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Immune Design Reports Third Quarter 2017 Financial Results and Provides Corporate Update

On November 1, 2017 Immune Design (Nasdaq:IMDZ), a clinical-stage immunotherapy company focused on oncology, reported financial results and a corporate update for the third quarter ended September 30, 2017 (Press release, Immune Design, NOV 1, 2017, View Source [SID1234521433]).

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“During the third quarter, we made significant progress on our strategy to bring a novel cancer vaccine to market. Our discussions with the FDA resulted in positive feedback on a Phase 3 trial design and approval criteria for CMB305 as a monotherapy for synovial sarcoma patients in the maintenance setting — a significant milestone for the company,” said Carlos Paya, M.D., Ph.D., President and Chief Executive Officer of Immune Design. “In addition, at ESMO (Free ESMO Whitepaper) we presented interim analysis data from our ongoing randomized Phase 2 study of CMB305 and atezolizumab showing that patients receiving the combination therapy experienced greater clinical benefit and immune response than those receiving atezolizumab alone.”

Recent Highlights

CMB305 Monotherapy: progressing to pivotal Phase 3 in synovial sarcoma patients
Based on productive discussions with the FDA, Immune Design announced plans to initiate a pivotal Phase 3 randomized trial to support a Biologics License Application for CMB305 in patients with synovial sarcoma.
The trial will compare CMB305 vs. placebo in NY-ESO-1+ locally advanced unresectable or metastatic synovial sarcoma patients without evidence of progression after first-line chemotherapy (“maintenance setting”).
Immune Design intends to start the study in mid-2018 and enroll 248 patients aged 12 and older.
Progression free survival (PFS) and overall survival will be co-primary endpoints.
PFS analysis may occur as early as 24 months from the first patient dosed, depending on the number of events.
CMB305 Combination Therapy (CMB305+Atezolizumab vs Atezolizumab) Randomized Phase 2 Trial: interim analysis presented at ESMO (Free ESMO Whitepaper) 2017 shows greater benefit in sarcoma patients receiving the combination
The interim analysis (n=36 patients) data showed that NY-ESO-1+ synovial sarcoma or mixoid round cell liposarcoma patients receiving the combination of CMB305 and Genentech’s checkpoint inhibitor, Tecentriq (atezolizumab) experienced greater clinical benefit, in the form of Disease Control Rate (including partial responses), median Progression Free Survival and Time to Next Treatment, as well as immune response, than those receiving atezolizumab alone.
In the full study population (n=88), the trend of greater clinical benefit on the combination arm remains consistent.
G100 +/- pembrolizumab data in follicular NHL patients to be presented at ASH (Free ASH Whitepaper); receipt of EMA Orphan Drug designation
The American Society of Hematology (ASH) (Free ASH Whitepaper) has accepted an Immune Design presentation for its Annual Meeting in December 2017.
Data from a randomized, 26-patient, Phase 2 study evaluating G100, the novel, synthetic TLR4 agonist injected intratumorally, and low-dose radiation (XRT), versus G100 and XRT with the systemic administration of Merck’s anti-PD-1 antibody, Keytruda (pembrolizumab) will be presented.
The data in the submitted abstract show:
a 31% ORR for patients receiving G100+XRT+pembrolizumab (G+P), as compared to a 15% ORR for patients receiving G100+XRT (G); and
shrinkage of untreated (abscopal) tumors in 62% of patients receiving G+P and 46% of patients receiving G.
These abstract data are earlier (June 2017) than the data that will be presented in the planned presentation. The updated data appear to demonstrate a stronger clinical response and biomarker profile for those patients receiving G100, XRT and pembrolizumab, as compared to those patients receiving G100 and XRT alone.
G100 received Orphan Drug Designation for the treatment of follicular non-Hodgkin’s lymphoma from the EMA in October 2017.
Additional Upcoming Presentations

The Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) has accepted five Immune Design abstracts for presentation at its 32nd Annual Meeting, November 8-12, 2017 in National Harbor, Maryland. The oral and poster presentations are as follows:

Novel Biomarkers in Next-generation Cancer Vaccines: Public NY-ESO-1 specific TCRs as novel biomarkers for immune monitoring of NY-ESO-1 positive cancer patients
Combination Therapy (Cancer Vaccine + Intratumoral Immunization): G100 and ZVex-based combination immunotherapy induces near complete regression of established glioma tumors in mice
Multi-Target Cancer Vaccines: Transduction of MAGE-A1, A3, A4, A10 and IL-12 by ZVex, a dendritic cell targeting platform induces robust multi-antigen T-cell immune responses without antigenic interference or immunodominance
Next-Generation Intratumoral Vaccination Using ZVex: Intratumoral expression of IL12 using the ZVex dendritic cell-targeting lentiviral vector exerts potent anti-tumor effects via induction of multiple immune effectors, including CD8 T cell responses
Anti-NY-ESO-1 Immune Response and Survival Benefit After LV305 Therapy in Patients With Advanced Sarcoma and Other Solid Tumors
In addition to an investigator-sponsored presentation, at the Connective Tissue Oncology Society (CTOS) Annual Meeting being held in Maui from November 8-11, Immune Design will be presenting data from the ASCO (Free ASCO Whitepaper) annual meeting in two presentations:

A Phase 2 Study of CMB305 and Atezolizumab in NY-ESO-1+ Soft Tissue Sarcoma: Interim Analysis of Immunogenicity, tumor control and survival.
Association of NY-ESO-1 Expression with Baseline Immunity and Clinical Outcomes in Soft Tissue Sarcoma Patients Treated with LV305 or CMB305.
Completion of Follow-On Financing

On October 27, 2017, Immune Design completed an underwritten follow-on public offering, which resulted in the sale of 22,425,000 shares of common stock, inclusive of the full exercise by the underwriters of the 30-day option to purchase 2,925,000 additional shares, at a public offering price of $4.10 per share. Estimated net proceeds from the offering were $86.6 million after deducting underwriting discounts and commissions and estimated offering expenses of $5.4 million. Both new and existing investors participated in the offering.

Financial Results

Third Quarter

Immune Design ended the third quarter of 2017 with $67.5 million in cash, cash equivalents, short-term investments and other receivables, compared to $110.4 million as of December 31, 2016. Net cash used in operations for the nine months ended September 30, 2017 was $43.2 million.

Net loss and net loss per share for the third quarter of 2017 were $13.4 million and $0.52, respectively, compared to $12.4 million and $0.60, respectively, for the third quarter of 2016.

Revenue for the third quarter of 2017 was $0.5 million and was primarily attributable to collaboration revenue associated with the Sanofi G103 HSV therapeutic vaccine product collaboration. Revenue for the third quarter of 2016 was $8.2 million and was primarily attributable to $7.0 million in license revenue, $0.4 million in product sales associated with Immune Design’s collaboration partner Sanofi and $0.8 million in collaboration revenue associated with the Sanofi G103 product collaboration.

Research and development expenses for the third quarter of 2017 were $10.2 million compared to $11.2 million for the same period in 2016. The $1.0 million decrease was primarily attributable to a decrease in in-licensing royalties and fees to other third parties that the company licenses various technologies from and a decrease in contract manufacturing activities primarily driven by the timing of when services are performed. These decreases were offset by an increase in personnel-related expenses and facility costs to support the company’s advancing research and clinical pipeline.

General and administrative expenses for the third quarter of 2017 were $3.9 million compared to $9.6 million for the same period in 2016. The $5.7 million decrease was primarily attributable to the settlement and license agreements with TheraVectys SA (TVS) involving the acquisition of certain present and future intellectual property rights from TVS and resolving the litigation initiated by TVS in July 2014 against the company, as well as related claims and counterclaims.
Year-to-Date

Net loss and net loss per share for the nine months ended September 30, 2017 were $39.9 million and $1.56, respectively, compared to $39.1 million and $1.92, respectively, for the same period in 2016.

Revenue for the nine months ended September 30, 2017 was $6.7 million and was primarily attributable to $6.4 million in collaboration revenue associated with the Sanofi G103 product collaboration and $0.3 million in product sales to other third parties. Revenue for the same period in 2016 was $11.2 million and was primarily attributable to $7.0 million in license revenue, $1.2 million in product sales associated with Immune Design’s collaboration partner Sanofi and $3.0 million in collaboration revenue associated with the Sanofi G103 product collaboration.

Research and development expenses for the nine months ended September 30, 2017 were $35.1 million compared to $33.1 million for the same period in 2016. The $2.0 million increase was primarily attributable to continued advancement of Immune Design’s ongoing research and development programs, including ongoing Phase 1 and Phase 2 clinical trials and an increase in personnel-related expenses to support the company’s advancing research and clinical pipeline.

General and administrative expenses for the nine months ended September 30, 2017 were $11.9 million compared to $17.4 million for the same period in 2016. The $5.5 million decrease was primarily attributable to the settlement and license agreements with TVS involving the acquisition of certain present and future intellectual property rights from TVS and resolving the litigation initiated by TVS in July 2014 against the company, as well as related claims and counterclaims.
Cash Guidance

Based on current expectations following Immune Design’s recent follow-on offering, the company expects to have cash to fund operations into 2020.

Conference Call Information

Immune Design will host a conference call and live audio webcast this afternoon at 1:30 p.m. Pacific time / 4:30 p.m. Eastern time to discuss the third quarter 2017 financial results and provide a corporate update.

The live call may be accessed by dialing 844-266-9538 for domestic callers and 216-562-0391 for international callers. A live webcast of the call will be available online from the investor relations section of the company website at View Source A telephone replay of the call will be available for five days by dialing 855-859-2056 for domestic callers or 404-537-3406 for international callers and entering the conference code:4793869

An archived copy of the webcast will be available on Immune Design’s website beginning approximately two hours after the conference call. Immune Design will maintain an archived replay of the webcast on its website for at least 30 days after the conference call.

Geron Corporation Reports Third Quarter 2017 Financial Results

On November 1, 2017 Geron Corporation (Nasdaq:GERN) reported financial results for the three and nine months ended September 30, 2017 (Press release, Geron, NOV 1, 2017, View Source [SID1234521431]).

For the third quarter of 2017, the company reported a net loss of $6.9 million, or $0.04 per share, compared to $3.6 million, or $0.02 per share, for the comparable 2016 period. Net loss for the first nine months of 2017 was $20.5 million, or $0.13 per share, compared to $21.1 million, or $0.13 per share, for the comparable 2016 period. The company ended the third quarter of 2017 with $112.7 million in cash and investments.

Revenues for the three and nine months ended September 30, 2017 were $163,000 and $874,000, respectively, compared to $5.1 million and $6.1 million for the comparable 2016 periods. Revenues for the three and nine month periods ending September 30, 2016 included license fee revenue of $5.0 million in connection with an upfront payment under a license agreement signed in September 2016 with Janssen Pharmaceuticals, Inc. for certain rights to specialized oligonucleotide backbone chemistry and novel amidates.

Total operating expenses for the three and nine months ended September 30, 2017 were $7.4 million and $22.3 million, respectively, compared to $9.0 million and $27.9 million for the comparable 2016 periods. Research and development expenses for the three and nine months ended September 30, 2017 were $2.6 million and $8.5 million, respectively, compared to $4.3 million and $13.9 million for the comparable 2016 periods. The decrease in research and development expenses for the three and nine month periods ending September 30, 2017, compared to the same periods in 2016, primarily reflects lower costs for the company’s proportionate share of clinical development expenses under the imetelstat collaboration with Janssen Biotech, Inc. and reduced personnel related expenses. General and administrative expenses for the three and nine months ended September 30, 2017 were $4.8 million and $13.8 million, respectively, compared to $4.7 million and $14.0 million for the comparable 2016 periods. The increase in general and administrative expenses for the three-month period ending September 30, 2017, compared to the same period in 2016, primarily reflects higher non-cash stock-based compensation expense. The decrease in general and administrative expenses for the nine-month period ending September 30, 2017, compared to the same period in 2016, primarily reflects lower consulting and legal costs, partially offset by higher non-cash stock-based compensation expense.

Interest and other income for the three and nine months ended September 30, 2017 was $363,000 and $1.0 million, respectively, compared to $322,000 and $871,000 for the comparable 2016 periods. The increase in interest and other income for the three and nine month periods ending September 30, 2017, compared to the same periods in 2016, primarily reflects higher yields on the company’s marketable securities portfolio.

Conference Call and Webcast

At 4:30 p.m. ET on November 1, 2017, Geron’s management will host a conference call to discuss the company’s third quarter results as well as recent events.

Participants can access the conference call live via telephone dialing 877-303-9139 (U.S.); 760-536-5195 (international). The conference ID is 1056465. A live audio-only webcast is also available through the Investors section of the company’s website at www.geron.com or at View Source The audio webcast of the conference call will be available for replay approximately one hour following the live broadcast through December 1, 2017.

Foundation Medicine Announces 2017 Third Quarter Results and Recent Highlights

On November 1, 2017 Foundation Medicine, Inc. (NASDAQ: FMI) reported financial and operating results for its third quarter ended September 30, 2017. Results and business highlights for the quarter included (Press release, Foundation Medicine, NOV 1, 2017, View Source [SID1234521430]):

Achieved third quarter revenue of $42.7 million, 45% year-over-year growth;
Reported 17,474 clinical tests in the third quarter, 50% year-over-year growth;
Presented validation data for FoundationOne CDx at the World Conference on Lung Cancer which demonstrated high concordance with multiple FDA-approved companion diagnostics across multiple solid tumor cancer types. FoundationOne CDx is currently under the Parallel Review process with FDA and CMS;
Presented validation data for a novel assay measuring tumor mutational burden in blood (bTMB) at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) providing evidence that response to immunotherapy can be predicted using a blood sample. Based on these findings, the bTMB assay is being integrated as part of Roche/Genentech’s prospective, randomized Phase III Blood First Assay Screening Trial (BFAST) as a companion diagnostic assay to investigate bTMB as a non-invasive biomarker of response to first-line atezolizumab in advanced NSCLC patients; and
Published 19 manuscripts in high-quality, peer-reviewed journals and delivered 21 podium and poster talks at various medical and scientific meetings.
“Foundation Medicine made great progress in the third quarter as evidenced by record revenue and clinical volume,” said Troy Cox, chief executive officer of Foundation Medicine. “Our recent accomplishments, including progress with the parallel review process with FDA and CMS for FoundationOne CDx, expanding relationships with our biopharma partners, and driving continued innovation in our molecular information solutions pipeline with bTMB, continue to position our company for further growth, and competitive differentiation to transform cancer care.”

Foundation Medicine reported total revenue of $42.7 million in the third quarter of 2017, compared to $29.4 million in the third quarter of 2016. Revenue from biopharmaceutical customers was $29.6 million in the third quarter of 2017, compared to $20.7 million in the third quarter of 2016. The results of 2,817 tests were reported to biopharmaceutical customers in this year’s third quarter.

Revenue from clinical testing in the third quarter of 2017 was $13.1 million, compared to $8.7 million in the third quarter of 2016. The company reported 17,474 tests to clinicians in the third quarter of 2017, a 50% increase from the same quarter last year. This number includes 14,398 FoundationOne tests, 1,478 FoundationOne Heme tests, 1,488 FoundationACT tests, and 110 FoundationFocus CDxBRCA tests.

Total operating expenses for the third quarter of 2017 were approximately $56.0 million, compared with $44.9 million for the third quarter of 2016. The increase in operating expenses was partially driven by investments in product development such as FoundationOne CDx and bTMB, investments in the company’s technology infrastructure, and certain non-recurring cash and non-cash expenses.

Net loss was approximately $32.6 million in the third quarter of 2017, or a $0.90 loss per share. At September 30, 2017, the company held approximately $76.8 million in cash, cash equivalents and marketable securities.

Based on the new revenue reporting the company initiated last quarter, Molecular Information Services revenue was $28.4 million, including $13.1 million in revenue generated from our clinical customers, and $15.3 million in revenue generated from our biopharma customers during the third quarter. Pharma Research and Development Services revenue was $14.3 million.

2017 Outlook

Foundation Medicine’s business and financial outlook for 2017 is the following:

The company expects 2017 revenue will be in the range of $135 million to $145 million.
The company is increasing clinical volume guidance and now expects to deliver between 64,000 and 66,000 clinical tests in 2017.
The company expects 2017 operating expenses will be in the range of $215 million and $225 million.
The company expects to advance its comprehensive genomic profiling assay, FoundationOne CDx, through the FDA and CMS Parallel Review process with a decision anticipated in the fourth quarter of 2017.
The company expects to continue reimbursement progress and pursue additional coverage decisions for its CGP assays.
Conference Call and Webcast Details

The company will conduct a conference call today, Wednesday, November 1st at 4:30 p.m. Eastern Time to discuss its financial performance for the 2017 third quarter and other business activities, including matters related to future performance. To access the conference call via phone, dial 1-877-270-2148 from the United States or dial 1-412-902-6510 internationally. Dial in approximately ten minutes prior to the start of the call. The live, listen-only webcast of the conference call may be accessed by visiting the investors section of the company’s website at investors.foundationmedicine.com. A replay of the webcast will be available shortly after the conclusion of the call and will be archived on the company’s website for two weeks following the call.

Fate Therapeutics Reports Third Quarter 2017 Financial Results

On November 1, 2017 Fate Therapeutics, Inc. (NASDAQ:FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, reported business highlights and financial results for the third quarter ended September 30, 2017 (Press release, Fate Therapeutics, NOV 1, 2017, View Source [SID1234521429]).

"We are poised to release initial Phase 1 clinical data for FATE-NK100 and ProTmune at prominent scientific conferences during the coming weeks," said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. "Additionally, we are pleased that two first-of-kind product candidates from our proprietary iPSC-derived cancer immunotherapy pipeline have been selected for oral presentations at the 2017 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting. Thousands of doses of homogeneous drug product can be produced from a clonal iPSC master cell line in a single manufacturing run. This represents a transformative approach to enable off-the-shelf delivery of cancer immunotherapies that are uniformly engineered and identical in composition from dose-to-dose across patients. At ASH (Free ASH Whitepaper) we will be unveiling exciting new preclinical and manufacturing data to support our 2018 path to clinic for iPSC-derived NK- and T-cell product candidates."

Recent Highlights & Program Updates

Initial Clinical Data from VOYAGE Study of FATE-NK100 in AML to be Presented at SITC (Free SITC Whitepaper) 2017. VOYAGE is an open-label, accelerated dose-escalation clinical trial of FATE-NK100, the Company’s first-in-class adaptive memory natural killer (NK) cell product candidate, for the treatment of refractory or relapsed acute myelogenous leukemia (AML).

FATE-NK100 has advanced through the first two of three dose cohorts in VOYAGE. The Company will present the post-manufacturing potency, in vivo persistence and anti-tumor activity of FATE-NK100 from the first two subjects at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 32nd Annual Meeting during a poster session on November 10. The peer-reviewed non-clinical data describing the unique properties and anti-tumor activity of FATE-NK100 were published in Cancer Research in August.

APOLLO Study of FATE-NK100 in Recurrent Ovarian Cancer Open for Enrollment. In October, enrollment was opened in the APOLLO study of FATE-NK100 for the treatment of women with ovarian cancer resistant to, or recurrent on, platinum-based treatment. APOLLO is designed to evaluate the safety and determine the maximum dose of a single infusion of FATE-NK100 when administered directly into the peritoneum in an outpatient setting.

Intraperitoneal delivery of NK cells is a novel strategy intended to promote co-localization with tumor cells and maximize NK cell persistence and anti-tumor activity. Other study endpoints include objective response rate at 28 days post-infusion and progression-free and overall survival.

First Subject Treated in PROTECT Phase 2 Efficacy Stage. PROTECT is a combined open-label Phase 1 / blinded Phase 2 clinical trial of ProTmune, a next-generation hematopoietic cell graft for patients with hematologic malignancies undergoing allogeneic hematopoietic cell transplantation (HCT). In October, the first subject was treated in the randomized, controlled and blinded Phase 2 stage. The Phase 2 stage is assessing the safety and efficacy of ProTmune in 60 subjects, where subjects are being randomized, in a 1:1 ratio, to receive either ProTmune or a conventional matched unrelated donor mobilized peripheral blood cell graft. The primary efficacy endpoint is incidence of acute graft-versus-host disease (GvHD) by Day 100 post-HCT, where prospective clinical studies have shown that 40% to 80% of patients undergoing matched unrelated donor HCT experience Grades 2-4 acute GvHD.

Day 100 Data from PROTECT Phase 1 Stage to be Presented at 2017 ASH (Free ASH Whitepaper). The Company will present data on all seven subjects administered ProTmune in the Phase 1 stage of PROTECT at the 59th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting during a poster session on December 11. Key clinical outcomes, including incidence of acute GvHD, cancer relapse and survival, at 100 days following HCT will be released. An ASH (Free ASH Whitepaper) abstract released today highlighted early data on the first five Phase 1 subjects, three of whom had not yet reached Day 100, as of a July 31, 2017 data cut-off.

First iPSC-derived T-Cell Product Candidate to be Showcased during Oral Presentation at 2017 ASH (Free ASH Whitepaper). An oral presentation will describe the generation of CD8αβ+ T cells from an induced pluripotent stem cell (iPSC) line engineered to express a chimeric antigen receptor (CAR). This breakthrough was led by Dr. Michel Sadelain, MD, PhD, Director, Center for Cell Engineering, Memorial Sloan Kettering Cancer Center (MSK), under the Company’s multi-year sponsored research collaboration with MSK. The Company’s first iPSC-derived CAR T-cell product candidate FT819, which is derived from a clonal iPSC master cell line engineered to express a CAR targeting CD19 and edited to remove T-cell receptor (TCR) expression, is undergoing preclinical development.

First iPSC-derived NK Cell Product Candidate FT500 to be Showcased during Oral Presentation at 2017 ASH (Free ASH Whitepaper). An oral presentation by Jeffrey S. Miller, MD, Deputy Director of the Masonic Cancer Center, University of Minnesota, will describe the production under current good manufacturing practice (cGMP) conditions of FT500, the Company’s first-of-kind NK cell product candidate derived from a clonal iPSC master cell line. Fate Therapeutics plans to file a landmark Investigational New Drug (IND) application with the U.S. Food & Drug Administration (FDA) in the first quarter of 2018 to initiate first-in-human clinical investigation of FT500 in combination with FDA-approved checkpoint inhibitors for the treatment of advanced solid tumors.

Key Patent Issued for Enhanced Genetic Engineering of CD34+ Cells. In August, the Company announced that the U.S. Patent and Trademark Office issued U.S. Patent No. 9,675,641 covering the use of prostaglandins as viral transduction enhancers for the genetic modification of CD34+ hematopoietic cells. The patent, which broadly covers methods of using prostaglandins to enhance ex vivo genetic engineering of hematopoietic cells using viral vectors, is owned by the Indiana University Research and Technology Corporation and is licensed exclusively to Fate Therapeutics in all fields. Investigators recently highlighted in Molecular Therapy that this practice consistently increased transduction efficiency in primary CD34+ cells sourced from multiple normal human donors and from patients with β-thalassemia or sickle cell disease, concluding that prostaglandins may be critical to ensuring successful clinical gene therapy using lentivirus-modified CD34+ cells.

Third Quarter 2017 Financial Results

Cash & Short-term Investment Position: Cash, cash equivalents and short-term investments as of September 30, 2017 were $69.2 million compared to $92.1 million as of December 31, 2016. The decrease was primarily driven by the Company’s use of cash to fund operating activities and to service principal and interest obligations under its loan agreement with Silicon Valley Bank. This use was offset by $7.5 million in net cash proceeds received by the Company in July 2017 in connection with the amendment of its loan agreement with Silicon Valley Bank.
Total Revenue: Revenue was $1.0 million for the third quarter of 2017 and as well as for the comparable period in 2016. All revenue was derived from the Company’s research collaboration and license agreement with Juno Therapeutics.

Total Operating Expenses: Total operating expenses were $11.4 million for the third quarter of 2017 compared to $9.4 million for the comparable period in 2016. Operating expenses for the third quarter of 2017 included $0.9 million of stock compensation expense, compared to $0.8 million for the comparable period in 2016.

R&D Expenses: Research and development expenses were $8.6 million for the third quarter of 2017 compared to $6.8 million for the comparable period in 2016. The increase in R&D expenses was primarily related to an increase in third-party service provider fees to support the clinical development of ProTmune and FATE-NK100 and the preclinical advancement of the Company’s off-the-shelf iPSC-derived cellular immunotherapy programs, and an increase in facilities costs associated with the expansion of the Company’s laboratory space.

G&A Expenses: General and administrative expenses were $2.8 million for the third quarter of 2017 compared to $2.6 million for the comparable period in 2016. The increase in G&A expenses was primarily related to an increase in employee compensation and benefits expense, including employee stock-based compensation expense, and an increase in facilities costs associated with the expansion of the Company’s office space.

Shares Outstanding: Common shares outstanding were 41.5 million as of September 30, 2017 and 41.4 million as of December 31, 2016. Preferred shares outstanding as of September 30, 2017 and December 31, 2016 were 2.82 million, each of which is convertible into five shares of common stock. All preferred shares outstanding are from the Company’s sale and issuance of non-voting Class A convertible preferred stock to Redmile Group, LLC in November 2016.

Today’s Conference Call and Webcast
The Company will conduct a conference call today, Wednesday, November 1, 2017 at 5:00 p.m. ET to review financial and operating results for the quarter ended September 30, 2017. In order to participate in the conference call, please dial 877-303-6235 (domestic) or 631-291-4837 (international) and refer to conference ID 9892619. The live webcast can be accessed under "Events & Presentations" in the Investors & Media section of the Company’s website at www.fatetherapeutics.com. The archived webcast will be available on the Company’s website beginning approximately two hours after the event.

About FATE-NK100
FATE-NK100 is a first-in-class natural killer (NK) cell cancer immunotherapy comprised of adaptive memory NK cells, a highly specialized and functionally distinct subset of activated NK cells expressing the maturation marker CD57. Higher frequencies of CD57+ NK cells in the peripheral blood or tumor microenvironment in cancer patients have been linked to better clinical outcomes. FATE-NK100 is produced through a feeder-free, seven-day manufacturing process during which NK cells sourced from a healthy donor are activated ex vivo with pharmacologic modulators.

About ProTmune
ProTmune is an investigational next-generation hematopoietic cell graft for the prevention of acute graft-versus-host disease (GvHD) in subjects undergoing allogeneic hematopoietic cell transplantation (HCT). ProTmune is manufactured by pharmacologically modulating a donor-sourced, mobilized peripheral blood graft ex vivo with two small molecules (FT1050 and FT4145) to enhance the biological properties and therapeutic function of the graft. Acute GvHD is a severe immunological disease that commonly arises in patients during the first weeks following allogeneic HCT when the newly-transplanted donor immune cells attack the patient’s tissues and organs, resulting in a potentially fatal immune system reaction. The disease is the leading cause of early morbidity and mortality in matched unrelated donor transplant, and there are currently no FDA-approved preventive therapies and very few treatment options for acute GvHD. ProTmune has been granted Orphan Drug and Fast Track Designations by the FDA, and Orphan Medicinal Product Designation by the European Medicines Agency.

About Fate Therapeutics’ iPSC Product Platform
The Company’s proprietary induced pluripotent stem cell (iPSC) product platform enables genetic engineering, high-throughput single-cell isolation and clonal selection of human iPSCs and supports long-term maintenance of human iPSCs as master pluripotent cell lines. Human iPSCs possess the unique dual properties of unlimited self-renewal and differentiation potential into all cell types of the body. Similar to master cell lines used for the manufacture of monoclonal antibodies, clonal iPSC master cell lines can serve as a renewable cell source for the consistent and repeated manufacture of homogeneous cell products with the potential to treat many different diseases and many thousands of patients in an off-the-shelf manner. Fate Therapeutics’ iPSC product platform is supported by an intellectual property portfolio of over 90 issued patents and 100 pending patent applications.

EXELIXIS ANNOUNCES THIRD QUARTER 2017 FINANCIAL RESULTS AND PROVIDES CORPORATE UPDATE

On November 1, 2017 Exelixis, Inc. (NASDAQ: EXEL) reported financial results for the third quarter of 2017 and provided an update on progress toward fulfilling its key corporate objectives, as well as commercial and clinical development milestones (Press release, Exelixis, NOV 1, 2017, View Source [SID1234521427]).

Exelixis is focused on maximizing the opportunity for its two internally discovered compounds, cabozantinib and cobimetinib, to improve care and outcomes for people with cancer around the world. The company’s top priority remains the ongoing commercialization of CABOMETYX (cabozantinib) tablets as a treatment for patients with advanced renal cell carcinoma (RCC) who have received prior anti-angiogenic therapy. During the third quarter of 2017, CABOMETYX generated $90.4 million in net product revenue, while COMETRIQ (cabozantinib) capsules for the treatment of patients with progressive, metastatic medullary thyroid cancer generated an additional $6.1 million in net product revenue, for a combined $96.4 million in net product revenue for the cabozantinib franchise.

“In addition to strong financial performance, the third quarter of 2017 was marked by significant clinical and regulatory milestones that continue to drive us forward in our mission to help cancer patients recover stronger and live longer,” said Michael M. Morrissey, Ph.D., President and Chief Executive Officer of Exelixis. “In August, we completed the filing for CABOMETYX in previously untreated advanced RCC, which has been accepted by the FDA and granted Priority Review. With an upcoming FDA action date of February 15, 2018, our commercial team is fully prepared for a potential launch of CABOMETYX in this expanded indication to bring this much needed option to even more patients with advanced RCC as quickly as possible. In addition, based on the positive results from the CELESTIAL pivotal trial, demonstrating that cabozantinib provided a statistically significant and clinically meaningful improvement in overall survival for patients with advanced hepatocellular carcinoma, we are moving rapidly to complete our U.S. regulatory filing in the first quarter of next year.”

Cabozantinib Highlights

Strong Growth in Cabozantinib Franchise Net Revenue. Cabozantinib generated $96.4 million in net product revenue during the third quarter of 2017, an increase of 10 percent from the second quarter of 2017 and an increase of 126 percent year-over-year.

Phase 3 CELESTIAL Trial Meets Primary Endpoint of Overall Survival (OS), with supplemental New Drug Application (sNDA) Filing Planned for Q1 2018. In October, Exelixis announced that the CELESTIAL trial met its primary endpoint of OS, with cabozantinib providing a statistically significant and clinically meaningful improvement in OS compared to placebo in patients with advanced hepatocellular carcinoma (HCC). The independent data monitoring committee for the study recommended that the trial should be stopped for efficacy following review of the second planned interim analysis. CELESTIAL is a randomized, global phase 3 trial of cabozantinib compared to placebo in patients with advanced HCC who have been previously treated with sorafenib. The safety data in the study were consistent with the established profile of cabozantinib. Based on these results, Exelixis plans to submit an sNDA to the U.S. Food and Drug Administration (FDA) in the first quarter of 2018. Detailed results from CELESTIAL will be submitted for presentation at a future medical conference.

Submission and Acceptance of sNDA for CABOMETYX for the Treatment of Previously Untreated Advanced RCC with FDA Priority Review. In August, Exelixis announced it had completed the submission of its sNDA to the FDA for CABOMETYX for the treatment of previously untreated advanced RCC. The sNDA submission is based on results from the CABOSUN randomized phase 2 trial of CABOMETYX compared to sunitinib in patients with previously untreated advanced RCC with intermediate- or poor-risk disease. After the quarter ended, the company announced the FDA had accepted the sNDA and granted Priority Review, assigning a Prescription Drug User Fee Act (PDUFA) action date of February 15, 2018.

Start of Phase 3 Trial of Cabozantinib in Combination with Nivolumab or with Nivolumab and Ipilimumab in Previously Untreated Advanced or Metastatic RCC. In July, Exelixis and Bristol-Myers Squibb (BMS) announced the initiation of CheckMate 9ER, the pivotal phase 3 trial evaluating cabozantinib in combination with two of BMS’ leading immunotherapies, nivolumab and ipilimumab, compared to sunitinib. The trial is planned to enroll 1,014 treatment-naïve patients, with a primary endpoint of progression-free survival.

Cabozantinib and Cobimetinib Data Presentations at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2017 Congress. In September, Exelixis-discovered compounds were the subject of 10 presentations at the ESMO (Free ESMO Whitepaper) 2017 Congress held in Madrid, Spain. Data from CABOSUN, the randomized phase 2 trial of cabozantinib compared to sunitinib in patients with previously untreated advanced RCC with intermediate- or poor-risk disease, were the subject of a poster discussion which showed cabozantinib demonstrated a clinically meaningful and statistically significant reduction in the rate of disease progression or death. Other cabozantinib presentations included an oral presentation of data from the phase 1b trial of cabozantinib, nivolumab, and ipilimumab in advanced genitourinary malignancies, as well as additional analyses of the phase 3 METEOR trial in advanced RCC. Cobimetinib presentations at the Congress included two data sets concerning forms of metastatic melanoma. The company, along with its collaboration partner Ipsen, also hosted an investor and media event in Madrid to discuss the data for cabozantinib presented at the Congress and to take part in a question and answer session with Drs. Toni Choueiri, Sumanta Pal and Thomas Powles.

Cobimetinib Highlights

Settlement of Arbitration between Exelixis and Genentech Regarding Companies’ Collaboration Agreement for Cobimetinib. In July, Exelixis announced a settlement of its arbitration with Genentech concerning claims asserted by Exelixis against Genentech related to the development and commercialization of cobimetinib, the Exelixis-discovered medicine that is marketed as COTELLIC. The revised revenue and cost-sharing arrangement resolves the companies’ dispute pursuant to the arbitration demand filed on June 3, 2016, and aligns both companies’ interests in advancing cobimetinib as a promising therapy for patients with multiple forms of cancer. Moving forward, the revenue applied to the profit and loss statement for the COTELLIC collaboration (Collaboration P&L) will now be calculated using the average of the quarterly net selling prices of COTELLIC and any additional branded Genentech product(s) prescribed with COTELLIC. Exelixis will continue to share U.S. commercialization costs, while Genentech’s portion of these costs will now be allocated to the Collaboration P&L in proportion to the number of Genentech products in any given combination including COTELLIC.

Corporate Highlights

Updates from Partnered Programs with Daiichi Sankyo and BMS. In the third quarter and shortly after the quarter ended, Exelixis announced milestones for compounds from two of its partnered programs.

In September, collaborator Daiichi Sankyo announced positive top-line results from ESAX-HTN, a phase 3 pivotal trial of esaxerenone (formerly CS-3150) in patients with essential hypertension in Japan. As a result, Daiichi Sankyo plans to submit a Japanese regulatory application for esaxerenone for an essential hypertension indication in the first quarter of 2018. Daiichi Sankyo also announced the initiation of a pivotal trial of esaxerenone in patients with diabetic nephropathy. ESAX-DN is a phase 3 study in patients with type-2 diabetes with microalbuminuria who are taking an angiotensin II receptor blocker (ARB) or an angiotensin converting enzyme (ACE) inhibitor in Japan.

In October, Exelixis earned a $10 million milestone from BMS as part of the two companies’ worldwide collaboration for compounds targeting retinoic acid-related orphan receptor (ROR), a family of nuclear hormone receptors implicated in inflammatory conditions. The milestone was triggered by BMS’ filing of a Clinical Trial Authorization in Europe for a first-in-human study of a RORγt inverse agonist.

Debut of New Mission-Driven Corporate Branding and Website. In September, Exelixis introduced new corporate branding aligned with its mission, growth strategy and commitment to bring best-in-class oncology medicines to market. The new branding included a redesigned logo crafted as a wordmark with an extractable symbol that will become emblematic of Exelixis, as well as the revised corporate tagline, Resilience.Results.Remission. The new corporate branding celebrates the company’s unwavering perseverance to deliver results, and its aspirational commitments to the diverse audiences it serves.

Third Quarter 2017 Financial Results

Total revenue for the quarter ended September 30, 2017 was $152.5 million, compared to $62.2 million for the comparable period in 2016. Total revenue includes $96.4 million and $56.1 million of net product revenue and collaboration revenue, respectively, compared to $42.7 million and $19.5 million for the comparable period in 2016. The increase in net product revenues primarily reflects the growth in product sales of CABOMETYX since the product’s launch in late April 2016. Collaboration revenues for the quarter ended September 30, 2017 include two milestones totaling $45.0 million resulting from Ipsen’s receipt of the validation from the European Medicines Agency for the application for variation to the CABOMETYX marketing authorization for the addition of a new indication in first-line treatment of advanced RCC in adults; we also recognized $11.1 million in additional revenue from the company’s collaboration agreements with Ipsen, Takeda and Genentech during the quarter. Collaboration revenues for the comparable period in 2016 include the recognition of a $15.0 million milestone from Daiichi Sankyo and $4.5 million in revenue from the company’s collaboration agreements with Ipsen, Takeda and Genentech.

Research and development expenses for the quarter ended September 30, 2017 were $28.5 million, compared to $20.3 million for the comparable period in 2016. The increase in research and development expenses was primarily a result of increases in personnel expenses, clinical trial costs and consulting and outside services. The increase in personnel-related expenses was primarily a result of an increase in headcount associated with the re-launch of the company’s internal discovery program and the build-out of the company’s medical affairs organization. The increase in clinical trial costs was predominantly due to start-up costs associated with CheckMate 9ER and start-up costs associated with the phase 1b trial of cabozantinib and atezolizumab in locally advanced or metastatic solid tumors; those increases were partially offset by decreases in costs related to METEOR, the company’s completed phase 3 pivotal trial comparing CABOMETYX to everolimus in patients with advanced RCC. The increase in consulting and outside services was primarily in support of the company’s medical affairs organization.

Selling, general and administrative expenses for the quarter ended September 30, 2017 were $38.1 million, compared to $32.5 million for the comparable period in 2016. The increase in selling, general and administrative expenses was primarily a result of increases in consulting and outside services to support the company’s marketing activities and in personnel expenses resulting primarily from an increase in general and administrative headcount to support the company’s commercial and research and development organizations. Those increases were partially offset by a decrease in losses under the collaboration agreement with Genentech driven by Genentech’s change in cost allocation approach in December 2016.

Other income (expense), net for the quarter ended September 30, 2017 was $3.4 million compared to $(18.5) million for the comparable period in 2016. The increase in other income (expense), net, was primarily due to a $13.8 million loss on extinguishment of debt associated with the conversions of the 4.25% Convertible Subordinated Notes due 2019 (2019 Notes) during the third quarter of 2016, and a $7.8 million decrease in interest expense due to the conversions and the redemption of the 2019 Notes during the third and fourth quarters of 2016, the repayment of the Silicon Valley Bank term loan in March 2017 and the repayment of the Deerfield Notes in June 2017.

Net income for the quarter ended September 30, 2017 was $81.4 million, or $0.28 per share, basic and $0.26 per share, diluted, compared to a net loss of $(11.3) million, or $(0.04) per share, basic and diluted, for the comparable period in 2016. The transition to profitability was primarily due to the increase in net product revenues, reflecting the growth in product sales of CABOMETYX since the launch in late April 2016, which was supplemented by the growth in our collaboration revenues and partially offset by the increase in operating expenses.

Cash and cash equivalents, short- and long-term investments and long-term restricted cash and investments totaled $422.3 million at September 30, 2017, as compared to $479.6 million at December 31, 2016.

2017 Financial Guidance

The company is updating its guidance that total costs and operating expenses for the full year will be between $285 million and $295 million. This guidance includes approximately $25 million of non-cash costs and expenses related primarily to stock-based compensation expense.

Basis of Presentation

Exelixis adopted a 52- or 53-week fiscal year that generally ends on the Friday closest to December 31st. For convenience, references in this press release as of and for the fiscal periods ended September 29, 2017, December 30, 2016 and September 30, 2016 are indicated as being as of and for the periods ended September 30, 2017, December 31, 2016 and September 30, 2016, respectively.

Conference Call and Webcast

Exelixis management will discuss the company’s financial results for the third quarter of 2017 and provide a general business update during a conference call beginning at 5:00 p.m. EDT / 2:00 p.m. PDT today, Wednesday, November 1, 2017.

To access the webcast link, log onto www.exelixis.com and proceed to the News & Events / Event Calendar page under the Investors & Media heading. Please connect to the company’s website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to listen to the webcast. Alternatively, please call 855-793-2457 (domestic) or 631-485-4921 (international) and provide the conference call passcode 96645455 to join by phone.

A telephone replay will be available until 8:00 p.m. EDT on November 3, 2017. Access numbers for the telephone replay are: 855-859-2056 (domestic) and 404-537-3406 (international); the passcode is 96645455. A webcast replay will also be archived on www.exelixis.com for one year.