On August 4, 2016 TESARO, Inc. (NASDAQ:TSRO), an oncology-focused biopharmaceutical company, reported operating results for second-quarter 2016 and provided an update on the Company’s marketed product and development programs (Press release, TESARO, AUG 4, 2016, View Source [SID:1234514313]).
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"The second quarter of 2016 was an exciting time for TESARO, marked by the availability of positive clinical results from our NOVA trial of niraparib. These results are the first and only Phase 3 data for a PARP inhibitor in a population of patients with platinum-sensitive, recurrent ovarian cancer," said Lonnie Moulder, CEO of TESARO. "Looking ahead, we intend to leverage these landmark data to enhance our ongoing ovarian cancer trials and expand the overall development strategy for niraparib. We are globalizing our mission of delivering transformative cancer therapies to patients, and are now expanding our commercial footprint in Europe to support planned launches of oral rolapitant and niraparib next year. Finally, our immuno-oncology portfolio continues to rapidly advance, and our antibody candidates targeting TIM-3 and PD-1 are now in Phase 1 studies."
Recent Business Highlights
The U.S. launch of VARUBI continues, and unit volume increased by 30% for the second quarter compared to the first quarter. For the month of June, VARUBI achieved a 27% market share in the oral NK-1 market in the U.S.
The New Drug Application (NDA) for an intravenous (IV) formulation of rolapitant was accepted for review by the Food and Drug Administration (FDA), and a U.S. launch is planned for the first half of 2017.
The Marketing Authorisation Application (MAA) for oral rolapitant is under review by the European Medicines Agency (EMA). In order to support a launch of niraparib and oral rolapitant in 2017, TESARO is now expanding its commercial operations in key European countries.
In June, TESARO and the European Network for Gynaecological Oncological Trial groups (ENGOT) announced that the Phase 3 NOVA trial of niraparib successfully achieved its primary endpoint of progression-free survival (PFS). This trial demonstrated that niraparib significantly prolonged PFS compared to control for patients in both the germline BRCA mutation (gBRCAmut) cohort and the non-germline BRCA mutation (non-gBRCAmut) cohort. These data will support NDA and MAA submissions during the fourth quarter of 2016.
Ongoing trials of niraparib in combination with other agents include the TOPACIO trial (formerly KEYNOTE-162) with KEYTRUDA (pembrolizumab) in patients with ovarian cancer or with triple negative breast cancer, and the AVANOVA trial with bevacizumab in patients with ovarian cancer.
The Phase 1 dose escalation study of TSR-022, our anti-TIM-3 antibody candidate, has been initiated, and the Phase 1 study of TSR-042, our anti-PD-1 antibody candidate, continues to enroll patients.
TESARO completed a public offering of common stock in July 2016, resulting in approximately $409 million in net proceeds.
Second Quarter 2016 Financial Results
TESARO reported a net loss of $58.4 million, or ($1.28) per share, for the second quarter of 2016, compared to a net loss of $60.6 million, or ($1.51) per share, for the second quarter of 2015.
Revenue recognition for certain sales of VARUBI to specialty distributors continues to be deferred at this point in the commercial launch. Net product revenue for the second quarter of 2016 totaled $1.4 million and included sales of VARUBI from specialty pharmacy customers to patients that were made during the second quarter, as well as sales from specialty distributors to providers that occurred in the first quarter of 2016 and the fourth quarter of 2015. The specialty pharmacy sales made during the second quarter represented a small portion of total product shipments. License revenue for the second quarter of 2016 totaled $35.1 million and included an up-front payment of $35 million from Janssen related to initiation of the global niraparib prostate cancer collaboration.
Research and development expenses increased to $50.1 million for the second quarter of 2016, compared to $38.9 million for the second quarter of 2015, driven primarily by higher costs related to the ongoing registration trials of niraparib, manufacturing costs associated with IV rolapitant and niraparib, and the advancement of our immuno-oncology portfolio, in addition to increased headcount.
Selling, general and administrative expenses increased to $36.2 million for the second quarter of 2016, compared to $16.8 million for the second quarter of 2015, primarily due to increased commercial headcount, including the establishment of a U.S. field sales organization in the fall of 2015, commercial activities in support of the launch of VARUBI, and higher professional service fees.
Acquired in-process research and development expenses totaled $4.0 million for the second quarter of 2016 and included a milestone payment related to our immuno-oncology portfolio, compared to $1.0 million for the second quarter of 2015, which also related to a development milestone achieved within our immuno-oncology programs. Operating expenses, as described above, include total non-cash, stock-based compensation expense of $11.7 million for the second quarter of 2016, compared to $5.5 million for the second quarter of 2015.
As of June 30, 2016, TESARO had approximately $320 million in cash and cash equivalents. This cash and cash equivalents total excludes the $409 million in net proceeds resulting from a follow-on offering of 5.3 million shares of common stock that was completed in July 2016.
For the quarter ended June 30, 2016, TESARO had approximately 45.8 million shares outstanding on a weighted average basis. As of July 7, following completion of the follow-on offering on that date, TESARO had approximately 51.4 million outstanding shares of common stock.
In anticipation of four product launches in 2017, TESARO will invest in pre-launch inventory manufacturing, development of supply chain capabilities and capacity, and expansion of European and targeted U.S. commercial operations, in addition to making milestone payments for regulatory submissions. As a result of these investments, the Company expects its cash and cash equivalents balance to decline by approximately $100 million on average, per quarter, during the third and fourth quarters of 2016.
Corporate Objectives
The following is a summary of TESARO’s key objectives:
VARUBI / Rolapitant:
Achieve #1 market share position within the oral NK-1 receptor antagonist market by year-end 2016 in the U.S.;
Launch IV rolapitant into the U.S. market in 1H 2017, pending FDA approval;
Establish a European commercial organization; and
Launch oral rolapitant in Europe in 1H 2017, pending EMA approval.
Niraparib:
Present NOVA data at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) annual congress in Copenhagen in October;
Submit the niraparib NDA and MAA in Q4 2016;
Launch niraparib in the U.S. in 1H 2017 and in Europe in 2H 2017, pending regulatory approval;
Submit sNDA and MAA based upon QUADRA data in mid-2017;
Report Phase 3 BRAVO data in 2H 2017;
Finalize a potential lung cancer registration strategy and initiate development program in 1H 2017; and
Determine the potential registration strategy for niraparib plus an anti-PD-1 antibody in ovarian cancer and triple-negative breast cancer in mid-2017.
Immuno-Oncology Portfolio:
Identify a dose and schedule for TSR-042 by the end of 2016;
Select at least one bispecific antibody clinical candidate by the end of 2016;
Identify the first clinical candidate within the MD Anderson collaboration in 1H 2017;
Initiate a Phase 1 study of TSR-033 (anti-LAG-3 antibody) in 1H 2017;
Finalize the TSR-042 registration strategy and initiate a registration program in 1H 2017; and
Initiate a Phase 1 clinical trial of TSR-022 in combination with an anti-PD-1 antibody in mid-2017.