ZIOPHARM Announces Four Presentations at the 2016 ASH Annual Meeting

On November 3, 2016 ZIOPHARM Oncology, Inc. (Nasdaq:ZIOP), a biopharmaceutical company focused on new cancer immunotherapies, reported that four abstracts highlighting data from the Company’s adoptive cell-based therapeutic programs have been accepted for presentation at the 58th American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition (Press release, Ziopharm, NOV 3, 2016, View Source [SID1234516531])The meeting will be held December 3-6, 2016 in San Diego.

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The research, conducted at The University of Texas MD Anderson Cancer Center and Intrexon Corporation (NYSE:XON) demonstrates, among other results, that T cells can be quickly produced with the Sleeping Beauty system and that this non-viral approach to gene therapy can be harnessed to generate chimeric antigen receptor (CAR) and T-cell receptor (TCR) expressing effector cells.

"This suite of nonclinical data underscores the technology underlying our adoptive cell-based programs, including the potential for the Sleeping Beauty platform to improve the manufacture of genetically modified T cells and our ability to redirect T-cell specificity to blood cancers and solid tumors using CARs and TCRs," said Laurence Cooper, M.D., Ph.D., Chief Executive Officer of ZIOPHARM. "This research advances our plans to rapidly and cost-effectively deliver engineered T cells, and we look forward to seeing it translate into clinical programs."

Details for ASH (Free ASH Whitepaper) presentations are as follows:

Title: Very Rapid Production of CAR+T Cells upon Non-viral Gene Transfer using the Sleeping Beauty System
Session Title: 614. Acute Lymphoblastic Leukemia: Therapy, excluding Transplantation
Date and Time: Sunday, December 4, 2016, 6:00 — 8:00 p.m. PT
Publication ID: 2807
Location: San Diego Convention Center, Hall GH

Title: Personalization of T-cell Therapy using a High-throughput Platform to Identify Tumor-specific T-cell Receptors
Session Title: 703. Adoptive Immunotherapy: Poster II
Date and Time: Sunday, December 4, 2016, 6:00 — 8:00 p.m. PT
Publication ID: 3359
Location: San Diego Convention Center, Hall GH

Title: Combination Immunotherapy with NY-ESO-1 Specific CAR+T Cells with T-Cell Vaccine Improves Anti-Myeloma Effect
Session Title: 703. Adoptive Immunotherapy: Poster II
Date and Time: Sunday, December 4, 2016, 6:00 — 8:00 p.m. PT
Publication ID: 3366
Location: San Diego Convention Center, Hall GH

Title: Chimeric Antigen Receptor-Modified T Cells for the Treatment of Acute Myeloid Leukemia Expressing CD33
Session Title: 616. Acute Myeloid Leukemia: Novel Therapy, excluding Transplantation: Poster III
Date and Time: Monday, December 5, 2016, 6:00 — 8:00 p.m. PT
Publication ID: 4058
Location: San Diego Convention Center, Hall GH

NantKwest to Present Data at the 58th Annual Meeting of the American Society of Hematology

On November 3, 2016 NantKwest Inc. (Nasdaq:NK), a pioneering, next generation, clinical-stage immunotherapy company focused on harnessing the unique power of our immune system using natural killer (NK) cells to treat cancer, infectious diseases and inflammatory diseases, reporteded several presentations at the upcoming 58th Annual Meeting of the American Society of Hematology (ASH) (Free ASH Whitepaper) in San Diego, CA, December 3-6, 2016 (Press release, NantKwest, NOV 3, 2016, http://ir.nantkwest.com/phoenix.zhtml?c=254059&p=RssLanding&cat=news&id=2220144 [SID1234516468]).

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"As these presentations demonstrate, since our IPO in July 2016, NantKwest continues to make significant progress in our preclinical and clinical development efforts," said Patrick Soon-Shiong, MD, Chairman and CEO of NantKwest. "We are honored to present these results at the upcoming annual ASH (Free ASH Whitepaper) meeting and remain focused on bringing our novel, natural killer cell based therapies to the routine clinical cancer setting for a broad range of cancer types."

Presentation Summaries

Combination Therapy with Daratumumab and CAR-NK Targeting CS1 for Multiple Myeloma

Abstract #1342, View Source
Presenter: Yibo Zhang, PhD, Comprehensive Cancer Center, Ohio State University, Columbus, OH
Saturday, December 3, 2016, 5:30 – 7:30 PM, Hall GH
This poster will review the combination of Daratumumab and CS1.taNK therapy targeting two different tumor-associated antigens, both with potent efficacy in multiple myeloma, which may have synergistic effects.

Phase 1 Clinical Trial of Adoptive Immunotherapy Using "Off-The-Shelf" Activated Natural Killer Cells (aNK) in Patients with Refractory/Relapsed Acute Myeloid Leukemia

Abstract #1649, View Source
Presenter: Michael Boyiadzis, MD, MHSc, University of Pittsburgh Medical Center, UPMC Cancer Center, University of Pittsburgh Cancer Institute, Pittsburgh, PA
Saturday, December 3, 2016, 5:30 – 7:30 PM, Hall GH
This poster will review a Phase I clinical trial of the safety and efficacy of "off-the-shelf" aNK cell therapy in heavily pretreated patients with refractory/relapsed AML

CD19 Target Activated Natural Killer (CD19.taNK) Cellular Therapy: A Novel Immunotherapeutic Approach to the Treatment of Non-Hodgkin Lymphoma (NHL)

Abstract #4174, View Source
Presenter: Ravi Dashnamoorthy, PhD, Molecular Oncology Research Institute, Tufts Medical Center, Boston, MA
Monday, December 4, 2016, 6:00 – 8:00PM, Hall GH
This poster will review the potent single agent anti-tumor activity against a range of NHL cell and ongoing activity into the biological mechanisms of activity of CD19.taNK therapy and potential combination therapy approaches.

LIGAND REPORTS THIRD QUARTER 2016 FINANCIAL RESULTS

On November 3, 2016 Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) reported financial results for the three and nine months ended September 30, 2016, and provided an operating forecast and program updates (Press release, Ligand, NOV 3, 2016, View Source [SID1234516346]). Ligand management will host a conference call today beginning at 4:30 p.m. Eastern time to discuss this announcement and answer questions.

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"Our solid third quarter financial performance is highlighted by all-time high royalty revenues. In addition, we had a very active quarter with new licensings further increasing our portfolio of partnered assets," said John Higgins, Chief Executive Officer of Ligand. "Novartis continues to make excellent progress with growing sales, expanding indications and entering new geographies with Promacta. Amgen is focused on growing Kyprolis, and Spectrum’s product Evomela is showing good momentum in sales growth following its launch earlier this year. Also, recent positive clinical and regulatory milestones were achieved with a few of our more important portfolio programs, notably for programs or technologies licensed to Retrophin, Lundbeck and Melinta. We also initiated a Phase 2 clinical trial with LGD-6972 for the treatment of type 2 diabetes mellitus."

Ligand is in the process of evaluating certain deferred tax assets (DTA) recorded in the third quarter of 2015. Ligand is reviewing the amount of net operating loss carryforwards recorded as a result of capitalized R&D expenses associated with two acquisitions accounted for in 2010. As a result, the amount of DTA Ligand recorded in connection with the release of its valuation allowance could be reduced by approximately 10% of the $217 million DTA booked in the third quarter of 2015. The impact of the reduction would reduce the one-time DTA gain and would reduce GAAP net income for that period by the same amount. The balance sheet for the third quarter of 2015 and every subsequent period would reflect the reduction in DTA. The 2015 GAAP net income and earnings per share, which would be impacted by the reduction in DTA, are not available at this time, but will be reported in Ligand’s Form 10-Q for the third quarter of 2016, which will include Ligand’s conclusion regarding the reduction in DTA. The GAAP and adjusted net income and EPS figures for the three and nine month periods ended September 30, 2016 would be unaffected by the changes.

Third Quarter 2016 Financial Results

Total revenues for the third quarter of 2016 were $21.6 million, compared with $17.7 million for the same period in 2015. Royalty revenues were $15.7 million, compared with $9.8 million for the same period in 2015 primarily due to higher royalties from Promacta and Kyprolis. Material sales were $4.2 million, compared with $6.0 million for the same period in 2015 due to timing of Captisol purchases for use in clinical trials and commercial products. License and milestone revenues were $1.7 million, compared with $1.9 million for the same period in 2015.

Cost of goods sold was $1.0 million for the third quarter of 2016, compared with $1.3 million for the same period in 2015 due to the timing and mix of Captisol sales. Amortization of intangibles was $2.7 million, compared with $0.6 million for the same period in 2015 due primarily to additional amortization of intangibles related to the acquisition of OMT. Research and development expense was $6.3 million, compared with $1.9 million for the same period of 2015 as a result of the addition of OMT-related expenses, timing of spending on internal development programs and non-cash stock-based compensation expense. General and administrative expense was $6.3 million, compared with $5.0 million for the same period in 2015 due to costs associated with OMT and non-cash stock-based compensation expense.

GAAP net income for the third quarter of 2016 was $0.6 million, or $0.03 per share. Adjusted net income for the third quarter of 2016 was $13.5 million, or $0.62 per diluted share, compared with adjusted net income for the same period in 2015 of $12.0 million, or $0.57 per diluted share. See "Adjusted Financial Measures" and the accompanying table below for the adjusted calculations and reconciliation to comparable GAAP financial measures.

As of September 30, 2016, Ligand had cash, cash equivalents and short-term investments of $124.1 million.

Year-to-Date Financial Results

Total revenues for the nine months ended September 30, 2016 were $70.8 million, compared with $50.7 million for the same period in 2015. Royalty revenues were $39.8 million, compared with $26.6 million for the same period in 2015 primarily due to higher royalties from Promacta and Kyprolis. Material sales were $13.5 million, compared with $20.5 million for the same period in 2015 due to timing of Captisol purchases for use in clinical trials and commercial products. License and milestone revenues were $17.5 million, compared with $3.6 million for the same period in 2015 due to the addition of OmniAb revenue as of January 2016 and the timing of milestones and upfront license fees.

Cost of goods sold was $2.7 million for the nine months ended September 30, 2016, compared with $4.9 million for the same period in 2015 due to the timing and mix of Captisol sales. Amortization of intangibles was $7.9 million, compared with $1.8 million for the same period in 2015 due primarily to additional amortization of intangibles related to the acquisition of OMT. Research and development expense was $14.8 million, compared with $8.7 million for the same period of 2015 as a result of timing of spending on internal development programs and non-cash stock-based compensation expense. General and administrative expense was $20.0 million, compared with $18.2 million for the same period in 2015 due to costs associated with OMT and non-cash stock-based compensation expense.

GAAP net income for the nine months ended September 30, 2016 was $1.5 million, or $0.07 per diluted share. Adjusted net income for the nine months ended September 30, 2016 was $45.3 million, or $2.09 per diluted share, compared with adjusted net income for the same period in 2015 of $57.3 million, or $2.75 per diluted share.

Revised Financial Forecast

The Company is revising expectations for full-year 2016 total revenues to be between $110 million and $114 million, and adjusted earnings per diluted share to be between $3.37 and $3.44. This compares to previous Company expectations for full-year 2016 total revenues to be between $115 million and $119 million, and adjusted earnings per diluted share to be between $3.41 and $3.46. The revised outlook for total revenues reflects expected lower sales for Captisol due to timing of certain regulatory and clinical events. The Company expects total revenues for the fourth quarter of 2016 to be between $39 million and $43 million, including approximately $19 million in royalty revenues. Fourth quarter adjusted earnings per diluted share is expected to be between $1.29 and $1.36. For 2017, we are maintaining our previously disclosed guidance of greater than $160 million of revenue and greater than $5.03 of adjusted earnings per diluted share.

The adjusted net income per diluted share guidance excludes non-cash stock-based compensation expense, non-cash debt-related costs, amortization related to acquisitions, changes in contingent liabilities, non-cash net losses of Viking Therapeutics equity, mark-to-market adjustment for amounts owed to licensors, fair value adjustments to Viking Therapeutics convertible note receivable and warrants, non-cash tax benefit (expense), unissued shares relating to the Senior Convertible Note and adjustments for discontinued operations, net of non-cash tax expense.

Third Quarter 2016 and Recent Business Highlights

Portfolio Program Progress

Promacta/Revolade

Novartis announced Q3 2016 net sales of Promacta (eltrombopag) of $168 million, a $51 million or 44% increase over Q3 2015. Novartis also announced that Promacta is now approved in more than 100 countries.
Kyprolis (carfilzomib), an Amgen Product Utilizing Captisol

On September 27, 2016, Amgen announced top-line results of the Phase 3 CLARION trial, which evaluated an investigational regimen of Kyprolis (carfilzomib), melphalan and prednisone (KMP) versus Velcade (bortezomib), melphalan and prednisone (VMP) for 54 weeks in patients with newly diagnosed multiple myeloma who were ineligible for hematopoietic stem-cell transplant. The trial did not meet the primary endpoint of superiority in progression-free survival (PFS). A Phase 3 study evaluating Kyprolis in combination with lenalidomide plus dexamethasone (KRd) versus Velcade in combination with lenalidomide plus dexamethasone (VRd) in newly diagnosed multiple myeloma patients called ENDURANCE, an investigator-sponsored study, is underway independently by the ECOG-ACRIN Cancer Research Group.
In July 2016, Amgen announced that the European Commission approved an extended indication for Kyprolis (carfilzomib), to be used in combination with dexamethasone alone, for adult patients with multiple myeloma who have received at least one prior therapy. Also, Ono Pharmaceuticals, holder of Kyprolis (carfilzomib) marketing rights in Japan, announced approval in Japan for treatment of patients with relapsed or refractory multiple myeloma.
Additional Pipeline and Partner Developments

Retrophin announced positive top-line results from the Phase 2 DUET study of sparsentan for the treatment of focal segmental glomerulosclerosis. The study achieved statistical significance in the primary efficacy endpoint for the overall sparsentan treatment group, demonstrating a greater than two-fold reduction of proteinuria compared to irbesartan after the eight-week, double-blind treatment period. Additional data from the Phase 2 DUET study of sparsentan for the treatment of focal segmental glomerulosclerosis will be presented at the late-breaking High-Impact Clinical Trials oral session at the American Society of Nephrology (ASN) Kidney Week 2016.
Lundbeck announced FDA approval of Carnexiv (carbamazepine) injection as a short-term replacement therapy for oral carbamazepine formulations in adults with certain seizure types when oral administration is temporarily not feasible. Ligand earned a $1.25 million milestone payment upon approval and is entitled to receive a royalty of 2.75% on net sales of Carnexiv.
Melinta Therapeutics announced that it has submitted NDAs to the FDA for approval of IV and oral Baxdela (delafloxacin) for the treatment of patients with acute bacterial skin and skin structure infections (ABSSSI). With the submission, Ligand earned a $1.5 million milestone payment. If approved, Ligand is entitled to receive a 2.5% royalty on net sales of the IV formulation of Baxdela and an additional $1.5 million approval milestone payment. Baxdela was the subject of several poster presentations at IDWeek 2016, held October 26-30 at the New Orleans Ernest N. Morial Convention Center.
The FDA granted orphan designation to Merck’s Noxafil for treatment of invasive aspergillosis.
Viking Therapeutics announced the first patient has been dosed in the company’s Phase 2 clinical trial of VK2809 in patients with primary hypercholesterolemia and non-alcoholic fatty liver disease.
Viking Therapeutics announced positive top-line results from a proof-of-concept study of VK0214 in a mouse model of X-linked adrenoleukodystrophy (X-ALD), showing VK0214 rapidly reduced plasma very long chain fatty acid levels by more than 25% in treated animals compared with vehicle controls (p<0.01). Detailed study results were presented at the 86th Annual Meeting of the American Thyroid Association.
Aldeyra Therapeutics announced plans for ADX-102 (formerly NS2) for the first-ever vehicle-controlled Phase 3 clinical trial in noninfectious anterior uveitis, as well as a Phase 3 clinical trial in Sjögren-Larsson Syndrome. Aldeyra also announced the expected advancement of ADX-102 to a Phase 2b clinical trial in allergic conjunctivitis and the addition of a clinical program in dry eye syndrome.
Eli Lilly presented data on Prexasertib (LY2606368) demonstrating activity in patients with BRCA wild type sporadic high-grade serous ovarian cancer at the European Society for Medical Oncology 2016 Congress.
Merrimack Pharmaceuticals announced the FDA granted seribantumab (MM-121) Fast Track designation for development in patients with heregulin-positive, locally advanced or metastatic non-small cell lung cancer whose disease has progressed following immunotherapy.
Lubris BioPharma announced positive results of a clinical trial that showed recombinant human lubricin demonstrated significant improvement in both signs and symptoms of dry eye disease compared to sodium hyaluronate (HA). Results were published in the September issue of The Ocular Surface.
Opthea announced that the Phase 1 dose-escalation study of OPT-302 met its primary objective demonstrating safety and tolerability as monotherapy and in combination with the current wet AMD standard of care Lucentis. Opthea is recruiting patients for its Phase 2a dose-expansion trial and expects data by the end of 2016.
New Licensing Deals

Ligand announced worldwide license agreements with Gilead Sciences, F-Star Biotechnology Limited and TeneoBio to use certain or all of the OmniAb platform technologies to discover fully human antibodies. Ligand is eligible to receive annual access payments, sublicensing fees, milestone payments and royalties on future net sales of any antibodies discovered under these licenses.
Ligand announced licensing rights to four programs to Seelos Therapeutics including aplindore for the treatment of various CNS disorders, a CRTH2 antagonist for the treatment of respiratory disorders, a Captisol-enabled acetaminophen program for pain and fever management and an H3 receptor antagonist program for the treatment of narcolepsy. Ligand is entitled to receive milestones and net sales royalties ranging from 4% to 10% for the various programs licensed.
Ligand announced a license agreement for its LTP technology with Nucorion Pharmaceuticals, a venture-funded biotechnology company focused on developing anti-cancer and anti-viral agents initially directed to China, of which Ligand is a minority shareholder. Three initial programs fall under the license: NUC-202, a targeted anticancer analog for the treatment of hepatocellular carcinoma; NUC-404, a targeted nucleotide analog for the treatment of hepatitis B; and NUC-101, a targeted nucleotide analog for the treatment of hepatitis C. Ligand is eligible to receive milestones in addition to royalties ranging from 5% to 9% on future net sales of any approved program.
Internal Glucagon Receptor Antagonist (GRA) Program

Ligand announced initiation of a Phase 2 clinical trial with LGD-6972 for the treatment of type 2 diabetes mellitus (T2DM). The randomized, double-blind, placebo-controlled study will evaluate the safety and efficacy of LGD-6972, as an adjunct to diet and exercise, in subjects with T2DM whose blood glucose levels are inadequately controlled with metformin. Results from two Phase 1 clinical trials with LGD-6972 were published online in the August 2016 issue of the journal Diabetes, Obesity and Metabolism.
Adjusted Financial Measures

The adjusted financial measures discussed above and in the tables below for the three and nine months ended September 30, 2016 and 2015 exclude non-cash stock-based compensation expense, non-cash debt-related costs, amortization related to acquisitions, changes in contingent liabilities, non-cash net losses of Viking Therapeutics equity, mark-to-market adjustment for amounts owed to licensors, fair value adjustments to Viking Therapeutics convertible note receivable and warrants, non-cash tax benefit (expense), unissued shares relating to the Senior Convertible Note and adjustments for discontinued operations, net of non-cash tax expense.

Management has presented net income and net income per share on an adjusted basis. Ligand believes the presentation of adjusted financial measures provides useful supplementary information to investors and reflects amounts that are more closely aligned with the cash profits for the period. Ligand uses these adjusted financial measures in connection with its own budgeting and financial planning. These adjusted financial measures are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in conformity with GAAP.

Verastem Announces Presentations at ASH Annual Meeting

On November 3, 2016 Verastem, Inc. (NASDAQ:VSTM), focused on discovering and developing drugs to treat cancer, reported that new data for duvelisib, an investigational, oral, dual inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma, will be presented at the American Society of Hematology (ASH) (Free ASH Whitepaper) 2016 Annual Meeting, being held December 3-6, 2016 in San Diego (Press release, Verastem, NOV 3, 2016, View Source;p=RssLanding&cat=news&id=2219237 [SID1234516338]).
Data from DYNAMO, a Phase 2 monotherapy study evaluating the efficacy and safety of duvelisib in relapsed/refractory iNHL, will be presented in an oral session. Updated data from CONTEMPO, a Phase 1b/2 study evaluating duvelisib in combination with rituximab or obinutuzmab in treatment-naïve follicular lymphoma patients, and preclinical research on the role of Focal Adhesion Kinase (FAK) inhibition in AML, will be presented in a poster session.
Details for the presentations at ASH (Free ASH Whitepaper) are below:
Oral Presentation
Title: DYNAMO: A phase 2 study demonstrating the clinical activity of duvelisib in patients with relapsed refractory indolent non-Hodgkin lymphoma
Lead Author: Ian Flinn, M.D., Ph.D., Director, Hematologic Malignancies Program, Sarah Cannon Research Institute
Abstract Number: 1218
Location: San Diego Convention Center, Ballroom 20BC
Date and Time: Monday, December 5, 2016, 7:30 – 7:45 pm PT
The full abstract can be viewed here.
Poster Presentations
Title: Preliminary results in first-line treatment of follicular lymphoma with the oral dual PI3K-delta,gamma inhibitor, duvelisib, in combination with rituximab or obinutuzumab
Lead Author: Carla Casulo, M.D., Assistant Professor, Wilmot Cancer Institute, University of Rochester
Abstract Number: 2979
Location: San Diego Convention Center, Hall GH
Date and Time: Sunday, December 4, 2016, 6:00 – 8:00 pm PT
The full abstract can be viewed here.
Title: Inhibition of FAK Exerts Anti-Leukemic Activity and Potentiates ABT-199-Induced Apoptosis in AML
Lead Author: Bing Carter, Ph.D.., Associate Professor, Department of Leukemia – Research, Division of Cancer Medicine, The University of Texas MD Anderson Cancer Center
Abstract Number: 1574
Location: San Diego Convention Center, Hall GH
Date and Time: Saturday, December 3, 2016, 5:30 – 7:30 pm PT
The full abstract can be viewed here.
About the Tumor Microenvironment
The tumor microenvironment encompasses various cellular populations and extracellular matrices within the tumor or cancer niche that support cancer cell survival. This includes immunosuppressive cell populations such as regulatory T cells, myeloid-derived suppressor cells, M2 tumor-associated macrophages, as well as tumor-associated fibroblasts and extracellular matrix proteins which can hamper the entry and therapeutic benefit of cytotoxic immune cells and anti-cancer drugs. In addition to targeting the proliferative and survival signaling of cancer cells, Verastem’s compounds duvelisib, defactinib, VS-4718 and VS-5584 also target the tumor microenvironment as a mechanism of action to potentially improve a patient’s response to therapy.
About Duvelisib
Duvelisib is an investigational, dual inhibitor of phosphoinositide 3-kinase (PI3K)-delta and PI3K-gamma, two enzymes that are known to help support the growth and survival of malignant B cells and T cells. PI3K signaling may lead to the proliferation of malignant B cells and is thought to play a role in the formation and maintenance of the supportive tumor microenvironment.1,2,3 Duvelisib is currently being evaluated in late- and mid-stage clinical trials, including DUO, a randomized, Phase 3 monotherapy study in patients with relapsed/refractory chronic lymphocytic leukemia (CLL)4, and DYNAMO, a single-arm, Phase 2 monotherapy study in patients with refractory indolent non-Hodgkin lymphoma (iNHL) that achieved its primary endpoint of overall response rate upon topline analysis of efficacy data5. Duvelisib is also being evaluated for the treatment of hematologic malignancies through investigator-sponsored studies, including T cell lymphoma.6 Information about duvelisib clinical trials can be found on www.clinicaltrials.gov.

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TESARO Announces Third-Quarter 2016 Operating Results

On November 3, 2016 TESARO, Inc. (NASDAQ:TSRO), an oncology-focused biopharmaceutical company, reported operating results for third-quarter 2016 and provided an update on the Company’s marketed product and development programs (Press release, TESARO, NOV 3, 2016, View Source [SID1234516336]).

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"We are very pleased to have submitted regulatory applications for niraparib in both the United States and in Europe for the maintenance treatment of patients with platinum-sensitive, recurrent ovarian cancer who are in response to platinum-based chemotherapy. Pre-launch activities are well underway in support of four potential product launches in 2017, including VARUBI IV and niraparib in the U.S and VARUBI oral and niraparib in Europe," said Lonnie Moulder, CEO of TESARO. "The recent ESMO (Free ESMO Whitepaper) 2016 Congress was very gratifying for TESARO, highlighted by the presentation of the landmark niraparib NOVA trial results during a Presidential Symposium by Dr. Mansoor Raza Mirza. We look forward to advancing our comprehensive ovarian cancer clinical program and expanding niraparib development into other tumor types in 2017."

Recent Business Highlights

The U.S. launch of VARUBI continues, and unit volume increased by 14% for the third quarter compared to the second quarter. For the month of September, VARUBI achieved a 28% market share in the oral NK-1 market in the U.S.
TESARO officially opened its international commercial headquarters in Zug, Switzerland on October 11.
Earlier this week, the rolling submission of a New Drug Application (NDA) for niraparib to the U.S. Food and Drug Administration (FDA) was completed for the maintenance treatment of patients with recurrent, platinum-sensitive ovarian cancer who are in response to platinum-based chemotherapy. The indication proposed in the niraparib NDA provides for the use of niraparib regardless of tumor biomarker status, and it is anticipated that the BRACAnalysis CDx and myChoice HRD tests would be available to physicians as complementary diagnostics.
The Marketing Authorisation Application (MAA) for niraparib has been submitted to and accepted for review by the European Medicines Agency (EMA) for the maintenance treatment of patients with recurrent, platinum-sensitive ovarian cancer who are in response to platinum-based chemotherapy.
The niraparib Phase 3 ENGOT-OV16/NOVA clinical trial results were presented at the Presidential Symposium at the ESMO (Free ESMO Whitepaper) 2016 Congress by Dr. Mansoor Raza Mirza, M.D., Medical Director of the Nordic Society of Gynecologic Oncology (NSGO) and principal investigator. These data were simultaneously published in the New England Journal of Medicine.
Planning is underway to support initiation of an Early Access Program (EAP) for niraparib in the United States and Europe.
Janssen initiated a Phase 2 clinical trial with niraparib in monotherapy in men with metastatic castration resistant prostate cancer (mCRPC) and recently began a Phase 1 safety and pharmacokinetics study of niraparib plus apalutamide (ARN-509).
Enrollment continues in the PRIMA trial for patients with first-line ovarian cancer, the QUADRA trial of niraparib for the treatment of patients with ovarian cancer who have received three or more prior lines of chemotherapy, and in the BRAVO trial for patients with germline BRCA-mutated, metastatic breast cancer.
Enrollment continues in the TOPACIO trial of niraparib plus KEYTRUDA (pembrolizumab) in patients with ovarian cancer or with triple negative breast cancer and in the AVANOVA trial of niraparib plus bevacizumab in patients with ovarian cancer.
TESARO and Zai Lab (Shanghai) Co., Ltd. announced a collaboration to support the development and commercialization of niraparib for patients in China and the potential to advance two immuno-oncology programs outside of China.
The Phase 1 dose escalation study of TSR-022, an anti-TIM-3 antibody candidate, was initiated in July, and the Phase 1 trial of TSR-042, an anti-PD-1 antibody candidate, continues to enroll.
Third Quarter 2016 Financial Results

TESARO reported a net loss of $101.2 million, or ($1.98) per share, for the third quarter of 2016, compared to a net loss of $66.6 million, or ($1.66) per share, for the third quarter of 2015.

Net product revenue for the third quarter of 2016 totaled $2.8 million and included sales of VARUBI from specialty pharmacy customers to patients and from specialty distributors to providers that were made during the third quarter, as well as sales from specialty distributors to providers that occurred in the second quarter of 2016. License, collaboration and other revenue for the third quarter of 2016 totaled $0.9 million and included amortization of milestone payments and shipments of clinical materials under our license agreements with Hengrui and Janssen.

Research and development expenses increased to $60.8 million for the third quarter of 2016, compared to $40.1 million for the third quarter of 2015, driven primarily by higher costs related to the ongoing registration trials of niraparib, manufacturing costs associated with niraparib, and the initiation of clinical studies for our immuno-oncology portfolio, in addition to increased headcount.

Selling, general and administrative expenses increased to $37.7 million for the third quarter of 2016, compared to $22.8 million for the third quarter of 2015, primarily due to higher commercial headcount, including the establishment of a U.S. field sales organization in August 2015, commercial activities in support of the launch of VARUBI, costs associated with the establishment of our international headquarters, and higher professional service fees.

Operating expenses, as described above, include total non-cash, stock-based compensation expense of $12.9 million for the third quarter of 2016, compared to $8.1 million for the third quarter of 2015.

As of September 30, 2016, TESARO had approximately $647 million in cash and cash equivalents, which includes the $409 million in net proceeds from a follow-on offering of 5.3 million shares of common stock that was completed in July 2016. For the quarter ended September 30, 2016, TESARO had approximately 51.2 million shares outstanding on a weighted average basis.

In anticipation of four product launches in 2017, TESARO will continue to invest in pre-launch inventory manufacturing, development of supply chain capabilities and capacity, and expansion of European and targeted U.S. commercial operations, in addition to making milestone payments for regulatory submissions. As a result of these investments, the Company expects its cash and cash equivalents balance to decline by approximately $100 million during the fourth quarter of 2016.

Corporate Objectives

The following is a summary of TESARO’s key objectives:

VARUBI (rolapitant):

Achieve #1 market share position within the oral NK-1 receptor antagonist market by year-end 2016 in the U.S.;
Launch VARUBI IV into the U.S. market in 1H 2017, pending FDA approval;
Establish a European commercial organization; and
Launch VARUBI oral in Europe in 1H 2017, pending EMA approval.
Niraparib:

Continue commercial preparations in support of the launches of niraparib in the U.S. in 1H 2017 and Europe in 2H 2017, pending regulatory approvals;
Report QUADRA data in 2H 2017;
Report Phase 3 BRAVO data in 2H 2017;
Finalize a potential lung cancer registration strategy and initiate development program in 1H 2017; and
Determine the potential registration strategy for niraparib plus an anti-PD-1 antibody in ovarian cancer and triple-negative breast cancer in 2H 2017.
Immuno-Oncology Portfolio:

Identify a dose and schedule for TSR-042 (anti-PD-1 antibody) by the end of 2016;
Select at least one bispecific antibody clinical candidate by the end of 2016;
Identify the first clinical candidate within the MD Anderson collaboration in 1H 2017;
Initiate a Phase 1 study of TSR-033 (anti-LAG-3 antibody) in 1H 2017;
Finalize the TSR-042 registration strategy and initiate a registration program in 1H 2017; and
Initiate a Phase 1 clinical trial of TSR-022 in combination with an anti-PD-1 antibody in mid-2017.