On February 23, 2017 Radius Health, Inc. ("Radius" or the "Company") (Nasdaq:RDUS), a science-driven biopharmaceutical company that is committed to developing innovative therapeutics in the areas of osteoporosis, oncology and endocrine diseases, reported its financial results for the fourth quarter and full year ended December 31, 2016, and provided a business update (Press release, Radius, FEB 23, 2017, View Source [SID1234517813]). As of December 31, 2016, Radius had $332.4 million in cash, cash equivalents and marketable securities.

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"We continue to work closely with the U.S. Food and Drug Administration as we move towards the March 30, 2017 PDUFA for abaloparatide-SC for postmenopausal osteoporosis. Our highly experienced leadership is completing the build out of our commercial organization with seasoned talent who have demonstrated success across sales, marketing, reimbursement and distribution and are fully prepared to support a successful launch, pending favorable regulatory review," said Robert Ward, President and Chief Executive Officer of Radius. "2017 will be a major inflection point for Radius, as we evolve towards a commercial company. We are confident that we are prepared for this change and have the talent, experience and resources required to deliver sustainable high performance."

Pipeline Updates

Abaloparatide-SC

Radius’ new drug application (NDA) in the United States for abaloparatide-SC for the treatment of postmenopausal women with osteoporosis was accepted for filing by the FDA and granted a Prescription Drug User Fee Act (PDUFA) date of March 30, 2017. Radius’ marketing authorisation application (MAA) to the European Medicines Agency (EMA), is currently undergoing regulatory review, and we anticipate receiving an opinion from the Committee for Medicinal Products for Human Use (CHMP) in 2017.

On February 1, 2017, results from the first six months of the recently completed 24- month ACTIVExtend trial were published in the Mayo Clinic Proceedings "Eighteen Months of Treatment With Subcutaneous Abaloparatide Followed by 6 Months of Treatment With Alendronate in Postmenopausal Women With Osteoporosis: Results of the ACTIVExtend Trial". The 24-month ACTIVExtend clinical trial has completed and Radius will report the top line results in the second quarter of 2017.

Abaloparatide-SC as a treatment for postmenopausal women with osteoporosis is an investigational product and its safety and efficacy have not been established.

Abaloparatide-TD

Last September, at the annual meeting of the American Association for Bone Mineral Research (ASBMR), we presented the positive results from a human replicative clinical evaluation of an optimized abaloparatide transdermal patch. These results established an important demonstration of how we have changed the pharmacokinetic profile in our program to develop a bioequivalent transdermal patch. Currently, we are focused on completing the manufacturing, scale-up, and other required activities needed to initiate a pivotal study to evaluate bioequivalence to abaloparatide-SC. We believe that the transdermal patch program has the potential to allow physicians who treat osteoporosis, but rarely use injectable drugs, an opportunity to expand their practices to include the use of anabolic therapy.

RAD1901

On December 8, 2016, at the San Antonio Breast Cancer symposium we reported on the encouraging results of our ongoing Phase 1 studies of RAD1901 in advanced breast cancer. We were pleased with the clear demonstration of activity at the 400 mg dose in this heavily pretreated patient population. We plan to engage with regulatory agencies to gain alignment on defining the next steps for the program in the first half of 2017, which would include the design of a Phase 2 trial. Also in the first half of this year, we plan to report results from our completed Phase 2b trial in vasomotor symptoms.

RAD140

In December 2016, we submitted an investigational new drug application, or IND, to the FDA for RAD140, a selective androgen receptor modulator discovered in-house at Radius. We expect to initiate a first-in-human Phase 1 clinical trial in women with hormone receptor positive breast cancer in 2017.

Building A Commercial Organization For Sustainable Growth

In our evolution towards becoming a fully integrated biopharmaceutical company, our accomplished senior leadership is completing the build out of our commercial, medical and compliance organizations to support the potential commercialization of abaloparatide-SC in the United States, pending favorable regulatory review. Our sales leaders have already hired over 90% of our clinical sales specialists with a focus on identifying the most experienced team possible. The result is a sales team with substantial osteoporosis, injectable and women’s health experience, and the majority have had prior launch experience, which matches the depth of experience across our Medical Science Liaison team.

If approved, we intend to distribute abaloparatide-SC in the United States through a network of distributors and specialty pharmacies. Under this distribution model, both the distributors and specialty pharmacies would take physical delivery of product and the specialty pharmacies would dispense the product directly to patients.

Under the leadership of our Chief Compliance Officer, we are continuing to strengthen our compliance program in support of launch of abaloparatide-SC as part of our commitment to a strong culture of compliance and good corporate governance.

Radius Expects the Following Upcoming Milestones

Abaloparatide-SC
-FDA PDUFA date of March 30, 2017
-Receive a CHMP opinion regarding the EMA’s review of the abaloparatide-SC MAA in 2017
-Enter into a partnership for the potential commercialization of abaloparatide-SC prior to commercial launch
-Report top-line results from the recently completed 24-month ACTIVExtend clinical trial in the second quarter of 2017
RAD1901
-Complete ongoing Phase 1 breast cancer clinical trials
-Engage with regulatory authorities in 1H 2017 to gain alignment on defining next steps for the program, which would include the design of a Phase 2 breast cancer trial
-In 1H 2017, complete, and report results from, our ongoing Phase 2b vasomotor trial
RAD140
-Initiate a first-in-human Phase 1 study in 2017 in women with hormone receptor positive breast cancer
Radius Expects To Make Presentations at the Following Upcoming Conferences

On March 6, 2017, Radius President and CEO, Robert Ward will make a presentation and will host one-on-ones at the Cowen Conference in Boston
On March 24-25, 2017, at the 2017 World Congress of Osteoporosis, Osteoarthritis and Musculoskeletal Diseases (WCO-IOF-ESCEO), 4 scientific presentations will be made on abaloparatide titled:

-"Effects of abaloparatide-SC on bone mineral density and risk of fracture in postmenopausal women aged 80 years or older with osteoporosis"
-"Abaloparatide-SC decreases vertebral, nonvertebral, major osteoporotic, and wrist fractures in a subset of postmenopausal women at high risk of fracture by FRAX score"
-"Abaloparatide-SC for postmenopausal osteoporosis: analysis of the number needed to treat compared with teriparatide"
-"Abaloparatide-SC significantly reduces vertebral and nonvertebral fractures and increases bone mineral density regardless of baseline risk: results from the ACTIVE phase 3 clinical trial"
Fourth Quarter 2016 Financial Results

For the three months ended December 31, 2016, Radius reported a net loss of $52.7 million, or $1.22 per share, as compared to a net loss of $33.2 million, or $0.77 per share, for the three months ended December 31, 2015. The increase in net loss for the three months ended December 31, 2016 as compared to the three months ended December 31, 2015 was primarily due to an increase in research and development and general and administrative expenses, partially offset by a decrease in loss on retirement of note payable, a decrease in interest expense and an increase in interest income.

Research and development expenses for the three months ended December 31, 2016 were $25.6 million, compared to $22.2 million for the same period in 2015. This increase was primarily driven by higher research and development costs associated with the development of RAD1901 to support a Phase 1 study in metastatic breast cancer that commenced in late 2014 and a Phase 2b study in postmenopausal vasomotor symptoms that commenced in December 2015. This increase was also a result of an increase in compensation expense, including stock-based compensation, due to an increase in headcount from December 31, 2015 to December 31, 2016.

General and administrative expenses for the three months ended December 31, 2016 were $27.5 million, compared to $11.6 million for the same period in 2015. This increase was primarily attributable to an increase in professional support costs, including the costs associated with increasing headcount and preparing for the potential commercialization of abaloparatide-SC, subject to a favorable regulatory review. This increase was also driven by an increase in compensation expense, including stock-based compensation, due to an increase in headcount from December 31, 2015 to December 31, 2016.

Full Year 2016 Financial Results

For the twelve months ended December 31, 2016, Radius reported a net loss of $182.8 million, or $4.24 per share, as compared to a net loss of $101.5 million, or $2.56 per share, for the twelve months ended December 31, 2015. The increase in net loss for 2016 was primarily due to an increase in research and development expenses and general and administrative expenses, partially offset by a decrease in loss on retirement of note payable, a decrease in interest expense and an increase in interest income.

Research and development expenses for the twelve months ended December 31, 2016 were $107.4 million, compared to $68.3 million for 2015. The increase was primarily attributable to increased compensation expense, including an increase of $3.3 million of non-cash stock-based compensation expense, due to growth in headcount from 48 research and development employees as of December 31, 2015, to 107 research and development employees as of December 31, 2016. This increase was also driven by higher contract service costs associated with the development of our investigational product candidate RAD1901 as a result of the increased clinical and manufacturing activities in 2016, as compared to 2015. These increases were partially offset by a decrease in the total professional contract service costs associated with the development of abaloparatide-SC as more subjects completed study protocol activities associated with the 24-month ACTIVExtend clinical trial in 2016, as compared to 2015.

General and administrative expenses for the twelve months ended December 31, 2016 were $77.5 million, compared to $30.8 million for 2015. This increase was primarily due to increased professional support costs of approximately $19.4 million, including costs associated with preparing for the potential commercialization of abaloparatide-SC, subject to a favorable regulatory review, as compared to 2015. This increase was also driven by increased compensation expense, including an increase of $8.0 million of non-cash stock-based compensation expense, due to growth in headcount from 27 general and administrative employees as of December 31, 2015, to 130 general and administrative employees as of December 31, 2016.

For the twelve months ended December 31, 2016, the decrease in loss on retirement of note payable was $1.6 million and other expenses increased by $0.3 million. These amounts were partially offset by the increase in interest income from investments of $1.4 million and a decrease in interest expense of $1.9 million.

As of December 31, 2016, Radius had $332.4 million in cash, cash equivalents and marketable securities. Based upon Radius’ cash, cash equivalents and marketable securities balance, Radius believes that, prior to the consideration of revenue from the potential future sales, subject to favorable regulatory review, of any of its investigational products, it has sufficient capital to fund its development plans, U.S. commercial scale-up and other operational activities for not less than twelve months from the date of this press release and into 2018.

On February 23, 2017 OncoSec Medical Incorporated ("OncoSec") (NASDAQ: ONCS), a company developing DNA-based intratumoral cancer immunotherapies, reported new positive clinical data from a Phase II Investigator Sponsored Trial assessing the combination of OncoSec’s investigational intratumoral therapy, ImmunoPulse IL-12, and the approved anti-PD- 1 therapy (pembrolizumab), in patients with unresectable metastatic melanoma (Press release, OncoSec Medical, FEB 23, 2017, View Source [SID1234517812]). The results of this single-arm, open-label trial, which was led by the University of California, San Francisco (UCSF), indicated that ImmunoPulse IL-12 can increase response rates in patients who are not expected to respond to anti-PD-1 therapy alone.

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The trial is evaluating the following key endpoints: best overall response rate (BORR) by Response Evaluation Criteria in Solid Tumors (RECIST) v1.1 and immune-related Response Criteria; safety and tolerability; duration of response; 24-week landmark progression-free survival (PFS); median PFS; and overall survival (OS). The study results showed an overall response rate (ORR) at 24 weeks of 43% (9/21), and BORR of 48% by RECIST v1.1. There were 24% (5/21) complete responders (CR), 19% (4/22) partial responders (PR), and 9% (2/21) stable disease (SD) for a total disease control rate of 52% (11/21). These data are consistent with, and expand upon, previously reported preclinical and clinical data that provide a strong rationale for combining ImmunoPulse IL-12 with anti-PD-1 blockade.

"Collectively, these data suggest that intratumoral IL-12 DNA with electroporation in combination with pembrolizumab can effectively alter the tumor microenvironment by triggering adaptive resistance," said Alain Algazi, M.D., the study’s lead investigator, and skin cancer specialist in the Melanoma Center at the UCSF Helen Diller Family Comprehensive Cancer Center. "This increases the substrate for a therapeutic PD-1/PD-L1 blockade while driving systemic anti-tumor immunity and concordant clinical responses in patients unlikely to benefit from anti-PD-1 monotherapy."

Dr. Algazi presented the study findings today in an oral presentation titled, "Immune monitoring outcomes of patients with stage III/IV melanoma treated with a combination of pembrolizumab and intratumoral plasmid interleukin 12 (pIL-12)" (Abstract #78), at the ASCO (Free ASCO Whitepaper)-SITC Clinical Immuno-Oncology Symposium in Orlando, FL.

In this trial, a biomarker that has previously been shown to be predictive of response to checkpoint inhibitor therapy was used to enroll 22 patients who have a low likelihood of responding to an anti-PD-1 therapy. These patients were treated with the combination of intravenous pembrolizumab and ImmunoPulse IL-12 for more than 24 weeks.

The combination therapy continued to demonstrate a favorable safety profile and was well tolerated. Importantly, of the 22 patients enrolled, nine had previous checkpoint inhibitor therapy; ORR for this subset of patients was 33% (3/9).

Comprehensive immune monitoring of blood and tissue samples showed that the combination of ImmunoPulse IL-12 with pembrolizumab produces a safe and powerful systemic immune response. This response leads to an increase in tumor-specific CD8+ T-cells and an "adaptive immune resistance" that broadly supports an immune-directed mechanism that is differentiated between responders and non-responders. Analysis of the biomarker data suggests that the combination of ImmunoPulse IL-12 with pembrolizumab is transforming "cold" tumors, which would be predicted to not respond to anti-PD-1 therapy, into "hot" tumors, thus increasing the potential for a meaningful clinical response to the checkpoint inhibitor therapy. Moreover, an analysis of pre-treatment samples using various analytical methods that have also been demonstrated to predict response to anti-PD-1 therapy, including immunohistochemistry (IHC) and RNA expression of critical immune-related genes by NanoString, correlate with the predictive biomarker used to enroll patients for this study.

"OncoSec’s vision to bring intratumoral gene therapies to the oncology market continues to advance with these positive, impactful data, which hold immense promise for cancer patients who are unlikely to benefit from immunotherapy," said Punit Dhillon, OncoSec President and CEO. "These results provide a strong foundation for our planned Phase II registration trial, which will evaluate the combination of ImmunoPulse IL-12 and an anti-PD-1 therapy in melanoma patients who have previously failed an approved anti-PD-1 therapy alone. We expect to initiate this study later in 2017."

The full-text abstract is available and can be viewed on ASCO (Free ASCO Whitepaper)-SITC’s website at www.immunosym.org. The presentation is available in the Publications section of OncoSec’s website.

About the ASCO (Free ASCO Whitepaper)-SITC Clinical Immuno-Oncology Symposium
The ASCO (Free ASCO Whitepaper)-SITC Clinical Immuno-Oncology Symposium is a three-day meeting focused on clinical and translational research in immuno-oncology and the implications for clinical care. This is a new meeting, one that will address the high level of need for clinical education in a field where all aspects of care are fundamentally different from traditional therapies. For more information, please visit www.immunosym.org.

On February 23, 2017 Incyte Corporation (Nasdaq:INCY) reported a multi-year research collaboration with the Abramson Cancer Center at the University of Pennsylvania (Press release, Incyte, FEB 23, 2017, View Source [SID1234517809]). Through this collaboration, Incyte and Abramson have agreed to bring together the knowledge and expertise of their leading drug discovery and development scientists to conduct collaborative research aimed at advancing the understanding of cancer biology and fostering innovative science in immunotherapy.

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Under the collaboration, Penn investigators will leverage their expertise in preclinical biology and translational science to investigate the novel therapeutics being discovered at Incyte and better understand their mechanisms of action—further developing the clinical rationales for combination therapy and patient selection. Additionally, in a combined effort to better define the relationships between human tumor characteristics and immune cell infiltration and function, Incyte and Penn will work together to develop a bioinformatics program in clinical immunotherapy aimed at fostering the advancement of novel therapeutics.

During the period of the collaboration, Incyte will provide financial support for these research programs and may also conduct additional grant-funded research with Penn investigators in other innovative areas of cancer immunology.
"Incyte and Abramson are mutually committed to the advancement of science and improving the lives of patients with cancer. This alliance will allow us to mobilize two groups of leading scientists toward the collective goal of advancing the field of immunotherapy," said Reid Huber, Ph.D., Chief Scientific Officer at Incyte. "We are excited for the opportunity to partner with the world-class researchers at Abramson and investigate new avenues for the treatment of patients with cancer."

On February 23, 2017 Emergent BioSolutions Inc. (NYSE:EBS) reported financial results for the quarter and twelve months ended December 31, 2016 (Press release, Emergent BioSolutions, FEB 23, 2017, View Source [SID1234517807]).

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2016 FINANCIAL HIGHLIGHTS (1) (2)

(in millions) 4Q 2016 CY 2016
Combined & Continuing
Operations Basis Combined
Basis Continuing Operations
Basis
Total Revenues $ 151.7 $ 510.2 $ 488.8
Net Income $ 32.3 $ 51.8 $ 62.5
Adjusted Net Income (3) $ 36.6 $ 73.1 $ 77.5
EBITDA (3) $ 61.3 $ 111.5 $ 141.7
(1) The presentation of Emergent’s financial performance using the "Combined Basis" method includes the impact of the operations associated with the Company’s former biosciences business which was spun-off into a separate publicly traded company, Aptevo Therapeutics Inc., on August 1, 2016. The presentation of Emergent’s financial performance using the "Continuing Operations Basis" method excludes the impact of the operations of Aptevo.

(2) See "Reconciliation of Statement of Operations" for a reconciliation of the Company’s Statement of Operations for the Three and Twelve Months Ended December 31, 2016 on a continuing operations basis to that on a combined basis.

(3) See "Reconciliation of Net Income to Adjusted Net Income and EBITDA" for a definition of terms and a reconciliation table.

2016 BUSINESS ACCOMPLISHMENTS

Signed a follow-on contract with the Centers for Disease Control and Prevention (CDC) to supply approximately 29.4 million doses of BioThrax (Anthrax Vaccine Adsorbed) to the Strategic National Stockpile (SNS) through September 2021, valued at up to $911 million

Signed a five-year contract with the Biomedical Advanced Research and Development Authority (BARDA) for advanced development and procurement of NuThrax (anthrax vaccine adsorbed with CPG 7909 adjuvant), the Company’s next generation anthrax vaccine candidate, valued at up to $1.6 billion

Received a Sole Source Notification issued by BARDA for the procurement of approximately $100 million of BioThrax for delivery into the SNS within 24 months from the date of contract award

Achieved U.S. Food and Drug Administration (FDA) licensure for large-scale manufacturing of BioThrax in Building 55

Completed the spin-off of Aptevo Therapeutics Inc.
2016 FINANCIAL PERFORMANCE

Note: The following discussion of Emergent’s year to date and quarter ended December 31, 2016 unaudited, financial performance is on a Continuing Operations Basis.

(I) Quarter Ended December 31, 2016

Revenues

Product Sales
For Q4 2016, product sales were $87.5 million, a decrease of 30% as compared to 2015. The decrease is principally attributable to lower BioThrax deliveries under the Company’s new contract with the CDC, signed in December 2016.


(in millions) Three Months Ended
December 31,
2016 2015 % Change
Product Sales
BioThrax 43.8 $ 111.9 (61 )%
Other 43.7 $ 12.5 249 %
Total Product Sales 87.5 $ 124.4 (30 )%
Contract Manufacturing
For Q4 2016, revenue from the Company’s contract manufacturing operations was $16.7 million, an increase of 59% as compared to 2015. The increase primarily reflects an increase in fill/finish services at the Company’s Camden facility in Baltimore.

Contracts and Grants
For Q4 2016, contracts and grants revenue was $47.5 million, an increase of 91% as compared to 2015. The increase primarily reflects an increase in development funding for the Company’s Bayview facility in Baltimore designated as a Center for Innovation in Advanced Development and Manufacturing (CIADM) and plasma collection for the Company’s VIGIV [Vaccinia Immune Globulin Intravenous (Human)] program.

Operating Expenses

Cost of Product Sales and Contract Manufacturing
For Q4 2016, cost of product sales and contract manufacturing was $38.3 million, an increase of 11% as compared to 2015. The increase reflects an increase in the BioThrax cost per dose sold associated with lower production yield in the period in which the doses sold were produced, along with increased costs associated with the increase in Other product sales volume, partially offset by a decrease in BioThrax sales to the CDC.

Research and Development
For Q4 2016, gross research and development (R&D) expenses were $27.1 million, an increase of 7% as compared to 2015.

For Q4 2016, net R&D was fully funded, resulting in a net contribution from funded development programs of $20.4 million, as compared to a net expense of $0.5 million in 2015. Net R&D, which is more representative of the Company’s actual out-of-pocket investment in product development, is calculated as gross research and development expenses less contracts and grants revenue.

(in millions) Three Months Ended
December 31,
2016 2015
% Change
Research and Development Expenses [Gross] $ 27.1 $ 25.3 (7 )%
Adjustments:
– Contracts and grants revenue $ 47.5 $ 24.8 91 %
Net Research and Development Expenses (Income) $ (20.4 ) $ 0.5 –
Selling, General and Administrative
For Q4 2016, selling, general and administrative expenses were $35.4 million, an increase of 1% as compared to 2015.

Net Income
For Q4 2016, net income was $32.3 million, or $0.67 per diluted share, versus $42.5 million, or $0.90 per diluted share, in 2015.

For Q4 2016 and 2015, net income per diluted share is computed using the "if-converted" method. This method requires net income to be adjusted to add back interest expense and amortization of debt issuance cost, both net of tax, associated with the Company’s 2.875% Convertible Senior Notes due 2021. As a result, net income per diluted share for Q4 2016 is adjusted in the amount of $1.1 million, from $32.3 million to $33.4 million, and diluted shares outstanding were 49.6 million. Net income per diluted share for Q4 2015 is adjusted in the amount of $0.9 million, from $42.5 million to $43.4 million, and diluted shares outstanding were 48.1 million.

(II) Twelve Months Ended December 31, 2016

Revenues

Product Sales
For the twelve months of 2016, product sales were $296.3 million, a decrease of 10% as compared to 2015. The decrease is principally attributable to a 19% reduction in BioThrax sales, including reduced deliveries in 4Q 2016 related to the timing of signing the Company’s follow-on contract with CDC in December 2016.

(in millions) Twelve Months Ended
December 31,
2016 2015
% Change
Product Sales
BioThrax $ 237.0 $ 293.9 (19 )%
Other $ 59.3 $ 35.1 69 %
Total Product Sales $ 296.3 $ 329.0 (10 )%
Contract Manufacturing
For the twelve months of 2016, revenue from contract manufacturing operations was $49.1 million, an increase of 14% as compared to 2015. The increase reflects an increase in fill/finish services from the Company’s Camden facility and an increase in bulk manufacturing services from the Company’s facility in Winnipeg, partially offset by a decrease in contract manufacturing revenue related to the production of an MVA Ebola vaccine candidate in 2015.

Contracts and Grants
For the twelve months of 2016, contracts and grants revenue was $143.4 million, an increase of 22% as compared to 2015. The increase reflects an increase in development funding for the Company’s CIADM program, VIGIV program related to plasma collection, and the NuThrax program related to preparations for a Phase III clinical trial. These increases were offset by lower development funding for the Company’s Anthrasil [Anthrax Immune Globulin Intravenous (Human)] program related to timing of plasma collection, PreviThrax (recombinant protective antigen anthrax vaccine, purified) candidate related to reduced interest by the U.S. government to fund such a program, and Building 55 related to FDA licensure of the facility in August 2016.

Operating Expenses

Cost of Product Sales and Contract Manufacturing
For the twelve months of 2016, cost of product sales and contract manufacturing was $131.3 million, an increase of 22% as compared to 2015. The increase primarily reflects an increase in the BioThrax cost per dose sold associated with lower production yield, along with increased costs associated with the increase in Other product sales volume, partially offset by a decrease in BioThrax sales to the SNS.

Research and Development
For the twelve months of 2016, gross R&D expenses were $108.3 million, a decrease of 9% as compared to 2015. The decrease primarily reflects lower contract service costs.

For the twelve months of 2016, net R&D was fully funded, resulting in a net contribution from funded development programs of $35.1 million, as compared to a net expense of $1.8 million in 2015.

(in millions) Twelve Months Ended
December 31,
2016 2015 % Change
Research and Development Expenses [Gross] $ 108.3 $ 119.2 (9 )%
Adjustments:
– Contracts and grants revenue $ 143.4 $ 117.4 22 %
Net Research and Development Expenses (Income) $ (35.1 ) $ 1.8 –
Selling, General and Administrative
For the twelve months of 2016, selling, general and administrative expenses were $143.7 million, an increase of 19% as compared to 2015. This increase includes costs associated with restructuring activities at the Company’s Lansing, Michigan site, along with increased professional services to support the Company’s strategic growth initiatives and increased information technology investments.

Net Income
For the twelve months of 2016, net income was $62.5 million, or $1.35 per diluted share, versus $107.6 million, or $2.36 per diluted share, in 2015.

Pursuant to the "if-converted" method, net income per diluted share for the twelve months of 2016 is adjusted in the amount of $4.0 million, from $62.5 million to $66.5 million, and diluted shares outstanding were 49.1 million. Net income from continuing operations per diluted share for the twelve months of 2015 is adjusted in the amount of $3.9 million, from $107.6 million to $111.5 million, and diluted shares outstanding were 47.3 million.

2017 FORECAST & OPERATIONAL GOALS

Full Year 2017 Forecast:

Total revenue of $500 to $530 million, including BioThrax sales of $265 to $280 million
GAAP net income of $60 to $70 million
Adjusted net income of $70 to $80 million (3)
EBITDA of $135 to $145 million (3)
(3) See "Reconciliation of Net Income to Adjusted Net Income and EBITDA" for a definition of terms and a reconciliation table.

Revised 1Q 2017 Forecast:

Total revenue of $110 to $125 million
2017 Operational Goals:

Initiate three Phase I or II clinical studies for EID therapeutics
Advance NuThrax development to enable initiating a Phase III study in 2018
Initiate two human factor studies for a nerve agent antidote auto-injector
Complete an acquisition that generates revenue within 12 months of closing
2020 FINANCIAL & OPERATIONAL GOALS

The Company is targeting the following 2020 financial and operational goals:

Total Revenue: $1 billion
Revenue Mix: >10% of total revenue from ex-US customers
Expense Discipline: Net R&D <15% of net revenue (4); SG&A <25% of total revenue
Net Income: 13% of total revenue
Product Development Pipeline: Six products in clinical or advanced development (three dual market)
(4) Computed as Total Revenue less Contracts & Grants Revenue.

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME AND EBITDA

This press release contains two financial measures (Adjusted Net Income and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)) that are considered "non-GAAP" financial measures under applicable Securities and Exchange Commission rules and regulations. These non-GAAP financial measures should be considered supplemental to and not a substitute for financial information prepared in accordance with generally accepted accounting principles. The Company’s definition of these non-GAAP measures may differ from similarly titled measures used by others. Adjusted Net Income adjusts for specified items that can be highly variable or difficult to predict, or reflect the non-cash impact of charges resulting from purchase accounting. EBITDA reflects net income excluding the impact of depreciation, amortization, interest expense and provision for income taxes. The Company views these non-GAAP financial measures as a means to facilitate management’s financial and operational decision-making, including evaluation of the Company’s historical operating results and comparison to competitors’ operating results. These non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to the corresponding GAAP financial measure, may provide a more complete understanding of factors and trends affecting the Company’s business.

The determination of the amounts that are excluded from these non-GAAP financial measures are a matter of management judgment and depend upon, among other factors, the nature of the underlying expense or income amounts. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, management strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.

(I) Reconciliation of Net Income to Adjusted Net Income

COMBINED BASIS
(in millions, except per share value) Three Months Ended December 31,
2016 2015 Source
Net Income $ 32.3 $ 33.3 NA
Adjustments:
+ Acquisition-related costs (transaction & integration) 1.0 2.0 SG&A
+ Non-cash amortization charges 1.9 2.7 COGS, SG&A,
Other Income
+ Exit and disposal costs 2.6 1.2 SG&A
+ Impact of purchase accounting on inventory step-up 1.1 – COGS
Tax effect (2.3 ) (2.1 ) NA
Total Adjustments 4.3 3.8 NA
Adjusted Net Income
Adjusted Net Income per Diluted Share $36.6
$0.74
$37.1
$0.77
NA


CONTINUING OPERATIONS BASIS
(in millions, except per share value) Three Months Ended December 31,
2016 2015 Source
Net Income $ 32.3 $ 42.5 NA
Adjustments:
+ Acquisition-related costs (transaction & integration) 1.0 0.1 SG&A
+ Non-cash amortization charges 1.9 2.2 COGS, SG&A,
Other Income
+ Exit and disposal costs 2.6 – SG&A
+ Impact of purchase accounting on inventory step-up 1.1 – COGS
Tax effect (2.3 ) (0.8 ) NA
Total Adjustments 4.3 1.5 NA
Adjusted Net Income
Adjusted Net Income per Diluted Share $36.6
$0.74
$44.0
$0.91
NA


COMBINED BASIS
(in millions, except per share value) Twelve Months Ended December 31,
2016 2015 Source
Net Income $ 51.8 $ 62.9 NA
Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 10.4 5.5 SG&A
+ Non-cash amortization charges 9.6 10.8 COGS, SG&A,
Other Income
+ Exit and disposal costs 11.7 1.2 SG&A
+ Impact of purchase accounting on inventory step-up 1.1 0.6 COGS
Tax effect (11.5 ) (6.3 ) NA
Total Adjustments 21.3 11.8 NA
Adjusted Net Income
Adjusted Net Income per Diluted Share $73.1
$1.48
$74.7
$1.58
NA


CONTINUING OPERATIONS BASIS
(in millions, except per share value) Twelve Months Ended December 31,
2016 2015 Source
Net Income From Continuing Operations $ 62.5 $ 91.4 NA
Adjustments:
+ Acquisition-related costs (transaction & integration) 1.7 2.1 SG&A
+ Non-cash amortization charges 8.4 8.9 COGS, SG&A,
Other Income
+ Exit and disposal costs 11.7 – SG&A
+ Impact of purchase accounting on inventory step-up 1.1 0.3 COGS
Tax effect (8.0 ) (4.0 ) NA
Total Adjustments 15.0 7.4 NA
Adjusted Net Income From Continuing Operations
Adjusted Net Income per Diluted Share $77.5
$1.57
$98.8
$2.09
NA


(II) Reconciliation of Net Income to EBITDA

COMBINED BASIS
(in millions, except per share value) Three Months Ended December 31,
2016 2015
Net Income $ 32.3 $ 33.3
Adjustments:
+ Depreciation & Amortization 9.7 9.1
+ Provision For Income Taxes 16.8 14.5
+ Total Interest Expense 2.5 1.6
Total Adjustments 29.0 25.2
EBITDA
EBITDA per Diluted Share $61.3
$1.24 $58.5
$1.22


CONTINUING OPERATIONS BASIS
(in millions, except per share value) Three Months Ended December 31,
2016 2015
Net Income From Continuing Operations $ 32.3 $ 42.5
Adjustments:
+ Depreciation & Amortization 9.7 8.3
+ Provision For Income Taxes 16.8 20.7
+ Total Interest Expense 2.5 1.6
Total Adjustments 29.0 30.6
EBITDA From Continuing Operations
EBITDA per Diluted Share $61.3
$1.24 $73.1
$1.52


COMBINED BASIS
(in millions, except per share value) Twelve Months Ended December 31,
2016 2015
Net Income $ 51.8 $ 62.9
Adjustments:
+ Depreciation & Amortization 36.7 33.8
+ Provision For Income Taxes 15.4 26.9
+ Total Interest Expense 7.6 6.5
Total Adjustments 59.7 67.2
EBITDA
EBITDA per Diluted Share $111.5
$2.26 $130.1
$2.75


CONTINUING OPERATIONS BASIS
(in millions, except per share value) Twelve Months Ended December 31,
2016 2015
Net Income From Continuing Operations $ 62.5 $ 91.4
Adjustments:
+ Depreciation & Amortization 34.9 31.2
+ Provision For Income Taxes 36.7 44.3
+ Total Interest Expense 7.6 6.5
Total Adjustments 79.2 82.0
EBITDA From Continuing Operations
EBITDA per Diluted Share $141.7
$2.87 $173.4
$3.67
RECONCILIATION OF STATEMENT OF OPERATIONS

The following table provides a reconciliation of the Company’s Statement of Operations for the Twelve Months Ended December 31, 2016 on a continuing operations basis to that on a combined basis, which takes into account the impact of the Aptevo-related discontinued operations.


Emergent BioSolutions Inc. and Subsidiaries
Consolidated Statements of Operations



Year Ended December 31, 2016
Continuing
Operations Discontinuing
Operations Combined
Revenues: (Unaudited)
Product sales $ 296.3 $ 21.2 317.5
Contract manufacturing 49.1 - 49.1
Contracts and grants 143.4 0.2 143.6
Total revenues 488.8 21.4 510.2

Operating expenses:
Cost of product sales and contract manufacturing 131.3 11.6 142.9
Research and development 108.3 18.0 126.3
Selling, general and administrative 143.7 23.8 167.5
Income from operations 105.5 (32.0 ) 73.5

Other income (expense):
Interest income 1.1 - 1.1
Interest expense (7.6 ) - (7.6 )
Other income, net 0.2 - 0.2
Total other expense, net (6.3 ) (0.0 ) (6.3 )

Income (loss) before provision for (benefit) from income taxes 99.2 (32.0 ) 67.2
Provision for (benefit from) income taxes 36.7 (21.3 ) 15.4
Net income $ 62.5 $ (10.7 ) $ 51.8

On February 23, 2017 OncoGenex Pharmaceuticals, Inc. (NASDAQ: OGXI) reported its year end 2016 financial results (Press release, OncoGenex Pharmaceuticals, FEB 23, 2017, View Source [SID1234517805]).

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Recent Events

In January 2017, OncoGenex, and Achieve Life Science, Inc., a privately held specialty pharmaceutical company, announced that they have entered into a definitive merger agreement under which OncoGenex will acquire Achieve in an all-stock transaction. Upon completion of the proposed merger, Achieve’s stockholders are expected to own 75% of the combined company’s outstanding shares and current equityholders of OncoGenex are expected to own the remaining 25% of the combined company’s outstanding shares. Following completion of the merger, OncoGenex Pharmaceuticals, Inc. will be renamed Achieve Life Sciences, Inc. The proposed merger is expected to close by mid-2017, subject to customary closing conditions.
In October 2016, the company announced positive survival results from the final analysis of the Phase 2 Borealis-2 trial of apatorsen in combination with docetaxel treatment that enrolled 200 patients with metastatic bladder cancer whose disease had progressed following first-line platinum-based chemotherapy. Patients who received apatorsen treatment experienced a 20% reduction in risk of death, compared to patients receiving docetaxel alone.
In February 2017, results from the Pacific Trial were presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2017 Genitourinary Cancers Symposium. The trial randomized 72 patients who were experiencing a rising PSA while receiving Zytiga (abiraterone acetate ). Apatorsen was well tolerated in combination with Zytiga with the median treatment duration of 106 days for apatorsen plus Zytiga compared to 75 days for continuing Zytiga alone. The proportion of patients who were progression free at Day 60 was 33% when apatorsen was added to Zytiga, compared to 17% with Zytiga alone.
OncoGenex discontinued the development of its custirsen and OGX-225 programs and is currently seeking a collaboration partnership to further develop apatorsen.
Financial Results
As of December 31, 2016, the company’s cash, cash equivalents, and short-term investments decreased to $25.5 million from $55.2 million as of December 31, 2015. Based on current expectations, OncoGenex believes that its cash, cash equivalents, and short-term investments will be sufficient to fund its currently planned operations for at least the next 12 months.

Revenue for the fourth quarter and year ended December 31, 2016 was zero and $5.1 million, respectively. The advanced reimbursement payment made by Teva, as part of the Termination Agreement, was deferred and recognized as collaboration revenue on a dollar for dollar basis as costs were incurred as part of the continuing research and development activities related to custirsen. The decrease in collaboration revenue in 2016 as compared to 2015 was due to the full recognition of the remaining amounts of deferred revenue in the first half of 2016.

Total operating expenses for the fourth quarter and year ended December 31, 2016 were $6.0 million and $26.3 million, respectively. Net loss for the fourth quarter and year ended December 31, 2016 was $5.8 million and $20.1 million, respectively.

As of Feb 23, 2017 OncoGenex had 30,086,106 shares outstanding.

Important Additional Information about the Proposed Merger
This communication is being made in respect of the proposed merger involving OncoGenex Pharmaceuticals, Inc. and Achieve Life Science, Inc. OncoGenex intends to file a registration statement on Form S-4 with the SEC, which will contain a joint proxy statement/prospectus and other relevant materials, and plans to file with the SEC other documents regarding the proposed transaction. The final joint proxy statement/prospectus will be sent to the stockholders of OncoGenex and Achieve. The joint proxy statement/prospectus will contain information about OncoGenex, Achieve, the proposed merger and related matters. STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS) AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION THAT STOCKHOLDERS SHOULD CONSIDER BEFORE MAKING A DECISION ABOUT THE MERGER AND RELATED MATTERS. In addition to receiving the joint proxy statement/prospectus and proxy card by mail, stockholders will also be able to obtain the joint proxy statement/prospectus, as well as other filings containing information about OncoGenex, without charge, from the SEC’s website (View Source) or, without charge, by directing a written request to: OncoGenex Pharmaceuticals, Inc., 19820 North Creek Parkway, Suite 201, Bothell, WA 98011, Attention: Investor Relations or to Achieve Life Science, Inc., 30 Sunnyside Avenue, Mill Valley, CA 94941, Attention: Rick Stewart.

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities in connection with the proposed merger shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Participants in Solicitation
OncoGenex and its executive officers and directors may be deemed to be participants in the solicitation of proxies from OncoGenex’s stockholders with respect to the matters relating to the proposed merger. Achieve and its officers and directors may also be deemed a participant in such solicitation. Information regarding OncoGenex’s executive officers and directors is available in OncoGenex’s proxy statement on Schedule 14A, filed with the SEC on April 21, 2016. Information regarding any interest that OncoGenex, Achieve or any of the executive officers or directors of OncoGenex or Achieve may have in the transaction with Achieve will be set forth in the joint proxy statement/prospectus that OncoGenex intends to file with the SEC in connection with its stockholder vote on matters relating to the proposed merger. Stockholders will be able to obtain this information by reading the joint proxy statement/prospectus when it becomes available.