On November 9, 2016 Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) reported income from operations of $16.1 million and a loss from operations of $87.5 million for the three and nine months ended September 30, 2016, respectively (Press release, Ionis Pharmaceuticals, NOV 9, 2016, View Source;p=RssLanding&cat=news&id=2220881 [SID1234516565]). The Company also reported pro forma operating income of $33.7 million and a pro forma net operating loss (NOL) of $30.5 million, both excluding non-cash stock compensation, for the same periods. Ionis ended the third quarter with cash, cash equivalents and short term investments of $687.8 million. The Company is on track to meet its pro forma NOL and cash guidance for the year.

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"This week, we and Biogen announced positive data from an interim analysis of CHERISH, our Phase 3 study in children with later-onset (consistent with Type 2) spinal muscular atrophy (SMA). We are very encouraged with the positive SPINRAZATM data from both of our controlled Phase 3 clinical trials supporting potential benefit not only in infants, but also in children with SMA. We are pleased that our partners at Biogen are already making SPINRAZA available to patients with SMA who have no therapeutic alternatives through a broad Expanded Access Program. In about four weeks after Biogen filed for marketing approval for SPINRAZA, the FDA and the EMA each have accepted their respective application. Importantly, the FDA has granted Priority Review and the EMA has granted Accelerated Assessment, both of which can reduce the standard review time. We look forward to seeing SPINRAZA quickly and successfully advance through the regulatory review process so that it will be even more broadly available to SMA patients through commercial channels. On the basis of these positive data, we will stop the CHERISH study and afford all patients in the study the opportunity to receive SPINRAZA in the ongoing open-label study, SHINE. These data follow the positive results from ENDEAR, our Phase 3 study in infants with the most severe form of the disease, infantile-onset (consistent with Type 1) SMA, which formed the basis for the regulatory filings in the U.S. and E.U., and the filings in progress for other jurisdictions. This was followed by encouraging data from the Phase 2 NURTURE study in pre-symptomatic infants with SMA, which supports the potential beneficial effect of earlier treatment with SPINRAZA in infants with SMA. These data serve to confirm the positive data we have observed in our Phase 2 open-label studies in infants with Type 1 SMA and children with Type 2 or Type 3 SMA, in which we have patients continuing to benefit from SPINRAZA for nearly five years. We believe the totality of these results provide compelling evidence of the broad transformational potential of SPINRAZA for patients with SMA. These results further illustrate the potential of our antisense technology to target severe diseases that other therapeutic modalities are unable to adequately address," said B. Lynne Parshall, chief operating officer of Ionis Pharmaceuticals.

"In addition, last week we announced positive results from our Phase 2 study with IONIS-FXIRx in patients with end-stage renal disease on dialysis. Results from the study demonstrated robust, statistically significant reductions in Factor XI activity in treated patients. IONIS-FXIRx also displayed a good safety and tolerability profile. In patients treated with 200 mg or 300 mg of IONIS-FXIRx there were no clinically meaningful platelet declines and no increase in major or clinically relevant non-major bleeding. These results provide further support for the potential benefit IONIS-FXIRx could have for patients who need to prevent clotting but who have increased risk of bleeding," continued Ms. Parshall.

Financial Results

"We ended the third quarter of this year with net income primarily because of the $85 million in license fees we earned, including $75 million from Biogen for licensing SPINRAZA. Through the first nine months of 2016, we have earned more than $186 million in revenue from license fees and milestone and other payments from our partnered programs. We have the opportunity to add to our strong base of revenue from partnerships with commercial revenue from SPINRAZA," said Elizabeth L. Hougen, chief financial officer of Ionis Pharmaceuticals.

"Through the first nine months of 2016, we have continued to advance our Phase 3 programs and Akcea is preparing to commercialize volanesorsen while we have prudently managed our expenses. As a result, we finished the first nine months of 2016 with a GAAP loss from operations of $87.5 million, which included nearly $57 million in non-cash compensation expense related to equity awards, that when excluded, resulted in a pro forma net operating loss of $30.5 million. We also ended the first nine months of this year with more than $685 million in cash. We are on track to meet our guidance of a pro forma NOL in the low $60 million range and a year-end cash balance in excess of $600 million," concluded Ms. Hougen.

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

Revenue

Ionis’ revenue for the three and nine months ended September 30, 2016 was $110.9 million and $186.3 million, compared to $49.1 million and $232.1 million for the same periods in 2015. Ionis’ revenue in the first nine months of 2016 consisted of the following:

$96.9 million from Biogen for licensing and advancing the Phase 3 program for SPINRAZA and advancing IONIS-BIIB4Rx;
$15 million from Kastle Therapeutics for acquiring Kynamro;
$10 million from Janssen for licensing IONIS-JBI1-2.5Rx;
$1.5 million from GSK for advancing IONIS-HBV-LRx; and
$62.9 million primarily from the amortization of upfront fees and manufacturing services Ionis performed for its partners.
Ionis’ revenue in the first nine months of 2015 included $91.2 million in connection with the exclusive license agreement with Bayer, $89.8 million in milestone payments from partnered programs and $51.1 million, primarily from the amortization of upfront fees and manufacturing services Ionis performed for its partners.

Ionis’ revenue fluctuates based on the nature and timing of payments under agreements with its partners and consists primarily of revenue from the amortization of upfront fees, milestone payments and license fees.

Operating Expenses
Ionis’ operating expenses included costs to support the Company’s five ongoing Phase 3 studies and three open-label extension studies related to its Phase 3 programs for SPINRAZA, IONIS-TTRRx and volanesorsen. In addition, Akcea continued to build a global organization and prepare for the commercial launch of volanesorsen. As such, Ionis’ operating expenses on a GAAP basis for the three and nine months ended September 30, 2016 were $94.8 million and $273.7 million, respectively, and on a pro forma basis, were $77.2 million and $216.8 million, respectively. This is compared to GAAP operating expenses of $97.3 million and $245.0 million and pro forma operating expenses of $82.3 million and $203.0 million for the same periods in 2015. In addition, Ionis’ operating expenses for the first nine months of 2016 on a GAAP basis increased due to an increase in non-cash compensation expense that resulted from an increase in the exercise price of the stock options the Company has granted over the past several years.

Net Income (Loss)
Ionis reported net income of $7.4 million and a net loss of $112.4 million for the three and nine months ended September 30, 2016, respectively, compared to a net loss of $35.8 million and $16.8 million for the same periods in 2015. Basic and diluted net income per share for the three months ended September 30, 2016 was $0.06. Basic and diluted net loss per share for the nine months ended September 30, 2016 was $0.93. This is compared to a basic and diluted net loss of $0.30 and $0.14 for the three and nine months ended September 30, 2015, respectively.

Balance Sheet
As of September 30, 2016, Ionis had cash, cash equivalents and short-term investments of $687.8 million compared to $779.2 million at December 31, 2015. Ionis’ cash balance decreased in the first nine months of 2016 primarily due to spending to support the Company’s ongoing Phase 3 programs for SPINRAZA, IONIS-TTRRx and volanesorsen. Ionis’ working capital was $623.4 million at September 30, 2016 compared to $688.1 million at December 31, 2015. The decline in Ionis’ working capital was a result of the cash used in operations and a decline in the Company’s investment in Regulus Therapeutics resulting from a decline in Regulus’ share price.

On November 9, 2016 Intrexon Corporation (NYSE: XON), a leader in the engineering and industrialization of biology to improve the quality of life and health of the planet, reported its third quarter financial results for 2016 (Press release, Intrexon, NOV 9, 2016, View Source [SID1234516564]).

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Intrexon Corporation logo
Changes to non-GAAP financial measures:

Beginning this quarter, the Company has redefined its Adjusted EBITDA and Adjusted EBITDA per share measures, which will no longer include an adjustment for the impact of the change in deferred revenue related to upfront and milestone payments, to comply with new interpretations on non-GAAP financial measures recently issued by the SEC staff. The prior period non-GAAP financial measures have been revised to conform to the current presentation. Refer to the Appendix to this earnings release for a reconciliation of the revised and previously defined Adjusted EBITDA measures in the current and prior periods. Going forward, the Company will no longer present Adjusted EBITDA based on the previous definition. However, supplemental information about the impact of the change in deferred revenue related to upfront and milestone payments will continue to be provided in future periods. Adjusted EBITDA as previously defined can be calculated by adding the redefined Adjusted EBITDA measure and the impact of the change in deferred revenue related to upfront and milestone payments.

Business Highlights and Recent Developments:

Oxitec opened its new 5,000 m² large scale Friendly Aedes mosquito production facility in Piracicaba, Brazil. It has the capacity to produce 60 million Friendly Aedes per week which can help protect up to 3 million people by reducing local populations of the dangerous Aedes aegypti mosquito, the primary vector of Zika, chikungunya, dengue and other damaging viruses;
Oxitec and Piracicaba City Hall announced deployment of Friendly Aedes in ten additional downtown neighborhoods in September which along with São Judas comprise the entire area of the Friendly Aedes project expansion in Piracicaba to help protect an additional 60,000 residents;
The Cayman Islands Mosquito Research and Control Unit commenced the "FriendlyAedes aegypti Project", an operational roll-out of Oxitec’s Friendly technology in an hotspot area of West Bay;
A bipartisan coalition of 61 Florida House members issued a letter urging the U.S. Federal Government to take proactive steps including Emergency Use Authorization to allow Florida’s state and local governments to use Oxitec’s genetically engineered Friendly Aedes;
Okanagan Specialty Fruits (OSF) achieved the first commercial harvest of its non-browning Arctic Golden apple variety which will be sold as fresh sliced apples in test markets across North America in early 2017;
OSF’s non-browning Arctic Fuji apple variety was granted deregulated status by the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service and found to be as safe and nutritious as conventional apples, joining OSF’s Arctic Golden and Arctic Granny varieties;
AquaBounty Technologies, Inc., Intrexon’s majority-owned subsidiary, reported Canada’s Federal Court of Appeal upheld the AquAdvantage Salmon approval, and the company is advancing its business plan to prepare for expanded production and commercial launch, which includes identification of additional aquaculture facilities in the U.S.;
AquaBounty filed a Form 10 registration statement for listing its Common Shares on the NASDAQ exchange. Intrexon has agreed to an equity subscription and will convert all of the outstanding convertible debt it holds to help satisfy the initial listing requirements. Intrexon also plans to distribute a portion of its holding of AquaBounty common shares via a stock dividend to its shareholders while retaining a majority ownership stake;
Collaborator ZIOPHARM Oncology, Inc. (Nasdaq:ZIOP) announced the publication of data in the Journal of Clinical Investigation (JCI) from first-in-human trials highlighting benefits of using the non-viral Sleeping Beauty system to genetically modify T-cells to express chimeric antigen receptors (CAR) for use against leukemia and lymphomas;
ZIOPHARM presented data at the European Society for Medical Oncology 2016 Congress in Copenhagen, Denmark, demonstrating activation of anti-tumor immune response using Ad-RTS-hIL-12 in patients with advanced breast cancer;
Collaborator Fibrocell Science, Inc. (NASDAQ:FCSC) completed enrollment in the NC1+ cohort and enrolled first subject for the NC1- cohort in the Phase I/II clinical trial of FCX-007, Fibrocell’s orphan gene-therapy product candidate, for the treatment of Recessive Dystrophic Epidermolysis Bullosa;
Collaborator Oragenics, Inc. (NYSE MKT: OGEN) received supportive feedback from the U.S. Food and Drug Administration in response to request for a Type C meeting concerning Phase 2 study protocols for its oral mucositis therapeutic candidate, AG013;
Oragenics announced selection of a second generation lantibiotic, OG716, an orally-active homolog that has exhibited positive results in an animal model for treatment of Clostridium difficile, and plans to begin IND enabling studies;
New animal model data advancing the understanding of hypertrophic cardiomyopathy (HCM) utilizing Exemplar Genetics’ custom miniswine research model of HCM created for Myokardia, Inc. will be highlighted at the American Heart Association Scientific Sessions 2016 in New Orleans on November 15th;
Two publications in the JCI demonstrated the potential of Exemplar Genetics ExeGen CFTR miniswine research models to help define and develop effective gene therapies for cystic fibrosis;
Entered into Exclusive Channel Collaborations with Genten Therapeutics, Inc. and CRB Bio, Inc., two startups backed by the Harvest Intrexon Enterprise Fund. Genten Therapeutics will center efforts on ActoBiotics expression of gluten peptides to reestablish immune tolerance for patients with celiac disease. CRS Bio will focus on targeted delivery of antibodies for treatment of chronic rhinosinusitis leading to improved breathing and patients’ quality of life; and
Appointed Lieutenant General (Ret.) Thomas P. Bostick, Ph.D., P.E., who most recently served as the 53rd U.S. Army Chief of Engineers and the Commanding General of the U.S. Army Corps of Engineers, as Senior Vice President and Head of the Environment Sector. He will oversee the Company’s strategies and programs to deploy biologically based solutions for the protection and remediation of the environment.
Third Quarter Financial Highlights:

Total revenues of $49.0 million, a decrease of 8% from the third quarter of 2015;
Net loss of $29.0 million attributable to Intrexon, or $(0.24) per basic share, including non-cash charges of $25.5 million;
Adjusted EBITDA (as redefined) of $(3.7) million, or $(0.03) per basic share;
Adjusted EBITDA (as previously defined) of $(5.6) million, or $(0.05) per basic share;
The net decrease in deferred revenue related to upfront and milestone payments, which represents the cash and stock received from collaborators less the amount of revenue recognized during the period, was $1.8 million compared to $4.0 million in the third quarter of 2015;
Cash consideration received for reimbursement of research and development services covered 60% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries);
Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 80% of consolidated cash operating expenses; and
Cash, cash equivalents, and short-term and long-term investments totaled $280.7 million, the value of investment in preferred stock totaled $123.7 million, and the value of equity securities totaled $39.4 million at September 30, 2016.
Year-to-Date Financial Highlights:

Total revenues of $144.9 million, an increase of 10% over the nine months ended September 30, 2015;
Net loss of $142.5 million attributable to Intrexon, or $(1.21) per basic share, including non-cash charges of $120.1 million;
Adjusted EBITDA (as redefined) of $(20.8) million, or $(0.18) per basic share;
Adjusted EBITDA (as previously defined) of $107.0 million, or $0.91 per basic share;
The net increase in deferred revenue related to upfront and milestone payments was $127.8 million compared to $51.8 million in the nine months ended September 30, 2015;
Cash consideration received for reimbursement of research and development services covered 58% of cash operating expenses (exclusive of operating expenses of consolidated subsidiaries); and
Total consideration received for technology access fees, reimbursement of research and development services and products and services revenues covered 150% of consolidated cash operating expenses.
"While maintaining our capital efficiency, our team has made good progress across multiple dimensions," commented Randal J. Kirk, Chairman and Chief Executive Officer of Intrexon. "We have devoted considerable resources toward bringing to market the more mature portion of our portfolio, while advancing a large number of developmental projects, both partnered and internal, and growing our capabilities – through the addition of personnel, now numbering approximately 900, improving our leadership team and expanding our technologic capabilities."

Mr. Kirk concluded, "We anticipate a very strong finish for this excellent year of accomplishment. Our strategy, resources, team, plans, ongoing projects and the engagement we currently enjoy give us great confidence that we truly can and should lead the bioindustrial revolution, a development that is becoming more obvious and more needed by the day."

Third Quarter 2016 Financial Results Compared to Prior Year Period

Total revenues were $49.0 million for the quarter ended September 30, 2016 compared to $53.4 million for the quarter ended September 30, 2015, a decrease of $4.4 million, or 8%. Collaboration and licensing revenues decreased $4.1 million from the quarter ended September 30, 2015 due to the recognition in 2015 of previously deferred revenue related to collaboration agreements for which the Company satisfied all of its obligations or which were terminated during the quarter ended September 30, 2015. This decrease was offset by (i) the recognition of deferred revenue for upfront payments received from collaborations signed by the Company between October 1, 2015 and September 30, 2016 and the recognition of the payment received in June 2016 from ZIOPHARM to amend their collaborations; and (ii) increased research and development services for these collaborations and for the progression or the addition of new programs with previously existing collaborators. Product revenues were $9.3 million for the quarter ended September 30, 2016 compared to $9.4 million for the quarter ended September 30, 2015, a decrease of $0.1 million, or 2%. Gross margin on products improved in the current period primarily due to a decline in the average cost of cows. Service revenues were $8.7 million for the quarter ended September 30, 2016 compared to $8.9 million for the quarter ended September 30, 2015, a decrease of $0.2 million, or 3%. Gross margin on services decreased in the current period primarily due to an increase in service related costs in the current period driven by increased headcount to support future revenue growth.

Total operating expenses were $77.8 million for the quarter ended September 30, 2016 compared to $61.3 million for the quarter ended September 30, 2015, an increase of $16.5 million, or 27%. Research and development expenses increased $7.4 million, or 34%, due primarily to increases in (i) salaries, benefits and other personnel costs for research and development employees, (ii) lab supplies and consulting expenses, and (iii) depreciation and amortization. Salaries, benefits and other personnel costs increased $2.1 million due to (i) an increase in research and development headcount to support new and expanded collaborations and (ii) a full period of costs for research and development employees assumed in the Company’s acquisition of Oxitec in September 2015. Lab supplies and consulting expenses increased $3.9 million as a result of (i) the progression into the preclinical phase with certain of Intrexon’s collaborators; (ii) the increased level of research and development services provided to the Company’s collaborators; and (iii) a full period of costs incurred as a result of the Company’s September 2015 acquisition of Oxitec. Depreciation and amortization increased $0.9 million primarily as a result of (i) the inclusion of a full period of depreciation and amortization on property, equipment and intangible assets acquired in the Company’s 2015 acquisitions, (ii) amortization of developed technology acquired from EnviroFlight in February 2016, and (iii) amortization related to AquaBounty’s intangible assets upon regulatory approval in November 2015. Selling, general and administrative (SG&A) expenses increased $10.8 million, or 47%, over the third quarter of 2015. Legal and professional expenses increased $4.5 million due to (i) consulting expenses payable in shares of Intrexon’s common stock pursuant to the Company’s services agreement with Third Security, LLC, or Third Security, which the Company entered into in November 2015; (ii) expenses incurred to support domestic and international government affairs for regulatory and other approvals necessary to commercialize the Company’s products and services; (iii) increased legal fees to defend ongoing litigation; and (iv) incremental costs incurred to support the ongoing operations of the Company’s 2015 acquisitions. Salaries, benefits and other personnel costs for SG&A employees increased $5.3 million due to increased headcount, including the hiring of two new executive officers and additional business development professionals, to support the Company’s expanding operations, as well as its acquisition of Oxitec in September 2015.

Year-to-Date 2016 Financial Results Compared to Prior Year Period

Total revenues were $144.9 million for the nine months ended September 30, 2016 compared to $132.1 million for the nine months ended September 30, 2015, an increase of $12.8 million, or 10%. Collaboration and licensing revenues increased $15.5 million over the nine months ended September 30, 2015 primarily due to (i) the recognition of deferred revenue for upfront payments received from collaborations signed by the Company between October 1, 2015 and September 30, 2016, including the payment received in June 2016 from ZIOPHARM to amend their collaborations; and (ii) increased research and development services for these collaborations and for the progression of programs or the addition of new programs with previously existing collaborators. This increase is partially offset by the recognition in 2015 of previously deferred revenue related to collaboration agreements for which the Company satisfied all of its obligations of which were terminated during 2015. Product revenues were $28.7 million for the nine months ended September 30, 2016 compared to $32.6 million for the nine months ended September 30, 2015, a decrease of $3.9 million, or 12%. The decrease in product revenues primarily relates to a decrease in quantities sold of livestock previously used in production and live calves sold due to lower customer demand. These decreases were partially offset by an increase in the quantity of weaned calves sold due to higher customer demand. Gross margin on products decreased due to a decline in the average sales prices of livestock previously used in production and also of live calves, and is partially offset by an increase in gross margin on sales of pregnant cows due to a decline in the average cost of cows. Service revenues were $33.3 million for the nine months ended September 30, 2016 compared to $32.2 million for the nine months ended September 30, 2015, an increase of $1.1 million, or 4%. The increase relates to an increase in the number of in vitro fertilization cycles performed due to higher customer demand. Gross margin on services was consistent period over period.

Total operating expenses were $237.5 million for the nine months ended September 30, 2016 compared to $244.6 million for the nine months ended September 30, 2015, a decrease of $7.1 million, or 3%. Research and development expenses declined $38.0 million, or 31%, due primarily to the inclusion in 2015 of a $59.6 million payment in common stock for an exclusive license to certain technologies owned by the University of Texas MD Anderson Cancer Center. This decrease was partially offset by increases in (i) salaries, benefits and other personnel costs for research and development employees, (ii) lab supplies and consulting expenses, and (iii) depreciation and amortization. Salaries, benefits and other personnel costs increased $6.7 million due to (i) an increase in research and development headcount to support new and expanded collaborations and (ii) costs for research and development employees assumed in the Company’s acquisition of Oxitec in September 2015. Lab supplies and consulting expenses increased $10.1 million as a result of (i) the progression into the preclinical phase with certain of Intrexon’s collaborators; (ii) the increased level of research and development services provided to the Company’s collaborators; and (iii) costs incurred as a result of the Company’s September 2015 acquisition of Oxitec. Depreciation and amortization increased $4.7 million primarily as a result of (i) the inclusion of a full period of depreciation and amortization on property, equipment and intangible assets acquired in the Company’s 2015 acquisitions and (ii) amortization related to AquaBounty’s intangible assets upon regulatory approval in November 2015. SG&A expenses increased $32.6 million, or 44%, over the nine months ended September 30, 2015. Salaries, benefits and other personnel costs for SG&A employees increased $9.2 million due to (i) increased headcount, including the hiring of two new executive officers and additional business development professionals, to support the Company’s expanding operations; (ii) noncash compensation paid to the Company’s CEO pursuant to the compensation agreement entered into in November 2015; (iii) a full period of stock compensation expense for officers hired in 2015; and (iv) salaries, benefits and other personnel costs for employees assumed in the Company’s acquisition of Oxitec in September 2015. These increases were partially offset by a decrease in stock compensation and other compensation expenses resulting primarily from the departure of certain officers of the Company in 2016. Legal and professional expenses increased $13.9 million primarily due to (i) consulting expenses payable in shares of Intrexon’s common stock pursuant to the Company’s services agreement with Third Security which the Company entered into in November 2015; (ii) expenses incurred to support domestic and international government affairs for regulatory and other approvals necessary to commercialize the Company’s products and services; (iii) increased legal fees for trial and post-trial activities in Trans Ova Genetics, L.C.’s, or Trans Ova, litigation with XY, LLC, and to defend ongoing litigation; and (iv) incremental costs incurred to support the ongoing operations of the Company’s 2015 acquisitions and other business development activities. In 2016, the Company also recorded $4.2 million in litigation expenses arising from the entrance of a court order in Trans Ova’s trial with XY, LLC.

Total other income (expense), net, was $(39.1) million for the nine months ended September 30, 2016 compared to $65.1 million for the nine months ended September 30, 2015, a decrease of $104.2 million, or 160%. This decrease was attributable to the $81.4 million realized gain recognized upon the special stock dividend of all of Intrexon’s shares of ZIOPHARM to the Company’s shareholders in June 2015 and the decrease in fair value of the Company’s equity securities portfolio.

On November 9, 2016 Infinity Pharmaceuticals, Inc. (NASDAQ: INFI) reported its third quarter 2016 financial results and its transition of the company to focus on IPI-549, a potentially first-in-class immuno-oncology product candidate that selectively inhibits PI3K-gamma. IPI-549 is the first and only PI3K-gamma inhibitor in clinical development (Press release, Infinity Pharmaceuticals, NOV 9, 2016, View Source;p=RssLanding&cat=news&id=2221099 [SID1234516562]). In October, Infinity licensed duvelisib, an investigational, oral, dual inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma, to Verastem, Inc.

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"During the third quarter, we undertook a number of important initiatives to focus Infinity on the advancement of IPI-549, a promising novel approach to targeting the immune-suppressive tumor microenvironment," stated Adelene Perkins, president and chief executive officer. "Refocusing Infinity required a significant organizational restructuring, an amendment to our license agreement from Takeda for both duvelisib and IPI-549, and the license of duvelisib to Verastem. We are pleased that Verastem will now be advancing duvelisib for patients and our corporate imperative going forward is to maximize the value of IPI-549."

"We are encouraged by the initial IPI-549 clinical monotherapy data recently presented, and we expect to begin evaluating IPI-549 in combination with Opdivo, a PD-1 immune checkpoint inhibitor, this fall. We anticipate reporting updated Phase 1 data from the Phase 1 study in the first half of 2017. Data in two recent Nature publications provide a strong rationale for advancing IPI-549 and show that IPI-549 in combination with immune checkpoint inhibitors may overcome resistance to checkpoint blockade," Ms. Perkins continued.

Recent developments include the following:

IPI-549

Entered clinical collaboration with BMS to evaluate IPI-549 in combination with Opdivo: Earlier today, Infinity and Bristol-Myers Squibb announced a clinical trial collaboration to evaluate IPI-549 in combination with Bristol-Myers Squibb’s Opdivo (nivolumab) in patients with advanced solid tumors. The dose-escalation portion exploring IPI-549 as a monotherapy in Infinity’s Phase 1 study is continuing, and the first dose-escalation cohort studying IPI-549 in combination with Opdivo is expected to begin this fall.
The ongoing Phase 1 clinical study of IPI-549 is designed to explore the activity, safety, tolerability, pharmacokinetics and pharmacodynamics of IPI-549 as a monotherapy and in combination with Opdivo in approximately 175 patients with advanced solid tumors. Once the dose-escalation phase evaluating IPI-549 plus Opdivo is completed, an expansion phase is planned to evaluate the combination in patients with selected solid tumors, including non-small cell lung cancer (NSCLC), melanoma and squamous cell carcinoma of the head and neck (SCCHN).

Initial clinical data presented at AACR (Free AACR Whitepaper) cancer immuno-therapy conference: In September, Infinity announced initial clinical data for IPI-549. Preliminary Phase 1 results from nine patients with advanced solid tumors showed that the safety, pharmacokinetics and pharmacodynamics of IPI-549 monotherapy treatment appeared favorable. These data were presented in a poster session at the Second CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference (CIMT) (Free CIMT Whitepaper): Translating Science into Survival.1
Preclinical data on IPI-549 published in two Nature articles: Earlier today, Infinity announced the publication of new findings by research collaborators, including Drs. Jedd Wolchok and Taha Merghoub at Memorial Sloan Kettering Cancer Center, and Infinity scientists in the November 9 online issue of Nature. The paper, entitled "Overcoming resistance to checkpoint blockade by targeting PI3K-gamma in tumor-infiltrating myeloid cells," 2 describes research showing that the presence of suppressive myeloid cells play a critical role in tumor resistance to checkpoint inhibitors and that IPI-549 is able to help recover sensitivity to checkpoint inhibition in this setting by remodeling the immune-suppressive tumor microenvironment primarily through its effects on myeloid cells.
In September, Infinity announced the first Nature publication on PI3K-gamma by research collaborators, including Dr. Judith Varner, at University of California San Diego School of Medicine and Moores Cancer Center and Infinity scientists in the September 19 online issue of Nature. The paper, entitled "PI3K-gamma is a molecular switch that controls immune suppression," 3 describes preclinical data showing that macrophage PI3K-gamma signaling promotes immune suppression by inhibiting activation of anti-tumor T cells. Additionally, blocking PI3K-gamma activated the immune response and significantly suppressed growth of implanted tumors in animal models. Inhibiting PI3K-gamma also boosted sensitivity of some tumors to existing anti-cancer drugs and showed synergy with existing immuno-therapies.

These two articles will publish back-to-back in the November 17, 2016, print edition of Nature. Taken together, these findings reinforce the therapeutic potential of IPI-549 to alter the immune-suppressive microenvironment, promoting an anti-tumor immune response that may lead to tumor growth inhibition and providing a strong rationale for the ongoing Phase 1 study.

Corporate

Amended license of duvelisib from Takeda: In September, Infinity amended its agreement with Takeda for the license of duvelisib and IPI-549. Under the amended agreement with Takeda, upon entry into the Verastem Agreement, Infinity’s milestone obligations for its first licensed compound (duvelisib) were terminated and deemed satisfied. In exchange, Infinity and Takeda will share equally in potential future royalties on net sales of duvelisib that Infinity is eligible to receive from Verastem. Additionally by satisfying milestone obligations on duvelisib under the Takeda license, IPI-549 now qualifies for the lower milestone obligations of the second licensed compound. As a result, Infinity’s potential regulatory milestone payments to Takeda related to IPI-549 have been reduced by up to $120 million, from up to $170 million to up to $50 million. Development milestones of $5.0 million, as well as potential commercial milestones, remain unchanged by the amendment.
Duvelisib licensed to Verastem: In November, Infinity and Verastem announced that the companies entered into a license agreement for exclusive worldwide rights to develop and commercialize duvelisib. Under the agreement, Infinity is eligible to receive up to a total of $28 million across two milestone payments: $6.0 million upon positive data from the Phase 3 DUO study in patients with relapsed/refractory chronic lymphocytic leukemia, and $22 million upon the first regulatory approval of duvelisib inside or outside of the U.S. Verastem is also obligated to pay Infinity tiered mid-to-high single-digit royalties on net sales of duvelisib and will be responsible for the royalties on net sales of duvelisib owed by Infinity to Mundipharma International Corporation Limited and Purdue Pharmaceutical Products L.P.
Reduced facility lease commitments: In November, Infinity and Alexandria Real Estate Equities (ARE) entered into an agreement to terminate Infinity’s lease for its facilities at 780 Memorial Drive in Cambridge, MA, effective as of October 31, 2016. In connection with the termination, Infinity paid ARE a termination payment of approximately $1.8 million. Infinity elected to terminate its lease to consolidate its facilities as part of its strategic restructuring efforts.
Third Quarter 2016 Financial Results

At September, 2016, Infinity had total cash, cash equivalents and available-for-sale securities of $112.3 million, compared to $146.4 million at June 30, 2016.
Infinity did not record any revenue during the third quarter of 2016. Revenue for the third quarter of 2015 was $90.7 million for research and development (R&D) services associated with the previous collaboration with AbbVie for duvelisib in oncology.
R&D expense for the third quarter of 2016 was $12.8 million compared to $37.7 million for the same period in 2015. The decrease in R&D expense was primarily related to a decrease in activities for duvelisib and a decrease in compensation as a result of the restructuring announced earlier this year.
General and administrative (G&A) expense was $7.1 million for the third quarter of 2016, compared to $9.8 million for the same period in 2015. The decrease in G&A expense was primarily related a decrease in commercial-readiness activities for duvelisib.
Net loss for the third quarter of 2016 was $19.5 million, or a basic and diluted earnings per common share of $0.39, compared to a net income of $42.5 million, or a basic earnings per common share of $0.85 and diluted earnings per common share of $0.84, for the same period in 2015.
Cash and Investments Outlook
Following the license agreement with Verastem and further restructuring activities, Infinity today provided an update on its anticipated year-end 2016 cash and investments balance and expected cash runway.

Infinity expects to end 2016 with a year-end cash and investments balance ranging from $70 million to $80 million, compared to prior expectations of $45 million to $55 million.
Infinity expects that its existing cash, cash equivalents and available-for-sale securities at September 30, 2016, will be adequate to satisfy the company’s capital needs into the first quarter of 2018 based on its current operational plans, compared to previous guidance of cash runway into the third quarter of 2017.
The company’s updated financial guidance is in the absence of additional funding or business development activities and has expenses related to duvelisib beyond November 1, 2016, capped at $4.5 million. Additionally, Infinity’s updated cash runway expectation excludes any potential milestone payments from Verastem related to duvelisib.

On November 9, 2016 Immune Design (Nasdaq:IMDZ), a clinical-stage immunotherapy company focused on oncology, reported financial results and a corporate update for the third quarter ended September 30, 2016 (Press release, Immune Design, NOV 9, 2016, View Source [SID1234516561]).

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"During the third quarter, we continued enrollment of our clinical programs, recruited senior leadership with late-stage oncology development expertise, and advanced the range of future potential products from our differentiated ZVex platform," said Carlos Paya, M.D., Ph.D., President and Chief Executive Officer of Immune Design. "Backed by both new and existing investors who participated in our recent financing, we are focused on delivering meaningful results in both of our approaches in 2017."

Recent Highlights

Product Development: Continued progress on all programs from ZVex and GLAASTM platforms

Antigen Specific: CMB305 Program

CMB305, the novel prime-boost NY-ESO-1 cancer vaccine using the ZVex platform, is being evaluated in soft tissue sarcoma (STS) patients both as a potential monotherapy and in combination with an anti-PD-L1 antibody.
CMB305 monotherapy:
Follow-up continues on the two fully enrolled monotherapy Phase 1 trials (CMB305; n=24 patients, and its vector-only component, LV305; n=23 patients). As reported by investigators, at the end of the third quarter:
The safety profile remains favorable, with a consistent rate of NY-ESO-1-triggered T cell responses that appear stronger with CMB305.
The median overall survival (OS) has still not been reached in either study, with CMB305 and LV305 having a median follow-up of approximately 221 days and 640 days, respectively. Chemotherapeutic agents approved to treat metastatic STS have shown a median OS of 12.4-13.5 months.
CMB305 in combination with TECENTRIQ (atezolizumab): Enrollment continues in this randomized 80 patient, Phase 2 study comparing CMB305 plus atezolizumab vs. atezolizumab alone, pursuant to a collaboration with Genentech.
Immune Design intends to submit data for presentation from the CMB305 studies beginning at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) annual meeting in 2017 (ASCO 2017).
Antigen Agnostic: G100 Program

G100, the formulated TLR4 synthetic agonist from the GLAAS platform, GLA-SE, injected intratumorally, is being evaluated in an ongoing randomized Phase 2 trial in patients with follicular non-Hodgkin lymphoma (fNHL). Patients receive either G100 and low-dose radiation (RadRx) or G100 and low-dose RadRx with the systemic administration of the anti-PD-1 antibody, Keytruda (pembrolizumab), pursuant to a collaboration with Merck. In contrast with CMB305’s focus on OS, the initial endpoint focus for this study is on response rates in both treated and distal, non-treated lesions.
Immune Design intends to submit data from this Phase 2 study for presentation beginning at ASCO (Free ASCO Whitepaper) 2017.
Expansion of the versatility of the ZVex platform and further support for ongoing product development: upcoming presentations at SITC (Free SITC Whitepaper) and ASH (Free ASH Whitepaper)

To avoid potential antigenic competition and to induce an immune response to multiple antigens that are co-delivered to dendritic cells, Immune Design has further developed the ZVex platform to enable the delivery of multiple RNA genes to dendritic cells to induce a simultaneous T cell response against each, separate antigen. The company intends to include this new feature in its planned next generation of product candidates, ZVex2.0, which will be designed to deliver both multiple conserved antigens and/or neo-antigens, in the latter case, distinct from ZVexNeo and the collaboration with Gritstone Oncology.
A preclinical prototype from this evolution of the ZVex platform will be presented at the upcoming SITC (Free SITC Whitepaper) annual meeting, as well as a presentation illustrating preclinical data from a new prime-boost option coupling a ZVex vector with an alternate boost modality. Also, at the ASH (Free ASH Whitepaper) 2016 annual meeting, Immune Design will present additional preclinical data describing the synergy of G100 with local radiation to eradicate lymphomas, further supporting its ongoing G100 Phase 2 study in fNHL.
Expansion of the Senior Leadership Team

Sergey Yurasov, M.D., Ph.D. Joins Executive Team: Addition of Late-Stage Oncology Development Expertise

Dr. Sergey Yurasov joined the Immune Design team as Senior Vice President of Clinical Development and Chief Medical Officer in October 2016. Dr. Yurasov brings more than 20 years’ experience in immunology and late-stage oncology drug development to the company.
Acquisition of Intellectual Property Rights and Settlement of Litigation and Patent Challenge

On October 21, 2016, Immune Design announced the acquisition of intellectual property rights from, and settlement of outstanding legal proceedings with, Theravectys SA (TVS). Immune Design obtained a license to certain present and future intellectual property of TVS related to the company’s ZVex platform, and resolved all outstanding proceedings in Delaware and Belgium and a patent opposition proceeding brought by TVS against one of the company’s patents related to ZVex. Please refer to Immune Design’s Current Report on Form 8-K filed on October 21, 2016 for a more complete description of the terms.
Completion of Follow-On Financing

In September 2016, Immune Design completed an underwritten follow-on public offering, which resulted in the sale of 5,226,369 shares of common stock, at a price of $6.25 per share. Net proceeds from the offering were $30.3 million after deducting underwriting discounts, commissions and estimated expenses. Both new and existing investors participated in the offering.
Financial Results

Third Quarter

Immune Design ended the third quarter of 2016 with $112.5 million in cash, cash equivalents and short-term investments, compared to $112.9 million as of December 31, 2015. Net cash used in operations for the nine months ended September 30, 2016 was $31.4 million and $10.9 million for the three months ended September 30, 2016.
Net loss and net loss per share for the third quarter of 2016 were $12.4 million and $0.60, respectively, compared to $7.4 million and $0.37, respectively, for the third quarter of 2015.
Revenue for the third quarter of 2016 was $8.2 million and was attributable primarily to $7.0 million in license revenue associated with Immune Design’s collaboration with Sanofi, $0.4 million in product sales to collaboration partner Sanofi, and $0.8 million in collaboration revenue associated with the Sanofi G103 (HSV2 therapeutic vaccine) collaboration. Revenue for the third quarter of 2015 was $4.7 million and was attributable primarily to $3.5 million in license revenue associated with Immune Design’s collaboration with Sanofi, $0.8 million in product sales to collaboration partners MedImmune and Sanofi, and $0.3 million in collaboration revenue associated with the Sanofi G103 (HSV2 therapeutic vaccine) collaboration.
Research and development expenses for the third quarter of 2016 were $11.2 million, compared to $8.3 million for the third quarter of 2015. The $2.9 million increase was primarily attributable to continuing advancement of Immune Design’s ongoing research and development programs, including ongoing Phase 1 and Phase 2 clinical trials.
General and administrative expenses for the third quarter of 2016 were $9.6 million, compared to $3.5 million for the third quarter of 2015. The $6.1 million increase was primarily attributable to the settlement and license agreements with TVS involving the acquisition of certain present and future intellectual property rights from TVS and resolving the litigation initiated by TVS in July 2014 against the Company, as well as related claims and counterclaims.
Year-to-Date

Net loss and net loss per share for the nine months ended September 30, 2016 were $39.1 million and $1.92, respectively, compared to $27.3 million and $1.45, respectively, for the same period in 2015.
Revenue for the nine months ended September 30, 2016 was $11.2 million and was attributable primarily to $7.0 million in license revenue associated with Immune Design’s collaboration with Sanofi, $1.2 million in product sales to collaboration partner Sanofi, and $3.0 million in collaboration revenue associated with the Sanofi G103 (HSV2 therapeutic vaccine) collaboration. Revenue for the nine months ended September 30, 2015 was $8.4 million and was attributable primarily to $3.5 million in license revenue associated with Immune Design’s collaboration with Sanofi, $0.9 million in product sales to collaboration partners MedImmune and Sanofi, and $3.9 million in collaboration revenue associated with the Sanofi G103 (HSV2 therapeutic vaccine) collaboration.
Research and development expenses for the nine months ended September 30, 2016 were $33.1 million compared to $24.2 million for the same period in 2015. The $8.9 million increase was primarily attributable to continuing advancement of Immune Design’s ongoing research and development programs, including ongoing Phase 1 and Phase 2 clinical trials and an increase in personnel-related expenses to support the company’s advancing research and clinical pipeline.

General and administrative expenses for the nine months ended September 30, 2016 were $17.4 million, compared to $11.1 million for the same period in 2015. The $6.3 million increase was primarily attributable to the settlement and license agreements with TVS entered into in October 2016 involving the acquisition of certain present and future intellectual property rights from TVS and resolving the litigation initiated by TVS in July 2014 against the Company, as well as related claims and counterclaims.

On November 9, 2016 Inovio Pharmaceuticals, Inc. (NASDAQ:INO) reported financial results for the quarter ended September 30, 2016 (Press release, Inovio, NOV 9, 2016, View Source [SID1234516542]). The following financial results provide a year-over-year comparison of the third quarter in 2016 and 2015. Total revenue was $12.5 million compared to $24.2 million. Total operating expenses were $32.7 million compared to $20.5 million. The net loss attributable to common stockholders was $20.8 million, or $0.28 per share for the third quarter 2016, compared to net income of $5.6 million, or $0.08 per share in the third quarter of 2015.

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Revenue

The decrease in revenue for the comparable periods was primarily due to $15.0 million of revenue recognized in the third quarter 2015 from the up-front payment received from our partnership agreement with MedImmune. Accounting recognition of the remainder of the $27.5 million upfront payment was deferred and will be triggered by future events. The net income achieved during the third quarter 2015 was attributable to the increase in revenue and may not repeat in future quarters.

Operating Expenses

Research and development expenses were $27.0 million compared to $16.1 million for the third quarter ending 2016 and 2015 respectively. The increase was primarily related to increased investment in our product development programs – notably the DARPA funded Ebola program and clinical trial preparations for the initiation of the VGX-3100 phase III study. General and administrative expenses were $5.8 million compared to $4.4 million.

Capital Resources

As of September 30, 2016, cash and cash equivalents and short-term investments were $119.7 million compared with $163.0 million as of December 31, 2015. There were 74.0 million shares outstanding and 81.8 million fully diluted.

During the three months ended September 30, 2016, the Company sold 448,848 shares of common stock under its ATM common stock sales agreement for net proceeds of $4.2 million, with an average price of $9.45 per share.

Inovio’s balance sheet and statement of operations are provided below. Form 10-Q providing the complete 2016 Third quarter financial report can be found at: View Source

Corporate Update

Clinical Development

The U.S. Food and Drug Administration (FDA) requested additional information regarding Inovio’s submission for its proposed phase III clinical program for VGX-3100, placing the program on clinical hold. The study had not yet been initiated and has not enrolled or dosed subjects. In its initial communication the FDA requested additional data to support Inovio’s shelf-life claim for the single-use disposable array of the newly designed and manufactured CELLECTRA 5PSP immunotherapy delivery device. Inovio expects to receive a formal letter in November, which may request other information, and estimates the start of the phase III clinical program will be delayed until the first half of 2017, pending resolution of the FDA’s request. This clinical hold does not affect other Inovio clinical programs.
Initiated a phase I Zika DNA vaccine trial in Puerto Rico to test for safety, immune responses and initial evidence of efficacy. The placebo-controlled double-blind trial will assess differences in Zika infection rates in 160 healthy participants given either placebo or vaccine as part of an exploratory endpoint. This is the second human Zika vaccine trial initiated by Inovio. All 40 subjects for the first clinical study have been fully enrolled and dosed.
Expanded phase I Ebola vaccine trial by fully enrolling an additional 125 subjects in a second stage after generating positive initial safety and immune response data in the first set of 75 healthy volunteers. The study will assess immune response characteristics generated with fewer intradermal administrations, lower doses, and with and without its DNA-based IL-12 immune activator.
Corporate Development

Inovio incorporated a 100%-owned subsidiary, GENEOS Therapeutics, Inc., to develop and commercialize neo-antigen based personalized cancer therapies. While Inovio pursues the unique potential of its SynCon immunotherapy design to break tolerance and create cancer products targeting universal tumor specific antigens, GENEOS will exclusively focus on leveraging Inovio’s potent DNA immunotherapy technology platform to advance the emerging field of patient-specific neo-antigen therapies. Inovio’s clinically validated DNA based platform is well suited for advancing individualized therapies due to its rapid product design and manufacturing benefits, ability to combine multiple neo-antigens into formulations, and generation of potent killer T cell responses that are needed to drive clinical efficacy. GENEOS plans to independently raise capital and build a team to execute this complementary business model. Inovio will continue its focus on advancing its universal antigen-specific cancer immunotherapy portfolio, including INO-3112 (with Medimmune), INO-5150, INO-1400, and INO-5401, as well as its pre-cancer (VGX-3100) and infectious disease products.
Licensed a veterinary vaccine for foot and mouth disease (FMD) to Plumbline Life Sciences, an animal health company headquartered in South Korea. Plumbline will fund all development activities for this FMD vaccine and pay Inovio milestone payments as well as royalties on potential product sales.
Inovio expanded its leadership team with the appointment of multiple individuals to lead the functions of business development, biologic and device manufacturing, regulatory, and oncology clinical development.