries in the European Union commencing in the fourth quarter of 2015.
On January 5, 2017, the United States District Court for the District of Delaware issued a permanent injunction prohibiting the Company and Sanofi from marketing, selling, or manufacturing Praluent in the United States. On February 8, 2017, the United States Court of Appeals for the Federal Circuit stayed (suspended) the injunction pending appeal. This ruling means that Regeneron and Sanofi will continue marketing, selling, and manufacturing Praluent in the United States during the appeal process.
In the fourth quarter of 2016, the European Commission approved a Praluent dosing regimen of 300mg every 4 weeks. In January 2017, the U.S. Food and Drug Administration (FDA) extended the review period for the supplemental Biologics License Application (sBLA) for a monthly dosing regimen of Praluent. The FDA determined that Regeneron’s and Sanofi’s responses to information requested by the FDA during its review of the sBLA was a major amendment, which results in a three month extension of the Prescription Drug User Fee Act (PDUFA) date to allow time for the FDA to review the additional information. The new target action date is April 24, 2017.
The ODYSSEY OUTCOMES trial remains ongoing, and is assessing the potential of Praluent to demonstrate cardiovascular benefit. In November 2016, an independent Data Monitoring Committee (DMC) completed a second pre-specified interim analysis. Based on the results of this analysis, the DMC recommended the trial continue as planned. The DMC will continue to monitor the ongoing safety and efficacy of Praluent in the trial.
Pipeline Progress
Regeneron has sixteen product candidates in clinical development. These consist of EYLEA and fifteen fully human monoclonal antibody product candidates generated using the Company’s VelocImmune technology, including six in collaboration with Sanofi. In addition to EYLEA and Praluent, highlights from the antibody pipeline include:

Sarilumab, the Company’s antibody targeting IL-6R for rheumatoid arthritis.

In January 2017, Health Canada approved KevzaraTM (sarilumab) for the treatment of adult patients with moderately to severely active rheumatoid arthritis who have an inadequate response to or intolerance to one or more biologic or non-biologic Disease-Modifying Anti-Rheumatic Drugs (DMARDs). This is the first approval of Kevzara worldwide.
In July 2016, the European Medicines Agency (EMA) accepted for review the Marketing Authorization Application (MAA) for sarilumab. In addition, in October 2016, an application for marketing approval for sarilumab was submitted in Japan.
On October 28, 2016, the Company and Sanofi announced that the FDA issued a Complete Response Letter (CRL) regarding the BLA for sarilumab. The CRL refers to certain deficiencies identified during a routine good manufacturing practice inspection of the Sanofi fill-and-finish facility in Le Trait, France.
In the first quarter of 2017, the Company expects to resubmit the sarilumab BLA, contingent upon successful completion of the pre-approval inspection for Dupixent, and anticipates a two-month review cycle for sarilumab with an action date in the second quarter of 2017. Refer to "Sanofi’s Le Trait Facility Update" section below for further information.
In November 2016, the Company and Sanofi presented additional results from the Phase 3 SARIL-RA-MONARCH study, which demonstrated the superiority of sarilumab monotherapy versus adalimumab (marketed by AbbVie Inc. as HUMIRA) monotherapy in improving the clinical signs and symptoms in adults with active rheumatoid arthritis at the American College of Rheumatology (ACR) Annual Meeting.
Dupixent (dupilumab), the Company’s antibody that blocks signaling of IL-4 and IL-13, is currently being studied in atopic dermatitis, asthma, nasal polyps, and eosinophilic esophagitis.

The FDA previously designated Dupixent as a Breakthrough Therapy for the treatment of adult patients with inadequately controlled moderate-to-severe atopic dermatitis, and in September 2016, accepted the BLA for priority review with a target action date of March 29, 2017.
In October 2016, the FDA granted Breakthrough Therapy designation for Dupixent for the treatment of moderate to severe (12 to less than 18 years of age) and severe (6 months to less than 12 years of age) atopic dermatitis in pediatric patients who are not adequately controlled with, or who are intolerant to, topical medication.
In October 2016, additional data from LIBERTY AD SOLO 1 and SOLO 2 atopic dermatitis studies of Dupixent were presented at the European Academy of Dermatology and Venereology conference and simultaneously published in the New England Journal of Medicine.
In December 2016, the EMA accepted for review the MAA for Dupixent for the treatment of adults with moderate-to-severe atopic dermatitis who are candidates for systemic therapy.
The pivotal Phase 3 LIBERTY ASTHMA QUEST study of dupilumab for the treatment of asthma completed enrollment during the third quarter of 2016.
A Phase 3 study of dupilumab for the treatment of nasal polyps was initiated in the fourth quarter of 2016.
Sanofi’s Le Trait Facility Update

Sanofi’s facility in Le Trait, France conducts fill-and-finish activities for certain products, including sarilumab and dupilumab.
The FDA has reclassified the Le Trait fill-and-finish facility as "acceptable" based on review of responses to an FDA Form 483.
A pre-approval inspection for Dupixent has been scheduled for the first quarter of 2017.
REGN2810, the Company’s antibody to programmed cell death protein 1 (PD-1), is being studied in patients with cancer. A Phase 2 potentially pivotal study for the treatment of advanced cutaneous squamous cell carcinoma, as well as various Phase 1 studies, continue to enroll patients.

Fasinumab, the Company’s antibody targeting Nerve Growth Factor (NGF), is being studied in patients with pain due to osteoarthritis and chronic low back pain.

In October 2016, the FDA placed the Phase 2b study of fasinumab in chronic low back pain on clinical hold and requested an amendment of the study protocol; this was based on the FDA’s recommendation that patients with advanced osteoarthritis at baseline not receive higher doses of fasinumab. Following this development, the Company completed an unplanned analysis which showed clear evidence of efficacy with improvement in pain scores in all fasinumab groups compared to placebo at the 8- and 12-week time points, and preliminary safety results are generally consistent with what has been previously reported with the class. The Company and Teva plan to design pivotal Phase 3 studies in chronic low back pain.
In October 2016, the Company announced that at the 36-week analysis of the Phase 2/3 clinical study of fasinumab in patients with moderate-to-severe osteoarthritis pain of the hip or knee, the incidence of adjudicated arthropathies was found to be potentially dose-dependent, with a higher rate of patients experiencing arthropathies in the higher dose groups. In the ongoing fasinumab osteoarthritis pivotal Phase 3 program, the Company and Teva are planning to advance only the lower doses from the Phase 2/3 study, subject to discussion with the FDA and other health authorities.
Nesvacumab, an antibody to Ang2 co-formulated with aflibercept for intravitreal injection, is currently being studied in patients with neovascular age-related macular degeneration (wet AMD) and diabetic macular edema (DME). The Phase 2 RUBY study of nesvacumab/aflibercept for the treatment of DME completed enrollment during the fourth quarter of 2016, and the Phase 2 ONYX study of nesvacumab/aflibercept for the treatment of wet AMD completed enrollment during the first quarter of 2017.

REGN3767, an antibody to Lymphocyte Activation Gene 3 (LAG-3) protein, entered Phase 1 clinical development for treatment of advanced malignancies in the fourth quarter of 2016.

REGN2477, an antibody to Activin A, received orphan drug designation from the FDA for the treatment of Fibrodysplasia Ossificans Progressiva (FOP) in the first quarter of 2017.

Select Upcoming 2017 Milestones

Programs

Milestones
Praluent

Complete ODYSSEY OUTCOMES study
Sarilumab (IL-6R Antibody)

Re-submission of the BLA in the first quarter of 2017 contingent upon successful FDA re-inspection of Le Trait facility. FDA action would then be expected in the second quarter of 2017.

Submission for additional regulatory approvals and regulatory agency decisions on applications outside of the United States
Dupilumab (IL-4R Antibody)

FDA target action date of March 29, 2017 for atopic dermatitis

Report results from Phase 3 asthma study

Submit sBLA for asthma in adults

Report results from Phase 2 study in eosinophilic esophagitis

Initiate Phase 3 studies in pediatric patients in atopic dermatitis and asthma

Initiate Phase 2 study in food allergies
REGN2222 (RSV-F Antibody)

Report results from Phase 3 study
Fasinumab (NGF Antibody)

Initiate additional Phase 3 study in patients with osteoarthritis pain

Initiate Phase 3 study in chronic low back pain
REGN2810 (PD-1 Antibody)

Initiate Phase 2 study in non-small cell lung cancer

Initiate Phase 2 study in basal cell carcinoma
Nesvacumab/aflibercept (Ang2 Antibody co-formulated with aflibercept)

Report data from Phase 2 studies in DME and wet AMD

Fourth Quarter and Full Year 2016 Financial Results

Product Revenues: Net product sales were $863 million in the fourth quarter and $3.338 billion for the full year 2016, compared to $750 million in the fourth quarter and $2.689 billion for the full year 2015. EYLEA net product sales in the United States were $858 million in the fourth quarter and $3.323 billion for the full year 2016, compared to $746 million in the fourth quarter and $2.676 billion for the full year 2015.

Total Revenues: Total revenues, which include product revenues described above, increased by 12% to $1.227 billion in the fourth quarter of 2016, compared to $1.098 billion in the fourth quarter of 2015. Total revenues also include Sanofi and Bayer collaboration revenues of $313 million in the fourth quarter of 2016, compared to $330 million in the fourth quarter of 2015. Full year 2016 total revenues increased by 18% to $4.860 billion, compared to $4.104 billion for the full year 2015, and included collaboration revenues of $1.403 billion for the full year 2016, compared to $1.339 billion for the full year 2015. Refer to Table 4 for a summary of collaboration revenue.

Research and Development (R&D) Expenses: In 2016, GAAP R&D expenses were $479 million in the fourth quarter and $2.052 billion for the full year, compared to $461 million in the fourth quarter and $1.621 billion for the full year 2015. The higher R&D expenses for the full year 2016 compared to the full year 2015 were principally due to the $75 million up-front payment made in connection with the April 2016 license and collaboration with Intellia, the $25 million up-front payment made in connection with the July 2016 license and collaboration agreement with Adicet, higher development costs, including manufacturing drug supplies, primarily related to fasinumab and REGN2810, and higher headcount to support the Company’s increased R&D activities, partly offset by lower development costs primarily related to Praluent. In addition, in 2016, R&D-related non-cash share-based compensation expense was $75 million for the fourth quarter and $313 million for the full year, compared to $73 million in the fourth quarter and $256 million for the full year 2015.

Selling, General, and Administrative (SG&A) Expenses: In 2016, GAAP SG&A expenses were $326 million in the fourth quarter and $1.178 billion for the full year, compared to $295 million in the fourth quarter and $839 million for the full year 2015. The higher SG&A expenses for the full year 2016 compared to the full year 2015 were primarily due to higher commercialization-related expenses in connection with EYLEA and Praluent, higher commercialization-related expenses in connection with preparing to launch sarilumab and dupilumab, and higher headcount. In addition, in 2016, SG&A-related non-cash share-based compensation expense was $74 million for the fourth quarter and $231 million for the full year, compared to $82 million in the fourth quarter and $193 million for the full year 2015.

Cost of Goods Sold (COGS): In 2016, GAAP COGS was $45 million in the fourth quarter and $195 million for the full year, compared to $71 million in the fourth quarter and $242 million for the full year 2015. COGS decreased principally due to a decrease in royalties since the Company’s obligation to pay Genentech based on U.S. sales of EYLEA ended in May 2016, partly offset by an increase in various start-up costs in connection with the Company’s Limerick, Ireland commercial manufacturing facility and an increase in U.S. EYLEA net sales.

Cost of Collaboration and Contract Manufacturing (COCM): In 2016, GAAP COCM was $30 million in the fourth quarter and $105 million for the full year, compared to $40 million in the fourth quarter and $151 million for the full year 2015. COCM decreased primarily due to lower royalties since the Company’s obligation to pay Genentech based on sales of EYLEA outside the United States also ended in May 2016.

Income Tax Expense: In the fourth quarter of 2016, GAAP income tax expense was $88 million and the effective tax rate was 25.9%, compared to $72 million and 31.8% in the fourth quarter of 2015. In 2016, GAAP income tax expense was $434 million and the effective tax rate was 32.7% for the full year, compared to $589 million and 48.1% for the full year 2015. The effective tax rates for the both the fourth quarter and full year of 2016 were positively impacted, compared to the U.S. federal statutory rate, primarily by the tax benefit associated with stock-based compensation, partly offset by the negative impact of losses incurred in foreign jurisdictions with rates lower than the federal statutory rate. As described in Table 3 of this press release, the Company adopted Accounting Standards Update 2016-09 (ASU 2016-09), Compensation – Stock Compensation, Improvements to Employee Share-Based Payment Accounting, during the second quarter of 2016. ASU 2016-09 requires companies to recognize all excess tax benefits and tax deficiencies in connection with stock-based compensation as income tax expense or benefit in the income statement (previously, excess tax benefits were recognized in additional paid-in capital on the balance sheet).

GAAP and Non-GAAP Net Income: The Company reported GAAP net income of $253 million, or $2.41 per basic share and $2.19 per diluted share, in the fourth quarter of 2016, compared to GAAP net income of $155 million, or $1.49 per basic share and $1.34 per diluted share, in the fourth quarter of 2015. The Company reported GAAP net income of $896 million, or $8.55 per basic share and $7.70 per diluted share, for the full year 2016, compared to GAAP net income of $636 million, or $6.17 per basic share and $5.52 per diluted share, for the full year 2015.

The Company reported non-GAAP net income of $353 million, or $3.35 per basic share and $3.04 per diluted share, in the fourth quarter of 2016, compared to non-GAAP net income of $258 million, or $2.48 per basic share and $2.23 per diluted share, in the fourth quarter of 2015. The Company reported non-GAAP net income of $1.319 billion, or $12.60 per basic share and $11.32 per diluted share, for the full year 2016, compared to non-GAAP net income of $944 million, or $9.16 per basic share and $8.12 per diluted share, for the full year 2015.

A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

Tarrytown, New York Facilities Update: On December 30, 2016, the Company entered into a Purchase Agreement with BMR-Landmark at Eastview LLC and BMR-Landmark at Eastview IV LLC (collectively, BMR), pursuant to which the Company has agreed to purchase from BMR its Tarrytown, New York facilities (the Facility), which includes laboratory and office space the Company’s currently leases, for a purchase price of $720 million. The closing of the Purchase Agreement is anticipated in the first quarter of 2017.

The Company intends to fund the acquisition contemplated by the Purchase Agreement with a new financing; accordingly, the Company has entered into an engagement letter with Banc of America Leasing & Capital, LLC (BAL) to arrange a $720 million lease financing in connection with this acquisition. Immediately thereafter, the Company intends to lease the Facility from an affiliate of BAL for a term of five years. At the end of the lease term, the Company expects to have an option to extend the term of the lease, purchase the Facility at a predetermined amount, or sell the Facility to a third party on behalf of BAL.

2017 Financial Guidance(3)

The Company’s full year 2017 financial guidance consists of the following components:

EYLEA U.S. net product sales
Single digit percentage growth over 2016
Sanofi reimbursement of Regeneron
commercialization-related expenses
$400 million – $450 million
Non-GAAP unreimbursed R&D(2) (4)
$950 million – $1.025 billion
Non-GAAP SG&A(2) (4)
$1.175 billion – $1.250 billion
Effective tax rate
32% – 38%
Capital expenditures
$375 million – $450 million

(1)
Regeneron records net product sales of EYLEA in the United States. Outside the United States, EYLEA net product sales comprise sales by Bayer in countries other than Japan and sales by Santen Pharmaceutical Co., Ltd. in Japan under a co-promotion agreement with an affiliate of Bayer. The Company recognizes its share of the profits (including a percentage on sales in Japan) from EYLEA sales outside the United States within "Bayer collaboration revenue" in its Statements of Operations.

(2)
This press release uses non-GAAP net income, non-GAAP net income per share, non-GAAP unreimbursed R&D, and non-GAAP SG&A, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). These non-GAAP financial measures are computed by excluding certain non-cash and other items from the related GAAP financial measure. Non-GAAP adjustments also include the income tax effect of reconciling items.

The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate from period to period based on factors that are not within the Company’s control, such as the Company’s stock price on the dates share-based grants are issued. Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company’s core business operations. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company’s non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company’s historical GAAP to non-GAAP results is included in Table 3 of this press release.

(3)
The Company’s 2017 financial guidance does not assume the completion of any significant business development transactions not completed as of the date of this press release and assumes that Praluent will remain on the market throughout 2017.

(4)
A reconciliation of full year 2017 non-GAAP to GAAP financial guidance is included below:

Projected Range
(In millions)

Low

High
GAAP unreimbursed R&D (5)

$
1,250

$
1,345

R&D: Non-cash share-based compensation expense

(300)

(320)

Non-GAAP unreimbursed R&D

$
950

$
1,025

GAAP SG&A

$
1,380

$
1,485

SG&A: Non-cash share-based compensation expense

(205)

(235)

Non-GAAP SG&A

$
1,175

$
1,250

(5)
Unreimbursed R&D represents R&D expenses reduced by R&D expense reimbursements from the Company’s collaborators and/or customers.