On May 10, 2016 GTx, Inc. (Nasdaq: GTXI) reported financial results for the first quarter ended March 31, 2016, and highlighted recent accomplishments and upcoming milestones (Press release, GTx, MAY 10, 2016, View Source;p=RssLanding&cat=news&id=2166792 [SID:1234512174]). The Company is currently enrolling patients in three clinical trials: two trials evaluating enobosarm as a potential treatment for women with advanced breast cancer and another assessing enobosarm as a potential treatment for stress urinary incontinence in postmenopausal women.

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"During the first quarter, we executed on several ongoing initiatives that we expect will make 2016 a year of considerable progress," said Dr. Robert J. Wills, Executive Chairman of GTx. "We have continued to make progress in the enrollment of our two advanced breast cancer clinical trials of enobosarm, with preliminary data from the first stage of each study expected by the end of 2016. Also, we are excited to be collaborating with doctors on a clinical trial that is the first clinical study to use a SARM to treat stress urinary incontinence in postmenopausal women and expect data from this study late in 2016."

Corporate Highlights and Anticipated Milestones

Enobosarm in Breast Cancer: The Company’s lead product candidate, a selective androgen receptor modulator (SARM), is being developed as a targeted treatment for two advanced breast cancer indications: (i) estrogen receptor positive (ER+) and androgen receptor positive (AR+) breast cancer, and (ii) AR+ triple negative breast cancer (TNBC). For both clinical trials, the primary efficacy endpoint will be clinical benefit, which is defined as a complete response, partial response or stable disease.

ER+/AR+ breast cancer: We currently expect to complete enrollment in the first stage of the open-label, Phase 2 clinical trial of enobosarm in women with metastatic or locally advanced ER+/AR+ breast cancer in the second quarter of 2016, to allow us to determine during the fourth quarter of this year whether there is sufficient safety and efficacy data to warrant proceeding with the second stage of the clinical study. While the first stage of the trial will evaluate 18 patients for each of the two dosing arms, 9 mg and 18 mg of enobosarm, the trial is designed to enroll up to 118 patients to obtain data from 44 evaluable patients in each study arm (a total of 88 evaluable patients) to assess the primary efficacy objective of clinical benefit response following 24 weeks of treatment.
AR+ TNBC: We currently expect to complete enrollment in the first stage of the open-label, proof-of-concept Phase 2 clinical trial of 18 mg of enobosarm in women with advanced AR+ TNBC in the third quarter of 2016, to allow us to determine by the end of 2016 whether there is sufficient safety and efficacy data to warrant proceeding with the second stage of the clinical study. While the first stage will include 21 evaluable patients, the trial is designed to enroll up to 55 patients in total in order to obtain data from 41 evaluable patients to assess the primary efficacy objective of clinical benefit response following 16 weeks of treatment.
SARMs in Non-Oncologic Indications: The Company is exploring SARMs as potential treatments for both stress urinary incontinence (SUI) and Duchenne muscular dystrophy (DMD), a rare disease characterized by progressive muscle degeneration and weakness.

SUI: We are currently enrolling patients in a Phase 2 proof-of-concept clinical trial of 3 mg of enobosarm to treat up to 35 postmenopausal women with SUI, the first clinical trial to evaluate a SARM for SUI. Top-line data from the Phase 2 clinical trial is anticipated by the end of 2016.
DMD: The Company’s preclinical studies have continued to confirm beneficial effects from SARMs in mice genetically altered to simulate DMD, compared to control groups. The Company continues to advance its preclinical initiatives while pursuing a strategic collaboration with potential biopharma partners experienced in orphan drug development.
SARDs in Prostate Cancer: Our Selective Androgen Receptor Degrader (SARD) technology is being evaluated as a potentially novel treatment for men with castration-resistant prostate cancer (CRPC), including those who do not respond or are resistant to currently approved therapies. The Company believes that its SARD compounds will degrade multiple forms of the androgen receptor, including AR splice variants, such as AR-V7.

CRPC: Several lead SARD compounds are currently being evaluated in preclinical studies to select the best SARD compounds for continued development, as well as to develop data necessary to initiate first in human clinical trials in 2017.
First Quarter 2016 Financial Results

As of March 31, 2016, cash and short-term investments were $24.3 million compared to $29.3 million at December 31, 2015.
Research and development expenses for the quarter ended March 31, 2016 were $4.0 million compared to $2.9 million for the same period of 2015.
General and administrative expenses were $2.1 million for both the quarter ended March 31, 2016 and March 31, 2015.
The Company recognized a non-cash gain of $8.2 million and $2.6 million for the quarter ended March 31, 2016 and 2015, respectively, due to the change in fair value of the Company’s warrant liability. During the first quarter of 2016, the Company recorded a non-cash reclassification of this warrant liability to stockholders’ equity due to the modification of these warrants. No adjustments to the fair value of these warrants will be made in the future.
Net income for the quarter ended March 31, 2016 was $2.1 million compared to a net loss of $2.4 million for the same period in 2015. Net income for the quarter ended March 31, 2016 included the non-cash gain of $8.2 million related the revaluation of our warrant liability. The net loss for the quarter ended March 31, 2015 included a non-cash gain of $2.6 million related to the change in the fair value of the Company’s warrant liability.
GTx had approximately 141.7 million shares of common stock outstanding as of March 31, 2016. Additionally, there remain warrants outstanding to purchase approximately 64.3 million shares of GTx common stock at an exercise price of $0.85 per share.

On May 10, 2016 Genmab reported its Interim Report for the First Quarter of 2016 (Press release, Genmab, MAY 10, 2016, View Source [SID:1234512173]).

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Net Sales of DARZALEX (daratumumab) by Janssen for the first quarter of 2016 were USD 101.9 million, resulting in royalty income of DKK 83 million
Announced positive interim result in Phase III Castor study of daratumumab in relapsed or refractory multiple myeloma
Announced studies of daratumumab in combination with atezolizumab in a solid tumor and multiple myeloma
Achieved USD 5 million milestone for progress in the Phase II study of daratumumab in non-Hodgkin’s lymphoma (NHL) under collaboration with Janssen

Announced updated development plans for ofatumumab in autoimmune indications
U.S. Food and Drug Administration (FDA) Approval of Arzerra (ofatumumab) as extended treatment for recurrent or progressive chronic lymphocytic leukemia (CLL)
U.S. and EU regulatory submissions for ofatumumab in combination with fludarabine and cyclophosphamide for relapsed CLL
"The first quarter of 2016 saw continued rapid progress in the development of daratumumab with Janssen: We reported positive interim data in the Phase III Castor study of daratumumab in combination with bortezomib and dexamethasone, achieved the second milestone in the Phase II NHL study, and announced the first study to combine daratumumab with Roche’s anti-PDL1 antibody atezolizumab, in a solid tumor and multiple myeloma. We also started off the year with a number of achievements under our Arzerra collaboration with Novartis. Arzerra was approved in the U.S. as extended treatment for recurrent or progressive CLL and regulatory submissions for ofatumumab in combination with fludarabine and cyclophosamide in relapsed CLL were submitted in the U.S. and Europe. Furthermore, we announced that development of the subcutaneous formulation of ofatumumab in autoimmune indications will be focused on relapsing multiple sclerosis, with large Phase III studies run by Novartis expected to start later this year," said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab.

Financial Performance First Quarter
Revenue was DKK 170 million in the first quarter of 2016 compared to DKK 107 million in the first quarter of 2015. The increase of DKK 63 million, or 59%, was mainly driven by higher royalty and milestone revenue under our daratumumab collaboration with Janssen.

Operating expenses were DKK 154 million in the first quarter of 2016 compared to DKK 110 million in the first quarter of 2015. The increase of DKK 44 million, or 40%, was due to the additional investment in our pipeline of products, including the advancement of tisotumab vedotin, HuMax-AXL-ADC, HexaBody-DR5/DR5, DuoBody-CD3xCD20, and our other pre-clinical programs.

Operating income was DKK 16 million in the first quarter of 2016 compared to DKK 173 million in the first quarter of 2015. The decrease of DKK 157 million was driven by the one-time reversal of the ofatumumab funding liability of DKK 176 million in 2015 combined with increased operating expenses, which were partly offset by higher revenue.

On March 31, 2016, Genmab had a cash position of DKK 3,491 million, similar to the cash position of DKK 3,493 million at December 31, 2015.

Business Progress First Quarter to Present
Daratumumab
March: Announced that the Phase III Castor study (MMY3004) of daratumumab in combination with bortezomib and dexamethasone versus bortezomib and dexamethasone in patients with relapsed or refractory multiple myeloma met the primary endpoint of improving progression free survival (PFS) in a planned interim analysis (p<0.0001). Janssen will engage in a dialogue with the health authorities about the potential for these data to serve as the basis for a regulatory submission.

March: Announced that daratumumab will be investigated in Phase Ib clinical studies in combination with atezolizumab, an anti-PD-L1 antibody, in a solid tumor and multiple myeloma. The studies will be conducted under a collaboration agreement between Janssen Biotech, Inc. (Janssen) and Genentech, a member of the Roche Group.

March: Achieved the second milestone in the ongoing Phase II study of daratumumab in NHL, triggering a USD 5 million payment from Janssen.

Ofatumumab
March: Announced that supplemental regulatory applications for the use of Arzerra in combination with fludarabine and cyclophosphamide for the treatment of patients with relapsed CLL were submitted in the U.S. and EU by Novartis.

March: Announced an update on development plans for ofatumumab in autoimmune indications focusing on relapsing multiple sclerosis following the transfer of the rights to ofatumumab in this disease area from GlaxoSmithKline (GSK) to Novartis at the end of 2015. Phase III studies of the subcutaneous formulation of ofatumumab in relapsing multiple sclerosis are expected to be initiated by Novartis during the second half of 2016. The Phase III study of the subcutaneous formulation of ofatumumab in pemphigus vulgaris, which was started by GSK, will be discontinued.

January: The U.S. FDA approved a supplemental Biologics License Application (sBLA) for the use of Arzerra for extended treatment of patients who are in complete or partial response after at least two lines of therapy for recurrent or progressive CLL.

Subsequent Events
April: Reported additional data from the Phase III Castor study of daratumumab in combination with bortezomib and dexamethasone versus bortezomib and dexamethasone in patients with relapsed or refractory multiple myeloma. The study met the primary endpoint of improving PFS; Hazard Ratio (HR) = 0.39, p<0.0001. The median PFS for patients treated with daratumumab has not been reached, compared to median PFS of 7.2 months for patients who did not receive daratumumab. Data from this study was accepted for oral presentation in a Plenary Session at the 2016 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting.

April: Announced that MorphoSys filed a complaint at the U.S. District Court of Delaware against Genmab and Genmab’s collaboration partner Janssen, for patent infringement under U.S. patent no. 8,263,746 based on activities relating to the manufacture, use and sale of DARZALEX in the United States. Genmab and Janssen disagree with the allegations made by MorphoSys in its complaint for patent infringement related to CD38 antibodies and intend to vigorously contest those allegations.
April: The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending the granting of a conditional marketing authorization for DARZALEX intended for the treatment of relapsed and refractory multiple myeloma. The recommendation is for the use of DARZALEX as monotherapy for the treatment of adult patients with relapsed and refractory multiple myeloma, whose prior therapy included a proteasome inhibitor (PI) and an immunomodulatory agent and who have demonstrated disease progression on the last therapy.

Outlook
Genmab is maintaining its 2016 revised financial guidance published on April 20, 2016.

On May 10, 2016 AMRI (NASDAQ: AMRI) reported financial and operating results for the first quarter ended March 31, 2016 and provided an update to its outlook for 2016 (Press release, Albany Molecular Research, MAY 10, 2016, View Source [SID:1234512169]).

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Highlights:

First quarter contract revenue of $102.8 million, up 37% from 2015
First quarter royalties of $2.7 million, down 59% from 2015 due to expiration of Allegra royalties in Q2-2015
First quarter adjusted contract margins 27%
First quarter adjusted diluted EPS of $0.07, reflecting a $0.07 decrease in EPS from royalties in the current quarter
First quarter adjusted EBITDA of $13.1 million
Confirms standalone full year 2016 financial guidance

"Adjusted contract margins", "Adjusted diluted EPS", and "Adjusted EBITDA" are Non-GAAP measurements. See discussion under the heading "Non-GAAP Adjustment Items" in this release.
"Our first quarter results fell short of expectations largely due to timing of API revenue, combined with increased R&D investment and higher SG&A," said William S. Marth, AMRI’s president and chief executive officer. "While our API results were lower than we would have liked, we believe the results are transitory and revenue will build through the year based on contractual obligations we have in hand. Additionally, strong performances in our Drug Product and DDS businesses give us confidence in our outlook for the full year 2016.

We have also continued our investment in generics, with multiple co-development programs underway, as exhibited by the increase in annual R&D investment, in line with our guidance. While we are sharing the costs of some of these development programs now, longer term, we will capture revenue through commercial supply and royalty revenue that is expected to more than offset the investment we are making today."

We are excited about the Euticals acquisition and the benefits of adding such a highly regarded company to our team. As we have said before, our strategy is to build off our existing platforms of API, Discovery/Development and Drug Product by expanding our capabilities, both organically and inorganically in areas with high barriers to entry, creating greater sustainable value. The addition of Euticals fits that strategy well and offers compelling strategic benefits that we believe will generate meaningful value for our customers and shareholders longer term."

First Quarter 2016 Results

Total revenue for the first quarter of 2016 was $105.6 million, an increase of 29%, compared to total revenue of $81.8 million reported in the first quarter of 2015.

Total contract revenue for the first quarter of 2016 was $102.8 million, an increase of 37%, compared to total contract revenue of $75.1 million reported in the first quarter of 2015. Adjusted contract margins were 27% for the first quarter of 2016, compared with 23% for the first quarter of 2015, driven largely by the addition of Gadea Pharmaceuticals. Adjusted contract margins exclude purchase accounting depreciation and amortization, purchase accounting inventory adjustments, and share-based compensation expense that are included under U.S. GAAP. For a reconciliation of U.S. GAAP contract margins as reported to adjusted contract margins for the 2016 and 2015 reporting periods, please see Table 1 at the end of press release.

Royalty revenue in the first quarter of 2016 was $2.7 million, a decrease of 59% from $6.7 million in the first quarter of 2015 due primarily to lower royalties on Allegra (fexofenadine) products which ended in the second quarter 2015, based on the expiration of the underlying patents. Royalty revenue for the first quarter of 2016 includes $2.2 million from the net sales of certain amphetamine salts sold by Actavis and royalties from an API sourced from our business in Spain.

Net loss under U.S. GAAP was $(10.1) million, or $(0.29) per basic and diluted share, in the first quarter of 2016, compared to U.S. GAAP net loss of $(2.2) million, or $(0.07) per basic and diluted share for the first quarter of 2015. Net income on an adjusted non-GAAP basis in the first quarter was $2.4 million or $0.07 per diluted share, compared to adjusted net income of $6.4 million or $0.19 per diluted share for 2015.

Adjusted EBITDA in the first quarter of 2015 was $13.1 million, a decrease of $2.5 million or 16% compared to the first quarter 2015. For a reconciliation of U.S. GAAP net income (loss), EBITDA and earnings (loss) per diluted share to adjusted net income, EBITDA and earnings per diluted share for the 2016 and 2015 reporting periods, please see Tables 2 and 3 at the end of this press release.

Segment Results

Active Pharmaceutical Ingredients (API)

Three Months Ended

March 31,
(Unaudited; $ in thousands)

2016

2015

API Royalty Revenue

$ 2,741

$ 2,868
API Contract Revenue

54,702

37,848
API Total Revenue

57,443

40,716

Cost of Contract Revenue

40,921

28,583

Contract Gross Profit, excluding royalties

13,781

9,265
Contract Gross Profit, including royalties

16,522

12,133

Contract Gross Margin, excluding royalties

25.2%

24.5%
Contract Gross Margin, including royalties

28.8%

29.8%

Adjusted Contract Gross Profit, excluding royalties (1)

17,244

9,442
Adjusted Contract Gross Margin, excluding royalties (1)

31.5%

24.9%

Adjusted Contract Gross Profit, including royalties (1)

19,985

12,310
Adjusted Contract Gross Margin, including royalties (1)

34.8%

30.2%

(1) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross profit and contract gross margin to adjusted contract gross profit and adjusted contract gross margin as a percentage of contract revenue.
API contract revenue for the first quarter of 2016 increased 45% compared to the same period of 2015, primarily due to $20 million of incremental revenue from the acquisition of Gadea Pharmaceuticals in July 2015, offset by lower revenue associated with the Holywell, UK site closure. API adjusted contract margin for the first quarter of 2016 increased 7 percentage points from the first quarter of 2015, driven by the margins realized on Gadea’s revenues. API adjusted profit margin including royalties was 35% for the first quarter of 2016, compared to 30% for the same period in 2015.

Drug Discovery Services (DDS)

Three Months Ended

March 31,
(Unaudited; $ in thousands)

2016

2015

DDS Contract Revenue (1)

$ 23,203

$ 17,873
Cost of Contract Revenue (1)

17,170

13,705
Contract Gross Profit

6,033

4,168
Contract Gross Margin

26.0%

23.3%

Adjusted Contract Gross Profit (2)

6,548

4,324
Adjusted Contract Gross Margin (2)

28.2%

24.2%

(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 adjusted contract gross profit and adjusted contract gross margin as a percentage of contract revenue.
Discovery and Development Services (DDS) contract revenue for the first quarter of 2016 increased 30% compared to the first quarter of 2015, primarily due to the additions of Whitehouse Laboratories and SSCI, along with organic growth. DDS adjusted gross margins increased to 28% in the first quarter of 2016, from 24% in the first quarter of 2015, driven by margins realized on Whitehouse Labs and SSCI revenue, and higher capacity utilization resulting from previous cost reduction initiatives.

Drug Product Manufacturing (DPM)

Three Months Ended

March 31,
(Unaudited; $ in thousands)

2016

2015

DPM Contract Revenue (1)

$ 24,933

$ 19,410
Cost of Contract Revenue (1)

21,272

15,851
Contract Gross Profit

3,661

3,559
Contract Gross Margin

14.7%

18.3%

Adjusted Contract Gross Profit (2)

3,972

3,730
Adjusted Contract Gross Margin (2)

15.9%

19.2%

(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 loss and contract gross margin to adjusted contract gross profit and adjusted contract gross margin as a percentage of contract revenue.
Drug Product Manufacturing contract revenue for the first quarter of 2016 increased 28% compared to the first quarter 2015, reflecting higher commercial manufacturing revenue. Drug Product adjusted contract margins for the first quarter of 2016 decreased 3 percentage points, reflecting higher costs associated with commercial launch preparations at our Burlington facility and planned site maintenance activities at our Albuquerque facility.

Liquidity and Capital Resources

At March 31, 2016, AMRI had cash, cash equivalents and restricted cash of $47.2 million, compared to $52.3 million at December 31, 2015. The decrease in cash and cash equivalents for the quarter ended March 31, 2016 was primarily due to the use of $11.6 million in capital expenditures and $5.8 million of debt paydown, offset by cash generated by operating activities of $11.7 million. At March 31, 2016, total common shares outstanding, net of treasury shares, were 35,708,100.

Financial Outlook

AMRI’s guidance takes into account a number of factors, including expected financial results for 2016, anticipated tax rates and shares outstanding. AMRI’s guidance also excludes any potential impact from the acquisition of Prime European Therapeuticals S.p.A., ("Euticals"), which is expected to close in the third quarter 2016.

AMRI’s estimates for full year 2016 are consistent with estimates previously provided on February 17, 2016:

Full Year 2016 revenue of $465 to $490 million, an increase of 19% at the midpoint, including
DDS revenue growth of over 20% to approximately $104 million
API revenue growth of 27% to approximately $260 million
Drug Product revenue growth of 8% to approximately $105 million
Adjusted contract margin of approximately 30%
Adjusted selling, general and administrative expenses of approximately 15% of revenue
R&D of between $9 and $10 million
Adjusted EBITDA between $91 and $97 million, an increase of 25% at the midpoint
Adjusted diluted EPS is expected to be between $1.00 and $1.10, based on an average fully diluted share count of approximately 37 million shares
Effective tax rate of between 29% and 30%
Capital expenditures of approximately $45 million

Curegenix is developing drug candidates targeting a key stem cell pathway in cancer (Company Web Page, Curegenix, MAY 10, 2016, View Source [SID:1234512167]). Our "first-in-class"/"best-in-class" compound CGX1321 for treating gastrointestinal (GI) cancers has completed all IND-enabling studies . We now seek VC investment to advance CGX1321 into clinical development.

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Tokalas’ first lead product candidate, TK-216, is a novel, first-in-class ets-family transcription factor inhibitor that targets the EWS-FLI1 fusion protein (Company Web Page, Tokalas, MAY 10, 2016, View Source [SID:1234512166]). Oncogenic fusion proteins involving ets-family gene translocations are known to cause Ewing sarcoma, the company’s first targeted therapy for high unmet need cancers.

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TK-216 is based on technology developed under the direction of Jeffrey Toretsky, M.D. at Georgetown University and licensed to Tokalas through an academic-private development partnership. IND enabling non-clinical studies of TK-216 have been completed, and Tokalas will initiate Phase 1 clinical testing in patients with advanced Ewing sarcoma in early 2016 at MD Anderson, Memorial Sloan Kettering, and UCLA. Tokalas is exploring expedited registration strategies with both US and European regulatory agencies.
Tokalas is also evaluating the unmet medical need in other cancers that sometimes carry overexpressed or translocated ets-family oncogenes, including prostate cancer, AML, and glioblastoma.