On November 1, 2016 QLT Inc. (NASDAQ:QLTI) (TSX:QLT) ("QLT" or the "Company") reported financial results for the third quarter ended September 30, 2016. Unless otherwise specified, all amounts are reported in U.S. dollars and in accordance with U.S. GAAP (Press release, QLT, NOV 1, 2016, View Source;p=RssLanding&cat=news&id=2217788 [SID1234516148]).

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2016 THIRD QUARTER FINANCIAL RESULTS

Operating Expenses/Income

During the third quarter of 2016, research and development ("R&D") expenditures were $2.9 million compared to $2.1 million for the same period in 2015. The $0.8 million (38%) increase was primarily due to higher costs related to preparatory activities for our upcoming Phase III pivotal trial for QLT091001.

During the third quarter of 2016, we incurred $1.9 million of consulting and advisory fees on activities to support our pending merger transaction with Aegerion Pharmaceuticals, Inc. ("Aegerion"), which is described below. In comparison, we incurred $2.2 million of similar costs in 2015 related to: (i) the pursuit of our merger transaction with InSite Vision Incorporated ("InSite"), which was terminated by InSite on September 15, 2015, and (ii) activities to support our investment in Aralez Pharmaceuticals, Inc. ("Aralez"), which was subsequently distributed to our shareholders on April 5, 2016 (the "Aralez Distribution").

Excluding the strategic consulting and advisory fees described above, selling, general and administrative ("SG&A") expenditures for the third quarter of 2016 were relatively consistent with SG&A expenditures incurred during the same period in 2015.

Operating Loss and Net Loss per Share

The operating loss for the third quarter of 2016 was $6.0 million, compared to $2.8 million for the same period in 2015. The net $3.2 million change in our operating loss was primarily due to a $2.7 million non-recurring termination fee received from InSite in September 2015, in connection with InSite’s termination of the merger agreement, as well as higher R&D costs in the third quarter of 2016 associated with preparatory activities for our upcoming Phase III pivotal trial for QLT091001.

Net loss per common share was $0.11 in the third quarter of 2016, compared to $0.05 for the same quarter in 2015. The change in our net loss per common share was primarily due to the same factors described above.

Cash and Cash Equivalents

As at September 30, 2016, the Company’s consolidated cash and cash equivalents were $73.1 million compared to $141.8 million at December 31, 2015. The $68.7 million decrease was primarily due to: (i) the $45.0 million investment in Aralez and subsequent Aralez Distribution (as described above), (ii) $9.2 million of strategic consulting and advisory fees related to the proposed merger with Aegerion, the Aralez Distribution, and the exploration of other strategic alternatives, (iii) $3.0 million advanced to Aegerion pursuant to the terms of the interim loan agreement with Aegerion, and (iv) cash used in operating activities during the period.

AEGERION MERGER TRANSACTION UPDATE

As previously announced, on June 14, 2016, Aegerion and QLT agreed to a merger (the "Merger") under the terms of an Agreement and Plan of Merger by and among Aegerion, QLT and Isotope Acquisition Corp., an indirect wholly-owned subsidiary of QLT. While the proposed Merger has been approved by the boards of directors of both companies, the closing of the Merger is subject to various conditions, including but not limited to (i) receipt of the required approvals of the shareholders at the special meetings of each QLT and Aegerion on November 7, 2016, and (ii) completion of the $21.8 million QLT private placement contemplated by the unit subscription agreement entered into with certain investors in connection with the Merger. The Merger is expected to close in the fourth quarter of 2016.

SYNTHETIC RETINOID UPDATE

The Company continues its Phase III pivotal trial start-up activities to test the safety and efficacy of its Fast Track and Orphan Drug Designated investigational drug product, QLT091001 in subjects with Inherited Retinal Disease phenotypically diagnosed as LCA or RP caused by RPE65 or LRAT gene mutations, with a goal of initiating the pivotal trial in the fourth quarter of 2016.

In addition to the Fast Track and Orphan Drug Designations previously granted to us by the FDA for QLT091001, the Company is currently exploring the potential of submitting to the FDA a request for a Rare Pediatric Disease Designation of QLT091001. Under the Federal Food, Drug, and Cosmetic Act, a sponsor who receives an approval of a New Drug Application (NDA) for a Rare Pediatric Disease and meets certain additional criteria, may be eligible to be awarded a Rare Pediatric Disease Priority Review Voucher (PRV). A PRV can be redeemed to receive a priority review for any subsequent marketing application for a different product. A PRV, if obtained by a sponsor, may be sold or transferred to another sponsor. The FDA’s authority to award Rare Pediatric Disease PRVs is currently set to expire December 31, 2016. The authority has been extended multiple times previously, and while it is possible that it may be further extended or made permanent in the future, there is no guarantee of any such extension.

In addition, U.S. Patent No. 9,403,765 relating to various methods of use of various synthetic retinal esters, including QLT091001, for the treatment of diseases associated with an endogenous 11-cis-retinal deficiency, including LCA and RP, was granted by the USPTO on August 2, 2016. This patent is currently projected to expire on June 20, 2025. This newly issued patent further enhances the Company’s key patent portfolio around methods of using QLT091001 in the treatment of IRD.

Passive Foreign Investment Company

The Company believes that it was classified as a Passive Foreign Investment Company ("PFIC") for 2008 through 2015, and that it may be classified as a PFIC in 2016, which could have adverse tax consequences for U.S. shareholders. Please refer to our 2015 Annual Report on Form 10-K (as amended by the Form 10-K/A filed on April 29, 2016) for additional information.

QLT Inc. – Financial Highlights
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands of U.S. dollars except share and per share information)
Three months ended Nine months ended
September 30, September 30,
2016 2015 2016 2015

Expenses
Research and development $ 2,855 $ 2,142 $ 8,774 $ 7,754
Selling, general and administrative 3,138 3,166 13,487 13,939
Depreciation 24 141 85 508
Termination fee – (2,667 ) – (2,667 )
6,017 2,782 22,346 19,534
Operating loss (6,017 ) (2,782 ) (22,346 ) (19,534 )
Other (expense) income
Net foreign exchange losses (105 ) (43 ) (214 ) (5 )
Interest income 110 152 240 235
Fair value loss on investment – - (10,704 ) -
Other (39 ) (6 ) (30 ) (8 )
(34 ) 103 (10,708 ) 222
Loss before income taxes (6,051 ) (2,679 ) (33,054 ) (19,312 )
Recovery of (Provision for) income taxes 115 (3 ) 104 (17 )
Net loss and comprehensive loss $ (5,936 ) $ (2,682 ) $ (32,950 ) $ (19,329 )

Basic and diluted net loss per common share
Net loss per common share $ (0.11 ) $ (0.05 ) $ (0.62 ) $ (0.37 )

Weighted average number of common shares outstanding (thousands)
Basic and diluted 52,829 52,829 52,829 51,949

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands of U.S. dollars) September 30, 2016 December 31, 2015
ASSETS
Current assets
Cash and cash equivalents $ 73,056 $ 141,824
Accounts receivable, net of allowances for doubtful accounts 186 287
Loan receivable 3,073 -
Income taxes receivable 14 14
Prepaid and other assets 450 611
Total current assets 76,779 142,736
Accounts receivable 2,000 2,000
Property, plant and equipment 270 430
Total assets $ 79,049 $ 145,166
LIABILITIES
Current liabilities
Accounts payable $ 3,308 $ 1,656
Accrued liabilities 1,058 1,827
Total current liabilities 4,366 3,483
Uncertain tax position liabilities - 342
Total liabilities 4,366 3,825
SHAREHOLDERS’ EQUITY
Share capital
Authorized
500,000,000 common shares without par value
5,000,000 first preference shares without par value, issuable in series
Issued and outstanding common shares $ 475,333 $ 475,333
September 30, 2016 – 52,829,398 shares
December 31, 2015 – 52,829,398 shares
Additional paid-in capital 63,669 97,377
Accumulated deficit (567,288 ) (534,338 )
Accumulated other comprehensive income 102,969 102,969
Total shareholders’ equity 74,683 141,341
Total shareholders’ equity and liabilities $ 79,049 $ 145,166

On November 1, 2016 Myriad Genetics, Inc. (NASDAQ:MYGN) reported financial results for its fiscal first-quarter 2017, provided an update on recent business highlights, maintained its fiscal year 2017 financial guidance and issued fiscal second-quarter 2017 financial guidance (Press release, Myriad Genetics, NOV 1, 2016, View Source [SID1234516145]).

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"We were pleased with the first quarter as our hereditary cancer business returned to more normal volume trends, and we secured important endorsements from physician networks representing 70 percent of community oncologists in the United States," said Mark C. Capone, president and CEO of Myriad. "In addition, our newest tests, Genesight, EndoPredict, and Prolaris all exceeded 50 percent growth rates, and we successfully completed PARP inhibitor studies with the first prospective validation of myChoice HRD and an additional validation for BRACAnalysis CDx. We remain committed to transforming Myriad into a larger and more diversified personalized medicine company and delivering upon our five-year strategic goals."

Financial Highlights

Below are tables summarizing the financial results and revenue by product class for our fiscal first-quarter 2017:
Revenue
Fiscal First-Quarter

($ in millions) 2017 2016 % Change
Molecular diagnostic testing revenue

Hereditary cancer testing revenue $ 139.3 $ 156.7 (11 %)

GeneSight testing revenue 7.2* 0.0 NM

Vectra DA testing revenue 11.6 11.4 2 %

Prolaris testing revenue 2.9 0.7 314 %

EndoPredict testing revenue 1.7 0.8 113 %

Other testing revenue 2.4 2.3 4 %

Total molecular diagnostic testing revenue 165.1 171.9 (4 %)

Pharmaceutical and clinical service revenue 12.4 11.6 7 %

Total Revenue $ 177.5 $ 183.5 (3 %)

Income Statement
Fiscal First-Quarter

($ in millions) 2017 2016 % Change
Total Revenue $ 177.5 $ 183.5 (3 %)

Gross Profit 137.5 147.0 (7 %)
Gross Margin 77.5 % 80.1 %

Operating Expenses 131.3 103.7 27 %

Operating Income 6.2 43.3 (86 %)
Operating Margin 3.5 % 23.6 %

Adjusted Operating Income 21.6 46.5 (54 %)
Adjusted Operating Margin 12.2 % 25.3 %

Net Income (1.2 ) 30.3 NM

Diluted EPS (0.02 ) 0.42 NM

Adjusted EPS $ 0.23 $ 0.41 (44 %)
* represents revenue for the month of September only

Business Highlights

myRisk Hereditary Cancer
Signed preferred provider agreements with major physician networks in oncology representing approximately 70 percent of community oncologists in the country, or approximately 4,000 physicians.
Launched a customizable myRisk panel for genetics experts who are interested in tailoring their gene selections.
Ended the quarter with 65 percent of revenue under long-term contract and 95 percent of insurance plans in network.

GeneSight
Volumes were up 70 percent year-over-year to approximately 51,000 tests performed in the full fiscal first-quarter 2017.
Reached 90 percent enrollment in a landmark 1,200 patient clinical utility study evaluating GeneSight in patients with depression or anxiety treated by preventive care physicians or psychiatrists.

Vectra DA
Volumes were up four percent year-over-year in the fiscal first-quarter with approximately 39,000 tests performed.
Announced the presentation of four abstracts at the American College of Rheumatology conference in November, showing the ability of Vectra DA to predict which patients will experience flare or sustained remission, and the ability of the Vectra DA score to provide added predictive value to traditional measures of disease activity.

Prolaris
Volumes increased 56 percent year-over-year with approximately 4,400 tests ordered.

Companion Diagnostics
Announced data from the first prospective validation of myChoice HRD from the NOVA study, evaluating the PARP inhibitor, niraparib. In the study, which evaluated platinum-sensitive ovarian cancer patients, myChoice HRD positive patients demonstrated a 9.1 month median progression free survival benefit versus a 3.1 progression free survival benefit in myChoice HRD negative patients. Myriad has submitted the first module of its premarket approval application for myChoice HRD to the FDA.
Announced data from the AstraZeneca SOLO2 study, which compared maintenance olaparib against placebo in patients with platinum-sensitive relapsed ovarian cancer met its primary endpoint. These results further validate that BRCA status as determined by BRACAnalysis CDx can identify patients likely to benefit from PARP inhibition therapy.
Myriad signed an agreement with AstraZeneca to use its newest companion diagnostic, myChoice HRD Plus, to help prospectively identify patients for enrollment in an upcoming exploratory study involving olaparib. myChoice HRD Plus combines Myriad’s proprietary myChoice HRD assay with 102 additional genes involved in DNA repair.

International
Revenues were up 43 percent year-over-year in the first quarter and accounted for approximately five percent of total product revenue.
EndoPredict revenues grew 113 percent year-over-year to $1.7 million in the first quarter of fiscal year 2017.
Completed enrollment in an EndoPredict study evaluating the ability of the test to predict response to neoadjuvant chemotherapy. Results of the study are expected to be presented in calendar year 2017.
In August, the German public reimbursement system (GBA) issued new ambulatory specialty care (ASV) reimbursement covering gene expression testing for breast cancer when conducted in authorized major centers throughout Germany.

Share Repurchase
During the quarter, the Company repurchased approximately 1.0 million shares, or $21 million, of common stock under our share repurchase program and ended the quarter with approximately $171 million remaining on our current share repurchase authorization.
Fiscal Year 2017 and Fiscal Second-Quarter 2017 Financial Guidance
Below is a table summarizing Myriad’s fiscal year 2017 and fiscal second-quarter 2017 financial guidance:

Revenue Adjusted Earnings Per Share GAAP Diluted Earnings Per Share
Fiscal Year 2017 $740-$760 million $1.00-$1.10 $0.34-$0.44

Fiscal Second-Quarter 2017 $188-$190 million $0.23-$0.25 $0.06-$0.08

These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release. The Company will provide further details on its business outlook during its conference call today to discuss the fiscal first-quarter financial results and fiscal year 2017 and fiscal second-quarter 2017 financial guidance.

On November 1, 2016 Intellia Therapeutics, Inc. (NASDAQ:NTLA), a leading genome editing company focused on the development of potentially curative therapeutics using CRISPR/Cas9 technology, reported results for the quarter ended September 30, 2016 and provided an update on recent highlights and upcoming events (Press release, Intellia Therapeutics, NOV 1, 2016, View Source;p=RssLanding&cat=news&id=2218160 [SID1234516144]).

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"We have demonstrated substantial progress in our research, including being the first company to present data showing high levels of in vivo editing in animal models using systemic lipid nanoparticles to deliver CRISPR/Cas9 components," said Nessan Bermingham, Ph.D., Chief Executive Officer and Founder, Intellia Therapeutics. "We continue to make further enhancements and remain focused on advancing the development of CRISPR/Cas9-based therapeutics for patients with severe unmet medical needs."

Recent Highlights

Intellia presented preclinical data demonstrating in vivo gene editing using lipid nanoparticles (LNPs) to deliver CRISPR/Cas9. These data were presented at the Genome Engineering: The CRISPR/Cas Revolution meeting in Cold Spring Harbor, New York. In several preclinical studies, the data showed:
Progress in achieving in vivo editing, reporting an efficiency of approximately 60 percent in mouse liver at the transthyretin (TTR) target site after a single intravenous administration, which was consistent across different lobes of the liver. This resulted in an associated decrease in serum TTR protein levels of up to approximately 80 percent;
Dose-dependent editing by LNP delivery;
Undetectable Cas9 mRNA and guide RNA (gRNA) in the liver at 72 hours post administration; and
Repair patterns in mouse liver cells in vivo being best predicted in vitro by primary mouse liver cells rather than cell lines.

Intellia presented four posters at the recent European Society for Gene and Cell Therapy Congress (ESGCT) in Florence, Italy. The data presentations included an update on the Company’s in vivo delivery and DNA repair data and new methods for analyzing off-target activity. In its presentation on off-target analysis, Intellia described improved computational methods for readily identifying guide RNAs with zero to few off-target events, an essential step in developing CRISPR/Cas9-based therapeutics.
Third Quarter 2016 Financial Results

As of September 30, 2016, Intellia had $290.6 million in cash and cash equivalents. Net loss for the third quarter 2016 was $7.5 million, compared to $3.0 million in the same period in 2015.

Collaboration revenue was $4.9 million in the third quarter 2016, compared to $1.7 million in the same period of 2015. For the Novartis collaboration, Intellia recognized $2.0 million and $1.7 million in the third quarters of 2016 and 2015, respectively. The Regeneron collaboration, announced in April 2016, for which the Company recognized $2.9 million in the third quarter of 2016, was the primary driver of the increase in collaboration revenue.

Research and development expenses in the third quarter 2016 were $7.9 million, compared to $3.5 million in the same period in 2015. This increase in expenses is primarily attributable to accelerating the development of our CRISPR/Cas9 platform and advancing our sentinel indications. These expenses include compensation and benefits for employees, including equity-based compensation, and expansion of Intellia’s facilities and laboratories.

General and administrative expenses were $4.7 million in the third quarter of 2016, compared to $1.5 million for the same period in 2015. The increase in general and administrative expenses is primarily driven by expenses to support the Company’s overall growth and costs associated with being a publicly traded company.

Upcoming Events

Intellia will present at the Fortune Brainstorm Health 2016 Conference in San Diego on November 2, 2016, the Credit Suisse Healthcare Conference in Arizona on November 7, 2016, and the Jefferies 2016 Healthcare Conference in London on November 16, 2016.

On November 1, 2016 Corcept Therapeutics Incorporated (NASDAQ: CORT), a pharmaceutical company engaged in the discovery, development and commercialization of drugs that treat severe metabolic, oncologic and psychiatric disorders by modulating the effects of cortisol, reported its financial results for the quarter ended September 30, 2016 (Press release, Corcept Therapeutics, NOV 1, 2016, http://www.corcept.com/news_events/view/pr_1478031960 [SID1234516139]).

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Corcept reported revenue of $21.7 million and GAAP net income of $2.6 million for the third quarter of 2016, compared to revenue of $13.3 million and a GAAP net loss of $0.6 million for the third quarter of 2015. The company’s cash and cash equivalents were $47.9 million at September 30, 2016, an increase of $6.1 million from June 30, 2016.

The company expects that its revenue for 2016 will be $79-82 million, an increase from its original guidance of $76-81 million.

"The productivity of our expanded team of clinical specialists continues to improve," said Joseph K. Belanoff, MD, Corcept’s Chief Executive Officer. "Because of their hard work, the number of patients with Cushing’s syndrome receiving Korlym grew again last quarter, as did the number of physicians prescribing the medication. We do not see a leveling off in this growth. Many endocrinologists have yet to prescribe Korlym and many patients who could benefit from the medication have yet to receive it."

"The success of our Korlym franchise is allowing us to build a development program of exciting breadth and depth," said Robert S. Fishman, MD, Corcept’s Chief Medical Officer. "Our proprietary, selective cortisol modulator CORT125134 – now in its Phase 2 trial – may offer Cushing’s syndrome patients Korlym’s powerful benefits, but without the side effects associated with Korlym’s affinity for the progesterone receptor. We look forward to those results next year.

"Our oncology program continues to progress," added Dr. Fishman. "We are enrolling patients in our Phase 1/2 open-label trial of CORT125134 as a treatment for solid-tumor cancers. Korlym’s efficacy is being investigated as a treatment for patients with triple-negative breast cancer and castration-resistant prostate cancer. Stacie Shepherd, MD, PhD, a senior oncology development executive from Abbvie, joined us last quarter to lead the program.

"Our pipeline will broaden significantly next year, when we expect to advance to the clinic additional selective cortisol modulators that have shown great promise in animal models of solid-tumor cancers and metabolic disorders, including fatty liver disease."

Financial Discussion

Corcept’s GAAP net income for the third quarter of 2016 was $2.6 million, compared to a GAAP net loss of $0.6 million for the third quarter of 2015. Excluding non-cash expenses related to stock-based compensation and accreted interest on the company’s capped royalty obligation (the "Royalty Financing"), Corcept generated $4.9 million of non-GAAP net income in the third quarter of 2016, compared to non-GAAP net income of $1.6 million in the third quarter of 2015. A reconciliation of GAAP to non-GAAP net operating results is set forth below.

Operating expenses for the third quarter of 2016 increased to $18.7 million, from $13.2 million in the third quarter of 2015, primarily due to: (i) increased employee compensation expense associated with expansion of the company’s commercial and clinical development teams; (ii) growth in patient support costs, distribution expenses and commissions resulting from higher sales volumes; and (iii) increased spending on the clinical development of CORT125134.

Corcept’s cash and cash equivalents totaled $47.9 million at September 30, 2016, compared to $41.8 million at June 30, 2016. These cash balances reflect scheduled payments made under the Royalty Financing of $4.0 million and $3.3 million in the third and second quarters of 2016, respectively. The company expects to make its final payment under the Royalty Financing in 2017.

Conference Call

Corcept will hold a conference call on November 1, 2016, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to discuss this announcement. To participate, dial 1-800-446-1671 from the United States or 1-847-413-3362 internationally approximately ten minutes before the start of the call. The passcode will be 43632675. A replay will be available through November 15, 2016 at 1-888-843-7419 from the United States and 1-630-652-3042 internationally. The passcode for the replay will be 43632675.

About Cushing’s Syndrome

Endogenous Cushing’s syndrome is caused by prolonged exposure of the body’s tissues to high levels of the hormone cortisol and is generated by tumors that produce cortisol or ACTH. Cushing’s syndrome is an orphan indication that most commonly affects adults aged 20-50. An estimated 10-15 of every one million people are newly diagnosed with this syndrome each year, resulting in over 3,000 new patients annually in the United States. An estimated 20,000 patients in the United States have Cushing’s syndrome. Symptoms vary, but most people have one or more of the following manifestations: high blood sugar, diabetes, high blood pressure, upper body obesity, rounded face, increased fat around the neck, thinning arms and legs, severe fatigue and weak muscles. Irritability, anxiety, cognitive disturbances and depression are also common. Cushing’s syndrome can affect every organ system in the body and can be lethal if not treated effectively.

About Triple-Negative Breast Cancer

Triple-negative breast cancer is a form of the disease in which the three receptors that fuel most breast cancer growth – estrogen, progesterone and the HER-2/neu gene – are not present. Because the tumor cells lack the necessary receptors, treatments that target estrogen, progesterone and HER-2 receptors are ineffective. In 2013, approximately 40,000 women were diagnosed with triple-negative breast cancer. Corcept estimates that more than 75 percent of these women’s tumor cells express the GR receptor to which cortisol binds. There is no FDA-approved treatment and neither a targeted treatment nor an approved standard chemotherapy regimen for patients with relapsed triple-negative disease exists.

About Korlym

Korlym modulates the effect of cortisol at the glucocorticoid receptor, one of the two receptors to which cortisol binds, thereby inhibiting the effects of excess cortisol in patients with Cushing’s syndrome. Since 2012, Corcept has made Korlym available as a once-daily oral treatment of hyperglycemia secondary to endogenous Cushing’s syndrome in adult patients with glucose intolerance or diabetes mellitus type 2 who have failed surgery or are not candidates for surgery. Korlym was the first FDA-approved treatment for that illness. The FDA has designated it as an Orphan Drug for that indication.

About CORT125134

CORT125134 is the lead compound in Corcept’s portfolio of selective cortisol modulators. It is a non-steroidal competitive antagonist of the glucocorticoid receptor that does not bind to the body’s other hormone receptors, including the progesterone receptor. It is the affinity of Korlym for the progesterone receptor that results in termination of pregnancy and can cause endometrial thickening and irregular vaginal bleeding in some women. CORT125134 will not have these effects. Corcept is currently studying the compound in two clinical trials, one for the treatment of patients with Cushing’s syndrome and another for patients suffering from solid-tumor cancers. CORT125134 is proprietary to Corcept and is protected by composition of matter and method of use patents extending to 2033.

On November 1, 2016 NewLink Genetics Corporation (NASDAQ:NLNK), a biopharmaceutical company focused on bringing novel immuno-oncology therapies to patients with cancer, reported consolidated financial results for the third quarter of 2016 and progress in its clinical and pipeline development programs (Press release, NewLink Genetics, NOV 1, 2016, View Source [SID1234516135]).

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"We continue to focus our clinical developmental efforts targeting the IDO pathway. We have two distinct IDO pathway inhibitors advancing in the clinic, GDC-0919 with our partner Genentech and indoximod, our proprietary IDO pathway inhibitor," said Charles J. Link, Jr. MD, Chairman, Chief Executive Officer and Chief Scientific Officer. "We are also encouraged by recent clinical data that increasingly validate the IDO pathway as an important target in immuno-oncology."

The Company hosted an investor day on October 25, outlining its vision and execution plans for the future. A webcast of the Company’s presentations can be found at View Source

"As described at our investor day, we believe 2017 will be an important year in the development of both GDC-0919 and indoximod and we look forward to providing further updates and results," added Nicholas N. Vahanian, MD, President and Chief Medical Officer.

The program featured leaders in the field of immuno-oncology and pioneers in the science of IDO: George C. Prendergast, PhD, President & CEO, Lankenau Institute for Medical Research (LIMR) and Editor in Chief, Cancer Research; David H. Munn, MD, Professor of Pediatric Hematology-Oncology, Medical College of Georgia, Augusta University; Montaser Shaheen MD, Associate Professor, University of New Mexico Cancer Center; and Ashkan Emadi, MD, PhD, Associate Professor, University of Maryland.

Key takeaways from the Investor Day included:

1. Validation of IDO as a Target. The IDO pathway can allow cancer to escape the immune system. Many cancers have developed the ability to employ IDO to evade immune attack. We believe clinical results are increasingly validating the IDO pathway as a target for cancer therapies. Just as scientists discovered the role of PD-1/PD-L1 expression and the usefulness of PD-1/PD-L1 blockade, there is an increasing body of research into the role of the IDO pathway in cancer.

2. NewLink’s Two IDO Pathway Inhibitor Clinical Candidates. NewLink Genetics is engaged in clinical trials for two IDO pathway inhibitor product candidates, each with its own distinct mechanism of action.

GDC-0919, a direct IDO enzymatic inhibitor, is being developed in partnership with Genentech. GDC-0919 is currently in a Phase 1b trial, in combination with atezolizumab in solid tumors. In October, 2014, NewLink and Genentech entered in to a license and collaboration agreement with an upfront payment of $150 million, more than $1 billion in potential milestones, and substantial royalties.
Indoximod, an IDO pathway inhibitor, is proprietary to NewLink Genetics. Indoximod is being tested in the clinic in multiple indications including melanoma, pancreatic cancer, malignant brain tumors, breast cancer, acute myeloid leukemia, and non-small cell lung cancer.
3. Indoximod Clinical Development. The Company reported that it will evaluate the data and report on several clinical trials underway in 2017. Furthermore, our clinical development strategy for indoximod includes formulation optimization intended to improve the candidate’s clinical and commercial potential.

4. Future R&D. NewLink also discussed its program targeting the PTEN pathway in regulatory T cells (Treg cells) as a central driver of tumor immunosuppression. NewLink Genetics is an early leader in the field of PTEN research, just as it was in developing IDO as a potential pathway for immune suppression in cancer.

Financial Results for the Three-Month Period Ended September 30, 2016

Cash Position: NewLink Genetics ended the quarter on September 30, 2016, with cash and equivalents totaling $148.3 million, compared to $197.8 million for the year ending December 31, 2015.

R&D Expenses: Research and development expenses in the third quarter of 2016 were $24.5 million, compared to $22.5 million during the comparable period in 2015. The increase was primarily due to a $3.2 million increase in contract manufacturing costs, a $340,000 increase in stock compensation expense, and a $400,000 increase in clinical trial expenses, offset by a decrease in equipment and supplies of $1.3 million, wages of $490,000 and a $160,000 decrease in consulting.

G&A Expenses: General and administrative expenses in the third quarter of 2016 were $7.7 million compared to $7.4 million during the comparable period in 2015. The increase was due primarily to an increase of $300,000 in consulting and personnel-related expenses.

Net Income/Loss: NewLink Genetics reported a net loss of $15.5 million, or a loss of $0.54 per diluted share, for the third quarter of 2016, compared to a net loss of $15.9 million, or a loss of $0.55 per diluted share, for the comparable period in 2015.

NewLink Genetics ended the quarter with 29,091,652 shares outstanding.

Financial Guidance and Upcoming Investor Meetings

NewLink Genetics expects to have approximately $132 million in cash and equivalents on December 31, 2016.

We have presented at seven investor meetings and conferences since the beginning of the year, including our own investor day held last week. We expect to present at three upcoming conferences in New York City, including the Global Mizuho Investor Conference on November 14, the Stifel 2016 Healthcare Conference on November 15, and the Piper Jaffray 28th Annual Healthcare Conference on November 29.