On May 05, 2016 Progenics Pharmaceuticals, Inc. (Nasdaq:PGNX) reported financial and business results for the first quarter 2016 (Press release, Progenics Pharmaceuticals, MAY 5, 2016, View Source [SID:1234512037]).

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Key Business Highlights

PSMA-Targeted Prostate Cancer Pipeline

On May 2nd, the Company Announced It Had Granted Exclusive World-Wide Rights to Bayer to Develop and Commercialize Products Using Progenics’ PSMA Antibody Technology In Combination with Alpha-Emitting Radionuclides. The transaction combines Bayer’s expertise in alpha emitter radiopharmaceuticals with Progenics’ validated PSMA antibody technology to develop a new therapeutic approach for prostate cancer. Under the terms of the agreement, Progenics will receive an upfront payment of $4 million and could receive up to an additional $49 million in potential clinical and regulatory development milestones. The Company is also entitled to single digit royalties on net sales, and potential net sales milestone payments up to an aggregate total of $130 million.

Advancing Pivotal Phase 3 Study of PSMA-Targeted SPEC/CT Imaging Agent 1404 in the U.S. and Canada. The study will enroll approximately 450 patients with newly-diagnosed or low-grade prostate cancer who are candidates for active surveillance who have decided to undergo a radical prostatectomy. Progenics is planning an interim analysis during the second half of 2016 to assess futility and evaluate the need for a sample size re-estimation.

Johns Hopkins University Study Evaluating the Utility of PyL in Men with Elevated PSA Following Radical Prostatectomy to be Presented at the 2016 American Urological Association Annual Meeting, which is being held May 6-10 in San Diego. PSMA-targeted 18F-DCFPyL PET/CT (PyL) appears to be a sensitive imaging modality for detecting prostate cancer recurrence. Progenics plans to meet with the FDA in the second quarter to discuss a phase 2 study design.

Company Remains On-Track to Initiate a Phase 1 Trial of 1095 in the Second Half of 2016. The Phase 1 Study of 1095, a PSMA-Targeted Therapeutic for Metastatic Prostate Cancer, will be conducted at Memorial Sloan Kettering Cancer Center.

AZEDRA, Ultra-orphan radiotherapeutic candidate

AZEDRA Topline Results Expected Between December 2016 and March 2017. In late 2016 or early 2017, Progenics expects to report topline results from its ongoing pivotal Phase 2b study of AZEDRA. If positive, the Company expects to submit an NDA to the FDA during the first half of 2017.

RELISTOR, treatment for opioid-induced constipation (partnered with Valeant Pharmaceuticals International, Inc.)

RELISTOR Net Sales for the First Quarter 2016 Total $16.6 Million. The first quarter 2016 sales, as reported to us by our partner Valeant, translated to $2.2 million in royalty revenue, net of prior year adjustments.

PDUFA Date for Oral RELISTOR Extended to July 19, 2016. The FDA extended the action date to allow for a full review of Valeant’s responses to recent information requests from the FDA. If approved, Progenics would be entitled to a $50 million milestone payment and subsequent royalties and sales milestones from Valeant.

"The Progenics’ portfolio features multiple value-creating opportunities, and we are continuing to drive development of high-priority internal programs while leveraging the potential of our technology through strategic transactions, such as the recent Bayer license agreement," said Mark Baker, Chief Executive Officer of Progenics. "AZEDRA represents a near-term commercial candidate in an ultra-orphan indication, while our portfolio of imaging agents and therapeutics has the potential to transform how prostate cancer is detected, managed and treated. We look forward to progressing toward key milestones over the next several quarters."

First Quarter 2016 Financial Results

Net loss attributable to Progenics for the quarter was $12.7 million or $0.18 per basic and diluted share, compared to a net loss of $10.3 million or $0.15 per basic and diluted share in the 2015 period. Progenics ended the quarter with cash and cash equivalents of $65.7 million, a decrease of $8.4 million in the quarter.

First quarter revenue totaled $2.5 million, up from $0.2 million in the 2015 period, reflecting RELISTOR royalty income of $2.2 million (net of prior year adjustments) compared to $0.1 million in the prior year period, based on net sales reported by Valeant. Net sales in the first quarter of the prior year were impacted by a wholesaler inventory reduction initiative implemented in the fourth quarter of 2014 by Salix Pharmaceuticals, Inc., which was subsequently acquired by Valeant.

First quarter 2016 research and development expenses increased by $2.7 million compared to the prior year period, primarily attributable to higher clinical trial and contract manufacturing expenses for AZEDRA and 1404 and higher compensation expenses, partially offset by clinical trial expenses for PSMA ADC which were incurred in the prior year but not the current period. First quarter 2016 general and administrative expenses increased by $2.1 million compared to the prior year period, primarily attributable to incremental depreciation, which is expected to continue through August 1, 2016, as a result of a reduction in the remaining useful lives of the Company’s leasehold improvements at its Tarrytown, NY location, and higher compensation, consulting, and professional fees. The Company also recorded a non-cash charge of $0.2 million in the first quarter of 2016 related to an increase in the fair value estimate of the contingent consideration liability.

Corporate Update

Progenics also announced today that Dr. Paul Maddon, the founder of the Company, having served on the Company’s Board of Directors for three decades, will serve out his current term as director and retire from the Board as of the Company’s 2016 Annual Meeting of Stockholders on June 8. Mr. Peter Crowley, Chairman of Progenics’ Board of Directors, said, "Paul obviously has played a critical role in founding the Company and contributed greatly as a scientist, as an executive, and as a board member. We celebrate his 30 years of work and achievements, and we wish him well in the further important work he has committed himself to in the future."

"I am proud of Progenics’ scientific achievements and of the new medicines developed and being developed by Progenics to bring benefits to patients around the world. I express my profound thanks to all of my colleagues at Progenics who have been instrumental to the Company’s progress," commented Dr. Maddon.

Progenics announced that Mr. Bradley Campbell, President and Chief Operating Officer of Amicus Therapeutics, Inc., has been nominated for election to the Board of Directors of the Company at the upcoming annual meeting of stockholders. "We are pleased to recommend to the stockholders the election of Bradley Campbell to the Board," Mr. Crowley continued. "Brad brings to Progenics a deep knowledge of the ultra-orphan disease industry. As we look forward to the commercialization of AZEDRA and other products in the Company’s diverse pipeline, I know that Brad’s experience and insights will contribute greatly to the Company’s progress." Please see our 2016 proxy statement for additional information.