On November 6, 2019 Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) reported its financial results for the third quarter and year-to-date 2019 and recent business highlights (Press release, Ionis Pharmaceuticals, NOV 6, 2019, View Source [SID1234550473]).

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"Our commitment to innovation and to advancing our antisense technology has enabled us to produce a broad pipeline of potentially transformational medicines for patients with rare and common diseases. Our commercial medicines, SPINRAZA, TEGSEDI and WAYLIVRA, are important examples of the life-changing potential of our pipeline. In early October, we licensed AKCEA-ANGPTL3-LRx to Pfizer, which plans to develop it for the millions of people with certain cardiovascular and metabolic diseases. The favorable up-front and back-end economics we achieved with this transaction, coupled with the recent commitments by Novartis, Bayer and GSK to advance our medicines for broad patient populations, reflect the substantial and increasing value of our technology," said Stanley T. Crooke, M.D., Ph.D., chairman of the board and chief executive officer of Ionis. "Our significantly improved financial guidance is a result of the substantial economics we can command for our medicines and technology. As we continue to advance our pipeline and technology, we aim to deliver even greater value to patients and shareholders. In keeping with that goal, our board of directors has authorized a share repurchase program."

Revised 2019 Financial Guidance
The Company’s revised full year 2019 financial guidance consists of the following components (on a non-GAAP basis):

"Our strong financial results put us on track to achieve $1 billion in revenue and more than $300 million in net income this year. Our strong financial position is driven by growth in our commercial revenues primarily from SPINRAZA’s continued blockbuster performance and substantial R&D revenues from our numerous partnerships, including our recent Pfizer collaboration. Based on these strong results, we are substantially increasing our 2019 revenue, operating income and net income guidance. We plan to deliver these full year results while continuing to invest aggressively in commercializing TEGSEDI and WAYLIVRA and advancing our pipeline and technology. Our ability to achieve these successes while maintaining a strong balance sheet and delivering value to patients and shareholders continues to set us apart from our peers," said Elizabeth L. Hougen, chief financial officer of Ionis.

Year-to-Date 2019 Financial Results and Highlights

Revenues for the first nine months ended September 30, 2019 increased by more than 50 percent, driven by SPINRAZA’s continued blockbuster performance and increasing R&D revenue

Commercial revenue from SPINRAZA (nusinersen) royalties increased by more than 25 percent to $212 million compared to 2018.

Product sales from TEGSEDI (inotersen) and WAYLIVRA (volanesorsen) were $29 million.

R&D revenue increased by more than 65 percent to $377 million compared to 2018.

On track to achieve the fourth consecutive year of operating income and third consecutive year of net income, both on a non-GAAP basis

Operating income and net income significantly improved to $105 million and $110 million, respectively, compared to 2018, on a GAAP basis.

Non-GAAP operating income increased by more than 8-fold compared to 2018.

Non-GAAP net income increased by more than 4-fold compared to 2018.

Maintained substantial cash position of $2.2 billion for the third quarter

Ionis’ board of directors approved an initial share repurchase program of up to $125 million. The company may consider additional share repurchases in the future as part of the company’s overall capital allocation strategy.

All non-GAAP amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the reconciliation of non-GAAP and GAAP measures, which is provided later in this release.

"With Phase 3 programs for AKCEA-APO(a)-LRx and AKCEA-TTR-LRx expected to begin soon, we are on track to achieve our goal of advancing four late-stage medicines into Phase 3 development this year. These programs, together with our medicines for Huntington’s disease and SOD1-ALS, represent significant commercial opportunities. We had multiple new medicines enter development, including our medicine targeting LRRK2 for the treatment of people with Parkinson’s disease. We also added multiple wholly owned programs to our already broad pipeline," said Brett P. Monia, chief operating officer at Ionis. "We are looking forward to numerous upcoming data events through the middle of next year, including Phase 2 data for AKCEA-ANGPTL3-LRx and AKCEA-APOCIII-LRx. We are also excited to report data from our aerosol-delivered medicine for cystic fibrosis, which has the potential to broaden the reach of our technology to treat diseases of the lung."

Recent Business Highlights

SPINRAZA – global foundation-of-care for the treatment of patients of all ages with spinal muscular atrophy (SMA)

Worldwide sales of SPINRAZA in the first nine months of 2019 increased by nearly 25 percent to over $1.5 billion compared to last year.

Patients on SPINRAZA treatment increased by approximately 11 percent compared to last quarter to approximately 9,300 patients across global commercial, clinical and expanded access settings.

Biogen plans to initiate the Phase 2/3 DEVOTE study evaluating the safety and potential to achieve increased efficacy with a higher dose of SPINRAZA in SMA patients of all ages, including adults.

Biogen presented new long-term follow up data from NURTURE and SHINE, adding to the body of evidence underscoring SPINRAZA’s durable efficacy and established safety profile across a broad range of SMA patients.

NURTURE: Data from pre-symptomatic infants treated for up to nearly four years demonstrating consistent safety and unprecedented motor milestone achievement compared to natural history were published online in Neuromuscular Disorders.

SHINE: Data demonstrating continuing improvement or stabilization in one or more measures of motor function in patients with later-onset SMA treated with SPINRAZA for up to nearly six years were presented at the annual Congress of the European Pediatric Neurology Society.

TEGSEDI – launched in multiple markets for the treatment of polyneuropathy of hereditary transthyretin amyloidosis (hATTR) in adult patients

Approved in Brazil and preparing to launch through PTC Therapeutics

First commercial patients treated in the United Kingdom following acceptance by the National Institute for Health and Care Excellence (NICE) and the Scottish Medicines Consortium (SMC)

Successfully completed pricing negotiations in Germany

Launched in Sweden and Austria following successful completion of reimbursement negotiations

Preparing to launch in additional EU countries

WAYLIVRA – launched in the EU for the treatment of adults with genetically confirmed familial chylomicronemia syndrome (FCS) at high risk for pancreatitis

First commercial patients treated in Germany, and a reimbursed early access program (ATU) launched in France

Preparing to launch in additional EU countries

Published results from Phase 3 APPROACH study in patients with FCS in The New England Journal of Medicine (NEJM)

Reported top-line results from the BROADEN study of WAYLIVRA in patients with familial partial lipodystrophy (FPL), which met the primary endpoint and a key secondary endpoint

Biogen Collaboration – Developing robust pipeline of medicines for the treatment of neurological diseases

Dosed the first patient in a Phase 1/2 study targeting LRRK2 for the treatment of people with Parkinson’s disease

Advanced multiple programs, with eight programs now in development

Ionis and Akcea generated $250 million when Pfizer licensed AKCEA-ANGPTL3-LRx to treat patients with certain cardiovascular and metabolic diseases.

The companies are eligible to receive up to $1.3 billion in milestone payments plus tiered double-digit royalties on worldwide net sales.

Ionis’ 50 percent portion of the $250 million license fee is expected to be settled in Akcea common stock, demonstrating Ionis’ confidence in the future of Akcea.

Ionis earned a $25 million license fee from GSK to develop and commercialize Ionis’ program for the treatment of people with chronic hepatitis B virus infection.

Ionis generated $10 million from Bayer to advance IONIS-FXI-LRx for the treatment of people with clotting disorders.

Akcea and Ionis presented data from the Phase 1/2 study of AKCEA-TTR-LRx in healthy volunteers demonstrating >90 percent target reduction and a positive safety profile at the European ATTR Amyloidosis meeting and at the Heart Failure Society of America.

Roche expanded enrollment in the GENERATION HD1 Phase 3 study of IONIS-HTTRx (RG6042) in patients with Huntington’s disease (HD).

Ionis initiated a Phase 2 study of IONIS-FB-LRx in patients with IgA nephropathy, the second disease indication under its collaboration with Roche to develop the medicine for complement-mediated diseases.

Key Upcoming Events

Ionis and GSK plan to report data from the HBV clinical program at the AASLD Liver Meeting in November 2019.

Ionis and Akcea plan to initiate the Phase 3 program for AKCEA-TTR-LRx in the fourth quarter of 2019

Novartis plans to begin enrolling patients in the Phase 3 HORIZON cardiovascular outcomes study of AKCEA-APO(a)-LRx.

Akcea and Ionis plan to report top line results from Phase 2 studies of AKCEA-ANGPTL3-LRx and AKCEA-APOCIII-LRx in early 2020.

Ionis plans to report data from healthy volunteers evaluated in a Phase 1 study of IONIS-ENaC-2.5Rx, an aerosol-delivered medicine in development for the treatment of people with cystic fibrosis.

Roche plans to present data from the open-label extension portion of the Phase 1/2 study of IONIS-HTTRx (RG6042) and natural history study in patients with Huntington’s disease.

Revenue

Ionis’ revenue increased by more than 50 percent for the first nine months of 2019 compared to the same period in 2018 and was comprised of the following (amounts in millions):

In the fourth quarter of 2019, Ionis expects to recognize substantially all of the $250 million upfront payment it generated for Akcea’s license of AKCEA-ANGPTL3-LRx to Pfizer and $10 million from Bayer for advancing IONIS-FXI-LRx.

4
Operating Expenses

Operating expenses increased for the nine months ended September 30, 2019, compared to the same period in 2018 principally due to Ionis’ investment in the global launch of TEGSEDI and the launch of WAYLIVRA in the EU.

Income Tax Expense

Ionis’ income tax expense in the nine months of this year was primarily due to Ionis’ expectation that it will generate U.S. federal and state taxable income in 2019.

Net Loss Attributable to Noncontrolling Interest in Akcea

At September 30, 2019, Ionis owned approximately 75 percent of Akcea. The shares of Akcea third parties own represent an interest in Akcea’s equity that Ionis does not control. However, because Ionis continues to maintain overall control of Akcea through its voting interest, Ionis reflects the assets, liabilities and results of operations of Akcea in Ionis’ consolidated financial statements. Ionis reflects the noncontrolling interest attributable to other owners of Akcea’s common stock in a separate line called "Net loss attributable to noncontrolling interest in Akcea" on Ionis’ statement of operations. Ionis’ net loss attributable to noncontrolling interest in Akcea for the three and nine months ended September 30, 2019 decreased compared to the same periods in 2018 primarily because Akcea had a smaller net loss for the three and nine months ended September 30, 2019 compared to the same periods in 2018 primarily as a result of the $150 million license fee Akcea earned from Novartis when Novartis licensed AKCEA-APO(a)-LRx in the first quarter of 2019. Upon closing of Pfizer’s license of AKCEA-ANGPTL3-LRx, Ionis expects to receive 6.9 million shares of Akcea common stock as payment for the sublicense fee Akcea owes Ionis.

Net Income (Loss) Attributable to Ionis Common Stockholders

The increase in Ionis’ net income attributable to Ionis’ common stockholders for the three and nine months ended September 30, 2019 compared to the same periods in 2018 was primarily due to an increase in revenue. On a GAAP basis, Ionis reported net income attributable to Ionis’ common stockholders for the three months and nine months ended September 30, 2019, compared to net losses for the same periods in 2018. On a non-GAAP basis, Ionis reported higher net income attributable to Ionis’ common stockholders for the three and nine months ended September 30, 2019, compared to the same periods in 2018.

Ionis’ basic and diluted earnings per share also improved during the three months and nine months ended September 30, 2019, compared to the same periods in 2018.

Balance Sheet

Ionis maintained its strong balance sheet, ending the third quarter of 2019 with cash, cash equivalents and short-term investments of $2.2 billion, compared to $2.1 billion at December 31, 2018. Ionis expects its cash position to increase in the fourth quarter of 2019 when it receives the payments the Company recently generated from Pfizer and Bayer.

Webcast

Today, at 11:30 a.m. Eastern Time, Ionis will conduct a live webcast to discuss this earnings release and related activities. Interested parties may access the webcast here. A webcast replay will be available for a limited time at the same address.

On November 6, 2019 ImmunoGen Inc., (Nasdaq: IMGN), a leader in the expanding field of antibody-drug conjugates (ADCs) for the treatment of cancer, reported that abstracts highlighting the Company’s investigational ADC therapy, IMGN632, have been accepted for presentation at the upcoming American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting to be held December 7-10 in Orlando, FL (Press release, ImmunoGen, NOV 6, 2019, View Source [SID1234550472]).

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IMGN632 is a CD123-targeting ADC in Phase I testing for hematological malignancies, including acute myeloid leukemia (AML), blastic plasmacytoid dendritic cell neoplasm (BPDCN), and acute lymphocytic leukemia (ALL). IMGN632 uses one of ImmunoGen’s novel indolino-benzodiazepine (IGN) payloads, which alkylate DNA without crosslinking. IGNs have been designed to have high potency against AML blasts, while demonstrating less toxicity to normal marrow progenitors than other DNA-targeting payloads.

Updated safety and efficacy findings from the dose escalation and expansion of the first-in-human trial of IMGN632 in patients with relapsed/refractory AML and BPDCN will be reported in an oral presentation. Preclinical data related to IMGN632 in combination with Vidaza (azacitidine) and Venclexta (venetoclax) and two "trial in progress" posters will also be presented in poster sessions.

"Building on initial data shared at ASH (Free ASH Whitepaper) last year, we continue to be encouraged by the anti-leukemia activity and tolerability of IMGN632 in AML and BPCDN," said Anna Berkenblit, MD, Senior Vice President and Chief Medical Officer of ImmunoGen. "These data support the continued development of IMGN632 as a monotherapy for BPDCN and MRD+ AML, and in combinations for AML. Despite recent advances, including the first drug approved for BPDCN and approvals of targeted therapies for molecularly-defined subsets of AML, the need remains for well-tolerated, effective, and convenient therapies in these diseases."

ORAL PRESENTATION DETAILS
Oral Session 613: Monday, December 9, 2019, 3:00pm EST
Title (Abstract #734): "Clinical Profile of IMGN632, a Novel CD123-Targeting Antibody-Drug Conjugate, in Patients with Relapsed/Refractory Acute Myeloid Leukemia or Blastic Plasmacytoid Dendritic Cell Neoplasm"

Initial key findings include:

Safety

IMGN632 was administered to 74 patients over dose levels ranging from 0.015 to 0.45 mg/kg intravenously on the every 3 week schedule and 0.015-0.06 mg/kg on the fractionated day 1, 4, and 8 schedule every 3 weeks.
IMGN632 displays a tolerable safety profile and activity at doses up to 0.3 mg/kg.
The most common treatment-related adverse event was infusion-related reactions (16%; four grade 3); none required treatment discontinuation.
Single dose-limiting toxicities were seen at the three highest dose levels tested: one prolonged neutropenia and two reversible cases of veno-occlusive disease; no patterns of hepatotoxicity or cytopenias occurred with doses below 0.18 mg/kg.
Although no maximum tolerated dose was determined on either schedule, based on the efficacy, safety, and pharmacokinetic data generated, the dose and schedule of 0.045 mg/kg given on day 1 every 3 weeks has been selected for Phase 2 development.
AML Efficacy

In the assessable AML population (n=66), 37 (55%) had a reduction in bone marrow blasts and 13 (20%) achieved an objective response across all dose levels and both schedules achieved an objective response, including three complete remissions (CR) and eight CRs with incomplete recovery (CRi) in heavily pretreated patients. The majority of responders (77%) had failed prior intensive therapies, including three with prior transplant, 62% had an adverse risk classification, and 23% were primary refractory.
A 32% response rate (6/19 patients; two CR, three CRi, and one morphologic leukemia free state) was seen in primary AML patients treated with dose and schedule selected for Phase 2 development.
BPDCN Efficacy

Three of seven evaluable BPDCN patients (43%) achieved a response after a single dose of IMGN632, one CR, one CRi, and one partial remission; all three patients had received prior SL-401 (tagraxofusp-erzs; Elzonris).
POSTER SESSION
Poster Session 616: Saturday, December 7, 2019, 5:30-7:30pm EST
Title (Abstract #1375): "IMGN632, a CD123-Targeting ADC Bearing a DNA-Alkylating IGN Payload, Combines Effectively with Azacitidine and Venetoclax In Vivo, Prolonging Survival in Preclinical Models of Human Acute Myeloid Leukemia (AML)"

TRIALS IN PROGRESS POSTER SESSIONS
Poster Session 613: Saturday, December 7, 2019, 5:30-7:30pm EST
Title (Abstract #1334): "A Phase I Study of IMGN632, a Novel CD123-Targeting Antibody-Drug Conjugate, in Patients with Relapsed/Refractory Acute Myeloid Leukemia, Blastic Plasmacytoid Dendritic Cell Neoplasm, and Other CD123-Positive Hematologic Malignancies"

Poster Session 613: Sunday, December 8, 2019, 6:00-8:00pm EST
Title (Abstract #2601): "A Phase 1b/2 Study of the CD123-Targeting Antibody-Drug Conjugate IMGN632 as Monotherapy or in Combination with Venetoclax and/or Azacitidine for Patients with CD123-Positive Acute Myeloid Leukemia"

Additional information can be found at www.hematology.org, including abstracts.

ABOUT ACUTE MYELOID LEUKEMIA (AML)
AML is a cancer of the bone marrow cells that produce white blood cells. It causes the marrow to increasingly generate abnormal, immature white blood cells (blasts) that do not mature into effective infection-fighting cells. The blasts quickly fill the bone marrow, impacting the production of normal platelets and red blood cells. The resulting deficiencies in normal blood cells leave the patient vulnerable to infections, bleeding problems, and anemia. It is estimated that, in the U.S. alone, 21,380 patients will be diagnosed with AML this year and 10,590 patients will die from the disease.

ABOUT BLASTIC PLASMACYTOID DENDRITIC CELL NEOPLASM (BPDCN)
BPDCN is a rare form of blood cancer that has features of both leukemia and lymphoma, with characteristic skin lesions, lymph node involvement, and frequent spread to the bone marrow. This aggressive cancer requires intense treatment often followed by stem cell transplant. Despite the recent approval of a CD123-targeting therapy, the unmet need remains high in the relapsed/refractory setting.

ABOUT CD123
CD123, the interleukin-3 alpha chain, is expressed on multiple myeloid and lymphoid cancers including AML, BPDCN, ALL, chronic myeloid leukemia, and myeloproliferative neoplasms. With limited expression on normal hematopoietic cells, rapid internalization, and expression on AML leukemia stem cells, CD123 is a validated therapeutic target, with the recent approval of a CD123-targeting therapy for BPDCN.

On November 6, 2019 Idera Pharmaceuticals, Inc. ("Idera") (NASDAQ: IDRA), a clinical-stage biopharmaceutical company focused on the development, and ultimately the commercialization, of therapeutic drug candidates for both oncology and rare disease indications, reported its operational and financial results for the third quarter ended September 30, 2019 (Press release, Idera Pharmaceuticals, NOV 6, 2019, View Source [SID1234550471]).

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"The third quarter of this year marked another consecutive period of focused execution for our company as we continue advancing tilsotolimod for patients and their families," stated Vincent Milano, Idera’s Chief Executive Officer. "During this quarter, we implemented adjustments for ILLUMINATE-301 and continue to make meaningful progress with patient enrollment. Additionally, we also had strong execution within the broader tilsotolimod program, highlighted by the initiation of our first tumor expansion efforts in ILLUMINATE-206, the lengthening of our exclusivity period and the strategic clinical collaboration with AbbVie."

Milano continued, "Overall, our team is executing on a high level and we are well positioned to continue to accelerate our activity through the end of this year and, importantly, into 2020."

ILLUMINATE (tilsotolimod) Clinical Development

ILLUMINATE 301 — Randomized phase 3 trial of tilsotolimod in combination with ipilimumab versus ipilimumab alone in patients with anti-PD-1 refractory metastatic melanoma:

· Approximately 90 sites active in 11 countries;

·Planned enrollment target of 454 patients;

· As of October 23, 2019, 342 patients enrolled representing 75% enrollment;

·Targeting completion of enrollment during first half of 2020; and

·Clinical trial collaboration and supply agreement in place with BMS for supply of ipilimumab for the trial.

ILLUMINATE 204 — Phase 1/2 trial of tilsotolimod in combination with ipilimumab or pembrolizumab in patients with PD-1 refractory metastatic melanoma:

· Completed enrollment with 52 patients (49 evaluable) at tilsotolimod 8 mg with ipilimumab in February 2019;

· Of the four unconfirmed responders of the 13 responders reported on Aug. 8, 2019:

· Two were confirmed per RECIST v1.1 criteria, one remains unconfirmed, and one experienced disease progression, leading to a total of 11 of 12 confirmed responses, as of Oct. 23, 2019;

·3 confirmed complete responses (CR);

· 71% (35) achieving disease control (best response of CR, PR or Stable Disease (SD)); and

·Durable responses (greater than six months) were observed in five of 10 confirmed responses per RECIST v1.1.

·Safety profile observed consistent with previously reported results; and

· Final results from the ILLUMINATE 204 trial are expected to be submitted for an abstract at a medical conference during the first half of 2020.

ILLUMINATE 206 — Phase 2, multi-center trial to test the safety and effectiveness of tilsotolimod in combination with ipilimumab and nivolumab in treating patients with anti-PD-1 Refractory Squamous Cell Carcinoma of the Head and Neck (SCCHN) and Relapsed/Refractory Immunotherapy-Naïve Microsatellite Stable Colorectal Cancer (MSS-CRC).

· Trial initiated on September 30, 2019, leading with the MSS-CRC cohort.

ILLUMINATE 101 — Phase 1b trial of tilsotolimod monotherapy in patients with refractory solid tumors:

·Completed enrollment in all dose cohorts of the trial;

·Data presented at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) 2019 Conference in Barcelona Spain;

·Of 45 evaluable patients, 15 (33.3%) had best response of stable disease (SD);

·One patient with uterine leiomyosarcoma has been on tilsotolimod treatment for more than a year with durable stable disease and is continuing under a treatment investigational new drug;

·One patient in the melanoma cohort achieved an unconfirmed partial response (uPR). This patient discontinued from the study prior to the confirmation of response.

AbbVie Collaboration — On September 4, 2019, we announced we had entered into an immuno-oncology clinical research collaboration with AbbVie, a global, research-based biopharmaceutical company. The purpose of the collaboration is to conduct a clinical study evaluating whether combinations of an OX40 agonist (ABBV-368), a TLR-9 agonist (tilsotolimod), chemotherapy (nab-paclitaxel) and/or an anti-programmed cell death 1 (PD-1) antagonist (ABBV-181) stimulate the immune system resulting in anti-tumor responses.

Intellectual Property — On November 5, 2019, the U.S. Patent and Trademark Office issued U.S. Patent No. 10,10,463,686 entitled "Immune Modulation With TLR9 Agonists For Cancer Treatment," which includes the Company’s investigational therapy tilsotolimod (IMO-2125). The patent includes 24 claims directed to methods of treating melanoma with intratumoral administration of tilsotolimod in combination with certain immune checkpoint inhibitor therapies including inhibitors of the CTLA-4 and PD-1/PD-L1 pathways. The patent is expected to expire in September 2037.

Financial Results

Third Quarter Results

Net loss applicable to common stockholders for the three months ended September 30, 2019 was $11.1 million, or $0.39 per basic and diluted share, compared to net loss applicable to common stockholders of $11.6 million, or $0.43 per basic and diluted share, for the same period in 2018. Research and development expenses for the three months ended September 30, 2019 totaled $8.4 million compared to $8.9 million for the same period in 2018. General and administrative expense for the three months ended September 30, 2019 totaled $3.0 million compared to $4.0 million for the same period in 2018. Merger-related costs, net for the three months ended September 30, 2018 amounted to a net credit of $3.8 million and was comprised of a $6.0 million fixed expense reimbursement received in connection with the termination of a merger agreement in July 2018, partially offset by $2.2 million of expenses incurred in connection with transactions contemplated by such merger agreement. No such costs were incurred for the same period in 2019. Restructuring costs for the three months ended September 30, 2019 were less than $0.1 million compared to $3.0 million for the same period in 2018 and related to our decision in July 2018 to wind-down our discovery operations.

As of September 30, 2019, our cash, cash equivalents and short-term investments totaled $41.6 million compared to $71.4 million as of December 31, 2018. We currently anticipate that, based on our current operating plan, our existing cash, cash equivalents and investments on hand as of September 30, 2019, will fund our operations into the third quarter of 2020.

On November 6, 2019 Horizon Therapeutics plc (Nasdaq: HZNP) reported its third-quarter 2019 financial results and raised the midpoint of its full-year 2019 adjusted EBITDA guidance (Press release, Horizon Pharma, NOV 6, 2019, View Source [SID1234550470]).

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"Our third-quarter performance underscores the strength of our commercial and R&D organizations," said Timothy Walbert, chairman, president and chief executive officer, Horizon. "We generated record quarterly net sales in our orphan and rheumatology segment – including a record quarter for net sales of KRYSTEXXA, our medicine for uncontrolled gout – and the U.S. FDA also granted Priority Review of our BLA for teprotumumab, our biologic candidate for the treatment of active thyroid eye disease. We made great progress on all fronts during the quarter, including our market education activities related to teprotumumab, and remain excited about the prospect of being able to address the significant unmet need for patients living with active thyroid eye disease."

Financial Highlights

Third-Quarter and Recent Company Highlights

Granted Priority Review of Teprotumumab BLA: In September, the Company announced the U.S. Food and Drug Administration (FDA) accepted the Biologics License Application (BLA) for its investigational medicine teprotumumab for the treatment of active TED and granted it Priority Review designation, with a March 8, 2020, Prescription Drug User Fee Act (PDUFA) date. If approved, teprotumumab would be the first and only approved treatment for active TED.

Presented Additional Teprotumumab Phase 3 Data: The Company recently presented additional data from the Phase 3 OPTIC confirmatory clinical trial showing that teprotumumab provided significant benefit on several devastating effects of active TED compared with placebo, including diplopia (double vision), quality of life (QoL) and clinical activity score (CAS). At Week 24, 68 percent of teprotumumab patients had a change from baseline of at least 1 grade in diplopia, compared to 29 percent of placebo patients (p=0.001). On the Graves’ Ophthalmopathy Quality of Life (GO-QoL) scale, a change of 6 points is considered clinically significant, and teprotumumab patients had a mean change of 13.79 compared to 4.43 for placebo patients (p<0.001). At Week 24, 59 percent of teprotumumab patients achieved a CAS value of 0 or 1 compared to 21 percent of placebo patients (p<0.001). These data were presented during the American Society of Ophthalmic Plastic and Reconstructive Surgery (ASOPRS) 50th Anniversary 2019 Fall Scientific Symposium in San Francisco, and build upon data presented earlier in the year that demonstrated the significant benefit of teprotumumab on proptosis.

Announced Teprotumumab Expanded Access Program (EAP): In August, the Company announced an EAP for teprotumumab while the FDA reviews the BLA. The EAP provides access to teprotumumab for patients with active TED who meet protocol criteria, who may have otherwise progressed to the inactive stage of the debilitating disease before the BLA review process is completed.

Initiated PROTECT Trial Evaluating KRYSTEXXA to Improve Management of Uncontrolled Gout for Adults with a Kidney Transplant: In October, the Company initiated its open-label PROTECT clinical trial evaluating the use of KRYSTEXXA in adults with uncontrolled gout who have undergone a kidney transplant. The objective of the trial is to demonstrate that KRYSTEXXA provides effective disease control without burdening the kidneys. The randomized multicenter open-label trial is expected to enroll 20 adults with uncontrolled gout who have received a kidney transplant.

Further Improved the Company’s Capital Structure: In July, the Company issued $600 million of 5.5 percent Senior Notes due 2027 and used the proceeds together with cash on hand to repay $625 million of its outstanding debt. These actions reduced interest expense and extended the maturity of the debt, furthering the Company’s strategy to improve its capital structure. The Company has reduced its gross debt by $575 million in the year-to-date period ended Sept. 30, 2019.

Intellectual Property Update: In October, the Federal Circuit Court of Appeals issued a decision in favor of the Company regarding an appeal of the 2017 decision by the United States District Court for the District of New Jersey upholding the validity of a PENNSAID 2% patent that expires in 2027.

Gender and Ethnicity Pay Equity Demonstrated; Received Best Medium Workplace Award: A recent study conducted by Aon, a leading compensation consulting firm, showed that Horizon demonstrates both gender and ethnicity pay equity, ranking in the top five of the roughly 100 companies Aon has studied in this regard, and in line with the value the Company places on diversity. In addition, the Company was selected to FORTUNE Magazine’s 2019 "Best Medium Workplaces" list for the fourth consecutive year, ranking eighth out of 100 other medium sized companies.

Appointed Sue Mahony to the Board of Directors: In August, the Company appointed Sue Mahony, Ph.D., MBA, to its board of directors. Dr. Mahony brings more than 30 years of diverse industry experience to the board, including an 18-year tenure at Eli Lilly and Company, where she served in a variety of global and domestic leadership roles of increasing responsibility, including helping oversee the development of an innovative pipeline. Before Lilly, Dr. Mahony spent five years at Bristol-Myers Squibb Company.

Named Andy Pasternak Executive Vice President, Chief Business Officer: In August, the Company named Andy Pasternak executive vice president, chief business officer, effective Nov. 1. Pasternak leads business development, mergers and acquisitions, corporate strategy, commercial development and portfolio management.

Research and Development Programs

Orphan Disease Candidate and Program:

Teprotumumab: Teprotumumab is a fully human monoclonal antibody insulin-like growth factor-1 receptor (IGF-1R) inhibitor candidate for the treatment of active TED. TED is a serious, progressive, vision-threatening autoimmune disease in which the muscles and fatty tissue behind the eye become inflamed and expand, which can lead to proptosis (eye bulging) and diplopia (double vision) and impact activities of daily living and quality of life. The development program for teprotumumab in TED includes positive results from the confirmatory Phase 3 OPTIC clinical trial, announced in February 2019, as well as positive Phase 2 results published in The New England Journal of Medicine in May 2017. The OPTIC study met its primary endpoint of a ³2 mm reduction in proptosis (p<0.001), the main cause of morbidity in TED, with 82.9 percent of patients treated with teprotumumab demonstrating a significant improvement in proptosis compared to 9.5 percent of placebo patients. In addition, all secondary endpoints were met (p£0.001), and the safety profile was consistent with the Phase 2 study.

Rheumatology Pipeline Candidates and Programs:

KRYSTEXXA MIRROR Immunomodulation Trial: The Company is evaluating the use of methotrexate to increase the response rate with KRYSTEXXA. This evaluation was initiated through the small open-label MIRROR pilot study, followed by the larger MIRROR registrational clinical trial. Methotrexate is the immunomodulator most used by rheumatologists, and has been shown to reduce anti-drug antibody formation to biologic therapies when used in conjunction with these therapies. The MIRROR registrational trial commenced in June.

On November 6, 2019 Harpoon Therapeutics, Inc. (Nasdaq: HARP), a clinical-stage immunotherapy company developing a novel class of T cell engagers, reported financial results for the third quarter and nine months ended September 30, 2019 and provided a corporate update (Press release, Harpoon Therapeutics, NOV 6, 2019, View Source [SID1234550469]).

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"During the third quarter we made significant strides in the advancement of our novel T cell engagers, as we continue to advance our two clinical stage programs," said Gerald McMahon, Ph.D., President and Chief Executive Officer of Harpoon Therapeutics. "We are also excited by the progress of our two preclinical TriTAC programs, highlighted by the encouraging HPN328 data we recently presented at a medical meeting which further exemplifies the platform. We expect to present clinical data from both our HPN424 and HPN536 programs next year."

Third Quarter 2019 Business Highlights and Other Recent Developments

In October, Harpoon presented data on HPN328 for the treatment of small cell lung cancer at the 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) in Boston. The presentation demonstrated that HPN328 has the potential to be an efficacious, safe, and convenient therapeutic for patients with DLL3-expressing malignancies. HPN328 was well-tolerated in cynomolgus monkeys at 1 and 10 mg/kg and pharmacokinetic data support the potential for once weekly dosing.

Patient enrollment and dose escalation continues in Phase 1 trial for HPN424 and Phase 1/2a trial for HPN536. Harpoon plans to present interim HPN424 results at a medical meeting in the first half of 2020 and plans to present proof of concept data for HPN536 in 2020.

Anticipated Milestones

HPN424 – present interim Phase 1 data in the first half of 2020 at a medical conference and initiate expansion cohort in 2020

HPN536 – present proof of concept data in 2020

HPN217 – submit IND by the end of 2019 and initiate Phase 1/2 trial in the first half of 2020

HPN328 – initiate Phase 1 trial in 2020

Third Quarter and Year-to-Date Financial Results

Harpoon Therapeutics ended the third quarter of 2019 with $121.2 million in cash, cash equivalents, and marketable securities compared to $89.5 million as of December 31, 2018. The increase was due to approximately $70.7 million in net proceeds from Harpoon’s initial public offering, completed in February 2019, partially offset by cash used in operations.

Net loss for the third quarter ended September 30, 2019 was $15.9 million compared to $6.8 million for the third quarter ended September 30, 2018. The net loss for the nine months ended September 30, 2019 was $41.3 million compared to $17.6 million in the first nine months of the prior year.

Revenue for the third quarter of 2019 was $1.4 million compared to $1.1 million for the third quarter of 2018. For the nine months ended September 30, 2019, revenue was $3.5 million compared to $3.7 million for the nine months ended September 30, 2018. For the three months ended September 30, 2019, the increase was due to an increase in the recognized portion of the deferred $17.0 million upfront payment received by the company in October 2017 under the collaboration agreement with AbbVie. For the nine months ended September 30, 2019, the decrease was due to an upfront payment of $0.5 million recognized in the first quarter of 2018 related to the license agreement with Werewolf Therapeutics, Inc., offset by a $0.3 million increase in the portion of the upfront payment under the collaboration agreement with AbbVie recognized for the quarter ended September 30, 2019. During both the three and nine month periods, revenue primarily consisted of the recognized portion of the deferred $17.0 million upfront payment under the collaboration agreement with AbbVie.

Research and development (R&D) expense for the third quarter of 2019 was $9.5 million compared to $5.9 million for the third quarter of 2018. For the nine months ended September 30, 2019, R&D expense was $28.9 million, compared to $17.7 million for the nine months ended September 30, 2018. The increase for both periods primarily arose from clinical development expenses and an increase in personnel-related expenses, which included conducting preclinical studies, the continuation of the clinical trials for HPN424 and HPN536, and manufacturing activities for four TriTAC product candidates in various stages of development.

General and administrative (G&A) expense for the third quarter of 2019 was $8.5 million compared to $1.9 million for the third quarter of 2018. G&A expense for the nine months ended September 30, 2019 was $18.1 million compared to $3.9 million for the nine months ended September 30, 2018. The increase for both periods was due to higher expenses primarily related to legal fees associated with ongoing Maverick litigation, consulting and accounting services, an increase in headcount, and other professional services to support our ongoing operations as a public company.