On November 4, 2015 MorphoSys AG (FSE: MOR; Prime Standard Segment; TecDAX, OTC: MPSYY) reported its financial results for the nine months ending September 30, 2015 (Press release, MorphoSys, NOV 3, 2015, View Source [SID:1234507929]). Group revenues were EUR 93.9 million (9-months 2014: EUR 46.9 million). Earnings before interest and taxes (EBIT) amounted to EUR 34.7 million (9-months 2014: EUR -3.7 million). The increase in revenues and EBIT is caused by the full realization of deferred revenues from an up-front payment received from Celgene in 2013 together with a one-time termination payment that the Company received with the ending of the MOR202 collaboration. On September 30, 2015, MorphoSys held cash and cash equivalents, marketable securities, and financial assets classified as loans and receivables of EUR 317.7 million in comparison to EUR 352.8 million on December 31, 2014.

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Highlights of the Third Quarter 2015

In September, MorphoSys published an updated overview of its proprietary drug pipeline and reaffirmed its plans to increase investment in development with MOR208 set to become the first proprietary drug candidate in a phase 3 study, which is aimed to start in 2017.

At the 15th International Myeloma Workshop in September, MorphoSys published an update on the safety and preliminary efficacy data of MOR202 from an ongoing phase 1/2a study. The clinical data confirmed a very good overall safety profile and promising efficacy data from the highest monotherapy cohort and the first combo-therapy cohorts.

In August, MorphoSys and G7 Therapeutics AG announced a new collaboration to support MorphoSys’s activities in developing novel antibody therapeutics targeting G protein-coupled receptors (GPCRs) and other potentially disease-related transmembrane proteins such as ion channels.

Also in August, MorphoSys announced a strategic alliance with Immatics Biotechnologies GmbH. This alliance was formed for the development of novel antibody-based therapeutics against tumor-associated peptides derived from intracellular proteins.
In July, MorphoSys announced that its partner, Heptares Therapeutics, exercised an option to initiate its own therapeutic antibody program under the research alliance entered into by the companies in February 2013.

After the end of the quarter, MorphoSys announced that it had reached a clinical milestone associated with the IND filing of an antibody being developed in the field of bleeding disorders by its partner Bayer HealthCare.

MorphoSys’s product pipeline comprised a total of 104 therapeutic antibodies, including 25 clinical programs. Three partnered programs are currently in phase 3 trials.

"Our lead product candidate MOR208 has demonstrated impressive single-agent activity in NHL and CLL, and we are on track to initiate additional trials shortly. We are also working towards taking MOR208 into a pivotal study in DLBCL which could potentially support a registration pathway," stated Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. "During the quarter, we added two more collaborations to our network of relationships, thereby opening up new product opportunities."

"MorphoSys is progressing well in 2015," commented Jens Holstein, Chief Financial Officer of MorphoSys AG. "Our financial strength, together with a promising pipeline of proprietary drug candidates, allows us to scale our investment in R&D to ensure that we capture the full value of our portfolio."

Financial Review for the First Nine Months of 2015 (IFRS)

Group revenues for the first nine months of 2015 amounted to EUR 93.9 million (9-months 2014: EUR 46.9 million). Reasons for the increase were one-time effects in connection with the full realization of deferred revenues from an up-front payment received from Celgene in 2013 together with a one-time termination fee. The Proprietary Development segment recorded revenues of EUR 59.9 million (9-months 2014: EUR 11.5 million), originating mainly as a result of the termination of the co-development activities with Celgene. Revenues in the Partnered Discovery segment comprised EUR 31.5 million in funded research and licensing fees (9-months 2014: EUR 33.1 million) and EUR 2.5 million in success-based payments (9-months 2014: EUR 2.4 million).

Total operating expenses for the first nine months of 2015 amounted to EUR 63.6 million (9-months 2014: EUR 51.1 million). Total research and development expenses were EUR 53.1 million (9-months 2014: EUR 40.8 million). R&D expenses mainly consisted of costs for external lab services and personnel costs. Expenses for proprietary product and technology development amounted to EUR 39.9 million (9-months 2014: EUR 26.1 million). General and administrative expenses increased slightly to EUR 10.6 million (9-months 2014: EUR 10.3 million) driven by higher expenses for personnel.

Earnings before interest and taxes (EBIT) amounted to EUR 34.7 million (9-months 2014: EUR -3.7 million). The Proprietary Development segment reported a segment EBIT of EUR 26.5 million (9-months 2014: EUR -12.7 million), while Partnered Discovery showed a segment EBIT of EUR 18.1 million (9-months 2014: EUR 18.3 million).

For the first three quarters of 2015, MorphoSys realized a net profit of EUR 28.2 million compared to EUR -2.0 million in the same period of the previous year. The resulting diluted earnings per share for the nine months ending September 30, 2015 amounted to EUR 1.07 (9-months 2014: EUR -0.08).

On September 30, 2015, the Company held liquid funds and marketable securities, as well as other financial assets (reported in the balance sheet under cash and cash equivalents, available for sale financial assets, bonds available for sale and financial assets classified as loans and receivables), in the amount of EUR 317.7 million, compared to EUR 352.8 million on December 31, 2014. The net cash outflow from operations in the first nine months of 2015 was EUR 3.8 million (9-months 2014: net cash outflow of EUR 3.3 million). The number of shares issued at September 30, 2015 was 26,479,334, compared to 26,456,834 on December 31, 2014.

Third Quarter of 2015 (IFRS)

In the third quarter of 2015, the Company generated revenues in the amount of EUR 11.3 million, compared to EUR 16.4 million in the same quarter of 2014. Total operating expenses amounted to EUR 22.7 million in Q3 2015, compared to EUR 21.0 million in the same quarter of 2014. EBIT amounted to EUR -11.3 million (Q3 2014: EUR -4.2 million). Net loss for the third quarter 2015 was EUR 8.3 million, compared to a net loss of EUR 2.6 million in the third quarter of 2014.

Outlook for 2015

MorphoSys re-confirmed its guidance for 2015. MorphoSys anticipates total Group revenues of EUR 101 million to EUR 106 million and anticipates a positive EBIT in the range of EUR 9 million to EUR 16 million in 2015. Expenses for proprietary product and technology development are expected to amount to EUR 56 million to EUR 63 million.

On November 3, 2015 Merrimack (Nasdaq: MACK) reported that it will present research on several of its therapeutic candidates at the 2015 AACR (Free AACR Whitepaper)-NCI-EORTC AACR-NCI-EORTC (Free AACR-NCI-EORTC Whitepaper) International Conference on Molecular Targets and Cancer Therapeutics (EORTC-NCI-AACR) (Free ASGCT Whitepaper) (Free EORTC-NCI-AACR Whitepaper), November 5-9, 2015 at Hynes Convention Center in Boston (Press release, Merrimack, NOV 3, 2015, View Source [SID:1234507928]). Presentations include recent preclinical data from Merrimack’s antibody engineering technology platforms.

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Data will be presented in three poster sessions:

Poster Sessions

Istiratumab (MM-141), a bispecific antibody co-targeting IGF-1R and ErbB3, potentiates the activity of immune checkpoint inhibitors (Abstract #A89)
Poster Session A
Session Title: Immune Modulators
Friday, November 6, 2015, 12:15 PM – 3:15 PM ET
Exhibit Hall C-D

MM-151 overcomes acquired resistance to cetuximab and panitumumab in colorectal cancer cells harboring EGFR extracellular domain mutations (Abstract #LB-B05)
Poster Session B
Session Title: EGFR/Her2
Saturday, November 7, 2015, 12:30 PM – 3:30 PM ET
Exhibit Hall C-D

Inhibition of ERBB3 with MM-121, IGF1-R with MM-141 or Met with MM-131 increases the activity of EGFR inhibitor MM-151 in colorectal cancer models expressing multiple resistance ligands (Abstract #LB-C25)
Poster Session C
Session Title: Drug Resistance and Modifiers
Sunday, November 8, 2015, 12:30 PM – 3:30 PM ET
Exhibit Hall C-D

On November 3, 2015 Foundation Medicine, Inc. (NASDAQ:FMI) reported financial and operating results for its third quarter ended September 30, 2015 (Press release, Foundation Medicine, NOV 3, 2015, View Source [SID:1234507926]). Highlights for the quarter included:

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Third quarter revenue of $25.4 million, 54% year-over-year growth;
Third quarter revenue from biopharmaceutical customers of $11.7 million, 75% year-over-year growth;
Third quarter revenue from clinical testing of $13.7 million, 40% year-over-year growth;
8,012 clinical tests reported in the third quarter, 25% year-over-year growth;
Broadening molecular information solutions with the launch of GeneKit, a genomic solutions portal for pathologists, and expanding FoundationCORE to approximately 60,000 patient cases;
United Healthcare’s published medical policy for coverage of highly validated genomic profiling in patients with non-small cell lung cancer; and,

Launching the Precision Medicine Exchange Consortium(PMEC) with eight leading academic and community-based cancer centers, including The Cleveland Clinic’s Taussig Cancer Institute, Hackensack University Medical Center, and Sidney Kimmel Cancer Center at Thomas Jefferson University.

Foundation Medicine reported total revenue of $25.4 million in the third quarter of 2015, compared to $16.4 million in the third quarter of 2014 and $22.5 million in the second quarter of 2015. Revenue from clinical testing in the third quarter of 2015 was $13.7 million, compared to $9.8 million in the third quarter of 2014 and $12.4 million in the second quarter of 2015.

The company reported 8,012 clinical tests in the third quarter of 2015, a 25% increase from the same quarter last year. This number includes 7,000 FoundationOne tests and 1,012 FoundationOne Heme tests. The results of an additional 2,676 tests were also reported to biopharmaceutical customers in this year’s third quarter.

Revenue from biopharmaceutical customers grew to $11.7 million in the third quarter, a 75% increase from the same quarter last year and an increase of 17% from the second quarter of 2015. This growth underscores the diverse revenue streams generated by biopharmaceutical customers engaged with the company in clinical trial, molecular information data access, and companion diagnostic development activities.

"Foundation Medicine delivered 54% year-over-year revenue growth driven by particularly strong results from our biopharmaceutical business," said Michael Pellini, M.D., chief executive officer of Foundation Medicine. "While our third quarter clinical revenue and volume increased significantly year-over-year, these numbers also reflect that we have work to do in this nascent market. We believe we are well-positioned for continued growth over the near and long term with our fully integrated, diversified business, a growing pipeline of innovative products, a strong balance sheet and a global partner in Roche."

The company’s cancer knowledgebase, FoundationCORE, grew to approximately 60,000 clinical cases. FoundationCORE is a unique asset and critical component of the value that Foundation Medicine delivers to its biopharmaceutical and physician customers. The increasing scale and breadth of a high quality, clinically relevant oncology data set derived from the company’s analytically validated testing platform continues to enhance clinical practice and enable improved outcomes for patients.

Total operating expenses for the third quarter of 2015 were approximately $35.6 million compared with $21.9 million for the third quarter of 2014. Net loss was approximately $20.6 million in the third quarter of 2015, or a $0.60 loss per share. At September 30, 2015, the company held approximately $250 million in cash and cash equivalents.

Recent Enterprise Highlights

At the end of October, Roche Pharmaceuticals (Israel) Ltd. commenced commercial activities in support of the company’s molecular information products in oncology. Roche Israel will act as the exclusive distributor of Foundation Medicine’s products and services.

United Healthcare published a medical policy for coverage of highly validated genomic profiling in patients with non-small cell lung cancer.

In September, Foundation Medicine launched the Precision Medicine Exchange Consortium (PMEC) to advance the integration of molecular information in clinical oncology and accelerate the adoption of precision care. PMEC brings together thought leaders from academic medical centers, regional hospital systems and community oncology networks to exchange molecular information and outcomes data.

In September, Foundation Medicine expanded its molecular decision support offerings with GeneKit, a genomic solutions portal for pathologists. GeneKit easily integrates into the pathologist’s workflow and expedites and improves the interpretation, analysis and reporting of genomic data for clinical use.

In September, Foundation Medicine successfully completed the migration of its physician customers to the newest version of Interactive Cancer Explorer, FoundationICE, which also includes the PatientMatch application that was launched commercially in May 2015.

2015 Outlook

The company anticipates 2015 revenue will be in the range of $85 to $95 million.
The company expects to report between 32,000 and 33,000 clinical tests in 2015.
The company expects operating expenses in the range of $128 to $138 million, plus an additional $14.4 million one-time expense during the second quarter related to advisor fees in connection with the closing of the Roche strategic collaboration.
The company expects to launch a circulating tumor DNA (ctDNA) test for its biopharmaceutical partners by year-end, and a commercial ctDNA assay for clinical testing in 2016.

On November 3, 2015 Fate Therapeutics, Inc. (NASDAQ: FATE), a biopharmaceutical company dedicated to the development of programmed cellular immunotherapeutics for the treatment of cancer and immune disorders, reported business highlights and financial results for the third quarter ended September 30, 2015 (Filing, 8-K, Fate Therapeutics, NOV 3, 2015, View Source [SID:1234507925]).

"We have firmly established a leadership position in a unique and broadly applicable strategy for cancer immunotherapy — the production of T cells and NK cells from pluripotent cells, bringing an off-the-shelf approach to the field of cell-based immunotherapies," said Scott Wolchko, Chief Operating and Financial Officer of Fate Therapeutics. "Additionally, our clinical experience with PROHEMA, preclinical studies with PROTMUNE and research collaborations with Juno Therapeutics and the University of Minnesota all provide compelling support that the administration of programmed immune cells to patients fighting cancer will serve as a cornerstone treatment paradigm."

Recent Highlights & Upcoming Milestones

· Off-the-Shelf Cancer Immunotherapy Strategy to be Presented at ASH (Free ASH Whitepaper) 2015 Annual Meeting. The Company’s patent-protected pluripotent cell platform combines genetic engineering of pluripotent cells with rapid and efficient generation of immune cells, enabling production of off-the-shelf engineered T- and NK-cell-based therapeutics without requiring patient-sourced cells. Fate plans to present its novel strategy for developing off-the-shelf cancer immunotherapies using its pluripotent cell platform during two poster sessions at the American Society of Hematology (ASH) (Free ASH Whitepaper) 2015 Annual Meeting.

· NK-Cell Cancer Immunotherapeutic Undergoing Preclinical Development. In July 2015, Fate entered into a collaboration with the University of Minnesota to enable clinical development of a novel population of "adaptive" NK cells, which exhibit prolonged persistence and enhanced anti-tumor activity mediated through CD16 signaling in preclinical studies. The Company’s development strategy seeks to use "adaptive" NK cells in combination with solid tumor-targeting antibodies to induce potent killing of cancer cells.

· PROTMUNE IND Filing Planned. The Company expects to initiate a first-in-human clinical trial in 2016 to investigate the potential of PROTMUNE to prevent the life-threatening complications of acute graft-versus-host disease (GvHD) and severe infections in patients undergoing mobilized peripheral blood (mPB) transplantation. During an ASH (Free ASH Whitepaper) 2015 Annual Meeting poster session, Fate plans to present scientific findings showing that a single administration of programmed peripheral blood cells resulted in a statistically-significant reduction in GvHD score and improvement in survival as compared to vehicle-treated peripheral blood cells in preclinical models.

· PUMA Study Reaches 70% of Target Enrollment. Fate is currently preparing a second interim data-cut from its ongoing Phase 2 PUMA study of PROHEMA in adult patients undergoing double umbilical cord blood transplantation for the treatment of hematologic malignancies. The Company expects to report additional data on neutrophil engraftment and severe infection-related adverse events from the PUMA study during the 2015 ASH (Free ASH Whitepaper) Annual Meeting.

· Leadership Transition. On October 12, 2015, the Company announced that Scott Wolchko, a Fate founder and the Company’s Chief Operating & Financial Officer, will succeed Christian Weyer, M.D., M.A.S., as President and Chief Executive Officer, effective December 1. The Company also announced that Stewart Abbot, Ph.D. has been named Chief Development Officer after joining Fate earlier this year from Celgene Cellular Therapeutics, where he was instrumental in developing the company’s hematopoietic cell-based immuno-oncology programs and partnerships. Fate also announced the promotions of Daniel Shoemaker, Ph.D., who joined the Company in 2009, to Chief Scientific Officer, and Cindy Tahl, J.D., who joined the Company in 2009, to General Counsel.

Financial Results

· Cash Position: Cash and cash equivalents as of September 30, 2015 were $72.9 million, compared to $49.1 million as of December 31, 2014. The increase is primarily driven by net proceeds from the Company’s public offering of common stock in May 2015 and cash generated from entering into a research collaboration and license agreement with Juno Therapeutics in May 2015, offset by cash used to fund operating activities.

· Total Revenue: Revenue was $1.0 million for the third quarter of 2015, which was derived from the Company’s collaboration with Juno.

· Total Operating Expenses: Total operating expenses were $7.4 million for the third quarter of 2015, compared to $6.0 million for the third quarter of 2014. Operating expenses for the third quarter of 2015 include $0.6 million of stock compensation expense, compared to $0.5 million for the third quarter of 2014.

· R&D Expenses: Research and development expenses were $5.0 million for the third quarter of 2015, compared to $4.1 million for the third quarter of 2014. The increase in R&D expenses is primarily related to an increase in third-party professional consultant and service provider expenses to support the clinical development of PROHEMA, and an increase in personnel expense, including stock-based compensation expense, resulting from additional headcount to support the conduct of research activities.

· G&A Expenses: General and administrative expenses were $2.4 million for the third quarter of 2015, compared to $1.9 million during the third quarter of 2014. The increase in G&A expenses is primarily related to an increase in personnel expense, including stock-based compensation expense.

· Common Shares Outstanding: Common shares outstanding as of September 30, 2015 were 28.7 million compared to 20.6 million as of December 31, 2014. Common shares outstanding increased primarily as a result of the 6.9 million shares of the Company’s common stock issued pursuant to the May 2015 financing, and the 1.0 million shares of the Company’s common stock issued and sold to Juno pursuant to the collaboration.

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On November 3, 2015 Endocyte, Inc. (NASDAQ:ECYT), a leader in developing targeted small molecule drug conjugates (SMDCs) and companion imaging agents for personalized therapy, reported financial results for the third quarter ending Sept. 30, 2015, and provided a clinical update (Press release, Endocyte, NOV 3, 2015, View Source [SID:1234507923]).

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"Our Phase 1 dose escalation trials of the folate receptor (FR)- and prostate-specific membrane antigen (PSMA)-targeted tubulysin SMDCs, EC1456 and EC1169, continue to progress well. Both SMDCs are being dose escalated on two different schedules," said Ron Ellis, Endocyte’s president and chief executive officer. "Once we have determined the maximum tolerated dose and optimal schedule for each SMDC, we look forward to moving into expansion cohorts where we will evaluate these SMDCs specifically in receptor-positive patients among different tumor types, both as single agents and in combination with standard of care drugs."

Earlier in the third quarter, Endocyte announced the final results from the Phase 2b TARGET trial evaluating its SMDC vintafolide in combination with docetaxel in patients with FR positive recurrent non-small cell lung cancer (NSCLC) at the World Conference on Lung Cancer in Denver, Colorado. Vintafolide plus docetaxel improved overall survival (OS) by 2.7 months in NSCLC regardless of histology (Median OS 11.5 vs. 8.8 months, OS HR=0.86, 95% CI [0.58, 1.26]). In the predefined subset analysis of patients with adenocarcinoma, which expresses higher levels of FR, vintafolide plus docetaxel improved OS by 5.9 months (12.5 vs. 6.6 months, HR=0.72, 95% CI [0.44, 1.16]). This data is in line with earlier findings from the study of improved progression free survival and higher overall response rates. Final safety results were also consistent with those previously reported.

Third Quarter 2015 Financial Results

Endocyte reported a net loss of $10.0 million, or $0.24 per basic and diluted share, for the third quarter of 2015, compared to a net loss of $5.7 million, or $0.14 per basic share and diluted share, for the same period in 2014. The third quarter of 2014 included the recognition of $3.9 million of revenue related to the former collaboration with Merck.

Research and development expenses were $6.6 million for the third quarter of 2015, compared to $5.7 million for the same period in 2014. The increase in research and development expense was primarily attributable to an increase in expenses for the EC1456 and EC1169 dose escalation trials, the drug manufacturing expense of EC1456, and an increase in compensation expense, including noncash stock compensation, partially offset by the decrease in manufacturing expenses of etarfolatide, our folate-targeted companion molecular imaging agent to vintafolide and EC1456.

General and administrative expenses were $3.8 million for the third quarter of 2015, compared to $4.0 million for the same period in 2014. The decrease in expenses was primarily attributable to a reduction in legal and patent fees, slightly offset by an increase in compensation expense, including noncash stock compensation.

Cash, cash equivalents and investments were $180.3 million at September 30, 2015, compared to $211.1 million at September 30, 2014, and $206.8 million at December 31, 2014.

Financial Expectations

The Company updated its 2015 financial expectations and now anticipates that its 2015 year-end cash balance will be approximately $170 million.