On August 4, 2016 Intellia Therapeutics, Inc. (NASDAQ:NTLA), a leading genome editing company focused on the development of potentially curative therapeutics using CRISPR/Cas9 technology, reported financial results and recent company highlights for the quarter ended June 30, 2016 (Press release, Intellia Therapeutics, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2193255 [SID:1234514254]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Intellia has made substantial progress with our science, financing and operations in the first half of 2016," said Nessan Bermingham, Ph.D., Chief Executive Officer and Founder, Intellia Therapeutics. "Our product focus, therapeutic discovery and development strength, delivery expertise and intellectual property portfolio make Intellia well positioned to advance CRISPR/Cas9 into clinically meaningful genome editing therapeutics for patients with severe and life-threatening diseases."

Recent Highlights

On April 11, 2016, Intellia signed a multi-year research and development collaboration and licensing agreement with Regeneron Pharmaceuticals to advance CRISPR/Cas9 genome editing technology for in vivo therapeutic development. Regeneron has the exclusive rights to discover and develop CRISPR-based products against up to 10 targets, focused primarily on therapies for a broad range of diseases that may be treated by editing genes in the liver. Transthyretin amyloidosis (TTR) is the first target to be jointly developed and potentially commercialized by the companies.
The Company also strengthened its leadership team with the addition of Perry Karsen as the Chairman of Intellia’s Board of Directors. Mr. Karsen brings decades of biopharmaceutical leadership experience to his role as Chairman. He most recently held senior leadership positions at Celgene Corporation, including Chief Operations Officer and Executive Vice President as well as Chief Executive Officer of Celgene’s cellular therapeutics division.
The Company, since its inception, has raised an aggregate of $350.5 million, of which $170.5 million is from the initial public offering and concurrent private placements in May 2016, $95 million is through collaboration agreements, and $85 million is from the sale of convertible preferred stock.
Second Quarter 2016 Financial Results

As of June 30, 2016, Intellia had $300.7 million in cash and cash equivalents, which includes net proceeds from its initial public offering. Net loss for the second quarter 2016 was $6.9 million, compared to $3.0 million in the same period in 2015.

Collaboration revenue was $4.2 million in the second quarter 2016, compared to $1.4 million in the same period of 2015. The increase in collaboration revenue is primarily attributable to the inclusion of amounts recognized under the Regeneron collaboration in 2016.

Research and development expenses in the second quarter 2016 were $7.4 million, compared to $2.0 million in the same period in 2015. This increase in expenses is primarily attributable to the growth of the Company’s research and development organization to accelerate the development of the CRISPR/Cas9 platform and Intellia’s proprietary and partnered pipeline candidates.

General and administrative expenses were $3.7 million in the second quarter of 2016, compared to $2.8 million for the same period in 2015. The increase in general and administrative expenses is primarily driven by incremental expenses to support the Company’s operations as a new public company, as well as increased headcount-based expenses to support the Company’s overall growth.

Research & Development Highlights

Intellia is advancing its pipeline through a risk-mitigated approach focused on sentinel indication development, platform delivery expansion, and preclinical and clinical scale up. The Company is focused on developing the following programs:

Programs Partnerships Type of
Edit Delivery Upcoming Milestones
In Vivo
Transthyretin Amyloidosis (ATTR) Co-developing with
Regeneron Knockout LNP to Liver Select 1 to 2 development candidates and advance to IND enabling
studies in 2H2017/1H2018
Alpha-1 Antitrypsin
Deficiency (AATD) Proprietary Knockout LNP to Liver
Repair
Hepatitis B Virus (HBV) Proprietary Knockout LNP to Liver
Inborn Errors of
Metabolism (IEMs) Proprietary Knockout LNP to Liver
Repair
Insertion
Ex Vivo
Hematopoietic
Stem Cells (HSCs) Selectively partnered
with Novartis;
proprietary Knockout Electroporation First Novartis IND expected to be submitted in 2018
Repair
Insertion
CAR T Cells Partnered with
Novartis Knockout Electroporation Advance preclinical development
Insertion

Upcoming Events

Intellia will present delivery data utilizing CRISPR/Cas9 at the Cold Spring Harbor Laboratory Meeting, taking place from August 17-20, 2016. The oral presentation, Robust In Vivo Gene Editing in Mouse Hepatocytes with Systemic Lipid Nanoparticle Delivery of CRISPR/Cas9 Components, will be presented by Intellia’s Chief Technology Officer, David Morrissey, Ph.D.
Intellia’s CEO & Founder Nessan Bermingham, Ph.D., will be presenting at the Wedbush PacGrow Healthcare Conference in New York on August 17, 2016, the Wells Fargo Healthcare Conference in Boston, September 7-8, 2016, the Morgan Stanley Global Healthcare Conference in New York on September 12, 2016, and the Leerink Partners Rare Disease Roundtable Series in New York on September 28-29, 2016.

On August 4, 2016 Endocyte, Inc. (NASDAQ:ECYT), a leader in developing targeted small molecule drug conjugates (SMDCs) and companion imaging agents for personalized therapy, reported financial results for the second quarter ending June 30, 2016, and provided a clinical update (Press release, Endocyte, AUG 4, 2016, View Source [SID:1234514253]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Excitement is building around our lead assets, EC1456 and EC1169, as data to date has demonstrated attractive safety profiles and signs of anti-tumor activity for both agents. Later this month, we will advance EC1456 into targeted patients with non-small cell lung cancer (NSCLC) expressing the folate receptor, who are most likely to respond," said Mike Sherman, Endocyte’s president and chief executive officer. "We look forward to our first visibility into efficacy data for both compounds during the second half of the year."

EC1456 (Folate-tubulysin)

The EC1456 phase 1 dose escalation data presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting in June highlighted a 45 percent rate of stable disease as best study response across a patient population that included more than a dozen cancer types. Patients are enrolled regardless of their folate receptor (FR) status during this first part of the study.

Endocyte announced today that the maximum tolerated dose (MTD) has been determined in the twice weekly (BIW) dosing schedule for EC1456 at 6.0 mg/m2. Enrollment of FR-positive NSCLC patients in the BIW expansion cohort will begin in August. In this expansion cohort the company plans to evaluate efficacy endpoints, including tumor response, in addition to ongoing assessment of safety. Endocyte’s companion imaging agent, EC20 (etarfolatide), will be utilized to select these patients. The company is continuing to evaluate the MTD in the once weekly dosing regimen.

EC1169 (PSMA-tubulysin)

The EC1169 phase 1 dose escalation study, as presented at ASCO (Free ASCO Whitepaper), highlighted that all patients in the study have some level of prostate specific membrane antigen (PSMA) positivity, and the drug has been well tolerated.

"EC1169 has the potential to be a truly differentiated therapy, and it has shown signs of anti-tumor activity, even at low doses, including reductions of prostate-specific antigen levels greater than 50 percent in some patients," commented Alison Armour, M.D., Endocyte’s chief medical officer. "We have worked with key opinion leaders in prostate cancer to define the expansion phase of this trial, and once we determine the MTD, we plan to begin enrolling second-line chemotherapy metastatic castrate resistant prostate cancer (mCRPC) patients, with a primary study endpoint of radiological progression free survival. We also plan to include an exploratory assessment of taxane-naïve patients, which could allow the possibility of an earlier line therapy."

Upcoming Expected Milestones

Phase 1 updates on EC1456 and EC1169 at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) conference in October 2016
Complete enrollment of first 15 patient cohort in EC1456 expansion trial; single agent efficacy data (tumor response) in NSCLC at a medical meeting in late 2016 or early 2017
EC1169 single agent efficacy data in prostate cancer in late 2016 or early 2017
Updates on plans for earlier stage programs
Second Quarter 2016 Financial Results

Endocyte reported a net loss of $14.0 million, or $0.33 per basic and diluted share, for the second quarter of 2016, compared to a net loss of $10.6 million, or $0.25 per basic and diluted share, for the same period in 2015.

Research and development expenses were $6.8 million for the second quarter of 2016, compared to $6.7 million for the same period in 2015. The slight increase was primarily attributable to an increase in expenses related to the EC1456 and EC1169 dose escalation trials, which was partially offset by a decrease in expenses related to the TARGET trial, which is now complete, and a decrease in compensation expenses, primarily related to noncash stock compensation.

General and administrative expenses were $7.4 million for the second quarter of 2016, compared to $4.1 million for the same period in 2015. The increase in expenses was primarily attributable to an increase in compensation expense related to the resignation of the company’s former Chief Executive Officer, P. Ron Ellis. The company executed a separation agreement with Mr. Ellis during the three months ended June 30, 2016, and under this agreement, the company incurred additional compensation expense of $2.8 million for noncash stock compensation and $0.8 million of expense for a cash payment. The increase in general and administrative expenses was partially offset by a decrease in legal fees.

Cash, cash equivalents and investments were $154.6 million at June 30, 2016, compared to $188.6 million at June 30, 2015, and $173.6 million at December 31, 2015.

Financial Expectations

The company revised guidance for its expected cash balance at the end of 2016 to be above $130 million. Previous guidance was between $125 and $130 million cash balance at the end of 2016.

About the EC1456 Phase 1 Trial

This open-label, multicenter, non-randomized, dose-escalation study is divided into two parts. The first part of the study was designed to evaluate safety and tolerability and identify the MTD of EC1456 in patients with metastatic or locally advanced solid tumors.

The second part of the study will determine the efficacy of EC1456 in patients with FR-positive NSCLC treated with the MTD. The BIW dosing schedule at 6.0 mg/m2 will be evaluated first. Upon the completion of this dosing schedule, additional patients will be enrolled in a once per week dosing schedule cohort. Single agent tumor response will be evaluated, which will inform and may trigger additional work in combination therapies and indications such as triple-negative breast cancer, ovarian cancer and endometrial cancer. Patient FR-status will be determined using the investigational companion imaging agent, EC20 (etarfolatide). EC1456 is currently being evaluated in a phase 1 study in patients with advanced solid tumors (ClinicalTrials.gov Identifier: NCT01999738).

About the EC1169 Phase 1 Trial

This open-label, multicenter, non-randomized, dose-escalation study is divided into two parts. The first part of the study was designed to evaluate safety and tolerability and identify the MTD of EC1169 in patients with prostate cancer.

The second part of the study will determine the efficacy of the MTD of EC1169 in mCRPC patients who have been previously treated with a taxane-based chemotherapy. The primary study endpoint will be radiological progression free survival in patients selected as PSMA-positive. A second cohort will include an exploratory assessment of taxane-naïve patients. Patient PSMA status will be determined using the investigational companion imaging agent, EC0652. EC1169 is currently being evaluated in a phase 1 study in mCRPC patients (ClinicalTrials.gov Identifier: NCT02202447).

On August 4, 2016 Emergent BioSolutions Inc. (NYSE:EBS) reported financial results for the quarter and six months ended June 30, 2016 (Press release, Emergent BioSolutions, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2193280 [SID:1234514252]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

FINANCIAL HIGHLIGHTS
Total revenues: Q2 2016 of $101.5 million; six months 2016 of $212.5 million
GAAP net loss: Q2 2016 of $(10.9) million, or $(0.27) per diluted share; six months 2016 of $(7.0) million, or $(0.17) per diluted share
Adjusted net income/loss: Q2 2016 net loss of $(7.1) million, or $(0.18) per diluted share; six months 2016 net income of $0.3 million, or $0.01 per diluted share
EBITDA: Q2 2016 of $(4.8) million, or $(0.12) per diluted share; six months of $12.4 million, or $0.31 per diluted share
Adjusted EBITDA: Q2 2016 of $(2.2) million, or $(0.05) per diluted share; six months 2016 of $17.3 million, or $0.43 per diluted share

Q2 2016 & RECENT BUSINESS ACCOMPLISHMENTS
Spin-off of Aptevo Therapeutics completed
Repurchase program for up to $50 million of the Company’s common stock authorized
Building 55 milestones achieved towards Food and Drug Administration (FDA) licensure
Supplemental Biologics License Application accepted
Pre-approval inspection completed
PDUFA date of August 15, 2016 established
BioThrax (Anthrax Vaccine Adsorbed) granted Orphan Drug status by the FDA for post-exposure prophylaxis (PEP) of anthrax disease
Centers for Disease Control and Prevention (CDC) confirmed intent to award a follow-on procurement contract for BioThrax (Anthrax Vaccine Adsorbed) by September 23, 2016
U.S. Department of Health and Human Services (HHS) issued a request for proposal seeking a next generation anthrax vaccine; today the company submitted a response proposing its product candidate NuThrax (Anthrax Vaccine Adsorbed with CPG 7909 Adjuvant)
Task order for up to $21.9 million to develop and manufacture three cGMP lots of a Zika vaccine received from the Biomedical Advanced Research and Development Authority
2016 OUTLOOK
The Company will continue to temporarily postpone its financial guidance for 2016 until further clarity is reached on the following U.S. government contracts and solicitations:
Current BioThrax procurement contract: By letter dated April 26, 2016 the CDC indicated that it anticipated procuring less than the total remaining doses of BioThrax under the existing procurement contract and did not quantify the number of doses anticipated to be procured.
Follow-on BioThrax procurement contract: On June 21, 2016, HHS issued a Sole Source Notification indicating its intention by September 23, 2016 to award to the Company a follow-on contract to procure 29.4 million doses of BioThrax with a period of performance of five years. The terms of the contract, including the price per dose and the timing of deliveries, remain subject to contract negotiation.
Notice of Solicitation for Next Generation Anthrax Vaccine: On June 21, 2016, HHS issued a request for proposal seeking a next generation anthrax vaccine for post-exposure prophylaxis of anthrax disease with the ability to confer protection in one or two doses and meeting additional specific criteria relating to safety, efficacy and manufacturing.
2016 FINANCIAL PERFORMANCE
(I) Quarter Ended June 30, 2016 (unaudited)
Revenues
Product Sales
For Q2 2016, product sales were $58.5 million, a decrease of 29% as compared to 2015. The decrease in BioThrax sales was primarily due to a reduction in shipments to the CDC consistent with the April 26, 2016 letter from CDC that indicated that it anticipated procuring less than the total remaining doses of BioThrax under the existing procurement contract. The increase in Other Biodefense sales was primarily due to VIGIV sales to the Strategic National Stockpile (SNS). The increase in Aptevo sales was mainly due to increased sales of IXINITY (received FDA licensure and launched in Q2 2015).

(in millions) Three Months Ended
June 30,
2016 2015 % Change
Product Sales
BioThrax $ 40.0 $ 72.2 (45 )%
Other Biodefense $ 8.3 $ 2.8 192 %
Total Biodefense $ 48.3 $ 75.1 (36 )%
Total Aptevo Products $ 10.2 $ 6.9 47 %
Total Product Sales $ 58.5 $ 82.0 (29 )%

Contract Manufacturing
For Q2 2016, revenue from the Company’s contract manufacturing operations was $10.2 million, an increase of 15% as compared to 2015. The increase is due primarily to services related to plasma collection and related testing activities.
Contracts, Grants and Collaborations
For Q2 2016, contracts, grants and collaborations revenue was $32.8 million, a decrease of 7% as compared to 2015.
Operating Expenses
Cost of Product Sales and Contract Manufacturing
For Q2 2016, cost of product sales and contract manufacturing was $35.6 million, an increase of 31% as compared to 2015, attributable to an increase in rejected BioThrax work-in-process material, as well as increased Other Biodefense and Aptevo product sales.
Research and Development
For Q2 2016, gross research and development (R&D) expenses were $35.3 million, a decrease of 14% as compared to 2015. The decrease primarily reflects lower contract service costs.
For Q2 2016, net R&D expenses were $2.5 million, a decrease of 55% as compared to 2015. Net R&D expenses, which are more representative of the Company’s actual out-of-pocket investment in product development, are calculated as gross research and development expenses less contracts, grants and collaboration revenues.
(in millions) Three Months Ended
June 30,
2016 2015 % Change
Research and Development Expenses (Gross) $ 35.3 $ 40.9 (14 )%
Adjustments:
– Contracts, grants and collaborations revenues $ 32.8 $ 35.2 (7 )%
Net Research and Development Expenses $ 2.5 $ 5.7 (55 )%

Selling, General and Administrative
For Q2 2016, selling, general and administrative expenses were $44.1 million, an increase of 21% as compared to 2015. This increase includes costs associated with the Aptevo spin-off along with increased professional services to support our strategic growth initiatives, higher IXINITY selling costs, and information technology investments.
Net Income/(Loss)
For Q2 2016, GAAP net loss was $(10.9) million, or $(0.27) per diluted share, versus GAAP net income of $14.1 million, or $0.32 per diluted share, in 2015.
(II) Six Months Ended June 30, 2016 (unaudited)
Revenues
Product Sales
For the six months of 2016, product sales were $130.3 million, an increase of 30% as compared to 2015. The increase in BioThrax sales was primarily due to the suspension of shipments to the CDC in Q1 2015 following the discovery of foreign particles in a limited number of vials in two manufactured lots of BioThrax, resulting in reduced sales volume in the first half of 2015. The decrease in Other Biodefense sales was primarily due to lower RSDL shipments. The increase in Aptevo sales was mainly due to increased sales of IXINITY.

(in millions) Six Months Ended
June 30,
2016 2015 % Change
Product Sales
BioThrax $ 99.1 $ 72.2 37 %
Other Biodefense $ 13.0 $ 14.8 (12 )%
Total Biodefense $ 112.1 $ 87.1 29 %
Total Aptevo Products $ 18.1 $ 13.3 37 %
Total Product Sales $ 130.3 $ 100.3 30 %

Contract Manufacturing
For the six months of 2016, revenue from the Company’s contract manufacturing operations was $17.7 million, a decrease of 16% as compared to 2015. The change is primarily due to a decrease of $3.8 million from services related to the production of an MVA Ebola vaccine in 2015.
Contracts, Grants and Collaborations
For the six months of 2016, contracts, grants and collaborations revenue was $64.5 million, a decrease of 6% as compared to 2015.
Operating Expenses
Cost of Product Sales and Contract Manufacturing
For the six months of 2016, cost of product sales and contract manufacturing was $64.1 million, an increase of 39% as compared to 2015, primarily attributable to the 37% increase in BioThrax product sales.
Research and Development
For the six months of 2016, gross research and development (R&D) expenses were $69.5 million, a decrease of 13% as compared to 2015. The decrease primarily reflects lower contract service costs.
For the six months of 2016, net R&D expenses were $5.0 million, a decrease of 56% as compared to 2015.
(in millions) Six Months Ended
June 30,
2016 2015 % Change
Research and Development Expenses (Gross) $ 69.5 $ 79.6 (13 )%
Adjustments:
– Contracts, grants and collaborations revenues $ 64.5 $ 68.3 (6 )%
Net Research and Development Expenses $ 5.0 $ 11.3 (56 )%

Selling, General and Administrative
For the six months of 2016, selling, general and administrative expenses were $83.9 million, an increase of 18% as compared to 2015. This increase includes costs associated with the Aptevo spin-off along with increased professional services to support our strategic growth initiatives, additional selling effort for IXINITY, and information technology investments.
Net Loss
For the six months of 2016, GAAP net loss was $(7.0) million, or $(0.17) per diluted share, versus GAAP net loss of $(7.4) million, or $(0.19) per diluted share, in 2015.
(III) RECONCILIATION OF GAAP NET INCOME/(LOSS) TO ADJUSTED NET INCOME/(LOSS), EBITDA AND ADJUSTED EBITDA
This press release contains three financial measures (Adjusted Net Income/(Loss), EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), and adjusted EBITDA) 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/(Loss) 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. Adjusted EBITDA also excludes specified items that can be highly variable and the non-cash impact of certain purchase accounting adjustments. 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.
Reconciliation of GAAP Net Income/(Loss) to Adjusted Net Income/(Loss)
The following table provides a reconciliation of GAAP Net Income/(Loss) to Adjusted Net Income/(Loss) for the three month periods as indicated.

(in millions, except per share value) Three Months Ended June 30,
2016 2015 Source
GAAP Net Income/(Loss) $ (10.9 ) $ 14.1 NA
Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 2.6 1.4 SG&A
+ Non-cash amortization charges 2.8 2.8 COGS, SG&A,
Other Income
Tax effect (1.6 ) (1.3 ) NA
Total Adjustments 3.8 2.9 NA
Adjusted Net Income/(Loss)
Adjusted Net Income/(Loss) per Diluted Share
$
$ (7.1
(0.18 )
) $
$
17.0
0.36
NA
The following table provides a reconciliation of GAAP Net Loss to Adjusted Net Income/(Loss) for the six month periods as indicated.
(in millions, except per share value) Six Months Ended June 30,
2016 2015 Source
GAAP Net Loss $ (7.0 ) $ (7.4 ) NA
Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 4.9 2.5 SG&A
+ Non-cash amortization charges 5.5 5.3 COGS, SG&A,
Other Income
+ Impact of purchase accounting on inventory step-up – 0.1 SG&A
Tax effect (3.1 ) (2.4 ) NA
Total Adjustments 7.3 5.6 NA
Adjusted Net Income/(Loss)
Adjusted Net Income/(Loss) per Diluted Share $
$ 0.3
0.01
$
$ (1.8
(0.05 )
) NA
Reconciliation of GAAP Net Income/(Loss) to EBITDA and Adjusted EBITDA
The following table provides a reconciliation of GAAP Net Income/(Loss) to EBITDA and Adjusted EBITDA for the three month periods as indicated.

(in millions, except per share value) Three Months Ended June 30,
2016 2015
GAAP Net Income/(Loss) $ (10.9 ) $ 14.1
Adjustments:
+ Depreciation & Amortization 8.5 8.4
+ Provision For/(Benefit From) Income Taxes (3.9 ) 5.5
+ Total Interest Expense 1.5 1.6
Total Adjustments 6.1 15.5
EBITDA
EBITDA per Diluted Share $
$ (4.8
(0.12
)
) $
$ 29.6
0.62

Additional Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 2.6 1.4
Total Additional Adjustments 2.6 1.4
Adjusted EBITDA
Adjusted EBITDA per Diluted Share $
$ (2.2
(0.05
)
) $
$ 31.0
0.65

The following table provides a reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA for the six month periods as indicated.
(in millions, except per share value) Six Months Ended June 30,
2016 2015
GAAP Net Loss $ (7.0 ) $ (7.4 )
Adjustments:
+ Depreciation & Amortization 17.0 16.5
+ Provision For/(Benefit From) Income Taxes (0.6 ) (2.8 )
+ Total Interest Expense 3.0 3.3
Total Adjustments 19.4 17.0
EBITDA
EBITDA per Diluted Share $
$ 12.4
0.31
$
$ 9.6
0.25
Additional Adjustments:
+ Spin-off and acquisition-related costs (transaction & integration) 4.9 2.5
+ Impact of purchase accounting on inventory step-up - 0.1
Total Additional Adjustments 4.9 2.6
Adjusted EBITDA
Adjusted EBITDA per Diluted Share $
$ 17.3
0.43 $
$ 12.2
0.32

On August 4, 2016 Apricus Biosciences, Inc. (Nasdaq:APRI), a biopharmaceutical company advancing innovative medicines in urology and rheumatology, reported financial results for the second quarter of 2016 and provided a corporate update on its priorities for 2016 (Press release, Apricus Biosciences, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2193174 [SID:1234514249]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"In the second quarter, we sharpened our strategic focus in an effort to maximize the regulatory and commercial success of Vitaros with the goal of building a thriving and profitable global Vitaros brand," stated Richard W. Pascoe, Chief Executive Officer. "Our primary corporate goal continues to be the potential regulatory approval of Vitaros in the United States. In an effort to advance our Vitaros NDA resubmission, we requested, and we were recently granted, a Type B meeting with the FDA, scheduled for November 17, 2016. The purpose of this meeting is to confirm our strategy for addressing the deficiencies contained in the original 2008 Complete Response letter. We will incorporate any FDA feedback into the final submission, which we expect to occur as soon as possible after the meeting. We view the granting of this meeting as a favorable development and a reflection of our commitment to maintaining a constructive relationship with all regulatory authorities. Additionally, we have consolidated Vitaros territories in Europe and Asia with our newest partner Ferring in an effort to expand the global availability of Vitaros and increase revenue in important markets such as Germany. Moreover, we have substantially reduced our operating expenses and improved our balance sheet as part of our strategy to achieve profitability in 2017."

Second Quarter Highlights and Recent Developments

Apricus updated its corporate goals early in the second quarter to focus on increasing Vitaros’ value through the fostering and expansion of its commercial partnerships, in the U.S. and globally, and strengthening the Company’s financial position. Second quarter and recent highlights include:

Expanded the Company’s exclusive Vitaros distribution agreement with Ferring International S.A. in Latin America to now include Germany, Austria, Belgium, Denmark, Finland, Iceland, Luxembourg, Norway, the Netherlands, Sweden, Switzerland and certain countries in Asia (previously Sandoz’s territories), the United Kingdom (previously Takeda’s territory) and Korea for up to an additional $3.85 million in upfront and pre-commercialization milestone payments and up to an additional $1.5 million in launch milestone payments, plus royalties on future net sales;
Closed on a common stock purchase agreement with Aspire Capital. Aspire Capital completed an initial purchase of 2,531,645 shares of common stock for proceeds of $1.0 million and has committed to purchase up to $6.0 million in additional shares of common stock over the next 24 months. No warrants were associated with this agreement;
Announced receipt of regulatory approval of Vitaros in Lebanon by our partner in the Middle East, Elis Pharmaceuticals, marking an important entry into a highly attractive Middle Eastern erectile dysfunction market; and
Obtained regulatory approval in Europe for an improved delivery device material of construction for the refrigerated version of Vitaros.
Strategic Priorities

Apricus continues to focus on achieving the following key strategic objectives:

Vitaros* (alprostadil)

Continue implementation of the U.S. regulatory approval strategy to address the safety and manufacturing issues raised by the FDA in the original Vitaros NDA submission, with an NDA resubmission targeted for the fourth quarter of 2016 and an approval decision expected after a six month review period;
Continue to support the Company’s ex-U.S. partners’ efforts to build a global brand and increase revenue by supporting new commercial launches by the Company’s partners and assisting the Company’s partners in obtaining additional regulatory approvals in their respective territories; and
Continue to generate the required data in 2016 to support delivery device improvements and related regulatory submission(s) with a priority to support the U.S. NDA resubmission of the refrigerated version of Vitaros.
RayVa(alprostadil)

Explore Orphan Drug Designation in the U.S. and EU; and
Explore global or regional partnerships prior to initiating the Phase 2b study.
Corporate/Financial

Reduce operating expenses by approximately 30% in 2016 and 60% in 2017 as compared to 2015 operating expenses; and
Grow Vitaros revenue, seek non-dilutive capital, and utilize lower cost of capital financial instruments to fund operations with the goal of achieving profitability in 2017.
Second Quarter Financial Results

Revenue for each of the quarters ended June 30, 2016 and 2015 was $0.5 million. Revenue during the quarter ended June 30, 2016 was comprised of $0.3 million in royalty revenues, an increase of $0.2 million or 305.3% over the quarter ended June 30, 2015. Revenue during the quarter ended June 30, 2015 included $0.4 million in product sales, the decline of which in 2016 was a result of our commercialization partners working directly with our manufacturers. Net loss for the quarter ended June 30, 2016 was $3.3 million, or loss per share of $0.05, compared to a net loss of $5.2 million, or $0.10 per share for the second quarter of 2015. Reducing the net loss for the quarter ended June 30, 2016 was a non-cash change in the fair value of the Company’s warrant liability in the amount of $1.6 million.

As of June 30, 2016, cash and cash equivalents totaled $2.7 million, compared to $3.9 million as of December 31, 2015. Cash and cash equivalents at June 30, 2016 do not reflect the receipt of $2.0 million in upfront payments received in July related to the Ferring Northern Europe and Asia territory expansion, nor any proceeds from sales of common stock to Aspire Capital.

2016 Financial Outlook

Early in the second quarter of 2016, Apricus reduced its staff, including the executive team, by approximately 30%, decreased the size of the Board by one member and reduced the Board’s cash compensation. Apricus plans to continue to reduce operating expenses (excluding non-cash stock-based compensation expense and depreciation expense), with a goal of achieving reductions of approximately 30% in 2016 and 60% in 2017 as compared to 2015 operating expenses (excluding non-cash stock-based compensation expense and depreciation expense).

In 2016, Apricus expects to continue to generate cash from milestone or licensing payments and royalty revenues from its partners’ sales of Vitaros. Apricus will also continue to pursue out-licensing opportunities for Vitaros in Japan and China. Apricus’ expenditures will include minimal costs for the preparatory Phase 2b clinical development of RayVa, as well as costs for activities associated with supporting the regulatory approval of Vitaros in the U.S. and the commercialization of Vitaros in Europe.

On August 4, 2016 Momenta Pharmaceuticals, Inc. (Nasdaq:MNTA) reported its financial results for the second quarter ended June 30, 2016 (Press release, Momenta Pharmaceuticals, AUG 4, 2016, View Source [SID:1234514248]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

For the second quarter of 2016, the Company reported total revenues of $26.4 million, including $20.7 million in product revenues from Sandoz’s sale of Glatopa (glatiramer acetate injection). Momenta reported a net loss of $(21.0) million, or $(0.31) per share for the second quarter compared to a net loss of $(2.2) million, or $(0.04) per share for the same period in 2015. At June 30, 2016, the Company had cash, cash equivalents, and marketable securities of $336.9 million compared to $362.8 million at March 31, 2016.

"We are pleased with the growth in product revenues from Glatopa this quarter and look forward to the potential launch of our Glatopa 40 mg product next year," said Craig A. Wheeler, President and Chief Executive Officer of Momenta Pharmaceuticals. "During the remainder of 2016 we plan to announce several key milestones including announcing top-line data from a pivotal trial for M923, a biosimilar candidate of HUMIRA developed in collaboration with Baxalta, the initiation of a clinical trial for M834, a biosimilar candidate of ORENCIA being developed in collaboration with Mylan, and completing enrollment of the single ascending dose portion of our Phase 1 trial for M281, a novel anti-FcRn antibody candidate."

Second Quarter Highlights and Recent Events

Complex Generics:

In the second quarter of 2016, Momenta recorded $20.7 million in product revenues from Sandoz’s Glatopa sales.
The ANDA submitted by Sandoz for a three-times-a-week generic COPAXONE 40 mg (glatiramer acetate injection) is under FDA review. The Company expects to receive tentative regulatory approval in 2016.
A district court trial challenging four of Teva’s five Orange Book-listed patents for COPAXONE 40 mg (glatiramer acetate injection) is scheduled for September 26, 2016.
Biosimilars:

In April 2016, Momenta and its collaboration partner Baxalta, now a part of Shire, completed enrollment in the pivotal clinical trial for M923, a biosimilar candidate of HUMIRA (adalimumab) and the companies expect to release results in late 2016. The companies are targeting first regulatory submission for marketing approval in 2017 and a first commercial launch as early as 2018.
Momenta’s global collaboration with Mylan to develop, manufacture and commercialize six of the Company’s biosimilar candidates is progressing. The companies have prioritized three lead programs including M834, a biosimilar candidate of ORENCIA (abatacept).
Novel Drugs:

Necuparanib (novel oncology candidate)

On August 3, 2016, the Data Safety Management Board recommended that the Company discontinue further accrual in the Phase 2 trial of necuparanib in pancreatic cancer following the outcome of a planned interim futility analysis. The Company plans to confirm the futility analysis and then determine next steps for the necuparanib program.
Autoimmune Drugs
Momenta’s novel autoimmune portfolio includes two recombinant molecules: M230, a Selective Immunomodulator of Fc receptors (SIF3) and M281, an anti-FcRn monoclonal antibody. In June 2016, the Company initiated a Phase 1 study to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of M281 in healthy subjects. M230 is in pre-clinical development, and the Company expects to initiate a clinical trial for M230 in 2017. Momenta is also developing hyper-sialylated IVIg (hsIVIg), a high potency alternative to IVIg. The Company continues its efforts to identify potential collaboration opportunities for the further development and commercialization of its hsIVIg program.

Second Quarter 2016 Financial Results

Total revenues for the second quarter of 2016 were $26.4 million compared to $44.9 million for the same period in 2015. Total revenues for the second quarter of 2016 include $20.7 million in product revenue earned from net sales of Glatopa by Sandoz, compared to $19.2 million in product revenue earned from net sales of Glatopa by Sandoz for the same period in 2015. Glatopa was launched in the second quarter of 2015, and Glatopa profit share for that quarter was reduced by $9.0 million to reimburse Sandoz for the Company’s share of pre-launch Glatopa-related legal expenses.

Collaborative research and development revenue for the second quarter of 2016 was $5.7 million compared to the $25.6 million recorded in the same quarter last year. In the second quarter of 2015, the Company earned $20.0 million in milestone payments under the Sandoz collaboration upon receiving sole FDA approval and upon the first commercial sale of Glatopa.

Research and development expenses for the second quarter of 2016 were $33.2 million, compared to $34.0 million for the same period in 2015. The decrease of $0.8 million, or 2%, from the 2015 period to the 2016 period was due to decreases of $0.8 million in stock-based compensation expense and $8.4 million for Mylan’s 50% share of biosimilar collaboration costs, which was offset by increases of $4.4 million in process and clinical development costs for M281 and biosimilars under the Company’s collaboration with Mylan, $2.2 million in non-clinical expenses to advance the Company’s novel autoimmune programs, $1.0 million in personnel-related expenses and $0.7 million in necuparanib Phase 2 clinical trial costs.

General and administrative expenses for the quarter ended June 30, 2016 were $14.9 million, compared with $13.3 million for the same period in 2015. The increase of $1.6 million, or 12%, was primarily due to an increase of $2.1 million in legal and professional fees. This increase was offset by a decrease of $0.5 million for Mylan’s 50% share of biosimilar collaboration costs.

At June 30, 2016, Momenta had $336.9 million in cash, cash equivalents and marketable securities.

Financial Guidance

Momenta provides non-GAAP operating expense guidance, which it believes can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the section of this press release below entitled "Non-GAAP Financial Information and Other Disclosures" for further discussion of this subject.

Today, Momenta reiterated its non-GAAP operating expense guidance of approximately $40 – $45 million per quarter for the second half of 2016. Non-GAAP operating expense is total operating expenses (which is net of Mylan’s share of collaboration expenses), excluding stock-based compensation expense and net of collaborative reimbursement revenues from Sandoz and Baxalta. The quarterly recognition of collaborative revenues under the Company’s collaborations with Baxalta and Mylan is expected to be $2.4 million and $1.8 million per quarter, respectively.