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Curis Reports Second Quarter 2016 Financial Results

On August 04, 2016 Curis, Inc. (NASDAQ:CRIS), a biotechnology company focused on the development and commercialization of innovative and effective drug candidates for the treatment of human cancers, reported its financial results for the second quarter ended June 30, 2016 (Press release, Curis, AUG 4, 2016, View Source [SID:1234514237]).

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"We are pleased that dosing of patients has started in the Phase 1 trial of CA-170, the first oral, small molecule immune checkpoint inhibitor targeting PD-L1 and VISTA pathways from our collaboration with Aurigene," said Ali Fattaey, Ph.D., Curis’s President and CEO. "Additionally, the second immuno-oncology program in our Aurigene collaboration that is focused on oral small molecules that target PD-1 and TIM3 pathways continues to progress well, further supporting our strategy to address inhibitory immune checkpoints with oral small molecules."

Dr. Fattaey continued, "We continue to enroll patients in the Phase 2 trial of CUDC-907 in patients with relapsed/refractory diffuse large B cell lymphoma or DLBCL, to assess its efficacy specifically in patients with MYC—altered DLBCL and remain on track for data in 2017."

Second Quarter 2016 Financial Results

Curis reported a net loss of $11.3 million, or ($0.09) per share on both a basic and diluted basis for the second quarter of 2016, as compared to a net loss of $8.1 million, or ($0.06) per share on both a basic and diluted basis for the same period in 2015. Curis reported a net loss of $20.7 million or ($0.16) per share on both basic and diluted basis for the six months ended June 30, 2016, as compared to a net loss of $40.0 million, or ($0.34) per share on both basic and diluted basis for the same period in 2015. The net loss for the six months ended June 30, 2015 includes a non-cash in-process research and development charge of $24.3 million related to Curis’s license agreement with Aurigene.

Revenues for the second quarter of 2016 were $1.7 million, as compared to $2.1 million for the same period in 2015. Revenues for both periods comprise primarily royalty revenues recorded on Genentech and Roche’s net sales of Erivedge. Revenues for the six months ended June 30, 2016 were $3.4 million, as compared to $3.7 million for the same period in 2015.

Operating expenses were $12.4 million for the second quarter of 2016, as compared to $9.5 million for the same period in 2015.

Operating expenses for the six months ended June 30, 2016 were $22.9 million, as compared to $42.1 million for the same period in 2015, and comprised the following:

Costs of Royalty Revenues. Costs of royalty revenues, primarily amounts due to third-party university patent licensors in connection with Genentech and Roche’s Erivedge net sales, were $0.1 million for both the second quarter of 2016 and 2015. Cost of royalty revenues for the six months ended June 30, 2016 and 2015 were $0.2 million for both periods.

In-Process Research and Development Expense. No in-process research and development expenses were recorded for the six months ended June 30, 2016 as compared to $24.3 million recorded during the same period in 2015 associated with the issuance of 17,120,131 shares of Curis common stock to Aurigene as partial consideration for the rights granted under the terms of the January 2015 collaboration agreement.

Research and Development Expenses. Research and development expenses were $8.8 million for the second quarter of 2016, as compared to $5.9 million for the same period in 2015. The increase was primarily due to increased direct spending related to clinical activities of CUDC-907 and programs under the Aurigene collaboration over the prior year period, including a $3.0 million milestone payment to Aurigene upon the U.S. Food and Drug Administration (FDA) acceptance of the CA-170 IND. Employee-related expenses increased over the prior year period primarily due to additional headcount to support the multiple programs. Research and development expenses were $15.7 million for the six months ended June 30, 2016 as compared to $10.7 million for the same period in 2015.

General and Administrative Expenses. General and administrative expenses remained unchanged at $3.4 million for the second quarter of 2016 as compared the second quarter of 2015. General and administrative expenses were $7.1 million for the six months ended June 30, 2016, as compared to $6.9 million for the same period in prior 2015.

Other expense, net was $0.6 million for the second quarter of 2016, as compared to $0.8 million for the same period in 2015. Other expense, net primarily consisted of $0.7 million and $0.8 million in interest expense for the quarters ended June 30, 2016 and 2015, respectively, related to the loan made by BioPharma-II (an investment fund managed by Pharmakon Advisors) to Curis Royalty (a wholly owned subsidiary of Curis). Other expense, net was $1.2 million and $1.6 million for the six months ended June 30, 2016 and 2015, respectively.

As of June 30, 2016, Curis’s cash, cash equivalents, marketable securities and investments totaled $61.7 million and there were approximately 129.5 million shares of common stock outstanding.

Second Quarter Operational Highlights

Precision oncology (CUDC-907: HDAC / PI3K inhibitor program):

In June 2016, updated data from the Phase 1 trial of CUDC-907 in 75 patients with relapsed/refractory lymphoma or multiple myeloma were presented at the European Hematology Association (EHA) (Free EHA Whitepaper)’s Annual Meeting. The updated assessment from a total of 31 of these patients with relapsed refractory DLBCL showed that among 21 response-evaluable patients with DLBCL, objective responses were reported in 9 patients, including 3 patients with complete responses. Additionally, a retrospective post-hoc analysis showed that among 6 response-evaluable DLBCL patients whose tumors were characterized with MYC alterations, 5 experienced objective responses, including 3 patients with complete responses. All 5 patients with MYC altered disease who experienced objective responses also had alterations in BCL-2, including 2 patients with BCL-2 gene translocations.

In June 2016, Curis presented the CUDC-907 Phase 2 trials-in-progress poster at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. The presentation included the Phase 2 study’s design for investigating CUDC-907’s efficacy in patients with relapsed/refractory DLBCL with MYC alterations.
Immuno-oncology (CA-170: PD-L1 / VISTA antagonist program; Aurigene collaboration):

In June 2016, the Company filed an Investigational New Drug (IND) application with the U.S. FDA to initiate the Phase 1 trial of CA-170 for once-daily oral treatment of patients with advanced solid tumors or lymphoma. The FDA accepted the Company’s IND filing during the same month.

In June 2016, the Company initiated dosing of the first patient in the Phase 1 trial of CA-170.
Erivedge (partner: Roche/ Genentech):

In June 2016, Roche presented data from two trials of Erivedge at the ASCO (Free ASCO Whitepaper) Annual Meeting, highlighting that (1) the safety profile of Erivedge continues to be consistent with the previously reported safety profiles, and (2) intermittent dosing schedules may be an option for patients with multiple basal cell carcinomas to derive long term benefit from Erivedge treatment.
Upcoming Activities

Curis expects that it will make presentations at the following conferences through September 2016:

Baird’s Global Healthcare Conference on Sept 8-9, 2016 in New York City

BioCryst Reports Second Quarter 2016 Financial Results

On August 4, 2016 BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) reported financial results for the second quarter ended June 30, 2016 (Press release, BioCryst Pharmaceuticalsa, AUG 4, 2016, View Source [SID:1234514234]).

"We continue to make progress, and have initiated subject screening to start the APeX-1 trial evaluating our once daily oral kallikrein inhibitor BCX7353 to prevent HAE attacks," said Jon P. Stonehouse, President & Chief Executive Officer. "Our goal remains to report out initial data by year end for this trial."

Second Quarter Financial Results
For the three months ended June 30, 2016, revenues decreased to $4.8 million from $25.8 million in the second quarter of 2015. The decrease was primarily due to the one time, partial recognition of a large upfront payment from Seqirus UK Limited (Seqirus) associated with the licensing of RAPIVAB (peramivir injection) in the second quarter of 2015, as well as lower collaborative revenue associated with BCX4430 development in the second quarter of 2016.

Research and Development (R&D) expenses for the second quarter of 2016 decreased to $14 .2 million from $16.5 million in the second quarter of 2015. This decrease was primarily due to lower development costs associated with the Company’s BCX4430 program.

General and administrative (G&A) expenses for the second quarter of 2016 decreased to $2.7 million compared to $3.5 million for the second quarter of 2015, due to a general reduction of administrative expenses throughout the Company during the second quarter of 2016, as compared to the second quarter of 2015.

Interest expense, which is primarily related to Company’s non-recourse notes payable, was $1.4 million in the second quarter of 2016 and $1.3 million in the second quarter of 2015. In addition, a $3.7 million mark-to-market loss on the Company’s foreign currency hedge was recognized in the second quarter of 2016, as compared to a $796,000 mark-to-market loss in the second quarter of 2015. These gains and losses result from periodic changes in the U.S. dollar/Japanese yen exchange rate and the related mark-to-market valuation of our underlying hedge arrangement. During the second quarters of 2016 and 2015, we also realized currency gains of $811,000 and $1.5 million, respectively, from the exercise of a U.S. Dollar/Japanese yen currency option within our foreign currency hedge.

The net loss for the second quarter of 2016 was $16.3 million, or a $0.22 net loss per share, compared to net income of $4.9 million, or $0.06 net income per fully diluted share, for the second quarter 2015.

Cash, cash equivalents and investments decreased to $64.3 million at June 30, 2016, as compared to $100.9 million at December 31, 2015. Net operating cash use for the second quarter of 2016 was $15.4 million, as compared to $12.0 million for the second quarter of 2015.

Year to Date Financial Results
For the six months ended June 30, 2016, total revenues decreased to $9.6 million from $32.7 million in the first half of 2015. The decrease in revenue resulted from the recognition of approximately $21.7 million of collaborative revenue in the second quarter of 2015 associated with the RAPIVAB out-licensing transaction with Seqirus in June 2015.

R&D expenses increased to $34.7 million in the first half of 2016 from $33.6 million in the first half of 2015. The increase in 2016 R&D expense, as compared to 2015, reflects increased spending in our RAPIVAB program, somewhat offset by decreased development activity in our BCX4430 program. The majority of R&D spending was associated with the Company’s HAE development program.

G&A expenses decreased to $5.9 million for the six months ended June 30, 2016 from $7.6 million for the six months ended June 30, 2015, due primarily to lower unrestricted grants awarded to HAE patient advocacy groups, as well as a general reduction of administrative expenses in the first half of 2016.

In the first half of 2016 and 2015, interest expense was $2.9 million and $2.6 million, respectively, and was primarily related to the Company’s non-recourse notes payable. A mark-to-market loss on our foreign currency hedge of $6.4 million was recognized in the first half of 2016, compared to a mark-to-market loss of $332,000 in the first half of 2015. These gains and losses result from periodic changes in the U.S. dollar/Japanese yen exchange rate and the related mark-to-market valuation of our underlying hedge arrangement. As noted above, we also realized currency gains of $811,000 and $1.5 million from the exercise of U.S. dollar/Japanese yen currency options during the first half of 2016 and 2015, respectively.

The net loss for the six months ended June 30, 2016 increased to $39.1 million, or $0.53 per share, from $10.3 million, or $0.14 per share for the same period last year.

Corporate Update & Outlook
The APeX-1 clinical trial of BCX7353 for prophylaxis of angioedema attacks in patients with HAE has received regulatory approval in Canada and several European countries, and patient screening has commenced. We expect initial data from APeX-1 to be available by year end 2016.

A clinical pharmacology study of several dosage formulations of avoralstat is nearing completion. Cohorts of healthy volunteers have received single doses ranging from 200 mg to 2000 mg of avoralstat in tablet or suspension formulations, with no clinically significant adverse events reported. While these dosing formulations have improved total avoralstat exposure (AUC) up to approximately five-fold compared to a 500 mg dose given as soft gel capsules, the plasma concentration-time profile has not met our objectives of twice-daily dosing with drug levels at or above the target range. For that reason, we have decided to stop further development of avoralstat.

A phase 1 first-in-human study of the broad-spectrum antiviral drug BCX4430 has been completed. Study drug was administered by i.m. injection to healthy volunteers. Single doses of BCX4430 ranging from 0.3 to 10 mg/kg were administered, and daily doses of 2.5 mg/kg to 10 mg/kg were administered for 7 days. Exposure to BCX4430 was dose-proportional. BCX4430 dosing was generally safe and well-tolerated, and there were no grade 3 or 4 adverse events.

On July 5, 2016, BioCryst announced that the National Institute of Allergy and Infectious Diseases (NIAID) has provided additional funding for efficacy studies of BCX4430 in non-human primates to further assess effective dose regimens. This funding represents an increase of $5.5 million for the development of BCX4430 as a treatment for hemorrhagic fever viruses. The NIAID contract value now totals $39.5 million, if all contract options are exercised. To date, approximately $35.4 million of funding has been awarded under the contract.

About APeX-1
APeX-1 is a two part, Phase 2, randomized, double-blind, placebo-controlled proof of concept and dose ranging trial to evaluate the safety, tolerability, pharmacokinetics, pharmacodynamics and efficacy of BCX7353 as a preventative treatment to eliminate or reduce the frequency of angioedema attacks in HAE patients. Up to a total of approximately 50 eligible subjects with HAE will be enrolled in the trial.

In part 1 of APeX-1, up to 36 subjects with HAE will be randomized in a 1:1 ratio to receive an oral dose of either 350 mg of BCX7353 once daily or placebo once daily for four weeks. An interim analysis will be conducted after the first 24 subjects have completed treatment through study day 28. If a robust treatment effect is observed at the interim analysis, Part 2 of the study will be initiated. In the event the treatment effect is not well characterized with 24 subjects, a total of up to approximately 36 subjects will be enrolled in part 1. The sample size in Part 1 was kept flexible to cover a range of response options that would achieve 90% power with an alpha of 0.05, based on reduction of attack rate of at least 70% on BCX7353, placebo response rate of approximately 30%, and standard deviation of approximately 0.45 attacks per week.

To characterize dose-response in part 2 of APeX-1, 14 additional subjects with HAE will be randomized to 250mg of BCX7353 once daily (n=6), 125mg of BCX7353 once daily (n=6) or placebo (n=2).

The primary efficacy endpoint of APeX-1 is the number of angioedema attacks; attack rate per week, counts of attacks, proportion of subjects with no attacks, and number of attack-free days will be analyzed. Efficacy analyses will be conducted for HAE attacks reported over the entire dosing interval (Days 1 through 28) and during the dosing period in which plasma concentrations of BCX7353 should be at steady-state conditions (Days 8 through 28). Secondary efficacy endpoints include severity and duration of angioedema attacks, and measures of health-related quality of life. Safety will be characterized through evaluation of adverse events and laboratory testing. Pharmacokinetics and pharmacodynamic effects will be assessed through measurement of plasma drug levels and kallikrein inhibition.

About BCX7353
Discovered by BioCryst, BCX7353 is a novel, once-daily, selective inhibitor of plasma kallikrein in development for the prevention of angioedema attacks in patients diagnosed with HAE. By inhibiting plasma kallikrein, BCX7353 suppresses bradykinin production. Bradykinin is the mediator of acute swelling attacks in HAE patients. BCX7353 has been generally safe and well tolerated in clinical pharmacology studies that have enrolled 117 healthy volunteers, 46 receiving single doses of up to 1000 mg, and 71 receiving once-daily doses of up to 500 mg for 7 days and 350 mg for 14 days. In the second week of study, approximately 4-5% of healthy volunteers administered daily doses of ‘7353 for at least 7 days developed a drug-related skin rash that resolved within a few days.

Financial Outlook for 2016
Based upon development plans and our awarded government contracts, BioCryst expects its 2016 net operating cash use to be in the range of $55 to $75 million, and its 2016 operating expenses to be in the range of $78 to $98 million. Our operating expense range excludes equity-based compensation expense due to the difficulty in reliably projecting this expense, as it is impacted by the volatility and price of the Company’s stock, as well as by the vesting of the Company’s outstanding performance-based stock options.

AVEO Oncology Reports Second Quarter 2016 Financial Results and Provides Business Update

On August 4, 2016 AVEO Oncology (NASDAQ:AVEO) reported financial results for the second quarter ended June 30, 2016 (Press release, AVEO, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2192884 [SID:1234514233]).

"The second quarter of 2016 marked a defining moment for AVEO, with the initiation of TIVO-3, our Phase 3 pivotal study of tivozanib in refractory advanced renal cell cancer, and the closing of debt and equity financings to support our North American first- and third-line registration strategy for tivozanib as well as our planned PD-1 combination study," said Michael Bailey, president and chief executive officer. "We are very pleased with investigator support for TIVO-3 to date, and remain on track to complete enrollment in 2017 and see top-line data in the first quarter of 2018. We expect to achieve several milestones over the next 12 months, including the initiation of a tivozanib PD-1 combination study, a decision on approval for tivozanib in front-line RCC in Europe, meaningful progress in our partnered pipeline programs as well as a potential partnership for AV-353. Along with anticipated milestone payments from our partnered pipeline programs, we believe that our resources will allow us to fully fund our U.S. tivozanib development strategy through at least pivotal top-line data for TIVO-3 in the first quarter of 2018."

Recent Highlights

Dosing of First Patient in Pivotal Phase 3 TIVO-3 Study of Tivozanib in Renal Cell Carcinoma. In May 2016, AVEO announced that the first patient was dosed in the Company’s pivotal TIVO-3 trial, a randomized, controlled, multi-center, open-label study to compare tivozanib to sorafenib in subjects with refractory advanced renal cell carcinoma (RCC). Tivozanib is an oral, once-daily, vascular endothelial growth factor (VEGF) tyrosine kinase inhibitor (TKI). The Phase 3 trial is expected to enroll approximately 322 patients with recurrent or metastatic RCC who have failed at least two prior regimens, including VEGFR-TKI therapy (other than sorafenib). Eligible patients may also have received checkpoint inhibitor therapy in earlier lines of treatment. Patients will be randomized 1:1 to receive either tivozanib or sorafenib, with no crossover between arms.

The primary endpoint of the study is progression free survival. Secondary endpoints include overall survival, overall response rate, and safety and tolerability. Top line readout of the study is currently projected for the first quarter of 2018. The TIVO-3 trial, together with the previously completed TIVO-1 trial of tivozanib in the first line treatment of RCC, is designed to support a first and third line indication for tivozanib in the U.S. A marketing authorization application seeking approval of tivozanib as a treatment for first line renal cell cancer is currently pending in Europe based on an application submitted by AVEO’s partner EUSA Pharma.
Closing of Private Placement and Amended Term Loan. In May 2016, AVEO announced the closing of a private placement of 17,642,482 units, each consisting of one share of common stock and a warrant to purchase one share of common stock, at a price of $0.965 per unit, for gross proceeds of approximately $17 million. The transaction was led by New Enterprise Associates and included New Leaf Venture Partners and Perceptive Advisors, among other institutional investors. Certain members of the Company’s management team and Board of Directors also participated in the financing. Piper Jaffray & Co. served as the exclusive placement agent for the financing.

The Company also announced that it entered into an amendment to its 2010 loan and security agreement with Hercules Capital, Inc. Pursuant to the loan amendment, the Company borrowed an additional $5.0 million from Hercules. If specified conditions are met, AVEO may borrow an additional tranche of $5.0 million from Hercules in the first half of 2017, and repayment of principal on AVEO’s loans may be deferred to begin in 2018.
Filing of Provisional Patent Applications for AV-353, a Notch 3-Specific Inhibitor Antibody for PAH. In May 2016, AVEO announced that it had filed provisional patent applications with the United States Patent and Trademark Office covering composition of matter claims for AV-353, the Company’s potent inhibitory antibody specific to Notch 3 for development in Pulmonary Arterial Hypertension (PAH). These patent applications are the second set of applications related to AV-353 and the Company’s Notch 3 antibody program. Current treatments in PAH focus only on controlling symptoms by avoiding vasoconstriction and increasing vasodilation of vessels and do not reverse the underlying cause of the disease. In contrast, with the results of a recently concluded research study supported by AVEO, AV-353 has generated a growing body of preclinical data that supports AV-353’s ability to potentially reverse the disease phenotype, which would represent a potential disease-modifying approach to treatment. Consistent with the Company’s focus on developing oncology therapeutics, AVEO is currently seeking an appropriate partner to develop and commercialize AV-353 worldwide in PAH.
Second Quarter 2016 Financial Highlights

AVEO ended Q2 2016 with $39.5 million in cash, cash equivalents and marketable securities as compared with $34.1 million at December 31, 2015. The increase was attributable to the net proceeds of our private placement of securities and additional borrowings under our existing loan and security agreement in the second quarter of 2016, net of the use of cash to fund operations during 2016.
Total collaboration revenue in Q2 2016 was approximately $0.2 million compared with $0.1 million Q2 2015. The increase was primarily due to $0.1 million in revenue recognized in the second quarter of 2016 in connection with the out-licensing agreement with EUSA, which was executed in December 2015.
Research and development expense was $5.6 million in Q2 2016 compared with $1.8 million for Q2 2015. The increase was primarily attributable to an increase in tivozanib clinical trial costs in connection with the preparation for, and conduct of, the TIVO-3 phase 3 trial in renal cell carcinoma that commenced enrollment and patient treatment in May 2016.
General and administrative expense was $1.7 million in Q2 2016 compared with $2.9 million for Q2 2015. The decrease was primarily the result of continued reduction of facilities and other operating expenses after completing our restructuring in the first quarter of 2015.
Net loss for Q2 2016 was $8.6 million, or a loss of $0.13 per basic and diluted share, compared with net loss of $5.5 million, or a loss of $0.10 per basic and diluted share for Q2 2015.
Financial Guidance

We believe that our $39.5 million in cash resources could allow us to fund our planned operations at least into the fourth quarter of 2017.

AVEO expects that its cash resources, its borrowing capacity under its amended loan agreement, together with certain anticipated operational milestone payments from its collaboration partners, could allow the Company to fund its U.S. tivozanib development strategy through at least pivotal Phase 3 TIVO-3 top-line data as well as a tivozanib-PD-1 inhibitor combination trial.

Array BioPharma Reports Financial Results For The Fourth Quarter And Full Year Of Fiscal 2016

On August 4, 2016 Array BioPharma Inc. (NASDAQ: ARRY), a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule cancer therapies, reported results for its fiscal fourth quarter and full year ended June 30, 2016 and provided an update on the progress of its key clinical development programs (Press release, Array BioPharma, AUG 4, 2016, View Source;p=RssLanding&cat=news&id=2192986 [SID:1234514231]).

Array BioPharma. (PRNewsFoto/Array BioPharma Inc.)
"The recent filing of an NDA for binimetinib in NRAS-mutant melanoma represents an important milestone for Array," said Ron Squarer, Array’s Chief Executive Officer. "We also look forward to announcing top-line results from our Phase 3 COLUMBUS trial in BRAF-mutant melanoma in the third quarter of 2016 and to advancing both the Phase 3 BEACON CRC trial in BRAF-mutant colorectal cancer and a new immuno-oncology Phase 1/2 trial of a CSF-1R inhibitor combined with a PD-1 inhibitor."

KEY PIPELINE UPDATES

Binimetinib (MEK162) and encorafenib (LGX818)

Novartis continues to substantially fund all ongoing trials with binimetinib and encorafenib that were active or planned as of the close of the Novartis Agreements in 2015, including the NEMO and COLUMBUS Phase 3 trials. Reimbursement revenue from Novartis was approximately $107.3 million for the previous 12 months, of which $33.4 million was recorded over the past quarter.

NEMO: Global Phase 3 trial of binimetinib versus dacarbazine in NRAS-mutant melanoma patients

Array submitted an NDA for binimetinib to the Food and Drug Administration (FDA) at the end of June 2016. Array is planning for an Oncologic Drugs Advisory Committee (ODAC) meeting as part of the regulatory review process. Array is also currently preparing for an Application Orientation Meeting (AOM) with the FDA in September 2016, which we expect will include a discussion of the NDA package including clinical risk / benefit.

Results from the NEMO trial were presented at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. The study met its primary endpoint of improving progression-free survival (PFS) compared with dacarbazine treatment. The median PFS on the binimetinib arm was 2.8 months versus 1.5 months on the dacarbazine arm; hazard ratio (HR) 0.62, [95% CI 0.47-0.80], p<0.001. In the pre-specified subset of patients who received prior treatment with immunotherapy, including ipilimumab, nivolumab or pembrolizumab, patients who received binimetinib experienced 5.5 months of median PFS (95% CI, 2.8–7.6), compared with 1.6 months for those receiving treatment with dacarbazine (95% CI, 1.5–2.8). While the results in the pre-specified sub-group of patients who had received prior treatment with immunotherapy are of interest, interpretation beyond overall consistency with the primary result should be made with care. Array anticipates that the primary consideration for marketing approval will be the results for the primary endpoint of the trial.

In addition to improving PFS, binimetinib also demonstrated significant improvement in overall response rate (ORR) and disease control rate (DCR). While there was no statistically significant difference demonstrated in overall survival, the median overall survival (mOS) favored the binimetinib arm.

Confirmed ORR was 15 percent (95% CI, 11-20 percent) in patients receiving binimetinib vs. 7 percent (95% CI, 3-13 percent) in patients receiving dacarbazine.
DCR for patients receiving binimetinib was 58 percent (95% CI, 52-64 percent) vs. 25 percent (95% CI, 18-33 percent) for patients receiving dacarbazine.
mOS was estimated at 11.0 months in patients receiving binimetinib vs. 10.1 months for patients treated with dacarbazine [(HR) = 1.0 (95% CI 0.75-1.33), p=0.499].
Under the NEMO protocol, and in accordance with accepted statistical practice, the subgroup analyses of overall survival (OS) are formally conducted only if the key secondary endpoint of OS reached statistical significance.

Binimetinib was generally well-tolerated and the adverse events (AEs) reported were consistent with previous results in NRAS-mutant melanoma patients. Grade 3/4 AEs reported in greater than or equal to 5 percent of patients receiving binimetinib included increased creatine phosphokinase (CPK) and hypertension.

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

COLUMBUS: Global Phase 3 trial of binimetinib plus encorafenib versus vemurafenib in BRAF-mutant melanoma patients

Array expects COLUMBUS top-line results during the third quarter of 2016.

Activating BRAF mutations are present in approximately 50 percent of patients with metastatic melanoma. In two separate Phase 1/2 trials in this patient population, binimetinib plus encorafenib demonstrated encouraging clinical activity and an attractive tolerability profile, including low incidence of pyrexia and little to no incidence of rash or photosensitivity. Patients treated in two Phase 3 trials of dabrafenib plus trametinib (COMBI-d and COMBI-v) experienced greater than 50 percent incidence of pyrexia (fever), while in a large, randomized trial of vemurafenib and cobimetinib (coBRIM) nearly 50 percent of patients experienced photosensitivity reactions. Of the patients who experienced pyrexia on COMBI-d and COMBI-v, one-half reported three or more events, and at least half required dose modifications, including interruptions, reductions or discontinuation as a result of their pyrexia. Of the patients who experienced photosensitivity on coBRIM, the median duration of photosensitivity was three months, with some patients experiencing durations as long as 14 months. Only 63 percent of patients on coBRIM with photosensitivity reactions experienced resolution while on study.

BEACON CRC: Global Phase 3 trial of binimetinib, encorafenib and Erbitux (cetuximab) versus Erbitux in BRAF-mutant colorectal cancer (CRC) patients

During the 2016 ASCO (Free ASCO Whitepaper) Annual Meeting, Array, Pierre Fabre, and Merck KGaA, Darmstadt, Germany, jointly announced the initiation of BEACON CRC (Binimetinib, Encorafenib And Cetuximab Combined to treat BRAF-mutant ColoRectal Cancer), a pivotal Phase 3 global clinical trial, assessing the efficacy of binimetinib, encorafenib and Erbitux compared to Erbitux and irinotecan-based therapy in patients with BRAF-mutant CRC.

BEACON CRC is a randomized, open-label, global study evaluating the efficacy and safety of binimetinib, encorafenib and Erbitux in patients with BRAF-mutant metastatic CRC who have previously received first-or second-line systemic therapy. The study includes a safety lead-in with approximately 30 patients. With appropriate results from the lead-in, approximately 615 patients are expected to be randomized 1:1:1 to receive triplet therapy (binimetinib, encorafenib and Erbitux), doublet therapy (encorafenib and Erbitux) or the control arm (irinotecan-based therapy and Erbitux).

The primary endpoint of the trial is OS of the triplet therapy compared to the control arm. Secondary endpoints address efficacy of the doublet therapy compared to the control arm, and the triplet therapy compared to the doublet therapy. Other secondary endpoints include PFS, objective ORR, duration of response, safety and tolerability. Health related quality of life data will also be assessed.

Array will act as the global sponsor of the study. Pierre Fabre licensed commercial rights to binimetinib and encorafenib for Europe and other global markets from Array in December 2015. As part of this collaboration, Pierre Fabre has elected to co-fund 40 percent of the cost of the BEACON CRC trial. Merck KGaA, Darmstadt, Germany, is the owner of Erbitux outside of the United States and Canada, and will supply Erbitux to all trial sites in those geographies as part of the collaboration. If successful, the results would support regulatory submissions for all three parties.

Array also announced updated results from a Phase 2 study of the combination of encorafenib and cetuximab, with or without alpelisib, a selective PI3K alpha inhibitor, in patients with advanced BRAF-mutant CRC at the 2016 ASCO (Free ASCO Whitepaper) meeting. Data from this study suggest that mOS for these patients may exceed one year, which is more than double several historical published benchmarks for this population.

In the Phase 2 study, 102 patients with BRAF-mutant CRC who had progressed after one or more prior therapies were randomized to receive the doublet regimen of encorafenib and cetuximab (ENCO 200 mg PO QD and CETUX per label; n=50) or the triplet regimen of encorafenib, cetuximab and alpelisib (ENCO, CETUX and ALP 300 mg PO QD; n=52). The Phase 2 analysis for these treatment regimens demonstrated promising clinical activity in patients:

Median OS was 12.4 and 13.1 months for the doublet and alpelisib-containing triplet regimens, respectively.
Median PFS was 4.2 and 5.4 months for the doublet and alpelisib-containing triplet regimens, respectively.
ORR was 22 percent and 27 percent for the doublet and alpelisib-containing triplet regimens, respectively.
Grade 3 or 4 AEs occurring in greater than 10 percent of patients included anemia, hyperglycemia and increased lipase.
Several historical published median PFS and median OS results after first-line treatment range from 1.8 to 2.5 months and four to six months, respectively, and published ORR from various studies in this population range between six percent to eight percent. As alpelisib added toxicity with only marginal additional activity, the BEACON CRC trial utilizes binimetinib, a MEK inhibitor, in the triplet arm.

Colorectal cancer is the third most common cancer among men and women in the United States, with more than 134,000 new cases and nearly 50,000 deaths from the disease projected in 2016. In the United States, BRAF mutations occur in 8 to 15 percent of patients with colorectal cancer and represent a poor prognosis for these patients.

ARRY-382

Phase 1/2 dose escalation study initiated with ARRY-382, a colony-stimulating factor-1 receptor (CSF-1R) inhibitor, in combination with pembrolizumab, a PD-1 antibody, for the treatment of patients with advanced solid tumors

In July 2016, Array initiated a Phase 1/2 dose escalation immuno-oncology trial of ARRY-382 in combination with pembrolizumab (Keytruda), a Programmed Cell Death Receptor 1 (PD-1) antibody, in patients with advanced solid tumors. ARRY-382 is a wholly-owned, potent, highly selective, small-molecule inhibitor of CSF-1R kinase activity.

The study will enroll up to 18 patients with selected advanced solid tumors to determine the maximum tolerated dose and/or recommended Phase 2 dose of the combination. In addition, the safety profile, pharmacodynamic effects, and preliminary assessment of activity of the combination will be assessed. With appropriate results, Array has the option to advance the combination into expansion cohorts of patients with metastatic melanoma or advanced non-small cell lung cancer (NSCLC).

Results from a prior Phase 1 study designed to assess the safety, pharmacokinetics and pharmacodynamics of ARRY-382 for treating patients with cancer have been presented and a dose and schedule that demonstrates target engagement based on multiple pharmacodynamic biomarkers was identified for further study.

With this new combination study, Array is strengthening its position in the immuno-oncology field. Earlier this year, Array initiated an immuno-oncology research collaboration with the Dana-Farber Cancer Institute that Array believes has broad potential applicability to its drug discovery efforts.

ARRY-797 (ARRY-371797)

Phase 2 trial ongoing in patients with LMNA A/C-related dilated cardiomyopathy (DCM)

Array is conducting a 12-patient Phase 2 study to evaluate the effectiveness and safety of ARRY-797 in patients with LMNA A/C-related DCM, a serious, genetic cardiovascular disease. Results will be presented at the European Society of Cardiology on August 30, 2016. By age 45, approximately 70 percent of patients with LMNA A/C-related DCM will have died; suffered a major cardiac event; or will have undergone a heart transplant. Array has presented a qualitative summary of the Phase 2 study. The primary endpoint of the study is mean change in the six-minute walk test (6MWT) at 12 weeks relative to the baseline. ARRY-797 exceeded benchmarks set by a number of recently-approved drugs for rare diseases on the basis of the 6MWT as a primary endpoint. Secondary endpoints in the ARRY-797 trial, including changes in N-Terminal pro-Brain-derived Natriuretic Peptide (NT-proBNP, a serum biomarker of heart failure severity), and patient reported outcomes, are directionally consistent with the primary endpoint. Data for patients followed over a 48-week period suggest a durable effect. Taken together, the data to date suggest a path forward for this program, and Array has met with regulators to discuss the design of a study that could be the basis for marketing approval.

Selumetinib (partnered with AstraZeneca)

Registration trials advancing in NSCLC (SELECT-1), thyroid cancer (ASTRA) and neurofibromatosis type 1

AstraZeneca expects top-line results from SELECT-1 in the second half of 2016 and projects a regulatory filing of selumetinib in NSCLC in the first half of 2017. AstraZeneca continues to advance selumetinib in three registration trials: SELECT-1 in patients with KRAS-mutant non-small cell lung cancer (NSCLC); a registration trial in patients with neurofibromatosis type 1; and ASTRA in patients with differentiated thyroid cancer.

SELECT-1 is a 500-patient randomized, double-blind, placebo-controlled study that was designed to evaluate the safety and efficacy of selumetinib plus docetaxel as a second-line therapy in locally advanced or metastatic KRAS-mutant NSCLC. KRAS mutations are among the most common mutations in NSCLC, present in approximately 25 percent of these patients. The study is designed to evaluate PFS as the primary endpoint, and a key secondary endpoint is OS. AstraZeneca’s decision to progress selumetinib to Phase 3 in NSCLC followed the results from a randomized Phase 2 study evaluating the combination of selumetinib with docetaxel against docetaxel alone in KRAS-mutation positive NSCLC. This study demonstrated response rates of 37.2% vs 0% (p<0.0001), and a statistically significant improvement in PFS of 5.3 vs 2.1 months (HR 0.58, p<0.014).

FINANCIAL HIGHLIGHTS

Cash, cash equivalents and marketable securities were approximately $111 million and accounts receivable were approximately $39.3 million as of June 30, 2016. Accounts receivable primarily consist of receivables expected to be paid by Novartis within three months. In March 2015, binimetinib and encorafenib became wholly-owned assets of Array, which prompted changes to the classification of revenue and expenses for the programs. The new expense classifications were included in the financial results for the fourth quarter of fiscal 2015. Beginning in the first quarter of fiscal 2016, Array reports revenue from the Novartis reimbursements under its agreements with Novartis for binimetinib and encorfenib as a separate line item called "reimbursement revenue." The net earnings (or loss) per share described below are diluted net earnings (or loss) per share.

Fourth Quarter of Fiscal 2016 Compared to Third Quarter of Fiscal 2016 (Sequential Quarters Comparison)

Revenue for the fourth quarter of fiscal 2016 was $43.2 million, compared to $43.0 million for the prior sequential quarter.
Cost of partnered programs for the fourth quarter of fiscal 2016 was $5.4 million, compared to $5.8 million for the prior quarter.
Research and development expense was $49.5 million, compared to $48.8 million in the prior quarter.
Net loss for the fourth quarter was $25.0 million, or ($0.17) per share, and was $22.7 million, or ($0.16) per share in the prior quarter. The increase in net loss was primarily due to the initiation of the BEACON CRC trial.
Fourth Quarter of Fiscal 2016 Compared to Fourth Quarter of Fiscal 2015 (Prior Year Comparison)

Revenue for the fourth quarter of fiscal 2016 increased by $30.9 million compared to the same quarter of fiscal 2015, primarily due to reimbursement revenue from Novartis.
Cost of partnered programs decreased by $1.5 million compared to the fourth quarter of fiscal 2015 primarily due to binimetinib development costs being presented as research and development expense instead of cost of partnered programs upon becoming wholly-owned programs.
Research and development expense increased by $30.9 million compared to the fourth quarter of fiscal 2015 due to the change in categorization of binimetinib costs, as well as new investment in encorafenib.
Net loss for the fourth quarter of fiscal 2016 was $25.0 million, or ($0.17) per share, and was $12.7 million, or ($0.09) per share, for the same quarter in fiscal 2015.
Full Year of Fiscal 2016 Compared to Full Year of Fiscal 2015 (Prior Year Comparison)

Revenue was $137.9 million for the fiscal year ended June 30, 2016, compared to $51.9 million for the same period in fiscal 2015.
Net loss for the fiscal year ended June 30, 2016, was $92.8 million, or ($0.65) per share, compared to a net income of $9.4 million, or $0.07 per share, in the comparable prior year period.
The fiscal year ended 2015 included a one-time $80.0 million net gain on the binimetinib and encorafenib agreements.
Net cash used in operating activities for the fiscal year ended June 30, 2016 was $70.1 million.
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AMRI Announces Second Quarter 2016 Results

On August 4, 2016 AMRI (NASDAQ: AMRI) reported financial and operating results for the second quarter ended June 30, 2016 and provided an update to its outlook for 2016 (Press release, Albany Molecular Research, AUG 4, 2016, View Source [SID:1234514230]).

Highlights:

Contract revenue of $116.5 million, up 37% from the second quarter 2015
Recurring royalty revenue of $4.4 million
Reported contract margins of 29%; non-GAAP contract margins of 33%
Reported net loss of ($21.3) million; non-GAAP net income of $12.7 million
Reported diluted EPS $(0.61); non-GAAP diluted EPS of $0.36
Adjusted EBITDA of $26.8 million, up 62% from the second quarter 2015
Updates 2016 outlook to reflect addition of Euticals
Non-GAAP contract margins, non-GAAP net income, non-GAAP diluted EPS and adjusted EBITDA are non-GAAP financial measures. For a discussion of these measures and reconciliations to U.S. GAAP measures, see "Non-GAAP Financial Measures" and Tables 1, 2 and 3.
"Solid execution of our strategy resulted in a successful quarter with strong revenue driven largely by the contributions of our acquisitions and strong performances in our commercial operations," said William S. Marth, AMRI’s president and chief executive officer. Higher margin businesses such as Whitehouse Labs and Gadea, as well as strong results in our DDS and Drug Product businesses significantly enhanced our performance this quarter.

We are confident that our plan will enable us to meet our outlook for the full year 2016, especially with the addition of Euticals, which brings us compelling strategic benefits and adds to our ability to generate meaningful value for our customers and shareholders longer term."

Second Quarter 2016 Results

Total revenue for the second quarter of 2016 was $120.8 million, an increase of 35%, compared to total revenue of $89.5 million reported in the second quarter of 2015.

Total contract revenue for the second quarter of 2016 was $116.5 million, an increase of 37%, compared to $85.2 million reported in the second quarter of 2015. Contract margins were 29% in the second quarter of 2016, compared with 24% for the second quarter of 2015. Non-GAAP contract margins were 33% for the second quarter of 2016, compared with 26% for the second quarter of 2015. The improvement in contract margins was driven largely by the addition of Gadea Pharmaceuticals.

Recurring royalty revenue in the second quarter of 2016 was $4.4 million, consistent with the second quarter of 2015, and reflects an increase in net sales of amphetamine salts as reported by Allergan, offset by the elimination of royalties on Allegra (fexofenadine) products which ended in the second quarter 2015. Recurring royalty revenue for the second quarter of 2016 includes $3.8 million from the net sales of certain amphetamine salts sold by Allergan and royalties from an API sourced from our business in Spain.

Research and development expense in the second quarter of 2016 was $3.5 million, up from $0.4 million in the second quarter 2015, reflecting increased investment in collaboration agreements and our API portfolio, and the addition of Gadea Pharmaceuticals.

Net loss under U.S. GAAP was $(21.3) million, or $(0.61) per basic and diluted share, in the second quarter of 2016, compared to U.S. GAAP net income of $2.3 million, or $0.07 per basic and diluted share in the second quarter of 2015. Non-GAAP net income in the second quarter of 2016 was $12.7 million or non-GAAP earnings per diluted share of $0.36, compared to non-GAAP net income of $7.4 million or non-GAAP earnings per diluted share of $0.22 for the second quarter of 2015.

Adjusted EBITDA in the second quarter of 2016 was $26.8 million, an increase of $10.3 million or 62% compared to the second quarter 2015.

For a reconciliation of non-GAAP financial measures to U.S. GAAP financial measures for the 2016 and 2015 reporting periods, please see Tables 1, 2 and 3 at the end of this press release.

Year-to-Date Results

Total revenue for the six-month period ended June 30, 2016 was $226.4 million, an increase of 32% compared to total revenue of $171.4 million reported for the six-month period ended 2015.

Contract revenue for the six-month period ended June 30, 2016 was $219.3 million, an increase of 37% compared to $160.4 million reported for the six-month period ended June 30, 2015. Contract margins reported under GAAP were 26% for the six-month period ended June 30, 2016, compared with 23% for the six-month period ended June 30, 2015. Non-GAAP contract margins were 30% for the six-month period ended June 30, 2016, compared with 25% for the six-month period ended June 30, 2015.

Recurring royalty revenue for the six-month period ended June 30, 2016 was $7.1 million, a decrease of 36% from $11.0 million for the six-month period ended June 30, 2015 due to the expiration of Allegra (fexofenadine) royalties in the second quarter of 2015. Recurring royalty revenue for the six-month period ended June 30, 2016 includes $6.0 million from the net sales of certain amphetamine salts sold by Allergan and royalties from an API sourced from our business in Spain.

Research and development expense for the six month period ended June 30, 2016 was $6.6 million, up from $0.9 million for the six-month period ended June 30, 2015, due to increased investment in collaboration agreements and our API portfolio, and the addition of Gadea.

Net loss under U.S. GAAP was $(31.3) million, or $(0.90) per basic and diluted share for the six-month period ended June 30, 2016, compared to U.S. GAAP net income of $0.1 million, or $0.00 per basic and diluted share for the six-month period ended June 30, 2015. Non-GAAP net income for the six-month period ended June 30, 2016 was $15.0 million or non-GAAP earnings per diluted share of $0.42, compared to non-GAAP net income of $13.8 million or non-GAAP earnings per diluted share of $0.42 for the six-month period ended June 30, 2015.

Adjusted EBITDA for the six-month period ended June 30, 2016 was $39.8 million, an increase of $7.8 million or 24% compared to the six-month period ended June 30, 2015.

Segment Results

Active Pharmaceutical Ingredients (API)

Three Months Ended

Six Months Ended

June 30,

June 30,
(Unaudited; $ in thousands)

2016

2015

2016

2015

API Contract Revenue

65,447

39,997

120,149

77,845
API Royalty Revenue

4,353

2,535

7,094

5,403
API Total Revenue

$ 69,800

$ 42,532

$ 127,243

$ 83,248

Cost of Contract Revenue

46,279

28,434

87,200

57,017

Gross Profit, excluding royalties

19,168

11,563

32,949

20,828
Gross Profit, including royalties

23,521

14,098

40,043

26,231

Gross Margin, excluding royalties

29.3%

28.9%

27.4%

26.8%
Gross Margin, including royalties

33.7%

33.1%

31.5%

Non-GAAP Gross Profit, excluding royalties (1)

22,719

11,776

39,963

21,218
Non-GAAP Gross Margin, excluding royalties (1)

34.7%

29.4%

33.3%

27.3%

Non-GAAP Gross Profit, including royalties (1)

27,072

14,311

47,057

26,621
Non-GAAP Gross Margin, including royalties (1)

38.8%

33.6%

37.0%

32.0%

(1) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross profit and contract gross margin to non-GAAP contract gross profit and non-GAAP contract gross margin as a percentage of contract revenue.

API contract revenue for the second quarter of 2016 increased 64% compared to the second quarter of 2015, primarily due to $28.1 million of incremental revenue from the acquisition of Gadea Pharmaceuticals, partially offset by lower revenue associated with the Holywell, UK site closure. API contract margin excluding royalties, determined under GAAP for the second quarter of 2016 was consistent with the second quarter of 2015. API non-GAAP contract margin excluding royalties for the second quarter of 2016 increased 5 percentage points from 2015, driven by the margins realized on Gadea Pharmaceutical’s revenues.

API royalty revenue in the second quarter of 2016 increased $1.8 million over the second quarter of 2015 and includes $3.8 million from the net sales of certain amphetamine salts sold by Allergan. The increase reflects an increase in net sales of amphetamine salts as reported by Allergan and royalties from an API sourced from our business in Spain.

For the six-month period ended June 30, 2016, API contract revenue increased $42.3 million or 54%, due primarily to $48.1 million of incremental revenue from the acquisition of Gadea Pharmaceuticals, partially offset by lower revenue associated with the Holywell, UK site closure.

API contract margin excluding royalties determined under GAAP for the six-month period ended June 30, 2016 was consistent with the six-month period ended June 30, 2015. API non-GAAP contract margin excluding royalties for the six-month period ended June 30, 2016 increased 6 percentage points compared to the six-month period ended June 30, 2015, driven by the margins realized on Gadea Pharmaceuticals’ revenues.

Drug Discovery Services (DDS)

Three Months Ended

Six Months Ended

June 30,

June 30,
(Unaudited; $ in thousands)

2016

2015

2016

2015

DDS Contract Revenue (1)

$ 25,820

$ 21,399

$ 49,023

$ 39,273
Cost of Contract Revenue (1)

18,363

16,003

35,533

29,708
Contract Gross Profit

7,457

5,396

13,490

9,565
Contract Gross Margin

28.9%

25.2%

27.5%

24.4%

Non-GAAP Contract Gross Profit (2)

8,042

5,964

14,590

10,289
Non-GAAP Contract Gross Margin (2)

31.1%

27.9%

29.8%

26.2%

(1) A portion of the 2015 amounts were reclassified from DDS to DPM to better align business activities within our reporting segments.

(2) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross profit and contract gross margin to non-GAAP contract gross profit and non-GAAP contract gross margin as a percentage of contract revenue.

Discovery and Development Services ("DDS") contract revenue for the second quarter of 2016 increased 21% compared to the second quarter of 2015, primarily due to $3.1 million of incremental revenue from the acquisition of Whitehouse Laboratories and organic growth, partially offset by lower revenue associated with our Singapore operations.

DDS contract margin determined under GAAP increased 4 percentage points in the second quarter of 2016 as compared to the second quarter of 2015. DDS non-GAAP contract margin increased 3 percentage points for the second quarter of 2016 as compared to the second quarter of 2015, driven by the margins realized on Whitehouse Laboratories’ revenue.

For the first half of 2016, DDS contract revenue increased $9.8 million or 25%, due primarily to $5.8 million of incremental revenue from the acquisition of Whitehouse Laboratories and strong organic growth, partially offset by lower revenue associated with our Singapore operations.

DDS contract margin determined under GAAP for the six-month period ended June 30, 2016 increased 3 percentage points compared with the six-month period ended June 30, 2015. DDS non-GAAP contract margin for the six-month period ended June 30, 2016 increased 4 percentage points from the six-month period ended June 30, 2015, driven by the margins realized on Whitehouse Laboratories’ revenues.

Drug Product Manufacturing (DPM)

Three Months Ended

Six Months Ended

June 30,

June 30,
(Unaudited; $ in thousands)

2016

2015

2016

2015

DPM Contract Revenue (1)

$ 25,190

$ 23,830

$ 50,123

$ 43,240
Cost of Contract Revenue (1)

17,572

20,231

38,844

36,082
Contract Gross Profit

7,618

3,599

11,279

7,158
Contract Gross Margin

30.2%

15.1%

22.5%

16.6%

Non-GAAP Contract Gross Profit (2)

7,864

4,253

11,836

7,983
Non-GAAP Contract Gross Margin (2)

31.2%

17.8%

23.6%

18.5%

(1) A portion of the 2015 amounts were reclassified from DDS to DPM to better align business activities within our reporting segments.

DPM contract revenue determined under GAAP for the second quarter of 2016 increased 6% compared to the second quarter 2015, due to strong demand at our development and commercial manufacturing facilities, and $2.5 million of contract termination revenue related to the early termination of one of our collaboration arrangements.

DPM contract margin for the second quarter 2016 increased 15 percentage points compared to the second quarter of 2015. DPM non-GAAP contract margin for the second quarter of 2016 increased 13 percentage points compared to the second quarter of 2015, due to $2.5 million of contract termination revenue and enhanced operational efficiencies at our Albuquerque manufacturing facility.

DPM contract revenue for the six-month period ended June 30, 2016 increased 16% compared to the six-month period ended June 30, 2015, due primarily to $2.5 million of contract termination revenue.

DPM contract margin determined under GAAP for the six-month period ended June 30, 2016 increased 6 percentage points compared to the six-month period ended June 30, 2015. Drug Product Manufacturing non-GAAP contract margin for the six-month period ended June 30, 2016 increased 5 percentage points compared to the six-month period ended June 30, 2015, driven by contract termination revenue.

Liquidity and Capital Resources

At June 30, 2016, AMRI had cash, cash equivalents and restricted cash of $31.4 million, compared to $47.2 million at March 31, 2016. The decrease in cash and cash equivalents for the quarter ended June 30, 2016 was primarily due to the use of $13.3 million for capital expenditures and $5 million of debt paydown, partially offset by cash generated by operating activities of $3.5 million. At December 31, 2015, AMRI had cash, cash equivalents and restricted cash of $52.3 million. The decrease in cash and cash equivalents for the six months ended June 30, 2016 was primarily due to the use of $25 million for capital expenditures and $10.8 million of debt paydown, partially offset by cash generated by operating activities of $15.2 million.

Financial Outlook

AMRI’s guidance takes into account a number of factors, including expected financial results for 2016, anticipated tax rates and shares outstanding. The guidance includes the impact from the acquisition of Prime European Therapeuticals S.p.A., ("Euticals"), which closed on July 11, 2016.

AMRI’s estimates for full year 2016, including the addition of Euticals, are as follows:

Full Year 2016 revenue of $590 to $615 million, reflecting approximately $123 million of incremental revenue from Euticals, an increase of 50% at the midpoint, including:
DDS revenue growth of 27% to approximately $106 million
API revenue growth of 76% to approximately $362 million
DPM revenue growth of 10% to approximately $107 million
Fine Chemicals revenue of $16 million
Royalty revenue of $10 to $11 million
Non-GAAP contract margin of approximately 29%
Non-GAAP selling, general and administrative expenses of approximately 14% of revenue
R&D expense of between $12 and $13 million
Adjusted EBITDA between $108 and $114 million, an increase of 47% at the midpoint
Non-GAAP diluted EPS between $1.03 and $1.11, based on an average fully diluted share count of approximately 39 million shares
Non-GAAP effective tax rate of approximately 30-31%
Capital expenditures of approximately $48 million
Reflecting the recurring seasonality in AMRI’s business and greater contribution from Euticals in the fourth quarter, the Company currently expects the percentage of non-GAAP diluted EPS in the second half of 2016 to be approximately 20% in the third quarter and 80% in the fourth quarter.