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Aradigm Announces First Quarter 2016 Financial Results

On May 10, 2016 Aradigm Corporation (NASDAQ: ARDM) (the "Company") reported financial results for the first quarter and three months ended March 31, 2016 (Press release, Aradigm, MAY 10, 2016, View Source [SID:1234512241]).

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Liquidity and Capital Resources

On April 22, 2016, the Company announced the pricing of $23 million of its senior convertible notes due 2021 and related warrants to purchase 263,436 shares of the Company’s common stock in a private placement conducted pursuant to Regulation D under the Securities Act of 1933, as amended. The initial conversion rate will be 191.9386 shares of common stock for each $1,000 principal amount of notes, which represents an initial conversion price of approximately $5.21 per share of common stock. Interest on the notes will be paid semi-annually in arrears at the rate of 9% per year. The warrants are exercisable at an exercise price of $5.21 per share beginning on the later of 180 days after the date of issuance or the date the Company issues a press release announcing data related to the ORBIT-3 and ORBIT-4 Phase 3 pivotal clinical trials in non-cystic fibrosis bronchiectasis (non-CF BE) patients with chronic respiratory infections with Pseudomonas aeruginosa treated with the Company’s investigational product Pulmaquin (proprietary formulation of inhaled ciprofloxacin). The first closing of the sale of the notes and warrants occurred on April 25, 2016, and the second closing is expected to occur immediately after the Company’s resale registration statement to be filed in connection with the offering has been declared effective, each subject to customary closing conditions.

The Company intends to use the net proceeds from the offering, estimated to be $20.7 million, to fund the current clinical development and regulatory submission for licensure of Pulmaquin and for general corporate purposes.

As of March 31, 2016, the Company reported cash and cash equivalents of $22.4 million which did not include the proceeds from the first closing of the private placement offering of $23 million senior convertible notes.

First Quarter 2016 Financial Results

The Company recorded $6,000 in revenue in the first quarter of 2016 compared with $8.8 million in revenue in the first quarter of 2015. The reduction in revenue occurred because the Company utilized in prior periods the full amount of the $65 million of Grifols-funded budget provided under the inhaled ciprofloxacin collaboration arrangement for funding the bronchiectasis program.

Total operating expenses for the first quarter of 2016 were $8.1 million, compared with total operating expenses of $9.9 million for the first quarter of 2015. The decrease in research and development expenses was due to lower contract manufacturing and clinical trial costs because the manufacturing, labeling and packaging expenses for clinical supplies and the enrollment activities of the Pulmaquin Phase clinical trials are complete, offset by higher employee-related expenses due to the higher number of employees and higher consulting expenses in support of the Pulmaquin bronchiectasis regulatory process towards US and EU approvals for market authorization. General and administrative costs were higher primarily due to increased non-cash stock compensation expense and slightly higher legal expense.

Net loss for the first quarter of 2016 was $8.1 million or $0.55 per share, compared with a net loss of $1.2 million or $0.08 per share in the first quarter of 2015. Net loss increased due to lower contract revenue of $8.7 million, partially offset by lower operating expenses of $1.8 million.

About Pulmaquin

Pulmaquin is a dual release formulation composed of a mixture of liposome encapsulated and unencapsulated ciprofloxacin. Ciprofloxacin, available in oral and intravenous formulations, is a widely prescribed antibiotic. It is used to treat acute lung infections and is often preferred because of its broad-spectrum antibacterial activity against various bacteria, such as Pseudomonas aeruginosa. Pulmaquin is being evaluated in two ongoing Phase 3 studies to determine its safety and effectiveness as a once-a-day inhaled formulation for the chronic treatment of patients with non-CF BE who have chronic lung infections with Pseudomonas aeruginosa.

Following Phase 2a development of the liposomal portion of Pulmaquin (Lipoquin) and Phase 1 development of Pulmaquin, the Phase 2b study ORBIT-2 with Pulmaquin was a 24-week multicenter, randomized, double-blind, placebo-controlled trial in 42 adult non-CF BE subjects. This study demonstrated a significant reduction in P.aeruginosa sputum activity (p=0.002) and a decrease in time to first exacerbation in the per protocol population (p=0.046) and the mITT (p=0.057) populations in the Pulmaquin treated subjects compared to placebo. Overall, the incidence of all treatment emergent adverse events was similar between groups. The most frequently reported treatment related adverse events (reported by ≥ 3 patients in either treatment group) included product taste abnormal and nausea in the Pulmaquin group and wheezing in the placebo group. No serious adverse events were considered treatment related. There were no deaths reported during ORBIT-2.

The Phase 3 clinical program for Pulmaquin in non-CF BE consists of two worldwide, double-blind, placebo-controlled pivotal trials (ORBIT-3 and ORBIT-4) that are identical in design except for a pharmacokinetics sub-study to be conducted in one of the trials. Each trial has enrolled patients (278 in ORBIT-3 and 304 in ORBIT-4) into a 48-week double-blind period consisting of 6 cycles of 28 days on treatment with Pulmaquin or placebo plus 28 days off treatment, followed by a 28 day open label extension in which all participants will receive Pulmaquin (total treatment duration approximately one year). The superiority of Pulmaquin vs. placebo during the double-blind period is being evaluated in terms of the time to first pulmonary exacerbation (primary endpoint), while key secondary endpoints include the reduction in the number of pulmonary exacerbations and improvements in the quality of life measures. Lung function is being monitored as a safety indicator.

Aradigm has been granted orphan drug designations for liposomal ciprofloxacin as well as for ciprofloxacin for inhalation for non-CF BE in the U.S. In addition, the U.S. Food and Drug Administration (FDA) has designated Pulmaquin as a Qualified Infectious Disease Product (QIDP). The QIDP designation is granted for treatment of non-CF BE patients with chronic lung infections with Pseudomonas aeruginosa. The QIDP designation made Pulmaquin eligible for Fast Track designation which was granted by the FDA in September 2014.

In 2013, Aradigm granted an exclusive, world-wide license for the Company’s inhaled liposomal ciprofloxacin product candidates for the indication of non-CF BE and other indications to Grifols S.A. More information on the terms of this license may be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 13, 2014.

About Non-Cystic Fibrosis Bronchiectasis

Non-CF BE is a severe, chronic and rare disease characterized by abnormal dilatation of the bronchi and bronchioles, frequently associated with chronic lung infections. It is often a consequence of a vicious cycle of inflammation, recurrent lung infections, and bronchial wall damage. Non-CF BE represents an unmet medical need with high morbidity and mortality that affects more than 110,000 people in the U.S. and over 200,000 people in Europe. There is currently no drug approved for the treatment of this condition.

Aptose Bioscience Reports Results for the First Quarter Ended March 31, 2016

On May 10, 2016 Aptose Biosciences Inc. (NASDAQ:APTO) (TSX:APS), a clinical-stage company developing new therapeutics and molecular diagnostics that target the underlying mechanisms of cancer, reported unaudited financial results for the three months ended March 31, 2016 and reported on corporate developments (Press release, Aptose Biosciences, MAY 10, 2016, View Source;p=RssLanding&cat=news&id=2167184 [SID:1234512240]). Unless specified otherwise, all amounts are in Canadian dollars.

Net loss for the three months ended March 31, 2016 was $5.1 million ($0.42 per share) compared with $3.6 million ($0.30 per share) during the three months ended March 31, 2015. Total cash and cash equivalents and investments at March 31, 2016 were $15.0 million.

"During the first quarter we made considerable progress towards developing an improved methodology to create a stable formulation of APTO-253 for returning to the clinic," said William G. Rice, Ph.D., Chairman, President and Chief Executive Officer. "Our team has diligently tested the performance of the drug product in the IV delivery system used for patients, as well as performed numerous manufacturing, formulation development and stability and solubility studies. We believe that we are close to defining a methodology that can deliver a clinical drug product of the utmost quality and functionality. We look forward to sharing our findings with the FDA, as we seek to re-initiate dosing at our existing Phase 1b clinical trial sites and initiating dosing at our new sites in patients with acute myeloid leukemia and other hematologic malignancies."

Corporate Highlights
During the first quarter, and in collaboration with a qualified formulation contract manufacturing organization (CMO), Aptose explored numerous methodologies to identify conditions that would enhance the solubility and stability properties of the APTO-253 formulation drug product.

The company has made significant progress toward selecting a formulation methodology to manufacture a new batch of drug product that is unlikely to cause clogging of the in-line filters in the clinical setting.

Aptose scientists demonstrated that, in addition to reversing the leukemogenic dysregulation of the KLF4 gene expression, APTO-253 inhibits expression of the c-Myc oncogene in a concentration and time-dependent manner in AML cells. The c-Myc oncogene is a major driver of cancer cell proliferation, and inhibition of c-Myc gene expression and c-Myc protein levels by APTO-253 suggests APTO-253 may have anti-cancer application among a host of hematologic malignancies and solid tumors.

Aptose’s clinical team has prepared additional clinical sites at major cancer research and treatment centers in preparation to enroll patients for dosing of APTO-253. The expedited engagement of these new sites is intended to ensure an accelerated pace of patient accrual in the company’s ongoing Phase 1b clinical study after lifting of the clinical hold.

Subsequent to the quarter end, the company issued 115,927 common shares under the at-the-market facility for gross proceeds of approximately US $297 thousand.
Financial Results
Net loss for the three months ended March 31, 2016 was $5.1 million ($0.42 per share) compared with $3.6 million ($0.30 per share) during the three months ended March 31, 2015. The increase in net loss is due to increased research and development costs related to APTO-253, as well as a foreign exchange loss on USD cash and cash equivalents balances due to the appreciation of the Canadian dollar during the quarter.
Aptose utilized cash of $4.5 million in operating activities in the three months ended March 31, 2016 compared with $2.2 million in the three months ended March 31, 2015. The increase in cash used in operating activities in the current period is due to an increased net loss compared with the prior year, as well as a reduction in accounts payable and accrual balances during the quarter compared with an increase in these balances in the three months ended March 31, 2015.
Research and Development
Research and development expenses totaled $2.3 million in the three months ended March 31, 2016 compared to $884 thousand in the prior year period. Research and development costs consist of the following:
Components of research and development expenses:
Three months ended
(in thousands) March 31,
2016 March 31,
2015

Program costs $ 2,247 $ 860
Stock-based compensation 56 19
Depreciation of equipment 12 5
$ 2,315 $ 884

The increase in research and development costs in the three months ended March 31, 2016 compared with the three months ended March 31, 2015 is due to the following reasons:
Costs associated with the LALS/Moffitt collaboration developing epigenetic single molecule inhibitors of multiple targets, including the bromodomain and extraterminal domain (BET) proteins, and other kinases for which no comparable expenses existed in the prior year;
Formulation and manufacturing costs associated with APTO-253 and the root cause analysis of the filter clogging identified in November 2015;
Increased Contract Research Organization costs related to consultants and advisors as the company works towards returning APTO-253 to the clinic; and
Increased research and clinical operations headcount.
Stock-based compensation costs allocated to research and development increased in the three months ended March 31, 2016 to reflect option grants to new employees.
General and Administrative
General and administrative expenses totaled $2.6 million for the three months ended March 31, 2016 compared to $2.7 million in the three months ended March 31, 2015. General and administrative expenses consist of the following:
Components of general and administrative expenses:
Three months ended
(in thousands) March 31,
2016 March 31,
2015

General and administrative excluding salaries $ 1,133 $ 1,029
Salaries 975 753
Stock-based compensation 479 940
Depreciation of equipment 21 7
$ 2,608 $ 2,729

General and administrative costs excluding salaries are higher in the three months ended March 31, 2016 compared with the prior year due to higher rent costs associated with an additional office location, additional patent costs due to timing, as well as a depreciation in the Canadian dollar compared with the prior year period which has resulted in an increase to the cost of our US dollar denominated expenditures.
Increased salary costs have increased in the three months ended March 31, 2016 compared with the prior year due to additional headcount, the establishment of a benefits plan for employees in the United States and higher Canadian dollar salary costs for our US employees due to the lower value of the Canadian dollar during the three month period.
Stock-based compensation costs decreased in the three months ended March 31, 2016 compared with prior year due to large option grants in June and July 2014 which vested 50% during the first year and therefore contributed to higher stock based compensation expense during the first twelve-month period.
Finance Expense
Finance expense for the three months ended March 31, 2016 was $196 thousand compared with $60 thousand for the three months ended March 31, 2015. Finance expense includes the following items:
Three months ended
(in thousands) March 31,
2016 March 31,
2015
Interest expense $ − $ 20
Foreign exchange loss 196 40
$ 196 $ 60

Interest expense for the three months ended March 31, 2015 relates to interest accrued at a rate of 10% on the remaining balance of convertible promissory notes issued in September 2013 as well as accretion expense related to the conversion feature of the notes. All of the promissory notes have now been converted into common shares.
Foreign exchange loss in the three months ended March 31, 2016 is the result of a decrease in the value of our US dollar denominated cash and cash equivalents balances during the period due to the appreciation of the Canadian dollar compared to the US dollar.
Finance Income
Finance income, consisting solely of interest income, totaled $47 thousand in the three months ended March 31, 2016 compared to $104 thousand in the three months ended March 31, 2015. Interest income represents interest earned on cash and cash equivalent and investment balances.

Aptose Biosciences Inc.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(unaudited)

Three Three
months ended months ended
(amounts in 000’s of Canadian Dollars except for per common share data) March 31, 2016 March 31, 2015
REVENUE $ - $ -

EXPENSES

Research and development 2,315 884

General and administrative 2,608 2,729

Operating expenses 4,923 3,613

Finance expense 196 60

Finance income (47 ) (104 )

Net financing income 149 (44 )

Net loss and comprehensive loss for the period 5,072 3,569

Basic and diluted loss per common share $ 0.42 $ 0.30

The press release, the financial statements and the management’s discussion and analysis for the quarter ended March 31, 2016 will be available on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml

ZIOPHARM Reports First-Quarter 2016 Financial Results and Provides Update on Recent Activities

On May 10, 2016 ZIOPHARM Oncology, Inc. (Nasdaq:ZIOP) reported financial results for the first quarter ended March 31, 2016, and provided an update on the Company’s recent activities (Press release, Ziopharm, MAY 10, 2016, View Source [SID:1234512239]).

"We have solid momentum in each of our cell and gene therapy programs, with the potential to move our lead gene therapy, Ad-RTS-IL-12 + veledimex, into a pivotal study next year," said Laurence Cooper, M.D., Ph.D., Chief Executive Officer of ZIOPHARM. "Ad-RTS-IL-12 + veledimex continues to yield encouraging results as we recruit additional patients into an ongoing dose-escalation study in recurrent glioblastoma, and we look forward to presenting this data to the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) at its annual meeting in June of this year. Given the dire outcomes in this patient population, a potential therapeutic benefit may be quickly assessed and, if these results remain durable, our goal would be to move into a registration study, following discussions with regulators."

Dr. Cooper added: "As this promising program moves forward, we continue to test the potential of our cell therapy platform and technologies in collaboration with leading partners in industry and academia. This includes clinical-stage platforms unique to ZIOPHARM, such as the non-viral Sleeping Beauty (SB) system, that are fundamental to making immune cell therapy a cost-effective, widely-available treatment modality. These technologies are particularly important in leveraging T-cell receptors (TCRs) to target neoantigens in solid tumors which requires individualizing this immunotherapy, an approach that is possible with our customizable, easy-to-manufacture non-viral gene transfer system. We expect to initiate or continue prosecuting up to six clinical trials across multiple platforms in 2016 and look forward to sharing data and outcomes from these trials throughout the year."

The SB transposon-transposase is a unique non-viral system for introducing genes encoding CARs and TCRs into lymphocytes and is exclusively licensed by Intrexon Corporation (NYSE:XON) through MD Anderson and accessed as part of ZIOPHARM’s collaboration with Intrexon. This non-viral approach has several potential advantages over viral-based delivery systems, including a lower cost of generating genetically modified T cells as well as the ability to generate T cells with minimal ex vivo processing and can serve as a conduit to targeting solid tumor neoantigens using TCRs.

Program Updates

Gene Therapies

Ad-RTS-hIL-12 + veledimex is a gene therapy candidate for the controlled expression of interleukin 12 (IL-12), a critical protein for stimulating an anti-cancer immune response, using the RheoSwitch Therapeutic System (RTS) gene switch. ZIOPHARM is currently enrolling patients in two studies of Ad-RTS-hIL-12 + veledimex: a multi-center Phase 1 study in patients with recurrent or progressive glioblastoma multiforme (GBM), an aggressive form of brain cancer, and a Phase 1b/2 study for the treatment of patients with locally advanced or metastatic breast cancer following standard chemotherapy.

Preclinical studies combining Ad-RTS-IL-12 + veledimex and checkpoint inhibitors in brain tumor models presented at ASGCT (Free ASGCT Whitepaper). In an oral presentation, ZIOPHARM presented data from preclinical studies of Ad-RTS-IL-12 + veledimex combined with immune checkpoint inhibitors (iCPI) in GBM mouse models at the 2016 Meeting of the American Society of Gene and Cell Therapy (ASGCT) (Free ASGCT Whitepaper) in Washington D.C. held last week. Results demonstrated that survival of mice treated with Ad-RTS-IL-12 + veledimex and anti-PD-1 therapy was superior to either treatment alone, with a combination showing 100% survival. Because Ad-RTS-IL-12 and anti-PD-1 are clinically available, these data provide impetus for evaluating this combination immunotherapy in humans. ZIOPHARM plans to initiate a combination study in 2016 and is currently in discussion with partners to provide anti-PD-1 therapy.

Encouraging data from Phase 1 brain tumor study to be presented at ASCO (Free ASCO Whitepaper). ZIOPHARM expects to present data from a multicenter, Phase 1 gene therapy study of Ad-RTS-IL-12 in patients with recurrent or progressive GBM or Grade III malignant glioma at the 2016 ASCO (Free ASCO Whitepaper) Annual Meeting in June. Following reporting of encouraging data from the first cohort of the study at the initial dosing of Ad-RTS-IL-12 + veledimex, the Company announced last March that the first patient had been enrolled in the study’s second dose cohort. The Company continues to enroll patients in the study and remains encouraged by the survival results observed to date.
Adoptive Cell Therapies

ZIOPHARM is developing various immuno-oncology programs, including chimeric antigen receptor T-cell (CAR-T), TCR, and natural killer (NK) adoptive cell-based therapies. These programs are being advanced in collaboration with Intrexon, MD Anderson Cancer Center, and the biopharmaceutical business of Merck KGaA, Darmstadt, Germany (CAR-T only).

Preclinical study showing evolution of the Sleeping Beauty (SB) non-viral transposon-transposase system in a mouse model of leukemia presented at ASGCT (Free ASGCT Whitepaper). In an oral presentation, MD Anderson researchers in collaboration with ZIOPHARM presented data from preclinical studies demonstrating the ability to address the challenges of streamlining the manufacture of cell based therapy by leveraging the non-viral SB system to reduce cell culture time. The results were presented at the 2016 Meeting of the ASGCT (Free ASGCT Whitepaper) in Washington D.C. held last week. These data also demonstrated an improvement in the anti-tumor activity of the CD19-specific CAR by modifying the "stalk" of the CAR.

Molecular Therapy Publication Highlights the Potential of Sleeping Beauty to Personalize TCR Gene Therapy. In March, the Company announced the publication of an article describing the use of SB non-viral gene transfer technology to genetically modify T cells to target neoantigens present within solid tumors. This approach unlocks the potential for rapid and individualized TCR gene therapy aimed at unique mutations within each patient’s cancer cells. The article, titled "Stable, non-viral expression of mutated tumor neoantigen-specific T-cell receptors using the Sleeping Beauty transposon/transposase system," was published in the journal Molecular Therapy (5 March 2016, doi:10.1038/mt.2016.51), and is available online.

First patient enrolled in Phase 1 study of second generation non-viral CD19-specific CAR T-cell therapy for advanced lymphoid malignancies. In February 2016, ZIOPHARM announced that the first patient was enrolled in a new Phase 1 clinical study of its second generation non-viral CD19-specific CAR modified T-cell therapy in patients with advanced lymphoid malignancies (ClinicalTrials.gov Identifier: NCT02529813). T cells were modified using the SB system to stably express a CAR targeting CD19. This second-generation study at MD Anderson employs a CAR construct with a stalk revised to improve persistence and anti-tumor response over the first generation therapy. This investigational treatment is independent of hematopoietic stem-cell transplantation and includes patients with advanced disease.

Sleeping Beauty non-viral gene transfer technology featured in Nature Medicine. In January 2016, the SB non-viral gene transfer technology was featured in a perspectives article in the journal Nature Medicine (Volume 22, Number 1, 26-36), titled "Prospects for gene-engineered T cell immunotherapy for solid cancers." The article describes how adoptive transfer of TCR-engineered T cells for solid tumors may come from the "arduous task of targeting the unique set of mutations that cause each patient’s cancer." Because of the challenges of achieving this goal, the authors note that non-viral integration systems will likely be considerably cheaper to manufacture and easier to implement for single-use applications compared with viral vectors and that, among non-viral platforms, SB has advanced furthest in clinical development.
Milestones

ZIOPHARM expects the following milestones to occur in 2016:

Intra-tumoral IL-12 RheoSwitch programs:
Clinical update at ASCO (Free ASCO Whitepaper) 2016 for Phase 1 study of GBM
Update at ASCO (Free ASCO Whitepaper) 2016 for Phase 1/2 study in breast cancer with standard of care
CAR-T programs:
Continuation of CD19 CAR+ T-cell clinical study
Initiate a CAR+ T-cell clinical study for myeloid malignancies
Initiate CAR+ T-cell preclinical studies for other hematological malignancies and solid tumors
Initiate preclinical studies of allogeneic, off-the-shelf (OTS) T-cell studies in 2016
TCR-T programs
Initiate TCR-modified T-cell preclinical studies
NK cell programs
Initiate a Phase 1 study of OTS NK cells for AML
GvHD programs
Initiate preclinical studies
The Company is also evaluating additional potential preclinical candidates and continuing discovery efforts aimed at identifying other potential product candidates under its Exclusive Channel Agreement with Intrexon. In addition, the Company may seek to enhance its pipeline in immuno-oncology through focused strategic transactions, which may include acquisitions, partnerships and in-licensing activities.

First-Quarter 2016 Financial Results

Net loss for the first quarter of 2016 was $12.0 million, or $(0.09) per share, compared to a net loss of $78.2 million, or $(0.69) per share, for the first quarter of 2015. During the first quarter ended 2015, the company incurred a one-time non-cash charge of $67.3 million, or $(0.59) per share, related to a license agreement with The University of Texas M.D. Anderson Cancer Center.

Research and development expenses were $10.2 million for the first quarter of 2016 compared to $74.2 million for the first quarter of 2015. The decrease in research and development expenses in the current year primarily relates to a one-time charge of $67.3 million related to the M.D. Anderson license agreement in 2015.

General and administrative expenses were $3.8 million for the first quarter of 2016 compared to $4.3 million for the first quarter of 2015. The decrease was primarily due to a reduction in contracted outside service costs in 2016.

The Company ended the quarter with cash and cash equivalents of approximately $124.8 million, which the Company believes will be sufficient to fund its currently planned activities into the fourth quarter of 2017.

Vericel Reports First-Quarter 2016 Financial Results

On May 10, 2016 Vericel Corporation (NASDAQ:VCEL), a leading developer of patient-specific expanded cellular therapies for the treatment of severe diseases and conditions, reported financial results for the first quarter ended March 31, 2016 (Press release, Vericel, MAY 10, 2016, View Source [SID:1234512238]).

Total net revenues for the quarter ended March 31, 2016 were approximately $14.1 million and included approximately $8.8 million of Carticel net revenues and approximately $5.3 million of Epicel net revenues. Total Carticel and Epicel net revenues increased 31% over the first quarter of 2015, with Carticel revenues increasing 24% and Epicel revenues increasing 46%, respectively, compared to the same period in 2015.

Gross profit for the quarter ended March 31, 2016 was $7.5 million, or 54% of net revenues, compared to $5.3 million, or 49% of net product revenues, for the first quarter of 2015.

Research and development expenses for the quarter ended March 31, 2016 were $3.5 million, compared to $4.4 million in the first quarter of 2015. The decrease in research and development expenses in the first quarter is primarily due to a reduction in clinical trial expenses.

Selling, general and administrative expenses for the quarter ended March 31, 2016 were $6.0 million compared to $5.5 million for the same period in 2015. The increase in SG&A expenses is primarily due to an increase in shared facility fees.

Loss from operations for the quarter ended March 31, 2016 was $2.0 million, compared to $4.6 million for the first quarter of 2015. Material non-cash items impacting the operating loss for the quarter included $0.5 million of stock-based compensation expense and $0.4 million in depreciation and amortization expense.

Other expense for the quarter ended March 31, 2016 was $1.7 million compared to less than $0.3 million for the same period in 2015. The change in other expense for the quarter is primarily due to the change in the fair value of warrants in the first quarter of 2016 compared to the same period in 2015.

Vericel reported an adjusted net loss for the quarter ended March 31, 2016 of $2.0 million dollars, or $0.08 per share, compared to an adjusted net loss of $4.5 million, or $0.19 per share, for the same period in 2015. The adjusted net loss excludes the non-cash change in the fair value of warrants and the non-cash accumulated dividend on the Series B convertible preferred stock. The adjusted earnings per share includes common shares reserved as treasury shares received in exchange for the Series A non-voting convertible preferred stock. Vericel’s GAAP net loss for the quarter ended March 31, 2016 was $3.7 million, or $0.24 per share, compared to a net loss of $4.9 million, or $0.27 per share, for the same period in 2015.

As of March 31, 2016, the company had $13.5 million in cash and cash equivalents compared to $14.6 million in cash and cash equivalents at December 31, 2015.

Recent Business Highlights
During and since the first quarter of 2016, the company:

Achieved 31% growth in total Carticel and Epicel net revenues in the first quarter, including 24% and 46% growth in Carticel and Epicel net revenues, respectively, versus the same period in 2015;
Achieved gross margins of 54% of total net revenues in the first quarter versus 49% in the same period in 2015;
Received U.S. Food and Drug Administration (FDA) approval of the Epicel Humanitarian Device Exemption (HDE) supplement, which revised the Epicel label to include pediatric patients and specify the probable benefit, mainly related to survival, for adult and pediatric patients, and allows the company to sell Epicel for profit on up to 360,400 grafts per year;
Submitted a Biologics License Application for MACI for the treatment of cartilage defects of the knee, which was accepted for review by the FDA with a PDUFA goal date of January 3, 2017;
Announced results from the company’s Phase 2b ixCELL-DCM clinical study of ixmyelocel-T in patients with advanced heart failure due to ischemic dilated cardiomyopathy, which were presented at the American College of Cardiology’s (ACC) 65th Annual Scientific Session and published in The Lancet;
Entered into a $10 million credit facility and $5 million term loan agreement with Silicon Valley Bank to access low-cost, non-dilutive capital for the company; and
Executed a service agreement with Dohmen Life Science Services, LLC for clinical- and patient-support services for Carticel and MACI, if approved.
"We had a very strong first quarter and made tremendous progress across all facets of our business," said Nick Colangelo, president and CEO of Vericel. "Our strong revenue growth and margin expansion reflect the success of our commercial team’s sales and marketing initiatives, and our clinical and regulatory team made substantial progress on our key clinical and regulatory priorities. We believe that these results position the company for strong growth moving forward."

CAR-T cell therapy

CAR-T cell(Chimeric Antigen Receptor modified T cells) therapy is a newly emerging cellular immunotherapy technology (Company Web Page, Sinobioway Bioeconomy Group , MAY 10, 2016, View Source;second_id=3002 [SID:1234512236]). With molecular biological methods, it combines together the antibody fragment that identifies tumor-associated antigen(scFv), components of T cell receptor(CD3 ζ), costimulatory signal molecules for T cell activation(CD28, CD137 etc.) and junction fragments, to construct the chimeric antigen receptor(CAR). Then it introduces CAR into T cells by gene engineering techniques, thus acquiring the target killing capacity independent of MHC pathway.